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SCHEDULE 14A
(Rule 14a-101)
SCHEDULE 14A INFORMATION
Proxy Statement Pursuant to Section 14(a) of the Securities Exchange Act of
1934
(Amendment No. )
Filed by the Registrant [X]
Filed by a Party other than the Registrant [_]
Check the appropriate box:
[_] Preliminary Proxy Statement
[_] Confidential, For Use of the Commission Only (as permitted by Rule 14a-
6(e)(2))
[_] Definitive Proxy Statement
[_] Definitive Additional Materials
[X] Soliciting Material Pursuant to Rule 14a-11(c) or Rule 14a-12
BIRMINGHAM STEEL CORPORATION
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(Name of Registrant as specified in its charter)
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(Name of person(s) filing proxy statement, if other than 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:
(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 transactions:
(5) Total fee paid.
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[_] Fee paid previously with preliminary materials.
[_] 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.:
(3) Filing Party:
(4) Date Filed:
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[BIRMINGHAM STEEL CORPORATION]
[LOGO OF BIRMINGHAM STEEL CORPORATION LETTERHEAD] October 15, 1999
Dear Stockholder:
You recently may have received proxy soliciting materials from a group of
dissident stockholders calling itself The United Group, and headed by James A.
Todd, Jr., formerly of Birmingham Steel, and John Correnti, formerly of Nucor
Corporation.
Even though Birmingham Steel's Annual Meeting of Stockholders is scheduled to
be held less than two months from now, on December 2, 1999, this dissident
group is attempting to solicit your vote to remove your entire Board of
Directors -- without cause -- in advance of the Annual Meeting through a
consent process. If this dissident group succeeds in removing your entire Board
of Directors without cause, it would replace the Board with its own hand-picked
nominees and take control of your Company.
YOUR BOARD OF DIRECTORS UNANIMOUSLY URGES YOU NOT TO LET THEM DO THIS! YOUR
BOARD UNANIMOUSLY OPPOSES THE UNITED GROUP'S SOLICITATION AND CAUTIONS YOU NOT
TO SIGN ANY BLUE PROXY CARD SENT TO YOU BY THE UNITED GROUP -- EVEN AS A
PROTEST VOTE AGAINST THEM.
There are a number of reasons why your Board believes that the effort of The
United Group to take control of your Board and replace senior management is
unwise and not in the best interests of the Company and its stockholders. Our
reasons are set forth in detail in our Proxy Statement for the Annual Meeting,
which will be sent to you shortly. In the meantime, we ask you to consider the
following:
. Strategic Restructuring Already in Place: The Company recently
announced a strategic restructuring which involves the divestiture of
the Company's Special Bar Quality ("SBQ") division and other
underperforming assets. This strategic restructuring -- which The
United Group opposes--will permit the Company to focus on its strong
and profitable core mini-mill operations.
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. Strong Core Operations: The Company's core mini-mill operations are
solidly profitable and have shown substantial improvement in recent
years under current management. As indicated by our recent announcement
of the Company's financial results for the first quarter of fiscal
2000, these core operations remain strong, despite some of the worst
steel industry conditions in many years, and have strong prospects.
. Today's Challenges Caused by Todd Management Team: The United Group has
failed to tell you that many of the challenges faced by the SBQ
division over the past three years resulted in large part from
questionable strategic and operational decisions made between 1991 and
January 1996 when Mr. Todd -- a leading member of the dissident group
-- was the Company's Chairman and Chief Executive Officer.
. Current Board and Management--Well-Qualified and Dedicated to
Stockholder Value: Birmingham Steel already has a highly qualified,
experienced and dedicated Board and management team that has put in
place, and is already aggressively implementing, the program we believe
is needed to build stockholder value. Changing your entire Board and
management at this time would be extremely disruptive and could
jeopardize the value that is being created by the Company's strategic
restructuring.
Stockholders will have ample time to consider all the issues and cast their
votes well in advance of the December 2 Annual Meeting. We shortly will be
sending you the Company's proxy materials and other important information.
These materials will further describe what we believe are serious flaws in The
United Group's "program." At this time, we see absolutely no reason for you to
grant the dissident group a proxy to act by written consent in advance of our
regularly scheduled Annual Meeting.
WE AGAIN URGE YOU NOT TO SIGN ANY BLUE PROXY CARD THAT THE UNITED GROUP MAY
BE SENDING YOU.
Thank you for your continued confidence and support.
Sincerely,
[Signature of Robert A. Garvey]
Robert A. Garvey
Chairman and Chief
Executive Officer
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PARTICIPANT INFORMATION
Birmingham Steel Corporation (the "Company") and certain other persons named
below may be deemed to be participants in the solicitation of proxies in
connection with the 1999 annual meeting of shareholders. The participants in
this solicitation may include the directors of the Company (William J.
Cabaniss, Jr., C. Stephen Clegg, Alfred C. DeCrane, Jr., E. Mandell de Windt,
Robert A. Garvey, E. Bradley Jones, Robert D. Kennedy, Richard de J. Osborne
and John H. Roberts) and the following executive officers, members of
management and employees of the Company: Robert A. Garvey (Chairman and Chief
Executive Officer), Brian F. Hill (Chief Operating Officer), Kevin E. Walsh
(Executive Vice President--Chief Financial Officer), William R. Lucas, Jr.
(Managing Director--Southern Region), Jack R. Wheeler (Managing Director--
Northern Region), Raymond J. Lepp (Managing Director--Western Region), J.
Daniel Garrett (Vice President--Finance & Control), Catherine W. Pecher (Vice
President--Administration & Corporate Secretary), Charles E. Richardson III
(General Counsel), Philip L. Oakes (Vice President--Human Resources), W. Joel
White (Vice President--Information Technology) and Robert G. Wilson (Vice
President--Business Development). As of the date of this communication, none of
the foregoing participants individually owned in excess of 1 percent of the
Company's common stock or in the aggregate in excess of 3 percent of the
Company's common stock.
The Company has retained Credit Suisse First Boston Corporation ("CSFB") and
Banc of America Securities LLC ("BAS") to act as its financial advisors, for
which CSFB and BAS will receive customary fees, as well as reimbursement of
reasonable out-of-pocket expenses. In addition, the Company has agreed to
indemnify CSFB, BAS and certain related persons against certain liabilities,
including liabilities under federal securities laws, arising out of their
engagement. Each of CSFB and BAS are investment banking firms that provide a
full range of financial services for institutional and individual clients.
Neither CSFB nor BAS admit that it or any of its directors, officers or
employees is a "participant," as defined in Schedule 14A promulgated under the
Securities Exchange Act of 1934, as amended, in the solicitation, or that
Schedule 14A requires the disclosure of certain information concerning CSFB or
BAS. In connection with their role as financial advisors to the Company, each
of CSFB and BAS, and the following investment banking employees of CSFB or BAS,
as the case may be, may communicate in person, by telephone or otherwise with a
limited number of institutions, brokers or other persons who are stockholders
of the Company: Peter R. Matt, William C. Sharpstone and Murari S. Rajan of
CSFB; and Gidon Y. Cohen, Shawn B. Welch and Sumner T. Farren of BAS. In the
normal course of their business, both CSFB and BAS regularly buy and sell
securities issued by the Company for their own account and for the accounts of
their respective customers, which transactions may result in CSFB, BAS or their
respective associates having a net "long" or net "short" position in the
Company's securities, or option contracts or other derivatives in or relating
to such securities. As of October 12, 1999, CSFB had a net short position of
100 shares of the Company's common stock and as of October 13, 1999, BAS had a
net long position of 264,022 shares of the Company's common stock.
