OLYMPIC STEEL INC, DEF 14A, 1997-03-28

OLYMPIC STEEL INC
DEF 14A, 1997-03-28
STEEL WORKS, BLAST FURNACES & ROLLING MILLS (COKE OVENS)

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<PAGE> 1

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SCHEDULE 14A
(RULE 14a)
INFORMATION REQUIRED IN PROXY STATEMENT
SCHEDULE 14A INFORMATION
PROXY STATEMENT PURSUANT TO SECTION 14(a) OF THE SECURITIES
EXCHANGE ACT OF 1934
(AMENDMENT NO. )

Filed by the Registrant [X]

Filed by a Party other than the Registrant [ ]

Check the appropriate box:

<TABLE>
<S> <C>
[ ] Preliminary Proxy Statement [ ] CONFIDENTIAL, FOR USE OF THE COMMISSION
ONLY (AS PERMITTED BY RULE 14a-6(e)(2))
[X] Definitive Proxy Statement
[ ] Definitive Additional Materials
[ ] Soliciting Material Pursuant to sec.240.14a-11(c) or sec.240.14a-12
</TABLE>

OLYMPIC STEEL
(NAME OF REGISTRANT AS SPECIFIED IN ITS CHARTER)

XXXXXXXXXXXXXXXX
(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)(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: .......................................................

[ ] Fee paid previously with preliminary materials.

[ ] Check box if any part of the fee is offset as provided by Exchange Act Rule
0-11(a)(2) and identify the filing for which the offsetting fee was paid
previously. Identify the previous filing by registration statement number,
or the Form or Schedule and the date of its filing.

(1) Amount Previously Paid: ...............................................

(2) Form, Schedule or Registration Statement No.: .........................

(3) Filing Party: .........................................................

(4) Date Filed: ...........................................................

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<PAGE> 2

olympic logo
Olympic Steel, Inc., 5096 Richmond Road, Bedford Heights, OH 44146 (216)
292-3800

To Our Shareholders:

You are invited to attend the 1997 annual meeting of shareholders of Olympic
Steel, Inc. to be held at Olympic Steel, Inc., 5096 Richmond Road, Bedford
Heights, OH 44146, on Thursday, April 24, 1997, at 1:30 p.m. local time. We are
pleased to enclose the notice of our annual meeting of shareholders, together
with a Proxy Statement, a Proxy and an envelope for returning the Proxy.

You are hereby asked to approve the election of Directors and to ratify the
appointment of auditors. Your Board of Directors unanimously recommends that you
vote "FOR" each proposal stated in the Proxy.

Please carefully review the Proxy Statement and then complete and sign your
Proxy and return it promptly. If you attend the meeting and decide to vote in
person, you may withdraw your Proxy at the meeting.

Your time and attention to this letter and the accompanying Proxy Statement and
Proxy is appreciated.

Sincerely,

Michael D. Siegal
Chairman and Chief Executive Officer

March 21, 1997
<PAGE> 3

olympic logo
Olympic Steel, Inc., 5096 Richmond Road, Bedford Heights, OH 44146 (216)
292-3800

NOTICE OF ANNUAL MEETING OF SHAREHOLDERS
TO BE HELD APRIL 24, 1997

The annual meeting of shareholders of Olympic Steel, Inc., an Ohio corporation
(the Company), will be held on Thursday, April 24, 1997 at 1:30 p.m. local time,
at Olympic Steel, Inc., 5096 Richmond Road, Bedford Heights, OH 44146, for the
following purposes:

1. To elect four Directors for a term expiring in 1999.

2. To ratify the appointment of Arthur Andersen LLP as auditors of the Company
for 1997.

3. To transact such other business that is properly brought before the meeting.

Only holders of the Common Shares of record on the books of the Company at the
close of business on March 7, 1997, will be entitled to vote at the meeting.

Your vote is important. All shareholders are invited to attend the meeting in
person. However, to ensure your representation at the meeting, please mark, date
and sign your Proxy and return it promptly in the enclosed envelope. Any
shareholder attending the meeting may vote in person even if the shareholder
returned a Proxy.

By Order of the Board of Directors

R. Louis Schneeberger
Chief Financial Officer

Cleveland, Ohio

March 21, 1997

THE ENCLOSED PROXY, WHICH IS BEING SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS
OF THE COMPANY, CAN BE RETURNED IN THE ENCLOSED ENVELOPE, WHICH REQUIRES NO
POSTAGE IF MAILED IN THE UNITED STATES.
<PAGE> 4

olympic logo
1997 ANNUAL MEETING

April 24, 1997

THE PROXY AND SOLICITATION

This Proxy Statement is being mailed on or about March 28, 1997, to the
shareholders of Olympic Steel, Inc. (the Company) in connection with the
solicitation by the Board of Directors of the enclosed form of Proxy for the
1997 Annual Meeting of Shareholders to be held on April 24, 1997. Pursuant to
the Ohio General Corporation Law, any shareholder signing and returning the
enclosed Proxy has the power to revoke it by giving notice of such revocation to
the Company in writing or in the open meeting before any vote with respect to
the matters set forth therein is taken. The representation in person or by Proxy
or at least a majority of the outstanding shares of Common Stock entitled to
vote is necessary to provide a quorum at the Annual Meeting. The election of
directors and the proposal to ratify the appointment of auditors require
approval only by a plurality of the votes cast. As a result, although
abstentions and broker non-votes will not be counted in determining the outcome
of the vote, they will be counted in determining whether a quorum has been
achieved. The cost of soliciting the Proxy will be borne by the Company.

PURPOSES OF ANNUAL MEETING

The Annual Meeting has been called for the purposes of (1) electing four
(4) Directors of the class whose two-year terms of office will expire in 1999;
(2) ratifying the appointment of Arthur Andersen LLP as auditors of the Company
for 1997 and (3) transacting such other business as may properly come before the
meeting.

The two persons named in the enclosed Proxy have been selected by the Board
of Directors and will vote Common Shares represented by valid Board of
Directors' Proxies. They have indicated that, unless otherwise indicated in the
enclosed Proxy, they intend to vote for the election of the director nominees
named herein and in favor of the proposal listed in Item 2 above.

VOTING SECURITIES

The Board of Directors has fixed the close of business on March 7, 1997, as
the record date for determining shareholders entitled to notice of the meeting
and to vote. On that date, 10,692,000 shares of Common Stock were outstanding
and entitled to one vote on all matters properly brought before the Annual
Meeting.

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<PAGE> 5

PROPOSAL ONE
ELECTION OF DIRECTORS

The Board of Directors is divided into two classes, each of whose members
serve for a staggered two-year term. The Board is comprised of a class of four
directors whose terms expire in 1997 and a class of three directors whose terms
expire in 1998.

The Board of Directors has nominated Michael D. Siegal, David A. Wolfort,
Thomas M. Forman and Janice M. Margheret to stand for reelection as Directors
for a two-year term. The two-year term will end upon the election of Directors
at the 1999 annual meeting of shareholders.

At the annual meeting, the shares of Common Stock represented by valid
Proxies, unless otherwise specified, will be voted to reelect the directors.
Each individual nominated for election as a Director of the Company has agreed
to serve if elected. However, if any nominee becomes unable or unwilling to
serve if elected, the Proxies will be voted for the election of such other
person as may be recommended by the Board of Directors. The Board of Directors
has no reason to believe that the persons listed as nominees will be unable or
unwilling to serve.

The Board of Directors recommends that each shareholder vote "FOR" the
Board of Directors' nominees. Directors will be elected by a plurality of the
votes cast at the annual meeting.

NOMINEES FOR TERMS TO EXPIRE IN 1999

<TABLE>
<CAPTION>
PRINCIPAL OCCUPATION,
PAST FIVE YEARS,
NAME OF DIRECTOR AGE OTHER DIRECTORSHIPS SINCE
- ------------------------- --- ----------------------------------------------- -----
<S> <C> <C> <C>
Michael D. Siegal 44 President and Chief Executive Officer of the 1984
Company since 1984, and Chairman of the Board
since 1994. A member of the Board of Directors
of American National Bank (Cleveland, Ohio) and
the Cleveland Lumberjacks (professional hockey
team).
David A. Wolfort 44 Chief Operating Officer of the Company since 1987
1995. Previously he served as Vice
President -- Commercial of the Company from
1987 to 1995, after having joined the Company
in 1984 as General Manager. A trustee of Health
Hill Hospital for Children.
Thomas M. Forman 51 Vice President of Sealy Corporation (a 1994
manufacturer and distributor of bedding) since
1994. Previously, he served as President of
Forman Capital, Inc. (a Cleveland-based company
providing operational and strategic support to
businesses) from 1991 to 1994. Previously, he
served as Executive Vice President and a member
of the Board of Directors of Bridge-
stone/Firestone, Inc. (a worldwide tire
manufacturer and distributor) for two years and
various senior management positions for seven
years prior thereto.
</TABLE>

2
<PAGE> 6

<TABLE>
<CAPTION>
PRINCIPAL OCCUPATION,
PAST FIVE YEARS,
NAME OF DIRECTOR AGE OTHER DIRECTORSHIPS SINCE
- ------------------------- --- ----------------------------------------------- -----
<S> <C> <C> <C>
Janice M. Margheret 42 Executive Advisor to the Board of Directors of 1994
Pioneer- Standard Electronics, Inc. (a North
American distributor of electronic components
and computer products and services) since 1996.
Previously, she served as Senior Vice President
of Pioneer-Standard Electronics, Inc. from 1993
to 1996 and President of Pioneer- Standard
Canada, Inc. from 1994 to 1996. Prior thereto,
she served as a Vice President and Controller
of Pioneer-Standard for over five years. A
member of the Board of Governors of Employers
Resource Council (a non-profit organization
providing human resource services).
</TABLE>

DIRECTORS WHOSE TERMS EXPIRE IN 1998

BOARD OF DIRECTORS MEETINGS AND COMMITTEES

The Board of Directors of the Company held four meetings in 1996. The Board
of Directors has an Audit Committee, a Compensation Committee, and a Nominating
Committee, each of which consists only of the three non-employee directors of
the Company. The Audit and Compensation Committees each held two meetings and
the Nominating Committee held one meeting in 1996. The Committees receive their
authority and assignments from the Board of Directors and report to the Board of
Directors.

All of the current Directors attended at least 75% of all of the Board and
applicable committee meetings held during 1996. In addition to holding regular
committee meetings, the Board members also reviewed and considered matters and
documents and communicated with each other wholly apart from the meetings.
Several actions were taken by unanimous written consent.

3
<PAGE> 7

The Audit Committee, which is chaired by Ms. Margheret, recommends the
engagement of the Company's independent auditors and is primarily responsible
for approving the services performed by the Company's independent auditors. The
Committee also reviews and evaluates the Company's accounting principles and its
system of internal accounting controls.

The Compensation Committee, which is chaired by Mr. Forman, reviews and
approves the Company's executive compensation policy, makes recommendations
concerning the Company's employee benefit policies, and has authority to
administer the Company's Stock Option Plan.

The Nominating Committee, which is chaired by Mr. Elrad, functions to
advise and make recommendations to the Board concerning the selection of
candidates as nominees for directors, including those individuals recommended by
shareholders. Shareholders wishing to suggest nominees for election to the Board
at the 1998 annual meeting may do so by providing written notice to the Company
in care of Marc H. Morgenstern, Secretary, no later than December 28, 1997.

COMPENSATION OF DIRECTORS

Each Director who is not an employee of the Company receives a director's
fee in the amount of $2,500 per meeting, with a minimum fee of $10,000 per
annum, and reimbursement for out-of-pocket expenses incurred in connection with
attending such meetings. No additional compensation is to be paid for committee
meetings held on the same day as Board meetings. Directors who are also
employees of the Company receive no additional remuneration for serving as
Directors.

SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS

The following table sets forth each person or entity who has beneficial
ownership of 5% or more of the outstanding Common Shares of the Company on March
7, 1997, based upon information furnished to the Company.

<TABLE>
<CAPTION>
NUMBER OF SHARES PERCENTAGE OF
NAMES OF BENEFICIAL OWNERS BENEFICIALLY OWNED OWNERSHIP
- ---------------------------------------------------------- ------------------ -------------
<S> <C> <C>
Michael D. Siegal 1,583,500(1) 14.8%
5096 Richmond Road
Cleveland, OH 44146
Bruce S. Adelstein 1,375,000 12.9%
5096 Richmond Road
Cleveland, OH 44146
Navellier & Associates 951,350 8.9%
1 East Liberty Street, 3rd Floor
Reno, NV 89501
</TABLE>

- ---------------

(1) Does not include 51,000 shares held in various trusts for the benefit of Mr.
Siegal's children. Mr. Siegal disclaims beneficial ownership of such shares.

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<PAGE> 8

SECURITY OWNERSHIP OF MANAGEMENT

The following table sets forth the amount of the Company's Shares of Common
Stock beneficially owned by the Company's Directors, each of the named officers,
and all the Directors and Executive Officers as a group as of March 7, 1997.

<TABLE>
<CAPTION>
NUMBER OF SHARES PERCENTAGE OF
NAMES OF BENEFICIAL OWNERS BENEFICIALLY OWNED OWNERSHIP
- ---------------------------------------------------------- ------------------ -------------
<S> <C> <C>
Michael D. Siegal 1,583,500(1) 14.8%
Bruce S. Adelstein 1,375,000 12.9%
R. Louis Schneeberger 268,100(2) 2.5%
David A. Wolfort 218,000(3) 2.0%
Martin H. Elrad 6,000(4) *
Janice M. Margheret 8,000(4,5) *
Thomas M. Forman 8,000(4) *
All directors and executive officers as a group 3,466,600(6) 32.4%
(7 persons)
</TABLE>

- ---------------

(*) Less than 1%.

(1) Does not include 51,000 shares held in various trusts for the benefit of Mr.
Siegal's children. Mr. Siegal disclaims beneficial ownership of such shares.

(2) Includes 100 shares held by spouse. Does not include 34,000 shares held in
various trusts for the benefit of Mr. Schneeberger's children. Mr.
Schneeberger disclaims beneficial ownership of such shares.

(3) Does not include 48,500 shares held in various trusts for the benefit of Mr.
Wolfort's children. Mr. Wolfort disclaims beneficial ownership of such
shares.

(4) Includes 6,000 shares issuable upon exercise or options exercisable within
sixty days of March 7, 1997.

(5) Includes 2,000 shares held by spouse.

(6) Includes 18,000 shares issuable upon exercise or options exercisable within
sixty days of March 7, 1997.

SECTION 16(A) BENEFICIAL OWNERSHIP REPORTING COMPLIANCE

Section 16(a) of the Securities Act of 1934, as amended, requires the
Company's officers and directors, and persons who own greater than 10% of the
Company's Common Stock, to file reports of ownership and changes in ownership to
the SEC. Officers, directors and more than 10% shareholders are required by the
SEC to furnish to the Company copies of all Section 16(a) reports they file.
Based solely upon a review of Forms 3 and 4 and amendments thereto furnished to
the Company during 1996 and Form 5 and amendments thereto furnished to the
Company with respect to 1996, or a written representation from the reporting
person that no Form 5 is required, all filings required to be made by the
Company's officers, directors and greater than 10% shareholders were timely
made.

5
<PAGE> 9

EXECUTIVE OFFICERS' COMPENSATION

The following table sets forth certain information with respect to the
compensation paid by the Company during the years ended December 31, 1996, 1995,
and 1994 to the Chief Executive Officer and each of the other executive officers
(the "Executive Officers") of the Company:

SUMMARY COMPENSATION TABLE

<TABLE>
<CAPTION>
ANNUAL COMPENSATION
--------------------- ALL OTHER
NAME AND PRINCIPAL POSITION(S) YEAR SALARY BONUS COMPENSATION(1)
- ------------------------------ ---- -------- -------- -------------
<S> <C> <C> <C> <C>
Michael D. Siegal, 1996 $389,550 $399,651 $10,750
Chairman of the Board, 1995 371,000 201,177 10,620
President and Chief Executive 1994 350,000 210,000 10,531
Officer
Bruce S. Adelstein, 1996 $278,250 $399,651 $10,750
Vice President -- Operations 1995 265,000 201,177 10,620
1994 250,000 150,000 10,531
R. Louis Schneeberger, 1996 $278,250 $399,651 $10,750
Chief Financial Officer 1995 265,000 201,177 10,620
1994 250,000 150,000 10,531
David A. Wolfort, 1996 $278,250 $399,651 $10,750
Chief Operating Officer 1995 265,000 201,177 10,620
1994 250,000 150,000 10,531
</TABLE>

- ---------------

(1) "All Other Compensation" includes (i) contributions to the Company's 401(k)
plan to match pre-tax elective deferral contributions and (ii) amounts paid
under the Company's discretionary profit-sharing plan. Each of the Executive
Officers was credited with $4,750 and $6,000 in 1996, under the 401(k) plan
and profit-sharing plan, respectively.

EMPLOYEE BENEFIT PLANS

Incentive Bonus Plans. Each of the Executive Officers participates in the
Executive Bonus Program that provides for an annual bonus in an amount equal to
one and one-half percent (1.5%) of the Company's net income before taxes and any
incentive bonuses (Bonus Net Income). In 1996 and 1995, there was no individual
maximum. In 1994, the maximum bonus to any of the Executive Officers was 60.0%
of base salary. Bonus payments to the Executive Officers are shown in the
Summary Compensation Table.

Stock Option Plan. The Stock Option Plan (Option Plan) was adopted by the
Board of Directors and approved by the shareholders of the Company in January
1994. Pursuant to the provisions of the Option Plan, key employees of the
Company, non-employee directors of the Company and consultants may be offered
the opportunity to acquire shares of Common Stock by the grant of stock options
including both incentive stock options (ISOs), within the meaning of Section 422
of the Internal Revenue Code of 1986, as amended, and nonqualified stock
options. ISOs are not available to non-employee directors or consultants. A
total of 450,000 shares of Common Stock has been reserved for options under the
Option Plan and 152,500 options were granted with

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<PAGE> 10

144,500 options remaining outstanding as of December 31, 1996. None of the
Executive Officers have received options under the Option Plan. The Option Plan
will terminate in January 2004; however, termination of the Option Plan will not
affect outstanding options. The Compensation Committee of the Board of Directors
administers the Option Plan. The Committee has broad discretion to set the terms
and conditions of the options, provided that no option may be exercisable more
than ten years after the date of grant.

RELATED TRANSACTIONS
AND COMPENSATION COMMITTEE INTERLOCKS

A partnership owned by family members of Messrs. Siegal and Adelstein owns
one of the Cleveland facilities and leases it to the Company on a triple-net
basis at an annual rent of $195,300. The lease expires in June 2000, subject to
two ten-year renewal options. A corporation owned by family members of Messrs.
Siegal and Adelstein provides freight services to the Company. Payments to this
entity were approximately $3.1 million in 1996. The Company believes these
transactions are on terms no less favorable to the Company than could be
obtained from unrelated parties.

COMPENSATION COMMITTEE REPORT
ON EXECUTIVE COMPENSATION

The Compensation Committee of the Board of Directors is responsible for
setting and administering the policies that govern the base salaries, bonuses
and other compensation matters of the four executive officers of the Company.
The Committee consists entirely of non-employee directors of the Company. The
Committee meets twice annually to review the compensation program for the
executive officers of the Company. This report documents the basis of
compensation for 1996, with regard to the Company's four executive officers,
Michael D. Siegal, Chairman and Chief Executive Officer; R. Louis Schneeberger,
Chief Financial Officer; David A. Wolfort, Chief Operating Officer; and Bruce S.
Adelstein, Vice President -- Operations.

Compensation Policy. The executive compensation policy of the Company is
based on the following philosophy: (i) the need to retain and, as necessary,
attract highly qualified executives with a compensation plan that is competitive
with both public and privately held steel and steel-related companies; (ii)
emphasizing variable, performance-based compensation tied to the overall
profitability of the Company; (iii) creating a system that would not be overly
complicated or conflict with the bonus system used at the general manager level;
and (iv) devising a compensation program that appropriately aligns the interests
of executive officers with those of the Company's shareholders in increasing
shareholder value.

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<PAGE> 11

Base Salaries. The annual base salary of the executive officers is based
upon an evaluation of their significant contributions as individuals and as a
team, as subjectively determined by the Compensation Committee. The Committee
reviewed the cash compensation of numerous senior executives in positions in
other steel and steel-related companies to determine the range of the base
salaries. Base salaries for 1996 were reviewed and approved by the Compensation
Committee, and the amounts paid are included in the Summary Compensation Table.

Incentive Bonus Compensation. A significant portion of the executive
officers' compensation is incentive bonus-based and tied to the overall
profitability of the Company. Future compensation for the executive officers is
expected to include incentive bonuses, which provides long-term incentive to
maximize the profitability of the Company. The Committee believes that such a
plan further aligns the interests of management and shareholders. The
Compensation Committee reviewed the Company's annual budget to determine the
gross cash compensation that would result if the budget is attained. The 1996
bonus compensation was determined by the provisions of the Incentive Bonus Plan
described under the section "Employee Benefit Plans."

Chief Executive Officer Compensation. The Chief Executive Officer
participates in the same compensation plan provided to the other executive
officers of the Company. The base salary for the Chief Executive Officer,
Michael D. Siegal, was based upon the Compensation Committee's subjective
evaluation of his performance, considering his years of experience,
contributions and accomplishments, including the continued growth of the Company
and his commitment to increasing shareholder value. The Compensation Committee
also considered the base compensation packages of other chief executive officers
for comparable companies. Consistent with the philosophy of the Incentive Bonus
Compensation Plan, the overall profitability of the Company is a primary
variable in determining the total compensation paid to the Chief Executive
Officer. Mr. Siegal owns a significant number of shares of the Company, which
provides additional long-term incentive for maximizing shareholder value.

Long-term Objectives. The Committee is investigating a long-term incentive
program for the executive officers. Currently, such officers do not participate
in the Stock Option Plan of the Company.

Thomas M. Forman, Chairman
Martin H. Elrad
Janice M. Margheret

8
<PAGE> 12

SHAREHOLDER RETURN PERFORMANCE PRESENTATION

Set forth below is a line graph comparing the cumulative total shareholder
return on the Company's Common Shares against the cumulative total return of the
Nasdaq U.S. composite index and an index to a peer group from the date of the
Company's initial public offering in March 1994 through December 1996.

The stock price performance graph below shall not be deemed incorporated by
reference by any general statement incorporating by reference this proxy
statement into any filing under the Securities Act of 1933 or under the
Securities Exchange Act of 1934, except to the extent that the Company
specifically incorporates this information by reference and shall not otherwise
be deemed filed under such Acts.

COMPARISON OF CUMULATIVE TOTAL RETURNS

Olympic Steel, Inc., Peer Group Index and Nasdaq U.S. Index
From March 10, 1994 through December 31, 1996

<TABLE>
<CAPTION>
Measurement Period Olympic Steel, Peer Group In- Nasdaq U.S.
(Fiscal Year Covered) Inc. dex Index
<S> <C> <C> <C>
3/10/94 100.00 100.00 100.00
12/31/94 67.74 84.95 96.18
12/31/95 56.45 108.22 136.00
12/31/96 163.71 119.57 167.29
</TABLE>

- ---------------
(1) The companies selected to form the peer group index are A.M. Castle & Co.,
Gibraltar Steel Corporation, Huntco Inc., Shiloh Industries, Inc., Steel
Technologies Inc., and Worthington Industries, Inc.

9
<PAGE> 13

PROPOSAL TWO
INDEPENDENT AUDITORS

The Board of Directors, upon the recommendation of the Audit Committee, has
selected Arthur Andersen LLP as auditors for 1997. The Board of Directors
requests the ratification of the appointment of Arthur Andersen LLP by the
shareholders at the annual meeting. The Board of Directors recommends that each
shareholder vote "FOR" ratification of Arthur Andersen LLP as auditors for 1997.

Arthur Andersen LLP has audited the Company's financial statements for each
year since 1987. Representatives of Arthur Andersen LLP are expected to be
present at the meeting with the opportunity to make a statement if they desire
to do so, and are expected to be available to respond to appropriate questions.

OTHER MATTERS

The Board of Directors of the Company is not aware that any matter other
than those listed in the Notice of Meeting is to be presented for action at the
meeting. If any of the Board's nominees is unavailable for election as a
Director or any other matter should properly come before the meeting, it is
intended that votes will be cast pursuant to the Proxy in respect thereto in
accordance with the best judgment of the person or persons acting as proxies.

PROXY SOLICITATION

The Company will bear the expense of preparing, printing and mailing this
Proxy Statement. In addition to solicitation by mail, officers and regular
employees of the Company may solicit by telephone the return of Proxies. The
Company will request brokers, banks and other custodians, nominees and
fiduciaries to send Proxy material to beneficial owners and will, upon request,
reimburse them for their expense.

SHAREHOLDERS' PROPOSALS

The deadline for shareholders to submit proposals to be considered for
inclusion in the Proxy Statement for the 1998 Annual Meeting of Shareholders is
expected to be November 28, 1997.

ANNUAL REPORT

The Company's Annual Report for the year ended December 31, 1996, including
financial statements of the Company and the report thereon of Arthur Andersen
LLP, is being mailed to shareholders with this Notice of the Annual Meeting and
Proxy Statement.

R. LOUIS SCHNEEBERGER
Chief Financial Officer

By Order of the Board of Directors
March 21, 1997

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<PAGE> 14
OLYMPIC STEEL, INC.
THIS PROXY IS SOLICITED BY THE BOARD OF DIRECTORS

At the Annual Meeting of Shareholders of the Company to be held on April 24,
1997, and at any adjournment, Michael D. Siegal and R. Louis Schneeberger, or
either one of them, is hereby authorized to represent me and to vote my shares
on the following:

(Continued, and to be signed, on the other side)

FOLD AND DETACH HERE

<PAGE> 15

<TABLE>
<S> <C> <C>
Please mark [X]
your votes as
indicated in
this example

1. Election of Directors. Term expiring in 1999: Michael D. Siegal, David A. Wolfort, Thomas M Forman,
Janice M. Margheret
FOR all WITHHOLD
nominees AUTHORITY (INSTRUCTIONS: To withhold authority to vote for a nominee, mark through
listed for All the nominee's name.
(except other- nominees
wise marked)
[ ] [ ] Shares represented by properly
executed proxies will be voted
2. Ratification of the appointment of Arthur 3. In accordance with their best judgment, as specified. Unless otherwise
Andersen LLP as auditors. upon any other matters which may properly specified, this Proxy will be
come before the meeting. voted FOR the election of
FOR AGAINST ABSTAIN Directors as set forth in Item 1
[ ] [ ] [ ] and FOR the proposal identified
in Item 2 above.

Signed on this_____ day of ______, 1997
_______________________________________
------- _______________________________________
Please give title when signing as executor,
| administrator, trustee, attorney or other
representative. If shares are registered
in the name of joint tenants or trustees,
each joint tenant or trustee should sign.

PLEASE DATE AND SIGN EXACTLY AS THE NAMES
APPEAR ON THE FACE OF THE PROXY AND RETURN
BY MAILING PROMPTLY IN THE ENCLOSED
ENVELOPE, WHICH REQUIRES NO POSTAGE.

THIS PROXY IS BEING SOLICITED BY THE BOARD
OF DIRECTORS. PLEASE COMPLETE, SIGN AND
RETURN PROMPTLY.

___________________________________________________
| "PLEASE MARK INSIDE BOXES SO THAT DATA |
| PROCESSING EQUIPMENT WILL RECORD YOUR VOTES" |
----------------------------------------------------

- -----------------------------------------------------------------------------------------------------------------------------------
FOLD AND DETACH HERES
</TABLE>