SECURITIES AND EXCHANGE COMMISSION
                         Washington, D. C.  20549
                      ______________________________
                                     
                                 FORM 10-K
 (Mark One)
(  X  )     ANNUAL REPORT PURSUANT TO SECTION 13 or 15(d) OF THE SECURITIES
                                ACT OF 1934
                For The Fiscal Year Ended December 31, 1997
                                     
                                    OR
                                     
  (     )   TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF
                    THE SECURITIES EXCHANGE ACT OF 1934
                                     
             For the Transition Period From ___________ to ____________
                      Commission File Number 0-22462
                                     
                        GIBRALTAR STEEL CORPORATION
          (Exact name of Registrant as specified in its charter)
                                     
        Delaware                                16-1445150
(State or other jurisdiction of             (I.R.S. Employer
 incorporation organization)                 Identification No.)

3556 Lake Shore Road, P.O. Box 2028, Buffalo, New York     14219-0228
(address of principal executive offices)                   (Zip Code)

                               (716) 826-6500
            Registrant's telephone number, including area code
                                     
        Securities registered pursuant to Section 12(b) of the Act:

  Title of each class              Name of  each exchange on which registered
Common Stock, $.01 par value             NASDAQ National Market System

        Securities registered pursuant to Section 12(g) of the Act:
                                     
                                   NONE
                                     
Indicate by check mark whether the Registrant (1) has filed all reports
required to be filed by Section 13 or 15(d) of the Securities Exchange Act
of 1934 during the preceding 12 months (or for such shorter period that the
Registrant was required to file such reports), and (2) has been subject to
such filing requirements for the past 90 days.  YES  X    NO

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

As of December 31, 1997, the aggregate market value of the voting stock
held by nonaffiliates of the Registrant amounted to $121,763,000.

As of December 31, 1997, the number of common shares outstanding was:
12,409,619.


                    DOCUMENTS INCORPORATED BY REFERENCE
                                     
Portions of the Registrant's definitive Proxy Statement for the Annual
Meeting of Shareholders to be held May 19, 1998, are incorporated by
reference into Part III of this report.
                                     
                                     
                                                Exhibit Index is on Page 36

                                  PART I
                                     
Item 1.  Description of Business

General

The Company is an intermediate processor of value-added steel products,
consisting primarily of a broad range of fully processed cold-rolled strip
steel products.  Cold-rolled strip steel products comprise a segment of the
cold-rolled sheet steel market that is defined by narrower widths, improved
surface conditions and tighter gauge tolerances and are used by customers
that demand critical specifications in their raw material needs. The
Company manufactures high quality steel strapping for industrial
applications and operates a precision metals facility for flat-rolled sheet
steel and other processed metals products.  The Company is a supplier of
galvanized, Galvalume and prepainted steel to the commercial and
residential metal building industry.  Southeastern Metals Manufacturing,
Inc. (SEMCO), acquired in January 1997, manufactures a wide array of metal
products for the residential and commercial construction markets.  The
Company provides metallurgical heat treating services for customers in a
wide variety of industries.  The Company operates materials management
facilities that link steel producers and end-user manufacturers by
integrating the inventory purchasing, receiving, inspection, billing,
storage and shipping functions resulting in true just-in-time delivery of
materials, thereby enabling both the steel producers and the end-user
manufacturers to manage inventory more efficiently.

Industry Overview

Intermediate steel processors occupy a market niche that exists between
primary steel producers and end-user manufacturers.  Primary steel
producers typically focus on the sale of standard size and tolerance steel
to large volume purchasers, including intermediate steel processors.  At
the same time, end-user manufacturers require steel with closer tolerances
and on shorter lead times than the primary steel producers can provide
efficiently.

Metal Processes, Products and Services

The Company utilizes any one or a combination of more than 20 different
processes and services to produce and deliver a variety of products on a
just-in-time basis to industrial manufacturers and fabricators in the
automotive, automotive supply, appliance, metal building and construction,
machinery, and steel industries.

                     -2-

The following metal processes, products and services are provided by the
Company:

Cold-Rolled Strip Steel.  The Company produces a broad range of fully
processed cold-rolled strip steel products.  The Company buys wide, open
tolerance sheet steel in coils from primary steel producers and processes
it to specific customer orders by performing such computer-aided processes
as cold reduction, annealing, edge rolling, slitting, roller leveling and
cutting to length.  Cold reduction is the rolling of steel to a specified
thickness, temper and finish.  Annealing is a thermal process which changes
hardness and certain metallurgical characteristics of steel.  Edge rolling
involves conditioning edges of processed steel into square, full round or
partially round shapes.  Slitting is the cutting of steel to specified
widths. Roller leveling applies pressure across the width of the steel to
achieve precise flatness tolerances.  Depending on customer specifications,
one or more of these processes are utilized to produce steel strip of a
precise grade, temper, tolerance and finish.

The Company operates 10 rolling mills at its facilities in Cleveland, Ohio,
Chattanooga, Tennessee and Buffalo, New York, and is capable of rolling
widths of up to 50 inches.  The Company has the capability to process coils
up to a maximum of 72 inch outside diameter.  The Company's rolling mills
include automatic gauge control systems with hydraulic screwdowns allowing
for microsecond adjustments during processing.  The most current addition
is the 56 inch reversing mill which the Company believes is the widest of
its type in the industry.

The Company's computerized mills produce products meeting the most
stringent statistical quality control standards, enabling it to satisfy a
growing industry demand for a range of steel from thicker to thinner, low
carbons to alloy grades, all with precision gauge tolerances as close as +/-
 .0002 inches.

The Company's rolling facilities are further complemented by 15 high
convection annealing furnaces, which shorten annealing times over
conventional annealers.  The Company's newest furnaces incorporate the use
of a hydrogen atmosphere for the production of cleaner and more uniform
steel.  As a result of its annealing capabilities, the Company is able to
produce cold-rolled strip steel with improved consistency in terms of
thickness, hardness, molecular grain structure and surface.

                     -3-

The Company can produce certain of its strip steel products on oscillated
coils which wind the steel strip in a manner similar to the way thread is
wound on a spool.  Oscillating the steel enables the Company to put at
least six times greater volume of finished product on a coil than standard
ribbon winding, allowing customers to achieve longer production runs by
reducing the number of equipment shut-downs to change coils.  Customers are
thus able to increase productivity, reduce downtime, improve yield and
lengthen die life.

Precision Metals.  The Company operates a precision metals facility for
flat-rolled sheet steel and other processed metal products.  In addition to
slitting and cutting to length, the Company's precision metals facility can
produce higher value-added products that are held to close tolerances and
tight specifications through cold-rolling, annealing, blanking, oscillating
and edging rolling.

The Company also processes galvanized, Galvalume and prepainted steel at
another facility for the commercial and residential metal building
industries and can slit and cut to length material based upon customer
specifications.

Metal Products Manufacturing.  The Company through its SEMCO acquisition
manufactures a wide array of galvanized steel, aluminum and copper products
for the construction industry including steel framing for residential and
commercial properties, metal trims, prefab homes and utility sheds, metal
connectors, metal roofing, drywall products, gutters and down spouts,
ventilation products and storm panel systems.  With facilities located in
Florida, Georgia, Tennessee, Texas and Oklahoma, SEMCO uses precision
engineering combined with slitting, stamping, roll forming and other
processes to manufacture their various products.

Steel Strapping Manufacturing.  Steel strapping is banding and packaging
material that is used to close and reinforce shipping units such as bales,
boxes, cartons, coils, crates and skids.  The Company believes that it is
one of four major domestic manufacturers of high tensile steel strapping,
which is used in heavy duty applications.  High tensile strapping is
subject to strength requirements imposed by the American Association of
Railroads for packaging of different products for common carrier transport.
This high tensile steel strapping is essential to producers of large, heavy
products such as steel, paper and lumber where reliability of the packaging
material is critical to the safe transport of the product.

The Company's strapping facility manufactures high tensile steel strapping
by slitting, oscillating, heat treating, painting and packaging cold-rolled
coils.

                     -4-

Steel strapping is cold-rolled to precise gauge on the Company's rolling
mill, which incorporates hydraulic screw downs and automatic gauge controls
with statistical charting.  This process ensures strapping product of the
most uniform gauge available and produces the maximum amount of strapping
per pound of steel.  All products are tested by on-site laboratory
personnel for width, thickness and other metallurgical properties.

To meet the differing needs of its customers, the Company offers its
strapping products in various thicknesses, widths and coil sizes.  The
Company also manufactures custom color and printed strapping.  In addition,
the Company offers related strapping products, such as seals and tools, and
is able to manufacture tensional strapping for lighter duty applications.

Metallurgical Heat Treating Services.  In February 1996, the Company
acquired Carolina Commercial Heat Treating, Inc. (CCHT) which through its
facilities located in North Carolina, South Carolina, Tennessee, Georgia
and Alabama (acquired in May 1997) provides metallurgical heat treating
services for customer-owned parts.  These services include case-hardening,
surface-hardening and through-hardening processes for customers in a wide
variety of industries.  Using methods such as annealing, flame hardening,
vacuum hardening, carburizing and nitrating, as well as a host of other
services, these facilities can harden, soften or otherwise impart desired
properties on parts made of steel, copper and various alloys and other
metals.  A variety of brazing services to join metallic objects together is
also provided.  CCHT maintains a metallurgical laboratory at each facility,
providing a range of testing capabilities to add value to treated parts and
enhance quality control.  Consistent quality control is maintained by
application of a statistical process control system.  Additionally, CCHT
maintains a fleet of trucks and trailers to provide rapid turnaround time
for its customers.

Materials Management.  The Company operates two materials management
facilities that link primary steel producers and end-user manufacturers by
integrating the inventory purchasing, receiving, inspection, billing,
storage and shipping functions and producing true just-in-time delivery of
materials.  These facilities receive shipments of steel by rail and truck
from steel producers, which retain ownership of the steel until it is
delivered to the end-user manufacturer.  The Company inspects the steel and
stores it in a climate-controlled environment through the use of a
specialized stacker crane and racking system.  When an order is placed, the
Company often delivers the steel to the end-user manufacturer within one
hour using Company-owned trucks that have been custom designed to
facilitate the loading and unloading process.

                     -5-

Joint Venture.  The Company is a minority partner in two steel pickling
operations. After the hot-rolling process, the surface of sheet steel is
left with a residue known as scale, which must be removed prior to further
processing by a cleaning process known as pickling.  This joint venture
pickles steel on a toll basis, receiving fees for its pickling services
without acquiring ownership of the steel.

Quality Control

The Company carefully selects its raw material vendors and uses
computerized inspection and analysis to assure that the steel that enters
its production processes will be able to meet the most critical
specifications of its customers.  The Company uses documented procedures
during the production process, along with statistical process control
computers linked directly to processing equipment, to monitor that such
specifications are met.  Physical, chemical and metallographic analyses are
performed during the production process to verify that mechanical and
dimensional properties, cleanliness, surface characteristics and chemical
content are within specification.

Suppliers and Raw Materials

Intermediate steel processing companies are required to maintain
substantial inventories of raw materials in order to accommodate the short
lead times and just-in-time delivery requirements of their customers.
Accordingly, the Company generally maintains its inventory of raw materials
at levels that it believes are sufficient to satisfy the anticipated needs
of the customers based upon historic buying practices and market
conditions.  The primary raw material utilized by the Company in its
processing operations is flat-rolled steel.  The Company purchases flat-
rolled steel at regular intervals from a number of suppliers, however, a
majority of its steel requirements is purchased from 18 major North
American suppliers.  The Company has no long-term commitments with any of
its suppliers.

Technical Services

The Company employs a staff of engineers and other technical personnel and
maintains fully-equipped, modern laboratories to support is operations.
The facilities enable the Company to verify, analyze and document the
physical, chemical, metallurgical and mechanical properties of its raw
materials and products.  Technical service personnel also work in
conjunction with the sales force to determine the types of flat rolled
steel required for the particular needs of the Company's customers.

                     -6-

Sales and Marketing

The Company's products and services are sold primarily by Company sales
personnel located throughout the midwest, northeast and southeast United
States and Mexico.  This marketing staff is supported by a vice president
of sales for each of the Company's principal product lines.

Customers and Distribution

The Company services approximately 6,000 industrial customers located
primarily in the midwest, northeast and southeast United States, Canada and
Mexico.  In 1997, net sales to automotive and automotive supply
manufacturers accounted for approximately 17% and 19%, respectively.  The
Company also sells its products to customers in the appliance, metal
building and construction, and steel industries.

The Company primarily manufactures its products exclusively to customer
order rather than for inventory. Although the Company negotiates annual
sales orders with a majority of its customers, these orders are subject to
customer confirmation as to product amounts and delivery dates.

In 1995 General Motors Corporation, through its various subsidiaries and
affiliates, accounted for approximately 11% of net sales.  In 1996 and
1997, no customer of the Company represented 10% or more of the Company's
net sales.

Competition

The steel processing market is highly competitive.  The Company competes
with a small number of other intermediate steel processors, some of which
also focus on fully processed high value-added steel products.  The Company
competes on the basis of the precision and range of achievable tolerances,
quality, price and the ability to meet delivery schedules dictated by
customers.

                      -7-

The Company also competes with a small number of other steel strapping
manufacturers on the basis of quality, price, product variety and the
ability to meet delivery schedules dictated by customers.

The Company competes with a small number of suppliers of heat treating
services in its market areas on the basis of quality, price, and delivery.

The Company competes with a number of other metal products manufacturers in
its market areas on the basis of quality, price, and delivery.

Employees

At December 31, 1997, the Company employed approximately 1,450 people.

Backlog

Because of the nature of the Company's products and the short lead time
order cycle, backlog is not a significant factor in the Company's business.
The Company believes that substantially all of its backlog of firm orders
existing on  December 31, 1997 will be shipped prior to the end of 1998.

Governmental Regulation

The Company's processing centers and manufacturing facilities are subject
to many federal, state and local requirements relating to the protection of
the environment.  The Company believes that it is in material compliance
with all environmental laws, does not anticipate any material expenditures
in order to meet environmental
requirements and does not believe that future compliance with such laws and
regulations will have a material adverse effect on its results of
operations or financial condition.

The Company's operations are also governed by many other laws and
regulations.  The Company believes that it is in material compliance with
these laws and regulations and does not believe that future compliance with
such laws and regulations will have a material adverse effect on its
results of operations or financial condition.

                     -8-

Item 2.  Description of Properties

The Company maintains its corporate headquarters in Buffalo, New York and
conducts its business operations in facilities located in New York,
Michigan, Illinois, Ohio, Tennessee, Texas, South Carolina, North Carolina,
Georgia, Alabama, Florida, and Oklahoma.

The Company believes that its primary existing facilities, listed below,
and their equipment are effectively utilized, well maintained, in good
condition and will be able to accommodate its capacity needs through 1998.

                                                              Square    Owned or
Location                   Utilization                        Footage   Leased

Buffalo, New York          Headquarters                        23,000   Leased

Buffalo, New York          Precision metals processing;
                           warehouse                          207,000   Owned

Cheektowaga, New York      Cold-rolled strip steel processing
                           and strapping products             148,000   Owned

Tonawanda, New York        Cold-rolled strip steel and
                           precision metals processing        128,000   Owned

Lackawanna, New York       Materials management facility       65,000   Leased

Dearborn, Michigan         Strapping tool products              3,000   Owned

Woodhaven, Michigan        Materials management facility      100,000   Owned

Franklin Park, Illinois    Coated sheet steel and precision
                           metals processing                   99,000   Owned

Cleveland, Ohio            Cold-rolled strip steel
                           processing                         259,000   Leased

Chattanooga, Tennessee     Steel processing                    65,000   Owned

Brownsville, Texas         Distribution warehouse              15,000   Leased

Fountain Inn, S. Carolina  Heat treating services              77,400   Leased

Reidsville, N. Carolina    Heat treating services              53,500   Leased

Morristown, Tennessee      Heat treating services              24,200   Owned

Conyers, Georgia           Heat treating services              18,700   Leased

Athens, Alabama            Heat treating services              20,000   Leased

                     -9-

                                                              Square    Owned or
Location                   Utilization                        Footage   Leased

Charlotte, N. Carolina     Administrative office                3,400   Leased

Jacksonville, Florida      Administrative office and
                           metal products manufacturing       261,400   Leased

Miami, Florida             Metal products manufacturing        77,000   Leased

Tampa, Florida             Metal products manufacturing        50,000   Leased

Nashville, Tennessee       Metal products manufacturing        52,500   Leased

San Antonio, Texas         Metal products manufacturing        70,000   Leased

Houston, Texas             Metal products manufacturing        48,200   Leased

Vidalia, Georgia           Metal products manufacturing        34,000   Leased

Miami, Oklahoma            Metal products warehouse            15,000   Leased



Item 3.  Legal Proceedings

From time to time, the Company is named a defendant in legal actions
arising out of the normal course of business.  The Company is not a party
to any pending legal proceeding the resolution of which the management of
the Company believes will have a material adverse effect on the Company's
results of operations or financial condition or to any other pending legal
proceedings other than ordinary, routine litigation incidental to its
business.  The Company maintains liability insurance against risks arising
out of the normal course of business.

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

Not applicable.

                      -10-

                                  PART II
                                     
Item 5.  Market for Common Equity and Related Stockholder Matters

As of December 31, 1997, there were 147 shareholders of record of the
Company's common stock.  However, the Company believes that it has a
significantly higher number of shareholders because of the number of shares
that are held by nominees.

The Company's common stock is traded in the over-the-counter market and
quoted on the National Association of Securities Dealers Automated
Quotation System - National Market System ("Nasdaq").  Its trading symbol
is "ROCK".  The following table sets forth the high and low sales prices
per share for the Company's common stock for each quarter of 1997 and 1996:

            1997                         High            Low
            Fourth Quarter            $  25 1/2        $ 17 3/4
            Third Quarter                28              20 3/4
            Second Quarter               25 1/2          18 7/8
            First Quarter                26 3/4          18 1/4

            1996
            Fourth Quarter             $ 26 1/4        $ 21
            Third Quarter                23 1/4          16 1/2
            Second Quarter               22              15
            First Quarter                15 3/4          12 1/8

The Company has never paid cash dividends on its common stock and it is
currently the Company's policy to invest earnings in the future development
and growth of the Company.

                     -11-

Item 6.  Selected Financial Data

         (in thousands, except per share data)
                                                                        
                                               Year Ended December 31,
                                                            
                                  1997       1996       1995       1994       1993
                                                                          
Net Sales                      $ 449,700  $ 342,974  $ 282,833  $ 200,142  $ 167,883
Income from operations            32,603     30,617     20,368     16,179     12,934
Interest expense                   5,115      3,827      3,984      1,374      1,621
Income before income taxes        27,488     26,790     16,384     14,805     11,513
Income taxes                      11,072     10,815      6,662      5,996      6,300
Net income                        16,416     15,975      9,722      8,809      5,213
                                                                           
Net income per share-Basic     $    1.33  $    1.42  $     .96  $     .87
Weighted average shares
  outstanding                     12,357     11,261     10,164     10,163
Net income per share-Diluted   $    1.30  $    1.39  $     .95  $     .86
                                                                          
Pro forma net income (a)                                                   $   7,337
Pro forma net income per share-
  Basic & Diluted                                                          $     .72
Pro forma weighted average
  shares outstanding (b)                                                      10,163
                                                                          
Current assets                 $ 130,746  $ 109,526  $  86,995  $  70,552  $  50,502
Current liabilities               43,101     40,853     29,480     22,028     21,905
Total assets                     281,336    222,507    167,423    126,380     92,868
Total debt                        83,024     49,841     59,054     38,658     14,179
Shareholders' equity             140,044    121,744     70,244     60,396     51,587
                                                                          
Capital expenditures           $  21,784  $  15,477  $  14,504  $  16,171  $  10,468
Depreciation and amortization      8,478      6,246      4,538      3,445      3,399
                                                                          
 
(a) Pro forma net income assumes that all of the Company's subsidiaries had
     been subject to income taxation as C Corporations during the period
     prior to the Company's initial public offering in November 1993.
                                                                         
(b) Pro forma weighted average number of common shares was computed assuming
     the Company's initial public offering occurred at the beginning of the
     year.
-12- Item 7. Management's Discussion and Analysis of Financial Condition and Results of Operations Results of Operations Year Ended 1997 Compared to Year Ended 1996 Net sales increased by $106.7 million, or 31%, to a record $449.7 million in 1997 from $343.0 million in 1996. This increase primarily resulted from the inclusion of net sales of SEMCO (acquired January 1997) and sales growth at existing operations. Cost of sales increased $93.8 million, or 33%, to $375.5 million in 1997 from $281.7 million in 1996. Cost of sales increased to 83.5% of net sales in 1997 from 82.1% of net sales in 1996. This increase was due to higher raw material costs which were not fully passed through to customers, partially offset by higher margins on SEMCO sales. Selling, general and administrative expense increased by $10.9 million, or 36%, to $41.6 million in 1997 from $30.6 million in 1996. As a percentage of net sales, selling, general and administrative expenses increased from 8.9% in 1996 to 9.2% in 1997. This increase was primarily due to higher costs as a percentage of sales attributable to SEMCO. Interest expense increased by $1.3 million from 1996 to 1997 primarily due to higher average borrowings as a result of the SEMCO acquisition and capital expenditures. As a result of the above, income before taxes increased by $.7 million, or 3%, to a record $27.5 million in 1997 from $26.8 million in 1996. Income taxes approximated $11.1 million in 1997, an effective rate of 40.3% in comparison with 40.4% in 1996. Year Ended 1996 Compared to Year Ended 1995 Net sales increased by $60.1 million, or 21%, to $343.0 million in 1996 from $282.8 million in 1995. This increase primarily resulted from including twelve months of net sales of Hubbell Steel (acquired April 1995) for 1996 compared to nine months in 1995, including net sales of CCHT (acquired February 14, 1996) and sales growth at existing operations. Cost of sales increased by $41.3 million, or 17%, to $281.7 million in 1996 from $240.3 million in 1995. As a percentage of net sales, cost of sales decreased to 82% of net sales from 85%. This decrease was primarily due to higher margins attributable to CCHT sales and lower raw material costs at other operations. Selling, general and administrative expense increased by $8.5 million, or 39%, to $30.6 million in 1996 from $22.1 million in 1995. As a percentage of net sales, selling, general and administrative expense increased to 8.9% from 7.8% in 1995 primarily due to higher costs as a percentage of sales attributable to CCHT and performance based compensation linked to the Company's sales and profitability. -13- Interest expense decreased by $.2 million primarily due to lower interest rates in 1996 compared to 1995 which were partially offset by higher average borrowings resulting from higher inventory levels to service increased sales and capital expenditures. As a result of the above, income before taxes increased by $10.4 million, or 64%, to $26.8 million in 1996 from $16.4 million in 1995. Income taxes approximated $10.8 million in 1996, an effective rate of 40.4% in comparison with 40.7% for 1995. Liquidity and Capital Resources During 1997, the Company increased working capital by $19 million to $87.6 million and the current ratio improved to 3.0 to 1 versus 2.7 to 1 at December 31, 1996. Long term debt increased by $33.2 million to $81.8 million and to 37% of total capitalization. Additionally, shareholders' equity increased by 15% to $140 million at December 31, 1997. The Company's principal capital requirements are to fund its operations including working capital requirements, the purchase and funding of improvements to its facilities, machinery and equipment and to fund acquisitions. Net cash provided by operations of $24.4 million resulted primarily from net income of $16.4 million, depreciation and amortization of $8.5 million and provision for deferred income taxes of $2.2 million offset by the decrease in accounts payable and accrued expenses of $2.6 million. Net cash provided by operations of $24.4 million combined with net proceeds from long-term debt of $18.5 million and $3.1 million of cash on hand were used for the acquisition of SEMCO and capital expenditures. The most significant capital expenditure included the construction and installation of a new cold rolling mill at the Cleveland, Ohio facility. During 1997, the Company amended its revolving credit agreement with its bank group to increase the capacity of the revolver to $185 million and borrow on an unsecured basis. At December 31, 1997, $107.6 million of the revolver was unused. The Company believes that availability under its credit facility, together with funds generated from operations, will be more than sufficient to provide the Company with the liquidity and capital resources necessary to fund its anticipated working capital requirements, acquisitions and capital expenditure commitments for the next twelve months. The Company believes that environmental issues will not require the expenditure of material amounts for environmental compliance in the future. Safe Harbor Statement The Company wishes to take advantage of the Safe Harbor provisions included in the Private Securities Litigation Reform Act of 1995 (the "Act"). Statements by the Company, other than historical information, constitute "forward looking statements" within the meaning of the Act and may be subject to a number of risk factors. Factors that could affect these statements include, but are not limited to, the following: the impact of changing steel prices on the Company's results of operations; changing demand for the company's products and services; and changes in interest or tax rates. -14- Company Responsibility For Financial Statements The accompanying consolidated financial statements of Gibraltar Steel Corporation have been prepared by management, which is responsible for their integrity and objectivity. The statements have been prepared in conformity with generally accepted accounting principles and include amounts based on management's best estimates and judgments. Financial information elsewhere in this Annual Report is consistent with that in the consolidated financial statements. The Company has established and maintains a system of internal control designed to provide reasonable assurance that assets are safeguarded and that the financial records reflect the authorized transactions of the Company. The financial statements have been audited by Price Waterhouse LLP, independent accountants. As part of their audit of the Company's 1997 financial statements, Price Waterhouse LLP considered the Company's system of internal control to the extent they deemed necessary to determine the nature, timing and extent of their audit tests. The Board of Directors pursues its responsibility for the Company's financial reporting through its Audit Committee, which is composed entirely of outside directors. The independent accountants have direct access to the Audit Committee, with and without the presence of management representatives, to discuss the results of their audit work and their comments on the adequacy of internal accounting controls and the quality of financial reporting. Brian J. Lipke Chairman of the Board and Chief Executive Officer Walter T. Erazmus Executive Vice President and Chief Financial Officer -15- Item 8. Financial Statements and Supplementary Data Page Number Index to Financial Statements: Financial Statements: Report of Independent Accountants 17 Consolidated Balance Sheet at December 31, 1997 and 1996 18 Consolidated Statement of Income for the three years ended December 31, 1997 19 Consolidated Statement of Cash Flows for the three years ended December 31, 1997 20 Consolidated Statement of Shareholders' Equity for the three years ended December 31, 1997 21 Notes to Consolidated Financial Statements 22 Supplementary Data: Quarterly Unaudited Financial Data 32 -16- Report of Independent Accountants To the Board of Directors and Shareholders of Gibraltar Steel Corporation In our opinion, the consolidated financial statements listed in the accompanying index present fairly, in all material respects, the financial position of Gibraltar Steel Corporation and its subsidiaries at December 31, 1997 and 1996, and the results of their operations and their cash flows for each of the three years in the period ended December 31, 1997, in conformity with generally accepted accounting principles. These financial statements are the responsibility of the Company's management; our responsibility is to express an opinion on these financial statements based on our audits. We conducted our audits of these statements in accordance with generally accepted auditing standards which require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements, assessing the accounting principles used and significant estimates made by management, and evaluating the overall financial statement presentation. We believe that our audits provide a reasonable basis for the opinion expressed above. Price Waterhouse LLP Buffalo, New York January 19, 1998 -17- GIBRALTAR STEEL CORPORATION CONSOLIDATED BALANCE SHEET (in thousands, except share and per share data)
December 31, ASSETS 1997 1996 Current assets: Cash and cash equivalents $ 2,437 $ 5,545 Accounts receivable 49,151 40,106 Inventories 76,701 62,351 Other current assets 2,457 1,524 ------- ------- Total current assets 130,746 109,526 Property, plant and equipment, net 115,402 88,670 Other assets 35,188 24,311 ------- ------- $ 281,336 $ 222,507 ======= ======= LIABILITIES AND SHAREHOLDERS' EQUITY Current liabilities: Accounts payable $ 38,233 $ 35,397 Accrued expenses 3,644 4,238 Current maturities of long-term debt 1,224 1,218 ------- ------- Total current liabilities 43,101 40,853 Long-term debt 81,800 48,623 Deferred income taxes 15,094 10,364 Other non-current liabilities 1,297 923 Shareholders' equity Preferred shares, $.01 par value; authorized: 10,000,000 shares; none outstanding - - Common shares, $.01 par value; authorized: 50,000,000 shares; issued and outstanding: 12,409,619 shares in 1997 and 12,322,400 in 1996 124 123 Additional paid-in capital 66,190 64,307 Retained earnings 73,730 57,314 ------- ------- Total shareholders' equity 140,044 121,744 ------- ------- $ 281,336 $ 222,507 ======= =======
The accompanying notes are an integral part of these financial statements. -18- GIBRALTAR STEEL CORPORATION CONSOLIDATED STATEMENT OF INCOME (in thousands, except per share data)
Year Ended December 31, 1997 1996 1995 Net sales $ 449,700 $ 342,974 $ 282,833 Cost of sales 375,537 281,717 240,370 ------- ------- ------- Gross profit 74,163 61,257 42,463 Selling, general and administrative expense 41,560 30,640 22,095 ------- ------- ------- Income from operations 32,603 30,617 20,368 Interest expense 5,115 3,827 3,984 ------- ------- ------- Income before taxes 27,488 26,790 16,384 Provision for income taxes 11,072 10,815 6,662 ------- ------- ------- Net income $ 16,416 $ 15,975 $ 9,722 ======= ======= ======= Net income per share - Basic $ 1.33 $ 1.42 $ .96 ======= ======= ======= Weighted average shares outstanding - Basic 12,357 11,261 10,164 ======= ======= ======= Net income per share - Diluted $ 1.30 $ 1.39 $ .95 ======= ======= ======= Weighted average shares outstanding - Diluted 12,591 11,464 10,213 ======= ======= =======
The accompanying notes are an integral part of these financial statements. -19- GIBRALTAR STEEL CORPORATION CONSOLIDATED STATEMENT OF CASH FLOWS (in thousands)
Year Ended December 31, 1997 1996 1995 CASH FLOWS FROM OPERATING ACTIVITIES Net income $ 16,416 $ 15,975 $ 9,722 Adjustments to reconcile net income income to net cash provided by (used in) operating activities: Depreciation and amortization 8,478 6,246 4,538 Provision for deferred income taxes 2,227 774 218 Undistributed equity investment income (444) (528) (366) Gain on disposition of property and equipment (68) (4) (146) Increase (decrease) in cash resulting from changes in (net of effects from acquisitions): Accounts receivable (176) (1,225) 838 Inventories 1,607 (17,077) 17,979 Other current assets (726) 411 (503) Accounts payable and accrued expenses (2,597) 9,275 3,390 Other assets (289) (244) 70 -------- -------- -------- Net cash provided by operating activities 24,428 13,603 35,740 -------- -------- -------- CASH FLOWS FROM INVESTING ACTIVITIES Acquisitions, net of cash acquired (26,475) (23,715) (20,859) Investments in property, plant and equipment (21,784) (15,477) (14,504) Proceeds from sale of property and equipment 1,118 775 317 -------- -------- -------- Net cash used in investing activities (47,141) (38,417) (35,046) -------- -------- -------- CASH FLOWS FROM FINANCING ACTIVITIES Long-term debt reduction (79,962) (78,195) (64,527) Proceeds from long-term debt 98,417 68,906 66,832 Net proceeds from issuance of common stock 1,150 35,525 - -------- -------- -------- Net cash provided by financing activities 19,605 26,236 2,305 -------- -------- -------- Net (decrease) increase in cash and and cash equivalents (3,108) 1,422 2,999 Cash and cash equivalents at beginning of year 5,545 4,123 1,124 -------- -------- -------- Cash and cash equivalents at end of year $ 2,437 $ 5,545 $ 4,123 ======== ======== ========
The accompanying notes are an integral part of these financial statements. -20- GIBRALTAR STEEL CORPORATION CONSOLIDATED STATEMENT OF SHAREHOLDERS' EQUITY (in thousands)
Additional Common Shares Paid-in Retained Shares Amount Capital Earnings Balance at December 31, 1994 10,163 $ 102 $ 28,677 $ 31,617 Net income - - - 9,722 Profit sharing plan contribution 11 - 126 - ------ ------ ------- ------- Balance at December 31, 1995 10,174 102 28,803 41,339 Net income - - - 15,975 Public offering 2,050 20 34,370 - Profit sharing plan contribution 11 - 184 - Stock options exercised 87 1 950 - ------ ------ ------- ------- Balance at December 31, 1996 12,322 123 64,307 57,314 Net income - - - 16,416 Stock options exercised and related tax benefit 73 1 1,562 - Stock awards 4 - 82 - Profit sharing plan contribution 11 - 239 ------ ------ ------- ------- Balance at December 31, 1997 12,410 $ 124 $ 66,190 $ 73,730 ====== ====== ======= =======
The accompanying notes are an integral part of these financial statements. -21- GIBRALTAR STEEL CORPORATION NOTES TO CONSOLIDATED FINANCIAL STATEMENTS 1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES Principles of Consolidation The consolidated financial statements include the accounts of Gibraltar Steel Corporation and subsidiaries (the Company). Significant intercompany accounts and transactions have been eliminated. Use of Estimates The preparation of financial statements in conformity with generally accepted accounting principles requires management to make estimates and assumptions that affect the amounts reported in the financial statements and accompanying notes. Actual results could differ from those estimates. Cash and Cash Equivalents Cash and cash equivalents include cash on hand, checking accounts and all highly liquid investments with a maturity of three months or less. Inventories Inventories are valued at the lower of cost or market. Cost is determined using the first-in, first-out method. Property, Plant and Equipment Property, plant and equipment are stated at cost and depreciated over their estimated useful lives using the straight-line method. Accelerated methods are used for income tax purposes. Interest is capitalized in connection with construction of qualified assets. Under this policy, interest of $963,000, $522,000 and $683,000 was capitalized in 1997, 1996 and 1995, respectively. Other Assets Goodwill is amortized over 35 years. Amortization expense was $880,000, $557,000 and $218,000 in 1997, 1996, and 1995, respectively. -22- Shareholders' Equity In both July 1997 and 1996, the Company issued 11,000 of its common shares as a contribution to one of its profit sharing plans. Interest Rate Exchange Agreements Interest rate swap agreements, which are used by the Company in the management of interest rate risk, are accounted for on an accrual basis. Amounts to be paid or received under interest rate swap agreements are recognized as interest expense or income in the periods in which they accrue. Swaps are not used for trading purposes. Income Taxes The financial statements of the Company have been prepared using the asset and liability approach in accounting for income taxes which requires the recognition of deferred tax assets and liabilities for the expected future tax consequences of temporary differences between the carrying amounts and the tax bases of other assets and liabilities. Earnings Per Share Basic net income per share equals net income divided by the weighted average shares outstanding during the year. The computation of diluted net income per share includes all dilutive common stock equivalents in the weighted average shares outstanding. 2. ACQUISITIONS On January 31, 1997, the Company acquired the stock of Southeastern Metals Manufacturing Company, Inc. (SEMCO) for approximately $25 million in cash. In addition, the Company repaid approximately $15 million of SEMCO's bank indebtedness. SEMCO manufactures a wide array of metal products for the residential and commercial construction markets. On February 14, 1996, the Company acquired the stock of Carolina Commercial Heat Treating, Inc. (CCHT) for approximately $25 million in cash. CCHT, headquartered in Charlotte, North Carolina, provides heat treating, brazing and related metal-processing services to a broad range of industries, including the automotive, hand tools, construction equipment and industrial machinery industries. These acquisitions have been accounted for using purchase accounting with SEMCO's and CCHT's results of operations included from the respective acquisition dates. The purchase price exceeded the fair market value of the net assets by approximately $11 million each for both SEMCO and CCHT. -23- The following pro forma information presents the condensed results of operations of the Company as if the acquisitions had occurred at the beginning of each period presented. The pro forma amounts may not be indicative of the results that would have actually been achieved and are not necessarily indicative of future results. (in thousands, except per share data) Year Ended December 31, 1997 1996 (unaudited) Net sales $ 456,224 $ 434,928 ======= ======= Income before taxes $ 27,198 $ 28,067 ====== ====== Net income $ 16,234 $ 16,600 ====== ====== Net income per share $ 1.31 $ 1.47 ====== ====== 3. ACCOUNTS RECEIVABLE Accounts receivable are expected to be collected within one year and are net of reserves for doubtful accounts of $990,000 and $698,000 at December 31, 1997 and 1996, respectively. 4. INVENTORIES Inventories at December 31 consist of the following: (in thousands) 1997 1996 Raw material $ 51,804 $ 45,258 Finished goods and work-in-process 24,897 17,093 ------ ------ Total inventories $ 76,701 $ 62,351 ====== ====== -24- 5. PROPERTY, PLANT AND EQUIPMENT Property, plant and equipment, at cost less accumulated depreciation, at December 31 consists of the following: (in thousands) 1997 1996 Land and land improvements $ 2,984 $ 2,978 Building and improvements 32,420 29,145 Machinery and equipment 99,737 78,018 Construction in progress 16,503 7,894 -------- -------- 151,644 118,035 Less accumulated depreciation and amortization 36,242 29,365 -------- -------- Property, plant and equipment, net $ 115,402 $ 88,670 ======== ======== 6. OTHER ASSETS Other assets at December 31 consist of the following: (in thousands) 1997 1996 Goodwill, net $ 30,275 $ 20,199 Equity interest in partnership 3,736 3,292 Other 1,177 820 ------ ------ Total other assets $ 35,188 $ 24,311 ====== ====== The Company's 26% partnership interest is accounted for using the equity method of accounting. The partnership provides a steel cleaning process called pickling to steel mills and steel processors, including the Company. -25- 7. DEBT Long-term debt at December 31 consists of the following: (in thousands) 1997 1996 Revolving credit notes payable $ 77,400 $ 43,000 Industrial Development Revenue Bond 5,048 6,190 Other debt 576 651 ------ ------ 83,024 49,841 Less current maturities 1,224 1,218 ------ ------ Total long-term debt $ 81,800 $ 48,623 ====== ====== In September 1997, the Company amended its debt agreement increasing its revolving credit facility to $185,000,000. The facility is unsecured and is committed through September 2002. This facility has various interest rate options which are no greater than the bank's prime rate. In addition, the Company may enter into interest rate exchange agreements (swaps) to manage interest costs and exposure to changing interest rates. At December 31, 1997 the Company had three interest rate swap agreements outstanding that effectively converted $55,000,000 of floating rate debt to fixed rates ranging from 6.39% to 6.78% which terminate at different dates beginning November 2000. At December 31, 1997, additional borrowings consisted of $22,400,000 with an interest rate of LIBOR plus a fixed rate. The weighted average interest rate of these borrowings was 6.78% at December 31, 1997. In addition, the Company has an Industrial Development Revenue Bond payable in equal installments through May 2002, with an interest rate of LIBOR plus a fixed rate (6.57% at December 31, 1997), which financed the cost of its Tennessee expansion under a capital lease agreement. The cost of the facility and equipment equal the amount of the bond and includes accumulated amortization of $1,015,000. The agreement provides for the purchase of the facility and equipment at any time during the term of the lease at scheduled amounts or at the end of the lease for a nominal amount. The aggregate maturities on long-term debt including lease purchase obligations for the five years following December 31, 1997 are as follows: 1998, $1,224,000; 1999, $1,306,000; 2000, $1,158,000; 2001, $1,159,000 and 2002, $78,177,000. The Company had no amounts outstanding under short-term borrowing for the years ended December 31, 1997 and 1996. The various loan agreements, which do not require compensating balances, contain provisions that limit additional borrowings and require maintenance of minimum net worth and financial ratios. The Company is in compliance with the terms and provisions of all its financing agreements. -26- Total cash paid for interest in the years ended December 31, 1997, 1996 and 1995 was $6,155,000, $4,701,000 and $4,715,000, respectively. 8. LEASES The Company leases certain facilities and equipment under operating leases. Rent expense under operating leases for the years ended December 31, 1997, 1996 and 1995 was $3,771,000, $2,358,000 and $1,693,000, respectively. Future minimum lease payments under these operating leases are $2,509,000, $1,668,000, $1,464,000, $1,404,000 and $1,308,000 for the years 1998, 1999, 2000, 2001 and 2002, respectively, and $6,167,000 thereafter through 2038. 9. EMPLOYEE RETIREMENT PLANS Non-union employees participate in various profit sharing plans. Contributions to these plans are funded annually and are based on a percentage of pretax income or amounts determined by the Board of Directors. Certain subsidiaries have multi-employer non-contributory retirement plans providing for defined contributions to union retirement funds. A supplemental pension plan provides defined pension benefits to certain salaried employees upon retirement. Net unfunded periodic pension costs of $154,000 and $106,000 were accrued under this plan in 1997 and 1996, respectively, and consisted primarily of service cost using a discount rate of 7.0% and 7.5%, respectively. Total expense for all plans was $1,258,000, $1,066,000 and $637,000 for the years ended December 31, 1997, 1996 and 1995, respectively. 10. OTHER POST-RETIREMENT BENEFITS Certain subsidiaries of the Company provide health and life insurance to substantially all of their employees and to a number of retirees and their spouses. The net periodic post-retirement benefit cost charged to expense consisting of service cost, interest cost and amortization of transition obligations was $223,000, $237,000 and $207,000 for 1997, 1996 and 1995, respectively. -27- The approximate unfunded accumulated post-retirement benefit obligation at December 31, consists of the following: (in thousands) 1997 1996 Retirees $ 482 $ 468 Other fully eligible participants 308 200 Other active participants 1,018 943 ----- ----- $ 1,808 $ 1,611 ===== ===== The accumulated post-retirement benefit obligation was determined using a weighted average discount rate of 7.0% in 1997 and 7.5% in 1996. The medical inflation rate was assumed to be 8% in 1997, with a gradual reduction to 5% over three years. The effect of a 1% annual increase in the medical inflation rate would increase the accumulated post-retirement benefit obligation by approximately $305,000 and $286,000 and the annual service and interest costs by approximately $35,000 and $37,000 for 1997 and 1996, respectively. One of the Company's subsidiaries also provides post-retirement health care benefits to its unionized employees through contributions to a multi- employer health care plan. 11. INCOME TAXES The provision for income taxes consists of the following: (in thousands) 1997 1996 1995 Current tax expense Federal $ 7,514 $ 8,774 $ 5,611 State 1,331 1,267 833 ------ ------ ------ Total current 8,845 10,041 6,444 ------ ------ ------ Deferred tax expense Federal 2,036 670 198 State 191 104 20 Total deferred 2,227 774 218 ------ ----- ----- Total provision $ 11,072 $ 10,815 $ 6,662 ====== ====== ===== -28- Deferred tax liabilities (assets) at December 31, consist of the following: (in thousands) 1997 1996 Depreciation $ 14,129 $ 9,026 Inventory method change 1,588 1,752 Other 1,371 1,034 ------- ------- Gross deferred tax liabilities 17,088 11,812 ------- ------- State taxes (656) (528) Other (2,074) (1,187) ------- ------- Gross deferred tax assets (2,730) (1,715) ------- ------- Net deferred tax liabilities $ 14,358 $ 10,097 ======= ======= The provision for income taxes differs from the amount of income tax determined by applying the applicable U.S. statutory federal income tax rate to pretax income from continuing operations as a result of the following differences: (in thousands) 1997 1996 1995 Statutory U.S. tax rates $ 9,621 $ 9,376 $ 5,734 Increase in rates resulting from: State and local taxes, net 989 891 554 Other 462 548 374 ------ ------ ------ $ 11,072 $ 10,815 $ 6,662 ====== ====== ====== Total cash paid for income taxes in the years ended December 31, 1997, 1996 and 1995 was $9,100,000, $9,639,000 and $6,250,000, respectively. -29- 12. EARNINGS PER SHARE Financial Accounting Standards Board (FASB) Statement No. 128 "Earnings Per Share" requires dual presentation of basic and diluted earnings per share on the face of the income statement. The reconciliation between the computations is as follows: Basic Diluted Diluted Income Shares Basic EPS Shares EPS 1997 $ 16,416,000 12,357,186 $ 1.33 12,591,019 $ 1.30 1996 $ 15,975,000 11,260,956 $ 1.42 11,463,508 $ 1.39 1995 $ 9,722,000 10,163,187 $ .96 10,213,329 $ .95 Included in diluted shares are common stock equivalents relating to options of 233,833, 202,552, and 49,512 for 1997, 1996 and 1995, respectively. 13. STOCK OPTIONS The Company may grant non-qualified stock options to officers, employees, non-employee directors and advisers at an exercise price equal to 100% of market price and incentive share options to officers and other key employees at an exercise price not less than 100% of market price up to an aggregate of 400,000 and 850,000 shares, respectively. The options may be exercised in cumulative annual increments of 25% commencing one year from the date of grant and expire ten years from the date of grant. The following table summarizes the option plans' activity for the years ended December 31:
Options Weighted-Average Options Weighted-Average Outstanding Exercise Price Exercisable Exercise Price Balance at January 1, 1995 397,500 $ 10.74 Granted 75,000 11.00 Forfeited (2,500) 10.00 --------- Balance at December 31, 1995 470,000 $ 10.78 171,875 $ 10.85 Granted 173,750 16.75 Exercised (87,500) 10.87 --------- Balance at December 31, 1996 556,250 $ 12.63 201,875 $ 10.80 Granted 220,450 21.75 Exercised (72,219) 11.49 Forfeited (11,250) 10.75 --------- Balance at December 31, 1997 693,231 $ 15.68 282,781 $ 11.55 =========
The Company realized tax benefits of $733,000 associated with the exercise of certain stock options which has been credited to paid in capital. -30- Options outstanding at December 31, 1997 consisted of:
Range of Weighted-Average Exercise Options Remaining Weighted-Average Options Weighted-Average Prices Outstanding Contractual Life Exercise Price Exercisable Exercise Price $10 - $11 309,189 6.4 years $ 10.79 248,564 $ 10.83 $16.75 - $21.75 384,042 9.1 years $ 19.62 34,217 $ 16.75 ------- ------- 693,231 7.9 years $ 15.68 282,781 $ 11.55 ======= =======
The Company has adopted the disclosure-only provisions of FASB No. 123 "Accounting for Stock-Based Compensation". Accordingly, no compensation cost has been recognized for the option plans as stock options granted under these plans have an exercise price equal to 100% of the market price on the date of grant. If the compensation cost for these plans had been determined based on the fair value at the grant dates for awards consistent with the method of FASB No. 123, there would have been no effect on the Company's net income and earnings per share in 1995. The pro forma effect for 1996 and 1997 is as follows: As Reported Pro forma As Reported Pro forma 1997 1997 1996 1996 Net Income $ 16,416,000 $ 16,108,000 $ 15,975,000 $ 15,890,000 Net Income per Share $ 1.33 $ 1.30 $ 1.42 $ 1.41 The Black-Scholes option-pricing model was used to estimate the fair value of the options granted on the date of grant. The fair values and assumptions used in the model, assuming no dividends, are as follows: Expected Risk-Free Fair Value Life Volatility Interest Rate 1997 Grant $9.77 5 years 40.19% 6.14% 1996 Grant $7.44 5 years 38.07% 6.64% 1995 Grant $4.56 5 years 36.16% 5.70% The Company also has a Restricted Stock Plan reserved for issuance of 100,000 common shares for the grant of restricted stock awards to employees and non-employee directors at a purchase price of $.01 per share. In December 1997, 4,000 shares were awarded to non-employee directors under this plan. 14. COMMITMENTS AND CONTINGENCIES The Company is a party to certain claims and legal actions generally incidental to its business. Management does not believe that the outcome of these actions, which is not clearly determinable at the present time, would significantly affect the Company's financial condition or results of operations. -31- QUARTERLY UNAUDITED FINANCIAL DATA (in thousands, except per share data) 1997 Quarter Ended March 31 June 30 Sept. 30 Dec. 31 Net Sales $ 108,277 $ 119,213 $ 114,249 $ 107,961 Gross Profit 18,698 19,917 18,147 17,401 Net Income 4,446 4,697 3,787 3,486 Net Income Per Share-Basic $ .36 $ .38 $ .31 $ .28 Net Income Per Share-Diluted $ .35 $ .37 $ .30 $ .28 1996 Quarter Ended March 31 June 30 Sept. 30 Dec. 31 Net Sales $ 82,034 $ 86,476 $ 87,994 $ 86,470 Gross Profit 14,029 15,867 15,979 15,382 Net Income 3,334 4,155 4,414 4,072 Net Income Per Share-Basic $ .33 $ .40 $ .36 $ .33 Net Income Per Share-Diluted $ .32 $ .40 $ .35 $ .32 -32- Item 9. Changes in and Disagreements with Accountants on Accounting and Financial Disclosure None. PART III Item 10. Directors and Executive Officers of the Registrant Information regarding directors and executive officers of the Company is incorporated herein by reference to the information included in the Company's definitive proxy statement which will be filed with the Commission within 120 days after the end of the Company's 1997 fiscal year. Item 11. Executive Compensation Information regarding executive compensation is incorporated herein by reference to the information included in the Company's definitive proxy statement which will be filed with the Commission within 120 days after the end of the Company's 1997 fiscal year. Item 12. Security Ownership of Certain Beneficial Owners and Management Information regarding security ownership of certain beneficial owners and management is incorporated herein by reference to the information included in the Company's definitive proxy statement which will be filed with the Commission within 120 days after the end of the Company's 1997 fiscal year. Item 13. Certain Relationships and Related Transactions Information regarding certain relationships and related transactions is incorporated herein by reference to the information included in the Company's definitive proxy statement which will be filed with the Commission within 120 days after the end of the company's 1997 fiscal year. -33- PART IV Item 14. Exhibits, Financial Statement Schedules and Reports on Form 8-K Page Number (a) (1) Financial Statements: Report of Independent Accountants 17 Consolidated Balance Sheet at December 31, 1997 and 1996 18 Consolidated Statement of Income for the three years ended December 31, 1997 19 Consolidated Statement of Cash Flows for the three years ended December 31, 1997 20 Consolidated Statement of Shareholders' Equity for the three years ended December 31, 1997 21 Notes to Consolidated Financial Statements 22 (2) Supplementary Data Quarterly Unaudited Financial Data 32 (3) Exhibits The exhibits to this Annual Report on Form 10-K included herein are set forth on the attached Exhibit Index beginning on page 36. (b) Reports on Form 8-K No reports on Form 8-K were filed by the Company during the three month period ended December 31, 1997. -34- SIGNATURES Pursuant to the requirement of Section 13 or 15(d) of the Securities Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized. GIBRALTAR STEEL CORPORATION By /s/Brian J. Lipke Brian J. Lipke President, Chief Executive Officer and Chairman of the Board In accordance with the Securities Exchange Act of 1934, this report has been signed below by the following persons on behalf of the Registrant and in the capacities and on the dates indicated. /s/ Brian J. Lipke February 3, 1998 Brian J. Lipke President, Chief Executive Officer and Chairman of the Board (principal executive officer) /s/ Walter T. Erazmus February 3, 1998 Walter T. Erazmus Treasurer and Chief Financial Officer (principal financial and accounting officer) /s/ Neil E. Lipke February 3, 1998 Neil E. Lipke Director /s/ Gerald S. Lippes February 3, 1998 Gerald S. Lippes Director /s/ Arthur A. Russ, Jr. February 3, 1998 Arthur A. Russ, Jr. Director /s/ David N. Campbell February 3, 1998 David N. Campbell Director /s/ William P. Montague February 3, 1998 William P. Montague Director -35- Exhibit Index Exhibit Sequentially Number Exhibit Numbered Page 3.1 Certificate of Incorporation of Registrant (incorporated by reference to the same exhibit number to the Company's Registration Statement on Form S-1 (Registration No. 33-69304)) 3.2 By-Laws of the Registrant (incorporated by reference to the same exhibit number to the Company's Registration Statement on Form S-1 (Registration No. 33-69304)) 4.1 Specimen Common Share Certificate (incorporated by reference to the same exhibit number to the Company's Registration Statement on Form S-1 (Registration No. 33-69304)) 10.1 Partnership Agreement of Samuel Pickling Management Company dated June 1, 1988 between Cleveland Pickling, Inc. and Samuel Manu-Tech, Inc. (incorporated by reference to Exhibit 10.7 to the Company's Registration Statement on Form S-1 (Registration No. 33-69304)) 10.2 Partnership Agreement dated May 1988 among Samuel Pickling Management Company, Universal Steel Co. and Ruscon Steel Corp., creating Samuel Steel Pickling Company, a general partnership (incorporated by reference to Exhibit 10.8 to the Company's Registration Statement on Form S-1 (Registration No. 33-69304)) 10.3 Lease dated December 1, 1987 between American Steel and Wire Corporation as Lessor and Gibraltar Strip Steel, Inc., as Lessee, and related Service Agreement as amended by an Amendment to Lease and Amendment to Service Agreement dated February 1, 1992 (incorporated by reference to Exhibit 10.11 to the Company's Registration Statement on Form S-1 (Registration No. 33-69304)) 10.4 Lease dated September 1, 1990 between Erie County Industrial Development Agency and Integrated Technologies International, Ltd.(incorporated by reference to Exhibit 10.13 to the Company's Registration Statement on Form S-1(Registration No. 33-69304)) 10.5 Lease dated June 4, 1993 between Buffalo Crushed Stone, Inc. and Gibraltar Steel Corporation (incorporated by reference to Exhibit 10.14 to the Company's Registration Statement on Form S-1 (Registration No. 33-69304)) -36- Exhibit Sequentially Number Exhibit Numbered Page 10.6* Employment Agreement dated as of November 1, 1993 between the Registrant and Brian J. Lipke (incorporated by reference to Exhibit 10.15 to the Company's Registration Statement on Form S-1 (Registration No. 33-69304)) 10.7 Gibraltar Steel Corporation Executive Incentive Bonus Plan (incorporated by reference to Exhibit 10.16 to the Company's Registration Statement on Form S-1(Registration No. 33-69304)) 10.8 Agreement dated June 29, 1992 for Adoption by Gibraltar Steel Corporation of Chase Lincoln First Bank, N.A. (now Chase Manhattan Bank, N.A.) Non-Standardized Prototype 401(k) Retirement Savings Plan (incorporated by reference to Exhibit 10.17 to the Company's Registration Statement on Form S-1(Registration No. 33-69304)) 10.9* Gibraltar Steel Corporation Incentive Stock Option Plan (incorporated by reference to Exhibit 10.18 to the Company's Registration Statement on Form S-1 (Registration No. 33-69304)) 10.10* Gibraltar Steel Corporation Incentive Stock Option Plan, Second Amendment and Restatement (incorporated by reference to Exhibit 10.16 to the Company's Registration Statement on Form S-1 (Registration No. 333-03979)) 10.11* Gibraltar Steel Corporation Incentive Stock Option Plan, Third Amendment and Restatement 41 10.12* Gibraltar Steel Corporation Restricted Stock Plan (incorporated by reference to Exhibit 10.19 to the Company's Registration Statement on Form S-1 (Registration No. 33-69304)) 10.13* Gibraltar Steel Corporation Restricted Stock Plan, First Amendment and Restatement 55 10.14* Gibraltar Steel Corporation Non-Qualified Stock Option Plan (incorporated by reference to Exhibit 10.20 to the Company's Registration Statement on Form S-1(Registration No. 33-69304)) 10.15* Gibraltar Steel Corporation Non-Qualified Stock Option Plan, First Amendment and Restatement (incorporated by reference to Exhibit 10.17 to the Company's Registration Statement on Form S-1 (Registration No. 333-03979)) 10.16* Gibraltar Steel Corporation Profit Sharing Plan dated August 1, 1984, as Amended April 14, 1986 and May 1, 1987 (incorporated by reference to Exhibit 10.21 to the Company's Registration Statement on Form S-1(Registration No. 33-69304)) -37- Exhibit Sequentially Number Exhibit Numbered Page 10.17 Tax Indemnification Agreement dated as of November 5, 1993 among the Registrant, Brian J. Lipke, Curtis W. Lipke, Neil E. Lipke, Eric R. Lipke, Meredith A. Lipke, Bonneville Trust of December 31, 1987 f/b/o Brian J. Lipke, Corvette Trust of December 31, 1987 f/b/o Curtis W. Lipke, Nova Trust of December 31, 1987 f/b/o Neil E. Lipke, Electra Trust of December 31, 1987 f/b/o/ Eric R. Lipke, Monza Trust of January 22, 1988 f/b/o Meredith A. Lipke, Bonneville Trust No. 2 of August 15, 1988 f/b/o Brian J. Lipke, Corvette Trust No. 2 of August 15, 1988 f/b/o Curtis W. Lipke, Nova Trust No. 2 of August 15, 1988 f/b/o Neil E. Lipke, Electra Trust No. 2 of August 15, 1988 f/b/o Eric R. Lipke, Monza Trust No. 2 of February 15, 1988 f/b/o Meredith A. Lipke (incorporated by reference to Exhibit 10.22 to the Company's Annual Report on Form 10-K for the year ended December 31, 1993) 10.18 Agreement and Plan of Exchange and Reorganization dated October 31, 1993 among the Registrant, Estate of Kenneth E. Lipke, Bonneville Trust of December 31, 1987 f/b/o Brian J. Lipke, Corvette Trust of December 31, 1987 f/b/o Curtis W. Lipke, Nova Trust of December 31, 1987 f/b/o Neil E. Lipke, Electra Trust of December 31, 1987 f/b/o Eric R. Lipke, Monza Trust of January 22, 1988 f/b/o Meredith A. Lipke, Bonneville Trust No. 2 of August 15, 1988 f/b/o Brian J. Lipke, Corvette Trust No. 2 of August 15, 1988 f/b/o Curtis W. Lipke, Nova Trust No. 2 of August 15, 1988 f/b/o Neil E. Lipke, Electra Trust No. 2 of August 15, 1988 f/b/o Eric R. Lipke, Monza Trust No. 2 of February 15, 1988 f/b/o Meredith A. Lipke (incorporated by reference to Exhibit 10.23 to the Company's Annual Report on Form 10-K for the year ended December 31, 1993) 10.19 Credit Agreement dated as of September 15, 1997 among Gibraltar Steel Corporation, Gibraltar Steel Corporation of New York, Chase Manhattan Bank, N.A., as Administrative Agent and various financial institutions that are signatories thereto (incorporated by reference to Exhibit 10.1 to the Company's Quarterly report on Form 10-Q for the quarter ended September 30, 1997) 10.20 Bond Purchase Agreement dated June 16, 1994 among the Industrial Development Board of the County of Hamilton, Tennessee, Fleet Bank of New York and Gibraltar Steel of Tennessee (incorporated by reference to Exhibit 10.10 to the Company's Registration Statement on Form S-1 (Registration No. 333-03979)) -38- Exhibit Sequentially Number Exhibit Numbered Page 10.21* Gibraltar Steel Corporation 401(k) Plan (incorporated by reference to Exhibit 4.1 to the Company's Registration Statement on Form S-8 (No. 33-87034)) 10.22* First Amendment, dated January 20, 1995, to Gibraltar Steel Corporation 40l(k) Plan (incorporated by reference to Exhibit 10.28 to the Company's Annual Report on Form 10-K for the year ended December 31, 1994) 10.23 Stock Purchase Agreement dated as of April 3, 1995 among Gibraltar Steel Corporation of New York, Albert Fruman, Marshall Fruman, Lee Fruman, Dale Fruman and William R. Hubbell Trust U/A dated July 20, 1990 (incorporated by reference to Exhibit 10.1 to the Company's Current Report on Form 8-K dated April 3, 1995) 10.24 Real Property Lease Agreement dated February 14, 1996 between Blacksmith Leasing and Carolina Commercial Heat Treating, Inc. (incorporated by reference to Exhibit 10.25 to the Company's Registration Statement on Form S-1 (Registration No. 333-03979)) 10.25 Real Property Lease Agreement dated February 14, 1996 between Blacksmith Leasing and Carolina Commercial Heat Treating, Inc. (incorporated by reference to Exhibit 10.26 to the Company's Registration Statement on Form S-1 (Registration No. 333-03979)) 10.26 Lease dated as of August 12, 1995 between John W. Rex and Carolina Commercial Heat Treating, Inc. (incorporated by reference to Exhibit 10.27 to the Company's Registration Statement on Form S-1 (Registration No. 333-03979)) 10.27 Purchase Agreement dated as of January 31, 1997 among Gibraltar Steel Corporation of New York, Nadine W. Gramling; Nadine W. Gramling, as Trustee of the Nadine W. Gramling Revocable Trust; D.G. Granger as Trustee of the Donnie L. Gramling, Jr. GRAT; D.G. Granger as Trustee of the Scott Ray Gramling GRAT; D.G. Granger as Trustee of the Tonya Michelle Cogan GRAT; D. G. Granger as Trustee of the Donnie L. Gramling, Jr. GRAT No. 2; D.G. Granger as Trustee of the Scott Ray Gramling GRAT No. 2; D.G. Granger as Trustee of the Tonya Michelle Cogan GRAT No. 2; H. Leon Holbrook, as Trustee of the Donnie L. Gramling, Jr. -39- Exhibit Sequentially Number Exhibit Numbered Page GRAT No. 3; H. Leon Holbrook, as Trustee of the Donnie L. Gramling, Jr. GRAT No. 4; H. Leon Holbrook as Trustee of the Tonya Michelle Cogan GRAT No. 3; H. Leon Holbrook, as Trustee of the Tonya Michelle Cogan GRAT No. 4; H. Leon Holbrook, as Trustee of the Scott Ray Gramling GRAT No. 3; H. Leon Holbrook, as Trustee of the Scott Ray Gramling GRAT No. 4; Donnie L. Gramling, Sr. and Nadine W. Gramling as Tenants by the Entirety; The Employee Stock Ownership Plan and Trust of Southeastern Metals Manufacturing Company, Inc.; Nadine W. Gramling; DNG (1997) Limited Partnership; and DNG (1997) Limited Partnership (incorporated by reference to Exhibit 10.1 to the Company's Current Report on Form 8-K dated January 31, 1997) 21 Subsidiaries of the Registrant 62 27 Financial Data Schedule 63 ________________________________ * Document is a management contract or compensatory plan or arrangement -40-
                  GIBRALTAR STEEL CORPORATION
                           INCENTIVE
                       STOCK OPTION PLAN
                  ___________________________

                Third Amendment and Restatement

                   __________________________


          WHEREAS, Gibraltar Steel Corporation, a Delaware
corporation with offices at 3556 Lake Shore Road, Buffalo, New
York 14219 (the "Company") adopted an incentive stock option plan
known as the "Gibraltar Steel Corporation Incentive Stock Option
Plan (the "Plan") on September 21, 1993 to enable the Company to
attract and retain highly qualified individuals as officers and
key employees of the Company by providing such officers and key
employees an equity based form of incentive compensation; and

          WHEREAS, the Company amended the Plan effective August
9, 1994 to allow members of the Committee of Directors that
administers the Plan to be eligible to receive options under the
terms of other plans which, from time to time, are adopted and
maintained by the Company including, but not limited to, the
Gibraltar Steel Corporation Non-Qualified Stock Option Plan; and

          WHEREAS, the Company amended the Plan effective
February 15, 1996 to increase the total number of shares of
common stock, par value $.01 per share of the Company
(hereinafter the "Common Stock") which may be issued in
connection with options granted pursuant to the terms of the Plan
by Two Hundred Thousand (200,000) shares; and

          WHEREAS, as a result of a change in the provisions of
Rule 16b-3 as issued and in effect under the terms of the
Securities and Exchange Act of 1934 prior to August 1, 1996, the
Company desires  to amend the Plan to allows options granted
under the terms of the Plan, including previously issued options
and options which may be issued in the future pursuant to the
Plan to be transferred by any Executive Officers of the Company
that have been granted such options to the extent that such
options are not "qualified" options because the fair market value
of the common stock of the Company (determined as of the date of
the grant of such options) which can be acquired pursuant to the
exercise of such options (to the extent such options first become
exercisable in any calendar year) when added to the fair market
value of the common stock of the Company which can be acquired
pursuant to the terms of all other incentive stock options which
first become exercisable in any such calendar year exceeds
$100,000; and

WHEREAS, the Company also desires to amend the Plan to increase
the total number of shares of Common Stock which may be issued in

                     -41-


connection with options granted pursuant to the terms of the Plan
by Two Hundred Fifty Thousand (250,000); and

          WHEREAS, the Company desires to amend and restate the
terms of the Plan to permit the Executive Officers of the Company
to transfer options which they have or been granted or may, in
the future, be granted to the extent described above, to increase
the number of share of Common Stock which may be issued in
connection with options granted pursuant to the terms of the Plan
and to make certain other technical amendments to the terms of
the Plan;

          NOW, THEREFORE, in consideration of the foregoing, the
Company hereby adopts the following as the Third Amendment and
Restatement of the Gibraltar Steel Corporation Incentive Stock
Option Plan effective as of May 20, 1997:

     1.   Purpose of Plan.  The Gibraltar Steel Corporation
Incentive Stock Option Plan (the "Plan") is intended to provide
officers and other key employees of the Company and officers and
other key employees of any subsidiaries of the Company as that
term is defined in Section 3 below (hereinafter individually
referred to as a "Subsidiary" and collectively as "Subsidiaries")
with an additional incentive for them to promote the success of
the business, to increase their proprietary interest in the
success of the Company and its Subsidiaries, and to encourage
them to remain in the employ of the Company or its Subsidiaries.
The above aims will be effectuated through the granting of
certain stock options, as herein provided, which are intended to
qualify as Incentive Stock Options ("ISOs") under Section 422 of
the Internal Revenue Code of 1986, as the same has been and shall
be amended ("Code").

     2.   Administration.  The Plan shall be administered by a
Committee (the "Committee") composed of not less than two (2)
Directors of the Company who shall be appointed by and serve at
the pleasure of the Board of Directors of the Company.  If the
Committee is composed of two (2) Directors, both members of the
Committee must approve any action to be taken by the Committee in
order for such action to be deemed to be an action of the
Committee pursuant to the provisions of this Plan.  If the
Committee is composed of more than two (2) Directors, a majority
of the Committee shall constitute a quorum for the conduct of its
business, and (a) the action of a majority of the Committee
members present at any meeting at which a quorum is present, or
(b) action taken without a meeting by the approval in writing of
a majority of the Committee members, shall be deemed to be action
by the Committee pursuant to the provisions of the Plan.  The
Committee is authorized to adopt such rules and regulations for
the administration of the Plan and the conduct of its business as

                     -42-
                   

it may deem necessary or proper.

          Any action taken or interpretation made by the
Committee under any provision of the Plan or any option granted
hereunder shall be in accordance with the provisions of the Code,
and the regulations and rulings issued thereunder as such may be
amended, promulgated, issued, renumbered or continued from time
to time hereafter in order that, to the greatest extent possible,
the options granted hereunder shall constitute "incentive stock
options" within the meaning of the Code.  All action taken
pursuant to this Plan shall be lawful and with a view to
obtaining for the Company and the option holder the maximum
advantages under the law as then obtaining, and in the event that
any dispute shall arise as to any action taken or interpretation
made by the Committee under any provision of the Plan, then all
doubts shall be resolved in favor of such having been done in
accordance with the said Code and such revenue laws, amendments,
regulations, rulings and provisions as may then be applicable.
Any action taken or interpretation made by the Committee under
any provision of the Plan shall be final.  No member of the Board
of Directors or the Committee shall be liable for any action,
determination or interpretation taken or made under any provision
of the Plan or otherwise if done in good faith.

     3.   Participation.  The Committee shall determine from
among the officers and key employees of the Company and its
Subsidiaries (as such term is defined in Section 424 of the Code)
those individuals to whom options shall be granted (sometimes
hereinafter referred to as "Optionees"), the terms and provisions
of the options granted (which need not be identical), the time or
times at which options shall be granted and the number of shares
of Common Stock, (or such number of shares of stock in which the
Common Stock may at any time hereafter be constituted), for which
options are granted.

          In selecting Optionees and in determining the number of
shares for which options are granted, the Committee may weigh and
consider the following factors:  the office or position of the
Optionee and his degree of responsibility for the growth and
success of the Company and its Subsidiaries, length of service,
remuneration, promotions, age and potential.  The foregoing
factors shall not be considered to be exclusive or obligatory
upon the Committee, and the Committee may properly consider any
other factors which to it seems appropriate.  The terms and
conditions of any option granted by the Committee under this Plan
shall be contained in a written statement which shall be
delivered by the Committee to the Optionee as soon as practicable
following the Committee's establishment of the terms and
conditions of such option.

          An Optionee who has been granted an option under the

                     -43-


Plan may be granted additional options under the Plan if the
Committee shall so determine.

          Notwithstanding the foregoing, if at the time an option
is granted to an individual under this Plan, the individual owns
stock of the Company possessing more than ten percent (10%) of
the total combined voting power of all classes of stock of the
Company or any of its Subsidiaries, (or if such individual would
be deemed to own such percentage of such stock under Section
424(d) of the Code) such option shall continue to be valid and
binding upon the Company according to its terms but shall not be
deemed to have been granted under this Plan and shall not be
deemed to be an "incentive stock option" as defined in Section
422(b) of the Code unless: (a) the price per share at which
common stock of the Company may be acquired in connection with
the exercise of such options is not less than one hundred ten
percent (110%) of the fair market value of such common stock,
determined as of the date of the grant of such options; and (b)
the period of time within which such options must be exercised
does not exceed five (5) years from the date on which such
options are granted.  In addition, in no event shall any options
be granted under this Plan at any time after the termination date
set forth at the end of this Plan.

     4.   Shares Subject to the Plan.  The Company is authorized
to issue options under this Plan for the purchase of the number
of shares of Common Stock described in the following provisions
of this Section 4.  On September 21, 1993 (the date on which this
Plan became effective), the aggregate number of shares of Common
Stock which were reserved for issuance pursuant to options which
were permitted to be granted hereunder was Four Hundred Thousand
(400,000) shares (subject to the anti-dilutive adjustments
provided for by Section 5 hereof).  Effective February 15, 1996,
in addition to the number of shares of Common Stock reserved for
issuance pursuant to options which were permitted to be granted
as of February 14, 1996, an additional Two Hundred Thousand
(200,000) shares of Common Stock were reserved for issuance
pursuant to options which may be granted hereunder.  Effective
May 20, 1997, in addition to the number of shares of Common Stock
reserved for issuance pursuant to options which were permitted to
be granted as of May 19, 1997, an additional Two Hundred Fifty
Thousand (250,000) shares of Common Stock shall be reserved for
issuance pursuant to options which may be granted hereunder.
Accordingly, the total number of shares of Common Stock which may
be issued pursuant to the exercise of options which may be
granted under the terms of this Plan shall be equal to the sum
of: (a) Four Hundred Thousand (400,000) shares (subject to anti-

                     -44-


dilutive adjustments made at any time after September 21, 1993
pursuant to Section 5 hereof); (b) Two Hundred Thousand (200,000)
shares (subject to anti-dilutive adjustments made at any time
after February 15, 1996 pursuant to Section 5 hereof); and (c)
Two Hundred Fifty Thousand (250,000) shares (subject to anti-
dilutive adjustments made at any time after May 20, 1997 pursuant
to Section 5 hereof).

          Notwithstanding the foregoing, if this amendment and
restatement to the Plan is not approved by the stockholders of
the Company within twelve (12) months following the effective
date of this amendment and restatement, and if any options are
issued pursuant to the terms of this Plan at any time after: (x)
the total number of shares of Common Stock which may be acquired
upon the exercise of all previously issued options equals: (y)
the sum of: (i) Four Hundred Thousand (400,000) shares (subject
to the anti-dilutive adjustments made at any time after September
21, 1993 pursuant to Section 5 hereof); and (ii) Two Hundred
Thousand (200,000) shares (subject to anti-dilutive adjustments
made at any time after February 15, 1996 pursuant to Section 5
hereof), any option issued after such time shall continue to be
valid and binding upon the Company pursuant to its terms but
shall not be deemed to be an "incentive stock option"as defined
in section 422(b) of the Code.

          With respect to shares subject to options which expire
or terminate pursuant to the provisions of this Plan without
having been exercised in full, such shares shall be considered to
be available again for placement under options granted thereafter
under the Plan.  Shares issued pursuant to the exercise of
incentive stock options granted under the Plan shall be fully
paid and non-assessable.

     5.   Anti-Dilution Provisions.  The aggregate number of
shares of Common Stock and the class of such shares as to which
options may be granted under the Plan, the number and class of
such shares subject to each outstanding option, the price per
share thereof (but not the total price), and the number of such
shares as to which an option may be exercised at any one time,
shall all be adjusted proportionately in the event of any change,
increase or decrease in the outstanding shares of Common Stock
Company or any change in classification of its Common Stock
without receipt of consideration by the Company which results
either from a split-up, reverse split or consolidation of shares,
payment of a stock dividend, recapitalization, reclassification
or other like capital adjustment so that upon exercise of the
option, the Optionee shall receive the number and class of shares
that he would have received had he been the holder of the number
of shares of Common Stock for which the option is being exercised
immediately preceding such change, increase or decrease in the
outstanding shares of Common Stock.  Any such adjustment made by
the Committee shall be final and binding upon all Optionees, the
Company, and all other interested persons.  Any adjustment of an
incentive stock option under this paragraph shall be made in such
manner as not to constitute a "modification" within the meaning
of Section 424(h)(3) of the Code.

                     -45-


          Anything in this Section 5 to the contrary
notwithstanding, no fractional shares or scrip representative of
fractional shares shall be issued upon the exercise of any
option.  Any fractional share interest resulting from any change,
increase or decrease in the outstanding shares of Common Stock or
resulting from any reorganization, merger, or consolidation for
which adjustment is provided in this Section 5 shall disappear
and be absorbed into the next lowest number of whole shares, and
the Company shall not be liable for any payment for such
fractional share interest to the Optionee upon his exercise of
the option.

     6.   Option Price.  The purchase price under each option
issued shall be determined by the Committee at the time the
option is granted, but in no event shall such purchase price be
less than one hundred percent (100%) of the fair market value of
the Common Stock on the date of the grant.  If the Common Stock
is listed upon an established stock exchange or exchanges on the
day the option is granted, such fair market value shall be deemed
to be the highest closing price of the Common Stock on such stock
exchange or exchanges on the day the option is granted, or if no
sale of the Company's Common Stock shall have been made on any
stock exchange on that day, on the next preceding day on which
there was a sale of such stock.

          If the Common Stock is listed in the NASDAQ National
Market System, the fair market value of the Common Stock shall be
the average of the high and low closing sale prices in the NASDAQ
National Market System on the day the option is granted, or if no
sale of the Common Stock shall have been made on the NASDAQ
National Market System on that day, on the next preceding day on
which there was a sale of such stock.

     7.   Option Exercise Periods.  The time within which any
option granted hereunder may be exercised shall be, by its terms,
not earlier than one (1) year from the date such option is
granted and not later than ten (10) years from the date such
option is granted.  Subject to the provisions of Section 10
hereof, the Optionee must remain in the continuous employment of
the Company or any of its Subsidiaries from the date of the grant
of the option to and including the date of exercise of option in
order to be entitled to exercise his option.  Options granted
hereunder shall be exercisable in such installments and at such
dates as the Committee may specify.  In addition, with respect to
all options granted under this Plan, unless the Committee shall
specify otherwise, the right of each Optionee to exercise his
option shall accrue, on a cumulative basis, as follows:

          (a)  one-fourth (1/4) of the total number of shares of
Common Stock which could be purchased (subject to adjustment as
provided in Section 5 hereof) (such number being hereinafter
referred to as the "Optioned Shares") shall become available for

                     -46-


purchase pursuant to the option at the end of the one (1) year
period beginning on the date of the option grant;

          (b)  one-fourth (1/4) of the Optioned Shares shall
become available for purchase pursuant to the option at the end
of the two (2) year period beginning on the date of the option
grant;

          (c)  one-fourth (1/4) of the Optioned Shares shall
become available for purchase pursuant to the option at the end
of the three (3) year period beginning on the date of the option
grant; and

          (d)  one-fourth (1/4) of the Optioned Shares shall
become available for purchase pursuant to the option at the end
of the four (4) year period beginning on the date of the option
grant.

          Continuous employment shall not be deemed to be
interrupted by transfers between the Subsidiaries or between the
Company and any Subsidiary, whether or not elected by termination
from any Subsidiary of the Company and re-employment by any other
Subsidiary or the Company.  Time of employment with the Company
shall be considered to be one employment for the purposes of this
Plan, provided there is no intervening employment by a third
party or no interval between employments which, in the opinion of
the Committee, is deemed to break continuity of service.  The
Committee shall, at its discretion, determine the effect of
approved leaves of absence and all other matters having to do
with "continuous employment".  Where an Optionee dies while
employed by the Company or any of its Subsidiaries, his options
may be exercised following his death in accordance with the
provisions of Section 10 below.

          Notwithstanding the foregoing provisions of this
Section 7, in the event the Company or the stockholders of the
Company enter into an agreement to dispose of all or
substantially all of the assets or stock of the Company by means
of a sale, merger, consolidation, reorganization, liquidation, or
otherwise, or in the event a Change of Control shall occur, an
option shall become immediately exercisable with respect to the
full number of shares subject to that option during the period
commencing as of the date of execution of such agreement and
ending as of the earlier of: (i) ten (10) years from the date
such option was granted; or (ii) ninety (90) days following the
date on which a Change in Control occurs or the disposition of
assets or stock contemplated by the agreement is consummated.
Ninety (90) days following the consummation of any such
disposition of assets or stock, or Change in Control, this Plan
and any unexercised options issued hereunder (or any unexercised
portion thereof) shall terminate and cease to be effective,
unless provision is made in connection with such transaction for

                     -47-


assumption of options previously granted or the substitution for
such options of new options covering the securities of a
successor corporation or an affiliate thereof, with appropriate
adjustments as to the number and kind of securities and prices.

          For purposes of this Plan, a "Change in Control" shall
be deemed to have occurred if:

          (a) any "person" or "group" (within the meaning of
Sections 13(d) and 14(d)(2) of the Securities Exchange Act of
1934, as amended (the "Exchange Act")) becomes the "beneficial
owner" (as defined in Rule 13d-3 under the Exchange Act) of more
than thirty percent (30%) of the then outstanding voting stock of
the Company, otherwise than through a transaction arranged by, or
consummated with the prior approval of its Board of Directors; or

          (b) during any period of two consecutive years,
individuals who at the beginning of such period constitute the
Board of Directors of the Company (and any new director whose
election to the Board of Directors or whose nomination for
election by the Company's stockholders was approved by a vote of
at least two thirds of the directors then still in office who
either were directors at the beginning of such period or whose
election or nomination for election was previously so approved)
(the "Continuing Directors") cease for any reason to constitute a
majority thereof; or

          (c) the stockholders of the Company approve a merger or
consolidation of the Company with any other corporation, other
than a merger or consolidation which would result in the voting
securities of the Company immediately prior thereto continuing to
represent (either by remaining outstanding or being converted
into voting securities of the surviving entity) at least 80% of
the combined voting power of the voting securities of the Company
or such surviving entity outstanding immediately after such
merger or consolidation (provided, however, that if prior to the
merger or consolidation, the Board of Directors of the Company
adopts a resolution that is approved by a majority of the
Continuing Directors providing that such merger or consolidation
shall not constitute a "Change in Control" for purposes of the
Plan, then such a merger or consolidation shall not constitute a
"Change in Control"); or

          (d)  the stockholders of the Company approve an
agreement for the sale or disposition by the Company of all or
substantially all the assets of the Company.

          Any change or adjustment made pursuant to the terms of
this paragraph shall be made in such a manner so as not to
constitute a "modification" as defined in Section 424 of the
Code, and so as not to cause any incentive stock option issued
under this Plan to fail to continue to qualify as an incentive

                     -48-


stock option as defined in Section 422(b) of the Code.
Notwithstanding the foregoing, in the event that any such
agreement shall be terminated without consummating the
disposition of said stock or assets, any unexercised unaccrued
installments that had become exercisable solely by reason of the
provisions of this paragraph shall again become unaccrued and
unexercisable as of said termination of such agreement; subject,
however, to such installments accruing pursuant to the normal
accrual schedule provided in the terms under which such option
was granted.  Any exercise of an installment prior to said
termination of said agreement shall remain effective despite the
fact that such installment became exercisable solely by reason of
the Company or its stockholders entering into said agreement to
dispose of the stock or assets of the Company.

     8.  Exercise of Option.  Options shall be exercised as
follows:

          (a) Notice and Payment.  Each option, or any
installment thereof, shall be exercised, whether in whole or in
part, by giving written notice to the Company at its principal
office, specifying the options being exercised (by reference to
the date of the grant of the option), the number of shares to be
purchased and the purchase price being paid, and accompanied by
the payment of all or such part of the purchase price as shall be
specified in the option, by cash, certified or bank check payable
to the order of the Company.  Each such notice shall contain
representations on behalf of the Optionee that he acknowledges
that the Company is selling the shares being acquired by him
under a claim of exemption from registration under the Securities
Act of 1933 as amended (the "Act"), as a transaction not
involving any public offering; that he represents and warrants
that he is acquiring such shares with a view to "investment" and
not with a view to distribution or resale; and that he agrees not
to transfer, encumber or dispose of the shares unless:  (i) a
registration statement with respect to the shares shall be
effective under the Act, together with proof satisfactory to the
Company that there has been compliance with applicable state law;
or (ii) the Company shall have received an opinion of counsel in
form and content satisfactory to the Company to the effect that
the transfer qualifies under Rule 144 or some other disclosure
exemption from registration and that no violation of the Act or
applicable state laws will be involved in such transfer, and/or
such other documentation in connection therewith as the Company's
counsel may in its sole discretion require.

          (b) Issuance of Certificates.  Certificates
representing the shares purchased by the Optionee shall be issued
as soon as practicable after the Optionee has complied with the
provisions of Section 8(a) hereof.

          (c) Rights as a Stockholder.  The Optionee shall have

                     -49-


no rights as a stockholder with respect to the shares of Common
Stock purchased until the date of the issuance to him of a
certificate representing such shares.

     9.  Assignment of Option.  (a) Subject to the provisions of
Sections 9(b) and 10(c) hereof, options granted under this Plan
may not be assigned voluntarily or involuntarily or by operation
of law and any attempt to transfer, assign, pledge, hypothecate
or otherwise dispose of, or to subject to execution, attachment
or similar process, any incentive stock option, or any right
thereunder, contrary to the provisions hereof shall be void and
ineffective, shall give no right to the purported transferee, and
shall, at the sole discretion of the Committee, result in
forfeiture of the option with respect to the shares involved in
such attempt.

          (b)  Notwithstanding anything to the contrary contained
in the terms of the Plan as in effect at any time prior to the
date hereof and notwithstanding anything to the contrary
contained in the terms of any statement, letter or other document
or agreement setting forth the terms and conditions of any
options previously issued pursuant to the terms of this Plan, any
and all Non-Qualified Options (as defined in Section 13 hereof)
previously issued to any officer of the Company (as defined in
Rule 16A-a(f) issued under the Securities and Exchange Act of
1934 (hereinafter an "Executive Officer")) pursuant to the terms
of the Plan and, subject to the approval of the Committee, any
Non-Qualified Options which may be granted or issued to any
Executive Officer of the Company at any time in the future
pursuant to the terms of the Plan shall be transferable by the
Executive Officer to whom such Non-Qualified Options have been or
are granted to: (i) the spouse, children or grandchildren of the
Executive Officer (hereinafter "Immediate Family Members"); (ii)
a trust or trusts for the exclusive benefit of such Immediate
Family Members; (iii) a partnership or limited liability company
in which such Immediate Family Members are the only partners or
members; or (iv) a private foundation established by the
Executive Officer; provided that: (x) there may be no
consideration for any such transfer; (y) in the case of Non-
Qualified Options which may be granted in the future, the
statement, letter or other document or agreement setting forth
the terms and conditions of any such Non-Qualified Options must
expressly provide for and limit the transferability of such Non-
Qualified Options to transfers which are permitted by the
foregoing provisions of this Section 9(b); and (z) any subsequent
transfer of transferred Non-Qualified Options shall, except for
transfers occurring as a result of the death of the transferee as
contemplated by Section 10(e), be prohibited.  Following the
transfer of any Non-Qualified Options as permitted by the
foregoing provisions of this Section 9(b), any such transferred
Non-Qualified Options shall continue to be subject to the same
terms and conditions applicable to such Non-Qualified Options

                     -50-


immediately prior to the transfer; provided that, for purposes of
this Plan, the term "Optionee" shall be deemed to refer to the
transferee.  Notwithstanding the foregoing, the events of
termination of employment of Section 10 hereof shall continue to
be applied with respect to the original Optionee for the purpose
of determining whether or not the Non-Qualified Options shall be
exercisable by the transferee and, upon termination of the
original Optionee's employment, the Non-Qualified Options shall
be exercisable by the transferee only to the extent and for the
periods specified in Section 10 below.

     10.  Effect of Termination of Employment, Death or
Disability. (a) In the event of the termination of employment of
an Optionee during the two (2) year period after the date of
issuance of an option to him either by reason of: (i) a discharge
for cause; or (ii) voluntary separation on the part of the
Optionee and without consent of the Company or the Subsidiary for
whom the Optionee was employed, any option or options theretofore
granted to him under this Plan, to the extent not theretofore
exercised by him, shall forthwith terminate.

          (b) In the event of the termination of employment of an
Optionee (otherwise than by reason of death or retirement of the
Optionee at his Retirement Date) by the Company or by any of the
Subsidiaries employing the Optionee at such time, any option or
options granted to him under the Plan to the extent not
theretofore exercised shall be deemed cancelled and terminated
forthwith, except that, subject to the provisions of subparagraph
(a) of this Section, such Optionee may exercise any options
theretofore granted to him, which have not then expired and which
are otherwise exercisable within the provisions of Section 7
hereof, within three (3) months after such termination.  If the
employment of an Optionee shall be terminated by reason of the
Optionee's retirement at his Retirement Date by the Company or by
any of the Subsidiaries employing the Optionee at such time, the
Optionee shall have the right to exercise such option or options
held by him to the extent that such options have not expired, at
any time within three (3) months after such retirement.  The
provisions of Section 7 to the contrary notwithstanding, upon
retirement, all options held by an Optionee shall be immediately
exercisable in full.  The transfer of an Optionee from the employ
of the Company to a Subsidiary corporation of the Company or vice
versa, or from one Subsidiary corporation of the Company to
another, shall not be deemed to constitute a termination of
employment for purposes of this Plan.

          (c) In the event that an Optionee shall die while
employed by the Company or by any of the Subsidiaries or shall
die within three (3) months after retirement on his Retirement
Date (from the Company or any Subsidiary), any option or options
granted to him under this Plan and not theretofore exercised by
him or expired shall be exercisable by the estate of the Optionee

                     -51-


or by any person who acquired such option by bequest or
inheritance from the Optionee in full, notwithstanding Section 7,
at any time within one (1) year after the death of the Optionee.
References herein above to the Optionee shall be deemed to
include any person entitled to exercise the option after the
death of the Optionee under the terms of this Section.

          (d) In the event of the termination of employment of an
Optionee by reason of the Optionees' disability, the Optionee
shall have the right, notwithstanding the provisions of Section 7
hereof, to exercise all options held by him, to the extent that
options have not previously expired or been exercised, at any
time within one (1) year after such termination.  The term
"disability" shall, for the purposes of this Plan, be defined in
the same manner as such term is defined in Section 22(e)(3) of
the Internal Revenue Code of 1986.

          (e)  For the purposes of this Plan, "Retirement Date"
shall mean, with respect an Optionee, the date the Optionee
actually retires from his employment with the Company or, if
applicable, the Subsidiary by whom he is employed; provided that
such date occurs on or after the date the Optionee is otherwise
entitled to retire under the terms of the retirement plan of the
Company or, if applicable, the Subsidiary by whom the Optionee is
employed.

     11.  Amendment and Termination of the Plan.  The Board of
Directors of the Company may at any time suspend, amend or
terminate the Plan; provided, however, that except as permitted
in Section 13 hereof, no amendment or modification of the Plan
which would:

          (a) increase the maximum aggregate number of shares as
to which options may be granted hereunder (except as contemplated
in Section 5); or

          (b) reduce the option price or change the method of
determining the option price; or

          (c) increase the time for exercise of options to be
granted or those which are outstanding beyond a term of ten (10)
years; or

          (d) change the designation of the employees or class of
employees eligible to receive options under this Plan,

          may be adopted unless with the approval of the holders
of a majority of the outstanding shares of Common Stock
represented at a stockholders' meeting of the Company, or with
the written consent of the holders of a majority of the
outstanding shares of Common Stock.  No amendment, suspension or
termination of the Plan may, without the consent of the holder of

                     -52-


the option, terminate his option or adversely affect his rights
in any material respect.

     12.  Incentive Stock Options; Power to Establish Other
Provisions.  It is intended that the Plan shall conform to and
(except as otherwise expressly set forth herein) each option
shall qualify and be subject to exercise only to the extent that
it does qualify as an "incentive stock option" as defined in
Section 422 of the Code and as such section may be amended from
time to time or be accorded similar tax treatment to that
accorded to an incentive stock option by virtue of any new
revenue laws of the United States.  The Board of Directors may
make any amendment to the Plan which shall be required so to
conform the Plan.  Subject to the provisions of the Code, the
Committee shall have the power to include such other terms and
provisions in options granted under this Plan as the Committee
shall deem advisable.  The grant of any options pursuant to the
terms of this Plan which do not qualify as "incentive stock
options" as defined in Section 422 of the Code is hereby approved
provided that the maximum number of shares of Common Stock of the
Company which can be issued pursuant to the terms of this Plan
(as provided for in Section 4 hereof) is not exceeded by the
grant of any such options and, to the extent that any options
previously granted pursuant to the terms of this Plan were not
"incentive stock options" within the meaning of Section 422 of
the Code, the grant of such options is hereby ratified, approved
and confirmed.

     13.  Maximum Annual Value of Options Exercisable.
Notwithstanding any provisions of this Plan to the contrary if:
(a) the sum of: (i) the fair market value (determined as of the
date of the grant) of all options granted to an Optionee under
the terms of this Plan which become exercisable for the first
time in any one calendar year; and (ii) the fair market value
(determined as of the date of the grant) of all options
previously granted to such Optionee under the terms of this Plan
or any other incentive stock option plan of the Company or its
subsidiaries which also become exercisable for the first time in
such calendar year; exceeds (b) $100,000; then, (c) those options
shall continue to be binding upon the Company in accordance with
their terms but, to the extent that the aggregate fair market of
all such options which become exercisable for the first time in
any one calendar year (determined as of the date of the grant)
exceeds $100,000, such options (referred to, for purposes of this
Plan, as "Non-Qualified Options") shall not be deemed to be
incentive stock options as defined in Section 422(b) of the Code.
For purposes of the foregoing, the determination of which options
shall be recharacterized as not being incentive stock options
issued under the terms of this Plan shall be made in inverse
order of their grant dates and, accordingly, the last options
received by the Optionee shall be the first options to be
recharacterized as not being incentive stock options granted

                     -53-


pursuant to the terms of the Plan.

     14.  General Provisions  (a) No incentive stock option shall
be construed as limiting any right which the Company or any
parent or subsidiary of the Company may have to terminate at any
time, with or without cause, the employment of an Optionee.

          (b) The Section headings used in this Plan are intended
solely for convenience of reference and shall not in any manner
amplify, limit, modify or otherwise be used in the construction
or interpretation of any of the provisions hereof.

          (c) The masculine, feminine or neuter gender and the
singular or plural number shall be deemed to include the other
whenever the content so indicates or requires.

          (d) No options shall be granted under the Plan after
ten (10) years from the date the Plan is adopted by the Board of
Directors of the Company or approved by the stockholders of the
Company, whichever is earlier.

     15.  Effective Date and Duration of the Plan.  The Plan
became effective on September 21, 1993, the date the adoption of
the Plan was approved by the Board of Directors of the Company.
On November 5, 1993, as required by Section 422 of the Code, the
Plan was approved by the Stockholders of the Company.  The Plan
will terminate on September 20, 2003; provided however, that the
termination of the Plan shall not be deemed to modify, amend or
otherwise affect the terms of any options outstanding on the date
the Plan terminates.

     IN WITNESS WHEREOF, the undersigned has executed this Plan
by and on behalf of the Company on and as of the 20th day of May,
1997.

                              GIBRALTAR STEEL CORPORATION



                              By: /s/ Walter T. Erazmus
                                  Walter T. Erazmus
                                  Executive Vice President

DATE ADOPTED BY BOARD OF DIRECTORS:  September 21, 1993
DATE APPROVED BY STOCKHOLDERS:  November 5, 1993
TERMINATION DATE:  September 21, 2003

                     -54-

                  GIBRALTAR STEEL CORPORATION
                     RESTRICTED STOCK PLAN
                 _______________________________
                                
                 First Amendment and Restatement
                 _______________________________


Recitals:

     Effective September 21, 1993, Gibraltar Steel Corporation
(the "Company"), a Delaware Corporation with offices at 3556 Lake
Shore Road, Buffalo, New York, established the Gibraltar Steel
Corporation Restricted Stock Plan ("Plan") for the purpose of
providing an equity based incentive compensation plan that would
increase the personal interest of executive and managerial
employees in the successful and profitable operation of the
Company.

     The Company desires to amend the Plan to expand the class of
individuals that are eligible to participate in the Plan and to
provide the Committee that administers the Plan the ability to
establish the period of time that the restrictions on
transferability of shares of stock granted under the Plan will be
in effect.

     NOW, THEREFORE, in order to carry into effect the amendment
to the Plan described above, the Company hereby adopts the
following as the First Amendment and Restatement to the Gibraltar
Steel Corporation Restricted Stock Plan effective August 11,
1997:

     1.   Purposes.  The purposes of the Gibraltar Steel
Corporation Restricted Stock Plan (the "Plan") are: (a) to enable
the Company and its direct and indirect wholly owned subsidiaries
to attract, reward and retain highly qualified executive and
managerial employees and outside directors through the use of an
equity based incentive compensation program; and (b) to increase
the personal interest which the executive and managerial
employees and outside directors of the Company and its direct and
indirect wholly owned subsidiaries have in the successful and
profitable operation of the Company by linking a portion of the
compensation and fees paid to such employees and outside
directors to the value of the Company's common stock, par value
$.01 per share (hereinafter "Common Stock").

     2.   Stock Subject to Plan.  The shares of stock which may
be awarded pursuant to this Plan shall be shares of Common Stock.
All awards of Common Stock made pursuant to this Plan shall be
subject to the restrictions on transferability described in
Section 6 hereof and to such other restrictions as may be imposed
by the Committee (as defined in Section 3 hereof) in connection

                     -55-


with its making of an award under this Plan (which other
restrictions need not be the same for each Participant).
Accordingly, each share of Common Stock awarded pursuant to the
terms of this Plan is hereinafter referred to as "Restricted
Stock".

          The aggregate number of shares of Restricted Stock
which may be granted and awarded under this Plan shall not exceed
100,000.  Notwithstanding the foregoing, the number of shares of
Restricted Stock available for awards under this Plan shall be
adjusted proportionately in the event of any change, increase or
decrease in the outstanding shares of Common Stock which results
either from a split-up, reverse split or consolidation of shares,
payment of a stock dividend, recapitalization, reclassification
or other like capital adjustment; provided, however, that no
fractional shares shall be issued in connection with any such
capital adjustment.  The Restricted Stock which is awarded under
this Plan may be either authorized but unissued Common Stock or
treasury shares.  Shares which are the subject of an award
granted under this Plan shall not again become available for
future grants unless the recipient of an award fails to pay the
purchase price for the shares pursuant to Section 5 hereof.

     3.   Committee.  For purposes of this Plan, the committee
which shall be responsible for the administration of the Plan
(the "Committee") shall be the Board of Directors of the Company.
The responsibilities of the Committee shall include, but be not
limited to, the determination of whether an award of Restricted
Stock should be made, the number of shares of Restricted Stock to
be awarded and the establishment of such other terms and
conditions of such Restricted Stock awards as the Board of
Directors may deem appropriate.

     4.   Eligibility and Participation.  Each employee and each
outside director of the Company and each employee and each
outside director of the Company's direct and indirect wholly
owned subsidiaries shall be eligible to receive an award of
Restricted Stock under the terms of this Plan.  For the purposes
of this Plan, if an award of Restricted Stock is granted to an
employee or outside director under the terms of this Plan, such
employee or outside director shall be deemed to be a
"Participant".

          The Committee shall, from time to time, determine which
employees or outside directors of the Company or any of its
direct or indirect wholly owned subsidiaries should receive an
award of Restricted Stock and the number of shares of Restricted
Stock to be awarded to such employees or outside directors.  In
determining which employees or outside directors should receive

                     -56-


an award of Restricted Stock under the terms of this Plan, the
Committee shall take into account the past performance of the
Company, the employee's or outside director's contributions to
past performance, the capacity of the employee or outside
director to contribute in a substantial measure to the
performance of the Company in the future and such other factors
as the Committee may consider relevant.

          The Committee shall provide a Participant who is
granted an award of Restricted Stock written notice of the number
of shares of Restricted Stock contained in the award, the timing
and terms for payment by the Participant of the purchase price of
the Restricted Stock to be issued pursuant to the award, a
statement of any restrictions imposed on the Restricted Stock to
be issued pursuant to the award, a statement of the length of
time that such restrictions will apply and a statement of the
date to be used for determining whether the restrictions imposed
by this Plan have lapsed (such date being hereinafter referred to
as the "Award Date").

     5.   Awards of Restricted Stock.  Each Participant that
receives an award of Restricted Stock under this Plan shall be
required to pay for such Restricted Stock.  The price per share
which shall be paid by a Participant that has been granted an
award of Restricted Stock shall be equal to the par value of such
share.  The Committee shall determine the time and manner in
which a Participant shall be required to pay for Restricted Stock
which the Participant has been awarded under this Plan.  Each
share of Restricted Stock awarded to a Participant under the
terms of this Plan shall be subject to the restrictions on
transferability contained in Section 6 hereof and such other
restrictions as the Committee may establish at the time the award
is made (which other restrictions need not be the same for each
Participant).

          The Committee, in its discretion, may require the
Participant to execute an agreement at the time of issuance of
the Restricted Stock to the Participant which agreement shall
contain such terms and conditions as may, from time to time, be
established by the Committee.

     6.   Restrictions.  The shares of the Restricted Stock sold
to a Participant in connection with this Plan may not be sold,
pledged, encumbered or otherwise alienated or hypothecated by the
Participant until the time that these restrictions have lapsed as
hereinafter provided in this Section 6.

          The restrictions described in the preceding sentence
shall lapse at the end of a period to be established by the

                     -57-


Committee and described with particularity in each award of
Restricted Stock, or shall lapse on the date the Participant
attains the age of 65 provided the Participant remains in the
employ of, or serves as an outside director of, the Company or
any of its direct or indirect subsidiaries during the entire
period beginning on the Award Date and ending on the date the
restrictions lapse.

          The restrictions imposed on shares of Restricted Stock
awarded pursuant to the terms of this Plan shall also lapse upon
the occurrence of a Change in Control.  For purposes of this
Plan, a Change in Control shall be deemed to have occurred if:

          (a) any "person" or "group" (within the meaning of
Sections 13(d) and 14(d)(2) of the Exchange Act) becomes the
"beneficial owner" (as defined in Rule 13d-3 under the Exchange
Act) of more than thirty percent (30%) of the then outstanding
voting stock of the Company, otherwise than through a transaction
arranged by, or consummated with the prior approval of its Board
of Directors; or

          (b) during any period of two consecutive years,
individuals who at the beginning of such period constitute the
Board of Directors of the Company (and any new director whose
election to the Board of Directors or whose nomination for
election by the Company's shareholders was approved by a vote of
at least two thirds of the directors then still in office who
either were directors at the beginning of such period or whose
election or nomination for election was previously so approved)
(the "Continuing Directors") cease for any reason to constitute a
majority thereof; or

          (c) the stockholders of the Company approve a merger or
consolidation of the Company with any other corporation, other
than a merger or consolidation which would result in the voting
securities of the Company immediately prior thereto continuing to
represent (either by remaining outstanding or being converted
into voting securities of the surviving entity) at least 80% of
the combined voting power of the voting securities of the Company
or such surviving entity outstanding immediately after such
merger or consolidation (provided, however, that if prior to the
merger or consolidation, the Board of Directors of the Company
adopts a resolution that is approved by a majority of the
Continuing Directors providing that such merger or consolidation
shall not constitute a "change in control" for purposes of the
Plan, then such a merger or consolidation shall not constitute a
"change in control"); or

          (d)  the stockholders of the Company approve an

                     -58-


agreement for the sale or disposition by the Company or all or
substantially all the assets of the Company.

     7.   Stockholder Rights.  Subject to the other provisions of
this Plan, the Participant shall have all the rights of a
stockholder with respect to the shares of Restricted Stock which
are subject to this award including, but not limited to, the
right to receive all dividends on such shares and the right to
vote such shares; provided, however, that non-cash dividends,
distributions and adjustments shall be subject to the same
restrictions and risk of forfeiture as set forth in Sections 6
and 10 hereof as are applicable to the original shares of
Restricted Stock subject to the Participant's award.

     8.   Other Restrictions.  The Committee may impose such
other restrictions on any shares of Restricted Stock sold
pursuant to this Plan as it may deem advisable, including,
without limitation, restrictions under the Securities Act of 1933
as amended (the "Act") restrictions under the requirements of any
stock exchange upon which such shares or shares of the same class
are then listed, and restrictions under any blue sky or
securities laws applicable to such shares.

     9.   Legend.  In order to enforce the restrictions imposed
on Restricted Stock granted under this Plan, the Committee shall
cause a legend or legends to be placed on any certificate
representing shares of Restricted Stock issued pursuant to this
Plan, which legend or legends shall make appropriate reference to
the restrictions imposed under it.

     10.  Termination of Employment.  Except as hereinafter
provided, if a Participant's employment or service as an outside
director with the Company or any of its subsidiaries is
voluntarily or involuntarily terminated at any time prior to the
date that the restrictions imposed by Section 6 hereof have
lapsed, any shares of Restricted Stock issued to such Participant
with respect to which such restrictions have not lapsed shall be
forfeited and the price paid by the Participant therefor shall be
returned to the Participant.  Notwithstanding the foregoing, the
restrictions to which shares of Restricted Stock are subject
pursuant to Section 6 hereof shall lapse: (a) upon the
Participant's death, total and permanent disability (to the
extent and in a manner as shall be determined by the Committee in
its sole discretion) or retirement (as determined by the
Committee in its sole discretion); or (b) upon the occurrence of
such special circumstances or event as in the opinion of the
Committee merits special consideration.

     11.  Non-Transferability of Awards.  Awards granted under

                     -59-


this Plan shall not be transferable by the Participant otherwise
than by will or the laws of descent and distribution and the
right to purchase shares of Restricted Stock pursuant to an award
under this Plan may be exercised or surrendered during a
Participant's lifetime only by the Participant.

     12.  Tax Withholding.  The Company or subsidiary shall
deduct and withhold, from any cash or other payments to be made
to the Participant, such amounts under federal, state or local
tax rules or regulations as it deems appropriate with respect to
an award under the Plan.  In any event, the Participant shall
make available to the Company or subsidiary, promptly when
required, sufficient funds to meet the requirements of such
withholding, and the Committee shall be entitled to take and
authorize such steps as it may deem advisable in order to have
such funds available to the Company or subsidiary when required.

     13.  Issuance of Shares and Compliance with the Act.  The
Company may postpone the issuance and delivery of shares of
Restricted Stock until: (a) the admission of such shares to
listing on any stock exchange on which shares of Common Stock are
then listed; and (b) the completion of such registration or other
qualification of such shares of Restricted Stock under any state
or federal law, rule or regulation as the Company shall determine
to be necessary or advisable.  As a condition precedent to the
issuance of shares of Restricted Stock pursuant to the grant of
an award under the Plan, the Company may require the recipient
thereof to make such representations and furnish such information
as may, in the opinion of counsel for the Company, be appropriate
to permit the Company, in the light of the then existence or non-
existence with respect to such shares of an effective
Registration Statement under the Act to issue the shares in
compliance with the provisions of that or any comparable act.

     14.  Administration.  The Committee shall have full
authority to manage and control the operation and administration
of the Plan.  Any interpretation of the Plan by the Committee and
any decision made by the Committee of any matter within its
discretion is final and binding on all persons.

     15.  Participant Rights.  No employee or outside director
shall have any claim or right to be granted an award of
Restricted Stock under the Plan except as the Committee shall
have conferred in its discretion in the administration of the
Plan.  Participation in the Plan by an employee shall not confer
upon the employee any right with respect to continuation of
employment by the Company or its subsidiaries, nor interfere with
the right of the Company to terminate at any time the employment
of the employee.  Participation in the Plan by an outside

                     -60-


director will not confer upon the outside director any right with
respect to continuation of service as an outside director of the
Company or its subsidiaries, nor interfere with the provisions
otherwise existing for the election and removal of directors of
the Company or its subsidiaries.

     16.  Amendment and Termination.  The Board of Directors of
the Company may amend, suspend or terminate the Plan or any
portion thereof at any time; provided that no amendment,
suspension or termination shall impair the rights of any
Participant, without the Participant's consent, in any Restricted
Stock previously awarded under this Plan.  The Committee may
amend the Plan to the extent necessary for the efficient
administration of the Plan, or to make it practically workable or
to confirm it to the provisions of any federal or state law or
regulation.

     17.  Non-Exclusivity of Plan.  Neither the adoption of this
Plan by the Company's Board of Directors nor the submission of
this Plan to the stockholders of the Company for approval shall
be construed as creating any limitations on the power of the
Company's Board of Directors to adopt any other incentive
compensation arrangements it may deem desirable, including,
without limitation, the awarding of Common Stock to employees
otherwise than under the terms of this Plan and such other
arrangements as may be either generally applicable or applicable
only in specific cases.

     18.  Governing Law.  Except as otherwise required by the
General Corporation Law of the State of Delaware, this Plan shall
be governed by and construed in accordance with the laws of the
State of New York without regard to its conflicts of law
principles.

     19.  Effective Date of Plan; Stockholder Approval.  On
September 21, 1993, the Board of Directors of the Company adopted
and approved the Plan subject to ratification and approval by the
stockholders of the Company.  On November 8, 1993, the
stockholders of the Company ratified and approved the Plan.  The
effective date of the Plan is September 21, 1993.

     IN WITNESS WHEREOF, the undersigned has executed this First
Amendment and Restatement of the Plan by and on behalf of the
Company on and as of 19th day of August, 1997.

                                   GIBRALTAR STEEL CORPORATION



                                   By:   /s/ Walter T. Erazmus
                                        Walter T. Erazmus 
                                        Executive Vice President

                     -61-

                             Subsidiaries
                                   
The following is a list of the subsidiaries of Gibraltar Steel
Corporation.  The names of indirectly owned subsidiaries are indented
under the names of their respective parent corporations:

Gibraltar Steel Corporation of New York                New York
   Wm. R Hubbell Steel Corporation                     Illinois
     Mill Transportation Company                       Illinois
   Carolina Commercial Heat Treating, Inc.             Nevada
   Southeastern Metals Manufacturing Company, Inc.     Florida
   Gibraltar Steel Corporation Flight Services Corp.   New York
Gibraltar Strip Steel, Inc.                            Delaware
Integrated Technologies International, Ltd.            Delaware
Cleveland Pickling, Inc.                               Delaware
GIT Limited                                            New York
Gibraltar Steel Corporation of Tennessee               Tennessee

                      -62-

 

5 THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM THE CONSOLIDATED FINANCIAL STATEMENTS ON FORM 10-K AND IS QUALIFIED IN ITS ENTIRETY BY REFERENCE TO SUCH FINANCIAL STATEMENTS. 1000 US DOLLARS 12-MOS DEC-31-1997 JAN-01-1997 DEC-31-1997 1 2,437 0 50,141 990 76,701 130,746 151,644 36,242 281,336 43,101 81,800 0 0 124 139,920 281,336 449,700 449,700 375,537 375,537 41,560 0 5,115 27,488 11,072 16,416 0 0 0 16,416 1.33 1.30