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