1
Exhibit 10.O(8)
Inland Steel Industries, Inc.
30 West Monroe Street
Chicago, Illinois 60603
March 23, 1994
Vicki L. Avril
Inland Steel Industries, Inc.
30 West Monroe Street
Chicago, Illinois 60603
Dear Ms. Avril:
Inland Steel Industries, Inc. (together with its subsidiaries, the
"Company") considers it essential to the best interests of its stockholders to
foster the continuous employment of key management personnel. In this
connection, the Board of Directors of the Company (the "Board") recognizes
that, as is the case with many publicly held corporations, the possibility of a
change in control may exist and that such possibility, and the uncertainty and
questions which it may raise among management, may result in the departure or
distraction of management personnel to the detriment of the Company and its
stockholders.
The Board has determined that appropriate steps should be taken to reinforce
and encourage the continued attention and dedication of members of the
Company's management, including yourself, to their assigned duties without
distraction in the face of potentially disturbing circumstances arising from
the possibility of a change in control of the Company, although no such
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change is now contemplated.
In order to induce you to remain in the employ of the Company and in
consideration of your agreement set forth in Subsection 2(ii) hereof, the
Company agrees that you shall receive the severance benefits set forth in this
letter agreement ("Agreement") in the event your employment with the Company is
terminated subsequent to a "change in control of the Company" (as defined in
Section 2 hereof) under the circumstances described below. In the event that
you receive severance benefits hereunder, such benefits shall be in lieu of,
and you shall not be entitled to receive, any benefits or payments under any
other severance plan, policy or agreement of or with the Company.
1. Term of Agreement. This Agreement shall commence
on the date hereof and shall continue in effect through December 31, 1994;
provided, however, that commencing on January 1, 1995 and each January 1
thereafter, the term of this Agreement shall automatically be extended for one
additional year unless, not later than September 30 of the preceding year, the
Company shall have given notice that it does not wish to extend this Agreement;
provided further, if a change in control of the Company shall have occurred
during the original or extended term of this Agreement, this Agreement shall
continue in effect for a period of twenty-four (24) months beyond the month in
which such change in control occurred.
2. Change in Control. (i) No benefits shall be payable hereunder unless
there shall have been a change in control of the
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Company, as set forth below. For purposes of this Agreement, a "change in
control of the Company" shall be deemed to have occurred if (A) any "person"
(as such term is used in Sections 13(d) and 14(d) of the Securities Exchange
Act of 1934, as amended (the "Exchange Act")), other than (w) the Company or
any of its subsidiaries, (x) a trustee or other fiduciary holding securities
under an employee benefit plan of the Company or any of its subsidiaries, (y)
an underwriter temporarily holding securities pursuant to an offering of such
securities, or (z) a corporation owned, directly or indirectly, by the
stockholders of the Company in substantially the same proportions as their
ownership of stock of the Company, is or becomes the "beneficial owner" (as
defined in Rule 13d-3 under the Exchange Act), directly or indirectly, of
securities of the Company (not including in the securities beneficially owned
by such person any securities acquired directly from the Company or its
affiliates) representing 40% or more of the combined voting power of the
Company's then outstanding securities; (B) during any period of two consecutive
years (not including any period prior to the execution of this Agreement),
individuals who at the beginning of such period constitute the Board and any
new director (other than a director designated by a person who has entered into
an agreement with the Company to effect a transaction described in clauses (A),
(C) or (D) of this Subsection) whose election by the Board or nomination for
election by the Company's stockholders was approved by a vote of at least
two-thirds (2/3) of the directors then still in office who either were
directors at the
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beginning of the period or whose election or nomination for election was
previously so approved ("Continuing Directors"), cease for any reason to
constitute a majority thereof; (C) the stockholders of the Company approve a
merger or consolidation of the Company with any other corporation, other than a
merger or consolidation which would result in the voting securities of the
Company outstanding immediately prior thereto continuing to represent (either
by remaining outstanding or by being converted into voting securities of the
surviving entity), in combination with the ownership of any trustee or other
fiduciary holding securities under an employee benefit plan of the Company, at
least 80% of the combined voting power of the voting securities of the Company
or such surviving entity outstanding immediately after such merger or
consolidation, or a merger or consolidation effected to implement a
recapitalization of the Company (or similar transaction) in which no person
acquires more than 50% of the combined voting power of the Company's then
outstanding securities; or (D) the stockholders of the Company approve a plan
of complete liquidation of the Company or an agreement for the sale or
disposition by the Company of all or substantially all the Company's assets.
(ii) For purposes of this Agreement, a "potential change in control of the
Company" shall be deemed to have occurred if (A) the Company enters into an
agreement, the consummation of which would result in the occurrence of a change
in control of the Company, (B) any person (including the Company) publicly
announces
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an intention to take or to consider taking actions which if consummated would
constitute a change in control of the Company; (C) any person, other than (w)
the Company or any of its subsidiaries, (x) a trustee or other fiduciary
holding securities under an employee benefit plan of the Company or any of its
subsidiaries, (y) an underwriter temporarily holding securities pursuant to an
offering of such securities, or (z) a corporation owned, directly or
indirectly, by the stockholders of the Company in substantially the same
proportions as their ownership of stock of the Company, who is or becomes the
beneficial owner, directly or indirectly, of securities of the Company
representing 9.5% or more of the combined voting power of the Company's then
outstanding securities, increases his beneficial ownership of such securities
by 5% or more over the percentage so owned by such person on the date hereof;
or (D) the Board adopts a resolution to the effect that, for purposes of this
Agreement, a potential change in control of the Company has occurred.
You agree that, subject to the terms and conditions of this Agreement, in
the event of a potential change in control of the Company, you will remain in
the employ of the Company until the earliest of (i) a date which is six (6)
months from the occurrence of such potential change in control of the Company,
(ii) the termination by you of your employment by reason of Disability or
Retirement, as defined in Subsection 3(i), or (iii) the occurrence of a change
in control of the Company.
(iii) The foregoing to the contrary notwithstanding, a change in control
shall not be deemed to have occurred with respect
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to you if (A) the event first giving rise to the potential change in control
involves a publicly announced transaction or publicly announced proposed
transaction which at the time of the announcement has not been previously
approved by the Board of Directors and (B) you are "part of a purchasing group"
proposing the transaction. A change in control shall also not be deemed to
have occurred with respect to you if you are part of a purchasing group which
consummates the change in control transaction. You shall be deemed "part of a
purchasing group" for purposes of the two preceding sentences if you are an
equity participant or have agreed to become an equity participant in the
purchasing company or group (except for (A) passive ownership of less than 1%
of the stock of the purchasing company or (B) ownership of equity participation
in the purchasing company or group which is otherwise not deemed to be
significant, as determined prior to the change in control by a majority of the
non-employee Continuing Directors).
3. Termination Following Change in Control. If a change in control of the
Company, as defined in Section 2 hereof, shall have occurred, you shall be
entitled to the benefits provided in Subsection 4(iii) hereof upon the
subsequent termination of your employment during the term of this Agreement
unless such termination is (A) because of your death, Disability or Retirement,
(B) by the Company for Cause, or (C) by you other than for Good Reason.
(i) Disability; Retirement. If, as a result of your incapacity due to
physical or mental illness, you shall have been
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absent from the full-time performance of your duties with the Company for six
(6) consecutive months, and within thirty (30) days after written notice of
termination is given you shall not have returned to the full-time performance
of your duties, your employment may be terminated for "Disability".
Termination by the Company or you of your employment based on "Retirement"
shall mean termination in accordance with the Company's retirement policy,
including early retirement, generally applicable to its salaried employees or
in accordance with any retirement arrangement established with your consent
with respect to you.
(ii) Cause. Termination by the Company of your employment for "Cause" shall
mean termination upon (A) the willful and continued failure by you to
substantially perform your duties with the Company (other than any such failure
resulting from your incapacity due to physical or mental illness or any such
actual or anticipated failure after the issuance of a Notice of Termination by
you for Good Reason as defined in Subsections 3(iv) and 3(iii), respectively)
after a written demand for substantial performance is delivered to you by the
Board, which demand specifically identifies the manner in which the Board
believes that you have not substantially performed your duties, or (B) the
willful engaging by you in conduct which is demonstrably and materially
injurious to the Company, monetarily or otherwise. For purposes of this
Subsection, no act, or failure to act, on your part shall be deemed "willful"
unless done, or omitted to be done, by you not in good faith and without
reasonable belief that your action or omission
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was in the best interest of the Company. Notwithstanding the foregoing, you
shall not be deemed to have been terminated for Cause unless and until there
shall have been delivered to you a copy of a resolution duly adopted by the
affirmative vote of not less than three-quarters (3/4) of the entire membership
of the Board at a meeting of the Board called and held for such purpose (after
reasonable notice to you and an opportunity for you, together with your
counsel, to be heard before the Board), finding that in the good faith opinion
of the Board you were guilty of conduct set forth above in clauses (A) or (B)
of the first sentence of this Subsection and specifying the particulars thereof
in detail.
(iii) Good Reason. You shall be entitled to terminate your employment for
Good Reason. For purposes of this Agreement, "Good Reason" shall mean, without
your express written consent, the occurrence after a change in control of the
Company of any of the following circumstances unless, in the case of paragraphs
(A), (E), (F), (G) or (H), such circumstances are fully corrected prior to the
Date of Termination specified in the Notice of Termination, as defined in
Subsections 3(v) and 3(iv), respectively, given in respect thereof:
(A) the assignment to you of any duties inconsistent with your status as an
executive officer of the Company or a substantial adverse alteration in the
nature or status of your responsibilities from those in effect immediately
prior to the change in control of the Company other than any such
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alteration primarily attributable to the fact that the Company may no longer
be a public company;
(B) a reduction by the Company in your annual base salary as in effect on
the date hereof or as the same may be increased from time to time;
(C) the Company's requiring that your principal place of business be at an
office located more than 75 miles from where your principal place of
business is located immediately prior to the change in control of
the Company, except for required travel on the Company's business to an
extent substantially consistent with your present business travel
obligations;
(D) the failure by the Company, without your consent, to pay to you any
portion of your current compensation, or to pay to you any portion of an
installment of deferred compensation under any deferred compensation program
of the Company, within seven (7) days of the date such compensation is due;
(E) the failure by the Company to continue in effect any compensation plan
in which you participate immediately prior to the change in control of the
Company which is material to your total compensation, including but not
limited to the Company's Annual Incentive Plan, Inland
Special Achievement Award Plan, Inland 1986 Employee Stock Purchase Plan,
Inland 1992 Incentive Stock Plan, Supplemental Retirement Benefit Plan,
Special Retirement Benefit Plan, Inland Steel Industries Non-Qualified
Thrift Plan, Inland Steel Industries Pension
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Plan and the Inland Steel Industries Thrift Plan or any substitute plans
adopted prior to the change in control, unless an equitable arrangement
(embodied in an ongoing substitute or alternative plan) has been made with
respect to such plan, or the failure by the Company to continue your
participation therein, (or in such substitute or alternative plan) on a basis
not materially less favorable, both in terms of the amount of benefits provided
and the level of your participation relative to other participants, as existed
at the time of the change in control;
(F) the failure by the Company to continue to provide you with benefits
substantially similar to those enjoyed by you under any of the Company's
pension, life insurance, medical, health and accident, or disability plans in
which you were participating at the time of the change in control of the
Company, the taking of any action by the Company which would directly or
indirectly materially reduce any of such benefits or deprive you of any
material fringe benefit enjoyed by you at the time of the change in control
of the Company, or the failure by the Company to provide you with the number
of paid vacation days to which you are entitled on the basis of years of
service with the Company in accordance with the Company's normal vacation
policy in effect at the time of the change in control of the Company;
(G) the failure of the Company to obtain a satisfactory agreement from any
successor to assume and agree to perform
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this Agreement, as contemplated in Section 5 hereof; or
(H) any purported termination of your employment which is not effected
pursuant to a Notice of Termination satisfying the requirements of Subsection
(iv) below (and, if applicable, the requirements of Subsection (ii) above);
for purposes of this Agreement, no such purported termination shall be
effective.
Your right to terminate your employment pursuant to this Subsection shall not
be affected by your incapacity due to physical or mental illness. Your
continued employment shall not constitute consent to, or a waiver of rights
with respect to, any circumstance constituting Good Reason hereunder.
(iv) Notice of Termination. Any purported termination of your employment by
the Company or by you shall be communicated by written Notice of Termination to
the other party hereto in accordance with Section 6 hereof. For purposes of
this Agreement, a "Notice of Termination" shall mean a notice which shall
indicate the specific termination provision in this Agreement relied upon and
shall set forth in reasonable detail the facts and circumstances claimed to
provide a basis for termination of your employment under the provision so
indicated.
(v) Date of Termination, Etc. "Date of Termination" shall mean (A) if your
employment is terminated for Disability, thirty (30) days after Notice of
Termination is given (provided that you shall not have returned to the
full-time performance of your duties during such thirty (30) day period), and
(B) if your
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employment is terminated pursuant to Subsection (ii) or (iii) above
or for any other reason (other than Disability), the date specified in the
Notice of Termination (which, in the case of a termination pursuant to
Subsection (ii) above shall not be less than thirty (30) days, and in the case
of a termination pursuant to Subsection (iii) above shall not be less than
fifteen (15) nor more than sixty (60) days, respectively, from the date such
Notice of Termination is given); provided that if within fifteen (15) days
after any Notice of Termination is given, or, if later, prior to the Date of
Termination (as determined without regard to this proviso), the party receiving
such Notice of Termination notifies the other party that a dispute exists
concerning the termination, the Date of Termination shall be the date on which
the dispute is finally determined, either by mutual written agreement of the
parties, by a binding arbitration award, or by a final judgment, order or
decree of a court of competent jurisdiction (which is not appealable or with
respect to which the time for appeal therefrom has expired and no appeal has
been perfected); provided further that the Date of Termination shall be
extended by a notice of dispute only if such notice is given in good faith and
the party giving such notice pursues the resolution of such dispute with
reasonable diligence. Notwithstanding the pendency of any such dispute, the
Company will continue to pay you your full compensation in effect when the
notice giving rise to the dispute was given (including, but not limited to,
base salary) and continue you as a participant in all compensation, benefit and
insurance
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plans in which you were participating when the notice giving rise to the
dispute was given, until the dispute is finally resolved in accordance with
this Subsection. Amounts paid under this Subsection are in addition to all
other amounts due under this Agreement and shall not be offset against or
reduce any other amounts due under this Agreement.
4. Compensation Upon Termination or During Disability. Following a change
in control of the Company, as defined by Subsection 2(i), upon termination of
your employment or during a period of Disability you shall be entitled to the
following benefits:
(i) During any period that you fail to perform your full-time duties with
the Company as a result of incapacity due to physical or mental illness, you
shall continue to receive your base salary at the rate in effect at the
commencement of any such period, together with all compensation payable to you
under the Inland Steel Industries Pension Plan, Supplemental Retirement Benefit
Plan or Special Retirement Benefit Plan during such period, until this
Agreement is terminated pursuant to Section 3(i) hereof. Thereafter, or in the
event your employment shall be terminated by the Company or by you for
Retirement, or by reason of your death, your benefits shall be determined under
the Company's retirement, insurance and other compensation programs then in
effect in accordance with the terms of such programs.
(ii) If your employment shall be terminated by the Company for Cause or by
you other than for Good Reason, Disability,
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death or Retirement, the Company shall pay you your full base salary through
the Date of Termination at the rate in effect at the time Notice of Termination
is given, plus all other amounts to which you are entitled under any
compensation plan of the Company at the time such payments are due, and the
Company shall have no further obligations to you under this Agreement.
(iii) If your employment by the Company shall be terminated (a) by the
Company other than for Cause, Retirement or Disability or (b) by you for Good
Reason, then you shall be entitled to the benefits provided below:
(A) the Company shall pay you your full base salary through the Date of
Termination at the rate in effect at the time Notice of Termination is given,
plus all other amounts to which you are entitled under any compensation plan
of the Company, at the time such payments are due, except as otherwise
provided below.
(B) in lieu of any further salary payments to you for periods subsequent to
the Date of Termination, the Company shall pay as severance pay to you a lump
sum severance payment (together with the payments provided in paragraphs
C, D and E below, the "Severance Payments") equal to two times the sum of
(x) your annual base salary in effect immediately prior to the occurrence of
the circumstance giving rise to the Notice of Termination given in respect
thereof, and (y) the average annual aggregate amount of the Award paid to
you pursuant to the Annual Incentive Plan or similar predecessor or
successor
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plan with respect to the two years preceding that in which the Date of
Termination occurs.
(C) notwithstanding any provision of the Annual Incentive Plan and the
Inland Special Achievement Award Plan, the Company shall pay to you a lump
sum amount equal to the sum of (x) any incentive compensation which has been
allocated or awarded to you for a completed fiscal year or other measuring
period preceding the Date of Termination but has not yet been paid, and (y) a
pro rata portion to the Date of Termination for the current fiscal year or
other measuring period of the amount equal to the Target Award percentage
applicable to you under the Annual Incentive Plan or similar successor plan
on the Date of Termination times your annual base salary then in effect.
(D) in lieu of shares of common stock of the Company ("Company Shares")
issuable upon exercise of outstanding options ("Options"), if any, granted to
you under the Company's stock option plans (which Options shall be cancelled
upon the making of the payment referred to below), you shall receive an
amount in cash equal to the product of (i) the excess of (x) in the case of
incentive stock options (as defined in Section 422A of the Code) ("ISOs")
granted after the date hereof, the closing price of the Company's shares as
reported on the New York Stock Exchange Composite Tape on or nearest the Date
of Termination, or (y) in the case of all other Options, the higher of such
closing price or the highest
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per share price for Company Shares actually paid in connection with any
change in control of the Company, over the per share exercise price of each
Option held by you (whether or not then fully exercisable), times (ii) the
number of Company Shares covered by each such option.
(E) in lieu of Company Shares awarded or issuable to you as performance
and/or restricted shares, if any, pursuant to the Inland 1992 Incentive Stock
Plan, the Inland 1988 Incentive Stock Plan, the Inland 1984 Incentive Stock
Plan or similar successor plan (which Company Shares shall be cancelled upon
the making of the payment referred to below), you shall receive an amount in
cash equal to the product of (i) the higher of the closing price of Company
Shares as reported on the New York Stock Exchange Composite Tape on the Date
of Termination or the highest per share price for Company Shares actually paid
in connection with any change in control of the Company times (ii) the total
of the number of restricted shares awarded to you and then outstanding pursuant
to the Inland 1992 Incentive Stock Plan, the Inland 1988 Incentive Stock Plan,
the Inland 1984 Incentive Stock Plan and/or any similar successor plan, plus
a number of performance shares equal to the total number of performance shares
paid or payable to you with respect to the two immediately preceding
performance periods under any performance award or awards made pursuant to
the Inland 1992 Incentive Stock Plan and/or any similar successor plan.
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(F) the Company shall also pay to you all legal fees and expenses incurred
by you as a result of such termination (including all such fees and expenses,
if any, incurred in contesting or disputing any such termination or in
seeking to obtain or enforce any right or benefit provided by this Agreement
or in connection with any tax audit or proceeding to the extent attributable
to the application of Section 4999 of the Code to any payment or benefit
provided hereunder). Such payments shall be made at the later of the times
specified in paragraph (I) below, or within five (5) days after your request
for payment accompanied with such evidence of fees and expenses incurred as
the Company reasonably may require.
(G) in the event that the Executive becomes entitled to any payments
provided for hereinabove (the "Contract Payments"), if the Contract Payments
or other portion of the Total Payments (as defined below) will be subject to
the tax (the "Excise Tax") imposed by Section 4999 of the Internal Revenue
Code of 1986, as amended (the "Code"), the Company shall pay to the
Executive, no later than the fifth day following the Date of Termination, an
additional amount (the "Gross-Up Payment") such that the net amount retained
by the Executive, after deduction of any Excise Tax on the Contract Payments
and such other Total Payments and any federal and state and
local income tax and Excise Tax upon the payment provided for by this
subsection, shall be equal to the Contract Payments and such other Total
Payments.
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(H) for purposes of determining whether any of the payments will be subject
to the Excise Tax and the amount of such Excise Tax, (i) any other payments
or benefits received or to be received by the Executive in connection with a
change in control of the Company or the Executive's termination of employment
(whether pursuant to the terms of this Agreement or any other plan,
arrangement or agreement with the Company, any person whose actions result in
a change in control or any person affiliated with the Company or such person)
payable pursuant to the terms of this Agreement or any other plan,
arrangement or agreement with the Company, any person whose actions result in
a change in control or any person affiliated with the Company or such person
(together with the Contract Payments, the "Total Payments"), shall be treated
as "parachute payments" within the meaning of Section 280G(b)(2) of the Code
and all "excess parachute payments" within the meaning of Section 280G(b)(1)
of the Code shall be treated as subject to the Excise Tax unless in the
opinion of tax counsel selected by the Company's independent auditors and
reasonably acceptable to the Executive, such other payments or benefits (in
whole or in part) do not constitute parachute payments, including by reason
of Section 280G(b)(4)(A) of the Code or such excess parachute payments (in
whole or in part) represent reasonable compensation for services actually
rendered within the meaning of Section 280G(b)(B) of the Code, in excess of
the base amount allocable to such reasonable compensation
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within the meaning of Section 280G(b)(3) of the Code, or are otherwise not
subject to the Excise Tax, (ii) the amount of the Total Payments which shall be
treated as subject to the Excise Tax shall be equal to the lesser of (A) the
amount of the Total Payments or (B) the amount of excess parachute payments
within the meaning of Section 280G(b)(1) of the Code (after applying clause (i)
above), and (iii) the value of any noncash benefits or any deferred payment or
benefit shall be determined by the Company's independent auditors in accordance
with the principles of Sections 280G(d)(3) and (4) of the Code. For purposes
of determining the amount of the Gross-Up Payment, the Executive shall be
deemed to pay federal income taxes at the highest marginal rate of federal
income taxation in the calendar year in which the Gross-Up Payment is to be
made and state and local income taxes at the highest marginal rate of taxation
in the state and locality of the Executive's residence on the Date of
Termination, net of the maximum reduction in federal income taxes which could
be obtained from deduction of such state and local taxes.
(I) in the event that the Excise Tax is subsequently determined to be less
than the amount taken into account hereunder at the time of termination of
the Executive's employment, the Executive shall repay to the Company at the
time that the amount of such reduction in Excise Tax is finally determined
the portion of the Gross-
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Up Payment attributable to such reduction (plus the portion of the Gross-Up
Payment attributable to the Excise Tax and federal and state and local income
tax imposed on the Gross-Up Payment being repaid by the Executive if such
repayment results in a reduction in Excise Tax and/or a federal and state and
local income tax deduction) plus interest on the amount of such repayment at
the rate provided in Section 1274(b)(2)(B) of the Code. In the event that the
Excise Tax is determined to exceed the amount taken into account hereunder at
the time of the termination of the Executive's employment (including by reason
of any payment the existence or amount of which cannot be determined at the
time of the Gross-Up Payment), the Company shall make an additional gross-up
payment in respect to such excess (plus any interest payable with respect to
such excess) at the time that the amount of such excess is finally determined.
(J) the payments provided for in paragraphs (B), (C),(D), and (E) above,
shall be made not later than the fifth day following the Date of Termination,
provided, however, that if the amounts of such payments cannot be finally
determined on or before such day, the Company shall pay to you on such day an
estimate, as determined in good faith by the Company, of the minimum amount
of such payments and shall pay the remainder of such payments (together with
interest at the rate provided in Section 1274(b)(2)(B) of the Code) as soon
as the amount thereof can be determined but in no event later than the
thirtieth day after the Date of Termination. In the event
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that the amount of the estimated payments exceeds the amount subsequently
determined to have been due, such excess shall constitute a loan by the
Company to you payable on the fifth day after demand by the Company (together
with interest at the rate provided in Section 1274(b)(2)(B) of the Code).
(iv) If your employment shall be terminated (A) by the Company other than
for Cause, Retirement or Disability or (B) by you for Good Reason, then for a
twenty-four (24) month period after such termination, the Company shall arrange
to provide you with: (1) life, disability, accident and health insurance
benefits substantially similar to those which you are receiving immediately
prior to the Notice of Termination, (2) financial advisory services similar to
those provided currently to executives of the Company by Ayco Corporation and
(3) outplacement services. Benefits otherwise receivable by you pursuant to
this Subsection 4(iv) shall be reduced to the extent comparable benefits are
actually received by you during the twenty-four (24) month period following
your termination, and any such benefits actually received by you shall be
reported by the Company.
(v) if your employment shall be terminated (A) by the Company other than for
Cause, Retirement or Disability or (B) by you for Good Reason, then in addition
to the retirement benefits to which you are entitled under the Inland Steel
Industries Pension Plan, Supplemental Retirement Benefit Plan or Special
Retirement Benefit Plan or any successor plans thereto, the Company shall pay
you in cash at the time and in the manner provided in paragraph (K)
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of Subsection 4(iii), a lump sum equal to the excess of (x) the actuarial
equivalent of the retirement pension (taking into account any early retirement
substitute associated therewith and determined as a straight life annuity
commencing at age sixty-five (65) or any earlier date, but in no event earlier
than the second anniversary of the Date of Termination whichever annuity yields
a greater benefit) which you would have accrued under the terms of the Inland
Steel Industries Pension Plan (without regard to any amendment to the Inland
Steel Industries Pension Plan made subsequent to a change in control of the
Company and on or prior to the Date of Termination, which amendment adversely
affects in any manner the computation of retirement benefits thereunder),
determined as if you were fully vested thereunder and had accumulated (after
the Date of Termination) twenty-four (24) additional months of service credit
thereunder at your highest annual rate of compensation during the twelve (12)
months immediately preceding the Date of Termination, over (y) the actuarial
equivalent of the retirement pension (taking into account any early retirement
substitute associated therewith and determined as a straight life annuity
commencing at age sixty-five (65) or any earlier date, but in no event earlier
than the Date of Termination whichever annuity yields a greater benefit) which
you had then accrued pursuant to the provisions of the Inland Steel Industries
Pension Plan. For purposes of this Subsection, "actuarial equivalent" shall be
determined using the same assumptions utilized under the Inland Steel
Industries Pension Plan for purposes of determining
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Page 23
alternative forms of benefits immediately prior to the change in control of the
Company.
(vi) You shall not be required to mitigate the amount of any payment
provided for in this Section 4 by seeking other employment or otherwise, nor
shall the amount of any payment or benefit provided for in this Section 4 be
reduced by any compensation earned by you as the result of employment by
another employer, by retirement benefits, by offset against any amount claimed
to be owed by you to the Company, or otherwise.
(vii) In addition to all other amounts payable to you under this Section 4,
you shall be entitled to receive all benefits payable to you under the Inland
Steel Industries Pension Plan, the Inland Steel Industries Thrift Plan,
Supplemental Retirement Benefit Plan, Special Retirement Benefit Plan, Inland
Steel Industries Non-Qualified Thrift Plan and any other plan or agreement
relating to retirement benefit.
5. Successors; Binding Agreement. (i) The Company will require any
successor (whether direct or indirect, by purchase, merger, consolidation or
otherwise) to all or substantially all of the business and/or assets of the
Company to expressly assume and agree to perform this Agreement in the same
manner and to the same extent that the Company would be required to perform it
if no such succession had taken place. Failure of the Company to obtain such
assumption and agreement prior to the effectiveness of any such succession
shall be a breach of this Agreement and shall entitle you to compensation from
the Company in the same amount and on the
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March 23, 1994
Page 24
same terms as you would be entitled to hereunder if you terminate your
employment for Good Reason following a change in control of the Company, except
that for purposes of implementing the foregoing, the date on which any such
succession becomes effective shall be deemed the Date of Termination. As used
in this Agreement, "Company" shall mean the Company as hereinbefore defined and
any successor to its business and/or assets as aforesaid which assumes and
agrees to perform this Agreement by operation of law, or otherwise.
(ii) This Agreement shall inure to the benefit of and be enforceable by your
personal or legal representatives, executors, administrators, successors,
heirs, distributees, devisees and legatees. If you should die while any amount
would still be payable to you hereunder if you had continued to live, all such
amounts, unless otherwise provided herein, shall be paid in accordance with the
terms of this Agreement to your devisee, legatee or other designee or, if there
is no such designee, to your estate.
6. Notice. For the purpose of this Agreement, notices and all other
communications provided for in the Agreement shall be in writing and shall be
deemed to have been duly given when delivered or mailed by United States
registered mail, return receipt requested, postage prepaid, addressed to the
respective addresses set forth on the first page of this Agreement, provided
that all notice to the Company shall be directed to the attention of the Board
with a copy to the Secretary of the Company, or to
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March 23, 1994
Page 25
such other address as either party may have furnished to the other in writing
in accordance herewith, except that notice of change of address shall be
effective only upon receipt.
7. Miscellaneous. No provision of this Agreement may be modified, waived
or discharged unless such waiver, modification or discharge is agreed to in
writing and signed by you and such officer as may be specifically designated by
the Board. No waiver by either party hereto at any time of any breach by the
other party hereto of, or compliance with, any condition or provision of this
Agreement to be performed by such other party shall be deemed a waiver of
similar or dissimilar provisions or conditions at the same or at any prior or
subsequent time. No agreements or representations, oral or otherwise, express
or implied, with respect to the subject matter hereof have been made by either
party which are not expressly set forth in this Agreement. The validity,
interpretation, construction and performance of this Agreement shall be
governed by the laws of the State of Illinois. All references to sections of
the Exchange Act or the Code shall be deemed also to refer to any successor
provisions to such sections. Any payments provided for hereunder shall be paid
net of any applicable withholding required under federal, state or local law.
The obligations of the Company under Section 4 shall survive the expiration of
the term of this Agreement.
8. Validity. The invalidity or unenforceability of any provision of this
Agreement shall not affect the validity or
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Page 26
enforceability of any other provision of this Agreement, which shall remain in
full force and effect.
9. Counterparts. This Agreement may be executed in several counterparts,
each of which shall be deemed to be an original but all of which together will
constitute one and the same instrument.
10. Settlement of Disputes; Arbitration. All claims by the Executive for
benefits under this Agreement shall be directed to and determined by the Board
and shall be in writing. Any denial by the Board of a claim for benefits under
this Agreement shall be delivered to the Executive in writing and shall set
forth the specific reasons for the denial and the specific provisions of this
Agreement relied upon. The Board shall afford a reasonable opportunity to the
Executive for a review of the decision denying a claim and shall further allow
the Executive to appeal to the Board a decision of the Board within sixty (60)
days after notification by the Board that the Executive's claim has been
denied. Any further dispute or controversy arising under or in connection with
this Agreement shall be settled exclusively by arbitration in Chicago, Illinois
in accordance with the rules of the American Arbitration Association then in
effect. Judgment may be entered on the arbitrator's award in any court having
jurisdiction; provided, however, that you shall be entitled to seek specific
performance of your right to be paid until the Date Of Termination during the
pendency of any dispute or controversy arising under or in connection with this
Agreement.
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Page 27
If this letter sets forth our agreement on the subject matter hereof, kindly
sign and return to the Company the enclosed copy of this letter which will then
constitute our agreement on this subject.
Sincerely,
INLAND STEEL INDUSTRIES, INC.
By \s\ Judd R. Cool
-----------------------------------
Judd R. Cool
Vice President - Human Resources
Agreed to this 23rd day
of March 1994
/s/ Vicki L. Avril
- ------------------------