-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: webmaster@www.sec.gov Originator-Key-Asymmetric: MFgwCgYEVQgBAQICAf8DSgAwRwJAW2sNKK9AVtBzYZmr6aGjlWyK3XmZv3dTINen TWSM7vrzLADbmYQaionwg5sDW3P6oaM5D3tdezXMm7z1T+B+twIDAQAB MIC-Info: RSA-MD5,RSA, HW0SK9aNwH8fFKFZ1/zjLNTwqJPd1mdshkoPxlYU+nZk7w34W3C3hnCpF5xQvF9+ 0QuLH/5ZimXjegcLmGPuXQ== 0000905722-98-000004.txt : 19980413 0000905722-98-000004.hdr.sgml : 19980413 ACCESSION NUMBER: 0000905722-98-000004 CONFORMED SUBMISSION TYPE: DEF 14A PUBLIC DOCUMENT COUNT: 1 CONFORMED PERIOD OF REPORT: 19980507 FILED AS OF DATE: 19980410 SROS: NYSE FILER: COMPANY DATA: COMPANY CONFORMED NAME: HUNTCO INC CENTRAL INDEX KEY: 0000905722 STANDARD INDUSTRIAL CLASSIFICATION: STEEL WORKS, BLAST FURNACES ROLLING MILLS (COKE OVENS) [3312] IRS NUMBER: 431643751 STATE OF INCORPORATION: MO FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: DEF 14A SEC ACT: SEC FILE NUMBER: 001-13600 FILM NUMBER: 98591619 BUSINESS ADDRESS: STREET 1: 14323 SOUTH OUTER FORTY STREET 2: STE 600 N CITY: TOWN & COUNTRY STATE: MO ZIP: 63017 BUSINESS PHONE: 3148780155 MAIL ADDRESS: STREET 1: 14323 S OUTER FORTY STREET 2: STE 600N CITY: TOWN & COUNTRY STATE: MO ZIP: 63017 DEF 14A 1 DEFINITIVE PROXY MATERIALS OF HUNTCO INC. 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:_________________________________________________________ HUNTCO INC. NOTICE OF ANNUAL MEETING OF SHAREHOLDERS TO BE HELD MAY 7, 1998 To the Shareholders: The Annual Meeting of Shareholders of Huntco Inc. (the "Company"), a Missouri corporation, will be held at Forest Hills Country Club, located at 36 Forest Club Drive, Chesterfield, Missouri 63005, on Thursday, May 7, 1998, at 10:00 a.m., local time, for the following purposes: 1. To elect two directors; and 2. To transact such other business as may properly come before the meeting and all adjournments thereof. The Board of Directors has fixed the close of business on March 16, 1998 as the record date for the determination of the shareholders entitled to notice of, and to vote at, the Annual Meeting and all adjournments thereof. By order of the Board of Directors /s/ Anthony J. Verkruyse ANTHONY J. VERKRUYSE Vice President, Secretary & Treasurer April 9, 1998 Even if you expect to attend the meeting in person, please mark, date and sign the enclosed proxy and return it in the enclosed return envelope, which does not require postage if mailed in the United States. Shareholders who attend the meeting may revoke their proxies and vote in person if they desire. HUNTCO INC. PROXY STATEMENT ANNUAL MEETING OF SHAREHOLDERS On October 23, 1997, the Company's Board of Directors (the "Board") decided that it would be in the Company's best interests to change its fiscal year end from April 30 to December 31 beginning with the year ended December 31, 1997. This decision resulted in a transition year comprised of eight months. The term "Transition 1997" used in this Proxy Statement refers to the period commencing May 1, 1997 through December 31, 1997. The term "Fiscal 1997" refers to the period from May 1, 1996 through April 30, 1997. In connection with changing the fiscal year end to December 31, the Board also amended the Company's Bylaws to change the date of the Annual Meeting of Shareholders from the second Thursday in September of each year to the first Thursday in May of each year. The enclosed proxy is solicited on behalf of the Board of Directors of Huntco Inc. (the "Company") for use at the Annual Meeting of its shareholders (the "Annual Meeting") to be held May 7, 1998 at 10:00 a.m. local time at Forest Hills Country Club, located at 36 Forest Club Drive, Chesterfield, Missouri 63005. If the proxy is executed and returned to the Company, it nevertheless may be revoked at any time before it is exercised either by written notice to the Secretary of the Company or by attending the meeting and voting in person. If no contrary instructions are indicated on the proxy, the proxy will be voted FOR the election of the two nominees named herein as directors. If matters other than the election of directors properly come before the Annual Meeting, the proxy will be voted by the persons named therein in a manner which they consider to be in the best interests of the Company. The Company's principal executive offices are located at 14323 South Outer Forty, Suite 600 N., Town & Country, Missouri 63017. This Proxy Statement and the accompanying form of proxy are first being sent to shareholders on or about April 9, 1998. VOTING, VOTING SECURITIES AND PRINCIPAL HOLDERS THEREOF ------------------------------------------------------- GENERAL Only the holders of record of the Company's Class A Common Stock, $.01 par value per share (the "Class A Shares") and of the Company's Class B Common Stock, par value $.01 per share (the "Class B Shares") (collectively the "Common Stock"), as of the close of business on March 16, 1998, will be entitled to notice of, and to vote, either in person or by proxy, at the Annual Meeting and all adjournments thereof. At the close of business on March 16, 1998, 5,292,000 and 3,650,000 Class A Shares and Class B Shares, respectively, were issued and outstanding. Each Class A Share is entitled to one vote per share, and each Class B Share is entitled to ten votes per share, on all matters to be submitted to the vote of the shareholders. Therefore, the holders of Class A Shares and the Class B Shares are entitled to 5,292,000 and 36,500,000 votes, respectively. The Class A Shares and the Class B Shares will vote as a single class with respect to the election of directors. A majority of the aggregate of the outstanding Class A Shares and the Class B Shares which are present in person or represented by proxy and entitled to vote will constitute a quorum for the transaction of business at the Annual Meeting. Shares represented by proxies or ballots which are marked to "withhold authority" with respect to the election of any one or more nominees for election as directors will be counted for purposes of determining the presence or absence of a quorum for the transaction of business at the Annual Meeting. Because the form of proxy states how shares will be voted in the absence of instructions by the shareholder, executed proxies bearing no instructions will be counted as present for quorum purposes. Under the law of Missouri, the state in which the Company is incorporated, the affirmative vote of a majority of the aggregate number of votes represented by the Class A Shares and the Class B Shares which are present in person or represented by proxy at a meeting at which a quorum is present is required to elect directors. Because a director must receive a majority of the votes cast to be elected, even if such director otherwise received a plurality, proxies or ballots marked to "withhold authority" in the election of directors have the same effect as a vote against such nominee or nominees. As a practical matter, the act of withholding a vote for one or more of the Board's nominees, or the act of writing in the name of one or more other candidates for election to the Board, will have no effect in the election of directors. Huntco Acquisitions Holding, Inc. ("Acquisitions") and Huntco Farms, Inc. ("Farms"), both of which are owned and controlled by the Company's Chairman of the Board and Chief Executive Officer and which collectively control 87.4% of the total Company vote by virtue of their ownership of all of the Company's issued and outstanding Class B Shares, have indicated their intent to vote for the Board of Directors' slate of nominees. HOLDINGS OF MANAGEMENT AND PRINCIPAL SHAREHOLDERS The table below indicates certain information as of March 16, 1998 regarding the beneficial ownership of the Class A Shares and the Class B Shares by (i) each director of the Company, including the nominees for election as directors, (ii) each executive officer named in the Summary Compensation Table, including the Company's Chairman of the Board and Chief Executive Officer, (iii) companies owned and controlled by the Company's Chairman of the Board and Chief Executive Officer, and (iv) all executive officers and directors of the Company as a group.
Number of Number of Percent of Total Class A Class B ----------------- Percent of Total Name Shares Shares Class A Class B Voting Power - ---- ------ ------ ------- ------- ---------------- B.D. Hunter 44,500 3,650,000 100.0% 87.4% Huntco Acquisitions Holding, Inc. - 3,145,000 - 86.2% 75.3% Huntco Farms, Inc. - 505,000 - 13.8% 12.1% Robert J. Marischen 203,808 - 3.8% - Terry J. Heinz 177,264 - 3.3% - Donald E. Brandt 4,410 - - James J. Gavin, Jr. 73,000 - 1.4% - Michael M. McCarthy 60,500 - 1.1% - All executive officers and directors as a group (6 persons) 526,482 3,650,000 9.4% 100.0% 87.9% The percent of ownership of Class A Shares and Class B Shares has been calculated in accordance with the rules promulgated by the Securities and Exchange Commission (the "SEC"). The numerator is comprised of the number of Class A Shares or Class B Shares, as appropriate, owned by the individual or entity (including, with respect to the Class A Shares, the number of Class A Shares issuable upon exercise of stock options granted under the Huntco Inc. 1993 Incentive Stock Plan (the "1993 Plan") which are currently exercisable or which will become exercisable within sixty days of March 16, 1998). The denominator is comprised of the number of shares represented by all of the issued and outstanding shares of that class (including, with respect to the Class A Shares, the number of Class A Shares issuable upon exercise of stock options granted under the 1993 Plan which are currently exercisable or will be exercisable within sixty days of March 16, 1998, awarded to such individual, but excluding the number of Class A Shares issuable upon exercise of options granted to any other individual). The percent of total voting power has also been calculated in accordance with the rules promulgated by the SEC. The numerator is comprised of the number of votes appertaining to each share of Common Stock owned by the individual or entity (plus the number of votes represented by the Class A Shares issuable upon exercise of stock options granted under the 1993 Plan which are currently exercisable or which will become exercisable within sixty days of March 16, 1998). The denominator is comprised of the number of votes represented by all of the issued and outstanding shares of Common Stock plus the number of votes represented by the Class A Shares issuable upon exercise of stock options granted under the 1993 Plan which are currently exercisable or which will become exercisable within sixty days of March 16, 1998) awarded to such individual, but excluding the votes represented by the Class A Shares issuable upon exercise of options granted to any other individual. Mr. B. D. Hunter, the Company's Chairman of the Board and Chief Executive Officer, owns all of the outstanding preferred stock of Huntco Enterprises, Inc. ("Huntco Enterprises"), which, in conjunction with the shares of common stock over which he shares voting control as trustee of various Trusts (as defined below), gives him substantially all of the voting control of that entity. Huntco Enterprises is the ultimate parent company of Farms and Acquisitions. Substantially all of the remaining shares of Farms and Acquisitions are owned by other persons or trusts with whom Mr. Hunter is affiliated. Therefore, Mr. Hunter has or shares voting control with respect to substantially all of the Class B Shares owned by Acquisitions and Farms. The business addresses of Mr. Hunter, Farms and Acquisitions is 14323 S. Outer Forty, Suite 600 N., Town & Country, Missouri 63017. 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. Sole voting and investment power over 7,500 Class A Shares which includes 2,500 Class A Shares issuable upon exercise of stock options granted under the 1993 Plan. Does not include 67,500 Class A Shares underlying stock options granted under the 1993 Plan which are not currently exercisable. Shared voting and investment power over 37,000 Class A Shares owned by a corporation of which Mr. Hunter is the owner of 49% of the issued and outstanding voting capital stock and of which Mr. Marischen is the owner of 51% of the issued and outstanding voting capital stock. Due to the nature of the professional relationship between Messrs. Hunter and Marischen, these 37,000 Class A Shares are deemed to be owned by each of them. Less than 1%. Sole voting and investment power over 162,644 Class A Shares which includes 152,500 Class A Shares issuable upon exercise of stock options granted to Mr. Marischen under the 1993 Plan. Does not include 67,500 Class A Shares underlying stock options granted under the 1993 Plan which are not currently exercisable. Shared voting and investment power over 37,411 Class A Shares. Of these Class A Shares, 37,000 are the Class A Shares owned by the company which is owned by Messrs. Marischen and Hunter described with more particularity in Note 5 above. The remaining 411 Class A Shares over which Mr. Marischen is deemed to share voting and investment power are held in Mr. Marischen's spouse's IRA. Mr. Marischen maintains 3,753 Class A Shares in his account in the Huntco Inc. 401(k) Retirement Savings Plan (the "Retirement Savings Plan"). Mr. Marischen and two other Company employees are co-trustees of a trust (the "401(k) Trust") established for the purpose of holding and investing assets of the Retirement Savings Plan. The trustees make voting decisions with respect to the Class A Shares held by the 401(k) Trust. Therefore, Mr. Marischen has shared voting power over a total of 28,914 Class A Shares owned by the 401(k) Trust, although he disclaims beneficial ownership of the Class A Shares owned by that trust except for the 3,753 Class A Shares allocated to his account in the Retirement Savings Plan noted above. Sole voting and investment power over 155,690 Class A Shares which includes 152,500 Class A Shares issuable upon exercise of options granted to Mr. Heinz under the 1993 Plan. No voting power over 1,574 Class A Shares allocated to Mr. Heinz's account in the Retirement Savings Plan. Does not include 67,500 Class A Shares underlying stock options granted under the 1993 Plan which are not currently exercisable. Shared voting and investment power over 20,000 Class A Shares held in a general partnership of which Mr. Heinz has a one-third interest. Sole voting and investment power over 4,410 Class A Shares which includes 2,000 Class A Shares issuable upon exercise of stock options granted to Mr. Brandt under the 1993 Plan. Does not include 6,000 Class A Shares underlying stock options granted under the 1993 Plan which are not currently exercisable. Sole voting and investment power over 73,000 Class A Shares which includes 2,000 Class A Shares issuable upon exercise of stock options granted to Mr. Gavin under the 1993 Plan. Includes 10,000 Class A Shares held by a charitable foundation of which Mr. Gavin is President, but with respect to which Class A Shares Mr. Gavin disclaims beneficial ownership. Does not include 6,000 Class A Shares underlying stock options granted under the 1993 Plan which are not currently exercisable. Sole voting and investment power over 9,000 Class A Shares which includes 2,000 Class A Shares issuable upon exercise of stock options granted to Mr. McCarthy under the 1993 Plan. Does not include 6,000 Class A Shares underlying stock options granted under the 1993 Plan which are not currently exercisable. Mr. McCarthy disclaims beneficial ownership of 51,500 Class A Shares owned by companies with which he is affiliated. Messrs. Hunter and Marischen have voting and investment control over all of the Class B Shares owned by Acquisitions and Farms. Includes 313,500 Class A Shares issuable upon exercise of options granted to directors and executive officers under the 1993 Plan.
The following table sets forth information as of March 16, 1998 regarding all persons known to be the beneficial owners of more than five percent of the Company's Class A Shares who are not connected with the Company otherwise than through ownership of the Class A Shares.
Percent of Number of Class A Shares Name and Address Class A Shares Outstanding ---------------- -------------- ----------- The Crabbe Huson Group, Inc. 121 SW Morrison, Suite 1400 Portland, Oregon 97204 2,308,800 43.6% The Crabbe Huson Special Fund, Inc. 121 SW Morrison, Suite 1400 Portland, Oregon 97204 291,300 5.5% Dimensional Fund Advisors, Inc. 1299 Ocean Avenue, 11th Floor Santa Monica, California 90401 366,100 6.9% The information in this footnote is provided pursuant to Amendment No. 5 to Schedule 13G dated January 9, 1998 and filed with the SEC by The Crabbe Huson Group, Inc., which reports that it is an investment advisor registered under the Investment Advisors Act. The Crabbe Huson Group, Inc. reports shared voting and investment power over the Class A Shares deemed beneficially owned by it. The information in this footnote is provided pursuant to Schedule 13G dated January 9, 1998 and filed with the SEC by the Crabbe Huson Special Fund Inc., which reports that it is an Investment Company registered under the Investment Company Act. The Crabbe Huson Special Fund, Inc. reports shared voting and investment power over the Class A Shares deemed beneficially owned by it. The information set forth in the table opposite the reference to Dimensional Fund Advisors, Inc. and in the next two sentences was prepared by such reporting person and furnished to the Company on February 6, 1998. Dimensional Fund Advisors Inc. ("Dimensional"), a registered investment advisor, is deemed to have beneficial ownership of 366,100 shares of Huntco Inc. Class A common stock as of December 31, 1997, all of which shares are held in portfolios of DFA Investment Dimensions Group, Inc., a registered open-end investment company, or in series of the DFA Investment Trust Company, a Delaware business trust, or the DFA Group Trust and DFA Participation Group Trust, investment vehicles for qualified employee benefit plans, all of which Dimensional Fund Advisors Inc. serves as investment manager. Dimensional disclaims beneficial ownership of all such shares.
PROPOSAL 1: ELECTION OF DIRECTORS ---------------------------------- NOMINEES FOR DIRECTORS The Company's Restated Articles of Incorporation and the Bylaws as amended provide for a classified Board of Directors, with the Board divided into three classes whose terms expire at different times. The Company presently has six directors. Two members are to be elected to the Board of Directors at the 1998 Annual Meeting, each to serve for a term of three years. Both of the nominees comprising the Board of Directors' slate of nominees at the Annual Meeting, Messrs. James J. Gavin, Jr. and Terry J. Heinz, are currently directors of the Company. The persons named in the enclosed form of proxy intend to vote such proxy for the election of Messrs. Gavin and Heinz as directors of the Company, unless the shareholder indicates on the form of proxy that the vote should be withheld or contrary directions are indicated. If the proxy card is signed and returned without any direction given, shares will be voted for the election of Messrs. Gavin and Heinz. The Board of Directors has no reason to doubt the availability of either of the nominees and both have indicated their willingness to serve if so elected. If either or both the nominees shall decline or are unable to serve, it is intended that, in the discretion of the Board of Directors, either the size of the Board will be reduced or the proxies will vote for a substitute nominee or nominees designated by the Board of Directors.
INFORMATION AS OF MARCH 1, 1998 REGARDING THE NOMINEES FOR DIRECTORS TO BE ELECTED IN 1998 FOR TERMS ENDING IN 2001 ---------------------------------------------- Present Term Name Age Expires Business Experience ---- --- ------- ------------------------------------------ James J. Gavin, Jr. 75 1998 Director of the Company since May 1993. Retired; Vice Chairman and Director of Borg-Warner Corporation, a publicly-held, diversified manufacturing company, from 1985 until his retirement in 1987; Senior Vice President of Finance of Borg-Warner prior to 1985. Director of Service Corporation International. Terry J. Heinz 46 1998 President, Chief Operating Officer and Director of the Company since May 1993. INFORMATION AS OF MARCH 1, 1998 REGARDING THE DIRECTORS WHO ARE NOT NOMINEES FOR ELECTION AND WHOSE TERMS CONTINUE BEYOND 1998 ------------------------------------------------- Present Term Name Age Expires Business Experience ---- --- ------- ------------------------------------------ B.D. Hunter 68 1999 Chairman of the Board and Chief Executive Officer of the Company since May 1993. Chairman of the Board of Huntco Enterprises and of Acquisitions and Farms since 1986. Director of Service Corporation International, Cash America International, Inc., Celebrity, Inc., and Mercantile Bank National Association. Director of Mark Twain Bancshares, Inc., until April 25, 1997. Robert J. Marischen 45 1999 Vice Chairman of the Board and Chief Financial Officer of the Company since May 1993. President, Chief Executive Officer and Director of Huntco Enterprises, Acquisitions and Farms since 1986. Member of the Board of Governors of Cardinal Glennon Children's Hospital. Donald E. Brandt 43 2000 Director of the Company since May 1993. Senior Vice President-Finance of Ameren Corporation, a public utility holding company since January 1998. Senior Vice President-Finance and Corporate Services of Union Electric Company from July 1993 to January 1998; Senior Vice President-Finance and Accounting of Union Electric Company for the five year period prior thereto. Chairman of the Board of St. Louis Equity Fund, Inc.; Trustee of Maryville University; Director of The Arch Fund, Inc., and President of the Board of Governors of Cardinal Glennon Children's Hospital. Michael M. McCarthy 59 2000 Director of the Company since May 1993. Chairman of the Board and Chief Executive Officer of McCarthy Building Companies, a large, privately-owned commercial construction company, since 1977; Chairman and Chief Executive Officer of McCarthy Brothers Company since 1976. Director of Mark Twain Bancshares, Inc. until April 25, 1997. Director of Mercantile Bank National Association. Member of Audit Committee Member of Compensation Committee Member of Executive Committee
COMMITTEES AND MEETINGS OF THE BOARD OF DIRECTORS The business of the Company is under the general management of the Board of Directors (the "Board") as provided by the laws of Missouri, the state of incorporation. The Board of Directors held three meetings during Transition 1997, and acted by unanimous written consent on one occasion. It is anticipated that in future years the Board will meet at least quarterly. Standing committees of the Board of Directors are the Executive Committee, the Audit Committee, and the Compensation Committee. Between Board meetings, Board responsibilities are delegated to the Executive Committee, comprised of three Board members. The Executive Committee did not hold any formal meetings during Transition 1997, but acted by unanimous written consent on two occasions during that period. The Audit Committee is comprised entirely of all of the Company's non-employee directors. The function of the Audit Committee is to: (i) assist in the selection of independent auditors; (ii) direct and supervise investigations into matters relating to audit functions; (iii) review with independent auditors the plans and results of the audit engagement; (iv) review the degree of independence of the auditors; (v) consider the range of audit and non-audit fees; and (vi) review the adequacy of the Company's system of internal accounting controls. During Transition 1997, the Audit Committee held two meetings. The Compensation Committee, comprised entirely of the Company's three non- employee directors, is responsible for reviewing and approving salaries, annual incentive compensation for the executive officers and certain other officers and employees of the Company and for administering and making awards under the 1993 Plan. During Transition 1997, the Compensation Committee met once. The entire Board serves in the capacity of a nominating committee. The Board will accept recommendations for nominations as directors from shareholders. Shareholders wishing to propose such nominees for consideration should write to Mr. B.D. Hunter, the Company's Chairman of the Board and Chief Executive Officer, at the principal executive office of the Company. During Transition 1997, other than Mr. Gavin who was absent from the December 4, 1997 meetings of the Board, the Audit Committee and the Compensation Committee due to a previous commitment, all of the directors of the Company attended 100% of the aggregate of the meetings of the Board and the committees of the Board on which each served. DIRECTORS' FEES Messrs. Hunter, Marischen and Heinz, as employees of the Company, receive neither retainers nor fees for attendance at Board or Board committee meetings. Messrs. Brandt, Gavin and McCarthy each receives $1,000 for every Board meeting they attend and $500 each for attendance at every meeting of those committees of the Board on which they serve. In addition, Mr. Gavin is paid $2,500 quarterly for serving on the Executive Committee. During Transition 1997, each of Messrs. Brandt, Gavin and McCarthy were awarded non- qualified stock options to acquire 3,000 Class A Shares at $13.50 per share, which stock options shall expire five years from the date of grant and vest in twenty-five percent increments on each anniversary of the date of grant, with the first increment vesting December 4, 1998. In order to further compensate the non-employee directors for their service to the Company, each of Messrs. Brandt, Gavin and McCarthy received grants of non-qualified stock options to acquire 3,000 Class A Shares at $13.50 per share, to replace the non-qualified stock option grants made to the directors on April 4, 1996, which were priced at $19.50 per share. These new options fully vest eighteen months from the date of grant of December 4, 1997, and are set to expire on December 3, 2000. RECOMMENDATION OF THE BOARD OF DIRECTORS ---------------------------------------- Acquisitions and Farms have expressed their intent to vote for Proposal 1, the election of the Board of Directors' slate of nominees. The Board recommends that the holders of the Class A Shares also vote "FOR" the Board's slate of nominees. REPORT OF THE COMPENSATION COMMITTEE ON EXECUTIVE COMPENSATION ------------------------- The Company's executive compensation program is administered by the Compensation Committee (the "Committee") of the Board of Directors. The Committee is a committee of outside directors, chaired by Mr. Michael M. McCarthy. Other members of the Committee are Mr. Donald E. Brandt and Mr. James J. Gavin, Jr. The Committee has the ultimate responsibility for aligning the Company's compensation programs with its business strategy and for assuring shareholders that pay delivery programs are effective, responsible and competitive when compared to similarly situated organizations. In that regard, the Committee is responsible for reviewing and approving salaries and annual incentive compensation of the Company's executive officers. This report documents the basis upon which compensation decisions were made for remuneration paid during calendar 1997 with respect to Mr. B.D. Hunter, the Company's Chief Executive Officer, and to its only other executive officers, Messrs. Marischen and Heinz. For a public company, the ranks of the Company's executive officers is small. Accordingly and of necessity, these three individuals work together closely and their respective importance to the Company is virtually indistinguishable. Therefore, the compensation rationale discussion that follows applies to each of them equally. COMPENSATION PHILOSOPHY AND OBJECTIVES OF EXECUTIVE COMPENSATION PROGRAMS It is the philosophy of the Company and the Committee that all compensation programs provide a direct link between the performance of the Company and the compensation of its executive officers. Consistent with this philosophy, all of the executive officer compensation and benefit plans have been designed to motivate, reward and retain the broad-based management talent required to achieve corporate objectives and increase shareholder value. Toward this end, the Company has designed and implemented a compensation program for its executive officers which, in addition to base salary, focuses strongly on annual incentive compensation with bonus awards tied closely to the attainment of specified financial targets. The Committee also utilizes stock options as an integral component of its executive compensation program because it believes that this form of compensation provides the clearest link to enhanced shareholder value. The Company's executive compensation program is designed to provide the Committee with the flexibility to emphasize one component of the total compensation package over another as circumstances demand. Further, the Committee has the flexibility to revise the annual bonus component during any fiscal year to ensure that the incentive aspect of the Company's compensation system is preserved. BASE SALARIES The Committee does not attempt to adhere to predefined quantitative or qualitative measures in establishing base salaries, nor are certain criteria deemed more important or given more weight than others. In setting base salaries, the Committee subjectively evaluated the Company's financial and operating results during the then current fiscal year and considered other subjective criteria. The Committee noted that operating results had not met management's expectations, due in large part to external factors faced by the Company and the intermediate steel processing industry in general--primarily the volatility in raw material inventory pricing available from the Company's suppliers. These inventory sourcing concerns were further complicated by the administration and coordination of the expansion of the Company's market territories through the opening of new plant facilities and the increased competition as a result thereof. In addition to objective financial measures, the Committee weighed other criteria more subjective in nature. Subjective factors considered included an evaluation of the executive officers' respective job responsibilities, the Committee's perception of their importance to the Company and its operations, and comparison to the compensation to be paid to the Company's non-executive officers for the upcoming year. Based upon this evaluation, the Committee elected in early April 1997 to maintain at then current levels the base salaries of its executive officers. ANNUAL INCENTIVE COMPENSATION A significant portion of the executive officers' total compensation is at risk through annual incentive opportunities that have historically been linked to key financial objectives of the Company. The goal of this policy is to focus attention on the attainment of financial objectives that the Committee believes are significant determinants of the Company's share price over time. Recognizing that because no increases in base salaries were being granted, the opportunity to earn a bonus would be even more important to the executive officers. If based on a measurement of corporate performance which was tied to increasing shareholder value, the annual incentive compensation might even serve to more closely align the interests of the executives with those of the shareholders than in years past, in which increases in base salaries had been awarded. The Committee decided to utilize an earnings per share measurement to determine the amount of the bonus, if any, which the executive officers would have the opportunity to collect. In short, the total amount of the bonuses which the executive officers could earn was based upon the Company's attainment of various quarterly, year-to date and full year earnings per share targets established by the Committee. The targets were intended to be aggressive and challenging so that the Company would only be obligated to pay, and the executive officers would only be entitled to receive, increasingly higher bonus compensation if and to the extent the Company achieved increasingly higher earnings per share throughout the course of the fiscal year. No bonuses were earned by the Company's executive officers during 1997. LONG TERM INCENTIVE COMPENSATION The Huntco Inc. 1993 Incentive Stock Plan (the "1993 Plan"), provides for the awards of non-qualified stock options to purchase Class A Shares, incentive stock options to purchase Class A Shares, restricted Class A Shares and stock appreciation rights. The Committee administers the 1993 Plan. All grants of benefits under the 1993 Plan are at the complete discretion of the Committee, which may award them based on whatever subjective or objective criteria it deems appropriate. The Committee concluded at its meeting held in April 1997 that due to the non-qualified stock options awarded to the executive officers during Fiscal 1997, that it would not be appropriate to award additional options during Transition 1997. As Transition 1997 proceeded and the market price of the Company's Class A Shares remained below the exercise price of a large number of options which had been previously granted, the Committee decided it was in the best interests of the Company to offer to reissue certain of such non-qualified stock options previously issued to managerial and supervisory employees, including the executive officers, concurrent with the cancellation of such previously granted options. The rationale for those options reissued is set forth below. REISSUANCE OF STOCK OPTIONS The stated purpose of the 1993 Plan is to secure for the Company and its shareholders the benefits of the incentive inherent in common stock ownership by the employees of the Company and its subsidiaries, who are largely responsible for its future growth and financial success. As of December 4, 1997, non-qualified stock options to purchase 848,250 shares of Class A Common Stock had been awarded to forty-five key managerial employees (including the three executive officers named in the Summary Compensation Table) and to the Company's three non-employee directors. The Committee concluded at its December 4, 1997 meeting that the outstanding options to purchase Class A Shares held by the Company's key managers, officers and non-employee directors, with exercise prices of $19.50 per share or higher, were not providing the intended incentive to the Company's key personnel. The Committee noted that the closing market price for the Class A Shares on the immediately preceding day was $12.63 per share, and that the exercise prices of all of the stock options subject to regrant had been below the market value of such Class A Shares for over one full year. In order to restore the incentive value to such options, the Committee decided to offer to its active key managers and officers (including the named executive officers and directors) the opportunity to surrender all of the non- qualified stock options granted to each of them between May 5, 1994 and April 4, 1996 (which constituted stock options with exercise prices ranging from $19.50 per share to $25.00 per share, and expiration dates ranging from May 5, 1999 to April 4, 2001)(the "Old Options"), for a like number of non-qualified stock options with the reduced exercise price of $13.50 per share (the "New Options"). Although the exercise prices of the Old Options were the closing prices of the Class A Shares as reported on the New York Stock Exchange (or on the NASDAQ National Market System with respect to the Old Options granted when the Class A Shares were traded on the over-the-counter market) on the date of the initial grant, the Committee decided to set the exercise price for the New Options at an exercise price above the closing price on the New York Stock Exchange on the day immediately preceding the date of grant. The Committee believed that in consideration for providing the opportunity to receive lower priced options, it was fair and in the best interests of the Company and its shareholders that the exercise price of the New Options be higher than the current market price of the Class A Shares. This would build an incentive into the New Options themselves, because the New Options would be "underwater" on the date of grant, although not to the same extent the Old Options were. The Committee believed that the $13.50 per share exercise price was fair in relation to the other holders of the Company's Class A Shares. Further, the Committee decided that the New Options should not be exercisable for eighteen months from the date of grant, even if the Old Options they were to replace were then currently exercisable. Finally, and to increase the incentive value of the New Options, the Committee decided that the New Options should have an exercise period of only thirty-six months, contrasted with the exercise period of five years which had been the case with the Old Options. The intent was to motivate the key employees to swiftly and efficiently take the operational and business steps necessary to increase the stock price of the Class A Shares. All optionees holding Old Options which were eligible for surrender in exchange for New Options, including the named executive officers, accepted the offer to exchange Old Options for New Options. As a result, there are currently outstanding recently repriced non-qualified stock options to purchase 295,000 Class A Shares at an exercise price of $13.50 per share, none of which are exercisable until June 4, 1999, and all of which New Options will expire if not exercised by December 4, 2000. The named executive officers have New Options to purchase 180,000 Class A Shares and the non-employee directors have New Options to purchase 9,000 Class A Shares stemming from these option reissuances. Existing non-qualified stock options to purchase 393,500 Class A Shares, which were granted as part of the Company's initial public offering or within one month after its completion, remain outstanding with an exercise price of $17.00 per share, with expiration dates of July 21, 1998 (for 87,500 of these options) and May 17, 2003. COMPENSATION OF THE CHIEF EXECUTIVE OFFICER The decision not to grant an increase in base salary to Mr. Hunter, the Company's Chief Executive Officer, the determination of the earnings per share targets which the Company would have to achieve for Mr. Hunter to receive a bonus, the number of non-qualified stock options awarded to him under the 1993 Plan and the number of non-qualified stock options of his which were reissued, were identical to the decisions, determinations, and awards made to the Company's executive officers as a group, as discussed above. Accordingly, the discussion of those components of the total compensation package set forth above are equally applicable to Mr. Hunter as they are to the Company's other executive officers. Mr. Hunter's base salary is not based on any objective measurement or standard. Rather, it is premised upon the Committee's subjective evaluation of (i) the importance of Mr. Hunter's role as Chairman of the Board and Chief Executive Officer and the realization that his compensation should be reflective of his position as the Company's driving force, (ii) his years of experience, leadership and general executive and managerial abilities, (iii) his vision with respect to the continued growth and expansion of the Company, and (iv) his commitment to increasing shareholder value. None of the factors used to evaluate Mr. Hunter or to determine his base salary was given any more weight than any other factor. LIMITATIONS OF TAX DEDUCTIONS FOR EXECUTIVE COMPENSATION The Internal Revenue Code, and the regulations promulgated thereunder, limit the tax deduction the Company may recognize for compensation paid to its executive officers whose compensation is listed in this Proxy Statement, to $1.0 million per person, per year. This deduction limit does not apply to compensation that complies with applicable provisions of such regulations. Because the Committee did not expect the compensation to be paid to such persons to exceed $1.0 million per person in 1997, the Committee did not take any action prior to or during 1997 which would have been required to comply with the aforementioned statute so that the deduction limit would not apply. The Committee will continue to evaluate the other components of the Company's executive compensation program and will take the necessary actions with respect to such regulations if it is deemed appropriate to do so with respect to compensation to be paid to executive officers in future years. Mr. Donald E. Brandt Mr. James J. Gavin, Jr. Mr. Michael M. McCarthy Being all the Members of the Compensation Committee EXECUTIVE COMPENSATION ---------------------- The following tables provide information regarding compensation paid to, and information about the amount and value of employee stock options held by Messrs. B.D. Hunter, Robert J. Marischen and Terry J. Heinz, the only three executive officers of the Company (the "Named Executive Officers" or "NEOs"). SUMMARY COMPENSATION TABLE
Long Term Compensation Awards Annual Compensation ------------------- Name and --------------------- Securities Underlying All Other Principal Position Year Salary($) Bonus($) Options/SARs(#) Compensation($) - ------------------ ------- ----------- ------- ------------------- ----------------- B.D. Hunter, 1997 $291,500 -- 60,000 $3,200 Chairman and Chief FY97 $291,500 $58,300 10,000 -- Executive Officer FY96 $275,000 $82,500 -- $1,500 Robert J. Marischen, 1997 $265,000 -- 60,000 $3,200 Vice Chairman and FY97 $265,000 $53,000 10,000 $3,000 Chief Financial Officer FY96 $250,000 $75,000 -- $1,500 Terry J. Heinz, 1997 $260,000 -- 60,000 $3,200 President and Chief FY97 $260,000 $52,000 10,000 $3,000 Operating Officer FY96 $245,000 $73,500 -- $1,500 On October 23, 1997 the Company elected to convert from an April 30 fiscal year end to a December 31 fiscal year end. The compensation reported for the NEO in the top row represents remuneration paid during the twelve month period commencing January 1, 1997 and ending December 31, 1997. The compensation reported for the NEO in the second and third rows entitled "FY97" and "FY96" represents remuneration paid to the NEO during the Company's two prior fiscal years comprising the twelve month periods ending April 30, 1997 and 1996, respectively. Amounts shown include cash compensation earned and received as well as compensation earned but deferred at the election of the executive officer. This column represents grants made under the 1993 Plan. Includes matching contributions by the Company during calendar year 1997 to the accounts of the following individuals under the Retirement Savings Plan, which is a defined contribution plan, as follows: Mr. Hunter: $3,200; Mr. Marischen: $3,200; and Mr. Heinz: $3,200. 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. These options awarded on April 4, 1997 represent non-qualified stock options exercisable at $12.50 per share, the closing market price of the Company's Class A shares on the New York Stock Exchange on the date of grant.
OPTION/SAR GRANTS IN LAST FISCAL YEAR
Potential Realizable Value at Assumed Annual Rates of Stock Price Appreciation Individual Grants for Option Term - --------------------------------------------------------------------------- ------------------- % of Total Options/SARs Number of Securities Granted to Exercise or Underlying Options/ Employees in Base Price Expiration Name SARs Granted(#) Fiscal Year ($/Sh) Date 5%($) 10%($) ---- -------------------- ------------ ----------- ---------- --------- --------- B. D. Hunter 10,000 10.2% $12.50 04/03/2002 $34,535 $ 76,314 60,000 17.0% $13.50 12/03/2000 $54,051 $183,458 Robert J. Marischen 10,000 10.2% $12.50 04/03/2002 $34,535 $ 76,314 60,000 17.0% $13.50 12/03/2000 $54,051 $183,458 Terry J. Heinz 10,000 10.2% $12.50 04/03/2002 $34,535 $ 76,314 60,000 17.0% $13.50 12/03/2000 $54,051 $183,458 This table reports non-qualified stock options granted to the NEOs during the twelve month period ending December 31, 1997. No SARs were granted in tandem with the options. The dollar amounts under these columns are the result of calculations at the 5% and 10% rates set by the SEC, and therefore are not intended to forecast possible future appreciation, if any, of the stock price of the Company's Class A Shares. The Company did not use an alternative formula for a grant date valuation, as the Company is not aware of any formula which will determine with reasonable accuracy a present value based on future unknown or volatile factors. These non-qualified stock options were awarded during that portion of calendar 1997 prior to the commencement of the Transition Period. One-quarter of the options granted are exercisable on the first, second, third and fourth anniversaries of the date of the grant. Represents the percent which the number of stock options awarded during that portion of calendar 1997 prior to the commencement of the Transition Period is to all stock options awarded to eligible employees and directors during that period. These non-qualified stock options were awarded during the Transition Period. They do not become exercisable for eighteen months from the date of grant and expire thirty-six months from the date of grant. Represents the percent which the number of stock options awarded during that portion of calendar 1997 subsequent to the commencement of the Transition Period is to all stock options awarded to eligible employees and directors during that period.
AGGREGATED OPTION/SAR EXERCISES IN LAST FISCAL YEAR AND FY-END OPTION/SAR VALUES
Number of Securities Underlying Value of Unexercised In-the-Money Unexercised Options/SARs at FY-End(#) Options/SARs at FY-End($) ------------------------------------- ----------------------------- Name Exercisable/Unexercisable Exercisable/Unexercisable - ---- ------------------------- ------------------------- B. D. Hunter 2,500/67,500 $10,938/$235,313 Robert J. Marischen 152,500/67,500 $10,938/$235,313 Terry J. Heinz 152,500/67,500 $10,938/$235,313 Represents the difference between (a) the closing price on the New York Stock Exchange on December 31, 1997, the Transition Period year end, of the Class A Shares and (b) the exercise price of non-qualified stock options awarded to the Named Executive Officer under the 1993 Plan, which difference is multiplied by the number of options owned by the Named Executive Officer.
The following table sets forth certain information concerning the reissuance of non-qualified stock options (effectively considered herein as a "repricing") on December 4, 1997, granted to the Company's executive officers, which has been the only reissuance of options held by the Company's Named Executive Officers. TEN-YEAR OPTION/SAR REPRICINGS
Number of Length of Securities Market Price Exercise Original Option Underlying of Stock Price at Term Remaining Options/SARs at Time of Time of New at Date of Repriced or Repricing or Repricing or Exercise Repricing or Name Date Amended(#) Amendment($) Amendment($) Price($) Amendment ---- ---- --------- ----------- ----------- ------- --------- B.D. Hunter 12/04/97 60,000 $12.44 $21.50 $13.50 2 yrs., 3mos. Robert J. Marischen 12/04/97 60,000 $12.44 $21.50 $13.50 2 yrs., 3mos. Terry J. Heinz 12/04/97 60,000 $12.44 $21.50 $13.50 2 yrs., 3mos. The exercise price of the replacement non-qualified stock options is higher than the market price of the Class A Shares. The replacement non-qualified stock options do not become exercisable until June 4, 1999, and they expire December 3, 2000, so that the terms of the replacement non-qualified stock options are shorter than the terms of the non-qualified stock options being replaced.
CERTAIN CONTRACTS Both Messrs. Marischen and Heinz are parties to employment agreements with the Company (the "Employment Agreements"). Except for the base salaries to be paid to each thereunder (Mr. Marischen being contractually entitled to receive a base salary of not less than $278,250 in the fiscal year ended December 31, 1998 ("Fiscal 1998") and Mr. Heinz being contractually entitled to receive a base salary of not less than $273,000 in Fiscal 1998), the Employment Agreements are identical. Both Employment Agreements have automatic one-year renewals effective each April 30 (the "Renewal Term"), unless notice is given by either party thereto that such Employment Agreement is not to be renewed or unless the Employment Agreement has been terminated by the respective parties thereto or upon the occurrence of certain events specified in the Employment Agreements. Both Messrs. Marischen and Heinz are entitled to severance payments under the Employment Agreements upon termination of their employment. If the Company notifies either employee that the Employment Agreements will not be renewed at the expiration of any then current Renewal Term, the employee would be entitled to annual compensation payments for one year from the date of termination. If the employee is terminated due to incapacity, in addition to those benefits that are provided by retirement and benefit programs specifically adopted and approved by the Company for the employee that are earned and vested at the date of termination, the employee shall be entitled to receive his base salary compensation for the six months following such termination. If the Company terminates the employee "without cause" (as that term is provided in the Employment Agreements) prior to the expiration of any then current Renewal Term, then in addition to those benefits that are provided by retirement and benefit plans and programs specifically adopted and approved by the Company for employees that are earned and vested at the date of termination, the employee shall be entitled to his annual compensation payments for one year from the date of termination. The Employment Agreements also provide for severance payments of one year's base salary in the event that the employee voluntarily terminates his employment within 12 months following a "change of control" as defined in the Employment Agreements. Although Mr. Hunter is not a party to a written employment contract, the Compensation Committee has approved an annual base salary of $306,075 for Mr. Hunter for Fiscal 1998. On December 4, 1997, the Compensation Committee adopted a resolution providing for the payment of bonuses to the Company's named executive officers during Fiscal 1998 (the "1998 Bonus Arrangements"). Under the 1998 Bonus Arrangements, the Company's executive officers are entitled to earn incentive bonuses, to be paid quarterly, based on the Company's quarterly, year-to-date and full year earnings per share. If earnings per share equals or exceeds certain specified targets, they each will earn an additional specified percentage of their respective annual base salaries for Fiscal 1998 (the "Fiscal 1998 Base Salaries") with the bonus percentages increasing if respectively higher earnings per share targets are met. The maximum annual incentive bonuses that could be paid to the executive officers under the 1998 Bonus Arrangements equals 120% of their respective Fiscal 1998 Base Salaries. The Company provides its executive officers with the use of an automobile and a Company-paid country club membership, as well as supplemental health insurance pursuant to which the Company reimburses its executive officers for amounts they incur over and above the medical and dental coverage to which the Company's other employees are entitled. Both Messrs. Marischen and Heinz also receive Company-paid long-term disability and life insurance coverage under which death benefits are to be paid to the beneficiaries designated by each. The Company has agreed to reimburse Messrs. Marischen and Heinz for federal and state income taxes payable by them on the first $400,000 of taxable income recognized by each of them upon the exercise of options granted to them in May 1993 pursuant to the 1993 Plan. Neither Messrs. Marischen nor Heinz has exercised any of such options; therefore, no tax reimbursement has yet been made to them by the Company. COMPENSATION COMMITTEE INTERLOCKS AND INSIDER PARTICIPATION The members of the Compensation Committee are Messrs. Brandt, Gavin and McCarthy, each of whom is a non-employee director. Messrs. Hunter and Marischen were present at the meeting of the Compensation Committee at which the remuneration for each of the Company's executive officers for 1997 was determined. STOCK PRICE PERFORMANCE GRAPH The graph below compares cumulative total shareholder return to the cumulative total return of the S&P Industrials index and to a peer group index. The comparison of total return assumes that a fixed investment of $100 was invested on June 29, 1993 (the effective date of the Company's initial public offering) in the Company's Class A Shares and in each of the foregoing indices, and further assumes the reinvestment of dividends. The information on the graph covers the period from June 29, 1993 through the end of Fiscal 1997, which concluded on April 30, 1997, plus the eight month period from May 1, 1997 through December 31, 1997. Since there is no nationally recognized industry index consisting of intermediate steel processors to be used as a peer group index, the Company constructed its own peer group. This peer group is comprised of two companies which represent the only other public companies in the intermediate steel processing industry with a stock performance history dating back to June 29, 1993, namely Steel Technologies Inc. and Worthington Industries, Inc. Although certain other companies in the industry have completed initial public offerings since June 29, 1993, these companies cannot yet be used for comparative stock performance purposes. The returns of each member of the peer group are weighted according to each member's stock market capitalization as of the beginning of the period measured. The stock price performance shown on the graph below is not necessarily indicative of future price performance. [GRAPH]
April 30, June 29, ---------------------------------------- December 31, 1993 1994 1995 1996 1997 1997 ---- ---- ---- ---- ---- ---- Huntco Inc. 100.00 112.12 103.12 105.26 78.85 102.26 S&P Industrials 100.00 101.92 118.96 150.84 182.88 217.70 Peer Group 100.00 91.74 92.14 100.30 95.47 87.55
CERTAIN TRANSACTIONS The Company is a party to two lease agreements with Farms. Under one agreement, the Company leases space for its executive offices located in Town & Country, Missouri, in an office building owned by Farms. During calendar 1997, lease payments paid by the Company to Farms under this lease were $22,800. The Company also leases a ranch facility in Colorado owned by Farms which the Company uses primarily for the entertainment of customers. During calendar 1997, the Company paid Farms $60,000 in lease payments relating to its use of the property in Colorado. It anticipates making similar payments under the aforementioned leases during the current fiscal year. INDEPENDENT ACCOUNTANTS The Company is presently utilizing the services of Price Waterhouse LLP, independent accountants, who have been the Company's and its predecessors independent accountants since 1986, and who will serve as the Company's independent accountants for the fiscal year ending December 31, 1998. Representatives of Price Waterhouse will be present at the Annual Meeting and will have an opportunity to make a statement if they desire to do so and will be available to respond to appropriate questions. SHAREHOLDER PROPOSALS Any shareholder proposals intended to be presented at the 1999 Annual Meeting must be received by the Company at its principal executive offices no later than December 10, 1998, in order to be considered for inclusion in the proxy materials. OTHER MATTERS As stated elsewhere herein, the Board of Directors knows of no other matters to be presented for consideration at the meeting by the Board of Directors or by shareholders who have requested inclusion of proposals in the Proxy Statement. If any other matter shall properly come before the meeting, the persons named in the accompanying form of proxy intend to vote on such matters in accordance with their judgment. The expense of preparing, printing and mailing proxy materials to the holders of the Company's Class A Shares will be borne by the Company. In addition, proxies may be solicited personally or by telephone or telefax, by officers or employees of the Company, none of whom will receive additional compensation therefor. The Company will also reimburse brokerage houses and other nominees for their reasonable expenses in forwarding proxy materials to beneficial owners of the Class A Shares. April 9, 1998 APPENDIX Page 14 of the printed proxy statement contains a Stock Price Performance Graph. The information contained in the graph is depicted in the table that immediately follows the graph. HUNTCO INC. PROXY SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS For Annual Meeting of Shareholders on May 7, 1998 The undersigned hereby appoints B. D. HUNTER, ROBERT J. MARISCHEN and TERRY J. HEINZ, and each of them, with power of substitution, as proxies of the undersigned, to attend the Annual Meeting of Shareholders of Huntco Inc. (the "Company"), to be held at Forest Hills Country Club, located at 36 Forest Club Drive, Chesterfield, Missouri 63005, on Thursday, May 7, 1998, at 10:00 a.m. local time, and all adjournments thereof, and to vote, as indicated below, the shares of Class A Common Stock of the Company which the undersigned is entitled to vote with all the powers the undersigned would possess if present at the meeting. 1. Election of / / FOR all nominees listed below / / WITHHOLD AUTHORITY Directors (except as marked to the to vote for all contrary below) nominees listed below James J. Gavin, Jr. and Terry J. Heinz (INSTRUCTION: To withhold authority to vote for any individual nominee, write that nominee's name on the space provided below.) - ------------------------------------------------------------------------------ 2. In their discretion, the proxies are authorized to vote upon any other business which may properly come before the meeting and all adjournments thereof. This proxy, when properly executed, will be voted in the manner directed herein by the undersigned shareholder(s). If no direction is made, this proxy will be voted FOR the election of the nominees listed. Please date and sign on the reverse side and mail promptly in the enclosed envelope. THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS The undersigned hereby revokes all proxies heretofore given by the undersigned for said meeting. This proxy may be revoked prior to its exercise. Dated: ____________________________________ ____________________________________ Signature ____________________________________ (Signature if held jointly) Note: Please sign exactly as your name or names appear hereon. When signing as attorney, executor, administrator, trustee or guardian, please give full title as such. If a corporation, please sign in full corporate name by president or other authorized officer. If a partnership, please sign in partnership name by authorized person. PLEASE MARK, SIGN AND PROMPTLY RETURN THIS PROXY CARD IN THE ENCLOSED ENVELOPE. NO POSTAGE IS REQUIRED IF MAILED IN THE UNITED STATES. -----END PRIVACY-ENHANCED MESSAGE-----