-----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, BVyXDEZVUY8d8LbJtEQSkZB2aupf1cLcMM1UIxxlqJANGnOrcEC2IXztG7qk4Tc5 FmcYipABwOU260UflzHn8g== 0000950131-02-004376.txt : 20021113 0000950131-02-004376.hdr.sgml : 20021113 20021113114436 ACCESSION NUMBER: 0000950131-02-004376 CONFORMED SUBMISSION TYPE: 10-Q PUBLIC DOCUMENT COUNT: 4 CONFORMED PERIOD OF REPORT: 20020930 FILED AS OF DATE: 20021113 FILER: COMPANY DATA: COMPANY CONFORMED NAME: RYERSON TULL INC /DE/ CENTRAL INDEX KEY: 0000790528 STANDARD INDUSTRIAL CLASSIFICATION: STEEL WORKS, BLAST FURNACES ROLLING MILLS (COKE OVENS) [3312] IRS NUMBER: 363425828 STATE OF INCORPORATION: DE FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: 10-Q SEC ACT: 1934 Act SEC FILE NUMBER: 001-09117 FILM NUMBER: 02818913 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 d10q.htm FORM 10-Q FOR 09-30-2002 Form 10-Q for 09-30-2002
 
Third Quarter – 2002
 
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 September 30, 2002
 
or
 
¨ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
 
For the transition period from to                          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: 24,814,688 shares of the Company’s Common Stock ($1.00 par value per share) were outstanding as of November 8, 2002.
 

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 September 30
     
Nine Months Ended September 30
  
    
2002
     
2001
     
2002
     
2001
  
NET SALES
   
$
533.2
 
   
$
543.0
 
   
$
1,598.5
 
   
$
1,763.7
 
                                     
Cost of materials sold
   
 
423.7
 
   
 
440.7
 
   
 
1,269.5
 
   
 
1,405.9
 
    
  
  
  
GROSS PROFIT
   
 
109.5
 
   
 
102.3
 
   
 
329.0
 
   
 
357.8
 
                                     
Operating expenses
   
 
105.2
 
   
 
106.6
 
   
 
312.4
 
   
 
337.3
 
Depreciation
   
 
6.5
 
   
 
6.7
 
   
 
19.7
 
   
 
20.5
 
Goodwill amortization
   
 
—  
 
   
 
1.3
 
   
 
—  
 
   
 
3.7
 
Adjustment to the gain on sale of IEMC
   
 
—  
 
   
 
—  
 
   
 
8.5
 
   
 
—  
 
Restructuring and plant closure costs
   
 
0.7
 
   
 
—  
 
   
 
2.7
 
   
 
—  
 
Write-off of investment in MetalSite, Inc.
   
 
—  
 
   
 
—  
 
   
 
—  
 
   
 
1.0
 
Gain on sale of assets
   
 
(10.9
)
   
 
—  
 
   
 
(10.9
)
   
 
(1.3
)
    
  
  
  
OPERATING PROFIT (LOSS)
   
 
8.0
 
   
 
(12.3
)
   
 
(3.4
)
   
 
(3.4
)
                                     
Other revenue and expense, net
   
 
(0.5
)
   
 
(2.3
)
   
 
(1.7
)
   
 
(4.7
)
Shares received on demutualization of an insurance company
   
 
—  
 
   
 
—  
 
   
 
5.1
 
   
 
—  
 
Interest and other expense on debt
   
 
(3.1
)
   
 
(3.5
)
   
 
(9.3
)
   
 
(16.0
)
    
  
  
  
INCOME (LOSS) BEFORE INCOME TAXES
   
 
4.4
 
   
 
(18.1
)
   
 
(9.3
)
   
 
(24.1
)
                                     
PROVISION (BENEFIT) FOR INCOME TAXES
   
 
1.8
 
   
 
(6.5
)
   
 
(2.6
)
   
 
(8.9
)
    
  
  
  
INCOME (LOSS) FROM CONTINUING OPERATIONS
   
 
2.6
 
   
 
(11.6
)
   
 
(6.7
)
   
 
(15.2
)
                                     
DISCONTINUED OPERATIONS—INLAND STEEL COMPANY
                                    
Gain (loss) on sale
   
 
—  
 
   
 
—  
 
   
 
(1.7
)
   
 
—  
 
    
  
  
  
INCOME (LOSS) BEFORE CUMULATIVE EFFECT OF
CHANGE IN ACCOUNTING PRINCIPLE
   
 
2.6
 
   
 
(11.6
)
   
 
(8.4
)
   
 
(15.2
)
                                     
Cumulative effect of change in accounting principle, net of tax of $8.9 cr.
   
 
—  
 
   
 
—  
 
   
 
(82.2
)
   
 
—  
 
    
  
  
  
NET INCOME (LOSS)
   
$
2.6
 
   
$
(11.6
)
   
$
(90.6
)
   
$
(15.2
)
    
  
  
  
 
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
     
Nine Months Ended
  
    
September 30
     
September 30
  
    
2002
     
2001
     
2002
     
2001
  
EARNINGS PER SHARE OF COMMON STOCK
                                    
                                     
Basic:
                                    
Income (loss) from continuing operations
   
$
0.10
 
   
$
(0.47
)
   
$
(0.28
)
   
$
(0.62
)
Inland Steel Company—gain on sale
   
 
—  
 
   
 
—  
 
   
 
(0.07
)
   
 
—  
 
Cumulative effect of change in accounting principle
   
 
—  
 
   
 
—  
 
   
 
(3.31
)
   
 
—  
 
    
  
  
  
Net income (loss)
   
$
0.10
 
   
$
(0.47
)
   
$
(3.66
)
   
$
(0.62
)
    
  
  
  
Diluted:
                                    
Income (loss) from continuing operations
   
$
0.10
 
   
$
(0.47
)
   
$
(0.28
)
   
$
(0.62
)
Inland Steel Company—gain on sale
   
 
—  
 
   
 
—  
 
   
 
(0.07
)
   
 
—  
 
Cumulative effect of change in accounting principle
   
 
—  
 
   
 
—  
 
   
 
(3.31
)
   
 
—  
 
    
  
  
  
Net income (loss)
   
$
0.10
 
   
$
(0.47
)
   
$
(3.66
)
   
$
(0.62
)
    
  
  
  
                                     
STATEMENT OF COMPREHENSIVE INCOME
                                    
                                     
NET INCOME (LOSS)
   
$
2.6
 
   
$
(11.6
)
   
$
(90.6
)
   
$
(15.2
)
OTHER COMPREHENSIVE INCOME:
                                    
Foreign currency translation adjustments
   
 
(0.8
)
   
 
(1.0
)
   
 
0.4
 
   
 
(1.6
)
    
  
  
  
COMPREHENSIVE INCOME (LOSS)
   
$
1.8
 
   
$
(12.6
)
   
$
(90.2
)
   
$
(16.8
)
    
  
  
  
                                     
OPERATING DATA
                                    
                                     
SHIPMENTS (Tons in Thousands)
  
 
642.2
 
   
 
687.1
 
   
 
2,001.0
 
   
 
2,189.0
 
 
See notes to consolidated financial statements

2

 
RYERSON TULL, INC.
AND SUBSIDIARY COMPANIES
Consolidated Statement of Cash Flows (Unaudited)
    
Dollars in Millions
  
    
Nine Months Ended September 30
  
    
2002
     
2001
  
OPERATING ACTIVITIES
                  
Net income (loss)
   
$
(90.6
)
   
$
(15.2
)
    
  
Adjustments to reconcile net income to net cash provided by (used for) operating activities:
                  
Depreciation and amortization
   
 
19.7
 
   
 
24.2
 
Deferred employee benefit cost
   
 
(2.0
)
   
 
(1.6
)
Deferred income taxes
   
 
14.1
 
   
 
30.9
 
Restructuring and plant closure costs
   
 
2.7
 
   
 
—  
 
(Gain) loss from the sale of ISC, net of tax
   
 
1.7
 
   
 
—  
 
Shares received from demutualization of an insurance company
   
 
(5.1
)
   
 
—  
 
Cumulative effect of change in accounting principle, net of tax
   
 
82.2
 
   
 
—  
 
Write-off of investment in MetalSite, Inc.
   
 
—  
 
   
 
1.0
 
Gain from sale of assets
   
 
(10.9
)
   
 
(1.3
)
Change in assets and liabilities:
                  
Receivables
   
 
(46.6
)
   
 
161.5
 
Inventories
   
 
(21.0
)
   
 
107.2
 
Other assets
   
 
2.9
 
   
 
(1.2
)
Accounts payable
   
 
43.7
 
   
 
(13.2
)
Accrued liabilities
   
 
3.5
 
   
 
(43.0
)
Other deferred items
   
 
(0.2
)
   
 
(0.8
)
    
  
Net adjustments
   
 
84.7
 
   
 
263.7
 
    
  
Net cash provided by (used for) operating activities
   
 
(5.9
)
   
 
248.5
 
    
  
                   
INVESTING ACTIVITIES
                  
Capital expenditures
   
 
(6.8
)
   
 
(10.6
)
Unrestricted proceeds from sale of short-term investment
   
 
5.7
 
   
 
—  
 
Proceeds from sale of investment in joint venture
   
 
—  
 
   
 
2.9
 
Proceeds from sales of assets
   
 
12.0
 
   
 
5.1
 
    
  
Net cash provided by (used for) investing activities
   
 
10.9
 
   
 
(2.6
)
    
  
                   
FINANCING ACTIVITIES
                  
Debt retirement
   
 
—  
 
   
 
(142.2
)
Net change in short-term borrowing
   
 
—  
 
   
 
(97.0
)
Dividends paid
   
 
(3.9
)
   
 
(3.9
)
    
  
Net cash provided by (used for) financing activities
   
 
(3.9
)
   
 
(243.1
)
    
  
                   
Net increase in cash and cash equivalents
   
 
1.1
 
   
 
2.8
 
Cash and cash equivalents—beginning of year
   
 
20.5
 
   
 
23.8
 
    
  
Cash and cash equivalents—end of period
   
$
21.6
 
   
$
26.6
 
    
  
                   
SUPPLEMENTAL DISCLOSURES
                  
Cash paid (received) during the period for:
                  
Interest
   
$
10.7
 
   
$
23.3
 
Income taxes, net
   
 
(26.1
)
   
 
(24.5
)
 
See notes to consolidated financial statements

3

RYERSON TULL, INC.
AND SUBSIDIARY COMPANIES
 
Consolidated Balance Sheet
 
    
Dollars in Millions
    
September 30, 2002
   
December 31, 2001
    
(unaudited)
          
ASSETS
                            
CURRENT ASSETS
                            
Cash and cash equivalents
          
$
21.6
          
$
20.5
Restricted cash
          
 
1.3
          
 
—  
Receivables less provision for allowances, claims and doubtful accounts of $11.8 and $10.7, respectively
          
 
166.2
          
 
119.6
Inventories, net of LIFO reserve of $40.5 and $9.7, respectively
          
 
420.5
          
 
399.5
Deferred income taxes
          
 
0.5
          
 
0.7
           
         
Total current assets
          
 
610.1
          
 
540.3
                             
INVESTMENTS AND ADVANCES
          
 
7.0
          
 
6.0
PROPERTY, PLANT AND EQUIPMENT
                            
Valued on basis of cost
   
$
596.2
          
$
595.1
       
Less accumulated depreciation
   
 
361.1
   
 
235.1
   
 
345.4
   
 
249.7
    
         
      
DEFERRED INCOME TAXES
          
 
100.7
          
 
104.7
INTANGIBLE PENSION ASSET
          
 
8.4
          
 
8.4
EXCESS OF COST OVER NET ASSETS ACQUIRED
          
 
—  
          
 
91.1
OTHER ASSETS
          
 
6.8
          
 
9.7
           
         
Total Assets
          
$
968.1
          
$
1,009.9
           
         
LIABILITIES AND STOCKHOLDERS’ EQUITY
                            
CURRENT LIABILITIES
                            
Accounts payable
          
$
138.5
          
$
93.5
Accrued liabilities
          
 
57.9
          
 
50.2
           
         
Total current liabilities
          
 
196.4
          
 
143.7
                             
LONG-TERM DEBT
          
 
100.5
          
 
100.6
DEFERRED EMPLOYEE BENEFITS AND OTHER
          
 
213.5
          
 
213.9
           
         
Total liabilities
          
 
510.4
          
 
458.2
                             
COMMITMENTS & CONTINGENCIES
          
 
—  
          
 
—  
                             
STOCKHOLDERS’ EQUITY (Schedule A)
          
 
457.7
          
 
551.7
           
         
Total Liabilities and Stockholders’ Equity
          
$
968.1
          
$
1,009.9
           
         
 
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 September 30, 2002 and for the three-month and nine-month periods ended September 30, 2002 and 2001 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, 2001.
 
NOTE 2/EARNINGS PER SHARE
 
    
Dollars and Shares
In Millions
(except per share data)
  
    
Three Months Ended September 30
     
Nine Months Ended September 30
  
    
2002
   
2001
     
2002
     
2001
  
Basic earnings (loss) per share
                                  
                                   
Income (loss) from continuing operations
   
$
2.6
   
$
(11.6
)
   
$
(6.7
)
   
$
(15.2
)
Less preferred stock dividends
   
 
0.1
   
 
—  
 
   
 
0.2
 
   
 
0.1
 
    
  
  
  
Income (loss) from operations available to common stockholders
   
 
2.5
   
 
(11.6
)
   
 
(6.9
)
   
 
(15.3
)
Discontinued operations
                                  
—Inland Steel Company—gain on sale
   
 
—  
   
 
—  
 
   
 
(1.7
)
   
 
—  
 
Cumulative effect of change in accounting principle
   
 
—  
   
 
—  
 
   
 
(82.2
)
   
 
—  
 
    
  
  
  
Net income (loss) available to common stockholders
   
$
2.5
   
$
(11.6
)
   
$
(90.8
)
   
$
(15.3
)
    
  
  
  
Average shares of common stock outstanding
   
 
24.8
   
 
24.8
 
   
 
24.8
 
   
 
24.8
 
    
  
  
  
Basic earnings (loss) per share
                                  
From continuing operations
   
$
0.10
   
$
(0.47
)
   
$
(0.28
)
   
$
(0.62
)
Discontinued operations
                                  
—Inland Steel Company—gain on sale
   
 
—  
   
 
—  
 
   
 
(0.07
)
   
 
—  
 
Cumulative effect of change in accounting principle
   
 
—  
   
 
—  
 
   
 
(3.31
)
   
 
—  
 
    
  
  
  
Net income (loss) per share
   
$
0.10
   
$
(0.47
)
   
$
(3.66
)
   
$
(0.62
)
    
  
  
  

5

 
    
Dollars and Shares
In Millions
(except per share data)
  
    
Three Months Ended
September 30
     
Nine Months Ended
September 30
  
Diluted earnings per share
                                  
                                   
Income (loss) from continuing operations available to stockholders
   
$
2.5
   
$
(11.6
)
   
$
(6.9
)
   
$
(15.3
)
Discontinued operations
                                  
—Inland Steel Company—gain on sale
   
 
—  
   
 
—  
 
   
 
(1.7
)
   
 
—  
 
Cumulative effect of change in accounting principle
   
 
—  
   
 
—  
 
   
 
(82.2
)
   
 
—  
 
    
  
  
  
Net income (loss) available to stockholders
   
$
2.5
   
$
(11.6
)
   
$
(90.8
)
   
$
(15.3
)
    
  
  
  
Average shares of common stock outstanding
   
 
24.8
   
 
24.8
 
   
 
24.8
 
   
 
24.8
 
Dilutive effect of stock options
   
 
0.1
   
 
0.3
 
   
 
0.2
 
   
 
0.3
 
    
  
  
  
Shares outstanding for diluted earnings per share calculation
   
 
24.9
   
 
25.1
 
   
 
25.0
 
   
 
25.1
 
    
  
  
  
Diluted earnings (loss) per share
                                  
From continuing operations
   
$
0.10
   
$
(0.47
)
   
$
(0.28
)
   
$
(0.62
)
Discontinued operations
                                  
—Inland Steel Company—gain on sale
   
 
—  
   
 
—  
 
   
 
(0.07
)
   
 
—  
 
Cumulative effect of change in accounting principle
   
 
—  
   
 
—  
 
   
 
(3.31
)
   
 
—  
 
    
  
  
  
Net income (loss) per share
   
$
0.10
   
$
(0.47
)
   
$
(3.66
)
   
$
(0.62
)
    
  
  
  
 
NOTE 3/RESTRUCTURING CHARGES
 
In the second quarter of 2002, the Company recorded a charge of $2.0 million for costs associated with the closure of a facility in the southern United States. The charge consists primarily of employee-related costs. Included in the charge is severance for 40 employees. As of September 30, 2002, 4 employees have been separated from the Company as a result of the restructuring initiative. It is expected that the restructuring actions will be completed by year-end 2002.
 
In the fourth quarter of 2001, the Company recorded a restructuring charge of $19.4 million as a result of workforce reductions and plant consolidation. In the third quarter of 2002, the Company recorded a charge of $0.7 million as an adjustment to the $19.4 million recorded in 2001. The additional charge was due to a reduction in the market value of assets in a union sponsored pension plan from the initial estimate to the calculation of the final withdrawal liability. As part of the restructuring, certain facilities in Michigan were closed and the Company is in the process of consolidating two facilities into one location in Chicago. Included in the charge is severance for 178 employees. As of September 30, 2002, 52 employees remain to be separated from the Company as part of the restructuring initiative. Details of the restructuring charge are as follows:

6

 
(In millions)
     
Restructuring
Charge
   
Utilized
     
Balance at
September 30, 2002
Write-down of long-lived assets
     
$
10.3
   
$
10.3
     
$
 —  
Employee costs
     
 
6.4
   
 
5.5
     
 
0.9
Tenancy costs and other
     
 
3.4
   
 
0.2
     
 
3.2
      
  
    
      
$
20.1
   
$
16.0
     
$
4.1
 
It is expected that the restructuring actions will be completed by year-end 2002. In preparation for the planned disposition of one of the properties in Chicago referenced above, the Company retained an environmental consultant to conduct Phase I and Phase II environmental studies. Based on the consultant’s reports on environmental contaminants at the site, the Company believes that the reserve established in the fourth quarter of 2001 is adequate to cover potential remediation costs for environmental issues identified in the consultant’s reports.
 
In the second quarter of 2000, the Company recorded a restructuring charge of $23.3 million. The charge was 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. Included in the charge is severance for 319 employees. There are no employees remaining to be separated from the Company as a result of that restructuring initiative. Details of the 2000 restructuring charge are as follows:
 
(In millions)
     
Restructuring
Charge
   
Utilized
     
Balance at
September 30, 2002
Write-down of long-lived assets
     
$
9.3
   
$
9.3
     
$
 —  
Employee costs
     
 
7.4
   
 
7.4
     
 
—  
Tenancy costs and other
     
 
6.6
   
 
2.8
     
 
3.8
      
  
    
      
$
23.3
   
$
19.5
     
$
3.8
 
The restructuring actions were completed by December 31, 2000.
 
NOTE 4/TRADE RECEIVABLES SECURITIZATION
 
On March 29, 2001, the Company and certain of its subsidiaries completed arrangements for a $250 million 364-day trade receivables securitization facility with a group of financial institutions. The Company formed a special-purpose, wholly-owned, bankruptcy-remote subsidiary (Ryerson Tull Receivables LLC) for the sole purpose of buying receivables of certain subsidiaries of the Company and selling an undivided interest in substantially all trade accounts receivable to certain commercial paper conduits. This securitization facility includes substantially all of the Company’s accounts receivable. On March 15, 2002, the facility was renewed for a 364-day period ending March 14, 2003, reducing the facility from $250 million to $200 million, and modifying certain termination events and covenants including, among other things, eliminating the termination of the facility if the Company fails to maintain specified debt ratings on its long-term unsecured debt. Fundings under the facility are limited to the lesser of a funding base, comprised of eligible receivables, and $200 million.
 

7

 
Sales of accounts receivable are reflected as a reduction of “receivables less provisions for allowances, claims and doubtful accounts” in the Consolidated Balance Sheet and the proceeds received are included in cash flows from operating activities in the Consolidated Statement of Cash Flows. Proceeds from the sales of receivables are less than the face amount of accounts receivable sold by an amount equal to a discount on sale that approximates the conduits’ financing cost of issuing their own commercial paper, which is backed by their ownership interests in the accounts receivable sold by the special purpose subsidiary, plus an agreed-upon margin. These costs, totaling $0.6 million and $2.4 million in the third quarter and the first nine months of 2002, respectively, are charged to “other revenue and expense, net” in the Consolidated Statement of Operations.
 
Generally, the facility provides that as payments are collected from the sold accounts receivable, the special purpose subsidiary may elect to have the commercial paper conduits reinvest the proceeds in interests in new accounts receivable. The commercial paper conduits, in addition to their rights to collect payments from that portion of the interests in the accounts receivable owned by them, also have rights to collect payments from that portion of the ownership interest in the accounts receivable that is owned by the special purpose subsidiary. In calculating the fair market value of the Company’s retained interest in the receivables, the book value of the receivables represented the best estimate of the fair market value due to the current nature of these receivables. The amended facility, which expires March 14, 2003, requires the Company to comply with various affirmative and negative covenants and certain financial covenants, including covenants on net worth and the Company’s debt-to-capital ratio. The amended facility requires early amortization if the special-purpose subsidiary does not maintain a minimum equity requirement. Additionally, the facility terminates on the occurrence and failure to cure certain events, including, among other things, any failure of the special-purpose subsidiary to maintain certain ratios related to the collectability of the receivables and failure of the Company to meet the debt-to-capital ratio and net worth covenants. The Company and the special-purpose subsidiary were in compliance with these covenants at September 30, 2002.
 
The table below summarizes certain cash flows from and paid to securitization trusts ($ in millions):
 
      
Nine Months Ended September 30, 2002
Proceeds from collections reinvested
     
$
553
 
NOTE 5/GOODWILL AND OTHER INTANGIBLE ASSETS
 
On January 1, 2002, the Company adopted Statement of Financial Accounting Standards No. 142, “Goodwill and Other Intangible Assets” (“SFAS 142”). The Company estimated the fair value of its reporting units using a present value method that discounted future cash flows. The cash flow estimates incorporate assumptions on future cash flow growth, terminal values and discount rates. Any such valuation is sensitive to these assumptions. Because the fair value of each reporting unit was below its carrying value (including goodwill), application of SFAS 142 required the Company to complete the second step of the goodwill impairment test and compare the implied fair value of each reporting unit’s goodwill with the carrying value of that goodwill. As a result, the Company recorded an impairment charge of $91.1 million ($82.2 million after tax) to write-off the entire goodwill amount as a cumulative effect of a change in accounting principle.
 

8

 
The Financial Accounting Standards Board also issued Statement of Accounting Standards No. 141 (“SFAS 141”), “Business Combinations,” which requires all business combinations after June 30, 2001 to be accounted for under the purchase method.
 
As a result of adopting SFAS 142 and SFAS 141, the accounting policy for excess of cost over net assets acquired is as follows, effective January 1, 2002:
 
Excess of Cost Over Net Assets Acquired: The Company recognizes the excess of the cost of an acquired entity over the net amount assigned to assets acquired and liabilities assumed as goodwill. Goodwill is tested for impairment on an annual basis and between annual tests in certain circumstances. Impairment loss is recognized whenever the implied fair value of goodwill is less than its carrying value. Prior to January 1, 2002, goodwill was amortized over a 25-year period. Beginning January 1, 2002, goodwill is no longer amortized.
 
The following table presents a comparison of the third quarter 2002 and first nine months of 2002 results to 2001 results adjusted to exclude goodwill amortization expense:
 
    
In Millions
(except per share data)
  
    
Three Months Ended
September 30
     
Nine Months Ended
September 30
  
    
2002
   
2001
     
2002
     
2001
  
Income (loss) before cumulative effect of change in accounting principle
   
$
2.6
   
$
(11.6
)
   
$
(8.4
)
   
$
(15.2
)
Cumulative effect of change in accounting principle
   
 
—  
   
 
—  
 
   
 
(82.2
)
   
 
—  
 
    
  
  
  
Reported net income (loss)
   
 
2.6
   
 
(11.6
)
   
 
(90.6
)
   
 
(15.2
)
Addback: goodwill amortization, net of tax
   
 
—  
   
 
1.0
 
   
 
—  
 
   
 
3.1
 
    
  
  
  
Adjusted net income (loss)
   
$
2.6
   
$
(10.6
)
   
$
(90.6
)
   
$
(12.1
)
    
  
  
  
Basic earnings (loss) per share:
                                  
Reported net income (loss)
   
$
0.10
   
$
(0.47
)
   
$
(3.66
)
   
$
(0.62
)
Addback: goodwill amortization, net of tax
   
 
—  
   
 
0.04
 
   
 
—  
 
   
 
0.13
 
    
  
  
  
Adjusted net income (loss)
   
$
0.10
   
$
(0.43
)
   
$
(3.66
)
   
$
(0.49
)
    
  
  
  
Diluted earnings (loss) per share:
                                  
Reported net income (loss)
   
$
0.10
   
$
(0.47
)
   
$
(3.66
)
   
$
(0.62
)
Addback: goodwill amortization, net of tax
   
 
—  
   
 
0.04
 
   
 
—  
 
   
 
0.13
 
    
  
  
  
Adjusted net income (loss)
   
$
0.10
   
$
(0.43
)
   
$
(3.66
)
   
$
(0.49
)
    
  
  
  
 
NOTE 6/SHORT-TERM INVESTMENTS
 
The Company’s accounting policy for short-term investments is as follows:
 
Short-term Investments: The carrying amounts reported in the consolidated balance sheets for marketable debt and equity securities are based on quoted market prices and approximate fair value.

9

 
Investment securities classified as available-for-sale are reported at fair value based on current market quotes with unrealized gains and losses, net of any tax effect, recorded as a separate component of comprehensive income in stockholders’ equity until realized. Gains and losses on investment securities sold are determined based on the specific identification method and are included in “other revenue and expense, net.” No securities are held for speculative or trading purposes.
 
NOTE 7/ISC/ISPAT TRANSACTION
 
Pursuant to the ISC/Ispat Merger Agreement, the Company agreed to indemnify Ispat for losses, if they should arise, exceeding certain minimum amounts in connection with breaches of representations and warranties contained in the ISC/Ispat Merger Agreement and for expenditures and losses, if they should arise, relating to certain environmental liabilities exceeding, in most instances, minimum amounts. The maximum liability for which the Company can be responsible with respect to such obligations is $90 million in the aggregate. There are also certain other covenant commitments made by the Company contained in the ISC/Ispat Merger Agreement which are not subject to a maximum amount. In general, Ispat must have made indemnification claims with respect to breaches of representations and warranties prior to March 31, 2000; however, claims relating to breaches of representations and warranties related to tax matters and certain organizational matters must be made within 90 days after the expiration of the applicable statute of limitations, and claims with respect to breaches of representations and warranties related to environmental matters must be made prior to July 16, 2003.
 
On May 29, 2001, the Company entered into a settlement agreement with Ispat that settled certain claims by each party for breaches of representations and warranties and other matters contained in the ISC/Ispat Merger Agreement, excluding claims with respect to breaches of representations and warranties related to environmental matters and expenditures and losses relating to environmental liabilities. The Company paid $7.5 million and agreed that Ispat could retain approximately $4.85 million of property tax refunds to which the Company was entitled and future tax refunds and credits of up to $2.7 million. Through September 30, 2002, $12.35 million of these amounts apply against the $90 million cap described above.
 
In July 1998, the Company purchased environmental insurance payable directly to Ispat and ISC with coverage up to $90 million covering claims made during the term of the policy for certain but not all environmental matters. The policy has an initial term of five years, and can be renewed at the Company’s option for up to an additional three years upon payment of an additional premium.
 
Under the indemnification provisions of the merger agreement, Ispat has notified the Company of certain environmental matters of which Ispat is aware and of certain environmental expenses that it has incurred or may incur. As of September 30, 2002, those notices for which Ispat has quantified all or some portion of the related costs amounted to approximately $20 million; however, there are a number of claims that are not presently quantified. During the second quarter 2002, the Company recorded an additional $2.7 million pre-tax provision, $1.7 million after tax, to provide for certain of these matters. Based on the current status of the remaining matters, the Company is unable to determine whether any such environmental matters will result in additional expense to the Company.
 
As part of the ISC/Ispat Transaction, the Inland Steel Industries Pension Plan (the “ISC Pension Plan”), in which employees of both ISC and the Company participated, was transferred to ISC. The Company’s remaining employees that formerly had participated in the ISC Pension Plan became participants in

10

Ryerson Tull’s pension plan. The ISC Pension Plan has unfunded benefit liabilities on a termination basis, as determined by the Pension Benefit Guaranty Corporation (“PBGC”), an agency of the U.S. government. As a condition to completing the ISC/Ispat Transaction, Ispat, the Company and certain of their affiliates entered into an agreement with the PBGC to provide certain financial commitments to reduce the underfunding of the ISC Pension Plan and to secure ISC Pension Plan unfunded benefit liabilities on a termination basis. These requirements include a Company guaranty of $50 million, for five years, of the obligations of Ispat to the PBGC in the event of a distress or involuntary termination of the ISC Pension Plan. In July 2001, the Company provided a $50 million letter of credit to the PBGC as security for the guaranty. Any payment under the PBGC guaranty, should it occur, would be applied against the $90 million limit on the Company’s indemnification obligations to Ispat.
 
Under the agreement among the PBGC, Ispat and the Company, by July 16, 2003, Ispat is required to provide adequate replacement security to the PBGC, which would permit the Company to terminate the guaranty and the related letter of credit. If Ispat does not provide the security by that date, the Company will be required, to the extent Ispat does not provide such security, to renew its letter of credit or to place up to $50 million in an escrow account for possible application by the PBGC to any underfunding in the event of a distress or involuntary termination of the ISC pension plan.
 
NOTE 8/RESTRICTED CASH
 
In the first quarter of 2002, the Company recorded a $5.1 million pretax gain for the receipt of shares as a result of the demutualization of one of its insurance carriers, Prudential. This gain represents a portion of the total of $6.3 million of shares received. The remaining shares are attributable to participants of the optional life insurance plan and therefore the liability has been recorded as a benefit payable.
 
In the second quarter of 2002, the Company sold all of the shares received. As a result of the sale, the Company recorded in the quarter income of $0.6 million, its allocable share of the gain on sale. This item is included in “other revenue and expense, net.” The portion of the sale proceeds attributable to optional life insurance plan participants is required to be used for the benefit of plan participants and as such, has been recorded as “restricted cash” in the balance sheet. In the third quarter of 2002, the Company began making payments for the benefit of optional life insurance plan participants. At September 30, 2002, these payments totaled less than $0.1 million.
 
NOTE 9/ADJUSTMENT TO THE GAIN ON SALE OF IEMC
 
In the second quarter of 2002, the Company recorded a pretax charge of $8.5 million in connection with the settlement of litigation. The charge was recorded as a selling price adjustment to the 1998 sale of Inland Engineered Materials Corporation.

11

 
Item 2.    Management’s Discussion and Analysis of Financial Condition and Results of Operations
 
Results of Operations—Comparison of Third Quarter 2002 to Third Quarter 2001
 
For the third quarter of 2002, the Company reported consolidated net income of $2.6 million, or $0.10 per diluted share, as compared with a net loss of $11.6 million, or $0.47 cents per diluted share, in the year-ago quarter.
 
Included in the third quarter 2002 results are a pretax gain of $10.9 million, $6.6 million after-tax or $0.27 per share, on the sale of a facility in Emeryville, California and a $0.7 million pretax charge, $0.4 million after-tax or $0.02 per share, to adjust the $19.4 million restructuring charge recorded in the fourth quarter of 2001. Excluding these items, the net loss for third quarter of 2002 was $3.6 million, or $0.15 per diluted share.
 
Sales for the third quarter of 2002 decreased 2 percent to $533.2 million from the same period a year ago. Average selling price increased 5 percent, but volume decreased 7 percent from the same period a year ago.
 
Gross profit per ton of $171 in the third quarter of 2002 increased from $149 per ton in the year-ago quarter. The increase was due to a 5 percent increase in average selling price and the negative impact in the prior year period of a reduction in inventory levels which caused the inclusion of older, higher-cost materials in the cost of goods sold. Expenses (defined as operating expenses plus depreciation) increased 5 percent on a per ton basis to $174 per ton in the third quarter of 2002 from $165 per ton a year ago due to volume decline. The net result of the above is an operating loss of $3 per ton this quarter versus an operating loss of $16 per ton a year ago.
 
For the quarter, the Company reported an operating profit of $8.0 million, including the gain on sale and restructuring charge, compared to an operating loss of $12.3 million in the year ago period. Financial Accounting Standards Board Statement No. 142 (“SFAS 142”), “Goodwill and Other Intangible Assets” discontinues amortization of goodwill. As a result, no goodwill amortization expense was recognized in the third quarter of 2002, while the year-ago period included a $1.3 million charge.
 
Results of Operations—Comparison of First Nine Months 2002 to First Nine Months 2001
 
For the first nine months of 2002, the Company reported a consolidated net loss of $90.6 million, or $3.66 per diluted share, as compared with a net loss of $15.2 million, or $0.62 cents per diluted share, in the year-ago period.
 
Included in the 2002 results is an after-tax charge of $82.2 million, or $3.31 per share, from the Company’s adoption of SFAS 142. SFAS 142 requires an annual assessment of goodwill impairment by applying a fair-value-based test. As a result of this assessment, the Company wrote off the entire goodwill amount as of January 1, 2002 as a cumulative effect of change in accounting principle. Also included in the 2002 results is an after-tax charge of $1.7 million, or $0.07 per share, for environmental indemnification claims made by Ispat Inland, Inc. in connection with the Company’s sale of the Inland Steel Company. Excluding these charges, the Company had a loss per share of $0.28 in the first nine months of 2002.
 
Sales of $1.6 billion decreased 9 percent from the first nine months of 2001 reflecting a continuation of the depressed market since the second half of 2001. Volume decreased 9 percent and average selling price decreased 1 percent from the year ago period.

12

 
Gross profit per ton of $164 in the first nine months increased 1 percent from $163 per ton in the year-ago period despite the 1 percent decline in average selling price. The year ago period was negatively impacted by a reduction in inventory levels which caused the inclusion of older higher-cost materials in the cost of goods sold. Although volume declined 9 percent from the same period a year ago, expenses (defined as operating expenses plus depreciation) increased only 2 percent on a per ton basis to $166 in the first nine months of 2002 from $163 a year ago, reflecting an improved cost structure.
 
Included in the 2002 operating loss are a pretax gain of $10.9 million on the sale of a facility in Emeryville, California, and pretax charges of $8.5 million for the settlement of litigation relating to the sale of Inland Engineered Materials Corporation (“IEMC”) and $2.7 million for costs associated with facility closures. Included in the 2001 operating loss is a $1.0 million charge for the write-off of the Company’s investment in MetalSite, Inc., which was an Internet marketplace for steel that halted commercial operations in the second quarter of 2001, and a pretax gain of $1.3 million on the sale of a facility in Minneapolis, Minnesota.
 
Financial Accounting Standards Board Statement No. 142 (“SFAS 142”), “Goodwill and Other Intangible Assets” discontinues amortization of goodwill. As a result, no goodwill amortization expense was recognized in the first nine months of 2002, while the year ago period included a $3.7 million charge. Excluding the gain on sale of the California facility, the adjustment to the gain on the sale of IEMC and the plant closure costs in 2002, and the investment write-off, gain on sale and goodwill amortization in 2001, the Company reported an operating loss of $3.1 million compared to zero operating profit in the year ago period.
 
In the first quarter of 2002, the Company recorded a $5.1 million pretax gain for the receipt of shares as a result of the demutualization of one of its insurance carriers, Prudential. This gain represents a portion of the total of $6.3 million of shares received. The remaining shares are attributable to participants of the optional life insurance plan and therefore the liability has been recorded as a benefit payable. In the second quarter of 2002, the Company sold all of the shares received. As a result of the sale, the Company recorded in the quarter income of $0.6 million, its allocable share of the gain on sale. This item is included in “other revenue and expense, net.” The portion of the sale proceeds attributable to optional life insurance plan participants is required to be used for the benefit of plan participants and as such, has been recorded as “restricted cash” in the balance sheet.
 
Liquidity and Financing
 
The Company had cash and cash equivalents at September 30, 2002 of $21.6 million, compared to $20.5 million at December 31, 2001. At September 30, 2002, the Company had $100 million outstanding fundings under its trade receivables securitization facility, no outstanding short-term funded borrowing under its revolving credit facility and $65 million of letters of credit issued under the credit facility.
 
At September 30, 2002, the Company had approximately $90 million available from its short-term funding sources. Although on an individual facility basis the Company had $73 million available under the trade receivables securitization facility and $70 million available under the revolving credit facility, after taking into account an estimated fourth-quarter, non-cash charge to equity for decreases in pension funding levels and ratio requirements for the facilities, total availability was limited to $90 million. The non-cash pension charge to equity is described in the next paragraph. The approximately $90 million of availability compares to availability of $116 million at December 31, 2001.
 

13

The Company’s pension plan met the minimum funding requirements under the Employee Retirement Income Security Act (ERISA) for 2002. However, pension trust investment returns have been negatively impacted by the performance of the stock market. The latter factor, coupled with lower discount rates, will decrease the level of pension funding recorded on the Company’s financial statements at December 31, 2002 by approximately $60 million from year-end 2001. Consistent with Financial Accounting Standard No. 87, the Company estimates a fourth quarter, non-cash charge to equity of approximately $40 million. The actual charge will be determined as of December 31, 2002. The Company will then record an increase in the additional minimum pension liability of an estimated $60 million and a corresponding after-tax charge to equity of an estimated $40 million as part of comprehensive income (loss) for 2002.
 
The Company did not have any ERISA-required pension plan contributions during 2002 and also does not forecast any ERISA-required contributions for 2003. The Company elected to make a voluntary contribution of $4.7 million to improve the plan’s funded status in 2002 and may elect to again make voluntary contributions in 2003. In the event that asset returns do not improve, the Company could have future sizeable pension contribution requirements beginning as soon as 2004. The Company is unable to determine the amount or timing of any such contributions required by ERISA or whether any such contributions would have a material adverse effect on the Company’s financial condition or results of operations.
 
The Company has a committed bank revolving credit facility of $175 million that extends until July 19, 2004. The facility is secured by inventory. The revolving credit agreement contains covenants that, among other things, restrict the payment of dividends, the amount of capital stock repurchases, the creation of certain kinds of secured indebtedness and of certain kinds of subsidiary debt, take or pay contracts, transactions with affiliates, mergers and consolidations, and sales of assets. The facility also contains certain financial covenants, including covenants regarding net worth and the Company’s debt-to-capital ratio, with which the Company was in compliance at September 30, 2002.
 
At September 30, 2002, $40 million of the $175 million revolving credit facility was not available for borrowing. Of that $40 million, $15 million will become available if the Company meets certain financial ratios and the remainder will become available upon consent of all the lenders. Letters of credit issued under the facility reduce the amount available for borrowing. At September 30, 2002, the Company had $65 million of letters of credit outstanding, primarily related to the PBGC guaranty discussed below and no short-term borrowings under the credit facility. Although the Company had $70 million available under this credit facility, total availability under both this facility and the trade receivables securitization facility is limited to approximately $90 million as discussed above. When availability of funds under the credit facility is less than $25 million, the Company is limited to a maximum payment of $10 million in dividends in any calendar year and $3 million in stock purchases in any twelve-month period.
 
As a condition of completing the ISC/Ispat Transaction, Ispat, ISC and the Company entered into an agreement with the Pension Benefit Guaranty Corporation (“PBGC”) to provide certain financial commitments to reduce the underfunding of the ISC Pension Plan on a termination basis. These obligations include a guaranty of $50 million to the PBGC in the event of a distress or involuntary termination of the ISC Pension Plan (now the Ispat Inland, Inc. Pension Plan). The agreement also required the Company to provide collateral for its guaranty in the event of a downgrade of the Company’s unsecured debt rating below specified levels. On May 1, 2001, Moody’s Investors Services

14

 
reduced its rating on such unsecured debt to below the specified levels and in July 2001, the Company provided a letter of credit in the amount of $50 million to the PBGC under the revolving credit facility discussed above. Any payment under the guaranty, should it occur, would be applied against the $90 million limit on the Company’s indemnification obligations to Ispat.
 
Under the agreement among the PBGC, Ispat and the Company, by July 16, 2003, Ispat is required to provide adequate security to the PBGC, which would permit the Company to terminate the guaranty and the related letter of credit. If Ispat does not provide the security by that date, the Company will be required, to the extent Ispat does not provide such security, to renew its letter of credit or to place up to $50 million in an escrow account for possible application by the PBGC to any underfunding in the event of a distress or involuntary termination of the ISC pension plan.
 
The Company has a 364-day trade receivables securitization facility, in connection with which the Company formed a special-purpose, wholly-owned, bankruptcy-remote subsidiary for the sole purpose of buying receivables of certain subsidiaries of the Company and selling an undivided interest in all eligible receivables to certain commercial paper conduits. This subsidiary is part of the Company’s consolidated financial statements. The facility, which was scheduled to expire March 28, 2002, was renewed on March 15, 2002 for a 364-day period ending March 14, 2003. The facility was amended to reduce maximum availability from $250 million to $200 million and to modify certain termination events and covenants including, among other things, eliminating the termination of the facility if the Company fails to maintain specified debt rating on its long-term unsecured debt. Fundings under the renewed facility are limited to the lesser of a funding base, comprised of eligible receivables, and $200 million. Although the level of receivables would have allowed $73 million of additional funding at September 30, 2002, total availability under both this facility and the revolving credit facility is limited to approximately $90 million as discussed above. The amended facility requires the Company to comply with various affirmative and negative covenants and certain financial covenants, including covenants on net worth and the Company’s debt-to-capital ratio. The amended facility requires early amortization if the special-purpose subsidiary does not maintain a minimum equity requirement. Additionally, the facility terminates on the occurrence and failure to cure certain events, including, among other things, any failure of the special-purpose subsidiary to maintain certain ratios related to the collectability of the receivables and to meet the debt-to-capital ratio and net worth covenants. The Company and the special-purpose subsidiary were in compliance with these covenants at September 30, 2002.
 
At September 30, 2002, $100 million of the Company’s 9 1/8% Notes due July 15, 2006 remain outstanding. The indenture under which the Notes were issued in 1996 contains covenants limiting, among other things, the creation of certain types of secured indebtedness, sale and leaseback transactions, the repurchase of capital stock, transactions with affiliates and mergers, consolidations and certain sales of assets. In addition, the Notes restrict the payment of dividends, although to a lesser extent than the facilities described above. The Notes also include a cross-default provision in the event of a default in the revolving credit facility. The Company was in compliance with the revolving credit facility covenants at September 30, 2002.
 
ISC/Ispat Transaction
 
Pursuant to the ISC/Ispat Merger Agreement, the Company agreed to indemnify Ispat for losses, if they should arise, exceeding certain minimum amounts in connection with breaches of representations and warranties contained in the ISC/Ispat Merger Agreement and for expenditures and losses, if they should arise, relating to certain environmental liabilities exceeding, in most instances, minimum amounts. The maximum liability for which the Company can be responsible with respect to such obligations is

15

$90 million in the aggregate. There are also certain other covenant commitments made by the Company contained in the ISC/Ispat Merger Agreement which are not subject to a maximum amount. In general, Ispat must have made indemnification claims with respect to breaches of representations and warranties prior to March 31, 2000; however, claims relating to breaches of representations and warranties related to tax matters and certain organizational matters must be made within 90 days after the expiration of the applicable statute of limitations, and claims with respect to breaches of representations and warranties related to environmental matters must be made prior to July 16, 2003.
 
On May 29, 2001, the Company entered into a settlement agreement with Ispat that settled certain claims by each party for breaches of representations and warranties and other matters contained in the ISC/Ispat Merger Agreement, excluding claims with respect to breaches of representations and warranties related to environmental matters and expenditures and losses relating to environmental liabilities. The Company paid $7.5 million and agreed that Ispat could retain approximately $4.85 million of property tax refunds to which the Company was entitled and future tax refunds and credits of up to $2.7 million. Through September 30, 2002, $12.35 million of these amounts apply against the $90 million cap described above.
 
In July 1998, the Company purchased environmental insurance payable directly to Ispat and ISC with coverage up to $90 million covering claims made during the term of the policy for certain but not all environmental matters. The policy has an initial term of five years, and can be renewed at the Company’s option for up to an additional three years upon payment of an additional premium.
 
Under the indemnification provisions of the merger agreement, Ispat has notified the Company of certain environmental matters of which Ispat is aware and of certain environmental expenses that it has incurred or may incur. As of September 30, 2002, those notices for which Ispat has quantified all or some portion of the related costs amounted to approximately $20 million; however, there are a number of claims that are not presently quantified. During the second quarter 2002, the Company recorded an additional $2.7 million pre-tax provision, $1.7 million after tax, to provide for certain of these matters. Based on the current status of the remaining matters, the Company is unable to determine whether any such environmental matters will result in additional expense to the Company.
 
As part of the ISC/Ispat Transaction, the Inland Steel Industries Pension Plan (the “ISC Pension Plan”), in which employees of both ISC and the Company participated, was transferred to ISC. The Company’s remaining employees that formerly had participated in the ISC Pension Plan became participants in Ryerson Tull’s pension plan. The ISC Pension Plan has unfunded benefit liabilities on a termination basis, as determined by the Pension Benefit Guaranty Corporation (“PBGC”), an agency of the U.S. government. As a condition to completing the ISC/Ispat Transaction, Ispat, the Company and certain of their affiliates entered into an agreement with the PBGC to provide certain financial commitments to reduce the underfunding of the ISC Pension Plan and to secure ISC Pension Plan unfunded benefit liabilities on a termination basis. These requirements include a Company guaranty of $50 million, for five years, of the obligations of Ispat to the PBGC in the event of a distress or involuntary termination of the ISC Pension Plan. In July 2001, the Company provided a $50 million letter of credit to the PBGC as security for the guaranty. Any payment under the guaranty, should it occur, would be applied against the $90 million limit on the Company’s indemnification obligations to Ispat.
 
Under the agreement among the PBGC, Ispat and the Company, by July 16, 2003, Ispat is required to provide adequate security to the PBGC, which would permit the Company to terminate the guaranty and the related letter of credit. If Ispat does not provide the security by that date, the Company will be required, to the extent Ispat does not provide such security, to renew its letter of credit or to place up to

16

 
$50 million in an escrow account for possible application by the PBGC to any underfunding in the event of a distress or involuntary termination of the ISC pension plan.
 
Item 4.    Controls and Procedures
 
(a)
The Company’s Chief Executive Officer and Chief Financial Officer have concluded, based on an evaluation within 90 days of the filing date of this report, that the Company’s disclosure controls and procedures are effective for gathering, analyzing and disclosing any material information required to be disclosed in the Company’s filings under the Securities Exchange Act of 1934.
 
(b)
There have been no significant changes in internal controls, or in other factors that could affect the Company’s internal controls, subsequent to the date of evaluation.

17

 
PART II. OTHER INFORMATION
 
Item 5.    Other Information.
 
Some of the properties owned or leased by the Company are located in industrial areas or have a history of heavy industrial use. The Company may incur environmental liabilities with respect to these properties in the future that could have a material adverse effect on the Company’s financial condition or results of operations. The Company retained an environmental consultant to conduct Phase I and Phase II environmental studies for one of the properties that the Company intends to dispose of in connection with consolidating its Chicago operations. Based on the consultant’s reports on environmental contaminants at the site, the Company believes that the reserve established as part of the Restructuring Charge in the fourth quarter of 2001 is adequate to cover potential remediation costs for environmental issues identified in the consultant’s reports. The Company is not aware of any pending remedial actions or claims relating to environmental matters at properties presently used for Company operations that are expected to have a material adverse effect on the Company’s financial position or results of operations.
 
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 August 12, 2002, the Company filed a Current Report on Form 8-K, reporting, under Item 9—Regulation FD Disclosure, the Statements under Oath by the Principal Executive Officer and Principal Financial Officer of Ryerson Tull, Inc. as required under Section 906 of the Sarbanes-Oxley Act of 2002 and under the June 27, 2002 Order of the Securities and Exchange Commission.
 
  
On September 3, 2002, the Company filed a Current Report on Form 8-K, reporting, under Item 9—Regulation FD Disclosure, that the Company announced that it is fully operational at its new facility in Stockton, CA to service the San Francisco Bay area. As part of this move the Company sold its Emeryville, CA service center on August 30, 2002.

18

 
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 Chief Accounting Officer
 
Date: November 13, 2002

19

 
CERTIFICATIONS
 
Pursuant to the requirements of Section 302 of the Sarbanes-Oxley Act of 2002, the Principal Executive Officer and the Principal Financial Officer of Ryerson Tull, Inc. have signed the certificates on the dates indicated.

20

 
REPORT OF THE
PRINCIPAL EXECUTIVE OFFICER
 
I, Neil S. Novich, as Chairman, President & Chief Executive Officer, certify that:
 
1.
I have reviewed this quarterly report on Form 10-Q of Ryerson Tull, Inc.;
 
2.
Based on my knowledge, this quarterly report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this quarterly report;
 
3.
Based on my knowledge, the financial statements, and other financial information included in this quarterly report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this quarterly report;
 
4.
The registrant’s other certifying officers and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-14 and 15d-14) for the registrant and we have:
 
 
a)
designed such disclosure controls and procedures to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this quarterly report is being prepared;
 
 
b)
evaluated the effectiveness of the registrant’s disclosure controls and procedures as of a date within 90 days prior to the filing date of this quarterly report (the “Evaluation Date”); and
 
 
c)
presented in this quarterly report our conclusions about the effectiveness of the disclosure controls and procedures based on our evaluation as of the Evaluation Date;
 
5.
The registrant’s other certifying officers and I have disclosed, based on our most recent evaluation, to the registrant’s auditors and the audit committee of registrant’s board of directors:
 
 
a)
all significant deficiencies in the design or operation of internal controls which could adversely affect the registrant’s ability to record, process, summarize and report financial data and have identified for the registrant’s auditors any material weaknesses in internal controls; and
 
 
b)
any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal controls; and
 
6.
Registrant’s other certifying officers and I have indicated in this quarterly report whether or not there were significant changes in internal controls or in other factors that could significantly affect internal controls subsequent to the date of our most recent evaluation, including any corrective actions with regard to significant deficiencies and material weaknesses.
 
Date:              
  
November 13, 2002
     
Signature:     
  
/S/    NEIL S. NOVICH
   
   
Neil S. Novich
Chairman, President & Chief Executive Officer (Principal Executive Officer)

21

 
REPORT OF THE
PRINCIPAL FINANCIAL OFFICER
 
I, Jay M. Gratz, as Executive Vice President and Chief Financial Officer, certify that:
 
1
I have reviewed this quarterly report on Form 10-Q of Ryerson Tull, Inc.;
 
2
Based on my knowledge, this quarterly report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this quarterly report;
 
3
Based on my knowledge, the financial statements, and other financial information included in this quarterly report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this quarterly report;
 
4
The registrant’s other certifying officers and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-14 and 15d-14) for the registrant and we have:
 
 
d)
designed such disclosure controls and procedures to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this quarterly report is being prepared;
 
 
e)
evaluated the effectiveness of the registrant’s disclosure controls and procedures as of a date within 90 days prior to the filing date of this quarterly report (the “Evaluation Date”); and
 
 
f)
presented in this quarterly report our conclusions about the effectiveness of the disclosure controls and procedures based on our evaluation as of the Evaluation Date;
 
5
The registrant’s other certifying officers and I have disclosed, based on our most recent evaluation, to the registrant’s auditors and the audit committee of registrant’s board of directors:
 
 
b)
all significant deficiencies in the design or operation of internal controls which could adversely affect the registrant’s ability to record, process, summarize and report financial data and have identified for the registrant’s auditors any material weaknesses in internal controls; and
 
 
b)
any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal controls; and
 
6
Registrant’s other certifying officers and I have indicated in this quarterly report whether or not there were significant changes in internal controls or in other factors that could significantly affect internal controls subsequent to the date of our most recent evaluation, including any corrective actions with regard to significant deficiencies and material weaknesses.
 
Date:              
  
November 13, 2002
     
Signature:     
  
/S/    JAY M. GRATZ
   
   
Jay M. Gratz
Executive Vice President and Chief Financial
Officer (Principal Financial Officer)
 

22

 
Part I — Schedule A
 
RYERSON TULL, INC.
AND SUBSIDIARY COMPANIES
 
SUMMARY OF STOCKHOLDERS’ EQUITY
 
 
   
Dollars in Millions
  
   
September 30, 2002
    
December 31, 2001
  
   
(unaudited)
              
STOCKHOLDERS’ EQUITY
                                
                                 
Series A preferred stock ($1 par value)
                                
—80,025 shares and 80,230 shares issued and outstanding as of September 30, 2002 and December 31, 2001, respectively
          
$
0.1
 
          
$
0.1
 
Common stock ($1 par value)
                                
—50,556,350 shares issued as of
September 30, 2002 and December 31, 2001
          
 
50.6
 
          
 
50.6
 
Capital in excess of par value
          
 
861.7
 
          
 
862.5
 
Retained earnings
                                
Balance beginning of year
  
$
441.4
 
          
$
506.8
 
        
Net income (loss)
  
 
(90.6
)
          
 
(60.2
)
        
Dividends
                                
Series A preferred stock—
                                
$1.80 per share in 2002 and $2.40 per share in 2001
  
 
(0.2
)
          
 
(0.2
)
        
Common Stock—
                                
$.15 per share in 2002 and $.20 per share in 2001
  
 
(3.7
)
  
 
346.9
 
  
 
(5.0
)
  
 
441.4
 
   
         
       
Restricted stock awards
          
 
(0.2
)
          
 
(0.1
)
Treasury stock, at cost
                                
—25,742,450 as of September 30, 2002 and 25,767,918 as of December 31, 2001
          
 
(752.6
)
          
 
(753.6
)
Accumulated other comprehensive income (loss)
          
 
(48.8
)
          
 
(49.2
)
           
         
Total Stockholders’ Equity
          
$
457.7
 
          
$
551.7
 
           
         
 

23

 
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
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 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 (Filed as Exhibit 10.1 to the Company’s Annual Report on Form 10-K for the year ended December 31, 2001 (File No. 1-11767), and incorporated by reference herein.)
10.2
*
   
Ryerson Tull 2002 Incentive Stock Plan (Filed as Exhibit A to the Company’s definitive Proxy Statement on Schedule 14A (File No. 1-11767) dated March 22, 2002 that was furnished to stockholders in connection with the annual meeting held May 8, 2002, and incorporated by reference herein.)
10.3
*
   
Ryerson Tull 1999 Incentive Stock Plan, as amended (Filed as Exhibit 10.2 to the Company’s Annual Report on Form 10-K for the year ended December 31, 2001 (File No. 1-11767), and incorporated by reference herein.)
10.4
*
   
Ryerson Tull 1996 Incentive Stock Plan, as amended. (Filed as Exhibit 10.D to the Company’s Annual Report on Form 10-K for the year ended December 31, 1997 (File No. 1-11767), and incorporated by reference herein.)
10.5
*
   
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.)
10.6
*
   
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.)
10.7
*
   
Ryerson Tull Supplemental Retirement Plan for Covered Employees, as amended (Filed as Exhibit 10.6 to Company’s Annual Report on Form 10-K for the year ended December 31, 2001 (File No. 1-11767), and incorporated by reference herein.)
10.8
*
   
Ryerson Tull Nonqualified Savings Plan, as amended (Filed as Exhibit 10.7 to Company’s Annual Report on Form 10-K for the year ended December 31, 2001 (File No. 1-11767), and incorporated by reference herein.)
10.9
*
   
Outside Directors Accident Insurance Policy, with endorsement (Filed as Exhibit 10.8 to the Company’s Quarterly Report on Form 10-Q for the quarter ended September 30, 2001 (File No. 1-9117), and incorporated by reference herein.)
*
Management contract or compensatory plan or arrangement required to be filed as an exhibit to the Company’s Annual Report on Form 10-K.

 
Exhibit Number
     
Description
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 10.10 to the Company’s Annual Report on Form 10-K for the year ended December 31, 2000 (File No. 1-9117), and incorporated by reference herein.)
10.12
*
   
Severance Agreement, dated January 28, 1998, between the Company and Jay. M. Gratz. (Filed as Exhibit 10.11 to the Company’s Quarterly Report on Form 10-Q for the quarter ended March 30, 2002 (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 10.11 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 10.11 between the Company and Jay M. Gratz. (Filed as Exhibit 10.14 to the Company’s Quarterly Report on Form 10-Q for the quarter ended June 30, 2000 (File No. 1-9117), and incorporated by reference herein.)
10.15
*
   
Form of Change in Control Agreement dated March 11, 2001 between the Company and the parties listed on the schedule thereto. (Filed as Exhibit 10.14 to the Company’s Quarterly Report on Form 10-Q for the quarter ended March 30, 2002 (File No. 1-9117), and incorporated by reference herein.)
10.16
*
   
Schedule to Form of Change in Control Agreement dated March 11, 2001 as referred to in Exhibit 10.14. (Filed as Exhibit 10.15 to the Company’s Quarterly Report on Form 10-Q for the quarter ended March 30, 2002 (File No.
1-9117), and incorporated by reference herein.)
10.17
*
   
Form of Change in Control Agreement dated March 11, 2001 between the Company and the parties listed on the schedule thereto. (Filed as Exhibit 10.16 to the Company’s Quarterly Report on Form 10-Q for the quarter ended March 30, 2002 (File No. 1-9117), and incorporated by reference herein.)
10.18
*
   
Schedule to Form of Change in Control Agreement dated March 11, 2001 as referred to in Exhibit 10.16. (Filed as Exhibit 10.17 to the Company’s Quarterly Report on Form 10-Q for the quarter ended March 30, 2002 (File No.
1-9117), and incorporated by reference herein.)
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 June 1, 2000 between the Company and Stephen E. Makarewicz. (Filed as Exhibit 10.21 to the Company’s Quarterly Report on Form 10-Q for the quarter ended March 30, 2002 (File No. 1-9117), and incorporated by reference herein.)
10.23
*
   
Employment Agreement dated as of May 29, 2000 between the Company and Thomas S. Cygan. (Filed as Exhibit 10.25 to the Company’s Quarterly Report on Form 10-Q for the quarter ended June 30, 2000 (File No. 1-9117), and incorporated by reference herein.)
99.1
 
   
Certification of Neil S. Novich, Chairman, President and Chief Executive Officer of the Company pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.
99.2
 
   
Certification of Jay M. Gratz, Executive Vice President and Chief Financial Officer of the Company pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.
*
Management contract or compensatory plan or arrangement required to be filed as an exhibit to the Company’s Annual Report on Form 10-K.

 
Pursuant to the requirements of Regulation 14a-3(b)(10), the Company will furnish any exhibit listed above upon the payment of $10.00, upon written request, accompanied by such payment, to:
 
Corporate Secretary
Ryerson Tull, Inc.
2621 West 15th Place
Chicago, Illinois 60608
 
The Company makes its periodic and current reports available, free of charge, on its Web site as soon as reasonably practicable after such material is electronically filed with, or furnished to, the Securities and Exchange Commission. The Company’s Web site address is www.ryersontull.com

EX-3.2 3 dex32.htm COPY OF CERTIFICATE OF INCORPORATION Copy of Certificate of Incorporation
EXHIBIT 3.2
 
BY-LAWS
OF
RYERSON TULL, INC.
(as Amended to and Including September 25, 2002)
 
ARTICLE I
 
OFFICES
 
Section 1. The registered office of the Corporation shall be in the City of Wilmington, County of New Castle, State of Delaware. The Corporation may also have offices at such other places both within and without the State of Delaware as the Board of Directors may from time to time determine or the business of the Corporation may require.
 
ARTICLE II
 
STOCKHOLDERS
 
Section 1. Time and Place of Meetings. All meetings of the stockholders for the election of directors or for any other purpose shall be held at such time and place, within or without the State of Delaware, as shall be designated by the Board of Directors.
 
Section 2. Annual Meetings; Nomination of Directors. An annual meeting of stockholders shall be held for the purpose of electing Directors and for the transaction of only such other business as is properly brought before the meeting in accordance with these By-Laws. The date of the annual meeting shall be the third Wednesday of April each year or such other date as may be determined by the Board of Directors.
 
To be properly brought before the meeting, business must be either (a) specified in the notice of meeting (or any supplement thereto) given by or at the direction of the Board, (b) otherwise properly brought before the meeting by or at the direction of the Board or (c) otherwise properly brought before the meeting by a stockholder. In addition to any other applicable requirements, for business to be properly brought before an annual meeting by a stockholder, the stockholder must have given timely notice thereof in writing to the Secretary of the Corporation. To be timely, a stockholder’s notice must be delivered to or mailed and received at the principal executive offices of the Corporation, (a) not less than ninety days nor more than one hundred twenty days in advance of a day corresponding to the date of mailing the Corporation’s proxy statement in connection with the previous

1

year’s annual meeting, or (b) if no annual meeting was held in the previous year or the date of the applicable annual meeting has been changed by more than 30 days from the date contemplated at the time of the previous year’s proxy statement, not later than the close of business on the fifteenth day following the day on which notice of the date of the annual meeting was mailed or publicly disclosed, whichever occurs first. A stockholder’s notice to the Secretary shall set forth as to each matter the stockholder proposes to bring before the annual meeting (i) a brief description of the business desired to be brought before the annual meeting and the reasons for conducting such business at the annual meeting, (ii) the name and record address of the stockholder proposing such business, (iii) the class and number of shares of the Corporation which are beneficially owned by the stockholder and (iv) any material interest of the stockholder in such business.
 
Notwithstanding anything in the By-Laws to the contrary, no business shall be conducted at the annual meeting except in accordance with the procedures set forth in this Article II, Section 2, provided, however, that nothing in this Article II, Section 2 shall be deemed to preclude discussion by any stockholder of any business properly brought before the annual meeting.
 
The Chairman of an annual meeting shall, if the facts warrant, determine and declare to the meeting that business was not properly brought before the meeting in accordance with the provisions of this Article II, Section 2, and if he should so determine, he shall so declare to the meeting and any such business not properly brought before the meeting shall not be transacted.
 
Only persons who are nominated in accordance with the following procedures shall be eligible for election as Directors. Nominations of persons for election to the Board of the Corporation at the annual meeting may be made at a meeting of stockholders by or at the direction of the Board of Directors by any nominating committee or person appointed by the Board or by any stockholder of the Corporation entitled to vote for the election of Directors at the meeting who complies with the notice procedures set forth in this Article II, Section 2. Such nominations, other than those made by or at the direction of the Board, shall be made pursuant to timely notice in writing to the Secretary of the Corporation. To be timely, a stockholder’s notice shall be delivered to or mailed and received at the principal executive offices of the Corporation, (a) not less than ninety days nor more than one hundred twenty days in advance of a day corresponding to the date of mailing the Corporation’s proxy statement in connection with the previous year’s annual meeting, or (b) if no annual meeting was held in the previous year or the

2

date of the applicable annual meeting has been changed by more than 30 days from the date contemplated at the time of the previous year’s proxy statement, not later than the close of business on the fifteenth day following the day on which notice of the date of the annual meeting was mailed or publicly disclosed, whichever occurs first. Such stockholder’s notice to the Secretary shall set forth: (a) as to each person whom the stockholder proposes to nominate for election or re-election as a Director, (i) the name, age, business address and residence address of the person, (ii) the principal occupation or employment of the person, (iii) the class and number of shares of capital stock of the Corporation which are beneficially owned by the person and (iv) any other information relating to the person that is required to be disclosed in solicitations for proxies for election of Directors pursuant to Regulation 14A under the Securities Exchange Act of 1934, as amended; and (b) as to the stockholder giving the notice, (i) the name and record address of such stockholder and (ii) the class and number of shares of capital stock of the Corporation which are beneficially owned by such stockholder. The Corporation may require any proposed nominee to furnish such other information as may reasonably be required by the Corporation to determine the eligibility of such proposed nominee to serve as a Director of the Corporation. No person shall be eligible for election as a Director of the Corporation unless nominated in accordance with the procedures set forth herein.
 
The Chairman of the meeting shall, if the facts warrant, determine and declare to the meeting that a nomination was not made in accordance with the foregoing procedure, and if he should so determine, he shall so declare to the meeting and the defective nomination shall be disregarded.
 
Section 3. Special Meetings. Special meetings of the stockholders, for any purpose or purposes, unless otherwise prescribed by law, may be called by the Chairman of the Board, Vice Chairman of the Board, the President or the Board of Directors and shall be called by the Secretary at the direction of the Chairman of the Board, Vice Chairman of the Board, the President or the Board of Directors.
 
Section 4. Notice of Meetings. Written notice of each meeting of the stockholders stating the place, date and time of the meeting shall, unless otherwise required by law, be given not less than ten nor more than sixty days before the date of the meeting to each stockholder entitled to vote at such meeting. The notice of any special meeting of stockholders shall state the purpose or purposes for which the meeting is called. If mailed, such notice shall be deemed to be delivered to a stockholder when deposited in the United States mail in a sealed envelope

3

addressed to the stockholder at his or her address as it appears on the records of the Corporation with postage thereon paid.
 
Section 5. Quorum. A majority of the votes of the voting securities entitled to vote, present in person or represented by proxy, shall constitute a quorum at a meeting of stockholders. If a quorum is not present or represented, the holders of the voting securities present in person or represented by proxy at the meeting and entitled to vote thereat shall have power, by the affirmative vote of the holders of a majority of the votes of such voting securities, to adjourn the meeting to another time and/or place, without notice other than announcement at the meeting, until a quorum shall be present or represented. At such adjourned meeting, at which a quorum shall be present or represented, any business may be transacted which might have been transacted at the original meeting. If the adjournment is for more than thirty days, or if after the adjournment a new record date is fixed for the adjourned meeting, a notice of the adjourned meeting shall be given to each holder of record entitled to vote at the meeting.
 
Section 6. Voting. At all meetings of the stockholders, each holder of record on the record date for the meeting shall be entitled to vote as set forth in the Corporation’s Certificate of Incorporation (including any Certificates of Designations) or as otherwise required by law, in person or by proxy, the voting securities owned of record by such holder on the record date. In all matters other than the election of directors, the affirmative vote of a majority of the votes of the voting securities present in person or represented by proxy at the meeting and entitled to vote on the subject matter shall be the act of the holders, unless the question is one upon which, by express provision of law or of the Certificate of Incorporation, a different vote is required, in which case such express provision shall govern and control the decision of such question. Directors shall be elected by a plurality of the votes of the voting securities present in person or represented by proxy at the meeting and entitled to vote on the election of directors.
 
ARTICLE III
 
DIRECTORS
 
Section 1. General Powers. The business and affairs of the Corporation shall be managed and controlled by or under the direction of a Board of Directors, which may exercise all such powers of the Corporation and do all such lawful acts and things as are not by law or by the Certificate of Incorporation or by

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these By-Laws directed or required to be exercised or done by the stockholders.
 
Section 2. Number, Qualification and Tenure. Prior to the first annual meeting of stockholders, the Board of Directors shall consist of not fewer than three (3) Directors nor more than eighteen (18) Directors. Thereafter, the Board of Directors shall consist of not fewer than six (6) Directors nor more than twelve (12) Directors. Within the limits above specified, the number of Directors shall be determined from time to time by resolution of the Board of Directors. The Directors shall be elected at the annual meeting of the stockholders, except as provided in Section 3 of this Article, and each Director elected shall hold office until his or her successor is elected and qualified or until his or her earlier resignation or removal. Directors need not be stockholders. Except as provided in Article III, Section 3 of these By-Laws, the Directors shall designate from among their number a Chairman of the Board, who shall preside at all meetings of the stockholders and of the Board of Directors of the Corporation and who, if he or she is an employee of the Corporation, shall exercise all of the powers and duties conferred on the Chairman of the Board by the provisions of these By-Laws. If the person selected by the Directors as the Chairman of the Board is not, or ceases to be, an employee of the Corporation, then, notwithstanding any other provision of these By-Laws to the contrary, he or she shall exercise only such powers and duties conferred on the Chairman of the Board by these By-Laws as the Directors shall determine by resolution duly adopted and any other powers and duties, including those of chief executive officer of the Corporation, shall be exercised by the President of the Corporation.
 
Section 3. Vacancies. Vacancies and newly created directorships resulting from any increase in the number of directors may be filled by a majority of the Directors then in office (even if less than a quorum), and each Director so chosen shall hold office until his or her successor is elected and qualified or until his or her earlier resignation or removal. If there are no Directors in office, then an election of Directors may be held in the manner provided by law.
 
Immediately upon the Chairman of the Board’s death, physical or mental incapacity, or other inability to act (other than due to absence for a brief and identifiable period), the Chairman of the committee responsible for recommending candidates to fill vacancies on the Board of Directors of the Corporation (the “Nominating Committee Chairman”) shall assume the position of Chairman of the Board and responsibility for performing all functions, authorities and duties thereof, and shall serve in such capacity until his or her successor is duly elected and

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qualified pursuant to Article III, Section 2 and any other applicable provision of these By-Laws or until his or her earlier resignation or removal. The Nominating Committee Chairman shall have sole discretion to determine, at any time and from time to time, whether the Chairman of the Board is physically or mentally incapacitated, otherwise unable to act, or absent for other than a brief and identifiable period and shall, immediately upon making such a determination or learning of the death of the Chairman of the Board, notify each member of the Board of Directors and each officer of the Corporation of the relevant facts and circumstances.
 
Section 4. Place of Meetings. The Board of Directors may hold meetings, whether regular or special, within or without the State of Delaware.
 
Section 5. Regular Meetings. The Board of Directors shall hold a regular meeting, to be known as the annual meeting, immediately following each annual meeting of the stockholders. Other regular meetings of the Board of Directors shall be held at such time and place as shall from time to time be determined by the Board. No notice of regular meetings need be given.
 
Section 6. Special Meetings. Special meetings of the Board may be called by the Chairman of the Board, the Vice Chairman of the Board, any five Directors or the President. Special meetings shall be called by the Secretary on the written request of any Director. Notice of special meetings shall be given at least one day before any such meeting.
 
Section 7. Quorum. At all meetings of the Board of Directors a majority of the total number of Directors shall constitute a quorum for the transaction of business and the act of a majority of the Directors present at any meeting at which there is a quorum shall be the act of the Board of Directors, except as may be otherwise specifically provided by law. If a quorum shall not be present at any meeting of the Board of Directors, the Directors present thereat may adjourn the meeting from time to time, without notice other than announcement at the meeting, until a quorum shall be present.
 
Section 8. Organization. The Chairman of the Board, if elected, shall act as chairman at all meetings of the Board of Directors. If a Chairman of the Board is not elected or, if elected, is not present, the Vice Chairman of the Board, if any, or if the Vice Chairman of the Board is not present, the President or, in the absence of the President, a Director chosen by a majority of the Directors present, shall act as chairman at meetings of the Board of Directors.
 

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Section 9. Executive Committee. The Board of Directors, by resolution adopted by a majority of the whole Board, may designate not fewer than four (4) and not more than nine (9) Directors to constitute an Executive Committee, to serve as such, unless the resolution designating the Executive Committee is sooner amended or rescinded by the Board of Directors, until the next annual meeting of the Board or until their respective successors are designated. The Board of Directors, by resolution adopted by a majority of the whole Board, may also designate additional Directors as alternate members of the Executive Committee (so long as the aggregate number of members of the Executive Committee does not exceed nine (9)) to serve as members of the Executive Committee in the place and stead of any regular member or members thereof who may be unable to attend a meeting or otherwise unavailable to act as a member of the Executive Committee. In the absence or disqualification of a member and all alternate members who may serve in the place and stead of such member, the member or members thereof present at any meeting and not disqualified from voting, whether or not such member or members constitute a quorum, may unanimously appoint another Director to act at the meeting in the place of any such absent or disqualified member.
 
Except as expressly limited by the General Corporation Law of the State of Delaware or the Certificate of Incorporation, the Executive Committee shall have and may exercise all the powers and authority of the Board of Directors in the management of the business and affairs of the Corporation between the meetings of the Board of Directors, but subject always to the final control of the Board of Directors except where rights of third parties have intervened. The Executive Committee shall keep a record of its acts and proceedings, which shall form a part of the records of the Corporation in the custody of the Secretary, and all actions of the Executive Committee shall be reported to the Board of Directors at the next meeting of the Board.
 
Meetings of the Executive Committee may be called at any time by the Chairman of the Board, the Chairman of the Executive Committee or any two (2) members of the Executive Committee. A majority of the members of the Executive Committee shall constitute a quorum for the transaction of business and, except as expressly limited by this Section, the act of a majority of the members present at any meeting at which there is a quorum shall be the act of the Executive Committee. Except as expressly provided in this Section, the Executive Committee shall fix its own rules of procedure. Notice of Executive Committee meetings shall be given at least one day before such meetings.
 
Section 10. Finance and Retirement Committee. The Board of Directors may, annually, by resolution passed by a majority of

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the whole Board of Directors, designate not fewer than four (4) and not more than eleven (11) Directors to constitute a Finance and Retirement Committee. Such designation may be made either at the first meeting of the Board of Directors held after each annual meeting of the stockholders of the Corporation, or at any subsequent regular or special meeting of the Board of Directors. Vacancies in the Finance and Retirement Committee may be filled, or additional members of the Finance and Retirement Committee (so long as the aggregate number of the Finance and Retirement Committee does not exceed eleven (11)) may be designated, at any meeting of the Board of Directors. Each member of the Finance and Retirement Committee shall hold office until his or her successor shall have been duly elected, or until his or her death, or until he or she shall resign or shall have been removed. Any member of the Finance and Retirement Committee may be removed by the Board of Directors whenever in its judgment the best interests of the Corporation would be served thereby.
 
The Finance and Retirement Committee, from time to time, shall consider the fiscal affairs of the Corporation and make recommendations with respect thereto to the Board of Directors and the Executive Committee. The Finance and Retirement Committee shall also administer and act with respect to pension or retirement plans and trusts of the Corporation and such other matters as shall from time to time be specified in resolutions passed by a majority of the whole Board of Directors, subject, however, to any conditions and provisions set forth in such resolutions. The Pension and Retirement Committee is designated as the Pension Plan Retirement Committee.
 
The Finance and Retirement Committee shall meet at the call of the Chairman of the Board, the Vice Chairman of the Board, the Chairman of the Finance and Retirement Committee, or any two (2) members of the Finance and Retirement Committee. Three (3) members of the Finance Committee shall constitute a quorum. The Finance and Retirement Committee shall keep a record of its acts and proceedings and all actions of the Finance Committee shall be reported to the Board of Directors at its next regular meeting, and the minute books of the Finance and Retirement Committee shall be open to the inspection of any Directors.
 
Section 11. Other Committees. The Board of Directors, by resolution adopted by a majority of the whole Board, may designate one or more other committees, each such committee to consist of one or more Directors. Except as expressly limited by the General Corporation Law of the State of Delaware or the Certificate of Incorporation, any such committee shall have and may exercise such powers as the Board of Directors may determine and specify in the resolution designating such committee. The Board of Directors, by resolution adopted by a majority of the

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whole Board, also may designate one or more additional Directors as alternate members of any such committee to replace any absent or disqualified member at any meeting of the committee, and at any time may change the membership of any committee or amend or rescind the resolution designating the committee. In the absence or disqualification of a member or alternate member of a committee, the member or members thereof present at any meeting and not disqualified from voting, whether or not such member or members constitute a quorum, may unanimously appoint another Director to act at the meeting in the place of any such absent or disqualified member, provided that the Director so appointed meets any qualifications stated in the resolution designating the committee. Each committee shall keep a record of proceedings and report the same to the Board of Directors to such extent and in such form as the Board of Directors may require. Unless otherwise provided in the resolution designating a committee, a majority of all of the members of any such committee may select its Chairman, fix its rules or procedure, fix the time and place of its meetings and specify what notice of meetings, if any, shall be given.
 
Section 12. Action without Meeting. Unless otherwise restricted by the Certificate of Incorporation or these By-Laws, any action required or permitted to be taken at any meeting of the Board of Directors or of any committee thereof may be taken without a meeting, if all members of the Board or committee, as the case may be, consent thereto in writing, and the writing or writings are filed with the minutes of proceedings of the Board or committee.
 
Section 13. Attendance by Telephone. Members of the Board of Directors, or of any committee, may participate in a meeting of the Board of Directors, or of such committee, by means of conference telephone or similar communications equipment by means of which all persons participating in the meeting can hear each other, and such participation in a meeting shall constitute presence in person at the meeting.
 
Section 14. Compensation. The Board of Directors shall have the authority to fix the compensation of Directors, which may include reimbursement of their expenses, if any, of attendance of each meeting of the Board of Directors or of a committee.
 
Section 15. Honorary Directors. Any person who has at any time been chief executive officer of the Corporation (or of Inland Steel Company prior to May 1, 1986), may, after retirement or resignation from the Board of Directors (or having retired or resigned from the Board of Directors of Inland Steel Company), be appointed by the Board of Directors as an Honorary Director for

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one or more year terms. Honorary Directors shall serve in an advisory capacity to the Board of Directors, shall have no vote and shall not be considered as Directors for the purposes of determining a quorum. Honorary Directors shall be reimbursed for their expenses in attending meetings of the Board of Directors. Any Honorary Director who is not at the time otherwise regularly employed by the Corporation or any subsidiary shall receive such fees (which may include reimbursement of expenses, if any) for attendance at each meeting of the Board of Directors as may be fixed from time to time by the Board of Directors, but shall not receive any other director’s fees or any other compensation for his or her services.
 
ARTICLE IV
 
OFFICERS
 
Section 1. Enumeration. The officers of the Corporation shall be chosen by the Board of Directors and shall be a President, a Secretary, a Treasurer, a General Counsel and a Controller. The Board of Directors may also elect a Chairman of the Board, a Vice Chairman, one or more Assistants to the Chairman, one or more Vice Presidents, one or more Assistant Secretaries and Assistant Treasurers and such other officers and agents as it shall deem appropriate. Any number of offices may be held by the same person.
 
Section 2. Term of Office. The officers of the Corporation shall be elected at the annual meeting of the Board of Directors and shall hold office until their successors are elected and qualified. Any officer elected or appointed by the Board of Directors may be removed at any time by the Board of Directors. Any vacancy occurring in any office of the Corporation required by this Article shall be filled by the Board of Directors, and any vacancy in any other office may be filled by the Board of Directors.
 
Section 3. Chairman of the Board. Subject to the provisions of Article III, Section 2 of these By-Laws, the Chairman of the Board, when elected, shall be the Chief Executive Officer of the Corporation and, as such, shall have general supervision, direction and control of the business and affairs of the Corporation, subject to the control of the Board of Directors, shall preside at meetings of stockholders and shall have such other functions, authority and duties as customarily appertain to the office of the chief executive of a business corporation or as may be prescribed by the Board of Directors.

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Section 4. Vice Chairman of the Board. The Vice Chairman of the Board shall, in the case of absence of the Chairman of the Board for any brief and identifiable period, have and exercise the powers and duties of the Chairman of the Board. He or she shall have such other duties and powers as may be assigned to him by the Board of Directors, the Executive Committee or the Chairman of the Board.
 
Section 5. President. During any period when there shall be a Chairman of the Board, the President shall be the Chief Operating Officer of the Corporation and shall have such functions, authority and duties as may be prescribed by the Board of Directors or the Chairman of the Board. During any period when there shall not be a Chairman of the Board or Vice Chairman of the Board, the President shall be the Chief Executive Officer of the Corporation and, as such, shall have the functions, authority and duties provided for the office of Chairman of the Board.
 
Section 6. Executive and Senior Vice Presidents. Each Executive Vice President shall have such duties and powers as may be assigned to him or her by the Board of Directors, the Executive Committee, the Chairman of the Board, the Vice Chairman of the Board, or the President. An Executive Vice President, designated by the Board of Directors, shall (in the event of absence, death or other inability to act of the President) have and exercise the powers and duties of the President.
 
Each Senior Vice President shall have such duties and powers as may be assigned to him or her by the Board of Directors, the Executive Committee, the Chairman of the Board, the Vice Chairman of the Board or the President.
 
Section 7. Vice Presidents. Each Vice President shall perform such duties and have such other powers as may from time to time be prescribed by the Board of Directors, the Chairman of the Board or the President or the Executive Committee.
 
Section 8. Secretary. The Secretary shall keep a record of all proceedings of the stockholders of the Corporation and of the Board of Directors, Finance Committee and Executive Committee, and shall perform like duties for any other standing committees when required. The Secretary shall give, or cause to be given, notice, if any, of all meetings of the stockholders and shall perform such other duties as may be prescribed by the Board of Directors, the Chairman of the Board, the President, or the Executive Committee. The Secretary shall have custody of the corporate seal of the Corporation and the Secretary, or in the absence of the Secretary any Assistant Secretary, shall have authority to affix the same to any instrument requiring it, and

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when so affixed it may be attested by the signature of the Secretary or an Assistant Secretary. The Board of Directors may give general authority to any other officer to affix the seal of the corporation and to attest such affixing of the seal.
 
Section 9. Assistant Secretary. The Assistant Secretary, or if there be more than one, the Assistant Secretaries in the order determined by the Board of Directors (or if there be no such determination, then in the order of their election), shall, in the absence of the Secretary or in the event of the Secretary’s inability or failure to act, perform the duties and exercise the powers of the Secretary and shall perform such other duties as may from time to time be prescribed by the Board of Directors, the Chairman of the Board, the President or the Secretary.
 
Section 10. Treasurer. The Treasurer shall have the custody of the corporate funds and securities and shall keep full and accurate accounts of receipts and disbursements in books belonging to the Corporation and shall deposit all moneys and other valuable effects in the name and to the credit of the Corporation in such depositories as may be designated by the Board of Directors or the Executive Committee. The Treasurer shall disburse the funds of the Corporation as may be ordered by the Board of Directors, keeping proper records of such disbursements, and shall render to the Chairman of the Board, Vice Chairman of the Board, the Chairman of the Executive Committee, the Chairman of the Finance Committee, the President, the officer designated by the Board of Directors as Chief Financial Officer, if any, and the Board of Directors, the Executive Committee and the Finance Committee at their regular meetings or when the Board of Directors so requires, an account of all transactions as Treasurer and of the financial condition of the Corporation. The Treasurer shall perform such other duties as may from time to time be prescribed by the Board of Directors, the Chairman of the Board, the President or the Chief Financial Officer.
 
Section 11. Assistant Treasurer. The Assistant Treasurer, or if there shall be more than one, the Assistant Treasurers in the order determined by the Board of Directors (or if there be no such determination, then in the order of their election), shall, in the absence of the Treasurer or in the event of the Treasurer’s inability or refusal to act, perform the duties and exercise the powers of the Treasurer and shall perform such other duties and have such other powers as may from time to time be prescribed by the Board of Directors, the Chairman of the Board, the President or the Treasurer.

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Section 12. Assistant to the Chairman. The Assistant to the Chairman of the Board shall have and exercise such powers and duties as may be assigned to him or her by the Chairman of the Board.
 
Section 13. General Counsel. The General Counsel shall be responsible for the legal affairs of the Corporation and shall have such other duties as from time to time may be assigned to him or her by the Chairman of the Board, the Vice Chairman of the Board, the President, the Board of Directors or the Executive Committee.
 
Section 14. Controller. The Controller shall be the chief accounting officer of the Corporation. He or she shall, when proper, approve all bills for purchases, payrolls, and similar instruments providing for disbursement of money by the Corporation, for payment by the Treasurer. He or she shall be in charge of and maintain books of account and accounting records of the Corporation. He or she shall perform such other acts as are usually performed by a Controller of a corporation. He or she shall render to the Chairman of the Board, the Vice Chairman of the Board, the Chairman of the Executive Committee, the Chairman of the Finance Committee, the President, the Chief Financial Officer, the Board of Directors, the Executive Committee and the Finance Committee, such reports as any thereof may require.
 
Section 15. Other Officers. Any officer who is elected or appointed from time to time by the Board of Directors and whose duties are not specified in these By-Laws shall perform such duties and have such powers as may be prescribed from time to time by the Board of Directors, the Chairman of the Board, the Vice Chairman of the Board, the President or the Executive Committee.
 
Section 16. Surety Bonds. The Board of Directors or Executive Committee may by resolution, require any officers of the Corporation to give bonds for the faithful discharge of their duties in such sums and with such sureties as the Board of Directors or Executive Committee shall determine, the expense of which shall be paid by the Corporation.
 
ARTICLE V
 
CERTIFICATES OF STOCK
 
Section 1. Form. The shares of the Corporation shall be represented by certificates; provided, however, that the Board of Directors may provide by resolution or resolutions that some or all of any or all classes or series of the Corporation’s stock

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shall be uncertificated shares. Certificates of stock in the Corporation, if any, shall be signed by or in the name of the Corporation by the Chairman of the Board or the President or a Vice President and by the Treasurer or an Assistant Treasurer or the Secretary or an Assistant Secretary of the Corporation. The signatures of the Chairman of the Board, the President or a Vice President and the Treasurer or an Assistant Treasurer or the Secretary or an Assistant Secretary may be facsimiles. In case any officer, transfer agent or registrar who has signed or whose facsimile signature has been placed upon a certificate shall have ceased to be such officer, transfer agent or registrar before such certificate is issued, the certificate may be issued by the Corporation with the same effect as if such officer, transfer agent or registrar were such officer, transfer agent or registrar at the date of its issue.
 
Section 2. Transfer. Upon surrender to the Corporation or the transfer agent of the Corporation of a certificate for shares duly endorsed or accompanied by proper evidence of succession, assignment or authority to transfer, it shall be the duty of the Corporation to issue a new certificate to the person entitled thereto, cancel the old certificate and record the transaction on its books.
 
Section 3. Replacement. In case of the loss, destruction or theft of a certificate for any stock of the Corporation, a new certificate of stock or uncertificated shares in place of any certificate therefor issued by the Corporation may be issued upon satisfactory proof of such loss, destruction or theft and upon such terms as the Board of Directors may prescribe. The Board of Directors may in its discretion require the owner of the lost, destroyed or stolen certificate, or his or her legal representative, to give the Corporation a bond, in such sum and in such form and with such surety or sureties as it may direct, to indemnify the Corporation against any claim that may be made against it with respect to a certificate alleged to have been lost, destroyed or stolen.
 
ARTICLE VI
 
INDEMNIFICATION OF DIRECTORS AND OFFICERS
 
Section 1. Each person who was or is made a party or is threatened to be made a party to or is involved in or called as a witness in any action, suit or proceeding, whether civil, criminal, administrative or investigative, and any appeal therefrom (hereinafter, collectively a “proceeding”), by reason of the fact that he or she, or a person of whom he or she is the legal representative, is, was or had agreed to become a director

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of the Corporation or is, was or had agreed to become an officer of the Corporation or is or was serving at the request of the Corporation as a director, officer, employee or agent of another corporation or of a partnership, joint venture, trust or other enterprise, including service with respect to employee benefit plans, shall be indemnified and held harmless by the Corporation to the fullest extent permitted under the General Corporation Law of the State of Delaware (the “DGCL”), as the same now exists or may hereafter be amended (but, in the case of any such amendment, only to the extent that such amendment permits the Corporation to provide broader indemnification rights than the DGCL permitted the Corporation to provide prior to such amendment), against all expenses, liabilities and losses (including attorneys’ fees, judgments, fines, excise taxes or penalties pursuant to the Employee Retirement Income Security Act of 1974, as amended, and amounts paid or to be paid in settlement) reasonably incurred or suffered by such person in connection therewith; provided, that except as explicitly provided herein, prior to a Change in Control, as defined herein, a person seeking indemnity in connection with a proceeding (or part thereof) initiated by such person against the Corporation or any director, officer, employee or agent of the Corporation shall not be entitled thereto unless the Corporation has joined in or consented to such proceeding (or part thereof). For purposes of this Article, a “Change in Control of the Corporation” shall be deemed to have occurred if (i) any “Person” (as is used in Sections 13(d) and 14(d) of the Securities Exchange Act of 1934, as amended) is or becomes (except in a transaction approved in advance by the Board of Directors of the Corporation) the beneficial owner (as defined in Rule 13d-3 under such Act), directly or indirectly, of securities of the Corporation representing 20% or more of the combined voting power of the Corporation’s then outstanding securities or (ii) during any period of two consecutive years, individuals who at the beginning of such period constitute the Board of Directors of the Corporation cease for any reason to constitute at least a majority thereof unless the election of each director who was not a director at the beginning of the 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 the period.
 
Any indemnification under this Section 1 (unless ordered by a court) shall be paid by the Corporation unless within 60 days of such request for indemnification a determination is made (i) by a majority vote of the directors who are not parties to such action, suit or proceeding, even though less than a quorum, or (ii) by a committee of such directors designated by majority vote of such directors, even though less than a quorum, or (iii) if there are no such directors, or if such directors so direct, by independent legal counsel in a written opinion, or (iv) by the stockholders that indemnification is not proper under the circumstances because such person has not met the necessary

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standard of conduct under Delaware law; provided, however, that following a Change in Control of the Corporation, with respect to all matters thereafter arising out of acts, omissions or events prior to the Change in Control of the Corporation concerning the rights of any person seeking indemnification under this Section 1, such determination shall be made by special independent counsel selected by such person and approved by the Corporation (which approval shall not be unreasonably withheld), which counsel has not otherwise performed services (other than in connection with similar matters) within the five years preceding its engagement to render such opinion for such person or for the Corporation or any affiliates (as such term is defined in Rule 405 under the Securities Act of 1933, as amended) of the Corporation (whether or not they were affiliates when services were so performed) (“Independent Counsel”). Unless such person has theretofore selected Independent Counsel pursuant to this Section 1 and such Independent Counsel has been approved by the Corporation, legal counsel approved by a resolution or resolutions of the Board of Directors prior to a Change in Control of the Corporation shall be deemed to have been approved by the Corporation as required. Such Independent Counsel shall determine as promptly as practicable whether and to what extent such person would be permitted to be indemnified under applicable law and shall render its written opinion to the Corporation and such person to such effect. The Corporation agrees to pay the reasonable fees of the Independent Counsel referred to above and to fully indemnify such Independent Counsel against any and all expenses, claims, liabilities and damages arising out of or relating to this Article or its engagement pursuant hereto.
 
Section 2. Expenses. Expenses, including attorneys’ fees, incurred by a person referred to in Section 1 of this Article in defending or otherwise being involved in a proceeding shall be paid by the Corporation in advance of the final disposition of such proceeding, including any appeal therefrom, upon receipt of an undertaking (the “Undertaking”) by or on behalf of such person to repay such amount if it shall ultimately be determined that he or she is not entitled to be indemnified by the Corporation.
 
Section 3. Right of Claimant to Bring Suit. If a claim under Section 1 hereof is not paid in full by the Corporation within 60 days after a written claim has been received by the Corporation or if expenses pursuant to Section 2 hereof have not been advanced within 10 days after a written request for such advancement accompanied by the Undertaking has been received by the Corporation, the claimant may at any time thereafter bring suit against the Corporation to recover the unpaid amount of the claim or the advancement of expenses. (If the claimant is successful, in whole or in part, in such suit or any other suit to enforce a right for expenses or indemnification against the

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Corporation or any other party under any other agreement, such claimant shall also be entitled to be paid the reasonable expense of prosecuting such claim.) It shall be a defense to any such action (other than an action brought to enforce a claim for expenses incurred in defending any proceeding in advance of its final disposition where the required Undertaking has been tendered to the Corporation) that the claimant has not met the standards of conduct which make it permissible under the DGCL for the Corporation to indemnify the claimant for the amount claimed. After a Change in Control, the burden of proving such defense shall be on the Corporation, and any determination by the Corporation (including its Board of Directors, independent legal counsel or its stockholders) that the claimant had not met the applicable standard of conduct required under the DGCL shall not be a defense to the action nor create a presumption that claimant had not met such applicable standard of conduct.
 
Section 4. Non-Exclusivity of Rights. The rights conferred on any person by this Article shall not be exclusive of any other right which such person may have or hereafter acquire under any statute, provision of the Certificate of Incorporation, By-Law, agreement, vote of stockholders or disinterested directors or otherwise. The Board of Directors shall have the authority, by resolution, to provide for such other indemnification of directors, officers, employees or agents as it shall deem appropriate.
 
Section 5. Insurance. The Corporation may purchase and maintain insurance to protect itself and any director, officer, employee or agent of the Corporation or another corporation, partnership, joint venture, trust or other enterprise against any expenses, liabilities or losses, whether or not the Corporation would have the power to indemnify such person against such expenses, liabilities or losses under the DGCL.
 
Section 6. Enforceability. The provisions of this Article shall be applicable to all proceedings commenced after its adoption, whether such arise out of events, acts, omissions or circumstances which occurred or existed prior or subsequent to such adoption, and shall continue as to a person who has ceased to be a director or officer and shall inure to the benefit of the heirs, executors and administrators of such person. This Article shall be deemed to grant each person who, at any time that this Article is in effect, serves or agrees to serve in any capacity which entitles him to indemnification hereunder rights against the Corporation to enforce the provisions of this Article, and any repeal or other modification of this Article or any repeal or modification of the DGCL or any other applicable law shall not limit any rights of indemnification then existing or arising out of events, acts, omissions, circumstances occurring or existing

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prior to such repeal or modification, including, without limitation, the right to indemnification for proceedings commenced after such repeal or modification to enforce this Article with regard to acts, omissions, events or circumstances occurring or existing prior to such repeal or modification.
 
Section 7. Severability. If this Article or any portion hereof shall be invalidated on any ground by any court of competent jurisdiction, then the Corporation shall nevertheless indemnify each director and officer of the Corporation as to costs, charges and expenses (including attorneys’ fees), judgments, fines and amounts paid in settlement with respect to any proceeding, whether civil, criminal, administrative or investigative, including an action by or in the right of the Corporation, to the full extent permitted by any applicable portion of this Article that shall not have been invalidated and to the full extent permitted by applicable law.
 
ARTICLE VII
 
GENERAL PROVISIONS
 
Section 1. Fiscal Year. The fiscal year of the Corporation shall be the calendar year.
 
Section 2. Corporate Seal. The corporate seal shall be in such form as may be approved from time to time by the Board of Directors. The seal may be used by causing it or a facsimile thereof to be impressed or affixed or in any other manner reproduced.
 
Section 3. Waiver of Notice. Whenever any notice is required to be given under law or the provisions of the Certificate of Incorporation or these By-Laws, a waiver thereof in writing, signed by the person or persons entitled to said notice, whether before or after the time stated therein, shall be deemed equivalent to notice.
 
ARTICLE VIII
 
AMENDMENTS
 
These By-Laws may be altered, amended or repealed or new By-Laws may be adopted by the Board of Directors. The fact that the power to amend, alter, repeal or adopt the By-Laws has been conferred upon the Board of Directors shall not divest the stockholders of the same powers.

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EX-99.1 4 dex991.htm CERTIFICATION OF NEIL S. NOVICH Certification of Neil S. Novich
EXHIBIT 99.1
 
[LETTERHEAD]
 
Written Statement of the Chief Executive Officer
 
I, Neil S. Novich, as Chairman, President and Chief Executive Officer of Ryerson Tull, Inc. (the “Company”), state and certify that this Form 10-Q Quarterly Report for the period ended September 30, 2002, fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934 and that the information contained in this Form 10-Q Quarterly Report for the period ended September 30, 2002, fairly presents, in all material respects, the financial condition and results of operations of the Company.
 
/S/    NEIL S. NOVICH
Neil S. Novich
Chairman, President & Chief Executive Officer
(Principal Executive Officer)
November 13, 2002

EX-99.2 5 dex992.htm CERTIFICATION OF JAY M. GRATZ Certification of Jay M. Gratz
EXHIBIT 99.2
 
[LETTERHEAD]
 
Written Statement of the Chief Financial Officer
 
I, Jay M. Gratz, as Executive Vice President and Chief Financial Officer of Ryerson Tull, Inc. (the “Company”), state and certify that this Form 10-Q Quarterly Report for the period ended September 30, 2002, fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934 and that the information contained in this Form 10-Q Quarterly Report for the period ended September 30, 2002, fairly presents, in all material respects, the financial condition and results of operations of the Company.
 
/S/    JAY M. GRATZ
Jay M. Gratz
Executive Vice President & Chief Financial Officer
(Principal Financial Officer)
November 13, 2002

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