-----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, WAHrYncUQQZj/RFo8CeBzNeKZWoaiAVVANc88DTEvqAfdj1FxkFasjpZGXrY1IJJ yDcTLX9SWjwbixRPK0NpDw== 0000950137-98-002820.txt : 19980721 0000950137-98-002820.hdr.sgml : 19980721 ACCESSION NUMBER: 0000950137-98-002820 CONFORMED SUBMISSION TYPE: SC 13E4 PUBLIC DOCUMENT COUNT: 11 FILED AS OF DATE: 19980720 SROS: NYSE SUBJECT COMPANY: COMPANY DATA: COMPANY CONFORMED NAME: INLAND STEEL INDUSTRIES INC /DE/ CENTRAL INDEX KEY: 0000790528 STANDARD INDUSTRIAL CLASSIFICATION: STEEL WORKS, BLAST FURNACES ROLLING MILLS (COKE OVENS) [3312] IRS NUMBER: 363425828 STATE OF INCORPORATION: DE FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: SC 13E4 SEC ACT: SEC FILE NUMBER: 005-37208 FILM NUMBER: 98668430 BUSINESS ADDRESS: STREET 1: 30 W MONROE ST CITY: CHICAGO STATE: IL ZIP: 60603 BUSINESS PHONE: 3123460300 MAIL ADDRESS: STREET 1: 30 WEST MONROE STREET STREET 2: 16TH FLOOR CITY: CHICAGO STATE: IL ZIP: 60603 FILED BY: COMPANY DATA: COMPANY CONFORMED NAME: INLAND STEEL INDUSTRIES INC /DE/ CENTRAL INDEX KEY: 0000790528 STANDARD INDUSTRIAL CLASSIFICATION: STEEL WORKS, BLAST FURNACES ROLLING MILLS (COKE OVENS) [3312] IRS NUMBER: 363425828 STATE OF INCORPORATION: DE FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: SC 13E4 BUSINESS ADDRESS: STREET 1: 30 W MONROE ST CITY: CHICAGO STATE: IL ZIP: 60603 BUSINESS PHONE: 3123460300 MAIL ADDRESS: STREET 1: 30 WEST MONROE STREET STREET 2: 16TH FLOOR CITY: CHICAGO STATE: IL ZIP: 60603 SC 13E4 1 TENDER OFFER 1 ================================================================================ SECURITIES AND EXCHANGE COMMISSION WASHINGTON, D.C. 20549 ------------------------- SCHEDULE 13E-4 ISSUER TENDER OFFER STATEMENT (PURSUANT TO SECTION 13(E)(1) OF THE SECURITIES EXCHANGE ACT OF 1934) ------------------------- INLAND STEEL INDUSTRIES, INC. (Name of Issuer) INLAND STEEL INDUSTRIES, INC. (Name of Person(s) Filing Statement) COMMON STOCK ($1.00 PAR VALUE) (Title of Class of Securities) 457472 10 8 (CUSIP Number of Class of Securities) George A. Ranney, Jr. Vice President and General Counsel Inland Steel Industries, Inc. 30 West Monroe Street Chicago, Illinois 60603 (312) 346-0300 (Name, Address and Telephone Number of Person Authorized to Receive Notices and Communications on Behalf of the Person(s) Filing Statement) ------------------------- Copy to: Philip J. Niehoff Mayer, Brown & Platt 190 South LaSalle Street Chicago, Illinois 60603-3441 (312) 782-0600 ------------------------- JULY 20, 1998 (Date Tender Offer First Published, Sent or Given to Security Holders) ------------------------- CALCULATION OF FILING FEE
Transaction Valuation* Amount of Filing Fee ---------------------- -------------------- $867,000,000 $173,400
- --------------- * Calculated solely for purposes of determining the filing fee, based upon the purchase of 25,500,000 shares at the maximum tender offer price per share of $34.00. [ ] Check box if any part of the fee is offset as provided by Rule 0-11(a)(2) and identify the filing with which the offsetting fee was previously paid. Identify the previous filing by registration statement number, or the form or schedule and the date of its filing. Amount Previously Paid: N/A Filing Party: N/A Form or Registration No.: N/A Date Filed: N/A
================================================================================ 2 This Issuer Tender Offer Statement on Schedule 13E-4 (the "Statement") relates to the tender offer by Inland Steel Industries, Inc., a Delaware corporation (the "Company"), to purchase up to 25,500,000 shares of its common stock ($1.00 par value) (the "Shares") (including the associated preferred stock purchase rights (the "Rights") issued pursuant to the Rights Agreement, dated as of November 25, 1997, between the Company and Harris Trust and Savings Bank, as the Rights Agent) at a price, net to the seller in cash, not greater than $34.00 nor less than $30.00 per Share, upon the terms and subject to the conditions set forth in the Offer to Purchase, dated July 20, 1998 (the "Offer to Purchase"), and the related Letter of Transmittal (which, as amended from time to time, together constitute the "Offer"). Copies of such documents are filed as Exhibits (a)(1) and (a)(2), respectively, to this Statement. Tenders of Shares pursuant to the Offer will include a tender of the associated Rights and no separate consideration will be paid for such Rights. ITEM 1. SECURITY AND ISSUER. (a) The name of the issuer is Inland Steel Industries, Inc., a Delaware corporation. The address of its principal executive offices is Inland Steel Industries, Inc., 30 West Monroe Street, Chicago, Illinois 60603. (b) The information set forth in "Introduction," "Section 1. Number of Shares; Proration" and "Section 10. Interests of Directors and Executive Officers; Transactions and Arrangements Concerning the Shares" in the Offer to Purchase is incorporated herein by reference. (c) The information set forth in "Introduction" and "Section 8. Price Range of Shares; Dividends" in the Offer to Purchase is incorporated herein by reference. (d) This Statement is being filed by the Issuer. ITEM 2. SOURCE AND AMOUNT OF FUNDS OR OTHER CONSIDERATION. (a)-(b) The information set forth in "Section 11. Source and Amount of Funds" in the Offer to Purchase is incorporated herein by reference. ITEM 3. PURPOSE OF THE TENDER OFFER AND PLANS OR PROPOSALS OF THE ISSUER. (a)-(j) The information set forth in "Introduction," "Section 9. Background and Purpose of the Offer; Certain Effects of the Offer," "Section 10. Interests of Directors and Executive Officers; Transactions and Arrangements Concerning the Shares," "Section 11. Source and Amount of Funds" and "Section 13. Effects of the Offer on the Market for Shares; Registration Under the Exchange Act" in the Offer to Purchase is incorporated herein by reference. ITEM 4. INTEREST IN SECURITIES OF THE ISSUER. The information set forth in "Section 10. Interests of Directors and Executive Officers; Transactions and Arrangements Concerning the Shares" and "Schedule I -- Certain Transactions Involving Shares" in the Offer to Purchase is incorporated herein by reference. ITEM 5. CONTRACTS, ARRANGEMENTS, UNDERSTANDINGS OR RELATIONSHIPS WITH RESPECT TO THE ISSUER'S SECURITIES. The information set forth in "Introduction," "Section 9. Background and Purpose of the Offer; Certain Effects of the Offer" and "Section 10. Interests of Directors and Executive Officers; Transactions and Arrangements Concerning the Shares" in the Offer to Purchase is incorporated herein by reference. ITEM 6. PERSONS RETAINED, EMPLOYED OR TO BE COMPENSATED. The information set forth in "Introduction" and "Section 17. Fees and Expenses" in the Offer to Purchase is incorporated herein by reference. 3 ITEM 7. FINANCIAL INFORMATION. (a)-(b) The information set forth in "Section 12. Certain Information About the Company" in the Offer to Purchase is incorporated herein by reference. The information set forth in Exhibit 99.1 to the Company's Current Report on Form 8-K, dated July 16, 1998, is incorporated herein by reference. ITEM 8. ADDITIONAL INFORMATION. (a) Not applicable. (b) The information set forth in "Section 14. Certain Legal Matters; Regulatory Approvals" in the Offer to Purchase is incorporated herein by reference. (c) The information set forth in "Section 13. Effects of the Offer on the Market for Shares; Registration Under the Exchange Act" in the Offer to Purchase is incorporated herein by reference. (d) Not applicable. (e) The information set forth in the Offer to Purchase and the related Letter of Transmittal, copies of which are attached hereto as Exhibits (a)(1) and (a)(2), respectively, is incorporated herein by reference. ITEM 9. MATERIAL TO BE FILED AS EXHIBITS. (a) A list of exhibits filed with this Statement is set forth on the Index to Exhibits immediately following the signature page of this Statement and is incorporated herein by reference. (b)-(f) Not applicable. 2 4 SIGNATURE After due inquiry and to the best of my knowledge and belief, I certify that the information set forth in this Statement is true, complete and correct. INLAND STEEL INDUSTRIES, INC. By: /s/ JAY M. GRATZ ----------------------------------- Jay M. Gratz Vice President and Chief Financial Officer Dated: July 20, 1998 3 5 INDEX TO EXHIBITS
ITEM DESCRIPTION PAGE ---- ----------- ---- (a)(1) Form of Offer to Purchase dated July 20, 1998............... (a)(2) Form of Letter of Transmittal............................... (a)(3) Form of Notice of Guaranteed Delivery....................... (a)(4) Form of Letter to Brokers, Dealers, Commercial Banks, Trust Companies and Other Nominees................................ (a)(5) Form of Letter to Clients for use by Brokers, Dealers, Commercial Banks, Trust Companies and Other Nominees........ (a)(6) Form of Letter to Stockholders dated July 20, 1998, from the Chairman, President and Chief Executive Officer of the Company..................................................... (a)(7) Form of Letter from LaSalle National Bank, as ESOP Trustee ("LaSalle"), to participants in the Inland Steel Industries Thrift Plan, the Inland Steel Company Savings Plan and the Ryerson Tull Savings Plan, including the form of Direction Form to LaSalle from participants in such plans and the form of Questions and Answers for plan participants about the Inland Steel Industries, Inc. tender offer.................. (a)(8) Form of Letter from Morgan Stanley Dean Witter, as Option Exercise/Tender Agent, to stock option holders, including the form of Option Exercise/Tender Instruction Form from Morgan Stanley Dean Witter to such stock option holders, the form of Letter from Stig L. Rahm of Morgan Stanley Dean Witter to stock option holders and the form of Questions and Answers for plan participants about the Inland Steel Industries, Inc. tender offer............................... (a)(9) Summary Advertisement dated July 20, 1998................... (a)(10) Guidelines for Certification of Taxpayer Identification Number on Substitute Form W-9............................... (a)(11) Press Release issued by the Company dated July 20, 1998..... * (g)(1) Exhibit 99.1 to the Company's Current Report on Form 8-K, - dated July 16, 1998 (incorporated herein by reference from the Company's Form 8-K filed with the Commission on July 20, 1998)
- --------------- * To be filed by amendment. - --------------------------- 4 EX-99.(A)(1) 2 OFFER TO PURCHASE 1 Offer to Purchase for Cash by INLAND STEEL INDUSTRIES, INC. of Up to 25,500,000 Shares of its Common Stock (Including the Associated Preferred Stock Purchase Rights) At a Purchase Price Not Greater Than $34.00 Nor Less Than $30.00 Per Share THE OFFER, PRORATION PERIOD AND WITHDRAWAL RIGHTS EXPIRE AT 12:00 MIDNIGHT, NEW YORK CITY TIME, ON FRIDAY, AUGUST 14, 1998, UNLESS THE OFFER IS EXTENDED. Inland Steel Industries, Inc., a Delaware corporation (the "Company"), invites its stockholders to tender shares of its common stock ($1.00 par value) (the "Shares") (including the associated preferred stock purchase rights (the "Rights") issued pursuant to the Rights Agreement, dated as of November 25, 1997, between the Company and Harris Trust and Savings Bank, as the Rights Agent) to the Company at a price not greater than $34.00 nor less than $30.00 per Share in cash, as specified by tendering stockholders, upon the terms and subject to the conditions set forth in this Offer to Purchase and the related Letter of Transmittal (which, as amended from time to time, together constitute the "Offer"). Unless the context otherwise requires, all references to Shares include the associated Rights. The Company will, upon the terms and subject to the conditions of the Offer, determine a single per Share price (not greater than $34.00 nor less than $30.00 per Share), net to the seller in cash (the "Purchase Price"), that it will pay for Shares validly tendered and not withdrawn pursuant to the Offer, taking into account the number of Shares so tendered and the prices specified by tendering stockholders. The Company will select the lowest Purchase Price that will allow it to buy 25,500,000 Shares validly tendered and not withdrawn pursuant to the Offer (or such lesser number of Shares as are validly tendered at prices not greater than $34.00 nor less than $30.00 per Share). The Company will pay the Purchase Price for all Shares validly tendered at prices at or below the Purchase Price and not withdrawn, upon the terms and subject to the conditions of the Offer including the terms thereof relating to proration and conditional tenders. The Company reserves the right, in its sole discretion, to purchase more than 25,500,000 Shares pursuant to the Offer. Shares tendered at prices in excess of the Purchase Price and Shares not purchased because of proration or conditional tenders will be returned. THE OFFER IS NOT CONDITIONED ON ANY MINIMUM NUMBER OF SHARES BEING TENDERED. THE OFFER IS, HOWEVER, SUBJECT TO CERTAIN OTHER CONDITIONS. SEE SECTION 7. The Shares are listed and traded on the New York Stock Exchange, Inc. (the "NYSE") under the symbol "IAD." On March 16, 1998, the last full trading day on the NYSE prior to the announcement of the ISC/Ispat Transaction (as defined herein), the closing per Share sales price as reported on the NYSE Composite Tape was $23.375. On July 17, 1998, the last full trading day on the NYSE prior to announcement of the Offer, the closing per Share sales price as reported on the NYSE Composite Tape was $28.75. THE COMPANY URGES STOCKHOLDERS TO OBTAIN CURRENT QUOTATIONS ON THE MARKET PRICE OF THE SHARES. SEE SECTION 8. The Company has declared a regular quarterly dividend of $0.05 per Share payable on August 1, 1998, to stockholders of record at the close of business on July 10, 1998. Stockholders of record at the close of business on July 10, 1998 who tender their Shares pursuant to the Offer will receive the dividend. THE BOARD OF DIRECTORS OF THE COMPANY (THE "BOARD OF DIRECTORS") HAS UNANIMOUSLY APPROVED THE OFFER. HOWEVER, STOCKHOLDERS MUST MAKE THEIR OWN DECISIONS WHETHER TO TENDER SHARES AND, IF SO, HOW MANY SHARES TO TENDER AND THE PRICE OR PRICES AT WHICH SHARES SHOULD BE TENDERED. NEITHER THE COMPANY NOR ITS BOARD OF DIRECTORS MAKES ANY RECOMMENDATION TO ANY STOCKHOLDER AS TO WHETHER TO TENDER OR REFRAIN FROM TENDERING SHARES. SEE SECTION 10 FOR INFORMATION REGARDING THE INTENTIONS OF THE COMPANY'S DIRECTORS AND EXECUTIVE OFFICERS WITH RESPECT TO TENDERING SHARES PURSUANT TO THE OFFER. ---------------------- The Dealer Managers for the Offer are: GOLDMAN, SACHS & CO. ---------------------- The date of this Offer to Purchase is July 20, 1998. 2 IMPORTANT Any stockholder desiring to tender all or any portion of such stockholder's Shares must (i) properly complete and duly execute the Letter of Transmittal or a facsimile thereof in accordance with the instructions in the Letter of Transmittal, including any required signature guarantees, and mail or deliver the Letter of Transmittal or such facsimile with such stockholder's certificate(s) for the tendered Shares and any other documents required by the Letter of Transmittal to Harris Trust and Savings Bank (the "Depositary"), (ii) deliver such Shares pursuant to the procedures for book-entry transfer set forth in Section 3 or (iii) request such stockholder's broker, dealer, commercial bank, trust company or other nominee to effect the transaction for such stockholder. A stockholder having Shares registered in the name of a broker, dealer, commercial bank, trust company or other nominee must contact that broker, dealer, commercial bank, trust company or other nominee if such stockholder desires to tender such Shares. Stockholders who desire to tender Shares and whose certificates for such Shares are not immediately available or who cannot comply with the procedure for book-entry transfer on a timely basis or whose other required documentation cannot be delivered to the Depositary by the expiration of the Offer should tender such Shares by following the procedures for guaranteed delivery set forth in Section 3. Questions and requests for assistance or for additional copies of this Offer to Purchase, the Letter of Transmittal or the Notice of Guaranteed Delivery may be directed to MacKenzie Partners, Inc. (the "Information Agent") or to Goldman, Sachs & Co. (the "Dealer Managers") at their respective addresses and telephone numbers set forth on the back cover of this Offer to Purchase. DISCLOSURE REGARDING FORWARD-LOOKING STATEMENTS This Offer to Purchase contains certain forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended (the "Exchange Act"). Forward-looking statements are statements other than historical information or statements of current condition. Some forward-looking statements may be identified by use of terms such as "believes," "anticipates," "intends," or "expects." These forward-looking statements relate to the plans and objectives of the Company for future operations, including, without limitation, statements relating to the use of the proceeds from the ISC/Ispat Transaction and the possible combination of the Company with its majority-owned subsidiary, Ryerson Tull, Inc. ("Ryerson Tull"). In light of the risks and uncertainties inherent in all future projections, the inclusion of forward-looking statements in this Offer to Purchase should not be regarded as a representation by the Company or any other person that the objectives or plans of the Company will be achieved. Numerous factors could cause the Company's actual results to differ materially from such forward-looking statements. The Company undertakes no obligation to release publicly the results of any future revisions it may make to forward-looking statements to reflect events or circumstances after the date hereof or to reflect the occurrence of unanticipated events. 2 3 SUMMARY This general summary is provided for the convenience of the Company's stockholders and is qualified in its entirety by reference to the full text and more specific details of this Offer to Purchase. Number of Shares to be Purchased................... 25,500,000 Shares (or such lesser number of Shares as are validly tendered). Purchase Price................ The Company will determine a single per Share net cash price, not greater than $34.00 nor less than $30.00 per Share, that it will pay for Shares validly tendered. All Shares acquired in the Offer will be acquired at the Purchase Price even if tendered below the Purchase Price. Each stockholder desiring to tender Shares must (i) specify in the Letter of Transmittal the minimum price (not greater than $34.00 nor less than $30.00 per Share) at which such stockholder is willing to have Shares purchased by the Company or (ii) elect to have such stockholder's Shares purchased at a price determined by the Dutch auction tender process, which could result in such Shares being purchased at the minimum price of $30.00 per Share. Market Price of Shares........ On March 16, 1998, the last full trading day on the NYSE prior to the announcement of the ISC/Ispat Transaction (as defined below), the closing per Share sales price as reported on the NYSE Composite Tape was $23.375. On July 17, 1998, the last full trading day before the announcement of the Offer, the closing per Share sales price as reported on NYSE Composite Tape was $28.75. The Company urges stockholders to obtain current quotations of the market price of the Shares. Dividends..................... The Company has declared a regular quarterly dividend of $0.05 per Share payable on August 1, 1998, to stockholders of record at the close of business on July 10, 1998. Stockholders of record at the close of business on July 10, 1998 who tender their Shares pursuant to the Offer will receive the dividend. How to Tender Shares.......... See Section 3. Call the Information Agent or consult your broker for assistance. Brokerage Commissions and Stock Transfer Tax............ Tendering stockholders will not be obligated to pay brokerage fees or commissions to the Dealer Managers, the Depositary or the Information Agent or, except as set forth in Instruction 7 to the Letter of Transmittal, transfer taxes on the sale of Shares pursuant to the Offer. A tendering stockholder who holds securities with such stockholder's broker may be required by such broker to pay a service charge or other fee. Expiration and Proration Dates......................... Friday, August 14, 1998, at 12:00 Midnight, New York City time, unless extended by the Company. Payment Date.................. As soon as practicable after the Expiration Date. 3 4 Position of the Company and its Directors................. Neither the Company nor its Board of Directors makes any recommendation to any stockholder as to whether to tender or refrain from tendering Shares. See Section 10 for information regarding the intentions of the Company's directors and executive officers with respect to tendering Shares pursuant to the Offer. Withdrawal Rights............. Tendered Shares may be withdrawn at any time until 12:00 Midnight, New York City time, on Friday, August 14, 1998, unless the Offer is extended by the Company and, unless previously purchased, after 12:00 Midnight, New York City time, on Monday, September 14, 1998. See Section 4. Odd Lots...................... There will be no proration of Shares tendered by any stockholder owning beneficially fewer than 100 Shares in the aggregate (excluding Shares attributable to individual accounts under the Inland Steel Industries Thrift Plan, the Inland Steel Company Savings Plan and the Ryerson Tull Savings Plan (collectively, the "Thrift and Savings Plans")) if such stockholder tenders all such Shares at or below the Purchase Price prior to the Expiration Date and checks the "Odd Lots" box in the Letter of Transmittal. Further Developments Regarding the Offer................... Call the Information Agent or the Dealer Managers, or consult your broker. THE COMPANY HAS NOT AUTHORIZED ANY PERSON TO MAKE ANY RECOMMENDATION ON BEHALF OF THE COMPANY AS TO WHETHER STOCKHOLDERS SHOULD TENDER OR REFRAIN FROM TENDERING SHARES PURSUANT TO THE OFFER. THE COMPANY HAS NOT AUTHORIZED ANY PERSON TO GIVE ANY INFORMATION OR TO MAKE ANY REPRESENTATION IN CONNECTION WITH THE OFFER ON BEHALF OF THE COMPANY OTHER THAN THOSE CONTAINED IN THIS OFFER TO PURCHASE OR IN THE LETTER OF TRANSMITTAL. DO NOT RELY ON ANY SUCH RECOMMENDATION OR ANY SUCH INFORMATION OR REPRESENTATION, IF GIVEN OR MADE, AS HAVING BEEN AUTHORIZED BY THE COMPANY. ISC/ISPAT TRANSACTION On July 16, 1998, Inland Steel Company, a wholly owned subsidiary of the Company that constituted the steel manufacturing and related operations segment of the Company's consolidated operations, merged with Inland Merger Sub, Inc. (the "ISC/Ispat Transaction"), a subsidiary of Ispat International N.V. ("Ispat"), pursuant to an agreement and plan of merger dated as of May 27, 1998, as amended (the "Merger Agreement"), among the Company, Inland Steel Company, Ispat and Inland Merger Sub, Inc. Inland Steel Company was the surviving company in the merger and became an indirect wholly owned subsidiary of Ispat. Pursuant to the merger, the Company received approximately $1.1 billion in cash in exchange for the outstanding common stock and preferred stock of Inland Steel Company and in connection with the repayment of intercompany debt of Inland Steel Company held by the Company. The Company's primary business is currently metals distribution and processing, conducted through its majority-owned subsidiary, Ryerson Tull. See Section 9. 4 5 TABLE OF CONTENTS
SECTION PAGE - ------- ---- SUMMARY..................................................... 3 INTRODUCTION................................................ 6 THE OFFER................................................... 8 1. Number of Shares; Proration............................ 8 2. Tenders by Owners of Fewer Than 100 Shares............. 10 3. Procedure for Tendering Shares......................... 11 4. Withdrawal Rights...................................... 16 5. Purchase of Shares and Payment of Purchase Price....... 17 6. Conditional Tender of Shares........................... 18 7. Certain Conditions of the Offer........................ 19 8. Price Range of Shares; Dividends....................... 21 9. Background and Purpose of the Offer; Certain Effects of the Offer................................................ 22 10. Interests of Directors and Executive Officers; Transactions and Arrangements Concerning the Shares.... 25 11. Source and Amount of Funds............................. 26 12. Certain Information About the Company.................. 27 13. Effects of the Offer on the Market for Shares; Registration Under the Exchange Act.................... 32 14. Certain Legal Matters; Regulatory Approvals............ 32 15. Certain U.S. Federal Income Tax Consequences........... 32 16. Extension of the Offer; Termination; Amendments........ 35 17. Fees and Expenses...................................... 36 18. Miscellaneous.......................................... 37 Schedule I -- Certain Transactions Involving Shares......... I-1
5 6 To the Holders of Shares of Common Stock of Inland Steel Industries, Inc.: INTRODUCTION Inland Steel Industries, Inc., a Delaware corporation (the "Company"), invites its stockholders to tender shares of its common stock ($1.00 par value) (the "Shares") (including the associated preferred stock purchase rights (the "Rights") issued pursuant to the Rights Agreement, dated as of November 25, 1997, between the Company and Harris Trust and Savings Bank, as the Rights Agent) to the Company at a price not greater than $34.00 nor less than $30.00 per Share in cash, as specified by tendering stockholders, upon the terms and subject to the conditions set forth in this Offer to Purchase and the related Letter of Transmittal (which, as amended from time to time, together constitute the "Offer"). Unless the context otherwise requires, all references to Shares include the associated Rights. The Company will, upon the terms and subject to the conditions of the Offer, determine a single per Share price (not greater than $34.00 nor less than $30.00 per Share), net to the seller in cash (the "Purchase Price"), that it will pay for Shares validly tendered and not withdrawn pursuant to the Offer, taking into account the number of Shares so tendered and the prices specified by tendering stockholders. The Company will select the lowest Purchase Price that will allow it to buy 25,500,000 Shares validly tendered and not withdrawn pursuant to the Offer (or such lesser number of Shares as are validly tendered at prices not greater than $34.00 nor less than $30.00 per Share). The Company will pay the Purchase Price for all Shares validly tendered at prices at or below the Purchase Price and not withdrawn, upon the terms and subject to the conditions of the Offer including the terms thereof relating to proration and conditional tenders. The Company reserves the right, in its sole discretion, to purchase more than 25,500,000 Shares pursuant to the Offer. THE OFFER IS NOT CONDITIONED ON ANY MINIMUM NUMBER OF SHARES BEING TENDERED. THE OFFER IS, HOWEVER, SUBJECT TO CERTAIN OTHER CONDITIONS. SEE SECTION 7. If, by the Expiration Date (as defined in Section 1), more than 25,500,000 Shares are validly tendered at or below the Purchase Price and not withdrawn (or such greater number of Shares as the Company may elect to purchase), the Company will, upon the terms and subject to the conditions of the Offer, purchase Shares first from all Odd Lot Owners (as defined in Section 2) who validly tender all their Shares at or below the Purchase Price and then on a pro rata basis from all other stockholders who validly tender Shares at prices at or below the Purchase Price (and do not withdraw them prior to the Expiration Date), other than stockholders who tender conditionally, and for whom the condition is not satisfied. The Company will return at its own expense all Shares not purchased pursuant to the Offer, including Shares tendered at prices greater than the Purchase Price and Shares not purchased because of proration or conditional tenders. The Purchase Price will be paid net to the tendering stockholder in cash for all Shares purchased. Tendering stockholders will not be obligated to pay brokerage commissions, solicitation fees or, subject to Instruction 7 of the Letter of Transmittal, stock transfer taxes on the Company's purchase of Shares pursuant to the Offer. HOWEVER, ANY TENDERING STOCKHOLDER OR OTHER PAYEE WHO FAILS TO COMPLETE, SIGN AND RETURN TO THE DEPOSITARY (AS DEFINED BELOW) THE SUBSTITUTE FORM W-9 THAT IS INCLUDED AS PART OF THE LETTER OF TRANSMITTAL OR A FORM W-8 OBTAINED FROM THE DEPOSITARY MAY BE SUBJECT TO REQUIRED BACKUP U.S. FEDERAL INCOME TAX WITHHOLDING OF 31% OF THE GROSS PROCEEDS PAYABLE TO SUCH STOCKHOLDER OR OTHER PAYEE PURSUANT TO THE OFFER. SEE SECTIONS 3 AND 15. In addition, the Company will pay all fees and expenses of the Dealer Managers, the Information Agent, the Depositary, LaSalle National Bank ("LaSalle") and Morgan Stanley Dean Witter (the "Option Exercise/Tender Agent") in connection with the Offer. See Section 17. 6 7 THE BOARD OF DIRECTORS HAS UNANIMOUSLY APPROVED THE OFFER. HOWEVER, STOCKHOLDERS MUST MAKE THEIR OWN DECISIONS WHETHER TO TENDER SHARES AND, IF SO, HOW MANY SHARES TO TENDER AND THE PRICE OR PRICES AT WHICH SHARES SHOULD BE TENDERED. NEITHER THE COMPANY NOR ITS BOARD OF DIRECTORS MAKES ANY RECOMMENDATION TO ANY STOCKHOLDER AS TO WHETHER TO TENDER OR REFRAIN FROM TENDERING SHARES. SEE SECTION 10 FOR INFORMATION REGARDING THE INTENTIONS OF THE COMPANY'S DIRECTORS AND EXECUTIVE OFFICERS WITH RESPECT TO TENDERING SHARES PURSUANT TO THE OFFER. On July 16, 1998, the Inland Steel Company, a wholly owned subsidiary of the Company that constituted the steel manufacturing and related operations segment of the Company's consolidated operations, merged with Inland Merger Sub, Inc. (the "ISC/Ispat Transaction"), a subsidiary of Ispat, pursuant to the Merger Agreement, among the Company, Inland Steel Company, Ispat and Inland Merger Sub, Inc. Inland Steel Company was the surviving company in the merger. As a result of the ISC/Ispat Transaction, Inland Steel Company became a wholly owned subsidiary of Ispat. Pursuant to the merger, the Company received approximately $1.1 billion in cash in exchange for the outstanding common stock and preferred stock of Inland Steel Company and in connection with the repayment of intercompany debt of Inland Steel Company held by the Company. The Company's primary business is currently metals distribution and processing, conducted through its majority-owned subsidiary, Ryerson Tull. See Section 9. The Company is making the Offer to distribute to those stockholders of the Company desiring liquidity a substantial portion of the net proceeds from the ISC/Ispat Transaction and to afford such stockholders an opportunity to sell all or a portion of their Shares without the usual transaction costs associated with open market sales. As of the close of business on July 17, 1998, there were 49,226,317 Shares outstanding, 90,801 Shares issuable upon conversion of the Company's Series A $2.40 Cumulative Convertible Preferred Stock, par value $1.00 per share (the "Series A Preferred Stock"), 1,819,634 Shares issuable upon conversion of the Company's Series E ESOP Convertible Preferred Stock, par value $1.00 per share (the "Series E Preferred Stock"), and 2,595,991 Shares issuable upon exercise of outstanding stock options ("Options") under the Inland Steel Industries 1988 Incentive Stock Plan, the Inland Steel Industries 1992 Incentive Stock Plan and the Inland Steel Industries 1995 Incentive Stock Plan (collectively, the "Stock Option Plans"). The 25,500,000 Shares that the Company is offering to purchase represent approximately 51.8% of the outstanding Shares (approximately 47.5% assuming the conversion of all outstanding shares of Series A Preferred Stock and Series E Preferred Stock and the exercise of all outstanding Options). The Series A Preferred Stock is convertible into Shares on a one-for-one basis and is redeemable, at the Company's option, at $44 per share plus any accrued and unpaid dividends. Each such share is entitled to one vote and votes with holders of Shares as one class, except in certain circumstances. Shares of Series E Preferred Stock are convertible into Shares on a one-for-one basis and are redeemable, at the Company's option, at $48.946 per share ($48.594 per share on and after July 7, 1999) plus any accrued and unpaid dividends. As of July 16, 1998, in connection with the ISC/Ispat Transaction, the Company redeemed 1,145,394 shares of Series E Preferred Stock held for the benefit of employees remaining with Inland Steel Company following the ISC/Ispat Transaction. The Company is considering redeeming the remaining Series E Preferred Stock. The Thrift and Savings Plans hold Shares in accounts for participants thereunder. Participants may instruct LaSalle National Bank, as trustee of the trusts that hold Shares for the Thrift and Savings Plans, to tender all or part of the Shares attributable to a participant's individual account under the applicable Thrift and Savings Plan (including fractional Shares, if any) by following the instructions set forth in "Procedure for Tendering Shares -- Thrift and Savings Plans" in Section 3. The Inland Steel Industries Shareholder Investment Service Dividend Reinvestment Plan (the "Dividend Reinvestment Plan") holds Shares for participants thereunder. Participants may instruct Harris Trust and Savings Bank, as administrator for the Dividend Reinvestment Plan, to tender all or 7 8 part of the Shares attributable to a participant's individual account by following the instructions set forth in "Procedure for Tendering Shares -- Dividend Reinvestment Plan" in Section 3. The Company is not offering, as part of the Offer, to purchase any of the Options outstanding under the Stock Option Plans, and tenders of such Options will not be accepted. Holders of Options may instruct the Option Exercise/Tender Agent to tender Shares issuable upon exercise of Options by following the instructions set forth in "Procedure for Tendering Shares -- Stock Option Plans" in Section 3 or to otherwise exercise Options during the Offer. A tender of Shares pursuant to the Offer will include a tender of the associated Rights. No separate consideration will be paid for such Rights. Unless the context otherwise requires, all references in this Offer to Purchase to the Shares include the associated Rights. For a description of the Rights, see Section 8. The Shares are listed and traded on the NYSE under the symbol "IAD." On March 16, 1998, the last full trading day on the NYSE prior to the announcement of the ISC/Ispat Transaction, the closing per Share sales price as reported on the NYSE Composite Tape was $23.375. On July 17, 1998, the last full trading day on the NYSE prior to the announcement of the Offer, the closing per Share sales price as reported on the NYSE Composite Tape was $28.75. The Company urges stockholders to obtain current quotations on the market price of the Shares. The Company has declared a regular quarterly dividend of $0.05 per Share payable on August 1, 1998, to stockholders of record at the close of business on July 10, 1998. Stockholders of record at the close of business on July 10, 1998 who tender their Shares pursuant to the Offer will receive the dividend. THE OFFER 1. NUMBER OF SHARES; PRORATION. Upon the terms and subject to the conditions of the Offer, the Company will accept for payment (and thereby purchase) 25,500,000 Shares or such lesser number of Shares as are validly tendered before the Expiration Date (and not withdrawn in accordance with Section 4) at a net cash price (determined in the manner set forth below) not greater than $34.00 nor less than $30.00 per Share. The term "Expiration Date" means 12:00 Midnight, New York City time, on Friday, August 14, 1998, unless and until the Company in its sole discretion shall have extended the period of time during which the Offer is open, in which event the term "Expiration Date" shall refer to the latest time and date at which the Offer, as so extended by the Company, shall expire. See Section 16 for a description of the Company's right to extend the time during which the Offer is open and to delay, terminate or amend the Offer. Subject to Section 2, if the Offer is oversubscribed, Shares tendered at or below the Purchase Price before the Expiration Date will be eligible for proration, subject to the provisions for conditional tenders described in Section 6. The proration period also expires on the Expiration Date. The Company will, upon the terms and subject to the conditions of the Offer, determine a single per Share Purchase Price that it will pay for Shares validly tendered and not withdrawn pursuant to the Offer, taking into account the number of Shares so tendered and the prices specified by tendering stockholders. The Company will select the lowest Purchase Price that will allow it to buy 25,500,000 Shares validly tendered and not withdrawn pursuant to the Offer (or such lesser number as are validly tendered at prices not greater than $34.00 nor less than $30.00 per Share). The Company will pay the Purchase Price for all Shares validly tendered at prices at or below the Purchase Price and not withdrawn, upon the terms and subject to the conditions of the Offer including the terms thereof relating to proration and conditional tenders. Shares tendered at prices in excess of the Purchase Price and Shares not purchased because of proration or conditional tender will be returned. The Company reserves the right, in its sole discretion, to purchase more than 25,500,000 Shares pursuant to the Offer, but does not currently plan to do so. The Offer is not 8 9 conditioned on any minimum number of Shares being tendered. In accordance with applicable regulations of the Securities and Exchange Commission (the "Commission"), the Company may purchase pursuant to the Offer an additional amount of Shares not to exceed 2% of the outstanding Shares without amending or extending the Offer. If (i) the Company increases or decreases the price to be paid for Shares, the Company increases or decreases the Dealer Managers' fee, the Company increases the number of Shares being sought, and such increase in the number of Shares being sought exceeds 2% of the outstanding Shares, or the Company decreases the number of Shares being sought, and (ii) the Offer is scheduled to expire at any time earlier than the tenth business day from and including the date that notice of such increase or decrease is first published, sent or given in the manner specified in Section 16, the Offer will be extended until the expiration of ten business days. For purposes of the Offer, a "business day" means any day other than a Saturday, Sunday or federal holiday and consists of the time period from 12:01 a.m. through 12:00 Midnight, New York City time. THE OFFER IS NOT CONDITIONED ON ANY MINIMUM NUMBER OF SHARES BEING TENDERED. THE OFFER IS, HOWEVER, SUBJECT TO CERTAIN OTHER CONDITIONS. SEE SECTION 7. In accordance with Instruction 5 of the Letter of Transmittal, each stockholder desiring to tender Shares must (i) specify the price (not greater than $34.00 nor less than $30.00 per Share) at which such stockholder is willing to have the Company purchase Shares or (ii) elect to have such stockholder's Shares purchased at a price determined by the Dutch auction tender process, which could result in such Shares being purchased at the minimum price of $30.00 per Share. As promptly as practicable following the Expiration Date, the Company will, in its sole discretion, determine the Purchase Price (not greater than $34.00 nor less than $30.00 per Share) that it will pay for Shares validly tendered and not withdrawn pursuant to the Offer, taking into account the number of Shares so tendered and the prices specified by tendering stockholders. The Company will pay the Purchase Price for all Shares validly tendered prior to the Expiration Date at prices at or below the Purchase Price and not withdrawn, upon the terms and subject to the conditions of the Offer, including the proration and conditional tender provisions. All Shares not purchased pursuant to the Offer, including Shares tendered at prices greater than the Purchase Price and Shares not purchased because of proration or conditional tenders, will be returned to the tendering stockholders at the Company's expense as promptly as practicable following the Expiration Date. If the number of Shares validly tendered at or below the Purchase Price and not withdrawn prior to the Expiration Date is less than or equal to 25,500,000 Shares (or such greater number of Shares as the Company may elect to purchase pursuant to the Offer), the Company will, upon the terms and subject to the conditions of the Offer, purchase at the Purchase Price all Shares so tendered. Priority. Upon the terms and subject to the conditions of the Offer, in the event that prior to the Expiration Date more than 25,500,000 Shares (or such greater number of Shares as the Company may elect to purchase pursuant to the Offer) are validly tendered at or below the Purchase Price and not withdrawn, the Company will purchase such validly tendered Shares in the following order of priority: (i) all Shares validly tendered at or below the Purchase Price and not withdrawn prior to the Expiration Date by any Odd Lot Owner (as defined in Section 2) who: (a) tenders all Shares (excluding Shares attributable to individual accounts under the Thrift and Savings Plans) beneficially owned by such Odd Lot Owner at or below the Purchase Price (partial tenders will not qualify for this preference); and (b) completes the box captioned "Odd Lots" on the Letter of Transmittal and, if applicable, on the Notice of Guaranteed Delivery; (ii) after purchase of all of the foregoing Shares, all Shares conditionally tendered in accordance with Section 6, for which the condition was satisfied without regard to the 9 10 procedure set forth in clause (iii) below, and all other Shares tendered properly and unconditionally, in each case, at prices at or below the Purchase Price and not withdrawn prior to the Expiration Date, on a pro rata basis, if necessary, as described below; and (iii) if necessary to permit the Company to purchase 25,500,000 Shares, Shares conditionally tendered, for which the condition was not initially satisfied, at or below the Purchase Price and not withdrawn prior to the Expiration Date, selected by random lot in accordance with Section 6. Proration. In the event that proration of tendered Shares is required, the Company will determine the final proration factor as promptly as practicable after the Expiration Date. Proration for each stockholder tendering Shares (other than Odd Lot Owners satisfying clause (i) above) shall be based on the ratio of the number of Shares tendered by such stockholder at or below the Purchase Price to the total number of Shares tendered by all stockholders (other than Odd Lot Owners satisfying clause (i) above) at or below the Purchase Price, subject to the conditional tender provisions described in Section 6. This ratio will be applied to stockholders tendering Shares (other than Odd Lot Owners satisfying clause (i) above) to determine the number of Shares (in certain cases, rounded up to the nearest whole Share) that will be purchased from each such stockholder pursuant to the Offer. Although the Company does not expect to be able to announce the final results of such proration until approximately seven business days after the Expiration Date, it will announce preliminary results of proration by press release as promptly as practicable after the Expiration Date. Stockholders can obtain such preliminary information from the Information Agent and may be able to obtain such information from their brokers. As described in Section 15, the number of Shares that the Company will purchase from a stockholder may affect the U.S. federal income tax consequences to the stockholder of such purchase and therefore may be relevant to a stockholder's decision whether to tender Shares. The Letter of Transmittal affords each tendering stockholder the opportunity to designate the order of priority in which Shares tendered are to be purchased in the event of proration. This Offer to Purchase and the related Letter of Transmittal will be mailed to record holders of Shares as of July 17, 1998, and will be furnished to brokers, banks and similar persons whose names, or the names of whose nominees, appear on the Company's stockholder list or, if applicable, who are listed as participants in a clearing agency's security position listing for subsequent transmittal to beneficial owners of Shares. 2. TENDERS BY OWNERS OF FEWER THAN 100 SHARES. The Company, upon the terms and subject to the conditions of the Offer, will accept for purchase, without proration, all Shares validly tendered at or below the Purchase Price and not withdrawn on or prior to the Expiration Date by or on behalf of stockholders who beneficially own an aggregate of fewer than 100 Shares, excluding Shares attributable to individual accounts under the Thrift and Savings Plans ("Odd Lot Owners"). See Section 1. To avoid proration, however, an Odd Lot Owner must validly tender at or below the Purchase Price all such Shares (excluding Shares attributable to individual accounts under the Thrift and Savings Plans) that such Odd Lot Owner beneficially owns. This preference is not available to partial tenders or to owners of 100 or more Shares in the aggregate (excluding Shares attributable to individual accounts under the Thrift and Savings Plans), even if such owners have separate stock certificates for fewer than 100 such Shares. Any Odd Lot Owner wishing to tender all such Shares beneficially owned by such stockholder pursuant to this Offer must complete the box captioned "Odd Lots" in the Letter of Transmittal and, if applicable, on the Notice of Guaranteed Delivery and must properly indicate in the section entitled "Price (In Dollars) Per Share At Which Shares Are Being Tendered" in the Letter of Transmittal the price at which such Shares are being tendered, or may elect to have all of such stockholder's Shares (excluding Shares attributable to individual accounts under the Thrift and 10 11 Savings Plans) purchased at the Purchase Price determined by the Dutch auction tender process. See Section 3. Stockholders owning an aggregate of less than 100 Shares whose Shares are purchased pursuant to the Offer will avoid both the payment of brokerage commissions and any applicable odd lot discounts payable on a sale of their Shares in transactions on a stock exchange, including the NYSE. As of July 16, 1998, there were 12,906 holders of record of Shares. Approximately 62% of these holders of record held individually fewer than 100 Shares and held in the aggregate 219,520 Shares. Because of the large number of Shares held in the names of brokers and nominees, the Company is unable to estimate the number of beneficial owners of fewer than 100 Shares or the aggregate number of Shares they own. The Company also reserves the right, but will not be obligated, to purchase all Shares duly tendered by any stockholder who tendered any Shares beneficially owned at or below the Purchase Price and who, as a result of proration, would then beneficially own an aggregate of fewer than 100 Shares. If the Company exercises this right, it will increase the number of Shares that it is offering to purchase in the Offer by the number of Shares purchased through the exercise of such right. 3. PROCEDURE FOR TENDERING SHARES. Proper Tender of Shares. For Shares to be validly tendered pursuant to the Offer, either: (i) a properly completed and duly executed Letter of Transmittal (or a facsimile thereof) in accordance with the instructions of the Letter of Transmittal, with any required signature guarantees, certificates for Shares to be tendered and any other documents required by the Letter of Transmittal, must be received by the Depositary prior to the Expiration Date at one of its addresses set forth on the back cover of this Offer to Purchase; (ii) such Shares must be delivered pursuant to the procedures for book-entry transfer described below (and a confirmation of such delivery received by the Depositary, including an Agent's Message (as defined below) if the tendering stockholder has not delivered a Letter of Transmittal) or pursuant to ATOP (as defined below) prior to the Expiration Date; or (iii) the tendering stockholder must comply with the guaranteed delivery procedures set forth below. The term "Agent's Message" means a message, transmitted by the Book-Entry Transfer Facility (as defined below) to, and received by, the Depositary and forming a part of a Book-Entry Confirmation (as defined below), which states that the Book-Entry Transfer Facility has received an express acknowledgment from the participant in the Book-Entry Transfer Facility tendering the Shares that such participant has received and agrees to be bound by the terms of the Letter of Transmittal and that Purchaser may enforce such agreement against the participant. AS SPECIFIED IN INSTRUCTION 5 OF THE LETTER OF TRANSMITTAL, EACH STOCKHOLDER DESIRING TO TENDER SHARES PURSUANT TO THE OFFER MUST EITHER (A) CHECK THE BOX IN THE SECTION OF THE LETTER OF TRANSMITTAL CAPTIONED "SHARES TENDERED AT PRICE DETERMINED BY DUTCH AUCTION" OR (B) CHECK ONE OF THE BOXES IN THE SECTION OF THE LETTER OF TRANSMITTAL CAPTIONED "SHARES TENDERED AT A PRICE DETERMINED BY STOCKHOLDER." A stockholder who wishes to maximize the chance that such stockholder's Shares will be purchased at the relevant Purchase Price should check the box on the Letter of Transmittal marked "Shares Tendered at Price Determined by Dutch Auction." Note that this election could result in such stockholder's Shares being purchased at the minimum price of $30.00 per Share. A stockholder who wishes to indicate a specific price (in multiples of $0.125) at which such stockholder's Shares are being tendered must check a box under the section captioned "Shares Tendered at Price Determined by Stockholder" of the Letter of Transmittal in the table labeled "Price (in Dollars) Per Share at Which Shares Are Being Tendered." A stockholder who wishes to tender Shares at 11 12 more than one price must complete separate Letters of Transmittal for each price at which such Shares are being tendered. The same Shares cannot be tendered at more than one price. A TENDER OF SHARES WILL BE PROPER IF, AND ONLY IF, ON THE LETTER OF TRANSMITTAL EITHER THE BOX IN THE SECTION CAPTIONED "SHARES TENDERED AT PRICE DETERMINED BY DUTCH AUCTION" OR ONE OF THE BOXES IN THE SECTION CAPTIONED "SHARES TENDERED AT PRICE DETERMINED BY STOCKHOLDER" IS CHECKED. Odd Lot Owners who tender all Shares must complete the section entitled "Odd Lots" on the Letter of Transmittal and, if applicable, on the Notice of Guaranteed Delivery, in order to qualify for the preferential treatment available to Odd Lot Owners as set forth in Section 2. Signature Guarantees and Method of Delivery. No signature guarantee is required on the Letter of Transmittal if (i) the Letter of Transmittal is signed by the registered holder of the Shares (which term, for purposes of this Section, includes any participant in The Depository Trust Company (the "Book-Entry Transfer Facility") whose name appears on a security position listing as the holder of the Shares) tendered therewith and payment and delivery are to be made directly to such registered holder, or (ii) Shares are tendered for the account of a financial institution (including most commercial banks, savings and loan associations and brokerage houses) that is a member of a recognized signature guarantee medallion program within the meaning of Rule 17Ad-15 under the Exchange Act (an "Eligible Institution"). In this regard, see Section 5 for information with respect to applicable stock transfer taxes. In all other cases, all signatures on the Letter of Transmittal must be guaranteed by an Eligible Institution. See Instruction 1 of the Letter of Transmittal. If a certificate representing Shares is registered in the name of a person other than the signer of a Letter of Transmittal, or if payment is to be made, or Shares not purchased or tendered are to be returned, to a person other than the registered holder, the certificate must be endorsed or accompanied by an appropriate stock power, in either case signed exactly as the name of the registered holder appears on the certificate, with the signature on the certificate or stock power guaranteed by an Eligible Institution. In all cases, payment for Shares tendered and accepted for payment pursuant to the Offer will be made only after timely receipt by the Depositary of certificates for such Shares (or a timely confirmation of a book-entry transfer of such Shares into the Depositary's account at the Book-Entry Transfer Facility as described below), a properly completed and duly executed Letter of Transmittal (or a facsimile thereof), or an Agent's Message in connection with a book-entry transfer, or a proper tender through the Book-Entry Transfer Facility's Automated Tender Offer Program ("ATOP"), together with any other documents required by the Letter of Transmittal. THE METHOD OF DELIVERY OF ALL DOCUMENTS, INCLUDING SHARE CERTIFICATES, THE LETTER OF TRANSMITTAL AND ANY OTHER REQUIRED DOCUMENTS, IS AT THE ELECTION AND RISK OF THE TENDERING STOCKHOLDER. IF DELIVERY IS BY MAIL, REGISTERED MAIL WITH RETURN RECEIPT REQUESTED, PROPERLY INSURED, IS RECOMMENDED. Book-Entry Delivery. The Depositary will establish an account with respect to the Shares at the Book-Entry Transfer Facility for purposes of the Offer within two business days after the date of this Offer to Purchase. Any financial institution that is a participant in a Book-Entry Transfer Facility's system may make book-entry delivery of the Shares by causing the Book-Entry Transfer Facility to transfer such Shares into the Depositary's account in accordance with the Book-Entry Transfer Facility's procedure for such transfer. Even though delivery of Shares may be effected through book-entry transfer into the Depositary's account at the Book-Entry Transfer Facility, a properly completed and duly executed Letter of Transmittal (or a facsimile thereof), with any required signature guarantees, or an Agent's Message or, in the case of a tender through ATOP, the specific acknowledgment, in each case together with any other required documents, must, in any case, be transmitted to and received by the Depositary at one of its addresses set forth on the back cover of this Offer to Purchase prior to the Expiration Date, or the guaranteed delivery procedure set forth below must be followed. The confirmation of a book-entry transfer of Shares into the Depositary's account at the Book-Entry Transfer Facility as described above is referred to herein as a "Book- 12 13 Entry Confirmation." DELIVERY OF THE LETTER OF TRANSMITTAL AND ANY OTHER REQUIRED DOCUMENTS TO THE BOOK-ENTRY TRANSFER FACILITY DOES NOT CONSTITUTE DELIVERY TO THE DEPOSITARY. Participants in the Book-Entry Transfer Facility may tender their Shares in accordance with ATOP, to the extent it is available to such participants for the Shares they wish to tender. A stockholder tendering through ATOP must expressly acknowledge that the stockholder has received and agreed to be bound by the Letter of Transmittal and that the Letter of Transmittal may be enforced against such stockholder. Guaranteed Delivery. If a stockholder desires to tender Shares pursuant to the Offer and such stockholder's Share certificates cannot be delivered to the Depositary prior to the Expiration Date (or the procedures for book-entry transfer cannot be completed on a timely basis) or time will not permit all required documents to reach the Depositary before the Expiration Date, such Shares may nevertheless be tendered, provided that all of the following conditions are satisfied: (i) such tender is made by or through an Eligible Institution; (ii) the Depositary receives (by hand, mail, overnight courier or facsimile transmission), on or prior to the Expiration Date, a properly completed and duly executed Notice of Guaranteed Delivery substantially in the form the Company has provided with this Offer to Purchase (indicating the price at which the Shares are being tendered), including (where required) a signature guarantee by an Eligible Institution in the form set forth in such Notice of Guaranteed Delivery; and (iii) the certificates for all tendered Shares in proper form for transfer (or confirmation of book-entry transfer of such Shares into the Depositary's account at the Book-Entry Transfer Facility or a proper tender through ATOP), together with a properly completed and duly executed Letter of Transmittal (or a facsimile thereof) and any required signature guarantees (or, in the case of book-entry transfer, an Agent's Message or, in the case of a tender through ATOP, the specific acknowledgment) and any other documents required by the Letter of Transmittal, are received by the Depositary no later than 5:00 p.m., New York City time, on the third NYSE trading day after the date the Depositary receives such Notice of Guaranteed Delivery. Return of Unpurchased Shares. If any tendered Shares are not purchased, or if less than all Shares evidenced by a stockholder's certificates are tendered, certificates for unpurchased Shares will be returned as promptly as practicable after the expiration or termination of the Offer or, in the case of Shares tendered by book-entry transfer at the Book-Entry Transfer Facility, such Shares will be credited to the appropriate account maintained by the tendering stockholder at the Book-Entry Transfer Facility, in each case without expense to such stockholder. Backup Federal Income Tax Withholding. To prevent backup federal income tax withholding equal to 31% of the gross payments made to stockholders for Shares purchased pursuant to the Offer, each stockholder who does not otherwise establish an exemption from such withholding must provide the Depositary with the stockholder's correct taxpayer identification number and provide certain other information by completing the Substitute Form W-9 included as part of the Letter of Transmittal. For a further discussion of backup withholding, see Section 15. Thrift and Savings Plans. As of July 17, 1998, the Thrift and Savings Plans held 717,887 Shares, all of which were attributable to the individual accounts of the Thrift and Savings Plans participants, beneficiaries of deceased participants and alternate payees pursuant to qualified domestic relations orders (collectively referred to in this section as "participants"). Such Shares will, subject to the limitations of the Employee Retirement Income Security Act of 1974, as amended, and applicable regulations thereunder, be tendered (or not tendered) by LaSalle, as trustee of the trusts that hold Shares for the Thrift and Savings Plans, according to the instructions of participants to LaSalle. In accordance with the terms of the Thrift and Savings Plans and trust agreements, LaSalle will determine in its discretion whether and at what prices to tender Shares for which it has not received 13 14 timely instructions from participants. LaSalle will make available to participants whose Shares are attributable to individual accounts under the Thrift and Savings Plans all documents furnished to stockholders generally in connection with the Offer. Each such participant will also receive a "Direction Form" upon which the participant may instruct LaSalle regarding the Offer. Each participant may direct that all, some or none of the Shares attributable to such participant's account under the Thrift and Savings Plans (including fractional Shares, if any) be tendered. Each participant may also direct (i) the price at which such Shares are to be tendered, (ii) that the price at which such Shares are to be tendered shall be determined by LaSalle, in its sole discretion, or (iii) that the Purchase Price be determined by the Dutch auction tender process. LaSalle will also provide additional information in a separate letter with respect to the application of the Offer to participants in the Thrift and Savings Plans. PARTICIPANTS IN THE THRIFT AND SAVINGS PLANS MAY NOT USE THE LETTER OF TRANSMITTAL TO DIRECT THE TENDER OF THE SHARES ATTRIBUTABLE TO THEIR INDIVIDUAL ACCOUNTS UNDER THE THRIFT AND SAVINGS PLANS, BUT MUST USE THE THRIFT AND SAVINGS PLANS DIRECTION FORMS SENT TO THEM. PARTICIPANTS IN THE THRIFT AND SAVINGS PLANS ARE URGED TO READ THE THRIFT AND SAVINGS PLANS DIRECTION FORMS AND RELATED MATERIALS CAREFULLY. ALTHOUGH THE TENDER OFFER IS NOT SCHEDULED TO EXPIRE UNTIL 12:00 MIDNIGHT, NEW YORK CITY TIME, ON AUGUST 14, 1998, UNLESS EXTENDED, PARTICIPANTS IN THE THRIFT AND SAVINGS PLANS MUST RETURN THEIR DIRECTION FORMS TO HARRIS TRUST AND SAVINGS BANK, AS AGENT FOR LASALLE, SO THAT IT IS RECEIVED BY HARRIS TRUST AND SAVINGS BANK NO LATER THAN 5:00 P.M., NEW YORK CITY TIME, ON TUESDAY, AUGUST 11, 1998, UNLESS EXTENDED. All proceeds received by LaSalle on account of Shares purchased from the Thrift and Savings Plans will be transferred as soon as administratively practicable to Fidelity Management Trust Company ("Fidelity"), as trustee of the assets of the Thrift and Savings Plans other than the Shares and Series E Preferred Stock. Such proceeds shall be credited to participants' individual accounts under the applicable Thrift and Savings Plan and invested in the Fidelity Retirement Government Money Market Portfolio. Participants may contact Fidelity after the transfer and account reconciliation is complete, which is expected to be no earlier than three business days after Fidelity receives the proceeds, at (800) 354-6551, to have the proceeds of the sale of Shares invested in other investment options offered under the applicable Thrift and Savings Plan. Dividend Reinvestment Plan. As of July 16, 1998, the Dividend Reinvestment Plan held 78,323 Shares, all of which were attributable to the individual accounts of the Dividend Reinvestment Plan participants (collectively referred to in this section as "participants"). Such Shares will be tendered (or not tendered) by Harris Trust and Savings Bank, as administrator of the Dividend Reinvestment Plan (the "administrator"), according to the instructions of participants provided to the administrator. Shares for which the administrator has not received timely instructions from participants will not be tendered. The administrator will make available to the participants in the Dividend Reinvestment Plan all documents furnished to stockholders generally in connection with the Offer. Because the Depositary for the Offer also acts as administrator of the Dividend Reinvestment Plan, participants in the Dividend Reinvestment Plan may use the Letter of Transmittal to instruct the administrator regarding the Offer by completing the box entitled "Dividend Reinvestment Plan Shares" on the Letter of Transmittal. Each participant may direct that all, some or none of the Shares attributable to such participant's account under the Dividend Reinvestment Plan (including fractional Shares, if any) be tendered and the price at which such Shares are to be tendered or that such Shares are to be tendered at the Purchase Price determined by the Dutch auction tender process. Shares held by the administrator pending allocation in the Dividend Reinvestment Plan shall be tendered by the administrator in the same proportion as those Shares with respect to which the administrator has received instructions from participants are tendered. PARTICIPANTS IN THE DIVIDEND REINVESTMENT PLAN ARE URGED TO READ THE LETTER OF TRANSMITTAL AND RELATED MATERIALS CAREFULLY. Stock Option Plans. The Company is not offering, as part of the Offer, to purchase any of the Options outstanding under the Stock Option Plans, and tenders of such Options will not be 14 15 accepted. The Company has arranged for Morgan Stanley Dean Witter to act as Option Exercise/ Tender Agent for the Stock Option Plans during the Offer, and all Option exercises must be effected through the Option Exercise/Tender Agent rather than the Company until after Friday, August 28, 1998, unless extended. A holder of Options who wishes to participate in the Offer may submit to the Option Exercise/Tender Agent an Option Exercise/Tender Instruction Form to either: (i) tender Shares issuable upon exercise of outstanding and vested Options held by such holder, specifying the number of Shares subject to such Options to be tendered and the price or prices at which such Shares are to be tendered or electing to accept the Purchase Price determined by the Dutch auction process, and authorizing the Option Exercise/Tender Agent to (a) exercise such holder's Options (but only to the extent that such Shares are accepted for purchase pursuant to the Offer) and deliver such Shares to the Depositary, provided that any such exercise of an Option and tender of Shares is in accordance with the terms of the Stock Option Plans and the Options, (b) remit to the Company the option exercise price for such Shares and applicable withholding taxes and (c) remit to such holder the remaining net cash proceeds received pursuant to the Offer for such Shares; or (ii) exercise such holder's Options to purchase Shares of the Company's common stock, provided that any such exercise of an Option and tender of Shares is in accordance with the terms of the Stock Option Plans and the Options, and then tender such Shares pursuant to the Offer. An exercise of an Option cannot be revoked even if Shares received upon the exercise thereof and tendered in the Offer are not purchased in the Offer for any reason. Regardless of the method used to exercise options, a holder of Options will not be permitted to exercise Options from the date hereof until the tenth day following the termination of the Offer unless such holder has an account with the Option Exercise/Tender Agent. In addition, for those holders of Options selecting the conditional exercise method described in paragraph (i) above for some portion of the Options held by them, Options which such holders conditionally exercise in the Offer, but which are not accepted in the Offer and therefore are deemed unexercised, cannot be exercised by such holders until after Friday, August 28, 1998, unless extended. In no event are any Options to be delivered to the Depositary in connection with a tender of Shares hereunder. The Option Exercise/Tender Agent will mail to holders of Options additional materials concerning the exercise of Options and the tender of Shares issuable upon exercise of Options, including an Option Exercise/Tender Instruction Form. Holders should use the Option Exercise/Tender Instruction Form to exercise Options and, if desired, to tender Shares issuable upon exercise of Options pursuant to methods (i) and (ii) described above. HOLDERS OF OPTIONS MAY NOT USE THE LETTER OF TRANSMITTAL TO DIRECT THE TENDER OF SHARES ISSUABLE UPON EXERCISE OF OPTIONS. Questions with respect to tendering Shares issuable upon exercise of Options, or opening an account with the Option Exercise/Tender Agent so that Options may be exercised, should be directed to Morgan Stanley Dean Witter, the Option Exercise/Tender Agent, at Corporate Services Group, IAD Dutch Auction Tender Offer, 7617 Mineral Point Road, Suite 200, Madison, Wisconsin 53717, Attention: Stig L. Rahm; telephone numbers (800) 776-7797 and (608) 829-3262. IN ORDER FOR THE OPTION EXERCISE/TENDER AGENT TO TIMELY TENDER SHARES ISSUABLE UPON EXERCISE OF OPTIONS, EXCEPT AS SET FORTH IN THE OPTION EXERCISE/TENDER INSTRUCTION FORM, HOLDERS OF OPTIONS MUST COMPLETE AND RETURN THE OPTION EXERCISE/TENDER INSTRUCTION FORM SO THAT IT IS RECEIVED BY THE OPTION EXERCISE/TENDER AGENT NO LATER THAN 5:00 P.M., NEW YORK CITY TIME, ON TUESDAY, AUGUST 11, 1998, UNLESS EXTENDED. Tendering Stockholder's Representation and Warranty; Company's Acceptance Constitutes an Agreement. It is a violation of Rule 14e-4 promulgated under the Exchange Act for a person acting alone or in concert with others, directly or indirectly, to tender Shares for such person's own account unless at the time of tender and at the Expiration Date such person has a "net long 15 16 position" equal to or greater than the amount tendered in (i) the Shares and will deliver or cause to be delivered such Shares for the purpose of tender to the Company within the period specified in the Offer or (ii) other securities immediately convertible into, exercisable for or exchangeable into Shares ("Equivalent Securities") and, upon the acceptance of such tender, will acquire such Shares by conversion, exchange or exercise of such Equivalent Securities to the extent required by the terms of the Offer and will deliver or cause to be delivered such Shares so acquired for the purpose of tender to the Company within the period specified in the Offer. Rule 14e-4 also provides a similar restriction applicable to the tender or guarantee of a tender on behalf of another person. A tender of Shares made pursuant to any method of delivery set forth herein will constitute the tendering stockholder's representation and warranty to the Company that (i) such stockholder has a "net long position" in Shares or Equivalent Securities being tendered within the meaning of Rule 14e-4 and (ii) such tender of Shares complies with Rule 14e-4. The Company's acceptance for payment of Shares tendered pursuant to the Offer will constitute a binding agreement between the tendering stockholder and the Company upon the terms and subject to the conditions of the Offer. Determinations of Validity; Rejection of Shares; Waiver of Defects; No Obligation to Give Notice of Defects. All questions as to the number of Shares to be accepted, the price to be paid therefor and the validity, form, eligibility (including time of receipt) and acceptance for payment of any tender of Shares will be determined by the Company, in its sole discretion, which determination shall be final and binding on all parties. The Company reserves the absolute right to reject any or all tenders it determines not to be in proper form or the acceptance of or payment for which may, in the opinion of the Company's counsel, be unlawful. The Company also reserves the absolute right to waive any of the conditions of the Offer and any defect or irregularity in the tender of any particular Shares or any particular stockholder. No tender of Shares will be deemed to be properly made until all defects or irregularities have been cured or waived. None of the Company, the Dealer Managers, the Depositary, the Information Agent, the Option Exercise/Tender Agent, LaSalle National Bank or any other person is or will be obligated to give notice of any defects or irregularities in tenders, and none of them will incur any liability for failure to give any such notice. CERTIFICATES FOR SHARES, TOGETHER WITH A PROPERLY COMPLETED LETTER OF TRANSMITTAL AND ANY OTHER DOCUMENTS REQUIRED BY THE LETTER OF TRANSMITTAL, MUST BE DELIVERED TO THE DEPOSITARY AND NOT TO THE COMPANY. ANY SUCH DOCUMENTS DELIVERED TO THE COMPANY WILL NOT BE FORWARDED TO THE DEPOSITARY AND THEREFORE WILL NOT BE DEEMED TO BE VALIDLY TENDERED. 4. WITHDRAWAL RIGHTS. Except as otherwise provided in this Section 4, tenders of Shares pursuant to the Offer are irrevocable. Shares tendered pursuant to the Offer may be withdrawn at any time before the Expiration Date and, unless accepted for payment by the Company as provided in this Offer to Purchase, may also be withdrawn after 12:00 Midnight, New York City time, on Monday, September 14, 1998. For a withdrawal to be effective, the Depositary must receive (at its address set forth on the back cover of this Offer to Purchase) a notice of withdrawal in written or facsimile transmission form on a timely basis. Such notice of withdrawal must specify the name of the person who tendered the Shares to be withdrawn, the number of Shares tendered, the number of Shares to be withdrawn and the name of the registered holder, if different from that of the person who tendered such Shares. If the certificates have been delivered or otherwise identified to the Depositary, then, prior to the release of such certificates, the tendering stockholder must also submit the serial numbers shown on the particular certificates evidencing the Shares and the signature on the notice of withdrawal must be guaranteed by an Eligible Institution (except in the case of Shares tendered by an Eligible Institution). If Shares have been tendered pursuant to the procedure for book-entry transfer set forth in Section 3, the notice of withdrawal must specify the name and the number of the account at 16 17 the Book-Entry Transfer Facility to be credited with the withdrawn Shares and otherwise comply with the procedures of such facility. If the Company extends the Offer, is delayed in its purchase of Shares or is unable to purchase Shares pursuant to the Offer for any reason, then, without prejudice to the Company's rights under the Offer, the Depositary may, subject to applicable law, retain on behalf of the Company all tendered Shares, and such Shares may not be withdrawn except to the extent tendering stockholders are entitled to withdrawal rights as described in this Section 4, subject to Rule 13e-4(f)(5) under the Exchange Act, which provides that the issuer making the tender offer shall either pay the consideration offered, or return the tendered securities, promptly after the termination or withdrawal of the tender offer. Participants in the Thrift and Savings Plans and holders of Options accepting the Offer by delivering an Option Exercise/Tender Instruction Form are not subject to the foregoing procedures with respect to Shares attributable to their individual accounts under the Thrift and Savings Plans and Shares tendered pursuant to an Option Exercise/Tender Instruction Form and instead should follow the procedures for withdrawal included in the applicable letter furnished to such participants or Option holders. All questions as to the form and validity, including time of receipt, of notices of withdrawal will be determined by the Company, in its sole discretion, which determination shall be final and binding on all parties. None of the Company, the Dealer Managers, the Depositary, the Information Agent, the Option Exercise/Tender Agent, LaSalle National Bank or any other person is or will be obligated to give any notice of any defects or irregularities in any notice of withdrawal, and none of them will incur any liability for failure to give any such notice. Withdrawals may not be rescinded, and any Shares properly withdrawn will thereafter be deemed not tendered for purposes of the Offer. However, withdrawn Shares may be re-tendered before the Expiration Date by again following any of the procedures described in Section 3. 5. PURCHASE OF SHARES AND PAYMENT OF PURCHASE PRICE. Upon the terms and subject to the conditions of the Offer, and as promptly as practicable after the Expiration Date, the Company will determine a single per Share Purchase Price that it will pay for Shares validly tendered and not withdrawn pursuant to the Offer, taking into account the number of Shares so tendered and the prices specified by tendering stockholders, and will accept for payment and pay for (and thereby purchase) Shares validly tendered at or below the Purchase Price and not withdrawn as soon as practicable after the Expiration Date. For purposes of the Offer, the Company will be deemed to have accepted for payment (and therefore purchased), subject to proration and the conditional tender provisions of the Offer, Shares that are validly tendered at or below the Purchase Price and not withdrawn when, as and if it gives oral or written notice to the Depositary of its acceptance of such Shares for payment pursuant to the Offer. In all cases, payment for Shares tendered and accepted for payment pursuant to the Offer will be made promptly (subject to possible delay in the event of proration or conditional tenders) but only after timely receipt by the Depositary of certificates for Shares (or of a timely Book-Entry Confirmation of such Shares into the Depositary's account at the Book-Entry Transfer Facility), a properly completed and duly executed Letter of Transmittal (or a facsimile thereof), or, in the case of a book-entry transfer, an Agent's Message, or, in the case of a tender through ATOP, the specific acknowledgment, in each case together with any other required documents. Payment for Shares purchased pursuant to the Offer will be made by depositing the aggregate Purchase Price therefor with the Depositary, which will act as agent for tendering stockholders for the purpose of receiving payment from the Company and transmitting payment to the tendering stockholders. In the event of proration, the Company will determine the proration factor and pay for those tendered Shares accepted for payment as soon as practicable after the Expiration Date. However, the Company does not expect to be able to announce the final results of any such 17 18 proration until approximately seven business days after the Expiration Date. Under no circumstances will the Company pay interest on the Purchase Price including, without limitation, by reason of any delay in making payment. Certificates for all Shares not purchased, including all Shares tendered at prices greater than the Purchase Price and Shares not purchased due to proration or conditional tenders, will be returned (or, in the case of Shares tendered by book-entry transfer, such Shares will be credited to the account maintained with the Book-Entry Transfer Facility by the participant who so delivered such Shares) as promptly as practicable following the Expiration Date or termination of the Offer without expense to the tendering stockholder. In addition, if certain events occur, the Company may not be obligated to purchase Shares pursuant to the Offer. See Section 7. The Company will pay or cause to be paid all stock transfer taxes, if any, payable on the transfer to it of Shares purchased pursuant to the Offer; provided, however, that if payment of the Purchase Price is to be made to, or (in the circumstances permitted by the Offer) if unpurchased Shares are to be registered in the name of, any person other than the registered holder, or if tendered certificates are registered in the name of any person other than the person signing the Letter of Transmittal, the amount of all stock transfer taxes, if any (whether imposed on the registered holder or such other person), payable on account of the transfer to such person will be deducted from the Purchase Price unless evidence satisfactory to the Company of the payment of such taxes or exemption therefrom is submitted. See Instruction 7 of the Letter of Transmittal. ANY TENDERING STOCKHOLDER OR OTHER PAYEE WHO FAILS TO COMPLETE FULLY, SIGN AND RETURN TO THE DEPOSITARY THE SUBSTITUTE FORM W-9 INCLUDED AS PART OF THE LETTER OF TRANSMITTAL OR A FORM W-8 OBTAINED FROM THE DEPOSITARY MAY BE SUBJECT TO REQUIRED BACKUP U.S. FEDERAL INCOME TAX WITHHOLDING OF 31% OF THE GROSS PROCEEDS PAYABLE TO SUCH STOCKHOLDER OR OTHER PAYEE PURSUANT TO THE OFFER. SEE SECTIONS 3 AND 15. 6. CONDITIONAL TENDER OF SHARES. Under certain circumstances and subject to the exceptions set forth in Section 1, the Company may prorate the number of Shares purchased pursuant to the Offer. As discussed in Section 15, the number of Shares to be purchased from a particular stockholder may affect the tax treatment of such purchase to such stockholder and such stockholder's decision whether to tender. EACH STOCKHOLDER IS URGED TO CONSULT WITH HIS OR HER OWN TAX ADVISOR. Accordingly, a stockholder may tender Shares subject to the condition that a specified minimum number of such stockholder's Shares tendered pursuant to a Letter of Transmittal or Notice of Guaranteed Delivery must be purchased if any such Shares so tendered are purchased, and any stockholder desiring to make such a conditional tender must so indicate in the box captioned "Conditional Tender" in such Letter of Transmittal or, if applicable, the Notice of Guaranteed Delivery. The conditional tender alternative is made available so that a stockholder may seek to structure the purchase of Shares from the stockholder pursuant to the Offer in such a manner that it will be treated as a sale of such Shares by the stockholder, rather than the payment of a dividend to the stockholder, for federal income tax purposes. Any tendering stockholder wishing to make a conditional tender must calculate and appropriately indicate such minimum number of Shares. If the effect of accepting tenders on a pro rata basis would be to reduce the number of Shares to be purchased from any stockholder (tendered pursuant to a Letter of Transmittal or Notice of Guaranteed Delivery) below the minimum number so specified, such tender will automatically be regarded as withdrawn (except as provided in the next paragraph) and all Shares tendered by such stockholder pursuant to such Letter of Transmittal or Notice of Guaranteed Delivery will be returned as promptly as practicable thereafter. If conditional tenders would otherwise be so regarded as withdrawn and would cause the total number of Shares to be purchased to fall below 25,500,000, then, to the extent feasible, the 18 19 Company will select enough of such conditional tenders that would otherwise have been so withdrawn to permit the Company to purchase 25,500,000 Shares. In selecting among such conditional tenders, the Company will select by lot and will limit its purchase in each case to the designated minimum number of Shares to be purchased. IN THE EVENT OF PRORATION, ANY SHARES TENDERED PURSUANT TO A CONDITIONAL TENDER FOR WHICH THE MINIMUM REQUIREMENTS ARE NOT SATISFIED MAY NOT BE ACCEPTED (EXCEPT AS PROVIDED ABOVE) AND WILL THEREBY BE DEEMED WITHDRAWN. 7. CERTAIN CONDITIONS OF THE OFFER. Notwithstanding any other provision of the Offer, the Company shall not be required to accept for payment, purchase or pay for any Shares tendered, and may terminate or amend the Offer or may postpone the acceptance for payment of, or the purchase of and the payment for, Shares tendered, subject to Rule 13e-4(f) promulgated under the Exchange Act, if at any time on or after July 20, 1998, and prior to the time of payment for any such Shares (whether any Shares have theretofore been accepted for payment, purchased or paid for pursuant to the Offer) any of the following events shall have occurred (or shall have been determined by the Company to have occurred) that, in the Company's judgment in any such case and regardless of the circumstances giving rise thereto (including any action or omission to act by the Company), makes it inadvisable to proceed with the Offer or with such acceptance for payment or payment: (a) there shall have been threatened or instituted or be pending before any court, agency, authority or other tribunal any action, suit or proceeding by any government or governmental, regulatory or administrative agency or authority or by any other person, domestic, foreign or supranational, or any judgment, order or injunction entered, enforced or deemed applicable by any such court, authority, agency or tribunal, which (i) challenges or seeks to make illegal, or to delay or otherwise directly or indirectly to restrain, prohibit or otherwise affect the making of the Offer or the acquisition of Shares pursuant to the Offer or is otherwise related in any manner to, or otherwise affects, the Offer or (ii) could, in the sole judgment of the Company, materially affect the business, condition (financial or otherwise), income, operations or prospects of the Company and its subsidiaries, taken as a whole, or otherwise materially impair in any way the contemplated future conduct of the business of the Company and its subsidiaries, taken as a whole, or materially impair the Offer's contemplated benefits to the Company; or (b) there shall have been any action threatened or taken, or any approval withheld, or any statute, rule or regulation invoked, proposed, sought, promulgated, enacted, entered, amended, enforced or deemed to be applicable to the Offer or the Company or any of its subsidiaries, by any government or governmental regulatory or administrative authority or agency or tribunal, domestic, foreign or supranational, which, in the sole judgment of the Company, would or might directly or indirectly result in any of the consequences referred to in clause (i) or (ii) of paragraph (a) above; or (c) there shall have occurred (i) the declaration of any banking moratorium or any suspension of payments in respect of banks in the United States (whether or not mandatory); (ii) any general suspension of trading in, or limitation on prices for, securities on any U.S. national securities exchange or in the over-the-counter market; (iii) the commencement of a war, armed hostilities or any other national or international crisis directly or indirectly involving the United States; (iv) any limitation (whether or not mandatory) by any governmental, regulatory or administrative agency or authority on, or any event which, in the sole judgment of the Company might materially affect, the extension of credit by banks or other lending institutions in the United States; (v) any significant decrease in the market price of the Shares or in the market prices of equity securities generally in the United States or any change in the general political, market, economic or financial conditions in the United States or abroad that could have in the sole judgment of the Company a material adverse effect on the business, 19 20 condition (financial or otherwise), income, operations or prospects of the Company and its subsidiaries, taken as a whole, or on the trading in the Shares; (vi) in the case of any of the foregoing existing at the time of the announcement of the Offer, a material acceleration or worsening thereof; or (vii) any decline in either the Dow Jones Industrial Average or the S&P 500 Composite Index by an amount in excess of 10% measured from the close of business on July 17, 1998; or (d) any change shall occur or be threatened in the business, condition (financial or otherwise), income, operations or prospects of the Company and its subsidiaries, taken as a whole, which in the sole judgment of the Company is or may be material to the Company and its subsidiaries taken as a whole; or (e) a tender or exchange offer with respect to some or all of the Shares (other than the Offer), or a merger or acquisition proposal for the Company, shall have been proposed, announced or made by another person or shall have been publicly disclosed, or the Company shall have learned that (i) any person or "group" (within the meaning of Section 13(d)(3) of the Exchange Act) has acquired or proposes to acquire beneficial ownership of more than 5% of the outstanding Shares, whether through the acquisition of stock, the formation of a group, the grant of any option or right, or otherwise (other than as disclosed in a Schedule 13D or 13G (or an amendment thereto) on file with the Commission on July 17, 1998) or (ii) any such person or group that on or prior to July 17, 1998, had filed such a Schedule with the Commission thereafter shall have acquired or shall propose, to acquire whether through the acquisition of stock, the formation of a group, the grant of any option or right, or otherwise, beneficial ownership of additional Shares representing 2% or more of the outstanding Shares; or (f) any person or group shall have filed a Notification and Report Form under the Hart-Scott-Rodino Antitrust Improvements Act of 1976, as amended, reflecting an intent to acquire the Company or any of its Shares. The foregoing conditions are for the Company's sole benefit and may be asserted by the Company regardless of the circumstances giving rise to any such condition (including any action or inaction by the Company) or may be waived by the Company in whole or in part. The Company's failure at any time to exercise any of the foregoing rights shall not be deemed a waiver of any such right, and each such right shall be deemed an ongoing right that may be asserted at any time and from time to time. In certain circumstances, if the Company waives any of the foregoing conditions, it may be required to extend the Expiration Date of the Offer. Any determination by the Company concerning the events described above and any related judgment or decision by the Company regarding the inadvisability of proceeding with the purchase of or payment for any Shares tendered will be final and binding on all parties. 20 21 8. PRICE RANGE OF SHARES; DIVIDENDS. The Shares are listed and traded on the NYSE under the symbol "IAD." The high and low closing sales prices per Share on the NYSE Composite Tape as compiled from published financial sources and the dividends per Share for the periods indicated are listed below:
HIGH LOW DIVIDENDS ---- --- --------- 1996 First Quarter........................................ $29 $23 7/8 $0.05 Second Quarter....................................... 27 19 1/8 0.05 Third Quarter........................................ 19 7/8 16 3/4 0.05 Fourth Quarter....................................... 20 1/4 16 0.05 1997 First Quarter........................................ $21 $18 1/8 $0.05 Second Quarter....................................... 27 1/2 18 1/8 0.05 Third Quarter........................................ 27 3/8 20 0.05 Fourth Quarter....................................... 22 1/16 15 7/8 0.05 1998 First Quarter........................................ $29 1/2 $17 1/16 $0.05 Second Quarter....................................... 30 1/2 26 0.05 Third Quarter (through July 17, 1998)................ 28 3/4 27 1/8 0.05
On March 16, 1998, the last full trading day on the NYSE prior to the announcement of the ISC/Ispat Transaction, the closing per Share sales price as reported on the NYSE Composite Tape was $23.375. On July 17, 1998, the last full trading day before the announcement of the Offer, the closing per Share sales price as reported on NYSE Composite Tape was $28.75. The Company urges stockholders to obtain current quotations of the market price of the Shares. The Company has declared a regular quarterly dividend of $0.05 per Share, payable on August 1, 1998, to stockholders of record at the close of business on July 10, 1998. Stockholders of record at the close of business on July 10, 1998 who tender their Shares pursuant to the Offer will receive the dividend. On November 25, 1997, the Board of Directors adopted a Rights Agreement (the "Rights Agreement"), pursuant to which the Rights were distributed to stockholders of record at the close of business on December 17, 1997, on the basis of one Right for each Share held. In general, the Rights become exercisable or transferable only at the earliest of the close of business on the tenth day after (i) public announcement that an individual, firm, corporation, partnership or other entity (each, a "Person") has become the beneficial owner of 20% or more of the Shares then outstanding, (ii) the date that a tender offer or exchange offer by a Person other than the Company is published, sent or given, if such offer would result in such Person's becoming the beneficial owner of 20% or more of the Shares then outstanding, or (iii) the Board of Directors determined that any Person who owns at least 10% of the Shares is engaged in arbitrage or certain other adverse activities. Once exercisable, each Right entitles its holder to purchase from the Company one one-hundredth of a share of Series D Junior Participating Preferred Stock, par value $1.00 per share, at a purchase price of $80 per Right, subject to adjustment. In the event (A) any Person shall have acquired 20% or more of the Shares (subject to certain exceptions), or (B) the Board of Directors determines that any Person who owns at least 10% of the Shares is engaged in arbitrage or certain other adverse activities, each holder of a Right would be entitled to receive, upon exercise, (i) shares of common stock of the Company having a market value equal to two times the exercise price of the Right or (ii) in the event of a merger or other extraordinary corporate transaction in which shares of the acquiring Person are issued, shares of common stock of the acquiring Person having a market value equal to two times the exercise price of the Right. The Rights expire on December 17, 2007, and, subject to certain conditions, may be redeemed by the Board of Directors 21 22 at any time prior thereto at a price of $0.01 per Right. The Rights are not currently exercisable and trade together with the Shares associated therewith. Absent circumstances causing the Rights to become exercisable or separately tradeable prior to the Expiration Date, the tender of any Shares pursuant to the Offer will include the tender of the associated Rights. No separate consideration will be paid for such Rights. Upon the purchase of Shares by the Company pursuant to the Offer, the sellers of the Shares so purchased will no longer own the Rights associated with such Shares. The foregoing description of the Rights is qualified in its entirety by reference to the Rights Agreement, a copy of which has been included as an exhibit to the Company's Registration Statement on Form 8-A filed with the Commission on November 28, 1997, as amended on April 27, 1998. Such Form 8-A, as amended, and the exhibit thereto may be obtained from the Commission in the manner provided in Section 12. 9. BACKGROUND AND PURPOSE OF THE OFFER; CERTAIN EFFECTS OF THE OFFER. On July 16, 1998, Inland Steel Company, a wholly owned subsidiary of the Company that constituted the steel manufacturing and related operations segment of the Company's consolidated operations, merged with Inland Merger Sub, Inc., a subsidiary of Ispat, pursuant to the Merger Agreement among the Company, Inland Steel Company, Ispat and Inland Merger Sub, Inc. Inland Steel Company was the surviving company in the merger and became an indirect wholly owned subsidiary of Ispat. Pursuant to the merger, the Company received approximately $1.1 billion in cash in exchange for the outstanding common stock and preferred stock of Inland Steel Company and in connection with the repayment of intercompany debt of Inland Steel Company held by the Company. The Company's primary business is currently metals distribution and processing, conducted through its majority-owned subsidiary, Ryerson Tull. Pursuant to the Merger Agreement, the Company has agreed to indemnify Ispat for losses exceeding certain minimum amounts arising out of breaches of representations and warranties contained in the Merger Agreement and for expenditures relating to certain environmental liabilities subject in certain cases to losses exceeding certain minimum amounts, up to a maximum of $90 million in the aggregate, and for breaches of contracts and agreements contained in the Merger Agreement, which obligation is not subject to a maximum amount. In general, Ispat must make indemnification claims with respect to breaches of representations and warranties prior to March 31, 2000; however, claims relating to breaches of representations and warranties related to tax matters and certain organizational matters must be made within 90 days after the expiration of the applicable statute of limitations and claims with respect to breaches of representations and warranties related to environmental matters must be made prior to July 16, 2003. The Company has purchased environmental insurance payable directly to Ispat and Inland Steel Company, which insurance is expected to cover many of the environmental matters for which the Company has indemnified Ispat. As part of the ISC/Ispat Transaction, the Inland Steel Industries Pension Plan (the "ISC Pension Plan"), in which employees of both Inland Steel Company and the Company participated, was transferred to Inland Steel Company. The Company's remaining employees that participated in the ISC Pension Plan became participants in Ryerson Tull's pension plan. The ISC Pension Plan has unfunded benefit liabilities on a termination basis, as determined by the Pension Benefit Guaranty Corporation (the "PBGC"), an agency of the United States government. As a condition to consummating the ISC/Ispat Transaction, Ispat, Inland Steel Company, Ryerson Tull and the Company entered into an agreement with the PBGC to provide certain financial commitments to reduce the underfunding of the ISC Pension Plan and to secure ISC Pension Plan unfunded benefit liabilities on a termination basis. These requirements include a Ryerson Tull guaranty of $50 million, for five years, of the obligations of Ispat and Inland Steel Company to the PBGC in the event of a distress or involuntary termination of the ISC Pension Plan. The guaranty is included in the $90 million limit on the Company's indemnification obligations. 22 23 The Merger Agreement prohibits the Company and its material subsidiaries from entering into or permitting the sale of all or substantially all the assets of the Company or any of its material subsidiaries, any acquisition of a majority of the capital stock of the Company or any of its material subsidiaries by any person, or any merger, consolidation, reorganization, spin-off, split-up, recapitalization or similar transaction involving the Company or any of its material subsidiaries, or paying or declaring any extraordinary dividend (other than the distribution by the Company of the proceeds of the ISC/Ispat Transaction) without the written consent of Ispat, except where, subject to certain conditions, the net worth of the Company or any successor to the Company after any such transaction would be equal to or greater than the net worth of the Company prior to such transaction. The Company has committed to use its reasonable efforts to ensure that any counterparty to any transaction referred to in the preceding sentence expressly assumes the Company's indemnification obligations under the Merger Agreement. The Company has agreed that for a period of five years following the consummation of the ISC/ Ispat Transaction it will not engage in the manufacture, processing, sale, marketing or distribution of steel products or any other business conducted by Inland Steel Company as of the date of the Merger Agreement anywhere in the world that competes in any material respect with the business conducted by Inland Steel Company as of the date of the Merger Agreement. The Merger Agreement does not, however, restrict the Company's ability to own or conduct its other existing businesses, including the steel service, distribution and material processing businesses conducted by Ryerson Tull, or from expanding such businesses, so long as no such expansion includes, directly or through the ownership of an equity interest in any person, any business engaged in steel manufacturing or steel manufacturing assets, except that the Company may acquire an interest in any business (the "Acquired Business") some or all of the operations of which would otherwise violate the foregoing provisions (the "Competing Operations"), so long as the annual revenues attributed to the Competing Operations do not exceed 20% of the annual revenues of the Acquired Business or, if they do, the acquiring entity divests itself of the Competing Operations as soon as practicable, but no later than 12 months after such acquisition. The Company is required by the terms of the Merger Agreement to remove the word "Inland" from its name by November 16, 1998, and to discontinue use of the red diamond logo by January 16, 1999. Inland Steel Company and Nippon Steel Corporation ("NSC") are partners in I/N Tek, a cold-rolling mill. The I/N Tek joint venture is owned 60% by Inland Steel Company and 40% by NSC. I/N Tek has approximately $288 million in debt outstanding to three Japanese trading companies (the "I/N Tek Lenders"), the liability for which is borne by the I/N Tek partnership and guaranteed by the Company and NSC in proportion to their indirect ownership of I/N Tek. As a result of the ISC/Ispat Transaction, certain amendments were required to the lending agreements, including the substitution of Ispat for the Company as a guarantor of I/N Tek debt. The I/N Tek Lenders and the joint venture executed the appropriate amendments, but the effectiveness of such amendments is subject to the I/N Tek Lenders' subsequent receipt of appropriate internal approvals within 60 days in accordance with their customary procedures. In the event those approvals are not obtained, the I/N Tek Lenders would be entitled to accelerate repayment of the debt. Ispat and the Company have agreed that they will share equally the obligation to repay the outstanding I/N Tek debt and any costs and expenses that may arise in the event of an acceleration, including making interim loans to I/N Tek and pursuing a refinancing. In early July 1998, Inland Steel Company's No. 7 Blast Furnace experienced an outage caused by, among other factors, a lightning strike and resulting power outage. Inland Steel Company has business interruption insurance that is expected to mitigate the loss to Inland Steel Company as a result of the outage. In the event coverage is denied for such outage, the Company has agreed to indemnify Inland Steel Company for any substantiated business interruption loss of Inland Steel Company incurred after the closing of the ISC/Ispat Transaction resulting from the No. 7 outage. Such indemnification is not subject to the $90 million maximum described above; however, the Company believes that the likelihood of a significant payment pursuant to the No. 7 outage is minimal. 23 24 The Company has used $56.3 million of the proceeds of the ISC/Ispat Transaction to redeem 1,145,394 shares of its Series E Preferred Stock held by LaSalle, as ESOP Trustee, at a price per share of $48.946 plus accrued and unpaid dividends (these shares were held for the benefit of employees remaining with Inland Steel Company following the completion of the ISC/Ispat Transaction), and intends to use up to $867 million of the proceeds from the ISC/Ispat Transaction to pay for Shares tendered in the Offer. Following the Offer, the Company is considering using up to $130 million to redeem the remaining outstanding shares of Series E Preferred Stock and retire the related ESOP loan and approximately $115 million to prepay a subordinated voting note held by NSC. The Company is currently considering combining the Company and Ryerson Tull through a merger of Ryerson Tull into the Company or a wholly owned subsidiary of the Company. It is expected that any such transaction will be negotiated with the independent directors of Ryerson Tull or a committee of such directors. A merger of Ryerson Tull into the Company or into a subsidiary of the Company would require the approval of the holders of a majority of Ryerson Tull's outstanding common stock and, in the case of a merger into the Company, may require the approval of the holders of a majority of the Company's voting stock. The Company owns approximately 87% of the outstanding common stock and approximately 96% of the voting power of Ryerson Tull. Since the voting power of the Company's Ryerson Tull shares exceeds the majority vote required to approve a merger of Ryerson Tull into the Company or a subsidiary of the Company, approval of such a merger by Ryerson Tull's stockholders would be assured. If Ryerson Tull is merged into the Company or a subsidiary of the Company, Ryerson Tull's stockholders would become stockholders of the Company. It is expected that the directors of the Company who are not also directors of Ryerson Tull will resign and the other members of the board of directors of Ryerson Tull will become directors of the Company following the merger. The Board of Directors has not yet determined the form or terms of any merger between the Company and Ryerson Tull, and there can be no assurance that a combination of the two companies will be achieved. It is expected that Robert J. Darnall, the Company's Chairman, President and Chief Executive Officer and Chairman of Ryerson Tull, will continue in these positions through the contemplated combination of the Company and Ryerson Tull described above. It is also expected that Mr. Darnall will assume responsibility for Ispat's North American steel operations following the contemplated combination. The RT Pension Plan is fully funded as measured under generally accepted accounting principles. The RT Pension Plan has unfunded benefit liabilities, however, as determined on a plan termination basis which, using the actuarial assumptions of the PBGC, could be as much as $170 million. The PBGC believes that the Company and Ryerson Tull should provide additional security for the unfunded benefit liabilities of the RT Pension Plan, and the PBGC has asked the Company and Ryerson Tull to enter into an agreement with the PBGC that would last at least five years, under which the PBGC would forebear from instituting proceedings for involuntary termination of the RT Pension Plan. While the Company and Ryerson Tull believe, based on Ryerson Tull's retirement age experience, that the PBGC's actuarial assumptions substantially overstate the amount of unfunded benefit liabilities and that additional security does not need to be provided for the unfunded benefit liabilities, the Company and Ryerson Tull are negotiating with the PBGC to resolve these issues. The Company is making the Offer to distribute to those stockholders of the Company desiring liquidity a substantial portion of the net proceeds from the ISC/Ispat Transaction and to afford such stockholders an opportunity to sell all or a portion of their Shares without the usual transaction costs associated with open market sales. The Offer provides stockholders who are considering a sale of all or a portion of their Shares the opportunity to determine the price or prices (not greater than $34.00 nor less than $30.00 per Share) at which they are willing to sell their Shares and, if any of such Shares are purchased pursuant to the Offer, to sell those Shares for cash to the Company without the usual costs 24 25 associated with a market sale. The Offer gives stockholders an opportunity to sell their Shares at a price greater than the prevailing market prices of the Shares immediately prior to the announcement of the Offer. The Offer would also allow Odd Lot Owners whose Shares are purchased pursuant to the Offer to avoid both the payment of brokerage commissions and any applicable odd lot discounts payable on sales of odd lots on a securities exchange. To the extent the purchase of Shares in the Offer results in a reduction in the number of stockholders of record, the costs to the Company for services to stockholders should be reduced. Stockholders who determine not to accept the Offer will increase their proportionate interest in the Company's equity, and therefore in the Company's future earnings and assets, subject to the Company's right to issue additional Shares and other equity securities in the future. THE BOARD OF DIRECTORS HAS UNANIMOUSLY APPROVED THE OFFER. HOWEVER, STOCKHOLDERS MUST MAKE THEIR OWN DECISIONS WHETHER TO TENDER SHARES AND, IF SO, HOW MANY SHARES TO TENDER AND THE PRICE OR PRICES AT WHICH SHARES SHOULD BE TENDERED. NEITHER THE COMPANY NOR ITS BOARD OF DIRECTORS MAKES ANY RECOMMENDATION TO ANY STOCKHOLDER AS TO WHETHER TO TENDER OR REFRAIN FROM TENDERING SHARES. SEE SECTION 10 FOR INFORMATION REGARDING THE INTENTIONS OF THE COMPANY'S DIRECTORS AND EXECUTIVE OFFICERS WITH RESPECT TO TENDERING SHARES PURSUANT TO THE OFFER. Shares that the Company acquires pursuant to the Offer will become authorized and issued, but not outstanding, Shares and will be available for sale by the Company without further stockholder action (except as may be required by applicable law or the rules of the securities exchanges on which the Shares are listed) for purposes including, but not limited to, the acquisition of other businesses, raising of additional capital for use in the Company's businesses, and satisfaction of obligations under existing or future employee benefit plans. If Ryerson Tull is merged into the Company or a subsidiary of the Company, in order to consummate the merger, the Company may elect to distribute to the stockholders of Ryerson Tull other than the Company a portion of the Shares repurchased pursuant to the Offer. Except as mentioned in the previous sentence, the Company has no plans or commitments to sell, distribute or repurchase Shares. Except as disclosed in this Offer to Purchase, the Company currently has no plans or proposals that relate to or would result in (a) the acquisition by any person of additional securities of the Company or the disposition of securities of the Company; (b) an extraordinary corporate transaction, such as a merger, reorganization or liquidation, involving the Company or any or all of its subsidiaries; (c) a sale or transfer of a material amount of assets of the Company or any of its subsidiaries; (d) any change in the present Board of Directors or management of the Company; (e) any material change in the present dividend rate or policy, or indebtedness or capitalization of the Company; (f) any other material change in the Company's corporate structure or business; (g) any change in the Company's Certificate of Incorporation or By-Laws or any actions which may impede the acquisition of control of the Company by any person; (h) a class of equity security of the Company being delisted from a national securities exchange; (i) a class of equity security of the Company becoming eligible for termination of registration pursuant to Section 12(g)(4) of the Exchange Act; or (j) the suspension of the Company's obligation to file reports pursuant to Section 15(d) of the Exchange Act. 10. INTERESTS OF DIRECTORS AND EXECUTIVE OFFICERS; TRANSACTIONS AND ARRANGEMENTS CONCERNING THE SHARES. As of July 17, 1998, there were 49,226,317 Shares outstanding, 90,801 Shares issuable upon conversion of the Company's Series A Preferred Stock, 1,819,634 Shares issuable upon conversion of the Company's Series E Preferred Stock and 2,595,991 Shares issuable upon the exercise of all outstanding Options. As of July 17, 1998, directors and executive officers of the Company and Ryerson Tull as a group (26 persons) beneficially owned 872,822 Shares, which constituted approximately 1.6% of the outstanding Shares (including Shares issuable upon conversion of the 25 26 Series A Preferred Stock, the Series E Preferred Stock and the exercise of Options held by the Company's directors and executive officers exercisable within 60 days of such date) at such time. If the Company purchases 25,500,000 Shares pursuant to the Offer (approximately 51.8% of the outstanding Shares as of July 17, 1998, approximately 47.5% assuming the conversion of all outstanding shares of Series A Preferred Stock and Series E Preferred Stock and the exercise of all outstanding Options) and no director or executive officer tenders Shares pursuant to the Offer, then after the purchase of Shares pursuant to the Offer, the Company's directors and executive officers as a group would beneficially own approximately 3.1% of the outstanding Shares (including Shares issuable upon conversion of the Series A Preferred Stock, the Series E Preferred Stock and the exercise of Options held by the Company's executive officers exercisable within 60 days of such date). The Company's directors and executive officers are permitted to tender their Shares to the Company pursuant to the Offer, which Shares will be accepted and purchased on the same terms as all Shares accepted and purchased from stockholders pursuant to the Offer. The Company has been advised that 15 directors and officers will not be tendering and that the following 11 directors and executive officers intend to tender an aggregate of 151,553 Shares or approximately 17.7% of the total Shares beneficially owned by directors and executive officers as a group in the following amounts (and approximate percentages of each individual's holdings): A. Robert Abboud, Director, 3,651 Shares (50%); Robert J. Darnall, Chairman, President, Chief Executive Officer and Director, 50,000 Shares (11%); Leo F. Mullin, Director, 900 Shares (50%); Jean-Pierre Rosso, Director, 933 Shares (50%); Joshua I. Smith, Director, 1,410 Shares (60%); Vicki L. Avril, Treasurer and Director -- Corporate Planning, 10,000 Shares (22%); Jay M. Gratz, Vice President and Chief Financial Officer, 26,100 Shares (25%); George A Ranney, Jr., Vice President and General Counsel, 15,000 Shares (26%); Charles B. Salowitz, Secretary and Associate General Counsel, 36,593 Shares (100%); Donald S. Perkins, Director of Ryerson Tull, 4,046 Shares (100%); and Lily L. May, Controller of Ryerson Tull, 812 Shares (100%). None of the foregoing persons has indicated at what price he or she intends to tender Shares. In addition, James M. Hemphill, Controller, and H. William Howard, Vice President -- Information Technology, have indicated that they have not determined whether to tender Shares in the Offer, but they reserve their rights to do so. As of July 17, 1998, Nancy H. Teeters, a director of the Company, was travelling internationally. The Company attempted to contact her with respect to her intentions regarding tendering Shares, but was unable to reach her. Other than as set forth in the preceding sentences, the Company has been advised that no other Director or executive officer of the Company intends to tender Shares in the Offer. Based on the Company's records and information provided to the Company by its directors, executive officers, associates and subsidiaries, except as set forth on Schedule I hereto, neither the Company nor any of its associates or subsidiaries or persons controlling the Company nor, to the best of the Company's knowledge, any of the directors or executive officers of the Company, nor any associates of such directors or executive officers, has effected any transactions in the Shares during the 40 business days prior to the date hereof. Except as set forth in this Offer to Purchase, neither the Company nor any person controlling the Company nor, to the Company's knowledge, any of its directors or executive officers, is a party to any contract, arrangement, understanding or relationship with any other person relating, directly or indirectly, to the Offer with respect to any securities of the Company (including, but not limited to, any contract, arrangement, understanding or relationship concerning the transfer or the voting of any such securities, joint ventures, loan or option arrangements, puts or calls, guarantees of loans, guarantees against loss or the giving or withholding of proxies, consents or authorizations). 11. SOURCE AND AMOUNT OF FUNDS. Assuming that the Company purchases 25,500,000 Shares pursuant to the Offer at the maximum specified purchase price of $34.00 per Share, the Company expects the maximum aggregate cost, including all fees and expenses applicable to the Offer, to be approximately 26 27 $870 million. The Company anticipates that all of the funds necessary to pay such amounts will be provided from the ISC/Ispat Transaction. See Section 9. 12. CERTAIN INFORMATION ABOUT THE COMPANY. The Company is the holder of stock representing approximately 87% of the economic interest in Ryerson Tull which is, in turn, the sole stockholder of Joseph T. Ryerson & Son, Inc. ("Ryerson") and J.M. Tull Metals Company, Inc. ("Tull"). Ryerson and Tull are leading steel service, distribution and materials processing organizations. Ryerson Tull believes that it is the largest metals service center in the United States based on sales revenue, with 1997 sales of $2.8 billion and a current U.S. market share of approximately 10%, based on Ryerson Tull's analysis of data prepared by the Steel Service Center Institute. Ryerson Tull distributes and processes metals and other materials throughout the continental United States. The principal executive office of the Company is located at 30 West Monroe Street, Chicago, Illinois 60603. SUMMARY HISTORICAL AND PRO FORMA FINANCIAL INFORMATION The following summary historical information as of and for each of the two fiscal years ended December 31, 1997 was derived from the audited consolidated financial statements included in the Company's Current Report on Form 8-K dated July 16, 1998 (the "Form 8-K"). The following summary historical financial information as of and for the three months ended March 31, 1997 and 1998 was derived from the unaudited consolidated condensed financial statements included in the Form 8-K, which is hereby incorporated herein by reference, and other information and data contained in the Form 8-K. More comprehensive financial information is included in such report, and the financial information that follows is qualified in its entirety by reference to such report, as such report may be amended from time to time, and all the financial statements and related notes contained therein, copies of which may be obtained as set forth below under the caption "Additional Information." The summary historical financial information as of and for the three months ended March 31, 1997 and 1998 is unaudited and was derived from the accounting records of the Company. In the opinion of management of the Company, the summary historical financial information as of and for the three months ended March 31, 1997 and 1998 includes all adjustments (consisting only of normal recurring adjustments, after restating for discontinued operations) necessary to present fairly the information set forth therein. Results for an interim period are not necessarily indicative of the results of operation for any future period. 27 28 SUMMARY HISTORICAL CONSOLIDATED FINANCIAL INFORMATION (DOLLARS IN MILLIONS, EXCEPT PER SHARE AMOUNTS)
THREE MONTHS ENDED YEARS ENDED MARCH 31, DECEMBER 31, -------------------- -------------------- 1998 1997 1997 1996 ---- ---- ---- ---- INCOME STATEMENT DATA: Sales............................................... $ 740.8 $ 664.2 $2,804.0 $2,407.9 Income before income taxes.......................... 30.4 31.9 119.5 128.5 Income from continuing operations................... $ 16.5 $ 17.5 $ 64.5 $ 78.1 Income from discontinued operations................. 5.3 13.7 54.8 (17.9) Extraordinary loss on early retirement of debt...... -- -- -- (14.5) -------- -------- -------- -------- Net income.......................................... 21.8 31.2 119.3 45.7 Dividends on preferred stock........................ 2.3 2.3 9.1 9.1 -------- -------- -------- -------- Net income applicable to common stock............... $ 19.5 $ 28.9 $ 110.2 $ 36.6 ======== ======== ======== ======== Basic earnings per share: Income from continuing operations................. $ .29 $ .31 $ 1.13 $ 1.42 Income from discontinued operations............... .11 .28 1.12 (.37) Extraordinary loss on early retirement of debt.... -- -- -- (.30) -------- -------- -------- -------- Net income..................................... $ .40 $ .59 $ 2.25 $ .75 ======== ======== ======== ======== Diluted earnings per share: Income from continuing operations................. $ .28 $ .30 $ 1.08 $ 1.34 Income from discontinued operations............... .10 .26 1.05 (.34) Extraordinary loss on early retirement of debt.... -- -- -- (.28) -------- -------- -------- -------- Net income..................................... $ .38 $ .56 $ 2.13 $ .72 ======== ======== ======== ======== Average shares outstanding (in thousands): Basic............................................. 48,994 48,918 48,887 48,816 Effect of dilutive securities..................... 3,025 3,009 3,014 3,021 -------- -------- -------- -------- Diluted........................................... 52,019 51,927 51,901 51,837 ======== ======== ======== ======== Ratio of income from continuing operations to fixed charges(1)........................................ 2.93 2.86 2.82 2.81
AT MARCH 31, AT DECEMBER 31, -------------------- -------------------- 1998 1997 1997 1996 ---- ---- ---- ---- BALANCE SHEET DATA: Working capital..................................... $ 665.5 $ 698.6 $ 660.2 $ 691.0 Investment in Inland Steel Company.................. 454.0 -- -- -- Total assets........................................ 1,847.6 3,597.5 3,646.5 3,541.6 Total assets, less goodwill......................... 1,766.4 3,530.1 3,564.2 3,519.3 Total debt.......................................... 454.6 794.6 767.6 792.8 Total liabilities................................... 844.3 2,695.7 2,660.8 2,671.5 Stockholders' equity................................ 920.9 819.6 900.1 789.0 Common stockholders' equity per share outstanding... 17.63 15.85 17.27 15.27
- --------------- (1) The ratios of income from continuing operations to fixed charges were computed by dividing earnings from continuing operations before fixed charges and income taxes by fixed charges from continuing operations. Fixed charges from continuing operations consist of interest and debt expense, the pretax equivalent of preferred dividends and one-third of rent expense, which approximates the interest factor. 28 29 SUMMARY UNAUDITED CONSOLIDATED PRO FORMA FINANCIAL INFORMATION The following summary unaudited consolidated pro forma financial information gives effect to the ISC/Ispat Transaction, the purchase of the Series E Preferred Stock held for the benefit of employees remaining with Inland Steel Company following the ISC/Ispat Transaction and the purchase of the Shares pursuant to the Offer, based on certain assumptions described in the Notes to the Summary Unaudited Consolidated Pro Forma Financial Information. The income statement data eliminates the income from discontinued operations reflected in the historical income statement and gives effect to the purchase of the Series E Preferred Stock and the purchase of Shares pursuant to the Offer as if it had occurred on January 1, 1997. The balance sheet data gives effect to the ISC/Ispat Transaction, the repurchase of the Series E Preferred Stock and the Offer as if each had occurred as of the date of the balance sheet data presented. The summary unaudited consolidated pro forma financial information does not give effect to the possible redemption of the remaining outstanding shares of Series E Preferred Stock and retirement of the related ESOP loan or the anticipated prepayment of a subordinated voting note held by NSC. The summary unaudited consolidated pro forma information should be read in conjunction with the summary consolidated historical financial information and does not purport to be indicative of the results that would actually have been achieved had the purchase of the Shares pursuant to the Offer been completed on the dates indicated or that may be achieved in the future. 29 30 SUMMARY UNAUDITED PRO FORMA CONSOLIDATED FINANCIAL INFORMATION (DOLLARS IN MILLIONS, EXCEPT PER SHARE AMOUNTS)
THREE MONTHS ENDED YEAR ENDED MARCH 31, 1998 DECEMBER 31, 1997 -------------------------- ------------------------------ PRO FORMA(1)(2) PRO FORMA(1)(2) ----------------- ------------------- ASSUMED ASSUMED PURCHASE PURCHASE PRICE PRICE ----------------- ------------------- $30 PER $34 PER $30 PER $34 PER ACTUAL SHARE SHARE ACTUAL SHARE SHARE ------ ------- ------- ------ ------- ------- INCOME STATEMENT DATA: Sales................................ $740.8 $740.8 $740.8 $2,804.0.. $2,804.0 $2,804.0 Income before income taxes........... 30.4 30.4 30.4 119.5 119.5 119.5 Income from continuing operations.... $ 16.5 $ 16.5 $ 16.5 $ 64.5 $ 64.5 $ 64.5 Income from discontinued operations(3)...................... 5.3 -- -- 54.8 -- -- ------ ------ ------ -------- -------- -------- Net income........................... 21.8 16.5 16.5 119.3 64.5 64.5 Dividends on preferred stock......... 2.3 1.6 1.6 9.1 6.5 6.5 ------ ------ ------ -------- -------- -------- Net income applicable to common stock.............................. $ 19.5 $ 14.9 $ 14.9 $ 110.2 $ 58.0 $ 58.0 ====== ====== ====== ======== ======== ======== Basic earnings per share: Income from continuing operations...................... $ .29 $ .63 $ .63 $ 1.13 $ 2.48 $ 2.48 Income from discontinued operations...................... .11 -- -- 1.12 -- -- ------ ------ ------ -------- -------- -------- Net income...................... $ .40 $ .63 $ .63 $ 2.25 $ 2.48 $ 2.48 ====== ====== ====== ======== ======== ======== Diluted earnings per share(4): Income from continuing operations...................... $ .28 $ .59 $ .59 $ 1.08 $ 2.31 $ 2.31 Income from discontinued operations...................... .10 -- -- 1.05 -- -- ------ ------ ------ -------- -------- -------- Net income...................... $ .38 $ .59 $ .59 $ 2.13 $ 2.31 $ 2.31 ====== ====== ====== ======== ======== ======== Average shares outstanding (in thousands): Basic.............................. 48,994 23,494 23,494 48,887 23,387 23,387 Effect of dilutive securities(4)... 3,025 1,880 1,880 3,014 1,869 1,869 ------ ------ ------ -------- -------- -------- Diluted............................ 52,019 25,374 25,374 51,901 25,256 25,256 ====== ====== ====== ======== ======== ======== Ratio of income from continuing operations to fixed charges(5)..... 2.93 3.15 3.15 2.82 3.02 3.02
AT MARCH 31, 1998 AT DECEMBER 31, 1997 ------------------------------ ------------------------------ PRO FORMA(1)(2) PRO FORMA(1)(2) ------------------- ------------------- ASSUMED PURCHASE ASSUMED PURCHASE PRICE PRICE ------------------- ------------------- $30 PER $34 PER $30 PER $34 PER ACTUAL SHARE SHARE ACTUAL SHARE SHARE ------ ------- ------- ------ ------- ------- BALANCE SHEET DATA: Working capital................. $ 665.5 $ 793.7 $ 691.7 $ 660.2 $ 781.6 $ 679.6 Investment in Inland Steel Company(3).................... 454.0 -- -- -- -- -- Total assets.................... 1,847.6 1,529.6 1,427.6 3,646.5 1,516.8 1,414.8 Total assets, less goodwill..... 1,766.4 1,448.4 1,346.4 3,564.2 1,434.5 1,332.5 Total debt...................... 454.6 454.6 454.6 767.6 459.8 459.8 Total liabilities............... 844.3 847.2 847.2 2,660.8 851.8 851.8 Stockholders' equity(6)......... 920.9 600.0 498.0 900.1 579.3 477.3 Common stockholders' equity per share outstanding............. 17.63 25.51 21.15 17.27 24.73 20.39
30 31 NOTES TO SUMMARY UNAUDITED CONSOLIDATED PRO FORMA FINANCIAL STATEMENTS The following assumptions were used in determining the pro forma financial information: (1) The information assumes that a portion of the cash proceeds from the ISC/Ispat Transaction, which closed on July 16, 1998, was used to purchase Shares pursuant to the Offer. (2) The information assumes 25,500,000 Shares are purchased at $30 per Share and at $34 per Share from a portion of the proceeds received from the ISC/Ispat Transaction, which was assumed to have occurred at the beginning of the periods presented. There can be no assurance that the Company will purchase 25,500,000 Shares in the Offer or the price at which such Shares will be purchased. The information also assumes that the redemption of the 1,145,394 shares of Series E Preferred Stock at $49.12 per share had occurred at the beginning of each such period. (3) Income from discontinued operations and the assets of Inland Steel Company have been eliminated from the pro forma presentation as if the ISC/Ispat Transaction had occurred as of the beginning of each period. (4) The effect of diluted securities in the pro forma presentation does not reflect any change in conversion ratios required as a result of the Offer. (5) The ratios of income from continuing operations to fixed charges were computed by dividing earnings from continuing operations before fixed charges and income taxes by fixed charges from continuing operations. Fixed charges from continuing operations consist of interest and debt expense, the pretax equivalent of preferred dividends and one-third of rent expense, which approximates the interest factor. (6) Expenses directly related to the Offer were assumed to be $3.0 million and were charged against additional contributed capital. RECENT FINANCIAL INFORMATION On July 20, 1998, the Company announced its results for the second quarter of 1998. The Company reported net income of $28.4 million for the second quarter of 1998, consisting of $15.5 million from continuing operations and $12.9 million from discontinued operations. In the year-earlier quarter, the Company reported net income of $40.1 million, $19.1 million from continuing operations and $21.0 million from discontinued operations. For the first six months of this year, the Company's net income totaled $50.2 million, consisting of $32.0 million from continuing operations and $18.2 million from discontinued operations. For the first half of 1997, net income totaled $71.3 million, $36.6 million from continuing operations and $34.7 million from discontinued operations. Basic earnings per share totaled 53 cents for the second quarter and 93 cents for the first half of 1998, compared with 77 cents for the second quarter and $1.36 for the first half of 1997. Diluted earnings per share totaled 51 cents for the second quarter and 88 cents for the first half of 1998, compared with 73 cents for the second quarter and $1.29 for the first half of 1997. ADDITIONAL INFORMATION The Company is subject to the informational filing requirements of the Exchange Act and, in accordance therewith, is obligated to file reports and other information with the Commission relating to its business, financial condition and other matters. Information, as of particular dates, concerning the Company's directors and officers, their remuneration, options granted to them, the principal holders of the Company's securities and any material interests of such persons in transactions with the Company is required to be disclosed in proxy statements distributed to the Company's stockholders and filed with the Commission. The Company has also filed an Issuer Tender Offer Statement on Schedule 13E-4 (the "Schedule 13E-4") with the Commission, which includes additional information with respect to the Offer. Such reports, proxy statements and other information can be 31 32 inspected and copied at the public reference facilities maintained by the Commission at 450 Fifth Street, N.W., Washington, D.C. 20549; and at its regional offices located at 500 West Madison Street, Suite 1400, Chicago, Illinois 60661 and 7 World Trade Center, New York, New York 10048. Copies of such material may also be obtained by mail, upon payment of the Commission's customary charges, from the Public Reference Section of the Commission at Judiciary Plaza, 450 Fifth Street, N.W., Washington, D.C. 20549. The Commission also maintains a Web site on the World Wide Web at http://www.sec.gov that contains reports, proxy statements and other information regarding registrants that file electronically with the Commission. Such reports, proxy statements and other information concerning the Company also can be inspected at the offices of the NYSE, 20 Broad Street, New York, New York 10005. The Company's Schedule 13E-4 may not be available at the Commission's regional offices. 13. EFFECTS OF THE OFFER ON THE MARKET FOR SHARES; REGISTRATION UNDER THE EXCHANGE ACT. The Company's purchase of Shares pursuant to the Offer will reduce the number of Shares that might otherwise trade publicly and is likely to reduce the number of stockholders. Nonetheless, the Company believes that there will still be a sufficient number of Shares outstanding and publicly traded following the Offer to ensure a continued trading market in the Shares. Based on the published guidelines of the NYSE, the Company does not believe that its purchase of Shares pursuant to the Offer will cause its remaining Shares to be delisted from any such exchange. The Shares are currently "margin securities" under the rules of the Federal Reserve Board. This has the effect, among other things, of allowing brokers to extend credit on the collateral of the Shares. The Company believes that, following the purchase of Shares pursuant to the Offer, the Shares will continue to be "margin securities" for purposes of the Federal Reserve Board's margin regulations. The Shares are registered under the Exchange Act, which requires, among other things, that the Company furnish certain information to its stockholders and to the Commission and comply with the Commission's proxy rules in connection with meetings of the Company's stockholders. The Company believes that its purchase of Shares pursuant to the Offer will not result in the Shares becoming eligible for deregistration under the Exchange Act. 14. CERTAIN LEGAL MATTERS; REGULATORY APPROVALS. The Company is not aware of any license or regulatory permit material to its business that might be adversely affected by its acquisition of Shares as contemplated in the Offer, or of any approval or other action by any government or governmental, administrative or regulatory authority or agency, domestic, foreign or supranational, that would be required for the Company's acquisition or ownership of Shares as contemplated by the Offer. Should any such approval or other action be required, the Company currently contemplates that it will seek such approval or other action. The Company cannot predict whether it may determine that it is required to delay the acceptance for payment of, or payment for, Shares tendered pursuant to the Offer pending the outcome of any such matter. There can be no assurance that any such approval or other action, if needed, would be obtained or would be obtained without substantial conditions, or that the failure to obtain any such approval or other action might not result in adverse consequences to the Company's business. The Company's obligations under the Offer to accept for payment and pay for Shares are subject to certain conditions. See Section 7. 15. CERTAIN U.S. FEDERAL INCOME TAX CONSEQUENCES. The following summary describes certain U.S. federal income tax consequences to holders of Shares relevant to the Offer. Holders of Shares who also own other equity interests such as Series A Preferred Stock, including interests constructively owned pursuant to the rules discussed below, are urged to consult their own tax advisors as to the tax consequences of the Offer. The 32 33 discussion contained in this summary is based upon the Internal Revenue Code of 1986, as amended to the date hereof (the "Code"), existing and proposed Treasury regulations promulgated thereunder, rulings, administrative pronouncements and judicial decisions, changes to which could materially affect the tax consequences described herein and could be made on a retroactive basis. This summary discusses only Shares held as capital assets, within the meaning of Section 1221 of the Code. This summary does not address all of the tax consequences that may be relevant to particular stockholders in light of their personal circumstances, or to certain types of stockholders (such as certain financial institutions, dealers in securities or commodities, securities traders that elect to mark to market, foreign persons, insurance companies, tax-exempt organizations or persons who hold Shares as a position in a "straddle" or as a part of a "hedging" or "conversion" transaction for U.S. federal income tax purposes). Additional or alternative tax consequences may apply with respect to Shares acquired as compensation (including Shares acquired upon the exercise of options or which were or are subject to forfeiture restrictions). In particular, the discussion of the consequences of an exchange of Shares for cash pursuant to the Offer applies only to a United States Holder. For purposes of this summary, a "United States Holder" is a holder of Shares that is (a) a citizen or resident of the United States, (b) a corporation, partnership or other entity created or organized in or under the laws of the United States, any state or any political subdivision thereof, (c) an estate the income of which is subject to U.S. federal income taxation regardless of its source or (d) a trust whose administration is subject to the primary supervision of a U.S. court and which has one or more U.S. persons who have the authority to control all substantial decisions of the trust. The summary also does not address the state, local or foreign tax consequences of participating in the Offer. EACH STOCKHOLDER SHOULD CONSULT SUCH STOCKHOLDER'S TAX ADVISOR AS TO THE PARTICULAR CONSEQUENCES OF PARTICIPATION IN THE OFFER. United States Holders Who Receive Cash Pursuant to the Offer. An exchange of Shares for cash pursuant to the Offer by a United States Holder will be a taxable transaction for U.S. federal income tax purposes. As a consequence of the exchange, a United States Holder will, depending on such holder's particular circumstances, be treated either as having sold such holder's Shares or as having received a dividend distribution from the Company, with the tax consequences described below. Under Section 302 of the Code, a United States Holder whose Shares are exchanged for cash pursuant to the Offer will be treated as having sold such holder's Shares, rather than as having received a dividend, if the exchange (a) results in a "complete termination" of such holder's equity interest in the Company, (b) is "substantially disproportionate" with respect to such holder or (c) is "not essentially equivalent to a dividend" with respect to the holder, each as discussed below. In applying these constructive ownership rules, in addition to Shares actually owned by a United States Holder, such holder will be deemed to constructively own Shares actually or constructively owned by certain related entities and individuals. For purposes of these constructive ownership rules, a holder of Options to acquire Shares is deemed to constructively own those Shares even if the Option is not exercised. If a United States Holder sells Shares to persons other than the Company at or about the time such holder also sells Shares to the Company pursuant to the Offer, and the various sales effected by the holder are part of an overall plan to reduce or terminate such holder's proportionate interest in the Company, then the sales to persons other than the Company may, for U.S. federal income tax purposes, be integrated with the holder's sale of Shares pursuant to the Offer and, if integrated, should be taken into account in determining whether the holder satisfies any of the three tests described below. A United States Holder will satisfy the "complete termination" test if all Shares actually or constructively owned by such holder are exchanged for cash pursuant to the Offer. 33 34 A United States Holder will satisfy the "substantially disproportionate" test if a holder's percentage interest in the Company (i.e., the number of Shares actually and constructively owned by such holder divided by the number of Shares outstanding) after the exchange is less than 80% of such holder's percentage interest in the Company prior to the exchange. A United States Holder will satisfy the "not essentially equivalent to a dividend" test if the reduction in such holder's percentage interest in the Company, as described above, constitutes a "meaningful reduction" given such holder's particular facts and circumstances. The IRS has indicated in published rulings that any reduction in the percentage interest of a stockholder whose relative stock interest in a publicly held corporation is minimal (an interest of less than 1% should satisfy this requirement) and who exercises no control over corporate affairs should constitute such a "meaningful reduction." The Company cannot predict whether or to what extent the Offer will be oversubscribed. If the Offer is oversubscribed, proration of tenders pursuant to the Offer will cause the Company to accept fewer Shares than are tendered. Therefore, a holder can be given no assurance that a sufficient number of such holder's Shares will be exchanged pursuant to the Offer to ensure that such exchange will be treated as a sale, rather than as a dividend, for U.S. federal income tax purposes pursuant to the rules discussed above. A holder may wish to condition the tender on a minimum number of Shares being redeemed as described in Section 6 above, so that none of such holder's Shares are redeemed unless the Company accepts a sufficient number of his Shares so that he satisfies one or more of the tests described above. While such a conditional tender may ensure that a redemption of a holder's Shares would be treated as an exchange for federal income tax purposes, a conditional tender may result in no Shares being accepted by the Company. In determining the minimum number of Shares to be accepted for purchase in a conditional tender, a holder should take into account Shares constructively owned by the holder pursuant to the rules discussed above. SHAREHOLDERS CONSIDERING A CONDITIONAL TENDER ARE URGED TO CONSULT WITH THEIR TAX ADVISORS REGARDING THE RELATIVE ADVANTAGES AND DISADVANTAGES OF SUCH A TENDER. If a United States Holder is treated as having sold such holder's Shares under the tests described above, such holder will recognize gain or loss equal to the difference between the amount of cash received and such holder's tax basis in the Shares exchanged therefor. Any capital gain or loss so recognized generally will be long-term capital gain or loss if the holding period for the holder's Shares surrendered exceeds one year. In the case of a United States Holder that is an individual, such capital gain or loss will be taxed at a maximum rate of 28%, if such holder's holding period is more than one year but not more than 18 months, and at a maximum rate of 20% if such holder's holding period is more than 18 months. Congress recently passed the "Internal Revenue Service Restructuring and Reform Act of 1998." If, as expected, this Act is signed into law by the President, the 20% rate will apply to Shares held for more than one year. A United States Holder's ability to deduct capital losses from ordinary income is limited. If a United States Holder who exchanges Shares pursuant to the Offer is not treated under Section 302 as having sold such holder's Shares for cash, the entire amount of cash received by such holder will be treated as a dividend to the extent of the Company's current and accumulated earnings and profits, which the Company anticipates will be sufficient to cover the amount of any such dividend and will be includible in the holder's gross income as ordinary income in its entirety, without reduction for the tax basis of the Shares exchanged. No loss will be recognized. As to an exchange which is treated as a dividend, a United States Holder's tax basis in the Shares exchanged generally will be added to such holder's tax basis in such holder's remaining Shares. To the extent that cash received in exchange for Shares is treated as a dividend to a corporate United States Holder, such holder will be (i) eligible for a dividends-received deduction (subject to applicable limitations) and (ii) subject to the "extraordinary dividend" provisions of the Code. To the extent, if any, that the cash received by a United States Holder exceeds the Company's current and accumulated earnings and profits, it will be treated first as a tax-free return of such holder's tax basis in the Shares and thereafter as capital gain. 34 35 Stockholders Who Do Not Receive Cash Pursuant to the Offer. Stockholders whose Shares are not exchanged pursuant to the Offer will not incur any tax liability as a result of the consummation of the Offer. Backup Federal Income Tax Withholding. Under the U.S. federal income tax backup withholding rules, unless an exemption applies under the applicable law and regulations, 31% of the gross proceeds payable to a stockholder or other payee pursuant to the Offer must be withheld by the Depositary and remitted to the United States Treasury, unless the stockholder or other payee provides such person's taxpayer identification number (employer identification number or social security number) to the Depositary and certifies under penalties of perjury that such number is correct. Therefore, each tendering stockholder should complete and sign the Substitute Form W-9 included as part of the Letter of Transmittal so as to provide the information and certification necessary to avoid backup withholding, unless such stockholder otherwise establishes to the satisfaction of the Depositary that the stockholder is not subject to backup withholding. Certain stockholders (including, among others, all corporations and certain foreign individuals) are not subject to these backup withholding and reporting requirements. In order for a foreign individual to qualify as an exempt recipient, such an individual must submit a completed IRS Form W-8 which is signed by the individual under penalties of perjury, attesting to that individual's exempt status. Such statements can be obtained from the Depositary. See Instructions 11 and 12 of the Letter of Transmittal. Backup withholding is not an additional tax; any amounts so withheld may be credited against the U.S. federal income tax liability of the beneficial holder subject to the withholding. Participants in the Thrift and Savings Plans and the holders of Options may have additional tax considerations. See the applicable Direction Form(s) and related materials sent under separate cover to such participants. THE TAX DISCUSSION SET FORTH ABOVE IS INCLUDED FOR GENERAL INFORMATION ONLY. EACH STOCKHOLDER IS URGED TO CONSULT SUCH STOCKHOLDER'S OWN TAX ADVISOR TO DETERMINE THE PARTICULAR TAX CONSEQUENCES TO SUCH STOCKHOLDER OF THE OFFER, INCLUDING THE APPLICABILITY AND EFFECT OF STATE, LOCAL AND FOREIGN TAX LAWS. 16. EXTENSION OF THE OFFER; TERMINATION; AMENDMENTS. The Company expressly reserves the right, in its sole discretion, at any time and from time to time, and regardless of whether or not any of the events set forth in Section 7 shall have occurred or shall be deemed by the Company to have occurred, to extend the period of time during which the Offer is open and thereby delay acceptance for payment of, and payment for, any Shares by giving oral or written notice of such extension to the Depositary and making a public announcement thereof. The Company also expressly reserves the right, in its sole discretion, to terminate the Offer and not accept for payment or pay for any Shares not theretofore accepted for payment or paid for or, subject to applicable law, to postpone payment for Shares upon the occurrence of any of the conditions specified in Section 7 hereof by giving oral or written notice of such termination or postponement to the Depositary and making a public announcement thereof. Additionally, in certain circumstances, if the Company waives any of the conditions of the Offer set forth in Section 7, it may be required to extend the Expiration Date of the Offer. The Company's reservation of the right to delay payment for Shares that it has accepted for payment is limited by Rule 13e-4(f)(5) promulgated under the Exchange Act, which requires that the Company must pay the consideration offered or return the Shares tendered promptly after termination or withdrawal of a tender offer. Subject to compliance with applicable law, the Company further reserves the right, in its sole discretion, and regardless of whether any of the events set forth in Section 7 shall have occurred or shall be deemed by the Company to have occurred, to amend the Offer in any respect (including, without limitation, by decreasing or increasing the consideration offered in the Offer to holders of Shares or by decreasing or increasing the number of Shares being sought in the Offer). Amendments to the Offer may be made at any time and from time to time by public announcement thereof, 35 36 such announcement, in the case of an extension, to be issued no later than 9:00 a.m., New York City time, on the next business day after the last previously scheduled or announced Expiration Date. Any public announcement made pursuant to the Offer will be disseminated promptly to stockholders in a manner reasonably designed to inform stockholders of such change. Without limiting the manner in which the Company may choose to make any public announcement, except as provided by applicable law (including Rule 13e-4(e)(2) promulgated under the Exchange Act), the Company shall have no obligation to publish, advertise or otherwise communicate any such public announcement other than by making a release to the Dow Jones News Service. If the Company makes a material change in the terms of the Offer or the information concerning the Offer, or if it waives a material condition of the Offer, the Company will extend the Offer to the extent required by Rules 13e-4(d)(2) and 13e-4(e)(2) promulgated under the Exchange Act, which require that the minimum period during which an offer must remain open following material changes in the terms of the offer or information concerning the offer (other than a change in price, a change in the Dealer Managers' fee or a change in percentage of securities sought) will depend upon the facts and circumstances, including the relative materiality of such terms or information. If (i) the Company increases or decreases the price to be paid for Shares, the Company increases or decreases the Dealer Managers' fee, the Company increases the number of Shares being sought and such increase in the number of Shares being sought exceeds 2% of the outstanding Shares, or the Company decreases the number of Shares being sought, and (ii) the Offer is scheduled to expire at any time earlier than the tenth business day from, and including, the date that notice of such increase or decrease is first published, sent or given, the Offer will be extended until the expiration of such ten business days. 17. FEES AND EXPENSES. The Company has retained Goldman, Sachs & Co. ("Goldman Sachs") to act as the Dealer Managers in connection with the Offer. Goldman Sachs will receive a fee for their services as Dealer Managers of $0.10 for each share purchased by the Company pursuant to the Offer; provided, that the fee will not be less than $50,000; and provided further that any investment banking fees paid to Goldman Sachs in connection with the ISC/Ispat Transaction will be credited against any such Dealer Managers' fee and any remaining amount of such Dealer Managers' fee paid will be credited against any additional fees that become payable to Goldman Sachs in connection with the merger of the Company and Ryerson Tull, if it occurs. The Company also has agreed to reimburse Goldman Sachs for certain expenses incurred in connection with the Offer, including out-of-pocket expenses and reasonable attorneys' fees and disbursements, and to indemnify Goldman Sachs against certain liabilities in connection with the Offer, including certain liabilities under the federal securities laws. Goldman Sachs has rendered various investment banking and other advisory services to the Company in the past, for which it has received customary compensation, and could be engaged by the Company to render similar services to the Company in the future. The Company also has retained MacKenzie Partners, Inc., as Information Agent, Harris Trust and Savings Bank, as Depositary, and Morgan Stanley Dean Witter, as Option Exercise/Tender Agent, in connection with the Offer. The Information Agent, the Depositary and the Option Exercise/Tender Agent will receive reasonable and customary compensation for their services. The Company will also reimburse the Information Agent, the Depositary and the Option Exercise/Tender Agent for out-of-pocket expenses, including reasonable attorneys' fees, and has agreed to indemnify the Information Agent and the Depositary against certain liabilities in connection with the Offer, including certain liabilities under the federal securities laws. The Dealer Managers and Information Agent may contact stockholders by mail, telephone, telex, telegraph and personal interviews, and may request brokers, dealers and other nominee stockholders to forward materials relating to the Offer to beneficial owners. None of the Information Agent, the Depositary or the Option Exercise/Tender Agent has been retained to make solicitations or recommendations in connection with the Offer. 36 37 The Company will not pay fees or commissions to any broker, dealer, commercial bank, trust company or other person (other than the Dealer Managers) for soliciting any Shares pursuant to the Offer. The Company will, however, on request, reimburse such persons for customary handling and mailing expenses incurred in forwarding materials in respect of the Offer to the beneficial owners for which they act as nominees. No such broker, dealer, commercial bank or trust company has been authorized to act as the Company's agent for purposes of the Offer. The Company will pay (or cause to be paid) any stock transfer taxes on its purchase of Shares, except as otherwise provided in Instruction 7 of the Letter of Transmittal. 18. MISCELLANEOUS. The Company is not aware of any jurisdiction where the making of the Offer is not in compliance with applicable law. If the Company becomes aware of any jurisdiction where the making of the Offer is not in compliance with any valid applicable law, the Company will make a good faith effort to comply with such law. If, after such good faith effort, the Company cannot comply with such law, the Offer will not be made to (nor will tenders be accepted from or on behalf of) the holders of Shares residing in such jurisdiction. In any jurisdiction the securities or blue sky laws of which require the Offer to be made by a licensed broker or dealer, the Offer is being made on the Company's behalf by the Dealer Managers or one or more registered brokers or dealers licensed under the laws of such jurisdiction. NO PERSON HAS BEEN AUTHORIZED TO GIVE ANY INFORMATION OR MAKE ANY REPRESENTATION ON BEHALF OF THE COMPANY OR THE DEALER MANAGERS IN CONNECTION WITH THE OFFER OTHER THAN THOSE CONTAINED IN THIS OFFER TO PURCHASE OR IN THE RELATED LETTER OF TRANSMITTAL . IF GIVEN OR MADE, SUCH INFORMATION OR REPRESENTATION MUST NOT BE RELIED UPON AS HAVING BEEN AUTHORIZED BY THE COMPANY OR THE DEALER MANAGERS. INLAND STEEL INDUSTRIES, INC. July 20, 1998 37 38 SCHEDULE I CERTAIN TRANSACTIONS INVOLVING SHARES Based upon the Company's records and upon information provided to the Company by its directors, executive officers, associates and subsidiaries, except as described below, neither the Company nor any of its associates or subsidiaries or persons controlling the Company (of which the Company believes there are none) nor, to the best of the Company's knowledge, any of the directors or executive officers of the Company, nor any associates of such directors or executive officers, has effected any transactions in the Shares during the 40 business days prior to July 20, 1998. On May 22, 1998, the Company withheld from James Hemphill, Controller, 404 Shares with a fair market of $27.1875 per Share in payment of withholding taxes on the vesting of restricted Shares. On July 1, 1998, A. Robert Abboud, James A. Henderson, Leo F. Mullin, Jean-Pierre Rosso, Joshua I. Smith, Nancy H. Teeters and Arnold R. Weber, Directors of the Company, each received 386 Shares pursuant to the Company's 1992 Stock Plan for Non-Employee Directors which provides for the payment of a portion of each Director's fees in Shares. Arnold R. Weber has deferred receipt of such Shares until he is no longer a director of the Company. The closing price of a Share as reported on the NYSE Composite Tape on July 1, 1998, was $28.625. On July 16, 1998, the closing of the ISC/Ispat Transaction, the Company withheld from its executive officers Shares in the following amounts in payment of withholding taxes on the payment of performance Shares and vesting of restricted Shares: James M. Hemphill, 2,367 Shares; H. William Howard, Vice President -- Information Technology, 3,634 Shares; and George A. Ranney, Jr., Vice President and General Counsel, 5,748 Shares. The closing price of a Share as reported on the NYSE Composite Tape on July 17, 1998, was $28.75. As of July 16, 1998, in connection with the ISC/Ispat Transaction, the Company redeemed 1,145,394 shares of Series E Preferred Stock held for the benefit of employees remaining with Inland Steel Company following the ISC/Ispat Transaction. On August 1, 1998, as participants in the Dividend Reinvestment Plan, the following officers and directors will receive Shares in lieu of cash dividends on the listed number of Shares: Leo F. Mullin, 1807.807 Shares; Neil S. Novich, President, Chief Executive Officer and Director of Ryerson Tull, 131.9397 Shares; and Charles B. Salowitz, 836.909 Shares. From time to time during the 40-day period preceding the Offer, consistent with past practice and pursuant to the terms of the Company's Employee Stock Ownership Plan ("ESOP"), the Company made matching contributions of and dividends on Series E Preferred Stock to the ESOP accounts of its executive officers that participate in the ESOP. I-1 39 Manually signed facsimile copies of the Letter of Transmittal will be accepted. The Letter of Transmittal and certificates for the Shares and any other required documents should be sent or delivered by each stockholder or such stockholder's broker, dealer, commercial bank, trust company or other nominee to the Depositary at its address set forth below: The Depositary for the Offer is: HARRIS TRUST AND SAVINGS BANK By Facsimile Transmission By Hand/Overnight Delivery: By Registered or Certified Number: Harris Trust and Savings Bank Mail: (For Eligible Institutions c/o Harris Trust Company Harris Trust and Savings Bank Only) of New York c/o Harris Trust Company (212) 701-7636 88 Pine Street of New York 19th Floor P.O. Box 1010 Confirm Receipt of New York, NY 10005 Wall Street Station Facsimile by Telephone: New York, NY 10268-1010 (212) 701-7624
For Information Telephone: (800) 245-7630 Any questions or requests for assistance or for additional copies of this Offer to Purchase, the Letter of Transmittal or the Notice of Guaranteed Delivery may be directed to the Information Agent, at the telephone number and address below. Stockholders may also contact their brokers, dealers, commercial banks or trust companies for assistance concerning the Offer. The Information Agent for the Offer is: MacKenzie Logo 156 Fifth Avenue New York, New York 10010 (212) 929-5500 (call collect) or (800) 322-2885 (toll free) The Dealer Managers for the Offer are: GOLDMAN, SACHS & CO. 85 Broad Street New York, New York 10004 (800) 323-5678 (toll free) EX-99.(A)(2) 3 LETTER OF TRANSMITTAL 1 LETTER OF TRANSMITTAL TO TENDER SHARES OF COMMON STOCK (INCLUDING THE ASSOCIATED PREFERRED STOCK PURCHASE RIGHTS) OF INLAND STEEL INDUSTRIES, INC. PURSUANT TO THE OFFER TO PURCHASE FOR CASH DATED JULY 20, 1998 THE OFFER, PRORATION PERIOD AND WITHDRAWAL RIGHTS EXPIRE AT 12:00 MIDNIGHT, NEW YORK CITY TIME, ON FRIDAY, AUGUST 14, 1998, UNLESS THE OFFER IS EXTENDED. The Depositary for the Offer is: HARRIS TRUST AND SAVINGS BANK By Facsimile By Registered or Transmission Number: By Hand/Overnight Delivery: Certified Mail: (For Eligible Institutions Only) Harris Trust and Savings Bank Harris Trust and Savings Bank (212) 701-7636 c/o Harris Trust Company c/o Harris Trust Company of of New York New York Confirm Receipt of 88 Pine Street P.O. Box 1010 Facsimile by Telephone: 19th Floor Wall Street Station (212) 701-7624 New York, NY 10005 New York, NY 10268-1010 For Information Telephone: (800) 245-7630
DELIVERY OF THIS LETTER OF TRANSMITTAL AND ALL OTHER DOCUMENTS TO AN ADDRESS OR TRANSMISSION OF INSTRUCTIONS TO A FACSIMILE NUMBER OTHER THAN AS SET FORTH ABOVE DOES NOT CONSTITUTE A VALID DELIVERY. PLEASE READ THE ENTIRE LETTER OF TRANSMITTAL, INCLUDING THE ACCOMPANYING INSTRUCTIONS, CAREFULLY BEFORE CHECKING ANY BOX BELOW. This Letter of Transmittal is to be used only if certificates are to be forwarded herewith or if delivery of Shares (as defined below) is to be made by book-entry transfer to the Depositary's account at The Depository Trust Company (the "Book-Entry Transfer Facility" or "DTC") pursuant to the procedures set forth in Section 3 of the Offer to Purchase (as defined below). THIS LETTER OF TRANSMITTAL MAY NOT BE USED FOR TENDERING SHARES ATTRIBUTABLE TO INDIVIDUAL ACCOUNTS UNDER THE INLAND STEEL INDUSTRIES THRIFT PLAN, THE INLAND STEEL COMPANY SAVINGS PLAN OR THE RYERSON TULL SAVINGS PLAN. SEE INSTRUCTION 15. THIS LETTER OF TRANSMITTAL MAY NOT BE USED FOR DIRECTING THE EXERCISE OF OPTIONS (AS DEFINED BELOW) THROUGH THE INLAND STEEL INDUSTRIES 1988 INCENTIVE STOCK PLAN, THE INLAND STEEL INDUSTRIES 1992 INCENTIVE STOCK PLAN OR THE INLAND STEEL INDUSTRIES 1995 INCENTIVE STOCK PLAN AND THE TENDER OF SHARES ISSUABLE UPON EXERCISE OF SUCH OPTIONS. SEE INSTRUCTION 17.
- -------------------------------------------------------------------------------------------------------------------------- DESCRIPTION OF SHARES TENDERED (SEE INSTRUCTIONS 3 AND 4) - -------------------------------------------------------------------------------------------------------------------------- NAME(S) AND ADDRESS(ES) OF REGISTERED HOLDER(S) SHARES TENDERED PLEASE FILL IN, IF BLANK, EXACTLY AS (ATTACH SIGNED ADDITIONAL LIST IF NECESSARY) NAME(S) APPEAR(S) ON CERTIFICATE(S) - -------------------------------------------------------------------------------------------------------------------------- TOTAL NUMBER OF SHARES NUMBER CERTIFICATE REPRESENTED BY OF SHARES NUMBER(S)(1) CERTIFICATE(S)(1) TENDERED(2) --------------------------------------------- --------------------------------------------- --------------------------------------------- --------------------------------------------- --------------------------------------------- TOTAL SHARES TENDERED - ---------------------
Indicate in this box the order (by certificate number) in which Shares are to be purchased in the event of proration. (3) (Attach additional signed list if necessary.) See Instruction 18. 1st: 2nd: 3rd: 4th: - --------------------- (1) Need not be completed by stockholders tendering Shares by book-entry transfer. (2) Unless otherwise indicated, it will be assumed that all Shares represented by each Share certificate delivered to the Depositary are being tendered hereby. See Instruction 4. (3) If you do not designate an order, then in the event less than all Shares tendered are purchased due to proration, Shares will be selected for purchase by the Depositary. See Instruction 18. - --------------------------------------------------------------------------------------------------------------------------
2 NOTE: SIGNATURE MUST BE PROVIDED BELOW PLEASE READ ACCOMPANYING INSTRUCTIONS CAREFULLY Stockholders who desire to tender Shares pursuant to the Offer (as defined below) and who cannot deliver their certificates for their Shares (or who are unable to comply with the procedures for book-entry transfer on a timely basis) and all other documents required by the Letter of Transmittal to the Depositary at or before the Expiration Date (as defined in the Offer to Purchase) may tender their Shares according to the guaranteed delivery procedures set forth in Section 3 of the Offer to Purchase. See Instruction 2. Delivery of documents to the Book-Entry Transfer Facility does not constitute delivery to the Depositary. THIS BOX IS FOR USE BY ELIGIBLE INSTITUTIONS ONLY [ ] CHECK HERE IF TENDERED SHARES ARE BEING DELIVERED BY BOOK-ENTRY TRANSFER TO THE DEPOSITARY'S ACCOUNT AT THE BOOK-ENTRY TRANSFER FACILITY AND COMPLETE THE FOLLOWING: Name of Tendering Institution: --------------------------------------------- (PLEASE PRINT) DTC Account No.: ---------------------------------------------------------- Transaction Code No.: ----------------------------------------------------- [ ]CHECK HERE IF TENDERED SHARES ARE BEING DELIVERED PURSUANT TO A NOTICE OF GUARANTEED DELIVERY PREVIOUSLY SENT TO THE DEPOSITARY AND COMPLETE THE FOLLOWING: Name(s) of Registered Holder(s): --------------------------------------------- (PLEASE PRINT) Date of Execution of Notice of Guaranteed Delivery: ------------------------- Name of Institution that Guaranteed Delivery: ------------------------------- DTC Account No.: ------------------------------------------------------------ Transaction Code No.:------------------------------------------------------- 2 3 Ladies and Gentlemen: The undersigned hereby tenders to Inland Steel Industries, Inc., a Delaware corporation (the "Company"), the above-described shares of its common stock ($1.00 par value) (the "Shares") (including the associated preferred stock purchase rights (the "Rights") issued pursuant to the Rights Agreement, dated as of November 25, 1997, between the Company and Harris Trust and Savings Bank, as the Rights Agent) at the price per Share indicated in this Letter of Transmittal, net to the seller in cash, upon the terms and subject to the conditions set forth in the Offer to Purchase, dated July 20, 1998 (the "Offer to Purchase"), receipt of which is hereby acknowledged, and in this Letter of Transmittal (which, as amended from time to time, together constitute the "Offer"). Unless the context otherwise requires, all references to Shares include the associated Rights. Subject to, and effective upon, acceptance for payment of and payment for the Shares tendered herewith in accordance with the terms and subject to the conditions of the Offer (including, if the Offer is extended or amended, the terms and conditions of any such extension or amendment), the undersigned hereby sells, assigns and transfers to, or upon the order of, the Company all right, title and interest in and to all the Shares that are being tendered hereby (and any and all other Shares or other securities issued or issuable in respect thereof (collectively, "Distributions")), or orders the registration of such Shares tendered by book-entry transfer that are purchased pursuant to the Offer to or upon the order of the Company and hereby irrevocably constitutes and appoints the Depositary the true and lawful agent and attorney-in-fact of the undersigned with respect to such Shares and Distributions, with full power of substitution (such power of attorney being deemed to be an irrevocable power coupled with an interest), to (i) deliver certificates for such Shares and Distributions, or transfer ownership of such Shares and Distributions on the account books maintained by the Book-Entry Transfer Facility, together, in any such case, with all accompanying evidences of transfer and authenticity, to or upon the order of the Company upon receipt by the Depositary, as the undersigned's agent, of the Purchase Price (as defined below) with respect to such Shares; (ii) present certificates for such Shares for cancellation and transfer on the books of the Company; and (iii) receive all benefits and otherwise exercise all rights of beneficial ownership of such Shares, all in accordance with the terms of the Offer. The undersigned hereby represents and warrants to the Company that the undersigned has full power and authority to tender, sell, assign and transfer the Shares tendered hereby and all Distributions and that, when and to the extent the same are accepted for payment by the Company, the Company will acquire good, marketable and unencumbered title thereto, free and clear of all liens, restrictions, charges, encumbrances, conditional sales agreements or other obligations relating to the sale or transfer thereof, and the same will not be subject to any adverse claims. The undersigned will, upon request, execute and deliver any additional documents deemed by the Depositary or the Company to be necessary or desirable to complete the sale, assignment and transfer of the Shares tendered hereby and any Distributions. The undersigned represents and warrants to the Company that the undersigned has read and agrees to all of the terms of the Offer. All authority herein conferred or agreed to be conferred shall not be affected by, and shall survive, the death or incapacity of the undersigned, and any obligation of the undersigned hereunder shall be binding upon the heirs, personal representatives, successors and assigns of the undersigned. Except as stated in the Offer, this tender is irrevocable. The undersigned understands that tenders of Shares pursuant to any one of the procedures described in Section 3 of the Offer to Purchase and in the Instructions will constitute the undersigned's acceptance of the terms and conditions of the Offer, including the undersigned's representation and warranty to the Company that (i) the undersigned has a net long position in the Shares or equivalent securities being tendered within the meaning of Rule 14e-4 promulgated under the Securities Exchange Act of 1934, as amended (the "Exchange Act"), and (ii) the tender of such Shares complies with Rule 14e-4. The Company's acceptance for payment of Shares tendered 3 4 pursuant to the Offer will constitute a binding agreement between the undersigned and the Company upon the terms and subject to the conditions of the Offer. The undersigned understands that the Company will determine a single per Share price (not greater than $34.00 nor less than $30.00 per Share), net to the Seller in cash, that it will pay for Shares validly tendered and not withdrawn pursuant to the Offer (the "Purchase Price"), taking into account the number of Shares so tendered and the prices specified by tendering stockholders. The undersigned understands that the Company will select the lowest Purchase Price that will allow it to purchase 25,500,000 Shares (or such lesser number of Shares as are validly tendered at prices not greater than $34.00 nor less than $30.00 per Share) validly tendered and not withdrawn pursuant to the Offer. The undersigned understands that all Shares validly tendered at prices at or below the Purchase Price and not withdrawn will be purchased at the Purchase Price, net to the seller in cash, upon the terms and subject to the conditions of the Offer, including the proration and conditional tender provisions, and that the Company will return all other Shares, including Shares tendered at prices greater than the Purchase Price and not withdrawn and Shares not purchased because of proration or conditional tender. The undersigned recognizes that, under certain circumstances set forth in the Offer to Purchase, the Company may terminate or amend the Offer or may postpone the acceptance for payment of, or the payment for, Shares tendered or may not be required to purchase any of the Shares tendered hereby or may accept for payment fewer than all of the Shares tendered hereby. Unless otherwise indicated under "Special Payment Instructions," please issue the check for the Purchase Price of any Shares purchased, and/or return any Shares not tendered or not purchased, in the name(s) of the undersigned. Similarly, unless otherwise indicated under "Special Delivery Instructions," please mail the check for the Purchase Price of any Shares purchased and/or any certificates for Shares not tendered or not purchased (and accompanying documents, as appropriate) to the undersigned at the address shown below the undersigned's signature(s). In the event that both "Special Payment Instructions" and "Special Delivery Instructions" are completed, please issue the check for the Purchase Price of any Shares purchased and/or return any Shares not tendered or not purchased in the name(s) of, and mail such check and/or any certificates to, the person(s) so indicated. The undersigned recognizes that the Company has no obligation, pursuant to the "Special Payment Instructions," to transfer any Shares from the name of the registered holder(s) thereof if the Company does not accept for payment any of the Shares so tendered. The undersigned understands that a tender of Shares pursuant to the Offer will include a tender of the associated Rights and that no separate consideration will be paid for such Rights. For a description of the Rights, see Section 8 of the Offer to Purchase. The undersigned understands that acceptance of Shares by the Company for payment will constitute a binding agreement between the undersigned and the Company upon the terms and subject to the conditions of the Offer. 4 5 ODD LOTS (SEE INSTRUCTION 9) This section is to be completed ONLY if Shares are being tendered by or on behalf of a person who owns beneficially an aggregate of fewer than 100 Shares (excluding Shares attributable to individual accounts under the Inland Steel Industries Thrift Plan, the Inland Steel Company Savings Plan and the Ryerson Tull Savings Plan). The undersigned either (check one box): [ ] owns beneficially an aggregate of fewer than 100 Shares (excluding Shares allocated to accounts in the Inland Steel Industries Thrift Plan, the Inland Steel Company Savings Plan and the Ryerson Tull Savings Plan), all of which are being tendered; or [ ] is a broker, dealer, commercial bank, trust company or other nominee that (i) is tendering, for the beneficial owners thereof, Shares with respect to which it is the record owner and (ii) believes, based upon representations made to it by each such beneficial owner, that such beneficial owner owns beneficially an aggregate of fewer than 100 Shares (excluding Shares attributable to individual accounts under the Inland Steel Industries Thrift Plan, the Inland Steel Company Savings Plan and the Ryerson Tull Savings Plan) and is tendering all of such Shares. ODD LOT SHARES CANNOT BE CONDITIONALLY TENDERED CONDITIONAL TENDERS (SEE INSTRUCTION 10) A tendering stockholder may condition the tender of Shares upon the purchase by the Company of a specified minimum number of the Shares tendered hereby, all as described in the Offer to Purchase, particularly in Section 6 thereof. Except as set forth in Section 6 of the Offer to Purchase, unless at least such minimum number of Shares is purchased by the Company pursuant to the terms of the Offer, none of the Shares tendered hereby will be purchased. It is the tendering stockholder's responsibility to calculate and appropriately indicate such minimum number of Shares, and each stockholder is urged to consult a tax advisor. Unless this box has been completed and a minimum number specified, the tender will be deemed unconditional. Minimum number of Shares that must be purchased, if any are purchased: -------------------------------------------------------------- Shares 5 6 SPECIAL PAYMENT INSTRUCTIONS (SEE INSTRUCTIONS 1, 4, 6, 7 AND 8) To be completed ONLY if certificates for Shares not tendered or not purchased and/or any check for the aggregate Purchase Price of Shares purchased are to be issued in the name of and sent to someone other than the undersigned. Issue: [ ] Check to: [ ] Certificates to: Name(s) - --------------------------------------------- (PLEASE PRINT) Address - ---------------------------------------------- -------------------------------------------------------- -------------------------------------------------------- (ZIP CODE) - --------------------------------------------------------- (TAXPAYER IDENTIFICATION OR SOCIAL SECURITY NUMBER) SPECIAL DELIVERY INSTRUCTIONS (SEE INSTRUCTIONS 1, 4, 6 AND 8) To be completed ONLY if certificates for Shares not tendered or not purchased and/or any check for the aggregate Purchase Price of Shares purchased, issued in the name of the undersigned, are to be mailed to someone other than the undersigned or to the undersigned at an address other than that shown above. Mail: [ ] Check to: [ ] Certificates to: Name(s) - --------------------------------------------- (PLEASE PRINT) Address - ---------------------------------------------- -------------------------------------------------------- -------------------------------------------------------- (ZIP CODE) INLAND STEEL INDUSTRIES SHAREHOLDER INVESTMENT SERVICE DIVIDEND REINVESTMENT PLAN SHARES (SEE INSTRUCTION 16) This section is to be completed ONLY if Shares held in the Inland Steel Industries Shareholder Investment Service Dividend Reinvestment Plan are to be tendered. [ ] By checking this box, the undersigned represents that the undersigned is a participant in the Inland Steel Industries Shareholder Investment Service Dividend Reinvestment Plan and hereby instructs the Depositary to tender on behalf of the undersigned the following number of Shares (including fractional Shares, if any) credited to the Inland Steel Industries Shareholder Investment Service Dividend Reinvestment Plan account of the undersigned at the Purchase Price per Share indicated below under the item "Price (In Dollars) Per Share At Which Shares Are Being Tendered:" _________________ Shares(1) ............................................................................... (1) The undersigned understands and agrees that all Shares held in the Inland Steel Industries Shareholder Investment Service Dividend Reinvestment Plan account(s) of the undersigned will be tendered if the above box is checked and the space above is left blank. 6 7 PRICE (IN DOLLARS) PER SHARE AT WHICH SHARES ARE BEING TENDERED (SEE INSTRUCTION 5) IF SHARES ARE BEING TENDERED AT MORE THAN ONE PRICE, A SEPARATE INSTRUCTION FORM FOR EACH PRICE SPECIFIED MUST BE USED. CHECK ONLY ONE BOX. IF MORE THAN ONE BOX IS CHECKED, OR IF NO BOX IS CHECKED, THERE IS NO VALID TENDER OF SHARES. SHARES TENDERED AT PRICE DETERMINED BY DUTCH AUCTION [ ] The undersigned wants to maximize the chance of having Inland Steel Industries, Inc. purchase all the Shares the undersigned is tendering (subject to the possibility of proration). Accordingly, by checking this box INSTEAD OF ONE OF THE PRICE BOXES BELOW, the undersigned hereby tenders Shares and is willing to accept the Purchase Price resulting from the Dutch auction tender process. This action could result in receiving a price per Share of as low as $30.00. OR SHARES TENDERED AT PRICE DETERMINED BY STOCKHOLDER By checking ONE of the boxes below INSTEAD OF THE BOX ABOVE, the undersigned hereby tenders Shares at the price checked. This action could result in none of the Shares being purchased if the Purchase Price for the Shares is less than the price checked. A STOCKHOLDER WHO DESIRES TO TENDER SHARES AT MORE THAN ONE PRICE MUST COMPLETE A SEPARATE INSTRUCTION FORM FOR EACH PRICE AT WHICH SHARES ARE TENDERED. THE SAME SHARES CANNOT BE TENDERED AT MORE THAN ONE PRICE. PRICE (IN DOLLARS) PER SHARE AT WHICH SHARES ARE BEING TENDERED: [ ] $30.00 [ ] $31.00 [ ] $32.00 [ ] $33.00 [ ] $34.00 [ ] $30.125 [ ] $31.125 [ ] $32.125 [ ] $33.125 [ ] $30.25 [ ] $31.25 [ ] $32.25 [ ] $33.25 [ ] $30.375 [ ] $31.375 [ ] $32.375 [ ] $33.375 [ ] $30.50 [ ] $31.50 [ ] $32.50 [ ] $33.50 [ ] $30.625 [ ] $31.625 [ ] $32.625 [ ] $33.625 [ ] $30.75 [ ] $31.75 [ ] $32.75 [ ] $33.75 [ ] $30.875 [ ] $31.875 [ ] $32.875 [ ] $33.875
7 8 PLEASE SIGN HERE (TO BE COMPLETED BY ALL STOCKHOLDERS) (PLEASE ALSO COMPLETE AND RETURN THE ATTACHED SUBSTITUTE FORM W-9) (Must be signed by the registered holder(s) exactly as name(s) appear(s) on certificate(s) or on a security position listing or by person(s) authorized to become registered holder(s) by certificate(s) and documents transmitted with the Letter of Transmittal. If signature is by a trustee, executor, administrator, guardian, attorney-in-fact, officer of a corporation or another person acting in a fiduciary capacity, please set forth full title and see Instruction 6.) SIGNATURE(S) OF OWNER(S): - -------------------------------------------------------------------------------- - -------------------------------------------------------------------------------- Dated: - ------------------------------, 1998 Name(s): - -------------------------------------------------------------------------------- (PLEASE PRINT) Capacity (full title): - -------------------------------------------------------------------------------- Address: - -------------------------------------------------------------------------------- - -------------------------------------------------------------------------------- - -------------------------------------------------------------------------------- (INCLUDE ZIP CODE) Area Code(s) and Telephone Number(s): - --------------------------------------------------------------------- GUARANTEE OF SIGNATURE(S) (SEE INSTRUCTIONS 1 AND 6) Name of Firm: - -------------------------------------------------------------------------------- Authorized Signature: - -------------------------------------------------------------------------------- Name: - -------------------------------------------------------------------------------- (PLEASE PRINT) Title: - -------------------------------------------------------------------------------- Address: - -------------------------------------------------------------------------------- (INCLUDE ZIP CODE) Area Code(s) and Telephone Number(s): - ---------------------------------------------------------------------- Dated: - ------------------------------, 1998 8 9 INSTRUCTIONS FORMING PART OF THE TERMS AND CONDITIONS OF THE OFFER 1. Guarantee of Signatures. Except as otherwise provided below, all signatures on this Letter of Transmittal must be guaranteed by a financial institution (including most commercial banks, savings and loan associations and brokerage houses) that is a member of a recognized signature guarantee medallion program within the meaning of Rule 17Ad-15 under the Exchange Act (an "Eligible Institution"), unless (i) this Letter of Transmittal is signed by the registered holder(s) of the Shares (which term, for purposes of this document, shall include any participant in the Book-Entry Transfer Facility whose name appears on a security position listing as the owner of Shares) tendered herewith and such holder(s) have not completed the box entitled "Special Payment Instructions" or the box entitled "Special Delivery Instructions" on this Letter of Transmittal, or (ii) such Shares are tendered for the account of an Eligible Institution. See Instruction 6. 2. Delivery of Letter of Transmittal and Share Certificates; Guaranteed Delivery Procedures. This Letter of Transmittal is to be used either if Share certificates are to be forwarded herewith or if delivery of Shares is to be made by book-entry transfer pursuant to the procedures set forth in Section 3 of the Offer to Purchase. The Depositary must receive (i) a properly completed and duly executed Letter of Transmittal or a facsimile thereof in accordance with the instructions of the Letter of Transmittal, including any required signature guarantees, certificates for Shares to be tendered, and any other documents required by the Letter of Transmittal, on or prior to the Expiration Date at one of its addresses set forth on the back cover of the Offer to Purchase, (ii) such Shares must be delivered pursuant to the procedures for book-entry transfer described in Section 3 of the Offer to Purchase (and a confirmation of such delivery received by the Depositary, including an Agent's Message if the tendering stockholder has not delivered a Letter of Transmittal) or (iii) such Shares are validly tendered through the Book-Entry Transfer Facility's Automated Tender Offer Program ("ATOP"), prior to the Expiration Date. The term "Agent's Message" means a message, transmitted by the Book-Entry Transfer Facility (as defined in Section 3 of the Offer to Purchase) to, and received by, the Depository and forming a part of a Book-Entry Confirmation (as defined in Section 3 of the Offer to Purchase), which states that the Book-Entry Transfer Facility has received an express acknowledgment from the participant in the Book-Entry Transfer Facility tendering the Shares that such participant has received and agrees to be bound by the terms of the Letter of Transmittal and that Purchaser may enforce such agreement against the participant. If certificates are forwarded to the Depositary in multiple deliveries, a properly completed and duly executed Letter of Transmittal must accompany each such delivery. Participants in the Book-Entry Transfer Facility may tender their Shares in accordance with ATOP, to the extent it is available to such participants for the Shares they wish to tender. A stockholder tendering through ATOP must expressly acknowledge that the stockholder has received and agreed to be bound by the Letter of Transmittal and that the Letter of Transmittal may be enforced against such stockholder. Stockholders whose Share certificates are not immediately available, who cannot deliver their Shares and all other required documents to the Depositary or who cannot complete the procedure for delivery by book-entry transfer prior to the Expiration Date may tender their Shares pursuant to the guaranteed delivery procedure set forth in Section 3 of the Offer to Purchase. Pursuant to such procedure: (i) such tender must be made by or through an Eligible Institution, (ii) a properly completed and duly executed Notice of Guaranteed Delivery substantially in the form provided by the Company (with any required signature guarantees) must be received by the Depositary prior to the Expiration Date, and (iii) the certificates for all physically delivered Shares in proper form for transfer by delivery, or a confirmation of a book-entry transfer into the Depositary's account at the Book-Entry Transfer Facility of all Shares delivered electronically, in each case together with a properly completed and duly executed Letter of Transmittal (or manually signed facsimile thereof) with any required signature guarantees (or, in the case of a book-entry transfer, an Agent's 9 10 Message or, in the case of a tender through ATOP, the specified acknowledgment) and any other documents required by this Letter of Transmittal, must be received by the Depositary within three New York Stock Exchange, Inc. trading days after the date the Depositary receives such Notice of Guaranteed Delivery, all as provided in Section 3 of the Offer to Purchase. THE METHOD OF DELIVERY OF ALL DOCUMENTS, INCLUDING SHARE CERTIFICATES, THE LETTER OF TRANSMITTAL AND ANY OTHER REQUIRED DOCUMENTS, IS AT THE ELECTION AND RISK OF THE TENDERING STOCKHOLDER, AND THE DELIVERY WILL BE DEEMED MADE ONLY WHEN ACTUALLY RECEIVED BY THE DEPOSITARY. IF DELIVERY IS BY MAIL, REGISTERED MAIL WITH RETURN RECEIPT REQUESTED, PROPERLY INSURED, IS RECOMMENDED. IN ALL CASES, SUFFICIENT TIME SHOULD BE ALLOWED TO ENSURE TIMELY DELIVERY. Except as specifically permitted by Section 6 of the Offer to Purchase, no alternative or contingent tenders will be accepted. By executing this Letter of Transmittal (or facsimile thereof), the tendering stockholder waives any right to receive any notice of the acceptance for payment of the Shares. 3. Inadequate Space. If the space provided herein is inadequate, the certificate numbers and/or the number of Shares should be listed on a separate signed schedule and attached to this Letter of Transmittal. 4. Partial Tenders (Not Applicable to Stockholders Who Tender by Book-Entry Transfer). If fewer than all the Shares represented by any certificate delivered to the Depositary are to be tendered, fill in the number of Shares that are to be tendered in the box entitled "Number of Shares Tendered." In such case, a new certificate for the remainder of the Shares represented by the old certificate will be sent to the person(s) signing this Letter of Transmittal, unless otherwise provided in the "Special Payment Instructions" or "Special Delivery Instructions" boxes on this Letter of Transmittal, as promptly as practicable following the expiration or termination of the Offer. All Shares represented by certificates delivered to the Depositary will be deemed to have been tendered unless otherwise indicated. 5. Indication of Price at Which Shares are Being Tendered. For Shares to be validly tendered by this Letter of Transmittal, the stockholder must either: (i) check the box under "Shares Tendered at Price Determined by Dutch Auction" or (ii) check the box indicating the price per Share at which such stockholder is tendering Shares under "Shares Tendered at Price Determined by Stockholder." By checking the box under "Shares Tendered at Price Determined by Dutch Auction," the stockholder agrees to accept the Purchase Price that results from the Dutch auction tender process, which could be as low as $30.00. By checking a box under "Shares Tendered at Price Determined by Stockholder," the stockholder acknowledges that doing so could result in none of the Shares being purchased if the Purchase Price for the Shares is less than the price such holder checks. ONLY ONE BOX MAY BE CHECKED. IF MORE THAN ONE BOX IS CHECKED, OR IF NO BOX IS CHECKED, THERE IS NO VALID TENDER OF SHARES. A stockholder wishing to tender portions of such stockholder's Shares at different prices must complete a separate Letter of Transmittal for each price at which such stockholder wishes to tender each such portion of such stockholder's Shares. The same Shares cannot be tendered (unless previously validly withdrawn as provided in Section 4 of the Offer to Purchase) at more than one price. 6. Signatures on Letter of Transmittal; Stock Powers and Endorsements. If this Letter of Transmittal is signed by the registered holder(s) of the Shares tendered hereby, the signature(s) must correspond with the name(s) as written on the face of the certificates without alteration, enlargement or any change whatsoever. If any of the Shares tendered hereby are held of record by two or more persons, all such persons must sign this Letter of Transmittal. If any of the Shares tendered hereby are registered in 10 11 different names on different certificates, it will be necessary to complete, sign and submit as many separate Letters of Transmittal (or facsimiles thereof) as there are different registrations of certificates. If this Letter of Transmittal is signed by the registered holder(s) of the Shares tendered hereby, no endorsements of certificates or separate stock powers are required unless payment of the Purchase Price is to be made to, or Shares not tendered or not purchased are to be registered in the name of, any person other than the registered holder(s), in which case the certificate(s) evidencing the Shares tendered hereby must be endorsed or accompanied by appropriate stock powers, in either case signed exactly as the name(s) of the registered holder(s) appear(s) on such certificates. SIGNATURES ON ANY SUCH CERTIFICATES OR STOCK POWERS MUST BE GUARANTEED BY AN ELIGIBLE INSTITUTION. See Instruction 1. If this Letter of Transmittal is signed by a person other than the registered holder(s) of the Shares tendered hereby, certificates evidencing the Shares tendered hereby must be endorsed or accompanied by appropriate stock powers, in either case, signed exactly as the name(s) of the registered holder(s) appear(s) on such certificate(s). Signature(s) on any such certificates or stock powers must be guaranteed by an Eligible Institution. See Instruction 1. If this Letter of Transmittal or any certificate or stock power is signed by a trustee, executor, administrator, guardian, attorney-in-fact, officer of a corporation or other person acting in a fiduciary or representative capacity, such person should so indicate when signing, and proper evidence satisfactory to the Company of the authority of such person so to act must be submitted. 7. Stock Transfer Taxes. The Company will pay or cause to be paid any stock transfer taxes with respect to the sale and transfer of any Shares to it or its order pursuant to the Offer. If, however, payment of the aggregate Purchase Price is to be made to, or Shares not tendered or not purchased are to be registered in the name of, any person other than the registered holder(s), or if tendered Shares are registered in the name of any person other than the person(s) signing this Letter of Transmittal, the amount of any stock transfer taxes (whether imposed on the registered holder(s), such other person or otherwise) payable on account of the transfer to such person will be deducted from the Purchase Price unless satisfactory evidence of the payment of such taxes, or exemption therefrom, is submitted. See Section 5 of the Offer to Purchase. Except as provided in this Instruction 7, it will not be necessary to affix transfer tax stamps to the certificates representing Shares tendered hereby. 8. Special Payment and Delivery Instructions. If a check for the Purchase Price of any Shares tendered hereby is to be issued in the name of, and/or any Shares not tendered or not purchased are to be returned to, a person other than the person(s) signing this Letter of Transmittal, or if the check and/or any certificates for Shares not tendered or not purchased are to be mailed to someone other than the person(s) signing this Letter of Transmittal or to an address other than that shown above in the box captioned "Description of Shares Tendered," then the boxes captioned "Special Payment Instructions" and/or "Special Delivery Instructions" on this Letter of Transmittal should be completed. Stockholders tendering Shares by book-entry transfer will have any Shares not accepted for payment returned by crediting the account maintained by such stockholder at the Book-Entry Transfer Facility. 9. Odd Lots. As described in Section 1 of the Offer to Purchase, if fewer than all Shares validly tendered at or below the Purchase Price and not withdrawn prior to the Expiration Date are to be purchased, the Shares purchased first will consist of all Shares tendered by any stockholder who owns beneficially an aggregate of fewer than 100 Shares (excluding Shares attributable to individual accounts under the Inland Steel Industries Thrift Plan, the Inland Steel Company Savings Plan and the Ryerson Tull Savings Plan) and who validly tendered all such Shares at or below the Purchase Price. Partial tenders of Shares will not qualify for this preference and this preference will 11 12 not be available unless the box captioned "Odd Lots" in this Letter of Transmittal and the Notice of Guaranteed Delivery, if any, is completed. 10. Conditional Tenders. As described in Section 6 of the Offer to Purchase, a stockholder may tender Shares subject to the condition that a specified minimum number of such stockholder's Shares tendered must be purchased if any such Shares so tendered are purchased. Under certain circumstances and subject to the exceptions set forth in Section 1, the Company may prorate the number of Shares purchased pursuant to the Offer. In such a case, the Depositary will perform a preliminary proration, and any Shares tendered at or below the Purchase Price pursuant to a conditional tender for which the condition was not satisfied will automatically be regarded as withdrawn, subject to reinstatement if such conditionally tendered Shares are subsequently selected by lot for purchase subject to Section 6 of the Offer to Purchase. If conditional tenders would otherwise be so regarded as withdrawn and would cause the total number of Shares to be purchased to fall below 25,500,000 then, to the extent feasible, the Company will select enough of such conditional tenders that would otherwise have been so withdrawn to permit the Company to purchase 25,500,000 Shares. In selecting among such conditional tenders, the Company will select by lot and will limit its purchase in each case to the designated minimum number of Shares to be purchased. All tendered Shares will be deemed unconditionally tendered unless the "Conditional Tenders" box is completed. As discussed in Section 15 of the Offer to Purchase, the number of Shares to be purchased from a particular stockholder may affect the tax treatment of such purchase to such stockholder and such stockholder's decision whether to tender. EACH STOCKHOLDER IS URGED TO CONSULT WITH HIS OR HER OWN TAX ADVISOR. Any tendering stockholder wishing to make a conditional tender must calculate and appropriately indicate such minimum number of Shares. Odd Lot Shares, which will not be subject to proration, cannot be conditionally tendered. 11. Substitute Form W-9. Under federal income tax law, a holder pursuant to the Offer is required to provide the Depositary with such holder's correct taxpayer identification number ("TIN") on Substitute Form W-9 below. If the holder is an individual, the TIN is his or her social security number. If the Depositary is not provided with the correct TIN, payments that are made to such holder or other payee with respect to Offer may be subject to 31% backup withholding. See the enclosed "Guidelines for Certification of Taxpayer Identification Number on Substitute Form W-9" for more instructions. If backup withholding applies, the Depositary is required to withhold 31% of any such payments made to the holder or other payee. Backup withholding is not an additional tax. Rather, the tax liability of persons subject to backup withholding will be reduced by the amount of tax withheld, provided that the required information is given to the Internal Revenue Service. If withholding results in an overpayment of taxes, a refund may be obtained from the Internal Revenue Service. The box in Part 3 of the Substitute Form W-9 may be checked if the submitting holder has not been issued a TIN and has applied for a TIN or intends to apply for a TIN in the near future. If the box in Part 3 is checked, the holder or other payee must also complete the Certificate of Awaiting Taxpayer Identification Number below in order to avoid backup withholding. Notwithstanding that the box in Part 3 is checked and the Certificate of Awaiting Taxpayer Identification Number is completed, the Depositary will withhold 31% on all payments made prior to the time a properly certified TIN is provided to the Depositary. However, such amounts will be refunded to such holder if a TIN is provided to the Depositary within 60 days. The holder is required to give the Depositary the TIN (e.g., social security number or employer identification number) of the record owner of the Shares or of the last transferee appearing on the transfers attached to, or endorsed on, the Shares. If the Shares are registered in more than one name or are not in the name of the actual owner, consult the enclosed "Guidelines for Certification 12 13 of Taxpayer Identification Number on Substitute Form W-9" for additional guidance on which number to report. 12. Form W-8. Certain holders (including, among others, all corporations and certain foreign individuals) are not subject to backup withholding and reporting requirements. In order for a foreign individual to qualify as an exempt recipient, the holder must submit a Form W-8, signed under penalties of perjury, attesting to that individual's exempt status. A Form W-8 can be obtained from the Depositary. Foreign stockholders are urged to consult their tax advisors regarding the application of United States federal income tax withholding, including eligibility for a withholding tax reduction or exemption and refund procedures. 13. Requests for Assistance or Additional Copies. Any questions or requests for assistance may be directed to the Information Agent or the Dealer Managers at their respective telephone numbers and addresses listed below. Requests for additional copies of the Offer to Purchase, this Letter of Transmittal or other tender offer materials may be directed to the Information Agent or the Dealer Managers, and such copies will be furnished promptly at the Company's expense. Stockholders may also contact their local broker, dealer, commercial bank or trust company for documents relating to, or assistance concerning, the Offer. 14. Irregularities. All questions as to the number of Shares to be accepted, the price to be paid therefor and the validity, form, eligibility (including time of receipt) and acceptance for payment of any tender of Shares will be determined by the Company, in its sole discretion, which determination shall be final and binding on all parties. The Company reserves the absolute right to reject any or all tenders it determines not to be in proper form or the acceptance of or payment for which may, in the opinion of the Company's counsel, be unlawful. The Company also reserves the absolute right to waive any of the conditions of the Offer and any defect or irregularity in the tender of any particular Shares or any particular stockholder. No tender of Shares will be deemed to be validly made until all defects or irregularities have been cured or waived. None of the Company, the Dealer Managers, the Depositary, the Information Agent or any other person is or will be obligated to give notice of any defects or irregularities in tenders, and none of them will incur any liability for failure to give any such notice. 15. Inland Steel Industries Thrift Plan, Inland Steel Company Savings Plan and Ryerson Tull Savings Plan. Participants in the Inland Steel Industries Thrift Plan, the Inland Steel Company Savings Plan or the Ryerson Tull Savings Plan may not use this Letter of Transmittal to direct the tender of Shares (including fractional Shares, if any) reflecting interests attributable to such participant's individual account(s) under the applicable plan, but must use the separate Direction Form sent to them by the Trustee. See Section 3 of the Offer to Purchase. 16. Inland Steel Industries Shareholder Investment Service Dividend Reinvestment Plan. If a stockholder desires to tender Shares (including fractional Shares, if any) credited to the stockholder's account under the Inland Steel Industries Shareholder Investment Service Dividend Reinvestment Plan, the box captioned "Inland Steel Industries Shareholder Investment Service Dividend Reinvestment Plan Shares" should be completed. A participant in the Inland Steel Industries Shareholder Investment Service Dividend Reinvestment Plan may complete such box on only one Letter of Transmittal submitted by such participant. If a participant submits more than one Letter of Transmittal and completes such box on more than one Letter of Transmittal, the participant will be deemed to have elected to tender all Shares (including fractional Shares, if any) credited to the stockholder's account under the Inland Steel Industries Shareholder Investment Service Dividend Reinvestment Plan at the lowest price specified in such Letters of Transmittal. If a stockholder tenders Shares held in the Inland Steel Industries Shareholder Investment Service Dividend Reinvestment Plan, all such Shares credited to such Stockholder's account(s), including fractional Shares, will be tendered, unless otherwise specified above under the box captioned "Inland Steel Industries Shareholder Investment Service Dividend Reinvestment Plan Shares." In the event that the box captioned "Inland Steel Industries Shareholder Investment 13 14 Service Dividend Reinvestment Plan Shares" is not completed, no Shares held in the tendering stockholder's account will be tendered. 17. Inland Steel Industries 1988 Incentive Stock Plan, Inland Steel Industries 1992 Incentive Stock Plan and Inland Steel Industries 1995 Incentive Stock Plan. Holders of options (each an "Option") to purchase Shares through the Inland Steel Industries 1988 Incentive Stock Plan, the Inland Steel Industries 1992 Incentive Stock Plan and the Inland Steel Industries 1995 Incentive Stock Plan may not use this Letter of Transmittal to direct the exercise of Options and the tender of Shares issuable upon exercise of such Options, but must use the separate Option Exercise/Tender Instruction Form sent to them by the Option Exercise/Tender Agent. See Section 3 of the Offer to Purchase. 18. Order of Purchase in Event of Proration. As described in Section 1 of the Offer to Purchase, stockholders may designate the order in which their Shares are to be purchased in the event of proration. The order of purchase may affect whether any capital gain or loss recognized on the Shares purchased is long-term or short-term (depending on the holding period for the Shares purchased) and the amount of gain or loss recognized for federal income tax purposes. See Sections 1 and 15 of the Offer to Purchase. 19. Lost, Stolen or Destroyed Certificates. If your certificate(s) representing Shares have been lost, stolen or destroyed, so indicate above. The Depositary will send you additional documentation that will need to be completed to effectively surrender such lost, stolen or destroyed certificates. IMPORTANT: This Letter of Transmittal (or a manually signed facsimile thereof) together with Share certificates or confirmation of Book-Entry Transfer or, in the case of a tender through ATOP a specific acknowledgment, and all other required documents must be received by the Depositary, or the Notice of Guaranteed Delivery must be received by the Depositary, prior to the Expiration Date. 14 15 PAYOR'S NAME: HARRIS TRUST AND SAVINGS BANK - --------------------------------------------------------------------------------------------------------------------- PART 1 -- PLEASE PROVIDE YOUR TIN IN THE BOX AT SOCIAL SECURITY NUMBER OR SUBSTITUTE RIGHT AND CERTIFY BY SIGNING AND DATING BELOW. EMPLOYER IDENTIFICATION FORM W-9 NUMBER ------------------------------- ------------------------------------------------------------------------------------- DEPARTMENT OF THE TREASURY PART 2--CERTIFICATION--UNDER PENALTIES OF PERJURY, I CERTIFY THAT: INTERNAL REVENUE SERVICE (1) The number shown on this form is my correct Taxpayer Identification Number (or I am waiting for a number to be issued to me), and PAYER'S REQUEST FOR (2) I am not subject to backup withholding either because: (a) I am exempt from TAXPAYER IDENTIFICATION backup withholding, or (b) I have not been notified by the Internal Revenue NUMBER (TIN) Service (the "IRS") that I am subject to backup withholding as a result of a failure to report all interest or dividends, or (c) the IRS has notified me that I am no longer subject to backup withholding. ------------------------------------------------------------------------------------- CERTIFICATION INSTRUCTIONS--You must cross out PART 3-- item (2) above if you have been notified by the Awaiting TIN [ ] IRS that you are currently subject to backup withholding because of under reporting interest or dividends on your tax return. However, if after being notified by the IRS that you are subject to backup withholding, you received another notification from the IRS that you are no longer subject to backup withholding, do not cross out such item (2). SIGNATURE ------------------------------------ DATE------------------------------------------
NOTE: FAILURE TO COMPLETE AND RETURN THIS FORM MAY RESULT IN BACKUP WITHHOLDING OF 31% OF ANY PAYMENTS MADE TO YOU PURSUANT TO THE OFFER. PLEASE REVIEW THE ENCLOSED GUIDELINES FOR CERTIFICATION OF TAXPAYER IDENTIFICATION NUMBER ON SUBSTITUTE FORM W-9 FOR ADDITIONAL DETAILS. YOU MUST COMPLETE THE FOLLOWING CERTIFICATE IF YOU CHECKED THE BOX IN PART 3 OF SUBSTITUTE FORM W-9. - ------------------------------------------------------------------------------------------------------------------- CERTIFICATE OF AWAITING TAXPAYER IDENTIFICATION NUMBER I certify under penalties of perjury that a taxpayer identification number has not been issued to me, and either (1) I have mailed or delivered an application to receive a taxpayer identification number to the appropriate Internal Revenue Service Center or Social Security Administration Office or (2) I intend to mail or deliver an application in the near future. I understand that if I do not provide a taxpayer identification number by the time of payment, 31% of all reportable payments made to me will be withheld, but that such amounts will be refunded to me if I then provide a Taxpayer Identification Number within sixty (60) days. --------------------------------------------------------------- ------------------------------------ Signature Date - -------------------------------------------------------------------------------------------------------------------
15 16 The Information Agent for the Offer is: MacKenzie Logo 156 Fifth Avenue New York, New York 10010 (212) 929-5500 (call collect) or (800) 322-2885 (toll free) The Dealer Managers for the Offer are: GOLDMAN, SACHS & CO. 85 Broad Street New York, New York 10004 (800) 323-5678 (toll free) EX-99.(A)(3) 4 NOTICE OF GUARANTEED DELIVERY 1 NOTICE OF GUARANTEED DELIVERY (NOT TO BE USED FOR SIGNATURE GUARANTEES) PURSUANT TO THE OFFER TO PURCHASE FOR CASH BY INLAND STEEL INDUSTRIES, INC. OF UP TO 25,500,000 SHARES OF ITS COMMON STOCK (INCLUDING THE ASSOCIATED PREFERRED STOCK PURCHASE RIGHTS) This form, or a form substantially equivalent to this form, must be used to accept the Offer (as defined below) if certificates for the shares of common stock of Inland Steel Industries, Inc. are not immediately available, if the procedure for book-entry transfer cannot be completed on a timely basis, or if time will not permit all other documents required by the Letter of Transmittal to be delivered to the Depositary prior to the Expiration Date (as defined in Section 1 of the Offer to Purchase, defined below). This form may be delivered by hand or transmitted by mail or overnight courier, or, for Eligible Institutions (as defined below), by facsimile transmission, to the Depositary. See Section 3 of the Offer to Purchase. The Depositary for the Offer is: HARRIS TRUST AND SAVINGS BANK
By Facsimile By Registered or Transmission Number: By Hand/Overnight Delivery: Certified Mail: (For Eligible Institutions Only) Harris Trust and Savings Bank Harris Trust and Savings Bank (212) 701-7636 c/o Harris Trust Company c/o Harris Trust Company of of New York New York Confirm Receipt of 88 Pine Street P.O. Box 1010 Facsimile by Telephone: 19th Floor Wall Street Station (212) 701-7624 New York, NY 10005 New York, NY 10268-1010
For Information Telephone: (800) 245-7630 ------------------------ DELIVERY OF THIS INSTRUMENT TO AN ADDRESS, OR TRANSMISSION OF INSTRUCTIONS VIA A FACSIMILE NUMBER, OTHER THAN AS SET FORTH ABOVE WILL NOT CONSTITUTE A VALID DELIVERY. THIS FORM IS NOT TO BE USED TO GUARANTEE SIGNATURES. IF A SIGNATURE ON A LETTER OF TRANSMITTAL IS REQUIRED TO BE GUARANTEED BY AN ELIGIBLE INSTITUTION UNDER THE INSTRUCTIONS THERETO, SUCH SIGNATURE GUARANTEE MUST APPEAR IN THE APPLICABLE SPACE PROVIDED IN THE SIGNATURE BOX ON THE LETTER OF TRANSMITTAL. 2 Ladies and Gentlemen: The undersigned hereby tenders to Inland Steel Industries, Inc., a Delaware corporation (the "Company"), upon the terms and subject to the conditions set forth in the Offer to Purchase, dated July 20, 1998 (the "Offer to Purchase"), and the related Letter of Transmittal (which, as amended from time to time, together constitute the "Offer"), receipt of which is hereby acknowledged, the number of shares of common stock ($1.00 par value) (the "Shares") (including the associated preferred stock purchase rights (the "Rights") issued pursuant to the Rights Agreement, dated as of November 25, 1997, between the Company and Harris Trust and Savings Bank, as the Rights Agent) of the Company listed below, pursuant to the guaranteed delivery procedure set forth in Section 3 of the Offer to Purchase. The undersigned understands that a tender of Shares pursuant to the Offer will include a tender of the associated Rights and that no separate consideration will be paid for such Rights. For a description of the Rights, see Section 8 of the Offer to Purchase. Unless the context otherwise requires, all references to Shares shall include the associated Rights. ODD LOTS (SEE INSTRUCTION 9 OF THE LETTER OF TRANSMITTAL) This section is to be completed ONLY if Shares are being tendered by or on behalf of a person who beneficially owns an aggregate of fewer than 100 Shares (excluding Shares attributable to individual accounts under the Inland Steel Industries Thrift Plan, the Inland Steel Company Savings Plan and the Ryerson Tull Savings Plan). The undersigned either (check one box): [ ] owns beneficially an aggregate of fewer than 100 Shares (excluding Shares allocated to accounts in the Inland Steel Industries Thrift Plan, the Inland Steel Company Savings Plan and the Ryerson Tull Savings Plan), all of which are being tendered, or [ ] is a broker, dealer, commercial bank, trust company or other nominee that (i) is tendering, for the beneficial owners thereof, Shares with respect to which it is the record owner and (ii) believes, based upon representations made to it by each such beneficial owner, that such beneficial owner owns beneficially an aggregate of fewer than 100 Shares (excluding Shares attributable to individual accounts under the Inland Steel Industries Thrift Plan, the Inland Steel Company Savings Plan and the Ryerson Tull Savings Plan) and is tendering all of such Shares. ODD LOT SHARES CANNOT BE CONDITIONALLY TENDERED CONDITIONAL TENDERS (SEE INSTRUCTION 10 OF THE LETTER OF TRANSMITTAL) A tendering stockholder may condition the tender of Shares upon the purchase by the Company of a specified minimum number of the Shares tendered hereby, all as described in the Offer to Purchase, particularly in Section 6 thereof. Except as set forth in Section 6 of the Offer to Purchase, unless at least such minimum number of Shares is purchased by the Company pursuant to the terms of the Offer, none of the Shares tendered hereby will be purchased. It is the tendering stockholder's responsibility to calculate and appropriately indicate such minimum number of Shares, and each stockholder is urged to consult a tax advisor. Unless this box has been completed and a minimum number specified, the tender will be deemed unconditional. Minimum number of Shares that must be purchased, if any are purchased: -------------------------------------------------------------- Shares 2 3 PRICE (IN DOLLARS) PER SHARE AT WHICH SHARES ARE BEING TENDERED (SEE INSTRUCTION 5 OF THE LETTER OF TRANSMITTAL) IF SHARES ARE BEING TENDERED AT MORE THAN ONE PRICE, A SEPARATE INSTRUCTION FORM FOR EACH PRICE SPECIFIED MUST BE USED. CHECK ONLY ONE BOX. IF MORE THAN ONE BOX IS CHECKED, OR IF NO BOX IS CHECKED, THERE IS NO VALID TENDER OF SHARES. SHARES TENDERED AT PRICE DETERMINED BY DUTCH AUCTION [ ] The undersigned wants to maximize the chance of having Inland Steel Industries, Inc. purchase all the Shares the undersigned is tendering (subject to the possibility of proration). Accordingly, by checking this box INSTEAD OF ONE OF THE PRICE BOXES BELOW, the undersigned hereby tenders Shares and is willing to accept the Purchase Price resulting from the Dutch auction tender process. This action could result in receiving a price per Share of as low as $30.00. OR SHARES TENDERED AT PRICE DETERMINED BY STOCKHOLDER By checking ONE of the boxes below INSTEAD OF THE BOX ABOVE, the undersigned hereby tenders Shares at the price checked. This action could result in none of the Shares being purchased if the Purchase Price for the Shares is less than the price checked. A STOCKHOLDER WHO DESIRES TO TENDER SHARES AT MORE THAN ONE PRICE MUST COMPLETE A SEPARATE INSTRUCTION FORM FOR EACH PRICE AT WHICH SHARES ARE TENDERED. THE SAME SHARES CANNOT BE TENDERED AT MORE THAN ONE PRICE. PRICE (IN DOLLARS) PER SHARE AT WHICH SHARES ARE BEING TENDERED: [ ] $30.00 [ ] $31.00 [ ] $32.00 [ ] $33.00 [ ] $34.00 [ ] $30.125 [ ] $31.125 [ ] $32.125 [ ] $33.125 [ ] $30.25 [ ] $31.25 [ ] $32.25 [ ] $33.25 [ ] $30.375 [ ] $31.375 [ ] $32.375 [ ] $33.375 [ ] $30.50 [ ] $31.50 [ ] $32.50 [ ] $33.50 [ ] $30.625 [ ] $31.625 [ ] $32.625 [ ] $33.625 [ ] $30.75 [ ] $31.75 [ ] $32.75 [ ] $33.75 [ ] $30.875 [ ] $31.875 [ ] $32.875 [ ] $33.875
3 4 (PLEASE TYPE OR PRINT) NUMBER OF SHARES: - ------------------------------- CERTIFICATE NOS. (IF AVAILABLE): - ------------------------------------------------------- - ------------------------------------------------------- Name(s) - ------------------------------------------------------- Address(es) - ------------------------------------------------------- - ------------------------------------------------------- - ------------------------------------------------------- - ------------------------------------------------------- Area Code(s) and Telephone Number(s) STOCKHOLDER MUST SIGN HERE - ------------------------------------------------------- - ------------------------------------------------------- Signature(s) Dated: - ---------------------------------------, 1998 If shares will be tendered by book-entry transfer, enter The Depositary Trust Company Account Number below: Account Number: - --------------------------------------------- THE METHOD OF DELIVERY OF THIS DOCUMENT IS AT THE ELECTION AND RISK OF THE TENDERING STOCKHOLDERS. IF DELIVERY IS BY MAIL, REGISTERED MAIL WITH RETURN RECEIPT REQUESTED IS RECOMMENDED. IN ALL CASES, SUFFICIENT TIME SHOULD BE ALLOWED TO ASSURE DELIVERY. 4 5 GUARANTEE (NOT TO BE USED FOR SIGNATURE GUARANTEE) The undersigned, a firm that is a member of a registered national securities exchange or the National Association of Securities Dealers, Inc., or a financial institution that is a member of a recognized signature guarantee medallion program within the meaning of Rule 17Ad-15 under the Exchange Act (an "Eligible Institution"), hereby guarantees (i) that the above-named person(s) has a net long position in the Shares being tendered within the meaning of Rule 14e-4 promulgated under the Securities Exchange Act of 1934, as amended, (ii) that such tender of Shares complies with Rule 14e-4 and (iii) the delivery to the Depositary, at one of its addresses set forth above, of certificate(s) for the Shares tendered hereby, in proper form for transfer, or a confirmation of the book-entry transfer of the Shares tendered hereby into the Depositary's account at The Depository Trust Company, in each case together with a properly completed and duly executed Letter(s) of Transmittal (or a facsimile(s) thereof), with any required signature guarantee(s), or an Agent's Message (as defined in the Offer to Purchase) or through ATOP (as defined in the Offer to Purchase), and any other required documents, all within three New York Stock Exchange, Inc. trading days after the date of receipt by the Depositary. THE ELIGIBLE INSTITUTION THAT COMPLETES THIS FORM MUST COMMUNICATE THE GUARANTEE TO THE DEPOSITARY AND MUST DELIVER THE LETTER OF TRANSMITTAL AND CERTIFICATES FOR SHARES TO THE DEPOSITARY WITHIN THE TIME SHOWN HEREIN. FAILURE TO DO SO COULD RESULT IN A FINANCIAL LOSS TO SUCH ELIGIBLE INSTITUTION. - ------------------------------------------------------ AUTHORIZED SIGNATURE - ------------------------------------------------------ NAME (PLEASE PRINT) - ------------------------------------------------------ TITLE - ------------------------------------------------------ NAME OF FIRM - ------------------------------------------------------ ADDRESS - ------------------------------------------------------ - ------------------------------------------------------ (INCLUDING ZIP CODE) - ------------------------------------------------------ AREA CODE AND TELEPHONE NUMBER DATE: , 1998 NOTE: DO NOT SEND SHARE CERTIFICATES WITH THIS FORM. YOUR SHARE CERTIFICATES MUST BE SENT WITH THE LETTER OF TRANSMITTAL. 5 EX-99.(A)(4) 5 BROKER LETTER 1 OFFER TO PURCHASE FOR CASH BY INLAND STEEL INDUSTRIES, INC. OF UP TO 25,500,000 SHARES OF ITS COMMON STOCK (INCLUDING THE ASSOCIATED PREFERRED STOCK PURCHASE RIGHTS) THE OFFER, PRORATION PERIOD AND WITHDRAWAL RIGHTS EXPIRE AT 12:00 MIDNIGHT, NEW YORK CITY TIME, ON FRIDAY, AUGUST 14, 1998, UNLESS THE OFFER IS EXTENDED. July 20, 1998 To Brokers, Dealers, Commercial Banks, Trust Companies and Other Nominees: In our capacity as Dealer Managers, we are enclosing the material listed below relating to the offer of Inland Steel Industries, Inc., a Delaware corporation (the "Company"), to purchase up to 25,500,000 shares of its common stock ($1.00 par value) (the "Shares") (including the associated preferred stock purchase rights (the "Rights") issued pursuant to the Rights Agreement, dated as of November 25, 1997, between the Company and Harris Trust and Savings Bank, as the Rights Agent) at a price not greater than $34.00 nor less than $30.00 per Share, net to the seller in cash, as specified by tendering stockholders, upon the terms and subject to the conditions set forth in the Offer to Purchase, dated July 20, 1998 (the "Offer to Purchase"), and in the related Letter of Transmittal (which, as amended from time to time, together constitute the "Offer"). Unless the context otherwise requires, all references to Shares include the associated Rights. The Company will determine a single price (not greater than $34.00 nor less than $30.00 per Share), net to the seller in cash, that it will pay for Shares validly tendered and not withdrawn pursuant to the Offer (the "Purchase Price"), taking into account the number of Shares so tendered and the prices specified by tendering stockholders. The Company will select the lowest Purchase Price that will allow it to purchase 25,500,000 Shares (or such lesser number of Shares as is validly tendered at prices not greater than $34.00 nor less than $30.00 per Share) and not withdrawn pursuant to the Offer. The Company will purchase all Shares validly tendered at prices at or below the Purchase Price and not withdrawn, upon the terms and subject to the conditions of the Offer, including the provisions relating to proration and conditional tenders described in the Offer to Purchase. See Sections 1 and 6 of the Offer to Purchase. The Purchase Price will be paid in cash, net to the seller, with respect to all Shares purchased. Shares tendered at prices in excess of the Purchase Price and Shares not purchased because of proration or conditional tenders will be returned. A tender of Shares pursuant to the Offer will include a tender of the associated Rights. No separate consideration will be paid for such Rights. For a description of the Rights, see Section 8 of the Offer to Purchase. THE OFFER IS NOT CONDITIONED ON ANY MINIMUM NUMBER OF SHARES BEING TENDERED. THE OFFER IS, HOWEVER, SUBJECT TO CERTAIN OTHER CONDITIONS. SEE SECTION 7 OF THE OFFER TO PURCHASE. We are asking you to contact your clients for whom you hold Shares registered in your name (or in the name of your nominee) or who hold Shares registered in their own names. Please bring the Offer to their attention as promptly as possible. The Company will, upon request, reimburse you for reasonable and customary handling and mailing expenses incurred by you in forwarding any of the enclosed materials to your clients. 2 For your information and for forwarding to your clients, we are enclosing the following documents: 1. The Offer to Purchase. 2. The Letter of Transmittal for your use and for the information of your clients. 3. A letter to stockholders of the Company from the Chairman, President and Chief Executive Officer of the Company. 4. The Notice of Guaranteed Delivery to be used to accept the Offer if the Shares and all other required documents cannot be delivered to the Depositary by the Expiration Date (each as defined in the Offer to Purchase). 5. A letter that may be sent to your clients for whose accounts you hold Shares registered in your name or in the name of your nominee with space for obtaining such clients' instructions with regard to the Offer. 6. Guidelines of the Internal Revenue Service for Certification of Taxpayer Identification Number on Substitute Form W-9 providing information relating to backup federal income tax withholding. 7. A return envelope addressed to Harris Trust and Savings Bank, the Depositary. WE URGE YOU TO CONTACT YOUR CLIENTS AS PROMPTLY AS POSSIBLE. THE OFFER, PRORATION PERIOD AND WITHDRAWAL RIGHTS EXPIRE AT 12:00 MIDNIGHT, NEW YORK CITY TIME, ON FRIDAY, AUGUST 14, 1998, UNLESS THE OFFER IS EXTENDED. The Company will not pay any fees or commissions to any broker, dealer or other person for soliciting tenders of Shares pursuant to the Offer (other than the Dealer Managers). The Company will, upon request, reimburse brokers, dealers, commercial banks and trust companies for reasonable and customary handling and mailing expenses incurred by them in forwarding materials relating to the Offer to their customers. The Company will pay all stock transfer taxes applicable to its purchase of Shares pursuant to the Offer, subject to Instruction 7 of the Letter of Transmittal. As described in the Offer to Purchase, if more than 25,500,000 Shares have been validly tendered at or below the Purchase Price and not withdrawn prior to the Expiration Date, as defined in Section 1 of the Offer to Purchase, the Company will purchase Shares in the following order of priority: (i) all Shares validly tendered at or below the Purchase Price and not withdrawn prior to the Expiration Date by any stockholder who owns beneficially an aggregate of fewer than 100 Shares (excluding Shares attributable to individual accounts under the Inland Steel Industries Thrift Plan, the Inland Steel Company Savings Plan and the Ryerson Tull Savings Plan) and who validly tenders all of such Shares (partial tenders will not qualify for this preference) and completes the box captioned "Odd Lots" in the Letter of Transmittal and, if applicable, the Notice of Guaranteed Delivery; (ii) after purchase of all of the foregoing Shares, all Shares conditionally tendered in accordance with Section 6 of the Offer to Purchase, for which the condition was satisfied, and all other Shares tendered properly and unconditionally at prices at or below the Purchase Price and not withdrawn prior to the Expiration Date on a pro rata basis as described in Section 1 of the Offer to Purchase; and (iii) if necessary to permit the Company to purchase 25,500,000 Shares, Shares conditionally tendered, for which the condition was not initially satisfied, at or below the Purchase Price and not withdrawn prior to the Expiration Date, selected by random lot in accordance with Section 6 of the Offer to Purchase. 2 3 THE BOARD OF DIRECTORS OF THE COMPANY HAS UNANIMOUSLY APPROVED THE OFFER. HOWEVER, STOCKHOLDERS MUST MAKE THEIR OWN DECISIONS WHETHER TO TENDER SHARES AND, IF SO, HOW MANY SHARES TO TENDER AND THE PRICE OR PRICES AT WHICH SHARES SHOULD BE TENDERED. NEITHER THE COMPANY NOR ITS BOARD OF DIRECTORS MAKES ANY RECOMMENDATION TO ANY STOCKHOLDER AS TO WHETHER TO TENDER OR REFRAIN FROM TENDERING SHARES. SEE SECTION 10 OF THE OFFER TO PURCHASE FOR INFORMATION REGARDING THE INTENTIONS OF THE COMPANY'S DIRECTORS AND EXECUTIVE OFFICERS WITH RESPECT TO TENDERING SHARES PURSUANT TO THE OFFER. Any questions or requests for assistance or additional copies of the enclosed materials may be directed to the Information Agent or the Dealer Managers at their respective addresses and telephone numbers set forth on the back cover of the enclosed Offer to Purchase. Very truly yours, GOLDMAN, SACHS & CO. NOTHING CONTAINED HEREIN OR IN THE ENCLOSED DOCUMENTS SHALL CONSTITUTE YOU OR ANY OTHER PERSON THE AGENT OF THE COMPANY, THE DEALER MANAGERS, THE INFORMATION AGENT OR THE DEPOSITARY, OR AUTHORIZE YOU OR ANY OTHER PERSON TO USE ANY DOCUMENT OR MAKE ANY STATEMENT ON BEHALF OF ANY OF THEM IN CONNECTION WITH THE OFFER OTHER THAN THE DOCUMENTS ENCLOSED HEREWITH AND THE STATEMENTS CONTAINED THEREIN. 3 EX-99.(A)(5) 6 CLIENT LETTER 1 OFFER TO PURCHASE FOR CASH BY INLAND STEEL INDUSTRIES, INC. OF UP TO 25,500,000 SHARES OF ITS COMMON STOCK (INCLUDING THE ASSOCIATED PREFERRED STOCK PURCHASE RIGHTS) THE OFFER, PRORATION PERIOD AND WITHDRAWAL RIGHTS EXPIRE AT 12:00 MIDNIGHT, NEW YORK CITY TIME, ON FRIDAY, AUGUST 14, 1998, UNLESS THE OFFER IS EXTENDED. To Our Clients: Enclosed for your consideration are the Offer to Purchase, dated July 20, 1998 (the "Offer to Purchase"), and the related Letter of Transmittal (which, as amended from time to time, together constitute the "Offer") setting forth an offer by Inland Steel Industries, Inc., a Delaware corporation (the "Company"), to purchase up to 25,500,000 shares of its common stock ($1.00 par value) (the "Shares") (including the associated preferred stock purchase rights (the "Rights") issued pursuant to the Rights Agreement, dated as of November 25, 1997, between the Company and Harris Trust and Savings Bank, as the Rights Agent) at a price not greater than $34.00 nor less than $30.00 per Share, net to the seller in cash, as specified by tendering stockholders, upon the terms and subject to the conditions of the Offer. Unless the context otherwise requires, all references to Shares include the associated Rights. Also enclosed herewith is certain other material related to the Offer, including a letter to stockholders from Robert J. Darnall, Chairman, President and Chief Executive Officer of the Company. The Company will determine a single per Share price (not greater than $34.00 nor less than $30.00 per Share) that it will pay for the Shares validly tendered pursuant to the Offer and not withdrawn (the "Purchase Price"), taking into account the number of Shares so tendered and the prices specified by tendering stockholders. The Company will select the lowest Purchase Price that will allow it to purchase 25,500,000 Shares (or such lesser number of Shares as are validly tendered at prices not greater than $34.00 nor less than $30.00 per Share) validly tendered and not withdrawn pursuant to the Offer. The Company will purchase all Shares validly tendered at prices at or below the Purchase Price and not withdrawn, upon the terms and subject to the conditions of the Offer, including the provisions thereof relating to proration and conditional tenders. See Sections 1 and 6 of the Offer to Purchase. A tender of Shares pursuant to the Offer will include a tender of the associated Rights. No separate consideration will be paid for such Rights. For a description of the Rights, see Section 8 of the Offer to Purchase. WE ARE THE HOLDER OF RECORD OF SHARES HELD FOR YOUR ACCOUNT. AS SUCH, A TENDER OF SUCH SHARES CAN BE MADE ONLY BY US AS THE HOLDER OF RECORD AND PURSUANT TO YOUR INSTRUCTIONS. THE LETTER OF TRANSMITTAL IS FURNISHED TO YOU FOR YOUR INFORMATION ONLY AND CANNOT BE USED BY YOU TO TENDER SHARES HELD BY US FOR YOUR ACCOUNT. Please instruct as to whether you wish us to tender any or all of the Shares held by us for your account, upon the terms and subject to the conditions set forth in the Offer to Purchase and the Letter of Transmittal. Your attention is directed to the following: 1. You may tender Shares at either the price determined by you (in multiples of $0.125), not greater than $34.00 nor less than $30.00 per share, or the price determined by the "Dutch auction" tender process as indicated in the attached Instruction Form, net to you in cash. You should mark 2 the box entitled "Shares Tendered at Price Determined by Dutch Auction" if you are willing to accept the Purchase Price resulting from the Dutch auction tender process. This could result in your receiving the minimum price of $30.00 per Share. 2. The Offer is for up to 25,500,000 Shares. Although the Company has no present intention of doing so, the Company reserves the right, in its sole discretion but subject to certain applicable legal requirements, to purchase more than the 25,500,000 Shares pursuant to the Offer. The Offer is not conditioned on any minimum number of Shares being tendered. The Offer is, however, subject to certain other conditions set forth in Section 7 of the Offer to Purchase. 3. The Offer, proration period and withdrawal rights will expire at 12:00 Midnight, New York City time, on Friday, August 14, 1998, unless the Offer is extended. Your instructions to us should be forwarded to us in ample time to permit us to submit a tender on your behalf. 4. As described in the Offer to Purchase, if more than 25,500,000 Shares have been validly tendered at or below the Purchase Price and not withdrawn prior to the Expiration Date, as defined in Section 1 of the Offer to Purchase, the Company will purchase Shares in the following order of priority: (i) all Shares validly tendered at or below the Purchase Price and not withdrawn prior to the Expiration Date by any stockholder who owns beneficially an aggregate of less than 100 Shares (excluding Shares attributable to individual accounts under the Inland Steel Industries Thrift Plan, the Inland Steel Company Savings Plan and the Ryerson Tull Savings Plan) who validly tenders all of such Shares (partial tenders will not qualify for this preference) and completes the box captioned "Odd Lots" in the Letter of Transmittal and, if applicable, the Notice of Guaranteed Delivery; (ii) after purchase of all of the foregoing Shares, all Shares conditionally tendered in accordance with Section 6 of the Offer to Purchase, for which the condition was satisfied, and all other Shares tendered properly and unconditionally at prices at or below the Purchase Price and not withdrawn prior to the Expiration Date on a pro rata basis as described in Section 1 of the Offer to Purchase; and (iii) if necessary to permit the Company to purchase 25,500,000 Shares, Shares conditionally tendered, for which the condition was not initially satisfied, at or below the Purchase Price and not withdrawn prior to the Expiration Date, selected by random lot in accordance with Section 6 of the Offer to Purchase. 5. Tendering stockholders will not be obligated to pay any brokerage commissions or solicitation fees on the Company's purchase of Shares in the Offer. Any stock transfer taxes applicable to the purchase of Shares by the Company pursuant to the Offer will be paid by the Company, except as otherwise provided in Instruction 7 of the Letter of Transmittal. 6. If you wish to tender portions of your Shares at different prices you must complete a separate Instruction Form for each price at which you wish to tender each portion of your Shares. We must submit separate Letters of Transmittal on your behalf for each price you will accept. You may not tender the same Shares at more than one price. 7. If you own beneficially an aggregate of fewer than 100 Shares (excluding Shares attributable to individual accounts under the Inland Steel Industries Thrift Plan, the Inland Steel Company Savings Plan and the Ryerson Tull Savings Plan), and you instruct us to tender at or below the Purchase Price on your behalf all such Shares prior to the Expiration Date and check the box captioned "Odd Lots" in the Instruction Form, all such Shares will be accepted for purchase before proration, if any, of the purchase of other tendered Shares. 8. You may instruct us to tender Shares on your behalf subject to the condition that a specified minimum number of your tendered Shares must be purchased if any such tendered Shares are purchased, as described in Section 6 of the Offer to Purchase. It is your responsibility to calculate 2 3 such minimum number and you are urged to consult a tax advisor. If you wish us to make a conditional tender on your behalf, you must complete the box captioned "Conditional Tenders" in the Instruction Form. THE BOARD OF DIRECTORS OF THE COMPANY HAS UNANIMOUSLY APPROVED THE OFFER. HOWEVER, STOCKHOLDERS MUST MAKE THEIR OWN DECISIONS WHETHER TO TENDER SHARES AND, IF SO, HOW MANY SHARES TO TENDER AND THE PRICE OR PRICES AT WHICH SHARES SHOULD BE TENDERED. NEITHER THE COMPANY NOR ITS BOARD OF DIRECTORS MAKES ANY RECOMMENDATION TO ANY STOCKHOLDER AS TO WHETHER TO TENDER OR REFRAIN FROM TENDERING SHARES. SEE SECTION 10 OF THE OFFER TO PURCHASE FOR INFORMATION REGARDING THE INTENTIONS OF THE COMPANY'S DIRECTORS AND EXECUTIVE OFFICERS WITH RESPECT TO TENDERING SHARES PURSUANT TO THE OFFER. If you wish to have us tender any or all of your Shares held by us for your account upon the terms and subject to the conditions set forth in the Offer to Purchase, please so instruct us by completing, executing and returning to us the attached Instruction Form. An envelope to return your instructions to us is enclosed. If you authorize tender of your Shares, all such Shares will be tendered unless otherwise specified on the Instruction Form. YOUR INSTRUCTIONS SHOULD BE FORWARDED TO US IN AMPLE TIME TO PERMIT US TO SUBMIT A TENDER ON YOUR BEHALF PRIOR TO THE EXPIRATION OF THE OFFER. The Offer is being made to all holders of Shares. The Company is not aware of any jurisdiction where the making of the Offer is not in compliance with applicable law. If the Company becomes aware of any jurisdiction where the making of the Offer is not in compliance with any valid applicable law, the Company will make a good faith effort to comply with such law. If, after such good faith effort, the Company cannot comply with such law, the Offer will not be made to (nor will tenders be accepted from or on behalf of) the holders of Shares residing in such jurisdiction. In any jurisdiction in which the securities or blue sky laws require the Offer to be made by a licensed broker or dealer, the Offer is being made on the Company's behalf by the Dealer Managers or one or more registered brokers or dealers licensed under the laws of such jurisdiction. 3 4 INSTRUCTION FORM OFFER TO PURCHASE FOR CASH BY INLAND STEEL INDUSTRIES, INC. OF UP TO 25,500,000 SHARES OF ITS COMMON STOCK (INCLUDING THE ASSOCIATED PREFERRED STOCK PURCHASE RIGHTS) The undersigned acknowledge(s) receipt of your letter and the enclosed Offer to Purchase, dated July 20, 1998 (the "Offer to Purchase"), and the related Letter of Transmittal (which, as amended from time to time, together constitute the "Offer") in connection with the Offer by Inland Steel Industries, Inc. (the "Company") to purchase up to 25,500,000 shares of its common stock ($1.00 par value) (the "Shares") at a price not greater than $34.00 nor less than $30.00 per Share, net to the undersigned in cash, as specified by the undersigned, upon the terms and subject to the conditions of the Offer. The undersigned further acknowledge(s) that a tender of Shares pursuant to the Offer will include a tender of the associated preferred stock purchase rights (the "Rights") issued pursuant to the Rights Agreement, dated as of November 25, 1997, between the Company and Harris Trust and Savings Bank, as the Rights Agent, and that no separate consideration will be paid for such Rights. For a description of the Rights, see Section 8 of the Offer to Purchase. The Company will determine a single price (not greater than $34.00 nor less than $30.00 per Share), net to the seller in cash, that it will pay for Shares validly tendered and not withdrawn pursuant to the Offer (the "Purchase Price"), taking into account the number of Shares so tendered and the prices specified by tendering stockholders. The Company will select the lowest Purchase Price that will allow it to purchase 25,500,000 Shares (or such lesser number of Shares as is validly tendered at prices not greater than $34.00 nor less than $30.00 per Share) and not withdrawn pursuant to the Offer. This will instruct you to tender to the Company the number of Shares indicated below (or, if no number is indicated below, all Shares) that are held by you for the account of the undersigned, at the price per Share indicated below, upon the terms and subject to the conditions of the Offer. SHARES TENDERED [ ] If fewer than all Shares are to be tendered, please check this box and indicate below the aggregate number of Shares to be tendered by us. ----------------------- Shares Unless otherwise indicated, it will be assumed that all Shares held by us for your account are to be tendered. 4 5 ODD LOTS (SEE INSTRUCTION 9 OF THE LETTER OF TRANSMITTAL) [ ] By checking this box, the undersigned represent(s) that the undersigned owns beneficially an aggregate of fewer than 100 Shares (excluding Shares attributable to individual accounts under the Inland Steel Industries Thrift Plan, the Inland Steel Company Savings Plan and the Ryerson Tull Savings Plan) and is tendering all of such Shares. ODD LOT SHARES CANNOT BE CONDITIONALLY TENDERED CONDITIONAL TENDERS (SEE INSTRUCTION 10 OF THE LETTER OF TRANSMITTAL) A tendering stockholder may condition the tender of Shares upon the purchase by the Company of a specified minimum number of the Shares tendered hereby, all as described in the Offer to Purchase, particularly in Section 6 thereof. Except as set forth in Section 6 of the Offer to Purchase, unless at least such minimum number of Shares is purchased by the Company pursuant to the terms of the Offer, none of the Shares tendered hereby will be purchased. It is the tendering stockholder's responsibility to calculate and appropriately indicate such minimum number of Shares, and each stockholder is urged to consult a tax advisor. Unless this box has been completed and a minimum number specified, the tender will be deemed unconditional. Minimum number of Shares that must be purchased, if any are purchased: -------------------------------------------------------------- Shares 5 6 PRICE (IN DOLLARS) PER SHARE AT WHICH SHARES ARE BEING TENDERED (SEE INSTRUCTION 5 OF THE LETTER OF TRANSMITTAL) IF SHARES ARE BEING TENDERED AT MORE THAN ONE PRICE, A SEPARATE INSTRUCTION FORM FOR EACH PRICE SPECIFIED MUST BE USED. CHECK ONLY ONE BOX. IF MORE THAN ONE BOX IS CHECKED, OR IF NO BOX IS CHECKED, THERE IS NO VALID TENDER OF SHARES. SHARES TENDERED AT PRICE DETERMINED BY DUTCH AUCTION [ ] The undersigned wants to maximize the chance of having Inland Steel Industries, Inc. purchase all the Shares the undersigned is tendering (subject to the possibility of proration). Accordingly, by checking this box INSTEAD OF ONE OF THE PRICE BOXES BELOW, the undersigned hereby tenders Shares and is willing to accept the Purchase Price resulting from the Dutch auction tender process. This action could result in receiving a price per Share of as low as $30.00. OR SHARES TENDERED AT PRICE DETERMINED BY STOCKHOLDER By checking ONE of the boxes below INSTEAD OF THE BOX ABOVE, the undersigned hereby tenders Shares at the price checked. This action could result in none of the Shares being purchased if the Purchase Price for the Shares is less than the price checked. A STOCKHOLDER WHO DESIRES TO TENDER SHARES AT MORE THAN ONE PRICE MUST COMPLETE A SEPARATE INSTRUCTION FORM FOR EACH PRICE AT WHICH SHARES ARE TENDERED. THE SAME SHARES CANNOT BE TENDERED AT MORE THAN ONE PRICE. PRICE (IN DOLLARS) PER SHARE AT WHICH SHARES ARE BEING TENDERED: [ ] $30.00 [ ] $31.00 [ ] $32.00 [ ] $33.00 [ ] $34.00 [ ] $30.125 [ ] $31.125 [ ] $32.125 [ ] $33.125 [ ] $30.25 [ ] $31.25 [ ] $32.25 [ ] $33.25 [ ] $30.375 [ ] $31.375 [ ] $32.375 [ ] $33.375 [ ] $30.50 [ ] $31.50 [ ] $32.50 [ ] $33.50 [ ] $30.625 [ ] $31.625 [ ] $32.625 [ ] $33.625 [ ] $30.75 [ ] $31.75 [ ] $32.75 [ ] $33.75 [ ] $30.875 [ ] $31.875 [ ] $32.875 [ ] $33.875
THE METHOD OF DELIVERY OF THIS DOCUMENT IS AT THE ELECTION AND RISK OF THE TENDERING STOCKHOLDERS. IF DELIVERY IS BY MAIL, REGISTERED MAIL WITH RETURN RECEIPT REQUESTED IS RECOMMENDED. IN ALL CASES, SUFFICIENT TIME SHOULD BE ALLOWED TO ASSURE DELIVERY. 6 7 SIGN HERE Signature(s): - --------------------------------------- - ------------------------------------------------------- Name(s): - ------------------------------------------- - ------------------------------------------------------- (Please Print) - ------------------------------------------------------- (Taxpayer Identification or Social Security Number) Address: - -------------------------------------------- - ------------------------------------------------------- - ------------------------------------------------------- (Including Zip Code) Area Code and Telephone Number: - ------------- - ------------------------------------------------------- Date: - ----------------------------------------- , 1998 7 EX-99.(A)(6) 7 STOCKHOLDER LETTER 1 [INLAND STEEL INDUSTRIES LOGO] July 20, 1998 Dear Stockholder: Inland Steel Industries, Inc. (the "Company") is offering to purchase up to 25,500,000 shares of its common stock at a price not greater than $34.00 nor less than $30.00 per share. The Company is conducting the Offer through a procedure commonly referred to as a "Dutch auction." This procedure allows you to select the price within the specified price range at which you are willing to sell all or a portion of your shares to the Company. Alternatively, this procedure allows you to elect to sell all or a portion of your shares to the Company at a price determined by the "Dutch auction" process. Based upon the number of shares tendered and the prices specified by the tendering stockholders, the Company will determine the single per share price within that range that will allow it to buy 25,500,000 shares (or such lesser number of shares that are properly tendered). All of the shares that are properly tendered at prices at or below that purchase price (and are not withdrawn) will -- subject to possible proration and provisions relating to the tender of "odd lots" and conditional tenders -- be purchased for cash at that purchase price, net to the selling stockholder. All other shares that have been tendered and not purchased will be returned to the stockholder. If you do not wish to participate in the Offer, you do not need to take any action. The Offer is explained in detail in the enclosed Offer to Purchase and Letter of Transmittal. If you wish to tender your shares, instructions on how to tender shares are provided in the enclosed materials. I encourage you to read these materials carefully before making any decision with respect to the Offer. Neither the Company nor its Board of Directors makes any recommendation to any stockholder whether or not to tender any or all shares. As set forth in Section 10 of the Offer to Purchase, certain of the directors and executive officers of the Company intend to tender shares pursuant to the Offer. Please note that the Offer is scheduled to expire at 12:00 Midnight, New York City time, on Friday, August 14, 1998, unless extended by the Company. Questions regarding the Offer should not be directed to the Company but should instead be directed to MacKenzie Partners, Inc., the Information Agent, or to Goldman, Sachs & Co., the Dealer Managers, at their respective addresses and telephone numbers set forth on the back cover of the Offer to Purchase. Sincerely, ROBERT J. DARNALL Chairman, President and Chief Executive Officer EX-99.(A)(7) 8 LASALLE NOTICE OF BANK LETTER 1 LASALLE NATIONAL BANK 135 South LaSalle Street Chicago, Illinois 60603 IMMEDIATE ATTENTION REQUESTED July 20, 1998 Re: Inland Steel Industries Thrift Plan, Inland Steel Company Savings Plan and Ryerson Tull Savings Plan (the "Plans") Dear Plan Participant: Inland Steel Industries, Inc. (the "Company") has announced that the Company's Board of Directors approved a plan to purchase up to 25,500,000 shares of its common stock. In this purchase plan, called a tender offer, stockholders have an opportunity to tender to the Company any, all or none of their shares at prices not less than $30.00 nor more than $34.00 per share. After shares are tendered by stockholders, the Company will select a price within that range and buy back, at the selected price, shares that have been tendered at or below the selected price. Enclosed with this letter are all of the materials relating to this tender offer. These materials contain important information about the tender offer and should be carefully reviewed. When reviewing the information, please keep the following points in mind: As you may know, your individual account under your Plan consists of two parts. One part is held by Fidelity Management Trust Company ("Fidelity") and is invested in assets other than shares of the Company. The other part is held by us, LaSalle National Bank ("LaSalle"), part of which is invested in shares of the Company's common stock through the Inland Steel Industries Stock Fund (the "Stock Fund"). As a Plan participant, you have the right, under the terms of your Plan, to decide whether or not to direct us to tender shares reflecting your interest in the Stock Fund credited to your individual account. Only LaSalle, as the trustee for the Stock Fund, can actually tender the shares attributable to your individual account. If you decide to direct us to tender any or all of the shares attributable to your interest in the Stock Fund, you will be entitled: -- to specify the price or prices (within the limits of the tender offer) at which they should be tendered; -- to accept the price to be paid to all stockholders whose shares will be purchased; or -- to authorize us to determine a price (which could be as low as $30.00 per share). If you do not direct us whether to tender your shares, we will make the decision on your behalf. Refer to the instructions on the enclosed "Direction Form," which you should fill out and return to us. BE SURE TO COMPLETE AND RETURN THE DIRECTION FORM TO HARRIS TRUST AND SAVINGS BANK, WHICH IS ACTING AS OUR AGENT IN TABULATING THE DIRECTION FORMS, EVEN IF YOU DECIDE NOT TO INSTRUCT US TO TENDER ANY SHARES. YOU SHOULD MAIL YOUR COMPLETED, DATED AND SIGNED ORIGINAL DIRECTION FORM TO HARRIS TRUST AND SAVINGS BANK, WALL STREET STATION, P.O. BOX 1010, NEW YORK, NEW YORK 10269-0523 IN THE ENCLOSED RETURN ENVELOPE. ALTHOUGH THE TENDER OFFER IS NOT SCHEDULED TO EXPIRE UNTIL 12:00 MIDNIGHT, NEW YORK CITY TIME, ON FRIDAY, AUGUST 14, 1998, UNLESS EXTENDED, HARRIS TRUST AND SAVINGS BANK MUST RECEIVE THE DIRECTION FORM BY 5:00 P.M., NEW YORK CITY TIME, ON TUESDAY, AUGUST 11, 1998, UNLESS THIS DEADLINE IS EXTENDED. SEE SECTION 16 OF THE OFFER TO PURCHASE. IF HARRIS TRUST AND SAVINGS BANK DOES NOT RECEIVE A COMPLETED, DATED AND SIGNED ORIGINAL DIRECTION FORM BY 5:00 P.M., NEW YORK CITY TIME, ON TUESDAY, AUGUST 11, 1998, UNLESS EXTENDED, THEN, IN ACCORDANCE WITH THE TERMS OF THE PLANS AND TRUST AGREEMENTS, WE WILL DETERMINE IN OUR SOLE DISCRETION WHETHER AND AT WHAT PRICES TO TENDER SHARES FOR WHICH WE HAVE NOT RECEIVED TIMELY INSTRUCTIONS FROM PARTICIPANTS. 2 If you submit a Direction Form to Harris Trust and Savings Bank directing us to tender Plan shares attributable to your individual account and later decide to withdraw your tender, you must follow the following procedures for your withdrawal to be effective. Harris Trust and Savings Bank (at its address set forth on the back cover of the Offer to Purchase) must receive a written notice of withdrawal by 5:00 p.m., New York City time, on Tuesday, August 11, 1998, unless extended. See Section 16 of the Offer to Purchase. Such notice of withdrawal must specify your name, the number of Plan shares attributable to your individual account which you directed us to tender, the number of such shares withdrawn and the name of the Plan in which you participate. IMPORTANT: IF YOU DIRECT US TO TENDER PLAN SHARES ATTRIBUTABLE TO YOUR INDIVIDUAL ACCOUNT AND THEY ARE PURCHASED BY THE COMPANY, ANY PROCEEDS WILL BE REINVESTED IN THE FIDELITY RETIREMENT GOVERNMENT MONEY MARKET PORTFOLIO UNDER YOUR PLAN AS SOON AS ADMINISTRATIVELY PRACTICABLE AND SUCH INVESTMENT WILL BE CREDITED TO YOUR INDIVIDUAL PLAN ACCOUNT. ONLY THEN WILL YOU BE ABLE TO INSTRUCT FIDELITY TO INVEST ANY PROCEEDS OF THE SALE OF SHARES ATTRIBUTABLE TO YOUR INDIVIDUAL ACCOUNT IN OTHER INVESTMENT OPTIONS OFFERED UNDER YOUR PLAN. YOU MAY CALL FIDELITY AT (800) 354-6551 AFTER THE TRANSFER AND ACCOUNT RECONCILIATION IS COMPLETE, WHICH IS EXPECTED TO BE NO EARLIER THAN THREE BUSINESS DAYS AFTER FIDELITY RECEIVES THE PROCEEDS, TO HAVE THE PROCEEDS OF THE SALE OF SHARES INVESTED IN OTHER INVESTMENT OPTIONS OFFERED UNDER YOUR PLAN. While you will not recognize any immediate tax gain or loss as a result of this tender offer, the tax treatment of your future withdrawals or distributions from the Plans may be adversely impacted by a tender and sale of shares in the Stock Fund. Specifically, under current federal income tax rules, if you receive a distribution from your Plan of shares that have increased in value while they were held by the Plan, under certain circumstances you may have the option of not paying tax on this increase in value, which is called "net unrealized appreciation," until you sell the shares. When the shares are sold, any gain up to the amount of the untaxed net unrealized appreciation is taxed as long-term capital gain. If shares attributable to your individual account are purchased by the Company in the Offer, you will no longer be able to take advantage of this tax benefit. Each Direction Form received by our agent, Harris Trust and Savings Bank, will be held in confidence and will not be released or divulged to any directors, officers, employees or other representatives of the Company. Please contact us at (312) 904-2017 if you have been subject to pressure or coercion by any party or if you are concerned about the confidentiality of instructions to Harris Trust and Savings Bank or us. Neither Inland Steel Industries, Inc., its Board of Directors, LaSalle, as the trustee for the ESOP Trust, Harris Trust and Savings Bank, as our agent in tabulating the Direction Forms, Goldman, Sachs & Co., the Dealer Managers for the tender offer, nor any other party makes any recommendations to you as to whether or not to tender shares or the price or prices at which to tender. You should make your own decision with respect to the tender offer but, if Harris Trust and Savings Bank does not receive a completed Direction Form from you by 5:00 p.m., New York City time, on Tuesday, August 11, 1998, unless extended, we will determine whether and at what price or prices to tender your shares. If you have any questions after reviewing the materials, contact MacKenzie Partners, Inc., the Information Agent for the tender offer, at (800) 322-2885 or (212) 929-5500 with respect to questions on the procedure for tendering the shares attributable to your individual account or the terms and conditions of the tender offer, or Goldman, Sachs & Co., the Dealer Managers for the tender offer, at (800) 323-5678 with respect to questions on the terms and conditions of the tender offer. Questions with respect to the Plans should be directed to the Company at (312) 899-3450. LASALLE NATIONAL BANK 3 DIRECTION FORM INLAND STEEL INDUSTRIES THRIFT PLAN INLAND STEEL COMPANY SAVINGS PLAN RYERSON TULL SAVINGS PLAN BEFORE COMPLETING THIS FORM, PLEASE READ CAREFULLY THE ACCOMPANYING OFFER TO PURCHASE AND ALL OTHER ENCLOSED MATERIALS. ------------------------------ INSTRUCTIONS Carefully complete this Direction Form below. Be sure to sign and date the form. Enclose the Direction Form in the included postage prepaid envelope and mail it promptly. YOUR DIRECTION FORM MUST BE RECEIVED BY HARRIS TRUST AND SAVINGS BANK, AS AGENT FOR LASALLE NATIONAL BANK, NOT LATER THAN 5:00 P.M., NEW YORK CITY TIME, ON TUESDAY, AUGUST 11, 1998, UNLESS EXTENDED. EVEN IF YOU DECIDE NOT TO PARTICIPATE IN THE OFFER, YOU SHOULD COMPLETE AND RETURN THE DIRECTION FORM. If Harris Trust and Savings Bank, as agent for LaSalle National Bank, does not receive a completed, dated and signed original Direction Form from you by such deadline, then, in accordance with the terms of the Plans (as defined herein) and trust agreements, LaSalle National Bank will determine in its sole discretion whether and at what price to tender shares for which it has not received timely instructions from participants. THE BOARD OF DIRECTORS OF THE COMPANY HAS UNANIMOUSLY APPROVED THE OFFER. HOWEVER, YOU SHOULD MAKE YOUR OWN DECISION WHETHER TO TENDER SHARES AND, IF SO, HOW MANY SHARES TO TENDER AND THE PRICE OR PRICES AT WHICH SHARES SHOULD BE TENDERED. NEITHER LASALLE NATIONAL BANK, THE COMPANY NOR ITS BOARD OF DIRECTORS MAKES ANY RECOMMENDATION TO ANY STOCKHOLDER AS TO WHETHER TO TENDER OR REFRAIN FROM TENDERING SHARES. SEE SECTION 10 OF THE OFFER TO PURCHASE FOR INFORMATION REGARDING THE INTENTIONS OF THE COMPANY'S DIRECTORS AND EXECUTIVE OFFICERS WITH RESPECT TO TENDERING SHARES PURSUANT TO THE OFFER. The approximate number of shares of Inland Steel Industries, Inc. common stock reflecting your interest in the Inland Steel Industries Stock Fund (the "Stock Fund") attributable to your individual Plan account as of July 17, 1998, is shown to the right of your address. [ ] 1. Please DO NOT TENDER, but continue to HOLD all shares reflecting my interest in the Stock Fund attributable to my individual Plan account. [ ] 2. Please TENDER ________________ shares (including fractional shares, if any) reflecting my interest in the Stock Fund attributable to my individual Plan account at the purchase price determined by the "Dutch auction" tender process as described in the Offer to Purchase. If this box is checked and no number is entered in the blank, all shares reflecting your interest in the Stock Fund will be tendered in accordance with the previous sentence. [ ] 3. Please TENDER ________________ shares (including fractional shares, if any) reflecting my interest in the Stock Fund attributable to my individual Plan account at the price or prices determined by LaSalle National Bank, in its sole discretion. If this box is checked and no number is entered in the blank, all shares reflecting your interest in the Stock Fund will be tendered in accordance with the previous sentence. [ ] 4. Please TENDER shares (including fractional shares, if any) reflecting my interest in the Stock Fund attributable to my individual Plan account in the quantities indicated below for each of the prices provided. A blank space before a given price will be taken to mean that no shares reflecting your interest in the Stock Fund will be tendered at that price. FILL IN THE TABLE BELOW ONLY IF YOU HAVE CHECKED BOX 4. THE TOTAL NUMBER OF SHARES TO BE TENDERED WHICH YOU INDICATE AFTER BOXES 2 AND 3 ABOVE AND IN THE TABLE BELOW MAY NOT EXCEED THE NUMBER OF SHARES ATTRIBUTABLE TO YOUR INDIVIDUAL PLAN ACCOUNT AS SHOWN TO THE RIGHT OF YOUR ADDRESS, BUT IT MAY BE LESS THAN OR EQUAL TO SUCH NUMBER. 4 The total number of shares to be tendered which you indicate after boxes 2 and 3 above and in the table below may NOT exceed the number of shares attributable to your individual Plan account as shown to the right of your address, but it may be less than or equal to such number. If the total number of shares to be tendered which you indicate after boxes 2 and 3 above and in the table below is less than the number of shares attributable to your individual Plan account, you will be deemed to have directed LaSalle National Bank NOT to tender the remaining shares. FILL IN THE TABLE BELOW ONLY IF YOU HAVE CHECKED BOX 4 ABOVE.
NUMBER NUMBER NUMBER NUMBER NUMBER OF SHARES OF SHARES OF SHARES OF SHARES OF SHARES TENDERED PRICE TENDERED PRICE TENDERED PRICE TENDERED PRICE TENDERED PRICE --------- ------- --------- ------- --------- ------- --------- ------- --------- ------- $30.00 $31.00 $32.00 $33.00 $34.00 $30.125 $31.125 $32.125 $33.125 $30.25 $31.25 $32.25 $33.25 $30.375 $31.375 $32.375 $33.375 $30.50 $31.50 $32.50 $33.50 $30.625 $31.625 $32.625 $33.625 $30.75 $31.75 $32.75 $33.75 $30.875 $31.875 $32.875 $33.875
The undersigned hereby directs LaSalle National Bank, as trustee of the Inland Steel Industries Stock Fund portion of each of the Inland Steel Industries Thrift Plan, the Inland Steel Company Savings Plan and the Ryerson Tull Savings Plan (the "Plans"), to tender to Inland Steel Industries, Inc., in accordance with the Offer to Purchase, dated July 20, 1998, including the related Letter of Transmittal, copies of which I have received and read, the indicated number of shares of the Company's common stock, reflecting my interest in the Inland Steel Industries Stock Fund attributable to my individual Plan account, or to hold such shares, in either case as provided on this form. Signature: - --------------------------------------------- Please print name: - ------------------------------------ Date: - ------------------------------------------- , 1998 THE METHOD OF DELIVERY OF THIS DOCUMENT IS AT THE ELECTION AND RISK OF THE PLAN PARTICIPANT. IF DELIVERY IS BY MAIL, REGISTERED MAIL WITH RETURN RECEIPT REQUESTED IS RECOMMENDED. IN ALL CASES, SUFFICIENT TIME SHOULD BE ALLOWED TO ASSURE DELIVERY. 2 5 QUESTIONS AND ANSWERS FOR PLAN PARTICIPANTS ABOUT THE INLAND STEEL INDUSTRIES, INC. TENDER OFFER Q. ARE PARTICIPANTS IN THE PLANS ELIGIBLE TO PARTICIPATE IN THE TENDER OFFER? A. As a participant in one of the Plans, you have a proportional interest in the Inland Steel Industries Stock Fund (the "Stock Fund"). The Stock Fund is invested in Inland Steel Industries, Inc. common stock, and your proportional interest in the Stock Fund is held in an account by LaSalle National Bank. The Plans provide that in the event of a tender offer, you may direct LaSalle National Bank whether to tender the number of shares of Company common stock that reflect your proportional interest in the Stock Fund. Q. WILL ALL THE SHARES I TENDER BE PURCHASED? A. Not necessarily. Based upon the number of shares tendered and the prices specified by the tendering stockholders, the Company will determine the lowest single per share price within the tender range that will allow it to buy 25,500,000 shares. If the number of shares tendered at or below that price exceeds 25,500,000 shares, the Company will purchase shares pro rata from those tendered. If the number of shares tendered is below this number, then the Company will purchase all the shares tendered. All of the shares that are properly tendered at prices at or below the price determined by the Company through the process described above, and subject to a few other special conditions, will be purchased at the same purchase price. All other Stock Fund shares that have been tendered and not purchased will be returned to the Plans. Q. IF I DECIDE TO DIRECT LASALLE NATIONAL BANK TO TENDER THE SHARES THAT REFLECT MY PROPORTIONAL INTEREST IN THE STOCK FUND, WILL I BE ABLE TO RECEIVE THE PROCEEDS? A. Not directly. All proceeds from the Stock Fund shares that are tendered and sold will be credited to your individual Plan account and automatically invested in the Fidelity Retirement Government Money Market Portfolio. The proceeds may not be distributed except in accordance with the terms of the applicable Plan. Q. WILL I BE ABLE TO CHANGE THE INVESTMENT FUNDS IN WHICH THE PROCEEDS OF STOCK FUND SHARES TENDERED AND PURCHASED ARE INVESTED? A. Yes. Proceeds from the sale of Stock Fund shares may be reinvested in other investment options offered under the Plans by contacting Fidelity Management Trust Company ("Fidelity") at (800) 354-6551 after the investment of the proceeds in the Fidelity Retirement Government Money Market Portfolio is complete. Q. WILL I RECOGNIZE A TAX GAIN OR LOSS, OR OTHER TAX EFFECTS, IF I DIRECT LASALLE NATIONAL BANK TO TENDER SHARES? A. See page 2 of the letter from LaSalle National Bank to participants in the Plans. Q. IS THERE A FORM I HAVE TO RETURN? A. Yes. Included in this mailing is a "Direction Form." Please complete and return this form even if you decide not to direct the tender of any shares. Q. WHAT IS THE DEADLINE FOR RETURNING THE DIRECTION FORM? A. Although the tender offer is not scheduled to expire until 12:00 Midnight, New York City time, on Friday, August 14, 1998, unless extended, the form must be received by Harris 6 Trust and Savings Bank, as agent for LaSalle National Bank, by 5:00 p.m., New York City time, on Tuesday, August 11, 1998, unless this deadline is extended. Q. WHAT ACTIONS SHOULD I TAKE IF I DON'T WISH TO TENDER? A. You should first check Box 1 on the enclosed Direction Form. You should then sign, date and return the Direction Form to Harris Trust and Savings Bank, as agent for LaSalle National Bank, in the enclosed return envelope. If Harris Trust and Savings Bank does not receive a completed, dated and signed original Direction Form from you by 5:00 p.m., New York City time, on Tuesday, August 11, 1998, unless extended, then, in accordance with the terms of the Plans and trust agreements, LaSalle National Bank will determine in its sole discretion whether and at what prices to tender shares. Q. WHAT WILL HAPPEN TO THE SHARES IF I DECIDE TO NOT TENDER MY PLAN SHARES OR THEY ARE NOT PURCHASED IN THE TENDER OFFER? A. It depends on the Plan in which you participate. If you participate in the Inland Steel Company Savings Plan, then nothing will happen to the shares in the immediate future. However, it is anticipated that by July 16, 1999 (the one-year anniversary of the sale of Inland Steel Company to Ispat International N.V.), the Inland Steel Company Savings Plan will divest itself of the shares held in the Stock Fund. Participants in the Inland Steel Industries Thrift Plan or the Ryerson Tull Savings Plan will continue to have a proportional interest in the Stock Fund held in their individual Plan accounts. Regardless of which Plan in which you participate, after Friday, August 28, 1998, unless the tender offer is extended, you may dispose of your interest in the Stock Fund attributable to your individual account under your Plan and invest the proceeds in other investment options in accordance with the terms of your Plan by contacting Fidelity at (800) 354-6551. Q. CAN I CONTINUE TO EXECUTE TRANSACTIONS IN THE STOCK FUND DURING THE TENDER OFFER? A No. Q. WHEN AND HOW CAN I DISPOSE OF MY INTEREST IN THE STOCK FUND AFTER THE TENDER OFFER? A. After Friday, August 28, 1998, unless the tender offer is extended, you may dispose of your interest in the Stock Fund attributable to your individual account under your Plan and invest the proceeds in other investment options in accordance with the terms of your Plan by contacting Fidelity at (800) 354-6551. Q. WHAT IF I HAVE QUESTIONS? A. If you have any questions after reviewing the materials, contact MacKenzie Partners, Inc., the Information Agent for the tender offer, at (800) 322-2885 or (212) 929-5500 with respect to questions on the procedure for tendering the shares attributable to your individual account or the terms and conditions of the tender offer, or Goldman, Sachs & Co., the Dealer Managers for the tender offer, at (800) 323-5678 with respect to questions on the terms and conditions of the tender offer. Questions with respect to the Plans should be directed to the Company at (312) 899-3450. 2 EX-99.(A)(8) 9 MORGAN STANLEY LETTER 1 MORGAN STANLEY DEAN WITTER OVERNIGHT COURIER ADDRESS U.S. MAIL ADDRESS 7617 Mineral Point Road P.O. Box 46400 Suite 200 Madison, Wisconsin 53744-6400 Madison, Wisconsin 53717
IMMEDIATE ATTENTION REQUESTED July 20, 1998 Re: Inland Steel Industries 1988 Incentive Stock Plan Inland Steel Industries 1992 Incentive Stock Plan Inland Steel Industries 1995 Incentive Stock Plan Dear Option Holder: As you may have heard, Inland Steel Industries, Inc. (the "Company") has made an offer to purchase up to 25,500,000 shares of common stock (par value $1.00) (the "Shares"), including associated preferred stock purchase rights, of the Company at a price not in excess of $34.00 nor less than $30.00 per share. The offer is commonly referred to as a "Dutch auction" tender offer. The enclosed Offer to Purchase dated July 20, 1998 (the "Offer to Purchase"), and the related Letter of Transmittal enclosed with this letter (which, together with the Offer to Purchase, constitute the "Offer"), describe the Offer in greater detail. The remainder of this letter summarizes the Offer, your alternatives as a holder of Options and the procedures for completing the enclosed Option Exercise/Tender Instruction Form. As a holder of options to purchase Shares (each, an "Option") under one or more of the plans listed above (each, a "Plan" or, collectively, the "Plans"), you have the following alternatives in connection with the Offer: (i) you may submit to Morgan Stanley Dean Witter, as Option Exercise/Tender Agent, an Option Exercise/Tender Instruction Form instructing Morgan Stanley Dean Witter to conditionally exercise some or all of your outstanding and vested Options (but only to the extent that the Shares issuable upon exercise of such Options ("Option Shares") are accepted in the Offer), provided that any such exercise of an Option and tender of Shares is in accordance with the terms of the applicable Plan, as more fully described below under "Method 1: Conditional Exercise/Tender," (ii) you may submit to Morgan Stanley Dean Witter an Option Exercise/Tender Instruction Form exercising all or a portion of your outstanding and vested Options for Shares which you may tender in the Offer, sell as you would any other Shares that you own, or continue to hold, provided that any exercise of an Option and tender of Shares must be in accordance with the terms of the applicable Plan, as more fully described below under "Method 2: Standard (Unconditional) Exercise," or (iii) you may continue to hold your Options. THE OFFER, PRORATION PERIOD AND WITHDRAWAL RIGHTS WILL EXPIRE AT 12:00 MIDNIGHT, NEW YORK CITY TIME, ON FRIDAY, AUGUST 14, 1998, UNLESS THE COMPANY EXTENDS THE OFFER. EXCEPT AS SET FORTH HEREIN, IN ORDER FOR MORGAN STANLEY DEAN WITTER TO TIMELY TENDER OPTION SHARES, YOU MUST COMPLETE AND RETURN THE ENCLOSED OPTION EXERCISE/TENDER INSTRUCTION FORM IN THE ENCLOSED RETURN ENVELOPE SO THAT IT IS RECEIVED BY MORGAN STANLEY DEAN WITTER NO LATER THAN 5:00 P.M., NEW YORK CITY TIME, ON TUESDAY, AUGUST 11, 1998, UNLESS EXTENDED. IF YOU ARE EXERCISING OPTIONS, BUT NOT TENDERING SHARES IN THE OFFER, YOU ARE NOT SUBJECT TO THE FOREGOING DEADLINE. IF YOU SELECT METHOD 1: "CONDITIONAL EXERCISE/TENDER" FOR SOME PORTION OF THE OPTIONS HELD BY YOU, OPTIONS WHICH YOU CONDITIONALLY EXERCISE IN THE OFFER, BUT WHICH REPRESENT OPTION SHARES THAT ARE NOT ACCEPTED IN THE OFFER, WILL BE DEEMED UNEXERCISED, BUT BECAUSE OF THE TIME REQUIRED TO COMPLETE THOSE 2 PROCEDURES, YOU WILL NOT BE ABLE TO EXERCISE THOSE UNEXERCISED OPTIONS UNTIL THE TENTH DAY FOLLOWING THE TERMINATION OF THE OFFER. THE BOARD OF DIRECTORS OF THE COMPANY HAS UNANIMOUSLY APPROVED THE OFFER. HOWEVER, YOU MUST MAKE YOUR OWN DECISION WHETHER TO EXERCISE OPTIONS AND/OR TENDER SHARES AND, IF SO, WHICH OPTIONS TO EXERCISE, HOW MANY OPTIONS TO EXERCISE, THE NUMBER OF SHARES TO TENDER AND THE PRICE OR PRICES AT WHICH SHARES SHOULD BE TENDERED. NEITHER THE COMPANY NOR ITS BOARD OF DIRECTORS MAKES ANY RECOMMENDATION TO ANY HOLDER OF OPTIONS OR ANY STOCKHOLDER AS TO WHETHER TO EXERCISE OR REFRAIN FROM EXERCISING OPTIONS OR TENDER OR REFRAIN FROM TENDERING SHARES. SEE SECTION 10 OF THE OFFER TO PURCHASE FOR INFORMATION REGARDING THE INTENTION OF THE COMPANY'S DIRECTORS AND EXECUTIVE OFFICERS WITH RESPECT TO TENDERING SHARES PURSUANT TO THE OFFER. HOW THE OFFER WORKS The details of the Offer are described in the enclosed materials, which you should review carefully. However, in broad outline, the transaction will work as follows. The Company has offered, upon the terms and subject to the conditions of the Offer, to purchase up to 25,500,000 of its Shares at a single per Share price not in excess of $34.00 nor less than $30.00. Stockholders may tender their Shares at either (i) a price determined by them (in multiples of $0.125), which cannot exceed $34.00 nor be less than $30.00 per Share or (ii) the Purchase Price (as defined below) determined by the "Dutch auction" tender process. Based upon the number of Shares tendered and the prices specified by the tendering stockholders, the Company will determine the lowest single per Share price (the "Purchase Price") within that range that will allow it to buy 25,500,000 Shares (or such lesser number of Shares that are properly tendered). All of the Shares that are properly tendered at prices at or below that Purchase Price (and are not withdrawn) will, upon the terms and subject to the conditions of the Offer including possible proration, conditional tenders and special provisions relating to the tender of "odd lots," be purchased for cash at that Purchase Price, net to the selling stockholder. All other Shares that have been tendered and not purchased will be returned to their respective stockholders. CAUTION: CHOOSING TO ACCEPT THE PURCHASE PRICE DETERMINED BY THE DUTCH AUCTION TENDER PROCESS COULD RESULT, IN THE CASE OF OPTIONS WITH EXERCISE PRICES HIGHER THAN THE MINIMUM PRICE OF $30.00, IN YOUR RECEIVING A PURCHASE PRICE FOR YOUR OPTION SHARES THAT IS LESS THAN THE EXERCISE PRICE FOR THE RELATED OPTION, RESULTING IN A LOSS TO YOU. IN SUCH EVENT, YOU MUST WRITE A CHECK PAYABLE TO THE COMPANY TO COVER ANY UNPAID PORTION OF THE EXERCISE PRICE. If you want to participate in the Offer, you must either: (i) instruct Morgan Stanley Dean Witter to conditionally exercise some or all of your Options, as described under "Method 1: Conditional Exercise/Tender" below, by completing the enclosed Option Exercise/Tender Instruction Form and returning it in the enclosed return envelope; or (ii) unconditionally exercise some or all of your Options, as described under "Method 2: Standard (Unconditional) Exercise" below, by completing the enclosed Option Exercise/Tender Instruction Form and returning it (along with a check for the amount of the Option exercise price, unless you are using the cashless exercise option described under "Method 2: Standard (Unconditional) Exercise") in the enclosed return envelope and, upon written notification from Morgan Stanley Dean Witter (if you are not using the cashless exercise option), paying any required related withholding taxes, and directing Morgan Stanley Dean Witter to tender your Option Shares. If you wish to exercise your Options and sell the Option Shares in the market or continue to hold the Option Shares, you should follow the instructions described under "Method 2: Standard (Unconditional) Exercise" 2 3 below. IF YOU WISH TO USE METHOD 1 TO EXERCISE SOME OF YOUR OPTIONS AND METHOD 2 TO EXERCISE SOME OF YOUR OPTIONS, YOU MUST SUBMIT TWO OPTION EXERCISE/TENDER INSTRUCTION FORMS, ONE FOR EACH METHOD OF EXERCISE. REGARDLESS OF THE METHOD YOU USE TO EXERCISE YOUR OPTIONS, FROM THE DATE HEREOF UNTIL THE TENTH DAY FOLLOWING THE TERMINATION OF THE OFFER YOU MUST HAVE AN ACCOUNT WITH MORGAN STANLEY DEAN WITTER IN ORDER TO EXERCISE YOUR OPTIONS. PLEASE REFER TO THE ACCOMPANYING LETTER FROM MORGAN STANLEY DEAN WITTER TO LEARN HOW TO OPEN AN ACCOUNT. As described in Section 6 of the Offer to Purchase, you also may tender Option Shares subject to the condition that a specified minimum number of your Option Shares tendered must be purchased if any such Option Shares so tendered are purchased. Under certain circumstances, the Company may prorate the number of Shares purchased pursuant to the Offer. In such a case, the Depositary (as defined in the Offer to Purchase) will perform a preliminary proration, and any Shares tendered at or below the Purchase Price pursuant to this conditional tender for which the condition was not satisfied will automatically be regarded as withdrawn, subject to reinstatement under certain circumstances. This conditional tender is more fully described in Section 6 of the Offer to Purchase. You may select this condition whether you choose Method 1 or Method 2. All tendered Shares will be deemed tendered without regard to this condition unless the "Conditional Tenders" box is completed. As discussed in Section 15 of the Offer to Purchase, the number of Shares to be purchased from a particular stockholder may affect the tax treatment of such purchase to such stockholder and such stockholder's decision whether to tender. EACH STOCKHOLDER IS URGED TO CONSULT WITH HIS OR HER OWN TAX ADVISOR. If you wish to make a conditional tender, you must calculate and appropriately indicate such minimum number of Shares. METHOD 1: CONDITIONAL EXERCISE/TENDER The enclosed Optionee Statement lists the number of Shares that you can acquire pursuant to your Options, provided that any exercise of such Options is in accordance with the applicable Plans. Because of the expiration date of the Options granted on July 27, 1988, you cannot select Method 1 to exercise these Options. If you want to participate in the Offer, but not exercise your Options unless the Company purchases the related Option Shares in the Offer, you must submit a properly completed Option Exercise/Tender Instruction Form to Morgan Stanley Dean Witter, as Option Exercise/Tender Agent. You will need to determine which Options to exercise and for how many Shares. You also need to specify on the Option Exercise/Tender Instruction Form the per Share price at which you wish to tender Option Shares. You may tender your Option Shares at either (i) a price determined by you (in multiples of $0.125), which cannot be in excess of $34.00 nor less than $30.00 per Share or (ii) the Purchase Price determined by the Dutch auction tender process as described above. You should mark the box entitled "Option Shares Tendered at Price Determined by Dutch Auction" if you are willing to accept the Purchase Price resulting from the Dutch auction tender process. This could result in your receiving the minimum price of $30.00 per Option Share. THIS COULD ALSO RESULT, IN THE CASE OF OPTIONS WITH EXERCISE PRICES HIGHER THAN THE MINIMUM PRICE OF $30.00, IN YOUR RECEIVING A PURCHASE PRICE FOR YOUR OPTION SHARES THAT IS LESS THAN THE EXERCISE PRICE FOR THE RELATED OPTION, RESULTING IN A LOSS TO YOU. IN SUCH EVENT, YOU MUST WRITE A CHECK PAYABLE TO THE COMPANY TO COVER ANY UNPAID PORTION OF THE PURCHASE PRICE. THE OFFER, PRORATION PERIOD AND WITHDRAWAL RIGHTS WILL EXPIRE AT 12:00 MIDNIGHT, NEW YORK CITY TIME, ON FRIDAY, AUGUST 14, 1998, UNLESS THE COMPANY EXTENDS THE OFFER. IN ORDER FOR MORGAN STANLEY DEAN WITTER TO TIMELY TENDER OPTION SHARES, YOU MUST COMPLETE AND RETURN THE ENCLOSED OPTION EXERCISE/TENDER INSTRUCTION FORM IN THE ENCLOSED RETURN ENVELOPE SO THAT IT IS RECEIVED BY MORGAN STANLEY DEAN WITTER NO LATER THAN 5:00 P.M., NEW YORK CITY TIME, ON TUESDAY, AUGUST 11, 1998, UNLESS EXTENDED. 3 4 After the above deadline for returning the Option Exercise/Tender Instruction Form, unless you have withdrawn your tender of Option Shares in accordance with the instructions set forth below, Morgan Stanley Dean Witter will tender Option Shares in accordance with your instructions, provided that any such tender of Option Shares (and the related Option exercise) is in accordance with the terms of the Plans and the Options. Unless the Offer is terminated or amended in accordance with its terms, the Company will then determine the Purchase Price as described above. Holders of Options who tender their Option Shares at a price at or below the Purchase Price will receive the Purchase Price for Option Shares accepted for purchase (less the related Option exercise price and withholding taxes as described below). If the number of Shares tendered exceeds the number that the Company desires to purchase at the Purchase Price, Shares (including Option Shares) tendered pursuant to the Offer may be subject to proration as set forth in Sections 1 and 6 of the Offer to Purchase. In the event that proration of tendered Shares (including Option Shares) is required, Morgan Stanley Dean Witter will exercise only those Options for which related Option Shares are accepted for purchase pursuant to the Offer. Options related to Option Shares that are not purchased in the Offer will not be exercised. Holders of such Options will continue to own unexercised Options but, because of the time required to complete these procedures, may not exercise such Options until the tenth day following the termination of the Offer. To the extent that your Option Shares are accepted for purchase pursuant to the Offer, Morgan Stanley Dean Witter will remit to the Company from the net cash proceeds received from the purchase of such Option Shares the Option exercise price for such Option Shares and applicable withholding taxes and will remit to you the remaining net cash proceeds. It may take up to ten days following the termination of the Offer for Morgan Stanley Dean Witter to complete its record keeping and forward the net cash proceeds to Option holders. METHOD 2: STANDARD (UNCONDITIONAL) EXERCISE The enclosed Optionee Statement lists the number of Shares that you can acquire pursuant to your Options. You will need to determine which Options to exercise and for how many Shares. Because of the expiration date of the Options granted on July 27, 1988, you must select Method 2 to exercise these Options, and the Option Exercise/Tender Instruction Form for these Options must be received by Morgan Stanley Dean Witter no later than 12:00 Noon, New York City time, on Friday, July 24, 1998. If you want to unconditionally exercise your Options and tender the underlying Option Shares in the Offer, sell such Option Shares in the open market or hold such Option Shares, you must submit to Morgan Stanley Dean Witter an Option Exercise/Tender Instruction Form, specifying the number of Options you wish to exercise, and either (i) include with the form a check for the Option exercise price for such Option Shares and, upon written notification from Morgan Stanley Dean Witter, pay any required related withholding taxes or (ii) instruct Morgan Stanley Dean Witter to sell in the open market the Option Shares on your behalf, deduct from the proceeds the Option exercise price and any required related withholding taxes and remit such amounts to the Company, with any remaining proceeds from such sale being returned to you, or (iii) instruct Morgan Stanley Dean Witter to sell in the open market only the number of Option Shares necessary to pay the Option exercise price and any required related withholding taxes, to remit such amounts to the Company and to credit your account at Morgan Stanley Dean Witter with the remaining Option Shares. Both of the exercises described in (ii) and (iii) above are referred to herein as a "cashless exercise." You may continue to hold or sell Option Shares that have been credited to your account at Morgan Stanley Dean Witter and that you have not tendered in the Offer as you would any other Shares that you own in a brokerage account. If you are not using the cashless exercise option, and the amount of the check is insufficient to cover the Option exercise price, Morgan Stanley Dean Witter will not exercise any of your Options until sufficient amounts are remitted to Morgan Stanley Dean Witter. If you want to tender Option Shares in the Offer, you will also need to specify on the Option Exercise/ Tender Instruction Form the per Share price at which you wish to tender Option Shares. You may tender your Option Shares at either (i) a price determined by you (in multiples of $0.125), which cannot be in excess of $34.00 nor less than $30.00 per Share, or (ii) the Purchase Price determined by the Dutch auction tender 4 5 process as described above. You should mark the box entitled "Option Shares Tendered at Price Determined by Dutch Auction" if you are willing to accept the Purchase Price resulting from the Dutch auction tender process. This could result in your receiving the minimum price of $30.00 per Option Share. THIS COULD ALSO RESULT, IN THE CASE OF OPTIONS WITH EXERCISE PRICES HIGHER THAN THE MINIMUM PRICE OF $30.00, YOUR RECEIVING A PURCHASE PRICE FOR YOUR OPTION SHARES THAT IS LESS THAN THE EXERCISE PRICE FOR THE RELATED OPTION, RESULTING IN A LOSS TO YOU. THE OFFER, PRORATION PERIOD AND WITHDRAWAL RIGHTS WILL EXPIRE AT 12:00 MIDNIGHT, NEW YORK CITY TIME, ON FRIDAY, AUGUST 14, 1998, UNLESS THE COMPANY EXTENDS THE OFFER. EXCEPT AS SET FORTH HEREIN, IF YOU WANT TO PARTICIPATE IN THE OFFER, YOU MUST COMPLETE AND RETURN THE ENCLOSED OPTION EXERCISE/ TENDER INSTRUCTION FORM IN THE ENCLOSED RETURN ENVELOPE SO THAT IT IS RECEIVED BY MORGAN STANLEY DEAN WITTER NO LATER THAN 5:00 P.M., NEW YORK CITY TIME, ON TUESDAY, AUGUST 11, 1998, UNLESS EXTENDED. OPTION EXERCISE/ TENDER INSTRUCTION FORMS RECEIVED AFTER THAT DATE THAT EXERCISE OPTIONS BUT DO NOT SPECIFY THAT SUCH OPTIONS ARE TO BE TENDERED IN THE OFFER WILL CONTINUE TO BE HONORED. IF YOU SELECT METHOD 1: "CONDITIONAL EXERCISE/ TENDER" FOR SOME PORTION OF THE OPTIONS HELD BY YOU, OPTIONS WHICH YOU CONDITIONALLY EXERCISE IN THE OFFER, BUT WHICH REPRESENT OPTION SHARES THAT ARE NOT ACCEPTED IN THE OFFER, WILL BE DEEMED UNEXERCISED, BUT BECAUSE OF THE TIME REQUIRED TO COMPLETE THOSE PROCEDURES, YOU WILL NOT BE ABLE TO EXERCISE THOSE UNEXERCISED OPTIONS UNTIL THE TENTH DAY FOLLOWING THE TERMINATION OF THE OFFER. If your Option Exercise/Tender Instruction Form directing Morgan Stanley Dean Witter to tender your Option Shares and any necessary payment of the Option exercise price are received by the above deadline for returning the Option Exercise/Tender Instruction Form, unless you have withdrawn your tender of Option Shares in accordance with the instructions set forth below, Morgan Stanley Dean Witter will tender Option Shares in accordance with your instructions, provided that any such tender of Option Shares (and the related Option exercise) is in accordance with the terms of the Plans and the Options. Unless the Offer is terminated or amended in accordance with its terms, the Company will then determine the Purchase Price as set forth above. Holders of Options who tender their Option Shares at a price at or below the Purchase Price will receive the Purchase Price for Option Shares accepted for purchase (less the related Option exercise price and withholding taxes as described below). If the number of Shares tendered exceeds the number that the Company desires to purchase at the Purchase Price, Shares (including Option Shares) tendered pursuant to the Offer may be subject to proration as set forth in Sections 1 and 6 of the Offer to Purchase. Any Option Shares that you have tendered that are not purchased due to proration will remain in your account at Morgan Stanley Dean Witter. To the extent that your Option Shares are accepted for purchase pursuant to the Offer, Morgan Stanley Dean Witter will remit to you the cash proceeds received from the purchase of such Option Shares. It may take up to ten days following the termination of the Offer for Morgan Stanley Dean Witter to complete its record keeping and forward the net cash proceeds to Option holders. WITHDRAWAL IF COMPLETELY AND PROPERLY SUBMITTED, YOUR INSTRUCTIONS TO EXERCISE OPTIONS PURSUANT TO METHOD 2 WILL BE DEEMED IRREVOCABLE UPON RECEIPT BY MORGAN STANLEY DEAN WITTER. THE INSTRUCTIONS CONTAINED IN YOUR OPTION EXERCISE/TENDER INSTRUCTION FORM WITH RESPECT TO TENDERING OPTION SHARES IN THE OFFER WILL BE DEEMED IRREVOCABLE UNLESS WITHDRAWN BY 5:00 P.M., NEW YORK CITY TIME, ON TUESDAY, AUGUST 11, 1998, UNLESS EXTENDED. Withdrawals received after that date will not be honored. In order to make an effective withdrawal, you must submit a new Option Exercise/Tender Instruction Form (or a photocopy of a form) which may be obtained by calling Morgan Stanley Dean Witter at (800) 776-7797 or (608) 829-3262. Upon receipt of a new, completed and signed Option Exercise/Tender Instruction Form, your previous direction will be deemed 5 6 canceled. You may re-tender any of your Option Shares by obtaining another Option Exercise/Tender Instruction Form from Morgan Stanley Dean Witter (or use a photocopy of a form) and following the instructions for directing exercises and tenders. FEDERAL INCOME TAX CONSEQUENCES OF EXERCISE OF OPTIONS HOLDERS ELECTING TO EXERCISE OPTIONS CONDITIONED ON THE RELATED SHARES BEING ACCEPTED FOR PURCHASE To the extent a holder of Options exercises his or her Options conditionally and the related Option Shares are accepted for purchase pursuant to the Offer, such holder will include in his gross income, as compensation, an amount equal to the fair market value of the Option Shares on the exercise date less the exercise price for such Options. Generally, such amounts will be treated as ordinary income for federal income tax purposes. For the tax consequences of the subsequent sale of the Option Shares pursuant to the Offer, please refer to Section 15 of the Offer to Purchase. No taxable event will occur to the extent such holder's Options are not exercised and are returned to such holder. HOLDERS ELECTING TO EXERCISE OPTIONS UNCONDITIONALLY To the extent a holder of Options exercises his or her Options unconditionally and the related Option Shares are accepted for purchase pursuant to the Offer, the holder of such Options will include in his or her gross income, as compensation, an amount equal to the fair market value of the Option Shares on the exercise date less the exercise price for such Options. For the tax consequences of the subsequent sale of the Option Shares pursuant to the Offer, please refer to Section 15 of the Offer to Purchase. In the case of Option Shares that are not accepted for purchase pursuant to the Offer, the tax consequences will vary depending on the type of Options. As to Options qualifying as Incentive Stock Options ("ISOs") under section 422 of the Internal Revenue Code, a holder will generally not incur any federal tax liability upon exercise of the Option. If the holder makes no disposition of the Shares acquired pursuant to exercise of the ISO within two years from the date of grant of the ISO or within one year of the transfer of the Option Shares to the holder, any gain (or loss) realized on a subsequent disposition of such Option Shares generally will be treated as capital gain (or loss). If the foregoing holding period requirements are not satisfied, the holder will generally realize ordinary income, as compensation, at the time of disposition of the Option Shares in an amount equal to the lesser of (i) the excess of the fair market value of the Option Shares on the date of exercise over the exercise price for such Option, or (ii) the excess of the amount realized upon disposition of the Option Shares, if any, over the exercise price for the Option. Holders who are not currently employed by the Company or its subsidiaries are urged to consult their own tax advisors regarding the consequences of exercise. Holders electing to exercise options which do not qualify as ISOs under section 422 of the Internal Revenue Code will recognize gross income, as compensation, at the time of exercise in an amount equal to the fair market value of the Option Shares on the exercise date less the exercise price for such Options. Any gain (or loss) recognized by the holder upon a subsequent sale of the Option Shares generally will be capital gain (or loss). BASIS OF SHARES ACQUIRED THROUGH EXERCISE OF OPTIONS A holder's basis in shares acquired through the exercise of the Options will generally be equal to the amount the holder included in his or her gross income plus the exercise price of the Options. HOLDERS WHO DO NOT ELECT TO EXERCISE OPTIONS No taxable event will occur to the extent that a holder of Options does not elect to exercise his or her Options and continues to hold them. For this reason such a holder will not incur a current tax liability due to not electing to exercise his or her Options. In such a case, such a holder will continue to hold his or her Options as if no Offer had taken place. THE TAX DISCUSSION SET FORTH ABOVE IS INCLUDED FOR GENERAL INFORMATION ONLY. EACH HOLDER OF OPTIONS IS URGED TO CONSULT SUCH HOLDER'S OWN TAX 6 7 ADVISOR TO DETERMINE THE PARTICULAR TAX CONSEQUENCES OF THE OFFER AND THE EXERCISE OF OPTIONS TO SUCH HOLDER, INCLUDING THE APPLICABILITY AND EFFECT OF STATE, LOCAL, AND FOREIGN TAX LAWS. SHARES HELD OUTSIDE THE OPTION PLANS If you hold Shares outside of the Plans, including as a participant in the Inland Steel Industries Thrift Plan, the Inland Steel Company Savings Plan, the Ryerson Tull Savings Plan or the Inland Steel Industries Stockholder Investment Service Dividend Reinvestment Plan, you will receive, under separate cover, additional tender offer materials which can be used to tender those Shares. Those tender offer materials may not be used to direct Morgan Stanley Dean Witter to tender or not tender your Option Shares. The direction to tender or not tender Option Shares may only be made in accordance with the procedures in this letter and the Option Exercise/Tender Instruction Form. FURTHER INFORMATION If you require additional information concerning the terms and conditions of the Offer, please call MacKenzie Partners, Inc., the Information Agent, at (800) 322-2885 or (212) 929-5500. If you require additional information concerning the procedure to tender Option Shares, please contact Morgan Stanley Dean Witter at (800) 776-7797 or (608) 829-3262. Sincerely, MORGAN STANLEY DEAN WITTER 7 8 OPTION EXERCISE/TENDER INSTRUCTION FORM INLAND STEEL INDUSTRIES, INC. SIGNATURE REQUIRED IN BOX 4 BEFORE COMPLETING THIS FORM, PLEASE READ CAREFULLY THE ACCOMPANYING OFFER TO PURCHASE AND ALL OTHER ENCLOSED MATERIALS. THE BOARD OF DIRECTORS OF THE COMPANY HAS UNANIMOUSLY APPROVED THE OFFER. HOWEVER, YOU MUST MAKE YOUR OWN DECISION WHETHER TO EXERCISE OPTIONS AND/OR TENDER SHARES AND, IF SO, WHICH OPTIONS TO EXERCISE, HOW MANY OPTIONS TO EXERCISE, THE NUMBER OF SHARES TO TENDER AND THE PRICE OR PRICES AT WHICH SHARES SHOULD BE TENDERED. NEITHER THE COMPANY NOR ITS BOARD OF DIRECTORS MAKES ANY RECOMMENDATION TO ANY HOLDER OF OPTIONS OR ANY STOCKHOLDER AS TO WHETHER TO EXERCISE OR REFRAIN FROM EXERCISING OPTIONS OR TENDER OR REFRAIN FROM TENDERING SHARES. SEE SECTION 10 OF THE OFFER TO PURCHASE FOR INFORMATION REGARDING THE INTENTION OF THE COMPANY'S DIRECTORS AND EXECUTIVE OFFICERS WITH RESPECT TO TENDERING SHARES PURSUANT TO THE OFFER. ------------------------ INSTRUCTIONS Carefully complete this Option Exercise/Tender Instruction Form below. Be sure to sign and date the form. Enclose the Option Exercise/Tender Instruction Form in the enclosed return envelope and mail it promptly to Morgan Stanley Dean Witter. If your Option Exercise/Tender Instruction Form and related documents, if any (including, unless you are making a cashless exercise, a check in the amount of the exercise price), are not received by the applicable deadline set forth below, or if they are not fully or properly completed, the Company will reject this Option Exercise/Tender Instruction Form and Morgan Stanley Dean Witter will neither exercise your Options nor tender the related Option Shares. The Company reserves the absolute right to waive any defect or irregularity in the tender of any Option Shares. No tender of Option Shares will be deemed to be properly made until all defects or irregularities have been cured or waived. None of Morgan Stanley Dean Witter, the Company, the Dealer Managers, the Depositary, the Information Agent or any other person is or will be obligated to give notice of any defects or irregularities in tenders of Option Shares, and none of them will incur any liability for failure to give any such notice. THE METHOD OF DELIVERY OF THIS DOCUMENT IS AT THE ELECTION AND RISK OF THE TENDERING HOLDER OF OPTIONS. NO FACSIMILE TRANSMISSIONS OF THE OPTION EXERCISE/TENDER INSTRUCTION FORM WILL BE ACCEPTED. IF DELIVERY IS BY MAIL, REGISTERED MAIL WITH RETURN RECEIPT REQUESTED IS RECOMMENDED. IN ALL CASES, SUFFICIENT TIME SHOULD BE ALLOWED TO ASSURE DELIVERY. REGARDLESS OF THE METHOD YOU USE TO EXERCISE YOUR OPTIONS, FROM THE DATE HEREOF UNTIL THE TENTH DAY FOLLOWING THE TERMINATION OF THE OFFER, YOU MUST HAVE AN ACCOUNT WITH MORGAN STANLEY DEAN WITTER IN ORDER TO EXERCISE YOUR OPTIONS. PLEASE REFER TO THE ACCOMPANYING LETTER FROM MORGAN STANLEY DEAN WITTER TO LEARN HOW TO OPEN AN ACCOUNT. METHOD 1: CONDITIONAL EXERCISE/TENDER If you want to participate in the Offer, but not exercise your Options unless the related Option Shares are purchased in the Offer, follow the instructions below. IF YOU WISH TO USE METHOD 1 TO EXERCISE SOME OF YOUR OPTIONS AND METHOD 2 TO EXERCISE SOME OF YOUR OPTIONS, YOU MUST COMPLETE AND SUBMIT TWO OPTION EXERCISE/TENDER INSTRUCTION FORMS, ONE FOR EACH METHOD OF EXERCISE. 9 THE OFFER, PRORATION PERIOD AND WITHDRAWAL RIGHTS WILL EXPIRE AT 12:00 MIDNIGHT, NEW YORK CITY TIME, ON FRIDAY, AUGUST 14, 1998, UNLESS THE COMPANY EXTENDS THE OFFER. IN ORDER FOR MORGAN STANLEY DEAN WITTER TO TIMELY TENDER OPTION SHARES, YOU MUST COMPLETE AND RETURN THE ENCLOSED OPTION EXERCISE/TENDER INSTRUCTION FORM IN THE ENCLOSED RETURN ENVELOPE SO THAT IT IS RECEIVED BY MORGAN STANLEY DEAN WITTER NO LATER THAN 5:00 P.M., NEW YORK CITY TIME, ON TUESDAY, AUGUST 11, 1998, UNLESS EXTENDED. To properly complete your Option Exercise/Tender Instruction Form, you must do the following: (1) Complete Box 1 on this Option Exercise/Tender Instruction Form for each grant date for which you are the holder of Options for which you wish to conditionally tender the Option Shares. Because of the expiration date of the Options granted on July 27, 1988, you cannot select Method 1 for these Options. In column (a), enter the number of Shares subject to Options held by you as set forth on the enclosed Optionee Statement. In column (b), enter the number of Option Shares for each grant date that you wish to tender at a price per Option Share to be selected in Box 2 as described below. At the bottom of column (b), add up the number of Option Shares specified in the column. In the event that not all Option Shares that you tender are purchased (due to proration or if a portion), specify in the far left column the order (by grant date) in which Option Shares are to be purchased. Do not fill in any numbers in column (c). (2) Use Box 2 to select the price (in dollars) per Share at which Option Shares listed in Box 1 are to be tendered. You have two choices. You should mark the box entitled "Shares Tendered at Price Determined by Dutch Auction" if you are willing to accept the Purchase Price resulting from the Dutch auction tender process. This could result in your receiving the minimum price of $30.00 per Share. THIS ACTION COULD ALSO RESULT, IN THE CASE OF OPTIONS WITH EXERCISE PRICES HIGHER THAN THE MINIMUM PRICE OF $30.00, IN YOUR RECEIVING A PURCHASE PRICE FOR YOUR OPTION SHARES LESS THAN THE EXERCISE PRICE FOR THE RELATED OPTION, RESULTING IN A LOSS TO YOU. IN SUCH EVENT, YOU MUST WRITE A CHECK PAYABLE TO THE COMPANY TO COVER ANY UNPAID PORTION OF THE EXERCISE PRICE. In all other cases, you should insert in front of each of the prices specified under "Option Shares Tendered at Price Determined by Holder of Options" the number of Option Shares that you are tendering at that price. This action will result in none of the Option Shares that you tender at a price higher than the Purchase Price being purchased (in which event the related Options will not be exercised). You may not tender the same Option Shares at more than one price, therefore the total number of shares specified in Box 2 must not exceed the total number of shares specified in column (b) in Box 1. If it does, the Company will reject your Option Exercise/Tender Instruction Form as described above. If you desire to tender a portion of your Option Shares at the Purchase Price determined by the Dutch auction tender process and to specify one or more tender prices for another portion of your Option Shares, you must submit two Option Exercise/Tender Instruction Forms. In that case, you should only include in Box 1 of the relevant form those Option Shares being tendered pursuant to that form. (3) Complete Box 3 if you want to impose the condition that a specified minimum number of your tendered Shares must be purchased if any such tendered Shares are purchased (as described below). (4) Complete, date and sign the Option Exercise/Tender Instruction Form in Box 4. (5) Return the Option Exercise/Tender Instruction Form in the enclosed return envelope so that it is received by Morgan Stanley Dean Witter at the address on the return envelope not later than 5:00 p.m., New York City time, on Tuesday, August 11, 1998, unless extended. NO FACSIMILE TRANSMITTALS OF THE OPTION EXERCISE/TENDER INSTRUCTION FORM WILL BE ACCEPTED. METHOD 2: STANDARD (UNCONDITIONAL) EXERCISE If you want to unconditionally exercise your Options (a standard exercise) and tender the related Option Shares in the Offer, sell such Option Shares in the open market or hold such Option Shares, follow the instructions below. IF YOU WISH TO USE METHOD 1 TO EXERCISE SOME OF YOUR OPTIONS AND METHOD 2 TO EXERCISE 2 10 SOME OF YOUR OPTIONS, YOU MUST COMPLETE AND SUBMIT TWO OPTION EXERCISE/TENDER INSTRUCTION FORMS, ONE FOR EACH METHOD OF EXERCISE. THE OFFER, PRORATION PERIOD AND WITHDRAWAL RIGHTS WILL EXPIRE AT 12:00 MIDNIGHT, NEW YORK CITY TIME, ON FRIDAY, AUGUST 14, 1998, UNLESS THE COMPANY EXTENDS THE OFFER. EXCEPT AS SET FORTH HEREIN, IF YOU WANT TO PARTICIPATE IN THE OFFER, YOU MUST COMPLETE AND RETURN THE ENCLOSED OPTION EXERCISE/ TENDER INSTRUCTION FORM IN THE ENCLOSED RETURN ENVELOPE SO THAT IT IS RECEIVED BY MORGAN STANLEY DEAN WITTER NO LATER THAN 5:00 P.M., NEW YORK CITY TIME, ON TUESDAY, AUGUST 11, 1998, UNLESS EXTENDED. OPTION EXERCISE/ TENDER INSTRUCTION FORMS RECEIVED AFTER THAT DATE THAT EXERCISE OPTIONS BUT DO NOT SPECIFY THAT SUCH OPTIONS ARE TO BE TENDERED IN THE OFFER WILL CONTINUE TO BE HONORED. IF YOU SELECT METHOD 1: "CONDITIONAL EXERCISE/ TENDER" FOR SOME PORTION OF THE OPTIONS HELD BY YOU, OPTIONS WHICH YOU CONDITIONALLY EXERCISE IN THE OFFER, BUT WHICH REPRESENT OPTION SHARES THAT ARE NOT ACCEPTED IN THE OFFER, WILL BE DEEMED UNEXERCISED, BUT BECAUSE OF THE TIME REQUIRED TO COMPLETE THOSE PROCEDURES, YOU WILL NOT BE ABLE TO EXERCISE THOSE UNEXERCISED OPTIONS UNTIL THE TENTH DAY FOLLOWING THE TERMINATION OF THE OFFER. To properly complete your Option Exercise/Tender Instruction Form, you must do the following: (1) Complete Box 1 on this Option Exercise/Tender Instruction Form for each grant date for which you are the holder of Options which you wish to exercise. In column (a), enter the number of Shares subject to Options held by you as set forth on the enclosed Optionee Statement. In column (c), list the number of Options that you wish to exercise. At the bottom of column (c), add up the number of Option Shares specified in the column. Do not fill in any numbers in column (b). (2) If you do not wish to tender Option Shares in the Offer, skip Box 2. (3) If you wish to tender Option Shares in the Offer, use Box 2 to select the price (in dollars) per Share at which Option Shares listed in Box 1 are to be tendered. You have two choices. You should mark the box entitled "Shares Tendered at Price Determined by Dutch Auction" if you are willing to accept the Purchase Price resulting from the Dutch auction tender process. This could result in your receiving the minimum price of $30.00 per Share. THIS ACTION COULD ALSO RESULT, IN THE CASE OF OPTIONS WITH EXERCISE PRICES HIGHER THAN THE MINIMUM PRICE OF $30.00, IN YOUR RECEIVING A PURCHASE PRICE FOR YOUR OPTION SHARES LESS THAN THE EXERCISE PRICE FOR THE RELATED OPTION, RESULTING IN A LOSS TO YOU. In all other cases, you should insert in front of each of the prices specified under "Option Shares Tendered at Price Determined by Holder of Options" the number of Option Shares that you are tendering at that price. This action will result in none of the Option Shares that you tender at a price higher than the Purchase Price being purchased. You may not tender the same Option Shares at more than one price, therefore the total number of shares specified in Box 2 must not exceed the total number of shares specified in column (c) in Box 1. If it does, the Company will reject your Option Exercise/Tender Instruction Form as described above. If you desire to tender a portion of your Option Shares at the Purchase Price determined by the Dutch auction tender process and to specify one or more tender prices for another portion of your Option Shares, you must submit two Option Exercise/Tender Instruction Forms. In that case, you should only include in Box 1 of the relevant form those Option Shares being tendered pursuant to that form. (4) Complete Box 3 if you want to impose the condition that a specified minimum number of your tendered Shares must be purchased if any such tendered Shares are purchased (as described below). (5) Complete, date and sign the Option Exercise/Tender Instruction Form in Box 4. Be sure to check one of the three boxes in Box 4 relating to the payment of the Option exercise price and, upon written notification from Morgan Stanley Dean Witter, any required related withholding taxes. 3 11 (6) Return the Option Exercise/Tender Instruction Form (and a check for the Option exercise price, unless you are making a cashless exercise) in the enclosed return envelope so that it is received by Morgan Stanley Dean Witter at the address on the return envelope not later than 5:00 p.m., New York City time, on Tuesday, August 11, 1998, unless extended, if you wish to tender your Option Shares in the Offer. Option Exercise/Tender Instruction Forms received after that date that do not purport to tender Option Shares in the Offer will continue to be honored. If you select Method 1: "Conditional Exercise/ Tender" for some portion of the Options held by you, Options which you conditionally exercise in the Offer, but which represent Option Shares that are not accepted in the Offer, will be deemed unexercised, but because of the time required to complete those procedures, you will not be able to exercise those unexercised Options until the tenth day following the termination of the Offer. Because of the expiration date of the Options granted on July 27, 1988, you must select Method 2 to exercise these Options, and the Option Exercise/Tender Instruction Form for these Options must be received by Morgan Stanley Dean Witter no later than 12:00 p.m., New York City time, on Friday, July 24, 1998. NO FACSIMILE TRANSMITTALS OF THE OPTION EXERCISE/TENDER INSTRUCTION FORM WILL BE ACCEPTED. If you are not making a cashless exercise and the amount of the check is insufficient to cover the exercise price, the Company will reject your Option exercise request. WITHDRAWAL If completely and properly submitted, your direction to exercise Options will be deemed irrevocable upon receipt by Morgan Stanley Dean Witter. Your direction to tender Option Shares will be deemed irrevocable unless withdrawn by 5:00 p.m., New York City time, on Tuesday, August 11, 1998, unless extended. In order to make an effective withdrawal, you must submit a new Option Exercise/Tender Instruction Form which may be obtained by calling Morgan Stanley Dean Witter at (800) 776-7797 or (608) 829-3262 (or use a photocopy of a form). Your new Option Exercise/Tender Instruction Form must be signed and dated in Box 4 -- no other boxes should be completed. Upon receipt of a new, signed and dated Option Exercise/ Tender Instruction Form, your previous direction will be deemed canceled. You may re-tender any of your Option Shares by obtaining another Option Exercise/Tender Instruction Form from Morgan Stanley Dean Witter (or use a photocopy of a form) and repeating the previous instructions for directing exercises and tenders as set forth above. ELECTION OF CONDITION FOR TENDER If you want Morgan Stanley Dean Witter to tender your Shares pursuant to Method 1 or Method 2 subject to the condition that a specified minimum number of your tendered Shares must be purchased if any such tendered Shares are purchased, as described in Section 6 of the Offer to Purchase, you must complete Box 3, captioned "Conditional Tenders." It is your responsibility to calculate such minimum number and you are urged to consult a tax advisor. 4 12 BOX 1 MUST BE COMPLETED BY OPTION HOLDERS USING EITHER METHOD 1 OR METHOD 2 TO EXERCISE OPTIONS. - ------------ BOX 1: OPTION EXERCISE INSTRUCTIONS - ------------ NUMBER OF OPTIONS TO BE EXERCISED (FILL IN EITHER COLUMN (B) OR COLUMN (C), BUT NOT BOTH. THE NUMBER ENTERED IN COLUMN (B) OR COLUMN (C) CANNOT EXCEED THE CORRESPONDING NUMBER IN COLUMN (A).) - ------------------------------------------------------------------------------------------------------------------ (A) (B) NUMBER OF SHARES SUBJECT TO OPTIONS (TO BE COMPLETED NUMBER OF OPTION SHARES BASED ON ENCLOSED TO BE TENDERED PURSUANT ORDER* DATE OF GRANT OPTION PRICE OPTIONEE STATEMENT) TO METHOD 1 - ------------------------------------------------------------------------------------------------------------------ July 27, 1988** $37.75 ., - ------------------------------------------------------------------------------------------------------------------ June 28, 1989 $39.75 - ------------------------------------------------------------------------------------------------------------------ July 25, 1990 $33.750 - ------------------------------------------------------------------------------------------------------------------ June 26, 1991 $21.375 - ------------------------------------------------------------------------------------------------------------------ June 24, 1992 $25.500 - ------------------------------------------------------------------------------------------------------------------ May 26, 1993 $26.125 - ------------------------------------------------------------------------------------------------------------------ May 25, 1994 $30.875 - ------------------------------------------------------------------------------------------------------------------ May 24, 1995 $28.500 - ------------------------------------------------------------------------------------------------------------------ March 27, 1996 $24.688 - ------------------------------------------------------------------------------------------------------------------ January 28, 1998 $19.21875 - ------------------------------------------------------------------------------------------------------------------ , *** $ *** - ------------------------------------------------------------------------------------------------------------------ , *** $ *** - ------------------------------------------------------------------------------------------------------------------ , *** $ *** - ------------------------------------------------------------------------------------------------------------------ TOTAL - ------------------------------------------------------------------------------------------------------------------
BOX 1: OPTION EXERCISE INSTRUCTIONS - ------------ NUMBER OF OPTIONS TO BE EXERCISED (FILL IN EITHER COLUMN (B) OR COLUMN (C), BUT NOT BOTH. THE NUMBER ENTERED IN COLUMN (B) OR COLUMN (C) CANNOT EXCEED THE CORRESPONDING NUMBER IN COLUMN (A).) - ---------------------------------------------- (C) NUMBER OF OPTION SHARES WHICH YOU WISH TO EXERCISE PURSUANT ORDER* TO METHOD 2 - --------------------------------------------------- - ----------------------------------------------------------- - ------------------------------------------------------------------- - --------------------------------------------------------------------------- - ----------------------------------------------------------------------------------- - ------------------------------------------------------------------------------------------- - --------------------------------------------------------------------------------------------------- - ----------------------------------------------------------------------------------------------------------- - ------------------------------------------------------------------------------------------------------------------ - ------------------------------------------------------------------------------------------------------------------ - ------------------------------------------------------------------------------------------------------------------ - ------------------------------------------------------------------------------------------------------------------ - ------------------------------------------------------------------------------------------------------------------ - ------------------------------------------------------------------------------------------------------------------ - ------------------------------------------------------------------------------------------------------------------
*If you have included any Option Shares in Column (a), indicate in this column, by inserting a number from 1 to 13, the order (by grant date) in which Option Shares are to be purchased in the event of proration or if a portion of your Option Shares are not purchased because you specified a tender price higher for such Option Shares than the Purchase Price. If you do not designate an order, if less than all Option Shares tendered are purchased due to proration, Option Shares will be purchased based on the Option exercise price beginning with those Option Shares with the lowest Option exercise price increasing to those with the highest exercise price. **Because of the expiration date of these Options, you must choose Method 2, and this Option Exercise/Tender Instruction Form must be received by Morgan Stanley Dean Witter no later than 12:00 Noon, New York City time, on Friday, July 24, 1998, to exercise these Options. ***The blank spaces in these rows are for special option grants. Please complete these rows if you have Options with grant dates or Option prices not set forth above. - -------------------------------------------------------------------------------- 5 13 BOX 2 MUST BE COMPLETED BY OPTION HOLDERS USING METHOD 1 TO EXERCISE OPTIONS AND OPTION HOLDERS USING METHOD 2 WHO DESIRE TO TENDER OPTION SHARES IN THE OFFER. BOX 2: OPTION SHARE TENDER INSTRUCTIONS SELECT ONLY ONE CHOICE. IF MORE THAN ONE CHOICE IS SELECTED, OR IF NO CHOICE IS SELECTED, THERE IS NO VALID TENDER OF OPTION SHARES. IF YOU WISH TO TENDER SOME OPTION SHARES PURSUANT TO CHOICE 1 AND SOME OPTION SHARES PURSUANT TO CHOICE 2, YOU MUST SUBMIT TWO OPTION EXERCISE/TENDER INSTRUCTION FORMS. THE SAME OPTION SHARES MAY NOT BE TENDERED UNDER BOTH CHOICES. CHOICE 1 OPTION SHARES TENDERED AT PRICE DETERMINED BY DUTCH AUCTION [ ] The undersigned wants to maximize the chance of having Inland Steel Industries, Inc. purchase all the Option Shares that the undersigned is tendering. Accordingly, by checking this box INSTEAD OF COMPLETING THE PRICE BOX BELOW, the undersigned hereby tenders Option Shares and is willing to accept the Purchase Price resulting from the Dutch auction tender process. This action could result in receiving a price per Share of as low as $30.00. This action could also result, in the case of Options with exercise prices higher than the minimum price of $30.00, in your receiving a Purchase Price for your Option Shares less than the exercise price for the related Option, resulting in a loss to you and the need to pay to the Company any unpaid portion of the exercise price. OR CHOICE 2 OPTION SHARES TENDERED AT PRICES DETERMINED BY HOLDER OF OPTIONS By completing the chart below INSTEAD OF CHECKING THE BOX ABOVE, the undersigned hereby tenders Option Shares at the prices marked. This action could result in none of your Options being exercised and no Option Shares being purchased if the Purchase Price for the Shares is less than the price checked. Insert in front of each of the prices below, the number of Option Shares that the undersigned is tendering at that price. The sum of the number of Option Shares listed below MUST EQUAL THE TOTAL OF THE NUMBERS IN COLUMN (b) (IN THE CASE OF METHOD 1 EXERCISES) OR COLUMN (c) (IN THE CASE OF METHOD 2 EXERCISES) IN BOX 1. PRICE (IN DOLLARS) PER SHARE AT WHICH OPTION SHARES ARE BEING TENDERED:
NUMBER NUMBER NUMBER NUMBER NUMBER OF OPTION OF OPTION OF OPTION OF OPTION OF OPTION SHARES SHARES SHARES SHARES SHARES TENDERED PRICE TENDERED PRICE TENDERED PRICE TENDERED PRICE TENDERED PRICE --------- ----- --------- ----- --------- ----- --------- ----- --------- ----- $30.00 $31.00 $32.00 $33.00 $34.00 ------ ------ ------ ------ ------ $30.125 $31.125 $32.125 $33.125 ------ ------ ------ ------ $30.25 $31.25 $32.25 $33.25 ------ ------ ------ ------ $30.375 $31.375 $32.375 $33.375 ------ ------ ------ ------ $30.50 $31.50 $32.50 $33.50 ------ ------ ------ ------ $30.625 $31.625 $32.625 $33.625 ------ ------ ------ ------ $30.75 $31.75 $32.75 $33.75 ------ ------ ------ ------ $30.875 $31.875 $32.875 $33.875 ------ ------ ------ ------
6 14 BOX 3: CONDITIONAL TENDERS - -------------------------------------------------------------------------------- You may condition the tender of your Option Shares upon the purchase by the Company of a specified minimum number of such Shares tendered hereby, all as described in the Offer to Purchase, particularly in Section 6 thereof. Except as set forth in Section 6 of the Offer to Purchase, unless at least such minimum number of your Option Shares is purchased by the Company pursuant to the terms of the Offer, none of such Shares tendered hereby will be purchased. It is your responsibility to calculate and appropriately indicate such minimum number of Option Shares, and you are urged to consult a tax advisor. Unless this box has been completed and a minimum number specified, the tender will be deemed to be made without regard to this condition. Minimum number of Option Shares that must be purchased, if any are purchased: ------------------------------------------------------------ Shares 7 15 BOX 4 MUST BE COMPLETED BY ALL OPTION HOLDERS. BOX 4: SIGNATURE (REQUIRED) - -------------------------------------------------------------------------------- The undersigned acknowledges receipt of the Offer to Purchase, dated July 20, 1998, from the Company and the related Letter of Transmittal and represents that the undersigned has carefully read such documents. The undersigned hereby instructs the Company and Morgan Stanley Dean Witter, subject to the terms and conditions set forth in this Option Exercise/Tender Instruction Form and the accompanying letter to holders of options, the Offer to Purchase and the Letter of Transmittal, to carry out the instructions contained in this form. If the undersigned is relying on Method 1 to exercise Options, the Company and Morgan Stanley Dean Witter are hereby authorized, in accordance with the instructions contained in this Option Exercise/Tender Instruction Form, to (i) exercise the undersigned's Options (but only to the extent that the related Option Shares are accepted for purchase pursuant to the Offer) and deliver such Option Shares to Harris Trust and Savings Bank, as Depositary for the Offer, (ii) remit to the Company from the net cash proceeds received pursuant to the Offer from the purchase of the Option Shares the Option exercise price for such Option Shares and related withholding taxes and (iii) remit to the undersigned the remaining net cash proceeds. The undersigned agrees that if the net cash proceeds from the purchase of the undersigned's Option Shares is insufficient to cover the related Option exercise price and to pay applicable withholding taxes that the undersigned will, immediately upon request of the Company, forward to the Company a check in an amount sufficient to cover any such shortfall. If the undersigned is relying on Method 2 to exercise Options, Morgan Stanley Dean Witter is hereby authorized to exercise the Options specified in Box 1 and, if so indicated, to tender Option Shares as directed in Box 2 and (check one of the following boxes): [ ] A check payable to Morgan Stanley Dean Witter equal to the exercise price of the Options is enclosed. [ ] Morgan Stanley Dean Witter is hereby authorized to sell in the open market all of the Option Shares specified in Box 1 and to use the net proceeds from such sale to pay the Company the Option exercise price and any required related withholding taxes. Any remaining net proceeds should be returned to the undersigned at the address below. [ ] Morgan Stanley Dean Witter is hereby authorized to sell in the open market only the number of Option Shares as are necessary to pay the Option exercise price and any required withholding taxes, to remit such amounts to the Company and, if not directed to tender such Option Shares, to credit the undersigned's account at Morgan Stanley Dean Witter with the remaining Option Shares. The undersigned understands that withholding taxes, at the minimum rate or the rate specified in Form B tax election previously filed with the Company, will be withheld from any proceeds received by the undersigned (unless the undersigned has submitted with this form, or pursuant to subsequent notification from Morgan Stanley Dean Witter, a check in an amount sufficient to cover such amount). The undersigned further agrees that, if such proceeds are insufficient to cover applicable withholding taxes, Option Shares will not be credited to his or her account until he or she has, upon request of Morgan Stanley Dean Witter, forwarded to Morgan Stanley Dean Witter a check in an amount sufficient to cover such taxes. In lieu of withholding at such amounts, the undersigned instructs the Company and Morgan Stanley Dean Witter to withhold taxes in the amount at the following rates (which may not be less than the minimum federal, state or local tax rates applicable to you, nor in excess of such amounts): Federal: __________%; State: __________%; Local:__________%. THE METHOD OF DELIVERY OF THIS DOCUMENT IS AT THE ELECTION AND RISK OF THE UNDERSIGNED. Signature: ------------------------------------ Date: ----------------------------------, 1998 Name: --------------------------------------- Social Security Please Print Number: -------------------------------------
Address: - -------------------------------------------------------------------------------- (Street Address, including Apartment Number -- Please Print) - -------------------------------------------------------------------------------- City State Zip Code Morgan Stanley Dean Witter Account Number: 441- -747 ----------------------------------------- 8 16 [LETTERHEAD OF MORGAN STANLEY DEAN WITTER] <> <
> <> Upon completion of the sale of Inland Steel Company to Ispat, all of your options became fully vested. A print-out of these options that remained unexercised as of July 13, 1998 is enclosed with this material. At this time you have the opportunity to elect not to exercise your options or to exercise any of your options and have the resulting option shares included in the Dutch Auction, sold in the market or credited to your account at Morgan Stanley Dean Witter (a copy of the Offer to Purchase, the Option Exercise/Tender Instruction Form and a Question and Answer sheet describing the transaction is enclosed). As a holder of options of Inland Steel Industries (IAD) you are being afforded a special opportunity to tender your option shares into the Dutch Auction. To properly facilitate the special tender for option holders, Morgan Stanley Dean Witter was selected as the Option Exercise/Tender Agent. Due to the complicated nature of this transaction, all traditional exercises and/or tenders must be facilitated through THE OPTION EXPRESS program at Morgan Stanley Dean Witter during the offering period. Your Option Express account # is 441 | <> | 747 If you have not been assigned an account number above, and you wish to exercise your options or participate in the Dutch Auction Tender, you will need to complete a new account form and W-9. To receive your new account paperwork or to further discuss your options, please call my office at 800-776-7797 or 608-289-3262. Sincerely Stig L. Rahm, CFP Associate Vice President Financial Advisor CORPORATE SERVICES SPECIALIST 17 QUESTIONS & ANSWERS FOR OPTION HOLDERS REGARDING THE INLAND STEEL INDUSTRIES, INC. TENDER OFFER Q. WHY IS THE COMPANY BUYING BACK THESE SHARES? A. The Company is engaging in this transaction to distribute to those shareholders of the Company desiring liquidity a substantial portion of the net proceeds of the sale of Inland Steel Company to Ispat International N.V. and to afford such stockholders an opportunity to sell all or a portion of their shares without the usual transaction costs associated with open market sales. Q. DO I HAVE TO TENDER MY OPTION SHARES? WHY CAN'T I JUST EXERCISE MY OPTIONS? A. You do not have to tender your option shares, and you can use the Option Exercise/Tender Instruction Form to simply exercise your options, if you prefer. However, this is a special opportunity being afforded to you. Normally you would have to own the shares outright to be able to tender, and run the risk that some or all of your shares might not be purchased. A conditional exercise/tender allows you to avoid exercising options for any option shares that are not being purchased in the offer. Q. WHAT WILL HAPPEN TO MY OPTIONS IF I DON'T TENDER? A. Any unexercised and unexpired options at the close of this transaction will be eligible for exercise in accordance with their terms. Because of the closing of the sale of Inland Steel Company to Ispat International N.V., all previously non-vested shares have become fully vested. Q. WHY DO I HAVE TO USE MORGAN STANLEY DEAN WITTER? A. The opportunity to tender is being afforded to option holders on a special basis. To properly facilitate this opportunity, we selected Morgan Stanley Dean Witter as the Option Exercise/Tender Agent. Due to the complicated nature of such a transaction, it is important that all option exercises and any tenders of option shares be facilitated through just one agent. Q. WILL ALL OF MY OPTION SHARES BE ACCEPTED? A. Only shares tendered at or below the purchase price can be accepted. In addition, some of these shares may not be accepted because of proration. See Section 1 of the Offer to Purchase. Q. AT WHAT PRICE SHOULD I TENDER MY OPTION SHARES? A. Neither the Company nor Morgan Stanley Dean Witter makes any recommendation as to the price at which you should tender your option shares. The tender price must fall within the range stipulated in the Offer to Purchase. In addition, due to the nature of the options, you should keep in mind that you may incur a loss if you do not indicate a price that is above the exercise price for each specific grant with an exercise price of $30.00 or more that is tendered. Q. WHAT ARE THE TAX IMPLICATIONS IF I TENDER? A. The exercise and sale of option shares accepted in the tender offer will be treated as an ordinary exercise and sale. The difference between the exercise 18 price and the fair market value will be considered ordinary compensation income and will be taxed accordingly. Option holders who exercise options that are not "incentive stock options" under the Internal Revenue Code will have taxes withheld based upon their most recent payroll data. We urge each option holder to consult his or her own tax advisor to determine the tax consequences of the offer. See Section 15 of the Offer to Purchase. Q. WHAT WILL HAPPEN TO MY OPTIONS THAT REMAIN AFTER THE TENDER OFFER IS COMPLETED? A. Upon completion of the sale of Inland Steel Company to Ispat International N.V., all of your options were fully vested and are eligible for exercise subject to their terms. The Company believes that there will be a sufficient number of shares outstanding and publicly traded following the offer to ensure a continued trading market in the shares. See Section 13 of the Offer to Purchase. Q. IS THERE A FORM I HAVE TO RETURN? A. Yes, if you wish to exercise any options and have the option shares tendered in the offer, sold in the market or credited to your account at Morgan Stanley Dean Witter. Included in this mailing is an "Option Exercise/Tender Instruction Form." Complete and return this form if you decide to exercise options or to direct the tender of any shares underlying your options. Q. WHAT IS THE DEADLINE FOR RETURNING THE "INSTRUCTION FORM"? A. The form must be received by Morgan Stanley Dean Witter no later than 5:00 p.m., New York City time, on Tuesday, August 11, 1998, unless this deadline is extended, except that, with respect to options granted on July 27, 1988, the form must be received no later than 12:00 Noon, New York City time, on Friday, July 24, 1998. The tender offer, proration period and withdrawal rights expire at 12:00 Midnight, New York City time, on Friday, August 14, 1998, unless the Company extends the tender offer. Q. WHAT ACTIONS SHOULD I TAKE IF I DON'T WISH TO PARTICIPATE? A. No action need be taken should you choose not to participate in the offer. Q. CAN I CONTINUE TO EXERCISE OPTIONS DURING THE TENDER OFFER? A. Yes, provided you have not previously tendered option shares under Method 1. If you have tendered option shares under Method 1, you will not be able to exercise those options specified under Method 1 which are not accepted in the offer, until the 10th day following the termination of the offer, unless your direction to tender has been withdrawn by 5:00 p.m. New York City time on Tuesday, August 11, 1998. Because of the administrative requirements of the program that the Company has instituted with Morgan Stanley Dean Witter during the period of the offer and during the ten-day period following the termination of the offer, exercises must be accomplished during this period through Morgan Stanley Dean Witter in accordance with the provisions set forth in the enclosed letter. 2 EX-99.(A)(9) 10 SUMMARY ADVERTISEMENT 1 EXHIBIT (a)(9) This announcement is neither an offer to purchase nor a solicitation of an offer to sell Shares. The Offer is made solely by the Offer to Purchase, dated July 20, 1998, and the related Letter of Transmittal and is being made to all holders of Shares. Capitalized terms not defined in this notice are defined in the Offer to Purchase. The Company is not aware of any jurisdiction where the making of the Offer is not in compliance with any valid applicable law. If the Company becomes aware of any jurisdiction where the making of the Offer is not in compliance with any valid applicable law, the Company will make a good faith effort to comply with such law. If, after such good faith effort, the Company cannot comply with such law, the Offer will not be made to (nor will tenders be accepted from or on behalf of) the holders of Shares residing in such jurisdiction. In any jurisdiction the securities or blue sky laws of which require the Offer to be made by a licensed broker or dealer, the Offer is being made on the Company's behalf by the Dealer Managers or one or more registered brokers or dealers licensed under the laws of such jurisdiction. Notice of Offer by INLAND STEEL INDUSTRIES, INC. to Purchase for Cash up to 25,500,000 Shares of its Common Stock (including the Associated Preferred Stock Purchase Rights) at a Purchase Price not Greater than $34.00 nor Less than $30.00 per Share Inland Steel Industries, Inc., a Delaware corporation (the "Company"), invites its stockholders to tender shares of its common stock ($1.00 par value) (the "Shares") (including the associated preferred stock purchase rights (the "Rights") issued pursuant to the Rights Agreement, dated as of November 25, 1997, between the Company and Harris Trust and Savings Bank, as the Rights Agent) to the Company at a price not greater than $34.00 nor less than $30.00 per Share in cash, as specified by tendering stockholders, upon the terms and subject to the conditions set forth in the Offer to Purchase, dated July 20, 1998 (the "Offer to Purchase"), and in the related Letter of Transmittal (which, as amended from time to time, together constitute the "Offer"). Unless the context otherwise requires, all references to Shares include the associated Rights. The information contained in the Offer to Purchase and the Letter of Transmittal is incorporated by reference herein in its entirety. The Offer is not conditioned on any minimum number of Shares being tendered. The Offer is, however, subject to certain other conditions set forth in the Offer. THE OFFER, PRORATION PERIOD AND WITHDRAWAL RIGHTS EXPIRE AT 12:00 MIDNIGHT, NEW YORK CITY TIME, ON FRIDAY, AUGUST 14, 1998 (THE "EXPIRATION DATE"), UNLESS THE OFFER IS EXTENDED. The Company will, upon the terms and subject to the conditions of the Offer, determine a single per Share price (not greater than $34.00 nor less than $30.00 per Share), net to the seller in cash (the "Purchase Price"), that it will pay for Shares validly tendered and not withdrawn pursuant to the Offer, taking into account the number of Shares so tendered and the prices specified by tendering stockholders. The Company will select the lowest Purchase Price that will allow it to buy 25,500,000 Shares validly tendered and not withdrawn pursuant to the Offer (or such lesser number of Shares as are validly tendered at prices not greater than $34.00 nor less than $30.00 per Share). The Company will pay the Purchase Price for all Shares validly tendered at prices at or below the Purchase Price and not withdrawn, upon the terms and subject to the conditions of the Offer including the terms thereof relating to proration and conditional tenders. For purposes of the Offer, the Company will be deemed to have accepted for payment (and therefore purchased), subject to proration and the conditional tender provisions of the Offer, Shares that are validly tendered at or below the Purchase Price and not withdrawn when, as and if it gives oral or written notice to the Depositary of its acceptance of such Shares for payment pursuant to the Offer. In all cases, payment for Shares tendered and accepted for payment pursuant to the Offer will be made promptly (subject to possible delay in the event of proration or conditional tenders) but only after timely receipt by the Depositary of certificates for Shares (or of a timely Book-Entry Confirmation of such Shares into the Depositary's account at the Book-Entry Transfer Facility), a properly completed and duly executed Letter of Transmittal (or a facsimile thereof), or, in the case of a book-entry transfer, an Agent's Message, or, in the case of a tender through the Book-Entry Transfer Facility's Automated Tender Offer Program, the specific acknowledgment, in each case together with any other required documents. Under no circumstances will the Company pay interest on the Purchase Price including, without limitation, by reason of any delay in making payment. Upon the terms and subject to the conditions of the Offer, in the event that prior to the Expiration Date more than 25,500,000 Shares (or such greater number of Shares as the Company may elect to purchase pursuant to the Offer) are validly tendered at or below the Purchase Price and not withdrawn, the Company will purchase such validly tendered Shares in the following order of priority: (a) first, all Shares validly tendered at or below the Purchase Price and not withdrawn prior to the Expiration Date by any Odd Lot Owner who tenders all Shares (excluding Shares attributable to individual accounts under the Thrift and Savings Plans) beneficially owned by such Odd Lot Owner at or below the Purchase Price (partial tenders will not qualify for this preference) and who completes the box captioned "Odd Lots" on the Letter of Transmittal and, if applicable, on the Notice of Guaranteed Delivery; (b) second, after purchase of all of the foregoing Shares, all Shares conditionally tendered in accordance with the Offer, for which the condition was satisfied without regard to the procedure set forth in clause (c) below, and all other Shares tendered properly and unconditionally, in each case, at prices at or below the Purchase Price and not withdrawn prior to the Expiration Date, on a pro rata basis, if necessary (as described in the Offer); and (c) then, if necessary to permit the Company to purchase 25,500,000 Shares, Shares conditionally tendered, for which the condition was not initially satisfied, at or below the Purchase Price and not withdrawn prior to the Expiration Date, selected by random lot (as described in the Offer). 2 The Offer provides stockholders who are considering a sale of all or a portion of their Shares the opportunity to determine the price or prices (not greater than $34.00 nor less than $30.00 per Share) at which they are willing to sell their Shares and, if any of such Shares are purchased pursuant to the Offer, to sell those Shares for cash to the Company without the usual costs associated with a market sale. The Company is making the Offer to distribute to those stockholders of the Company desiring liquidity a substantial portion of the net proceeds from the ISC/Ispat Transaction and to afford such stockholders an opportunity to sell all or a portion of their Shares without the usual transaction costs associated with open market sales. THE BOARD OF DIRECTORS OF THE COMPANY (THE "BOARD OF DIRECTORS") HAS UNANIMOUSLY APPROVED THE OFFER. HOWEVER, STOCKHOLDERS MUST MAKE THEIR OWN DECISIONS WHETHER TO TENDER SHARES AND, IF SO, HOW MANY SHARES TO TENDER AND THE PRICE OR PRICES AT WHICH SHARES SHOULD BE TENDERED. NEITHER THE COMPANY NOR ITS BOARD OF DIRECTORS MAKES ANY RECOMMENDATION TO ANY STOCKHOLDER AS TO WHETHER TO TENDER OR REFRAIN FROM TENDERING SHARES. SEE THE OFFER FOR INFORMATION REGARDING THE INTENTIONS OF THE COMPANY'S DIRECTORS AND EXECUTIVE OFFICERS WITH RESPECT TO TENDERING SHARES PURSUANT TO THE OFFER. The Company expressly reserves the right, in its sole discretion, at any time and from time to time, and regardless of whether or not any of the events set forth in the Offer shall have occurred or shall be deemed by the Company to have occurred, to extend the period of time during which the Offer is open and thereby delay acceptance for payment of, and payment for, any Shares by giving oral or written notice of such extension to the Depositary and making a public announcement thereof. The Company also expressly reserves the right, in its sole discretion, to terminate the Offer and not accept for payment or pay for any Shares not theretofore accepted for payment or paid for or, subject to applicable law, to postpone payment for Shares upon the occurrence of any of the conditions specified in the Offer by giving oral or written notice of such termination or postponement to the Depositary and making a public announcement thereof. Shares tendered pursuant to the Offer may be withdrawn at any time before the Expiration Date and, unless accepted for payment by the Company as provided in the Offer to Purchase, may also be withdrawn after 12:00 Midnight, New York City time, on Monday, September 14, 1998. For a withdrawal to be effective, the Depositary must receive (at its address set forth in the Offer) a notice of withdrawal in written or facsimile transmission form on a timely basis. Such notice of withdrawal must specify the name of the person who tendered the Shares to be withdrawn, the number of Shares tendered, the number of Shares to be withdrawn and the name of the registered holder, if different from that of the person who tendered such Shares. If the certificates have been delivered or otherwise identified to the Depositary, then, prior to the release of such certificates, the tendering stockholder must also submit the serial numbers shown on the particular certificates evidencing the Shares and the signature on the notice of withdrawal must be guaranteed by an Eligible Institution (except in the case of Shares tendered by an Eligible Institution). If Shares have been tendered pursuant to the procedure for book-entry transfer set forth in the Offer to Purchase, the notice of withdrawal must specify the name and the number of the account at the Book-Entry Transfer Facility to be credited with the withdrawn Shares and otherwise comply with the procedures of such facility. THE OFFER TO PURCHASE AND THE LETTER OF TRANSMITTAL CONTAIN IMPORTANT INFORMATION, WHICH SHOULD BE READ BEFORE STOCKHOLDERS DECIDE WHETHER TO ACCEPT OR REJECT THE OFFER AND, IF ACCEPTED, AT WHAT PRICE OR PRICES TO TENDER THEIR SHARES. The Offer to Purchase, the Letter of Transmittal and related documents are being mailed to record holders of Shares and are being furnished to brokers, banks and similar persons whose names, or the names of whose nominees, appear on the Company's stockholder list (or, if applicable, who are listed as participants in a clearing agency's security position listing) for subsequent transmittal to beneficial holders of Shares. The information required to be disclosed by Rule 13e-4(d)(1) of the Securities Exchange Act of 1934, as amended, is contained in the Offer to Purchase and is incorporated in this notice by reference. Please contact the Information Agent for copies of the Offer to Purchase, the related Letter of Transmittal and other materials related to the Offer. It will furnish copies promptly at the Company's expense. The Information Agent for the Offer is: MACKENZIE PARTNERS, INC. 156 Fifth Avenue New York, New York 10010 (212) 929-5500 (call collect) or (800) 322-2885 (toll free) The Dealer Managers for the Offer are: GOLDMAN, SACHS & CO. 85 Broad Street New York, New York 10004 (800) 323-5678 (toll free) July 20, 1998 EX-99.(A)(10) 11 FORM W-9 1 GUIDELINES FOR CERTIFICATION OF TAXPAYER IDENTIFICATION NUMBER ON SUBSTITUTE FORM W-9 GUIDELINES FOR DETERMINING THE PROPER IDENTIFICATION NUMBER TO GIVE THE PAYER -- Social Security numbers have nine digits separated by two hyphens: i.e., 000-00-0000. Employer identification numbers have nine digits separated by only one hyphen: i.e., 00-0000000. The table below will help determine the number to give the payer. - ------------------------------------------------------------ - ------------------------------------------------------------
FOR THIS TYPE OF ACCOUNT: GIVE THE SOCIAL SECURITY NUMBER OF -- - ---------------------------------------------------- 1. Individual The individual 2. Two or more The actual owner of the individuals account or, if combined (joint account) funds, the first individual on the account(2) 3. Custodian account of The minor(4) a minor (Uniform Gift to Minors Act) 4. a. The usual The grantor-trustee(2) revocable savings trust (grantor is also trustee) b. So-called trust The actual owner(2) account that is not a legal or valid trust under State law 5. Sole proprietorship The owner(1)
- ---------------------------------------------------- FOR THIS TYPE OF ACCOUNT: GIVE THE EMPLOYER IDENTIFICATION NUMBER OF -- 6. Sole proprietorship The owner(1) 7. A valid trust, Legal entity(3) estate, or pension trust 8. Corporate The corporation 9. Association, club, The organization religious, charitable, educational or other tax-exempt organization 10. Partnership The partnership 11. A broker or The broker or nominee registered nominee 12. Account with the The public entity Department of Agriculture in the name of a public entity (such as a State or local government, school district, or prison) that receives agricultural program payments
- ------------------------------------------------------------ - ------------------------------------------------------------ (1) You must show your individual name, but you may also enter your business or "doing business as" name. You may use either your SSN or EIN. (2) List first and circle the name of the person whose number you furnish. (3) List first and circle the name of the legal trust, estate, or pension trust. (Do not furnish the identifying number of the personal representative or trustee unless the legal entity itself is not designated in the account title.) (4) Circle the minor's name and furnish the minor's social security number. 2 GUIDELINES FOR CERTIFICATION OF TAXPAYER IDENTIFICATION NUMBER ON SUBSTITUTE FORM W-9 PAGE 2 OBTAINING A NUMBER If you don't have a taxpayer identification number or you don't know your number, obtain Form SS-5, Application for a Social Security Number Card, or Form SS-4, Application for Employer Identification Number, at the local office of the Social Security Administration or the Internal Revenue Service and apply for a number. PAYEES EXEMPT FROM BACKUP WITHHOLDING The following is a list of payees exempt from backup withholding and for which no information reporting is required. For interest and dividends, all listed payees are exempt except item (9). For broker transactions, payees listed in items (1) through (13) and a person registered under the Investment Advisers Act of 1940 who regularly acts as a broker are exempt. Payments subject to reporting under sections 6041 and 6041A are generally exempt from backup withholding only if made to payees described in items (1) through (7), except a corporation that provides medical and health care services or bills and collects payments for such services is not exempt from backup withholding or information reporting. Only payees described in items (2) through (6) are exempt from backup withholding for barter exchange transactions and patronage dividends. (1) A corporation. (2) An organization exempt from tax under section 501(a), or an individual retirement plan or custodial account under section 403(b)(7). (3) The United States or any agency or instrumentality thereof. (4) A State, the District of Columbia, a possession of the United States, or any subdivision or instrumentality thereof. (5) A foreign government, a political subdivision of a foreign government, or an agency or instrumentality thereof. (6) An international organization or any agency or instrumentality thereof. (7) A foreign central bank of issue. (8) A dealer in securities or commodities required to register in the U.S. or a possession of the U.S. (9) A futures commission merchant registered with the Commodity Futures Trading Commission. (10) A real estate investment trust. (11) An entity registered at all times under the Investment Company Act of 1940. (12) A common trust fund operated by a bank under section 584(a). (13) A financial institution. (14) A middleman known in the investment community as a nominee or listed in the most recent publication of the American Society of Corporate Secretaries, Inc. Nominee List. (15) An exempt charitable remainder trust, or a non-exempt trust described in section 4947. Payments of dividends and patronage dividends not generally subject to backup withholding include the following: - - Payments to nonresident aliens subject to withholding under section 1441. - - Payments to partnerships not engaged in a trade or business in the U.S. and which have at least one nonresident partner. - - Payments of patronage dividends not paid in money. - - Payments made by certain foreign organizations. - - Section 404(k) payments made by an ESOP. Interest payments that are generally exempt from back-up withholding include: - - Payments of interest on obligations issued by individuals. NOTE: You may be subject to backup withholding if this interest is $600 or more and is paid in the course of the payer's trade or business and you have not provided your correct taxpayer identification number to the payer. - - Payments of tax-exempt interest (including exempt-interest dividends under section 852). - - Payments described in section 6049(b)(5) to nonresident aliens. - - Payments on tax-free covenant bonds under section 1451. - - Payments made by certain foreign organizations. Exempt payees described above should file Form W-9 to avoid possible erroneous backup withholding. FILE THIS FORM WITH THE PAYER. FURNISH YOUR TAXPAYER IDENTIFICATION NUMBER. WRITE "EXEMPT" ON THE FACE OF THE FORM AND RETURN IT TO THE PAYER. IF THE PAYMENTS ARE INTEREST, DIVIDENDS, OR PATRONAGE DIVIDENDS, ALSO SIGN AND DATE THE FORM. Certain payments other than interest, royalties, and patronage dividends that are not subject to information reporting are also not subject to backup withholding. For details, see the regulations under sections 6041, 6041A(a), 6045, and 6050A. PRIVACY ACT NOTICE. -- Section 6109 requires most recipients of dividend, interest, or other payments to give taxpayer identification numbers to payers who must report the payments to IRS. IRS uses the numbers for identification purposes. Payers must be given the numbers whether or not recipients are required to file tax returns. Payers must generally withhold 31% of taxable interest, dividend, and certain other payments to a payee who does not furnish a taxpayer identification number to a payer. Certain penalties may also apply. PENALTIES (1) PENALTY FOR FAILURE TO FURNISH TAXPAYER IDENTIFICATION NUMBER. -- If you fail to furnish your taxpayer identification number to a payer, you are subject to a penalty of $50 for each such failure unless your failure is due to reasonable cause and not to willful neglect. (2) CIVIL PENALTY FOR FALSE INFORMATION WITH RESPECT TO WITHHOLDING. -- If you make a false statement with no reasonable basis which results in no imposition of backup withholding, you are subject to a penalty of $500. (3) CRIMINAL PENALTY FOR FALSIFYING INFORMATION. -- Willfully falsifying certifications or affirmations may sub- ject you to criminal penalties including fines and/or imprisonment. FOR ADDITIONAL INFORMATION CONTACT YOUR TAX CONSULTANT OR THE INTERNAL REVENUE SERVICE. -----END PRIVACY-ENHANCED MESSAGE-----