Exhibit
10(q)


 


EMPLOYMENT AND
CONSULTING AGREEMENT


 


AGREEMENT by
and between UNITED STATES STEEL CORPORATION (the “Corporation”), and Thomas J.
Usher (“Mr. Usher”), dated as of February 13, 2003 (the “Agreement”).


 


The Board of
Directors of the Corporation (the “Board”) has determined that it is in the
best interests of the Corporation and its shareholders to assure that the
Corporation will have the continued guidance and direction of Mr. Usher, both
before and after his retirement from active employment; and Mr. Usher is
willing to commit to render services to the Corporation pursuant to the terms
and conditions set forth below in this Agreement.


 


1.                                       Periods
of this Agreement.  This Agreement
provides for the continued relationship of the Corporation and Mr. Usher for
three successive periods.  These three
periods are:  (a) the Employment Period,
which shall extend from the date of this Agreement until Mr. Usher’s retirement
as an employee of the Corporation, to be not later than April 30, 2007; (b) the
Chairmanship Period, which shall extend from the end of the Employment Period
through April 30, 2007, on which date Mr. Usher shall retire from the Board;
and (c) the Consulting Period, which shall extend from May 1, 2007 through
April 30, 2009.


 


2.                                       Employment
Period.  During the Employment
Period, Mr. Usher shall continue to serve as Chairman of the Board of Directors
& Chief Executive Officer of the Corporation.  He shall receive an annual salary and shall continue to be
eligible for bonuses under the Senior Executive Officer Annual Incentive
Compensation Plan.  He shall not receive
any new grants of stock options or restricted stock other than as provided in
this Agreement.  As of the date of this
Agreement, Mr. Usher shall receive a grant of options for 800,000 shares of the
Corporation’s common stock under the 2002 Stock Plan.  The options shall have a term of eight years and a grant price
equal to the average of the high and the low New York Stock Exchange trading prices
on the date of this Agreement.  In addition,
he shall surrender as of the date of this Agreement all of his restricted
shares of the Corporation’s common stock (except those which are eligible for
vesting in May 2003) and shall receive 150,000 shares of phantom stock (i.e.,
book entry units, each representing a share of the Corporation’s common stock),
which shall be paid to Mr. Usher as follows: 
Within five business days after each of the first and second anniversary
dates of the date of this Agreement, Mr. Usher shall receive a cash payment in
an amount equal to the fair market value of 75,000 of such shares.  For this purpose, “fair market value” shall
be defined as the average of the high and low New York Stock Exchange trading
prices on the relevant anniversary date.


 


3.                                       Chairmanship
Period.  During the Chairmanship
Period, Mr. Usher shall serve as the non-executive Chairman of the Board of
Directors of the Corporation.  He shall
receive for such service an annual retainer fee equal in amount to his
annualized monthly salary in effect at the time of his retirement as an
employee of the Corporation.  Such
retainer fee shall be paid on a quarterly basis with such quarterly payment to
be made at the beginning of each three-month period.  During this period, Mr. Usher shall not be eligible for awards
under the Senior Executive Officer Annual Incentive Compensation Plan.


 

















 


4.                                       Consulting
Period. During the Consulting Period, Mr. Usher shall serve as a consultant
to the Corporation and receive an annual consulting fee equal to half his
annualized monthly salary in effect at the time of his retirement as an
employee of the Corporation.  Such
consulting fee shall be paid on a quarterly basis with such quarterly payment
made at the beginning of each three-month period.


 


5.                                       Working
Condition Fringes and Other Benefits. 
During both the Chairmanship Period and the Consulting Period, Mr. Usher
shall be entitled to the same working condition fringes and other benefits as
those provided to him by the Corporation during the Employment Period.


 


6.                                       Pension
Calculation.  If Mr. Usher elects to
receive his benefits under the non tax-qualified pension programs sponsored by
the Corporation in the form of a lump sum distribution, upon retirement such
benefits shall be calculated as if his total pension benefits were determined
using the applicable interest rates and mortality tables in effect for
retirements on January 31, 2003, instead of the applicable interest rates and
mortality tables in effect at the date of his retirement.  This provision supersedes the Corporation’s
obligation under the August 8, 2001 agreement between USX Corporation (now
Marathon Oil Corporation (“Marathon”)) and Mr. Usher (the “Retention
Agreement”) with respect to the non tax-qualified pension plans sponsored by
the Corporation but will have no impact on the obligation of Marathon under the
terms of the Retention Agreement.


 


7.                                       Agreement
Not to Compete.  Mr. Usher shall not
become employed by, act as a director or consultant for, or otherwise provide
any services for any competitor of the Corporation through April 30, 2010.


 


8.                                       Change
in Control.  The benefits of the
Severance Agreement between the Corporation and Mr. Usher dated August 31,
2001, or their equivalent as appropriately calculated during the Employment
Period, shall continue in effect until the end of the Employment Period.


 


9.                                       Termination
of Agreement.  This Agreement shall
be terminated as of the effective date of any of the following actions or
events. (a) The Board may terminate this Agreement at any time by causing the Corporation
to pay to Mr. Usher the present value of the remaining amounts to be paid and
the value of the working condition fringes and other benefits to be provided
during the three periods outlined in paragraph 1 of this Agreement.  (b) The Board may terminate this Agreement
for cause, i.e., in the event of illegal conduct, gross misconduct, incapacity,
or failure to satisfy the requirements of paragraph 7 above by Mr. Usher,
thereby relieving the Corporation of any obligation to pay such remaining amounts.
(c) Upon Mr. Usher’s death, this Agreement shall immediately terminate, and the
Corporation shall pay to Mr. Usher’s surviving spouse, or his estate if there
is no surviving spouse, the annual compensation, retainer fee, or consulting
fee.


 


10.                                 Previous
Agreements Superseded.  This
Agreement supersedes all previous agreements between the Corporation (and its
predecessors) and Mr. Usher, as far as the Corporation’s obligations are
concerned, with the following exceptions: 
(a) the benefits of the Severance Agreement described in section 8 above
shall remain in effect, and (b) the retention bonus payable by the Corporation
to Mr. Usher at the end of 2004


 


2

















 


pursuant to the Retention
Agreement shall be payable upon Mr. Usher’s retirement as an employee of the
Corporation, provided that the performance measures required for such payment
in sub-paragraphs 2(b)(i)(A), (B) and (C), and in paragraph 2(b)(ii) (adjusted,
if necessary, for the shorter time period) of such agreement, in the judgment
of the Compensation & Organization Committee, are met.


 


Agreed to and
accepted this 13th day of February, 2003.


 


	
   

  	
  UNITED
  STATES STEEL CORPORATION

  
	
   

  	
  By

  	
  /s/ Seth E.
  Schofield

  	
   

  	
  /s/ Thomas
  J. Usher

  	
   

  
	
   

  	
   

  	
  Seth E.
  Schofield

  	
  Thomas J.
  Usher

  
	
   

  	
   

  	
  On behalf of
  the Compensation

  Committee of United States Steel

  Corporation

  	
   

  



 


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