<PAGE>
SCHEDULE 14A INFORMATION
Proxy Statement Pursuant to Section 14(a) of
the Securities Exchange Act of 1934 (Amendment No. )
Filed by the Registrant /X/
Filed by a party other than the Registrant / /
Check the appropriate box:
/ / Preliminary Proxy Statement
/ / Confidential, for Use of the Commission Only (as permitted by Rule
14a-6(e)(2))
/X/ Definitive Proxy Statement
/ / Definitive Additional Materials
/ / Soliciting Material Pursuant to Section 240.14a-11(c) or Section
240.14a-12
USX Corporation
- --------------------------------------------------------------------------------
(Name of Registrant as Specified In Its Charter)
- --------------------------------------------------------------------------------
(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:
------------------------------------------------------------------------
<PAGE>
USX Corporation
[LOGO] NOTICE OF ANNUAL MEETING OF STOCKHOLDERS
AND PROXY STATEMENT
2000
Marathon Group Common Stock
U.S. Steel Group Common Stock
TUESDAY, APRIL 25, 2000
10:00 A.M., CENTRAL DAYLIGHT TIME
Wynfrey Ballroom
The Wynfrey Hotel at Riverchase Galleria
1000 Riverchase Galleria
Birmingham, Alabama 35244
PLEASE VOTE PROMPTLY EITHER BY:
- telephone,
- the Internet, or
- marking, signing and returning your proxy card.
<PAGE>
[LETTERHEAD]
March 13, 2000
Dear USX Stockholder,
We will hold our 2000 annual meeting of stockholders in the Wynfrey Ballroom of
The Wynfrey Hotel at Riverchase Galleria, 1000 Riverchase Galleria, Birmingham,
Alabama, on Tuesday, April 25, 2000 at 10:00 A.M., Central Daylight Time.
We will elect directors and independent accountants at the meeting.
The board of directors has nominated five of our 15 directors for re-election
this year. They are all Class I directors, which means their terms will
expire at the 2003 annual meeting. You can read about them, and about the
other directors who will continue in office, on pages 12-17 of the proxy
statement. All the nominees except one have been previously elected by the
stockholders.
We hope you will vote either by telephone or over the Internet or by marking,
signing and returning your proxy card as soon as possible, whether or not you
plan to attend the meeting.
Sincerely,
/s/ Thomas J. Usher
Marathon Group - U. S. Steel Group
<PAGE>
TABLE OF CONTENTS
<TABLE>
<S> <C>
Notice of Annual Meeting of Stockholders.............................. 4
Proxy Statement....................................................... 5
Questions and Answers............................................... 5
The Board of Directors.............................................. 7
Proposals of the Board
PROPOSAL NO. 1
ELECTION OF DIRECTORS............................................. 11
Nominees for Director............................................. 12
Continuing Directors.............................................. 14
PROPOSAL NO. 2
ELECTION OF INDEPENDENT ACCOUNTANTS............................... 17
Security Ownership.................................................... 18
Executive Compensation and Other Information.......................... 20
</TABLE>
3
<PAGE>
NOTICE OF ANNUAL MEETING OF STOCKHOLDERS
on April 25, 2000
We will hold our 2000 annual meeting of stockholders in the Wynfrey
Ballroom of The Wynfrey Hotel at Riverchase Galleria, 1000 Riverchase
Galleria, Birmingham, Alabama 35244 on Tuesday, April 25, 2000 at
10:00A.M., Central Daylight Time, in order to:
- elect five Class I directors,
- elect independent accountants for 2000, and
- transact any other business that properly comes before the meeting.
You are entitled to vote at the meeting if you were an owner of record of
either USX-Marathon Group or USX-U. S. Steel Group common stock at the
close of business on February 25, 2000. If your ownership is through a
broker or other intermediary, you will need to have proof of your
stockholdings in order to be admitted to the meeting. A recent account
statement, letter or proxy from your broker will suffice.
By order of the Board of Directors,
Dan D. Sandman
Secretary
Dated: March 13, 2000
USX Corporation
600 Grant Street
4 Pittsburgh, PA 15219-4776
<PAGE>
PROXY STATEMENT
WE HAVE SENT YOU THIS PROXY STATEMENT BECAUSE THE BOARD OF DIRECTORS IS ASKING
YOU TO GIVE YOUR PROXY (THAT IS, THE AUTHORITY TO VOTE YOUR SHARES) TO OUR PROXY
COMMITTEE SO THEY MAY VOTE YOUR SHARES ON YOUR BEHALF AT OUR ANNUAL MEETING OF
STOCKHOLDERS. The members of the proxy committee are Thomas J. Usher, Paul J.
Wilhelm and Robert M. Hernandez. They will vote your shares as you instruct.
We will hold the meeting on April 25, 2000 in the Wynfrey Ballroom of The
Wynfrey Hotel at Riverchase Galleria, 1000 Riverchase Galleria, Birmingham,
Alabama. The proxy statement contains information about the matters being voted
on and other information that may be helpful to you.
We began the mailing of the proxy statement, the proxy card and the 1999 annual
reports on or about March 13, 2000.
QUESTIONS AND ANSWERS
- -------------------------------------------------------------------------------
- - WHO MAY VOTE?
You may vote if you were a holder of either USX-Marathon Group or USX- U.S.
Steel Group common stock at the close of business on February 25, 2000.
- - WHAT MAY I VOTE ON?
You may vote on:
- the election of five nominees to serve as Class I directors and
- the election of PricewaterhouseCoopers LLP as our independent
accountants.
- - HOW DOES THE BOARD RECOMMEND I VOTE?
The board recommends that you vote:
- FOR each of the nominees for director and
- FOR the election of PricewaterhouseCoopers LLP as independent
accountants for 2000.
- - HOW DO I VOTE?
You may vote by telephone or over the Internet by following the instructions on
the enclosed proxy card (or, if you own your shares through a broker or other
intermediary, the enclosed voting instruction card). You may also vote by
marking, signing and dating the enclosed proxy card or voting instruction card,
and returning it in the prepaid envelope. The proxy committee will vote your
shares in accordance with your directions. If you return a proxy card but do not
mark the boxes showing how you wish to vote, the proxy committee will vote your
shares FOR each proposal, but only if you have signed and dated the card.
Unsigned proxy cards will not be voted at all. If you are a stockholder of
record (that is, if you are registered on our books), you may also vote in
person by attending the meeting.
- - MAY I CHANGE MY VOTE?
If you are a stockholder of record, you may change your vote or revoke your
proxy at any time before your shares are voted at the meeting by:
- voting again by telephone or over the Internet,
- sending us a proxy card dated later than your last vote,
- notifying the Secretary of USX in writing, or
- voting at the meeting.
- - WHAT IS THE VOTING RELATIONSHIP BETWEEN THE TWO CLASSES OF STOCK?
Both classes of USX common stock _ USX-Marathon Group Common Stock and
USX-U.S. Steel Group Common Stock _ will be voted together as a single class
on all matters voted on at the meeting. Each share of Marathon stock will be
entitled to one vote and each share of U.S. Steel stock will be entitled to
1.005 votes. We calculated the number of votes to which a share of U.S. Steel
stock is entitled by using a formula described
5
<PAGE>
in USX's Restated Certificate of Incorporation. It is based on the ratio of the
market value of one share of U.S. Steel stock to one share of Marathon stock
over the 20 business-day period ending on February 18, 2000.
- - HOW MANY OUTSTANDING SHARES ARE THERE?
At the close of business on February 25, 2000, which is the record date for
the meeting, there were 311,767,687 shares of Marathon stock (representing
311,767,687 votes) and 88,398,085 shares of U.S. Steel stock (representing
88,840,075 votes) outstanding.
- - HOW BIG A VOTE DO THE PROPOSALS NEED IN ORDER TO BE ADOPTED?
Directors are elected by a plurality of the votes of the shares present in
person at the meeting or represented by proxy and entitled to vote; that is,
those receiving the most votes are elected, even with less than a majority.
Independent accountants are elected by a majority of the votes of the shares
present in person at the meeting or represented by proxy and entitled to
vote. Abstentions are counted as votes present and entitled to vote and have
the same effect as votes against a proposal. Broker non-votes are not counted
as either votes for or votes against a proposal. Both abstentions and broker
non-votes are counted in determining that a quorum is present for the meeting.
- - WHAT ARE BROKER NON-VOTES?
The New York Stock Exchange permits brokers to vote their customers' shares
on routine matters when the brokers have not received voting instructions
from their customers. The election of directors and the election of
independent accountants are examples of routine matters on which brokers may
vote in this way. Brokers may not vote their customers' shares on non-routine
matters such as mergers and contested proposals unless they have received
voting instructions from their customers. Non-voted shares on non-routine
matters are broker non-votes.
- - WHAT CONSTITUTES A QUORUM?
Under our by-laws, a quorum is one-third of the voting power of the
outstanding shares of stock entitled to vote.
- - WILL MY VOTE BE CONFIDENTIAL?
All voting records which identify stockholders are kept permanently
confidential except as necessary to meet legal requirements and in other
limited circumstances such as proxy contests. The vote tabulators, who are
USX employees, and the inspector of election, who is independent, are
required to execute confidentiality agreements.
- - HOW WILL VOTING BE CONDUCTED ON OTHER MATTERS RAISED AT THE MEETING?
If any matters are presented at the meeting other than the proposals on the
proxy card, the proxy committee will vote on them using their best judgment.
Your signed proxy card, or your telephone or Internet vote, gives them the
authority to do this. Under our by-laws, notice of any matter to be presented
by a stockholder for a vote at the meeting must have been received by our
corporate secretary on or after December 24, 1999 and no later than January
23, 2000, and it must have been accompanied by certain information about the
stockholder presenting it. We have not received notice of any matter to be
presented other than those on the proxy card.
- - WHEN MUST SHAREHOLDER PROPOSALS BE SUBMITTED FOR THE 2001 ANNUAL MEETING?
Shareholder proposals submitted for inclusion in our 2001 proxy statement
must be received in writing by our corporate secretary no later than 5:00
P.M. Eastern Time on November 13, 2000. Shareholder proposals submitted
outside the process for inclusion in the proxy statement must be received
from stockholders of record on or after December 28, 2000 and no later than
January 27, 2001 and must be accompanied by certain information about the
stockholders making the proposals, in accordance with our by-laws.
6
<PAGE>
THE BOARD OF DIRECTORS
Under our by-laws and the laws of Delaware, USX's state of
incorporation, the business and affairs of USX are managed
under the direction of the board of directors. The board met
eight times in 1999. The directors spend considerable
time preparing for board and committee meetings, and they
attend as many meetings as possible. In 1999, their
attendance averaged 93 percent. The board has five principal
committees, all the members of which are non-employee
directors. The table below shows the current committee
memberships of each director and the number of meetings that
each committee held in 1999.
<TABLE>
<CAPTION>
ORGANIZATION
AND CORPORATE
BOARD COMMITTEE AUDIT COMPENSATION GOVERNANCE PUBLIC POLICY COMMITTEE ON
MEMBERSHIPS DIRECTOR COMMITTEE COMMITTEE COMMITTEE COMMITTEE FINANCIAL POLICY
<S> <C> <C> <C> <C> <C> <C>
----------------------------------------------------------------------------------------------------------
Neil A. Armstrong X X X
Jeanette G. Brown X X X*
----------------------------------------------------------------------------------------------------------
J. Gary Cooper X X X
Charles A. Corry X X X
----------------------------------------------------------------------------------------------------------
Charles R. Lee X X X*
Paul E. Lego X X X
----------------------------------------------------------------------------------------------------------
Ray Marshall X X X
John F. McGillicuddy X X X
----------------------------------------------------------------------------------------------------------
Seth E. Schofield X* X X
John W. Snow X* X X
Douglas C. Yearley X X X*
----------------------------------------------------------------------------------------------------------
Number of Meetings
in 1999 5 5 5 4 4
----------------------------------------------------------------------------------------------------------
</TABLE>
* Chairman
- -------------------------------------------------------------------------------
AUDIT COMMITTEE The Audit Committee is, among other things, responsible for:
- ensuring the integrity of our financial reports,
- recommending to the board the independent accountants to be
nominated for election by the stockholders,
- reviewing the independence of the independent accountants,
- reviewing the scope of the audit activities of the
independent accountants and our internal auditors,
- providing direction to the internal audit staff and the
independent accountants,
- approving the independent accountants' audit fee,
- reviewing audit results,
- reviewing and approving the annual financial statements,
the annual reports to stockholders, and the Annual Report
on Form 10-K filed with the Securities and Exchange
Commission,
- determining that appropriate controls are in place to
ensure that we operate in accordance with our procedures
and codes of conduct,
- reviewing compliance with our business conduct policies,
- reviewing significant accounting, auditing and Securities
and Exchange Commission pronouncements,
- reviewing:
-- matters pertaining to potentially divergent interests,
if any, between the holders of the two classes of common
stock,
7
<PAGE>
-- our policies and practices with respect to the two
business groups, and
-- the board's performance of its fiduciary duties to both
classes of stockholders, and
- reporting annually to the board on the adequacy of the
committee's charter.
- -------------------------------------------------------------------------------
COMPENSATION The Compensation Committee is responsible for:
COMMITTEE - making recommendations to the board on all matters of
policy and procedures relating to executive compensation,
- approving the salaries of officers (other than the
officer-directors, whose salaries are approved by the
board),
- administering the Annual Incentive Compensation Plan and
the Senior Executive Officer Annual Incentive Compensation
Plan, and
- administering the plans under which long-term incentives
are granted and approving grants of options, stock
appreciation rights and restricted stock under those plans.
The committee is also authorized to:
- adopt and amend employee benefit plans,
- review the activities of United States Steel and Carnegie
Pension Fund as administrator of certain benefit plans, and
- make recommendations to the board concerning policy matters
relating to employee benefits.
- -------------------------------------------------------------------------------
ORGANIZATION AND The Organization and Corporate Governance Committee:
CORPORATE - makes recommendations to the board concerning the
GOVERNANCE appropriate size and composition of the board, including
COMMITTEE -- candidates for election as directors,
-- the composition and functions of board committees,
-- the compensation of non-employee directors, and
-- all matters relating to the development and effective
functioning of the board,
- confers with management concerning plans for succession to
executive management positions,
- assesses and makes recommendations concerning overall
corporate governance to the extent specific matters are not
the assigned responsibility of other board committees, and
- considers nominees recommended by stockholders for election
as directors.
In recommending candidates for election as directors, the
committee, among other considerations, studies the
composition of the board and tries to identify candidates
with broad knowledge and experience in business and society
in general. Recommendations of candidates by stockholders of
record should be sent, together with the nominee's
qualifications and consent to be considered as a nominee, to
the Secretary of USX for presentation to the committee.
8
<PAGE>
PUBLIC POLICY The Public Policy Committee reviews and makes recommendations
COMMITTEE to the board concerning corporate policy related to:
- community and governmental relations,
- codes of conduct,
- environmental, safety and health matters,
- investor relations,
- trade matters, and
- other broad social, political and public issues.
- -------------------------------------------------------------------------------
COMMITTEE ON The Committee on Financial Policy provides oversight with
FINANCIAL POLICY respect to the appropriate capital structure and financial
policies of USX. Its key responsibility in that role is to
make recommendations to the board concerning dividends. The
board has also delegated to the committee the authority to:
- approve financings by USX (except financings which involve
the issuance of common stock), including the recommendation
of action to subsidiaries, partnerships and joint ventures,
- authorize loans to outside entities, guarantees by USX of
the credit of others, and other uses of USX credit, and
- approve USX's funding policy for its pension and other
post-employment benefit plans.
In addition, the committee is responsible for reviewing the
performance of United States Steel and Carnegie Pension Fund
as investment manager and/or trustee of our employee benefit
plans. It also receives reports and makes recommendations to
the board on various financial matters.
9
<PAGE>
COMPENSATION OF DIRECTORS
Our by-laws require that each non-employee director be
paid allowances and attendance fees as the board may from
time to time determine. Directors who are employees of
USX receive no compensation for their service on the
board. We pay our non-employee directors as follows:
<TABLE>
<S> <C>
Annual Retainer $60,000
Committee Membership Fee $ 5,000 ($6,000 for committee chairmen)
Meeting Fee (for each board or committee meeting) $ 1,600
- -----------------------------------------------------------------------------------------
</TABLE>
Under our Deferred Compensation Plan for Non-Employee
Directors, directors may defer some or all of their
annual retainers in the form of Common Stock Units or
cash. Each of our directors has elected to defer at least
half of his or her retainer in the form of Common Stock
Units, and some have deferred their entire retainers in
this way. All new directors are required to defer at
least half of their retainers as Common Stock Units. A
Common Stock Unit is what is sometimes referred to as
"phantom stock" because initially no stock is actually
issued. Instead, we keep a book entry account for each
director that shows how many Common Stock Units he or she
has. Then, when a director leaves the board, he or she
must take actual shares of common stock corresponding to
the number of Common Stock Units in his or her account.
We believe this is an effective way to increase the
directors' equity holdings in USX and thereby further
align their interest with that of the stockholders.
Every January, we credit each non-employee director's
deferred stock account with both Marathon Common Stock
Units and U. S. Steel Common Stock Units in the same
ratio that the outstanding shares of each class of stock
on a fully diluted basis had to each other on the last
trading day of the previous year. "Fully diluted" means
that we assume the exercise of all currently outstanding
stock options and the conversion to common stock of all
convertible securities if the exercise or conversion
would result in lower earnings per share. The ongoing
value of each Common Stock Unit equals the market price
of the corresponding class of stock (Marathon or U. S.
Steel). When dividends are paid on the common stock, we
credit each account with equivalent amounts in additional
Common Stock Units.
Directors may also defer portions of their annual
retainers in the form of cash, which may be invested in
certain investment options. When a director leaves the
board, he or she receives the deferred cash either in a
lump sum or in installments over ten years.
If USX were to undergo a change in control resulting in
the removal of a non-employee director from the board,
that director would receive a cash payment equal to the
value of his or her deferred stock and deferred cash
accounts.
Under our Non-Employee Director Stock Plan, each
non-employee director may receive a grant of up to 500
shares of each class of common stock. In order to
qualify, a director must first purchase an equivalent
number of shares in the open market during the 60 days
following his or her initial election to the board. The
shares granted under this plan may not be sold until the
director leaves the board.
Our retirement policy for directors requires non-employee
directors to retire at the end of the month in which they
turn 72, even if their terms have not expired. Employee
directors must retire from the board when they retire as
employees, except that the chief executive officer may
remain on the board, at the board's request, through the
month in which he or she turns 70. Our policy also
provides that directors who undergo a significant change
in their business or professional careers should
volunteer to resign from the board.
10
<PAGE>
PROPOSALS OF THE BOARD
The board will present the following proposals at the
meeting:
PROPOSAL NO. 1 ELECTION OF DIRECTORS
USX's Certificate of Incorporation divides the directors
into three classes: Class I, Class II and Class III. Each
class must consist, as nearly as possible, of one-third
of the directors. Once elected, directors serve for a
term of three years and until their successors are duly
elected and qualified. At each annual meeting, directors
who are elected to succeed directors whose terms have
expired are identified as being of the same class as
those they succeed. A director elected to fill a vacancy
is elected to the same class as the director he or she
succeeds, and a director elected to fill a newly created
directorship holds office until the next election of the
class to which he or she is elected.
Our by-laws require the board to fix the number of
directors, and the board has set the maximum number of
directors at 16. The current five Class I directors are
nominees for election this year for a three-year term
that will expire at the 2003 annual meeting. All five of
them except Mr. Cazalot (who was elected by the Board
effective March 3, 2000), and all of the continuing Class
II and Class III directors except Mr.Cooper (who was
elected by the Board effective May 1, 1999), have
previously been elected by the stockholders. Of the 15
current directors, four are officers of USX, one is a
retired officer of USX, six have top executive experience
with a wide variety of businesses, one was with the
National Aeronautics and Space Administration and served
as a university professor before entering business, one
had a career as a distinguished chemist before becoming
an educator, one has a distinguished career in education
in addition to service as a member of the President's
Cabinet, and one had a distinguished career in the
military and the diplomatic corps before entering
business. A brief statement about the background of each
nominee and each continuing director is given on the
following pages. If any nominee for whom you have voted
becomes unable to serve, your proxy may be voted for
another person designated by the board.
Our by-laws describe the procedures that must be used in
order for someone nominated by a stockholder of record to
be eligible for election as a director. They require that
notice be received by the Secretary at least 45 days, but
not more than 75 days, before the first anniversary of
the date on which we first mailed our proxy materials for
the preceding year's annual meeting of stockholders. The
notice must contain certain information about the
nominee, including his or her age, address, occupation
and share ownership, as well as the name, address and
share ownership of the stockholder giving the notice.
11
<PAGE>
NOMINEES FOR CLASS I DIRECTOR
TERMS EXPIRE 2003
[PHOTO] NEIL A. ARMSTRONG DIRECTOR SINCE 1984 AGE 69
------------------------------------------------------------
CHAIRMAN, AIL SYSTEMS INC. (DEFENSE ELECTRONICS COMPANY)
Mr. Armstrong received a BS degree in aeronautical
engineering from Purdue University and an MS degree in
aerospace engineering from the University of Southern
California. For 17 years he served with the National
Aeronautics and Space Administration and its predecessor
agency as engineer, test pilot, astronaut and
administrator. From 1971 to 1979 he was professor of
aerospace engineering at the University of Cincinnati. In
1982 he became Chairman of CTA, Inc. and retired from
that position in 1992. He has served as Chairman of AIL
Systems Inc. since June 1989. He is a director of Cinergy
Corp., Milacron Inc., Cordant Technologies, Inc. and RTI
International Metals, Inc. and is a member of the
National Academy of Engineering.
[PHOTO] CLARENCE P. CAZALOT, JR. DIRECTOR SINCE MARCH 3, 2000 AGE 49
------------------------------------------------------------
VICE CHAIRMAN-USX CORPORATION AND PRESIDENT-MARATHON
OIL COMPANY
Mr. Cazalot graduated from Louisiana State University in
1972 with a BS degree in geology and joined Texaco Inc.
that same year as a geophysicist. After holding a number
of management positions, Mr. Cazalot was elected a Vice
President of Texaco Inc. and President of Texaco's Latin
America/West Africa Division in 1992. In 1994 he was
named President of Texaco Exploration and Production
Inc., and in 1997 he was named President of International
Marketing and Manufacturing. Mr. Cazalot was named
President-International Production and Chairman of
London-based Texaco Ltd. in 1998. He was named Vice
President of Texaco Inc. and President-Production
Operations in 1999. Mr. Cazalot was elected Vice
Chairman-USX Corporation and President-Marathon Oil
Company effective March 3, 2000.
[PHOTO] ROBERT M. HERNANDEZ DIRECTOR SINCE 1991 AGE 55
------------------------------------------------------------
VICE CHAIRMAN & CHIEF FINANCIAL OFFICER, USX CORPORATION
Mr. Hernandez graduated from the University of Pittsburgh
with a Bachelor's degree in economics and mathematics and
received an MBA from the Wharton Graduate School of
Finance and Commerce at the University of Pennsylvania.
He joined USX in 1968 and held various finance and
accounting positions until 1980 when he was appointed
Assistant Corporate Comptroller. He was elected Vice
President and Treasurer in 1984 and Senior Vice President
and Comptroller in 1987. In 1989, he was appointed
President of the U.S. Diversified Group and in 1990
elected Senior Vice President-Finance & Treasurer. He was
elected director and Executive Vice President-Accounting
& Finance & Chief Financial Officer in 1991 and Vice
Chairman & Chief Financial Officer in 1994. Mr. Hernandez
is a director and Chairman of RTI International Metals,
Inc.; a director of Transtar, Inc., and a director and
Chairman of the Executive Committee of ACE Limited; a
trustee of BlackRock Funds; a director of the
Pennsylvania Chamber of Business and Industry; and a
member of the Pennsylvania Business Roundtable.
12
<PAGE>
[PHOTO] JOHN F. MCGILLICUDDY DIRECTOR SINCE 1984 AGE 69
------------------------------------------------------------
RETIRED CHAIRMAN OF THE BOARD, CHEMICAL BANKING CORPORATION
Mr. McGillicuddy graduated from Princeton University in
1952 and received an LLB degree from Harvard Law School
in 1955. He joined Manufacturers Hanover Trust Company in
1958, became Vice President in 1962, Senior Vice
President in 1966 and Executive Vice President and
Assistant to the Chairman in 1969. In 1970 he was elected
Vice Chairman and a director of Manufacturers Hanover
Corporation and Manufacturers Hanover Trust Company, and
he became President of each in 1971. Mr. McGillicuddy was
named Chairman and Chief Executive Officer of each
company in 1979. Following the merger of Manufacturers
Hanover Corporation and Chemical Banking Corporation on
January 1, 1992, Mr. McGillicuddy became Chairman of the
Board and Chief Executive Officer of the new Chemical
Banking Corporation and retired in January 1994. He is a
director of Southern Peru Copper Corporation, Young &
Rubicam Inc. and UAL Corporation. He is Chairman of New
York-Presbyterian Hospital, a member of The Business
Council and a Trustee Emeritus of Princeton University.
[PHOTO] JOHN W. SNOW DIRECTOR SINCE 1995 AGE 60
------------------------------------------------------------
CHAIRMAN, PRESIDENT AND CHIEF EXECUTIVE OFFICER,
CSX CORPORATION (A MAJOR TRANSPORTATION COMPANY)
Mr. Snow did undergraduate work at Kenyon College and the
University of Toledo, received a Ph.D. in economics from
the University of Virginia and earned a law degree from
George Washington University Law School. Following an
academic career as an economics and law professor and
several high-level presidential appointments with the
U.S. Department of Transportation and the National
Highway Traffic Safety Administration, Mr. Snow joined
CSX in 1977 as Vice President-Government Affairs for
Chessie System Inc. After a number of other senior
management assignments, he was elected President and
Chief Operating Officer of CSX in 1988, President and
Chief Executive Officer in 1989 and Chairman, President
and Chief Executive Officer in 1991. Mr. Snow is a
director of Circuit City Stores, Inc., GTE Corporation
and Johnson & Johnson. He is also Chairman of the Board
of the Association of American Railroads, a member of the
boards of trustees of The Johns Hopkins University and of
the University of Virginia Darden School Foundation; a
member of the Policy Committee of the Business Roundtable
and of the Executive Committee of The Business Council;
and Chairman of the Ron Brown Award for Corporate
Citizenship.
13
<PAGE>
CONTINUING CLASS II DIRECTORS
TERMS EXPIRE 2001
[PHOTO] J. GARY COOPER DIRECTOR SINCE 1999 AGE 63
------------------------------------------------------------
CHAIRMAN AND CHIEF EXECUTIVE OFFICER, COMMONWEALTH NATIONAL
BANK (COMMERCIAL BANK)
Ambassador Cooper graduated from the University of Notre
Dame with a BS degree in finance and attended Harvard
University's Senior Managers in Government program. He
was awarded an honorary doctor of law degree from Troy
University. A retired major general in the U.S. Marine
Corps, Ambassador Cooper was twice elected to the Alabama
legislature, was commissioner of the Alabama Department
of Human Resources and was appointed Assistant Secretary
of the Air Force during the Bush administration. He was
the United States Ambassador to Jamaica from 1994 to
1997. Ambassador Cooper is a director of GenCorp Inc. and
Protective Life Corporation.
[PHOTO] CHARLES R. LEE DIRECTOR SINCE 1991 AGE 60
------------------------------------------------------------
CHAIRMAN OF THE BOARD AND CHIEF EXECUTIVE OFFICER, GTE
CORPORATION (TELECOMMUNICATIONS COMPANY)
Mr. Lee received a Bachelor's degree in metallurgical
engineering from Cornell University and an MBA with
distinction from the Harvard Graduate School of Business.
He served in various financial and management positions
before becoming Senior Vice President-Finance for Penn
Central Corp. and then Columbia Pictures Industries Inc.
In 1983 he joined GTE as Senior Vice President of Finance
and in 1986 was named Senior Vice President of Finance
and Planning. He was elected President, Chief Operating
Officer and director in December 1988 and elected to his
present position in May 1992. Mr. Lee is a director of
The Procter & Gamble Company, United Technologies
Corporation, the Stamford Hospital Foundation, and the
New American Schools Development Corporation. He is a
member of The Business Council, the Business Roundtable,
The Conference Board and the New American Realities
Committee of the National Planning Association. He is
also a Trustee Emeritus and Presidential Councillor of
Cornell University.
[PHOTO] RAY MARSHALL DIRECTOR SINCE 1994 AGE 71
------------------------------------------------------------
PROFESSOR, UNIVERSITY OF TEXAS
Dr. Marshall graduated from Millsaps College in 1949 with
a BA degree and received an MA in economics from the
Louisiana State University in 1950 and a Ph.D. in
economics from the University of California at Berkeley
in 1954. From 1962 to 1967, Dr. Marshall was a professor
of economics at the University of Texas at Austin. He was
Chairman of the Department of Economics and held the
chair of Alumni Professor of Economics at the University
of Kentucky from 1967 to 1969. He returned to the
University of Texas as Chairman of the Department of
Economics and Director of the Center for the Study of
Human Resources in 1969. In 1977 Dr. Marshall became the
U.S. Secretary of Labor under the Carter Administration.
Dr. Marshall currently holds the Audre and Bernard
Rapoport Centennial Chair in Economics and Public Affairs
at the University of Texas at Austin.
14
<PAGE>
[PHOTO] THOMAS J. USHER DIRECTOR SINCE 1991 AGE 57
------------------------------------------------------------
CHAIRMAN OF THE BOARD & CHIEF EXECUTIVE OFFICER,
USX CORPORATION
Mr. Usher graduated from the University of Pittsburgh
with a BS degree in industrial engineering, an MS degree
in operations research and a Ph.D. in systems
engineering. He joined USX in 1965 and held various
positions in industrial engineering. From 1975 through
1979, he held a number of management positions at USX's
South and Gary Works. He was elected Executive Vice
President-Heavy Products in 1986, President-U.S. Steel
Group and director of USX in 1991, President & Chief
Operating Officer of USX in 1994 and Chairman of the
Board & Chief Executive Officer effective July 1, 1995.
He is a director of PNC Bank, N.A., PPG Industries, Inc.,
Transtar, Inc., and the U.S.-Japan Business Council; Vice
Chairman of the International Iron and Steel Institute; a
member of the Policy Committee of the Business
Roundtable; Director and Chairman of the U.S.-Korea
Business Council; a director of the American Petroleum
Institute; and a member of the Board of Trustees of the
University of Pittsburgh and of the Board of the Extra
Mile Education Foundation.
[PHOTO] PAUL J. WILHELM DIRECTOR SINCE 1995 AGE 58
------------------------------------------------------------
VICE CHAIRMAN-USX CORPORATION AND PRESIDENT-U. S. STEEL GROUP
Mr. Wilhelm received a BS degree in mechanical
engineering from Carnegie-Mellon University in 1964 and
joined USX following graduation. After holding a number
of management positions, Mr.Wilhelm in 1992 was elected
Vice President-Technology & Management Services for the
U.S. Steel Group. In 1993 he was named President of
USS/Kobe Steel Company, a joint venture between
subsidiaries of USX and Kobe Steel Ltd. Mr. Wilhelm was
elected Vice President-Operations of the U.S. Steel Group
in 1994, President-U.S. Steel Group the same year, and
director of USX in 1995. He was named Vice Chairman-USX
Corporation effective March 1, 2000. Mr. Wilhelm is a
director of Union Carbide Corporation, a member of the
Association of Iron and Steel Engineers, Vice Chairman of
the American Iron and Steel Institute, Chairman of the
Japan-America Society of Pennsylvania and a member of the
Board of Trustees of Carnegie Mellon University.
15
<PAGE>
CONTINUING CLASS III DIRECTORS
TERMS EXPIRE 2002
[PHOTO] JEANETTE G. BROWN DIRECTOR SINCE 1993 AGE 71
------------------------------------------------------------
RETIRED DIRECTOR OF CORPORATE RESEARCH, BP AMERICA
Dr. Brown graduated from Ohio University in 1950 with a
BS degree and received an MS degree from Western Reserve
University in 1958. She holds eight D.Sc. (hon.) degrees.
Dr. Brown completed the Executive Management School,
University of California, Berkeley. From 1950 to 1988 she
was employed by BP America (formerly The Standard Oil
Company) in various research positions. She retired as
Director of Corporate Research, Environmental and
Analytical Sciences. She is a director of AGA Gas, Inc.
Dr. Brown is a trustee of the Ohio University Foundation
and was Distinguished Visiting Professor and Director,
Research Enhancement there from 1989-1995. She was
appointed to the Ohio Boards of Regents in 1995, and is
Chair of the Board of Trustees of The Cleveland
Scholarship Programs, Inc. and a trustee of the Cleveland
Orchestra. She also serves on the White House Joint High
Level Advisory Panel on US/Japan Science and Technology
Agreements.
[PHOTO] CHARLES A. CORRY DIRECTOR SINCE 1988 AGE 68
------------------------------------------------------------
RETIRED CHAIRMAN OF THE BOARD & CHIEF EXECUTIVE OFFICER,
USX CORPORATION
Mr. Corry graduated from the University of Cincinnati in
1955 with a BA degree and received a JD degree from the
University of Cincinnati Law School. After serving in the
U.S. Air Force, he joined USX in 1959, holding various
finance and accounting positions prior to being named
Vice President-Corporate Planning in 1979. Mr. Corry was
elected Senior Vice President and Comptroller in 1982 and
President of the U. S. Diversified Group of USX in 1987.
He was elected President of USX in 1988 and elected
Chairman of the Board & Chief Executive Officer in 1989,
the position he held until his retirement on June 30,
1995. He is a director of Mellon Financial Corp. and
Omnova Solutions Inc., a member of the Federal Judicial
Nominating Commission and a member of The Business
Council.
[PHOTO] PAUL E. LEGO DIRECTOR SINCE 1988 AGE 69
------------------------------------------------------------
RETIRED CHAIRMAN, WESTINGHOUSE ELECTRIC CORPORATION
Mr. Lego graduated from the University of Pittsburgh with
BS and MS degrees in electrical engineering after service
in the U.S. Army. He joined Westinghouse in 1956 at the
East Pittsburgh plant and held a number of engineering
and management positions prior to being named a Vice
President in 1979, Executive Vice President in 1980 and
Senior Executive Vice President, Corporate Resources in
1985. In 1988 Mr. Lego was elected a director and
President and Chief Operating Officer of Westinghouse
and, in 1990, Chairman and Chief Executive Officer. Mr.
Lego retired in January 1993. He is Chairman of the Board
of Commonwealth Industries, Inc. and a director of
Dominion Resources Inc., Lincoln Electric Company and
Orlimar Golf Company; a trustee of the University of
Pittsburgh; and a member of The Business Council.
16
<PAGE>
[PHOTO] SETH E. SCHOFIELD DIRECTOR SINCE 1994 AGE 60
------------------------------------------------------------
RETIRED CHAIRMAN AND CHIEF EXECUTIVE OFFICER, USAIR GROUP
Mr. Schofield graduated from the Harvard Business School
Program for Management Development in 1975. He served in
various corporate staff positions after joining USAir in
1957 and became Executive Vice President-Operations in
1981. Mr. Schofield served as President and Chief
Operating Officer from 1990 until 1991. He was elected
President and Chief Executive Officer in 1991 and became
Chairman of the boards of USAir Group and USAir, Inc. in
1992. He retired in January 1996. Mr. Schofield is a
director of Calgon Carbon Corp.
[PHOTO] DOUGLAS C. YEARLEY DIRECTOR SINCE 1992 AGE 64
------------------------------------------------------------
CHAIRMAN OF THE BOARD, PHELPS DODGE CORPORATION
(A MAJOR INTERNATIONAL MINING AND MANUFACTURING CONCERN)
Mr. Yearley graduated from Cornell University with a
Bachelor's degree in metallurgical engineering and
attended the Program for Management Development at
Harvard Business School. He joined Phelps Dodge in 1960
as Director of Research. He held several key positions
before being elected Executive Vice President and a
director in 1987, Chief Executive Officer in 1989 and
President in 1991. He is a director of Lockheed Martin
Corporation, J. P. Morgan & Co. Incorporated and Morgan
Guaranty Trust Company, and Southern Peru Copper
Corporation; a member of the Business Council and the
Copper Development Association; and a director of the
International Copper Association, the National Mining
Association, the Phoenix Symphony and the Center for
Compatible Economic Development.
- --------------------------------------------------------------------------------
PROPOSAL NO. 2 ELECTION OF INDEPENDENT ACCOUNTANTS
PricewaterhouseCoopers LLP ("PricewaterhouseCoopers") has
served as independent accountants of USX for many years.
We believe that their knowledge of USX's business and its
organization gained through this period of service is
very valuable. In accordance with the established policy
of the firm, partners and employees of
PricewaterhouseCoopers assigned to the USX engagement are
periodically rotated, thus giving USX the benefit of new
thinking and approaches in the audit area. We expect
representatives of PricewaterhouseCoopers to be present
at the meeting with an opportunity to make a statement if
they desire to do so and to be available to respond to
appropriate questions.
For the year 1999, PricewaterhouseCoopers performed
professional services principally in connection with
audits of the consolidated financial statements of USX
and the financial statements of the Marathon Group and
the U.S. Steel Group, certain subsidiaries and certain
pension and other employee benefit plans. They also
reviewed quarterly reports and other filings with the
Securities and Exchange Commission and other agencies.
17
<PAGE>
SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS
The following table furnishes information concerning all
persons known to USX to beneficially own five percent or
more of any class of the voting stock of USX:
<TABLE>
<CAPTION>
Name and Address Amount and Nature of Percent of
Class of Beneficial Owner Beneficial Ownership Class
- ---------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
Marathon Stock FMR Corp., Edward C. Johnson 3d and 23,669,301 (1) 7.617 (1)
Abigail P. Johnson
82 Devonshire Street
Boston, MA 02109
Marathon Stock Capital Research and Management Company 16,300,000 (2) 5.3 (2)
333 South Hope Street
55th Floor
Los Angeles, CA 90071
Marathon Stock Wellington Management Company, LLP 15,422,800 (3) 5.00 (3)
75 State Street
Boston, MA 02109
Steel Stock Merrill Lynch & Co., Inc. 7,459,970 (4) 8.44 (4)
(on behalf of Merrill Lynch Asset
Management Group)
World Financial Center, North Tower
250 Vesey Street
New York, NY 10381
Steel Stock The Prudential Insurance Company 5,269,642 (5) 5.94 (5)
of America
751 Broad Street
Newark, NJ 07102
- -------------------------------------------------------------------------------
</TABLE>
(1) Based on Schedule 13G dated February 14, 2000 which indicates that FMR Corp.
had sole voting power over 4,390,089 shares, shared voting power over no
shares, sole dispositive power over 23,669,301 shares and shared
dispositive power over no shares. According to such Schedule 13G,
Fidelity Management & Research Company ("Fidelity"), a wholly-owned
subsidiary of FMR Corp., is the beneficial owner of 18,140,412 shares;
Edward C. Johnson 3d, FMR Corp., through its control of Fidelity and the
various investment companies to which Fidelity acts as investment adviser
(the "Funds"), each has sole power to dispose of the 18,140,412 shares
owned by the Funds; neither FMR Corp., nor Edward C. Johnson 3d has the
sole power to vote or direct the voting of the shares held by the Funds;
Fidelity Management Trust Company, a wholly-owned subsidiary of FMR
Corp., is the beneficial owner of 3,753,247 shares; Edward C. Johnson 3d
and FMR Corp., through its control of Fidelity Management Trust Company,
each has sole dispositive power over 3,753,247 shares and sole power to
vote or to direct the voting of 2,898,147 shares and no power to vote or
to direct the voting of 855,100 shares; Fidelity International Limited
("FIL"), once a majority-owned subsidiary of Fidelity but now operating
as an independent entity, is the beneficial owner of 1,775,642 shares;
and FIL has sole dispositive power over 1,775,642 shares owned by various
international funds for which it acts as an investment advisor, sole
power to vote or direct the voting of 1,491,942 such shares, and no power
to vote or direct the voting of 283,700 such shares. FMR Corp. and FIL
are of the view that they are not acting as a "group" for purposes of
Section 13(d) of the Securities Exchange Act of 1934.
(2) Based on Schedule 13G dated February 10, 2000 which indicates that
Capital Research and Management Company had sole voting power over no
shares, shared voting power over no shares, sole dispositive power over
16,300,000 shares and shared dispositive power over no shares.
(3) Based on Schedule 13G dated February 9, 2000 which indicates that
Wellington Management Company, LLP had sole voting power over no shares,
shared voting power over 679,100 shares, sole dispositive power over no
shares and shared dispositive power over 15,422,800 shares.
(4) Based on Schedule 13G dated February 4, 2000 which indicates that
Merrill Lynch & Co., Inc. had sole voting power over no shares, shared
voting power over 7,459,970 shares, sole dispositive power over no shares
and shared dispositive power over 7,459,970 shares. Merrill Lynch & Co.,
Inc. disclaims beneficial ownership of the shares shown above.
(5) Based on Schedule 13G dated February 7, 2000 which indicates that The
Prudential Insurance Company of America ("Prudential") had sole voting
power over 383,073 shares, shared voting power over 4,531,660 shares,
sole dispositive power over 383,073 shares and shared dispositive power
over 4,562,282 shares. Prudential does not admit beneficial ownership of
the shares shown above. Included in the total number of shares are
299,960 convertible preferred shares which are convertible into Steel
Stock at a ratio of 1.0811 Steel Stock share for each preferred share.
18
<PAGE>
SECURITY OWNERSHIP OF DIRECTORS
AND EXECUTIVE OFFICERS
The following table sets forth the number of shares of
each class of USX common stock beneficially owned as of
January 31, 2000 (except as noted) by each director, by
each executive officer named in the Summary Compensation
Table and by all directors and executive officers as a
group. No director or executive officer beneficially
owned, as of the applicable date, any equity securities
of USX other than those shown.
<TABLE>
<CAPTION>
Marathon Stock Steel Stock
Name Shares Shares
- ---------------------------------------------------------------------------------------
<S> <C> <C>
Neil A. Armstrong (1) ................ 12,713 4,150
Victor G. Beghini (2)(3).............. 615,468 138,224
Jeanette G. Brown (1) ................ 6,463 2,823
Clarence P. Cazalot, Jr.(2)(3)........ 300,000 0
J. Gary Cooper (1).................... 2,461 1,376
Charles A. Corry (1)(2)(3)............ 62,926 80,932
Charles C. Gedeon (2)(3).............. 7,609 124,866
Carl P. Giardini (2)(3)............... 205,917 12,680
Robert M. Hernandez (2)(3)(4)......... 445,154 188,426
Charles R. Lee (1).................... 11,605 4,399
Paul E. Lego (1)...................... 9,801 3,134
Ray Marshall (1)...................... 9,223 3,636
John F. McGillicuddy (1).............. 12,008 3,850
Dan D. Sandman (2)(3)................. 131,993 88,676
Seth E. Schofield (1)................. 6,795 2,854
John W. Snow (1)...................... 3,926 1,932
Thomas J. Usher (2)(3)................ 704,538 501,225
Paul J. Wilhelm (2)(3)................ 96,869 240,680
Douglas C. Yearley (1)................ 7,117 3,067
All Directors and Executive Officers
as a group.......................... 3,467,227 2,130,960
(38 persons) (1)(2)(3)(5)
- ---------------------------------------------------------------------------------------
(1) Includes Common Stock Units
credited under the USX
Corporation Deferred
Compensation Plan for
Non-Employee Directors Marathon Stock Steel Stock
as follows: Common Stock Units Common Stock Units
- ---------------------------------------------------------------------------------------
Neil A. Armstrong..................... 11,214 3,850
Jeanette G. Brown..................... 5,389 1,736
J. Gary Cooper........................ 1,454 367
Charles A. Corry...................... 2,927 932
Charles R. Lee........................ 9,606 3,199
Paul E. Lego.......................... 8,227 2,817
Ray Marshall.......................... 8,137 2,540
John F. McGillicuddy.................. 10,009 3,450
Seth E. Schofield..................... 5,704 1,754
John W. Snow.......................... 2,927 933
Douglas C. Yearley.................... 6,118 2,067
- ---------------------------------------------------------------------------------------
</TABLE>
(2) Includes shares held under the USX Savings Fund Plan, the Marathon Thrift
Plan, the USX Dividend Reinvestment and Direct Stock Purchase Plans and the
1990 Stock Plan.
(3) Includes shares which may be acquired upon exercise of outstanding
options as follows (all options other than those granted on May 25, 1999 and
on March 3, 2000 are currently exercisable): Mr. Usher: Marathon Stock
648,600, Steel Stock 466,400; Mr. Corry: Marathon Stock 60,000, Steel Stock
80,000; Mr.Beghini: Marathon Stock 481,250, Steel Stock 112,750; Mr.
Cazalot: Marathon Stock 300,000 (granted March 3, 2000), Steel Stock none;
Mr. Wilhelm: Marathon Stock 85,500, Steel Stock 219,750; Mr. Hernandez:
Marathon Stock 400,450, Steel Stock 164,500; Mr.Sandman: Marathon Stock
105,400, Steel Stock 79,325; Mr. Giardini: Marathon Stock 133,420, Steel
Stock 12,680; Mr. Gedeon: Marathon Stock none, Steel Stock 112,500; and
all directors and executive officers as a group: Marathon Stock 2,821,010,
Steel Stock 1,878,660.
(4) As of January 31, 2000 United States Steel and Carnegie Pension Fund,
trustee of the United States Steel Corporation Plan for Employee Pension
Benefits and the United States Steel Corporation Plan for Non-Union Employee
Pension Benefits, owned 587,680 shares of Marathon Stock. This stock was
received in exchange for common stock of Texas Oil & Gas Corp. Mr. Hernandez
is chairman and one of seven members of the Investment Committee of the
trustee. The board of directors of the trustee has by formal resolution
delegated sole power to vote and dispose of such stock to a subcommittee of
the Investment Committee which is composed of members who are not officers
or employees of USX. Mr. Hernandez disclaims beneficial ownership of such
stock.
(5) Total shares beneficially owned in each case constitute less than one
percent of the outstanding shares of each class except that all directors
and executive officers as a group, including Mr. Beghini and Mr. Giardini
(who have retired), own 1.11 percent of the Marathon Stock and 2.41 percent
of the Steel Stock.
19
<PAGE>
EXECUTIVE COMPENSATION AND OTHER INFORMATION
The following table sets forth certain information concerning the
compensation awarded to, earned by or paid to (a) Mr. Usher, (b) the other
four most highly compensated executive officers of USX who were serving as
executive officers at the end of 1999, and (c) Mr. Beghini and Mr. Giardini,
each of whom would have been among the other four most highly compensated
executive officers if he had been serving as an executive officer at the end
of 1999, for services rendered in all capacities during 1999, 1998 and 1997:
<TABLE>
<CAPTION>
SUMMARY COMPENSATION TABLE
========================================================================================================================
LONG-TERM
ANNUAL COMPENSATION COMPENSATION(4)
---------------------------------------------- -------------------------
NAME SALARY AND OTHER RESTRICTED ALL
AND BONUS ANNUAL STOCK OPTIONS/ OTHER
PRINCIPAL SALARY BONUS TOTAL COMPENSATION AWARD(S) SARS COMPENSATION
POSITION YEAR ($) ($) ($) ($) ($)(1) (#)(2) ($)(3)
- ------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
T. J. Usher 1999 1,241,667 1,400,000 2,641,667 13,660 291,151 324,000 119,108
Chairman 1998 1,097,917 1,320,000 2,417,917 11,549 354,840 270,000 126,805
& Chief 1997 981,250 1,420,000 2,401,250 16,820 89,199 200,000 136,079
Executive Officer
- ------------------------------------------------------------------------------------------------------------------------
V. G. Beghini 1999 687,500 1,000,000 1,687,500 3,724 0 0 104,364
Vice Chairman- 1998 775,000 900,000 1,675,000 0 0 120,000 123,543
Marathon Group 1997 723,333 1,050,000 1,773,333 0 0 90,000 116,084
and President-
Marathon Oil
Company (RETIRED OCTOBER 31, 1999)
- ------------------------------------------------------------------------------------------------------------------------
P. J. Wilhelm 1999 604,167 600,000 1,204,167 7,496 119,490 120,000 49,329
Vice Chairman- 1998 535,833 600,000 1,135,833 8,426 217,817 100,000 49,593
USX Corporation 1997 407,500 611,000 1,018,500 7,874 30,599 75,000 47,698
and President-
U. S. Steel Group
- ------------------------------------------------------------------------------------------------------------------------
R. M. Hernandez 1999 573,750 600,000 1,173,750 7,535 94,153 120,000 55,435
Vice Chairman 1998 542,500 650,000 1,192,500 7,876 53,841 100,000 58,180
& Chief 1997 522,500 750,000 1,272,500 6,954 29,733 75,000 62,434
Financial Officer
- ------------------------------------------------------------------------------------------------------------------------
D. D. Sandman 1999 425,000 425,000 850,000 4,251 75,323 60,000 47,852
General Counsel, 1998 397,917 450,000 847,917 4,852 66,079 56,000 46,196
Secretary and 1997 354,583 530,000 884,583 2,986 21,812 40,000 39,077
Senior Vice
President-
Human Resources
& Public Affairs
- ------------------------------------------------------------------------------------------------------------------------
C. P. Giardini 1999 314,167 280,000 594,167 5,927 61,688 0 48,182
Executive Vice 1998 357,000 350,000 707,000 1,463 30,600 32,500 56,720
President- 1997 335,500 450,000 785,500 1,463 17,625 25,000 54,065
Exploration &
Production, Marathon
Oil Company (RETIRED OCTOBER 31, 1999)
- ------------------------------------------------------------------------------------------------------------------------
C. C. Gedeon 1999 336,000 230,000 566,000 1,677 31,041 35,000 28,725
Executive Vice 1998 322,667 330,000 652,667 1,841 22,369 32,500 31,278
President- 1997 305,000 400,000 705,000 1,841 12,800 25,000 35,018
Raw Materials &
Diversified Businesses,
U. S. Steel Group
- ------------------------------------------------------------------------------------------------------------------------
</TABLE>
(1) Grants of restricted stock under the USX 1990 Stock Plan. Grants are
subject to conditions including continued employment and achievement of
business performance standards. Dividends are paid on restricted stock.
Shown below is the vesting schedule for restricted stock scheduled to
vest less than three years from the date of grant, together with the
number and value, as of December 31, 1999, of the aggregate holdings of
restricted stock for each of the executive officers named in the Summary
Compensation Table. Vesting shown assumes achievement of business
performance at peer-group standard (as described in the Compensation
Committee Report which begins on page 25).
20
<PAGE>
<TABLE>
<CAPTION>
UNVESTED RESTRICTED SHARES
VESTING SCHEDULE AGGREGATE HOLDINGS
--------------------------------------------- ------------------------------------------
VALUE AS OF
CLASS OF MAY 2000 CLASS OF DECEMBER 31, 1999
DATE GRANTED STOCK (SHARES) STOCK SHARES ($)
- -----------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
T. J. Usher May 26, 1998 Marathon 6,500 Marathon 13,162 328,227
Steel 3,570 Steel 7,088 229,253
---------------
May 25, 1999 Marathon 3,120 557,480
Steel 1,680
- -----------------------------------------------------------------------------------------------------------------
V. G. Beghini - - -
- -----------------------------------------------------------------------------------------------------------------
P. J. Wilhelm May 26, 1998 Marathon 1,200 Marathon 2,205 54,987
Steel 2,535 Steel 5,895 190,667
---------------
May 25, 1999 Marathon 0 245,654
Steel 2,265
- -----------------------------------------------------------------------------------------------------------------
R. M. Hernandez May 26, 1998 Marathon 975 Marathon 4,387 109,401
Steel 555 Steel 2,363 76,428
---------------
May 25, 1999 Marathon 975 185,829
Steel 525
- -----------------------------------------------------------------------------------------------------------------
D. D. Sandman May 26, 1998 Marathon 1,222 Marathon 3,510 87,531
Steel 658 Steel 1,890 61,130
---------------
May 25, 1999 Marathon 780 148,661
Steel 420
- -----------------------------------------------------------------------------------------------------------------
C. P. Giardini - - - Marathon 4,050 100,997
- -----------------------------------------------------------------------------------------------------------------
C. C. Gedeon May 26, 1998 Steel 600 Steel 2,700 87,328
May 25, 1999 Steel 400
- -----------------------------------------------------------------------------------------------------------------
</TABLE>
(2) All option shares listed were granted with tandem stock appreciation
rights ("SARs").
(3) This column includes amounts contributed by USX under the USX Savings
Fund Plan or the Marathon Thrift Plan and the related supplemental
savings plans. Such amounts for 1999 are $62,083 for Mr. Usher, $99,597
for Mr. Beghini, $30,208 for Mr. Wilhelm, $28,687 for Mr. Hernandez,
$21,250 for Mr. Sandman, $41,961 for Mr. Giardini and $15,120 for Mr.
Gedeon. Also included are amounts attributable to split-dollar life
insurance provided by USX. (Marathon Oil Company does not provide
split-dollar life insurance.) For 1999, these amounts are $32,513 for Mr.
Usher, $8,527 for Mr. Wilhelm, $ 17,244 for Mr. Hernandez, $18,599 for
Mr. Sandman and $8,255 for Mr. Gedeon. Also included are amounts
attributable to a mandatory tax compliance program. For 1999, these
amounts were $2,000 for each of Messrs. Usher, Wilhelm, Hernandez,
Sandman, Giardini and Gedeon. Also included are dividends paid on
restricted stock. For 1999, these amounts were $22,512 for Mr. Usher,
$4,767 for Mr. Beghini, $8,594 for Mr. Wilhelm, $7,504 for Mr. Hernandez,
$6,003 for Mr. Sandman, $4,221 for Mr.Giardini and $3,350 for Mr. Gedeon.
21
<PAGE>
(4) Restricted stock and stock options/SAR shares granted by class of stock
are as follows:
<TABLE>
<CAPTION>
RESTRICTED
CLASS OF STOCK STOCK OPTION/
STOCK ($) SAR SHARES
- --------------------------------------------------------------------------------------------
<S> <C> <C> <C>
T. J. Usher 1999 Marathon 191,878 210,600
Steel 99,273 113,400
--------------------------------------------------------------
1998 Marathon 221,000 175,500
Steel 133,840 94,500
--------------------------------------------------------------
1997 Marathon 57,281 130,000
Steel 30,720 64,000
Delhi 1,198 6,000
- --------------------------------------------------------------------------------------------
V. G. Beghini 1999 Marathon 0 0
Steel 0 0
--------------------------------------------------------------
1998 Marathon 0 78,000
Steel 0 42,000
--------------------------------------------------------------
1997 Marathon 0 58,500
Steel 0 31,500
- --------------------------------------------------------------------------------------------
P. J. Wilhelm 1999 Marathon 24,675 24,000
Steel 94,815 96,000
--------------------------------------------------------------
1998 Marathon 72,420 35,000
Steel 145,397 65,000
--------------------------------------------------------------
1997 Marathon 9,400 24,000
Steel 20,800 48,750
Delhi 399 2,250
- --------------------------------------------------------------------------------------------
R. M. Hernandez 1999 Marathon 62,040 78,000
Steel 32,113 42,000
--------------------------------------------------------------
1998 Marathon 33,150 65,000
Steel 20,691 35,000
--------------------------------------------------------------
1997 Marathon 19,094 48,750
Steel 10,240 24,000
Delhi 399 2,250
- --------------------------------------------------------------------------------------------
D. D. Sandman 1999 Marathon 49,644 39,000
Steel 25,679 21,000
--------------------------------------------------------------
1998 Marathon 41,548 36,400
Steel 24,531 19,600
--------------------------------------------------------------
1997 Marathon 13,748 26,000
Steel 8,064 12,800
Delhi 0 1,200
- --------------------------------------------------------------------------------------------
C. P. Giardini 1999 Marathon 61,688 0
1998 Marathon 30,600 32,500
1997 Marathon 17,625 25,000
- --------------------------------------------------------------------------------------------
C. C. Gedeon 1999 Steel 31,041 35,000
1998 Steel 22,369 32,500
1997 Steel 12,800 25,000
- --------------------------------------------------------------------------------------------
</TABLE>
22
<PAGE>
1999 OPTION/SAR GRANTS
The following table sets forth certain information concerning options and
stock appreciation rights ("SARs") granted during 1999 to each executive
officer named in the Summary Compensation Table under the USX 1990 Stock Plan:
<TABLE>
<CAPTION>
% of
Total Potential Realizable Value
Options/ Exercise at Assumed Annual Rates of
Number of SARs or Base Stock Price Appreciation
Options/ Granted to Price per for Option Term ($)(4)
Name or Class of SARs Employees Share Expiration --------------------------------------
Group Stock Granted(1) in 1999(3) ($) Date 0% 5% 10%
- --------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
T. J. Usher Marathon 210,600 (2) 21.0% 29.3750 May 25, 2009 0 3,890,582 9,859,492
Steel 113,400 (2) 17.3% 28.2188 May 25, 2009 0 2,012,476 5,099,995
V. G. Beghini Marathon 0
Steel 0
P. J. Wilhelm Marathon 24,000 (2) 2.4% 29.3750 May 25, 2009 0 443,371 1,123,589
Steel 96,000 (2) 14.6% 28.2188 May 25, 2009 0 1,703,683 4,317,456
R. M. Hernandez Marathon 78,000 (2) 7.8% 29.3750 May 25, 2009 0 1,440,956 3,651,664
Steel 42,000 (2) 6.4% 28.2188 May 25, 2009 0 745,361 1,888,887
D. D. Sandman Marathon 39,000 (2) 3.9% 29.3750 May 25, 2009 0 720,478 1,825,832
Steel 21,000 (2) 3.2% 28.2188 May 25, 2009 0 372,681 944,444
C. P. Giardini Marathon 0
C. C. Gedeon Steel 35,000 (2) 5.3% 28.2188 May 25, 2009 0 621,135 1,574,073
- --------------------------------------------------------------------------------------------------------------------------------
All Stockholders Marathon N/A N/A 29.3750 N/A 0 5,759,524,548 14,595,754,699
Steel N/A N/A 28.2188 N/A 0 1,568,767,711 3,975,554,591
- --------------------------------------------------------------------------------------------------------------------------------
All Optionees Marathon 1,005,000 100.0% 29.3750 May 25, 2009 0 18,566,169 47,050,281
Steel 656,400 100.0% 28.2188 May 25, 2009 0 11,648,934 29,520,605
- --------------------------------------------------------------------------------------------------------------------------------
All Optionees' Marathon N/A N/A 29.3750 N/A 0 0.32% 0.32%
Gain as % of Steel N/A N/A 28.2188 N/A 0 0.74% 0.74%
All Stockholders'
Gain
- --------------------------------------------------------------------------------------------------------------------------------
</TABLE>
(1) All options listed are exercisable on May 25, 2000.
(2) These options were granted with tandem SARs, which have the same date of
exercisability as the underlying option. Upon the exercise of an SAR, an
optionee receives an amount, in cash and/or shares, equal to the excess, for
a specified number of shares, of (a) the fair market value of a share on the
date the SAR is exercised (except that for any SAR exercised during the
10-business-day period beginning on the third business day following the
release of USX's quarterly earnings, the Compensation Committee may, in its
sole discretion, establish a uniform fair market value of a share for such
period which shall not be more than the highest daily fair market value and
shall not be less than the lowest daily fair market value during such
10-business-day period) over (b) the exercise or base price per share.
(3) Indicates percentage of total options granted in the applicable class of
stock.
(4) The dollar amounts under these columns are the result of calculations at
0% and at the 5% and 10% rates set by the Securities and Exchange Commission
and therefore are not intended to forecast possible future appreciation, if
any, of the price of the Marathon Stock or the Steel Stock. USX did not use
an alternative formula for a grant date valuation, as USX is not aware of
any formula which will determine with reasonable accuracy a present value
based on future unknown or volatile factors. Amounts shown for All
Stockholders represent the potential realizable value assuming appreciation
at the rates indicated based on the exercise or base price per share and the
expiration date applicable to grants made in 1999 and the number of
outstanding shares as of December 31, 1999.
23
<PAGE>
OPTION EXERCISES AND YEAR-END VALUES
The following table sets forth certain information concerning options to
purchase USX common stock and stock appreciation rights ("SARs") exercised by
each executive officer named in the Summary Compensation Table during 1999
together with the total number of options and SARs outstanding at December
31, 1999 and the value of such options.
AGGREGATED 1999 OPTION/SAR EXERCISES
AND DECEMBER 31, 1999 OPTION/SAR VALUES
<TABLE>
<CAPTION>
Total Value
of Unexercised
No. of Total Value No. of In-The-Money
Shares Realized Unexercised Options/SARs at
Underlying for All Options/SARs at December 31, 1999
Options/SARs Classes of December 31, for All Classes
Name Exercised(1) Stock ($)(1) 1999(1) of Stock ($)(1)
- -------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
T. J. Usher 20,000 18,624 1,115,000 817,157
V. G. Beghini 0 0 594,000 1,461,502
P. J. Wilhelm 0 0 305,250 412,760
R. M. Hernandez 0 0 564,950 1,182,878
D. D. Sandman 5,000 4,656 184,725 98,370
C. P. Giardini 0 0 146,100 179,397
C. C. Gedeon 0 0 112,500 152,970
- -------------------------------------------------------------------------------
</TABLE>
Note: All options listed above, except those granted on May 25, 1999, are
currently exercisable. Except for 2,500 shares granted to Mr. Wilhelm,
all options listed above were granted with SARs.
(1) Figures by class of stock are as follows:
<TABLE>
<CAPTION>
Total Value of
No. of Unexercised
Unexercised In-The-Money
No. of Shares Options/SARs Options/SARs
Underlying Value at at
Class of Options/SARs Realized December 31, December 31,
Stock Exercised ($) 1999 1999
- -------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
T. J. Usher Marathon 20,000 18,624 648,600 285,250
Steel 0 0 466,400 531,907
V. G. Beghini Marathon 0 0 481,250 1,441,453
Steel 0 0 112,750 20,049
P. J. Wilhelm Marathon 0 0 85,500 0
Steel 0 0 219,750 412,760
R. M. Hernandez Marathon 0 0 400,450 983,406
Steel 0 0 164,500 199,472
D. D. Sandman Marathon 5,000 4,656 105,400 0
Steel 0 0 79,325 98,370
C. P. Giardini Marathon 0 0 133,420 175,803
Steel 0 0 12,680 3,594
C. C. Gedeon Marathon 0 0 0 0
Steel 0 0 112,500 152,970
- -------------------------------------------------------------------------------
</TABLE>
24
<PAGE>
COMPENSATION COMMITTEE REPORT
ON EXECUTIVE COMPENSATION
Our Committee sets policies and administers programs on executive
compensation. When we believe that action should be taken on a specific
compensation item, we either make a recommendation to the USX Board or a
subsidiary company board or take action on our own, whichever is appropriate.
We report to the USX Board actions which do not require board approval. The
purpose of this report is to summarize the philosophy, specific program
objectives and other relevant factors considered by the Committee in decision
making with respect to the compensation of USX, Marathon Group and U. S.
Steel Group executive officers, including the officers named in the Summary
Compensation Table.
Compensation programs for USX's executive officers are designed to attract,
retain and motivate employees who will make significant contributions to the
achievement of corporate goals and objectives. The principal elements of our
executive officers' compensation are:
- - Salary
- - Short-term incentive (bonus) awards and
- - Long-term incentive awards (stock options with stock appreciation rights and
restricted stock).
For each of the above elements of compensation, we exercise our discretion in
the subjective consideration of the factors described below and within the
limitations of the various plans.
SALARY
Salary administration at USX begins with the development, and periodic
adjustment, of salary structures for executive officers employed at the
corporate level and at each major business unit. Each executive officer's
position is assigned a salary grade with an associated salary range. Our two
major objectives in developing salary structures and assigning grades are to
maintain:
1. external competitiveness - the midpoint of the salary range for each
position is near the average midpoint for similar positions at comparable
companies, and
2. internal equity - each position's grade in the unit's hierarchy of
positions accurately reflects its relative "value".
The data used in developing and adjusting salary structures are obtained from
surveys coordinated by independent consultants, with each unit having its own
sources of relevant data.
We make decisions on salary increases and, occasionally - when business
conditions dictate - salary decreases. When we determine salary increases, we
give the highest weighting to performance; but we also consider other
factors, such as experience and time in position. Once an executive officer's
salary has passed the midpoint for the position, increases seldom exceed
amounts necessary to maintain the salary near the midpoint, assuming
performance merits such increases. Therefore, incentive opportunities provide
the primary basis for significant increases in compensation. The salaries
shown for the officers named in the Summary Compensation Table reflect the
results of our salary reviews and related actions.
25
<PAGE>
SHORT-TERM INCENTIVE AWARDS
USX's short-term incentive (bonus) opportunities for executive officers are
designed to provide awards near the average of those provided by similar
companies for on-target performance. However, our incentive plans are
designed to provide exceptional rewards for superior performance and lower
rewards for below-average performance. We make bonus awards under the Senior
Executive Officer Annual Incentive Compensation Plan, as well as under other
plans developed for specific business units. The Senior Executive Officer
Annual Incentive Compensation Plan was developed specifically to retain the
corporation's tax deduction for awards made to the officers named in the
Summary Compensation Table and was approved, as amended and restated, by the
stockholders on April 28, 1998.
SENIOR EXECUTIVE OFFICER ANNUAL INCENTIVE COMPENSATION PLAN
This Plan provides for awards based on pre-established performance measures
specifically related to the responsibilities of Plan participants. For each
performance measure, we can award the applicable portion of the bonus only if
performance reaches the minimum, or threshold, level for that measure. While
performance for 1999 varied among USX's business units, performance levels
were reached or exceeded for the following:
<TABLE>
- --------------------------------------------------------------------------------
<S> <C>
For Marathon Group Income from operations, liquid hydrocarbon production,
natural gas production, liquid hydrocarbon and natural
gas reserve additions, refined product sales, refined
product margins, worker safety and environmental
emissions improvements
- --------------------------------------------------------------------------------
For U. S. Steel Group Income from operations, steel shipments, worker safety
and stock price performance
- --------------------------------------------------------------------------------
For USX (Corporate) All the above plus workforce diversity
- --------------------------------------------------------------------------------
</TABLE>
Our Committee certified in writing prior to payment of awards for the year
1999 that the pre-established, applicable performance levels (measured for
incentive compensation purposes) required under the Plan were satisfied.
OTHER PLANS
We also administer other bonus plans in which corporate and business unit
executive officers participate. These plans were developed specifically for
corporate, U. S. Steel Group and Marathon Group employees. Our Committee
makes awards based on the degree of achievement of pre-established
objectives, such as income, cash flow and return on capital employed, as
measured for incentive compensation purposes, as well as individual
objectives. In determining awards under these plans, we also give
consideration to changes over the previous year's performance as well as the
absolute levels of income and cash flow. When making awards to executive
officers under these Plans, our Committee gives such weight to the various
factors as we deem appropriate.
Based on consideration of other factors, our Committee may reduce or
eliminate a short-term incentive award that would otherwise be payable under
the above-discussed plans.
26
<PAGE>
LONG-TERM INCENTIVE AWARDS
We consider long-term incentive awards to be of major importance in the mix
of compensation elements because these awards provide the most direct link to
the returns that you, as USX stockholders, receive. The stockholders approved
the 1990 Stock Plan, as amended and restated, on April 28, 1998. We
administer this plan, under which we may grant (1) stock options, with or
without a restoration feature, (2) stock appreciation rights and/or (3)
restricted stock. Our stock options and restricted stock meet the
requirements for deductibility under the tax laws.
STOCK OPTION GRANTS
Our Committee makes stock option grants that we believe to be reasonable and
in line with other compensation. The number of shares we grant generally
reflects the employee's level of responsibility, and the class or classes of
stock granted reflect the specific business unit(s) to which the employee's
responsibilities relate. Following our normal annual grant practice, we
granted stock options in May 1999.
RESTRICTED STOCK GRANTS
Since the inception of the 1990 Stock Plan, our Committee has established,
for each recipient, an annual target level of restricted stock shares, based
on the same factors as we consider in granting stock options. A major grant
is made to cover five years, with the intention that one fifth of the shares
will vest each year if performance is at the target level. We vest restricted
stock at levels higher or lower than annual targets, depending on
performance.
We made our last major grant in 1995, to cover the five-year performance
period ending with 1999, and we made interim grants only to permit vesting at
the target level for the number of years remaining in the period. To
emphasize the long-term nature of the awards, our vesting decisions are based
on three-year average performance, which is compared with three-year
peer-group performance for relevant businesses.
Vesting of restricted stock shares is based on pre-established performance
measures specifically related to the responsibilities of Plan participants.
We can vest a portion of the annual target shares only if performance reaches
the minimum, or threshold, level established for that period.
In May 1999, we compared our three-year (1996-1998) average performance with
that of competitors for the measures shown below. This comparison provides
the primary basis for the determination of vesting levels for restricted
stock. However, vesting levels may be reduced (or eliminated entirely) based
on other factors considered relevant by the Committee.
27
<PAGE>
<TABLE>
<CAPTION>
UNIT PERFORMANCE MEASURE
- -------------------------------------------------------------------------------
<S> <C>
Marathon Group Earnings before interest, taxes and depreciation
as a percent of total assets
Oil and gas reserve replacement ratio
Income per barrel of oil equivalent produced
(upstream)
Operating income per barrel of refinery throughput
(downstream)
Safety performance
- -------------------------------------------------------------------------------
U. S. Steel Group Income from operations as a percent of capital employed
Income from operations per ton shipped
Operating cash flow as a percent of capital employed
Safety performance
- -------------------------------------------------------------------------------
USX Headquarters Weighted Composite
(65% Marathon Group/35% U. S. Steel Group)
- -------------------------------------------------------------------------------
</TABLE>
Our Committee certified in writing prior to vesting of restricted stock
shares in the year 1999 that the pre-established applicable performance
levels required under the Plan were satisfied.
The Committee periodically compares data on long-term incentive grants made
at other companies with those made at USX. Our objective in making grants
under the 1990 Stock Plan is to provide opportunities to receive
above-average compensation (compared with that of similar companies) when
performance is above the target level.
Overall, executive compensation at USX is designed to provide total pay that
is above average when both short- and long-term incentive goals are exceeded.
--------------------
In addition to the compensation comparisons described above, our Committee
annually compares the salary, bonus and long-term incentive payouts for the
Chairman, the Chief Financial Officer, and the Presidents of the U. S. Steel
and Marathon Groups with the same elements for similar positions at
comparable companies.
With respect to the compensation comparisons that we make, we believe that
the companies with which USX competes for employees are not necessarily
limited to the companies with which shareholder returns would logically be
compared. The peer groups used in the performance graphs include the Standard
& Poor's 500 Stock Index and those oil and steel companies deemed most
comparable to the Corporation's businesses for measuring stock performance.
The companies used for comparing compensation reflect similarities to USX and
its operating groups in such factors as line of business (when relevant),
size and complexity. Therefore, the compositions of the groups of companies
used for compensation comparisons are not identical to those of the peer
groups shown in the Shareholder Return Performance Presentation.
Mr. Usher's 1999 compensation reflects the same elements and the same factors
as those described above. His leadership and effectiveness in dealing with
major corporate problems and opportunities are also considered in determining
his salary increases. Taking into account these factors, as well as (1) the
comparability of his salary with CEOs of other companies of similar size and
complexity and (2) the position of his salary in the range for his position,
the Committee approved a salary increase for Mr. Usher effective August 1,
1999.
28
<PAGE>
The Committee made an award to Mr. Usher for 1999 under the
Senior Executive Officer Annual Incentive Compensation Plan
taking into consideration the overall performance of the
Corporation and its business units, specifically the
performance measures listed in the previous table. The
Committee also considered Mr. Usher's contributions to
improving the Corporation's business portfolio through key
acquisitions and dispositions, ongoing cost reduction
efforts, including voluntary early retirement programs, the
timely renegotiation of a competitive labor agreement with
the United Steelworkers of America and strong environmental
and safety performances at both business units versus their
peer groups.
The Committee considered the additional stock option shares
granted to Mr. Usher under the 1990 Stock Plan to be at a
competitive level relative to other CEOs. On the basis of
the performance shown in the above table, we also vested
restricted stock for and made an additional grant of
restricted stock to Mr. Usher.
Seth E. Schofield
Neil A. Armstrong
Charles R. Lee
John W. Snow
Douglas C. Yearley
- -------------------------------------------------------------------------------
SECTION 16(a) We are required to identify any officer or director who
BENEFICIAL failed to file on a timely basis with the Securities and
OWNERSHIP Exchange Commission a required report relating to ownership
REPORTING and change in ownership of USX's equity securities. Three
COMPLIANCE individuals were late in filing one form each. John T. Mills
was late in filing his Form 5 for 1998 relating to two
transactions. Jeanette G. Brown was late in filing her Form
5 for 1998 in connection with two transactions resulting
from the automatic conversion of accrued vested benefits
into Common Stock Units. J. Gary Cooper was late in filing a
Form 4 relating to two transactions.
29
<PAGE>
SHAREHOLDER RETURN PERFORMANCE PRESENTATION
The line graphs below compare the yearly change in cumulative total
stockholder return for each class of our common stock with the cumulative
total return of the Standard & Poor's 500 Stock Index. The Marathon graph
also shows a comparison with the Standard & Poor's Domestic Integrated Oil
Index, and the U.S. Steel graph also shows a comparison with a Steel Index
that is defined in a footnote to the graph.
COMPARISON OF CUMULATIVE TOTAL RETURN
ON $100 INVESTED IN MARATHON STOCK ON DECEMBER 31, 1994
VS.
S&P 500 AND S&P DOMESTIC INTEGRATED OIL INDEX(1)
[GRAPH]
<TABLE>
MARATHON
STOCK S&P 500 S&P OIL INDEX
<S> <C> <C> <C>
12/31/94 100 100 100
12/31/95 123 138 114
12/31/96 156 169 144
12/31/97 226 226 171
12/31/98 207 290 139
12/31/99 175 351 173
</TABLE>
USX-Marathon Group Common Stock
S&P 500 Index
S&P Domestic Integrated Oil Index
(1) Total return assumes reinvestment of dividends.
30
<PAGE>
COMPARISON OF CUMULATIVE TOTAL RETURN
ON $100 INVESTED IN STEEL STOCK ON DECEMBER 31, 1994
VS.
S&P 500 AND STEEL INDEX(1)
[GRAPH]
<TABLE>
STEEL STOCK S&P 500 STEEL INDEX
<S> <C> <C> <C>
12/31/94 100 100 100
12/31/95 89 138 83
12/31/96 94 169 69
12/31/97 97 226 63
12/31/98 74 290 60
12/31/99 110 351 53
</TABLE>
USX-U. S. Steel Group Common Stock
S&P 500 Index
Steel Index(2)
(1) Total return assumes reinvestment of dividends.
(2) The Steel Index consists of the common stocks of AK Steel
Corporation, Bethlehem Steel Corporation, LTV Corporation
and National Steel Corporation for the period December 31,
1994 through December 31, 1999, and Inland Steel Industries
for the period December 31, 1994 through December 31, 1997.
Inland Steel Industries sold its steelmaking subsidiary,
Inland Steel Co., to Ispat International NV in 1998. The
resulting company, Ispat Inland Inc., is not publicly
traded.
TRANSACTIONS In the regular course of its business since January 1,
1999, USX and its subsidiaries have had transactions
with entities with which certain directors were
affiliated. Such transactions were in the ordinary
course of business and at competitive prices and terms.
We do not consider any such director to have a material
interest in any such transaction. We anticipate that
similar transactions will occur in 2000.
31
<PAGE>
PENSION BENEFITS
The United States Steel Corporation Plan for Non-Union Employee Pension
Benefits is comprised of two defined benefits. One is based on final earnings
and the other on career earnings. Directors who have not been employees of
USX do not receive any benefits under the plan. The following table shows the
annual final earnings pension benefits for retirement at age 65 (or earlier
under certain circumstances) for various levels of eligible earnings which
would be payable to employees retiring with the years of service shown. The
benefits are based on a formula of a specified percentage (dependent on years
of service) of average annual eligible earnings in the five consecutive years
of the ten years prior to retirement in which such earnings were highest. As
of January 31, 2000, Mr. Usher had 34 credited years of service, Mr. Wilhelm
35, Mr. Hernandez 31, Mr. Sandman 7 and Mr. Gedeon 13. If Mr. Gedeon retires
with at least 16 credited years of service, USX will pay him an amount
equivalent to a final earnings and a supplemental pension calculated as
though he had an additional 14 years of service.
TABLE OF PENSION BENEFITS
FINAL EARNINGS PENSION BENEFITS
<TABLE>
<CAPTION>
Average Annual
Eligible Earnings
for Highest Five
Consecutive Years
in Ten-Year Period ANNUAL BENEFITS FOR YEARS OF SERVICE
Preceding Retirement
15 Years 20 Years 25 Years 30 Years 35 Years 40 Years 45 Years
- ------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C>
$ 100,000 $ 17,325 $ 23,100 $ 28,875 $ 34,650 $ 40,950 $ 47,250 $ 53,550
300,000 51,975 69,300 86,625 103,950 122,850 141,750 160,650
500,000 86,625 115,500 144,375 173,250 204,750 236,250 267,750
700,000 121,275 161,700 202,125 242,550 286,650 330,750 374,850
900,000 155,925 207,900 259,875 311,850 368,550 425,250 481,950
1,100,000 190,575 254,100 317,625 381,150 450,450 519,750 589,050
1,300,000 225,225 300,300 375,375 450,450 532,350 614,250 696,150
</TABLE>
Annual career earnings pension benefits are equal to one percent of total
career eligible earnings plus a 30 percent supplement. The estimated annual
career earnings benefits payable at normal retirement age 65, assuming no
increase in annual earnings, will be $246,725 for Mr. Usher, $107,163 for Mr.
Wilhelm, $155,587 for Mr. Hernandez, $104,289 for Mr. Sandman and $68,370 for
Mr. Gedeon. Earnings for the purpose of calculating both the final earnings
and career earnings pensions are limited to base salary for services
performed, allowance for absence covered by sick leave salary continuance and
payment for absence while on regular vacation or holidays. These earnings are
reported in the salary column of the Summary Compensation Table on page 20.
They do not include any awards under the Annual Incentive Compensation Plan
or the Senior Executive Officer Annual Incentive Compensation Plan. Benefits
under both pension provisions are based on a straight life annuity form of
benefit, which is not subject to reduction for Social Security benefits; but
the final earnings pension is subject to offset for a pension provided
outside the plan from a fund to which USX has contributed, and for payments
made by USX pursuant to workers' compensation or similar laws when such
payments are the result of a permanent disability. Benefits may be paid as an
actuarially determined lump sum in lieu of monthly pensions under both the
final earnings and career earnings provisions of the plan.
In addition to the pension benefit described above, members of USX executive
management, including all of the executive officers named in the Summary
Compensation Table except Mr. Beghini and Mr. Giardini, are entitled, upon
retirement after age 60, or before age 60 with USX's consent, to the benefits
shown in the table below based on bonuses paid under the Annual Incentive
Compensation Plan and the Senior Executive Officer Annual Incentive
Compensation Plan. These bonuses are reported in the bonus column of the
Summary Compensation Table on page 20.
32
<PAGE>
SUPPLEMENTAL PENSION BENEFITS
<TABLE>
<CAPTION>
Average Annual
Bonus for Three
Highest Years
in Ten-Year Period
Preceding ANNUAL BENEFITS FOR YEARS OF SERVICE
Retirement
15 Years 20 Years 25 Years 30 Years 35 Years 40 Years 45 Years
- ----------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C>
$ 100,000 $ 23,100 $ 30,800 $ 38,500 $ 46,200 $ 53,900 $ 61,600 $ 69,300
300,000 69,300 92,400 115,500 138,600 161,700 184,800 207,900
500,000 115,500 154,000 192,500 231,000 269,500 308,000 346,500
700,000 161,700 215,600 269,500 323,400 377,300 431,200 485,100
900,000 207,900 277,200 346,500 415,800 485,100 554,400 623,700
1,100,000 254,100 338,800 423,500 508,200 592,900 677,600 762,300
1,300,000 300,000 400,400 500,500 600,600 700,700 800,800 900,900
1,500,000 346,500 462,200 577,500 693,000 808,500 924,000 1,039,500
- ----------------------------------------------------------------------------------
</TABLE>
Marathon Oil Company provides retirement benefits based on final earnings.
The following table shows the annual pension benefits for retirement at age
65 for various levels of eligible earnings which would be payable to
employees retiring with the years of service shown. The table is based on a
formula of a specified percentage (dependent on years of participation in the
Marathon Oil Company Retirement Plan) of average annual eligible earnings in
the three consecutive years of the ten prior to retirement in which such
earnings were highest.
<TABLE>
<CAPTION>
Final Average
Earnings for Highest
Three Consecutive
Years in Ten-Year
Period Preceding Annual Benefits for Years of Service
Retirement
20 Years 25 Years 30 Years 35 Years 40 Years(1) 45 Years(1)
- -------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
$ 100,000 $ 27,414 $ 34,268 $ 41,122 $ 47,975 $ 51,402 $ 51,402
300,000 91,414 114,268 137,122 159,975 171,402 171,402
500,000 155,414 194,268 233,122 271,975 291,402 291,402
700,000 219,414 274,268 329,122 383,975 411,402 411,402
900,000 283,414 354,268 425,122 495,975 531,402 531,402
1,100,000 347,414 434,268 521,122 607,975 651,402 651,402
1,300,000 411,414 514,268 617,122 719,975 771,402 771,402
1,500,000 475,414 594,268 713,122 831,975 891,402 891,402
2,000,000 635,414 794,268 953,122 1,111,975 1,191,402 1,191,402
- -------------------------------------------------------------------------------
</TABLE>
(1) Benefits reach their maximum at 37-1/2 years of participation.
Covered earnings include pay for hours worked, pay for allowed hours,
military leave allowance, commissions, 401(k) contributions to the Marathon
Oil Company Thrift Plan and bonuses. These earnings are reported in the
salary and bonus columns of the Summary Compensation Table on page 20. The
benefits reflected above are based upon a straight life annuity form of
benefit and include the applicable Social Security offset as defined by the
Marathon plan. Mr. Beghini and Mr. Giardini retired on October 31, 1999 with
41 years and 42 years of credited participation, respectively. Mr. Sandman
has 20 years of credited participation.
In order to comply with the limitations prescribed by the Internal Revenue
Code, pension benefits will be paid directly by USX or by Marathon when they
exceed the amounts permitted by the Code to be paid from federal income tax
qualified pension plans.
33
<PAGE>
CHANGE IN CONTROL ARRANGEMENTS
We believe that if a change in control of USX became possible our key
officers should be encouraged to continue their dedication to their assigned
duties. For that reason, we have entered into agreements with each of the
current officers named in the Summary Compensation Table that provide that,
if an officer's employment is terminated under certain circumstances
following a change in control, the officer will be entitled to the following
severance benefits:
- - a cash payment of up to three times the sum of the officer's current salary
plus the highest bonus in the three years before the date of termination,
- - a cash payment in settlement of outstanding options,
- - life, disability, accident and health insurance benefits for 24 months after
termination,
- - a cash payment equal to the actuarial equivalent of the difference between
amounts receivable by the officer under our pension and welfare benefit plans
and those which would be payable if (a) the officer had retired as of the
termination date under conditions entitling a retiree under similar
circumstances to the highest benefits available under those plans and
(b) the officer had been absent due to layoff for a year before termination,
- - a cash payment equal to the difference between amounts receivable under our
savings or thrift plans and amounts which would have been received if the
officer's savings had been fully vested, and
- - a cash payment of the amount necessary to ensure that the payments listed
above are not subject to net reduction due to the imposition of federal
excise taxes.
Each agreement is automatically extended each year unless we notify the
officer that we do not wish it extended. In any event, however, each
agreement continues for two years after a change in control. The severance
benefits are payable if, any time after a change in control, the officer's
employment is terminated for good reason or is terminated for other than
cause or disability. The severance benefits are not payable if termination is
due to the officer's death or disability or occurs after the officer reaches
age 65.
The definition of a change in control for purposes of these agreements is
complex but is summarized as follows. It includes any change in control
required to be reported in response to Item 6 (e) of Schedule 14A under the
Securities Exchange Act of 1934 and provides that a change in control will
have occurred if:
- - any person not affiliated with USX acquires 20 percent or more of the voting
power of our outstanding securities,
- - the board no longer has a majority made up of (1) individuals who were
directors on the date of the agreements and (2) new directors (other than
directors who join the board in connection with an election contest) approved
by two-thirds of the directors then in office who (a) were directors on the
date of the agreements or (b) were themselves previously approved by the
board in this manner,
- - USX merges with another company and USX's stockholders end up with less
than 50 percent of the voting power of the new entity,
- - our stockholders approve a plan of complete liquidation of USX, or
- - we sell all or substantially all of USX's assets.
34
<PAGE>
SOLICITATION STATEMENT
We will bear the cost of this solicitation of proxies. In addition to
soliciting proxies by mail, our directors, officers and employees may solicit
proxies by telephone, in person or by other means. They will not receive any
extra compensation for this work. We will also make arrangements with
brokerage firms and other custodians, nominees and fiduciaries to forward
proxy solicitation material to the beneficial owners of each class of common
stock, and we will reimburse them for reasonable out-of-pocket expenses that
they incur in connection with forwarding the material.
By order of the Board of Directors,
Dan D. Sandman,
Secretary
March 13, 2000
35
<PAGE>
USX Corporation
600 Grant Street
Pittsburgh, PA 15219-4776
[LOGO]
<PAGE>
USX ATTENDANCE CARD
CORPORATION 2000 ANNUAL MEETING OF STOCKHOLDERS
You are cordially invited to attend the Annual Meeting of Stockholders on
April 25, 2000.
The Meeting will be held in the Wynfrey Ballroom at the Wynfrey Hotel at
Riverchase Galleria, 1000 Riverchase Galleria, Birmingham, Alabama, 35244 at
10:00 A.M. Central Daylight Time.
Attached is your 2000 Proxy Card. The use of an attendance card is for our
mutual convenience and your right to attend without an attendance card, upon
identification, is not affected.
Dan D. Sandman
SECRETARY
FOR THE PERSONAL USE OF THE NAMED STOCKHOLDER(S) - NOT TRANSFERABLE. PLEASE
PRESENT THIS CARD AT REGISTRATION DESK UPON ARRIVAL.
YOU MAY VOTE BY TOLL-FREE TELEPHONE CALL OR ON THE INTERNET OR BY COMPLETING
THE ATTACHED PROXY CARD AND RETURNING IT IN THE ACCOMPANYING ENVELOPE
TO VOTE BY TELEPHONE OR INTERNET USE THE CONTROL NUMBER IN THE BOX BELOW
YOUR CONTROL NUMBER
BY TELEPHONE BY INTERNET
-----------------------
TOLL-FREE 1-888-216-1303 www.directvote.com
HAVE YOUR CONTROL NUMBER AVAILABLE WHEN YOU CALL OR VISIT THE INTERNET SITE
AND FOLLOW THE PROMPTS.
VOTING IS AVAILABLE 24 HOURS A DAY, 7 DAYS A WEEK.
DO NOT RETURN THE PROXY CARD IF YOU HAVE VOTED BY TELEPHONE OR INTERNET.
- -----------------------------------------------------------------------------
The undersigned hereby appoint(s) Thomas J. Usher, Robert M. Hernandez and
Paul J. Wilhelm, or any of them, proxies to vote as herein stated on behalf
of the undersigned at the Annual Meeting of Stockholders of USX Corporation
on April 25, 2000 and any adjournment or postponement thereof and upon all
other matters properly coming before the Meeting, including the proposals set
forth in the proxy statement for such Meeting with respect to which the
proxies are instructed to vote as follows:
Proposals of the Board of Directors--The directors recommend a vote "FOR"
Proposal No. 1--Election of directors--Nominees: (01)Neil R. Armstrong,
(02)Robert M. Hernandez, (03)John F. McGillicuddy, (04)John W. Snow and
(05)Clarence P. Cazalot, Jr.
FOR all nominees WITHHOLD AUTHORITY
(except as indicated) ---- to vote for ALL nominees ----
(TO WITHHOLD AUTHORITY TO VOTE FOR ANY INDIVIDUAL NOMINEE STRIKE OUT
THAT NOMINEE'S NAME.)
Proposal No. 2--Election of PricewaterhouseCoopers LLP as independent
accountants FOR AGAINST ABSTAIN
----- ----- -----
- -----------------------------------------------------------------------------
Signature(s)
-------------------------------------------------
- -------------------------------------------------------------
Dated 2000
-----------
Please sign exactly as your name appears hereon, including representative
capacity where applicable. Joint owners should both sign.
I Will Attend The Annual Meeting
- ----
THIS PROXY IS SOLICITED BY THE BOARD OF DIRECTORS AND REPRESENTS YOUR
HOLDINGS OF USX-MARATHON GROUP COMMON STOCK AND/OR USX-U.S. STEEL GROUP
COMMON STOCK. UNLESS OTHERWISE MARKED, PROXIES ARE TO VOTE FOR PROPOSALS 1
AND 2, AND IN THEIR DISCRETION UPON ALL OTHER MATTERS PROPERLY BROUGHT BEFORE
THE MEETING AND ANY ADJOURNMENT OR POSTPONEMENT THEREOF.
