Exhibit
10(b)


 


United States Steel
Corporation Senior Executive Officer

Annual Incentive Compensation Plan


 


 


1.               Purpose


 


The objectives of the Senior Executive Officer Annual
Incentive Compensation Plan (the “Plan”) are to advance the interests of the
Corporation by providing Plan Participants with annual incentive opportunities
linked directly to specific results.  It
is intended that the Plan will:


 


(a)                      reinforce
the Corporation’s goal-setting and strategic planning process,


 


(b)                     recognize the
efforts of senior executive officers in achieving objectives, and


 


(c)                      aid in
attracting and retaining competent senior executive officers, thus ensuring the
long-range success of the Corporation.


 


2.               Definitions


 


The following definitions will apply:


 


	
  Award -

  	
   

  	
  An award granted under the Senior Executive Officer
  Annual Incentive Compensation Plan.

  
	
   

  	
   

  	
   

  
	
  Board -

  	
   

  	
  The Board of Directors of United States Steel
  Corporation.

  
	
   

  	
   

  	
   

  
	
  Committee -

  	
   

  	
  The Compensation & Organization Committee of the
  Board of Directors of United States Steel Corporation, which will consist of
  not less than three directors of the Corporation who are appointed by the
  Board of Directors and who will not be and will not have been an officer or
  an employee of the Corporation.  In
  addition, in order to be a member of the Committee, a director must be an
  “outside director” within the meaning of Section 162(m) of the Internal
  Revenue Code of 1986, as amended (the “Code”), and the regulations
  thereunder.

  
	
   

  	
   

  	
   

  
	
  Corporation -

  	
   

  	
  United States Steel Corporation, together with any
  80% or more owned subsidiary companies.

  
	
   

  	
   

  	
   

  
	
  Participant -

  	
   

  	
  A senior executive officer who is eligible to
  receive incentive compensation under the Plan.

  



 

















 


3.               Administration


 


The Committee will administer the Plan and will make
all other determinations necessary under the Plan.  Determinations made by the Committee will be final and binding
upon Participants and their legal representatives and, in the case of deceased
Participants, upon their executors, administrators, estates, beneficiaries,
heirs and legatees.  The terms and
provisions of the Plan will be construed under and controlled by the law of the
Commonwealth of Pennsylvania.


 


4.               Participants


 


Participants in the Plan are employees who served the
Corporation  in one of the positions listed below for at least a portion
of the year for which Awards are made:


 


	
   

  	
  Chairman

  Chief Executive Officer

  President

  Vice Chairmen

  Chief Operating Officer

  Chief Financial Officer

  Chief Legal Officer

  Executive Vice Presidents

  Senior Vice Presidents

  



 


Awards made to individuals who die (in which case the
Award will be made to the estate of the Participant) or retire during the year
will be prorated based on the period of active employment.  An employee who is a participant in any
other cash incentive plan for a year or portion thereof may not participate in
the Plan for the same year or portion thereof.


 


5.               Determination of
Awards


 


Each Award granted under the Plan will be based upon
the performance of the Corporation. 
Performance will be evaluated using the specific performance measures
outlined in the table below.  The
Committee has the authority to adopt, in accordance with regulations
established under the Code, applicable target levels under these performance measures
and the amounts to be awarded for attaining these target levels.


 


The Committee reserves the right to reduce the amount
of an Award or eliminate an Award that would otherwise be payable to a
Participant under the Plan.  In no event
will the amount of an Award payable to a Participant for a year exceed $3.0
million.


 


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  Applicable Performance
  Measures

  	
   

  
	
   

  	
   

  
	
  Income From Operations

  	
   

  
	
   

  	
   

  
	
  Steel Shipments

  	
   

  
	
   

  	
   

  
	
  Worker Safety (Injury Frequency Rate)

  	
   

  
	
   

  	
   

  
	
  Toxic Emissions Improvements

  	
   

  
	
   

  	
   

  
	
  Work Force Diversity

  	
   

  
	
   

  	
   

  
	
  Common Stock Performance

  	
   

  



 


6.               Payment of
Awards


 


Awards can be paid under the Plan only after the
Committee certifies in writing that the applicable performance measures have
been satisfied.


 


The Compensation Committee may permit deferral of
receipt of all or any portion of an Award granted under the Plan for such
period and under such conditions as the Committee may determine, including the
payment of interest at a reasonable rate.


 


No Award will be paid to a Participant who quits or is
discharged prior to payment of an Award.


 


Unless receipt is deferred, an Award will be paid in
cash as soon as practicable following the determination of Awards.  Awards are subject to income and payroll tax
withholding.


 


Awards will not be considered as part of the
Participant’s salary and will not be used in the calculation of any other pay,
allowance or benefit except for provisions as stated under the Supplemental
Pension Program.


 


7.               Effective Date


 


Subject to approval by a majority of votes present in
person or represented by proxy and entitled to vote on October 25, 2001, this
Plan will have an effective date of January 1, 2002.


 


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