<PAGE>
SCHEDULE 14A INFORMATION
Proxy Statement Pursuant to Section 14(a) of the Securities Exchange Act of 1934
(Amendment No. )
Filed by the Registrant [X]
Filed by a Party other than the Registrant [ ]
Check the appropriate box:
[_] Preliminary Proxy Statement
[_] Confidential, for Use of the Commission Only (as permitted by Rule 14a-
6(e)(2))
[X] Definitive Proxy Statement
[_] Definitive Additional Materials
[_] Soliciting Material Pursuant to (S)240.14a-11(c) or (S)240.14a-12
Sheffield Steel Corporation
(Name of Registrant as Specified In Its Charter)
Sheffield Steel Corporation
(Name of Person(s) Filing Proxy Statement)
Payment of Filing Fee (Check the appropriate box):
[X] $125 per Exchange Act Rules 0-11(c)(1)(ii), 14a-6(i)(1) or 14a-6(j)(2).
[_] $500 per each party to the controversy pursuant to Exchange Act Rule 14a-
6(i)(3).
[_] Fee computed on table below per Exchange Act Rules 14a-6(i)(4) and 0-11.
1) Title of each class of securities to which transaction applies:
______________________________________________________________
2) Aggregate number of securities to which transaction applies:
______________________________________________________________
3) Per unit price or other underlying value of transaction computed pursuant to
Exchange Act Rule 0-11 (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: ___________
[_] 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>
July 31, 1996
Dear Stockholder,
You are cordially invited to attend the 1996 Annual Meeting of Stockholders
of Sheffield Steel Corporation (the "Company") to be held at 5:00 p.m. on
Wednesday, September 4, 1996, at 220 North Jefferson, Sand Springs, Oklahoma.
At the Annual Meeting, six persons will be elected to the Board of Directors.
The Board of Directors recommends the approval of each of these persons. Such
other business will be transacted as may properly come before the Annual
Meeting.
The accompanying Notice of Annual Meeting of Stockholders and Proxy Statement
describe the matters that will be presented at the Annual Meeting.
We hope you will be able to attend the Annual Meeting. Whether you plan to
attend the Annual Meeting or not, it is important that your shares are
represented. Therefore, you are urged promptly to complete, sign, date and
return the enclosed proxy card in accordance with the instructions set forth on
the card, whether or not you plan to attend the Annual Meeting in person. This
will ensure your proper representation at the Annual Meeting.
Sincerely,
Robert W. Ackerman
President and Chief Executive Officer
YOUR VOTE IS IMPORTANT.
PLEASE RETURN YOUR PROXY PROMPTLY.
<PAGE>
SHEFFIELD STEEL CORPORATION
220 North Jefferson
Sand Springs, OK 74063
(918) 245-1335
NOTICE OF ANNUAL MEETING OF STOCKHOLDERS
To be Held on September 4, 1996
To the Stockholders of Sheffield Steel Corporation:
NOTICE IS HEREBY GIVEN that the 1996 Annual Meeting of Sheffield Steel
Corporation, a Delaware corporation (the "Company"), will be held on Wednesday,
September 4, 1996 at 220 North Jefferson, Sand Springs, Oklahoma, at 5:00 p.m.
for the following purposes:
1. To elect six members to the Board of Directors to hold office until the
next annual meeting of Stockholders and until their successors are duly
elected and qualified.
2. To transact such other business as may be properly brought before the
Annual Meeting and any adjournments thereof.
The Board of Directors has fixed the close of business on July 31, 1996, as
the record date (the "Record Date") for the determination of Stockholders
entitled to notice of and to vote at the Annual Meeting and at any adjournments
thereof.
All Stockholders are cordially invited to attend the Annual Meeting in
person. Whether you plan to attend the Annual Meeting or not, you are requested
to complete, sign, date and return the enclosed proxy card as soon as possible
in accordance with the instructions on the proxy card. A pre-addressed, postage
prepaid return envelope is enclosed for your convenience. Holders of record of
the Common Stock as of the Record Date who do attend the Annual Meeting and wish
to vote in person may revoke their proxies.
BY ORDER OF THE BOARD OF DIRECTORS
Dale S. Okonow
Vice President and Secretary
Sand Springs, Oklahoma
July 31, 1996
<PAGE>
SHEFFIELD STEEL CORPORATION
220 NORTH JEFFERSON
SAND SPRINGS, OKLAHOMA
918-245-1335
_______________________________
PROXY STATEMENT
_______________________________
GENERAL INFORMATION
This Proxy Statement is being furnished to stockholders in connection with
the solicitation by the Board of Directors of Sheffield Steel Corporation, a
Delaware corporation (the "Company"), of proxies, in the accompanying form, to
be used at the Annual Meeting of Stockholders to be held at 220 North Jefferson,
Sand Springs, Oklahoma, on Wednesday, September 4, 1996, at 5:00 p.m., and any
adjournments thereof (the "Meeting").
Where the Stockholder specifies a choice on the proxy as to how his or her
shares are to be voted on a particular matter, the shares will be voted
accordingly. If no choice is specified, the shares will be voted FOR the
election of the six nominees for director named herein. Any proxy given
pursuant to this solicitation may be revoked by the person giving it at any time
before its use by delivering to the Company a written notice of revocation or a
duly executed proxy bearing a later date. Any Stockholder who has executed a
proxy but is present and wishes to vote by ballot in person at the Meeting may
do so by revoking his or her proxy as described in the preceding sentence.
Shares represented by valid proxies in the form enclosed, received in time for
use at the Meeting and not revoked at or prior to the Meeting, will be voted at
the Meeting. The presence, in person or by proxy, of the holders of a majority
of the outstanding shares of the Company's common stock, par value $ .01 per
share ("Common Stock"), is necessary to constitute a quorum at the Meeting. No
approval rights exist for any action proposed to be taken at the Meeting.
The affirmative vote of a majority of the shares present or represented and
entitled to vote at the Meeting is required to approve each proposal, including
the election of directors. With respect to the tabulation of votes on any
matter, abstentions are treated as votes against a proposal, while broker non-
votes have no effect on the vote.
The close of business on July 31, 1996 has been fixed as the record date (the
"Record Date") for determining the Stockholders entitled to notice of and to
vote at the Meeting. As of the close of business on July 31, 1996, the Company
had 3,375,000 shares of Common Stock outstanding and entitled to vote. Holders
of Common Stock are entitled to one vote per share on all matters to be voted on
by Stockholders.
The cost of soliciting proxies, including expenses in connection with
preparing and mailing this Proxy Statement, will be borne by the Company.
Solicitation of proxies by mail may be supplemented by telephone, telegram,
telex and personal solicitation by the directors, officers, or employees of the
Company. No additional compensation will be paid for such solicitation.
This Proxy Statement and the accompanying proxy are being mailed on or about
July 31, 1996 to all Stockholders entitled to notice of and to vote at the
Meeting.
The Company's Annual Report on Form 10-K for the fiscal year ended April 30,
1996 is being mailed to the Stockholders with this Proxy Statement, but does not
constitute a part hereof.
1
<PAGE>
SHARE OWNERSHIP
HMK Enterprises, Inc. ("HMK") currently owns 95% of the issued and
outstanding shares of Common Stock. HMK is a Massachusetts-based privately-
owned holding company engaged in manufacturing and distribution businesses
through two principal operating groups.
The following table sets forth certain information as of July 1, 1996
concerning the ownership of Common Stock by each Stockholder known by the
Company to be the beneficial owner of more than 5% of its outstanding shares of
Common Stock, each current member of the Board of Directors, each executive
officer named in the Summary Compensation Table herein, and all current
directors, nominees, and executive officers as a group.
<TABLE>
<CAPTION>
Shares Beneficially Owned (a)(b)
----------------------------------
Name and Address** Number Percent
- - ---------------------------------------- ---------------- ----------------
<S> <C> <C>
Steven E. Karol 1,614,397 42.71% (c) (e)
HMK Enterprises, Inc.
800 South Street
Waltham, MA 02154
Jane M. Karol 1,614,397 42.71% (d) (e)
HMK Enterprises, Inc.
800 South Street
Waltham, MA 02154
Robert W. Ackerman 286,855 (f) 7.58%
Sheffield Steel Corporation
220 N. Jefferson
Sand Springs, OK 74063
John F. Lovingfoss 90,703 (g) 2.40%
Dale S. Okonow 74,078 (h) 1.96%
Stephen R. Johnson 25,313 (i) *
Howard H. Stevenson - *
John D. Lefler - *
All current executive officers, 3,705,743 (j) 98.03%
directors, and nominees of the
Company as a group (10 persons)
</TABLE>
- - --------------------------------------------------------------------------------
* Represents beneficial ownership of less than 1% of the Company's outstanding
shares of Common Stock.
** Addresses are given for beneficial owners of more than 5% of the outstanding
Common Stock only.
2
<PAGE>
(a) The number of shares of Common Stock issued and outstanding on July 1,
1996 was 3,375,000. The calculation of percentage ownership for each
listed beneficial owner is based upon the number of shares of Common
Stock issued and outstanding at July 1, 1996, plus shares of Common Stock
subject to options or warrants held by such person at July 1, 1996 and
exercisable within 60 days thereafter. The persons and entities named in
the table have sole voting and investment power with respect to all
shares shown as beneficially owned by them, except as otherwise noted.
(b) Beneficial ownership as reported in the table above has been determined
in accordance with Rule 13d-3 under the Exchange Act.
(c) Of the 1,614,397 shares of Common Stock beneficially owned by Mr. Karol,
11,272 shares or .33%, are owned of record by him. Mr. Karol also owns
74.7634 shares of the Class A common stock, $1.00 par value, of HMK (the
"HMK Class A Common Stock"), which shares constitute 50% of the issued
and outstanding shares of HMK Class A Common Stock. Of the 1,614,397
shares of Common Stock beneficially owned by Mr. Karol, 1,603,125 shares,
or 47.5%, are deemed to be beneficially owned by Mr. Karol by virtue of
his ownership of such shares of HMK Class A Common Stock.
(d) Of the 1,614,397 shares of Common Stock beneficially owned by Ms. Karol
11,239 shares, or .33%, are owned of record by her. Ms. Karol also owns
74.7634 shares of HMK Class A Common Stock, which shares constitute 50%
of the issued and outstanding shares of HMK Class A Common Stock. Of the
1,614,397 shares of Common Stock beneficially owned by Ms. Karol,
1,603,125 shares, or 47.5%, are deemed to be beneficially owned by Ms.
Karol by virtue of her ownership of such shares of HMK Class A Common
Stock.
(e) Each of Steven E. Karol and Jane M. Karol own 74.7634 shares of HMK
Class A Common Stock, constituting 50% of the issued and outstanding
shares of HMK Class A Common Stock in the aggregate. HMK Class A Common
Stock is the only class of voting stock of HMK issued and outstanding.
For purposes of determining beneficial ownership of Common Stock as
reported in the preceding table, ownership of any class of non-voting
stock of HMK has not been included.
(f) Includes 253,105 shares which Mr. Ackerman may acquire upon the exercise
of options within 60 days after July 1, 1996.
(g) Includes 56,953 shares which Mr. Lovingfoss may acquire upon exercise of
options within 60 days after July 1, 1996.
(h) Includes 56,953 shares which Mr. Okonow may acquire upon exercise of
options within 60 days after July, 1, 1996.
(i) Includes 25,313 shares which Mr. Johnson may acquire upon the exercise
of options within 60 days after July 1, 1996.
(j) Includes an aggregate of 392,324 shares which may be acquired upon the
exercise of options within 60 days after July 1, 1996.
3
<PAGE>
MANAGEMENT
DIRECTORS
- - ---------
The Company's By-Laws provide for the Company's business to be managed by or
under the direction of the Board of Directors. Under the Company's By-Laws, the
number of directors is fixed from time to time by the Stockholders or Board of
Directors, and directors serve in office until the next annual meeting of
Stockholders and until their successors have been elected and qualified.
Pursuant to the Company's By-Laws, the Board of Directors voted (i) to set
the size of the Board of Directors at six members and (ii) to nominate Messrs.
Karol, Ackerman, Okonow, Stevenson, Lefler and Ms. Jane Karol for election at
the Meeting to the Board of Directors to serve until the next annual meeting of
Stockholders and until their respective successors have been elected and
qualified.
The names of the Company's current directors, nominees for director and
certain information about them are set forth below:
<TABLE>
<CAPTION>
Name Age Position with the Company
- - ------------------ --- -------------------------------------
<S> <C> <C>
Robert W. Ackerman 57 President and Chief Executive Officer
Steven E. Karol 43 Chairman of the Board of Directors
Dale S. Okonow 39 Vice President and Secretary
Jane M. Karol 34 Director
Howard H. Stevenson 55 Director
John D. Lefler 50 Director
</TABLE>
ROBERT W. ACKERMAN. Mr. Ackerman has been President and Chief Executive
Officer and a Director since 1992. From 1988 to 1992, Mr. Ackerman was the
President and Chief Executive Officer of Lincoln Pulp & Paper Co., Inc. From
1986 to 1988, Mr. Ackerman taught in the Advanced Management Program at the
Harvard University Graduate School of Business Administration. Mr. Ackerman
serves as a Director of Gulf States Steel, Inc. of Alabama ("Gulf States"), The
Baupost Fund, and Atlantic Investment Advisors, Inc.
STEVEN E. KAROL. Mr. Karol has been a Director of the Company since 1981 and
Chairman of the Board of Directors since 1983. Mr. Karol is also President and
Chief Executive Officer and Chairman of the Board of HMK Enterprises, Inc.
("HMK"), the parent company of Sheffield Steel Corporation. Mr. Karol also
serves as Chairman of the Board of Directors of Gulf States. Mr. Karol is the
brother of Jane M. Karol.
DALE S. OKONOW. Mr. Okonow has been Vice President and Secretary since 1988
and a Director since 1990. Prior to 1988, Mr. Okonow was an associate with the
law firm of Proskauer Rose Goetz & Mendelsohn in New York City. Mr. Okonow was
Vice President and General Counsel of HMK from 1988 to 1990 and has been a
Senior Vice President and Chief Financial Officer of HMK since 1990. Mr. Okonow
also serves as Vice-President, Secretary, and a Director of Gulf States.
JANE M. KAROL. Ms. Karol has been a Director since 1991. Ms. Karol is a
Director of HMK. Ms. Karol is also the sister of Steven E. Karol.
4
<PAGE>
HOWARD H. STEVENSON. Dr. Stevenson has been a Director since 1993. Since
1982, Dr. Stevenson has been Sarofim-Rock Professor of Business Administration
at the Harvard University Graduate School of Business Administration. He is
also a Senior Associate Dean and Director of Financial and Information Systems
for Harvard Business School. Dr. Stevenson also serves as a Director of Camp
Dresser & McKee, Landmark Communications, Gulf States, The Baupost Group, Inc.,
The Baupost Fund, and Bessemer Securities Corporation.
JOHN D. LEFLER. Mr. Lefler has over 26 years of experience in the steel
industry and has been the President and Chief Executive Officer of Gulf States
since May 1993. Mr. Lefler has served Gulf States in various management
positions since 1986. Prior to joining Gulf States, he worked at USX for more
than 18 years in various management positions. Mr. Lefler serves as a Director
of Gulf States and First Alabama Bank.
COMMITTEES OF THE BOARD OF DIRECTORS
MEETING ATTENDANCE. During the fiscal year ended April 30, 1996 there were
four meetings of the Board of Directors. Other than Jane M. Karol, all of the
directors attended at least 75% of the total meetings of the Board and of
committees of the Board on which he or she served during fiscal 1996. In
addition, from time to time, the members of the Board of Directors and its
committees acted by unanimous written consent pursuant to Delaware law.
AUDIT COMMITTEE. Subsequent to April 30, 1996, the Board of Directors
established an Audit Committee which has two members, Mr. Okonow and Mr.
Ackerman. The Audit Committee will review the engagement of the Company's
independent accountants, review annual financial statements, consider matters
relating to accounting policy and internal controls and review the scope of
annual audits. The findings of this committee will be reviewed by the Board of
Directors.
STOCK COMPENSATION COMMITTEE. The Stock Compensation Committee has three
members, Mr. Karol, Mr. Okonow and Mr. Ackerman. The Stock Compensation
Committee did not meet during fiscal 1996. The Stock Compensation Committee
administers the Company's 1993 Employee, Director and Consultant Stock Option
Plan. See "1993 Stock Option Plan".
COMPENSATION COMMITTEE. The Company does not have a standing Compensation
Committee. Recommendations concerning salaries and incentive compensation
(other than stock options) for employees of the Company (other than Mr.
Ackerman) are made by Mr. Ackerman and are reviewed by the Board of Directors.
Recommendations concerning Mr. Ackerman's salary and incentive compensation
(other than stock options) are made by Mr. Karol and are reviewed by the Board
of Directors.
NOMINATING COMMITTEE. The Company does not have a standing Nominating
Committee.
ELECTION AND COMPENSATION OF DIRECTORS
Ninety-five percent of the outstanding shares of the Company's Common Stock
is currently owned by HMK, which is in turn 100% owned by members of the Karol
family. Consequently, certain members of the Karol family together beneficially
own substantially all of the outstanding shares of the Company's common stock
and are able to determine the outcome of all matters required to be submitted to
stockholders for approval, including the election of directors. Giving effect
to the exercise of all of the Company's outstanding Warrants and exercisable
options, HMK owns approximately 79% of the outstanding shares of the Company's
Common Stock. See "Share Ownership."
5
<PAGE>
Dr. Stevenson and Mr. Lefler will receive an annual retainer of $4,000,
payable quarterly, and a meeting fee of $1,500 for each meeting of the Board of
Directors attended. The Company reimburses ordinary and necessary out-of-pocket
expenses incurred by any Director in connection with his or her services. In
addition, Directors of the Company are eligible to receive non-qualified stock
options under the Company's 1993 Employee, Director and Consultant Stock Option
Plan. As of April 30, 1996, no Director had been granted any stock options for
services as a Director of the Company.
EXECUTIVE OFFICERS
- - ------------------
The names of, and certain information regarding, executive officers of the
Company who are not also directors, are set forth below. The executive officers
serve at the pleasure of the Board of Directors.
<TABLE>
<CAPTION>
Name Age Position
- - -------------------- --- ------------------------------------------
<S> <C> <C>
John F. Lovingfoss 58 Vice President-Sales and Marketing
Stephen R. Johnson 44 Vice President and Chief Financial Officer
</TABLE>
JOHN F. LOVINGFOSS. Mr. Lovingfoss has been Vice President-Sales and
Marketing since 1984. From 1958 to 1984, Mr. Lovingfoss held various positions
with the Company in sales, marketing, and management.
STEPHEN R. JOHNSON. Mr. Johnson has been Vice President and Chief Financial
Officer since February 1996. From 1977 to 1996, Mr. Johnson held various
positions with the Company including the position of Vice President-
Administration and Treasurer since 1991 and Vice President-MIS and Business
Planning since 1984.
6
<PAGE>
EXECUTIVE COMPENSATION
The following Summary Compensation Table includes, for the fiscal year ended
1996, individual compensation information for: (i) the Company's Chief Executive
Officer (the "CEO") and (ii) each of the other most highly compensated persons
who were serving as executive officers of the Company (other than the CEO) at
the end of fiscal 1996 whose salary and bonus earned during fiscal 1996 exceeded
$100,000 (collectively, the "named executive officers").
<TABLE>
<CAPTION>
SUMMARY COMPENSATION TABLE
Long-term
Compensation
Fiscal Annual Compensation Awards
------ ------------------- ----------
Name and Principal Position Year(a) Salary Bonus # Options
- - ----------------------------- ---------------------- -------- ----- ------------
<S> <C> <C> <C> <C>
Robert W. Ackerman 1996 $275,000 - 253,125.000
President and CEO
John F. Lovingfoss 1996 150,000 - 56,953.125
Vice President-Sales
Stephen R. Johnson 1996 125,000 - 25,312.50
Vice President and
Chief Financial Officer
</TABLE>
- - -------------------------------------------------------------------------------
(a) Pursuant to the Instructions to Item 402(b) of Regulation S-K, information
with respect to fiscal years prior to fiscal 1996 has not been included.
OPTION GRANTS IN LAST FISCAL YEAR
None of the named executive officers were granted stock options during the
fiscal year ended April 30, 1996.
OPTION EXERCISES IN LAST FISCAL YEAR AND FISCAL YEAR-END VALUES
During the fiscal year ended April 30, 1996 none of the named executive
officers exercised stock options and 69,609.375 options were forfeited in the
last fiscal year. All of the options remaining are vested and exercisable as of
April 30, 1996. The following table provides information regarding the number
of exercisable stock options as of April 30, 1996 and the values of "in-the-
money" options, which values represent the positive spread between the exercise
price of any such option and the fiscal year-end value of the Company's Common
Stock.
<TABLE>
<CAPTION>
Number of Securities Value of the
Underlying Unexercised in-the-
Unexercised Options Money Options at
at Fiscal Year End Fiscal Year End
-------------------- --------------------
Exercisable Exercisable (1)
-------------------- --------------------
<S> <C> <C>
Robert W. Ackerman 253,105.000 3,317,873
John F. Lovingfoss 56,953.125 746,580
Stephen R. Johnson 25,312.500 331,814
</TABLE>
(1) The value of unexercised in-the-money options at fiscal year end assumes a
fair market value for the Company's Common Stock of $20.52, as determined
by the performance-based formula prescribed in the non-qualified and
incentive agreements entered into pursuant to the 1993 Stock Option Plan.
7
<PAGE>
1993 STOCK OPTION PLAN
On September 15, 1993, the Board of Directors adopted, and the stockholders
of the Company approved, the Company's 1993 Employee, Director and Consultant
Stock Option Plan (the "Stock Option Plan"). The Stock Option Plan provides for
the grant of incentive stock options to key employees of the Company and non-
qualified stock options to key employees, directors and consultants of the
Company. A total of 580,000 shares of Common Stock, which would represent
approximately 13.4% of the Company's Common Stock on a fully diluted basis, have
been reserved for issuance under the Stock Option Plan upon the exercise of
options. During the year ended April 30, 1996, 69,609.375 options were
forfeited, leaving 405,000 options outstanding at April 30, 1996. The options
granted on December 15, 1993, to the named executive officers are incentive
stock options and non-qualified stock options and vested on April 30, 1996. The
Stock Option Plan is administered by the Stock Compensation Committee of the
Board of Directors. There were no stock options exercised during fiscal 1996.
EXECUTIVE INCENTIVE PLAN
Each of the named executive officers is eligible to receive bonus
compensation under the Company's Executive Bonus Plan (the "Incentive Plan").
The Incentive Plan provides that (i) in the event that actual pre-tax profit for
any fiscal year equals or exceeds budgeted pre-tax profit for such year,
participants in the Incentive Plan will be paid a bonus ranging from 30% to 50%
of such participant's base salary and (ii) in the event that actual pre-tax
profit for any fiscal year does not meet budgeted pre-tax profit for such year,
by less than 20%, the Company's Board of Directors may, at its discretion, (A)
establish a bonus pool of up to 20% of the total base pay of all participants in
the Incentive Plan and (B) award bonus payments from such bonus pool, if any, to
participants in the Incentive Plan. Such bonus payments, if any, are to be based
upon (x) the individual performance of such participant, (y) the performance of
such participant's department and (z) such participant's contribution to the
Company's overall performance. Bonuses, if any, are required to be paid within
90 days after the Company's fiscal year end.
PENSION PLAN
The Company maintains a retirement plan that is an Internal Revenue Code (the
"Code") qualified defined benefit pension plan (the "Pension Plan"). At normal
retirement date (age 65 or completion of 30 years of service), a participant is
paid a pension equal to the sum of: (a) the product of the participant's years
of plan service from September 1, 1981 through December 31, 1984 and 1.25% of
his average monthly compensation, determined over the participant's highest five
consecutive years; and (b) the product of the participant's years of plan
service after January 1, 1985, and .9% of his average monthly compensation as
defined above. The normal form of pension is a lifetime annuity with a 50%
survivor pension for any surviving spouse. Optional forms of payment are
available and are actuarially equivalent to a lifetime annuity without surviving
spouse benefits. The Pension Plan also provides for early retirement benefits on
an actuarially reduced basis for participants who reach age 55 with at least 10
years of service. Vested retirement benefits are available for participants who
are terminated with at least five years of plan service. Although the pension is
reduced to the extent of any profit sharing retirement annuity provided by
discretionary contributions under the Sheffield Steel Corporation Thrift and
Profit Sharing Plan (the "Profit Sharing Plan") no such discretionary
contributions have been made to the Profit Sharing Plan.
Years of service for purposes of the Pension Plan with respect to the named
executive officers are as follows: Mr. Ackerman, four years; Mr. Lovingfoss, 37
years; and Mr. Johnson, 18 years.
8
<PAGE>
The following table shows the projected annual pension benefits payable plan
at the normal retirement age of 65:
<TABLE>
<CAPTION>
Annual Normal Pension Benefits for Years of Service Shown
Annual ---------------------------------------------------------
Base Salary 15 20 25 30 35
--------------- ----------- ----------- ----------- ----------- -----------
<S> <C> <C> <C> <C> <C> <C>
$125,000 $16,875 $22,500 $28,125 $33,750 $39,375
150,000 20,250 27,000 33,750 40,500 47,250
175,000 23,625 31,500 39,375 47,250 55,125
200,000 27,000 36,000 45,000 54,000 63,000
225,000 30,375 40,500 50,625 60,750 70,875
250,000 and above 31,838 42,451 53,064 63,677 74,290
</TABLE>
THRIFT AND PROFIT SHARING PLAN
The Company's Profit Sharing Plan is a Code-qualified defined contribution
plan which permits its employees to elect "after-tax" payroll deductions between
4% and 14% of compensation. The Profit Sharing Plan also provides for
additional discretionary contributions by the Company, which would be allocated
according to compensation ratios and, to the extent permitted by the Internal
Revenue Code, according to compensation in excess of the FICA taxable wage base.
Discretionary Company contributions are forfeited by terminated employees with
less than five years of service. Discretionary contributions would offset
pensions under the Pension Plan described above, but no discretionary Company
contributions have been made to the Profit Sharing Plan.
401(K) RETIREMENT PLAN
Certain divisions of the Company sponsor plans which permit eligible
employees of the Company to defer compensation to the extent permitted by
Section 401(k) of the Code (the "Retirement Plan"). The Retirement Plans permit,
but do not require, discretionary Company contributions. Total Company
contributions for these plans amounted to $188, $57 and $85 in 1994, 1995 and
1996, respectively.
9
<PAGE>
CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS
As of the end of fiscal 1996, HMK owed an aggregate of $2.7 million to the
Company. Of that amount, $2.2 million was related to certain tax attributes
allocated to the Company pursuant to a Tax Sharing Agreement with HMK. Under
that agreement, the receivable will be realized by reducing the future income
taxes otherwise payable by the Company to HMK. The remaining $0.5 million
relates to the Company's advance of funds to HMK to secure a letter of credit
needed for the insurance program of the Company's Joliet facility.
In September 1992, certain of the Company's officers, directors and members
of the Karol family purchased an aggregate of 5% of the issued and outstanding
shares of the Company's Common Stock in exchange for an aggregate of $250,000
cash and $1,000,000 in non-recourse promissory notes secured by pledges of such
stock. The non-recourse promissory notes evidencing each such shareholders'
indebtedness bear simple interest at an annual rate of 7.61% and become due on
February 1, 2007 or on such earlier date upon the occurrence of certain events
as stated in the notes.
Each of Robert W. Ackerman, President and Chief Executive Officer and a
Director of the Company, John F. Lovingfoss, Vice President-Sales and Marketing
of the Company and Douglas E. Brooks, former Vice President-Operations and Human
Resources of the Company, purchased 1% of the issued and outstanding shares of
the Company's Common Stock in exchange for $50,000 in cash and a non-recourse
promissory note with an original principal balance of $200,000. The aggregate
amount of indebtedness owed to the Company by each of such individuals as of
April 30, 1996 is $255,376 ($200,000 principal amount and $55,376 of accrued
interest). The largest amount of indebtedness outstanding during fiscal 1996 for
each of Messrs. Ackerman, Lovingfoss and Brooks was $255,376.
Each of Dale S. Okonow, Vice President, Secretary and a Director of the
Company and Janelle H. Stewart, former Controller of the Company, purchased 0.5%
of the issued and outstanding shares of the Company's Common Stock in exchange
for $25,000 in cash and a non-recourse promissory note with an original
principal balance of $100,000. The aggregate amount of indebtedness owed to the
Company by each of such individuals as of April 30, 1996 is $127,688 ($100,000
principal amount and $27,688 of accrued interest). The largest amount of
indebtedness outstanding during fiscal 1996 for each of Mr. Okonow and Ms.
Stewart was $127,688.
Each of Jane M. Karol, a Director of the Company and Joan L. Karol, mother of
each of Jane M. Karol and Steven E. Karol, Directors of the Company, purchased
0.333% of the issued and outstanding shares of the Company's Common Stock in
exchange for $16,665 in cash and a non-recourse promissory note with an original
principal balance of $66,660. The aggregate amount of indebtedness owed to the
Company by each of such individuals as of April 30, 1996 is $85,117 ($66,660
principal amount and $18,457 of accrued interest). The largest amount of
indebtedness outstanding during fiscal 1996 for each of Jane M. Karol and Joan
L. Karol was $85,117.
Steven E. Karol, Chairman of the Board of Directors of the Company, purchased
0.334% of the issued and outstanding shares of the Company's Common Stock in
exchange for $16,670 in cash and a non-recourse promissory note with an original
principal balance of $66,680. The aggregate amount of indebtedness owed to the
Company by Mr. Karol as of April 30, 1996 is $98,528 ($66,680 principal amount
and $18,461 of accrued interest). The largest amount of indebtedness outstanding
during fiscal 1996 for Mr. Karol was $98,528.
10
<PAGE>
ELECTION OF DIRECTORS
NOTICE ITEM 1
Under the Company's By-Laws, the number of directors is fixed from time to
time by the Stockholders, and directors serve in office until the next annual
meeting of Stockholders and until their successors have been elected and
qualified.
Pursuant to the Company's By-Laws, the Board of Directors on September 4,
1996 voted to nominate Messrs. Karol, Ackerman, Okonow, Stevenson, Lefler, and
Ms. Jane Karol for election at the Meeting to serve until the next annual
meeting of Stockholders and until their respective successors have been elected
and qualified.
* * * * * * * * * *
Unless authority to vote for any of the nominees named above is withheld, the
shares represented by the enclosed proxy will be voted FOR the election as
directors of such nominees. In the event that any nominee shall become unable
or unwilling to serve, the shares represented by the enclosed proxy will be
voted for the election of such other person as the Board of Directors may
recommend in his place. The Board has no reason to believe that any nominee
will be unable or unwilling to serve.
The affirmative vote of a majority of the shares present or represented and
entitled to vote at the Meeting is required to elect each nominee as a director.
THE BOARD OF DIRECTORS RECOMMENDS THE ELECTION OF MESSRS. KAROL, ACKERMAN,
OKONOW, STEVENSON, AND LEFLER, AND MS. KAROL AS DIRECTORS, AND PROXIES SOLICITED
BY THE BOARD WILL BE VOTED IN FAVOR THEREOF UNLESS A STOCKHOLDER HAS INDICATED
OTHERWISE ON THE PROXY.
NOTICE ITEM 2
Other Matters
The Board of Directors knows of no other business which will be presented to
the Meeting. If any other business is properly brought before the Meeting, it
is intended that proxies in the enclosed form will be voted in respect thereof
in accordance with the judgment of the persons voting the proxies.
11
<PAGE>
Stockholder Proposals
To be considered for presentation at the Annual Meeting of Stockholders to be
held in 1997, Stockholder proposals must be received, marked for the attention
of: Vice President and Secretary, Sheffield Steel Corporation, P. O. Box 218,
Sand Springs, Oklahoma 74063, not earlier than January 1, 1997 and not later
than April 30, 1997.
WHETHER OR NOT YOU INTEND TO BE PRESENT AT THE MEETING, YOU ARE URGED TO FILL
OUT, SIGN, DATE AND RETURN THE ENCLOSED PROXY AT YOUR EARLIEST CONVENIENCE.
By order of the Board of Directors:
Dale S. Okonow
Vice President and Secretary
July 31, 1996
12
<PAGE>
SHEFFIELD STEEL CORPORATION
220 NORTH JEFFERSON
SAND SPRINGS, OKLAHOMA 74063
PROXY
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ANNUAL MEETING OF STOCKHOLDERS
TO BE HELD WEDNESDAY, SEPTEMBER 4, 1996
The undersigned hereby appoints Robert W. Ackerman and Dale S. Okonow, and
either of them, as Proxies, each with the power to appoint his substitute, and
hereby authorizes them, or either of them, to represent and to vote as
designated below all the shares of capital stock of Sheffield Steel Corporation
(the "Company"), held of record by the undersigned on July 31, 1996 at the
Annual Meeting of Stockholders to be held on Wednesday, September 4, 1996, at
the offices of the Company, located at 220 North Jefferson, Sand Springs,
Oklahoma 74063, and any adjournment or adjournments thereof (the "Annual
Meeting").
If you do not plan to attend the meeting, please complete, sign and date
the proxy and return it without delay to the Company in the enclosed
postage-prepaid envelope. If you do attend the meeting in person, you may
withdraw the proxy and vote personally on each matter brought before the
meeting.
THIS PROXY WHEN PROPERLY EXECUTED WILL BE VOTED IN THE MANNER DIRECTED
HEREIN BY THE UNDERSIGNED STOCKHOLDER. THIS PROXY, IF SIGNED ON PAGE 2 HEREOF
AND IF NO SPECIFIC DIRECTION IS MADE AS TO ANY OR ALL OF THE PROPOSALS,
DIRECTORS, AND WITH AUTHORITY UNDER ITEM 2.
----
1. Election of Directors
---------------------
To elect as Directors of the Company the following six individuals:
Robert W. Ackerman
Jane M. Karol
Steven E. Karol
John D. Lefler
Dale S. Okonow
Howard H. Stevenson
Choose one of (a) or (b):
(a) FOR all nominees listed.
----
(b) WITHOUT authority to vote for the following nominees listed above:
----
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<PAGE>
- - ---- and FOR the election of the following persons as Directors of the Company:
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2. General
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WITH WITHOUT authority to act upon such other business as may
---- ----
properly come before the Annual Meeting in the discretion of the
Proxies, or either of them.
SIGNATURE
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IF INDIVIDUAL:
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-----------------------------------
Signature of Stockholder
-----------------------------------
Print Name
Date:
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IF ENTITY:
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Name of Stockholder
-----------------------------------
Signature of Authorized Person
-----------------------------------
Print Name
Date:
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