UNITED STATES
                       SECURITIES AND EXCHANGE COMMISSION
                              WASHINGTON, DC 20549
                               ------------------

                                    FORM 10-K
      (Mark One)

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

                   For the fiscal year ended December 31, 1995
                                       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 018597
                                 NSC CORPORATION
             (Exact name of registrant as specified in its Charter)

        DELAWARE                                           31-1295113
   (State of incorporation)                 (IRS Employer Identification Number)

     49 DANTON DRIVE, METHUEN, MA                            01844
(Address of principal executive offices)                   (ZIP code)

                                 (508) 557-7300
               Registrant's telephone number, including area code

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

                          Common Stock, $0.01 par value
                              (Title of each class)

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

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

The  aggregate  market  value of the voting stock held by  nonaffiliates  of the
registrant on March 27, 1997 was $4,877,938.

The number of shares of Common Stock outstanding on March 27, 1997 was 9,971,175
shares.

                       DOCUMENTS INCORPORATED BY REFERENCE

Portions  of the  definitive  Proxy  Statement  for the 1997  Annual  Meeting of
Stockholders are incorporated by reference into Part III.

                                  Page 1 of 88
<PAGE>

                                 NSC Corporation
                         1996 Annual Report on Form 10-K

                                Table of Contents


Part I
------------------------------------------------------------------------------
Item   1.     Business                                                       3
Item   2.     Properties                                                    10
Item   3.     Legal Proceedings                                             11
Item   4.     Submission of Matters to a Vote of Security Holders           11

Executive Officers of the Registrant                                        12

Part II
------------------------------------------------------------------------------
Item   5.     Market for the Registrant's Common Stock and Related
               Stockholder Matters                                          13
Item   6.     Selected Financial Data                                       14
Item   7.     Management's Discussion and Analysis of Financial
               Condition and Results of Operations                          16
Item   8.     Financial Statements and Supplementary Data                   18
Item   9.     Changes in and Disagreements with Accountants on
               Accounting and Financial Disclosures                         33

Part III
------------------------------------------------------------------------------
Item 10.      Directors and Executive Officers of the Registrant            33
Item 11.      Executive Compensation                                        33
Item 12.      Security Ownership of Certain Beneficial Owners and
               Management                                                   33
Item 13.      Certain Relationships and Related Transactions                33

Part IV
------------------------------------------------------------------------------
Item 14.      Exhibits, Financial Statement Schedules and Reports
               on Form 8-K                                                  34

Signatures                                                                  37


                                  Page 2 of 88
<PAGE>
PART I
Item 1.  Business

General

NSC Corporation (the "Company") is a leading provider of asbestos-abatement  and
other specialty contracting services to a broad range of commercial,  industrial
and  institutional  clients  located  throughout the United States.  The Company
provides   asbestos-abatement   services   through  three  of  its  wholly-owned
subsidiaries,   National  Surface  Cleaning,  Inc.  ("NSCI"),  National  Service
Cleaning Corp. ("NSCC") and NSC Energy Services, Inc.("NSCESI");  demolition and
dismantling  services through its wholly-owned  subsidiary,  Olshan  Demolishing
Management,   Inc.  ("ODMI");  and  specialty  coatings  applications  and  lead
paint-abatement  through its wholly-owned  subsidiary,  NSC Specialty  Coatings,
Inc. ("NSCSCI").

For  financial  information  concerning  the  Company's  two  principal  service
segments, asbestos-abatement (which includes specialty coatings applications and
lead  paint-abatement) and demolition and dismantling,  see Note 13 to the Notes
to the Consolidated Financial Statements included elsewhere herein.

The  predecessor  of the  Company  was  founded in 1976 and  initially  provided
various cleaning services to commercial,  industrial and residential real estate
properties.  From the  early  1980s  and  until  the 1995  inclusion  of  ODMI's
activities,  substantially  all  of  the  Company's  revenue  was  derived  from
asbestos-abatement  services. The Company and a predecessor company to NSCC were
acquired  by OHM  Corporation  ("OHM")  in June  1988.  During  1989,  NSCC  was
incorporated  in Connecticut to provide  asbestos-abatement  services to clients
which  generally do not require the use of unionized  labor.  In June 1990,  the
Company completed an initial public offering of its common stock.

On May  4,  1993  pursuant  to a  Purchase  Agreement  among  the  Company,  NSC
Industrial  Services  Corp.  ("Industrial"),  OHM,  The  Brand  Companies,  Inc.
("Brand") and Waste  Management,  Inc.  ("WMI"),  now known as WMX Technologies,
Inc.,  the  Company  acquired  the  asbestos-abatement  division  of Brand  (the
"Division") in exchange for 4,010,000  shares of the Company's  common stock and
all the common stock of  Industrial.  As of December 31, 1996 and 1995,  OHM and
Rust International  Inc. (a successor company to Brand and hereinafter  referred
to as "Rust") each owned  approximately  forty percent of the  Company's  common
stock.

On April 20, 1995 the Company  entered into an Interim  Management and Operating
Agreements  with Rust  under  which  the  Company,  through  ODMI,  assumed  the
management of Olshan Demolishing Company ("ODC"), a Rust subsidiary specializing
in demolition and dismantling, primarily in the industrial market.

The market for  asbestos-abatement  services has seen dramatic  changes over the
past several years. In the mid-to-late  1980s, the demand in the marketplace was
extremely  high,  with  many  owners of  buildings  and  facilities  undertaking
large-scale  abatement  projects as a perceived  risk  reduction  measure.  This
demand,  coupled with low barriers to entry,  provided  the  conditions  for the
development of several large, national asbestos-abatement contractors.

While demand for asbestos-abatement services has stabilized,  credible estimates
for the market  show  steady  demand  over the coming  years.  As such demand is
dependent on the  fluctuation  of the national  economy and the finite amount of
asbestos  remaining to be removed,  there can be no  assurance  that such demand
will remain  steady.  The Company,  nevertheless,  is positioned to increase its
share of this market through a focused sales and marketing effort.  Furthermore,
through  diversification into the demolition and lead  paint-abatement  markets,
the  Company  is  striving  to  provide a full  suite of  specialty  contracting
services to the  performance-sensitive  customer.  The market  will  continue to
demand  quality  performance,  and the Company will strive to meet these demands
through a unified focus on safety, customer satisfaction,  financial performance
and personnel development.

                                  Page 3 of 88
<PAGE>

Asbestos-Abatement and Demolition Operations

The Company provides asbestos-abatement and other specialty contracting services
through  its  network of 16 offices  located  throughout  the United  States and
demolition and dismantling  services through its Houston,  Texas office. NSCI is
licensed  to conduct  asbestos-abatement  services  in 31 states  and  generally
provides its services with  unionized  labor,  while NSCC is licensed to perform
asbestos-abatement  services  in  34  states  and  provides  its  services  with
non-unionized  labor.  ODMI is licensed to conduct  demolition  and  dismantling
services in 49 states and the District of Columbia, Canada and Puerto Rico. ODMI
provides its services  with  non-unionized  labor;  NSCC and ODMI often  utilize
subcontractor and temporary labor.

An  asbestos-abatement  or  demolition  and  dismantling  program  is focused on
meeting  the needs of the  facility  owner or operator  to manage  properly  the
financial,  regulatory and safety-related  risks associated with a demolition or
asbestos  project.  The Company's  removal and demolition  services  require the
coordination of several processes:  marketing, bidding and contracting,  project
management,  health and safety  programs,  and the  actual  asbestos  removal or
dismantling and demolition.  The Company's management  maintains  administrative
and  operational  control  over all phases of a  project,  from  estimating  and
bidding through project completion.

The Bidding and Contract Process

While some of the Company's contracts are directly entered into with its clients
without a formal bidding process,  the Company receives a significant portion of
its  asbestos-abatement  and  demolition  and  dismantling  contracts  through a
bidding  process.  The majority of the  Company's  projects are  contracted on a
fixed-price  basis,  while the  remainder  are  contracted  either on a time and
materials or a unit-price  basis. The Company obtains work and performs services
under  contract,  often on the basis of plans,  specifications  or  requirements
prepared by the client or the  client's  agent.  Contracting  opportunities  are
identified  by  telemarketing  and the local sales  force and are  entered  into
following  competitive  bidding or direct  negotiations with the customer or its
agent. Generally, these contracts encompass supplying project management, labor,
tools,  equipment and  materials.  In most cases,  a significant  portion of the
total  costs  incurred  by  the  Company's   asbestos-abatement   operations  is
attributable  to labor  while a  significant  portion of the total  costs of its
demolition and dismantling operations is attributable to equipment rental costs.
While large abatement contracts may last more than one year, the majority of the
Company's projects are completed within five months.
Project Management

Each project is coordinated  and supervised by a project manager who selects the
requisite  equipment,  ensures contract compliance and supervises all personnel.
The Company  employs a  computerized  job cost system  which  allows it to track
project  profitability  on an ongoing  basis.  The project  manager  reviews the
progress  of the  project on a regular  basis  with  management.  The  estimator
continues  to  oversee  the  completion  of  the  project,  which  includes  any
subsequent  change orders.  The day-to-day  documentation  of air testing,  lead
monitoring  and final clean  analysis is an important part of the process and is
generally provided by the client's consultants.

Health and Safety

The  Company's  written  Safety  Program,  which is  issued  to all  supervisory
personnel,  contains  specific  outlines for all safety,  health and  regulatory
requirements  associated with an asbestos-abatement  project. In compliance with
the EPA's Asbestos Hazard Emergency  Response Act ("AHERA") Model  Accreditation
Plan ("MAP"),  all  asbestos-abatement  supervisors  and workers are required to
attend and satisfactorily  pass a written  examination both initially and during
annual  refresher  training.  To meet the medical  surveillance  and respiratory
protection  requirements of the  Occupational  Safety and Health  Administration
("OSHA")  standards,  all  asbestos-abatement  personnel  entering  an  asbestos
atmosphere and all demolition  personnel entering a lead atmosphere,  must first
undergo an initial,  and then  annual,  medical  examination,  which  includes a
complete  medical  and work  history,  pulmonary  function  testing  and a chest
roentgenogram.  In addition to the required  wearing of protective  clothing and
other personal protective equipment, all individuals leaving a contaminated area
are  required  to  undergo  stringent  decontamination  procedures.  During  the
asbestos-abatement process, the Company engages in daily personal air monitoring

                                  Page 4 of 88
<PAGE>
and during the demolition and dismantling  process, the Company engages in lead,
heavy  metal and other  contaminant  testing.  In either  process,  the  Company
strives to comply with all  regulatory  and safety  requirements.  Comprehensive
documentation is an important part of the  asbestos-abatement and demolition and
dismantling process.

The Abatement Process

The Company's  workers remove asbestos in accordance with the regulations of the
Environmental Protection Agency ("EPA") and OSHA with applicable state and local
regulations. Before any removal can begin, the work area must be sealed off from
the interior building environment as well as from the outdoor  environment.  The
containment of the work area requires the  construction of barriers on the walls
and floors made of plastic sheeting sealed at the seams. Air locks are built for
entry of personnel and equipment,  and a negative pressure air filtration system
is required to prevent the escape of any asbestos fibers from the work area. The
Company constructs a worker decontamination area which is generally comprised of
a clean  area  where  workers  prepare  for the work shift and an area where the
workers shower after leaving the sealed-off  work area.  Workers are fitted with
respirators and disposable suits prior to entering the work area.

Throughout the abatement process, air samples are taken to indicate the level of
airborne fibers both inside and outside the work area to protect the workers and
the building  occupants.  The environmental  consultant,  engineer or industrial
hygienist  tests air samples from the work area both during and upon  completion
of the project to monitor compliance with job specifications.

A thorough cleaning of the work area is conducted after removal,  which includes
high-efficiency  particulate  air  filter  vacuuming  and  wet  mopping  of  all
surfaces.  All  barriers  erected  during  the  asbestos-abatement  project  are
dismantled  and  disposed of in the same manner as asbestos  waste.  The Company
encapsulates  the area from which asbestos was removed by applying a penetrating
encapsulant in an effort to seal off any possible remaining fibers.

The Demolition and Dismantling Process

The Company performs commercial demolition and industrial dismantling for public
and  private  customers  throughout  the  United  States.  All  work  is done in
accordance with the specifications  prepared by the owner and in accordance with
all OSHA, EPA, and state and federal  governmental  regulations.  The Company is
also subject to the  regulations of the Mine Safety and Health Act ("MSHA") when
it conducts demolition and dismantling projects at mining locations.

The Company  performs a site  specific  safety  survey of every project prior to
beginning work. An engineering survey of the equipment, structures, or buildings
to be  dismantled  or demolished  is prepared  outlining  potential  hazards and
methods used to alleviate the hazards.  During the course of the project,  daily
safety  meetings  are  conducted  to discuss  that day's  activities,  potential
problems and measures to overcome the problems.  Industrial dismantling involves
removing  structures and equipment in  manufacturing  facilities.  The Company's
workers,  utilizing  specially-designed  equipment  and  attachments,  carefully
dismantle  the  structures  and  equipment  from  the top  down.  All  materials
dismantled are either recycled or disposed of in a licensed landfill. Commercial
demolition involves demolishing high-rise office buildings, hospitals, apartment
complexes,  and other buildings.  The Company's workers,  utilizing  specialized
equipment  and  occasionally  explosives,  demolish the buildings and remove the
debris off site. All materials  generated from demolition  activities are either
recycled or disposed of in a licensed landfill.

During  dismantling and demolition  operations,  recyclable  metals and reusable
equipment are generated.  Typically,  the Company takes title to these materials
and sells them to brokers  and end users.  Sales  proceeds  from the  recyclable
metals  and  the  reusable   equipment  are  generally  part  of  the  Company's
compensation to perform the work. After equipment, structures, and buildings are
removed in accordance with the owner's  specification,  the Company  demobilizes
its equipment and personnel from the area.

                                  Page 5 of 88
<PAGE>

Markets and Customers

The  Company's  primary  markets  for  its  asbestos-abatement,  demolition  and
dismantling and other specialty  contracting services are the states of Arizona,
California,  Georgia, Illinois,  Kentucky,  Massachusetts,  Minnesota, New York,
Pennsylvania, South Carolina and Texas. The Company's headquarters is located in
Methuen, Massachusetts, outside of Boston.

The Company  believes that its primary  clients,  which include large industrial
processing and  manufacturing  corporations,  insurance  companies,  real estate
development   companies  and  owners  and  tenants  of  large   commercial   and
governmental  facilities,  tend to emphasize quality and safety along with price
considerations  in  making  their  decision.  The  Company  typically  contracts
directly with owners,  operators or tenants of properties and works closely with
the environmental  consultant of the client in performing  removal services.  No
single  customer  accounted  for  more  than 10% of the  Company's  consolidated
revenue during 1996.

Following its  acquisition  by OHM in June 1988,  the Company  began  performing
asbestos-abatement  services for OHM,  principally  in  connection  with certain
large  industrial  decontamination  and  demolition  projects  performed by OHM.
Following  the  acquisition  of the  Division  in May 1993,  the  Company  began
providing  asbestos-abatement  services on a subcontract  basis for Rust and its
affiliates  in  connection  with certain large  industrial  decontamination  and
demolition  projects  performed by Rust. The Company provides such services on a
competitive  basis to both OHM and Rust.  Revenue for these  services to OHM and
Rust amounted to approximately $40,000 and $84,000,  respectively,  in 1996. The
Company expects to continue to provide services to OHM and Rust on a subcontract
basis, both inside and outside its primary market areas.

The  Company  divides  the  market for  asbestos-abatement  and  demolition  and
dismantling  services  into  the  following  categories:   (1)  commercial/large
residential buildings; (2) industrial facilities;  and (3) institutional,  which
includes schools, government buildings,  airports, hospitals and other buildings
not described by another category.  The following table summarizes the Company's
gross revenues by category for the periods indicated:

                                        Years Ended December 31,
                           -----------------------------------------------------
                                1996              1995                1994
                           ---------------   ---------------     ---------------
                                      (In Thousands, Except Percentages)

 Commercial  ............. $ 56,299    44%    $ 60,895    49%    $ 63,465    48%
 Industrial  .............   53,929    42       41,524    33       29,088    22
 Institutional  ..........   18,814    14       22,110    18       39,665    30
                             ------  ----     --------  ----     --------  ----
                           $129,042   100%    $124,529   100%    $132,218   100%
                           ========  ====     ========  ====     ========  ====

The Company  markets its  services  directly  to  companies  that are in need of
asbestos-abatement   and  demolition  and  dismantling   services,   to  general
contractors  who oversee  large  renovation  projects and to  asbestos-abatement
consulting  firms from which the Company  receives  asbestos  project  referrals
because of its reputation and experience.

Seasonality

The  Company's  business is subject to  variations in revenue and net income for
interim  periods  and from year to year,  and  increased  revenue may not always
result in a corresponding  increase in net income. These conditions are due to a
number of  characteristics  shared by the Company to varying  degrees  with most
other members of the industry,  including the following:  (1) its businesses are
seasonal  (typically less activity during the winter months) and are affected by
the scheduling of work at commercial  properties,  fiscal funding of projects by
government  entities,  outages at utilities  and  shutdowns at other  industrial
facilities;  (2) its asbestos business is labor intensive whereas its demolition
business is equipment intensive; (3) its performance on a given project is often
dependent on the performance of other  contractors,  who are working on the same
job, over which the Company has no control; and (4) costs ultimately incurred by
the  Company on a job may be  materially  affected  by such  risks as  technical

                                  Page 6 of 88
<PAGE>
problems, labor shortages and disputes, time extensions,  weather, delays caused
by external  sources and  fluctuations  in the prices of materials.  Revenue and
operating results of  asbestos-abatement  activities may also be affected by the
timing  of  large  contracts,  especially  if all or a  substantial  part of the
performance of such contracts occurs within one or two quarters. The revenue and
operating  results of the demolition and dismantling  activities may be affected
by fluctuations in the price of scrap metals. Accordingly,  quarterly results or
other  interim  results  should not be  considered  indicative  of results to be
expected for any other quarter or for the full fiscal year.

Competition

The market for the  Company's  services  is highly  competitive.  The  Company's
ability to  compete  as a provider  of  asbestos-abatement  and  demolition  and
dismantling services depends upon pricing its services competitively, having the
ability to respond  promptly and with adequate  amounts of  resources,  having a
reputation for quality and safety,  being able to obtain appropriate bonding and
insurance, and hiring, training and retaining qualified personnel,  particularly
in the areas of  estimating  and  project  management.  While the  Company  is a
significant participant in the asbestos-abatement and demolition and dismantling
services market, it continues to experience competition from national,  regional
and local firms, some of which have substantial resources and experience.

Insurance and Bonding

The Company has established an insurance  program that has been tailored to meet
the mutual risk  management  needs of its clients and the  Company.  The primary
package  begins with  commercial  general  liability,  automobile  liability and
workers' compensation policies. This plan is written with an A. M. Best Rated A+
XV carrier.  When the Company's umbrella policy is used, the coverage limits are
extended to  $51,000,000  per  occurrence  and  $52,000,000  general  aggregate.
Effective  November 1, 1996 the  Company's  liability per  occurrence  under the
general liability policy is $100,000,  under the automobile  liability policy is
$350,000 and under the workers' compensation policy is $500,000.

Public  asbestos-abatement  and demolition and dismantling projects require that
the Company post surety bonds as  guarantees  of  performance  of the  Company's
contracts.  The bonds are  required  to protect  the  interests  of the  general
public, as public funding is utilized in project financing. Additionally, surety
bonds also  guarantee  that the  Company  will pay all of its  bills,  including
suppliers  and  subcontractors  who are  working on  projects  for the  Company.
Similarly,  many  private  projects  also  require  surety  bonds  to  serve  as
protection and provide guarantees for private owners.

The Company has existing surety  relationships with The Insurance Company of the
State of  Pennsylvania  (American  International  Group) and Reliance  Insurance
Group.

Employees

As of March 14, 1997 the Company had  approximately  1,320  employees,  of which
approximately  80 are  employed  as  managers or  executives,  approximately  30
provide  technical or  engineering  services,  approximately  60 are employed in
sales,  clerical and data  processing  activities  and  approximately  1,150 are
employed in other capacities,  principally hourly labor. During 1996, the number
of  hourly-rate  employees  ranged  from  750 to  1,420.  As of March  14,  1997
approximately 600 of the Company's  employees were represented by various unions
under numerous  collective  bargaining  agreements.  The Company is a party to a
number of collective  bargaining  agreements with several unions which represent
employees  based upon  geographic  area or the nature of work  performed by such
employees.  Such collective  bargaining  agreements expire at various times. The
Company  considers its relations with its employees to be  satisfactory  and has
not experienced any work stoppages or slowdowns.

Patents and Service Marks

The Company currently does not own any patents or service marks.

                                  Page 7 of 88
<PAGE>

Government Regulation

The  asbestos-abatement  and demolition and dismantling  process is regulated by
the  federal   government   through  the  EPA,   OSHA  and  the   Department  of
Transportation ("DOT").  Additionally, the demolition and dismantling process is
regulated by MSHA when conducted at mining locations.  EPA regulations establish
standards for the control of asbestos fiber and airborne lead emissions into the
environment during removal and demolition  projects.  AHERA mandates that public
schools  inspect  for levels of  asbestos  contamination  and prepare a specific
management plan for appropriate  remedial  action.  OSHA  regulations  establish
maximum airborne  asbestos fiber,  airborne lead and heavy metal exposure levels
applicable to asbestos and  demolition  employees and set standards for employee
protection during the demolition,  removal or encapsulation of asbestos, as well
as storage,  transportation  and final  disposition  of asbestos and  demolition
debris.

EPA regulations under the Clean Air Act include  requirements for wetting of the
asbestos-containing  material,  the use of exhaust  ventilation  and  filtration
systems  meeting certain  specifications,  and procedures for  transporting  and
disposing of  asbestos-containing  material.  Prior to  commencing  most removal
projects,  contractors are required to provide the EPA with written notification
containing  certain  information,  including  the  address of the  project,  the
anticipated starting and completion dates, methods to be used to comply with the
emission standards,  the amount of asbestos-containing  material involved in the
project and the location of the EPA-approved disposal site.

The Toxic  Substances  Control  Act  ("TSCA"),  as  amended  by  AHERA,  and the
regulations  promulgated  pursuant  thereto,  require  inspection of schools for
asbestos  and public  notice of the  inspection  results,  which  often leads to
demands for abatement. In addition, TSCA imposes asbestos exposure standards for
state and local government employees. The EPA has also adopted regulations under
AHERA which  require  schools to use  accredited  inspectors  to inspect  school
buildings for asbestos-containing  materials.  If asbestos-containing  materials
are found and are damaged,  the school must develop an asbestos  management plan
which outlines its management practices for the materials.  Response actions may
include encapsulation,  enclosure,  repair or removal of the asbestos-containing
materials by an accredited contractor.  The AHERA regulations impose affirmative
obligations  on the  accredited  contractor  who  performs  the  work on  school
building  projects.  These  obligations  include  proper  worker,  employee  and
occupant  protections.  In addition,  AHERA  incorporated the OSHA standards for
packaging,   transportation   and   disposal   of   asbestos   waste.   If   the
asbestos-containing material is not damaged, continued inspection and monitoring
by the school is required.

OSHA regulations  establish maximum airborne  asbestos,  airborne lead and heavy
metal   exposure   levels   in   the   workplace   for   employees,    including
asbestos-abatement  and demolition and  dismantling  workers.  Such  regulations
require  workplace air  monitoring to ensure  compliance  with maximum  exposure
levels and prescribe  engineering  controls and workplace  practices intended to
reduce  airborne  asbestos,  lead and heavy  metal  exposure  in the  workplace.
Included in the workplace practice provisions is the required use of appropriate
respirators,   protective   clothing   and   decontamination   units   for   the
asbestos-abatement  and  demolition  and  dismantling  worker exposed to certain
levels of asbestos or lead and heavy metals.

DOT  regulations  cover the  management  of the  transportation  of asbestos and
demolition  debris and establish certain  certification,  labeling and packaging
requirements.  In  addition,  under the  Comprehensive  Environmental  Response,
Compensation and Liability Act, also known as the Superfund Act, companies which
arrange for the  transportation  and disposal of asbestos waste materials may be
exposed to liability  relating to the  disposal of such  material at sites which
are or may be designated as national priority list sites.

Each of the states in which the Company currently operates have adopted laws and
regulations governing the conduct of asbestos-abatement  contractors.  Such laws
and   regulations    generally   require   the   training   and   licensing   of
asbestos-abatement   contractors   and  their  workers  and  notice  before  the
commencement  of  any  asbestos-abatement   project  and  specify  standards  of
performance for the asbestos removal process. In addition, some states authorize
municipalities to adopt more stringent standards.

The Company  believes that  additional  state and local  authorities  will adopt
similar laws and regulations and that existing laws and regulations  will become
more restrictive.  The regulations  concerning  asbestos-abatement are primarily
promulgated  on the state and local level. Although subject to change,  OSHA has

                                  Page 8 of 88
<PAGE>
adapted the final  regulations as law. Many of the  regulations  are complex and
frequently  amended and,  therefore,  the Company is unable to predict  what, if
any, impact such regulations will have on its results of operations or financial
condition.  As a  result  of the  extensive  regulation,  the  Company  and  its
subsidiaries  are,  have been and may in the  future  be,  subject to audits and
investigations by federal, state and local governmental agencies. Because of the
changing  regulatory  environment,  there can be no assurance that violations by
the  Company of  federal,  state or local  laws and  regulations  applicable  to
asbestos  removal  will not occur in the future or that changes in such laws and
regulations would not have an adverse effect on the Company's business.  Failure
to comply with regulations  could result in the imposition of civil and criminal
penalties,  any of which could have a material adverse effect upon the Company's
business.

Licensing Requirements

Most  states in which the  Company  operates  require  that the  Company  obtain
asbestos licenses to provide asbestos-abatement services and contractor licenses
to provide  demolition and  dismantling  services.  These licenses are generally
subject to annual  renewal.  The  Company has been able to obtain the renewal of
its licenses without unusual  difficulty or delay, and the Company believes that
it is in substantial  compliance with all current state  licensing  requirements
where the Company intends to conduct business. In addition,  certain states have
adopted regulations which require state-specific training, testing and licensing
of  employees  engaging in  asbestos-abatement  or  demolition  and  dismantling
activities.

Backlog

The majority of the Company's  asbestos-abatement and demolition and dismantling
services  are  contracted  on a  fixed-price  basis,  while  the  remainder  are
contracted  either on a time and materials or a unit-price  basis.  The unearned
services  portion  of  the  Company's   asbestos-abatement  and  demolition  and
dismantling services contracts and unfilled orders was approximately $38,875,000
for 1996  and  $47,466,000  for both  1995 and  1994.  Up to  $1,650,000  of the
Company's  backlog at  December  31,  1996 may not be earned  during  1997.  The
remaining amount of the Company's backlog at December 31, 1996 is expected to be
completed in the current calendar year.

                                  Page 9 of 88
<PAGE>

Item 2.  Properties

The Company currently owns and leases property to support its operations.  These
facilities  provide  space for  sales and  marketing  functions  and  operations
management and support.  The Company  believes that its existing  facilities are
adequate to meet current requirements and that suitable additional or substitute
space will be available as needed to accommodate any expansion of operations and
for additional offices. The following table summarizes the Company's properties:
--------------------------------- ----------------------------------------------
Location              Principal Use            Acreage  Square Footage Own/Lease
--------------------------------------------------------------------------------
Methuen, MA           Corporate Headquarters      9        40,000         Own
                      Offices and Warehousing
--------------------------------------------------------------------------------
So. Windsor, CT       Offices                    --          *            Lease
--------------------------------------------------------------------------------
Thorofare, NJ         Offices and Warehousing    --        17,570         Lease
--------------------------------------------------------------------------------
San Antonio, FL       Offices and Warehousing    --         5,400         Lease
--------------------------------------------------------------------------------
Winfield, WV          Offices and Warehousing    --         5,000         Lease
--------------------------------------------------------------------------------
Cincinnati, OH        Offices and Warehousing    --         7,400         Lease
--------------------------------------------------------------------------------
Lombard, IL           Offices                    --         5,000         Lease
--------------------------------------------------------------------------------
Arden Hills, MN       Offices and Warehousing    --         8,400         Lease
--------------------------------------------------------------------------------
Maryland Heights, MO  Offices                    --         1,900         Lease
--------------------------------------------------------------------------------
Salem, NH             Offices                    --         3,850         Lease
--------------------------------------------------------------------------------
Houston, TX           Offices and Warehousing    --        24,240         Lease
--------------------------------------------------------------------------------
Orange, TX            Offices                    --          *            Lease
--------------------------------------------------------------------------------
Dallas, TX            Offices                    --          *            Lease
--------------------------------------------------------------------------------
Oakland, CA           Offices and Warehousing    --        11,100         Lease
--------------------------------------------------------------------------------
Salisbury, NC         Offices and Warehousing    --         5,400         Lease
--------------------------------------------------------------------------------
Baton Route, LA       Offices and Warehousing    --         1,250         Lease
--------------------------------------------------------------------------------


* These facilities consist of less than 1,000 square feet.


The Company's  aggregate  rental  payments for leased office and warehouse space
approximated $835,000 in 1996.

                                 Page 10 of 88
<PAGE>

Item 3.  Legal Proceedings

The Company has been advised by the Department of Justice,  Environmental Crimes
Section,  that the previously reported grand jury investigation  relating to the
operational  activities involving a subsidiary of the Company as a subcontractor
at the Weldon  Springs Site  Remedial  Action  Project has been  concluded.  The
Company has been further  advised by the  Department  of Justice,  Environmental
Crimes Section, that no action will be forthcoming against either the Company or
its subsidiary as a result of the aforementioned  investigation.

The Company is also subject to certain other legal proceedings,  including those
relating to  regulatory  compliance,  in the  ordinary  course of its  business.
Management believes that such other proceedings are either adequately covered by
insurance or if uninsured,  will not, in the aggregate,  have a material adverse
effect upon the Company.

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

Not applicable.

                                 Page 11 of 88
<PAGE>

Executive Officers of the Registrant

The executive officers of the Company as of March 14, 1997 are listed below:

Victor J. Barnhart        54    Chairman and Chief Executive Officer
Darryl G. Schimeck        36    President and Chief Operating Officer
J. Drennan Lowell         40    Vice President, Chief Financial Officer,
                                Treasurer  and Secretary
Efstathios A. Kouninis    35    Corporate Controller

Victor J. Barnhart has been Chairman and Chief Executive  Officer since December
5, 1996.  Prior to  joining  the  Company  Mr.  Barnhart  was the  President  of
Integrated  Environmental  Services - WMX  Technologies  since December 1995 and
President of Rust  Industrial  Services Inc. and Rust Remedial  Services,  Inc.,
subsidiaries of WMX Technologies, since November 1990.

Darryl G. Schimeck has been President and Chief Operating Officer since December
5,  1996  and  served  as  President  of  National  Surface  Cleaning,  Inc.,  a
wholly-owned  subsidiary of the Company, since July 10, 1995 and Vice President,
Sales and  Marketing,  since February  1995.  Prior to joining the Company,  Mr.
Schimeck served as Senior Vice President of Growth Environmental  Services, Inc.
from August 1994 through January 1995. Prior to that, Mr. Schimeck was President
of Rust  Scaffold  Rental and  Erection,  Inc. from July 1993 through July 1994.
From  September  1992 to July 1993 he was Vice  President - Northern  Region for
Brand Scaffold Services, Inc.

J. Drennan Lowell has been Vice President, Chief Financial Officer and Secretary
since November 1993 and Treasurer since May 1994.  Prior to joining the Company,
Mr.  Lowell  served as Vice  President  of Finance  for  Wheelabrator  Clean Air
Systems Inc.  from December  1992 to November  1993 and for  Wheelabrator  Clean
Water Systems Inc. from August 1991 to November 1993.

Efstathios A. Kouninis has been  Corporate  Controller  since  February 1996 and
Director of Tax and Internal Audit since  September  1994.  Prior to joining the
Company,  Mr.  Kouninis  served in positions  of  increasing  responsibility  in
accounting for Wheelabrator Technologies Inc. since November 1991.

                                 Page 12 of 88
<PAGE>

Part II

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

The  Common  Stock is  admitted  for  trading  on the  National  Association  of
Securities   Dealers  Automatic   Quotation   System,   National  Market  System
("NASDAQ").  As of March 14, 1997 there were  approximately 38 holders of record
of the Common Stock.  During December 1996, the Company declared and paid a cash
dividend of $0.15 per share of common stock.  Pursuant to the  Revolving  Credit
Facility,  as amended,  the Company must comply with certain financial covenants
for the declaration and payment of any cash dividends. While the Company's Board
of  Directors  has not  established  a  policy  concerning  payment  of  regular
dividends, it intends to review annually the feasibility of declaring additional
dividends depending upon the results of operations, financial condition and cash
needs of the Company. The Common Stock does not have any preemptive rights.

The table below sets forth, for the calendar  quarters  indicated,  the reported
high and low  closing  sales  prices of the Common  Stock as  reported by NASDAQ
based on published financial sources:

                                     1996                    1995
                                --------------         --------------
    Quarter Ended                 High    Low            High    Low
    -----------------------------------------------------------------
    December 31..............    2 1/2    1 3/8          2 3/4   1 3/32
    September 30.............    2        1 1/2          3       2
    June 30..................    2 1/2    1 1/4          3 3/8   2 1/2
    March 31.................    2 1/2    1 1/8          3 1/2   2 1/2

                                 Page 13 of 88
<PAGE>
<TABLE>
<CAPTION>
Item 6. Selected Financial Data

(a) The Consolidated  Five year Summary of Results of Operations for each of the
five years ended December 31 is set forth below:

(In thousands, except per-share data)
Years Ended December 31,                                            1996          1995          1994        1993(1)        1992(2)
--------------------------------------------------------------    --------      --------      --------      --------      --------

<S>                                                               <C>           <C>           <C>           <C>           <C>
Revenue.......................................................    $129,043      $124,529      $132,218      $110,254      $ 62,220

Discontinued operations, net of income tax effects:
 Income from operations.......................................           -             -             -             -           174
 Provision for loss on disposition............................           -             -             -             -          (600)
                                                                  --------      --------      --------      --------      --------
   Income (loss) before cumulative effect of accounting change           -             -             -             -        (2,030)
Cumulative effect of accounting change........................           -             -             -             -        (1,000)
                                                                  --------      --------      --------      --------      --------
   Net income (loss)..........................................    $  1,861      $    715      $  2,566      $  3,373      $ (3,030)
                                                                  ========      ========      ========      ========      ========
Net income (loss) per share ( 3 )
   Continuing operations......................................    $   0.19      $   0.07      $   0.26      $   0.40      $  (0.28)
   Discontinued operations:
     From operations..........................................           -             -             -             -          0.03
     From disposition.........................................           -             -             -             -         (0.10)
Cumulative effect of accounting change........................           -             -             -             -         (0.18)
                                                                  --------      --------      --------      --------      --------
                                                                  $   0.19      $   0.07      $   0.26      $   0.40      $  (0.53)
                                                                  ========      ========      ========      ========      ========

Weighted average number of common
 shares outstanding...........................................       9,971         9,971         9,971         8,504         5,735
                                                                  ========      ========      ========      ========      ========

Cash dividends declared per common share (4)..................    $   0.15      $   0.15      $   0.15      $   1.20      $      -
                                                                  ========      ========      ========      ========      ========
</TABLE>
<TABLE>
<CAPTION>

  (b)  The consolidated five year summary of financial position as of December 31 is set forth below:

December 31,                                                        1996          1995          1994          1993          1992
-------------------------------------------------------------     --------      --------      --------      --------      --------
                                                                                           (In Thousands)
<S>                                                               <C>           <C>           <C>           <C>           <C>
Total assets.................................................     $ 85,225      $ 87,161      $ 88,287      $ 93,569      $ 68,264
Non current liabilities, including current portion
   of long-term debt (5).....................................        7,611         7,421        10,588        13,775        15,848

</TABLE>

                                 Page 14 of 88
<PAGE>

(1) The  statement  of  operations  data for the year ended  December  31,  1993
includes the results of operations from May 4, 1993 (date of acquisition) of the
Division.

(2) The results of continuing  operations  for the year ended  December 31, 1992
include pre-tax special charges totaling $5 million ($3.1 million after-tax), or
$0.53 per share,  related to restructuring  of the Company's  asbestos-abatement
business and reserves for insurance and certain other  matters.  The  cumulative
effect of  accounting  change of $1  million,  or $0.18 per share,  is for early
adoption of Financial  Accounting Standards Board Statement No. 109, "Accounting
For Income  Taxes." In addition,  the results of  operations  for the year ended
December 31, 1992 include the provision for loss on  disposition,  net of income
tax benefit, of the Company's industrial cleaning services business.

(3) The net income per share  amounts have been  computed by dividing net income
by the  average  number of  common  shares  outstanding  during  the  respective
periods.

(4) In  December  1996,  1995 and 1994,  the  Company  declared  and paid a cash
dividend of $0.15 per common share and $1.20 per common share in December 1993.

(5) In December 31, 1992,  $14,850,000 of the noncurrent liabilities are amounts
due to OHM. On May 4, 1993 all  outstanding  amounts due to OHM were repaid with
term loan  borrowings  under a senior  revolving  credit facility with banks. On
March 21,  1996 the amount due to the banks  under the senior  revolving  credit
facility was repaid in full.

                                 Page 15 of 88
<PAGE>

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

                                 1996 vs. 1995
                              Continuing Operations

Revenue. The Company's consolidated revenue for the year ended December 31, 1996
increased 3.6% to $129,043,000  from  $124,529,000  for the same period in 1995.
This increase was due to the inclusion in 1996 of a full year of ODMI  generated
revenue of  $21,421,000  compared  with  $7,589,000  for the four  months  ended
December 31, 1995 and the $9,895,000 decline in asbestos-abatement  revenue. The
decline  in  asbestos-abatement  revenue  in 1996 was  primarily  due to  normal
fluctuations in the volume of abatement work available, as well as the Company's
increased selectivity in accepting profitable projects.

Gross Profit. Gross profit as a percentage of revenue increased to 17.5% in 1996
from  15.6% in 1995.  The  increase  in the gross  profit  margin  is  primarily
attributable to a reduction of insurance claims and their respective  settlement
reserves.

Selling,   General   and   Administrative   Expenses.   Selling,   general   and
administrative  ("SG&A") expenses for the year ended December 31, 1996 increased
$78,000 or less than 1% to $16,431,000  from  $16,353,000 for the same period in
1995.  SG&A  expenses  as a  percentage  of revenue  for 1996 and 1995  remained
constant  at 13%.  In 1996  ODMI  incurred  a full  year  of  SG&A  expenses  of
$1,814,000  compared with four months in 1995 of $714,000.  The increase of ODMI
expenses for 1996 was offset by a general  reduction in SG&A expenses  resulting
from the Company's continued cost containment efforts.

Other Operating Expenses. Other operating expenses in 1996 increased to $700,000
from  $169,000 in 1995 due to the  inclusion of a full year of ODMI  activities.
ODMI is required to pay Rust an annual fee based on operating profit, if any, in
exchange for the right to operate ODC.

Other (Income)  Expenses.  Other (income) expenses in 1996 increased to $635,000
from $191,000 in 1995. In the fourth quarter of 1996, the Company  wrote-down to
market the value of certain  real  property  that no longer  fits its  strategic
plans.  The  write-down of the property  amounted to $625,000.  This increase in
other  expenses  was  partially  offset by the  reduction  in  interest  expense
associated with the Company's  long-term debt, which was repaid in full on March
21, 1996.

Net Income.  Net income  increased  160% to  $1,861,000 in 1996 from $715,000 in
1995. Net income as a percentage of revenue  increased to 1.4% in 1996 from 0.6%
in 1995.  The increase in net income is  attributable  to higher revenue and the
reduction of interest expense and insurance settlement reserves.


                                  1995 vs. 1994
                              Continuing Operations

Revenue.  Revenue  for  the  year  ended  December  31,  1995  decreased  6%  to
$124,529,000  from  $132,218,000  for the same period in 1994.  The  decrease in
revenue  during  1995 was due in part to market  fluctuations  in the  volume of
abatement work performed,  as well as to increased  selectivity in the Company's
bidding process.  The decrease in revenue was offset in part by the inclusion in
1995 of $7,589,000 revenue generated by ODMI activities.

Gross Profit. Gross profit for the year ended December 31, 1995 decreased 10% to
$19,447,000  from  $21,716,000  for the same period in 1994.  Gross  profit as a
percentage  of  revenue  decreased  to 15% for 1995 from 16% for 1994,  due to a
significant  extent to a change in the mix of projects  undertaken and increased
provisions for indemnity and workers' compensation losses in connection with the
unfavorable resolution in 1995 of two significant claims.

                                 Page 16 of 88
<PAGE>

Selling,   General   and   Administrative   Expenses.   Selling,   general   and
administrative  ("SG&A") expenses for the year ended December 31, 1995 increased
$805,000,  or 5%, to $16,353,000  from  $15,548,000 for the same period in 1994.
SG&A expenses, as a percentage of revenue, were 13% for 1995 compared to 12% for
the same period in 1994, primarily due to a reduced revenue base and legal costs
related to the Weldon Springs grand jury investigation.
(See "Item 3. Legal Proceedings".)

Other Operating  Expenses.  In April 1995, the Company entered into an Operating
Agreement  with  Rust  under  which  the  Company,  through  ODMI,  assumed  the
management of ODC, a Rust subsidiary specializing in demolition and dismantling,
primarily in the  industrial  market.  In exchange for the right to operate ODC,
the Company is required to pay Rust an annual fee based on operating  profit, if
any, which amounted to $169,000 in 1995.

Other (Income) Expenses. Other (income) expenses for the year ended December 31,
1995 were  $191,000  compared to $418,000  for the same period in 1994.  The net
decrease of $227,000 is primarily  attributable to lower interest expense due to
scheduled and unscheduled reductions in the Company's long-term debt.

Net Income. The Company recorded net income of $715,000, or $0.07 per share, for
the year ended December 31, 1995 compared to $2,566,000, or $0.26 per share, for
the same period in 1994.  Net income as a percentage of revenue for December 31,
1995 decreased by less than 1% as compared to the same period in 1994,  which is
directly  related to the  decrease in revenue and  increases  in direct and SG&A
costs as a percentage of these revenues.

Liquidity and Capital Resources

Working capital at December 31, 1996 was $21,154,000  compared to $17,339,000 at
December 31, 1995.  The current ratio was 2.1/1 at December 31, 1996 compared to
1.7/1 at December 31, 1995. Cash provided by operating activities was $6,752,000
for 1996  compared to  $2,125,000  for 1995.  The  increase in cash  provided by
operations  is  primarily  due to increased  billings  and  accounts  receivable
collections.  During 1996, cash of $2,024,000 was used for purchases of property
and  equipment,  of which  $769,000 was used towards the  implementation  of new
software  technology.  During 1997  the  Company  estimates  that it will  spend
an additional $600,000 to complete  the implementation  and bring this  software
on-line by the early part of 1998.  Also in 1996,  cash of $618,000 was used for
the  acquisition  of the  assets of Safe Air Inc.,  a leader in the  indoor  air
quality  industry,  $100,000  was used for  other  acquisition  activities,  and
$5,850,000 was used for repayment of the Company's  long-term debt.  Pursuant to
the Olshan Business Operating  Agreement,  dated April 20, 1995, the Company has
received to date a $4,520,000  interest-free  working  capital loan. The loan is
payable  according to the provisions  contained in the Agreement and is expected
to remain outstanding for the full ten year term of the Agreement.

The Company  believes that its cash flows from  operations  and funds  available
under the existing  senior  revolving  credit  facilities,  as amended on May 1,
1996,  will be  sufficient  throughout  the next  twelve  months to finance  its
working  capital  needs and planned  capital  expenditures.  While the Company's
Board of Directors has not  established a policy  concerning  payment of regular
dividends, it intends to review annually the feasibility of declaring additional
dividends depending upon the results of operations, financial condition and cash
needs of the Company.

In connection  with the  acquisition of the Division,  Rust (successor to Brand)
has  provided  the Company  with a $25 million  revolving  credit  facility.  No
amounts were borrowed under this revolving  credit facility during 1996, 1995 or
1994. This revolving credit facility terminated June 6, 1996.

The nature and scope of the  Company's  business  bring it into regular  contact
with the general  public and a variety of businesses  and  government  agencies.
Such  activities  inherently  subject the Company to the hazards of  litigation,
which are defended in the normal  course of  business.  While the outcome of all
claims is not clearly determinable at the present time,  management has recorded
an estimate of any losses it expects to incur in connection  with the resolution
of the claims at December  31, 1996 of  $5,410,000  and at December  31, 1995 of
$6,694,000.

Inflation

Historically, inflation has not had a significant impact upon the Company or its
cost of operations.
                                 Page 17 of 88
<PAGE>

Item 8.  Financial Statements and Supplementary Data

The consolidated  financial statements and supplementary  consolidated quarterly
financial data of the Company and its  subsidiaries for the years ended December
31, 1996, 1995 and 1994 are set forth on pages 19 through 22.

                                 Page 18 of 88
<PAGE>

NSC CORPORATION
CONSOLIDATED BALANCE SHEETS
(In Thousands, Except Share and Per-Share Data)


                                                              December 31,
                                                         ---------------------
                                                          1,996         1995
ASSETS                                                   -------       -------
Current assets:
   Cash and cash equivalents..........................   $ 3,975       $ 4,094
   Accounts receivable, net...........................    26,859        27,125
   Costs and estimated earnings on contracts
     in process in excess of billings.................     7,739         7,894
   Inventories........................................       878         1,041
   Prepaid expenses and other current assets..........     1,672         1,559
   Refundable income taxes............................         -            92
                                                         -------       -------
                                                          41,123        41,805

Property and equipment, net...........................     7,352         8,484

Other noncurrent assets:
  Goodwill, net of accumulated amortization of
    $6,884 and $5,787 in 1996 and 1995, respectively..    36,275        36,872
     Other assets.....................................       475             -
                                                         -------       -------
                                                          36,750        36,872
                                                         -------       -------
   Total assets.......................................   $85,225       $87,161
                                                         =======       =======
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
   Accounts payable...................................   $ 3,448       $ 3,063
   Billings in excess of costs and estimated
     earnings on contracts in process.................     5,237         3,932
   Accrued compensation and related costs.............     3,898         3,751
   Federal, state and local taxes.....................       887           250
   Other accrued liabilities..........................     1,089           926
   Reserve for self insurance claims
     and other contingencies..........................     5,410         6,694
   Current portion of noncurrent liabilities..........         -         5,850
                                                         -------       -------
                                                          19,969        24,466
Noncurrent liabilities:
   Payable to affiliate...............................     4,520         1,571
   Deferred income taxes..............................     3,090         3,843

Stockholders' equity:
   Preferred stock $.01 par value, 10,000,000 shares
     authorized, none issued and outstanding..........         -             -
   Common stock $.01 par value, 20,000,000 shares
     authorized, 9,971,175 shares issued and
     outstanding in both 1996 and 1995................       100           100
   Additional paid-in capital.........................    56,079        56,079
   Retained earnings..................................     1,467         1,102
                                                         -------       -------
                                                          57,646        57,281
                                                         -------       -------
   Total liabilities and stockholders' equity.........   $85,225       $87,161
                                                         =======       =======

The  accompanying  notes are an integral  part of these  consolidated  financial
statements.

                                 Page 19 of 88
<PAGE>

<TABLE>
<CAPTION>
NSC CORPORATION
CONSOLIDATED STATEMENTS OF OPERATIONS
(In Thousands, Except Per-Share Data)

                                                                Years Ended December 31,
                                                         --------------------------------------
                                                           1996           1995           1994
                                                         --------       --------       --------
<S>                                                      <C>            <C>            <C>
 Revenue...............................................  $129,043       $124,529       $132,218
Cost of  services.....................................    106,454        105,082        110,502
                                                         --------       --------       --------
   Gross profit.......................................     22,589         19,447         21,716
Selling, general and administrative expenses..........     16,431         16,353         15,548
Other operating expenses..............................        700            169              -
Goodwill amortization.................................      1,097          1,066          1,067
                                                         --------       --------       --------
                                                            4,361          1,859          5,101
                                                         --------       --------       --------
Other:
  Interest expense....................................        112            587            804
  Other expenses......................................        523           (396)          (386)
                                                         --------       --------       --------
                                                              635            191            418
                                                         --------       --------       --------
   Income before income taxes.........................      3,726          1,668          4,683
Income taxes..........................................      1,865            953          2,117
                                                         --------       --------       --------
   Net income.........................................   $  1,861       $    715       $  2,566
                                                         ========       ========       ========

Net income per share..................................   $   0.19       $   0.07       $   0.26
                                                         ========       ========       ========

Weighted-average number of common shares outstanding..      9,971          9,971          9,971
                                                         ========       ========       ========
</TABLE>

The  accompanying  notes are an integral  part of these  consolidated  financial
statements.

                                 Page 20 of 88
<PAGE>
<TABLE>
<CAPTION>
NSC CORPORATION
CONSOLIDATED STATEMENTS OF CHANGES IN STOCKHOLDERS' EQUITY
(In Thousands, Except Per-Share Data)


                                                  Common Stock
                                              --------------------     Additional                    Total
                                              Number of                  Paid-in      Retained    Stockholders'
                                                Shares      Amount       Capital      Earnings       Equity
                                               -------      ------      --------      --------      --------
<S>                                              <C>        <C>         <C>           <C>           <C>
Balance at January 1, 1994..................     9,971      $  100      $ 56,079      $    813      $ 56,992
Net income..................................         -           -             -         2,566         2,566
Cash dividend declared ($0.15 per share)....         -           -             -        (1,496)       (1,496)
                                               -------      ------      --------      --------      --------
Balance at December 31, 1994................     9,971      $  100      $ 56,079      $  1,883      $ 58,062
                                               -------      ------      --------      --------      --------
Net income..................................         -           -             -           715           715
Cash dividend declared ($0.15 per share)....         -           -             -        (1,496)       (1,496)
                                               -------      ------      --------      --------      --------
Balance at December 31, 1995................     9,971      $  100      $ 56,079      $  1,102      $ 57,281
                                               -------      ------      --------      --------      --------
Net income..................................         -           -             -         1,861         1,861
Cash dividend declared ($0.15 per share)....         -           -             -        (1,496)       (1,496)
                                               -------      ------      --------      --------      --------
Balance at December 31, 1996................     9,971      $  100      $ 56,079      $  1,467      $ 57,646
                                               =======      ======      ========      ========      ========
</TABLE>

The  accompanying  notes are an integral  part of these  consolidated  financial
statements.

                                 Page 21 of 88
<PAGE>
<TABLE>
<CAPTION>
NSC CORPORATION
CONSOLIDATED STATEMENTS OF CASH FLOWS
(In Thousands)


                                                                Years Ended December 31,
                                                         --------------------------------------
                                                           1996           1995           1994
                                                         --------       --------       --------
  Cash flows from operating activities:
<S>                                                       <C>            <C>            <C>
    Net income .........................................  $ 1,861        $   715        $ 2,566
    Adjustments to reconcile net income to net cash
      provided by operating activities:
         Depreciation...................................    1,716          1,830          2,160
         Goodwill amortization..........................    1,097          1,066          1,067
         Deferred income taxes..........................     (771)        (1,034)         1,072
         Loss (gain) on disposition of property
           and equipment................................      194            (36)          (123)
         Loss on impairement of assets held for sale....      625              -              -
    Changes in assets and liabilities, net of effects
      of acquired business:
    Accounts receivable, net............................      266           (984)         2,943
    Costs and estimated earnings on contracts
     in process in excess of billings...................      155         (2,283)        (1,048)
    Other current assets................................      235            487          3,884
    Accounts payable....................................      385           (176)        (1,677)
    Billings in excess of costs and estimated
     earnings on contracts in process...................    1,305         (1,559)          (471)
    Other current liabilities...........................     (316)         4,061         (2,197)
    Other...............................................        -             38             14
                                                          -------        -------        -------
         Net cash provided by operating activities......    6,752          2,125          8,190
                                                          -------        -------        -------
Cash flows from investing activities:
    Purchases of property and equipment.................   (2,024)          (759)          (814)
    Proceeds from sale of property and equipment........      268            144            350
    Acquisiton of other assets..........................     (718)             -              -
                                                          -------        -------        -------
         Net cash used in investing activities..........   (2,474)          (615)          (464)
                                                          -------        -------        -------
Cash flows from financing activities:
    Payments on long-term debt..........................   (5,850)        (4,738)        (3,187)
    Proceeds of loan from affiliate.....................    2,949              -              -
    Cash dividend paid..................................   (1,496)        (1,496)        (1,496)
                                                          -------        -------        -------
         Net cash used in financing activities..........   (4,397)        (6,234)        (4,683)
                                                          -------        -------        -------
         Net increase (decrease) in cash
           and cash equivalents.........................     (119)       (4,724)          3,043
    Cash and cash equivalents at beginning of periods...    4,094          8,818          5,775
                                                          -------        -------        -------
    Cash and cash equivalents at end of periods.........    3,975          4,094          8,818
                                                          =======        =======        =======
</TABLE>
The  accompanying  notes are an integral  part of these  consolidated  financial
statements.

                                 Page 22 of 88
<PAGE>

NSC Corporation
Notes to Consolidated Financial Statements
December 31, 1996

Note 1 - Organization and Summary of Significant Accounting Policies

Organization and Basis of Presentation. The accompanying  consolidated financial
statements  include the  accounts of NSC  Corporation  (the  "Company")  and its
wholly-owned  subsidiaries,  National Surface Cleaning, Inc. ("NSCI"),  National
Service Cleaning Corp.  ("NSCC"),  NSC Energy  Services,  Inc.  ("NSCESI"),  NSC
Specialty  Coatings,  Inc.   ("NSCSCI")  and  since  September  4,  1995  Olshan
Demolishing  Management,  Inc.  ("ODMI")  -  see  Note  9 -  "Transactions  with
Affiliates".   All   intercompany   transactions   have   been   eliminated   in
consolidation.  The  Company  is  a  Delaware  corporation  and  was  a  seventy
percent-owned  subsidiary of OHM Corporation ("OHM") through May 3, 1993. On May
4, 1993 pursuant to a Purchase Agreement among the Company, Industrial, OHM, The
Brand Companies, Inc. ("Brand") and Waste Management, Inc. ("WMI"), now known as
WMX Technologies,  Inc., the Company acquired the asbestos-abatement division of
Brand (the  "Division") in exchange for 4,010,000 shares of the Company's common
stock and all the common stock of Industrial.  As of December 31, 1996 and 1995,
OHM and Rust  International  Inc. (a successor  company to Brand and hereinafter
referred to as "Rust") each owned  approximately  forty percent of the Company's
common stock.

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 may differ from those  estimates,  and such
differences may or may not be material.

Revenue and Cost  Recognition.  The Company primarily  derives its revenues from
providing  asbestos-abatement,  demolition and  dismantling  and other specialty
contracting  services  under  fixed-price,  time and  materials  and unit  price
contracts. In addition, certain revenue is derived from the sale of scrap metals
and processing  equipment removed from demolition sites. The Company  recognizes
revenues and related income from its fixed- and unit-price  contracts in process
using the percentage-of-completion  method of accounting. The Company determines
the  percentage-of-completion  of its contracts by comparing  costs  incurred to
date to total estimated costs.  Revenues from time and  material-type  contracts
are  recorded  based  on cost  incurred.  Provisions  for  estimated  losses  on
uncompleted  contracts  are  made  in  the  period  in  which  such  losses  are
determined.  Revenues  are  recognized  for amounts  under  pending  claims when
management  believes it is probable the claim will result in additional contract
revenues and the amount can be reliably  estimated.  Contract  costs include all
direct  labor,  material,  per diem,  subcontract  and other direct and indirect
costs related to the contract performance.  Selling,  general and administrative
expenses are charged to expense as  incurred.  The asset,  "costs and  estimated
earnings on contracts  in process in excess of  billings,"  represents  revenues
recognized in excess of amounts billed. The liability, "billings on contracts in
process  in excess of costs and  estimated  earnings,"  represents  billings  in
excess of revenues recognized.

Direct  Subcontract  Costs. The Company  incurs a  substantial  amount of direct
subcontract  costs which are passed  through to its clients.  These costs result
from  the use of  subcontractors  on  projects  for  labor,  transportation  and
disposal of asbestos materials,  analytical and restoration services,  and other
removal-related   services.  The  direct  subcontract  costs  were  $25,240,000,
$24,426,000  and  $23,672,000  for 1996,  1995 and 1994,  respectively,  and are
included in Costs of Services in the 1996 Consolidated Statement of Income.

Inventories.  Inventories primarily consist of operating supplies and are stated
at the lower of cost or market. Cost is determined using the first-in, first-out
(FIFO) method.

Property and Equipment.  Property and equipment are stated at cost. Depreciation
is provided  over the estimated  useful lives (3 to 30 years) of the  respective
assets using the straight-line method.

Goodwill.  Goodwill is  amortized,  generally, on a  straight-line  basis over a
40-year  life and is reviewed on an ongoing  basis by the  Company's  management
based on several  factors,  including the Company's  projection of  undiscounted
operating  cash  flows.  If an  impairment  of the  carrying  value  were  to be
indicated  by this  review,  the  Company  would  adjust the  carrying  value of
goodwill to its  estimated  fair value.

                                 Page 23 of 88
<PAGE>

Long-Lived  Assets.  The  adoption by the  Company  in  1996 of  SFAS  No.  121,
"Accounting  for the impairment of Long-Lived  Assets to be Disposed Of" did not
materially affect the Company's consolidated financial statements.  In the event
that  facts and  circumstances  indicate  that any of the  Company's  long-lived
assets may be impaired,  an evaluation of recoverability would be performed.  If
after such evaluation it is determined  that an asset is impaired,  the carrying
value of the asset would be reduced to fair value.

Income Taxes. The Company provides for income taxes based upon earnings reported
for  financial  statement  purposes.  Deferred  tax assets and  liabilities  are
determined based on temporary  differences  between the financial  reporting and
tax base of assets and liabilities.

Stock Compensation.  Effective January 1, 1996 the Company adopted SFAS No. 123,
"Accounting for Stock-Based Compensation." SFAS No. 123 requires the recognition
of, or disclosure of, compensation  expense for grants of stock options or other
equity  instruments  issued to employees  based on the fair value at the date of
grant.  As  permitted  by SFAS No.  123,  the  Company  elected  the  disclosure
requirements  instead of recognition of compensation  expense and therefore will
continue to apply existing accounting rules.

Cash  Equivalents  and  Cash  Flow   Information.   The  Company  considers  all
investments  having a maturity of three months or less when purchased to be cash
equivalents.  Cash equivalents are stated at cost which approximates fair market
value.  Cash paid for income taxes was  $2,007,000,  $1,702,000 and $263,000 for
1996,  1995,  and 1994,  respectively.  Cash  paid for  interest  was  $112,000,
$587,000 and $802,000 for 1996, 1995 and 1994, respectively.  The effects of the
Company's  cash and  non-cash  transactions  with ODMI are  described in Note 9,
"Transactions with Affiliates."

Net Income Per Share. The net income per share  amounts  for 1996, 1995 and 1994
have been  computed by  dividing  net income by the  weighted-average  number of
common shares outstanding during the respective periods.

Reclassifications.  Certain  reclassifications  have  been  made to  prior  year
financial statements to conform with the current year presentation.

Note 2 - Accounts Receivable

Accounts receivable are summarized as follows:
                                                          December 31,
                                                    ------------------------
                                                       1996          1995
                                                    ----------    ----------
                                                          (In Thousands)

Accounts billed and due currently .................   $24,861       $24,479
Retained ..........................................     2,555         3,195
                                                      -------       -------
                                                       27,416        27,674
Allowance for uncollectible accounts ..............      (557)         (549)
                                                      -------       -------
                                                      $26,859       $27,125
                                                      =======       =======

The  retained  receivables  at December  31, 1996 are  expected to be  collected
within one year.

                                 Page 24 of 88
<PAGE>

Note 3 - Properties and Equipment

Properties and equipment were as follows:

                                                          December 31,
                                                    -----------------------
                                                       1996          1995
                                                    --------       --------
                                                        (In Thousands)
Land.............................................   $    767       $    998
Buildings and improvements.......................      4,311          5,588
Machinery and equipment..........................      9,868          8,813
Projects in progress.............................        558              -
                                                    --------       --------
                                                      15,504         15,399
Accumulated depreciation.........................     (8,152)        (6,915)
                                                    --------       --------
Properties and equipment, net....................   $  7,352       $  8,484
                                                    ========       ========


In 1995,  the Company  removed  from its books fully  depreciated  assets with a
total cost of $3,334,000.

In 1996, the Company wrote-down to market the carrying value of its Hammond,  IN
property  which no longer fits in its strategic  plans and is currently held for
sale.  The  write-down  of the property  amounted to $625,000 and is included in
other expenses in the 1996 Consolidated  Statement of Income. Also in 1996, cash
of $769,000 was used  towards the  implementation  of new  software  technology.
During  1997 the Company  estimates that it will spend additional an $600,000 to
complete the implementation and bring this software on-line by the early part of
1998.

Note 4 - Costs and Estimated Earnings on Contracts in Process

The consolidated balance sheets include the following amounts:
                                                           December 31,
                                                    ------------------------
                                                       1996          1995
                                                    ----------    ----------
                                                         (In Thousands)

Costs incurred on contracts in process.............  $106,327       $98,882
Estimated earnings.................................    18,427        19,481
                                                     --------      --------
                                                      124,754       118,363
Less billing to date...............................   122,252       114,401
                                                     --------      --------
                                                     $  2,502      $  3,962
                                                     ========      ========
Costs and estimated earnings on contracts in
     process in excess of billings................   $  7,739      $  7,894
Billings on contracts in process in excess of
     costs and estimated earnings.................     (5,237)       (3,932)
                                                     --------      --------
                                                     $  2,502      $  3,962
                                                     ========      ========

Costs and  estimated  earnings  on  contracts  in process in excess of  billings
included  reserves for contract revenue  adjustments of $152,000 and $442,000 at
December 31, 1996 and 1995,  respectively.  The Company  recognizes revenue from
its fixed and unit price contracts in process using the percentage of completion
method of accounting,  which  requires the use of estimates.  Such estimates are
subject to changes throughout the duration of the contract,  due to factors such
as technical problems,  disputes, weather, delays caused by external sources and
fluctuations in the prices of materials and scrap metals.

                                 Page 25 of 88
<PAGE>

Note 5 - Income Taxes

Deferred  income  taxes  reflect  the net tax effects of  temporary  differences
between the carrying  amounts of assets and liabilities for financial  reporting
purposes and the amounts used for income tax purposes. Significant components of
the Company's  deferred tax  liabilities  and assets as of December 31, 1996 and
1995 are as follows:

                                                           December 31,
                                                      ---------------------
                                                         1996        1995
                                                      ---------    --------
                                                          (In Thousands)
Deferred tax assets:
    Accrued liabilities .............................   $2,390       $1,840
    Allowance for uncollectible accounts ............      223          219
                                                        ------       ------
       Total deferred tax assets ....................    2,613        2,059
Deferred tax liabilities:
     Tax over book depreciation .....................      572          932
     Goodwill .......................................    3,698        3,542
     Contract revenue recognition ...................      458          515
     Prepaid expenses and other assets ..............      641          597
                                                        ------       ------
       Total deferred tax liabilities ...............    5,369        5,586
                                                        ------       ------
       Net deferred tax liabilities .................   $2,756       $3,527
                                                        ======       ======


Significant  components  of the  provision  for income  taxes  (benefit)  are as
follows:

                                                  Years Ended December 31,
                                             ----------------------------------
                                                1996         1995        1994
                                             ---------    ---------    --------
                                                       (In Thousands)
Current:
     Federal ...............................   $2,269       $1,404       $  768
     State  ................................      367          583          277
                                               ------       ------       ------
       Total current taxes..................    2,636        1,987        1,045
                                               ------       ------       ------
Deferred:
     Federal................................     (825)        (664)         831
     State .................................       54         (370)         241
                                               ------       ------       ------
       Total deferred taxes (benefit).......     (771)      (1,034)       1,072
                                               ------       ------       ------

       Total income tax provision...........   $1,865       $  953       $2,117
                                               ======       ======       ======


The reasons for  differences  between  income taxes  attributable  to continuing
operations  and the amount  computed by applying the federal  statutory tax rate
(34% is the statutory tax rate for companies  that have less than $10 million of
taxable income) to income from continuing operations before income taxes are:

                                                    Years Ended December 31,
                                                 -------------------------------
                                                        Liability Method
                                                 -------------------------------
                                                  1996        1995        1994
                                                 ------      ------      ------

Federal statutory rate ........................   34.0%       34.0%       34.0%
Add (deduct):
   State income taxes, net of federal
       tax benefit.............................    7.4         8.2          7.1
   Goodwill amortization ......................    4.8        10.9          3.9
   Other ......................................    3.9         4.0          0.2
                                                  -----       -----        -----

                                                  50.1%       57.1%        45.2%
                                                  =====       =====        =====

                                 Page 26 of 88
<PAGE>

Note 6 - Long-Term Debt

On March 21,  1996 the Company  repaid the full  $5,850,000  outstanding  amount
under the $25,000,000  revolving credit facility (the  "Facility")  dated May 4,
1993. Subsequently, on May 1, 1996 the Company amended its May 4, 1993 revolving
credit facility.  Under this amendment, the Company can borrow up to $25,000,000
on a revolving  basis for a term expiring April 30, 1999. The amended  revolving
credit facility contains debt service coverage, leverage and interest convenants
and  allows for  payment of  dividends  subject to certain  conditions.  Amounts
outstanding  under the facility  bear  interest of 150 to 225 basis points above
the Eurodollar  rate (the 90 day Eurodollar rate at December 31, 1996 was 5.56%)
and are secured by substantially all of the Company's assets. As of December 31,
1996 the Company had outstanding $8,000,000 in letters of credit.

Note 7 - Capital Stock

The Company's Certificate of Incorporation  authorizes the Board of Directors to
issue up to 10,000,000 shares of preferred stock,  $0.01 par value,  without any
further vote or action by the stockholders. As of December 31, 1996 no preferred
stock has been issued.

Pursuant to an agreement among the Company,  Rust and OHM dated May 4, 1993 each
of Rust and OHM has the right to demand  registration,  at their own expense, of
all or a portion of the  common  stock of the  Company  held by it. In the event
either Rust or OHM demands such registration,  the other entity has the right to
participate.  This agreement is subject to certain  conditions and  limitations,
including limitations as to the frequency of exercise and Rust's and OHM's right
to participate in other registrations of the Company.


Note 8 - Stock Option Plan

The Company has a stock  option plan (the "1990  Plan")  which  provides for the
granting  of options to acquire  up to 860,000  shares of the  Company's  common
stock.  The options are issuable to directors,  officers and key employees at an
exercise price not less than the fair market value of the Company's common stock
on the date of  grant.  The  stock  options  granted  under  the  1990  Plan are
exercisable in either  cumulative  ratable annual  installments over a four year
period or altogether  three years after the date of grant,  and expire ten years
thereafter.  Shares available for grants of additional stock options,  under the
1990 Plan,  were 151,250,  656,750 and 478,680 for the years ended  December 31,
1996, 1995 and 1994  respectively.

The following tables summarize information about the Company stock options.

                                                          1990 Plan
                                               -------------------------------
                                                Number of       Option Price
                                                 Options       Range Per Share
                                                ----------   -----------------
Outstanding at January 1, 1994 ................   449,420     4.00  -  8.75
     Canceled..................................  (224,100)    4.00  -  8.75
                                                 --------
Outstanding at December 31, 1994...............   225,320     4.00  -  8.50
     Canceled..................................  (178,070)    4.00  -  6.00
                                                 --------
Outstanding at December 31, 1995...............    47,250     4.00  -  8.50
     Granted...................................   690,000     2.00  -  2.06
     Canceled..................................  (184,500)    2.00  -  8.50
                                                 --------
Outstanding at December 31, 1996...............   552,750     2.00  -  6.00
                                                 ========

                                 Page 27 of 88
<PAGE>

<TABLE>
<CAPTION>

                     Number of Shares   Number of Shares
      Option          Outstanding at     Exercisable at        Remaining            Option
     Grant Date           12/31/96           12/31/96        Contractual Life     Price Range
------------------- ------------------- ------------------ ------------------- -----------------

<S>         <C>           <C>                 <C>                <C>                  <C>
March       1991          3,000               3,000              4.0 years            $6.00
May         1991         10,000              10,000              4.2 years            $6.00
November    1991          1,250               1,250              4.5 years            $4.00
November    1992          1,000               1,000              5.5 years            $5.75
May         1993         10,000              10,000              6.2 years            $4.05
February    1996        207,500                   0              9.1 years            $2.00
December    1996        320,000                   0              9.8 years            $2.06
</TABLE>


Effective  January 1, 1996 the Company  adopted  SFAS No. 123,  "Accounting  for
Stock-Based  Compensation."  SFAS  No.  123  requires  the  recognition  of,  or
disclosure of, compensation expenses for grants of stock options or other equity
instruments  issued to  employees  based on the fair value at the date of grant.
Although  SFAS No. 123 requires the  presentation  of pro forma  information  to
reflect the fair value method of accounting  for employee  stock option  grants,
such  information  has not been presented  because the pro forma effects are not
material.  The initial impact on pro forma net income may not be  representative
of  compensation  expense in future periods when the effect of  amortization  of
multiple awards would be reflected in the pro forma calculation.  The fair value
of  these   options  was   estimated   at  the  date  of  the  grant  using  the
"Black-Scholes"   method   prescribed   by   SFAS   No.   123.   The   following
weighted-average  assumptions  were used to  determine  the fair value for 1996:
market price of the Company's common stock of $2.00 and $2.06, a risk-free  rate
of 5% and 6%, an expected dividend yield of 6% and a  weighted-average  expected
life of the option of 5 years.


Note 9 - Transactions with Affiliates

In April 1995,  the Company  entered into an Interim  Management  Agreement  and
Operating  Agreement  (the  "Agreements")  with Rust  under  which the  Company,
through ODMI,  assumed the management of Olshan  Demolishing  Company ("ODC"), a
Rust  subsidiary  specializing in demolition and  dismantling,  primarily in the
industrial  market.  The term of the Operating  Agreement  extends through April
2005,  although the  occurrence  of certain  conditions  or events could trigger
early termination.  Pursuant to the provisions of the Operating Agreement,  Rust
provided the Company a non-interest  bearing working capital loan,  payable upon
termination of the Operating Agreement, with a possible maximum of $4,520,000 by
transferring to the Company current assets of $3,062,000 and current liabilities
of  $1,491,000.  In 1996,  Rust paid an  additional  $2,949,000  to the Company,
raising the outstanding  balance of the working capital loan to $4,520,000.  The
results of operations  of ODMI are  consolidated  with the Company's  results of
operations. In exchange for the right to operate ODC, the Company is required to
pay Rust an annual fee based on operating  profit,  if any. This fee amounted to
$700,000 in 1996 and  $169,000 in 1995.  In the event that ODC incurs  operating
losses,  Rust would be required to reimburse  the Company for a portion of those
losses.

The Company  has,  from time to time,  provided  asbestos-abatement  and related
services to OHM and its affiliates on a subcontract basis.  Revenues  recognized
from these  affiliates  for such services were $40,000,  $212,000 and $1,377,000
for 1996,  1995 and 1994,  respectively.  Also, OHM provided in 1996 removal and
cleaning  services of waste material to the Company on a subcontract  basis. The
cost for such services was $121,000.

In addition, the Company has, from time to time, provided asbestos-abatement and
related  services to Rust and certain of its affiliates on a subcontract  basis.
Revenues recognized for such services were $84,000, $302,000, and $4,509,000 for
the years ended December 31, 1996, 1995, and 1994, respectively.  Also, Rust and
certain of its affiliates provided scaffolding,  disposal,  demolition and other
related  services  to the  Company  on a  subcontract  basis.  The cost for such
services  provided by Rust and its  affiliates  was  $1,503,000,  $1,719,000 and
$940,000 for the years ended  December 31,  1996,  1995 and 1994,  respectively.
Rust  rented  demolition  equipment  to the  Company  for  which it was  charged
$527,000  and  $209,000  for  the  year  ended   December  31,  1996  and  1995,
respectively.

                                 Page 28 of 88
<PAGE>

Note 10 - Employee Benefit Plans

Effective  October 1, 1992 the Company  adopted the NSC  Corporation  Retirement
Savings  Plan  (the  "Plan").   The  Plan  allows  eligible  employees  to  make
contributions,  up to a certain limit, to a trust on a tax-deferred  basis under
Section 401(k) of the Internal Revenue Code. The Company may, at its discretion,
make  profit-sharing  contributions  to the Plan out of its profits for the plan
years. The Company made matching  contributions of $105,000 and $89,000 for 1996
and 1995, respectively. No matching contribution was made in 1994.

The Company's subsidiary,  NSC, has certain union employees which are covered by
union-sponsored,   collectively - bargained,  multi-employer  retirement  plans.
Contributions to the plans were $1,828,000,  $1,575,000 and $2,379,000 for 1996,
1995 and 1994, respectively.

Note 11 - Litigation, Commitments and Contingencies

The nature and scope of the  Company's  business  bring it into regular  contact
with the general  public and a variety of businesses  and  government  agencies.
Such  activities  inherently  subject the Company to the hazards of  litigation,
which are defended in the normal course of business.

The Company effectively self insures its auto,  commercial general liability and
workers' compensation risks up to $350,000, $100,000 and $500,000 per occurrence
respectively.  For claims that may exceed the self-insured  amounts, the Company
has obtained  commercial/excess  umbrella and excess workers'  compensation stop
loss  coverage  on  a  fully-insured   basis.  Factors  affecting  the  ultimate
resolution  of these  claims  against the  Company,  particularly  those  claims
related to  personal  injuries,  are to some  degree  outside the control of the
Company and include, among other items, determination of the extent of an injury
or  disability,  the amount of ongoing  medical  expenses  that are necessary to
treat the injury or disability, and the uncertainty associated with damages that
may be awarded in the event of a jury trial.

In connection with the claims described in the preceding paragraphs, the Company
has an  accrual  balance  of  $5,410,000  and  $6,694,000  for  1996  and  1995,
respectively,  which  represents  its  estimate  of  loss  associated  with  the
resolution of these claims. However, the ultimate outcome of these claims cannot
presently be determined.

The Company  occupies  office and  warehouse  space and  utilizes  equipment  in
various  locations  under  operating  leases the last of which  expires in 2000.
Rental  expense  under  operating  leases  amounted to  $956,267,  $908,000  and
$830,000 for 1996, 1995 and 1994,  respectively.  The lease agreements generally
contain renewal provisions and escalation clauses. Future minimum lease payments
under  non  cancelable  operating  leases as of  December  31,  1996 are:  1997,
$597,000; 1998, $379,000, 1999, $121,000 and 2000, $86,000.

The Company had  $8,000,000  letters of credit  outstanding at both December 31,
1996 and 1995.  These  letters of credit were issued in support of the Company's
insurance programs.

Note 12 - Fair Value of Financial Instruments

The following methods and assumptions were used by the Company in estimating its
fair value disclosures for financial instruments:

Cash and cash equivalents: The carrying amount reported in the balance sheet for
cash and cash equivalents approximates their fair value.

Accounts  receivable and accounts payable:  The carrying amounts reported in the
balance sheet for accounts  receivable and accounts  payable  approximate  their
fair value.

Long-debt:  The fair value of the Company's  long-term  debt is estimated  using
discounted  cash  flow  analyses,  based on the  Company's  current  incremental
borrowing rates for similar types of borrowing arrangements.

                                 Page 29 of 88
<PAGE>

The carrying amounts and fair values of the Company's  financial  instruments at
December 31, 1996 are as follows:

                                                    Carrying          Fair
                                                     Amount           Value
                                                    --------        --------
                                                          (In Thousands)

Cash and cash equivalents........................   $  3,975        $  3,975
Accounts receivable..............................     26,859          26,859
Accounts payable.................................     (3,448)         (3,448)
Long-term debt...................................     (4,520)         (2,261)

Note 13- Industry Segment Data

The Company operates in two principal industries -  asbestos-abatement  services
and  beginning in September  1995,  demolition  and  dismantling  services.  The
Company's  asbestos-abatement divisions provide asbestos removal, insulation and
restoration  primarily to private  sector  clients at commercial  and industrial
properties,  while the Company's  demolition and dismantling  division  provides
industrial  dismantling and commercial  demolition for public and private sector
customers.  Intersegment  sales are  generally  priced on a basis  comparable to
sales to unaffiliated companies.

                                                      December 31,
                                               --------------------------
                                                   1996          1995
                                               -----------    -----------
                                                      (In Thousands)
Revenue
  Asbestos-Abatement..........................   $107,622       $116,940
  Demolition and Dismantling..................     21,421          7,589
                                                 --------       --------
       Total revenue..........................   $129,043       $124,529
                                                 ========       ========

Operating profit
  Asbestos-Abatement..........................   $  7,455       $  6,932
  Demolition and Dismantling..................      1,101            827
                                                 --------       --------
       Total operating profit.................      8,556          7,759
Corporate expenses............................     (4,195)        (5,731)
Interest expense..............................       (112)          (587)
Other.........................................       (523)           227
                                                 --------       --------
       Income before income taxes.............   $  3,726       $  1,668
                                                 ========       ========

Identifiable assets
  Asbestos-Abatement..........................   $ 66,919       $ 74,958
  Demolition and Dismantling..................      8,681          7,370
                                                 --------       --------
                                                   75,600         82,328
Corporate assets..............................      9,625          4,833
                                                 --------       --------
        Total assets..........................   $ 85,225       $ 87,161
                                                 ========       ========

Depreciation
  Asbestos-Abatement..........................   $  1,407       $  1,571
  Demolition and Dismantling..................         63              2
  Corporate  .................................        246            257
                                                 --------       --------
        Total depreciation....................   $  1,716       $  1,830
                                                 ========       ========

Amortization
  Asbestos-Abatement..........................   $     31      $       -
  Demolition and Dismantling..................          -              -
  Corporate  .................................      1,068          1,066
                                                 --------       --------
        Total amortization....................   $  1,099       $  1,066
                                                 ========       ========

                                 Page 30 of 88
<PAGE>

Capital Expenditures
  Asbestos-Abatement..........................   $    394       $    486
  Demolition and Dismantling..................        699             79
  Corporate  .................................        931            195
                                                 --------       --------
        Total capital expenditures............   $  2,024       $    760
                                                 ========       ========


Note 14 - Quarterly Financial Data (Unaudited)

The following is an analysis of certain items in the consolidated  statements of
operations by quarter for 1996 and 1995:

                                        First     Second     Third      Fourth
     1996                              Quarter    Quarter    Quarter    Quarter
     ----                              -------    -------    -------    -------
                                         (In Thousands, Except Per-Share Data)

Revenue.............................   $35,823    $32,147    $30,014    $31,059
Gross profit........................     5,960      5,331      5,321      5,977
Net income..........................       560        557        454        290

Net income per share ...............   $  0.06    $  0.06    $  0.04    $  0.03
                                       =======    ========   =======    =======


                                       First     Second     Third      Fourth
     1995                             Quarter    Quarter    Quarter    Quarter
     ----                             -------    -------    -------    -------
                                        (In Thousands, Except Per-Share Data)

Revenue............................   $29,545    $31,965    $29,452    $33,567
Gross profit.......................     4,700      5,203      4,562      4,982
Net income.........................       220        493          2          -

Net income per share ..............   $  0.02    $  0.05    $  0.00    $  0.00
                                      =======    =======    =======    =======


In the fourth quarter of 1996, the Company wrote-down to market the value of the
Hammond,IN facility which no longer fits in its strategic plans and is currently
being held for sale - see Note 3 "Properties and Equipment."

The  Company's  results of  operations  for the fourth  quarter of 1995  reflect
additional  provisions for workers'  compensation  losses in connection with the
unfavorable resolution of two significant claims.

                                 Page 31 of 88
<PAGE>



                         REPORT OF INDEPENDENT AUDITORS


Board of Directors and Stockholders
NSC Corporation

We have audited the accompanying  consolidated balance sheets of NSC Corporation
and subsidiaries as of December 31, 1996 and 1995, and the related  consolidated
statements of income,  changes in stockholders'  equity, and cash flows for each
of the three  years in the period  ended  December  31,  1996.  Our audits  also
included the financial  statement  schedule  listed in the Index at Item 14 (a).
These financial  statements and schedule are the responsibility of the Company's
management.  Our  responsibility  is to express  an  opinion on these  financial
statements and schedule based on our audits.

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

In our opinion, the consolidated  financial statements referred to above present
fairly, in all material  respects,  the consolidated  financial  position of NSC
Corporation and subsidiaries at December 31, 1996 and 1995, and the consolidated
results of their  operations and their cash flows for each of the three years in
the period ended  December 31,  1996,  in  conformity  with  generally  accepted
accounting  principles.  Also, in our opinion,  the related financial  statement
schedule, when considered in relation to the basic financial statements taken as
a whole,  presents  fairly in all material  respects the  information  set forth
therein.





/s/ ERNST & YOUNG LLP


Boston, Massachusetts
January 31, 1997


                                 Page 32 of 88
<PAGE>


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


Not applicable.


Part III

Item 10.  Directors and Executive Officers of the Registrant

The  information  required by this item,  in addition to that set forth above in
Part I under the caption "Executive Officers of the Registrant," is set forth in
the section entitled  "Information  Concerning Directors and Nominees" contained
in the Company's  definitive Proxy Statement to be filed with the Securities and
Exchange  Commission  (the "Proxy  Statement") in connection  with the Company's
1997 Annual Meeting of Stockholders, and such information is incorporated herein
by reference.

Item 11.  Executive Compensation

Remuneration  of the directors and officers and  information  related thereto is
included in the section entitled "Executive  Compensation and Other Information"
contained in the Proxy Statement, and said information is incorporated herein by
reference   except  for   information   contained   under  the  captions  "Board
Compensation Committee Report" and "Performance Graph."


Item 12.  Security Ownership of Certain Beneficial Owners and Management

Security  ownership of management and certain  beneficial owners and information
related  thereto is included  in the section  entitled  "Voting  Securities  and
Principal  Holders  Thereof"   contained  in  the  Proxy  Statement,   and  said
information is incorporated herein by reference.


Item 13.  Certain Relationships and Related Transactions

Transactions with management and related parties and information related thereto
is  included  in  the  section  entitled  "Certain   Relationships  and  Related
Transactions"  contained  in  the  Proxy  Statement,  and  said  information  is
incorporated herein by reference.


                                 Page 33 of 88
<PAGE>


Part IV

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

(a)(1)    The following consolidated financial statements of the Company and its
          subsidiaries  for the years ended December 31, 1996, 1995 and 1994 are
          included at the pages indicated below:

                                                                       Page

    Consolidated Balance Sheets                                         19
    -As of December 31, 1996 and 1995

    Consolidated Statements of Operations                               20
    -For the Years Ended December 31, 1996, 1995 and 1994

    Consolidated Statements of Changes in Stockholders' Equity          21
    -For the Years Ended December 31, 1996, 1995 and 1994

    Consolidated Statements of Cash Flows                               22
    -For the Years Ended December 31, 1996, 1995 and 1994

    Notes to Consolidated Financial Statements                          23

    Report of  Independent Auditors                                     32

(a)(2) The  following  consolidated  financial  statement  schedule  is included
herein at the pages indicated below:

                                                                       Page

     Schedule II Valuation and Qualifying Accounts                      39
     -For the Years Ended December 31, 1996, 1995 and 1994

All other  schedules for which  provision is made in the  applicable  accounting
regulations of the Securities and Exchange Commission are not required under the
related instructions or are not applicable, and therefore have been omitted.

(a)(3)The following Exhibits are included in this Annual Report on Form 10-K:

 Exhibit                          Exhibit
  Number                        Description

3(i)(a)  Amended and Restated  Certificate  of  Incorporation  of the Registrant
dated  April  24,  1990  [incorporated  by  reference  to  Exhibit  3(a)  to the
Registrant's Form S-1, Registration Statement No. 33-34702].


3(ii)(a) By-Laws of the Registrant [incorporated by reference to Exhibit 3(b) to
the Registrant's Form S-1, Registration Statement No. 33-34702].


4 Specimen Common Stock  Certificate  [incorporated by reference to Exhibit 4 to
the  Registrant's  Annual  Report on Form 10-K for the year ended  December  31,
1990].


* 10(a) NSC  Corporation  1990  Stock  Option  Plan,  As  Amended  and  Restated
[incorporated by reference to Exhibit 10(a) to the Registrant's Annual Report on
Form 10-K for the year ended December 31, 1991].

                                 Page 34 of 88
<PAGE>

* 10(b) NSC Corporation  Retirement Savings Plan and NSC Corporation  Retirement
Savings Plan Trust Agreement  [incorporated  by reference to Exhibit 10.1 to the
Registrant's  Quarterly  Report on Form 10-Q for the quarter ended September 30,
1992].

* 10(c)  Indemnification  Agreement,  dated as of May 1, 1990 by and between the
Registrant and William M. R. Mapel  [incorporated  by reference to Exhibit 10(i)
of the Registrant's Form S-1, Registration Statement No. 33-34702].

10(d) Purchase  Agreement,  dated as of December 23, 1992 and related amendments
made thereto,  by and among OHM  Corporation,  NSC  Corporation,  NSC Industrial
Services Corp., The Brand Companies,  Inc., Chemical Waste Management,  Inc. and
Waste  Management,  Inc.  [incorporated  by reference  to Exhibit  10(ff) to the
Registrant's Annual Report on Form 10-K for the year ended December 31, 1992].

* 10(e) NSC Corporation 1993 Restricted Stock Plan [incorporated by reference to
Exhibit 10(gg) to the Registrant's Annual Report on Form 10-K for the year ended
December 31, 1992].

10(f)  Revolving  Credit  Agreement,  dated as of May 4,  1993 by and  among NSC
Corporation,  its Subsidiaries named therein,  The First National Bank of Boston
and Fleet Bank of  Massachusetts  [incorporated by reference to Exhibit 10(l) to
the  Registrant's  Annual  Report on Form 10-K for the year ended  December  31,
1993].

10(g)  Security and Pledge  Agreement,  dated as of May 4, 1993 by and among NSC
Corporation,  its Subsidiaries named therein,  The First National Bank of Boston
and Fleet Bank of  Massachusetts  [incorporated by reference to Exhibit 10(m) to
the  Registrant's  Annual  Report on Form 10-K for the year ended  December  31,
1993].

10(h) First  Amendment to Revolving  Credit  Agreement,  dated as of December 2,
1993 by and among NSC  Corporation,  its Subsidiaries  named therein,  The First
National  Bank of  Boston  and  Fleet  Bank of  Massachusetts  [incorporated  by
reference to Exhibit  10(n) to the  Registrant's  Annual Report on Form 10-K for
the year ended December 31, 1993].

10(i) Revolving Credit Agreement and Promissory Note, dated as of May 4, 1993 by
and between NSC Corporation, and the Brand Companies, Inc., as succeeded by Rust
International   Inc.   [incorporated  by  reference  to  Exhibit  10(o)  to  the
Registrant's Annual Report on Form 10-K for the year ended December 31, 1993].

10(j) Second Amendment to Revolving Credit Agreement, dated as of May 1, 1996 by
and among NSC Corporation,  its Subsidiaries  named therein,  The First National
Bank of  Boston  and  Fleet  National  Bank,  formerly  known as  Fleet  Bank of
Massachusetts  [incorporated  by  reference  to Exhibit  10 to the  Registrant's
Quarterly Report on Form 10-Q for the quarter ended March 31, 1996].

10(k) Registration Rights Agreement,  dated as of May 4, 1993 by and between NSC
Corporation, OHM Corporation and The Brand Companies, Inc., as succeeded by Rust
International   Inc.   [incorporated  by  reference  to  Exhibit  10(p)  to  the
Registrant's Annual Report on Form 10-K for the year ended December 31, 1993].

* 10(l) Independent  Sales  Representative  Agreement,  dated as of November 29,
1993 by and  between  NSC  Corporation  and Gary P.  Snoonian  [incorporated  by
reference to Exhibit  10(q) to the  Registrant's  Annual Report on Form 10-K for
the year ended December 31, 1993].

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

* Indicates a management  contract or compensatory plan or arrangement  required
to be filed pursuant to Item 14(c) of Form 10-K.

                                 Page 35 of 88
<PAGE>

*  10(m)  NSC  Corporation's   1994  Management   Incentive   Compensation  Plan
[incorporated by reference to Exhibit 10(q) to the Registrant's Annual Report on
Form 10-K for the year ended December 31, 1994].

* 10(n)  Consulting  Agreement,  dated as of  November  30,  1993 by and between
Anthony Mesiti and NSC Corporation  [incorporated  by reference to Exhibit 10(s)
to the  Registrant's  Annual Report on Form 10-K for the year ended December 31,
1994].

10(o) Olshan Interim  Management and Operating  Agreements dated January 1, 1995
and  April  20,  1995  [incorporated  by  reference  to  Exhibit  10(a)  to  the
Registrant's Annual Report on Form 10-Q for the quarter ended June 30, 1995].

* 10(p)  Employment  Agreement,  dated March 12,  1997 by and between  Victor J.
Barnhart and NSC Corporation.

* 10(q) Employment Security  Agreement,  dated October 2, 1996 by and between J.
Drennan Lowell and NSC Corporation.

* 10(r)  Employment  Security  Agreement,  dated  October 2, 1996 by and between
Darryl G. Schimeck and NSC Corporation.

* 10(s)  Employment  Security  Agreement,  dated  October 2, 1996 by and between
David R. Krache and NSC Corporation.

* 10(t)  Employment  Security  Agreement,  dated  October 2, 1996 by and between
Thomas W. Bartlett, Jr. and NSC Corporation.

* 10(u)  Employment  Security  Agreement,  dated  October 2, 1996 by and between
Thomas W. Gilmore and NSC Corporation.

11 Statement re computation of per share earnings.

21 Subsidiaries of the Registrant.

23 Consent of Independent Auditors.

24 Powers of Attorney of certain directors of the Registrant.

(b) The  Company  filed one  Current  Report on Form 8-K during the  three-month
period ended  December  31, 1996:  The Current  Report,  dated  December 6, 1996
described the  appointment of Victor J. Barnhart as Chairman and Chief Executive
Officer and the promotion of Darryl G. Schimeck as President and Chief Operating
Officer.


------------------------------------
 *  Indicates  a  management  contract or  compensatory  plan or  arrangement
required to be filed pursuant to Item 14(c) of Form 10-K.


                                 Page 36 of 88
<PAGE>

Signatures

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

                    NSC CORPORATION
                    By  /s/   EFSTATHIOS A. KOUNINIS
                    Efstathios A. Kouninis, Corporate Controller


March 28, 1997

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

                                                                   Date

*   VICTOR J. BARNHART                                        March 28, 1997
    Victor J. Barnhart - Chairman and Chief Executive Officer
    (Principal Executive Officer)



*   DARRYL G. SCHIMECK                                        March 28, 1997
    Darryl G. Schimeck - President and Chief Operating Officer



*   J. DRENNAN LOWELL                                        March 28, 1997
    J. Drennan Lowell - Vice President, Chief Financial Officer
    Treasurer and Secretary
    (Principal Financial Officer)



/s/ EFSTATHIOS A. KOUNINIS                                    March 28, 1997
    Efstathios A. Kouninis, Corporate Controller
    (Principal Accounting Officer)



*   EUGENE L. BARNETT                                         March 28, 1997
    Eugene L. Barnett - Director



*   PAMELA K.M. BEALL                                         March 28, 1997
    Pamela K.M. Beall - Director


                                 Page 37 of 88
<PAGE>

*   ROBERT J. BLACKWELL                                       March 28, 1997
    Robert J. Blackwell - Director



*   HERBERT A. GETZ                                           March 28, 1997
    Herbert A. Getz - Director



*   WILLIAM P. HULLIGAN                                       March 28, 1997
    William P. Hulligan - Director



*   WILLIAM M. R. MAPEL                                       March 28, 1997
    William M. R. Mapel - Director




* The undersigned,  by signing his name hereto does sign and execute this report
pursuant to Powers of Attorney  executed on behalf of the  above-named  officers
and directors  and  contemporaneously  herewith  filed with the  Securities  and
Exchange Commission.




/s/   EFSTATHIOS A. KOUNINIS                                     March 28, 1997
      Efstathios A. Kouninis - Attorney-in-Fact

                                 Page 38 of 88
<PAGE>
<TABLE>
<CAPTION>
NSC CORPORATION
SCHEDULE II--VALUATION AND QUALIFYING ACCOUNTS
(In Thousands)

-----------------------------------------------------------------------------------------------------
Column A                                     Column B       Column C       Column D         Column E
-----------------------------------------------------------------------------------------------------
                                           Balance at     Charged to
                                            Beginning      Costs and     Deductions       Balance at
                Description                 of Period    Expenses (2)   Describe (1)   End of Period

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

Year Ended December 31, 1996
  Deducted from assets accounts:
<S>                                           <C>           <C>             <C>              <C>
     Allowance for uncollectible accounts     $   549       $    67         $    59          $   557
     Reserve for contract revenue adjustments     442           111             401              152

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

Year Ended December 31, 1995
  Deducted from assets accounts:
     Allowance for uncollectible accounts     $   782        $    -          $    233        $   549
     Reserve for contract revenue adjustments     530           401               489            442
-----------------------------------------------------------------------------------------------------

Year Ended December 31, 1994
  Deducted from assets accounts:
     Allowance for uncollectible accounts     $ 1,165       $   390          $   773         $   782
     Reserve for contract revenue adjustments   1,546           332            1,348             530

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

(1)  Uncollectible  accounts written off and adjustments to unbilled revenues on
contracts in process.

(2)  Reduction of revenues on  contracts  in process and amounts  charged to bad
debt expense.


                                 Page 39 of 88
<PAGE>


                       SECURITIES AND EXCHANGE COMMISSION

                              WASHINGTON, DC 20549


                               __________________



                                    FORM 10-K

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

                            FOR THE FISCAL YEAR ENDED
                                December 31, 1996



                              ____________________


                                 NSC CORPORATION
             (Exact name of registrant as specified in its charter)





                              _____________________

                                    Exhibits

                              _____________________


                                 Page 40 of 88
<PAGE>

                                  EXHIBIT INDEX

The following Exhibits are included in this Annual Report on Form 10-K:

Exhibit                 Exhibit                                        Exhibit
Number                Description                                        Page

*  10(p)    Employment Agreement, dated March 12, 1997 by and            42
              between Victor J. Barnhart and NSC Corporation.


*  10(q)    Employment Security Agreement, dated October 2, 1996         55
              by and between J. Drennan Lowell and NSC Corporation.


*  10(r)    Employment Security Agreement, dated October 2, 1996         61
              by and between Darryl G. Schimeck and NSC Corporation.


*  10(s)    Employment Security Agreement, dated October 2, 1996         67
              by and between David R. Krache and NSC Corporation.


*  10(t)    Employment Security Agreement, dated October 2, 1996         73
              by and between Thomas W. Bartlett, Jr.and NSC
                   Corporation.

*  10(u)    Employment Security Agreement, dated October 2, 1996         79
               by and between Thomas W. Gilmore and NSC Corporation.


   11       Statement re computation  of per share earnings.             84

   21       Subsidiaries of the Registrant.                              85

   23       Consent of  Independent Auditors.                            86

   24       Powers of Attorney of certain directors of the Registrant.   87

   27       Fiancial Data Schedule, Article 5                            88

      (b)   The Company filed one Current  Report on Form 8-K during
            the  three-month  period ended  December 31, 1996:  The
            Current  Report,  dated  December 6, 1996  described the
            appointment of Victor J. Barnhart as Chairman  and Chief
            Executive Officer and the promotion of Darryl G. Schimeck
            as President and Chief Operating Officer.

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

  * Indicates a management contract or compensatory plan or arrangement
  required to be filed pursuant to Item 14(c) of Form 10-K.


                                 Page 41 0f 88

<PAGE>