Edgar Filing: RYERSON TULL INC /DE/ - Form DEF 14A
(4) holders of our voting securities approve a complete liquidation or an agreement for the sale or disposition of all or substantially all of our assets; or
(5) there occurs, with respect to a Related Company, (a) a sale or disposition of securities representing 50% or more of the combined voting power of the Related Company s securities, (b) a merger or consolidation of a Related Company with a person in which a majority-owned direct or indirect subsidiary of Ryerson Tull does not own at least 50% or more of the combined voting power of the surviving entity, or (c) the sale or disposition of all or substantially all of the assets of a Related Company to a person other than Ryerson Tull or a majority-owned subsidiary of Ryerson Tull.
A Related Company is an executive s employer, a direct or indirect parent of the employer or a subsidiary of the employer that is also a significant subsidiary of Ryerson Tull within the meaning of Rule 405 under the Securities Act of 1933.
These agreements generally provide that if an executive resigns from employment within the period ending 24 months after the month in which a change in control occurs, either (1) other than for cause or other than as a consequence of death, disability or retirement or (2) for reasons relating to a diminution of responsibilities, compensation or benefits or a significant relocation of the executive s principal place of business ( Good Reason ), he or she will receive:
a lump sum payment (the Severance Payment ) equal to three times (two times in the case of Mr. Cygan and Mr. Delaney) the sum of (1) the current annual base salary plus (2) the higher of (a) the average annual incentive bonus paid for the five years preceding resignation from employment, excluding any years in which the bonus was zero or (b) the executive s target award under the annual incentive plan for the year in which the termination occurs;
cash in lieu of any allocations, unpaid awards or rights under our annual or other incentive compensation plans;
cash equal to the value of outstanding stock options granted under our stock option plans at specified prices;
vesting of outstanding performance awards that would have been earned for the year in which the change in control occurs had the applicable performance targets been satisfied for that year;
life, disability, accident and health insurance as provided in our insurance programs for a period of 36 months (24 months in the case of Mr. Cygan and Mr. Delaney) after resignation from employment;
cash in lieu of three years (two years in the case of Mr. Cygan and Mr. Delaney) of additional accrued benefits under our pension plan; and
legal fees and expenses incurred as a result of such resignation.
The agreements do not limit or reduce any benefits that the executive may be entitled to receive pursuant to any other agreement upon a change in control. The agreements provide that the executive will be paid an additional amount which, after payment of all taxes thereon, is equal to any excise tax imposed. While this provision will preserve the severance agreement benefits for the executives, we will not be entitled to a federal income tax deduction for this excise tax payment.