<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>
NOTICE OF
ANNUAL MEETING OF SHAREHOLDERS
TO BE HELD MAY 4, 2000
To the Shareholders:
The Annual Meeting of Shareholders of Huntco Inc., a Missouri corporation,
will be held at Forest Hills Country Club, located at 36 Forest Club Drive,
Chesterfield, Missouri 63005, on Thursday, May 4, 2000, 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 15, 2000 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
ANTHONY J. VERKRUYSE
Vice President, Chief Financial Officer,
Secretary & Treasurer
March 30, 2000
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.
<PAGE>
HUNTCO INC.
PROXY STATEMENT
ANNUAL MEETING OF SHAREHOLDERS
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 4, 2000 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 Annual 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 that 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 March 30, 2000.
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 15, 2000, 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
15, 2000, 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 vote as a single class in 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 outstanding Class A
Shares and the Class B Shares entitled to vote, which are present in person or
represented by proxy at a meeting at which a quorum is present, is required to
elect directors, unless a larger vote is required by the Company's bylaws.
The Company's bylaws require the affirmative vote of a majority of the
aggregate of the number of the votes represented by the outstanding Class A
Shares and Class B Shares entitled to vote, which are present in person or
represented by proxy at a meeting at which a quorum is present, to elect
directors. Therefore, a director must receive a sufficient number of votes to
satisfy the greater vote requirement of the Company's bylaws to be elected.
Because a director must receive a majority of the votes entitled to be 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. Mr. B. D. Hunter, the Company's Chairman of the Board and Chief
Executive Officer, controls 90.1% of the Company vote, and he has indicated
that he will vote or otherwise cause all of the shares he controls to be voted
in favor of the Board of Directors' slate of nominees. See "-- Holdings of
Management and Principal Shareholders."
Holdings of Management and Principal Shareholders
- -------------------------------------------------
The table below indicates certain information as of March 15, 2000 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 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>
Percent of Total<F1>
Number of Number of -------------------
Class A Class B Percent of Total
Percent of Total
Name Shares Shares Class A Class B
Voting Power<F2>
- ---- ------ ------ ------- -------
- ----------------
<S> <C> <C> <C> <C>
<C>
B.D. Hunter<F3><F4> 1,262,254<F5> 3,650,000 23.2% 100.0%
90.1%
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><F6> 291,308<F7> - 5.3% -
<F8>
Anthony J. Verkruyse<F6> 50,212<F9> - <F8> -
<F8>
Donald E. Brandt 9,535<F10> - <F8> -
<F8>
James J. Gavin, Jr. 78,125<F11> - 1.5% -
<F8>
Michael M. McCarthy 65,625<F12> - 1.2% -
<F8>
All executive officers
and directors as a
group (6 persons) 1,720,059<F13> 3,650,000 30.0% 100.0%
90.5%
<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 15, 2000). 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 15,
2000, 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 15, 2000). 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 15, 2000 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 Huntco Farms, Inc.
("Farms") and
Huntco Acquisitions Holdings, Inc. ("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. In connection with loans
made to
Acquisitions and Farms by certain commercial lenders, Acquisitions and Farms
have pledged
3,005,000 of the Class B Shares they own, along with other collateral, to those
banks as security
for the loans. If Acquisitions and Farms were to default under the loans, the
banks could compel
Acquisitions and Farms to convert the pledged Class B Shares into Class A Shares
and the banks
could thereafter foreclose on the shares and attempt to sell them. If this were
to occur, it is
possible that none of Mr. Hunter, Enterprises, the Trusts, the Grandchildren's
Trusts,
Acquisitions or Farms would possess voting control of the Company. 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 1,225,254 Class A Shares, which
includes 137,500
Class A Shares issuable upon exercise of stock options granted under the 1993
Plan. Does not
include 42,500 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. As provided
in Schedule 13G
dated February 11, 2000 and filed with the SEC by Firstar Corporation
("Firstar"), 1,087,754
Class A Shares are held by Firstar in Mr. Hunter's Individual Retirement
Account.
<F6> Mr. Marischen, Mr. Verkruyse and one other Company employee are co-
trustees of a trust
(the "401(k) Trust") established for the purpose of holding and investing assets
of the Huntco
Inc. 401(k) Retirement Savings Plan (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
and Mr. Verkruyse have shared voting power over a total of 96,141 Class A Shares
owned by the
401(k) Trust, although they disclaim beneficial ownership of the Class A Shares
owned by that
trust, except for the Class A Shares allocated to their own individual accounts
in the Retirement
Savings Plan as noted below.
<F7> Sole voting and investment power over 253,897 Class A Shares, which
includes 240,000
Class A Shares issuable upon exercise of stock options granted to Mr. Marischen
under the 1993
Plan. Does not include 40,000 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 that 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 Retirement Savings Plan.
<F8> Less than 1%.
<F9> Sole voting and investment power over 50,212 Class A Shares which
includes 42,500 Class A
Shares issuable upon exercise of stock options granted to Mr. Verkruyse under
the 1993 Plan.
Does not include 20,000 Class A Shares underlying stock options granted under
the 1993 Plan which
are not currently exercisable. Mr. Verkruyse maintains 2,137 Class A Shares in
his account in
the Retirement Savings Plan.
<F10> Sole voting and investment power over 9,535 Class A Shares which includes
7,125 Class A
Shares issuable upon exercise of stock options granted to Mr. Brandt under the
1993 Plan. Does
not include 2,875 Class A Shares underlying stock options granted under the 1993
Plan which are
not currently exercisable.
<F11> Sole voting and investment power over 78,125 Class A Shares which
includes 7,125 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 2,875 Class A Shares underlying stock options granted under the 1993
Plan which are not
currently exercisable.
<F12> Sole voting and investment power over 14,125 Class A Shares, which
includes 7,125 Class A
Shares issuable upon exercise of stock options granted to Mr. McCarthy under the
1993 Plan. Does
not include 2,875 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.
<F13> Includes 441,375 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 15, 2000 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>
Dimensional Fund Advisors Inc. 370,300<F1> 7.0%
1299 Ocean Avenue, 11th Floor
Santa Monica, California 90401
Shufro, Rose & Co., LLC 471,455<F2> 8.9%
745 Fifth Avenue
New York, New York 10151-2600
Stephen Watson 504,300<F3> 9.5%
237 Park Avenue, Suite 801
New York, New York 10017
<FN>
<F1> The information in this footnote is provided pursuant to Schedule 13G dated
February 4, 2000
and filed with the SEC by Dimensional Fund Advisors Inc. ("Dimensional"), which
reports that it
is an investment adviser registered under the Investment Advisers Act of 1940,
as amended.
Dimensional reports that it furnishes investment advice to four investment
companies registered
under the Investment Company Act of 1940, as amended, and serves as investment
manager to certain
other commingled group trusts and separate accounts. These investment
companies, trusts and
accounts are the "Funds." Dimensional further reports that in its role as
investment adviser or
manager, it possesses voting and/or investment power over the 370,300 Class A
Shares owned by the
Funds. Dimensional disclaims beneficial ownership of such Class A Shares.
<F2> The information in this footnote is provided pursuant to Schedule 13G
dated February 15,
2000 and filed with the SEC by Shufro, Rose & Co., LLC ("Shufro"), which reports
that it is an
investment adviser registered under the Investment Advisers Act of 1940, as
amended, and a broker
or dealer registered under the Securities and Exchange Act of 1934. Shufro
reports sole voting
power over all of the 471,455 Class A Shares and sole investment power over
107,000 Class A
Shares.
<F3> The information in this footnote is provided pursuant to Schedule 13G
dated March 8, 2000
and filed with the SEC by Stephen Watson, who reports that he is an individual
with sole voting
and investment power over all of the 504,300 Class A Shares owned by him.
</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 five
directors. Two members are to be elected to the Board of Directors at the
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. Donald E. Brandt and Michael M. McCarthy, 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. Brandt and McCarthy 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. Brandt and McCarthy. 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 15, 2000 Regarding the Board's Nominees for Election
as Directors
at the 2000 Annual Meeting for Terms to Expire at the Annual Meeting in
2003
-----------------------------------------------------------------------
- -----
Present Term
Name Age Expires Business
Experience
- ---- --- ------- ----------------------------
- -----------------
<S> <C> <C> <C>
Donald E. Brandt<F1><F2> 45 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
Mercantile Mutual Funds,
Inc., and President
of the Board of Governors of
Cardinal Glennon
Children's Hospital.
Michael M. McCarthy<F1><F2> 61 2000 Director of the Company
since May 1993.
Chairman of the Board of
McCarthy Holdings,
Inc. ("McCarthy Holdings"),
a large,
privately-owned commercial
construction
company, since 1977; Chief
Executive Officer
of McCarthy Holdings from
1977 to 1999;
Chairman and Chief Executive
Officer of
McCarthy Buildings
Companies, Inc. since
1976. Director of Mercantile
Bank National
Association.
<CAPTION>
Information as of March 15, 2000 Regarding the Directors Who are Not
Nominees
for Election and Whose Terms Continue Beyond 2000
-------------------------------------------------
James J. Gavin, Jr. 77 2001 Director of the Company since
May 1993.
<F1><F2><F3> Retired; Vice Chairman and
Director of Borg-
Warner Corporation ("Borg-
Warner"), a
publicly-held, diversified
manufacturing
company, from 1985 until his
retirement in
1987; Senior Vice President
of Finance of
Borg-Warner prior to 1985.
Retired as
Director of Service
Corporation International
in May 1998.
B.D. Hunter <F3> 70 2002 Chairman of the Board and
Chief Executive
Officer of the Company since
May 1993.
Chairman of the Board of
Huntco Enterprises
and of Acquisitions since
1986. Chairman of
the Board of Farms since
1990, of Midwest
Products, Inc. ("Midwest
Products") since
1989, and of Huntco Steel,
Inc. ("Huntco
Steel") since 1986.
Director of Service
Corporation International
for over five years
and Vice Chairman since
January 2000.
Director of Cash America
International, Inc.,
Celebrity, Inc., and
Mercantile Bank National
Association.
Robert J. Marischen<F3> 47 2002 President of the Company
since January, 1999;
Vice Chairman of the Board
of the Company
since May 1993. Chief
Financial Officer of
the Company from May 1993 to
October 1999.
President, Chief Executive
Officer and
Director of Huntco
Enterprises and
Acquisitions since 1986 and
of Farms since
1990. Director and President
of Huntco Steel.
Director and Vice Chairman
of Midwest
Products. Member of the
Board of Governors
of Cardinal Glennon
Children's Hospital.
<FN>
<F1> Member of Compensation Committee
<F2> Member of Audit 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 the
Company's incorporation. The Board held three meetings during the fiscal year
ended December 31, 1999 (" 1999") and acted by unanimous consent once during
1999. 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 1999, but acted by unanimous written consent on four 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 1999, the Audit Committee held one meeting.
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.
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 1999, the Compensation Committee met one time.
Directors' Fees
- ---------------
Neither Mr. Hunter nor Mr. Marischen, both of whom are employees and directors
of the Company, received or receive retainers or fees for attendance at Board
or Board committee meetings. Messrs. Brandt, Gavin and McCarthy received
during 1999 and the Company anticipates that they will continue to receive
during 2000, $1,000 each for attendance at 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, during 1999, Mr. Gavin was paid $2,500
quarterly for serving on the Executive Committee and the Company anticipates
that he will continue to receive this amount during 2000.
During 1999, Messrs. Brandt, Gavin and McCarthy each were awarded options to
purchase 2,500 Class A Shares of the Company under the 1993 Plan. The options
have an exercise price of $7.00 per share. The market price of the Class A
Shares on the date of grant was $4.0625. Of the options to purchase 2,500
Class A Shares awarded to each of the non-employee directors, one-half were
exercisable on the date of grant with the remaining options becoming
exercisable in equal increments on the first two anniversaries of the date of
grant.
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
Overview
- --------
The Compensation Committee (the "Committee") of the Board of Directors
administers the Company's executive compensation program. The Committee is
comprised entirely of non-employee directors and is chaired by Mr. Michael M.
McCarthy. Other members of the Committee are Messrs. Donald E. Brandt and
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.
The Committee relies on the advice of the Company's Chairman of the Board and
Chief Executive Officer, Mr. B. D. Hunter, and the Company's Vice Chairman and
President, Mr. Robert J. Marischen, in determining the remuneration packages
for executive officer level employees, including Messrs. Hunter and Marischen,
as well as other members of senior management.
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 the Company's executive officers and members of senior
management. 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 for 1999, the Committee subjectively evaluated the Company's
financial and operating results for the fiscal year ended December 31, 1998,
in light of the steel industry as a whole. It also considered the skills,
talents and abilities that would be required to implement the Company's plans
and strategies for 1999, as well as the recommendations of Mr. Hunter.
In recognition of Messrs. Hunter and Marischen's efforts during a particularly
difficult period and in a highly competitive industry, the Committee granted
each of them increases in their annual base salaries of $8,925 and $21,750,
respectively. These increases were also in recognition of the dedication and
leadership of these individuals, the managerial skills and experience that
would be required of both to implement the strategic plan, as well as
recognition of Mr. Marischen's appointment as President of the Company in
January 1999. These amounts represented increases of 2.9% and 7.8%,
respectively, over their respective base salaries for 1998.
Although Mr. Verkruyse has been an officer of the Company since May 1993, he
first became an executive officer on October 15, 1999, upon his promotion to
the position of Chief Financial Officer. Considering adjustments to Mr.
Verkruyse's base salary effective January 1, 1999, he did not receive an
additional base pay increase at the time of his promotion. The Committee
decided to review Mr. Verkruyse's base salary as part of its evaluation of the
remuneration package to be granted to the Company's executive officers for the
fiscal year ending December 31, 2000.
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. For incentive compensation to
fulfill its purpose of increasing shareholder value, targets must closely
align the interests of the executives with those of the shareholders. Stated
differently, 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.
Under the incentive compensation program in effect for 1999, Messrs. Hunter
and Marischen were eligible for a discretionary bonus of up to 20% of their
respective base salaries if positive net income was realized through the first
six months of 1999. The incentive compensation program for the second half
of 1999 was based on the attainment of specified targets for (a) return on
capital, as defined in the incentive compensation program, and (b) increases
in unit growth.
The incentive compensation program reflected the Committee's emphasis on
attaining a return to profitability, coupled with an emphasis on increasing
the return on capital employed and the amount of tons of steel processed by
the Company. No incentive compensation program payments were made to the
Company's executive officers during 1999.
As an officer of the Company, Mr. Verkruyse would have received an annual
incentive bonus based on return on capital and unit growth had the Company met
the targets. Upon the recommendation of Mr. Marischen, the Committee granted
Mr. Verkruyse a discretionary bonus of $10,000 in recognition of his efforts
during 1999, particularly in connection with the negotiation and closing of
the Company's new revolving credit facility. Upon the recommendation of Mr.
Marischen, certain other officers of the Company also received discretionary
bonuses for their extraordinary efforts throughout 1999, which totaled $18,750
in the aggregate.
Long Term Incentive Compensation
- --------------------------------
The Huntco Inc. 1993 Incentive Stock Plan, as Amended and Restated (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 to employees, officers and
directors. 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 recognized the difficult economic environment facing the U.S.
steel industry as a whole, and the Company in particular, in early 1999, and
that implementation of strategies to return the Company to profitability by
the Company's executive officers could take longer than a year. The Committee
further recognized that the short term annual incentive bonus program might
not serve as a sufficient motivating tool in light of these circumstances.
The Committee, therefore, concluded that an emphasis on long term incentive
compensation through the use of stock options was appropriate. Accordingly,
the Committee awarded non-qualified stock options to purchase 60,000, 50,000
and 25,000 shares of Class A common stock to Messrs. Hunter, Marischen and
Verkruyse, respectively. To demonstrate the Committee's intent that these
options further the goal of increasing shareholder value as quickly as
possible, the options were awarded with an exercise price of $7.00 per share.
This price was $2.9375 above the market price on the date of grant. These
options expire five years after the date of grant. Neither the decision to
award options nor the number of stock options awarded was based on the number
of stock options previously granted to these individuals.
Reissuance of Stock Options
- ---------------------------
Non-qualified stock options to purchase 150,000 shares at $17.00 per share
were awarded to Mr. Marischen in connection with the Company's initial public
offering (the "IPO Stock Options") in 1993. As part of its analysis of
Mr. Marischen's performance and his compensation package, the Committee
concluded that:
- - the IPO Stock Options awarded to Mr. Marischen were no longer serving the
intended motivational purpose given that the exercise price of these options
was so much higher than the current market price of the underlying Class A
Shares; and
- - the exercise price of the IPO Stock Options was so far below the market
price because of factors that were beyond Mr. Marischen's control, that taking
steps to restore the potential value to him was appropriate under the
circumstances.
Therefore, the Committee offered to Mr. Marischen the opportunity to surrender
all of his IPO Stock Options in exchange for a new award of non-qualified
stock options to purchase 110,000 Class A Shares at an exercise price of $7.00
per share. This offer was made in addition to the grant of 50,000 non-
qualified stock options to Mr. Marischen as referenced above. The exercise
price for all non-qualified stock options granted by the Committee during
1999, inclusive of the reissued options referenced herein, was $2.9375 more
than the market price on the date of grant. The reissued options expire five
years after the date of grant, similar to the other option grants made by the
Committee during 1999. The Committee also agreed to reimburse Mr. Marischen
for federal and state income taxes payable by him on the first $400,000 of
taxable income recognized upon the exercise of any of these reissued options,
similar to the arrangement in place with respect to the IPO Stock Options
surrendered.
The Committee believes that it has restored the incentive value of these
options, because the Company's Class A common stock price must exceed $7.00
per share by February 15, 2004 before they will have any value. Further, the
imposition of a five year term aligns the interests of the shareholders with
those of Mr. Marischen, inasmuch as he will be motivated to increase earnings
as much and as rapidly as possible so that the options will have value.
Severance Agreement with Former Executive Officer
- -------------------------------------------------
Pursuant to the January 4, 1999 resignation of Terry J. Heinz, the former
President and Chief Operating Officer of the Company, a Separation Agreement
and Release effective March 8, 1999 (the "Separation Agreement") was executed.
In exchange for waiving his right to the $273,000 severance obligation and
other benefits the Company otherwise owed him pursuant to his Employment
Agreement, the cancellation of all non-qualified stock options previously
granted to him, his resignation as a director and officer of the Company and
of Huntco Steel, and his granting the Company and all of its subsidiaries a
full release of any and all claims he may or might have had against them, the
Company agreed to pay Mr. Heinz $100,000 per year for the five-year period
commencing February 1, 1999 and terminating January 31, 2004, and to provide
him with the group health, medical, hospitalization and dental benefits
generally available to the full-time employees of the Company during this
period. Mr. Heinz also agreed to be bound by non-compete obligations with the
Company through January 31, 2000.
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 1999, the Committee did not take
any action prior to or during 1999 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 Anthony J. Verkruyse, the only
three executive officers of the Company whose salary and bonus exceeded
$100,000 during 1999 (the "Named Executive Officers" or "NEOs").
<TABLE>
Summary Compensation Table
- --------------------------
<CAPTION>
Long Term
Compensation Awards
---------------------
Name and Annual Compensation Securities Underlying
All Other
Principal Position Year Salary($)<F1> Bonus($) Options/SARs(#)<F2>
Compensation($)<F3>
- ------------------ ---- --------------------- -------------------- --
- ----------------
<S> <C> <C> <C> <C>
<C>
B.D. Hunter, 1999 $315,000 -- 60,000<F4>
$3,200
Chairman and Chief 1998 $306,075 -- --
$3,200
Executive Officer TP97<F5> $194,333 -- 60,000<F6>
$3,200
FY97<F5> $291,500 $58,300 10,000<F7>
- --
Robert J. Marischen, 1999 $300,000 -- 160,000<F8>
$3,200
Vice Chairman and 1998 $278,250 -- --
$3,200
President TP97<F5> $176,667 -- 60,000<F6>
$3,200
FY97<F5> $265,000 $53,000 10,000<F7>
$3,000
Anthony J. Verkruyse, 1999 $130,000 $10,000<F10> 25,000<F4>
$2,600
Chief Financial
Officer<F9>
<FN>
<F1> Amounts shown include cash compensation earned and received as well as
compensation earned
but deferred at the election of the executive officer.
<F2> This column represents grants made under the 1993 Plan.
<F3> Includes matching contributions by the Company during 1999 to the
accounts of the
following individuals under the Retirement Savings Plan, which is a defined
contribution plan:
Mr. Hunter: $3,200; Mr. Marischen: $3,200; and Mr. Verkruyse: $2,600.
<F4> These options awarded on February 15, 1999 represent non-qualified stock
options
exercisable at $7.00 per share, with 50% of the options exercisable at the grant
date and an
additional 25% become exercisable on the following two anniversary dates of the
grant date.
<F5> On October 23, 1997, the Company elected to convert from an April 30 to a
December 31
fiscal year end. The compensation reported for the NEO for TP97 represents the
eight-month
transition period ended December 31, 1997. The compensation reported for the
NEO for FY97
represents the full fiscal year ended April 30, 1997, the Company's former
fiscal year.
<F6> 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.
<F7> 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.
<F8> All of these options were awarded on February 15, 1999; 110,000 represent
non-qualified
stock options exercisable at $7.00 per share that, at the option of the NEO,
were granted to
replace the 150,000 IPO Stock Options originally granted to the NEO exercisable
at $17.00 per
share. The remaining 50,000 non-qualified stock options are exercisable at
$7.00, with 50% of
the options exercisable at the grant date and an additional 25% exercisable on
the following two
anniversary dates of the grant date.
<F9> Mr. Verkruyse was elected as the Chief Financial Officer of the Company
in October, 1999.
Prior to such election, he was not a NEO of the Company.
<F10> Bonus was accrued as of December 31, 1999, and was paid to Mr. Verkruyse
in February,
2000.
</TABLE>
<TABLE>
Option/SAR Grants in Last Fiscal Year
- ----------------------------------------------
<CAPTION>
Individual Grants
-----------------------------------------------------------
- ----------------
Number of % of Total Potential
Realizable Value
Securities Options/SARs at
Assumed Annual Rates
Underlying Granted to Exercise of Stock
Price Appreciation
Options/ Employees or base Expira- for
Option Term <F1>
SARs in Fiscal price tion ----------
- ----------------
Name Granted(#) Year<F2> ($/Sh) Date 5%($)
10%($)
- ---- ---------- -------- ------ ------ ----
- -----
<S> <C> <C> <C> <C> <C>
<C>
B.D. Hunter 60,000<F3><F4> 15.4% $7.00 02/15/2004 0
0
Robert J. Marischen 50,000<F3><F4> 12.8% $7.00 02/15/2004 0
0
110,000<F3><F5> 28.2% $7.00 02/15/2004 0
0
Anthony J. Verkruyse 25,000<F3><F4> 6.4% $7.00 02/15/2004 0
0
<FN>
<F1> No potential realizable value is listed because, based on the annual
stock price
appreciation rates set by the SEC for use in this table, the market price will
not exceed the
exercise price before the options expire in accordance with their terms. The 5%
and 10% rates
are not intended to forecast possible future appreciation, if any, of the stock
price of the
Company's Class A Shares. The Company did not use an alternative formula for a
grant date
valuation, as the Company is not aware of any formula that will determine with
reasonable
accuracy a present value based on future unknown or volatile factors.
<F2> Represents the percent which the number of stock options awarded during
1999 to the NEO
is to all stock options awarded to eligible employees and directors during
1999.
<F3> No SARs were granted in tandem with the options.
<F4> These non-qualified stock options were awarded on February 15, 1999.
One-half of the
options granted were exercisable on the date of grant and one-quarter of the
options granted
become exercisable on each of the first and second anniversaries of the date of
grant.
<F5> These non-qualified stock options were awarded and became immediately
exercisable on
February 15, 1999.
</TABLE>
<TABLE>
Aggregated Option/SAR Exercises in Last Fiscal Year and FY-End Option/SAR
Values
- -------
<CAPTION>
Number of Securities Underlying Value of
Unexercised In-the-Money
Unexercised Options/SARs at FY-End(#) Options/SARs
at FY-End($)
Name Exercisable/Unexercisable<F1>
Exercisable/Unexercisable
- ---- ---------------------------- ------------
- -------------
<S> <C> <C>
B.D. Hunter 95,000/35,000 0/0
Robert J. Marischen 200,000/30,000 0/0
Anthony J. Verkruyse 22,500/15,000 0/0
<FN>
<F1> Unexercised options reflect grants received over an extended period of
time.
</TABLE>
<TABLE>
Ten-Year Option/SAR Repricings
- -------------------------------------
<CAPTION>
Market
Length of
Number of Price of Exercise
Original
Securities Stock at Price at
Option Term
Underlying Time of Time of
Remaining at
Options/SARs Repricing Repricing New
Date of
Repriced or or Amend- or Amend- Exercise
Repricing or
Name Date Amended(#) ment($) ment($) 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, 3 mos
Chairman and Chief
Executive Officer
Robert J. Marischen, 12/04/97 60,000 $12.44 $21.50 $13.50<F1>
2 yrs, 3 mos
Vice Chairman and 02/15/99 110,000 $ 4.06 $17.00 $ 7.00<F2>
4 yrs, 3 mos
President
Terry J. Heinz<F3> 12/04/97 60,000 $12.44 $21.50 $13.50<F1>
2 yrs, 3 mos
<FN>
<F1> The exercise price of the reissued non-qualified stock options was higher
than the market
price of the Class A Shares. The reissued options became exercisable on June 4,
1999, and expire
December 3, 2000. The reissued options have a shorter term than the replaced
stock options, and
have an expiration date prior to the expiration of the replaced stock options.
<F2> The exercise price of the reissued non-qualified stock options was higher
than the market
price of the Class A Shares. The reissued stock options provide Mr. Marischen
the right to
purchase 40,000 less shares than the non-qualified stock options they replaced,
and became
exercisable on the date of grant of February 15, 1999. The reissued stock
options expire February
15, 2004, so that the term of the reissued stock options, while shorter than the
original term of
the stock options they replaced, have an expiration date after the expiration
date of the options
they replaced.
<F3> Mr. Heinz resigned from the Company effective January 4, 1999 and in
conjunction with such
resignation, all options granted to him by the Company, including the options
set forth in this
table, were forfeited.
</TABLE>
Severance and Employment Agreements
- -----------------------------------
Description of Severance Agreement:
Mr. Hunter has never entered into an employment contract with the Company.
However, effective January 1, 2000, Mr. Hunter executed a severance agreement
with the Company. If Mr. Hunter resigns his employment in conjunction with a
change of control of the Company, then the severance agreement provides that
Mr. Hunter will receive a payment equal to three times his base salary. The
severance agreement also provides that Mr. Hunter will receive medical and
dental benefits at the Company's expense for three years. In addition, the
Company is responsible for paying any tax payable by Mr. Hunter imposed by
Section 4999 of the Internal Revenue Code with respect to any excess parachute
payments in connection with such resignation.
The severance agreement also contains non-competition, non-interference and
non-solicitation provisions that are effective for 3 years following Mr.
Hunter's termination.
Description of Employment Agreements:
Messrs. Marischen and Verkruyse are parties to employment agreements with the
Company. Effective January 1, 2000, the Company adopted a new form of
employment agreement that was used in replacing prior agreements with Messrs.
Marishcen and Verkruyse, as well as with certain other non-executive officers
of the Company or one of its subsidiaries. The initial term of the
employment agreements is for one year with automatic renewals on January 1 of
each year, unless an agreement is terminated by the Company or by the
employee, or if the employee dies or is permanently disabled.
The employment agreements specify the officer's base salary and further
provide that the Board of Directors or any authorized committee of the Board
shall review overall compensation at least annually to determine its adequacy
and to determine any incentive or performance bonus to which the officers may
be entitled. For the year ending December 31, 2000, the employment agreements
executed with Messrs. Marischen and Verkruyse provide for base salaries of
$350,000 and $150,000, respectively. The employment agreements also provide
that the officers are entitled to participate in all medical, disability, life
and other insurance plans and all other employment benefits as are generally
available to other employees of the Company.
Messrs. Marischen and Verkruyse are entitled to certain severance payments
under their employment agreements, except in the event of their termination by
the Company for "cause" or upon their voluntary resignation not involving a
"change of control." Generally, if their employment is terminated without
cause, the Company will pay their annual base salaries for three years from
the date of termination in the case of Mr. Marischen and for two years in the
case of Mr. Verkruyse. Each would also be entitled to receive the bonus, if
any, which they may have earned or which may have accrued during the quarter
in which employment is terminated without cause but which had not yet been
paid.
The employment agreements also provide for severance payments if Messrs.
Marischen or Verkruyse resign from their employment with the Company, or its
successor, within twelve months following a "change of control" as that term
is defined in their employment agreements. Mr. Marischen is entitled to a
payment equal to three times his base salary, payable in a lump sum, if he
resigns under any circumstances in the event of a change of control. Subject
to certain restrictions, Mr. Verkruyse is entitled to a lump sum payment equal
to two times his base salary if he resigns pursuant to a change of control.
Messrs. Marischen or Verkruyse would also be entitled to payment of the bonus,
if any, which they may have earned or which may have accrued on their behalf
during the quarter in which their employment is terminated. In addition, Mr.
Marischen is entitled to remain on the Company's medical and dental insurance
for three years following such resignation, and Mr. Verkruyse is entitled to
remain on the Company's medical and dental insurance for two years following
such resignation. In addition, the Company is responsible for paying any tax
payable by its officers imposed by Section 4999 of the Internal Revenue Code
with respect to any excess parachute payments in connection with such
resignation.
The Employment Agreements contain non-competition, non-interference and non-
solicitation provisions that are effective for three years in the case of Mr.
Marischen and two years in the case of Mr. Verkruyse, following their
respective terminations for any reason.
Compensation Committee Interlocks and Insider Participation
- -----------------------------------------------------------
All Compensation Committee members are non-employee directors. Messrs. Hunter
and Marischen consulted with the Compensation Committee regarding executive
compensation, including their own 1999 remuneration packages, and were present
at the meeting of the Committee at which the remuneration for each of the
Company's executive officers for 1999 was determined.
Stock Price Performance Graph
- -----------------------------
The graph below compares cumulative total shareholder returns on the Company's
Class A Shares to the cumulative total return of the S&P Industrials index and
to two different peer group indices. Beginning with this proxy statement, the
Company has elected to change its peer index. With the number of steel
processing and service center related concerns that have gone public over the
last five years, continued use of a peer index consisting only of Steel
Technologies, Inc. and Worthington Industries, Inc. was no longer viewed as an
appropriate yardstick for measuring the Company's performance. Given the
Company's involvement in the steel sector, it has elected to compare its
results with a broader-based and more publicly available peer index - the S&P
Iron & Steel index.
The comparison of total return assumes that a fixed investment of $100 was
invested on April 30, 1994 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 April 30, 1994 through April
30, 1997, the Company's eight-month transition period from May 1, 1997 through
December 31, 1997, and the succeeding fiscal years ending December 31, 1998
and 1999. The stock price performance shown on the graph below is not
necessarily indicative of future price performance.
<TABLE>
<CAPTION>
April 30, December 31,
---------------------------- -----------------------
1994 1995 1996 1997 1997 1998 1999
---- ---- ---- ---- ---- ---- ----
<S> <C> <C> <C> <C> <C> <C> <C>
Huntco Inc. 100.00 91.95 93.87 70.24 91.18 23.32 19.88
S&P Industrial 100.00 116.72 148.00 179.43 213.60 281.74 350.84
S&P Iron & Steel 100.00 84.28 90.03 81.43 79.39 93.64 65.81
Peer Group<F1> 100.00 100.70 109.88 104.96 96.01 76.66 98.23
<FN>
<F1> weighted average stock price performance history of Worthington Industries,
Inc.
and Steel Technologies, Inc., which the Company intends to cease using as its
peer
group index subsequent to this Proxy Statement.
[GRAPH]
</TABLE>
CERTAIN TRANSACTIONS
- --------------------
The Company leases space for its executive offices located in Town & Country,
Missouri, in an office building owned by Huntco Farms. Lease payments made by
the Company, as well as its wholly owned subsidiary Huntco Steel which
relocated certain administrative functions to Huntco Farms' building during
1999, totaled $58,124 to Huntco Farms in 1999. Five year lease commitments
were executed effective September 1, 1999 for the above-referenced office
space, which leases call for annual payments totaling $135,300 during the
first three years of the two leases, and annual payments totaling $148,760 in
years four and five of the leases. The Company also leases a ranch facility
in Colorado owned by Huntco Farms that the Company uses primarily for the
entertainment of customers. During 1999, the Company made lease payments to
Huntco Farms totaling $60,000 relating to its use of the property in Colorado.
It anticipates making similar payments under this lease during the current
fiscal year.
During 1999, Huntco Steel purchased the remaining one-half interest in a
Cessna 310 aircraft from a wholly owned subsidiary of Acquisitions, an owner
of 86.2% of the Company's Class B Shares. Huntco Steel paid $104,005, the
fair market value, for this one-half interest in the aircraft.
INDEPENDENT ACCOUNTANTS
- -----------------------
The Company is presently utilizing the services of PricewaterhouseCoopers LLP,
independent accountants, who have been the Company's and its predecessor's
independent accountants since 1986 and who will serve as the Company's
independent accountants for the fiscal year ending December 31, 2000.
Representatives of PricewaterhouseCoopers LLP 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
- ---------------------
Proposals of shareholders intended to be presented at the Company's 2001
Annual Meeting must be received by the Company at its principal executive
offices by November 30, 2000, for inclusion in the Company's proxy materials
relating to that meeting pursuant to Rule 14a-8 under the Securities Exchange
Act of 1934, as amended. Upon receipt of any such proposal, the Company will
determine whether or not to include such proposal in the proxy materials in
accordance with regulations governing the solicitation of proxies.
Any shareholder proposal submitted with respect to the Company's 2001 Annual
Meeting that is submitted outside the requirements of Rule 14a-8 must be
submitted by February 13, 2001. This requirement is separate from and in
addition to the requirements with which a shareholder must comply to have a
proposal included in the Company's proxy materials with respect to the 2001
Annual Meeting. The time limit set forth in this paragraph also applies in
determining whether notice is timely for purposes of rules adopted by the
Securities and Exchange Commission relating to the exercise of discretionary
voting authority.
In each case the appropriate notice must be given to the Secretary of the
Company, whose address is: 14323 South Outer Forty, Suite 600 N., Town &
Country, Missouri 63017.
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.
March 30, 2000
<PAGE>
APPENDIX
Page 15 of the printed proxy statement contains a Stock Price Performance
Graph. The information contained in the graph is depicted in the table that
immediately precedes the graph.
<PAGE>
HUNTCO INC.
PROXY SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS
For Annual Meeting of Shareholders on May 4, 2000
The undersigned hereby appoints B. D. HUNTER and ROBERT J. MARISCHEN, 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 4, 2000, 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.
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>
1. Election of Directors: Donald E. Brandt and Michael M. McCarthy
[ ] FOR all nominees listed (except as marked to the contrary below)
[ ] WITHHOLD AUTHORITY to vote for all nominees listed above
(INSTRUCTION: To withhold authority to vote for any individual nominee, write
that nominee's name on the space provided below.)
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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.
The undersigned hereby revokes all proxies heretofore given by the
undersigned for said meeting. This proxy may be revoked prior to its
exercise.
Dated: ______________________________, 2000
____________________________________
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.
