Edgar Filing: RYERSON TULL INC /DE/ - Form DEF 14A
For each named executive officer, the Committee also established one or more additional individual strategic corporate objectives, or
management-by-objective ( MBO ) targets. The Committee evaluated attainment of MBO targets based on both objective and subjective factors. Based on the Committee s assessment of each such officer s achievement of the individual MBO targets, the Committee approved bonuses to be paid to the named executive officers. The MBO targets for Mr. Gratz, Mr. Niederpruem Mr. Cygan, and Mr. Delaney related respectively to certain operating performance improvements and joint ventures; growth initiatives; certain restructuring and loss reduction programs; and inventory and supply chain management and national accounts. The MBO award for Mr. Novich was based upon significant achievement in efficient asset utilization and continued progress in overall cost reduction.
The amount shown in the Bonus column in the Summary Compensation Table includes all of these short-term cash incentives paid to the named executive officers under the Plan.
Long-Term Incentive Compensation
The Committee makes awards and grants under the Ryerson Tull 2002 Incentive Stock Plan to provide executive officers with additional incentives for outstanding individual performance and retention, and to more closely align their interests with those of our stockholders. Grants and awards under the plan may consist of stock options, stock appreciation rights, restricted stock awards, and performance awards, or combinations of these. Under the plan, stock options and stock appreciation rights are granted at the fair market value of Company common stock on the date of grant and are generally exercisable for a period up to ten years. Fair market value is the average of the highest and lowest selling prices of the stock on the New York Stock Exchange Composite Transactions on the date of grant, or if the stock is not traded on that day, then on the next preceding day on which the stock was traded.
The Committee made no equity awards to named executive officers in 2002, as it considered the 2001 equity grants to be two-year awards.
Section 162(m) of the Internal Revenue Code limits the deductibility of certain compensation paid to named executive officers. Generally, the federal income tax deduction for compensation paid to any such officer is limited to $1 million per year, unless the compensation qualifies under an exception for performance-based compensation . The Committee generally intends to structure the compensation payable to named executive officers to permit the maximum deductibility for federal income tax purposes, but reserves the right to make non-deductible compensation payments, taking into consideration the financial effects of such payments on the Company.
Gains on stock option exercises under the Company s incentive stock plans are intended to qualify for the performance-based compensation exception, so that the Company s deduction for those gains will not be subject to the Section 162(m) limit. The Annual Incentive Plan permits the Committee to make awards under the plan, which qualify for the performance-based compensation exception, as well as awards that do not qualify for the exception. The Committee anticipates that it would generally not make non-qualifying awards, if such awards would cause a named executive officer s compensation to exceed the $1 million limit. No named executive officer received compensation exceeding $1 million for 2002.
Jerry K. Pearlman, Chairman
Jameson A. Baxter