================================================================================
SCHEDULE 14A
(RULE 14a-101)
INFORMATION REQUIRED IN PROXY STATEMENT
PROXY STATEMENT PURSUANT TO SECTION 14(A) OF
THE SECURITIES EXCHANGE ACT OF 1934
(AMENDMENT NO. )
Filed by the Registrant [_]
Filed by a Party other than the Registrant [X]
Check the appropriate box:
[_] Preliminary Proxy Statement
[_] Confidential, for Use of the Commission Only
(as permitted by Rule 14a-6(e)(2))
[_] Definitive Proxy Statement
[_] Definitive Additional Materials
[X] Soliciting material Pursuant to Rule 14a-11(c) or Rule 14a-12
RYERSON INC.
------------------------------------------------------------------------
(Name of Registrant as Specified In Its Charter)
HARBINGER CAPITAL PARTNERS MASTER FUND I, LTD.
AND
HARBINGER CAPITAL PARTNERS SPECIAL SITUATIONS FUND, L.P.
------------------------------------------------------------------------
(Name of Person(s) Filing Proxy Statement, if other than the Registrant)
PAYMENT OF FILING FEE (Check the appropriate box):
[X] No fee required.
[_] Fee computed on table below per Exchange Act Rules 14a-6(i)(1) and 0-11.
1) Title of each class of securities to which transaction applies:__________
2) Aggregate number of securities to which transaction
applies:_______________
3) Per unit price or other underlying value of transaction computed pursuant
to Exchange Act Rule 0-11 (Set forth the amount on which the filing fee
is calculated and state how it was determined):__________________________
4) Proposed maximum aggregate value of transaction:_________________________
5) Total fee paid:__________________________________________________________
[_] Fee paid previously with preliminary materials.
[_] Check box if any part of the fee is offset as provided by Exchange Act Rule
0-11(a)(2) and identify the filing for which the offsetting fee was paid
previously. Identify the previous filing by registration statement number,
or the Form or Schedule and the date of its filing.
1) Amount Previously Paid:__________________________________________________
2) Form, Schedule or Registration Statement No.:____________________________
3) Filing Party:
4) Date Filed:_______________________________________________
================================================================================
The Notice of Nomination of Candidates for Election to the Board of Directors
and to Present a Stockholder Proposal at the Upcoming Annual Meeting of Ryerson
Inc. was delivered to the Company on January 2, 2007. A related press release,
issued on January 2, 2007 is also attached.
* * *
HARBINGER INTENDS TO MAKE A PRELIMINARY FILING WITH THE SECURITIES AND EXCHANGE
COMMISSION OF A PROXY STATEMENT AND AN ACCOMPANYING PROXY CARD TO BE USED TO
SOLICIT PROXIES IN CONNECTION WITH THE RYERSON INC. 2007 ANNUAL MEETING.
SECURITY HOLDERS ARE ADVISED TO READ THE PROXY STATEMENT AND OTHER DOCUMENTS
RELATED TO THE SOLICITATION OF PROXIES FROM STOCKHOLDERS OF RYERSON INC. FOR
USE AT THE 2007 ANNUAL MEETING WHEN THEY BECOME AVAILABLE BECAUSE THEY WILL
CONTAIN IMPORTANT INFORMATION, INCLUDING INFORMATION RELATING TO THE
PARTICIPANTS IN SUCH PROXY SOLICITATION. WHEN COMPLETED, A DEFINITIVE PROXY
STATEMENT AND A FORM OF PROXY WILL BE MAILED TO RYERSON INC. STOCKHOLDERS AND
WILL BE AVAILABLE AT NO CHARGE AT THE SECURITIES AND EXCHANGE COMMISSION'S
WEBSITE AT HTTP://WWW.SEC.GOV. INFORMATION RELATING TO THE PARTICIPANTS IN SUCH
PROXY SOLICITATION IS AND WILL BE CONTAINED IN THE SCHEDULE 13D FILED BY
HARBINGER AND IN AMENDMENTS THERETO.
Harbinger Capital Partners Harbinger Capital Partners Special
Master Fund I, Ltd. Situations Fund, L.P.
c/o International Fund 555 Madison Avenue, 16th Floor
Services (Ireland) Limited New York, New York 10022
Third Floor, Bishop's Square
Redmond's Hill, Dublin 2, Ireland
January 2, 2007
BY HAND AND FACSIMILE
Ryerson Inc.
2621 West 15th Place
Chicago, IL 60608
Attention: Corporate Secretary
BY HAND
Corporate Secretary
Ryerson Inc.
c/o The Corporation Trust Company
1209 Orange Street
Wilmington, DE 19801
Re: Notice of Nomination of Candidates for Election
to the Board of Directors and to Present
Stockholder Proposals at the Upcoming Annual Meeting
of Ryerson Inc.
----------------------------------------------------
Dear Secretary:
This notice (including Appendix I and Exhibit A attached hereto,
the "Notice") of the decision of Harbinger Capital Partners Master Fund I, Ltd.
(the "Master Fund") and Harbinger Capital Partners Special Situations Fund,
L.P. (the "Special Fund" and, together with the Master Fund, the "HCP Funds"),
the beneficial owners of an aggregate of 2,550,000 shares (the "Shares") of
common stock, par value $1.00 ("Common Stock"), of Ryerson Inc., a Delaware
corporation (the "Company"), to propose the nomination of and nominate
candidates for election to the Board of Directors of the Company (the "Board")
and of the intention of the HCP Funds to present stockholder proposals at the
upcoming Annual Meeting of stockholders of the Company which the HCP Funds
expect will be held in May 2007, including any adjournments or postponements
thereof or any special meeting that may be called in lieu thereof (the "Annual
Meeting"), is being delivered in accordance with the requirements set forth
under Section 2 of Article II regarding
Notice of Nomination of Candidates
and Stockholder Proposals
Page 2
director nominations (the "Nomination Requirements") and the requirements set
forth under Section 2 of Article II regarding stockholder business (the
"Proposal Requirements") of the By-laws of the Company (the "By-laws"). The
Master Fund is the direct record owner of 1,000 of the Shares and is the
beneficial owner of an additional 2,499,000 of the Shares held in street name.
The Special Fund is the direct record owner 1,000 of the Shares and is the
beneficial owner of an additional 49,000 of the Shares held in street name.
Pursuant to the Nomination Requirements, this Notice sets forth
with respect to each of the HCP Nominees (as defined below): (a) the name, age,
business address and residence address of such person; (b) the principal
occupation or employment of such person; (c) the class and number of shares of
capital stock of the Company which are beneficially owned by such person; and
(d) any other information relating to such person that would be required to be
disclosed in solicitations for proxies for election of directors pursuant to
Regulation 14A under the Securities Exchange Act of 1934, as amended (the
"Exchange Act").
In addition, pursuant to the Nomination Requirements, this Notice
sets forth: (a) the name and record address of the HCP Funds; and (b) the class
and number of shares of capital stock of the Company which are beneficially
owned by each of the HCP Funds.
This Notice also attaches as Exhibit A hereto a copy of signed
consents executed by each of the HCP Nominees to being named as nominees and to
serving as directors of the Company, if elected.
Pursuant to the Proposal Requirements, this Notice sets forth (a) a
brief description of the business desired to be brought before the Annual
Meeting and the reasons for conducting such business at the Annual Meeting; (b)
the name and record address of the HCP Funds; (c) the class and number of
shares of the Company which are beneficially owned by the HCP Funds; and (d)
any material interest of the HCP Funds in such business.
A. BACKGROUND
The HCP Funds initially acquired their Shares because they believe
that the Shares represent an attractive investment. The HCP Funds and the other
Harbinger Persons (as defined below) initially reported their investment on a
Schedule 13G on November 27, 2006. Following that filing, the Harbinger Persons
examined the financial and operating performance of the Company and grew
increasingly concerned that the board of directors and senior management of the
Company had not been appropriately vigilant in their management of the Company,
particularly with respect to its lack of focus on profitability and the
management of inventory. On December 13, 2006, the Harbinger Persons filed a
Schedule 13D with respect to their investment in the Shares.
In their Schedule 13D, the Harbinger Persons disclosed that they
were considering a range of actions by which they might be able to encourage
the Company to
Notice of Nomination of Candidates
and Stockholder Proposals
Page 3
improve its performance. The Harbinger Persons further disclosed, among other
matters, that such activities might include taking a position (including by
contacting management and other stockholders of the Company) with respect to
potential changes in the operations, management, or capital structure of the
Company as a means of enhancing stockholder value, and that the Harbinger
Persons were also considering nominating one or more persons for election to
the Company's board of directors at the Company's next annual meeting of
stockholders.
Subsequent to the filing of the Schedule 13D, the HCP Funds
determined that nominating the HCP Nominees for election to the Company's
board, and submitting the related proposals included in this Notice,
represented the most appropriate course of action to enhance stockholder value.
B. NOTICE OF NOMINATION OF CANDIDATES FOR ELECTION TO THE BOARD
The HCP Funds hereby propose the nomination of and nominate the
following individuals (the "HCP Nominees") for election to the Board to succeed
a majority of the current directors whose term expires at the Annual Meeting
(or any director named to fill any vacancy created by the death, retirement,
resignation or removal of any such directors):
o Keith E. Butler
o Eugene I. Davis
o Daniel W. Dienst
o Richard Kochersperger
o Larry J. Liebovich
o Gerald Morris
o Allen Ritchie
The HCP Funds reserve the right to nominate, substitute or add
additional persons (a) in the event that the Company purports to increase the
number of directorships to each additional directorship created, (b) if the
Company makes or announces any changes to its By-laws or takes or announces any
other action that has, or if consummated would have, the effect of
disqualifying any of the HCP Nominees or any additional nominee nominated
pursuant to the preceding clause (a) and/or (c) in the event any of the HCP
Nominees named in Appendix I are unable or hereafter become unwilling for any
reason to serve as a director. Additional nominations made pursuant to the
preceding clauses (a) and/or (b) are without prejudice to the position of the
HCP Funds that any attempt to increase the size of the Board or disqualify any
of the HCP Nominees
Notice of Nomination of Candidates
and Stockholder Proposals
Page 4
through Bylaw amendments or otherwise constitutes unlawful manipulation of the
Company's corporate machinery.
As required by Section 2 of Article II of the By-laws, the
following information constitutes all of the information relating to the HCP
Nominees that would be required to be disclosed in solicitations for proxies
for election of directors pursuant to Regulation 14A under the Exchange Act.
Such information includes all information required to be set forth in this
Notice pursuant to the Nomination Requirements. To the extent that information
set forth at any point in this Notice is responsive to a specific item below,
each such item shall be deemed to incorporate such information, no matter where
such information appears in this Notice. The information set forth in Appendix
I is incorporated herein by reference. All information set forth herein
relating to any person other than the HCP Funds is given only to the knowledge
of the HCP Funds. Information required by Section 2 of Article II of the
By-laws regarding the name, record address and beneficial holdings of the
persons making the nomination is as set forth herein, including Appendix I and
Exhibit A attached hereto. To the extent additional information is provided
regarding the persons making the solicitation, such information is provided
voluntarily for context or completeness.
ITEM 4. PERSONS MAKING THE SOLICITATION
(b). The solicitation for election of the HCP Nominees will be made
by the HCP Funds. By virtue of Instruction 3 of Item 4 of Schedule 14A, the HCP
Funds and the HCP Nominees will be considered participants in the solicitation.
The HCP Nominees may make solicitations of proxies but will not receive
compensation for acting as nominees as set forth herein. Proxies may be
solicited by mail, facsimile, telephone, telegraph, electronic mail, in person
and by advertisements. Solicitations may also be made by certain directors,
officers, members and employees of the HCP Funds, none of whom will receive
additional compensation for such solicitation.
None of the HCP Nominees have individually retained any person to
provide proxy solicitation or advisory services in connection with the
solicitation. The HCP Funds expect to retain a proxy solicitation firm in
connection with the solicitation, but have not yet retained such firm. The HCP
Funds will request banks, brokerage houses and other custodians, nominees and
fiduciaries to forward all solicitation materials to the beneficial owners of
the shares of Common Stock they hold of record. The HCP Funds will reimburse
these record holders for their reasonable out-of-pocket expenses in so doing.
The entire expense of soliciting proxies is being borne by the HCP
Funds. The HCP Funds intend to seek reimbursement of the costs of this
solicitation from the Company. The costs of this solicitation of proxies, and
other costs specifically related to this solicitation, are currently estimated
to be approximately $2,500,000. The HCP Funds estimate that through the date
hereof, its total expenditures to date for, in furtherance of, or in connection
with, this solicitation are approximately $85,000.
Notice of Nomination of Candidates
and Stockholder Proposals
Page 5
ITEM 5. INTEREST OF CERTAIN PERSONS IN MATTERS TO BE ACTED UPON
(b)(1). Information as to any substantial interest, direct or
indirect, by security holdings or otherwise, in any matter to be acted upon at
the Annual Meeting with respect to the HCP Funds and each of the HCP Nominees
is set forth herein. None of the HCP Nominees beneficially owns any securities
of the Company or has any personal ownership interest, direct or indirect, in
any securities of the Company.
The direct and indirect security holdings of HCP Funds are as
follows: The Master Fund is the direct record owner of 1,000 of the Shares and
is the beneficial owner of an additional 2,499,000 of the Shares held in street
name. The Special Fund is the direct record owner 1,000 of the Shares and is
the beneficial owner of an additional 49,000 of the Shares held in street name.
In addition, (i) Harbinger Capital Partners Offshore Manager,
L.L.C. ("Harbinger Manager"), the investment manager of the Master Fund, and
HMC Investors, L.L.C., the managing member of Harbinger Manager ("HMC
Investors") may be deemed to beneficially own Shares held by the Master Fund,
(ii) Harbinger Capital Partners Special Situations GP, LLC, the general partner
of the Special Fund ("HCPSS"), and HMC - New York, Inc., the managing member of
HCPSS ("HMCNY"), may be deemed to beneficially own Shares held by the Special
Fund and (iii) Harbert Management Corporation ("HMC"), the managing member of
HMC Investors and the parent of HMCNY, Philip A. Falcone, a stockholder of HMC
and the portfolio manager of the Master Fund and the Special Fund, Raymond J.
Harbert, a stockholder of HMC, and Michael D. Luce, a stockholder of HMC (each
of the Master Fund, Harbinger Manager, HMC Investors, HMC, Special Fund, HCPSS,
HMCNY, Philip A. Falcone, Raymond J. Harbert and Michael D. Luce are
collectively referred to herein as the "Harbinger Persons") may be deemed to
beneficially own Shares held by the Master Fund and the Special Fund. Each of
Harbinger Manager, HMC Investors, HCPSS, HMCNY, HMC, Mr. Falcone, Mr. Harbert
and Mr. Luce disclaim beneficial ownership of the Shares.
The HCP Nominees may be deemed to have an interest in their
nominations for election to the Board by virtue of compensation the HCP
Nominees will receive from the Company as a director, if elected to the Board.
(i) Set forth in Appendix I attached hereto, which is incorporated
herein by reference, are the names and business addresses of each of the HCP
Funds and the HCP Nominees.
(ii) Set forth in Appendix I attached hereto, which is incorporated
herein by reference, is (a) the principal occupation or employment of each HCP
Fund and (b) the present principal occupation or employment for each of the HCP
Nominees, and the name, principal business and address of any corporation or
other organization in which such employment is carried on.
Notice of Nomination of Candidates
and Stockholder Proposals
Page 6
(iii) During the past ten years, no HCP Fund and no HCP Nominee has
been convicted in a criminal proceeding (excluding traffic violations or
similar misdemeanors).
(iv), (v), (vi), (vii), (ix) AND (x) Except as set forth in this
Item 5(b)(1) or in Appendix I hereto, which is incorporated herein by
reference, no HCP Fund and no HCP Nominee, and none of their respective
associates, owns beneficially, directly or indirectly, or of record but not
beneficially, any securities of the Company, or any parent or subsidiary of the
Company, nor has any HCP Fund or any HCP Nominee purchased or sold any
securities of the Company within the last two years. Set forth in Appendix I
hereto are transactions in the Company's securities effected by the HCP Funds
within the past two years. No such transactions were effected by any of the HCP
Nominees during such period. The HCP Funds used their own assets to purchase
the Shares owned by them. Such Shares were originally purchased through and
held in brokerage custodian accounts which, from time to time in the ordinary
course, may utilize margin borrowing in connection with purchasing, borrowing
or holding of securities, and such Shares may thereby have been, or in the
future may become, subject to the terms and conditions of such margin debt and
terms, together with all other securities held therein. As of the date hereof,
no part of the purchase price or market value of any of the Shares is
represented by funds borrowed or otherwise obtained for the purpose of
acquiring or holding such Shares.
(viii) Except as set forth in Appendix I hereto, no HCP Fund and no
HCP Nominee is, or has been within the past year, a party to any contract,
arrangement or understanding with any person with respect to any securities of
the Company, including, but not limited to, joint ventures, loan or option
arrangements, puts or calls, guarantees against loss or guarantees of profit,
division of losses or profit, or the giving or withholding of proxies.
(xi) Item 5(b)(xi) cross-references the information required by
Item 404(a) of Regulation S-K of the Exchange Act with respect to each
participant in the solicitation or any associates of such participant.
ITEM 404(A) OF REGULATION S-K. No HCP Fund and no HCP
Nominee or any of their respective related persons have had or will have a
direct or indirect material interest in any transaction since the beginning of
the Company's last fiscal year or any currently proposed transactions in which
the Company was or is to be a participant and the amount involved exceeds
$120,000.
(xii)(A) AND (B). Under the Company's Directors' Compensation Plan,
the Company's non-employee directors receive an annual base fee of $120,000
consisting of $60,000 in stock and $60,000 in cash. The non-employee directors
can choose to receive all or any part of the $60,000 cash portion in whole
Shares. The Company also pays non-employee directors $1,500 for attending a
special Board meeting and $1,500 for attending a special committee meeting that
is not held in connection with a regular or special Board
Notice of Nomination of Candidates
and Stockholder Proposals
Page 7
meeting. The Chairs of the Company's Compensation Committee and of the
Nominating and Governance Committee receive an additional annual fee of $6,000;
the Audit Committee Chair receives an additional fee of $10,000 per year. No
fees are paid for membership on the Executive Committee. Non-employee directors
are reimbursed for actual expenses incurred for attending meetings. The current
Chairman of the Board (who is an employee of the Company) is not paid any of
these base fees or special fees and receives no extra pay for serving as a
director.
The Company pays the cash portion of the annual fee quarterly,
prorating the quarterly payment if a director serves for part of a quarter. The
Company pays the stock portion as restricted stock issued at the beginning of
the director's term, with a pro rata portion of those shares vesting at the end
of each calendar quarter. The non-employee directors receive the same cash
dividends on the restricted stock as do the Company's other stockholders. If a
director leaves the Board early, he or she forfeits any shares that are still
restricted and have not yet vested.
The non-employee directors can choose to defer payment of all or
any portion of their fees into Ryerson stock equivalents with dividend
equivalents or into a deferred cash account that earns interest at the prime
rate in effect at JPMorgan Chase & Co. (or its successor). The Company's pays
the deferred amounts in from one to ten installments after the director leaves
the Board.
The Company pays the premiums on a business accident insurance
policy insuring each director for up to $500,000. It maintains directors' and
officers' insurance coverage for the directors, executives and the Company. The
Company also has entered into an indemnification agreement with each director
to preserve the maximum protections provided by state corporation law and the
Company's bylaws and to provide assurance to directors and officers regarding
future rights to indemnification.
The foregoing descriptions are based entirely on information
contained in the Company's proxy statement on Schedule 14A issued in connection
with the Company's 2006 Annual Meeting. The HCP Funds and the HCP Nominees
disclaim any responsibility for the accuracy of the foregoing information
extracted from such public filing.
The HCP Funds expect that the HCP Nominees, if elected, will be
indemnified for service as directors of the Company to the same extent
indemnification is provided to the current directors of the Company and will be
covered by the Company's officer and director liability insurance.
The HCP Nominees will not receive any compensation from the HCP
Funds to serve as a nominee for election or as a director, if elected, of the
Company. The HCP Funds have agreed to indemnify the HCP Nominees against losses
incurred in connection with their service as nominees for election as directors
of the Company and in connection with the solicitation of proxies in respect
thereof, to the extent that
Notice of Nomination of Candidates
and Stockholder Proposals
Page 8
indemnification is not otherwise available, including from the Company. The HCP
Funds have also agreed to reimburse the HCP Nominees for out-of-pocket expenses
incurred in their capacity as nominees, including, without limitation,
reimbursement for reasonable travel expenses. Each HCP Nominee has executed a
written consent agreeing to be a nominee for election as a director of the
Company and to serve as a director if so elected, which consents are attached
hereto as Exhibit A. Other than as set forth herein, none of the HCP Funds or
the HCP Nominees or any of their respective associates, has any arrangements or
understandings with any person or persons with respect to any future employment
by the Company or its affiliates or with respect to any future transactions to
which the Company or any of its affiliates will or may be a party.
(b)(2) The information required to be disclosed in this item with
respect to the HCP Funds and the HCP Nominees is disclosed in response to Item
5(b)(1) above.
ITEM 7. DIRECTORS AND EXECUTIVE OFFICERS
(a) Item 7(a) cross-references the information required by
instruction 4 to Item 103 of Regulation S-K of the Exchange Act with respect to
nominees of the persons making the solicitation. Such information is set forth
below:
INSTRUCTION 4 OF ITEM 103 TO REGULATION S-K. There are no
material proceedings in which the HCP Nominees or any of their associates is a
party adverse to the Company or any of its subsidiaries, or material
proceedings in which such nominee or any such associate has a material interest
adverse to the Company or any of its subsidiaries.
(b) Item 7(b) cross-references the information required by Item
401, Items 404(a) and (c), Item 405, and Items 407(d)(4) and (d)(5) of
Regulation S-K of the Exchange Act with respect to nominees of the person
making the solicitation. Such information is set forth below:
ITEM 401 OF REGULATION S-K
(a) AND (e). Each HCP Nominee has executed a consent to
being named as a HCP Nominee and to serving as a director of the Company,
if so elected. Copies of such consents are attached hereto as Exhibit A.
The initial term of each HCP Nominee, if elected, would be for a period
of one year in accordance with the By-laws.
The following information is set forth in Appendix I
attached hereto with respect to each HCP Nominee: name, age, any position
and office with the Company held by each such nominee and the term
thereof, business experience during the past five years (including
principal occupation and employment during the past five years and the
name and principal business of any corporation or other organization in
which such occupation or employment was carried on) and any directorships
held by such person in any company with a class
Notice of Nomination of Candidates
and Stockholder Proposals
Page 9
of securities registered pursuant to Section 12 of the Exchange Act or
subject to the requirements of Section 15(d) of the Exchange Act or any
company registered as an investment company under the Investment Company
Act of 1940, as amended. Except as set forth in Appendix I, no occupation
or employment is or was, during such period, carried on by any HCP
Nominee with the Company or any corporation or organization which is or
was a parent, subsidiary or other affiliate of the Company, and none of
the HCP Nominees has ever served on the Board.
The HCP Funds have agreed to indemnify the HCP Nominees,
and to reimburse the HCP Nominees for certain expenses, as described
above.
Other than as disclosed in the response to Item 5(b) above,
there are no arrangements or understandings between the HCP Nominees and
any other party pursuant to which any such nominee was or is to be
selected as a director or nominee.
(b), (c), AND (g). These provisions of Item 401 of
Regulation S-K are not applicable to the HCP Nominees.
(d). There exist no family relationships between any HCP
Nominee and any director or executive officer of the Company.
(f). During the last five years, the HCP Nominees were not
involved in any of the events described in Item 401(f) of Regulation S-K
and that are material to an evaluation of the ability or integrity of any
such nominee to become a director of the Company.
ITEM 404(a) OF REGULATION S-K. The response to Item
5(b)(1)(xi) above is incorporated herein by reference.
ITEM 404(b) OF REGULATION S-K. This provision is not
applicable to the HCP Nominees.
ITEM 405 OF REGULATION S-K. This provision is not
applicable to the HCP Nominees because the HCP Nominees are not directors,
officers or ten percent holders of the Company.
ITEM 407(d)(4) AND (d)(5) OF REGULATION S-K. These
provisions are not applicable to the HCP Nominees.
(c) Item 7(c) cross-references the information required by Item
407(a) of Regulation S-K of the Exchange Act.
The corporate governance guidelines of the Company, which are
available on the Company's website at www.ryerson.com, provide that
determinations of
Notice of Nomination of Candidates
and Stockholder Proposals
Page 10
independence are the responsibility of the Board. However, based on the
standards of independence set forth in such guidelines, the HCP Funds have no
knowledge of any facts that would prevent the Board from determining that each
of the HCP Nominees is independent.
(d) Item 7(d) cross-references the information required by Item
407(b), (c)(1), (c)(2), (d)(1), (d)(2), (d)(3), (e)(1), (e)(2), (e)(3) and (f)
of Regulation S-K of the Exchange Act . These provisions are not applicable to
the HCP Nominees.
(e) Item 7(e) applies only to registered investment companies and
is not applicable to the HCP Nominees.
ITEM 8. COMPENSATION OF DIRECTORS AND EXECUTIVE OFFICERS
Item 8 cross-references the information required by Item 402 and
paragraphs (e)(4) and (e)(5) of Item 407 of Regulation S-K of the Exchange Act
with respect to each nominee of the person making the solicitation and
associates of such nominee. Such information is set forth below:
ITEM 402 OF REGULATION S-K
(a)-(j). None of the HCP Nominees or any of their
associates has received any cash compensation, cash bonuses, deferred
compensation, compensation pursuant to plans, or other compensation,
from, or in respect of, services rendered on behalf of the Company that
is required to be disclosed under, or is subject to any arrangement
described in, these paragraphs of Item 402 of Regulation S-K.
(k). The response to Item 5(b)(1)(xii)(A) and (B) above is
incorporated herein by reference. Other than as set forth herein, the HCP
Funds are not aware of any other arrangements pursuant to which any
director of the Company was to be compensated for services during the
Company's last fiscal year.
ITEM 407(e)(4) AND (e)(5) OF REGULATION S-K. There are no
interlocking relationships that would have required disclosure under these
paragraphs of Item 407 of Regulation S-K, had the HCP Nominees been directors
of the Company.
C. NOTICE OF INTENTION TO PRESENT STOCKHOLDER PROPOSALS
The HCP Funds hereby notify the Company that they intend to bring
the following business and proposals (the "Proposals") before the Annual
Meeting for consideration and action by the Company's stockholders before any
other business is conducted at the Annual Meeting:
Notice of Nomination of Candidates
and Stockholder Proposals
Page 11
Proposal: "RESOLVED, that each provision or amendment of the By-laws of
Ryerson Inc. (the "Company") adopted by the Board of Directors of
the Company without the approval of the Company's stockholders
subsequent to January 1, 2006 (purportedly the last date of
reported changes) and prior to the approval of this resolution be,
and they hereby are, repealed, effective as of the time this
resolution is approved by the Company's stockholders."
Proposal: "RESOLVED, that Section 2 of Article III of the By-laws of the
Company be amended to provide that the Board of Directors of the
Company shall consist of not fewer than six (6) Directors nor more
than ten (10) Directors."
The Proposals are being brought before the Annual Meeting pursuant
to Section 109 of the Delaware General Corporation Law, which empowers
stockholders to amend or repeal bylaws. The Proposals are intended to deter the
current members of the Board from amending the Company's By-laws or changing
the size of the Board in a manner that would create obstacles to the election
of the HCP Nominees as a majority of the Board. The HCP Funds may be deemed to
have an interest in the Proposals insofar as adoption of the Proposals may
facilitate the election of the HCP Nominees.
The record name and address of each of the HCP Funds in their
respective capacity as a stockholder of the Company is set forth in Appendix I
hereto. Other than as set forth in this Notice, there are no arrangements or
understandings between any HCP Fund and any other person or persons in
connection with the Proposals.
* * *
The information included herein represents the HCP Funds' best
knowledge as of the date hereof. The HCP Funds reserve the right, in the event
such information shall be or become inaccurate, to provide corrective
information to the Company as soon as reasonably practicable, although the HCP
Funds do not commit to update any information which may change from and after
the date hereof.
If this Notice shall be deemed for any reason by a court of
competent jurisdiction to be ineffective with respect to the nomination of the
HCP Nominees at the Annual Meeting, or if any individual nominee shall be
unable to serve for any reason, this Notice shall continue to be effective with
respect to any replacement nominees selected by the HCP Funds.
The HCP Funds reserve the right to give further notice of
additional nominations or business to be made or conducted at the Annual
Meeting or any other meeting of the Company's stockholders.
Please direct any questions regarding the information contained in
this Notice to Robert B. Schumer, Esq. and Raphael M. Russo, Esq., Paul, Weiss,
Rifkind,
Notice of Nomination of Candidates
and Stockholder Proposals
Page 12
Wharton & Garrison LLP, 1285 Avenue of the Americas, New York, New York
10019-6064, (212) 373-3000 (Phone), (212) 757-3990 (Facsimile).
[REMAINDER OF PAGE INTENTIONALLY LEFT BLANK]
IN WITNESS WHEREOF, the parties hereto have caused this Notice to
be duly executed on the date first above written.
HARBINGER CAPITAL PARTNERS MASTER
FUND I, LTD.
By: Harbinger Capital Partners Offshore
Manager, L.L.C.
By: HMC Investors, L.L.C., Managing Member
By: /s/ William R. Lucas, Jr.
--------------------------------------
Name: William R. Lucas, Jr.
Title: Vice President
HARBINGER CAPITAL PARTNERS SPECIAL
SITUATIONS FUND, L.P.
By: Harbinger Capital Partners Special
Situations GP, LLC
By: HMC - New York, Inc., Managing Member
By: /s/ William R. Lucas, Jr.
--------------------------------------
Name: William R. Lucas, Jr.
Title: Senior Vice President
& General Counsel
APPENDIX I: ADDITIONAL INFORMATION
CERTAIN INFORMATION RELATING TO THE HCP FUNDS
The Master Fund, a Cayman Islands corporation, is an investment
fund with its principal business and record address at c/o International Fund
Services (Ireland) Limited, Third Floor, Bishop's Square, Redmond's Hill,
Dublin 2, Ireland.
The Special Fund, a Delaware limited partnership, is an investment
fund with its principal business address at 555 Madison Avenue, 16th Floor, New
York, New York 10022. The address of the Special Fund in the records of the
Company is One Riverchase Parkway South, Birmingham, Alabama 35244.
I-1
CERTAIN INFORMATION RELATING TO THE HCP NOMINEES
The following table sets forth the name, age, present principal
occupation, business and residential address and business experience for the
past five years and certain other information, with respect to the HCP
Nominees. This information has been furnished to the HCP Funds by the HCP
Nominees.
NAME, AGE AND BUSINESS AND RESIDENTIAL PRINCIPAL OCCUPATION OR EMPLOYMENT DURING
ADDRESS THE LAST FIVE YEARS; PUBLIC COMPANY
DIRECTORSHIPS
- -------------------------------------- -----------------------------------------------
Keith E. Butler (Age 52) Mr. Butler is the sole owner of BCS Placements,
LLC, an NASD registered broker dealer that
Business Address: focuses on raising private equity from
institutional investors. Mr. Butler joined
71 Murray Street, 8th Floor PaineWebber in 1997 which later merged with UBS
New York, NY 10007 Warburg, a global securities and investment
banking firm. He is currently a financial advisor
Residential Address: and was an investment banker with UBS Warburg
until the end of 2003. Mr. Butler's focus was on
71 Murray Street, 8th Floor the transportation sector (air, shipping and
New York, NY 10007 rail), including the financing of freighter
aircraft. Before PaineWebber merged with UBS, Mr.
Butler was a Managing Director at PaineWebber,
where he launched and built the first structured
finance product group for transportation assets
and at Alex.Brown, where he initiated the
transportation debt practice.
Mr. Butler is a member of the Board, Chairman of
the Compensation Committee and a member of the
Nominating and Governance Committee of Atlas Air
Worldwide Holdings, Inc.
Mr. Butler graduated from Harvard College and
received a master's degree in business
administration from Harvard Business School.
Eugene I. Davis (Age 51) Mr. Davis is the Chairman and Chief Executive
Officer of PIRINATE Consulting Group, LLC, a
Business Address: privately held consulting firm specializing in
turn-around management, merger and acquisition
5 Canoe Brook Drive consulting, proxy contests and strategic planning
Livingston, NJ 07039 advisory services for domestic and international
public and private business entities. Since
Residential Address: forming PIRINATE in 1997, Mr. Davis has advised,
managed, sold, liquidated and/or acted in an
5 Canoe Brook Drive executive capacity for a number of businesses,
Livingston, NJ 07039 including companies operating in the metals,
transportation and logistics sectors. Mr.
I-2
NAME, AGE AND BUSINESS AND RESIDENTIAL PRINCIPAL OCCUPATION OR EMPLOYMENT DURING
ADDRESS THE LAST FIVE YEARS; PUBLIC COMPANY
DIRECTORSHIPS
- -------------------------------------- -----------------------------------------------
Davis served as Chief Restructuring Officer of
RBX Industries, Inc. from January to September
2001 and as Chairman and Chief Executive Officer
from September 2001 until 2004. Mr. Davis has
served as Chief Executive Officer of Golden
Northwest Aluminum, Inc. since May 2005. Golden
Northwest Aluminum, Inc. filed for chapter 11
protection on November 10, 2004.
Prior to forming PIRINATE, Mr. Davis served as
President, Vice-Chairman and Director of Emerson
Radio Corp, and CEO and Vice-Chairman of Sport
Supply Group, Inc. Mr. Davis began his career as
an attorney and international negotiator with
Exxon Corp. and Standard Oil Company (Indiana)
and as a partner in two Texas-based law firms
where he specialized in corporate/securities law,
international transactions and restructuring
advisory.
Mr. Davis currently serves as Chairman of the
Board of Directors for Atlas Air Worldwide
Holdings, Inc. and as a director for Knology
Broadband, Inc., American Commercial Lines, Inc.,
Footstar Inc., Medicor Ltd., PRG Shultz
International, Inc., Granite Broadcasting Corp.
and Viskase Companies Inc. Mr. Davis is a former
director of Metals USA, Inc.
Mr. Davis is graduate of Columbia College and
holds a Master of International Affairs from the
School of International Affairs of Columbia
University and a J.D. from Columbia Law School.
Daniel W. Dienst (Age 41) Mr. Dienst has served as the Chairman of the
Board of Metal Management, Inc., one of the
Business Address: largest full service metals recyclers in the
United States, since April 2003, as that
c/o Metal Management Inc. company's Chief Executive Officer since January
325 N. LaSalle 2004, as that company's President since September
Chicago, IL 60610 2004 and as a member of that company's board
since 2001. From May 2000 to January 2004, Mr.
Residential Address: Dienst served as Managing Director of the
Corporate and Leveraged Finance Group of CIBC
c/o Metal Management Inc. World Markets Corp., a diversified global
325 N. LaSalle financial services firm. From January 1999
Chicago, IL 60610 through April 2000, Mr. Dienst held various
positions within CIBC World Markets, including
Executive Director of the High Yield/Financial
Restructuring Group. From October 1995 to March
1998, Mr. Dienst served in various capacities
with Jefferies & Company, Inc., most
I-3
NAME, AGE AND BUSINESS AND RESIDENTIAL PRINCIPAL OCCUPATION OR EMPLOYMENT DURING
ADDRESS THE LAST FIVE YEARS; PUBLIC COMPANY
DIRECTORSHIPS
- -------------------------------------- -----------------------------------------------
recently as its Vice President, Corporate
Finance/Restructurings. Mr. Dienst previously
served as the non-executive Chairman of the Board
of Metals USA, Inc.
Mr. Dienst is a graduate of Washington University
and received a J.D. from The Brooklyn Law School.
Richard Kochersperger (Age 57) Mr. Kochersperger is the Director of the Food
Marketing Group, a virtual educational resource
for the food industry. Previously, he was the
Director of the Center for Food Marketing at
Business Address: Saint Joseph's University, and currently is an
Associate Professor at Saint Joseph's University
St. Joseph's University in the Food Marketing Department.
5600 City Avenue
Philadelphia, PA 19131 Mr. Kockersperger has designed and implemented
Executive Education programs for several leading
Residential Address: companies including Albertsons/ACME, Tengelmann,
A&P, Ferrero, Fleming, McCormick and the USDA
4 Oak Knoll Drive Cochran Fellowship. He is the author of several
Wallingford, PA 19086 books on Food Logistics and he produces the
Annual Food Industry Logistics Benchmark for Food
Distributors International.
Mr. Kockersperger holds a Master of Science, Food
Business Management from Cornell University and a
Bachelor of Science, Food Business from the
University of Delaware.
Larry J. Liebovich (Age 57) Currently retired after 33 years of service, Mr.
Liebovich is the former President of Liebovich
Business Address: Steel & Aluminum Company.
W3684 Maple Lane Mr. Liebovich served 20 years on the Board of the
Lake Geneva, WI 53147 Metal Service Center Institute and was the
Founding Chairman of the North American Steel
Residential Address: Alliance.
W3684 Maple Lane Mr. Liebovich earned his B.S. in Industrial
Lake Geneva, WI 53147 Technology from Northern Illinois University.
Gerald Morris (Age: 74) Mr. Morris has served as President and Chief
Executive Officer of Intalite International N.V.,
Business Address: a diversified holding company with investments
primarily in the metals fabrication industry, for
Intalite International N.V. over 30 years.
437 Madison Avenue, 39th Floor
New York, NY 10022 Mr. Morris is also a director of Metal
Management, Inc and of Neenah Foundry
I-4
NAME, AGE AND BUSINESS AND RESIDENTIAL PRINCIPAL OCCUPATION OR EMPLOYMENT DURING
ADDRESS THE LAST FIVE YEARS; PUBLIC COMPANY
DIRECTORSHIPS
- -------------------------------------- -----------------------------------------------
Company Inc. Mr. Morris is a former director of
Metals USA, Inc.
Residential Address: Mr. Morris earned his B.A. from the University of
Connecticut. Mr. Morris is a certified public
435 East 52nd Street, Apt 14B accountant.
New York, NY 10022
Allen Ritchie (Age: 49) Currently a private investor, Mr. Ritchie was
Executive Vice President and Chief Financial
Business Address: Officer of Protective Life Corporation from
August 2001 until November 2006. Before joining
3236 Rockledge Road Protective Life Corporation, Mr. Ritchie held a
Birmingham, AL 35213 number of senior management roles with AGCO
Corporation from 1991 to 1997 and with Medaphis
Residential Address: Corporation (now Per Se Technologies, Inc.) from
1998-2000.
3236 Rockledge Road Mr. Ritchie earned his B.S. in Accounting from
Birmingham, AL 35213 the University of Alabama.
I-5
TRANSACTIONS IN THE SECURITIES OF THE COMPANY
---------------------------------------------
On December 27, 2006, the Special Fund caused 1,000 of the Shares
beneficially owned by the Special Fund to be registered in the name of the
Special Fund and December 29, 2006 the Master Fund caused 1,000 of the Shares
beneficially owned by the Master Fund to be registered in the name of the
Master Fund. The remainder of the Shares owned by the HCP Funds are held in
street name. Other than as set forth herein or in the Notice, none of the HCP
Funds, any Harbinger Person or any HCP Nominee is the record or beneficial
owner of any securities of the Company, or any parent or subsidiary of the
Company.
The Master Fund and the Special Fund have entered into total return
swaps (cash settlement) relating to a total notional amount of 600,000 shares
of the Company's common stock. These swap agreements have the effect of
increasing the Harbinger Persons' economic exposure to the Company's common
stock without conferring voting or dispositive power over the notional number
of shares referred to in the agreement.
Other than as set forth below, none of the HCP Funds or any HCP
Nominee has effected any transactions in any securities of the Company in the
last two years.
TRANSACTIONS BY MASTER FUND
---------------------------
- --------------------------------------------------------------------------------
Date of Transaction Number of Shares Purchased/(Sold) Price Per Share
- --------------------------------------------------------------------------------
9/12/06 29,400 20.13
- --------------------------------------------------------------------------------
9/12/06 136,000 20.071
- --------------------------------------------------------------------------------
9/13/06 206,300 20.89
- --------------------------------------------------------------------------------
9/14/06 50,000 21.18
- --------------------------------------------------------------------------------
9/14/06 165,200 21.25
- --------------------------------------------------------------------------------
9/15/06 133,900 21.67
- --------------------------------------------------------------------------------
9/15/06 139,317 21.63
- --------------------------------------------------------------------------------
9/18/06 57,700 21.72
- --------------------------------------------------------------------------------
9/19/06 150,000 21.56
- --------------------------------------------------------------------------------
9/19/06 175,000 21.54
- --------------------------------------------------------------------------------
9/20/06 57,183 21.84
- --------------------------------------------------------------------------------
I-6
11/06/06 (35,700) 25.10
- --------------------------------------------------------------------------------
11/17/06 100,000 21.25
- --------------------------------------------------------------------------------
11/20/06 135,700 21.46
- --------------------------------------------------------------------------------
11/21/06 110,000 21.84
- --------------------------------------------------------------------------------
11/22/06 85,000 21.94
- --------------------------------------------------------------------------------
11/24/06 70,000 21.83
- --------------------------------------------------------------------------------
11/27/06 125,000 21.39
- --------------------------------------------------------------------------------
11/28/06 102,600 21.33
- --------------------------------------------------------------------------------
11/29/06 75,000 22.01
- --------------------------------------------------------------------------------
11/30/06 111,916 22.22
- --------------------------------------------------------------------------------
12/01/06 150,000 22.22
- --------------------------------------------------------------------------------
12/04/06 145,448 23.19
- --------------------------------------------------------------------------------
12/04/06 25,036 22.97
- --------------------------------------------------------------------------------
TRANSACTIONS BY SPECIAL FUND
----------------------------
- --------------------------------------------------------------------------------
Date of Transaction Number of Shares Purchased/(Sold) Price Per Share
- --------------------------------------------------------------------------------
12/07/06 45,055 23.53
- --------------------------------------------------------------------------------
12/08/06 4,945 23.49
- --------------------------------------------------------------------------------
I-7
Exhibit A
Consents to Being Named as Nominees and
to Serve as Directors of Ryerson Inc.
-------------------------------------
[Attached]
Consent to Being Named as a Nominee and
to Serve as Director of Ryerson Inc.
------------------------------------
To: Secretary of Ryerson Inc.
The undersigned hereby consents (x) to being named as a nominee for
election to the Board of Directors of Ryerson Inc., a Delaware corporation (the
"Company"), (y) to be named in the proxy soliciting materials as such and (z)
if duly elected by the stockholders of the Company, to serve as a director of
the Company.
Dated: December 29, 2006.
/s/ Keith E. Butler
----------------------------------
Name: Keith E. Butler
Consent to Being Named as a Nominee and
to Serve as Director of Ryerson Inc.
------------------------------------
To: Secretary of Ryerson Inc.
The undersigned hereby consents (x) to being named as a nominee for
election to the Board of Directors of Ryerson Inc., a Delaware corporation (the
"Company"), (y) to be named in the proxy soliciting materials as such and (z)
if duly elected by the stockholders of the Company, to serve as a director of
the Company.
Dated: December 29, 2006.
/s/ Eugene I. Davis
----------------------------------
Name: Eugene I. Davis
Consent to Being Named as a Nominee and
to Serve as Director of Ryerson Inc.
------------------------------------
To: Secretary of Ryerson Inc.
The undersigned hereby consents (x) to being named as a nominee for
election to the Board of Directors of Ryerson Inc., a Delaware corporation (the
"Company"), (y) to be named in the proxy soliciting materials as such and (z)
if duly elected by the stockholders of the Company, to serve as a director of
the Company.
Dated: December 28, 2006.
/s/ Daniel W. Dienst
----------------------------------
Name: Daniel W. Dienst
Consent to Being Named as a Nominee and
to Serve as Director of Ryerson Inc.
------------------------------------
To: Secretary of Ryerson Inc.
The undersigned hereby consents (x) to being named as a nominee for
election to the Board of Directors of Ryerson Inc., a Delaware corporation (the
"Company"), (y) to be named in the proxy soliciting materials as such and (z)
if duly elected by the stockholders of the Company, to serve as a director of
the Company.
Dated: December 29, 2006.
/s/ Richard Kochersperger
----------------------------------
Name: Richard Kochersperger
Consent to Being Named as a Nominee and
to Serve as Director of Ryerson Inc.
------------------------------------
To: Secretary of Ryerson Inc.
The undersigned hereby consents (x) to being named as a nominee for
election to the Board of Directors of Ryerson Inc., a Delaware corporation (the
"Company"), (y) to be named in the proxy soliciting materials as such and (z)
if duly elected by the stockholders of the Company, to serve as a director of
the Company.
Dated: December 29, 2006.
/s/ Larry J. Liebovich
----------------------------------
Name: Larry J. Liebovich
Consent to Being Named as a Nominee and
to Serve as Director of Ryerson Inc.
To: Secretary of Ryerson Inc.
The undersigned hereby consents (x) to being named as a nominee for
election to the Board of Directors of Ryerson Inc., a Delaware corporation (the
"Company"), (y) to be named in the proxy soliciting materials as such and (z)
if duly elected by the stockholders of the Company, to serve as a director of
the Company.
Dated: December 29, 2006.
/s/ Gerald Morris
----------------------------------
Name: Gerald Morris
Consent to Being Named as a Nominee and
to Serve as Director of Ryerson Inc.
------------------------------------
To: Secretary of Ryerson Inc.
The undersigned hereby consents (x) to being named as a nominee for
election to the Board of Directors of Ryerson Inc., a Delaware corporation (the
"Company"), (y) to be named in the proxy soliciting materials as such and (z)
if duly elected by the stockholders of the Company, to serve as a director of
the Company.
Dated: December 29, 2006.
/s/ Allen Ritchie
----------------------------------
Name: Allen Ritchie
The following press release was issued on January 2, 2007.
FOR IMMEDIATE RELEASE
HARBINGER CAPITAL PARTNERS DISCLOSES NOMINATION
OF SEVEN DIRECTOR CANDIDATES FOR RYERSON INC.'S BOARD
CHALLENGES CURRENT BOARD'S TRACK RECORD IN MANAGEMENT OVERSIGHT AND SHAREHOLDER
VALUE CREATION; PROPOSES SLATE OF INDEPENDENT NOMINEES WITH INDUSTRY AND
DISTRIBUTION EXPERIENCE TO STRENGTHEN BOARD AND GUIDE MANAGEMENT
--------------------------------------------------------------
NEW YORK, JANUARY 2, 2007 - Harbinger Capital Partners Master Fund I, Ltd. and
Harbinger Capital Partners Special Situations Fund, L.P. (together,
"Harbinger") today announced it is seeking the election of seven independent
directors to replace the majority of the existing Board of Directors of Ryerson
Inc. (NYSE: RYI) at the Company's 2007 Annual Meeting of shareholders.
Harbinger, which owns a 9.7 percent stake in Ryerson, detailed its intention in
a written notice to Ryerson's Board of Directors, which will be made publicly
available in a Schedule 13-D amendment to be filed with the SEC.
Harbinger said it has become increasingly concerned that Ryerson's Board of
Directors and senior management have demonstrated a lack of focus on
profitability and management of inventory, and that it believes the Company's
current Board has not fulfilled its responsibility to enhance value for
shareholders. In particular, Harbinger believes that the current Board and
senior management team have failed to adequately execute on the Company's
strategy and that Ryerson's current Board lacks the necessary experience in the
metals service center industry and has provided insufficient oversight of the
Company's management team. Harbinger notes, based on publicly available
information, that Ryerson has consistently underperformed its industry peers by
a variety of key performance metrics, including gross, operating and net
margins, and that peer companies have consistently turned inventory more
rapidly than Ryerson.
Larry Clark, Managing Director of Harbinger Capital Partners, said: "This
Company has consistently underperformed and there is a need for a significant
change at the Board level. Our seven nominees are experienced and independent
and, once elected, will work to deliver value to all shareholders. Ryerson's
long-term strategy to simultaneously improve cost structure and productivity
and expand its customer base while remaining a leader in a consolidating
industry is the right one. However, we believe the Company's performance over
time demonstrates that the current management team has failed to execute on
this strategy and requires better counsel - and we are taking this important
step to provide it."
Specifically, since 1996, Ryerson's operating margins, defined as earnings
before interest, taxes, depreciation and amortization (EBITDA) divided by
sales, have averaged 3.4 percent, less than half of the metals service center
and processor composite average of 8.0 percent.(1) Harbinger believes that poor
inventory management has resulted in inventory turns of 3.8x up to the third
quarter of 2006 and has historically averaged 3.9x over ten years, while the
metals service center and processor composite has averaged closer to 5.1x
during the same period.(2) In addition, over the past ten years, Ryerson has
delivered an average return on invested capital ("ROIC") of approximately 4.5
percent while the metals service center and processor index has achieved an
average ROIC of ten percent.(3)
1
Harbinger believes that these results reflect a failure by management to
execute the Company's business strategy and that, as a result, Ryerson's share
price has dramatically underperformed its peers. On a total return basis (which
assumes dividend reinvestment) Ryerson has returned only 44 percent since 1996,
compared to 94 percent and 165 percent for the S&P 500 and the metals service
center and processor composite index, respectively. Over the same ten years,
Ryerson's closest peer, Reliance Steel & Aluminum Co., has grown its equity
market capitalization over 700 percent.(4) Each of these share price and market
capitalization numbers is as of December 12, 2006, the last trading date prior
to the date that Harbinger filed its Schedule 13D describing its share
ownership in Ryerson and its intentions for the company.
Harbinger believes that Ryerson's current Board lacks the specific
qualifications necessary for leveraging the value drivers within the metals
service center industry that would create acceptable shareholder returns.
Harbinger has assembled a slate of nominees, none of whom come from Harbinger,
that possesses broad industry and distribution experience and that Harbinger
believes can effectively focus Ryerson's management team on the execution of
its business plan with the goal of materially improving the Company's financial
performance and future prospects for value creation.
Harbinger's seven independent director nominees together form an experienced
and entrepreneurial team that intends to focus on guiding senior management
toward delivering cost and operating efficiency and profitability at Ryerson.
They are:
Keith E. Butler Mr. Butler is the sole owner of BCS Placements, LLC.
Mr. Butler joined PaineWebber in 1997, which later
merged with UBS Warburg, a global securities and
investment banking firm. He is currently a financial
advisor and was an investment banker with UBS Warburg
until the end of 2003. Mr. Butler's focus was on the
transportation sector, including the financing of
freighter aircraft. Before PaineWebber merged with
UBS, Mr. Butler was a Managing Director at
PaineWebber, where he launched and built the first
structured finance product group for transportation
assets and at Alex Brown, where he initiated the
transportation debt practice. Mr. Butler is a member
of the Board, Chairman of the Compensation Committee
and a member of the Nominating and Governance
Committee of Atlas Air Worldwide Holdings, Inc.
Eugene I. Davis Mr. Davis is the Chairman and Chief Executive Officer
of PIRINATE Consulting Group, LLC, a privately held
consulting firm specializing in turn-around
management, merger and acquisition consulting, proxy
contests and strategic planning advisory services for
domestic and international public and private business
entities. Since forming PIRINATE in 1997, Mr. Davis
has advised, managed, sold, liquidated and/or acted in
an executive capacity for a number of businesses,
including companies operating in the metals,
transportation and logistics sectors. Prior to forming
PIRINATE, Mr. Davis served as President, Vice-Chairman
and Director of Emerson Radio Corp, and CEO and
Vice-Chairman of Sport Supply Group, Inc. Mr. Davis
began his career as an attorney and international
negotiator with Exxon Corp. and Standard Oil Company
(Indiana) and as a partner in two Texas-based law
firms where he specialized in corporate/securities
law, international
2
transactions and restructuring advisory. Mr. Davis
currently serves as Chairman of the Board of Directors
for Atlas Air Worldwide Holdings, Inc. and as a
director for Knology Broadband, Inc., American
Commercial Lines, Inc., Footstar Inc., Granite
Broadcasting Corp., Medicor Ltd., PRG Shultz
International, Inc. and Viskase Companies Inc. Mr.
Davis is a former director of Metals USA, Inc.
Daniel W. Dienst Mr. Dienst has served as the Chairman of the Board of
Metal Management, Inc., one of the largest full
service metals recyclers in the United States, since
April 2003, as that company's Chief Executive Officer
since January 2004, President since September 2004 and
as a member of the Board since 2001. From May 2000 to
January 2004, Mr. Dienst served as Managing Director
of the Corporate and Leveraged Finance Group of CIBC
World Markets Corp., a diversified global financial
services firm. From January 1999 through April 2000,
Mr. Dienst held various positions within CIBC World
Markets, including Executive Director of the High
Yield/Financial Restructuring Group. From October 1995
to March 1998, Mr. Dienst served in various capacities
with Jefferies & Company, Inc., most recently as its
Vice President, Corporate Finance/Restructurings. Mr.
Dienst previously served as the non-executive Chairman
of the Board of Metals USA, Inc.
Richard Kochersperger Mr. Kochersperger is the Director of the Food
Marketing Group, a virtual educational resource for
the food industry. Previously, he was the Director of
the Center for Food Marketing at Saint Joseph's
University, and currently is an Associate Professor at
Saint Joseph's University in the Food Marketing
Department. Mr. Kochersperger has designed and
implemented Executive Education programs for several
leading companies including Albertsons/ACME,
Tengelmann, A&P, Ferrero, Fleming, McCormick and the
USDA Cochran Fellowship. He is the author of several
books on Food Logistics and he produces the Annual
Food Industry Logistics Benchmark for Food
Distributors International
Larry J. Liebovich Currently retired after 33 years of service, Mr.
Liebovich is the former President of Liebovich Steel &
Aluminum Company. Mr. Liebovich served 20 years on the
Board of the Metal Service Center Institute and was
the Founding Chairman of the North American Steel
Alliance.
Gerald Morris Mr. Morris has served as President and Chief Executive
Officer of Intalite International N.V., a diversified
holding company with investments primarily in the
metals fabrication industry, for over 30 years. Mr.
Morris is also a director of Metal Management, Inc and
of Neenah Foundry Company Inc. Mr. Morris is a former
director of Metals USA, Inc.
Allen Ritchie Currently a private investor, Mr. Ritchie served as
Executive Vice President and Chief Financial Officer
of Protective Life Corporation from August 2001 until
November 2006. Before joining Protective Life
Corporation, Mr. Ritchie held a number of senior
management roles with
3
AGCO Corporation from 1991 to 1997 and with Medaphis
Corporation (now Per Se Technologies, Inc.) from
1998-2000.
Harbinger also notified the Company that it is filing stockholder proposals
intended to deter the current Board members from creating obstacles to the
election of the Harbinger nominees as a majority of the Board.
ABOUT HARBINGER CAPITAL PARTNERS
The Harbinger Capital Partners investment team located in New York City manages
in excess of $5 billion in capital through two complementary strategies.
Harbinger Capital Partners Master Fund I, Ltd. is focused on restructurings,
liquidations, event-driven situations, turnarounds and capital structure
arbitrage, including both long and short positions in highly leveraged and
financially distressed companies. Harbinger Capital Partners Special Situations
Fund, L.P. is focused on distressed debt securities, special situation equities
and private loans/notes in a predominantly long- only strategy.
Investor contact:
Harbert Management Corporation - John McCullough - 205-987-5576
Media contact:
Citigate Sard Verbinnen - Brandy Bergman or Dan Gagnier - 212-687-8080
ADDITIONAL INFORMATION
HARBINGER INTENDS TO MAKE A PRELIMINARY FILING WITH THE SECURITIES AND EXCHANGE
COMMISSION OF A PROXY STATEMENT AND AN ACCOMPANYING PROXY CARD TO BE USED TO
SOLICIT PROXIES IN CONNECTION WITH THE RYERSON INC. 2007 ANNUAL MEETING.
SECURITY HOLDERS ARE ADVISED TO READ THE PROXY STATEMENT AND OTHER DOCUMENTS
RELATED TO THE SOLICITATION OF PROXIES FROM STOCKHOLDERS OF RYERSON INC. FOR
USE AT THE 2007 ANNUAL MEETING WHEN THEY BECOME AVAILABLE BECAUSE THEY WILL
CONTAIN IMPORTANT INFORMATION, INCLUDING INFORMATION RELATING TO THE
PARTICIPANTS IN SUCH PROXY SOLICITATION. WHEN COMPLETED, A DEFINITIVE PROXY
STATEMENT AND A FORM OF PROXY WILL BE MAILED TO RYERSON INC. STOCKHOLDERS AND
WILL BE AVAILABLE AT NO CHARGE AT THE SECURITIES AND EXCHANGE COMMISSION'S
WEBSITE AT HTTP://WWW.SEC.GOV. INFORMATION RELATING TO THE PARTICIPANTS IN SUCH
PROXY SOLICITATION IS AND WILL BE CONTAINED IN THE SCHEDULE 13D FILED BY
HARBINGER AND IN AMENDMENTS THERETO.
(1) The metals service center and processor index is a composite of
companies selected by Harbinger that, in Harbinger's judgment, are
comparable to Ryerson. It includes A.M. Castle & Co., Earle M.
Jorgensen Company, Gibraltar Industries, Inc., Metals USA Inc.,
Novamerican Steel Inc., Olympic Steel Inc., Reliance Steel & Aluminum
Co., Russel Metals Inc., Shiloh Industries Inc., Steel Technologies
Inc., Worthington Industries Inc., Samuel Manu-Tech Inc. Metals USA
Inc. and Earle M. Jorgensen Company were included in index until the
dates they were acquired, 11/30/05 and 4/3/06, respectively.
(2) Source: FactSet Research Systems Inc. and SEC filings. Inventory at
companies reporting on a LIFO basis are adjusted to replacement cost
according to the inventory valuation reported in their SEC filings.
(3) Source: FactSet Research Systems Inc.
(4) Source: FactSet Research Systems Inc.
# # #
4