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SCHEDULE 14A
(RULE 14A-101)
INFORMATION REQUIRED IN PROXY STATEMENT
SCHEDULE 14A INFORMATION
PROXY STATEMENT PURSUANT TO SECTION 14(A) OF THE SECURITIES
EXCHANGE ACT OF 1934 (AMENDMENT NO. )
Filed by the Registrant [ ]
Filed by a Party other than the Registrant [X]
Check the appropriate box:
<TABLE>
<S> <C>
[ ] Preliminary Proxy Statement [ ] Confidential, for Use of the Commission
Only (as permitted by Rule 14a-6(e)(2))
[ ] Definitive Proxy Statement
[X] Definitive Additional Materials
[ ] Soliciting Material Pursuant to Rule 14a-11(c) or Rule 14a-12
</TABLE>
BIRMINGHAM STEEL CORPORATION
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(Name of Registrant as Specified In Its Charter)
THE UNITED COMPANY SHAREHOLDER GROUP
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(Name of Person(s) Filing Proxy Statement, if other than the Registrant)
Payment of Filing Fee (Check the appropriate box):
[X] No fee required.
[ ] Fee computed on table below per Exchange Act Rules 14a-6(i)(1) and 0-11.
(1) Title of each class of securities to which transaction applies:
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(2) Aggregate number of securities to which transaction applies:
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(3) Per unit price or other underlying value of transaction computed
pursuant to Exchange Act Rule 0-11 (set forth the amount on which the
filing fee is calculated and state how it was determined):
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(4) Proposed maximum aggregate value of transaction:
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(5) Total fee paid:
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[ ] Fee paid previously with preliminary materials:
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[ ] 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:
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(2) Form, Schedule or Registration Statement No.:
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(3) Filing Party:
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(4) Date Filed:
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UNITED COMPANY SHAREHOLDER GROUP SENDS LETTER TO BIRMINGHAM STEEL SHAREHOLDERS -
EMPHASIZES REASON FOR PROXY CONTEST
Bristol, Va. - Nov. 24, 1999 - [NYSE:BIR] - The United Company Shareholder Group
today said it had mailed a letter to Birmingham Steel Corporation shareholders.
The letter states that the United Group began the proxy contest in July because
of the dismal performance of Birmingham Steel under Bob Garvey and current
management. The letter emphasizes that the proxy contest is not about the future
of Birmingham Steel's SBQ operations and that the United Group would sell the
SBQ operations if it is in the best interest of shareholders.
The full text of the letter follows:
THE UNITED COMPANY SHAREHOLDER GROUP
1005 GLENWAY AVENUE
BRISTOL, VIRGINIA 24201
November 24, 1999
Dear Fellow Shareholder:
We are delighted to inform you that Proxy Monitor, a leading provider of
proxy research and vote recommendations, has recommended that shareholders of
Birmingham Steel Corporation ("BIR") vote their shares in the pending proxy
fight in favor of the slate of directors nominated by the United Company
Shareholder Group (the "United Group"). Proxy Monitor's research encompasses
over fifteen thousand companies in the United States and abroad.
Proxy Monitor stated that "Birmingham seems adrift under the leadership of
Mr. Garvey. . . . [W]e believe a change in command offers shareholders a greater
prospect for upside potential. Mr. Garvey has had ample time to turn the Company
around -- it now seems appropriate to give another seasoned industry veteran an
opportunity to do so." Proxy Monitor recommends that shareholders vote in favor
of the United Group's consent action to "allow United to take control prior to
the date of the annual meeting."
The Board of Directors of BIR has sent you a letter promoting the issuance
by Institutional Shareholder Services ("ISS") of a report recommending that BIR
shareholders re-elect the current Board of Directors. ISS based their decision
on the future of the SBQ assets. Like current management, ISS mistakenly
believes that it is our intent to retain the money losing SBQ business of BIR at
all costs indefinitely. THIS PROXY FIGHT IS NOT ABOUT THE FUTURE OF THE SBQ
DIVISION. WE WILL SELL THE SBQ BUSINESS IF IT IS IN THE BEST INTEREST OF THE
SHAREHOLDERS. THIS PROXY FIGHT IS ABOUT LEADERSHIP AND MANAGEMENT SKILLS. Mr.
Garvey has been running BIR for 3 1/2 years with terrible results and continues
to blame all of BIR's troubles on prior management. As Proxy Monitor stated,
"Mr. Garvey has had ample time to turn the Company around." We agree. It is time
for a change.
Mr. Garvey continues to blame the financial problems of BIR and the SBQ
operations on prior management. The fact is that the SBQ operations were
profitable when they were acquired in 1993 and contributed substantial profits
to BIR until after Mr. Garvey became CEO of BIR.
BIR entered the SBQ business in November 1993 with the acquisition of
American Steel & Wire ("AS&W"). With the acquisition of AS&W, BIR obtained the
Cleveland facility. At the time of the acquisition, AS&W was the largest
producer of high quality rod and wire products in North America, had the highest
quality product rating in America, and had a recognized quality assurance
program and an outstanding sales and marketing force. The acquisition of AS&W
was immediately accretive to BIR's earnings, producing profits in the third and
fourth quarters of fiscal year 1994, $13.7 million in fiscal year 1995, and
profits in the first three quarters of fiscal year 1996.
Less than nine months after Mr. Garvey's arrival, the founders of AS&W, who
held executive positions with BIR, resigned and the quality, sales and marketing
forces were decimated by losses of other key personnel. In the fourth quarter of
1996, under Mr. Garvey's leadership, the SBQ business reported its first
operating loss and has lost money ever since.
MR. GARVEY BEGAN HIS TENURE WITH A PROFITABLE SBQ BUSINESS POISED TO BECOME
A SIGNIFICANT LEADER IN THE SBQ MARKET. The SBQ operations needed a dynamic
leader and listener. Mr. Garvey failed that test.
Mr. Garvey has turned the SBQ operations into a debacle.
- 14 Consecutive Quarters of Losses, including $21 million in the first
quarter of 2000.
- Twenty-five months of start-up costs at the Memphis facility.
- Failure to complete the caster upgrade of run out tables and stainless
piping included in the original scope of work at the Memphis facility.
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- Significant turnover of personnel at the Memphis facility.
The simple truth is, like numerous other problems at BIR, the problems with
the SBQ business are a result of Mr. Garvey's mismanagement. Other examples
include:
- $15 million loss from a total write-off of BIR's investment in Laclede
Steel Company; written-off less than a year after BIR's initial
investment.
- $30 million loss from loans and capital invested in Pacific Coast
Recycling; written-off less than three years after BIR's initial
investment.
We urge you not to be confused by current management's attempt to paint
this proxy contest as a battle over the future of the SBQ operations. We began
this proxy contest in July because of the continuing poor performance of BIR
under Mr. Garvey. THE ISSUE OF THIS PROXY CONTEST IS ABOUT MANAGEMENT AND
LEADERSHIP, NOT THE SBQ OPERATIONS. WE WILL SELL THE SBQ OPERATIONS IF THAT IS
IN THE BEST INTEREST OF SHAREHOLDERS. With or without the SBQ operations, it is
time for a change in current management given the dismal performance of BIR over
the past three years.
Your immediate attention is critical. WE URGE YOU TO VOTE FOR THE UNITED
GROUP'S DIRECTOR NOMINEES BY SIGNING, DATING AND MAILING THE ENCLOSED BLUE PROXY
CARD. WE STRONGLY URGE YOU TO DISCARD ANY WHITE PROXY CARD YOU RECEIVE FROM
BIRMINGHAM STEEL. If you have any questions or need assistance in voting your
shares, please call our proxy solicitor ChaseMellon at 800-636-8927.
Sincerely yours,
The United Company Shareholder Group
