<PAGE> 1
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-Q
QUARTERLY REPORT UNDER SECTION 13 OR 15(d)
OF THE SECURITIES EXCHANGE ACT OF 1934
For quarter ended September 30, 1998 Commission File No. 1-4368
THE LTV CORPORATION
(Exact name of registrant as specified in its charter)
Delaware 75-1070950
(State or other jurisdiction of (IRS Employer
incorporation or organization) Identification No.)
200 Public Square 44114-2308
Cleveland, Ohio (Zip Code)
Registrant's telephone number, including area code: (216) 622-5000
Indicate by check mark whether the Registrant (1) has filed all reports required
to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during
the preceding 12 months (or for such shorter periods that the Registrant was
required to file such reports), and (2) has been subject to such filing
requirements for the past 90 days.
Yes __x__ No _____
Indicate the number of shares outstanding of each of the issuer's classes of
common stock as of the latest practicable date.
99,836,227 shares of common stock
(as of September 30, 1998)
<PAGE> 2
PART I. FINANCIAL INFORMATION
ITEM 1. FINANCIAL STATEMENTS
THE LTV CORPORATION
CONSOLIDATED STATEMENT OF OPERATIONS
(in millions, except per share data)
(Unaudited)
<TABLE>
<CAPTION>
Three Months Ended Nine Months Ended
September 30, September 30,
------------------------ ------------------------
1998 1997 1998 1997
-------- --------- -------- ---------
<S> <C> <C> <C> <C>
SALES $ 1,064 $ 1,135 $ 3,284 $ 3,299
Costs and expenses:
Cost of products sold 927 958 2,889 2,828
Depreciation and amortization 67 62 193 198
Selling, general and administrative 45 43 136 120
Results of affiliates' operations 14 15 32 26
Net interest and other income (4) (7) (19) (27)
Special charge - 150 - 150
-------- --------- -------- ---------
Total 1,049 1,221 3,231 3,295
-------- --------- -------- ---------
INCOME (LOSS) BEFORE INCOME TAXES 15 (86) 53 4
Income tax provision (credit):
Taxes payable 2 (3) 4 1
Taxes not payable in cash 2 (31) 15 1
-------- --------- -------- ---------
Total 4 (34) 19 2
-------- --------- -------- ---------
Income (loss) before extraordinary loss 11 (52) 34 2
Extraordinary loss on early extinguishment of
debt (net of income taxes of $3) - (4) - (4)
-------- --------- -------- ---------
NET INCOME (LOSS) $ 11 $ (56) $ 34 $ (2)
======== ========= ======== =========
Earnings (loss) per share:
Basic $ 0.11 $ (0.50) $ 0.33 $ 0.01
Extraordinary loss - (0.04) - (0.04)
-------- --------- -------- ---------
Total $ 0.11 $ (0.54) $ 0.33 $ (0.03)
======== ========= ======== =========
Dilutive $ 0.11 $ (0.50) $ 0.33 $ 0.01
Extraordinary loss - (0.04) - (0.04)
-------- --------- -------- ---------
Total $ 0.11 $ (0.54) $ 0.33 $ (0.03)
======== ========= ======== =========
Cash dividends per common share $ 0.03 $ 0.03 $ 0.09 $ 0.09
======== ========= ======== =========
</TABLE>
- ------------
See notes to consolidated financial statements.
I-1
<PAGE> 3
THE LTV CORPORATION
CONSOLIDATED BALANCE SHEET
(in millions, except per share data)
<TABLE>
<CAPTION>
September 30, December 31,
1998 1997
------------- ------------
<S> <C> <C>
ASSETS
CURRENT ASSETS
Cash and cash equivalents $ 91 $ 160
Marketable securities 258 360
----------- -----------
Total cash and marketable securities 349 520
Receivables, less allowance for doubtful accounts 477 470
Inventories:
Products 586 656
Materials, purchased parts and supplies 269 246
----------- -----------
Total inventories 855 902
Prepaid expenses, deposits and other 17 12
----------- -----------
Total current assets 1,698 1,904
----------- -----------
INVESTMENTS IN AFFILIATES 324 312
OTHER NONCURRENT ASSETS 189 169
PROPERTY, PLANT AND EQUIPMENT 4,314 4,096
Allowance for depreciation (1,056) (935)
------------ -----------
Total property, plant and equipment 3,258 3,161
----------- -----------
$ 5,469 $ 5,546
=========== ===========
LIABILITIES AND SHAREHOLDERS' EQUITY
CURRENT LIABILITIES
Accounts payable $ 348 $ 354
Accrued employee compensation and benefits 337 365
Other accrued liabilities 201 219
----------- -----------
Total current liabilities 886 938
----------- -----------
NONCURRENT LIABILITIES
Long-term debt 363 355
Postemployment health care and other insurance benefits 1,539 1,570
Pension benefits 543 548
Other 422 459
----------- -----------
Total noncurrent liabilities 2,867 2,932
----------- -----------
SHAREHOLDERS' EQUITY
Convertible preferred stock (aggregate liquidation value $50.0) 1 1
Common stock (par value $0.50 per share) 53 53
Additional paid-in capital 1,046 1,032
Retained earnings 686 661
Treasury stock (5 million shares at cost) (68) (68)
Accumulated other comprehensive loss and other (2) (3)
------------ -----------
Total shareholders' equity 1,716 1,676
----------- -----------
$ 5,469 $ 5,546
=========== ===========
</TABLE>
- ------------
See notes to consolidated financial statements.
I-2
<PAGE> 4
THE LTV CORPORATION
CONSOLIDATED STATEMENT OF CASH FLOWS
(in millions)
(Unaudited)
<TABLE>
<CAPTION>
Nine Months Ended
September 30,
-------------------------------
1998 1997
----------- -----------
<S> <C> <C>
OPERATING ACTIVITIES
Net income (loss) $ 34 $ (2)
Adjustments to reconcile net income (loss) to net cash
provided by operating activities:
Extraordinary loss - 4
Special charge - 150
Noncash losses of affiliates 32 26
Depreciation and amortization 193 198
Income tax provision not payable in cash 15 1
Defined benefit pension expense 3 21
Postemployment benefit payments more than related expense (21) (22)
Changes in assets, liabilities and other (70) (118)
----------- -----------
Net cash provided by operating activities 186 258
----------- -----------
INVESTING ACTIVITIES
Capital expenditures (290) (215)
VP Buildings acquisition - (188)
Investment in steel-related businesses (57) (69)
Net sales of marketable securities 102 165
Other (1) 15
----------- -----------
Net cash used in investing activities (246) (292)
----------- -----------
FINANCING ACTIVITIES
Borrowings 3 290
Dividends paid and other (10) (11)
Pension funding (2) (60)
Share repurchases - (35)
----------- -----------
Net cash (used in) provided by financing activities (9) 184
----------- -----------
Net (decrease) increase in cash and cash equivalents (69) 150
Cash and cash equivalents at beginning of period 160 107
----------- -----------
Cash and cash equivalents at end of period $ 91 $ 257
=========== ===========
Supplemental cash flow information is presented as follows:
Interest payments $ 2 $ 6
Income tax payments 6 5
Capitalized interest 24 12
Purchases of marketable securities 2,208 5,591
Sales and maturities of marketable securities 2,312 5,757
</TABLE>
- ------------
See notes to consolidated financial statements.
I-3
<PAGE> 5
THE LTV CORPORATION
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
September 30, 1998
NOTE (1) - The accompanying unaudited consolidated financial statements have
been prepared in accordance with generally accepted accounting principles for
interim financial information and with the instructions to Form 10-Q and
Article 10 of Regulation S-X. Accordingly, they do not include all of the
information and disclosures required by generally accepted accounting principles
for complete financial statements. All adjustments that are, in the opinion of
management, necessary for a fair presentation have been made and are of a
recurring nature unless otherwise disclosed herein. Certain prior period amounts
have been reclassified to conform with the current period presentation. The
results of operations for the interim periods are not necessarily indicative of
results of operations for a full year. For further information, refer to the
consolidated financial statements and the notes thereto for the year ended
December 31, 1997 included in the LTV Annual Report to Shareholders incorporated
by reference into the 1997 Annual Report on Form 10-K filed with the Securities
and Exchange Commission.
NOTE (2) - LTV Steel Company, Inc. effective as of March 1, 1998, entered into a
$250 million five-year credit facility ("Inventory Facility"), replacing the
existing $150 million Letter of Credit Facility. The Inventory Facility, secured
by essentially all of LTV Steel's inventory through a special purpose entity,
permits borrowings of up to $250 million for working capital and general
corporate purposes, $150 million of which may be used to issue letters of
credit. Interest will accrue at the Company's option of either the lender bank's
base rate or 1% above LIBOR rates. At September 30, 1998, there were no
outstanding borrowings against the Inventory Facility; and letters of credit
totaling $68 million were outstanding under this facility. The borrower under
the Inventory Facility is LTV Steel Products, L.L.C., a consolidated structured
finance special purpose entity wholly owned by LTV Steel, which purchases and
pledges essentially all of the inventory produced by LTV Steel. The creditors of
LTV Steel Products, L.L.C., have a claim on the assets of that Company prior to
those assets becoming available to other creditors of LTV or its affiliates.
NOTE (3) - At September 30, 1998, accumulated other comprehensive loss included
in the balance sheet amounted to $1 million with no material changes since
December 31, 1997. The accumulated other comprehensive loss at September 30,
1997 was $9 million, with no material changes since December 31, 1996.
NOTE (4) - VP Buildings has secured a $4 million, ten-year, 7.25% mortgage on
its headquarters building located in Memphis, Tennessee, effective April 1,
1998, with principal and interest payments due monthly. Additionally, VP
Buildings has a $20 million demand facility that expires on December 31, 1998.
At September 30, 1998, there were no borrowings outstanding under this facility.
I-4
<PAGE> 6
NOTE (5) - The following is a summary of the financial information related to VP
Buildings, which was acquired on July 2, 1997, for the nine months ended 1998
and 1997 (in millions):
<TABLE>
<CAPTION>
Results of operations 1998 1997
---- ----
<S> <C> <C>
Net sales $ 258 $ 85
Costs and expenses 242 77
-------- -------
Pretax income $ 16 $ 8
======== =======
Total assets $ 269 248
Capital expenditures 10 1
</TABLE>
NOTE (6) - The Company has a 50% interest, accounted for under the equity
method, in an unconsolidated joint venture, Trico Steel Company, L.L.C., ("Trico
Steel"), which began commercial operations in April 1997. Included in LTV's
consolidated results is a pretax loss of $33 million representing the Company's
share of Trico Steel operating results. The following is a summary of the
financial information related to Trico Steel (in millions):
<TABLE>
<CAPTION>
Results of operations 1998 1997
---- ----
<S> <C> <C>
Net sales $ 214 $ 43
Costs and expenses 280 98
-------- -------
Pretax loss $ (66) $ (55)
======== =======
<CAPTION>
Financial Position Sept. 30, 1998 Dec. 31, 1997
-------------- -------------
<S> <C> <C>
Current assets $ 67 $ 76
Noncurrent assets 532 526
Current liabilities (30) (38)
Noncurrent liabilities (273) (273)
-------- ------
Net assets $ 296 $ 291
======== ======
</TABLE>
NOTE (7) - LTV's wholly owned subsidiary, LTV Steel Company, Inc., has fully and
unconditionally guaranteed the Company's obligation to pay principal, premium,
if any, and interest with respect to the Senior Notes due September 2007. The
following supplemental consolidating condensed financial statements of The LTV
Corporation present: the balance sheets as of September 30, 1998 and December
31, 1997; statements of operations for the three months and nine months ended
September 30, 1998 and 1997; and statements of cash flows for the nine months
ended September 30, 1998 and 1997. The LTV Corporation (Parent), LTV Steel
Company, Inc. (Guarantor) and the combined Non-Guarantor Subsidiaries'
investments in subsidiaries are accounted for using the equity method. Necessary
elimination entries have been made to consolidate the Parent and all of its
subsidiaries.
I-5
<PAGE> 7
Consolidating Condensed Balance Sheet
(in millions)
<TABLE>
<CAPTION>
September 30, 1998
---------------------------------------------------------------------
Non-Guarantor
Parent Guarantor Subsidiaries Eliminations Consolidated
------- --------- ------------ ------------ ------------
<S> <C> <C> <C> <C> <C>
Cash, cash equivalents and marketable securities $ 320 $ (25) $ 54 $ - $ 349
Receivables 3 - 474 - 477
Notes receivable/(payable) - 1,005 (1,005) - -
Inventories - - 855 - 855
Other current assets 3 10 4 - 17
------- ------- ------- ------- -------
Total current assets 326 990 382 - 1,698
Intercompany, net 226 133 (359) - -
Investments and other noncurrent assets 1,500 229 456 (1,672) 513
Property, plant and equipment - 3,035 223 - 3,258
------- ------- ------- ------- -------
Total assets $ 2,052 $ 4,387 $ 702 $(1,672) $ 5,469
======= ======= ======= ======= =======
Total current liabilities $ 26 $ 759 $ 101 $ - $ 886
Long-term debt 298 61 4 - 363
Postemployment health care and other insurance benefits - 1,421 118 - 1,539
Pension benefits - 534 9 - 543
Other 12 387 23 - 422
Shareholders' equity 1,716 1,225 447 (1,672) 1,716
------ ------- ------- ------- -------
Total liabilities and shareholders' equity $ 2,052 $ 4,387 $ 702 $(1,672) $ 5,469
======= ======= ======= ======= =======
<CAPTION>
December 31, 1997
---------------------------------------------------------------------
Non-Guarantor
Parent Guarantor Subsidiaries Eliminations Consolidated
------- --------- ------------- ------------ ------------
<S> <C> <C> <C> <C> <C>
Cash, cash equivalents and marketable securities $ 467 $ (15) $ 68 $ - $ 520
Receivables 4 - 466 - 470
Notes receivable/(payable) - 303 (303) - -
Inventories - 859 43 - 902
Other current assets 4 7 1 - 12
------ ------- -------- ------- -------
Total current assets 475 1,154 275 - 1,904
Intercompany, net 83 172 (255) - -
Investments and other noncurrent assets 1,470 186 432 (1,607) 481
Property, plant and equipment - 2,939 222 - 3,161
------ ------- -------- ------- -------
Total assets $ 2,028 $ 4,451 $ 674 $(1,607) $ 5,546
====== ======= ======== ======= =======
Total current liabilities $ 37 $ 799 $ 102 $ - $ 938
Long-term debt 298 57 - - 355
Postemployment health care and other insurance benefits - 1,458 112 - 1,570
Pension benefits - 538 10 - 548
Other 17 419 23 - 459
Shareholders' equity 1,676 1,180 427 (1,607) 1,676
------- ------- -------- ------- -------
Total liabilities and shareholders' equity $ 2,028 $ 4,451 $ 674 $(1,607) $ 5,546
======= ======= ======== ======= =======
</TABLE>
I-6
<PAGE> 8
Consolidating Condensed Statement of Operations
(in millions)
<TABLE>
<CAPTION>
Three Months Ended September 30, 1998
---------------------------------------------------------------------
Non-Guarantor
Parent Guarantor Subsidiaries Eliminations Consolidated
------- --------- ------------- ------------ ------------
<S> <C> <C> <C> <C> <C>
Net sales $ - $ 921 $ 1,210 $(1,067) $ 1,064
Costs and expenses:
Cost of products sold - 833 1,161 (1,067) 927
Depreciation and amortization - 59 8 - 67
Selling, general and administrative 2 33 10 - 45
Results of affiliates' operations (13) - 14 13 14
Net interest and other income (4) (18) 18 - (4)
------- ------- -------- ------- -------
Total (15) 907 1,211 (1,054) 1,049
------- ------- -------- ------- -------
Income (loss) before income taxes 15 14 (1) (13) 15
Income tax provision 4 3 - (3) 4
------- ------- -------- ------- -------
Net income (loss) $ 11 $ 11 $ (1) $ (10) $ 11
======= ======= ======== ======= =======
<CAPTION>
Three Months Ended September 30, 1997
---------------------------------------------------------------------
Non-Guarantor
Parent Guarantor Subsidiaries Eliminations Consolidated
------- --------- ------------- ------------ ------------
<S> <C> <C> <C> <C> <C>
Net sales $ - $ 975 $ 336 $ (176) $ 1,135
Costs and expenses:
Cost of products sold - 843 291 (176) 958
Depreciation and amortization - 56 6 - 62
Selling, general and administrative 3 30 10 - 43
Results of affiliates' operations 87 (9) 15 (78) 15
Net interest and other income (4) 1 (4) - (7)
Special charge - 150 - - 150
------- ------- -------- ------- -------
Total 86 1,071 318 (254) 1,221
------- ------- -------- ------- -------
Income (loss) before income taxes (86) (96) 18 78 (86)
Income tax provision (credit) (34) (39) 7 32 (34)
------- ------- -------- ------- -------
Income (loss) before extraordinary loss (52) (57) 11 46 (52)
Extraordinary loss (4) - - - (4)
------- ------- -------- ------- -------
Net income (loss) $ (56) $ (57) $ 11 $ 46 $ (56)
======= ======= ======== ======= =======
<CAPTION>
Nine Months Ended September 30, 1998
---------------------------------------------------------------------
Non-Guarantor
Parent Guarantor Subsidiaries Eliminations Consolidated
------- --------- ------------- ------------ ------------
<S> <C> <C> <C> <C> <C>
Net sales $ - $ 2,855 $ 3,060 $(2,631) $ 3,284
Costs and expenses:
Cost of products sold - 2,587 2,933 (2,631) 2,889
Depreciation and amortization - 172 21 - 193
Selling, general and administrative 9 98 29 - 136
Results of affiliates' operations (46) (1) 32 47 32
Net interest and other income (16) (46) 43 - (19)
------- ------- -------- ------- -------
Total (53) 2,810 3,058 (2,584) 3,231
------- ------- -------- ------- -------
Income before income taxes 53 45 2 (47) 53
Income tax provision 19 16 1 (17) 19
------- ------- -------- ------- -------
Net income $ 34 $ 29 $ 1 $ (30) $ 34
======= ======= ======== ======= =======
</TABLE>
I-7
<PAGE> 9
<TABLE>
<CAPTION>
Nine Months Ended September 30, 1997
----------------------------------------------------------------------
Non-Guarantor
Parent Guarantor Subsidiaries Eliminations Consolidated
------- --------- ------------- ------------ ------------
<S> <C> <C> <C> <C> <C>
Net sales $ - $ 2,990 $ 834 $ (525) $ 3,299
Costs and expenses:
Cost of products sold - 2,603 750 (525) 2,828
Depreciation and amortization - 183 15 - 198
Selling, general and administrative 9 91 20 - 120
Results of affiliates' operations 14 (20) 26 6 26
Net interest and other income (27) 5 (5) - (27)
Special charge - 150 - - 150
------ ------- -------- ------- -------
Total (4) 3,012 806 (519) 3,295
------ ------- -------- ------- -------
Income (loss) before income taxes 4 (22) 28 (6) 4
Income tax provision (credit) 2 (9) 11 (2) 2
------ ------- -------- -------- -------
Income (loss) before extraordinary loss 2 (13) 17 (4) 2
Extraordinary loss (4) - - - (4)
------- ------- -------- ------- -------
Net income (loss) $ (2) $ (13) $ 17 $ (4) $ (2)
======= ======= ======== ======= =======
</TABLE>
CONSOLIDATING CONDENSED CASH FLOWS STATEMENT
(in millions)
<TABLE>
<CAPTION>
Nine Months Ended September 30, 1998
-----------------------------------------------------------------------
Non-Guarantor
Parent Guarantor Subsidiaries Eliminations Consolidated
------- --------- ------------- ------------ ------------
<S> <C> <C> <C> <C> <C>
Cash provided by (used in) operating activities $ (138) $ 274 $ 50 $ - $ 186
------- ------- -------- ------- -------
Investing activities:
Capital expenditures - (280) (10) - (290)
Investment in steel-related businesses - - (57) - (57)
Net sales of marketable securities 102 - - - 102
Other - (1) - - (1)
------- ------- -------- ------- -------
Net cash provided by (used in) investing activities 102 (281) (67) - (246)
------- ------- -------- ------- -------
Financing activities:
Borrowings - - 3 - 3
Pension funding - (2) - - (2)
Dividends paid and other (10) - - - (10)
------- ------- -------- ------- -------
Net cash provided by (used in) financing activities (10) (2) 3 - (9)
------- ------- -------- ------- -------
Net decrease in cash and cash equivalents (46) (9) (14) - (69)
Cash and cash equivalents at beginning of year 108 (16) 68 - 160
------- ------- -------- ------- -------
Cash and cash equivalents at end of period $ 62 $ (25) $ 54 $ - $ 91
======= ======= ======== ======= =======
<CAPTION>
Nine Months Ended September 30, 1997
-----------------------------------------------------------------------
Non-Guarantor
Parent Guarantor Subsidiaries Eliminations Consolidated
------- --------- ------------- ------------ ------------
<S> <C> <C> <C> <C> <C>
Cash provided by (used in) operating activities $ (61) $ 257 $ 62 $ - $ 258
------- ------- -------- ------- -------
Investing activities:
Capital expenditures - (214) (1) - (215)
Investment in VP Buildings (188) - - - (188)
Investment in steel-related businesses - - (69) - (69)
Net sales of marketable securities 165 - - - 165
Other (6) - 21 - 15
------- ------- -------- ------- -------
Net cash used in investing activities (29) (214) (49) - (292)
------- ------- -------- ------- -------
Financing activities:
Borrowings 290 - - - 290
Pension funding - (58) (2) - (60)
Dividends paid and other (11) - - - (11)
Shares repurchases (35) - - - (35)
------- ------- -------- ------- -------
Net cash provided by (used in) financing activities 244 (58) (2) - 184
------- ------- -------- ------- -------
Net increase (decrease) in cash and cash equivalents 154 (15) 11 - 150
Cash and cash equivalents at beginning of year 62 (15) 60 - 107
------- ------- -------- ------- -------
Cash and cash equivalents at end of period $ 216 $ (30) $ 71 $ - $ 257
======= ======= ======== ======= =======
</TABLE>
I-8
<PAGE> 10
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF
RESULTS OF OPERATIONS AND FINANCIAL CONDITION
RESULTS OF OPERATIONS - COMPARISON OF THIRD QUARTER AND FIRST NINE MONTHS 1998
AND 1997
Sales
- -----
Sales of $1,064 million in the third quarter of 1998 decreased by $71
million (6%) from the third quarter of 1997. Third quarter 1998 steel shipments
of 1.9 million tons decreased by 79,000 tons (4%) from the third quarter of
1997. The overall sales decrease in the third quarter of 1998 resulted from
lower average selling prices of 4% and lower shipments partially offset by the
VP Buildings increased sales of $15 million.
Sales of $3,284 million in the first nine months of 1998 were $15 million
lower than the first nine months of 1997. Steel shipments in the first nine
months of 1998 of 5.9 million tons decreased by 186,000 tons (3%) from the first
nine months of 1997. The overall sales decrease in the first nine months of 1998
resulted from the lower average selling prices of 3% and lower shipments
partially offset by the VP Buildings increased sales of $173 million in 1998
included since its acquisition on July 2, 1997.
Production and Costs
- --------------------
Cost of products sold as a percentage of sales increased 3% and 2% in the
third quarter and nine months of 1998, respectively, compared to the 1997
periods. The increase is primarily due to the lower average selling prices in
the 1998 periods, partially offset by lower steel production costs. Included in
the lower steel production costs in the 1998 third quarter is the favorable
effect of a required periodic actuarial valuation primarily related to pensions
and other postemployment obligations benefits which increased net income by $8
million due to lower retiree costs related to the first half of 1998. A similar
actuarial valuation in the same period last year increased net income
$14 million due to lower retiree costs related to the first half of 1997. Also
in the current quarter, a lower effective tax rate increased net income by $0.02
per share.
Raw steel production of 2.2 million tons in the third quarter of 1998
increased by 80,000 tons (4%) from the third quarter of 1997. The average
operating rate (of AISI defined capacity) at the Company's steelmaking
facilities during the third quarter of 1998 was 102% compared with 101% in 1997.
Raw steel production of 6.2 million tons in the first nine months of 1998
was 402,000 tons lower than the first nine months of 1997. The average operating
rate at the Company's steelmaking facilities during the first nine months of
1998 was 97% compared with 106% in 1997. This decrease is primarily due to the
scheduled reline of the H-4 blast furnace at the Company's Indiana Harbor Works
and an increase in the AISI defined rated capacity of LTV steelmaking facilities
in 1998. LTV re-rated its AISI capacity in 1998 which resulted in a 2.3%
increase in ratings capacity.
Results of Affiliates' Operations
- ---------------------------------
Results of affiliates' operations consist principally of LTV's share of
start-up operating losses from its 50% interest in Trico Steel Company, L.L.C.,
("Trico Steel"), which commenced commercial operations in the second quarter of
1997. Trico Steel continues to incur expenses in excess of revenues.
I-9
<PAGE> 11
LIQUIDITY AND CAPITAL RESOURCES
The Company's sources of liquidity include cash and cash equivalents,
marketable securities, cash from operations, amounts available under credit
facilities and other external sources of funds. Management believes that these
sources are sufficient to fund the current requirements of working capital,
capital expenditures, investments in steel-related businesses, pensions and
postemployment health care.
During the first nine months of 1998, cash provided by operating
activities amounted to $186 million. Major uses of cash during the first
nine months of 1998 included capital expenditures of $290 million and
$57 million invested in steel-related businesses. Since December 31, 1997, total
cash, cash equivalents and marketable securities have decreased by $171 million
to $349 million at September 30, 1998.
LTV Steel Company's inventory facility permits borrowings of up to
$250 million for working capital and general corporate purposes, $150 million of
which may be used to issue letters of credit. At September 30, 1998, there were
no outstanding borrowings against the inventory facility; and letters of credit
totaling $68 million were outstanding under this facility.
The Company's receivables credit facility permits borrowings of up to
$320 million for working capital requirements and general corporate purposes,
$100 million of which may be used to issue letters of credit. At September 30,
1998, $294 million was permitted to be borrowed; however, no borrowings were
outstanding and letters of credit outstanding amounted to $36 million under this
facility.
The Company's wholly owned subsidiary, VP Buildings, has a Secured Demand
Facility that expires on December 31, 1998, which permits borrowings of up to
$20 million for working capital and general corporate purposes and for letters
of credit. At September 30, 1998, $20 million was permitted to be borrowed, with
no borrowings outstanding under this facility.
The Company's Senior Notes, long-term debt and credit facilities'
agreements contain various covenants that require the Company to maintain
certain financial ratios and amounts. These agreements, as well as the Company's
agreement with the Pension Benefit Guaranty Corporation (the "PBGC Agreement"),
place certain restrictions on payment of dividends, share repurchases, capital
expenditures, investments in subsidiaries and borrowings. Under the terms of the
most restrictive debt covenant, approximately $108 million of retained earnings
are available for common stock dividend payments at September 30, 1998.
Substantially all of the Company's receivables and inventories are pledged as
collateral under these debt agreements. The Company does not believe that the
restrictions contained in these financial and operating covenants will cause
significant limitations on its financial flexibility.
I-10
<PAGE> 12
Domestic steel producers face significant competition from foreign
producers. Foreign competition is intense and has adversely affected product
prices in the United States and tonnage sold by domestic producers. The
intensity of foreign competition is substantially affected by the relative
strength of foreign economies and fluctuations in the value of the United States
dollar against foreign currencies. In 1998, there has been a significant rise in
imports, especially from Japan, Russia and Brazil. On September 30, 1998, LTV
joined other steel companies and the United Steelworkers of America in filing
flat rolled trade cases against dumped and subsidized imports from Japan, Russia
and Brazil. In August 1998, these countries shipped nearly 783,000 tons of hot
rolled steel to the United States, accounting for 55% of all hot rolled imports.
Compared to August 1997, hot rolled shipments from these countries increased
nearly 200% this year. Unfairly traded imports will have an even greater impact
on the fourth quarter.
LTV also competes with other domestic integrated producers, some of which
have greater resources than the Company, and with minimills, which are
relatively efficient, low-cost producers that generally produce steel from scrap
in electric furnaces, have lower employment and environmental costs and
generally target regional markets. Recently developed thin slab casting
technologies have allowed some minimill producers to enter certain sectors of
the flat rolled market that have traditionally been supplied by integrated
producers; and other producers have announced their intention to do the same.
Industry experts estimate that current domestic raw steel production capacity
will be increased by more than 5% by the end of 2000 as new minimills, now under
construction, engage in start-up operations or begin operation.
Many steel products face substantial competition from manufacturers of
other products, including plastics, aluminum, ceramics, glass, wood and
concrete.
Joint ventures have in the past been one of the Company's primary means
for expanding its operations, and the Company expects to continue to make
investments in joint ventures. Many of the joint venture opportunities that the
Company is pursuing are start-up operations and require significant investments
before becoming operational. The development, construction and start-up of such
operations are themselves subject to numerous risks. After start-up, further
investments may be required and significant losses could be incurred before any
profits are realized.
On February 28, 1998, the Company ceased operations at the Pittsburgh
coke plant and began the closure process. LTV established reserves for the cost
of the closure and clean-up in the third quarter of 1997. Year-to-date spending
charged against the reserve totaled $13 million.
As previously announced on October 20, 1998, LTV and more than 10,000 of
its retirees were granted a summary judgment for the recovery of approximately
$25 million plus statutory interest estimated in excess of $25 million for
taxes collected by the Internal Revenue Service on certain pension payments for
tax years 1987 through 1993. Approximately one-third of the total recovered
amount will be refunded to eligible retirees. The judgment will be reflected in
results of operations when all appeals have been exhausted.
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<PAGE> 13
ENVIRONMENTAL LIABILITIES AND OTHER
LTV is subject to changing and increasingly stringent environmental laws
and regulations concerning air emissions, water discharges and waste disposal,
as well as remediation activities that involve the clean-up of environmental
media such as soils and groundwater ("remediation liabilities"). As a
consequence, the Company has incurred, and will continue to incur, substantial
capital expenditures and operating and maintenance expenses in order to comply
with such requirements. Additionally, if any of the Company's facilities are
unable to meet required environmental standards or laws, those operations could
be temporarily or permanently closed.
The Company spent $15 million during the first nine months of 1998 for
environmental clean-up and related matters at operating and idled facilities,
which included $8 million related to the Pittsburgh coke plant and, at
September 30, 1998, has a recorded liability of $143 million for known and
identifiable environmental and related matters, including costs related to the
closure and demolition of the Pittsburgh coke plant. As the Company becomes
aware of additional matters or obtains more information, it may be required to
record additional liabilities for environmental remediation. The Company also
spent $12 million in the first nine months of 1998 for environmental
compliance-related capital expenditures and expects it will be required to
spend an average of approximately $30 million annually in capital expenditures
during the next five years to meet environmental standards.rr
YEAR 2000 READINESS
Although LTV does not currently manufacture any products containing
embedded chips or any computerized products, LTV (like most companies) has been
faced with the task of addressing the Year 2000. The Year 2000 issue is the
result of computer programs being written using two digits rather than four to
define the applicable year. Any of the Company's computer programs or any
hardware that have date-sensitive software or embedded chips may recognize a
date using "00" as the year 1900 rather than the year 2000. This could result in
a system failure or miscalculations causing disruptions of operations,
including, among other things, production difficulties, a temporary inability to
process transactions, send invoices, or engage in similar normal business
activities. Failure by LTV and/or material third parties, such as power utility
providers and other critical suppliers and major customers to complete Year 2000
readiness activities in a timely manner could have a material adverse effect on
the Company's business and results of operations.
Since the commencement of its Year 2000 readiness effort in late 1996,
LTV has been engaged in a company-wide effort to achieve Year 2000 readiness for
both information technology (IT) and non-information technology (Non-IT)
systems. The Company expects to achieve company-wide Year 2000 readiness by mid
1999. LTV has formed a Steering Committee for Year 2000 issues, which meets
regularly and is comprised of high level executives and other management
personnel and Year 2000 consultants. LTV is primarily using its own employees to
achieve readiness in most of its manufacturing and operations systems, augmented
by outside expertise related to specific systems. LTV has contracted with its
principal Year 2000 outside contractor (the "Outside Contractor") to achieve
Year 2000 readiness with respect to its business and related information
technology infrastructure systems ("Business Systems"). In addition to the
Company's Year 2000 program described above, LTV is continuing to implement a
business reengineering project, which began in 1994 and which
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<PAGE> 14
includes, among other activities, replacing certain information systems with
systems that are Year 2000 ready. As a result, those systems scheduled for
replacement under the business reengineering project have been excluded from the
Year 2000 readiness program and costs which are disclosed below.
LTV's Year 2000 readiness program involves several stages, including
(l) an inventory stage to locate programs and devices that may have date
sensitivities, (2) a risk assessment and prioritization stage to determine the
degree of non-compliance and the potential impact on LTV's business, (3) a
remediation stage for affected systems and devices, (4) a test stage to
determine if the repaired program or device is ready, and (5) an implementation
stage to return the program or device back into operation.
Management believes that the Company has made, and continues to make,
significant progress toward Year 2000 readiness; such progress and the
appropriateness of the Company's approach have both been confirmed by a major
automotive customer and an outside professional firm.
Currently, the Company's systems are at various stages of readiness. The
inventory stage has been completed for manufacturing and operations systems,
which include Non-IT systems such as smart sensors, logic controllers,
distributed control systems and embedded microprocessors. Remediation, testing
and implementation for these systems is approximately 70% complete with the
remainder scheduled to be completed by the end of the first quarter of 1999. The
Outside Contractor has completed its inventory of mission critical Business
Systems and is proceeding with remediation, testing and implementation which is
approximately 80% complete; the remaining systems are expected to be Year 2000
ready by the end of the first quarter of 1999. Activities in the second quarter
of 1999 will include completion of new information systems, outside supplier
compliance audits and completion of the Company's contingency plans.
The Company is in the process of developing a strategy to address the
additional potential consequences that may result from unresolved Year 2000
issues, which will include the development of one or more contingency plans by
mid 1999. LTV has been querying material third parties, including suppliers,
utility and other resource providers and customers to assess their Year 2000
readiness efforts. As of September 30, 1998, positive statements of readiness
have been received from 67% of the Company's suppliers. Efforts are ongoing to
follow up with nonresponsive third parties; however, the Company has assumed
that any such third party will be noncompliant for the purpose of risk
assessment. The Company is implementing a supply chain plan for most sole source
and mission critical suppliers and customers. This plan includes telephone
interviews and on-site visits.
The Company has budgeted approximately $55 million for its Year 2000
readiness efforts, with $8 million designated for remediation of manufacturing
and operation systems and $47 million allocated for Business Systems. These
costs include replacing outdated, non-compliant hardware and software as well as
identifying and remediating known Year 2000 problems. LTV expensed $8 million of
Year 2000 costs in 1997, and $29 million has been expensed through the end of
the third quarter of 1998. The funds expensed for Year 2000 are outside of the
normal information technology budget. Because LTV's readiness program is not yet
fully implemented, and is subject to certain risks and uncertainties, including
the readiness efforts of material third parties, there can be no assurance that
LTV will not incur material costs beyond the anticipated costs described above.
The cost of the Year 2000 project and the dates by which LTV believes it
will be Year 2000 ready are based on management's current best estimates, which
were derived based on numerous assumptions of future events, including the
continued availability of certain resources, third party modification plans and
other factors. There can be no guarantee, however, that these estimates will be
achieved, and actual results could differ materially from those anticipated.
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<PAGE> 15
OUTLOOK
Demand for flat rolled steel products in the Company's markets remains
steady. However, increased unfairly traded imports have weakened the Company's
order entry and shipping rates and have caused a reduction in selling prices in
recent months. LTV has recently announced a cutback in pellet production at LTV
Steel Mining. The Company has reduced its planned steelmake at its Cleveland and
Indiana Harbor Works between now and year end by approximately 375,000 tons.
Also, the Trico Steel venture is currently operating on a reduced work schedule
as a result of lower order entry rates. Consequently, the Company expects
operating losses in its integrated steel business and at its Trico Steel joint
venture in the fourth quarter.
This report includes forward-looking statements. Our use of the words
"outlook," "anticipates," "believes," "estimates," "expect" and similar words
are intended to identify these statements as forward-looking. These statements
represent our current judgment on what the future holds. While we believe them
to be reasonable, a number of important factors could cause actual results to
differ materially from those projected. These factors include relatively small
changes in market price or market demand; changes in domestic capacity or the
level of importing resulting from currency fluctuations and other economic
factors; devaluation or other economic conditions; changes in raw material
costs; increased operating costs; loss of business from major customers,
especially for high value-added product; unanticipated expenses; substantial
changes in financial markets; labor unrest; unfair foreign competition; major
equipment failure; unanticipated results in pending legal proceedings; or
difficulties by the Company or its critical suppliers and customers in
implementing information technology, including Year 2000 ready systems. In this
regard, we also direct your attention to factors discussed above in the
Management's Discussion and Analysis.
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<PAGE> 16
PART II
ITEM 1. LEGAL PROCEEDINGS.
On July 8, 1998, the Ohio Attorney General filed a complaint in the
Cuyahoga County Court of Common Pleas alleging various instances of
noncompliance with LTV Steel's NPDES permit at its Cleveland Works over an
approximate five year period. Concurrent with this filing, LTV Steel filed a
consent agreement with such court resolving the allegations in the complaint.
The agreement requires a payment of $419,000 in civil penalties and the
implementation of a number of water pollution control studies at the plant. LTV
Steel may or may not be required to install modifications to its water pollution
control facilities depending upon the results of these studies.
On September 30, 1998, LTV Steel, together with eleven other domestic steel
producers and the United Steelworkers of America, filed antidumping and/or
countervailing duty petitions against Japan, Russia and Brazil alleging injury
resulting from subsidies and dumping in the importation of hot-rolled carbon
steel products. On October 15, 1998, the U.S. Department of Commerce announced
the initiation of investigations relating to these petitions.
On October 19, 1998, the U.S. Court of Federal Claims granted LTV Steel
summary judgment in the Federal Insurance Contribution Act (FICA) and Federal
Unemployment Tax Act (FUTA) tax reimbursement case described in the Company's
Report on 10-K for the year ended December 31, 1997. The judgment, which is
subject to an appeal by the government, provides for the recovery of
approximately $25 million, plus statutory interest estimated in excess of $25
million, of taxes collected by the U.S. Internal Revenue Service on certain
pension payments for the tax years 1987 through 1993. Approximately one-third of
the total amount recovered by LTV will be refunded to eligible retirees.
ITEM 5. OTHER INFORMATION
BY-LAW AMENDMENTS:
ADVANCE STOCKHOLDER NOTICE REQUIREMENTS AND OTHER PROVISIONS
LTV has provisions in its By-Laws intended to promote the efficient
functioning of its annual meetings. The provisions describe LTV's right to
determine the time, place and conduct of stockholder meetings, require advance
notice by mail or delivery to LTV of stockholder proposals or director
nominations for annual meetings and require persons wishing to conduct a
solicitation of written consents of stockholders or to call a special meeting of
stockholders to apply to the Board of Directors to set a record date for the
consent solicitation or to determine whether the requisite number of
stockholders desire to call a special meeting.
Under the By-Laws, stockholders must provide LTV with at least 60 days, but
no more than 90 days, notice prior to the announced Tentative Meeting Date of
(i) business the stockholder is proposing for consideration at that meeting and
(ii) persons the stockholder intends to nominate for election as directors at
that meeting.
The LTV Board of Directors has selected April 23, 1999 as the Tentative
Meeting Date for the next Annual Meeting of Stockholders. Accordingly,
stockholders who intend to propose business for
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<PAGE> 17
consideration, or to nominate persons for election as directors at the 1999
Annual Meeting, must provide notice and the required information to the Company
no earlier than January 23, 1999 and no later than February 22, 1999.
REQUIRED APPROVAL FOR CERTAIN PURCHASES OF
COMMON STOCK
For the purpose of preserving LTV's ability to utilize certain favorable
tax attributes, Article Ninth of LTV's Restated Certificate of Incorporation
prohibits, with certain limited exceptions, any unapproved acquisition of Common
Stock that would cause the ownership interest percentage of the acquirer or any
other person to increase to 4.5% or above. A person's ownership interest
percentage for purposes of Article Ninth is determined by reference to specified
federal income tax principles, including attribution of shares from certain
related parties, deemed exercise of rights to acquire stock and aggregation of
shares purchased by persons acting in concert. PURCHASES OF COMMON STOCK FROM
ANY PERSON OTHER THAN THE COMPANY ARE SUBJECT TO THE LIMITATIONS IMPOSED BY
ARTICLE NINTH, AND ANY UNAPPROVED PURCHASE IN EXCESS OF THE AMOUNTS PERMITTED BY
ARTICLE NINTH WILL BE VOID AB INITIO. A PROSPECTIVE PURCHASER OF COMMON STOCK
WHO BELIEVES THAT IT MAY BE SUBJECT TO THE LIMITATIONS IMPOSED BY ARTICLE NINTH
SHOULD CONSULT WITH THEIR ADVISORS OR LTV IN ADVANCE OF ACQUIRING SUCH
SECURITIES TO DETERMINE IF ADVANCE APPROVAL MUST BE OBTAINED FROM LTV'S BOARD OF
DIRECTORS.
LTV's Board of Directors was required by Article Ninth of LTV's Restated
Certificate of Incorporation to consider during 1996 whether to waive the
transfer restrictions in Article Ninth with respect to all future transfers of
securities. At its October 1996 meeting, the Board of Directors, after
considering all relevant factors, determined not to waive Article Ninth at that
time.
ITEM 6. EXHIBITS AND REPORTS ON 8-K
(a) Exhibits
Certain of the exhibits to this Report are hereby incorporated by
reference, as specified below, to other documents filed with the Commission by
LTV. Exhibit designations below correspond to the numbers assigned to exhibit
classifications in Regulation S-K.
(2)-(1) - The LTV Second Modified Joint Plan of
Reorganization (incorporated herein by reference to
Exhibit (28)(a)-(3) to LTV's Annual Report on Form
10-K for the Fiscal Year ended December 31, 1992,
filed with the Commission (File No. 1-4368) on March
31, 1993)
(2)-(2) - Confirmation Order of the United States Bankruptcy
Court for the Southern District of New York entered
on May 27, 1993, confirming the LTV Second Modified
Joint Plan of Reorganization (which includes, as
Exhibit C to the Confirmation Order, amendments to
the LTV Second Modified Joint Plan of
Reorganization) (incorporated herein by reference to
Exhibit 2(2) to LTV's Current Report on Form 8-K,
filed with the Commission (File No. 1-4368) on June
7, 1993)
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<PAGE> 18
(3)-(1) - Restated Certificate of Incorporation of LTV dated
June 28, 1993 (incorporated herein by reference to
Exhibit 3.1 to LTV's Registration Statement on Form
S-1 [Registration No. 33-50217])
(3)-(2) - Certificate of Designations for Series B Preferred
Stock (incorporated herein by reference to Exhibit 4
to SMI America, Inc.'s 13D Filing)
(3)-(3) - LTV's Restated By-Laws adopted on September 1,
1998 (filed herewith)
(10)-(1) - LTV Executive Benefit Plan as amended and restated
effective January 1, 1985 (incorporated herein by
reference to Exhibit (10)(c)-(2) to LTV's Report on
Form 10-K for the year ended December 31, 1985)
(10)-(2) - Amendment to LTV Executive Benefit Plan adopted
November 20, 1987 (incorporated herein by reference
to Exhibit (10)(c)-(3) to LTV's Report on Form 10-K
for the year ended December 31, 1987)
(10)-(3) - LTV Excess Benefit Plan dated as of January 1,
1985 (incorporated herein by reference to Exhibit
(10)(c)-(5) to LTV's Report on Form 10-K for the
year ended December 31, 1984)
(10)-(4) - Settlement Agreement dated as of June 28, 1993
between LTV, the PBGC, the Initial LTV Group (as
defined in the Settlement Agreement) and LTV, as
Administrator of the Restored Plans (incorporated
herein by reference to Exhibit 10.10 to LTV's Report
on Form 10-Q for the quarter ended June 30, 1993)
(10)-(5) - Assignment, Pledge and Security Agreement dated as
of June 28, 1993 between LTV Steel Company, Inc. and
the PBGC (incorporated herein by reference to
Exhibit 10.11 to LTV's Report on Form 10-Q for the
quarter ended June 30, 1993)
(10)-(6) - Securities Purchase Agreement dated as of May 26,
1993 by and among LTV, LTV Steel Company, Inc. and
SMI America, Inc. (incorporated herein by reference
to Exhibit 2 to SMI America, Inc.'s 13D Filing)
(10)-(7) - Common Stock Registration Rights Agreement dated
as of June 28, 1993 by and between LTV and SMI
America, Inc. (incorporated herein by reference to
Exhibit 5 to SMI America, Inc.'s 13D Filing)
(10)-(8) - Consultation and Management Participation
Agreement dated as of June 28, 1993 between LTV and
Sumitomo Metal Industries, Ltd. (incorporated herein
by reference to Exhibit 6 to SMI America, Inc.'s 13D
Filing)
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<PAGE> 19
(10)-(9) - L-S Exchange Right and Security Agreement dated
as of June 28, 1993 by and among LTV/EGL Holding
Company, Sumikin EGL Corp., LTV, SMI America Inc.,
and Sumitomo Metal USA Corporation (incorporated
herein by reference to Exhibit 7 to SMI America,
Inc.'s 13D Filing)
(10)-(10) - Amendments Nos. 1 and 2 to the Securities
Purchase Agreement dated as of May 26, 1993 among
LTV, LTV Steel Company, Inc. and SMI America, Inc.
(incorporated herein by reference to Exhibit
(10)-(20) to LTV's Report on Form 10-Q for the
quarter ended September 30, 1994)
(10)-(11) - Amendments Nos. 1 through 4 to the Settlement
Agreement dated as of June 28, 1993 by and among
the PBGC, LTV, the Initial LTV Group (as defined
in the Settlement Agreement) and LTV, as
Administrator of the Restored Plans (incorporated
herein by reference to Exhibit (10)-(21) to LTV's
Report on Form 10-Q for the quarter ended
September 30, 1994)
(10)-(12) - Revolving Credit Agreement dated as of October
12, 1994 among LTV Sales Finance Company, the
financial institutions parties thereto as banks,
the issuing banks, the facility agent and
collateral agent (incorporated herein by reference
to Exhibit (10)-(22) to LTV's Report on Form 10-Q
for the quarter ended September 30, 1994)
(10)-(13) - Receivables Purchase and Sale Agreement dated as
of October 12, 1994 among LTV, LTV Steel Company,
Inc., Continental Emsco Company, LTV Steel Tubular
Products Company, Georgia Tubing Corporation and
LTV Sales Finance Company (incorporated herein by
reference to Exhibit (10)-(23) to LTV's Report on
Form 10-Q for the quarter ended September 30,
1994)
(10)-(14) - Accession Agreement dated as of October 12, 1994
among LTV Sales Finance Company, the financial
institutions listed on the signature pages
thereof, the issuing bank named thereon, and
Bankers Trust Company as facility agent and
collateral agent (incorporated herein by reference
to Exhibit (10)-(24) to LTV's Report on Form 10-Q
for the quarter ended September 30, 1994)
(10)-(15) - Trust Termination Acknowledgment and Agreement,
dated October 12, 1994, between LTV Sales Finance
Company and Wilmington Trust Company (incorporated
herein by reference to Exhibit (10)-(25) to LTV's
Report on Form 10-Q for the quarter ended
September 30, 1994)
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<PAGE> 20
(10)-(16) - Assignment and Transfer Agreement, dated as of
October 12, 1994, by and between LTV Master
Receivables Trust and LTV Sales Finance Company
(incorporated herein by reference to Exhibit
(10)-(26) to LTV's Report on Form 10-Q for the
quarter ended September 30, 1994)
(10)-(17) - Collateral Trust Agreement dated as of May 25,
1993 among LTV, LTV Steel Company, Inc., United
Steelworkers of America and Bank One Ohio Trust
Company, NA, as Collateral Trustee (incorporated
herein by reference to Exhibit 10.33 to LTV's
Report on Form 10-Q for the quarter ended June 30,
1993)
(10)-(18) - Open-End Mortgage, Security Agreement and
Fixture Filing dated as of June 28, 1993 by LTV
Steel Company, Inc. to Bank One Ohio Trust
Company, N.A. (incorporated herein by reference to
Exhibit 10.34 to LTV's Report on Form 10-Q for the
quarter ended June 30, 1993)
(10)-(19) - License Agreement dated as of June 28, 1993
between LTV Steel Company, Inc. and Bank One Ohio
Trust Company, N.A. (incorporated herein by
reference to Exhibit 10.35 to LTV's Report on Form
10-Q for the quarter ended June 30, 1993)
(10)-(20) - Settlement Agreement and Stipulated Order on
behalf of the United States of America on behalf
of the United States Environmental Protection
Agency approved by the United States Bankruptcy
Court Southern District of New York (the "Court")
on April 15, 1993 and supplemented by Exhibit
10.38 below (incorporated herein by reference to
Exhibit 10.38 to LTV's Report on Form 10-Q for the
quarter ended June 30, 1993)
(10)-(21) - Second Settlement Agreement and Stipulated Order
supplementing 10.36 above and approved by the
Court on May 19, 1993 (incorporated by reference
to Exhibit 10.39 to LTV's Registration Statement
on Form S-1 [Registration No. 33-50217])
(10)-(22) - Settlement Agreement and Stipulated Order on
behalf of the State of Minnesota approved by the
Court on May 19, 1993 (incorporated herein by
reference to Exhibit 10.39 to LTV's Report on Form
10-Q for the quarter ended June 30, 1993)
(10)-(23) - Settlement Agreement and Stipulated Order on
behalf of the State of Indiana on behalf of the
Indiana Department of Environmental Management
approved by the Court on May 24, 1993
(incorporated herein by reference to Exhibit 10.40
to LTV's Report on Form 10-Q for the quarter ended
June 30, 1993)
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<PAGE> 21
(10)-(24) - Settlement Agreement and Stipulated Order on
behalf of the State of New York and approved by
the Court on May 24, 1993 (incorporated herein by
reference to Exhibit 10.42 to LTV's Report on Form
10-Q for the quarter ended June 30, 1993)
(10)-(25) - Settlement Agreement and Stipulated Order on
behalf of the State of Connecticut and approved by
the Court on May 19, 1993 (incorporated herein by
reference to Exhibit 10.43 to LTV's Report on Form
10-Q for the quarter ended June 30, 1993)
(10)-(26) - Settlement Agreement and Stipulated Order on
behalf of the Commonwealth of Pennsylvania and
approved by the Court on May 24, 1993
(incorporated herein by reference to Exhibit 10.44
to LTV's Report on Form 10-Q for the quarter ended
June 30, 1993)
(10)-(27) - Settlement Agreement and Stipulated Order on
behalf of the State of Ohio on behalf of the Ohio
Environmental Protection Agency and approved by
the Court on May 24, 1993 (incorporated herein by
reference to Exhibit 10.45 to LTV's Report on Form
10-Q for the quarter ended June 30, 1993)
(10)-(28) - Settlement Agreement and Stipulated Order on
behalf of the State of Georgia and approved by the
Court on May 24, 1993 (incorporated herein by
reference to Exhibit 10.46 to LTV's Report on Form
10-Q for the quarter ended June 30, 1993)
(10)-(29) - Closing Agreement Between LTV, its subsidiaries
and the Commissioner of Internal Revenue as filed
with the United States Bankruptcy Court for the
Southern District of New York on May 14, 1993
(incorporated herein by reference to Exhibit 10.47
to LTV's Report on Form 10-Q for the quarter ended
June 30, 1993)
(10)-(30) - The LTV Corporation Non-Employee Directors Stock
Option Plan adopted on October 22, 1993
(incorporated herein by reference to Exhibit 10.49
to Amendment No. 2 to LTV's Registration Statement
on Form S-1 [Registration No. 33-50217])
(10)-(31) - Amendment to LTV Executive Benefit Plan adopted
October 22, 1993 (incorporated herein by reference
to Exhibit 10.50 to Amendment No. 2 to LTV's
Registration Statement on Form S-1 [Registration
No. 33-50217])
(10)-(32) - LTV Executive Benefit Trust Agreement approved
on October 22, 1993 (incorporated herein by
reference to Exhibit 10.51 to Amendment No. 2 to
LTV's Registration Statement on Form S-1
[Registration No. 33-50217])
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<PAGE> 22
(10)-(33) - The LTV Corporation Supplemental Management
Retirement Plan adopted on October 22, 1993
(incorporated herein by reference to Exhibit 10.52
to Amendment No. 2 to LTV's Registration Statement
on Form S-1 [Registration No. 33-50217])
(10)-(34) - The LTV Corporation Supplemental Management
Retirement Trust Agreement approved on October 22,
1993 (incorporated herein by reference to Exhibit
10.53 to Amendment No. 2 to LTV's Registration
Statement on Form S-1 [Registration No. 33-50217])
(10)-(35) - The LTV Corporation Management Incentive Program
as amended on January 28, 1994 (incorporated by
reference to Exhibit (10)-(53) to LTV's Report on
Form 10-K for the year ended December 31, 1993)
(10)-(36) - Amendment to The LTV Corporation Supplemental
Management Retirement Plan adopted on January 28,
1994 (incorporated by reference to Exhibit
(10)-(54) to LTV's Report on Form 10-K for the
year ended December 31, 1993)
(10)-(37) - Amendment to LTV Executive Benefit Plan adopted
October 28, 1994 (incorporated herein by reference
to Exhibit (10)-(48) to LTV's Report on Form 10-Q
for the quarter ended September 30, 1994)
(10)-(38) - Amendment to The LTV Corporation Management
Incentive Program adopted October 28, 1994
(incorporated herein by reference to Exhibit
(10)-(49) to LTV's Report on Form 10-Q for the
quarter ended September 30, 1994)
(10)-(39) - Amendment to The LTV Corporation Supplemental
Management Retirement Plan adopted on October 28,
1994 (incorporated herein by reference to Exhibit
(10)-(51) to LTV's Report on Form 10-Q for the
quarter ended September 30, 1994)
(10)-(40) - Amendment No. 5 to the Settlement Agreement
dated as of June 28, 1993 by and among the PBGC,
LTV, the Initial LTV Group and LTV, as
Administrator of the Restored Plans (incorporated
herein by reference to Exhibit (10)-(55) to LTV's
Report on Form 10-K for the year ended December
31, 1994)
(10)-(41) - The Hourly Employee Stock Payment Alternative
Plan (incorporated herein by reference to Exhibit
4.3 to LTV's Registration Statement on Form S-8
[Registration No. 33-56861])
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<PAGE> 23
(10)-(42) - Amendment No. 1 to the Receivables Purchase and
Sale Agreement dated as of October 12, 1994 among
LTV, LTV Steel Company, Inc., Continental Emsco
Company, LTV Steel Tubular Products Company,
Georgia Tubing Corporation and LTV Sales Finance
Company (incorporated herein by reference to
Exhibit (10)-(57) to LTV's Report on Form 10-Q for
the quarter ended September 30, 1995)
(10)-(43) - Amendments Nos. 6 and 7 to the Settlement
Agreement dated as of June 28, 1993 by and among
the PBGC, LTV, the Initial LTV Group (as defined
in the Settlement Agreement) and LTV, as
Administrator of the Restored Plans (incorporated
herein by reference to Exhibit (10)-(58) to LTV's
Report on Form 10-Q for the quarter ended
September 30, 1995)
(10)-(44) - Amendment No. 8 to the Settlement Agreement
dated as of June 28, 1993 by and among the PBGC,
LTV, the Initial LTV Group (as defined in the
Settlement Agreement) and LTV as Administrator of
the Restated Plans (incorporated herein by
reference to Exhibit (10)-(59) to LTV's Report on
Form 10-K for the year ended December 31, 1995)
(10)-(45) - The LTV Corporation Amended and Restated
Non-Employee Directors' Equity Compensation Plan
adopted on November 22, 1996 (incorporated herein
by reference to Exhibit (10)-(58) to LTV's Report
on Form 10-K for the year ended December 31, 1996)
(10)-(46) - The LTV Corporation Amended and Restated
Non-Employee Directors' Deferred Compensation Plan
adopted on November 22, 1996 (incorporated herein
by reference to Exhibit (10)-(59) to LTV's Report
on Form 10-K for the year ended December 31, 1996)
(10)-(47) - The LTV Corporation Amended and Restated
Executive Deferred Compensation Plan adopted on
October 25, 1996 (incorporated herein by reference
to Exhibit (10)-(60) to LTV's Report on Form 10-K
for the year ended December 31, 1996)
(10)-(48) - Amendment No. 9 to the Settlement Agreement
dated as of June 28, 1993 by and among the PBGC,
LTV, the Initial LTV Group (as defined in the
Settlement Agreement) and LTV as Administrator of
the Restated Plans (incorporated herein by
reference to Exhibit (10)-(61) to LTV's Report on
Form 10-K for the year ended December 31, 1996)
(10)-(49) - Indenture between LTV and The Chase Manhattan
Bank, as Trustee, (incorporated by reference to
Exhibit 4.1 to LTV's Registration Statement on
Form S-4 [Registration No. 333-40425])
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<PAGE> 24
(10)-(50) - Amendment No. 10 to the Settlement Agreement
dated as of June 28, 1993 by and among the PBGC,
LTV, the Initial LTV Group (as defined in the
Settlement Agreement) and LTV as Administrator of
the Restated Plans (incorporated herein by
reference to Exhibit (10)-(62) to LTV's Report on
Form 10-Q for the quarter ended March 31, 1997)
(10)-(51) - The LTV Change in Control and Severance Pay Plan
I (filed as Exhibit 10.1 to Amendment No. 1 to
LTV's Registration Statement on Form S-4
[Registration No. 333-40425])
(10)-(52) - Note Purchase and Letter of Credit Agreement
dated as of February 26, 1998 among LTV Steel
Company, Inc., various financial institutions (as
defined therein), Chase Securities, Inc., as
placement agent, The Chase Manhattan Bank, as
administrative agent and The Chase Manhattan Bank,
as collateral agent (incorporated by reference to
Exhibit (10)-(52) to LTV's Report on Form 10-Q for
the quarter ended June 30, 1998)
(10)-(53) - Guaranty made as of February 26, 1998 by LTV
Steel Products, LLC given in connection with the
Note Purchase and Letter of Credit Agreement dated
as of February 26, 1998 among LTV Steel Company,
Inc., various financial institutions (as defined
therein), Chase Securities, Inc., as placement
agent, The Chase Manhattan Bank, as administrative
agent and The Chase Manhattan Bank, as collateral
agent (incorporated by reference to Exhibit
(10)-(53) to LTV's Report on Form 10-Q for the
quarter ended June 30, 1998)
(10)-(54) - Contribution and Sale Agreement dated as of
February 26, 1998 among LTV Steel Products, LLC,
as purchaser, LTV Steel Company, Inc., as
servicer, and LTV Steel Company, Inc. and Georgia
Tubing Corporation, as initial sellers
(incorporated by reference to Exhibit (10)-(54) to
LTV's Report on Form 10-Q for the quarter ended
June 30, 1998)
(10)-(55) - Inventory Processing and Servicing Agreement
dated as of February 26, 1998 by and among LTV
Steel Products, LLC, LTV Steel Company, Inc., as
processor and servicer, and The Chase Manhattan
Bank, as collateral agent (incorporated by
reference to Exhibit (10)-(55) to LTV's Report on
Form 10-Q for the quarter ended June 30, 1998)
(10)-(56) - Trust Agreement dated as of February 26, 1998
among LTV Steel Products, LLC, as issuer, and The
Chase Manhattan Bank as collateral agent
(incorporated by reference to Exhibit (10)-(56) to
LTV's Report on Form 10-Q for the quarter ended
June 30, 1998)
II-9
<PAGE> 25
(10)-(57) - Amendment No. 2 dated as of March 1, 1998 to the
Receivables Purchase and Sale Agreement dated as
of October 12, 1994 among LTV, LTV Steel Company,
Inc., Continental Emsco Company, LTV Steel Tubular
Products Company, Georgia Tubing Corporation and
LTV Sales Finance Company and Amendment No. 1 to
Revolving Credit Agreement dated as of October 12,
1994 among LTV Sales Finance Company, the
financial institutions parties thereto as banks,
the issuing banks, the facility agent and
collateral agent, both dated as of March 1, 1998
(incorporated by reference to Exhibit (10)-(57) to
LTV's Report on Form 10-Q for the quarter ended
June 30, 1998)
(10)-(58) - Amendment No. 11 to the Settlement Agreement
dated as of June 28, 1993 by and among the PBGC,
LTV, the Initial LTV Group (as defined in the
Settlement Agreement) and LTV as Administrator of
the Restated Plans (incorporated by reference to
Exhibit (10)-(58) to LTV's Report on Form 10-Q for
the quarter ended June 30, 1998)
(11) - Statement re Computation of Per Share Earnings
(filed herewith)
(27) - Financial Data Schedule (filed herewith)
(b) Reports on Form 8-K
No report on Form 8-K was filed by the registrant for the
relevant period.
II-10
<PAGE> 26
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the
registrant has duly caused this report to be signed on its behalf by the
undersigned thereunto duly authorized.
THE LTV CORPORATION
--------------------------
(Registrant)
By /s/ Arthur W. Huge
--------------------------
Arthur W. Huge
Executive Vice President
Chief Financial Officer
(Principal Financial and
Accounting Officer)
Date: October 26, 1998
--------------------------
II-11
<PAGE> 1
Exhibit 3.3
AS AMENDED AND RESTATED
SEPTEMBER 1, 1998
THE LTV CORPORATION
BY-LAWS
ARTICLE I
OFFICES
SECTION 1. The principal office shall be in the City of Wilmington,
County of New Castle, State of Delaware.
SECTION 2. The corporation may also have offices at such other places
both within and without the State of Delaware as the Board of Directors may from
time to time determine or the business of the corporation may require.
ARTICLE II
MEETINGS OF STOCKHOLDERS
SECTION 1. All meetings of stockholders shall be held at such place,
either within or without the State of Delaware, on such date and at such time as
may be determined from time to time by the Board of Directors (or the Chairman
in the absence of a determination by the Board of Directors). The Chairman and
the chairman of the meeting shall have the power and authority to determine and
maintain the rules, regulations and procedures for the proper conduct of all
meetings of stockholders, including, but not limited to, maintaining order,
restricting entry to meetings after they have commenced, the length of such
meetings, the order of business, the order and duration of statements from the
floor, opening and closing the polls and dismissing business not properly
brought before the meeting.
SECTION 2. Annual meetings of stockholders shall be held on such day
and at such time as may be fixed by the Board of Directors, at which they shall
elect by a plurality vote a class of directors and transact such other business
as may properly be brought before the meeting.
SECTION 3. Written notice of the annual meeting shall be given to each
stockholder entitled to vote thereat not less than ten nor more than sixty days
before the date of the meeting. For the purposes of Sections 11 and 12 of this
Article, the Board of Directors, the chairman of the Board of Directors or the
Secretary of the corporation may choose a tentative date (the "Tentative Meeting
Date") for any stockholder meeting which date may be set forth in the
corporation's proxy materials for the annual meeting next preceding such
Tentative Meeting Date or a filing with the Securities and Exchange Commission
on Form 10-K, 10-Q or 8-K or may be published by any other means. Notice of a
Tentative Meeting Date does not serve as notice of a stockholder meeting.
SECTION 4. A complete list of the stockholders entitled to vote at any
election of directors, arranged in alphabetical order and showing the address of
each stockholder and the number of voting shares held by each, shall be prepared
by the office in charge of the stock ledger and shall be filed at a
<PAGE> 2
place within the city where the election is to be held (which place, if other
than the meeting place, shall be specified in the notice of the meeting) at
least ten days before such election, and shall at all times prior to the
election during the usual hours for business, and during the whole time of said
election, be open to examination and inspection of any stockholder.
SECTION 5. Special meetings of the stockholders, for any purpose or
purposes, unless otherwise prescribed by statute or by the Certificate of
Incorporation, may be called by the Chairman of the Board or by the President
and shall be called by the President or Secretary at the request in writing of a
majority of the Board of Directors, or at the request in writing of stockholders
holding not less than 25 percent of the outstanding Common Stock. Such request
shall state the purpose or purposes of the proposed meeting.
SECTION 6. Whenever stockholders are required or permitted to take any
action at a meeting, a written notice of the meeting shall be given which shall
state the place, date and hour of the meeting, and, in the case of a special
meeting, the purpose or purposes for which the meeting is called. Unless
otherwise provided by law as the same exists or may hereafter be amended, such
notice shall be given not less than ten nor more than sixty days before the date
of the meeting to each stockholder of record entitled to vote at such meeting.
Unless these By-Laws otherwise require, when a meeting is adjourned to another
time or place (whether or not a quorum is present), notice need not be given of
the adjourned meeting at which the adjournment is taken. At the adjourned
meeting, the corporation may transact any business which might have been
transacted at the original meeting. If the adjournment is for more than thirty
days, or after the adjournment a new record date is fixed for the adjourned
meeting, a notice of the adjourned meeting shall be given to each stockholder of
record entitled to vote at the meeting.
A written waiver of any such notice signed by the person entitled
thereto, whether before or after the time stated therein, shall be deemed
equivalent to notice. Attendance for a person at a meeting shall constitute a
waiver of notice of such meeting, except when the person attends the meeting for
the express purpose of objecting, at the beginning of the meeting, to the
transaction of any business because the meeting is not lawfully called or
convened. Business transacted at any special meeting of stockholders shall be
limited to the purposes stated in the notice.
SECTION 7. The holders of a majority of the votes attributed to the
stock issued and outstanding and entitled to be voted thereat, present in person
or represented by proxy, shall constitute a quorum at all meetings of the
stockholders for the transaction of business except as otherwise provided by
statute or by the Certificate of Incorporation. If however, such quorum shall
not be present or represented at any meeting of the stockholders, the
stockholders entitled to vote thereat, present in person or represented by
proxy, shall have power to adjourn the meeting from time to time, in accordance
with Section 6 hereof, until a quorum shall be present or represented.
SECTION 8. When a quorum is present at any meeting the vote of the
holders of a majority of the votes attributed to the stock having voting power
present in person or represented by proxy shall decide any question brought
before such meeting unless the question is one upon which by express provision
of the statutes or of the Certificate of Incorporation a different vote is
required in which case such express provision shall govern and control the
decision of such question.
SECTION 9. In all elections of directors, each stockholder shall have
the right to vote the number of votes attributed to the shares of the capital
stock having voting power held by such stockholder, in person or by proxy, for
as many persons as there are directors to be elected; in deciding
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<PAGE> 3
all other questions at the meetings of stockholders, each stockholder shall be
entitled to one vote per share, unless the constituent instrument establishing
the class of capital stock held provides a different vote or votes for each
share of such class in which event each stockholder holding shares of such class
shall be entitled to such vote or votes, in person or by proxy, for each share
of the capital stock having voting power held by such stockholder, but no proxy
shall be voted on after three years from its date, unless the proxy provides for
a longer period.
SECTION 10. Any action required to be taken at any annual or special
meeting of stockholders, or any action which may be taken at any annual or
special meeting of stockholders, may be taken without a meeting, without prior
notice and without a vote, by consent or consents in accordance with Delaware
law. In the event of the delivery, in the manner provided by Section 5 of
Article VI, to the corporation of the requisite written consent or consents to
take corporate action and/or any related revocation or revocations, the
corporation shall engage independent inspectors of elections for the purpose of
promptly performing a ministerial review of the validity of the consents and
revocations. For the purpose of permitting the inspectors to perform such
review, no action by written consent without a meeting shall be effective until
such date as the independent inspectors certify to the corporation that the
consents delivered to the corporation, in the manner provided by Section 5 of
Article VI, represent at least the minimum number of votes that would be
necessary to take the corporate action. Nothing contained in this paragraph
shall in any way be construed to suggest or imply that the Board of Directors or
any stockholder shall not be entitled to contest the validity of any consent or
revocation thereof, whether before or after such certification by the
independent inspectors, or to take any other action (including, without
limitation, the commencement, prosecution or defense of any litigation with
respect thereto, and the seeking of injunctive relief in such litigation).
Every written consent shall bear the date of signature of each
stockholder who signs the consent and no written consent shall be effective to
take the corporate action referred to therein unless, within sixty (60) days of
the earliest dated written consent received in accordance with Section 5 of
Article VI, a written consent or consents signed by a sufficient number of
holders to take such action are delivered to the corporation in the manner
prescribed in Section 5 of Article VI.
SECTION 11. NOMINATION OF DIRECTORS. Only persons who are nominated in
accordance with the procedures set forth in these By-Laws shall be eligible to
serve as directors. Nominations of persons for election to the Board of
Directors of the corporation may be made at a meeting of stockholders (a) by or
at the direction of the Board of Directors or (b) by any stockholder of the
corporation who is a stockholder of record at the time of giving of notice
provided for in this Section 11, who shall be entitled to vote for the election
of directors at the meeting and who complies with the notice procedures set
forth in this Section 11. Such nominations, other than those made by or at the
direction of the Board of Directors, shall be made pursuant to timely notice in
writing to the Secretary of the corporation.
If a Tentative Meeting Date has been announced and the meeting date
(disregarding any adjournments thereof) is not more than thirty days prior to
and not more than thirty days after the Tentative Meeting Date, to be timely, a
stockholder's notice shall be delivered to or mailed and received at the
principal executive offices of the corporation not less than sixty days nor more
than ninety days prior to the Tentative Meeting Date; provided, however, that if
less than seventy days' prior public disclosure of the Tentative Meeting Date is
given or made, notice by the stockholder to be timely must be so received not
later than the close of business on the tenth day following the day on which
public disclosure of the Tentative Meeting Date was made. Otherwise, to be
timely, a stockholder's notice shall be delivered to or mailed and received at
the principal executive offices of the corporation not less than
3
<PAGE> 4
sixty days nor more than ninety days prior to the meeting date; provided,
however, that if less than seventy days' notice or prior public disclosure of
the meeting date is given or made to stockholders, notice by the stockholder to
be timely must be so received not later than the close of business on the tenth
day following the day on which such notice of the meeting date or such public
disclosure was made.
Such stockholder's notice shall set forth (a) as to each person whom
the stockholder proposes to nominate for election or reelection as a director
all information relating to such person that is required to be disclosed in
solicitations of proxies for election of directors, or is otherwise required, in
each case pursuant to the Regulation 14A under the Securities Exchange Act of
1934, as amended (the "Exchange Act") (including such person's written consent
to being named in the proxy statement as a nominee and to serving as a director
if elected); and (b) as to the stockholder giving the notice (i) the name and
address, as they appear on the corporation's books, of such stockholder, (ii)
the class and number of shares of the corporation which are beneficially owned
(as defined by Rule 13d-3 under the Exchange Act) by such stockholder and, if
such shares are beneficially owned by any person(s) other than the stockholder
of record, the name(s) and address(es) of each such beneficial owner of such
shares and (iii) a description of all arrangements or understandings between the
stockholder or any such beneficial owner and each nominee and any other person
or persons (naming such person or persons) pursuant to which the nomination or
nominations are to be made by the stockholder. At the request of the Board of
Directors, any person nominated by the Board of Directors for election as a
director shall furnish to the Secretary of the corporation that information
required to be set forth in a stockholder's notice of nomination which pertains
to the nominee. In addition, the stockholder making such nomination shall
promptly provide any other information reasonably requested by the corporation.
No person shall be eligible to serve as a director of the corporation
unless nominated in accordance with the procedures set forth in this Section 11.
The chairman of the meeting shall, if the facts warrant, determine and declare
to the meeting that a nomination was not made in accordance with the procedures
prescribed by the By-Laws, and if he should so determine, he shall so declare to
the meeting and the defective nomination shall be disregarded. Notwithstanding
the foregoing provisions of this Section 11, a stockholder shall also comply
with all applicable requirements of the Exchange Act, and the rules and
regulations thereunder with respect to the matters set forth in this Section 11.
Nothing contained herein shall be deemed to create any obligation on
the part of the corporation to include any stockholder nomination in the
corporation's proxy statement.
SECTION 12. NOTICE OF BUSINESS. At any annual meeting of the
stockholders, only such business shall be conducted as shall have been brought
before the meeting (a) by or at the direction of the Board of Directors or (b)
by any stockholder of the corporation who is a stockholder of record at the time
of giving of the notice provided for in this Section 12, who shall be entitled
to vote at such meeting and who complies with the notice procedures set forth in
this Section 12. For business to be properly brought before an annual meeting by
a stockholder, the stockholder must have given timely notice thereof in writing
to the Secretary of the corporation.
If a Tentative Meeting Date has been announced and the meeting date
(disregarding any adjournments thereof) is not more than thirty days prior to
and not more than thirty days after the Tentative Meeting Date, to be timely, a
stockholder's notice shall be delivered to or mailed and received at the
principal executive offices of the corporation not less than sixty days nor more
than ninety days prior to the Tentative Meeting Date; provided, however, that if
less than seventy days' prior public
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<PAGE> 5
disclosure of the Tentative Meeting Date is given or made, notice by the
stockholder to be timely must be so received not later than the close of
business on the tenth day following the day on which public disclosure of the
Tentative Meeting Date was made. Otherwise, to be timely, a stockholder's notice
shall be delivered to or mailed and received at the principal executive offices
of the corporation not less than sixty days nor more than ninety days prior to
the meeting date; provided, however, that if less than seventy days' notice or
prior public disclosure of the meeting date is given or made to stockholders,
notice by the stockholder to be timely must be so received not later than the
close of business on the tenth day following the day on which such notice of the
meeting date or such public disclosure was made.
A stockholder's notice to the Secretary shall set forth as to each
matter the stockholder proposes to bring before the meeting (a) a brief
description of the business desired to be brought before the meeting and the
reasons for conducting such business at the meeting, (b) the name and address,
as they appear on the corporation's books, of the stockholder proposing such
business, (c) the class and number of shares of the corporation which are
beneficially owned (as defined by Rule 13d-3 under the Exchange Act) by such
stockholder and, if such shares are beneficially owned by any person(s) other
than the stockholder of record, the name(s) and address(es) of each such
beneficial owner of such shares and (d) any material interest of the stockholder
or any such beneficial owner in such business. In addition, the stockholder
making such proposal shall promptly provide any other information reasonably
requested by the corporation.
Notwithstanding anything in the By-Laws to the contrary, no business
shall be conducted at an annual meeting except business submitted by or at the
direction of the Board of Directors or by any stockholder of the corporation in
accordance with the procedures set forth in this Section 12. The chairman of the
meeting shall, if the facts warrant, determine and declare to the meeting that
business was not properly brought before the meeting and in accordance with the
provisions of the By-Laws, and if he should so determine, he shall so declare to
the meeting and any such business not properly brought before the meeting shall
not be transacted. Notwithstanding the foregoing provisions of this Section 12,
a stockholder shall also comply with all applicable requirements of the Exchange
Act, and the rules and regulations thereunder with respect to the matters set
forth in this Section 12.
Nothing contained herein shall be deemed to create any obligation on
the part of the corporation to include any stockholder proposal in the
corporation's proxy statement.
ARTICLE III
DIRECTORS
SECTION 1. The number of directors shall be the number fixed from time
to time by resolution of the Board of Directors, provided that the number shall
be not less than three nor more than fifteen and, provided further that, there
shall be added to such number of directors as so determined any number of
directors elected director by the holders of any class of voting stock of the
corporation pursuant to the terms of the constituent instrument establishing
such class. The directors (other than any directors which may be elected by the
class vote of any series of stock of the corporation pursuant to the terms
thereof, which directors shall be elected at the time and serve for the term
specified in the resolutions providing for the issue of such series of stock)
shall be divided into three classes, each consisting of one-third of such
directors as nearly as may be. One class of such directors having been
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<PAGE> 6
elected initially for a one-year term, one class initially for a two-year term
and one class initially for a three-year term, at each succeeding annual meeting
of stockholders, successors to the class of directors whose term expires in that
year shall be elected for a three-year term. If the number of such directors is
changed, any increase or decrease in such directors shall be apportioned among
the classes so as to maintain the classes as nearly equal in number as possible,
and any additional director to any class shall hold office for a term which
shall coincide with the term of such class. A director shall hold office until
the annual meeting for the year in which his term expires and his successor is
elected and qualifies; subject, however, to prior resignation, death or removal
as provided by law and to prior expiration of such director's term in accordance
with the Certificate of Incorporation. Upon the resignation, death or removal of
any director or the expiration of his term, the term of his successor shall be
the same term as that of the director who has so resigned, died or been removed.
Director need not be stockholders. The Board of Directors shall consist of a
majority of directors who are not current or former officers or employees of the
corporation or its subsidiaries ("Outside Directors").
SECTION 2. Any director may resign at any time by giving written notice
to the Board of Directors or to the Secretary of the corporation. The
resignation of any director shall take effect upon receipt of notice thereof or
at such later time as shall be specified in such notice; and unless otherwise
specified therein, the acceptance of such resignation shall not be necessary to
make it effective.
SECTION 3. Vacancies, and newly created directorships resulting from
any increase in the authorized number of directors shall be filled by a majority
of the directors then in office, though less than a quorum provided, however,
that whenever the holders of any class or classes of stock or series thereof are
entitled to elect one or more directors, vacancies and newly created
directorships of such class or classes or series shall be filled in the manner
provided in the constituent instrument establishing such class, classes or
series.
SECTION 4. The business of the corporation shall be managed by its
Board of Directors which may exercise all such powers of the corporation and do
all such lawful acts and things as are not by statute or by the Certificate of
Incorporation or by these By-Laws directed or required to be exercised or done
by the stockholders.
MEETINGS OF THE BOARD OF DIRECTORS
SECTION 5. The Board of Directors of the corporation may hold meetings,
both regular and special, either within or without the State of Delaware.
SECTION 6. Members of the Board of Directors or of any of its
committees may participate in a meeting of such board or committee by means of a
conference telephone or similar communications equipment by means of which all
persons participating in the meeting can hear each other and participation in a
meeting pursuant to this Section 6 shall constitute presence in person at such
meeting.
SECTION 7. The first meeting of directors following the election of a
class of directors by the stockholders shall be a special meeting and shall be
held at such time and place as shall be specified in a notice given as
hereinafter provided for special meetings of the Board of Directors, or as shall
be specified in a written waiver signed by all of the directors.
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SECTION 8. Regular meetings of the Board of Directors shall be held
without special notice at such time and at such place as shall from time to time
be determined by the board.
SECTION 9. Special meetings of the Board of Directors may be called by
the Chairman of the Board or by the President, or on the written request of two
directors, by the Secretary. Written notice of special meetings of the Board of
Directors shall be given to each director at least three days before the date of
the meeting if by mail, or at least twenty-four hours if by telegram, telex or
telecopy.
SECTION 10. At any stated or special meeting of the Board of Directors
a majority of the directors at the time in office (but not less than one-third
of the whole board as determined in accordance with the provisions of Section 1
of this Article III) shall constitute a quorum for the transaction of business
and the act of a majority of the directors present at any meeting at which a
quorum is present shall be the act of the Board of Directors except as may be
otherwise specifically provided by statute or by the Certificate of
Incorporation. In the absence of a quorum a majority of the directors present
may adjourn any meeting from time to time until a quorum is present. No notice
of any adjourned meeting need be given unless otherwise required by law.
COMMITTEES OF DIRECTORS
SECTION 11. The Board of Directors may, by resolution adopted by
affirmative vote of a majority of the whole board, appoint one or more
committees of directors, including, but not limited to, an executive committee,
each committee to consist of not less than three nor more than seven members (as
determined from time to time by resolution of the Board of Directors). Any such
committee or committees, other than the executive committee, appointed by the
Board of Directors shall have and may exercise the powers and authority and
carry out the responsibilities which the Board of Directors shall specify or
delegate. Unless otherwise provided by the Board of Directors, the executive
committee shall, during the intervals between meetings of the Board of
Directors, have and may exercise all of the powers of the board of director in
the management of the business and affairs of the corporation, including the
election or appointment of officers of the corporation (other than Chairman of
the Board, President, Secretary and Treasurer), the declaration of dividends and
the authorization of the issuance of stock and may authorize the seal of the
corporation to be affixed to all papers which may require it; provided, however,
that the executive committee may not rescind any action previously taken by the
Board of Directors. A majority of the members of the executive committee, and of
any audit, finance or nominating committees that may be established, shall be
directors who were not directors of the corporation prior to June 28, 1993 (the
effective date of reorganization). In no event shall any committee have any
power or authority in reference to amending the Certificate of Incorporation,
adopting an agreement of merger or consolidation, the election or appointment of
officers (except as set forth in the next preceding sentence), recommending to
the stockholders the sale, lease or exchange of all or substantially all of the
corporation's property and assets, recommending to the stockholders a
dissolution of the corporation or a revocation of a dissolution, or amending the
By-Laws of the corporation. Meetings of the executive committee may be called
and notices given in the same manner as calling and giving notice of special
meetings of the Board of Directors. All members of any compensation committee of
the Board of Directors shall be Outside Directors.
If and for so long as required by the settlement agreement among the
corporation, the Pension Benefit Guaranty Corporation (the "PBGC") and certain
other parties (the "Settlement Agreement"), the corporation shall maintain a
committee of the Board of Directors which shall be designated as the
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<PAGE> 8
pension committee and which shall consist of at least three directors, all of
whom shall be Outside Directors. The pension committee shall have the following
powers and duties: to appoint, direct, monitor and terminate trustees pursuant
to ERISA Section 403(a); to appoint, monitor and terminate, pursuant to ERISA
Section 402(c)(3), investment managers within the meaning of ERISA Section
3(38); and to oversee and enforce the rights of any pension plan pursuant to the
Settlement Agreement. The pension committee will meet with the PBGC or its
designated representatives as required by the Settlement Agreement.
SECTION 12. The committees shall keep regular minutes of their
proceedings and report the same to the Board of Directors, when required.
COMPENSATION OF DIRECTORS
SECTION 13. The directors may be paid their expenses of attendance at
each meeting of the Board of Directors and may be paid a fee for attendance at
each meeting of the Board of Directors and a stated fee as a director; such fees
may be paid in securities of the corporation or rights, options or warrants to
purchase such securities. No such payment shall preclude any director from
serving the corporation in any other capacity and receiving compensation
therefor. Members of special or standing committees may be allowed expenses and
fees.
ACTION BY CONSENT
SECTION 14. Any action required or permitted to be taken at any meeting
of the Board of Directors or of any committee thereof may be taken without a
meeting, if prior to such action a written consent thereto is signed by all
members of the board or of such committee as the case may be, and such written
consent is filed with the minutes of the proceedings of the board or committees.
ARTICLE IV
NOTICES
SECTION 1. Notices to directors and stockholders shall be in writing
and delivered personally or mailed to the directors or stockholders at their
addresses appearing on the books of the corporation. Notice by mail shall be
deemed to be given at the time when the same shall be mailed. Notice to
directors may also be given by telegram or telecopier. Notice by telegram or
telecopier shall be deemed to be given at the time sent.
SECTION 2. Whenever any notice is required to be given under the
provisions of the statutes or of the Certificate of Incorporation or of these
By-Laws, a waiver thereof in writing, signed by the person or persons entitled
to said notice, whether before or after the time stated therein, shall be deemed
equivalent thereto.
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ARTICLE V
OFFICERS
SECTION 1. The elected officers of the corporation shall be a Chairman
of the Board, a President, one or more Executive Vice Presidents, one or more
Senior Vice Presidents, one or more Group Vice Presidents, a General Counsel,
one or more Vice Presidents, with or without such descriptive titles as the
Board of Directors shall deem appropriate, a Chief Financial Officer, a
Treasurer, a Controller, and a Secretary. The Board of Directors by resolution
may also appoint one or more Assistant Treasurers, Assistant Controllers,
Assistant Secretaries, and such other officers and agents as from time to time
may appear to be necessary or advisable in the conduct of the affairs of the
corporation. Any two or more offices may be held by the same person except the
offices of President and Secretary and the offices of Treasurer and Controller.
SECTION 2. The Board of Directors shall elect or appoint the officers
to fill the positions designated in Section 1 of this Article V at a meeting of
the board held during the same calendar month as the annual meeting of
stockholders.
SECTION 3. The salaries of all elected officers of the corporation
shall be fixed by the compensation committee of the Board of Directors, or if no
compensation committee exists, then by the board.
SECTION 4. The officers of the corporation shall hold office until
their successors are chosen and qualify subject, however, to prior resignation,
death or removal. Any officer elected or appointed by the Board of Directors may
be removed at any time by the affirmative vote of a majority of the whole Board
of Directors. Any vacancy occurring in any office of the corporation by death,
resignation, removal or otherwise shall be filled by the Board of Directors.
SECTION 5. Any officer may resign at any time by giving written notice
to the Board of Directors (or to a principal officer if the Board of Directors
has delegated to such principal officer the power to appoint and to remove such
officer). The resignation of any officer shall take effect upon receipt of
notice thereof or at such later time as shall be specified in such notice; and
unless otherwise specified therein, the acceptance of such resignation shall not
be necessary to make it effective.
CHAIRMAN OF THE BOARD
SECTION 6.(a) The Chairman of the Board shall provide leadership to the
Board assuring that the Board fully discharges its duties by:
- Establishing procedures that govern the Board.
- Scheduling meetings of and organizing the agendas for the Board
and its Committees.
- Calling special meetings of the stockholders and directors for
any purpose or purposes in accordance with the provisions of the
Certificate of Incorporation and the By-Laws of the Corporation.
- Presiding at all meetings of the stockholders and Board unless he
shall be absent or unless he shall, at his option, designate the
Chief Executive Officer to preside in his stead at some
particular meeting.
9
<PAGE> 10
- Together with the Chief Executive Officer, represent the
Corporation to external constituencies including stockholders,
creditors, the community and government officials.
The Chairman of the Board shall in the absence or incapacity of the Chief
Executive Officer have all the powers granted by the By-Laws to the Chief
Executive Officer.
CHIEF EXECUTIVE OFFICER
SECTION 6.(b) The office of Chief Executive Officer of the Corporation,
subject to the control of the Board of Directors, shall be in general charge of
the business, operations, policies and affairs of the Corporation and shall:
- Develop and recommend to the Board a long term strategy and
annual business plan.
- Ensure that the day to day business affairs of the Corporation
are appropriately managed.
- Ensure that the Corporation has an effective management team and
has an active plan for its development and succession.
- Ensure, in cooperation with the Board, that there is an effective
succession plan in place for the Chief Executive Officer
position.
- Serve as chief spokesman for the Corporation.
- Preside at meetings of the Board of Directors and of the
stockholders in the absence of the Chairman and he shall have
power to call special meetings of the stockholders and the Board
of Directors for any purpose or purposes.
The Chief Executive Officer shall perform all the duties and have all the powers
of the Chairman of the Board in the absence or disability of the Chairman of the
Board.
PRESIDENT
SECTION 7. The President shall preside at meetings of the board of
directors and of the stockholders in the absence of the Chairman of the Board,
and he shall have power to call special meetings of the stockholders and the
board of directors for any purpose or purposes. The President shall be the chief
operating officer of the corporation. He shall have the power to sign stock
certificates, contracts and instruments or conveyances, bonds, checks, drafts,
notes, orders for the payment of money and similar obligations. The President
shall perform all the duties and have all the powers of the Chairman of the
Board in the absence or disability of the Chairman of the Board.
SENIOR VICE PRESIDENT
SECTION 8. The Senior Vice Presidents shall perform such duties and
responsibilities and have such authority as shall be assigned or granted to them
by the Board of Directors or by the President. They shall generally assist the
President in the management of the corporation. Unless the Board of Directors
determines otherwise, in the absence or disability of the President, the Senior
Vice President, Executive Vice President or Group Vice President selected by the
President shall perform the duties and exercise the powers of the President.
10
<PAGE> 11
EXECUTIVE OR GROUP VICE PRESIDENT
SECTION 9. The Executive Vice Presidents and Group Vice Presidents
shall be responsible for the operation of divisions or subsidiaries of the
corporation which are assigned to them respectively by the Board of Directors or
the President and they shall perform such other duties and responsibilities and
have such authority as may be assigned or granted to them by the Board of
Directors or the President. With respect to the subsidiaries or divisions of the
corporation which are assigned to them respectively, they shall report to the
President of the corporation. Unless the Board of Directors determines
otherwise, in the absence or disability of the President, the Senior Vice
President, Executive Vice President or Group Vice President selected by the
President shall perform the duties and exercise the powers of the President.
CHIEF FINANCIAL OFFICER
SECTION 10. The Chief Financial Officer shall be the chief accounting
and financial officer of the corporation and shall have active control of and
shall be responsible for all matters pertaining to the accounts and finances of
the corporation. He shall have responsibility for the preparation and
interpretation of cash and working capital budgets, forecasts and related
analyses, for the development of capital expenditure budgets and for the
planning of cash requirements for the consummation of required financing
arrangements. He shall be responsible for all financial planning on both a
long-term and short-term basis and the disposition of investments held by the
corporation as authorized by its Board of Directors or the executive committee
of the Board of Directors. He shall direct the Treasurer and the Controller in
the performance of their respective duties. He shall have such other duties and
responsibilities and powers as may be delegated to him by the Board of Directors
or its executive committee or by the President.
GENERAL COUNSEL
SECTION 11. The General Counsel shall advise the Board of Directors
with respect to the legal liabilities of the directors and of the corporation
with respect to all matters presented to the Board of Directors for
consideration and approval or presented to the directors for their written
approval, which matters would include all SEC, corporate reorganization,
acquisition, sale or other disposition and similar matters. He shall be
responsible for the handling of all legal matters including compliance with, and
interpretation of, law and governmental and other regulations and for retaining
and supervising all outside legal counsel retained by the corporation. The
General Counsel shall perform such other duties as may be assigned to him from
time to time by the President, or the Board of Directors or its executive
committee.
VICE PRESIDENT
SECTION 12. The Vice Presidents shall have such duties and
responsibilities and shall exercise such authority as shall be delegated or
granted to them by the Board of Directors or by the President. They shall
generally assist the President and the Senior Vice Presidents in the performance
of the duties and responsibilities, respectively, of such officers.
11
<PAGE> 12
TREASURER AND ASSISTANT TREASURERS
SECTION 13. Under the general direction of the Chief Financial Officer
of the corporation, the Treasurer shall be responsible for all matters
pertaining to the finances of the corporation. He shall have the care and
custody of all monies, funds and securities of the corporation and shall deposit
all monies and other valuable effects in the name of and to the credit of the
corporation in depositories as authorized by the Board of Directors. He shall
have the power to sign stock certificates, to endorse for deposit or collection,
or otherwise, all checks, drafts, notes, bills of exchange, or other commercial
paper payable to the corporation, and to give proper receipts or discharges for
all payments to the corporation. He shall be responsible for all terms of credit
granted by the corporation and for the collection of all its accounts. He shall
be responsible for all insurance matters and programs of the corporation. If
required by the Board of Directors, the Treasurer shall give the corporation a
bond in such sum and with such surety or sureties as shall be satisfactory to
the Board of Directors for the faithful performance of the duties of his office
and for the restoration to the corporation, in case of his death, resignation,
retirement or removal from office, of all books, papers, vouchers, money and
other property of whatever kind in his possession or under his control belonging
to the corporation. The Treasurer shall perform such other duties as may be
assigned to him from time to time by the President or the Chief Financial
Officer.
Assistant Treasurers in the order of their seniority, unless otherwise
determined by the Board of Directors, shall assist the Treasurer and in the
absence or disability of the Treasurer, perform the duties and exercise the
power of the Treasurer.
CONTROLLER AND ASSISTANT CONTROLLERS
SECTION 14. Under the general direction of the chief accounting officer
of the corporation, the Controller shall be responsible for all matters
pertaining to the accounts of the corporation and the supervision of the books
of account, their installation, arrangement and classification. He shall
maintain adequate records of all assets, liabilities and transactions; shall
audit all payrolls and vouchers for payment by the corporation and all documents
pertaining to such vouchers; see that an adequate system of internal audit of
the transactions of the corporation is currently and regularly maintained;
coordinate the efforts of the company's independent public accountants in its
external audit program; receive, review, and consolidate all operating and
financial statements of the corporation and its various divisions and
subsidiaries; and prepare financial statements, reports and analyses. He shall
have supervision of the accounting practices of the corporation and of each
division of the corporation. He shall cause to be maintained an adequate system
of financial control through a program of budgets, financial planning and
interpretive reports. He shall be responsible for the timely preparation and
filing of all federal, state and local tax returns of the corporation and the
supervision of all matters relating to tax matters of the corporation. The
Controller shall perform such other duties as may be assigned to him from time
to time by the President or the chief accounting officer.
Assistant Controllers in the order of their seniority, unless otherwise
determined by the Board of Directors, shall assist the Controller, and in the
absence or disability of the Controller, perform the duties and exercise the
powers of the Controller.
12
<PAGE> 13
SECRETARY AND ASSISTANT SECRETARIES
SECTION 15. The Secretary shall attend all meetings of the Board of
Directors and all meetings of the stockholders and record all proceedings of the
meetings of the stockholders of the corporation and of the Board of Directors in
a book to be kept for that purpose, and shall perform like duties for the
committees of the Board of Directors when required. He shall give, or cause to
be given, notice of all meetings of the stockholders and meetings of the Board
of Directors and of its committees. He shall have charge of the seal of the
corporation and have authority to affix the same to any instrument requiring it,
and when so affixed, it shall be attested by his signature or by the signature
of the Treasurer or an Assistant Secretary, which may be in facsimile. He shall
keep and account for all books, documents, papers and records of the corporation
except those for which some other officer or agent is properly accountable. He
shall have authority to sign stock certificates, and shall generally perform all
the duties usually appertaining to the office of the Secretary of a corporation.
The Secretary shall perform such other duties as may be assigned to him from
time to time by the President or the General Counsel.
Assistant Secretaries in the order of their seniority, unless otherwise
determined by the Board of Directors, shall assist the Secretary, and in the
absence or disability of the Secretary, perform the duties and exercise the
powers of the Secretary.
ARTICLE VI
CERTIFICATES OF STOCK
SECTION 1. Every holder of stock in the corporation shall be entitled
to have a certificate, signed by, or in the name of the corporation by the
Chairman of the Board, or the President or a Vice President, and by the
Treasurer or an Assistant Treasurer, or the Secretary or an Assistant Secretary
of the corporation, certifying the number of shares owned by him in the
corporation. If the corporation shall be authorized to issue more than one class
of stock, the designations, preferences and relative, participating, option or
other special rights of each class and the qualifications, limitations or
restrictions of such preferences and/or rights shall be set forth in full or
summarized on the face or back of the certificate which the corporation shall
issue to represent such class of stock; provided, however, except as otherwise
provided by law, in lieu of the foregoing requirements, there may be set forth
on the face or the back of the certificate which the corporation shall issue to
represent such class or series of stock, a statement that the corporation will
furnish without charge to each stockholder who so requests, the designations,
preferences and relative, participating, optional or other special rights of
each class of stock or shares thereof and the qualifications, limitations or
restrictions of such preferences and/or rights.
SECTION 2. In case any officer or officers who have signed or whose
facsimile signature or signatures have been used on, any such certificate or
certificates shall cease to be such officer or officers of the corporation,
whether because of death, resignation or otherwise, before such certificate or
certificates have been delivered by the corporation, such certificate or
certificates may nevertheless be adopted by the corporation and be issued and
delivered as though the person or persons who signed such certificate or
certificates or whose facsimile signature or signatures have been used thereon
had not ceased to be such officer or officers of the corporation.
13
<PAGE> 14
LOST CERTIFICATES
SECTION 3. The corporation may direct a new certificate or certificates
to be issued in place of any certificate or certificates theretofore issued by
the corporation alleged to have been lost or destroyed, upon the making of an
affidavit of that fact by the person claiming the certificate of stock to be
lost or destroyed. When authorizing such issue of a new certificate or
certificates, the corporation may, in its discretion and as a condition
precedent to the issuance thereof, require the owner of such lost or destroyed
certificate or certificates, or his legal representative, to advertise the same
in such manner as it shall require and/or to give the corporation a bond in such
sum as it may direct as indemnity against any claim that may be made against the
corporation with respect to the certificates alleged to have been lost or
destroyed.
TRANSFERS OF STOCK
SECTION 4. Upon surrender to the corporation or the transfer agent of
the corporation of a certificate for shares duly endorsed or accompanied by
proper evidence of succession, assignment or authority to transfer, it shall be
the duty of the corporation to issue a new certificate to the person entitled
thereto, cancel the old certificate and record the transaction upon its books.
FIXING OF RECORD DATE
SECTION 5. In order that the corporation may determine the stockholders
entitled to notice of or to vote at any meeting of stockholders or any
adjournment thereof, the Board of Directors may fix a record date, which record
date shall not precede the date upon which the resolution fixing the record date
is adopted by the Board of Directors, and which record date shall not be more
than sixty nor less than ten days before the date of such meeting. If no record
date is fixed by the Board of Directors, the record date for determining
stockholders entitled to notice of or to vote at a meeting of stockholders shall
be at the close of business on the day next preceding the day on which notice is
given, or, if notice is waived, at the close of business on the day next
preceding the day on which the meeting is held. A determination of stockholders
of record entitled to notice of or to vote at a meeting of stockholders shall
apply to any adjournment of the meeting; provided, however, the Board of
Directors may fix a new record date for the adjourned meeting.
In order that the corporation may determine the stockholders entitled
to consent to corporate action in writing without a meeting, the Board of
Directors may fix a record date, which record date shall not precede the date
upon which the resolution fixing the record is adopted by the Board of Directors
and shall not be more than ten days after the date upon which the resolution
fixing the record date is adopted by the Board of Directors.
Any person seeking to have the stockholders authorize or take corporate
action by written consent shall, by written notice to the Secretary, request the
Board of Directors to fix a record date. The Board of Directors shall promptly,
but in all events within ten days after the date on which such a request is
received, adopt a resolution fixing the record date (unless a record date has
previously been fixed by the Board of Directors pursuant to the previous
paragraph).
14
<PAGE> 15
If no record date has been fixed by the Board of Directors pursuant to
the second preceding paragraph or within ten days of the date on which such a
request is received, the record date for determining stockholders entitled to
consent to corporate action in writing, without a meeting, when no prior action
by the Board of Directors is required by applicable law, shall be the first date
on which a signed written consent setting forth the action taken or proposed to
be taken is delivered to the corporation by delivery to its registered office in
the State of Delaware, its principal place of business, or any officer or agent
of the corporation having custody of the book in which proceedings of the
meetings of stockholders are recorded. Delivery shall be by hand or by certified
or registered mail, return receipt requested. If no record date has been fixed
by the Board of Directors and prior action by the Board of Directors is required
by applicable law, the record date for determining stockholders entitled to
consent to corporate action in writing without a meeting shall be at the close
of business on the day on which the Board of Directors adopts the resolution
taking such prior action.
In order that the corporation may determine the stockholders entitled
to receive payment of any dividend or other distribution or allotment of any
rights or the stockholders entitled to exercise any rights in respect of any
change, conversion or exchange of stock, or for the purpose of any other lawful
action, the Board of Directors may fix a record date, which record date shall
not precede the date upon which the resolution fixing the record date is
adopted, and which record date shall be not more than sixty days prior to such
action. If no record date is fixed, the record date for determining stockholders
for any such purpose shall be at the close of business on the day on which the
Board of Directors adopts the resolution relating thereto.
In order that the corporation may determine whether stockholders
holding the requisite number of shares desire to require the calling of a
special meeting of the stockholders pursuant to Section 5 of Article II of these
By-Laws, the Board of Directors may fix a record date, which record date shall
not precede the date upon which the resolution fixing the record date is adopted
by the Board of Directors and shall not be more than ten days after the date
upon which the resolution fixing the record date is adopted by the Board of
Directors.
Any person seeking to call a special meeting shall, by written notice
to the Secretary, request the Board of Directors to fix a record date. The Board
of Directors shall promptly, but in all events within ten days after the date on
which such a request is received, adopt a resolution fixing the record date.
If no record date has been fixed by the Board of Directors within ten
days of the date on which such a request is received, the record date for
determining stockholders entitled to call a special meeting, when no prior
action by the Board of Directors is required by applicable law, shall be the
first date on which a request in writing of a stockholder requesting the calling
of a special meeting and stating the purpose of purposes of the proposed meeting
is delivered to the corporation by delivery to its registered office in the
State of Delaware, its principal place of business, or any officer or agent of
the corporation having custody of the book in which proceedings of meetings of
stockholders are recorded. Delivery made to the corporation's registered office
shall be by hand or by certified or registered mail, return receipt requested.
If no record date has been fixed by the Board of Directors and prior action by
the Board of Directors is required by applicable law, the record date for
determining stockholders entitled to call a special meeting shall be at the
close of business on the day on which the Board of Directors adopts the
resolution taking such prior action.
15
<PAGE> 16
REGISTERED STOCKHOLDERS
SECTION 6. The corporation shall be entitled to recognize the exclusive
right of a person registered on its books as the owner of shares to receive
dividends, and to vote as such owner, and to hold liable for calls and
assessments, a person registered on its books as the owner of shares, and shall
not be bound to recognize an equitable or other claim to or interest in such
share or shares on the part of any other person, whether or not it shall have
express or other notice thereof, except as otherwise provided by the laws of
Delaware.
STOCK OPTIONS AND AGREEMENTS
SECTION 7. Any stockholder of this corporation may enter into
agreements giving to any other stockholder or stockholders or any third party an
option to purchase any of his stock in the corporation; and such shares of stock
shall thereupon be subject to such agreement and transferable only upon proof of
compliance therewith, provided, however, that a copy of such agreement be filed
with the corporation and reference thereto placed upon the certificates
representing said shares of stock.
ARTICLE VII
GENERAL PROVISIONS
DIVIDENDS
SECTION 1. Dividends upon the capital stock of the corporation subject
to the provisions of the certificate of incorporation, if any, may be declared
by the Board of Directors at any regular or special meeting, pursuant to law.
Dividends may be paid in cash, in property, or in shares of the capital stock,
subject to the provisions of the Certificate of Incorporation.
SECTION 2. Before payment of any dividend, there may be set aside out
of any funds of the corporation available for dividends such sum or sums as the
directors from time to time, in their absolute discretion, think proper as a
reserve or reserves for meeting contingencies, or for equalizing dividends, or
for repairing or maintaining any property of the corporation, or for such other
purpose as the directors shall think conducive to the interest of the
corporation, and the directors may modify or abolish any such reserve in the
manner in which it was created.
CHECKS
SECTION 3. All checks or demands for money and notes of the corporation
shall be signed by such officer of officers or such other person or persons as
the Board of Directors may from time to time designate.
16
<PAGE> 17
FISCAL YEAR
SECTION 4. The fiscal year of the corporation shall be fixed by
resolution of the Board of Directors.
SEAL
SECTION 5. The corporate seal shall have inscribed thereon the name of
the corporation, the year of its organization and the words "Corporate Seal,
Delaware." The seal may be used by causing it or a facsimile thereof to be
impressed or affixed or otherwise reproduced.
ARTICLE VIII
AMENDMENTS
SECTION 1. These By-Laws may be altered or repealed at any regular
meeting of the stockholders or of the Board of Directors or at any special
meeting of the stockholders or of the Board of Directors if notice of such
alteration or repeal be contained in the notice of such special meeting.
17
<PAGE> 1
Page 1 of 2
Exhibit (11)
THE LTV CORPORATION
Calculation of Basic Earnings Per Share (EPS)
(Dollar amounts in millions except for EPS)
(Share data in thousands)
<TABLE>
<CAPTION>
Three Months Ended September 30, Nine Months Ended September 30,
------------------------------------------------ -------------------------------------------------
1998 1997 1998 1997
----------------------- ----------------------- ----------------------- ------------------------
Shares Amount EPS Shares Amount EPS Shares Amount EPS Shares Amount EPS
------ ------ ------- ------ ------ ------- ------ ------ ------- ------ ------ -------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
Net income (loss) $ 11 $ (56) $ 34 $ (2)
Preferred stock dividend
requirements - - (1) (1)
---- ----- ----- ----
$ 11 (56) $ 33 $ (3)
==== ===== ===== ====
Share base:
Average common
stock outstanding 99,865 103,096 99,840 104,092
BASIC EARNINGS PER SHARE
Basic $ 0.11 $(0.50) $ 0.33 $ 0.01
Extraordinary loss - (0.04) - (0.04)
------ ------ ------- ------
Net income (loss) $ 0.11 $(0.54) $ 0.33 $(0.03)
====== ====== ======= =======
</TABLE>
<PAGE> 2
Page 2 of 2
Exhibit (11)
THE LTV CORPORATION
Calculation of Dilutive Earnings Per Share (EPS)
(Dollar amounts in millions except for EPS)
(Share data in thousands)
<TABLE>
<CAPTION>
Three Months Ended September 30, Nine Months Ended September 30,
------------------------------------------------ --------------------------------------------------
1998 1997 1998 1997
----------------------- ----------------------- ----------------------- -------------------------
Shares Amount EPS Shares Amount EPS Shares Amount EPS Shares Amount EPS
------ ------ ------- ------ ------ ------- ------ ------ ------- ------ ------ ---------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
Net income $ 11 $ (56) $ 34 $ (2)
Preferred stock dividend
requirements - - (1) (1)
----- ----- ---- ----
11 (56) 33 (3)
Share base:
Average common
stock outstanding 99,865 103,096 99,840 104,092
Common Stock equivalent shares
resulting from outstanding
Series A Warrants, Stock
Options and Restricted
Stock 226 216 175 164
Common Stock issuable upon
conversion of Series B
Preferred Stock (A) - (A) - (A) - (A) -
Common Stock issuable upon
conversion of Senior
Secured Convertible Notes (B) - (B) - (B) - (B) -
------- ----- ------- ----- ------- ---- ------- -----
100,091 $ 11 103,312 $ (56) 100,015 $ 33 104,256 $ (3)
======= ===== ======= ===== ======= ==== ======= =====
DILUTIVE EARNINGS PER SHARE
Dilutive $ 0.11 $ (0.50) $ 0.33 $ 0.01
Extraordinary loss - (0.04) - (0.04)
------- ------- ------- --------
Net income (loss) $ 0.11 $ (0.54) $ 0.33 $ (0.03)
======= ======= ======= ========
</TABLE>
(A) Addition of these shares would result in antidilution.
(B) Senior Secured Convertible Notes were redeemed in September 1997.
<TABLE> <S> <C>
<ARTICLE> 5
<MULTIPLIER> 1,000,000
<S> <C>
<PERIOD-TYPE> 9-MOS
<FISCAL-YEAR-END> DEC-31-1998
<PERIOD-START> JAN-01-1998
<PERIOD-END> SEP-30-1998
<CASH> 91
<SECURITIES> 258
<RECEIVABLES> 496
<ALLOWANCES> 19
<INVENTORY> 855
<CURRENT-ASSETS> 1,698
<PP&E> 4,314
<DEPRECIATION> 1,056
<TOTAL-ASSETS> 5,469
<CURRENT-LIABILITIES> 886
<BONDS> 363
0
1
<COMMON> 53
<OTHER-SE> 1,662
<TOTAL-LIABILITY-AND-EQUITY> 5,469
<SALES> 3,284
<TOTAL-REVENUES> 3,284
<CGS> 2,889
<TOTAL-COSTS> 3,218
<OTHER-EXPENSES> 11
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 2
<INCOME-PRETAX> 53
<INCOME-TAX> 19
<INCOME-CONTINUING> 34
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 34
<EPS-PRIMARY> 0.33
<EPS-DILUTED> 0.33
</TABLE>
