Exhibit 10.3

 

Ryerson Tull, Inc.

 

2002 Incentive Stock Plan

Form of

Performance Award Agreement

 

You have been selected to be a Participant in the Ryerson Tull, Inc. 2002
Incentive Stock Plan (the “Plan”), as specified below:

 

Participant:

    

Number of Performance Shares Granted:

    

Date of Grant:

    

Beginning of Performance Cycle:

    

End of Performance Cycle:

    

Performance Measure:

   Return on Net Assets (“RONA”)

Performance Measurement Threshold:

   4-year average RONA =             %

Performance Measurement Target:

   4-year average RONA =             %

Performance Measurement Cap:

   4-year average RONA =             %

Maximum Number of Performance Shares Payable (subject to the Value Cap):

    

 

If there is any inconsistency between the terms of this Agreement and the terms
of the Plan, the Plan’s terms shall completely supersede and replace the
conflicting terms of this Agreement. All capitalized terms shall have the
meanings ascribed to them in the Plan, unless specifically set forth otherwise
herein.

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To the extent not specified in the Plan, the terms of this award have been
determined by the Compensation Committee of the Board of Directors of the
Company (the “Committee”), as outlined in this Agreement.

 

1. Settlement of Award. Under Section 9(a)(iii) of the Plan, For each
Performance Share earned by you, as determined in accordance with the provisions
of Exhibit 1, which is attached to and forms a part of this Agreement, the
Company shall deliver to you (a) one share of Common Stock or (b) cash equal to
the Fair Market Value of one share of Common Stock. Any earned Performance
Shares payable to you in accordance with this Section are payable in Common
Stock or cash as you may elect from time to time, or may be deferred at your
election as provided in the Plan and in any rules adopted by the Committee. For
earned Performance Shares paid in shares of Common Stock, any fractional shares
of Common Stock shall be rounded to the nearest whole share of Common Stock. The
Fair Market Value of Common Stock shall have the definition provided in the Plan
and in any rules adopted by the Committee.

 

2. Eligibility for Earned Performance Shares. You shall be eligible for payment
of earned Performance Shares only if your employment with the Company:

 

  (a) Continues through the end of the Performance Cycle;

 

  (b) Is terminated due to Normal Retirement (as defined in the Ryerson Tull
Pension Plan) during the Performance Cycle;

 

  (c) Is terminated due to Disability or death during the Performance Cycle; or

 

  (d) Is terminated involuntarily for reasons other than Cause during the
Performance Cycle.

 

If you retire under Normal Retirement, suffer a Disability, or are terminated
involuntarily for reasons other than Cause during the Performance Cycle, you
shall be eligible only for that proportion of the number of Performance Shares
earned for such Performance Cycle that your number of full months of
participation during the Performance Cycle bears to 48 months. “Cause” has the
same meaning ascribed to it in the Employment Agreement between you and the
Corporation or, if you are not party to an Employment Agreement, in the form of
employment agreement approved by the Compensation Committee and in effect at the
date of termination.

 

In the event of your death, the Performance Cycle for this award will be deemed
to end at December 31 of the year of your death, attainment of the Performance
Measures will be computed as of that December 31, and you shall be eligible only
for that proportion of the number of Performance Shares deemed earned for such
deemed Performance Cycle that your number of full months of participation during
the Performance Cycle bears to 48 months. Your beneficiary shall be entitled to
the Performance Shares to which you otherwise would have been entitled under the
same conditions as would have been applicable to you.

 

Termination of employment during the Performance Cycle for any reason other than
Normal Retirement, Disability, death, or involuntarily for reasons other than
Cause, shall require forfeiture of this entire award, with no payment to you.

 

3. Deferral of Award. The payment of the shares of Common Stock earned pursuant
to this Performance Award Agreement to you may be deferred, in whole or in part,
at your election. If you elect to defer your receipt of such shares of earned
Common Stock, the amount deferred will be denominated in share units that will
be deemed to be invested in and ultimately be paid out, at your election, in the
form of shares of Common Stock or in cash equal to the Fair Market Value of
shares of Common Stock at the payment date. You must make a deferral election
prior to the beginning of the Performance Cycle. The duration of the deferral
extends to Retirement or termination of employment. Once made, the deferral
election is irrevocable.

 

4. Tax Withholding. The Company shall have the power and the right to deduct or
withhold, or require the Participant or beneficiary to remit to the Company, an
amount sufficient to satisfy federal, state, and local taxes, domestic or
foreign, required by law or regulation to be withheld with respect to any
taxable event arising as a result of this Agreement.

 

5. Nontransferability. Performance Shares may not be sold, transferred, pledged,
assigned, or otherwise alienated or hypothecated, other than by will or by the
laws of descent and distribution.

 

6. Change in Control. In the event of a Change in Control of the Company, you
will receive an amount in cash with respect to this performance award if it is
outstanding on the date of the Change in Control equal to (i) the Change in
Control Price, multiplied by (ii) 100% of the target award amount, and further
multiplied by (iii) a fraction, the denominator of which is the number of months
(rounded to the nearest whole number) in the performance cycle, and the
numerator of which is the number of months (rounded to the nearest whole number)
of the performance cycle elapsed prior to the date of the Change in Control of
the Company; provided, however, that if the Company’s market capitalization as
of the date of the Change in Control is less than $250 million, “30%” shall be
substituted for “100%” in clause (ii) above; and, provided further, that the
foregoing amount shall be in lieu of any other payment with respect to this
performance award, and if you receive any payment with respect to this
performance award after the Change in Control, but prior to your Date of
Termination, it shall reduce, but not below zero, the amount to which you are
entitled under this paragraph (6) for this award.

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7. Miscellaneous.

 

(a) This Agreement shall not confer upon Participant any right to continuation
of employment by the Company, nor shall this Agreement interfere in any way with
the Company’s right to terminate his or her employment at any time.

 

(b) With the approval of the Board, the Committee may terminate, amend, or
modify the Plan; provided, however, that no such termination, amendment, or
modification of the Plan may in any way adversely affect Participant’s rights
under this Agreement.

 

(c) This Agreement shall be subject to all applicable laws, rules, and
regulations, and to such approvals by any governmental agencies or national
securities exchanges as may be required.

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Exhibit 1

 

This Exhibit 1 is incorporated into and forms a part of the Agreement.

 

Revision of Performance Measures. The Performance Measures set forth in this
Exhibit 1 and the Agreement may be modified by the Committee during, and after
the end of, the Performance Cycle to reflect significant events that occur
during the Performance Cycle; provided, however, that if the Participant is or
will be a Covered Employee for purposes of Section 162(m) of the Internal
Revenue Code of 1986, as amended, then such modification can only be undertaken
in a manner consistent with the requirements of Section 162(m) and the
regulations thereunder, unless the Committee, in its sole discretion, decides
otherwise.

 

Amount of Award. No award shall be earned or payable unless the Company’s
aggregate earnings over the Performance Period is greater than $0.00. When the
Company’s aggregate earnings over the Performance Period is greater than $0.00,
the amount distributable to the Participant under the Agreement shall be
determined in accordance with the following schedule:

 

2005 Award of Performance Shares Earned and Payable at December 31, 2008

 

Actual Average

RONA for the

Performance Cycle

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RONA as a Percent

of the Performance
Measurement

Target

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Performance

Shares Earned as a

Percent of Target

Award Amount

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Target Award

Amount
(Number of
Performance

Shares in the

Initial Award)

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Performance

Shares Earned

(Number of

Shares*/Value

Cap)

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Less than             %

   Less than              %   0 %   ______    0  

                             %

                %   30 %*   ______                 *

                             %

                %   85 %   ______    ______  

                             %

                %   100 %   ______    ______  

                             %

                %   115 %   ______    ______  

                             %

                %   200 %*   ______                 *
shares/$            
but not less than
             shares

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* Subject to the Value Cap described below.

 

Note: Performance Shares earned above a threshold average RONA over the
Performance Cycle of             % will be interpolated from the above chart, up
to a maximum number of Performance Shares earned at the Performance Measurement
Cap of             %, which maximum is the lesser of (1)              shares and
(2) the Value Cap of $            , but in no event less than             
shares (the initial award of performance shares).

 

*The Value Cap is a limit on the total economic value of what may be earned that
can impact the shares earned as follows: performance shares can be earned only
up to the point that the total economic value of all shares delivered to a
participant does not exceed two times the economic value of the initial award
(except as noted below). The economic value of the initial award is computed by
multiplying 100% of the performance shares underlying the initial award by the
12-month average price of Company stock (excluding the two highest and two
lowest prices) prior to the grant date, which price was $14.19. Notwithstanding
this Value Cap, if performance is at or above target a participant will receive
no less than the initial award of performance shares provided for at the
beginning of the cycle.