Edgar Filing: OLYMPIC STEEL INC

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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:

[ ] 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

OLYMPIC STEEL, 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: ...........................................................

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[OLYMPIC STEEL LOGO]
Olympic Steel, Inc., 5096 Richmond Road, Bedford Heights, OH 44146
(216) 292-3800

To Our Shareholders:

You are invited to attend the 2001 Annual Meeting of Shareholders of Olympic
Steel, Inc. to be held at Olympic Steel, Inc., 5096 Richmond Road, Bedford
Heights, OH 44146, on Monday, April 30, 2001, at 10:00 a.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 23, 2001
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[OLYMPIC STEEL LOGO]
Olympic Steel, Inc., 5096 Richmond Road, Bedford Heights, OH 44146
(216) 292-3800

NOTICE OF ANNUAL MEETING OF SHAREHOLDERS
TO BE HELD APRIL 30, 2001

The Annual Meeting of Shareholders of Olympic Steel, Inc., an Ohio corporation
(the Company), will be held on Monday, April 30, 2001, at 10:00 a.m. local time,
at Olympic Steel, Inc., 5096 Richmond Road, Bedford Heights, OH 44146, for the
following purposes:

1. To elect three Directors for a term expiring in 2003;

2. To ratify the appointment of Arthur Andersen LLP as auditors of the Company
for 2001;

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 12, 2001, 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

Marc H. Morgenstern
Secretary

Cleveland, Ohio

March 23, 2001

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.
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[OLYMPIC STEEL LOGO]
2001 ANNUAL MEETING

April 30, 2001

THE PROXY AND SOLICITATION

This Proxy Statement is being mailed on or about March 30, 2001, 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
2001 Annual Meeting of Shareholders to be held on Monday, April 30, 2001 at
10:00 a.m. local time, at Olympic Steel, Inc., 5096 Richmond Road, Bedford
Heights, OH 44146. 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 of 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 three
Directors of the class whose two-year terms of office will expire in 2003; (2)
ratifying the appointment of Arthur Andersen LLP as auditors of the Company for
2001, 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 12, 2001,
as the record date for determining shareholders entitled to notice of the
meeting and to vote. On that date, 9,631,100 shares of Common Stock were
outstanding and entitled to one vote on all matters properly brought before the
Annual Meeting.

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PROPOSAL ONE
ELECTION OF DIRECTORS

The Board of Directors is divided into two classes of three Directors each,
whose members serve for a staggered two-year term. One class of Directors' term
expires in 2001 and the other class term expires in 2002.

The Board of Directors has nominated Michael D. Siegal, Thomas M. Forman
and James B. Meathe to stand for election as Directors for a two-year term. The
two-year term will end upon the election of Directors at the 2003 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 2003

PRINCIPAL OCCUPATION,
PAST FIVE YEARS, DIRECTOR
NAME OF DIRECTOR AGE OTHER DIRECTORSHIPS SINCE
---------------- --- -------------------------------------------------- --------

Michael D. Siegal 48 Chief Executive Officer of the Company since 1984, 1984
and Chairman of the Board since 1994. President of
the Company from 1984 through 2000. A member of
the Board of Directors of American National Bank
(Cleveland, Ohio). A member of the Executive
Committee of the Steel Service Center Institute
(SSCI) and Vice Chairman of the Development
Corporation for Israel.
Thomas M. Forman 55 Co-founder and board member of HealthSync (a 1994
provider of an employer-paid health insurance
marketplace) since 1999. He served as Vice
President of Sealy Corporation (a manufacturer and
distributor of bedding) from 1994 to 1997. Prior
thereto, he served as Executive Vice President and
a member of the Board of Directors of Bridgestone/
Firestone, Inc. (a worldwide tire manufacturer and
distributor) for two years and held various senior
management positions for seven years prior
thereto.
James B. Meathe 44 Managing Director and Great Lakes Region Head of --
Marsh Inc. (a leading risk and insurance services
firm) since 1999. Previously served as Cleveland
Branch Manager and prior thereto in multiple
senior management positions in the Grand Rapids
office of Johnson & Higgins. He currently serves
on the Operating Committee of Marsh USA Inc. and
on the board of Ursuline College.

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DIRECTORS WHOSE TERMS EXPIRE IN 2002

PRINCIPAL OCCUPATION,
PAST FIVE YEARS, DIRECTOR
NAME OF DIRECTOR AGE OTHER DIRECTORSHIPS SINCE
---------------- --- -------------------------------------------------- --------

David A. Wolfort 48 President since January 2001 and Chief Operating 1987
Officer of the Company since 1995. He served as
Vice President - Commercial of the Company from
1987 to 1995. He is Chairman of the Steel Service
Center Institute (SSCI) PAC, serves as Past
Chairman of SSCI's Government Affairs committee,
and a Regional Board Member of the Northern Ohio
Anti-Defamation League.
Martin H. Elrad 61 Private investor; also served for over five years 1987
as President of Solon Leasing Co. (a fleet vehicle
lessor).
Suren A. Hovsepian 61 Business Consultant. Vice President - Automotive 1998
of the Company from 1997 to 1998. Previously, he
served as General Manager of Lafayette Steel, a
subsidiary of the Company, since its acquisition
in 1995. Prior to its acquisition, he was
President and Chief Executive Officer of Lafayette
Steel.

BOARD OF DIRECTORS MEETINGS AND COMMITTEES

The Board of Directors of the Company held four meetings in 2000. The Board
of Directors has an Audit Committee, a Compensation Committee, and a Nominating
Committee, each of which consists of Messrs. Elrad, Forman, and William E.
MacDonald III, who is a Director not standing for reelection at the 2001 Annual
Meeting. The Audit Committee held two meetings and the Compensation and
Nominating Committees each held one meeting in 2000. 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 all of the required Board and
applicable committee meetings held during 2000. 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.

Audit Committee. The committee is chaired by Mr. MacDonald, operates
pursuant to a written charter (a copy of which is attached as Appendix A to this
Proxy Statement), and is responsible for monitoring and overseeing the Company's
internal controls and financial reporting processes, as well as the independent
audit of the Company's consolidated financial statements by the Company's
independent auditors, Arthur Andersen LLP. Each committee member is an
"independent Director" as defined in Rule 4200(a)(15) of the National
Association of Securities Dealers, Inc. listing standards. As part of fulfilling
its responsibilities, the Audit Committee reviewed and discussed the audited
consolidated financial statements for 2000 with management and discussed those
matters required to be discussed by Statement on Auditing Standards No. 61
(Communication with Audit Committees) with the Company's independent auditors.
The Audit Committee received the written disclosures and the

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letter required by Independent Standards Board Standard No. 1 (Independence
Discussions with Audit Committee) from Arthur Andersen LLP, and discussed that
firm's independence with representatives of the firm.

Based upon the Audit Committee's review of the audited consolidated
financial statements and its discussions with management and the Company's
independent auditors, the Audit Committee recommended that the Board of
Directors include the audited consolidated financial statements for the fiscal
year ended December 31, 2000 in the Company's Annual Report on form 10-K filed
with the Securities and Exchange Commission.

William E. MacDonald III, Chairman
Martin H. Elrad
Thomas M. Forman

Compensation Committee. This committee 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.

Nominating Committee. This committee 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 2002 Annual Meeting may do so by providing written notice to the Company
in care of Marc H. Morgenstern, Secretary, no later than December 30, 2001.

COMPENSATION OF DIRECTORS

During 2000, each Director who is not an employee of the Company received a
Director's fee in the amount of $3,500 per meeting and reimbursement for out-of-
pocket expenses incurred in connection with attending such meetings. Directors
also receive $1,000 for each special Board or Committee meetings attended. No
additional compensation is to be paid for committee meetings held on the same
day as Board meetings. Upon appointment to the Board, each outside Director is
entitled to a stock option grant of 10,000 shares. Each outside Director shall
also be entitled to an annual stock option grant of up to 2,500 shares, based on
overall Company performance. Directors who are also employees of the Company
receive no additional remuneration for serving as Directors.

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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
12, 2001, based upon information furnished to the Company.

NUMBER OF SHARES PERCENTAGE OF
NAMES OF BENEFICIAL OWNERS BENEFICIALLY OWNED OWNERSHIP
-------------------------- ------------------ -------------

Michael D. Siegal 1,553,223(1) 15.9%
5096 Richmond Road
Cleveland, OH 44146
Dimensional Fund Advisors 812,400(2) 8.3%
1299 Ocean Avenue, 11th Floor
Santa Monica, CA 90401
Gelfand Maxus Asset Management 744,457(3) 7.6%
1301 East Ninth Street
36th Floor
Cleveland, OH 44114-1800
David A. Wolfort 551,467(4) 5.7%
5096 Richmond Road
Cleveland, OH 44146

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

(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.
Includes 22,223 shares issuable upon exercise of options exercisable within
sixty days of March 12, 2001.

(2) Based on Schedule 13G filed with the Securities and Exchange Commission on
or about February 2, 2001.

(3) Based on Schedule 13F filed with the Securities and Exchange Commission on
or about February 9, 2001.

(4) Does not include 113,000 shares held in various trusts for the benefit of
Mr. Wolfort's children. Mr. Wolfort disclaims beneficial ownership of such
shares. Includes 18,667 shares issuable upon exercise of options exercisable
within sixty days of March 12, 2001.

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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, Director nominees, each of
the officers in the compensation table included herein, and all the Directors,
Director nominees, and executive officers as a group as of March 12, 2001.

NUMBER OF SHARES PERCENTAGE OF
NAMES OF BENEFICIAL OWNERS BENEFICIALLY OWNED OWNERSHIP
-------------------------- ------------------ -------------

Michael D. Siegal 1,553,223(1) 15.9%
David A. Wolfort 551,467(2) 5.7%
Martin H. Elrad 21,001(3) *
Suren A. Hovsepian 17,001(3) *
Heber MacWilliams 16,801(3) *
Thomas M. Forman 15,351(3) *
Richard T. Marabito 14,001(4) *
William E. MacDonald III 8,333(3) *
James B. Meathe 0 *
All Directors, Director nominees, and executive officers
as a group (9 persons) 2,197,178(5) 22.6%

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

* Less than 1%.

(2) Does not include 113,000 shares held in various trusts for the benefit of
Mr. Wolfort's children. Mr. Wolfort disclaims beneficial ownership of such
shares. Includes 18,667 shares issuable upon exercise of options exercisable
within sixty days of March 12, 2001.

(3) Includes shares issuable upon exercise of options exercisable within sixty
days of March 12, 2001, as follows: Elrad - 16,001, Hovsepian - 12,001,
MacWilliams - 11,001, Forman - 13,201, MacDonald - 3,333.

(4) Does not include 2,000 shares held is various trust for the benefit of Mr.
Marabito's children. Mr. Marabito disclaims beneficial ownership of such
shares. Includes 12,001 shares issuable upon exercise of options exercisable
within sixty days of March 12, 2001.

(5) Includes 108,428 shares issuable upon exercise of options exercisable within
sixty days of March 12, 2001.

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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 2000 and Form 5 and amendments thereto furnished to the
Company with respect to 2000, 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
with the exception of one inadvertent late filing of one purchase by Mr.
Hovsepian.

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, 2000, 1999,
and 1998 to the Chief Executive Officer and each of the other executive officers
(the "Named Executive Officers") of the Company:

SUMMARY COMPENSATION TABLE

ANNUAL COMPENSATION
NAME AND ----------------------- ALL OTHER
PRINCIPAL POSITION(S) YEAR SALARY BONUS COMPENSATION(1)
--------------------- ---- -------- -------- ---------------

Michael D. Siegal, 2000 $400,000 $ 0 $ 8,650
Chairman of the Board and 1999 425,000 118,300 9,800
Chief Executive Officer 1998 421,793 108,240 11,400
David A. Wolfort, 2000 $310,000 $ 0 $ 8,650
President and 1999 310,000 94,640 9,800
Chief Operating Officer 1998 301,775 108,240 11,400
Richard T. Marabito(2) 2000 $161,628 $ 0 $ 8,650
Chief Financial Officer
and Treasurer
Heber MacWilliams(2) 2000 $125,154 $ 15,000 $ 8,379
Vice President - MIS

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

(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. Messrs. Siegal,
Wolfort and Marabito each were credited in 2000 with $5,250 and $3,400 under
the 401(k) plan and profit-sharing plan, respectively. Mr. MacWilliams was
credited in 2000 with $5,250 and $3,129 under the 401(k) plan and
profit-sharing plan, respectively.

(2) Pursuant to SEC rules, no information regarding compensation for years prior
to appointment as Named Executive Officer required.

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The following table sets forth information regarding individual grants of
stock options pursuant to the Company's Stock Option Plan during 2000 to each of
the Named Executive Officers.

INDIVIDUAL OPTION GRANTS
2000

% OF
NUMBER OF TOTAL OPTIONS
SHARES COVERED GRANTED TO GRANT DATE
BY OPTION EMPLOYEES IN EXERCISE PRICE EXPIRATION PRESENT
NAME GRANT FISCAL YEAR ($/SHARE)(1) DATE VALUE(2)
---- -------------- ------------- -------------- ---------- -------------

Michael D. Siegal 20,000 13.0% $4.84 4/26/10 $68,400
David A. Wolfort 16,000 10.4% $4.84 4/26/10 $54,720
Richard T. Marabito 8,000 5.2% $4.84 4/26/10 $27,360
Heber MacWilliams 5,000 3.3% $4.84 4/26/10 $17,100

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

(1) Stock Options were awarded with an exercise price equal to the fair market
value per share of the Common Stock on the grant date.

(2) In accordance with the rules of the United States Securities and Exchange
Commission, the Black-Scholes option pricing model was chosen to estimate
the grant date present value of the options set forth in this table. The
Company cannot predict or estimate the future price of the Company's Common
Stock, and neither the Black-Scholes model nor any other model can
accurately determine the value of an option. Accordingly, there is no
assurance that the value realized by an officer, if any, will be at or near
the value estimated in the Black-Scholes model. The Black-Scholes valuation
was determined using the following assumptions: an average volatility of
51.8%, no dividend yield, a risk-free interest rate of 6.2%, and a projected
exercise period of 10 years.

During 2000, there were no Stock Options exercises by any of the Named
Executive Officers. The following table sets forth certain information
concerning the number and value of unexercised options held by each of the Named
Executive Officers at December 31, 2000.

DECEMBER 31, 2000
OPTION VALUES

NUMBER OF SECURITIES UNDERLYING VALUE OF IN-THE-MONEY OPTIONS
OPTIONS AT YEAR END AT YEAR END ($)(1)
-------------------------------- ------------------------------
NAME EXERCISABLE UNEXERCISABLE EXERCISABLE UNEXERCISABLE
---- ------------ -------------- ----------- -------------

Michael D. Siegal 7,778 35,555 0 0
David A. Wolfort 6,667 29,333 0 0
Richard T. Marabito 6,167 13,333 0 0
Heber MacWilliams 6,167 10,333 0 0

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

(1) These values are based on the negative spread between the respective
exercise price of outstanding stock options and the fair market value of the
Company's Common Stock at December 31, 2000 ($1.969). These amounts may not
represent amounts actually realized by the Named Executive Officers.

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Retention Agreements. The Company has executed Management Retention
Agreements (the "Retention Agreements") with Messrs. Siegal, Wolfort, and
Marabito. Under the Agreements, which do not become operative unless there is a
Change-in-Control of the Company (as defined in the Retention Agreements), the
Company agrees to continue the employment of the manager for a one-year period
(the "Contract Period") following the Change-in-Control in the same position
with the same duties and responsibilities and at the same compensation level as
existed prior to the Change-in-Control. If during the Contract Period the
manager's employment is terminated without cause, or the manager terminates his
employment for "good reason," the manager shall receive a lump-sum severance
payment (the "Severance Amount") of an amount equal to the average of the
manager's salary over the last three years, together with continuation of
insurance coverage for one year. The Contract Period for Messrs. Siegal and
Wolfort is two years and their Severance Amount equals 2.99 times the average of
the last three years' compensation. Each of the Retention Agreements contains a
non-competition prohibition for one year post-employment (two years in the cases
of Messrs. Siegal and Wolfort).

Wolfort Employment Agreement. Mr. Wolfort serves as President and Chief
Operating Officer of the Company pursuant to an employment agreement, effective
January 1, 2001, and terminating December 31, 2005. Under the Agreement, Mr.
Wolfort receives a Base Salary of $385,000, subject to possible increases as
determined by the Compensation Committee of the Board. Bonus compensation will
be determined by the Committee under the Senior Management Compensation Program,
subject to a minimum annual bonus of $20,000. Under the Agreement, Mr. Wolfort
was granted a ten (10) year option to purchase up to 300,000 shares at $1.97 per
share, the fair market value of the Company's Common Stock on the date of grant.
The option vests in annual installments of 20%, commencing January 1, 2002. If
the Company terminates Mr. Wolfort's employment without "cause" during the
employment term, he shall continue to receive his compensation under the
Agreement for a period ending on the earlier of (i) December 31, 2005 or (ii)
the second anniversary of his termination of employment. The employment
agreement contains a one year non-competition prohibition.

EMPLOYEE BENEFIT PLANS

Incentive Bonus Plan. Each of the Executive Officers participated in the
Senior Management Compensation Program which focuses on return on assets (ROA)
and growth in tonnage. ROA is calculated by dividing consolidated net income by
average monthly total assets. Net income and total assets can be adjusted by the
Committee for certain start-up costs or extraordinary items. Under the program,
each of the Executive Officers can be granted stock options based on the
Company's performance. The determination of the stock option grants is made by
the Compensation Committee. The Committee believes that this program further
aligns the interests of management and shareholders and will provide long-term
incentive for maximizing shareholder value.

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Stock Option Plan. 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 consultants. A total of
950,000 shares of Common Stock have been reserved for options under the Option
Plan of which 449,833 options are outstanding as of December 31, 2000. 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 Mr. Siegal 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 2010, subject to a ten-year
renewal option. A corporation owned by family members of Mr. Siegal provides
freight services to the Company. Payments to this entity were approximately $1.4
million in 2000. The Company believes these transactions are on terms no less
favorable to the Company than could be obtained from unrelated parties.

Mr. Wolfort purchased 300,000 shares of the Company's Common Stock from
treasury on February 22, 2001. The shares were purchased pursuant to a 5-year
note payable to the Company due and payable January 1, 2006. The principal
balance of $675,000 accrues interest at 5.07% per year and is secured by a
pledge of the acquired shares until the note is paid in full.

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 executive officers of the Company. The
Committee consists entirely of non-employee Directors of the Company. The
Committee meets once annually to review the compensation program for the
executive officers of the Company. This report documents the basis of
compensation for 2000, with regard to the Company's Chief Executive Officer and
other executive officers.

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;

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(iii) creating a system that would not be overly complicated or conflict with
the bonus system used at the senior 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.

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 2000 were reviewed and approved by the Compensation
Committee, and the amounts paid are included in the Summary Compensation Table.

Incentive Compensation. A significant portion of the executive officers'
compensation is incentive bonus-based and tied to the overall return on assets
of the Company. The 2000 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, 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 return on
assets 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.

Thomas M. Forman, Chairman
Martin H. Elrad
William E. MacDonald III

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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 December 1995
through December 2000.

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 December 29, 1995 through December 29, 2000

TOTAL RETURN TO STOCKHOLDERS
(ASSUMES $100 INVESTMENT ON 12/29/95)
[PERFORMANCE CHART]

OLYMPIC STEEL, INC. PEER GROUP INDEX(1) NASDAQ U.S. INDEX
------------------- ----------------- -----------------

12/29/95 100 100 100
12/31/96 290.02 110.49 123.01
12/31/97 177.86 106.86 150.94
12/31/98 57.15 84.28 211.61
12/31/99 54.29 110.28 400.93
12/29/00 22.5 65.11 243.41

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

(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.

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16

PROPOSAL TWO
INDEPENDENT AUDITORS

The Board of Directors, upon the recommendation of the Audit Committee, has
selected Arthur Andersen LLP as auditors for 2001. 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 2001.

Aggregate fees billed for the audit of the Company's annual financial
statements and quarterly reviews of the financial statements in 2000 were
$145,000.

All non-audit aggregate fees billed for professional services rendered
during fiscal year 2000 relating to tax return reviews and other tax consulting
fees were $12,500. The Audit Committee has considered whether the provision of
services for these fees is compatible with maintaining the independent
accountants' independence and has determined that such services have not
adversely affected Arthur Andersen LLP's independence.

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 expenses.

SHAREHOLDERS' PROPOSALS

The deadline for shareholders to submit proposals to be considered for
inclusion in the Proxy Statement for the 2002 Annual Meeting of Shareholders is
expected to be November 23, 2001.

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ANNUAL REPORT

The Company's Annual Report for the year ended December 31, 2000, 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.

MARC H. MORGENSTERN
Secretary

By Order of the Board of Directors
March 23, 2001

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APPENDIX A

OLYMPIC STEEL, INC.
AUDIT COMMITTEE CHARTER
DATED JUNE 2000

PURPOSE

The Audit Committee ("Committee") of Olympic Steel, Inc. and subsidiaries
("Company") will report to the Company's Board of Directors ("Board"), and
assist the Board in fulfilling its oversight responsibilities. The Committee
will review the financial reporting process, the systems of internal control,
the independent audit process, and the Company's process for monitoring
compliance with laws and regulations. Consistent with this function, the
Committee shall encourage continuous improvement of, and shall foster adherence
to, the Company's policies, procedures, and practices at all levels. In
performing its duties, the Committee will maintain effective working
relationships with the Board, senior and financial management, and the
independent accountants. To effectively perform his or her role, each Committee
member will obtain an understanding of the detailed responsibilities of
Committee membership as well as the Company's business, operations and risks.

The Committee's primary duties and responsibilities are to:

1) Serve as an independent and objective party to provide a degree of oversight
over the Company's financial reporting process and systems of internal
controls.

2) Review and appraise the audit efforts of the Company's independent
accountants, whom are ultimately accountable to the Board.

3) Provide an open avenue of communication among the independent accountants and
financial and senior management and the Board.

The Committee will primarily fill these responsibilities by carrying out the
duties enumerated in this Charter.

COMPOSITION

The Committee shall be comprised of three or more directors as determined by the
Board, each of whom shall be independent directors, and free from any
relationship that, in the opinion of the Board, would interfere with the
exercise of his or her independent judgement as a member of the Committee. All
members of the Committee shall be financially literate and have a working
familiarity with basic finance and accounting practices, and at least one member
of the Committee shall have accounting or financial management expertise.
Financial management expertise could include employment experience in finance or
accounting, professional certification in accounting, or a background that
results in financial sophistication including having served as a CEO, CFO, or
other senior officer with financial oversight responsibility.

For purpose of this Charter, the definition of independence includes the absence
of any relationship with the Company that may interfere with the exercise of
independence

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from management and the Company. In addition, the following restrictions apply
to every Committee member.

1) EMPLOYEES: A director who is an employee (including non-employee executive
officers) of the Company or any of its affiliates may not serve on the
Committee until three years following the termination of his or her
employment. In the event the employment relationship is with a former parent
or predecessor of the Company, the director could serve on the Committee
after three years following the termination of the relationship between the
Company and the former parent or predecessor.

2) BUSINESS RELATIONSHIP: A director (i) who is a partner, shareholder or
executive officer of an organization that has a business relationship with
the Company, or (ii) who has a direct business relationship with the Company
(i.e. consultant) may serve on the Committee only if the Company's Board
determines in its business judgement that the relationship does not interfere
with the director's exercise of independent judgement. In making a
determination regarding the independence of a director pursuant to this
paragraph, the Board should consider, among other things, the materiality of
the relationship to the Company, to the director, and if applicable, to the
organizations with which the director is affiliated.

"Business relationships" can include commercial, industrial, banking,
consulting, legal, accounting, and other relationships. A director can have
this relationship directly with the Company, or the director can be a
partner, officer or employee of an organization that has such a relationship.
The director may serve on the Committee without the above referenced Board
determinations after three years following the termination of such business
relationship.

3) CROSS COMPENSATION COMMITTEE LINK: A director who is employed as an
executive of another organization where any of the Company's executives
serves on that organization's compensation committee may not serve on the
Committee.

4) IMMEDIATE FAMILY: A director who is an immediate family member of an
executive officer of the Company or any of its affiliates cannot serve on the
Committee until three years following the termination of such employment
relationship. Immediate family members include spouses, parents, children,
siblings, mothers and fathers-in-law, sons and daughters-in-law, brothers and
sisters-in-law, and anyone (other than employees) who shares such person's
home.

TERM

The members of the Committee shall be elected annually by the Board and shall
serve until their successors shall be duly elected and qualified. Unless a Chair
of the Committee is elected by the full Board, the members of the Committee may
designate a Chairman by majority vote of full Committee membership.

AUTHORITY

In addition to performing the responsibilities hereinafter discussed, the
Committee may, or at the Board's request shall, investigate any financial or
accounting activity of

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20

the Company. The Committee is empowered with Board authority to execute such
investigations including the ability to retain third parties having special
competence as necessary to assist the Committee in fulfilling its
responsibilities.

MEETINGS

The Committee shall meet at least two times per year, with other meetings called
by the Committee Chair or any other member of the Committee as necessary. At a
minimum, the Committee shall meet with management and the independent
accountants prior to commencing the annual audit ("pre audit") and upon
conclusion of the annual audit ("post audit"). The purpose of these meetings is
further discussed in this Charter. The Committee shall meet at least annually
with management and the independent accountants in separate sessions to discuss
any matters that the Committee or each of these groups believes should be
discussed privately.

If the Committee deems it necessary, it may meet in executive session. Members
of the Committee and only those advisors and members of management designated by
a Committee member shall attend executive sessions.

ATTENDANCE

The Audit Committee Chair may request that members of management, internal
auditors, if applicable, representatives of the independent auditors, and others
be present at meetings of the Committee.

MINUTES

Minutes of each meeting are to be prepared and sent to Committee members and
also to the Company's directors who are not members of the Committee. The
minutes as finally approved shall be placed in the corporate minute books of the
Company by the Secretary or Assistant Secretary of the Company. Copies are to be
provided to the independent auditors.

RESPONSIBILITY AND DUTIES

The Committee shall assist the Board in fulfilling its responsibility to the
shareholders relating to corporate accounting, reporting practices of the
Company, and the quality and integrity of the financial reports of the Company.
In so doing, it is the responsibility of the Committee to maintain free and open
means of communication between the directors, the independent auditors, and the
senior and financial management of the Company.

In carrying out these responsibilities, the Audit Committee will:

PRE AUDIT

1) Review, prior to the annual audit, the proposed scope of the independent
auditors' audit examination. This review shall entail an understanding from
the independent

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21

auditors of the factors they considered in determining the audit scope and
procedures. Included among such considerations are the following:

* Industry, business, and internal control risk characteristics of the
Company.

* The significance of receivables, inventories, payables, and other balance
sheet accounts.

* The significance of the operating results of individual divisions or
subsidiaries.

* External reporting requirements.

* Significant current year events and issues affecting the audit plan.

* Quality of internal accounting controls over financial reporting.

* Review of risk assessment and audit approaches.

* Other areas to be covered during the audit engagement.

2) Review and approve the independent auditors' fee schedule as agreed upon by
management.

3) Review with management the extent of any non-audit services provided by the
independent auditors in relation to the independence and objectivity
required.

4) Review the statement of independence supplied by the independent accountants
in accordance with Independence Standards Board ("ISB") Standard No. 1,
Communications with Audit Committees.

INTERIM FINANCIAL STATEMENTS (QUARTERLY)

1) Understand how management develops and summarized quarterly financial
information, the extent to which the independent accountants review quarterly
financial information, and whether that review is performed on a pre or post
review basis.

2) Meet with management and with the independent accountant, either
telephonically or in person, to review the interim financial statements and
the results of the independent auditors review. (This may be done by the
Committee Chair or the entire Committee.)

3) To gain insight as to the fairness of the interim statements and disclosures,
obtain explanations from management and from the independent accountants on
whether:

* Changes in financial ratios and relationships in the interim financial
statements are consistent with changes in the Company's operations and
financing practices.

* Generally accepted accounting principles have been consistently applied.

* There are any actual or proposed changes in accounting or financial
reporting practices.

* There are any significant or unusual events or transactions.

* The Company's financial and operating controls are functioning
effectively.

A-4
22

* The Company has complied with the terms of loan agreements.

* The interim financial statements contain adequate and appropriate
disclosures.

POST AUDIT

1) Review financial results for the year with management and the independent
auditors upon completion of their audit. This review shall encompass:

* Significant financial and business issues addressed during the audit.

* Significant accounting estimates and judgements included in the financial
statements.

* Proposed audit adjustments, both recorded and unrecorded, and their
resolutions.

* Extent to which independent auditors review computer systems and
applications, the security of such systems and applications, and the
contingency plan for processing financial information in the event of a
systems downtime.

* The Company's annual report to shareholders, including the financial
statements, and supplemental disclosures required by generally accepted
accounting principles and the Securities and Exchange Commission (SEC).
The Form 10-K is to be reviewed and approved by the entire Board.

* Significant transactions that are not a normal part of the Company's
operations.

* Any changes during the year in the Company's accounting principles or
their applications.

2) Discuss with the independent auditors, without the presence of any management
or other Company personnel, the quality of the Company's financial and
accounting personnel, and the degree of cooperation received from Company
personnel during the audit.

3) Discuss with the independent auditors any relevant recommendations, which
they may have regarding "reportable conditions" or "material weaknesses" as
defined below. Topics to be considered during this discussion include:
improving internal financial controls, the selection of accounting
principles, and financial and management reporting systems. Review responses
of management to the comments and recommendations from the independent
accountants, if any.

REPORTABLE CONDITIONS in the internal control structure requires
communication noted during the audit (i.e. significant deficiencies in
the design or functioning of the internal control structure that could
adversely affect the Company's ability to record, process, summarize,
and report financial data consistent with the assertions of management
in the financial statements). The internal control structure consists
of the control environment, accounting systems, and control procedures.
The term "reportable condition" is intended to be a lower threshold
than "material weaknesses".

MATERIAL WEAKNESSES in the internal control structure is a reportable
condition in which the design or operation of the specific internal
control structure elements do not reduce to a relatively low level the
risk that errors

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23

or irregularities in amounts that would be material in relation to the
financial statements being audited may occur and not be detected within
a timely period by employees in the normal course of performing their
assigned functions.

4) Discuss the scope and quality of internal accounting controls over financial
reporting matters with Company management.

5) Determine if there were any management disagreements with the independent
auditors and determine disclosure obligations with respect thereto.

6) Review any outstanding litigation indicated in the legal letter responses
from legal counsel as requested by the independent accountants.

ONGOING

1) Review with management and the external auditors new opinions and releases
adopted by the FASB and the SEC and prospective new accounting rules and
policies to the extent applicable to the Company.

2) Apprise the Board of significant developments in the course of performing the
above duties through minutes and special presentations as necessary.

3) Recommend any appropriate changes in the duties of the Committee to the
Board.

4) Ensure the independence of the independent auditors.

5) Recommend to the Board the retention or replacement of the independent
auditors, and provide a written summary of the basis for replacement
recommendations to the Board.

6) Review the adequacy of this Charter at least annually.

ETHICS AND COMPLIANCE

1) Review the Company's policies and procedures, which include ethical conduct
and the Company's system to enforce these policies and procedures.

2) Review management's monitoring of the Company's compliance with its Ethics
Policy, and ensure that management has the proper review system in place to
ensure that the Company's financial statements, reports, and other financial
information disseminated to governmental agencies and the public satisfy
legal requirements.

REPORTING REQUIREMENTS

The Committee will prepare an annual report stating whether the Committee has
(i) reviewed and discussed the audited financial statements with management;
(ii) discussed with the independent accountants the matters required to be
discussed by Statement of Auditing Standards No. 61; and (iii) received certain
disclosures from the independent accountants regarding the auditor's
independence as required by the ISB Standard No. 1 and discussed with the
independent accountants the auditor's independence.

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This report will also include a statement by the Committee whether, based on its
review of the financial statements and discussions with management and the
independent accountants, anything has come to the attention of the Committee
that caused the Committee to believe that the audited financial statements
included in the Company's Annual Report on Form 10-K for the year then ended
contain an untrue statement of material fact necessary to make the statements
not misleading.

On an annual basis, this report will be included within the Proxy filing of the
Company.

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OLYMPIC STEEL, INC. YOUR VOTE IS IMPORTANT
c/o National City Bank
P.O. Box 92301
Cleveland, OH 44197-1200

Regardless of whether you plan to attend the Annual Meeting
of Shareholders, you can be sure your shares are
represented at the meeting by promptly returning
your proxy in the enclosed envelope.

DETACH CARD

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

OLYMPIC STEEL, INC.

ANNUAL MEETING OF SHAREHOLDERS TO BE HELD ON APRIL 30, 2001

THIS PROXY IS SOLICITED BY THE BOARD OF DIRECTORS

At the Annual Meeting of Shareholders of OLYMPIC STEEL, INC. to
be held on April 30, 2001, and at any adjournment, MICHAEL D.
SIEGAL and DAVID A. WOLFORT, and each of them, with full power
of substitution and resubstitution, are hereby authorized to
represent me and vote all my shares on the following matters:

1. Election of three Directors.

[ ]FOR all nominees listed below [ ]WITHHOLD AUTHORITY
(except as marked to the contrary below). to vote for all nominees listed below.

Instruction: To withhold authority to vote for any individual
nominee, strike a line through the nominee's name listed below.

Michael D. Siegal Thomas M. Forman James B. Meathe

FOR AGAINST ABSTAIN

2. Ratification of the appointment of Arthur Andersen LLP as
auditors. [ ] [ ] [ ]

3. Any other matter that may properly come before this meeting.

(Continued and to be signed on reverse side)
26

DETACH CARD

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

(Continued from other side)

YOU ARE ENCOURAGED TO SPECIFY YOUR CHOICES BY MARKING THE APPROPRIATE
BOXES, BUT YOU NEED NOT MARK ANY BOXES IF YOU WISH TO VOTE IN
ACCORDANCE WITH THE BOARD OF DIRECTORS' RECOMMENDATIONS. THE
PROXIES CANNOT VOTE YOUR SHARES UNLESS YOU SIGN AND RETURN THIS
CARD. Unless otherwise specified above, this Proxy will be
voted FOR the election as Directors of the nominees noted on
the reverse side and FOR the ratification of the appointment of
Arthur Andersen LLP as auditors.
DATE:________________, 2001

___________________________

Signature(s) of
shareholder(s)

NOTE: PLEASE SIGN EXACTLY AS
NAME APPEARS HEREON. JOINT
OWNERS SHOULD EACH SIGN. WHEN
SIGNING AS ATTORNEY, EXECUTOR,
ADMINISTRATOR, TRUSTEE OR
GUARDIAN, PLEASE GIVE FULL
TITLE AS SUCH.

PLEASE DATE, SIGN, AND RETURN IN THE ENCLOSED ENVELOPE -- NO POSTAGE NECESSARY.