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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
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FORM 8-K
CURRENT REPORT
PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
Date of report (Date of earliest event reported): April 6, 2005
INTERNATIONAL STEEL GROUP INC.
(Exact Name of Registrant as Specified in Charter)
DELAWARE 1-31926 71-0871875
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(State or Other (Commission File No.) (I.R.S. Employer
Jurisdiction Identification No.)
of Incorporation)
4020 KINROSS LAKES PARKWAY, RICHFIELD, OHIO 44286-9000
(Address of Principal Executive Offices) (Zip Code)
Registrant's telephone number, including area code:
(330) 659-9100
N.A.
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(Former Name or Former Address, if Changed Since Last Report)
Check the appropriate box below if the Form 8-K filing is intended to
simultaneously satisfy the filing obligation of the registrant under any of the
following provisions (see General Instruction A.2. below):
[ ] Written communications pursuant to Rule 425 under the Securities Act (17 CFR
230.425)
[ ] Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR
240.14a-12)
[ ] Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange
Act (17 CFR 240.14d-2(b))
[ ] Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange
Act (17 CFR 240.13e-4(c))
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ITEM 1.01. ENTRY INTO A MATERIAL DEFINITIVE AGREEMENT.
Each of Gordon Spelich and Jerome Nelson (each, an "Executive") entered
into an Agreement (each, a "Separation Agreement") with International Steel
Group Inc. (the "Company") pursuant to which each of Messrs. Spelich and Nelson
will resign from their positions as Vice President--Business Development, and
Vice President--Sales and Marketing, respectively. Each such resignation is
conditioned upon the consummation of the previously announced merger of the
Company with a subsidiary of Mittal Steel Company N.V. (the "Merger"). In the
event of the consummation of the Merger, each Separation Agreement will be
effective as of April 1, 2005.
In the event of the consummation of the Merger, the Separation
Agreements provide:
- for the aggregate payment of $1,077,323 to Mr. Spelich, which includes
$878,573 in severance compensation, $9,750 in accrued salary, $13,500
for unused vacation time and $175,500 representing the amount earned
under the ISG Officers Cash and Stock Bonus Plan during the first
quarter of 2005, and specified rights of participation in certain of
the Company's benefit plans;
- for the aggregate payment of $1,553,946 to Mr. Nelson, which includes
$1,348,061 in severance compensation, $10,100 in accrued salary,
$13,985 for unused vacation time and $181,800 representing the amount
earned under the ISG Officers Cash and Stock Bonus Plan during the
first quarter of 2005, and specified rights of participation in certain
of the Company's benefit plans; and
- that each Executive party thereto will be subject to non-competition
and confidentiality obligations for specified periods of time, and the
release by such Executive of any claims such Executive may have against
the Company.
ITEM 1.02. TERMINATION OF A MATERIAL DEFINITIVE AGREEMENT.
In connection with the execution of the Separation Agreements as
described in Item 1.01 above, and contingent upon the consummation of the
Merger, the employment agreement between the Company and Mr. Nelson, dated as of
February 26, 2004, will be terminated, and the payment made to him pursuant to
the Separation Agreement will be in lieu of any payments that would have been
payable pursuant to his employment agreement.
The employment agreement for Mr. Nelson had an initial term that would
have expired on December 31, 2005 and, following the initial term, would have
automatically been extended by one year on each December 31 unless either party
to the agreement provided notice of the intent not to renew the agreement by
September 30 of such year. The employment agreement provided for an annual base
salary of $242,000 and also that Mr. Nelson would (a) receive an annual bonus in
accordance with the ISG Officer Cash and Stock and Bonus Plan, (b) be eligible
to participate in the Company's 401(k) plan, (c) be entitled to participate in
the Company's disability program, (d) be eligible to participate in such
hospitalization, life insurance, and other employee benefit plans and programs,
if any, as may be adopted by the Company from time to
time and (e) be eligible to receive awards under any stock option plan as in
effect from time to time.
In the case of a termination of employment by the Company without
"cause" or by Mr. Nelson for "good reason," Mr. Nelson would have been entitled
to a severance payment equal to two times his usual base salary and bonus
compensation (using the average bonus over the past three years or if he was
employed for less than three years, such shorter period). Mr. Nelson would also
have been entitled to health care and major medical coverage for two years
following termination.
The employment agreement also included non-competition,
non-solicitation and confidentiality obligations on the part of Mr. Nelson.
ITEM 9.01. FINANCIAL STATEMENTS AND EXHIBITS.
(c) Exhibits.
EXHIBIT
NO. DESCRIPTION
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10.1 Agreement dated as of April 6, 2005 between
International Steel Group Inc. and Gordon Spelich.
10.2 Agreement dated as of April 6, 2005 between
International Steel Group Inc. and Jerome Nelson.
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934,
the registrant has duly caused this report to be signed on its behalf by the
undersigned hereunto duly authorized.
Date: April 11, 2005
INTERNATIONAL STEEL GROUP INC.
By /s/ Lonnie A. Arnett
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Name: Lonnie A. Arnett
Title: Vice President, Controller and
Chief Accounting Officer
EXHIBIT INDEX
EXHIBIT
NO. DESCRIPTION
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10.1 Agreement dated as of April 6, 2005 between International Steel Group
Inc. and Gordon Spelich.
10.2 Agreement dated as of April 6, 2005 between International Steel Group
Inc. and Jerome Nelson.