<PAGE>
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
[ ] Confidential, for Use of the Commission Only (as permitted by
Rule 14a-6(e)(2))
[X] Definitive Proxy Statement
[ ] Definitive Additional Materials
[ ] Soliciting Material Pursuant to Sec. 240.14a-11(c) or Sec. 240.14a-12
Huntco Inc.
-------------
(Name of Registrant as Specified In Its Charter)
-------------------------------------------------
(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:
____________________________________________________________________
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 (Set forth the amount on which
the filing fee is calculated and state how it was determined):
____________________________________________________________________
4) Proposed maximum aggregate value of transaction:
____________________________________________________________________
5) Total fee paid:_____________________________________________________
[ ] 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:_________________________________________________________
<PAGE>
HUNTCO INC.
NOTICE OF
ANNUAL MEETING OF SHAREHOLDERS
TO BE HELD MAY 7, 1998
To the Shareholders:
The Annual Meeting of Shareholders of Huntco Inc. (the "Company"), a Missouri
corporation, will be held at Forest Hills Country Club, located at 36 Forest
Club Drive, Chesterfield, Missouri 63005, on Thursday, May 7, 1998, at 10:00
a.m., local time, for the following purposes:
1. To elect two directors; and
2. To transact such other business as may properly come before the meeting
and all adjournments thereof.
The Board of Directors has fixed the close of business on March 16, 1998 as
the record date for the determination of the shareholders entitled to notice
of, and to vote at, the Annual Meeting and all adjournments thereof.
By order of the Board of Directors
/s/ Anthony J. Verkruyse
ANTHONY J. VERKRUYSE
Vice President, Secretary & Treasurer
April 9, 1998
Even if you expect to attend the meeting in person, please mark, date and sign
the enclosed proxy and return it in the enclosed return envelope, which does
not require postage if mailed in the United States. Shareholders who attend
the meeting may revoke their proxies and vote in person if they desire.
HUNTCO INC.
PROXY STATEMENT
ANNUAL MEETING OF SHAREHOLDERS
On October 23, 1997, the Company's Board of Directors (the "Board") decided
that it would be in the Company's best interests to change its fiscal year end
from April 30 to December 31 beginning with the year ended December 31, 1997.
This decision resulted in a transition year comprised of eight months. The
term "Transition 1997" used in this Proxy Statement refers to the period
commencing May 1, 1997 through December 31, 1997. The term "Fiscal 1997"
refers to the period from May 1, 1996 through April 30, 1997. In connection
with changing the fiscal year end to December 31, the Board also amended the
Company's Bylaws to change the date of the Annual Meeting of Shareholders from
the second Thursday in September of each year to the first Thursday in May of
each year.
The enclosed proxy is solicited on behalf of the Board of Directors of Huntco
Inc. (the "Company") for use at the Annual Meeting of its shareholders (the
"Annual Meeting") to be held May 7, 1998 at 10:00 a.m. local time at Forest
Hills Country Club, located at 36 Forest Club Drive, Chesterfield, Missouri
63005. If the proxy is executed and returned to the Company, it nevertheless
may be revoked at any time before it is exercised either by written notice to
the Secretary of the Company or by attending the meeting and voting in person.
If no contrary instructions are indicated on the proxy, the proxy will be
voted FOR the election of the two nominees named herein as directors. If
matters other than the election of directors properly come before the Annual
Meeting, the proxy will be voted by the persons named therein in a manner
which they consider to be in the best interests of the Company.
The Company's principal executive offices are located at 14323 South Outer
Forty, Suite 600 N., Town & Country, Missouri 63017. This Proxy Statement and
the accompanying form of proxy are first being sent to shareholders on or
about April 9, 1998.
VOTING, VOTING SECURITIES AND PRINCIPAL HOLDERS THEREOF
-------------------------------------------------------
GENERAL
Only the holders of record of the Company's Class A Common Stock, $.01 par
value per share (the "Class A Shares") and of the Company's Class B Common
Stock, par value $.01 per share (the "Class B Shares") (collectively the
"Common Stock"), as of the close of business on March 16, 1998, will be
entitled to notice of, and to vote, either in person or by proxy, at the
Annual Meeting and all adjournments thereof. At the close of business on
March 16, 1998, 5,292,000 and 3,650,000 Class A Shares and Class B Shares,
respectively, were issued and outstanding. Each Class A Share is entitled to
one vote per share, and each Class B Share is entitled to ten votes per share,
on all matters to be submitted to the vote of the shareholders. Therefore,
the holders of Class A Shares and the Class B Shares are entitled to 5,292,000
and 36,500,000 votes, respectively.
The Class A Shares and the Class B Shares will vote as a single class with
respect to the election of directors. A majority of the aggregate of the
outstanding Class A Shares and the Class B Shares which are present in person
or represented by proxy and entitled to vote will constitute a quorum for the
transaction of business at the Annual Meeting. Shares represented by proxies
or ballots which are marked to "withhold authority" with respect to the
election of any one or more nominees for election as directors will be counted
for purposes of determining the presence or absence of a quorum for the
transaction of business at the Annual Meeting. Because the form of proxy
states how shares will be voted in the absence of instructions by the
shareholder, executed proxies bearing no instructions will be counted as
present for quorum purposes.
Under the law of Missouri, the state in which the Company is incorporated, the
affirmative vote of a majority of the aggregate number of votes represented by
the Class A Shares and the Class B Shares which are present in person or
represented by proxy at a meeting at which a quorum is present is required to
elect directors. Because a director must receive a majority of the votes cast
to be elected, even if such director otherwise received a plurality, proxies
or ballots marked to "withhold authority" in the election of directors have
the same effect as a vote against such nominee or nominees.
As a practical matter, the act of withholding a vote for one or more of the
Board's nominees, or the act of writing in the name of one or more other
candidates for election to the Board, will have no effect in the election of
directors. Huntco Acquisitions Holding, Inc. ("Acquisitions") and Huntco
Farms, Inc. ("Farms"), both of which are owned and controlled by the Company's
Chairman of the Board and Chief Executive Officer and which collectively
control 87.4% of the total Company vote by virtue of their ownership of all of
the Company's issued and outstanding Class B Shares, have indicated their
intent to vote for the Board of Directors' slate of nominees.
HOLDINGS OF MANAGEMENT AND PRINCIPAL SHAREHOLDERS
The table below indicates certain information as of March 16, 1998 regarding
the beneficial ownership of the Class A Shares and the Class B Shares by (i)
each director of the Company, including the nominees for election as
directors, (ii) each executive officer named in the Summary Compensation
Table, including the Company's Chairman of the Board and Chief Executive
Officer, (iii) companies owned and controlled by the Company's Chairman of the
Board and Chief Executive Officer, and (iv) all executive officers and
directors of the Company as a group.
<TABLE>
<CAPTION>
Number of Number of Percent of Total<F1>
Class A Class B ----------------- Percent of Total
Name Shares Shares Class A Class B Voting Power <F2>
- ---- ------ ------ ------- ------- ----------------
<S> <C> <C> <C> <C> <C>
B.D. Hunter<F3><F4> 44,500<F5> 3,650,000 <F6> 100.0% 87.4%
Huntco Acquisitions
Holding, Inc.<F3><F4> - 3,145,000 - 86.2% 75.3%
Huntco Farms, Inc.<F3><F4> - 505,000 - 13.8% 12.1%
Robert J. Marischen <F4> 203,808<F7> - 3.8% - <F6>
Terry J. Heinz 177,264<F8> - 3.3% - <F6>
Donald E. Brandt 4,410<F9> - <F6> - <F6>
James J. Gavin, Jr. 73,000<F10> - 1.4% - <F6>
Michael M. McCarthy 60,500<F11> - 1.1% - <F6>
All executive officers
and directors as a
group (6 persons)<F12> 526,482<F13> 3,650,000 9.4% 100.0% 87.9%
<FN>
<F1> The percent of ownership of Class A Shares and Class B Shares has been calculated in
accordance with the rules promulgated by the Securities and Exchange Commission (the "SEC"). The
numerator is comprised of the number of Class A Shares or Class B Shares, as appropriate, owned
by the individual or entity (including, with respect to the Class A Shares, the number of Class A
Shares issuable upon exercise of stock options granted under the Huntco Inc. 1993 Incentive Stock
Plan (the "1993 Plan") which are currently exercisable or which will become exercisable within
sixty days of March 16, 1998). The denominator is comprised of the number of shares represented
by all of the issued and outstanding shares of that class (including, with respect to the Class A
Shares, the number of Class A Shares issuable upon exercise of stock options granted under the
1993 Plan which are currently exercisable or will be exercisable within sixty days of March 16,
1998, awarded to such individual, but excluding the number of Class A Shares issuable upon
exercise of options granted to any other individual).
<F2> The percent of total voting power has also been calculated in accordance with the rules
promulgated by the SEC. The numerator is comprised of the number of votes appertaining to each
share of Common Stock owned by the individual or entity (plus the number of votes represented by
the Class A Shares issuable upon exercise of stock options granted under the 1993 Plan which are
currently exercisable or which will become exercisable within sixty days of March 16, 1998). The
denominator is comprised of the number of votes represented by all of the issued and outstanding
shares of Common Stock plus the number of votes represented by the Class A Shares issuable upon
exercise of stock options granted under the 1993 Plan which are currently exercisable or which
will become exercisable within sixty days of March 16, 1998) awarded to such individual, but
excluding the votes represented by the Class A Shares issuable upon exercise of options granted
to any other individual.
<F3> Mr. B. D. Hunter, the Company's Chairman of the Board and Chief Executive Officer, owns
all of the outstanding preferred stock of Huntco Enterprises, Inc. ("Huntco Enterprises"), which,
in conjunction with the shares of common stock over which he shares voting control as trustee of
various Trusts (as defined below), gives him substantially all of the voting control of that
entity. Huntco Enterprises is the ultimate parent company of Farms and Acquisitions.
Substantially all of the remaining shares of Farms and Acquisitions are owned by other persons or
trusts with whom Mr. Hunter is affiliated. Therefore, Mr. Hunter has or shares voting control
with respect to substantially all of the Class B Shares owned by Acquisitions and Farms. The
business addresses of Mr. Hunter, Farms and Acquisitions is 14323 S. Outer Forty, Suite 600 N.,
Town & Country, Missouri 63017.
<F4> Mr. B. D. Hunter and Mr. Robert J. Marischen are co-trustees of certain trusts created
by Mr. Hunter for the benefit of his children (the "Trusts"). Mr. Marischen and another
individual are co-trustees of certain trusts for the benefit of Mr. Hunter's grandchildren (the
"Grandchildren's Trusts"). The Trusts and the Grandchildren's Trusts own substantially all of
the common stock of Huntco Enterprises. Under the terms of the Trusts and the Grandchildren's
Trusts, the co-trustees must approve the voting and investment decisions with respect to shares
held by the Trusts and the Grandchildren's Trusts. Accordingly, Messrs. Hunter and Marischen
share voting and investment power over the 3,650,000 Class B Shares owned by Farms and
Acquisitions. Additionally, Mr. Hunter owns all of the outstanding preferred stock of Huntco
Enterprises which, in conjunction with the shares of common stock over which he shares voting
control as trustee of the Trusts, gives him substantially all of the voting control of that
entity. Mr. Marischen disclaims beneficial ownership of the Class B Shares owned by Farms and
Acquisitions, and these Class B Shares are not reflected in the table herein as being
beneficially owned by Mr. Marischen.
<F5> Sole voting and investment power over 7,500 Class A Shares which includes 2,500 Class A
Shares issuable upon exercise of stock options granted under the 1993 Plan. Does not include
67,500 Class A Shares underlying stock options granted under the 1993 Plan which are not
currently exercisable. Shared voting and investment power over 37,000 Class A Shares owned by a
corporation of which Mr. Hunter is the owner of 49% of the issued and outstanding voting capital
stock and of which Mr. Marischen is the owner of 51% of the issued and outstanding voting capital
stock. Due to the nature of the professional relationship between Messrs. Hunter and Marischen,
these 37,000 Class A Shares are deemed to be owned by each of them.
<F6> Less than 1%.
<F7> Sole voting and investment power over 162,644 Class A Shares which includes 152,500
Class A Shares issuable upon exercise of stock options granted to Mr. Marischen under the 1993
Plan. Does not include 67,500 Class A Shares underlying stock options granted under the 1993
Plan which are not currently exercisable. Shared voting and investment power over 37,411 Class A
Shares. Of these Class A Shares, 37,000 are the Class A Shares owned by the company which is
owned by Messrs. Marischen and Hunter described with more particularity in Note 5 above. The
remaining 411 Class A Shares over which Mr. Marischen is deemed to share voting and investment
power are held in Mr. Marischen's spouse's IRA. Mr. Marischen maintains 3,753 Class A Shares in
his account in the Huntco Inc. 401(k) Retirement Savings Plan (the "Retirement Savings Plan").
Mr. Marischen and two other Company employees are co-trustees of a trust (the "401(k) Trust")
established for the purpose of holding and investing assets of the Retirement Savings Plan. The
trustees make voting decisions with respect to the Class A Shares held by the 401(k) Trust.
Therefore, Mr. Marischen has shared voting power over a total of 28,914 Class A Shares owned by
the 401(k) Trust, although he disclaims beneficial ownership of the Class A Shares owned by that
trust except for the 3,753 Class A Shares allocated to his account in the Retirement Savings Plan
noted above.
<F8> Sole voting and investment power over 155,690 Class A Shares which includes 152,500
Class A Shares issuable upon exercise of options granted to Mr. Heinz under the 1993 Plan. No
voting power over 1,574 Class A Shares allocated to Mr. Heinz's account in the Retirement Savings
Plan. Does not include 67,500 Class A Shares underlying stock options granted under the 1993
Plan which are not currently exercisable. Shared voting and investment power over 20,000 Class A
Shares held in a general partnership of which Mr. Heinz has a one-third interest.
<F9> Sole voting and investment power over 4,410 Class A Shares which includes 2,000 Class A
Shares issuable upon exercise of stock options granted to Mr. Brandt under the 1993 Plan. Does
not include 6,000 Class A Shares underlying stock options granted under the 1993 Plan which are
not currently exercisable.
<F10> Sole voting and investment power over 73,000 Class A Shares which includes 2,000 Class A
Shares issuable upon exercise of stock options granted to Mr. Gavin under the 1993 Plan.
Includes 10,000 Class A Shares held by a charitable foundation of which Mr. Gavin is President,
but with respect to which Class A Shares Mr. Gavin disclaims beneficial ownership. Does not
include 6,000 Class A Shares underlying stock options granted under the 1993 Plan which are not
currently exercisable.
<F11> Sole voting and investment power over 9,000 Class A Shares which includes 2,000 Class A
Shares issuable upon exercise of stock options granted to Mr. McCarthy under the 1993 Plan. Does
not include 6,000 Class A Shares underlying stock options granted under the 1993 Plan which are
not currently exercisable. Mr. McCarthy disclaims beneficial ownership of 51,500 Class A Shares
owned by companies with which he is affiliated.
<F12> Messrs. Hunter and Marischen have voting and investment control over all of the Class B
Shares owned by Acquisitions and Farms.
<F13> Includes 313,500 Class A Shares issuable upon exercise of options granted to directors
and executive officers under the 1993 Plan.
</TABLE>
The following table sets forth information as of March 16, 1998 regarding all
persons known to be the beneficial owners of more than five percent of the
Company's Class A Shares who are not connected with the Company otherwise than
through ownership of the Class A Shares.
<TABLE>
<CAPTION>
Percent of
Number of Class A Shares
Name and Address Class A Shares Outstanding
---------------- -------------- -----------
<S> <C> <C>
The Crabbe Huson Group, Inc.
121 SW Morrison, Suite 1400
Portland, Oregon 97204 2,308,800<F1> 43.6%
The Crabbe Huson Special Fund, Inc.
121 SW Morrison, Suite 1400
Portland, Oregon 97204 291,300<F2> 5.5%
Dimensional Fund Advisors, Inc.
1299 Ocean Avenue, 11th Floor
Santa Monica, California 90401 366,100<F3> 6.9%
<FN>
<F1> The information in this footnote is provided pursuant to Amendment No. 5 to Schedule 13G
dated January 9, 1998 and filed with the SEC by The Crabbe Huson Group, Inc., which reports that
it is an investment advisor registered under the Investment Advisors Act. The Crabbe Huson
Group, Inc. reports shared voting and investment power over the Class A Shares deemed
beneficially owned by it.
<F2> The information in this footnote is provided pursuant to Schedule 13G dated January 9,
1998 and filed with the SEC by the Crabbe Huson Special Fund Inc., which reports that it is an
Investment Company registered under the Investment Company Act. The Crabbe Huson Special Fund,
Inc. reports shared voting and investment power over the Class A Shares deemed beneficially owned
by it.
<F3> The information set forth in the table opposite the reference to Dimensional Fund
Advisors, Inc. and in the next two sentences was prepared by such reporting person and furnished
to the Company on February 6, 1998. Dimensional Fund Advisors Inc. ("Dimensional"), a registered
investment advisor, is deemed to have beneficial ownership of 366,100 shares of Huntco Inc. Class
A common stock as of December 31, 1997, all of which shares are held in portfolios of DFA
Investment Dimensions Group, Inc., a registered open-end investment company, or in series of the
DFA Investment Trust Company, a Delaware business trust, or the DFA Group Trust and DFA
Participation Group Trust, investment vehicles for qualified employee benefit plans, all of which
Dimensional Fund Advisors Inc. serves as investment manager. Dimensional disclaims beneficial
ownership of all such shares.
</TABLE>
PROPOSAL 1: ELECTION OF DIRECTORS
----------------------------------
NOMINEES FOR DIRECTORS
The Company's Restated Articles of Incorporation and the Bylaws as amended
provide for a classified Board of Directors, with the Board divided into three
classes whose terms expire at different times. The Company presently has six
directors. Two members are to be elected to the Board of Directors at the
1998 Annual Meeting, each to serve for a term of three years. Both of the
nominees comprising the Board of Directors' slate of nominees at the Annual
Meeting, Messrs. James J. Gavin, Jr. and Terry J. Heinz, are currently
directors of the Company.
The persons named in the enclosed form of proxy intend to vote such proxy for
the election of Messrs. Gavin and Heinz as directors of the Company, unless
the shareholder indicates on the form of proxy that the vote should be
withheld or contrary directions are indicated. If the proxy card is signed
and returned without any direction given, shares will be voted for the
election of Messrs. Gavin and Heinz. The Board of Directors has no reason to
doubt the availability of either of the nominees and both have indicated their
willingness to serve if so elected. If either or both the nominees shall
decline or are unable to serve, it is intended that, in the discretion of the
Board of Directors, either the size of the Board will be reduced or the
proxies will vote for a substitute nominee or nominees designated by the Board
of Directors.
<TABLE>
<CAPTION>
INFORMATION AS OF MARCH 1, 1998 REGARDING THE NOMINEES FOR DIRECTORS
TO BE ELECTED IN 1998 FOR TERMS ENDING IN 2001
----------------------------------------------
Present Term
Name Age Expires Business Experience
---- --- ------- ------------------------------------------
<S> <C> <C> <C>
James J. Gavin, Jr.<F1><F2><F3> 75 1998 Director of the Company since May 1993.
Retired; Vice Chairman and Director of
Borg-Warner Corporation, a publicly-held,
diversified manufacturing company, from
1985 until his retirement in 1987; Senior
Vice President of Finance of Borg-Warner
prior to 1985. Director of Service
Corporation International.
Terry J. Heinz 46 1998 President, Chief Operating Officer and
Director of the Company since May 1993.
<PAGE>
<CAPTION>
INFORMATION AS OF MARCH 1, 1998 REGARDING THE DIRECTORS WHO ARE NOT NOMINEES
FOR ELECTION AND WHOSE TERMS CONTINUE BEYOND 1998
-------------------------------------------------
Present Term
Name Age Expires Business Experience
---- --- ------- ------------------------------------------
<S> <C> <C> <C>
B.D. Hunter<F3> 68 1999 Chairman of the Board and Chief Executive
Officer of the Company since May 1993.
Chairman of the Board of Huntco Enterprises
and of Acquisitions and Farms since 1986.
Director of Service Corporation
International, Cash America International,
Inc., Celebrity, Inc., and Mercantile Bank
National Association. Director of Mark
Twain Bancshares, Inc., until April 25,
1997.
Robert J. Marischen<F3> 45 1999 Vice Chairman of the Board and Chief
Financial Officer of the Company since May
1993. President, Chief Executive Officer
and Director of Huntco Enterprises,
Acquisitions and Farms since 1986. Member
of the Board of Governors of Cardinal
Glennon Children's Hospital.
Donald E. Brandt<F1><F2> 43 2000 Director of the Company since May 1993.
Senior Vice President-Finance of Ameren
Corporation, a public utility holding
company since January 1998. Senior Vice
President-Finance and Corporate Services of
Union Electric Company from July 1993 to
January 1998; Senior Vice President-Finance
and Accounting of Union Electric Company
for the five year period prior thereto.
Chairman of the Board of St. Louis Equity
Fund, Inc.; Trustee of Maryville
University; Director of The Arch Fund,
Inc., and President of the Board of
Governors of Cardinal Glennon Children's
Hospital.
Michael M. McCarthy<F1><F2> 59 2000 Director of the Company since May 1993.
Chairman of the Board and Chief Executive
Officer of McCarthy Building Companies, a
large, privately-owned commercial
construction company, since 1977; Chairman
and Chief Executive Officer of McCarthy
Brothers Company since 1976. Director of
Mark Twain Bancshares, Inc. until April 25,
1997. Director of Mercantile Bank National
Association.
<FN>
<F1> Member of Audit Committee
<F2> Member of Compensation Committee
<F3> Member of Executive Committee
</TABLE>
COMMITTEES AND MEETINGS OF THE BOARD OF DIRECTORS
The business of the Company is under the general management of the Board of
Directors (the "Board") as provided by the laws of Missouri, the state of
incorporation. The Board of Directors held three meetings during Transition
1997, and acted by unanimous written consent on one occasion. It is
anticipated that in future years the Board will meet at least quarterly.
Standing committees of the Board of Directors are the Executive Committee, the
Audit Committee, and the Compensation Committee. Between Board meetings,
Board responsibilities are delegated to the Executive Committee, comprised of
three Board members. The Executive Committee did not hold any formal meetings
during Transition 1997, but acted by unanimous written consent on two
occasions during that period.
The Audit Committee is comprised entirely of all of the Company's non-employee
directors. The function of the Audit Committee is to: (i) assist in the
selection of independent auditors; (ii) direct and supervise investigations
into matters relating to audit functions; (iii) review with independent
auditors the plans and results of the audit engagement; (iv) review the degree
of independence of the auditors; (v) consider the range of audit and non-audit
fees; and (vi) review the adequacy of the Company's system of internal
accounting controls. During Transition 1997, the Audit Committee held two
meetings.
The Compensation Committee, comprised entirely of the Company's three non-
employee directors, is responsible for reviewing and approving salaries,
annual incentive compensation for the executive officers and certain other
officers and employees of the Company and for administering and making awards
under the 1993 Plan. During Transition 1997, the Compensation Committee met
once.
The entire Board serves in the capacity of a nominating committee. The Board
will accept recommendations for nominations as directors from shareholders.
Shareholders wishing to propose such nominees for consideration should write
to Mr. B.D. Hunter, the Company's Chairman of the Board and Chief Executive
Officer, at the principal executive office of the Company.
During Transition 1997, other than Mr. Gavin who was absent from the December
4, 1997 meetings of the Board, the Audit Committee and the Compensation
Committee due to a previous commitment, all of the directors of the Company
attended 100% of the aggregate of the meetings of the Board and the committees
of the Board on which each served.
DIRECTORS' FEES
Messrs. Hunter, Marischen and Heinz, as employees of the Company, receive
neither retainers nor fees for attendance at Board or Board committee
meetings. Messrs. Brandt, Gavin and McCarthy each receives $1,000 for every
Board meeting they attend and $500 each for attendance at every meeting of
those committees of the Board on which they serve. In addition, Mr. Gavin is
paid $2,500 quarterly for serving on the Executive Committee. During
Transition 1997, each of Messrs. Brandt, Gavin and McCarthy were awarded non-
qualified stock options to acquire 3,000 Class A Shares at $13.50 per share,
which stock options shall expire five years from the date of grant and vest in
twenty-five percent increments on each anniversary of the date of grant, with
the first increment vesting December 4, 1998. In order to further compensate
the non-employee directors for their service to the Company, each of Messrs.
Brandt, Gavin and McCarthy received grants of non-qualified stock options to
acquire 3,000 Class A Shares at $13.50 per share, to replace the non-qualified
stock option grants made to the directors on April 4, 1996, which were priced
at $19.50 per share. These new options fully vest eighteen months from the
date of grant of December 4, 1997, and are set to expire on December 3, 2000.
RECOMMENDATION OF THE BOARD OF DIRECTORS
----------------------------------------
Acquisitions and Farms have expressed their intent to vote for Proposal 1, the
election of the Board of Directors' slate of nominees. The Board recommends
that the holders of the Class A Shares also vote "FOR" the Board's slate of
nominees.
REPORT OF THE COMPENSATION COMMITTEE
ON EXECUTIVE COMPENSATION
-------------------------
The Company's executive compensation program is administered by the
Compensation Committee (the "Committee") of the Board of Directors. The
Committee is a committee of outside directors, chaired by Mr. Michael M.
McCarthy. Other members of the Committee are Mr. Donald E. Brandt and Mr.
James J. Gavin, Jr. The Committee has the ultimate responsibility for
aligning the Company's compensation programs with its business strategy and
for assuring shareholders that pay delivery programs are effective,
responsible and competitive when compared to similarly situated organizations.
In that regard, the Committee is responsible for reviewing and approving
salaries and annual incentive compensation of the Company's executive
officers.
This report documents the basis upon which compensation decisions were made
for remuneration paid during calendar 1997 with respect to Mr. B.D. Hunter,
the Company's Chief Executive Officer, and to its only other executive
officers, Messrs. Marischen and Heinz. For a public company, the ranks of the
Company's executive officers is small. Accordingly and of necessity, these
three individuals work together closely and their respective importance to the
Company is virtually indistinguishable. Therefore, the compensation rationale
discussion that follows applies to each of them equally.
COMPENSATION PHILOSOPHY AND OBJECTIVES OF EXECUTIVE COMPENSATION PROGRAMS
It is the philosophy of the Company and the Committee that all compensation
programs provide a direct link between the performance of the Company and the
compensation of its executive officers. Consistent with this philosophy, all
of the executive officer compensation and benefit plans have been designed to
motivate, reward and retain the broad-based management talent required to
achieve corporate objectives and increase shareholder value. Toward this end,
the Company has designed and implemented a compensation program for its
executive officers which, in addition to base salary, focuses strongly on
annual incentive compensation with bonus awards tied closely to the attainment
of specified financial targets. The Committee also utilizes stock options as
an integral component of its executive compensation program because it
believes that this form of compensation provides the clearest link to enhanced
shareholder value.
The Company's executive compensation program is designed to provide the
Committee with the flexibility to emphasize one component of the total
compensation package over another as circumstances demand. Further, the
Committee has the flexibility to revise the annual bonus component during any
fiscal year to ensure that the incentive aspect of the Company's compensation
system is preserved.
BASE SALARIES
The Committee does not attempt to adhere to predefined quantitative or
qualitative measures in establishing base salaries, nor are certain criteria
deemed more important or given more weight than others. In setting base
salaries, the Committee subjectively evaluated the Company's financial and
operating results during the then current fiscal year and considered other
subjective criteria.
The Committee noted that operating results had not met management's
expectations, due in large part to external factors faced by the Company and
the intermediate steel processing industry in general--primarily the
volatility in raw material inventory pricing available from the Company's
suppliers. These inventory sourcing concerns were further complicated by the
administration and coordination of the expansion of the Company's market
territories through the opening of new plant facilities and the increased
competition as a result thereof.
In addition to objective financial measures, the Committee weighed other
criteria more subjective in nature. Subjective factors considered included an
evaluation of the executive officers' respective job responsibilities, the
Committee's perception of their importance to the Company and its operations,
and comparison to the compensation to be paid to the Company's non-executive
officers for the upcoming year. Based upon this evaluation, the Committee
elected in early April 1997 to maintain at then current levels the base
salaries of its executive officers.
ANNUAL INCENTIVE COMPENSATION
A significant portion of the executive officers' total compensation is at risk
through annual incentive opportunities that have historically been linked to
key financial objectives of the Company. The goal of this policy is to focus
attention on the attainment of financial objectives that the Committee
believes are significant determinants of the Company's share price over time.
Recognizing that because no increases in base salaries were being granted, the
opportunity to earn a bonus would be even more important to the executive
officers. If based on a measurement of corporate performance which was tied
to increasing shareholder value, the annual incentive compensation might even
serve to more closely align the interests of the executives with those of the
shareholders than in years past, in which increases in base salaries had been
awarded.
The Committee decided to utilize an earnings per share measurement to
determine the amount of the bonus, if any, which the executive officers would
have the opportunity to collect. In short, the total amount of the bonuses
which the executive officers could earn was based upon the Company's
attainment of various quarterly, year-to date and full year earnings per share
targets established by the Committee. The targets were intended to be
aggressive and challenging so that the Company would only be obligated to pay,
and the executive officers would only be entitled to receive, increasingly
higher bonus compensation if and to the extent the Company achieved
increasingly higher earnings per share throughout the course of the fiscal
year. No bonuses were earned by the Company's executive officers during 1997.
LONG TERM INCENTIVE COMPENSATION
The Huntco Inc. 1993 Incentive Stock Plan (the "1993 Plan"), provides for the
awards of non-qualified stock options to purchase Class A Shares, incentive
stock options to purchase Class A Shares, restricted Class A Shares and stock
appreciation rights. The Committee administers the 1993 Plan. All grants of
benefits under the 1993 Plan are at the complete discretion of the Committee,
which may award them based on whatever subjective or objective criteria it
deems appropriate. The Committee concluded at its meeting held in April 1997
that due to the non-qualified stock options awarded to the executive officers
during Fiscal 1997, that it would not be appropriate to award additional
options during Transition 1997. As Transition 1997 proceeded and the market
price of the Company's Class A Shares remained below the exercise price of a
large number of options which had been previously granted, the Committee
decided it was in the best interests of the Company to offer to reissue
certain of such non-qualified stock options previously issued to managerial
and supervisory employees, including the executive officers, concurrent with
the cancellation of such previously granted options. The rationale for those
options reissued is set forth below.
REISSUANCE OF STOCK OPTIONS
The stated purpose of the 1993 Plan is to secure for the Company and its
shareholders the benefits of the incentive inherent in common stock ownership
by the employees of the Company and its subsidiaries, who are largely
responsible for its future growth and financial success.
As of December 4, 1997, non-qualified stock options to purchase 848,250 shares
of Class A Common Stock had been awarded to forty-five key managerial
employees (including the three executive officers named in the Summary
Compensation Table) and to the Company's three non-employee directors. The
Committee concluded at its December 4, 1997 meeting that the outstanding
options to purchase Class A Shares held by the Company's key managers,
officers and non-employee directors, with exercise prices of $19.50 per share
or higher, were not providing the intended incentive to the Company's key
personnel. The Committee noted that the closing market price for the Class A
Shares on the immediately preceding day was $12.63 per share, and that the
exercise prices of all of the stock options subject to regrant had been below
the market value of such Class A Shares for over one full year.
In order to restore the incentive value to such options, the Committee decided
to offer to its active key managers and officers (including the named
executive officers and directors) the opportunity to surrender all of the non-
qualified stock options granted to each of them between May 5, 1994 and April
4, 1996 (which constituted stock options with exercise prices ranging from
$19.50 per share to $25.00 per share, and expiration dates ranging from May 5,
1999 to April 4, 2001)(the "Old Options"), for a like number of non-qualified
stock options with the reduced exercise price of $13.50 per share (the "New
Options"). Although the exercise prices of the Old Options were the closing
prices of the Class A Shares as reported on the New York Stock Exchange (or on
the NASDAQ National Market System with respect to the Old Options granted when
the Class A Shares were traded on the over-the-counter market) on the date of
the initial grant, the Committee decided to set the exercise price for the New
Options at an exercise price above the closing price on the New York Stock
Exchange on the day immediately preceding the date of grant.
The Committee believed that in consideration for providing the opportunity to
receive lower priced options, it was fair and in the best interests of the
Company and its shareholders that the exercise price of the New Options be
higher than the current market price of the Class A Shares. This would build
an incentive into the New Options themselves, because the New Options would be
"underwater" on the date of grant, although not to the same extent the Old
Options were. The Committee believed that the $13.50 per share exercise price
was fair in relation to the other holders of the Company's Class A Shares.
Further, the Committee decided that the New Options should not be exercisable
for eighteen months from the date of grant, even if the Old Options they were
to replace were then currently exercisable. Finally, and to increase the
incentive value of the New Options, the Committee decided that the New Options
should have an exercise period of only thirty-six months, contrasted with the
exercise period of five years which had been the case with the Old Options.
The intent was to motivate the key employees to swiftly and efficiently take
the operational and business steps necessary to increase the stock price of
the Class A Shares.
All optionees holding Old Options which were eligible for surrender in
exchange for New Options, including the named executive officers, accepted the
offer to exchange Old Options for New Options. As a result, there are
currently outstanding recently repriced non-qualified stock options to
purchase 295,000 Class A Shares at an exercise price of $13.50 per share, none
of which are exercisable until June 4, 1999, and all of which New Options will
expire if not exercised by December 4, 2000. The named executive officers
have New Options to purchase 180,000 Class A Shares and the non-employee
directors have New Options to purchase 9,000 Class A Shares stemming from
these option reissuances. Existing non-qualified stock options to purchase
393,500 Class A Shares, which were granted as part of the Company's initial
public offering or within one month after its completion, remain outstanding
with an exercise price of $17.00 per share, with expiration dates of July 21,
1998 (for 87,500 of these options) and May 17, 2003.
COMPENSATION OF THE CHIEF EXECUTIVE OFFICER
The decision not to grant an increase in base salary to Mr. Hunter, the
Company's Chief Executive Officer, the determination of the earnings per share
targets which the Company would have to achieve for Mr. Hunter to receive a
bonus, the number of non-qualified stock options awarded to him under the 1993
Plan and the number of non-qualified stock options of his which were reissued,
were identical to the decisions, determinations, and awards made to the
Company's executive officers as a group, as discussed above. Accordingly, the
discussion of those components of the total compensation package set forth
above are equally applicable to Mr. Hunter as they are to the Company's other
executive officers.
Mr. Hunter's base salary is not based on any objective measurement or
standard. Rather, it is premised upon the Committee's subjective evaluation
of (i) the importance of Mr. Hunter's role as Chairman of the Board and Chief
Executive Officer and the realization that his compensation should be
reflective of his position as the Company's driving force, (ii) his years of
experience, leadership and general executive and managerial abilities, (iii)
his vision with respect to the continued growth and expansion of the Company,
and (iv) his commitment to increasing shareholder value. None of the factors
used to evaluate Mr. Hunter or to determine his base salary was given any more
weight than any other factor.
LIMITATIONS OF TAX DEDUCTIONS FOR EXECUTIVE COMPENSATION
The Internal Revenue Code, and the regulations promulgated thereunder, limit
the tax deduction the Company may recognize for compensation paid to its
executive officers whose compensation is listed in this Proxy Statement, to
$1.0 million per person, per year. This deduction limit does not apply to
compensation that complies with applicable provisions of such regulations.
Because the Committee did not expect the compensation to be paid to such
persons to exceed $1.0 million per person in 1997, the Committee did not take
any action prior to or during 1997 which would have been required to comply
with the aforementioned statute so that the deduction limit would not apply.
The Committee will continue to evaluate the other components of the Company's
executive compensation program and will take the necessary actions with
respect to such regulations if it is deemed appropriate to do so with respect
to compensation to be paid to executive officers in future years.
Mr. Donald E. Brandt Mr. James J. Gavin, Jr. Mr. Michael M. McCarthy
Being all the Members of the Compensation Committee
EXECUTIVE COMPENSATION
----------------------
The following tables provide information regarding compensation paid to, and
information about the amount and value of employee stock options held by
Messrs. B.D. Hunter, Robert J. Marischen and Terry J. Heinz, the only three
executive officers of the Company (the "Named Executive Officers" or "NEOs").
<TABLE>
SUMMARY COMPENSATION TABLE
<CAPTION>
Long Term
Compensation Awards
Annual Compensation -------------------
Name and --------------------- Securities Underlying All Other
Principal Position Year<F1> Salary($)<F2> Bonus($) Options/SARs(#)<F3> Compensation($)<F4>
- ------------------ ------- ----------- ------- ------------------- -----------------
<S> <C> <C> <C> <C> <C>
B.D. Hunter, 1997 $291,500 -- 60,000<F5> $3,200
Chairman and Chief FY97 $291,500 $58,300 10,000<F6> --
Executive Officer FY96 $275,000 $82,500 -- $1,500
Robert J. Marischen, 1997 $265,000 -- 60,000<F5> $3,200
Vice Chairman and FY97 $265,000 $53,000 10,000<F6> $3,000
Chief Financial Officer FY96 $250,000 $75,000 -- $1,500
Terry J. Heinz, 1997 $260,000 -- 60,000<F5> $3,200
President and Chief FY97 $260,000 $52,000 10,000<F6> $3,000
Operating Officer FY96 $245,000 $73,500 -- $1,500
<FN>
<F1> On October 23, 1997 the Company elected to convert from an April 30 fiscal year end to a
December 31 fiscal year end. The compensation reported for the NEO in the top row represents
remuneration paid during the twelve month period commencing January 1, 1997 and ending December
31, 1997. The compensation reported for the NEO in the second and third rows entitled "FY97" and
"FY96" represents remuneration paid to the NEO during the Company's two prior fiscal years
comprising the twelve month periods ending April 30, 1997 and 1996, respectively.
<F2> Amounts shown include cash compensation earned and received as well as compensation
earned but deferred at the election of the executive officer.
<F3> This column represents grants made under the 1993 Plan.
<F4> Includes matching contributions by the Company during calendar year 1997 to the accounts
of the following individuals under the Retirement Savings Plan, which is a defined contribution
plan, as follows: Mr. Hunter: $3,200; Mr. Marischen: $3,200; and Mr. Heinz: $3,200.
<F5> These options awarded on December 4, 1997 represent non-qualified stock options
exercisable at $13.50 per share, which were granted to replace a like number of non-qualified
stock options originally granted to the NEO exercisable at $21.50 per share, which were canceled
at the option of the NEO.
<F6> These options awarded on April 4, 1997 represent non-qualified stock options exercisable
at $12.50 per share, the closing market price of the Company's Class A shares on the New York
Stock Exchange on the date of grant.
</TABLE>
<TABLE>
OPTION/SAR GRANTS IN LAST FISCAL YEAR <F1>
<CAPTION>
Potential Realizable
Value at Assumed
Annual Rates of Stock
Price Appreciation
Individual Grants for Option Term
- --------------------------------------------------------------------------- -------------------
% of Total
Options/SARs
Number of Securities Granted to Exercise or
Underlying Options/ Employees in Base Price Expiration
Name SARs Granted(#)<F1> Fiscal Year ($/Sh) Date 5%($)<F2> 10%($)<F2>
---- -------------------- ------------ ----------- ---------- --------- ---------
<S> <C> <C> <C> <C> <C> <C>
B. D. Hunter 10,000<F4> 10.2%<F5> $12.50 04/03/2002 $34,535 $ 76,314
60,000<F6> 17.0%<F7> $13.50 12/03/2000 $54,051 $183,458
Robert J. Marischen 10,000<F4> 10.2%<F5> $12.50 04/03/2002 $34,535 $ 76,314
60,000<F6> 17.0%<F7> $13.50 12/03/2000 $54,051 $183,458
Terry J. Heinz 10,000<F4> 10.2%<F5> $12.50 04/03/2002 $34,535 $ 76,314
60,000<F6> 17.0%<F7> $13.50 12/03/2000 $54,051 $183,458
<FN>
<F1> This table reports non-qualified stock options granted to the NEOs during the twelve
month period ending December 31, 1997.
<F2> No SARs were granted in tandem with the options.
<F3> The dollar amounts under these columns are the result of calculations at the 5% and 10%
rates set by the SEC, and therefore are not intended to forecast possible future appreciation, if
any, of the stock price of the Company's Class A Shares. The Company did not use an alternative
formula for a grant date valuation, as the Company is not aware of any formula which will
determine with reasonable accuracy a present value based on future unknown or volatile factors.
<F4> These non-qualified stock options were awarded during that portion of calendar 1997 prior
to the commencement of the Transition Period. One-quarter of the options granted are exercisable
on the first, second, third and fourth anniversaries of the date of the grant.
<F5> Represents the percent which the number of stock options awarded during that portion of
calendar 1997 prior to the commencement of the Transition Period is to all stock options awarded
to eligible employees and directors during that period.
<F6> These non-qualified stock options were awarded during the Transition Period. They do not
become exercisable for eighteen months from the date of grant and expire thirty-six months from
the date of grant.
<F7> Represents the percent which the number of stock options awarded during that portion of
calendar 1997 subsequent to the commencement of the Transition Period is to all stock options
awarded to eligible employees and directors during that period.
</TABLE>
<TABLE>
AGGREGATED OPTION/SAR EXERCISES IN LAST FISCAL YEAR AND FY-END OPTION/SAR VALUES
<CAPTION>
Number of Securities Underlying Value of Unexercised In-the-Money
Unexercised Options/SARs at FY-End(#) Options/SARs at FY-End($)<F1>
------------------------------------- -----------------------------
Name Exercisable/Unexercisable Exercisable/Unexercisable
- ---- ------------------------- -------------------------
<S> <C> <C>
B. D. Hunter 2,500/67,500 $10,938/$235,313
Robert J. Marischen 152,500/67,500 $10,938/$235,313
Terry J. Heinz 152,500/67,500 $10,938/$235,313
<FN>
<F1> Represents the difference between (a) the closing price on the New York Stock Exchange
on December 31, 1997, the Transition Period year end, of the Class A Shares and (b) the exercise
price of non-qualified stock options awarded to the Named Executive Officer under the 1993 Plan,
which difference is multiplied by the number of options owned by the Named Executive Officer.
</TABLE>
The following table sets forth certain information concerning the reissuance
of non-qualified stock options (effectively considered herein as a
"repricing") on December 4, 1997, granted to the Company's executive officers,
which has been the only reissuance of options held by the Company's Named
Executive Officers.
<TABLE>
TEN-YEAR OPTION/SAR REPRICINGS
<CAPTION>
Number of Length of
Securities Market Price Exercise Original Option
Underlying of Stock Price at Term Remaining
Options/SARs at Time of Time of New at Date of
Repriced or Repricing or Repricing or Exercise Repricing or
Name Date Amended(#) Amendment($) Amendment($) Price($) Amendment
---- ---- --------- ----------- ----------- ------- ---------
<S> <C> <C> <C> <C> <C> <C>
B.D. Hunter 12/04/97 60,000 $12.44 $21.50 $13.50<F1> 2 yrs., 3mos.
Robert J. Marischen 12/04/97 60,000 $12.44 $21.50 $13.50<F1> 2 yrs., 3mos.
Terry J. Heinz 12/04/97 60,000 $12.44 $21.50 $13.50<F1> 2 yrs., 3mos.
<FN>
<F1> The exercise price of the replacement non-qualified stock options is higher than the
market price of the Class A Shares. The replacement non-qualified stock options do not become
exercisable until June 4, 1999, and they expire December 3, 2000, so that the terms of the
replacement non-qualified stock options are shorter than the terms of the non-qualified stock
options being replaced.
</TABLE>
CERTAIN CONTRACTS
Both Messrs. Marischen and Heinz are parties to employment agreements with the
Company (the "Employment Agreements"). Except for the base salaries to be
paid to each thereunder (Mr. Marischen being contractually entitled to receive
a base salary of not less than $278,250 in the fiscal year ended December 31,
1998 ("Fiscal 1998") and Mr. Heinz being contractually entitled to receive a
base salary of not less than $273,000 in Fiscal 1998), the Employment
Agreements are identical. Both Employment Agreements have automatic one-year
renewals effective each April 30 (the "Renewal Term"), unless notice is given
by either party thereto that such Employment Agreement is not to be renewed or
unless the Employment Agreement has been terminated by the respective parties
thereto or upon the occurrence of certain events specified in the Employment
Agreements.
Both Messrs. Marischen and Heinz are entitled to severance payments under the
Employment Agreements upon termination of their employment. If the Company
notifies either employee that the Employment Agreements will not be renewed at
the expiration of any then current Renewal Term, the employee would be
entitled to annual compensation payments for one year from the date of
termination. If the employee is terminated due to incapacity, in addition to
those benefits that are provided by retirement and benefit programs
specifically adopted and approved by the Company for the employee that are
earned and vested at the date of termination, the employee shall be entitled
to receive his base salary compensation for the six months following such
termination. If the Company terminates the employee "without cause" (as that
term is provided in the Employment Agreements) prior to the expiration of any
then current Renewal Term, then in addition to those benefits that are
provided by retirement and benefit plans and programs specifically adopted and
approved by the Company for employees that are earned and vested at the date
of termination, the employee shall be entitled to his annual compensation
payments for one year from the date of termination. The Employment Agreements
also provide for severance payments of one year's base salary in the event
that the employee voluntarily terminates his employment within 12 months
following a "change of control" as defined in the Employment Agreements.
Although Mr. Hunter is not a party to a written employment contract, the
Compensation Committee has approved an annual base salary of $306,075 for Mr.
Hunter for Fiscal 1998.
On December 4, 1997, the Compensation Committee adopted a resolution providing
for the payment of bonuses to the Company's named executive officers during
Fiscal 1998 (the "1998 Bonus Arrangements"). Under the 1998 Bonus
Arrangements, the Company's executive officers are entitled to earn incentive
bonuses, to be paid quarterly, based on the Company's quarterly, year-to-date
and full year earnings per share. If earnings per share equals or exceeds
certain specified targets, they each will earn an additional specified
percentage of their respective annual base salaries for Fiscal 1998 (the
"Fiscal 1998 Base Salaries") with the bonus percentages increasing if
respectively higher earnings per share targets are met. The maximum annual
incentive bonuses that could be paid to the executive officers under the 1998
Bonus Arrangements equals 120% of their respective Fiscal 1998 Base Salaries.
The Company provides its executive officers with the use of an automobile and
a Company-paid country club membership, as well as supplemental health
insurance pursuant to which the Company reimburses its executive officers for
amounts they incur over and above the medical and dental coverage to which the
Company's other employees are entitled. Both Messrs. Marischen and Heinz also
receive Company-paid long-term disability and life insurance coverage under
which death benefits are to be paid to the beneficiaries designated by each.
The Company has agreed to reimburse Messrs. Marischen and Heinz for federal
and state income taxes payable by them on the first $400,000 of taxable income
recognized by each of them upon the exercise of options granted to them in May
1993 pursuant to the 1993 Plan. Neither Messrs. Marischen nor Heinz has
exercised any of such options; therefore, no tax reimbursement has yet been
made to them by the Company.
COMPENSATION COMMITTEE INTERLOCKS AND INSIDER PARTICIPATION
The members of the Compensation Committee are Messrs. Brandt, Gavin and
McCarthy, each of whom is a non-employee director. Messrs. Hunter and
Marischen were present at the meeting of the Compensation Committee at which
the remuneration for each of the Company's executive officers for 1997 was
determined.
STOCK PRICE PERFORMANCE GRAPH
The graph below compares cumulative total shareholder return to the cumulative
total return of the S&P Industrials index and to a peer group index. The
comparison of total return assumes that a fixed investment of $100 was
invested on June 29, 1993 (the effective date of the Company's initial public
offering) in the Company's Class A Shares and in each of the foregoing
indices, and further assumes the reinvestment of dividends. The information
on the graph covers the period from June 29, 1993 through the end of Fiscal
1997, which concluded on April 30, 1997, plus the eight month period from May
1, 1997 through December 31, 1997. Since there is no nationally recognized
industry index consisting of intermediate steel processors to be used as a
peer group index, the Company constructed its own peer group. This peer group
is comprised of two companies which represent the only other public companies
in the intermediate steel processing industry with a stock performance history
dating back to June 29, 1993, namely Steel Technologies Inc. and Worthington
Industries, Inc. Although certain other companies in the industry have
completed initial public offerings since June 29, 1993, these companies cannot
yet be used for comparative stock performance purposes. The returns of each
member of the peer group are weighted according to each member's stock market
capitalization as of the beginning of the period measured. The stock price
performance shown on the graph below is not necessarily indicative of future
price performance.
[GRAPH]
<TABLE>
<CAPTION>
April 30,
June 29, ---------------------------------------- December 31,
1993 1994 1995 1996 1997 1997
---- ---- ---- ---- ---- ----
<S> <C> <C> <C> <C> <C> <C>
Huntco Inc. 100.00 112.12 103.12 105.26 78.85 102.26
S&P Industrials 100.00 101.92 118.96 150.84 182.88 217.70
Peer Group 100.00 91.74 92.14 100.30 95.47 87.55
</TABLE>
CERTAIN TRANSACTIONS
The Company is a party to two lease agreements with Farms. Under one
agreement, the Company leases space for its executive offices located in Town
& Country, Missouri, in an office building owned by Farms. During calendar
1997, lease payments paid by the Company to Farms under this lease were
$22,800. The Company also leases a ranch facility in Colorado owned by Farms
which the Company uses primarily for the entertainment of customers. During
calendar 1997, the Company paid Farms $60,000 in lease payments relating to
its use of the property in Colorado. It anticipates making similar payments
under the aforementioned leases during the current fiscal year.
INDEPENDENT ACCOUNTANTS
The Company is presently utilizing the services of Price Waterhouse LLP,
independent accountants, who have been the Company's and its predecessors
independent accountants since 1986, and who will serve as the Company's
independent accountants for the fiscal year ending December 31, 1998.
Representatives of Price Waterhouse will be present at the Annual Meeting and
will have an opportunity to make a statement if they desire to do so and will
be available to respond to appropriate questions.
SHAREHOLDER PROPOSALS
Any shareholder proposals intended to be presented at the 1999 Annual Meeting
must be received by the Company at its principal executive offices no later
than December 10, 1998, in order to be considered for inclusion in the proxy
materials.
OTHER MATTERS
As stated elsewhere herein, the Board of Directors knows of no other matters
to be presented for consideration at the meeting by the Board of Directors or
by shareholders who have requested inclusion of proposals in the Proxy
Statement. If any other matter shall properly come before the meeting, the
persons named in the accompanying form of proxy intend to vote on such matters
in accordance with their judgment.
The expense of preparing, printing and mailing proxy materials to the holders
of the Company's Class A Shares will be borne by the Company. In addition,
proxies may be solicited personally or by telephone or telefax, by officers or
employees of the Company, none of whom will receive additional compensation
therefor. The Company will also reimburse brokerage houses and other nominees
for their reasonable expenses in forwarding proxy materials to beneficial
owners of the Class A Shares.
April 9, 1998
<PAGE>
APPENDIX
Page 14 of the printed proxy statement contains a Stock Price Performance
Graph. The information contained in the graph is depicted in the table that
immediately follows the graph.
<PAGE>
HUNTCO INC.
PROXY SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS
For Annual Meeting of Shareholders on May 7, 1998
The undersigned hereby appoints B. D. HUNTER, ROBERT J. MARISCHEN and
TERRY J. HEINZ, and each of them, with power of substitution, as proxies of
the undersigned, to attend the Annual Meeting of Shareholders of Huntco Inc.
(the "Company"), to be held at Forest Hills Country Club, located at 36 Forest
Club Drive, Chesterfield, Missouri 63005, on Thursday, May 7, 1998, at 10:00
a.m. local time, and all adjournments thereof, and to vote, as indicated
below, the shares of Class A Common Stock of the Company which the undersigned
is entitled to vote with all the powers the undersigned would possess if
present at the meeting.
1. Election of / / FOR all nominees listed below / / WITHHOLD AUTHORITY
Directors (except as marked to the to vote for all
contrary below) nominees listed below
James J. Gavin, Jr. and Terry J. Heinz
(INSTRUCTION: To withhold authority to vote for any individual nominee, write
that nominee's name on the space provided below.)
- ------------------------------------------------------------------------------
2. In their discretion, the proxies are authorized to vote upon any other
business which may properly come before the meeting and all adjournments
thereof.
This proxy, when properly executed, will be voted in the manner directed
herein by the undersigned shareholder(s). If no direction is made, this proxy
will be voted FOR the election of the nominees listed.
Please date and sign on the reverse side and mail promptly in the enclosed
envelope.
<PAGE>
THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS
The undersigned hereby revokes all proxies heretofore given by the
undersigned for said meeting. This proxy may be revoked prior to its
exercise.
Dated: ____________________________________
____________________________________
Signature
____________________________________
(Signature if held jointly)
Note: Please sign exactly as your
name or names appear hereon. When
signing as attorney, executor,
administrator, trustee or guardian,
please give full title as such. If
a corporation, please sign in full
corporate name by president or other
authorized officer. If a partnership,
please sign in partnership name by
authorized person.
PLEASE MARK, SIGN AND PROMPTLY RETURN THIS PROXY CARD
IN THE ENCLOSED ENVELOPE.
NO POSTAGE IS REQUIRED IF MAILED IN THE UNITED STATES.
