-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: webmaster@www.sec.gov Originator-Key-Asymmetric: MFgwCgYEVQgBAQICAf8DSgAwRwJAW2sNKK9AVtBzYZmr6aGjlWyK3XmZv3dTINen TWSM7vrzLADbmYQaionwg5sDW3P6oaM5D3tdezXMm7z1T+B+twIDAQAB MIC-Info: RSA-MD5,RSA, TAKUlPXfsSmmeVt1xF9I40LjkaWEk7vMPylO3eU6+qmvqTZ+pCnqJGDdLTJrWWxL RSMgR1AA2pgWWMh1yAcduQ== /in/edgar/work/20000811/0000950131-00-004842/0000950131-00-004842.txt : 20000921 0000950131-00-004842.hdr.sgml : 20000921 ACCESSION NUMBER: 0000950131-00-004842 CONFORMED SUBMISSION TYPE: 10-Q PUBLIC DOCUMENT COUNT: 6 CONFORMED PERIOD OF REPORT: 20000630 FILED AS OF DATE: 20000811 FILER: COMPANY DATA: COMPANY CONFORMED NAME: RYERSON TULL INC /DE/ CENTRAL INDEX KEY: 0000790528 STANDARD INDUSTRIAL CLASSIFICATION: [3312 ] IRS NUMBER: 363425828 STATE OF INCORPORATION: DE FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: 10-Q SEC ACT: SEC FILE NUMBER: 001-09117 FILM NUMBER: 694274 BUSINESS ADDRESS: STREET 1: 2621 WEST 15TH PLACE CITY: CHICAGO STATE: IL ZIP: 60608 BUSINESS PHONE: 7737622121 MAIL ADDRESS: STREET 1: 2621 WEST 15TH PLACE CITY: CHICAGO STATE: IL ZIP: 60608 FORMER COMPANY: FORMER CONFORMED NAME: INLAND STEEL INDUSTRIES INC /DE/ DATE OF NAME CHANGE: 19920703 10-Q 1 0001.txt FORM 10-Q Second Quarter - 2000 UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 FORM 10-Q [X] Quarterly Report Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934 For the period ended June 30, 2000 or [_] Transition Report Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934 For the transition period from __________ to __________ -------------------- Commission file number 1-9117 I.R.S. Employer Identification Number 36-3425828 RYERSON TULL, INC. (a Delaware Corporation) 2621 West 15th Place Chicago, Illinois 60608 Telephone: (773) 762-2121 Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes X No --- --- Indicate the number of shares outstanding of each of the issuer's classes of common stock, as of the latest practicable date: 24,774,001 shares of the Company's Common Stock ($1.00 par value per share) were outstanding as of August 7, 2000. PART I. FINANCIAL INFORMATION ----------------------------- Item 1. Financial Statements RYERSON TULL, INC. AND SUBSIDIARY COMPANIES Consolidated Statement of Operations (Unaudited)
=============================================================================================== Dollars in Millions (except per share data) ------------------------------------------- Three Months Ended Six Months Ended June 30 June 30 ------------------------ ---------------------- 2000 1999 2000 1999 ------ ------ -------- -------- NET SALES $760.8 $708.1 $1,547.1 $1,399.5 Cost of materials sold 610.9 543.1 1,231.2 1,076.9 ------ ------ -------- -------- GROSS PROFIT 149.9 165.0 315.9 322.6 Operating expenses 128.1 126.0 258.7 249.3 Depreciation and amortization 8.3 9.1 16.7 17.9 Restructuring and plant closure costs 23.3 3.6 27.8 3.6 Pension curtailment gain - - (4.4) - ------ ------ -------- -------- OPERATING PROFIT (LOSS) (9.8) 26.3 17.1 51.8 Other revenue and expense, including interest income - 0.2 0.1 0.6 Interest and other expense on debt (6.9) (6.9) (13.1) (13.2) ------ ------ -------- -------- INCOME (LOSS) BEFORE INCOME TAXES (16.7) 19.6 4.1 39.2 PROVISION FOR INCOME TAXES (3.1) Cr. 9.3 6.7 18.4 ------ ------ -------- -------- INCOME (LOSS) FROM CONTINUING OPERATIONS BEFORE MINORITY INTEREST (13.6) 10.3 (2.6) 20.8 MINORITY INTEREST - - - 0.7 ------ ------ -------- -------- INCOME (LOSS) FROM CONTINUING OPERATIONS (13.6) 10.3 (2.6) 20.1 DISCONTINUED OPERATIONS - INLAND STEEL COMPANY Gain on Sale - 17.3 - 17.3 ------ ------ -------- -------- NET INCOME (LOSS) $(13.6) $ 27.6 $ (2.6) $ 37.4 ====== ====== ======== ========
See notes to consolidated financial statements 1 RYERSON TULL, INC. AND SUBSIDIARY COMPANIES Consolidated Statement of Operations (Unaudited) ===============================================================================
Dollars in Millions (except per share data) ------------------------------------------- Three Months Ended Six Months Ended June 30 June 30 ------------------ ---------------- 2000 1999 2000 1999 -------- -------- ------- ------- EARNINGS PER SHARE OF COMMON STOCK Basic: Income (loss) from continuing operations $(0.55) $0.41 $(0.11) $0.83 Inland Steel Company - gain on sale - 0.69 - 0.72 ------ ----- ------ ----- Net Income (Loss) $(0.55) $1.10 $(0.11) $1.55 Diluted: Income (loss) from continuing operations $(0.55) $0.41 $(0.11) $0.83 Inland Steel Company - gain on sale - 0.69 - 0.72 ------ ----- ------ ----- Net Income (Loss) $(0.55) $1.10 $(0.11) $1.55 STATEMENT OF COMPREHENSIVE INCOME NET INCOME (LOSS) $(13.6) $27.6 $(2.6) $37.4 ------ ----- ----- ----- OTHER COMPREHENSIVE INCOME (LOSS): Foreign currency translation adjustments (0.5) 0.6 (1.1) 0.3 Minimum pension liability adjustment, net of tax of $9.5 - - - 14.1 ------ ----- ----- ----- COMPREHENSIVE INCOME (LOSS) $(14.1) $28.2 $(3.7) $51.8 ====== ===== ===== ===== OPERATING DATA SHIPMENTS (Tons in Thousands) 880.1 860.3 1,794.6 1,679.4
See notes to consolidated financial statements 2 RYERSON TULL, INC. AND SUBSIDIARY COMPANIES Consolidated Statement of Cash Flows (Unaudited) ================================================================================
Dollars in Millions ------------------- Six Months Ended June 30 ------------------- 2000 1999 ------ ------ OPERATING ACTIVITIES Net income (loss) $ (2.6) $ 37.4 ------ ------ Adjustments to reconcile net income to net cash (used for) provided from operating activities: Depreciation and amortization 16.7 17.9 Deferred employee benefit cost (4.7) 0.9 Deferred income taxes (0.3) 9.0 Restructuring and plant closure costs 27.8 - Gain from the sale of Inland Steel Company - (17.3) Change in assets and liabilities, excluding effects of acquisitions: Receivables (73.9) (27.4) Inventories (96.6) 22.6 Other assets 0.2 2.5 Accounts payable 79.5 (10.2) Accrued liabilities (19.5) (20.4) Other deferred items 1.7 0.7 ------ ------ Net adjustments (69.1) (21.7) ------ ------ Net cash (used for) provided from operating activities (71.7) 15.7 ------ ------ INVESTING ACTIVITIES Acquisitions (Note 2) - (66.0) Capital expenditures (16.6) (16.3) Proceeds from sales of assets 2.4 0.3 ------ ------ Net cash used for investing activities (14.2) (82.0) ------ ------ FINANCING ACTIVITIES Debt retirement (11.8) - Short-term borrowing 83.6 5.0 Dividends paid (2.6) (2.6) ------ ------ Net cash provided from financing activities 69.2 2.4 ------ ------ Net decrease in cash and cash equivalents (16.7) (63.9) Cash and cash equivalents - beginning of year 39.5 99.6 ------ ------ Cash and cash equivalents - end of period $ 22.8 $ 35.7 ====== ====== SUPPLEMENTAL DISCLOSURES Cash paid during the period for: Interest $ 12.7 $ 11.7 Income taxes, net 7.1 13.4
See notes to consolidated financial statements 3 RYERSON TULL, INC. AND SUBSIDIARY COMPANIES Consolidated Balance Sheet (Unaudited) ================================================================================
Dollars in Millions ------------------------------------------------ ASSETS June 30, 2000 December 31, 1999 - ------ -------------------- --------------------- (unaudited) CURRENT ASSETS Cash and cash equivalents $ 22.8 $ 39.5 Receivables less provision for allowances, claims and doubtful accounts of $8.0 and $7.2, respectively 381.7 307.9 Inventories - principally at LIFO 639.3 542.7 Deferred income taxes 2.8 - -------- -------- Total current assets 1,046.6 890.1 INVESTMENTS AND ADVANCES 24.5 30.0 PROPERTY, PLANT AND EQUIPMENT Valued on basis of cost $590.4 $579.0 Less accumulated depreciation 317.5 272.9 305.8 273.2 ------ ------ DEFERRED INCOME TAXES 50.7 56.4 PREPAID PENSION COSTS 23.3 19.7 EXCESS OF COST OVER NET ASSETS ACQUIRED 98.9 108.0 OTHER ASSETS 9.7 9.8 -------- -------- Total Assets $1,526.6 $1,387.2 ======== ======== LIABILITIES AND STOCKHOLDERS' EQUITY - ------------------------------------ CURRENT LIABILITIES Accounts payable $ 280.7 $ 201.2 Accrued liabilities 71.8 78.4 Short-term borrowing 83.6 - -------- -------- Total current liabilities 436.1 279.6 LONG-TERM DEBT 246.6 258.8 DEFERRED EMPLOYEE BENEFITS AND OTHER 152.1 151.0 -------- -------- Total liabilities 834.8 689.4 COMMITMENTS & CONTINGENCIES - - STOCKHOLDERS' EQUITY (Schedule A) 691.8 697.8 -------- -------- Total Liabilities and Stockholders' Equity $1,526.6 $1,387.2 ======== ========
See notes to consolidated financial statements 4 RYERSON TULL, INC. AND SUBSIDIARY COMPANIES Notes to Consolidated Financial Statements (Unaudited) ================================================================================ NOTE 1/FINANCIAL STATEMENTS Results of operations for any interim period are not necessarily indicative of results of any other periods or for the year. The financial statements as of June 30, 2000 and for the three-month and six-month periods ended June 30, 2000 and 1999 are unaudited, but in the opinion of management include all adjustments, consisting of normal recurring adjustments, necessary for a fair presentation of results for such periods. These financial statements should be read in conjunction with the financial statements and related notes contained in the Annual Report on Form 10-K for the year ended December 31, 1999. NOTE 2/ACQUISITION On February 1, 1999, the Company completed the acquisition of Washington Specialty Metals Corporation, an eight-location metals service center specializing in value-added stainless steel. The Company purchased all of the outstanding stock of Washington Specialty Metals for approximately $66 million. The acquisition has been accounted for by the purchase method of accounting and the purchase price has been allocated to assets acquired and liabilities assumed. Goodwill arising from the acquisition will be amortized using the straight-line method over 25 years. NOTE 3/MERGER On February 25, 1999, the Company and the pre-merger Ryerson Tull, Inc. (RT) merged and each share of RT Class A common stock was converted into 0.61 share of Company common stock. Upon consummation of the merger, the Company changed its name from Inland Steel Industries, Inc. to Ryerson Tull, Inc. The merger has been accounted for as a purchase for financial reporting purposes. Under the purchase method of accounting, the assets and liabilities of RT in proportion to the 13% minority interest were recorded at their fair values at the effective time of the merger. 5 NOTE 4/EARNINGS PER SHARE
Dollars and Shares In Millions (except per share data) --------------------------------------- Three Months Ended Six Months Ended June 30 June 30 ------------------- ---------------- 2000 1999 2000 1999 ------- ------ ------ ----- Basic earnings per share - ------------------------ Income (loss) from continuing operations $(13.6) $10.3 $(2.6) $20.1 Less preferred stock dividends - .1 .1 .1 ------ ----- ----- ----- Income (loss) from continuing operations available to common stockholders (13.6) 10.2 (2.7) 20.0 Inland Steel Company - gain on sale - 17.3 - 17.3 ------ ----- ----- ----- Net income (loss) available to common stockholders $(13.6) $27.5 $(2.7) $37.3 ====== ===== ===== ===== Average shares of common stock outstanding 24.8 25.0 24.8 24.0 ====== ===== ===== ===== Basic earnings per share From continuing operations $ (.55) $ .41 $(.11) $ .83 Inland Steel Company - gain on sale - .69 - .72 ------ ----- ----- ----- Net income (loss) $ (.55) $1.10 $(.11) $1.55 ====== ===== ===== ===== Diluted earnings per share - -------------------------- Net income (loss) available to common stockholders $(13.6) $27.5 $(2.7) $37.3 ====== ===== ===== ===== Average shares of common stock outstanding 24.8 25.0 24.8 24.0 Dilutive effect of stock options - .1 - .1 ------ ----- ----- ----- Shares outstanding for diluted earnings per share calculation 24.8 25.1 24.8 24.1 ====== ===== ===== ===== Diluted earnings (loss) per share From continuing operations $ (.55) $ .41 $(.11) $ .83 Inland Steel Company - gain on sale - .69 - .72 ------ ----- ----- ----- Net income (loss) $ (.55) $1.10 $(.11) $1.55 ====== ===== ===== =====
6 NOTE 5/RESTRUCTURING CHARGE In the second quarter of 2000, the Company recorded a restructuring charge of $23.3 million. The charge is the result of realigning geographic divisions to improve responsiveness to local markets, exiting non-core businesses and centralizing administrative services to achieve economies of scale. Details of the restructuring charge, which includes severance for 319 employees, are as follows:
Restructuring Utilized Balance at (In millions) Charge in Quarter June 30, 2000 - -------------------------------------------------------------------------------- Write-down of long-lived assets $ 9.3 $ 9.3 $ - Employee costs 7.4 2.4 5.0 Tenancy costs and other 6.6 0.1 6.5 - -------------------------------------------------------------------------------- $23.3 $11.8 $11.5
It is expected that the restructuring actions will be substantially completed by year-end 2000. NOTE 6/TAXES The effective tax rate has changed from the prior periods due to an increase in permanent tax differences arising from the restructuring charge and an increase in the proportion of permanent differences to pretax income. 7 Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations Results of Operations - Comparison of Second Quarter 2000 to Second Quarter 1999 - -------------------------------------------------------------------------------- For the second quarter of 2000, the Company reported a consolidated net loss of $13.6 million, or 55 cents per diluted share as compared with net income of $27.6 million, or 41 cents per diluted share from continuing operations in the year-ago quarter. Included in the second quarter 2000 results was a pre-tax restructuring charge of $23.3 million, or 67 cents per share. Excluding this charge, the Company earned 12 cents per diluted share in the quarter. Sales for the second quarter of 2000 increased 7.5 percent to $760.8 million from the same period a year ago. Volume increased 2.3 percent while average selling price increased 5 percent. Most of the increase in average selling price is attributable to surcharges on stainless product, which are directly passed through to the customers. Gross profit per ton declined to $170 in the second quarter of 2000 from $192 in the year-ago quarter due to the Company's inability to pass along all of the increase in material costs to customers. Gross profit margin declined from 23.3% a year ago to 19.7% in the second quarter. However, productivity gains and continued expense control helped offset some of the loss in gross profit margins. Expenses, defined as operating expenses plus depreciation and amortization, were reduced to $155 per ton in the second quarter of 2000 from $157 per ton in the second quarter of 1999. The Company is undergoing a restructuring to optimize facility use and improve efficiencies. The $23.3 million restructuring charge consists of severance for 319 employees and asset write-offs resulting from closing or downsizing businesses and centralizing certain functions. Excluding the restructuring charge, the Company generated $13.6 million operating profit in the second quarter of 2000, compared to $26.3 million a year ago. At the beginning of April 2000, the Company experienced a sudden weakness in sales volume driven by customers' need to adjust production schedules and inventories to more appropriate levels. Additionally, the rapid pace of metal price increases at the beginning of the quarter made it difficult to pass higher prices through to customers. The Company anticipates a continuing slowdown in the metal-using sector of the economy over the next few quarters. Results of Operations - Comparison of First Six Months 2000 to First Six Months - ------------------------------------------------------------------------------- 1999 - ---- For the first six months of 2000, the Company reported a consolidated net loss of $2.6 million, or 11 cents per diluted share. Net income in the year-ago period was $37.4 million, consisting of $20.1 million from continuing operations and $17.3 million from an adjustment to taxes for the gain on the sale of Inland Steel Company. Included in the 2000 results are restructuring and plant closure charges of $27.8 million and a $4.4 million pretax pension curtailment gain. Net sales of $1.5 billion increased 10.5 percent from the first six months of 1999 as volume increased 7.0 percent and selling prices increased 3.5 percent. Excluding the restructuring and plant closure costs in both periods and the pension curtailment gain, operating profit decreased 26.7 percent to $40.5 million from $55.4 million in the year-ago period. Liquidity and Financing - ----------------------- The Company had cash and cash equivalents at June 30, 2000 of $22.8 million compared to $39.5 million at December 31, 1999. At June 30, 2000, the Company had outstanding short-term borrowings of $83.6 million under the Company's lines of credit. During the first six months of 2000, the Company's cash flow from operating activities was a negative $71.7 million primarily due to low earnings and a significant increase in working capital requirements. On February 1, 2000, the Company redeemed the $7 million outstanding principal amount of the Port of Portland Variable Rate Industrial Revenue Refunding Bonds ("IRB") due November 1, 2007 at par value. The Company also cancelled the $7 million letter of credit supporting this IRB. On June 21, 2000, the Company purchased and retired $4.8 million of the $150 million 8.5% Notes maturing on July 15, 2001. The Company has a committed bank revolving credit facility of $250 million that extends until September 5, 2002. The revolving credit agreement contains covenants that, among other things, limit the amount of dividends and stock repurchases and restrict the amount of additional debt. The maximum amount of dividend payments or share repurchases that could have 8 been made as of June 30, 2000, was $110 million. During the first quarter of 2000, two uncommitted and unsecured lines of credit totaling $20 million were established. The indenture under which $250 million of debt was issued in 1996 ("RT Notes") contains covenants limiting, among other things, the creation of secured indebtedness, sale and leaseback transactions, the repurchase of capital stock, transactions with affiliates and mergers, consolidations and certain sale of assets. In addition, the RT Notes restrict the payment of dividends, although to a lesser extent than the bank credit facility described above. Effective with the merger of RT and the Company on February 26, 1999, the Company assumed the RT Notes. ISC Sale Contingencies - ---------------------- The Agreement and Plan of Merger among Ispat International, N.V. ("Ispat"), Inland Merger Sub, Inc., Inland Steel Industries, Inc. (now named Ryerson Tull, Inc.), and Inland Steel Company (now named Ispat Inland, Inc.) dated May 27, 1998, as amended (the "Merger Agreement") provides that the Company indemnify Ispat for specified losses and expenses. As previously disclosed, by letter dated May 11, 1999, Ispat advised the Company of its involvement in a civil lawsuit and federal criminal grand jury proceeding in Louisiana and notified the Company of its intention to seek indemnification from the Company in connection with the Louisiana proceedings. See "Management's Discussion of Operations and Financial Condition - ISC Sale Contingencies," incorporated by reference under Item 7 of the Company's Annual Report on Form 10-K for 1999. In letters dated March 31, 2000, Ispat notified the Company that Ispat was asserting claims against the Company under the Merger Agreement related to certain pension liabilities, insurance premiums, property taxes, environmental matters, intellectual property and the Louisiana proceedings. Ispat also stated that it does not consider the Company's liability with respect to the Louisiana proceedings to be limited by the $90 million cap on indemnification for breaches of representations and warranties in the Merger Agreement but intends to pursue all other remedies, both under the Merger Agreement and otherwise, if its losses in that matter were to exceed $90 million. In its Annual Report on Form 10-K for 1999 dated March 30, 2000, Ispat disclosed that it had agreed to extend the statute of limitations for the filing of any criminal charges against it in the Louisiana proceedings through September 30, 2000. In its Quarterly Report on Form 10-Q for the Second Quarter 2000, dated August 7, 2000, Ispat disclosed that it is investigating the factual basis of such a claim; whether any of the coated culvert is defective and, if so, the extent of such defects and the remedial options; the method by which damages would be calculated if the claims were established; and the relative responsibilities of other corporate defendants to satisfy such a claim. Ispat also stated that, in cooperation with the U.S Attorney and federal and state highway officials, Ispat has conducted field inspections and analysis of many of the coated culverts at issue and that Ispat is holding discussions with the U.S. Attorney and co-defendants. Ispat again stated that at this stage, it is unable to determine the outcome and resulting liability, if any, relating to this matter, and whether this matter could materially affect Ispat's financial position or results of operations. The Company is unable to determine at this time whether the foregoing would affect its financial condition or results of operations. Risk Factors - ------------ Business Risks: Certain statements in the foregoing are forward-looking statements and involve risks and uncertainties in the general economy and business conditions relating to metals-consuming industries, market demand for the Company's products, sales volume, pricing pressures and the Company's ability to pass through price increases to customers, the cost of purchased materials, the Company's ability to maintain market share, the Company's success in achieving economies of scale related to centralization of support functions, and market competition and cost factors, that could cause actual results to differ materially from the forward-looking statements. 9 PART II. OTHER INFORMATION --------------------------- Item 6. Exhibits and Report on Form 8-K (a) Exhibits. The exhibits required to be filed by Item 601 of Regulation S-K are listed in the "Exhibit Index," which is attached hereto and incorporated by reference herein. (b) Reports on Form 8-K. On June 6, 2000, the Company filed a Current Report on Form 8-K, reporting, under Item 5--Other Events, that the Company planned to make significant organizational and business process changes. As a result of the restructuring, the Company expects to generate annualized cost savings of approximately $30 million per year once the restructuring is complete. The purpose of the restructuring is to create a more customer-focused organization, with greater speed and responsiveness, while enhancing overall efficiency, quality and service. Details of the restructuring are discussed in Item 2 of this Form 10-Q. 10 SIGNATURE --------- Pursuant to the requirements of the Securities Exchange Act of 1934, the Company has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized. RYERSON TULL, INC. By /s/ Lily L. May ----------------------------------- Lily L. May Controller and Principal Accounting Officer Date: August 11, 2000 11
Part I -- Schedule A RYERSON TULL, INC. AND SUBSIDIARY COMPANIES SUMMARY OF STOCKHOLDERS' EQUITY ======================================================================================== Dollars in Millions --------------------------------------- June 30, 2000 December 31, 1999 ------------------ ----------------- (unaudited) STOCKHOLDERS' EQUITY - -------------------- Series A preferred stock ($1 par value) - 81,104 shares and 78,099 shares issued and outstanding as of June 30, 2000 and $ 0.1 $ 0.1 December 31, 1999, respectively Common stock ($1 par value) - 50,556,350 shares issued as of June 30, 2000 and December 31, 1999 50.6 50.6 Capital in excess of par value 863.2 863.3 Retained earnings Balance beginning of year $541.8 $491.2 Net income (2.6) 55.7 Dividends Series A preferred stock - $1.20 per share in 2000 and $2.40 per share in 1999 (0.1) (0.2) Common Stock - $ .10 per share in 2000 and $ .20 per share in 1999 (2.5) 536.6 (4.9) 541.8 ------ ------ Restricted stock awards (0.3) (0.4) Treasury stock, at cost - 25,782,172 as of June 30, 2000 and 25,782,759 as of December 31, 1999 (754.4) (754.7) Accumulated other comprehensive income (4.0) (2.9) ------- ------- Total Stockholders' Equity $ 691.8 $ 697.8 ======= =======
12 EXHIBIT INDEX
Exhibit Number Description - ------- ----------- 3.1 Copy of Certificate of Incorporation, as amended, of Ryerson Tull. (Filed as Exhibit 3.(i) to the Company's Annual Report on Form 10-K for the year ended December 31, 1995 (File No. 1-9117), and incorporated by reference herein.) 3.2 By-Laws, as amended. (Filed as Exhibit 3.2 to the Company's Annual Report on Form 10-K for the year ended December 31, 1999 (File No. 1-9117), and incorporated by reference herein.) 4.1 Certificate of Designations, Preferences and Rights of Series A $2.40 Cumulative Convertible Preferred Stock of Ryerson Tull. (Filed as part of Exhibit B to the definitive Proxy Statement of Inland Steel Company dated March 21, 1986 that was furnished to stockholders in connection with the annual meeting held April 23, 1986 (File No. 1-2438), and incorporated by reference herein.) 4.2 Certificate of Designation, Preferences and Rights of Series D Junior Participating Preferred Stock of Ryerson Tull. (Filed as Exhibit 4-D to the Company's Annual Report on Form 10-K for the fiscal year ended December 31, 1987 (File No. 1-9117), and incorporated by reference herein.) 4.3 Rights Agreement, dated as of November 25, 1997, as amended and restated as of September 22, 1999, between Ryerson Tull and Harris Trust and Savings Bank, as Rights Agent. (Filed as Exhibit 4.1 to the Company's amended Registration Statement on Form 8-A/A-2 filed on October 6, 1999 (File No. 1-9117), and incorporated by reference herein.) 4.4 Indenture, dated as of July 1, 1996, between Pre-merger Ryerson Tull and The Bank of New York. (Filed as Exhibit 4.1 to Pre-merger Ryerson Tull's Quarterly Report on Form 10-Q for the quarter ended June 30, 1996 (File No. 1-11767), and incorporated by reference herein.) 4.5 First Supplemental Indenture, dated as of February 25, 1999, between Ryerson Tull and The Bank of New York. (Filed as Exhibit 4.5 to the Company's Annual Report on Form 10-K for the year ended December 31, 1998 (File No. 1-9117), and incorporated by reference herein.) 4.6 Specimen of 8-1/2% Notes due July 15, 2001. (Filed as Exhibit 4.6 to the Company's Annual Report on Form 10-K for the year ended December 31, 1998 (File No. 1-9117), and incorporated by reference herein.) 4.7 Specimen of 9-1/8% Notes due July 15, 2006. (Filed as Exhibit 4.7 to the Company's Annual Report on Form 10-K for the year ended December 31, 1998 (File No. 1-9117), and incorporated by reference herein.) [The registrant hereby agrees to provide a copy of any other agreement relating to long-term debt at the request of the Commission.] 10.1* Ryerson Tull Annual Incentive Plan, as amended .................... 10.2* Ryerson Tull 1999 Incentive Stock Plan, as amended. (Filed as Exhibit 10.4 to the Company's Quarterly Report on Form 10-Q for the quarter ended June 30, 1999 (File No. 1-9117), and incorporated by reference herein.) 10.3* Ryerson Tull 1996 Incentive Stock Plan, as amended. (Filed as Exhibit 10.14 to Pre-merger Ryerson Tull Annual Report on Form 10-K for the year ended December 31, 1997 (File No. 1-11767), and incorporated by reference herein.) 10.4* Ryerson Tull 1995 Incentive Stock Plan, as amended. (Filed as Exhibit 10.E to the Company's Annual Report on Form 10-K for the year ended December 31, 1997 (File No. 1-9117), and incorporated by reference herein.) 10.5* Ryerson Tull 1992 Incentive Stock Plan, as amended. (Filed as Exhibit 10.C to the Company's Quarterly Report on Form 10-Q for the quarter ended June 30, 1995 (File No. 1-9117), and incorporated by reference herein.)
13
Exhibit Number Description - ------- ----------- 10.6* Ryerson Tull 1988 Incentive Stock Plan, as amended. (Filed as Exhibit 10.B to the Company's Quarterly Report on Form 10-Q for the quarter ended June 30, 1995 (File No. 1-9117), and incorporated by reference herein.) 10.7* Ryerson Tull Supplemental Retirement Plan for Covered Employees, as amended. (Filed as Exhibit 10.1 to Pre-merger Ryerson Tull's Form 10-Q for the quarter ended September 30, 1997 (File No. 1-11767), and incorporated by reference herein.) 10.8* Ryerson Tull Nonqualified Savings Plan, effective January 1, 1998 (Filed as Exhibit 10.S.(2) to the Company's Annual Report on Form 10-K for the fiscal year ended December 31, 1997 (File No. 1-9117), and incorporated by reference herein.) 10.9* Outside Directors Accident Insurance Policy. (Filed as Exhibit 10.12 to the Company's Quarterly Report on Form 10-Q for the quarter ended June 30, 1999 (File No. 1-9117), and incorporated by reference herein.) 10.10* Ryerson Tull Directors' 1999 Stock Option Plan. (Filed as Exhibit 10.19 to the Company's Annual Report on Form 10-K for the year ended December 31, 1998 (File No. 1-9117), and incorporated by reference herein.) 10.11* Ryerson Tull Directors' Compensation Plan, as amended. (Filed as Exhibit 10.20 to the Company's Annual Report on Form 10-K for the year ended December 31, 1998 (File No. 1-9117), and incorporated by reference herein.) 10.12* Form of Severance Agreement, dated January 28, 1998, between the Company and each of the four executive officers of the Company identified on the exhibit relating to terms and conditions of termination of employment following a change in control of the Company. (Filed as Exhibit 10.R to the Company's Annual Report on Form 10-K for the fiscal year ended December 31, 1997 (File No. 1-9117), and incorporated by reference herein.) 10.13* Amendment dated November 6, 1998 to the Severance Agreement dated January 28, 1998 referred to in Exhibit 10.21 above between the Company and Jay M. Gratz. (Filed as Exhibit 10.23 to the Company's Annual Report on Form 10-K for the year ended December 31, 1998 (File No. 1-9117), and incorporated by reference herein.) 10.14* Amendment dated June 30, 2000 to the Severance Agreement dated January 28, 1998 referred to in Exhibit 10.21 between the Company and Jay M. Gratz ................................................................. 10.15* Amendment dated February 19, 1999 to the Severance Agreement dated January 28, 1998 referred to in Exhibit 10.21 above between the Company and George A. Ranney, Jr. (Filed as Exhibit 10.24 to the Company's Annual Report on Form 10-K for the year ended December 31, 1998 (File No. 1-9117), and incorporated by reference herein.) 10.16* Form of Change in Control Agreement between the Company and the parties listed on the schedule thereto. (Filed as Exhibit 10.25 to the Company's Annual Report on Form 10-K for the year ended December 31, 1998 (File No. 1-9117), and incorporated by reference herein.) 10.17* Form of Change in Control Agreement between the Company and the party listed on the schedule thereto. (Filed as Exhibit 10.26 to the Company's Annual Report on Form 10-K for the year ended December 31, 1998 (File No. 1-9117), and is incorporated by reference herein.) 10.18* Amended Schedule to Change in Control Agreement referred to in Exhibit 10.16 ................................................................. 10.19* Employment Agreement dated September 1, 1999 between the Company and Jay M. Gratz. (Filed as Exhibit 10.22 to the Company's Quarterly Report on Form 10-Q for the quarter ended September 30, 1999 (File No. 1-9117), and incorporated by reference herein.) 10.20* Employment Agreement dated September 1, 1999 between the Company and Gary J. Niederpruem. (Filed as Exhibit 10.23 to the Company's Quarterly Report on Form 10-Q for the quarter ended September 30, 1999 (File No. 1-9117), and incorporated by reference herein.) 10.21* Employment Agreement dated December 1, 1999 between the Company and Neil S. Novich. (Filed as Exhibit 10.19 to the Company's Annual Report on Form 10-K for the year ended December 31, 1999 (File No. 1-9117), and incorporated by reference herein.) 10.22* Confidentiality and Non-Competition Agreement dated July 1, 1999 between the Company and Stephen E. Makarewicz. (Filed as Exhibit 10.24 to the Company's Quarterly Report on Form 10-Q for the quarter ended September 30, 1999 (File No. 1-9117), and incorporated by reference herein.)
14 EXHIBIT INDEX
Exhibit Number Description - ------- ----------- 10.23* Employment Agreement dated as of August 18, 1995 between the Company and George A. Ranney, Jr. (Filed as Exhibit 10.X to the Company's Annual Report on Form 10-K for the fiscal year ended December 31, 1997 (File No. 1-9117), and incorporated by reference herein.) 10.24* Letter of Retainer dated as of November 16, 1999 between the Company, George A. Ranney, Jr. and Mayer, Brown & Platt. (Filed as Exhibit 10.22 to the Company's Annual Report on Form 10-K for the year ended December 31, 1999 (File No. 1-9117), and incorporated by reference herein. ) 10.25* Employment Agreement dated as of May 29, 2000 between the Company and Thomas S. Cygan................................................ 27 Financial Data Schedule............................................
- ----------- * Management contract or compensatory plan or arrangement required to be filed as an exhibit to the Company's Annual Report on Form 10-K. 15 EX-10.1 2 0002.txt ANNUAL INCENTIVE PLAN EXHIBIT 10.1 As adopted 7-23-97 and amended 6-28-00 RYERSON TULL, INC. ANNUAL INCENTIVE PLAN 1. Purpose The purpose of the Ryerson Tull, Inc. Annual Incentive Plan (the "Plan") is to promote the interests of Ryerson Tull, Inc. (the "Company") and its stockholders by (i) attracting and retaining salaried employees of outstanding ability; (ii) strengthening the Company's capability to develop, maintain and direct a competent employee population; (iii) motivating salaried employees, by means of performance-related incentives, to achieve financial rewards; (iv) providing annual incentive compensation opportunities which are competitive with those of other major corporations; and (v) enabling salaried employees to participate in the growth and financial success of the Company. 2. Definitions "Affiliate" means any corporation or other entity which is not a Subsidiary but as to which the Company possesses a direct or indirect ownership interest and has power to exercise management control. "Award" means an amount for an Award Period determined to be payable to a Participant under the Plan. "Award Period" means such calendar quarters or calendar years as the Committee may establish from time to time with respect to any applicable salary grade designation, to any Corporate Unit or to a combination of these factors. "Award Schedule" means the schedule to be used for determining Awards as established by the Committee and set forth in the Addendum to the Plan applicable to the Corporate Unit covered thereby. "Code" means the Internal Revenue Code of 1986, as amended. "Committee" means the Compensation Committee of the Board of Directors of the Company. "Corporate Unit" means the Company, Ryerson Tull West, Ryerson Tull North, Ryerson Tull South, Ryerson Tull Coil Processing, Ryerson Industries de Mexico, S.A. de C.V., Ryerson Tull Canada, Customer Solutions Team, and any Affiliate, other Subsidiary or any division or group of the Company or any Subsidiary designated as a Corporate Unit from time to time by the Committee -2- of the Company. "Employee" means an employee eligible to be designated as a Participant in the Plan. "Named Executive Officer" means a Participant who is one of the group of "covered employees" as defined in the regulations promulgated under Section 162(m) of the Code. "Participant" means an Employee who is designated by the Committee to be eligible to receive an Award under the Plan. "Performance-Based Exception" means the performance-based exception from the deductibility limitations as set forth in Section 162(m) of the Code. "Subsidiary" means any corporation in which the Company possesses directly or indirectly more than fifty percent (50%) of the total combined voting power of all classes of its stock. "Target Award" means the percentage of a Participant's base salary earnings or base annual salary for an Award Period as established by the Committee pursuant to paragraph 6 of the Plan and set forth in the Addendum to the Plan applicable to the Corporate Unit in which such Participant is employed. "Threshold" means the minimum financial performance (established by the Committee and set forth in the Addendum to the Plan applicable to such Corporate Unit) required by a Corporate Unit before an Award may be paid to a Participant employed in such Corporate Unit. 3. Administration The Plan shall be administered by the Committee. No member of the Committee shall be eligible to receive an Award while serving on the Committee. The Committee shall have the authority to interpret the Plan and to establish, amend and rescind rules and regulations for the administration of the Plan, and all such interpretations, rules and regulations shall be conclusive and binding on all persons. In addition, the Committee may delegate to one or more senior executive officers of the Company the right to administer the Plan as it pertains to employees who are not officers of the Company or of any other Corporate Unit. Subject to the provisions of paragraph 7 hereof, the Committee may impose such conditions on participation in and Awards under the Plan as it deems appropriate. 4. Eligibility Except as otherwise provided by the Committee and subject to paragraph 9 hereof, all full-time salaried employees of a Corporate Unit as of the first day and the last day of an Award Period are eligible to be designated as Participants in the Plan for such Award Period; provided, however, that, with respect to Award Periods that extend for at least one year, individuals who are full-time salaried -3- employees of a Corporate Unit on August 1 of the first year of the Award Period and the last day of the Award Period shall also be eligible to be designated as Participants in the Plan for such Award Period. Notwithstanding the foregoing, the Committee may adopt criteria restricting the number of full-time salaried employees of a Corporate Unit eligible to be designated as Participants in the Plan for any Award Period, which criteria shall be set forth in the Addendum to the Plan applicable to such Corporate Unit. 5. Designation of Participants The Committee shall determine and designate from time to time those Employees who shall be Participants. The designation of an Employee as a Participant in the Plan for any Award period shall not bestow upon such Employee any right to receive an Award for such Award Period or the right to be designated as a Participant for any subsequent Award Period. 6. Individual Award Opportunity For each Award Period, the Committee shall establish for each Participant a Target Award, expressed as a percentage of his or her base salary earnings or base annual salary for such Award Period, on the basis of his or her salary grade designation. 7. Determination of Awards Awards for each Award Period for Participants in each Corporate Unit shall be determined in accordance with the Award Schedule established by the Committee for such Corporate Unit. No Award shall be paid to any Participant in a Corporate Unit for any Award Period in which the performance of such Corporate Unit does not equal or exceed the Threshold applicable to such Corporate Unit. The Award for each Participant in a Corporate Unit shall be his or her Target Award multiplied by the Percent Attainment (determined in accordance with the applicable Award Schedule), subject to the following: (a) Subject to paragraph 3 and the provisions of this paragraph 7, the Committee may adjust such Award for individual performance on the basis of such quantitative and qualitative performance measures and evaluations as it deems appropriate. (b) The Committee may make such adjustments as it deems appropriate in the case of any Participant whose salary grade designation has changed during the applicable Award Period or who has been employed in more than one Corporate Unit during an Award Period. (c) Unless and until the Committee proposes for stockholder vote a change in the general performance measures set forth in this paragraph 7(c), the attainment of which may determine the degree of payout with respect to Awards under the Plan which are designed to qualify for the Performance-Based Exception, the performance measure(s) to be used for purposes of such Awards shall be chosen from among the following alternatives: return on operating assets, operating profit, -4- return on equity, net income, stock price, revenue growth, expense management, inventory management, quality management, customer service performance, shareholder return, gross margin management and market share improvement. The Committee shall have the discretion to establish performance goals based upon the foregoing performance measures and to adjust such goals and the methodology used to measure the determination of the degree of attainment of such goals; provided, however, that Awards under the Plan that are intended to qualify for the Performance-Based Exception and that are issued to or held by any Named Executive Officer may not be adjusted in a manner that increases such Award. The Committee shall retain the discretion to adjust such Awards in a manner that does not increase such Awards. Furthermore, the Committee shall not make any adjustment to Awards under the Plan issued to or held by any Named Executive Officer that are intended to comply with the Performance-Based Exception if the result of such adjustment would be the disqualification of such Award under the Performance-Based Exception. In the event that applicable laws change to permit the Committee greater discretion to amend or replace the foregoing performance measures applicable to Awards to Named Executive Officers without obtaining stockholder approval of such changes, the Committee shall have sole discretion to make such changes without obtaining such approval. In addition, in the event that the Committee determines that it is advisable to grant Awards under the Plan to Named Executive Officers that may not qualify for the Performance-Based Exception, the Committee may make such grants upon any performance measures it deems appropriate with the understanding that they may not satisfy the requirements of Section 162(m) of the Code. Notwithstanding any other provision of the Plan, in no event may a Participant be paid an Award in any calendar year in excess of $2,000,000. No segregation of any moneys or the creation of any trust or the making of any special deposit shall be required in connection with any awards made or to be made under the Plan. 8. Payment of Awards Awards shall be paid in cash as soon as practicable after the end of the Award Period for which the Award is made. If a Participant to whom an Award has been made dies prior to the payment of the Award, such Award shall be delivered to his or her legal representative or to such other person or persons as shall be determined by the Chairman, the President, the Chief Executive Officer or the Vice President-Human Resources of the Company. The Company or other applicable Corporate Unit shall have the right to deduct from all Awards payable under the Plan any taxes required by law to be withheld by the Company or other Corporate Unit with respect thereto; provided, however, that to the extent provided by the Committee, any payment under the Plan may be deferred and to the extent deferred, may be credited with an interest or earnings factor as determined by the Committee. 9. Termination of Employment Except in the case of death, disability, normal retirement (determined in accordance with the qualified retirement plans of the Corporation) or release (determined in accordance with the Inland Steel Industries Severance Pay Plan for Eligible Salaried Employees or any successor or substituted -5- plan) or except as provided in paragraph 10, a Participant must be an employee as of the end of the Award Period in order to be eligible for an Award. 10. Change of Control In the event of a Change of Control of the Company (as hereinafter defined), the Plan shall remain in full force and effect for the remainder of any Award Period (or, if longer, the remainder of the calendar year) during which such Change of Control of the Company occurs, and each Participant shall receive an Award for such Award Periods (or any Award Periods occurring in such calendar year), at least equal to his or her Target Awards, regardless of whether or not Awards would otherwise have been payable under the Plan for such Award Periods and regardless of whether or not such Participant was an Employee at the end of any such Award Period. A "Change of Control of the Company" shall be deemed to have occurred if there shall have been a change in the composition of the Board of Directors of the Company such that a majority of the Board of Directors shall have been members of the Board of Directors for less than 24 months, unless the election of each new director who was not a director at the beginning of the 24 month period was approved by a vote of at least two-thirds of the directors then still in office who were directors at the beginning of such period. 11. Transferability Any payment to which a Participant may be entitled under the Plan shall be free from the control or interference of any creditor of such Participant and shall not be subject to attachment or susceptible of anticipation or alienation. The interest of a Participant shall not be transferable except by will or the laws of descent and distribution. 12. No Right to Participate; Employment Neither the adoption of the Plan nor any action of the Committee shall be deemed to give any Employee any right to be designated as a Participant under the Plan. Further, nothing contained in the Plan, nor any action by the Committee or any other person hereunder, shall be deemed to confer upon any Employee any right of continued employment with any Corporate Unit or to limit or diminish in any way the right of any Corporate Unit to terminate his or her employment at any time with or without cause. 13. Nonexclusivity of the Plan This Plan is not intended to and shall not preclude the Board of Directors of the Company from adopting or continuing such additional compensation arrangements as it deems desirable for Participants under this Plan, including any thrift, savings, investment, stock purchase, stock option, profit sharing, pension, retirement, insurance or other incentive, compensation or benefit plan or program. EX-10.14 3 0003.txt AMENDMENT TO EMPLOYMENT AGREEMENT Exhibit 10.14 June 30, 2000 Jay M. Gratz 1242 North Astor Chicago, IL 60610 Re: Amendment to Employment Agreement Dear Jay: This letter constitutes a further amendment of the agreement dated January 28, 1998 and originally entered into between you and Ryerson Tull, Inc. f/k/a Inland Steel Industries, Inc. (the "Company"), as amended by a letter agreement dated November 6, 1998 (the "Agreement"). Under the terms of the Agreement, you are entitled to a lump sum payment upon the earlier of January 1, 2001, or the date your employment with the Company is terminated for any reason. The lump sum that would be payable on January 1, 2001 is $2,860,582. Subject to the following provisions of this letter, you have agreed to defer receipt of such payment until the earlier of January 1, 2006 and five business days following your last day of employment with the Company. In consideration for your agreement to defer such receipt, the Company has agreed that it will credit such deferred compensation with an interest equivalent to the rate (including applicable fees and margin) at which the Company borrows money under its revolving credit bank arrangement utilizing the six-month Libor option. Such interest rate shall be adjusted on each six- month anniversary, or if such date is not a business date, the next earlier date that is a business day, commencing January 1, 2001. The Company has further agreed that, in the event that at any time the Company's outstanding senior unsecured debt is not rated at least Baa3 by Moody's Investors Services, Inc. (or any successor to such corporation's business of rating securities), or at least BBB by Standard & Poor's Rating Group, a division of McGraw Hill, Inc. (or any successor to such corporation's business or rating securities), you may elect to receive 95% of the sum of (i) such deferred compensation and (ii) with the interest equivalent accrued through the date of payment. The remaining 5% will be forfeited. If this letter properly reflects our agreement, please sign the enclosed copy and return it to my attention. Very truly yours, RYERSON TULL, INC. By: /s/ William Korda ---------------------------------- Its: Vice President - Human Resources Agreed to this 30/th/ day of June, 2000 /s/ Jay M. Gratz ---------------- Jay M. Gratz EX-10.18 4 0004.txt SCHEDULE TO FORM OF CHANGE Exhibit 10.18 Schedule to Form of Change in Control Agreement between Ryerson Tull, Inc. and the following parties: Stephen E. Makarewicz Thomas S. Cygan 1 EX-10.25 5 0005.txt EMPLOYMENT AGREEMENT (THOMAS S. CYGAN) Exhibit 10.25 EMPLOYMENT AGREEMENT THIS AGREEMENT, by and between Ryerson Tull, Inc. (the "Company") and Thomas S. Cygan (the "Executive") effective as of May 29, 2000 (the "Effective Date"); WITNESSETH THAT: WHEREAS, the Company desires to appoint Executive to the position of President Ryerson Tull North, and Executive desires to accept such appointment; and WHEREAS, in connection with such appointment, the Company and Executive desire to enter into this Agreement; NOW, THEREFORE, in consideration of the Executive's appointment as President Ryerson Tull North, and for other good and valuable consideration the receipt of which is hereby acknowledged, it is agreed by the Executive and Company as follows: 1. Duties. The Executive agrees that while he is employed by the Company, ------ he will devote his full business time, energies and talents to serving as the President Ryerson Tull North of the Company and providing services for the Company at the direction of the Executive Vice President of the Company. The Executive shall have such duties and responsibilities as may be assigned to him from time to time by the Executive Vice President, shall perform all duties assigned to him faithfully and efficiently, subject to the direction of the Executive Vice President, and shall have such authorities and powers as are inherent to the undertakings applicable to his position and necessary to carry out the responsibilities and duties required of him hereunder; provided, however, that the Executive shall not be required to perform any duties while he is disabled. Notwithstanding the foregoing or any other provisions of this Agreement, the Executive and the Company understand and agree that the responsibilities and duties of the Executive, in his capacity as President Ryerson Tull North of the Company, may change from time to time due to other changes in the nature and structure of the Company's business and that any such changes in the Executive's duties and responsibilities that are consistent with such changes in the Company's business shall not constitute a reduction in the Executive's duties and responsibilities for purposes of this Agreement. 2. Compensation. Subject to the terms and conditions of this ------------ Agreement, during the Employment Period while the Executive is employed by the Company, the Company shall compensate him for his services as follows: (A) The Executive shall receive, for each twelve-consecutive month period beginning on May 29, 2000, and each anniversary thereof, an annual salary of $240,000 (the "Salary"), which Salary shall be payable in substantially equal bi-weekly installments. The Executive's rate of Salary shall be reviewed annually beginning in February, 2001. (B) The Executive shall be entitled to receive bonuses from the Company in accordance with the bonus plans of the Company as in effect from time to time. As President Ryerson Tull North his target bonus award percentage shall be 36%, subject to annual approval of the Compensation Committee of the Board of Directors. (C) Except as otherwise specifically provided to the contrary in this Agreement, the Executive shall be provided with health, welfare and other fringe benefits to the same extent and on the same terms as those benefits are provided by the Company from time to time to the Company's other senior management executives. (D) The Executive shall be reimbursed by the Company, on terms and conditions that are substantially similar to those that apply to other similarly situated senior management executives of the Company, for reasonable out-of-pocket expenses for entertainment, travel, meals, lodging and similar items (including such expenses which are incurred by the Executive at the country club at which he is a member) which are consistent with the Company's expense reimbursement policy and actually incurred by the Executive in the promotion of the Company's business. (E) The Company shall pay or shall reimburse the Executive for his monthly country club dues and assessments; provided, however, that such payment or reimbursement, as applicable, shall apply only to one club at any given point in time. -2- (F) The Company shall pay the monthly lease payment for the automobile that the Executive uses for business; provided, however, that the Company shall report as income to the Executive any amounts required by law or the policies of the Company relating to the Executive's personal use of such automobile. (G) The Executive shall be reimbursed by the Company for reasonable moving expenses incurred with his move to Chicago, Illinois. Such reimbursements are specified in the geographic relocation policy and require the acceptance by signing the Ryerson Tull Relocation Cost Repayment Agreement. (H) The Company shall provide a two year Change in Control Agreement. (I) The Executive shall be recommended for stock awards in the same manner as may be in effect from time to time for other similarly situated presidents. 3. Rights and Payments Upon Termination. The Executive's right to ------------------------------------ benefits and payments, if any, for periods after the date on which his employment with the Company terminates for any reason (his "Termination Date") shall be determined in accordance with this Section 3: (A) Termination by the Company for Reasons Other Than Cause; Termination -------------------------------------------------------------------- by the Executive for Good Reason. If the Executive's termination by -------------------------------- the Company occurs for any reason other than Cause or is a result of the Executive's termination of employment for Good Reason (and is not on account of the Executive's death, disability, or voluntary resignation, the mutual agreement of the parties or any other reason), then the Executive shall receive from the Company for the period commencing on his Termination Date and ending on the earliest of (i) the twenty-fourth month after the Executive's Termination Date; (ii) the date on which the Executive violates the provisions of Sections 4, 5 or 6 of this Agreement; or (iii) the date of the Executive's death, the Salary, bonus and benefits in effect as of his Termination Date, payable in accordance with the provisions of Paragraph 3(B). The biweekly salary amounts will continue as described above. Benefits that will continue will include medical, dental, basic life -3- insurance, any optional life insurance and any optional accidental death and dismemberment insurance. Bonus shall mean two payments of the average annual amount of the award paid to the Executive pursuant to the annual incentive plan or successor plan with respect to the three years immediately preceding that in which the Termination Date occurs. Base salary payments to the Executive during the aforementioned twenty-four month period shall not preclude the Executive's eligibility for payments under the Company's severance plan. Twenty-four months of additional age and service credit will be provided to the Executive's RT Pension and the RT Supplemental Plan using the methodology described in the Executive's Change in Control Agreement except that any lump sum payment will be made twenty-four months after the Executive's Termination Date and only if the Executive has not violated the Confidentiality, Nonsolicitation and Noncompetition provisions of this Agreement. (B) Termination By Company for Cause. If the Executive's termination is a -------------------------------- result of the Company's termination of the Executive's employment on account of Cause, then, except as agreed in writing between the Executive and the Company, the Executive shall have no right to future payments or benefits under this Agreement (and the Company shall have no obligation to make any such future payments or provide any such future benefits) for periods after the Executive's Termination Date. (C) Termination for Death or Disability. If the Executive's termination ----------------------------------- is caused by the Executive's death or permanent disability, then the Executive (or in the event of his death, his estate) shall be entitled to continuing payments of his Salary for the period commencing on his Termination Date and ending on the earlier of (i) the last day of the calendar month in which his Termination Date occurs or (ii) the date on which the Executive violates the provisions of Sections 4, 5 or 6 of this Agreement. -4- (D) Termination for Voluntary Resignation, Mutual Agreement or Other ---------------------------------------------------------------- Reasons. If the Executive's termination occurs on account of his ------- voluntary resignation, mutual agreement of the parties, or any reason other than those specified in Paragraphs (A), (B) or (C) above then, except as agreed in writing between the Executive and the Company, the Executive shall have no right to future payments or benefits under this Agreement (and the Company shall have no obligation to make any such future payments or provide any such future benefits) for periods after the Executive's Termination Date. The Executive's termination of employment for Good Reason shall not be treated as a voluntary resignation for purposes of this Agreement. (E) Definitions. For purposes of this Agreement: ----------- (i) The term "Cause" shall mean: (a) the continuous performance of his duties (under this Agreement) in a manner that is inconsistent with past, acceptable performance over a normal business cycle; or in a way that has a demonstrable negative impact on the results of the business unit as determined by the Executive Vice President. The Executive Vice President must provide a notice of unsatisfactory performance and a reasonable corrective action period. The Chairman and CEO must review and approve the action; or (b) the willful engaging by the Executive in conduct which is demonstrably and materially injurious to the Company or its affiliates, monetarily or otherwise, as determined by the Executive Vice President; or (c) conduct by the Executive that involves theft, fraud or dishonesty; or (d) the Executive's violation of the provisions of Sections 4, 5 or 6 hereof. -5- (ii) The term "Good Reason" means (a) the assignment to the Executive duties which are materially inconsistent with his duties as President Ryerson Tull North of the Company, including, without limitation, a material diminution or reduction in his title, office or responsibilities or a reduction in his rate of Salary, or (b) the relocation of the Executive to a location that is not within the greater Chicago metropolitan area. Notwithstanding any other provision of this Agreement, the Executive shall automatically cease to be an employee of the Company and its affiliates as of his Termination Date and, to the extent permitted by applicable law, any and all monies that the Executive owes to the Company shall be repaid before any post-termination payments are made pursuant to the Executive pursuant to this Agreement. 4. Confidential Information. The Executive agrees that: ------------------------ (A) Except as may be required by the lawful order of a court or agency of competent jurisdiction, or except to the extent that the Executive has express authorization from the Company, he shall keep secret and confidential indefinitely all non-public information (including, without limitation, information regarding litigation and pending litigation) concerning the Company and its affiliates which was acquired by or disclosed to the Executive during the course of his employment with the Company, and not to disclose the same, either directly or indirectly, to any other person, firm, or business entity, or to use it in any way. (B) Upon his Termination Date or at the Company's earlier request, he will promptly return to the Company any and all records, documents, physical property, information, computer disks or other materials relating to the business of the Company and its affiliates obtained by him during his course of employment with the Company. (C) The Executive shall keep the Company informed of, and shall execute such assignments as may be necessary to transfer to the Company or its affiliates the benefits of, any inventions, discoveries, improvements, trade secrets, -6- developments, processes, and procedures made by the Executive, in whole or in part, or conceived by the Executive either alone or with others, which result from any work which the Executive may do for or at the request of the Company, whether or not conceived by the Executive while on holiday, on vacation, or off the premises of the Company, including such of the foregoing items conceived during the course of employment which are developed or perfected after the Executive's termination of employment. The Executive shall assist the Company or other nominated by it, to obtain patents, trademarks and service marks and the Executive agrees to execute all documents and to take all other actions which are necessary or appropriate to secure to the Company and its affiliates the benefits thereof. Such patents, trademarks and service marks shall become the property of the Company and its affiliates. The Executive shall deliver to the Company all sketches, drawings, models, figures, plans, outlines, descriptions or other information with respect thereto. (D) To the extent that any court or agency seeks to have the Executive disclose confidential information, he shall promptly inform the Company, and he shall take such reasonable steps to prevent disclosure of Confidential Information until the Company has been informed of such requested disclosure. To the extent that the Executive obtains information on behalf of the Company or any of its affiliates that may be subject to attorney-client privilege as to the Company's attorneys, the Executive shall take reasonable steps to maintain the confidentiality of such information and to preserve such privilege. (E) Nothing in the foregoing provisions of this Section 4 shall be construed so as to prevent the Executive from using, in connection with his employment for himself or an employer other than the Company or any of its affiliates, knowledge which was acquired by him during the course of his employment with the Company and its affiliates, and which is generally known to persons of his experience in other companies in the same industry. 5. Nonsolicitation. While the Executive is employed by the Company and --------------- its affiliates and for a period of two years after the date the Executive's employment terminates with the Company and its affiliates for any reason, the Executive covenants and agrees that -7- he will not, whether for himself or for any other person, business, partnership, association, firm, company or corporation, directly or indirectly, call upon, solicit, divert or take away or attempt to solicit, divert or take away, any of the customers or employees of the Company or its affiliates in existence from time to time during his employment with the Company and its affiliates. 6. Noncompetition. While the Executive is employed by the Company and -------------- its affiliates, and for a period of two years after the date the Executive's employment terminates with the Company and its affiliates for any reason, the Executive covenants and agrees that he will not, directly or indirectly, engage in, assist, perform services for, plan for, establish or open, or have any financial interest (other than (i) ownership of 1% or less of the outstanding stock of any corporation listed on the New York or American Stock Exchange or included in the National Association of Securities Dealers Automated Quotation System or (ii) ownership of securities in any entity affiliated with the Company) in any person, firm, corporation, or business entity (whether as an employee, officer, director or consultant) that engages in an activity in any state in which the Company or its affiliates is conducting or has reasonable expectations of commencing business activities at the date of the Executive's termination of employment, which is the same as, similar to, or competitive with the metals service center, processing and distribution business of the Company and its affiliates. 7. Equitable Remedies. The Executive acknowledges that the Company would ------------------ be irreparably injured by a violation of Sections 4, 5 and 6 and agrees that the Company, in addition to other remedies available to it for such breach or threatened breach, shall be entitled to a preliminary injunction, temporary restraining order, other equivalent relief, restraining the Executive from any actual or threatened breach of Sections 4, 5 and 6 without any bond or other security being required. 8. Defense of Claims. The Executive agrees that, during his employment ----------------- with the Company and after his termination, he will cooperate with the Company and its affiliates in the defense of any claims that may be made against the Company or its affiliates to the extent that such claims may relate to services performed by him for the Company. To the extent travel is required to comply with the requirements of this Section 8, the Company, shall to the extent possible, provide the Executive with notice at least 10 days prior to the date on which such travel would be required and the Company agrees to reimburse the -8- Executive for all of his reasonable actual expenses associated with such travel; provided, however, that if the Company reasonably expects the travel to be extensive or unduly burdensome to the Executive from a financial perspective, the Company may provide to the Executive pre-paid tickets for transportation in connection with such travel. 9. Notices. Notices provided for in this Agreement shall be in writing ------- and shall be deemed to have been duly received when delivered in person or sent by facsimile transmission, on the first business day after it is sent by air express courier service or on the second business day following deposit in the United States registered or certified mail, return receipt requested, postage prepaid and addressed, in the case of the Company to the following address: Ryerson Tull, Inc. 2621 W. 15th Place Chicago, IL 60608 Attention: William Korda or to the Executive: Thomas S. Cygan 5539 176th Place SE Bellevue, WA 98006 or such other address as either party may have furnished to the other in writing in accordance herewith, except that a notice of change of address shall be effective only upon actual receipt. 10. Withholding. All compensation payable under this Agreement shall be ----------- subject to customary withholding taxes and other employment taxes as required with respect to compensation paid by a corporation to an executive and the amount of compensation payable hereunder shall be reduced appropriately to reflect the amount of any required withholding. The Company shall have no obligation to make any payments to the Executive or to make the Executive whole for the amount of any required taxes. 11. Successors. This Agreement shall be binding on, and inure to the ---------- benefit of, the Company and its successors and assigns and any person acquiring, whether by merger, -9- reorganization, consolidation, by purchase of assets or otherwise, all or substantially all of the assets of the Company. 12. Nonalienation. The interests of the Executive under this Agreement ------------- are not subject to the claims of his creditors, other than the Company, and may not otherwise be voluntarily or involuntarily assigned, alienated or encumbered. 13. Waiver of Breach. The waiver by either the Company or the Executive ---------------- of a breach of any provision of this Agreement shall not operate as or be deemed a waiver of any subsequent breach by either the Company or the Executive. Continuation of payments hereunder by the Company following a breach by the Executive of any provision of this Agreement shall not preclude the Company from thereafter terminating said payments based upon the same violation. 14. Severability. It is mutually agreed and understood by the parties ------------ that should any of the agreements and covenants contained herein be determined by any court of competent jurisdiction to be invalid by virtue of being vague or unreasonable, including but not limited to the provisions of Sections 4, 5 and 6, then the parties hereto consent that this Agreement shall be amended retroactive to the date of its execution to include the terms and conditions said court deems to be reasonable and in conformity with the original intent of the parties and the parties hereto consent that under such circumstances, said court shall have the power and authority to determine what is reasonable and in conformity with the original intent of the parties to the extent that said covenants and/or agreements are enforceable. 15. Applicable Law. This Agreement shall be construed in accordance with -------------- the laws of the State of Illinois. 16. Amendment. This Agreement may be amended or cancelled by mutual --------- Agreement of the parties in writing without the consent of any other person. 17. Counterparts. This Agreement may be executed in any number of ------------ counterparts, each of which when so executed and delivered shall be an original, but all such counterparts shall together constitute one and the same instrument. Each counterpart may -10- consist of a copy hereof containing multiple signature pages, each signed by one party hereto, but together signed by both of the parties hereto. 18. Other Agreements. This Agreement constitutes the sole and complete ---------------- Agreement between the Company and the Executive and supersedes all other agreements, both oral and written, between the Company and the Executive with respect to the matters contained herein including, without limitation any severance agreements or arrangements between the parties; provided, however, that this Agreement does not supersede the Change in Control Agreement. No verbal or other statements, inducements, or representations have been made to or relied upon by the Executive. The parties have read and understand this Agreement. RYERSON TULL, INC. Dated: 5/29/00 /s/ William Korda ---------------- --------------------------------- William Korda Vice President Human Resources Dated: 6/1/00 /s/ Thomas S. Cygan ----------------- --------------------------------- Thomas S. Cygan President Ryerson Tull North -11- EX-27 6 0006.txt FINANCIAL DATA SCHEDULE
5 THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM THE CONSOLIDATED STATEMENT OF OPERATIONS, THE CONSOLIDATED BALANCE SHEET, AND THE SUMMARY OF STOCKHOLDERS' EQUITY CONTAINED IN THE QUARTERLY REPORT ON FORM 10-Q TO WHICH THIS EXHIBIT IS ATTACHED AND IS QUALIFIED IN ITS ENTIRETY BY REFERENCE TO SUCH FINANCIAL SCHEDULES. 1,000 6-MOS DEC-31-1999 JAN-01-2000 JUN-30-2000 22,800 0 389,700 8,000 639,300 1,046,600 590,400 317,500 1,526,600 436,100 246,600 0 100 50,600 641,100 1,526,600 1,547,100 1,547,100 1,395,100 1,395,100 0 0 13,100 4,100 6,700 (2,600) 0 0 0 (2,600) (0.11) (0.11)
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