As filed with the Securities and Exchange Commission on September 25, 1995
Registration No. 33-
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
__________________
FORM S-3
REGISTRATION STATEMENT
Under
The Securities Act of 1933
INLAND STEEL INDUSTRIES, INC.
__________________
(Exact name of registrant as specified in its charter)
Delaware 36-3425828
(State of incorporation) (I.R.S. Employer Identification Number)
30 West Monroe Street
Chicago, Illinois 60603
(312) 346-0300
(Address, including zip code, and telephone number,
including area code, of principal executive offices)
George A. Ranney, Jr.
Vice President and General Counsel
30 West Monroe Street
Chicago, Illinois 60603
(312) 899-3919
(Name, address, including zip code, and telephone
number, including area code, of agent for service)
_________________
Copies to:
Robert E. Curley
Mayer, Brown & Platt
190 South LaSalle Street
Chicago, Illinois 60603
________________
Approximate date of commencement of proposed sale to the public:
From time to time after the Registration Statement becomes effective.
If the only securities being registered on this Form are being
offered pursuant to dividend or interest reinvestment plans, please check
the following box: [ ]
If any of the securities being registered on this Form are to be
offered on a delayed or continuous basis pursuant to Rule 415 under the
Securities Act of 1933, other than securities offered only in connection
with dividend or interest reinvestment plans, check the following box: [x]
If this Form is filed to register additional securities for an
offering pursuant to Rule 462(b) under the Securities Act, check the
following box and list the Securities Act registration statement
number of earlier effective registration statement for the same
offering. [ ]____________________________________
If this Form is a post-effective amendment filed pursuant to Rule
462(c) under the Securities Act, check the following box and list the
Securities Act registration statement number of the earlier effective
registration statement for the same offering. [ ]_____________________
If delivery of the prospectus is expected to be made pursuant to Rule
434, please check the following box.[ ]
CALCULATION OF REGISTRATION FEE
===============================================================================
Proposed Proposed Amount
Title of each maximum maximum of
class of Amount offering aggregate registration
securities to to be price per offering fee
be registered registered share (1) price (1)
______________________________________________________________________________
Common Stock
($1.00 par value)
(including
preferred stock
purchase rights)..... 500,000 $23.75 $11,875,000 $4,094.83
shares
==============================================================================
(1) Estimated solely for purposes of determining the registration fee,
based on the average of the high and low sales prices on the New York
Stock Exchange Composite Tape on September 21, 1995.
______________________
The Registrant hereby amends this Registration Statement on such date
or dates as may be necessary to delay its effective date until the
Registrant shall file a further amendment which specifically states that
this Registration Statement shall thereafter become effective in accordance
with Section 8(a) of the Securities Act of 1933 or until the Registration
Statement shall become effective on such date as the Securities and
Exchange Commission, acting pursuant to said Section 8(a), may determine.
Information contained herein is subject to completion or amendment. A
registration statement relating to these securities has been filed with the
Securities and Exchange Commission. These securities may not be sold nor
may offers to buy be accepted prior to the time the registration statement
becomes effective. This prospectus shall not constitute an offer to sell
or the solicitation of an offer to buy nor shall there be any sale of these
securities in any State in which such offer, solicitation or sale would be
unlawful prior to registration or qualification under the securities laws
of any such State.
SUBJECT TO COMPLETION, DATED SEPTEMBER 25, 1995
500,000 Shares
Inland Steel Industries, Inc.
Common Stock
(par value $1.00 per share)
______________________
The 500,000 shares (the "Shares") of Common Stock, par value $1.00
(the "Common Stock"), of Inland Steel Industries, Inc. (the "Company")
offered hereby may be purchased pursuant to the exercise of transferable
options and stock appreciation rights issued by the Company to participants
in the Inland 1995 Incentive Stock Plan, the Inland 1992 Incentive Stock
Plan, the Inland 1988 Incentive Stock Plan and the Inland 1984 Incentive
Stock Plan and transferred by those participants. See "Plan of
Distribution."
On September 22, 1995, the last reported sale price of the Common
Stock on the New York Stock Exchange was $23.625 per share.
See "Risk Factors Related to the Steel Industry and the Company"
beginning on page five for certain considerations relevant to an investment
in the Common Stock.
_________________
THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE
SECURITIES AND EXCHANGE COMMISSION OR ANY STATE SECURITIES
COMMISSION NOR HAS THE SECURITIES AND EXCHANGE COMMISSION
OR ANY STATE SECURITIES COMMISSION PASSED UPON THE
ACCURACY OR ADEQUACY OF THIS PROSPECTUS. ANY
REPRESENTATION TO THE CONTRARY IS
A CRIMINAL OFFENSE.
______________________
The date of this Prospectus is September , 1995
No person is authorized in connection with any offering made hereby
to give any information or to make any representation not contained in this
Prospectus, and, if given or made, such information or representation must
not be relied upon as having been authorized by the Company. This
Prospectus does not constitute an offer to sell or a solicitation of an
offer to buy any security other than the Common Stock offered hereby, nor
does it constitute an offer to sell or a solicitation of an offer to buy
any of the securities offered hereby to any person in any jurisdiction in
which it is unlawful to make such an offer or solicitation to such person.
Neither the delivery of this Prospectus nor any sale made hereunder shall
under any circumstance create any implication that the information
contained herein is correct as of any date subsequent to the date hereof.
TABLE OF CONTENTS
Page Page
Available Information ............. 2 Use of Proceeds ............... 9
Incorporation by Reference ........ 3 Plan of Distribution ......... 10
The Company ....................... 4 Description of Capital
Risk Factors Related to the Steel Stock and Voting Notes.... 21
Industry and the Company ........ 5 Experts ...................... 26
Validity of the Shares ....... 26
AVAILABLE INFORMATION
The Company is subject to the informational requirements of the
Securities Exchange Act of 1934, as amended (the "Exchange Act"), and in
accordance therewith files reports and other information with the
Securities and Exchange Commission (the "Commission"). Reports, proxy
material and other information concerning the Company can be inspected and
copied at the offices of the Commission at 450 Fifth Street, N.W.,
Washington, D.C. 20549 or at its regional offices, Citicorp Center, 500
West Madison Street, Chicago, Illinois 60661 and Seven World Trade Center,
New York, New York 10048. Copies of such material can be obtained from the
Public Reference Section of the Commission at 450 Fifth Street, N.W.,
Washington, D.C. 20549 at prescribed rates. Such reports, proxy material
and other information concerning the Company also may be inspected at the
offices of the New York Stock Exchange, Inc. and the Chicago Stock
Exchange, Incorporated.
The Company has filed with the Commission a registration statement on
Form S-3 (together with all amendments and exhibits, the "Registration
Statement") under the Securities Act, with respect to the shares of Common
Stock offered hereby. This prospectus ("Prospectus"), which constitutes a
part of the Registration Statement, does not contain all the information
set forth in the Registration Statement, certain items of which are
contained in exhibits to the Registration Statement as permitted by the
rules and regulations of the Commission. Statements made in this
Prospectus as to the content of any contract, agreement or other document
referred to are not necessarily complete. With respect to each such
contract, agreement or other document filed as an exhibit to the
Registration Statement, reference is made to the exhibit for a more
complete description of the matter involved, and each such statement shall
be deemed qualified in its entirety by such reference.
INCORPORATION BY REFERENCE
There is incorporated herein by reference the Company's Annual Report
on Form 10-K for the fiscal year ended December 31, 1994, as amended by
Form 10-K/A dated June 22, 1995, and the Company's Quarterly Reports on
Form 10-Q for the fiscal quarters ended March 31, 1995 and June 30, 1995
(SEC File No. 1-9117) as filed by the Company with the Commission pursuant
to the Exchange Act. See "Description of Capital Stock and Voting Notes"
herein for a current description of the Company's Common Stock. All
documents subsequently filed by the Company pursuant to Section 13(a),
13(c), 14 or 15(d) of the Exchange Act prior to the termination of the
offering made hereby shall be deemed to be incorporated by reference into
this Prospectus and to be a part hereof. Any statement contained in a
document incorporated or deemed to be incorporated by reference herein will
be deemed to be modified or superseded for purposes of this Prospectus to
the extent that a statement contained herein or in any other subsequently
filed document which also is, or is deemed to be, incorporated by reference
herein modifies or supersedes any such statement. Any such statement so
modified or superseded will not be deemed, except as so modified or
superseded, to constitute a part of this Prospectus.
The Company will provide without charge to each person, including any
beneficial owner, to whom this Prospectus is delivered, on the request of
such person, a copy of any of the foregoing documents incorporated herein
by reference (other than the exhibits to such documents unless such
exhibits are specifically incorporated by reference into such documents).
Written or telephone requests should be directed to Inland Steel
Industries, Inc. at its principal executive offices, 30 West Monroe Street,
Chicago, Illinois 60603, Attention: Secretary (telephone (312) 346-0300).
THE COMPANY
The Company is the sole stockholder of Inland Steel Company and
Inland Materials Distribution Group, Inc. ("Distribution"). Inland Steel
Company is a fully integrated domestic steel company that produces and
sells a wide range of steels, of which approximately 99% consists of carbon
and high-strength low-alloy steel grades. It is also a participant in
certain steel-finishing joint ventures. The two subsidiaries of
Distribution are Joseph T. Ryerson & Son, Inc. ("Ryerson") and J.M. Tull
Metals Company, Inc. ("Tull"), leading domestic steel service, distribution
and materials processing organizations.
Inland Steel Company manufactures basic steel products and is
involved in related raw materials operations. It has the capability to
produce six million tons of raw steel annually at its Indiana Harbor Works
complex in East Chicago, Indiana. The two divisions of Inland Steel
Company are Inland Steel Flat Products Company, which manages iron ore
operations, conducts ironmaking operations, produces raw steel, and
manufactures steel sheet, strip and plate and certain related semi-finished
products for the automotive, appliance, office furniture, steel service
center and electrical motor industries, and Inland Steel Bar Company, which
manufactures and sells special quality steel bars and related semi-finished
products for forgers, steel service centers, heavy equipment manufacturers,
cold finishers, and the transportation industry.
Distribution processes and markets carbon, stainless and alloy
steels, aluminum, nickel, brass, copper, specialty metals and industrial
plastics to manufacturers through 54 service center locations across the
United States. Distribution's Ryerson subsidiary operates through three
geographic divisions headquartered in Philadelphia, Chicago and Seattle.
In addition, the Ryerson Coil Processing Company division, headquartered in
Chicago, performs high-quality processing for customers who traditionally
buy large quantities of carbon sheet steel. Based in Norcross, Georgia,
Tull and its AFCO Metals, Inc. subsidiary operate primarily across the
Southeast.
Inland Steel Company and Nippon Steel Corporation ("NSC") operate,
through joint ventures, two steel-finishing facilities near New Carlisle,
Indiana. The total cost of these facilities was approximately $1.1
billion. I/N Tek, owned 60% by a subsidiary of Inland Steel Company and
40% by a subsidiary of NSC, operates a cold-rolling mill. I/N Kote, owned
equally by subsidiaries of Inland Steel Company and NSC, operates two
galvanizing lines.
The address of the principal executive offices of the Company is 30
West Monroe Street, Chicago, Illinois 60603, and the telephone number of
the Company is (312) 346-0300.
RISK FACTORS RELATED TO THE STEEL INDUSTRY AND THE COMPANY
The following factors, together with the other information contained
or incorporated by reference in this Prospectus, should be taken into
account by prospective purchasers of the Common Stock.
Domestic Steel Industry
Highly Cyclical Industry
The cyclical nature of the domestic steel industry was demonstrated in
the past decade. The first part of the decade saw significant restructuring
and reductions in industry capacity, continuing significant losses and
bankruptcies, as well as the impact of a strong dollar, which generally
disadvantaged domestic steel producers and their exporting customers. This
was followed by record-high industry profits in 1988 and the 1990-91
downturn in the economy, including a dramatic decline in steel industry
financial performance. Beginning in 1993, there has been an increase in
demand for steel and somewhat higher prices.
Potential Excess Industry Capacity and Price Sensitivity
Steel consumption in the United States has not grown with the overall
economy over the last decade. While domestic steel producers have taken
actions to scale back their operations through corporate reorganizations,
through the shut-down of older facilities, or as a result of bankruptcy
proceedings, there had existed over the past several years and until
recently, taking into account imports, significant excess capacity in the
United States. Furthermore, while integrated steel producers, including
Inland Steel Company, have reduced their total production capacity,
capacity has been increased by most integrated producers in certain higher
value-added product lines. With further increases currently underway,
significant overcapacity could arise in these product lines at various
times during the business cycle, particularly in coated steel products.
Overcapacity would likely directly impact prices for steel products.
Given the high fixed cost of steel production, the financial performance of
the major integrated steel producers is substantially affected by
relatively small variations in the prices of their products.
Competition
The domestic steel market is highly competitive. Major integrated
producers, including Inland Steel Company, face competition from a variety
of sources.
Imports. Domestic steel producers face significant competition from
foreign producers and have been adversely affected by imports. Imports of
steel mill products accounted for approximately 24.7% of the domestic
market in 1994, below the 1984 peak of 26.4%, but up from 18.7% in 1993. A
significant portion of the increase was attributable to the import of
semi-finished steel mill products. Many foreign steel producers are owned,
controlled or subsidized by their governments. Decisions by these foreign
producers with respect to production and sales may be influenced to a
greater degree by political and economic policy considerations than by
prevailing market conditions. Certain foreign producers of steel and
products made of steel have continued to ship into the United States market
despite decreased profit margins or losses experienced by such producers.
ITC Rulings. In 1992, unfair trade petitions were filed against foreign
producers of bar, rod and flat-rolled steel products. During 1993, the
International Trade Commission ("ITC") upheld final subsidy and dumping
margins on essentially all of the bar and rod products and about half of
the flat-rolled products, in each case based on the tonnage of the products
against which claims were brought. Certain domestic producers filed formal
appeals of the ITC decisions in the U.S. Court of International Trade
("CIT") or similar jurisdictional bodies in certain of the trade cases, and
foreign producers appealed certain of the findings against them. The CIT
sustained the ITC in the cases brought before it. It is not certain how the
ITC actions will affect imports of steel products into the United States or
the price of such steel products.
GATT Agreements. The General Agreement on Tariffs and Trade ("GATT") has
been ratified by the U.S. Congress. Legislation to implement GATT was
enacted into Federal law in December 1994 and the related Uruguay Round
agreements went into effect on January 1, 1995. The key provisions
applicable to domestic steel producers include an agreement to eliminate
steel tariffs in major industrial markets, including the United States, and
agreements regarding various subsidy and dumping practices as well as
dispute settlement procedures. The elimination of tariffs on imported
steel products and the other changes implemented under such legislation and
agreements could potentially have a material adverse impact on sales by
domestic steel producers.
Mini-mills. Mini-mills provide significant competition in certain
product lines, principally structural shapes, bars and rods. Mini-mills are
relatively efficient, low-cost producers that produce steel principally
from scrap in electric furnaces, and at this time generally have lower
capital, overhead, employment and environmental costs than the integrated
steel producers, including Inland Steel Company. Mini-mills have been
adding capacity and expanding their product lines in recent years to
include larger-size structural products and certain flat-rolled products,
including coated products. Thin-slab casting technologies have allowed
mini-mills to enter certain sheet markets which have traditionally been
supplied by integrated producers. Such plants are in operation in the
United States and plans have been announced for additional thin-slab
mini-mill plants.
Reorganized/Reconstituted Mills. The intensely competitive conditions
within the domestic steel industry have been aggravated by the bankruptcy
filings of a number of steel producers. These reorganized producers, along
with mills which have been sold by integrated steel producers to new
owners, often operate with lower cost structures, particularly with regard
to labor expenses. Bankruptcy filings and sales of facilities also tend to
promote the continued operation, modernization and upgrading of marginal
facilities, perpetuating overcapacity in certain industry product lines.
Steel Substitutes. In the case of many steel products, there is
substantial competition from manufacturers of products other than steel,
including plastics, aluminum, ceramics, glass and concrete.
Significant Cost Of Environmental Regulation
Domestic steel producers, including the Company, are subject to
environmental laws and regulations concerning emissions into the air,
discharges into ground water and waterways, and the generation, handling,
labeling, storage, transportation, treatment and disposal of waste
material. These include various Federal statutes regulating the discharge
or release of pollutants to the environment, including the Clean Air Act,
Clean Water Act, Resource Conservation and Recovery Act, Comprehensive
Environmental Response, Compensation and Liability Act of 1980 ("CERCLA,"
also known as "Superfund"), Safe Drinking Water Act, and Toxic Substances
Control Act, as well as state and local requirements. Violations of these
laws and regulations can give rise to a variety of civil, administrative,
and, in some cases, criminal actions and could also result in substantial
liabilities or require substantial capital expenditures. In addition, under
CERCLA the United States Environmental Protection Agency (the "EPA") has
authority to impose liability for site remediation on waste generators,
past and present site owners and operators, and transporters, regardless of
fault or the legality of the original disposal activity. Liability under
CERCLA is strict, joint and several. The costs of environmental compliance
may place domestic steel producers at a competitive disadvantage with
respect to foreign steel producers, which are not subject to environmental
requirements as stringent as those in the United States, and producers of
materials that compete with steel, which may not be required to assume
equivalent costs in their operations.
The Company
Losses
Although the Company returned to profitability in 1994, the Company
sustained net losses in five of the past ten years, including a $37.6
million net loss in 1993, a $815.6 million net loss in 1992 (including a
$656 million charge related to the adoption of FASB Statement No. 106), and
a $275.1 million net loss in 1991.
Cash Flow, Leverage and Liquidity
Cash Outflows Before Financing Activities. Although the Company's cash
flow before financing activities, such as sale of securities, retirement of
debt and payment of preferred dividends, has been positive since 1993, for
the years 1992 and 1991, such cash flow was negative $64.0 million and
negative $126.2 million, respectively.
Highly Leveraged. The Company is highly leveraged and its debt
obligations are rated less than "investment grade" by the major rating
agencies. This contributed to the Company's paying higher interest rates,
being subject to more burdensome and restrictive financial covenants, and
experiencing greater limitations on credit availability.
Limited Financial Flexibility. Although the Company may incur additional
debt at this time, the First Mortgage Indenture of Inland Steel Company,
the indenture related to the Company's $150 million principal amount of
12.75% Notes due December 15, 2002 (the "12.75% Notes"), and documents
governing borrowings by the Company's subsidiaries, limit the Company's
ability to borrow funds and its financial flexibility.
Dependence on Transportation Industry
Demand for the Company's products is affected by, among other things,
the relative strength or weakness of the transportation industry, primarily
the automotive industry. In 1994, Inland Steel Company shipments of its
product to the transportation market, including automotive, approximated
32% of total tonnage of steel shipments. This dependence on the
transportation industry is expected to grow modestly in the future. The
Materials Distribution segment ships approximately 10% of its product to
transportation equipment producers. Sales to General Motors Corporation
accounted for approximately 7% of consolidated net sales in each of 1994,
1993 and 1992.
Dependence on Third Parties for Coke Requirements
The last of Inland Steel Company's cokemaking facilities was permanently
shut down by year-end 1993. All coke battery closures were necessitated by
the inability of the facilities to meet environmental regulations and by
their deteriorating condition and performance. Inland Steel Company has
entered into a long-term contract to satisfy the majority of its coke
needs. The contract contains a provision whereby coke prices to Inland
Steel Company are adjusted annually based on market factors. In addition,
PCI Associates (in which a subsidiary of Inland Steel Company holds a 50%
interest) has constructed and is operating a pulverized coal injection
facility that reduces Inland Steel Company's coke needs by approximately 25%.
Reliance on Key Manufacturing Equipment
The Company's integrated steel manufacturing processes are dependent
upon certain critical pieces of steelmaking equipment, such as the No. 7
Blast Furnace, the two basic oxygen furnace shops, the continuous casters,
and the 80-inch Hot Strip Mill, each of which on occasion has been out of
service as the result of an unexpected equipment failure. Such
interruptions in the Company's production capabilities could result in
fluctuations in the Company's sales and income. The Company believes that
it maintains adequate property damage insurance to provide for
reconstruction of damaged equipment, as well as business interruption
insurance to mitigate losses resulting from any production shutdown caused
by an unexpected equipment failure. To date the Company has not experienced
an equipment failure that has resulted in the complete shutdown of its
steelmaking or finishing operations for a significant period of time.
However, no assurance can be given that a material shutdown will not occur
in the future or that such a shutdown would not have a material adverse
effect on the Company.
Obligation to Sell Steel to I/N Kote Without Regard to Price
Inland Steel Company is obligated to sell cold-rolled steel to the
unconsolidated I/N Kote joint venture and to make such sales at a price
which is determined pursuant to the terms of the joint venture agreement.
The Company's return on this venture is largely dependent on the price of
cold-rolled steel sold to I/N Kote. The price received by Inland Steel
Company is a function of I/N Kote's sales revenue, operating costs, debt
service, and nominal return on partners' equity, with certain adjustments
based upon I/N Kote's operating rate and revenue comparisons between Inland
Steel Company and I/N Kote. As a result, in 1993, Inland Steel Company sold
cold-rolled steel to I/N Kote at prices that approximated its costs of
production. In 1994 and in the first six months of 1995 such prices
exceeded production costs but were still less than the market prices of
cold-rolled steel products. There is no assurance that Inland Steel
Company will receive higher prices for cold-rolled steel sold to I/N Kote
in the future. Sales of cold-rolled steel to I/N Kote totalled 737,000 tons
in 1994.
Pension and Other Postretirement Benefits
The Company provides pension, health care and life insurance benefits to
its eligible employees and retirees. Pension benefits are provided to
substantially all employees under a trusteed non-contributory plan. The
pension benefits are funded through a pension trust while health care and
life insurance benefits for active and retired employees are paid as
incurred.
Pension Liabilities. Under Generally Accepted Accounting Principles
("GAAP"), the Company's $1.65 billion Pension Plan had unfunded liabilities
of $87 million at year-end 1994. On an annualized basis, individual yearly
returns earned in the Pension Plan have been volatile, with the plan
earning less than 1% in 1994, compared with an average annual return over
the last ten years of approximately 12%. In 1994, for the first time since
1985, the Company recorded a pension cost rather than a credit. The
projected benefit obligation of the Pension Plan, calculated in accordance
with Financial Accounting Standards Board ("FASB") Statement No. 87,
decreased in 1994 from 1993. However, pension reform legislation contained
in GATT may accelerate funding requirements of the Company. In May 1995,
the Company contributed 3,946,385 shares of its Common Stock, valued at
approximately $100 million, to its Pension Plan in order to address future
funding requirements.
Liabilities for Benefits Other Than Pensions Are Unfunded. Liabilities
for health care and life insurance benefits are not funded. The unfunded
benefits liability reflected on the balance sheet of the Company as of
December 31, 1994 was approximately $1.2 billion. The unfunded liability
will continue to grow as long as accrual-basis costs exceed cash benefit
payments.
Financial Commitments for Environmental Compliance
The U.S. District Court for the Northern District of Indiana entered a
consent decree in June 1993 confirming the agreement between Inland Steel
Company and the EPA on all matters raised by a lawsuit filed by the EPA in
1990. The consent decree included a $3.5 million cash fine, an obligation
to undertake environmentally beneficial projects at the Indiana Harbor
Works through 1997 costing approximately $7 million, and sediment
remediation of portions of the Indiana Harbor Ship Canal and Indiana Harbor
Turning Basin estimated to cost approximately $19 million over the next
several years. The consent decree also requires the Company, among other
things, to assess the extent of environmental contamination at Inland Steel
Company's Indiana Harbor Works, to evaluate corrective measures and to
implement such measures. The Company is presently assessing the extent of
environmental contamination. The Company anticipates that this assessment
will cost approximately $1 million to $2 million per year and will take
another three to five years to complete. Because neither the nature and
extent of the contamination nor the associated corrective actions can be
determined until the assessment of environmental contamination and
evaluation of corrective measures is completed, the Company cannot
presently reasonably estimate the costs of or the time required to complete
such corrective actions. Such corrective actions may, however, require
significant expenditures over the next several years that may be material
to the results of operations or financial position of the Company.
Insurance coverage with respect to such corrective actions is not
significant.
Environmental projects authorized and presently under consideration,
including those designed to comply with the 1990 Clean Air Act Amendments,
but excluding any amounts that may be required under the settlement of the
1990 EPA lawsuit, will require capital expenditures of approximately $24
million in 1995. It is anticipated that the Company will make annual
capital expenditures of $5 million to $10 million in each of the four years
following. In addition, the Company will have ongoing annual expenditures
of $40 million to $50 million for the operation of air and water pollution
control facilities to comply with current Federal, state and local laws and
regulations. Due to the inability to predict the costs of corrective action
that may be required under the U.S. Resource Conservation and Recovery Act
and the consent decree settling the 1990 EPA lawsuit, the Company cannot
predict the amount of additional environmental expenditures that will be
required.
Common Stock Buyback Commitment
In connection with the sale of the Series F Exchangeable Preferred Stock
(the "Series F Preferred Stock") to a subsidiary of NSC in December 1989,
the Company agreed to repurchase $185 million of its Common Stock. The
remaining repurchase commitment of $37.9 million as of December 31, 1994 is
reflected as "temporary equity" on the Company's balance sheet. The
Company has exchanged the Series F Preferred Stock for a 10.23% Subordinated
Voting Note. See "Description of Capital Stock and Voting Note -- Exchange
Note."
Recent Absence of Common Stock Dividends
The Board of Directors discontinued the quarterly Common Stock cash
dividend beginning in the second quarter of 1991 and in March 1995
reinstituted a quarterly dividend on Common Stock of $.05 per share. The
payment of any future dividends on the Common Stock and the amount thereof
will be determined by the Board of Directors in light of earnings, the
financial condition of the Company, and other relevant factors. Certain
covenants in the indenture related to the 12.75% Notes further limit the
Company's ability to pay cash dividends on Common Stock. See "Description
of Capital Stock and Voting Notes-Common Stock-Dividend Limitations."
USE OF PROCEEDS
The amount of the proceeds to be received upon exercise of the
transferable options to which this Prospectus relates will depend upon the
exercise prices of the options and the extent to which they are exercised.
Expenses of the offering will be minimal. The proceeds from the sale of
the Common Stock will be used for general corporate purposes.
PLAN OF DISTRIBUTION
The shares of Common Stock of the Company covered by this Prospectus are
being offered by the Company to transferees of transferable options granted
to the officers and certain other key employees of the Company and certain
of its subsidiaries pursuant to the Inland 1995 Incentive Stock Plan (the
"1995 Plan"), the Inland 1992 Incentive Stock Plan (the "1992 Plan"), the
Inland 1988 Incentive Stock Plan (the "1988 Plan"), and the Inland 1984
Incentive Stock Plan (the "1984 Plan"), collectively the "Plans". Each of
the Plans is described below.
Inland 1995 Incentive Stock Plan
The Inland 1995 Incentive Stock Plan was adopted by the Board of
Directors of the Company on January 25, 1995 and was approved by the
stockholders of the Company and became effective on May 24, 1995. The 1995
Plan will continue in effect until terminated by the Board of Directors.
As of September 13, 1995, 457,600 shares were subject to outstanding
options under the 1995 Plan.
The purpose of the 1995 Plan is to attract and retain outstanding
individuals as officers and key employees of the Company and its
subsidiaries (which term includes partnerships, joint ventures or other
business entities in which the Company owns or controls, directly or
indirectly, a 50% or greater interest (a "Subsidiary")), and to furnish
incentives to such individuals through rewards based upon the ownership and
performance of the Common Stock of the Company. To this end, the Committee
(hereinafter defined) may grant stock options, stock appreciation rights,
restricted stock awards and performance awards, or combinations thereof, to
such officers and key employees.
The 1995 Plan is administered by the Compensation Committee (the
"Committee") of the Board of Directors of the Company. Each member of the
Committee is a director of the Company. The mailing address of each member
of the Committee is the same as the address of the Company. No member of
the Committee shall be eligible to receive any grant, or shall have been
eligible to receive any grant for at least one year prior to becoming a
member, under the 1995 Plan or any other discretionary stock option, stock
appreciation rights or other incentive stock plan for employees of the
Company or any Subsidiary of the Company. Members of the Committee are
elected annually, and are subject to removal, by the Board of Directors of
the Company.
Subject to the provisions of the 1995 Plan, the Committee has authority
(i) to determine which employees of the Company and its Subsidiaries shall
be eligible for participation in the 1995 Plan; (ii) to select employees to
receive grants under the 1995 Plan; (iii) to determine the form of grant,
whether as a stock option, stock appreciation right, restricted stock
award, performance award, or a combination thereof, the number of shares or
units subject to the grant, the time and conditions of exercise or vesting,
the fair market value of the Common Stock of the Company for purposes of
the 1995 Plan, and all other terms and conditions of any grant; (iv) to
accelerate the time of exercise or vesting of any grant; and (v) to
prescribe the form of agreement, certificate or other instrument evidencing
the grant. The Committee also has authority to interpret the 1995 Plan and
to establish, amend and rescind rules and regulations for the
administration of the 1995 Plan. No person has the right under the 1995
Plan or pursuant to any contract in connection therewith to create a lien
on any securities or other property held under such Plan.
The 1995 Plan provides that the maximum number of shares of Common Stock
which may be issued pursuant to all grants thereunder may not exceed, subject
to adjustment as described below, 2,000,000 plus the number of shares
that remain available for future grants and awards under the 1992 Plan.
General Description
Participants in the 1995 Plan shall consist of such officers and other
key employees of the Company and its Subsidiaries as the Committee may
select from time to time. The Committee selected approximately 200 to 300
individuals annually to participate in the 1992 Plan (described below), and
anticipates that similar numbers of individuals will be selected to
participate in the 1995 Plan. In the discretion of the Committee, such
participants may receive stock options, stock appreciation rights,
restricted stock awards or performance awards, either singly or in
combination. The form and amount of any grant or award, whether measured by
shares of Common Stock or otherwise, as well as the time and conditions of
exercise or vesting and any acceleration of the time of exercise or
vesting, are subject to the discretion of the Committee, provided that no
more than 700,000 shares may be issued pursuant to restricted stock awards
and performance awards under the 1995 Plan. Shares to be issued under the
1995 Plan may be authorized and unissued shares of Common Stock, treasury
Common Stock, or any combination thereof. Except to the extent otherwise
determined by the Committee, any shares subject to a grant or award which
terminates by expiration, cancellation or otherwise without the issuance of
such shares (including shares underlying a stock appreciation right
exercised for stock, to the extent that such underlying shares are not
issued) or which is settled in cash (to the extent so settled) or, in the
case of a restricted stock award, without vesting, shall again be available
for future grants under the 1995 Plan.
The Internal Revenue Code of 1986, as amended (the "Code"), places
limitations on the deductibility, for Federal income tax purposes, of
annual compensation paid to certain executive officers generally designated
as the five most highly compensated officers of the Company on the last day
of the fiscal year of determination (the "Named Executive Officers"). In
order to permit certain grants and awards under the 1995 Plan to be
deductible for Federal income tax purposes, the 1995 Plan limits, except in
the case of awards which by their terms are not intended to comply with
such Code limitations, the maximum number of shares that may be granted or
awarded under the 1995 Plan in any fiscal year of the Company to any
participant under the 1995 Plan to 300,000 and the maximum aggregate cash
payout that may be made under the 1995 Plan in any fiscal year of the
Company to a Named Executive Officer to $1,000,000.
The Board of Directors may amend the 1995 Plan in any respect, or
terminate the 1995 Plan at any time, provided that no amendment may be made
without stockholder approval which would increase the maximum number of
shares available for issuance pursuant to grants under the 1995 Plan. In
addition, no amendment or termination may impair the rights of any
participant under any award or grant previously granted under the 1995 Plan
without the consent of the participant, unless required by law.
The maximum number of shares issuable under the 1995 Plan and the
number, class and/or price of shares or other consideration subject to any
outstanding stock option, stock appreciation right, restricted stock award
or performance award may be appropriately adjusted in accordance with the
1995 Plan by the Committee in the event of any change in corporate
capitalization, such as a stock split, or a corporate transaction, such as
a merger, consolidation, or separation, including a spin-off, or other
distribution of stock or property of the Company or its Subsidiaries (other
than normal cash dividends), and any reorganization or partial or complete
liquidation of the Company or its Subsidiaries.
In the event that a "Change in Control" of the Company, as defined in
the 1995 Plan, occurs, then, with certain exceptions, (1) the value of all
outstanding stock options, stock appreciation rights and restricted stock
awards (whether or not then fully exercisable or vested) shall be cashed
out as of the date the "Change in Control" occurs pursuant to the method
specified in the 1995 Plan (except that stock options or stock appreciation
rights then outstanding for less than six months shall not be cashed out
until six months after their date of grant, and except that the Committee
may provide for the immediate vesting instead of the cashing out of
restricted stock awards in such circumstances as it deems appropriate); and
(2) all outstanding performance awards shall be cashed out as determined by
the Committee.
In order to exercise a stock option or stock appreciation right, a
written notice of intent to exercise such stock option or stock
appreciation right with respect to a specified number of shares must be
delivered, or mailed by postpaid registered mail, to the Treasurer of the
Company at 30 West Monroe Street, Chicago, Illinois 60603. Such written
notice of intent to exercise must be accompanied by contemporaneous payment
of the option purchase price of such number of shares, except as the
Committee may allow in connection with the cashless exercise of options or
exercise of options by other means that the Committee determines to be
consistent with the 1995 Plan's purpose and applicable law. The Committee
has authorized the Treasurer of the Company to designate one or more
securities brokers, in connection with cashless exercises of stock options,
to provide the option exercise price to the Company on behalf of a
participant at a settlement date subsequent to the option exercise date,
rather than require such payment on the date of exercise. The Treasurer
has designated one such securities broker and has provided for the previous
circulation of information to participants on such program.
The Company is entitled to deduct from any payment under the 1995 Plan
the amount of any tax required by law to be withheld with respect to such
payment or may require any participant to pay such amount to the Company
prior to and as a condition of making such payment. The Committee, in its
discretion and subject to such rules as it may adopt from time to time, may
permit a participant to elect to have the Company withhold from any payment
under the 1995 Plan (or to have the Company accept from the participant)
for tax withholding purposes shares of Common Stock of the Company valued
at their fair market value, but in no event shall the fair market value of
the number of shares so withheld (or accepted) exceed the amount necessary
to meet the maximum Federal, state and local marginal tax rates then in
effect that are applicable to the participant and to the particular
transaction.
An optionee or holder of a stock appreciation right or performance
award, as such, has no rights of a stockholder of the Company until the
date of issuance of a stock certificate to such person pursuant to such
stock option, right or award. Upon such issuance, he or she shall have,
with respect to the number of shares of Common Stock issued, all rights of
a stockholder of record from the date of such issuance.
Nothing contained in the 1995 Plan is to be deemed to confer upon any
employee any right of continued employment with the Company or any of its
Subsidiaries or to limit or diminish in any way the right of the Company or
any such Subsidiary to terminate such employee's employment at any time
with or without cause. In addition, neither the adoption of the 1995 Plan
nor any action of the Board of Directors of the Company or of the Committee
is to be deemed to give any employee any right to be selected as a
participant or to be granted a stock option, stock appreciation right,
restricted stock award or performance award under the 1995 Plan.
Except as permitted by the Committee, no stock option, stock
appreciation right, restricted stock award or performance award shall be
transferable except by will or the laws of descent and distribution, and,
during the holder's lifetime, stock options and stock appreciation rights
shall be exercisable only by, and shares subject to restricted stock awards
and payments pursuant to performance awards shall be delivered or made only
to, such holder or such holder's duly appointed legal representative. The
Committee has adopted rules permitting participants (subject in each case
to the Company's rights to impose reasonable requirements on such transfers
regarding administration and compliance with applicable laws, including the
limitations of Section 16(b) of the Exchange Act) to transfer grants and
awards: (1) to a spouse or descendant of the participant; (2) to a trust
for the benefit of the option holder, his or her spouse or descendants; or
(3) as a charitable contribution. This Prospectus relates to the exercise
of options or stock appreciation rights by any such transferees.
Stock Options
Options to purchase shares of Common Stock, including incentive stock
options within the meaning of Section 422 of the Code may be granted under
the 1995 Plan. Each grant of an option under the 1995 Plan may designate
whether the option is intended to be an incentive stock option or a
"nonqualified" stock option. Any option not so designated shall be deemed
to be a "nonqualified" stock option. The Committee will determine the
number of shares subject to each stock option and the time of exercise. No
option, however, shall be exercisable less than six months or more than ten
years after the date of grant. The per share option price shall not be less
than the greater of par value or 100% of the fair market value of a share
of Common Stock at the date of grant. Upon exercise, the option price may
be paid in cash or (unless otherwise prohibited by the Committee) in shares
of Common Stock of the Company having a fair market value equal to the
option price, provided that such shares have been held for at least six
months prior to their tender to pay the option price, or in a combination
thereof. The Committee may also allow the cashless exercise of options by
holders thereof, as permitted under regulations promulgated by the Board of
Governors of the Federal Reserve System, subject to any applicable
restrictions necessary to comply with rules adopted by the Securities and
Exchange Commission, and the exercise of options by holders thereof by any
other means that the Committee determines to be consistent with the 1995
Plan's purpose and applicable law.
To the extent that the aggregate fair market value (determined as of the
time the option is granted) of the Common Stock of the Company with respect
to which incentive stock options are exercisable for the first time by an
employee during any calendar year (under the 1995 Plan or any other plan of
the Company or any of its Subsidiaries) exceeds $100,000, the options will
not be treated as incentive stock options.
If an optionee ceases to be employed by the Company or any of its
Subsidiaries by reason of (i) death, (ii) physical or mental incapacity,
(iii) retirement on or after the normal retirement date provided for in and
pursuant to any pension plan of the Company or any Subsidiary of the
Company in effect at the time of such retirement, or (iv) early retirement
(with the consent of the Committee) provided for in and pursuant to any
such pension plan, any option held by such optionee may be exercised, with
respect to all or any part of the Common Stock of the Company as to which
such option was not theretofore exercised (whether or not such option was
otherwise then exercisable), for such period from and after the date of
cessation of employment (not extending, however, beyond the date of
expiration of such option) as the Committee may determine at the time of
the grant or at any time thereafter. If an optionee ceases to be employed
by the Company or any of its Subsidiaries for any reason other than a
reason set forth in the immediately preceding sentence, any option granted
to such optionee may be exercised for a period ending on the 30th day
following the date of such cessation of employment or the date of
expiration of such option, whichever first occurs, but only with respect to
that number of shares of Common Stock for which such option was exercisable
immediately prior to the date of cessation of employment, except as
otherwise determined by the Committee at the time of grant or at any time
thereafter. The transfer of an employee from the Company to a Subsidiary or
from a Subsidiary to the Company or another Subsidiary of the Company shall
not constitute a termination of employment or an interruption of continuous
employment for the purposes of the 1995 Plan.
The agreement or instrument evidencing the grant of an option may
contain such other terms, provisions and conditions not inconsistent with
the 1995 Plan as may be determined by the Committee in its discretion.
Stock Appreciation Rights
Stock appreciation rights may be granted under the 1995 Plan in tandem
with a related stock option or may be granted independently of any stock
option. Rights granted in tandem with or by reference to a related stock
option shall be exercisable only to the extent that the related stock
option is exercisable, provided that except in certain limited
circumstances no such right shall be exercisable prior to the expiration of
six months from the date of grant. The Committee will determine the manner
and time of exercise of rights granted independently of a stock option, but
no such right shall be exercisable less than six months or more than ten
years after the date of grant. In the case of a right granted in tandem
with a related stock option, the grantee may elect to exercise the stock
option or the right (but not both) as to the shares subject to the stock
option and the right. The provisions of the 1995 Plan governing the
exercise of stock appreciation rights upon termination of employment by
reason of death, incapacity, retirement or otherwise are the same as those
governing the exercise of stock options, as described above.
Upon exercise of a stock appreciation right, the holder shall be paid
the excess of the then fair market value of the number of shares of Common
Stock to which the right relates over the fair market value of such number
of shares at the date of grant of the right or of the related stock option,
as the case may be. Such amount shall be paid in cash or in shares of
Common Stock having a fair market value equal to such excess, or in such
combination thereof, as may be provided in the grant of such right (which
may permit the holder to elect between cash and Common Stock or to elect a
combination thereof), or, if no such provision is made in the grant, as the
Committee shall determine upon exercise of the right, provided that, in any
event, the holder shall be paid cash in lieu of any fractional share of
Common Stock to which such holder would otherwise be entitled.
The agreement or instrument evidencing the grant of stock appreciation
rights may contain such other terms, provisions and conditions not
inconsistent with the 1995 Plan as may be determined by the Committee in
its discretion, including such conditions and limitations on the exercise
of stock appreciation rights by any grantee who is subject to Section 16(a)
or Section 16(b) of the Exchange Act as the Committee, in its sole
discretion, deems necessary or desirable for any reason, including for
compliance with Section 16(a) or Section 16(b) and the rules and
regulations thereunder, or to obtain any exemption therefrom.
Inland 1992 Incentive Stock Plan
The Inland 1992 Incentive Stock Plan was adopted by the Board of
Directors of the Company on January 22, 1992, and was approved by
stockholders of the Company, and became effective on April 22, 1992. Upon
approval of the 1995 Plan by stockholders on May 24, 1995, the 1992 Plan
was discontinued except as to outstanding grants. The discontinuance of
the 1992 Plan does not affect the rights of any participant under, or the
authority of the Committee with respect to, any grants or awards made
thereunder prior to such discontinuance. As of September 13, 1995,
1,187,484 shares were subject to outstanding options under the 1992 Plan.
Due to the similarities between the 1995 Plan and the 1992 Plan, only
the significant differences between the two plans are described herein.
General Description
The 1992 Plan provided that the maximum number of shares of Common Stock
that could be issued pursuant to all grants thereunder could not exceed
2,200,000. The number, kind and price of shares or other consideration
subject to any outstanding stock option, stock appreciation right,
restricted stock award or performance award may be appropriately adjusted
in accordance with the 1992 Plan by the Committee to reflect changes in the
capitalization of the Company by reason of stock dividends, stock splits,
spinoffs or other distributions of assets, recapitalizations,
reorganizations, mergers, consolidations, combinations, exchanges or other
relevant changes in corporate structure or capitalization unless such an
adjustment were to have certain effects specified in the 1992 Plan or
incentive stock option agreements.
The 1992 Plan does not restrict the maximum number of shares that may be
granted or awarded under the 1992 Plan in any fiscal year of the Company to
a participant or the maximum annual cash payouts that may be made under the
1992 Plan in any fiscal year of the Company to a Named Executive Officer.
In addition, the 1992 Plan does not restrict the total number of shares
that may be issued under such plan pursuant to restricted stock awards and
performance awards.
Under the 1992 Plan, the minimum period for any stock option, stock
appreciation right, restricted stock award or performance award to become
exercisable, vest or be paid, respectively, is one year. In addition,
under the 1992 Plan, the conditions under which options may be exercised
following cessation of employment by reason of (i) death, (ii) physical or
mental incapacity, (iii) retirement on or after the normal retirement date
provided for in and pursuant to any pension plan of the Company or any
Subsidiary of the Company in effect at the time of such retirement, or (iv)
early retirement (with the consent of the Committee) provided for in and
pursuant to any such pension plan, are as determined by the Committee at
the time of the grant of the option. Furthermore, an optionee who ceases
to be employed for reasons other than as set forth in the immediately
preceding sentence may exercise options for a period of the lesser of 30
days following cessation of employment or through the expiration of the
option, without the possibility of extension of such period by the
Committee at the time of grant or thereafter.
Inland 1988 Incentive Stock Plan
The Inland 1988 Incentive Stock Plan was adopted by the Board of
Directors of the Company on February 24, 1988, and was approved by the
stockholders of the Company, and became effective, on April 27, 1988. Upon
approval of the 1992 Plan by stockholders on April 22, 1992, the 1988 Plan
was discontinued except as to outstanding grants. The discontinuance of
the 1988 Plan does not affect the rights of any participant under, or the
authority of the Committee with respect to, any grants or awards made
thereunder prior to such discontinuance. As of September 13, 1995, 729,546
shares were subject to outstanding options under the 1988 Plan.
Due to the similarities of the 1992 Plan and the 1988 Plan, only the
significant differences between the two plans are described herein.
General Description
The 1988 Plan provided that the maximum number of shares of Common Stock
that could be issued pursuant to all grants thereunder could not exceed
1,700,000 plus such number of shares as was authorized for issuance
pursuant to the 1984 Plan and not issued pursuant to the 1984 Plan.
The number, kind and price of shares or other consideration subject to
any outstanding stock option, stock appreciation right, restricted stock
award or performance award may be appropriately adjusted in accordance with
the 1988 Plan by the Committee to reflect changes in the capitalization of
the Company by reason of stock dividends, stock splits, recapitalizations,
reorganizations, mergers, consolidations, combinations, exchanges or other
relevant changes in capitalization unless such an adjustment were to have
certain effects specified in the 1988 Plan on incentive stock options.
Stock Options
If an optionee ceases to be employed by the Company or any of its
Subsidiaries by reason of (i) death, (ii) physical or mental incapacity,
(iii) retirement on or after the normal retirement date provided for in and
pursuant to any pension plan of the Company or any Subsidiary of the
Company in effect at the time of such retirement, or (iv) early retirement
(with the consent of the Committee) provided for in and pursuant to any
such pension plan, any option held by such optionee may be exercised, with
respect to all or any part of the Common Stock of the Company as to which
such option was not theretofore exercised (whether or not such option was
otherwise then exercisable), for a period ending on the date of expiration
of such option or the third anniversary of the date of such cessation of
employment, whichever first occurs.
Stock Appreciation Rights
Those stock appreciation rights granted under the 1988 Plan in tandem
with a related stock option are exercisable to the extent that the related
stock option is exercisable.
Inland 1984 Incentive Stock Plan
The Inland 1984 Incentive Stock Plan was adopted by the Board of
Directors of Inland Steel Company on January 25, 1984, and was approved by
the stockholders of Inland Steel Company, and became effective, on April
25, 1984. The 1984 Plan was assumed by the Company effective May 1, 1986.
No further grants could be made under the 1984 Plan upon the effectiveness
of the 1988 Plan. However, the discontinuance of the 1984 Plan did not
affect the rights of any participant under, or the authority of the
Committee with respect to, any grants or awards made thereunder prior to
such discontinuance. As of September 13, 1995, 28,560 shares were subject
to outstanding options under the 1984 Plan.
Due to the similarities between the 1984 Plan and the 1988 Plan, only
the significant differences between the 1984 Plan and the 1988 Plan are
described herein.
General Description
The 1984 Plan provided that the maximum number of shares of Common Stock
that could be issued pursuant to all grants thereunder could not exceed
800,000, of which no more than 300,000 shares were to be issued pursuant to
restricted stock awards and performance awards.
The number, kind and price of shares or other consideration subject to
any outstanding stock option, stock appreciation right, restricted stock
award or performance award may be adjusted as deemed appropriate by the
Committee to reflect changes in the capitalization of the Company by reason
of stock dividends, stock splits, recapitalizations, reorganizations,
mergers, consolidations, exchanges or other relevant changes in corporate
structure or capitalization. Unless otherwise determined by the Committee,
all outstanding stock options, stock appreciation rights, restricted stock
awards and performance awards under the 1984 Plan automatically terminate
upon the effective date of the liquidation or dissolution of the Company,
any merger or consolidation in which the Company is not the surviving
corporation or pursuant to which the Common Stock of the Company does not
remain outstanding, or the acquisition by another person of all or
substantially all of the assets of the Company. However, the Committee, in
anticipation of any such event or any similar event, or in the event of:
(i) the acquisition by any person of the beneficial ownership of 25% or
more of the outstanding voting securities of the Company or (ii) any offer
by any person to acquire any voting securities of the Company, which, if
accepted, would result in the beneficial ownership by such person of 25% or
more of the outstanding voting securities of the Company, may accelerate
the time within which such stock options and stock appreciation rights may
be exercised as well as the time of vesting of restricted stock and
performance awards.
Stock Options
The 1984 Plan provides that no incentive stock option granted prior to
January 1, 1987 may be exercised by an optionee while there is outstanding
(within the meaning of Section 422A(c) (7) of the Internal Revenue Code of
1954, as amended (the "1954 Code")) any incentive stock option previously
granted to such optionee to purchase stock in the Company or any Subsidiary
of the Company or in a corporation that is a predecessor to the Company or
any Subsidiary. Section 422(d) of the 1954 Code provides that an option
granted after December 31, 1986 will not be treated as an incentive stock
option to the extent that the aggregate fair market value (determined as of
the time the option is granted) of the Common Stock of the Company with
respect to which incentive stock options are exercisable for the first time
by any individual during any calendar year (under the 1984 Plan or any
other plan of the Company or any of its Subsidiaries) exceeds $100,000.
Under the 1984 Plan if an optionee ceases to be employed by the Company
or any of its Subsidiaries by reason of (i) death, (ii) physical or mental
incapacity, (iii) retirement on or after the normal retirement date
provided for in and pursuant to any pension plan of the Company or any
Subsidiary of the Company in effect at the time of such retirement, or (iv)
early retirement (with the consent of the Company) provided for in and
pursuant to any such pension plan, any option held by such optionee may be
exercised, with respect to all or any part of the Common Stock of the
Company as to which such option was not theretofore exercised (whether or
not such option was otherwise then exercisable), for a period ending on the
date of expiration of such option or the first anniversary of the date of
such cessation of employment, whichever first occurs.
Stock Appreciation Rights
Each stock appreciation right granted under the 1984 Plan relates to a
specific stock option and is exercisable only to the extent that the
related stock option is exercisable. The grantee may elect to exercise the
stock option or the related right (but not both) as to any of the same
shares subject to a stock option and a right. The number of shares that may
be issued pursuant to all grants under the 1984 Plan shall be reduced upon
the exercise of any stock appreciation right by the number of shares paid
out pursuant to such exercise. The provisions of the 1984 Plan governing
the exercise of stock appreciation rights upon termination of employment by
reason of death, incapacity, retirement or otherwise are the same as those
governing the exercise of stock options under the 1984 Plan.
Federal Income Tax Effects
General Description of Federal Income Tax Effects
The 1995 Plan, the 1992 Plan, the 1988 Plan, and the 1984 Plan are not
qualified under Section 401(a) of the Internal Revenue Code or subject to
any provisions of the Employee Retirement Income Security Act of 1974.
This section is not intended to be a complete statement of the Federal
income tax aspects of the 1995 Plan, the 1992 Plan, the 1988 Plan and the
1984 Plan and does not describe the possible effects of state and other
income taxes or of gift, estate and inheritance taxes. Due to the
complexity of various tax laws and their application to particular
circumstances, participants are advised to consult a qualified tax adviser
before taking any action permitted by such Plans.
As of the date of this Prospectus, capital gains generally are taxed at
lower maximum rates than those applicable to ordinary income. The Company
has been advised that an employee who has been granted an incentive stock
option will not realize taxable income and the Company will not be entitled
to a deduction at the time of the grant or exercise of such option. If the
employee makes no disposition of shares acquired pursuant to an incentive
stock option within two years from the date of grant of such option, or
within one year of the transfer of the shares to such employee, any gain or
loss realized on a subsequent disposition of such shares will be treated as
a long-term capital gain or loss. Under such circumstances, the Company
will not be entitled to any deduction for Federal income tax purposes. If
the foregoing holding period requirements are not satisfied, the employee
will generally realize ordinary income at the time of disposition in an
amount equal to the lesser of (i) the excess of the fair market value of
the shares on the date of exercise over the option price or (ii) the excess
of the amount realized upon disposition of the shares, if any, over the
option price, and the Company will be entitled to a corresponding
deduction. In addition, a taxpayer may be required to pay an alternative
minimum tax on the amount of his tax preference items, if such tax exceeds
the tax otherwise due, which amount of minimum tax paid may be available as
a credit in future years to reduce subsequent tax liability. The exercise
of an incentive stock option will generally result in an increase to
alternative minimum taxable income, the basis on which the alternative
minimum tax is computed, in the amount by which the fair market value of
the shares at the time of exercise exceeds the exercise price.
An employee will not realize taxable income at the time of the grant of
an option which does not qualify as an incentive stock option. Upon
exercise, however, of such non-qualified stock option, the employee will
realize ordinary income in an amount measured by the excess, if any, of the
fair market value of the shares on the date of exercise over the option
price, and the Company will be entitled to a corresponding deduction. Upon
a subsequent disposition of such shares, the employee will realize
short-term or long-term capital gain or loss, with the basis for computing
such gain or loss equal to the option price plus the amount of ordinary
income realized upon exercise.
An employee will not realize taxable income at the time of the grant of
a stock appreciation right. Upon exercise, however, such employee will
realize ordinary income measured by the difference between the fair market
value of the Common Stock of the Company on the applicable date of grant
and the fair market value of such stock on the date of exercise. The
Company will be entitled to a corresponding deduction in the year of
exercise.
Any acceleration of the payment of grants and awards under the 1995
Plan, the 1992 Plan, the 1988 Plan or the 1984 Plan, in the event of a
change in control in the Company, may cause part or all of the
consideration involved to be treated as an "excess parachute payment" under
the Code, which may subject the participant to a 20% excise tax and which
may not be deductible by the Company. A deduction otherwise available to
the Company for any year with respect to compensation payable to a Named
Executive Officer may be denied to the extent that it exceeds $1 million.
For these purposes, restricted stock grants and performance awards under
the 1995 Plan may under certain circumstances qualify for, and it is
anticipated that grants of options and stock appreciation rights will
generally qualify for, an exception to that limitation for eligible
performance-based compensation.
Payment of Option Price with Shares of Company Common Stock
Under proposed regulations, the exercise of an incentive stock option
through the exchange of previously acquired stock will generally be treated
as a non-taxable like-kind exchange as to the number of shares given up and
the identical number of shares received under the option. That number of
shares will take the same basis and, for capital gains purposes, the same
holding period as the shares which are given up. However, such holding
period will not be credited for purposes of the one-year holding period
required for the new shares to receive incentive stock option treatment.
Shares received upon such an exchange which are in excess of the number of
shares given up will have a new holding period and, if cash was paid in
addition to the shares exchanged, a basis equal to the amount of such cash.
If a disqualifying disposition (a disposition before the end of the
applicable holding period) occurs with respect to any of the shares
received from the exchange, it will be treated as a disqualifying
disposition of the shares with the lowest basis.
If the exercise price of an incentive stock option is paid with shares
of stock of the Company acquired through a prior exercise of an incentive
stock option, gain will be realized on the shares given up (and will be
taxed as ordinary income) if those shares have not been held for the
minimum holding period (two years from the date of grant and one year from
the date of transfer), but the exchange will not affect the tax treatment,
as described in the immediately preceding paragraph, of the shares
received.
The exercise of a stock option which is not an incentive stock option
through the delivery of previously acquired stock will generally be treated
as a non-taxable like-kind exchange as to the number of shares surrendered
and the identical number of shares received under the option. That number
of shares will take the same basis and, for capital gains purposes, the
same holding period as the shares which are given up. The value of the
shares received upon such an exchange which are in excess of the number
given up will be taxed to the employee at the time of the exercise as
ordinary income. The excess shares will have a new holding period for
capital gains purposes and a basis equal to the value of such shares
determined at the time of exercise.
Employees Subject to Section 16(b) of the Exchange Act
For an employee who is subject to the short-swing profit liability
provisions of Section 16(b) of the Exchange Act, the tax effects described
below differ from those discussed above. If the sale of shares of Company
Common Stock acquired pursuant to the exercise of a stock appreciation
right or an option which is not an incentive stock option would subject the
employee to suit under Section 16(b) of the Exchange Act, the employee
would include in income, and the Company would be entitled to deduct, as of
the first day on which the sale of the shares would not subject the
employee to suit under Section 16(b) of the Exchange Act or at the end of a
period of six months following the date of such exercise, whichever is
earlier, the difference between the fair market value of the shares at that
time and the option price. For purposes of determining whether the employee
would have long-term or short-term capital gain upon the subsequent sale of
the shares, the holding period would begin to run on the date the employee
recognizes taxable income.
An employee who is subject to the limitations imposed by Section 16(b)
of the Exchange Act and who has received shares of stock pursuant to the
exercise of a stock appreciation right or an option which is not an
incentive stock option may, by filing an election with the Internal Revenue
Service within 30 days of the date the shares are transferred to him, elect
to be taxed as if the limitations of Section 16(b) did not apply to him. If
such an election is made, the Company will be entitled, as of the date of
exercise, to a deduction equal to the amount the employee recognizes as
income. Any subsequent disposition of the shares will result in capital
gain or loss with the holding period beginning on such date. In determining
the amount of gain or loss, the employee's basis will be the fair market
value of the shares at such date.
Withholding of Taxes
The Company is entitled to deduct from any payment under each of the
1995 Plan, the 1992 Plan, the 1988 Plan, and the 1984 Plan the amount of
any tax required by law to be withheld with respect to such payment or may
require any participant to pay such amount to the Company prior to and as a
condition of making such payment. The Committee, in its discretion and
subject to such rules as it may adopt from time to time, has adopted rules
to permit each participant to elect to have the Company withhold from any
payment under such Plans (or to have the Company accept from the
participant) for tax withholding purposes shares of Common Stock of the
Company valued at their fair market value, but in no event shall the fair
market value of the number of shares so withheld (or accepted) exceed the
amount necessary to meet the maximum Federal, state and local marginal tax
rates then in effect that are applicable to the participant and to the
particular transaction. Any election must be made in writing on or before
the date when the amount of taxes to be withheld is determined (with
additional restrictions as to the manner and timing of such elections
applying to participants subject to Section 16(b) of the Exchange Act). If
shares of Company Common Stock are withheld or delivered to satisfy all or
a portion of the withholding obligation (or a withholding election of any
participant), the portion of the withholding obligation (or election) that
is so satisfied will be equal to the fair market value of the shares
withheld or delivered, using the fair market value of the Company Common
Stock on the date when the amount of taxes to be withheld is determined,
or, if the stock is not traded on the New York Stock Exchange Composite
Transactions on such date, then on the next preceding date on which such
stock was so traded.
The Code treats the use of shares of Company Common Stock to satisfy any
withholding requirement (or election) as a sale of such shares for an
amount equal to the fair market value of the stock on the date when the
amount of taxes to be withheld is determined. The disposition of such
shares may result in the recognition of gain or loss by the participant for
tax purposes. If Company Common Stock acquired pursuant to any of the Plans
is used to satisfy any withholding requirement (or election), such use will
be subject to the Federal income tax consequences described under "General
Description of Federal Income Tax Effects" and "Payment of Option Price
with Shares of Company Common Stock," above.
Transferred Options
Neither the employee nor the transferee will realize taxable income at
the time of a non-arm's length transfer of a non-qualified stock option.
Upon the subsequent exercise of the option by the transferee, the employee
will realize ordinary income in an amount measured by the difference
between the fair market value of the shares on the date of exercise and the
option price, and the Company will generally be entitled to a corresponding
deduction. Upon a subsequent disposition of the shares by the transferee,
the transferee will generally realize short-term or long-term capital gain
or loss, with the basis for computing such gain or loss equal to the fair
market value of the stock at the time of exercise.
The tax rules governing the Federal income tax effects of the non-arm's
length transfer of a stock appreciation right are unclear. Based on the
tax treatment of transferable options, however, it appears that the
employee may be required to realize ordinary income when the transferee
exercises the stock appreciation right in an amount measured by the
difference between the fair market value of the stock on the date grant and
the fair market value on the date of exercise and that the Company would
generally be entitled to a corresponding deduction at that time.
If an employee makes a gift of an option, the gift should be complete
for Federal gift tax purposes at the time of transfer and should be valued
at that time. For estate tax purposes, the gift of an option would
generally cause the option (and the stock acquired by exercise) to be
excluded from the employee's estate. Special rules may apply if the
employee makes a gift of an award to a charity or to a "living trust" under
which the employee retained the right to revoke the trust or substantially
alter its terms.
Additional Information Regarding The Plans
This document summarizes and explains the 1995 Plan, the 1992 Plan, the
1988 Plan, and the 1984 Plan, but does not contain the text of such Plans.
In the event of any conflict between this or any other summary of such
Plans, the text of the applicable Plan will control. A full copy of each
of the 1995 Plan, the 1992 Plan, the 1988 Plan, and the 1984 Plan and
additional information about those Plans and their administration may be
requested from the Treasurer, Inland Steel Industries, Inc., 30 West Monroe
Street, Chicago, Illinois 60603; (312) 899-3132. Additional information
with respect to the 1995 Plan, the 1992 Plan, the 1988 Plan, and the 1984
Plan and the shares of Common Stock covered hereby may be provided from
time to time to participants and their transferees by means of appendices
to this Prospectus or by an amended Prospectus.
DESCRIPTION OF CAPITAL STOCK AND VOTING NOTE
The following statements are summaries of certain provisions of the
Certificate of Incorporation and the By-Laws of the Company, of the 10.23%
Subordinated Voting Note (the "Exchange Note") and of the Rights Agreement,
dated as of November 25, 1987, as amended and restated as of May 24, 1989
(the "Rights Agreement") between the Company and The First National Bank of
Chicago, as Rights Agent (Harris Trust and Savings Bank, as successor
Rights Agent). Such summaries do not purport to be complete and are subject
to, and are qualified in their entirety by reference to, all of the
provisions of the Certificate of Incorporation, the By-Laws, the Exchange
Note and the Rights Agreement, including the definitions therein of certain
terms. Copies of the Certificate of Incorporation, the By-Laws, the
Exchange Note and the Rights Agreement are incorporated by reference as
exhibits to the Registration Statement of which this Prospectus is a part.
General
The Certificate of Incorporation authorizes the issuance of 100,000,000
shares of Common Stock, $1.00 par value per share (the "Common Stock"), and
15,000,000 shares of Preferred Stock, $1.00 par value per share (the
"Preferred Stock"), in one or more series. On September 13, 1995, there
were 48,693,864 shares of Common Stock (not including the 500,000 shares of
Common Stock offered hereby), 94,202 shares of Series A Preferred Stock and
3,107,100 shares of Series E Preferred Stock outstanding. The Company
previously redeemed the outstanding shares of Series B, Series C and Series
G Preferred Stock. See Note 6 of Notes to Consolidated Financial
Statements for the year ended December 31, 1994. On August 1, 1995, the
Company exchanged the full amount of its Series F Exchangeable Preferred
Stock for the Exchange Note in the principal amount of $185,000,000. The
holder of such Exchange Note is entitled to 30.604 votes per $1000 of
principal amount of such Note. The Exchange Note matures in two stages;
$85,000,000 becomes due December 18, 1996 and $100,000,000 becomes due
December 17, 1999. None of the Series D Preferred Stock, which is issuable
under the Rights Agreement, has been issued. All issued and outstanding
shares of Common Stock, Series A Preferred Stock and Series E Preferred
Stock are, and the shares offered hereby upon issuance pursuant to the
terms of the Plans will be, fully paid and non-assessable. The number of
authorized shares of Preferred Stock may be increased or decreased by the
affirmative vote of the holders of a majority of the Company's capital
stock entitled to vote at a meeting of stockholders. Holders of Common
Stock and Preferred Stock have no preemptive rights to subscribe to any
additional shares of capital stock or securities convertible into capital
stock.
Common Stock
The rights and privileges of the holders of the Common Stock are subject
to the preferential rights and privileges of the holders of any Preferred
Stock, including the outstanding Series A Preferred Stock and Series E
Preferred Stock.
Dividend Rights. Subject to the dividend rights of the holders of
Preferred Stock, including the dividend rights of holders of Series A
Preferred Stock and Series E Preferred Stock described below, the holders
of shares of Common Stock are entitled to receive dividends thereon out of
funds legally available therefor if and when declared payable by the
Company's Board of Directors.
Dividend Limitations. Under the terms of the currently outstanding
Preferred Stock, the Company may not pay any dividends or make any other
distribution on its Common Stock (other than dividends or distributions in
stock ranking junior to the Series A Preferred Stock or the Series E
Preferred Stock, as the case may be, as to dividends and on liquidation)
unless all dividends accumulated on the Series A Preferred Stock or Series
E Preferred Stock for all then elapsed quarterly dividend periods have been
paid or declared and set apart for payment.
The indenture relating to the 12.75% Notes (the "Indenture") prohibits
the Company from declaring or paying a dividend on the Common Stock if
after giving effect to the payment of such dividend (i) an Event of
Default, or an event that with the giving of notice, lapse of time, or
both, would constitute an Event of Default, shall have occurred and be
continuing or (ii) the aggregate of all Restricted Payments (which term
includes, among other things, dividends or repurchases, redemptions or
other acquisitions of any class of capital stock of the Company, including
the Common Stock) exceeds the sum of (a) 50% of cumulative Consolidated Net
Income for each fiscal year (or, in case the Consolidated Net Income shall
be negative for any fiscal year, less 100% of such deficit) commencing on
or after January 1, 1993 and (b) 100% of the aggregate net proceeds from
the issuance of capital stock of the Company (including the fair market
value of the Common Stock contributed to the Company's Pension Plan in May
1995) and warrants, rights or options to purchase such capital stock after
December 15, 1992, and less the amount of any loan, advance, capital
contribution to or investment in, or payment on a Guarantee of, any
obligation of any Affiliate (with certain exceptions), as such terms are
defined in the Indenture. As a result of the foregoing prohibition, up to
$114 million of cash dividends could have been declared or paid by the
Company for the year ended December 31, 1994.
Voting Rights. The Certificate of Incorporation provides that any
action to be taken by stockholders must be taken at a duly called annual or
special meeting and not by written consent, except that the Board of
Directors, by resolution, may permit holders of the Preferred Stock of the
Company to act by written consent. See "Preferred Stock" below. The
holders of Common Stock vote together with the holders of Series A
Preferred Stock and the Series E Preferred Stock and the Exchange Notes as
one class, except as otherwise provided by the Delaware General Corporation
Law or the Certificate of Incorporation. In general, separate votes will
be required on matters that affect one or more but not all of such classes
or series. The holders of Common Stock and Series A Preferred Stock are
entitled to one vote for each share held. The holder of the Series E
Preferred Stock is entitled to 1.25 votes per share and the holder of the
Exchange Notes is entitled to 30.604 votes per $1000 in principal amount,
in each case subject to adjustment upon the occurrence of certain events.
None of the holders of Common Stock, Series A Preferred Stock or Series E
Preferred Stock or the Exchange Notes has the right to cumulate votes in
the election of directors.
Liquidation Rights. After the payment of all amounts due upon
liquidation to the holders of stock ranking senior to the Common Stock,
including the Series A Preferred Stock and Series E Preferred Stock, and
the holders of all indebtedness, including the Exchange Note, the holders
of Common Stock are entitled to receive any remaining assets of the Company
available for distribution to its stockholders.
Transfer Agent. The transfer agent and registrar for the Common Stock is
Harris Trust and Savings Bank, Chicago, Illinois.
Preferred Stock
The Company's Board of Directors is authorized to create and issue one
or more series of Preferred Stock and determine the rights and preferences
of each series, to the extent permitted by the Certificate of
Incorporation. Among other rights, the Board of Directors shall fix (1)
the number of shares constituting the series and the distinctive
designation of the series; (2) the dividend rate on the shares of the
series, the conditions and dates upon which dividends thereon shall be
payable, the extent, if any, to which dividends thereon shall be
cumulative, and the relative rights of preference, if any, of payment of
dividends thereon; (3) whether or not the shares of the series are
redeemable and, if redeemable, the time or times during which they shall be
redeemable and the amount per share payable on redemption thereof, which
amount may, but need not, vary according to the time and circumstances of
such redemption; (4) the amount payable in respect of the shares of the
series, in the event of any liquidation, dissolution or winding up of the
Company, which amount may, but need not, vary according to the time or
circumstances of such action, and the relative rights of preference, if
any, of payment of such amount; (5) any requirement as to a sinking fund
for the shares of the series, or any requirement as to the redemption,
purchase or other retirement by the Company of the shares of the series;
(6) the right, if any, to exchange or convert shares of the series into
other securities or property, and the rate or basis, time, manner and
condition of exchange or conversion; and (7) the voting rights, if any, to
which the holders of shares of the series shall be entitled in addition to
the voting rights provided by law. Except for any difference so provided
by the Board of Directors, the shares of all series of Preferred Stock
shall rank on a parity with respect to the payment of dividends and to the
distribution of assets upon liquidation.
Series A Preferred Stock
The holders of Series A Preferred Stock are entitled to receive
dividends at the rate of $2.40 per share per annum and, upon any
liquidation, dissolution or winding up of the Company, whether voluntary or
involuntary, to receive, subject to the rights of the holders of any stock
of the Company ranking senior to the Series A Preferred Stock and all
indebtedness, including the Exchange Note, $44.00 per share plus all
dividends accumulated and unpaid thereon. Such shares are convertible into
shares of Common Stock at a rate of one share of Common Stock for one share
of Series A Preferred Stock, subject to adjustments in certain events, and
are redeemable at the option of the Company at any time at $44.00 per share
plus all dividends accumulated and unpaid thereon to the date fixed for
such redemption. The Company may partially redeem its Series A Preferred
Stock even if dividends on that series are in arrears, provided that
cumulative dividends are paid in full on the shares which are redeemed.
The Series A Preferred Stock requires that dividends paid on such series of
Preferred Stock and any other series of Preferred Stock ranking on a parity
therewith as to dividends, if less than the full amount of dividends
accumulated and unpaid on each such series of Preferred Stock, shall be
paid on each such series of Preferred Stock in proportion to the aggregate
amounts of dividends accumulated and unpaid on each such series.
The holders of Series A Preferred Stock vote together with the holders
of Common Stock (and any other shares of capital stock or notes of the
Company entitled to vote at a meeting of stockholders, including the Series
E Preferred Stock, and the Exchange Note) as one class, except as otherwise
provided by the Delaware General Corporation Law or the Company's
Certificate of Incorporation. The vote or consent of a majority of the
outstanding shares of Series A Preferred Stock as a class, together with
all other series of Preferred Stock ranking on a parity with the Series A
Preferred Stock either as to dividends or upon liquidation and which are
affected in such matter in substantially the same manner as the Series A
Preferred Stock with respect to the right to receive dividends or the right
to receive distributions upon liquidation, is required to authorize, create
or issue any class of stock, or any right to convert into or purchase any
class of stock, ranking prior to the Series A Preferred Stock as to
dividends or liquidation rights, or for any merger or consolidation which
would have a similar effect (with certain exceptions).
Series E Preferred Stock
Shares of the Series E Preferred Stock may only be issued to the
Company's Employee Stock Ownership Plan ("ESOP") Trust. In July 1989, the
Company sold 3,086,800 newly issued shares of the Series E Preferred Stock
to the ESOP Trust. Shares of the Series E Preferred Stock entitle the
holder to cumulative annual dividends of $3.523 per share, payable
semi-annually. Upon any liquidation, dissolution or winding up of the
Company, whether voluntary or involuntary, the holder of the Series E
Preferred Stock is entitled to receive, subject to the rights of the
holders of any stock of the Company ranking senior to the Series E
Preferred Stock and all indebtedness, including the Exchange Note, $48.594
per share, plus accrued and unpaid dividends thereon. Shares of Series E
Preferred Stock are convertible into the Company's Common Stock at a rate
of one share of Common Stock for one share of Series E Preferred Stock,
subject to adjustment in certain events. The Series E Preferred Stock may
be redeemed, at the option of the Company, as a whole at any time or from
time to time in part, at a redemption price of $50.003 per share, declining
to $48.594 per share on and after July 7, 1999, plus, in each case, accrued
and unpaid dividends. In addition, upon the occurrence of certain events,
the Company may elect to redeem some, or, in certain circumstances, be
required to redeem all, of the outstanding shares of Series E Preferred
Stock. In certain instances, the Company may elect to pay the redemption
price in cash or shares of Common Stock, based on the fair market value
thereof (as defined), or a combination of both. The Series E Preferred
Stock is entitled to 1.25 votes per share, subject to adjustment upon the
occurrence of certain events. The Series E Preferred Stock votes together
with the Common Stock (and any other shares of capital stock of the Company
entitled to vote at a meeting of stockholders, including the Series A
Preferred Stock, and the holder of the Exchange Notes) on all matters
submitted to a vote of the stockholders of the Company, except as otherwise
provided by the Delaware General Corporation Law or the Company's
Certificate of Incorporation. From time to time, the Company elects to
provide additional shares of Series E Preferred Stock to the ESOP Trust to
cover employee matching requirements not covered by the release of shares
through scheduled principal and interest payments by the ESOP Trust on its
outstanding notes.
Exchange Note
On December 18, 1989, NS Finance III, Inc. ("NS Finance"), a subsidiary
of Nippon Steel Corporation, purchased 185,000 shares of the Company's
Series F Preferred Stock for an aggregate purchase price of $185 million.
Pursuant to the terms of the Series F Preferred Stock, on August 1, 1995,
the Company exchanged the Series F Preferred Stock for the Exchange Note.
The holder of outstanding shares of Series F Preferred Stock received an
Exchange Note with a face amount equal to $1,000 per share of Series F
Preferred Stock held by it on the date of exchange. Upon issuance of the
Exchange Note, the holder of the Exchange Note was deemed to be a
stockholder of the Company, and the Exchange Note was deemed to be shares
of stock, for the purpose of any provision of the Delaware General
Corporation Law that requires the vote of stockholders as a prerequisite to
any corporate action. The Exchange Note bears interest at an annual rate of
10.23%, payable quarterly. The holder of the Exchange Note is entitled to
the same number of votes that it was entitled to as the holder of the
Series F Preferred Stock on the date of the exchange, i.e., 30.604 votes
per $1,000 principal amount of Exchange Note.
Stockholder Rights Plan and Series D Preferred Stock
On November 25, 1987, the Company's Board of Directors declared a
dividend distribution of one preferred stock purchase right (a "Right") for
each outstanding share of Common Stock to stockholders of record at the
close of business on December 18, 1987. Each Right entitles the registered
holder to purchase from the Company a unit consisting of one one-hundredth
of a share (a "Unit") of Series D Preferred Stock at a Purchase Price of
$90 per Unit, subject to adjustment. The description and terms of the
Rights are set forth in the Rights Agreement. In the summary below,
capitalized terms are defined as set forth in the Rights Agreement.
The Rights are attached to all Common Stock certificates representing
shares outstanding (including the shares of Common Stock offered hereby),
and no separate Rights Certificates have been distributed. The Rights will
separate from the Common Stock and a Distribution Date will occur upon the
earlier of (i) ten days following a public announcement that a person or
group of affiliated or associated persons (an "Acquiring Person") has
acquired, or obtained the right to acquire, beneficial ownership of 20% or
more of the outstanding shares of Common Stock (the date of the
announcement being the "Stock Acquisition Date"), (ii) ten Business Days
following the commencement of a tender offer or exchange offer that would
result in a person or group beneficially owning 20% or more of such
outstanding shares of Common Stock or (iii) ten Business Days following a
determination by the Board of Directors that a Person is an Adverse Person
(as hereinafter defined). Until the Distribution Date, (i) the Rights will
be evidenced by the Common Stock certificates and will be transferred with
and only with such Common Stock certificates, (ii) new Common Stock
certificates issued after December 18, 1987 will contain a notation
incorporating the Rights Agreement by reference and (iii) the surrender for
transfer of any certificate for Common Stock outstanding will also
constitute the transfer of the Rights associated with the Common Stock
represented by such certificate.
An "Adverse Person" is a Person who beneficially owns at least 10% of
the then outstanding Common Stock and (i) who the Board of Directors
determines intends to cause the Company to repurchase the shares
beneficially owned by such Person or to cause pressure on the Company to
take certain actions not in the long-term best interests of the Company and
its stockholders, or (ii) whose ownership is determined by the Board of
Directors to be reasonably likely to cause a material adverse impact on the
business or prospects of the Company to the detriment of the Company's
stockholders.
The Rights are not exercisable until the Distribution Date and will
expire at the close of business on December 17, 1997, unless earlier
redeemed by the Company as described below.
As soon as practicable after the Distribution Date, Rights Certificates
will be mailed to holders of record of the Common Stock as of the close of
business on the Distribution Date and, thereafter, the separate Rights
Certificates alone will represent the Rights. All shares of Common Stock
issued prior to the Distribution Date, and prior to the expiration or
redemption of the Rights, will be issued with Rights. Shares of Common
Stock issued after the Distribution Date, and prior to the expiration or
redemption of the Rights, will be issued with Rights Certificates if such
shares are issued pursuant to the exercise of stock options or under an
employee benefit plan, or upon the conversion of securities issued after
adoption of the Rights Agreement; provided, however, that (i) no such
Rights Certificate shall be issued if, and to the extent that, the Company
shall be advised by counsel that such issuance would create a significant
risk of material adverse tax consequences to the Company or the Person to
whom such Rights Certificate would be issued, and (ii) no such Rights
Certificate shall be issued if, and to the extent that, appropriate
adjustment shall otherwise have been made in lieu of the issuance thereof.
Except as otherwise determined by the Board of Directors, no other shares
of Common Stock issued after the Distribution Date will be issued with
Rights.
In the event that (i) the Company is the surviving corporation in a
merger with an Acquiring Person and its Common Stock is not changed or
exchanged, (ii) a Person becomes the beneficial owner of 20% or more of the
then outstanding shares of Common Stock (except pursuant to an offer for
all outstanding shares of Common Stock at a price and on terms which the
independent Continuing Directors (as hereinafter defined) determine to be
fair to and otherwise in the best interests of the Company and its
stockholders), (iii) an Acquiring Person engages in one or more
"self-dealing" transactions as set forth in the Rights Agreement, (iv)
during such time as there is an Acquiring Person, an event occurs which
results in such Acquiring Person's ownership interest being increased by
more than 1% (e.g., a reverse stock split), or (v) the Board of Directors
determines that a Person is an Adverse Person, at any time following the
Distribution Date, each holder of a Right will thereafter have the right to
receive, upon exercise of a Right, Common Stock (or, in certain
circumstances, cash, property or other securities of the Company) having a
value equal to two times the Exercise Price of the Right. The Exercise
Price is the Purchase Price multiplied by the number of Units issuable upon
exercise of the Right prior to the events described in this paragraph
(initially, one). Notwithstanding any of the foregoing, following the
occurrence of any of the events set forth in this paragraph, all Rights
that are, or (under certain circumstances specified in the Rights
Agreement) were, beneficially owned by any Acquiring Person or Adverse
Person (or any Associate or Affiliate thereof, as defined in the Rights
Agreement) will be null and void. However, Rights are not exercisable
following the occurrence of any of the events set forth above until such
time as the Rights are no longer redeemable by the Company as set forth
below.
In the event that, at any time following the Stock Acquisition Date, (i)
the Company is acquired in a merger or other business combination transaction
(other than a merger described in the preceding paragraph or a merger which
follows an offer described in the preceding paragraph), or (ii) 50% or more
of the Company's assets or earning power is sold or transferred, each holder
of a Right (except Rights which previously have been voided as set forth
above) shall thereafter have the right to receive, upon exercise, Common
Stock of the acquiring company having a value equal to two times the
Exercise Price of the Right. The events set forth in this paragraph and
in the preceding paragraph are referred to as the "Triggering Events."
The Purchase Price payable, and the number of Units of Series D
Preferred Stock or other securities or property issuable, upon exercise of
the Rights are subject to adjustment from time to time to prevent dilution
(i) in the event of a stock dividend on, or a subdivision, combination or
reclassification of, the Series D Preferred Stock, (ii) if holders of the
Series D Preferred Stock are granted certain rights or warrants to
subscribe for Series D Preferred Stock or convertible securities at less
than the current market price of the Series D Preferred Stock, or (iii)
upon the distribution to holders of the Series D Preferred Stock of
evidences of indebtedness or assets (excluding regular quarterly cash
dividends) or of subscription rights or warrants (other than those referred
to above).
At any time until 15 days following the Stock Acquisition Date, the
Company may redeem the Rights in whole, but not in part, at a price of $.05
per Right, payable, at the option of the Company, in cash, shares of Common
Stock or such other consideration as the Board of Directors may determine.
Under certain circumstances set forth in the Rights Agreement, the decision
to redeem shall require the concurrence of a majority of the Continuing
Directors. After the redemption period has expired, the Company's right of
redemption may be reinstated if each Acquiring Person reduces his
beneficial ownership to 10% or less of the outstanding shares of Common
Stock in a transaction or series of transactions not involving the Company.
Immediately upon the action of the Board of Directors ordering redemption
of the Rights, with, where required, the concurrence of the Continuing
Directors, the Rights will terminate and the only right of the holders of
Rights will be to receive the $.05 redemption price.
The term "Continuing Director" means any member of the Board of
Directors of the Company who was a member of the Board prior to the date of
the Rights Agreement and is not an officer or employee of the Company and
any person who is subsequently elected to the Board if such person is
recommended or approved by a majority of the Continuing Directors and is
not an officer or employee of the Company, but shall not include an
Acquiring Person, or an affiliate or associate of an Acquiring Person, or
any representative of the foregoing entities.
Until a Right is exercised, the holder thereof, as such, will have no
rights as a stockholder of the Company, including, without limitation, the
right to vote or to receive dividends.
Other than those provisions relating to the principal economic terms of
the Rights, any of the provisions of the Rights Agreement may be amended by
the Board of Directors of the Company prior to the Distribution Date. After
the Distribution Date, the provisions of the Rights Agreement may be
amended by the Board of Directors (in certain circumstances, with the
concurrence of the Continuing Directors) in order to cure any ambiguity,
defect or inconsistency, to make changes which do not adversely affect the
interests of holders of Rights (excluding the interests of any Acquiring
Person), or to shorten or lengthen any time period under the Rights
Agreement; provided, however, that no amendment to adjust the time period
governing redemption shall be made at such time as the Rights are not
redeemable. All actions of the Board of Directors, other than those actions
which require the concurrence of the Continuing Directors, will require the
concurrence of Directors who are not officers or employees of the Company.
The Series D Preferred Stock purchasable upon exercise of the Rights
would be subordinate to any other series of the Company's Preferred Stock
currently outstanding or issued in the future. One one-hundredth of a
share of Series D Preferred Stock would be purchasable upon exercise of one
Right. Each whole share of Series D Preferred Stock would have a minimum
preferential quarterly dividend rate equal to the greater of $10 per share
or 100 times the dividend declared on the Common Stock. In the event of
liquidation, the holders of the Series D Preferred Stock would, subject to
the rights of the holders of other series of the Preferred Stock, any other
stock of the Company ranking senior to the Series D Preferred Stock and all
indebtedness, including the Exchange Note, receive a preferred liquidation
payment equal to the greater of $9,000 per share or the equivalent of 100
times the payment made per share of the Common Stock. Each share of Series
D Preferred Stock would have 100 votes, voting together with the Common
Stock, except as Delaware law may otherwise provide. In the event of any
merger, consolidation or other transaction in which shares of Common Stock
are exchanged, each share of Series D Preferred Stock would be entitled to
receive 100 times the amount received per share of Common Stock. The
rights of the Series D Preferred Stock as to dividends and voting, upon
liquidation, and in the event of mergers and consolidations, are protected
by customary antidilution provisions.
The Rights have certain anti-takeover effects. The Rights will cause
substantial dilution to a person or group that attempts to acquire the
Company in a manner that causes the Rights to become exercisable. The
Company believes, however, that the Rights would neither affect any
prospective offeror willing to negotiate with the Board of Directors of the
Company nor interfere with any merger or other business combination
approved by the Board of Directors of the Company.
EXPERTS
The consolidated financial statements as of December 31, 1994 and 1993
and for each of the three years in the period ended December 31, 1994
incorporated by reference in this Prospectus have been so included in
reliance on the report of Price Waterhouse LLP, independent accountants,
given on the authority of said firm as experts in auditing and accounting.
VALIDITY OF SHARES
The validity of the Common Stock offered hereby will be passed upon for
the Company by Mayer, Brown & Platt. George A. Ranney, Jr., Vice President
and General Counsel of the Company, is a partner in Mayer, Brown & Platt
and holds ______ shares of Common Stock and options to acquire an
additional _______ shares of Common Stock of the Company.
PART II
INFORMATION NOT REQUIRED IN PROSPECTUS
Item 14. Other Expenses of Issuance and Distribution.
The following table sets forth the estimated expenses in connection
with the issuance and distribution of the securities registered hereby:
SEC registration fee.................................................. $ 4,192
Legal fees..............................................................20,000
Accounting fees and expenses............................................20,000
Miscellaneous........................................................... 5,808
______
Total.............................................................$50,000
=======
Item 15. Indemnification of Officers and Directors.
(a) The General Corporation Law of Delaware (Section 145) gives
Delaware corporations broad powers to indemnify their present and former
directors and officers and those of affiliated corporations against
expenses incurred in the defense of any lawsuit to which they are made
parties by reason of being or having been such directors or officers,
subject to specified conditions and exclusions; gives a director or officer
who successfully defends an action the right to be so indemnified; and
authorizes the Company to buy directors' and officers' liability insurance.
Such indemnification is not exclusive of any other rights to which those
indemnified may be entitled under any by-laws, agreement, vote of
stockholders or otherwise.
(b) Article Thirteen of the Certificate of Incorporation of the
Company permits, and Article VI of the By-Laws of the Company provides for,
indemnification of directors, officers, employees and agents to the full
extent permitted by law.
(c) The Company maintains directors' and officers' liability insurance
coverage for its directors and officers and those of its subsidiaries and
for certain other executive employees. This coverage insures such persons
against certain losses that may be incurred by them in their respective
capacities as directors, officers or employees, with respect to which they
may or may not be indemnified under the provisions of the Certificate of
Incorporation or By-Laws of the Company or otherwise.
Item 16. Exhibits and Financial Statement Schedules.
See Index to Exhibits included herewith which is incorporated by
reference herein.
Item 17. Undertakings.
(1) The undersigned registrant hereby undertakes:
(a) To file, during any period in which offers or sales are
being made, a post-effective amendment to this registration
statement:
(i) To include any prospectus required by section
10(a)(3) of the Securities Act of 1933;
(ii) To reflect in the prospectus any facts or events
arising after the effective date of the registration
statement (or the most recent post-effective
amendment thereof) which, individually or in the
aggregate, represent a fundamental change in the
information set forth in the registration statement.
Notwithstanding the foregoing, any increase or
decrease in volume of securities offered (if the
total dollar value of securities offered would not
exceed that which was registered) and any deviation
from the low or high end of the estimated maximum
offering range may be reflected in the form of
prospectus filed with the Commission pursuant to Rule
424(b) if, in the aggregate, the changes in volume
and price represent no more than a 20 percent change
in the maximum aggregate offering price set forth in
the "Calculation of Registration Fee" table in the
effective registration statement.
(iii) To include any material information with respect to
the plan of distribution not previously disclosed in
the registration statement;
Provided, however, that paragraphs (a)(i) and (a)(ii) do
not apply if the registration statement is on Form S-3 or
Form S-8, and the information required to be included in a
post-effective amendment by those paragraphs is contained
in periodic reports filed by the registrant pursuant to
section 13 or section 15(d) of the Securities Exchange Act
of 1934 that are incorporated by reference in the
registration statement.
(b) That, for the purpose of determining any liability under
the Securities Act, each such post-effective amendment
shall be deemed to be a new registration statement relating
to the securities offered therein, and the offering of such
securities at that time shall be deemed to be the initial
bona fide offering thereof.
(c) To remove from registration by means of a post-effective
amendment any of the securities being registered which
remain unsold at the termination of the offering.
(2) The undersigned registrant hereby undertakes that, for purposes
of determining any liability under the Securities Act, each filing of the
registrant's annual report pursuant to Section 13(a) or Section 15(d) of
the Exchange Act that is incorporated by reference in this registration
statement shall be deemed to be a new registration statement relating to
the securities offered therein, and the offering of such securities at that
time shall be deemed to be the initial bona fide offering thereof.
(3) Insofar as indemnification for liabilities arising under the
Securities Act may be permitted to directors, officers and controlling
persons of the registrant pursuant to the provisions set forth or described
in Item 15 (except as set forth in paragraphs (c) and (d) therein) of this
Registration Statement, or otherwise, the registrant has been advised that
in the opinion of the Securities and Exchange Commission such
indemnification is against public policy as expressed in the Securities Act
and is, therefore, unenforceable. In the event that a claim for
indemnification against such liabilities (other than the payment by the
registrant of expenses incurred or paid by a director, officer or
controlling person of the registrant in the successful defense of any
action, suit or proceeding, or claims to the extent covered by contracts of
insurance) is asserted by such director, officer or controlling person in
connection with the securities being registered, the registrant will,
unless in the opinion of its counsel the matter has been settled by
controlling precedent, submit to a court of appropriate jurisdiction the
question whether such indemnification by it is against public policy as
expressed in the Securities Act and will be governed by the final
adjudication of such issue.
SIGNATURES
Pursuant to the requirements of the Securities Act, the Company
certifies that it has reasonable grounds to believe that it meets all the
requirements for filing on Form S-3 and has duly caused this amended
Registration Statement to be signed on its behalf by the undersigned,
thereunto duly authorized, in the City of Chicago and State of Illinois on
the 25th day of September, 1995.
INLAND STEEL INDUSTRIES, INC.
By Robert J. Darnall
Robert J. Darnall
Chairman, President and
Chief Executive Officer
Pursuant to the requirements of the Securities Act, this Registration
Statement has been signed below by the following persons in the capacities
indicated on September 25, 1995.
Signature Title
Robert J. Darnall Chairman, President and Chief
Robert J. Darnall Executive Officer and Director
Earl L. Mason Senior Vice President and
Earl L. Mason Chief Financial Officer
(Principal Financial Officer)
James M. Hemphill Controller (Principal Accounting
James M. Hemphill Officer)
A. Robert Abboud Director
James W. Cozad Director
James A Henderson Director
Robert B. McKersie Director
Maurice S. Nelson, Jr. Director By: George A. Ranney, Jr.
George A. Ranney, Jr.
Donald S. Perkins Director Attorney-in-Fact
Joshua I. Smith Director
Nancy H. Teeters Director
Arnold R. Weber Director
EXHIBIT INDEX
Exhibit
Sequential
Number Description Page Number
4.1 Copy of Certificate of Incorporation, as amended, of
the Company. (Filed as Exhibit 3.(i) to the Company's
Quarterly Report on Form 10-Q for the quarter ended
September 30, 1994, and incorporated by reference
herein.)
4.2 Copy of By-laws, as amended, of the Company. (Filed as
Exhibit 3.(ii) to the Company's Annual Report on Form
10-K for the year ended December 31, 1994, and
incorporated by reference herein.)
4.3 Copy of Certificate of Designations, Preferences and
Rights of Series A $2.40 Cumulative Convertible
Preferred Stock of the Company. (Filed as part of
Exhibit B to the definitive Proxy Statement of Inland
Steel Company dated March 21, 1986 that was furnished
to stockholders in connection with the annual meeting
held April 23, 1986, and incorporated by reference
herein.)
4.4 Copy of Certificate of Designation, Preferences and
Rights of Series D Junior Participating Preferred
Stock of the Company. (Filed as Exhibit 4-D to the
Company's Annual Report on Form 10-K for the fiscal
year ended December 31, 1987, and incorporated by
reference herein.)
4.5 Copy of Rights Agreements, dated as of November 25,
1987, as amended and restated as of May 24, 1989,
between the Company and The First National Bank of
Chicago, as Rights Agent (Harris Trust and Savings
Bank, as successor Rights Agent). (Filed as Exhibit
1 to the Company's Current Report of Form 8-K filed
on May 24, 1989, and incorporated by reference
herein.)
4.6 Copy of Certificate of Designations, Preferences and
Rights of Series E ESOP Convertible Preferred Stock of
the Company. (Filed as Exhibit 4-F to the Company's
Quarterly Report on Form 10-Q for the quarter ended
June 30, 1989, and incorporated by reference herein.)
4.7 Copy of Indenture dated as of December 15, 1992,
between the Company and Harris Trust and Savings Bank,
as Trustee, respecting the Company's $150,000,000
12-3/4% Notes due December 15, 2002. (Filed as
Exhibit 4-G to the Company's Annual Report on Form
10-K for the fiscal year ended December 31, 1992, and
incorporated by reference herein.)
4.8 Copy of Subordinated Voting Note Due 1999 in the
amount of $185,000,000 from the Company to NS
Finance III, Inc................................
4.9 Copy of First Mortgage Indenture, dated April 1, 1928,
between Inland Steel Company (the "Steel Company")
and First Trust and Savings Bank and Melvin A.
Traylor, as Trustees, and of supplemental indentures
thereto, to and including the Thirty-Third
Supplemental Indenture, incorporated by reference
from the following Exhibits: (i) Exhibits B-1(a),
B-1(b), B-1(c), B-1(d) and B-1(e), filed with Steel
Company's Registration Statement on Form A-2 (No.
2-1855); (ii) Exhibits D-1(f) and D-1(g), filed with
Steel Company's Registration Statement on Form E-1
(No.2-2182); (iii) Exhibit B-1(h), filed with Steel
Company's Current Report on Form 8-K dated January
18, 1937; (iv) Exhibit B-1(i), filed with Steel
Company's Current Report on Form 8-K, dated February
8, 1937; (v) Exhibits B-1(j) and B-1(k), filed with
Steel Company's Current Report on Form 8-K for the
month of April, 1940; (vi) Exhibit B-2, filed with
Steel Company's Registration Statement on Form A-2
(No. 2-4357); (vii) Exhibit B-1(l), filed with Steel
Company's Current Report on Form 8-K for the month of
January, 1945; (viii) Exhibit 1, filed with Steel
Company's Current Report on Form 8-K for the month of
November, 1946; (ix) Exhibit 1, filed with Steel
Company's Current Report on Form 8-K for the months of
July and August, 1948; (x) Exhibits B and C, filed
with Steel Company's Current Report on Form 8-K for
the month of March, 1952; (xi) Exhibit A, filed with
Steel Company's Current Report on Form 8-K for the
month of July, 1956; (xii) Exhibit A, filed with Steel
Company's Current Report on Form 8-K for the month of
July, 1957; (xiii) Exhibit B, filed with Steel
Company's Current Report on Form 8-K for the month of
January, 1959; (xiv) the Exhibit filed with Steel
Company's Current Report on Form 8-K for the month of
December, 1967; (xv) the Exhibit filed with Steel
Company's Current Report on Form 8-K for the month of
April, 1969; (xvi) the Exhibit filed with Steel
Company's Current Report on Form 8-K for the month of
July, 1970; (xvii) the Exhibit filed with the
amendment on Form 8 to Steel Company's Current Report
on Form 8-K for the month of April, 1974; (xviii)
Exhibit B, filed with Steel Company's Current Report
on Form 8-K for the month of September, 1975; (xix)
Exhibit B, filed with Steel Company's Current Report
on Form 8-K for the month of January, 1977; (xx)
Exhibit C, filed with Steel Company's Current Report
on Form 8-K for the month of February, 1977; (xxi)
Exhibit B, filed with Steel Company's Quarterly Report
on Form 10-Q for the quarter ended June 30, 1978;
(xxii) Exhibit B, filed with Steel Company's
Quarterly Report on Form 10-Q for the quarter ended
June 30, 1980; (xxiii) Exhibit 4-D, filed with Steel
Company's Annual Report on Form 10-K for the fiscal
year ended December 31, 1980; (xxiv) Exhibit 4-D,
filed with Steel Company's Annual Report on Form
10-K for the fiscal year ended December 31, 1982;
(xxv) Exhibit 4-E, filed with Steel Company's Annual
Report on Form 10-K for the fiscal year ended
December 31, 1983; (xxvi) Exhibit 4(i) filed with the
Steel Company's Registration Statement on Form S-2
(No. 33-43393); and (xxvii) Exhibit 4 filed with
Steel Company's Current Report on form 8-K dated
June 23, 1993; and
4.10 Copy of consolidated reprint of First Mortgage
Indenture, dated April 1, 1928, between Inland Steel
Company and First Trust and Savings Bank and Melvin
A. Traylor, as Trustees, as amended and supplemented
by all supplemental indentures thereto, to and
including the Thirteenth Supplemental Indenture.
(Filed as Exhibit 4-E to Form S-1 Registration
Statement No. 2-9443, and incorporated by reference
herein.)
5.1 Opinion of Mayer, Brown & Platt..................
23.1 Consent of Price Waterhouse LLP..................
23.2 The consent of Mayer, Brown & Platt is contained
in their opinion filed as Exhibit 5.1 to this
Registration Statement.
24.1 Powers of Attorney...............................
THIS NOTE HAS NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS
AMENDED, AND MAY BE OFFERED OR SOLD ONLY IF REGISTERED UNDER THE SECURITIES
ACT OF 1933, AS AMENDED, OR IF AN EXEMPTION FROM REGISTRATION IS AVAILABLE.
THIS NOTE IS SUBJECT TO CERTAIN LIMITATIONS ON TRANSFER SET FORTH IN AN
AGREEMENT DATED DECEMBER 18, 1989 AMONG INLAND STEEL INDUSTRIES, INC.,
NIPPON STEEL CORPORATION AND NS FINANCE III, INC. A COPY OF SUCH AGREEMENT
IS ON FILE WITH THE SECRETARY OF INLAND STEEL INDUSTRIES, INC.
SUBORDINATED VOTING NOTE DUE 1999
Chicago, Illinois
August 1, 1995
$185,000,000 10.23%
1. Inland Steel Industries, Inc., a Delaware corporation (the
"Corporation"), for value received, promises to pay to NS Finance III, Inc.
(the "Obligee"), at its principal place of business, or such other place as
the Obligee may designate, in lawful money of the United States of America
in immediately available funds, the principal sum of $185 million in two
installments, of which the first installment shall be due on December 18,
1996 in an amount such that the principal amount of this Note following the
payment of such first installment is no more than the principal amount of
this Note multiplied by a fraction, the numerator of which is 100 and the
denominator of which is 185 and the second installment shall be due on
December 17, 1999 in an amount equal to the then outstanding principal
amount of this Note.
2. The unpaid principal amount hereof shall bear interest from
the date hereof at a rate per annum equal to 10.23% and interest shall
accrue (to the extent that the payment of such interest shall be legally
enforceable) at 12.23% per annum on any overdue installment of principal
and on any overdue payment of interest. Accrued interest is payable
quarterly (2.5575% per quar-ter) in arrears on February 1, May 1, August 1
and November 1 of each year (each an "Interest Payment Date"), commencing
with the February 1, May 1, August 1 or November 1, as the case may be,
following the date hereof until all unpaid principal under this Note is
paid in full. In the event that any Interest Payment Date shall fall on
any day other than a Business Day (as defined in paragraph 11 hereof) the
interest payment due on such Interest Payment Date shall be made on the
Business Day immediately following such Interest Payment Date. Interest
for any period less than a full quarterly period between Interest Payment
Dates shall be computed at a daily rate of .02803%; provided, however, that
with respect to an interest payment payable on the date installments of
this Note are required to be paid on December 18, 1996 and December 17,
1999, the interest payment shall be equal to 1.32% and 1.29%, respectively,
of the principal installment due on such date.
3. (a) Obligee shall be entitled to 30.604 votes per $1,000 of
principal amount of this Note, which votes shall be adjusted as provided in
this paragraph 3 (and as so adjusted to the nearest one one-thousandths of
a vote is hereinafter sometimes referred to as the "Vote Amount"). Except
as otherwise provided herein or required by law, the Obligee shall be
entitled to vote on all matters submitted to a vote of stockholders of the
Corporation, voting together with holders of Common Stock (as defined in
paragraph 11 hereof) (and any class or series of capital stock or other
securities of the Corporation entitled to vote at a meeting of
stockholders) as one class.
(b) In the event the Corporation shall, at any time or
from time to time while this Note is out-standing, (i) pay a dividend or
make a distribution in respect of the Common Stock in shares of Common
Stock, (ii) subdivide the outstanding shares of Common Stock, or (iii)
combine the outstanding shares of Common Stock into a smaller number of
shares, in each case whether by reclassification of shares,
recapitalization of the Corporation or otherwise, subject to the provisions
of subparagraphs (f) and (g) of this paragraph 3, the Vote Amount in effect
immediately prior to such action shall be adjusted by multiplying such Vote
Amount by a fraction, the numerator of which is the number of shares of
Common Stock outstanding immediately after such event, and the denominator
of which is the number of shares of Common Stock outstanding immediately
before such event. An adjustment made pursuant to this subparagraph (b)
shall be given effect, upon payment of such a dividend or distribution, as
of the record date for the determination of stockholders entitled to
receive such dividend or distribution (on a retroactive basis) and in the
case of a subdivision or combination shall become effective immediately as
of the effective date thereof.
(c) In the event that the Corporation shall, at any time
or from time to time while this Note is outstanding, issue to holders of
shares of Common Stock as a dividend or distribution, including by way of a
reclassification of shares or a recapitalization of the Corporation, any
right or warrant to purchase shares of Common Stock (but not including as
such a right or warrant (i) any security convertible into or exchangeable
for shares of Common Stock or (ii) any Rights (as defined in paragraph 11
hereof)) at a purchase price per share less than the Fair Market Value (as
defined in paragraph 11 hereof) of a share of Common Stock on the date of
issuance of such right or warrant, then, subject to subparagraphs (f) and
(g) of this paragraph 3, the Vote Amount shall be adjusted by multiplying
such Vote Amount by a fraction, the numerator of which shall be the number
of shares of Common Stock outstanding immediately before such issuance of
rights or warrants plus the maximum number of shares of Common Stock that
could be acquired upon exercise in full of all such rights and warrants,
and the denominator of which shall be the number of shares of Common Stock
outstanding immediately before such issuance of rights or warrants plus the
number of shares of Common Stock which could be purchased at the Fair
Market Value of a share of Common Stock at the time of such issuance for
the maximum aggregate consideration payable upon exercise in full of all
such rights or warrants.
(d) In the event the Corporation shall, at any time or
from time to time while this Note is outstanding, issue, sell or exchange
shares of Common Stock (other than pursuant to (i) any right or warrant to
purchase or acquire shares of Common Stock (including as such a right or
warrant any security convertible into or exchangeable for shares of Common
Stock), (ii) any Rights and (iii) any employee or director incentive or
benefit plan or arrangement, including any employment, severance or
consulting agreement, of the Corporation or any subsidiary of the
Corporation heretofore or hereafter adopted) for a consideration having a
Fair Market Value, on the date of such issuance, sale or exchange, less
than the Fair Market Value of such shares on the date of issuance, sale or
exchange, then, subject to subparagraphs (f) and (g) of this paragraph 3,
the Vote Amount shall be adjusted by multiplying such Vote Amount by a
fraction the numerator of which shall be the product of (A) the Fair Market
Value of a share of Common Stock on the day immediately preceding the first
public announcement of such issuance, sale or exchange multiplied by (B)
the sum of the number of shares of Common Stock outstanding on such day
plus the number of shares of Common Stock so issued, sold or exchanged by
the Corporation and the denominator of which shall be the sum of (i) the
Fair Market Value of all the shares of Common Stock outstanding on the day
immediately preceding the first public announcement of such issuance, sale
or exchange plus (ii) the Fair Market Value of the consideration received
by the Corporation in respect of such issuance, sale or exchange of shares
of Common Stock. In the event the Corporation shall, at any time or from
time to time while this Note is outstanding, issue, sell or exchange any
right or warrant to purchase or acquire shares of Common Stock (including
as such a right or warrant any security convertible into or exchangeable
for shares of Common Stock) (other than any such issuance (i) to holders of
shares of Common Stock as a dividend or distribution (including by way of a
reclassification of shares or a recapitalization of the Corporation), (ii)
pursuant to any employee or director incentive or benefit plan or
arrangement (including any employment, severance or consulting agreement)
of the Corporation or any subsidiary of the Corporation heretofore or
hereafter adopted and (iii) of Rights), for a consideration having a Fair
Market Value, on the date of such issuance, sale or exchange, less than the
Non-Dilutive Amount (as defined in paragraph 11 hereof), then, subject to
subparagraphs (f) and (g) of this paragraph 3, the Vote Amount shall be
adjusted by multiplying such Vote Amount by a fraction the numerator of
which shall be the product of (i) the Fair Market Value of a share of
Common Stock on the day immediately preceding the first public announcement
of such issuance, sale or exchange multiplied by (ii) the sum of the number
of shares of Common Stock outstanding on such day plus the maximum number
of shares of Common Stock which could be acquired pursuant to such right or
warrant at the time of the issuance, sale or exchange of such right or
warrant (assuming shares of Common Stock could be acquired pursuant to such
right or warrant at such time), and the denominator of which shall be the
sum of (i) the Fair Market Value of all the shares of Common Stock
outstanding on the day immediately preceding the first public announcement
of such issuance, sale or exchange plus (ii) the Fair Market Value of the
consideration received by the Corporation in respect of such issuance, sale
or exchange of such right or warrant plus (iii) the Fair Market Value at
the time of such issuance of the consideration which the Corporation would
receive upon exercise in full of all such rights or warrants.
(e) In the event the Corporation shall, at any time or
from time to time while this Note is out-standing, make an Extraordinary
Distribution (as defined in paragraph 11 hereof) in respect of the Common
Stock, whether by dividend, distribution, reclassification of shares or
recapitalization of the Corporation or effect a Pro Rata Repurchase (as
defined in paragraph 11 hereof) of Common Stock, the Vote Amount in effect
immediately prior to such Extraordinary Distribution or Pro Rata Repurchase
shall, subject to subparagraphs (f) and (g) of this paragraph 3, be
adjusted by multiplying such Vote Amount by a fraction the numerator of
which shall be the product of (i) the number of shares of Common Stock
out-standing immediately before such Extraordinary Distribution or Pro Rata
Repurchase minus, in the case of a Pro Rata Repurchase, the number of
shares of Common Stock repurchased by the Corporation multiplied by (ii)
the Fair Market Value of a share of Common Stock on the day before the
ex-dividend date with respect to an Extraordinary Distribution which is
paid in cash and on the distribution date with respect to an Extraordinary
Distribution which is paid other than in cash, or on the applicable
expiration date (including all extensions thereof) of any tender offer (or
exchange offer) which is a Pro Rata Repurchase or on the date of purchase
with respect to any Pro Rata Repurchase which is not a tender offer (or
exchange offer), as the case may be, and the denominator of which is the
difference between (i) the product of (x) the number of shares of Common
Stock outstanding immediately before such Extraordinary Distribution or Pro
Rata Repurchase multiplied by (y) the Fair Market Value of a share of
Common Stock on the day before the ex-dividend date with respect to an
Extraordinary Distribution which is paid in cash and on the distribution
date with respect to an Extraordinary Distribution which is paid other than
in cash, or on the applicable expiration date (including all extensions
thereof) of any tender offer (or exchange offer) which is a Pro Rata
Repurchase, or on the date of purchase with respect to any Pro Rata
Repurchase which is not a tender offer (or exchange offer), as the case may
be, and (ii) the Fair Market Value of the Extraordinary Distribution or the
aggregate purchase price of the Pro Rata Repurchase, as the case may be.
(f) Notwithstanding any other provisions of this paragraph
3, the Corporation shall not be required to make any adjustment to the Vote
Amount unless such adjustment would require an increase or decrease of at
least one percent (1%) in the Vote Amount. Any lesser adjustment shall be
carried forward and shall be made no later than the time of, and together
with, the next sub-sequent adjustment which, together with any adjustments
so carried forward, shall amount to an increase or decrease of at least one
percent (1%) in the Vote Amount.
(g) If the Corporation shall make any dividend or
distribution on the Common Stock or issue any Common Stock, other capital
stock or other security of the Corporation or any rights or warrants to
purchase or acquire any such security, which transaction does not result in
an adjustment to the Vote Amount pursuant to the foregoing provisions of
this paragraph 3, the Board of Directors shall consider whether such action
is of such a nature that an adjustment to the Vote Amount should equitably
be made in respect of such transaction. If in such case the Board of
Directors determines that an adjustment to the Vote Amount should be made,
an adjustment shall be made effective as of such date, as determined by the
Board of Directors. The determination of the Board of Directors as to
whether an adjustment to the Vote Amount should be made pursuant to the
foregoing provisions of this subparagraph (g), and, if so, as to what
adjustment should be made and when, shall be final and binding on the
Corporation, the stockholders of the Corporation and the Obligee.
(h) Whenever an adjustment to the Vote Amount and the
related voting rights of this Note is required pursuant to this paragraph
3, the Corporation shall forthwith place on file with the Secretary of the
Corporation a statement signed by two officers of the Corporation stating
the adjusted Vote Amount determined as provided in this paragraph 3. Such
statement shall set forth in reasonable detail such facts as shall be
necessary to show the reason and the manner of computing such adjustment,
including any determination of Fair Market Value involved in such
computation. Promptly after each adjustment to the Vote Amount, the
Corporation shall mail a notice thereof to the Obligee.
4. (a) Upon notice of a Change in Control, an ISC Business
Transfer or a Steel Company Stock Purchase (each as defined in paragraph 11
hereof) having been given to the Obligee pursuant to this subparagraph (a)
and for a period of thirty (30) days thereafter, subject to the provisions
of this subparagraph (a), the Obligee, at its option, may require the
Corporation to purchase this Note for cash or shares of Common Stock (the
number of which shall be determined as provided in subparagraph (i) of this
paragraph 4) at a price equal to the sum of (i) the outstanding principal
amount on the date of purchase, (ii) ten percent (10%) of such principal
amount, (iii) accrued interest as to the date of purchase and (iv) the
Breakage Amount (as defined in paragraph 11 hereof). Such purchase price
shall be paid by the Corporation no later than thirty (30) days after the
Corporation has been given notice that the Obligee requires the Corporation
to purchase this Note under this paragraph. Notwithstanding the above, the
Obligee shall have the right to require the Corporation to purchase this
Note under this subparagraph (a) only if all holders of the Subordinated
Notes require the Corporation to do so. Upon the occurrence of a Change on
Control, an ISC Business Transfer or a Steel Company Stock Purchase, the
Corporation shall deliver to Obligee within ten (10) days thereafter a
notice informing Obligee of such event.
(b) In the event the Corporation fails to make an interest
payment on an Interest Payment Date and such failure continues for a period
of at least thirty (30) days following such Interest Payment Date and until
all accrued and unpaid interest shall be paid, the Obligee, at its option,
may require the Corporation to purchase this Note for cash or shares of
Common Stock (the number of which shall be determined as provided in
subparagraph (i) of this paragraph 4) at a price equal to the sum of (i)
the outstanding principal amount on the date of purchase, (ii) the accrued
interest to the date of purchase (calculated from the Interest Payment Date
in accordance with paragraph 2 hereof on the overdue interest) and (iii)
the Breakage Amount. Such purchase price shall be paid by the Corporation
no later than thirty (30) days after the Corporation has been given notice
that the Obligee requires the Corporation to purchase this Note under this
paragraph. Notwithstanding the above, the Obligee shall have the right to
require the Corporation to purchase this Note under this subparagraph (b)
only if all holders of the Subordinated Notes require the Corporation to do
so.
(c) Upon (i) notice of this 5% Event (as defined in
paragraph 11 hereof) having been given to the Obligee pursuant to the
provisions of this subparagraph (c) and for a period of thirty (30) days
thereafter or (ii) notice of a Significant Stock Acquisition (as defined in
paragraph 11 hereof) having been given to the Obligee pursuant to the
provisions of this subparagraph (c) and for so long as the Obligee is not
permitted to purchase Voting Securities of the Corporation but in no event
longer than a period of thirty days after such notice has been given,
Obligee, at its option, may require the Corporation to purchase this Note
for cash or shares of Common Stock (the number of which shall be determined
as provided in subparagraph (i) of this paragraph 4) at a price equal to
the sum of (i) the outstanding principal amount on the date of purchase,
(ii) the accrued interest to the date of purchase and (iii) the Breakage
Amount. Such purchase price shall be paid by the Corporation no later than
thirty (30) days after the Corporation has been given notice that the
Obligee requires the Corporation to purchase this Note under this
paragraph. Notwithstanding the above, the Obligee shall have the right to
require the Corporation to purchase this Note under this subparagraph (c)
only if all holders of the Subordinated Notes require the Corporation to do
so. Upon the 5% Event or a Significant Stock Acquisition, the Corporation
shall deliver to the Obligee within ten (10) days thereafter a notice
stating that such event has occurred.
(d) Upon notice of a Consolidated Tangible Net Worth Event
(as defined in paragraph 11 hereof) having been given to Obligee pursuant
to this subparagraph (d) and until Obligee has been given notice by the
Corporation that the Consolidated Tangible Net Worth is greater than $700
million, the Obligee, at its option, may require the Corporation to
purchase this Note for cash or shares of Common Stock (the number of which
shall be determined as provided in subparagraph (i) of this paragraph 4) at
a price equal to the sum of (i) the outstanding principal amount on the
date of purchase, (ii) the accrued interest to the date of purchase and
(iii) the Breakage Amount. Such purchase price shall be paid by the
Corporation no later than thirty (30) days after the Corporation has been
given notice that the Obligee requires the Corporation to purchase this
Note under this paragraph. Notwithstanding the above, the Obligee shall
have the right to require the Corporation to purchase this Note under this
subparagraph (d) only if all holders of the Subordinated Notes require the
Corporation to do so. Upon the occurrence of a Consolidated Tangible Net
Worth Event, the Corporation shall be required to deliver to Obligee a
notice informing Obligee of such event within thirty (30) days thereafter,
if such event occurred on the last day of the first three fiscal quarters,
or sixty (60) days thereafter, if such event occurred on the last day of
the Corporation's fiscal year.
(e) In the event that the Vote Amount is increased
pursuant to the adjustment provisions of paragraph 3 hereof and, as a
result thereof, the Voting Power of the Subordinated Notes exceeds 25% of
the combined Voting Power of the then outstanding Voting Securities and for
so long as the Voting Power of the Subordinated Notes exceeds 25% of the
combined Voting Power of the then outstanding Voting Securities, the
Corporation, at its option, may purchase for cash, in multiples of $1,000,
from time to time, a portion of this Note, on a pro rata basis with all
holders of the Subordinated Notes, at a price equal to the sum of (1) the
outstanding principal amount to be purchased on the date of purchase, (ii)
the accrued interest to the date of purchase and (iii) the Breakage Amount,
such that following such purchase the Voting Power of the Subordinated
Notes will not be less than 24.9% of the combined Voting Power of the then
outstanding Voting Securities. The principal amount of this Note that is
purchased under this subparagraph (e) of paragraph 4 shall be deemed, if
such purchase occurs on or before December 18, 1996, to satisfy on a
Proportionate Basis (as defined in paragraph 11 hereof) the obligation of
the Corporation to pay an installment on December 18, 1996 and December 17,
1999 pursuant to paragraph 1 hereof, provided, that if such purchase shall
occur after December 18, 1996, such purchase shall be deemed to satisfy, to
the extent of such purchase, the obligations of the Corporation to pay an
installment on December 17, 1999 pursuant to paragraph 1 hereof.
(f) In the event the Obligee elects to receive Common
Stock in payment for this Note, the Corporation shall have the right to
deliver cash in lieu of any or all of the shares of Common Stock that would
otherwise be required to be delivered. In the event that the Obligee
elects to require the Corporation to purchase this Note pursuant to
subparagraphs (a), (b), (c) or (d) of this paragraph 4 for cash, or the
Corporation elects to deliver cash in lieu of any or all shares of Common
Stock pursuant to the preceding sentence, or the Corporation elects to
purchase a portion of this Note pursuant to subparagraph (e) of this
paragraph 4, and the Corporation fails, for any reason, to pay such cash by
the purchase date set forth in the Corporation's notice to the Obligee and
until the Corporation has paid the purchase price in cash, plus any
interest calculated in accordance with subparagraph (h) of this paragraph
4, the Obligee, at its option, may require, at any time after the required
payment date, that the Corporation purchase all or a portion of this Note,
as the case may be, not otherwise having been paid in cash for shares of
Common Stock (the number of which shall be determined as provided in
subparagraph (i) of this paragraph 4).
(g) Notice of the Corporation's purchase of all or a
portion of this Note pursuant to this paragraph 4 must be given to the
Obligee in accordance with paragraph 9 not less than ten (10) days nor more
than thirty (30) days prior to the date fixed by the Corporation for
payment. Each such notice shall state: (i) the purchase date; (ii) the
purchase price; (iii) the portion of this Note to be purchased; (iv) the
place where this Note is to be surrendered for payment of the purchase
price; (v) the amount of cash and/or the number of shares of Common Stock
that will be delivered to the Obligee on the purchase date; and (vi) that
interest on the portion of the Note to be purchased and (to the extent that
the payment of any such interest is enforceable) on any over-due
installment of interest thereon will cease to accrue on such purchase date.
Failure of the Corporation to give any notice required by this subparagraph
(g) or the formal insufficiency of any such notice shall not prejudice the
rights hereunder to cause the Corporation to purchase this Note. Upon
surrender, all or a portion of this Note, as the case may be, shall be
purchased by the Corporation on the date fixed for purchase and at the
purchase price set forth in such notice.
(h) Notice having been given pursuant to subparagraph (g)
of this paragraph 4, (i) from and after the date specified in such notice
as the date of purchase, unless default shall be made by the Corporation in
providing for the payment of the applicable purchase price plus accrued
interest thereon, all interest on the portion of this Note that is to be
purchased shall cease to accrue, and (ii) from and after the date of
purchase so specified, unless default shall be made by the Corporation as
aforesaid, all rights of the Obligee hereunder with respect to such portion
of this Note (including voting rights), except the right to receive the
applica-ble purchase price, shall cease and terminate. If the Corporation
shall default in providing for all or any portion of the purchase price as
required pursuant to this paragraph 4, the unpaid purchase price shall bear
interest at an annual rate of 12.23%, compounded quarterly, computed on the
basis of a 365-day year for the actu-al number of days elapsed until the
full purchase price plus any interest thereon shall have been paid.
(i) In the event the Obligee requires the Corporation to
issue shares of Common Stock to the Obligee in payment of the purchase
price of all or a portion of this Note and subject to the right of the
Corporation to deliver cash in lieu of any or all of such shares of Common
Stock, the Corporation shall deliver to Obligee a number of shares of
Common Stock equal to (A) the sum of (i) the outstanding principal amount
to be purchased, (ii) accrued interest to the date of purchase, and (iii)
the Breakage Amount, divided by (B) the Fair Market Value of the Common
Stock on the date of purchase of all or a portion of this Note. In lieu of
delivering any fractional share of Common Stock in payment of the purchase
price for all or a portion of this Note, the Corporation may make a cash
payment in respect thereof in any manner permitted by law.
(j) The Obligee upon being entitled to receive Common
Stock in payment of the purchase price of all or a portion of this Note
shall surrender this Note to the Corporation, at the principal executive
office of the Corporation. Upon surrender of this Note, the Corporation
shall issue and send by hand delivery, by courier or by first class mail
(postage prepaid), to the Obligee, at the address designated by the
Obligee, a certificate or certificates for the number of shares of Common
Stock to which the Obligee shall be entitled upon purchase of all or a
portion of this Note and, if applicable, a cash payment in lieu of
fractional shares. In the event that only a portion of this Note is to be
purchased, the Corporation shall authenticate for the Obligee a new Note
equal in principal amount to the unpurchased portion of this Note that is
surrendered pursuant to this subparagraph (j) of paragraph 4. On and after
the effective date of the purchase of all or a portion of this Note, the
Obligee shall be treated for all purposes as the record holder of such
shares of Common Stock, but no allowance or adjustment shall be made in
respect of divi-dends payable to holders of Common Stock in respect of any
period prior to such effective date. Out of its authorized Common Stock,
the Corporation shall at all times reserve and keep available unissued or
treasury shares solely for issuance as payment for this Note free from any
preemptive rights, in such number as shall from time to time be issuable
upon the purchase of this Note. Nothing contained herein shall preclude
the Corporation from issuing shares of Common Stock held in its treasury
pursuant to the terms hereof.
5. In the case of the happening and during the continuance of
the following: (i) the Corporation shall generally not pay its debts as
they become due or shall admit in writing its inability to pay its debts,
or shall make a general assignment for the benefit of creditors; or the
Corporation shall commence any proceeding seeking to have an order for
relief entered on its behalf as debtor or to adjudicate it a bankrupt or
insolvent, or seeking reorganization, arrangement, adjustment, liquidation,
dissolution or composition of it or its debts under any law relating to
bankruptcy, insolvency, reorganization or relief of debtors or seeking
appointment of a receiver, trustee, custodian or other similar official for
it or for all or substantially all of its property or shall file an answer
or other pleading in any such proceeding admitting the material allegations
of any petition, complaint or similar pleading filed against it or
consenting to the relief sought therein; or the Corporation shall take any
action to authorize any of the foregoing; or (ii) any involuntary
proceeding against the Corporation shall be commenced seeking to have an
order for relief entered against it as debtor or to adjudicate it a
bankrupt or insolvent, or seeking reorganization, arrangement, adjustment,
liquidation, dissolution or composition of it or its debts under any law
relating to bankruptcy, insolvency, reorganization or relief of debtors, or
seeking appointment of a receiver, trustee, custodian or other similar
official for it or for all or any substantial part of its property, and
such proceeding shall remain undismissed and unstayed for a period of
ninety (90) days after the Corporation has notice thereof; then and in any
such event set forth in (i) or (ii) of this paragraph 5, the unpaid
principal amount of this Note, together with accrued interest thereon,
shall automatically become immediately due and payable, without
presentment, demand, protest or other requirements of any kind, all of
which are hereby expressly waived by the Corporation.
6. The Corporation shall not have the right to prepay all or
any part of the unpaid principal hereunder.
7. Except as specifically provided for above, all parties
hereto waive presentment for payment, demand, protest and notice of
dishonor.
8. No delay on the part of the Obligee in the exercise of any
right or remedy shall operate as a waiver thereof, and no single or partial
exercise by the Obligee of any right or remedy shall preclude any other or
further exercise thereof or the exercise of any other right or remedy.
9. All notices referred to herein shall be in writing, and all
notices hereunder shall be deemed to have been given upon the earlier of
delivery thereof if by hand or upon receipt if sent by mail (registered or
certified mail, postage prepaid, return receipt requested) or on the second
next Business Day after delivery to a recognized overnight delivery service
or upon transmission if sent by telex or facsimile transmission (with
request for assurance of receipt in a manner customary for communications
of such type), addressed (i) if to the Corporation, to its office at 30
West Monroe Street, Chicago, Illinois 60603 (Attention: Treasurer), or
(ii) if to the Obligee at its office at 10 East 50th Street, 29th Floor,
New York, New York 10022, or (iii) to such other address as the Corporation
or the Obligee, as the case may be, shall have designated by notice
similarly given.
10. The indebtedness evidenced by this Note and any renewals or
extensions thereof, shall at all times be wholly subordinate and junior in
right of payment to the prior payment in full of any and all Superior
Indebtedness (as defined in paragraph 11 hereof), to the extent and in the
manner set forth in this paragraph 10.
(a) In the event of any liquidation, dissolution or
winding up of the Corporation, or of any execution, sale, receivership,
insolvency, bankruptcy, liquidation, readjustment, reorganization, or other
simi-lar proceeding relative to the Corporation or its property, all
principal and interest owing on all Superior Indebtedness shall first be
paid in full before any payment is made upon the indebtedness evidenced by
this Note; and in any such event any payment or distribution of any kind or
character, whether in cash, property or securities (other than in
securities or other evidences of indebtedness, the payment of which is
subordinated to the payment of all Superior Indebtedness which may at the
time be outstanding) which shall be made upon or in respect of this Note
shall be paid over to the holders of such Superior Indebtedness, for
application in payment thereof in accordance with the priorities then
existing among such holders unless and until such Superior Indebtedness
shall have been paid or satisfied in full.
(b) In the event that this Note is declared or becomes due
and payable pursuant to paragraph 5 hereof, under circumstances when the
foregoing subparagraph (a) of this paragraph 10 shall not be applicable,
the Obligee shall be entitled to payments only after there shall first have
been paid in full all Superior Indebtedness outstanding or contingently
payable pursuant to a guaranty or other contingent obligation at the time
this Note so becomes due and payable because of any such event, or payment
or other adequate provision shall have been provided for in a manner
satisfactory to the holders of such Superior Indebtedness.
(c) Upon the occurrence of any default on any Superior
Indebtedness, which default causes, or constitutes an event of default
permitting the holders of such Superior Indebtedness to cause such Superior
Indebtedness to become due prior to its stated maturity, no payment of
principal, premium, if any, or interest shall be made on this Note
(including a purchase pursuant to subparagraphs (a), (b), (c) or (d) of
paragraph 4 hereof) unless and until (i) such default shall have been cured
or expressly waived or shall have ceased to exist or (ii) adequate
provision has been made for the payment of such Superior Indebtedness in a
manner satisfactory to the holders of such Superior Indebtedness.
(d) Upon the occurrence of any default in the payment of
principal or interest on an obligation of any person which obligation is
guaranteed pursuant to a guaranty or other contingent obligation which
constitutes Superior Indebtedness, which default permits the holders of
such underlying obligation to cause such underlying obligation to become
due prior to its stated maturity, no payment of principal, premium, if any,
or interest shall be made on this Note (including a purchase pursuant to
subparagraphs (a), (b), (c) or (d) of paragraph 4 hereof) unless and until
(i) such default shall have been cured or expressly waived or shall have
ceased to exist and for a period of thirty (30) days thereafter or (ii)
adequate provision has been made for the payment of such Superior
Indebtedness in a manner satisfactory to the holders of such Superior
Indebtedness.
(e) No right of any holder of any Superior Indebtedness to
enforce subordination as herein provided shall at any time or in any way be
affected or impaired by any failure to act on the part of the Corporation
or the holders of Superior Indebtedness, or by any noncompliance by the
Corporation with any of the terms, provisions and covenants of this Note,
regardless of any knowledge thereof that any such holder of Superior
Indebtedness may have or be otherwise charged with.
(f) After the indefeasible payment in full of all Superior
Indebtedness, the holder of this Note shall be subrogated (equally and
ratably with the holders of all indebtedness of the Corporation which by
its express terms is subordinated to Superior Indebtedness of the
Corporation to the same extent as this Note is subordinated and which is
entitled to like rights of subrogation) to the rights of the holders of
Superior Indebtedness to receive payments or distributions of assets of the
Corporation applicable to the Superior Indebtedness until all amounts owing
on this Note shall be paid in full, and for the purpose of such
subrogation, no such payments or distributions to the holders of Supe-rior
Indebtedness by or on behalf of the Corporation or by or on behalf of the
holder of this Note by virtue of this paragraph 10 which otherwise would
have been made to the holder of this Note shall, as between the Corporation
and the holder of this Note, be deemed to be payment by the Corporation to
or on account of Superior Indebtedness.
(g) The Corporation agrees, for the bene-fit of the
holders of Superior Indebtedness, that in the event that this Note is
required to be purchased by the Corporation pursuant to subparagraphs (a),
(b), (c) or (d) of paragraph 4 hereof before its expressed maturity or is
declared due and payable pursuant to paragraph 5 hereof before its
expressed maturity, the Corporation will give prompt notice in writing of
such happening to the holders of Superior Indebtedness.
(h) The foregoing provisions are solely for the purpose of
defining the relative rights of the holders of Superior Indebtedness on the
one hand, and the Obligee on the other hand, and nothing herein shall
im-pair, as between the Corporation and the Obligee, the obligation of the
Corporation, which is unconditional and absolute, to pay the principal of
and premium, if any, and interest on this Note in accordance with its
terms, nor shall anything herein prevent the Obligee from exercising all
remedies otherwise permitted by applicable law or hereunder upon failure by
the Corporation to meet its obligations to purchase the Note pursuant to
subparagraphs (a), (b), (c) or (d) of paragraph 4 hereof or upon the
occurrence of an event set forth in paragraph 5 hereof, subject to the
rights of the holders of Superior Indebtedness as herein provided for.
11. For purposes of this Note, the following definitions, in
addition to those included elsewhere herein, shall apply:
"Acquiring Person" shall mean any person or persons, other than
the Corporation, or any of its subsidiaries, any employee benefit plan or
related trust of the Corporation or any of its subsidiaries, or the Obligee
or any of its subsidiaries or affiliates.
"Beneficial Ownership" shall mean beneficial ownership within
the meaning of Rule 13d-3 promulgated under the Exchange Act.
"Breakage Amount" shall mean the present value of amounts equal
to the difference between 8.73% and the Offsetting Rate (as defined below),
which difference shall not be less than zero, multiplied by the principal
amount on this Note that shall have been purchased by the Corporation, for
so long as such Note would have otherwise been outstanding. The present
value shall be computed by using a discount rate equal to the interpolated
mid rate yield of U.S. Treasury zero coupon notes with maturities
corresponding to the dates that this Note is required to be paid under
paragraph 1 hereof as set forth on telerate page 7677, or other similar
report agreed on by the parties if telerate page 7677 is not available
("Report 7677"), at 11:00 a.m., New York time, on a date two (2) Business
Days prior to the payment date of this Note (such time being referred to as
the "Determination Time").
For the purposes of calculating the Breakage Amount, the
Offsetting Rate, using the variables as defined below, shall be equal to
the following formula:
(7-T)M (10-T)N
[a + (c x 0.5)] x ________________ + [b + (d x 0.5)] x _________________
(7-T)M + (10-T)N (7-T)M + (10-T)N
The variables used in the above formula shall be determined as set forth
below:
a = an interpolated offer side U.S. Treasury Note yield on Report
7677 at the Determination Time, for a term to maturity equal to
(7-T).
b = an interpolated offer side U.S. Treasury Note yield on Report
7677 at the Determination Time, for a term to maturity equal to
(10-T).
c = bid side average spread of dollar to dollar interest rate swaps
for a term of (7-T) years, which is obtained by the Obligee from
three (3) reference banks at the Determination Time.
c = bid side average spread of dollar to dollar interest rate swaps
for a term of (10-T) years, which is obtained by the Obligee
from three (3) reference banks, at the Determination Time.
M = 8.5 or, if T is greater than 7, zero.
N = 10.
T = number of years, calculated to the fourth decimal place, from
December 18, 1989 to the purchase date.
"Business Day" shall mean each day that is not a Saturday,
Sunday or a day on which banking institutions in Chicago, Illinois, New
York, New York or London, England are not required to be open.
"Change in Control" shall mean any of the following:
(a) the acquisition (including as a re-sult of a merger)
by an Acquiring Person of Beneficial Ownership of Voting Securities having
fifty percent (50%) or more of the combined Voting Power of the then
outstanding Voting Securities; or
(b) individuals who, as of December 18, 1989, constitute
the Board of Directors of the Corporation (the "Incumbent Board") cease for
any reason to constitute at least a majority of such Board; provided that
any individual becoming a director subsequent to December 18, 1989, whose
election, or nomination for election by the Corporation's stockholders, was
approved by a vote of at least two-thirds of the directors then comprising
the Incumbent Board shall be considered as though such individual were a
member of the Incumbent Board, but excluding, as a member of the Incumbent
Board, any such individual whose initial assumption of office is in
connection with an actual or threatened election con-test relating to the
election of the directors of the Corporation (as such terms are used in
Rule 14a-11 of Regulation 14A promulgated under the Exchange Act) and
further excluding any Person who is an affiliate or associate (as those
terms are defined in Rule 12b-2 under the Exchange Act) or a designee of an
Acquiring Person having or proposing to acquire Beneficial Ownership of
Voting Securities having 10% or more of the combined Voting Power of the
then outstanding Voting Securities.
"Common Stock" means the Corporation's Common Stock, $1.00 par
value per share, as of the date hereof, or any other class of stock
resulting from successive changes or reclassifications of such Common Stock
consisting solely of changes in par value, or from par value to no par
value, or from no par value to par value.
"Consolidated Tangible Net Worth" shall mean the consolidated
stockholders' equity of the Corporation and its consolidated subsidiaries
less the amount (to the extent reflected in determining the stockholders'
equity of the Corporation and its consolidated subsidiaries) of all
goodwill, patents, trademarks, service marks, trade names, copyrights,
organization or development expenses and other intangible assets of the
Corporation and its consolidated subsidiaries. Calculations and
determinations of the foregoing financial terms shall be made using the
same standards, procedures and assumptions used in preparing the audited
financial statements of the Corporation dated as of December 31, 1988;
provided, however, that if any changes in accounting principles from those
used in the preparation of such financial statements are required by the
rules, regulations, pronouncements or opinions of the Financial Accounting
Standards Board or the American Institute of Certified Public Accountants
(or successors thereto or agencies with similar functions) and are adopted
by the Corporation with the agreement of its independent certified public
accountants and such changes would affect (or result in a change in the
method of calculation of) this definition, Obligee and the Corporation
agree to enter into negotiations in order to revise this definition so as
to equitably reflect such changes with the desired result that the criteria
for computing Consolidated Tangible Net Worth shall be the same after such
changes as if such changes had not been made; provided; further, that no
change that would affect this definition (or the method of calculation of
Consolidated Tangible Net Worth) shall be used in such calculations until
the Corporation and all holders of the Subordinated Notes have agreed to
reflect such change in accounting principles in this definition of
Consolidated Tangible Net Worth.
"Consolidated Tangible Net Worth Event" shall mean the last day
of any fiscal quarter on which the Consolidated Tangible Net Worth (as
defined in this paragraph 11) is less than $700 million.
"Current Market Price" of publicly traded shares of Common Stock
or any other class of capital stock or other security of the Corporation or
any other issuer for any day shall mean the last reported sales price,
regular way, or, in the event that no such sale takes place on such day,
the average of the reported closing bid and asked prices, regular way, in
either case as reported in the New York Stock Exchange Composite
Transactions or, if such security is not listed or admitted to trading on
the New York Stock Exchange, on the principal national securities on which
such security is listed or admitted to trading or, if not listed or
admitted to trading on any national securities exchange, on the National
Market System of the National Association of Securities Dealers, Inc.
Automated Quotation System ("NASDAQ") or, if such security is not quoted on
such National Market System, the average of the closing bid and asked
prices on each such day in the over-the-counter market as reported by
NASDAQ or, if bid and asked prices for such security on each such day shall
not have been reported through NASDAQ, the average of the bid and asked
prices for such day as furnished by any New York Stock Exchange member firm
regularly making a market in such security selected for such purpose by the
Board of Directors or a committee thereof.
"Exchange Act" means the Securities Exchange Act of 1934, as
amended.
"Extraordinary Distribution" shall mean any dividend or other
distribution to holders of Common Stock (effected while this Note is
outstanding): (i) of cash (other than a regularly scheduled quarterly
dividend not exceeding 125% of the average quarterly dividend for the four
quarters immediately preceding such dividend), where the aggregate amount
of such cash dividend or distribution made during the preceding period of
12 months, when combined with the aggregate amount of all Pro Rata
Repurchases (for this purpose, including only that portion of the aggregate
purchase price of such Pro Rata Repurchase which is in excess of the Fair
Market Value of the Common Stock repurchased as determined on the
applicable expiration date (including all extensions thereof) of any tender
offer or exchange offer which is a Pro Rata Repurchase, or the date of
purchase with respect to any other Pro Rata Repurchase which is not a
tender offer or exchange offer made during such period), exceeds twelve and
one-half percent (12-1/2%) of the aggregate Fair Market Value of all shares
of Common Stock outstanding on the day before the ex-dividend date with
respect to such dividend or other distribution which is paid in cash and on
the distribution date with respect to such dividend or other distribution
which is paid other than in cash; and/or (ii) of any shares of capital
stock of the Corporation (other than shares of Common Stock), other
securities of the Corporation (other than securities of the type referred
to in subparagraph (b) or (c) of paragraph 3 hereof), evidences of
indebtedness of the Corporation or any other person or any other property
(including shares of any subsidiary of the Corporation) or any combination
thereof. The Fair Market Value of an Extraordinary Distribution for
purposes of subparagraph (e) of paragraph 3 hereof shall be equal to the
sum of the Fair Market Value of such Extraordinary Distribution plus the
amount of any cash dividends (other than regularly scheduled dividends not
exceeding 125% of the aggregate quarterly dividends for the preceding
period of 12 months) which are not Extraordinary Distributions made during
such 12-month period and not previously included in the calculation of an
adjustment pursuant to subparagraph (e) of paragraph 3 hereof.
"Fair Market Value" shall mean, as to shares of Common Stock or
any other class of capital stock or securities of the Corporation or any
other issuer which are publicly traded, the average of the Current Market
Prices (as defined in this paragraph 11) of such shares or securities for
each day of the Adjustment Period. "Adjustment Period" shall mean the
period of ten (10) consecutive trading days preceding the date as of which
the Fair Market Value of a security is to be determined. The "Fair Market
Value" of any security which is not publicly traded or of any other
property shall mean the fair value thereof as determined by an independent
investment banking or appraisal firm experienced in the valuation of such
securities or property selected in good faith by the Board of Directors or
a committee thereof, or, if no such investment banking or appraisal firm is
in the good faith judgment of the Board of Directors or such committee
available to make such determination, as determined in good faith by the
Board of Directors or such committee.
"5% Event" shall mean the first Interest Payment Date on which
the aggregate number of votes represented by the Subordinated Notes,
considered as one class, is less than 5% of the combined Voting Power of
the then outstanding Voting Securities, assuming for purposes of such
calculation that no portion of the Subordinated Notes has been purchased as
of such Interest Payment Date and all adjustments pursuant to paragraph 3
hereof have been made with respect to this Note.
"ISC Business Transfer" shall mean a transfer or other
disposition of (i) the businesses (the "ISC Business") constituting the
manufacture of hot band rolled steel coils, the manufacture, distribution
and sale of cold rolled sheet steel products and the marketing and sale of
coated steel products for its own account or as sales representative
presently conducted by Inland Steel Company, a Delaware corporation and
wholly owned subsidiary of the Corporation ("ISC"), or (ii) the ISC
Business together with ISC's partnership interests in I/N Kote, an Indiana
general partnership, and I/N Tek, an Indiana general partnership, as a
result of which ISC would lose, upon the consummation thereof, its power to
control (either alone or with any other person or persons) the day-to-day
management of the ISC Business.
"Non-Dilutive Amount" in respect of an issuance, sale or
exchange by the Corporation of any right or warrant to purchase or acquire
shares of Common Stock (including any security convertible into or
exchangeable for shares of Common Stock) shall mean the difference between
(i) the product of the Fair Market Value of a share of Common Stock on the
day preceding the first public announcement of such issuance, sale or
exchange multiplied by the maximum number of shares of Common Stock which
could be acquired on such date upon the exercise in full of such rights and
warrants (including upon the conversion or exchange of all such convertible
or exchangeable securities), whether or not exercisable (or convertible or
exchangeable) at such date, and (ii) the aggregate amount payable pursuant
to such right or warrant to purchase or acquire such maximum number of
shares of Common Stock; provided, however, that in no event shall the
Non-Dilutive Amount be less than zero. For purposes of the foregoing
sentence, in the case of a security convertible into or exchangeable for
shares of Common Stock, the amount payable pursuant to a right or warrant
to purchase or acquire shares of Common Stock shall be the Fair Market
Value of such security on the date of the issuance, sale or exchange of
such security by the Corporation.
"Proportionate Basis" shall mean that, of the amount of this
Note purchased pursuant to paragraph 4(e) hereof, 85/185ths of such amount
shall be deemed to satisfy the Corporation's obligation to pay an
installment on December 18, 1996, and 100/185ths of such amount shall be
deemed to satisfy the Corporation's obligation to pay an installment on
December 17, 1999, in each case to the extent of such purchase.
"Pro Rata Repurchase" shall mean any purchase of shares of
Common Stock by the Corporation or any subsidiary thereof, whether for
cash, shares of capital stock of the Corporation, other securities of the
Corporation, evidences of indebtedness of the Corporation or any other
person or any other property (including shares of a subsidiary of the
Corporation), or any combination thereof, effected while this Note is
outstanding, pursuant to any tender offer or exchange offer subject to
Section 13(e) of the Exchange Act, or any successor provision of law, or
pursuant to any other offer available to substantially all holders of
Common Stock, other than any such purchase effected prior to December 18,
1990 where the aggregate purchase price of all shares so procured does not
exceed $185,000,000. In addition, no purchase of shares by the Corporation
or any subsidiary thereof made in open market transactions shall be deemed
a Pro Rata Repurchase. For purposes hereof, shares shall be deemed to have
been purchased by the Corporation or any subsidiary thereof "in open market
transactions" if they have been purchased substantially in accordance with
the requirements of Rule 10b-18 as in effect under the Exchange Act on the
date shares of Series F Preferred Stock are initially issued by the
Corporation, or on such other terms and conditions as the Board of
Directors or a committee thereof shall have determined are reasonably
designed to prevent such purchases from having a material effect on the
trading market for the Common Stock.
"Rights" shall mean any right issued, outstanding and held by
holders of Common Stock to purchase a unit consisting of one one-hundredth
of a share of Series D Junior Participating Preferred Stock of the
Corporation (or other securities in lieu thereof) pursuant to the Rights
Agreement or any similar rights issued pursuant to a similar agreement.
"Rights Agreement" shall mean the Amended and Restated Rights
Agreement, dated as of November 25, 1987 as amended and restated as of May
24, 1989, between the Corporation and Harris Trust and Savings Bank, as
successor rights agent.
"Series F Preferred Stock" shall mean the Corporation's Series F
Exchangeable Preferred Stock, $1.00 par value per share, as the same exists
on the date hereof.
"Significant Stock Acquisition" shall mean the acquisition by an
Acquiring Person of Beneficial Ownership of Voting Securities having more
than thirty-three and one-third percent (33-1/3%) of the combined Voting
Power of the then outstanding Voting Securities.
"Steel Company Stock Purchase" shall mean the acquisition,
following an agreement with, including the lack of opposition from, the
Board of Directors of the Corporation, by an integrated steel producer, of
Voting Securities having 15% or more of the combined Voting Power of the
then outstanding Voting Securities.
"Subordinated Notes" shall mean the Corporation's 10.23%
Subordinated Voting Notes due 1999 issued in exchange for the Series F
Preferred Stock pursuant to the Certificate of Designations, Preferences
and Rights of the Series F Preferred Stock or issued pursuant to the terms
of any predecessor Subordinated Note.
"Superior Indebtedness" shall mean the principal, premium, if
any, and interest on and all other amounts due on or in connection with (i)
any indebtedness for borrowed money of the Corporation (other than this
Note) and any guaranty, endorsement, contingent agreement to purchase or to
furnish funds for the payment or maintenance of, or otherwise to be or
become contingently liable under or with respect to, the indebtedness,
other obligations, net worth, working capital or earnings of any person, or
a guaranty of the payment of dividends or other distributions upon the
stock of any corporation, or a guaranty of any lease, or an agreement to
purchase property, securities or services for the primary purpose of
assuring the owner of such indebtedness of the payment of such
indebtedness, in each case whether outstanding on the date of this Note or
hereafter created, incurred or assumed, in respect of an obligation which
is, pursuant to express conditions set forth therein, intended to be senior
in right or payment to this Note, (ii) the Credit Agreement dated March 31,
1989 among the Corporation, Chemical Bank, Morgan Guaranty Trust Company of
New York and certain other banks, and (iii) the Corporation's guaranty of
ISC's lease obligations related to the No. 2 BOF Shop Caster Facility and
(iv) any refinancing, refunding or restatement with respect to (i) through
(iii) above.
"Voting Power" shall mean the voting power of the Voting
Securities.
"Voting Securities" shall mean at any time shares of any class
of capital stock of the Corporation or other securities of the Corporation
which are entitled to vote generally in the election of directors.
12. After maturity of this Note, whether by acceleration or
otherwise, any outstanding principal and accrued interest on this Note
shall be payable on demand subject to the provisions of paragraph 10
hereof.
13. THIS NOTE IS MADE UNDER AND GOVERNED BY THE INTERNAL LAWS
OF THE STATE OF NEW YORK. THE CORPORATION HEREBY SUBMITS TO THE
NONEXCLUSIVE JURISDICTION OF THE UNITED STATES DISTRICT COURT FOR THE
SOUTHERN DISTRICT OF NEW YORK AND OF ANY NEW YORK STATE COURT SITTING IN
THE BOROUGH OF MANHATTAN, THE CITY OF NEW YORK FOR THE PURPOSES OF ALL
LEGAL PROCEEDINGS ARISING OUT OF OR RELATING TO THIS NOTE OR THE
TRANSACTIONS CONTEMPLATED HEREBY. THE CORPORATION IRREVOCABLY WAIVES, TO
THE FULLEST EXTENT PERMITTED BY LAW, ANY OBJECTION WHICH IT MAY NOW OR
HEREAFTER HAVE TO THE LAYING OF THE VENUE OF ANY SUCH PROCEEDING BROUGHT IN
SUCH A COURT AND ANY CLAIM THAT ANY SUCH PROCEEDING BROUGHT IN SUCH COURT
HAS BEEN BROUGHT IN AN INCONVENIENT FORUM. WHEREVER POSSIBLE EACH
PROVISION OF THIS NOTE SHALL BE INTERPRETED IN SUCH MANNER AS TO BE
EFFECTIVE AND VALID UNDER APPLICABLE LAW, BUT IF ANY PROVISION OF THIS NOTE
SHALL BE PROHIBITED BY OR INVALID UNDER SUCH LAW, SUCH PROVISION SHALL BE
INEFFECTIVE TO THE EXTENT OF SUCH PROHIBITION OR INVALIDITY, WITHOUT
INVALIDATING THE REMAINDER OF SUCH PROVISION OR THE REMAINING PROVISIONS OF
THIS NOTE AND SHALL BE INTERPRETED SO AS TO BE EFFECTIVE AND VALID.
SIGNED AND DELIVERED as of the 1st day of August, 1995.
INLAND STEEL INDUSTRIES, INC.
By:
Title:
September 25, 1995
Inland Steel Industries, Inc.
30 West Monroe Street
Chicago, Illinois 60603
Re: Common Stock, $1.00 par value per share
_______________________________________
Ladies and Gentlemen:
We have acted as counsel to Inland Steel Industries, Inc., a
Delaware corporation (the "Company"), in connection with the
registration under the Securities Act of 1933, as amended, of
500,000 shares of its Common Stock, $.01 par value (the
"Shares"), that may be purchased pursuant to the exercise of
transferable options and stock appreciation rights issued by the
Company to participants in the Inland 1995 Incentive Stock Plan,
the Inland 1992 Incentive Stock Plan, the Inland 1988 Incentive
Stock Plan and the Inland 1984 Incentive Stock Plan
(collectively, the "Plans"). In this connection, we have
examined such corporate and other records, instruments,
certificates and documents as we considered necessary to enable
us to express this opinion.
Based upon the foregoing, we are of the opinion that the
Shares are duly authorized for issuance and when issued in
accordance with the provisions of the Plans will be legally
issued, fully paid and non-assessable shares of the Company.
We consent to the filing of this opinion as an exhibit to
the Registration Statement and to the reference to us under the
caption "Validity of Shares."
Very truly yours,
MAYER, BROWN & PLATT
EXHIBIT 23.1
CONSENT OF INDEPENDENT ACCOUNTANTS
We hereby consent to the incorporation by reference in the
Prospectus constituting a part of this Registration Statement on
Form S-3 of our report dated February 20, 1995, which appears on
page 34 of the 1994 Annual Report to Shareholders of Inland Steel
Industries, Inc. and Subsidiary Companies, which is incorporated by
reference in the Inland Steel Industries, Inc. Annual Report on
Form 10-K for the year ended December 31, 1994. We also consent to
the incorporation by reference of our report on the Financial
Statement Schedules, which appears on page 27 of such Annual Report
on Form 10-K. We also consent to the references to us under the
headings "Experts" in such Prospectus.
PRICE WATERHOUSE LLP
Chicago, Illinois
September 21, 1995
INLAND STEEL INDUSTRIES, INC.
POWER OF ATTORNEY
_________________
KNOW ALL MEN BY THESE PRESENTS, that I, the undersigned, as a
director and (or) officer of Inland Steel Industries, Inc., a Delaware
corporation (the "Corporation"), hereby nominate, constitute and appoint
Robert J. Darnall, George A. Ranney, Jr., Earl L. Mason and Charles B.
Salowitz, or any one or more of them, my true and lawful attorneys-in-fact
and agents to do any and all acts and things and execute any and all
instruments which said attorneys-in-fact and agents, or any of them, may
deem necessary or advisable to enable the Corporation to comply with the
Securities Act of 1933, as amended, and any requirements of the Securities
and Exchange Commission in respect thereof, in connection with the
registration under said Act of not to exceed 6,000,000 shares of Common
Stock, $1.00 par value per share, of the Corporation covered by the Inland
1995 Incentive Stock Plan, or the Inland 1984 Incentive Stock Plan,
including specifically, without limitation thereof, full power and
authority to sign my name as a director and (or) officer of the Corporation
to a registration statement on Form S-3, or such other form for the
registration of securities as the Securities and Exchange Commission may
require covering such shares and to any amendment or amendments (including,
without limitation, post-effective amendments) or supplements to said
registration statement or statements and to the prospectus or prospectuses
relating thereto, and to certify on my behalf that, to the best of my
knowledge and belief, the Corporation meets all of the requirements for
filing on Form S-3; hereby ratifying and confirming all that said
attorneys-in-fact and agents, or any of them, shall do or cause to be done
by virtue hereof.
IN WITNESS WHEREOF, I have hereunto set my hand this 24th day of
July, 1995.
/s/ Robert J. Darnall
INLAND STEEL INDUSTRIES, INC.
POWER OF ATTORNEY
_________________
KNOW ALL MEN BY THESE PRESENTS, that I, the undersigned, as a
director and (or) officer of Inland Steel Industries, Inc., a Delaware
corporation (the "Corporation"), hereby nominate, constitute and appoint
Robert J. Darnall, George A. Ranney, Jr., Earl L. Mason and Charles B.
Salowitz, or any one or more of them, my true and lawful attorneys-in-fact
and agents to do any and all acts and things and execute any and all
instruments which said attorneys-in-fact and agents, or any of them, may
deem necessary or advisable to enable the Corporation to comply with the
Securities Act of 1933, as amended, and any requirements of the Securities
and Exchange Commission in respect thereof, in connection with the
registration under said Act of not to exceed 6,000,000 shares of Common
Stock, $1.00 par value per share, of the Corporation covered by the Inland
1995 Incentive Stock Plan, or the Inland 1984 Incentive Stock Plan,
including specifically, without limitation thereof, full power and
authority to sign my name as a director and (or) officer of the Corporation
to a registration statement on Form S-3, or such other form for the
registration of securities as the Securities and Exchange Commission may
require covering such shares and to any amendment or amendments (including,
without limitation, post-effective amendments) or supplements to said
registration statement or statements and to the prospectus or prospectuses
relating thereto, and to certify on my behalf that, to the best of my
knowledge and belief, the Corporation meets all of the requirements for
filing on Form S-3; hereby ratifying and confirming all that said
attorneys-in-fact and agents, or any of them, shall do or cause to be done
by virtue hereof.
IN WITNESS WHEREOF, I have hereunto set my hand this 24th day of
July, 1995.
/s/ A. Robert Abboud
INLAND STEEL INDUSTRIES, INC.
POWER OF ATTORNEY
_________________
KNOW ALL MEN BY THESE PRESENTS, that I, the undersigned, as a
director and (or) officer of Inland Steel Industries, Inc., a Delaware
corporation (the "Corporation"), hereby nominate, constitute and appoint
Robert J. Darnall, George A. Ranney, Jr., Earl L. Mason and Charles B.
Salowitz, or any one or more of them, my true and lawful attorneys-in-fact
and agents to do any and all acts and things and execute any and all
instruments which said attorneys-in-fact and agents, or any of them, may
deem necessary or advisable to enable the Corporation to comply with the
Securities Act of 1933, as amended, and any requirements of the Securities
and Exchange Commission in respect thereof, in connection with the
registration under said Act of not to exceed 6,000,000 shares of Common
Stock, $1.00 par value per share, of the Corporation covered by the Inland
1995 Incentive Stock Plan, or the Inland 1984 Incentive Stock Plan,
including specifically, without limitation thereof, full power and
authority to sign my name as a director and (or) officer of the Corporation
to a registration statement on Form S-3, or such other form for the
registration of securities as the Securities and Exchange Commission may
require covering such shares and to any amendment or amendments (including,
without limitation, post-effective amendments) or supplements to said
registration statement or statements and to the prospectus or prospectuses
relating thereto, and to certify on my behalf that, to the best of my
knowledge and belief, the Corporation meets all of the requirements for
filing on Form S-3; hereby ratifying and confirming all that said
attorneys-in-fact and agents, or any of them, shall do or cause to be done
by virtue hereof.
IN WITNESS WHEREOF, I have hereunto set my hand this 24th day of
July, 1995.
/s/ James W. Cozad
INLAND STEEL INDUSTRIES, INC.
POWER OF ATTORNEY
_________________
KNOW ALL MEN BY THESE PRESENTS, that I, the undersigned, as a
director and (or) officer of Inland Steel Industries, Inc., a Delaware
corporation (the "Corporation"), hereby nominate, constitute and appoint
Robert J. Darnall, George A. Ranney, Jr., Earl L. Mason and Charles B.
Salowitz, or any one or more of them, my true and lawful attorneys-in-fact
and agents to do any and all acts and things and execute any and all
instruments which said attorneys-in-fact and agents, or any of them, may
deem necessary or advisable to enable the Corporation to comply with the
Securities Act of 1933, as amended, and any requirements of the Securities
and Exchange Commission in respect thereof, in connection with the
registration under said Act of not to exceed 6,000,000 shares of Common
Stock, $1.00 par value per share, of the Corporation covered by the Inland
1995 Incentive Stock Plan, or the Inland 1984 Incentive Stock Plan,
including specifically, without limitation thereof, full power and
authority to sign my name as a director and (or) officer of the Corporation
to a registration statement on Form S-3, or such other form for the
registration of securities as the Securities and Exchange Commission may
require covering such shares and to any amendment or amendments (including,
without limitation, post-effective amendments) or supplements to said
registration statement or statements and to the prospectus or prospectuses
relating thereto, and to certify on my behalf that, to the best of my
knowledge and belief, the Corporation meets all of the requirements for
filing on Form S-3; hereby ratifying and confirming all that said
attorneys-in-fact and agents, or any of them, shall do or cause to be done
by virtue hereof.
IN WITNESS WHEREOF, I have hereunto set my hand this 24th day of
July, 1995.
/s/ James A. Henderson
INLAND STEEL INDUSTRIES, INC.
POWER OF ATTORNEY
_________________
KNOW ALL MEN BY THESE PRESENTS, that I, the undersigned, as a
director and (or) officer of Inland Steel Industries, Inc., a Delaware
corporation (the "Corporation"), hereby nominate, constitute and appoint
Robert J. Darnall, George A. Ranney, Jr., Earl L. Mason and Charles B.
Salowitz, or any one or more of them, my true and lawful attorneys-in-fact
and agents to do any and all acts and things and execute any and all
instruments which said attorneys-in-fact and agents, or any of them, may
deem necessary or advisable to enable the Corporation to comply with the
Securities Act of 1933, as amended, and any requirements of the Securities
and Exchange Commission in respect thereof, in connection with the
registration under said Act of not to exceed 6,000,000 shares of Common
Stock, $1.00 par value per share, of the Corporation covered by the Inland
1995 Incentive Stock Plan, or the Inland 1984 Incentive Stock Plan,
including specifically, without limitation thereof, full power and
authority to sign my name as a director and (or) officer of the Corporation
to a registration statement on Form S-3, or such other form for the
registration of securities as the Securities and Exchange Commission may
require covering such shares and to any amendment or amendments (including,
without limitation, post-effective amendments) or supplements to said
registration statement or statements and to the prospectus or prospectuses
relating thereto, and to certify on my behalf that, to the best of my
knowledge and belief, the Corporation meets all of the requirements for
filing on Form S-3; hereby ratifying and confirming all that said
attorneys-in-fact and agents, or any of them, shall do or cause to be done
by virtue hereof.
IN WITNESS WHEREOF, I have hereunto set my hand this 24th day of
July, 1995.
/s/ Robert B. McKersie
INLAND STEEL INDUSTRIES, INC.
POWER OF ATTORNEY
_________________
KNOW ALL MEN BY THESE PRESENTS, that I, the undersigned, as a
director and (or) officer of Inland Steel Industries, Inc., a Delaware
corporation (the "Corporation"), hereby nominate, constitute and appoint
Robert J. Darnall, George A. Ranney, Jr., Earl L. Mason and Charles B.
Salowitz, or any one or more of them, my true and lawful attorneys-in-fact
and agents to do any and all acts and things and execute any and all
instruments which said attorneys-in-fact and agents, or any of them, may
deem necessary or advisable to enable the Corporation to comply with the
Securities Act of 1933, as amended, and any requirements of the Securities
and Exchange Commission in respect thereof, in connection with the
registration under said Act of not to exceed 6,000,000 shares of Common
Stock, $1.00 par value per share, of the Corporation covered by the Inland
1995 Incentive Stock Plan, or the Inland 1984 Incentive Stock Plan,
including specifically, without limitation thereof, full power and
authority to sign my name as a director and (or) officer of the Corporation
to a registration statement on Form S-3, or such other form for the
registration of securities as the Securities and Exchange Commission may
require covering such shares and to any amendment or amendments (including,
without limitation, post-effective amendments) or supplements to said
registration statement or statements and to the prospectus or prospectuses
relating thereto, and to certify on my behalf that, to the best of my
knowledge and belief, the Corporation meets all of the requirements for
filing on Form S-3; hereby ratifying and confirming all that said
attorneys-in-fact and agents, or any of them, shall do or cause to be done
by virtue hereof.
IN WITNESS WHEREOF, I have hereunto set my hand this 27th day of
July, 1995.
/s/ Maurice S. Nelson, Jr.
INLAND STEEL INDUSTRIES, INC.
POWER OF ATTORNEY
_________________
KNOW ALL MEN BY THESE PRESENTS, that I, the undersigned, as a
director and (or) officer of Inland Steel Industries, Inc., a Delaware
corporation (the "Corporation"), hereby nominate, constitute and appoint
Robert J. Darnall, George A. Ranney, Jr., Earl L. Mason and Charles B.
Salowitz, or any one or more of them, my true and lawful attorneys-in-fact
and agents to do any and all acts and things and execute any and all
instruments which said attorneys-in-fact and agents, or any of them, may
deem necessary or advisable to enable the Corporation to comply with the
Securities Act of 1933, as amended, and any requirements of the Securities
and Exchange Commission in respect thereof, in connection with the
registration under said Act of not to exceed 6,000,000 shares of Common
Stock, $1.00 par value per share, of the Corporation covered by the Inland
1995 Incentive Stock Plan, or the Inland 1984 Incentive Stock Plan,
including specifically, without limitation thereof, full power and
authority to sign my name as a director and (or) officer of the Corporation
to a registration statement on Form S-3, or such other form for the
registration of securities as the Securities and Exchange Commission may
require covering such shares and to any amendment or amendments (including,
without limitation, post-effective amendments) or supplements to said
registration statement or statements and to the prospectus or prospectuses
relating thereto, and to certify on my behalf that, to the best of my
knowledge and belief, the Corporation meets all of the requirements for
filing on Form S-3; hereby ratifying and confirming all that said
attorneys-in-fact and agents, or any of them, shall do or cause to be done
by virtue hereof.
IN WITNESS WHEREOF, I have hereunto set my hand this 23rd day of
July, 1995.
/s/ Donald S. Perkins
INLAND STEEL INDUSTRIES, INC.
POWER OF ATTORNEY
_________________
KNOW ALL MEN BY THESE PRESENTS, that I, the undersigned, as a
director and (or) officer of Inland Steel Industries, Inc., a Delaware
corporation (the "Corporation"), hereby nominate, constitute and appoint
Robert J. Darnall, George A. Ranney, Jr., Earl L. Mason and Charles B.
Salowitz, or any one or more of them, my true and lawful attorneys-in-fact
and agents to do any and all acts and things and execute any and all
instruments which said attorneys-in-fact and agents, or any of them, may
deem necessary or advisable to enable the Corporation to comply with the
Securities Act of 1933, as amended, and any requirements of the Securities
and Exchange Commission in respect thereof, in connection with the
registration under said Act of not to exceed 6,000,000 shares of Common
Stock, $1.00 par value per share, of the Corporation covered by the Inland
1995 Incentive Stock Plan, or the Inland 1984 Incentive Stock Plan,
including specifically, without limitation thereof, full power and
authority to sign my name as a director and (or) officer of the Corporation
to a registration statement on Form S-3, or such other form for the
registration of securities as the Securities and Exchange Commission may
require covering such shares and to any amendment or amendments (including,
without limitation, post-effective amendments) or supplements to said
registration statement or statements and to the prospectus or prospectuses
relating thereto, and to certify on my behalf that, to the best of my
knowledge and belief, the Corporation meets all of the requirements for
filing on Form S-3; hereby ratifying and confirming all that said
attorneys-in-fact and agents, or any of them, shall do or cause to be done
by virtue hereof.
IN WITNESS WHEREOF, I have hereunto set my hand this 26th day of
July, 1995.
/s/ Joshua I. Smith
INLAND STEEL INDUSTRIES, INC.
POWER OF ATTORNEY
_________________
KNOW ALL MEN BY THESE PRESENTS, that I, the undersigned, as a
director and (or) officer of Inland Steel Industries, Inc., a Delaware
corporation (the "Corporation"), hereby nominate, constitute and appoint
Robert J. Darnall, George A. Ranney, Jr., Earl L. Mason and Charles B.
Salowitz, or any one or more of them, my true and lawful attorneys-in-fact
and agents to do any and all acts and things and execute any and all
instruments which said attorneys-in-fact and agents, or any of them, may
deem necessary or advisable to enable the Corporation to comply with the
Securities Act of 1933, as amended, and any requirements of the Securities
and Exchange Commission in respect thereof, in connection with the
registration under said Act of not to exceed 6,000,000 shares of Common
Stock, $1.00 par value per share, of the Corporation covered by the Inland
1995 Incentive Stock Plan, or the Inland 1984 Incentive Stock Plan,
including specifically, without limitation thereof, full power and
authority to sign my name as a director and (or) officer of the Corporation
to a registration statement on Form S-3, or such other form for the
registration of securities as the Securities and Exchange Commission may
require covering such shares and to any amendment or amendments (including,
without limitation, post-effective amendments) or supplements to said
registration statement or statements and to the prospectus or prospectuses
relating thereto, and to certify on my behalf that, to the best of my
knowledge and belief, the Corporation meets all of the requirements for
filing on Form S-3; hereby ratifying and confirming all that said
attorneys-in-fact and agents, or any of them, shall do or cause to be done
by virtue hereof.
IN WITNESS WHEREOF, I have hereunto set my hand this 25th day of
July, 1995.
/s/ Nancy H. Teeters
INLAND STEEL INDUSTRIES, INC.
POWER OF ATTORNEY
_________________
KNOW ALL MEN BY THESE PRESENTS, that I, the undersigned, as a
director and (or) officer of Inland Steel Industries, Inc., a Delaware
corporation (the "Corporation"), hereby nominate, constitute and appoint
Robert J. Darnall, George A. Ranney, Jr., Earl L. Mason and Charles B.
Salowitz, or any one or more of them, my true and lawful attorneys-in-fact
and agents to do any and all acts and things and execute any and all
instruments which said attorneys-in-fact and agents, or any of them, may
deem necessary or advisable to enable the Corporation to comply with the
Securities Act of 1933, as amended, and any requirements of the Securities
and Exchange Commission in respect thereof, in connection with the
registration under said Act of not to exceed 6,000,000 shares of Common
Stock, $1.00 par value per share, of the Corporation covered by the Inland
1995 Incentive Stock Plan, or the Inland 1984 Incentive Stock Plan,
including specifically, without limitation thereof, full power and
authority to sign my name as a director and (or) officer of the Corporation
to a registration statement on Form S-3, or such other form for the
registration of securities as the Securities and Exchange Commission may
require covering such shares and to any amendment or amendments (including,
without limitation, post-effective amendments) or supplements to said
registration statement or statements and to the prospectus or prospectuses
relating thereto, and to certify on my behalf that, to the best of my
knowledge and belief, the Corporation meets all of the requirements for
filing on Form S-3; hereby ratifying and confirming all that said
attorneys-in-fact and agents, or any of them, shall do or cause to be done
by virtue hereof.
IN WITNESS WHEREOF, I have hereunto set my hand this 24th day of
July, 1995.
/s/ Arnold R. Weber
