-----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, RnQf5O007vjc6DxFwXz2/cR8XjlPCCnvNiy4vxXh94Dmj+NAMaK3+C+gHWxhw0+U 1rALWJT6Ytwn2/Dmvonk0g== 0000950131-97-006766.txt : 19971113 0000950131-97-006766.hdr.sgml : 19971113 ACCESSION NUMBER: 0000950131-97-006766 CONFORMED SUBMISSION TYPE: 10-Q PUBLIC DOCUMENT COUNT: 6 CONFORMED PERIOD OF REPORT: 19970930 FILED AS OF DATE: 19971113 SROS: NYSE FILER: COMPANY DATA: COMPANY CONFORMED NAME: INLAND STEEL INDUSTRIES 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: SEC FILE NUMBER: 001-09117 FILM NUMBER: 97716129 BUSINESS ADDRESS: STREET 1: 30 W MONROE ST CITY: CHICAGO STATE: IL ZIP: 60603 BUSINESS PHONE: 3123460300 MAIL ADDRESS: STREET 1: 30 WEST MONROE STREET STREET 2: 16TH FLOOR CITY: CHICAGO STATE: IL ZIP: 60603 10-Q 1 FORM 10-Q THIRD QUARTER - 1997 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, 1997 or [ ] Transition Report Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934 For the transition period from __________ to __________ ------------------------- Commission file number 1-9117 I.R.S. Employer Identification Number 36-3425828 INLAND STEEL INDUSTRIES, INC. (a Delaware Corporation) 30 West Monroe Street Chicago, Illinois 60603 Telephone: (312) 346-0300 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: 48,959,768 shares of the Company's Common Stock ($1.00 par value per share) were outstanding as of November 6, 1997. PART I. FINANCIAL INFORMATION ------------------------------ ITEM 1. FINANCIAL STATEMENTS INLAND STEEL INDUSTRIES, 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 ----------------------- ---------------------- 1997 1996 1997 1996 ----------- ---------- ---------- ---------- NET SALES $1,285.1 $1,118.0 $3,813.6 $3,461.9 -------- -------- -------- -------- OPERATING COSTS AND EXPENSES Cost of goods sold 1,118.3 976.9 3,308.1 3,049.1 Selling, general and administrative expenses 57.3 53.1 171.1 159.1 Depreciation 40.1 37.2 119.4 110.5 Gain from sale of assets (Note 3) - - (17.9) - -------- -------- -------- -------- Total 1,215.7 1,067.2 3,580.7 3,318.7 -------- -------- -------- -------- OPERATING PROFIT 69.4 50.8 232.9 143.2 General corporate income (expense), net (3.8) (.8) (9.8) (2.6) Interest and other expense on debt (15.4) (19.3) (47.3) (59.3) Gain from issuance of subsidiary stock - - - 31.4 -------- -------- -------- -------- INCOME BEFORE INCOME TAXES 50.2 30.7 175.8 112.7 PROVISION FOR INCOME TAXES 18.4 11.9 67.9 42.9 -------- -------- -------- -------- INCOME BEFORE MINORITY INTEREST 31.8 18.8 107.9 69.8 MINORITY INTEREST IN RYERSON TULL, INC. 1.5 1.5 6.3 1.6 -------- -------- -------- -------- INCOME BEFORE EXTRAORDINARY LOSS 30.3 17.3 101.6 68.2 EXTRAORDINARY LOSS ON EARLY RETIREMENT OF DEBT - 8.8 - 23.3 -------- -------- -------- -------- NET INCOME $ 30.3 $ 8.5 $ 101.6 $ 44.9 ======== ======== ======== ======== EARNINGS PER SHARE OF COMMON STOCK: Primary: Before extraordinary loss $ .57 $ .31 $ 1.94 $ 1.26 Extraordinary loss on early retirement of debt - (.18) - (.48) -------- -------- -------- -------- Net income $ .57 $ .13 $ 1.94 $ .78 ======== ======== ======== ======== Fully Diluted: Before extraordinary loss $ .54 $ .29 $ 1.83 $ 1.20 Extraordinary loss on early retirement of debt - (.17) - (.45) -------- -------- -------- -------- Net income $ .54 $ .12 $ 1.83 $ .75 ======== ======== ======== ========
See notes to consolidated financial statements -1- INLAND STEEL INDUSTRIES, INC. AND SUBSIDIARY COMPANIES CONSOLIDATED STATEMENT OF CASH FLOWS (UNAUDITED) ================================================================================
Dollars in Millions ---------------------- Nine Months Ended September 30 ---------------------- 1997 1996 ------------ -------- OPERATING ACTIVITIES Net income $ 101.6 $ 44.9 ------- ------- Adjustments to reconcile net income to net cash provided from operating activities: Depreciation 119.8 110.9 Deferred employee benefit cost (23.8) 11.7 Deferred income taxes 40.0 21.3 Gain from sale of assets (17.9) - Gain from issuance of subsidiary stock - (31.4) Change in: Receivables (64.6) (4.6) Inventories (31.0) (18.5) Accounts payable .1 (37.1) Accrued salaries and wages 12.1 (12.1) Other accrued liabilities 2.5 14.3 Other deferred items (3.2) (9.1) ------- ------- Net adjustments 34.0 45.4 ------- ------- Net cash provided from operating activities 135.6 90.3 ------- ------- INVESTING ACTIVITIES Acquisitions (Note 2) (139.5) - Capital expenditures (82.6) (124.5) Investments in and advances to joint ventures, net 12.9 13.3 Proceeds from sales of assets 32.2 6.3 ------- ------- Net cash used for investing activities (177.0) (104.9) ------- ------- FINANCING ACTIVITIES Issuance of subsidiary stock - 77.1 Long-term debt issued - 280.0 Reduction of debt assumed in acquisitions (25.3) - Long-term debt retired (19.5) (305.5) Dividends paid (12.9) (13.0) Acquisition of treasury stock (6.1) (2.5) ------- ------- Net cash provided by (used for) financing activities (63.8) 36.1 ------- ------- Net increase (decrease) in cash and cash equivalents (105.2) 21.5 Cash and cash equivalents - beginning of year 238.0 267.4 ------- ------- Cash and cash equivalents - end of period $ 132.8 $ 288.9 ======= ======= SUPPLEMENTAL DISCLOSURES Cash paid during the period for: Interest (net of amount capitalized) $ 49.8 $ 48.1 Income taxes, net 24.5 7.9
See notes to consolidated financial statements -2- INLAND STEEL INDUSTRIES, INC. AND SUBSIDIARY COMPANIES Consolidated Balance Sheet ================================================================================
Dollars in Millions --------------------------------------------- September 30, 1997 December 31, 1996 -------------------- --------------------- ASSETS (unaudited) - ------ CURRENT ASSETS Cash and cash equivalents $ 132.8 $ 238.0 Receivables 576.2 464.7 Inventories - principally at LIFO In process and finished products $ 535.1 $ 418.4 Raw materials and supplies 68.3 603.4 76.2 494.6 -------- -------- Deferred income taxes 33.1 30.5 -------- -------- Total current assets 1,345.5 1,227.8 INVESTMENTS AND ADVANCES 255.1 252.1 PROPERTY, PLANT AND EQUIPMENT Valued on basis of cost 4,632.6 4,536.1 Less: Reserve for depreciation, amortization and depletion 2,912.1 2,798.4 Allowance for terminated facilities 100.7 1,619.8 100.7 1,637.0 -------- -------- DEFERRED INCOME TAXES 245.6 287.5 INTANGIBLE PENSION ASSET 76.3 76.3 OTHER ASSETS 103.8 60.9 -------- -------- Total Assets $3,646.1 $3,541.6 ======== ======== LIABILITIES AND STOCKHOLDERS' EQUITY - ------------------------------------ CURRENT LIABILITIES Accounts payable $ 353.2 $ 321.4 Accrued liabilities 218.3 195.8 Long-term debt due within one year 31.2 19.6 -------- -------- Total current liabilities 602.7 536.8 LONG-TERM DEBT 742.1 773.2 DEFERRED EMPLOYEE BENEFITS 1,277.8 1,301.6 OTHER CREDITS 57.6 59.9 -------- -------- Total liabilities 2,680.2 2,671.5 MINORITY INTEREST IN RYERSON TULL, INC. 55.3 49.0 COMMON STOCK REPURCHASE COMMITMENT 28.1 32.1 STOCKHOLDERS' EQUITY (Schedule A) 882.5 789.0 -------- -------- Total Liabilities, Minority Interest, Temporary Equity, and Stockholders' Equity $3,646.1 $3,541.6 ======== ========
See notes to consolidated financial statements -3- INLAND STEEL INDUSTRIES, 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, 1997 and for the three-month and nine-month periods ended September 30, 1997 and 1996 are unaudited, but in the opinion of management include all 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 to Stockholders for the year ended December 31, 1996. NOTE 2/ACQUISITIONS During the first nine months of 1997, the Company, through its majority-owned subsidiary Ryerson Tull, Inc., acquired Thypin Steel Co., Inc., Omni Metals, Inc. and the assets of Cardinal Metals, Inc. for an aggregate of $139.5 million in cash plus assumption of debt. The acquisitions have been accounted for by the purchase method of accounting and the purchase price has been allocated to assets acquired and liabilities assumed. Results of operations since acquisition for each company are included in the consolidated results. The pro forma effect for 1997 and 1996 had these acquisitions occurred at the beginning of each such year is not material. NOTE 3/SALE OF ASSETS During the second quarter of 1997, the Company realized a pretax gain of $15.9 million associated with the sale of Inland Steel Company's interest in the Wabush iron ore mine ($9.0 million) and Ryerson Tull's sale of its closed Boston plant ($6.9 million). An additional pretax gain of $2.0 million was realized in the first quarter of 1997 due to the sale of Ryerson Tull's Jersey City plant. NOTE 4/EARNINGS PER SHARE The Company is required to adopt Financial Accounting Standards Board Statement No. 128, "Earnings per Share," at year-end 1997. Basic and diluted earning per share as defined in that Statement are not materially different from the primary and fully diluted earning per share amounts presented. NOTE 5/COMMITMENTS The total amount of firm commitments of the Company and its subsidiaries to contractors and suppliers, primarily in connection with additions to property, plant and equipment, decreased to $43 million on September 30, 1997 from $53 million on December 31, 1996. -4- ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS RESULTS OF OPERATIONS - Comparison of Third Quarter 1997 to Third Quarter 1996 - ------------------------------------------------------------------------------ The Company reported consolidated net income of $30.3 million, $.57 per share, in the 1997 third quarter as compared with $8.5 million, $.13 per share, in the year-earlier period. Included in the 1996 third quarter's net income was an extraordinary after-tax loss of $8.8 million, $.18 per share, on the early redemption of debt. Consolidated net sales increased 15 percent to $1.29 billion in the 1997 third quarter from $1.12 billion in the comparable 1996 quarter. The Steel Manufacturing segment's net sales of $615.7 million for the quarter represented a 7 percent increase from a year ago. The volume of steel mill products sold increased 10 percent to 1,324,000 tons, while average selling prices were down 3 percent. As a result of the higher shipping levels and favorable cost performance, operating profit increased to $40.0 million from $24.9 million a year earlier. The favorable cost performance reflected higher yields and increased productivity at key facilities. The Materials Distribution segment's net sales of $715.8 million increased 21 percent from the same period a year ago. Volume increased 25 percent from the year-ago quarter due to shipments from Thypin Steel, Cardinal Metals and Omni Metals, which were acquired during 1997, and higher volume from existing facilities. Lower average selling price, however, continued to put increased pressure on gross margins, partially offsetting the effects of the increase in volume. Operating profit increased by $3.7 million to $30.0 million due to increased volume and a reduction in operating cost per ton from $173 in the year-earlier quarter to $158 in the 1997 third quarter. Comparison of First Nine Months of 1997 to First Nine Months of 1996 - -------------------------------------------------------------------- The Company reported net income of $101.6 million, $1.94 per share, for the first nine months of 1997 compared with net income of $44.9 million, $.78 per share, in the comparable 1996 period. The first nine months of 1997 benefited from an after-tax gain of $10.0 million, $.20 per share, from the sale of assets while the 1996 comparable period included a $3.8 million, $.08 per share, adverse impact associated with the Company's recapitalization. Consolidated net sales of $3.81 billion for the first nine months of 1997 were 10 percent higher than the $3.46 billion realized in the comparable 1996 period. -5- The Steel Manufacturing segment's net sales improved 4 percent from the year- earlier period to $1.87 billion due largely to a 3 percent increase in steel mill shipments. The increase in shipments combined with improved operating cost performance were the primary factors contributing to the $78.5 million year-to- year increase in operating profit. The 1997 nine month period included a $9.0 million gain from the sale of Inland Steel Company's interest in the Wabush iron ore property. Net sales for the Materials Distribution segment of $2.11 billion for the first nine months of 1997 were 15 percent higher than the comparable 1996 period as a 19 percent increase in shipping levels was partially offset by lower average selling prices. Operating profit for the first nine months of 1997 of $107.2 million was up $11.6 million from the comparable period in 1996. Included in the 1997 operating profit is an $8.9 million gain from property sales. Liquidity and Financing - ----------------------- The Company's cash and cash equivalents were $132.8 million at September 30, 1997 compared with $238.0 million at year-end 1996. The decrease was primarily due to the acquisitions at the Materials Distribution segment and the repayment of debt assumed in the acquisitions. There was no short-term borrowing at either date. In September, the Company elected to fund its pension plans with $36.9 million in cash, its first funding since the second quarter of 1995. During the quarter, Ryerson Tull, Inc. extended its $250 million credit facility to September 2002 while reducing both the commitment fee and interest rate related to the facility. -6- PART II. OTHER INFORMATION --------------------------- Item 6. Exhibits and Reports on Form 8-K (a) Exhibits. 3.(i) Copy of Certificate of Incorporation, as amended, of the Company. (Filed as Exhibit 3.(i) to the Company's Annual Report on Form 10-K for the year ended December 31, 1995, and incorporated by reference herein.) 3.(ii) Copy of By-laws, as amended, of the Company. (Filed as Exhibit 3.(ii) to the Company's Quarterly Report on Form 10-Q for the quarter ended September 30, 1995, and incorporated by reference herein.) 4.A Copy of Certificate of Designations, Preferences and Rights of Series A $2.40 Cumulative Convertible Preferred Stock of the Company. (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, and incorporated by reference herein.) 4.B Copy of Certificate of Designation, Preferences and Rights of Series D Junior Participating Preferred Stock of the Company. (Filed as Exhibit 4-D to the Company's Annual Report on Form 10-K for the fiscal year ended December 31, 1987, and incorporated by reference herein.) 4.C Copy of Rights Agreement, dated as of November 25, 1987, as amended and restated as of May 24, 1989, between the Company and The First National Bank of Chicago, as Rights Agent (Harris Trust and Savings Bank, as successor Rights Agent). (Filed as Exhibit 1 to the Company's Current Report on Form 8-K filed on May 24, 1989, and incorporated by reference herein.) 4.D Copy of Certificate of Designations, Preferences and Rights of Series E ESOP Convertible Preferred Stock of the Company. (Filed as Exhibit 4-F to the Company's Quarterly Report on Form 10-Q for the quarter ended June 30, 1989, and incorporated by reference herein.) 4.E Copy of Subordinated Voting Note Due 1999 in the amount of $100,000,000 from the Company to NS Finance III, Inc. (Filed as Exhibit 4.8 to Form S-3 Registration Statement No. 33-62897 and incorporated by reference herein.) 4.F Copy of Indenture dated as of December 15, 1992, between the Company and Harris Trust and Savings Bank, as Trustee, respecting the Company's $150,000,000 12-3/4% Notes due December 15, 2002. (Filed as Exhibit 4-G to the Company's Annual Report on Form 10-K for the fiscal year ended December 31, 1992, and incorporated by reference herein.) 4.G Copy of Supplemental Indenture dated as of June 19, 1996 between the Company and Harris Trust & Savings Bank, as Trustee, respecting the Company's $150,000,000 12-3/4% Notes. (Filed as Exhibit 4.G to the Company's Quarterly Report on Form 10-Q for the quarter ended June 30, 1996 and incorporated by reference herein.) 4.H Copy of First Mortgage Indenture, dated April 1, 1928, between Inland Steel Company (the "Steel Company") and First Trust and Savings Bank and Melvin A. Traylor, as Trustees, and of supplemental indentures thereto, to and including the Thirty-Fifth Supplemental Indenture, incorporated by reference from the following Exhibits: (i) Exhibits B-1(a), B-1(b), B-1(c), B-1(d) and B-1(e), filed with Steel Company's Registration Statement on Form A-2 (No. 2-1855); (ii) Exhibits D-1(f) and D-1(g), filed with -7- Steel Company's Registration Statement on Form E-1 (No. 2-2182); (iii) Exhibit B-1(h), filed with Steel Company's Current Report on Form 8-K dated January 18, 1937; (iv) Exhibit B-1(i), filed with Steel Company's Current Report on Form 8-K, dated February 8, 1937; (v) Exhibits B-1(j) and B-1(k), filed with Steel Company's Current Report on Form 8-K for the month of April, 1940; (vi) Exhibit B-2, filed with Steel Company's Registration Statement on Form A-2 (No. 2-4357); (vii) Exhibit B-1(l), filed with Steel Company's Current Report on Form 8-K for the month of January, 1945; (viii) Exhibit 1, filed with Steel Company's Current Report on Form 8-K for the month of November, 1946; (ix) Exhibit 1, filed with Steel Company's Current Report on Form 8-K for the months of July and August, 1948; (x) Exhibits B and C, filed with Steel Company's Current Report on Form 8-K for the month of March, 1952; (xi) Exhibit A, filed with Steel Company's Current Report on Form 8-K for the month of July, 1956; (xii) Exhibit A, filed with Steel Company's Current Report on Form 8-K for the month of July, 1957; (xiii) Exhibit B, filed with Steel Company's Current Report on Form 8-K for the month of January, 1959; (xiv) the Exhibit filed with Steel Company's Current Report on Form 8-K for the month of December, 1967; (xv) the Exhibit filed with Steel Company's Current Report on Form 8-K for the month of April, 1969; (xvi) the Exhibit filed with Steel Company's Current Report on Form 8-K for the month of July, 1970; (xvii) the Exhibit filed with the amendment on Form 8 to Steel Company's Current Report on Form 8-K for the month of April, 1974; (xviii) Exhibit B, filed with Steel Company's Current Report on Form 8-K for the month of September, 1975; (xix) Exhibit B, filed with Steel Company's Current Report on Form 8-K for the month of January, 1977; (xx) Exhibit C, filed with Steel Company's Current Report on Form 8-K for the month of February, 1977; (xxi) Exhibit B, filed with Steel Company's Quarterly Report on Form 10-Q for the quarter ended June 30, 1978; (xxii) Exhibit B, filed with Steel Company's Quarterly Report on Form 10-Q for the quarter ended June 30, 1980; (xxiii) Exhibit 4-D, filed with Steel Company's Annual Report on Form 10-K for the fiscal year ended December 31, 1980; (xxiv) Exhibit 4-D, filed with Steel Company's Annual Report on Form 10-K for the fiscal year ended December 31, 1982; (xxv) Exhibit 4-E, filed with Steel Company's Annual Report on Form 10-K for the fiscal year ended December 31, 1983; (xxvi) Exhibit 4(i) filed with the Steel Company's Registration Statement on Form S-2 (No. 33-43393); (xxvii) Exhibit 4 filed with Steel Company's Current Report on Form 8-K dated June 23, 1993; and (xxviii) Exhibit 4.C filed with the Steel Company's Quarterly Report on Form 10-Q for the quarter ended June 30, 1995; (xxix) Exhibit 4.C filed with the Steel Company's Quarterly Report on Form 10-Q for the quarter ended September 30, 1995, and (xxx) Exhibit 4.C filed with Steel Company's Quarterly Report on Form 10-Q for the quarter ended June 30, 1996. 4.I Copy of consolidated reprint of First Mortgage Indenture, dated April 1, 1928, between Inland Steel Company and First Trust and Savings Bank and Melvin A. Traylor, as Trustees, as amended and supplemented by all supplemental indentures thereto, to and including the Thirteenth Supplemental Indenture. (Filed as Exhibit 4-E to Form S-1 Registration Statement No. 2-9443, and incorporated by reference herein.) 10.A* Copy of Inland Steel Industries Non-Qualified Thrift Plan, as amended. 10.B* Copy of Inland Steel Industries Supplemental Retirement Benefit Plan for Covered Employees, as amended. 10.C* Copy of Inland Steel Industries Special Retirement Benefit Plan for Covered Employees, as amended. 11 Statement of Earnings per Share of Common Stock. 27 Financial Data Schedule. (b) Reports on Form 8-K. The Company did not file any Current Reports on Form 8-K during the quarter ended September 30, 1997. - ---------------- * Management contract or compensatory plan or arrangement required to be filed as an exhibit to the Company's Quarterly Report on Form 10-Q. -8- 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. INLAND STEEL INDUSTRIES, INC. By James M. Hemphill ------------------------------------- James M. Hemphill Controller and Principal Accounting Officer Date: November 11, 1997 -9- Part I -- Schedule A -------------------- INLAND STEEL INDUSTRIES, INC. AND SUBSIDIARY COMPANIES SUMMARY OF STOCKHOLDERS' EQUITY - -------------------------------------------------------------------------------- - --------------------------------------------------------------------------------
Dollars in Millions --------------------------------------------- September 30, 1997 December 31, 1996 -------------------- --------------------- (unaudited) STOCKHOLDERS' EQUITY - -------------------- Series A preferred stock ($1 par value) - 94,101 shares and 94,201 shares issued and outstanding as of September 30, 1997 and December 31, 1996, respectively $ .1 $ .1 Series E preferred stock ($1 par value) - 3,021,405 shares and 3,080,790 shares issued and outstanding as of September 30, 1997 and December 31, 1996, respectively 3.0 3.1 Common stock ($1 par value) - 50,556,350 shares issued as of September 30, 1997 and December 31, 1996 50.6 50.6 Capital in excess of par value 1,039.0 1,045.8 Accumulated deficit Balance beginning of year $(146.0) $(172.8) Net income 101.6 45.7 Dividends Series A preferred stock - $1.80 per share in 1997 and $2.40 per share in 1996 (.1) (.2) Series E preferred stock - $1.7615 per share in 1997 and $3.523 per share in 1996 (5.5) (11.0) Income tax benefit - Series E dividend 1.0 2.1 Common stock - $.15 per share in 1997 and $.20 per share in 1996 (7.3) (56.3) (9.8) (146.0) ------- ------- Unearned compensation related to ESOP (72.6) (79.4) Common stock repurchase commitment (28.1) (32.1) Investment valuation allowance (6.0) (4.8) Unearned restricted stock award compensation (.2) (.8) Treasury stock, at cost - 1,689,852 shares and 1,647,954 shares as of September 30, 1997 and December 31, 1996, respectively (43.7) (44.2) Cumulative translation adjustment (3.3) (3.3) -------- -------- Total Stockholders' Equity $ 882.5 $ 789.0 ======== ========
-10- Part I -- Schedule B -------------------- INLAND STEEL INDUSTRIES, INC. AND SUBSIDIARY COMPANIES SUMMARY FINANCIAL INFORMATION FOR BUSINESS SEGMENTS (UNAUDITED) - -------------------------------------------------------------------------------- - --------------------------------------------------------------------------------
Dollars in Millions --------------------------------------- Three Months Ended Nine Months Ended September 30 September 30 ------------------- ------------------ 1997 1996 1997 1996 -------- -------- -------- -------- NET SALES - --------- Steel Manufacturing Operations $ 615.7 $ 574.9 $1,866.1 $1,795.5 Materials Distribution Operations 715.8 592.3 2,106.4 1,825.1 Eliminations and adjustments (46.4) (49.2) (158.9) (158.7) --------- -------- -------- -------- Total Net Sales $1,285.1 $1,118.0 $3,813.6 $3,461.9 ======== ======== ======== ======== OPERATING PROFIT - ---------------- Steel Manufacturing Operations $ 40.0 $ 24.9 $ 127.3 $ 48.8 Materials Distribution Operations 30.0 26.3 107.2 95.6 Eliminations and adjustments (.6) (.4) (1.6) (1.2) --------- -------- -------- -------- Total Operating Profit $ 69.4 $ 50.8 $ 232.9 $ 143.2 ======== ======== ======== ========
11 INDEX TO EXHIBITS
Exhibit Sequential Number Description Page No. - ------- ----------- ---------- 3.(i) Copy of Certificate of Incorporation, as amended, of the Company. (Filed as Exhibit 3.(i) to the Company's Annual Report on Form 10-K for the year ended December 31, 1995, and incorporated by reference herein.) -- 3.(ii) Copy of By-laws, as amended, of the Company. (Filed as Exhibit 3.(ii) to the Company's Quarterly Report on Form 10-Q for the quarter ended September 30, 1995, and incorporated by reference herein.) -- 4.A Copy of Certificate of Designations, Preferences and Rights of Series A $2.40 Cumulative Convertible Preferred Stock of the Company. (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, and incorporated by reference herein.) -- 4.B Copy of Certificate of Designation, Preferences and Rights of Series D Junior Participating Preferred Stock of the Company. (Filed as Exhibit 4-D to the Company's Annual Report on Form 10-K for the fiscal year ended December 31, 1987, and incorporated by reference herein.) -- 4.C Copy of Rights Agreement, dated as of November 25, 1987, as amended and restated as of May 24, 1989, between the Company and The First National Bank of Chicago, as Rights Agent (Harris Trust and Savings Bank, as successor Rights Agent). (Filed as Exhibit 1 to the Company's Current Report on Form 8-K filed on May 24, 1989, and incorporated by reference herein.) -- 4.D Copy of Certificate of Designations, Preferences and Rights of Series E ESOP Convertible Preferred Stock of the Company. (Filed as Exhibit 4-F to the Company's Quarterly Report on Form 10-Q for the quarter ended June 30, 1989, and incorporated by reference herein.) -- 4.E Copy of Subordinated Voting Note Due 1999 in the amount of $100,000,000 from the Company to NS Finance III, Inc. (Filed as Exhibit 4.8 to Form S-3 Registration Statement No. 33-62897 and incorporated by reference herein.) -- 4.F Copy of Indenture dated as of December 15, 1992, between the Company and Harris Trust and Savings Bank, as Trustee, respecting the Company's $150,000,000 12-3/4% Notes due December 15, 2002. (Filed as Exhibit 4-G to the Company's Annual Report on Form 10-K for the fiscal year ended December 31, 1992, and incorporated by reference herein.) -- 4.G Copy of Supplemental Indenture dated as of June 19, 1996 between the Company and Harris Trust & Savings Bank, as Trustee, respecting the Company's $150,000,000 12-3/4% Notes. (Filed as Exhibit 4.G to the Company's Quarterly Report on Form 10-Q for the quarter ended June 30, 1996 and incorporated by reference herein.) --
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Exhibit Sequential Number Description Page No. - ------- ----------- ---------- 4.H Copy of First Mortgage Indenture, dated April 1, 1928, between Inland Steel Company (the "Steel Company") and First Trust and Savings Bank and Melvin A. Traylor, as Trustees, and of supplemental indentures thereto, to and including the Thirty-Fifth Supplemental Indenture, incorporated by reference from the following Exhibits: -- (i) Exhibits B-1(a), B-1(b), B-1(c), B-1(d) and B-1(e), filed with Steel Company's Registration Statement on Form A-2 (No. 2-1855); (ii) Exhibits D-1(f) and D-1(g), filed with Steel Company's Registration Statement on Form E-1 (No. 2-2182); (iii) Exhibit B-1(h), filed with Steel Company's Current Report on Form 8-K dated January 18, 1937; (iv) Exhibit B-1(i), filed with Steel Company's Current Report on Form 8-K, dated February 8, 1937; (v) Exhibits B-1(j) and B-1(k), filed with Steel Company's Current Report on Form 8-K for the month of April, 1940; (vi) Exhibit B-2, filed with Steel Company's Registration Statement on Form A-2 (No. 2-4357); (vii) Exhibit B-1(l), filed with Steel Company's Current Report on Form 8-K for the month of January, 1945; (viii) Exhibit 1, filed with Steel Company's Current Report on Form 8-K for the month of November, 1946; (ix) Exhibit 1, filed with Steel Company's Current Report on Form 8-K for the months of July and August, 1948; (x) Exhibits B and C, filed with Steel Company's Current Report on Form 8-K for the month of March, 1952; (xi) Exhibit A, filed with Steel Company's Current Report on Form 8-K for the month of July, 1956; (xii) Exhibit A, filed with Steel Company's Current Report on Form 8-K for the month of July, 1957; (xiii) Exhibit B, filed with Steel Company's Current Report on Form 8-K for the month of January, 1959; (xiv) the Exhibit filed with Steel Company's Current Report on Form 8-K for the month of December, 1967; (xv) the Exhibit filed with Steel Company's Current Report on Form 8-K for the month of April, 1969; (xvi) the Exhibit filed with Steel Company's Current Report on Form 8-K for the month of July, 1970; (xvii) the Exhibit filed with the amendment on Form 8 to Steel Company's Current Report on Form 8-K for the month of April, 1974; (xviii) Exhibit B, filed with Steel Company's Current Report on Form 8-K for the month of September, 1975; (xix) Exhibit B, filed with Steel Company's Current Report on Form 8-K for the month of January, 1977; (xx) Exhibit C, filed with Steel Company's Current Report on Form 8-K for the month of February, 1977; (xxi) Exhibit B, filed with Steel Company's Quarterly Report on Form 10-Q for the quarter ended June 30, 1978; (xxii) Exhibit B, filed with Steel Company's Quarterly Report on Form 10-Q for the quarter ended June 30, 1980; (xxiii) Exhibit 4-D, filed with Steel Company's Annual Report on Form 10-K for the fiscal year ended December 31, 1980; (xxiv) Exhibit 4-D, filed with Steel Company's Annual Report on Form 10-K for the fiscal year ended December 31, 1982; (xxv) Exhibit 4-E, filed with Steel Company's Annual Report on Form 10-K for the fiscal year ended December 31, 1983; (xxvi) Exhibit 4(i) filed with the Steel Company's Registration Statement on Form S-2 (No. 33-43393); (xxvii) Exhibit 4 filed with Steel Company's Current Report on Form 8-K dated June 23, 1993; and (xxviii) Exhibit 4.C filed with the Steel Company's Quarterly Report on Form 10-Q for the quarter ended June 30, 1995; (xxix) Exhibit 4.C filed with the Steel Company's Quarterly Report on Form 10-Q for the quarter ended September 30, 1995, and (xxx) Exhibit 4.C filed with Steel Company's Quarterly Report on Form 10-Q for the quarter ended June 30, 1996.
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Exhibit Sequential Number Description Page No. - ------- ----------- ---------- 4.I Copy of consolidated reprint of First Mortgage Indenture, dated April 1, 1928, between Inland Steel Company and First Trust and Savings Bank and Melvin A. Traylor, as Trustees, as amended and supplemented by all supplemental indentures thereto, to and including the Thirteenth Supplemental Indenture. (Filed as Exhibit 4-E to Form S-1 Registration Statement No. 2-9443, and incorporated by reference herein.) 10.A* Copy of Inland Steel Industries Nonqualified Thrift Plan, as amended.................. 10.B* Copy of Inland Steel Industries Supplemental Retirement Benefit Plan for Covered Employees, as amended............ 10.C* Copy of Inland Steel Industries Special Retirement Benefit Plan for Covered Employees, as amended.................... 11 Statement of Earnings per Share of Common Stock........... 27 Financial Data Schedule...................................
- ---------------------- * Management contract or compensatory plan or arrangement required to be filed as an exhibit to the Company's Quarterly Report on Form 10-Q. -iii- EX-10.(A) 2 NONQUALIFIED THRIFT PLAN Exhibit 10.A INLAND STEEL INDUSTRIES NONQUALIFIED THRIFT PLAN (As Amended September 24, 1997) Inland Steel Industries, Inc. hereby amends and restates this Inland Steel Industries Nonqualified Thrift Plan, effective as of January 1, 1995, in order to continue to enable eligible employees of Inland Steel Industries, Inc. and its Affiliates to obtain the same level of benefits they would have been able to receive under the Inland Steel Industries Thrift Plan but for the limit imposed by the Internal Revenue Code of 1986 on the amount of compensation which may be taken into account under such plan. ARTICLE I DEFINITIONS 1.01 "Account" means the record of a Participant's interest in the Plan attributable to Company Contributions and Participant Contributions made on behalf of such Participant. 1.02 "Affiliate" means Affiliate as defined in the Qualified Thrift Plan. 1.03 "Beneficiary" means with respect to a Participant the Participant's Beneficiary under the Qualified Thrift Plan. 1.04 "Code" means the Internal Revenue Code of 1986, as from time to time amended. 1.05 "Company" means Inland Steel Industries, Inc. 1.06 "Company Contributions" means the contributions to the Plan by the Company pursuant to Section 3.03. 1.07 "Effective Date" means January 1, 1989. 1.08 "Eligible Employee" means an employee of the Company or an Affiliate who is eligible to participate in the Qualified Thrift Plan. 1.09 "Enrollment Date" means the Effective Date and the first day of each month thereafter. 1.10 "Participant" means each Eligible Employee who has met the requirements of Article II for participation in the Plan. 1.11 "Participant Contributions" means the contributions to the Plan by the Company on behalf of a Participant pursuant to Section 3.01. 1.12 "Plan" means the Inland Steel Industries Nonqualified Thrift Plan, as amended and restated. 1.13 "Plan Administrator" means the Director of Pension Investments and Administration of the Company or such other individual as may be appointed by the Vice President-Human Resources or the Treasurer of the Company to administer the Plan. To the extent consistent with the purposes of the Plan and the authority delegated to the Assistant Plan Administrator pursuant to Section 6.03(h), the term Plan Administrator shall include Assistant Plan Administrator. 1.14 "Plan Year" means the calendar year. 1.15 "Qualified Thrift Plan" means the Inland Steel Industries Thrift Plan, as from time to time amended. 1.16 "Salary" means for any relevant period the Participant's Base Salary (as defined in the Qualified Thrift Plan) which is not taken into account under the Qualified Thrift Plan pursuant to Section 401(a)(17) of the Code. 1.17 "Valuation Date" means the last day of each month. 1.18 "Vesting Service" means Vesting Service as defined in the Qualified Thrift Plan. ARTICLE II PARTICIPATION An Eligible Employee shall become a Participant on the Enrollment Date next following the filing with the Plan Administrator of an instrument in a form prescribed by the Plan Administrator evidencing his acceptance of the provisions of the Plan. -2- ARTICLE III CONTRIBUTIONS ------------- 3.01 Participant Contributions. Each Participant who is an Eligible Employee may elect for the Company to make contributions under the Plan equal to 1%, 2%, 3%, 4%, 5%, 6%, 7%, 8%, 9% or 10% of the Participant's Salary. Contributions made to the Plan on a Participant's behalf shall be treated as a salary reduction and shall reduce the amount of current cash compensation otherwise payable to such Participant. 3.02 Designation of Participant Contributions. Each Participant shall designate the percentage of his Salary to be deferred as a contribution under the Plan in the same instrument by which he evidences his acceptance of the provisions of the Plan pursuant to Article II. Thereafter, a Participant may, on a form prescribed by the Plan Administrator, change the percentage of his Salary to be deferred as a contribution under the Plan. 3.03 Company Contributions. For each payroll period the Company shall make a contribution to the Plan in respect of each Participant equal to 100% of the amount of that Participant's contribution made during such payroll period pursuant to Section 3.01 which is not in excess of 5% of the Participant's Salary for such payroll period. 3.04 Nature of Contributions. Any amounts contributed to the Plan pursuant to this Article III shall be retained by the Company as a general asset of the Company, and contributions shall be reflected on the books of the Company solely for the purpose of computing Participants' benefits from the Plan. ARTICLE IV ACCOUNTS -------- 4.01 Maintenance of Accounts. The Plan Administrator shall establish and maintain in the records of the Plan an Account for each Participant reflecting each Participant's interest in the Plan -3- attributable to Participant Contributions and Company Contributions made on his behalf, increased by earnings attributable thereto. 4.02 Valuation of Accounts. As of each Valuation Date, the Account of each Participant shall be (a) credited with earnings for the period since the next preceding Valuation Date as set forth in Section 4.03, and (b) increased by Participant Contributions and Company Contributions to the Plan with respect to such Participant relating to payroll periods since the next preceding Valuation Date. 4.03 Earnings. During a Plan Year, Participants' Accounts shall be credited with earnings at a rate equal to the net rate of interest earned by assets in the Stable Value Fixed Income Fund established under the Qualified Thrift Plan for the relevant period. ARTICLE V DISTRIBUTION OF BENEFITS ------------------------ 5.01 Distribution Upon Termination of Employment. (a) Upon termination of a Participant's employment with the Company prior to the completion of 5 years of Vesting Service other than by reason of a Distributable Event (as such term is defined in the Qualified Thrift Plan), the Participant shall be entitled to distribution of his entire Account balance, minus the portion of such Account balance attributable to Company Contributions made to such Account less than two years (twenty-four months) prior to such termination of employment, payable to the Participant in a single lump sum payment no later than 60 days after the first anniversary of the Participant's termination of employment. (b) Upon termination of a Participant's employment with the Company after the completion of 5 years of Vesting Service or by reason of a Distributable Event, subject to Paragraph (c) and Section 5.02 below, the Participant shall be entitled to distribution of his entire Account balance, payable to the Participant in a single lump sum payment no later than 60 days after the first anniversary of the Participant's termination of employment. -4- (c) Upon termination of a Participant's employment with the Company by reason of Physical Disability or Retirement, and where the amount payable to the Participant is at least $10,000, the Participant shall be entitled to a distribution of his entire Account balance, payable to the Participant in either of the following ways, as irrevocably elected by the Participant in accordance with rules established by the Plan Administrator: (1) In a single lump sum payment representing the full amount distributable to the Participant, payable on a date elected by the Participant which is not later than the end of the calendar year in which the Participant attains age 75; or (2) In substantially equal installments, payable annually, over a period not extending beyond the end of the calendar year in which the Participant attains age 75. Each installment payment shall be equal to that amount determined by multiplying the then remaining balance in the Participant's Account as of the Valuation Date used for purposes of calculating the payment by a fraction having a numerator of one and a denominator equal to the number of installments remaining to be paid. 5.02 Distribution Upon Death. Upon the death of a Participant, the total value of the Participant's Account as of the Valuation Date preceding the date of death shall be distributed to the Participant's Beneficiary in a single lump sum payment as soon as practicable after satisfactory proof of death shall have been submitted to the Plan Administrator. 5.03 Hardship Distributions. Upon a showing of hardship by a Participant, such Participant shall be entitled to a distribution of such portion (or all) of his Account balance as shall be necessary to meet such hardship. This Section 5.03 shall be administered in a manner consistent with the hardship withdrawal provisions of the Qualified Thrift Plan. The Plan Administrator's determination of a Participant's hardship hereunder shall be final. -5- ARTICLE VI PLAN ADMINISTRATION ------------------- 6.01 Administration of Plan. The Company shall have the sole responsibility for making salary reductions and contributions hereunder as provided under ARTICLE III and, subject to the provisions of Section 8.04, the Company shall have the sole authority to amend or terminate, in whole or in part, this Plan at any time. The Plan Administrator shall have the sole responsibility for the administration of the Plan. The Company does not guarantee to any Participant in any manner the effect under any tax law or Federal or state statute of the Participant's participation in this Plan. 6.02 Claims Procedure. The Plan Administrator shall make all determinations as to the right of any person to a benefit under this Plan. Any denial by the Plan Administrator of a claim for benefits under the Plan by a Participant shall be stated in writing by the Plan Administrator and shall set forth the specific reasons for the denial. In addition, the Plan Administrator shall afford a reasonable opportunity to any Participant whose claim for benefits has been denied for a review of the decision denying the claim. 6.03 Powers and Duties of Plan Administrator. The Plan Administrator shall have such duties and powers as may be necessary to discharge its duties hereunder, including, but not by way of limitation, the following: (a) to construe and interpret the Plan, decide all questions of eligibility and determine the amount, manner and time of payment of any benefits hereunder; (b) to prescribe procedures to be followed by Participants in filing elections or revocations thereof; (c) to prepare and distribute, in such manner as the Plan Administrator determines to be appropriate, information explaining the Plan; (d) to receive from the Company and from Participants such information as shall be necessary for the proper administration of the Plan; -6- (e) to furnish the Company, upon request, such reports with respect to the administration of the Plan as are reasonable and appropriate; (f) to receive, review and keep on file (as it deems convenient and proper) reports of benefit payments by the Company and reports of disbursements for expenses directed by the Plan Administrator; (g) to appoint individuals to assist in the administration of the Plan and any other agents it deems advisable, including legal counsel; and (h) to name as an Assistant Plan Administrator any individual or individuals and to delegate such authority and duties to such individual as the Plan Administrator in its discretion deems advisable. Each Assistant Plan Administrator, if any, named pursuant to this paragraph shall have such authority to act with respect to the administration of the Plan as the Plan Administrator may prescribe. The incumbency of any Assistant Plan Administrator may be terminated by action of the Plan Administrator at any time, with or without cause. Notwithstanding the foregoing, in the absence of a formal designation of any Assistant Plan Administrator by the Plan Administrator, no provision of this paragraph shall prevent the Plan Administrator from delegating authority to employees or other agents of the Company in executing the duties of administering the Plan. The Plan Administrator shall have no power to add to, subtract from or modify any of the terms of the Plan, or to change or add to any benefits provided by the Plan, or to waive or fail to apply any requirements of eligibility for a benefit under the Plan. 6.04 Rules and Decisions. The Plan Administrator may adopt such rules as it deems necessary, desirable or appropriate. All rules and decisions of the Plan Administrator shall be uniformly and consistently applied to all Participants in similar circumstances. When making a determination or calculation, the Plan Administrator shall be entitled to rely upon information furnished by a Participant, the Company or the legal counsel of the Company. 6.05 Authorization of Benefit Payments. The Plan Administrator shall issue directions to the Company concerning all benefits which are to be paid from the Company's general assets pursuant to the provisions of the Plan. 6.06 Indemnification of Plan Administrator. The Plan Administrator shall be indemnified by the Company against any and all liabilities arising by reason of any act or failure to act made in good faith -7- pursuant to the provisions of the Plan, including expenses reasonably incurred in the defense of any claim relating thereto. ARTICLE VII MISCELLANEOUS 7.01 No Right to Employment, etc. Neither the creation of this Plan nor anything contained herein shall be construed as giving any Participant hereunder or other employees of the Company or any subsidiary any right to remain in the employ of the Company or any subsidiary. 7.02 Successors and Assigns. All rights and obligations of this Plan shall inure to, and be binding upon the successors and assigns of the Company. 7.03 Inalienability. Except so far as may be contrary to the laws of any state having jurisdiction in the premises, a Participant or Beneficiary shall have no right to assign, transfer, hypothecate, encumber, commute or anticipate his interest in any payments under this Plan and such payments shall not in any way be subject to any legal process to levy upon or attach the same for payment of any claim against any Participant or Beneficiary. 7.04 Incompetency. If any Participant or Beneficiary is, in the opinion of the Plan Administrator, legally incapable of giving a valid receipt and discharge for any payment, the Plan Administrator may, at its option, direct that such payment or any part thereof be made to such person or persons who in the opinion of the Plan Administrator are caring for and supporting such Participant or Beneficiary, unless it has received due notice of claim from a duly appointed guardian or conservator of the estate of the Participant or Beneficiary. A payment so made will be a complete discharge of the obligations under this Plan to the extent of and as to that payment, and neither the Plan Administrator nor the Company will have any obligation regarding the application of the payment. 7.05 Controlling Law. To the extent not preempted by the laws of the United States of America, the laws of the State of Illinois shall be the controlling state law in all matters relating to this Plan. -8- 7.06 Severability. If any provisions of this Plan shall be held illegal or invalid for any reason, the illegality or invalidity shall not affect the remaining parts of this Plan, but this Plan shall be construed and enforced as if the illegal and invalid provisions never had been included herein. 7.07 Limitations on Provisions. The provisions of this Plan and any benefits hereunder shall be limited as described herein. Any benefit payable under the Qualified Thrift Plan shall be paid solely in accordance with the terms and provisions of the Qualified Thrift Plan, as appropriate, and nothing in this Plan shall operate or be construed in any way to modify, amend, or affect the terms and provisions of the Qualified Thrift Plan. 7.08 Gender and Number. Whenever the context requires or permits, the gender and number of words shall be interchangeable. ARTICLE VIII AMENDMENT AND TERMINATION 8.01 Amendment to Conform with Law. The Plan may be amended to take effect retroactively or otherwise, as deemed necessary or advisable for the purpose of conforming the Plan to any present or future law relating to plans of this or a similar nature, and to the administrative regulations and rulings promulgated thereunder. 8.02 Other Amendments and Termination. The Plan may be amended at any time, without the consent of any Participant or Beneficiary. Notwithstanding the foregoing, the Plan shall not be amended or terminated so as to reduce or cancel the benefits which have accrued to a Participant or Beneficiary prior to the later of the date of adoption of the amendment or termination or the effective date thereof, and in the event of such amendment or termination, any such accrued benefit hereunder shall not be reduced or canceled. -9- 8.03 Effect of Change in Control. (a) In the event of a Change in Control (as defined below), all benefits accrued as of the date of such Change in Control hereunder shall become fully (i.e., 100%) and irrevocably vested, and shall become distributable to Participants (and Beneficiaries) at such time and in such manner provided herein pursuant to the provisions of the Plan as in effect on the day immediately preceding the date of such Change in Control. The Plan Administrator shall, in its sole discretion, determine whether assets equal in value to the aggregate of all accrued benefits under the Plan as of the date of such Change in Control shall be deposited by the Company with a bank trustee pursuant to one or more "rabbi trusts." (b) For purposes of this Section 8.03, a "Change in Control" shall be deemed to have occurred if: (i) any "person" (as such term is used in Sections 13(d) and 14(d) of the Securities Exchange Act of 1934, as amended (the "Exchange Act")), other than (A) the Company or any of its subsidiaries, (B) a trustee or other fiduciary holding securities under an employee benefit plan of the Company or any of its subsidiaries, (C) an underwriter temporarily holding securities pursuant to an offering of such securities, or (D) a corporation owned, directly or indirectly, by the stockholders of the Company in substantially the same proportions as their ownership of stock of the Company, is or becomes the "beneficial owner" (as defined in Rule 13d-3 under the Exchange Act), directly or indirectly, of securities of the Company (not including in the securities beneficially owned by such persons any securities acquired directly from the Company or its affiliates) representing 40% or more of the combined voting power of the Company's then outstanding securities; (ii) during any period of two consecutive years (not including any period prior to November 22, 1989), individuals who at the beginning of such period constitute the Board of Directors of the Company and any new director (other than a director designated by a person who has entered into an agreement with the Company to effect a transaction described in clauses (i), (iii) or (iv) of this paragraph (b)), whose election by the Board or nomination for election by the Company's stockholders was approved by a vote of at least two-thirds (2/3) of the directors then still in office who either were directors at the beginning of the period or whose election or nomination for election was previously so approved, cease for any reason to constitute a majority thereof; -10- (iii) the stockholders of the Company approve a merger or consolidation of the Company with any other corporation, other than a merger or consolidation which would result in the voting securities of the Company outstanding immediately prior thereto continuing to represent (either by remaining outstanding or by being converted into voting securities of the surviving entity) in combination with the ownership of any trustee or other fiduciary holding securities under an employee benefit plan of the Company, at least 80% of the combined voting power of the voting securities of the Company or such surviving entity outstanding immediately after such merger or consolidation, or a merger or consolidation effected to implement a recapitalization of the Company (or similar transaction) in which no person acquires more than 50% of the combined voting power of the Company's then outstanding securities; or (iv) the stockholders of the Company approve a plan of complete liquidation of the Company or an agreement for the sale or disposition by the Company of all or substantially all of the Company's assets. (c) The provisions of this Section 8.03 may not be amended after the date of a Change in Control without the written consent of a majority in both number and interest of the Participants in this Plan, other than those Participants who are both (i) not employed by the Company or a subsidiary as of the date of the Change in Control and (ii) not receiving nor could have commenced receiving benefits under the Plan as of the date of the Change in Control, both immediately prior to the Change in Control and at the date of such amendment. 8.04 Manner and Form of Amendment or Termination. Any amendment or termination of this Plan shall be made by action of the Board of Directors of the Company; provided, however, that (i) the Treasurer of the Company, and (ii) the Vice President-Human Resources of the Company (or such other person as designated by the Chairman of the Board of Directors of the Company) are jointly authorized, by written action signed by both individuals, to adopt and place in effect any amendments to the Plan and any related documents as they jointly deem necessary or advisable: (a) to maintain the Plan and any related documents in compliance with applicable law; (b) to relieve administrative burdens with respect to those documents; or (c) to provide for other changes in the best interests of Plan Participants and Beneficiaries, -11- without the necessity for further action by the Board of Directors of the Company or subsequent ratification; provided, however, that any action or amendment that would have the effect of: (i) terminating the Plan; (ii) materially changing the benefits under the Plan; or (iii) increasing anticipated costs associated with the Plan by more than $5 million, except for changes to comply with applicable law; may not be made without approval or ratification by the Board of Directors of the Company. Notwithstanding the foregoing, either of the Board of Directors of the Company or the Chairman of the Board of Directors of the Company may from time to time authorize another officer or officers to adopt and place into effect (without the further need for Board authorization) amendments to the Plan and any related documents within the parameters set forth in subparagraphs (a) through (c) above and subject to the limitations in subparagraphs (i) through (iii) above. If and to the extent the Board or the Chairman does so authorize other officer(s), that officer or those officers will have the powers described above in this Section 8.04. 8.05 Notice of Amendment or Termination. The Plan Administrator shall notify Participants or Beneficiaries who are affected by any amendment or termination of this Plan within a reasonable time thereof. -12- EX-10.(B) 3 SUPPLEMENTAL RETIREMENT BENEFIT PLAN Exhibit 10.B INLAND STEEL INDUSTRIES SUPPLEMENTAL RETIREMENT BENEFIT PLAN FOR COVERED EMPLOYEES As Amended September 24, 1997 ARTICLE 1 1.1 Purpose. It is the intention of Inland Steel Industries, Inc. (the "Company") to maintain appropriate levels of retirement benefits for individuals who are entitled to benefits under the Inland Steel Industries Pension Plan Supplement for Salaried Employees of Inland Steel Industries, Inc. and Certain Subsidiaries, Revised As Of January 1, 1989, and as thereafter amended, and for individuals who are entitled to benefits under the Inland Steel Industries Pension Plan Supplement for Employees of J. M. Tull Metals Company, Inc., Effective As Of December 31, 1988, and as thereafter amended (each a "Pension Plan Supplement"). Accordingly, the Board of Directors of Inland Steel Industries, Inc., acting on behalf of the Company, hereby establishes this amended and restated Inland Steel Industries Supplemental Retirement Benefit Plan for Covered Employees (the "Supplemental Retirement Benefit Plan") as a successor to and continuation of the Inland Steel Company Supplemental Retirement Benefit Plan for Covered Employees heretofore adopted by Inland Steel Company effective as of January 1, 1976 and the Inland Steel Industries Supplemental Retirement Benefit Plan for Covered Employees heretofore adopted by the Company effective as of January 1, 1989. This Supplemental Retirement Benefit Plan is intended to provide benefits to eligible persons in a manner so as to maintain the level of total retirement benefits which, but for the limitations on benefits required by Section 415 of the Internal Revenue Code of 1986, as amended (the "Code"), would otherwise be payable under the Pension Plan Supplement. The Supplemental Retirement Benefit Plan shall maintain such total retirement benefit levels by means of supplemental unfunded payments made by the Company to the individuals eligible for such payments as more fully described in Articles 3 and 4. This Supplemental Retirement Benefit Plan is intended to be an "excess benefit plan" described in Section 3(36) of the Employee Retirement Income Security Act of 1974, as amended. 1.2 Effective Date. This amended and restated Supplemental Retirement Benefit Plan is effective as of July 1, 1990 (the "Effective Date"). 1.3 Funding Not Required. The Company shall not be required to establish any fund or set aside any monies for the payment of Supplemental Retirement Benefits under this Supplemental Retirement Benefit Plan. ARTICLE 2 2.1 Retirement Committee. The Company hereby delegates authority to administer the Supplemental Retirement Benefit Plan to the Inland Steel Industries Retirement Committee (the "Committee") as established under the Inland Steel Industries Pension Plan, As Revised, Effective December 1, 1988, and as may thereafter be amended (the "Inland Steel Industries Pension Plan"). Any action by the Committee shall be evidenced by a written document, certified by the Secretary of the Committee. References to the Company's authority, right, or power to act contained in any notice, disclosure, or communication which is made with a view toward effectuating the purposes of this Supplemental Retirement Benefit Plan shall be construed to include such actions by the Committee on the Company's behalf and such actions by others to whom the Committee has delegated its authority. 2.2 Authority of Committee. The Committee shall have authority to control and manage the operation and administration of the Supplemental Retirement Benefit Plan, including the authority and discretion to construe and interpret the Supplemental Retirement Benefit Plan, decide all questions of eligibility for and the amount, manner and time of payment of Supplemental Retirement Benefits hereunder and such other rights and powers necessary or convenient to the carrying out of its functions hereunder. The authority and responsibilities of the Committee shall be coextensive with its authority and responsibilities under the Inland Steel Industries Pension Plan. -2- ARTICLE 3 3.1 Participation. Each Employee of the Company and/or its subsidiaries who, on or after the Effective Date, is entitled to an accrued benefit under the Pension Plan Supplement the amount of which is limited by reason of the application of the limitations imposed by Code Section 415, as amended from time to time, and the regulations and rulings thereunder or the terms of the Inland Steel Industries Pension Plan implementing those limitations (the "Section 415 Limitations") shall be a "Participant" in this Supplemental Retirement Benefit Plan and upon retirement shall be entitled to receive the benefit (the "Supplemental Retirement Benefit"), if any, determined in accordance with Article 4 hereof. 3.2 Beneficiary. The spouse or other person entitled to a benefit under the Pension Plan Supplement upon the death of a Participant hereunder shall, upon the death of the Participant, be a "Beneficiary" under this Supplemental Retirement Benefit Plan entitled to receive the Supplemental Retirement Benefit, if any, determined in accordance with Article 4 hereof. ARTICLE 4 4.1 Amount of Supplemental Retirement Benefit. The amount of Supplemental Retirement Benefit which a Participant or Beneficiary shall accrue and be entitled to receive and the Company shall be obligated to pay under this Supplemental Retirement Benefit Plan with respect to each Limitation Year (as defined below) shall be equal to the excess, if any, of the amount described in paragraph (a) of this Section 4.1 over the amount described in paragraph (b) of this Section 4.1: (a) The amount of the annual benefit which would have been accrued with respect to such Participant or Beneficiary under the Pension Plan Supplement as of the last day of the Limitation Year under the terms of the Pension Plan Supplement as in effect on the last day of such Limitation Year if such -3- benefit were computed without giving effect to the Section 415 Limitations for such Limitation Year. (b) The amount of the annual benefit which was accrued for such Participant or Beneficiary with respect to such Limitation Year under the terms of the Pension Plan Supplement as in effect on the last day of that Limitation Year, including those terms implementing the Section 415 Limitations referred to above, as indexed. As used in this Section 4.1, "Limitation Year" means the Plan Year applicable to the Pension Plan Supplement, being the period beginning on January 1 of each year and ending on December 31 of the same year. It is the intent of this Section 4.1 that the Supplemental Retirement Benefit described above shall be determined at all times in a manner consistent with the then current Section 415 Limitations. Accordingly, the determinations made pursuant to this Section 4.1 shall be based upon adjustments employed in determining the amount of the annual benefit described above, and shall be subject to adjustments which reflect the Section 415 Limitations with respect to the computation of benefits under the Pension Plan Supplement. If a Participant receives a single sum distribution under the Pension Plan Supplement, but has elected another form of benefit under this Supplemental Retirement Benefit Plan, the amount of the annual benefit payable under this Supplemental Retirement Benefit Plan in each Limitation Year shall be the same as that payable in the year in which the single sum distribution is made. Except as provided in Section 5.3 hereof, no Supplemental Retirement Benefit shall be payable to any Participant or his Beneficiaries unless, at the time of the Participant's termination of employment with the Company and all Affiliates, the Participant has been credited with at least five Years of Vesting Service under the Pension Plan Supplement. 4.2 Payment of Supplemental Retirement Benefit. (a) Except as provided hereinafter, the Supplemental Retirement Benefit which a Participant or Beneficiary is eligible to receive shall be paid by the Company at such time, in the same form and subject to the same conditions, as is the benefit paid to such Participant or Beneficiary under the Pension Plan Supplement. -4- (b) (i) The Chairman of the Board of Directors of the Company (the "Chairman"), in his or her sole discretion and after considering the needs and circumstances of the Participant or Beneficiary concerned, may at any time elect to direct payment of the Special Retirement Benefit to the Participant or Beneficiary in any form of benefit provided under the Pension Plan Supplement, including a lump sum. (ii) A Participant or Beneficiary may in writing request payment of his or her Special Retirement Benefit in a form other than the form of benefit payment under the Pension Plan Supplement. After receiving such a request, the Chairman shall consider the request and the circumstances on which it is based and shall, in his or her sole discretion, approve or disapprove the request and inform the requesting Participant or Beneficiary of the decision. (iii) Any optional form of benefit shall be the actuarial equivalent of the benefit otherwise payable to the Participant or Beneficiary, determined by applying the appropriate interest rate and other actuarial assumptions then set forth in the Pension Plan Supplement. (c) The Company may purchase an annuity with respect to any portion of a Participant's accrued Supplemental Retirement Benefit in full satisfaction thereof to the extent provided by paragraphs (a) through (i) of Section 4.4 and shall be obligated to purchase an annuity or make a lump sum payment to the extent provided by paragraph (j) of Section 4.4. 4.3 Pension Plan Supplement Increase. In the event the Pension Plan Supplement is amended to increase the benefit payable to participants or beneficiaries then receiving pensions under the Pension Plan Supplement, benefits payable under this Supplemental Retirement Benefit Plan shall be adjusted or commenced accordingly for Participants or Beneficiaries; provided that no such adjustment shall be made if the Participant received a single sum distribution under this Supplemental Retirement Benefit Plan; and provided, further, that no such adjustment shall be made with respect to any portion of a Participant's accrued Supplemental Retirement Benefit for which an annuity has been purchased under Section 4.4. -5- 4.4 Purchase of Annuities. The Company may at any time, in the sole discretion of the Committee or the Company's Board of Directors, purchase one or more annuities with respect to all or any portion of the Supplemental Retirement Benefit accrued under the Plan by any Participant, subject to the following: (a) The Company shall not be obligated to purchase an annuity for any Participant or for any portion of a Participant's accrued Supplemental Retirement Benefit, notwithstanding the purchase of an annuity with respect to any other Participant or any other portion of the Participant's accrued Supplemental Retirement Benefit. (b) The purchase of annuities under this Section 4.4 shall be limited to Supplemental Retirement Benefits accrued by Participants who meet all of the following requirements: (i) completion of at least five years of Vesting Service under the Pension Plan Supplement; (ii) annual compensation in excess of $150,000; and (iii) attainment of age 55. (c) Any such annuity purchased with respect to any Participant's accrued Supplemental Retirement Benefit shall be issued to and distributed to such Participant, who shall be the sole owner of such annuity and shall contain such terms not inconsistent with this Section 4.4 as the Committee shall determine in its sole discretion. (d) Annuity payments to a Participant under any such annuity shall commence as of the date on which the Participant attains age 65 or the first day of the month thereafter; provided, however, that any such annuity may provide that, in the event of the Participant's death prior to attainment of age 65, benefits payable to any Beneficiary may commence as of any earlier date provided by the terms of the annuity. (e) The monthly benefit amount to be provided by any such annuity shall be such amount as the Committee, in its -6- sole discretion, determines would provide, on an after-tax basis, an amount equal to the amount estimated to be the after-tax benefit to the Participant of monthly benefits payable by the Company commencing at age 65 under Section 4.2. Such determination shall be made by the Committee, in its sole discretion, based upon such rates and factors as the Committee, in its sole discretion, deems appropriate. No change in annuity benefits shall be required by reason of any subsequent change in such rates and factors; provided, however, that in determining the amount of any subsequent annuity purchased under this Section 4.4, the Committee may, in its sole discretion, take into account any change in such rates and factors and the benefits payable under any annuity previously purchased under this Section 4.4. Notwithstanding the foregoing, with the consent of the Participant, the Committee may substitute any form of fixed or variable annuity in lieu of the annuity otherwise provided by this paragraph (e), provided that such substitution does not result in a change in the cost of the annuity or the commencement date of the annuity payments. (f) The Company shall make a tax gross-up payment to any Participant for whom an annuity is purchased under this Section 4.4 in such amount as the Committee shall determine, in its sole discretion, would be necessary to make such Participant whole for federal, state and local income taxes attributable to the receipt of the annuity and the gross-up payment, based upon such tax rates as the Committee shall determine in its sole discretion. (g) To the extent that the Company has purchased an annuity under this Section 4.4 with respect to any portion of a Participant's accrued Supplemental Retirement Benefit, such annuity and the tax gross-up payment under paragraph (f) above shall be in full satisfaction of all obligations of the Company to the Participant or any Beneficiary of the Participant attributable to such portion of the Participant's accrued Supplemental Retirement Benefit. (h) A purchase of an annuity under this Section 4.4 shall have no effect on the monthly benefits payable to the Participant under Sections 4.1 and 4.3 prior to the Participant's attainment of age 65. In the event of the -7- Participant's death prior to attainment of age 65, the benefit payable to any Beneficiary of the Participant shall be determined solely on the basis of the monthly benefits which would otherwise have been payable to the Participant under the Plan prior to attainment of age 65 and taking into account the amount payable to the Beneficiary under the Pension Plan Supplement. (i) This Section 4.4 shall apply to Supplemental Retirement Benefits accrued by any Participant under the Plan prior to October 1, 1993, only if such Participant consents (in such manner and at such time as the Committee may require) to such application and waives any right which the Participant might otherwise be entitled to assert under Section 5.2 by reason of the adoption and application to the Participant of this Section 4.4. (j) If an annuity has not been purchased in accordance with the foregoing provisions of this Section 4.4 with respect to any portion of the accrued Supplemental Retirement Benefit payable after attainment of age 65 to a Participant who meets all of the requirements of paragraph (b) above and who has executed a consent and waiver in accordance with paragraph (i) above, then, except for any portion payable in the form of a lump sum in accordance with Section 4.2, upon such Participant's termination of employment with the Company and its affiliates, the Company shall, as soon as practicable thereafter, purchase an annuity for such portion in accordance with paragraphs (c) through (h) above. ARTICLE 5 5.1 Amendment to Conform with Law. The Company may by amendment make such changes in, additions to, and substitutions in the provisions of this Supplemental Retirement Benefit Plan, to take effect retroactively or otherwise, as deemed necessary or advisable for the purpose of conforming this Supplemental Retirement Benefit Plan to any present or future law relating to plans of this or a similar nature, and to the administrative regulations and rulings promulgated thereunder. -8- 5.2 Other Amendments and Termination. The Company may amend or terminate this Supplemental Retirement Benefit Plan at any time, without the consent of any Participant or Beneficiary. Notwithstanding the foregoing, this Supplemental Retirement Benefit Plan shall not be amended or terminated so as to reduce or cancel the benefits which have accrued to a Participant or Beneficiary prior to the later of the date of adoption of the amendment or termination or the effective date thereof, and in the event of such amendment or termination, any such accrued benefit hereunder shall not be reduced or cancelled; provided that, in the event the Pension Plan Supplement is terminated or curtailed with the result that pension payments to retired employees and survivor and contingent annuity payments to beneficiaries are discontinued or reduced, the Supplemental Retirement Plan Benefit then being paid or in the future payable pursuant to the Supplemental Retirement Benefit Plan shall similarly be discontinued or reduced in the same ratio as payments under the Pension Plan Supplement are discontinued or reduced. 5.3 Effect of Change in Control. (a) In the event of a Change in Control (as defined below), all benefits accrued as of the date of such Change in Control hereunder shall become fully (i.e., 100%) and irrevocably vested and shall become distributable to Participants (and Beneficiaries) at such time and in such manner provided herein pursuant to the provisions of the Plan as in effect on the day immediately preceding the date of such Change in Control. The Committee shall, in its sole discretion, determine whether assets equal in value to the aggregate of all accrued benefits under the Plan as of the date of such Change in Control shall be deposited by the Company with a bank or corporate trustee pursuant to one or more "rabbi trusts". (b) For purposes of this Section 5.3, a "Change in Control" shall be deemed to have occurred if: (i) any "person" (as such term is used in Sections 13(d) and 14(d) of the Securities Exchange Act of 1934, as amended (the "Exchange Act")), other than (A) the Company or any of its subsidiaries, (B) a trustee or other fiduciary holding securities under an employee benefit plan of the -9- Company or any of its subsidiaries, (C) an underwriter temporarily holding securities pursuant to an offering of such securities, or (D) a corporation owned, directly or indirectly, by the stockholders of the Company in substantially the same proportions as their ownership of stock of the Company, is or becomes the "beneficial owner" (as defined in Rule 13d-3 under the Exchange Act), directly or indirectly, of securities of the Company (not including in the securities beneficially owned by such person any securities acquired directly from the Company or its affiliates) representing 40% or more of the combined voting power of the Company's then outstanding securities; (ii) during any period of two consecutive years (not including any period prior to November 22, 1989), individuals who at the beginning of such period constitute the Board of Directors of the Company and any new director (other than a director designated by a person who has entered into an agreement with the Company to effect a transaction described in clauses (i), (iii) or (iv) of this paragraph (b)), whose election by the Board or nomination for election by the Company's stockholders was approved by a vote of at least two-thirds (2/3) of the directors then still in office who either were directors at the beginning of the period or whose election or nomination for election was previously so approved, cease for any reason to constitute a majority thereof; (iii) the stockholders of the Company approve a merger or consolidation of the Company with any other corporation, other than (A) a merger or consolidation which would result in the voting securities of the Company outstanding immediately prior thereto continuing to represent (either by remaining outstanding or by being converted into voting securities of the surviving entity) in combination with the ownership of any trustee or other fiduciary holding securities under an employee benefit plan of the Company or any of its subsidiaries, at least 80% of the combined voting power of the voting securities of the Company or such surviving entity outstanding immediately after such merger or consolidation, or (B) a merger or consolidation effected to implement a recapitalization of the Company (or similar transaction) in which no person acquires more than 50% of the combined voting power of the Company's then outstanding securities; or -10- (iv) the stockholders of the Company approve a plan of complete liquidation of the Company or an agreement for the sale or disposition by the Company of all or substantially all of the Company's assets. (c) The provisions of this Section 5.3 may not be amended after the date of a Change in Control without the written consent of a majority in both number and interest of the Participants in this Supplemental Retirement Benefit Plan, other than those Participants who are both (i) not employed by the Company or a subsidiary as of the date of the Change in Control and (ii) not receiving nor could have commenced receiving benefits under the Pension Plan Supplement as of the date of the Change in Control, both immediately prior to the Change in Control and at the date of such amendment. 5.4 Manner and Form of Amendment or Termination. Any amendment or termination of this Supplemental Retirement Benefit Plan by the Company shall be made by action of the Board of Directors of the Company; provided, however, that (i) the Treasurer of the Company, and (ii) the Vice President-Human Resources of the Company (or such other person as designated by the Chairman of the Board of Directors of the Company) are jointly authorized, by written action signed by both individuals, to adopt and place in effect any amendments to the Supplemental Retirement Benefit Plan and any related documents as they jointly deem necessary or advisable: (a) to maintain the Supplemental Retirement Benefit Plan and any related documents in compliance with applicable law; (b) to relieve administrative burdens with respect to those documents; or (c) to provide for other changes in the best interests of Participants and Beneficiaries, without the necessity for further action by the Board of Directors of the Company or subsequent ratification; provided, however, that any action or amendment that would have the effect of: (i) terminating the Supplemental Retirement Benefit Plan; -11- (ii) changing the structure of the Committee under which the Supplemental Retirement Benefit Plan is administered; (iii) authorizing an Affiliate to adopt the Supplemental Retirement Benefit Plan; (iv) materially changing the benefits under the Supplemental Retirement Benefit Plan; or (v) increasing anticipated costs associated with the Supplemental Retirement Benefit Plan by more than $15 million, except for changes to comply with applicable law; may not be made without approval or ratification by the Board of Directors of the Company. Notwithstanding the foregoing, either of the Board of Directors of the Company or the Chairman of the Board of Directors of the Company may from time to time authorize another officer or officers to adopt and place into effect (without the further need for Board authorization) amendments to the Plan and any related documents within the parameters set forth in subparagraphs (a) through (c) above and subject to the limitations in subparagraphs (i) through (v) above. If and to the extent the Board or the Chairman does so authorize other officer(s), that officer or those officers will have the powers described above in this Section 5.4. Any amendment or notice of termination of this Supplemental Retirement Benefit Plan shall be furnished to the Committee by the Company. 5.5 Notice of Amendment or Termination. The Committee shall notify Participants or Beneficiaries who are affected by any amendment or termination of this Supplemental Retirement Benefit Plan within a reasonable time thereof. -12- ARTICLE 6 6.1 No Right to Employment, etc. Neither the creation of this Supplemental Retirement Benefit Plan nor anything contained herein shall be construed as giving any Participant hereunder or other employees of the Company or any subsidiary any right to remain in the employ of the Company or any subsidiary. 6.2 Successors and Assigns. All rights and obligations of this Plan shall inure to, and be binding upon the successors and assigns of the Company. 6.3 Inalienability. Except so far as may be contrary to the laws of any state having jurisdiction in the premises, a Participant or Beneficiary shall have no right to assign, transfer, hypothecate, encumber, commute or anticipate his interest in any payments under this Supplemental Retirement Benefit Plan and such payments shall not in any way be subject to any legal process to levy upon or attach the same for payment of any claim against any Participant or Beneficiary. 6.1 Incompetency. If any Participant or Beneficiary is, in the opinion of the Committee, legally incapable of giving a valid receipt and discharge for any payment, the Committee may, at its option, direct that such payment or any part thereof be made to such person or persons who in the opinion of the Committee are caring for and supporting such Participant or Beneficiary, unless it has received due notice of claim from a duly appointed guardian or conservator of the estate of the Participant or Beneficiary. A payment so made will be a complete discharge of the obligations under this Supplemental Retirement Benefit Plan to the extent of and as to that payment, and neither the Committee nor the Company will have any obligation regarding the application of the payment. -13- 6.5 Controlling Law. To the extent not preempted by the laws of the United States of America, the laws of the State of Illinois shall be the controlling state law in all matters relating to this Supplemental Retirement Benefit Plan. 6.6 Severability. If any provisions of this Supplemental Retirement Benefit Plan shall be held illegal or invalid for any reason, the illegality or invalidity shall not affect the remaining parts of this Supplemental Retirement Benefit Plan, but this Supplemental Retirement Benefit Plan shall be construed and enforced as if the illegal and invalid provisions never had been included herein. 6.7 Limitations on Provisions. The provisions of this Supplemental Retirement Benefit Plan and any Supplemental Retirement Benefits shall be limited as described herein. Any benefit payable under the Pension Plan Supplement shall be paid solely in accordance with the terms and provisions of the Pension Plan Supplement, as appropriate, and nothing in this Supplemental Retirement Benefit Plan shall operate or be construed in any way to modify, amend, or affect the terms and provisions of the Pension Plan Supplement. 6.8 Gender and Number. Whenever the context requires or permits, the gender and number of words shall be interchangeable. ARTICLE 7 7.1 Application for Benefits and Review Procedures. The Inland Steel Industries Claims Procedure set forth in the Pension Plan Supplement shall apply to any claim for benefits under this Supplemental Retirement Benefit Plan. The "Plan Administrator" for purposes of applying such Claims Procedure to this Supplemental Retirement Benefit Plan shall be the Committee. -14- EX-10.(C) 4 SPECIAL RETIREMENT BENEFIT PLAN Exhibit 10.C INLAND STEEL INDUSTRIES SPECIAL RETIREMENT BENEFIT PLAN FOR COVERED EMPLOYEES As Amended September 24, 1997 ARTICLE 1 1.1 Purpose. ------- It is the intention of Inland Steel Industries, Inc. (the "Company") to continue to maintain certain levels of retirement benefits for employees of the Company and its subsidiaries who are entitled to benefits under the Inland Steel Industries Pension Plan Supplement for Salaried Employees of Inland Steel Industries, Inc. and Certain Subsidiaries, Revised As Of January 1, 1989, and as thereafter be amended, and for individuals who are entitled to benefits under the Inland Steel Industries Pension Plan Supplement for Employees of J. M. Tull Metals Company, Inc., Effective As of December 31, 1988, and as thereafter amended (each a "Pension Plan Supplement"). Accordingly, the Company hereby amends and restates the Inland Steel Industries Special Retirement Benefit Plan for Covered Employees (the "Special Retirement Plan") to provide benefits to eligible employees in a manner so as to maintain the level of total retirement benefits which would be payable under the Pension Plan Supplement but for certain limitations imposed under Section 401(a) (17) and/or Section 415 of the Internal Revenue Code of 1986 (the "Code") and such employee's participation in the Inland Steel Industries Nonqualified Thrift Plan. 1.2 Effective Date. -------------- This amended and restated Special Retirement Benefit Plan is effective as of July 1, 1990 (the "Effective Date"). 1.3 Funding Not Required. -------------------- The Company shall not be required to establish any fund or set aside any monies for the payment of Special Retirement Benefits under this Special Retirement Benefit Plan. ARTICLE 2 2.1 Retirement Committee. -------------------- The Company hereby delegates authority to administer the Special Retirement Benefit Plan to the Inland Steel Industries Retirement Committee (the "Committee") as established under the Inland Steel Industries Pension Plan, As Revised, Effective December 1, 1988, and as may thereafter be amended (the "Inland Steel Industries Pension Plan"). Any action by the Committee shall be evidenced by a written document, certified by the Secretary of the Committee. References to the Company's authority, right, or power to act contained in any notice, disclosure, or communication which is made with a view toward effectuating the purposes of this Special Retirement Benefit Plan shall be construed to include such actions by the Committee on the Company's behalf and such actions by others to whom the Committee has delegated its authority. 2.2 Authority Of Committee. ---------------------- The Committee shall have authority to control and manage the operation and administration of the Special Retirement Benefit Plan, including the authority and discretion to construe and interpret the Special Retirement Benefit Plan, decide all questions of eligibility for and the amount, manner and time of payment of Special Retirement Benefits hereunder and such other rights and powers necessary or convenient to the carrying out of its functions hereunder. The authority and responsibilities of the Committee shall be coextensive with its authority and responsibilities under the Inland Steel Industries Pension Plan. ARTICLE 3 3.1 Participation. ------------- Each Employee of the Company and/or its subsidiaries who on or after the Effective Date: (a) is entitled to an accrued benefit under the Pension Plan Supplement; and (b) has Earnings used in the determination of "Average Monthly Earnings" (each as defined in the Pension Plan Supplement) during any period which exceed the maximum amount of such Earnings which may be into account under Code Section 401(a)(17) as may be amended from time to time, and any rulings or regulations promulgated thereunder or the terms of the Pension Plan Supplement implementing such Code Section (the "401(a)(17) Earnings Limitation") in determining the amount of such accrued benefit payments under the Pension Plan Supplement, shall be a "Participant" in this Special Retirement Plan and upon retirement shall be entitled to receive the benefit (the "Special Retirement Benefit") if any, determined in accordance with Article 4 hereof. - 2 - 3.2 Beneficiary. ----------- The spouse or other person entitled to a benefit under the Pension Plan Supplement upon the death of a Participant hereunder shall, upon the death of the Participant, be a "Beneficiary" under this Special Retirement Benefit Plan entitled to receive the Special Retirement Benefit, if any, determined in accordance with Article 4 hereof. ARTICLE 4 4.1 Amount of Special Retirement Benefit. ------------------------------------ The amount of Special Retirement Benefit which a Participant or Beneficiary shall accrue and be entitled to receive and the Company shall be obligated to pay under this Special Retirement Plan with respect to each Plan Year applicable to the Pension Plan Supplement shall be equal to the excess, if any, of the amount described in paragraph (a) of this Section 4.1 over the amount described in paragraph (b) of this Section 4.1: (a) The amount of the annual benefit which would have been accrued with respect to such Participant or Beneficiary under the Pension Plan Supplement as of the last day of the Plan Year under the terms of the Pension Plan Supplement as in effect on the last day of the Plan Year if such benefit were computed by including in the Participant's "Earnings" used in the determination of "Average Monthly Earnings" (each as defined under the Pension Plan Supplement) the amount of "Participant Contributions" made by the Participant under the Inland Steel Industries Nonqualified Thrift Plan as if such amounts had otherwise been paid currently to the Participant, and without giving effect to the 401(a)(17) Earnings Limitation or the limitations imposed by Code Section 415. (b) The sum of the amount of the annual benefit which was accrued for the Participant or Beneficiary with respect to such Plan Year under (i) the terms of the Pension Plan Supplement as in effect on the last day of such Plan Year plus (ii) the terms of the Inland Steel Industries Supplemental Retirement Benefit Plan for Covered Employees. It is the intent of this Section 4.1 that the Special Retirement Benefit it described above shall be determined at all times in a manner consistent with the then current 401(a)(17) Earnings Limitation and the limitations imposed by Code Section 415. Accordingly, the determinations made pursuant to this Section 4.1 shall be based upon adjustments employed in determining the amount of the annual benefit it described above, and shall be subject to adjustments which reflect - 3 - the 401(a)(17) Limitation and the limitations imposed by Code Section 415 with respect to the computation of benefits under the Pension Plan Supplement. If a Participant receives a single sum distribution under the Pension Plan Supplement, but has elected another form of benefit under this Special Retirement Benefit Plan, the amount of the annual benefit payable under this Special Retirement Benefit Plan in each Limitation Year shall be the same as that payable in the year in which the single sum distribution is made. Except as provided in Section 5.3 hereof, no Special Retirement Benefit shall be payable to any Participant or his Beneficiaries hereunder unless at the time of the Participant's termination of employment with the Company and all Affiliates the Participant has been credited with at least five Years of Vesting Service under the Pension Plan Supplement. 4.2 Payment of Special Retirement Benefit. ------------------------------------- (a) Except as provided hereinafter, the Special Retirement Benefit which a Participant or Beneficiary is eligible to receive shall be paid by the Company at such time, in the same form and subject to the same conditions, as is the benefit paid to such Participant or Beneficiary under the Pension Plan Supplement. (b) (i) The Chairman of the Board of Directors of the Company (the "Chairman"), in his or her sole discretion and after considering the needs and circumstances of the Participant or Beneficiary concerned, may at any time elect to direct payment of the Special Retirement Benefit to the Participant or Beneficiary in any form of benefit provided under the Pension Plan Supplement, including a lump sum. (ii) A Participant or Beneficiary may in writing request payment of his or her Special Retirement Benefit in a form other than the form of benefit payment under the Pension Plan Supplement. After receiving such a request, the Chairman shall consider the request and the circumstances on which it is based and shall, in his or her sole discretion, approve or disapprove the request and inform the requesting Participant or Beneficiary of the decision. (iii) Any optional form of benefit shall be the actuarial equivalent of the benefit otherwise payable to the Participant or Beneficiary, determined by applying the appropriate interest rate and other actuarial assumptions then set forth in the Pension Plan Supplement. (c) The Company may purchase an annuity with respect to any portion of a Participant's accrued Special Retirement Benefit in full satisfaction thereof to the extent provided by paragraphs (a) through (i) of Section 4.4 and shall be obligated to purchase - 4 - an annuity or make a lump sum payment to the extent provided by paragraph (j) of Section 4.4. 4.3 Pension Plan Supplement Increase. -------------------------------- In the event the Pension Plan Supplement is amended to increase the benefit payable to participants or beneficiaries then receiving pensions under the Pension Plan Supplement, benefits payable under this Special Retirement Benefit Plan shall be adjusted or commenced accordingly for Participants or Beneficiaries; provided that no such adjustment shall be made if the Participant received a single sum distribution under this Special Retirement Benefit Plan; and provided, further, that no such adjustment shall be made with respect to any portion of a Participant's accrued Special Retirement Benefit for which an annuity has been purchased under Section 4.4. 4.4 Purchase of Annuities. --------------------- The Company may at any time, in the sole discretion of the Committee or the Company's Board of Directors, purchase one or more annuities with respect to all or any portion of the Special Retirement Benefit accrued under the Plan by any Participant, subject to the following: (a) The Company shall not be obligated to purchase an annuity for any Participant or for any portion of a Participant's accrued Special Retirement Benefit, notwithstanding the purchase of an annuity with respect to any other Participant or any other portion of the Participant's accrued Special Retirement Benefit. (b) The purchase of annuities under this Section 4.4 shall be limited to Special Retirement Benefits accrued by Participants who meet all of the following requirements: (i) completion of at least five years of Vesting Service under the Pension Plan Supplement; (ii) annual compensation in excess of $150,000; and (iii) attainment of age 55. (c) Any such annuity purchased with respect to any Participant's accrued Special Retirement Benefit shall be issued to and distributed to such Participant, who shall be the sole owner of such annuity and shall contain such terms not inconsistent with this Section 4.4 as the Committee shall determine in its sole discretion. - 5 - (d) Annuity payments to a Participant under any such annuity shall commence as of the date on which the Participant attains age 65 or the first day of the month thereafter; provided, however, that any such annuity may provide that, in the event of the Participant's death prior to attainment of age 65, benefits payable to any Beneficiary may commence as of any earlier date provided by the terms of the annuity. (e) The monthly benefit amount to be provided by any such annuity shall be such amount as the Committee, in its sole discretion, determines would provide, on an after-tax basis, an amount equal to the amount estimated to be the after-tax benefit to the Participant of monthly benefits payable by the Company commencing at age 65 under Section 4.2. Such determination shall be made by the Committee, in its sole discretion, based upon such rates and factors as the Committee, in its sole discretion, deems appropriate. No change in annuity benefits shall be required by reason of any subsequent change in such rates and factors; provided, however, that in determining the amount of any subsequent annuity purchased under this Section 4.4, the Committee may, in its sole discretion, take into account any change in such rates and factors and the benefits payable under any annuity previously purchased under this Section 4.4. Notwithstanding the foregoing, with the consent of the Participant, the Committee may substitute any form of fixed or variable annuity in lieu of the annuity otherwise provided by this paragraph (e), provided that such substitution does not result in a change in the cost of the annuity or the commencement date of the annuity payments. (f) The Company shall make a tax gross-up payment to any Participant for whom an annuity is purchased under this Section 4.4 in such amount as the Committee shall determine, in its sole discretion, would be necessary to make such Participant whole for federal, state and local income taxes attributable to the receipt of the annuity and the gross-up payment, based upon such tax rates as the Committee shall determine in its sole discretion. (g) To the extent that the Company has purchased an annuity under this Section 4.4 with respect to any portion of a Participant's accrued Special Retirement Benefit, such annuity and the tax gross-up payment under paragraph (f) above shall be in full satisfaction of all obligations of the Company to the Participant or any Beneficiary of the Participant attributable to such portion of the Participant's accrued Special Retirement Benefit. (h) A purchase of an annuity under this section 4.4 shall have no effect on the monthly benefits; payable to the Participant under Sections 4.1 and 4.3 prior to the Participant's attainment - 6 - of age 65. In the event of the Participant's death prior to attainment of age 65, the benefit payable to any Beneficiary of the Participant shall be determined solely on the basis of the monthly benefits which would otherwise have been payable to the Participant under the Plan prior to attainment of age 65 and taking into account the amount payable to the Beneficiary under the Pension Plan Supplement. (i) This Section 4.4 shall apply to Special Retirement Benefits accrued by any Participant under the Plan prior to October 1, 1993, only if such Participant consents (in such manner and at such time as the Committee may require) to such application and waives any right which the Participant might otherwise be entitled to assert under Section 5.2 by reason of the adoption and application to the Participant of this Section 4.4. (j) If an annuity has not been purchased in accordance with the foregoing provisions of this Section 4.4 with respect to any portion of the accrued Special Retirement Benefit payable after attainment of age 65 to a Participant who meets all of the requirements of paragraph (b) above and who has executed a consent and waiver in accordance with paragraph (i) above, then, except for any portion payable in the form of a lump sum in accordance with Section 4.2, upon such Participant's termination of employment with the Company and its affiliates, the Company shall, as soon as practicable thereafter, purchase an annuity for such portion in accordance with paragraphs (c) through (h) above. ARTICLE 5 5.1 Amendment to Conform with Law. ----------------------------- The Company may by amendment make such changes in, additions to, and substitutions in the provisions of this Special Retirement Benefit Plan, to take effect retroactively or otherwise, as deemed necessary or advisable for the purpose of conforming this Special Retirement Benefit Plan to any present or future law relating to plans of this or a similar nature, and to the administrative regulations and rulings promulgates thereunder. 5.2 Other Amendments and Termination. -------------------------------- The Company may amend or terminate this Special Retirement Benefit Plan at any time, without the consent of any Participant or Beneficiary. Notwithstanding the foregoing, this Special Retirement Benefit Plan shall not be amended or terminated so as to reduce or cancel the benefits which have accrued to it Participant or Beneficiary prior to the later of the date of adoption of the amendment or termination or the effective date thereof, and in the event of such - 7 - amendment or termination, any such accrued benefit hereunder shall not be reduced or cancelled; provided that, in the event the Pension Plan Supplement is terminated or curtailed with the result that pension payments to retired employees and survivor and contingent annuity payments to beneficiaries are discontinued or reduced, the Special Retirement Plan Benefit then being paid or in the future payable pursuant to the Special Retirement Benefit Plan shall similarly be discontinued or reduced in the same ratio as payments under the Pension Plan Supplement are discontinued or reduced. 5.3 Effect of Change in Control. --------------------------- (a) In the event of a Change in Control (as defined below), all benefits accrued as of the date such Change in Control hereunder shall become full (i.e., 100%) and irrevocably vested and shall become distributable to Participants (and Beneficiaries) at such time and in such manner provided herein pursuant to the provisions of the Plan as in effect on the day immediately preceding the date of such Change in Control. The Committee shall, in its sole discretion, determine whether assets equal in value to the aggregate of all accrued benefits under the Plan as of the date of such Change in Control shall be deposited by the Company with a bank or corporate trustee pursuant to one or more "rabbi trusts". (b) For purposes of this Section 5.3, a "Change in Control" shall be deemed to have occurred if: (i) any "person" (as such term is used in sections 13(d) and 14(d) of the Securities Exchange Act of 1934, as amended (the "Exchange Act")), other than (A) the Company or any of its subsidiaries, (B) a trustee or other fiduciary holding securities under an employee benefit plan of the Company or any of its subsidiaries, (C) an underwriter temporarily holding securities pursuant to an offering of such securities, or (D) a corporation owned, directly or indirectly, by the stockholders of the Company in substantially the same proportions as their ownership of stock of the Company, is or becomes the "beneficial owner" (as defined in Rule 13d-3 under the Exchange Act), directly or indirectly, of securities of the Company (not including in the securities beneficially owned by such person any securities acquired directly from the Company or its affiliates) representing 40% or more of the combined voting power of the Company's then outstanding securities; (ii) during any period of two consecutive years (not including any period prior to November 22, 1989), individuals who at the beginning of such period constitute the Board of Directors of the Company and any new director (other than a - 8 - director designated by a person who has entered into an agreement with the Company to effect a transaction described in clauses (i), (iii) or (iv) of this paragraph (b)), whose election by the Board or nomination for election by the Company's stockholders was approved by a vote of at least two-thirds (2/3) of the directors then still in office who either were directors at the beginning of the period or whose election or nomination for election was previously so approved, cease for any reason to constitute a majority thereof; (iii) the stockholders of the Company approve a merger or consolidation of the Company, with any other corporation, other than (A) a merger or consolidation which would result in the voting securities of the company outstanding immediately prior thereto continuing to represent (either by remaining outstanding or by being converted into voting securities of the surviving entity) in combination with the ownership of any trustee or other fiduciary holding securities under an employee benefit plan of the Company or any of its subsidiaries, at least 80% of the combined voting power of the voting securities of the Company or such surviving entity outstanding immediately after such merger or consolidation, or (B) a merger or consolidation effected to implement a recapitalization of the Company (or similar transaction) in which no person acquires more than 50% of the combined voting power of the Company's then outstanding securities; or (iv) the stockholders of the Company approve a plan of complete liquidation of the Company or an agreement for the sale or disposition by the Company of all or substantially all of the Company's assets. (c) The provisions of this Section 5.3 may not be amended after the date of a Change in Control without the written consent of a majority in both number and interest of the Participants in this Special Retirement Benefit Plan, other than those Participants who are both (i) not employed by the Company or a subsidiary as of the date of the Change in Control and (ii) not receiving nor could have commenced receiving benefits under the Pension Plan Supplement as of the date of the Change in Control, both immediately prior to the Change in Control and at the date of such amendment. 5.4. Manner and Form of Amendment or Termination. ------------------------------------------- Any amendment or termination of this Special Retirement Plan by the Company shall be made by action of the Board of Directors of the Company; provided, however, that (i) the Treasurer of the Company, and (ii) the Vice President-Human Resources of the Company (or such other person as designated by the Chairman of the Board of Directors - 9 - of the Company) are jointly authorized, by written action signed by both individuals, to adopt and place in effect any amendments to the Special Retirement Plan and any related documents as they jointly deem necessary or advisable: (a) to maintain the Plan and any related documents in compliance with applicable law; (b) to relieve administrative burdens with respect to those documents; or (c) to provide for other changes in the best interests of Participants and Beneficiaries, without the necessity for further action by the Board of Directors of the Company or subsequent ratification, provided, however, that any action or amendment that would have the effect of: (i) terminating the Special Retirement Plan; (ii) changing the structure of the Committee under which the Special Retirement Plan is administered; (iii) authorizing an Affiliate to adopt the Special Retirement Plan; (iv) materially changing the benefits under the Special Retirement Plan; or (v) increasing anticipated costs associated with the Special Retirement Plan by more than $15 million, except for changes to comply with applicable law; may not be made without approval or ratification by the Board of Directors of the Company. Notwithstanding the foregoing, either of the Board of Directors of the Company or the Chairman of the Board of Directors of the Company may from time to time authorize another officer or officers to adopt and place into effect (without the further need for Board authorization) amendments to the Special Retirement Plan and any related documents within the parameters set forth in subparagraphs (a) through (c) above and subject to the limitations in subparagraphs (i) through (v) above. If and to the extent the Board or the Chairman does so authorize other officer(s), that officer or those officers will have the powers described above in this Section 5.4. Any amendment or notice of termination of this Special Retirement Plan shall be furnished to the Committee by the Company. - 10 - 5.5 Notice of Amendment or Termination. ---------------------------------- The Committee shall notify Participants or Beneficiaries who are affected by any amendment or termination of this Special Retirement Benefit Plan within a reasonable time thereof. ARTICLE 6 6.1 No Right to Employment, etc. --------------------------- Neither the creation of this Special Retirement Benefit Plan nor anything contained herein shall be construed as giving any Participant hereunder or other employees of the Company or any subsidiary any right to remain in the employ of the Company or any subsidiary. 6.2 Successors and Assigns. ---------------------- All rights and obligations of this Plan shall inure to, and be binding upon the successors and assigns of the Company. 6.3 Inalienability. -------------- Except so far as may be contrary to the laws of any state having jurisdiction in the premises, a Participant or Beneficiary shall have no right to assign, transfer, hypothecate, encumber, commute or anticipate his interest in any payments under this Special Retirement Benefit Plan and such payments shall not in any way be subject to any legal process to levy upon or attach the same for payment of any claim against any Participant or Beneficiary. 6.4 Incompetency. ------------ If any Participant or Beneficiary is, in the opinion of the Committee, legally incapable of giving a valid receipt and discharge for any payment, the Committee may, at its option, direct that such payment or any part thereof be made to such person or persons who in the opinion of the Committee are caring for and supporting such Participant or Beneficiary, unless it has received due notice of claim from a duly appointed guardian or conservator of the estate of the Participant or Beneficiary. A payment so made will be a complete discharge of the obligations under this Special Retirement Benefit Plan to the extent of and as to that payment, and neither the Committee nor the Company will have any obligation regarding the application of the payment. - 11 - 6.5 Controlling Law. --------------- To the extent not preempted by the laws of the United States of America, the laws of the State of Illinois shall be the controlling state law in all matters relating to this Special Retirement Benefit Plan. 6.6 Severability. ------------ If any provisions of this Special Retirement Benefit Plan shall be held illegal or invalid for any reason, the illegality or invalidity shall not affect the remaining parts of this Special Retirement Benefit Plan, but this Special Retirement Benefit Plan shall be construed and enforced as if the illegal and invalid provisions never had been included herein. 6.7 Limitations on Provisions. ------------------------- The provisions of this Special Retirement Benefit Plan and any Special Retirement Benefits shall be limited as described herein. Any benefit payable under the Pension Plan Supplement shall be paid solely in accordance with the terms and provisions of the Pension Plan Supplement, as appropriate, and nothing in this Special Retirement Benefit Plan shall operate or be construed in any way to modify, amend, or affect the terms and provisions of the Pension Plan Supplement. 6.8 Gender and Number. ----------------- Whenever the context requires or permits, the gender and number of words shall be interchangeable. ARTICLE 7 7.1 Application for Benefits and Review Procedures. ---------------------------------------------- The Inland Steel Industries Claims Procedure set forth in the Pension Plan Supplement shall apply to any claim for benefits under this Special Retirement Benefit Plan. The "Plan Administrator" for purposes of applying such Claims Procedure to this Special Retirement Benefit Plan shall be the Committee. - 12 - EX-11 5 COMPUTATION OF EARNINGS PER SHARE Exhibit 11 ---------- INLAND STEEL INDUSTRIES, INC. AND SUBSIDIARY COMPANIES Computation of Earnings Per Share of Common Stock (Unaudited) - --------------------------------------------------------------------------------
Dollars and Shares in Millions (except per share data) ---------------------------------------- Three Months Ended Nine Months Ended September 30 September 30 ------------------- ------------------- 1997 1996 1997 1996 -------- -------- -------- -------- PRIMARY EARNINGS PER SHARE OF COMMON STOCK Shares of common stock Average shares outstanding 48.8 48.8 48.9 48.8 Dilutive effect of stock options - - - - ----- ----- ------ ----- 48.8 48.8 48.9 48.8 ===== ===== ====== ===== Income before extraordinary loss $30.3 $17.3 $101.6 $68.2 Extraordinary loss - 8.8 - 23.3 ----- ----- ------ ----- Net income 30.3 8.5 101.6 44.9 Dividends on preferred stock, net of tax benefit on dividends applicable to leveraged Series E Preferred Stock held by the ESOP 2.3 2.2 6.8 6.7 ----- ----- ------ ----- Net income applicable $28.0 $ 6.3 $ 94.8 $38.2 ===== ===== ====== ===== Primary earnings per share of common stock Before extraordinary loss $ .57 $ .31 $ 1.94 $1.26 Extraordinary loss on early retirement of debt - (.18) - (.48) ----- ----- ------ ----- Net income $ .57 $ .13 $ 1.94 $ .78 ===== ===== ====== ===== FULLY DILUTED EARNINGS PER SHARE OF COMMON STOCK Shares of common stock Average shares outstanding 48.8 48.8 48.9 48.8 Assumed conversion of Series A and leveraged Series E Preferred Stock 3.0 3.0 3.1 3.0 Dilutive effect of stock options .1 - .1 - ----- ----- ------ ----- 51.9 51.8 52.1 51.8 ===== ===== ====== ===== Income before extraordinary loss $30.3 $17.3 $101.6 $68.2 Extraordinary loss - 8.8 - 23.3 ----- ----- ------ ----- Net income 30.3 8.5 101.6 44.9 Dividends on antidilutive preferred stock .1 .1 .2 .3 Additional ESOP funding required on conversion of leveraged Series E Preferred Stock, net of tax benefit 2.0 2.0 6.0 5.9 ----- ----- ------ ----- Net income applicable $28.2 $ 6.4 $ 95.4 $38.7 ===== ===== ====== ===== Fully diluted earnings per share of common stock Before extraordinary loss $ .54 $ .29 $ 1.83 $1.20 Extraordinary loss on early retirement of debt - (.17) - (.45) ----- ----- ------ ----- Net income $ .54 $ .12 $ 1.83 $ .75 ===== ===== ====== =====
NOTE: In the three-month and nine-month periods ended September 30, 1997 and 1996, the assumed conversion of non-leveraged Series E Preferred Stock was antidilutive. In the three-month period ended September 30, 1997 and in the three-month and nine-month periods ended September 30, 1996, the assumed conversions of Series A Preferred Stock was antidilutive. -12- EX-27 6 FINANCIAL DATA SCHEDULE
5 THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM THE CONSOLIDATED STATEMENT OF OPERATIONS, THE CONSOLIDATED BALANCE SHEET, AND THE SUMMARY OF STOCKHOLDERS' EQUITY CONTAINED IN THE QUARTERLY REPORT ON FORM 10-Q TO WHICH THIS EXHIBIT IS ATTACHED AND IS QUALIFIED IN ITS ENTIRETY BY REFERENCE TO SUCH FINANCIAL SCHEDULES. 1,000 9-MOS DEC-31-1997 SEP-30-1997 132,800 0 600,400 24,200 603,400 1,345,500 4,632,600 3,012,800 3,646,100 602,700 742,100 0 3,100 50,600 828,800 3,646,100 3,812,400 3,813,600 3,426,500 3,427,500 0 0 47,300 175,800 67,900 107,900 0 0 0 101,600 1.94 1.83
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