-----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, V8euLjATnUBFoAU+dx3bUtNYGKlmU/p3xB7dqHWETizyAtIqheW8pYGmyrbMFQDW PODBK7vINrIr5VcjyLzqQw== 0000950131-99-004972.txt : 19990817 0000950131-99-004972.hdr.sgml : 19990817 ACCESSION NUMBER: 0000950131-99-004972 CONFORMED SUBMISSION TYPE: 10-Q PUBLIC DOCUMENT COUNT: 6 CONFORMED PERIOD OF REPORT: 19990630 FILED AS OF DATE: 19990816 FILER: COMPANY DATA: COMPANY CONFORMED NAME: RYERSON TULL INC /DE/ CENTRAL INDEX KEY: 0000790528 STANDARD INDUSTRIAL CLASSIFICATION: STEEL WORKS, BLAST FURNACES ROLLING MILLS (COKE OVENS) [3312] IRS NUMBER: 363425828 STATE OF INCORPORATION: DE FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: 10-Q SEC ACT: SEC FILE NUMBER: 001-09117 FILM NUMBER: 99691502 BUSINESS ADDRESS: STREET 1: 2621 WEST 15TH PLACE CITY: CHICAGO STATE: IL ZIP: 60608 BUSINESS PHONE: 7737622121 MAIL ADDRESS: STREET 1: 2621 WEST 15TH PLACE CITY: CHICAGO STATE: IL ZIP: 60608 FORMER COMPANY: FORMER CONFORMED NAME: INLAND STEEL INDUSTRIES INC /DE/ DATE OF NAME CHANGE: 19920703 10-Q 1 FORM 10-Q Second Quarter - 1999 UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 FORM 10-Q [X] Quarterly Report Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934 For the period ended June 30, 1999 or [ ] Transition Report Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934 For the transition period from __________ to __________ Commission file number 1-9117 I.R.S. Employer Identification Number 36-3425828 RYERSON TULL, INC. (a Delaware Corporation) 2621 West 15th Place Chicago, Illinois 60608 Telephone: (773) 762-2121 Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes X No ___ --- Indicate the number of shares outstanding of each of the issuer's classes of common stock, as of the latest practicable date: 24,952,126 shares of the Company's Common Stock ($1.00 par value per share) were outstanding as of August 9, 1999. PART I. FINANCIAL INFORMATION ---------------------------------- Item 1. Financial Statements RYERSON TULL, INC. AND SUBSIDIARY COMPANIES Consolidated Statement of Operations (Unaudited) ===============================================================================
Dollars in Millions (except per share data) ------------------------------------------- Three Months Ended Six Months Ended June 30 June 30 ------------------ --------------------- 1999 1998 1999 1998 ------ ------- -------- -------- NET SALES $708.1 $724.9 $1,399.5 $1,465.8 Cost of materials sold 543.1 558.2 1,076.9 1,131.8 ------ ------ -------- -------- GROSS PROFIT 165.0 166.7 322.6 334.0 Operating expenses 129.6 124.8 252.9 249.3 Depreciation and amortization 9.1 8.4 17.9 16.8 ------ ------ -------- -------- OPERATING PROFIT 26.3 33.5 51.8 67.9 Other revenue and expense, including interest income 0.2 5.1 0.6 10.8 Interest and other expense on debt (6.9) (9.5) (13.2) (19.2) ------ ------ -------- -------- INCOME FROM CONTINUING OPERATIONS BEFORE INCOME TAXES 19.6 29.1 39.2 59.5 PROVISION FOR INCOME TAXES 9.3 11.4 18.4 23.2 ------ ------ -------- -------- INCOME FROM CONTINUING OPERATIONS BEFORE MINORITY INTEREST 10.3 17.7 20.8 36.3 MINORITY INTEREST - 2.2 0.7 4.3 ------ ------ -------- -------- INCOME FROM CONTINUING OPERATIONS 10.3 15.5 20.1 32.0 DISCONTINUED OPERATIONS INLAND STEEL COMPANY Income from operations - 12.9 - 18.2 Gain on sale 17.3 - 17.3 - ------ ------ -------- -------- NET INCOME $ 27.6 $ 28.4 $ 37.4 $ 50.2 ====== ====== ======== ========
See notes to consolidated financial statements 1 RYERSON TULL, INC. AND SUBSIDIARY COMPANIES Consolidated Statement of Operations (Unaudited) ================================================================================
Dollars in Millions (except per share data) ------------------------------------------- Three Months Ended Six Months Ended June 30 June 30 ----------------- ------------------ 1999 1998 1999 1998 ------ ------- -------- -------- EARNINGS PER SHARE OF COMMON STOCK - ------------------ Basic: Income from continuing operations $ 0.41 $ 0.27 $ 0.83 $ 0.56 Inland Steel Company discontinued operations - 0.26 - 0.37 gain on sale 0.69 - 0.72 - ------ ------ -------- -------- Net income $ 1.10 $ 0.53 $ 1.55 $ 0.93 ====== ====== ======== ======== Diluted: Income from continuing operations $ 0.41 $ 0.26 $ 0.83 $ 0.53 Inland Steel Company discontinued operations - 0.25 - 0.35 gain on sale 0.69 - 0.72 - ------ ------ -------- -------- Net income $ 1.10 $ 0.51 $ 1.55 $ 0.88 ====== ====== ======== ======== STATEMENT OF COMPREHENSIVE INCOME - --------------------------------- NET INCOME $ 10.3 $ 15.5 $ 20.1 $ 32.0 ------ ------ -------- -------- OTHER COMPREHENSIVE INCOME: Foreign currency translation adjustments 0.6 - 0.3 - Minimum pension liability adjustment, net of tax of $9.5 - - 14.1 - ------ ------ -------- -------- COMPREHENSIVE INCOME $ 10.9 $ 15.5 $ 34.5 $ 32.0 ====== ====== ======== ======== OPERATING DATA - ---------------- SHIPMENTS (Tons in Thousands) 860.3 797.4 1,679.4 1,609.5
See notes to consolidated financial statements 2 RYERSON TULL, INC. AND SUBSIDIARY COMPANIES Consolidated Statement of Cash Flows (Unaudited) ================================================================================
Dollars in Millions ------------------- Six Months Ended June 30 ------------------ 1999 1998 ------ ------ OPERATING ACTIVITIES Net income $ 37.4 $ 50.2 ------ ------ Adjustments to reconcile net income to net cash provided from (used for) operating activities: Income from discontinued operations - (18.2) Depreciation and amortization 17.9 16.8 Deferred employee benefit cost 0.9 1.5 Deferred income taxes 9.0 1.5 Gain from the sale of Inland Steel Company (17.3) - Change in assets and liabilities, excluding effects of acquisitions: Receivables (27.4) (34.1) Inventories 22.6 (57.4) Other assets 2.5 - Accounts payable 9.9 2.4 Accrued liabilities (20.4) (8.5) Other deferred items 0.7 10.0 ------ ------ Net adjustments (1.6) (86.0) ------ ------ Net cash provided from (used for) operating activities 35.8 (35.8) ------ ------ INVESTING ACTIVITIES Acquisitions (Note 2) (66.0) (7.7) Capital expenditures (16.3) (15.4) Investments in and advances to joint ventures, net - (2.4) Proceeds from sales of assets 0.3 0.2 ------ ------ Net cash used for investing activities (82.0) (25.3) ------ ------ FINANCING ACTIVITIES Debt retirement - (5.3) Short-term borrowing 5.0 - Dividends paid (2.6) (10.3) Acquisition of treasury stock - (6.0) ------ ------ Net cash provided from (used for) financing activities 2.4 (21.6) ------ ------ Cash provided by discontinued operations - 36.5 ------ ------ Net decrease in cash and cash equivalents (43.8) (46.2) Cash and cash equivalents - beginning of year 52.5 97.0 ------ ------ Cash and cash equivalents - end of period $ 8.7 $ 50.8 ====== ====== SUPPLEMENTAL DISCLOSURES Cash paid during the period for: Interest $ 11.7 $ 18.3 Income taxes, net 13.4 32.2
See notes to consolidated financial statements 3 RYERSON TULL, INC. AND SUBSIDIARY COMPANIES Consolidated Balance Sheet (Unaudited) ================================================================================
Dollars in Millions ------------------- ASSETS June 30, 1999 December 31, 1998 - ------ ----------------- ------------------- (unaudited) CURRENT ASSETS Cash and cash equivalents $ 8.7 $ 52.5 Receivables 327.5 284.5 Inventories - principally at LIFO 511.9 500.4 Deferred income taxes 1.9 5.6 -------- -------- Total current assets 850.0 843.0 INVESTMENTS AND ADVANCES 32.7 34.9 PROPERTY, PLANT AND EQUIPMENT Valued on basis of cost $586.9 $583.8 Less accumulated depreciation 308.9 278.0 290.2 293.6 ------ ------ DEFERRED INCOME TAXES 78.7 76.9 INTANGIBLE PENSION ASSET 3.7 4.5 EXCESS OF COST OVER NET ASSETS ACQUIRED 108.0 78.2 OTHER ASSETS 10.6 12.8 -------- -------- Total Assets $1,361.7 $1,343.9 ======== ======== LIABILITIES AND STOCKHOLDERS' EQUITY - ------------------------------------ CURRENT LIABILITIES Accounts payable $177.8 $152.5 Accrued liabilities 83.3 118.5 Short-term borrowing 5.0 - -------- -------- Total current liabilities 266.1 271.0 LONG-TERM DEBT 259.3 257.0 DEFERRED EMPLOYEE BENEFITS AND OTHER 163.4 193.6 -------- -------- Total liabilities 688.8 721.6 MINORITY INTEREST - 58.7 STOCKHOLDERS' EQUITY (Schedule A) 672.9 563.6 -------- -------- Total Liabilities and Stockholders' Equity $1,361.7 $1,343.9 ======== ========
See notes to consolidated financial statements 4 RYERSON TULL, INC. AND SUBSIDIARY COMPANIES Notes to Consolidated Financial Statements (Unaudited) ================================================================================ NOTE 1/FINANCIAL STATEMENTS Results of operations for any interim period are not necessarily indicative of results of any other periods or for the year. The financial statements as of June 30, 1999 and for the three-month and six-month periods ended June 30, 1999 and 1998 are unaudited, but in the opinion of management include all adjustments, consisting of normal recurring adjustments, necessary for a fair presentation of results for such periods. These financial statements should be read in conjunction with the financial statements and related notes contained in the Annual Report on Form 10-K for the year ended December 31, 1998. NOTE 2/ACQUISITION On February 1, 1999, the Company completed the acquisition of Washington Specialty Metals Corporation, an eight-location metals service center specializing in value-added stainless steel. The Company purchased all of the outstanding stock of Washington Specialty Metals for approximately $70 million. The acquisition has been accounted for by the purchase method of accounting using preliminary valuations of assets and liabilities acquired. Goodwill arising from the acquisition will be amortized using the straight-line method over 25 years. NOTE 3/MERGER On February 25, 1999, pre-merger Ryerson Tull, Inc. (RT) became a wholly owned subsidiary of the Company by converting each share of RT Class A common stock into 0.61 share of Company common stock, and then the Company and RT merged. Upon consummation of the merger, the Company changed its name from Inland Steel Industries, Inc. to Ryerson Tull, Inc. The merger has been accounted for as a purchase for financial reporting purposes based on valuations of assets and liabilities of RT as they relate to the minority interest. 5 NOTE 4/EARNINGS PER SHARE
Dollars in Millions (except per share data) ------------------------------------------- Three Months Ended Six Months Ended June 30 June 30 ------------------ ---------------- 1999 1998 1999 1998 ----- ----- ----- ----- Basic earnings per share - ------------------------ Income from continuing operations $10.3 $15.5 $20.1 $32.0 Less preferred stock dividends .1 2.3 .1 4.6 ----- ----- ----- ----- Income from continuing operations available to common stockholders 10.2 13.2 20.0 27.4 Inland Steel Company - discontinued operations - 12.9 - 18.2 - gain on sale 17.3 - 17.3 - ----- ----- ----- ----- Net income available to common stockholders $27.5 $26.1 $37.3 $45.6 ===== ===== ===== ===== Average shares of common stock outstanding 25.0 48.9 24.0 49.0 ===== ===== ===== ===== Basic earnings per share From continuing operations $ .41 $ .27 $ .83 $ .56 Inland Steel Company - discontinued operations - .26 - .37 - gain on sale .69 - .72 - ----- ----- ----- ----- Net income $1.10 $ .53 $1.55 $ .93 ===== ===== ===== ===== Diluted earnings per share - -------------------------- Income from continuing operations available to common stockholders $10.2 $13.2 $20.0 $27.4 Effect of dilutive securities Series E leveraged preferred stock - 2.2 - 4.4 Additional ESOP funding required on conversion of Series E leveraged preferred stock, net of tax - (2.0) - (4.1) ----- ----- ----- ----- Income available to common stockholders and assumed conversions before discontinued operations 10.2 13.4 20.0 27.7 Inland Steel Company - discontinued operations - 12.9 - 18.2 - gain on sale 17.3 - 17.3 - ----- ----- ----- ----- Net income available to stockholders $27.5 $26.3 $37.3 $45.9 ===== ===== ===== ===== Average shares of common stock outstanding 25.0 48.9 24.0 49.0 Assumed conversion of Series E leverage preferred stock - 3.0 - 3.0 Dilutive effect of stock options .1 .1 .1 .1 ----- ----- ----- ----- Shares outstanding for diluted earnings per share calculation 25.1 52.0 24.1 52.1 ===== ===== ===== ===== Diluted earnings per share From continuing operations $ .41 $ .26 $ .83 $ .53 Inland Steel Company - discontinued operations - .25 - .35 - gain on sale .69 - .72 - ----- ----- ----- ----- Net income $1.10 $ .51 $1.55 $ .88 ===== ===== ===== =====
6 Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations Results of Operations - Comparison of Second Quarter 1999 to Second Quarter 1998 - -------------------------------------------------------------------------------- In the second quarter of 1999, the Company reported consolidated net income of $27.6 million, consisting of $10.3 million from continuing operations, and $17.3 million from an adjustment to taxes for the gain on the sale of Inland Steel Company, which was sold in 1998. Net income in the year-ago quarter was $28.4 million, consisting of $15.5 million from continuing operations and $12.9 million from discontinued operations related to Inland Steel Company. Included in the second quarter 1999 results was a $3.6 million pretax charge, or $1.9 million after tax, for the costs associated with closing the Houston service center. Second quarter 1999 net sales of $708 million declined 2 percent from the year- ago quarter. The 8 percent increase in tons shipped was more than offset by a 10 percent decrease in average selling price from a year ago. In spite of the improvement in gross margin percentage, gross profit per ton declined to $192 in the second quarter of 1999 from $209 in the year-ago quarter due to lower selling prices. Expenses, defined as operating expenses, depreciation and amortization, were reduced to $161 per ton from $167 per ton in the second quarter of 1998. Excluding the Houston closure cost, second quarter expenses per ton of $157 were $10 less than the year-ago level. As a result of the lower metal prices and gross profit and the Houston plant closure cost, operating profit of $26.3 million for the quarter was $7.2 million below the year-ago level of 33.5 million. Results of Operations - Comparison of First Six Months of 1999 to First Six - --------------------------------------------------------------------------- Months of 1998 - -------------- For the first six months of 1999, the Company reported consolidated net income of $37.4 million, consisting of $20.1 million from continuing operations, and $17.3 million from an adjustment to taxes for the gain on the sale of Inland Steel Company. Net income in the year-ago period was $50.2 million, consisting of $32.0 million from continuing operations and $18.2 million from discontinued operations. Included in the 1999 results was a $3.6 million pretax charge, or $1.9 million after tax, for the costs associated with closing the Houston service center. Net sales of $1.4 billion were down 4.5 percent from the year-ago level in spite of a 4.4 percent increase in tons shipped, reflecting the impact of declining prices. Operating profit decreased 24% to $51.8 million in the first six months of 1999 from $67.9 million recorded in the same period a year ago. Liquidity and Financing - ----------------------- The Company had cash and cash equivalents at June 30, 1999 of $8.7 million compared to $52.5 million at December 31, 1998. At March 31, 1999, the Company had outstanding borrowings of $5 million under the $250 million bank revolving credit agreement. On February 1, 1999, the Company completed the purchase of Washington Specialty Metals for approximately $70 million in cash. This purchase was funded through borrowings under the bank revolving credit agreement and cash on hand. Effective with the merger of pre-merger Ryerson Tull Inc., with Inland Steel Industries, Inc., on February 25, 1999 (the "RT Merger"), the Company's line of credit with pre-merger Ryerson Tull was eliminated. The Company also assumed the $250 million committed bank revolving credit agreement and the $250 million of Ryerson Tull Notes ("RT Notes"). The banks waived certain provisions of the revolving credit agreement to facilitate the RT Merger and the Indenture Trustee executed the First Supplemental Indenture reflecting the Company's assumption of the RT Notes. Restrictions contained in the bank facilities and the RT Notes indenture prohibit the Company from, among other things, declaring or paying dividends on Company common stock under certain conditions. Considering these restrictions, at June 30, 1999, up to $111 million of common dividends could have been paid. 7 Year 2000 - --------- Readiness Disclosure - -------------------- The Company began planning to address Year 2000 issues in 1996. As part of this process, the Company established a Year 2000 panel with representatives from all business units. This panel has monitored the progress of the Company's Year 2000 compliance and met regularly throughout 1998. In 1999, Year 2000 activities are related to contingency planning. Therefore, the Company executive staff and the business unit presidents now serve as the monitoring and advisory board for Year 2000 matters. This ensures that the top management of the Company is actively involved in the issue and is directing the final stages of preparation. During 1998, Company personnel and outside consultants identified and corrected problems that may have interfered with Year 2000 readiness. The primary focus was on the Company's internal computer systems. An assessment of the majority of the Company's hardware, software and procedures was completed in 1997. This assessment identified 40 major systems areas. These were further broken down into upgrade units. Each of the units was corrected to be Year 2000 compliant, tested and installed. Most unit testing was completed by the end of 1998. A few items carried over into the first quarter of 1999. Also, the Company successfully completed integrated systems tests during the first quarter of 1999. The Company has performed an assessment of microprocessors embedded in its equipment, distribution facilities and corporate offices. Based on vendor representations and internal testing, the Company believes that it has no Year 2000 compliance issues in this area. As of June 1999, the Company has addressed all Year 2000 issues that are critical to its operations and has a high degree of confidence in its own internal Year 2000 readiness. Furthermore, the Company has identified a number of suppliers whose Year 2000 compliance may be critical to the Company. These suppliers include metal suppliers, outside processing facilities and contract carriers. The Company has completed surveys of the majority of the identified critical suppliers as to their Year 2000 compliance. The Company expects to continue follow-up surveys as it deems appropriate during the balance of 1999. The Company will use the results of these surveys to aid in contingency planning. The Costs to Address the Company's Year 2000 Issues - --------------------------------------------------- The Company has estimated that expenses incurred through the end of 1998 totaled approximately $5.5 million. Currently, it is expected that the Company will spend $1.0 million in 1999 to bring its systems into Year 2000 compliance. This estimate is based on information currently available and may need to be increased as more information becomes available and as compliance implementation and contingency planning proceed. The Risks of the Company's Year 2000 Issues - ------------------------------------------- Although the Company believes it is unlikely, it is possible the Company could experience an adverse impact that could be material to the results of operations or the financial position of the Company as a result of potential failure by major customers or suppliers, or an oversight in the Company's effort, to address Year 2000 issues. In addition, if the suppliers of necessary telecommunications, energy and transportation needs fail to provide their services, such failure could also have an adverse impact on the results of operations or financial position of the Company. The Company's Contingency Plan - ------------------------------ The Company has begun the creation of contingency plans in the event all systems and critical suppliers have not been made Year 2000 compliant. 8 PART II. OTHER INFORMATION --------------------------- Item 4. Submission of Matters to a Vote of Security Holders (a) The Company held its annual meeting on April 28, 1999. (b) See the response to Item 4(c) below. (c) The election of eight nominees for director of the Company was voted upon at the meeting. The number of affirmative votes and the number of votes withheld with respect to such approval is as follows:
NOMINEE AFFIRMATIVE VOTES VOTES WITHHELD ------- ----------------- -------------- Jameson A. Baxter 21,101,908 178,113 Richard G. Cline 21,113,639 166,382 Gary L. Crittenden 21,101,435 178,586 James A. Henderson 21,111,154 168,867 Gregory P. Josefowicz 21,106,296 173,725 Neil S. Novich 21,107,068 172,953 Jerry K. Pearlman 21,107,281 172,740 Ronald L. Thompson 21,108,759 171,262
The results of the voting for the election of PricewaterhouseCoopers LLP to audit the accounts of the Company and its subsidiaries for 1999 are as follows: FOR AGAINST ABSTAIN --- ------- ------- 21,203,363 46,281 30,377 The results of the voting for approval of the Ryerson Tull 1999 Incentive Stock Plan (the "1999 Plan") are as follows:
FOR AGAINST ABSTAIN BROKER NON-VOTES --- ------- ------- ---------------- 16,734,036 1,952,701 98,735 2,494,549
There were no matters voted upon at the meeting, other than approval of the 1999 Plan, to which broker non-votes applied. (d) Not applicable. 9 Item 6. Exhibits and Reports on Form 8-K (a) Exhibits. The exhibits required to be filed by Item 601 of Regulation S-K are listed in the "Exhibit Index," which is attached hereto and incorporated by reference herein. (b) Reports on Form 8-K. On May 27, 1999, the Company filed a Current Report on Form 8-K, reporting, under Item 5--Other Events, that Ispat Inland Inc. notified the Company by letter dated May 11, 1999 that it views the civil lawsuit filed against Ispat in Baton Rouge, Louisiana as implicating contractual rights against the Company including, without limitiation, Ispat's indemnification rights under the Merger Agreement among Ispat International N.V., Inland Merger Sub, Inc., the Company (f/k/a Inland Steel Industries, Inc.) and Ispat Inland Inc. 10 SIGNATURE --------- Pursuant to the requirements of the Securities Exchange Act of 1934, the Company has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized. RYERSON TULL, INC. By /s/ Lily L. May ------------------- Lily L. May Controller and Principal Accounting Officer Date: August 13, 1999 11 Part I -- Schedule A RYERSON TULL, INC. AND SUBSIDIARY COMPANIES SUMMARY OF STOCKHOLDERS' EQUITY ================================================================================
Dollars in Millions ------------------- June 30, 1999 December 31, 1998 --------------- ------------------- (unaudited) STOCKHOLDERS' EQUITY - -------------------- Series A preferred stock ($1 par value) - 78,099 shares and 78,249 shares issued and outstanding as of June 30, 1999 and $ 0.1 $ 0.1 December 31, 1998, respectively Common stock ($1 par value) - 50,556,350 shares issued as of June 30, 1999 and December 31, 1998 50.6 50.6 Capital in excess of par value 863.4 897.2 Retained earnings (accumulated deficit) Balance beginning of year $491.2 $(45.6) Net income 37.4 550.9 Dividends Series A preferred stock - $1.20 per share in 1999 and $2.40 per share in 1998 (0.1) (0.2) Series E preferred stock - $3.523 per share in 1998 - (8.8) Income tax benefit - Series E dividend - 2.1 Common Stock - $ .10 per share in 1999 and $ .20 per share in 1998 (2.5) 526.0 (7.2) 491.2 ------ ------ Restricted stock awards (0.5) - Treasury stock, at cost - 25,598,330 as of June 30, 1999 and 28,799,249 as of December 31, 1998 (750.9) (845.3) Accumulated other comprehensive income (15.8) (30.2) ------ ------ Total Stockholders' Equity $ 672.9 $ 563.6 ======= =======
12 EXHIBIT INDEX
Exhibit Number Description - ------ ----------- 2.1 Agreement and Plan of Merger, dated as of May 27, 1998 between Ispat International, N.V., Inland Steel Industries, Inc., Inland Merger Sub, Inc. and Inland Steel Company. (Filed as Exhibit 2.1 to Inland Steel Company's Current Report on Form 8-K filed on June 9, 1998 (File No. 1-2438), and incorporated by reference herein.) 2.2 Amendment to Agreement and Plan of Merger dated as of July 16, 1998 between Ispat International, N.V., Inland Steel Industries, Inc., Inland Merger Sub, Inc. and Inland Steel Company. (Filed as Exhibit 2.2 to the Company's Current Report on Form 8-K filed on July 20, 1998 (File No. 1-9117), and incorporated by reference herein.) 3.1 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 (File No. 1-9117), and incorporated by reference herein.) 3.2 By-Laws, as amended. (Filed as Exhibit 3.2 to the Company's Annual Report on Form 10-K for the year ended December 31, 1998 (File No. 1-9117), and incorporated by reference herein.) 4.1 Certificate of Designations, Preferences and Rights of Series A $2.40 Cumulative Convertible Preferred Stock of 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 (File No. 1-2438), and incorporated by reference herein.) 4.2 Certificate of Designation, Preferences and Rights of Series D Junior Participating Preferred Stock of 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 (File No. 1-9117), and incorporated by reference herein.) 4.3 Rights Agreement, dated as of November 25, 1997, as amended and restated as of December 10, 1998, between the Company and Harris Trust and Savings Bank, as Rights Agent. (Filed as Exhibit 4-1 to the Company's amended Registration Statement on Form 8-A/A filed on January 15, 1999 (File No. 1-9117), and incorporated by reference herein.) 4.4 Indenture, dated as of July 1, 1996, between Pre-merger Ryerson Tull and The Bank of New York. (Filed as Exhibit 4.1 to Pre-merger Ryerson Tull's Quarterly Report on Form 10-Q for the quarter ended June 30, 1996 (File No. 1-11767), and incorporated by reference herein.) 4.5 First Supplemental Indenture, dated as of February 25, 1999, between the Company and The Bank of New York. (Filed as Exhibit 4.5 to the Company's Annual Report on Form 10-K for the year ended December 31, 1998 (File No. 1-9117), and incorporated by reference herein.) 4.6 Specimen of 8% Notes due July 15, 2001. (Filed as Exhibit 4.6 to the Company's Annual Report for the year ended December 31, 1998 (File No. 1-9117), and incorporated by reference herein.) 4.7 Specimen of 9% Notes due July 15, 2006. (Filed as Exhibit 4.7 to the Company's Annual Report for the year ended December 31, 1998 (File No. 1-9117), and incorporated by reference herein.) [The registrant hereby agrees to provide a copy of any other agreement relating to long-term debt at the request of the Commission.] 10.1* Inland Steel Industries, Inc. Annual Incentive Plan, as amended. (Filed as Exhibit 10.A to the Company's Quarterly Report on Form 10-Q for the quarter ended September 30, 1995 (File No. 1-9117), and incorporated by reference herein.) 10.2* Ryerson Tull Annual Incentive Plan. (Filed as Exhibit 10.2 to Pre-merger Ryerson Tull's Quarterly Report on Form 10-Q for the quarter ended September 30, 1997 (File No. 1-11767), and incorporated by reference herein.) 10.3* Ryerson Tull 1996 Incentive Stock Plan, as amended. (Filed as Exhibit 10.D to the Company's Annual Report on Form 10-K for the year ended December 31, 1997 (File No. 1-9117), and incorporated by reference herein.)
Exhibit Number Description - ------- ----------- 10.4* Ryerson Tull 1999 Incentive Stock Plan, as amended................................................. 10.5* Ryerson Tull 1995 Incentive Stock Plan, as amended. (Filed as Exhibit 10.E to the Company's Annual Report on Form 10-K for the year ended December 31, 1997 (File No. 1-9117), and incorporated by reference herein.) 10.6* Ryerson Tull 1992 Incentive Stock Plan, as amended. (Filed as Exhibit 10.C to the Company's Quarterly Report on Form 10-Q for the quarter ended June 30, 1995 (File No. 1-9117), and Incorporated by reference herein.) 10.7* Ryerson Tull 1988 Incentive Stock Plan, as amended. (Filed as Exhibit 10.B to the Company's Quarterly Report on Form 10-Q for the quarter ended June 30, 1995 (File No. 1-9117), and incorporated by reference herein.) 10.8* Inland 1992 Stock Plan for Non-Employee Directors, as amended. (Filed as Exhibit 10.A to the Company's Quarterly Report on Form 10-Q for the quarter ended June 30, 1998 (File No. 1-9117), and incorporated by reference herein.) 10.9* Ryerson Tull Supplemental Retirement Plan for Covered Employees, as amended. (Filed as Exhibit 10.1 to Pre-merger Ryerson Tull's Form 10-Q for the quarter ended September 30, 1997 (File No. 1-11767), and incorporated by reference herein.) 10.10* Ryerson Tull Nonqualified Savings Plan, effective January 1, 1998. (Filed as Exhibit 10.S.(2) to the Company's Annual Report on Form 10-K for the fiscal year ended December 31, 1997 (File No. 1-9117), and incorporated by reference herein.) 10.11* Inland Steel Industries Deferred Compensation Plan for Directors, as amended. (Filed as Exhibit 10-L to the Company's Annual Report on Form 10-K for the fiscal year ended December 31, 1992 (File No. 1-9117), and incorporated by reference herein.) 10.12* Outside Directors Accident Insurance Policy........................................................ 10.13* Ryerson Tull Directors' 1999 Stock Option Plan. (Filed as Exhibit 10.19 to the Company's Annual Report on Form 10-K for the year ended December 31, 1998 (File No. 1-9117), and incorporated by reference herein.) 10.14* Ryerson Tull Directors' Compensation Plan, as amended. (Filed as Exhibit 10.20 to the Company's Annual Report on Form 10-K for the year ended December 31, 1998 (File No. 1-9117), and incorporated by reference herein.). 10.15* Form of Severance Agreement, dated January 28, 1998, between the Company and each of the four executive officers of the Company identified on the exhibit relating to terms and conditions of termination of employment following a change in control of the Company. (Filed as Exhibit 10.R to the Company's Annual Report on Form 10-K for the fiscal year ended December 31, 1997 (File No. 1-9117), and incorporated by reference herein.)
Exhibit Number Description - ------- ----------- 10.16* Amendment dated November 6, 1998 to the Severance Agreement dated January 28, 1998 referred to in Exhibit 10.21 above between the Company and Jay M. Gratz. (Filed as Exhibit 10.23 to the Company's Annual Report on Form 10-K for the year ended December 31, 1998 (File No. 1-9117), and incorporated by reference herein.). 10.17* Amendment dated February 19, 1999 to the Severance Agreement dated January 28, 1998 referred to in Exhibit 10.21 above between the Company and George A. Ranney, Jr. (Filed as Exhibit 10.24 to the Company's Annual Report on Form 10-K for the year ended December 31, 1998 (File No. 1-9117), and incorporated by reference herein.). 10.18* Form of Change in Control Agreement between the Company and the parties listed on the schedule thereto. (Filed as Exhibit 10.25 to the Company's Annual Report on Form 10-K for the year ended December 31, 1998 (File No. 1-9117), and incorporated by reference herein.). 10.19* Form of Change in Control Agreement between the Company and the party listed on the schedule thereto. (Filed as Exhibit 10.26 to the Company's Annual Report on Form 10-K for the year ended December 31, 1998 (File No. 1-9117), and is incorporated by reference herein.). 10.20* Employment Agreement dated as of August 18, 1995 between the Company and George A. Ranney, Jr. (Filed as Exhibit 10.X to the Company's Annual Report on Form 10-K for the fiscal year ended December 31, 1997 (File No. 1-9117), and incorporated by reference herein.) 10.21* Employment Agreement dated June 1, 1999 between the Company and Jay M. Gratz........................... 10.22* Employment Agreement dated June 1, 1999 between the Company and Gary J. Niederpruem..................... 27 Financial Data Schedule
* Management contract or compensatory plan or arrangement required to be filed as an exhibit to the Company's Annual Report on Form 10-K. EX-10.4 2 RYERSON TULL 1999 INCENTIVE STOCK PLAN Exhibit 10.4 RYERSON TULL 1999 INCENTIVE STOCK PLAN (as amended through June 23, 1999) 1. Purpose. The purpose of the Ryerson Tull 1999 Incentive Stock Plan (the "Plan") is to attract and retain outstanding individuals as officers and key employees of Ryerson Tull, Inc. (the "Company") and its subsidiaries, and to furnish incentives to such individuals through rewards based upon the ownership and performance of the Common Stock (as defined in Section 3). To this end, the Committee hereinafter designated and, in certain circumstances, the Chairman of the Board of the Company (the "Chairman") or the President of the Company, may grant stock options, stock appreciation rights, restricted stock awards, and performance awards, or combinations thereof, to officers and other key employees of the Company and its subsidiaries, on the terms and subject to the conditions set forth in this Plan. As used in the Plan, the term "RT" shall mean, collectively, the Company and its affiliates, and the term "subsidiary" shall mean (a) any corporation of which the Company owns or controls, directly or indirectly, 50% or more of the outstanding shares of capital stock entitled to vote for the election of directors or (b) any partnership, joint venture, or other business entity in respect of which the Company, directly or indirectly, has comparable ownership or control. 2. Participants. Participants in the Plan shall consist of: (a) such officers and other key employees of the Company and its subsidiaries as the Committee in its sole discretion may select from time to time to receive stock options, stock appreciation rights, restricted stock awards or performance awards, either singly or in combination, as the Committee may determine in its sole discretion; and (b) if the Committee authorizes the Chairman or the President to make grants or awards of stock options, stock appreciation rights, restricted stock or performance awards, such employees of the Company and its subsidiaries who are not subject to section 16(a) of the Exchange Act as the Chairman or the President shall determine in his or her sole discretion after consultation with the Vice President-Human Resources of the Company. Any director of the Company or any of its subsidiaries who is not also an employee of the Company or any of its subsidiaries shall not be eligible to receive stock options, stock appreciation rights, restricted stock awards or performance awards under the Plan. Notwithstanding any other provision of the Plan, without the approval of the Company's stockholders, this Section 2 shall not be amended to materially change the class or classes of employees eligible to participate in the Plan. 3. Shares Reserved under the Plan. Subject to adjustment pursuant to the provisions of Section 11 of the Plan, the maximum number of shares of Common Stock, $1.00 par value per share, of the Company ("Common Stock") which may be issued pursuant to grants or awards made under the Plan shall not exceed the sum of (1) 1,000,000, and (2) the total number of shares available for issuance under the Inland 1992 Incentive Stock Plan and the Inland 1995 Incentive Stock Plan (collectively, the "Prior Plans") as of the effective date of the Plan. No more than 335,000 shares of Common Stock shall be issued pursuant to restricted stock awards and performance awards under the Plan. Notwithstanding any other provision of the Plan, without the approval of the Company's stockholders, this Section 3 shall not be amended to materially increase the number of shares reserved for issuance under the Plan. The following restrictions shall apply to all grants and awards under the Plan other than grants and awards which, by their terms, are not intended to comply with the "Performance-Based Exception" (defined below in this Section 3): (a) the maximum aggregate number of shares of Common Stock that may be granted or awarded under the Plan to any participant under the Plan during any three year period shall be 700,000; and (b) the maximum aggregate cash payout with respect to grants or awards under the Plan in any fiscal year of the Company to any Named Executive Officer (defined below in this Section 3) shall be $1,000,000. For purposes of the Plan, "Named Executive Officer" shall mean a participant who is one of the group of "covered employees" as defined in the regulations promulgated under section 162(m) of the Internal Revenue Code of 1986, as amended (the "Code") or any successor statute, and "Performance-Based Exception" shall mean the performance-based exception from the deductibility limitations as set forth in Section 162(m) of the Code. Except to the extent otherwise determined by the Committee, any shares of Common Stock subject to grants or awards under the Plan that terminate by expiration, cancellation or otherwise without the issuance of such shares (including shares underlying a stock appreciation right exercised for stock, to the extent that such underlying shares are not issued), that are settled in cash (to the extent so settled), or, in the case of restricted stock awards, that terminate without vesting, shall become available for future grants and awards under the Plan. Shares of Common Stock to be issued pursuant to grants or awards under the Plan may be authorized and unissued shares of Common Stock, treasury Common Stock, or any combination thereof. 4. Administration of the Plan. The Plan shall be administered by the Compensation Committee (the "Committee") of the Board of Directors of the Company (the "Board"), which shall consist of two or more persons who constitute "non-employee directors" within the meaning of Rule 16b-3 promulgated under the Securities Exchange Act of 1934, as amended (the "Exchange Act"), and "outside directors" within the meaning of Treas. Reg. (S) 1.162-27(e)(3). Subject to the provisions of the Plan, the Committee shall have authority: (a) to determine which employees of the Company and its subsidiaries shall be eligible for participation in the Plan; (b) to select employees to receive 2 grants under the Plan; (c) to determine the form of grant, whether as a stock option, stock appreciation right, restricted stock award, performance award or a combination thereof, the number of shares of Common Stock or units subject to the grant, the time and conditions of exercise or vesting, the fair market value of the Common Stock for purposes of the Plan, and all other terms and conditions of any grant and to amend such awards or accelerate the time of exercise or vesting thereof; and (d) to prescribe the form of agreement, certificate or other instrument evidencing the grant. Notwithstanding the foregoing, the Committee, subject to the terms and conditions of the Plan, may delegate to the Chairman or the President of the Company, if such individual is then serving as a member of the Board, the authority to act as a subcommittee of the Committee for purposes of making grants or awards of stock options, stock appreciation rights, restricted stock or performance awards, not to exceed such number of shares as the Committee shall designate annually, to such employees of the Company and its subsidiaries who are not subject to section 16(a) of the Exchange Act as the Chairman or the President shall determine in his or her sole discretion after consultation with the Vice President-Human Resources of the Company, and the Chairman or the President, as applicable, shall have the authority and duties of the Committee with respect to such grants. The Committee shall also have authority to interpret the Plan and to establish, amend and rescind rules and regulations for the administration of the Plan, and all such interpretations, rules and regulations shall be conclusive and binding on all persons. Notwithstanding any other provision of the Plan, without the approval of the Company's stockholders, in no event shall the Committee (1) reprice any stock options awarded under the Plan by lowering the option price of a previously granted stock option or by cancellation of outstanding stock options with subsequent replacement or regrant of stock options with lower option prices, (2) materially modify the terms of any restricted stock award under the Plan or any performance award under the Plan that consists of Common Stock, including the lapse or waiver of restrictions with respect to such awards, except (i) in the case of death, physical or mental incapacity, retirement on or after the normal retirement date provided for in and pursuant to any pension plan of the Company or any affiliate of the Company in effect at the time of such retirement, early retirement (with the consent of the Committee) provided for in and pursuant to any such pension plan, or a Change in Control (as defined in paragraph 12(b)), or (ii) to the extent the shares of Common Stock which are subject to such modified awards do not exceed, in the aggregate, 10 percent of the shares of Common Stock reserved for issuance under the Plan, or (3) make any form of grant under the Plan that is not provided for herein. 5. Effective Date of Plan. The Plan shall be effective upon approval by the stockholder(s) of the Company. 6. Stock Options. (a) Grants. Subject to the terms of the Plan, options to purchase shares of Common Stock, including "incentive stock options" within the meaning of Section 422 of the Code, may be granted from time to time to such officers and other key employees of the Company and its subsidiaries as may be selected by the Committee. Each grant of an option under the Plan may 3 designate whether the option is intended to be an incentive stock option or a "nonqualified" stock option. Any option not so designated shall be deemed to be a "nonqualified" stock option. (b) Terms of Options. An option shall be exercisable in whole or in such installments and at such times as may be determined by the Committee in its sole discretion, provided that no option shall be exercisable more than ten years after the date of grant. The per share option price shall not be less than the greater of par value or 100% of the fair market value of a share of Common Stock on the date the option is granted. Upon exercise, the option price may be paid in cash, in shares of Common Stock having a fair market value equal to the option price which have been owned by the Participant for at least 6 months prior thereto, or in a combination thereof. The Committee may also allow the cashless exercise of options by holders thereof, as permitted under regulations promulgated by the Board of Governors of the Federal Reserve System, subject to any applicable restrictions necessary to comply with rules adopted by the Security and Exchange Commission, and the exercise of options by holders thereof by any other means that the Committee determines to be consistent with the Plan's purpose and applicable law, including loans, with or without interest, made by the Company to the holder thereof. (c) Restrictions Relating to Incentive Stock Options. To the extent required by the Code, the aggregate fair market value (determined as of the time the option is granted) of the Common Stock with respect to which incentive stock options are exercisable for the first time by an employee during any calendar year (under the Plan or any other plan of the Company or any of its subsidiaries) shall not exceed $100,000. (d) Termination of Employment. If an optionee ceases to be employed by the Company or any of its affiliates by reason of (i) death, (ii) physical or mental incapacity, (iii) retirement on or after the normal retirement date provided for in and pursuant to any pension plan of the Company or any affiliate of the Company in effect at the time of such retirement, or (iv) early retirement (with the consent of the Committee) provided for in and pursuant to any such pension plan, any option held by such optionee may be exercised, with respect to all or any part of the Common Stock as to which such option was not theretofore exercised (whether or not such option was otherwise then exercisable), for such period from and after the date of such cessation of employment (not extending, however, beyond the date of expiration of such option) as the Committee may determine at the time of the grant or at any time thereafter. If an optionee ceases to be employed by the Company and any of its affiliates for any reason other than a reason set forth in the immediately preceding sentence, any option granted to such optionee may be exercised for a period ending on the 30th day following the date of such cessation of employment or the date of expiration of such option, whichever first occurs, but only with respect to that number of shares of Common Stock for which such option was exercisable immediately prior to the date of cessation of employment, except as otherwise determined by the Committee at the time of grant or any time thereafter. (e) Additional Terms and Conditions. The agreement or instrument evidencing the grant of a stock option may contain such other terms, provisions and conditions not inconsistent with the Plan as may be determined by the Committee in its sole discretion. 4 7. Stock Appreciation Rights. (a) Grants. Subject to the terms of the Plan, rights entitling the grantee to receive cash or shares of Common Stock having a fair market value equal to the appreciation in market value of a stated number of shares of such Common Stock from the date of the grant to the date of exercise, or, in the case of rights granted in tandem with or by reference to a stock option granted prior to the grant of such rights, from the date of grant of such related stock option to the date of exercise, may be granted from time to time to such officers and other key employees of the Company and its affiliates as may be selected by the Committee. (b) Terms of Grant. Such rights may be granted in tandem with or by reference to a related stock option, in which event the grantee may elect to exercise either the stock option or the right, but not both, as to the shares subject to the stock option and the right, or the right may be granted independently of a stock option. Rights granted in tandem with or by reference to a related stock option shall, except as provided at the time of grant, be exercisable to the extent, and only to the extent, that the related option is exercisable. Rights granted independently of a stock option shall be exercisable in whole or in such installments and at such times as may be determined by the Committee, provided that no right shall be exercisable more than ten years after the date of grant. Further, in the event that any employee to whom rights are granted independently of a stock option ceases to be an employee of the Company and its affiliates, such rights shall be exercisable only to the extent and upon the conditions that stock options are exercisable in accordance with the provisions of paragraph (d) of Section 6 of the Plan. The Committee may at the time of the grant or at any time thereafter impose such additional terms and conditions on the exercise of stock appreciation rights as it deems necessary or desirable for any reason, including for compliance with Section 16(a) or Section 16(b) of the Exchange Act and the rules and regulations thereunder. (c) Payment on Exercise. Upon exercise of a stock appreciation right, the holder shall be paid the excess of the then fair market value of the number of shares of Common Stock to which the right relates over the fair market value of such number of shares at the date of grant of the right or of the related stock option, as the case may be. Such excess shall be paid in cash or in shares of Common Stock having a fair market value equal to such excess, or in such combination thereof, as may be provided in the grant of such right (which may permit the holder to elect between cash and Common Stock or to elect a combination thereof), or, if no such provision is made in the grant, as the Committee shall determine upon exercise of the right, provided, in any event, that the holder shall be paid cash in lieu of any fractional share of Common Stock to which such holder would otherwise be entitled. (d) Additional Terms and Conditions. The agreement or instrument evidencing the grant of stock appreciation rights may contain such other terms, provisions and conditions not inconsistent with the Plan as may be determined by the Committee in its sole discretion. 5 8. Restricted Stock Awards. Subject to the terms of the Plan, restricted stock awards consisting of shares of Common Stock may be made from time to time to such officers and other key employees of the Company and its affiliates as may be selected by the Committee, provided that any such employee (except an employee whose terms of employment include the granting of a restricted stock award) shall have been employed by the Company or any of its affiliates for at least six months. Such awards shall be contingent on the employee's continuing employment with the Company or its affiliates for a period to be specified in the award (which shall not be more than ten years from the date of award) and shall be subject to such additional terms and conditions as the Committee in its sole discretion deems appropriate, including, but not by way of limitation, requirements relating to satisfaction of performance measures and restrictions on the sale or other disposition of such shares during the restriction period. Except as otherwise determined by the Committee at the time of the award, the holder of a restricted stock award shall have the right to vote the restricted shares and to receive dividends thereon, unless and until such shares are forfeited. Notwithstanding the foregoing provisions of this Section 8, any restricted stock award which is not subject to satisfaction of performance measures shall be subject to the employee's continuing employment with the Company or its affiliates for a period of not less than three years from the date of grant and any restricted stock award which is subject to satisfaction of performance measures shall be subject to the employee's continuing employment with the Company or its affiliates for a period of not less than one year from the date of grant; provided, however, that this sentence shall not apply to the extent the restricted stock awards are approved by the Company's stockholders or to the extent the restricted stock awards made under the Plan which do not conform to the foregoing provisions of this sentence (when aggregated with any performance awards which do not conform to the provisions of the last sentence of paragraph 9(a)) do not exceed 10 percent of the shares of Common Stock reserved for issuance under the Plan. 9. Performance Awards (a) Awards. Performance awards consisting of (i) shares of Common Stock, (ii) monetary units or (iii) units which are expressed in terms of shares of Common Stock may be made from time to time to such officers and other key employees of the Company and its affiliates as may be selected by the Committee. Subject to the provisions of Section 12 below, such awards shall be contingent on the achievement over a period of not more than ten years of such corporate, division, subsidiary, group or other measures and goals as shall be established by the Committee. Subject to the provisions of Sections 10 and 12 below, such measures and goals may be revised by the Committee at any time and/or from time to time during the performance period. Except as may otherwise be determined by the Committee at the time of the award or at any time thereafter, a performance award shall terminate if the grantee of the award does not remain continuously in the employ of the Company or its affiliates at all times during the applicable performance period. Notwithstanding the foregoing provisions of this paragraph 9(a) any performance award that consists of Common Stock shall be subject to the employee's continuing employment with the Company or its affiliates for a period of not less than one year from the date of grant; provided, however, that this sentence shall not apply to the extent the 6 performance awards are approved by the Company's stockholders or to the extent the performance awards consisting of Common Stock made under the Plan which do not conform to the provisions of this sentence (when aggregated with any restricted stock awards which do not conform to the provisions of the last sentence of Section 8) do not exceed 10 percent of the shares of Common Stock reserved for issuance under the Plan. (b) Rights with Respect to Shares and Share Units. If a performance award consists of shares of Common Stock or units which are expressed in terms of shares of such Common Stock, amounts equal to dividends otherwise payable on a like number of shares may, if the award so provides, be converted into additional such shares (to the extent that shares are then available for issuance under the Plan) or credited as additional units and paid to the participant if and when, and to the extent that, payment is made pursuant to such award. (c) Payment. Payment of a performance award following the end of the performance period, if such award consists of monetary units or units expressed in terms of shares of Common Stock, may be made in cash, shares of Common Stock, or a combination thereof, as determined by the Committee. Any payment made in Common Stock shall be based on the fair market value of such stock on the payment date. 10. Performance Measures Applicable to Awards to Named Executive Officers Unless and until the Committee proposes for stockholder vote a change in the general performance measures set forth in this Section 10, the attainment of which may determine the degree of payout or vesting with respect to awards under the Plan which are designed to qualify for the Performance-Based Exception, the performance measure(s) to be used for purposes of such awards shall be chosen from among the following alternatives: safety (including, but not limited to, total injury frequency, lost workday rates or cases, medical treatment cases and fatalities); quality control (including, but not limited to, critical product characteristics and defects); cost control (including, but not limited to, cost as a percentage of sales); capital structure (including, but not limited to, debt and equity levels, debt-to-equity ratios, and debt-to total-capitalization ratios); inventory turnover; customer performance or satisfaction; revenue measures (including, but not limited to gross revenues and revenue growth); net income; conformity to cash flow plans; return measures (including, but not limited to, return on investment assets or capital); operating profit to operating assets; share price measures (including, but not limited to, fair market value of shares, growth measures, and total shareholder return); working capital measures; operating earnings (before or after taxes); economic value added, cash value added; and cash flow return on investment. The Committee shall have the discretion to establish performance goals based upon the foregoing performance measures and to adjust such goals and the methodology used to measure the determination of the degree of attainment of such goals; provided, however, that awards under the Plan that are intended to qualify for the Performance-Based Exception and that are issued to or held by Named Executive Officers may not be adjusted in a manner that increases such award. The Committee shall retain the discretion to adjust such awards in a manner that does not increase such awards. Furthermore, the Committee shall not make any adjustment to 7 awards under the Plan issued to or held by Named Executive Officers that are intended to comply with the Performance-Based Exception if the result of such adjustment would be the disqualification of such award under the Performance- Based Exception. In the event that applicable laws change to permit the Committee greater discretion to amend or replace the foregoing performance measures applicable to awards to Named Executive Officers without obtaining stockholder approval of such changes, the Committee shall have sole discretion to make such changes without obtaining such approval. In addition, in the event that the Committee determines that it is advisable to grant awards under the Plan to Named Executive Officers that may not qualify for the Performance-Based Exception, the Committee may make such grants upon any performance measures it deems appropriate with the understanding that they may not satisfy the requirements of Section 162(m) of the Code. 11. Adjustments for Changes in Capitalization, Etc. Subject to the provisions of Section 12 herein, in the event of any change in corporate capitalization, such as a stock split, reverse stock split, stock dividend, or a corporate transaction, such as a merger, consolidation, or separation, including a spin-off, or other distribution of stock or property of the Company or its affiliates (other than normal cash dividends), any reorganization (whether or not such reorganization comes within the definition of such term in Code Section 368) or any partial or complete liquidation of the Company or its affiliates, such adjustment shall be made in the number and class of shares which may be delivered under Section 3 (including the number of shares referred to in the last sentence of the first paragraph of Section 3 and in subparagraph (a) of the second paragraph of Section 3), and in the number and class of and/or price of shares subject to outstanding grants or awards under the Plan, as may be determined to be appropriate and equitable by the Committee, in its sole discretion, to prevent dilution or enlargement of rights; provided, however, that the number of shares subject to any grants or awards under the Plan shall always be a whole number. 12. Effect of Change in Control. (a) Acceleration of Benefits. Subject to the following sentence and the terms of any agreement evidencing the terms of any award under the Plan, in the event of a "Change in Control" as defined in paragraph (b) of this Section 12, (i) the value of all outstanding stock options, stock appreciation rights and restricted stock awards (whether or not then fully exercisable or vested) shall be cashed out on the basis of the "Change in Control Price" (as defined in paragraph (c) of this Section 12) as of the date the Change in Control occurs, provided, however, that the Committee may provide for the immediate vesting instead of the cashing out of restricted stock awards in such circumstances as it deems appropriate; and (ii) all outstanding performance awards shall be cashed out in such manner and in such amount or amounts as determined by the Committee in its sole discretion. (b) Change in Control. For purposes of this Section 12, a Change in Control means the happening of any of the following: 8 (i) any "person" (as such term is used in Sections 13(d) and 14(d) of the Exchange Act), other than (w) RT, (x) a trustee or other fiduciary holding securities under an employee benefit plan of RT, (y) an underwriter temporarily holding securities pursuant to an offering of such securities, or (z) a corporation owned, directly or indirectly, by the stockholders of the Company in substantially the same proportions as their ownership of voting securities 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, individuals who at the beginning of such period constitute the Board 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 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 RT, at least 60% 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. A Change in Control shall also be deemed to occur with respect to any Participant for purposes of the Plan if there occurs: (1) a sale or disposition, directly or indirectly, other than to a person described in subclause (w), (x) or (z) of clause (i) next above, of securities of the Participant's employer, any direct or indirect parent company of the Participant's employer or any company that is a subsidiary of the Participant's employer and is also a significant 9 subsidiary (as defined below) of the Company (the Participant's employer and such a parent or subsidiary being a "Related Company"), representing 50% or more of the combined voting power of the securities of such Related Company then outstanding; (2) a merger or consolidation of a Related Company with any other corporation, other than a merger or consolidation which would result in 50% or more of the combined voting power of the surviving company being beneficially owned by a majority owned direct or indirect subsidiary of the Company; or (3) the sale or disposition of all or substantially all the assets of a Related Company to a person other than a majority owned direct or indirect subsidiary of the Company. Notwithstanding the foregoing, no Change in Control shall be deemed to have occurred with respect to a Participant for purposes of the Plan if (I) such transaction includes or involves a sale to the public or a distribution to the stockholders of the Company of more than 50% of the voting securities of the Participant's employer or a direct or indirect parent of the Participant's employer, and (II) the Participant's employer or a direct or indirect parent of the Participant's employer agrees to become a successor to the Company under an individual agreement between the Company and the Participant or the Participant is covered by an agreement providing for benefits upon a change in control of his or her employer following an event described clauses (1), (2) or (3) next above. Notwithstanding any other provision of this Agreement, a merger or consolidation of the Company with and into Inland Steel Industries, Inc. ("ISI") (or any subsidiary of ISI) (regardless of whether or not the Company or ISI is the surviving entity) shall not be considered a change in control of the Company for purposes of the Plan. For purposes of the Plan, the term "significant subsidiary" has the meaning given to such term under Rule 405 of the Security Act of 1933, as amended. (c) Change in Control Price. For purposes of this Section 12, Change in Control Price means: (i) with respect to a Change in Control by reason of a merger or consolidation of the Company described in paragraph (b)(iii) of this Section 12 in which the consideration per share of Common Stock to be paid for the acquisition of shares of Common Stock specified in the agreement of merger or consolidation is all in cash, the highest such consideration per share; (ii) with respect to a Change in Control by reason of an acquisition of securities described in paragraph (b)(i) of this Section 12, the highest price per share for any share of the Common Stock paid by any holder of any of the securities representing 40% or more of the combined voting power of the Company giving rise to the Change in Control; and (iii) with respect to a Change in Control by reason of a merger or consolidation of the Company (other than a merger or consolidation described in paragraph (b)(iii) of this 10 Section or a change in the composition of the Board of Directors described in paragraph (b)(ii) of this Section 12, or stockholder approval of an agreement or plan described in paragraph (b)(iv) of this Section 12 the highest price per share of Common Stock reported on the Composite Transactions (or, if such shares are not traded on the New York Stock Exchange, such other principal market on which such shares are traded) during the sixty-day period ending on the date the Change in Control occurs, except that, in the case of incentive stock options and stock appreciation rights relating to incentive stock options, the holder may not receive an amount in excess of the maximum amount that will enable such option to continue to qualify as an incentive stock option. 13. Amendment and Termination of Plan. The Plan may be amended or terminated by the Board at any time and in any respect, provided that, without the approval of the Company's stockholders, no such amendment (other than pursuant to Section 11 of the Plan) shall be made for which stockholder approval is necessary to comply with any applicable tax or regulatory requirement, including for these purposes any approval requirement which is a prerequisite for exemptive relief under Section 16(b) of the Exchange Act, and provided that no such amendment or termination shall impair the rights of any participant, without his or her consent, in any award previously granted under the Plan, unless required by law. In the event of termination of the Plan, no further grants may be made under the Plan but termination shall not affect the rights of any participant under, or the authority of the Committee with respect to, any grants or awards made prior to termination. Notwithstanding any other provision of the Plan, without the approval of the Company's stockholders, the Board shall not adopt any amendment to the Plan which makes changes to the Plan that are so material that the focus of the Plan is changed, including amending the Plan to provide for a form of grant not presently available under the Plan, as determined in the reasonable judgment of the Board. 11 14. Prior Plans. Upon the effectiveness of this Plan, no further grants shall be made under the Prior Plans. The discontinuance of the Prior Plans shall not affect the rights of any participant under, or the authority of the Committee (therein referred to) with respect to, any grants or awards made thereunder prior to such discontinuance. 15. Miscellaneous. (a) No Right to a Grant. Neither the adoption of the Plan nor any action of the Board or of the Committee shall be deemed to give any employee any right to be selected as a participant or to be granted a stock option, stock appreciation right, restricted stock award or performance award. (b) Rights as Stockholders. No person shall have any rights as a stockholder of the Company with respect to any shares covered by a stock option, stock appreciation right, or performance award until the date of the issuance of a stock certificate to such person pursuant to such stock option, right or award. (c) Employment. Nothing contained in this Plan shall be deemed to confer upon any employee any right of continued employment with the Company or any of its affiliates or to limit or diminish in any way the right of the Company or any such affiliate to terminate his or her employment at any time with or without cause. (d) Taxes. The Company shall be entitled to deduct from any payment under the Plan the amount of any tax required by law to be withheld with respect to such payment or may require any participant to pay such amount to the Company prior to and as a condition of making such payment. In addition, the Committee may, in its discretion and subject to such rules as it may adopt from time to time, permit a participant to elect to have the Company withhold from any payment under the Plan (or to have the Company accept from the participant), for tax withholding purposes, shares of Common Stock, valued at their fair market value, but in no event shall the fair market value of the number of shares so withheld (or accepted) exceed the amount necessary to meet the maximum Federal, state and local marginal tax rates then in effect that are applicable to the participant and to the particular transaction. (e) Nontransferability. Except as permitted by the Committee, no stock option, stock appreciation right, restricted stock award or performance award shall be transferable except by will or the laws of descent and distribution, and, during the holder's lifetime, stock options and stock appreciation rights shall be exercisable only by, and shares subject to restricted stock awards and payments pursuant to performance awards shall be delivered or made only to, such holder or such holder's duly appointed legal representative. 12 EX-10.12 3 OUTSIDE DIRECTORS ACCIDENT INSURANCE POLICY Exhibit 10.12 [INSERT CHUBB LOGO] Blanket Accident Insurance - -------------------------------------------------------------------------------- Declarations Chubb Group of Insurance Companies 15 Mountain View Road Warren, NJ 07059 Policyholder's Name and Mailing Address Policy Number 6404-48-82 INLAND STEEL INDUSTRIES, INC. 30 WEST MONROE STREET Effective Date JANUARY 1, 1998 CHICAGO, IL 60603 Issued by the stock insurance company indicated below. FEDERAL INSURANCE COMPANY Producer No. 0030153 Incorporated under the laws of INDIANA Producer WILLIS CORROON CORPORATION OF ILLINOIS 10 S. LASALLE STREET CHICAGO, IL 60603-0000 ================================================================================ Section I - Policy Period From: JANUARY 1, 1998 To: JANUARY 1, 2001 12:01 A.M. standard time at the Policyholder's mailing address shown above. ================================================================================ Section II - Policy Period The following are the Persons Insured under this policy: Class Descriptions ----- ------------ 1 ALL NON-EMPLOYEE DIRECTORS OF INLAND STEEL INDUSTRIES AND ALL NON-EMPLOYEE DIRECTORS OF RYERSON-TULL. If an Insured Person is included in more than one Class, the Insured Person will be covered for only the Benefit Amount applicable to one Class. The Insured Person will be considered a member of the applicable Class that provides the Insured Person the largest Benefit Amount for the particular Accident and Loss that has occurred. An Insured Person is added for coverage as a Class member at any time during the policy period that the Insured Person fits the Class description. An Insured Person will be deleted from a Class and coverage ends at any time the Insured Person no longer fits the Class description. All premium adjustments will be made according to the terms of this policy. ================================================================================ Section III- Hazards The following are the Hazards during which coverage applies: Hazards Form Number ------- ----------- BUSINESS TRAVEL 44-02-0897 (01/95) ================================================================================ continued - -------------------------------------------------------------------------------- Form 44-02-0893 (Ed. 1-95) Declarations Page 1 - -------------------------------------------------------------------------------- (continued) Section IV - Benefits BENEFIT AMOUNTS - --------------- Accidental Loss of Life and Scheduled Benefits ---------------------------------------------- The following are Loss of Life Benefit Amounts for each Class and corresponding Hazards: Class Benefit Amounts ----- --------------- BUSINESS TRAVEL --------------- 1 $500,000. [_] Multiple of salary/compensation applies, refer to the Supplemental Benefit Amounts Declarations, form number 44-02-0936 (Ed. 1/95). The following are Losses covered and the corresponding Scheduled Benefit Amounts.
Percent of Loss of Life ----------------------- Accidental Loss of Benefit Amount ------------------ -------------- Life 100% Speech and Hearing 100% Speech and one of: Hand, Foot or Sight of One Eye 100% Hearing and one of: Hand, Foot or Sight of One Eye 100% Both Hands, Both Feet or Sight of Both Eyes or a Combination of a Hand, a Foot or Sight of One Eye 100% One Hand or One Foot or Sight of One Eye 50% Speech or Hearing 50% Thumb and Index Finger of the same Hand 25%
================================================================================ PERMANENT TOTAL DISABILITY MONTHLY BENEFIT ------------------------------------------ The following are Permanent Total Disability Benefit Amounts for each Class. The same Hazards apply as stated above for Accidental Loss of Life.
Class Benefit Amount Elimination Period ----- -------------- ------------------ 1 $500,000. 12 MONTHS
continued - -------------------------------------------------------------------------------- Form 44-02-0893 (Ed. 1-95) Declarations Page 2 [INSERT CHUBB LOGO] Blanket Accident Insurance - -------------------------------------------------------------------------------- Declarations Effective Date JANUARY 1, 1998 Policy Number 6404-48-82 ================================================================================ (continued) If an Insured Person has multiple Losses as the result of one Accident, we will pay only the single largest Benefit Amount applicable to the Losses suffered. SEAT BELT --------- 10 percent of the Accidental Loss of Life Benefit Amount. ================================================================================ Section V - Maximum Limit of Insurance The following are maximum amounts we will pay: Limit of Insurance ------------------ $5,000,000. per ACCIDENT If more than one (1) Insured Person suffers a Loss in the same Accident, we will not pay more than the maximum Limit of Insurance shown above. If an Accident results in Benefit Amounts becoming payable, which when totalled, exceed the applicable Limit of Insurance shown above, the maximum Limit of Insurance will be divided proportionally among the Insured Persons, based on each applicable Benefit Amounts. ================================================================================ Coverage only applies for the Classes, Hazards, Benefit Amounts and Losses that are specifically indicated as covered. last page - -------------------------------------------------------------------------------- Form 44-02-0893 (Ed. 1-95) Declarations Page 3 EX-10.21 4 EMPLOYMENT AGREEMENT DATED JUNE 1, 1999 Exhibit 10.21 EMPLOYMENT AGREEMENT THIS AGREEMENT, by and between Ryerson Tull, Inc. (the "Company") and Jay M. Gratz (the "Executive") effective as of June 1, 1999 (the "Effective Date"); WITNESSETH THAT: WHEREAS, the Company has appointed Executive to the position of Executive Vice President/CFO, and Executive has accepted such appointment; and WHEREAS, in connection with such appointment, the Company and Executive desire to enter into this Agreement; NOW, THEREFORE, in consideration of the Executive's appointment as Executive Vice President/CFO, and for other good and valuable consideration the receipt of which is hereby acknowledged, it is agreed by the Executive and Company as follows: 1. Duties. The Executive agrees that while he is employed by the Company, he will devote his full business time, energies and talents to serving as the Executive Vice President/CFO of the Company and providing services for the Company at the direction of the Chairman of the Company. The Executive shall have such duties and responsibilities as may be assigned to him from time to time by the Chairman, shall perform all duties assigned to him faithfully and efficiently, subject to the direction of the Chairman, and shall have such authorities and powers as are inherent to the undertakings applicable to his position and necessary to carry out the responsibilities and duties required of him hereunder; provided, however, that the Executive shall not be required to perform any duties while he is disabled. Notwithstanding the foregoing or any other provisions of this Agreement, the Executive and the Company understand and agree that the responsibilities and duties of the Executive, in his capacity as Executive Vice President/CFO of the Company, may change from time to time due to other changes in the nature and structure of the Company's business and that any such changes in the Executive's duties and responsibilities that are consistent with such changes in the Company's business shall not constitute a reduction in the Executive's duties and responsibilities for purposes of this Agreement. 2. Compensation. Subject to the terms and conditions of this Agreement, during the Employment Period while the Executive is employed by the Company, the Company shall compensate him for his services as follows: (A) The Executive shall receive, for each twelve-consecutive month period beginning on March 8, 1999, and each anniversary thereof, an annual salary of $380,004 (the "Salary"), which Salary shall be payable in substantially equal bi-weekly installments. The Executive's rate of Salary shall be reviewed annually beginning in February, 2000. (B) The Executive shall be entitled to receive bonuses from the Company in accordance with the bonus plans of the Company as in effect from time to time. As Executive Vice President/CFO his target bonus award percentage shall be 50%, subject to annual approval of the Compensation Committee of the Board of Directors. (C) Except as otherwise specifically provided to the contrary in this Agreement, the Executive shall be provided with health, welfare and other fringe benefits to the same extent and on the same terms as those benefits are provided by the Company from time to time to the Company's other senior management executives. (D) The Executive shall be reimbursed by the Company, on terms and conditions that are substantially similar to those that apply to other similarly situated senior management executives of the Company, for reasonable out-of-pocket expenses for entertainment, travel, meals, lodging and similar items which are consistent with the Company's expense reimbursement policy and actually incurred by the Executive in the promotion of the Company's business. (E) The Company shall pay or shall reimburse the Executive for his monthly club dues and assessments; provided, however, that such payment or reimbursement, as applicable, shall apply only to the club at which the Executive was a member immediately prior to the date hereof unless it is necessary for the Executive to change clubs and, in any event shall apply to only one club at any given point in time. (F) The Company shall pay the Executive for the amount of the monthly lease payment for the automobile that the Executive uses for business; provided, however, that the Company shall report as income to the Executive any amounts required by law or the policies of the Company relating to the Executive's personal use of such automobile. -2- (G) The Executive shall be recommended for stock awards in the same manner as may be in effect from time to time for other similarly situated executive vice presidents. 3. Rights and Payments Upon Termination. The Executive's right to benefits and payments, if any, for periods after the date on which his employment with the Company terminates for any reason (his "Termination Date") shall be determined in accordance with this Section 3: (A) Termination by the Company for Reasons Other Than Cause; Termination by the Executive for Good Reason. If the Executive's termination by the Company occurs for any reason other than Cause or is a result of the Executive's termination of employment for Good Reason (and is not on account of the Executive's death, disability, or voluntary resignation, the mutual agreement of the parties or any other reason), then the Executive shall receive from the Company for the period commencing on his Termination Date and ending on the earliest of (i) the twenty-fourth month after the Executive's Termination Date; (ii) the date on which the Executive violates the provisions of Sections 4, 5 or 6 of this Agreement; or (iii) the date of the Executive's death, the Salary, bonus and benefits in effect as of his Termination Date, payable in accordance with the provisions of Paragraph 3(B). The biweekly salary amounts will continue as described above. Benefits that will continue will include medical, dental, basic life insurance, any optional life insurance and any optional accidental death and dismemberment insurance. Bonus shall mean two payments of the average annual amount of the award paid to the Executive pursuant to the annual incentive plan or successor plan with respect to the three years immediately preceding that in which the Termination Date occurs. Base salary payments to the Executive during the aforementioned twenty-four month period shall not preclude the Executive's eligibility for payments under the Company's severance plan. (B) Termination By Company for Cause. If the Executive's termination is a result of the Company's termination of the Executive's employment on account of Cause, then, except as agreed in writing between the Executive and the Company, the Executive shall have no right to future payments or benefits under this Agreement (and the Company shall have no obligation to make any such -3- future payments or provide any such future benefits) for periods after the Executive's Termination Date. (C) Termination for Death or Disability. If the Executive's termination is caused by the Executive's death or permanent disability, then the Executive (or in the event of his death, his estate) shall be entitled to continuing payments of his Salary for the period commencing on his Termination Date and ending on the earlier of (i) the last day of the calendar month in which his Termination Date occurs or (ii) the date on which the Executive violates the provisions of Sections 4, 5 or 6 of this Agreement. (D) Termination for Voluntary Resignation, Mutual Agreement or Other Reasons. If the Executive's termination occurs on account of his voluntary resignation, mutual agreement of the parties, or any reason other than those specified in Paragraphs (A), (B) or (C) above then, except as agreed in writing between the Executive and the Company, the Executive shall have no right to future payments or benefits under this Agreement (and the Company shall have no obligation to make any such future payments or provide any such future benefits) for periods after the Executive's Termination Date. The Executive's termination of employment for Good Reason shall not be treated as a voluntary resignation for purposes of this Agreement. (E) Definitions. For purposes of this Agreement: (i) The term "Cause" shall mean (a) the continuous failure by the Executive to substantially perform his duties under this Agreement, as determined by the Chairman after a reasonable corrective action period and after expiration of a cure period of 30 days following the Executive's receipt of notice of the Chairman's determination under this clause (a); (b) the willful engaging by the Executive in conduct which is demonstrably and materially injurious to the Company or its affiliates, monetarily or otherwise, as determined by the Chairman; (c) conduct by the Executive that involves theft, fraud or dishonesty; or (d) the Executive's violation of the provisions of Sections 4, 5 or 6 hereof. (ii) The term "Good Reason" means (a) the assignment to the Executive duties which are materially inconsistent with his duties as Executive Vice President/CFO of the Company, including, without limitation, a material -4- diminution or reduction in his title, office or responsibilities or a reduction in his rate of Salary, or (b) the relocation of the Executive to a location that is not within the greater Chicago metropolitan area. Notwithstanding any other provision of this Agreement, the Executive shall automatically cease to be an employee of the Company and its affiliates as of his Termination Date and, to the extent permitted by applicable law, any and all monies that the Executive owes to the Company shall be repaid before any post- termination payments are made pursuant to the Executive pursuant to this Agreement. 4. Confidential Information. The Executive agrees that: (A) Except as may be required by the lawful order of a court or agency of competent jurisdiction, or except to the extent that the Executive has express authorization from the Company, he shall keep secret and confidential indefinitely all non-public information (including, without limitation, information regarding litigation and pending litigation) concerning the Company and its affiliates which was acquired by or disclosed to the Executive during the course of his employment with the Company, and not to disclose the same, either directly or indirectly, to any other person, firm, or business entity, or to use it in any way. (B) Upon his Termination Date or at the Company's earlier request, he will promptly return to the Company any and all records, documents, physical property, information, computer disks or other materials relating to the business of the Company and its affiliates obtained by him during his course of employment with the Company. (C) The Executive shall keep the Company informed of, and shall execute such assignments as may be necessary to transfer to the Company or its affiliates the benefits of, any inventions, discoveries, improvements, trade secrets, developments, processes, and procedures made by the Executive, in whole or in part, or conceived by the Executive either alone or with others, which result from any work which the Executive may do for or at the request of the Company, whether or not conceived by the Executive while on holiday, on vacation, or off the premises of the Company, including such of the foregoing items conceived during the course of employment which are developed or perfected after the Executive's termination of employment. The Executive shall assist the Company or other nominated by it, to obtain patents, trademarks and -5- service marks and the Executive agrees to execute all documents and to take all other actions which are necessary or appropriate to secure to the Company and its affiliates the benefits thereof. Such patents, trademarks and service marks shall become the property of the Company and its affiliates. The Executive shall deliver to the Company all sketches, drawings, models, figures, plans, outlines, descriptions or other information with respect thereto. (D) To the extent that any court or agency seeks to have the Executive disclose confidential information, he shall promptly inform the Company, and he shall take such reasonable steps to prevent disclosure of Confidential Information until the Company has been informed of such requested disclosure. To the extent that the Executive obtains information on behalf of the Company or any of its affiliates that may be subject to attorney-client privilege as to the Company's attorneys, the Executive shall take reasonable steps to maintain the confidentiality of such information and to preserve such privilege. (E) Nothing in the foregoing provisions of this Section 4 shall be construed so as to prevent the Executive from using, in connection with his employment for himself or an employer other than the Company or any of its affiliates, knowledge which was acquired by him during the course of his employment with the Company and its affiliates, and which is generally known to persons of his experience in other companies in the same industry. 5. Nonsolicitation. While the Executive is employed by the Company and its affiliates and for a period of two years after the date the Executive terminates employment with the Company and its affiliates for any reason, the Executive covenants and agrees that he will not, whether for himself or for any other person, business, partnership, association, firm, company or corporation, directly or indirectly, call upon, solicit, divert or take away or attempt to solicit, divert or take away, any of the customers or employees of the Company or its affiliates in existence from time to time during his employment with the Company and its affiliates. 6. Noncompetition. While the Executive is employed by the Company and its affiliates, and for a period of two years after the date the Executive terminates employment with the Company and its affiliates, the Executive covenants and agrees that he will not, directly or indirectly, engage in, assist, perform services for, plan for, establish or open, or have any financial interest (other than (i) ownership of 1% or less of the outstanding stock of any corporation listed on the New York or American Stock Exchange or included in the -6- National Association of Securities Dealers Automated Quotation System or (ii) ownership of securities in any entity affiliated with the Company) in any person, firm, corporation, or business entity (whether as an employee, officer, director or consultant) that engages in an activity in any state in which the Company or its affiliates is conducting or has reasonable expectations of commencing business activities at the date of the Executive's termination of employment, which is the same as, similar to, or competitive with the metals service center, processing and distribution business of the Company and its affiliates. 7. Equitable Remedies. The Executive acknowledges that the Company would be irreparably injured by a violation of Sections 4, 5 and 6 and agrees that the Company, in addition to other remedies available to it for such breach or threatened breach, shall be entitled to a preliminary injunction, temporary restraining order, other equivalent relief, restraining the Executive from any actual or threatened breach of Sections 4, 5 and 6 without any bond or other security being required. 8. Defense of Claims. The Executive agrees that, during his employment with the Company and after his termination, he will cooperate with the Company and its affiliates in the defense of any claims that may be made against the Company or its affiliates to the extent that such claims may relate to services performed by him for the Company. To the extent travel is required to comply with the requirements of this Section 8, the Company, shall to the extent possible, provide the Executive with notice at least 10 days prior to the date on which such travel would be required and the Company agrees to reimburse the Executive for all of his reasonable actual expenses associated with such travel; provided, however, that if the Company reasonably expects the travel to be extensive or unduly burdensome to the Executive from a financial perspective, the Company may provide to the Executive pre-paid tickets for transportation in connection with such travel. 9. Notices. Notices provided for in this Agreement shall be in writing and shall be deemed to have been duly received when delivered in person or sent by facsimile transmission, on the first business day after it is sent by air express courier service or on the second business day following deposit in the United States registered or certified mail, return receipt requested, postage prepaid and addressed, in the case of the Company to the following address: Ryerson Tull, Inc. 2621 W. 15th Place Chicago, IL 60608 Attention: William Korda or to the Executive: -7- Jay M. Gratz 1242 North Astor Chicago, IL 60610 or such other address as either party may have furnished to the other in writing in accordance herewith, except that a notice of change of address shall be effective only upon actual receipt. 10. Withholding. All compensation payable under this Agreement shall be subject to customary withholding taxes and other employment taxes as required with respect to compensation paid by a corporation to an employee and the amount of compensation payable hereunder shall be reduced appropriately to reflect the amount of any required withholding. The Company shall have no obligation to make any payments to the Executive or to make the Executive whole for the amount of any required taxes. 11. Successors. This Agreement shall be binding on, and inure to the benefit of, the Company and its successors and assigns and any person acquiring, whether by merger, reorganization, consolidation, by purchase of assets or otherwise, all or substantially all of the assets of the Company. 12. Nonalienation. The interests of the Executive under this Agreement are not subject to the claims of his creditors, other than the Company, and may not otherwise be voluntarily or involuntarily assigned, alienated or encumbered. 13. Waiver of Breach. The waiver by either the Company or the Executive of a breach of any provision of this Agreement shall not operate as or be deemed a waiver of any subsequent breach by either the Company or the Executive. Continuation of payments hereunder by the Company following a breach by the Executive of any provision of this Agreement shall not preclude the Company from thereafter terminating said payments based upon the same violation. 14. Severability. It is mutually agreed and understood by the parties that should any of the agreements and covenants contained herein be determined by any court of competent jurisdiction to be invalid by virtue of being vague or unreasonable, including but not limited to the provisions of Sections 4, 5 and 6, then the parties hereto consent that this Agreement shall be amended retroactive to the date of its execution to include the terms and conditions said court deems to be reasonable and in conformity with the original intent of the parties and the parties hereto consent that under such circumstances, said court shall have the power and -8- authority to determine what is reasonable and in conformity with the original intent of the parties to the extent that said covenants and/or agreements are enforceable. 15. Applicable Law. This Agreement shall be construed in accordance with the laws of the State of Illinois. 16. Amendment. This Agreement may be amended or cancelled by mutual Agreement of the parties in writing without the consent of any other person. 17. Counterparts. This Agreement may be executed in any number of counterparts, each of which when so executed and delivered shall be an original, but all such counterparts shall together constitute one and the same instrument. Each counterpart may consist of a copy hereof containing multiple signature pages, each signed by one party hereto, but together signed by both of the parties hereto. 18. Other Agreements. This Agreement constitutes the sole and complete Agreement between the Company and the Executive and supersedes all other agreements, both oral and written, between the Company and the Executive with respect to the matters contained herein including, without limitation any severance agreements or arrangements between the parties; provided, however, that this Agreement does not supersede the Change in Control Agreement. No verbal or other statements, inducements, or representations have been made to or relied upon by the Executive. The parties have read and understand this Agreement. RYERSON TULL, INC. Dated: _______________ ____________________________________ William Korda Vice President Human Resources Dated: _______________ _______________________________________ Jay M. Gratz Executive Vice President/CFO -9- EX-10.22 5 EMPLOYMENT AGREEMENT DATED JUNE 1, 1999 Exhibit 10.22 EMPLOYMENT AGREEMENT THIS AGREEMENT, by and between Ryerson Tull, Inc. (the "Company") and Gary J. Niederpruem (the "Executive") effective as of June 1, 1999 (the "Effective Date"); WITNESSETH THAT: WHEREAS, the Company has appointed Executive to the position of Executive Vice President, and Executive has accepted such appointment; and WHEREAS, in connection with such appointment, the Company and Executive desire to enter into this Agreement; NOW, THEREFORE, in consideration of the Executive's appointment as Executive Vice President, and for other good and valuable consideration the receipt of which is hereby acknowledged, it is agreed by the Executive and Company as follows: 1. Duties. The Executive agrees that while he is employed by the Company, he will devote his full business time, energies and talents to serving as the Executive Vice President of the Company and providing services for the Company at the direction of the Chairman of the Company. The Executive shall have such duties and responsibilities as may be assigned to him from time to time by the Chairman, shall perform all duties assigned to him faithfully and efficiently, subject to the direction of the Chairman, and shall have such authorities and powers as are inherent to the undertakings applicable to his position and necessary to carry out the responsibilities and duties required of him hereunder; provided, however, that the Executive shall not be required to perform any duties while he is disabled. Notwithstanding the foregoing or any other provisions of this Agreement, the Executive and the Company understand and agree that the responsibilities and duties of the Executive, in his capacity as Executive Vice President of the Company, may change from time to time due to other changes in the nature and structure of the Company's business and that any such changes in the Executive's duties and responsibilities that are consistent with such changes in the Company's business shall not constitute a reduction in the Executive's duties and responsibilities for purposes of this Agreement. 2. Compensation. Subject to the terms and conditions of this Agreement, during the Employment Period while the Executive is employed by the Company, the Company shall compensate him for his services as follows: (A) The Executive shall receive, for each twelve-consecutive month period beginning on March 8, 1999, and each anniversary thereof, an annual salary of $285,700 (the "Salary"), which Salary shall be payable in substantially equal bi-weekly installments. The Executive's rate of Salary shall be reviewed annually beginning in February, 2000. (B) The Executive shall be entitled to receive bonuses from the Company in accordance with the bonus plans of the Company as in effect from time to time. As Executive Vice President his target bonus award percentage shall be 50%, subject to annual approval of the Compensation Committee of the Board of Directors. (C) Except as otherwise specifically provided to the contrary in this Agreement, the Executive shall be provided with health, welfare and other fringe benefits to the same extent and on the same terms as those benefits are provided by the Company from time to time to the Company's other senior management executives. (D) The Executive shall be reimbursed by the Company, on terms and conditions that are substantially similar to those that apply to other similarly situated senior management executives of the Company, for reasonable out-of-pocket expenses for entertainment, travel, meals, lodging and similar items which are consistent with the Company's expense reimbursement policy and actually incurred by the Executive in the promotion of the Company's business. (E) The Company shall pay or shall reimburse the Executive for his monthly country club dues and assessments; provided, however, that such payment or reimbursement, as applicable, shall apply only to the club at which the Executive was a member immediately prior to the date hereof unless it is necessary for the Executive to change clubs and, in any event shall apply to only one club at any given point in time. (F) The Company shall pay the Executive for the amount of the monthly lease payment for the automobile that the Executive uses for business; provided, however, that the Company shall report as income to the Executive any amounts required by law or the policies of the Company relating to the Executive's personal use of such automobile. -2- (G) The Executive shall be recommended for stock awards in the same manner as may be in effect from time to time for other similarly situated executive vice presidents. 3. Rights and Payments Upon Termination. The Executive's right to benefits and payments, if any, for periods after the date on which his employment with the Company terminates for any reason (his "Termination Date") shall be determined in accordance with this Section 3: (A) Termination by the Company for Reasons Other Than Cause; Termination by the Executive for Good Reason. If the Executive's termination by the Company occurs for any reason other than Cause or is a result of the Executive's termination of employment for Good Reason (and is not on account of the Executive's death, disability, or voluntary resignation, the mutual agreement of the parties or any other reason), then the Executive shall receive from the Company for the period commencing on his Termination Date and ending on the earliest of (i) the twenty-fourth month after the Executive's Termination Date; (ii) the date on which the Executive violates the provisions of Sections 4, 5 or 6 of this Agreement; or (iii) the date of the Executive's death, the Salary, bonus and benefits in effect as of his Termination Date, payable in accordance with the provisions of Paragraph 3(B). The biweekly salary amounts will continue as described above. Benefits that will continue will include medical, dental, basic life insurance, any optional life insurance and any optional accidental death and dismemberment insurance. Bonus shall mean two payments of the average annual amount of the award paid to the Executive pursuant to the annual incentive plan or successor plan with respect to the three years immediately preceding that in which the Termination Date occurs. Base salary payments to the Executive during the aforementioned twenty-four month period shall not preclude the Executive's eligibility for payments under the Company's severance plan. (B) Termination By Company for Cause. If the Executive's termination is a result of the Company's termination of the Executive's employment on account of Cause, then, except as agreed in writing between the Executive and the Company, the Executive shall have no right to future payments or benefits under this Agreement (and the Company shall have no obligation to make any such -3- future payments or provide any such future benefits) for periods after the Executive's Termination Date. (C) Termination for Death or Disability. If the Executive's termination is caused by the Executive's death or permanent disability, then the Executive (or in the event of his death, his estate) shall be entitled to continuing payments of his Salary for the period commencing on his Termination Date and ending on the earlier of (i) the last day of the calendar month in which his Termination Date occurs or (ii) the date on which the Executive violates the provisions of Sections 4, 5 or 6 of this Agreement. (D) Termination for Voluntary Resignation, Mutual Agreement or Other Reasons. If the Executive's termination occurs on account of his voluntary resignation, mutual agreement of the parties, or any reason other than those specified in Paragraphs (A), (B) or (C) above then, except as agreed in writing between the Executive and the Company, the Executive shall have no right to future payments or benefits under this Agreement (and the Company shall have no obligation to make any such future payments or provide any such future benefits) for periods after the Executive's Termination Date. The Executive's termination of employment for Good Reason shall not be treated as a voluntary resignation for purposes of this Agreement. (E) Definitions. For purposes of this Agreement: (i) The term "Cause" shall mean (a) the continuous failure by the Executive to substantially perform his duties under this Agreement, as determined by the Chairman after a reasonable corrective action period and after expiration of a cure period of 30 days following the Executive's receipt of notice of the Chairman's determination under this clause (a); (b) the willful engaging by the Executive in conduct which is demonstrably and materially injurious to the Company or its affiliates, monetarily or otherwise, as determined by the Chairman; (c) conduct by the Executive that involves theft, fraud or dishonesty; or (d) the Executive's violation of the provisions of Sections 4, 5 or 6 hereof. (ii) The term "Good Reason" means (a) the assignment to the Executive duties which are materially inconsistent with his duties as Executive Vice President of the Company, including, without limitation, a material -4- diminution or reduction in his title, office or responsibilities or a reduction in his rate of Salary, or (b) the relocation of the Executive to a location that is not within the greater Chicago metropolitan area. Notwithstanding any other provision of this Agreement, the Executive shall automatically cease to be an employee of the Company and its affiliates as of his Termination Date and, to the extent permitted by applicable law, any and all monies that the Executive owes to the Company shall be repaid before any post- termination payments are made pursuant to the Executive pursuant to this Agreement. 4. Confidential Information. The Executive agrees that: (A) Except as may be required by the lawful order of a court or agency of competent jurisdiction, or except to the extent that the Executive has express authorization from the Company, he shall keep secret and confidential indefinitely all non-public information (including, without limitation, information regarding litigation and pending litigation) concerning the Company and its affiliates which was acquired by or disclosed to the Executive during the course of his employment with the Company, and not to disclose the same, either directly or indirectly, to any other person, firm, or business entity, or to use it in any way. (B) Upon his Termination Date or at the Company's earlier request, he will promptly return to the Company any and all records, documents, physical property, information, computer disks or other materials relating to the business of the Company and its affiliates obtained by him during his course of employment with the Company. (C) The Executive shall keep the Company informed of, and shall execute such assignments as may be necessary to transfer to the Company or its affiliates the benefits of, any inventions, discoveries, improvements, trade secrets, developments, processes, and procedures made by the Executive, in whole or in part, or conceived by the Executive either alone or with others, which result from any work which the Executive may do for or at the request of the Company, whether or not conceived by the Executive while on holiday, on vacation, or off the premises of the Company, including such of the foregoing items conceived during the course of employment which are developed or perfected after the Executive's termination of employment. The Executive shall assist the Company or other nominated by it, to obtain patents, trademarks and -5- service marks and the Executive agrees to execute all documents and to take all other actions which are necessary or appropriate to secure to the Company and its affiliates the benefits thereof. Such patents, trademarks and service marks shall become the property of the Company and its affiliates. The Executive shall deliver to the Company all sketches, drawings, models, figures, plans, outlines, descriptions or other information with respect thereto. (D) To the extent that any court or agency seeks to have the Executive disclose confidential information, he shall promptly inform the Company, and he shall take such reasonable steps to prevent disclosure of Confidential Information until the Company has been informed of such requested disclosure. To the extent that the Executive obtains information on behalf of the Company or any of its affiliates that may be subject to attorney-client privilege as to the Company's attorneys, the Executive shall take reasonable steps to maintain the confidentiality of such information and to preserve such privilege. (E) Nothing in the foregoing provisions of this Section 4 shall be construed so as to prevent the Executive from using, in connection with his employment for himself or an employer other than the Company or any of its affiliates, knowledge which was acquired by him during the course of his employment with the Company and its affiliates, and which is generally known to persons of his experience in other companies in the same industry. 5. Nonsolicitation. While the Executive is employed by the Company and its affiliates and for a period of two years after the date the Executive terminates employment with the Company and its affiliates for any reason, the Executive covenants and agrees that he will not, whether for himself or for any other person, business, partnership, association, firm, company or corporation, directly or indirectly, call upon, solicit, divert or take away or attempt to solicit, divert or take away, any of the customers or employees of the Company or its affiliates in existence from time to time during his employment with the Company and its affiliates. 6. Noncompetition. While the Executive is employed by the Company and its affiliates, and for a period of two years after the date the Executive terminates employment with the Company and its affiliates, the Executive covenants and agrees that he will not, directly or indirectly, engage in, assist, perform services for, plan for, establish or open, or have any financial interest (other than (i) ownership of 1% or less of the outstanding stock of any corporation listed on the New York or American Stock Exchange or included in the -6- National Association of Securities Dealers Automated Quotation System or (ii) ownership of securities in any entity affiliated with the Company) in any person, firm, corporation, or business entity (whether as an employee, officer, director or consultant) that engages in an activity in any state in which the Company or its affiliates is conducting or has reasonable expectations of commencing business activities at the date of the Executive's termination of employment, which is the same as, similar to, or competitive with the metals service center, processing and distribution business of the Company and its affiliates. 7. Equitable Remedies. The Executive acknowledges that the Company would be irreparably injured by a violation of Sections 4, 5 and 6 and agrees that the Company, in addition to other remedies available to it for such breach or threatened breach, shall be entitled to a preliminary injunction, temporary restraining order, other equivalent relief, restraining the Executive from any actual or threatened breach of Sections 4, 5 and 6 without any bond or other security being required. 8. Defense of Claims. The Executive agrees that, during his employment with the Company and after his termination, he will cooperate with the Company and its affiliates in the defense of any claims that may be made against the Company or its affiliates to the extent that such claims may relate to services performed by him for the Company. To the extent travel is required to comply with the requirements of this Section 8, the Company, shall to the extent possible, provide the Executive with notice at least 10 days prior to the date on which such travel would be required and the Company agrees to reimburse the Executive for all of his reasonable actual expenses associated with such travel; provided, however, that if the Company reasonably expects the travel to be extensive or unduly burdensome to the Executive from a financial perspective, the Company may provide to the Executive pre-paid tickets for transportation in connection with such travel. 9. Notices. Notices provided for in this Agreement shall be in writing and shall be deemed to have been duly received when delivered in person or sent by facsimile transmission, on the first business day after it is sent by air express courier service or on the second business day following deposit in the United States registered or certified mail, return receipt requested, postage prepaid and addressed, in the case of the Company to the following address: Ryerson Tull, Inc. 2621 W. 15th Place Chicago, IL 60608 Attention: William Korda or to the Executive: -7- Gary J. Niederpruem 25 Ridgefield Lane Hinsdale, IL 60521 or such other address as either party may have furnished to the other in writing in accordance herewith, except that a notice of change of address shall be effective only upon actual receipt. 10. Withholding. All compensation payable under this Agreement shall be subject to customary withholding taxes and other employment taxes as required with respect to compensation paid by a corporation to an employee and the amount of compensation payable hereunder shall be reduced appropriately to reflect the amount of any required withholding. The Company shall have no obligation to make any payments to the Executive or to make the Executive whole for the amount of any required taxes. 11. Successors. This Agreement shall be binding on, and inure to the benefit of, the Company and its successors and assigns and any person acquiring, whether by merger, reorganization, consolidation, by purchase of assets or otherwise, all or substantially all of the assets of the Company. 12. Nonalienation. The interests of the Executive under this Agreement are not subject to the claims of his creditors, other than the Company, and may not otherwise be voluntarily or involuntarily assigned, alienated or encumbered. 13. Waiver of Breach. The waiver by either the Company or the Executive of a breach of any provision of this Agreement shall not operate as or be deemed a waiver of any subsequent breach by either the Company or the Executive. Continuation of payments hereunder by the Company following a breach by the Executive of any provision of this Agreement shall not preclude the Company from thereafter terminating said payments based upon the same violation. 14. Severability. It is mutually agreed and understood by the parties that should any of the agreements and covenants contained herein be determined by any court of competent jurisdiction to be invalid by virtue of being vague or unreasonable, including but not limited to the provisions of Sections 4, 5 and 6, then the parties hereto consent that this Agreement shall be amended retroactive to the date of its execution to include the terms and conditions said court deems to be reasonable and in conformity with the original intent of the parties and the parties hereto consent that under such circumstances, said court shall have the power and -8- authority to determine what is reasonable and in conformity with the original intent of the parties to the extent that said covenants and/or agreements are enforceable. 15. Applicable Law. This Agreement shall be construed in accordance with the laws of the State of Illinois. 16. Amendment. This Agreement may be amended or cancelled by mutual Agreement of the parties in writing without the consent of any other person. 17. Counterparts. This Agreement may be executed in any number of counterparts, each of which when so executed and delivered shall be an original, but all such counterparts shall together constitute one and the same instrument. Each counterpart may consist of a copy hereof containing multiple signature pages, each signed by one party hereto, but together signed by both of the parties hereto. 18. Other Agreements. This Agreement constitutes the sole and complete Agreement between the Company and the Executive and supersedes all other agreements, both oral and written, between the Company and the Executive with respect to the matters contained herein including, without limitation any severance agreements or arrangements between the parties; provided, however, that this Agreement does not supersede the Change in Control Agreement. No verbal or other statements, inducements, or representations have been made to or relied upon by the Executive. The parties have read and understand this Agreement. RYERSON TULL, INC. Dated: _______________ ____________________________________ William Korda Vice President Human Resources Dated: _______________ _______________________________________ Gary J. Niederpruem Executive Vice President -9- 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 6-MOS DEC-31-1998 JAN-01-1999 JUN-30-1999 8,700 0 337,500 10,000 511,900 850,000 586,900 308,900 1,361,700 266,100 259,300 0 100 50,600 622,200 1,361,700 1,399,500 1,399,500 1,238,900 1,238,900 0 0 13,200 39,200 18,400 20,800 17,300 0 0 37,400 1.55 1.55
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