Exhibit 10(j)
Mr. John P. Surma
2006 Hycroft Drive
Pittsburgh, PA 15241
December 21, 2001
Dear John,
In furtherance of your employment letter dated January 27, 1997, and in
consideration for your agreeing to act as Vice Chairman of United States Steel
Corporation effective January 1, 2002 (or such later date on which the USX
Corporation Board of Directors approves the restructure of USX), USX
Corporation, renamed Marathon Oil Corporation effective upon the USX restructure
("Marathon"), United States Steel LLC ("Steel"), Marathon Ashland Petroleum LLC
("MAP"), Speedway SuperAmerica LLC ("SSA"), and their successors (collectively,
the "Corporation") agree to provide the non-qualified benefit supplements
outlined in Section A below. The supplements payable under this letter agreement
("Agreement") are in addition to the pension and savings benefits and
non-qualified deferred compensation that you are otherwise entitled to as an
executive employee of the Corporation.
Unless you elect otherwise in accordance with Section B below, the supplements
payable under this Agreement shall be paid by Steel and Marathon in the form of
a lump sum distribution within 90 days of the date of your termination of
employment from all employers of the Corporation (or, if earlier, the date of
your death). Any such lump sum distribution shall be calculated in the same
manner as it would have been calculated had it been made under the Steel or
Marathon pension plan, as applicable. If you die prior to receipt of such lump
sum, such lump sum will be paid to your surviving spouse or to your estate if
there is no surviving spouse.
A. Pension and Savings Benefits - Attributable to Bonus Service Steel and
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Marathon shall provide non-qualified benefit supplements equal to the
difference between (1) the Adjusted Benefits, and (2) the Actual Benefits,
as outlined below.
(1) Adjusted Benefits
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The term "Adjusted Benefits" shall mean the pension (and surviving
spouse and survivor) or savings benefits that would be provided to you
under the Steel Plans and the Marathon Plans specified in Exhibit A
attached if your actual continuous service with the Corporation is
adjusted to reflect an increase of fifteen (15) years of continuous
service. As outlined in Exhibit A, such bonus years will be used for
purposes of determining eligibility and vesting for both the Steel
Plans and Marathon Plans. For benefit accrual purposes, the fifteen
bonus years of service will be allocated between Steel and Marathon
(and their plans) based upon the ratio of the number of months of
service you have worked for Steel or Marathon, respectively, as
compared to the combined number of months of service you have worked
for Steel and Marathon as of the determination date.
Solely for purposes of determining the above-described allocation
ratio, years of service with USX prior to the USX restructure will be
counted as service for Steel and years of service with MAP and SSA
shall be counted as service for Marathon. The determination date shall
be the date of your termination of employment (or, if earlier, the
date of your death). A partial month of service shall be counted as a
month if it includes at least 15 days of service.
(2) Actual Benefit
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The term "Actual Benefits" shall mean the pension (and surviving
spouse and survivor) and savings benefits that are provided to you
under the Steel Plans and the Marathon Plans specified in Exhibit A as
of the determination date.
For purposes of determining the amounts in (1) and (2) above, benefits will
be based upon the amount of immediate benefit payable in the form of a lump
sum distribution under the terms of the applicable plan.
B. Alternative Forms of Benefit
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You may receive all or a portion of the supplements payable by Steel or
Marathon under this Agreement in one or more alternative forms of benefit
if you make an election to do so at least one year prior to the date of
your retirement from the Corporation (or, if earlier, from the date of your
death). Any alternative form of benefit must be approved by the Corporation
and may include, for example, the alternatives outlined below. To be valid,
any such election must be received in writing and approved by the Vice
President-Employee Relations of Steel and/or Marathon, as applicable.
(1) Installments
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In accordance with the terms of a valid election, the benefit payable
under this Agreement may be paid either:
(a) in full on February 1 of the year following the year in which you
retire, or
(b) in up to ten annual installments with the first annual
installment payable within 90 days following the date of your
retirement and the succeeding installments payable on the next
anniversary(ies) of the first payment date.
Interest would accrue and be payable on the balance due at the rate
used to determine the actuarially equivalent lump sum value of your
benefit under the Steel or Marathon pension plan, as applicable. If
you die prior to receipt of the remaining installments, such remaining
installments shall be paid to your surviving spouse or to your estate
if there is no surviving spouse.
Subject to a 2% penalty, you may elect to accelerate the payment of
all remaining installments to a date prior to the scheduled date. If
such an election is made, the accelerated payment would be reduced by
an amount equal to 2% of the amounts accelerated (including interest).
Such an election for acceleration of any balance due will be valid
only if it is filed in writing with the appropriate Vice President
-Employee Relations at least 20 days prior to the date payment is
requested.
(2) Split Dollar Life Insurance
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In accordance with the terms of a valid election, you may waive your
right to all or a portion of the benefits payable by Steel and/or
Marathon under this Agreement in return for split dollar life
insurance coverage under terms to be subsequently determined by Steel
or Marathon.
C. Deferred Compensation Arrangements
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As with other similarly situated former employees, Marathon agrees that you
will be treated the same as an employee transferred to an employer within
the Marathon Oil Corporation controlled group of corporations for purposes
of the MAP and SSA Deferred Compensation Arrangements outlined in Exhibit B
attached. In this regard, no distributions under these Arrangements will be
permitted or required solely as a result of the separation of USX
Corporation.
Consistent with the terms of the January 27, 1997 letter agreement, Marathon
agrees to provide the non-qualified benefit supplement under this Agreement that
is payable by Steel to the extent, if any, that such supplement is not paid by
Steel within 60 days of the due date. In such event, Marathon shall pay such
unpaid portion within 60 days of the date that you notify Marathon that Steel
has failed to satisfy its obligation under this Agreement.
For your information, attached as Exhibit B is a list of the pension and savings
plans and non-qualified deferred compensation arrangements in which you are
currently participating.
Sincerely,
/s/ T.J. Usher
T.J. Usher
Agreed to: /s/ John P. Surma December 21, 2001
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John P. Surma
Exhibit A
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John P. Surma Letter Agreement - December 21, 2001
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Application of Bonus Service to Steel and Marathon Plans (and their successors)
Adjusted Benefit under Letter Agreement
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Plans Eligibility and Vesting Benefit Accrual
- --------------------------------------------------- ------------------------------ ----------------------------------------
Steel Plans
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USS Plan for Non-Union Employee Pension Benefits 15 years of bonus service Steel's pro rata portion/1/ of
15 bonus years
USS Corporation Non-Tax Qualified Pension Plan 15 years of bonus service Steel's pro rata portion of
15 bonus years
USS Corporation Executive Management
Supplemental Pension Program 15 years of bonus service Steel's pro rata portion of
15 bonus years
USS Corporation Supplemental Thrift Program 15 years of bonus service
(provides higher Co. match) No impact
Marathon Plans
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Retirement Plan of Marathon Oil Company 15 years of bonus service No impact. (Marathon's pro rata
portion of 15 bonus years is used in
hypothetical MAP Ret. Plan unreduced
for Marathon Retirement Plan offset)/2/
Marathon Oil Company Excess Benefits Plan 15 years of bonus service No impact
Refining, Marketing, and Transportation Subplan of
Marathon Ashland Petroleum Retirement Plan 15 years of bonus service Marathon's pro rata portion of
15 bonus years
Marathon Ashland Petroleum Excess Benefits Plan 15 years of bonus service Marathon's pro rata portion of
15 bonus years
Retail Subplan of Marathon Ashland Petroleum Plan
- Petroleum Marketing Legacy Provisions 15 years of bonus service No impact
15 years of bonus service No impact on number of accrual years
- Pension Equity Provisions (provides higher accrual rate)
Speedway SuperAmerica Excess Benefits Plan 15 years of bonus service No impact
- ----------
/1 Pro rata portion is determined as of the determination date based upon the
ratio of the number of months of service for Steel (including pre-2002 USX) or
Marathon, respectively as compared to the combined number of months of service
for Steel and Marathon. Determination data is the date of retirement (or, if
earlier, date of death)./
/2 The term"Marathon's pro rata portion" refers to the portion allocable
to service with Marathon, MAP, and SSA./
Exhibit B
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John P. Surma - Applicable Pension and Savings Plans and
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Deferred Compensation Arrangements (and their successors)
Summary of Benefits
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Estimated Lump Active
Plans Sum Value-7/1/01 Participation Explanation
- -------------------------------------------- --------------------- ------------- ------------------------------------
Steel Plans
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1. USS Non-Union Employee Pension Plan 0 9/01 - DB pension on non-bonus compensation
2. USS Non-Tax Qualified Pension Plan 0 9/01 - Excess/1/ not payable under Plan 1
[Non-Qual.]
3. USS Supplemental Pension Program 0 9/01 - DB Pension on bonus compensation
[Non-Qual.]
4. USS Savings Fund Plan 0 9/01 - DC savings [401(k) and 401(m)]
5. USS Supplemental Thrift Program 0 9/01 - Company match not provided under
Plan 4 [Non-Q.]
Marathon Plans
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6. MRO - Marathon Retirement Plan 54,582 2/97 - 8/98 DB pension on regular and bonus
compensation
7. MRO and MAP - Thrift Plan (See website) 2/97 - 8/98 DC savings [401(k) and 401(m)]
1/00 - 8/01
8. MRO - Excess Benefits Plan 2/97 - 8/98 Excess not payable under Plans 6 & 7
[Non-Qual.]
. Excess Defined Contribution (Thrift) 30,800
. Excess Defined Benefit (Shown in Plan 6)
9. MAP - RM&T Subplan of MAP Plan 111,345 1/00 - 8/01 DB pension on regular and bonus
compensation
10. MAP - Excess Benefits Plan 1/00 - 8/01 Excess not payable under Plans 9 & 7
[Non-Qual.]
. Excess Defined Contribution (Thrift) 35,900
. Excess Defined Benefit (Shown in Plan 9)
11. SSA - Retail Subplan of MAP Plan
- Petroleum Marketing Legacy 17,471 9/98 - 12/98 DB pension on regular and bonus
compensation
- Pension Equity Provisions 79,848 1/99 - 12/99 DB pension on regular and bonus
compensation
12. SSA - Excess Benefits Plan (Shown in Plan 11) 9/98 - 12/99 Excess not payable under Plan 11
[Non-Qual.]
Deferred Compensation Arrangements
- ----------------------------------
13. MAP - Deferred Compensation 178,100 1/00 - 8/01 Deferred income; hypothetical
Fidelity options
14. SSA - Deferred Compensation - 1998 21,200 9/98 - 12/98 Deferrals; earnings tied to
prime rate
15. SSA - Deferred Compensation - 1999 131,600 1/99 - 12/99 Deferred income; hypothetical
Fidelity options
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/1 For purposes of this chart, the term "Excess" means the amount not payable
under a qualified trust on account of Code sections 401(a)(17) and 415 (or other
Code sections)./