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AS FILED WITH THE SECURITIES AND EXCHANGE COMMISSION ON JUNE 15, 1998OCTOBER 12, 1999
REGISTRATION NO. ================================================================================333-
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SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
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FORM S-3
REGISTRATION STATEMENT
UNDER THE SECURITIES ACT OF 1933
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USX CORPORATION
(EXACT NAME OF REGISTRANT AS SPECIFIED IN ITS CHARTER)
DELAWARE 25-0996816
(STATE OR OTHER JURISDICTION OF INCORPORATION OR (I.R.S. EMPLOYER IDENTIFICATION NO.)
ORGANIZATION)
600 GRANT STREET, PITTSBURGH, PENNSYLVANIA 15219-4776 (412) 433-1121
(ADDRESS, INCLUDING ZIP CODE, AND TELEPHONE NUMBER, INCLUDING AREA CODE, OF
REGISTRANT'S PRINCIPAL EXECUTIVE OFFICES)
DAN D. SANDMAN, ESQ.
GENERAL COUNSEL, SECRETARY AND SENIOR VICE PRESIDENT -- HUMANPRESIDENT--HUMAN RESOURCES & PUBLIC
AFFAIRS
600 GRANT STREET
PITTSBURGH, PENNSYLVANIA 15219-4776
(412) 433-1121
(NAME, ADDRESS, INCLUDING ZIP CODE, AND TELEPHONE NUMBER, INCLUDING AREA CODE,
OF AGENT FOR SERVICE)
APPROXIMATE DATE OF COMMENCEMENT OF PROPOSED SALE TO PUBLIC: After the
effective date of this registration statement and as determined by market
conditions.
If only securities being registered on this Form are being offered pursuant
to dividend or interest reinvestment plans, please check the following box. [ ]
If any of the securities being registered on this Form are to be offered on
a delayed or continuous basis pursuant to Rule 415 under the Securities Act of
1933, other than securities offered only in connection with dividend or interest
reinvestment plans, please check the following box. [X]
If this Form is filed to register additional securities for an offering
pursuant to Rule 462(b) under the Securities Act, please check the following box
and list the Securities Act registration statement number of the earlier
effective registration statement for the same offering. [ ]
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If this Form is a post-effective amendment filed pursuant to Rule 462(c)
under the Securities Act, check the following box and list the Securities Act
registration statement number of the earlier effective registration statement
for the same offering. [ ]
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If delivery of the prospectus is expected to be made pursuant to Rule 434,
please check the following box. [ ]
CALCULATION OF REGISTRATION FEE
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AMOUNT PROPOSED MAXIMUM PROPOSED MAXIMUM AMOUNT OF
TITLE OF EACH CLASS OF TO BE OFFERING PRICE AGGREGATE REGISTRATION
SECURITIES TO BE REGISTERED REGISTERED(1) PER UNIT OFFERING PRICE(2) FEE
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USX Corporation Debt Securities............Securities.........
USX Corporation Preferred Stock............Stock.........
USX-Marathon Group Common Stock of USX
Corporation..............................
USX-U.S.Corporation...........................
USX-U. S. Steel Group Common Stock of
USX Corporation..............................Corporation....................... $1,000,000,000 $1,000,000,000 $295,000$278,000
Warrants to Purchase USX Corporation
Debt Securities, Preferred Stock,
USX-Marathon Group Common Stock or
USX-U.S.USX-U. S. Steel Group Common Stock.......................
=================================================================================================================================Stock....
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(1) The amount to be registered consists of up to $1,000,000,000 market value
of Debt Securities, each of the classes of equity securities and warrants
individually, but not more than such amount for all registered securities
in the aggregate. The Debt Securities and Preferred Stock may include
provisions to convert such securities into USX Common Stock. This
registration statement will also relate to the common stock into which such
securities are convertible and any securities issuable upon exercise of any
Warrants. Foreign currency denominated securities are included on a U.S.
dollar basis. For Debt Securities issued with an original issue discount,
the amount to be registered is calculated as the initial accreted value of
such Debt Securities.
(2) Estimated solely for the purpose of calculating the registration fee in
accordance with Rule 457 under the Securities Act of 1933. Excludes $232,788,050
unsold Debt Securities included in a Registration Statement, Number 33-52937,
for which a registration fee was paid in connection with the filing thereof.
Also, excludes an
aggregate of $309,781,250$685,719,300 unsold Debt Securities and equity securities
included in Registration Statements, Numbers 33-50191 and 33-51621
($137,281,250 and $172,500,000, respectively),Statement, Number 333-56867, for which a
registration fees werefee was paid in connection with the filing thereof. The above
excluded securities are covered by the Prospectus included in this
Registration Statement pursuant to Rule 429. As a result, up to an
aggregate of $1,542,569,300$1,685,719,300 of all of the securities referred to in this
table may be sold pursuant to the Prospectus included in this Registration
Statement. The amount of the filing fee associated with the above excluded
securities previously paid with the above mentioned registration statementsstatement
is $182,655.20 ($80,271.99, $42,900.34 and $59,482.87,
respectively).$202,287.
THE REGISTRANT HEREBY AMENDS THIS REGISTRATION STATEMENT ON SUCH DATE OR
DATES AS MAY BE NECESSARY TO DELAY ITS EFFECTIVE DATE UNTIL THE REGISTRANT SHALL
FILE A FURTHER AMENDMENT WHICH SPECIFICALLY STATES THAT THIS REGISTRATION
STATEMENT SHALL THEREAFTER BECOME EFFECTIVE IN ACCORDANCE WITH SECTION 8(a) OF
THE SECURITIES ACT OF 1933 OR UNTIL THIS REGISTRATION STATEMENT SHALL BECOME
EFFECTIVE ON SUCH DATE AS THE COMMISSION, ACTING PURSUANT TO SAID SECTION 8(a),
MAY DETERMINE.
PURSUANT TO RULE 429 UNDER THE SECURITIES ACT OF 1933, THE PROSPECTUS
INCLUDED IN THIS REGISTRATION STATEMENT WILL ALSO BE USED FOR PURPOSES OF
SECTION 10(a)(3) OF THE ACT IN CONNECTION WITH SECURITIES REGISTERED ON FORM
S-3, REGISTRATION NUMBERS 33-50191, 33-51621 AND 33-52937.
================================================================================NUMBER 333-56867.
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PROSPECTUS
USX CorporationLOGO
USX CORPORATION
600 Grant Street
Pittsburgh, PA 15219-4776
(412) 433-1121
$1,685,719,300
Debt Securities
Preferred Stock
USX-Marathon Group Common Stock
USX-U.S.USX-U. S. Steel Group Common Stock
Warrants
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USX Corporation ("USX") proposes- --------------------------------------------------------------------------------
We will provide specific terms of these securities in supplements to issuethis
prospectus.
You should read this prospectus and offer from timeany supplement carefully before you invest.
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These securities have not been approved by the SEC or any state securities
commission, nor have these organizations determined that this prospectus is
accurate or complete.
Any representation to time (1)
unsecured debt securitiesthe contrary is a criminal offense.
This prospectus is dated October , 1999.
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ABOUT THIS PROSPECTUS
This prospectus is part of USX (the "Debt Securities"); (2) USX Corporation
Preferred Stock ("Preferred Stock"); (3) USX-Marathon Group Common Stock of USX
Corporation ("Marathon Stock"); (4) USX-U.S. Steel Group Common Stock of USX
Corporation ("Steel Stock"); (5) Warrants to purchase Debt Securities, Preferred
Stock, Marathon Stock or Steel Stock (the "Warrants"), or a registration statement that we filed with the
SEC utilizing a "shelf" registration process. Under this shelf process, we may
sell any combination of the foregoing at an aggregate public offering price not exceeding $1,542,569,300 (or
the equivalent thereofsecurities described in foreign denominated currency (or units based onthis prospectus in one or
related thereto) in the case of Debt Securities), at prices and on terms to be
determined at or priormore offerings up to the total dollar amount shown on the cover page. This
prospectus provides you with a general description of the securities we may
offer. Each time we sell securities, we will provide a prospectus supplement
that will contain specific information about the terms of that offering. The
prospectus supplement may also add, update or timeschange information contained in
this prospectus. You should read both this prospectus and any prospectus
supplement together with additional information described below under the
heading "WHERE YOU CAN FIND MORE INFORMATION".
This prospectus and the prospectus supplement will not discuss all of sale. The Marathon Stock and
Steel Stock are together referred to as "Common Stock."
Specificthe
details of the securities offered. To see more details concerning the terms of
the securities, in respect to whichyou should read the exhibits filed with this Prospectus is
being delivered ("Offered Securities") shall be set forth in an accompanying
Prospectus Supplement, together with the terms of the offering of the Offered
Securities, the initial price thereof and net proceeds from the sale thereof.
All such Prospectus Supplement(s) shall also set forth with regard to the
particular Offered Securities, without limitation, the following: (1) in the
case of Debt Securities, the designation of each separate series and the
aggregate principal amount, maturity, interest rate, if any, whether fixed or
variable (or the manner of calculation thereof), redemption and sinking fund
provisions or other repayment obligations, currency in which denominated,
amounts determined by reference to an index, purchase price and any listing on a
securities exchange, (2) in the case of Preferred Stock, the designation, number
of shares offered, liquidation preference per share, dividend rate, dates on
which dividends are to be payable and dates from which dividends accrue, any
redemption or sinking fund provisions, any conversion features, and any listing
on a securities exchange, (3) in the case of Marathon Stock or Steel Stock, the
number of shares offered, the number of shares to be outstanding after the
offering, the price range and dividend history of the relevant stock and any
listing on a securities exchange, and (4) in the case of Warrants, the number
and terms thereof, the designation and the number of securities issuable upon
their exercise, the exercise price, the exercise time period, the terms of the
offering and sale thereof and any listing on a securities exchange.
USX may sell the Offered Securities to or through underwriters or directly
to other purchasers or through agents or through and to brokers or dealers
acting as underwriters who will be named in the accompanying Prospectus
Supplement(s) along with terms of the public offering, including the offering
price, the principal amounts, if any, to be purchased by underwriters, the
commission or discount to the underwriters and the amount of other expenses
attributable to the issuance and distribution of the Offered Securities.
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THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES AND
EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION NOR HAS THE
SECURITIES AND EXCHANGE COMMISSION OR ANY STATE SECURITIES
COMMISSION PASSED UPON THE ACCURACY OR ADEQUACY OF THIS
PROSPECTUS. ANY REPRESENTATION TO THE CONTRARY IS A
CRIMINAL OFFENSE.
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The date of this Prospectus is June , 1998.
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AVAILABLEregistration
statement.
WHERE YOU CAN FIND MORE INFORMATION
USX Corporation ("USX") is subject to the informational requirements of the
Securities Exchange Act of 1934, as amended (the "Exchange Act"), and, in
accordance therewith, filesWe file annual, quarterly, current reports, proxy statements and other
information with the Securities and Exchange Commission (the "Commission"). Such reports, proxy
statements and other information filed by USX can be inspected and copied at
prescribed ratesSEC. Our SEC filings are available to the public over the
Internet at the Public Reference Room of the CommissionSEC's web site at 450 Fifth
Street, N.W., Room 1024, Washington, D.C. 20549,http://www.sec.gov. You may also read and copy
any document we file at the SEC's public reference facilities maintained by the Commission at 7 World Trade Center, Suite 1300,rooms in Washington, D.C.,
New York, New York 10048, and 500 West Madison Street, Suite 1400, Chicago, Illinois
60661. Documents filedIllinois. You may call the SEC at 1-800-SEC-0330
for further information on their public reference rooms.
The SEC allows us to "incorporate by USX can also be inspected atreference" in this prospectus the
officesinformation in the documents we file with them. Important information concerning
our business and financial results is included in those documents. The
information incorporated by reference is an important part of this prospectus,
and information that we file later with the SEC will automatically update and
supersede information previously filed.
We incorporate by reference the documents listed below and any future
filings made with the SEC under Sections 13(a), 13(c), 14, or 15(d) of the
New
York StockSecurities Exchange Inc. (the "NYSE"), The Chicago Stock Exchange and the
Pacific Stock Exchange. The Commission maintains a web site at
http://www.sec.gov containing reports, proxy and information statements and
other information regarding registrants that file electronically with the
Commission, including USX.
USX has filed a Registration Statement on Form S-3 (the "Registration
Statement") with the Commission pursuant to the Securities Act of 1933, as
amended (the "Securities Act"), with respect to1934 until we sell all of the Offered Securities. This
Prospectus does not contain all the information set forth in the Registration
Statement and the exhibits thereto, to which reference is hereby made.
Statements contained herein concerning the provisions of certain documents are
not necessarily complete, and in each instance reference is made to the copy of
such document filed as an exhibit to the Registration Statement or otherwise
filed with the Commission. Each such statement is qualified in its entiretysecurities covered by
such reference.
INCORPORATION OF CERTAIN DOCUMENTS BY REFERENCE
The following documents heretofore filed by USX with the Commission (file
no. 1-5153) are incorporated herein by reference:
(a)this prospectus.
-- Annual Report on Form 10-K for the year ended December 31, 1997.
(b)1998.
-- Quarterly ReportReports on Form 10-Q for the quarterquarters ended March 31, 1998.
(c)and June
30, 1999.
-- Current Reports on Form 8-K dated January 1, February22, January 26, January 27, March 5
and
May 29, 1998.
(d)September 28, 1999 and on Form 8-K/A dated January 22, 1999.
-- The description of the MarathonUSX-Marathon Group Common Stock included in USX's
Form 8 Amendment to a Registration Statement on Form 8-B filed on April 11, 1991.
(e)-- The description of the USX-U. S. Steel Group Common Stock included in
USX's Form 8-A Registration Statement filed on April 11, 1991.
(f)-- The Amended and Restated Rights PlanAgreement included in USX's Form 8
Amendment to Form 8-A Registration Statement filed on October 5, 1992.
All reports and other documents filed by USX pursuant to Section 13(a),
13(c), 14 or 15(d) of the Exchange Act subsequent to the date of this Prospectus
and prior to the termination of the offering of the Offered Securities shall be
deemed to be incorporated by reference herein. Any statement contained in a
document incorporated or deemed to be incorporated by reference herein shall be
deemed to be modified or superseded for purposes of this Prospectus to the
extent that a statement contained herein or in any other subsequently filed
document which also is incorporated or deemed to be incorporated by reference
herein modifies or supersedes such statement. Any such statement so modified or
superseded shall not be deemed, except as so modified or superseded, to
constitute a part of this Prospectus.
USX undertakes to provide without charge to each person to whom a
Prospectus is delivered, on the written or oralSeptember 28,
1999.
You may request of such person, a copy of anythese filings at no cost, by writing or
all oftelephoning us at the information incorporated by reference in this Prospectus,
other than exhibits to such information (unless such exhibits are specifically
incorporated by reference into the information that this Prospectus
incorporates). Requests for such copies should be directed to the Office of thefollowing address:
Corporate Secretary
USX Corporation
600 Grant Street
Pittsburgh, Pennsylvania 15219-4776
(telephone: 412-433-4801).(412) 433-4801
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You should rely only on the information incorporated by reference or
provided in this prospectus or any prospectus supplement. We have not authorized
anyone else to provide you with different information. We are not making an
offer of these securities in any state where the offer is not permitted. You
should not assume that the information in this prospectus or any prospectus
supplement is accurate as of any date other than the date on the front of those
documents.
THE COMPANY
USX CORPORATION
USX is a diversified company whichCorporation, is principally engaged in the energy business through its
Marathon Group and in the steel business through its U.S.U. S. Steel Group. The term "USX" when used herein refers to USX Corporation or USX
Corporation and its subsidiaries, as required by the context. The term "Group"
when used herein refers to the Marathon Group and/or the U.S. Steel Group, as
required by the context.
USXIt has
two classes of common stock, USX--MarathonUSX-Marathon Group Common Stock ("Marathon Stock")
and USX--U.S.USX-U. S. Steel Group Common Stock ("Steel Stock"). Each class of common stock is intended to
provide the stockholders of such class with
a separate security reflectingreflect the performance of the related Group. Effective
October 31, 1997, USX sold Delhi Gas Pipeline Corporation and other subsidiaries
of USX that comprised all of the Delhi Group (the "Delhi Companies") and, on
January 26, 1998, redeemed all the outstanding USX-Delhi Group Common Stock.group.
-- The Marathon Group is comprised ofincludes Marathon Oil Company ("Marathon") and certain
other consolidated subsidiaries of USX, which are engaged in worldwide exploration production, transportation and
marketingproduction of crude oil and natural gas; domestic refining, marketing and
transportation of petroleum products; and power generation. During 1997, Marathon and Ashland
Inc. ("Ashland") agreed to combine the major elements of their refining,
marketing and transportation ("RM&T") operations. On January 1, 1998,
Marathon transferred certain RM&T net assets toproducts primarily through Marathon Ashland
Petroleum LLC ("MAP"), a new consolidated subsidiary. Also on January 1, 1998,
Marathon acquired certain RM&T net assets from Ashland in exchange for a
38% interest in MAP.owned 62 percent by Marathon; and other energy
related businesses. Marathon Group revenues as a percentage of total USX
consolidated revenues were 78% in 1998, 69% in 1997 and 71% in 1996 and 68% in 1995.1996.
-- The U.S.U. S. Steel Group includes U.S.U. S. Steel, the largest steel producer
in the United States, which is primarily engaged in the
production and sale of steel mill products, coke, and taconite pellets. The U.S. Steel Group
also includespellets; the
management of mineral resources,resources; domestic coal mining,mining; real estate
development; and engineering and consulting services. Equity affiliates of the U.S.
Steel Group include Transtar Inc. andCertain business
activities are conducted through joint ventures such as USS/Kobe
Steel Company, USS-POSCO Industries and PRO-TEC Coating Company. Other
businesses that are part of the U.S. Steel Group include real estate
development and management, and leasing and financing activities. U.S.partially owned
companies. U. S. Steel Group revenues as a percentage of total USX
consolidated revenues were 22% in 1998, 31% in 1997 and 29% in 19961996.
USE OF PROCEEDS
The net proceeds from the sale of the offered securities will be used for
general corporate purposes unless we specify otherwise in the prospectus
supplement applicable to a particular offering.
RATIOS OF EARNINGS TO FIXED CHARGES AND EARNINGS TO COMBINED FIXED CHARGES AND
PREFERRED STOCK DIVIDENDS
CONTINUING OPERATIONS TOTAL ENTERPRISE BASIS -- (UNAUDITED)
The ratios of earnings to fixed charges and 32%earnings to combined fixed
charges and preferred stock dividends for each of the periods indicated is as
follows:
YEAR ENDED DECEMBER 31
-------------------------------- SIX MONTHS ENDED
1994 1995 1996 1997 1998 JUNE 30, 1999
---- ---- ---- ---- ---- ----------------
Ratio of earnings to fixed charges..................... 2.18 1.62 3.90 4.11 3.47 4.00
==== ==== ==== ==== ==== =====
Ratio of earnings to combined fixed charges and
preferred stock dividends............................ 2.01 1.49 3.62 3.92 3.36 3.89
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The term "earnings" is the amount resulting from adding the following
items:
(a) pre-tax income of USX and its consolidated subsidiaries from
continuing operations before adjustment for minority interests in
1995.consolidated subsidiaries or in-
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come or loss from equity investees,
(b) fixed charges,
(c) amortization of capitalized interest,
(d) distributed income of equity investees, and
(e) share of pre-tax losses of equity investees for which charges arising
from guarantees are included in fixed charges;
and subtracting from the total the following:
(x) interest capitalized and
(y) preference security dividend requirements of consolidated
subsidiaries.
For this purpose, "total fixed charges" consists of
(1) interest on all indebtedness and amortization of debt discount and
expense,
(2) interest capitalized,
(3) an interest factor attributable to rentals,
(4) pre-tax earnings required to cover preferred stock dividend
requirements, and
(5) fixed charges from debt of any entity less than 50% owned which is
guaranteed by USX if it is probable that USX will have to satisfy the
guarantee.
DESCRIPTION OF THE DEBT SECURITIES
The Debt Securities will be our general unsecured obligations. Unless
otherwise stated in the prospectus supplement, the Debt Securities will be
senior debt which will rank equally with all of our other senior and
unsubordinated debt. Senior and unsubordinated debt includes obligations to our
institutional lenders and suppliers.
We conduct many of our operations through our subsidiaries. Our rights and
the rights of our creditors, including Holders of these Debt Securities, to the
assets of any subsidiary of ours upon that subsidiary's liquidation or
reorganization or otherwise would be subject to the prior claims of that
subsidiary's creditors, except to the extent that we may be a creditor with
recognized claims against the subsidiary. Our subsidiaries' creditors would
include trade creditors, debt holders, secured creditors and taxing authorities.
The Debt Securities and the indentures governing the Debt Securities will not
restrict us or any of our subsidiaries from incurring indebtedness.
The senior Debt Securities will be issued under an Indenture, dated as of
, , between Harris Trust and Savings Bank (the "Trustee")
and USX (the "Indenture"). We have summarized certain provisions of the
Indenture below. For a complete understanding of these provisions as well as
other provisions, you should refer to the Indenture which is filed as an exhibit
to the Registration Statement. Capitalized terms used in the summary are defined
in the Indenture. We have included section numbers from the Indenture in many of
the summaries to help you locate the provisions being summarized.
We may also issue subordinated Debt Securities under an indenture relating
to subordinated Debt Securities, a form of which is also filed as an exhibit to
the Registration Statement. A description of the subordinated Debt Securities is
provided below under "--Subordinated Debt Securities," beginning on page 12. The
specific terms of the subordinated Debt
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Securities will be provided in the related Prospectus Supplement. For a complete
understanding of the provisions pertaining to the subordinated Debt Securities,
you should refer to the indenture relating to subordinated Debt Securities
attached as an exhibit to the Registration Statement.
The following description of Debt Securities pertains to those securities
issued pursuant to the Indenture relating to senior Debt Securities.
GENERAL
The Indenture does not limit the principal amount of Debt Securities which
we may issue.
We may issue the Debt Securities of any series in definitive form or as a
book-entry security in the form of a Global Security registered in the name of a
Depositary designated by us.
We may issue Debt Securities in foreign currency or units based on foreign
currencies. We may issue the Debt Securities in one or more series with various
maturities. They may be sold at par, at a premium or with an original issue
discount.
The Prospectus Supplement for a particular series will include the
specific terms of the Debt Securities being offered. These terms will include
some or all of the following:
-- the title of the Debt Securities;
-- any limit on the aggregate principal amount of the Debt Securities;
-- the person or entity to whom any interest will be payable, if such
person or entity is not the registered owner of the Debt Securities;
-- the date or dates on which the principal and any premium on the Debt
Securities will be payable;
-- the rates, which may be fixed or variable, per annum at which the
Debt Securities will bear interest, if any, and the date or dates
from which any interest will accrue;
-- the dates on which the interest, if any, on the Debt Securities will
be payable, and the regular record dates for the interest payment
dates or the method for determining such dates;
-- the place or places where the principal, any premium and any interest
on the Debt Securities will be payable;
-- the terms and conditions upon which the Debt Securities may, pursuant
to any optional or mandatory redemption provisions, be redeemed;
-- any mandatory or optional sinking fund or similar provisions or
provisions for mandatory redemption or purchase at the option of the
Holder;
-- if other than denominations of $1,000 or any multiple of such amount,
the denominations in which the Debt Securities will be issuable;
-- if the principal amount payable at the maturity will not be
determinable as of one or more dates prior to maturity, the amount
which shall be deemed to be the principal amount as of any such date;
-- any index, formula or other method used to determine the amount of
payment of principal, any premium or interest on the Debt Securities;
-- if other than the currency of the United States of America, the
currency of payment of principal or
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any premium or interest on the Debt Securities;
-- if, at the election of USX or the Holder, the principal or any
premium or interest on any Debt Securities is to be payable in one or
more currencies or currency units other than those in which the Debt
Securities are stated to be payable, the terms and conditions upon
which such election is to be made and the amount so payable;
-- if other than the full principal amount of the Debt Securities, the
portion of the principal amount of such Debt Securities which will be
payable upon the declaration of acceleration of the maturity thereof;
-- the applicability of the defeasance provisions described below under
"--Satisfaction and Discharge; Defeasance and Covenant Defeasance,"
(page 12) and the conditions under which such provisions will apply;
-- if the Debt Securities will be issuable only in the form of a Global
Security as described below under "--Global Securities," (page 12)
the depositary with respect to the Debt Securities;
-- any Event of Default with respect to the Debt Securities of such
series, in addition to ones set forth in the Indenture;
-- any additional, modified or different covenants applicable to the
Debt Securities;
-- the Change of Control Purchase Price or Prices applicable to a Change
in Control described below under "--Purchase of senior Debt
Securities upon a Change of Control" (page 8); and
-- any other terms of the Debt Securities.
TRANSFER
You may present your Debt Securities for exchange or registration of
transfer in the manner and at the places described in the Prospectus Supplement.
These services will be provided without charge, other than any tax or other
governmental charge that may be payable.
CERTAIN COVENANTS OF SENIOR DEBT SECURITIES
Senior Debt Securities have the following covenants:
CREATION OF CERTAIN LIENS
If we mortgage or encumber as security for money borrowed
(1) any blast furnace facility or raw steel producing facility, or
rolling mills which are a part of a plant which includes such a
facility, or
(2) any property capable of producing oil or gas;
which, in either case,
-- is located in the United States and
-- is determined to be a principal property by the Board of Directors of
USX in its discretion,
we will secure each series of senior debt equally and ratably with all
obligations secured by the Mortgage then being given. This covenant will not
apply in the case of any Mortgage:
-- existing on the date of the Indenture;
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-- incurred in connection with the acquisition or construction of any
property; the assumption of any Mortgage previously existing on
acquired property or any Mortgage existing on the property of any
entity when it becomes a subsidiary of USX;
-- in favor of the United States, or any State, or instrumentality of
either, to secure payments to USX pursuant to the provisions of any
contract or any statute;
-- in favor of the United States, any State, or instrumentality of
either, to secure borrowings for the purchase or construction of the
property Mortgaged;
-- in connection with a transfer of oil or gas in place for a period of
time commonly referred to as an "oil payment" or "production
payment";
-- to secure the cost of the repair, construction, improvement,
alteration, exploration, development or drilling of such property;
-- on various facilities and personal property relating to oil and gas
properties described in (2) above;
-- on any property included under clause (2) above arising in connection
with the sale of accounts receivable resulting from the sale of oil
or gas at the wellhead; or
-- that is a renewal of or substitution for any Mortgage permitted under
the preceding clauses.
In addition to the foregoing, we may grant Mortgages or incur liens on
property covered by the restriction described above so long as the net book
value of the property so encumbered, together with all property subject to the
restriction on certain sale and leasebacks described below, does not at the time
such Mortgage or lien is granted exceed five percent (5%) of Consolidated Net
Tangible Assets. (Section 1005).
"Consolidated Net Tangible Assets" means the aggregate value of all assets
of USX and its subsidiaries after deducting:
(a) all current liabilities (excluding all long-term debt due within one
year),
(b) all investments in unconsolidated subsidiaries and all investments
accounted for on the equity basis, and
(c) all goodwill, patent and trademarks, unamortized debt discount and
other similar intangibles (all determined in conformity with generally
accepted accounting principles and calculated on a basis consistent
with USX's most recent audited consolidated financial informationstatements).
(Section 101).
LIMITATIONS ON CERTAIN SALE AND LEASEBACKS
We are generally prohibited from selling and leasing back the properties
described in clauses (1) and (2) above under "--Creation of Certain Liens" (page
6). However, this covenant will not apply if:
-- the lease is to a subsidiary (or to USX in the case of a subsidiary);
-- the lease is for a temporary period and will not be renewed;
-- we could Mortgage such property without equally and ratably securing
the senior Debt Securities;
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-- the transfer is incident to or necessary to effect any operating,
farm out, farm in, unitization, or other agreement of the same
general nature relating to the acquisition, exploration, maintenance,
development and operation of oil and gas properties in the ordinary
course of business or as required by regulatory agencies having
jurisdiction over the property; or
-- we promptly inform the Trustee of the sale, the net proceeds of such
sale are at least equal to the fair value of the property and within
180 days of the sale the net proceeds are applied to the retirement
or in-substance defeasance of our funded debt (subject to reduction,
under specified circumstances). (Section 1006).
As of the date of this Prospectus, neither USX nor any subsidiary of USX
has any property referred to in either clause (1) or (2) above under "--Creation
of Certain Liens" (page 6) which has been determined by the Board of Directors
of USX to be a principal property.
MERGER AND CONSOLIDATION
We may not merge or consolidate with any other entity or sell or convey
all or substantially all of our assets except as follows:
(a) USX shall be the continuing corporation or the successor corporation
(if other than USX) shall be a U. S. corporation which expressly
assumes the obligations of USX under the Indenture and the Debt
Securities, and
(b) Immediately after such merger, consolidation, sale or conveyance, no
Event of Default shall have occurred and be continuing. (Section 801).
Upon the assumption by the successor of the obligations under the
Indenture, the successor will be substituted for USX which will be relieved of
any further obligation under the Indenture and the Debt Securities. (Section
802).
PURCHASE OF SENIOR DEBT SECURITIES UPON A CHANGE IN CONTROL
In the event of any Change in Control (as defined below) of USX, each
Holder of Debt Securities will have the right to require USX to purchase all of
that Holder's senior Debt Securities. We must purchase the senior Debt
Securities 35 Business Days after the Change in Control (the "Change in Control
Purchase Date") at a cash price equal to:
(1) 100% of the principal amount together with accrued interest to such
Change in Control Purchase Date; or
(2) such other price as may be specified in the terms of such senior Debt
Securities (the "Change in Control Purchase Price").
A "Change in Control" of USX is deemed to have occurred if:
(x) any "person" or "group" of persons acquire beneficial ownership of at
least 35% of the outstanding Voting Power of USX,
(y) during any period of twenty-five consecutive months, individuals who
at the beginning of such period were directors of USX cease to
constitute a majority of the board of directors of USX, or
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(z) any person or group of related persons shall acquire all or
substantially all of the assets of USX.
A Change in Control shall not be deemed to have occurred if USX shall have
merged or consolidated with or transferred all or substantially all of its
assets to another entity in compliance with the provisions of Section 801 of the
Indenture (relating to when USX may merge or transfer assets) and the surviving
or successor or transferee entity is no more leveraged than was USX immediately
prior to such event. (Section 1007).
For purposes of this definition, the term "leveraged" when used with
respect to any corporation shall mean the percentage represented by the total
assets of that corporation divided by its stockholders' equity (or members'
equity, as the case may be), in each case determined and as would be shown in a
consolidated balance sheet of such corporation prepared in accordance with
generally accepted accounting principles in the United States of America.
The term "substantially all" in clause (z) above has not been quantified
in the Indenture for purposes of defining Change in Control and, depending upon
the factual circumstances, there may be uncertainty as to when a Change in
Control has occurred for purposes of determining the rights of Holders of senior
Debt Securities pursuant to this provision.
In the event a Change in Control occurs, USX intends to comply with any
applicable securities laws or regulations, including any applicable requirements
of Rule 14e-1 under the Exchange Act. The Change in Control purchase feature of
the senior Debt Securities may in certain circumstances make more difficult or
discourage a takeover of USX.
The Change in Control purchase feature, however, is not the result of
management's knowledge of any specific effort to accumulate shares of Common
Stock or to obtain control of USX by means of a merger, tender offer,
solicitation or otherwise, or part of a plan by management to adopt a series of
anti-takeover provisions.
The Change in Control purchase feature is similar to that contained in
other debt offerings of USX as a result of negotiations between USX and the
underwriters thereof.
Except as described above, the Change in Control purchase feature does not
afford Holders of the senior Debt Securities protection against possible adverse
effects of a reorganization, restructuring, merger or similar transaction
involving USX.
Although USX's existing indebtedness does not limit USX's ability to
purchase senior Debt Securities, USX's ability to purchase senior Debt
Securities in the future may be limited by the terms of any then existing
borrowing arrangements and by its financial resources.
EVENTS OF DEFAULT
An Event of Default is defined in the Indenture as being:
(1) failure to pay interest when due, continuing for 30 days;
(2) failure to pay the principal of or premium when due and payable;
(3) failure to pay the Change in Control Purchase Price when due and
payable;
(4) failure to deposit any sinking fund payment when due;
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(5) failure in the performance of any other covenant or warranty not
specifically dealt with in this section for a period of 90 days after
notice to us of such failure as provided in the Indenture;
(6) the occurrence of specified events of bankruptcy, insolvency, or
reorganization with respect to USX; or
(7) any other Event of Default provided with respect to the Debt
Securities of that series. (Section 501).
The Trustee is required to give Holders of the Debt Securities of any
series written notice of a default with respect to such series as provided by
the Trust Indenture Act. In the case of any default of the character described
above in clause (5) of this section, no such notice to Holders shall be given
until at least 60 days after the occurrence of such default. (Section 602).
USX is required annually to deliver to the Trustee an officer's
certificate stating whether or not the signers have any knowledge of any default
by USX in its periodic reportsperformance and observance of any terms, provisions and conditions
of the Indenture. (Section 1004).
In case an Event of Default (other than an Event of Default specified
under clause (6) above) shall occur and be continuing with respect to any
series, the Trustee or the Holders of not less than 25% in principal amount of
the Debt Securities of such series then Outstanding may declare the Debt
Securities of such series to be due and payable. (Section 502).
Any past default with respect to a series of Debt Securities may be waived
on behalf of all Holders of the series of Debt Securities by at least a majority
(in principal amount) of the Holders of the Outstanding Debt Securities of that
series, except a default
(A) in the payment of principal, premium or interest on any Debt Security
of the series, or
(B) respecting a covenant which cannot be modified without the consent of
the Holder of each Outstanding Debt Security of the series affected.
Any default which is so waived will cease to exist and any Event of Default
arising from this default will be deemed to be cured for every purpose under the
Indenture; but no such waiver will extend to any subsequent or other default or
impair any right arising from a subsequent or other default. (Section 513).
With respect to the Indenture, no Holder may sue unless
(a) the Holder has given prior written notice to the Trustee of a
continuing Event of Default with respect to a series of Debt
Securities held by the Holder;
(b) not less than 25% (in principal amount) of the Holders of Debt
Securities of that series have made a written request to the Trustee
to sue respecting the Event of Default;
(c) reasonable indemnity against costs, expenses and liabilities to be
incurred with the above request has been offered by the Holders making
the request;
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(d) the Trustee for 60 days after its receipt of the above notice, request
and offer of indemnity has failed to sue; and
(e) no direction inconsistent with the above request has been given to the
Trustee during the above 60 day period by the Holders of a majority
(in principal amount) of the Debt Securities of that series.
It is intended that rights provided for Holders under the Indenture are for the
equal and ratable benefit of all such Holders. (Section 507).
MODIFICATION OF THE INDENTURE
We and the Trustee may modify the Indenture without the consent of the
Holders of the Debt Securities for one or more of the following purposes:
(1) to evidence the succession of another person to USX;
(2) to add to covenants or provisions for the benefit of the Holders of
Debt Securities or to surrender any right or power conferred upon USX
by the Indenture;
(3) to add additional events of default for the benefit of Holders of all
or any series of Debt Securities;
(4) to add or change provisions of the Indenture to allow the issuance of
Debt Securities in other forms;
(5) to add to, change or eliminate any of the provisions of the Indenture
respecting one or more series of Debt Securities under certain
conditions specified in the Indenture;
(6) to secure the Debt Securities pursuant to the requirements of the
Indenture or otherwise;
(7) to establish the form or terms of Debt Securities of any series as
permitted by the Indenture;
(8) to evidence the appointment of a successor Trustee; or
(9) to cure any ambiguity or to correct or supplement any provision of the
Indenture which may be defective or inconsistent with any other
provision in the Indenture, or to make any other provisions with
respect to matters arising under the Indenture as shall not adversely
affect the interests of the Holders of Securities of any series in any
material respect. (Section 901).
USX and the Trustee may otherwise modify the Indenture or any supplemental
indenture with the consent of the Holders of not less than 66 2/3% in aggregate
principal amount of each series of Debt Securities affected. However, without
the consent of the Holder of each Outstanding Debt Security affected, no
modification may:
(a) change the fixed maturity or reduce the principal amount, reduce the
rate or extend the time of payment of any premium or interest hereon,
or change the currency in which the Debt Securities are payable, or
adversely affect any right of the Holder of any Debt Security to
require USX to repurchase the Debt Security, or
(b) reduce the percentage of Debt Securities required for consent to any
such modifications or supplemental indenture. (Section 902).
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SATISFACTION AND DISCHARGE; DEFEASANCE AND COVENANT DEFEASANCE
The Indenture shall be satisfied and discharged if:
(1) USX delivers to the Trustee all Debt Securities then outstanding for
cancellation; or
(2) all Debt Securities have become due and payable or are to become due
and payable within one year or are to be called for redemption within
one year and USX deposits an amount of cash sufficient to pay the
principal, premium, if any, and interest to the date of maturity or
redemption. (Section 401).
The Indenture provides that a defeasance provision may be made applicable
to the Debt Securities of a series. If applicable, we may elect either:
(A) to defease and be discharged from our obligations with respect to any
Debt Security of such series ("Defeasance"); or
(B) to be released from certain of our obligations with respect to any
Debt Security of such series ("Covenant Defeasance")
upon the deposit with the Trustee of money and/or U.S. or Foreign Government
Obligations in an amount sufficient to pay the principal, any premium and any
interest on such Debt Security, on the scheduled due dates therefor. In the case
of Defeasance, the Holders of such Debt Securities are entitled to receive
payments in respect of such Debt Securities solely from such Trust. (Article
Thirteen).
GLOBAL SECURITIES
The Debt Securities of a series may be issued in whole or in part in the
form of one or more global certificates that will be deposited with a depositary
identified in a prospectus supplement. Unless it is exchanged in whole or in
part for Debt Securities in definitive form, a global certificate may generally
be transferred only as a whole unless it is being transferred to certain
nominees of the depositary.
Unless otherwise stated in any prospectus supplement, The Depositary Trust
Company, New York, New York ("DTC") will act as depositary. Beneficial interests
in global certificates will be shown on, and transfers of global certificates
will be effected only through, records maintained by DTC and its participants.
SUBORDINATED DEBT SECURITIES
Although the Indenture and the indenture relating to subordinated Debt
Securities are generally similar and many of the provisions discussed above
pertain to both senior and subordinated Debt Securities, there are many
substantive differences between the two. This section discusses some of those
differences.
SUBORDINATION
Subordinated Debt Securities will be subordinate, in right of payment, to
all Senior Debt. "Senior Debt" is defined to mean, with respect to USX, the
principal, premium, if any, and interest on
(1) all indebtedness of USX, whether outstanding on the date hereof or
hereafter created, incurred or assumed, which is for money borrowed,
or evidenced by a note or similar instrument given in connection with
the acquisition of
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any business, properties or assets, including securities,
(2) any indebtedness of others of the kinds described in the preceding
clause (1) for the payment of which USX is responsible or liable
(directly or indirectly, contingently or otherwise) as guarantor or
otherwise and
(3) amendments, renewals, extensions and refundings of any indebtedness
described in the preceding clauses (1) or (2), unless in any
instrument or instruments evidencing or securing such indebtedness or
pursuant to which the same is outstanding, or in any such amendment,
renewal, extension or refunding, it is expressly provided that such
indebtedness is not superior in right of payment to the Debt
Securities of any series.
DIFFERENCE BETWEEN SUBORDINATED AND SENIOR DEBT COVENANTS AND EVENTS OF
DEFAULT
Debt Securities issued pursuant to the indenture relating to subordinated
Debt Securities will not have the advantage of all of the covenants and Events
of Default provided in the Indenture relating to the senior Debt Securities. For
example, all of the covenants discussed under "--Certain Covenants of senior
Debt Securities" (beginning on page 6) and "--Purchase of senior Debt Securities
upon a Change in Control" (beginning on page 8) are not applicable to securities
issued pursuant to the indenture relating to subordinated Debt Securities. Also,
the event of default discussed in clause (3) under "--Events of Default" (page
9) is not available to Debt Securities issued pursuant to the indenture relating
to subordinated Debt Securities.
TERMS OF SUBORDINATED DEBT SECURITIES MAY CONTAIN CONVERSION OR EXCHANGE
PROVISIONS
The Prospectus Supplement for a particular series of subordinated Debt
Securities will include some or all of the specific terms discussed above under
"--General." Additionally, the Prospectus Supplement may contain subordination
provisions (to the extent that such provisions might differ from those provided
in the indenture relating to subordinated Debt Securities) and, if applicable,
conversion or exchange provisions. See "Convertible or Exchangeable Securities,"
below (page 31).
MODIFICATION OF THE INDENTURE RELATING TO SUBORDINATED DEBT SECURITIES
The indenture relating to subordinated Debt Securities may be modified by
USX and the Trustee without the consent of the Holders of the subordinated Debt
Securities for one or more of the purposes discussed above under "--Modification
of the Indenture," (page 11). Additionally, USX and the Trustee may modify the
indenture relating to subordinated Debt Securities to make provision with
respect to any conversion or exchange rights as contemplated in that indenture.
DEFEASANCE OF SUBORDINATED DEBT SECURITIES
The subordination of the Debt Securities is expressly made subject to the
provisions for defeasance and covenant defeasance (for similar provisions, see
"--Satisfaction and Discharge; Defeasance and Covenant Defeasance," page 12).
Upon the effectiveness of any such defeasance or covenant defeasance, the Debt
Securities then outstanding shall cease to be subordinated.
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GOVERNING LAW
The Indenture and the Debt Securities will be governed by, and interpreted
according to, the law of the State of New York.
CONCERNING THE TRUSTEES
Harris Trust and Savings Bank will be the Trustee under each of the
indentures (the Indenture and the indenture relating to subordinated Debt
Securities). USX and its subsidiaries maintain ordinary banking relationships,
including loans and deposit accounts, with the Trustee and anticipate that they
will continue to do so.
If a Trustee has, or acquires, a conflicting interest, the Trustee must
eliminate the conflicting interest or resign. (Section 608). The Indenture and
the indenture relating to subordinated Debt Securities contain provisions
regarding the resignation and removal of the Trustee and the appointment of a
successor Trustee. (Sections 610 and 611).
USX CAPITAL STOCK OVERVIEW
The following is an overview of the outstanding capital stock of USX.
Descriptions of USX's Preferred Stock and Common Stock follow this Section. For
complete descriptions, you should read the Restated Certificate of Incorporation
and the Rights Agreement between USX and ChaseMellon Shareholder Services,
L.L.C., a New Jersey limited liability company, as Rights Agent, which have been
filed as exhibits to the Registration Statement of which this Prospectus is a
part.
The authorized and outstanding capital stock on September 30, 1999
consists of:
AUTHORIZED OUTSTANDING
----------- -----------
PREFERRED STOCK......... 40 Million
6.50% Cumulative
Convertible
Preferred........... 3 Million 2.8 million
Series A Junior
Preferred........... 8 Million None
COMMON STOCK............ 800 Million
Marathon.............. 550 Million 310 million
Steel................. 200 Million 88 million
Delhi................. 50 Million None
The outstanding Delhi Stock was redeemed in January 1998, and will not be
used in the future, so we have not included any further discussion of it.
The Series A Junior Preferred Stock is authorized in connection with our
Stockholders Rights Plan which is discussed below under "Description of the
Common Stock--Rights Agreement" (beginning on page 21).
There are also securities issued by USX subsidiaries that are convertible
into USX securities and are outstanding at September 30, 1999:
(1) 3.9 million shares of 6.75% Mandatorily Redeemable Convertible
Preferred Securities of a subsidiary trust that are convertible into
4.3 million shares of Steel Stock; and
(2) 293,811 exchangeable shares of a Canadian subsidiary of Marathon Oil
Company, exchangeable on a one-for-one basis into Marathon Stock. The
exchangeable shares were issued in connection with the acquisition of
Tarragon Oil and Gas (now named Marathon Canada Limited) in August
1998.
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DESCRIPTION OF THE PREFERRED STOCK
The authorized Preferred Stock may be issued without the approval of the
holders of Common Stock in one or more series. Each series will have the
designation, powers, preferences and other rights and limitations as stated in a
resolution adopted by the Board and as described in the appropriate Prospectus
Supplement.
The future issuance of Preferred Stock may have the effect of delaying,
deferring or preventing a change in control of USX.
Holders of the 6.50% Cumulative Convertible Preferred Stock ("6.50%
Preferred") are entitled to receive cumulative annual dividends at the rate of
$3.25 per share, payable quarterly. It is currently redeemable at the option of
USX, in whole or in part, for cash, at a price of $51.30 per share, and at
prices declining annually on each April 1 to an amount equal to $50.00 per share
on and after April 1, 2003, plus, in each case, an amount equal to accrued and
unpaid dividends to the redemption date.
If USX disposes of the U. S. Steel Group or substantially all of its
assets, all of the 6.50% Preferred is required to be redeemed for $50.00 per
share, plus dividends accrued and unpaid to the redemption date. It is also
required to be redeemed under certain other limited circumstances.
The shares of 6.50% Preferred are convertible at any time at the option of
the holder into shares of Steel Stock at a conversion price of $46.125 per share
of Steel Stock (equivalent to a conversion rate of 1.084 shares of Steel Stock
for each share of 6.50% Preferred), subject to adjustment in certain
circumstances.
The holders of the 6.50% Preferred have no vote except certain class votes
in limited circumstances.
Upon the dissolution, liquidation or winding-up of USX, the holders of the
6.50% Preferred are entitled to receive $50 per share, plus all accrued and
unpaid dividends, out of the assets of USX available for distribution to
stockholders, before any payment or distribution is made on Common Stock.
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USX COMMON STOCK SUMMARY
The following is a summary of the terms of the Common Stock. A more
detailed description of certain of the terms follows and a complete description
can be found in the Restated Certificate of Incorporation and other documents
incorporated by reference in this Prospectus. Capitalized terms used in this
summary have the respective meanings ascribed to them elsewhere in this
Prospectus.
USX COMMON STOCK
--------------------------------------------------------------------------
USX-MARATHON GROUP USX-U. S. STEEL GROUP
COMMON STOCK COMMON STOCK
------------------------------------ ------------------------------------
BUSINESS: Energy business. Steel business.
NUMBER OF SHARES 310,078,463 88,369,115
OUTSTANDING AS OF
SEPTEMBER 30, 1999:
DIVIDENDS: Dividends on the Marathon Stock will Dividends on the Steel Stock will be
be paid at the discretion of the paid at the discretion of the Board
Board based primarily upon the based primarily upon the long-term
long-term earnings and cash flow earnings and cash flow capabilities
capabilities of the Marathon Group, of the U. S. Steel Group, as well as
as well as on the dividend policies on the dividend policies of publicly
of publicly traded energy companies. traded steel companies. Dividends
Dividends will be payable out of all will be payable out of the lesser of
funds of USX legally available (1) all funds of USX legally
therefor. available therefor and (2) the
Available Steel Dividend Amount.
EXCHANGE AND REDEMPTION: USX may exchange the Marathon Stock USX may exchange the Steel Stock for
for shares of a wholly owned shares of a wholly owned subsidiary
subsidiary that holds all the assets that holds all the assets and
and liabilities of the Marathon liabilities of the U. S. Steel
Group. The effect of this exchange Group. The effect of this exchange
would be to spin off the Marathon would be to spin off the U. S. Steel
Group to holders of Marathon Stock. Group to holders of Steel Stock.
If USX sells all or substantially
all of the properties and assets of
the U. S. Steel Group, USX must
either: (1) pay a special dividend
to holders of Steel Stock equal to
the Net Proceeds; or (2) redeem
shares of Steel Stock having an
aggregate market Value closest to
the value of the Net Proceeds for an
amount equal to the Net Proceeds; or
(3) exchange each share of Steel
Stock for a number of shares of
Marathon Stock equal to 110% of the
ratio of the Market Values of one
share of Steel Stock to one share of
Marathon Stock.
VOTING RIGHTS: Except as otherwise described Except as otherwise described
herein, the Marathon Stock will vote herein, the Steel Stock will vote as
as a single class with the Steel a single class with the Marathon
Stock. The Marathon Stock will have Stock. Each share of Steel Stock
one vote per share. will have a variable number of votes
based upon the relative Market
Values of one share of Steel Stock
and one share of Marathon Stock, and
may have more than, less than or
exactly one vote per share.
LIQUIDATION: In the event of the liquidation of In the event of the liquidation of
USX, holders of Marathon Stock will USX, holders of Steel Stock will
share the funds, if any, remaining share the funds, if any, remaining
for distribution to common for distribution to common
stockholders with holders of Steel stockholders with holders of
Stock based upon the relative market Marathon Stock based upon the
capitalizations of each. relative market capitalizations of
each.
LISTING: NYSE under the symbol "MRO". NYSE under the symbol "X".
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DESCRIPTION OF THE COMMON STOCK
GENERAL
See "USX Common Stock Summary" on the preceding page for a summary of
USX's Common Stocks.
As used in this discussion of USX's Common Stock:
"Market Value" of either class of Common Stock on any Business Day means
generally the average of the high and low reported sales prices on a Business
Day.
"Business Day" means each weekday on which any relevant class of Common
Stock is traded on a national stock exchange.
"Net Proceeds," as of any date, from any Disposition of any of the
properties and assets of the U. S. Steel Group means the gross proceeds of such
Disposition after reasonable provision for:
(a) any taxes payable by USX in respect of such Disposition,
(b) any taxes payable by USX in respect of any dividend or redemption
pursuant to a dividend or redemption paid to holders of Steel Stock in
connection with such Disposition,
(c) any transaction costs, and
(d) any liabilities (contingent or otherwise) of, or allocated to, the U.
S. Steel Group.
To the extent the proceeds of any Disposition include any securities or other
property other than cash, the Board of Directors will determine the value of
such securities or property. The Board will determine the amount needed to make
reasonable provision for the items listed above.
COMMON STOCK TERMS
DIVIDENDS--DIVIDENDS ON EACH CLASS OF COMMON STOCK ARE INTENDED TO BE PAID
BASED ON THE FINANCIAL CONDITION AND RESULTS OF OPERATIONS OF THE
RESPECTIVE GROUP.
The Board may, in its sole discretion, declare and pay dividends
exclusively on the Marathon Stock, or exclusively on the Steel Stock, or on both
classes in equal or unequal amounts, notwithstanding the respective amount of
funds available for dividends on each class, the respective voting and
liquidation rights of each class, the amount or prior dividends declared on each
class or any other factor.
Dividends may be paid on the Marathon Stock as determined by the Board out
of legally available funds of USX.
Dividends on the Steel Stock may be declared and paid only out of the
lesser of (1) legally available funds of USX and (2) the Available Steel
Dividend Amount.
The "Available Steel Dividend Amount," on any date, means either (a) or
(b):
(a) The greater of (1) or (2):
(1) an amount equal to
(x) $2.244 billion, the amount of stockholders' equity of USX at
December 31, 1990, assigned to the U. S. Steel Group, increased or
decreased after that date, as appropriate, to reflect:
-- Steel Net Income
-- any dividends or other distributions
-- repurchases or issuances of any shares of Steel Stock
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or any shares of Preferred Stock attributed to the U. S.
Steel Group, and
-- any other adjustments to stockholders' equity of the U. S.
Steel Group made in accordance with generally accepted
accounting principles,
less
(y) the sum of the aggregate par value of all outstanding Steel Stock
and the aggregate stated capital of all outstanding Preferred
Stock attributed to the U. S. Steel Group;
or
(2) the excess of the fair market value of the net assets of the U. S.
Steel Group over the sum of the aggregate par value of all
outstanding Steel Stock and the aggregate stated capital of all
outstanding Preferred Stock attributed to the U. S. Steel Group.
In the case of each of clauses (1) and (2) the amount is increased by an
amount equal to the effects of the recognition of the transition
obligation upon the adoption of SFAS No. 106 (including any amendments
thereto) and any cumulative effects of the adoption of SFAS No. 109
(including any amendments thereto) in 1992.
(b) In case there shall be no such amount, an amount equal to Steel Net
Income (if positive) for the fiscal year in which the dividend is
declared and/or the preceding fiscal year.
The Available Steel Dividend Amount as of June 30, 1999 was at least
$3.323 billion, as calculated under the preceding clause (a)(1).
Although net income and stockholders' equity of the U. S. Steel Group was
reduced by approximately $1.335 billion when USX adopted the accounting changes
required by SFAS No. 106 and SFAS No. 109 in 1992, such changes did not affect
cash flows of the Exchange Act,U. S. Steel Group. Our Restated Certificate of Incorporation
provides that the amounts in each of clause (a)(1) and clause (a)(2) of the
definition of "Available Steel Dividend Amount" were adjusted to eliminate the
effects of such changes, as set forth above.
Clause (b) in the definition of "Available Steel Dividend Amount" will
permit the payment of dividends on the Steel Stock in any fiscal year if there
is positive Steel Net Income (as defined below) in such fiscal year or in the
preceding fiscal year or if the sum of Net Income, if any, in both such years is
positive. Any loss in either such year would not reduce positive Steel Net
Income, if any, in the other year for purposes of determining the applicable
limitation on dividends.
Such provision is comparable to Section 170 of the Delaware General
Corporation Law, which allows the payment of dividends on common stock of any
Delaware corporation in any fiscal year to the extent of consolidated net income
of the corporation for such fiscal year and/or the preceding fiscal year.
As used in this discussion of USX's Common Stocks, "Steel Net Income"
means the net income or loss of the U. S. Steel Group determined in accordance
with generally accepted accounting principles, including income and expenses of
USX attributed to the U. S. Steel
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Group, on a substantially consistent basis, including, without limitation,
corporate administrative costs, net interest and other financial costs and
income taxes.
EXCHANGE AND REDEMPTION--MARATHON STOCK MAY BE EXCHANGED FOR SHARES OF A
SUBSIDIARY OF USX TO WHICH USX WOULD HAVE TRANSFERRED ALL OF THE ASSETS
AND LIABILITIES OF THE MARATHON GROUP.
At any time after the transfer of all the assets and liabilities of the
Marathon Group to a wholly owned subsidiary of USX (the "Marathon Group
Subsidiary"), the Board may, in its annual shareholder reportssole discretion and by a majority vote of
the directors then in office, provided that there are sufficient legally
available funds of USX, exchange all of the outstanding shares of Marathon Stock
for all of the outstanding shares of the common stock of the Marathon Group
Subsidiary (the "Marathon Group Subsidiary Stock"), on a pro rata basis.
EXCHANGE AND REDEMPTION--STEEL STOCK MAY BE EXCHANGED FOR SHARES OF A
SUBSIDIARY OF USX TO WHICH USX WOULD HAVE TRANSFERRED ALL OF THE ASSETS
AND LIABILITIES OF THE U. S. STEEL GROUP. IN THE EVENT OF A DISPOSITION OF
ALL OR SUBSTANTIALLY ALL OF THE ASSETS OF THE U. S. STEEL GROUP, USX IS
REQUIRED TO (1) PAY A DIVIDEND, (2) REDEEM STEEL STOCK, OR (3) EXCHANGE
STEEL STOCK FOR MARATHON STOCK.
If USX transfers all the assets and liabilities of the U. S. Steel Group
to a wholly owned subsidiary of USX (the "U. S. Steel Group Subsidiary"), Steel
Stock may be exchanged, at the sole discretion of the Board, for all of the
outstanding stock of the U. S. Steel Group Subsidiary, on a pro rata basis.
In addition, upon the Disposition of substantially all of the properties
and assets of the U. S. Steel Group to any person, entity or group, USX shall,
within 60 days following the consummation of such Disposition:
(1) declare and pay a dividend to the holders of the Steel Stock in an
amount equal to the Net Proceeds of such Disposition,
(2) redeem the number of whole shares of Steel Stock having an aggregate
average Market Value in an amount equal to the Net Proceeds, or
(3) exchange each outstanding share of Steel Stock for a number of shares
of Marathon Stock equal to 110% of the average daily ratio of the
Market Value of one share of Steel Stock to the Market Value of one
share of Marathon Stock during such period.
For the purposes of this provision, "Substantially all of the properties
and assets of the U. S. Steel Group," as of any date, means a portion of such
properties and assets that represents at least 80% of either of the then-current
market value of, or the aggregate revenues for the immediately preceding twelve
fiscal quarterly periods of USX derived from, the properties and assets of the
U. S. Steel Group as of such date.
After any such special dividend or redemption pursuant to clauses (1) or
(2) in the second preceding paragraph, the Board may, by a majority vote of the
directors then in office, exchange each outstanding share of Steel Stock for a
number of shares of Marathon Stock equal to 110% of the Market Value Ratio.
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"Market Value Ratio," as of any date, means the highest of three formulas
for calculating the ratio of the Market Value of one share of the Steel Stock to
the Market Value of one share of the Marathon Stock.
In determining whether to effect such an exchange, the Board, in addition
to other matters, would likely consider whether the remaining properties and
assets of the U. S. Steel Group constitute a viable business. Other
considerations could include the number of shares of Steel Stock remaining
outstanding following any such redemption, the per share market price of the
Steel Stock following the payment of such a dividend or such a redemption and
the cost of maintaining stockholder accounts.
VOTING--SHARES OF MARATHON STOCK HAVE ONE VOTE PER SHARE. SHARES OF STEEL
STOCK WILL, WHEN VOTING WITH MARATHON STOCK, HAVE A NUMBER OF VOTES PER
SHARE BASED UPON THE TIME WEIGHTED AVERAGE RATIOS OF THE MARKET VALUE OF A
SHARE OF STEEL STOCK TO THE MARKET VALUE OF A SHARE OF MARATHON STOCK.
Except as set forth below, holders of both classes of Common Stock vote
together as a single class on all matters as to which all holders of Common
Stock are entitled to vote. See "--Special Considerations--Limited Separate
Voting Rights," page 27.
The approval of the holders of at least 66 2/3% of the outstanding shares
of each class, voting as a separate class, is necessary to:
(1) make any payment or distribution on the other class of Common Stock,
with
(A) proceeds from the disposition or any of the properties and
assets of the group to which the class relates, or
(B) any portion of an equity interest in a person, entity or group
that owns any of the properties and assets of the group to which
the class relates;
or
(2) use any proceeds from the Disposition of any of the properties and
assets of the group to which the class relates in any business of the
Corporation other than the group to which the class relates.
In spite of the foregoing, a vote is not required if proceeds are loaned at a
rate representative of actual borrowings and short-term investments by USX.
The vote or consent of the holders of a majority of all of the outstanding
shares of any class of Common Stock, voting as a separate class, is currently
required under Delaware law for any amendment to the Restated Certificate of
Incorporation that would increase or decrease the par value of the shares of
such class or alter or change the powers or special rights of the shares of such
class so as to affect them adversely.
The Restated Certificate of Incorporation provides that neither the
increase nor decrease of the authorized number of shares of any class of Common
Stock shall require a separate vote of any class. Thus, it is possible that the
holders of a majority of one class of Common Stock could constitute a majority
of the voting power of both classes and approve the increase or decrease of the
authorized amount of the other class of Common Stock without the approval of the
holders of such other class of Common Stock.
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The Restated Certificate of Incorporation also provides that unless the
vote or consent of a greater number of shares is required by law, the approval
of the holders of a majority of the outstanding shares of any class of Common
Stock, voting as a separate class, will be necessary to authorize the merger or
consolidation of USX into or with any other corporation if the merger or
consolidation would adversely affect the powers or special rights of such class
of Common Stock, either directly or indirectly.
LIQUIDATION--IN THE EVENT OF THE LIQUIDATION OF USX, HOLDERS OF EITHER
CLASS OF COMMON STOCK WILL BE ENTITLED TO RECEIVE A PORTION OF THE FUNDS
DISTRIBUTABLE TO HOLDERS OF BOTH CLASSES OF COMMON STOCK BASED UPON THE
RELATIVE MARKET CAPITALIZATION OF EACH.
The Restated Certificate of Incorporation provides that, in the event of a
dissolution, liquidation or winding-up of USX, whether voluntary or involuntary,
after payment of creditors and preferential amounts to holders of Preferred
Stock, the holders of outstanding shares of each class of Common Stock will
share the funds remaining for distribution to the holders of Common Stock based
upon the time-weighted average aggregate market capitalization of each such
class of Common Stock to the aggregate market capitalization of both classes of
Common Stock.
For purposes of the preceding sentence, "Market Capitalization" of any
class of Common Stock on any day shall mean the product of (1) the Market Value
of such class of Common Stock on such day and (2) the number of shares of such
class of Common Stock outstanding on such day.
DETERMINATIONS BY BOARD
Any determinations made by the Board under the foregoing provisions will
be final and binding on all stockholders of USX.
OTHER RIGHTS
The holders of Common Stock do not have any preemptive rights or any
rights to convert their shares into any other securities of USX.
STOCK TRANSFER AGENT AND REGISTRAR
USX maintains its own stock transfer department at the following address:
USX Corporation, Shareholders Services Department, 600 Grant Street, Room 611,
Pittsburgh, PA 15219-4776. Certificates representing shares can also be
presented for registration of transfer at ChaseMellon Shareholder Services, 120
Broadway, 13th Floor, New York, NY 10021.
ChaseMellon Shareholder Services, 4 Station Square, Pittsburgh, PA 15219
is the Registrar for all the Common Stock.
RIGHTS AGREEMENT
The following is a description of the terms of the Stockholders Rights
Plan set forth in the Rights Agreement between USX and ChaseMellon Shareholder
Services, L.L.C., a New Jersey limited liability company, as Rights Agent.
On September 28, 1999, the Board of Directors of USX adopted the
Stockholder Rights Plan and declared a dividend distribution of (a) one Steel
Right for each outstanding share of Steel Stock and (b) one Marathon Right for
each share of Marathon Stock to stockholders of record at the close of business
on October 9, 1999. Each Right entitles the registered holder to purchase from
USX a Unit consisting of one one-hundredth of a share
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of Series A Junior Preferred Stock, no par value, at a Purchase Price of $110 in
cash per Unit, subject to adjustment.
Initially, the Marathon Rights will be attached to all certificates
representing shares of Marathon Stock then outstanding and the Steel Rights will
be attached to all certificates representing shares of Steel Stock then
outstanding. Subject to certain exceptions specified in the Rights Agreement,
the Marathon Rights will separate from the certificates representing shares of
Marathon Stock and the Steel Rights will separate from the certificates
representing shares of Steel Stock when a Distribution Date occurs. Subject to
the exceptions specified in the Rights Agreement, a Distribution Date will occur
upon the earlier of
(1) 10 business days following the Stock Acquisition Date (which is the
date of a public announcement that an Acquiring Person has acquired,
or obtained the right to acquire, beneficial ownership of Voting
Stock -- Marathon Stock and Steel Stock are together referred to as
the Voting Stock -- representing 15% or more of the outstanding Voting
Power represented by the outstanding Voting Stock of USX), unless the
15% ownership occurs as a result of
(a) USX's calculation from time to time of the relative voting
rights of the Marathon Stock and Steel Stock,
(b) repurchases of stock by USX or
(c) certain inadvertent actions by institutional or certain other
stockholders,
or
(2) 10 business days (or a later date determined by the Board of
Directors) following the commencement of a tender offer or exchange
offer that would result in a person or group becoming an Acquiring
Person.
Until the Distribution Date,
(a) the Marathon Rights will be evidenced by the certificates representing
shares of Marathon Stock and the Steel Rights will be evidenced by the
certificates representing shares of Steel Stock and such Rights will
be transferred with and only with such certificates,
(b) new Marathon Stock and Steel Stock certificates issued after October
9, 1999 will contain a notation incorporating the Rights Agreement by
reference and
(c) the surrender for transfer of any certificates for Marathon Stock
outstanding will also constitute the transfer of the Marathon Rights
associated with the Marathon Stock represented by such certificate and
the surrender for transfer of any certificates for Steel Stock
outstanding will also constitute the transfer of the Steel Rights
associated with the Steel Stock represented by such certificate.
The Rights are not exercisable until the Distribution Date and will expire
at the close of business on October 9, 2009, unless this date is extended or the
Rights are earlier redeemed or exchanged by USX as described below. In the
Rights Agreement, USX reserves the right to require prior to the occurrence of a
Triggering
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24
Event (discussed below) that, when Rights are exercised, a number of Rights be
exercised so that only whole shares (or fractions which are integral multiples
of one one-hundredth of a share) of Series A Junior Preferred Stock will be
issued.
As soon as practicable after the Distribution Date, Certificates for
Marathon Rights and Steel Rights will be mailed to holders of record of such
stock as of the close of business on the Distribution Date and, thereafter, the
separate Certificates for Marathon Rights alone will represent the Marathon
Rights and the separate Certificates for Steel Rights alone will represent the
Steel Rights. Except as otherwise determined by the Board of Directors, Rights
will be issued in connection with all shares of Voting Stock issued by USX,
including shares of Voting Stock issued upon the exercise of employee stock
options or the conversion of convertible securities issued after October 9, 1999
but prior to the Distribution Date.
In the event that a Person becomes an Acquiring Person, except pursuant to
a Qualifying Offer (discussed below), each holder of a Marathon Right or Steel
Right (other than the Acquiring Person and certain related parties) will
thereafter have the right to receive, upon exercise, Marathon Stock or Steel
Stock, respectively (or, in certain circumstances, cash, property or other
securities of USX) having a value equal to two times the exercise price of the
Marathon Right or Steel Right. However, Rights are not exercisable until the
Rights are no longer redeemable by USX, as discussed below. A Qualifying Offer
is an all-cash tender offer for all outstanding Marathon Stock and Steel Stock
that
(1) is fully financed,
(2) remains open for a period of at least 45 Business Days,
(3) results in the offeror owning shares of Voting Stock representing a
majority of the Voting Power as of the day immediately prior to the
date of announcement of such offer,
(4) assures a prompt second-step acquisition of shares not purchased in
the initial offer at the same price as the initial offer and
(5) meets certain other requirements.
For example, at an exercise price of $110 per Right, each Marathon Right
not owned by an Acquiring Person (or by certain related parties) following an
event set forth in the preceding paragraph would entitle its holder to purchase
$220 worth of Marathon Stock (or other consideration, as noted above), for $110.
Assuming that the Marathon Stock had a per share value of $55 at such time, the
holder of each valid Marathon Right would be entitled to purchase four shares of
Marathon Stock for $110. Similarly, holders of Steel Rights would be entitled to
purchase Steel Stock using the price of Steel Stock at the time in the above
formula.
If, at any time following the Stock Acquisition Date,
(a) USX engages in a merger or other business combination transaction in
which USX is not the surviving corporation,
(b) USX engages in a merger or other business transaction in which USX is
the surviving corporation and the Voting Stock is changed or
exchanged, or
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(c) 50% or more of USX's assets or earning power is sold or transferred,
each holder of a Right (other than Rights that previously have been voided as
discussed above) shall have the right to receive, upon exercise, common stock of
the acquiring company having a value equal to two times the exercise price of
the Right. The events discussed in this paragraph and in the paragraph above
discussing a Qualifying Offer are referred to as the Triggering Events.
Up to and including the tenth business day after the Stock Acquisition
Date (subject to extension), USX may redeem the Rights in whole, but not in
part, at a price of $.01 per Right payable in stock or cash or any other financial communications.form of
consideration deemed appropriate by the Board of Directors. This price is
referred to as the Redemption Price. Immediately upon the action of the Board of
Directors ordering redemption of the Rights, the Rights will terminate and the
only right of the holders of Rights will be to receive the Redemption Price.
The consolidated financial statementsBoard of Directors may, at its option, at any time after any Person
becomes an Acquiring Person, exchange all or part of the outstanding and
exercisable Marathon Rights (other than Rights held by the Acquiring Person and
certain related parties) for shares of Marathon Stock at an exchange ratio of
one share of Marathon Stock per Marathon Right (subject to certain anti-dilution
adjustments) and exchange all or part of the outstanding and exercisable Steel
Rights (other than Rights held by the Acquiring Person and certain related
parties) for shares of Steel Stock at an exchange ratio of one share of Steel
Stock per Steel Right (subject to certain anti-dilution adjustments). However,
the Board of Directors may not effect such an exchange at any time any Person or
group owns Voting Stock representing 50% or more of the Voting Power of USX then
outstanding. Immediately after the Board of Directors orders such an exchange,
the right to exercise the Marathon Rights and Steel Rights shall terminate and
the holders of Marathon Rights shall only be entitled to receive shares of
Marathon Stock at the applicable exchange ratio and the holders of Steel Rights
shall only be entitled to receive shares of Steel Stock at the applicable
exchange ratio.
Until a Right is exercised, the holder will have no rights as a
stockholder of USX, including, without limitation, the right to vote or to
receive dividends. While the distribution of the Rights will not be taxable to
stockholders or to USX, stockholders may, depending upon the circumstances,
recognize taxable income in the event that the Marathon Rights become
exercisable for Marathon Stock (or other consideration) of USX or for common
stock of the acquiring company as discussed above and the Steel Rights become
exercisable for Steel Stock (or other consideration) of USX or for common stock
of the acquiring company as discussed above.
Any of the provisions of the Rights Agreement may be amended by the Board
of Directors prior to the Distribution Date. After the Distribution Date, the
provisions of the Rights Agreement may be amended by the Board of Directors in
order to cure any ambiguity, to make changes which do not adversely affect the
interests of holders of Rights, or to shorten or lengthen any time period under
the Rights Agreement. No amendment may be made when the Rights are supplementednot
redeemable.
On October 9, 1999, each share of Marathon Stock outstanding received one
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Marathon Right and each share of Steel Stock outstanding received one Steel
Right. So long as the Rights are attached to the Voting Stock of USX, additional
Rights shall be deemed to be delivered with Voting Stock issued or transferred
by USX in the future. Following the Distribution Date (when the Rights have
separated from the Voting Stock) and prior to the expiration or redemption of
the Rights, USX may issue Rights
(1) when it issues Voting Stock only if the Board deems it to be necessary
or appropriate, or
(2) in connection with the issuance of shares of Voting Stock
(a) pursuant to the exercise of stock options or
(b) under employee plans or
(c) upon the exercise, conversion or exchange of certain securities
of USX.
Eight million shares of Series A Junior Preferred Stock are reserved for
issuance upon exercise of the Rights.
The Rights may have certain anti-takeover effects. The Rights will cause
substantial dilution to a person or group that attempts to acquire USX in a
manner which causes the Rights to become discount Rights unless the offer is
conditional on a substantial number of Rights being acquired. The Rights,
however, should not affect any prospective offeror willing to make an offer at a
price that is fair and not inadequate and otherwise in the best interest of USX
and its stockholders. The Rights should not interfere with any merger or other
business combination approved by the Board of Directors since the Board of
Directors may, at its option, at any time until ten days following the Stock
Acquisition Date redeem all but not less than all of the then outstanding Rights
at the Redemption Price.
SPECIAL CONSIDERATIONS
The following discussion explains special factors arising from a capital
structure with separate classes of common stock that should be considered in
making an investment in the Marathon Stock or Steel Stock.
STOCKHOLDERS OF ONE COMPANY: FINANCIAL IMPACTS FROM ONE GROUP COULD AFFECT THE
OTHER GROUP
You will be a stockholder of one company. Financial impacts from one group
could adversely affect the other group. The financial statements of the Marathon
Group and the U.S.U. S. Steel Group together withseparately report the related Management's Discussion and Analyses,
descriptions of business and other financial and business information to the
extent such information is required to be presented in the report being filed.
The financial information of the Marathon Group and the U.S. Steel Group and
certain financial information relating to the Delhi Group, taken together,
includes all accounts which comprise the corresponding consolidated financial
information of USX.
For consolidated financial reporting purposes, USX's reportable industry
segments correspond with its two Groups. The attribution of assets, liabilities
(including contingent liabilities) and stockholders' equity among the Marathon
Group and the U.S. Steel Groupof USX attributed to
each group. This attribution for the purpose of preparing their respectivethe financial
statements for each group does not affect legal title to such assets or
responsibility for such liabilities. Holders of Marathon Stock and Steel Stock
are holders of common stock of USX and continue to be subject to all of the
risks associated with an investment in USX and all of its businesses and
liabilities. Financial impacts arising from either of the Groups which affect
the overall cost of USX's capital could affect the results of operations and
financial condition of both Groups. In addition, net losses of either Group, as
well as dividends and distributions on either class of USX common stock or
series of any preferred stock and repurchases of either class of USX common
stock or any series of preferred stock at prices in excess of par or stated
value, will reduce funds of USX legally available for payment of dividends on
both classes of USX common stock. Accordingly, the USX consolidated financial
information should be read in connection with the Marathon Group and the U.S.
Steel Group financial information.
USX was incorporated in 1901 and is a Delaware corporation. Its executive
offices are located at 600 Grant St., Pittsburgh, PA 15219-4776 (tel:
412-433-1121).
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5
RATIO OF EARNINGS TO FIXED CHARGES
AND RATIO OF EARNINGS TO COMBINED
FIXED CHARGES AND PREFERRED STOCK DIVIDENDS
(UNAUDITED)
CONTINUING OPERATIONS
THREE MONTHS
ENDED
MARCH 31 YEAR ENDED DECEMBER 31
------------ ------------------------------------
1998 1997 1996 1995 1994 1993
---- ---- ---- ---- ---- ----
Ratio of earnings to fixed charges......... 4.95 4.11 3.90 1.62 2.18 (a)
==== === === ==== ==== ====
Ratio of earnings to combined fixed charges
and preferred stock dividends............ 4.77 3.92 3.62 1.49 2.01 (b)
==== === === ==== ==== ====
- ---------
(a) Earnings did not cover fixed charges by $312 million for 1993.
(b) Earnings did not cover combined fixed charges and preferred stock dividends
by $356 million for 1993.
USE OF PROCEEDS
Unless otherwise indicated in the applicable Prospectus Supplement, USX
intends to use the net proceeds from the sale of the Offered Securities for
general corporate purposes, including, without limitation, the refunding of
outstanding long-term indebtedness and other financial obligations, interest
rate management, leveling of its debt maturity schedule, the financing and
re-financing of acquisitions, purchases of Common Stock capital expenditures,
investments in subsidiaries and joint ventures, and working capital.
SPECIAL CONSIDERATIONS
CONSIDERATIONS RELATING TO COMMON STOCK
Stockholders of One Company; Financial Impacts from One Group Could Affect the
other Group
Although the financial statements of the Marathon Group and the U.S. Steel
Group separately report the assets, liabilities (including contingent
liabilities) and stockholders' equity of USX attributed to each such Group, such
attribution of assets, liabilities (including contingent liabilities) and
stockholders' equity between the Marathon Group and the U.S. Steel Group for the
purpose of preparing their respective financial statements does not affect legal
title to such assets or responsibility for such liabilities. Holders of Marathon
Stock and Steel Stock are holders of common stock of USX, and continue to be subject to all of the
risks associated with an investment in USX and all of its businesses and
liabilities.
Financial impacts arising from one Groupgroup that affect the overall cost of
USX's capital could affect the results of operations and financial condition of
the other Group.group. In addition, net losses of either Group,group, as well as dividends
and distributions on either class of USX common stockCommon Stock or any series of Preferred
Stock and repurchases of either class of USX common
stockCommon Stock or any series of Preferred
Stock, will reduce the funds of USX legally available for payment of dividends on the
Common Stock of both Groups.groups.
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Accordingly, you are urged to read the USX consolidated financial
information should be read in connection with the Groupgroup financial information.
USX prepares and provides
consolidated financial statements, as well as financial statements of each
Group, to the holders of the respective classes of Common Stock. See "Management
and Accounting Policies."
No Rights or Additional Duties With Respect to the Groups; Potential ConflictsNO RIGHTS OR ADDITIONAL DUTIES WITH RESPECT TO THE GROUPS; POTENTIAL
CONFLICTS
Holders of Marathon Stock and Steel Stock have only the rights of
stockholders of USX, and, except as described under "Description of Capital
Stock--Marathon Stock--Exchange and Redemption" and "--Voting" and under
"Description of Capital Stock--Steel Stock--Exchange and Redemption" and
"--Voting,"the Common
Stock" (beginning on page 17), holders of Common Stock are not provided any
rights specifically related to either Group. In addition,
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6
principlesgroup.
The existence of separate classes of Common Stock may give rise to
occasions when the interests of holders of Marathon Stock and Steel Stock may
diverge or appear to diverge. Examples include:
-- the optional exchange of the Steel Stock for the Marathon Stock at
the 10% premium;
-- the determination of the record date of any such exchange or for the
redemption of any Steel Stock;
-- the establishing of the date for public announcement of the
liquidation of USX;
-- the commitment of capital between the Marathon Group and the U. S.
Steel Group; and
-- the payment of dividends on one or both classes of Common Stock.
USX is not aware of any precedent involving the fiduciary duties of
directors of corporations having classes of common stock or separate classes or
series of capital stock, the rights of which are defined by reference to
specified operations of the corporation.
Principles of Delaware law established in cases involving differing
treatment of classes of capital stock or groups of holders of the same class of
capital stock provide that a board of directors owes an equal duty to all
stockholders regardless of class or series and does not have separate or
additional duties to any group of stockholders. The existence of separate classes of Common Stock may give rise to
occasions when the interests of holders of Marathon Stock and Steel Stock may
diverge or appear to diverge. Examples include the optional exchange of the
Steel Stock for Marathon Stock at the 10% premium; the determination of the
record date of any such exchange or for the redemption of any Steel Stock; the
establishing of the date for public announcement of the liquidation of USX; and
the commitment of capital between the Marathon Group and the U.S. Steel Group.
USX is not aware of any precedent involving the fiduciary duties of directors of
corporations having classes of common stock or separate classes or series of
capital stock the rights of which are defined by reference to specified
operations of the corporation. However, under theUnder these principles of
Delaware law
referred to above and the "business judgment rule," absent abuse of discretion, a
good faith determination made by a disinterested and adequately informed USX
Board of Directors (the "Board") with respect to any matter having disparate impacts upon
holders of Marathon Stock and holders of Steel Stock would be a defense to any
challenge to such determination made by or on behalf of the holders of either
class of Common Stock.
Because the Board owes an equal duty to all stockholders regardless of
class, the Board is the appropriate body to deal with these matters. In order to
assist the Board in this regard, USX has formulated policies to serve as
guidelines for the resolution of matters involving a conflict or a potential
conflict, including policies dealing with
-- the payment of dividends,
-- limiting capital investment in the U. S. Steel Group over the long
term to its internally generated cash flow, and
-- allocation of corporate expenses and other matters. See
"Management and Accounting Policies."
The Board has been advised concerning the applicable law relating to the
discharge of its fiduciary duties to the common stockholders in the context of
the separate classes of Common Stock and has delegated to the Audit Committee of
the Board the responsibility to review matters which relate to this subject and
report to the Board.
Limited Separate Voting Rights26
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LIMITED SEPARATE VOTING RIGHTS
Holders of shares of Marathon Stock and Steel Stock vote together as a
single class on all matters as to which all USX common stockholders are entitled
to vote. Holders of Marathon Stock and Steel Stock will have no rights to vote
on matters as a separate Groupgroup except as described under "Description of Capital
Stock--Marathon Stock--Voting" and under "Description of Capital Stock--Steel
Stock--Voting""USX Common Stock" and
in certain limited circumstances as currently provided under Delaware law.
Separate meetings for the holders of each class of Common Stock will not be
held.
Accordingly, subject to certain exceptions, holders of shares of Marathon
Stock or shares of Steel Stock cannot bring a proposal to a vote of the holders
of Marathon Stock or holders of Steel Stock only, but are required to bring any
proposal to a vote of all holders of capital stock of USX entitled to vote
generally voting together as a single class.
The interests of the holders of the Marathon Stock and Steel Stock may
diverge or appear to diverge with respect to certain matters as to which such
holders are entitled to vote.
If, whenWhen a stockholder vote is taken on any matter as to which a separate vote
by any class would not be required, under the USX
Corporation Restated Certificate of Incorporation, as amended from time to time
(the "Certificate of Incorporation"), or Delaware law, the holders of one class of Common Stock
wouldcould have more than the number of votes required to approve any
suchthe matter the holders of that class would be in a position toand
could control the outcome of the vote on such matter.vote.
The Restated Certificate of Incorporation provides that neither the
increase nor the decrease of the authorized number of shares of either class of
Common Stock requires a separate vote of either such class. Thus, it is possible
that the holders of a majority of either class of Common Stock could constitute
a majority of the voting power of both classes of Common Stock and approve the
increase or decrease of the authorized amount of the other class of Common Stock
without the approval of the holders of such other class of Common Stock.
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7
On all matters where the holders of Common Stock vote together as a single
class, a share of Marathon Stock will have one vote and each share of Steel
Stock will have a fluctuating vote per share based on time-weighted average
ratios of their Market Values (See "Description of Capital Stock").Values.
Assuming that the time-weighted averages of the Market Values of Marathon
Stock and Steel Stock were $33$27 and $32,$25, respectively, the per share voting
rights of Marathon Stock and Steel Stock would be one vote and 0.970.926 votes per
share, respectively. If the Marathon Stock and the Steel Stock had such per sharethose voting
rights as of AprilSeptember 30, 1998,1999, the holders of Marathon Stock and Steel Stock
would have approximately 77%79% and 23%21%, respectively, of the total voting power of
USX.
Management and Accounting Policies Subject to Change
Since 1991, USX has applied certain management and accounting policies
adopted by the Board and described herein, which policies may be modified or
rescinded in the sole discretion of the Board without approval of stockholders,
although the Board has no present intention to do so. See "Management and
Accounting Policies." The Board may also adopt additional policies depending
upon the circumstances. Any determination of the Board to modify or rescind such
policies, or to adopt additional policies, including any such decision that
would have disparate impacts upon holders of Marathon Stock or Steel Stock,
would be made by the Board in good faith and in the honest belief that such
decision is in the best interests of all stockholders of USX. In addition,
generally accepted accounting principles require that any change in accounting
policy be preferable (in accordance with such principles) to the policy
previously established.
Limitations on Potential Unsolicited AcquisitionsLIMITATIONS ON POTENTIAL UNSOLICITED ACQUISITIONS
If the Marathon Group and the U.S.U. S. Steel Group were separate companies,
any person interested in acquiring one of them without negotiationnegotiating with
management could seek to obtain control of it by means of a tender offer or
proxy contest. Because each Groupgroup is not a separate company, any person
interested in acquiring only one Groupgroup without negotiationnegotiating with USX management
would be required to seek control of the voting power representing all of the
outstanding capital stock of USX entitled to vote on such acquisition. See
"Limited Separate Voting Rights" above.above (this page).
Because of fluctuations in the relative Market Values of shares of the
classes of Common Stock, the voting power of a
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particular stockholder may be increased or decreased from that held at the time
the stockholder acquired the stock or from that held at the time of the previous
vote. The fluctuating voting powers of the classes of Common Stock may influence
a purchaser interested in acquiring and maintaining control of USX to acquire
equivalent holdings in both classes of Common Stock.
Dividends and Earnings Per ShareDIVIDENDS AND EARNINGS PER SHARE
The Board intends to declare and pay dividends on the Marathon Stock and
Steel Stock based on the financial condition and results of operations of the
respective Group, although it has no obligation under Delaware law to do so.group. Subject to any prior rights of the holders of Preferred Stock:
(a) dividends on Marathon Stock will be payable out of legally available
funds of USX (as defined under Delaware law); and
(b) dividends on Steel Stock will be payable out of the lesser of
(i)(1) the Available Steel Dividend Amount and
(ii)(2) legally available funds.
In making its dividend decisions, the Board will rely on the financial
statements of each Group.group. In determining its dividend policy, the Board will
consider, among other things, the long-term earnings and cash flow capabilities
of each Group,group, as well as the dividend policies of similar publicly traded
companies.
The method of calculating earnings per share for the Marathon Stock and
the Steel Stock reflects the Board's intent that the separately reported
earnings and surplus of the Marathon Group and the U.S.U. S. Steel Group as
determined consistent with the Restated Certificate of Incorporation, are
available for payment of dividends to the respective classes of stock, although
legally available funds and liquidation preferences of these classes of stock do
not necessarily correspond with these amounts.
DividendsDelaware law requires that dividends on all classes of Preferred Stock and
Common Stock arebe limited to legally available funds of USX, which areis determined
on the basis of the entire Corporation.
DistributionDistributions on the Marathon Stock and the Steel Stock would be precluded
by a failureif USX failed to pay
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8 dividends on any series of Preferred Stock. Net losses of
either Groupgroup as well as dividends and distributions on either class of Common
Stock or any series of Preferred Stock and repurchases of either class of Common
Stock or any series of Preferred Stock, will reduce the funds of USX legally
available for payment of dividends on both classes of Common Stock.
Under Delaware law, a corporation may declare and pay dividends on its
capital stock either
(1) out of its surplus or
(2) in case there is no surplus, out of its net profits for the year in
which the dividend is declared and/or the preceding fiscal year.
"Surplus" is the amount by which the total assets of the corporation
exceed total liabilities and capital.
Capital for USX is the sum of
(a) the aggregate par value of the outstanding shares of Common Stock
(equal to $1 per share) and
(b) the aggregate stated capital of the outstanding shares of 6.50%
Convertible Preferred Stock ($1 per share).
If the capital of a corporation is diminished by depreciation in the value
of its properties, or by losses, or otherwise, to an amount less than the
aggregate amount
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of capital represented by the outstanding stock of all classes having a
preference upon the distribution of assets, dividends may not be paid out of net
profits (that is pursuant to clause (2) above) until the deficiency in capital
shall have been repaired.
For purposes of determining surplus, the assets and liabilities of a
corporation are to be valued on the basis of market value.
Potential Effects of Exchange and Redemption of Common StockPOTENTIAL EFFECTS OF EXCHANGE AND REDEMPTION OF COMMON STOCK
Under various conditions, the Steel Stock may be exchanged at USX's option
for shares of Marathon Stock at a 10% premium. Any exchange of Steel Stock for
Marathon Stock would preclude holders of Steel Stock from retaining their
investment in a security reflecting USX's steel and other businesses that
constitute the U.S. Steel Group. See "Description of Capital Stock--Steel
Stock--Exchange and Redemption."business.
MANAGEMENT AND ACCOUNTING POLICIES
MANAGEMENT POLICIES
The Board has adopted certain policies with respect to the Marathon Group
and the U.S.U. S. Steel Group including, without limitation, the intention to:
(i)(1) limit capital expenditures of the U.S.U. S. Steel Group over the long term
to an amount equal to the internally generated cash flow of the U.S.
Steel Group, including funds generated by sales of assets of the U.S.U. S.
Steel Group,
(ii)(2) sell assets and provide services between the groups only on an
arm's-length basis, and
(iii)(3) treat funds generated by sale of Marathon Stock and Steel Stock and
securities convertible into such stock as assets of the respective
Group and
apply such funds to acquire assets or reduce liabilities of the Marathon Group
or the U.S. Steel Group, respectively, as the case may be.
The above policies may be modified or rescinded in the sole discretion of
the Board without approval of the stockholders, although the Board has no
present intention to do so. The Board may also adopt additional policies
depending upon the circumstances. Any determination of the Board to modify or
rescind such policies, or to adopt additional policies, including any such
decision that would have disparate impacts upon holders of the separate classes
of Common Stock, would be made by the Board in good faith and in the honest
belief that such decision is in the best interest of all stockholders of USX.group.
ACCOUNTING MATTERS AND POLICIES
USX prepares theThe Marathon Group and the U.S.U. S. Steel Group financial statements are
prepared in accordance with generally accepted accounting principles, and these
financial statements, (and certain financial information relating to the
Delhi Group), taken together, comprise all of the accounts included in
the corresponding consolidated financial statements of USX.
The financial statements of the Marathon Group and the U.S.U. S. Steel Group
principally reflect the financial position and results of operations of the
businesses included therein.in the group.
Consistent with the Restated Certificate of Incorporation and related
policies, such group financial statements also include portions of USX's corporate
assets and liabilities (including contingent liabilities). Principal corporate
activities attributed to the groups and reflected in their financial statements
include financial activities, corporate general and administrative costs, common
stock transactions and income taxes.
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The aboveMANAGEMENT AND ACCOUNTING POLICIES SUBJECT TO CHANGE
These policies may be modified or rescinded in the sole discretion of the
Board without approval of the stockholders, although the Board hasthere is no present intention
to do so.
The Board may also adopt additional policies depending upon the
circumstances. Any determination of the Board to modify or rescind such
policies, or to adopt additional policies, including any such
decision that would
have disparate impacts upon holders of the separate classes
of CommonMarathon Stock or Steel Stock, would be
made by the Board in good faith
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and in the honest belief that such decision is in the best interestinterests of all
stockholders of USX. In addition, generally accepted accounting principles
require that any change in an
accounting policy be preferable (in accordance with such principles) to the previous
policy.
DESCRIPTION OF THE DEBT SECURITIES
The Debt Securities will be general unsecured obligations of USX and will
rank pari passu with the other general unsecured obligations of USX. The Debt
Securities will be issued under an Indenture, dated as of March 15, 1993,
between PNC Bank, National Association (the "Trustee") and USX (the
"Indenture"). A copy of the Indenture is filed as an exhibit to the Registration
Statement. The following summaries of certain provisions of the Indenture do not
purport to be complete and are qualified in their entirety by reference to the
provisions of the Indenture, which are incorporated by reference herein. Certain
capitalized terms used herein are defined in the Indenture. The Section numbers
referred to in the following summaries are references to relevant sections of
the Indenture.
GENERAL
The Indenture does not limit the principal amount of Debt Securities or
other indebtedness which may be issued thereunder from time to time by USX and
USX may in the future issue additional Debt Securities (in addition to those
offered hereby) under the Indenture. As of April 30, 1998, an aggregate
principal amount of $1.4 billion of Debt Securities had been issued, and were
outstanding under, the Indenture.
The Debt Securities of any Series may be issued in definitive form or, if
provided in the Prospectus Supplement relating thereto, may be represented in
whole or in part by a Global Security or Securities, registered in the name of a
Depositary designated by USX. Each Debt Security represented by a Global
Security is referred to herein as a "Book-Entry Security."
Debt Securities may be issued from time to time pursuant to this Prospectus
in an aggregate principal amount or initial public offering price of up to
$1,542,569,300 or the equivalent thereof in foreign denominated currency or
units based on or relating to foreign denominated currencies, including European
Currency Units ("ECU"), and will be offered independently or together on terms
determined by market conditions at the time of sale. The Debt Securities may be
issued in one or more series with the same or various maturities and may be sold
at par, a premium or an original issue discount. Debt Securities sold at an
original issue discount may bear no interest or interest at a rate which is
below market rates.
Reference is made to the Prospectus Supplement for the specific terms of
the Debt Securities offered hereby, including the following (to the extent
applicable to a particular series of Debt Securities): (i) designation,
aggregate principal amount, purchase price (expressed as a percentage of the
principal amount thereof), and denomination; (ii) date of maturity; (iii) if
other than currency of the United States, the currency or units based on or
relating to currencies for which Debt Securities may be purchased and in which
principal and any premium or interest will or may be payable; (iv) interest rate
or rates (or the manner of calculation thereof), if any; (v) the times at which
any such interest will be payable; (vi) the place or places where principal and
any premium and interest will be payable; (vii) any redemption or sinking fund
provisions or other repayment obligations and any remarketing arrangements
related thereto; (viii) any index used to determine the amount of payment of
principal of and any premium and interest on the Debt Securities; (ix) the
application, if any, of the defeasance provisions to the Debt Securities; (x) if
other than the principal amount thereof, the portion of the principal amount of
the Debt Securities which shall be payable upon declaration of acceleration of
the maturity thereof; (xi) if other than 100% of the principal amount thereof
plus accrued interest, the Change in Control Purchase Price or Prices applicable
to purchases of Debt Securities upon the occurrence of a Change in Control;
(xii) whether the Debt Securities will be issued in
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whole or in part in the form of one or more Global Securities and, in such case,
the Depositary for such Global Securities; and (xiii) any other specific terms
of the Debt Securities, including any terms which may be required by or
advisable under United States laws or regulations.
Except with respect to Book-Entry Securities, Debt Securities may be
presented for exchange or registration of transfer, in the manner, at the places
and subject to the restrictions set forth in the Debt Securities and the
Prospectus Supplement. Such services will be provided without charge, other than
any tax or other governmental charge payable in connection therewith, but
subject to the limitations provided in the Indenture. For a description of
payments of principal of and any premium and interest on, and transfer of,
Book-Entry Securities, and exchanges of Global Securities representing
Book-Entry Securities, see "Book-Entry Securities" hereunder.
CERTAIN COVENANTS OF USX
Creation of Certain Liens
If USX or any Subsidiary of USX shall mortgage, pledge, encumber or subject
to a lien (hereinafter to "Mortgage" or a "Mortgage," as the context may
require) as security for any indebtedness for money borrowed (i) any blast
furnace facility or raw steel producing facility, or rolling mills which are a
part of a plant which includes such a facility, or (ii) any property capable of
producing oil or gas; and which, in either case, is located in the United States
and is determined to be a principal property by the Board of Directors of USX in
its discretion, USX will secure or will cause such Subsidiary to secure each
Series of the Debt Securities equally and ratably with all indebtedness or
obligations secured by the Mortgage then being given and with any other
indebtedness of USX or such Subsidiary then entitled thereto; provided, however,
that this covenant shall not apply in the case of: (a) any Mortgage existing on
the date of the Indenture (whether or not such Mortgage includes an
after-acquired property provision); (b) any Mortgage, including a purchase money
Mortgage, incurred in connection with the acquisition of any property (any
Mortgage incurred within 180 days after such acquisition or the completion of
construction shall be deemed to be in connection with such acquisition), the
assumption of any Mortgage previously existing on such acquired property or any
Mortgage existing on the property of any corporation when it becomes a
Subsidiary of USX; (c) any Mortgage on such property in favor of the United
States, or any State, or instrumentality of either, to secure partial, progress
or advance payments to USX or any Subsidiary of USX pursuant to the provisions
of any contract or any statute; (d) any Mortgage on such property in favor of
the United States, any State, or instrumentality of either, to secure borrowings
for the purchase or construction of the property Mortgaged; (e) any Mortgage in
connection with a sale or other transfer of oil or gas in place for a period of
time or in an amount such that the purchaser will realize therefrom a specified
amount of money or specified amount of minerals or any interest in property of
the character commonly referred to as an "oil payment" or "production payment";
(f) any Mortgage on any property arising in connection with or to secure all or
any part of the cost of the repair, construction, improvement, alteration,
exploration, development or drilling of such property or any portion thereof;
(g) any Mortgage on any pipeline, gathering system, pumping or compressor
station, pipeline storage facility, other pipeline facility, drilling equipment,
drilling platform, drilling barge, any movable railway, marine or automotive
equipment, gas plant, office building, storage tank, or warehouse facility, any
of which is located on any property included under clause (ii) above; (h) any
Mortgage on any equipment or other personal property used in connection with any
property included under clause (ii) above; (i) any Mortgage on any property
included under clause (ii) above arising in connection with the sale of accounts
receivable resulting from the sale of oil or gas at the wellhead; or (j) any
renewal of or substitution for any Mortgage permitted under the preceding
clauses. Notwithstanding the foregoing, USX may and may permit its Subsidiaries
to grant Mortgages or incur liens on property covered by the restriction
described above so long as the net book value of the property so encumbered,
together with all property subject to the restriction on certain sale and
leasebacks described below, does not at the time such Mortgage or lien is
granted exceed five percent (5%) of Consolidated Net Tangible Assets, (as such
term is defined in the Indenture). (Section 4.03)
"Consolidated Net Tangible Assets" means the aggregate value of all assets
of USX and its subsidiaries after deducting therefrom (a) all current
liabilities (excluding all long-term debt due within one year), (b) all
investments in unconsolidated subsidiaries and all investments accounted for on
the equity basis and (c) all
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goodwill, patent and trademarks, unamortized debt discount and other similar
intangibles (all determined in conformity with generally accepted accounting
principles and calculated on a basis consistent with USX's most recent audited
consolidated financial statements). (Section 1.01)
As of the date of this Prospectus, neither USX nor any subsidiary of USX
has any property referred to in either clause (i) or (ii) above and in the
following subsection "Limitations on Certain Sales and Leasebacks" which has
been determined by the Board of Directors of USX to be a principal property.
Limitations on Certain Sale and Leasebacks
USX will not, nor will it permit any Subsidiary to, sell or transfer (i)
any blast furnace facility or raw steel producing facility, or rolling mills
which are a part of a plant which includes such a facility, or (ii) any property
capable of producing oil or gas; and which, in either case, is located in the
United States and is determined to be a principal property by the Board of
Directors of USX in its discretion, with the intention of taking back a lease
thereof, provided, however, this covenant shall not apply if (a) the lease is to
a Subsidiary (or to USX in the case of a Subsidiary); (b) the lease is for a
temporary period by the end of which it is intended that the use of the property
by the lessee will be discontinued; (c) USX or a Subsidiary could, in accordance
with Section 4.03, heretofore described, Mortgage such property without equally
and ratably securing the Debt Securities; (d) the transfer is incident to or
necessary to effect any operating, farm out, farm in, unitization, acreage
exchange, acreage contributions, bottom hole or dry hole arrangements or pooling
agreement or any other agreement of the same general nature relating to the
acquisition, exploration, maintenance, development and operation of oil and gas
properties in the ordinary course of business or as required by regulatory
agencies having jurisdiction over the property; or (e) USX promptly informs the
Trustee of such sale, the net proceeds of such sale are at least equal to the
fair value (as determined by resolution adopted by the Board of Directors of
USX) of such property and USX within 180 days after such sale applies an amount
equal to such net proceeds (subject to reduction by reason of credits to which
USX is entitled, under the conditions specified in the Indenture) to the
retirement or in substance defeasance of funded debt of USX or a Subsidiary.
(Section 4.04)
Merger and Consolidation
USX will not merge or consolidate with any other corporation or sell or
convey all or substantially all of its assets to any person, firm or
corporation, except that USX may merge or consolidate with, or sell or convey
all or substantially all of its assets to, any other corporation, provided that
(i) USX shall be the continuing corporation or the successor corporation (if
other than USX, as the case may be) shall be a corporation organized and
existing under the laws of the United States of America or a State thereof and
such corporation shall expressly assume the due and punctual payment of the
principal of and any premium and interest on all the Debt Securities, according
to their tenor, and the due and punctual performance and observance of all of
the covenants and conditions of the Indenture to be performed by USX and (ii)
USX or such successor corporation, as the case may be, shall not, immediately
after such merger, consolidation, sale or conveyance, be in default in the
performance of any such covenant or condition and no event which with the lapse
of time, the giving of notice or both would constitute an Event of Default shall
have occurred and be continuing. (Section 11.01)
If upon any consolidation or merger of USX with or into any other
corporation, or upon any sale or conveyance of substantially all of the
properties of USX, or upon any acquisition by USX of all or any part of the
property of another corporation, any property owned immediately prior thereto
would thereupon become subject to any mortgage, lien, pledge, charge or
encumbrance, USX, prior to such event, will secure the Debt Securities (equally
and ratably with any other indebtedness of USX secured thereby) by a lien on all
of such property of USX, prior to all liens, charges and encumbrances other than
any theretofore existing thereon. (Section 11.03)
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PURCHASE OF DEBT SECURITIES UPON A CHANGE IN CONTROL
In the event of any Change in Control (as defined below) of USX, each
holder of Debt Securities will have the right, at that holder's option, subject
to the terms and conditions of the Indenture, to require USX to become obligated
to purchase all of that holder's Debt Securities on the date that is 35 Business
Days after the occurrence of such Change in Control (the "Change in Control
Purchase Date") at a cash price equal to (i) unless otherwise specified in the
terms of such Debt Securities, 100% of the principal amount thereof, together
with accrued interest to such Change in Control Purchase Date (except that
interest installments due prior to such Change in Control Purchase Date will be
payable to the holders of such Debt Securities of record at the close of
business on the relevant record dates according to their terms and the
provisions of the Indenture), or (ii) such other price or prices as may be
specified in the terms of such Debt Securities (the "Change in Control Purchase
Prices"). (Section 4.07)
Within 15 Business Days after a Change in Control, USX is obligated to mail
to the Trustee and to all holders of Debt Securities of any Series at their
addresses shown in the Debt Security register (and to beneficial owners as
required by applicable law) a notice regarding the Change in Control, stating,
among other things: (i) the last date on which the Change in Control purchase
right may be exercised, (ii) the Change in Control Purchase Price, (iii) the
Change in Control Purchase Date, (iv) the name and address of the Paying Agent,
and (v) the procedures that holders must follow to exercise these rights. USX
will cause a copy of such notice to be published in a daily newspaper of
national circulation. (Section 4.07)
To exercise this right, a holder of Debt Securities of any Series must
deliver a Change in Control Purchase Notice to the Paying Agent for that Series
at its address set forth in USX's notice regarding the Change in Control at any
time prior to the close of business on the Change in Control Purchase Date. The
Change in Control Purchase Notice shall state (i) the certificate numbers of the
Debt Securities to be delivered by the holder thereof for purchase by USX and
(ii) that such Debt Securities are to be purchased by USX pursuant to the
applicable provisions of the Debt Securities and USX's notice regarding the
Change in Control. (Section 4.07)
Upon receipt by USX of the Change in Control Purchase Notice, the holder of
the Debt Security in respect of which such notice was given shall (unless such
notice is withdrawn as specified in the Indenture) thereafter be entitled to
receive solely the Change in Control Purchase Price with respect to such Debt
Security. Any Change in Control Purchase Notice may be withdrawn by the holder
of Debt Securities of any Series by a written notice of withdrawal delivered to
the Paying Agent for that Series at any time prior to the close of business on
the Change in Control Purchase Date. The notice of withdrawal shall state the
certificate numbers of the Debt Securities as to which the withdrawal notice
relates. (Section 4.08)
Payment of the Change in Control Purchase Price for a Debt Security of any
Series for which a Change in Control Purchase Notice has been delivered and not
withdrawn is conditioned upon delivery of such Debt Security (together with
necessary endorsements) to the Paying Agent for that Series at its address set
forth in USX's notice regarding the Change in Control, at any time (whether
prior to, on or after the Change in Control Purchase Date) after the delivery of
such Change in Control Purchase Notice. (Section 4.07) Payment of the Change in
Control Purchase Price for such Debt Security will be made promptly following
the later of the Change in Control Purchase Date or the time of delivery of such
Debt Security. (Section 4.08)
Under the Indenture, a "Change in Control" of USX is deemed to have
occurred at such time as (i) any "person" or "group" of persons (excluding USX,
any Subsidiary, any employee stock ownership plan or any other employee benefit
plan of USX) shall have acquired "beneficial ownership" (within the meaning of
Section 13(d) or 14(d) of the Exchange Act and the applicable rules and
regulations thereunder) of shares of Voting Stock representing at least 35% of
the outstanding Voting Power of USX, (ii) during any period of twenty-five
consecutive months, commencing before or after the date of the Indenture,
individuals who at the beginning of such twenty-five month period were directors
of USX (together with any replacement or additional directors whose election was
recommended by incumbent management of USX or who were elected by a majority of
directors then in office) cease to constitute a majority of the board of
directors of USX, or (iii) any person or group of related persons shall acquire
all or substantially all of the assets of USX; provided, that a Change in
Control shall not be deemed to have occurred pursuant to clause (iii) above if
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USX shall have merged or consolidated with or transferred all or substantially
all of its assets to another corporation in compliance with the provisions of
Section 11.01 of the Indenture (relating to when USX may merge or transfer
assets) and the surviving or successor or transferee corporation is no more
leveraged than was USX immediately prior to such event. For purposes of this
definition, the term "leveraged" when used with respect to any corporation shall
mean the percentage represented by the total assets of that corporation divided
by its stockholders' equity, in each case determined and as would be shown in a
consolidated balance sheet of such corporation prepared in accordance with
generally accepted accounting principles in the United States of America. The
term "substantially all" in clause (iii) above has not been quantified for
purposes of defining Change in Control and, depending upon the factual
circumstances, there may be uncertainty as to when a Change in Control has
occurred for purposes of determining the rights of holders of Debt Securities
pursuant to this provision.
Notwithstanding the foregoing, a Change in Control will not be deemed to
have occurred by virtue of (i) USX, any Subsidiary of USX, any employee stock
ownership plan or any other employee benefit plan of USX or any such Subsidiary,
or any Person holding Voting Stock for or pursuant to the terms of any such
employee benefit plan, acquiring beneficial ownership of shares of Voting Stock,
whether representing 35% or more of the outstanding Voting Power of USX or
otherwise or (ii) any Person whose ownership of shares of Voting Stock
representing 35% or more of the outstanding Voting Power of USX results solely
from USX's calculation from time to time of the relative voting rights of
Marathon Stock and Steel Stock.
"Voting Stock" means stock of USX of any class or classes (however
designated) having ordinary voting power for the election of the directors of
USX, other than stock having such power only by reason of the happening of a
contingency. "Voting Power" means the total voting power represented by all
outstanding shares of all classes of Voting Stock. (Section 4.07)
In the event a Change in Control occurs, USX intends to comply with any
applicable securities laws or regulations, including any applicable requirements
of Rule 14e-1 under the Exchange Act. The Change in Control purchase feature of
the Debt Securities may in certain circumstances make more difficult or
discourage a takeover of USX. The Change in Control purchase feature, however,
is not the result of management's knowledge of any specific effort to accumulate
shares of Common Stock or to obtain control of USX by means of a merger, tender
offer, solicitation or otherwise, or part of a plan by management to adopt a
series of anti-takeover provisions. The Change in Control purchase feature is
similar to that contained in other debt offerings of USX as a result of
negotiations between USX and the underwriters thereof.
Except as described above, the Change in Control purchase feature does not
afford holders of the Debt Securities protection against possible adverse
effects of a reorganization, restructuring, merger or similar transaction
involving USX.
Although USX's existing indebtedness does not limit USX's ability to
purchase Debt Securities, USX's ability to purchase Debt Securities in the
future may be limited by the terms of any then existing borrowing arrangements
and by its financial resources.
EVENTS OF DEFAULT
An Event of Default with respect to Debt Securities of any Series is
defined in the Indenture as being: (i) default in the payment of the principal
of or premium, if any, on any of the Debt Securities of such Series when due and
payable; (ii) default in the payment of interest on the Debt Securities of such
Series when due, continuing for 30 days; (iii) default in the payment of the
Change in Control Purchase Price of any of the Debt Securities of such Series as
and when the same shall become due and payable; (iv) default in the deposit of
any sinking fund payment with respect to any Debt Security of such Series when
due; (v) failure by USX in the performance of any other covenant or agreement in
the Debt Securities of such Series or in the Indenture continued for a period of
90 days after notice of such failure as provided in the Indenture; (vi) certain
events of bankruptcy, insolvency, or reorganization with respect to USX; or
(vii) any other Event of Default provided with respect to Debt Securities of
that Series. (Section 6.01)
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USX is required annually to deliver to the Trustee officers' certificates
stating whether or not the signers have any knowledge of any default in the
performance by USX of certain covenants. (Section 4.06)
In case an Event of Default shall occur and be continuing with respect to
any Series, the Trustee or the holders of not less than 25% in principal amount
of the Debt Securities of such Series then outstanding may declare the Debt
Securities of such Series to be due and payable. (Section 6.01) The Trustee is
required to give holders of the Debt Securities of any Series written notice of
a default with respect to such Series as and to the extent provided by the Trust
Indenture Act. (Section 6.07)
If, however, at any time after the Debt Securities of such Series have been
declared due and payable, and before any judgment or decree for the moneys due
has been obtained or entered, USX shall pay or deposit with the Trustee amounts
sufficient to pay all matured installments of interest upon the Debt Securities
of such Series and the principal of all Debt Securities of such Series which
shall have become due, otherwise than by acceleration, together with interest on
such principal and, to the extent legally enforceable, on such overdue
installments of interest and all other amounts due under the Indenture shall
have been paid, and any and all defaults with respect to such Series under the
Indenture shall have been remedied, then the holders of a majority in aggregate
principal amount of the Debt Securities of such Series then outstanding, by
written notice to USX and the Trustee, may waive all defaults with respect to
such Series and rescind and annul the declaration that the Debt Securities of
such Series are due and payable. (Section 6.01) In addition, prior to any such
declaration that the Debt Securities of such Series are due and payable, the
holders of a majority in aggregate principal amount of the Debt Securities of
such Series may waive any past default and its consequences with respect to such
Series, except a default in the payment of the principal of or any premium or
interest on any Debt Securities of such Series. (Section 6.06)
The Trustee is under no obligation to exercise any of the rights or powers
under the Indenture at the request, order or direction of any of the holders of
Debt Securities, unless such holders shall have offered to the Trustee
reasonable security or indemnity. (Section 7.02) Subject to such provisions for
the indemnification of the Trustee and certain limitations contained in the
Indenture, the holders of a majority in aggregate principal amount of the Debt
Securities of each Series at the time outstanding shall have the right to direct
the time, method and place of conducting any proceeding for any remedy available
to the Trustee, or exercising any trust or power conferred on the Trustee, with
respect to the Debt Securities of such Series. (Section 6.06)
MODIFICATION OF THE INDENTURE
The Indenture contains provisions permitting USX and the Trustee to modify
the Indenture or enter into or modify any supplemental indenture without the
consent of the holders of the Debt Securities in regard to matters as shall not
adversely affect the interests of the holders of the Debt Securities, including,
without limitation, the following: (a) to evidence the succession of another
corporation to USX; (b) to add to the covenants of USX further covenants,
restrictions, conditions or provisions for the benefit or protection of the
holders of any or all Series of Debt Securities or to surrender any right or
power conferred upon USX by the Indenture; (c) to cure any ambiguity or to
correct or supplement any provision of the Indenture (or supplements) which may
be defective or inconsistent with any other provision in the Indenture (or
supplements); to convey, transfer, assign, mortgage or pledge any property to or
with the Trustee; or to make such other provisions in regard to matters or
questions arising under the Indenture as shall not adversely affect the
interests of the holders of the Debt Securities then outstanding; (d) to add to,
change or eliminate any of the provisions of the Indenture in respect of one or
more Series of Debt Securities thereunder, under certain conditions specified
therein; (e) to evidence the appointment of a successor trustee and to add to or
change provisions of the Indenture necessary to provide for or facilitate the
administration of the trusts under the Indenture by more than one trustee; (f)
to set forth the form and any terms of any Series of Debt Securities which USX
and the Trustee deem necessary or desirable to include in a supplemental
indenture; and (g) to add to or change any of the provisions of the Indenture to
such extent as shall be necessary or desirable to permit or facilitate the
issuance of Debt Securities in bearer form, registrable or not registrable as to
principal, and with or without interest coupons. USX and the Trustee may
otherwise modify the Indenture or any supplemental indenture with the consent of
the holders of not less than 66 2/3% in aggregate principal amount of each
Series of Debt Securities affected thereby at the time outstanding, except that
no such modifications
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shall (i) extend the fixed maturity of any Debt Securities, or reduce the
principal amount thereof or reduce the rate or extend the time of payment of any
premium or interest thereon, or change the currency in which the Debt Securities
are payable, without the consent of the holder of each Debt Security so
affected, or (ii) reduce the aforesaid percentage of Debt Securities of any
Series, the consent of the holders of which is required for any such
modifications or supplemental indenture, without the consent of the holders of
all Debt Securities affected thereby then outstanding. (Article Ten)
SATISFACTION AND DISCHARGE; DEFEASANCE AND COVENANT DEFEASANCE
The Indenture shall be satisfied and discharged if (i) USX shall deliver to
the Trustee all Debt Securities then outstanding for cancellation or (ii) all
Debt Securities shall have become due and payable or are to become due and
payable within one year and USX shall deposit an amount sufficient to pay the
principal, premium, if any, and interest to the date of maturity, provided that
in either case USX shall have paid all other sums payable under the Indenture.
(Section 12.01)
The Indenture provides, if such provision is made applicable to the Debt
Securities of a Series, that USX may elect either (A) to defease and be
discharged from any and all obligations with respect to any Debt Security of
such Series (except for the obligations to register the transfer or exchange of
such Debt Security, to replace temporary or mutilated, destroyed, lost or stolen
Debt Securities, to maintain an office or agency in respect of the Debt
Securities and to hold moneys for payment in trust) ("defeasance") or (B) to be
released from its obligations with respect to such Debt Security under Sections
4.03, 4.04, 4.07, 4.09, 11.01 and 11.03 of the Indenture (being the restrictions
described above under "Certain Covenants of USX" and USX's obligations described
under "Purchase of Debt Securities upon a Change in Control") and (ii) that
Sections 6.01(d), 6.01(e) (as to Sections 4.03, 4.04, 4.07, 4.09, 11.01 and
11.03) and 6.01(h), as described in clauses (iv), (v) and (vii) under "Events of
Default" above, shall not be deemed to be Events of Default under the Indenture
with respect to such Series ("covenant defeasance"), upon the deposit with the
Trustee (or other qualifying trustee), in trust for such purpose, of money
and/or Government Obligations (as defined) which through the payment of
principal and interest in accordance with their terms will provide money, in an
amount sufficient to pay the principal of (and premium, if any) and interest on
such Debt Security, on the scheduled due dates therefor. In the case of
defeasance, the holders of such Debt Securities are entitled to receive payments
in respect of such Debt Securities solely from such Trust. Such a trust may only
be established if, among other things, USX has delivered to the Trustee an
Opinion of Counsel (as specified in the Indenture) to the effect that the
holders of the Debt Securities affected thereby will not recognize income, gain
or loss for Federal income tax purposes as a result of such defeasance or
covenant defeasance and will be subject to Federal income tax on the same
amounts, in the same manner and at the same times as would have been the case if
such defeasance or covenant defeasance had not occurred. Such Opinion of
Counsel, in the case of defeasance under clause (A) above, must refer to and be
based upon a ruling of the Internal Revenue Service or a change in applicable
Federal income tax law occurring after the date of the Indenture. (Section
12.02)
RECORD DATES
The Indenture provides that in certain circumstances USX or the Trustee may
establish a record date for determining the holders of outstanding Debt
Securities of a Series entitled to join in the giving of notice or the taking of
other action under the Indenture by the holders of the Debt Securities of such
Series.
BOOK-ENTRY SECURITIES
The following description of Book-Entry Securities will apply to any Series
of Debt Securities issued in whole or in part in the form of a Global Security
or Securities except as otherwise provided in the Prospectus Supplement relating
thereto.
Upon issuance, all Book-Entry Securities of like tenor and having the same
date of original issue will be represented by a single Global Security. Each
Global Security representing Book-Entry Securities will be deposited with, or on
behalf of, the Depositary, which will be a clearing agent registered under the
Exchange Act. The Global Security will be registered in the name of the
Depositary or a nominee of the Depositary.
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Ownership of beneficial interest in a Global Security representing
Book-Entry Securities will be limited to institutions that have accounts with
the Depositary or its nominee ("participants") or persons that may hold
interests through participants. In addition, ownership of beneficial interests
by participants in such a Global Security will only be evidenced by, and the
transfer of that ownership interest will only be effected through, records
maintained by the Depositary or its nominee for such Global Security. Ownership
of beneficial interest in such a Global Security by persons that hold through
participants will only be evidenced by, and the transfer of that ownership
interest within such participant will only be effected through, records
maintained by such participant. The laws of some jurisdictions require that
certain purchasers of securities take physical delivery of such securities in
definitive form. Such laws may impair this ability to transfer beneficial
interests in such a Global Security.
Payment of principal of and any premium and interest on Book-Entry
Securities represented by any Global Security registered in the name of or held
by the Depositary or its nominee will be made to the Depositary or its nominee,
as the case may be, as the registered owners and holder of the Global Security
representing such Book-Entry Securities. None of USX, the Trustee or any agent
of USX or the Trustee will have any responsibility or liability for any aspect
of the Depositary's records or any participant's records relating to or payments
made on account of beneficial ownership interests in a Global Security
representing such Book-Entry Securities or for maintaining, supervising or
reviewing any of the Depositary's records or any participant's records relating
to such beneficial ownership interests. Payments by participants to owners of
beneficial interests in a Global Security held through such participants will be
governed by the Depositary's procedures, as is now the case with securities held
for the accounts of customers registered in "street name," and will be the sole
responsibility of such participants.
No Global Security may be transferred except as a whole by the Depositary
for such Global Security to a nominee of the Depositary or by a nominee of the
Depositary to the Depositary or another nominee of the Depositary.
A Global Security representing Book-Entry Securities of any Series is
exchangeable for definitive Debt Securities of such Series in registered form,
of like tenor and of an equal aggregate principal amount, only if (a) the
Depositary notifies USX that it is unwilling or unable to continue as Depositary
for such Global Security or the Depositary ceases to be a clearing agency
registered under the Exchange Act, (b) USX in its sole discretion determines
that such Global Security shall be exchangeable for definitive Debt Securities
in registered form, or (c) there shall have occurred and be continuing an Event
of Default with respect to the Debt Securities of that Series. Any Global
Security that is exchangeable pursuant to the preceding sentence shall be
exchangeable in whole for definitive Debt Securities in registered form, of like
tenor and of an equal aggregate principal amount, and in the authorized
denominations for that Series. Such definitive Debt Securities shall be
registered in the name or names of such person or persons as the Depositary
shall instruct the Trustee. It is expected that such instructions may be based
upon directions received by the Depositary from its participants with respect to
ownership of beneficial interests in such Global Security.
Except as provided above, owners of beneficial interests in such Global
Security will not be entitled to receive physical delivery of Debt Securities in
definitive form and will not be considered the holders thereof for any purpose
under the Indenture, and no Global Security representing Book-Entry Securities
shall be exchangeable, except for another Global Security of like denomination
and tenor to be registered in the name of the Depositary or its nominee.
Accordingly, each person owning a beneficial interest in such Global Security
must rely on the procedures of the Depositary and, if such person is not a
participant, on the procedures of the participant through which such person owns
its interest, to exercise any rights of a holder under the Indenture. USX
understands that under existing industry practices, in the event that USX
requests any action of holders or an owner of a beneficial interest in such
Global Security desires to give or take any action that a holder is entitled to
give or take under the Indenture, the Depositary would authorize the
participants holding the relevant beneficial interests to give or take such
action, and such participants would authorize beneficial owners owning through
such participant to give or take such action or would otherwise act upon the
instructions of beneficial owners owning through them.
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CONCERNING THE TRUSTEE
PNC Bank, National Association is also trustee for Marathon Oil Company's
7% Monthly Interest Guaranteed Notes Due 2002, which are guaranteed by USX, for
fourteen series of obligations issued by various governmental authorities
relating to environmental projects at various USX facilities, for an aggregate
principal amount of $1.3 billion of debt securities issued by USX under an
Indenture between USX and the Trustee dated July 1, 1991 and for $1.4 billion of
Debt Securities which have heretofore been issued by USX under the Indenture.
USX and its subsidiaries maintain ordinary banking relationships, including
loans and deposit accounts, with PNC Bank, National Association and anticipate
that they will continue to do so.
DESCRIPTION OF CAPITAL STOCK
The following is a description of the terms of the capital stock of USX
included in the Certificate of Incorporation. This description does not purport
to be complete and is qualified in its entirety by reference to the Certificate
of Incorporation, and the Amended and Restated Rights Agreement (the "Restated
Rights Agreement") between USX and Mellon Bank, N.A., as Rights Agent (the
"Rights Agent"), which have been filed as exhibits to the Registration Statement
of which this Prospectus is a part.
GENERAL
The authorized capital stock of USX consists of (i) 40 million shares of
preferred stock, without par value (the "Preferred Stock"), of which three
million shares are designated as 6.50% Cumulative Convertible Preferred Stock
("6.50% Convertible Preferred Stock") and eight million shares are designated as
Series A Junior Preferred Stock, (ii) 550 million shares of a class of common
stock designated as USX-Marathon Group Common Stock, par value $1.00 per share,
(iii) 200 million shares of a class of common stock designated as USX-U.S. Steel
Group Common Stock, par value $1.00 per share and (iv) 50 million shares of a
class of common stock designated as USX-Delhi Group Common Stock, par value
$1.00 per share.
As of April 30, 1998, there were 2,961,887 shares of 6.50% Convertible
Preferred Stock, 289,202,123 shares of Marathon Stock, 86,835,989 shares of
Steel Stock and no shares of USX-Delhi Group Common Stock issued and
outstanding. Effective January 26, 1998, all of the outstanding USX-Delhi Group
Common Stock was redeemed in connection with the sale of the Delhi Companies,
and therefore, such stock is not discussed further in this description of
Capital Stock. No shares of Series A Junior Preferred Stock are outstanding.
Additionally, there were 3,937,163 6.75% Convertible Junior Subordinated
Debentures due 2037 outstanding as of April 30, 1998 convertible into 4,256,073
shares of Steel Stock, subject to adjustment in certain circumstances.
As used herein:
"Disposition" shall mean the sale, transfer, assignment or other
disposition (whether by merger, consolidation, sale or contribution of
assets or stock or otherwise) of properties or assets.
"Marathon Group" means, at any time, (x) all businesses in which any
of Marathon Oil Company, Texas Oil & Gas Corp., Carnegie Natural Gas
Company and Apollo Gas Company (or any of their predecessors or successors)
is or has been engaged, directly or indirectly, other than the businesses
of the Delhi Group after October 2, 1992 (the date of first issuance of
USX-Delhi Group Common Stock), (y) all assets and liabilities of USX to the
extent attributed to any of such businesses, whether or not such assets or
liabilities are or were assets or liabilities of such companies and (z)
such businesses, assets and liabilities acquired by USX for the Marathon
Group after May 6, 1991, as determined by the Board to be included in the
Marathon Group.
"Market Value" of either class of Common Stock on any Business Day
means the average of the high and low reported sales prices regular way of
a share of such class on such Business Day or, in case no such reported
sale takes place on such Business Day, the average of the reported closing
bid and asked prices regular way of a share on such class on such Business
Day, in either case on the Composite Tape, or if the shares of such class
are not listed or admitted to trading on the NYSE on such Business Day, on
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specified alternative markets, or, if not listed or admitted to trading on
such markets, the market value as determined by the Board, subject to
adjustments necessary to reflect any dividends (other than regular cash
dividends) or distributions on, or subdivisions or combinations of,
outstanding shares of such class.
"Business Day" means each weekday other than any day on which any
relevant class of Common Stock is not traded on any national securities
exchange or the National Association of Securities Dealers Automated
Quotations National Market System or in the over-the-counter market.
"Net Proceeds," as of any date, from any Disposition of any of the
properties and assets of the U.S. Steel Group shall mean an amount, if any,
equal to the gross proceeds of such Disposition after payment of, or
reasonable provision for (i) any taxes payable by USX in respect of such
Disposition, (ii) any taxes payable by USX in respect of any dividend or
redemption pursuant to a dividend or redemption paid to holders of Steel
Stock in connection with such Disposition, (iii) any transaction costs,
including, without limitation, any legal, investment banking and accounting
fees and expenses and (iv) any liabilities (contingent or otherwise) of, or
allocated to, the U.S. Steel Group including, without limitation any
indemnity obligations incurred in connection with the Disposition. For
purposes of this definition, any properties and assets of the U.S. Steel
Group remaining after such Disposition shall constitute "reasonable
provision" for such amount of taxes, costs and liabilities (contingent or
otherwise) as can be supported by such properties and assets. To the extent
the proceeds of any Disposition include any securities or other property
other than cash, the Board of Directors shall determine the value of such
securities or property.
"U.S. Steel Group" means, at any time, all of the businesses in which
USX is or has been engaged, directly or indirectly, and all assets and
liabilities of USX, other than any businesses, assets or liabilities of the
Marathon Group if any shares of Marathon Stock are outstanding.
PREFERRED STOCK
The authorized Preferred Stock may be issued without the approval of the
holders of Common Stock in one or more series, from time to time, with each such
series to have such designation, powers, preferences and relative,
participating, optional or other special rights, and qualifications, limitations
or restrictions thereof, as shall be stated in a resolution providing for the
issue of any such series adopted by the Board and as described in the
appropriate Prospectus Supplement (if any). The future issuance of Preferred
Stock may have the effect of delaying, deferring or preventing a change in
control of USX.
Holders of the 6.50% Convertible Preferred Stock are entitled to receive
cumulative dividends, to be declared and paid before declaration and payment of
dividend on USX's common stock, at the rate of 6.50% per annum. The 6.50%
Convertible Preferred Stock was not redeemable prior to April 1, 1996, except as
described below. On and after such date, the 6.50% Convertible Preferred Stock
is redeemable at the option of USX under certain circumstances, in whole or in
part, for cash, currently at a price of $51.625 per share, and at prices
declining annually on each April 1 to an amount equal to $50.00 per share on and
after April 1, 2003, plus, in each case, an amount equal to accrued and unpaid
dividends to the redemption date. If USX exchanges all of the outstanding Steel
Stock for shares of a wholly owned subsidiary of USX to which all of the assets
and liabilities of the U.S. Steel Group have been transferred, pays a dividend
on or redeems shares of Steel Stock with the Net Proceeds from the Disposition
of all or substantially all of the assets of the U.S. Steel Group, pays a
dividend on, or USX or any of its subsidiaries consummates a tender or exchange
offer for, Steel Stock, and the aggregate amount of such dividend or the
consideration paid in such tender or exchange offer is an amount equal to all or
substantially all of the assets, the 6.50% Convertible Preferred Stock is
required to be redeemed, in whole, for $50.00 per share, plus dividends accrued
and unpaid to the redemption date. The 6.50% Convertible Preferred Stock is
required to be redeemed under certain other limited circumstances. The 6.50%
Convertible Preferred Stock will not be entitled to the benefit of any sinking
fund.
Shares of the 6.50% Convertible Preferred Stock are convertible at any time
at the option of the holder, unless previously redeemed, into shares of Steel
Stock, at a conversion price of $46.125 per share of Steel Stock (equivalent to
a conversion rate of 1.084 shares of Steel Stock for each share of 6.50%
Convertible Preferred Stock), subject to adjustment in certain circumstances.
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The holders of the 6.50% Convertible Preferred Stock have no vote except
certain class votes in limited circumstances. Upon the dissolution, liquidation
or winding-up of USX, the holders of the 6.50% Convertible Preferred Stock are
entitled to receive out of the assets of USX available for distribution to
stockholders, before any payment or distribution shall be made on Common Stock
or any other class of stock ranking junior to such series upon liquidation, the
amount of $50 per share plus all accrued and unpaid dividends thereon.
MARATHON STOCK
DIVIDENDS--DIVIDENDS ON THE MARATHON STOCK ARE INTENDED TO BE PAID BASED ON
THE FINANCIAL CONDITION AND RESULTS OF OPERATIONS OF THE MARATHON GROUP.
Subject to any prior rights of the holders of the Preferred Stock,
dividends may be paid on the Marathon Stock as determined by the Board out of
funds of USX legally available therefor.
The Board may, in its sole discretion, declare and pay dividends
exclusively on the Marathon Stock, or exclusively on the Steel Stock, or on both
classes in equal or unequal amounts, notwithstanding the respective amount of
funds available for dividends on each class, the respective voting and
liquidation rights of each class, the amount or prior dividends declared on each
class or any other factor.
EXCHANGE AND REDEMPTION--MARATHON STOCK MAY BE EXCHANGED FOR SHARES OF A
SUBSIDIARY OF USX TO WHICH USX WOULD HAVE TRANSFERRED ALL OF THE ASSETS AND
LIABILITIES OF THE MARATHON GROUP.
At any time after the transfer of all the assets and liabilities of the
Marathon Group to a wholly-owned subsidiary of USX (the "Marathon Group
Subsidiary"), the Board may, in its sole discretion and by a majority vote of
the directors then in office, provided that there are funds of USX legally
available therefor, exchange all of the outstanding shares of Marathon Stock for
all of the outstanding shares of the common stock of the Marathon Group
Subsidiary (the "Marathon Group Subsidiary Stock"), on a pro rata basis.
General Redemption Provisions: In the event of any exchange or redemption
of a class of Common Stock, USX shall cause to be given to each holder of such
Common Stock a notice stating (A) that shares of such Common Stock shall be
exchanged or redeemed, as the case may be, (B) the date of the exchange or
redemption, (C) in the event of a partial redemption, the number of shares of
Steel Stock to be redeemed, (D) the kind and amount of shares of capital stock
or cash and/or securities or other property to be received by such holder with
respect to each share of such class of Common Stock held by such holder,
including details as to the calculation thereof, (E) the place or places where
certificates for shares of such class of Common Stock, properly endorsed or
assigned for transfer (unless USX waives such requirement), are to be
surrendered for delivery of certificates for shares of such capital stock or
cash and/or securities or other property and (F) that, except as provided in the
second following paragraph, dividends on such shares of Common Stock will cease
to be paid as of such exchange date or redemption date. Such notice shall be
sent by first-class mail, postage prepaid, not less than 30 nor more than 60
days prior to the exchange date or redemption date, as the case may be, and in
any case to each holder of such class of Common Stock to be exchanged or
redeemed, at such holder's address as the same appears on the stock transfer
books of USX. Neither the failure to mail such notice to any particular holder
of such class of Common Stock nor any defect therein shall affect the
sufficiency thereof with respect to any other holder of such class of Common
Stock.
If less than all of the outstanding shares of Steel Stock are to be
redeemed, such shares shall be redeemed by USX pro rata among the holders of
such class of Common Stock or by such other method as may be determined by the
Board to be equitable.
No adjustments in respect of dividends shall be made upon the exchange or
redemption of any shares of any class of Common Stock; provided, however, that
if such shares are exchanged or redeemed by USX after the record date for
determining holders of such class of Common Stock entitled to any dividend or
distribution thereon, such dividend or distribution shall be payable to the
holders of such shares at the close of business on such record date
notwithstanding such exchange or redemption.
Before any holder of shares of any class of Common Stock shall be entitled
to receive certificates representing shares of any kind of capital stock or cash
and/or securities or other property to be received by
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such holder with respect to any exchange or redemption of such class of Common
Stock, such holder shall surrender at such office as USX shall specify
certificates for such shares of such class of Common Stock, properly endorsed or
assigned for transfer (unless USX shall waive such requirement). As soon as
practicable after surrender of certificates for shares of such class of Common
Stock, USX will deliver to the holder of such shares so surrendered the
certificates representing the number of whole shares of the kind of capital
stock or cash and/or securities or other property to which such holder is
entitled, together with any fractional payment referred to below. If less than
all of the shares of such class of Common Stock represented by any one
certificate are to be redeemed, USX will issue and deliver a new certificate for
the shares of such class of Common Stock not redeemed.
USX shall not be required to issue or deliver fractional shares of any
class of capital stock or any fractional securities to any holder of any class
of Common Stock upon any exchange, redemption, dividend or other distribution.
If more than one share of such class of Common Stock shall be held at the same
time by the same holder, USX may aggregate the number of shares of any class of
capital stock that shall be issuable or the amount of securities that shall be
deliverable to such holder upon any exchange, redemption, dividend or other
distribution (including any fractions of shares or securities). If the number of
shares of any class of capital stock or the amount of securities remaining to be
issued or delivered to any holder of any class of Common Stock is a fraction,
USX shall, if such fraction is not issued or delivered to such holder, pay a
cash adjustment in respect of such fraction in an amount equal to the fair
market value of such fraction on the fifth Business Day prior to the date such
payment is to be made. For purposes of the preceding sentence, "fair market
value" of any fraction shall be (i) in the case of any fraction of a share of
capital stock of USX, the product of such fraction and the Market Value of one
share of such capital stock and (ii) in the case of any other fractional
security, such value as is determined by the Board.
VOTING--SHARES OF MARATHON STOCK SHALL HAVE ONE VOTE PER SHARE. SHARES OF
STEEL STOCK WILL, WHEN VOTING WITH THE OTHER CLASS OF COMMON STOCK (MARATHON
STOCK), HAVE A NUMBER OF VOTES PER SHARE BASED UPON THE TIME WEIGHTED AVERAGE
RATIOS OF THE MARKET VALUE OF A SHARE OF STEEL STOCK TO THE MARKET VALUE OF A
SHARE OF MARATHON STOCK.
Except as set forth below and under "Steel Stock--Voting," holders of both
classes of Common Stock vote together as a single class on all matters as to
which all holders of Common Stock are entitled to vote. On all matters to be
voted on by the holders of both classes of Common Stock together as a single
class, (i) each share of outstanding Marathon Stock has one vote and (ii) each
share of Steel Stock has a number of votes equal to the quotient (calculated to
the nearest three decimal places), as of the fifth Business Day prior to the
applicable record date, of (A) the sum of (1) four times the average ratio of
X/Y for the five-Business Day period ending on such fifth Business Day, (2)
three times the average ratio of X/Y for the next preceding five-Business Day
period, (3) two times the average ratio of X/Y for the next preceding
five-Business Day period and (4) the average ratio of X/Y for the next preceding
five-Business Day period, divided by (B) ten, where X is the Market Value of the
Steel Stock and Y is the Market Value of the Marathon Stock. If shares of only
one class of Common Stock are outstanding, each share of that class shall have
one vote.
Assuming that the time weighted averages of the Market Values of Marathon
Stock and Steel Stock were $33 and $32, respectively, the per share voting
rights of Marathon Stock and Steel Stock would be one vote and 0.970 votes per
share, respectively. If the Marathon Stock and the Steel Stock had such per
share voting rights as of April 30, 1998, the holders of Marathon Stock and
Steel Stock would have approximately 77% and 23%, respectively, of the total
voting power of USX.
In addition, the approval of the holders of at least 66 2/3% of the
outstanding Marathon Stock, voting as a separate class, shall be necessary for:
(i) the declaration or payment of any dividend, or the making of any
other payment or distribution on or with respect to, any shares of any
other class of Common Stock, if such dividend, payment or distribution is
to be made with (A) proceeds from the sale, transfer, assignment or other
disposition (whether by merger, consolidation, sale or contribution of
assets or stock or otherwise) (a "Disposition") of any of the properties
and assets of the Marathon Group or (B) any portion of an equity interest
in a person, entity or group that owns any of the properties and assets of
the Marathon Group; or
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(ii) the use, or reservation for use, of any proceeds from the
Disposition of any of the properties and assets of the Marathon Group, or
any of the properties and assets acquired with such proceeds, in any
business of the Corporation other than the Marathon Group.
Notwithstanding the foregoing, however, such vote shall not be required if such
proceeds are loaned at a rate or rates representative of actual borrowings and
short-term investments by USX.
The vote or consent of the holders of a majority of all of the outstanding
shares of any class of Common Stock, voting as a separate class, is currently
required under Delaware law for any amendment to the Certificate of
Incorporation that would increase or decrease the par value of the shares of
such class or alter or change the powers or special rights of the shares of such
class so as to affect them adversely. The Certificate of Incorporation provides
that neither the increase nor decrease of the authorized number of shares of any
class of Common Stock shall require a separate vote of any class. Thus, it is
possible that the holders of a majority of one class of Common Stock could
constitute a majority of the voting power of both classes and approve the
increase or decrease of the authorized amount of the other class of Common Stock
without the approval of the holders of such other class of Common Stock.
The Certificate of Incorporation also provides that unless the vote or
consent of a greater number of shares shall then be required by law, the
approval of the holders of a majority of the outstanding shares of any class of
Common Stock, voting as a separate class, shall be necessary for authorizing,
effecting or validating the merger or consolidation of USX into or with any
other corporation if such merger or consolidation would adversely affect the
powers or special rights of such class of Common Stock, either directly or
indirectly.
LIQUIDATION--IN THE EVENT OF THE LIQUIDATION OF USX, HOLDERS OF EITHER
CLASS OF COMMON STOCK WILL BE ENTITLED TO RECEIVE A PORTION OF THE FUNDS
DISTRIBUTABLE TO HOLDERS OF BOTH CLASSES OF COMMON STOCK BASED UPON THE
TIME-WEIGHTED AVERAGE AGGREGATE MARKET CAPITALIZATION OF EACH SUCH CLASS OF
COMMON STOCK TO THE AGGREGATE MARKET CAPITALIZATION OF BOTH CLASSES OF COMMON
STOCK.
The Certificate of Incorporation provides that, in the event of a
dissolution, liquidation or winding-up of USX, whether voluntary or involuntary,
after payment of creditors and after the holders of Preferred Stock receive the
full preferential amounts to which they are entitled, the holders of outstanding
shares of each class of Common Stock will share the funds remaining for
distribution to the holders of Common Stock. The holders of the outstanding
Common Stock will each be entitled to receive a fraction of such funds equal to
the quotient of (i) the sum of (A) four times the average ratio of X/Y for the
five-Business Day period ending on the Business Day prior to the date of the
public announcement of (1) a voluntary dissolution, liquidation or winding-up by
USX or (2) the institution of any proceeding for the involuntary dissolution,
liquidation or winding-up of USX, (B) three times the average ratio of X/Y for
the next preceding five-Business Day period, (C) two times the average ratio of
X/Y for the next preceding five-Business Day period and (D) the average ratio of
X/Y for the next preceding five-Business Day period, divided by (ii) ten, where
X is the market capitalization of such class of Common Stock and Y is the
aggregate market capitalization of both classes of Common Stock. For purposes of
the preceding sentence, "Market Capitalization" of any class of Common Stock on
any day shall mean the product of (i) the Market Value of such class of Common
Stock on such day and (ii) the number of shares of such class of Common Stock
outstanding on such day.
STEEL STOCK
DIVIDENDS--DIVIDENDS ON THE STEEL STOCK ARE INTENDED TO BE PAID BASED UPON
THE FINANCIAL CONDITION AND RESULTS OF OPERATIONS OF THE U.S. STEEL GROUP.
Subject to any prior rights of the holders of the Preferred Stock,
dividends on the Steel Stock may be declared and paid only out of the lesser of
(i) funds of USX legally available therefor and (ii) the Available Steel
Dividend Amount.
The "Available Steel Dividend Amount," on any date, means either:
(a) the greater of:
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(i) an amount equal to (x) $2.244 billion, increased or decreased,
as appropriate, to reflect: (A) Steel Net Income from the close of
business on December 31, 1990, (B) any dividends or other distributions
declared or paid with respect to, or repurchases or issuances of, any
shares of common stock of USX after December 31, 1990 and prior to the
close of business on May 6, 1991 attributed to the U.S. Steel Group, (C)
any dividends or other distributions declared or paid with respect to,
or repurchases or issuances of, any shares of Steel Stock or any shares
of Preferred Stock attributed to the U.S. Steel Group and (D) any other
adjustments to stockholders' equity of the U.S. Steel Group made in
accordance with generally accepted accounting principles, less (y) the
sum of the aggregate par value of all outstanding Steel Stock and the
aggregate stated capital of all outstanding Preferred Stock attributed
to the U.S. Steel Group; and
(ii) the excess of the fair market value of the net assets of the
U.S. Steel Group over the sum of the aggregate par value of all
outstanding Steel Stock and the aggregate stated capital of all
outstanding Preferred Stock attributed to the U.S. Steel Group,
in the case of each of clauses (i) and (ii) increased by an amount equal
to any effects of the recognition of the transition obligation upon the
adoption of SFAS No. 106 (including any amendments thereto) and any
cumulative effects of the adoption of SFAS No. 109 (including any
amendments thereto) in the year of adoption; or
(b) in case there shall be no such amount, an amount equal to Steel
Net Income (if positive) for the fiscal year in which the dividend is
declared and/or the preceding fiscal year.
The amount of $2.244 billion in clause (a)(i) above represents the amount
of total stockholders' equity of USX as of December 31, 1990 assigned to the
U.S. Steel Group by the Board after giving consideration to the historical debt
and equity structure of USX.
The Available Steel Dividend Amount as of March 31, 1998 was at least
$3.094 billion, as calculated under the preceding clause (a)(i).
Although net income and stockholders' equity of the U.S. Steel Group was
reduced when USX adopted the accounting changes required by SFAS No. 106 and
SFAS No. 109, such changes did not affect cash flows of the U.S. Steel Group. As
a result, in order to preclude dividends on the Steel Stock from being limited
by such noncash accounting changes, the amounts in each of clause (a)(i) and
clause (a)(ii) of the definition of "Available Steel Dividend Amount" were
adjusted to eliminate the effects of such changes, as set forth above.
Clause (b) in the definition of "Available Steel Dividend Amount" will
permit the payment of dividends on the Steel Stock in any fiscal year to the
extent there is positive Steel Net Income (as defined below) in such fiscal year
or in the preceding fiscal year or to the extent of the sum of positive Steel
Net Income, if any, in both such years. Any loss in either such year would not
reduce positive Steel Net Income, if any, in the other year for purposes of
determining the applicable limitation on dividends. Such provision is comparable
to Section 170 of the Delaware General Corporation Law, which allows the payment
of dividends on common stock of any Delaware corporation in any fiscal year to
the extent of consolidated net income of the corporation for such fiscal year
and/or the preceding fiscal year.
As used herein, "Steel Net Income" means the net income or loss of the U.S.
Steel Group determined in accordance with generally accepted accounting
principles, including income and expenses of USX attributed to the U.S. Steel
Group, on a substantially consistent basis, including, without limitation,
corporate administrative costs, net interest and other financial costs and
income taxes. For information concerning the policies governing the attribution
of corporate activities to the U.S. Steel Group which are being followed by USX
in determining Steel Net Income, see "Management and Accounting Policies."
The Board may, in its sole discretion, declare and pay dividends
exclusively on the Marathon Stock, or exclusively on the Steel Stock, or on both
classes in equal or unequal amounts, notwithstanding the respective amount of
funds available for dividends on each class, the respective voting and
liquidation rights of each class, the amount of prior dividends declared on each
class or any other factor.
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EXCHANGE AND REDEMPTION--IN THE EVENT OF A DISPOSITION OF ALL OR
SUBSTANTIALLY ALL OF THE ASSETS OF THE U.S. STEEL GROUP, USX IS REQUIRED TO (1)
PAY A DIVIDEND, (2) REDEEM STEEL STOCK OR (3) EXCHANGE STEEL STOCK FOR MARATHON
STOCK.
If USX transfers all the assets and liabilities of the U.S. Steel Group to
a wholly owned subsidiary of USX (the "U.S. Steel Group Subsidiary"), Steel
Stock may be exchanged, at the sole discretion of the Board, by a majority vote
of the directors then in office, provided that there are funds of USX legally
available therefor, for all of the outstanding stock of the U.S. Steel Group
Subsidiary, on a pro rata basis on the same terms and conditions as on the
Marathon Stock.
In addition, upon the Disposition, in one transaction or a series of
related transactions, of all or substantially all of the properties and assets
of the U.S. Steel Group (other than in connection with the Disposition by USX of
all of its properties and assets in one transaction) to any person, entity or
group (other than to the holders of all outstanding shares of Steel Stock on a
pro rata basis or to a person, entity or group in which USX, directly or
indirectly, owns a majority equity interest), USX shall, within 60 days
following the consummation of such Disposition, either (i) subject to the
limitations on dividends on Steel Stock set forth above, declare and pay a
dividend in cash and/or in securities or other property received as proceeds of
such Disposition to the holders of the Steel Stock in an amount equal to the Net
Proceeds of such Disposition, (ii) to the extent that there are funds of USX
legally available therefor, redeem the number of whole shares of Steel Stock
having an aggregate average Market Value during the ten-Business Day period
following consummation of such Disposition, closest to the value of the Net
Proceeds of such Disposition, for cash and/or securities or other property
received as proceeds of such Disposition in an amount equal to the Net Proceeds
or (iii) exchange each outstanding share of Steel Stock for a number of shares
of Marathon Stock equal to 110% of the average daily ratio (calculated to the
nearest five decimal places) of the Market Value of one share of Steel Stock to
the Market Value of one share of Marathon Stock during such period.
If, immediately after any event, USX, directly or indirectly, owns less
than a majority equity interest in any person, entity or group in which USX,
directly or indirectly, owned a majority equity interest immediately prior to
the occurrence of such event, a Disposition of all of the properties and assets
of the U.S. Steel Group owned by such person, entity or group shall be deemed to
have occurred. In the case of a Disposition of properties or assets in a series
of related transactions, such Disposition shall not be deemed to have been
consummated until the consummation of the last of such transactions.
"Substantially all of the properties and assets of the U.S. Steel Group,"
as of any date, means a portion of such properties and assets that represents at
least 80% of either of the then-current market value of, or the aggregate
revenues for the immediately preceding twelve fiscal quarterly periods of USX
derived from, the properties and assets of the U.S. Steel Group as of such date
(excluding the assets and properties of any person, entity or group in which
USX, directly or indirectly, owns less than a majority equity interest).
After any such special dividend or redemption pursuant to clause (i) or
(ii) in the third preceding paragraph, the Board may, by a majority vote of the
directors then in office, exchange each outstanding share of Steel Stock for a
number of shares of Marathon Stock equal to 110% of the Market Value Ratio as of
the fifth Business Day prior to the date notice of such exchange is mailed to
the holders of Steel Stock. For purposes of the preceding sentence, "Market
Value Ratio", as of any date, means the highest of the following (calculated to
the nearest five decimal places): (A) the average ratio of S/X for the
five-Business Day period ending on such date. (B) the quotient of (1) the sum of
(w) four times the average ratio of S/X for the five-Business Day period ending
on such date, (x) three times the average ratio of S/X for the next preceding
five-Business Day period, (y) two times the average ratio of S/X for the next
preceding five-Business Day period and (z) the average ratio of S/X for the next
preceding five-Business Day period, divided by (2) ten and (C) if the special
dividend pursuant to clause (i) of the third preceding paragraph was declared
and paid or the redemption pursuant to clause (ii) thereof was made prior to the
commencement of the most recently completed fiscal quarter of USX, the average
ratio of S/X for such fiscal quarter, where S is the Market Value of one share
of the Steel Stock and X is the Market Value of one share of the Marathon Stock.
In determining whether to effect such an exchange, the Board, in addition to
other matters, would likely consider whether the remaining properties and assets
of the U.S. Steel Group constitute a viable business. Other considerations
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could include the number of shares of Steel Stock remaining outstanding
following any such redemption, the per share market price of the Steel Stock
following the payment of such a dividend or such a redemption and the cost of
maintaining stockholder accounts.
An exchange or redemption of Steel Stock for Marathon Stock would be made
on the same general terms and conditions as described above under "Marathon
Stock--Exchange and Redemption--General Provisions."
VOTING--SHARES OF STEEL STOCK WILL, WHEN VOTING TOGETHER WITH ALL OTHER
CLASSES OF COMMON STOCK, HAVE A NUMBER OF VOTES PER SHARE BASED UPON
TIME-WEIGHTED AVERAGE RATIOS OF THE MARKET VALUE OF A SHARE OF STEEL STOCK TO
THE MARKET VALUE OF A SHARE OF MARATHON STOCK.
The holders of shares of the Steel Stock have the voting rights described
above under the caption "Marathon Stock--Voting."
In addition, as is the case with the use of the proceeds from the
Disposition of any properties or assets of the Marathon Group, unless the vote
or consent of a greater number of shares shall then be required by law, the
approval of the holders of at least 66 2/3% of the outstanding Steel Stock,
voting as a separate class, shall be necessary for:
(i) the declaration or payment of any dividend on, or the making of
any other payment or distribution on or with respect to, any shares of any
other class of common stock, if such dividend, payment or distribution is
to be made with (A) proceeds from the Disposition of any of the properties
and assets of the U.S. Steel Group or (B) any portion of an equity interest
in a person, entity or group that owns any of the properties and assets of
the U.S. Steel Group; or
(ii) the use, or reservation for use, of any proceeds from the
Disposition of any of the properties and assets of the U.S. Steel Group, or
any of the properties and assets acquired with such proceeds, in any
business of USX other than a business of the U.S. Steel Group.
Notwithstanding the foregoing, however, such vote shall not be required if
such proceeds are loaned at a rate or rates representative of actual
borrowings and short-term investments by USX.
LIQUIDATION--IN THE EVENT OF THE LIQUIDATION OF USX, HOLDERS OF STEEL STOCK
WILL BE ENTITLED TO RECEIVE A PORTION OF THE FUNDS DISTRIBUTABLE TO HOLDERS OF
COMMON STOCK BASED ON THE RELATIVE TIME-WEIGHTED AVERAGE AGGREGATE MARKET
CAPITALIZATION OF THE STEEL STOCK TO THE AGGREGATE MARKET CAPITALIZATION OF BOTH
CLASSES OF COMMON STOCK.
In the event of a dissolution, liquidation or winding-up of USX, the
holders of shares of Steel Stock are entitled to receive funds in the amounts
described above under "Marathon Stock--Liquidation."
DETERMINATIONS BY BOARD
Any determinations made by the Board under the foregoing provisions will be
final and binding on all stockholders of USX.
OTHER RIGHTS
The holders of Common Stock do not have any preemptive rights or any rights
to convert their shares into any other securities of USX.
STOCK TRANSFER AGENT AND REGISTRAR
USX maintains its own stock transfer department at the following address:
USX Corporation, Shareholders Services Department, 600 Grant Street, Room 611,
Pittsburgh, PA 15219-4776. Certificates representing shares can also be
presented for registration of transfer at ChaseMellon Shareholder Services, 120
Broadway, 13th Floor, New York, NY 10021.
ChaseMellon Shareholder Services L.L.C., 4 Station Square, Pittsburgh, PA
15219 is the Registrar for all the Common Stock.
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AMENDED AND RESTATED RIGHTS PLAN
The following is a brief description of the terms of the Stockholders
Rights Plan set forth in the Restated Rights Agreement between USX and Mellon
Bank, N.A., as Rights Agent.
Under the Restated Rights Agreement, the right (each a "Right") to purchase
from USX a unit consisting of one one-hundredth of a share (a "Unit") of Series
A Junior Preferred Stock, no par value (the "Junior Preferred Stock"), at a
purchase price of $120 in cash per Unit, subject to adjustment, is attached to
each share of Marathon Stock and Steel Stock (sometimes hereinafter referred to
together as the "Voting Stock"). A Right attached to a share of Marathon Stock
is hereinafter referred to as a "Marathon Right" and a Right attached to a share
of Steel Stock is hereinafter referred to as a "Steel Right."
The Rights will separate from the Voting Stock and a Rights distribution
date will occur upon the earlier of (i) 15 days following a public announcement
that a person or group of affiliated or associated persons (an "Acquiring
Person") has acquired (except pursuant to a Qualifying Offer (defined in the
Restated Rights Agreement as an all-cash tender offer for all outstanding shares
of Voting Stock meeting certain prescribed requirements)), or obtained the right
to acquire, beneficial ownership of Voting Stock representing 15% or more of the
total voting power of all outstanding shares of Voting Stock (the "Stock
Acquisition Date"), or (ii) 15 days (or upon such later date as may be
determined by the Board) following the commencement of a tender offer or
exchange offer (other than a Qualifying Offer) that would result in a person or
a group beneficially owning Voting Stock representing 15% or more of the total
voting power of all outstanding shares of Voting Stock. For purposes of the
Restated Rights Agreement, total voting power of Voting Stock shall be
determined based upon the most recent calculation announced by USX. See
"Marathon Stock--Voting" and "Steel Stock--Voting" above. If a person
inadvertently becomes the beneficial owner of Voting Stock representing 15% or
more of the total voting power of the Voting Stock due to the recalculation by
USX of the relative voting power of Marathon Stock and Steel Stock, such person
will not be an Acquiring Person unless and until such person acquires any
additional shares of Voting Stock.
In the event that a person or group becomes the beneficial owner of Voting
Stock representing 15% or more of the total voting power of all outstanding
shares of Voting Stock (except pursuant to a Qualifying Offer), the Rights
"flip-in" and entitle each holder of a Right (other than the Acquiring Person
and certain related parties) to receive, upon exercise, Marathon Stock or Steel
Stock, as the case may be (or in certain circumstances, cash, property, or other
securities of USX), having a value equal to two times the exercise price of the
Marathon Right or Steel Right, respectively. However, Rights are not exercisable
until such time as the Rights are no longer redeemable by USX as set forth
below.
In the event that, any time following the Stock Acquisition Date, (i) USX
is acquired in a merger or other business combination transaction in which USX
is not the surviving corporation (other than a merger that follows a Qualifying
Offer) or its Voting Stock is changed or exchanged, or (ii) 50% or more of USX's
assets, earning power or cash flow is sold or transferred, the Rights
"flip-over" and entitle each holder of a Right (other than an Acquiring Person
and certain related parties) to receive, upon exercise, common stock of the
acquiring company having a value equal to two times the exercise price of the
Right.
At any time until 15 days following the Stock Acquisition Date (subject to
extension), USX may redeem the Rights in whole, but not in part, at a price of
$.01 per whole Right payable in stock or cash or any other form of consideration
deemed appropriate by the Board (the "Redemption Price"). Immediately upon the
action of the Board ordering redemption of the Rights, the Rights will terminate
and the only right of the holders of the Rights will be to receive the
Redemption Price.
The Board may, at its option, at any time after any person becomes an
Acquiring Person, exchange all or part of the outstanding and exercisable
Marathon Rights and Steel Rights (other than Rights held by the Acquiring Person
and certain related parties) for shares of Marathon Stock and Steel Stock,
respectively, at an exchange ratio of one share of Marathon Stock for each
Marathon Right and one share of Steel Stock for each Steel Right (subject to
certain anti-dilution adjustments). However, the Board may not effect such an
exchange at any time any person or group owns Voting Stock representing 50% or
more of the total voting power of the Voting Stock then outstanding.
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As long as the Rights are attached to shares of Voting Stock, USX will
issue Marathon Rights on each share of Marathon Stock and Steel Rights on each
share of Steel Stock issued prior to the Rights distribution date so that all
such shares will have attached Rights.
A copy of the Restated Rights Agreement is available free of charge from
the Rights Agent by writing to Mellon Bank, N.A. at One Mellon Bank Center,
Pittsburgh, Pennsylvania 15258, Attention: Corporate Trust Group.
DESCRIPTION OF WARRANTS
USX may issue Warrants for the purchase of Debt Securities, Preferred
Stock, Marathon Stock or Steel Stock (each a "USX Security," and together the
"USX Securities"). Warrants may be issued independently or together with any USX
Security offered by any Prospectus Supplement and may be attached to or separate
from any such USX Security.
Each series of Warrants will be issued under a separate warrant agreement (a "Warrant Agreement")Warrant Agreement
to be entered into between USX and a bank or trust company, as warrant agent (the "Warrant Agent").Warrant Agent.
The Warrant Agent will act solely as an agent of USX in connection with the
Warrants and will not assume any obligation or relationship of agency or trust
for or with any holders or beneficial owners of Warrants. The following is a
summary of certain provisions of the Warrants does not purport to beWarrants. For a complete and is
subject to, and qualified in its entirety by reference to,understanding of
the provisions of the Warrants, read the Warrant Agreement that will be filed
with the SEC in connection with the offering of such Warrants.
DEBT WARRANTS
The Prospectus Supplement relating to a particular issue of Warrants to
issue Debt Securities ("Debt Warrants") will describe the terms of such Debt
Warrants, including the following (if applicable):
(a) the title of such Debt Warrants;
(b) the offering price for such Debt Warrants;
(c) the aggregate number of such Debt Warrants;
(d) the designation and terms of the Debt Securities purchasable upon
exercise of such Debt Warrants;
(e) the designation and terms of the Debt Securities with which such Debt
Warrants are issued and the number of such Debt Warrants issued with
each such Debt Security;
(f) the date from and after which such Debt Warrants and any Debt
Securities issued therewith will be separately transferable;
(g) the principal amount of Debt Securities purchasable upon exercise of a
Debt Warrant and the price at which such principal amount of Debt
Securities may be purchased upon exercise (which price may be payable
in cash, securities, or other property);
(h) the date on which the right to exercise such Debt Warrants shall
commence and the date on which such right shall expire;
(i) the minimum or maximum amount of such Debt Warrants that may be
exercised at any one time;
(j) whether the Debt Warrants represented by the Debt Warrant
certificates, or Debt Securities that may be issued upon exercise of
the Debt Warrants, will be issued in registered or bearer form;
(k) information with respect to book-entry procedures;
(l) the currency, or currency unitsif other than U.S. dollars, in which the offering
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price and the exercise price are payable;
(m) a discussion of material United States federal income tax
considerations;
(n) the redemption or call provisions applicable to such Debt Warrants;
and
(o) any additional terms of the Debt Warrants, including terms,
procedures, and limitations relating to the exchange and exercise of
such Debt Warrants.
STOCK WARRANTS
The Prospectus Supplement relating to any particular issue of Warrants to
issue Preferred Stock, Marathon Stock or Steel Stock will describe the terms of
such Warrants, including the following (if applicable):
(a) the title of such Warrants;
(b) the offering price for such Warrants;
(c) the aggregate number of such Warrants;
(d) the designation and terms of the Preferred Stock, Marathon Stock or
Steel Stock purchasable upon exercise of such Warrants;
(e) the designation and terms of the USX Securities with which such
Warrants are issued and the number of such Warrants issued with each
such USX Security;
(f) the date from and after which such Warrants and any USX Securities
issued therewith will be separately transferable;
(g) the number of shares of Preferred Stock, Marathon Stock or Steel Stock
purchasable upon exercise of a Warrant and the price at which such
shares may be purchased upon exercise;
(h) the date on which the right to exercise such Warrants shall commence
and the date on which such right shall expire;
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27
(i) the minimum or maximum amount of such Warrants that may be exercised
at any one time;
(j) the currency, or currency unitsif other than U.S. dollars, in which the offering price
and the exercise price are payable;
(k) a discussion of material United States federal income tax
considerations;
(l) the antidilution provisions of such Warrants;
(m) the redemption or call provisions applicable to such Warrants; and
(n) any additional terms of the Warrants, including terms, procedures, and
limitations relating to the exchange and exercise of such Warrants.
CONVERTIBLE OR EXCHANGEABLE SECURITIES
If any Debt Security, Preferred Stock or Warrant is converted or exchanged
into any other security the conversion or exchange terms thereof will be set
forth in the Prospectus Supplement issued for the sale of such convertible or
exchangeable security. These terms will include some or all of the terms
described for Warrants.
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PLAN OF DISTRIBUTION
USX may issue the Offered Securitiesoffered securities to or through underwriters or
directly to purchasers, agents or dealers or through brokers. Offers to purchase
Offered
Securitiesoffered securities may be solicited directly by USX or brokers or dealers
designated by USX from time to time. Any such broker or dealer may be deemed to
be an underwriter as that term is defined in the Securities Act, and will be
named in the Prospectus Supplement, together with the compensation payable
thereto by USX in connection with the sale of the Offered Securities.
Underwriters, agents, brokers and dealers may be entitled under agreements
which may be entered into with USX to indemnification by USX against certain
civil liabilities, including liabilities under the Securities Act. Such
underwriters, agents, brokers and dealers may engage in transactions with, or
perform services for, USX in the ordinary course of business.
Also, USX may issue the Offered Securitiesoffered securities in connection with
acquisitions. The Prospectus may be used in connection with the re-offering of
the Offered
Securitiesoffered securities by persons receiving such securities in connection with
an acquisition who may be deemed underwriters under the Securities Act of 1933.
The place and time of delivery for the Offered Securitiesoffered securities in respect of
which this Prospectus is delivered will be set forth in the accompanying
Prospectus Supplement.
VALIDITY OF SECURITIES
The validity of the issuance of the Offered Securitiesoffered securities will be passed upon
for USX by D. D. Sandman, Esq., General Counsel, Secretary and Senior Vice
President--Human Resources & Public Affairs of USX or by J.A.J. A. Hammerschmidt,
Esq., Assistant General Counsel--Corporate and Assistant Secretary of USX.
Messrs. Sandman and Hammerschmidt, in their respective capacities as set forth
above, are paid salaries by USX, participate in various employee benefit plans
offered by USX and own common stock of USX.
EXPERTS
The consolidated financial statements of USX as of December 31, 19971998 and
19961997 and for each of the three years in the period ended December 31, 19971998
incorporated in this Prospectus by reference to USX's Annual Report on Form 10-K
for the year ended December 31, 19971998 have been so incorporated in reliance on
the reports of Price WaterhousePricewaterhouseCoopers LLP, independent accountants, given on the
authority of said firm as experts in auditing and accounting.
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APPENDIX I
SUMMARY OF USX COMMON STOCK
The following summary is qualified in its entirety by the detailed
information appearing elsewhere in, or incorporated by reference in, this
Prospectus. Capitalized terms used in this summary have the respective meanings
ascribed to them elsewhere in this Prospectus.
USX COMMON STOCK
---------------------------------------------------------------------------
USX-MARATHON GROUP USX-U.S. STEEL GROUP
COMMON STOCK COMMON STOCK
------------------ --------------------
BUSINESS: Energy business. Steel and other businesses.
NUMBER OF SHARES
OUTSTANDING AS OF
APRIL 30, 1998: 289,202,123 86,835,989
VOTING RIGHTS: Except as otherwise described Except as otherwise described
herein, the Marathon Stock will vote herein, the Steel Stock will vote as
as a single class with the Steel a single class with the Marathon
Stock. The Marathon Stock will have Stock. Each share of Steel Stock
one vote per share. will have a variable number of votes
based upon the relative Market
Values of one share of Steel Stock
and one share of Marathon Stock, and
may have more than, less than or
exactly one vote per share.
DIVIDENDS: Dividends on the Marathon Stock will Dividends on the Steel Stock will be
be paid at the discretion of the paid at the discretion of the Board
Board based primarily upon the based primarily upon the long-term
long-term earnings and cash flow earnings and cash flow capabilities
capabilities of the Marathon Group, of the U.S. Steel Group, as well as
as well as on the dividend policies on the dividend policies of publicly
of publicly traded energy companies. traded steel companies. Dividends
Dividends will be payable out of all will be payable out of the lesser of
funds of USX legally available (i) all funds of USX legally
therefor. available therefor and (ii) the
Available Steel Dividend Amount.
EXCHANGE AND REDEMPTION: USX may exchange the Marathon Stock USX may exchange the Steel Stock for
for shares of a wholly owned shares of a wholly owned subsidiary
subsidiary that holds all the assets that holds all the assets and
and liabilities of the Marathon liabilities of the U.S. Steel Group.
Group.
If USX sells all or substantially
all of the properties and assets of
the U.S. Steel Group, USX must
either: (i) pay a special dividend
to holders of Steel Stock equal to
the Net Proceeds; or (ii) redeem
shares of Steel Stock having an
aggregate Market Value closest to
the value of the Net Proceeds for an
amount equal to the Net Proceeds; or
(iii) exchange each share of Steel
Stock for a number of shares of
Marathon Stock equal to 110% of the
ratio of the Market Values of one
share of Steel Stock to one share of
Marathon Stock.
LIQUIDATION: In the event of the liquidation of In the event of the liquidation of
USX, holders of Marathon Stock will USX, holders of Steel Stock will
share the funds, if any, remaining share the funds, if any, remaining
for distribution to common for distribution to common
stockholders with holders of Steel stockholders with holders of
Stock based upon the relative market Marathon Stock based upon the
capitalizations of each. relative market capitalizations of
each.
LISTING: NYSE under the symbol "MRO". NYSE under the symbol "X".
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PART II
INFORMATION NOT REQUIRED IN PROSPECTUS
ITEM 14. OTHER EXPENSES OF ISSUANCE AND DISTRIBUTION.
Securities and Exchange Commission filing fee............... $295,000$278,000
Costs of printing and engraving............................. 100,000
Accounting fees and expenses................................ 10,000
Miscellaneous expenses...................................... 100,000
--------
Total............................................. $505,000Total.................................................. $488,000
========
All of the foregoing expenses are estimated except for the Securities and
Exchange Commission filing fee.
ITEM 15. INDEMNIFICATION OF DIRECTORS AND OFFICERS.
Article V of the Corporation's By-Laws provides that the Corporation shall
indemnify to the fullest extent permitted by law any person who is made or is
threatened to be made a party or is involved in any action, suit, or proceeding
whether civil, criminal, administrative or investigative by reason of the fact
that he is or was a director, officer, employee or agent of the Corporation or
is or was serving at the request of the Corporation as an officer, director,
employee or agent of another corporation, partnership, joint venture, trust,
enterprise, or nonprofit entity.
The Corporation is empowered by Section 145 of the Delaware General
Corporation Law, subject to the procedures and limitations stated therein, to
indemnify any person who was or is a party or is threatened to be made a party
to any threatened, pending or completed action, suit or proceeding, whether
civil, criminal, administrative or investigative (other than an action by or in
the right of the Corporation) by reason of the fact that such person is or was
an officer, employee, agent or director of the Corporation, or is or was serving
at the request of the Corporation as a director, officer, employee or agent of
another corporation, partnership, joint venture, trust or other enterprise
against expenses (including attorneys' fees), judgments, fines and amounts paid
in settlement actually and reasonably incurred by such person in connection with
such action, suit or proceeding if he acted in good faith and in a manner he
reasonably believed to be in or not opposed to the best interests of the
Corporation, and, with respect to any criminal action or proceeding, had no
reasonable cause to believe his conduct was unlawful. The Corporation may
indemnify any such person against expenses (including attorneys' fees) in an
action by or in the right of the Corporation under the same conditions, except
that no indemnification is permitted without judicial approval if such person is
adjudged to be liable to the Corporation. To the extent a director or officer is
successful on the merits or otherwise in the defense of any action referred to
above, the Corporation must indemnify him against the expenses which he actually
and reasonably incurred in connection therewith.
Policies of insurance are maintained by the Corporation under which
directors and officers of the Corporation are insured, within the limits and
subject to the limitations of the policies, against certain expenses in
connection with the defense of actions, suits or proceedings, and certain
liabilities which might be imposed as a result of such actions,
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35
suits or proceedings, to which they are parties by reason of being or having
been such directors or officers.
The Corporation's Restated Certificate of Incorporation provides that no
director shall be personally liable to the Corporation or its stockholders for
monetary damages for any breach of fiduciary duty by such director as a
director, except (i) for breach of the director's duty of loyalty to the
Corporation or its stockholders, (ii) for acts or omissions not in good faith or
which involve intentional misconduct or a knowing violation of law, (iii)
pursuant to Section 174 of the Delaware General Corporation Law, or (iv) for any
transaction from which the director derived an improper personal benefit.
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30
ITEM 16. LIST OF EXHIBITS AND FINANCIAL STATEMENT SCHEDULES.
(a) See Exhibit Index.
(b) All schedules are omitted because they are not applicable or the
required information is contained in the respective financial statements or
notes thereto.
ITEM 17. UNDERTAKINGS.
(a) The undersigned registrant hereby undertakes:
(1) To file, during any period in which offers or sales are being made,
a post-effective amendment to thisthe registration statement:
(i) To include any prospectus required by Section 10(a)(3) of the
Securities Act of 1933;
(ii) To reflect in the prospectus any facts or events arising
after the effective date of the registration statement (or the most
recent post-effective amendment thereof) which, individually or in the
aggregate, represent a fundamental change in the information set forth
in the registration statement;statement.
(iii) To include any material information with respect to the
plan of distribution not previously disclosed in the registration
statement or any material change to such information in the
registration statement;
Provided however, that paragraphs (a)(1)(i) and (a)(1)(ii) do not
apply if the information required to be included in a post-effective
amendment by those paragraphs is contained in periodic reports filed by
the registrant pursuant to Section 13 or Section 15(d) of the
Securities Exchange Act of 1934 that are incorporated by reference
herein.
(2) That, for the purpose of determining any liability under the
Securities Act of 1933, each such post-effective amendment shall be deemed
to be a new registration statement relating to the securities offered
therein, and the offering of such securities at that time shall be deemed
to be the bona fide offering thereof.
(3) To remove from registration by means of post-effective amendment
any of the securities being registered which remain unsold at the
termination of the offering.
(b) USX hereby undertakes that, for purposes of determining any liability
under the Securities Act of 1933, each filing of USX's annual report pursuant to
Section 13(a) or Section 15(d) of the Securities Exchange Act of 1934 that is
incorporated by reference in
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36
the Registration Statement shall be deemed to be a new registration statement
relating to the securities offered therein and the offering of such securities
at that time shall be deemed to be the initial bona fide offering thereof.
(c) Insofar as indemnification for liabilities arising under the Securities
Act of 1933 may be permitted to directors, officers and controlling persons of
USX pursuant to the foregoing provisions, or otherwise, USX has been advised
that in the opinion of the Securities and Exchange Commission such
indemnification is against public policy as expressed in the Securities Act of
1933 and is, therefore, unenforceable. In the event that a claim for
indemnification against such liabilities (other than the payment by USX of
expenses incurred or paid by a director, officer or controlling person of USX in
the successful defense of any action, suit or proceeding) is asserted by such
director, officer or controlling person in connection with the securities being
registered, USX will, unless in the opinion of its counsel the matter has been
settled by controlling precedent, submit to a court of appropriate jurisdiction
the question whether such indemnification is against public policy as expressed
in the Securities Act of 1933 and will be governed by the final adjudication of
such issue.
II-2II-3
3137
SIGNATURES
PURSUANT TO THE REQUIREMENTS OF THE SECURITIES ACT OF 1933, THE REGISTRANT
CERTIFIES THAT IT HAS REASONABLE GROUNDS TO BELIEVE THAT IT MEETS ALL OF THE
REQUIREMENTS FOR FILING ON FORM S-3 AND HAS DULY CAUSED THIS REGISTRATION
STATEMENT TO BE SIGNED ON ITS BEHALF BY THE UNDERSIGNED, THEREUNTO DULY
AUTHORIZED, IN THE CITY OF PITTSBURGH, COMMONWEALTH OF PENNSYLVANIA, ON JUNE 15,
1998.OCTOBER
12, 1999.
USX CORPORATION
(Registrant)
/S/By /s/ KENNETH L. MATHENY
By....................................................------------------------------------
Kenneth L. Matheny, Vice President
& Comptroller
Pittsburgh, Pennsylvania
PURSUANT TO THE REQUIREMENTS OF THE SECURITIES ACT, THIS REGISTRATION
STATEMENT HAS BEEN SIGNED BELOW BY THE FOLLOWING PERSONS IN THE CAPACITIES
INDICATED ON JUNE 15, 1998.OCTOBER 12, 1999.
SIGNATURE TITLE
--------- TITLE-----
* Chairman of the Board of Directors,
...........................................- ------------------------------------------ Chief Executive Officer and Director
THOMASThomas J. USHERUsher (Principal Executive Officer)
* Vice Chairman
...........................................* & Chief Financial Officer
ROBERT- ------------------------------------------ and Director
Robert M. HERNANDEZ and DirectorHernandez (Principal Financial Officer)
/S//s/ KENNETH L. MATHENY Vice President & Comptroller
...........................................- ------------------------------------------ (Principal Accounting Officer)
KENNETHKenneth L. MATHENYMatheny
* Director
...........................................
NEIL- ------------------------------------------
Neil A. ARMSTRONGArmstrong
* Director
...........................................
VICTOR- ------------------------------------------
Victor G. BEGHINIBeghini
* Director
...........................................
JEANETTE GRASSELLI BROWN- ------------------------------------------
Jeanette Grasselli Brown
Director
- ------------------------------------------
J. Gary Cooper
* Director
...........................................
CHARLES- ------------------------------------------
Charles A. CORRYCorry
* Director
...........................................
CHARLES- ------------------------------------------
Charles R. LEE
* Director
...........................................
PAUL E. LEGO
* Director
...........................................
RAY MARSHALLLee
II-3II-4
3238
SIGNATURE TITLE
--------- TITLE -----
* Director
...........................................
JOHN F. MCGILLICUDDY- ------------------------------------------
Paul E. Lego
Director
- ------------------------------------------
Ray Marshall
* Director
...........................................
JOHN M. RICHMAN- ------------------------------------------
John F. McGillicuddy
* Director
...........................................
SETH E. SCHOFIELD
Director
...........................................
JOHN W. SNOW- ------------------------------------------
John M. Richman
* Director
...........................................
PAUL J. WILHELM- ------------------------------------------
Seth E. Schofield
* Director
...........................................
DOUGLAS- ------------------------------------------
John W. Snow
* Director
- ------------------------------------------
Paul J. Wilhelm
* Director
- ------------------------------------------
Douglas C. YEARLEY
/S/ KENNETH L. MATHENY
*By ......................................
KENNETH L. MATHENY, ATTORNEY-IN-FACTYearley
II-4*By /s/ KENNETH L. MATHENY
-----------------------------------------
Kenneth L. Matheny, Attorney-in-Fact
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3339
EXHIBIT INDEX
EXHIBIT
NUMBER
- -------------
1. Form of Underwriting Agreement. (Incorporated by Reference
to Exhibit 1 to Registration Statement No. 33-52937.)
4.1 Restated Certificate of Incorporation of USX dated SeptemberMay 1,
1996,1999 as amended and currently in effect. (Incorporated by reference to
Exhibit 3(a) to USX's Quarterly Report on
Form 10-Q for the quarter ended March 31, 1997.)
4.2 By-laws of USX dated July 30, 1996, as amended and currently
in effect. (Incorporated by reference to Exhibit 3(a)3.1 to USX's Report on Form 10-Q for the quarter
ended June 30, 1996.1999.)
4.34.2 By-laws of USX dated May 1, 1999, as amended and currently
in effect. (Incorporated by reference to Exhibit 3.2 to
USX's Report on Form 10-Q for the quarter ended June 30,
1999.)
4.3(a) Form of Indenture dated as of March 15, 1993, forrelating to senior Debt Securities with
Form of senior Debt Securities.
(Incorporated by Reference4.3(b) Form of Indenture relating to Exhibit 4.1 to Registration Statement No. 33-60142.)subordinated Debt Securities
with Form of subordinated Debt Securities.
4.4 Amended and Restated Rights Agreement. (Incorporated by Referencereference to the USX Form
8 Amendment to Form 8-A Filedfiled on October 5, 1992.September 28, 1999. File No. 1-5153.)
5. Opinion and consent of J.A. Hammerschmidt, Esq.
12.1 Computation of Ratio of Earnings to Combined Fixed Charges
and Preferred Stock Dividends. (Incorporated by Referencereference to
the USXUSX's Report on Form 10-K for year ended December 31, 19971998
and the
USXUSX's Report on Form 10-Q for Quarterthe quarter ended March 31, 1998.June 30,
1999.)
12.2 Computation of Ratio of Earnings to Fixed Charges.
(Incorporated by Reference to the USXUSX's Report on Form 10-K for
year ended December 31, 19971998 and the USXUSX's Report on Form 10-Q
for Quarterthe quarter ended March 31, 1998.June 30, 1999.)
23.1 Consent of Price WaterhousePricewaterhouseCoopers LLP.
23.2 Consent of J.A. Hammerschmidt, Esq. (Included in Exhibit 5.)
24. Powers of Attorney.
25. Form T-1 Statement of eligibilityEligibility under the Trust Indenture
Act of Trustee. (Incorporated by
Reference1939, as amended, of Harris Trust and Savings Bank,
as Trustee with respect to Exhibit 25the Indenture relating to Registration Statement No.
33-60142.)senior
Debt Securities and as Trustee with respect to the Indenture
relating to subordinated Debt Securities.
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