Exhibit 10.1

 

LOGO [g374768ex10_1pg001v2.jpg]  

United States Steel Corporation

600 Grant Street

Pittsburgh, PA 15219-2800

412 433 1148

Fax: 412 433 6219

smsuver@uss.com

 

Susan M. Suver

Vice President-Human Resources

June 28, 2012

Mr. Mario Longhi

16609 Villalenda de Avila

Tampa, FL 33613

Dear Mario:

On behalf of United States Steel Corporation (USS or the Company), I am pleased
to offer you an opportunity for employment as Executive Vice President and Chief
Operating Officer, currently located in Pittsburgh, Pennsylvania, at a base
salary of $820,000 annually ($68,333 per month) effective July 2, 2012. Upon
joining the Company, you will report to the Chairman of the Board of Directors
and Chief Executive Officer and will become a member of the Executive Management
Committee.

Hiring Incentives - The Company will provide you with a hiring grant of
restricted stock units with a value of $200,000 based upon the value on the
relevant grant date, which is the next business day following your date of hire,
subject to 3-year cliff vesting from the date of the grant conditioned upon your
continued employment with the Company. In addition, the Company will provide you
with a hiring grant of performance awards with a value of $200,000 based upon
the value on the relevant grant date, which is the next business day following
your date of hire, contingent upon achievement of the performance measures
applicable to other 2012 performance award grants over the same approximate
three-year performance period. These hiring grants will be subject to terms and
conditions similar to those applicable to our retention grants.

Short-Term and Long-Term Compensation - As part of your employment, you will be
eligible to participate in the Executive Management Annual Incentive
Compensation Program (Annual Incentive Compensation Program) targeted this year
at 100% of your base salary earnings, with a maximum incentive opportunity of up
to 215% of your target based on a number of Company performance factors and
influenced by your individual performance. Since your employment with USS would
begin in the middle of the current performance period under the Annual Incentive
Compensation Program, any payments under the terms of that program for the 2012
performance period would be prorated based upon the number of full months worked
during the performance period. (Technically, if you are determined to be a
“covered employee,” as that term is defined under Section 162(m) of the Internal
Revenue Code, any payments for the 2012 performance period will be made as a
separate bonus outside of the Annual Incentive Compensation Program, subject to
the same performance conditions and negative discretion.) You will also be
eligible to participate in the Long-Term Incentive Compensation Program this
year on a basis reasonably comparable to that of other executive officers. Under
the current executive program, our executive officers receive a mix of the
long-term incentive compensation value in the form of stock options, restricted
stock units, and performance awards. The amount, mix, and the terms and
conditions of your equity awards will be determined by our Compensation
Committee.

 

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As an Executive, you will be subject to stock ownership and retention guidelines
as approved by our Board of Directors. The ownership requirement is currently
defined as a multiple of salary midpoint, and for Executives at your level, the
multiple is three (3) times your salary midpoint. Until the required ownership
is achieved, you will be required to retain shares equal to 100% of the
after-tax value of shares received in connection with the vesting of restricted
stock units and performance awards, and at least 25% of the net value received
from the exercise of stock options. Once the ownership requirement is satisfied,
25% of the net value received from future vestings and exercises must be
retained in the form of shares. Further details regarding this program will be
provided with your new hire paperwork.

Employee Benefits - As an employee of USS, you will be eligible to participate
in pension, savings, and health and welfare benefit plans, including short-term
and long-term disability programs, that are sponsored by USS and generally
available to our newly hired USS management employees. Outlined below is a
summary of the pension and savings benefits that you will be eligible to receive
as an executive of USS. Your eligibility and participation in all of the
following plans and programs is determined by the terms and provisions of these
plans and programs, as they may be amended from time to time.

 

(1) Pension Benefit - You will participate in the Retirement Account under the
Savings Fund Plan for Salaried Employees and be eligible for monthly Company
contributions in the amount of 8.5% of your base salary. You will participate in
a non tax-qualified restoration plan with respect to the portion of the USS
contributions to your Retirement Account that cannot be made due to certain
Internal Revenue Code limitations.

In addition, you will be eligible to receive a non tax-qualified supplemental
executive retirement benefit outlined in Exhibit A (the “Supplemental Account”)
under which you will be eligible for book accruals in the amount of 8.5% of your
incentive compensation received under the Annual Incentive Compensation Program.

By your acceptance of this offer of employment and participation in the
Supplemental Account, you agree and acknowledge that you are not eligible to
participate in the Supplemental Retirement Account Program (which provides
similar benefits to the Supplement Account) and waive any rights with respect
thereto. You will vest in your Supplemental Account upon your termination of
employment with the Company if such termination is (i) on or after your
attainment of age 65, or (ii) with Company consent, or (iii) on account of your
death or involuntary termination other than for cause.

 

(2) Savings Benefit - You will be eligible to make employee contributions on a
pre-tax and/or after-tax basis to the Savings Account under the Savings Fund
Plan for Salaried Employees with the sum of the employee contributions not to
exceed 16% of your base salary (subject to limitations under the Internal
Revenue Code (“IRC”)). You will also be eligible for Company contributions that
match your employee contributions up to 6.0% of your base salary (subject to IRC
limitations). You will participate in a non tax-qualified restoration plan with
respect to the portion of the Company contributions to your Savings Account that
cannot be made due to certain IRC limitations.

 

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Attached for your information are copies of the two non tax-qualified
restoration plans (the “Non Tax-Qualified Retirement Account Program” and the
“Supplemental Thrift Program”) applicable to you.

Executive Physical Program - You will be eligible to participate in the Annual
Physical Program for Executive Management Employees, which provides you with the
opportunity to receive a comprehensive health examination to promote wellness
and disease prevention.

Tax and Financial Planning - You will receive, for the term of your employment
with the Company, the tax preparation and financial planning services that USS
provides to its executives through a third party vendor.

Change in Control Agreement - As the Executive Vice President and Chief
Operating Officer, you will be eligible for a change in control agreement at 2.5
times your salary and bonus, in the form provided by the Company. As more
specifically detailed in the agreement, your coverage under the change in
control agreement will continue while you remain in this role, or in another
eligible role, until December 31, 2013; provided, however, that commencing on
December 31, 2012 and each December 31 thereafter, the term of the agreement
shall automatically be extended for one additional year unless, not later than
September 1 of that year, the Company provides notice that it does not wish to
extend the agreement. However, such agreement automatically is extended for a
stated period of time if a Change in Control or Potential Change in Control of
the Company occurs during the original or extended term of the agreement. As
further outlined in the agreement, a Change in Control includes (1) a change
that would have to be reported in response to Item 6(e) of Schedule 14A of the
Regulation 14A promulgated under the Securities Exchange Act of 1934, as
amended, as well as (2) certain other specified circumstances involving (a) the
beneficial ownership of the securities of the Company, or (b) the membership of
the Incumbent Board of Directors, or (c) the merger or consolidation of the
Company or any direct or indirect subsidiary thereof with other corporations, or
(d) certain other circumstances.

Severance Provision - If (a) the Company terminates your employment within three
(3) years of your first day of employment with the Company other than for cause
(as defined below), and (b) you are not entitled to any payment under your
change in control agreement referenced above, you will be entitled to a lump sum
payment equal to the sum of (i) twelve (12) months of your base salary, and
(ii) the equivalent of one year of your target bonus as that amount would be
calculated under the Annual Incentive Compensation Program. This benefit is in
lieu of any layoff benefit that may otherwise be payable under the Layoff
Benefit Program. For purposes of this severance provision, termination by the
Company of your employment for “cause” shall mean termination upon (i) the
willful and continued failure by you to substantially perform your duties with
the Company (other than any such failure resulting from your incapacity due to
physical or mental illness), (ii) the willful engaging by you in conduct which
is demonstrably and materially injurious to the Company, monetarily or
otherwise, (iii) your conviction of a felony or conviction of a misdemeanor
which impairs your ability substantially to perform your duties with the
Company, or (iv) the material breach by you of the Company’s Code of Ethical
Business Conduct. Under this definition of “cause”, no act, or failure to act,
on your part shall be deemed “willful” unless done, or omitted to be done, by
you not in good faith and without reasonable belief that your action or omission
was in the best interest of the Company. Such payment shall be made on the 30th
day following your separation from service within the

 

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meaning of Internal Revenue Code (Code) section 409A (or, if such day is not a
business day, on the next succeeding business day); provided, however, that no
such payment may be made to you until the first business day following the six
(6) month anniversary of your separation from service if you are a “specified
employee” under Code section 409A at the time of your separation from service.
In addition, if the Company terminates your employment within three (3) years of
your first day of employment with the Company other than for cause (as defined
below), (a) the hiring grant of restricted stock units will vest in full
immediately upon such termination and (b) the hiring grant of performance awards
will vest at 100% of the rate of vesting determined by the Company’s performance
for the 2012 performance award grant at the end of the approximate three-year
performance period (in May 2015) on the date when our Compensation Committee
certifies achievement of such performance. Distribution and/or payment of such
restricted stock units and performance awards shall be made pursuant to the
terms of the respective award agreements. The foregoing severance payments are
conditioned upon and subject to your execution of (within 60 days following your
separation from service), and compliance with the terms of, a general release
and waiver of all claims you may have against the Company and its directors,
officers and affiliates, in the form presented by the Company, and a
non-disclosure and non-compete agreement in the form presented by the Company,
which current form is attached hereto. These severance provisions are not
subject to renewal or renegotiation at any time.

Relocation Benefits - This employment offer includes reimbursement of the actual
costs you incur (from the date of this letter and during your term of
employment) for the reasonable expense of:

 

(1) transportation of your household goods in connection with relocation of your
current permanent residence to the Greater Pittsburgh area;

 

(2) standard real estate closing costs that, in the case of the sale of your
current permanent residence, are customarily allocated in the Tampa, Florida
metropolitan area to the seller and that, in the case of the purchase of a new
permanent residence, are customarily allocated in the Greater Pittsburgh area to
the purchaser;

 

(3) rental expense for temporary lodging in the Greater Pittsburgh area for up
to one hundred twenty (120) days; and,

 

(4) transportation for (a) you to travel to and from Florida up to twice a month
during the one hundred twenty (120) day period, and (b) your immediate family to
travel to Pittsburgh twice during that same period.

To be eligible for reimbursement, you will be required to provide advance
estimates of these expenses to the Company for its review and authorization
prior to your actually incurring such costs. In addition, you will be eligible
to receive a lump sum payment for the loss on sale of your primary residence, up
to a maximum to be determined by the Company.

Any of the above relocation expenses that are taxable to you will be grossed-up
for Federal, state and local income tax purposes. The gross-up payment will be
made as soon as practicable after the reimbursement is made, but in no event
later than the end of your taxable year next following your taxable year in
which the related taxes are remitted to the taxing authorities or, in the case
of a tax audit or litigation addressing the existence or amount of a tax
liability, by the end of your

 

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taxable year following your taxable year in which the taxes that are the subject
of audit or litigation are remitted to the taxing authority (or where as a
result of such audit or litigation no taxes are remitted, the end of your
taxable year following your taxable year in which the audit is completed or
there is a final and nonappealable settlement or other resolution of the
litigation).

In accordance with Code section 409A, reimbursement of the amount of eligible
relocation expenses or tax preparation and financial planning services provided
or incurred within a particular year shall be made no later than the end of your
taxable year following the taxable year in which the expense was incurred. The
amount of reimbursable expenses incurred in one taxable year shall not affect
the amount of reimbursable expenses in a different taxable year, and such
reimbursement shall not be subject to liquidation or exchange for another
benefit.

Obligation to Repay the Company - If you voluntarily terminate your employment
or are terminated for cause (as defined above under the severance provision)
within two (2) years of your employment date with the Company, you agree to
repay all relocation benefits, including related tax gross-ups and any loss on
sale of your primary residence as approved by the Company in advance, accepted
by you. Such repayment must be made within thirty (30) days of the effective
date of the voluntary termination or termination for cause and (except as may be
prohibited by law) you hereby authorize immediate repayment by payroll deduction
from any earnings, and by setoff against any other amounts, that may then be due
to you by the Company.

Company Policies - You will be subject to all Company policies including without
limitation the Executive Management Recoupment Policy pursuant to which
incentive awards may be recouped from you in certain circumstances, as such
policies may be amended from time to time.

The terms and conditions of this letter and the offer of employment that it
contains shall be construed under the laws of, and the place of its acceptance
shall be deemed to be, the Commonwealth of Pennsylvania.

This offer of employment is, of course, contingent upon your successful
completion of a background check, verification of work authorization and a
pre-placement physical examination, including laboratory work. As a condition of
your employment, you will also be required to execute non-disclosure and
non-compete agreements, copies of which are attached.

If you accept this offer of employment, you will be an employee-at-will, meaning
that either you or the Company may terminate the employment relationship at any
time for any reason, with or without cause. Any statements to the contrary that
may have been made to you, or that may be made to you, by the Company, its
agents or representatives are superseded by this offer letter. Nothing will
change the at-will status of your employment except for a written agreement
signed by yourself and an appropriate officer of the Company.

 

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To indicate your acceptance of this employment offer, please sign below and
return to me; we look forward to working with you at United States Steel
Corporation.

 

Very truly yours,

/s/ S. M. Suver

Susan M. Suver

Vice President, Human Resources

Attachments

Accepted by:

 

/s/ Mario Longhi

   

June 28, 2012

Mario Longhi     Date

 

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