As filed with the Securities and Exchange Commission on May 18, 1995
Registration No. 33-59161
_______________________________________________________________________________
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
__________
AMENDMENT NO. 1
TO
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)
David B. Anderson
Vice-President - Corporate Development,
General Counsel and Secretary
30 West Monroe Street
Chicago, Illinois 60603
(312) 899-3917
(Name, address, including zip code, and telephone
number, including area code, of agent for service)
__________
Copies to:
Robert E. Curley Frederick W. Axley
Mayer, Brown & Platt McDermott, Will & Emery
190 South LaSalle Street 227 West Monroe Street
Chicago, Illinois 60603 Chicago, Illinois 60606
___________
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, check the following box: [x]
_____________
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 MAY 18, 1995
3,946,385 Shares
Inland Steel Industries, Inc.
Common Stock
(par value $1.00 per share)
______________________
The 3,946,385 shares (the "Shares") of common stock, par value $1.00 (the
"Common Stock"), of Inland Steel Industries, Inc. (the "Company") offered hereby
were transferred by the Company to the Selling Stockholder on May 1, 1995 for
credit against certain of the Company's obligations to the Inland Steel
Industries Pension Plan (the "Pension Plan"). See "Selling Stockholder."
The Shares are being sold for the account of the Selling Stockholder, and the
Company will not receive any proceeds from the sale of the Shares.
The Selling Stockholder has advised the Company that it may from time to
time offer and sell the Shares on the New York Stock Exchange or otherwise at
market prices then prevailing or at prices and upon terms then obtainable or in
underwritten offerings. Sales in underwritten offerings would be made through
one or more underwriters to be named in a supplement to this Prospectus. Other
sales may be made in ordinary brokerage transactions, in block transactions, in
privately negotiated transactions, pursuant to Rule 144 ("Rule 144") under the
Securities Act of 1933, as amended (the "Securities Act") or otherwise. With
certain exceptions, the Selling Stockholder has agreed that, without the consent
of the Company, the Selling Stockholder will not sell during any three month
period a number of Shares that exceeds the greater of (i) the average weekly
reported trading volume of the Common Stock during the four calendar weeks
preceding a sale or (ii) 1% of the outstanding shares of Common Stock. The
foregoing limitation does not apply to sales by the Selling Stockholder pursuant
to an underwritten offering or in certain negotiated transactions. See "Plan
of Distribution." The Company will pay the underwriting commissions or
discounts in connection with any underwritten offering of shares by the Selling
Stockholder and will bear the expenses of registering the Shares for sale by the
Selling Stockholder, including the expenses of the Selling Stockholder
(including the fees and expenses of the Selling Stockholder's legal counsel).
If the Shares are sold through brokers, the Selling Stockholder expects to pay
customary brokerage commissions and charges, which costs will be borne by the
Selling Stockholder.
On May 17, 1995, the last reported sale price of the Common Stock on the
New York Stock Exchange was $28.875 per share.
See "Risk Factors Related to the Steel Industry and the Company" 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 May [ ], 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 or the Selling
Stockholder. 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 Selling Stockholder......... 10
Risk Factors Related to the Description of
Steel Industry and the Company.. 5 Capital Stock............. 11
Experts..................... 18
Validity of the Shares...... 18
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 and the Company's
Quarterly Report on Form 10-Q for the fiscal quarter ended March 31, 1995
(SEC File No. 1-9117) as filed by the Company with the Commission pursuant to
the Exchange Act. See "Description of Capital Stock" 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. 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 manufactures steel sheet, strip and plate for the
automotive, appliance, office furniture, steel service center and electrical
motor industries, and Inland Steel Bar Company, which manufactures 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, 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 increased demand for steel and rising prices.
Potential Excess Industry Capacity and Price Sensitivity
Although demand for steel products is currently strong, 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.
Adverse 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 have 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 have
appealed certain of the findings against them. The CIT sustained the ITC in the
bar and rod product cases and in the cold-rolled and hot-rolled flat product
cases. Appeals are pending regarding the corrosion-resistant flat product
cases. It is not certain how the ITC actions and the appeals will affect
imports of steel products into the United States or the price of such steel
products.
Potential Adverse GATT Agreements. On December 15, 1993, President Clinton
notified the U.S. Congress of his intent to enter into agreements resulting from
the Uruguay Round of multilateral trade negotiations under the General Agreement
on Tariffs and Trade ("GATT"). 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. Legislation to
implement GATT was enacted into Federal law in December 1994 and the Uruguay
Round agreements went into effect on January 1, 1995. The elimination of
tariffs on imported steel products and the other changes implemented under such
legislation 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, was positive for 1994 and 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 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. The pension benefits are funded through a
pension trust while health care and life insurance benefits 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 to its Pension Plan in order to address future funding requirements. The
shares offered hereby comprise such contributed shares.
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. This repurchase commitment
would cease to exist upon the Company's anticipated repurchase of its Series F
Preferred Stock. See "Description of Capital Stock-Series F Preferred Stock."
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-Common Stock-Dividend Limitations."
USE OF PROCEEDS
The Company will not receive any of the proceeds of the sale of the Shares
offered hereby.
PLAN OF DISTRIBUTION
The Selling Stockholder has advised the Company that it may from time to
time offer and sell the Shares on the New York Stock Exchange or otherwise at
market prices then prevailing or at prices and upon terms then obtainable or in
underwritten offerings. Sales in underwritten offerings would be made through
one or more underwriters to be named in a supplement to this Prospectus. Other
sales may be made in ordinary brokerage transactions, in block transactions, in
privately negotiated transactions, pursuant to Rule 144 or otherwise. With
certain exceptions, the Selling Stockholder has agreed that, without the consent
of the Company, the Selling Stockholder will not sell during any three month
period a number of Shares that exceeds the greater of (i) the average weekly
reported trading volume of the Common Stock during the four calendar weeks
preceding a sale or (ii) 1% of the outstanding shares of Common Stock. The
foregoing limitation does not apply to sales by the Selling Stockholder pursuant
to an underwritten offering or in certain negotiated transactions. In the case
of a negotiated transaction at a price that exceeds the then current market
price by ten percent or more, and provided that the prospective purchaser
represents in writing to the Company and the Selling Stockholder that the
prospective purchaser is acquiring such Shares for its own account, or for one
or more accounts as to each of which such transferee exercises sole investment
discretion, for investment purposes only and not with a view to, or for resale
in connection with, any distribution, the one percent limitation described above
will be increased to four percent. In addition, the Selling Stockholder has
agreed that it will not, without the consent of the Company and subject to the
Company's obligation to make certain additional payments to the Pension Plan,
sell Shares in any negotiated transaction to any person that is, or as a result
of such purchase would be, the beneficial owner of more than five percent of the
outstanding Common Stock.
The Company will pay the underwriting commissions or discounts in connection
with any underwritten offering of shares by the Selling Stockholder and will
bear the expenses of registering the Shares for sale by the Selling Stockholder,
including the expenses of the Selling Stockholder (including the fees and
expenses of the Selling Stockholder's legal counsel). If the Shares are sold
through brokers, the Selling Stockholder expects to pay customary brokerage
commissions and charges, which costs will be borne by the Selling Stockholder.
The Company has agreed to indemnify the Selling Stockholder and any investment
managers actin on behalf of the Selling Stockholder against certain liabilities,
including liabilities under the Securities Act.
SELLING STOCKHOLDER
The table below sets forth the name of the Selling Stockholder, the number
and percentage of shares of Common Stock beneficially owned by the Selling
Stockholder prior to the Offering, the maximum number of shares of Common Stock
offered hereby by the Selling Stockholder and the number and percentage of
shares of Common Stock to be held by the Selling Stockholder after the Offering.
Maximum
Prior to the Offering Number of After the Offering
_________________________ Shares ___________________
Number of Percentage to be Number Percentage
Shares of Sold in the of Shares of
Name Owned Class(1)<F1> Offering Owned Class(1)<F1>
_____ ________ __________ ___________ ________ ___________
Inland Steel
Industries
Pension Plan,
The Northern
Trust Company,
trustee.... 3,946,385 8.12% 3,946,385 0 0%
_______________
<F1> (1) Calculated based on the number of shares of Common Stock outstanding
on May 3, 1995.
DESCRIPTION OF CAPITAL STOCK
The following statements are summaries of certain provisions of the
Certificate of Incorporation and the By-Laws of the Company 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 and the Rights Agreement, including
the definitions therein of certain terms. Copies of the Certificate of
Incorporation, the By-Laws 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 March 31, 1995, there were 44,670,700 shares
of Common Stock (not including the 3,946,385 shares of Common Stock offered
hereby), 94,701 shares of Series A Preferred Stock, 3,098,628 shares of Series
E Preferred Stock, and 185,000 shares of Series F Preferred Stock outstanding.
The Company previously redeemed the outstanding shares of Series B, Series C and
Series G Preferred Stock and the Company intends to repurchase the Series F
Preferred Stock during the second quarter of 1995. See Note 6 of Notes to
Consolidated Financial Statements for the year ended December 31, 1994. 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 (including the
shares offered hereby), Series A Preferred Stock, Series E Preferred Stock and
Series F Preferred Stock are 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, Series E Preferred Stock and
Series F 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,
Series E Preferred Stock and Series F 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, the Series E Preferred Stock or the Series F
Preferred Stock, as the case may be, as to dividends and on liquidation) unless
all dividends accumulated on the Series A Preferred Stock, Series E Preferred
Stock and Series F Preferred Stock (and, in the case of the Series F Preferred
Stock, interest, if any, thereon) 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, which Common Stock is offered hereby) 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. Although
this amount, as noted above, will increase by the fair market value of the
Common Stock contributed to the Company's Pension Plan, the amount calculated
under such prohibition will be reduced by the value of the principal amount of
the Series F Preferred Stock anticipated to be repurchased by the Company and
by the related prepayment charges. See "Preferred Stock-Series F Preferred
Stock," below.
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, Series E Preferred Stock
and Series F Preferred Stock 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 Series F Preferred Stock is entitled to 30.604 votes per share, in each case
subject to adjustment upon the occurrence of certain events. None of the
holders of Common Stock, Series A Preferred Stock, Series E Preferred Stock or
Series F Preferred Stock 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 Series A Preferred Stock, Series E Preferred Stock and Series
F Preferred Stock, 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.
Pursuant to the terms of the Certificate of Incorporation and the Series F
Certificate of Designations, the holders of Series F Preferred Stock, but not
the holders of Series A Preferred Stock, Series E Preferred Stock or Common
Stock, may act by consent. For a description of other voting rights of holders
of the Series A Preferred Stock, Series E Preferred Stock and Series F Preferred
Stock, see "Series A Preferred Stock," "Series E Preferred Stock" and "Series
F Preferred Stock" below.
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
$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 (including the Series F Preferred Stock), 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 of the Company entitled to
vote at a meeting of stockholders, including the Series E Preferred Stock and
the Series F Preferred Stock) as one class, except as otherwise provided by the
Delaware General Corporation Law or the Company's Certificate of Incorporation,
and 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, $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 $50.355 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 Series F Preferred Stock) 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.
Series F Preferred Stock
The Company intends to repurchase all shares of Series F Preferred Stock
during the second quarter of 1995. The early repurchase of the Series F
Preferred Stock will permit NSC or its subsidiary to repay certain loans related
to its acquisition of those shares. Because NSC or its subsidiary will incur
a prepayment premium in repaying such loans early, the Company has agreed to pay
an additional amount of up to approximately $10 million in connection with the
repurchase of the full amount of the Series F Preferred Stock (and would pay a
reduced amount upon repurchase of less than the full amount of the stock). The
consummation of the Series F Preferred Stock repurchase transaction is dependent
on the preparation of documentation acceptable to the Company and NSC. Upon
repurchase of all of the outstanding shares of Series F Preferred Stock, all
rights and privileges of the owner of the Series F Preferred Stock, as described
below, would terminate.
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. The Series F
Preferred Stock entitles the holder to cumulative annual dividends of 9.48%
(based on the purchase price of the Series F Preferred Stock), payable
quarterly. Accrued but unpaid dividends on the Series F Preferred Stock bear
interest at the annual rate of 11.48%, compounded quarterly. The Series F
Preferred Stock is required to be redeemed in two stages, consisting of $85
million on December 18, 1996 and the remaining $100 million on December 17,
1999, plus, in each case, accrued and unpaid dividends thereon (and interest,
if any, thereon). In addition, the Company may be required to redeem the Series
F Preferred Stock upon the occurrence of certain events, and upon the occurrence
of certain other events, including a change in control of the Company, the
Company may be required to redeem the Series F Preferred Stock at a 10% premium.
In certain of such circumstances, the holder of the Series F Preferred Stock may
elect to receive such redemption price in cash or shares of Common Stock,
subject to certain exceptions. In the event of an early redemption, the Company
may be required to reimburse the holder of the Series F Preferred Stock for
certain costs incurred as a result of such redemption. Upon any liquidation,
dissolution or winding up of the Company, whether voluntary or involuntary, the
holder of the Series F Preferred Stock is entitled to receive $1,000 per share,
plus all accrued and unpaid dividends thereon, and interest, if
any, on such dividends, plus a "breakage amount."
The Series F Preferred Stock provides that no dividend shall be declared or
paid or set apart for payment on any other series of Preferred Stock ranking on
a parity with the Series F Preferred Stock as to dividends (including the Series
A Preferred Stock), unless there shall also be or have been declared and paid
or set apart for payment on the Series F Preferred Stock dividends, including
interest, if any, on such dividends, for all dividend payment periods of the
Series F Preferred Stock ending on or before the dividend payment date of such
parity stock ratably in proportion to the respective amounts of dividends,
including interest, if any, on such dividends, accumulated and unpaid through
such dividend period on the Series F Preferred Stock and accumulated and unpaid
on such parity stock through the dividend payment period on such parity stock
next preceding such dividend payment date.
The Series F Preferred Stock is entitled to 30.604 votes per share, which
number of votes may be adjusted from time to time upon the occurrence of certain
events. The Series F Preferred Stock votes together with shares of the Company's
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 Series E Preferred Stock) as a single class upon all matters upon which
holders of the Company's Common Stock are entitled to vote, except as otherwise
provided by the Delaware General Corporation Law or the Company's Certificate
of Incorporation.
Pursuant to the terms of the Series F Preferred Stock, the Company has the
option to exchange the Series F Preferred Stock for the Company's 10.23%
Subordinated Voting Notes (the "Exchange Notes"), provided that the holder of
the Series F Preferred Stock has consented to the exchange. Subject to the
consent of NS Finance, if the Company elects to exchange the Exchange Notes for
the Series F Preferred Stock, the holder of outstanding shares of Series F
Preferred Stock would be entitled to receive 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 Notes, the holder of the Exchange Notes
would be deemed to be a stockholder of the Company, and the Exchange Notes would
be 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 Notes would bear interest at
an annual rate of 10.23%, payable quarterly. The holder of the Exchange Notes
would be entitled to the same number of votes that it is then entitled to as the
holder of the Series F Preferred Stock on the date of the exchange. The
principal differences between the Series F Preferred Stock and the Exchange
Notes would be that (i) in the event of any liquidation, insolvency or
bankruptcy of the Company, the Exchange Notes would be entitled to payment
before any distribution with respect to the then outstanding shares of the
Company's Preferred Stock or Common Stock, (ii) the annual interest rate on the
Exchange Notes would be .75 percentage point greater than the annual dividend
rate on the Series F Preferred Stock and (iii) interest payments would be
deductible in the calculation of income subject to income tax. The Company's
ability to exchange the Series F Preferred Stock for the Exchange Notes may be
limited by the covenants and other provisions contained in agreements to which
the Company is, or may become, a party.
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, 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.
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............................. $ 34,531
Legal fees....................................... 50,000
Accounting fees and expenses..................... 60,000
Miscellaneous.................................... 15,469
_______________
Total..................................... $160,000
_______________
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.
(d) Reference is made to Section 12 of the Stock Contribution and
Registration Rights Agreement regarding the indemnification under certain
circumstances of the Company, its directors and certain of its officers, by the
trustee of the Inland Steel Pension Plan and by the Underwriters, if any.
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;
(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 17th day of May, 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 amended
Registration Statement has been signed below by the following persons in the
capacities indicated on May 17, 1995.
Signature Title
Robert J. Darnall Chairman, President and Chief
Robert J. Darnall Executive Officer and Director
Earl L. Mason Senior Vice President and Chief
Earl L. Mason Financial Officer (Principal
Financial Officer)
James M. Hemphill Controller (Principal
James M. Hemphill Accounting Officer)
A. Robert Abboud Director
James W. Cozad Director
Robert B. McKersie Director
Maurice S. Nelson, Jr. Director By: David B. Anderson
David B. Anderson
Donald S. Perkins Director Attorney-in-Fact
Joshua I. Smith Director
Nancy H. Teeters Director
Raymond C. Tower 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 Certificate of Designations, Preferences
and Rights of Series F Exchangeable Preferred
Stock of the Company. (Filed as Exhibit 4(b)
to the Company's Current Report on Form 8-K
filed on December 18, 1989, and incorporated
by reference herein.)
4.8 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.)
5.1 Opinion of Mayer, Brown & Platt................ *
10.1 Stock Contribution and Registration Rights Agreement
between the Company and the Inland Steel Pension
Plan........................................... *
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............................. *
_______________
* Previously filed
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
May 18, 1995
