Edgar Filing: OLYMPIC STEEL INC

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EXCHANGE ACT OF 1934

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OLYMPIC STEEL, INC.
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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 2004 Annual Meeting of Shareholders of Olympic
Steel, Inc. to be held at Olympic Steel, Inc., 5096 Richmond Road, Bedford
Heights, OH 44146, on Thursday, April 29, 2004, at 3:00 p.m. local time. We are
pleased to enclose the notice of our Annual Meeting of Shareholders, together
with a Proxy Statement, a Proxy and an envelope for returning the Proxy.

You are hereby asked to approve the election of Directors. Your Board of
Directors unanimously recommends that you vote "FOR" each of the director
nominees 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 25, 2004

[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 29, 2004

The Annual Meeting of Shareholders of Olympic Steel, Inc., an Ohio corporation
(the Company) will be held on Thursday, April 29, 2004, at 3:00 p.m. local time,
at Olympic Steel, Inc., 5096 Richmond Road, Bedford Heights, OH 44146, for the
following purposes:

1. To elect four Directors for a term expiring in 2006;

2. 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, 2004 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 25, 2004

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.

[OLYMPIC STEEL LOGO]
2004 ANNUAL MEETING

April 29, 2004

THE PROXY AND SOLICITATION

This Proxy Statement is being mailed on or about April 5, 2004, 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
2004 Annual Meeting of Shareholders to be held on Thursday, April 29, 2004, at
3:00 p.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 requires approval only by a plurality
of the votes cast. As a result, although abstentions and broker non-votes will
not be counted in determining the outcome of the vote, they will be counted in
determining whether a quorum has been achieved. The cost of soliciting the Proxy
will be borne by the Company.

PURPOSES OF ANNUAL MEETING

The Annual Meeting has been called for the purposes of (1) electing four
Directors of the class whose two-year terms of office will expire in 2006, and
(2) 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. Unless otherwise indicated in the enclosed Proxy, they
intend to vote for the election of the Director nominees named herein.

VOTING SECURITIES

The Board of Directors has established the close of business on March 12,
2004, as the record date for determining shareholders entitled to notice of the
meeting and to vote. On that date, 9,709,115 shares of Common Stock were
outstanding and entitled to one vote on all matters properly brought before the
Annual Meeting.

PROPOSAL ONE
ELECTION OF DIRECTORS

The Board of Directors is divided into two classes, whose members serve for
a staggered two-year term. The term of one class, which currently consists of
four Directors, expires in 2004; the term of the other class, which consists of
three Directors, expires in 2005

The Board of Directors has nominated David A. Wolfort, Martin H. Elrad and
Howard L. Goldstein to stand for reelection as Directors for a two-year term.
Ralph M. Della Ratta is a new nominee; Suren A. Hovsepian, a director since
1998, is retiring and is not standing for reelection. The two-year term will end
upon the election of Directors at the 2006 Annual Meeting of Shareholders.

At the Annual Meeting, the shares of Common Stock represented by valid
Proxies, unless otherwise specified, will be voted to elect the four the
Director-nominees. 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 2006

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

David A. Wolfort 51 President since January 2001 and Chief Operating 1987
Officer of the Company since 1995. He serves as a
director of the Metals Service Center Institute.
He is past Chairman of the Metals Service Center
Institute (MSCI) Political Action Committee and
Past Chairman of MSCI's Government Affairs
Committee, and a Regional Board Member of the
Northern Ohio Anti-Defamation League.

Ralph M. Della Ratta 50 Senior Managing Director since December 2003, Max- New
Ventures LLC, a venture capital firm. From 1998 to Nominee
2003, Mr. Della Ratta was Senior Managing Director
and Manager of Investment Banking Division of
McDonald Investments, Inc., and Director of Hyland
Software, Inc.

Martin H. Elrad 64 Private investor; also served for over five years 1987
as President of Solon Leasing Co. (a fleet vehicle
lessor).

Howard L. Goldstein, 51 Senior Partner of Mallah, Furman and Company (a 2004
C.P.A public accounting firm) for over five years.
Member of the American Institute of Certified
Public Accountants, the Florida Institute of
Certified Public Accountants, the Florida Board of
Accounting, the New Jersey Board of Certified
Public Accountants and the New Jersey Institute of
Certified Public Accountants.

DIRECTORS WHOSE TERMS EXPIRE IN 2005

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

Michael D. Siegal 51 Chief Executive Officer of the Company since 1984, 1984
and Chairman of the Board since 1994. Serves on
the following boards: American National Bank
(Cleveland, Ohio), Metals Service Center Institute
(MSCI), and Vice Chairman of the Development
Corporation for Israel.

Thomas M. Forman 58 Business consultant and private investor. 1994
President, Jupiter Licensing since 2002 (a
licensing agency for corporate trademarks and
retail brands). From 1999 to 2000, he served as
Chief Administrative Officer, General Counsel, and
co-founder of HealthSync (a provider of an
employer-paid health insurance marketplace). He
served as Vice President of Sealy Corporation (a
manufacturer and distributor of bedding) from 1994
to 1997.

James B. Meathe 47 President and Chief Operating Officer of Palmer & 2001
Cay, Inc. (an insurance and brokerage firm) since
January 2003. Managing Director and Chairman
Midwest Region of Marsh Inc. (a risk and insurance
services firm) from 1999 to 2002. Previously, he
served in several senior management positions with
Marsh Inc.

BOARD OF DIRECTORS MEETINGS AND COMMITTEES

The Board of Directors of the Company held four meetings in 2003. The Board
of Directors has an Audit Committee, a Compensation Committee, and a Nominating
Committee, each of which consisted in 2003 of Messrs. Elrad, Forman, and Meathe.
Upon his election to the Board, Howard Goldstein joined the Nominating and
Compensation Committees. He also replaced Mr. Meathe as the chairman of the
Audit Committee. The Audit Committee held four meetings and the Compensation and
Nominating Committees each held one meeting in 2003. 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 2003. 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, now chaired by Mr. Goldstein, 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. Each
committee member is an "independent director" as defined in the National
Association of Securities Dealers, Inc. listing standards. Mr. Goldstein has
been designated by the Board as the "audit committee financial expert" under SEC
rules and he also meets the NASD's professional experience requirements. The
Audit Committee operates pursuant to a written charter, which complies with the
applicable provisions of the Sarbanes-Oxley

Act of 2002 and related rules of the SEC and NASD. A copy of the Audit Committee
charter is attached as Appendix A to this Proxy Statement. As part of fulfilling
its responsibilities, the Audit Committee reviewed and discussed the audited
consolidated financial statements for 2003 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 letter required by
Independent Standards Board Standard No. 1 (Independence Discussions with Audit
Committee) from PricewaterhouseCoopers, 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, 2003 in the Company's Annual Report on form 10-K filed
with the Securities and Exchange Commission.

James B. Meathe, 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, and
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 2005 Annual Meeting may do so by providing written
notice to the Company in care of Marc H. Morgenstern, Secretary, no later than
December 30, 2004.

COMPENSATION OF DIRECTORS

During 2003, 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 meeting 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.

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, 2004, based upon information furnished to the Company:

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

Michael D. Siegal 1,599,333(1) 16.4%
5096 Richmond Road
Cleveland, OH 44146
David A. Wolfort 742,000(2) 7.5%
5096 Richmond Road
Cleveland, OH 44146
Dimensional Fund Advisors 694,700(3) 7.2%
1299 Ocean Avenue, 11th Floor
Santa Monica, CA 90401
Fifth Third Bancorp/Fifth Third Bank 597,121(4) 6.2%
Fifth Third Center
Cincinnati, OH 45263
Towle & Co. 494,878(5) 5.1%
12855 Flushing Meadow Drive
St. Louis, MO 63131

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

(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 68,333 shares issuable upon exercise of options exercisable within
sixty days of March 12, 2004.

(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 239,000 shares issuable upon exercise of options
exercisable within sixty days of March 12, 2004.

(3) Based on Schedule 13G filed with the Securities and Exchange Commission on
or about February 6, 2004.

(4) Based on Schedule 13G filed with the Securities and Exchange Commission on
or about February 13, 2004.

(5) Based on Schedule 13D filed with the Securities and Exchange Commission on
or about June 9, 2003.

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 named in the compensation table included herein, and all the
Directors, Director nominees, and executive officers as a group as of March 12,
2004.

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

Michael D. Siegal 1,599,333(1) 16.4%
David A. Wolfort 742,000(2) 7.5%
Richard T. Marabito 47,000(3) *
Heber MacWilliams 33,300(4) *
Richard A. Manson 23,742(4) *
Martin H. Elrad 28,000(4) *
Suren A. Hovsepian 23,000(4) *
Thomas M. Forman 21,650(4) *
James. B. Meathe 10,200(4) *
Howard Goldstein 0 *
Ralph M. Della Ratta 0 *
All Directors, Director nominees, and executive officers as
a group (11 persons) 2,528,955(5) 24.9%

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

* Less than 1%.

(3) Does not include 3,000 shares held in various trusts for the benefit of Mr.
Marabito's children. Mr. Marabito disclaims beneficial ownership of such
shares. Includes 41,500 shares issuable upon exercise of options exercisable
within sixty days of March 12, 2004.

(4) Includes shares issuable upon exercise of options exercisable within sixty
days of March 12, 2004, as follows: MacWilliams - 25,500, Manson - 19,167,
Elrad - 23,000, Hovsepian - 18,000, Forman - 19,500, Meathe - 8,000.

(5) Includes 462,000 shares issuable upon exercise of options exercisable within
sixty days of March 12, 2004.

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 2003 and Form 5 and amendments thereto furnished to the
Company with respect to 2003, 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 and Directors were timely made.

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, 2003, 2002,
and 2001 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, 2003 $400,000 $ 0 $ 0
Chairman of the Board and 2002 400,000 0 5,500
Chief Executive Officer 2001 400,000 0 5,250

David A. Wolfort, 2003 $385,000 $ 20,000 $ 0
President and 2002 385,000 20,000 5,500
Chief Operating Officer 2001 383,558 20,000 5,250

Richard T. Marabito, 2003 $200,000 $ 0 $ 0
Chief Financial Officer 2002 187,019 0 5,500
2001 175,000 0 5,250

Heber MacWilliams, 2003 $165,000 $ 0 $ 0
Chief Information Officer 2002 150,000 105,000 5,500
2001 150,000 10,000 5,250

Richard A. Manson(2), 2003 $122,000 $ 0 $ 0
Treasurer

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

(1) "All Other Compensation" includes contributions to the Company's 401(k) plan
to match pre-tax elective deferral contributions.

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

The following table sets forth information regarding individual grants of
stock options pursuant to the Company's Stock Option Plan during 2003 to each of
the Named Executive Officers.

2003 INDIVIDUAL OPTION GRANTS

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

Michael D. Siegal 10,000 7.4% $3.50 5/8/13 $24,418
David A. Wolfort 10,000 7.4% $3.50 5/8/13 $24,418
Richard T. Marabito 10,000 7.4% $3.50 5/8/13 $24,418
Heber MacWilliams 5,000 3.7% $3.50 5/8/13 $12,209
Richard A. Manson 7,500 5.5% $3.50 5/8/13 $18,314

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

(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
56%, no dividend yield, a risk-free interest rate of 3.77% and a projected
exercise period of 10 years.

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, 2003.

AGGREGATED OPTION EXERCISES IN 2003
AND DECEMBER 31, 2003 VALUES

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

Michael D. Siegal 0 0 56,666 21,667 $132,966 $ 94,534
David A. Wolfort 0 0 168,000 201,000 $860,842 $1,214,018
Richard T. Marabito 0 0 30,833 20,667 $ 84,006 $ 88,954
Heber MacWilliams 0 0 20,167 10,333 $ 32,894 $ 44,476
Richard A. Manson 0 0 13,333 12,167 $ 36,486 $ 51,299

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

(1) These values are based on the spread between the respective exercise price
of outstanding stock options and the fair market value of the Company's
Common Stock at December 31, 2003 ($8.21). These amounts may not represent
amounts actually realized by the Named Executive Officers.

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 Officer for a certain 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
Officer's employment is terminated without cause, or the Officer terminates his
employment for "good reason," the Officer shall receive a lump-sum severance
payment (the "Severance Amount") 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. The Contract Period for Mr. Marabito is one year and his Severance
Amount equals one times the average of his 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 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 an option to
purchase 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 Plans. Each of the Executive Officers participated in the
Senior Management Compensation Program which focuses on pre-tax income and other
key operating metrics. 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.

Stock Option Plan. Pursuant to the provisions of the Company's Stock
Option Plan (the "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 (ISO's), within the meaning of Section 422 of the Internal Revenue Code
of 1986, as amended, and nonqualified stock options. ISO's are not available to
consultants. The Plan will terminate in January 2009; however, termination of
the Plan will not affect outstanding options. The Compensation Committee of the
Board of Directors administers the Plan. The Compensation 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.
Currently, there are approximately 27 employees and outside directors eligible
to participate in the Plan.

The following table provides information as of December 31, 2003 regarding
shares outstanding and available for issuance under the Company's existing stock
option plan:

NUMBER OF
SECURITIES
NUMBER OF SECURITIES REMAINING AVAILABLE
TO BE ISSUED UPON WEIGHTED-AVERAGE FOR FUTURE ISSUANCE
EXERCISE OF EXERCISE PRICE OF UNDER EQUITY
PLAN CATEGORY OUTSTANDING OPTIONS OUTSTANDING OPTIONS COMPENSATION PLANS
------------- -------------------- ------------------- -------------------

Equity compensation plans approved
by security holders 1,095,833 $4.89 183,167
Equity compensation plans not
approved by security holders 0 N/A 0
--------- ----- -------
Totals 1,095,833 $4.89 183,167
========= ===== =======

RELATED PARTY TRANSACTIONS

A corporation owned by family members of Mr. Siegal since 1978 handled a
portion of the freight activity for the Company's Cleveland operation. Payments
to this entity approximated $1.3 million for the year ended December 31, 2003. A
partnership owned by family members of Mr. Siegal since 1956 has owned one of
the Cleveland warehouses and currently leases it to the Company at an annual
rental of $195,300. The lease expires in 2010.

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,
full recourse promissory note payable to the Company due and payable on or
before January 1, 2006 bearing interest at 5.07% per annum. The note is
collateralized by a pledge of the underlying shares. At December 31, 2003, the
outstanding balance of principal and interest was $748,558.

Mr. Siegal and Mr. Wolfort are minority investors in a company that
provides online services to Olympic's employees with respect to their retirement
plan accounts. Mr. Siegal also serves as a director for that company.

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 2003, 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; (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 2003 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 pretax income of
the Company. Under the provisions of the Incentive Plan, no bonuses were awarded
in 2003 to the principal executive officers; however, Mr. Wolfort received his
contractual minimum bonus. The Company considers stock options to be another
award of compensation. Stock options were granted to each of the executive
officers and are included in the "2003 Individual Option Grants" table.

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 pretax income
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
James B. Meathe

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 indices to peer groups from December 1998
through December 2003.

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.

TOTAL RETURN TO STOCKHOLDERS
(ASSUMES $100 INVESTMENT ON 12/31/98)

[GRAPH]

---------------------------------------------------------------------------------------------
TOTAL RETURN
ANALYSIS 12/31/98 12/31/99 12/31/00 12/31/01 12/31/02 12/31/03

---------------------------------------------------------------------------------------------
OLYMPIC STEEL, INC. $100.00 $ 94.98 $ 39.37 $ 50.99 $ 63.97 $164.14
---------------------------------------------------------------------------------------------
PEER GROUP(1) $100.00 $122.32 $103.86 $103.72 $100.54 $161.71
---------------------------------------------------------------------------------------------
NASDAQ US INDEX $100.00 $189.46 $115.03 $ 90.81 $ 62.18 $ 93.27
---------------------------------------------------------------------------------------------

Source: CTA Public Relations www.ctapr.com (303) 665-4200. Data from BRIDGE
Information Systems, Inc.

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

(1) Peer Group consists of A.M. Castle & Co., Gibraltar Steel Corporation,
Shiloh Industries, Inc. Steel Technologies Inc., Ryerson Tull, Inc.,
Reliance Steel Company, and Worthington Industries, Inc.

INDEPENDENT AUDITORS

The following table sets forth the aggregate fees billed to the Company in
2003 by PricewaterhouseCoopers LLP.

Audit Fees $347,350
All Other Fees:
Tax Fees 8,900
--------
Total Fees $356,250
========

Audit Fees consist of fees for assurance and related services that are
reasonably related to the performance of the audit or review of the Company's
financial statements.

Tax Fees consist of fees for professional assistance regarding federal tax
compliance.

All services listed above were pre-approved by the Audit Committee, which
concluded that the provision of such services by PricewaterhouseCoopers LLP was
compatible with the maintenance of that firm's independence in the conduct of
its auditing functions. The Audit Committee Charter provides for pre-approval of
non-audit services.

Representatives of PricewaterhouseCoopers 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 2005 Annual Meeting of Shareholders is
expected to be November 29, 2004.

ANNUAL REPORT

The Company's Annual Report for the year ended December 31, 2003, including
financial statements of the Company and the report thereon of
PricewaterhouseCoopers 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 25, 2004

APPENDIX A

OLYMPIC STEEL, INC.
AUDIT COMMITTEE CHARTER

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 auditors. To effectively perform his or her role, each Committee
member will fulfill the duties and responsibilities of Committee membership that
are set forth below.

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
auditors. The Committee has direct responsibility for the appointment,
compensation, retention, and oversight of the work of the independent
auditors.

3) Provide an open avenue of communication among the independent auditors
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 within the
requirements of Section 10A(m)(3) of the Securities Exchange Act of 1934 and of
the National Association of Securities Dealers, Inc. ("NASD"). 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, including at a minimum,
the expertise required by rules of the Securities and Exchange Commission
("SEC") and the requirements of the NASD. No member of the Audit Committee shall
receive, directly or indirectly, any compensation from the Company other than
his or her Directors' fees and benefits. A director who is an employee 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. A director who is
employed as an executive of another organization where any of the

A-1

Company's executives serves on that organization's compensation committee may
not serve on the Committee.

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.

MEETINGS

The Committee shall meet as often as it determines is advisable, but at a
minimum, the Committee shall meet with management and the independent auditors
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 auditors in separate sessions to discuss any matters that the
Committee or each of these groups believes should be discussed privately.

As necessary, the Committee shall 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.

The Audit Committee Chair may request that members of management, internal
auditors, 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

A-2

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 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 and the independent auditors the extent of any
non-audit services provided by the independent auditors and pre-approve
any non-audit relationships 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, and the extent to which the independent auditors review
quarterly financial information and the Form 10-Q quarterly reports.

2) Meet with management and with the independent auditors, either
telephonically or in person, to review the interim financial statements,
management's discussion, and analysis to be included in the quarterly
reports on Form 10-Q, and the results of the independent auditors
review. (This may be done by the Committee Chair, its designee, or the
entire Committee.)

A-3

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

* All critical accounting policies and practices to be used.

* Whether generally accepted accounting principles have been
consistently applied.

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

* Whether there are any significant or unusual events or transactions.

* The Company's compliance with the terms of loan agreements and status
of any litigation.

* Whether the interim financial statements contain adequate and
appropriate disclosures.

* Any communications between the independent auditors and management,
such as any management letter or schedule of unadjusted differences.

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, reserves and other judgments
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 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.

A-4

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 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 auditors.

ONGOING

1) Review with management and the independent auditors new opinions and
releases adopted by the FASB, the SEC or other governmental or
regulatory agencies, and prospective new accounting rules and policies
to the extent applicable to the Company.

2) Make regular reports to the Board. 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; including review
and annual evaluation of all independent audit team personnel.

A-5

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

6) Discuss with management the Company's earnings press releases, including
the use of non-GAAP or pro forma information, as well as financial
information and earnings guidance, if any, provided analysts.

ETHICS AND COMPLIANCE

1) Obtain from independent auditors assurance that, if they becomes aware of any
illegal or possible illegal act, they will ensure that the Audit Committee is
adequately informed and will provide a report if they have reached specified
conclusions with respect to such activities.

2) Obtain reports from management, the Company's chief internal auditor and the
independent auditors that the Company is in conformity with applicable legal
requirements and the Company's ethics code, including those special ethics
obligations for employees with financial reporting responsibilities.

3) Ensure that the Company conducts an appropriate annual review of all related
party transactions and that all such transactions are approved by the Audit
Committee or the entire Board of Directors.

4) Establish procedures for the receipt, retention and treatment of complaints
received by the Company regarding accounting, internal accounting controls or
auditing matters, and the confidential, anonymous submission by employees of
concerns regarding questionable accounting or auditing matters.

5) Discuss guidelines and policies governing the process by which management
assesses and manages the Company's exposure to risk, the Company's major
financial risk exposures and the steps management has taken to monitor and
control such risks.

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 auditors the matters required to be
discussed by Statement of Auditing Standards No. 61; and (iii) received certain
disclosures from the independent auditors regarding the auditors' independence
as required by the ISB Standard No. 1 and discussed with their independent
auditors.

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 auditors, 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 statement
filing of the Company.

A-6

INVESTIGATORY AUTHORITY

In addition to performing the responsibilities discussed herein, the
Committee may, or at the Board's request shall, investigate any financial or
accounting activity of the Company. The Committee is empowered with Board
authority to execute such investigations including the ability to retain third
parties, including outside counsel, having special competence as necessary to
assist the Committee in fulfilling its responsibilities. The Company shall be
required to provide all funding as is determined necessary by the Committee.

Adopted: March 24, 2004.

A copy of this charter is posted on the Company's website. Go to
www.olysteel.com and click on Investor Relations.
A-7

PROXY PROXY

[OLYMPIC STEEL LOGO]

ANNUAL MEETING OF SHAREHOLDERS TO BE HELD ON APRIL 29, 2004

THIS PROXY IS SOLICITED BY THE BOARD OF DIRECTORS

At the Annual Meeting of Shareholders of OLYMPIC STEEL, INC. to be held on
April 29, 2004, 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:

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.

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

(Continued and to be signed on reverse side.)

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

OLYMPIC STEEL, INC.
PLEASE MARK VOTE IN OVAL IN THE FOLLOWING MANNER USING DARK INK ONLY. [ ]

[ ]

1. ELECTION OF FOUR DIRECTORS: 2. Any other matter that may properly come before
Nominees: David A. Wolfort For Withhold For All this Meeting.
Ralph M. Della Ratta All All Except
Martin H. Elrad [ ] [ ] [ ]
Howard Goldstein
INSTRUCTION: To withhold authority to vote for any individual
nominee, write the nominee's name on the space provided below.

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

Dated: , 2004
-----------------------

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

---------------------------------------------------------
Signature or Signatures
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.

--------------------------------------------------------------------------------
- FOLD AND DETACH HERE -

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. PROXY