SCHEDULE 14A INFORMATION

PROXY STATEMENT PURSUANT TO SECTION 14(A) OF THE SECURITIES EXCHANGE ACT OF 1934

Filed by the Registrant [X]

Filed by a Party other than the Registrant [_]

Check the appropriate box:

[_] Preliminary Proxy Statement

[X] Definitive Proxy Statement

[_] Definitive Additional Materials

[_] Soliciting Material Pursuant to (S)240.1a-11(c) or (S)240.1a-12

BAYOU STEEL CORPORATION
------------------------------------------------
(Name of Registrant as Specified In Its Charter)

BAYOU STEEL CORPORAION
------------------------------------------
(Name of Person(s) Filing Proxy Statement)

Payment of Filing Fee (Check the appropriate box):

[X] $125 per Exchange Act Rules 0-11(c)(1)(ii), 14a-6(i)(1), or 14a-6(j)(2).

[_] $500 per each party to the controversy pursuant to Exchange Act Rule 14a-
6(i)(3).

[_] Fee computed on table below per Exchange Act Rules 14a-6(i)(4) and 0-11.

(1) Title of each class of securities to which transaction applies:

(2) Aggregate number of securities to which transaction applies:

(3) Per unit price or other underlying value of transaction computed
pursuant to Exchange Act Rule 0-11;*

(4) Proposed maximum aggregate value of transaction:
- --------
* Set forth amount on which the filing is calculated and state how it was
determined.

[_] Check box if any part of the fee is offset as provided by Exchange Act Rule
0-11(a)(2) and identify the filing for which the offsetting fee was paid
previously. Identify the previous filing by registration statement number,
or the Form or Schedule and the date of its filing.

(1) Amount previously paid:

(2) Form, Schedule or Registration Statement No.: Preliminary Proxy

(3) Filing Party:

(4) Date Filed:

Notes:

[BAYOU STEEL LOGO
APPEARS HERE] BAYOU STEEL CORPORATION

NOTICE OF
ANNUAL MEETING OF
CLASS A, CLASS B AND
CLASS C COMMON
STOCKHOLDERS AND
PROXY STATEMENT

December 16, 1994

Dear Stockholders:

You are cordially invited to attend the Bayou Steel Corporation Annual Meeting
of Stockholders to be held at 10:00 a.m. (E.S.T.) on Thursday, January 26, 1995,
at 111 East 48th Street, New York, New York 10017.

The purposes of this meeting are (i) to elect directors, (ii) to ratify the
appointment of auditors, and (iii) to consider a shareholder proposal. These
matters are described in the formal Notice of Annual Meeting of Stockholders and
the accompanying Proxy Statement.

It is important that your shares be represented at the meeting, whether or not
you are personally able to attend. Accordingly, you are requested to sign, date
and return the enclosed proxy promptly. Your cooperation is appreciated. If you
do attend the Annual Meeting, you may still vote in person.

Sincerely,

[SIGNATURE OF HOWARD M. MEYERS APPEARS HERE]
HOWARD M. MEYERS,
Chairman and Chief
Executive Officer

Admission to the meeting will be by ticket only. If you plan to attend
the meeting, please retain the ticket attached to the enclosed proxy
form and check the appropriate box on the proxy form to indicate you
plan to attend and to validate your ticket. If your proxy form does
not have a detachable ticket and you wish to attend the meeting, send
a request in for a ticket, and we will send you an admission ticket
about two weeks prior to the meeting date. If we receive your request
for a ticket after January 12, 1995, your ticket will be held for you
at the door. Attendance at the meeting will be limited to shareowners
or their proxies. Proof of ownership may be required. A shareowner may
designate no more than one proxy to represent him or her at the
meeting.

BAYOU STEEL CORPORATION
P. O. Box 5000
River Road
La Place, Louisiana 70069
--------------------------

NOTICE OF ANNUAL MEETING OF STOCKHOLDERS

CLASS A COMMON, CLASS B COMMON AND CLASS C COMMON

January 26, 1995
--------------------------

NOTICE IS HEREBY GIVEN that the Annual Meeting of stockholders of Bayou Steel
Corporation (the "Company"), will be held at 10:00 a.m. (E.S.T.) on Thursday,
January 26, 1995, at 111 East 48th Street, New York, New York 10017, for the
purpose of considering and acting upon the following matters as set forth in the
accompanying Proxy Statement:

1. Election of three (3) Class A and four (4) Class B Directors.

2. Ratification of the appointment of Arthur Andersen LLP as auditors of the
Company for the fiscal year ending September 30, 1995.

3. Consideration of a shareholder proposal discussed in the enclosed proxy
statement.

Only stockholders of record at the close of business on December 15, 1994, are
entitled to notice of the Meeting. A certified list of stockholders entitled to
vote at the Meeting will be available for examination, during business hours, by
any stockholder for any purpose germane to the Meeting for a period of not less
than ten days immediately preceding the Meeting at the offices of Society Trust
Company of New York, 5 Hanover Square, 10th Floor, New York, New York 10004.

Please sign the enclosed proxy and return it at your earliest convenience in
the accompanying envelope. It is important that your shares be represented at
the meeting. If you attend the meeting, you may revoke your proxy and vote in
person.

By order of the Board of Directors

[SIGNATURE OF RICHARD J. GONZALEZ APPEARS HERE]

RICHARD J. GONZALEZ,
Secretary

December 16, 1994

BAYOU STEEL CORPORATION
P.O. Box 5000
River Road
La Place, Louisiana 70069

PROXY STATEMENT

SOLICITATION

This Proxy Statement, which will be first mailed to stockholders on or about
December 16, 1994, is furnished in connection with the Board of Directors'
solicitation of Proxies from the holders of the Class A Common Stock of the
Company for the Annual Meeting of Stockholders of the Company to be held January
26, 1995 (the "Meeting"). Accompanying this Proxy Statement is a Notice of such
Meeting and a form of Proxy solicited by the Board of Directors of the Company.
Audited financial statements of the Company for the fiscal years ended September
30, 1993 and 1994 are contained in the Company's Annual Report which is sent to
stockholders with this Proxy Statement.

If no contrary specification is made, the shares represented by the enclosed
proxy will be voted FOR the election of the Class A Directors set forth in this
Proxy Statement, and FOR the ratification of the appointment of Arthur Andersen
LLP as auditors. Shares represented by Proxies marked as abstentions on any
matter will not be voted on that matter, although they will be counted for
quorum purposes; broker's shares held in "street name" and not voted by them
will not be counted in tabulating votes.

The Board of Directors has fixed the close of business on December 15, 1994,
as the record date for the determination of stockholders who are entitled to
receive notice of and to vote at the Meeting. The holders of a majority of the
voting power of issued and outstanding shares of Class A, Class B and Class C
Common Stock present in person, or represented by proxy, shall constitute a
quorum at the Meeting.

/ / The Company's Certificate of Incorporation provides for class voting for
the election of Directors. The Board of Directors is currently comprised of
seven (7) persons. The holders of the Class A Common Stock are entitled to
elect, as a class, 40% (or 3) of the Directors, and the holders of the
Class B Common Stock are entitled to elect, as a class, 60% (or 4) of the
Directors. A majority of the outstanding shares of each such class are
required to be present at the meeting in person or by proxy in order to
constitute a quorum for class voting. The three (3) Class A nominees and
the four (4) Class B nominees receiving a plurality of the votes cast by
each such class shall be elected Directors of their respective classes. The
Class C Common shares are not entitled to elect Directors.

/ / On substantially all other matters to be voted upon by stockholders (and
none is contemplated at the Meeting other than the ratification of the
appointment of Arthur Andersen LLP as independent auditors for 1995, the
Shareholder proposal herein, and the matters discussed under the heading
"Other Matters" discussed elsewhere herein), the holders of Class A, Class
B and C Class Common Stock vote together as a single class. In this
connection, when voting as a single class, holders of Class A and Class B
Common Stock have 40% and 60%, respectively, of the voting power.

REVOCATION

Any stockholder giving a proxy has the power to revoke it at any time prior to
the voting by written notice to the Secretary of the Company or by voting in
person at the Meeting.

VOTING SECURITIES AND SECURITY OWNERSHIP

On November 30, 1994, the Company had outstanding 10,613,380 shares of Class A
Common Stock ($.01 par value), 2,271,127 shares of Class B Common Stock ($.01
par value) and 100 shares of Class C Common Stock ($.01 par value). Each share
of Class A and Class C Common Stock is entitled to one vote with respect to the
ratification of the appointment of Arthur Andersen LLP as auditors (Proposal 2),
and any other matters to be voted upon at the Meeting, other than election of
directors. Each share of Class B Common Stock is entitled to 7.0097665 votes
with respect to Proposal 2 and on any other matter on which the holders of Class
A, Class B and Class C Common Stock vote together as a single class.

The following persons owned of record, or were known by the Company to own
beneficially, more than 5% of each class of its outstanding Common Stock as of
November 30, 1994:

Title Beneficial Ownership
of Directors, Executives as of November 30, 1994
Class Officers, and 5% Stockholders Amount Percentage
- ------- -------------------------------------- ---------- -----------

A First Capital Corporation of Chicago.. 1,743,500 16.42
#3 First National Place
Suite 1330
Chicago, IL 60602
A Stanley S. Shuman(*).................. 817,880 7.69
711 Fifth Avenue
New York, NY 10022
A How & Company......................... 600,000 5.65
c/o The Northern Trust Co.
P.O. Box 92303
Chicago, IL 60675-0002
B Bayou Steel Properties Limited(**).... 2,271,127 100.00
B Howard M. Meyers(**).................. 2,271,127 100.00
2777 Stemmons Freeway
Dallas, TX 75207
C Voest-Alpine International Corporation 100 100.00

- --------------------------
(*) See footnote 4 on page 5.
(**) See footnote 5 on page 5.

ELECTION OF DIRECTORS (PROPOSAL 1)

DIRECTORS

All of the Director nominees are members of the present Board of Directors.
All nominees are nominees for election as Directors, to hold office until the
next Annual Meeting of Stockholders and until their successors have been
elected. Unless authority to vote is specifically withheld by appropriate
designation on the face of the proxy, it is the intention of the persons named
in the accompanying proxy to vote the Class A shares represented thereby for
Messrs. John A. Canning, Jr., Lawrence E. Golub and Stanley S. Shuman, the three
nominees named below, for election as Class A Directors of the Company.

The Company has been advised by Bayou Steel Properties Limited (BSPL), the
holder of all of the Company's Class B shares, that it is the intention of such
holder to vote all of its Class B shares for Messrs. Melvyn N. Klein, Albert P.
Lospinoso, Howard M. Meyers and Jerry M. Pitts, the four nominees named below,
as Class B Directors of the Company.

Only proxies marked "For" the nominees or unmarked will be counted as "Votes"
in determining election of Directors, although the Company will follow any
instructions withholding authority to vote.

THE BOARD OF DIRECTORS RECOMMENDS THAT STOCKHOLDERS VOTE FOR THE CLASS A
DIRECTOR NOMINEES NAMED BELOW, AND, UNLESS A STOCKHOLDER GIVES INSTRUCTIONS ON
THE PROXY CARD TO THE CONTRARY, THE PROXIES NAMED THEREON INTEND SO TO VOTE.
MANAGEMENT DOES NOT CONTEMPLATE THAT ANY OF THE NOMINEES FOR CLASS A DIRECTOR
WILL BE UNABLE TO SERVE, BUT IF SUCH A SITUATION SHOULD ARISE, IT IS THE
INTENTION OF THE PERSONS NAMED IN THE ACCOMPANYING PROXY TO VOTE FOR THE
ELECTION OF SUCH OTHER PERSON OR PERSONS AS THE NOMINATING COMMITTEE OF THE
BOARD OF DIRECTORS MAY RECOMMEND.

BOARD OF DIRECTORS

During the fiscal years ended September 30, 1993 and September 30, 1994,
respectively, the Company's Board of Directors held six and five meetings,
respectively (including regularly scheduled and special meetings). All of the
incumbents attended at least 80% of the meetings of the Board and of the Board
committee of which they were members.

The following table sets forth certain information as to the Director nominees
(and as to the ownership of the Company's Class A Common Stock by Directors and
Officers of the Company, as a group) as of November 30, 1994:

NOMINEES

Number of
Shares of
Class A Percent of
Common Stock Class A
Name, Age and Director Beneficially Common Stock
Principal Occupation Since (1) Owned Outstanding
- ------------------------------------------------ --------- ------------ ------------

CLASS A DIRECTOR NOMINEES
John A. Canning, Jr., 50 /(2)/ 1988 195,000 1.84
President of Madison Dearborn Partners Inc.,
Capital Advisory Services, Chicago, Illinois
Lawrence E. Golub, 35 /(3)/ 1988 103,000 *
President of Golub Associates, Inc.
Equity Investment firm, New York, New York
Stanley S. Shuman, 59 /(4)(5)/ 1988 817,880 7.69
Executive Vice President & Managing Director
of Allen & Company Incorporated, investment
bankers, New York, New York
CLASS B DIRECTOR NOMINEES
Melvyn N. Klein, 52 /(5)(6)/ 1988 60,000 *
President, JAKK Holding Corporation,
a General Partner of GKH Partners, L.P.
Corpus Christi, Texas

(footnotes on following pages)

Albert P. Lospinoso, 58 /(5)(7)/ 1988 10,000 *
President and Chief Operating Officer
of RSR Corporation, nonferrous metals recycle
smelting and refining, Dallas, Texas
Howard M. Meyers, 52 /(5)(8)/ 1988 300,000 2.82
Chairman and Chief Executive Officer
of the Company
Jerry M. Pitts, 43 /(9)/ 1994 1,540 *
President and Chief Operating Officer
of the Company
All directors and executive officers as a group
(11 persons) 1,492,361 14.06
- --------------------------

* Less than one percent.
/(1)/ All director nominees, except Jerry M. Pitts, served from September 5,
1986 through July 19, 1988, as Directors of Bayou Steel Corporation (of
LaPlace), a Louisiana corporation, which was reincorporated as a Delaware
corporation through merger into the Company on July 19, 1988, and
thereafter as a director of the Company. Mr. Pitts was elected a Director
on September 21, 1994.

/(2)/ Includes 195,000 shares of Class A Common Stock owned by a partnership of
which Mr. John A. Canning is a general partner, and as to which he has
shared voting and investment power. Mr. Canning has been President of
Madison Dearborn Partners Inc., which is the management company for a
private equity investment fund, Madison Dearborn Capital Partners L.P., and
a limited partnership, Madison Dearborn Advisers, L.P., which provides
venture capital advisory services to First Chicago Corporation, since
January 1993. For more than five years prior to that, Mr. Canning was
President of First Capital Corporation of Chicago and First Chicago
Investment Corporation, both subsidiaries of First Chicago Corporation,
engaged in venture capital projects. He is a director of Tyco Toys, Inc.,
The Interlake Corporation, and The Milnot Corporation.

/(3)/ Mr. Lawrence E. Golub has been President of Golub Associates, Inc., an
equity investment firm, since August 1994. From September 1993 to August
1994, Mr. Golub was a Managing Director of Bankers Trust Company in New
York, New York. From September 1992 to August 1993, Mr. Golub was a White
House Fellow. Mr. Golub was Managing Director of Wasserstein Perella
Capital Markets from February 1990 to August 1992 and an officer of Allen &
Company Incorporated, an investment banking firm, from 1984 to February
1990. He is Chairman of Mosholu Preservation Corporation. From February 21,
1991, until September 21, 1994, Mr. Golub served as a Director elected by
the Class B Common stockholder.

/(4)/ Includes 522,528 shares of Class A Common Stock owned by Allen & Company
Holding, Inc., which owns all of the outstanding shares of Allen & Company
Incorporated; Mr. Stanley S. Shuman is an Executive Vice President and
Managing Director of both Allen & Company Holding, Inc. and Allen & Company
Incorporated. Mr. Shuman disclaims beneficial ownership of such shares.
Includes an aggregate of 60,000 shares of Class A Common Stock owned by
trusts for the benefit of Mr. Shuman's children, of which Mr. Shuman
disclaims beneficial ownership. Mr. Shuman has no voting or investment
power, shared or otherwise, in the foregoing shares. Mr. Shuman has been,
for more than the past five years, Executive Vice President, Managing
Director and member of the Executive Committee of Allen & Company
Incorporated. He is a Director of The News Corporation Limited, Hudson
General Corporation, Global Asset Management, U.S.A., Sesac Inc., Knight
Corporation, and Tower Air Inc.

/(5)/ Through his ownership of 60% of the common stock of BSPL, a Delaware
corporation, Mr. Howard M. Meyers controls BSPL's voting power. Since BSPL
owns 100% of the Company's Class B Common Stock, Mr. Meyers has the voting
control of Class B Common Stock which accounts for a maximum of 60% of the
voting power of the Company. Mr. Meyers may be deemed to "control" the
Company. Allen & Company Incorporated and Messrs. Klein, Lospinoso, and
Shuman are minority stockholders owning 2.08%, 2.77%, 0.76%, 1.17%
respectively, and Messrs. Lospinoso and Meyers are Directors of BSPL.

/(6)/ Mr. Melvyn N. Klein has been, for more than the past five years, a
practicing attorney and private investor in Corpus Christi, Texas. He has
been a Director of Quexco since 1984. He is the sole shareholder, sole
director and the President of JAKK Holding Corporation, a General Partner
of GKH Partners, L.P., which is the sole General Partner of GKH
Investments, L.P., an investment fund; President of Rockwood Holding
company; and a director of Itel Corporation, American Medical Holdings,
Inc., American Medical International, Inc., Santa Fe Energy Resources and
Savoy Pictures Entertainment, Inc.

/(7)/ Mr. Albert P. Lospinoso has been President of RSR Corporation ("RSR") a
privately owned, nonferrous metals recycle smelting and refining company
with offices in Dallas, Texas, and plants in Dallas, Texas; Middletown, New
York; Indianapolis, Indiana; and City of Industry, California, since July
1992 and is a director of RSR and Quexco Incorporated. For more than five
years prior to that he was the Executive Vice President, Chief Operating
Officer and a director of RSR and its predecessor companies.

/(8)/ Mr. Howard M. Meyers has been Director, Chairman of the Board, Chief
Executive Officer of the Company since September 5, 1986, and was also
President until September 21, 1994. Since 1984 he has been, Director,
Chairman of the Board, Chief Executive Officer and President of Quexco
Incorporated, a privately owned company, and the parent of RSR.

/(9)/ Mr. Jerry M. Pitts was elected Director, President and Chief Operating
Officer on September 21, 1994. He was elected Executive Vice President and
Chief Operating Officer of the Company on June 7, 1991. He had been
Executive General Manager of the Company since July 1, 1987. From 1986 to
1987, he served the Company as General Manager of Operations; from 1984 to
1986, he was Superintendent of Melting Operatings; and from 1980 to 1984,
he was General Foreman of Melting. Mr. Pitts worked in various management
capacities related to production and process engineering at U.S. Steel
Corporation from 1974 to 1980.

There are no family relationships among the directors and executive officers
of the Company.

Section 16(a) of the Securities Exchange Act of 1934 requires the Company's
officers and directors and persons who own more than ten percent of a registered
class of the Company's equity securities, to file reports of ownership and
changes in ownership with the Securities and Exchange Commission and the
American Stock Exchange. The Company believes that during the 1993 and 1994
fiscal years all Section 16(a) filing requirements applicable to its officers
and directors were complied with.

AGREEMENT CONCERNING CHANGE IN CONTROL

The shares of common stock of BSPL owned by Mr. Howard M. Meyers may not be
sold, nor may shares of BSPL be issued, at a price which represents a premium
attributable to the underlying Class B Common Stock over the market price of the
Class A Common Stock, to any person or group if such sale, when aggregated with
all prior sales during the preceding four-year period, would result in such
person or group owning more than 50% of the common stock of BSPL, unless such
person or group agrees to make a tender offer within 30 days for an equivalent
percentage of Class A Common Stock at the highest price paid by such person or
group (expressed in equivalent shares of Class B Common Stock) for the shares of
common stock of BSPL; provided that the Directors elected by the holders of the
Class A Common Stock waive the charter restriction prohibiting a purchaser from
acquiring 5% or more of the aggregate fair market value of the Class A Common
Stock. The agreement terminates when the holders of the Class B Common Stock no
longer have the right to elect a majority of the Board of Directors of the
Company.

The Company's Certificate of Incorporation provides that the Class B Common
Stock, which Mr. Meyers controls through his ownership interest in BSPL, loses
its power to control the Company if Mr. Meyers resigns, retires or is removed
for cause as Chief Executive Officer of the Company.

COMMITTEES OF THE BOARD

The Board of Directors has three committees, an Audit Committee, a
Compensation Committee and a Nominating Committee. During the fiscal year ended
September 30, 1993, the Audit Committee met twice and the Nominating Committee
once. During the fiscal year ended September 30, 1994, the Audit Committee met
twice, the Nominating Committee once, and the Compensation Committee once.

The Audit Committee presently consists of Messrs. Klein (Chairman), Lospinoso,
Canning, Shuman, and Golub. The Audit Committee is charged with the duties of
making recommendations to the Board of Directors regarding the selection of
independent auditors for the Company, reviewing the activities of such
independent auditors and of any internal audit activities of the Company,
disposing and deciding of major accounting policy matters directly or indirectly
affecting the Company, defining the scope of the annual audit of the Company,
and such other powers and duties as may be delegated to such committee by the
Board of Directors from time to time. The Audit Committee is also charged with
oversight of the Company's Health and Safety Policy and its Environmental
Compliance Policy, reviewing the independent audit reports of the independent
outside health, safety and environmental consultants engaged for such purposes,
defining the scope of such audits and such other powers and duties in the
health, safety and environmental areas as may be delegated to the Committee by
the Board of Directors.

The Compensation Committee presently consists of Messrs. Shuman (Chairman) and
Canning, neither of whom are current or former officers or employees of the
Company, nor serve on the compensation committee of any other company. The
Compensation Committee is empowered to establish compensation payable to
directors and executive officers of the Company, as well as any loans or
advances by the Company to such persons, subject to the provision that the chief
executive officer's compensation is controlled by an employment arrangement
between the chief executive officer and the Company. None of the officers of the
Company served as a director or member of the compensation committee of any
company with which any member of the Compensation Committee is associated.

The Nominating Committee presently consists of Messrs. Canning (Chairman),
Golub and Shuman. The Nominating Committee is empowered to nominate persons
solely for election as Class A Directors at the annual meeting of stockholders.
The Committee will consider candidates for nominees for directors recommended by
Class A stockholders if such recommendations are submitted in writing to the
Secretary of the Company giving the background and qualifications of the
candidate.

DIRECTOR'S COMPENSATION

The Company pays each outside director $30,000 per year, payable in quarterly
installments, for serving as a director, plus expenses for each meeting of the
Board of Directors that a director attends. The Company does not compensate
directors who are officers of the Company for services as directors. Mr. Meyers
and Mr. Pitts are the only directors who are officers of the Company.

SERVICE AGREEMENT

The Company, RSR and Quexco were parties to a Service Agreement dated
September 5, 1986 (the "Service Agreement"), pursuant to which RSR and Quexco
provided the Company advice with respect to certain mutually agreed upon
services enumerated in the agreement. The agreement has been terminated with
respect to services provided by RSR effective September 2, 1994, and with
respect to services provided by Quexco effective September 30, 1994. The Company
paid to RSR and/or Quexco a fee equal to the costs of performing such services
(including direct salary, fringe benefits, general and administrative overhead
and other charges incurred directly in connection with the provision thereof).
Messrs. Klein, Lospinoso and Meyers are directors of Quexco and each of Messrs.
Meyers and Lospinoso is President of Quexco and RSR, respectively. For fiscal
1994 the fees paid were $64,000. The Company believes that the terms of the
Service Agreement were fair and reasonable.

AGREEMENTS WITH ALLEN & COMPANY INCORPORATED

The Company entered into an agreement with Allen & Company Incorporated on May
28, 1987, pursuant to which the Company granted Allen & Company Incorporated a
right of first refusal, on competitive terms, to perform investment banking
services for the Company in connection with all Company initiated investment
banking transactions until September 4, 1996. "Competitive terms" is defined to
include considerations of costs and expenses, services rendered and ability to
perform. No compensation was paid to Allen & Company Incorporated since 1988.
Stanley S. Shuman, a director of the Company, is Executive Vice President and
Managing Director of Allen & Company Incorporated and Lawrence E. Golub, also a
director of the Company, was a Vice President of Allen & Company Incorporated
until February 1990.

AGREEMENTS WITH MMG PATRICOF & CO.

On June 20, 1991, MMG Patricof & Co. Inc. and MMG Placement Corp. entered into
an agreement with the Company with respect to merger and acquisition advisory
and private placement services in connection with a proposed corporate
acquisition by the Company which existed at that time. Mr. Patricof, a former
director of the Company, is a minority shareholder in the investment banking
firm of Patricof & Co. Capital Corp. ("Patricof") and its affiliate MMG
Placement Corp. ("Placement"), successors to MMG Patricof & Co. No compensation
was paid during fiscal 1991 and 1992; $25,000 was paid during fiscal 1992 for
out-of-pocket expenses. On December 16, 1992, Patricof entered into a second
arrangement with the Company to provide merger and acquisition advisory services
in connection with a proposed corporate acquisition by the Company. The
agreement provided for a retainer not to exceed $25,000. By its terms, the
agreement ended on December 16, 1993. Patricof was paid $25,000 for services
provided under the terms of such agreement during fiscal 1993. Each of the
foregoing agreements includes certain indemnification provisions which survive
termination.

EXECUTIVE COMPENSATION

The following table sets forth the compensation received by the Company's
Chief Executive Officer and the four other most highly-compensated executive
officers for the fiscal years 1994, 1993, and 1992.

SUMMARY COMPENSATION TABLE

Long-Term
Compensation
--------------
Annual Compensation Award of
Name and -------------------- Stock Options All Other
Principal Position Year Salary Bonus/(1)/ (# of Shares) Compensation/(2)/
- ----------------------------- ---- -------- ---------- -------------- -----------------

Howard M. Meyers............. 1994 $437,990 $ -0- -0- $ -0-
Chairman and Chief 1993 437,990 -0- -0- -0-
Executive Officer 1992 435,041 -0- -0- -0-

Jerry M. Pitts............... 1994 225,000 9,750 30,000 1,428
President and Chief 1993 225,000 9,750 -0- 1,316
Operating Officer 1992 225,000 9,750 -0- 1,702

Timothy R. Postlewait........ 1994 150,000 6,000 15,000 1,602
Vice President 1993 150,000 6,000 -0- 1,560
of Plant Operations 1992 150,000 6,000 -0- 1,560

Richard J. Gonzalez.......... 1994 147,000 5,313 15,000 1,638
Vice President, Treasurer, 1993 147,000 5,313 -0- 1,462
Secretary and Chief 1992 147,000 5,313 -0- 1,498
Financial Officer

Rodger A. Malehorn........... 1994 120,000 -0- 15,000 1,488
Vice President of 1993 120,000 5,313 -0- 1,253
Commercial Operations 1992 120,000 5,313 -0- 1,253

- --------------------------
/(1)/ Bonus includes incentive compensation paid pursuant to the Company's
Incentive Compensation Plan and reflects awards made in 1988, half of which
was paid in 1989 and the remainder of which was paid from 1990 to 1993. No
awards were made since 1988. See "Employee Benefit Plans -- Incentive
Compensation Plan." Bonus also includes a discretionary award in fiscal
1994 by the Board of Directors for performance.

/(2)/ Includes amounts contributed by the Company to the Company's Savings Plan,
a 401(k) Plan in respect of matching contributions. As of September 30,
1994, the Company's contributions were $1,326 for Mr. Pitts, $1,500 for Mr.
Postlewait, $1,464 or Mr. Gonzalez, and $1,200 for Mr. Malehorn. Also
includes the dollar value of term life insurance premiums paid by the
Company for the benefit of these officers.

OPTION GRANTS TABLE

The following table sets forth certain information concerning stock options
granted during fiscal 1994 to the named executives.

OPTION GRANTS IN LAST FISCAL YEAR

Individual Grants
------------------------------------------------
Number of % of Total Potential Realizable Value at
Securities Options Assumed Annual Rates of Stock
Underlying Granted to Exercise or Price Appreciation for Option Term/(2)/
Options Employees Base Prices Expiration ------------------------------------------
Name Granted in 1994 Per Share Date/(1)/ 0% 5% 10%
- ----------------------- ---------- ---------- ----------- ---------- ---- ----------- -----------

Howard M. Meyers....... -0- 0.0% $ N/A N/A $N/A $ N/A $ N/A
Jerry M. Pitts......... 30,000 26.1 4.375 9/21/04 -0- 82,530 209,190
Timothy R. Postlewait.. 15,000 13.0 4.375 9/21/04 -0- 41,265 104,595
Richard J. Gonzalez.... 15,000 13.0 4.375 9/21/04 -0- 41,265 104,595
Rodger A. Malehorn..... 15,000 13.0 4.375 9/21/04 -0- 41,265 104,595
All Stockholders....... 35,761,918 90,646,260

- --------------------------
/(1)/ Such options were granted under the Company's 1991 Stock Option Plan and
become exercisable in five equal annual installments commencing on
September 21, 1995.

/(2)/ The amounts shown under these columns are the result of calculations at 0%
and at the 5% and 10% rates required by the Securities and Exchange
Commission and are not intended to forecast future appreciation of the
Company's stock price.

OPTION EXERCISES AND YEAR-END VALUE TABLE

The following table summarizes stock options exercised during fiscal 1994 and
presents the value of unexercised options at September 1994.

AGGREGATED OPTION EXERCISES AND FISCAL YEAR-END OPTION VALUE

Number of
Securities Value of
Underlying Unexercised
Unexercised In-the-Money
Options at Options at
September 30, 1994 September 30, 1994/(1)/
Shares Acquired Value ------------------ -----------------------
Name on Exercise (#) Realized All Unexercisable All Unexercisable
- ----------------------- ---------------- -------- ------------------ -----------------------

Howard M. Meyers....... -0- $-0- -0- $N/A
Jerry M. Pitts......... -0- -0- 30,000 -0-
Timothy R. Postlewait.. -0- -0- 15,000 -0-
Richard J. Gonzalez.... -0- -0- 15,000 -0-
Rodger A. Malehorn..... -0- -0- 15,000 -0-

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

/(1)/ On September 30, 1994, the closing price for Bayou Steel Corporation's
Class A Common Stock on the American Stock exchange was $4.125.

EMPLOYMENT CONTRACT

Howard M. Meyers serves as Chief Executive Officer of the Company and in
connection therewith has signed a letter agreement dated July 26, 1988,
containing a provision included in his prior employment agreement (which has
terminated in accordance with its terms), which provides that all steel-related
acquisition activities undertaken by Mr. Meyers must be through the Company and
that all other acquisition activities undertaken by Mr. Meyers must be through
the Company to the extent required by any fiduciary duty of Mr. Meyers as a
direct or indirect controlling shareholder and/or director of the Company,
giving effect to the principles embodied in the legal doctrine of "corporate
opportunity," which requires that directors, officers and other persons with a
fiduciary duty towards a corporation not appropriate for their own benefit and
advantage a business opportunity properly belonging to the corporation. The
compensation payable to Mr. Meyers for all services performed on behalf of the
Company in any capacity is limited by the terms of the letter agreement and a
Stock Purchase Agreement, dated as of August 28, 1986, between the Company and
certain original purchasers of the Company's Class A Common Stock which provides
that Mr. Meyers may not earn more than the greater of (x) $350,000 multiplied by
a fraction the numerator of which is the consumer price index with respect to
the December immediately preceding the year in question and the denominator of
which is the consumer price index for December 1985 or (y) 2% of the Company's
pretax net income earned in the previous fiscal year (or 1% if Mr. Meyers is no
longer both the Chairman and Chief Executive Officer of the Company with
substantial day-to-day managerial responsibilities).

INCENTIVE COMPENSATION PLAN

The Company has instituted an Incentive Compensation Plan (the "ICP") to
provide incentives for the attainment of corporate financial objectives to those
key employees of the Company (including all executive officers, except Mr.
Meyers), as selected by the ICP's Administrative Committee, who have the
responsibility and authority to affect the operating results of the Company.
Each year the Board of Directors may, in its sole discretion, cause to be
credited to the ICP any amount not to exceed fifty percent of the aggregate of
the base salaries of the participants in the ICP for such year. The
Administrative Committee, composed of one or all of the Company's officers,
including Howard M. Meyers, as appointed by the Compensation Committee,
determines the amounts awarded to each participant based on quantitative
measures of performance relating to financial or other indicators of performance
for the Company and achievement of measurable individual goals of participants
established prior to the commencement of each year. One-half of a participant's
award is paid in the February following the year to which the award relates. The
balance of such award is divided into fourths and paid to each participant
during the February of each of the four years next succeeding the year in which
the initial payment was made. If a participant is not employed by the Company on
February 1 following the year to which an award relates or on the February 1 of
any of the succeeding four years, such participant shall forfeit all awards or
installments thereof which have been accrued but not actually paid. No awards
have been made since 1988.

RETIREMENT PLAN

The following table specifies the estimated annual benefits upon retirement
under the Retirement Plan to eligible employees of the Company of various levels
of average annual compensation and for the years of service classifications
specified:

PENSION PLAN TABLE

Years of Service
Average Annual ----------------------------------
Compensation 10 20 30 45
- ------------------ ------- ------- ------- -------

$ 20,000 $ 1,200 $ 2,400 $ 3,600 $ 3,600
50,000 4,270 8,450 12,810 12,810
100,000 9,770 19,450 29,310 29,310
150,000 15,270 30,450 45,810 45,810
200,000 15,270 30,450 45,810 45,810
250,000 15,270 30,450 45,810 45,810
300,000 15,270 30,450 45,810 45,810

The Company has adopted the Bayou Steel Corporation Retirement Plan (the
"Retirement Plan") and has filed a request for approval by the Internal Revenue
Service. The Retirement Plan became effective October 1, 1991. The Retirement
Plan is a defined benefit plan for eligible employees of the Company not covered
by a collective bargaining agreement (the Company adopted a separate retirement
plan for Union employees that also became effective October 1, 1991). Employees
are automatically eligible to participate on the October 1 or April 1 following
the completion of one year of service. Service before the effective date of the
Retirement Plan is credited to participants for purposes of retirement benefit
calculation. Contributions to the Retirement Plan are provided solely from the
Company contributions; employees are unable to make contributions. A
participant's benefits under the Retirement Plan are vested after five years of
service. Under the terms of the Retirement Plan the monthly retirement benefits
of a participant payable at the participant's normal retirement date are equal
to (i) .6% of average monthly compensation, multiplied by years of credited
service (not to exceed 30 years), plus (ii) .5% of that portion, if any, of
average monthly compensation which is in excess of the participant's average
social security taxable wage base, multiplied by years of credited service (not
to exceed 30 years). Normal retirement under the Retirement Plan is age 65 with
at least five years of service. The Tax Code limits the amount of annual
compensation that may be counted for the purpose of calculating pension
benefits, as well as the annual pension benefits that may be paid, under the
Retirement Plan. For 1994, these amounts are $150,000 and $118,800,
respectively. For 1994 the Retirement Plan also limits the amount of annual
compensation that may be counted for the purpose of calculating pension benefits
to $250,000.

The figures for estimated annual retirement benefits are computed on a
straight life annuity basis and are payable to an employee who attains age 65 in
1994 and are exclusive of retirement benefits from Social Security.

Earnings of the named executive officers, for purposes of calculating pension
benefits, approximate the aggregate amounts shown in the Annual Compensation
columns of the Summary Compensation Table, except for Mr. Meyers whose earnings
for purposes of such calculation are subject to the $250,000 limitation
discussed above.

The years of credited service under the Retirement Plan as of October
1, 1994 for each of the five most highly compensated officers of the Company
are: Howard M. Meyers, 8.1 years; Jerry M. Pitts, 13.8 years; Richard J.
Gonzalez, 11 years; Rodger A. Malehorn, 10.5 years; and Timothy R. Postlewait,
13.3 years.

REPORT OF THE COMPENSATION COMMITTEE

This report by the Compensation Committee shall not be deemed to be
incorporated by reference by any general statement which incorporates this Proxy
Statement by reference into any filing under the Securities Act of 1933 or the
Securities Exchange Act of 1934, as amended, (the "Acts"), and they shall not
otherwise be deemed filed under such Acts.

COMPENSATION COMMITTEE REPORT ON EXECUTIVE COMPENSATION

The Company's executive compensation program is designed to attract, retain,
reward and motivate executive management talent required to achieve its short
and long-term business objectives, maintain its competitive position in the
steel minimill industry, and increase shareholder value. These programs are
administered and effected by the Company's management through a system of
internal performance reviews at all management levels and reviewed and monitored
by the Compensation Committee of the Board of Directors which is comprised of
outside directors of the Company.

GENERAL

Total compensation for the Company's executive officers consists principally
of cash compensation in the form of a base salary, supplemented by an annual
incentive compensation plan. An equity component in the form of a stock option
plan is also available as a long-term incentive, but has not been utilized as
part of the total compensation package until 1994 when stock options were
awarded to key executives. The incentive compensation bonus introduces elements
of risk to the total compensation package which vary and fluctuate significantly
from year to year and are directly tied to Company and individual performance;
no awards have been made since 1988.

The Company regularly reviews the competitiveness of its executive
compensation programs within the general steel and minimill industries in which
it competes and within other comparable metals manufacturing industries, and
targets a level of total compensation based on its competitor group for
comparable jobs, adjusting for company size. Total compensation is generally set
at the median of the companies surveyed. The competitiveness of the total
compensation package for executives, including the long-term stock option
incentive, was reviewed by an independent compensation consultant in fiscal year
1994. While some of the companies in the peer group chosen for comparison of
shareholder returns in the performance graph on page 13 may be included in the
information considered by the Committee in setting executive compensation, there
is no set competitor group against which that compensation is measured. The
selection of the competitive peer group was done with the advice of the
independent compensation consultant. The peer group generally represented
publicly traded minimills. The actual value to the Company's executives will
depend ultimately on Company performance, economic conditions and the general
business environment. The evaluation decisions are largely subjective and do not
entail precise weighing of any particular factor. The objective is to ensure
that a significant portion of compensation is through the cash component given
the stated conditions and environment.

The Committee's responsibility and practice is to review and approve the
salaries for executive officers and proposed incentive compensation awards
annually. The Committee receives recommendation from the Chief Executive Officer
for the other executive officers. The Committee reviews these recommendations,
may request additional information, relies on its own independent knowledge, and
ultimately decides to approve, recommend changes or disapprove salary actions.

COMPENSATION OF CHIEF EXECUTIVE OFFICER

The compensation payable to Mr. Meyers for all services performed on behalf of
the Company in any capacity is limited by the terms of a letter agreement dated
July 26, 1988, which continues in force a provision of a prior employment
agreement which has terminated in accordance with its terms, and a Stock
Purchase Agreement dated as of August 28, 1986, between the Company and certain
original purchasers of the Company's Class A Common Stock. The two agreements
are described on page 10 of this Proxy Statement under Employment Agreement and
provide that Mr. Meyers may not earn more than the greater of (x) the Base
Amount (as was defined in the prior employment agreement) or (y) 2% of the
Company's pretax net income earned in the previous year (or 1%, if Mr. Meyers is
no longer both the Chairman and Chief Executive Officer of the Company with
substantial day-to-day managerial responsibilities). In addition to the
limitation and factors described in the previous sentence, in establishing Mr.
Meyers' level of compensation, the Compensation Committee considers the
competitive elements previously described, Mr. Meyers' broad experience in both
the steel and other metals industries, compensation paid to chief executive
officers of public corporations of similar size, his equity position in the
Company and his voluntary decision not to participate in the incentive
compensation, savings or stock option plans described above.

Submitted by the Compensation Committee
John A. Canning, Jr., Chairman
Stanley S. Shuman

STOCKHOLDER RETURN PERFORMANCE GRAPH

The following graph compares the change in the cumulative total shareholder
return on the Company's Common Stock with the total return of the Standard &
Poor's 500 Stock Index and an index of peer companies selected by the Company
for the period of five years commencing on October 1, 1989 and ending on
September 30, 1994. The graph assumes an investment on October 1, 1989 of $100
in Bayou Steel Corporation Common Stock, Standard & Poor's 500 Stock Index and
the common stock of the peer group, and that all dividends were reinvested. The
peer group consists of 8 domestic steel minimills.

[GRAPH APPEARS HERE]
COMPARISON OF FIVE YEAR CUMULATIVE TOTAL RETURN
BAYOU STEEL CORPORATION

Measurement period Bayou S&P Peer
(Fiscal year Covered) Steel 500 Group
- --------------------- -------- -------- --------

Measurement PT -
__/__/__ $ _____ $ _____ $ _____

FYE __/__/89 $ 100 $ 100 $ 100
FYE __/__/90 $ 33 $ 91 $ 66
FYE __/__/91 $ 48 $ 119 $ 72
FYE __/__/92 $ 43 $ 132 $ 87
FYE __/__/93 $ 58 $ 149 $ 116
FYE __/__/94 $ 79 $ 154 $ 118

The Company believes that for the business in which it operates a comparison
of cumulative total return from different time periods is appropriate to show
how these returns may vary. Accordingly, for this year the Company has included
a comparison of cumulative total return for the four years beginning October 1,
1990.

[GRAPH APPEARS HERE]
COMPARISON OF FOUR YEAR CUMULATIVE TOTAL RETURN
BAYOU STEEL CORPORATION

Measurement period Bayou S&P Peer
(Fiscal year Covered) Steel 500 Group
- --------------------- -------- -------- --------

Measurement PT -
__/__/__ $ _____ $ _____ $ _____

FYE __/__/90 $ 100 $ 100 $ 100
FYE __/__/91 $ 143 $ 131 $ 108
FYE __/__/92 $ 129 $ 146 $ 131
FYE __/__/93 $ 175 $ 165 $ 131
FYE __/__/94 $ 236 $ 169 $ 180

The peer group consists of the following corporations: Birmingham Steel
Corporation, Chaparral Steel Company, Commercial Metals Company, Laclede Steel
Company, New Jersey Steel Corporation, N.S. Group, Inc., Roanoke Electric Steel
Corporation and Northwestern Steel and Wire Company.

RATIFICATION OF THE APPOINTMENT OF
ARTHUR ANDERSEN LLP AS AUDITORS (PROPOSAL 2)

The Board of Directors has appointed the firm of Arthur Andersen LLP,
independent certified public accountants, to examine the financial statements of
the Company for the year ending September 30, 1995. Arthur Andersen LLP has been
employed as independent auditors to the Company and its predecessor since its
inception in 1979. Stockholders are asked to ratify the action of the Board of
Directors in making such an appointment.

If the appointment of Arthur Andersen LLP for fiscal year 1995 is not ratified
by the Stockholders, the selection of other independent auditors will be
considered by the Board of Directors.

Representatives of Arthur Andersen LLP are not expected to be present at the
Meeting, but will be afforded the opportunity to make a statement by open
telephone, if they so desire, and will also be available to respond to
appropriate questions by open telephone.

THE BOARD OF DIRECTORS RECOMMENDS A VOTE FOR RATIFICATION OF THE APPOINTMENT
OF ARTHUR ANDERSEN LLP AS AUDITORS AND IT IS INTENDED THAT PROXIES WILL BE SO
VOTED UNLESS MARKED TO THE CONTRARY OR AS ABSTENTIONS.

SHAREHOLDER PROPOSAL (PROPOSAL 3)

The Bayou Steel Shareholder Committee (the "Committee"), c/o the United
Steelworkers of America, Five Gateway Center, Pittsburgh, PA 15222, has notified
the Company that it will present the following proposal for action at the Annual
Meeting. In its notification, the Committee has represented that it holds in the
aggregate 467 shares of the Company's Class A Common Stock. Information
regarding the names and addresses of the members of the Committee and the number
of shares of Class A Common Stock owned by each will be furnished by the Company
to any person, orally or in writing as requested, promptly upon the receipt of
any oral or written request therefor.

The resolution submitted by the Committee is as follows:

BE IT RESOLVED: That the shareholders of Bayou Steel Corporation ("Company")
hereby urge that the Company's Board of Directors take the steps necessary to
amend the Company's by-laws, effective after the 1994 annual meeting of
shareholders, to provide that the Board of Directors shall consist of a majority
of Independent Directors. For these purposes, the definition of Independent
Director shall mean a director who:

/ / has not been employed by the Company or an affiliate in an executive
capacity within the last five years;

/ / is not a member of a corporation or firm that serves as one of the
Company's paid advisors or consultants;

/ / has no personal services contract with the Company;

/ / is not a director of a Company on which Bayou Steel's Chairman, Chief
Executive Officer or President is also a board member;

/ / is not a shareholder who has signed shareholder agreements legally binding
him or her to vote with Howard M. Meyers or management;

/ / is not an individual or member of any entity that owns or controls five
percent or more of a company that is owned or controlled by Howard M.
Meyers either as an individual or as a member of any entity, for as long as
Mr. Meyers may be deemed to "control' the Company.

SHAREHOLDER'S SUPPORTING STATEMENT

The purpose of this Shareholder Resolution is to incorporate within the Board
of Directors a basic standard of independence that we believe will permit clear
and objective decision-making in the best long-term interests of shareholders. A
Board of Directors must formulate corporate policies and monitor the activities
of management in implementing those policies. Given this critical oversight
role, we believe it is in the best interest of shareholders if at least a
majority of our representatives be independent, as defined above.

The Business Roundtable, an association of Fortune 200 CEO's also supports
corporate boards of directors being composed of a majority of independent
directors.

Bayou Steel's current board of directors is composed of two current officers
(Meyers and Pitts), three who are directors or officers of an affiliate of Bayou
Steel Corporation, Quexco, Inc. (Meyers, Lospinoso, Klein), three who have
business arrangements with the Company through other holdings (Meyers, Lospinoso
and Shuman), and one whose firm has an interlocking investment relationship with
Quexco, Inc. (Golub). Only one of Bayou Steel's seven directors meets the basic
standard of independence set forth in the Resolution proposed by the Shareholder
Committee (Canning, Jr.).

Moreover, the recent announcement by Howard M Meyers of the appointment of
Jerry Pitts to the Company's Board of Directors only exacerbates this problem.
Mr. Pitts also assumes the title of Bayou Steel Corporation's President. Mr
Pitts cannot, therefore, be labeled an "independent" director.

We urge you to VOTE FOR THIS RESOLUTION. We believe a Board of Directors
composed of a majority of Independent Directors will help insure better
management accountability.

STATEMENT BY THE DIRECTORS IN OPPOSITION
TO THE SHAREHOLDER PROPOSAL

YOUR BOARD OF DIRECTORS UNANIMOUSLY RECOMMENDS A VOTE AGAINST THIS PROPOSAL #3
FOR THE FOLLOWING REASONS:

The Board of Directors believes that it is important that the stockholders of
the Company have a clear understanding of who is responsible for the foregoing
proposal. The stockholder proposal, and the statement in support thereof, was
submitted to the Company by a group calling itself the "Shareholder Committee."
However, it is clear that the Shareholder Committee is a thinly veiled alter ego
of the United Steelworkers of America (the "Union") and that the submission of
the stockholder proposal is consistent with the Union's previous announcement of
its intent to wage a "corporate campaign" against the Company and its management
in an effort to pressure management to make ill-advised concessions and bring to
an end the Union's long strike which began in March 1993 and continues against
the Company. In this regard, the Board has observed that during the past several
years, it has become an increasingly common tactic for unions to engage in
corporate campaigns under similar circumstances in a misguided effort to damage
the credibility and weaken the resolve of management that is engaged in a
confrontation with the union.

As evidence of the foregoing, the Board of Directors has noted that the letter
to the Company stating the intent of the Shareholder Committee to introduce the
proposal at the Annual Meeting was printed on the Union's letterhead. Moreover,
in materials supplied to the Company, the Union identified the Shareholder
Committee as consisting of itself, as the holder of five shares of the Company's
common stock, and "numerous" other individuals owning in the aggregate an
additional 462 shares of common

stock. Even assuming this claim of stock ownership to be true (which the Company
does not concede), as of the date hereof, the total market value of the
Company's common stock held by the Shareholder Committee is less than $1,500, or
approximately .00003 of market capitalization. Moreover, management of the
Company believes that most, if not all, of the other members of the Shareholder
Committee are union members, and that most, if not all, of the members of the
Shareholder Committee only recently purchased the shares of Company common stock
that they claim to own.

It is apparent to your Board of Directors that the proposal and the Union's
corporate campaign are not in any sense motivated by a legitimate desire to
advance your best interests as a stockholder. Instead, the Union's tactic is a
misguided effort to pressure management to accede to the Union's demands that
have prolonged the strike.

The Company's Board of Directors is fully informed regarding the ongoing
debate over the appropriate governance structure of American corporations. The
Board continually evaluates these concerns in fulfilling its obligations to
manage the Company in the best interests of its stockholders. In this regard, we
can not help but note that, in its Statement in Support of its proposal, the
Shareholder Committee has misleadingly characterized certain recommendations of
the Business Roundtable, which generally express the desirability of a public
company having an independent Board of Directors, as being supportive of the
unworkable definition of independent directors that is set forth in the
proposal. In fact, the Business Roundtable recommendations stand for a much more
limited proposition; namely, that Boards of Directors of large public companies
should be composed predominantly of directors who are not members of management.
In this regard, five of the Company's seven directors, or a substantial majority
of the Company's Board, are not members of management of the Company, and
therefore are independent by the Business Roundtable's definition. In addition,
all members of all committees of the Board are outside non-management directors.
Clearly, the overall composition of the Board of Directors of the Company
indicates the desire of the Board to nominate persons who have a financial stake
in the Company, because such persons are well suited to protect and advance the
interests of all stockholders. In addition, these persons represent a broad
range of business and industry experience as well as proven records of
accomplishments. If the Board of Directors were to adopt the narrow definition
of independence proposed by the "Shareholder Committee," it would be precluded
from seeking as directors many persons who, through investment or financial
relationships with the Company, are often the most knowledgeable and familiar
with the Company and its operations, and are thus in the best position to
advance the interests of the Company and its stockholders.

THE BOARD OF DIRECTORS UNANIMOUSLY RECOMMENDS THAT YOU VOTE "AGAINST" THIS
PROPOSAL (#3 ON YOUR PROXY)

OTHER MATTERS

As of the date of this Proxy Statement, the Board of Directors does not know
of any other matters to be presented for consideration at the Annual Meeting
other than five proposals of a stockholder that have been omitted from this
Proxy Statement in accordance with Rule 14a-8 promulgated by the Securities and
Exchange Commission because such rule limits the number of proposals a
stockholder may submit for inclusion in a company's proxy statement to one. If
the omitted stockholder proposals or other matters should properly come before
the Annual Meeting, the persons named in the enclosed form of Proxy, or their
substitutes, will vote the shares represented by the proxies with respect to any
such matters in accordance with their best judgement.

The cost of preparing and mailing this Proxy Statement and the accompanying
proxy, and the cost of solicitation of proxies on behalf of the Board of
Directors, will be borne by the Company. Solicitation will be made by mail. Some
personal solicitation may be made by directors, officers and employees without
special compensation, other than reimbursement for expenses.

Proposals which stockholders wish to include in the Company's proxy materials
relating to the 1996 Annual Meeting of Stockholders must be received by the
Company no later than August 22, 1995.

Please promptly complete and return your proxy in the enclosed self-addressed,
stamped envelope.

By order of the Board of Directors

[SIGNATURE OF RICHARD J. GONZALEZ APPEARS HERE]

RICHARD J. GONZALEZ,
Secretary

La Place, Louisiana
December 16, 1994

P R O X Y

BAYOU STEEL CORPORATION
PROXY SOLICITED BY BOARD OF DIRECTORS
FOR ANNUAL MEETING OF STOCKHOLDERS, JANUARY 26, 1995

The undersigned hereby appoints HOWARD M. MEYERS and LAWRENCE E. GOLUB, or
either of them, proxies, each with power of substitution, to vote all shares
the undersigned is entitled to vote at the Annual Meeting of Stockholders of
Bayou Steel Corporation to be held at 111 East 48th Street, New York, New York
10017, on January 26, 1995 at 10:00 a.m., local time, and all adjournments
thereof as directed below and on the reverse side of this card and, in their
discretion, upon any other matters which may properly come before the Meeting
or any adjournment thereof.

PLEASE INDICATE BELOW AND ON THE REVERSE SIDE OF THIS CARD HOW YOUR CLASS A
COMMON STOCK IS TO BE VOTED.

IF NOT OTHERWISE SPECIFIED, SHARES WILL BE VOTED FOR ALL CLASS A NOMINEES IN
PROPOSAL 1, AND FOR PROPOSAL 2, AND AGAINST PROPOSAL 3 ON THE REVERSE SIDE OF
THIS CARD.

THE BOARD OF DIRECTORS RECOMMENDS A VOTE FOR PROPOSALS #1 AND #2,
AND AGAINST PROPOSAL #3.

1. Election of the following nominees as Class A Directors: John A. Canning,
Jr., Lawrence E. Golub, Stanley S. Shuman.

2. Ratification of the appointment of Arthur Andersen LLP an Independent
auditors.

3. Shareholder proposal.

SEE
REVERSE
SIDE
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------

THIS IS YOUR TICKET OF ADMISSION TO THE 1995 ANNUAL MEETING OF STOCKHOLDERS OF
BAYOU STEEL CORPORATION, TO BE HELD AT 111 EAST 48TH STREET, NEW YORK, NEW YORK
10017 ON JANUARY 26, 1995 AT 10:00 A.M. LOCAL TIME.

THIS TICKET WILL NOT BE VALID UNLESS THE BOX ON THE PROXY CARD IS CHECKED
INDICATING THAT YOU PLAN TO ATTEND THE ANNUAL MEETING.

NOTE: CAMERAS AND VIDEO EQUIPMENT ARE NOT PERMITTED AT THE ANNUAL MEETING.

DOORS WILL OPEN AT 9:00 A.M.

[SIGNATURE OF
RICHARD J. GONZALEZ
APPEARS HERE]

RICHARD J. GONZALEZ
SECRETARY

/X/ Please SHARES IN YOUR NAME
mark
your
votes as
in this
example.

FOR WITHHELD FOR AGAINST ABSTAIN This Proxy when properly
1. Election of / / / / 2. Ratification of / / / / / / executed will be voted in the
Directors the selection of manner directed herein by the
(see reverse) independent undersigned. If no direction is
auditors. made, this Proxy will be voted
For all, except vote withheld from the FOR each of the nominees for
following candidate(s): 3. Shareholder Class A Directors named on the
proposal. / / / / / / reverse side, FOR proposal 2, and
--------------------------------------- AGAINST proposal 3.
The Board of Directors recommends a vote
FOR proposals 1 & 2 and AGAINST proposal 3.

4 / / Check Here to Validate the
Attached Annual Meeting
Ticket.
SIGNATURE(S) DATE
------------------------------- ------

SIGNATURE(S) DATE
------------------------------- ------
NOTE: Please sign as name appears above. Joint The proxies will vote in accordance with their
owners should each sign. When signing as discretion on such other matters as may properly
attorney, executor, administrator, come before the meeting. The undersigned
trustee or guardian, please give full hereby revoke all proxies heretofore given by the
title as such. undersigned to vote at said meeting or any
adjournments thereof.

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

Dear BSC Stockholder:

Your vote is important. Attached is your 1995 Bayou Steel Corporation Proxy
Card. Please read both sides of the card, and mark, sign and date it. DETACH
and return it promptly using the enclosed envelope. We urge you to vote your
shares.

You are invited to attend the Annual Meeting of Stockholders on Thursday,
January 26, 1995 at 10 A.M. at 111 East 48th Street, New York, New York 10017.
A ticket is required for admission. You need to check box number 4 on the proxy
form above to indicate your plan to attend and to validate your attached
preprinted ticket. Detach the ticket and bring it with you to the meeting.

Thank you very much for your cooperation and continued loyalty as a Bayou Steel
Stockholder.

[SIGNATURE OF RICHARD J. GONZALEZ
APPEARS HERE]

Richard J. Gonzalez
Secretary
- -----------------------------------------------------------------------------------------------------------------------
[LOGO OF BAYOU STEEL CORPORATION BAYOU STEEL CORPORATION
APPEARS HERE]

TICKET OF ADMISSION

Annual Meeting of Stockholders must
Stockholders have a ticket for
admission to the
January 26, 1995 meeting. This
ticket is issued
10 A.M. to the stockholder whose
name appears on it and is
non-transferrable.