UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
-----------------------
FORM 8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d) of
The Securities Exchange Act of 1934
-----------------------
December 31, 2001
Date of Report (Date of earliest event reported)
MARATHON OIL CORPORATION
------------------------------------------------------------------------------
(Exact Name of Registrant as Specified in Charter)
Delaware 1-5153 25-0996816
-------------------- ----------------------- ------------------
State or Other Jurisdiction of Commission File Number IRS Employer
Incorporation Identification Number
5555 San Felipe Road, Houston, TX 77056-2723
-----------------------------------------------
(Address of Principal Executive Offices)
(713) 629-6600
------------------------------
(Registrant's telephone number, including area code)
USX CORPORATION
--------------------------------------------------------
(Former Name or Former Address, if Changed Since Last Report)
ITEM 2 Acquisition or Disposition of Assets
The Separation
On December 31, 2001, USX Corporation separated its steel and
energy businesses pursuant to the Agreement and Plan of Reorganization,
dated as of July 31, 2001 (the "Plan of Reorganization"), by and between
USX Corporation and United States Steel LLC (the "Separation").
Pursuant to the Plan of Reorganization, among other things: (1)
USX Corporation was renamed Marathon Oil Corporation, which owns and
operates USX Corporation's energy businesses; (2) United States Steel LLC
was converted into a Delaware corporation named United States Steel
Corporation which owns and operates USX Corporation's steel businesses; (3)
each issued and outstanding share of USX--U. S. Steel Group Common Stock
was converted into the right to receive one share of common stock of United
States Steel Corporation; (4) each issued and outstanding share of
USX--Marathon Group Common Stock remains outstanding, unaffected by the
Separation, as the sole outstanding common stock of Marathon Oil
Corporation; and (5) each outstanding share of 6.50% Cumulative Convertible
Preferred Stock of USX Corporation was converted into the right to receive,
in cash, $50. Additional information regarding the Separation can be found
in the Proxy Statement/Prospectus of USX Corporation, dated September 20,
2001, and filed with the Securities and Exchange Commission on Form S-4.
In connection with the Separation and pursuant to the Plan of
Reorganization, on January 2, 2002, the 6.75% Convertible Quarterly Income
Preferred Securities (QUIPS[SM]) of USX Capital Trust I, a wholly owned
subsidiary of USX Corporation, were redeemed for $50.00 in cash, plus
accrued and unpaid dividends thereon through January 2, 2002. Also, in
connection with the Separation, on December 31, 2002, the 8.75% Cumulative
Monthly Income Preferred Shares, Series A (MIPS[R]), of USX Capital LLC, a
wholly owned subsidiary of USX Corporation, were redeemed for $25.00 in
cash, plus accrued and unpaid dividends thereon through December 31, 2001.
ITEM 7. Financial Statements, Pro Forma Financial Information and Exhibits.
(a) Not applicable.
(b) To be filed by amendment to this Current Report on Form 8-K,
(c) Exhibits
Exhibit Number Description of Exhibit
99.1 Press Release - "USX to Complete Previously Announced
Spin-Off of its Steel Business"
99.1 Restated Certificate of Incorporation of Marathon Oil
Corporation.
99.2 Tax Sharing Agreement between USX Corporation
(renamed Marathon Oil Corporation) and United States
Steel LLC (converted into United States Steel
Corporation).
99.3 Transition Services Agreement between USX Corporation
(renamed Marathon Oil Corporation) and United States
Steel LLC (converted into United States Steel
Corporation).
99.4 Financial Matters Agreement between USX Corporation
(renamed Marathon Oil Corporation) and United States
Steel LLC (converted into United States Steel
Corporation).
99.5 Insurance Assistance Agreement between USX
Corporation (renamed Marathon Oil Corporation) and
United States Steel LLC (converted into United States
Steel Corporation).
99.6 License Agreement between USX Corporation (renamed
Marathon Oil Corporation) and United States Steel LLC
(converted into United States Steel Corporation).
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of
1934, the registrant has duly caused this report to be signed on its behalf
by the undersigned hereunto duly authorized.
Dated: January 3, 2002 MARATHON OIL CORPORATION
By: /s/ A.G. Adkins
------------------------
Name: Albert G. Adkins
Title: Vice President -
Accounting and
Controller
EXHIBIT 99.1
PITTSBURGH, Dec. 31 /PRNewswire/ -- USX Chairman and CEO Thomas J.
Usher confirmed today that the previously announced plan to spin off its
wholly owned subsidiary, United States Steel Corporation (NYSE: X) will be
effective at 11:59 p.m. on December 31, 2001. USX Corporation stockholders
had overwhelmingly approved the Agreement and Plan of Reorganization at a
special stockholders meeting held in October.
As previously announced, USX has received a private letter ruling
from the Internal Revenue Service confirming that the spin-off of United
States Steel Corporation will be tax free to USX and the holders of its
common stock. Immediately preceding the separation, United States Steel LLC
will be converted into a corporation named United States Steel Corporation
(U. S. Steel), and all subsidiaries of United States Steel LLC will become
subsidiaries of United States Steel Corporation. U. S. Steel will be
headquartered in Pittsburgh.
Upon the effectiveness of the separation, each share of USX-U. S.
Steel Group Common Stock will be converted into the right to receive one
share of United States Steel Corporation common stock. Stockholders of
record will be receiving letters of transmittal and instructions concerning
the procedures for exchanging their share certificates.
USX-Marathon Group Common Stock will remain outstanding as the
sole common stock of USX Corporation, which will change its name to
Marathon Oil Corporation (NYSE: MRO), and will continue to own and operate
the remaining energy business of Marathon Oil Company. Marathon's
headquarters will be in Houston.
In addition, upon the effectiveness of the separation, all
outstanding shares of 6.50% Cumulative Convertible Preferred Stock of USX
Corporation will be converted into the right to receive $50.00 in cash plus
accrued but unpaid dividends, and all outstanding 6.75% Convertible
Quarterly Income Preferred Securities of USX Capital Trust I (QUIPS) will
be redeemed at their face value plus accrued but unpaid distributions.
Holders of record of these issues will be receiving letters of transmittal
and instructions concerning the procedures for redeeming their shares. The
8.75% Cumulative Monthly Income Preferred Share, Series A, of USX Capital
LLC (MIPS) had previously been called for redemption at the close of
business today at their face value plus accrued but unpaid dividends.
Usher, who has served as chairman of the board of USX since 1995,
will become chairman, CEO and president of United States Steel Corporation
and non- executive chairman of Marathon Oil Corporation.
"We are enthusiastic about the separation and believe it will allow the two
companies to focus on their core businesses and to make the critical
acquisitions and investments necessary to grow each business," Usher said.
"United States Steel Corporation and Marathon Oil Corporation are now well
positioned to succeed and prosper."
(For more information on U. S. Steel, visit our Website at
http://www.usx.com or http://www.ussteel.com.)
Visit USX Corporation's web site at http://www.usx.com. USX
Corporation press releases are available through Company News On-Call at
http://www.prnewswire.com/gh/cnoc/comp/929150.html; or at
http://www.prnewswire.com/gh/cnoc/comp/133204.html.
EXHIBIT 99.2
RESTATED
CERTIFICATE OF INCORPORATION
OF
MARATHON OIL CORPORATION
FIRST: The name of the Corporation (which is hereinafter referred
to as the "Corporation") is
MARATHON OIL CORPORATION
SECOND: Its registered office and place of business in the State
of Delaware is located at 1209 Orange Street, in the City of Wilmington,
County of New Castle. The registered agent in charge thereof upon whom
process against the Corporation may be served is The Corporation Trust
Company.
THIRD: The purposes of the Corporation are to engage in any lawful
act or activity for which corporations may be organized under the General
Corporation Law of Delaware, and without limiting the foregoing to engage
in integrated steel operations and to develop, mine, produce, manufacture,
construct, transport, buy, hold, sell and generally deal in products,
materials, property, both tangible and intangible, and services of all
kinds.
FOURTH: The total number of shares of capital stock which the
Corporation shall have authority to issue is Five Hundred and Seventy Six
Million (576,000,000), of which Five Hundred and Fifty Million
(550,000,000) shares shall be Common Stock having a par value of one dollar
($1.00) per share and Twenty Six Million (26,000,000) shares shall be
shares of Preferred Stock, without par value (hereinafter called "Preferred
Stock") and
A statement of the designations of the Preferred Stock or of any
series thereof, and the powers, preferences and relative, participating,
optional or other special rights, and qualifications, limitations or
restrictions thereof, or of the authority of the Board of Directors to fix
by resolution or resolutions such designations and other terms not fixed by
the Certificate of Incorporation, is as follows:
1. The Preferred Stock may be issued 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 and expressed in the
resolution or resolutions providing for the issue of such series
adopted by the Board of Directors of the Corporation, subject to
the limitations prescribed by law and in accordance with the
provisions hereof, the Board of Directors being hereby expressly
vested with authority to adopt any such resolution or resolutions.
The authority of the Board of Directors with respect to each such
series shall include, but not be limited to, the determination or
fixing of the following:
(i) The distinctive designation
and number of shares comprising such
series, which number may (except where
otherwise provided by the Board of
Directors in creating such series) be
increased or decreased (but not below
the number of shares then outstanding)
from time to time by like action of the
Board of Directors;
(ii) The dividend rate of such
series, the conditions and times upon
which such dividends shall be payable,
the relation which such dividends shall
bear to the dividends payable on any
other class or classes of stock or
series thereof, or any other series of
the same class, and whether dividends
shall be cumulative or non-cumulative;
(iii) The conditions upon which
the shares of such series shall be
subject to redemption by the
Corporation and the times, prices and
other terms and provisions upon which
the shares of the series may be
redeemed;
(iv) Whether or not the shares
of the series shall be subject to the
operation of a retirement or sinking
fund to be applied to the purchase or
redemption of such shares and, if such
retirement or sinking fund be
established, the annual amount thereof
and the terms and provisions relative
to the operation thereof;
(v) Whether or not the shares
of the series shall be convertible into
or exchangeable for shares of any other
class or classes, with or without par
value, or of any other series of the
same class, and, if provision is made
for conversion or exchange, the times,
prices, rates, adjustments, and other
terms and conditions of such conversion
or exchange;
(vi) Whether or not the shares
of the series shall have voting rights,
in addition to the voting rights
provided by law, and, if so, subject to
the limitation hereinafter set forth,
the terms of such voting rights;
(vii) The rights of the shares
of the series in the event of voluntary
or involuntary liquidation,
dissolution, or upon the distribution
of assets of the Corporation;
(viii) Any other powers,
preferences and relative,
participating, optional or other
special rights, and qualifications,
limitations or restrictions thereof, of
the shares of such series, as the Board
of Directors may deem advisable and as
shall not be inconsistent with the
provisions of this Certificate of
Incorporation.
2. The holders of shares of the Preferred Stock of each
series shall be entitled to receive, when and as declared by the
Board of Directors, out of funds legally available for the payment
of dividends, dividends at the rates fixed by the Board of
Directors for such series, and no more, before any dividends,
other than dividends payable in Common Stock, shall be declared
and paid, or set apart for payment, on the Common Stock with
respect to the same dividend period.
3. Whenever, at any time, dividends on the then
outstanding Preferred Stock as may be required with respect to any
series outstanding shall have been paid or declared and set apart
for payment on the then outstanding Preferred Stock, and after
complying with respect to any retirement or sinking fund or funds
for any series of Preferred Stock, the Board of Directors may,
subject to the provisions of the resolution or resolutions
creating any series of Preferred Stock, declare and pay dividends
on the Common Stock, and the holders of shares of the Preferred
Stock shall not be entitled to share therein.
4. The holders of shares of the Preferred Stock of each
series shall be entitled upon liquidation or dissolution or upon
the distribution of the assets of the Corporation to such
preferences as provided in the resolution or resolutions creating
such series of Preferred Stock, and no more, before any
distribution of the assets of the Corporation shall be made to the
holders of shares of the Common Stock.
5. Except as otherwise provided by a resolution or
resolutions of the Board of Directors creating any series of
Preferred Stock or by the General Corporation Law of Delaware, the
holders of shares of the Common Stock issued and outstanding shall
have and possess the exclusive right to notice of stockholders'
meetings and the exclusive power to vote. The holders of shares of
the Preferred Stock issued and outstanding shall, in no event, be
entitled to more than one vote for each share of Preferred Stock
held by them unless otherwise required by law.
Terms of the Preferred Stocks are as follows:
Series A Junior Preferred Stock
Section 1. Designation and Amount. This resolution shall
provide for a single series of preferred stock, the designation of
which shall be "Series A Junior Preferred Stock", without par
value, and the number of shares constituting such series shall be
Eight Million (8,000,000).
Section 2. Dividends and Distributions.
(A) Subject to the prior and superior rights of
the holders of any shares of any series of Preferred
Stock ranking prior and superior to the shares of Series
A Junior Preferred Stock with respect to dividends, the
holders of shares of Series A Junior Preferred Stock
shall be entitled to receive, when, as and if declared by
the Board of Directors out of funds legally available for
the purpose, quarterly dividends payable in cash on the
first day of March, June, September and December in each
year (each such date being referred to herein as a
"Quarterly Dividend Payment Date"), commencing on the
first Quarterly Dividend Payment Date after the first
issuance of a share or fraction of a share of Series A
Junior Preferred Stock, in an amount per share (rounded
to the nearest cent) equal to the greater of (a) $5.00 or
(b) subject to the provision for adjustment hereinafter
set forth, 100 times the aggregate per share amount of
all cash dividends, and 100 times the aggregate per share
amount (payable in kind) of all non-cash dividends or
other distributions other than a dividend payable in
shares of Common Stock or a subdivision of the
outstanding shares of Common Stock (by reclassification
or otherwise), to be or being declared on the Common
Stock, par value $1.00 per share, of the Corporation (the
"Common Stock") with respect to the same dividend period.
If the Quarterly Dividend Payment Date is a Saturday,
Sunday or legal holiday then such Quarterly Dividend
Payment Date shall be the first immediately preceding
calendar day which is not a Saturday, Sunday or legal
holiday. In the event the Corporation shall at any time
after October 10, 1989 (the "Rights Declaration Date")
(i) declare any dividend on Common Stock payable in
shares of Common Stock, (ii) subdivide the outstanding
Common Stock, or (iii) combine the outstanding Common
Stock into a smaller number of shares, then in each such
case the amount to which holders of shares of Series A
Junior Preferred Stock were entitled immediately prior to
such event under clause (b) of the preceding sentence
shall be adjusted by multiplying such amount by a
fraction the numerator of which is the number of shares
of Common Stock outstanding immediately after such event
and the denominator of which is the number of shares of
Common Stock that were outstanding immediately prior to
such event.
(B) The Corporation shall declare a dividend or
distribution on the Series A Junior Preferred Stock as
provided in paragraph (A) above immediately prior to the
time it declares a dividend or distribution on the Common
Stock (other than a dividend payable in shares of Common
Stock); provided that, in the event no dividend or
distribution shall be declared on the Common Stock with
respect to a particular dividend period, a dividend of
$5.00 per share on the Series A Junior Preferred Stock
shall nevertheless be payable on such Quarterly Dividend
Payment Date with respect to such quarterly period.
(C) Dividends shall begin to accrue and be
cumulative on outstanding shares of Series A Junior
Preferred Stock from the Quarterly Dividend Payment Date
next preceding the date of issue of such shares of Series
A Junior Preferred Stock, unless the date of issue of
such shares is prior to the record date for the first
Quarterly Dividend Payment Date, in which case dividends
on such shares shall begin to accrue from the date of
issue of such shares, or unless the date of issue is a
Quarterly Dividend Payment Date or is a date after the
record date for the determination of holders of shares of
Series A Junior Preferred Stock entitled to receive a
quarterly dividend and before such Quarterly Dividend
Payment Date, in either of which events such dividends
shall begin to accrue and be cumulative from such
Quarterly Dividend Payment Date. Accrued but unpaid
dividends shall not bear interest. Dividends paid on the
shares of Series A Junior Preferred Stock in an amount
less than the total amount of such dividends at the time
accrued and payable on such shares shall be allocated pro
rata on a share-by-share basis among all such shares at
the time outstanding. The Board of Directors may fix a
record date for the determination of holders of shares of
Series A Junior Preferred Stock entitled to receive
payment of a dividend or distribution declared thereon,
which record date shall be no more than 30 days prior to
the date fixed for the payment thereof. Dividends in
arrears may be declared and paid at any time, without
reference to any Quarterly Dividend Payment Date, to
holders of record on such date, not exceeding 45 days
preceding the payment date thereof, as may be fixed by
the Board of Directors.
(D) Except as hereinafter provided, no dividends
shall be declared or paid or set apart for payment on the
shares of Series A Junior Preferred Stock for any period
if the Corporation shall be in default in the payment of
any dividends (including cumulative dividends, if
applicable) on any shares of Preferred Stock ranking, as
to dividends, prior to the Series A Junior Preferred
Stock, unless the same shall be contemporaneously
declared and paid.
(E) Dividends payable on the Series A Junior
Preferred Stock for the initial dividend period and for
any period less than a full quarterly period, shall be
computed on the basis of a 360-day year of 30-day months.
Section 3. Voting Rights. The holders of shares of Series
A Junior Preferred Stock shall have the following voting rights:
(A) Each share of Series A Junior Preferred
Stock shall entitle the holder thereof to one vote on all
matters submitted to a vote of the stockholders of the
Corporation. The holders of Series A Junior Preferred
Stock shall be entitled to notice of all meetings of the
stockholders of the Corporation.
(B) Except as otherwise provided herein or by
law, the holders of shares of Series A Junior Preferred
Stock and the holders of shares of Common Stock shall
vote together as one class on all matters submitted to a
vote of stockholders of the Corporation.
(C) If, on the date used to determine
stockholders of record for any meeting of stockholders
for the election of directors, a default in preference
dividends on the Preferred Stock shall exist, the number
of directors constituting the Board of Directors of the
Corporation shall be increased by two, and the holders of
the Preferred Stock of all series (whether or not the
holders of such series of Preferred Stock would be
entitled to vote for the election of directors if such
default in preference dividends did not exist), shall
have the right at such meeting, voting together as a
single class without regard to series, to the exclusion
of the holders of Common Stock, to elect two directors of
the Corporation to fill such newly created directorships.
Each director elected by the holders of shares of
Preferred Stock (herein called a "Preferred Director"),
shall continue to serve as such director for the full
term for which he shall have been elected,
notwithstanding that prior to the end of such term a
default in preference dividends shall cease to exist. Any
Preferred Director may be removed by, and shall not be
removed except by, the vote of the holders of record of
the outstanding shares of Preferred Stock, voting
together as a single class without regard to series, at a
meeting of the stockholders, or of the holders of shares
of Preferred Stock, called for the purpose. So long as a
default in any preference dividends on the Preferred
Stock shall exist (i) any vacancy in the office of a
Preferred Director may be filled (except as provided in
the following clause (ii)) by an instrument in writing
signed by the remaining Preferred Director and filed with
the Corporation and (ii) in the case of the removal of
any Preferred Director, the vacancy may be filled by the
vote of the holders of the outstanding shares of
Preferred Stock, voting together as a single class
without regard to series, at the same meeting at which
such removal shall be voted. Each director appointed as
aforesaid by the remaining Preferred Director shall be
deemed, for all purposes hereof, to be a Preferred
Director. Whenever the term of office of the Preferred
Directors shall end and no default in preference
dividends shall exist, the number of directors
constituting the Board of Directors of the Corporation
shall be reduced by two. For the purposes of this
paragraph (C), a "default in preference dividends" on the
Preferred Stock shall be deemed to have occurred whenever
the amount of accrued and unpaid dividends upon any
series of the Preferred Stock shall be equivalent to six
full quarterly dividends or more, and, having so
occurred, such default shall be deemed to exist
thereafter until, but only until, all accrued dividends
on all shares of Preferred Stock of each and every series
then outstanding shall have been paid through the last
Quarterly Dividend Payment Date.
Section 4. Certain Restrictions.
(A) Whenever quarterly dividends or other
dividends or distributions payable on the Series A Junior
Preferred Stock as provided in Section 2 are in arrears,
thereafter and until all accrued and unpaid dividends and
distributions, whether or not declared, on shares of
Series A Junior Preferred Stock outstanding shall have
been paid in full, the Corporation shall not:
(i) declare or pay dividends on, make
any other distributions on (other than a
dividend in Common Stock or in any other stock
of the Corporation ranking junior to the Series
A Junior Preferred Stock as to dividends and
upon liquidation, dissolution or winding up and
other than as provided in subparagraph (ii) of
this section), or redeem or purchase or
otherwise acquire for consideration (except by
conversion into or exchange for stock of the
Corporation ranking junior to the Series A
Junior Preferred Stock as to dividends and upon
dissolution, liquidation or winding up), any
shares of stock ranking junior (either as to
dividends or upon liquidation, dissolution or
winding up) to the Series A Junior Preferred
Stock;
(ii) declare or pay dividends on or
make any other distributions on any shares of
stock ranking on a parity (either as to
dividends or upon liquidation, dissolution or
winding up) with the Series A Junior Preferred
Stock, except dividends paid ratably on the
Series A Junior Preferred Stock and all stock
ranking on a parity with the Series A Junior
Preferred Stock as to dividends on which
dividends are payable or in arrears in
proportion to the total amounts to which the
holders of all such shares are then entitled;
(iii) redeem or purchase or otherwise
acquire for consideration shares of any stock
ranking on a parity (either as to dividends or
upon liquidation, dissolution or winding up)
with the Series A Junior Preferred Stock,
provided that the Corporation may at any time
redeem, purchase or otherwise acquire shares of
any such parity stock in exchange for shares of
any stock of the Corporation ranking junior (as
to dividends and upon dissolution, liquidation
or winding up) to the Series A Junior Preferred
Stock;
(iv) purchase or otherwise acquire for
consideration any shares of Series A Junior
Preferred Stock, except in accordance with a
purchase offer made in writing or by publication
(as determined by the Board of Directors) to all
holders of such shares upon such terms as the
Board of Directors, after consideration of the
respective annual dividend rates and other
relative rights and preferences of the
respective series and classes, shall determine
in good faith will result in fair and equitable
treatment among the respective series or
classes.
(B) The Corporation shall not permit any
subsidiary of the Corporation to purchase or otherwise
acquire for consideration any shares of stock of the
Corporation unless the Corporation could, under paragraph
(A) of this Section 4, purchase or otherwise acquire such
shares at such time and in such manner.
Section 5. Reacquired Shares. Any shares of Series A
Junior Preferred Stock purchased or otherwise acquired by the
Corporation in any manner whatsoever shall be retired and
cancelled promptly after the acquisition thereof. All such shares
shall upon their cancellation become authorized but unissued
shares of Preferred Stock and may be reissued as part of a new
series of Preferred Stock to be created by resolution or
resolutions of the Board of Directors, subject to the conditions
and restrictions on issuance set forth herein.
Section 6. Liquidation, Dissolution or Winding Up.
(A) In the event of any voluntary or involuntary
liquidation, dissolution or winding up of the
Corporation, the holders of the Series A Junior Preferred
Stock shall be entitled to receive the greater of (a)
$100 per share, plus accrued dividends to the date of
distribution, whether or not earned or declared, or (b)
an amount per share, subject to the provision for
adjustment hereinafter set forth, equal to 100 times the
aggregate amount to be distributed per share to holders
of Common Stock (the "Series A Liquidation Preference").
In the event the Corporation shall at any time after the
Rights Declaration Date (i) declare any dividend on
Common Stock payable in shares of Common Stock, (ii)
subdivide the outstanding Common Stock or (iii) combine
the outstanding Common Stock into a smaller number of
shares, then in each such case the amount to which
holders of shares of Series A Junior Preferred Stock were
entitled immediately prior to such event pursuant to
clause (b) of the preceding sentence shall be adjusted by
multiplying such amount by a fraction the numerator of
which is the number of shares of Common Stock outstanding
immediately after such event and the denominator of which
is the number of shares of Common Stock that were
outstanding immediately prior to such event.
(B) In the event, however, that there are not
sufficient assets available to permit payment in full of
the Series A Liquidation Preference and the liquidation
preferences of all other series of preferred stock, if
any, which rank on a parity with the Series A Junior
Preferred Stock, then such remaining assets shall be
distributed ratably to the holders of such parity shares
in proportion to their respective liquidation
preferences.
Section 7. Consolidation, Merger, etc. In case the
Corporation shall enter into any consolidation, merger,
combination or other transaction in which the shares of Common
Stock are exchanged for or changed into other stock or securities,
cash and/or any other property, then in any such case the shares
of Series A Junior Preferred Stock shall at the same time be
similarly exchanged or changed in an amount per share (subject to
the provision for adjustment hereinafter set forth) equal to 100
times the aggregate amount of stock, securities, cash and/or any
other property (payable in kind), as the case may be, into which
or for which each share of Common Stock is changed or exchanged.
In the event the Corporation shall at any time after the Rights
Declaration Date (i) declare any dividend on Common Stock payable
in shares of Common Stock, (ii) subdivide the outstanding Common
Stock, or (iii) combine the outstanding Common Stock into a
smaller number of shares, then in each such case the amount set
forth in the preceding sentence with respect to the exchange or
change of shares of Series A Junior Preferred Stock shall be
adjusted by multiplying such amount by a fraction the numerator of
which is the number of shares of Common Stock outstanding
immediately after such event and the denominator of which is the
number of shares of Common Stock that were outstanding immediately
prior to such event.
Section 8. Optional Redemption.
(A) The Corporation shall have the option to
redeem the whole or any part of the Series A Junior
Preferred Stock at any time on at least 30 days notice in
accordance with the provisions of paragraph (B) of this
Section 8 at a redemption price equal to, subject to the
provision for adjustment hereinafter set forth, 100 times
the "current per share market price" of the Common Stock
on the date of the mailing of the notice of redemption,
together with unpaid accumulated dividends to the date of
such redemption. In the event the Corporation shall at
any time after October 10, 1989 (i) declare any dividend
on Common Stock payable in shares of Common Stock, (ii)
subdivide the outstanding Common Stock or (iii) combine
the outstanding Common Stock into a smaller number of
shares, then in each such case the amount to which
holders of shares of Series A Junior Preferred Stock were
otherwise entitled immediately prior to such event under
the preceding sentence shall be adjusted by multiplying
such amount by a fraction the numerator of which is the
number of shares of Common Stock outstanding immediately
after such event and the denominator of which is the
number of shares of Common Stock that were outstanding
immediately prior to such event. The "current per share
market price" on any date shall be deemed to be the
average of the closing price per share of such Common
Stock for the 10 consecutive Trading Days (as such term
is hereinafter defined) immediately prior to such date.
The closing price for each day shall be the last sale
price, regular way, or, in case no such sale takes place
on such day, the average of the closing bid and asked
prices regular way, in either case as reported in the
principal consolidated transaction reporting system with
respect to securities listed or admitted to trading on
the New York Stock Exchange or, if the Common Stock is
not listed or admitted to trading on the New York Stock
Exchange, as reported in the principal consolidated
transaction reporting system with respect to securities
listed or admitted to trading on the principal national
securities exchange on which the Common Stock is listed
or admitted to trading or, if the Common Stock is not
listed or admitted to trading on any national securities
exchange, the last quoted price or, if not so quoted the
average of the high bid and low asked prices in the
over-the-counter market, as reported by the National
Association of Securities Dealers, Inc. Automated
Quotations System ("NASDAQ") or such other system then in
use or, if on any such date the Common Stock is not
quoted by any such organization, the average of the
closing bid and asked prices as furnished by a
professional market maker making a market in the Common
Stock selected by the Corporation. If on such date no
such market maker is making a market in the Common Stock,
the fair value of the Common Stock on such date as
determined in good faith by the Board of Directors of the
Corporation shall be used. The term "Trading Day" shall
mean a day on which the principal national securities
exchange on which the Common Stock is listed or admitted
to trading is open for the transaction of business or, if
the Common Stock is not listed or admitted to trading on
any national securities exchange, a Monday, Tuesday,
Wednesday, Thursday or Friday on which banking
institutions in the State of New York are not authorized
or obligated by law or executive order to close.
(B) Whenever shares of Series A Junior Preferred
Stock are to be redeemed, the Corporation shall mail a
notice ("Notice of Redemption") by first-class mail,
postage prepaid, to each holder of record of shares of
Series A Junior Preferred Stock to be redeemed and to the
transfer agent for the Series A Junior Preferred Stock.
The Notice of Redemption shall be addressed to the holder
at the address of the holder appearing on the stock
transfer books of the Corporation maintained by the
transfer agent for the Series A Junior Preferred Stock.
The Notice of Redemption shall include a statement of (i)
the redemption date, (ii) the redemption price, (iii) the
number of shares of Series A Junior Preferred Stock to be
redeemed, (iv) the place or places where shares of the
Series A Junior Preferred Stock are to be surrendered for
payment of the redemption price, (v) that the dividends
on the shares to be redeemed will cease to accrue on such
redemption date, and (vi) the provision under which
redemption is made. No defect in the Notice of Redemption
or in the mailing thereof shall affect the validity of
the redemption proceedings, except as required by law.
From the date on which a Notice of Redemption shall have
been given as aforesaid and the Corporation shall have
deposited with the transfer agent for the Series A Junior
Preferred Stock a sum sufficient to redeem the shares of
Series A Junior Preferred Stock as to which Notice of
Redemption has been given, with irrevocable instructions
and authority to pay the redemption price to the holders
thereof, or if no such deposit is made, then upon such
date fixed for redemption (unless the Corporation shall
default in making payment of the redemption price), all
rights of the holders thereof as stockholders of the
Corporation by reason of the ownership of such shares
(except their right to receive the redemption price
thereof, but without interest), shall terminate
including, but not limited to, their right to receive
dividends, and such shares shall no longer be deemed
outstanding. The Corporation shall be entitled to
receive, from time to time, from the transfer agent for
Series A Junior Preferred Stock the interest, if any, on
such monies deposited with it and the holders of any
shares so redeemed shall have no claim to any such
interest. In case the holder of any shares so called for
redemption shall not claim the redemption price for his
shares within one year after the date of redemption, the
transfer agent for the Series A Junior Preferred Stock
shall, upon demand, pay over to the Corporation such
amount remaining on deposit and the transfer agent for
the Series A Junior Preferred Stock shall thereupon be
relieved of all responsibility to the holders of such
shares and such holder of the shares of the Series A
Junior Preferred Stock so called for redemption shall
look only to the Corporation for the payment thereof.
(C) In the event that fewer than all the
outstanding shares of the Series A Junior Preferred Stock
are to be redeemed, the number of shares to be redeemed
shall be determined by the Board of Directors and the
shares to be redeemed shall be determined by lot or pro
rata as may be determined by the Board of Directors or by
any other method as may be determined by the Board of
Directors in its sole discretion to be equitable.
(D) If the Corporation shall be in default in
the payment of any dividends (including cumulative
dividends, if applicable) on any shares of Preferred
Stock ranking, as to dividends, prior to the Series A
Junior Preferred Stock, then no shares of the Series A
Junior Preferred Stock shall be redeemed and the
Corporation shall not purchase or otherwise acquire any
shares of the Series A Junior Preferred Stock.
Section 9. Ranking.
(A) The Series A Junior Preferred Stock shall
rank junior to all other series of the Corporation's
Preferred Stock as to the payment of dividends and the
distribution of assets upon liquidation, dissolution or
winding up, unless the terms of any such series shall
provide otherwise.
(B) For purposes of this resolution, any stock
of any class or classes of the Corporation shall be
deemed to rank:
(i) prior to the shares of the Series A
Junior Preferred Stock, either as to dividends
or upon liquidation, dissolution or winding up,
if the holders of such class or classes shall be
entitled to the receipt of dividends or of
amounts distributable upon dissolution,
liquidation or winding up of the Corporation,
whether voluntary or involuntary, as the case
may be, in preference or priority to the holders
of shares of the Series A Junior Preferred
Stock. Each holder of any share of the Series A
Junior Preferred Stock, by his acceptance
thereof, expressly covenants and agrees that the
rights of the holders of any shares of any other
series of Preferred Stock of the Corporation to
receive dividends or amounts distributable upon
dissolution, liquidation or winding up of the
Corporation, whether voluntary or involuntary,
shall be and hereby are expressly prior to his
rights unless in the case of any particular
series of Preferred Stock the certificate or
other instrument creating or evidencing the same
expressly provides that the rights of the
holders of such series shall not be prior to the
shares of the Series A Junior Preferred Stock;
and
(ii) on a parity with shares of the
Series A Junior Preferred Stock, either as to
dividends or upon liquidation, whether or not
the dividend rates, dividend payment dates or
redemption or liquidation prices per share or
sinking fund provisions, if any, be different
from those of the Series A Junior Preferred
Stock, if the holders of such stock shall be
entitled to the receipt of dividends or of
amounts distributable upon dissolution,
liquidation or winding up of the Corporation,
whether voluntary or involuntary, as the case
may be, in proportion to their respective
dividend rates or liquidation prices, without
preference or priority, one over the other, as
between the holders of such stock and the
holders of shares of the Series A Junior
Preferred Stock; and
(iii) junior to shares of the Series A
Junior Preferred Stock, either as to dividends
or upon liquidation, if such class or classes
shall be Common Stock or if the holders of
shares of the Series A Junior Preferred Stock
shall be entitled to receipt of dividends or of
amounts distributable upon dissolution,
liquidation or winding up of the Corporation,
whether voluntary or involuntary, as the case
may be, in preference or priority to the holders
of shares of such class or classes.
Section 10. Amendment. Except as otherwise set forth in
this Certificate of Designation, Preferences and Rights with
respect to the Series A Junior Preferred Stock, holders of Series
A Junior Preferred Stock shall not have any special powers and
their consent shall not be required for taking any corporate
action, provided, however, that:
(A) Unless the vote or consent of the holders of
a greater number of shares shall then be required by law,
the consent of the holders of at least 66b% of all of the
shares of the Series A Junior Preferred Stock at the time
outstanding, given in person or by proxy, either in
writing or by a vote at a meeting called for the purpose
at which the holders of shares of the Series A Junior
Preferred Stock shall vote together as a separate class,
shall be necessary for authorizing, effecting or
validating the amendment, alteration or repeal of any of
the provisions of the Certificate of Incorporation or of
any certificate amendatory thereof or supplemental
thereto (including any Certificate of Designation,
Preferences and Rights or any similar document relating
to any series of Preferred Stock) so as to affect
adversely the powers, preferences, or rights, of this
Series A Junior Preferred Stock. The increase of the
authorized amount of the Preferred Stock, or the
creation, authorization or issuance of any shares of any
other class of stock of the Corporation ranking prior to
or on a parity with the shares of the Series A Junior
Preferred Stock as to dividends or upon liquidation, or
the reclassification of any authorized or outstanding
stock of the Corporation into any such prior or parity
shares, or the creation, authorization or issuance of any
obligation or security convertible into or evidencing the
right to purchase any such prior or parity shares shall
not be deemed to affect adversely the powers, preferences
or rights of the Series A Junior Preferred Stock.
Section 11. Fractional Shares. Series A Junior Preferred
Stock may be issued in fractions of a share which shall entitle
the holder, in proportion to such holder's fractional shares, to
exercise voting rights, receive dividends, participate in
distributions and to have the benefit of all other rights of
holders of Series A Junior Preferred Stock.
FIFTH: The existence of the Corporation is to be perpetual.
SIXTH: The private property of the stockholders shall not be
subject to the payment of corporate debts to any extent whatever.
SEVENTH: The number of directors of the Corporation shall be fixed
from time to time by, or in the manner provided in, its by-laws and may be
increased or decreased as therein provided; but the number thereof shall
not be less than three.
The directors of the Corporation shall be divided into three
classes: Class I, Class II and Class III. Each class shall consist, as
nearly as may be possible, of one-third of the whole number of the Board of
Directors. In the election of directors at the 2002 annual meeting of the
stockholders, the Class I directors shall be elected to hold office for a
term to expire at the first annual meeting of the stockholders thereafter;
the Class II directors shall be elected to hold office for a term to expire
at the second annual meeting of the stockholders thereafter; and the Class
IIII directors shall be elected to hold office for a term to expire at the
third annual meeting of the stockholders thereafter, and in the case of
each class, until their respective successors are duly elected and
qualified. At each annual election held after the 2002 annual meeting of
the stockholders the directors elected to succeed those whose terms expire
shall be identified as being of the same class as the directors they
succeed and shall be elected to hold office for a term to expire at the
third annual meeting of the stockholders after their election, and until
their respective successors are duly elected and qualified. If the number
of directors is changed, any increase or decrease in directors shall be
apportioned among the classes so as to maintain all classes as equal in
number as possible, and any additional director elected to any class shall
hold office for a term which shall coincide with the terms of the other
directors in such class and until his successor is duly elected and
qualified.
In the case of any increase in the number of directors of the
Corporation, the additional director or directors shall be elected by the
Board of Directors.
In the case of any vacancy in the Board of Directors from death,
resignation, disqualification or other cause, a successor to hold office
for the unexpired portion of the term of the director whose place shall be
vacant, and until the election of his successor, shall be elected by a
majority of the Board of Directors then in office, though less than a
quorum.
Directors of the Corporation may be removed only for cause.
EIGHTH: The Board of Directors shall have power to adopt, amend
and repeal the by-laws at any regular or special meeting of the Board of
Directors, provided that notice of intention to adopt, amend or repeal the
by-laws in whole or in part shall have been included in the notice of
meeting; or, without any such notice, by a vote of two-thirds of the
directors then in office.
Stockholders may adopt, amend and repeal the by-laws at any
regular or special meeting of the stockholders by an affirmative vote of
two-thirds of the shares outstanding and entitled to vote thereon, provided
that notice of intention to adopt, amend or repeal the by-laws in whole or
in part shall have been included in the notice of the meeting.
Any action required to be taken at any annual or special meeting
of the stockholders of the Corporation, or any action which may be taken at
any annual or special meeting of the stockholders or otherwise, may not be
taken without a meeting, prior notice and a vote, and stockholders may not
act by written consent.
NINTH: The Board of Directors from time to time shall determine
whether and to what extent, and at what times and places, and under what
conditions and regulations, the accounts and books of the Corporation, or
any of them, shall be open to the inspection of the stockholders, and no
stockholder shall have any right to inspect any account or book or document
of the Corporation, except as conferred by law or authorized by the Board
of Directors, or by the stockholders.
TENTH: The directors may from time to time declare such dividends
as they shall deem advisable and proper, subject to the provisions of
Article Fourth and to such restrictions as may be imposed by law, and pay
the same to the stockholders at such times as they shall fix.
The Board of Directors shall have power to issue bonds,
debentures, or other obligations, either non-convertible or convertible
into the Corporation's stock, subject to the provisions of Article Fourth
and upon such terms, in such manner and under such conditions in conformity
with law, as may be fixed by the Board of Directors prior to the issue of
such bonds, debentures or other obligations.
ELEVENTH: 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. No amendment to or
repeal of this Article Eleventh shall apply to or have any effect on the
liability or alleged liability of any director of the Corporation for or
with respect to any acts or omissions of such director occurring prior to
such amendment or repeal.
TWELFTH: The powers and authorities hereinbefore conferred upon
the Board of Directors are in furtherance and not in limitation of those
conferred by the laws of the State of Delaware.
THIRTEENTH: The Corporation reserves the right at any time and
from time to time to amend, alter, change or repeal any provision contained
in this Certificate of Incorporation in the manner now or hereafter
prescribed by law, and all rights preferences and privileges of whatsoever
nature conferred upon stockholders, directors or any other persons
whomsoever by and pursuant to this Certificate of Incorporation in its
present form or as hereafter amended are granted subject to the rights
reserved in this Article.
EXHIBIT 99.3
TAX SHARING AGREEMENT
dated as of December 31, 2001
between
USX Corporation
(to be renamed "Marathon Oil Corporation")
and
United States Steel LLC
(to be renamed "United States Steel Corporation")
TAX SHARING AGREEMENT
This TAX SHARING AGREEMENT is entered into as of December 31,
2001, by and among USX Corporation ("USX") (to be renamed Marathon Oil
Corporation), a Delaware corporation (together with its successors,
"Marathon") and United States Steel LLC (to be converted into a corporation
named United States Steel Corporation), a Delaware limited liability
company (together with its successors, "United States Steel").
RECITALS
WHEREAS, pursuant to the tax laws of various jurisdictions, the
affiliated group of which USX is the common parent files certain tax
returns on a consolidated, combined, unitary, or other group basis;
WHEREAS, the Board of Directors of USX has determined that it is
in the best interests of USX and its stockholders to effect a
reorganization and distribute all of the outstanding shares of United
States Steel Corporation to the holders of the USX-U. S. Steel Group common
stock in complete redemption of such stock (the "Distribution");
WHEREAS, in this Agreement, the parties have set forth certain
representations and covenants that support the treatment of the
Distribution as a transaction described in Section 355 of the Internal
Revenue Code of 1986, as amended;
WHEREAS, in this Agreement, the parties have set forth the rights
and obligations of Marathon and its affiliates and United States Steel and
its affiliates with respect to the handling and allocation of certain
Federal, state, local, foreign, and other taxes incurred in taxable periods
beginning prior to the Distribution, and various other tax matters of the
USX Consolidated Group;
WHEREAS, the allocation of certain Federal, state, local, foreign,
and other taxes incurred in taxable periods beginning prior to the
Distribution set forth in this Agreement shall incorporate, to the greatest
extent possible, the tax sharing principles detailed in the USX Tax
Allocation and Settlement Policy effective as of 1991 and as amended and
restated as of August 26, 1997.
NOW, THEREFORE, in consideration of the mutual promises,
covenants, and conditions contained herein, and intending to be legally
bound hereby, the parties hereto agree as follows:
ARTICLE I
DEFINITIONS
SECTION 1.01. Definitions.
As used herein, the following terms shall have the following
meanings:
"Agreement" shall mean this Tax Sharing Agreement dated as of
December 31, 2001.
"Agreement and Plan of Reorganization" shall mean the Agreement
and Plan of Reorganization dated as of July 31, 2001, by and among USX and
United States Steel LLC.
"Business Day" shall mean a day other than a Saturday, Sunday or
legal holiday (which for purposes of this Agreement shall include any day
on which banks located in New York City are authorized or required by law
to close).
"Calendar Day" shall mean each day of the week, including
Saturdays, Sundays and legal holidays; provided that, if any action is
required to be taken on a Saturday, Sunday or legal holiday, then such
action shall be required to be taken on the immediately preceding Business
Day.
"Code" shall mean the Internal Revenue Code of 1986, as amended.
"Combined State Tax" shall mean any State Tax, the return for
which includes Tax Items of both the Marathon Stock Group and the United
States Steel Stock Group.
"Consolidated Federal Tax" shall mean any Federal Tax, the return
for which includes Tax Items of both the Marathon Stock Group and the
United States Steel Stock Group.
"Delhi Stock Group" shall mean the USX-Delhi Group as presented
for financial statement purposes under generally accepted accounting
principles prior to the 1998 redemption of the USX - Delhi Group stock and
shall include the financial position, results of operations and cash flows
for the businesses of Delhi Gas Pipeline Corporation and certain other
subsidiaries of USX and a portion of the corporate assets and liabilities
and related transactions which are not separately identified with ongoing
operating units of USX.
"Distribution" shall mean the distribution of the shares of United
States Steel Corporation in complete redemption of all of the outstanding
USX-U. S. Steel Group shares. The term "Distribution" shall have the same
meaning herein as the term "Separation" has in the Agreement and Plan of
Reorganization.
"Distribution Date" shall mean the day on which the Distribution
is effected.
"Effective Realization (and the correlative terms, "Effectively
Realized" and "Effectively Realizes") shall mean, with respect to any Tax
Attribute, the utilization of such Tax Attribute on a Tax Return of the USX
Consolidated Group, the Marathon Tax Group, or the United States Steel Tax
Group, including, but not limited to, the application of such Tax Attribute
on an IRS Form 7004, on a final Tax Return (such as an IRS Form 1120),
pursuant to a Final Determination for the relevant year, or pursuant to a
Final Determination for a future or prior taxable period resulting in a
carryback or carryforward to the relevant year.
"Federal Tax" shall mean any Tax imposed under Subtitle A of the
Code.
"Final Determination" (and the correlative term, "Finally
Determined") shall mean the final resolution of any Tax (or other
tax-related matter) for a taxable period, including related interest or
penalties, including (1) by the expiration of a statute of limitations or a
period for the filing of claims for refunds, amending Tax Returns,
appealing from adverse determinations or recovering any refund (including
by offset), (2) by a decision, judgment, decree, or other order by a court
of competent jurisdiction which has become final, (3) by a closing
agreement or accepted offer in compromise under Sections 7121 or 7122 of
the Code, or comparable agreements under the laws of other jurisdictions,
(4) by execution of an IRS Form 870 or 870AD (or any successor IRS form) or
by execution of a comparable form under the laws of other jurisdictions
(notwithstanding that, with respect to a particular Tax Item for a
particular taxable period, any such form may reserve -- whether by its
terms or by operation of law -- the right of the taxpayer to file a claim
for refund and/or the right of the Tax Authority to assert a further
deficiency with respect to any such Tax Item for such period), or (5) by
any allowance of a refund or credit, but only after the expiration of all
periods during which such refund or credit may be recovered (including by
way of offset).
"Group" shall mean either the United States Steel Stock Group or
Marathon Stock Group, as the case may be.
"Holding Company Reorganization" shall mean the internal
restructuring effectuated on July 2, 2001.
"Income Tax" shall mean any Tax based on, measured by, or computed
by reference to gross income, gross receipts, net income, profits, or any
other measure of income or profits.
"IRS" shall mean the United States Internal Revenue Service.
"Marathon Stock Group" shall mean the USX-Marathon Group as
presented for financial statement purposes under generally accepted
accounting principles prior to the Distribution and shall include the
financial position, results of operations and cash flows for the businesses
of Marathon Oil Company and certain other subsidiaries of USX and a portion
of the corporate assets and liabilities and related transactions which are
not separately identified with ongoing operating units of USX.
"Marathon Tax Group" shall mean the affiliated group of
corporations as defined in section 1504 of the Code, or similar group of
entities as defined under corresponding provisions of the laws of other
jurisdictions, of which Marathon will be the common parent following the
Distribution.
"Payroll Taxes" shall mean any Tax imposed on an employer in
connection with the payment or provision of salaries or benefits and other
remuneration to employees and directors, including income tax withholding,
social security, unemployment taxes, and premiums for workers compensation.
"Penalties" shall mean any penalties, fines, additions to Taxes,
or additional amounts imposed by any Tax Authority (domestic or foreign).
"Post-Distribution Period" shall mean any taxable period or
portion thereof beginning after the Distribution Date.
"Pre-Distribution Period" shall mean any taxable period or portion
thereof ending on or before, or which includes, the Distribution Date.
"Ruling" shall mean (a) the private letter ruling issued by the
IRS in connection with the Distribution (and any related transactions) or
(b) any similar ruling issued by any Tax Authority other than the IRS in
connection with the Distribution (and any related transactions).
"Ruling Documents" shall mean the request for the Ruling submitted
to the IRS or to any other Tax Authority, together with the appendices and
exhibits thereto and any supplemental filings or other materials
subsequently submitted to the IRS or other Tax Authority, in connection
with the Distribution (and any related transactions).
"SAR" shall mean any stock appreciation right.
"Separate State Tax" shall mean any State Tax other than a
Combined State Tax.
"State Tax" shall mean any Tax payable to a state or local taxing
jurisdiction of the United States.
"Supplemental Ruling" shall mean (a) any private letter ruling
(other than the Ruling) issued by the IRS in connection with the
Distribution (and any related transactions) or (b) any similar ruling
(other than the Ruling) issued by any Tax Authority other than the IRS in
connection with the Distribution (and any related transactions).
"Supplemental Ruling Documents" shall mean any request for a
Supplemental Ruling submitted to the IRS or any other Tax Authority,
together with the appendices and exhibits thereto and any supplemental
filings or other materials subsequently submitted to the IRS or other Tax
Authority, in connection with the Distribution (and any related
transactions).
"Tax" shall mean any tax, charge, fee, impost, levy or other
assessment, including, without limitation, all net income, gross receipts,
capital, sales, use, ad valorem, value added, transfer, franchise, profits,
inventory, capital stock, license, withholding, payroll, employment, social
security, unemployment, excise, severance, stamp, occupation, property and
estimated taxes, customs duties, fees, assessments and charges of any kind
whatsoever and shall include any transferee liability in respect of such
Taxes.
"Tax Attribute" shall mean any net operating losses, minimum tax
credits, business tax credits, nonconventional fuels tax credits, net
capital losses, charitable contributions, foreign income tax deductions,
foreign income tax credits, or any similar Tax Item.
"Tax Authority" shall mean a governmental authority or any
subdivision, agency, commission, or authority thereof or any
quasi-governmental or private body having jurisdiction over the assessment,
determination, collection or imposition of any Tax (including, without
limitation, the IRS).
"Tax Item" shall mean any item of income, gain, loss, deduction or
credit, or other similar item that may have the effect of increasing or
decreasing any Tax.
"Tax Proceeding" shall mean any audit or other examination by any
Tax Authority, assessment of Taxes, or proceeding or appeal of such a
proceeding relating to Taxes, whether administrative or judicial.
"Tax Return" shall mean any return, report, certificate, form,
election, or similar statement or document (including, without limitation,
estimated tax returns and reports, extension requests and forms, and
information returns and reports), in each case as amended, required to be
filed with any Tax Authority, Federal, state, or foreign, in connection
with the determination, assessment or collection of any Tax or the
administration of any laws, regulations, or administrative requirements
relating to any Tax.
"Treasury Regulations" shall mean the final, temporary and
proposed income tax regulations promulgated under the Code, as such
regulations may be amended from time to time (including corresponding
provisions of succeeding regulations).
"Two-Year Period" shall mean the period that begins on the
Distribution Date and that ends on the date that is two years after the
Distribution Date.
"United States Steel Stock Group" shall mean the USX-U. S. Steel
Group as presented for financial statement purposes under generally
accepted accounting principles prior to the Distribution and shall include
the financial position, results of operations and cash flows for all
businesses of USX other than the businesses, assets, and liabilities
included in the Marathon Stock Group and a portion of the corporate assets
and liabilities and related transactions which are not separately
identified with ongoing operating units of USX.
"United States Steel Tax Group" shall mean the affiliated group of
corporations as defined in section 1504 of the Code, or similar group of
entities as defined under corresponding provisions of the laws of other
jurisdictions, of which United States Steel will be the common parent
following the Distribution.
"USX Consolidated Group" shall mean the group of entities that
make up the affiliated group of corporations as defined in section 1504 of
the Code, or similar group of entities as defined under corresponding
provisions of the laws of other jurisdictions, of which USX, or a
predecessor of USX under Treasury Regulations Section 1.1502-1(f)(4), is
the common parent for all Pre-Distribution Periods.
"USX Headquarters Tax" shall mean any Tax (but not including
Income Taxes) with respect to, or incurred by reason of, the corporate
headquarters activities of USX or any member of the USX Consolidated Group
that was allocated between the Marathon Stock Group and the United States
Steel Stock Group for financial statement purposes prior to the
Distribution.
"USX Shareholder" shall mean a holder of any class of USX stock on
or before the Distribution Date, including shares of USX-U. S. Steel Group
stock and shares of USX-Marathon Group stock.
SECTION 1.02. Terms Defined Elsewhere in this Agreement.
For the purposes of this Agreement, the following terms shall have
the meanings set forth in the Sections indicated below:
Term Section
---- -------
Adjusted AMT Separate Return Liability. 4.02(b)(i)(B)
Adjusted Separate Return Liability 4.02(a)(ii)(D)
After-Tax Amount 10.02(b)
AMT 4.02(b)
AMT Separate Return Liability 4.02(b)(i)
Arbitrator 11.01
Buy-out Payment 3.06(a)
Combined Separate Return Liabilities 4.02(a)(ii)(B)
Consolidated MTCs 4.02(b)(ii)
Consolidated Return Benefit or Detriment 4.02(a)(ii)(B)
Consolidated Tax Attribute 4.02(a)(ii)(C)(2)
Demand 11.01
Dispute 11.01
Dispute Resolution 11.01
Indemnitee 7.05
Indemnitor 7.05
MOC 6.01
MTC 4.02(b)
Party 11.01
Panel 11.01
Payment Period 10.03
Preempting Attributes 4.02(a)(iii)(A)
Separate Return Basis 4.02(a)(i)
Separate Return Liability 4.02(a)(i)
Total USX Liability 4.02(a)
Total USX AMT Liability 4.02(b)
Transfer Taxes 4.04
True-Up Payment 5.03(b)(iii)
SECTION 1.03. Other Definitional Provisions.
(a) The words "hereof," "herein," "hereunder," and words of
similar import, when used in this Agreement, shall refer to this Agreement
as a whole and not to any particular provision of this Agreement.
(b) The terms defined in the singular shall have a comparable
meaning when used in the plural, and vice versa.
ARTICLE II
GENERAL
SECTION 2.01. Sole Tax Sharing Agreement.
This Agreement shall constitute the entire agreement between
United States Steel and Marathon and their respective affiliates (including
direct or indirect corporate subsidiaries, controlled partnerships, and
controlled limited liability companies) with respect to the subject matters
herein. The USX Tax Allocation and Settlement Policy effective as of 1991
and as amended and restated as of August 26, 1997 (including any amendments
thereto) shall be or shall have been terminated as of the Distribution
Date. On and after the Distribution Date, United States Steel and Marathon
and their respective affiliates (including direct or indirect corporate
subsidiaries, controlled partnerships, and controlled limited liability
companies) shall have no rights or liabilities (including, without
limitation, any rights and liabilities that may have accrued prior to the
Distribution Date) under such terminated agreements and arrangements, and
this Agreement shall be the sole tax sharing or tax allocation agreement
among such corporations.
SECTION 2.02. No Third Party Rights.
Nothing in this Agreement shall be interpreted to create any
rights or liabilities (i) among members of the Marathon Tax Group, (ii)
among members of the United States Steel Tax Group, (iii) between the
Marathon Tax Group and any USX Shareholder, Marathon shareholder or United
States Steel shareholder, or (iv) between the United States Steel Tax Group
and any USX Shareholder, Marathon shareholder or United States Steel
shareholder.
SECTION 2.03. Good Faith.
All parties shall act in good faith with respect to all aspects of
this Agreement.
ARTICLE III
ADMINISTRATIVE AND COMPLIANCE MATTERS
SECTION 3.01. Designation Of Agent.
(a) Except with respect to Tax Returns described in Sections
3.02(a)(iii) and 3.02(a)(iv) of this Agreement, United States Steel hereby
irrevocably authorizes and designates, and agrees to cause each member of
the United States Steel Tax Group to so authorize and designate, Marathon
as its sole and exclusive agent and attorney-in-fact to take such action
(including execution of documents) as Marathon, in its sole discretion, may
deem appropriate in any and all matters relating to Taxes (including Tax
Proceedings) for taxable years or portions thereof in which United States
Steel and its affiliates were members of the USX Consolidated Group. In
exercising its authority under this Section 3.01, Marathon shall act in
good faith and in a reasonable manner consistent with the principles of
this Agreement.
(b) Marathon may, in its sole and absolute discretion, delegate at
any time all or a portion of its authority, rights, or obligations under
this Agreement to any corporation(s) or any person(s) (including, without
limitation, United States Steel). Such delegation may be revoked by
Marathon in its sole and absolute discretion.
SECTION 3.02. USX Consolidated Group Tax Returns and Elections.
(a) Original Tax Returns.
(i) Marathon shall prepare and file the Consolidated
Federal Tax Returns and Combined State Tax Returns of the USX Consolidated
Group for all Pre-Distribution Periods with the assistance of the members
of the United States Steel Tax Group; provided that, all such Tax Returns
shall be (1) prepared in a manner that is consistent with the most recent
prior Tax Return of the USX Consolidated Group that includes the relevant
position or is supported by a written opinion of outside tax counsel or
nationally recognized accounting firm indicating that the position is more
likely than not to prevail if litigated, unless the parties otherwise agree
in writing; (2) prepared in a manner that is consistent with Article 6 of
this Agreement and any Ruling, Supplemental Ruling, Ruling Documents, or
Supplemental Ruling Documents; and (3) filed on a timely basis (taking into
account applicable extensions); and further provided that, Marathon shall
prepare any Tax Return that includes Combined State Taxes on a separate
return basis or combined return basis, as the case may be, consistent with
the manner in which such return was filed for the immediately preceding
period.
(A) Marathon shall consult with United States
Steel, and United States Steel shall assist Marathon, in preparing the
portions of any such Tax Returns relating directly to any Tax Items
generated solely by, or allocated solely to, the United States Steel Stock
Group. Notwithstanding the obligation to consult with United States Steel,
but subject to United States Steel's rights pursuant to Section
3.02(a)(i)(C) of this Agreement and subject to Section 3.02(c) of this
Agreement, Marathon shall have the exclusive right to determine how the Tax
Returns shall be prepared and filed, including, without limitation, the
positions taken with respect to any Tax Item reported thereon, and how any
elections shall be made thereon.
(B) Marathon shall provide drafts of all Tax
Returns of the USX Consolidated Group to United States Steel, in the case
of Federal income tax no later than 30 Calendar Days prior to the due date
for filing such Tax Return (including all applicable extensions), and in
the case of State Income Tax and all other Taxes no later than 15 Calendar
Days prior to the due date for filing such Tax Returns (including all
applicable extensions).
(C) If United States Steel requests that
Marathon take a position relating to any Tax Item generated solely by, or
allocated solely to, the United States Steel Stock Group (including a
position with respect to the combined or separate status of a State Tax
Return) that is (1) consistent with the most recent prior Tax Return of the
USX Consolidated Group that includes the relevant position and (2)
otherwise meets the requirements of Section 3.02(a)(i) of this Agreement,
then Marathon shall reflect such position on the Tax Return. If United
States Steel requests that Marathon take a position relating to any Tax
Item generated solely by, or allocated solely to, the United States Steel
Stock Group that is (1) supported by a written opinion of outside tax
counsel or a nationally recognized accounting firm that the position is
more likely than not to prevail in litigation (but does not meet the
consistency requirements of the immediately preceding sentence) and (2)
otherwise meets the requirements of Section 3.02(a)(i) of this Agreement,
then Marathon may decline to take such position on the Tax Return; provided
that, Marathon shall make to United States Steel a Buy-out Payment pursuant
to Section 3.06 of this Agreement.
(ii) Marathon and the members of the Marathon Tax Group
shall be solely responsible for the preparation and filing of (A) their
respective Separate State Tax Returns for all taxable years, and (B) Tax
Returns for the Marathon Tax Group for taxable years that begin after the
Distribution Date.
(iii) United States Steel and the members of the United
States Steel Tax Group shall be solely responsible for the preparation and
filing of (A) their respective Separate State Tax Returns for all taxable
years, and (B) Tax Returns for the United States Steel Tax Group for
taxable years that begin after the Distribution Date.
(iv) All foreign Tax Returns shall be filed by the legal
entities which had responsibility for filing such Tax Returns, regardless
of whether such entities are members of the United States Steel Tax Group
or the Marathon Tax Group after the Distribution.
(v) Without limiting the generality of Sections 8.01 and
8.02 of this Agreement, Marathon shall provide United States Steel, and
United States Steel shall provide Marathon, with any information relevant
or required for the preparation of the Tax Returns described in this
Section 3.02. No later than June 30, 2002, Marathon shall provide United
States Steel with a list of all Consolidated Federal Tax Returns and
Combined State Tax Returns that Marathon will file pursuant to Section
3.02(a) of this Agreement.
(b) Amended Tax Returns, Claims for Refunds, and Tentative
Carryback Adjustments.
(i) Marathon shall prepare and file any amended Tax
Return, claim for refund, or tentative carryback adjustment (including an
IRS Form 1139 arising as a result of an election made pursuant to Section
3.02(c)(ii) of this Agreement involving a Tax Item of the United States
Steel Tax Group arising in a Post-Distribution Period) affecting a Tax Item
included, or to be included, on any Consolidated Federal Tax Return or
Combined State Tax Return of the USX Consolidated Group; provided that, all
such amended Tax Returns, claims for refund, or tentative carryback
adjustment shall (A) be prepared in a manner that is consistent with
Article 6 of this Agreement and any Ruling, Supplemental Ruling, Ruling
Documents, or Supplemental Ruling Documents, (B) meet the requirements of
Section 3.02(c) of this Agreement, and (C) be filed on a timely basis
(taking into account applicable extensions).
(ii) Marathon shall provide to United States Steel for
its review any amended Tax Return, claim for refund, or tentative carryback
adjustment of the USX Consolidated Group no later than 30 Calendar Days
prior to its filing. Within 25 Calendar Days of receiving from Marathon
such amended Tax Return, claim for refund, or tentative carryback
adjustment, United States Steel shall have the right to request that
Marathon not take any position proposed to be taken on such amended Tax
Return, claim for refund, or tentative carryback adjustment relating to any
Tax Item generated by (in whole or in part), or allocated to (in whole or
in part), the Marathon Stock Group, and Marathon shall not take such
position on an amended Tax Return, claim for refund, or tentative
carryback; provided that, United States Steel shall make to Marathon a
Buy-out Payment pursuant to Section 3.06 of this Agreement.
(iii) United States Steel shall have the right to request
that Marathon file an amended Tax Return, claim for refund, or tentative
carryback adjustment relating to any Tax Item generated solely by, or
allocated solely to, the United States Steel Stock Group; provided that,
all such amended Tax Returns, claims for refund, or tentative carryback
adjustments shall satisfy the requirements of Section 3.02(b)(i) of this
Agreement. United States Steel shall submit such portion of the amended Tax
Return, claim for refund, or tentative carryback adjustment to Marathon no
later than 30 Calendar Days prior to the due date for filing such amended
Tax Returns, claims for refund, or tentative carryback adjustments and
Marathon shall either (A) file such amended Tax Return, claim for refund,
or tentative carryback adjustment within 25 Calendar Days of receiving it
from United States Steel or (B) exercise its buy-out right provided in the
next sentence. Marathon may, in its sole and absolute discretion, decline
to take any position proposed to be taken on such amended Tax Return, claim
for refund, or tentative carryback adjustment relating to any Tax Item
generated solely by, or allocated solely to, the United States Steel Stock
Group; provided that, if such position otherwise satisfies the requirements
of this Section 3.02(b)(iii), then Marathon shall make to United States
Steel a Buy-out Payment pursuant to Section 3.06 of this Agreement.
(c) Elections.
(i) Consistency. Any election that affects the Tax Items
of both the Marathon Stock Group and the United States Steel Stock Group
shall be made consistent with the most recently filed original Tax Return,
unless the parties otherwise agree or the party seeking to make the
inconsistent election makes a Buy-out Payment to the other party pursuant
to Section 3.06 (for purposes of applying section 3.06, any such election
shall be treated as a position with respect to all affected Tax Items).
(ii) Carryback of Post-Distribution Period United States
Steel Losses and Credits. Subject to the standards for filing Tax Returns
of the USX Consolidated Group set forth in Sections 3.02(a) and 3.02(b) of
this Agreement, United States Steel may elect to carry back any
Post-Distribution Period losses or credits of the United States Steel Tax
Group that may be carried back to a Tax Return of the USX Consolidated
Group under any pertinent section of the Treasury Regulations, and Marathon
shall take any such election into account in preparing the relevant Tax
Returns, including amended Tax Returns if necessary, of the USX
Consolidated Group.
(iii) Marathon may, at its option, elect, and the United
States Steel Tax Group shall join it in electing (if necessary), to ratably
allocate Tax Items (other than extraordinary Tax Items) of the United
States Steel Stock Group in accordance with the relevant provisions of
Treasury Regulations Section 1.1502-76. If Marathon makes such an election,
the members of the United States Steel Tax Group shall provide to Marathon
such statements as are required under the Treasury Regulations and other
appropriate assistance.
(iv) Marathon shall elect, and the United States Steel
Tax Group shall join it in electing (if necessary), to reattribute any net
operating loss or capital loss carryover of a member of the United States
Steel Stock Group to USX in accordance with the relevant provisions of
Treasury Regulations Section 1.1502-20(g). The members of the United States
Steel Tax Group shall provide to Marathon such statements as are required
under the Treasury Regulations and other appropriate assistance.
SECTION 3.03. USX Consolidated Group Tax Proceedings.
(a) Control Over Tax Proceedings.
Subject to the limitations set forth below in this Section 3.03,
Marathon shall have the exclusive right to control, contest, and represent
the interests of United States Steel and each member of the United States
Steel Tax Group in any Tax Proceeding relating to any Tax Item included on
a Consolidated Federal Tax Return or Combined State Tax Return for all
Pre-Distribution Periods, including the right to resolve, settle, or agree
to any deficiency, claim or adjustment proposed, asserted, or assessed, in
connection with or as a result of any such Tax Proceeding, and including
the right to execute waivers, choose the forum for contests, schedule
conferences, and resolve or settle any Tax Item.
(b) United States Steel Participation Rights.
Marathon shall consult with United States Steel, and United States
Steel shall have the right (i) to represent the interests of itself and
each member of the United States Steel Tax Group, in any Tax Proceeding
relating to any Tax Item generated solely by, or allocated solely to, the
United States Steel Stock Group, and (ii) to contest, resolve, settle, or
agree to any deficiency, claim, or adjustment proposed, asserted, or
assessed in connection with or as a result of such Tax Proceeding; provided
that, the entering into of any such resolution, settlement, or agreement or
any decision in connection with (including the entering into of) any
judicial or administrative proceeding relating to Taxes shall be subject to
the review and approval of Marathon which approval shall not be
unreasonably withheld. Notwithstanding the preceding sentence, Marathon
shall have the exclusive right to represent the interests of United States
Steel and each member of the United States Steel Tax Group in any Tax
Proceeding with respect to any Tax Items that are allocated to both the
Marathon Stock Group and the United States Steel Stock Group; provided
that, Marathon shall exercise this authority under this Section 3.03(b)
without discriminating against United States Steel or any member of the
United States Steel Tax Group unless Marathon makes to United States Steel
a Buy-out Payment pursuant to Section 3.06 of this Agreement.
(c) Marathon Buy-Out Right.
Notwithstanding Section 3.03(b) of this Agreement, Marathon shall
have the right to concede, resolve, or settle any Tax Proceeding relating
to any Tax Item generated by (in whole or in part), or allocated to (in
whole or in part), the United States Steel Stock Group without the consent
of United States Steel or any member of the United States Steel Tax Group;
provided that, Marathon shall make to United States Steel a Buy-out Payment
pursuant to Section 3.06 of this Agreement.
(d) United States Steel Buy-Out Right.
Notwithstanding Section 3.03(a) of this Agreement, United States
Steel shall have the right to request that Marathon concede, resolve, or
settle any Tax Proceeding relating to any Tax Item generated by (in whole
or in part), or allocated to (in whole or in part), the Marathon Stock
Group, and Marathon shall be required to so concede, resolve, or settle
such Tax Proceeding; provided that, United States Steel shall make to
Marathon a Buy-out Payment pursuant to Section 3.06 of this Agreement.
(e) Alternative Method for Administrative Resolution of Tax
Proceedings.
Notwithstanding Sections 3.03(a), 3.03(b), 3.03(c), and 3.03(d) of
this Agreement, Marathon and United States Steel may mutually agree to
resolve with the relevant Tax Authority any proposed adjustments to a Tax
Return of the USX Consolidated Group in any manner mutually agreed to by
Marathon and United States Steel (including settling any Tax Proceeding on
a basis that benefits one Group to the detriment of the other), and may
take any action consistent with this Agreement to facilitate such
settlement (including payment from one Group to the other).
(f) Judicial Resolution of Tax Proceedings.
In the event that any proposed adjustments to Tax Items of the USX
Consolidated Group are not resolved administratively and a judicial
resolution is necessary, Marathon and United States Steel shall consult
regarding the choice of litigation forum and may agree to choose any
available forum, which, as of the date of this Agreement, are the United
States Tax Court, the United States Court of Federal Claims, the United
States district court with jurisdiction over the relevant Federal Tax
Return, or a state court with jurisdiction over the relevant State Tax
Return. If Marathon and United States Steel agree that the jurisdiction of
a refund forum should be obtained, United States Steel shall make any
payments required pursuant to Section 5.02(d) of this Agreement. If
Marathon and United States Steel are unable to reach agreement as to the
choice of litigation forum for any Federal tax matter, the United States
Tax Court shall be selected as the litigation forum.
SECTION 3.04. Notices from Tax Authorities.
(a) If any member of the Marathon Tax Group receives written
notice of, or relating to, a Tax Proceeding from a Tax Authority that
asserts, proposes or recommends a deficiency, claim, or adjustment that, if
sustained, would result in the redetermination of a Tax Item of a member of
the United States Steel Stock Group, Marathon shall promptly provide a copy
of such notice to United States Steel (but in no event later than ten
Calendar Days following the receipt of such notice). If any member of the
United States Steel Tax Group receives written notice of, or relating to, a
Tax Proceeding from a Tax Authority that asserts, proposes or recommends a
deficiency, claim, or adjustment that, if sustained, would result in the
redetermination of a Tax Item of a member of the Marathon Stock Group,
United States Steel shall promptly provide a copy of such notice to
Marathon (but in no event later than ten Calendar Days following the
receipt of such notice).
(b) Without limiting the generality of Section 12.04(b) of this
Agreement, the failure of Marathon or United States Steel to promptly
notify the other of any matter relating to a particular Tax for a taxable
period shall not relieve the other party of any liability and/or obligation
which it may have under this Agreement with respect to such Tax for such
taxable period except to the extent that such other party's rights
hereunder are materially prejudiced by such failure. The remedy for such
failure shall be determined pursuant to Section 12.05 of this Agreement.
SECTION 3.05. Supplemental Rulings.
(a) Marathon shall have the right to obtain a Supplemental Ruling
in its sole and exclusive discretion. If Marathon decides to obtain a
Supplemental Ruling, United States Steel shall cooperate with Marathon and
take any and all actions reasonably requested by Marathon in connection
with obtaining the Supplemental Ruling (including, without limitation, by
making any representation or covenant or providing any materials or
information requested by any Tax Authority; provided that, United States
Steel shall not be required to make any representation or covenant that is
inconsistent with facts or as to future matters or events over which it has
no control). In connection with obtaining a Supplemental Ruling (i)
Marathon shall cooperate with and keep United States Steel informed in a
timely manner of all material actions taken or proposed to be taken by
Marathon in connection therewith; (ii) Marathon shall (A) reasonably in
advance of the submission of any Supplemental Ruling Documents, provide
United States Steel with a draft copy thereof; (B) reasonably consider
United States Steel's comments on such draft copy; and (C) provide United
States Steel with a final copy of all Supplemental Ruling Documents; and
(iii) Marathon shall provide United States Steel with notice reasonably in
advance of, and United States Steel shall have the right to attend, any
formally scheduled meetings with any Tax Authority (subject to the approval
of the Tax Authority) that relate to such Supplemental Ruling. Further,
Marathon shall provide United States Steel with 30 Calendar Days to review
such Supplemental Ruling under this Section 3.05(a) and shall not file such
request prior to the expiration of 30 Calendar Days unless United States
Steel agrees to such early filing in writing. Marathon shall bear all costs
and expenses incurred in obtaining such Supplemental Ruling and shall
reimburse United States Steel for all reasonable costs and expenses of
outside third parties incurred by United States Steel in connection with
obtaining a Supplemental Ruling requested by Marathon.
(b) United States Steel hereby agrees that Marathon shall have,
subject to Section 3.05(a) of this Agreement, sole and exclusive control
over the process of obtaining a Supplemental Ruling and that only Marathon
shall apply for a Supplemental Ruling. United States Steel further agrees
that it shall not seek any guidance from the IRS or any other Tax Authority
concerning the Distribution, except as set forth in Section 3.05(c) of this
Agreement.
(c) Marathon agrees that at the reasonable request of United
States Steel, Marathon shall cooperate with United States Steel and use its
reasonable efforts to seek to obtain, as expeditiously as possible, a
Supplemental Ruling or other guidance from the IRS or any other Tax
Authority for the purpose of confirming (i) the Ruling or any Supplemental
Ruling issued previously and (ii) compliance on the part of United States
Steel or any member of the United States Steel Tax Group with its
obligations under this Agreement. United States Steel shall reimburse
Marathon for all reasonable costs and expenses incurred by Marathon in
connection with obtaining a Supplemental Ruling requested by United States
Steel.
SECTION 3.06. Buy-out Payments.
(a) In General. Any payment made pursuant to this Section 3.06 (a
"Buy-out Payment") shall be determined as follows.
(b) Buy-out Payments by Marathon.
(i) Amount of Buy-out Payment.
The amount of a Buy-out Payment shall be determined by the
parties. If the parties are unable to agree on the amount of a Buy-out
Payment within 30 Calendar Days from the time that the position which
Marathon declines to take is proposed by United States Steel, and United
States Steel does not withdraw its request and Marathon does not agree to
take the position proposed (and the time available for taking such position
has not expired), then the amount shall be determined pursuant to Dispute
Resolution as provided in Section 11.01 of this Agreement in accordance
with the following principles:
(A) The amount shall reflect the extent to which
each party has acted in good faith with respect to the position proposed by
United States Steel; and
(B) The amount shall reflect the total benefit
that would have been realized for all relevant taxable years by United
States Steel had the position proposed by it been taken, including changes
to the Separate Return Liability of United States Steel, payments from and
to Marathon pursuant to Section 5.03 of this Agreement, Federal Tax
interest savings and costs which would have been allocated to United States
Steel, and the likelihood that any such benefits projected to be realized
in future years in fact would have been received; and
(C) The amount shall reflect the relative
likelihood that the position proposed by United States Steel would have
prevailed in litigation; and
(D) The amount shall reflect the time when the
benefits would have been realized by United States Steel giving due regard
to whether the position would have been taken on an original return or at
some other time.
Upon a determination that a party has not acted in good faith, the amount
may be reduced (but not below zero ($0)) and/or costs may be awarded as
appropriate.
(ii) When Buy-out Payments are to be Made.
Unless the parties otherwise agree, a Buy-out Payment shall be
made within 30 Calendar Days of the time when United States Steel would
have received the relevant benefit if Marathon had agreed to pursue the
position proposed by United States Steel. If the amount of a Buy-out
Payment is determined pursuant to Dispute Resolution, Marathon shall make
such Buy-out Payment no later than 30 Calendar Days following the
conclusion of such Dispute Resolution, and if such payment date occurs
prior to, or subsequent to, the date on which United States Steel would
have realized the benefit from the proposed position, then the amount of
the Buy-out Payment shall reflect interest from the time such benefit would
have been realized until the actual payment date.
(iii) Tax Item Deemed Transferred.
If Marathon makes a Buy-out Payment with respect to a Tax Item
generated by, or allocated to, the United States Steel Stock Group, such
Tax Item thereafter shall be treated as a Tax Item allocated to the
Marathon Stock Group for all purposes of this Agreement in all relevant
taxable periods.
(c) Buy-out Payments By United States Steel.
The provisions of Section 3.06(b) of this Agreement shall be
applied with respect to any Buy-out Payment by United States Steel by
substituting "United States Steel" for "Marathon" each place that it
appears and by substituting "Marathon" for "United States Steel" each place
that it appears.
ARTICLE IV
DETERMINATION OF EACH GROUP'S SHARE OF THE USX CONSOLIDATED
GROUP'S TAX LIABILITY AND TAX ATTRIBUTES
SECTION 4.01. General.
(a) While the provisions of this Article 4 are intended to reflect
the principles of the USX Tax Allocation and Settlement Policy effective as
of 1991 and as amended and restated as of August 26, 1997, that policy
shall have been revoked in its entirety as provided in Section 2.01 of this
Agreement and the provisions of this Article 4 shall control. The
principles of this Article 4 shall be applied in all relevant years as if
there were two Groups, the Marathon Stock Group and the United States Steel
Stock Group, and all Tax Items of the Delhi Stock Group shall be allocated
to the Marathon Stock Group and the United States Steel Stock Group as
provided in Section 4.02(a)(i)(E) of this Agreement. The determination
under this Article 4 of a Group's allocable share of the tax liability of
the USX Consolidated Group shall be made for the year to which the
adjustment relates rather than for the current year.
(b) The entire determination required under this Article 4 shall
be made whenever it is necessary to determine each Group's share of any tax
liability of the USX Consolidated Group for any Pre-Distribution Period.
(c) Given the uncertain effects of various Tax Items on the total
liability of the USX Consolidated Group, it is understood that a certain
amount of judgment will be necessary to apply this Article 4 and that both
Marathon and United States Steel will act reasonably and in good faith when
applying the principles of this Article 4.
SECTION 4.02. Determination of Each Group's Allocable Share of the
Federal Tax Liability of the USX Consolidated Group and Resulting Tax
Attributes.
If the USX Consolidated Group is a regular taxpayer in the
relevant period, each Group's share of the regular Federal income tax
liability of the USX Consolidated Group and resulting Tax Attributes shall
be determined under Section 4.02(a) of this Agreement; if the USX
Consolidated Group is an alternative minimum taxpayer in the relevant
period, each Group's share of the alternative minimum tax liability of the
USX Consolidated Group and resulting Tax Attributes shall be determined
under Section 4.02(b) of this Agreement.
(a) Determination of Groups' Allocable Share if the USX
Consolidated Group is a Regular Taxpayer in the Relevant Period.
Each Group's allocable share of the regular Federal income tax
liability of the USX Consolidated Group ("Total USX Liability") shall be
determined by calculating the Group's Separate Return Liability pursuant to
Section 4.02(a)(i) and then adjusting for the effects of the Consolidated
Federal Tax Return of the USX Consolidated Group pursuant to Section
4.02(a)(ii). Each Group's share of the resulting Tax Attributes shall be
determined by application of Section 4.02(a)(iii).
(i) Groups' Separate Return Liability.
The Federal regular income tax liability of the United States
Steel Stock Group and the Marathon Stock Group (the "Separate Return
Liability") shall be determined as if each Group were filing its own
separate consolidated return (the "Separate Return Basis"). Without
limiting the generality of the foregoing statement, the following special
rules shall apply:
(A) For purposes of determining the Separate
Return Liability of each Group, the taxable income or loss of each Group
shall be the income or loss of each Group for financial statement purposes
adjusted as shown on an IRS Form Schedule M associated with such Group. Any
item of income or expense that is allocated between the Groups for
financial statement purposes shall be allocated in a manner consistent with
such financial statements in order to compute taxable income or loss on a
Separate Return Basis.
(B) Dividend Income. For purposes of determining
the Separate Return Liability of each Group, the tax treatment of any
dividend income received by a Group shall be consistent with the actual tax
consequences in the Tax Returns of the USX Consolidated Group.
(C) Tax Elections. All tax elections, which must
be made on a consolidated return basis, shall conform to those elected by
the USX Consolidated Group.
(D) Income Taxes relating to Holding Company
Reorganization and Distribution.
(1) In the event that the USX
Consolidated Group recognizes gain or other income as a result of the
Holding Company Reorganization or Distribution being taxable due to the
breach of a covenant or representation in Article 6 of this Agreement by a
member of the United States Steel Tax Group or an acquisition of United
States Steel that violates Section 355(e) of the Code, the United States
Steel Stock Group shall be allocated such gain or other income. No portion
of such gain or other income shall be allocated to the Marathon Stock
Group.
(2) In the event that the USX
Consolidated Group recognizes gain or other income as a result of the
Holding Company Reorganization or Distribution being taxable due to the
breach of a covenant or representation in Article 6 of this Agreement by a
member of the Marathon Tax Group or an acquisition of Marathon that
violates Section 355(e) of the Code, the Marathon Stock Group shall be
allocated such gain or other income. No portion of such gain or other
income shall be allocated to the United States Steel Stock Group.
(3) In the event that the USX
Consolidated Group recognizes gain or other income as a result of the
Holding Company Reorganization or Distribution being taxable due to an
acquisition that violates Section 355(e) of the Code, and both United
States Steel and Marathon have been acquired in transactions that are
presumed to violate Section 355(e) of the Code (e.g., transactions that
involve acquisitions by a third party of 50 percent or more of the stock of
the relevant corporation), then such gain or other income shall be
allocated to the Group whose acquisition occurred first in time (based on
closing date). In the event that the USX Consolidated Group recognizes gain
or other income as a result of the Holding Company Reorganization or
Distribution being taxable under any other provision of the Code due to the
breach of a covenant or representation in Article 6 of this Agreement, and
both United States Steel and Marathon have breached a covenant or
representation in Article 6 of this Agreement, then such gain or other
income shall be allocated to the Group whose action causing such breach
occurred first in time. No portion of such gain or other income shall be
allocated to the other Group. Notwithstanding the foregoing, if the
Distribution is characterized as other than a distribution of the stock of
United States Steel and both United States Steel and Marathon (I) have been
acquired in transactions that are presumed to violate Section 355(e) of the
Code (e.g., transactions that involve acquisitions by a third party of 50
percent or more of the stock of the relevant corporation) or (II) have
breached a covenant or representation in Article 6 of this Agreement, then
any gain or other income recognized as a result of the Holding Company
Reorganization or Distribution being taxable under any provision of the
Code shall be allocated to the Group with respect to which such gain or
other income is recognized.
(4) In the event that the USX
Consolidated Group recognizes gain or other income as a result of the
Holding Company Reorganization or Distribution being taxable, and no
covenant or representation in Article 6 of this Agreement has been breached
and neither United States Steel nor Marathon has been acquired in a
transaction that is presumed to violate Section 355(e) of the Code, then
any gain or other income shall be allocated to the Group with respect to
which such gain or other income is recognized.
(E) Taxes Relating to Sale of Delhi Stock Group.
In the event that the tax liability of the USX Consolidated Group is
adjusted as a result of an adjustment to the taxable gain or loss on the
sale of the Delhi Stock Group or as the result of adjustments to Tax Items
allocated to entities within the Delhi Stock Group, the United States Steel
Stock Group's share of such tax liability shall be 39%. The Marathon Stock
Group's share shall be the remaining portion.
(F) Excess Loss Accounts and Deferred
Intercompany Gains. Any tax liability resulting from the existence of any
excess loss accounts or deferred intercompany gains immediately before the
Distribution shall be allocated to the Group to which it relates and shall
not be treated as a Tax relating to the Distribution under Section
4.02(a)(i)(D) of this Agreement. For purposes of this Agreement, an excess
loss account shall relate to the Group which immediately before the
Distribution owned the stock to which such excess loss account was
attributable, and a deferred intercompany gain shall relate to the Group
which immediately before the Distribution owned the entity whose gain was
deferred.
(G) Offsets to Refund Claims. Any tax liability
that otherwise would be precluded by the relevant statute of limitations
which is applied as an offset to a refund claim shall be allocated to the
Group whose Tax Items are included on such refund claim. In the event that
a refund claim is filed which includes Tax Items of both Groups, any such
offsets shall be allocated first to the Group whose Tax Items generated
such offset and then to the other Group.
Example 1.
Assumptions. For the year at issue, the USX
Consolidated Group files a claim for refund totaling $10 million,
of which $8 million is attributable to Tax Items generated by, or
allocated to, the United States Steel Stock Group and $2 million
is attributable to Tax Items generated by, or allocated to, the
Marathon Stock Group. The Tax Authority has an offset in the
amount of $1 million, which is attributable entirely to Tax Items
generated by, or allocated to, the Marathon Stock Group. The USX
Consolidated Group receives a $9 million refund.
Allocation. The offset is allocated to the
Marathon Stock Group and reduces the portion of the refund
allocated to Marathon to $1 million. Of the $9 million refund
received by the USX Consolidated Group, $8 million is allocated to
the United States Steel Stock Group and $1 million is allocated to
the Marathon Stock Group.
Example 2.
Assumptions. For the year at issue, the USX
Consolidated Group files a claim for refund totaling $10 million,
of which $8 million is attributable to Tax Items generated by, or
allocated to, the United States Steel Stock Group and $2 million
is attributable to Tax Items generated by, or allocated to, the
Marathon Stock Group. The Tax Authority has offsets totaling $4
million, which are attributable entirely to Tax Items generated
by, or allocated to, the Marathon Stock Group. The USX
Consolidated Group receives a $6 million refund.
Allocation. The offset is allocated first to the
Marathon Stock Group and reduces the portion of the refund
allocated to Marathon to $0. The offset is thereafter allocated to
the United States Steel Stock Group, and reduces the refund
allocated to the United States Steel Stock Group to $6 million.
(H) Carryback of Post-Distribution United States
Steel Losses and Credits. Any carryback of losses or credits of the United
States Steel Tax Group to the Tax Returns of the USX Consolidated Group
pursuant to an election described in Section 3.02(c)(ii) of this Agreement
shall, for all purposes of this Agreement, be treated as a Tax Attribute of
the United States Steel Stock Group.
(ii) Adjustments To Group's Separate Return Liability For
Regular Tax Effects Of Consolidated Group.
The Separate Return Liability of each Group determined pursuant to
Section 4.02(a)(i) of this Agreement shall be adjusted for the regular tax
effects of the USX Consolidated Group as follows:
(A) The Total USX Liability shall be determined
for regular tax purposes, taking into account the effects of any
carryforward or carryback of Tax Attributes from prior or future years,
including the effects of any carrybacks from a Tax Return for a
Post-Distribution Period of the United States Steel Tax Group carried back
pursuant to Section 4.02(a)(i)(H) of this Agreement.
(B) The Separate Return Liabilities of each
Group determined pursuant to Section 4.02(a)(i) of this Agreement shall be
combined (the "Combined Separate Return Liabilities"). The Combined
Separate Return Liabilities shall be subtracted from the Total USX
Liability to determine the aggregate net benefit or detriment of filing a
Consolidated Federal Income Tax Return (the "Consolidated Return Benefit or
Detriment").
(C) The Consolidated Return Benefit or Detriment
shall be allocated to the Group whose Tax Attributes caused the benefit or
detriment. Such allocation shall be consistent with the actual usage of the
Tax Attributes on the Tax Returns of the USX Consolidated Group. Without
limiting the generality of the foregoing statement, the following special
rules shall apply:
(1) For these purposes, Tax Attributes
shall be deemed to cause a benefit to the extent that such Tax Attributes
are used on the Tax Returns of the USX Consolidated Group but are not used
by a Group on a Separate Return Basis; Tax Attributes shall be deemed to
cause a detriment to the extent that such Tax Attributes are used by a
Group on a Separate Return Basis but are not used on the Tax Returns of the
USX Consolidated Group (except where preemption by the other Group's Tax
Attributes occurs as set forth in Section 4.02(a)(iii) of this Agreement).
Thus, the effect of a statutory limitation on the use of a Group's Tax
Attribute on a Tax Return of the USX Consolidated Group shall be
disregarded even if the statutory limitation is attributable to Tax Items
of the other Group.
Example.
Assumptions. The Marathon Stock Group generates
a $100 foreign tax credit that is used for purposes of computing
the Separate Return Liability of the Marathon Stock Group for such
year. The United States Steel Stock Group generates $100 of
interest expense that is used in its entirety to compute the
Separate Return Liability of the United States Steel Stock Group
for the year and decreases the amount of the USX Consolidated
Group's foreign source income. As a result of such interest
expense, only $50 of the Marathon Stock Group's foreign tax
credits is used in such year.
Allocation. For purposes of allocating any net
Consolidated Return Benefit or Detriment, the United States Steel
Group's $100 of interest expense shall be treated as being used on
the Tax Returns of the USX Consolidated Group and only $50 of the
Marathon Stock Group's foreign tax credits shall be treated as
being used on the Tax Returns of the USX Consolidated Group.
(2) To determine the utilization of
each Group's share of a particular Tax Attribute when the amount of such
Tax Attribute available exceeds the total amount of such Tax Attribute
capable of being utilized on the Tax Return of the USX Consolidated Group
(the "Consolidated Tax Attribute"), each Group's portion of the
Consolidated Tax Attribute shall be an amount which bears the same ratio to
the Consolidated Tax Attribute utilized as the amount of each Group's
available Tax Attribute bears to the sum of all of the Groups' available
Tax Attributes; provided that, the amount allocated to a Group shall not
exceed the amount utilized by such Group on a Separate Return Basis. Each
Group's remaining carryforwards and carrybacks of such Tax Attributes shall
be adjusted to reflect the utilization determined under this Section
4.02(a)(ii)(C)(2).
Example 1.
Assumptions. In the year at issue, each of the
Marathon Stock Group and United States Steel Stock Group has $100
of MTC available. The USX Consolidated Group is able to use $100
of MTC on its Consolidated Federal Tax Return for such year. On a
Separate Return Basis, the Marathon Stock Group is able to use
$100 of MTC, and the United States Steel Stock Group is able to
use $50 of MTC.
Allocation. The amount of each Group's Tax
Attributes utilized on the Consolidated Federal Tax Return of the
USX Consolidated Group is determined as follows. The amount
utilized by each Group is deemed to be an amount equal to the
ratio of each Group's available Tax Attributes to the amount of
such Tax Attributes utilized on USX's Consolidated Federal Tax
Return. Since in this case each Group has $100 of MTC on a
Separate Return Basis, each Group would be deemed to utilize 50%
of the total utilized, or $50 of MTC.
Example 2.
Assumptions. In the year at issue, each of the
Marathon Stock Group and United States Steel Stock Group has $100
of MTC available. The USX Consolidated Group is able to use $100
of MTC on its Consolidated Federal Tax Return for such year. On a
Separate Return Basis, the Marathon Stock Group is able to use
$100 of MTC, and the United States Steel Stock Group is able to
use $40 of MTC.
Allocation. The amount of each Group's Tax
Attributes utilized on the Consolidated Federal Tax Return of the
USX Consolidated Group is determined as follows. The amount
utilized by each Group is deemed to be an amount equal to the
ratio of each Group's available Tax Attributes to the amount of
such Tax Attributes utilized on USX's Consolidated Federal Tax
Return limited by each Group's use of such Tax Attribute on a
Separate Return Basis. Since the United States Steel Stock Group
only utilized $40 of MTC on a Separate Return Basis, it shall be
treated as having utilized $40 of MTC on the USX Consolidated
Federal Tax Return and Marathon shall be treated as having
utilized $60 of MTC. United States Steel shall have $60 of the
remaining MTC carryforward or carryback, and Marathon shall have
$40.
(D) Determination Of Adjusted Separate Return
Liability and Benefit. Each Group's Separate Return Liability shall be
adjusted to reflect the portion of the Consolidated Return Benefit or
Detriment allocated to such Group under this Section 4.02(a)(ii) (the
"Adjusted Separate Return Liability"). To the extent a Group's Adjusted
Separate Return Liability for a taxable period is below zero, and the
Adjusted Separate Return Liability of another Group is greater than the
Total USX Liability for that same taxable period, then such other Group
shall have realized a benefit to the extent of the difference between its
Adjusted Separate Return Liability and the Total USX Liability and shall
make a payment under Section 5.03(a)(ii) of this Agreement.
Example 1.
In the year at issue, Marathon has an Adjusted
Separate Return Liability of $200, United States Steel has an
Adjusted Separate Return Liability of ($100), and the Total USX
Liability is $100. Marathon shall be treated as having realized a
benefit of $100 (the difference between Marathon's Adjusted
Separate Return Liability and the USX Total Liability), and a
payment of $100 will be required from Marathon under Section
5.03(a)(ii) of this Agreement.
Example 2.
In the year at issue, Marathon has a Separate
Return Liability of $200, United States Steel has a Separate
Return Liability of $100. The Total USX Liability is $200 because
of the use of $100 of United States Steel MTC's, which United
States Steel could not use on a Separate Return Basis. The $100 of
Consolidated Return Benefit shall be allocated to United States
Steel, decreasing its Adjusted Separate Return Liability from $100
to $0. Marathon's Adjusted Separate Return Liability remains at
$200, and no payment will be required from Marathon under Section
5.03(a)(ii) of this Agreement.
(iii) Allocation of Tax Attributes and Adjustments.
Tax Attributes in the relevant year shall be allocated to the
Group that generated them. If and when possible, adjustments shall be made
to reflect as closely as possible the Separate Return Liability of each
Group where such adjustments may be made without affecting the Separate
Return Liability of the other Group. Without limiting the generality of the
foregoing, the following principles shall apply:
(A) Preemption Rule.
For any Pre-Distribution Period, to the extent that a Group's Tax
Attributes could have been utilized on a Separate Return Basis but actually
are not used on the Tax Return of the USX Consolidated Group due to
preemption by the other Group's Tax Attributes which could not have been
used on a Separate Return Basis but are used on the Tax Return of the USX
Consolidated Group (the "Preempting Attributes"), then (1) for all
purposes, including specifically for purposes of applying the provisions of
Articles 4 and 5 of this Agreement, the Preempting Attributes shall not be
treated as utilized on the Tax Return of the USX Consolidated Group, and
instead, (2) for purposes of applying this Article 4, there shall be, in
all relevant years, a reallocation of Tax Attributes between the Groups in
an amount equal to the Tax Attributes which have been preempted and which
appropriately reflects each Group's Separate Return Liability.
Example.
Assumptions. In the year at issue, the Marathon
Stock Group is able to use $100 of MTC on a Separate Return Basis.
In the same year, the USX Consolidated Group utilizes $286 of net
operating losses of the United States Steel Stock Group, which
under the relevant ordering rules of the Code, preempt and
displace in their entirety the $100 of MTC utilized by the
Marathon Stock Group on a Separate Return Basis. The United States
Steel Stock Group could not have used its net operating losses on
a Separate Return Basis. There is no Consolidated Return Benefit
or Detriment, because the utilization of the $286 of net operating
losses of the United States Steel Stock Group exactly offsets the
benefits of the utilization of the $100 of MTC of the Marathon
Stock Group.
Allocation. For purposes of Articles 4 and 5 of
this Agreement, the Marathon Stock Group shall be treated as if
its entire $100 of MTC were utilized on the Consolidated Federal
Tax Return of the USX Consolidated Group (thus, Marathon shall not
be required to make a payment pursuant to Section 5.03(a)(ii) of
this Agreement associated with the utilization of the United
States Steel net operating losses), and the MTC not so utilized by
the USX Consolidated Group but treated as having been utilized,
shall be reallocated to the United States Steel Stock Group for
all purposes, including, without limitation, for purposes of
further application of this Article 4.
(B) Displacement By Subsequent Attributes.
If in any Pre-Distribution Period ("Year 1") a Group ("Group A")
realizes the benefit from the utilization of the Tax Attributes of another
Group ("Group B") on the Tax Return of the USX Consolidated Group and makes
a payment for such realization under Section 5.03 of this Agreement, and in
a subsequent year ("Year 2") Group A generates Tax Attributes which, on a
Separate Return Basis, could have been carried back and utilized in Year 1,
but which are not so carried back and utilized on the Tax Return of the USX
Consolidated Group, then (1) for all purposes, including specifically for
purposes of applying the provisions of Articles 4 and 5 of this Agreement,
Group A shall be treated as if it had not realized the benefit from the
utilization of Group B's Tax Attributes in Year 1 (thus requiring Group B
to refund to Group A the Section 5.03 payment previously received from
Group A in Year 1), and (2) for purposes of applying this Article 4, there
shall be, in all relevant years, a reallocation of Tax Attributes between
the Groups to appropriately reflect each Group's Separate Return Liability;
provided that, if the displaced attribute cannot be utilized on a
Pre-Distribution Period Tax Return of the USX Consolidated Group, then no
reallocation of attributes shall be made under this Section
4.02(a)(iii)(B).
Example.
Assumptions. In 1998, the Marathon Stock Group
generates $200 of net operating losses which it is unable to use
on a Separate Return Basis; the United States Steel Group
generates $100 of income, which on the Tax Return of the USX
Consolidated Group is offset by $100 of the Marathon net operating
losses. United States Steel makes a payment to Marathon for the
use of the net operating losses under Section 5.03 of this
Agreement. In 1999, the United States Steel Stock Group generates
$100 of losses and the Marathon Stock Group has no income; on a
Separate Return Basis, United States Steel would have been able to
carry the losses back to 1998, but no such carryback is available
on the Tax Returns of the USX Consolidated Group.
Allocation. For purposes of this Article 4 and
Article 5 of this Agreement, the United States Steel Stock Group
shall not be treated as having used the $100 of Marathon losses in
1998, Marathon shall refund the Section 5.03 payment received from
United States Steel in 1998, and the $100 of 1999 United States
Steel losses shall be reallocated to Marathon.
(b) Determination of Groups' Allocable Share if the USX
Consolidated Group is an Alternative Minimum Taxpayer in the Relevant
Period.
Each Group's allocable share of the alternative minimum tax
("AMT") liability of the USX Consolidated Group ("Total USX AMT Liability")
shall be determined under Section 4.02(b)(i) of this Agreement, and each
Group's allocable share of the resulting Tax Attributes (Minimum Tax
Credits or "MTCs") shall be determined under Section 4.02(b)(ii). For these
purposes, AMT refers to the tentative minimum tax liability computed under
Code Section 55(b) and not the excess amount computed under Code Section
55(a).
(i) Each Group's Allocable Share Of the AMT Liability of
the USX Consolidated Group.
Each Group's allocable share of the Total USX AMT Liability shall
be determined by calculating each Group's AMT liability computed on a
Separate Return basis ("AMT Separate Return Liability") and then adjusting
for the effects of the Consolidated Federal Tax Return of the USX
Consolidated Group as follows:
(A) Determination of AMT Separate Return
Liability. Each Group's AMT Separate Return Liability shall be determined
by applying the principles set forth in Section 4.02(a)(i) of this
Agreement on an AMT basis.
(B) Adjustments To Group's AMT Separate Return
Liability For AMT Effects Of Consolidated Group. Each Group's AMT Separate
Return Liability shall be adjusted for any AMT Consolidated Return Benefit
Or Detriment by applying the principles in Section 4.02(a)(ii) of this
Agreement on an AMT basis ("Adjusted AMT Separate Return Liability").
(C) Allocation Of Total USX AMT Liability. The
amount of Total USX AMT Liability is allocated to each Group up to the
lesser of the Total USX AMT Liability or such Group's positive Adjusted AMT
Separate Return Liability.
(ii) Each Group's Allocable Share of the Resulting MTCs
and Benefit.
MTCs of the USX Consolidated Group (the "Consolidated MTCs")
shall, to the extent possible, be allocated to each of the Groups in an
amount such that the total regular Tax Attributes (i.e., Tax Attributes
used against regular tax, including MTCs) received by the Group equals the
excess of such Group's allocable share of the Total USX AMT Liability over
its Adjusted Separate Return Liability (as computed under Section 4.02(a)
of this Agreement). To the extent that the allocation of regular Tax
Attributes is less than the excess of such Group's allocable share of the
Total USX AMT Liability over its Adjusted Separate Return Liability, then
the other Group shall have realized a benefit to the extent of such
difference and shall make a payment under Section 5.03(a)(ii) of this
Agreement.
Example 1.
Assumptions. Marathon's Adjusted Separate Return
Liability is $140, and its Adjusted AMT Separate Return Liability
is $100; United States Steel's Adjusted Separate Return Liability
is ($105), and its Adjusted AMT Separate Return Liability is
($20). The Total USX Liability is $35, and the Total USX AMT
Liability is $80.
Section 4.02(b)(i) Allocations. Marathon's share
of the Total USX AMT Liability is $80, which equals the lesser of
the Total USX AMT Liability or its positive Adjusted AMT Separate
Return Liability. United States Steel's share is $0 since it has
no positive Adjusted AMT Separate Return Liability.
Section 4.02(b)(ii) Allocations. The USX
Consolidated Group will receive Consolidated MTCs of $45, which
equals USX's $80 AMT liability minus $35 regular tax liability.
There are no other regular Tax Attributes generated in the year.
United States Steel's share of the resulting Consolidated MTCs
equals $45 because its $0 allocable share of the Total USX AMT
Liability exceeds its ($105) Adjusted Separate Return Liability.
In contrast, Marathon's $80 allocable share of the Total USX AMT
Liability is less than its $140 Adjusted Separate Return
Liability, and it is not allocated any Consolidated MTCs. Since
the $45 of regular Tax Attributes (in this case, Consolidated
MTCs) received by United States Steel is less than the $105
difference between United States Steel's $0 allocable share of the
Total USX AMT Liability and its ($105) Adjusted Separate Return
Liability, Marathon has received a benefit to the extent of the
difference, $60, requiring a payment pursuant to Section
5.03(a)(ii) of this Agreement. In contrast, since Marathon's $80
allocable share of the Total USX AMT Liability is less than its
$140 Adjusted Separate Return Liability, United States Steel has
not received a benefit requiring a payment pursuant to Section
5.03(a)(ii) of this Agreement.
Example 2.
Assumptions. Marathon's Adjusted Separate Return
Liability is $70, and its Adjusted AMT Separate Return Liability
is $80; United States Steel's Adjusted Separate Return Liability
is ($70), and its Adjusted AMT Separate Return Liability is $40.
The Total USX Liability is $0, and the Total USX AMT Liability is
$120.
Section 4.02(b)(i) Allocations. Marathon's share
of the Total USX AMT Liability is $80, which equals the lesser of
the Total USX AMT Liability or its positive Adjusted AMT Separate
Return Liability. United States Steel's share of the Total USX AMT
Liability is $40, which equals the lesser of the Total USX AMT
Liability or its positive Adjusted AMT Separate Return Liability.
Section 4.02(b)(ii) Allocations. The USX
Consolidated Group will receive total Consolidated MTCs of $120,
which equals USX's $120 AMT liability minus $0 regular tax
liability. There are no other regular Tax Attributes generated in
the year. Marathon's share of the resulting Consolidated MTCs is
$10, which equals the difference between its $80 allocable share
of the Total USX AMT Liability and its $70 Adjusted Separate
Return Liability. United States Steel's share of the resulting
Consolidated MTCs is $110, which equals the difference between its
$40 allocable share of the Total USX AMT Liability and its ($70)
Adjusted Separate Return Liability. Since the $110 of regular Tax
Attributes (in this case, Consolidated MTCs) received by United
States Steel equals the difference between United States Steel's
$40 allocable share of the Total USX AMT Liability and its ($70)
Adjusted Separate Return Liability, Marathon did not receive a
benefit requiring a payment pursuant to Section 5.03(a)(ii) of
this Agreement. Similarly, since the $10 of regular Tax Attributes
(in this case, Consolidated MTCs) received by Marathon equals the
difference between Marathon's $80 allocable share of the Total USX
AMT Liability and its $70 Adjusted Separate Return Liability,
United States Steel received no benefit requiring a payment
pursuant to Section 5.03(a)(ii) of this Agreement.
Example 3.
Assumptions. Marathon's Adjusted Separate Return
Liability is $70, its AMT Separate Return Liability is $80, and
its Adjusted AMT Separate Return Liability is $40 (i.e., there is
an AMT Consolidated Return Benefit of $40 allocable to Marathon
pursuant to the principles of Section 4.02(a)(ii) of this
Agreement); United States Steel's Adjusted Separate Return
Liability is ($70), and its Adjusted AMT Separate Return Liability
is $20. The Total USX Liability is $0, and the Total USX AMT
Liability is $60.
Section 4.02(b)(i) Allocations. Marathon's share
of the Total USX AMT Liability is $40, which equals the lesser of
the Total USX AMT Liability or its positive Adjusted AMT Separate
Return Liability. United States Steel's Total USX AMT Liability is
$20, which equals the lesser of the Total USX AMT Liability or its
positive Adjusted AMT Separate Return Liability.
Section 4.02(b)(ii) Allocations. The USX
Consolidated Group will receive total Consolidated MTCs of $60,
which equals USX's $60 AMT liability minus $0 regular tax
liability. There are no other regular Tax Attributes generated in
the year. United States Steel's share of the resulting
Consolidated MTCs is $60, because its $20 allocable share of the
Total USX AMT Liability exceeds its ($70) Adjusted Separate Return
Liability. Marathon's share of the resulting Consolidated MTCs is
$0, because its $40 allocable share of the Total USX AMT Liability
is less than its $70 Adjusted Separate Return Liability. Since the
$60 of regular Tax Attributes (in this case, Consolidated MTCs)
received by Steel is less than the $90 difference between United
States Steel's $20 allocable share of the Total USX AMT Liability
and its ($70) Adjusted Separate Return Liability, Marathon has
received a benefit to the extent of the difference, $30, requiring
a payment pursuant to Section 5.03(a)(ii) of this Agreement. In
contrast, since Marathon's $40 allocable share of the Total USX
AMT Liability is less than its $70 Adjusted Separate Return
Liability, Steel has not received a benefit requiring a payment
pursuant to Section 5.03(a)(ii) of this Agreement.
Example 4.
Assumptions. Marathon's Adjusted Separate Return
Liability is $10, and its Adjusted AMT Separate Return Liability
is $100; United States Steel's Adjusted Separate Return Liability
is $10, and its Adjusted AMT Separate Return Liability is ($20).
The Total USX Liability is $20, and the Total USX AMT Liability is
$80.
Section 4.02(b)(i) Allocations. Marathon's share
of the Total USX AMT Liability is $80, which equals the lesser of
the Total USX AMT Liability or its positive Adjusted AMT Separate
Return Liability. United States Steel's share of the Total USX AMT
Liability is $0, which equals the lesser of the Total USX AMT
Liability or its positive Adjusted AMT Separate Return Liability.
Section 4.02(b)(ii) Allocations. The USX
Consolidated Group will receive total Consolidated MTCs of $60,
which equals USX's $80 AMT liability minus $20 regular tax
liability. In addition, there are no other regular Tax Attributes
generated in the year. Marathon's share of the resulting
Consolidated MTCs is $60, because its $80 allocable share of the
Total USX AMT Liability exceeds its $10 Adjusted Separate Return
Liability. United States Steel's share of the resulting
Consolidated MTCs is $0, because its $0 allocable share of the
Total USX AMT Liability is less than its $10 Adjusted Separate
Return Liability. Since the $60 of regular Tax Attributes (in this
case, Consolidated MTCs) received by Marathon is less than the
difference between Marathon's $80 allocable share of the Total USX
AMT Liability and its $10 Adjusted Separate Return Liability,
United States Steel receive a benefit in this amount requiring a
payment pursuant to Section 5.03(a)(ii) of this Agreement. In
contrast, since United States Steel's $0 allocable share of the
Total USX AMT Liability is less than its $10 Adjusted Separate
Return Liability, Marathon has not received a benefit requiring a
payment pursuant to Section 5.03(a)(ii) of this Agreement.
Example 5.
Assumptions. Marathon's Adjusted Separate Return
Liability is $50, and its Adjusted AMT Separate Return Liability
is $100; United States Steel's Adjusted Separate Return Liability
is ($100), and its Adjusted AMT Separate Return Liability is
($20). The Total USX Liability is ($50), and the Total USX AMT
Liability is $80.
Section 4.02(b)(i) Allocations. Marathon's share
of the Total USX AMT Liability is $80, which equals the lesser of
the Total USX AMT Liability or its positive Adjusted AMT Separate
Return Liability. United States Steel's share of the Total USX AMT
Liability is $0, which equals the lesser of the Total USX AMT
Liability or its positive Adjusted AMT Separate Return Liability.
Section 4.02(b)(ii) Allocations. The USX
Consolidated Group will receive total Consolidated MTCs of $80,
which equals USX's $80 AMT liability minus $0 regular tax
liability. In addition, there is $50 of regular tax net operating
losses generated in the year, which under Section 4.02(a)(iii) are
allocated to United States Steel. Marathon's share of the
resulting Consolidated MTCs is $30, which equals its $80 allocable
share of the Total USX AMT Liability less its $50 Adjusted
Separate Return Liability. United States Steel's share of the
resulting Consolidated MTCs is $50, so that the total regular Tax
Attributes received by United States Steel (in this case, net
operating losses plus Consolidated MTCs) equals the $100
difference between its $0 allocable share of the Total USX AMT
Liability less its ($100) Adjusted Separate Return Liability.
Since the $30 of regular Tax Attributes (in this case,
Consolidated MTCs) received by Marathon equals the difference
between Marathon's $80 allocable share of the Total USX AMT
Liability and its $50 Adjusted Separate Return Liability, United
States Steel has not received a benefit requiring a payment
pursuant to Section 5.03(a)(ii) of this Agreement. Similarly,
since the $100 of regular Tax Attributes (in this case,
Consolidated MTCs and net operating losses) received by United
States Steel equals the difference between United States Steel's
$0 allocable share of the Total USX AMT Liability and its ($100)
Adjusted Separate Return Liability, Marathon has not received a
benefit requiring a payment pursuant to Section 5.03(a)(ii) of
this Agreement.
SECTION 4.03. Allocation of Combined State Income Tax Liability.
Any Combined State Income Tax Liability of the USX Consolidated
Group shall be allocated in a manner consistent with the allocation
provided in Section 4.02 of this Agreement for Consolidated Federal Income
Tax Liability.
SECTION 4.04. Transfer Taxes Related To Holding Company
Reorganization and Distribution.
In the event that the USX Consolidated Group owes any transfer,
documentary, sales, use, stamp, or registration taxes and fees ("Transfer
Taxes") as a result of the Holding Company Reorganization or the
Distribution, the United States Steel Stock Group's share of such liability
shall be 35 percent of any such Transfer Taxes. The Marathon Stock Group
shall be liable for the remaining portion of any such Transfer Taxes.
SECTION 4.05. Other Taxes.
Any other Taxes not specifically allocated in this Article 4 shall
be allocated to the Group to which such Tax relates, and any USX
Headquarters Tax liability which is not specifically allocated under any
other section of this Agreement shall be allocated in the same manner as
such Tax was allocated between the Groups for financial statement purposes
with respect to the relevant period.
SECTION 4.06. Deductions and Certain Taxes Related to Stock
Options, SARs, and Restricted Stock.
In the event that an employee or director of the Marathon Tax
Group recognizes taxable income with respect to a stock option, restricted
stock or SAR of United States Steel, the resulting tax deduction shall be
allocated to United States Steel to the extent permitted by law, and any
Payroll Taxes with respect thereto shall be allocated to United States
Steel. In the event that an employee or director of the United States Steel
Tax Group recognizes taxable income with respect to a stock option,
restricted stock or SAR of Marathon, the resulting tax deduction shall be
allocated to Marathon to the extent permitted by law, and any Payroll Taxes
with respect thereto shall be allocated to Marathon.
ARTICLE V
TAXES AND RELATED OBLIGATIONS
SECTION 5.01. Payment of Taxes to Tax Authorities.
(a) Marathon shall pay (or cause to be paid) all Federal and State
Taxes (including estimated Taxes and any adjustments to Taxes subsequently
determined), interest, and Penalties with respect to any Tax Return of the
USX Consolidated Group for all Pre-Distribution Periods; Marathon shall pay
(or cause to be paid) all Taxes, interest, and Penalties relating to Tax
Returns that Marathon is responsible for preparing pursuant to Sections
3.02(a)(i) and 3.02(a)(ii) of this Agreement; United States Steel shall pay
(or cause to be paid) all Taxes, interest, and Penalties relating to Tax
Returns that United States Steel is responsible for preparing pursuant to
Section 3.02(a)(iii) of this Agreement; and each entity responsible for
filing a foreign Tax Return pursuant to Section 3.02(a)(iv) of this
Agreement shall pay all Taxes, interest, and Penalties with respect to such
Tax Return.
(b) At any time, Marathon in its sole discretion may make a cash
remittance to a Tax Authority with respect to Federal Taxes or Combined
State Taxes to stop the running of interest in whole or in part. At any
time, United States Steel may request that Marathon make a cash remittance
to a Tax Authority to stop the running of interest in whole or in part with
respect to a tax deficiency related to a Tax Item generated by, or
allocated to, the United States Steel Stock Group, and Marathon shall
comply with such remittance request; provided that, United States Steel
makes a payment to Marathon pursuant to Section 5.02(d)(ii) of this
Agreement.
(c) Pursuant to any agreement with United States Steel under
Section 3.03(f) of this Agreement, Marathon shall make a cash remittance to
a Tax Authority to obtain the jurisdiction of a United States district
court, the United States Court of Federal Claims, or a state court in any
Tax Proceeding relating to a Tax described in this Agreement.
(d) The parties may agree that, to the extent permitted by law,
any payment to a Tax Authority with respect to a Tax of the USX
Consolidated Group for a Pre-Distribution Period required to be paid by
Marathon pursuant to Section 5.01 shall be allocated between the parties
and that each party shall pay directly to the Tax Authority its share (as
determined under this Agreement) of such Tax. Any payment by United States
Steel pursuant to this Section 5.01(d) shall, to the extent of such
payment, relieve Marathon's obligation to make a payment pursuant to
Section 5.01 of this Agreement and satisfy United States Steel's payment
obligation under Section 5.02 of this Agreement.
SECTION 5.02. Allocation of Tax Payments Between the Groups.
(a) United States Steel Estimated Tax Payments.
(i) No later than 20 Calendar Days prior to the due date
(including all applicable and valid extensions), Marathon shall send to
United States Steel a statement of any estimated tax liability owed to a
Tax Authority by the USX Consolidated Group for any Pre-Distribution
Period, including a statement of United States Steel's allocable share, as
determined under the principles of Article 4 of this Agreement, of such
estimated tax liability.
(ii) No later than two Business Days prior to the due
date (including all applicable and valid extensions), United States Steel
shall pay to Marathon, or Marathon shall pay to United States Steel, as
appropriate, an amount equal to the difference, if any, between United
States Steel's allocable share of the estimated tax liability and the
aggregate amount of any installment payments previously made by the United
States Steel Stock Group or the United States Steel Tax Group with respect
to such taxable period.
(iii) No later than two Business Days following the due
date (including all applicable and valid extensions), Marathon shall
provide United States Steel with a copy of the electronic transmittal
record or other proof that payment of the estimated tax liability was made
to the Tax Authority.
(iv) United States Steel may invoke Dispute Resolution
with respect to a disagreement over any payments required under Section
5.02(a)(ii) of this Agreement only after it has paid to Marathon any such
amounts.
(b) United States Steel End-Of-Year Tentative Tax Payment.
(i) No later than 20 Calendar Days prior to the due date,
Marathon shall send to United States Steel an IRS Form 7004 of the USX
Consolidated Group and a statement of United States Steel's allocable
share, as determined under the principles of Article 4 of this Agreement,
of any tentative tax liability shown on such Form 7004. No later than 20
Calendar Days prior to the due date, Marathon shall send to United States
Steel any tentative or estimated State Tax Returns for each tentative
Combined State Tax liability of the USX Consolidated Group and a statement
of United States Steel's allocable share of any tentative tax liability
shown on such filing as determined under the principles of Article 4 of
this Agreement.
(ii) No later than two Business Days prior to the due
date, United States Steel shall pay to Marathon, or Marathon shall pay to
United States Steel, as appropriate, an amount equal to the difference, if
any, between United States Steel's allocable share of the tentative tax
liability and the aggregate amount of the estimated installment payments
previously made by the United States Steel Stock Group or the United States
Steel Tax Group with respect to such taxable period.
(iii) United States Steel may invoke Dispute Resolution
with respect to a disagreement over any payments required under Section
5.02(b)(ii) of this Agreement only after it has paid to Marathon any such
amounts.
(c) United States Steel Final Tax Payment.
(i) No later than 20 Calendar Days prior to the due date
(including all applicable and valid extensions), Marathon shall send to
United States Steel a final Consolidated Federal Income Tax Return (an IRS
Form 1120) of the USX Consolidated Group and a statement of United States
Steel's allocable share, as determined under the principles of Article 4 of
this Agreement, of any resulting tax liability. No later than 15 Calendar
Days prior to the due date (including all applicable and valid extensions),
Marathon shall send to United States Steel a final Combined State Tax
Return for each Combined State Tax liability of the USX Consolidated Group
and a statement of United States Steel's allocable share, as determined
under the principles of Article 4 of this Agreement, of any resulting tax
liability.
(ii) No later than two Business Days prior to the due
date (including all applicable and valid extensions) for any Tax Return
described in Section 5.02(c)(i), United States Steel shall pay to Marathon,
or Marathon shall pay to United States Steel, as appropriate, an amount
equal to the difference, if any, between the United States Steel's
allocable share of the tax liability as determined by Marathon and the
aggregate amount of the estimated installment payments previously made by
the United States Steel Stock Group or the United States Steel Tax Group,
including any end-of-year tentative tax payment or refund with respect to
such taxable period pursuant to Section 5.02(b)(ii) of this Agreement.
(iii) United States Steel may invoke Dispute Resolution
with respect to a disagreement over any payments required under Section
5.02(c)(ii) of this Agreement only after it has paid to Marathon any such
amounts.
(d) Other Tax Payments.
(i) In the event that United States Steel requests
pursuant to Section 5.01(b) of this Agreement, that Marathon make a cash
remittance to a Tax Authority to stop the running of interest in whole or
in part, United States Steel shall pay to Marathon the full amount that
United States Steel has requested Marathon remit to such Tax Authority no
later than two Business Days prior to the date on which Marathon will make
such remittance to such Tax Authority. If United States Steel fails to make
such payment to Marathon as provided above, Marathon need not make the
requested remittance to the Tax Authority.
(ii) In the event that United States Steel and Marathon
agree pursuant to Section 3.03(f) of this Agreement to obtain the
jurisdiction of a United States district court, the United States Court of
Federal Claims, or a state court in any Tax Proceeding, and a payment is
required pursuant to Section 5.01(c) of this Agreement, then no later than
two Business Days prior to the date on which Marathon shall make such
remittance, United States Steel shall pay to Marathon its appropriate share
of the remittance. For purposes of this Section 5.03(d)(ii), the parties
shall use reasonable efforts to agree on the amount of each party's
appropriate share of such remittance; provided that, if no agreement as to
United States Steel's appropriate share is reached five Business Days prior
to the date on which Marathon will make such remittance to the Tax
Authority, Marathon shall determine United States Steel's appropriate share
based on the ratio of the tax liability relating to Tax Items generated by,
or allocated to, the United States Steel Stock Group that will be litigated
to the total tax liability of the USX Consolidated Group that will be
litigated. United States Steel may invoke Dispute Resolution with respect
to a disagreement over any payment required under this Section 5.02(d)(ii)
only after it has paid to Marathon any such amounts.
(e) Treatment of Adjustments to Taxes, Interest, and Penalties.
(i) Adjustments to Federal Taxes or Combined State Taxes.
(A) Payment Obligation.
If any adjustment is made in a Tax Return relating to Federal
Taxes or Combined State Taxes of the USX Consolidated Group, after the
filing thereof, then within 30 Calendar Days of the time of a Final
Determination of such adjustment, United States Steel shall pay to
Marathon, or Marathon shall pay to United States Steel, as the case may be
and as appropriate, the difference between (1) all payments made, net of
all refunds or recoupments received, by United States Steel in accordance
with the principles of this Section 5.02 for the taxable period covered by
such Tax Return, and (2) the amount of Tax that is allocable to United
States Steel in accordance with the principles of Article 4 of this
Agreement for the taxable period covered by such Tax Return taking such
adjustment into account when redetermining the tax allocation. In the event
that Tax is owed to a Tax Authority following receipt of a Final
Determination, United States Steel may invoke Dispute Resolution with
respect to a disagreement over any payment required under this Section
5.02(e)(i)(A) only after it has paid to Marathon any such amounts.
(B) Refunds Received Prior to Final Determination.
In the event that an amended Tax Return, claim for refund, or
tentative carryback adjustment (including, without limitation, any
Consolidated Federal Tax Returns, Combined State Tax Returns, IRS Form
1139, or comparable form of any Tax Authority) is filed with respect to Tax
Items of the United States Steel Stock Group or the United States Steel Tax
Group pursuant to Section 3.02(b)(iii) of this Agreement and a refund is
received prior to a Final Determination with respect to such amended Tax
Return (such as in the case of a refund pursuant to an IRS Form 1139),
Marathon shall pay such refund to United States Steel no later than two
Business Days following receipt of such refund from the Tax Authority;
except that, if (1) the amended Tax Return, claim for refund, or tentative
carryback adjustment is not supported by a written opinion of outside tax
counsel or a nationally recognized accounting firm indicating that the
positions shown on such amended Tax Return, claim for refund, or tentative
carryback adjustment should prevail if litigated, and (2) United States
Steel does not have an investment grade credit rating at the time when such
refund is received from the Tax Authority, then either (I) United States
Steel shall provide some form of credit enhancement acceptable to Marathon
in which case Marathon shall pay the refund to United States Steel no later
than two Business Days after receipt of the credit enhancement agreed upon
by the parties, or (II) Marathon shall place the refund received from the
Tax Authority into an escrow account for the benefit of United States
Steel, the principal and earnings of which will be applied towards any
liability resulting from a disallowance of, in whole or in part, the
amended Tax Return, claim for refund, or tentative carryback adjustment and
the excess will be distributed to United States Steel at such time as a
Final Determination of the amended Tax Return, claim for refund, or
tentative carryback adjustment is received.
(C) Refunds Received By United States Steel.
In the event that United States Steel receives a refund from a Tax
Authority relating to a Tax Return of the USX Consolidated Group, United
States Steel shall notify Marathon of such refund no later than two
Business Days following its receipt. No later than five Business Days
following notification that such refund has been received by United States
Steel, Marathon shall send to United States Steel a statement of the
allocation of such refund between the parties. United States Steel shall
pay Marathon's share of such refund to Marathon no later than two Business
Days following receipt of such statement from Marathon. United States Steel
may invoke Dispute Resolution with respect to a disagreement over any
payment required under this Section 5.02(e)(i)(C) only after it has paid to
Marathon any such amounts.
(ii) Interest Resulting from Adjustments to Taxes.
(A) Interest Owed To or Received From a Tax
Authority.
If any interest is to be paid to a Tax Authority, or is received
from a Tax Authority, as a result of an adjustment to the USX Total
Liability shown on a Tax Return of the USX Consolidated Group for any
Pre-Distribution Period, such interest shall be allocated between the
United States Steel Stock Group and the Marathon Stock Group by applying
the applicable statutory rate to each Group's incremental tax liability or
refund. No later than five Business Days prior to the date on which
Marathon will make a payment relating to such interest to the relevant Tax
Authority, Marathon shall notify United States Steel of (1) such planned
date, and (2) its appropriate share of such remittance.
Example.
In the year at issue, a deficiency of Tax of
$100 is determined for the USX Consolidated Group attributable to
a Tax Item of the United States Steel Stock Group. Taking into
account any payments made by the United States Steel Stock Group
that offset such deficiency and the timing of such payments, the
United States Steel Stock Group shall be allocated liability for
all interest payments due and owing as a result of the $100
deficiency.
(B) Overpayments and Underpayments.
To the extent that a Group's payments with respect to a Tax Return
of the USX Consolidated Group exceed its allocable share of the adjusted
Total USX Liability, and the other Group's payments with respect to such
Tax Return are less than its allocable share of the adjusted Total USX
Liability, the Group that has overpaid shall be compensated for the benefit
derived from the use of such overpayment by the other Group. The interest
rate utilized for purposes of calculating the amount of the compensatory
payment shall be the average of the overpayment and underpayment rates
published pursuant to Sections 6621(a)(1) (the overpayment rate) and
6621(a)(2) (the underpayment rate) of the Code for such period.
(C) United States Steel Interest Payment
Obligation.
United States Steel shall pay to Marathon (1) United States
Steel's Section 5.02(e)(ii)(A) allocable share of any interest owed to a
Tax Authority no later than two Business Days prior to the date on which
Marathon will make a payment of such interest to the relevant Tax Authority
and (2) the amount of any interest that United States Steel owes Marathon
under Section 5.02(e)(ii)(B) no later than 30 Calendar Days subsequent to a
Final Determination of the tax liability to which such interest is
attributable. United States Steel may invoke Dispute Resolution with
respect to a disagreement over any payment required under this Section
5.02(e)(ii) only after it has paid to Marathon any such amounts.
(D) Marathon Interest Payment Obligation.
Marathon shall pay to United States Steel (1) United States
Steel's Section 5.02(e)(ii)(A) allocable share of any interest received
from a Tax Authority no later than two Business Days subsequent to the date
on which such refund is received (provided that Marathon's obligation to
pay such interest shall be subject to Section 5.02(e)(i)(B) of this
Agreement) and (2) the amount of any interest that Marathon owes United
States Steel under Section 5.02(e)(ii)(B) of this Agreement no later than
30 Calendar Days subsequent to a Final Determination of the tax liability
to which such interest is attributable.
(iii) Penalties Owed to a Tax Authority.
(A) Penalties Associated With a Particular Tax
Item.
In the event that a Penalty is successfully asserted by a Tax
Authority with respect to a Tax Return of the USX Consolidated Group and
such Penalty is associated with a Tax Item of a particular Group or a Tax
Item allocated to a particular Group under this Agreement, then such Group
shall be allocated such Penalty. No later than five Business Days prior to
the date planned for payment of a Penalty under this section, Marathon
shall notify United States Steel of (1) such planned date, and (2) its
appropriate share of such payment.
(B) Penalties Not Associated With A Tax Item.
In the event that a Penalty is successfully asserted by a Tax
Authority with respect to a Tax Return of the USX Consolidated Group and
such Penalty is not associated with a specific Tax Item, then Marathon
shall determine United States Steel's appropriate share based on the ratio
of the adjustments as Finally Determined with respect to Tax Items
generated by, or allocated to, the United States Steel Stock Group to the
total of all such Finally Determined adjustments shown on such Tax Return
which provides the basis for the Penalty. No later than five Business Days
prior to the date planned for payment of a Penalty under this section,
Marathon shall notify United States Steel of (1) such planned date, and (2)
its appropriate share of such payment.
(C) Penalties for Failure to Take Required
Action.
In the event that a Penalty is successfully asserted by a Tax
Authority as a result of a failure to file a Tax Return or pay estimated
Taxes by the USX Consolidated Group, the Group with responsibility for
filing such Tax Return or paying such estimated Taxes under this Agreement
shall be allocated the Penalty. In the event that a Penalty is successfully
asserted by a Tax Authority as a result of a failure to file a Tax Return
or pay estimated Taxes by the USX Consolidated Group prior to the
Distribution, such Penalty shall be allocated 35 percent to United States
Steel and 65 percent to Marathon.
(D) United States Steel Penalty Payment
Obligation.
United States Steel shall pay Marathon the amount of any Penalty
allocated to it under this Section 5.02(e)(iii) no later than two Business
Days prior to the date on which Marathon will make a payment relating to
such Penalty to the relevant Tax Authority. United States Steel may invoke
Dispute Resolution with respect to a disagreement over any payment required
under this Section 5.02(e)(iii) only after it has paid to Marathon any such
amounts.
SECTION 5.03. Payment For Use of Group's Tax Attributes.
(a) Utilization of Tax Attributes.
(i) Pre-Distribution Estimated Benefit Payment.
Prior to the effective time of the Distribution, the Marathon
Stock Group will have paid (through a debt allocation as provided under the
then-existing tax allocation policy) to the United States Steel Stock Group
the estimated amount, discounted as described below, of the payment, if
any, that would have been made by Marathon to United States Steel under
Section 5.03(a)(ii) with respect to Federal Income Taxes of the USX
Consolidated Group for the 2001 tax year. The amount of such payment will
have been determined under the following principles:
(A) The amount of such payment will have
reflected the best estimate of the tentative liability for 2001 Federal
Income Taxes for the USX Consolidated Group.
(B) The amount of the payment will have been
discounted back from the date such payment would have otherwise been due
absent this Section 5.03(a)(i) to the Distribution Date, using a
short-term, after-tax interest rate of 4%.
Any subsequent payments between Marathon and United States Steel described
in this Section 5.03 shall take into account the undiscounted amount of the
payment made under this Section 5.03(a)(i).
(ii) Utilization of Tax Attributes in Pre-Distribution
Periods.
Upon the Effective Realization by any member of the Marathon Stock
Group of the benefit attributable to a Tax Attribute generated by, or
allocated to, the United States Steel Stock Group or the United States
Steel Tax Group, Marathon shall pay to United States Steel an amount equal
to the benefit received by the Marathon Stock Group on the date of
Effective Realization thereof taking into account the sum of any payment
made by Marathon pursuant to Section 5.03(a)(i) and the discount used in
computing the amount of such payment. Upon the Effective Realization by any
member of the United States Steel Stock Group of the benefit attributable
to a Tax Attribute generated by, or allocated to, the Marathon Stock Group,
United States Steel shall pay to Marathon an amount equal to the benefit
received by the United States Steel Stock Group on the date of Effective
Realization thereof. For purposes of this Section 5.03(a)(ii), the amount
of the benefit Effectively Realized is determined under Section
4.02(a)(ii)(D) or Section 4.02(b)(ii) of this Agreement, as the case may
be.
(iii) Utilization of Tax Attributes in Post-Distribution
Periods.
Upon the Effective Realization by any member of the Marathon Tax
Group of the benefit attributable to a Tax Attribute generated by, or
allocated to, the United States Steel Stock Group or the United States
Steel Tax Group, Marathon shall pay to United States Steel, on the date of
Effective Realization thereof, an amount equal to the benefit received by
the Marathon Tax Group. Upon the Effective Realization by any member of the
United States Steel Tax Group of the benefit attributable to a Tax
Attribute generated by, or allocated to, the Marathon Stock Group, United
States Steel shall pay to Marathon, on the date of Effective Realization
thereof, an amount equal to the benefit received by the United Stated Steel
Tax Group. For purposes of this Section 5.03(a)(iii), the amount of a
benefit Effectively Realized by a Group equals the difference between (A)
the tax liability of the Group taking into account utilization of the Tax
Attribute generated by, or allocated to, the other Group and (B) the tax
liability of the Group without utilizing the Tax Attribute of the other
Group.
(b) True-Up Payments.
(i) To the extent that any member of the Marathon Stock
Group or the Marathon Tax Group Effectively Realizes, or has Effectively
Realized under a prior tax allocation policy or agreement, the benefit
attributable to a Tax Attribute generated by, or allocated to, the United
States Steel Stock Group or United States Steel Tax Group (including a
benefit determined under a prior application of this Section 5.03(b)) and
there is an adjustment affecting the utilization of such Tax Attribute
subsequent to such Effective Realization, the amount of the benefit
Effectively Realized shall be redetermined, and United States Steel shall
pay Marathon for any decrease, or Marathon shall pay United States Steel
for any increase as the case may be, in the amount of the benefit
Effectively Realized by the Marathon Stock Group or the Marathon Tax Group.
(ii) To the extent that any member of the United States
Steel Stock Group or United States Steel Tax Group Effectively Realizes, or
has Effectively Realized under a prior tax allocation policy or agreement,
the benefit attributable to a Tax Attribute generated by, or allocated to,
the Marathon Stock Group or the Marathon Tax Group (including a benefit
determined under a prior application of this Section 5.03(b)) and there is
an adjustment affecting the utilization of such Tax Attribute subsequent to
such Effective Realization, the amount of the benefit Effectively Realized
shall be redetermined, and Marathon shall pay United States Steel for any
decrease, or United States Steel shall pay Marathon for any increase as the
case may be, in the amount of the benefit Effectively Realized by the
United States Steel Stock Group or the United States Steel Tax Group.
(iii) The amount of the payment under Sections 5.03(b)(i)
and 5.03(b)(ii) of this Agreement (a "True-Up Payment") shall be the
difference between (A) the benefit Effectively Realized by the Group prior
to the adjustment and (B) the adjusted benefit Effectively Realized by such
Group as determined under Article 4 of this Agreement following the
adjustment.
(c) Notwithstanding Sections 5.03(a) and 5.03(b) of this
Agreement, Marathon shall not be obligated to pay United States Steel any
amount Effectively Realized in a Post-Distribution Period relating to Tax
Attributes generated by, or allocated to, the United States Steel Stock
Group with respect to State Taxes.
SECTION 5.04. Failure to Meet Time Requirements.
Without limiting the generality of Section 12.04(b) of this
Agreement, no failure or delay by any party in taking any action pursuant
to this Article 5, including the provision of any Tax Return or the making
of any payment, shall operate as a waiver of any right, power, or privilege
hereunder. Without limiting the generality of Section 12.05 of this
Agreement, the remedy for any such failure or delay shall be limited to the
actual damages suffered as a result of such failure or delay, including
interest as provided in Section 10.03 of this Agreement for any late
payments.
ARTICLE VI
CERTAIN REPRESENTATIONS AND COVENANTS IN CONNECTION
WITH THE SEPARATION
SECTION 6.01. Representations of Marathon Tax Group.
Marathon and each other member of the Marathon Tax Group represent
to United States Steel and each member of the United States Steel Tax Group
that, as of the date of this Agreement, there is no plan or intention to
(i) liquidate Marathon or its wholly-owned subsidiary, Marathon Oil Company
("MOC"), (ii) sell or otherwise dispose of the assets of Marathon, MOC, or
any other member of the Marathon Tax Group subsequent to the Distribution,
except in the ordinary course of business, or to merge Marathon with
another entity other than mergers occurring in connection with an
acquisition by Marathon in pursuance of the business purpose discussed in
the Ruling and Ruling Documents, (iii) take any action inconsistent with
the information and representations furnished by USX in connection with the
Ruling, (iv) purchase stock of Marathon other than in accordance with the
requirements of Revenue Procedure 96-30 and in conformity with the
representations furnished by Marathon in connection with the Ruling, or (v)
enter into any negotiations, agreements or arrangements with respect to
transactions or events (including, without limitation, stock issuances,
pursuant to the exercise of options or otherwise, option grants, capital
contributions or acquisitions, or a series of such transactions or events)
that may cause the Distribution to be treated under Section 355(e) of the
Code as part of a plan pursuant to which one or more persons acquire,
directly or indirectly, stock of Marathon or United States Steel
representing a "50-percent or greater interest" therein within the meaning
of Section 355(d)(4) of the Code.
SECTION 6.02. Representations of United States Steel Tax Group.
United States Steel and each other member of the United States
Steel Tax Group represent to Marathon and each member of the Marathon Tax
Group that, as of the date of this Agreement, there is no plan or intention
to (i) liquidate United States Steel, (ii) sell or otherwise dispose of the
assets of United States Steel or any other member of the United States
Steel Tax Group subsequent to the Distribution, except in the ordinary
course of business, or to merge United States Steel with another entity
other than mergers occurring in connection with an acquisition by United
States Steel in pursuance of the business purpose discussed in the Ruling
and Ruling Documents, (iii) take any action inconsistent with the
information and representations furnished by USX in connection with the
Ruling, (iv) purchase stock of United States Steel other than in accordance
with the requirements of Revenue Procedure 96-30 and in conformity with the
representations furnished by United States Steel in connection with the
Ruling, or (v) enter into any negotiations, agreements or arrangements with
respect to transactions or events (including, without limitation, stock
issuances, pursuant to the exercise of options or otherwise, option grants,
capital contributions or acquisitions, or a series of such transactions or
events) that may cause the Distribution to be treated under Section 355(e)
of the Code as part of a plan pursuant to which one or more persons
acquire, directly or indirectly, stock of Marathon or United States Steel
representing a "50-percent or greater interest" therein within the meaning
of Section 355(d)(4) of the Code.
SECTION 6.03. Representations of Marathon Tax Group and United
States Steel Tax Group regarding USX Shareholders.
Marathon and each other member of the Marathon Tax Group and
United States Steel and each other member of the United States Steel Tax
Group represent that it is not aware of any plan or intention by any five
percent USX Shareholder and, to its best knowledge, is not aware of any
plan or intention on the part of any particular remaining USX Shareholder
or USX securityholder to sell, exchange, transfer by gift, or otherwise
dispose of any of their stock in, or securities of, Marathon or United
States Steel after the Distribution other than the redemption of the 6.5%
preferred stock of USX and the Quarterly Income Preferred Securities in
connection with the Distribution.
SECTION 6.04. Marathon Tax Group Covenants.
Marathon and each other member of the Marathon Tax Group covenant
to United States Steel and each member of the United States Steel Tax Group
that (i) during the Two-Year Period, Marathon shall continue the active
conduct of a trade or business, within the meaning of Section 355 of the
Code and the regulations promulgated thereunder, that had been conducted
throughout the five-year period prior to the Distribution, (ii) during the
Two-Year Period, Marathon and MOC shall not liquidate, (iii) during the
Two-Year Period, Marathon shall not sell, exchange, distribute, or
otherwise dispose of the assets of Marathon, MOC or any other member of the
Marathon Tax Group, except in the ordinary course of business, and shall
not merge Marathon with another entity other than mergers occurring in
connection with an acquisition by Marathon in pursuance of the business
purpose discussed in the Ruling and Ruling Documents, (iv) no member of the
Marathon Tax Group shall purchase stock of Marathon, other than in
accordance with Revenue Procedure 96-30 and in conformity with the
representations furnished by Marathon in connection with the Tax Ruling,
and (v) on or after the Distribution Date, Marathon shall not enter into
any transaction or make any change in equity structure (including without
limitation, stock issuances, pursuant to the exercise of options or
otherwise, option grants, capital contributions or acquisitions, or a
series of such transactions or events) that may cause the Distribution to
be treated under Section 355(e) of the Code as part of a plan pursuant to
which one or more persons acquire, directly or indirectly, stock of
Marathon or United States Steel representing a "50-percent or greater
interest" therein within the meaning of Section 355(d)(4) of the Code.
SECTION 6.05. United States Steel Tax Group Covenants.
United States Steel and each other member of the United States
Steel Tax Group covenant to Marathon and each member of the Marathon Tax
Group that (i) during the Two-Year Period, United States Steel shall
continue the active conduct of a trade or business, within the meaning of
Section 355 of the Code and the regulations promulgated thereunder, that
had been conducted throughout the five-year period prior to the
Distribution, (ii) during the Two-Year Period, United States Steel shall
not liquidate, (iii) during the Two-Year Period, United States Steel shall
not sell, exchange, distribute, or otherwise dispose of the assets of
United States Steel or any other member of the United States Steel Tax
Group, except in the ordinary course of business, and shall not merge
United States Steel with another entity other than mergers occurring in
connection with an acquisition by United States Steel in pursuance of the
business purpose discussed in the Ruling and Ruling Documents, (iv) no
member of the United States Steel Tax Group shall purchase stock of United
States Steel, other than in accordance with Revenue Procedure 96-30 and in
conformity with the representations furnished by United States Steel in
connection with the Tax Ruling, and (v) on or after the Distribution Date,
United States Steel shall not enter into any transaction or make any change
in equity structure (including without limitation, stock issuances,
pursuant to the exercise of options or otherwise, option grants, capital
contributions or acquisitions, or a series of such transactions or events)
that may cause the Distribution to be treated under Section 355(e) of the
Code as part of a plan pursuant to which one or more persons acquire,
directly or indirectly, stock of Marathon or United States Steel
representing a "50-percent or greater interest" therein within the meaning
of Section 355(d)(4) of the Code.
ARTICLE VII
INDEMNITIES
SECTION 7.01. Indemnification of Marathon Tax Group by United
States Steel Tax Group.
United States Steel and each other member of the United States
Steel Tax Group shall jointly and severally indemnify Marathon and each
other member of the Marathon Tax Group against and hold them harmless from:
(a) liability for Taxes allocated to any member of the United
States Steel Stock Group under Article 4 of this Agreement, including, but
not limited to, Taxes relating to (i) the Distribution or the Holding
Company Reorganization, and (ii) the sale of the Delhi Stock Group or
adjustments to Tax Items allocated to entities within the Delhi Stock
Group;
(b) liability for Taxes attributable to any member of the United
States Steel Tax Group relating to any taxable period; and
(c) liability for any interest or Penalty allocated to United
States Steel under Article 5 of this Agreement.
SECTION 7.02. Indemnification of United States Steel Tax Group by
Marathon Tax Group.
Marathon and each other member of the Marathon Tax Group shall
jointly and severally indemnify United States Steel and each other member
of the United States Steel Tax Group against and hold them harmless from:
(a) liability for Taxes allocated to any member of the Marathon
Stock Group under Article 4 of this Agreement, including, but not limited
to, Taxes relating to (i) the Distribution or the Holding Company
Reorganization, and (ii) the sale of the Delhi Stock Group or adjustments
to Tax Items allocated to entities within the Delhi Stock Group;
(b) liability for Taxes attributable to any member of the Marathon
Tax Group relating to any taxable period; and
(c) liability for any interest or Penalty allocated to Marathon
under Article 5 of this Agreement.
SECTION 7.03. Mutual Indemnification for Failure to Pay.
Each member of the Marathon Tax Group shall jointly and severally
indemnify each member of the United States Steel Tax Group, and their
respective directors, officers and employees, and hold them harmless from
and against any Tax or loss that is attributable to, or results from the
failure of any member of the Marathon Tax Group to make any payment
required to be made under this Agreement. Each member of the United States
Steel Tax Group shall jointly and severally indemnify each member of the
Marathon Tax Group and their respective directors, officers and employees,
and hold them harmless from and against any Tax or loss that is
attributable to, or results from, the failure of any member of the United
States Steel Tax Group to make any payment required to be made under this
Agreement.
SECTION 7.04. Mutual Indemnification for Inaccurate or Incomplete
Information.
Each member of the Marathon Tax Group shall jointly and severally
indemnify each member of the United States Steel Tax Group and their
respective directors, officers and employees, and hold them harmless from
and against any Tax or loss attributable to the negligence of any member of
the Marathon Tax Group in supplying any member of the United States Steel
Tax Group with inaccurate or incomplete information (including estimates),
in connection with the preparation of any Tax Return or with respect to any
Tax Proceeding. Each member of the United States Steel Tax Group shall
jointly and severally indemnify each member of the Marathon Tax Group and
their respective directors, officers and employees, and hold them harmless
from and against any Tax or loss attributable to the negligence of any
member of the United States Steel Tax Group in supplying any member of the
Marathon Tax Group with inaccurate or incomplete information (including
estimates), in connection with the preparation of any Tax Return or with
respect to any Tax Proceeding.
SECTION 7.05. Additional Indemnity Amounts.
Each party with indemnification obligations under Sections 7.01,
7.02, 7.03, or 7.04 of this Agreement (an "Indemnitor") shall also pay to
each party that is indemnified by such Indemnitor under such provision (an
"Indemnitee") all liabilities, losses, damages, assessments, settlements,
judgments, costs or properly documented expenses (including, without
limitation, expenses of investigation and attorneys' fees and expenses)
arising out of or incident to the imposition, assessment or assertion of
any liabilities or damage described in such provision, including, without
limitation, those incurred in the contest in good faith in appropriate
proceedings relating to the imposition, assessment or assertion of any such
liability or damage.
SECTION 7.06. Notice of Claim.
The Indemnitee agrees to give prompt notice to the Indemnitor of
the assertion of any claim, or the commencement of any suit, action or
proceeding in respect of which indemnity may be sought under Sections 7.01,
7.02, 7.03, 7.04, and 7.05 of this Agreement.
SECTION 7.07. Discharge of Indemnity.
An Indemnitor shall discharge its indemnification obligations by
paying all amounts specified in Sections 7.01, 7.02, 7.03, 7.04, or 7.05 of
this Agreement within 30 Calendar Days of demand therefore. After a Final
Determination of an obligation for which an Indemnitee is to be
indemnified, the Indemnitee shall send a statement to the Indemnitor
showing the amount, if any, due under such provisions. Calculation of the
amounts specified in Sections 7.01 and 7.02 of this Agreement shall be in
accordance with the principles of Article 4 of this Agreement. An
Indemnitor may dispute in good faith the fact or the amount of any
indemnification obligation under Sections 7.01, 7.02, 7.03, 7.04 or 7.05 of
this Agreement pursuant to the Dispute Resolution mechanism provided in
Section 11.01 of this Agreement.
ARTICLE VIII
COMMUNICATIONS AND COOPERATION
SECTION 8.01. Consult and Cooperate.
Marathon and United States Steel shall consult and cooperate fully
(and shall cause their respective affiliates to cooperate fully) at such
time and to the extent reasonably requested by a party to this Agreement in
connection with all matters subject to this Agreement. The cooperation
under this Section 8.01 shall include, without limitation:
(a) the provision on reasonable request of any information
(including, without limitation, any books, records, documentation or other
information) pertaining to Tax matters relating to the Marathon Stock Group
and the United States Steel Stock Group, any necessary explanations of
information, and access to personnel, until the expiration of the
applicable statute of limitation (giving effect to any extension, waiver,
or mitigation thereof);
(b) the execution, acknowledgement and delivery of any instrument
or document that may be necessary or helpful in connection with (A) any Tax
Return, (B) any Tax Proceeding or other litigation, investigation or
action, or (C) the carrying out of the parties' respective obligations
under this Agreement;
(c) the use of the parties' reasonable efforts to obtain any
documentation from a Tax Authority, another governmental authority or
another third party that may be necessary or helpful in connection with the
foregoing;
(d) the retention of Tax Records as set forth in Section 9.02 of
this Agreement; and
(e) the assistance of the parties in the preparation of any Tax
Returns described in Sections 3.02(a)(i) and 3.02(b) of this Agreement.
SECTION 8.02. Provide Information.
Marathon and United States Steel shall keep one another fully
informed with respect to any material developments relating to the matters
subject to this Agreement.
ARTICLE IX
TAX RECORDS
SECTION 9.01. Ownership of Tax Records.
Ownership of all books, records, documentation, or other
information relating to any Tax Return or Tax Proceeding of the USX
Consolidated Group shall be determined in accordance with Section 11.1 of
the Agreement and Plan of Reorganization.
SECTION 9.02. General Tax Records Retention Policy.
(a) Marathon and United States Steel shall, and shall cause their
respective affiliates to, retain and provide on reasonable demand books,
records, documentation, or other information relating to any Tax Return or
Tax Proceeding, until the later of (i) the expiration of the applicable
statute of limitations (after giving effect to any extension, waiver, or
mitigation thereof) and (ii) in the event that any claim is made under this
Agreement or by any Tax Authority for which such information is relevant,
the receipt of a Final Determination with respect to such claim.
(b) The following categories of documents shall be retained for
the periods (in years) outlined below.
Functional Description of Records Retention Period
(years)
Federal Income Tax Returns, Audits, Tax Balance Sheets,
and Supporting Data and Schedules Permanent
Correspondence Files Relating to Federal
Tax Settlements, Claims, Legislation, Decisions,
Accounting Instructions, etc. 10
Foreign Taxes Permanent
State Income and Franchise Taxes
Returns, Certificates, and Supporting Data and Schedules 25
Licenses 6
Audits and General Correspondence 25
State Sales, Use and Similar Taxes
Returns, Certificates, and Supporting Data and Schedules 7
Audits and General Correspondence 10
Ad Valorem Taxes
Tax Receipts and Payments 50
All Other Ad Valorem 15
Unemployment Compensation -- Company
Returns and Associated Supporting Data and Schedules 8
Audits, Claims, Charges, and General Correspondence 8
Federal Income and FICA Withholding -- Employees
Returns 15
Information Returns 6
Correspondence 6
State and City Withholding
Returns 6
Correspondence 6
Tax Review Files
Pension Programs 50
Acquisitions, Mergers, Liquidations, and Joint Ventures 50
Insurance, Incentive and Similar Plans 15
All Other, Including Leases, Service Contracts, Timber 25
and Mineral Rights, etc.
General Tax Division Subject Files 10
Tax Exemption Certificates from Customers
Blanket Type 4 years after
last usage
Single Sale Type (unit) 4 years after usage
SECTION 9.03. Exceptions to Duty to Provide Records.
(a) Notwithstanding any other provision of this Agreement, no
member of the Marathon Tax Group shall be required to provide any member of
the United States Steel Tax Group access to or copies of (i) any tax
information as to which any member of the Marathon Tax Group is entitled to
assert the protection of any evidentiary privilege, including, but not
limited to, the attorney-client privilege and the attorney work product
doctrine, or (ii) any tax information as to which any member of the
Marathon Tax Group is subject to an obligation to maintain the
confidentiality of such information. Marathon shall use reasonable efforts
to separate any such information from any other information to which United
States Steel is entitled to access or to which United States Steel is
entitled to copy under this Agreement, to the extent consistent with
preserving its rights under this Section 9.03(a).
(b) Notwithstanding any other provision of this Agreement, no
member of the United States Steel Tax Group shall be required to provide
any member of the Marathon Tax Group access to or copies of (i) any tax
information as to which any member of the United States Steel Tax Group is
entitled to assert the protection of any evidentiary privilege, including,
but not limited to, the attorney-client privilege and the attorney work
product doctrine, or (ii) any tax information as to which any member of the
United States Steel Tax Group is subject to an obligation to maintain the
confidentiality of such information. United States Steel shall use
reasonable efforts to separate any such information from any other
information to which Marathon is entitled to access or to which Marathon is
entitled to copy under this Agreement, to the extent consistent with
preserving its rights under this Section 9.03(b).
ARTICLE X
PAYMENTS
SECTION 10.01. Procedure for Making Payments.
All payments to be made under this Agreement shall be made in
immediately available funds.
SECTION 10.02. Tax Consequences of Payments.
(a) For all tax purposes and notwithstanding any other provision
of this Agreement, to the extent permitted by applicable law, the parties
hereto shall treat any payment made pursuant to this Agreement (other than
an interest payment) as a capital contribution or dividend distribution, as
the case may be, immediately prior to the Distribution Date and,
accordingly, as not includible in the taxable income of the recipient.
(b) If, as a result of a Final Determination, it is determined
that the receipt or accrual of any payment made under this Agreement
results in any increased tax liability or reduction of any Tax Attribute of
the recipient of such payment, the payor shall pay to the recipient an
amount (the "After-Tax Amount") equal to the sum of (i) any increase in the
Taxes of the recipient as a result of receiving the payment from the payor
(which shall itself be grossed up to take into account such payment, if
applicable) and (ii) any interest or Penalty attributable to such increased
tax liability or to the reduction of such Tax Attribute. The payor shall
not be required to pay the After-Tax Amount to the extent (1) the payor
does not receive a deduction for such payment, or (2) the recipient obtains
a deduction corresponding to the payment.
SECTION 10.03. Interest.
Payments made pursuant to this Agreement that are not made within
the period prescribed in this Agreement, or if no period is prescribed
within 15 Calendar Days after demand for payment is made (the "Payment
Period"), shall bear interest for the period from and including the date
immediately following the last Business Day of the Payment Period through
and including the date of payment at a rate equal to the rate for
underpayments under Code Section 6621(a)(2), without regard to the large
corporate underpayment rate provided in Code Section 6621(c). Such interest
shall be calculated on the basis of the actual number of days for which
due.
ARTICLE XI
DISPUTES
SECTION 11.01. Dispute Resolution.
In the event that Marathon, on the one hand, and United States
Steel, on the other hand, disagree as to the amount or calculation of any
payment to be made under this Agreement, or the interpretation or
application of any provision under this Agreement, the parties shall
attempt in good faith to resolve such dispute (the "Dispute"). The parties
shall escalate the Dispute through the executive chain of command, such
that if the chief tax officers are unable to resolve the Dispute within ten
Calendar Days, the chief financial officers will attempt to resolve the
Dispute. If such Dispute is not resolved by the chief financial officers
within 30 Calendar Days following the commencement of the Dispute, each of
United States Steel and Marathon shall have the right to submit such
Dispute to arbitration in accordance with the procedures set forth in this
Section 11.01. Resolution of any and all such Disputes ("Dispute
Resolution") shall be exclusively governed by and settled in accordance
with the provisions of this Section 11.01; provided that nothing contained
herein shall preclude either party from seeking or obtaining injunctive
relief or equitable or other judicial relief to enforce this Section 11.01.
United States Steel or Marathon (each, a "Party") may commence
proceedings hereunder by delivering a written notice (the "Demand") to the
other Party providing a reasonable description of the Dispute to the other
and expressly requesting resolution hereunder. In the event that a Dispute
involves the amount of a payment under this Agreement, the Party with the
payment obligation shall make such payment before commencing arbitration
under this Section.
Following delivery of the Demand, Marathon and United States Steel
shall jointly retain a tax attorney or certified public accountant that is
a member of a nationally recognized law firm or nationally recognized
accounting firm or a tax professor at an accredited law school (the
"Arbitrator") to resolve the Dispute. In the event that the Parties are
unable to agree on an Arbitrator, the Dispute shall be resolved by a panel
consisting of three Arbitrators acting by majority vote (the "Panel"). Of
the three Arbitrators comprising the Panel, one Arbitrator shall be
selected by United States Steel, one Arbitrator shall be selected by
Marathon, and one Arbitrator shall be jointly selected by the Arbitrators
selected by United States Steel and Marathon. If either United States Steel
or Marathon fails to select an Arbitrator within 15 Calendar Days after
delivery of the Demand, or within 15 Calendar Days of appointment of both
Arbitrators they are unable to agree upon a third, then upon application by
either Party such Arbitrator or Arbitrators (meeting the requirements
above) shall be appointed by the Court of Chancery of the State of
Delaware. If an Arbitrator becomes unable to serve, his or her successors
shall be selected or appointed in accordance with this Section. Marathon
and United States Steel shall act in good faith in selecting the Arbitrator
or Panel and shall use reasonable efforts to reach agreement on such
Arbitrator or Panel. The Arbitrator or Panel shall act as an arbitrator to
resolve all points of disagreement and its decision shall be final and
binding upon all parties involved. Marathon and United States Steel shall
each take, or cause to be taken, any action necessary to implement the
decision of the Arbitrator or Panel. The fees and expenses relating to the
Arbitrator or Panel shall be borne equally by Marathon and United States
Steel unless the Arbitrator or Panel decides otherwise.
The Parties hereby agree to submit all Disputes to arbitration
under the terms hereof, and the arbitration shall be final, conclusive and
binding upon the parties, their successors and assigns. Unless otherwise
agreed by the Arbitrator or Arbitrators, the arbitration shall be conducted
in Pittsburgh, Pennsylvania, if the arbitration is commenced by Marathon,
or in Houston, Texas, if the arbitration is commenced by United States
Steel.
ARTICLE 12
MISCELLANEOUS
SECTION 12.01. Guarantee.
Marathon shall guarantee the obligations under this Agreement of
each other member of the Marathon Tax Group. United States Steel shall
guarantee the obligations under this Agreement of each other member of the
United States Steel Tax Group.
SECTION 12.02. Authorization.
Each of Marathon and United States Steel hereby represents and
warrants that (i) it has the power and authority to execute, deliver and
perform this Agreement, (ii) this Agreement has been duly authorized by all
necessary corporate action on the part of such party, (iii) this Agreement
constitutes a legal, valid and binding obligation of such party, and (iv)
the execution, delivery and performance of this Agreement by such party
does not contravene or conflict with any provision of law or of such
party's charter or bylaws or any agreement, instrument or order binding on
such party.
SECTION 12.03. Notices.
All notices, requests and other communications to any party
hereunder shall be in writing (including facsimile or similar writing) and
shall be given to:
If to Marathon, to:
Marathon Oil Corporation
5555 San Felipe Road
Houston, Texas 77056-2723
Attn: Chief Tax Officer
713-296-3989 (facsimile)
If to United States Steel, to:
United States Steel Corporation
600 Grant Street
Pittsburgh, PA 15219
Attn: Chief Tax Officer
412-433-5086 (facsimile)
or any other address or facsimile number as such party may hereafter
specify in writing for this purpose by written notice to the other parties
to this Agreement. Each such notice, request or other communication under
this section shall be deemed to have been duly given (i) on the date of
service if served personally on the party to whom notice is given, (ii) on
the day of transmission if sent via facsimile transmission to the facsimile
number given above; provided that, telephonic confirmation of receipt is
obtained promptly after completion of transmission, (iii) on the business
day after delivery to an overnight courier service or the express mail
service maintained by the United States Postal Service; provided that,
receipt of delivery has been confirmed, or (iv) on the fifth day after
mailing; provided that, receipt of delivery is confirmed, if mailed to the
party to whom notice is to be given, by first class mail, registered or
certified, postage prepaid, properly addressed and return-receipt
requested.
SECTION 12.04. Amendments; No Waivers.
(a) Any provision of this Agreement may be amended, supplemented,
or waived if, and only if, such amendment, supplement, or waiver is in
writing and signed by the parties.
(b) Notwithstanding any other section of this Agreement, no
failure or delay by any party in exercising any right, power or privilege
hereunder shall operate as a waiver thereof, nor shall any single or
partial exercise thereof preclude any other or further exercise thereof or
the exercise of any other right, power or privilege. The rights and
remedies provided in this Agreement shall be cumulative and not exclusive
of any rights or remedies provided by law.
SECTION 12.05. Damages.
The remedy for any failure or delay in satisfying the obligations
contained herein shall be limited to the actual damages suffered as a
result of such failure or delay, including interest as provided in Section
10.03 of this Agreement for any late payments.
SECTION 12.06. Expenses.
(a) Except as otherwise provided in this Agreement, each party
shall bear its own costs and expenses (including, without limitation,
attorneys' fees and other professional fees and expenses).
(b) Without limiting the generality of Section 12.06(a), each
party shall bear the costs and expenses in connection with the preparation
for or conduct of any Tax Proceeding that is not an audit (i) with respect
to Tax Items that are allocated to such party under this Agreement, and/or
(ii) with respect to which such party has an indemnification obligation
under Article 7 of this Agreement.
SECTION 12.07. Information for Shareholders.
United States Steel shall provide each USX Shareholder that
receives United States Steel stock pursuant to the Distribution with the
information necessary for such USX Shareholder to comply with the
requirements of Section 355 of the Code and the Treasury Regulations
thereunder with respect to any statements that such USX Shareholders must
file with their Tax Returns demonstrating the applicability of Section 355
of the Code to the Distribution.
SECTION 12.08. Successors and Assigns.
The provisions of this Agreement shall be binding upon and shall
inure to the benefit of the parties to this Agreement and their respective
successors (whether by merger, acquisition of assets or otherwise, and,
including, without limitation, any successor succeeding to the Tax
Attributes of a party under Section 381 of the Code) and assigns, to the
same extent as if such successor or assign had been an original party to
this Agreement; provided that, except as set forth in this Agreement, no
party may assign, delegate or otherwise transfer any of its rights or
obligations under this Agreement without the consent of each of the other
parties to this Agreement.
SECTION 12.09. Governing Law.
The application of this Agreement shall be construed in accordance
with and governed by the laws of the State of Delaware (regardless of the
laws that might otherwise govern under applicable principles of conflicts
law) as to all matters, including, without limitation, matters of validity,
construction, effect, performance, and remedies.
SECTION 12.10. Changes in Tax Law.
Any reference to a provision of the Code or a law of another
jurisdiction shall include a reference to any applicable successor
provision or law.
SECTION 12.11. Jurisdiction; Forum.
(a) By the execution and delivery of this Agreement, Marathon and
United States Steel submit, and agree to cause their respective affiliates
to submit, to the personal jurisdiction of any state or Federal court in
the State of Delaware in any suit or proceeding arising out of or relating
to this Agreement.
(b) The parties hereto agree that an appropriate and convenient,
nonexclusive forum for any disputes between any of the parties hereto or
their respective affiliates arising out of this Agreement shall be in any
state or Federal court in the State of Delaware.
SECTION 12.12. Counterparts; Effectiveness; No Third Party
Beneficiaries.
(a) This Agreement may be signed in any number of counterparts,
each of which shall be an original, with the same effect as if the
signatures thereto and hereto were upon the same instrument. This Agreement
shall become effective upon the consummation of the Distribution; provided
that, at or before such time, each party to this Agreement shall have
received a counterpart of this Agreement signed by the other party. The
parties to this Agreement do not intend that any of its provisions will, or
do, confer any rights, benefits, remedies, obligations or liabilities under
this Agreement upon any person other than (i) the parties to this
Agreement, (ii) other members of the Marathon Tax Group, and (iii) other
members of the United States Steel Tax Group, together in each case with
their respective successors and assigns.
(b) All rights and obligations arising under this Agreement shall
survive until they are fully effectuated or performed. Notwithstanding
anything in this Agreement to the contrary, this Agreement shall remain in
effect and its provisions shall survive for the full period of all
applicable statutes of limitation (giving effect to any extension, waiver
or mitigation thereof).
SECTION 12.13. Severability.
If any one or more of the provisions of this Agreement should be
held invalid, illegal or unenforceable in any respect, the validity,
legality and enforceability of the remaining provisions contained in this
Agreement shall not in any way be affected or impaired by such holding. The
parties shall endeavor in good faith negotiations to replace the invalid,
illegal or unenforceable provisions so that the replacement provisions will
be valid, legal and enforceable and will have an economic effect which
comes as close as possible to that of the invalid, illegal or unenforceable
provisions.
SECTION 12.14. Confidentiality.
Subject to any contrary requirement of law and the right of each
party to enforce its rights hereunder in any legal action, each party
agrees that it shall keep strictly confidential, and shall cause its
employees and agents to keep strictly confidential, any information which
it or any of its employees or agents may acquire pursuant to, or in the
course of performing its obligations under, any provision of this
Agreement.
SECTION 12.15. Interpretation.
The Section headings contained in this Agreement are solely for
the purpose of reference, are not part of the agreement of the parties, and
shall not in any way affect the meaning or interpretation of this
Agreement.
IN WITNESS WHEREOF, the parties to this Agreement have caused this
Tax Sharing Agreement to be duly executed by their respective authorized
officers as of the date first above written.
USX Corporation
By: /s/ K. L. Matheny
-------------------------
Name: K. L. Matheny
Title: Vice President -
Investor Relations
United States Steel LLC
By: /s/ G. R. Haggerty
---------------------------
Name: G. R. Haggerty
Title: Vice President -
Accounting & Finance
EXHIBIT 99.4
TRANSITION SERVICES AGREEMENT
THIS TRANSITION SERVICES AGREEMENT ("Agreement"), dated as of
December 31, 2001, by and between USX Corporation, a Delaware corporation,
to be renamed "Marathon Oil Corporation" ("USX"), and United States Steel
LLC, a Delaware limited liability company and wholly owned subsidiary of
USX, to be renamed "United States Steel Corporation" ("SteelCo").
W I T N E S S E T H:
WHEREAS, this Agreement is made pursuant to and as a condition of
the Agreement and Plan of Reorganization, dated as of July 31, 2001
("Separation Agreement"), by and between USX and SteelCo, pursuant to which
the respective businesses of the Marathon Group of USX and the U.S. Steel
Group of USX are being separated into two independent companies by merging
USX Merger Corporation, a Delaware corporation and a wholly owned
subsidiary of USX ("Merger Sub"), with and into USX, subject to the terms
and conditions thereof, and pursuant to Section 251 of the DGCL (the
"Separation Merger"), with USX continuing as the surviving corporation, so
that immediately following the Separation Effective Time, SteelCo shall own
and operate the business of the U.S. Steel Group and shall be wholly owned
by the holders of the then outstanding shares of USX-U.S. Steel Group
Common Stock, and the business of the Marathon Group shall be owned and
operated by USX, which shall be a separate and independent entity from
SteelCo and shall be wholly owned by the holders of the then outstanding
shares of USX-Marathon Group Common Stock (the "Separation");
WHEREAS, prior to the Separation, USX personnel at the Pittsburgh,
Pennsylvania corporate headquarters of USX have provided accounting, audit,
corporate finance, government affairs, investor relations, legal, stock
transfer, strategic planning, public affairs and tax services, and Marathon
Oil Company provided leasing services to USX (the "Corporate Services")
that primarily relate to corporate-wide matters and for which the costs are
allocated between the Marathon Group and the U.S. Steel Group;
WHEREAS, effective upon the Separation Effective Time, each of USX
and SteelCo will be responsible for its own needs in the area of Corporate
Services, and USX corporate personnel will be assigned to, and will be
employed by, either USX or SteelCo or their respective subsidiaries;
WHEREAS, in the event that USX or SteelCo is unable to service its
own needs with respect to any Corporate Services, the other company will
provide such Corporate Services to the other in accordance with the terms
hereof, if able to do so;
WHEREAS, USX headquarters has relied on employees of the U.S.
Steel Group and the Marathon Group for many of its computer applications
and information technology support (the "Computer Services"), and USX and
SteelCo shall continue providing Computer Services to USX headquarters or
the other party hereto on the terms and subject to the conditions contained
herein; and
WHEREAS, the parties further desire to address the status of
certain USX Corporate Employees that will provide temporary services to USX
after the Separation Effective Date.
NOW, THEREFORE, in furtherance of the foregoing and in
consideration of the mutual promises and undertakings contained herein and
in any other document executed in connection with this Agreement, the
parties agree as follows:
ARTICLE I
DEFINITIONS
Section 1.1 General. Unless otherwise defined herein,
capitalized terms used herein shall have their respective meanings as
defined in the Separation Agreement.
Section 1.2 Other Definitional Provisions.
(a) The words "hereof", "herein", "hereunder"
and words of similar import, when used in this Agreement, shall refer to
this Agreement as a whole and not to any particular provision of this
Agreement.
(b) The terms defined in the singular shall have
a comparable meaning when used in the plural, and vice versa.
(c) The terms "dollars" and "$" shall mean
United States dollars.
ARTICLE II
SERVICES TO BE PROVIDED
Section 2.1 Corporate Services and Costs. In the event
USX or SteelCo or their respective subsidiaries is unable to service its
needs in any of the Corporate Services, such party may request that the
other party provide such Corporate Services as are specified in a written
request, on the terms and subject to the conditions contained herein. The
party to whom the request for Corporate Services has been made shall
provide such Corporate Services on the conditions that (i) it determines
(in its sole discretion) that it is able to perform such Corporate
Services, (and it shall notify the requesting party within ten business
days of the date of the written request as to whether or not it is able to
perform such Corporate Services) and (ii) the party receiving such
Corporate Services agrees to reimburse the supplying party for all Costs
incurred in providing such Corporate Services. For purposes herein, "Costs"
shall mean all direct, fixed and variable, costs without allocation of
overhead. The party supplying Corporate Services shall provide such
Corporate Services on terms which are similar in nature, volume and scope
to those Corporate Services which were provided to the requesting party
immediately prior to the Separation Effective Time, unless otherwise
mutually agreed upon by the parties hereto.
Section 2.2 Computer Services and Costs. To the extent
that USX or SteelCo or their respective subsidiaries provides Computer
Services to USX headquarters or the other party hereto immediately prior to
the Separation, upon the written request of the recipient party to receive
such Computer Services on the terms and subject to the conditions contained
herein, such party supplying the Computer Services shall continue to
provide the Computer Services to the receiving party on the same basis that
such services were performed immediately prior to the Separation. The party
to whom the request for Computer Services has been made shall provide such
Computer Services on the conditions that (i) it determines (in its sole
discretion) that it is able to perform such Computer Services (and it shall
notify the requesting party within ten business days of the date of the
written request whether or not it is able to perform such Computer
Services), and (ii) the party receiving such Computer Services agrees to
reimburse the supplying party for all Costs incurred in providing such
Computer Services.
Section 2.3 Third-Party Services and Costs. In the event
any of the Corporate Services or Computer Services have heretofore been
provided by a third party, the sole obligation of USX or SteelCo, as the
case may be in supplying such Corporate Services or Computer Services under
this Agreement, shall be to continue to provide the other party access to
the services, as delivered to it by the third party, to the extent
practicable. In addition, each of USX and SteelCo reserves the right to
enter into new subcontract relationships in connection with any Corporate
Service or Computer Service provided hereunder. USX or SteelCo, as the case
may be, shall not otherwise be liable to the other party in any way with
respect to services provided by a third party. Any party receiving such
third party services shall reimburse the other party or pay the third party
directly for the cost of such services.
ARTICLE III
EMPLOYEE MATTERS
Section 3.1 Assignment of USX Corporate Personnel.
Effective on or before the Separation Effective Time and in accordance with
Section 8.2 of the Separation Agreement, USX Corporate Employees will be
assigned to, and will be employed by, either USX or SteelCo or their
respective subsidiaries on the basis of whether after the Separation
Effective Time they will perform services for USX or its subsidiaries or
SteelCo or its subsidiaries. USX Corporate Employees expected to perform
services for USX or its subsidiaries will be assigned to and employed by
USX or its subsidiaries; USX Corporate Employees expected to perform
services for SteelCo or its subsidiaries will be assigned to and employed
by SteelCo or its subsidiaries.
Section 3.2 Exception for Transition Employees. In the
event that a USX Corporate Employee is not expected to continue to perform
services for a period in excess of one (1) calendar year after the
Separation Effective Time for either SteelCo or USX or their respective
subsidiaries ("Transition Employee"), such Transition Employee will be
assigned to and employed by SteelCo for any period of time such Transition
Employee performs services for either SteelCo or USX or their respective
subsidiaries after the Separation Effective Time. USX Corporate Employees
subject to this exception shall be identified on a schedule and agreed to
by the parties prior to the Separation Effective Time. Services provided by
a Transition Employee shall be subject to the terms and conditions set
forth in this Agreement.
ARTICLE IV
RELEASE
Section 4.l USX's Agreement to Release. USX
unconditionally releases SteelCo and its directors, officers, employees,
Representatives, advisors, agents and Affiliates (collectively, the "U.S.
Steel Released Parties") from, against and in respect of any and all
Actions arising out of, relating to or resulting from, directly or
indirectly, the adequacy, timeliness or other quality of the Corporate
Services, Computer Services, or services from a Transition Employee
provided by or through SteelCo (other than as a direct result of the gross
negligence or willful misconduct of SteelCo).
Section 4.2 SteelCo's Agreement to Release. SteelCo
unconditionally releases USX and its directors, officers, employees,
Representatives, advisors, agents and Affiliates (collectively, the "USX
Released Parties") from, against and in respect of any and all Actions
arising out of, relating to or resulting from, directly or indirectly, the
adequacy, timeliness or other quality of the Corporate Services or Computer
Services provided by or through USX (other than as a direct result of the
gross negligence or willful misconduct of USX).
ARTICLE V
LICENSE
Section 5.1 Grant of License to SteelCo. USX grants to
SteelCo and its subsidiaries a fully paid, worldwide, nonexclusive license
for their internal use only and not as a service bureau, without the right
to sublicense or assign, in all computer programs, software, source code,
and know-how (whether patented, trademarked, copyrighted or not) owned or
licensed (to the extent permitted by the terms of such license) by USX or
its subsidiaries and utilized in providing Corporate Services and Computer
Services to SteelCo under the terms of this Agreement or to the U.S. Steel
Group immediately prior to the date hereof.
Section 5.2 Grant of License to USX. SteelCo grants to
USX and its subsidiaries a fully paid, worldwide, nonexclusive license for
their internal use only and not as a service bureau, without the right to
sublicense or assign, in all computer programs, software, source code, and
know-how (whether patented, trademarked, copyrighted or not) owned or
licensed (to the extent permitted by the terms of such license) by SteelCo
or its subsidiaries and utilized in providing Corporate Services and
Computer Services to USX under the terms of this Agreement or the Marathon
Group immediately prior to the date hereof.
Section 5.3 Disclaimer. With respect to the grant of
licenses in this Article V, no party makes any representation or warranty
whatsoever including, without limitation, suitability, ownership,
usefulness, non-infringement or existence.
ARTICLE VI
TERM AND AMENDMENT
Section 6.1 Term. The term of this Agreement shall
commence on the date set forth above and shall remain in force until the
first anniversary of the date hereof, unless earlier terminated by the
mutual agreement of the parties. Either party shall have the right to
terminate this Agreement in the event of a material breach by the other
party upon thirty (30) days' prior written notice, but only if such breach
is not cured prior to expiration of such thirty (30) day period. In
addition, the party requesting any Corporate Services, Computer Services,
or the services of a Transition Employee hereunder shall have the right to
terminate this Agreement with respect to any such Corporate Service,
Computer Service, or service from a Transition Employee by providing the
supplying party with thirty (30) days prior written notice of termination.
Section 6.2 Amendment. This Agreement may be amended,
modified or supplemented at any time and shall be evidenced by a written
agreement signed by all of the parties hereto.
ARTICLE VII
BILLING AND PAYMENT
Section 7.1 Timing and Payments. On or before the 20th
day of each month, the party supplying any Corporate Services, Computer
Services, or services from a Transition Employee hereunder (collectively,
the "Services") shall invoice the receiving party for all costs incurred in
providing Services including third party invoices received, in the
preceding calendar month. Within thirty (30) days of the date of each
invoice relating to Services provided hereunder, the receiving party shall
pay the supplying party the amount due by check or wire transfer. All
amounts not paid within such thirty (30) days shall bear interest at the
rate of twelve percent (12%) per annum (the "Interest Rate"). Interest
shall be due on any amount which the receiving party is otherwise disputing
if such charge is ultimately determined to be applicable, but no interest
shall apply as to any disputed amounts ultimately determined in the
receiving party's favor.
Section 7.2 Additional Information. If either party
believes that there has been an error in an amount invoiced or paid or the
timing of any payment hereunder, then such party shall notify the other
party of such alleged error and shall provide written evidence of the error
as is available at the time of such notice. Each party shall provide the
other with sufficient records relating to the matter so as to permit the
parties to attempt to resolve the inconsistency. Following the
determination of whether an error occurred, any improper charge or invoice,
overpayment or underpayment found shall be remedied, with interest at the
Interest Rate in case of an overpayment or underpayment by the party that
benefited from such error. Notwithstanding the foregoing, neither party may
question the accuracy, correctness, timing or amount of any payment under
this Agreement unless it notifies the other party of its disagreement
within the ninety (90) days immediately following the date such payment was
due. Upon request of the receiving party, the supplying party shall provide
commercially reasonable support for all charges and expenses invoiced.
ARTICLE VIII
GENERAL PROVISIONS
Section 8.1 Dispute Resolution. Any dispute between the
parties shall be subject to the Dispute Resolution procedure set forth in
Section 15.2 of the Separation Agreement.
Section 8.2 Expenses. Unless otherwise provided herein,
all out-of-pocket costs and expenses with respect to the transactions
contemplated in this Agreement shall be borne by the party incurring such
costs and expenses.
Section 8.3 Records. Each party shall have access to all
records, documents and other information in the possession of the other
party relating to activities prior to the Separation and such records shall
be subject to the confidentiality provisions of Section 11.4 of the
Separation Agreement. Upon the request of the party seeking such access,
the other party shall make any such records, documents and other
information available or make copies for the requesting party without
charge.
Section 8.4 Governing Law. This Agreement shall be
governed by, and construed in accordance with, the laws of Delaware,
without reference to choice of law principles, including matters of
construction, validity and performance.
Section 8.5 Notices. Notices, requests, permissions,
waivers, referrals and all other communications hereunder shall be in
writing and shall be deemed to have been duly given if signed by the
respective persons giving them (in the case of any corporation or limited
liability company, the signature shall be by an officer thereof) and
delivered by hand or by telecopy or on the date of receipt indicated on the
return receipt if mailed (registered or certified, return receipt
requested, properly addressed and postage prepaid).
If to SteelCo, to:
United States Steel LLC
600 Grant Street
Suite 6100
Pittsburgh, PA 15219-4776
Attention: General Counsel
Facsimile: 412-433-1131
If to USX, to:
Marathon Oil Corporation
5555 San Felipe Road
Houston, TX 77056-2723
Attention: General Counsel
Facsimile: 713-296-4375
Such names and addresses may be changed by notice given in accordance with
this Section 8.5. Copies of all notices, requests, permissions, waivers,
referrals and all other communications hereunder given prior to the
Separation Effective Time shall be given to:
Skadden, Arps, Slate, Meagher & Flom LLP
4 Times Square
New York, NY 10036-6522
Attention: Roger S. Aaron, Esquire
Facsimile: (212) 735-2000
Section 8.6 Third-Party Beneficiaries. Nothing in this
Agreement shall confer any rights upon any Person or entity other than the
parties hereto and their respective heirs, successors and permitted
assigns.
Section 8.7 Entire Agreement. This Agreement contains the
entire understanding of the parties hereto with respect to the subject
matter contained herein, and supersedes and cancels all prior agreements,
negotiations, correspondence, undertakings and communications of the
parties, oral or written, respecting such subject matter.
Section 8.8 Headings. The article, section and paragraph
headings contained in this Agreement are for reference purposes only and
shall not affect in any way the meaning or interpretation of this
Agreement. All references herein to "Articles" or "Sections" shall be
deemed to be references to Articles or Sections hereof unless otherwise
indicated.
Section 8.9 Counterparts. This Agreement may be executed
in one or more counterparts and each counterpart shall be deemed to be an
original, but all of which shall constitute one and the same original.
Section 8.10 Parties in Interest; Assignment; Successors.
Neither this Agreement nor any of the rights, interests or obligations
hereunder shall be assigned by any of the parties hereto without the prior
written consent of the other party. Subject to the preceding sentence, this
Agreement shall inure to the benefit of and be binding upon SteelCo and USX
and their respective successors and permitted assigns. Nothing in this
Agreement, express or implied, is intended to confer upon any other Person
any rights or remedies under or by reason of this Agreement.
Section 8.11 Severability; Enforcement. The invalidity of
any portion hereof shall not affect the validity, force or effect of the
remaining portions hereof. If it is ever held that any restriction
hereunder is too broad to permit enforcement of such restriction to its
fullest extent, each party agrees that a court of competent jurisdiction
may enforce such restriction to the maximum extent permitted by law, and
each party hereby consents and agrees that such scope may be judicially
modified accordingly in any proceeding brought to enforce such restriction.
Section 8.12 Remedies. The parties agree that money
damages or other remedy at law would not be a sufficient or adequate remedy
for any breach or violation of, or a default under, this Agreement by them
and that in addition to all other remedies available to them, each of them
shall be entitled to the fullest extent permitted by law to an injunction
restraining such breach, violation or default or threatened breach,
violation or default and to any other equitable relief, including specific
performance, without bond or other security being required.
IN WITNESS WHEREOF, each of the parties has caused this Agreement
to be duly executed on its behalf by its officers thereunto duly
authorized, all as of the day and year first above written.
USX CORPORATION
By: /s/ K. L. Matheny
------------------------------
Name: K. L. Matheny
Title: Vice President - Investor
Relations
UNITED STATES STEEL LLC
By: /s/ G. R. Haggerty
-------------------------------
Name: G. R. Haggerty
Title: Vice President -
Accounting & Finance
EXHIBIT 99.5
FINANCIAL MATTERS AGREEMENT
This Financial Matters Agreement is entered into as of this 31st
day of December, 2001 by and between USX Corporation, a Delaware
corporation ("Parent") and United States Steel LLC, a Delaware limited
liability company ("Steel").
WITNESSETH
WHEREAS, Steel is a wholly owned subsidiary of Parent; and
WHEREAS, Parent, Steel and another corporation named USX
Corporation ("Old USX") were parties to a Holding Company Reorganization
Agreement dated as of July 1, 2001 (the "Reorganization Agreement"); and
WHEREAS, the Reorganization Agreement was entered into to better
align the assets and liabilities of Old USX with its two classes of common
stock, namely USX--Marathon Group Common Stock and USX--U.S. Steel Group
Common Stock; and
WHEREAS, in connection with the Reorganization Agreement, Parent
assumed certain obligations of Old USX and Steel became liable for all
other obligations of Old USX as was required by the terms of such
obligations; and
WHEREAS, to induce General Electric Credit Corporation of Delaware
("GECC") and Southern Energy Clairton, L.L.C ("SECL") to enter into
Amendment Number 1 to the Amended and Restated Limited Partnership
Agreement entered into and effective as of June 1, 1997 by and among Steel,
GECC and SECL, Parent delivered to GECC and SECL, a guarantee dated July 2,
2001 of Steel's obligations under the aforesaid Partnership Agreement and
certain related instruments and agreements (the "1314B Guarantee"); and
WHEREAS, to induce certain counterparties not to declare a "credit
event upon merger" under certain ISDA swap agreements, Parent executed and
delivered to various counterparties guarantees of the obligations of Steel
under the aforesaid ISDA swap agreements (the "Swap Guarantees"); and
WHEREAS, Parent and Steel are also parties to an Agreement and
Plan of Reorganization dated as of July 31, 2001 (the "Separation
Agreement"), pursuant to which, and subject to the terms and conditions set
forth therein, all of the shares of USX--U.S. Steel Group common stock will
be converted into shares of common stock of United States Steel
Corporation; and
WHEREAS, Parent and Steel have identified certain obligations of
Parent that are closely related to the business of Steel; and
WHEREAS, In light of these relationships and in furtherment of the
purpose of the Reorganization Agreement and the Separation Agreement Parent
and Steel have agreed that Parent will assign these obligations to Steel
and that Steel will assume and discharge these obligations; and
WHEREAS, Parent and Steel wish to establish how certain other debt
obligations and financial matters shall be arranged. NOW,
THEREFORE, in consideration of the premises, the mutual covenants
contained herein and intending to be legally bound hereby, the parties
hereto agree as follows:
Article I
Industrial Revenue Bonds
1.1 Assumption of Industrial Revenue Bond Obligations. Parent is
the obligor on $479,490,000 of obligations pursuant to agreements with
respect to an equal principal amount of tax exempt environmental revenue
bonds issued by various governmental issuers all of which are more
particularly described on Schedule 1.1 attached hereto (collectively, the
"Industrial Revenue Bonds").
(a) For a term beginning on the date hereof and ending on the
earlier of the tenth anniversary of the Separation Effective
Time (as defined in the Separation Agreement) or December
31, 2040, Parent hereby assigns to Steel and Steel assumes
all of Parent's rights and obligations with respect to the
Industrial Revenue Bonds including, without limitation, the
obligation to pay debt service on the Industrial Revenue
Bonds. The term "debt service" is meant to include all sums
due with respect to the Industrial Revenue Bonds including,
without limitation, payments of principal, interest and
premium, letter of credit fees and expenses (incurred by
either Parent or Steel or both), trustee fees and expenses,
issuer fees and expenses and remarketing fees and expenses.
(b) During the term of this Agreement, Steel shall provide all
notices and take such other actions as may be necessary or
appropriate in connection with ongoing obligations related
to the Industrial Revenue Bonds.
Steel's obligations with respect to the Industrial Revenue Bonds
shall include payment of amounts due upon any defaults or acceleration of
any of the obligations with respect to the Industrial Revenue Bonds other
than defaults caused by Parent.
1.2 Rights of Steel. During the term of this Agreement, Steel
shall have the right to exercise all of the existing contractual rights of
Parent concerning the Industrial Revenue Bonds including all rights to the
selection of interest rates, making prepayments or granting or releasing
security interests and Parent shall use commercially reasonable efforts to
assist Steel in its exercise of such rights. Notwithstanding the foregoing,
Steel shall have no right to increase the principal amount or to change the
maturity of any of the Industrial Revenue Bonds without the prior written
consent of Parent except as set forth in Section 1.4(b).
1.3 Variable Rate Industrial Revenue Bonds. The Industrial Revenue
Bonds that are designated on Schedule 1.1 as variable rate environmental
revenue bonds are referred to as the "Variable Rate Bonds." During the term
of this Agreement Steel may from time to time direct conversion of the
Variable Rate Bonds to different interest rate periods, and Parent shall
undertake all reasonable efforts to effectuate each such conversion. Parent
will not, without the prior written consent of Steel, convert any of the
Variable Rate Bonds to a different interest rate. Notwithstanding anything
in this Agreement to the contrary, Steel's ability to direct conversion of
the Variable Rate Bonds to a different interest rate period and maintain a
given interest rate period shall be subject to Parent's ability to maintain
appropriate letters of credit respecting the Variable Rate Bonds. Parent
shall undertake commercially reasonable efforts to obtain and maintain
letters of credit and/or such other liquidity facilities (each, a
"Liquidity Facility") as may be permitted by the applicable Bond Documents
(hereinafter defined). If Parent's ability to obtain and maintain Liquidity
Facilities is reduced so that Parent's business is adversely affected in a
material way, Parent may, following timely written notice to Steel, decline
to renew one or more Liquidity Facilities with respect to one or more
issues of Variable Rate Bonds. Concurrently with said notice Parent shall
supply an opinion of an independent third party regarding the availability
of Liquidity Facilities to Parent. Steel may at any time provide substitute
Liquidity Facilities applicable to one or more issues of the Variable Rate
Bonds.
1.4 Refinancing
(a) If Steel notifies Parent in writing that Steel elects
to redeem all or part of any of the Industrial Revenue Bonds and
supplies adequate funds therefor, Parent shall reasonably assist
Steel to effectuate such redemption(s) and Steel's obligations
under this Agreement shall be reduced accordingly. Parent shall
not, without the prior written consent of Steel, direct the
redemption of any Industrial Revenue Bonds prior to maturity.
(b) If Steel elects to refinance all or part of any of
the Industrial Revenue Bonds through a tax-exempt refunding or
otherwise, Parent shall take all such reasonable action as may be
necessary or appropriate to reasonably assist Steel in completing
the transactions contemplated by each such refinancing, so long as
after the completion of such transactions, Parent does not have
any obligations with respect to any new debt issued as a result.
Steel agrees to undertake commercially reasonable efforts to
effect such refinancings before the end of the term described in
Section 1.5 hereof.
1.5 Release by Parent at end of Term. On the earlier of the tenth
anniversary of the Separation Effective Time (as defined in the Separation
Agreement) or December 31, 2040 Steel shall pay to Parent an amount equal
to the principal amount of, all accrued and unpaid debt service then
outstanding on, and any premium required to immediately retire each
Industrial Revenue Bond. Upon such payment Parent shall retire all the then
outstanding Industrial Revenue Bonds.
Article II
Leases
2.1 Assumption of Capital and Other Leases. Parent hereby assigns
to Steel and Steel assumes all rights and obligations of Parent relating to
the leases listed in Schedule 2.1 attached hereto (the "Assumed Leases")
including without limitation, the obligation to pay all sums due under the
Assumed Leases. Steel's obligations with respect to the Assumed Leases
shall include payment of amounts due upon any defaults or acceleration of
any of the obligations with respect to the Assumed Leases other than
defaults caused by Parent.
2.2 Contingent Nature of Certain Leases. Certain of the Assumed
Leases, as designated in Schedule 2.1, were previously assigned to and
assumed by third parties in agreements between such third parties and Old
USX (the "Previously Assigned Leases"). Steel assumes and shall discharge
all obligations of Old USX relating to the Previously Assigned Leases.
2.3 Rights of Steel. Steel shall have the right to exercise all of
the existing contractual rights of Parent concerning the Assumed Leases
including all rights relating to purchase options, prepayments or granting
or releasing security interests, and Parent shall use commercially
reasonable efforts to assist Steel in its exercise of such rights.
Notwithstanding the foregoing Steel shall have no right to increase the
amounts due under or lengthen the term of any of the Assumed Leases without
the prior consent of Parent other than extensions set forth in the terms of
any of the Assumed Leases.
2.4 Rights of Parent. Steel shall notify Parent of its decision
whether to exercise any purchase option under the Assumed Leases and if
Steel elects not to so exercise Parent shall have the right but not the
obligation to do so. Parent agrees to use commercially reasonable efforts
to comply with all provisions of the Assumed Leases and shall not take any
action that would result in a default thereunder.
2.5 Assignment of Leases. Steel shall have the right to assign any
of its rights and obligations under the Assumed Leases to any party
provided that such assignment shall not release Steel from any of its
obligations to Parent relative to such Assumed Leases.
Article III
Obligations of Each Party
3.1 Obligations of Parent. In connection with the Reorganization
Agreement Parent assumed certain obligations of Old USX as listed in
Schedule 3.1 hereof (the "Parent Obligations"). Parent acknowledges that it
is solely responsible for all obligations including debt service under the
Parent Obligations.
3.2 Contingent Obligations of Steel. Steel remains contingently
liable for certain of the Parent Obligations as set forth on Schedule 3.1.
Parent agrees that it will use commercially reasonable efforts to cause
Steel to be released from such contingent liability and shall not increase
the amounts due under such obligations (other than amounts due under
revolving credit facilities that do not exceed the amounts outstanding plus
the existing commitments) or extend the terms thereof without the prior
written consent of Steel other than extensions set forth in the terms of
any of the Parent Obligations.
3.3 Contingent Obligations of Parent. Parent remains contingently
liable under the 1314B Guarantee and the Swap Guarantees. Steel agrees that
it will use commercially reasonable efforts to cause Parent to be released
from the 1314B Guarantee and each Swap Guarantee and shall not increase the
amounts of the obligations guaranteed under the Swap Guarantees without the
prior written consent of Parent. Steel further agrees to use commercially
reasonable efforts to avoid causing the amount for which Parent may be
liable under the 1314B Guarantee to be increased without the Parent's prior
written consent (such consent not to be unreasonably withheld).
Article IV
Mutual Obligations
4.1 Maintenance of Current Conditions.
(a) Each of Steel and Parent agrees to employ all
commercially reasonable efforts to take all necessary action or
refrain from acting so as to assure compliance, and to cooperate
with the other party in its endeavors to comply, with all
obligations under the various documents that were executed and
delivered in connection with the Assumed Leases and the Parent
Obligations including, without limitation, covenants respecting
the financed facilities, in each case, necessary to avoid the
occurrence of a default, acceleration, casualty loss or other
termination under any of the Assumed Leases and the Parent
Obligations.
(b) Each of Steel and Parent agrees to employ all
commercially reasonable efforts to take all necessary action or
refrain from acting so as to assure compliance, and to cooperate
with the other party in its endeavors to comply, with Parent's
obligations under the various documents that were executed and
delivered in connection with the issuance of the Industrial
Revenue Bonds (collectively, the "Bond Documents") including,
without limitation, covenants respecting the financed facilities,
in each case, necessary to avoid the occurrence of an Event of
Default under the Bond Documents or cause the interest on the
Industrial Revenue Bonds to be included in the gross income of the
holders thereof except holders who are "substantial users" or
"related persons" as defined in Section 147(a) of the Internal
Revenue Code of 1986, as amended or its predecessor.
4.2 Relationship of Parties.
(a) This Agreement is a general unsecured obligation of
each of Parent and Steel (i.e., it ranks equal to accounts payable
and other general unsecured obligations of each party). This
Agreement does not contain any financial covenants and Parent and
Steel remain free to incur additional debt, grant mortgages or
security interests in its property and sell or transfer assets
without the consent of the other. Parent acknowledges that Steel
has granted or anticipates granting security interests in its
accounts receivable and inventory.
(b) This Agreement is a contract between the parties. It
does not grant any rights to the holders of the Industrial Revenue
Bonds or the other parties to the Assumed Leases or the Parent
Obligations or the beneficiaries of the 1314B Guarantee and the
Swap Guarantees. Among other things the parties may agree to amend
or modify this Agreement as they mutually agree and nothing herein
creates or is intended to create any obligation to redeem or
repurchase any of these instruments.
4.3 Events of Default.
(a) The following shall be "Events of Default" under this
Agreement:
(i) (A) Steel shall fail to make any payment under
any Bond Document or Assumed Lease when due; (B)
Parent shall fail to make any payment under any
Parent Obligation when due and such failure
causes a default under the applicable Parent
Obligation;
(ii) Either party shall fail to comply with any other
covenant contained in this Agreement (including, without
limitation, covenants to comply with covenants under the Bond
Documents, the Assumed Leases and the Parent Obligations) and such
failure shall continue for more than thirty (30) days after such
party becomes aware of it, provided that under the Bond Documents,
Assumed Leases and Parent Obligations such period shall be
extended to the extent (but only to the extent) it does not
precipitate an event of default under the applicable Bond
Documents, Assumed Leases or Parent Obligations;
(iii) Either party shall make a general assignment for
the benefit of creditors, or files or has filed a petition in
bankruptcy, or a petition or answer seeking a readjustment of its
indebtedness under the United States Bankruptcy Code or any
similar law or code, or consents to the appointment of a receiver
or trustee of it or for a substantial part of its properties; or
(iv) Either party shall be adjudged bankrupt or
insolvent, or a petition or proceedings for bankruptcy shall be
filed against it, and such party shall admit the material
allegations thereof, or an order, judgment, or decree shall be
made approving such a petition, and such order, judgment or decree
shall not be vacated or stayed within sixty (60) days of its
entry, or a custodian, receiver or trustee shall be appointed for
either party or a substantial part of its properties and remain in
possession thereof for sixty (60) days.
(b) Upon the occurrence of an Event of Default pursuant
to subparagraphs (iii) or (iv) of Section 4.3(a), all sums then or
thereafter due hereunder (including, without limitation, the
amounts that may become due under Section 1.4 hereof) shall become
immediately due and payable. Upon the occurrence of any one or
more of the other Events of Default, all sums then or hereafter
due hereunder shall, at the non-defaulting party's option,
immediately become due and payable. Overdue amounts shall bear
interest at a rate of interest equal to that announced from time
to time by J. P. Morgan Chase & Co. (or its successor) as its
"prime rate" plus two percent per annum.
4.4 Indemnification.
(a) Steel agrees to indemnify and hold harmless Parent as
well as all shareholders, directors, officers, employees,
subsidiaries and agents of Parent (collectively, "Indemnified
Persons") against any and all direct or indirect liability
(whether absolute, accrued or unaccrued, contingent, liquidated or
unliquidated, matured or unmatured or known or unknown),
indebtedness, obligation, expense, claim, deficiency, guarantee or
endorsement of or by any such Indemnified Person (including,
without limitation, those arising under any law, regulation,
ordinance, or award of any court, tribunal or arbitrator of any
kind) together with all reasonable attorney's fees and other costs
and expenses ("Liability") arising from, relating to or incurred
in connection with the Industrial Revenue Bonds, the Assumed
Leases, the 1314B Guarantee or the Swap Guarantees.
(b) Parent agrees to indemnify and hold harmless Steel as
well as all Indemnified Persons of Steel against any and all
Liability arising from, relating to or incurred in connection with
the Parent Obligations.
Article V
General Provisions
5.1 Governing Law. This Agreement shall be governed by, and
construed in accordance with, the laws of Delaware, without reference to
choice of law principles, including matters of construction, validity and
performance.
5.2 Notices. All notices shall be sent in accordance with the
Reorganization Agreement.
5.3 Third Party Beneficiaries. Nothing in this Agreement shall
confer any rights upon any Person or entity other than the parties hereto
and their respective heirs, successors and permitted assigns. Without
limiting the foregoing the inclusion of any matter within the defined terms
Industrial Revenue Bonds, Assumed Leases or Parent Obligations is merely
for purposes of allocating responsibility for such matter as between the
parties hereto and such inclusion does not and is not intended to
acknowledge legal enforceability or waive any defenses.
5.4. Entire Agreement. This Agreement, contains the entire
understanding of the parties hereto and thereto with respect to the subject
matter contained herein and therein, and supersedes and cancels all prior
agreements, negotiations, correspondence, undertakings and communications
of the parties, oral or written, respecting such subject matter.
5.5. Headings. The article, section and paragraph headings
contained in this Agreement are for reference purposes only and shall not
affect in any way the meaning or interpretation of this Agreement.
5.6. Counterparts. This Agreement may be executed in one or more
counterparts and each counterpart shall be deemed to be an original, but
all of which shall constitute one and the same original.
5.7. Parties in Interest; Assignment; Successors. Except as set
forth herein, neither this Agreement nor any of the rights, interests or
obligations hereunder shall be assigned by any of the parties hereto
without the prior written consent of the other parties. Subject to the
preceding sentence, this Agreement shall inure to the benefit of and be
binding upon Steel and Parent and their respective successors and permitted
assigns.
5.8. Severability; Enforcement. The invalidity of any portion
hereof shall not affect the validity, force or effect of the remaining
portions hereof. If it is ever held that any restriction hereunder is too
broad to permit enforcement of such restriction to its fullest extent, each
party agrees that a court of competent jurisdiction may enforce such
restriction to the maximum extent permitted by law, and each party hereby
consents and agrees that such scope may be judicially modified accordingly
in any proceeding brought to enforce such restriction. Each party hereby
consents to the exclusive jurisdiction of the Court of Chancery of the
State of Delaware or the United States District Court for the District of
Delaware to resolve any disputes under this agreement and all parties waive
any and all defenses that they may have to challenge the jurisdiction or
venue of such courts.
In witness whereof this Agreement is entered into as of the day
first written above.
USX CORPORATION
By: /s/ K. L. Matheny
------------------------------
Vice President - Investor Relations
UNITED STATES STEEL LLC
By: /s/ G. R. Haggerty
--------------------
Vice President - Accounting
& Finance
EXHIBIT 99.6
INSURANCE ASSISTANCE AGREEMENT
THIS INSURANCE ASSISTANCE AGREEMENT, dated as of December 31, 2001
("Agreement"), by and between USX Corporation, a Delaware corporation, to
be renamed "Marathon Oil Corporation" ("USX"), and United States Steel LLC,
a Delaware limited liability company and wholly owned subsidiary of USX, to
be renamed "United States Steel Corporation" ("SteelCo").
W I T N E S S E T H:
WHEREAS, this Agreement is made pursuant to and as a condition of
the Agreement and Plan of Reorganization, dated as of July 31, 2001
("Separation Agreement"), by and between USX and SteelCo, pursuant to which
the respective businesses of the Marathon Group of USX and the U.S. Steel
Group of USX are being separated into two independent companies by merging
USX Merger Corporation, a Delaware corporation and a wholly owned
subsidiary of USX ("Merger Sub"), with and into USX, subject to the terms
and conditions thereof, and pursuant to Section 251 of the DGCL (the
"Separation Merger"), with USX continuing as the surviving corporation, so
that immediately following the Separation Effective Time, SteelCo shall own
and operate the business of the U.S. Steel Group and shall be wholly owned
by the holders of the then outstanding shares of USX-U.S. Steel Group
Common Stock , and the business of the Marathon Group shall be owned and
operated by USX, which shall be a separate and independent entity from
SteelCo and shall be wholly owned by the holders of the then outstanding
shares of USX- Marathon Group Common Stock (the "Separation");
WHEREAS, prior to the date hereof, USX implemented a holding
company structure by merging the then existing USX Corporation, a Delaware
corporation ("Old USX"), with and into SteelCo, with SteelCo continuing as
the surviving entity and a wholly owned subsidiary of USX (the "HoldCo
Merger"), so that immediately following the effective time of the HoldCo
Merger, USX became a holding company that owns all of the outstanding
equity of Marathon Oil Company ("Marathon") (which owns and operates the
business of the Marathon Group) and of SteelCo (which owns and operates the
business of the U. S. Steel Group);
WHEREAS, prior to the time of the HoldCo Merger, the Marathon
Group and the U.S. Steel Group maintained independent property and business
interruption insurance policies. Other types of insurance, such as general
liability, employer's liability, aircraft liability, automobile liability,
workers' compensation and executive risk, were purchased and held by Old
USX, for the benefit of Old USX and all of its Subsidiaries;
WHEREAS, following the HoldCo Merger, separate policies of
insurance for certain general liability, employer's liability, automobile
liability, workers' compensation, boiler and machinery, and aircraft seat
accident were issued to cover (i) USX, Marathon and its Subsidiaries, on
the one hand, and (ii) SteelCo and it Subsidiaries, on the other hand. The
remaining policies of insurance held by Old USX were maintained for the
benefit of USX and its Subsidiaries; and
WHEREAS, the parties desire to enter into this Agreement to set
forth the parties' understanding with respect to their respective
responsibilities and rights with respect to various insurance policies and
claims associated therewith, both prior to and after the Separation.
NOW, THEREFORE, in furtherance of the foregoing and in
consideration of the mutual promises and undertakings contained herein and
in any other document executed in connection with this Agreement, the
parties agree as follows:
ARTICLE I
DEFINITIONS
Section 1.1 General. Unless otherwise defined herein,
capitalized terms used herein shall have their respective meanings as
defined in the Separation Agreement.
Section 1.2 Other Definitional Provisions.
(a) The words "hereof", "herein", "hereunder" and words
of similar import, when used in this Agreement, shall refer to this
Agreement as a whole and not to any particular provision of this Agreement.
(b) The terms defined in the singular shall have a
comparable meaning when used in the plural, and vice versa.
(c) The terms "dollars" and "$" shall mean United States
dollars.
ARTICLE II
PRE-SEPARATION INSURANCE
Section 2.1 Insurance for Pre-HoldCo Merger Periods.
Prior to the effective time of the HoldCo Merger, USX purchased certain
policies of insurance to cover USX and its Subsidiaries, which included,
without limitation, workers compensation and general liability fronting
insurance. (The workers compensation and general liability fronting
insurance are collectively referred to herein as the "Fronting Insurance").
From and after the effective time of the HoldCo Merger, the rights,
liability and responsibility for insurance claims, retroactive
reimbursements, uninsured retentions, and deductibles under the Fronting
Insurance shall be as follows.
(a) USX shall have all rights in and to all claims, and
shall be solely liable for the payment of any retroactive reimbursements,
uninsured retentions and deductibles relating to the Fronting Insurance
arising out of or relating to events or conditions occurring prior to the
effective time of the HoldCo Merger and associated exclusively with the
business of the Marathon Group.
(b) SteelCo shall have all rights in and to all claims,
and shall be solely liable for the payment of any retroactive
reimbursements, uninsured retentions and deductibles, relating to the
Fronting Insurance arising out of or relating to events or conditions
occurring prior to the effective time of the HoldCo Merger and associated
exclusively with the business of the U.S. Steel Group.
(c) USX shall be entitled to 65%, and SteelCo shall be
entitled to 35%, of all rights in and to all claims, and shall be liable
for the payment of any retroactive reimbursements, uninsured retentions and
deductibles on this same percentage basis, relating to the Fronting
Insurance arising out of or relating to events or conditions occurring
prior to the effective time of the HoldCo Merger and not related
exclusively to either Group, including however, without limitation,
pre-HoldCo Merger claims associated with Old USX's corporate assets,
directors, officers and employees.
(d) Policy limits under each of the Fronting Insurance
associated with claims arising out of or relating to events or conditions
occurring prior to the effective time of the HoldCo Merger shall be applied
on a first-come, first-served basis. Neither party shall be liable to the
other in the event policy limits under any of the Fronting Insurance has
been exhausted. USX and SteelCo shall not take any action that would
prejudice the access of the other to coverage under the Fronting Insurance.
Section 2.2 Insurance for Pre-Separation Periods. Prior
to the Separation Effective Time, USX purchased certain policies of
insurance to cover USX and its Subsidiaries, which included Aircraft
Liability, Blanket Lost Instruments Bond, Executive Risk - Blended
(Directors and Officers, Fiduciary, Crime, EPL), Excess Directors and
Officers, Excess General Liability, Transfer Agents Mail Policy, and
Special Insurance ("Joint Insurance Arrangements"). From and after the
Separation Effective Time, the rights, liability and responsibility for
insurance claims, uninsured retentions and deductibles under the Joint
Insurance Arrangements shall be as follows.
(a) USX shall have all rights in and to all claims, and
shall be solely liable for the payment of any uninsured retentions and
deductibles, relating to the Joint Insurance Arrangements arising out of or
relating to events or conditions occurring prior to the Separation
Effective Time and associated exclusively with the business of the Marathon
Group.
(b) SteelCo shall have all rights in and to all claims,
and shall be solely liable for the payment of any uninsured retentions and
deductibles, relating to the Joint Insurance Arrangements arising out of or
relating to events or conditions occurring prior to the Separation
Effective Time and associated exclusively with the business of the U.S.
Steel Group.
(c) USX shall be entitled to 65%, and SteelCo shall be
entitled to 35%, of all rights in and to all claims, and shall be liable
for the payment of any uninsured retentions and deductibles on this same
percentage basis, relating to the Joint Insurance Arrangements arising out
of or relating to events or conditions occurring prior to the Separation
Effective Time and not related exclusively to either Group, including
however, without limitation, pre-Separation claims associated with Old
USX's or USX's corporate assets, directors, officers and employees.
(d) Policy limits under each of the Joint Insurance
Arrangements associated with claims arising out of or relating to events or
conditions occurring prior to the Separation Effective Time shall be
applied on a first-come, first-served basis. Neither party shall be liable
to the other in the event policy limits under any of the Joint Insurance
Arrangements has been exhausted. USX and SteelCo shall not take any action
that would prejudice the access of the other to coverage under the Joint
Insurance Arrangements.
ARTICLE III
POST-SEPARATION INSURANCE
Section 3.1 Purchase of Insurance Policies. Effective as
of the Separation Effective Time, USX and SteelCo shall each purchase
separate policies of insurance to cover the risks covered by the Joint
Insurance Arrangements.
Section 3.2 Extended Reporting Insurance.
(a) At the option of USX or SteelCo, any such party may
purchase extended reporting insurance for any or all of the Joint Insurance
Arrangements to cover pre-Separation claims. In the event that both parties
elect to purchase the same extended reporting insurance, the cost of such
insurance associated to the pre-Separation periods will be split between
USX and SteelCo on a 65% - 35% basis, respectively.
(b) Policy limits under each of the extended reporting
insurance associated with pre-Separation periods shall be applied on a
first-come, first-served basis. Neither party shall be liable to the other
in the event policy limits under any extended reporting insurance has been
exhausted. With respect to the purchase of extended reporting insurance,
USX and SteelCo shall not take any action that would prejudice the access
of the other to such coverage.
ARTICLE IV
TERM AND AMENDMENT
Section 4.1 Term. The term of this Agreement shall
commence on the date set forth above and shall terminate upon the mutual
agreement of the parties hereto.
Section 4.2 Amendment. This Agreement may be amended,
modified or supplemented at any time and shall be evidenced by a written
agreement signed by all of the parties hereto.
ARTICLE V
GENERAL PROVISIONS
Section 5.1 Dispute Resolution. Any dispute between the
parties shall be subject to the Dispute Resolution procedure set forth in
Section 15.2 of the Separation Agreement.
Section 5.2 Indemnification. Any claim by a party for
indemnification from the other party shall be subject to the
Indemnification provisions set forth in Article XIII of the Separation
Agreement.
Section 5.3 Expenses. Unless otherwise provided herein,
all out-of-pocket costs and expenses with respect to the transactions
contemplated in this Agreement shall be borne by the party incurring such
costs and expenses.
Section 5.4 Records. Each party shall have access to all
records, documents and other information in the possession of the other
party relating to activities prior to the Separation and such records shall
be subject to the confidentiality provisions of Section 11.4 of the
Separation Agreement. Upon the request of the party seeking such access,
the other party shall make any such records, documents and other
information available or make copies for the requesting party without
charge.
Section 5.5 Governing Law. This Agreement shall be
governed by, and construed in accordance with, the laws of Delaware,
without reference to choice of law principles, including matters of
construction, validity and performance.
Section 5.6 Notices. Notices, requests, permissions,
waivers, referrals and all other communications hereunder shall be in
writing and shall be deemed to have been duly given if signed by the
respective persons giving them (in the case of any corporation or limited
liability company, the signature shall be by an officer thereof) and
delivered by hand or by telecopy or on the date of receipt indicated on the
return receipt if mailed (registered or certified, return receipt
requested, properly addressed and postage prepaid).
If to SteelCo, to:
United States Steel LLC
600 Grant Street
Suite 6100
Pittsburgh, PA 15219-4776
Attention: General Counsel
Facsimile: 412-433-1131
If to USX, to:
Marathon Oil Corporation
5555 San Felipe Road
Houston, TX 77056-2723
Attention: General Counsel
Facsimile: 713-296-4375
Such names and addresses may be changed by notice given in accordance with
this Section 5.6. Copies of all notices, requests, permissions, waivers,
referrals and all other communications hereunder given prior to the
Separation Effective Time shall be given to:
Skadden, Arps, Slate, Meagher & Flom LLP
4 Times Square
New York, NY 10036-6522
Attention: Roger S. Aaron, Esquire
Facsimile: (212) 735-2000
Section 5.7 Third-Party Beneficiaries. Except as provided
in Section 5.2 hereof with respect to indemnification of U. S. Steel
Indemnified Parties and USX Indemnified Parties hereunder, nothing in this
Agreement shall confer any rights upon any Person or entity other than the
parties hereto and their respective heirs, successors and permitted
assigns.
Section 5.8 Entire Agreement. This Agreement contains the
entire understanding of the parties hereto with respect to the subject
matter contained herein, and supersedes and cancels all prior agreements,
negotiations, correspondence, undertakings and communications of the
parties, oral or written, respecting such subject matter.
Section 5.9 Headings. The article, section and paragraph
headings contained in this Agreement are for reference purposes only and
shall not affect in any way the meaning or interpretation of this
Agreement. All references herein to "Articles" or "Sections" shall be
deemed to be references to Articles or Sections hereof unless otherwise
indicated.
Section 5.10 Counterparts. This Agreement may be executed
in one or more counterparts and each counterpart shall be deemed to be an
original, but all of which shall constitute one and the same original.
Section 5.11 Parties in Interest; Assignment; Successors.
Neither this Agreement nor any of the rights, interests or obligations
hereunder shall be assigned by any of the parties hereto without the prior
written consent of the other party. Subject to the preceding sentence, this
Agreement shall inure to the benefit of and be binding upon SteelCo and USX
and their respective successors and permitted assigns. Nothing in this
Agreement, express or implied, is intended to confer upon any other Person
any rights or remedies under or by reason of this Agreement.
Section 5.12 Severability; Enforcement. The invalidity of
any portion hereof shall not affect the validity, force or effect of the
remaining portions hereof. If it is ever held that any restriction
hereunder is too broad to permit enforcement of such restriction to its
fullest extent, each party agrees that a court of competent jurisdiction
may enforce such restriction to the maximum extent permitted by law, and
each party hereby consents and agrees that such scope may be judicially
modified accordingly in any proceeding brought to enforce such restriction.
Section 5.13 Remedies. The parties agree that money
damages or other remedy at law would not be a sufficient or adequate remedy
for any breach or violation of, or a default under, this Agreement by them
and that in addition to all other remedies available to them, each of them
shall be entitled to the fullest extent permitted by law to an injunction
restraining such breach, violation or default or threatened breach,
violation or default and to any other equitable relief, including specific
performance, without bond or other security being required.
IN WITNESS WHEREOF, each of the parties has caused this Agreement
to be duly executed on its behalf by its officers thereunto duly
authorized, all as of the day and year first above written.
USX CORPORATION
By: /s/ K. L. Matheny
------------------------------
Name: K. L. Matheny
Title: Vice President - Investor
Relations
UNITED STATES STEEL LLC
By: /s/ G. R. Haggerty
----------------------
Name: G. R. Haggerty
Title: Vice President - Accounting
& Finance
EXHIBIT 99.7
LICENSE AGREEMENT
THIS LICENSE AGREEMENT ("Agreement"), dated as of December 31,
2001, by and between USX Corporation, a Delaware corporation, to be renamed
"Marathon Oil Corporation" ("USX"), and United States Steel LLC, a Delaware
limited liability company and wholly owned subsidiary of USX, to be renamed
"United States Steel Corporation" ("SteelCo").
W I T N E S S E T H:
WHEREAS, this Agreement is made pursuant to and as a condition of
the Agreement and Plan of Reorganization, dated as of July 31, 2001
("Separation Agreement"), by and between USX and SteelCo, pursuant to which
the respective businesses of the Marathon Group of USX and the U.S. Steel
Group of USX are being separated into two independent companies by merging
USX Merger Corporation, a Delaware corporation and a wholly owned
subsidiary of USX ("Merger Sub"), with and into USX, subject to the terms
and conditions thereof, and pursuant to Section 251 of the DGCL (the
"Separation Merger"), with USX continuing as the surviving corporation, so
that immediately following the Separation Effective Time, SteelCo shall own
and operate the business of the U.S. Steel Group and shall be wholly owned
by the holders of the then outstanding shares of USX-U.S. Steel Group
Common Stock and the business of the Marathon Group shall be owned and
operated by USX, which shall be a separate and independent entity from
SteelCo and shall be wholly owned by the holders of the then outstanding
shares of USX-Marathon Group Common Stock (the "Separation"); and
WHEREAS, the parties are entering into this Agreement to provide
for the licensing by USX to SteelCo of (i) various registered trademarks
and service marks using or including USX or variants thereof (the "USX Name
Rights"), and (ii) various trade secrets, know how and other intellectual
property rights used by USX in connection with the business of both the
Marathon Group and the U.S. Steel Group (the "Headquarters IP").
NOW, THEREFORE, in furtherance of the foregoing and in
consideration of the mutual promises and undertakings contained herein and
in any other document executed in connection with this Agreement, the
parties agree as follows:
ARTICLE I
DEFINITIONS
Section 1.1 General. Unless otherwise defined herein,
capitalized terms used herein shall have their respective meanings as
defined in the Separation Agreement.
Section 1.2 Other Definitional Provisions.
(a) The words "hereof", "herein", "hereunder"
and words of similar import, when used in this Agreement, shall refer to
this Agreement as a whole and not to any particular provision of this
Agreement.
(b) The terms defined in the singular shall have
a comparable meaning when used in the plural, and vice versa.
(c) The terms "dollars" and "$" shall mean
United States dollars.
ARTICLE II
LICENSE AND QUALITY CONTROL
Section 2.1 Grant of License. USX grants to SteelCo a
fully paid, worldwide, nonexclusive license to use (i) the USX Name Rights
solely in the conduct of SteelCo's business, and (ii) the Headquarters IP
solely in the conduct of SteelCo's internal business. SteelCo acknowledges
that by virtue of this Agreement, SteelCo is receiving only the right to
use the USX Name Rights and Headquarters IP in accordance with the terms
hereof and is not acquiring any rights of ownership thereof.
Section 2.2 Right to Sublicense. The grant of the license
to SteelCo set forth in Section 2.1 shall include the right to sublicense
the USX Name Rights and Headquarters IP to any Subsidiary of SteelCo. Any
other sublicense by SteelCo shall require the written consent of USX.
Section 2.3 Quality Control. SteelCo agrees not to affix
USX Name Rights to any products or to use USX Name Rights in connection
with the provision of any services unless such products and services are of
a type and quality consistent with the standards established from time to
time by USX for such goods and services. SteelCo agrees to cooperate in
facilitating USX's control over the quality of goods and services in
connection with which SteelCo uses USX Name Rights. SteelCo shall permit
USX and its authorized representatives to inspect and monitor at any
reasonable time and place all goods and services produced or provided by
SteelCo in connection with which SteelCo uses USX Name Rights. If USX
reasonably concludes that any goods or services in connection with which
SteelCo uses USX Name Rights do not conform to USX's quality standards,
SteelCo shall promptly take steps either to insure conformance with USX's
quality standards or to prevent the use of USX Name Rights in connection
with such goods and services.
ARTICLE III
INDEMNIFICATION
Section 3.l USX's Agreement to Indemnify. Subject to the
terms and conditions set forth in this Agreement, USX shall indemnify,
defend and hold harmless SteelCo and its directors, officers, employees,
Representatives, advisors, agents and Affiliates (collectively, the "U.S.
Steel Indemnified Parties") from, against and in respect of any and all
Indemnifiable Losses of the U.S. Steel Indemnified Parties arising out of,
relating to or resulting from, directly or indirectly, USX's use of the USX
Name Rights or Headquarters IP.
Section 3.2 SteelCo's Agreement to Indemnify. Subject to
the terms and conditions set forth in this Agreement, SteelCo shall
indemnify, defend and hold harmless USX and each of its directors,
officers, employees, Representatives, advisors, agents and Affiliates
(collectively, the "USX Indemnified Parties") from, against and in respect
of any and all Indemnifiable Losses of the USX Indemnified Parties arising
out of, relating to or resulting from, directly or indirectly, SteelCo's
use or sublicense of the USX Name Rights or Headquarters IP.
Section 3.3 Procedure for Indemnification. All claims for
indemnification under this Article III shall be asserted and resolved as
follows:
(a) Third-Party Claims. In the event that any
claim or demand for which an Indemnifying Party may be liable to an
Indemnified Party hereunder is asserted against or sought to be collected
by a third party from an Indemnified Party (an "Asserted Liability"), the
Indemnified Party shall as soon as possible notify the Indemnifying Party
in writing of such Asserted Liability, specifying the nature of such
Asserted Liability (the "Claim Notice"); provided that no delay on the part
of the Indemnified Party in giving any such Claim Notice shall relieve the
Indemnifying Party of any indemnification obligation hereunder except to
the extent that the Indemnifying Party is materially prejudiced by such
delay. The Indemnifying Party shall have 60 days (or less if the nature of
the Asserted Liability requires) from its receipt of the Claim Notice to
notify the Indemnified Party whether or not the Indemnifying Party desires,
at the Indemnifying Party's sole cost and expense and by counsel of its own
choosing, to defend against such Asserted Liability; provided, however,
that if, under applicable standards of professional conduct a conflict on
any significant issue between the Indemnifying Party and any Indemnified
Party exists in respect of such Asserted Liability, then the Indemnifying
Party shall reimburse the Indemnified Party for the reasonable fees and
expenses of one additional counsel.
If the Indemnifying Party undertakes to defend against
such Asserted Liability, the Indemnified Party shall cooperate
fully with the Indemnifying Party and its counsel in the
investigation, defense and settlement thereof, but the
Indemnifying Party shall control the investigation, defense and
settlement thereof. If the Indemnified Party desires to
participate in any such defense, it may do so at its sole cost and
expense. If the Indemnifying Party elects not to defend against
such Asserted Liability, then the Indemnifying Party shall have
the right to participate in any such defense at its sole cost and
expense, but the Indemnified Party shall control the
investigation, defense and settlement thereof at the sole cost and
expense of the Indemnifying Party. The Indemnifying Party shall
not, without the prior written consent of the Indemnified Party
(which consent shall not be unreasonably withheld), consent to any
settlement unless such settlement (i) includes a complete release
of the Indemnified Party and (ii) does not require the Indemnified
Party to admit any liability or make or forego any payment or
forego or take any action. The Indemnifying Party shall not be
liable for any settlement of any Asserted Liability effected
without its prior written consent (which consent shall not be
unreasonably withheld).
(b) Non-Third-Party Claims. In the event that an
Indemnified Party should have a claim against the Indemnifying Party
hereunder that does not involve a claim or demand being asserted against or
sought to be collected from it by a third party, the Indemnified Party
shall send a notice with respect to such claim to the Indemnifying Party.
The Indemnifying Party shall have 60 days from the date such notice is
delivered during which to notify the Indemnified Party in writing of any
good faith objections it has to the Indemnified Party's notice or claims
for indemnification, setting forth in reasonable detail each of the
Indemnifying Party's objections thereto. If the Indemnifying Party does not
deliver such written notice of objection within such 60-day period, the
Indemnifying Party shall be deemed to not have any objections to such
claim. If the Indemnifying Party does deliver such written notice of
objection within such 60-day period, the Indemnifying Party and the
Indemnified Party shall attempt in good faith to resolve any such dispute
within 60 days of the delivery by the Indemnifying Party of such written
notice of objection. If the Indemnifying Party and the Indemnified Party
are unable to resolve any such dispute within such 60 day period, such
dispute shall be resolved in accordance with the procedures set forth in
Section 5.1 hereof.
(c) Miscellaneous Indemnification Provisions.
(i) The Indemnifying Party agrees to
indemnify any successors of the Indemnified Party to the same extent and in
the same manner and on the same terms and conditions as the Indemnified
Party is indemnified by the Indemnifying Party under this Article III.
(ii) The amount that an Indemnifying
Party is required to pay to any Indemnified Party pursuant to this Article
III shall be reduced (retroactively or prospectively) by any Insurance
Proceeds or other amounts actually recovered by or on behalf of such
Indemnified Party in respect of the related Indemnifiable Loss. If an
Indemnified Party shall have received the payment required by this Article
III in respect of an Indemnifiable Loss and shall subsequently actually
receive Insurance Proceeds or other amounts in respect of such
Indemnifiable Loss, then such Indemnified Party shall pay to such
Indemnifying Party a sum equal to the amount of such Insurance Proceeds or
other amounts actually received, up to the aggregate amount of any payments
received from such Indemnifying Party pursuant to this Article III in
respect of such Indemnifiable Loss.
ARTICLE IV
TERM AND AMENDMENT
Section 4.1 Term. The term of this Agreement shall
commence on the date set forth above and shall remain in force perpetually
so long as SteelCo performs as herein provided. USX shall have the right to
terminate this Agreement in the event of a material breach by SteelCo,
which breach is not cured within thirty days of written notice thereof.
Section 4.2 Amendment. This Agreement may be amended,
modified or supplemented at any time and shall be evidenced by a written
agreement signed by all of the parties hereto.
ARTICLE V
GENERAL PROVISIONS
Section 5.1 Dispute Resolution. Any dispute between the
parties shall be subject to the Dispute Resolution procedure set forth in
Section 15.2 of the Separation Agreement.
Section 5.2 Expenses. Unless otherwise provided herein,
all out-of-pocket costs and expenses with respect to the transactions
contemplated in this Agreement shall be borne by the party incurring such
costs and expenses.
Section 5.3 Records. Each party shall have access to all
records, documents and other information in the possession of the other
party relating to activities prior to the Separation and such records shall
be subject to the confidentiality provisions of Section 11.4 of the
Separation Agreement. Upon the request of the party seeking such access,
the other party shall make any such records, documents and other
information available or make copies for the requesting party without
charge.
Section 5.4 Governing Law. This Agreement shall be
governed by, and construed in accordance with, the laws of Delaware,
without reference to choice of law principles, including matters of
construction, validity and performance.
Section 5.5 Notices. Notices, requests, permissions,
waivers, referrals and all other communications hereunder shall be in
writing and shall be deemed to have been duly given if signed by the
respective persons giving them (in the case of any corporation or limited
liability company, the signature shall be by an officer thereof) and
delivered by hand or by telecopy or on the date of receipt indicated on the
return receipt if mailed (registered or certified, return receipt
requested, properly addressed and postage prepaid):
If to SteelCo, to:
United States Steel LLC
600 Grant Street
Suite 6100
Pittsburgh, PA 15219-4776
Attention: General Counsel
Facsimile: 412-433-1131
If to USX, to:
Marathon Oil Corporation
5555 San Felipe Road
Houston, TX 77056-2723
Attention: General Counsel
Facsimile: 713-296-4375
Such names and addresses may be changed by notice given in accordance with
this Section 5.5. Copies of all notices, requests, permissions, waivers,
referrals and all other communications hereunder given prior to the
Separation Effective Time shall be given to:
Skadden, Arps, Slate, Meagher & Flom LLP
4 Times Square
New York, NY 10036-6522
Attention: Roger S. Aaron, Esquire
Facsimile: (212) 735-2000
Section 5.6 Third-Party Beneficiaries. Except as provided
in Section 2.2 hereof with respect to sublicenses to subsidiaries of
SteelCo and in Article III hereof with respect to indemnification of U. S.
Steel Indemnified Parties and USX Indemnified Parties hereunder, nothing in
this Agreement shall confer any rights upon any Person or entity other than
the parties hereto and their respective heirs, successors and permitted
assigns.
Section 5.7 Entire Agreement. This Agreement contains the
entire understanding of the parties hereto with respect to the subject
matter contained herein, and supersedes and cancels all prior agreements,
negotiations, correspondence, undertakings and communications of the
parties, oral or written, respecting such subject matter.
Section 5.8 Headings. The article, section and paragraph
headings contained in this Agreement are for reference purposes only and
shall not affect in any way the meaning or interpretation of this
Agreement. All references herein to "Articles", "Sections" or "Appendices"
shall be deemed to be references to Articles or Sections hereof or
Appendices hereto unless otherwise indicated.
Section 5.9 Counterparts. This Agreement may be executed
in one or more counterparts and each counterpart shall be deemed to be an
original, but all of which shall constitute one and the same original.
Section 5.10 Parties in Interest; Assignment; Successors.
Neither this Agreement nor any of the rights, interests or obligations
hereunder shall be assigned by any of the parties hereto without the prior
written consent of the other party. Subject to the preceding sentence, this
Agreement shall inure to the benefit of and be binding upon SteelCo and USX
and their respective successors and permitted assigns and sublicensees.
Nothing in this Agreement, express or implied, is intended to confer upon
any other Person any rights or remedies under or by reason of this
Agreement.
Section 5.11 Severability; Enforcement. The invalidity of
any portion hereof shall not affect the validity, force or effect of the
remaining portions hereof. If it is ever held that any restriction
hereunder is too broad to permit enforcement of such restriction to its
fullest extent, each party agrees that a court of competent jurisdiction
may enforce such restriction to the maximum extent permitted by law, and
each party hereby consents and agrees that such scope may be judicially
modified accordingly in any proceeding brought to enforce such restriction.
Section 5.12 Remedies. The parties agree that money
damages or other remedy at law would not be a sufficient or adequate remedy
for any breach or violation of, or a default under, this Agreement by them
and that in addition to all other remedies available to them, each of them
shall be entitled to the fullest extent permitted by law to an injunction
restraining such breach, violation or default or threatened breach,
violation or default and to any other equitable relief, including specific
performance, without bond or other security being required.
[SIGNATURE PAGE FOLLOWS]
IN WITNESS WHEREOF, each of the parties has caused this Agreement
to be duly executed on its behalf by its officers thereunto duly
authorized, all as of the day and year first above written.
USX CORPORATION
By: /s/ K. L. Matheny
------------------------------
Name: K. L. Matheny
Title: Vice President - Investor
Relations
UNITED STATES STEEL LLC
By: /s/ G. R. Haggerty
-------------------
Name: G. R. Haggerty
Title: Vice President - Accounting
& Finance