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<SEC-DOCUMENT>0000950152-06-006747.txt : 20060809
<SEC-HEADER>0000950152-06-006747.hdr.sgml : 20060809
<ACCEPTANCE-DATETIME>20060809124634
ACCESSION NUMBER:		0000950152-06-006747
CONFORMED SUBMISSION TYPE:	10-Q
PUBLIC DOCUMENT COUNT:		8
CONFORMED PERIOD OF REPORT:	20060630
FILED AS OF DATE:		20060809
DATE AS OF CHANGE:		20060809

FILER:

	COMPANY DATA:	
		COMPANY CONFORMED NAME:			OLYMPIC STEEL INC
		CENTRAL INDEX KEY:			0000917470
		STANDARD INDUSTRIAL CLASSIFICATION:	WHOLESALE-METALS SERVICE CENTERS & OFFICES [5051]
		IRS NUMBER:				341245650
		STATE OF INCORPORATION:			OH
		FISCAL YEAR END:			1231

	FILING VALUES:
		FORM TYPE:		10-Q
		SEC ACT:		1934 Act
		SEC FILE NUMBER:	000-23320
		FILM NUMBER:		061016260

	BUSINESS ADDRESS:	
		STREET 1:		5080 RICHMOND RD
		CITY:			BEDFORD HEIGHTS
		STATE:			OH
		ZIP:			44146
		BUSINESS PHONE:		2162923800

	MAIL ADDRESS:	
		STREET 1:		5096 RICHMOND RD
		CITY:			BEDFORD HEIGHTS
		STATE:			OH
		ZIP:			44146
</SEC-HEADER>
<DOCUMENT>
<TYPE>10-Q
<SEQUENCE>1
<FILENAME>l21383ae10vq.htm
<DESCRIPTION>OLYMPIC STEEL, INC.  10-Q/QTR END 6-30-06
<TEXT>
<HTML>
<HEAD>
<TITLE>Olympic Steel, Inc.  10-Q</TITLE>
</HEAD>
<BODY bgcolor="#FFFFFF">
<!-- PAGEBREAK -->
<H5 align="left" style="page-break-before:always">&nbsp;</H5><P>
<DIV style="font-family: 'Times New Roman',Times,serif">





<DIV style="width: 100%; border-bottom: 2pt solid black; font-size: 1pt">&nbsp;</DIV>
<DIV style="width: 100%; border-bottom: 1pt solid black; font-size: 1pt">&nbsp;</DIV>




<DIV align="center" style="font-size: 14pt; margin-top: 12pt"><B>UNITED STATES SECURITIES AND EXCHANGE COMMISSION</B>
</DIV>

<DIV align="center" style="font-size: 12pt"><B>Washington, D.C. 20549</B>
</DIV>


<DIV align="center">
<DIV style="font-size: 3pt; margin-top: 16pt; width: 18%; border-top: 1px solid #000000">&nbsp;</DIV>
</DIV>

<DIV align="center" style="font-size: 18pt; margin-top: 6pt"><B>Form&nbsp;10-Q</B>
</DIV>

<DIV align="center">
<DIV style="font-size: 3pt; margin-top: 10pt; width: 18%; border-top: 1px solid #000000">&nbsp;</DIV>
</DIV>

<DIV align="center">
<TABLE cellspacing="0" border="0" cellpadding="0" width="100%" style="font-size: 12pt">
<TR style="font-size: 6pt">
    <TD width="7%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="88%">&nbsp;</TD>
</TR>
<TR valign="top">
    <TD align="center"><FONT face="Wingdings">&#254;</FONT></TD>
    <TD>&nbsp;</TD>
    <TD><B>QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934</B></TD>
</TR>
</TABLE>
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 12%"><B>For the quarterly period ended June&nbsp;30, 2006
</B>
</DIV>

<DIV align="center">
<TABLE cellspacing="0" border="0" cellpadding="0" width="100%" style="font-size: 12pt">
<TR style="font-size: 6pt">
    <TD width="7%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="88%">&nbsp;</TD>
</TR>
<TR valign="top">
    <TD align="center"><FONT face="Wingdings">&#111;</FONT></TD>
    <TD>&nbsp;</TD>
    <TD><B>TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934</B></TD>
</TR>
</TABLE>
</DIV>

<DIV align="center" style="font-size: 10pt; margin-top: 12pt"><B>Commission File Number 0-23320</B></DIV>

<DIV align="center" style="font-size: 24pt; margin-top: 12pt"><B>OLYMPIC STEEL, INC.</B>
</DIV>

<DIV align="center" style="font-size: 10pt">(Exact name of registrant as specified in its charter)</DIV>


<DIV align="center">
<TABLE style="font-size: 10pt" cellspacing="0" border="0" cellpadding="0" width="100%">
<!-- Begin Table Head -->
<TR valign="bottom">
    <TD width="47%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="47%">&nbsp;</TD>
</TR>
<!-- End Table Head -->
<!-- Begin Table Body -->
<TR valign="bottom">
    <TD align="center" valign="top">Ohio
</TD>
    <TD>&nbsp;</TD>
    <TD align="center" valign="top">34-1245650</TD>
</TR>
<TR style="font-size: 1px">
    <TD align="center" valign="top" style="border-top: 1px solid #000000">&nbsp;
</TD>
    <TD>&nbsp;</TD>
    <TD align="center" valign="top" style="border-top: 1px solid #000000">&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD align="center" valign="top">(State or other jurisdiction of<BR>
incorporation or organization)
</TD>
    <TD>&nbsp;</TD>
    <TD align="center" valign="top">(I.R.S. Employer<BR>
Identification Number)</TD>
</TR>
<TR valign="bottom">
    <TD align="center" valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="center" valign="top">&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD align="center" valign="top">5096 Richmond Road, Bedford Heights, Ohio
</TD>
    <TD>&nbsp;</TD>
    <TD align="center" valign="top">44146</TD>
</TR>
<TR style="font-size: 1px">
    <TD align="center" valign="top" style="border-top: 1px solid #000000">&nbsp;
</TD>
    <TD>&nbsp;</TD>
    <TD align="center" valign="top" style="border-top: 1px solid #000000">&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD align="center" valign="top">(Address of principal executive offices)
</TD>
    <TD>&nbsp;</TD>
    <TD align="center" valign="top">(Zip Code)</TD>
</TR>
<!-- End Table Body -->
</TABLE>
</DIV>


<DIV align="Center" style="font-size: 10pt; margin-top: 6pt">Registrant&#146;s telephone number, including area code <U>(216)&nbsp;292-3800</U>

</DIV>
<DIV align="left" style="font-size: 10pt; margin-top: 6pt">Indicate by check mark whether the registrant (1)&nbsp;has filed all reports required to be filed by
Section&nbsp;13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12&nbsp;months (or for
such shorter period that the registrant was required to file such reports), and (2)&nbsp;has been
subject to such filing requirements for the past 90&nbsp;days. Yes <FONT face="Wingdings">&#254;</FONT> No <FONT face="Wingdings">&#111;</FONT>
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">Indicate by check mark whether the registrant is a large accelerated file, an accelerated filer or
a non-accelerated filer. See definition of &#147;accelerated filer and large accelerated filer&#148; in Rule
12b-2 of the Exchange Act.
</DIV>

<DIV align="left">
<TABLE style="font-size: 10pt" cellspacing="0" border="0" cellpadding="0" width="60%">
<!-- Begin Table Head -->
<!-- End Table Head -->
<!-- Begin Table Body -->
<TR valign="bottom">
    <TD align="center" valign="top" nowrap>Large accelerated filer <FONT face="Wingdings">&#111;</FONT>
</TD>
    <TD>&nbsp;</TD>
    <TD align="center" valign="top">Accelerated filer <FONT face="Wingdings">&#254;</FONT>
</TD>
    <TD>&nbsp;</TD>
    <TD align="center" valign="top">Non-accelerated filer <FONT face="Wingdings">&#111;</FONT></TD>
</TR>
<TR valign="bottom" style="font-size: 6pt">
    <TD width="30%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="30%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="30%">&nbsp;</TD>
</TR>

<!-- End Table Body -->
</TABLE>
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 0pt">Indicate by check mark whether the registrant is a shell company (as defined Rule&nbsp;12b-2 of the
Exchange Act). Yes <FONT face="Wingdings">&#111;</FONT> No <FONT face="Wingdings">&#254;</FONT>
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">Indicate the number of shares of each of the issuer&#146;s classes of common stock, as of the latest
practicable date:
</DIV>

<DIV align="center">
<TABLE style="font-size: 10pt" cellspacing="0" border="0" cellpadding="0" width="100%">
<!-- Begin Table Head -->
<TR valign="bottom">
    <TD width="47%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="47%">&nbsp;</TD>
</TR>
<!-- End Table Head -->
<!-- Begin Table Body -->
<TR valign="bottom">
    <TD align="center" valign="top">Class
</TD>
    <TD>&nbsp;</TD>
    <TD align="center" valign="top">Outstanding as of August&nbsp;9, 2006</TD>
</TR>
<TR style="font-size: 1px">
    <TD align="center" valign="top" style="border-top: 1px solid #000000">&nbsp;
</TD>
    <TD>&nbsp;</TD>
    <TD align="center" valign="top" style="border-top: 1px solid #000000">&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD align="center" valign="top">Common stock, without par value
</TD>
    <TD>&nbsp;</TD>
    <TD align="center" valign="top">10,427,827</TD>
</TR>
<!-- End Table Body -->
</TABLE>
</DIV>


<DIV style="width: 100%; border-bottom: 1pt solid black; margin-top: 10pt; font-size: 1pt">&nbsp;</DIV>
<DIV style="width: 100%; border-bottom: 2pt solid black; font-size: 1pt">&nbsp;</DIV>





<P align="center" style="font-size: 10pt">&nbsp;
</DIV>

<!-- PAGEBREAK -->
<P><HR noshade><P>
<H5 align="left" style="page-break-before:always">&nbsp;</H5><P>

<DIV style="font-family: 'Times New Roman',Times,serif">


<DIV align="center" style="font-size: 10pt; margin-top: 18pt"><B>Olympic Steel, Inc.<BR>
Index to Form&nbsp;10-Q</B>
</DIV>

<DIV align="center">
<TABLE style="font-size: 10pt" cellspacing="0" border="0" cellpadding="0" width="100%">
<!-- Begin Table Head -->
<TR valign="bottom">
    <TD width="88%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
</TR>
<TR style="font-size: 8pt" valign="bottom">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="2" style="border-bottom: 1px solid #000000"><B>Page No.</B></TD>
    <TD>&nbsp;</TD>
</TR>

<!-- End Table Head -->
<!-- Begin Table Body -->
<TR valign="bottom">
    <TD><DIV style="margin-left:15px; text-indent:-15px"><B>Part I. FINANCIAL INFORMATION</B></DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom"><!-- Blank Space -->
    <TD><DIV style="margin-left:15px; text-indent:-15px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:30px; text-indent:-15px"><B>Item&nbsp;1. Financial Statements</B></DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom"><!-- Blank Space -->
    <TD><DIV style="margin-left:15px; text-indent:-15px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:45px; text-indent:-15px">Consolidated Balance Sheets &#151; June&nbsp;30, 2006 (unaudited)</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right"><B>3</B></TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:45px; text-indent:-15px">and December&nbsp;31, 2005 (audited)</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom"><!-- Blank Space -->
    <TD><DIV style="margin-left:15px; text-indent:-15px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:45px; text-indent:-15px">Consolidated Statements of Operations &#151; for the three and</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right"><B>4</B></TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:45px; text-indent:-15px">six months ended June&nbsp;30, 2006 and 2005 (unaudited)</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom"><!-- Blank Space -->
    <TD><DIV style="margin-left:15px; text-indent:-15px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:45px; text-indent:-15px">Consolidated Statements of Cash Flows &#151; for the six months</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right"><B>5</B></TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:45px; text-indent:-15px">ended June&nbsp;30, 2006 and 2005 (unaudited)</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom"><!-- Blank Space -->
    <TD><DIV style="margin-left:15px; text-indent:-15px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:45px; text-indent:-15px">Notes to Consolidated Financial Statements</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right"><B>6-13</B></TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom"><!-- Blank Space -->
    <TD><DIV style="margin-left:15px; text-indent:-15px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">

<TD><DIV style="margin-left:30px; text-indent:-15px"><B>Item&nbsp;2. Management&#146;s Discussion and Analysis of Financial Condition and Results of Operations</B></DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right"><B>14-23</B></TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom"><!-- Blank Space -->
    <TD><DIV style="margin-left:15px; text-indent:-15px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:30px; text-indent:-15px"><B>Item&nbsp;3. Qualitative and Quantitative Disclosure About Market Risk</B></DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right"><B>23-24</B></TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom"><!-- Blank Space -->
    <TD><DIV style="margin-left:15px; text-indent:-15px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:30px; text-indent:-15px"><B>Item&nbsp;4. Controls and Procedures</B></DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right"><B>24-25</B></TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom"><!-- Blank Space -->
    <TD><DIV style="margin-left:15px; text-indent:-15px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:15px; text-indent:-15px"><B>Part II. OTHER INFORMATION</B></DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom"><!-- Blank Space -->
    <TD><DIV style="margin-left:15px; text-indent:-15px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:30px; text-indent:-15px"><B>Item&nbsp;1A. Risk Factors</B></DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right"><B>26-28</B></TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom"><!-- Blank Space -->
    <TD><DIV style="margin-left:15px; text-indent:-15px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:30px; text-indent:-15px"><B>Item&nbsp;4. Submission of Matters to a Vote of Security Holders</B></DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right"><B>28</B></TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom"><!-- Blank Space -->
    <TD><DIV style="margin-left:15px; text-indent:-15px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:30px; text-indent:-15px"><B>Item&nbsp;5. Other Items</B></DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right"><B>29-30</B></TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom"><!-- Blank Space -->
    <TD><DIV style="margin-left:15px; text-indent:-15px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:30px; text-indent:-15px"><B>Item&nbsp;6. Exhibits</B></DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right"><B>30</B></TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom"><!-- Blank Space -->
    <TD><DIV style="margin-left:15px; text-indent:-15px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:15px; text-indent:-15px"><B>SIGNATURES</B></DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right"><B>31</B></TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom"><!-- Blank Space -->
    <TD><DIV style="margin-left:15px; text-indent:-15px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:15px; text-indent:-15px"><B>EXHIBITS</B></DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right"><B>32-77</B></TD>
    <TD>&nbsp;</TD>
</TR>
<!-- End Table Body -->
</TABLE>
</DIV>


<P align="center" style="font-size: 10pt"> 2 of 77
</DIV>

<!-- PAGEBREAK -->
<P><HR noshade><P>
<H5 align="left" style="page-break-before:always">&nbsp;</H5><P>

<DIV style="font-family: 'Times New Roman',Times,serif">


<DIV align="left" style="font-size: 10pt; margin-top: 12pt"><B>Part I. FINANCIAL INFORMATION</B><br>
<B>Item&nbsp;1. </B><B><I>Financial Statements</I></B>
</DIV>


<DIV align="center" style="font-size: 10pt; margin-top: 18pt"><B>Olympic Steel, Inc.<BR>
Consolidated Balance Sheets</B>
</DIV>


<DIV align="Center" style="font-size: 10pt; margin-top: 6pt"><B>(in thousands)</B>

</DIV>
<DIV align="center">
<TABLE style="font-size: 10pt" cellspacing="0" border="0" cellpadding="0" width="100%">
<!-- Begin Table Head -->
<TR valign="bottom">
    <TD width="76%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
</TR>
<TR style="font-size: 8pt" valign="bottom">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="2"><B>June 30,</B></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="2"><B>December 31,</B></TD>
    <TD>&nbsp;</TD>
</TR>
<TR style="font-size: 8pt" valign="bottom">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="2" style="border-bottom: 1px solid #000000"><B>2006</B></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="2" style="border-bottom: 1px solid #000000"><B>2005</B></TD>
    <TD>&nbsp;</TD>
</TR>
<TR style="font-size: 8pt" valign="bottom">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="2"><B>(unaudited)</B></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>

<!-- End Table Head -->
<!-- Begin Table Body -->
<TR valign="bottom" style="background: #cceeff">
    <TD align="center"><DIV style="margin-left:75px; text-indent:-15px"><B>Assets</B></DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:15px; text-indent:-15px"><B>Cash and cash equivalents</B></DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left"><B>$</B></TD>
    <TD align="right"><B>4,099</B></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left"><B>$</B></TD>
    <TD align="right"><B>9,555</B></TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom" style="background: #cceeff">
    <TD><DIV style="margin-left:15px; text-indent:-15px"><B>Accounts receivable, net</B></DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right"><B>108,196</B></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right"><B>80,131</B></TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:15px; text-indent:-15px"><B>Inventories</B></DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right"><B>172,379</B></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right"><B>134,236</B></TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom" style="background: #cceeff">
    <TD><DIV style="margin-left:15px; text-indent:-15px"><B>Prepaid expenses and other</B></DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right"><B>4,743</B></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right"><B>3,733</B></TD>
    <TD>&nbsp;</TD>
</TR>
<TR style="font-size: 1px">
    <TD><DIV style="margin-left:15px; text-indent:-15px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD nowrap colspan="2" align="right" style="border-top: 1px solid #000000">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap colspan="2" align="right" style="border-top: 1px solid #000000">&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:30px; text-indent:-15px"><B>Total current assets</B></DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right"><B>289,417</B></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right"><B>227,655</B></TD>
    <TD>&nbsp;</TD>
</TR>
<TR style="font-size: 1px">
    <TD><DIV style="margin-left:15px; text-indent:-15px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD nowrap colspan="2" align="right" style="border-top: 1px solid #000000">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap colspan="2" align="right" style="border-top: 1px solid #000000">&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom" style="background: #cceeff">
    <TD><DIV style="margin-left:15px; text-indent:-15px"><B>Property and equipment, at cost</B></DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right"><B>170,025</B></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right"><B>155,231</B></TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:15px; text-indent:-15px"><B>Accumulated depreciation</B></DIV></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="left">&nbsp;</TD>
    <TD align="right"><B>(82,473</B></TD>
    <TD nowrap><B>)</B></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="left">&nbsp;</TD>
    <TD align="right"><B>(77,480</B></TD>
    <TD nowrap><B>)</B></TD>
</TR>
<TR style="font-size: 1px">
    <TD><DIV style="margin-left:15px; text-indent:-15px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD nowrap colspan="2" align="right" style="border-top: 1px solid #000000">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap colspan="2" align="right" style="border-top: 1px solid #000000">&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom" style="background: #cceeff">
    <TD><DIV style="margin-left:30px; text-indent:-15px"><B>Net property and equipment</B></DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right"><B>87,552</B></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right"><B>77,751</B></TD>
    <TD>&nbsp;</TD>
</TR>
<TR style="font-size: 1px">
    <TD><DIV style="margin-left:15px; text-indent:-15px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD nowrap colspan="2" align="right" style="border-top: 1px solid #000000">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap colspan="2" align="right" style="border-top: 1px solid #000000">&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:15px; text-indent:-15px"><B>Investments in joint ventures</B></DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right"><B>&#151;</B></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right"><B>200</B></TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom" style="background: #cceeff">
    <TD><DIV style="margin-left:15px; text-indent:-15px"><B>Goodwill</B></DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right"><B>6,689</B></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">&#151;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:15px; text-indent:-15px"><B>Other long-term assets</B></DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right"><B>2,983</B></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">&#151;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR style="font-size: 1px">
    <TD><DIV style="margin-left:15px; text-indent:-15px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD nowrap colspan="2" align="right" style="border-top: 1px solid #000000">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap colspan="2" align="right" style="border-top: 1px solid #000000">&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom" style="background: #cceeff">
    <TD><DIV style="margin-left:30px; text-indent:-15px"><B>Total assets</B></DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left"><B>$</B></TD>
    <TD align="right"><B>386,641</B></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left"><B>$</B></TD>
    <TD align="right"><B>305,606</B></TD>
    <TD>&nbsp;</TD>
</TR>
<TR style="font-size: 1px">
    <TD><DIV style="margin-left:15px; text-indent:-15px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD nowrap colspan="2" align="right" style="border-top: 3px double #000000">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap colspan="2" align="right" style="border-top: 3px double #000000">&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom"><!-- Blank Space -->
    <TD><DIV style="margin-left:15px; text-indent:-15px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD align="center"><DIV style="margin-left:60px; text-indent:-15px"><B>Liabilities</B></DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom" style="background: #cceeff">
    <TD><DIV style="margin-left:15px; text-indent:-15px"><B>Current portion of long-term debt</B></DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left"><B>$</B></TD>
    <TD align="right"><B>1,987</B></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left"><B>$</B></TD>
    <TD align="right">&#151;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:15px; text-indent:-15px"><B>Accounts payable</B></DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right"><B>92,844</B></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right"><B>77,412</B></TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom" style="background: #cceeff">
    <TD><DIV style="margin-left:15px; text-indent:-15px"><B>Accrued payroll</B></DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right"><B>7,467</B></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right"><B>6,239</B></TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:15px; text-indent:-15px"><B>Other accrued liabilities</B></DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right"><B>10,628</B></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right"><B>10,952</B></TD>
    <TD>&nbsp;</TD>
</TR>
<TR style="font-size: 1px">
    <TD><DIV style="margin-left:15px; text-indent:-15px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD nowrap colspan="2" align="right" style="border-top: 1px solid #000000">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap colspan="2" align="right" style="border-top: 1px solid #000000">&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom" style="background: #cceeff">
    <TD><DIV style="margin-left:30px; text-indent:-15px"><B>Total current liabilities</B></DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right"><B>112,926</B></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right"><B>94,603</B></TD>
    <TD>&nbsp;</TD>
</TR>
<TR style="font-size: 1px">
    <TD><DIV style="margin-left:15px; text-indent:-15px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD nowrap colspan="2" align="right" style="border-top: 1px solid #000000">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap colspan="2" align="right" style="border-top: 1px solid #000000">&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:15px; text-indent:-15px"><B>Credit facility revolver</B></DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right"><B>42,492</B></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">&#151;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom" style="background: #cceeff">
    <TD><DIV style="margin-left:15px; text-indent:-15px"><B>Other long-term liabilities</B></DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right"><B>4,392</B></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right"><B>2,962</B></TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:15px; text-indent:-15px"><B>Deferred income taxes</B></DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right"><B>6,712</B></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right"><B>7,720</B></TD>
    <TD>&nbsp;</TD>
</TR>
<TR style="font-size: 1px">
    <TD><DIV style="margin-left:15px; text-indent:-15px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD nowrap colspan="2" align="right" style="border-top: 1px solid #000000">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap colspan="2" align="right" style="border-top: 1px solid #000000">&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom" style="background: #cceeff">
    <TD><DIV style="margin-left:30px; text-indent:-15px"><B>Total liabilities</B></DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right"><B>166,522</B></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right"><B>105,285</B></TD>
    <TD>&nbsp;</TD>
</TR>
<TR style="font-size: 1px">
    <TD><DIV style="margin-left:15px; text-indent:-15px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD nowrap colspan="2" align="right" style="border-top: 1px solid #000000">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap colspan="2" align="right" style="border-top: 1px solid #000000">&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom"><!-- Blank Space -->
    <TD><DIV style="margin-left:15px; text-indent:-15px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD align="center"><DIV style="margin-left:45px; text-indent:-15px"><B>Shareholders&#146; Equity</B></DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom" style="background: #cceeff">
    <TD><DIV style="margin-left:15px; text-indent:-15px"><B>Preferred stock</B></DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right"><B>&#151;</B></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">&#151;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:15px; text-indent:-15px"><B>Common stock</B></DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right"><B>109,027</B></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right"><B>104,956</B></TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom" style="background: #cceeff">
    <TD><DIV style="margin-left:15px; text-indent:-15px"><B>Retained earnings</B></DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right"><B>111,092</B></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right"><B>95,365</B></TD>
    <TD>&nbsp;</TD>
</TR>
<TR style="font-size: 1px">
    <TD><DIV style="margin-left:15px; text-indent:-15px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD nowrap colspan="2" align="right" style="border-top: 1px solid #000000">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap colspan="2" align="right" style="border-top: 1px solid #000000">&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:30px; text-indent:-15px"><B>Total shareholders&#146; equity</B></DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right"><B>220,119</B></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right"><B>200,321</B></TD>
    <TD>&nbsp;</TD>
</TR>
<TR style="font-size: 1px">
    <TD><DIV style="margin-left:15px; text-indent:-15px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD nowrap colspan="2" align="right" style="border-top: 1px solid #000000">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap colspan="2" align="right" style="border-top: 1px solid #000000">&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom" style="background: #cceeff">
    <TD><DIV style="margin-left:30px; text-indent:-15px"><B>Total liabilities and shareholders&#146; equity</B></DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left"><B>$</B></TD>
    <TD align="right"><B>386,641</B></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left"><B>$</B></TD>
    <TD align="right"><B>305,606</B></TD>
    <TD>&nbsp;</TD>
</TR>
<TR style="font-size: 1px">
    <TD><DIV style="margin-left:15px; text-indent:-15px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
        <TD nowrap colspan="2" align="right" style="border-top: 3px double #000000">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
        <TD nowrap colspan="2" align="right" style="border-top: 3px double #000000">&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<!-- End Table Body -->
</TABLE>
</DIV>


<DIV align="center" style="font-size: 10pt; margin-top: 18pt"><B><I>The accompanying notes are an integral part of these balance sheets.</I></B>
</DIV>



<P align="center" style="font-size: 10pt"> 3 of 77
</DIV>

<!-- PAGEBREAK -->
<P><HR noshade><P>
<H5 align="left" style="page-break-before:always">&nbsp;</H5><P>

<DIV style="font-family: 'Times New Roman',Times,serif">





<DIV align="center" style="font-size: 10pt; margin-top: 18pt"><B>Olympic Steel, Inc.<BR>
Consolidated Statements of Operations</B>
</DIV>


<DIV align="Center" style="font-size: 10pt; margin-top: 6pt"><B>(in thousands, except per share and tonnage data)</B>

</DIV>
<DIV align="center">
<TABLE style="font-size: 10pt" cellspacing="0" border="0" cellpadding="0" width="100%">
<!-- Begin Table Head -->
<TR valign="bottom">
    <TD width="52%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
</TR>
<TR style="font-size: 8pt" valign="bottom">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="6"><B>Three Months Ended</B></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="6"><B>Six Months Ended</B></TD>
    <TD>&nbsp;</TD>
</TR>
<TR style="font-size: 8pt" valign="bottom">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="6" style="border-bottom: 1px solid #000000"><B>June 30,</B></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="6" style="border-bottom: 1px solid #000000"><B>June 30,</B></TD>
    <TD>&nbsp;</TD>
</TR>
<TR style="font-size: 8pt" valign="bottom">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="2" style="border-bottom: 1px solid #000000"><B>2006</B></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="2" style="border-bottom: 1px solid #000000"><B>2005</B></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="2" style="border-bottom: 1px solid #000000"><B>2006</B></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="2" style="border-bottom: 1px solid #000000"><B>2005</B></TD>
    <TD>&nbsp;</TD>
</TR>
<TR style="font-size: 8pt" valign="bottom">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="6"><B>(unaudited)</B></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="6"><B>(unaudited)</B></TD>
    <TD>&nbsp;</TD>
</TR>

<!-- End Table Head -->
<!-- Begin Table Body -->
<TR valign="bottom" style="background: #cceeff">
    <TD><DIV style="margin-left:15px; text-indent:-15px"><B>Tons sold</B></DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:30px; text-indent:-15px"><B>Direct</B></DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right"><B>287,810</B></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right"><B>270,628</B></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right"><B>569,615</B></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right"><B>584,516</B></TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom" style="background: #cceeff">
    <TD><DIV style="margin-left:30px; text-indent:-15px"><B>Toll</B></DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right"><B>54,775</B></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right"><B>48,018</B></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right"><B>111,139</B></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right"><B>93,983</B></TD>
    <TD>&nbsp;</TD>
</TR>
<TR style="font-size: 1px">
    <TD><DIV style="margin-left:15px; text-indent:-15px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD nowrap colspan="2" align="right" style="border-top: 1px solid #000000">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap colspan="2" align="right" style="border-top: 1px solid #000000">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap colspan="2" align="right" style="border-top: 1px solid #000000">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap colspan="2" align="right" style="border-top: 1px solid #000000">&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:15px; text-indent:-15px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right"><B>342,585</B></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right"><B>318,646</B></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right"><B>680,754</B></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right"><B>678,499</B></TD>
    <TD>&nbsp;</TD>
</TR>
<TR style="font-size: 1px">
    <TD><DIV style="margin-left:15px; text-indent:-15px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD nowrap colspan="2" align="right" style="border-top: 3px double #000000">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap colspan="2" align="right" style="border-top: 3px double #000000">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap colspan="2" align="right" style="border-top: 3px double #000000">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap colspan="2" align="right" style="border-top: 3px double #000000">&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom"><!-- Blank Space -->
    <TD><DIV style="margin-left:15px; text-indent:-15px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom" style="background: #cceeff">
    <TD><DIV style="margin-left:15px; text-indent:-15px"><B>Net sales</B></DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left"><B>$</B></TD>
    <TD align="right"><B>256,155</B></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left"><B>$</B></TD>
    <TD align="right"><B>241,482</B></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left"><B>$</B></TD>
    <TD align="right"><B>495,026</B></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left"><B>$</B></TD>
    <TD align="right"><B>526,040</B></TD>
    <TD>&nbsp;</TD>
</TR>
<TR><TD>&nbsp;</TD></TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:15px; text-indent:-15px"><B>Costs and expenses</B></DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom" style="background: #cceeff">
    <TD><DIV style="margin-left:30px; text-indent:-15px"><B>Cost of materials (exclusive of depreciation
shown below)</B></DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right"><B>202,795</B></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right"><B>205,483</B></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right"><B>394,508</B></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right"><B>440,618</B></TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:30px; text-indent:-15px"><B>Warehouse and processing</B></DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right"><B>13,657</B></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right"><B>10,064</B></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right"><B>25,294</B></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right"><B>20,692</B></TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom" style="background: #cceeff">
    <TD><DIV style="margin-left:30px; text-indent:-15px"><B>Administrative and general</B></DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right"><B>9,743</B></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right"><B>7,044</B></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right"><B>19,047</B></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right"><B>16,317</B></TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:30px; text-indent:-15px"><B>Distribution</B></DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right"><B>6,953</B></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right"><B>5,024</B></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right"><B>13,201</B></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right"><B>10,159</B></TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom" style="background: #cceeff">
    <TD><DIV style="margin-left:30px; text-indent:-15px"><B>Selling</B></DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right"><B>3,597</B></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right"><B>4,761</B></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right"><B>7,033</B></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right"><B>8,798</B></TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:30px; text-indent:-15px"><B>Occupancy</B></DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right"><B>1,272</B></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right"><B>1,139</B></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right"><B>2,963</B></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right"><B>2,638</B></TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom" style="background: #cceeff">
    <TD><DIV style="margin-left:30px; text-indent:-15px"><B>Depreciation</B></DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right"><B>2,096</B></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right"><B>2,030</B></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right"><B>4,104</B></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right"><B>4,048</B></TD>
    <TD>&nbsp;</TD>
</TR>
<TR style="font-size: 1px">
    <TD><DIV style="margin-left:15px; text-indent:-15px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD nowrap colspan="2" align="right" style="border-top: 1px solid #000000">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap colspan="2" align="right" style="border-top: 1px solid #000000">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap colspan="2" align="right" style="border-top: 1px solid #000000">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap colspan="2" align="right" style="border-top: 1px solid #000000">&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:45px; text-indent:-15px"><B>Total costs and expenses</B></DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right"><B>240,113</B></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right"><B>235,545</B></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right"><B>466,150</B></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right"><B>503,270</B></TD>
    <TD>&nbsp;</TD>
</TR>
<TR style="font-size: 1px">
    <TD><DIV style="margin-left:15px; text-indent:-15px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD nowrap colspan="2" align="right" style="border-top: 1px solid #000000">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap colspan="2" align="right" style="border-top: 1px solid #000000">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap colspan="2" align="right" style="border-top: 1px solid #000000">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap colspan="2" align="right" style="border-top: 1px solid #000000">&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom" style="background: #cceeff">
    <TD><DIV style="margin-left:30px; text-indent:-15px"><B>Operating income</B></DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right"><B>16,042</B></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right"><B>5,937</B></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right"><B>28,876</B></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right"><B>22,770</B></TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:15px; text-indent:-15px"><B>Income (loss)&nbsp;from joint ventures</B></DIV></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="left">&nbsp;</TD>
    <TD align="right"><B>(30</B></TD>
    <TD nowrap><B>)</B></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right"><B>200</B></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="left">&nbsp;</TD>
    <TD align="right"><B>(137</B></TD>
    <TD nowrap><B>)</B></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right"><B>443</B></TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom" style="background: #cceeff">
    <TD><DIV style="margin-left:15px; text-indent:-15px"><B>Loss from disposition of joint venture</B></DIV></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="left">&nbsp;</TD>
    <TD align="right"><B>(2,000</B></TD>
    <TD nowrap><B>)</B></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right"><B>&#151;</B></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="left">&nbsp;</TD>
    <TD align="right"><B>(2,000</B></TD>
    <TD nowrap><B>)</B></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">&#151;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR style="font-size: 1px">
    <TD><DIV style="margin-left:15px; text-indent:-15px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD nowrap colspan="2" align="right" style="border-top: 1px solid #000000">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap colspan="2" align="right" style="border-top: 1px solid #000000">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap colspan="2" align="right" style="border-top: 1px solid #000000">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap colspan="2" align="right" style="border-top: 1px solid #000000">&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:30px; text-indent:-15px"><B>Income before financing costs and income taxes</B></DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right"><B>14,012</B></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right"><B>6,137</B></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right"><B>26,739</B></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right"><B>23,213</B></TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom" style="background: #cceeff">
    <TD><DIV style="margin-left:15px; text-indent:-15px"><B>Interest and other expense on debt</B></DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right"><B>345</B></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right"><B>1,380</B></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right"><B>499</B></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right"><B>2,688</B></TD>
    <TD>&nbsp;</TD>
</TR>
<TR style="font-size: 1px">
    <TD><DIV style="margin-left:15px; text-indent:-15px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD nowrap colspan="2" align="right" style="border-top: 1px solid #000000">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap colspan="2" align="right" style="border-top: 1px solid #000000">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap colspan="2" align="right" style="border-top: 1px solid #000000">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap colspan="2" align="right" style="border-top: 1px solid #000000">&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:30px; text-indent:-15px"><B>Income before income taxes</B></DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right"><B>13,667</B></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right"><B>4,757</B></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right"><B>26,240</B></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right"><B>20,525</B></TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom" style="background: #cceeff">
    <TD><DIV style="margin-left:15px; text-indent:-15px"><B>Income tax provision</B></DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right"><B>5,296</B></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right"><B>1,753</B></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right"><B>9,888</B></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right"><B>7,902</B></TD>
    <TD>&nbsp;</TD>
</TR>
<TR style="font-size: 1px">
    <TD><DIV style="margin-left:15px; text-indent:-15px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD nowrap colspan="2" align="right" style="border-top: 1px solid #000000">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap colspan="2" align="right" style="border-top: 1px solid #000000">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap colspan="2" align="right" style="border-top: 1px solid #000000">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap colspan="2" align="right" style="border-top: 1px solid #000000">&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:30px; text-indent:-15px"><B>Net income</B></DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left"><B>$</B></TD>
    <TD align="right"><B>8,371</B></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left"><B>$</B></TD>
    <TD align="right"><B>3,004</B></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left"><B>$</B></TD>
    <TD align="right"><B>16,352</B></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left"><B>$</B></TD>
    <TD align="right"><B>12,623</B></TD>
    <TD>&nbsp;</TD>
</TR>
<TR style="font-size: 1px">
    <TD><DIV style="margin-left:15px; text-indent:-15px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD nowrap colspan="2" align="right" style="border-top: 3px double #000000">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap colspan="2" align="right" style="border-top: 3px double #000000">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap colspan="2" align="right" style="border-top: 3px double #000000">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap colspan="2" align="right" style="border-top: 3px double #000000">&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom"><!-- Blank Space -->
    <TD><DIV style="margin-left:15px; text-indent:-15px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom" style="background: #cceeff">
    <TD><DIV style="margin-left:15px; text-indent:-15px"><B>Earnings per share:</B></DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:30px; text-indent:-15px"><B>Net income per share &#151; basic</B></DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left"><B>$</B></TD>
    <TD align="right"><B>0.80</B></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left"><B>$</B></TD>
    <TD align="right"><B>0.30</B></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left"><B>$</B></TD>
    <TD align="right"><B>1.58</B></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left"><B>$</B></TD>
    <TD align="right"><B>1.25</B></TD>
    <TD>&nbsp;</TD>
</TR>
<TR style="font-size: 1px">
    <TD><DIV style="margin-left:15px; text-indent:-15px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD nowrap colspan="2" align="right" style="border-top: 3px double #000000">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap colspan="2" align="right" style="border-top: 3px double #000000">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap colspan="2" align="right" style="border-top: 3px double #000000">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap colspan="2" align="right" style="border-top: 3px double #000000">&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom" style="background: #cceeff">
    <TD><DIV style="margin-left:30px; text-indent:-15px"><B>Weighted average shares outstanding &#151; basic</B></DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right"><B>10,416</B></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right"><B>10,148</B></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right"><B>10,338</B></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right"><B>10,114</B></TD>
    <TD>&nbsp;</TD>
</TR>
<TR style="font-size: 1px">
    <TD><DIV style="margin-left:15px; text-indent:-15px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD nowrap colspan="2" align="right" style="border-top: 3px double #000000">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap colspan="2" align="right" style="border-top: 3px double #000000">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap colspan="2" align="right" style="border-top: 3px double #000000">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap colspan="2" align="right" style="border-top: 3px double #000000">&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:30px; text-indent:-15px"><B>Net income per share &#151; diluted</B></DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left"><B>$</B></TD>
    <TD align="right"><B>0.79</B></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left"><B>$</B></TD>
    <TD align="right"><B>0.29</B></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left"><B>$</B></TD>
    <TD align="right"><B>1.54</B></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left"><B>$</B></TD>
    <TD align="right"><B>1.21</B></TD>
    <TD>&nbsp;</TD>
</TR>
<TR style="font-size: 1px">
    <TD><DIV style="margin-left:15px; text-indent:-15px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD nowrap colspan="2" align="right" style="border-top: 3px double #000000">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap colspan="2" align="right" style="border-top: 3px double #000000">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap colspan="2" align="right" style="border-top: 3px double #000000">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap colspan="2" align="right" style="border-top: 3px double #000000">&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom" style="background: #cceeff">
    <TD><DIV style="margin-left:30px; text-indent:-15px"><B>Weighted average shares outstanding &#151; diluted</B></DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right"><B>10,661</B></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right"><B>10,436</B></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right"><B>10,615</B></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right"><B>10,447</B></TD>
    <TD>&nbsp;</TD>
</TR>
<TR style="font-size: 1px">
    <TD><DIV style="margin-left:15px; text-indent:-15px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
        <TD nowrap colspan="2" align="right" style="border-top: 3px double #000000">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
        <TD nowrap colspan="2" align="right" style="border-top: 3px double #000000">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
        <TD nowrap colspan="2" align="right" style="border-top: 3px double #000000">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
        <TD nowrap colspan="2" align="right" style="border-top: 3px double #000000">&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<!-- End Table Body -->
</TABLE>
</DIV>


<DIV align="center" style="font-size: 10pt; margin-top: 18pt"><B><I>The accompanying notes are an integral part of these statements.</I></B>
</DIV>



<P align="center" style="font-size: 10pt"> 4 of 77
</DIV>

<!-- PAGEBREAK -->
<P><HR noshade><P>
<H5 align="left" style="page-break-before:always">&nbsp;</H5><P>

<DIV style="font-family: 'Times New Roman',Times,serif">




<DIV align="center" style="font-size: 10pt; margin-top: 18pt"><B>Olympic Steel, Inc.<BR>
Consolidated Statements of Cash Flows<BR>
For the Six Months Ended June&nbsp;30,</B>
</DIV>


<DIV align="Center" style="font-size: 10pt; margin-top: 6pt"><B>(in thousands)</B>

</DIV>
<DIV align="center">
<TABLE style="font-size: 10pt" cellspacing="0" border="0" cellpadding="0" width="100%">
<!-- Begin Table Head -->
<TR valign="bottom">
    <TD width="76%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
</TR>
<TR style="font-size: 8pt" valign="bottom">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="2" style="border-bottom: 1px solid #000000"><B>2006</B></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="2" style="border-bottom: 1px solid #000000"><B>2005</B></TD>
    <TD>&nbsp;</TD>
</TR>
<TR style="font-size: 8pt" valign="bottom">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="6"><B>(unaudited)</B></TD>
    <TD>&nbsp;</TD>
</TR>

<!-- End Table Head -->
<!-- Begin Table Body -->
<TR valign="bottom" style="background: #cceeff">
    <TD><DIV style="margin-left:15px; text-indent:-15px"><B>Cash flows from (used for) operating activities:</B></DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:30px; text-indent:-15px"><B>Net income</B></DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left"><B>$</B></TD>
    <TD align="right"><B>16,352</B></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left"><B>$</B></TD>
    <TD align="right"><B>12,623</B></TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom" style="background: #cceeff">
    <TD><DIV style="margin-left:30px; text-indent:-15px"><B>Adjustments to reconcile net income to net cash from
operating activities (net of effects from purchases
of GSP and PS&#038;W) -</B></DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:60px; text-indent:-15px"><B>Depreciation and amortization</B></DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right"><B>4,104</B></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right"><B>4,515</B></TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom" style="background: #cceeff">
    <TD><DIV style="margin-left:60px; text-indent:-15px"><B>(Income) loss from joint ventures, net of
distributions
and consolidation of GSP</B></DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right"><B>137</B></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="left">&nbsp;</TD>
    <TD align="right"><B>(290</B></TD>
    <TD nowrap><B>)</B></TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:60px; text-indent:-15px"><B>(Gain) loss on disposition of property and
equipment</B></DIV></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="left">&nbsp;</TD>
    <TD align="right"><B>(3</B></TD>
    <TD nowrap><B>)</B></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right"><B>4</B></TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom" style="background: #cceeff">
    <TD><DIV style="margin-left:60px; text-indent:-15px"><B>Stock based compensation</B></DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right"><B>112</B></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">&#151;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:60px; text-indent:-15px"><B>Other long-term assets</B></DIV></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="left">&nbsp;</TD>
    <TD align="right"><B>(2,980</B></TD>
    <TD nowrap><B>)</B></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">&#151;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom" style="background: #cceeff">
    <TD><DIV style="margin-left:60px; text-indent:-15px"><B>Other long-term liabilities</B></DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right"><B>1,430</B></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">&#151;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:60px; text-indent:-15px"><B>Long-term deferred income taxes</B></DIV></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="left">&nbsp;</TD>
    <TD align="right"><B>(730</B></TD>
    <TD nowrap><B>)</B></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="left">&nbsp;</TD>
    <TD align="right"><B>(329</B></TD>
    <TD nowrap><B>)</B></TD>
</TR>
<TR style="font-size: 1px">
    <TD><DIV style="margin-left:15px; text-indent:-15px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD nowrap colspan="2" align="right" style="border-top: 1px solid #000000">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap colspan="2" align="right" style="border-top: 1px solid #000000">&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom" style="background: #cceeff">
    <TD><DIV style="margin-left:15px; text-indent:-15px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right"><B>18,422</B></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right"><B>16,523</B></TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom"><!-- Blank Space -->
    <TD><DIV style="margin-left:15px; text-indent:-15px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:15px; text-indent:-15px"><B>Changes in working capital:</B></DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom" style="background: #cceeff">
    <TD><DIV style="margin-left:30px; text-indent:-15px"><B>Accounts receivable</B></DIV></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="left">&nbsp;</TD>
    <TD align="right"><B>(23,056</B></TD>
    <TD nowrap><B>)</B></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="left">&nbsp;</TD>
    <TD align="right"><B>(11,604</B></TD>
    <TD nowrap><B>)</B></TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:30px; text-indent:-15px"><B>Inventories</B></DIV></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="left">&nbsp;</TD>
    <TD align="right"><B>(32,641</B></TD>
    <TD nowrap><B>)</B></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right"><B>42,262</B></TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom" style="background: #cceeff">
    <TD><DIV style="margin-left:30px; text-indent:-15px"><B>Prepaid expenses and other</B></DIV></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="left">&nbsp;</TD>
    <TD align="right"><B>(917</B></TD>
    <TD nowrap><B>)</B></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="left">&nbsp;</TD>
    <TD align="right"><B>(1,159</B></TD>
    <TD nowrap><B>)</B></TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:30px; text-indent:-15px"><B>Accounts payable</B></DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right"><B>6,358</B></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="left">&nbsp;</TD>
    <TD align="right"><B>(20,678</B></TD>
    <TD nowrap><B>)</B></TD>
</TR>
<TR valign="bottom" style="background: #cceeff">
    <TD><DIV style="margin-left:30px; text-indent:-15px"><B>Accrued payroll and other accrued liabilities</B></DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right"><B>242</B></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="left">&nbsp;</TD>
    <TD align="right"><B>(12,701</B></TD>
    <TD nowrap><B>)</B></TD>
</TR>
<TR style="font-size: 1px">
    <TD><DIV style="margin-left:15px; text-indent:-15px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD nowrap colspan="2" align="right" style="border-top: 1px solid #000000">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap colspan="2" align="right" style="border-top: 1px solid #000000">&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:15px; text-indent:-15px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="left">&nbsp;</TD>
    <TD align="right"><B>(50,014</B></TD>
    <TD nowrap><B>)</B></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="left">&nbsp;</TD>
    <TD align="right"><B>(3,880</B></TD>
    <TD nowrap><B>)</B></TD>
</TR>
<TR style="font-size: 1px">
    <TD><DIV style="margin-left:15px; text-indent:-15px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD nowrap colspan="2" align="right" style="border-top: 1px solid #000000">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap colspan="2" align="right" style="border-top: 1px solid #000000">&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom" style="background: #cceeff">
    <TD><DIV style="margin-left:45px; text-indent:-15px"><B>Net cash from (used for) operating activities</B></DIV></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="left">&nbsp;</TD>
    <TD align="right"><B>(31,592</B></TD>
    <TD nowrap><B>)</B></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right"><B>12,643</B></TD>
    <TD>&nbsp;</TD>
</TR>
<TR style="font-size: 1px">
    <TD><DIV style="margin-left:15px; text-indent:-15px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD nowrap colspan="2" align="right" style="border-top: 1px solid #000000">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap colspan="2" align="right" style="border-top: 1px solid #000000">&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom"><!-- Blank Space -->
    <TD><DIV style="margin-left:15px; text-indent:-15px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:15px; text-indent:-15px"><B>Cash flows from (used for) investing activities:</B></DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom" style="background: #cceeff">
    <TD><DIV style="margin-left:30px; text-indent:-15px"><B>Purchase of GSP interest</B></DIV></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="left">&nbsp;</TD>
    <TD align="right"><B>(100</B></TD>
    <TD nowrap><B>)</B></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">&#151;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:30px; text-indent:-15px"><B>Purchase of PS&#038;W</B></DIV></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="left">&nbsp;</TD>
    <TD align="right"><B>(8,916</B></TD>
    <TD nowrap><B>)</B></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">&#151;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom" style="background: #cceeff">
    <TD><DIV style="margin-left:30px; text-indent:-15px"><B>Capital expenditures</B></DIV></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="left">&nbsp;</TD>
    <TD align="right"><B>(8,127</B></TD>
    <TD nowrap><B>)</B></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="left">&nbsp;</TD>
    <TD align="right"><B>(906</B></TD>
    <TD nowrap><B>)</B></TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:30px; text-indent:-15px"><B>Proceeds from disposition of property and equipment</B></DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right"><B>3</B></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">&#151;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR style="font-size: 1px">
    <TD><DIV style="margin-left:15px; text-indent:-15px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD nowrap colspan="2" align="right" style="border-top: 1px solid #000000">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap colspan="2" align="right" style="border-top: 1px solid #000000">&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR><TD>&nbsp;</TD></TR>
<TR valign="bottom" style="background: #cceeff">
    <TD><DIV style="margin-left:45px; text-indent:-15px"><B>Net cash used for investing activities</B></DIV></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="left">&nbsp;</TD>
    <TD align="right"><B>(17,140</B></TD>
    <TD nowrap><B>)</B></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="left">&nbsp;</TD>
    <TD align="right"><B>(906</B></TD>
    <TD nowrap><B>)</B></TD>
</TR>
<TR style="font-size: 1px">
    <TD><DIV style="margin-left:15px; text-indent:-15px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD nowrap colspan="2" align="right" style="border-top: 1px solid #000000">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap colspan="2" align="right" style="border-top: 1px solid #000000">&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom"><!-- Blank Space -->
    <TD><DIV style="margin-left:15px; text-indent:-15px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:15px; text-indent:-15px"><B>Cash flows from (used for) financing activities:</B></DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom" style="background: #cceeff">
    <TD><DIV style="margin-left:30px; text-indent:-15px"><B>Credit facility revolver borrowings, net</B></DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right"><B>41,632</B></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="left">&nbsp;</TD>
    <TD align="right"><B>(9,928</B></TD>
    <TD nowrap><B>)</B></TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:30px; text-indent:-15px"><B>Change in outstanding checks</B></DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right"><B>574</B></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="left">&nbsp;</TD>
    <TD align="right"><B>(532</B></TD>
    <TD nowrap><B>)</B></TD>
</TR>
<TR valign="bottom" style="background: #cceeff">
    <TD><DIV style="margin-left:30px; text-indent:-15px"><B>Repayments of debt</B></DIV></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="left">&nbsp;</TD>
    <TD align="right"><B>(2,264</B></TD>
    <TD nowrap><B>)</B></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="left">&nbsp;</TD>
    <TD align="right"><B>(2,932</B></TD>
    <TD nowrap><B>)</B></TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:30px; text-indent:-15px"><B>Proceeds from exercise of stock options
and employee stock purchases</B></DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right"><B>3,959</B></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right"><B>1,041</B></TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom" style="background: #cceeff">
    <TD><DIV style="margin-left:30px; text-indent:-15px"><B>Dividends paid</B></DIV></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="left">&nbsp;</TD>
    <TD align="right"><B>(625</B></TD>
    <TD nowrap><B>)</B></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right"><B>&#151;</B></TD>
    <TD>&nbsp;</TD>
</TR>
<TR style="font-size: 1px">
    <TD><DIV style="margin-left:15px; text-indent:-15px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD nowrap colspan="2" align="right" style="border-top: 1px solid #000000">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap colspan="2" align="right" style="border-top: 1px solid #000000">&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR><TD>&nbsp;</TD></TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:45px; text-indent:-15px"><B>Net cash from (used for) financing activities</B></DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right"><B>43,276</B></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="left">&nbsp;</TD>
    <TD align="right"><B>(12,351</B></TD>
    <TD nowrap><B>)</B></TD>
</TR>
<TR style="font-size: 1px">
    <TD><DIV style="margin-left:15px; text-indent:-15px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD nowrap colspan="2" align="right" style="border-top: 1px solid #000000">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap colspan="2" align="right" style="border-top: 1px solid #000000">&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom"><!-- Blank Space -->
    <TD><DIV style="margin-left:15px; text-indent:-15px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom" style="background: #cceeff">
    <TD><DIV style="margin-left:15px; text-indent:-15px"><B>Cash and cash equivalents:</B></DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:30px; text-indent:-15px"><B>Net change</B></DIV></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="left">&nbsp;</TD>
    <TD align="right"><B>(5,456</B></TD>
    <TD nowrap><B>)</B></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="left">&nbsp;</TD>
    <TD align="right"><B>(614</B></TD>
    <TD nowrap><B>)</B></TD>
</TR>
<TR valign="bottom" style="background: #cceeff">
    <TD><DIV style="margin-left:30px; text-indent:-15px"><B>Beginning balance</B></DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right"><B>9,555</B></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right"><B>4,684</B></TD>
    <TD>&nbsp;</TD>
</TR>
<TR style="font-size: 1px">
    <TD><DIV style="margin-left:15px; text-indent:-15px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD nowrap colspan="2" align="right" style="border-top: 1px solid #000000">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap colspan="2" align="right" style="border-top: 1px solid #000000">&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:30px; text-indent:-15px"><B>Ending balance</B></DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left"><B>$</B></TD>
    <TD align="right"><B>4,099</B></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left"><B>$</B></TD>
    <TD align="right"><B>4,070</B></TD>
    <TD>&nbsp;</TD>
</TR>
<TR style="font-size: 1px">
    <TD><DIV style="margin-left:15px; text-indent:-15px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
        <TD nowrap colspan="2" align="right" style="border-top: 3px double #000000">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
        <TD nowrap colspan="2" align="right" style="border-top: 3px double #000000">&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<!-- End Table Body -->
</TABLE>
</DIV>


<DIV align="center" style="font-size: 10pt; margin-top: 18pt"><B><I>The accompanying notes are an integral part of these statements.</I></B>
</DIV>


<P align="center" style="font-size: 10pt"> 5 of 77
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<DIV style="font-family: 'Times New Roman',Times,serif">




<DIV align="center" style="font-size: 10pt; margin-top: 18pt"><B>Olympic Steel, Inc.<BR>
Notes to Consolidated Financial Statements</B>
</DIV>
<DIV align="center" style="font-size: 10pt; margin-top: 6pt"><B>June&nbsp;30, 2006</B>
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 12pt"><B>(1)&nbsp;Basis of Presentation:</B>
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">The accompanying consolidated financial statements have been prepared from the financial records of
Olympic Steel, Inc. and its wholly-owned subsidiaries (collectively Olympic or the Company),
without audit and reflect all normal and recurring adjustments which are, in the opinion of
management, necessary to fairly present the results of the interim periods covered by this report.
Year-to-date results are not necessarily indicative of 2006 annual results and these financial
statements should be read in conjunction with the Company&#146;s 2005 Annual Report on Form 10-K for the
period ended December&nbsp;31, 2005. All significant intercompany transactions and balances have been
eliminated in consolidation. Investments in the Company&#146;s joint ventures are accounted for under
the equity method.
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 12pt"><B>(2)&nbsp;Accounts Receivable:</B>
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">The Company maintained allowances for doubtful accounts and unissued credits of $3.8&nbsp;million and
$3.6&nbsp;million at June&nbsp;30, 2006 and December&nbsp;31, 2005, respectively. The allowance for doubtful
accounts is maintained at a level considered appropriate based on historical experience and
specific customer collection issues that have been identified. Estimations are based upon a
calculated percentage of accounts receivable, which remains fairly level from year to year, and
judgments about the probable effects of economic conditions on certain customers, which can
fluctuate significantly from year to year. The Company cannot guarantee that the rate of future
credit losses will be similar to past experience. The Company considers all available information
when assessing the adequacy of its allowance for doubtful accounts.
</DIV>


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<DIV style="font-family: 'Times New Roman',Times,serif">




<DIV align="left" style="font-size: 10pt; margin-top: 12pt"><B>(3)&nbsp;Inventories:</B>
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">Steel inventories consisted of the following:
</DIV>

<DIV align="center">
<TABLE style="font-size: 10pt" cellspacing="0" border="0" cellpadding="0" width="100%">
<!-- Begin Table Head -->
<TR valign="bottom">
    <TD width="76%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
</TR>
<TR style="font-size: 8pt" valign="bottom">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="2"><B>June 30,</B></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="2"><B>December 31,</B></TD>
    <TD>&nbsp;</TD>
</TR>
<TR style="font-size: 8pt" valign="bottom">
    <TD nowrap align="left" style="border-bottom: 0px solid #000000">(in thousands)</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="2" style="border-bottom: 1px solid #000000"><B>2006</B></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="2" style="border-bottom: 1px solid #000000"><B>2005</B></TD>
    <TD>&nbsp;</TD>
</TR>

<!-- End Table Head -->
<!-- Begin Table Body -->
<TR valign="bottom" style="background: #cceeff">
    <TD><DIV style="margin-left:15px; text-indent:-15px">Unprocessed</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left">$</TD>
    <TD align="right">130,713</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left">$</TD>
    <TD align="right">98,939</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:15px; text-indent:-15px">Processed and finished</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">41,666</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">35,297</TD>
    <TD>&nbsp;</TD>
</TR>

<TR style="font-size: 1px">
    <TD><DIV style="margin-left:15px; text-indent:-15px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
        <TD nowrap colspan="2" align="right" style="border-top: 1px solid #000000">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
        <TD nowrap colspan="2" align="right" style="border-top: 1px solid #000000">&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>



<TR valign="bottom" style="background: #cceeff">
    <TD><DIV style="margin-left:15px; text-indent:-15px">Totals</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left">$</TD>
    <TD align="right">172,379</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left">$</TD>
    <TD align="right">134,236</TD>
    <TD>&nbsp;</TD>
</TR>
<TR style="font-size: 1px">
    <TD><DIV style="margin-left:15px; text-indent:-15px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
        <TD nowrap colspan="2" align="right" style="border-top: 3px double #000000">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
        <TD nowrap colspan="2" align="right" style="border-top: 3px double #000000">&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<!-- End Table Body -->
</TABLE>
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 12pt"><B>(4)&nbsp;Investments in Joint Ventures:</B>
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">The Company and the United States Steel Corporation (USS)&nbsp;each own 50% of Olympic Laser Processing
(OLP), a company that produced laser welded sheet steel blanks for the automotive industry. In
January&nbsp;2006, the Company and USS announced the closing of OLP. In conjunction with the closing,
during the fourth quarter of 2005, the Company recorded a $3.5&nbsp;million charge for the disposition
of the joint venture, consisting of $1.3&nbsp;million for the impairment of the Company&#146;s investment in
OLP and $2.2&nbsp;million to be funded under the Company&#146;s guarantee of OLP&#146;s debt. OLP ceased
operations during the first quarter of 2006. Operating losses incurred by OLP during the first
quarter were recorded against the $3.5&nbsp;million reserve. During the second quarter of 2006, OLP
began liquidating its remaining assets. Offers from third-parties to purchase the remaining assets
were less than anticipated and the Company recorded an additional $2.0&nbsp;million charge to reflect
additional expected obligations under the guarantee of OLP&#146;s debt. As of August&nbsp;9, 2006, the
Company guaranteed 50% of OLP&#146;s $6.3&nbsp;million of outstanding bank debt on a several basis and had
funded $3.3&nbsp;million of the expected $4.2&nbsp;million to be paid under such guarantee.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">Prior to May&nbsp;1, 2006, the Company had a 49% ownership interest in G.S.P., LLC (GSP), a venture to
support the flat-rolled steel requirements of the automotive industry as a Minority Business
Enterprise. In order to gain full control of GSP, on May&nbsp;1, 2006, the Company purchased the
remaining 51% ownership interest for $100 thousand and GSP ceased qualification as a Minority
Business Enterprise.
</DIV>


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<DIV style="font-family: 'Times New Roman',Times,serif">



<DIV align="left" style="font-size: 10pt; margin-top: 6pt">As of August&nbsp;1, 2006, the Company guaranteed 49% of GSP&#146;s $423 thousand demand note bank loan
agreement.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">Since May&nbsp;1, 2006, GSP&#146;s results have been fully consolidated in the Company&#146;s financial
statements. Prior to May&nbsp;1, the Company recorded 49% of GSP&#146;s net income or loss to its
Consolidated Statement of Operations as &#147;Income (Loss) from Joint Ventures.&#148;
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 12pt"><B>(5)&nbsp;Acquisition
of Tinsley Group &#151; PS&#038;W, Inc.:</B>
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">In order to further expand value-added and fabrication capabilities, on June&nbsp;2, 2006, the Company
purchased all of the outstanding stock of Tinsley Group &#150; PS&#038;W, Inc. (PS&#038;W) for $10.1&nbsp;million,
subject to a post-closing net working capital adjustment. The Company believes that the net
working capital adjustment is approximately $1.2&nbsp;million, thereby reducing the preliminary
effective purchase price to $8.9&nbsp;million. The purchase price of $8.9&nbsp;million includes $6.7&nbsp;million
of goodwill, subject to final adjustments. The results of PS&#038;W have been fully consolidated in the
Company&#146;s financial results since June&nbsp;2, 2006.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">PS&#038;W is a full service fabricating company that utilizes burning, forming, machining and painting
to produce a wide variety of fabrications for large original equipment manufacturers of heavy
construction equipment. PS&#038;W was founded in 1990 and currently operates two facilities in North
Carolina.
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 12pt"><B>(6)&nbsp;Debt:</B>
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">The Company&#146;s secured bank-financing agreement (the Credit Facility) is a revolving credit facility
collateralized by the Company&#146;s accounts receivable, inventories, and substantially all of the
property and equipment. Borrowings are limited to the lesser of a borrowing base, comprised of
eligible receivables and inventories, or $110&nbsp;million in the aggregate. In April&nbsp;2006, the Company
entered into an amendment of the Credit Facility which, subject to the terms and conditions set
forth in the amendment: (i)&nbsp;extended the maturity date of the Credit Facility to December&nbsp;15,
2009, with annual extensions at the banks&#146; option; (ii)&nbsp;increased the amount of allowable
investments in joint ventures from $2.5&nbsp;million to $10&nbsp;million; and (iii)&nbsp;increased the
</DIV>
<P align="center" style="font-size: 10pt"> 8 of 77
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<DIV style="font-family: 'Times New Roman',Times,serif">


<DIV align="left" style="font-size: 10pt; margin-top: 6pt">annual limitation on capital expenditures from $15&nbsp;million to $25&nbsp;million. The Company has the
option to borrow based on the agent&#146;s base rate or Eurodollar Rates (EURO)&nbsp;plus a premium.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">The Credit Facility requires the Company to comply with various covenants, the most significant of
which include: (i)&nbsp;minimum availability of $10&nbsp;million, tested monthly, (ii)&nbsp;a minimum fixed charge
coverage ratio of 1.25, and a maximum leverage ratio of 1.75, which are tested quarterly, (iii)
restrictions on additional indebtedness, and (iv)&nbsp;limitations on dividends, capital expenditures
and investments. At June&nbsp;30, 2006, the Company had approximately $35&nbsp;million of availability under
the Credit Facility and the Company was in compliance with its covenants. The Credit Facility also
contains an accordion feature which allows the Company to add $25&nbsp;million of additional revolver
capacity.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">Outstanding checks are included as part of Accounts Payable on the accompanying consolidated
balance sheets and such checks totaled $15.6&nbsp;million as of June&nbsp;30, 2006 and $15.0&nbsp;million as of
December&nbsp;31, 2005.
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 12pt"><B>(7)&nbsp;Shares Outstanding and Earnings Per Share:</B>
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">Earnings per share have been calculated based on the weighted average number of shares outstanding
as set forth below:
</DIV>

<DIV align="center">
<TABLE style="font-size: 10pt" cellspacing="0" border="0" cellpadding="0" width="100%">
<!-- Begin Table Head -->
<TR valign="bottom">
    <TD width="52%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
</TR>
<TR style="font-size: 8pt" valign="bottom">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="6"><B>For the Three Months</B></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="6"><B>For the Six Months</B></TD>
    <TD>&nbsp;</TD>
</TR>
<TR style="font-size: 8pt" valign="bottom">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="6" style="border-bottom: 1px solid #000000"><B>Ended June 30,</B></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="6" style="border-bottom: 1px solid #000000"><B>Ended June 30,</B></TD>
    <TD>&nbsp;</TD>
</TR>
<TR style="font-size: 8pt" valign="bottom">
    <TD nowrap align="left" style="border-bottom: 0px solid #000000">(in thousands, except per share data)</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="2" style="border-bottom: 1px solid #000000"><B>2006</B></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="2" style="border-bottom: 1px solid #000000"><B>2005</B></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="2" style="border-bottom: 1px solid #000000"><B>2006</B></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="2" style="border-bottom: 1px solid #000000"><B>2005</B></TD>
    <TD>&nbsp;</TD>
</TR>

<!-- End Table Head -->
<!-- Begin Table Body -->
<TR valign="bottom" style="background: #cceeff">
    <TD><DIV style="margin-left:15px; text-indent:-15px">Weighted average shares outstanding</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">10,416</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">10,148</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">10,338</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">10,114</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:15px; text-indent:-15px">Assumed exercise of stock options</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">245</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">288</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">277</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">333</TD>
    <TD>&nbsp;</TD>
</TR>
<TR style="font-size: 1px">
    <TD><DIV style="margin-left:15px; text-indent:-15px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD nowrap colspan="2" align="right" style="border-top: 1px solid #000000">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap colspan="2" align="right" style="border-top: 1px solid #000000">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap colspan="2" align="right" style="border-top: 1px solid #000000">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap colspan="2" align="right" style="border-top: 1px solid #000000">&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom" style="background: #cceeff">
    <TD><DIV style="margin-left:15px; text-indent:-15px">Weighted average diluted shares</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">10,661</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">10,436</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">10,615</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">10,447</TD>
    <TD>&nbsp;</TD>
</TR>
<TR style="font-size: 1px">
    <TD><DIV style="margin-left:15px; text-indent:-15px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD nowrap colspan="2" align="right" style="border-top: 3px double #000000">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap colspan="2" align="right" style="border-top: 3px double #000000">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap colspan="2" align="right" style="border-top: 3px double #000000">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap colspan="2" align="right" style="border-top: 3px double #000000">&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom"><!-- Blank Space -->
    <TD><DIV style="margin-left:15px; text-indent:-15px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:15px; text-indent:-15px">Net income</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left">$</TD>
    <TD align="right">8,371</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left">$</TD>
    <TD align="right">3,004</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left">$</TD>
    <TD align="right">16,352</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left">$</TD>
    <TD align="right">12,623</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom"><!-- Blank Space -->
    <TD><DIV style="margin-left:15px; text-indent:-15px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom" style="background: #cceeff">
    <TD><DIV style="margin-left:15px; text-indent:-15px">Basic earnings per share</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left">$</TD>
    <TD align="right">0.80</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left">$</TD>
    <TD align="right">0.30</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left">$</TD>
    <TD align="right">1.58</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left">$</TD>
    <TD align="right">1.25</TD>
    <TD>&nbsp;</TD>
</TR>
<TR style="font-size: 1px">
    <TD><DIV style="margin-left:15px; text-indent:-15px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD nowrap colspan="2" align="right" style="border-top: 3px double #000000">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap colspan="2" align="right" style="border-top: 3px double #000000">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap colspan="2" align="right" style="border-top: 3px double #000000">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap colspan="2" align="right" style="border-top: 3px double #000000">&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:15px; text-indent:-15px">Diluted earnings per share</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left">$</TD>
    <TD align="right">0.79</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left">$</TD>
    <TD align="right">0.29</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left">$</TD>
    <TD align="right">1.54</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left">$</TD>
    <TD align="right">1.21</TD>
    <TD>&nbsp;</TD>
</TR>
<TR style="font-size: 1px">
    <TD><DIV style="margin-left:15px; text-indent:-15px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
        <TD nowrap colspan="2" align="right" style="border-top: 3px double #000000">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
        <TD nowrap colspan="2" align="right" style="border-top: 3px double #000000">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
        <TD nowrap colspan="2" align="right" style="border-top: 3px double #000000">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
        <TD nowrap colspan="2" align="right" style="border-top: 3px double #000000">&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<!-- End Table Body -->
</TABLE>
</DIV>


<P align="center" style="font-size: 10pt"> 9 of 77
</DIV>

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<DIV style="font-family: 'Times New Roman',Times,serif">


<DIV style="margin-top: 6pt">
<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt">

<TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="1%" nowrap align="left"><B>(8)</B></TD>
    <TD width="1%">&nbsp;</TD>
    <TD><B>Stock Options:</B></TD>
</TR>

</TABLE>
</DIV>
<DIV align="left" style="font-size: 10pt; margin-top: 6pt">In January&nbsp;1994, the Stock Option Plan (Option Plan) was adopted by the Board of Directors and
approved by the shareholders of the Company. Pursuant to the provisions of the Option Plan, key
employees of the Company, non-employee directors and consultants may be offered the opportunity to
acquire shares of Common Stock by the grant of stock options, including both incentive stock
options (ISOs) and nonqualified stock options. ISOs are not available to non-employee directors or
consultants. A total of 1,300,000 shares of Common Stock are reserved under the Option Plan. To
the extent possible, shares of Treasury Stock are used to satisfy shares resulting from the
exercise of stock options. The purchase price of a share of Common Stock pursuant to an ISO will
not be less than the fair market value of a share of Common Stock at the grant date. Options vest
over periods ranging from six months to five years and all expire 10&nbsp;years after the grant date.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">The Option Plan terminates on January&nbsp;5, 2009. Termination of the Option Plan will not affect
outstanding options. As of June&nbsp;30, 2006, there were 24,170 options available for grant.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">On January&nbsp;1, 2006, the Company adopted the provisions of Statement of Financial Accounting
Standards No.&nbsp;123-R (SFAS No.&nbsp;123-R) and elected to use the modified prospective transition method.
The modified prospective transition method requires that compensation cost be recognized in the
financial statements for all awards granted after the date of adoption as well as for existing
awards for which the requisite service has not been rendered as of the date of the adoption. The
modified prospective transition does not require prior periods to be restated. Prior to the
adoption of SFAS No.&nbsp;123-R, the Company accounted for stock-based compensation using the intrinsic
value method prescribed in Accounting Principals Board Opinion No.&nbsp;25, &#147;Accounting for Stock Issued
to Employees,&#148; and related Interpretations. The Company has elected to use the &#147;short-cut method&#148;
to calculate the historical pool of windfall tax benefits upon adoption of SFAS No.&nbsp;123-R. The
election to use the &#147;short-cut method&#148; had no effect on the Company&#146;s financial statements.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">Under the intrinsic value method used prior to January&nbsp;1, 2006, compensation expense for
stock-based compensation was not recognized in our Consolidated Statements of Operations as all
</DIV>
<P align="center" style="font-size: 10pt"> 10 of 77
</DIV>

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<DIV style="font-family: 'Times New Roman',Times,serif">


<DIV align="left" style="font-size: 10pt; margin-top: 6pt">stock options granted by the Company had an exercise price equal to or greater than the market
value of the underlying common stock on the option grant date.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">The following table summarizes the effect of the adoption of SFAS No.&nbsp;123-R on the 2006 results of
operations:
</DIV>

<DIV align="center">
<TABLE style="font-size: 10pt" cellspacing="0" border="0" cellpadding="0" width="100%">
<!-- Begin Table Head -->
<TR valign="bottom">
    <TD width="76%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="2%">&nbsp;</TD>
</TR>
<TR style="font-size: 8pt" valign="bottom">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="3"><B>For the 3 months</B></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="3"><B>For the 6 months</B></TD>
</TR>
<TR style="font-size: 8pt" valign="bottom">
    <TD nowrap align="left" style="border-bottom: 0px solid #000000">(in thousands, except per share data)</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="3" style="border-bottom: 1px solid #000000"><B>ended June 30, 2006</B></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="3" style="border-bottom: 1px solid #000000"><B>ended June 30, 2006</B></TD>
</TR>

<!-- End Table Head -->
<!-- Begin Table Body -->
<TR valign="bottom" style="background: #cceeff">
    <TD><DIV style="margin-left:15px; text-indent:-15px">Stock option expense before taxes</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="right">$</TD>
    <TD align="right">30</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">$</TD>
    <TD align="right">112</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:15px; text-indent:-15px">Stock option expense after taxes</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">18</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">69</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom" style="background: #cceeff">
    <TD><DIV style="margin-left:15px; text-indent:-15px">Impact per basic share</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="right">$</TD>
    <TD align="right">0.00</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">$</TD>
    <TD align="right">0.01</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:15px; text-indent:-15px">Impact per diluted share</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="right">$</TD>
    <TD align="right">0.00</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">$</TD>
    <TD align="right">0.01</TD>
    <TD>&nbsp;</TD>
</TR>
<!-- End Table Body -->
</TABLE>
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">All pre-tax charges related to stock option expense were included in the caption &#147;Administrative
and general&#148; on the accompanying Consolidated Statements of Operations. Prior to the adoption of
SFAS No.&nbsp;123-R, the Company presented all tax benefits of deductions resulting from the exercise of
stock options as operating cash flow in the Consolidated Statements of Cash Flow. SFAS No.&nbsp;123-R
requires the cash flow resulting from the tax deductions in excess of the compensation cost
recognized for those options to be classified as financing cash flows. For the six months ended
June&nbsp;30, 2006, tax benefits realized from option exercises totaled $2.4&nbsp;million.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">The fair value of each option grant was estimated as of the date of grant using the Black-Scholes
option pricing model with the following weighted-average assumptions:
</DIV>

<DIV align="center">
<TABLE style="font-size: 10pt" cellspacing="0" border="0" cellpadding="0" width="100%">
<!-- Begin Table Head -->
<TR valign="bottom">
    <TD width="64%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="2%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="2%">&nbsp;</TD>
</TR>
<TR style="font-size: 8pt" valign="bottom">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="3" style="border-bottom: 1px solid #000000"><B>2006</B></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="3" style="border-bottom: 1px solid #000000"><B>2005</B></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="3" style="border-bottom: 1px solid #000000"><B>2004</B></TD>
</TR>

<!-- End Table Head -->
<!-- Begin Table Body -->
<TR valign="bottom" style="background: #cceeff">
    <TD><DIV style="margin-left:15px; text-indent:-15px">Risk free interest rate</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">n/a</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">n/a</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right">&nbsp;</TD>
    <TD align="right">4.48</TD>
    <TD nowrap>%</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:15px; text-indent:-15px">Expected life in years</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">n/a</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">n/a</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">10</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom" style="background: #cceeff">
    <TD><DIV style="margin-left:15px; text-indent:-15px">Expected volatility</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">n/a</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">n/a</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">0.59</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:15px; text-indent:-15px">Expected dividend yield</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">n/a</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">n/a</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right">&nbsp;</TD>
    <TD align="right">0</TD>
    <TD nowrap>%</TD>
</TR>
<!-- End Table Body -->
</TABLE>
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">The expected volatility assumption was derived by referring to changes in the Company&#146;s historical
common stock prices over a timeframe similar to that of the expected life of the award.
</DIV>


<P align="center" style="font-size: 10pt"> 11 of 77
</DIV>

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<DIV style="font-family: 'Times New Roman',Times,serif">



<DIV align="left" style="font-size: 10pt; margin-top: 6pt">The weighted average fair value of options granted during 2004 was $9.04. No options were granted
during 2005 or 2006.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">For periods prior to 2006, the following table illustrates the pro-forma effect on net income and
earnings per share as if the fair value based method had been applied to all outstanding and
unvested awards in the period:
</DIV>

<DIV align="center">
<TABLE style="font-size: 10pt" cellspacing="0" border="0" cellpadding="0" width="100%">
<!-- Begin Table Head -->
<TR valign="bottom">
    <TD width="76%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
</TR>
<TR style="font-size: 8pt" valign="bottom">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="2"><B>For the Three Months</B></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="2"><B>For the Six Months</B></TD>
    <TD>&nbsp;</TD>
</TR>
<TR style="font-size: 8pt" valign="bottom">
    <TD nowrap align="left" style="border-bottom: 0px solid #000000">(in thousands, except per share data)</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="2" style="border-bottom: 1px solid #000000"><B>Ended June 30, 2005</B></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="2" style="border-bottom: 1px solid #000000"><B>Ended June 30, 2005</B></TD>
    <TD>&nbsp;</TD>
</TR>

<!-- End Table Head -->
<!-- Begin Table Body -->
<TR valign="bottom" style="background: #cceeff">
    <TD><DIV style="margin-left:15px; text-indent:-15px">Net income, as reported</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left">$</TD>
    <TD align="right">3,004</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left">$</TD>
    <TD align="right">12,623</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:15px; text-indent:-15px">Pro forma expense, net of tax</DIV></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="left">&nbsp;</TD>
    <TD align="right">(264</TD>
    <TD nowrap>)</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="left">&nbsp;</TD>
    <TD align="right">(346</TD>
    <TD nowrap>)</TD>
</TR>
<TR style="font-size: 1px">
    <TD><DIV style="margin-left:15px; text-indent:-15px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD nowrap colspan="2" align="right" style="border-top: 1px solid #000000">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap colspan="2" align="right" style="border-top: 1px solid #000000">&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom" style="background: #cceeff">
    <TD><DIV style="margin-left:15px; text-indent:-15px">Pro forma net income</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left">$</TD>
    <TD align="right">2,740</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left">$</TD>
    <TD align="right">12,277</TD>
    <TD>&nbsp;</TD>
</TR>
<TR style="font-size: 1px">
    <TD><DIV style="margin-left:15px; text-indent:-15px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD nowrap colspan="2" align="right" style="border-top: 3px double #000000">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap colspan="2" align="right" style="border-top: 3px double #000000">&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom"><!-- Blank Space -->
    <TD><DIV style="margin-left:15px; text-indent:-15px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:15px; text-indent:-15px">Basic net income per share:</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom" style="background: #cceeff">
    <TD><DIV style="margin-left:30px; text-indent:-15px">As reported</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left">$</TD>
    <TD align="right">0.30</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left">$</TD>
    <TD align="right">1.25</TD>
    <TD>&nbsp;</TD>
</TR>
<TR style="font-size: 1px">
    <TD><DIV style="margin-left:15px; text-indent:-15px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD nowrap colspan="2" align="right" style="border-top: 3px double #000000">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap colspan="2" align="right" style="border-top: 3px double #000000">&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:30px; text-indent:-15px">Pro forma</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left">$</TD>
    <TD align="right">0.27</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left">$</TD>
    <TD align="right">1.21</TD>
    <TD>&nbsp;</TD>
</TR>
<TR style="font-size: 1px">
    <TD><DIV style="margin-left:15px; text-indent:-15px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD nowrap colspan="2" align="right" style="border-top: 3px double #000000">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap colspan="2" align="right" style="border-top: 3px double #000000">&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom"><!-- Blank Space -->
    <TD><DIV style="margin-left:15px; text-indent:-15px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom" style="background: #cceeff">
    <TD><DIV style="margin-left:15px; text-indent:-15px">Diluted earnings per share:</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:30px; text-indent:-15px">As reported</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left">$</TD>
    <TD align="right">0.29</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left">$</TD>
    <TD align="right">1.21</TD>
    <TD>&nbsp;</TD>
</TR>
<TR style="font-size: 1px">
    <TD><DIV style="margin-left:15px; text-indent:-15px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD nowrap colspan="2" align="right" style="border-top: 3px double #000000">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap colspan="2" align="right" style="border-top: 3px double #000000">&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom" style="background: #cceeff">
    <TD><DIV style="margin-left:30px; text-indent:-15px">Pro forma</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left">$</TD>
    <TD align="right">0.26</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left">$</TD>
    <TD align="right">1.18</TD>
    <TD>&nbsp;</TD>
</TR>
<TR style="font-size: 1px">
    <TD><DIV style="margin-left:15px; text-indent:-15px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
        <TD nowrap colspan="2" align="right" style="border-top: 3px double #000000">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
        <TD nowrap colspan="2" align="right" style="border-top: 3px double #000000">&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<!-- End Table Body -->
</TABLE>
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">The following table summarizes stock-based award activity during the six months ended June&nbsp;30,
2006:
</DIV>

<DIV align="center">
<TABLE style="font-size: 10pt" cellspacing="0" border="0" cellpadding="0" width="100%">
<!-- Begin Table Head -->
<TR valign="bottom">
    <TD width="52%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
</TR>
<TR style="font-size: 8pt" valign="bottom">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="2"><B>Weighted</B></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="2"><B>Aggregate</B></TD>
    <TD>&nbsp;</TD>
</TR>
<TR style="font-size: 8pt" valign="bottom">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="2"><B>Number of</B></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="2"><B>Weighted Average</B></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="2"><B>Average Remaining</B></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="2"><B>Intrinsic Value</B></TD>
    <TD>&nbsp;</TD>
</TR>
<TR style="font-size: 8pt" valign="bottom">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="2" style="border-bottom: 1px solid #000000"><B>Shares</B></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="2" style="border-bottom: 1px solid #000000"><B>Exercise Price</B></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="2" style="border-bottom: 1px solid #000000"><B>Contractual Term</B></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="2" style="border-bottom: 1px solid #000000"><B>(in 000s)</B></TD>
    <TD>&nbsp;</TD>
</TR>

<!-- End Table Head -->
<!-- Begin Table Body -->
<TR valign="bottom" style="background: #cceeff">
    <TD><DIV style="margin-left:15px; text-indent:-15px">Outstanding at
December&nbsp;31, 2005</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">753,845</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left">$</TD>
    <TD align="right">6.00</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:15px; text-indent:-15px">Granted</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left">$</TD>
    <TD align="right">&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom" style="background: #cceeff">
    <TD><DIV style="margin-left:15px; text-indent:-15px">Exercised</DIV></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="left">&nbsp;</TD>
    <TD align="right">(273,704</TD>
    <TD nowrap>)</TD>
    <TD>&nbsp;</TD>
    <TD align="left">$</TD>
    <TD align="right">5.77</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:15px; text-indent:-15px">Canceled</DIV></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="left">&nbsp;</TD>
    <TD align="right">(1,334</TD>
    <TD nowrap>)</TD>
    <TD>&nbsp;</TD>
    <TD align="left">$</TD>
    <TD align="right">3.50</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR style="font-size: 1px">
    <TD><DIV style="margin-left:15px; text-indent:-15px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD nowrap colspan="2" align="right" style="border-top: 1px solid #000000">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap colspan="2" align="right" style="border-top: 1px solid #000000">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom" style="background: #cceeff">
    <TD><DIV style="margin-left:15px; text-indent:-15px">Outstanding at June&nbsp;30, 2006</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">478,807</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left">$</TD>
    <TD align="right">6.14</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="3" align="center">5.5 years</TD>
    <TD>&nbsp;</TD>
    <TD align="left">$</TD>
    <TD align="right">11,880</TD>
    <TD>&nbsp;</TD>
</TR>
<TR style="font-size: 1px">
    <TD><DIV style="margin-left:15px; text-indent:-15px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD nowrap colspan="2" align="right" style="border-top: 3px double #000000">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap colspan="2" align="right" style="border-top: 3px double #000000">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap colspan="2" align="right" style="border-top: 3px double #000000">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap colspan="2" align="right" style="border-top: 3px double #000000">&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom"><!-- Blank Space -->
    <TD><DIV style="margin-left:15px; text-indent:-15px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:15px; text-indent:-15px">Exercisable at June&nbsp;30, 2006</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">466,806</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left">$</TD>
    <TD align="right">6.04</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="3" align="center">5.5 years</TD>
    <TD>&nbsp;</TD>
    <TD align="left">$</TD>
    <TD align="right">13,703</TD>
    <TD>&nbsp;</TD>
</TR>
<TR style="font-size: 1px">
    <TD><DIV style="margin-left:15px; text-indent:-15px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
        <TD nowrap colspan="2" align="right" style="border-top: 3px double #000000">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
        <TD nowrap colspan="2" align="right" style="border-top: 3px double #000000">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
        <TD nowrap colspan="2" align="right" style="border-top: 3px double #000000">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
        <TD nowrap colspan="2" align="right" style="border-top: 3px double #000000">&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<!-- End Table Body -->
</TABLE>
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">The total intrinsic value of stock options exercised during the six months ended June&nbsp;30, 2006 and
2005 were $6.3&nbsp;million and $1.7&nbsp;million, respectively. Net cash proceeds from the exercise
</DIV>
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<DIV style="font-family: 'Times New Roman',Times,serif">


<DIV align="left" style="font-size: 10pt; margin-top: 6pt">of
stock options were $3.4&nbsp;million and $992 thousand for the six months ended June&nbsp;30, 2006 and 2005,
respectively. Income tax benefits of $2.4&nbsp;million and $647 thousand were realized from stock option
exercises during the six months ended June&nbsp;30, 2006 and 2005, respectively.
The fair value of options vested during the six months ended June&nbsp;30, 2006 and 2005 totaled $132
thousand and $320 thousand, respectively.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">As of June&nbsp;30, 2006, approximately $101 thousand of expense, before taxes, with respect to
non-vested stock-based awards has yet to be recognized and will be amortized into expense over a
weighted-average period of 2.7&nbsp;years.
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 12pt"><B>(9)&nbsp;Implementation of New Information System:</B>
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">In July&nbsp;2006, the Company announced that it initiated a project to implement a new information
system, consolidating its three legacy operating systems into one integrated system. The project
is expected to span a 30-month phased implementation period, beginning in July&nbsp;2006, with an
estimated external implementation cost approximating $14&nbsp;million.
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 12pt"><B>(10)&nbsp;Supplemental Cash Flow Information:</B>
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">Interest paid during the first six months of 2006 and 2005 totaled $290 thousand and $2.1&nbsp;million,
respectively. Taxes paid during the first six months of 2006 and 2005 totaled $10.1&nbsp;million and
$10.0&nbsp;million, respectively.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">Supplemental schedule of non-cash investing activities:<BR>
In May&nbsp;2006, the Company purchased the remaining 51% interest in the GSP joint venture and in June
2006, the Company acquired all of the outstanding stock of PS&#038;W. In conjunction with the
acquisition, liabilities were assumed as follows:
</DIV>

<DIV align="center">
<TABLE style="font-size: 10pt" cellspacing="0" border="0" cellpadding="0" width="100%">
<!-- Begin Table Head -->
<TR valign="bottom">
    <TD width="76%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
</TR>
<TR style="font-size: 8pt" valign="bottom">
    <TD nowrap align="left" style="border-bottom: 0px solid #000000">(in thousands)</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="2" style="border-bottom: 1px solid #000000"><B>PS&#038;W</B></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="2" style="border-bottom: 1px solid #000000"><B>GSP</B></TD>
    <TD>&nbsp;</TD>
</TR>

<!-- End Table Head -->
<!-- Begin Table Body -->
<TR valign="bottom" style="background: #cceeff">
    <TD><DIV style="margin-left:15px; text-indent:-15px">Fair value of assets acquired (including goodwill)</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left">$</TD>
    <TD align="right">17,655</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left">$</TD>
    <TD align="right">5,419</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:15px; text-indent:-15px">Termination of existing equity method investment in joint venture</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="left">&nbsp;</TD>
    <TD align="right">(63</TD>
    <TD nowrap>)</TD>
</TR>
<TR valign="bottom" style="background: #cceeff">
    <TD><DIV style="margin-left:15px; text-indent:-15px">Cash paid for stock / ownership interest</DIV></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="left">&nbsp;</TD>
    <TD align="right">(8,916</TD>
    <TD nowrap>)</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="left">&nbsp;</TD>
    <TD align="right">(100</TD>
    <TD nowrap>)</TD>
</TR>
<TR style="font-size: 1px">
    <TD><DIV style="margin-left:15px; text-indent:-15px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD nowrap colspan="2" align="right" style="border-top: 1px solid #000000">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap colspan="2" align="right" style="border-top: 1px solid #000000">&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR><TD>&nbsp;</TD></TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:30px; text-indent:-15px">Liabilities assumed</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left">$</TD>
    <TD align="right">8,739</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left">$</TD>
    <TD align="right">5,256</TD>
    <TD>&nbsp;</TD>
</TR>
<TR style="font-size: 1px">
    <TD><DIV style="margin-left:15px; text-indent:-15px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
        <TD nowrap colspan="2" align="right" style="border-top: 3px double #000000">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
        <TD nowrap colspan="2" align="right" style="border-top: 3px double #000000">&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<!-- End Table Body -->
</TABLE>
</DIV>


<P align="center" style="font-size: 10pt"> 13 of 77
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<DIV style="font-family: 'Times New Roman',Times,serif">


<DIV align="left" style="font-size: 10pt; margin-top: 12pt"><B>Item&nbsp;2. </B><B><I>Management&#146;s Discussion and Analysis of Financial Condition and Results
of Operations</I></B>
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">The following discussion and analysis should be read in conjunction with our unaudited consolidated
financial statements and accompanying notes contained herein and our consolidated financial
statements, accompanying notes and Management&#146;s Discussion and Analysis of Financial Condition and
Results of Operations contained in our Annual Report on Form 10-K for the year ended December&nbsp;31,
2005. This discussion and analysis contains forward-looking statements that involve risks,
uncertainties and assumptions. Our actual results may differ materially from those anticipated in
these forward-looking statements as a result of many factors, including those described in Item&nbsp;1A,
Risk Factors, of our Annual Report on Form 10-K and in Part&nbsp;II, Item&nbsp;1A of this Form 10-Q and under
the caption &#147;Forward-Looking Information&#148; below.
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 12pt"><B>Overview</B>
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">We are a leading U.S. steel service center with over 50&nbsp;years of experience. Our primary focus is
on the direct sale and distribution of large volumes of processed carbon, coated and stainless
flat-rolled sheet, coil and plate products. We act as an intermediary between steel producers and
manufacturers that require processed steel for their operations. We serve customers in most carbon
steel consuming industries, including manufacturers and fabricators of transportation and material
handling equipment, automobiles, construction and farm machinery, storage tanks, environmental and
energy generation, food service and electrical equipment, as well as general and plate fabricators,
and steel service centers. We distribute our products primarily through a direct sales force.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">We operate as a single business segment with 16 strategically-located processing and distribution
facilities in Connecticut, Georgia, Illinois, Iowa, Michigan, Minnesota, North Carolina, Ohio and
Pennsylvania. Our geographic footprint allows us to focus on regional customers and larger
national and multi-national accounts, primarily located throughout the midwestern, eastern and
southern United States.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">On May&nbsp;1, 2006, we acquired the remaining 51% interest in G.S.P., LLC (GSP). Prior to May&nbsp;1, our
49% interest in GSP was accounted for under the equity method. Since May&nbsp;1, the results of
</DIV>
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<DIV style="font-family: 'Times New Roman',Times,serif">


<DIV align="left" style="font-size: 10pt; margin-top: 6pt">GSP
have been fully consolidated into our financial statements. In January&nbsp;2006, we announced plans to
close the Olympic Laser Processing (OLP)&nbsp;joint venture facility in Detroit, Michigan. OLP, which
was a processor of laser welded steel blanks for the automotive industry, ceased
operations in the first quarter of 2006. Our 50% interest in OLP is accounted for under the equity
method.
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt">In June&nbsp;2006, we acquired all of the outstanding stock of Tinsley Group &#150; PS&#038;W, Inc. (PS&#038;W), a
North Carolina-based fabricator of heavy construction equipment components. Since June&nbsp;2, the
results of PS&#038;W have been fully-consolidated into our financial statements.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">We sell a broad range of steel products, many of which have different gross profits and margins.
Products that have more value-added processing generally have a greater gross profit and higher
margins. Accordingly, our overall gross profit is affected by, among other things, product mix,
the amount of processing performed, the availability of steel, volatility in selling prices and
material purchase costs. We also perform toll processing of customer-owned steel, the majority of
which is performed by our Detroit and Georgia operations. We sell certain products internationally,
primarily in Puerto Rico and Mexico. All international sales and payments are made in United
States dollars. Recent international sales have been immaterial to our consolidated financial
results.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">Our results of operations are affected by numerous external factors including, but not limited to,
general and global business, economic and political conditions, competition, steel pricing and
availability, energy prices, pricing and availability of raw materials used in the production of
steel, customer demand for steel and their ability to manage their credit line availability and
layoffs or work stoppages by our own, our suppliers&#146; or our customers&#146; personnel.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">During the first quarter of 2006, the collective bargaining agreement covering hourly plant
employees at our Minneapolis plate facility was extended through March&nbsp;31, 2009. Collective
bargaining agreements covering our Detroit and other Minneapolis employees expire in 2007 and
subsequent years. From time-to-time, union organizing activities have been held at our other
locations, including current activity at our Iowa facility. We have never experienced a work
stoppage and we believe that our relationship with employees is good. However, any prolonged
</DIV>

<P align="center" style="font-size: 10pt"> 15 of 77
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<DIV style="font-family: 'Times New Roman',Times,serif">



<DIV align="left" style="font-size: 10pt; margin-top: 6pt">work
stoppages by our personnel represented by collective bargaining units could have a material adverse
effect on our business, financial condition, results of operations and cash flows.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 12pt"><B>Critical Accounting Policies</B>
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt">This discussion and analysis of financial condition and results of operations is based on our
consolidated financial statements, which have been prepared in accordance with accounting
principles generally accepted in the United States of America. The preparation of these financial
statements requires us to make estimates and assumptions that affect the amounts reported in the
financial statements. Actual results could differ from these estimates under different assumptions
or conditions. On an ongoing basis, we monitor and evaluate our estimates and assumptions.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">For further information regarding the accounting policies that we believe to be critical accounting
policies, and that affect our more significant judgments and estimates used in preparing our
consolidated financial statements, see our Annual Report on Form 10-K for the year ended December
31, 2005.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 12pt"><B>Results of Operations</B>
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt">The following table sets forth certain income statement data for the three and six months ended
June&nbsp;30, 2006 and 2005 (dollars are shown in thousands):
</DIV>
<DIV align="center">
<TABLE style="font-size: 10pt" cellspacing="0" border="0" cellpadding="0" width="100%">
<!-- Begin Table Head -->
<TR valign="bottom">
    <TD width="28%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="2%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="2%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="2%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="2%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="2%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="2%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="2%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="2%">&nbsp;</TD>
</TR>
<TR style="font-size: 8pt" valign="bottom">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="15" style="border-bottom: 1px solid #000000"><B>For the Three Months Ended June 30,</B></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="15" style="border-bottom: 1px solid #000000"><B>For the Six Months Ended June 30,</B></TD>
</TR>
<TR style="font-size: 8pt" valign="bottom">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="7" style="border-bottom: 1px solid #000000"><B>2006</B></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="7" style="border-bottom: 1px solid #000000"><B>2005</B></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="7" style="border-bottom: 1px solid #000000"><B>2006</B></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="7" style="border-bottom: 1px solid #000000"><B>2005</B></TD>
</TR>
<TR style="font-size: 8pt" valign="bottom">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="3"><B>% of net</B></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="3"><B>% of net</B></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="3"><B>% of net</B></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="3"><B>% of net</B></TD>
</TR>
<TR style="font-size: 8pt" valign="bottom">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="3" style="border-bottom: 1px solid #000000"><B>$</B></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="3" style="border-bottom: 1px solid #000000"><B>sales</B></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="3" style="border-bottom: 1px solid #000000"><B>$</B></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="3" style="border-bottom: 1px solid #000000"><B>sales</B></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="3" style="border-bottom: 1px solid #000000"><B>$</B></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="3" style="border-bottom: 1px solid #000000"><B>sales</B></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="3" style="border-bottom: 1px solid #000000"><B>$</B></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="3" style="border-bottom: 1px solid #000000"><B>sales</B></TD>
</TR>

<!-- End Table Head -->
<!-- Begin Table Body -->
<TR valign="bottom" style="background: #cceeff">
    <TD><DIV style="margin-left:15px; text-indent:-15px">Net sales</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="right">$</TD>
    <TD align="right">256,155</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right">&nbsp;</TD>
    <TD align="right">100.0</TD>
    <TD nowrap>%</TD>
    <TD>&nbsp;</TD>
    <TD align="right">$</TD>
    <TD align="right">241,482</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right">&nbsp;</TD>
    <TD align="right">100.0</TD>
    <TD nowrap>%</TD>
    <TD>&nbsp;</TD>
    <TD align="right">$</TD>
    <TD align="right">495,026</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right">&nbsp;</TD>
    <TD align="right">100.0</TD>
    <TD nowrap>%</TD>
    <TD>&nbsp;</TD>
    <TD align="right">$</TD>
    <TD align="right">526,040</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right">&nbsp;</TD>
    <TD align="right">100.0</TD>
    <TD nowrap>%</TD>
</TR>
<TR><TD>&nbsp;</TD></TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:15px; text-indent:-15px">Gross profit (1)</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">53,360</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right">&nbsp;</TD>
    <TD align="right">20.8</TD>
    <TD nowrap>%</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">35,999</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right">&nbsp;</TD>
    <TD align="right">14.9</TD>
    <TD nowrap>%</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">100,518</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right">&nbsp;</TD>
    <TD align="right">20.3</TD>
    <TD nowrap>%</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">85,422</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right">&nbsp;</TD>
    <TD align="right">16.2</TD>
    <TD nowrap>%</TD>
</TR>
<TR><TD>&nbsp;</TD></TR>
<TR valign="bottom" style="background: #cceeff">
    <TD><DIV style="margin-left:15px; text-indent:-15px">Operating expenses (2)</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">37,318</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right">&nbsp;</TD>
    <TD align="right">14.6</TD>
    <TD nowrap>%</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">30,062</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right">&nbsp;</TD>
    <TD align="right">12.4</TD>
    <TD nowrap>%</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">71,642</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right">&nbsp;</TD>
    <TD align="right">14.5</TD>
    <TD nowrap>%</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">62,652</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right">&nbsp;</TD>
    <TD align="right">11.9</TD>
    <TD nowrap>%</TD>
</TR>
<TR><TD>&nbsp;</TD></TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:15px; text-indent:-15px">Operating income</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="right">$</TD>
    <TD align="right">16,042</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right">&nbsp;</TD>
    <TD align="right">6.3</TD>
    <TD nowrap>%</TD>
    <TD>&nbsp;</TD>
    <TD align="right">$</TD>
    <TD align="right">5,937</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right">&nbsp;</TD>
    <TD align="right">2.5</TD>
    <TD nowrap>%</TD>
    <TD>&nbsp;</TD>
    <TD align="right">$</TD>
    <TD align="right">28,876</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right">&nbsp;</TD>
    <TD align="right">5.8</TD>
    <TD nowrap>%</TD>
    <TD>&nbsp;</TD>
    <TD align="right">$</TD>
    <TD align="right">22,770</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right">&nbsp;</TD>
    <TD align="right">4.3</TD>
    <TD nowrap>%</TD>
</TR>
<!-- End Table Body -->
</TABLE>
</DIV>



<DIV align="left">
<DIV style="font-size: 3pt; margin-top: 16pt; width: 18%; border-top: 1px solid #000000">&nbsp;</DIV>
</DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt">
<TR>
    <TD width="3%"></TD>
    <TD width="1%"></TD>
    <TD width="96"></TD>
</TR>

<TR valign="top">
    <TD nowrap align="left">(1)</TD>
    <TD>&nbsp;</TD>
    <TD>Gross profit is calculated as net sales less the cost of materials sold, exclusive of
depreciation.</TD>
</TR>

<TR style="font-size: 3pt"><TD>&nbsp;</TD></TR>

<TR valign="top">
    <TD nowrap align="left">(2)</TD>
    <TD>&nbsp;</TD>
    <TD>Operating expenses are calculated as total costs and expenses less the cost of materials sold.</TD>
</TR>

</TABLE>


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<DIV style="font-family: 'Times New Roman',Times,serif">






<DIV align="left" style="font-size: 10pt; margin-top: 6pt">Tons sold increased 7.5% to 343 thousand in the second quarter of 2006 from 319 thousand in
the second quarter of 2005. Tons sold in the second quarter of 2006 included 288 thousand from
direct sales and 55 thousand from toll processing, compared with 271 thousand direct tons and 48
thousand toll tons in the comparable period of last year. Tons sold increased 0.3% to 681
thousand in the first six months of 2006 from 678 thousand in the first six months of 2005. Tons
sold in the first six months of 2006 included 570 thousand direct tons and 111 thousand from toll
processing, compared with 584 thousand direct tons and 94 thousand toll tons in the comparable
period last year. During the second quarter of 2006, we experienced strong demand from our
customers, especially in the industrial equipment sector, and we expect demand to remain strong in
the second half of 2006, subject to normal seasonal patterns.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">Net sales increased 6.1% to $256.2&nbsp;million in the second quarter of 2006 from $241.5&nbsp;million in the
second quarter of 2005. Net sales decreased 5.9% to $495.0&nbsp;million in the first six months of 2006
from $526.0&nbsp;million in the first six months of 2005. Average selling prices for the second quarter
of 2006 decreased 1.3% from last year&#146;s second quarter and increased 7.3% from the first quarter of
2006. We expect our average selling prices during the third quarter of 2006 to remain at or exceed
levels recognized during the second quarter of 2006.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">As a percentage of net sales, gross profit increased to 20.8% in the second quarter of 2006 from
14.9% in the second quarter of 2005. For the first six months of 2006, gross margin increased to
20.3% from 16.2% in the first six months of 2005. We expect gross margin levels in the third
quarter of 2006 to be comparable to the second quarter of 2006.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">Operating expenses in the second quarter of 2006 increased 24.1% to $37.3&nbsp;million from $30.1
million in last year&#146;s second quarter. Operating expenses in the first six months of 2006
increased 14.3% to $71.6&nbsp;million from $62.7&nbsp;million during the first six months of 2005. The
increases in operating expenses are primarily attributable to higher distribution costs caused by
higher fuel costs and surcharges, the addition of our second facility in Chambersburg,
Pennsylvania, the increased number of laser processing machines in operation, increased variable
compensation expense, and the inclusion of operating expenses related to the consolidation of GSP
(starting on May 1) and PS&#038;W (starting on June 2). As a percentage of net sales, operating
expenses increased to 14.6% for the second quarter of 2006 from 12.4% in the comparable 2005
</DIV>

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<DIV style="font-family: 'Times New Roman',Times,serif">



<DIV align="left" style="font-size: 10pt; margin-top: 6pt">period. Operating expenses during the first six months of 2006 increased to 14.5% from 11.9% in
the comparable 2005 period.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">In 2006, the Company adopted SFAS No.&nbsp;123-R which requires us to record compensation expense for
stock options issued to employees and directors. Prior to 2006, we accounted for
stock options granted to employees and directors under the intrinsic value method of APB No.&nbsp;25,
where no compensation expense was recognized. We have elected to use the modified prospective
transition method where compensation expense is recorded prospectively. The adoption of SFAS No.
123-R resulted in $30 thousand of expense being recorded for stock options in the second quarter of
2006 and $112 thousand of expense being recorded for the first six months of 2006, compared to no
stock option expense being recognized during the first six months of 2005. For additional
information, see Note 7, Stock Options, of the Notes to Consolidated Financial Statements in this
Quarterly Report on Form 10-Q.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">Losses from joint ventures totaled $30 thousand in the second quarter of 2006, compared to income
of $200 thousand in the second quarter of 2005. Loss from joint ventures totaled $137 thousand for
the first six months of 2006, compared to income of $443 thousand in the first six months of 2005.
OLP ceased operations during the first quarter of 2006. Operating losses generated by OLP during
the first quarter of 2006 were recorded against the $3.5&nbsp;million reserve for loss on disposition of
joint ventures that was recorded at December&nbsp;31, 2005. During the second quarter of 2006, OLP
began liquidating its remaining assets. Offers from third parties to purchase the remaining assets
were less than anticipated and we recorded an additional $2.0&nbsp;million charge to reflect additional
expected obligations under our guarantee of OLP&#146;s debt. On May&nbsp;1, 2006, we increased our ownership
in GSP from 49% to 100%. Since May&nbsp;1, GSP&#146;s results have been fully consolidated in our financial
results.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">Financing costs totaled $345 thousand for the second quarter of 2006, compared to $1.4&nbsp;million for
the second quarter of 2005. Financing costs totaled $499 thousand for the first six months of
2006, compared to $2.7&nbsp;million for the first six months of 2005. Our effective borrowing rate,
inclusive of deferred financing fees and commitment fees, for the first six months of 2006 was 8.8%
compared to 5.6% in the first six months of 2005. The effective borrowing rate increased because
the unused line commitment fee was a larger percentage of total average outstanding
</DIV>

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<DIV style="font-family: 'Times New Roman',Times,serif">



<DIV align="left" style="font-size: 10pt; margin-top: 6pt">debt in 2006.
Debt levels increased during the second quarter of 2006 as the Company acquired PS&#038;W and
strategically increased its inventory in response to a strong steel market.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">For the second quarter of 2006, income before income taxes totaled $13.7&nbsp;million, compared to $4.8
million in the second quarter of 2005. For the first six months of 2006, income before
income taxes totaled $26.2&nbsp;million, compared to $20.5&nbsp;million in the first six months of 2005. An
income tax provision of 37.7% was recorded for the first six months of 2006, compared to a
provision of 38.5% for the first six months of 2005. We expect the effective tax rate to
approximate 38% to 39% for the remainder of 2006. Taxes paid totaled $10.1&nbsp;million and $10.0
million for the first six months of 2006 and 2005, respectively.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">Net income for the second quarter of 2006 totaled $8.4&nbsp;million or $.79 per diluted share, compared
to net income of $3.0&nbsp;million or $.29 per diluted share for the second quarter of 2005. Net income
for the first six months of 2006 totaled $16.4&nbsp;million or $1.54 per diluted share, compared to net
income of $12.6&nbsp;million or $1.21 per diluted share for the first six months of 2005.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 12pt"><B>Liquidity and Capital Resources</B>
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt">Our principal capital requirements include funding working capital needs, purchasing and upgrading
processing equipment and facilities and paying dividends. We use cash generated from operations,
leasing transactions, and our credit facility to fund these requirements.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">Working capital at June&nbsp;30, 2006 totaled $176.5&nbsp;million, a $43.4&nbsp;million increase from the end of
the prior year. Significant working capital changes included a $28.1&nbsp;million increase in accounts
receivable and a $38.1&nbsp;million increase in inventories, partially offset by decreases of $5.5
million in cash and cash equivalents and a $15.4&nbsp;million increase in accounts payable.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">For the six months ended June&nbsp;30, 2006, we used $31.6&nbsp;million of net cash from operations, of which
$18.4&nbsp;million was generated from operating activities and $50.0&nbsp;million was used for working
capital. We generated $43.3&nbsp;million from financing activities, consisting primarily of revolver
borrowings, inclusive of outstanding checks, proceeds from the exercise of stock options and
payment of dividends. We spent $17.1&nbsp;million on acquisitions and capital expenditures. In 2006, we
have increased our capital spending significantly over levels seen in
</DIV>

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<DIV style="font-family: 'Times New Roman',Times,serif">



<DIV align="left" style="font-size: 10pt; margin-top: 6pt">recent years. In January
2006, we purchased and equipped a 150,000 square foot facility in Chambersburg, Pennsylvania for
$5.9&nbsp;million to expand our plate processing and machining activities in that geographic area. We
added six new laser-processing lines during the first six months of 2006, all of which were or are
expected to be financed through operating leases. In
May&nbsp;2006, we purchased our joint venture partner&#146;s interest in GSP for $100 thousand. In June
2006, we acquired all of the outstanding stock of Tinsley Group &#150; PS&#038;W, Inc. for $10.1&nbsp;million. We
anticipate a post-closing working capital adjustment of $1.2&nbsp;million, thereby reducing our
preliminary effective purchase price of the stock to $8.9&nbsp;million. In July&nbsp;2006 we announced the
beginning of a project to implement a new single information system to replace the three systems we
currently use. The total external costs associated with the new information system are expected to
approximate $14&nbsp;million over the next 30&nbsp;months. We also anticipate using our financial position
to take advantage of a consolidating service center and fabricating industry.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">In the first half of 2006, our Board of Directors approved quarterly dividends of $.03 per share
that were paid on March&nbsp;15, 2006 and June&nbsp;15, 2006. In July&nbsp;2006, our Board of Directors approved
a quarterly dividend of $.03 per share which is payable on September&nbsp;15, 2006 to shareholders of
record as of September&nbsp;1, 2006. We expect to make regular quarterly dividend distributions in the
future, subject to the continuing determination by our Board of Directors that the payment of
dividends remains in the best interest of our shareholders.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">Our secured bank-financing agreement (the Credit Facility) is a revolving credit facility
collateralized by our accounts receivable, inventories, and substantially all of our property and
equipment. Borrowings are limited to the lesser of a borrowing base, comprised of eligible
receivables and inventories, or $110&nbsp;million in the aggregate. In April&nbsp;2006, we entered into an
amendment of the Credit Facility which, subject to the terms and conditions set forth in the
amendment: (i)&nbsp;extended the maturity date of the existing Credit Facility to December&nbsp;15, 2009,
with annual extensions at the banks&#146; option; (ii)&nbsp;increased the allowable investments in joint
ventures from $2.5&nbsp;million to $10&nbsp;million; and (iii)&nbsp;increased the annual limitation on capital
expenditures from $15&nbsp;million to $25&nbsp;million.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">The Credit Facility requires us to comply with various covenants, the most significant of which
include: (i)&nbsp;minimum availability of $10&nbsp;million, tested monthly, (ii)&nbsp;a minimum fixed charge
</DIV>

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<DIV style="font-family: 'Times New Roman',Times,serif">



<DIV align="left" style="font-size: 10pt; margin-top: 6pt">coverage ratio of 1.25, and a maximum leverage ratio of 1.75, which are tested quarterly, (iii)
restrictions on additional indebtedness, and (iv)&nbsp;limitations on dividends, capital expenditures
and investments. At June&nbsp;30, 2006 we had approximately $35&nbsp;million of availability under our
Credit Facility and we were in compliance with our covenants. The Credit Facility also contains an
accordion feature which allows us to add $25&nbsp;million of additional revolver capacity.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">We believe that funds available under our Credit Facility and lease arrangements, together with
funds generated from operations, will be sufficient to provide us with the liquidity necessary to
fund anticipated working capital requirements and capital expenditure requirements over the next 12
months. In the future, we may as part of our business strategy, acquire and dispose of other
assets in the same or complementary lines of business, enter into and exit strategic alliances and
joint ventures, and pursue other business ventures. Accordingly, the timing and size of our
capital requirements are subject to change as business conditions warrant and opportunities arise.
</DIV>

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<DIV style="font-family: 'Times New Roman',Times,serif">

<DIV align="left" style="font-size: 10pt; margin-top: 12pt"><B>Forward-Looking Information</B>
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt">This document contains various forward-looking statements and information that are based on
management&#146;s beliefs as well as assumptions made by and information currently available to
management. When used in this document, the words &#147;may,&#148; &#147;will,&#148; &#147;anticipate,&#148; &#147;should,&#148; &#147;intend,&#148;
&#147;expect,&#148; &#147;believe,&#148; &#147;estimate,&#148; &#147;project,&#148; &#147;plan,&#148; &#147;potential,&#148; &#147;continue,&#148; as well as the
negative of these terms or 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 those set forth in Item&nbsp;1A, Risk Factors, as found in our Annual
Report on 10-K for the year ended December&nbsp;31, 2005 and this Form 10-Q and the following:
</DIV>

<DIV style="margin-top: 6pt">
<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt">

<TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="2%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left"><B>&#149;</B></TD>
    <TD width="1%">&nbsp;</TD>
    <TD>general and global business, economic and political conditions;</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="2%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left"><B>&#149;</B></TD>
    <TD width="1%">&nbsp;</TD>
    <TD>competitive factors such as availability and pricing of steel, industry
inventory levels and rapid fluctuations in customer demand and pricing;</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="2%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left"><B>&#149;</B></TD>
    <TD width="1%">&nbsp;</TD>
    <TD>the cyclicality and volatility within the steel industry;</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="2%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left"><B>&#149;</B></TD>
    <TD width="1%">&nbsp;</TD>
    <TD>the ability of customers (especially in the automotive industry) to
maintain their credit availability;</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="2%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left"><B>&#149;</B></TD>
    <TD width="1%">&nbsp;</TD>
    <TD>layoffs or work stoppages by our own or our suppliers&#146; or customers&#146; personnel;</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="2%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left"><B>&#149;</B></TD>
    <TD width="1%">&nbsp;</TD>
    <TD>the availability and costs of transportation and logistical services;</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="2%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left"><B>&#149;</B></TD>
    <TD width="1%">&nbsp;</TD>
    <TD>equipment malfunctions or installation delays;</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="2%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left"><B>&#149;</B></TD>
    <TD width="1%">&nbsp;</TD>
    <TD>the successes of our strategic efforts and initiatives to increase sales
volumes, maintain cash turnover, maintain or improve inventory turns and reduce costs;</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="2%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left"><B>&#149;</B></TD>
    <TD width="1%">&nbsp;</TD>
    <TD>the adequacy of our information technology and business system software;</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="2%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left"><B>&#149;</B></TD>
    <TD width="1%">&nbsp;</TD>
    <TD>the financial results of OLP, including the timing and outcome of OLP&#146;s
efforts and ability to liquidate its assets and the impact of customer, supplier, and
competitive factors on OLP&#146;s liquidation plans;</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="2%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left"><B>&#149;</B></TD>
    <TD width="1%">&nbsp;</TD>
    <TD>the post-acquisition integration of PS&#038;W;</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="2%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left"><B>&#149;</B></TD>
    <TD width="1%">&nbsp;</TD>
    <TD>the successful implementation of our new information system; and</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="2%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left"><B>&#149;</B></TD>
    <TD width="1%">&nbsp;</TD>
    <TD>customer, supplier, and competitor consolidation, bankruptcy or insolvency.</TD>
</TR>


</TABLE>
</DIV>
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<DIV style="font-family: 'Times New Roman',Times,serif">


<DIV style="margin-top: 6pt"><TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt">



</TABLE>
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">Should one or more of these, or other risks or uncertainties materialize, or should underlying
assumptions prove incorrect, actual results may vary materially from those anticipated, expected,
believed, estimated, projected or planned. You are cautioned not to place undue reliance on these
forward-looking statements, which speak only as of the date hereof. We undertake no obligation to
republish revised forward-looking statements to reflect the occurrence of unanticipated events or
circumstances after the date hereof.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 12pt"><B>Item&nbsp;3. </B><B><I>Qualitative and Quantitative Disclosure About Market Risk</I></B>
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt">During the past several years, the base price of carbon flat-rolled steel has fluctuated
significantly. Declining prices could reduce our gross profit margin percentages to levels which
are lower than our historical levels. Higher levels of inventory at steel service centers and
end-use customers could cause competitive pressures which could also compress gross margins. Steel
prices began increasing at the end of the third quarter of 2005 and remained relatively level
during the fourth quarter of 2005 and the first quarter of 2006. Steel prices began increasing
during the second quarter of 2006. While we have been successful in the past in passing on
producers&#146; price increases and surcharges to our customers, there is no guarantee that we will be
able to pass on price increases to our customers during the third quarter of 2006 and beyond. The
possibility also exists that steel prices may decrease at some point during the remainder of 2006
which could result in lower sales, gross margin and income.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">Approximately 9% of our net sales in the first six months of 2006 were directly to automotive
manufacturer or manufacturers of automotive components and parts (&#147;Automotive Customers&#148;). The
automotive industry experiences significant fluctuations in demand based on numerous factors such
as general economic conditions and consumer confidence. The automotive industry is also subject,
from time to time, to labor work stoppages. The domestic automotive industry, which has
experienced a number of bankruptcies, is currently involved in significant restructuring. Certain
customers in this industry represent an increasing credit risk.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">We are exposed to the impact of interest rate changes and fluctuating steel prices. We have not
entered into any interest rate or steel commodity hedge transactions for speculative purposes or
otherwise.
</DIV>

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<DIV style="font-family: 'Times New Roman',Times,serif">

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">Our primary interest rate risk exposure results from variable rate debt. If interest rates in the
future were to increase 100 basis points (1.0%) from June&nbsp;30, 2006 rates, and assuming no change in
total debt from June&nbsp;30, 2006 levels, the additional annual interest expense to us would be
approximately $425 thousand. We currently do not hedge our exposure to variable interest rate
risk; however, we have the option to enter into 30 to 180&nbsp;day fixed base rate EURO loans under the
Credit Facility.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">Inflation generally affects us by increasing the cost of employee wages and benefits,
transportation services, processing equipment, purchased steel, energy and borrowings under our
credit facility. General inflation has not had a material effect on our financial results during
the past two years; however, we have experienced a significant increase in distribution expense as
a result of higher fuel and service costs.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">When raw material prices increase, competitive conditions will influence how much of the steel
price increase can be passed on to our customers. When raw material prices decline, customer
demands for lower costed product result in lower selling prices. Declining steel prices have
generally adversely affected our net sales and net income, while increasing steel prices favorably
affect net sales and net income.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 12pt"><B>Item&nbsp;4. </B><B><I>Controls and Procedures</I></B>
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt">The evaluation required by Rule&nbsp;13a-15 of the Securities Exchange Act of 1934 of the effectiveness
of our disclosure controls and procedures (as defined in Rule&nbsp;13a-15(e) under the Securities
Exchange Act of 1934) as of the end of the period covered by this Report have been carried out
under the supervision and with the participation of management, including our Chief Executive
Officer and Chief Financial Officer. These disclosure controls and procedures are designed to
provide reasonable assurance that information required to be disclosed in reports that are filed
with or submitted to the SEC is: (i)&nbsp;accumulated and communicated to management, including the
Chief Executive Officer and Chief Financial Officer, to allow timely decisions regarding required
disclosures; and (ii)&nbsp;recorded, processed, summarized and reported within the time periods
specified in the rules and forms of the SEC. Based on this evaluation, the Chief
</DIV>

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<DIV style="font-family: 'Times New Roman',Times,serif">



<DIV align="left" style="font-size: 10pt; margin-top: 6pt">Executive Officer and Chief Financial Officer concluded that, as of June&nbsp;30, 2006, our disclosure
controls and procedures were effective.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">There were no changes in our internal controls over financial reporting that occurred during the
second quarter of 2006 that have materially affected, or are reasonably likely to materially
affect, our internal control over financial reporting.
</DIV>

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<DIV align="left" style="font-size: 10pt; margin-top: 12pt"><B>Part II. OTHER INFORMATION</B>
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt">Items 1, 2, and 3 of this Part&nbsp;II are either inapplicable or are answered in the negative and are
omitted pursuant to the instructions to Part&nbsp;II.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 12pt"><B>Item&nbsp;1A. </B><B><I>Risk Factors</I></B>
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt">Information regarding risk factors appears in Item&nbsp;1A, Risk Factors, in our Annual Report on Form
10-K for the year ended December&nbsp;31, 2005 and in &#147;Management&#146;s Discussion and Analysis of Financial
Condition and Results of Operations&#148; in this Quarterly Report on Form 10-Q. Except for the item
shown below, there have been no material changes from the risk factors previously disclosed in our
Annual Report on Form 10-K for the year ended December&nbsp;31, 2005.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt"><B>Sales to the automotive industry could adversely affect our sales, margins and profitability.</B>
Approximately 9% of our 2006 sales were to Automotive Customers. Historically, due to the
concentration of customers in this industry, our gross margins on these sales have generally been
less than our margins on sales to customers in other industries. The continued difficulties faced
by domestic Automotive Customers in 2006 has further challenged our margins on such sales. In
addition, the precarious nature of the financial position of many domestic Automotive Customers has
caused us to forego sales due to credit concerns. The loss of such sales contributed to the
decrease in tons sold that we reported for the first quarter of 2006. We do not expect the
problems faced by our domestic Automotive Customers to significantly improve during the remainder
of 2006. If we are unable to generate sufficient future cash flow on our sales to Automotive
Customers, we may be required to record an impairment charge against the assets which are used to
service those customers.
</DIV>

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<DIV style="font-family: 'Times New Roman',Times,serif">

<DIV align="left" style="font-size: 10pt; margin-top: 6pt"><B>We may have difficulties integrating our acquisition of Tinsley Group &#150; PS&#038;W, Inc. into our
business which could adversely affect our results of operations. </B>In June&nbsp;2006, we acquired all of
the stock of Tinsley Group &#150; PS&#038;W, Inc. (PS&#038;W), a North Carolina-based fabricator of heavy
construction equipment components. Risks associated with the acquisition include, but are not
limited to:
</DIV>

<DIV style="margin-top: 6pt">
<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt">

<TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="2%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left"><B>&#149;</B></TD>
    <TD width="1%">&nbsp;</TD>
    <TD>our ability to realize anticipated benefits and the competitive position of
PS&#038;W after the acquisition;</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="2%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left"><B>&#149;</B></TD>
    <TD width="1%">&nbsp;</TD>
    <TD>the discovery of material unknown, assumed liabilities;</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="2%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left"><B>&#149;</B></TD>
    <TD width="1%">&nbsp;</TD>
    <TD>the possibility that costs or difficulties related to the acquisition will be greater
than expected;</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="2%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left"><B>&#149;</B></TD>
    <TD width="1%">&nbsp;</TD>
    <TD>the possibility that integration of the acquisition would result in a
diversion of management attention from the operation of our existing business;</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="2%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left"><B>&#149;</B></TD>
    <TD width="1%">&nbsp;</TD>
    <TD>the possibility that the anticipated benefits from the acquisition may not be
realized or take longer than expected to be realized; and</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="2%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left"><B>&#149;</B></TD>
    <TD width="1%">&nbsp;</TD>
    <TD>the possibility that disruptions from the acquisition may make it difficult
for PS&#038;W or us to maintain relationships with our respective customers, employees or
suppliers.</TD>
</TR>

</TABLE>
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">Post-acquisition difficulties with PS&#038;W, including those outlined above, could adversely affect our
business, our results of operations and our cash flows.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt"><B>Our project to initiate implementation of a new information system could adversely affect our
results of operations and cash flows. </B>In July&nbsp;2006, we announced the initiation of a project to
implement a new information system, consolidating our three legacy operating systems into one
integrated system. The objective is to standardize and streamline business processes and improve
support for our growing service center and fabrication business. The project plan anticipates a
30-month phased implementation beginning in July&nbsp;2006, with estimated external implementation costs
approximating $14&nbsp;million. Risks associated with the implementation include, but are not limited
to:
</DIV>

<DIV style="margin-top: 6pt">
<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt">

<TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="2%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left"><B>&#149;</B></TD>
    <TD width="1%">&nbsp;</TD>
    <TD>a significant deployment of capital and a significant use of management and
employee time;</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="2%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left"><B>&#149;</B></TD>
    <TD width="1%">&nbsp;</TD>
    <TD>the possibility that the timeline, costs or complexities related to the new
system implementation will be greater than expected;</TD>
</TR>

</TABLE>
</DIV>
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<DIV style="font-family: 'Times New Roman',Times,serif">


<DIV style="margin-top: 6pt"><TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt">



</TABLE>
</DIV>

<DIV style="margin-top: 6pt">
<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt">

<TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="2%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left"><B>&#149;</B></TD>
    <TD width="1%">&nbsp;</TD>
    <TD>the possibility that benefits from the new system may be lower or take longer
to realize than expected;</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="2%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left"><B>&#149;</B></TD>
    <TD width="1%">&nbsp;</TD>
    <TD>the possibility that disruptions from the implementation may make it difficult
for us to maintain relationships with our respective customers, employees or suppliers.</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="2%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left"><B>&#149;</B></TD>
    <TD width="1%">&nbsp;</TD>
    <TD>limitations on the availability and adequacy of the proprietary software or
consulting, training and project management services, as well as our ability to retain key
personnel assigned to the project.</TD>
</TR>

</TABLE>
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">We can provide no assurance that the implementation process will be successful or will occur as
planned and without disruption to operations. Difficulties associated with the design and
implementation of the new information system could adversely affect our business, our results of
operations and our cash flows.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 12pt"><B>Item&nbsp;4. </B><B><I>Submission of Matters to a Vote of Security Holders</I></B>
</DIV>



<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 6%">The Company&#146;s annual meeting of shareholders was held on April&nbsp;27, 2006.
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 6%">At the annual meeting, the Company&#146;s shareholders elected David A Wolfort, Ralph M. Della
Ratta, Jr., Martin H. Elrad and Howard L. Goldstein as Directors for a two-year term, which
expires at the annual meeting of shareholders in 2008.
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 6%">The following tabulation represents voting for the Directors:
</DIV>
<DIV align="center">
<TABLE style="font-size: 10pt" cellspacing="0" border="0" cellpadding="0" width="100%">
<!-- Begin Table Head -->
<TR valign="bottom">
    <TD width="76%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="2%">&nbsp;</TD>
</TR>
<TR style="font-size: 8pt" valign="bottom">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="3" style="border-bottom: 1px solid #000000">For</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="3" style="border-bottom: 1px solid #000000">Against</TD>
</TR>

<!-- End Table Head -->
<!-- Begin Table Body -->
<TR valign="bottom" style="background: #cceeff">
    <TD><DIV style="margin-left:15px; text-indent:-15px">David A. Wolfort</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">7,770,875</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">123,602</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:15px; text-indent:-15px">Ralph M. Della Ratta, Jr.</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">7,771,575</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">122,902</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom" style="background: #cceeff">
    <TD><DIV style="margin-left:15px; text-indent:-15px">Martin H. Elrad</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">7,724,304</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">170,173</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:15px; text-indent:-15px">Howard L. Goldstein</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">7,737,604</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">156,873</TD>
    <TD>&nbsp;</TD>
</TR>
<!-- End Table Body -->
</TABLE>
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt">The three Directors whose terms of office continued after the Annual Meeting were
Michael D. Siegal, Thomas M. Forman and James B. Meathe, whose terms expire upon the election of directors at the annual meeting of shareholders in 2007.
</DIV>


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<DIV style="font-family: 'Times New Roman',Times,serif">




<DIV align="left" style="font-size: 10pt; margin-top: 12pt"><B>Item&nbsp;5. </B><B><I>Other Items</I></B>
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt">In accordance with applicable SEC rules, the Company is providing the following disclosure
of Entry into a Material Definitive Agreement (Item&nbsp;1.01) in this Form 10-Q as the events
occurred within four business days of this filing:
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt">On August&nbsp;8, 2006, the Company and Michael D. Siegal entered into an employment agreement
pursuant to which Mr.&nbsp;Siegal will serve as Chairman and Chief Executive Officer of the
Company for a term ending January&nbsp;1, 2010. Under the agreement, Mr.&nbsp;Siegal receives a base
salary of $575,000 for 2006, increasing to $605,000 in 2007, and subject to possible
increases as determined by the Board. During the period of employment, Mr.&nbsp;Siegal will be
eligible for a performance bonus under the Company&#146;s Senior Management Compensation Program
Plan in place as of 2006, as amended, or such other bonus plan that replaces that plan, and
Mr.&nbsp;Siegal will be eligible to participate in any long-term incentive plan which may be
created or amended by the Board from time-to-time. If the Company terminates Mr.&nbsp;Siegal&#146;s
employment &#147;without cause&#148; during his employment period, he will continue to receive his
compensation under the agreement during the period ending on the earlier of (i)&nbsp;January&nbsp;1,
2010 or (ii)&nbsp;the second anniversary of the termination of his employment. The employment
agreement contains a two-year, non-competition and non-solicitation prohibition.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">On August&nbsp;8, 2006, the Company and Richard T. Marabito entered into an employment agreement
pursuant to which Mr.&nbsp;Marabito will serve as Chief Financial Officer of the Company for a
term ending January&nbsp;1, 2012. Under the agreement, Mr.&nbsp;Marabito receives a base salary of
$300,000 for 2006, increasing to $325,000 in 2007, and subject to possible increases as
determined by the Board. During the period of employment, Mr.&nbsp;Marabito will be eligible for
a performance bonus under the Company&#146;s Senior Management Compensation Program Plan in place
as of 2006, as amended, or such other bonus plan that replaces that plan, and Mr.&nbsp;Marabito
will be eligible to participate in any long-term incentive plan which may be created or
amended by the Board from time-to-time. If the Company terminates Mr.&nbsp;Marabito&#146;s employment
&#147;without cause&#148; during his employment period, he will continue to receive his compensation
under the agreement during the period ending on the earlier of (i)&nbsp;January&nbsp;1, 2012 or (ii)
the second anniversary of the termination of his employment. The employment agreement
contains a two-year, non-competition and non-solicitation prohibition.
</DIV>

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<DIV style="font-family: 'Times New Roman',Times,serif">

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">The foregoing summaries of the employment agreements with Messrs.&nbsp;Siegal and Marabito are
qualified in their entirety by reference to the full text of such agreements, copies of
which are filed as Exhibits 10.12 and 10.13, respectively to this Form 10-Q.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 12pt"><B>Item&nbsp;6. </B><B><I>Exhibits</I></B>
</DIV>

<DIV align="center">
<TABLE style="font-size: 10pt" cellspacing="0" border="0" cellpadding="0" width="100%">
<!-- Begin Table Head -->
<TR valign="bottom">
    <TD width="10%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="60%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="28%">&nbsp;</TD>
</TR>
<TR style="font-size: 8pt" valign="bottom">
    <TD nowrap align="left" style="border-bottom: 1px solid #000000"><B>Exhibit</B></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" style="border-bottom: 1px solid #000000"><B>Description of Document</B></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" style="border-bottom: 1px solid #000000"><B>Reference</B></TD>
</TR>

<!-- End Table Head -->
<!-- Begin Table Body -->
<TR><TD>&nbsp;</TD></TR>
<TR valign="bottom">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">2.1
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">Stock Purchase Agreement
dated May&nbsp;19, 2006 with
Goldstar Holdings Limited, a
subsidiary of the Eliza
Tinsley Group PLC and the
sole shareholder of Tinsley
Group-PS&#038;W, Inc., and
Goldstar Holding&#146;s joint
administrators
</TD>
    <TD>&nbsp;</TD>
    <TD align="center" valign="top">Filed herewith</TD>
</TR>
<TR valign="bottom"><!-- Blank Space -->
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="center" valign="top">&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">4.13
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">Amendment No.&nbsp;11 to Amended
and Restated Credit
Agreement and Waiver dated
April&nbsp;26, 2006 by and among
the Registrant, five banks
and Comerica Bank, as
Administrative Agent
</TD>
    <TD>&nbsp;</TD>
    <TD align="center" valign="top">Incorporated by reference
to Exhibit&nbsp;4.13 to
Registrant&#146;s Form&nbsp;8-K
filed with the Commission
on April&nbsp;28, 2006</TD>
</TR>
<TR valign="bottom"><!-- Blank Space -->
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="center" valign="top">&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">10.12*
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">Michael D. Siegal Employment
Agreement dated August&nbsp;8,
2006
</TD>
    <TD>&nbsp;</TD>
    <TD align="center" valign="top">Filed herewith</TD>
</TR>
<TR valign="bottom"><!-- Blank Space -->
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="center" valign="top">&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">10.13*
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">Richard T. Marabito
Employment Agreement dated
August&nbsp;8, 2006
</TD>
    <TD>&nbsp;</TD>
    <TD align="center" valign="top">Filed herewith</TD>
</TR>
<TR valign="bottom"><!-- Blank Space -->
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="center" valign="top">&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">10.20*
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">Olympic Steel, Inc.
Supplemental Executive
Retirement Plan
</TD>
    <TD>&nbsp;</TD>
    <TD align="center" valign="top">Incorporated by reference
to Exhibit&nbsp;10.20 to
Registrant&#146;s Form&nbsp;8-K
filed with the Commission
on April&nbsp;28, 2006</TD>
</TR>
<TR valign="bottom"><!-- Blank Space -->
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="center" valign="top">&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">31.1
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">Certification of the
Principal Executive Officer
pursuant to Section&nbsp;302 of
the Sarbanes-Oxley Act of
2002.
</TD>
    <TD>&nbsp;</TD>
    <TD align="center" valign="top">Filed herewith</TD>
</TR>
<TR valign="bottom"><!-- Blank Space -->
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="center" valign="top">&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">31.2
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">Certification of the
Principal Financial Officer
pursuant to Section&nbsp;302 of
the Sarbanes-Oxley Act of
2002.
</TD>
    <TD>&nbsp;</TD>
    <TD align="center" valign="top">Filed herewith</TD>
</TR>
<TR valign="bottom"><!-- Blank Space -->
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="center" valign="top">&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">32.1
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">Certification of the
Principal Executive Officer
pursuant to Section&nbsp;906 of
the Sarbanes-Oxley Act of
2002.
</TD>
    <TD>&nbsp;</TD>
    <TD align="center" valign="top">Furnished herewith</TD>
</TR>
<TR valign="bottom"><!-- Blank Space -->
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="center" valign="top">&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">32.2
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">Certification of the
Principal Financial Officer
pursuant to Section&nbsp;906 of
the Sarbanes-Oxley Act of
2002.
</TD>
    <TD>&nbsp;</TD>
    <TD align="center" valign="top">Furnished herewith</TD>
</TR>
<!-- End Table Body -->
</TABLE>
</DIV>



<DIV align="left">
<DIV style="font-size: 3pt; margin-top: 16pt; width: 18%; border-top: 1px solid #000000">&nbsp;</DIV>
</DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt">
<TR>
    <TD width="3%"></TD>
    <TD width="1%"></TD>
    <TD width="96"></TD>
</TR>

<TR valign="top">
    <TD nowrap align="left">*</TD>
    <TD>&nbsp;</TD>
    <TD>- this Exhibit is a management contract or compensatory plan or arrangement.</TD>
</TR>

</TABLE>


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<DIV style="font-family: 'Times New Roman',Times,serif">






<DIV align="center" style="font-size: 10pt; margin-top: 18pt"><B>SIGNATURES</B>
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt">Pursuant to the requirements of the Securities and Exchange Act of 1934, the registrant has duly
caused this report to be signed on its behalf by the undersigned thereto duly authorized.
</DIV>
<DIV align="center">
<TABLE style="font-size: 10pt" cellspacing="0" border="0" cellpadding="0" width="100%">
<!-- Begin Table Head -->
<TR valign="bottom">
    <TD width="60%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="30%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="6%">&nbsp;</TD>
</TR>
<!-- End Table Head -->
<!-- Begin Table Body -->
<TR valign="bottom">
    <TD valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="3" valign="top" align="left"><B>OLYMPIC STEEL, INC.</B></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="3" valign="top" align="left">(Registrant)</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
</TR>
<TR valign="bottom"><!-- Blank Space -->
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">Date: August&nbsp;9, 2006
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">By:
</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">/s/ Michael D. Siegal
<DIV style="font-size: 1pt; border-top: 1px solid #000000">&nbsp;</DIV>
<B>Michael D. Siegal</B>
</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">&nbsp;
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">Chairman of the Board and Chief</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">&nbsp;
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">Executive Officer</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
</TR>
<TR valign="bottom"><!-- Blank Space -->
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">&nbsp;
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">By:
</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">/s/ Richard T. Marabito
<DIV style="font-size: 1pt; border-top: 1px solid #000000">&nbsp;</DIV>
<B>Richard T. Marabito</B>
</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">&nbsp;
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">Chief Financial Officer</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">&nbsp;
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">(Principal Accounting Officer)</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
</TR>
<!-- End Table Body -->
</TABLE>
</DIV>



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<DOCUMENT>
<TYPE>EX-2.1
<SEQUENCE>2
<FILENAME>l21383aexv2w1.htm
<DESCRIPTION>EX-2.1
<TEXT>
<HTML>
<HEAD>
<TITLE>EX-2.1</TITLE>
</HEAD>
<BODY bgcolor="#FFFFFF">
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<DIV style="font-family: 'Times New Roman',Times,serif">




<DIV align="right" style="font-size: 10pt; margin-top: 12pt"><B>EXHIBIT 2.1</B>
</DIV>


<DIV align="center" style="font-size: 10pt; margin-top: 18pt"><B>STOCK PURCHASE AGREEMENT</B>
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;This Stock Purchase Agreement (this &#147;<U><B>Agreement</B></U>&#148;) is made as of May&nbsp;19, 2006, by
and among Oly Steel NC, Inc., a Delaware corporation and a wholly-owned subsidiary of Olympic
Steel, Inc., an Ohio corporation (&#147;<U><B>Buyer</B></U>&#148;), <B>GOLDSTAR HOLDINGS LIMITED </B>(in administration),
a private limited company organized under the laws of England and Wales (&#147;<U><B>Seller</B></U>&#148;), and
<B>DAVID K. DUGGINS </B>and <B>IAN BEST</B>, both of Ernst &#038; Young LLP, as administrators of Seller
(collectively, &#147;<U><B>Administrators</B></U>&#148;).
</DIV>

<DIV align="center" style="font-size: 10pt; margin-top: 18pt"><B>RECITALS</B>
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<B>A</B>.&nbsp;Seller is a subsidiary of Eliza Tinsley Group PLC, an English company, and Seller owns
all of the issued and outstanding shares (the &#147;<U><B>Shares</B></U>&#148;) of capital stock of <B>TINSLEY
GROUP-PS&#038;W, INC.</B>, a North Carolina corporation (the &#147;<U><B>Company</B></U>&#148;), and the Company does not
have any subsidiaries or equity interests.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<B>B.&nbsp;</B>Administrators were appointed joint administrators of Seller on January&nbsp;31, 2006 by the
directors of Seller pursuant to paragraph 21 of schedule B1 to the Insolvency Act 1986 of England
and Wales.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<B>C.&nbsp;</B>Buyer desires to purchase the Shares from Seller for the consideration and on the terms set
forth in this Agreement.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<B>D.&nbsp;</B>As reflected in the signature page hereto, Olympic Steel, Inc. (&#147;<U><B>Olympic</B></U>&#148;) shall
guarantee the obligations of Buyer set forth in this Agreement.
</DIV>

<DIV align="center" style="font-size: 10pt; margin-top: 18pt"><B>AGREEMENT</B>
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">The parties, intending to be legally bound, agree as follows:
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<B>1.&nbsp;DEFINITIONS</B>
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<B>1.1 </B><U><B>Definitions</B></U><B>. </B>For purposes of this Agreement, the following terms have the
meanings specified or referred to in this Section&nbsp;1:
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<B>&#147;</B><U><B>Accountants</B></U><B>&#148;</B>&#151; as defined in Section&nbsp;2.6(b).
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<B>&#147;</B><U><B>Administrators</B></U><B>&#148;</B>&#151; as defined in the first paragraph of this Agreement. A reference
to the Administrators shall be construed as being to the Administrators both joint and severally
and to any other person who is appointed as an administrator in substitution for any Administrator
or as an additional administrator in conjunction with the Administrators.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<B>&#147;</B><U><B>Affiliate</B></U><B>&#148;</B>&#151; with respect to any Person, any other Person, which directly or
indirectly controls, is controlled by or under common control with such Person, and, with respect
to any
natural Person, any spouse, parent, child, sibling or grandchild and any spouse of any of the
foregoing.
</DIV>

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<DIV style="font-family: 'Times New Roman',Times,serif">

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<B>&#147;</B><U><B>Agreement</B></U><B>&#148;</B>&#151; as defined in the first paragraph of this Agreement.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<B>&#147;</B><U><B>Bank</B></U><B>&#148;</B>&#151; Bank of America, N.A.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&#147;<U><B>Bank Loan Agreement</B></U>&#148; &#151; the Loan Agreement dated as of September&nbsp;22, 2005 between the
Company and Bank of America, N.A.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<B>&#147;</B><U><B>Base Working Capital</B></U><B>&#148;</B>&#151; $874,780, the amount equal to the Working Capital of the
Company as of March&nbsp;31, 2006, as set forth on <U>Schedule&nbsp;1.1(c)</U> attached hereto.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<B>&#147;</B><U><B>Buyer</B></U><B>&#148;</B>&#151; as defined in the first paragraph of this Agreement.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<B>&#147;</B><U><B>Closing</B></U><B>&#148;</B>&#151; as defined in Section&nbsp;2.4.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<B>&#147;</B><U><B>Closing Date</B></U><B>&#148;</B>&#151; as defined in Section&nbsp;2.4.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<B>&#147;</B><U><B>Closing Working Capital</B></U><B>&#148;</B>&#151; as defined in Section&nbsp;2.6(b).
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<B>&#147;</B><U><B>Company</B></U><B>&#148;</B>&#151; as defined in the Recitals of this Agreement.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<B>&#147;</B><U><B>Company Debt</B></U><B>&#148;&#151; </B>the Company&#146;s outstanding Debt under: (a)&nbsp;the Bank Loan Agreement,
(b)&nbsp;the Intercompany Debt and (c)&nbsp;any other Debt of the Company to be satisfied or released at
Closing such Company Debt as of March&nbsp;31, 2006 is identified on <U>Schedule&nbsp;1.1(a)</U> attached
hereto. <B>(For clarity, any Debt of the Company under: (a)&nbsp;the equipment leases referred to in
Exhibits A and B of Schedule&nbsp;1.</B><B>1(b)</B><B>; or (b)&nbsp;other leases referred to in the Due Diligence
Documentation, including without limitations, those on the Equipment Lease Schedule attached hereto
as Schedule&nbsp;1.</B><B>1(d)</B><B>, are not Debts of the Company to be satisfied or released at Closing since such
equipment leases will remain with the Company. Payables to trade creditors are not Company Debt).</B>
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<B>&#147;</B><U><B>Debt</B></U><B>&#148;</B>&#151;as to any Person, without duplication: (a)&nbsp;its obligations in respect of
borrowed money; (b)&nbsp;its liabilities for the deferred purchase price of property acquired by such
Person (excluding accounts payable arising in the ordinary course of business); (c)&nbsp;its obligations
under capital leases; (d)&nbsp;all liabilities for borrowed money secured by any Encumbrance with
respect to any property owned by such Person (whether or not it has assumed or otherwise become
liable for such liabilities); (e)&nbsp;all its liabilities in respect of letters of credit or
instruments serving a similar function issued or accepted for its account by banks and other
financial institutions (whether or not representing obligations for borrowed money); and (f)&nbsp;any
guaranty of such Person with respect to liabilities of a type described in any of clauses (a)
through (e)&nbsp;hereof.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<B>&#147;</B><U><B>Encumbrance</B></U><B>&#148;</B>&#151; any charge, claim, community property interest, condition, equitable
interest, lien, option, pledge, security interest, right of first refusal, or restriction of any
kind, including any restriction on use, voting, transfer, receipt of income, or exercise of any
other attribute of ownership.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<B>&#147;</B><U><B>Governmental Body</B></U><B>&#148;</B>&#151; any nation, government or state, and any political subdivision
thereof, and any entity exercising executive, legislative, judicial, regulatory or administrative
functions of or pertaining to government.
</DIV>

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<DIV style="font-family: 'Times New Roman',Times,serif">

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<B>&#147;</B><U><B>Intercompany Debt</B></U><B>&#148;</B>&#151;all Debt owed by the Company to Affiliates of the Company, such
Intercompany Debt as of March&nbsp;31, 2006 is identified on <U>Schedule&nbsp;1.1(a)</U> attached hereto and
will be updated at Closing in accordance with the Payoff Amounts.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<B>&#147;</B><U><B>Interest Rates</B></U><B>&#148;</B>&#151; as defined in Section&nbsp;2.6(d).
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<B>&#147;</B><U><B>Payoff Amount</B></U><B>&#148;&#151; </B>with respect to any Company Debt, the amount required to satisfy in
full such Company Debt as of the Closing Date, as set forth in (or calculated in accordance with)
the Payoff Letter related thereto.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<B>&#147;</B><U><B>Payoff Letters</B></U>"&#151; with respect to any Company Debt, a writing in form and substance
reasonably satisfactory to Seller and Buyer, executed by the applicable creditor and setting forth
the Payoff Amount (in U.S. dollars) and any other conditions necessary to cause such Company Debt
to be extinguished and any Encumbrance securing same to be released. The parties anticipate that
the Bank of America Payoff Letter may acknowledge that the Company will continue under those leases
reflected on Schedule&nbsp;1.1(b) attached hereto.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<B>&#147;</B><U><B>Person</B></U><B>&#148;</B>&#151; any individual, corporation (including any non-profit corporation), general
or limited partnership, limited liability company, joint venture, estate, trust, association,
organization, labor union, or other entity or Governmental Body.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<B>&#147;</B><U><B>Proposed Closing Working Capital</B></U><B>&#148;</B>&#151; as defined in Section&nbsp;2.6(a).
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<B>&#147;</B><U><B>Proposed Working Capital Statement</B></U><B>&#148;</B>&#151; as defined in Section&nbsp;2.6(a).
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<B>&#147;</B><U><B>Seller</B></U><B>&#148;</B>&#151; as defined in the first paragraph of this Agreement.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<B>&#147;</B><U><B>Seller&#146;s Knowledge</B></U><B>&#148; &#151; a</B>s used herein, &#147;known to Seller&#148; and &#147;Seller&#146;s knowledge&#148;
mean the actual knowledge of Andrew Hall and the Administrators, after making reasonable inquiry of
Mike Riesen and Rick Bauer (each an officer of the Company) but without any other investigation or
inquiry.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<B>&#147;</B><U><B>Seller Guaranties</B></U><B>&#148;</B>&#151; those certain guaranties executed by Seller or its Affiliates
guaranteeing certain Company obligations and identified on <U>Schedule&nbsp;1.1(b)</U>.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<B>&#147;</B><U><B>Shares</B></U><B>&#148;</B>&#151; as defined in the Recitals of this Agreement.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<B>&#147;</B><U><B>Working Capital</B></U><B>&#148;</B>&#151; the amount by which the Company&#146;s current assets exceed its
current liabilities; provided, that Working Capital shall include only those current assets and
current liabilities of the type included in the Base Working Capital calculation on <U>Schedule
1.1(c)</U>, and shall be determined in a manner consistent with the Working Capital Protocol.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<B>&#147;</B><U><B>Working Capital Protocol</B></U><B>&#148;</B>&#151; the principles, procedures and methodologies utilized in
determining the Base Working Capital (and in determining the Closing Working Capital) as set forth
on <U>Schedule&nbsp;1.1(c)</U>.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<B>1.2 </B><U><B>Other Definitional Provisions</B></U><B>. </B>The words &#147;hereof&#148;, &#147;herein&#148; and hereunder&#148; and words
of similar import when used in this Agreement shall refer to this Agreement as a
</DIV>

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<DIV style="font-family: 'Times New Roman',Times,serif">
<DIV align="left" style="font-size: 10pt; margin-top: 6pt">whole and not to
any particular provision of this Agreement, and Section references are to this Agreement unless
otherwise specified. The meanings given to terms defined herein shall be equally applicable to
both the singular and plural forms of such terms.
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<B>2.&nbsp;SALE AND TRANSFER OF SHARES; CLOSING</B>
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<B>2.1 </B><U><B>Shares</B></U><B>. </B>Subject to the terms and conditions of this Agreement, at the Closing, Seller
will sell and transfer the Shares to Buyer, and Buyer will purchase the Shares from Seller.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<B>2.2 </B><U><B>Purchase Price</B></U><B>. </B>The purchase price for the Shares will be Ten Million and Eighty
Thousand Dollars ($10,080,000) less the sum of the Payoff Amounts (the <B>&#147;Purchase Price&#148;</B>), subject
to adjustment as provided in Section&nbsp;2.6 below.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<B>2.3 </B><U><B>Payment of the Purchase Price; Delivery of the Shares</B></U>. Upon the terms and subject to
the conditions of this Agreement, at the Closing:
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a)&nbsp;Buyer shall pay the Purchase Price to Seller as follows:
</DIV>



<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 6%">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(i) Buyer shall pay to Seller, by wire transfer to an account designated by the
Administrators (subject to Section&nbsp;2.6(e) hereof) prior to the Closing, a net amount
equal to (A)&nbsp;the Purchase Price, <U>less</U> (B)&nbsp;the sum of all Payoff Amounts; and
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 6%">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(ii) Buyer shall pay to each creditor of Company Debt, by wire transfer to the
accounts designated in the Payoff Letters, the Payoff Amount for such Company Debt.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b)&nbsp;Seller will deliver to Buyer, stock certificate(s), in a form suitable for transfer,
registered in the name of Seller, evidencing the Shares, with an executed blank stock transfer
power attached.
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<B>2.4 </B><U><B>Closing</B></U><B>. </B>Subject to the satisfaction or waiver of the conditions set forth in Articles
6 and 7 hereunder, unless this Agreement shall have been terminated pursuant to the provision s of
Article&nbsp;8, the closing of the transaction provided for herein (the <B>&#147;Closing&#148;</B>) will take place at
the offices of Seller&#146;s counsel at 10:00&nbsp;a.m. (local time) on <B>June&nbsp;2, 2006 </B>(the <B>&#147;Closing Date&#148;</B>).
The parties shall consummate the Closing, to the extent possible, via facsimile and/or overnight
courier.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<B>2.5 </B><U><B>Seller Closing Deliveries</B></U><B>.</B>
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a)&nbsp;At the Closing, Seller will deliver to Buyer, unless previously provided, the
following:
</DIV>



<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 6%">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(i) all stock certificates, stock books, stock transfer ledgers, minute books
and the corporate seals of the Company; and
</DIV>

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<DIV style="font-family: 'Times New Roman',Times,serif">


<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 6%">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(ii) resignations of the directors of the Company, i.e. Andrew Hall and Fred
Hayhurst.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<B>2.6 </B><U><B>Purchase Price Adjustment</B></U><B>. </B>The Purchase Price will be adjusted in accordance with the
following procedures to reflect changes in Working Capital since March&nbsp;31, 2006:
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a)&nbsp;Not later than thirty (30)&nbsp;days after the Closing Date, Buyer will prepare and deliver to
Seller a statement and calculation of the Working Capital as of the Closing Date (the &#147;<U><B>Proposed
Working Capital Statement</B></U>&#148;), which calculation shall be prepared in a manner consistent with
the Base Working Capital and in accordance with the Working Capital Protocol (the &#147;<U><B>Proposed
Closing Working Capital</B></U>&#148;). If requested by Seller, Buyer shall provide Seller with its
workpapers related to the proposed Working Capital Statement, and provide access to the facility,
personnel, and accounting records. Seller shall have thirty (30)&nbsp;days from the date of delivery of
the Proposed Working Capital Statement to raise any objections to the Buyer&#146;s calculations. Any
such objections shall be limited to claims that the Proposed Working Capital was not computed in a
manner consistent with the Working Capital Protocol and the Base Working Capital, or that it
contains errors of arithmetic. Seller and Buyer may not raise objections to the Base Working
Capital or the Working Capital Protocol.
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b)&nbsp;Unless within thirty (30)&nbsp;days following delivery to Seller of the Proposed Closing
Working Capital Statement, Seller has delivered to Buyer notice in writing of Seller&#146;s objection to
the computation of the Proposed Closing Working Capital (such notice to contain a statement in
reasonable detail of the nature of Seller&#146;s objection), the Proposed Closing Working Capital
reflected in the Proposed Closing Working Capital Statement will be deemed mutually agreed by Buyer
and Seller, as the Working Capital as of the Closing Date (the &#147;<U><B>Closing Working Capital</B></U>&#148;).
If Seller shall have delivered such notice of objection in a timely manner, then Buyer, Seller and
Administrators will negotiate in good faith in an effort to reach mutual agreement on the Closing
Working Capital. If the parties do not reach such mutual agreement within thirty (30)&nbsp;days
following delivery of the objection notice, then, at the request of either Buyer or Seller, the
issues in dispute will be promptly submitted to the independent accounting firm of Deloitte &#038;
Touche. If Buyer and Seller mutually agree that Deloitte &#038; Touche is not promptly available, then
the issues in dispute will be submitted to KPMG (either Deloitte &#038; Touche or KPMG, as the case may
be, the &#147;Accountants&#148;).
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(c)&nbsp;If issues in dispute are submitted to the Accountants for resolution: (i)&nbsp;each party will
furnish to the Accountants such workpapers and other documents and information related to the
disputed issues as the Accountants may request and are available to the party and its subsidiaries
(or its independent public accountants), and will be afforded the
opportunity to present to the Accountants any material relating to the determination and to
discuss the determination with the Accountants; (ii)&nbsp;the Accountants shall review only those
aspects of the Proposed Working Capital Statement questioned by Seller in Seller&#146;s notice of
objection; (iii)&nbsp;such resolution by the Accountants of the Closing Working Capital, shall be set
forth in a notice delivered to the parties by the Accountants within thirty (30)&nbsp;days following
submission, and shall be binding and conclusive on the parties; and (iv)&nbsp;Buyer, on the one hand,
and Seller and Administrators, on the other hand, shall each bear fifty percent (50%) of the fees
and expenses of the Accountants for such determination.
</DIV>


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<DIV style="font-family: 'Times New Roman',Times,serif">




<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(d)&nbsp;To the extent that the Closing Working Capital, as mutually agreed by the parties or as
determined by the Accountants, as provided in Section&nbsp;2.6(c) above, equals or exceeds the Base
Working Capital, Buyer shall be obligated to pay, by wire transfer or other immediately available
funds, the amount of such excess promptly to Seller, together with interest on the amount of such
excess at the annual rate of four and one-half percent (4.5%) (the &#147;<U><B>Interest Rate</B></U>&#148;) from
the Closing Date to the date of such payment. To the extent that the Closing Working Capital, as
mutually agreed by the parties or as determined by the Accountants, as provided in Section&nbsp;2.6(c)
above, is less than the Base Working Capital, Seller shall be obligated to pay, by wire transfer or
other immediately available funds, the amount of such shortfall promptly to Buyer together with
interest on the amount of such shortfall at the Interest Rate from the Closing Date to the date of
such payment.
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(e)&nbsp;Until the Closing Working Capital has been finally determined and any amounts due to Buyer
pursuant to this Section&nbsp;2.6 are paid in full, the Administrators, on behalf of Seller, shall
retain a portion of the Purchase Price equal to $500,000 such amounts being for the benefit of
Buyer for ease of payment (if payment is due to Buyer hereunder) but is not intended to limit the
amount due Buyer.
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<B>3.&nbsp;REPRESENTATIONS AND WARRANTIES OF SELLER</B>
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Seller represents and warrants to Buyer that:
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<B>3.1 </B><U><B>Authority</B></U><B>. </B>This Agreement constitutes the legal, valid, and binding obligation of
Seller and the Administrators, enforceable against Seller and the Administrators in accordance with
its terms. The Administrators have the absolute and unrestricted right, power, authority, and
capacity to execute and deliver this Agreement on behalf of themselves and on behalf of Seller, and
to perform the Seller&#146;s obligations under this Agreement on its behalf.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<B>3.2 </B><U><B>Ownership</B></U><B>. </B>Seller holds of record and owns beneficially all of the Shares, free and
clear of any Encumbrances, other than Encumbrances in favor of Barclays Bank PLC, as syndicate
agent, that will be released at Closing upon payment of the Purchase Price. Seller is not a party
to any option, warrant, purchase right, or other contract or commitment that would require Seller
to sell, transfer, or otherwise dispose of any of the Shares (other than this Agreement).
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<B>3.3 </B><U><B>Data Room&nbsp;Disclosures</B></U><B>. </B>In a separate document provided by Seller is a listing of: (a)&nbsp;all agreements and documents
stored and made available to Buyer at an online electronic data room and at the Seller&#146;s counsel
offices (collectively, the &#147;Data Room&#148;) pursuant to its written request dated March&nbsp;21, 2006 to
Seller, Company or Administrators for due diligence documentation in connection with this
Agreement; and (b)&nbsp;the due diligence materials delivered to Buyer on May&nbsp;15, 2006, or otherwise
delivered pre-signing and reflected on such lists. The combination of the materials reflected on
such lists are referred to collectively herein as the &#147;Due Diligence Documentation,&#148; and true and
complete copies of such Due Diligence Documentation have been provided or otherwise made available
to Buyer.
</DIV>

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<DIV style="font-family: 'Times New Roman',Times,serif">

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<B>3.4 </B><U><B>Other Discussions</B></U><B>. </B>In a separate document provided by Seller is a list of all
confidentiality agreements Seller, Company, Administrators and/or its respective Affiliates have
entered into with third parties in connection with the sale of Company.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<B>3.5 </B><U><B>Limitation</B></U><B>. </B>EXCEPT FOR THE REPRESENTATIONS AND WARRANTIES CONTAINED IN SECTION 3.1
THROUGH SECTION 3.4 OF THIS AGREEMENT, SELLER AND ADMINISTRATORS MAKE NO REPRESENTATIONS OR
WARRANTIES WHATSOEVER WITH RESPECT TO THE TRANSACTIONS CONTEMPLATED HEREBY, THE BUSINESS, FINANCIAL
CONDITION OR PROSPECTS OF THE COMPANY OR THE COMPANY&#146;S ASSETS OR LIABILITIES (WHETHER KNOWN,
UNKNOWN, ACCRUED OR UNACCRUED). IN PARTICULAR, AND EXCEPT AS SET FORTH IN SECTION 3.3 HEREOF,
SELLER MAKES NO REPRESENTATIONS OR WARRANTIES WITH RESPECT TO THE ACCURACY OR COMPLETENESS OF ANY
DOCUMENTATION OR FINANCIAL OR OTHER INFORMATION PROVIDED BY SELLER, THE COMPANY, ADMINISTRATORS, OR
ANY OF THEIR RESPECTIVE AFFILIATES, OFFICERS, DIRECTORS, EMPLOYEES, AGENTS OR REPRESENTATIVES, IN
CONNECTION WITH THE TRANSACTIONS CONTEMPLATED HEREBY.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<B>4.&nbsp;REPRESENTATIONS AND WARRANTIES OF BUYER</B>
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Buyer represents and warrants to each of Seller and Administrators as follows:
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<B>4.1 </B><U><B>Authority</B></U><B>. </B>This Agreement constitutes the legal, valid, and binding obligation of
Buyer or Olympic, enforceable against Buyer and Olympic in accordance with its terms, and Buyer and
Olympic have the absolute and unrestricted right, power, and authority to execute and deliver this
Agreement and to perform their respective obligations under this Agreement, subject to the approval
of the respective Boards of Directors of Buyer and Olympic of this Agreement and the transactions
contemplated hereby (collectively, the <B>&#147;Buy-Side Board Approvals&#148;</B>). The respective Boards of
Directors of Buyer and Olympic have been informed by management of the transactions contemplated
hereby and neither Buyer nor Olympic is aware of any reason why such approval will not be obtained.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<B>4.2 </B><U><B>Insolvency of Seller</B></U><B>. </B>Buyer understands that the Shares are offered by an insolvent
company in circumstances where it is usual that only the limited representations and warranties
contained in Article&nbsp;3 hereof can be given by or on behalf of Seller or Administrators.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<B>4.3 </B><U><B>Knowledge and Experience</B></U><B>. </B>Buyer and its affiliates and their respective directors,
officers, employees, agents and representatives have such knowledge and such experience in
financial and business matters, generally, and the operation of construction equipment component
businesses, specifically, that they are capable of evaluating all of the merits and risks
associated with the acquisition of the Shares and Buyer&#146;s future operation of the Company as
contemplated by this Agreement. In making its decision to purchase the Shares, Buyer has relied,
and will rely, upon the results of its own independent investigations, inspections, examinations,
appraisals, evaluations and due diligence. Buyer has not relied, and will not rely, upon any
representation, warranty, assurance, guaranty, or promise of Seller, the Company and/or
Administrators or any of their respective affiliates, directors, officers, employees, agents, or
representatives, or any other person purporting to act on behalf of Seller,
</DIV>

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<DIV style="font-family: 'Times New Roman',Times,serif">
<DIV align="left" style="font-size: 10pt; margin-top: 6pt">the Company and/or
Administrators, other than the representations and warranties which are expressly set forth in this
Agreement. Buyer understands that, no person has any authority to make or furnish any other
representation, warranty assurance, guaranty or promise with respect to the Shares, the Company or
otherwise pertaining to the transactions which are the subject of this Agreement.
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<B>4.4 </B><U><B>Due Diligence</B></U><B>. </B>Prior to the date hereof, Buyer has conducted a thorough review of (i)
the Due Diligence Documentation. Buyer has conducted telephonic interviews with Mike Riesen and
Rick Bauer in which it was given the opportunity to ask questions regarding the Company, its
conditions, performance and prospects, and to make arrangements satisfactory to it regarding the
future services of Mike Riesen and Rick Bauer. As of the date hereof, neither Buyer nor Olympic is
aware of any agreement or information that would cause either of the conditions set forth in
Sections&nbsp;6.4 and 6.5 not to be satisfied at the Closing.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<B>4.5 </B><U><B>No Projected Benefits</B></U><B>. </B>Buyer hereby acknowledges and agrees that, notwithstanding any
provision of this Agreement to the contrary and notwithstanding any information contained in any of
the documents or materials furnished or to be furnished to Buyer during the course of Buyer&#146;s due
diligence, none of Seller, the Company or Administrators, or any of their respective directors,
officers, employees, agents or representatives of Seller or any other person purporting to act on
their behalf has made any representation, warranty, assurance, guaranty or promise that Buyer&#146;s
operation of the Company will achieve any particular results but, instead, all profit, gain,
appreciation and other benefits to be realized from the operation of the Company will depend
entirely upon Buyer&#146;s business acumen and economic factors outside of Seller&#146;s and Administrators&#146;
control.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<B>5.&nbsp;CERTAIN COVENANTS AND AGREEMENTS OF SELLER AND BUYER</B>
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<B>5.1 </B><U><B>Confidentiality</B></U><B>. </B>The parties acknowledge that Olympic and Seller have previously
executed an agreement dated February&nbsp;17, 2006, as amended May&nbsp;17, 2006 (the <B>&#147;</B><U><B>Confidentiality
Agreement</B></U><B>&#148;</B>), and which Confidentiality Agreement shall continue in full force and effect in
accordance with their respective terms.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<B>5.2 </B><U><B>Pre-Closing Conduct of Business</B></U><B>. </B>From and after the date of this Agreement and up
through the Closing or termination of this Agreement, Seller will use commercially reasonable
efforts to cause the Company to conduct the Company&#146;s business in the normal and ordinary business
course, acknowledging that the Company is in the process of being sold and Seller is in
Administration. No liability or obligation under or arising out of the Section&nbsp;5.2 shall survive
Closing and Buyer waives any such right upon Closing.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<B>5.3 </B><U><B>Continuing Due Diligence</B></U><B>. </B>Buyer and its accountants, counsel and other
representatives, shall be afforded as much access as practicable during the period prior to the
Closing or termination of this Agreement to (i)&nbsp;matters related to the Shares, (ii)&nbsp;Company&#146;s
properties, personnel, books, contracts, commitments and records and (iii)&nbsp;all other information
concerning the business, properties and personnel of Company as Buyer may reasonably request, and
Seller and Administrators shall take all reasonable measures to provide Buyer the opportunity to
review all documents and materials relevant to the Shares and the Company and to ask questions of,
and receive answers from any of the directors, officers, employees, agents, or
</DIV>

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<DIV style="font-family: 'Times New Roman',Times,serif">
<DIV align="left" style="font-size: 10pt; margin-top: 6pt">representatives of
Seller, the Company and/or Administrators relating to the Company. All such continuing due
diligence shall be scheduled so as to minimize disruption of the Company&#146;s operations. Neither the
Company nor the Seller shall be required to incur any out of pocket expenses related to the due
diligence unless Buyer agrees to reimburse for same.
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<B>5.4 </B><U><B>Best Efforts</B></U><B>. </B>Subject to the terms and conditions herein provided, Seller, on the one
hand, and Buyer on the other hand, agree to use their respective commercially reasonable efforts
(but expressly excluding the institution of litigation) to take, or cause to be taken, all action
and to do, or cause to be done, all things necessary, proper or advisable to satisfy the conditions
in Articles 6 and 7 and to consummate and make effective the transactions contemplated by this
Agreement. Without limiting the generality of the foregoing, Buyer agrees to use commercially
reasonable efforts (but expressly excluding the institution of litigation) to assist in obtaining
the release of the Seller Guaranties including, without limitation, providing the substitute
guarantors by Buyer if requested by a creditor.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<B>5.5 </B><U><B>Insurance</B></U><B>. </B>Buyer agrees that at Closing where practicable, it will add the Company to
its insurance policies from and after the Closing and name the Company as an additional insured
under Olympic&#146;s policy. If adding the Company to Buyer&#146;s insurance policies is not practicable,
Buyer agrees to continue such Company policies that were in place immediately prior to Closing.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<B>5.6 </B><U><B>Expenses</B></U><B>. </B>Except as otherwise expressly provided herein, all costs, fees and expenses
incurred in connection with this Agreement and the transactions contemplated hereby (including fees
and disbursements of financial advisors, accountants, and attorneys and any brokers or finders)
shall be paid (a)&nbsp;by Seller, if such costs or expenses are incurred on behalf of Seller,
Administrators or the Company, and (b)&nbsp;by Buyer, if such costs or expenses are incurred by or on
behalf of Buyer.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<B>5.7 </B><U><B>Exclusivity</B></U><B>. </B>Seller and Administrators agree that Buyer shall have sole rights to an
exclusivity period, and Seller and Administrators shall additionally cause Company to abide by such
rights, such period commencing on the date hereof until the earliest of (i)&nbsp;5:00 p.m. EST on
Monday, May&nbsp;22, 2006<B>, </B>unless prior to such time Buyer advises Seller in writing that the condition
precedent to closing set forth in Section&nbsp;6.3 has been satisfied or waived, (ii)&nbsp;the Closing and
(iii)&nbsp;the date of termination of this Agreement pursuant to the provisions of Section&nbsp;8.1 hereof.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<B>6.&nbsp;CONDITIONS PRECEDENT TO BUYER&#146;S OBLIGATION TO CLOSE</B>
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Buyer&#146;s obligation to purchase the Shares and to take the other actions required to be taken
by Buyer at the Closing is subject to the satisfaction, at or prior to the Closing, of each of the
following conditions (any of which may be waived by Buyer, in whole or in part):
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<B>6.1 </B><U><B>Accuracy of Representations</B></U><B>. </B>The representations and warranties of Seller in Article&nbsp;3
shall be true and correct in all material respects on and as of the Closing Date as if made on and
as of the Closing Date.
</DIV>

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<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<B>6.2 </B><U><B>Compliance with Agreements</B></U><B>. </B>Each of the agreements or obligations required by this
Agreement to be performed or complied with by Seller at or prior to the Closing shall have been
duly performed or complied with in all material respects.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<B>6.3 </B><U><B>Board Approval</B></U><B>. </B>The Buy-Side Board Approvals shall have been obtained.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<B>6.4 </B><U><B>Due Diligence</B></U><B>. </B>During the post-signing due diligence process, no material agreements
or information known to Seller and not previously included or referred to in the Due Diligence
Documentation or otherwise disclosed to Buyer prior to execution of this Agreement will have been
found to exist. For these purposes &#147;material&#148; means: (i)&nbsp;any liabilities which are, in aggregate,
in excess of $100,000 of the Company that United States generally accepted accounting principles
would require be disclosed on the Company&#146;s balance sheet as of the Closing Date, or in the notes
thereto (other than liabilities which Seller agrees shall be paid or provided for at Closing from
the Purchase Price and current liabilities eligible to be included in the computation of Closing
Working Capital), or (ii)&nbsp;any customer contracts which obligate the Company to provide a material
amount of goods or services after December&nbsp;31, 2006 and which cannot be terminated by the Company
without penalty prior to such date.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<B>6.5 </B><U><B>Status of Customer Contracts</B></U><B>. </B>No recurring customer from which Company shall have
received aggregate revenues of $1,000,000 or more in the prior 24&nbsp;months of the date of this
Agreement, shall have effected, or provided written notice or given written indication with respect
to, a cancellation or reduction, or other negative changes to the terms, in such third party&#146;s
purchases from the Company, other than: (a)&nbsp;any such notices, indications, cancellations,
reductions or negative changes which were not known to Seller as of the date hereof or which were
previously included or referred to in the Due Diligence Materials or otherwise disclosed to Buyer
prior to the execution of this Agreement or (b)&nbsp;reductions or changes otherwise arising from
changes in the customer&#146;s build program.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<B>6.6 </B><U><B>Ordinary Course Conduct</B></U><B>. </B>Between the date of this Agreement and the Closing, neither
the Company nor Seller shall be in violation, or have violated, Section&nbsp;5.2 hereof.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<B>6.7 </B><U><B>No Proceedings</B></U><B>. </B>No action or proceeding shall have been instituted or, to the
knowledge of Buyer or Olympic, threatened before any Governmental Body or any other third party to
restrain or prohibit any of the transactions contemplated hereby.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<B>6.8 </B><U><B>Payoff Letters</B></U><B>. </B>No later than one business day prior to Closing, Buyer shall have
received Payoff Letters for all the Company Debt as of the Closing Date.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<B>6.9 </B><U><B>Release of Company Guaranty</B></U><B>. </B>Buyer shall have received reasonably satisfactory written
evidence that, upon payment of the Purchase Price, (i)&nbsp;the Company shall be released from all of
its corporate guaranties of obligations of its Affiliates, including, without limitation, the
guarantee of all obligations of Eliza Tinsley Group PLC to the syndicate represented by Barclays
Bank Plc., as syndicate agent (the &#147;Agent&#148;) and (ii)&nbsp;the Agent&#146;s lien on the Shares shall be
released.
</DIV>

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<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<B>6.10 </B><U><B>Debt</B></U><B>. </B>Since March&nbsp;31, 2006, the Company has not incurred any Company Debt except as:
(a)&nbsp;disclosed on the March&nbsp;31<SUP style="font-size: 85%; vertical-align: text-top">st</SUP>, 2006 Balance Sheet or (b)&nbsp;paid or satisfied by the
Seller at the Closing.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<B>7.&nbsp;CONDITIONS PRECEDENT TO SELLER&#146;S OBLIGATION TO CLOSE</B>
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Seller&#146;s obligation to sell the Shares and to take the other actions required to be taken by
Seller at the Closing is subject to the satisfaction, at or prior to the Closing, of each of the
following conditions (any of which may be waived by Seller, in whole or in part):
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<B>7.1 </B><U><B>Accuracy of Representations</B></U><B>. </B>All of the representations and warranties of Buyer in
Article&nbsp;4 shall be true and correct in all material respects on and as of the Closing Date as if
made on and as of the Closing Date.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<B>7.2 </B><U><B>Compliance with Agreements</B></U><B>. </B>Each of the agreements or obligations required by this
Agreement to be performed or complied with by Buyer at or prior to the Closing shall have been duly
performed or complied with in all material respects.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<B>7.3 </B><U><B>Board Approval</B></U><B>. </B>The Buy-Side Board Approvals shall have been obtained.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<B>7.4 </B><U><B>No Proceedings</B></U><B>. </B>No action or proceeding shall have been instituted or, to the
knowledge of Seller, threatened before any Governmental Body or any other third party to restrain
or prohibit any of the transactions contemplated hereby.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<B>7.5 </B><U><B>Release of Seller Guaranties</B></U><B>. </B>Seller and its Affiliates shall have obtained
satisfactory releases from all of its obligations under the Seller Guaranties.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<B>8.&nbsp;TERMINATION</B>
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<B>8.1 </B><U><B>Termination Events</B></U><B>. </B>This Agreement may, by notice given prior to or at the Closing, be
terminated:
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a)&nbsp;by mutual consent of Buyer and Seller;
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b)&nbsp;by either Buyer, on the one hand, or Seller, on the other hand, if the Closing shall not
have occurred on or prior to the date specified in Section&nbsp;2.4 hereof (provided the terminating
party or parties is not otherwise in material breach of this Agreement);
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(c)&nbsp;by either Buyer, on the one hand, or Seller, on the other hand, if the Buyer has not
notified the Seller, on or before close of business on Monday, May&nbsp;22, 2006, (5:00 p.m. EST) that
the condition precedent to Closing set forth in Section&nbsp;6.3 has been satisfied or waived;
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(d)&nbsp;by Buyer, if a material breach of any provision of this Agreement has been committed by
Seller and such breach has not been waived by Buyer;
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(e)&nbsp;by Seller, if a material breach of any provision of this Agreement has been committed by
Buyer or Olympic and such breach has not been waived by Seller;
</DIV>


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<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(f)&nbsp;by Buyer, if any condition in Section&nbsp;6 has not been satisfied as of the date for Closing
or if satisfaction of any such condition is or becomes impossible (other than through the failure
of Buyer or Olympic to comply with its obligations under this Agreement); or
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(g)&nbsp;by Seller, if any condition in Section&nbsp;7 has not been satisfied as of the date for Closing
set forth in Section&nbsp;2.4 or if satisfaction of any such condition is or becomes impossible (other
than through the failure of Seller to comply with its obligations under this Agreement).
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<B>8.2 </B><U><B>Effect of Termination</B></U><B>. </B>Each party&#146;s right of termination under Section&nbsp;8.1 is in
addition to any other rights it may have under this Agreement or otherwise, and the exercise of a
right of termination will not be an election of remedies. If this Agreement is terminated pursuant
to Section&nbsp;8.1, all further obligations of the parties under this Agreement will terminate, except
that the obligations in Sections&nbsp;5.1, 5.6, 8.2, 8.3, 10.1, 10.3 and 10.5 will survive; provided,
however, that if this Agreement is terminated by a party because the non-terminating party or
parties have breached its or their representations, warranties, covenants or agreements herein and
have not promptly cured such breach after written notice from the terminating party, the
terminating party&#146;s right to pursue all legal remedies shall survive such termination unimpaired.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<B>8.3 </B><U><B>Reduction of Account Payable</B></U><B>. </B>Notwithstanding anything else herein to the contrary, in
the event this Agreement is terminated pursuant to Section&nbsp;8.1(c), (e)&nbsp;or (g) (other than a
termination as a result of the non-satisfaction of the conditions in Sections&nbsp;7.4 and 7.5), Olympic
agrees to reduce the outstanding balance of the Company&#146;s trade account payable owed to Olympic
(i.e. monies owing to Olympic by the Company for steel supplied by Olympic to the Company, the
&#147;Company Payable&#148;) by the sum of $200,000, which shall be applied to reduce the oldest extant
invoices with such reduction of the Company Payable to be effective as of the date of such
termination and shall be in full and complete satisfaction of any claim the Seller, Administrator
or Company may have in connection with or arising from this Agreement and/or such termination. For
purposes of clarification, the foregoing sentence shall have no force or effect upon Olympic&#146;s or
the Company&#146;s rights and obligations under the Supply Agreement dated May&nbsp;19, 2006, executed
contemporaneous herewith. The Parties agree that except for such $200,000 reduction of the Company
Payable, the outstanding balance of the Company Payable shall continue to remain owing.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<B>9.&nbsp;</B><U><B>Survival</B></U><B>. </B>All representations and warranties in this Agreement shall survive the
Closing for a period of six months following the Closing Date.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<B>10.&nbsp;GENERAL PROVISIONS</B>
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<B>10.1 </B><U><B>Public Announcements</B></U><B>. </B>Except as required by law or, with respect to Buyer, by the
Securities and Exchange Commission or obligations pursuant to any listing agreement with the NASD,
any public announcement or similar publicity with respect to this Agreement or the transactions
contemplated hereby will be issued, if at all, at such time and in such manner as the parties shall
mutually determine.
</DIV>

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<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<B>10.2 </B><U><B>Notices</B></U><B>. </B>All notices, consents, waivers, and other communications under this
Agreement must be in writing and will be deemed to have been duly given when (a)&nbsp;delivered by hand
(with written confirmation of receipt), (b)&nbsp;sent by telecopier (with written confirmation of
receipt), provided that a copy is mailed by registered mail, return receipt requested, or (c)&nbsp;when
received by the addressee, if sent by a nationally recognized overnight delivery service (receipt
requested), in
each case to the appropriate addresses and telecopier numbers set forth below (or to such other
addresses and telecopier numbers as a party may designate by notice to the other parties):
</DIV>
<DIV align="left" style="font-size: 10pt; margin-left: 6%; margin-top: 6pt">If to Seller and/or the Administrator:
</DIV>

<DIV align="left" style="font-size: 10pt; margin-left: 9%; margin-top: 6pt">Goldstar Holdings Limited<BR>
c/o Ernst &#038; Young LLP<BR>
No.&nbsp;1 Colmore Square<BR>
Birmingham<BR>
B4 6HQ<BR>
United Kingdom<BR>
Attention: David K. Duggins<BR>
Facsimile No.: 011 44 121 535 2448
</DIV>

<DIV align="left" style="font-size: 10pt; margin-left: 9%; margin-top: 6pt">with a copy to:
</DIV>

<DIV align="left" style="font-size: 10pt; margin-left: 9%; margin-top: 6pt">Parker, Poe, Adams &#038; Bernstein L.L.P.<BR>
Three Wachovia Center<BR>
401 S. Tryon Street, Suite&nbsp;3000<BR>
Charlotte, North Carolina 28202<BR>
Attention: Albert E. Guarnieri, Esq.<BR>
Facsimile No.: (704)&nbsp;334-4706
</DIV>

<DIV align="left" style="font-size: 10pt; margin-left: 6%; margin-top: 6pt">If to Buyer:
</DIV>

<DIV align="left" style="font-size: 10pt; margin-left: 9%; margin-top: 6pt">Olympic Steel, Inc.<BR>
5096 Richmond Rd.<BR>
Bedford Hts, OH 44146<BR>
Attention: Michael D. Siegal<BR>
Facsimile No.: 216-292-3974
</DIV>

<DIV align="left" style="font-size: 10pt; margin-left: 9%; margin-top: 6pt">with a copy each to:
</DIV>

<DIV align="left" style="font-size: 10pt; margin-left: 9%; margin-top: 6pt">Sonnenschein Nath &#038; Rosenthal LLP<BR>
685 Market Street, 6<SUP style="font-size: 85%; vertical-align: text-top">th</SUP> Floor<BR>
San Francisco, CA 94105<BR>
Attention: Marc Morgenstern, Esq.<BR>
Facsimile No.: 415-543-5472
</DIV>


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<DIV align="left" style="font-size: 10pt; margin-left: 9%; margin-top: 6pt">Pepper Hamilton LLP<BR>
3000 Two Logan Square<BR>
Eighteenth and Arch Streets<BR>
Philadelphia, PA 19103-2799<BR>
Attention: Francis Lawall<BR>
Facsimile No.: 215-981-4750
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<B>10.13 </B><U><B>Jurisdiction; Service of Process</B></U><B>. </B>Any action or proceeding seeking to enforce any
provision of, or based on any right arising out of, this Agreement may be brought against any of
the parties in the courts of the State of North Carolina, County of Mecklenburg, or, if it has or
can acquire jurisdiction, in the United States District Court for the Western District of North
Carolina, and each of the parties consents to the jurisdiction of such courts (and of the
appropriate appellate courts) in any such action or proceeding and waives any objection to venue
laid therein. Process in any action or proceeding referred to in the preceding sentence may be
served on any party anywhere in the world.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<B>10.4 </B><U><B>Further Assurances</B></U><B>. </B>The parties agree (a)&nbsp;to furnish upon request to each other such
further information, (b)&nbsp;to execute and deliver to each other such other documents, and (c)&nbsp;to do
such other acts and things, all as the other party may reasonably request for the purpose of
carrying out the intent of this Agreement and the documents referred to in this Agreement.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<B>10.5 </B><U><B>Exclusion Of Administrators&#146; Liability</B></U><B>. </B>Administrators have entered into and signed
this Agreement as agents for or on behalf of Seller and neither they their firm, partners,
employees, advisors, representatives or agents shall incur any personal liability whatsoever in
respect of any of the obligations undertaken by Seller or in respect of any failure on the part of
Seller to observe, perform or comply with any such obligations or under or in relation to any
associated arrangements or negotiations or under any document or assurance made pursuant to this
Agreement. Administrators are party to this Agreement in their personal capacities only for the
purpose of receiving the benefit of the exclusions, limitations, undertakings, covenants and
indemnities in their favor contained herein.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<B>10.6 </B><U><B>Waiver</B></U><B>. </B>The rights and remedies of the parties to this Agreement are cumulative and
not alternative. Neither the failure nor any delay by any party in exercising any right, power, or
privilege under this Agreement or the documents referred to in this Agreement will operate as a
waiver of such right, power, or privilege, and no single or partial exercise of any such right,
power, or privilege will preclude any other or further exercise of such right, power, or privilege
or the exercise of any other right, power, or privilege. To the maximum extent permitted by
applicable law, (a)&nbsp;no claim or right arising out of this Agreement or the documents referred to in
this Agreement can be discharged by one party, in whole or in part, by a waiver or renunciation of
the claim or right unless in writing signed by the other party; (b)&nbsp;no waiver that may be given by
a party will be applicable except in the specific instance for which it is given; and (c)&nbsp;no notice
to or demand on one party will be deemed to be a waiver of any obligation of such party or of the
right of the party giving such notice or demand to take further action without notice or demand as
provided in this Agreement or the documents referred to in this Agreement.
</DIV>

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<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<B>10.7 </B><U><B>Entire Agreement and Modification</B></U><B>. </B>This Agreement supersedes all prior agreements
between the parties with respect to its subject matter and constitutes a complete and exclusive
statement of the terms of the agreement between the parties with respect to its subject matter.
This Agreement may not be amended except by a written agreement executed by the party to be charged
with the amendment.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<B>10.8 </B><U><B>Assignments, Successors, and No Third-party Rights</B></U><B>. </B>Neither party may assign any of
its rights under this Agreement without the prior consent of the other parties. Subject to the
preceding sentence, this Agreement will apply to, be binding in all respects upon, and inure to the
benefit of the successors and permitted assigns of the parties. Nothing expressed or referred to in
this Agreement will be construed to give any Person other than the parties to this Agreement any
legal or equitable right, remedy, or claim under or with respect to this Agreement or any provision
of this Agreement. This Agreement and all of its provisions and conditions are for the sole and
exclusive benefit of the parties to this Agreement and their successors and assigns.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<B>10.9 </B><U><B>Severability</B></U><B>. </B>If any provision of this Agreement is held invalid or unenforceable by
any court of competent jurisdiction, the other provisions of this Agreement will remain in full
force and effect. Any provision of this Agreement held invalid or unenforceable only in part or
degree will remain in full force and effect to the extent not held invalid or unenforceable.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<B>10.10 </B><U><B>Section&nbsp;Headings</B></U><B>. </B>The headings of Sections in this Agreement are provided for
convenience only and will not affect its construction or interpretation. All references to
&#147;Section&#148; or &#147;Sections&#148; refer to the corresponding Section or Sections of this Agreement.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<B>10.11 </B><U><B>Time of Essence</B></U><B>. </B>With regard to all dates and time periods set forth or referred to
in this Agreement, time is of the essence.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<B>10.12 </B><U><B>Governing Law</B></U><B>. </B>This Agreement will be governed by the laws of the State of Delaware
without regard to conflicts of laws principles.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<B>10.13 </B><U><B>Counterparts</B></U><B>. </B>This Agreement may be executed in one or more counterparts, each of
which will be deemed to be an original copy of this Agreement and all of which, when taken
together, will be deemed to constitute one and the same agreement.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<B>IN WITNESS WHEREOF</B>, the parties have executed and delivered this Agreement as of the
date first written above.
</DIV>
<DIV align="center">
<TABLE style="font-size: 10pt" cellspacing="0" border="0" cellpadding="0" width="100%">
<!-- Begin Table Head -->
<TR valign="bottom">
    <TD width="48%">&nbsp;</TD>
    <TD width="2%">&nbsp;</TD>
    <TD width="2%">&nbsp;</TD>
    <TD width="2%">&nbsp;</TD>
    <TD width="30%">&nbsp;</TD>
    <TD width="2%">&nbsp;</TD>
    <TD width="16%">&nbsp;</TD>
</TR>
<!-- End Table Head -->
<!-- Begin Table Body -->
<TR valign="bottom">
    <TD valign="top"><B>BUYER:</B></TD>
    <TD>&nbsp;</TD>
    <TD colspan="3" valign="top" align="left"><B>OLY STEEL NC, INC.</B></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
</TR>
<TR valign="bottom"><!-- Blank Space -->
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
</TR>

<TR valign="bottom">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">&nbsp;
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">By:</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">/s/ Richard T. Marabito&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
</TR>


<TR style="font-size: 1px">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">&nbsp;
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top" style="border-top: 1px solid #000000">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
</TR>



<TR valign="bottom">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">&nbsp;
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">Name:</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">Richard T. Marabito&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;
</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top"><DIV style="font-size: 1pt; border-top: 1px solid #000000">&nbsp;</DIV>
</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
</TR>

<TR style="font-size: 1px">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">&nbsp;
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top" style="border-top: 1px solid #000000">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
</TR>

<TR valign="bottom">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">&nbsp;
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">Title:</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">President &amp; Treasurer&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;
</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top"><DIV style="font-size: 1pt; border-top: 1px solid #000000">&nbsp;</DIV>
</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
</TR>

<TR style="font-size: 1px">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">&nbsp;
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top" style="border-top: 1px solid #000000">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
</TR>
<!-- End Table Body -->
</TABLE>
</DIV>

<P align="center" style="font-size: 10pt"> 46 of 77
</DIV>

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<DIV style="font-family: 'Times New Roman',Times,serif">

<DIV align="center">
<TABLE style="font-size: 10pt" cellspacing="0" border="0" cellpadding="0" width="100%">
<!-- Begin Table Head -->
<TR valign="bottom">
    <TD width="48%">&nbsp;</TD>
    <TD width="2%">&nbsp;</TD>
    <TD width="2%">&nbsp;</TD>
    <TD width="2%">&nbsp;</TD>
    <TD width="30%">&nbsp;</TD>
    <TD width="2%">&nbsp;</TD>
    <TD width="16%">&nbsp;</TD>
</TR>
<!-- End Table Head -->
<!-- Begin Table Body -->
<TR valign="bottom">
    <TD valign="top"><B>SELLER:</B></TD>
    <TD>&nbsp;</TD>
    <TD colspan="3" valign="top" align="left"><B>GOLDSTAR HOLDINGS LIMITED</B></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="5" valign="top" align="left">Signed on behalf of Seller by one of the</TD>
</TR>
<TR valign="bottom">
    <TD valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="5" valign="top" align="left">Administrators as Seller&#146;s agent without personal</TD>
</TR>
<TR valign="bottom">
    <TD valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="3" valign="top" align="left">liability</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
</TR>
<TR valign="bottom"><!-- Blank Space -->
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">&nbsp;
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">By:</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">/s/ David K. Duggins&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
</TR>

<TR valign="bottom">
    <TD valign="top"></TD>
    <TD></TD>
    <TD align="left" valign="top">
</TD>
    <TD></TD>
    <TD align="left" valign="top"><DIV style="font-size: 1pt; border-top: 1px solid #000000">&nbsp;</DIV>
</TD>
    <TD></TD>
    <TD align="left" valign="top"></TD>
</TR>


<TR valign="bottom">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">&nbsp;
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">Name:
</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">David K. Duggins
</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
</TR>


<TR valign="bottom"><!-- Blank Space -->
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD valign="top"><B>ADMINISTRATORS:</B></TD>
    <TD>&nbsp;</TD>
    <TD colspan="5" valign="top" align="left">Signed by one of the Administrators on behalf of</TD>
</TR>
<TR valign="bottom">
    <TD valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="3" valign="top" align="left">both of them</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
</TR>
<TR valign="bottom"><!-- Blank Space -->
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">&nbsp;
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">By:</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">/s/ David K. Duggins&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
</TR>

<TR valign="bottom">
    <TD valign="top"></TD>
    <TD></TD>
    <TD align="left" valign="top">
</TD>
    <TD></TD>
    <TD align="left" valign="top"><DIV style="font-size: 1pt; border-top: 1px solid #000000">&nbsp;</DIV>
</TD>
    <TD></TD>
    <TD align="left" valign="top"></TD>
</TR>


<TR valign="bottom">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">&nbsp;
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">Name:
</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">David K. Duggins
</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
</TR>


<!-- End Table Body -->
</TABLE>
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The undersigned hereby agrees to the provision of Section&nbsp;8.3, guarantees all obligations of
Buyer as set forth in the Agreement and further shall be deemed to be the primary obligor hereunder
to the extent of nonperformance and with respect to the particular obligation(s) of Buyer.
</DIV>
<DIV align="center">
<TABLE style="font-size: 10pt" cellspacing="0" border="0" cellpadding="0" width="100%">
<!-- Begin Table Head -->
<TR valign="bottom">
    <TD width="48%">&nbsp;</TD>
    <TD width="2%">&nbsp;</TD>
    <TD width="2%">&nbsp;</TD>
    <TD width="2%">&nbsp;</TD>
    <TD width="30%">&nbsp;</TD>
    <TD width="2%">&nbsp;</TD>
    <TD width="16%">&nbsp;</TD>
</TR>
<!-- End Table Head -->
<!-- Begin Table Body -->
<TR valign="bottom">
    <TD valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="3" valign="top" align="left">OLYMPIC STEEL, INC.</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
</TR>
<TR valign="bottom"><!-- Blank Space -->
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
</TR>

<TR valign="bottom">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">&nbsp;
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">By:</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">/s/ Richard T. Marabito&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
</TR>


<TR style="font-size: 1px">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">&nbsp;
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top" style="border-top: 1px solid #000000">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
</TR>



<TR valign="bottom">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">&nbsp;
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">Name:</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">Richard T. Marabito&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;
</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top"><DIV style="font-size: 1pt; border-top: 1px solid #000000">&nbsp;</DIV>
</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
</TR>

<TR style="font-size: 1px">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">&nbsp;
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top" style="border-top: 1px solid #000000">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
</TR>

<TR valign="bottom">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">&nbsp;
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">Title:</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">CFO&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;
</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top"><DIV style="font-size: 1pt; border-top: 1px solid #000000">&nbsp;</DIV>
</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
</TR>

<TR style="font-size: 1px">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">&nbsp;
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top" style="border-top: 1px solid #000000">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
</TR>
<!-- End Table Body -->
</TABLE>
</DIV>

<P align="center" style="font-size: 10pt"> 47 of 77
</DIV>

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</TEXT>
</DOCUMENT>
<DOCUMENT>
<TYPE>EX-10.12
<SEQUENCE>3
<FILENAME>l21383aexv10w12.htm
<DESCRIPTION>EX-10.12
<TEXT>
<HTML>
<HEAD>
<TITLE>EX-10.12</TITLE>
</HEAD>
<BODY bgcolor="#FFFFFF">
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<H5 align="left" style="page-break-before:always">&nbsp;</H5><P>

<DIV style="font-family: 'Times New Roman',Times,serif">


<DIV align="right" style="font-size: 10pt; margin-top: 12pt"><B>EXHIBIT 10.12</B>
</DIV>


<DIV align="center" style="font-size: 10pt; margin-top: 18pt"><U><B>EMPLOYMENT AGREEMENT</B></U>
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;This Employment Agreement (this &#147;Agreement&#148;) is made and entered into effective as of
August 8, 2006, by and between OLYMPIC STEEL, INC., an Ohio corporation (the &#147;Company&#148;), and
MICHAEL D. SIEGAL (&#147;Executive&#148;).
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;WHEREAS, the Company desires to continue to employ Executive in the position of Chairman and
Chief Executive Officer of the Company, and Executive desires to accept such employment, on the
terms and subject to the conditions hereinafter set forth; and
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;WHEREAS, Executive has valuable knowledge and experience relating to the Company&#146;s businesses
and the industries in which it operates, and the parties desire to provide for his services to the
Company on the terms set forth herein.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;NOW, THEREFORE, in consideration of the respective covenants and agreements of the parties
herein contained, the Company and Executive agree as follows:
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;1.&nbsp;<U>Term of Employment</U>. The Company hereby agrees to continue to employ Executive, and
Executive hereby agrees to continue to serve the Company, on the terms and conditions set forth
herein for the period commencing as of the date hereof and expiring on January&nbsp;1, 2010 (the
&#147;Employment Period&#148;). The Employment Period shall automatically be renewed on January&nbsp;1, 2010 for a
period of an additional three years from such date unless, not later than July&nbsp;1, 2009, the Company
or Executive has given notice to the other party that it or he, as the case may be, does not wish
to have the Employment Period extended. Such extension shall be included in the defined term
Employment Period. In any case, the Employment Period may be terminated earlier under the terms
and conditions set forth herein.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;2.&nbsp;<U>Position and Duties</U>. Executive is the Chief Executive Officer of the Company and
reports to the Board of Directors of the Company, and is presently the Chairman of the Board of
Directors. In this position, Executive has the responsibility for the general management and
operation of the Company and the performance of such other executive services and duties as shall
be reasonably assigned to and requested of him by the Board of Directors. Executive shall serve in
any position and office with the Company as the Board of Directors of the Company may determine
from time to time. However, Executive shall always remain as Chief Executive Officer and at the
level of a senior executive officer of the Company. During the Employment Period, Executive shall
devote substantially all his working time and efforts to the business and affairs of the Company
and serve the Company in its business and perform his duties to the best of his ability.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;3.&nbsp;<U>Compensation</U>.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a)&nbsp;<U>Salary</U>. For the period commencing on the effective date of this agreement through
December&nbsp;31, 2006, Executive shall receive a base salary at the rate of Five Hundred Seventy Five
Thousand Dollars ($575,000) per year, in an amount prorated by multiplying said
</DIV>

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</DIV>

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<DIV style="font-family: 'Times New Roman',Times,serif">
<DIV align="left" style="font-size: 10pt; margin-top: 6pt">amount by a fraction where the numerator equals the number of complete months in such partial
year and the denominator equals twelve. For the period commencing on January&nbsp;1, 2007 through the
remainder of the Employment Period, Executive shall receive a base salary at the rate of Six
Hundred Five Thousand Dollars ($605,000.00) per year (the &#147;Base Salary&#148;). Executive&#146;s salary shall
be reviewed annually, although any salary adjustments shall be at the sole discretion of the Board
of Directors of the Company or any duly authorized Committee thereof, including but not limited to
the Compensation Committee. Notwithstanding the foregoing, in no event shall Executive&#146;s salary be
adjusted below the Base Salary Amount. Such salary shall be payable in accordance with the normal
policies of the Company for payment of its senior executives.
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b)&nbsp;<U>Benefits Generally</U>. During the Employment Period, Executive shall be eligible to
participate in all welfare and benefit plans which are currently maintained or established, or
which may be established and maintained in the future, by the Company for its senior executives
generally (subject, however, to all of the terms and conditions thereof, including any eligibility
requirements therefor), including but not limited to: (i)&nbsp;group life insurance coverage; (ii)
hospitalization or disability insurance coverage, (iii)&nbsp;retirement plans, including but not limited
to any supplemental executive retirement plan, (iv)&nbsp;long term incentive and equity-based plans; and
(v)&nbsp;the reimbursement plan for financial services and tax planning. For purposes of this
Agreement, no benefit shall be considered to have accrued as of any date under any welfare or
benefit plan referred to in this Section 3(b) if such benefit remains subject to a discretionary
determination under the terms of such plan as of such date.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(c)&nbsp;<U>Expenses</U>. The Company shall reimburse Executive for reasonable direct expenses
incurred by him on behalf of the Company in the performance of his duties during the Employment
Period. Executive shall furnish the Company with such documentation as is requested by the Company
in order for it to comply with the Code and regulations thereunder in connection with the proper
deduction of such expenses.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(d)&nbsp;<U>Bonus Plan</U>. During the Employment Period, Executive shall be eligible for a
performance bonus under the Senior Management Compensation Program Plan of 2006, as such plan may
be amended by the Board from time to time, or such other bonus plan that replaces such plan (the
&#147;Bonus Plan&#148;), in such amount and based on the Company&#146;s performance against specific target levels
as is determined by the Board of Directors of the Company or any duly authorized Committee thereof,
including but not limited to the Compensation Committee of the Board.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;If the Company is required to restate its annual financial statements for any fiscal year and
such restatement would reduce the bonus payment for the period covered by such financial
restatement by more than 5%, Executive shall reimburse the Company for the difference between the
bonus actually paid and the bonus payable under the restated financial statement. Executive shall
make such reimbursement not later than sixty (60)&nbsp;days after the restated financial statements have
been made final and disclosed to the public.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(e)&nbsp;<U>Long Term Incentive Plan</U>. During the Employment Period, Executive shall be
eligible to participate in any Long Term Incentive plan (&#147;LTI&#148;), as any such plan may be created or
amended by the Board from time to time.
</DIV>

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<DIV style="font-family: 'Times New Roman',Times,serif">

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;4. <U>Termination of Employment.</U>
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a) <U>Events of Termination</U>. The Employment Period shall terminate immediately upon the
occurrence of any of the following events:
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(i)&nbsp;the death of Executive;
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(ii)&nbsp;upon receipt by Executive of the Company&#146;s written notice of intent to terminate due to
Disability (the &#147;Disability Effective Date&#148;);
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(iii)&nbsp;voluntary termination by Executive of his employment with the Company;
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(iv)&nbsp;upon receipt by the Executive of the Company&#146;s written notice that specifies the reasons
for termination for Good Cause; or
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(v)&nbsp;thirty (30)&nbsp;days after Executive&#146;s receipt of the Company&#146;s written notice terminating
Executive at any time other than for Good Cause, Death or Disability, for any reason or no reason.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;For purposes of Section&nbsp;4, expiration of the Employment Period upon a notice of the Company
under Section&nbsp;1 that it does not wish to extend the Employment Period shall be deemed a termination
for Good Cause, pursuant to Section&nbsp;4(a)(iv) and expiration of the Employment Period upon a notice
of Executive under Section&nbsp;1 that he does not wish to extend the Employment Period shall be deemed
a resignation of Executive pursuant to Section&nbsp;4(a)(iii).
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b)&nbsp;<U>Notice of Termination</U>. Any termination by the Company for Good Cause (except for
the failure by the Company to extend the Employment Period beyond January&nbsp;1, 2010<B>) </B>shall be
communicated by Notice of Termination to the other party hereto given in accordance with Section&nbsp;8.
For purposes of this Agreement, a &#147;Notice of Termination&#148; means a written notice which (i)
indicates the specific termination provision in this Agreement relied upon, (ii)&nbsp;sets forth in
reasonable detail the facts and circumstances claimed to provide a basis for termination of
Executive&#146;s employment under the provision so indicated and (iii)&nbsp;specifies the Termination Date
(as defined below). The failure or omission by the Company to set forth in the Notice of
Termination any fact or circumstance which contributes to a showing of Good Cause shall not waive
any right of the Company hereunder or preclude the Company from asserting such fact or circumstance
in enforcing the Company&#146;s rights hereunder.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(c)&nbsp;<U>Termination Date</U>. &#147;Termination Date&#148; means (i)&nbsp;if Executive&#146;s employment is
terminated by the Company for Good Cause, the date of termination of employment that is set forth
in the Notice of Termination (which shall not be earlier than the date on which such notice is
given), (ii)&nbsp;if Executive&#146;s employment is terminated by the Company other than for Good Cause or
Disability, or Executive resigns, the date on which the Company or Executive notifies Executive or
the Company, respectively, of such termination, or such later date as may be specified by the
terminating party in such notice, and (iii)&nbsp;if Executive&#146;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.
</DIV>

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<DIV style="font-family: 'Times New Roman',Times,serif">

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;5.&nbsp;<U>Obligations of the Company upon Termination</U>.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a)&nbsp;<U>Discharge Other than for Good Cause or Disability</U>. Executive shall be entitled to
the severance benefits specified in this Section 5(a) if, during the Employment Period, the Company
terminates Executive&#146;s employment for any reason other than for Good Cause or Disability. In any
such case:
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(i) <U>Accrued Benefits.</U> Executive shall be entitled to any:
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(A)&nbsp;incremental Base Salary at the rate then in effect otherwise payable through the
Termination Date to the extent not previously paid, which shall be paid in a lump sum in cash
within thirty (30)&nbsp;calendar days from the Termination Date;
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(B)&nbsp;Annual Bonus which has been earned and accrued but remains unpaid which shall be paid in
the same form and at the same time as such Annual Bonus, if any, is paid to other senior executive
officers as further provided under Section&nbsp;5(a)(ii)(B);
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(C)&nbsp;benefits provided for in Section 3(b) which have accrued up to and including the
Termination Date, subject to the terms and conditions of the welfare and benefit plans referenced
in Section&nbsp;3(b); and
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(D)&nbsp;reimbursement of reasonable expenses incurred up to and including the Termination Date
under the terms of Section&nbsp;3(c).
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(ii) <U>Continuation of Benefits.</U> Provided Executive has executed and delivered to the
Company a Release and Waiver of Claims and Executive refrains from revoking, rescinding or
otherwise repudiating such Release and Waiver of Claims for all applicable periods during which
Executive may revoke it, during the period ending on the earlier of the Termination Date of this
Agreement, a breach by Executive of any obligation set forth in Section&nbsp;6, or twenty-four (24)
months following the Company&#146;s termination under Section&nbsp;5(a), Executive shall be entitled to
continue to receive:
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(A)&nbsp;an amount equal to Executive&#146;s Base Salary then in effect, which shall be paid in equal
monthly or more frequent installments, as determined by the Company commencing thirty (30)&nbsp;days
after the Termination Date;
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(B)&nbsp;an Annual Bonus, if any, determined as follows:
</DIV>



<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 6%">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(i) if the other senior executive officers are not entitled to an Annual Bonus payment
with respect to the fiscal year of the Company, then Executive shall not be paid an Annual
Bonus for such year; or
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 6%">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(ii) if the other senior executive officers are entitled to an Annual Bonus payment
with respect to the fiscal year of the Company, then, at the discretion of the Compensation
Committee, the Executive may be paid a portion of the Annual Bonus that otherwise would have
been payable to Executive had he remained employed throughout such year, in the same form
and on the same date(s) as payment is made to the other senior executive officers, in an
amount prorated by multiplying said amount by a
</DIV>

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<DIV style="font-family: 'Times New Roman',Times,serif">


<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 6%">fraction where the numerator equals the number of complete months in such partial year
during which Executive was employed and the denominator equals twelve; and
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(C)&nbsp;any benefits provided for in Section 3(b) under substantially the same terms and
conditions, including the cost, if any, to Executive, subject to generally applicable changes to
the level, and cost, of coverage that may be made with respect to senior executive officers,
provided that such continuation shall not be required hereunder to the extent that Executive is
entitled, absent any individual waivers or other arrangements, to receive during such period the
same type of coverage from another employer or recipient of Executive&#146;s services.
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b)&nbsp;<U>Death or Disability</U>.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(i) <U>Accrued Benefits.</U> Executive or his estate or beneficiaries, hereunder, as
appropriate, in the event of the death of the Executive, shall be entitled to the severance
benefits specified in this Section 5(b) if, during the Employment Period, Executive&#146;s employment
with the Company terminates as a result of Executive&#146;s death or Disability under Section&nbsp;4(a)(i) or
4(a)(ii). In either such case, Executive shall be entitled to any (i)&nbsp;incremental Base Salary,
(ii)&nbsp;Annual Bonus which has been earned and accrued but remains unpaid which shall be paid in the
same form and at the same time as such Annual Bonus, if any, is paid to other senior executive
officers, (iii)&nbsp;benefits provided for in Section 3(b) which have accrued up to and including the
Termination Date, subject to the terms and conditions of the welfare and benefit plans referenced
in Section&nbsp;3(b), and (iv)&nbsp;reimbursement of reasonable expenses incurred up to and including the
Termination Date under the terms of Section&nbsp;3(c). After the Termination Date, Executive shall no
longer be eligible to participate in any of the welfare or benefit plans referenced in Section
3(b), except to the extent and on the terms that participation in any such plan by former employees
is expressly provided for by the terms of such plan.
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(ii) <U>Continuation of Benefits.</U> In addition to the Accrued Benefits payable under
Section&nbsp;5(b)(i), Executive or his estate or beneficiaries, hereunder, as appropriate, in the event
of the death of the Executive, shall be entitled to twelve (12)&nbsp;month&#146;s Base Salary payable in
equal monthly or more frequent installments, as determined by the Company. Further, Executive&#146;s
surviving spouse, if any, and minor children shall be eligible to continue to participate in the
Company&#146;s health insurance programs, at the expense of the Company, for twelve (12)&nbsp;months after
the death or Disability of Executive. After such one year period, Executive&#146;s dependents shall be
entitled to participate in any insurance program of the Company to the extent required by federal
or state law. No provision of this Agreement shall limit any of Executive&#146;s (or his
beneficiaries&#146;) rights under any insurance, pension or other benefit programs of the Company for
which Executive shall be eligible at the time of such death or disability.
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(c)&nbsp;<U>Discharge for Good Cause or Resignation</U>. If Executive&#146;s employment with the
Company is terminated by Executive on a voluntary basis under Section&nbsp;4(a)(iii) or is terminated by
the Company for Good Cause under Section&nbsp;4(a)(iv), Executive shall be entitled to (i)&nbsp;payment of
incremental Base Salary only through the Termination Date and thereafter such salary shall end and
cease to be payable, (ii)&nbsp;at the discretion of the Compensation Committee, payment of any Annual
Bonus which has been earned and accrued but remains unpaid which shall be paid in the same form and
at the same time as such Annual Bonus, if any, is paid to other senior executive officers, but in
no event shall any portion of any subsequent Annual Bonus be
</DIV>

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</DIV>

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<DIV style="font-family: 'Times New Roman',Times,serif">
<DIV align="left" style="font-size: 10pt; margin-top: 6pt">deemed to have been earned and accrued, (iii)&nbsp;receive any benefits provided for in Section 3(b)
which have accrued up to and including the Termination Date, subject to the terms and conditions of
the welfare and benefit plans referenced in Section&nbsp;3(b), and (iv)&nbsp;reimbursement of reasonable
expenses incurred up to and including the Termination Date under the terms of Section&nbsp;3(c). After
the Termination Date, Executive shall no longer be eligible to participate in any of the welfare or
benefit plans referenced in Section&nbsp;3(b), except to the extent and on the terms that participation
in any such plan by former employees is expressly provided for by the terms of such plan.
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(d)&nbsp;<U>No Further Obligations</U>. Except as expressly set forth in this Section&nbsp;5,
Executive shall not be entitled to any other payments or benefits under this Agreement as a result
of the termination of Executive&#146;s employment.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;6.&nbsp;<U>Restrictive Covenants</U>.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a)&nbsp;<U>Non-Competition</U>. While employed by the Company and for a period of twenty-four
(24)&nbsp;months after ceasing to be so employed (the &#147;Restricted Period&#148;) for whatever reason,
Executive shall not, directly or indirectly, own, manage, operate, control or participate in the
ownership, management, operation or control of, or be connected as an officer, partner, director,
consultant or other position, or have any financial interest in with (i)&nbsp;any steel service center
or distributor conducting business within those portions of the United States wherein the Company
is conducting business on the Termination Date, or (ii)&nbsp;a business engaged in direct competition
with any other significant business carried on by the Company on the Termination Date. In no event
shall ownership of less than five (5)&nbsp;percent of the equity of a corporation, limited liability
company or other business entity, standing alone, constitute a violation hereof.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b)&nbsp;<U>Non-Solicitation</U>. During the Restrictive Period, Executive shall not directly,
indirectly or through an affiliate: (i)&nbsp;solicit, induce, divert, or take away or attempt to
solicit, induce, divert or take away any customer, distributor, or supplier of the Company; (ii)
solicit, induce, or hire or attempt to solicit, induce, or hire any employee of the Company or any
individual who was an employee of the Company on the Termination Date and who has left the
employment of the Company after the Termination Date within one year of the termination of such
employee&#146;s employment with the Company, or (iii)&nbsp;in any way directly or indirectly interfere with
such relationships.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(c)&nbsp;<U>Confidentiality</U>.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(i)&nbsp;Executive shall keep in strict confidence, and shall not, directly or indirectly, at any
time while employed by the Company or after ceasing to be so employed, disclose, furnish, publish,
disseminate, make available or, except in the course of performing his duties of employment
hereunder, use for his benefit or the benefit of others any Confidential Information. Executive
specifically acknowledges that all Confidential Information, in whatever media or form maintained,
and whether compiled by the Company or Executive, (1)&nbsp;derives independent economic value from not
being readily known to or ascertainable by proper means by others who can obtain economic value
from its disclosure or use, (2)&nbsp;that reasonable efforts have been made by the Company to maintain
the secrecy of such information, (3)&nbsp;that such information is the sole property of the Company, and
(4)&nbsp;that any disclosure or use of such
</DIV>


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</DIV>

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<DIV style="font-family: 'Times New Roman',Times,serif">



<DIV align="left" style="font-size: 10pt; margin-top: 6pt">information by Executive while employed by the Company (except in the course of performing his
duties and obligations hereunder for the Company) or after ceasing to be so employed shall
constitute a misappropriation of the Company&#146;s trade secrets.
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(ii)&nbsp;Notwithstanding the provisions of Section&nbsp;6(c)(i), Executive may disclose the
Confidential Information to anyone outside of the Company with the Company&#146;s express written
consent, or Confidential information that: (i)&nbsp;is at the time of receipt or thereafter becomes
publicly known through no wrongful act of Executive; or (ii)&nbsp;is received from a third party not
under an obligation to keep such information confidential and without breach of this Agreement.
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(iii)&nbsp;In addition to the above provisions of Section&nbsp;6(c), all memoranda, notes, lists,
records and other documents (and all copies thereof) made or compiled by Executive or made
available to Executive concerning the business of the Company will be delivered to the Company at
any time on request.
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;7.&nbsp;<U>Binding Agreement; Successors</U>. This Agreement shall inure to the benefit of and be
binding upon Executive&#146;s personal or legal representatives, executors, administrators, successors,
heirs, distributees, devisees and legatees. If Executive should die while any amounts would still
be payable to him hereunder, all such amounts, unless otherwise provided herein, shall be paid in
accordance with the terms of this Agreement to Executive&#146;s spouse, or if is spouse does not survive
him, to Executive&#146;s estate. This Agreement shall inure to the benefit of and be binding upon the
successors and assigns of the Company, including, without limitation, any person acquiring directly
or indirectly all or substantially all of the assets of the Company, whether by merger,
consolidation, sale or otherwise (and such successor shall thereafter be deemed the &#147;Company&#148; for
the purposes of this Agreement). The Company shall require any such successor to assume and agree
to perform this Agreement.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;8.&nbsp;<U>Notice</U>. All notices, requests and other communications under this Agreement shall
be in writing and shall be deemed to have been duly given (a)&nbsp;when hand delivered, (b)&nbsp;one business
day after being sent by recognized overnight delivery service, or (c)&nbsp;three business days after
being sent by registered or certified mail, return receipt requested, postage prepaid, and in each
case addressed as follows (or addressed as otherwise specified by notice under this Section):
</DIV>

<DIV style="margin-top: 6pt">
<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt">

<TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="6%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left">(i)</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>If to the Company, to:</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="6%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>Olympic Steel, Inc.<br>
5096 Richmond Road<br>
Bedford Heights, Ohio 44146</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="6%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>With a copy to:</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="6%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>Olympic Steel, Inc.<br>
5096 Richmond Road<br>
Bedford Heights, Ohio 44146<br>
Attention: Chairman, Compensation Committee</TD>
</TR>

</TABLE>
</DIV>
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</DIV>

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<DIV style="font-family: 'Times New Roman',Times,serif">


<DIV style="margin-top: 6pt"><TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt">



</TABLE>
</DIV>

<DIV style="margin-top: 6pt">
<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt">

<TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="6%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left">(ii)</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>If to Executive, to:</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="6%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>Michael D. Siegal<br>
921 West Hill Drive<br>
Gates Mills, Ohio 44040</TD>
</TR>

</TABLE>
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;9.&nbsp;<U>Withholding</U>. The Company may withhold from any amounts payable under or in
connection with this Agreement all federal, state, local and other taxes as may be required to be
withheld by the Company under applicable law or governmental regulation or ruling.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;10.&nbsp;<U>Amendments; Waivers</U>. No provision of this Agreement may be modified, waived or
discharged unless such waiver, modification or discharge is agreed to in writing, and is signed by
Executive and an officer of the Company specifically designated by the Board of the Company or its
Compensation Committee to execute such writing. No delay in exercising any right, power or
privilege hereunder shall operate as a waiver thereof. No waiver by either party hereto at any
time of any breach by the other party hereto of, or compliance with, any condition or provision of
this Agreement to be performed by such other party shall be deemed a waiver of similar or
dissimilar provisions or conditions at the same or at any prior or subsequent time.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;11.&nbsp;<U>Governing Law</U>. The validity, interpretation, construction and performance of this
Agreement shall be governed by the laws of the State of Ohio, without giving effect to the conflict
of law principles of such State.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;12.&nbsp;<U>Equitable Relief</U>. Executive and the Company acknowledge and agree that the
covenants contained in Section&nbsp;6 are of a special nature and that any breach, violation or evasion
by Executive of the terms of Section&nbsp;6 will result in immediate and irreparable injury and harm to
the Company, for which there is no adequate remedy at law, and will cause damage to the Company in
amounts difficult to ascertain. Accordingly, the Company shall be entitled to the remedy of
injunction, as well as to all other legal or equitable remedies to which the Company may be
entitled (including, without limitation, the right to seek monetary damages), for any breach,
violation or evasion by Executive of the terms of Section&nbsp;6.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;13.&nbsp;<U>Validity</U>. The invalidity or unenforceability of any provision or provisions of
this Agreement shall not affect the validity or enforceability of any other provision of this
Agreement, which shall remain in full force and effect. In the event that any provision of Section
6 is found by a court of competent jurisdiction to be invalid or unenforceable as against public
policy, such court shall exercise its discretion in reforming such provision to the end that
Executive shall be subject to such restrictions and obligations as are reasonable under the
circumstances and enforceable by the Company.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;14.&nbsp;<U>Counterparts</U>. This Agreement may be executed in one or more counterparts, each of
which shall be deemed to be an original but all of which together shall constitute one and the same
instrument.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;15.&nbsp;<U>Headings; Definitions</U>. The headings contained herein are for reference purposes
only and shall not in any way affect the meaning or interpretation of this Agreement. Certain
capitalized terms used in this Agreement are defined on <U>Schedule&nbsp;A</U> attached hereto.
</DIV>

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</DIV>

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<DIV style="font-family: 'Times New Roman',Times,serif">

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;16.&nbsp;<U>No Assignment</U>. This Agreement may not be assigned by either party without the
prior written consent of the other party, except as provided in Section&nbsp;7.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;17.&nbsp;<U>Entire Agreement; No Other Arrangements</U>. This Agreement contains the entire
agreement between the parties with respect to the employment of Executive and supersedes any and
all other agreements, either oral or in writing, with respect to the employment of Executive, with
the exception of the Management Retention Agreement entered into between the Company and Executive
on or about April&nbsp;20, 2000 which shall remain in full force and effect. In the event of any
conflict between the Agreement and the Management Retention Agreement, the terms of the Management
Retention Agreement shall prevail. Executive acknowledges that, in executing this Agreement, he
has not relied on any representations not set forth in this Agreement. Executive represents that
his employment by the Company will not violate any other agreement by which Executive is bound.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;IN WITNESS WHEREOF, the parties have executed this Agreement as of the date first above
written.
</DIV>
<DIV align="center">
<TABLE style="font-size: 10pt" cellspacing="0" border="0" cellpadding="0" width="90%">
<!-- Begin Table Head -->
<TR valign="bottom">
    <TD width="48%">&nbsp;</TD>
    <TD width="2%">&nbsp;</TD>
    <TD width="2%">&nbsp;</TD>
    <TD width="2%">&nbsp;</TD>
    <TD width="30%">&nbsp;</TD>
    <TD width="2%">&nbsp;</TD>
    <TD width="16%">&nbsp;</TD>
</TR>
<!-- End Table Head -->
<!-- Begin Table Body -->
<TR valign="bottom">
    <TD valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="3" valign="top" align="left">OLYMPIC STEEL, INC.</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
</TR>
<TR valign="bottom"><!-- Blank Space -->
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">&nbsp;
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">By:</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">/s/ Richard T. Marabito</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD valign="top"></TD>
    <TD></TD>
    <TD align="left" valign="top">
</TD>
    <TD></TD>
    <TD align="left" valign="top"><DIV style="font-size: 1pt; border-top: 1px solid #000000"></DIV>
</TD>
    <TD></TD>
    <TD align="left" valign="top"></TD>
</TR>

<TR valign="bottom">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">&nbsp;
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">Name:
</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">Richard T. Marabito
</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
</TR>

<TR valign="bottom">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">&nbsp;
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">Title:</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">Chief Financial Officer</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
</TR>

<TR><TD>&nbsp;</TD></TR>

<TR valign="bottom">
    <TD valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="3" valign="top" align="left">/s/ Michael D. Siegal</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
</TR>
<TR style="font-size: 1px">
    <TD valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="3" valign="top" align="left" style="border-top: 1px solid #000000">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="3" valign="top" align="left">MICHAEL D. SIEGAL</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="3" valign="top" align="left">(&#147;Executive&#148;)</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
</TR>
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</DIV>


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<DIV style="font-family: 'Times New Roman',Times,serif">


<DIV align="center" style="font-size: 10pt; margin-top: 18pt"><U><B>Schedule&nbsp;A</B></U>
</DIV>


<DIV align="Center" style="font-size: 10pt; margin-top: 6pt"><U><B>Certain Definitions</B></U>

</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;As used in this Agreement, the following capitalized terms shall have the following meanings:
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 2%">&#147;<I>Affiliate</I>&#148; of a specified entity means an entity that directly, or indirectly through one
or more intermediaries, controls, or is controlled by, or is under common control with, the
entity specified.
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 2%">&#147;<I>Code</I>&#148; means the Internal Revenue Code of 1986, as amended from time to time.
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 2%">&#147;<I>Confidential Information</I>&#148; means confidential business information of the Company and its
customers and vendors, without limitation as to when or how Executive may have acquired such
information. Such Confidential Information shall include, without limitation, the Company&#146;s
sales figures, profit or loss figures or other information related to the Company&#146;s internal
financial statements, customers, clients, suppliers, vendors and product information,
sources of supply, customer lists or other information, selling and servicing methods and
business techniques, product development plans, sales and distribution information, business
plans and opportunities, or corporate alliances and other information concerning the
Company&#146;s actual or anticipated business or products, or which is received in confidence by
or for the Company from any other person.
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 2%">&#147;<I>Disability</I>&#148; means the inability of Executive for a continuous period of ninety (90)&nbsp;days or
for one hundred and eighty (180)&nbsp;days in the aggregate during any twelve (12)&nbsp;month period
to perform any material portion of the duties of his position hereunder on an active
full-time basis by reason of a disability condition. The Company and Executive acknowledge
and agree that the material duties of Executive&#146;s position are unique and critical to the
Company and that a disability condition that causes Executive to be unable to perform the
essential functions of his position under the circumstances described above will constitute
an undue hardship on the Company. Notwithstanding the foregoing, Executive shall not be
disabled provided that all of the following conditions have been satisfied:
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 3%">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a) after receipt of the Company&#146;s written notice of intent to terminate due to
Disability, Executive shall have the right within ten (10)&nbsp;days to dispute the Company&#146;s
ability to terminate him under this section;
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 3%">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b) within ten (10)&nbsp;days after exercising such right, Executive shall submit to a
physical exam by the Chief of Medicine of any major hospital in the metropolitan Cleveland
area;
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 3%">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(c) such physician shall issue his written statement to the effect that in his opinion,
based upon his diagnosis, Executive is capable of resuming his employment and devoting his
full time and energy in discharging his duties within ten (10)&nbsp;days after the date of such
statement; and
</DIV>

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<DIV style="font-family: 'Times New Roman',Times,serif">


<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 3%">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(d) the Executive returns to work on a full-time basis and devotes his energy in
discharging his duties.
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 2%">&#147;<I>Exchange Act</I>&#148; means the Securities Exchange Act of 1934, as amended, and the rules and
regulations thereunder, as such law, rules and regulations may be amended from time to time.
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 2%"><I>&#147;Good Cause&#148; </I>means a reasonable determination by the Board made in good faith (without the
participation of Executive) of the Company, pursuant to the exercise of its business
judgment, that any one of the following events has occurred:
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 3%">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a) Executive is found by the Board to have engaged in (1)&nbsp;willful misconduct, (ii)
willful or gross neglect, (iii)&nbsp;fraud, (iv)&nbsp;misappropriation, or (v)&nbsp;embezzlement in the
performance of his duties hereunder;
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 3%">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b) Executive has materially breached the provisions of Section&nbsp;6 or any other material
provision of this Agreement and fails to cure such breach within ten (10)&nbsp;days following
written notice from the Company specifying such breach which notice from the Company shall
be provided within thirty (30)&nbsp;days after said breach;
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 3%">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(c) Executive is found by the Board to have failed to provide reasonable cooperation
with any federal government or other governmental regulatory investigation, the
reasonableness of such cooperation to be determined by reference to statutory and regulatory
authorities, Federal Sentencing Guidelines, and relevant case law interpretations;
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 3%">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(d) Executive signs or certifies statements required to be made pursuant to
Sarbanes-Oxley Sections&nbsp;302 and 906, or other similar rules or regulations then in effect,
which turn out to be false or inaccurate in any material respect; provided, however, that
the Board has made a reasonable determination in good faith that the Executive knew or
should have known that such statements were false or inaccurate in any material respect;
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 3%">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(e) Executive has been indicted by a state or federal grand jury with respect to 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) and a special committee
of the Board, chaired by an outside director appointed by the Chair of the Audit Committee,
considers the matter, makes a recommendation to the Board to terminate Executive&#146;s
employment for Good Cause, and the Board concurs in that recommendation; or
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 3%">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(f) Executive is found by the Board to have engaged in a material violation of the Code
of Conduct of the Company as then in effect.
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 2%">&#147;<I>Release and Waiver of Claims</I>&#148; means a written release and waiver by Executive, to the
fullest extent allowable under applicable law and in form reasonably acceptable to the
</DIV>

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</DIV>

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<DIV style="font-family: 'Times New Roman',Times,serif">


<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 2%">Company, of all claims, demands, suits, actions, causes of action, damages and rights
against the Company and its Affiliates whatsoever which he may have had on account of the
termination of his employment, including, without limitation, claims of discrimination,
including on the basis of sex, race, age, national origin, religion, or handicapped status,
and any and all claims, demands and causes of action for severance or other termination pay.
Such Release and Waiver of Claims shall not, however, apply to the obligations of the
Company arising under this Agreement, any indemnification agreement between Executive and
the Company, any retirement plans, any stock option agreements, COBRA Continuation Coverage
or rights of indemnification Executive may have under the Company&#146;s Articles of
Incorporation or Code of Regulations (or comparable charter document) or by statute.
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 2%">&#147;<I>Sarbanes-Oxley</I>&#148; means the Sarbanes-Oxley Act of 2002.
</DIV>

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<TYPE>EX-10.13
<SEQUENCE>4
<FILENAME>l21383aexv10w13.htm
<DESCRIPTION>EX-10.13
<TEXT>
<HTML>
<HEAD>
<TITLE>EX-10.13</TITLE>
</HEAD>
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<DIV style="font-family: 'Times New Roman',Times,serif">

<DIV align="right" style="font-size: 10pt; margin-top: 12pt"><B>EXHIBIT 10.13</B>
</DIV>


<DIV align="center" style="font-size: 10pt; margin-top: 18pt"><U><B>EMPLOYMENT AGREEMENT</B></U>
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;This Employment Agreement (this &#147;Agreement&#148;) is made and entered into effective as of
August 8, 2006 by and between OLYMPIC STEEL, INC., an Ohio corporation (the &#147;Company&#148;), and
RICHARD T. MARABITO (&#147;Executive&#148;).
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;WHEREAS, the Company desires to continue to employ Executive in the position of Chief
Financial Officer of the Company, and Executive desires to accept such employment, on the terms and
subject to the conditions hereinafter set forth; and
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;WHEREAS, Executive has valuable knowledge and experience relating to the Company&#146;s businesses
and the industries in which it operates, and the parties desire to provide for his services to the
Company on the terms set forth herein.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;NOW, THEREFORE, in consideration of the respective covenants and agreements of the parties
herein contained, the Company and Executive agree as follows:
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;1.&nbsp;<U>Term of Employment</U>. The Company hereby agrees to continue to employ Executive, and
Executive hereby agrees to continue to serve the Company, on the terms and conditions set forth
herein for the period commencing as of the date hereof and expiring on January&nbsp;1, 2012 (the
&#147;Employment Period&#148;). The Employment Period shall automatically be renewed on January&nbsp;1, 2012 for
a period of an additional three years from such date unless, not later than July&nbsp;1, 2011, the
Company or Executive has given notice to the other party that it or he, as the case may be, does
not wish to have the Employment Period extended. Such extension shall be included in the defined
term Employment Period. In any case, the Employment Period may be terminated earlier under the
terms and conditions set forth herein.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;2.&nbsp;<U>Position and Duties</U>. Executive is the Chief Financial Officer of the Company and
reports to the Chief Executive Officer and the Board of Directors of the Company. In this
position, Executive has the responsibility (a)&nbsp;for directing the Company&#146;s financial, accounting,
treasury and credit functions, (b)&nbsp;for the general management and operation of the Company, and (c)
the performance of such other executive services and duties as shall be reasonably assigned to and
requested of him by, and subject to the direction and supervision of the Chief Executive Officer
and the Board of Directors of the Company. Executive shall serve in any position and office with
the Company as the Board of Directors of the Company (the &#147;Board&#148;) may determine from time to time.
However, Executive shall always remain as Chief Financial Officer and at the level of a senior
executive officer of the Company. During the Employment Period, Executive shall devote
substantially all his working time and efforts to the business and affairs of the Company and serve
the Company in its business and perform his duties to the best of his ability.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;3.&nbsp;<U>Compensation</U>.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a)&nbsp;<U>Salary</U>. For the period commencing on the effective date of this agreement through
December&nbsp;31, 2006, Executive shall receive a base salary at the rate of Three Hundred
</DIV>

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</DIV>

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<DIV style="font-family: 'Times New Roman',Times,serif">
<DIV align="left" style="font-size: 10pt; margin-top: 6pt">Thousand Dollars ($300,000) per year, in an amount prorated by multiplying said amount by a
fraction where the numerator equals the number of complete months in such partial year and the
denominator equals twelve. For the period commencing on January&nbsp;1, 2007 through the remainder of
the Employment Period, Executive shall receive a base salary at the rate of Three Hundred Twenty
Five Thousand Dollars $325,000 per year (the &#147;Base Salary&#148;). Executive&#146;s salary shall be reviewed
annually, although any salary adjustments shall be at the sole discretion of the Board of Directors
of the Company or any duly authorized Committee thereof, including but not limited to the
Compensation Committee. Notwithstanding the foregoing, in no event shall Executive&#146;s salary be
adjusted below the Base Salary Amount. Such salary shall be payable in accordance with the normal
policies of the Company for payment of its senior executives.
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b)&nbsp;<U>Benefits Generally</U>. During the Employment Period, Executive shall be eligible to
participate in all welfare and benefit plans which are currently maintained or established, or
which may be established and maintained in the future, by the Company for its senior executives
generally (subject, however, to all of the terms and conditions thereof, including any eligibility
requirements therefor), including but not limited to: (i)&nbsp;group life insurance coverage; (ii)
hospitalization or disability insurance coverage, (iii)&nbsp;retirement plans, including but not limited
to any supplemental executive retirement plan, (iv)&nbsp;long term incentive and equity-based plans; and
(v)&nbsp;the reimbursement plan for financial services and tax planning. For purposes of this
Agreement, no benefit shall be considered to have accrued as of any date under any welfare or
benefit plan referred to in this Section 3(b) if such benefit remains subject to a discretionary
determination under the terms of such plan as of such date.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(c)&nbsp;<U>Expenses</U>. The Company shall reimburse Executive for reasonable direct expenses
incurred by him on behalf of the Company in the performance of his duties during the Employment
Period. Executive shall furnish the Company with such documentation as is requested by the Company
in order for it to comply with the Code and regulations thereunder in connection with the proper
deduction of such expenses.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(d)&nbsp;<U>Bonus Plan</U>. During the Employment Period, Executive shall be eligible for a
performance bonus under the Senior Management Compensation Program Plan of 2006, as such plan may
be amended by the Board from time to time, or such other bonus plan that replaces such plan (the
&#147;Bonus Plan&#148;), in such amount and based on the Company&#146;s performance against specific target levels
as is determined by the Board of Directors of the Company or any duly authorized Committee thereof,
including but not limited to the Compensation Committee of the Board.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;If the Company is required to restate its annual financial statements for any fiscal year and
such restatement would reduce the bonus payment for the period covered by such financial
restatement by more than 5%, Executive shall reimburse the Company for the difference between the
bonus actually paid and the bonus payable under the restated financial statement. Executive shall
make such reimbursement not later than sixty (60)&nbsp;days after the restated financial statements have
been made final and disclosed to the public.
</DIV>

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<DIV style="font-family: 'Times New Roman',Times,serif">

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(e)&nbsp;<U>Long Term Incentive Plan</U>. During the Employment Period, Executive shall be
eligible to participate in any Long Term Incentive plan (&#147;LTI&#148;), as any such plan may be created or
amended by the Board from time to time.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;4. <U>Termination of Employment.</U>
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a) <U>Events of Termination</U>. The Employment Period shall terminate immediately upon the
occurrence of any of the following events:
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(i)&nbsp;the death of Executive;
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(ii)&nbsp;upon receipt by Executive of the Company&#146;s written notice of intent to terminate due to
Disability (the &#147;Disability Effective Date&#148;);
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(iii)&nbsp;voluntary termination by Executive of his employment with the Company;
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(iv)&nbsp;upon receipt by the Executive of the Company&#146;s written notice that specifies the reasons
for termination for Good Cause; or
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(v)&nbsp;thirty (30)&nbsp;days after Executive&#146;s receipt of the Company&#146;s written notice terminating
Executive at any time other than for Good Cause, Death or Disability, for any reason or no reason.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;For purposes of Section&nbsp;4, expiration of the Employment Period upon a notice of the Company
under Section&nbsp;1 that it does not wish to extend the Employment Period shall be deemed a termination
for Good Cause, pursuant to Section&nbsp;4(a)(iv) and expiration of the Employment Period upon a notice
of Executive under Section&nbsp;1 that he does not wish to extend the Employment Period shall be deemed
a resignation of Executive pursuant to Section&nbsp;4(a)(iii).
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b)&nbsp;<U>Notice of Termination</U>. Any termination by the Company for Good Cause (except for
the failure by the Company to extend the Employment Period beyond January&nbsp;1, 2012) shall be
communicated by Notice of Termination to the other party hereto given in accordance with Section&nbsp;8.
For purposes of this Agreement, a &#147;Notice of Termination&#148; means a written notice which (i)
indicates the specific termination provision in this Agreement relied upon, (ii)&nbsp;sets forth in
reasonable detail the facts and circumstances claimed to provide a basis for termination of
Executive&#146;s employment under the provision so indicated and (iii)&nbsp;specifies the Termination Date
(as defined below). The failure or omission by the Company to set forth in the Notice of
Termination any fact or circumstance which contributes to a showing of Good Cause shall not waive
any right of the Company hereunder or preclude the Company from asserting such fact or circumstance
in enforcing the Company&#146;s rights hereunder.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(c)&nbsp;<U>Termination Date</U>. &#147;Termination Date&#148; means (i)&nbsp;if Executive&#146;s employment is
terminated by the Company for Good Cause, the date of termination of employment that is set forth
in the Notice of Termination (which shall not be earlier than the date on which such notice is
given), (ii)&nbsp;if Executive&#146;s employment is terminated by the Company other than for Good Cause or
Disability, or Executive resigns, the date on which the Company or Executive notifies Executive or
the Company, respectively, of such termination, or such later
</DIV>

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<DIV style="font-family: 'Times New Roman',Times,serif">
<DIV align="left" style="font-size: 10pt; margin-top: 6pt">date as may be specified by the terminating party in such notice, and (iii)&nbsp;if Executive&#146;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.
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;5.&nbsp;<U>Obligations of the Company upon Termination</U>.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a) <U>Discharge Other than for Good Cause or Disability</U>. Executive shall be entitled to
the severance benefits specified in this Section 5(a) if, during the Employment Period, the Company
terminates Executive&#146;s employment for any reason other than for Good Cause or Disability. In any
such case:
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(i)&nbsp;<U>Accrued Benefits.</U> Executive shall be entitled to any:
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(A)&nbsp;incremental Base Salary at the rate then in effect otherwise payable through the
Termination Date to the extent not previously paid, which shall be paid in a lump sum in cash
within thirty (30)&nbsp;calendar days from the Termination Date;
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(B)&nbsp;Annual Bonus which has been earned and accrued but remains unpaid which shall be paid in
the same form and at the same time as such Annual Bonus, if any, is paid to other senior executive
officers as further provided under Section&nbsp;5(a)(ii)(B);
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(C)&nbsp;benefits provided for in Section 3(b) which have accrued up to and including the
Termination Date, subject to the terms and conditions of the welfare and benefit plans referenced
in Section&nbsp;3(b); and
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(D)&nbsp;reimbursement of reasonable expenses incurred up to and including the Termination Date
under the terms of Section&nbsp;3(c).
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(ii)&nbsp;<U>Continuation of Benefits.</U> Provided Executive has executed and delivered to the
Company a Release and Waiver of Claims and Executive refrains from revoking, rescinding or
otherwise repudiating such Release and Waiver of Claims for all applicable periods during which
Executive may revoke it, during the period ending on the earlier of the Termination Date of this
Agreement, a breach by Executive of any obligation set forth in Section&nbsp;6, or twenty-four (24)
months following the Company&#146;s termination under Section&nbsp;5(a), Executive shall be entitled to
continue to receive:
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(A)&nbsp;an amount equal to Executive&#146;s Base Salary then in effect, which shall be paid in equal
monthly or more frequent installments, as determined by the Company commencing thirty (30)&nbsp;days
after the Termination Date;
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(B)&nbsp;an Annual Bonus, if any, determined as follows:
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(i)&nbsp;if the other senior executive officers are not entitled to an Annual Bonus payment
with respect to the fiscal year of the Company, then Executive shall not be paid an Annual
Bonus for such year; or
</DIV>

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<DIV style="font-family: 'Times New Roman',Times,serif">

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(ii)&nbsp;if the other senior executive officers are entitled to an Annual Bonus payment
with respect to the fiscal year of the Company, then, at the discretion of the Compensation
Committee, the Executive may be paid a portion of the Annual Bonus that otherwise would have
been payable to Executive had he remained employed throughout such year, in the same form
and on the same date(s) as payment is made to the other senior executive officers, in an
amount prorated by multiplying said amount by a fraction where the numerator equals the
number of complete months in such partial year during which Executive was employed and the
denominator equals twelve; and
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(C)&nbsp;any benefits provided for in Section 3(b) under substantially the same terms and
conditions, including the cost, if any, to Executive, subject to generally applicable changes to
the level, and cost, of coverage that may be made with respect to senior executive officers,
provided that such continuation shall not be required hereunder to the extent that Executive is
entitled, absent any individual waivers or other arrangements, to receive during such period the
same type of coverage from another employer or recipient of Executive&#146;s services.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b) <U>Death or Disability</U>.
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(i)&nbsp;<U>Accrued Benefits.</U> Executive or his estate or beneficiaries, hereunder, as
appropriate, in the event of the death of the Executive, shall be entitled to the severance
benefits specified in this Section 5(b) if, during the Employment Period, Executive&#146;s employment
with the Company terminates as a result of Executive&#146;s death or Disability under Section&nbsp;4(a)(i) or
4(a)(ii). In either such case, Executive shall be entitled to any (i)&nbsp;incremental Base Salary,
(ii)&nbsp;Annual Bonus which has been earned and accrued but remains unpaid which shall be paid in the
same form and at the same time as such Annual Bonus, if any, is paid to other senior executive
officers, (iii)&nbsp;benefits provided for in Section 3(b) which have accrued up to and including the
Termination Date, subject to the terms and conditions of the welfare and benefit plans referenced
in Section&nbsp;3(b), and (iv)&nbsp;reimbursement of reasonable expenses incurred up to and including the
Termination Date under the terms of Section&nbsp;3(c). After the Termination Date, Executive shall no
longer be eligible to participate in any of the welfare or benefit plans referenced in Section
3(b), except to the extent and on the terms that participation in any such plan by former employees
is expressly provided for by the terms of such plan.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(ii)&nbsp;<U>Continuation of Benefits.</U> In addition to the Accrued Benefits payable under
Section&nbsp;5(b)(i), Executive or his estate or beneficiaries, hereunder, as appropriate, in the event
of the death of the Executive, shall be entitled to twelve (12)&nbsp;month&#146;s Base Salary payable in
equal monthly or more frequent installments, as determined by the Company. Further, Executive&#146;s
surviving spouse, if any, and minor children shall be eligible to continue to participate in the
Company&#146;s health insurance programs, at the expense of the Company, for twelve (12)&nbsp;months after
the death or Disability of Executive. After such one year period, Executive&#146;s dependents shall be
entitled to participate in any insurance program of the Company to the extent required by federal
or state law. No provision of this Agreement shall limit any of Executive&#146;s (or his
beneficiaries&#146;) rights under any insurance, pension or other benefit programs of the Company for
which Executive shall be eligible at the time of such death or disability.
</DIV>

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<DIV style="font-family: 'Times New Roman',Times,serif">

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(c) <U>Discharge for Good Cause or Resignation</U>. If Executive&#146;s employment with the
Company is terminated by Executive on a voluntary basis under Section&nbsp;4(a)(iii) or is terminated by
the Company for Good Cause under Section&nbsp;4(a)(iv), Executive shall be entitled to (i)&nbsp;payment of
incremental Base Salary only through the Termination Date and thereafter such salary shall end and
cease to be payable, (ii)&nbsp;at the discretion of the Compensation Committee, payment of any Annual
Bonus which has been earned and accrued but remains unpaid which shall be paid in the same form and
at the same time as such Annual Bonus, if any, is paid to other senior executive officers, but in
no event shall any portion of any subsequent Annual Bonus be deemed to have been earned and
accrued, (iii)&nbsp;receive any benefits provided for in Section 3(b) which have accrued up to and
including the Termination Date, subject to the terms and conditions of the welfare and benefit
plans referenced in Section&nbsp;3(b), and (iv)&nbsp;reimbursement of reasonable expenses incurred up to and
including the Termination Date under the terms of Section&nbsp;3(c). After the Termination Date,
Executive shall no longer be eligible to participate in any of the welfare or benefit plans
referenced in Section&nbsp;3(b), except to the extent and on the terms that participation in any such
plan by former employees is expressly provided for by the terms of such plan.
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(d) <U>No Further Obligations</U>. Except as expressly set forth in this Section&nbsp;5,
Executive shall not be entitled to any other payments or benefits under this Agreement as a result
of the termination of Executive&#146;s employment.
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;6. <U>Restrictive Covenants</U>.
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a) <U>Non-Competition</U>. While employed by the Company and for a period of twenty-four
(24)&nbsp;months after ceasing to be so employed (the &#147;Restricted Period&#148;) for whatever reason,
Executive shall not, directly or indirectly, own, manage, operate, control or participate in the
ownership, management, operation or control of, or be connected as an officer, partner, director,
consultant or other position, or have any financial interest in with (i)&nbsp;any steel service center
or distributor conducting business within those portions of the United States wherein the Company
is conducting business on the Termination Date, or (ii)&nbsp;a business engaged in direct competition
with any other significant business carried on by the Company on the Termination Date. In no event
shall ownership of less than five (5)&nbsp;percent of the equity of a corporation, limited liability
company or other business entity, standing alone, constitute a violation hereof.
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b) <U>Non-Solicitation</U>. During the Restrictive Period, Executive shall not directly,
indirectly or through an affiliate: (i)&nbsp;solicit, induce, divert, or take away or attempt to
solicit, induce, divert or take away any customer, distributor, or supplier of the Company; (ii)
solicit, induce, or hire or attempt to solicit, induce, or hire any employee of the Company or any
individual who was an employee of the Company on the Termination Date and who has left the
employment of the Company after the Termination Date within one year of the termination of such
employee&#146;s employment with the Company, or (iii)&nbsp;in any way directly or indirectly interfere with
such relationships.
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(c) <U>Confidentiality</U>.
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(i)&nbsp;Executive shall keep in strict confidence, and shall not, directly or indirectly, at any
time while employed by the Company or after ceasing to be so employed,
</DIV>

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<DIV style="font-family: 'Times New Roman',Times,serif">
<DIV align="left" style="font-size: 10pt; margin-top: 6pt">disclose, furnish, publish, disseminate, make available or, except in the course of performing his
duties of employment hereunder, use for his benefit or the benefit of others any Confidential
Information. Executive specifically acknowledges that all Confidential Information, in whatever
media or form maintained, and whether compiled by the Company or Executive, (1)&nbsp;derives independent
economic value from not being readily known to or ascertainable by proper means by others who can
obtain economic value from its disclosure or use, (2)&nbsp;that reasonable efforts have been made by the
Company to maintain the secrecy of such information, (3)&nbsp;that such information is the sole property
of the Company, and (4)&nbsp;that any disclosure or use of such information by Executive while employed
by the Company (except in the course of performing his duties and obligations hereunder for the
Company) or after ceasing to be so employed shall constitute a misappropriation of the Company&#146;s
trade secrets.
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(ii)&nbsp;Notwithstanding the provisions of Section&nbsp;6(c)(i), Executive may disclose the
Confidential Information to anyone outside of the Company with the Company&#146;s express written
consent, or Confidential information that: (i)&nbsp;is at the time of receipt or thereafter becomes
publicly known through no wrongful act of Executive; or (ii)&nbsp;is received from a third party not
under an obligation to keep such information confidential and without breach of this Agreement.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(iii)&nbsp;In addition to the above provisions of Section&nbsp;6(c), all memoranda, notes, lists,
records and other documents (and all copies thereof) made or compiled by Executive or made
available to Executive concerning the business of the Company will be delivered to the Company at
any time on request.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;7. <U>Binding Agreement; Successors</U>. This Agreement shall inure to the benefit of and be
binding upon Executive&#146;s personal or legal representatives, executors, administrators, successors,
heirs, distributees, devisees and legatees. If Executive should die while any amounts would still
be payable to him hereunder, all such amounts, unless otherwise provided herein, shall be paid in
accordance with the terms of this Agreement to Executive&#146;s spouse, or if is spouse does not survive
him, to Executive&#146;s estate. This Agreement shall inure to the benefit of and be binding upon the
successors and assigns of the Company, including, without limitation, any person acquiring directly
or indirectly all or substantially all of the assets of the Company, whether by merger,
consolidation, sale or otherwise (and such successor shall thereafter be deemed the &#147;Company&#148; for
the purposes of this Agreement). The Company shall require any such successor to assume and agree
to perform this Agreement.
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;8. <U>Notice</U>. All notices, requests and other communications under this Agreement shall
be in writing and shall be deemed to have been duly given (a)&nbsp;when hand delivered, (b)&nbsp;one business
day after being sent by recognized overnight delivery service, or (c)&nbsp;three business days after
being sent by registered or certified mail, return receipt requested, postage prepaid, and in each
case addressed as follows (or addressed as otherwise specified by notice under this Section):
</DIV>


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<DIV style="font-family: 'Times New Roman',Times,serif">




<DIV style="margin-top: 6pt">
<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt">

<TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="6%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left">(i)</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>If to the Company, to:</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="6%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>Olympic Steel, Inc.<br>
5096 Richmond Road<br>
Bedford Heights, Ohio 44146<br>
Attention: Chief Executive Officer</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="6%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>With a copy to:</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="6%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>Olympic Steel, Inc.<br>
5096 Richmond Road<br>
Bedford Heights, Ohio 44146<br>
Attention: Chairman, Compensation Committee</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="6%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left">(ii)</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>If to Executive, to:</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="6%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>Richard T. Marabito<br>
7919 Sherman Road<br>
Gates Mills, OH 44040</TD>
</TR>

</TABLE>
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;9. <U>Withholding</U>. The Company may withhold from any amounts payable under or in
connection with this Agreement all federal, state, local and other taxes as may be required to be
withheld by the Company under applicable law or governmental regulation or ruling.
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;10. <U>Amendments; Waivers</U>. No provision of this Agreement may be modified,
waived or discharged unless such waiver, modification or discharge is agreed to in writing, and is
signed by Executive and an officer of the Company specifically designated by the Board of the
Company or its Compensation Committee to execute such writing. No delay in exercising any right,
power or privilege hereunder shall operate as a waiver thereof. No waiver by either party hereto
at any time of any breach by the other party hereto of, or compliance with, any condition or
provision of this Agreement to be performed by such other party shall be deemed a waiver of similar
or dissimilar provisions or conditions at the same or at any prior or subsequent time.
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;11. <U>Governing Law</U>. The validity, interpretation, construction and performance of this
Agreement shall be governed by the laws of the State of Ohio, without giving effect to the conflict
of law principles of such State.
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;12. <U>Equitable Relief</U>. Executive and the Company acknowledge and agree that the
covenants contained in Section&nbsp;6 are of a special nature and that any breach, violation or evasion
by Executive of the terms of Section&nbsp;6 will result in immediate and irreparable injury and harm to
the Company, for which there is no adequate remedy at law, and will cause damage to the Company in
amounts difficult to ascertain. Accordingly, the Company shall be entitled to the remedy of
injunction, as well as to all other legal or equitable remedies to which the Company may be
entitled (including, without limitation, the right to seek monetary damages), for any breach,
violation or evasion by Executive of the terms of Section&nbsp;6.
</DIV>


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<DIV style="font-family: 'Times New Roman',Times,serif">




<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;13. <U>Validity</U>. The invalidity or unenforceability of any provision or
provisions of this Agreement shall not affect the validity or enforceability of any other provision
of this Agreement, which shall remain in full force and effect. In the event that any provision of
Section&nbsp;6 is found by a court of competent jurisdiction to be invalid or unenforceable as against
public policy, such court shall exercise its discretion in reforming such provision to the end that
Executive shall be subject to such restrictions and obligations as are reasonable under the
circumstances and enforceable by the Company.
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;14. <U>Counterparts</U>. This Agreement may be executed in one or more counterparts, each of
which shall be deemed to be an original but all of which together shall constitute one and the same
instrument.
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;15. <U>Headings; Definitions</U>. The headings contained herein are for reference purposes
only and shall not in any way affect the meaning or interpretation of this Agreement. Certain
capitalized terms used in this Agreement are defined on <U>Schedule&nbsp;A</U> attached hereto.
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;16. <U>No Assignment</U>. This Agreement may not be assigned by either party without the
prior written consent of the other party, except as provided in Section&nbsp;7.
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;17. <U>Entire Agreement; No Other Arrangements</U>. This Agreement contains the
entire agreement between the parties with respect to the employment of Executive and supersedes any
and all other agreements, either oral or in writing, with respect to the employment of Executive,
with the exception of the Management Retention Agreement entered into between the Company and
Executive on or about April&nbsp;20, 2000 which shall remain in full force and effect. In the event of
any conflict between the Agreement and the Management Retention Agreement, the terms of the
Management Retention Agreement shall prevail. Executive acknowledges that, in executing this
Agreement, he has not relied on any representations not set forth in this Agreement. Executive
represents that his employment by the Company will not violate any other agreement by which
Executive is bound.
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;IN WITNESS WHEREOF, the parties have executed this Agreement as of the date first above
written.
</DIV>

<DIV align="center">
<TABLE style="font-size: 10pt" cellspacing="0" border="0" cellpadding="0" width="90%">
<!-- Begin Table Head -->
<TR valign="bottom">
    <TD width="48%">&nbsp;</TD>
    <TD width="2%">&nbsp;</TD>
    <TD width="2%">&nbsp;</TD>
    <TD width="2%">&nbsp;</TD>
    <TD width="46%">&nbsp;</TD>
</TR>
<!-- End Table Head -->
<!-- Begin Table Body -->
<TR valign="bottom">
    <TD valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="3" valign="top" align="left">OLYMPIC STEEL, INC.</TD>
</TR>
<TR valign="bottom"><!-- Blank Space -->
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">&nbsp;
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">By:</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">/s/ Michael D. Siegal</TD>
</TR>
<TR style="font-size: 1px">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">&nbsp;
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top" style="border-top: 1px solid #000000">&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="3" valign="top" align="left">Name: Michael D. Siegal</TD>
</TR>
<TR valign="bottom">
    <TD valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="3" valign="top" align="left">Title: Chief Executive Officer</TD>
</TR>
<TR valign="bottom"><!-- Blank Space -->
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
</TR>


<TR valign="bottom">
    <TD valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="3" valign="top" align="left">/s/ Richard T. Marabito&nbsp;</TD>
</TR>

<TR style="font-size: 1px">
    <TD valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="3" valign="top" align="left" style="border-top: 1px solid #000000">&nbsp;</TD>
</TR>

<TR valign="bottom">
    <TD valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="3" valign="top" align="left">RICHARD T. MARABITO</TD>
</TR>
<TR valign="bottom">
    <TD valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="3" valign="top" align="left">(&#147;Executive&#148;)</TD>
</TR>
<!-- End Table Body -->
</TABLE>
</DIV>


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<DIV style="font-family: 'Times New Roman',Times,serif">


<DIV align="center" style="font-size: 10pt; margin-top: 18pt"><U><B>Schedule&nbsp;A</B></U>
</DIV>


<DIV align="Center" style="font-size: 10pt; margin-top: 6pt"><U><B>Certain Definitions</B></U>

</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 3%">As used in this Agreement, the following capitalized terms shall have the following meanings:
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 3%">&#147;<I>Affiliate</I>&#148; of a specified entity means an entity that directly, or indirectly through one
or more intermediaries, controls, or is controlled by, or is under common control with, the
entity specified.
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 3%">&#147;<I>Code</I>&#148; means the Internal Revenue Code of 1986, as amended from time to time.
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 3%">&#147;<I>Confidential Information</I>&#148; means confidential business information of the Company and its
customers and vendors, without limitation as to when or how Executive may have acquired such
information. Such Confidential Information shall include, without limitation, the Company&#146;s
sales figures, profit or loss figures or other information related to the Company&#146;s internal
financial statements, customers, clients, suppliers, vendors and product information,
sources of supply, customer lists or other information, selling and servicing methods and
business techniques, product development plans, sales and distribution information, business
plans and opportunities, or corporate alliances and other information concerning the
Company&#146;s actual or anticipated business or products, or which is received in confidence by
or for the Company from any other person.
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 3%">&#147;<I>Disability</I>&#148; means the inability of Executive for a continuous period of ninety (90)&nbsp;days or
for one hundred and eighty (180)&nbsp;days in the aggregate during any twelve (12)&nbsp;month period
to perform any material portion of the duties of his position hereunder on an active
full-time basis by reason of a disability condition. The Company and Executive acknowledge
and agree that the material duties of Executive&#146;s position are unique and critical to the
Company and that a disability condition that causes Executive to be unable to perform the
essential functions of his position under the circumstances described above will constitute
an undue hardship on the Company. Notwithstanding the foregoing, Executive shall not be
disabled provided that all of the following conditions have been satisfied:
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 3%">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a) after receipt of the Company&#146;s written notice of intent to terminate due to
Disability, Executive shall have the right within ten (10)&nbsp;days to dispute the Company&#146;s
ability to terminate him under this section;
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 3%">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b) within ten (10)&nbsp;days after exercising such right, Executive shall submit to a
physical exam by the Chief of Medicine of any major hospital in the metropolitan Cleveland
area;
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 3%">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(c) such physician shall issue his written statement to the effect that in his opinion,
based upon his diagnosis, Executive is capable of resuming his employment and devoting his
full time and energy in discharging his duties within ten (10)&nbsp;days after the date of such
statement; and
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 3%">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(d) the Executive returns to work on a full-time basis and devotes his energy in
discharging his duties.
</DIV>

<P align="center" style="font-size: 10pt"> 69 of 77
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<DIV style="font-family: 'Times New Roman',Times,serif">


<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 3%">&#147;<I>Exchange Act</I>&#148; means the Securities Exchange Act of 1934, as amended, and the rules and
regulations thereunder, as such law, rules and regulations may be amended from time to time.
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 3%"><I>&#147;Good Cause&#148; </I>means a reasonable determination by the Board made in good faith (without the
participation of Executive) of the Company, pursuant to the exercise of its business
judgment, that any one of the following events has occurred:
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 3%">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a) Executive is found by the Board to have engaged in (1)&nbsp;willful misconduct, (ii)
willful or gross neglect, (iii)&nbsp;fraud, (iv)&nbsp;misappropriation, or (v)&nbsp;embezzlement in the
performance of his duties hereunder;
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 3%">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b) Executive has materially breached the provisions of Section&nbsp;6 or any other material
provision of this Agreement and fails to cure such breach within ten (10)&nbsp;days following
written notice from the Company specifying such breach which notice from the Company shall
be provided within thirty (30)&nbsp;days after said breach;
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 3%">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(c) Executive is found by the Board to have failed to provide reasonable cooperation
with any federal government or other governmental regulatory investigation, the
reasonableness of such cooperation to be determined by reference to statutory and regulatory
authorities, Federal Sentencing Guidelines, and relevant case law interpretations;
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 3%">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(d) Executive signs or certifies statements required to be made pursuant to
Sarbanes-Oxley Sections&nbsp;302 and 906, or other similar rules or regulations then in effect,
which turn out to be false or inaccurate in any material respect; provided, however, that
the Board has made a reasonable determination in good faith that the Executive knew or
should have known that such statements were false or inaccurate in any material respect;
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 3%">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(e) Executive has been indicted by a state or federal grand jury with respect to 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) and a special committee
of the Board, chaired by an outside director appointed by the Chair of the Audit Committee,
considers the matter, makes a recommendation to the Board to terminate Executive&#146;s
employment for Good Cause, and the Board concurs in that recommendation; or
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 3%">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(f) Executive is found by the Board to have engaged in a material violation of the
Code of Conduct of the Company as then in effect .
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 3%">&#147;<I>Release and Waiver of Claims</I>&#148; means a written release and waiver by Executive, to the
fullest extent allowable under applicable law and in form reasonably acceptable to the
Company, of all claims, demands, suits, actions, causes of action, damages and rights
against the Company and its Affiliates whatsoever which he may have had on account of the
termination of his employment, including, without limitation, claims of discrimination,
including on the basis of sex, race, age, national origin, religion, or handicapped status,
and any and all claims, demands and causes of action for severance or other termination pay.
Such Release and Waiver of Claims shall not, however, apply to the obligations of the
Company arising under this Agreement, any indemnification agreement between Executive and
the Company, any retirement plans, any stock option
</DIV>

<P align="center" style="font-size: 10pt"> 70 of 77
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<DIV style="font-family: 'Times New Roman',Times,serif">


<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 3%">agreements, COBRA Continuation Coverage
or rights of indemnification Executive may
have under the Company&#146;s Articles of Incorporation or Code of Regulations (or comparable
charter document) or by statute.
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 3%">&#147;<I>Sarbanes-Oxley</I>&#148; means the Sarbanes-Oxley Act of 2002.
</DIV>

<P align="center" style="font-size: 10pt"> 71 of 77
</DIV>

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</TEXT>
</DOCUMENT>
<DOCUMENT>
<TYPE>EX-31.1
<SEQUENCE>5
<FILENAME>l21383aexv31w1.htm
<DESCRIPTION>EX-31.1
<TEXT>
<HTML>
<HEAD>
<TITLE>EX-31.1</TITLE>
</HEAD>
<BODY bgcolor="#FFFFFF">
<!-- PAGEBREAK -->
<H5 align="left" style="page-break-before:always">&nbsp;</H5><P>

<DIV style="font-family: 'Times New Roman',Times,serif">

<DIV align="right" style="font-size: 10pt; margin-top: 12pt"><B>Exhibit&nbsp;31.1</B>
</DIV>


<DIV align="center" style="font-size: 10pt; margin-top: 18pt"><B>Certification of the Principal Executive Officer</B>
</DIV>


<DIV align="Center" style="font-size: 10pt; margin-top: 6pt"><B>Pursuant to 15 U.S.C. 78m(a) or 78o(d)</B>

</DIV>

<DIV align="Center" style="font-size: 10pt; margin-top: 6pt"><B>(Section&nbsp;302 of the Sarbanes-Oxley Act of 2002)</B>

</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 12pt">I, Michael D. Siegal, certify that:
</DIV>


<DIV style="margin-top: 6pt">
<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt">

<TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="2%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left">1.</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>I have reviewed this quarterly report on Form 10-Q of Olympic Steel, Inc.;</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="2%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left">2.</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>Based on my knowledge, this report does not contain any untrue statement of a material
fact or omit to state a material fact necessary to make the statements made, in light of
the circumstances under which such statements were made, not misleading with respect to the
period covered by this report;</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="2%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left">3.</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>Based on my knowledge, the financial statements, and other financial information
included in this report, fairly present in all material respects the financial condition,
results of operations and cash flows of the registrant as of, and for, the periods
presented in this report;</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="2%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left">4.</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>The registrant&#146;s other certifying officer and I are responsible for establishing and
maintaining disclosure controls and procedures (as defined in Exchange Act Rules&nbsp;13a-15(e)
and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act
Rules&nbsp;13a-15(f) and 15(d)-15(f)) for the registrant and have:</TD>
</TR>

</TABLE>
</DIV>

<DIV style="margin-top: 6pt">
<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt">

<TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="6%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left">a.</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>designed such disclosure controls and procedures, or caused such disclosure
controls and procedures to be designed under our supervision, to ensure that material
information relating to the registrant, including its consolidated subsidiaries, is
made known to us by others within those entities, particularly during the period in
which this report is being prepared;</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="6%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left">b.</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>designed such internal control over financial reporting, or caused such
internal control over financial reporting to be designed under our supervision, to
provide reasonable assurance regarding the reliability of financial reporting and the
preparation of financial statements for external purposes in accordance with generally
accepted accounting principles;</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="6%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left">c.</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>evaluated the effectiveness of the registrant&#146;s disclosure controls and
procedures and presented in this report our conclusions about the effectiveness of the
disclosure controls and procedures, as of the end of the period covered by this report
based on such evaluation; and</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="6%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left">d.</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>disclosed in this report any change in the registrant&#146;s internal control over
financial reporting that occurred during the registrant&#146;s most recent fiscal quarter
(the registrant&#146;s fourth fiscal quarter in the case of an annual report) that has
materially</TD>
</TR>

</TABLE>
</DIV>
<P align="center" style="font-size: 10pt"> 72 of 77
</DIV>

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<DIV style="font-family: 'Times New Roman',Times,serif">


<DIV style="margin-top: 6pt"><TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt">



</TABLE>
</DIV>

<DIV style="margin-top: 6pt">
<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt">

<TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="6%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>affected, or is reasonably likely to materially affect, the registrant&#146;s
internal control over financial reporting; and</TD>
</TR>

</TABLE>
</DIV>

<DIV style="margin-top: 6pt">
<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt">

<TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="2%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left">5.</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>The registrant&#146;s other certifying officer and I have disclosed, based on our most
recent evaluation of internal control over financial reporting, to the registrant&#146;s
auditors and the audit committee of the registrant&#146;s board of directors (or persons
performing the equivalent functions):</TD>
</TR>

</TABLE>
</DIV>

<DIV style="margin-top: 6pt">
<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt">

<TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="6%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left">a.</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>all significant deficiencies and material weaknesses in the design or operation
of internal control over financial reporting which are reasonably likely to adversely
affect the registrant&#146;s ability to record, process, summarize and report financial
information; and</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="6%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left">b.</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>any fraud, whether or not material, that involves management or other employees
who have a significant role in the registrant&#146;s internal control over financial
reporting.</TD>
</TR>

</TABLE>
</DIV>
<DIV align="center">
<TABLE style="font-size: 10pt" cellspacing="0" border="0" cellpadding="0" width="100%">
<!-- Begin Table Head -->
<TR valign="bottom">
    <TD width="2%">&nbsp;</TD>
    <TD width="2%">&nbsp;</TD>
    <TD width="46%">&nbsp;</TD>
    <TD width="2%">&nbsp;</TD>
    <TD width="48%">&nbsp;</TD>
</TR>
<!-- End Table Head -->
<!-- Begin Table Body -->
<TR valign="bottom">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">By:
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">/s/ Michael D. Siegal
</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
</TR>
<TR style="font-size: 1px">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">&nbsp;
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top" style="border-top: 1px solid #000000">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD colspan="3" valign="top" align="left">Michael D. Siegal</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD colspan="3" valign="top" align="left">Olympic Steel, Inc.</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD colspan="3" valign="top" align="left">Chairman and Chief Executive Officer</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD colspan="3" valign="top" align="left">August&nbsp;9, 2006</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
</TR>
<!-- End Table Body -->
</TABLE>
</DIV>


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</TEXT>
</DOCUMENT>
<DOCUMENT>
<TYPE>EX-31.2
<SEQUENCE>6
<FILENAME>l21383aexv31w2.htm
<DESCRIPTION>EX-31.2
<TEXT>
<HTML>
<HEAD>
<TITLE>EX-31.2</TITLE>
</HEAD>
<BODY bgcolor="#FFFFFF">
<!-- PAGEBREAK -->
<H5 align="left" style="page-break-before:always">&nbsp;</H5><P>

<DIV style="font-family: 'Times New Roman',Times,serif">


<DIV align="right" style="font-size: 10pt; margin-top: 12pt"><B>Exhibit&nbsp;31.2</B>
</DIV>


<DIV align="center" style="font-size: 10pt; margin-top: 18pt"><B>Certification of the Principal Financial Officer</B>
</DIV>


<DIV align="Center" style="font-size: 10pt; margin-top: 6pt"><B>Pursuant to 15 U.S.C. 78m(a) or 78o(d)</B>

</DIV>

<DIV align="Center" style="font-size: 10pt; margin-top: 6pt"><B>(Section&nbsp;302 of the Sarbanes-Oxley Act of 2002)</B>

</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 12pt">I, Richard T. Marabito, certify that:
</DIV>


<DIV style="margin-top: 6pt">
<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt">

<TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="2%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left">1.</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>I have reviewed this quarterly report on Form 10-Q of Olympic Steel, Inc.;</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="2%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left">2.</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>Based on my knowledge, this report does not contain any untrue statement of a material
fact or omit to state a material fact necessary to make the statements made, in light of
the circumstances under which such statements were made, not misleading with respect to the
period covered by this report;</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="2%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left">3.</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>Based on my knowledge, the financial statements, and other financial information
included in this report, fairly present in all material respects the financial condition,
results of operations and cash flows of the registrant as of, and for, the periods
presented in this report;</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="2%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left">4.</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>The registrant&#146;s other certifying officer and I are responsible for establishing and
maintaining disclosure controls and procedures (as defined in Exchange Act Rules&nbsp;13a-15(e)
and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act
Rules&nbsp;13a-15(f) and 15(d)-15(f)) for the registrant and have:</TD>
</TR>

</TABLE>
</DIV>

<DIV style="margin-top: 6pt">
<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt">

<TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="6%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left">a.</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>designed such disclosure controls and procedures, or caused such
disclosure controls and procedures to be designed under our supervision, to ensure
that material information relating to the registrant, including its consolidated
subsidiaries, is made known to us by others within those entities, particularly
during the period in which this report is being prepared;</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="6%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left">b.</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>designed such internal control over financial reporting, or caused such
internal control over financial reporting to be designed under our supervision, to
provide reasonable assurance regarding the reliability of financial reporting and
the preparation of financial statements for external purposes in accordance with
generally accepted accounting principles;</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="6%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left">c.</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>evaluated the effectiveness of the registrant&#146;s disclosure controls and
procedures and presented in this report our conclusions about the effectiveness of
the disclosure controls and procedures, as of the end of the period covered by this
report based on such evaluation; and</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="6%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left">d.</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>disclosed in this report any change in the registrant&#146;s internal
control over financial reporting that occurred during the registrant&#146;s most recent
fiscal quarter (the registrant&#146;s fourth fiscal quarter in the case of an annual
report) that has materially affected, or is reasonably likely to materially affect,
the registrant&#146;s internal control over financial reporting; and</TD>
</TR>

</TABLE>
</DIV>
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</DIV>

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<DIV style="font-family: 'Times New Roman',Times,serif">


<DIV style="margin-top: 6pt"><TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt">



</TABLE>
</DIV>

<DIV style="margin-top: 6pt">
<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt">

<TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="2%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left">5.</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>The registrant&#146;s other certifying officer and I have disclosed, based on our most
recent evaluation of internal control over financial reporting, to the registrant&#146;s
auditors and the audit committee of the registrant&#146;s board of directors (or persons
performing the equivalent functions):</TD>
</TR>

</TABLE>
</DIV>

<DIV style="margin-top: 6pt">
<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt">

<TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="6%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left">a.</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>all significant deficiencies and material weaknesses in the design or
operation of internal control over financial reporting which are reasonably likely
to adversely affect the registrant&#146;s ability to record, process, summarize and
report financial information; and</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="6%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left">b.</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>any fraud, whether or not material, that involves management or other
employees who have a significant role in the registrant&#146;s internal control over
financial reporting.</TD>
</TR>

</TABLE>
</DIV>
<DIV align="center">
<TABLE style="font-size: 10pt" cellspacing="0" border="0" cellpadding="0" width="100%">
<!-- Begin Table Head -->
<TR valign="bottom">
    <TD width="2%">&nbsp;</TD>
    <TD width="2%">&nbsp;</TD>
    <TD width="46%">&nbsp;</TD>
    <TD width="2%">&nbsp;</TD>
    <TD width="48%">&nbsp;</TD>
</TR>
<!-- End Table Head -->
<!-- Begin Table Body -->
<TR valign="bottom">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">By:
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">/s/ Richard T. Marabito
</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
</TR>
<TR style="font-size: 1px">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">&nbsp;
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top" style="border-top: 1px solid #000000">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD colspan="3" valign="top" align="left">Richard T. Marabito</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD colspan="3" valign="top" align="left">Olympic Steel, Inc.</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD colspan="3" valign="top" align="left">Chief Financial Officer</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD colspan="3" valign="top" align="left">August&nbsp;9, 2006</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
</TR>
<!-- End Table Body -->
</TABLE>
</DIV>


<P align="center" style="font-size: 10pt"> 75 of 77
</DIV>

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</TEXT>
</DOCUMENT>
<DOCUMENT>
<TYPE>EX-32.1
<SEQUENCE>7
<FILENAME>l21383aexv32w1.htm
<DESCRIPTION>EX-32.1
<TEXT>
<HTML>
<HEAD>
<TITLE>EX-32.1</TITLE>
</HEAD>
<BODY bgcolor="#FFFFFF">
<!-- PAGEBREAK -->
<H5 align="left" style="page-break-before:always">&nbsp;</H5><P>

<DIV style="font-family: 'Times New Roman',Times,serif">


<DIV align="right" style="font-size: 10pt; margin-top: 12pt"><B>Exhibit&nbsp;32.1</B>
</DIV>


<DIV align="center" style="font-size: 10pt; margin-top: 18pt"><B>Certification of the Principal Executive Officer</B>
</DIV>


<DIV align="Center" style="font-size: 10pt; margin-top: 6pt"><B>Pursuant to 18 U.S.C. 1350</B>

</DIV>

<DIV align="Center" style="font-size: 10pt; margin-top: 6pt"><B>(Section&nbsp;906 of the Sarbanes-Oxley Act of 2002)</B>

</DIV>
<DIV align="left" style="font-size: 10pt; margin-top: 6pt">I, Michael D. Siegal, the Chairman &#038; Chief Executive Officer of Olympic Steel, Inc. (the
&#147;Company&#148;), certify that to the best of my knowledge, based upon a review of this report on Form
10-Q for the period ended June&nbsp;30, 2006 of the Company (the &#147;Report&#148;):
</DIV>


<DIV style="margin-top: 6pt">
<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt">

<TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="1%" nowrap align="left">1.</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>The Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities
Exchange Act of 1934, as amended; and</TD>
</TR>

</TABLE>
</DIV>

<DIV style="margin-top: 6pt">
<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt">

<TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="1%" nowrap align="left">2.</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>The information contained in the Report fairly presents, in all material respects, the
financial condition and results of operations of the Company.</TD>
</TR>

</TABLE>
</DIV>
<DIV align="center">
<TABLE style="font-size: 10pt" cellspacing="0" border="0" cellpadding="0" width="100%">
<!-- Begin Table Head -->
<TR valign="bottom">
    <TD width="2%">&nbsp;</TD>
    <TD width="2%">&nbsp;</TD>
    <TD width="46%">&nbsp;</TD>
    <TD width="2%">&nbsp;</TD>
    <TD width="48%">&nbsp;</TD>
</TR>
<!-- End Table Head -->
<!-- Begin Table Body -->
<TR valign="bottom">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">By:
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">/s/ Michael D. Siegal
</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
</TR>
<TR style="font-size: 1px">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">&nbsp;
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top" style="border-top: 1px solid #000000">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD colspan="3" valign="top" align="left">Michael D. Siegal</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD colspan="3" valign="top" align="left">Olympic Steel, Inc.</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD colspan="3" valign="top" align="left">Chairman &#038; Chief Executive Officer</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD colspan="3" valign="top" align="left">August&nbsp;9, 2006</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
</TR>
<!-- End Table Body -->
</TABLE>
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">The foregoing certification is being furnished solely pursuant to Section&nbsp;906 of the Sarbanes-Oxley
Act of 2002 (Section&nbsp;1350, Chapter&nbsp;63 of Title 18, United States Code) and is not being filed as
part of the Report or as a separate disclosure document.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">A signed original of this written statement required by Section&nbsp;906 has been provided to Olympic
Steel, Inc. and will be retained by Olympic Steel, Inc. and furnished to the Securities and
Exchange Commission or its staff upon request.
</DIV>


<P align="center" style="font-size: 10pt"> 76 of 77
</DIV>

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</TEXT>
</DOCUMENT>
<DOCUMENT>
<TYPE>EX-32.2
<SEQUENCE>8
<FILENAME>l21383aexv32w2.htm
<DESCRIPTION>EX-32.2
<TEXT>
<HTML>
<HEAD>
<TITLE>EX-32.2</TITLE>
</HEAD>
<BODY bgcolor="#FFFFFF">
<!-- PAGEBREAK -->
<H5 align="left" style="page-break-before:always">&nbsp;</H5><P>

<DIV style="font-family: 'Times New Roman',Times,serif">




<DIV align="right" style="font-size: 10pt; margin-top: 12pt"><B>Exhibit&nbsp;32.2</B>
</DIV>


<DIV align="center" style="font-size: 10pt; margin-top: 18pt"><B>Certification of the Principal Financial Officer</B>
</DIV>


<DIV align="Center" style="font-size: 10pt; margin-top: 6pt"><B>Pursuant to 18 U.S.C. 1350</B>

</DIV>

<DIV align="Center" style="font-size: 10pt; margin-top: 6pt"><B>(Section&nbsp;906 of the Sarbanes-Oxley Act of 2002)</B>

</DIV>
<DIV align="left" style="font-size: 10pt; margin-top: 6pt">I, Richard T. Marabito, the Chief Financial Officer of Olympic Steel, Inc. (the &#147;Company&#148;), certify
that to the best of my knowledge, based upon a review of this report on Form 10-Q for the period
ended June&nbsp;30, 2006 of the Company (the &#147;Report&#148;):
</DIV>


<DIV style="margin-top: 6pt">
<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt">

<TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="1%" nowrap align="left">1.</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>The Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities
Exchange Act of 1934, as amended; and</TD>
</TR>

</TABLE>
</DIV>

<DIV style="margin-top: 6pt">
<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt">

<TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="1%" nowrap align="left">2.</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>The information contained in the Report fairly presents, in all material respects, the
financial condition and results of operations of the Company.</TD>
</TR>

</TABLE>
</DIV>
<DIV align="center">
<TABLE style="font-size: 10pt" cellspacing="0" border="0" cellpadding="0" width="100%">
<!-- Begin Table Head -->
<TR valign="bottom">
    <TD width="2%">&nbsp;</TD>
    <TD width="2%">&nbsp;</TD>
    <TD width="46%">&nbsp;</TD>
    <TD width="2%">&nbsp;</TD>
    <TD width="48%">&nbsp;</TD>
</TR>
<!-- End Table Head -->
<!-- Begin Table Body -->
<TR valign="bottom">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">By:
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">/s/ Richard T. Marabito
</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
</TR>
<TR style="font-size: 1px">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">&nbsp;
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top" style="border-top: 1px solid #000000">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD colspan="3" valign="top" align="left">Richard T. Marabito</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD colspan="3" valign="top" align="left">Olympic Steel, Inc.</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD colspan="3" valign="top" align="left">Chief Financial Officer</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD colspan="3" valign="top" align="left">August&nbsp;9, 2006</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
</TR>
<!-- End Table Body -->
</TABLE>
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">The foregoing certification is being furnished solely pursuant to Section&nbsp;906 of the Sarbanes-Oxley
Act of 2002 (Section&nbsp;1350, Chapter&nbsp;63 of Title 18, United States Code) and is not being filed as
part of the Report or as a separate disclosure document.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">A signed original of this written statement required by Section&nbsp;906 has been provided to Olympic
Steel, Inc. and will be retained by Olympic Steel, Inc. and furnished to the Securities and
Exchange Commission or its staff upon request.
</DIV>



<P align="center" style="font-size: 10pt"> 77 of 77
</DIV>


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