Edgar Filing: RYERSON TULL INC /DE/ - Form DEF 14A
limited events occur coincident with or within six months after his or her resignation. A potential change in control generally occurs if:
we enter into an agreement, the consummation of which would result in the occurrence of a change in control;
any person (including Ryerson Tull) publicly announces an intention to take or to consider taking actions that, if consummated, would constitute a change in control;
any person who is or becomes the owner of 9.5% or more of the combined voting power of our then-outstanding securities increases beneficial ownership of such securities by 5% or more over the percentage so owned on the date of the agreements; or
the Board adopts a resolution that a potential change in control has occurred for purposes of the agreements.
The Company s 1998 sale of its subsidiary Inland Steel Company ( ISC ) to Ispat International N.A. constituted a change in control under the change in control agreements with respect to Ryerson Tull and ISC but not with respect to pre-merger Ryerson Tull. After that acquisition, Ryerson Tull and Mr. Gratz entered into amendments to Mr. Gratz s change in control agreement. Under the amended agreement he continues to be entitled to legal fees and payments with respect to any excise taxes in accordance with the original agreements.
We have instituted a practice of requiring non-compete and non-solicitation agreements from executive officers, including each of the named executive officers, that provide for a post-termination non-compete and non-solicitation period and salary and benefit continuation if the executive is discharged without cause or resigns for good reason.
These agreements also generally provide that if an executive s termination occurs, either (1) other than for cause or other than as a consequence of death, disability or retirement or (2) for Good Reason (including the failure to provide bonus opportunities or stock awards based on historical practice in the case of Mr. Novich), he will receive his salary, bonus and benefits in effect as of his termination date. The bonus shall be two (three in the case of Mr. Novich) payments of the average annual amount of the award paid to him for the three years immediately preceding that in which the termination date occurs (excluding any years in which the bonus was zero in the case of Mr. Novich). Twenty-four (thirty-six in the case of Mr. Novich) months of additional age and service credit will be provided for determining an executive s supplemental pension benefits using the methodology described in his change in control agreement except that any lump sum payment will be made twenty-four (thirty-six in the case of Mr. Novich) months after the executive s termination date and only if he has not violated the confidentiality, nonsolicitation and noncompetition provisions of his employment agreement.
Mr. Novich s agreement further provides that all existing unvested options as of his termination date would become vested and he would be afforded a 36-month extension (but not beyond the original termination date of the options) from his termination date to exercise any remaining unexercised options. The agreement also provides Mr. Novich with certain post-termination opportunities to exercise his options, indemnification, financial services counseling, and executive outplacement and office services following his termination.
Mr. Novich, Mr. Gratz and Mr. Niederpruem are covered by a group business accident insurance policy providing $500,000 each in coverage, for which the Company pays the premium.
PROPOSAL TO APPROVE THE RYERSON TULL ANNUAL INCENTIVE PLAN