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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
SCHEDULE 14A
PROXY STATEMENT PURSUANT TO SECTION 14(a) OF THE
SECURITIES EXCHANGE ACT OF 1934
(Amendment No. 1)
Filed by the Registrant ☒
Filed by a party other than the Registrant ☐
Check the appropriate box:

Preliminary Proxy Statement

Confidential, for Use of the Commission Only (as permitted by Rule 14a-6(e)(2))

Definitive Proxy Statement

Definitive Additional Materials

Soliciting Material under §240.14a-12
UNITED STATES STEEL CORPORATION
(Name of Registrant as Specified In Its Charter)
(Name of Person(s) Filing Proxy Statement, if other than the Registrant)
Payment of Filing Fee (Check the appropriate box):

No fee required.

Fee paid previously with preliminary materials.

Fee computed on table in exhibit required by Item 25(b) per Exchange Act Rules 14a6(i)(1) and 0-11.

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PRELIMINARY PROXY STATEMENT — SUBJECT TO COMPLETION, DATED
FEBRUARY  23, 2024
[MISSING IMAGE: lg_usscorporation-4c.jpg]
United States Steel Corporation
600 Grant Street,
Pittsburgh, Pennsylvania 15219-2800
(412) 433-1121
[      ], 2024
Dear Fellow USS Stockholders:
Following a robust and comprehensive review of strategic alternatives, on December 18, 2023, United States Steel Corporation (which we refer to as “USS,” the “Company,” “we,” “us,” and “our”) entered into an Agreement and Plan of Merger (as it may be amended from time to time, which we refer to as the “Merger Agreement”) with Nippon Steel North America, Inc., a New York corporation (which we refer to as “Parent”), 2023 Merger Subsidiary, Inc., a Delaware corporation and a wholly owned subsidiary of Parent (which we refer to as “Merger Sub”), and, solely as provided in Section 9.13 therein, Nippon Steel Corporation, a Japanese corporation (which we refer to as “Guarantor” or “NSC”).
The Merger Agreement provides that, among other things, on the terms and subject to the conditions of the Merger Agreement, (i) Merger Sub will merge with and into the Company (which we refer to as the “Merger”), with the Company surviving the Merger as a wholly owned subsidiary of Parent, and (ii) at the effective time of the Merger (which we refer to as the “Effective Time”), each outstanding share of common stock of the Company, par value $1.00 per share (which we refer to as “USS common stock”) (excluding (a) shares of USS common stock owned by the Company or any wholly owned subsidiary of the Company as treasury stock or otherwise, but including, for the avoidance of doubt, any shares of USS common stock held by any Company Employee Plan (as defined in the Merger Agreement) or trust related thereto (other than, for the avoidance of doubt, shares of USS common stock reserved for issuance under any of the Company Equity Plans (as defined in the Merger Agreement)) or held, directly or indirectly, by Parent, Merger Sub or any wholly owned subsidiary of Parent immediately prior to the Effective Time and (b) shares of USS common stock that are issued and outstanding immediately prior to the Effective Time (other than the shares described in the foregoing clause (a)) and that are held by holders who have not voted in favor of the adoption of the Merger Agreement or consented thereto in writing and are entitled to demand and properly demand, exercise and perfect appraisal of such shares pursuant to Section 262 of the General Corporation Law of the State of Delaware) will be automatically converted into the right to receive $55.00 per share in cash, without interest (which we refer to as the “Merger Consideration”), subject to any required tax withholding.
We will hold a special meeting of our stockholders (including any adjournments or postponements thereof, which we refer to as the “Special Meeting”) in connection with the proposed Merger on [    ], 2024, at [    ] Eastern Time, via the Internet at www.virtualshareholdermeeting.com/[    ] (which we refer to as the “Special Meeting website”), where you will be able to attend the Special Meeting, vote, and submit your questions. Please note you will not be able to attend the Special Meeting physically in person. For purposes of attendance at the Special Meeting, all references in the enclosed proxy statement to “present” shall mean virtually present at the Special Meeting and all references in the enclosed proxy statement to “attend” shall mean virtually attend the Special Meeting.
The Board of Directors of the Company (which we refer to as the “Board of Directors”), after considering the factors more fully described in the enclosed proxy statement, has unanimously (i) determined that it is fair to and in the best interests of the Company and its stockholders, and declared it advisable, to enter into the Merger Agreement, (ii) authorized and approved the execution, delivery and performance of the Merger Agreement by the Company and the consummation of the transactions contemplated thereby, including the Merger, and (iii) resolved to recommend that the stockholders of the Company adopt the Merger Agreement and directed that such matter be submitted for consideration of the stockholders of the Company at the Special Meeting.
 

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At the Special Meeting, USS stockholders will be asked to consider and vote on (1) the proposal to adopt the Merger Agreement (which we refer to as the “Merger Agreement Proposal”), (2) the proposal to approve, on an advisory (non-binding) basis, the compensation that may be paid or become payable to USS’s named executive officers that is based on or otherwise relates to the Merger Agreement and the transactions contemplated by the Merger Agreement (which we refer to as the “Compensation Proposal”) and (3) any proposal to adjourn the Special Meeting, if necessary or appropriate, to solicit additional proxies if there are insufficient votes to adopt the Merger Agreement at the time of the Special Meeting (which we refer to as the “Adjournment Proposal”). The Board of Directors unanimously recommends that you vote: (1) “FOR” the Merger Agreement Proposal; (2) “FOR” the Compensation Proposal; and (3) “FOR” the Adjournment Proposal.
The enclosed proxy statement provides detailed information about the Special Meeting, the Merger Agreement and the Merger. A copy of the Merger Agreement is attached as Annex A to the proxy statement.
The proxy statement also describes the actions and determinations of the Board of Directors in connection with its evaluation of the Merger Agreement and the Merger. You should carefully read and consider the entire enclosed proxy statement and its annexes, including the Merger Agreement, as they contain important information about, among other things, the Merger and how it affects you.
Your vote is very important, regardless of the number of shares of USS common stock that you own. Because stockholders cannot take any action at the Special Meeting unless one-third of the shares of USS common stock issued and outstanding and entitled to vote thereat is represented, it is important that you attend the Special Meeting or are represented by proxy at the Special Meeting. The Merger cannot be completed unless the Merger Agreement Proposal is approved by the affirmative vote of the holders of at least a majority of the outstanding shares of USS common stock entitled to vote thereon. Whether or not you plan to attend the Special Meeting, please complete, date, sign and return, as promptly as possible, the enclosed proxy card in the accompanying postage-prepaid reply envelope, or submit your proxy by telephone or the Internet (in accordance with the instructions detailed in the section of this proxy statement entitled “The Special Meeting — Voting at the Special Meeting”). If your shares of USS common stock are held in “street name” by your bank, broker or other nominee, your bank, broker or other nominee will be unable to vote your shares of USS common stock without instructions from you. You should instruct your bank, broker or other nominee to vote your shares of USS common stock in accordance with the procedures provided by your bank, broker or other nominee. If your shares of USS common stock are held in your name and you fail to return your proxy card, submit your proxy by telephone or via the Internet or vote virtually at the Special Meeting, or if your shares of USS common stock are held in “street name” by your bank, broker or other nominee and you fail to instruct your bank, broker or other nominee to vote your shares of USS common stock, then this will have the same effect as a vote “AGAINST” the Merger Agreement Proposal.
If you have any questions or need assistance voting your shares of USS common stock, please contact USS’s proxy solicitor in connection with the Special Meeting:
INNISFREE M&A INCORPORATED
501 Madison Avenue, 20th Floor
New York, NY 10022
Stockholders May Call Toll-Free: (877) 825-8621
Brokers May Call Collect: (212) 750-5833
On behalf of the Board of Directors, we thank you for your support and appreciate your consideration of these matters.
David B. Burritt David S. Sutherland
President & CEO Board Chair
Neither the Securities and Exchange Commission nor any state securities regulatory agency has approved or disapproved the Merger, passed upon the merits or fairness of the Merger or passed upon the adequacy or accuracy of the disclosure in this document. Any representation to the contrary is a criminal offense.
The accompanying proxy statement is dated [    ], 2024, and, together with the enclosed form of proxy card, is first being mailed to USS stockholders on or about [    ], 2024.
 

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PRELIMINARY PROXY STATEMENT — SUBJECT TO COMPLETION, DATED
FEBRUARY 23, 2024
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United States Steel Corporation
600 Grant Street,
Pittsburgh, Pennsylvania 15219-2800
(412) 433-1121
NOTICE OF SPECIAL MEETING OF STOCKHOLDERS
TO BE HELD ON [           ], 2024
Notice is hereby given that a special meeting (including any adjournments or postponements thereof, which we refer to as the “Special Meeting”) of stockholders of United States Steel Corporation, a Delaware corporation (which we refer to as “USS,” the “Company,” “we,” “us,” and “our”), will be held virtually via live webcast on [           ], 2024, beginning at [      ] Eastern Time (unless the Special Meeting is adjourned or postponed). USS stockholders will be able to attend and vote at the Special Meeting by visiting www.virtualshareholdermeeting.com/[      ] (which we refer to as the “Special Meeting website”). For purposes of attendance at the Special Meeting, all references in the enclosed proxy statement to “present” shall mean virtually present at the Special Meeting and all references in the enclosed proxy statement to “attend” shall mean virtually attend the Special Meeting. You will not be able to attend the Special Meeting in person.
The Special Meeting is being held for the following purposes:
1.
To consider and vote on the proposal to adopt the Agreement and Plan of Merger, dated as of December 18, 2023 (as it may be amended from time to time, which we refer to as the “Merger Agreement”), by and among USS, Nippon Steel North America, Inc., a New York corporation (which we refer to as “Parent”), 2023 Merger Subsidiary, Inc., a Delaware corporation and a wholly owned subsidiary of Parent (which we refer to as “Merger Sub”), and, solely as provided in Section 9.13 therein, Nippon Steel Corporation, a Japanese corporation (which we refer to as “Guarantor” or “NSC”). Pursuant to the terms of the Merger Agreement, subject to the terms and conditions set forth therein, Merger Sub will merge with and into USS (which we refer to as the “Merger”), with USS continuing as the surviving corporation in the Merger and as a wholly owned subsidiary of Parent (which we refer to as the “Merger Agreement Proposal”);
2.
To consider and vote on the proposal to approve, on an advisory (non-binding) basis, the compensation that may be paid or become payable to USS’s named executive officers that is based on or otherwise relates to the Merger Agreement and the transactions contemplated by the Merger Agreement (which we refer to as the “Compensation Proposal”); and
3.
To consider and vote on any proposal to adjourn the Special Meeting, if necessary or appropriate, to solicit additional proxies if there are insufficient votes to adopt the Merger Agreement at the time of the Special Meeting (which we refer to as the “Adjournment Proposal”).
Only USS stockholders of record as of the close of business on [           ], 2024, are entitled to notice of the Special Meeting and to vote at the Special Meeting.
The Board of Directors unanimously recommends that you vote: (1) “FOR” the Merger Agreement Proposal; (2) “FOR” the Compensation Proposal; and (3) “FOR” the Adjournment Proposal.
Whether or not you plan to attend the virtual Special Meeting, please complete, date, sign and return, as promptly as possible, the enclosed proxy card in the accompanying prepaid reply envelope or grant your proxy electronically over the Internet or by telephone (in accordance with the instructions detailed in the section of this proxy statement entitled “The Special Meeting — Voting at the Special Meeting”). If you
 

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attend the Special Meeting and vote thereat, your vote will revoke any proxy that you have previously submitted. If you hold your shares in “street name,” you should instruct your bank, broker or other nominee how to vote your shares in accordance with the voting instruction form that you will receive from your bank, broker or other nominee. Your bank, broker or other nominee cannot vote on any of the proposals, including the Merger Agreement Proposal, without your instructions.
If you complete, date, sign and mail your proxy card without indicating how you wish to vote, your proxy will be counted as a vote “FOR” the Merger Agreement Proposal, “FOR” the Compensation Proposal and “FOR” the Adjournment Proposal.
By Order of the Board of Directors,
Megan Bombick
Secretary
United States Steel Corporation
Pittsburgh, Pennsylvania
Dated: [           ], 2024
 

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YOUR VOTE IS IMPORTANT
WHETHER OR NOT YOU PLAN TO ATTEND THE SPECIAL MEETING, WE ENCOURAGE YOU TO SUBMIT YOUR PROXY AS PROMPTLY AS POSSIBLE: (1) BY TELEPHONE; (2) OVER THE INTERNET; OR (3) BY COMPLETING, DATING AND SIGNING THE ENCLOSED PROXY CARD AND RETURNING IT IN THE POSTAGE-PAID ENVELOPE PROVIDED. You may revoke your proxy or change your vote before the Special Meeting in the manner described in the enclosed proxy statement.
If you fail to (1) return your proxy card, (2) grant your proxy electronically over the Internet or by telephone or (3) attend the Special Meeting, your shares will not be counted for purposes of determining whether a quorum is present at the Special Meeting and, if a quorum is present, will have the same effect as a vote “AGAINST” the Merger Agreement Proposal but, assuming a quorum is present, will have no effect on the Compensation Proposal or the Adjournment Proposal.
You should carefully read and consider the entire accompanying proxy statement and its annexes, including the Merger Agreement, along with all of the documents incorporated by reference into the accompanying proxy statement, as they contain important information about, among other things, the Merger and how it affects you. If you have any questions concerning the Merger Agreement, the Merger, the Special Meeting or the accompanying proxy statement, would like additional copies of the accompanying proxy statement or need help voting your shares of USS common stock, please contact our proxy solicitor:
INNISFREE M&A INCORPORATED
501 Madison Avenue, 20th Floor
New York, NY 10022
Stockholders May Call Toll-Free: (877) 825-8621
Brokers May Call Collect: (212) 750-5833
 

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SUMMARY
This summary highlights selected information from this proxy statement related to the Merger and the Merger Agreement (as defined below) and may not contain all of the information that is important to you. To understand the Merger and the Merger Agreement more fully and for a more complete description of the legal terms of the Merger and the Merger Agreement, you should carefully read and consider this entire proxy statement and the annexes to this proxy statement, including the Merger Agreement, along with all of the documents to which we refer in this proxy statement, as they contain important information about, among other things, the Merger and how it affects you. You may obtain the information incorporated by reference in this proxy statement without charge by following the instructions in the section of this proxy statement entitled “Where You Can Find More Information.” A copy of the Merger Agreement is attached as Annex A to this proxy statement. You should carefully read and consider the entire Merger Agreement, which is the legal document that governs the Merger.
Except as otherwise specifically noted in this proxy statement, “USS,” “we,” “our,” “us,” the “Company” and similar words refer to United States Steel Corporation. Throughout this proxy statement, we refer to Nippon Steel North America, Inc. as “Parent,” 2023 Merger Subsidiary, Inc. as “Merger Sub,” Nippon Steel Corporation as “Guarantor” or “NSC,” and USS, Parent, and Merger Sub each as a “party” and together as the “parties.” In addition, throughout this proxy statement we refer to the Agreement and Plan of Merger, dated as of December 18, 2023 (as it may be amended from time to time), by and among USS, Parent, Merger Sub, and solely as provided in Section 9.13 therein, Guarantor, as the “Merger Agreement”; USS common stock, par value $1.00 per share, as “USS common stock”; and the holders of shares of USS common stock as “USS stockholders.” Unless indicated otherwise, any other capitalized term used herein but not otherwise defined herein has the meaning assigned to such term in the Merger Agreement.
Parties Involved in the Merger (see page 30)
United States Steel Corporation
USS, with operations in the United States of America (“U.S.”) and Central Europe, is transforming itself into a customer-centric, world-competitive, Best for All® steelmaker by investing in the competitive advantages that differentiate USS in its customers’ eyes. USS is executing on its strategy by investing where it has distinct cost and capability advantages so that it is a superior steel solutions provider for its customers. By offering the new steels that its customers are increasingly demanding, USS aims to achieve world-competitive positioning in strategic, high-margin end markets and deliver high-quality, value-added products and innovative solutions utilizing a lower carbon footprint than previously available through its traditional integrated steelmaking model.
During 2023, USS had annual raw steel production capability of 22.4 million net tons (17.4 million tons in North America and 5.0 million tons in Europe). USS performs a wide range of applied research, development and technical support functions at facilities in Pennsylvania, Michigan, Texas and Slovakia. USS supplies customers throughout the world primarily in the automotive, construction, consumer (packaging and appliance), electrical, industrial equipment, service center/distribution, structural tubing and energy (oil country tubular goods (OCTG) and line pipe) markets. According to the World Steel Association’s latest published statistics, USS is the third largest U.S. based steel producer and the twenty-seventh largest steel producer in the world. USS is a Delaware corporation established in 1901. USS’s principal executive offices are located at 600 Grant Street, Pittsburgh, Pennsylvania 15219, and its telephone number is (412) 433-1121. USS common stock is listed on the New York Stock Exchange (which we refer to as the “NYSE”) and Chicago Stock Exchange (which we refer to as the “CSE”) under the symbol X.
Nippon Steel Corporation
NSC is Japan’s largest steelmaker and one of the world’s leading steel manufacturers. NSC has a global crude steel production capacity of approximately 66 million tons and employs approximately 100,000 people throughout the world. NSC’s primary manufacturing base is in Japan and the company has presence in 15 additional countries. NSC has focused on building cooperative and good relationships with employees, labor unions, suppliers, customers, and communities in the United States. As the ‘Best Steelmaker with World-Leading Capabilities,’ NSC pursues world-leading technologies and manufacturing capabilities and
 
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contributes to society by providing excellent products and services. NSC’s principal executive offices are located at 2-6-1 Marunouchi, Chiyoda-ku, Tokyo 100-8071, Japan, and its telephone number is +81-3-6867-4111. NSC is a publicly traded company listed on the Tokyo Stock Exchange, the Sapporo Securities Exchange, the Nagoya Stock Exchange and the Fukuoka Stock Exchange.
Nippon Steel North America, Inc.
Parent is a wholly owned subsidiary of NSC. Parent is a holding company through which NSC owns businesses that conduct operations in the United States. Parent’s principal executive offices are located at 920 Memorial City Way, Suite 700, Houston, Texas 77024, and its telephone number is (713) 654-7111.
2023 Merger Subsidiary, Inc.
Merger Sub is a wholly owned subsidiary of Parent and was incorporated on December 15, 2023, solely for the purpose of engaging in the transactions contemplated by the Merger Agreement, and has not engaged in any activities other than in connection with or as contemplated by the Merger Agreement.
The Merger (see page 93)
On the terms and subject to the conditions of the Merger Agreement, and in accordance with the General Corporation Law of the State of Delaware (which we refer to as the “DGCL”), Merger Sub will merge with and into USS (which we refer to as the “Merger”), the separate corporate existence of Merger Sub will cease and USS will continue its corporate existence under the DGCL as the surviving corporation in the Merger (which we refer to as the “Surviving Corporation”). As a result of the Merger, USS common stock will no longer be publicly traded and will be delisted from the NYSE and the CSE. In addition, USS common stock will be deregistered under the Securities Exchange Act of 1934, as amended (which we refer to as the “Exchange Act”), and USS, and from and after the Effective Date, the Surviving Corporation, will no longer file periodic or other reports with the United States Securities and Exchange Commission (which we refer to as the “SEC”). If the Merger is completed, you will have the right to receive the Merger Consideration, but you will no longer have any rights as a stockholder of USS (except that stockholders who properly and validly exercise their appraisal rights will have the right to receive a payment for the “fair value” of their shares as determined under an appraisal proceeding as contemplated by Delaware law, as described in the section of this proxy statement entitled “Proposal 1: Adoption of the Merger Agreement —  Appraisal Rights”). The Merger will become effective at such time as the certificate of merger with respect to the Merger has been duly filed with the Delaware Secretary of State or at such later date or time as may be agreed by USS and Parent and specified in the certificate of merger in accordance with the DGCL (which we refer to as the “Effective Time”).
Merger Consideration (see page 94)
USS Common Stock
At the Effective Time, by virtue of the Merger and without any action on the part of USS, Parent, Merger Sub, or the holders of any securities of USS or Merger Sub, each share of USS common stock outstanding immediately prior to the Effective Time (excluding (a) each share that is owned by USS as treasury stock or otherwise, but including, for the avoidance of doubt, any shares of USS common stock held by any Company Employee Plan or trust related thereto (other than, for the avoidance of doubt, shares of common stock reserved for issuance under any of the Company Equity Plans) or held, directly or indirectly, by Parent or Merger Sub or any wholly owned subsidiary of Parent immediately prior to the Effective Time, which will be cancelled and will cease to exist, and (b) shares that are issued and outstanding immediately prior to the Effective Time (other than the shares described in the foregoing clause (a)) and that are held by holders of such Shares who have not voted in favor of the adoption of the Merger Agreement or consented thereto in writing and are entitled to demand and properly demand appraisal of such Shares, as applicable, pursuant to, and who have properly exercised and perfected their demands for appraisal rights under and comply in all respects with, Section 262 of the DGCL (which we refer to collectively, as the “Excluded Shares”)) will be converted automatically into the right to receive $55.00 in cash (which we refer to as the “Merger Consideration”), subject to any required tax withholding.
 
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On the Closing Date, Parent will deposit (or cause to be deposited) with a designated paying agent a cash amount that is sufficient to pay the aggregate Merger Consideration in exchange for all shares of USS common stock outstanding immediately prior to the Effective Time (other than the Excluded Shares). For more information, please see the section of this proxy statement entitled “The Merger Agreement — Exchange and Payment Procedures.”
After the Merger is completed, you will have the right to receive the Merger Consideration in respect of each share of USS common stock that you own (other than any Excluded Shares) immediately prior to the Effective Time (subject to any required tax withholding), but you will no longer have any rights as a USS stockholder (except that USS stockholders who properly and validly exercise, perfect and do not withdraw their appraisal rights will not be entitled to receive the Merger Consideration and instead will have a right to receive payment of the “fair value” of their shares as determined pursuant to an appraisal proceeding, as contemplated by the DGCL). For more information, please see the section of this proxy statement entitled “Proposal 1: Adoption of the Merger Agreement — Appraisal Rights.”
Treatment of USS Equity Awards
Pursuant to the Merger Agreement, immediately prior to the Effective Time, and without any action on the part of Parent, USS or any other person, each award of restricted stock units representing the right to be issued shares of USS common stock or cash valued by reference to the value of shares of USS common stock that is subject to time-based vesting restrictions (we refer to each such award as a “Company RSU Award”) (or portion thereof) that is outstanding immediately prior to the Effective Time will, to the extent not vested, automatically become fully vested and be cancelled and converted into the right of the holder of each such Company RSU Award (or portion thereof) to receive (subject to any applicable withholdings) an amount in cash equal to the product of (i) the Merger Consideration, multiplied by (ii) the total number of shares of USS common stock subject to such Company RSU Award (or portion thereof) immediately prior to the Effective Time, together with any accrued and unpaid dividends corresponding to such vested Company RSU Award (or portion thereof).
Pursuant to the Merger Agreement, immediately prior to the Effective Time, and without any action on the part of Parent, USS or any other person, each award of restricted stock units representing the right to be issued shares of USS common stock or cash valued by reference to the value of shares of USS common stock that is subject to performance-based vesting restrictions (we refer to each such award as a “Company PSU Award”) (or portion thereof) that is outstanding immediately prior to the Effective Time will, to the extent not vested, automatically become fully vested and be cancelled and converted into the right of the holder of each such Company PSU Award (or portion thereof) to receive (subject to any applicable withholdings) an amount in cash equal to the product of (i) the Merger Consideration, multiplied by (ii) the total number of shares of USS common stock subject to such Company PSU Award (or portion thereof) immediately prior to the Effective Time, together with any accrued and unpaid dividends corresponding to such vested Company PSU Award (or portion thereof). The total number of shares of USS common stock subject to a Company PSU Award will be based on actual performance for any portion of a Company PSU Award that has been earned by its terms as of the Effective Time but has not yet vested. For any portion of a Company PSU Award that has not been earned by its terms as of the Effective Time, the total number of shares of USS common stock subject to a Company PSU Award will be based on deemed achievement of the greater of (1) maximum performance, if required by the applicable award agreement as of the date of the Merger Agreement, (2) actual performance or (3) target performance through the Effective Time.
Pursuant to the Merger Agreement, immediately prior to the Effective Time, and without any action on the part of Parent, USS or any other person, each award of options to purchase shares of USS common stock (we refer to each such award as a “Company Option Award”) (or portion thereof) that is outstanding immediately prior to the Effective Time will, to the extent not vested, automatically become fully vested and be cancelled, and converted into the right of the holder of each such Company Option Award to receive (subject to any applicable withholdings) an amount in cash equal to the product of (i) the positive difference, if any, of the Merger Consideration minus the applicable exercise price of such Company Option Award, multiplied by (ii) the number of shares of USS common stock subject to such Company Option Award immediately prior to the Effective Time (assuming full vesting for any Company Option Award (or portion thereof) that is subject to performance-based vesting). If the exercise price of any Company Option
 
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Award (whether vested or unvested) is equal to or greater than the Merger Consideration, such Company Option Award will be cancelled without payment and will have no further force or effect.
Each deferred restricted stock unit representing the right to be issued a share of USS common stock or cash valued by reference to the value of shares of USS common stock under USS’s Deferred Compensation Program for Non-Employee Directors (each such award, which we refer to as “Company DSU Award”), will be converted into the right to receive an amount in cash equal to the Merger Consideration or such other amount contemplated by the Company DSU Award and settled in accordance with the terms thereof.
For more information, please see the section of this proxy statement entitled “The Merger Agreement —  Merger Consideration — Treatment of USS Equity Awards.”
Material U.S. Federal Income Tax Consequences of the Merger (see page 87)
The exchange of USS common stock for cash pursuant to the Merger will be a taxable transaction for U.S. federal income tax purposes. Accordingly, a U.S. Holder (as defined in the section of this proxy statement entitled “Proposal 1: Adoption of the Merger Agreement — Material U.S. Federal Income Tax Consequences of the Merger”) who exchanges shares of USS common stock for cash in the Merger generally will recognize gain or loss in an amount equal to the difference, if any, between the amount of cash that such U.S. Holder receives in the Merger and such U.S. Holder’s adjusted tax basis in the shares of USS common stock surrendered pursuant to the Merger by such U.S. Holder.
A Non-U.S. Holder (as defined in the section of this proxy statement entitled “Proposal 1: Adoption of the Merger Agreement — Material U.S. Federal Income Tax Consequences of the Merger”) generally will not be subject to U.S. federal income tax with respect to the exchange of shares of USS common stock for cash in the Merger unless such Non-U.S. Holder has certain connections to the United States, but may be subject to backup withholding tax unless the Non-U.S. Holder complies with certain certification procedures or otherwise establishes a valid exemption from backup withholding tax.
This proxy statement contains a general discussion of certain material U.S. federal income tax consequences of the Merger. This description does not address any non-income tax consequences, nor does it address state, local, non-U.S. or other tax consequences or the consequences to holders who are subject to special treatment under U.S. federal tax law. Consequently, you should consult your tax advisor to determine the particular tax consequences to you of the Merger.
Appraisal Rights (see page 27)
If the Merger is consummated, USS stockholders who continuously hold shares of USS common stock through the Effective Time, do not vote in favor of the adoption of the Merger Agreement, validly and properly demand appraisal of their shares of USS common stock and do not withdraw their demands or otherwise lose their rights to seek appraisal will be entitled to seek appraisal of their shares of USS common stock in connection with the Merger under Section 262 of the DGCL. This means that USS stockholders who perfect their appraisal rights, do not thereafter withdraw their demand for appraisal, and follow the procedures in the manner prescribed by Section 262 of the DGCL may be entitled to have their shares of USS common stock appraised by the Delaware Court of Chancery and to receive payment in cash of the “fair value” of their shares of USS common stock, exclusive of any elements of value arising from the accomplishment or expectation of the Merger, as determined by the Delaware Court of Chancery, together with interest to be paid on the amount determined to be fair value, if any (or in certain circumstances described in further detail in the section of this proxy statement entitled “Proposal 1: Adoption of the Merger Agreement — Appraisal Rights,” on the difference between the amount determined to be the fair value and the amount paid by the Surviving Corporation in the Merger to each USS stockholder entitled to appraisal prior to the entry of judgment in any appraisal proceeding). Due to the complexity of the appraisal process, USS stockholders who wish to seek appraisal of their shares are encouraged to review Section 262 of the DGCL carefully and to seek the advice of legal counsel with respect to the exercise of appraisal rights.
USS stockholders considering seeking appraisal should be aware that the fair value of their shares of USS common stock as determined pursuant to Section 262 of the DGCL could be more than, the same as
 
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or less than the value of the consideration that they would receive pursuant to the Merger Agreement if they did not seek appraisal of their shares.
To exercise your appraisal rights, you must: (a) submit a written demand for appraisal to USS before the vote is taken on the adoption of the Merger Agreement; (b) not submit a proxy or otherwise vote in favor of the proposal to adopt the Merger Agreement; (c) continue to hold your shares of USS common stock of record through the Effective Time; and (d) strictly comply with all other procedures for exercising appraisal rights under Section 262 of the DGCL. Your failure to follow exactly the procedures specified under Section 262 of the DGCL may result in the loss of your appraisal rights. In addition, the Delaware Court of Chancery will dismiss appraisal proceedings in respect of the Merger unless certain stock ownership conditions are satisfied by the USS stockholders seeking appraisal. The DGCL requirements for exercising appraisal rights are described in further detail in the section of this proxy statement entitled “Proposal 1: Adoption of the Merger Agreement — Appraisal Rights,” which is qualified in its entirety by Section 262 of the DGCL, the relevant section of the DGCL regarding appraisal rights. A copy of Section 262 of the DGCL is attached to this proxy statement as Annex D and may be accessed without subscription or cost at the Delaware Code Online (available at: https://delcode.delaware.gov/title8/c001/sc09/index.html#262) and is incorporated herein by reference. If you hold your shares of USS common stock through a bank, broker or other nominee and you wish to exercise appraisal rights, you may make a written demand for appraisal in your own name, but you must satisfy the conditions set forth above and your written demand must also reasonably identify the holder of record of the shares for which demand is made, be accompanied by documentary evidence of your beneficial ownership of stock (such as a brokerage or securities account statement containing such information or a letter from a broker or other record holder of such shares confirming such information) and a statement that such documentary evidence is a true and correct copy of what it purports to be, and provide an address at which you consent to receive notices given by the surviving corporation under Section 262 of the DGCL and to be set forth on the verified list required by Section 262(f) of the DGCL. For more information, please see the section of this proxy statement entitled “Proposal 1: Adoption of the Merger Agreement — Appraisal Rights.”
Regulatory Approvals Required for the Merger (see page 90)
U.S. Regulatory Clearances
Under the Merger Agreement, the Merger cannot be completed until the waiting period applicable to the Merger under the Hart-Scott-Rodino Antitrust Improvements Act of 1976, as amended, and the rules and regulations promulgated thereunder (which we refer to as the “HSR Act”), has expired or been terminated and any and all agreements with governmental entities with competent jurisdiction over USS or Parent pursuant to which such parties have agreed not to consummate the transactions contemplated by the Merger Agreement under the HSR Act have expired or have been terminated.
Under the Merger Agreement, the Merger cannot be completed until one of the following events related to the Committee on Foreign Investment in the United States (which we refer to as “CFIUS”) has occurred (collectively, defined as “CFIUS Approval”): (a) CFIUS has issued a written notice to the parties that it has concluded all action pursuant to Section 721 of the Defense Production Act of 1950, as amended and codified at 50 U.S.C. Section 4565, and all implementing regulations thereof (which we refer to as “Section 721”) and has determined that there are no unresolved national security concerns with respect to the transactions contemplated by the Merger Agreement; or (b) CFIUS has sent a report to the President of the United States requesting the President’s decision and either (i) the President has announced a decision not to take any action to suspend or prohibit the transactions contemplated by the Merger Agreement or (ii) the President has not taken any action within 15 days from the date the President received the report from CFIUS; or (c) CFIUS has issued a written notice that the notified transaction is not a “covered transaction” within the meaning of Section 721.
Other Regulatory Clearances
The Merger is also subject to receipt of regulatory approvals in certain other jurisdictions under their applicable regulatory laws as amended from time to time (which, together with the expiration or earlier termination of the applicable waiting period and any and all agreements with governmental entities with
 
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competent jurisdiction over USS or Parent pursuant to which such parties have agreed not to consummate the transactions contemplated by the Merger Agreement, in each case, under the HSR Act, and the CFIUS Approval, we refer to as the “Required Regulatory Approvals”).
For more information, please see the section of this proxy statement entitled “Proposal 1: Adoption of the Merger Agreement — Regulatory Approvals Required for the Merger.” In each case, the Merger cannot be completed until the parties obtain clearance or approval to consummate the Merger or the waiting or review periods applicable to the Required Regulatory Approvals have expired or been terminated. Subject to the terms and conditions of the Merger Agreement, the parties have agreed to cooperate with each other and use their reasonable best efforts to make these filings as promptly as practicable (and in the case of any and all required filings under the HSR Act, by January 30, 2024) and to take all necessary actions to achieve the Required Regulatory Approvals.
Closing Conditions (see page 118)
The obligations of the parties to consummate the Merger are subject to the satisfaction or waiver of customary conditions, including (among other conditions), the following:

the adoption of the Merger Agreement by the affirmative vote of the holders of a majority of the outstanding shares of USS common stock;

the absence of any injunction or similar charge, order, writ, judgment, decree, ruling, determination, directive, award or settlement, whether civil, criminal or administrative, by any governmental entity in the U.S. or certain specified jurisdictions with competent jurisdiction over Parent, Merger Sub or USS and the absence of any applicable U.S. federal, state or local or non-U.S. law (including common law), statute, code, treaty, convention, ordinance, rule, regulation, judgment, charge, order, writ, judgment, decree, ruling, determination, directive, award or settlement, whether civil, criminal or administrative, in each case that remains in effect and, in any case, prohibits or makes illegal the consummation of the Merger;

(a) the expiration or termination of the waiting period applicable to the consummation of the Merger and other transactions contemplated by the Merger Agreement under the HSR Act and the expiration or termination of any and all agreements with governmental entities with competent jurisdiction over USS or Parent pursuant to which such parties have agreed not to consummate the transactions contemplated by the Merger Agreement under the HSR Act, (b) CFIUS Approval shall have been obtained and (c) the receipt of all required consents and expirations or terminations of waiting or review periods (as applicable) with respect to the other Required Regulatory Approvals;

since the date of the Merger Agreement, the absence of a Company Material Adverse Effect;

the accuracy of the representations and warranties contained in the Merger Agreement (subject to certain materiality qualifiers); and

the compliance and performance by the parties, in all material respects, of their respective covenants and obligations required by the Merger Agreement to be complied with or performed by such party at or prior to the Closing.
Financing of the Merger (see page 81)
NSC has obtained debt financing commitments in respect of the funding of the Merger. The funding of the debt financing facilities, to the extent necessary, is contingent on the satisfaction of customary conditions, including (i) the execution and delivery of definitive documentation with respect to the debt financing facilities and (ii) the certification that all conditions precedent in the Merger Agreement have been satisfied or waived, other than those conditions that by their nature are to be satisfied on the Closing Date. The closing of the Merger is not conditioned upon Parent obtaining debt financing. For more information, please see the section of this proxy statement entitled “The Merger Agreement — Debt Financing.”
Guaranty (see page 113)
Guarantor has agreed to absolutely, unconditionally and irrevocably guarantee, as principal and not as surety, to USS, the Surviving Corporation and their successors and assigns the due and punctual payment
 
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and performance of each of the covenants, obligations and liabilities of Parent and Merger Sub, as applicable, under the Merger Agreement (which we refer to as the “Guaranteed Obligations”). The guaranty is one of payment and performance, not merely collection, and any breach or nonperformance of any such obligations of Merger Sub or Parent (or any of their successors or assigns) is also deemed to be a default of Guarantor. Guarantor’s obligations under the Merger Agreement are expressly limited to the Guaranteed Obligations and upon the full discharge and performance of all Guaranteed Obligations, Guarantor will no longer have any duties or obligations under the Merger Agreement.
Required Stockholder Approval (see page 24)
The affirmative vote of the holders of a majority of the outstanding shares of USS common stock entitled to vote thereon is required to approve the proposal to adopt the Merger Agreement (which we refer to as the “Merger Agreement Proposal”). As of [      ], 2024 (which we refer to as the “Record Date”), [      ] votes constitute a majority of the outstanding shares of USS common stock entitled to vote thereon. Approval of the proposal to approve, on an advisory (non-binding) basis, the compensation that may be paid or become payable to USS’s named executive officers that is based on or otherwise relates to the Merger Agreement and the transactions contemplated by the Merger Agreement (which we refer to as the “Compensation Proposal”) requires the affirmative vote of the holders of the shares of USS common stock representing a majority of the votes cast by USS stockholders present or represented by proxy at the Special Meeting. Approval of the proposal to adjourn the special meeting of USS stockholders (such meeting, which we refer to as the “Special Meeting” and such proposal, which we refer to as the “Adjournment Proposal”) requires the affirmative vote of the holders of the shares of USS common stock representing a majority of the voting power present or represented by proxy at the Special Meeting, whether or not a quorum is present. The approval of the Compensation Proposal is advisory (non-binding) and is not a condition to the completion of the Merger.
As of the Record Date, our directors and executive officers beneficially owned and were entitled to vote, in the aggregate, [      ] shares of USS common stock, representing approximately [      ]% of the shares of USS common stock outstanding as of the Record Date.
We currently expect that our directors and executive officers will vote all of their respective shares of USS common stock: (1) “FOR” the Merger Agreement Proposal; (2) “FOR” the Compensation Proposal; and (3) “FOR” the Adjournment Proposal, although none of them have entered into any agreements obligating them to do so.
The Special Meeting (see page 24)
Date, Time and Location
The Special Meeting to consider and vote on the Merger Agreement Proposal, the Compensation Proposal and, if necessary or appropriate, the Adjournment Proposal will be held virtually via live webcast on [      ], 2024, beginning at [      ] Eastern Time (unless the Special Meeting is adjourned or postponed). USS stockholders will be able to attend and vote at the Special Meeting by visiting www.virtualshareholdermeeting.com/[    ] (which we refer to as the “Special Meeting website”). For purposes of attendance at the Special Meeting, all references in this proxy statement to “present” shall mean virtually present at the Special Meeting and all references in the enclosed proxy statement to “attend” shall mean virtually attend the Special Meeting.
Record Date; Shares Entitled to Vote
You are entitled to vote at the Special Meeting if you owned shares of USS common stock at the close of business on the Record Date. Each USS stockholder shall be entitled to one vote for each such share of USS common stock owned at the close of business on the Record Date.
Quorum
As of the Record Date, there were [  ] shares of USS common stock outstanding and entitled to vote at the Special Meeting. Holders of one-third of the voting power of the outstanding shares of USS common
 
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stock entitled to vote on the Record Date present or represented by proxy at the Special Meeting will constitute a quorum at the Special Meeting.
Recommendation of the USS Board of Directors (see page 27)
The Board of Directors of USS (which we refer to as the “Board of Directors”) has unanimously: (a) determined that it is fair to and in the best interests of USS and its stockholders, and declared it advisable, to enter into the Merger Agreement, (b) authorized and approved the execution, delivery and performance of the Merger Agreement by USS and the consummation of the transactions contemplated by the Merger Agreement, including the Merger, and (c) resolved to recommend that the USS stockholders adopt the Merger Agreement and directed that such matter be submitted for consideration of the USS stockholders at the Special Meeting.
The Board of Directors unanimously recommends that you vote: (1) “FOR” the Merger Agreement Proposal; (2) “FOR” the Compensation Proposal; and (3) “FOR” the Adjournment Proposal.
Opinion of Barclays Capital Inc. (see page 54)
USS engaged Barclays Capital Inc. (which we refer to as “Barclays”) to act as a financial advisor with respect to pursuing strategic alternatives for USS, including a possible sale of USS, pursuant to an engagement letter dated October 24, 2023. At a special meeting of the Board of Directors held to evaluate the Merger, Barclays rendered its oral opinion, subsequently confirmed in writing by delivery of a written opinion dated December 18, 2023, that, as of such date and based upon and subject to the assumptions, limitations, qualifications and conditions described in Barclays’ written opinion, the Merger Consideration to be offered to the holders of USS common stock in the Merger was fair to such holders from a financial point of view, as more fully described in the section of this proxy statement entitled “Proposal 1: Adoption of the Merger Agreement — Opinion of Barclays Capital Inc.” beginning on page 54.
The full text of Barclays’ written opinion to the Board of Directors is attached as Annex B to this proxy statement. Barclays’ written opinion sets forth, among other things, the assumptions made, procedures followed, factors considered and limitations upon the review undertaken by Barclays in rendering its opinion. You are encouraged to read the opinion carefully in its entirety.
Barclays’ opinion, the issuance of which was approved by Barclays’ Fairness Opinion Committee, is addressed to the Board of Directors, addresses only the fairness, from a financial point of view, of the Merger Consideration to be offered to the holders of USS common stock and does not constitute a recommendation to any USS stockholder as to how such stockholder should vote with respect to the Merger or any other matter. The terms of the Merger were determined through arm’s-length negotiations between USS and NSC and were unanimously approved by the Board of Directors. Barclays did not recommend any specific form of consideration to USS or that any specific form of consideration constituted the only appropriate consideration for the Merger. Barclays was not requested to address, and its opinion does not in any manner address, USS’s underlying business decision to proceed with or effect the Merger, the likelihood of the consummation of the Merger, or the relative merits of the Merger as compared to any other transaction or business strategy in which USS may engage. In addition, Barclays expressed no opinion on, and its opinion does not in any manner address, the fairness of the amount or the nature of any compensation to any officers, directors or employees of any parties to the Merger, or any class of such persons, relative to the consideration to be offered to the holders of USS common stock in the Merger or otherwise. No limitations were imposed by the Board of Directors upon Barclays with respect to the investigations made or procedures followed by it in rendering its opinion. The engagement letter between USS and Barclays provides for aggregate fees of approximately $68 million in connection with the Merger, including a transaction fee of approximately $63 million upon the completion of the Merger, approximately $13 million of which was payable upon the announcement of the Merger. A $5 million fee was paid upon execution of the engagement letter between USS and Barclays for prior work performed in connection with the Merger. The engagement letter between USS and Barclays also contemplated an independence fee of $22.5 million that would have been payable solely in the event that USS did not enter into a definitive agreement with respect to a transaction by a certain date.
 
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For additional information, see the section entitled “Proposal 1: Adoption of the Merger Agreement — Opinion of Barclays Capital Inc.” beginning on page 54 of this proxy statement.
Opinion of Goldman Sachs & Co. LLC (see page 60)
At a special meeting of the Board of Directors held to evaluate the Merger, Goldman Sachs & Co. LLC (which we refer to as “Goldman Sachs”) rendered its oral opinion, subsequently confirmed in writing by delivery of a written opinion dated December 18, 2023 that, as of such date and based upon and subject to the assumptions, limitations, qualifications and conditions described in Goldman Sachs’ written opinion, the Merger Consideration to be paid to the holders (other than NSC and its affiliates) of USS common stock pursuant to the Merger Agreement was fair from a financial point of view to such holders.
The full text of the written opinion of Goldman Sachs to the Board of Directors, which sets forth assumptions made, procedures followed, matters considered and limitations on the review undertaken by Goldman Sachs in rendering its opinion, is attached as Annex C to this proxy statement. The summary of Goldman Sachs’ opinion contained in this proxy statement is qualified in its entirety by reference to the full text of Goldman Sachs’ written opinion. Goldman Sachs’ advisory services and its opinion were provided for the information and assistance of the Board of Directors in connection with its consideration of the Merger and such opinion does not constitute a recommendation as to how any holder of USS common stock should vote with respect to the Merger or any other matter. The engagement letter between USS and Goldman Sachs provides for a transaction fee of approximately $63 million upon the completion of the Merger, approximately $13 million of which was payable upon the announcement of the Merger. The engagement letter between USS and Goldman Sachs also contemplated an independence fee of $22.5 million that would have been payable solely in the event that USS did not enter into a definitive agreement with respect to a transaction by a certain date.
For more information, see “Proposal 1: Adoption of the Merger Agreement — Opinion of Goldman Sachs & Co. LLC” beginning on page 60 and the full text of the written opinion of Goldman Sachs attached as Annex C to this proxy statement.
Interests of USS’s Executive Officers and Directors in the Merger (see page 71)
USS’s executive officers and directors have certain interests in the Merger that are different from, or in addition to, those of USS stockholders. See “Proposal 1: Adoption of the Merger Agreement — Interests of USS’s Executive Officers and Directors in the Merger” for additional information about interests that USS’s executive officers and directors have in the Merger that are different than yours.
Non-Solicitation Covenant (see page 104)
During the period commencing on the date of the Merger Agreement and ending as of the earlier of the Effective Time or the valid termination of the Merger Agreement pursuant to the Merger Agreement (which we refer to as the “Pre-Closing Period”), USS has agreed that it will not, and will cause its subsidiaries not to, and will use its reasonable best efforts to cause their respective officers, directors, employees, accountants, consultants, legal counsel, financial advisors and agents and other representatives (which we refer to, collectively, as “Representatives”) not to, directly or indirectly, among other things: solicit, initiate, induce, knowingly facilitate or knowingly encourage the making or submission of, any proposal, offer, inquiry or request that constitutes, or would reasonably be expected to result in or lead to, an Alternative Proposal (as defined in the section of this proxy statement entitled “The Merger Agreement — Non-Solicitation Covenant”); or engage in, continue or otherwise participate in any negotiations or discussions with any person regarding any proposal, offer, inquiry or request that constitutes, or would reasonably be expected to result in or lead to, an Alternative Proposal; or furnish any non-public information regarding USS or any of its subsidiaries or provide access to their respective operational properties to any person relating to any proposal, offer, inquiry or request that constitutes, or would reasonably be expected to result in or lead to, an Alternative Proposal (subject to the exceptions set forth in the section of this proxy statement entitled “The Merger Agreement —  Non-Solicitation Covenant”).
USS has agreed that it will, and will cause its subsidiaries to, and will use its reasonable best efforts to cause their respective Representatives to: immediately following execution of the Merger Agreement, cease and cause to be terminated any solicitations, discussions or negotiations with any person (other than
 
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Guarantor, Parent, Merger Sub and their respective Representatives) in connection with any Alternative Proposal; terminate access to the virtual data room administered in connection with the transactions contemplated by the Merger Agreement; and promptly request that each person that has executed a confidentiality agreement within the nine-month period prior to the date of the Merger Agreement in connection with its consideration of any Alternative Proposal (other than Guarantor, Parent, Merger Sub and their respective Representatives) return or destroy all confidential information furnished by or on behalf of USS.
During the Pre-Closing Period, USS has agreed that it will (i) promptly (and in any event within twenty-four (24) hours of receipt) notify Parent of the receipt by USS or any of its subsidiaries or their respective Representatives of any proposal that constitutes, or would reasonably be expected to result in or lead to, an Alternative Proposal and (ii) thereafter keep Parent reasonably informed on a prompt (and, in any event within twenty-four (24) hours) basis of any material developments with respect to, or any material change to the terms of, any such Alternative Proposal, including by providing copies of any additional draft agreements relating to, or written proposals containing any material term of, any such Alternative Proposal received by USS, any of its affiliates or any of their respective Representatives.
Notwithstanding the foregoing, if, at any time following the date of the Merger Agreement and prior to the adoption of the Merger Agreement by the affirmative vote of the holders of a majority of the outstanding shares of USS common stock, USS receives a bona fide written Alternative Proposal which did not result from a breach of the Merger Agreement, and the Board of Directors determines in good faith, after consultation with USS’s financial advisors and outside legal counsel, that such Alternative Proposal constitutes, or could reasonably be expected to result in, a Superior Proposal (as defined in the section of this proxy statement entitled “The Merger Agreement — Non-Solicitation Covenant”) and the failure to take such action could reasonably be expected to be inconsistent with the directors’ fiduciary duties under applicable law, USS may, among other things and subject to certain requirements, furnish information, including material non-public information, to any person making such Alternative Proposal and engage in discussions or negotiations with any person with respect to the Alternative Proposal.
For more information, please see the section of this proxy statement entitled “The Merger Agreement —  Non-Solicitation Covenant.”
Prior to the adoption of the Merger Agreement by the affirmative vote of the holders of a majority of the outstanding shares of USS common stock, the Board of Directors is entitled to (i) change its recommendation regarding adoption of the Merger Agreement with respect to a Superior Proposal and/or to terminate the Merger Agreement, as applicable, to enter into an agreement in respect of a Superior Proposal or (ii) change its recommendation regarding adoption of the Merger Agreement in light of a continuing Intervening Event (as defined in the section of this proxy statement entitled “The Merger Agreement — The Board of Directors’ Recommendation; Change of Recommendation”), in each case, if it complies with certain procedures in the Merger Agreement, including giving Parent appropriate notice of such intention and negotiating further in good faith with Parent at Parent’s option before the Board of Directors determines in good faith, after consultation with USS’s financial advisors and outside legal counsel, that the failure to make a Change of Recommendation or terminate the Merger Agreement, as applicable, would be reasonably likely to be inconsistent with the directors’ fiduciary duties under applicable law. For more information, please see the section of this proxy statement entitled “The Merger Agreement — The Board of Directors’ Recommendation; Change of Recommendation.”
The termination of the Merger Agreement by USS in connection with the Board of Directors’ authorization for USS to enter into a definitive agreement with respect to a Superior Proposal will result in the payment by USS of a termination fee of $565 million. For more information, please see the section of this proxy statement entitled “The Merger Agreement — Termination Fee Payable by USS.”
Termination of the Merger Agreement (see page 120)
In addition to the circumstances described above, Parent and USS have certain rights to terminate the Merger Agreement under customary circumstances, including (i) by mutual agreement, (ii) if any governmental entity with competent jurisdiction over Parent or USS has issued a final and nonappealable injunction or similar order or any law that prohibits or makes illegal the consummation of the Merger and the other
 
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transactions contemplated by the Merger Agreement, (iii) an uncured breach in any material respect of the Merger Agreement by the other party, (iv) if the Merger has not been consummated on or before 11:59 p.m. Eastern time on September 18, 2024 (which we refer to as the “End Date,” and which may be automatically extended to 11:59 p.m. Eastern time on March 18, 2025 and 11:59 p.m. Eastern time on June 18, 2025 under certain circumstances) or (v) if USS stockholders fail to adopt the Merger Agreement at the Special Meeting (or any adjournment or postponement thereof). Under specified circumstances, USS is required to pay Parent a termination fee equal to $565 million and under specified circumstances relating to the failure to obtain Required Approvals, Parent is required to pay USS a termination fee equal to $565 million. For more information, please see the sections of this proxy statement entitled “The Merger Agreement —  Termination of the Merger Agreement,” “The Merger Agreement — Termination Fee Payable by USS” and “The Merger Agreement — Termination Fee Payable by Parent.”
Effect on USS If the Merger Is Not Completed (see page 31)
If the Merger Agreement is not adopted by USS stockholders, or if the Merger is not completed for any other reason:

USS stockholders will not be entitled to, nor will they receive, any payment for their respective shares of USS common stock pursuant to the Merger Agreement;

(a) USS will remain an independent public company; (b) USS common stock will continue to be listed and traded on the NYSE and the CSE and registered under the Exchange Act; and (c) USS will continue to file periodic and other reports with the SEC;

under specified circumstances described in the section of this proxy statement entitled “The Merger Agreement — Termination Fee Payable by USS,” USS will be required to pay Parent a termination fee of $565 million; and

under specified circumstances described in the section of this proxy statement entitled “The Merger Agreement — Termination Fee Payable by Parent,” Parent will be required to pay USS a termination fee of $565 million.
For more information, please see the section of this proxy statement entitled “Proposal 1: Adoption of the Merger Agreement — Effect on USS If the Merger Is Not Completed.”
 
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QUESTIONS AND ANSWERS
The following questions and answers address some commonly asked questions regarding the Merger, the Merger Agreement and the Special Meeting. These questions and answers may not address all questions that are important to you. You should carefully read and consider the more detailed information contained elsewhere in this proxy statement and the annexes to this proxy statement, including the Merger Agreement, along with all of the documents we refer to in this proxy statement, as they contain important information about, among other things, the Merger and how it affects you. You may obtain the information incorporated by reference in this proxy statement without charge by following the instructions in the section of this proxy statement entitled “Where You Can Find More Information.”
Q:
Why am I receiving these materials?
A:
This document is being delivered to you because you are a stockholder of USS. The Board of Directors is furnishing this proxy statement and form of proxy card to the USS stockholders in connection with the solicitation of proxies to be voted at the Special Meeting.
Q:
When and where is the Special Meeting?
A:
The Special Meeting is scheduled to be held virtually via live webcast on [           ], 2024, at [           ] Eastern Time (unless the Special Meeting is adjourned or postponed). There will not be a physical meeting location. We believe a virtual-only meeting format facilitates stockholder attendance and participation by enabling all stockholders to participate fully, equally and without cost, using an Internet-connected device from any location around the world. In addition, the virtual-only meeting format increases our ability to engage with all stockholders, regardless of size, resources or physical location and enables us to protect the health and safety of all attendees.
USS stockholders will be able to attend and vote at the Special Meeting by visiting www.virtualshareholdermeeting.com/[    ] (which we refer to as the “Special Meeting website”). On the day of the Special Meeting, you can log in to the Special Meeting with the control number included on your proxy card or voting instruction form, as applicable. We recommend that you log in to our virtual meeting platform at least 15 minutes before the scheduled start time of the Special Meeting to ensure that you can access the meeting. If you encounter any difficulties accessing the virtual meeting during the check-in or meeting time, or encounter any other technical difficulties with the virtual meeting during the log in or meeting time, please call the technical support number that will be posted on the virtual meeting log in page. Rules governing the conduct of the Special Meeting will be posted on the virtual meeting platform along with an agenda.
Q:
What am I being asked to vote on at the Special Meeting?
A:
You are being asked to vote on the following proposals:

to adopt the Merger Agreement Proposal;

to approve, on an advisory (non-binding) basis, the Compensation Proposal; and

to approve the Adjournment Proposal.
Q:
Who is entitled to vote at the Special Meeting?
A:
USS stockholders as of the Record Date of [           ], 2024 are entitled to notice of the Special Meeting and to vote at the Special Meeting. Each holder of shares of USS common stock shall be entitled to cast one vote on each matter properly brought before the Special Meeting for each such share owned at the close of business on the Record Date. Virtual attendance at the Special Meeting via the Special Meeting website is not required to vote if represented by proxy at the Special Meeting.
 
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Q:
How does the Merger Consideration compare to the market price of USS common stock prior to the announcement of the Merger Agreement?
A:
The Merger Consideration of $55.00 per share represents a premium of approximately 142% over the closing price of USS common stock on August 11, 2023, the last full trading day prior to USS’s public announcement of its strategic alternatives review process and approximately 40% over USS’s closing stock price of $39.33 on December 15, 2023, the last trading day before public announcement of the Merger Agreement. The closing price of USS common stock on the NYSE on February 21, 2024, the most recent practicable date prior to the date of this proxy statement, was $46.17. You are encouraged to obtain current market prices of USS common stock in connection with voting your shares of USS common stock.
Q:
May I attend and vote at the Special Meeting?
A:
All USS stockholders as of the Record Date may attend and vote at the Special Meeting.
Shares held directly in your name as a USS stockholder of record may be voted at the Special Meeting via the Special Meeting website. Shares held in “street name” may be voted at the Special Meeting via the Special Meeting website only if you obtain a legal proxy from your bank, broker or other nominee.
Even if you plan to attend the virtual Special Meeting, we encourage you to sign, date and return the enclosed proxy card in the accompanying prepaid reply envelope or grant your proxy electronically over the Internet or by telephone (in accordance with the instructions detailed in the section of this proxy statement entitled “The Special Meeting — Voting at the Special Meeting”) so that your vote will be counted if you later decide not to, or become unable to, virtually attend the Special Meeting. If you attend and vote at the Special Meeting, your vote will revoke any proxy previously submitted.
Q:
What will I receive if the Merger is completed?
A:
Upon completion of the Merger, you will be entitled to receive the Merger Consideration of $55.00 in cash, without interest, subject to any required tax withholding, for each share of USS common stock that you own (other than any Excluded Shares) immediately prior to the Effective Time, unless you have properly and validly exercised (and do not withdraw) your appraisal rights in accordance with, and have complied with, Section 262 of the DGCL. For example, if you own 100 shares of USS common stock, you will receive $5,500 in cash in exchange for your shares of USS common stock (other than any Excluded Shares), without interest and less any applicable withholding taxes. Excluded Shares means (a) each share that is owned by USS as treasury stock or otherwise, but excluding, for the avoidance of doubt, any shares of USS common stock held by any Company Employee Plan or trust related thereto (other than, for the avoidance of doubt, shares of common stock reserved for issuance under any of the Company Equity Plans) or held, directly or indirectly, by Parent or Merger Sub or any wholly owned subsidiary of Parent immediately prior to the Effective Time, which will be cancelled and will cease to exist, and (b) shares that are issued and outstanding immediately prior to the Effective Time (other than the shares described in the foregoing clause (a)) and that are held by holders of such shares who have not voted in favor of the adoption of the Merger Agreement or consented thereto in writing and are entitled to demand and properly demand appraisal of such shares, as applicable.
Q:
What will holders of Company Awards receive if the Merger is completed?
A:
Pursuant to the Merger Agreement:

Upon completion of the Merger, each Company RSU Award, or portion thereof, that is outstanding immediately prior to the Effective Time will, to the extent not vested, automatically become fully vested and will be cancelled and converted into the right of the holder of the Company RSU Award (or portion thereof) to receive an amount in cash equal to (i) the Merger Consideration multiplied by (ii) the number of shares underlying such Company RSU Award (or portion thereof) immediately prior to the Effective Time, together with any accrued and unpaid dividends corresponding to such vested Company RSU Award (or portion thereof);
 
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Upon completion of the Merger, each Company PSU Award, or portion thereof, that is outstanding immediately prior to the Effective Time will, to the extent not vested, automatically become fully vested to the extent described in the following sentence and will be cancelled and converted into the right of the holder of the Company PSU Award (or portion thereof) to receive an amount in cash equal to (i) the Merger Consideration multiplied by (ii) the total number of shares subject to such Company PSU Award (or portion thereof) immediately prior to the Effective Time, together with any accrued and unpaid dividends corresponding to such vested Company PSU Award (or portion thereof). The total number of shares of USS common stock subject to a Company PSU Award will be based on actual performance for any portion of a Company PSU Award that has been earned by its terms as of the Effective Time but has not yet vested. For any portion of a Company PSU Award that has not been earned by its terms as of the Effective Time, the total number of shares of USS common stock subject to a Company PSU Award will be based on deemed achievement of the greater of (1) maximum performance, if required by the applicable award agreement as of the date of the Merger Agreement, (2) actual performance or (3) target performance through the Effective Time;

Upon completion of the Merger, each Company Option Award, or portion thereof, that is outstanding immediately prior to the Effective Time will, to the extent not vested, automatically become fully vested and will be cancelled and converted into the right of the holder of each such Company Option Award to receive an amount in cash equal to (i) the excess, if any, of the Merger Consideration over the applicable exercise price of such Company Option Award, multiplied by (ii) the number of shares of Common Stock subject to such Company Option Award immediately prior to the Effective Time (assuming full vesting for any Company Option Award (or portion thereof) that is subject to performance-based vesting). If the exercise price of any Company Option Award (whether vested or unvested) is equal to or greater than the Merger Consideration, such Company Option Award will be cancelled without payment and will have no further force or effect; and

Upon completion of the Merger, each Company DSU Award will be converted into the right to receive an amount in cash equal to the Merger Consideration or such other amount contemplated by the Company DSU Award and settled in accordance with the terms thereof.
For more information, please see the section of this proxy statement captioned “Proposal 1: Adoption of the Merger Agreement — Merger Consideration — Treatment of USS Equity Awards.”
Q:
What are the material U.S. federal income tax consequences of the Merger to holders of USS common stock?
A:
The exchange of USS common stock for cash pursuant to the Merger will be a taxable transaction for U.S. federal income tax purposes. Accordingly, a U.S. Holder (as defined in the section of this proxy statement entitled “Proposal 1: Adoption of the Merger Agreement — Material U.S. Federal Income Tax Consequences of the Merger”) who exchanges shares of USS common stock for cash in the Merger generally will recognize gain or loss in an amount equal to the difference, if any, between the amount of cash that such U.S. Holder receives in the Merger and such U.S. Holder’s adjusted tax basis in the shares of USS common stock surrendered pursuant to the Merger by such U.S. Holder.
A Non-U.S. Holder (as defined in the section of this proxy statement entitled “Proposal 1: Adoption of the Merger Agreement — Material U.S. Federal Income Tax Consequences of the Merger”) generally will not be subject to U.S. federal income tax with respect to the exchange of shares of USS common stock for cash in the Merger unless such Non-U.S. Holder has certain connections to the United States, but may be subject to backup withholding tax unless the Non-U.S. Holder complies with certain certification procedures or otherwise establishes a valid exemption from backup withholding tax.
This proxy statement contains a general discussion of certain material U.S. federal income tax consequences of the Merger. This description does not address any non-income tax consequences, nor does it address state, local, non-U.S. or other tax consequences or the consequences to holders who are subject to special treatment under U.S. federal tax law. Consequently, you should consult your tax advisor to determine the particular tax consequences to you of the Merger.
 
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Q:
What vote is required to approve the Merger Agreement Proposal, the Compensation Proposal and the Adjournment Proposal?
A:
The affirmative vote of the holders of a majority of the outstanding shares of USS common stock as of the Record Date is required to adopt the Merger Agreement. The affirmative vote of the holders of the shares of USS common stock representing a majority of the votes cast by USS stockholders present or represented by proxy at the Special Meeting is required to approve the Compensation Proposal. The affirmative vote of the holders of the shares of USS common stock representing a majority of the voting power present or represented by proxy, whether or not a quorum is present, is required for approval of the Adjournment Proposal.
The failure of any USS stockholder of record to: (a) submit a signed proxy card; (b) grant a proxy over the Internet or by telephone (in accordance with the instructions detailed in the section of this proxy statement entitled “The Special Meeting — Voting at the Special Meeting”); or (c) attend the Special Meeting will, assuming a quorum is present, have the same effect as a vote “AGAINST” the Merger Agreement Proposal but, assuming a quorum is present, will have no effect on the Compensation Proposal, and, whether or not a quorum is present, will have no effect the Adjournment Proposal other than reducing the number of affirmative votes required to achieve a majority for such matter by reducing the total number of shares of USS common stock from which the majority is calculated. If a quorum is present at the Special Meeting, abstentions will have the same effect as a vote “AGAINST” the Merger Agreement Proposal but will have no effect on the Compensation Proposal. Abstentions will have the same effect as a vote “AGAINST” the Adjournment Proposal, whether or not a quorum is present at the Special Meeting. If you properly sign your proxy card but do not mark the boxes showing how your shares should be voted on a matter, the shares represented by your properly signed proxy will be voted: (1) “FOR” the Merger Agreement Proposal; (2) “FOR” the Compensation Proposal; and (3) “FOR” the Adjournment Proposal.
Q:
What constitutes a quorum?
A:
The holders of one-third of the voting power of the outstanding shares of USS common stock entitled to vote on the Record Date and present or represented by proxy will constitute a quorum at the Special Meeting. Because there were [           ] shares of USS common stock outstanding and entitled to vote as of the Record Date, we will need holders of at least [           ] shares present or represented by proxy at the Special Meeting to achieve a quorum.
Q:
What happens if the Merger is not completed?
A:
If the Merger Agreement is not adopted by USS stockholders or if the Merger is not completed for any other reason, USS stockholders will not receive any payment for their shares of USS common stock. Instead, USS will remain an independent public company, USS common stock will continue to be listed and traded on the NYSE and the CSE and registered under the Exchange Act, and USS will continue to file periodic and other reports with the SEC.
Under specified circumstances, USS will be required to pay Parent a termination fee of $565 million upon the termination of the Merger Agreement, as described in the section of this proxy statement entitled “The Merger Agreement — Termination Fee Payable by USS.” Under specified circumstances relating to the failure to obtain Required Approvals, Parent will be required to pay USS a termination fee of $565 million upon the termination of the Merger Agreement, as described in the section of this proxy statement entitled “The Merger Agreement — Termination Fee Payable by Parent.”
Q:
Why are USS stockholders being asked to cast an advisory (non-binding) vote to approve the Compensation Proposal?
A:
The Exchange Act and applicable SEC rules thereunder require USS to seek an advisory (non-binding) vote with respect to certain payments that could become payable to its named executive officers in connection with the Merger.
 
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Q:
What will happen if USS stockholders do not approve the Compensation Proposal at the Special Meeting?
A:
Approval of the Compensation Proposal is not a condition to the completion of the Merger. The vote with respect to the Compensation Proposal is an advisory vote and will not be binding on USS. Therefore, if the approval of the Merger Agreement Proposal is obtained and the Merger is completed, the amounts payable under the Compensation Proposal will continue to be payable to USS’s named executive officers in accordance with the terms and conditions of the applicable agreements regardless of whether the Compensation Proposal is approved.
Q:
What do I need to do now?
A:
You should carefully read and consider this entire proxy statement and the annexes to this proxy statement, including the Merger Agreement, along with all of the documents that we refer to in this proxy statement, as they contain important information about, among other things, the Merger and how it affects you. Then complete, date, sign and return, as promptly as possible, the enclosed proxy card in the accompanying prepaid reply envelope, or grant your proxy electronically over the Internet or by telephone (in accordance with the instructions detailed in the section of this proxy statement entitled “The Special Meeting — Voting at the Special Meeting”), so that your shares can be voted at the Special Meeting. If you hold your shares in “street name,” please refer to the voting instruction form provided by your bank, broker or other nominee to vote your shares.
Q:
May I exercise appraisal rights in connection with the Merger?
A:
Yes. If the Merger is consummated, USS stockholders who continuously hold shares of USS common stock through the Effective Time, do not vote in favor of the adoption of the Merger Agreement and validly and properly demand appraisal of their shares and do not withdraw their demands or otherwise lose their rights to seek appraisal will be entitled to seek appraisal of their shares in connection with the Merger under Section 262 of the DGCL. This means that USS stockholders who perfect their appraisal rights, do not thereafter withdraw their demand for appraisal and follow the procedures in the manner prescribed by Section 262 of the DGCL may be entitled to have their shares of USS common stock appraised by the Delaware Court of Chancery and to receive payment in cash of the “fair value” of their shares of USS common stock, exclusive of any elements of value arising from the accomplishment or expectation of the Merger, as determined by the Delaware Court of Chancery, together with interest to be paid on the amount determined to be fair value, if any (or in certain circumstances described in further detail in the section of this proxy statement entitled “Proposal 1: Adoption of the Merger Agreement — Appraisal Rights,” on the difference between the amount determined to be the fair value and the amount paid by the Surviving Corporation in the Merger to each USS stockholder entitled to appraisal prior to the entry of judgment in any appraisal proceeding). Due to the complexity of the appraisal process, USS stockholders who wish to seek appraisal of their shares are encouraged to review Section 262 of the DGCL carefully and to seek the advice of legal counsel with respect to the exercise of appraisal rights.
Q:
Should I surrender my certificates or book-entry shares of USS common stock now?
A:
No. After the Merger is completed, the Paying Agent (as defined in the section of this proxy statement entitled “The Merger Agreement — Exchange and Payment Procedures”) will, as soon as reasonably practical after the Effective Time, and in any event not later than two business days following the Closing Date, send each holder of record of USS common stock represented by certificates, whose shares of USS common stock were converted into the right to receive the Merger Consideration, (A) a letter of transmittal and (B) instructions that explain how to surrender certificates or book-entry shares of USS common stock in exchange for the Merger Consideration.
Q:
What happens if I sell or otherwise transfer my shares of USS common stock after the Record Date but before the Special Meeting?
A:
The Record Date for the Special Meeting is earlier than the date of the Special Meeting and the date the Merger is expected to be completed. If you sell or transfer your shares of USS common stock after
 
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the Record Date but before the Special Meeting, unless special arrangements (such as provision of a proxy) are made between you and the person to whom you sell or otherwise transfer your shares of USS common stock and each of you notifies USS in writing of such special arrangements, you will transfer the right to receive the Merger Consideration, if the Merger is completed, to the person to whom you sell or transfer your shares of USS common stock, but you will retain your right to vote those shares at the Special Meeting. Even if you sell or otherwise transfer your shares of USS common stock after the Record Date, we encourage you to complete, date, sign and return the enclosed proxy card in the accompanying prepaid reply envelope or grant your proxy electronically over the Internet or by telephone (in accordance with the instructions detailed in the section of this proxy statement entitled “The Special Meeting — Voting at the Special Meeting”).
Q:
What is the difference between holding shares as a USS stockholder of record and holding shares in “street name” as a beneficial owner?
A:
If your shares of USS common stock are registered directly in your name with our transfer agent, EQ Shareowner Services, you are considered to be the “stockholder of record” with respect to those shares. In this case, this proxy statement and your proxy card have been sent directly to you by USS.
If your shares of USS common stock are held through a bank, broker or other nominee, you are considered the “beneficial owner” of shares of USS common stock held in “street name.” In that case, this proxy statement has been forwarded to you by your bank, broker or other nominee who is considered, with respect to those shares, to be the USS stockholder of record. As the beneficial owner, you have the right to vote on the Internet, by telephone or, if you received a paper copy of the proxy materials, by completing, signing and mailing the proxy card enclosed therewith in the postage-prepaid envelope provided for that purpose.
Q:
How may I vote?
A:
If you are a USS stockholder of record (that is, if your shares of USS common stock are registered in your name with EQ Shareowner Services, our transfer agent), there are four ways to vote:

Internet:   Vote at [           ] in advance of the Special Meeting. The Internet voting system is available 24 hours a day until 11:59 p.m. Eastern Time on [           ], 2024. Once you enter the Internet voting system, you can record and confirm (or change) your voting instructions.

Telephone:   Use the telephone number shown on your proxy card. The telephone voting system is available 24 hours a day in the United States until 11:59 p.m. Eastern Time on [      ], 2024. Once you enter the telephone voting system, a series of prompts will tell you how to record and confirm (or change) your voting instructions.

Mail:   Mark your voting instructions on the card and complete, date, sign and return it in the postage-paid envelope provided. For your mailed proxy card to be counted, we must receive it before [           ] on [           ], 2024.

At the Special Meeting:   Shares of USS common stock held directly in your name as a USS stockholder of record may be voted at the Special Meeting via the Special Meeting website. Shares of USS common stock held in “street name” may be voted at the Special Meeting via the Special Meeting website only if you obtain a legal proxy from your bank, broker or other nominee.
If your shares of USS common stock are held “in street name” by a bank, broker or other nominee, the holder of your shares will provide you with a copy of this proxy statement, a voting instruction form and directions on how to provide voting instructions. These directions may allow you to vote over the Internet or by telephone. Please be aware that your bank, broker or other nominee may require that you inform them earlier than required by the proxy card in order for your vote to be submitted.
Whether or not you plan to attend the virtual Special Meeting, we urge you to vote in advance by proxy to ensure your vote is counted. We encourage you to submit your proxy over the Internet or by telephone, both of which are convenient, cost-effective and reliable alternatives to returning a proxy card by mail. You may still attend the Special Meeting and vote thereat if you have already voted by proxy.
 
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Please be aware that, although there is no charge for voting your shares of USS common stock, if you vote electronically over the Internet by visiting the address on your proxy card or by telephone by calling the phone number on your proxy card, in each case, you may incur costs such as Internet access and telephone charges for which you will be responsible.
If your shares of USS common stock are held in USS’s 401(k) plan, you may instruct the plan trustee on how to vote your shares in the 401(k) plan online, by mail, or by telephone as described above for shares held of record, except that if you vote by mail, then the card you use will be a voting instruction form rather than a proxy card. In addition, your vote will apply to a proportionate number of other shares held by participants in the 401(k) plan for which voting directions are not received. All participants are fiduciaries under the terms of the 401(k) plan and under the Employee Retirement Income Security Act (“ERISA”) for the limited purpose of voting shares credited to their accounts. Under ERISA, fiduciaries are required to act prudently in making voting decisions.
Q:
What is a proxy?
A:
A proxy is a USS stockholder’s legal designation of another person to vote shares of USS common stock owned by such USS stockholder on their behalf. If you are a USS stockholder of record, or beneficially in street name, you can vote by proxy over the Internet, by telephone or by mail by following the instructions provided in the enclosed proxy card. If you hold shares of USS common stock beneficially in “street name,” you should follow the voting instructions provided by your bank, broker or other nominee.
Q:
If a USS stockholder gives a proxy, how are the shares of USS common stock voted?
A:
Regardless of the method you choose to vote, the individuals named on the enclosed proxy card, or your proxies, will vote your shares of USS common stock in the way that you indicate. When completing the Internet or telephone process or the proxy card, you may specify whether your shares of USS common stock should be voted for or against or to abstain from voting on all, some or none of the specific items of business to come before the Special Meeting.
If you properly sign your proxy card but do not mark the boxes showing how your shares should be voted on a matter, the shares of USS common stock represented by your properly signed proxy will be voted: (1) “FOR” the Merger Agreement Proposal; (2) “FOR” the Compensation Proposal; and (3) “FOR” the Adjournment Proposal.
Q:
If my broker holds my shares of USS common stock in “street name,” will my broker vote my shares for me?
A:
No. Your bank, broker or other nominee is permitted to vote your shares of USS common stock on any proposal currently scheduled to be considered at the Special Meeting only if you instruct your bank, broker or other nominee how to vote. You should follow the procedures provided by your bank, broker or other nominee to vote your shares of USS common stock. Without instructions, your shares of USS common stock will not be voted on such proposals, which will have the same effect as if you voted against the Merger Agreement Proposal but, assuming a quorum is present, will have no effect on the Compensation Proposal or the Adjournment Proposal.
Q:
What is a “broker non-vote”?
A:
A “broker non-vote” results when banks, brokers and other nominees return a valid proxy voting upon a matter or matters for which the applicable rules provide discretionary authority but do not vote on a particular proposal because they do not have discretionary authority to vote on the matter and have not received specific voting instructions from the beneficial owner of such shares. USS does not expect any broker non-votes at the Special Meeting because the rules applicable to banks, brokers and other nominees only provide brokers with discretionary authority to vote on proposals that are considered “routine,” whereas each of the proposals to be presented at the Special Meeting is considered “non-routine.” As a result, no broker will be permitted to vote your shares of USS common stock at the Special Meeting without receiving instructions. Failure to instruct your broker on how to vote your
 
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shares will have the same effect as a vote “AGAINST” the Merger Agreement Proposal but will have no effect on the Compensation Proposal or the Adjournment Proposal.
Q:
May I change my vote after I have mailed my signed and dated proxy card?
A:
Yes. You can change or revoke your proxy before the Special Meeting in the manner described in this proxy statement. If you are the record holder of your shares of USS common stock, you may change or revoke your proxy by any of the following actions:

Notifying our Corporate Secretary in writing at 600 Grant Street, Pittsburgh, Pennsylvania 15219;

Completing, dating, signing and returning a later dated proxy card;

Submitting a new proxy electronically via the Internet or by telephone; or

Voting at the Special Meeting. Please note that virtual attendance at the Special Meeting will not by itself constitute revocation of a proxy.
Any change to your proxy that is provided by telephone or the Internet must be submitted by 11:59 p.m. Eastern Time on [      ], 2024.
If you hold your shares of USS common stock in “street name,” you should contact your bank, broker or other nominee for instructions regarding how to change your vote. You may also vote at the Special Meeting via the Special Meeting website.
If you have any questions about how to vote or change your vote, you should contact our proxy solicitor:
INNISFREE M&A INCORPORATED
501 Madison Avenue, 20th Floor
New York, NY 10022
Stockholders May Call Toll-Free: (877) 825-8621
Brokers May Call Collect: (212) 750-5833
Q:
What should I do if I receive more than one set of voting materials?
A:
This means you own shares of USS common stock that are registered under different names or are in more than one account. For example, you may own some shares of USS common stock directly as a USS stockholder of record and other shares of USS common stock through a broker, or you may own shares of USS common stock through more than one broker. In these situations, you will receive multiple sets of proxy materials. You must vote, sign and return all of the proxy cards or follow the instructions for any alternative voting procedure on each of the proxy cards that you receive in order to vote all of the shares of USS common stock you own. Each proxy card you receive comes with its own prepaid return envelope. If you submit your proxy by mail, make sure you return each proxy card in the return envelope that accompanies that proxy card.
Q:
How many copies of this proxy statement and related voting materials should I receive if I share an address with another USS stockholder?
A:
The SEC’s proxy rules permit companies and intermediaries, such as brokers, to satisfy delivery requirements for proxy statements with respect to two or more USS stockholders sharing the same address by delivering a single proxy statement to those USS stockholders. This process, which is commonly referred to as “householding,” potentially provides extra convenience for USS stockholders and cost savings for companies.
USS and some brokers may be householding our proxy materials by delivering a single set of proxy materials to multiple USS stockholders who request a copy and share an address, unless contrary instructions have been received from the affected USS stockholders. If at any time you no longer wish to participate in householding and would prefer to receive a separate proxy statement, or if your
 
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household is receiving multiple copies of these documents and you wish to request that future deliveries be limited to a single copy, please notify our Corporate Secretary at 600 Grant Street, Pittsburgh, Pennsylvania 15219, (412) 433-4804, or, if the latter, you may also contact your broker or other nominee record holder.
Q:
Where can I find the voting results of the Special Meeting?
A:
The preliminary voting results for the Special Meeting are expected to be announced at the Special Meeting. In addition, within four business days following certification of the final voting results, USS will file the final voting results of the Special Meeting (or, if the final voting results have not yet been certified, the preliminary results) with the SEC on a Current Report on Form 8-K.
Q:
Who will solicit and pay the cost of soliciting proxies?
A:
USS has engaged Innisfree M&A Incorporated, which we refer to as “Innisfree,” to assist in the solicitation of proxies for the Special Meeting. USS estimates that it will pay Innisfree a fee of approximately $50,000, plus reimbursement for certain out-of-pocket fees and expenses. USS has agreed to indemnify Innisfree against various liabilities and expenses that relate to or arise out of its solicitation of proxies (subject to certain exceptions). USS also may reimburse banks, brokers and other custodians, nominees and fiduciaries or their respective agents for their expenses in forwarding proxy materials to beneficial owners of USS common stock. USS directors, officers and employees also may solicit proxies by telephone, by electronic means or in person. They will not be paid any additional amounts for soliciting proxies.
Q:
What will happen to USS’s Dividend Reinvestment Plan (“Company DRIP”) in the Merger?
A:
On December 17, 2023, the Board of Directors approved the suspension of the Company DRIP until further notice, as required pursuant to the Merger Agreement. The Company DRIP was thereafter suspended as of December 19, 2023. As a result, any distributions declared by USS after December 17, 2023 will be paid in cash to all USS stockholders unless and until the Company DRIP is reinstated. Participants in the Company DRIP also will not be permitted to purchase shares of USS common stock through optional cash investments under the Company DRIP. The suspension of the Company DRIP will not affect the participants’ ability to sell any shares of USS common stock held under the Company DRIP acquired before December 17, 2023.
Q:
When do you expect the Merger to be completed?
A:
We currently expect the Merger to be completed in the second or third quarter of 2024. However, the exact timing of completion of the Merger cannot be predicted because the Merger is subject to the closing conditions specified in the Merger Agreement and summarized in this proxy statement, many of which are outside of our control.
Q:
How can I obtain additional information about USS?
A:
USS will provide copies of this proxy statement, documents incorporated by reference and its 2023 Annual Report to Stockholders, including its Annual Report on Form 10-K for the fiscal year ended December 31, 2023 (which we refer to as “Annual Report”), without charge to any USS stockholder who makes a request in writing to our Corporate Secretary at 600 Grant Street, Pittsburgh, Pennsylvania 15219. In order for you to receive timely delivery of documents in advance of the Special Meeting, you must make such request by no later than [      ], 2024. USS’s Annual Report and other SEC filings may also be accessed at https://sec.gov or on USS’s Investor website at https://investors.ussteel.com/. USS’s website address is provided as an inactive textual reference only. The information provided on or accessible through our website is not part of this proxy statement and is not incorporated in this proxy statement by this or any other reference to our website provided in this proxy statement.
 
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Q:
Who can help answer my questions?
A:
If you have any questions concerning the Merger, the Special Meeting or the accompanying proxy statement, would like additional copies of the accompanying proxy statement or need help voting your shares of USS common stock, please contact our proxy solicitor:
INNISFREE M&A INCORPORATED
501 Madison Avenue, 20th Floor
New York, NY 10022
Stockholders May Call Toll-Free: (877) 825-8621
Brokers May Call Collect: (212) 750-5833
 
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FORWARD-LOOKING STATEMENTS
This proxy statement contains information regarding USS that may constitute “forward-looking statements,” as that term is defined under the Private Securities Litigation Reform Act of 1995 and other securities laws, that are subject to risks and uncertainties. We intend the forward-looking statements to be covered by the safe harbor provisions for forward-looking statements in those sections. Generally, we have identified such forward-looking statements by using the words “believe,” “expect,” “intend,” “estimate,” “anticipate,” “project,” “target,” “forecast,” “aim,” “should,” “plan,” “goal,” “future,” “will,” “may” and similar expressions or by using future dates in connection with any discussion of, among other things, statements expressing general views about future operating or financial results, operating or financial performance, trends, events or developments that we expect or anticipate will occur in the future, anticipated cost savings, potential capital and operational cash improvements and changes in the global economic environment. However, the absence of these words or similar expressions does not mean that a statement is not forward-looking. Forward-looking statements include all statements that are not historical facts, but instead represent only USS’s beliefs regarding future goals, plans and expectations about our prospects for the future and other events, many of which, by their nature, are inherently uncertain and outside of USS’s control, as well as statements regarding the proposed transaction and the timing of the completion of the transaction. It is possible that USS’s actual results and financial condition may differ, possibly materially, from the anticipated results and financial condition indicated in these forward-looking statements. Management of USS believes that these forward-looking statements are reasonable as of the time made. However, caution should be taken not to place undue reliance on any such forward-looking statements because such statements speak only as of the date when made. In addition, forward looking statements are subject to certain risks and uncertainties that could cause actual results to differ materially from USS’s historical experience and our present expectations or projections. Risks and uncertainties include without limitation:

the ability of the parties to consummate the proposed transaction on a timely basis or at all;

the timing, receipt and terms and conditions of any required governmental and regulatory approvals of the proposed transaction that could cause the parties to terminate the Merger Agreement;

the occurrence of any event, change or other circumstances that could give rise to the termination of the Merger Agreement;

the possibility that USS’s stockholders may not approve the proposed transaction;

the risks and uncertainties related to securing the necessary stockholder approval;

the risk that the parties to the Merger Agreement may not be able to satisfy the conditions to the proposed transaction in a timely manner or at all;

risks related to disruption and distraction of management time from ongoing business operations due to the proposed transaction;

certain restrictions during the pendency of the proposed transaction that may impact USS’s ability to pursue certain business opportunities or strategic transactions;

the risk that any announcements relating to the proposed transaction could have adverse effects on the market price of USS’s common stock;

the risk of any unexpected costs or expenses resulting from the proposed transaction;

the risk of any litigation relating to the proposed transaction; and

the risk that the proposed transaction and its announcement could have an adverse effect on the ability of USS to retain customers and retain and hire key personnel and maintain relationships with customers, suppliers, employees, stockholders and other business relationships and on its operating results and business generally.
 
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USS directs readers to its Annual Report on Form 10-K for the year ended December 31, 2023, and the other documents it files with the SEC for other risks associated with USS’s future performance. These documents contain and identify important factors that could cause our actual results to differ materially from those contained in the forward-looking statements.
All information in this proxy statement is as of the date hereof. USS undertakes no duty to update any forward-looking statement whether as a result of new information, future events or otherwise, except as required by law.
 
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THE SPECIAL MEETING
The enclosed proxy is solicited on behalf of the Board of Directors for use at the Special Meeting.
Date, Time and Place
The Special Meeting will be held virtually via live webcast on [     ], 2024, beginning at [     ] Eastern Time (unless the Special Meeting is adjourned or postponed). USS stockholders will be able to attend and vote at the Special Meeting by visiting www.virtualshareholdermeeting.com/[      ] (which we refer to as the “Special Meeting website”).
Purpose of the Special Meeting
At the Special Meeting, we will ask USS stockholders to vote on proposals to: (a) adopt the Merger Agreement Proposal; (b) approve, on an advisory (non-binding) basis, the Compensation Proposal; and (c) approve the Adjournment Proposal.
Record Date; Shares Entitled to Vote; Quorum
Only USS stockholders as of the Record Date are entitled to notice of the Special Meeting and to vote at the Special Meeting. A list of USS stockholders entitled to vote at the Special Meeting will be available at our principal executive offices located at 600 Grant Street, Pittsburgh, Pennsylvania 15219, during regular business hours for a period of no less than 10 days before the Special Meeting. As of the Record Date, there were [      ] shares of USS common stock outstanding and entitled to vote at the Special Meeting.
Holders of one-third of the voting power of the outstanding shares of USS common stock entitled to vote on the Record Date present or represented by proxy at the Special Meeting will constitute a quorum at the Special Meeting. In the event that a quorum is not present at the Special Meeting, it is expected that the Special Meeting will be adjourned to solicit additional proxies.
Vote Required; Abstentions and Broker Non-Votes
Each USS stockholder shall be entitled to one vote for each share of USS common stock owned at the close of business on the Record Date.
The affirmative vote of the holders of a majority of the outstanding shares of USS common stock entitled to vote thereon is required to approve the Merger Agreement Proposal. As of the Record Date, [      ] shares constitute a majority of the outstanding shares of USS common stock. Adoption of the Merger Agreement by USS stockholders is a condition to the consummation of the Merger.
The affirmative vote of the holders of the shares of USS common stock representing a majority of the votes cast by USS stockholders present or represented by proxy at the Special Meeting is required to approve, on an advisory (non-binding) basis, the Compensation Proposal.
The affirmative vote of the holders of the shares of USS common stock representing a majority of the voting power present or represented by proxy at the Special Meeting, whether or not a quorum is present, is required for approval of the Adjournment Proposal.
The failure of any USS stockholder of record to: (a) submit a signed proxy card; (b) grant a proxy over the Internet or by telephone (in accordance with the instructions detailed in the section of this proxy statement entitled “The Special Meeting — Voting at the Special Meeting”); or (c) attend the Special Meeting will, assuming a quorum is present, have the same effect as a vote “AGAINST” the Merger Agreement Proposal but, assuming a quorum is present, will have no effect on the Compensation Proposal and, whether or not a quorum is present, will have no effect on the Adjournment Proposal other than reducing the number of affirmative votes required to achieve a majority for such matter by reducing the total number of shares of USS common stock from which the majority is calculated. If a quorum is present at the Special Meeting, for USS stockholders who attend the Special Meeting or are represented by proxy and abstain from voting, the abstention will have the same effect as if the USS stockholder voted “AGAINST” the Merger
 
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Agreement Proposal but will have no effect on the Compensation Proposal. Abstentions will have the same effect as a vote “AGAINST” the Adjournment Proposal, whether or not a quorum is present at the Special Meeting.
Each “broker non-vote” will also count as a vote “AGAINST” the Merger Agreement Proposal but, assuming a quorum is present, will have no effect on the Compensation Proposal and, regardless of whether a quorum is present, will have no effect on the Adjournment Proposal. A so-called “broker non-vote” occurs when banks, brokers and other nominees return a valid proxy voting upon a matter or matters for which the applicable rules provide discretionary authority but do not vote on a particular proposal because they do not have discretionary authority to vote on the matter and have not received specific voting instructions from the beneficial owner of such shares. USS does not expect any broker non-votes at the Special Meeting because the rules applicable to banks, brokers and other nominees only provide brokers with discretionary authority to vote on proposals that are considered “routine,” whereas each of the proposals to be presented at the Special Meeting is expected to be considered “non-routine.” As a result, no broker will be permitted to vote your shares of USS common stock at the Special Meeting without receiving instructions. Failure to instruct your broker on how to vote your shares will have the same effect as a vote “AGAINST” the Merger Agreement Proposal, but will have no effect on the Compensation Proposal or the Adjournment Proposal.
Stock Ownership and Interests of Certain Persons
Shares Held by USS’s Directors and Executive Officers
As of the Record Date, our executive officers and directors beneficially owned and were entitled to vote, in the aggregate, [      ] shares of USS common stock, representing approximately [      ]% of the shares of USS common stock outstanding on the Record Date.
We currently expect that our executive officers and directors will vote all of their respective shares of USS common stock (1) “FOR” the Merger Agreement Proposal, (2) “FOR” the Compensation Proposal and (3) “FOR” the Adjournment Proposal, although none of them have entered into any agreements obligating them to do so.
Voting at the Special Meeting
You can vote at the virtual Special Meeting, which will be held on [     ], 2024, at [     ] Eastern Time at [      ] (unless the Special Meeting is adjourned or postponed).
You may also authorize the persons named as proxies on the proxy card to vote your shares by returning the proxy card in advance by mail, over the Internet or by telephone. Although USS offers multiple voting methods, USS encourages you to vote over the Internet or by phone as USS believes they are the most cost-effective methods. We also recommend that you vote as soon as possible, even if you are planning to attend the Special Meeting, so that the vote count will not be delayed. Both the Internet and the telephone provide convenient, cost-effective and reliable alternatives to returning your proxy card by mail. If you choose to vote your shares over the Internet or by telephone, there is no need for you to submit your proxy card by mail.
To Vote Over the Internet:
Vote at [      ] in advance of the Special Meeting. The Internet voting system is available 24 hours per day until 11:59 p.m. Eastern Time on [     ], 2024. Once you enter the Internet voting system, you can record and confirm (or change) your voting instructions.
To Vote by Telephone:
Use the telephone number shown on your proxy card. The telephone voting system is available 24 hours per day in the United States until 11:59 p.m. Eastern Time on [     ], 2024. Once you enter the telephone voting system, a series of prompts will tell you how to record and confirm (or change) your voting instructions.
 
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To Vote by Proxy Card:
If you received a proxy card, mark your voting instructions on the card and sign, date and return it in the postage-paid envelope provided. For your mailed proxy card to be counted, we must receive it before 11:59 p.m. Eastern Time on [      ], 2024.
All shares represented by properly signed and dated proxies received by the deadline indicated above will be voted at the Special Meeting in accordance with the instructions of the USS stockholder. Properly signed and dated proxies that do not contain voting instructions will be voted: (1) “FOR” the Merger Agreement Proposal; (2) “FOR” the Compensation Proposal; and (3) “FOR” the Adjournment Proposal. If you indicate on your proxy card that you wish to vote in favor of the Merger Agreement Proposal but do not indicate a choice on the Adjournment Proposal or the Compensation Proposal on an advisory (non-binding) basis, your shares of USS common stock will be voted “FOR” each such proposal. Proxy cards that are returned without a signature will not be counted as present at the Special Meeting and cannot be voted and therefore will have the same effect as a vote “AGAINST” the Merger Agreement Proposal.
If your shares of USS common stock are held in “street name” through a bank, broker or other nominee, you may vote through your bank, broker or other nominee by completing and returning the voting form provided by your bank, broker or other nominee or attending the Special Meeting and voting using your control number, or, if you did not obtain a control number, contacting your bank, broker or other nominee to obtain a control number so that you may vote. If such a service is provided, you may vote over the Internet or telephone through your bank, broker or other nominee by following the instructions on the voting form provided by your bank, broker or other nominee. If you do not return your bank’s, broker’s or other nominee’s voting form, do not vote via the Internet or telephone through your bank, broker or other nominee, if possible, or do not attend the Special Meeting and vote thereat, it will have the same effect as if you voted “AGAINST” the Merger Agreement Proposal but, assuming a quorum is present, will not have any effect on the Compensation Proposal or the Adjournment Proposal (so long as you do not attend the Special Meeting and abstain from voting on any given proposal, which would have the same effect as voting “AGAINST” the Merger Agreement Proposal, but would have no effect on the Compensation Proposal or the Adjournment Proposal, as applicable).
If your shares of USS common stock are held in USS’s 401(k) plan, you may instruct the plan trustee on how to vote your shares in the 401(k) plan online, by mail, or by telephone as described above for shares held of record, except that if you vote by mail, then the card you use will be a voting instruction form rather than a proxy card. In addition, your vote will apply to a proportionate number of other shares held by participants in the 401(k) plan for which voting directions are not received. All participants are fiduciaries under the terms of the 401(k) plan and under the Employee Retirement Income Security Act (ERISA) for the limited purpose of voting shares credited to their accounts. Under ERISA, fiduciaries are required to act prudently in making voting decisions.
Revocability of Proxies
Any proxy given by a USS stockholder may be revoked before the Special Meeting by doing any of the following:

if a proxy was submitted by telephone or over the Internet, by submitting another proxy by telephone or over the Internet, in accordance with the instructions detailed in the section of this proxy statement entitled “The Special Meeting — Voting at the Special Meeting” at any time before the closing of the voting facilities at 11:59 p.m. Eastern Time on [     ], 2024;

by submitting a properly completed, dated and signed proxy card with a date later than the date of the previously submitted proxy relating to the same shares of USS common stock, provided such proxy card is received no later than the close of business on [     ], 2024;

by delivering a signed written notice of revocation bearing a date later than the date of the proxy to USS’s Corporate Secretary at 600 Grant Street, Pittsburgh, Pennsylvania 15219, stating that the proxy is revoked, provided such written notice is received no later than the close of business on [     ], 2024; or
 
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by attending the virtual Special Meeting and voting thereat (your attendance at the virtual Special Meeting will not, by itself, revoke your proxy).
If you hold your shares of USS common stock in “street name,” you should contact your bank, broker or other nominee for instructions regarding how to change your vote. You may also vote at the virtual Special Meeting with your control number, or, if you did not obtain a control number, by contacting your bank, broker or other nominee to obtain a control number.
Any adjournment, postponement or other delay of the Special Meeting, including for the purpose of soliciting additional proxies, will allow USS stockholders who have already sent in their proxies to revoke them at any time prior to their use at the Special Meeting as adjourned, postponed or delayed.
Board of Directors’ Recommendation
The Board of Directors has unanimously: (a) determined that it fair to and in the best interests of USS and its stockholders, and declared it advisable, to enter into the Merger Agreement, (b) authorized and approved the execution, delivery and performance of the Merger Agreement by USS and the consummation of the transactions contemplated by the Merger Agreement, including the Merger, and (c) resolved to recommend that the USS stockholders adopt the Merger Agreement and directed that such matter be submitted for consideration of the USS stockholders at the Special Meeting.
The Board of Directors unanimously recommends that you vote: (1) “FOR” the Merger Agreement Proposal; (2) “FOR” the Compensation Proposal; and (3) “FOR” the Adjournment Proposal.
Solicitation of Proxies
The Board of Directors is soliciting your proxy, and USS will bear the cost of soliciting proxies. Innisfree has been retained to assist with the solicitation of proxies. Innisfree will be paid approximately $50,000 and will be reimbursed for its reasonable out-of-pocket expenses for these and other advisory services in connection with the Special Meeting. Forms of proxies and proxy materials may also be distributed through brokers, custodians and other like parties to the beneficial owners of shares of USS common stock, in which case these parties will be reimbursed for their reasonable out-of-pocket expenses in accordance with SEC and NYSE regulations. Proxies may also be solicited in person or by telephone, facsimile, electronic mail or other electronic medium by USS or, without additional compensation, by USS or USS’s directors, officers and employees.
Anticipated Date of Completion of the Merger
Assuming timely satisfaction of necessary closing conditions, including the approval by USS stockholders of the Merger Agreement Proposal, we currently anticipate that the Merger will be consummated in the second or third quarter of 2024.
Appraisal Rights
If the Merger is consummated, USS stockholders who continuously hold shares of USS common stock through the Effective Time, do not vote in favor of the adoption of the Merger Agreement and validly and properly demand appraisal of their shares and do not withdraw their demands or otherwise lose their rights to seek appraisal will be entitled to seek appraisal of their shares in connection with the Merger under Section 262 of the DGCL. This means that USS stockholders who perfect their appraisal rights, do not thereafter withdraw their demand for appraisal, and follow the procedures in the manner prescribed by Section 262 of the DGCL may be entitled to have their shares of USS common stock appraised by the Delaware Court of Chancery and to receive payment in cash of the “fair value” of their shares of USS common stock, exclusive of any elements of value arising from the accomplishment or expectation of the Merger, as determined by the Delaware Court of Chancery, together with interest to be paid on the amount determined to be fair value, if any (or in certain circumstances described in further detail in the section of this proxy statement entitled “Proposal 1: Adoption of the Merger Agreement — Appraisal Rights,” on the difference between the amount determined to be the fair value and the amount paid by the Surviving Corporation in the Merger to each USS stockholder entitled to appraisal prior to the entry of
 
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judgment in any appraisal proceeding). Due to the complexity of the appraisal process, USS stockholders who wish to seek appraisal of their shares are encouraged to review Section 262 of the DGCL carefully and to seek the advice of legal counsel with respect to the exercise of appraisal rights.
USS stockholders considering seeking appraisal should be aware that the fair value of their shares of USS common stock as determined pursuant to Section 262 of the DGCL could be more than, the same as or less than the value of the consideration that they would receive pursuant to the Merger Agreement if they did not seek appraisal of their shares of USS common stock.
To exercise your appraisal rights, you must: (a) submit a written demand for appraisal to USS before the vote is taken on the adoption of the Merger Agreement; (b) not submit a proxy or otherwise vote in favor of the proposal to adopt the Merger Agreement; (c) continue to hold your shares of USS common stock of record through the Effective Time; and (d) strictly comply with all other procedures for exercising appraisal rights under Section 262 of the DGCL. Your failure to follow exactly the procedures specified under Section 262 of the DGCL may result in the loss of your appraisal rights. In addition, the Delaware Court of Chancery will dismiss appraisal proceedings in respect of the Merger unless certain stock ownership conditions are satisfied by the USS stockholders seeking appraisal. The DGCL requirements for exercising appraisal rights are described in further detail in the section of this proxy statement entitled “Proposal 1: Adoption of the Merger Agreement — Appraisal Rights,” which is qualified in its entirety by Section 262 of the DGCL, the relevant section of the DGCL regarding appraisal rights. A copy of Section 262 of the DGCL is attached to this proxy statement as Annex D and may be accessed without subscription or cost at the Delaware Code Online (available at: https://delcode.delaware.gov/title8/c001/sc09/index.html#262) and is incorporated herein by reference. If you hold your shares of USS common stock through a bank, broker or other nominee and you wish to exercise appraisal rights, you may make a written demand for appraisal in your own name, but you must satisfy the conditions set forth above and your written demand must also reasonably identify the holder of record of the shares of USS common stock for which demand is made, be accompanied by documentary evidence of your beneficial ownership of stock (such as a brokerage or securities account statement containing such information or a letter from a broker or other record holder of such shares confirming such information) and a statement that such documentary evidence is a true and correct copy of what it purports to be, and provide an address at which you consent to receive notices given by the surviving corporation under Section 262 of the DGCL and to be set forth on the verified list required by Section 262(f) of the DGCL. For more information, please see the section of this proxy statement entitled “Proposal 1: Adoption of the Merger Agreement — Appraisal Rights.”
Delisting and Deregistration of USS Common Stock
If the Merger is completed, the shares of USS common stock will be delisted from the NYSE and the CSE and deregistered under the Exchange Act, and shares of USS common stock will no longer be publicly traded.
Other Matters
Pursuant to the DGCL and USS’s by-laws, only the matters set forth in the Notice of Special Meeting may be brought before the Special Meeting.
Householding of Special Meeting Materials
Unless we have received contrary instructions, we may send a single copy of this proxy statement to any household at which two or more USS stockholders reside if we believe the stockholders are members of the same family. Each USS stockholder in the household will continue to receive a separate proxy card. This process, known as “householding,” reduces the volume of duplicate information received at your household and helps to reduce our expenses.
If you would like to receive your own set of our disclosure documents, please contact us using the instructions set forth below. Similarly, if you share an address with another USS stockholder and together both of you would like to receive only a single set of our disclosure documents, please contact us using the instructions set forth below.
 
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If you are a USS stockholder of record, you may contact us by writing to our Corporate Secretary at 600 Grant Street, Pittsburgh, Pennsylvania 15219 or by calling our proxy solicitor, Innisfree M&A Incorporated, at (877) 825-8621. Eligible stockholders of record receiving multiple copies of this proxy statement can request householding by contacting us in the same manner. If a bank, broker or other nominee holds your shares, please contact your bank, broker or other nominee directly.
Questions and Additional Information
If you have any questions concerning the Merger, the Special Meeting or this proxy statement, would like additional copies of this proxy statement or need help voting your shares of USS common stock, please contact our proxy solicitor:
INNISFREE M&A INCORPORATED
501 Madison Avenue, 20th Floor
New York, NY 10022
Stockholders May Call Toll-Free: (877) 825-8621
Brokers May Call Collect: (212) 750-5833
 
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PROPOSAL 1: ADOPTION OF THE MERGER AGREEMENT
This discussion of the Merger is qualified in its entirety by reference to the Merger Agreement, a copy of which is attached to this proxy statement as Annex A and incorporated into this proxy statement by reference. You should carefully read and consider the entire Merger Agreement, which is the legal document that governs the Merger, because it contains important information about the Merger and how it affects you.
Parties Involved in the Merger
United States Steel Corporation
600 Grant Street
Pittsburgh, Pennsylvania 15219
USS, with operations in the United States of America (U.S.) and Central Europe, is transforming itself into a customer-centric, world-competitive, Best for All® steelmaker by investing in the competitive advantages that differentiate USS in its customers’ eyes. USS is executing on its strategy by investing where it has distinct cost and capability advantages so that it is a superior steel solutions provider for its customers. By offering the new steels that its customers are increasingly demanding, USS aims to achieve world-competitive positioning in strategic, high-margin end markets and deliver high-quality, value-added products and innovative solutions utilizing a lower carbon footprint than previously available through its traditional integrated steelmaking model.
During 2023, USS had annual raw steel production capability of 22.4 million net tons (17.4 million tons in North America and 5.0 million tons in Europe). USS performs a wide range of applied research, development and technical support functions at facilities in Pennsylvania, Michigan, Texas and Slovakia. USS supplies customers throughout the world primarily in the automotive, construction, consumer (packaging and appliance), electrical, industrial equipment, service center/distribution, structural tubing and energy (oil country tubular goods (OCTG) and line pipe) markets. According to the World Steel Association’s latest published statistics, USS is the third largest U.S. based steel producer and the twenty-seventh largest steel producer in the world. USS is a Delaware corporation established in 1901. USS’s principal executive offices are located at 600 Grant Street, Pittsburgh, Pennsylvania 15219, and its telephone number is (412) 433-1121. USS common stock is listed on the NYSE and the CSE under the symbol X.
Nippon Steel Corporation
2-6-1 Marunouchi, Chiyoda-ku
Tokyo 100-8071, Japan
NSC is Japan’s largest steelmaker and one of the world’s leading steel manufacturers. NSC has a global crude steel production capacity of approximately 66 million tons and employs approximately 100,000 people throughout the world. NSC’s primary manufacturing base is in Japan and the company has presence in 15 additional countries. NSC has focused on building cooperative and good relationships with employees, labor unions, suppliers, customers, and communities in the United States. As the ‘Best Steelmaker with World-Leading Capabilities,’ NSC pursues world-leading technologies and manufacturing capabilities and contributes to society by providing excellent products and services. NSC’s principal executive offices are located at 2-6-1 Marunouchi, Chiyoda-ku, Tokyo 100-8071, Japan, and its telephone number is +81-3-6867-4111. NSC is a publicly traded company listed on the Tokyo Stock Exchange, the Sapporo Securities Exchange, the Nagoya Stock Exchange and the Fukuoka Stock Exchange.
Nippon Steel North America, Inc.
920 Memorial City Way, Suite 700
Houston, Texas 77024
Parent is a wholly owned subsidiary of NSC. Parent is a holding company through which NSC owns businesses that conduct operations in the United States. Parent’s principal executive offices are located at 920 Memorial City Way, Suite 700, Houston, Texas 77024, and its telephone number is (713) 654-7111.
 
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2023 Merger Subsidiary, Inc.
c/o Nippon Steel North America, Inc.
920 Memorial City Way, Suite 700
Houston, Texas 77024
Merger Sub is a wholly owned subsidiary of Parent and was incorporated on December 15, 2023, solely for the purpose of engaging in the transactions contemplated by the Merger Agreement, and has not engaged in any activities other than in connection with or as contemplated by the Merger Agreement.
Effect of the Merger
On the terms and subject to the conditions of the Merger Agreement, and in accordance with the DGCL, at the Effective Time, Merger Sub will merge with and into USS, the separate corporate existence of Merger Sub will cease and USS will continue its corporate existence under DGCL as the Surviving Corporation. As a result of the Merger, USS will become a wholly owned subsidiary of Parent, and USS common stock will no longer be publicly traded and will be delisted from the NYSE and the CSE. In addition, USS common stock will be deregistered under the Exchange Act, and USS, and from and after the Effective Time the Surviving Corporation, will no longer file periodic or other reports with the SEC. If the Merger is completed, you will have the right to receive the Merger Consideration, but you will no longer have any rights as a stockholder of USS (except that stockholders who properly and validly exercise their appraisal rights will have the right to receive a payment for the “fair value” of their shares as determined under an appraisal proceeding as contemplated by Delaware law, as described in the section of this proxy statement entitled “Proposal 1: Adoption of the Merger Agreement — Appraisal Rights”).
The Effective Time will occur at such time as the certificate of merger with respect to the Merger has been duly filed with the Delaware Secretary of State or at such later date or time as may be agreed by USS and Parent and specified in the certificate of merger in accordance with the DGCL.
Effect on USS If the Merger Is Not Completed
If the Merger Agreement is not adopted by USS stockholders, or if the Merger is not completed for any other reason:

USS stockholders will not be entitled to, nor will they receive, any payment for their respective shares of USS common stock pursuant to the Merger Agreement;

(a) USS will remain an independent public company; (b) USS common stock will continue to be listed and traded on the NYSE and the CSE and registered under the Exchange Act; and (c) USS will continue to file periodic and other reports with the SEC;

under specified circumstances, USS will be required to pay Parent a termination fee of $565 million upon the termination of the Merger Agreement, as described in the section of this proxy statement entitled “The Merger Agreement — Termination Fee Payable by USS”; and

under specified circumstances, Parent will be required to pay USS a termination fee of $565 million upon the termination of the Merger Agreement, as described in the section of this proxy statement entitled “The Merger Agreement — Termination Fee Payable by Parent.”
Merger Consideration
USS Common Stock
At the Effective Time, by virtue of the Merger and without any action on the part of USS, Parent, Merger Sub, or the holders of any securities of USS, Parent or Merger Sub, each share of USS common stock (other than the Excluded Shares) outstanding immediately prior to the Effective Time will be converted automatically into the right to receive the Merger Consideration of $55.00 in cash, without interest, subject to any required tax withholding.
After the Merger is completed, you will have the right to receive the Merger Consideration in respect of each share of USS common stock that you own (other than any Excluded Shares) immediately prior to the
 
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Effective Time (subject to any required tax withholding), but you will no longer have any rights as a USS stockholder (except that USS stockholders who properly and validly exercise and do not withdraw their appraisal rights will have a right to receive payment of the “fair value” of their shares as determined pursuant to an appraisal proceeding, as contemplated by the DGCL). For more information, please see the section of this proxy statement entitled “Proposal 1: Adoption of the Merger Agreement — Appraisal Rights.”
Treatment of USS Equity Awards
Immediately prior to the Effective Time, and without any action on the part of Parent, USS or any other person, each Company RSU Award (or portion thereof) that is outstanding immediately prior to the Effective Time will, to the extent not vested, automatically become fully vested and be cancelled and converted into the right of the holder of each such Company RSU Award (or portion thereof) to receive (subject to any applicable withholdings) an amount in cash equal to the product of (i) the Merger Consideration, multiplied by (ii) the total number of shares of USS common stock subject to such Company RSU Award (or portion thereof) immediately prior to the Effective Time, together with any accrued and unpaid dividends corresponding to such vested Company RSU Award (or portion thereof).
Immediately prior to the Effective Time, and without any action on the part of Parent, USS or any other person, each Company PSU Award (or portion thereof) that is outstanding immediately prior to the Effective Time will, to the extent not vested, automatically become fully vested and be cancelled and converted into the right of the holder of each such Company PSU Award (or portion thereof) to receive (subject to any applicable withholdings) an amount in cash equal to the product of (i) the Merger Consideration, multiplied by (ii) the total number of shares of USS common stock subject to such Company PSU Award (or portion thereof) immediately prior to the Effective Time, together with any accrued and unpaid dividends corresponding to such vested Company PSU Award (or portion thereof). The total number of shares of USS common stock subject to a Company PSU Award will be based on actual performance for any portion of a Company PSU Award that has been earned by its terms as of the Effective Time but has not yet vested. For any portion of a Company PSU Award that has not been earned by its terms as of the Effective Time, the total number of shares of USS common stock subject to a Company PSU Award will be based on deemed achievement of the greater of (1) maximum performance, if required by the applicable award agreement as of the date of the Merger Agreement, (2) actual performance or (3) target performance through the Effective Time.
Immediately prior to the Effective Time, and without any action on the part of Parent, USS or any other person, each Company Option Award (or portion thereof) that is outstanding immediately prior to the Effective Time will, to the extent not vested, automatically become fully vested and be cancelled, and converted into the right of the holder of each such Company Option Award to receive (subject to any applicable withholdings) an amount in cash equal to the product of (i) the positive difference, if any, of the Merger Consideration minus the applicable exercise price of such Company Option Award, multiplied by (ii) the number of shares of USS common stock subject to such Company Option Award immediately prior to the Effective Time (assuming full vesting for any Company Option Award (or portion thereof) that is subject to performance-based vesting). If the exercise price of any Company Option Award (whether vested or unvested) is equal to or greater than the Merger Consideration, such Company Option Award will be cancelled without payment and will have no further force or effect.
Each Company DSU Award will be converted into the right to receive an amount in cash equal to the Merger Consideration or such other amount contemplated by the Company DSU Award and settled in accordance with the terms thereof.
Background of the Merger
The Board of Directors and USS senior management regularly review and assess USS’s industry, financial performance, prospects and long-term strategic plan with the goal of enhancing stockholder value. As part of this ongoing process, the Board of Directors and USS senior management have periodically evaluated potential strategic alternatives relating to USS and its business, including with respect to USS’s USSE segment during the period preceding announcement of the Merger. These evaluations took into account the perspectives of the Company’s stockholders, whose views were sought through the Company’s stockholder engagement program. From time to time, USS’s financial advisors, Barclays, Goldman Sachs and
 
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Evercore Group L.L.C. (which we refer to as “Evercore”), which have each historically provided financial advisory services to the Company, have assisted in this strategic alternatives review process.
In addition, USS has engaged in discussions with third parties concerning potential strategic transactions, including possible acquisitions, divestitures, joint ventures, business combinations and mergers. Members of USS’s senior management team from time to time have met or otherwise communicated informally and independently with representatives of peer companies at industry events and elsewhere regarding industry trends and the performance, business, strategic direction and prospects of their respective companies. USS is generally familiar with the businesses and operations of its peer companies, and have from time to time informally discussed potential business transactions with representatives of peer companies , but no specific terms of a potential transaction between such parties were negotiated during these informal communications.
On March 9, 2023, a representative from Company A reached out to David Burritt, the President and Chief Executive Officer of USS, requesting a meeting with the Chief Executive Officer of Company A.
On March 16, 2023, USS entered into a limited confidentiality agreement with Company A covering the anticipated meeting between USS and Company A, which was scheduled for March 20, 2023. USS senior management met with representatives from Barclays and Milbank LLP (which we refer to as “Milbank”), USS’s outside legal counsel, at various times between March 16 and March 20, 2023 to prepare for the meeting with Company A.
On March 20, 2023, the Chief Executive Officer and a member of the management team of Company A and members of the USS management team, including Mr. Burritt, Jessica Graziano, the Chief Financial Officer of USS, and Richard Fruehauf, Senior Vice President, Chief Strategy & Sustainability Officer of USS, met in Pittsburgh, Pennsylvania. During the meeting, Company A proposed exploring a joint venture between USS and Company A relating to certain of USS’s North American assets and certain of Company A’s North American assets. The proposal, which subsequently was shared with the Board of Directors, did not include any financial terms. On March 23, 2023, Mr. Burritt informed a representative of Company A that USS had carefully considered the proposal and concluded that it was not in the best interests of USS.
On June 20, 2023, a representative of Company A contacted a representative of USS to request a meeting to discuss a revised proposal.
That same day, a representative of a consortium unrelated to Company A, which included a private company, a publicly traded company and a financial sponsor (which we refer to, collectively, as “Consortium B”) contacted USS to request a meeting with Mr. Burritt, which was not scheduled.
On June 30, 2023, Consortium B submitted to USS an unsolicited, non-binding, preliminary written proposal to acquire USS’s North American Flat-Rolled (which we refer to as “NAFR”) and USSE segments for $3.45 billion in cash (which we refer to as the “June 30 Consortium B Proposal”). That same day, USS entered into a limited confidentiality agreement with Company A covering an anticipated meeting between USS and Company A, scheduled for July 13, 2023.
On July 3, 2023, USS held a special meeting of its Board of Directors virtually, during which members of USS senior management and representatives of Barclays, Goldman Sachs, and Milbank participated. Barclays and Goldman Sachs were selected by USS as financial advisors to USS based on each institution’s reputation, experience and knowledge of the industrials industry and experience advising companies in mergers and acquisitions. The Board of Directors reviewed the June 30 Consortium B Proposal and discussed the upcoming Company A meeting. Duane Holloway, the General Counsel of USS, and a representative of Milbank advised the Board of Directors of their fiduciary duties and other relevant legal matters in connection therewith. Representatives of Barclays and Goldman Sachs then discussed with the Board of Directors certain preliminary observations and perspectives regarding the financial aspects of the June 30 Consortium B Proposal and representatives of Barclays reviewed a preliminary financial analysis with respect to the June 30 Consortium B Proposal. At that meeting, after consultation with representatives of Barclays, Goldman Sachs and Milbank, the Board of Directors directed USS senior management, Barclays and Goldman Sachs to contact Consortium B to clarify certain aspects of the June 30 Consortium B Proposal and report back to the Board of Directors.
 
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On July 6, 2023, Rich Fruehauf, along with representatives of Barclays, contacted Consortium B, as directed by the Board of Directors, to clarify certain aspects of the June 30 Consortium B Proposal, including ownership of the proposed acquiring entity, the perimeter of assets to be acquired and liabilities to be assumed as part of such transaction and a preliminary valuation of certain mining assets.
On July 13, 2023, Mr. Burritt, Ms. Graziano and Mr. Fruehauf met with the Chief Executive Officer and a member of the management team of Company A in Pittsburgh, Pennsylvania. During that meeting, Company A indicated that it planned to deliver a letter proposing an all-cash offer to acquire all of the outstanding shares of USS common stock and that such offer would not include a financing contingency. Financial terms of the proposal were not provided by Company A during the meeting.
On July 14, 2023, USS held a special meeting of its Board of Directors virtually, during which members of USS senior management and representatives of Barclays, Goldman Sachs and Milbank participated. The Board of Directors reviewed the June 30 Consortium B Proposal and discussed USS’s recent interactions with Company A, including the July 13, 2023 meeting and the anticipated Company A proposal. Representatives of Milbank provided an overview of the Board of Directors’ fiduciary duties and other relevant legal matters in connection therewith. Members of USS management summarized the July 6, 2023 conversation with representatives of Consortium B, including the clarifications provided by Consortium B, and the July 13 discussion with representatives of Company A. Representatives of Barclays and Goldman Sachs then discussed with the Board of Directors certain preliminary observations and perspectives regarding the financial aspects of the June 30 Consortium B Proposal and reviewed a preliminary financial analysis with respect to the June 30 Consortium B Proposal. Following discussion with representatives of Barclays, Goldman Sachs and Milbank, the Board of Directors directed USS senior management, Barclays and Goldman Sachs to convey to representatives of Consortium B USS’s view as to a potential scope of any asset sale transaction with Consortium B that USS might determine to consider (which assets would exclude USS’s Minntac and Keetac mining operations) negotiate and enter into a confidentiality agreement with Consortium B in order to share confidential information regarding the Company to facilitate a proposal for USS’s preferred transaction scope, and to request that Consortium B provide an updated proposal with respect to USS’s preferred transaction scope.
On July 17, 2023, USS received an unsolicited written, non-binding indication of interest from Company A proposing to acquire all of the outstanding shares of USS common stock at a price of $31.50 per share in cash (which we refer to as the “July 17 Company A Proposal”), which noted that the proposal was not subject to any financing condition, that Company A would be able to expeditiously complete due diligence and negotiate a mutually agreeable merger agreement in parallel, and that Company A’s outside legal counsel had conducted a preliminary antitrust review of the potential combination with USS and expressed confidence in Company A’s ability to identify clear pathways to procure all applicable regulatory approvals.
On July 19, 2023, USS held a special meeting of its Board of Directors virtually to review the July 17 Company A Proposal, during which members of USS senior management and representatives of Barclays, Goldman Sachs and Milbank participated. Mr. Holloway provided a review of the Board of Directors’ fiduciary duties and other relevant legal matters in connection therewith. During that meeting, members of USS senior management and representatives of Barclays and Goldman Sachs summarized recent discussions with Consortium B relating to the June 30 Consortium B Proposal. Representatives of Barclays and Goldman Sachs then provided a preliminary review, based on publicly available information, with respect to the financial aspects of the July 17 Company A Proposal and responded to feedback from members of USS senior management and the Board of Directors. Representatives of Milbank commented that the July 17 Company A Proposal presented certain regulatory risks, including substantial execution risk under U.S. antitrust laws, that should be considered as part of the overall assessment of that proposal. It was noted, at the request of the Board of Directors, that Barclays and Goldman Sachs would prepare a review of potential alternatives for the Company to be presented at an upcoming meeting of the Board of Directors scheduled for the following week.
On July 21, 2023, Goldman Sachs delivered to USS a relationship disclosure letter, which was later shared with the Board of Directors, providing certain information regarding Goldman Sachs’ relationships with Company A and Consortium B. Such relationship disclosure letter was subsequently updated from time to time, including with respect to other bidders, and shared with the Board of Directors.
 
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From July 23 to July 25, 2023, USS held a regularly scheduled meeting of the Board of Directors at USS headquarters in Pittsburgh, Pennsylvania. During the July 24, 2023 session, the Board of Directors met with members of USS senior management and representatives of Barclays, Goldman Sachs and Milbank to discuss potential alternatives, including USS’s standalone strategic plan, the unsolicited June 30 Consortium B Proposal, the July 17 Company A Proposal and other potential transactions that could be pursued by the Company. A representative of Milbank provided a review of the Board of Directors’ fiduciary duties and the relevant legal matters in connection therewith, and members of USS senior management provided an update on conversations relating to the June 30 Consortium B Proposal, including that a confidentiality agreement between USS and Consortium B was in near-final form. Members of USS senior management then presented an overview of USS’s then-current standalone ten-year strategic plan, including unaudited prospective financial information for USS, as further described in the section of this proxy statement titled “Certain Financial Projections.” Representatives of Barclays and Goldman Sachs provided the Board of Directors with an overview of potential strategic alternatives for the Company as well as their respective preliminary financial analyses with respect to the financial aspects of each of the July 17 Company A Proposal and the June 30 Consortium B Proposal. A representative of Milbank advised the Board of Directors that the July 17 Company A Proposal presented certain regulatory risks, including substantial execution risk under U.S. antitrust laws. At that meeting, after careful review and deliberation with the members of USS senior management and representatives of Barclays, Goldman Sachs and Milbank present at the meeting of the Board of Directors, and taking into account the preliminary financial analysis prepared by Barclays and Goldman Sachs, the Board of Directors unanimously determined that the July 17 Company A Proposal was not in the best interests of the Company’s stockholders and directed Mr. Burritt to inform the Chief Executive Officer of Company A of such determination.
On July 24, 2023, USS entered into a mutual confidentiality agreement with Consortium B.
On July 27, 2023, Barclays delivered to USS a relationship disclosure letter, which was later shared with the Board of Directors, providing certain information regarding Barclays’ relationships with Company A and Consortium B. Such relationship disclosure letter was subsequently updated from time to time, including with respect to other bidders, and shared with the Board of Directors.
On July 28, 2023, USS announced its earnings for the second fiscal quarter of 2023, including an update on USS’s Best For All® strategy. Among other items, USS disclosed that its ongoing strategic projects remained on track and fully funded and that USS was prioritizing direct returns to stockholders consistent with its capital allocation framework.
On July 28, 2023, Mr. Burritt received a phone call from Lourenco Goncalves, the Chairman, President and Chief Executive Officer of Cleveland-Cliffs Inc. (which we refer to as “Cleveland-Cliffs”), indicating that Cleveland-Cliffs would be submitting a proposal for a transaction with USS. Shortly after that call, Mr. Burritt and the Board Chair of USS, David Sutherland, received an unsolicited, non-binding letter from Cleveland-Cliffs proposing to acquire all of the outstanding shares of USS common stock at a price of $35.00 per share, to be paid 50% in cash and 50% in Cleveland-Cliffs’ stock (which we refer to as the “July 28 Cleveland-Cliffs Proposal”). The letter stated that a response was required by August 7, 2023.
On August 2, 2023, Mr. Burritt contacted the Chief Executive Officer of Company A to convey that the Board of Directors had unanimously determined that the July 17 Company A Proposal was not in the best interests of USS stockholders.
On August 3, 2023, the Board of Directors, with members of USS senior management and representatives of Barclays, Goldman Sachs, Milbank and Wachtell, Lipton, Rosen and Katz, outside legal counsel to USS (which we refer to as “Wachtell”), present, held a special meeting of the Board of Directors virtually to review the July 28 Cleveland-Cliffs Proposal. Mr. Holloway provided a review of the Board of Directors’ fiduciary duties and other relevant legal matters. Representatives of Barclays and Goldman Sachs then provided their respective preliminary financial analyses with respect to the July 28 Cleveland-Cliffs Proposal, reviewed the financial aspects of each of the June 30 Consortium B Proposal, the July 17 Company A Proposal and the July 28 Cleveland-Cliffs Proposal, and provided an overview of other potential alternatives for USS. Representatives of Milbank discussed certain regulatory considerations with respect to the July 28 Cleveland-Cliffs Proposal, including their views, based on publicly available information, that a combination with Cleveland-Cliffs posed substantial execution risk under U.S. antitrust laws. Following
 
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discussion with members of USS senior management and representatives of Barclays, Goldman Sachs, Milbank and Wachtell, the Board of Directors directed members of USS senior management and Barclays and Goldman Sachs to seek clarification from Cleveland-Cliffs with respect to the proposed exchange ratio contemplated by the July 28 Cleveland-Cliffs Proposal, as well as the anticipated transaction synergies, the intrinsic value of Cleveland-Cliffs’ stock portion of the proposed consideration and regulatory risk. The Board of Directors also directed members of USS senior management, Barclays and Goldman Sachs to continue to work with Consortium B so that Consortium B would be in a position to submit a revised proposal, and to identify other potential parties that may be interested in a potential acquisition of parts or all of USS and/or other strategic alternatives.
On August 4, 2023, representatives of Barclays and Goldman Sachs contacted representatives of Cleveland-Cliffs’ financial advisor, to seek clarification from Cleveland-Cliffs with respect to the proposed exchange ratio, intrinsic value and anticipated transaction synergies, and to request that legal counsel for both parties discuss the potential antitrust risk associated with a potential transaction.
On August 5, 2023, Mr. Holloway and representatives of Milbank spoke with James Graham, Cleveland-Cliffs’ General Counsel, and representatives of Cleveland-Cliffs’ outside legal counsel to discuss antitrust considerations in connection with the July 28 Cleveland-Cliffs Proposal. Also on August 5, 2023, Cleveland-Cliffs provided USS with a letter from the United Steel, Paper and Forestry, Rubber, Manufacturing, Energy, Allied Industrial and Service Workers International Union (which we refer to as the “USW”) in support of the July 28 Cleveland-Cliffs Proposal.
On August 7, 2023, Mr. Burritt sent a letter to Mr. Goncalves requesting that USS and Cleveland-Cliffs enter into a customary confidentiality agreement, including a standstill, in order for the Board of Directors to be able to evaluate the July 28 Cleveland-Cliffs Proposal.
On August 11, 2023, Mr. Goncalves sent USS a letter stating that Cleveland-Cliffs was (i) unwilling to sign a confidentiality agreement and (ii) proposing consideration of $17.50 in cash and 1.023 shares of Cleveland-Cliffs per share of USS common stock (which we refer to as the “August 11 Cleveland-Cliffs Proposal”), valued at $32.54 per share based on the closing price of Cleveland-Cliffs’ common stock on August 10, 2023. The letter also required a response by August 13, 2023.
Later on August 11, 2023, USS held a special meeting of its Board of Directors virtually, during which members of USS senior management and representatives of Barclays, Goldman Sachs, Milbank, Wachtell and Joele Frank, Wilkinson Brimmer Katcher, USS’s communications advisor (which we refer to as “Joele Frank”), participated. A representative of Milbank provided an overview of the Board of Directors’ fiduciary duties and other relevant legal matters. Members of USS management and representatives of Barclays and Goldman Sachs then summarized recent discussions with Cleveland-Cliffs’ financial advisors and legal counsel. Representatives of the financial and legal advisors then discussed the August 11 Cleveland-Cliffs Proposal. At that meeting, following discussion, and after taking into consideration the information provided by and discussed with USS senior management and representatives of the financial and legal advisors, the Board of Directors determined that it was unable to fully and adequately assess the August 11 Cleveland-Cliffs Proposal without more information from Cleveland-Cliffs and therefore determined to reject the August 11 Cleveland-Cliffs Proposal based on, among other things, a lack of detailed information needed to evaluate that proposal, Cleveland-Cliffs’ unwillingness to enter into a confidentiality agreement and the receipt by USS of indications of interest from other bidders. The Board of Directors then authorized an exploration of a strategic alternatives review process and directed USS senior management to publicly announce the process. The Board of Directors also instructed USS senior management to inform Cleveland-Cliffs that the August 11 Cleveland-Cliffs Proposal was not in the best interests of the Company’s stockholders, and to invite Cleveland-Cliffs to participate in USS’s strategic alternatives review process.
At noon on August 13, 2023, USS publicly announced the Board of Directors’ determination to review strategic alternatives to maximize stockholder value. Members of USS senior management and representatives of Barclays and Goldman Sachs, at the direction of the Board of Directors, contacted representatives of Consortium B and Company A to discuss the strategic alternatives review process and to invite them to participate. USS also sent Cleveland-Cliffs a written rejection of the August 11 Cleveland-Cliffs Proposal as directed by the Board of Directors. Mr. Burritt also called Mr. Thomas Conway, the then-president of the USW, to notify the USW of the Board of Directors’ determination to review strategic alternatives.
 
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In the afternoon of August 13, 2023, Cleveland-Cliffs issued a press release announcing its offer to acquire USS on the same terms previously communicated to USS on August 11, 2023.
On August 14, 2023, Esmark Inc. (which we refer to as “Esmark”) issued a press release announcing “a voluntary public cash and exchange offer” for shares of USS common stock at a price of $35 per share of USS common stock, subject to regulatory and antitrust clearances.
On August 14, 2023, representatives of Company C contacted representatives of Barclays and Goldman Sachs to express their interest in participating in USS’s strategic alternatives review process. That same day, Mr. Burritt and the Chief Executive Officer of Company C had a discussion via telephone during which the Chief Executive Officer of Company C expressed interest in participating in USS’s strategic alternatives review process.
On August 15, 2023, Cleveland-Cliffs sent a letter to USS proposing to reengage on the confidentiality agreement, permit antitrust counsel to agree on an information-sharing protocol and enable the companies’ respective financial advisors to facilitate sharing of the companies’ business and financial plans.
On August 16, 2023, Ms. Graziano, Mr. Fruehauf and other members of the USS finance, strategy and legal teams and representatives from Barclays met with representatives of Consortium B in New York City to discuss the operations of the USS assets within the scope of a potential transaction.
On August 17, 2023, in order to provide clarity regarding how the USW’s basic labor agreements (which we refer to, collectively, as the “Basic Labor Agreement”) related to USS’s strategic alternatives review process, USS filed a Current Report on Form 8-K furnishing the Basic Labor Agreement and certain other related materials. The disclosure clarified that the Basic Labor Agreement does not provide the USW with a right to veto a transaction that may result from USS’s strategic alternatives review, but does provide the USW with successorship rights and a right to bid within 45 days of delivery of notice pursuant to the Basic Labor Agreement. The materials also reiterated that USS was conducting a thorough strategic alternatives review process and the Board of Directors was committed to evaluating all proposals on a level playing field to determine the best outcome for stockholders.
Later on August 17, 2023, Mr. Conway sent Mr. Burritt a letter via email stating that the USW had transferred and assigned to Cleveland-Cliffs the rights granted to the USW pursuant to the Basic Labor Agreement’s “right to bid” provisions (which we refer to as the “Right to Bid Assignment”). The letter noted that Mr. Conway would advise Mr. Burritt in writing should anything change regarding the Right to Bid Assignment. Cleveland-Cliffs issued a press release announcing the Right to Bid Assignment and subsequently filed a copy of the assignment with the SEC.
Also on August 17, 2023, representatives of Consortium B emailed Mr. Fruehauf to request the ability to expand its proposal to include the possibility of a whole-company proposal or other alternative structures.
In addition to responding to potential strategic and financial counterparties who contacted USS and representatives of Barclays and Goldman Sachs to express interest in USS, on August 18, 2023, representatives of Barclays and Goldman Sachs, at the direction of the Board of Directors, began outreach to additional potentially interested parties to solicit interest in a transaction involving USS, including NSC. During the process, representatives of Barclays and Goldman Sachs contacted or were contacted by 54 separate potential counterparties to a potential strategic transaction with USS, including 31 potential strategic parties and 23 potential financial parties.
From mid-August 2023, through the end of September 2023, representatives of Milbank, on behalf of USS, negotiated confidentiality agreements with various potential counterparties, including NSC, which executed a mutual confidentiality agreement with USS on August 26, 2023, Company A, Company C, Company D and other potential strategic and financial counterparties. During the process, USS entered into confidentiality agreements with 19 potential counterparties. Certain of the confidentiality agreements included standstill provisions for specified periods of time. With respect to Company A, Consortium B, Company C and Company D, those standstills terminated at or prior to the announcement of the merger agreement with NSC.
 
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On August 21, 2023, USS received a revised, non-binding proposal from Consortium B reconfirming its offer of $3.45 billion to acquire USS’s NAFR and USSE segments or, alternatively, an offer of $3.0 billion to acquire the same assets, other than USS’s Keetac mining operations.
On August 23, 2023, Esmark announced in a press release that it would not participate in the Company’s strategic alternative review process.
On August 25, 2023, USS held an information session for its Board of Directors regarding the strategic alternative review process, during which representatives of USS senior management, Barclays, Goldman Sachs, Milbank and Wachtell participated. Representatives of Barclays and Goldman Sachs provided an update on the strategic alternatives review process, including on discussions with potentially interested parties.
On August 26, 2023, USS and Company D entered into a one-way confidentiality agreement providing for the disclosure of confidential information regarding Company D to USS. That same day, USS and Company D entered into a joint defense agreement to permit the exchange of information necessary to progress the analysis of the antitrust risk associated with a potential acquisition of USS by Company D.
During the period between late August and mid-December 2023, a dozen or more conference calls, video conferences and meetings were held between representatives of Milbank and Company D’s legal counsel to share information regarding, and to discuss, the antitrust analysis and risks associated with a potential combination of USS and Company D, including with respect to the significant competitive overlaps between USS and Company D and likely opposition by key customer segments (notably U.S. auto manufacturers) who would be influential in any regulatory review.
On August 28, 2023, USS publicly released a letter to its stockholders stating that it had entered into confidentiality agreements with third parties and was beginning to share due diligence information with potential counterparties.
Beginning on August 29, 2023, parties that had signed confidentiality agreements were provided access to an electronic dataroom containing a confidential information memorandum regarding USS and certain non-public financial information regarding USS, including the first six years of the Management Base Plan (i.e., 2023 through 2028) (as defined in the section of this proxy statement titled “Certain Financial Projections”). See “Certain Financial Projections” for additional information on the financial projections provided to potential counterparties as part of the USS strategic alternatives review process.
Beginning on August 30, 2023, potential counterparties to a strategic transaction were provided with a process letter specifying that initial indications of interest should be submitted to Barclays and Goldman Sachs on September 20, 2023.
On September 1, 2023, USS received an unsolicited, non-binding letter from Company D proposing to acquire USS for $23.00 in cash and 1.023 shares of Company D common stock per share of USS common stock (which we refer to as the “Company D September 1 Proposal”), valued at $38.64 per share based on the closing price of Company D common stock on August 31, 2023. The Company D September 1 Proposal was accompanied by a form of merger agreement that disclaimed any obligation to commit to divestitures necessary to obtain regulatory approval, and did not propose a reverse termination fee payable to USS in the event of a failure to obtain regulatory approval (which we refer to as a “reverse termination fee”).
On September 5, 2023, USS sent a letter to the USW and Cleveland-Cliffs formally notifying them, in compliance with notice obligations under the Basic Labor Agreement, that USS had initiated a formal review process to evaluate strategic alternatives for USS aimed at maximizing stockholder value. The letter also confirmed that, in compliance with the “right to bid” provisions of the Basic Labor Agreement, the USW was entitled to a 45-day period to submit a bid for USS, and that USS would not enter into any transaction agreement for 45 days following September 5, 2023. The letter also attached a form of confidentiality agreement consistent with the form provided to other bidders and noted that, subject to execution of the confidentiality agreement, USS would provide the USW with information provided to other potential bidders and updates on the strategic alternatives review process. No confidentiality agreement was ever signed with the USW. The letter further noted that Cleveland-Cliffs, as the assignee of the USW’s right to bid pursuant to the Right to Bid Assignment, had already submitted a bid, and invited Cleveland-Cliffs to enter into a
 
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nondisclosure agreement to permit Cleveland-Cliffs to receive confidential information regarding USS and the strategic alternatives review process.
Also on September 5, 2023, Ms. Graziano, Mr. Fruehauf and other members of the USS finance and legal teams and representatives from Barclays and Goldman Sachs met by videoconference with representatives from Company D and its financial advisors to discuss the Company D financial model, projections and underlying assumptions as part of the assessment of the stock component of the Company D September 1 Proposal. Representatives from Company D also described broad categories of potential transaction synergies and potential estimates based on Company D’s historical achievement of transaction synergies with respect to prior transactions unrelated to and not involving USS. The parties further discussed Company D’s commodity price assumptions and business plan, including planned capital expenditures, assumptions for the business’ future balance sheet and capital allocation strategy and the rationale for, and expected timing to achieve, Company D’s expected transaction synergies. USS also identified other areas of continued focus in order to assess the value of the stock component of the Company D September 1 Proposal, including environmental, pension and other liabilities.
On September 6, 2023, USS held a special meeting of its Board of Directors virtually, during which members of USS senior management and representatives of Barclays, Goldman Sachs, Milbank, Wachtell and Joele Frank participated. Representatives of Barclays and Goldman Sachs updated the Board of Directors on communications with Company D, including commencing diligence and reverse due diligence on the stock component of the Company D September 1 Proposal.
On September 8, 2023, Mr. Burritt and Mr. Holloway had a call with the Chief Executive Officer and the general counsel of Company D to provide an update that USS was working diligently to fully assess the Company D September 1 Proposal. Mr. Burritt also offered to formally invite Company D to participate in the strategic alternatives review process, subject to Company D’s execution of a customary confidentiality agreement. Mr. Burritt also sent a letter to the Chief Executive Officer of Company D memorializing the conversation.
On September 15, 2023, Mr. Burritt, Ms. Graziano, Mr. Fruehauf and other members of the USS financial and legal teams, together with representatives from Barclays, Goldman Sachs and Milbank, met via videoconference with representatives of Company D and its financial and legal advisors to discuss Company D’s strategic rationale for a transaction, including Company D’s business performance, Company D’s views on the outlook for the U.S. steel industry and Company D’s expectations with respect to the operations and financial profile of a potential post-closing combined company.
On September 18, 2023, Mr. Burritt had a telephone conference with the Chief Executive Officer of Company A, in which they discussed the upcoming deadline for preliminary indications of interest, and Mr. Burritt reiterated that the strategic alternatives review process would be competitive.
On September 19, 2023, Mr. Burritt had a telephone conference with the Chief Executive Officer of Company C, in which they discussed the upcoming deadline for preliminary indications of interest, and Mr. Burritt reiterated that the strategic alternatives review process would be competitive.
From September 20 to September 25, 2023, USS received eight additional non-binding indications of interest to acquire all or parts of USS. Consortium B, in partnership with another strategic party, submitted a proposal to acquire all of the outstanding shares of USS common stock for $31.00 per share in cash. Company A submitted a proposal to acquire all of the outstanding shares of USS common stock for $36.50 per share. On September 20, 2023, NSC submitted a proposal to acquire USS’s Mini Mill segment and its Keetac mining operations for an enterprise value of $9.2 billion and indicated a willingness to potentially submit a proposal to acquire all of the outstanding shares of USS common stock. Company C submitted a proposal to acquire USS’s Mini Mill segment, and its USS-UPI and Keetac mining operations for an enterprise value of approximately $8 billion and conveyed a willingness to potentially submit an updated proposal to acquire all of the outstanding shares of USS common stock. Consortium B also submitted a proposal to acquire USS’s NAFR segment (excluding its Keetac mining operations) for an enterprise value of $3 billion. Three other parties also submitted proposals to acquire specific assets of USS: a proposal under which USS would spin off its Mini Mill segment and Keetac mining operations and merge them into a new public parent of the proposed bidder, at an implied enterprise value for the USS assets of $6.6 billion to
 
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$9.2 billion; a proposal to acquire USS’s Mini Mill segment for an enterprise value of $5 billion; and a proposal to acquire USS’s Keetac mining operations for a value of $600 million.
On September 22, 2023, representatives of Barclays and Goldman Sachs, at the direction of the Board of Directors, contacted representatives of NSC to confirm NSC’s intention regarding its willingness to potentially submit a proposal to acquire all of the outstanding shares of USS common stock, and representatives of Barclays and Goldman Sachs, at the direction of the Board of Directors, encouraged the representatives of NSC to do so.
On September 27, 2023, Company C submitted an updated proposal to acquire the entirety of USS for $37.00 per share of USS common stock in cash, conditioned on finding partners to acquire all USS assets other than its Mini Mill segment, USS-UPI and Keetac mining operations. Also on September 27, 2023, NSC submitted an update to its earlier proposal to acquire USS’s Mini Mill segment and its Keetac mining operations for an enterprise value of $9.2 billion, which indicated a willingness to potentially submit a proposal to acquire all of the outstanding shares of USS common stock, to specify that it estimated that a proposal to acquire all of the outstanding shares of USS common stock would be for an enterprise value of $9.5 billion.
Also on September 27, 2023, USS held a special meeting of its Board of Directors virtually, during which members of USS senior management and representatives of Barclays, Goldman Sachs, Evercore, Milbank and Wachtell participated. Evercore was selected by USS as an additional financial advisor based on its reputation, experience and knowledge of the industrials industry and experience advising companies in mergers and acquisitions, and not by reason of any conflict of interest relating to Barclays or Goldman Sachs. Representatives from Wachtell provided a review of the Board of Directors’ fiduciary duties and other relevant legal matters in connection therewith. USS senior management reviewed again with the Board of Directors the September 2023 Projections, as further described in the section of this proxy statement titled “Certain Financial Projections.” Representatives of Barclays and Goldman Sachs reviewed their respective preliminary financial analyses of USS based on the September 2023 Projections, then discussed the financial aspects of the preliminary proposals received to that date. Among other matters, the Board of Directors considered the possibility of pursuing transactions with multiple parties that submitted indications of interest with respect to specific assets. In considering the various transaction proposals that were received, the Board of Directors took into account the potential incremental execution risk, tax leakage and structuring complexities that would be presented by a structured transaction or an acquisition of limited assets relative to a whole company acquisition. Accordingly, participants in the strategic alternatives review process were encouraged to submit proposals for whole company acquisitions in addition to any structured proposals that they were considering. The Board of Directors also discussed the work undertaken by the Company and its financial and legal advisors to assess both the potential execution risk resulting from antitrust issues present in the proposed acquisition of USS by Company D, and the potential value of the stock component of the Company D September 1 Proposal (including the potential impact of divestitures that might be required to resolve antitrust concerns). At that meeting, after discussion, the Board of Directors directed Barclays, Goldman Sachs and USS senior management to seek to obtain a whole company acquisition proposal from NSC and to engage with other bidders to elicit revised, improved proposals. Representatives of Barclays and Goldman Sachs, at the direction of the Board of Directors, subsequently contacted representatives of NSC and suggested that NSC submit a revised proposal to acquire all of the outstanding shares of USS common stock at a higher valuation than in NSC’s September 27, 2023 proposal.
On September 28, 2023, USS and Company D entered into a mutual confidentiality agreement that included a standstill provision expiring on December 1, 2023.
Also on September 28, 2023, USS entered into an engagement letter with Goldman Sachs pursuant to which it formally retained Goldman Sachs as its financial advisor in connection with the strategic alternatives review process.
On October 5, 2023, Company A submitted a revised proposal that contemplated the formation of a new publicly traded entity that would own USS and select assets of Company A. Such proposal stated that it implied a value of $40.50 per share of USS common stock. Under Company A’s proposal (which we refer to as the “Company A Structured Proposal”), USS stockholders would receive cash and approximately 35% of the outstanding shares of the newly formed entity and Company A would own the remaining 65% of the
 
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outstanding shares of the newly formed entity. Representatives of Barclays and Goldman Sachs, at the direction of the Board of Directors, informed the financial advisors for Company A that while USS would evaluate the Company A Structured Proposal, Company A should also submit a cash and/or stock proposal to improve its competitive positioning.
On October 5, 2023, following discussions between representatives of Barclays and Goldman Sachs and NSC’s financial advisor, based on feedback from the Board of Directors, NSC submitted a written, non-binding indication of interest to acquire USS’s Mini Mill segment and its Keetac mining operations for an enterprise value of $9.2 billion or, in the alternative, to acquire all of the outstanding shares of USS common stock for consideration of $41.40 per share in cash.
On October 9, 2023, five parties (Company A, Consortium B, Company C, Company D and NSC), received a letter inviting them to participate in the next phase of USS’s strategic alternatives review process, and indicating that parties could participate in management due diligence sessions and site visits during the upcoming weeks.
On October 10, 2023, Mr. Burritt and the Chief Executive Officer of Company A had a telephone conference to discuss the details of the Company A Structured Proposal, including the proposed valuation of assets to be contributed by the respective parties in such transaction and the relative pro forma equity ownership of the combined company on that basis, as well as potential transaction synergies and due diligence. Mr. Burritt communicated that the relative value ascribed to assets to be contributed by USS (and the corresponding pro forma equity ownership in respect thereof) was insufficient.
Beginning on October 20 through November 11, 2023, members of USS management met with representatives of the five parties that had been invited to participate in the next phase of USS’s strategic alternatives review process for management presentations, site visits and subject matter discussions. Members of USS management and representatives of Barclays and Goldman Sachs also responded to due diligence information requests from those parties through the end of November 2023.
From October 23, 2023 to October 24, 2023, the Board of Directors held a regularly scheduled in-person meeting of the Board of Directors in Pittsburgh, Pennsylvania, with members of USS senior management and representatives of Barclays, Goldman Sachs, Evercore, Milbank, and Wachtell present. The engagement of each of Barclays and Goldman Sachs was approved by the Board of Directors. Representatives from Wachtell provided a review of the Board of Directors’ fiduciary duties and other relevant legal matters. Representatives from Milbank discussed their preliminary assessment of antitrust risk and considerations with respect to each participating party, including the extent to which a transaction with Company A or Company D presented material and substantial antitrust execution risk (including divestiture risk), while a transaction with NSC, Consortium B or Company C presented significantly less antitrust execution risk. In particular, representatives from Milbank noted that a transaction with either Company A or Company D would combine two of the top suppliers of certain steel products to the United States automobile industry. In addition, a transaction with Company D would eliminate the sole new competitor in non-grain-oriented steel production in North America as well as eliminate a competitive threat to Company D’s incumbent position in the United States, and put up to 95% of iron ore production in the United States under the control of a single company. Representatives of Barclays and Goldman Sachs then provided a general update on the strategic alternative review process and a preliminary review with respect to the financial aspects of the Company A Structured Proposal and the other proposals received. The Board of Directors was also informed that Covington & Burling LLP (which we refer to as “Covington”) had been retained by USS as outside CFIUS counsel and that Covington’s preliminary views were that although CFIUS filings would be merited for certain parties, including NSC, it did not anticipate that any of those transactions would implicate unresolvable national security concerns based on the identity of the counterparties.
On October 24, 2023, USS entered into an engagement letter with Barclays pursuant to which it formally retained Barclays as its financial advisor in connection with the strategic alternatives review process.
On October 30, 2023, Mr. Burritt and the Chief Executive Officer of Company A discussed via telephone matters related to safety, due diligence and the Company A Structured Proposal. During the
 
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discussion, Mr. Burritt requested additional information with respect to the assets proposed to be contributed by Company A so as to assess the Company A Structured Proposal. Mr. Burritt and the Chief Executive Officer of Company A also agreed to schedule a meeting between the respective management teams of USS and Company A.
On October 31, 2023, the five parties that had been invited to participate in the next phase of USS’s strategic alternatives review process, received a process letter with instructions for the submission of revised proposals. The letter included a submission deadline of December 1, 2023, and notified bidders that a draft transaction agreement would be made available on November 10, 2023, with initial markups requested by November 20, 2023. In addition, at the direction of the Board of Directors, representatives of Barclays and Goldman Sachs communicated to representatives of Consortium B that USS might be willing to pair Consortium B with another bidder yet to be decided that is seeking to acquire the remainder of USS. Company C, among other bidders, was viewed by USS as a potential partner for Consortium B.
Also on October 31, 2023, the Alliance for Automotive Innovation, an association representing automobile manufacturers that produce vehicles sold in the United States, wrote a letter to members of Congress expressing its concern with the proposed acquisition by Cleveland-Cliffs of USS and urging them to “examine the potential for anti-competitive pricing of materials used by the steel-reliant automotive manufacturers” as a result of such a consolidation of steel production capacity, which would “further increase costs across the [automotive] industry for both materials and finished vehicles, slow EV adoption by driving up costs for customers, and put domestic automakers at a competitive disadvantage relative to manufacturers using steel from other parts of the world.” Specifically, the Alliance for Automotive Innovation stated that a transaction resulting in a combination of Cleveland-Cliffs and USS would result in combined control of (i) 100% of blast furnace production in the U.S., (ii) more than 90% of U.S. advance high strength steel used for automotive underbody panels, bodyside reinforcements and impact areas, (iii) 80% of body in white steel used to produce a vehicle’s structural frame and (iv) 65% of U.S. exposed grade steel used for automotive surface panels like doors, hoods and fenders.
Also beginning on October 31, 2023 and continuing through the first two weeks of November 2023, representatives of various parties, including NSC, Company A, Consortium B, Company C and Company D, conducted visits to multiple USS operational sites. During this period, USS continued to hold diligence calls and management presentations with participating parties.
On November 10, 2023, representatives of Milbank and Wachtell sent representatives of NSC, Company A, Company C, Company D and Consortium B a draft merger agreement. The draft merger agreement included, among other things, a “hell or high water” antitrust efforts covenant, a fee (amount to be determined) payable to USS in the event of a termination of the merger agreement due to the failure to obtain regulatory approvals related to antitrust and CFIUS, and a requirement that the potential bidder assume USS’s obligations to the USW set forth in the Basic Labor Agreement. After discussions the following week with respect to potential transaction structures for Consortium B, on November 20, 2023, representatives of Milbank and Wachtell circulated a draft carve-out transaction agreement to legal counsel for Consortium B.
On November 20, 2023, NSC, Company A, Company C and Company D provided mark-ups of the draft merger agreements. NSC’s draft included no reverse termination fee and no “hell or high water” regulatory efforts covenants, but NSC did propose that it would agree to take certain specified actions if necessary to obtain antitrust approval. Company D’s draft included a commitment to take certain actions to address antitrust concerns, including divestitures of assets generating up to $2 billion of revenue, as well as a reverse termination fee of $500 million. On November 24, 2023, representatives of Milbank and Wachtell met via videoconference with legal counsel for each party to provide feedback on their mark-ups of the draft merger agreement. Discussions with each party primarily focused on matters relating to closing certainty and timing. Discussions with each of Company A and Company C also related to the structure of the transactions proposed by such party. Discussions with Consortium B also related to the proposed transaction perimeter. Discussions with Company D also related to Company D’s degree of commitment to obtain antitrust clearance and the termination fees that would be payable by USS and Company D in certain circumstances. Discussions with NSC focused on their degree of commitment to obtain regulatory clearances, including CFIUS approval, and their omission of a reverse termination fee. During the strategic alternatives review process, NSC requested to meet with the USW to discuss its potential ownership of USS prior to
 
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entry into a definitive agreement. Milbank informed Ropes & Gray that such a meeting would be inappropriate in light of the need to maintain the confidentiality of the strategic alternatives review process, and in particular given that the USW was effectively a participant in the process due to the Right to Bid Assignment.
On November 21, 2023, Mr. Burritt, Ms. Graziano, Mr. Fruehauf and other members of the USS finance, strategy and legal teams and representatives of its financial and legal advisors met with representatives of Company A and its financial and legal advisors to discuss potential transaction synergies, including the optimization of operations to increase productivity and reduce costs, in connection with the Company A Structured Proposal.
On November 25, 2023, Mr. Burritt met via videoconference with certain members of NSC’s senior management, including Takahiro Mori, Representative Director and Executive Vice President of NSC. The parties discussed perspectives on USS prior to final bid submissions. Also on November 25, 2023, representatives of Milbank sent representatives of Ropes & Gray LLP (which we refer to as “Ropes & Gray”), legal counsel to NSC, feedback on NSC’s mark-up of the draft merger agreement.
On November 26, 2023, legal counsel for Consortium B sent a revised draft of the carve-out transaction agreement to representatives of Milbank and Wachtell. On November 28, 2023, representatives of Milbank and Wachtell met via videoconference with legal counsel for Consortium B to provide feedback. Discussions primarily focused on structuring a potential carve-out transaction and matters relating to closing certainty and timing.
On December 1, 2023, Mr. Burritt and the Chief Executive Officer of Company A had a telephone call during which the Chief Executive Officer of Company A informed Mr. Burritt that Company A would not be submitting a whole-company proposal.
On December 1, 2023, USS received five revised indications of interest. NSC submitted a proposal to acquire USS for $43.00 per share of USS common stock in cash. Company D submitted a proposal to acquire USS for $25.00 per share of USS common stock in cash and 1.300 shares of Company D common stock per share of USS common stock, which proposal was valued at $48.74 per USS share based on the December 1, 2023 closing price of Company D common stock. Company A indicated that it was no longer interested in pursuing the Company A Structured Proposal, but instead submitted a bid for USS’s Mini Mill and Tubular segments and Granite City Works and Keetac mining operations valued at $7.25 billion and sought to partner with Consortium B in connection with that proposed transaction. Consortium B submitted a proposal to acquire USS’s NAFR segment (other than its Keetac mining operations) and Tubular and USSE segments for $3.4 billion. Company C’s proposal to acquire the entirety of USS, which remained conditioned on finding partners to acquire all USS assets other than its Mini Mill segment, and USS-UPI and Keetac mining operations, was lower than its prior proposal submitted on September 20, 2023, which Company C attributed to newly identified costs and liabilities, including taxes, attributable to the structure of Company C’s proposal (the Company C proposal, together with the Company A and Consortium B proposal submitted on December 1 are referred to as the “December 1 Asset Sale Proposals”).
Also on December 1, 2023, NSC, Company C, Company D, and Consortium B provided revised draft transaction agreements together with their bids. NSC’s revised draft transaction agreement included a reverse termination fee equal to 2% of USS’s equity value, increased to 4% of USS’s equity value in the event of a willful breach of certain regulatory covenants by NSC, but no “hell or high water” regulatory efforts covenants, but NSC did propose that it would agree to take certain specified actions if necessary to obtain antitrust approval. Company D’s revised draft transaction agreement included a reverse termination fee of $1 billion, but no meaningful change from its November 20, 2023 draft in its commitment to actions necessary to obtain antitrust approval. Company A did not provide a draft agreement reflecting its new proposed structure.
On December 2, 2023, representatives of Barclays and Goldman Sachs notified NSC that its merger agreement markup was less competitive than others with respect to certain key deal terms, in particular regarding closing certainty, and that Milbank and Wachtell would circulate a revised draft merger agreement in the next few days.
 
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On December 3, 2023, representatives of Milbank and Wachtell sent representatives of Ropes & Gray, a revised merger agreement that included enhanced certainty and key contract terms. In particular, the revised agreement included “hell or high water” antitrust and CFIUS efforts covenants, as well as a reverse termination fee equal to an unspecified percent of USS’s equity value.
On December 5, 2023, USS held a special meeting of its Board of Directors virtually, during which members of USS senior management and representatives of Barclays, Goldman Sachs, Evercore, Milbank and Wachtell participated. Representatives from Wachtell discussed fiduciary duty considerations in connection with the strategic alternative review process and related legal matters. Representatives of Barclays and Goldman Sachs provided the Board of Directors with an update on the strategic alternatives review process and reviewed a comparison of proposals received on December 1, 2023. A representative of Milbank discussed the revised drafts of the transaction documents received with the December 1 proposals, as well as the further revised draft that was sent to NSC on December 3. The Board of Directors focused particularly on the provisions of the transaction documents affecting closing certainty and timing, as well as the provisions governing the Board of Directors’ ability to accept a competing offer should one arise following signing of an agreement with one party. The Board of Directors also discussed the fact that the Company D proposal would require a vote of Company D’s stockholders. With respect to the Company D proposal, the Board of Directors also discussed the potential impact resulting from divestitures that may be needed to obtain antitrust approvals on the value of Company D’s common stock. Representatives of Milbank advised the Board of Directors that, even if divestitures were offered that were aimed at addressing antitrust concerns, considerable risk remained that the U.S. Department of Justice would not accept those divestitures and would challenge the proposed acquisition of USS by Company D in court. Representatives of Milbank explained to the Board of Directors that this would be a challenging case for the parties to win in litigation. Representatives of Milbank also said that they were still working on an assessment of the size and scope of the divestiture package that would be needed for the parties to substantially improve their prospects of succeeding in such potential litigation. The Board of Directors was also informed that NSC had requested an in-person meeting with members of USS management and that Company D had an outstanding request to meet with members of the Board of Directors. The Board of Directors discussed and approved an in-person meeting between members of USS management and NSC on December 8, 2023, and between members of the respective management teams of, and certain members of the respective board of directors of, both USS and Company D on December 9, 2023. Following discussion, the Board of Directors directed Barclays and Goldman Sachs to seek increased value, greater closing certainty and certain other provisions from NSC and Company D. In light of the considerable antitrust risk associated with the proposed acquisition of USS by Company D and the potential material impact of any divestitures that might be required on the value of Company D’s common stock, and in order to eliminate the risk associated with the need of Company D to obtain the approval of its stockholders, the Board of Directors instructed Barclays and Goldman Sachs to seek an increase in the cash consideration, and a reduction in the quantum of Company D’s common stock included in its proposal. The Board of Directors also directed Barclays and Goldman Sachs to indicate to Company A, Company C and Consortium B that significant value increases would be required in order for their proposals to be competitive.
During the first two weeks of December 2023, members of USS management conducted site visits at certain of Company D’s facilities.
On December 8, 2023, Ms. Graziano and other representatives from the USS financial and legal teams and representatives of Barclays, Goldman Sachs and Milbank met via videoconference with representatives of Company D and its financial and legal advisors to discuss Company D’s plan to achieve its contemplated transaction synergies of $500 to $750 million. Representatives from Company D discussed categories of potential transaction synergies, including asset and capital expenditure optimization, procurement, information technology, operating expense and public company cost synergies.
On December 8, 2023, Mr. Burritt, Ms. Graziano and other members of USS’s senior management met with Mr. Mori and other members of NSC’s senior management, in Chicago, Illinois. Representatives of NSC provided an overview of NSC and its operations. At that meeting, Mr. Mori stated that he would like to discuss with USS Mr. Burritt’s post-closing employment arrangements, but did not indicate what the terms of those post-closing employment arrangements would be. Mr. Burritt stated that, while he might consider remaining with USS post-closing if there were to be a transaction with NSC, such a discussion would
 
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be premature at that time. There was no further discussion of post-closing employment arrangements at the meeting or at any point prior to the signing of the Merger Agreement. Following the meeting, the representatives of the parties attended a dinner with a representative of Barclays and NSC’s financial advisor.
Also on December 8, Consortium B and Company A informed USS of their intention to submit a joint proposal to acquire all of USS.
On December 9, 2023, at the request of Company D, Mr. Burritt, Mr. Holloway, Mr. Sutherland, John Engel, Chair of the Corporate Governance & Sustainability Committee of the Board of Directors, and Murry Gerber, Chair of the Audit Committee of the Board of Directors, met with representatives of Company D, including Company D’s Chief Executive Officer and Chief Financial Officer and two independent members of the board of directors of Company D, for a meeting and lunch in Chicago, Illinois. Representatives from Wachtell and Barclays and Company D’s legal counsel and financial advisors were also present. In order to further clarify Company D’s position with respect to antitrust matters, the parties discussed, among other things, Company D’s perspective on potential antitrust challenges to a potential combination of USS and Company D, and how to respond to such challenges. While the parties exchanged certain views relating to these topics, they did not engage in a negotiation of terms of the merger agreement at this meeting.
On December 11, 2023, representatives of Ropes & Gray sent representatives of Milbank and Wachtell a revised draft of the merger agreement. The revised draft included a “hell or high water” antitrust efforts covenant, as proposed by USS, as well as a reverse termination fee equal to an unspecified percent of USS’s equity value. With respect to efforts to obtain CFIUS clearance, the draft proposed limitations on NSC’s obligations to accept certain remedies to obtain CFIUS clearance.
On December 12, 2023, a draft of USS disclosure schedules was made available to NSC and Company D in the electronic dataroom. Also on December 12, 2023, USS allowed Consortium B and Company A to each amend its respective confidentiality agreement to allow for discussions with the other regarding a potential joint proposal.
On December 13, 2023, USS held a regularly scheduled in-person meeting of its Board of Directors at the USS headquarters in Pittsburgh, Pennsylvania during which members of USS senior management and representatives of Barclays, Goldman Sachs, Evercore, Milbank, and Wachtell participated. Representatives from Wachtell discussed fiduciary duty considerations in connection with the strategic alternative review process and related legal matters. Representatives from Barclays and Goldman Sachs discussed their respective preliminary financial analyses of USS and in the context of each of the NSC and Company D proposals submitted on December 1, 2023, as well as in connection with the December 1 Asset Sale Proposals. Such analyses utilized, in the case of Company D, USS management’s pro forma projections for the potential post-closing combined company, which included the impact of each of potential transaction synergies and divestitures that may be needed to obtain antitrust approvals. Representatives from Barclays and Goldman Sachs also discussed developments since the last meeting of the Board of Directors, including that on December 8, 2023, Consortium B and Company A had indicated an intention to submit a joint proposal to acquire all of USS, and Company C had indicated that it was unlikely to continue in the strategic alternatives review process given its limited ability to increase its proposal. A representative of Milbank discussed the revised draft of the merger agreement received from NSC, identifying areas where NSC had moved towards the USS position from its prior draft and some of the key issues remained open, including the termination fees that would be payable by USS and NSC under certain circumstances, the level of efforts required to obtain CFIUS clearance and the scope of interim operating covenants. Representatives of Milbank also discussed open points in the draft merger agreement received from Company D on December 1, 2023, including the level of commitment by Company D to obtain antitrust clearance and the termination fees that would be payable by USS and Company D in certain circumstances. Representatives of Milbank also reviewed antitrust considerations, including the relative antitrust risk associated with a transaction with NSC as compared to a transaction with Company D. In response to questions from the Board of Directors, representatives from Milbank discussed the reasons that they believed the potential antitrust risk inherent in a transaction with Company D was significantly greater than the level of antitrust risk conveyed by Company D to USS, including the likelihood of litigation (which could take up to 18 months or more from the date of signing to conclude), the significant divestitures that likely would be required to substantially improve the prospect of prevailing in such litigation, the likelihood that such divestitures would be in excess
 
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of the divestitures that Company D proposed to commit to in their draft merger agreement, the substantial risk that USS and Company D would not prevail in litigation regardless of any proposed divestitures, and the erosion of value to USS stockholders with respect to the stock component of Company D’s latest proposal as a result of any divestitures that might be required . In particular, representatives of Milbank stated their opinion, developed after numerous meetings with legal counsel to Company D and the parties’ respective economic experts, that to improve the prospects of prevailing in such litigation, the parties would have to agree to divest (and find appropriate counterparties who would agree to acquire), assets generating up to $7 billion or more in revenues of the combined company, which far exceeded the $2 billion commitment proposed by Company D in the draft merger agreement received from Company D on December 1, 2023. In addition, divestitures of individual facilities to third parties would present additional challenges under the successorship requirements of the Basic Labor Agreement. Representatives from Milbank and Wachtell also discussed other factors potentially affecting certainty and timing of closing for potential transactions with each party, including that each of NSC and Company D had obtained financing commitments on customary terms, the fact that a transaction with NSC would require CFIUS clearance and the fact that a transaction with Company D would require approval of Company D’s stockholders in connection with the issuance of Company D common stock. With respect to Company D’s proposal, the Board of Directors viewed the significant antitrust risks, including the potential divestitures of assets generating up to $7 billion or more in revenues of the combined company, and Company D’s unwillingness up to that point to agree to include what USS believed to be adequate commitments in the merger agreement to take such actions as may be necessary to obtain regulatory approval, as concerning relative to the other proposals. The Board of Directors considered that these risks meaningfully and adversely impacted deal certainty and value to USS stockholders, given the risk that a transaction would either not be consummated or would only be consummated after significant delay. If the transaction were to be consummated, the divestiture of assets anticipated to be required would be value destructive generally with respect to the combined company and would negatively affect the ability of the combined company to realize any contemplated transaction synergies. The Board of Directors considered that these risks were not present with certain of the other proposals, including NSC’s proposal. In addition, the Board of Directors discussed the views of the USW and the rights of the USW under the Basic Labor Agreement in connection with the process (including the Right to Bid Assignment) and USS’s compliance therewith. At that meeting, following discussion, and after taking into consideration the information provided by and discussed with USS senior management and its advisors, the Board of Directors directed USS senior management, Barclays and Goldman Sachs to continue seeking increased value and reduced conditionality from NSC and Company D, including by seeking to increase the cash consideration component of Company D’s proposal so that a vote of Company D’s stockholders would not be required, and so as to lessen the potential impact of divestitures on deal consideration in connection with a Company D transaction.
Also on December 13, 2023, representatives of Ropes & Gray sent representatives of Milbank and Wachtell a revised draft of the USS disclosure schedules. Representatives of Ropes & Gray, Milbank and Wachtell continued to negotiate the USS disclosure schedules until December 18, 2023 when the Merger Agreement was signed.
That same day, representatives of Company A and Consortium B submitted a joint proposal to acquire all of the outstanding shares of USS common stock for $40 per share in cash (which we refer to as the “$40 Joint Bid”). Representatives of Company A and Consortium B were notified by representatives of Barclays and Goldman Sachs, as directed by the Board of Directors, that their proposal was not competitive.
Also on December 13, 2023, representatives of Barclays and Goldman Sachs, at the direction of the Board of Directors, conveyed to NSC and its financial advisor that the strategic alternatives review process remained competitive and requested that NSC undertake to improve the total value and closing certainty of its proposal. Representatives of Barclays and Goldman Sachs also conveyed that representatives of Milbank and Wachtell would provide a revised draft of the merger agreement and requested that NSC provide a revised proposal no later than December 15, 2023.
On December 14, 2023, representatives of Milbank and Wachtell sent a revised draft merger agreement to legal counsel for Company D, and representatives of Barclays and Goldman Sachs, at the direction of the Board of Directors, conveyed to Company D the request that Company D undertake to increase the total
 
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value and cash consideration portion of its proposal and increase the size of the reverse termination fee. That same day, representatives of Milbank and Wachtell sent representatives of Ropes & Gray a revised draft of the merger agreement.
On December 15, 2023, representatives of Ropes & Gray sent representatives of Milbank and Wachtell a revised draft of the merger agreement. That same day, NSC submitted a non-binding offer to acquire all of the outstanding shares of USS common stock for $48.00 in cash per share. The revised draft of the merger agreement included a reverse termination fee equal to 4% of USS’s equity value, but maintained the same proposal regarding antitrust and CFIUS efforts contained in the draft that representatives of Ropes & Gray sent to representatives of Milbank and Wachtell on December 11, 2023. Later that same day, Company D submitted to USS a non-binding offer to acquire all of the outstanding shares of USS common stock for $27.00 in cash and 1.444 shares of Company D stock per share of USS common stock, representing a value of $54.00 per share of USS common stock based on the closing price of Company D common stock on December 15, 2023 (which we refer to as the “Company D Final Proposal”). The Company D Final Proposal also indicated its estimate of $6.50 per share of USS common stock in potential synergy value for USS stockholders. The Company D Final Proposal did not meaningfully change the mix of stock and cash consideration; as a result, approval of Company D stockholders would still be required in order to consummate the Company D Final Proposal. In the Company D Final Proposal, Company D stated that the proposed consideration represented its “final proposal” and requested feedback following the conclusion of the discussions among the Board of Directors, which Company D understood were to occur on December 16 or December 17, 2023. The Company D Final Proposal also stated that lack of feedback in a timely fashion would be considered rejection of the Company D Final Proposal. Company D also submitted a revised draft of the merger agreement, which did not include an improved commitment with respect to antitrust efforts, but did include an increase in their proposed reverse termination fee from $1 billion on December 1, 2023 to $1.5 billion. Also on December 15, 2023, the Chief Executive Officer and Chief Financial Officer of Company D and representatives of Company D’s financial advisor contacted representatives of Goldman Sachs to discuss timing for USS’s response to the Company D Final Proposal and, during such conversation, reiterated that such proposal was “final.”
In the morning on December 16, 2023, representatives of Barclays and Goldman Sachs, at the direction of the Board of Directors, spoke with representatives of NSC and its financial advisor and conveyed that the strategic alternative review process remained competitive and requested that NSC submit its final proposal. Shortly thereafter, Mr. Mori indicated to Mr. Burritt that, subject to final NSC board approval, NSC proposed to acquire USS for $55.00 per share in cash (which we refer to as the “NSC December 16 Proposal”).
In the afternoon of December 16, 2023, USS held a special meeting of its Board of Directors virtually, during which members of USS senior management and representatives of Barclays, Goldman Sachs, Evercore, Milbank, Wachtell and Joele Frank participated. Representatives from Wachtell discussed fiduciary duty considerations and other relevant legal matters in the context of the consideration of a proposal to acquire USS. Representatives of Barclays and Goldman Sachs reviewed their respective preliminary financial analyses of USS in the context of the NSC December 16 Proposal and the Company D Final Proposal. Representatives from Barclays and Goldman Sachs also discussed developments since the last meeting of the Board of Directors, including receipt of the $40 Joint Bid. Representatives of Milbank discussed the December 15, 2023 merger agreement drafts received from each of NSC and Company D, including the potential impact on the timing and certainty of the closing of a transaction as well as the provisions restricting USS and its representatives from soliciting competing offers and governing the directors’ ability to consider unsolicited competing offers for USS. With respect to Company D, representatives of Milbank noted that, although Company D had accepted USS’s proposed $1.5 billion termination fee payable by Company D if antitrust approvals were not obtained, Company D had not improved its antitrust efforts commitments under the merger agreement. Accordingly, there remained a substantial risk that the potential divestitures that might be required to close a transaction with Company D would be in excess of the commitment with respect to required divestitures that Company D was willing to undertake, thereby reducing closing certainty. The Board of Directors also considered that the value represented by the stock component (which was based on a fixed exchange ratio) of Company D’s proposal would fluctuate over time based on changes in Company D’s stock price, and considered the potential relationship between synergies from a potential combination with Company D and the potential value loss to USS stockholders resulting from
 
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regulatory divestitures that would likely be required under different scenarios. In particular, the Board of Directors evaluated Company D’s estimate of $6.50 per share of USS common stock in potential synergy value in light of a number of factors that impeded the Board of Directors’ ability to reasonably rely on such estimate or quantify an alternative estimation, including, among others, the inherent difficulty in definitively predicting the value of any transaction synergies. Additionally, the Board of Directors considered the likelihood that Company D’s stock price (and therefore the stated value of the stock component of the Company D Final Proposal) already reflected market expectations for potential transaction synergies, given Company D’s stock price had increased since the strategic alternatives review process had been initiated and given the public awareness of Company D’s participation in the process. Furthermore, the Board of Directors considered the substantial risk that all or a portion of such synergies would not be realized, including as a result of potential significant required regulatory divestitures. Accordingly, the Board of Directors did not believe it could reasonably assume the purported transaction synergies were accurate and did not find it reasonably feasible or necessary to quantify an alternative estimation of potential transactions synergies with respect to a transaction with Company D. Comparatively, the NSC proposal contemplated an all-cash transaction, and the NSC December 16 Proposal represented a higher value per share of USS common stock in upfront consideration – facts that, to the Board of Directors, provided more certainty of the value being offered to USS stockholders, and were taken into account, together with all other relevant factors considered by the Board of Directors, in ultimately determining to proceed with NSC rather than with Company D. Representatives of Milbank also noted that approval of Company D’s stockholders would be required in order to the consummate the potential transaction. With respect to NSC, representatives of Milbank noted that although NSC had accepted USS’s proposed termination fee payable by NSC if regulatory approvals were not obtained (4% of transaction value or approximately $565 million), NSC had not improved its commitments under the merger agreement to seek CFIUS clearance. Representatives for Milbank and Wachtell relayed recent discussions between representatives of Covington and Ropes & Gray, including Covington’s assessment of the likelihood of obtaining CFIUS clearance as long as NSC made the necessary commitments with respect thereto. In addition, the Board of Directors again discussed the views of the USW and the rights of the USW under the Basic Labor Agreement in connection with the process and USS’s compliance therewith. At that meeting, following discussion, and after taking into consideration the information provided by and discussed with USS management and advisors, the Board of Directors directed Milbank and Wachtell, together with Covington, to seek to improve NSC’s commitment to seek CFIUS clearance and to obtain more information with respect to NSC’s operations, and to seek to close out any remaining open issues in the merger agreement prior to the special meeting of the Board of Directors scheduled for the next day. In addition, the Board of Directors instructed representatives of Milbank and Wachtell to continue negotiating the remaining open issues in Company D’s draft merger agreement with Company D’s legal counsel, including with respect to the antitrust efforts required to be undertaken by Company D to obtain regulatory approvals.
In the evening of December 16, 2023, Mr. Burritt had a brief call with Mr. Mori to convey the need for more certainty with respect to NSC’s commitment to seek CFIUS clearance.
On December 16 and 17, 2023, representatives of Milbank and Wachtell continued to negotiate merger agreements with representatives of Ropes & Gray and legal counsel for Company D. During such discussions, legal counsel for Company D confirmed that its proposal with respect to antitrust regulatory efforts and the commitment to divestitures included in its draft merger agreement dated December 15, 2023 was “final.” NSC’s commitment to obtaining CFIUS clearance under the merger agreement continued to be the primary open issue until the afternoon of December 17, 2023, when representatives of Ropes & Gray indicated that NSC would agree to take all actions required to obtain CFIUS clearance, so long as such actions (solely with respect to NSC’s assets) would not reasonably be expected to result in a material adverse effect on NSC, assuming for such purposes that NSC were the size of, and with the financial profile of, NSC and USS, taken as a whole.
Shortly after this discussion, on December 17, 2023, USS held a special meeting of its Board of Directors virtually, during which members of USS senior management and representatives of Barclays, Goldman Sachs, Evercore, Milbank, Wachtell, Covington and Joele Frank participated. Representatives from Wachtell and Milbank discussed fiduciary duty considerations in the context of the consideration of a proposal by NSC to acquire USS and related legal matters. A representative of Milbank reviewed again the key terms of the transaction proposed by NSC, including provisions relating to efforts required to be
 
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undertaken to obtain regulatory approvals, the termination fee payable by NSC if regulatory approvals were not obtained, and the potential impact on the timing of the closing of a transaction as well as the provisions restricting USS and its representatives from soliciting competing offers and governing the directors’ ability to consider unsolicited competing offers for USS. Representatives of Covington, Milbank and Wachtell addressed questions from the directors, including regarding the current regulatory environment and required regulatory approvals. The Board of Directors again discussed the views of the USW and the rights of the USW under the Basic Labor Agreement in connection with the process and USS’s compliance therewith. It was further discussed that the Company D Final Proposal remained unchanged and that Company D and its representatives had reiterated orally and in writing that such proposal was “final,” and it was confirmed that recent discussions with Company D’s counsel regarding the terms of the proposed merger agreement had not included any changes to the relevant terms as proposed by Company D. At that meeting, the Board of Directors also formally approved the engagement of Evercore as a financial advisor to USS in connection with the strategic alternatives review process.
Representatives of each of Barclays and Goldman Sachs respectively presented each of Barclays’ and Goldman Sachs’ respective financial analysis of the proposed transaction relative to the December 2023 Projections (as further described in the section of this proxy statement titled “Certain Financial Projections”). Following such discussion, representatives of Barclays rendered to the Board of Directors its oral opinion, confirmed by delivery of a written opinion dated December 18, 2023, that, as of such date and based upon and subject to the assumptions, limitations, qualifications and conditions described in Barclays’ written opinion, the merger consideration of $55.00 per share to be offered to the holders of USS common stock in the Merger was fair to such holders from a financial point of view. Also, following such discussion, representatives of Goldman Sachs rendered to the Board of Directors its oral opinion, confirmed by delivery of a written opinion dated December 18, 2023, that, as of such date and based upon and subject to the assumptions, limitations, qualifications and conditions described in Goldman Sachs’ written opinion, the merger consideration of $55.00 per share to be paid to the holders (other than NSC and its affiliates) of USS common stock pursuant to the Merger Agreement was fair from a financial point of view to such holders.
At that meeting, following discussion, and after taking into consideration the information provided by and discussed with USS management and advisors, including the factors described below in greater detail in the section of this proxy statement titled “Reasons for the Merger,” the Board of Directors unanimously (1) determined that the transactions contemplated by the Merger Agreement, including the Merger, were advisable, fair to and in the best interests of USS and its stockholders, (2) approved the execution, delivery and performance of the Merger Agreement and the consummation of the transactions contemplated thereby, including the Merger, subject to approval by NSC’s board of directors of the Merger Agreement and the consummation of the transactions contemplated thereby, including the Merger, (3) resolved to recommend that USS stockholders adopt the Merger Agreement and (4) directed that the adoption of the Merger Agreement be submitted for consideration by USS stockholders at the Special Meeting. The Board of Directors further unanimously determined that the NSC proposal was superior to the other proposals received because it was more favorable to USS and its stockholders, taking into consideration such factors as price, form of consideration, certainty of payment, conditions precedent to closing, regulatory and competitive factors and other factors influencing which of the proposals was in the best interests of USS and its stockholders.
Following the meeting of the Board of Directors on December 17, 2023, representatives of Milbank, Wachtell and Ropes & Gray finalized the Merger Agreement and other transaction documents. During this time, late in the evening of December 17, 2023, Company D delivered a letter to USS by email stating that the Company D Final Proposal continued to be its final proposal and stating that the proposal remained outstanding past December 17, given the progress that had been made between the legal counsel for USS and Company D on Company D’s draft merger agreement. In the evening of December 17, 2023, Mr. Burritt had a brief discussion with Mr. Mori regarding the Board of Directors’ approval of the NSC proposal. Later that evening, representatives of NSC informed representatives of USS that NSC’s board of directors had approved the Merger Agreement and the Merger.
The Merger Agreement and the other transaction documents between NSC and USS were executed early on December 18, 2023. Before the opening of market on December 18, 2023, USS and NSC issued a press release announcing the transaction and held a joint investor call.
 
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Later that day, representatives of Ropes & Gray and Littler Mendelson P.C., outside labor counsel to NSC, met with representatives of the USW to discuss, among other things, the successorship provisions provided in Article Two, Section D.3 of the BLA (which we refer to as the “Successorship Clause”). Thereafter, representatives of Ropes & Gray sent to representatives of the USW a letter from Parent in satisfaction of the Successorship Clause.
On January 30, 2024, the Chief Financial Officer of Cleveland-Cliffs identified Company D as Cleveland-Cliffs.
Recommendation of the Board of Directors and Reasons for the Merger
Recommendation of the Board of Directors
The Board of Directors has unanimously: (a) determined that it is fair to and in the best interests of USS and its stockholders, and declared it advisable, to enter into the Merger Agreement, (b) authorized and approved the execution, delivery and performance of the Merger Agreement by USS and the consummation of the transactions contemplated by the Merger Agreement, including the Merger, and (c) resolved to recommend that the USS stockholders adopt the Merger Agreement and directed that such matter be submitted for consideration of the USS stockholders at the Special Meeting.
The Board of Directors unanimously recommends that you vote: (1) “FOR” the adoption of the Merger Agreement; (2) “FOR” the Compensation Proposal; and (3) “FOR” the adjournment of the Special Meeting, if necessary or appropriate, to solicit additional proxies if there are insufficient votes to adopt the Merger Agreement at the time of the Special Meeting.
Reasons for the Merger
In evaluating the Merger, the Board of Directors consulted with USS’s senior management and its independent legal and financial advisors and considered a number of factors that the Board of Directors viewed as supporting its decision, including the following (not necessarily in order of relative importance):

Best Alternative for Maximizing Stockholder Value Following a Thorough and Well-Publicized Process.   The Board of Directors considered that the value of the Merger Consideration of $55.00 in cash per share of USS common stock was more favorable to USS’s stockholders than the potential value that might result from other alternatives reasonably available to USS, including the continued operation of USS on a standalone basis, in light of a number of factors, including the following:

the Board of Directors’ assessment of USS’s business, assets and prospects, its competitive position and historical and projected financial performance (taking into account USS’s potential for, and risks to, future growth), the nature of the industries in which USS operates, including recent competitive and market trends and dynamics;

that USS had conducted a lengthy and thorough process since the public announcement of the strategic alternatives review process on August 13, 2023, involving outreach to potential strategic acquirers and financial sponsors, of which 19 entered into nondisclosure agreements with USS and received access to due diligence materials, nine provided first round indications of interest to acquire all or parts of USS, and five provided final proposals to acquire all or parts of USS;

that NSC stated that its $55.00 per share in cash proposal represented the maximum price that NSC could offer, following NSC’s prior proposals offering $48.00 per share and $43.00 per share, and a significant increase over NSC’s original offer to acquire USS at $41.40 per share;

the high degree of certainty of closing in light of, among other things, the absence of significant competitive overlaps between USS and NSC, NSC’s strong commitment to obtain the required regulatory approvals, the delivery and enforceability of the Commitment Letters and the absence of a requirement for approval by NSC’s stockholders;

the course and history of USS’s discussions and negotiations with NSC and the other bidders, as described in the section of this proxy statement entitled “Proposal 1: Adoption of the Merger Agreement — Background of the Merger,” including the multiple rounds of bids submitted by
 
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other parties and the expectation that each other bidder had put forward the best terms that they were willing to offer for a strategic transaction (including, in the case of Company D, express statements that their most recent submission constituted their final offer);

that USS and its financial advisors responded to third parties who expressed interest in a possible transaction on an unsolicited basis and who they believed were reasonably capable of consummating a transaction by offering such third parties the opportunity to conduct due diligence and make a proposal, including proposals contemplating various transaction structures and transaction scopes; and

that the Board of Directors had conducted extensive deliberations over a period of four months since the announcement of the strategic alternatives review process, to oversee and provide direction to the process, and extensive deliberations over a period of five total months since Company A’s first offer to acquire all of the outstanding shares of USS common stock, to evaluate alternatives for USS.

Premium.   The Board of Directors considered the current and historical market prices of USS common stock, including the market performance of USS common stock relative to those of other publicly traded companies in USS’s sector and general market indices, and the fact that the Merger Consideration of $55.00 per share in cash represented a substantial premium to estimates of USS’s unaffected stock price, including a premium of approximately 142% to USS’s unaffected stock price of $22.72 on August 11, 2023, the day prior to USS’s announcement of the strategic alternatives review process and a premium of approximately 40% to USS’s closing stock price of $39.33 on December 15, 2023, the last trading day before public announcement of the Merger Agreement.

Certainty of Value.   The Board of Directors considered that the proposed Merger Consideration is a fixed cash amount, providing USS stockholders with a certainty of value and liquidity immediately upon the closing of the Merger, in comparison to the risks, uncertainties and potentially longer timeline for realizing equivalent value from USS’s standalone business plan or possible strategic alternatives, including with respect to the speculative, contingent value inherent in the stock component of Company D’s final proposal. In considering the Merger Consideration and comparing it against potential alternatives for USS, the Board of Directors took into account the potential incremental execution risk, tax leakage and structuring complexities that would be presented by a structured transaction or an acquisition of limited assets relative to a whole company acquisition and leveraged its knowledge of the business, assets, operations, financial condition, earnings and prospects of USS, as well as its knowledge of the current and prospective environment in which USS operates, including uncertain economic, market and capital raising conditions.

Negotiation Process.   The Board of Directors considered the fact that the terms of the Merger Agreement were informed by the advice and professional experience of USS’s independent financial and legal advisors and were the result of robust negotiations.

Opinions of USS’s Financial Advisors.

The Board of Directors considered the financial analysis presented by Barclays and the oral opinion rendered to the Board of Directors, which was confirmed by delivery of a written opinion dated December 18, 2023, that, as of such date and subject to the assumptions and limitations made therein, the Merger Consideration to be offered to the holders of USS common stock in the Merger was fair to such holders from a financial point of view, as further described in the section of this proxy statement entitled “Proposal 1: Adoption of the Merger Agreement —  Opinion of Barclays Capital Inc.” The full text of the written opinion of Barclays is attached to this proxy statement as Annex B.

The Board of Directors considered the financial analysis presented by Goldman Sachs and the oral opinion rendered to the Board of Directors, which was confirmed by delivery of a written opinion dated December 18, 2023, that, as of such date and subject to the assumptions and limitations made therein, the Merger Consideration to be paid to the holders (other than NSC and its affiliates) of USS common stock pursuant to the Merger Agreement was fair from a financial point of view to such holders, as further described in the section of this proxy
 
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statement entitled “Proposal 1: Adoption of the Merger Agreement —  Opinion of Goldman Sachs & Co. LLC.” The full text of the written opinion of Goldman Sachs is attached to this proxy statement as Annex C.

Terms of the Merger Agreement.   The Board of Directors considered the terms and conditions of the Merger Agreement, including:

the provisions allowing the Board of Directors, subject to certain conditions, to provide information in response to, and to discuss and negotiate, certain unsolicited alternative proposals made prior to the receipt of the required approval by the USS stockholders of the Merger;

the provisions allowing the Board of Directors to, prior to obtaining the required approval by the USS stockholders of the Merger, change its recommendation with respect to the Merger in specified circumstances relating to a Superior Proposal or Intervening Event, subject to Parent’s right to terminate the Merger Agreement and receive payment by USS of the termination fee of $565 million;

the provision allowing the Board of Directors to terminate the Merger Agreement to enter into a Superior Proposal, subject to certain conditions (including certain rights of Parent to match the Superior Proposal and the payment to Parent of the termination fee of $565 million);

the fact that the Merger Agreement permits USS to continue to pay to USS stockholders regular quarterly dividends in an amount not to exceed a quarterly rate of $0.05 in cash per share;

the likelihood that the Merger would be consummated, including the number and nature of the conditions to complete the Merger, and the commitment by Parent (and its subsidiaries and controlled affiliates) to use reasonable best efforts to promptly take, or cause to be taken, all actions, and to do promptly, or cause to be done, all things necessary, proper or advisable to consummate and make effective the Merger as promptly as practicable including obtaining all necessary actions or nonactions, waivers, consents, clearances, approvals, and expirations or terminations of waiting periods from governmental entities and obtaining all necessary consents, approvals, or waivers from governmental entities and third parties, as applicable, as well as the commitment by Parent (and its subsidiaries and controlled affiliates) to use reasonable best efforts to obtain all necessary governmental approvals with respect to the Merger, including (i) supplying any and all additional information or documentation that may be requested by a Governmental Entity (including compliance with a Second Request), (ii) agreeing to divestitures, (iii) modifying contractual relationships and (iv) taking other actions that may limit Parent’s (and its subsidiaries’ and affiliates’) freedom of action with respect to or impose obligations on their future operations or businesses, in each case as necessary to obtain any such approval and subject to certain limitations described in the section of this proxy statement entitled “The Merger Agreement — Regulatory Approvals and Related Matters,” together with the fact that Parent agreed to pay USS a termination fee of $565 million under the circumstances described in the section of this proxy statement entitled “The Merger Agreement — Termination Fee Payable by Parent”;

the commitment by Parent to use reasonable best efforts to contest and resist any administrative or judicial action or proceeding by a governmental entity or a private party challenging the Merger and to have vacated, lifted, reversed or overturned any judgment, injunction or order that prohibits, prevents or restricts consummation of the Merger;

the provisions of the Merger Agreement providing that Parent would take all necessary action to assume all applicable agreements with the USW with respect to USS, and other assurances of Parent relative to such agreements; and

the availability of statutory appraisal rights under Delaware law in connection with the Merger.

Opportunity for USS Stockholders to Vote.   The Board of Directors considered the fact that the Merger would be subject to the approval of USS stockholders, and USS stockholders would be free to evaluate the Merger and vote for or against the adoption of the Merger Agreement at the Special Meeting.
 
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Timing of Completion.   The Board of Directors considered the anticipated timing of the consummation of the Merger and concluded that the Merger could be completed in a reasonable timeframe and in an orderly manner. The Board of Directors also considered that the potential for closing the Merger in a reasonable timeframe could reduce the period during which USS’s business would be subject to the potential uncertainty of closing and related disruption.

Likelihood of Completion.   The Board of Directors considered the absence of a financing condition or similar contingency based on Parent’s ability to obtain financing, Parent’s committed financing, the strong commitment made by Parent to obtain regulatory approvals and the fact that Parent’s and Merger Sub’s payment and performance obligations under the Merger Agreement are guaranteed by NSC.

Operating Flexibility.   The Board of Directors considered the fact that the Merger Agreement provides USS sufficient operating flexibility to conduct its business in the ordinary course until the earlier of the consummation of the Merger and the termination of the Merger Agreement, as more fully described in the section of this proxy statement entitled “The Merger Agreement — Conduct of Business Pending the Merger.”

Labor Matters.   The Board of Directors considered Parent’s commitment to honor all existing agreements between USS and the USW, including the Basic Labor Agreement, and Parent’s recognition of the USW as the bargaining representative for employees of USS who are represented by the USW, in each case, as provided under the Merger Agreement. The Board of Directors also considered the fact that NSC has the financial wherewithal to honor all existing agreements with the USW.

Specific Performance.   The Board of Directors considered USS’s ability, under circumstances specified in the Merger Agreement, to seek specific performance of Parent’s and Merger Sub’s obligation to cause the Merger to occur and to prevent other breaches of the Merger Agreement.

Guaranty.   The Board of Directors considered the guaranty of Parent’s and Merger Sub’s obligations under the Merger Agreement by NSC pursuant to the Merger Agreement, which provides substantial assurance that Parent and Merger Sub would perform their obligations under the Merger Agreement.
In the course of their deliberations, the Board of Directors also considered certain risks and other potentially adverse factors concerning the Merger, including:

the fact that completion of the transaction depends on certain factors outside of USS’s and Parent’s control, including regulatory approvals and USS stockholder approval, and that there can be no assurance that the conditions to the transaction will be satisfied even if the Merger is approved by USS stockholders;

the fact that the nature of the Merger as an all-cash transaction means that USS would no longer exist as an independent public company following the consummation of the Merger and that USS stockholders will not participate in future earnings or growth of the Surviving Corporation or benefit from any appreciation in value of the Surviving Corporation;

the provisions of the Merger Agreement that restrict USS’s ability to solicit or participate in discussions or negotiations regarding an Alternative Proposal, subject to certain exceptions, and that restrict USS from entering into an alternative acquisition agreement, including the covenants in the Merger Agreement requiring USS to provide Parent with an opportunity within five business days to match any Alternative Proposal that constitutes a Superior Proposal, which could discourage potential acquirors from making a competing Alternative Proposal, although the Board of Directors believed these covenants would not preclude an interested and able potential acquiror from seeking to acquire USS;

the possibility that USS could be required under the terms of the Merger Agreement to pay to Parent a termination fee of $565 million under certain circumstances;

the significant costs involved in connection with entering into the Merger Agreement and completing the Merger and the substantial time and effort of management required to consummate the Merger and related disruptions to the operation of our business;
 
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the potential consequences of non-consummation of the transaction, including the potential negative impacts on USS, its business and the trading price of its shares of common stock;

the fact that the USW had expressed its support for an alternative transaction, and the possibility that the USW would seek to challenge a transaction with NSC;

the fact that USS’s remedies in the event that the Merger Agreement is terminated under certain circumstances may be limited to the Parent Termination Fee of $565 million, payable by Parent under certain circumstances, and certain associated enforcement costs and certain other reimbursement obligations, which may be inadequate to compensate USS for any damage caused, and that such termination fee may not be available in all instances where the Merger is not consummated and, even if available, such rights and remedies may be expensive and difficult to enforce, and the success of any such action may be uncertain;

the Merger Agreement’s restrictions on the conduct of USS’s business before completion of the Merger, generally requiring USS to use commercially reasonable efforts to conduct its business in all material respects in the ordinary course of business consistent with past practice and prohibiting USS from taking certain customary specified actions, which could delay or prevent USS from pursuing certain business opportunities that arise pending completion of the Merger;

the fact that the announcement and pendency of the transactions contemplated by the Merger Agreement, the failure to complete the Merger, or actions that USS may be required, or Parent may be permitted, to take under the Merger Agreement could have an adverse impact on our existing and prospective business relationships with customers and other third parties and on our employees, including the risk that certain key members of USS’s management might choose not to remain employed with USS prior to the completion of the Merger, regardless of whether or not the Merger is completed;

that the exchange of USS common stock for cash pursuant to the Merger will be a taxable transaction to USS’s stockholders for U.S. federal income tax purposes;

that some of USS’s directors and executive officers have interests that may be different from, or in addition to, the interests of USS stockholders generally, as described in the section of this proxy statement entitled “Interests of USS’s Executive Officers and Directors in the Merger”; and

other risks described in and incorporated by reference in this proxy statement, see “Risk Factors” in USS’s annual report on Form 10-K for the fiscal year ended December 31, 2022, incorporated by reference herein and the section of this proxy statement entitled “Forward-Looking Statements.”
The Board of Directors concluded that the uncertainties, risks and potentially negative factors relevant to the Merger were outweighed by the potential benefits of the Merger.
The foregoing discussion of the information and factors considered by the Board of Directors is not intended to be exhaustive but includes the material positive and negative factors considered by the Board of Directors. In view of the wide variety of factors considered in connection with its evaluation of the Merger Agreement and the transactions contemplated by the Merger Agreement, including the Merger, and the complexity of these matters, the Board of Directors did not find it practicable to, and did not, quantify or otherwise assign relative weights to the specific factors considered in reaching its determination and recommendation. In addition, individual directors may have given different weights to different factors. The Board of Directors did not undertake to make any specific determination as to whether, or to what extent, any factor, or any particular aspect of any factor, supported or did not support its ultimate determination. The Board of Directors based its unanimous recommendation on the totality of the information presented, including the factors described above. The explanation of the factors and reasoning set forth above is forward-looking in nature and should be read in light of the factors set forth in the section of this proxy statement entitled “Forward-Looking Statements.”
Opinion of Barclays Capital Inc.
USS engaged Barclays to act as a financial advisor with respect to pursuing strategic alternatives for USS, including a possible sale of USS, pursuant to an engagement letter dated October 24, 2023. At a
 
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special meeting of the Board of Directors held to evaluate the Merger, Barclays rendered its oral opinion, subsequently confirmed in writing by delivery of a written opinion dated December 18, 2023, that, as of such date and based upon and subject to the assumptions, limitations, qualifications and conditions described in Barclays’ written opinion, the Merger Consideration to be offered to the holders of USS common stock in the Merger was fair to such holders from a financial point of view.
The full text of Barclays’ written opinion to the Board of Directors is attached as Annex B to this proxy statement. Barclays’ written opinion sets forth, among other things, the assumptions made, procedures followed, factors considered and limitations upon the review undertaken by Barclays in rendering its opinion. You are encouraged to read the opinion carefully in its entirety. The following is a summary of Barclays’ opinion and the methodology that Barclays used to render its opinion. This summary is qualified in its entirety by reference to the full text of the opinion.
Barclays’ opinion, the issuance of which was approved by Barclays’ Fairness Opinion Committee, is addressed to the Board of Directors, addresses only the fairness, from a financial point of view, of the Merger Consideration to be offered to the holders of USS common stock and does not constitute a recommendation to any USS stockholder as to how such stockholder should vote with respect to the Merger or any other matter. The terms of the Merger were determined through arm’s-length negotiations between USS and NSC and were unanimously approved by the Board of Directors. Barclays did not recommend any specific form of consideration to USS or that any specific form of consideration constituted the only appropriate consideration for the Merger. Barclays was not requested to address, and its opinion does not in any manner address, USS’s underlying business decision to proceed with or effect the Merger, the likelihood of the consummation of the Merger, or the relative merits of the Merger as compared to any other transaction or business strategy in which USS may engage. In addition, Barclays expressed no opinion on, and its opinion does not in any manner address, the fairness of the amount or the nature of any compensation to any officers, directors or employees of any parties to the Merger, or any class of such persons, relative to the consideration to be offered to the holders of USS common stock in the Merger or otherwise. No limitations were imposed by the Board of Directors upon Barclays with respect to the investigations made or procedures followed by it in rendering its opinion.
In arriving at its opinion, Barclays, among other things:

reviewed and analyzed the Merger Agreement and the specific terms of the Merger;

reviewed and analyzed publicly available information concerning USS that Barclays believed to be relevant to its analysis, including USS’s Annual Report on Form 10-K for the fiscal year ended December 31, 2022 and Quarterly Report on Form 10-Q for the fiscal quarter ended September 30, 2023;

reviewed and analyzed financial and operating information with respect to the business, operations and prospects of USS furnished to Barclays by USS, including financial projections of USS prepared by the management of USS and approved for Barclays’ use by USS (referred to in this section of this proxy statement as the “December 2023 Projections” and which are summarized in the section of this proxy statement entitled “Certain Financial Projections” beginning on page 65);

reviewed and analyzed a trading history of USS common stock from December 15, 2021 to December 15, 2023 and a comparison of that trading history with those of other companies that Barclays deemed relevant;

reviewed and analyzed a comparison of the historical financial results and present financial condition of USS with those of other companies that Barclays deemed relevant;

reviewed and analyzed a comparison of the financial terms of the Merger with the financial terms of certain other recent transactions that Barclays deemed relevant;

reviewed and analyzed published estimates of independent research analysts with respect to the future financial performance and price targets of USS;

reviewed and analyzed the results of Barclays’ efforts to solicit indications of interest from third parties with respect to a sale of all or a part of USS;
 
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had discussions with the management of USS concerning its business, operations, assets, liabilities, financial condition and prospects; and

had undertaken such other studies, analyses and investigations as Barclays deemed appropriate.
In arriving at its opinion, Barclays assumed and relied upon the accuracy and completeness of the financial and other information used by Barclays without any independent verification of such information (and did not assume responsibility or liability for any independent verification of such information). Barclays also relied upon the assurances of the management of USS that they were not aware of any facts or circumstances that would make such information inaccurate or misleading. With respect to the December 2023 Projections, upon the advice of USS, Barclays assumed that such projections were reasonably prepared on a basis reflecting the best currently available estimates and judgments of the management of USS as to the future financial performance of USS. Barclays assumed no responsibility for and expressed no view as to any such projections or estimates or the assumptions on which they were based. In arriving at its opinion, Barclays did not conduct a physical inspection of the properties and facilities of USS and did not make or obtain any evaluations or appraisals of the assets or liabilities of USS. Barclays’ opinion was necessarily based upon market, economic and other conditions as they existed on, and could be evaluated as of, December 18, 2023. Barclays assumed no responsibility for updating or revising its opinion based on events or circumstances that may have occurred after December 18, 2023.
Barclays assumed the accuracy of the representations and warranties contained in the Merger Agreement and all agreements related thereto. Barclays also assumed, upon the advice of USS, that all material governmental, regulatory and third-party approvals, consents and releases for the Merger will be obtained within the constraints contemplated by the Merger Agreement and that the Merger will be consummated in accordance with the terms of the Merger Agreement without waiver, modification or amendment of any material term, condition or agreement thereof. Barclays did not express any opinion as to any tax or other consequences that might result from the Merger, nor did Barclays opinion address any legal, tax, regulatory or accounting matters, as to which Barclays understood USS had obtained such advice as it deemed necessary from qualified professionals.
In connection with rendering its opinion, Barclays performed certain financial, comparative and other analyses as summarized below. In arriving at its opinion, Barclays did not ascribe a specific range of values to the shares of USS common stock, but rather made its determination as to fairness, from a financial point of view, of the Merger Consideration to be offered to the holders of USS common stock in the Merger on the basis of various financial and comparative analyses.
In arriving at its opinion, Barclays did not attribute any particular weight to any single analysis or factor considered by it but rather made qualitative judgments as to the significance and relevance of each analysis and factor relative to all other analyses performed and factors considered by it and in the context of the circumstances of the particular transaction. Accordingly, Barclays believes that its analyses must be considered as a whole, as considering any portion of such analyses and factors, without considering all analyses and factors as a whole, could create a misleading or incomplete view of the process underlying its opinion.
Summary of Material Financial Analyses
The following is a summary of the material financial analyses used by Barclays in preparing its opinion to the Board of Directors. The summary of Barclays’ analyses and reviews provided below is not a complete description of the analyses and reviews underlying Barclays’ opinion. The preparation of a fairness opinion is a complex process involving various determinations as to the most appropriate and relevant methods of analysis and review and the application of those methods to particular circumstances, and, therefore, is not readily susceptible to summary description.
For the purposes of its analyses and reviews, Barclays made numerous assumptions with respect to industry performance, general business, economic, market and financial conditions and other matters, many of which are beyond the control of USS or any other parties to the Merger. No company, business or transaction considered in Barclays’ analyses and reviews is identical to USS or the Merger and an evaluation of the results of those analyses and reviews is not entirely mathematical. Rather, the analyses and reviews
 
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involve complex considerations and judgments concerning financial and operating characteristics and other factors that could affect the acquisition, public trading or other values of the companies, businesses or transactions considered in Barclays’ analyses and reviews. None of USS, Barclays or any other person assumes responsibility if future results are materially different from those discussed. Any estimates contained in these analyses and reviews and the ranges of valuations resulting from any particular analysis or review are not necessarily indicative of actual values or predictive of future results or values, which may be significantly more or less favorable than as set forth below. In addition, analyses relating to the value of companies, businesses or securities do not purport to be appraisals or reflect the prices at which the companies, businesses or securities may actually be sold. Accordingly, the estimates used in, and the results derived from, Barclays’ analyses and reviews are inherently subject to substantial uncertainty.
The summary of the financial analyses and reviews provided below includes information presented in tabular format. In order to fully understand the financial analyses and reviews used by Barclays, the tables must be read together with the text of each summary, as the tables alone do not constitute a complete description of the financial analyses and reviews. Considering the data in the tables below without considering the full description of the analyses and reviews, including the methodologies and assumptions underlying the analyses and reviews, could create a misleading or incomplete view of Barclays’ analyses and reviews.
Discounted Cash Flow Analysis
In order to estimate the present value of USS common stock, Barclays performed a discounted cash flow analysis of USS. A discounted cash flow analysis is a traditional valuation methodology used to derive a valuation of an asset by calculating the “present value” of estimated future cash flows of the asset. “Present value” refers to the current value of future cash flows or amounts and is obtained by discounting those future cash flows or amounts by a discount rate that takes into account macroeconomic assumptions and estimates of risk, the opportunity cost of capital, expected returns and other appropriate factors.
To calculate the estimated enterprise value of USS using the discounted cash flow method, Barclays added (i) USS’s projected after-tax unlevered free cash flows for the period from October 1, 2023 to December 31, 2033 based on the December 2023 Projections to (ii) the “terminal value” of USS as of December 31, 2033, and then discounted such amount to its present value using a mid-year convention and a range of selected discount rates. The residual value of USS at the end of the forecast period, or “terminal value,” was estimated by selecting a range of perpetuity growth rates ranging from (1.0)% to 1.0%, which were derived by Barclays utilizing its professional judgment and experience. The cash flows and terminal values were then discounted to present value as of September 30, 2023 using discount rates of 11.5% to 13.5%. The range of discount rates was selected based on an analysis of the weighted average cost of capital of USS. Barclays then calculated a range of implied equity values per share of USS common stock by subtracting estimated net debt and non-controlling interest, in each case as of September 30, 2023, from the estimated enterprise values using the discounted cash flow method and dividing such amounts by the fully diluted number of shares of USS common stock outstanding as of December 14, 2023, based on information provided by management of USS and approved for Barclays’ use by USS. The following summarizes the result of these calculations (rounded to the nearest $1.00):
Discount Rates
Perpetuity Growth Rates
Implied Equity Value per Share of
USS Common Stock
11.5% – 13.5%
(1.0)% – 1.0%
$39 – $50
Barclays noted that on the basis of the discounted cash flow analysis, the Merger Consideration was above the range of the implied equity values per share of USS common stock calculated using the December 2023 Projections.
Present Value of Future Share Price Analysis
Barclays performed an analysis of the implied present value of an illustrative future value per share of USS common stock, which is designed to provide an indication of the present value of the theoretical future value of a company’s equity as a function of such company’s financial projections and valuation multiples.
 
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Barclays first calculated the implied future enterprise values of USS for the fiscal years ending December 31, 2023 through December 31, 2027 by applying ratios of USS’s enterprise value to earnings before interest, taxes, depreciation and amortization (which is referred to in this section as “EBITDA”) for the next 12-month (which is referred to in this section as “NTM”) period (which is referred to in this section as “EV/NTM EBITDA”) ranging from 4.5x to 6.0x to NTM EBITDA estimates for USS as reflected in the December 2023 Projections for each of the fiscal years ending December 31, 2023 through December 31, 2027. The illustrative EV/NTM EBITDA multiple estimates were derived by Barclays utilizing its professional judgment and experience, taking into account current and historical trading data for USS as of December 15, 2023.
Barclays then calculated a range of implied equity values per share of USS common stock by (i) subtracting the projected amount of USS’s net debt and non-controlling interest as of each respective fiscal year end based on the December 2023 Projections, (ii) dividing such amount by the estimated fully diluted number of shares of USS common stock outstanding as of each respective fiscal year end, based on information provided by management of USS and approved for Barclays’ use by USS and (iii) adding to such implied future equity values per share of USS common stock the projected amount of cumulative dividends per share of USS common stock, as applicable, based on the December 2023 Projections.
Utilizing a discount rate of 15.0% based on an analysis of the cost of equity of USS, Barclays then derived a range of implied present values per share of USS common stock by discounting to present value as of September 30, 2023, the implied future values per share of USS common stock. The following summarizes the result of these calculations (rounded to the nearest $1.00):
EV/NTM
EBITDA Multiple Range
Implied Equity Value per Share of
USS Common Stock
4.5x – 6.0x
$38 – $47
Barclays noted that, on the basis of the present value of the illustrative future share price analysis, the Merger Consideration was above the range of the implied equity values per share of USS common stock calculated using the December 2023 Projections.
Selected Precedent Transaction Analysis
Barclays reviewed and compared the purchase prices and implied valuation metrics in selected precedent transactions that Barclays, based on its experience with merger and acquisition transactions, deemed relevant. Barclays chose such transactions based on, among other things, the similarity of the applicable target companies in the transactions to USS with respect to certain operations or financial characteristics that Barclays deemed relevant. The selected precedent transactions were:
Year Announced
Production Method
Acquiror
Target
2014
Electric Arc Furnace (“EAF”) Steel Dynamics, Inc. (“Steel Dynamics”) Severstal Columbus, LLC (“Columbus”)
2014
Integrated AK Steel Corporation (“AKS”) Severstal Dearborn, LLC (“Dearborn”)
2014
EAF Nucor Corporation (“Nucor”) Gallatin Steel Company (“Gallatin”)
2015
EAF
BlueScope Steel Limited
North Star BlueScope Steel LLC (“North Star”)
2019
Integrated Cleveland-Cliffs AKS
2020
Integrated Cleveland-Cliffs ArcelorMittal USA LLC (“ArcelorMittal USA”)
2020
EAF USS Big River Steel Holdings LLC (“BRS”)
Using publicly available information, Barclays analyzed the ratio of (i) each of Columbus’, Dearborn’s, Gallatin’s, North Star’s and AKS’ respective enterprise value to EBITDA for the last 12-month (which is
 
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referred to in this section as “LTM”) period (which is referred to in this section as “EV/LTM EBITDA”) at the time of announcement of each respective transaction, (ii) ArcelorMittal USA’s enterprise value to average EBITDA for the period from January 1, 2017 through June 30, 2020 and (iii) BRS’ enterprise value to run-rate EBITDA at the time of announcement of the transaction. The following summarizes the result of these calculations:
Multiple
Total Average
6.9x
Total Median
6.4x
EAF Average
6.6x
EAF Median
6.5x
Integrated Average
7.3x
Integrated Median
6.0x
The reasons for and the circumstances surrounding each of the selected precedent transactions analyzed were diverse and there are inherent differences in the business, operations, financial conditions and prospects of USS and the companies included in the selected precedent transaction analysis. Accordingly, Barclays believed that a purely quantitative selected precedent transaction analysis would not be particularly meaningful in the context of considering the Merger. Barclays, therefore, made qualitative judgments concerning differences between the characteristics of the selected precedent transactions and the Merger which would affect the acquisition values of the selected target companies and USS. Based upon these judgments, Barclays selected a range of EV/LTM EBITDA multiples of 6.0x to 7.0x and applied such range to an estimate of the LTM EBITDA of USS as of September 30, 2023, based on the December 2023 Projections, to derive a range of estimated enterprise values of USS. Barclays then calculated a range of implied equity values per share of USS common stock by (i) subtracting the amount of USS’s estimated net debt and non-controlling interest from the respective range of estimated enterprise values, in each case as of September 30, 2023 based on the December 2023 Projections and (ii) dividing such amounts by the estimated fully diluted number of shares of USS common stock, based on information provided by management of USS and approved for Barclays’ use by USS. The following summarizes the result of these calculations (rounded to the nearest $1.00):
EV/LTM
EBITDA Multiple Range
Implied Equity Value per Share of
USS Common Stock
6.0x – 7.0x
$50 – $58
Barclays noted that on the basis of the selected precedent transactions analysis, the Merger Consideration was within the range of the implied equity values per share of USS common stock calculated using the December 2023 Projections.
Other Factors
Barclays also reviewed and considered other factors, which were not considered part of its financial analyses in connection with rendering its advice, but were references for informational purposes, including, among other things, the historical share price analysis and equity research price targets analysis described below.
Historical Share Price Analysis
To illustrate the trend in the historical trading prices of USS common stock, Barclays considered historical data with regard to the trading prices of USS common stock for the period from August 11, 2022 to August 11, 2023. Barclays noted that during the period from August 11, 2022 to August 11, 2023, the intra-day price of USS common stock (rounded to the nearest $1.00) ranged from $18 to $32. The historical share price analysis was used for informational purposes only and was not included in Barclays’ financial analyses.
Equity Research Price Targets Analysis
Barclays reviewed and compared publicly available research analysts’ per share price targets as of August 11, 2023 for USS common stock. The research analysts’ per share price targets for USS common
 
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stock (rounded to the nearest $1.00) ranged from $14 to $30. The publicly available per share price targets published by securities research analysts do not necessarily reflect the current market trading prices for USS common stock and these estimates are subject to uncertainties, including future financial performance of USS and future market conditions. Research analyst price targets for USS were used for informational purposes only and were not included in Barclays’ financial analyses.
General
Barclays is an internationally recognized investment banking firm and, as part of its investment banking activities, is regularly engaged in the valuation of businesses and their securities in connection with mergers and acquisitions, investments for passive and control purposes, negotiated underwritings, competitive bids, secondary distributions of listed and unlisted securities, private placements and valuations for estate, corporate and other purposes. The Board of Directors selected Barclays because of Barclays’ familiarity with USS and its qualifications, reputation and experience in the valuation of businesses and securities in connection with mergers and acquisitions generally, as well as substantial experience in transactions comparable to the Merger.
Barclays is acting as a financial advisor to USS in connection with the Merger. The engagement letter between USS and Barclays provides for aggregate fees of approximately $68 million in connection with the Merger, including a transaction fee of approximately $63 million upon the completion of the Merger, approximately $13 million of which was payable upon the announcement of the Merger. A $5 million fee was paid upon execution of the engagement letter between USS and Barclays for prior work performed in connection with the Merger. The engagement letter between USS and Barclays also contemplated an independence fee of $22.5 million that would have been payable solely in the event that USS did not enter into a definitive agreement with respect to a transaction by a certain date. In addition, USS has agreed to reimburse Barclays for a portion of its reasonable out-of-pocket expenses incurred in connection with the Merger and to indemnify Barclays for certain liabilities that may arise out of its engagement by USS and the rendering of Barclays’ opinion. Barclays has performed various investment banking services for USS in the past, and expects to perform such services in the future, and has received, and expects to receive, customary fees for such services. During the two years prior to December 18, 2023, Barclays has provided various investment banking and financial services to USS for which Barclays has received compensation in an amount of approximately $2.6 million, excluding any compensation received in connection with the Merger. Specifically, in the past two years, Barclays has performed the following investment banking and financial services for USS: (i) in August 2022, acted as a co-manager on USS’s offering of $290 million of municipal bonds, (ii) in May 2023, acted as a co-manager on USS’s offering of $240 million of municipal bonds, (iii) acted as financial advisor to USS in connection with certain potential divestiture transactions and (iv) participated as a lender under USS’s existing credit facilities. In the past two years, Barclays has not received investment banking fees from NSC or any of its subsidiaries.
Barclays and its affiliates engage in a wide range of businesses from investment and commercial banking, lending, asset management and other financial and non-financial services. In the ordinary course of its business, Barclays and its affiliates may actively trade and effect transactions in the equity, debt and/or other securities (and any derivatives thereof) and financial instruments (including loans and other obligations) of USS, Parent and NSC for its own account and for the accounts of its customers and, accordingly, may at any time hold long or short positions and investments in such securities and financial instruments.
Opinion of Goldman Sachs & Co. LLC
At a special meeting of the Board of Directors held to evaluate the Merger, Goldman Sachs rendered its oral opinion, subsequently confirmed in writing by delivery of a written opinion dated December 18, 2023, that, as of such date and based upon and subject to the assumptions, limitations, qualifications and conditions described in Goldman Sachs’ written opinion, the Merger Consideration to be paid to the holders (other than NSC and its affiliates) of USS common stock pursuant to the Merger Agreement was fair from a financial point of view to such holders.
The full text of the written opinion of Goldman Sachs to the Board of Directors, which sets forth assumptions made, procedures followed, matters considered and limitations on the review undertaken by
 
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Goldman Sachs in rendering its opinion, is attached as Annex C to this proxy statement. The summary of Goldman Sachs’ opinion contained in this proxy statement is qualified in its entirety by reference to the full text of Goldman Sachs’ written opinion. Goldman Sachs’ advisory services and its opinion were provided for the information and assistance of the Board of Directors in connection with its consideration of the Merger and such opinion does not constitute a recommendation as to how any holder of USS common stock should vote with respect to the Merger, or any other matter.
In connection with rendering the opinion described above and performing its related financial analyses, Goldman Sachs reviewed, among other things:

the Merger Agreement;

annual reports to stockholders and Annual Reports on Form 10-K of USS for the five years ended December 31, 2022;

certain interim reports to stockholders and Quarterly Reports on Form 10-Q of USS;

certain other communications from USS to its stockholders;

certain publicly available research analyst reports for USS; and

certain internal financial analyses and forecasts for USS prepared by its management (referred to in this section as the “December 2023 Projections” and which are summarized in the section entitled “Certain Financial Projections” beginning on page 65), as approved for Goldman Sachs’ use by USS.
Goldman Sachs also held discussions with members of the senior management of USS regarding their assessment of the past and current business operations, financial condition and future prospects of USS; reviewed the reported price and trading activity for USS common stock; compared certain financial and stock market information for USS with similar information for certain other companies, the securities of which are publicly traded; reviewed the financial terms of certain recent business combinations in the steel industry and in other industries; and performed such other studies and analyses, and considered such other factors, as it deemed appropriate.
For purposes of rendering its opinion, Goldman Sachs, with the consent of the Board of Directors, relied upon and assumed the accuracy and completeness of all of the financial, legal, regulatory, tax, accounting and other information provided to, discussed with or reviewed by, it, without assuming any responsibility for independent verification thereof. In that regard, Goldman Sachs assumed with the consent of the Board of Directors that the December 2023 Projections were reasonably prepared on a basis reflecting the best then available estimates and judgments of the management of USS. Goldman Sachs did not make an independent evaluation, appraisal or geological or technical assessment of the assets and liabilities (including any contingent, derivative or other off-balance-sheet assets and liabilities) of USS or any of its subsidiaries and it was not furnished with any such evaluation or appraisal. Goldman Sachs assumed that all governmental, regulatory or other consents and approvals necessary for the consummation of the Merger will be obtained without any adverse effect on the expected benefits of the Merger in any way meaningful to its analysis. Goldman Sachs also assumed that the Merger will be consummated on the terms set forth in the Merger Agreement, without the waiver or modification of any term or condition the effect of which would be in any way meaningful to its analysis.
Goldman Sachs’ opinion does not address the underlying business decision of USS to engage in the Merger or the relative merits of the Merger as compared to any strategic alternatives that may be available to USS; nor does it address any legal, regulatory, tax or accounting matters. Goldman Sachs’ opinion addresses only the fairness from a financial point of view to the holders (other than NSC and its affiliates) of USS common stock, as of the date of its opinion, of the Merger Consideration to be paid to such holders pursuant to the Merger Agreement. Goldman Sachs does not express any view on, and its opinion does not address, any other term or aspect of the Merger Agreement or the Merger or any term or aspect of any other agreement or instrument contemplated by the Merger Agreement or entered into or amended in connection with the Merger, including the fairness of the Merger to, or any consideration received in connection therewith by, the holders of any other class of securities, creditors, or other constituencies of USS; nor as to the fairness of the amount or nature of any compensation to be paid or payable to any of the officers, directors or employees
 
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of USS, or class of such persons, in connection with the Merger, whether relative to the Merger Consideration to be paid to the holders (other than NSC and its affiliates) of USS common stock pursuant to the Merger Agreement or otherwise. Goldman Sachs does not express any opinion as to the prices at which USS common stock will trade at any time or as to the potential effects of volatility in the credit, financial and stock markets on USS or the Merger, or as to the impact of the Merger on the solvency or viability of USS or the ability of USS to pay its obligations when they come due. Goldman Sachs’ opinion was necessarily based on economic, monetary, market and other conditions as in effect on, and the information made available to Goldman Sachs as of, the date of its opinion and Goldman Sachs assumes no responsibility for updating, revising or reaffirming its opinion based on circumstances, developments or events occurring after the date of its opinion. Goldman Sachs’ opinion was approved by a fairness committee of Goldman Sachs.
Summary of Financial Analyses
The following is a summary of the material financial analyses delivered by Goldman Sachs to the Board of Directors in connection with rendering the opinion described above. The following summary, however, does not purport to be a complete description of the financial analyses performed by Goldman Sachs, nor does the order of analyses described represent relative importance or weight given to those analyses by Goldman Sachs. Some of the summaries of the financial analyses include information presented in tabular format. The tables must be read together with the full text of each summary and are alone not a complete description of Goldman Sachs’ financial analyses. Except as otherwise noted, the following quantitative information, to the extent that it is based on market data, is based on market data as it existed on or before December 15, 2023, the last trading day before the date on which the Board of Directors approved the Merger and is not necessarily indicative of current market conditions.
Illustrative Discounted Cash Flow Analysis
Using the December 2023 Projections, Goldman Sachs performed an illustrative discounted cash flow analysis on USS to derive a range of illustrative equity values per share of USS common stock. Using the mid-year convention for discounting cash flows and discount rates ranging from 10.75% to 12.50%, reflecting estimates of USS’s weighted average cost of capital, Goldman Sachs discounted to present value, as of September 30, 2023, (i) estimates of unlevered free cash flow for USS for the period from October 1, 2023 to December 31, 2032, as reflected in the December 2023 Projections and (ii) a range of illustrative terminal values for USS, which were calculated by applying a range of EV/NTM EBITDA multiples ranging from 3.5x to 6.0x, to an estimate of adjusted EBITDA to be generated by USS in calendar year 2033, as reflected in the December 2023 Projections (which analysis implied perpetuity growth rates ranging from (4.7)% to 2.9%). The range of EV/NTM EBITDA multiples was estimated by Goldman Sachs utilizing its professional judgment and experience, taking into account historical trading multiples of USS and certain publicly traded companies, as described below in the section captioned “Selected Publicly Traded Companies Trading Multiples.” Goldman Sachs derived such discount rates by application of the Capital Asset Pricing Model (which is referred to in this section as “CAPM”), which requires certain company-specific inputs, including USS’s target capital structure weightings, the cost of long-term debt, after-tax yield on permanent excess cash, if any, future applicable marginal cash tax rate and a beta for USS, as well as certain financial metrics for the United States financial markets generally.
Goldman Sachs derived a range of illustrative enterprise values for USS by adding the ranges of present values it derived above. Goldman Sachs then subtracted from the range of illustrative enterprise values it derived for USS the amount of USS’s net debt (including amounts attributable to tax-effected pension and other post-employment benefits) and non-controlling interest, in each case as of September 30, 2023,as provided by the management of USS and approved for Goldman Sachs’ use by USS, to derive a range of illustrative equity values for USS. Goldman Sachs then divided the range of illustrative equity values it derived by the number of fully diluted outstanding shares of USS common stock as of December 14, 2023, as provided by the management of USS and approved for Goldman Sachs’ use by USS, using the treasury stock method, to derive a range of illustrative equity values per share of USS common stock of $38.12 to $52.02.
Illustrative Present Value of Future Share Price Analysis
Using the December 2023 Projections, Goldman Sachs performed an illustrative analysis of the implied present value of an illustrative future value per share of USS common stock. For this analysis,
 
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Goldman Sachs first calculated the implied enterprise value of USS as of December 31 for each of the calendar years 2024 through 2026, by applying a range of illustrative EV/NTM EBITDA multiples of 3.5x to 5.0x to estimates of USS’s one-year forward adjusted EBITDA as of December 31 for each of the calendar years 2024 through 2026, respectively. This illustrative range of EV/NTM EBITDA multiple estimates was derived by Goldman Sachs utilizing its professional judgment and experience, taking into account current and historical EV/NTM EBITDA multiples for USS and certain publicly traded companies, as described below in the section captioned “Selected Publicly Traded Companies Trading Multiples.”
Goldman Sachs then subtracted the amount of USS’s net debt (including amounts attributable to tax-effected pension and other post-employment benefits) and non-controlling interest from the respective implied enterprise values in order to derive a range of illustrative equity values for USS as of December 31 for each of the calendar years 2024 through 2026. Goldman Sachs then divided these implied equity values by the projected year-end number of fully diluted outstanding shares of USS common stock for each of the calendar years 2024 through 2026, calculated using information provided by the management of USS and approved for Goldman Sachs’ use by USS, to derive a range of implied future values per share of USS common stock (excluding dividends). Goldman Sachs then added the cumulative dividends per USS common stock expected to be paid to holders of USS common stock through the end of each of calendar years 2024 through 2026, using the December 2023 Projections, to derive a range of implied future values per share of USS common stock (including dividends). By applying an illustrative discount rate of 14.2%, reflecting an estimate of USS’s cost of equity, and, for the dividends only, using a mid-year convention, Goldman Sachs discounted to present value as of September 30, 2023 both the theoretical future values per share of USS common stock it derived for USS and the estimated dividends to be paid per share of USS common stock through the end of each of calendar years 2024 through 2026. Goldman Sachs derived such discount rate by application of the CAPM, which requires certain company-specific inputs, including a beta for USS, as well as certain financial metrics for the United States financial markets generally. This analysis resulted in a range of implied equity values per share of USS common stock of $29.62 to $45.67.
Premia Paid Analysis
Goldman Sachs reviewed and analyzed, using publicly available information, the acquisition premia paid in certain all-cash acquisition transactions announced during the period from January 1, 2014 through December 15, 2023 involving U.S. publicly traded target companies with a transaction value equal to or greater than $1 billion. For each of the 10-year, five-year and three-year periods ended December 15, 2023 (which is referred to in the table below as “L10Y,” “L5Y” and “L3Y” respectively), using publicly available information, Goldman Sachs calculated the median, 25th percentile and 75th percentile average premia of the price paid in the observed transactions relative to the target’s last undisturbed closing share price prior to announcement of the respective transaction. The following table presents the results of this analysis:
Average Premia Paid
L10Y
L5Y
L3Y
Median
31% 36% 36%
25th Percentile
18% 20% 23%
75th Percentile
52% 62% 54%
Based on Goldman Sachs’ review of the foregoing data and its professional judgment and experience, Goldman Sachs applied a reference range of illustrative premia of 18% to 52% to the undisturbed closing price of USS common stock on August 11, 2023 of $22.72. This analysis resulted in a range of implied equity values per share of USS common stock of $26.81 to $34.53.
Selected Publicly Traded Companies Trading Multiples
Goldman Sachs reviewed and compared certain financial information of USS to corresponding publicly available financial information and valuation multiples for the following publicly traded companies in the steel industry, which are referred to in this section as the “selected companies”:

Cleveland-Cliffs;

Nucor; and

Steel Dynamics.
 
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Although none of the selected companies are directly comparable to USS, the selected companies were chosen because they are publicly traded companies in the steel industry with certain operations or financial characteristics that, for purposes of analysis, may be considered similar to certain operations or financial characteristics of USS.
For each of USS and, using publicly available information, the selected companies, Goldman Sachs calculated and compared (i) the average of EV/NTM EBITDA multiples for the five-year, three-year, two-year and one-year periods ended August 11, 2023, in each case, excluding data from the period March 25, 2020 to January 28, 2021 (which is referred to in the table below as “L5Y,” “L3Y,” “L2Y” and “LTM” respectively), (ii) the EV/NTM EBITDA of the closing price per share as of August 11, 2023 (which is referred to in the table below as “Undisturbed”) and (iii) the EV/NTM EBITDA of the closing price per share as of December 15, 2023 (which is referred to in the table below as “Current”).
The results of these calculations are summarized as follows:
Average EV/NTM EBITDA
Company
L5Y
L3Y
L2Y
LTM
Undisturbed
Current
USS
3.6x 2.9x 2.7x 3.6x 3.8x 5.6x
Cleveland-Cliffs
5.7x 5.1x 5.2x 5.9x 5.2x 5.8x
Steel Dynamics
5.3x 5.1x 5.0x 6.1x 5.9x 8.3x
Nucor
6.0x 5.8x 5.9x 7.0x 7.1x 7.7x
General
The preparation of a fairness opinion is a complex process and is not necessarily susceptible to partial analysis or summary description. Selecting portions of the analyses or of the summary set forth above, without considering the analyses as a whole, could create an incomplete view of the processes underlying Goldman Sachs’ opinion. In arriving at its fairness determination, Goldman Sachs considered the results of all of its analyses and did not attribute any particular weight to any factor or analysis considered by it. Rather, Goldman Sachs made its determination as to fairness on the basis of its experience and professional judgment after considering the results of all of its analyses. No company or transaction used in the above analyses as a comparison is directly comparable to USS or the Merger.
Goldman Sachs prepared these analyses for purposes of providing its opinion to the Board of Directors as to the fairness from a financial point of view of the Merger Consideration to be paid to the holders (other than NSC and its affiliates) of USS common stock. These analyses do not purport to be appraisals nor do they necessarily reflect the prices at which businesses or securities actually may be sold. Analyses based upon forecasts of future results are not necessarily indicative of actual future results, which may be significantly more or less favorable than suggested by these analyses. Because these analyses are inherently subject to uncertainty, being based upon numerous factors or events beyond the control of the parties or their respective advisors, none of USS, Parent, NSC, Goldman Sachs or any other person assumes responsibility if future results are materially different from those forecast.
The Merger Consideration was determined through arm’s-length negotiations between USS and NSC and was approved by the Board of Directors. Goldman Sachs provided advice to USS during these negotiations. Goldman Sachs did not, however, recommend any specific amount of consideration to USS or the Board of Directors or that any specific amount of consideration constituted the only appropriate consideration for the Merger.
As described above, Goldman Sachs’ opinion to the Board of Directors was one of many factors taken into consideration by the Board of Directors in making its determination to approve the Merger Agreement. The foregoing summary does not purport to be a complete description of the analyses performed by Goldman Sachs in connection with the fairness opinion and is qualified in its entirety by reference to the written opinion of Goldman Sachs attached as Annex C.
Goldman Sachs and its affiliates are engaged in advisory, underwriting, lending and financing, principal investing, sales and trading, research, investment management and other financial and non-financial
 
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activities and services for various persons and entities. Goldman Sachs and its affiliates and employees, and funds or other entities they manage or in which they invest or have other economic interests or with which they co-invest, may at any time purchase, sell, hold or vote long or short positions and investments in securities, derivatives, loans, commodities, currencies, credit default swaps and other financial instruments of USS, NSC, Parent, any of their respective affiliates and third parties or any currency or commodity that may be involved in the Merger. Goldman Sachs acted as a financial advisor to USS in connection with, and participated in certain of the negotiations leading to, the Merger. Goldman Sachs has provided certain financial advisory and/or underwriting services to USS and its affiliates from time to time for which Goldman Sachs Investment Banking has received, and may receive, compensation, including having acted as co-manager with respect to the issuance of unsecured bonds of USS in May 2023; as co-manager with respect to the issuance of unsecured bonds of USS in September 2022; and as co-manager with respect to the tender offer to purchase senior notes of USS and certain of its subsidiaries in September 2022. During the two-year period ended December 18, 2023, Goldman Sachs has recognized compensation for financial advisory and/or underwriting services provided by Goldman Sachs Investment Banking to USS, and/or its affiliates of approximately $0.4 million. During the two-year period ended December 18, 2023, Goldman Sachs Investment Banking has not been engaged by NSC, Parent or their respective affiliates to provide financial advisory or underwriting services for which Goldman Sachs has recognized compensation. Goldman Sachs may also in the future provide financial advisory and/or underwriting services to USS, NSC, Parent and their respective affiliates for which Goldman Sachs Investment Banking may receive compensation.
The Board of Directors selected Goldman Sachs as a financial advisor because it is an internationally recognized investment banking firm that has substantial experience in transactions similar to the Merger. Pursuant to a letter agreement dated September 28, 2023, USS engaged Goldman Sachs to act as a financial advisor in connection with its review of strategic alternatives, including with respect to the Merger. The engagement letter between USS and Goldman Sachs provides for a transaction fee of approximately $63 million upon the completion of the Merger, approximately $13 million of which was payable upon the announcement of the Merger. The engagement letter between USS and Goldman Sachs also contemplated an independence fee of $22.5 million that would have been payable solely in the event that USS did not enter into a definitive agreement with respect to a transaction by a certain date. In addition, USS has agreed to reimburse Goldman Sachs for certain of its expenses, including attorneys’ fees and disbursements, and to indemnify Goldman Sachs and related persons against various liabilities, including certain liabilities under the federal securities laws.
Certain Financial Projections
Except for quarterly guidance, USS does not, as a matter of course, otherwise publicly disclose internal projections as to future performance, earnings or other results beyond the then-current quarterly and/or annual period due to, among other reasons, the inherent difficulty of accurately predicting financial performance for future periods and the uncertainty, unpredictability and subjectivity of underlying assumptions and estimates. However, in the ordinary course, USS management prepares a long-term strategic plan, which is periodically updated and reviewed with the Board of Directors, that reflects USS management’s financial and business outlook for USS. In connection with the proposed Merger, USS is including in this proxy statement a summary of certain limited unaudited prospective financial information of USS, on a standalone basis without giving effect to the Merger, prepared by USS management, solely because, as described below, such financial information was given to the Board of Directors and to each of Barclays and Goldman Sachs in the process leading to the execution of the Merger Agreement. The December 2023 Projections (as defined below) were provided to each of Barclays and Goldman Sachs and approved by USS for their respective use and reliance in connection with each of Barclays’ and Goldman Sachs’ respective opinions, as discussed in this proxy statement in the sections entitled “Opinion of Barclays Capital Inc.” and “Opinion of Goldman Sachs & Co. LLC.”
In July 2023, in connection with the Board of Directors’ regular annual strategic planning process and in connection with the Board of Directors’ consideration and evaluation of the acquisition proposals received as of such time from Company A and Consortium B, USS management prepared certain unaudited, preliminary financial forecasts for USS for fiscal years 2023 through 2028, which USS management also extrapolated through fiscal year 2033 (which we refer to as the “July 2023 Projections”).
 
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Between August and September 2023, as part of the Company’s strategic alternatives review process, including in connection with the Board of Directors’ evaluation of, and Barclays’ and Goldman Sachs’ preliminary financial analysis of, the various acquisition proposals received as of such time, USS management updated the projections and extrapolations included in the July 2023 Projections to take into account changes in the internal and external business environment, including updates with respect to the passage of time (which we refer to as the “September 2023 Projections”). The September 2023 Projections comprised a “Management Base Plan” and a “Growth Scenario.” The Management Base Plan was based on numerous variables and assumptions, including assumptions with respect to the price of hot-rolled coil, the timing and economics of certain in-flight strategic projects and other operational considerations (e.g., reduction of carbon footprint), as well as potential initiatives to increase direct returns to USS stockholders. Relative to the Management Base Plan, the Growth Scenario assumed no changes with respect to the price of hot-rolled coil or direct returns to USS stockholders, but reflected a significantly more aggressive outlook with respect to the timing and realization of additional investments by the Company in strategic projects and additional footprint reduction. USS management believed the Management Base Plan was achievable without undue execution risk relative to the Growth Scenario, which was illustrative in nature and prepared solely for the discussion and analysis of the Board of Directors. The first six years of the Management Base Plan (i.e., fiscal years 2023 through 2028) were made available to all participants in the strategic alternatives review process, and the extrapolated years of fiscal year 2029 through fiscal year 2033 were not provided given the speculative nature of long-term projections and likelihood that the underlying assumptions and estimates may not be realized or may change.
In December 2023, USS management made updates to the projections and extrapolations in the Management Base Plan included in the September 2023 Projections related to USS’s actual 2023 performance and its 2024 capital budget (which we refer to as the “December 2023 Projections”). The Board of Directors reviewed the December 2023 Projections in connection with the Board of Directors’ evaluation of the updated proposals to acquire USS, including NSC’s final proposal to acquire USS and the proposed Merger. USS approved Barclays’ and Goldman Sachs’ respective use of, and reliance on, the December 2023 Projections in connection with the financial analyses presented by each of Barclays and Goldman Sachs, respectively, to the Board of Directors and each of Barclays’ and Goldman Sachs’ respective opinions, as discussed in this proxy statement in the sections entitled “Opinion of Barclays Capital Inc.” and “Opinion of Goldman Sachs & Co. LLC.”
The July 2023 Projections, the September 2023 Projections, and the December 2023 Projections are referred to collectively as the “Company Projections.” USS is including a summary of the Company Projections to provide USS stockholders with access to information that was made available to the Board of Directors in connection with its evaluation of the Merger and the Merger Consideration.
July 2023 Projections
USS management prepared the July 2023 Projections with respect to USS’s business, as a standalone company, for the second half of fiscal year 2023 through fiscal year 2033. USS’s management provided the Board of Directors with the July 2023 Projections in connection with the Board of Directors’ consideration and evaluation of the acquisition proposals received as of such time from Company A and Consortium B. In addition, the July 2023 Projections were provided to each of Barclays and Goldman Sachs in connection with the preliminary financial analysis presented by Barclays and Goldman Sachs to the Board of Directors at the July 23 – 25, 2023 meeting of the Board of Directors.
The following table summarizes the July 2023 Projections, with dollars in millions:
2H 2023E
2024E
2025E
2026E
2027E
2028E
2029E
2030E
2031E
2032E
2033E
Revenue(1)
$ 8,079 $ 15,479 $ 17,301 $ 17,081 $ 16,965 $ 17,006 $ 16,757 $ 16,757 $ 12,342 $ 12,342 $ 12,342
Adj. EBITDA(2)
$ 602 $ 1,838 $ 3,012 $ 3,150 $ 3,094 $ 2,937 $ 2,724 $ 2,549 $ 2,530 $ 2,521 $ 2,512
Capital Expenditures
$ 1,104 $ 1,402 $ 679 $ 644 $ 648 $ 594 $ 551 $ 541 $ 491 $ 491 $ 491
Unlevered Free Cash Flow(3)
$ (495) $ 137 $ 1,677 $ 2,009 $ 1,970 $ 1,902 $ 1,801 $ 1,433 $ 2,321 $ 1,650 $ 1,642
 
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(1)
USS management assumed prices per net ton of hot-rolled coil of $748 for the second half of fiscal year 2023, $750 in fiscal year 2024 and $700 in each of fiscal years 2025-2033.
(2)
Adj. EBITDA is defined as earnings before interest, taxes, depreciation and amortization, including the effect of stock-based compensation expense.
(3)
Unlevered Free Cash Flow is defined as Adj. EBITDA, less cash taxes, less capital expenditures, adjusted for net working capital increases / decreases, other cash flow expenses / income and any other non-cash flow expenses / income.
September 2023 Projections
USS management prepared the September 2023 Projections with respect to USS’s business, as a standalone company, for the second half of fiscal year 2023 through fiscal year 2033. USS’s management provided the Board of Directors with the September 2023 Projections as part of the Company’s strategic alternatives review process, including in connection with the Board of Directors’ evaluation of the various acquisition proposals received as of such time. USS management believed the Management Base Plan was achievable without undue execution risk relative to the Growth Scenario, which was illustrative in nature and prepared solely for the discussion and analysis of the Board of Directors. The first six years of the Management Base Plan (i.e., fiscal years 2023 through 2028) were made available to all participants in the strategic alternatives review process, and the extrapolated years of fiscal year 2029 through fiscal year 2033 were not provided given the speculative nature of long-term projections and likelihood that the underlying assumptions and estimates may not be realized or may change. In addition, the September 2023 Projections were provided to each of Barclays and Goldman Sachs, who were instructed to utilize the Management Base Plan in connection with the preliminary financial analysis presented by Barclays and Goldman Sachs to the Board of Directors at the September 27, 2023 meeting.
Management Base Plan
The following table summarizes the Management Base Plan, with dollars in millions:
2H
2023E
2024E
2025E
2026E
2027E
2028E
2029E
2030E
2031E
2032E
2033E
Revenue(1)
$ 8,393 $ 17,688 $ 18,189 $ 17,859 $ 17,743 $ 17,784 $ 17,535 $ 17,535 $ 13,120 $ 13,120 $ 13,120
Adj. EBITDA(2)
$ 820 $ 2,365 $ 2,985 $ 3,082 $ 3,061 $ 2,993 $ 2,780 $ 2,605 $ 2,586 $ 2,577 $ 2,569
Capital Expenditures
$ 1,161 $ 1,503 $ 803 $ 762 $ 692 $ 602 $ 557 $ 547 $ 497 $ 497 $ 497
Unlevered Free Cash Flow(3)
$ (132) $ 141 $ 1,599 $ 1,855 $ 1,838 $ 1,864 $ 1,770 $ 1,396 $ 2,284 $ 1,614 $ 1,606
(1)
USS management assumed prices per net ton of hot-rolled coil of $776 for the second half of fiscal year 2023, $750 in fiscal year 2024 and $700 in each of fiscal years 2025-2033.
(2)
Adj. EBITDA is defined as earnings before interest, taxes, depreciation and amortization, excluding the effect of stock-based compensation expense.
(3)
Unlevered Free Cash Flow is defined as Adj. EBITDA, less stock-based compensation expense, less cash taxes, less capital expenditures, adjusted for net working capital increases / decreases, other cash flow expenses / income and any other non-cash flow expenses / income. Unlevered free cash flow as included in the Management Base Plan conveyed to participants in the strategic alternatives review process excluded the effect of stock-based compensation of approximately $45 million per year.
 
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Growth Scenario
The following table summarizes the Growth Scenario, with dollars in millions:
2H
2023E
2024E
2025E
2026E
2027E
2028E
2029E
2030E
2031E
2032E
2033E
Revenue(1)
$ 8,393 $ 17,997 $ 18,691 $ 18,362 $ 18,246 $ 18,468 $ 18,415 $ 19,535 $ 14,204 $ 15,458 $ 15,460
Adj. EBITDA(2)
$ 836 $ 2,365 $ 2,985 $ 3,179 $ 3,255 $ 3,316 $ 3,267 $ 3,333 $ 3,245 $ 3,757 $ 3,753
Capital Expenditures
$ 1,161 $ 1,503 $ 2,039 $ 1,549 $ 1,418 $ 1,964 $ 2,091 $ 1,224 $ 454 $ 449 $ 449
Free Cash Flow(3)
$ (142) $ (38) $ 397 $ 1,173 $ 1,260 $ 783 $ 568 $ 1,289 $ 2,671 $ 2,572 $ 2,568
(1)
USS management assumed prices per net ton of hot-rolled coil of $776 for the second half of fiscal year 2023, $750 in fiscal year 2024 and $700 in each of fiscal years 2025-2033.
(2)
Adj. EBITDA is defined as earnings before interest, taxes, depreciation and amortization, excluding the effect of stock-based compensation expense.
(3)
Free Cash Flow is defined as net income, less capital expenditures, adjusted for net working capital increases / decreases, other cash flow expenses / income and any other non-cash flow expenses / income.
December 2023 Projections
USS management prepared the December 2023 Projections as an update to the Management Base Plan with respect to USS’s business, as a standalone company, for the fourth quarter of fiscal year 2023 through fiscal year 2033. USS’s management provided the Board of Directors with the December 2023 Projections as part of the Company’s strategic alternatives review process, including in connection with the Board of Directors’ evaluation of the various acquisition proposals received as of such time, including, in particular, the latest proposals from NSC and Company D. In addition, the December 2023 Projections were provided to each of Barclays and Goldman Sachs and were approved by USS for Barclays’ and Goldman Sachs’ respective use and reliance in connection with the financial analyses presented by each of Barclays and Goldman Sachs respectively to the Board of Directors at the December 17, 2023 meeting and each of Barclays’ and Goldman Sachs’ respective opinions, as discussed in this proxy statement in the sections entitled “Opinion of Barclays Capital Inc.” and “Opinion of Goldman Sachs & Co. LLC”. The July 2023 Projections and the September 2023 Projections were not approved by USS for Barclays’ and Goldman Sachs’ respective use and reliance in connection with the financial analyses presented by each of Barclays and Goldman Sachs respectively to the Board of Directors at the December 17, 2023 meeting and each of Barclays’ and Goldman Sachs’ respective opinions, as discussed in this proxy statement in the sections entitled “Opinion of Barclays Capital Inc.” and “Opinion of Goldman Sachs & Co. LLC.”
In preparing the December 2023 Projections, USS management relied on a number of factors, including USS management’s experience in the industry, historical business performance and trends, and certain industry assumptions. USS deemed the assumptions used to derive the December 2023 Projections as reasonable as of the date finalized and that such assumptions reflected the best then-available estimates and judgments. In developing the December 2023 Projections, USS management applied its regular forecasting processes, including near-term and “through the cycle” assumptions with respect to selling prices, raw material input costs, sustaining capital expenditures and other operating metrics. With respect to revenue, USS management assumed the current product mix and contract structures with customers across key operating segments would remain consistent, except with respect to the impact of in-flight strategic projects described below. With respect to cost inputs, USS management assumed a mix of variable and fixed costs consistent with historical experiences across key operating segments, unless otherwise noted.
For the near-term forecast period (fourth quarter of fiscal year 2023 and fiscal year 2024), USS management made assumptions as to selling prices, raw material input costs and operating metrics based on current and prevailing market forecasts related to the upcoming calendar year and USS management’s historical experience. These include CRU forecasts for hot-rolled coil products in North America, Platts Iron Ore Index (IODEX) prices for iron ore, various external sources for metallics, energy prices and foreign
 
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exchange rates, as well as other specific indicators related to each business segment. For the period of 2025 through 2033, a “through the cycle” methodology was used to establish forecasts. This period assumed normalized sales volumes, selling prices, raw material input costs and sustaining capital expenditures for each business segment (except as noted below) based on an extended historical analysis. The December 2023 Projections also reflected various other material assumptions with respect to the period of 2025 through 2033, including, but not limited to, the following:

For the North American Flat-rolled and Mini Mill business segments, consistent with past practices, USS management assumed historical premiums to hot-rolled coil prices were applicable to cold-rolled, coated and other finished products and that raw material prices would be consistent with the historical relationship between steel selling prices and the underlying raw material basket. USS management assumed normalized utilization rates across key production units based on internal and external market outlooks across the segments served by North American Flat-rolled and Mini Mill to project customer volumes.

For the European business segment, future projections beginning in 2025 assumed a normalization of business conditions after multiple years of geo-political disruption from the war in Ukraine. While selling prices and raw material costs were assumed to reflect normalized levels, the December 2023 Projections assumed increasing cost headwinds due to growing carbon taxes, which ultimately erode profitability by 2030.

In the Tubular segment, oil and natural gas prices were assumed to remain supportive of stable production and drilling levels while rig counts in North America were assumed to remain above 650 through 2028. Beyond 2028, selling prices were assumed to moderate based on assumed efficiency gains in oil and gas production.

USS management assumed that currently contemplated strategic investments, including a new three million ton mini mill, a non-grain oriented steel finishing line, an additional coating line at Big River Steel and a direct reduction float plant at USS’s Keetac mining facility, would be completed consistent with anticipated timelines, including approximately $1.3 billion in capital expenditures to complete projects through 2025. Together, these projects are expected to deliver nearly $1 billion in incremental annual EBITDA, with run-rate performance assumed to commence in 2026. USS management assumed that there would not be any additional strategic investments and that, accordingly, there would not be any further impact on capital expenditures, future earnings or cash flow resulting from strategic investments.

USS management assumed that various continuous improvement programs, which are meant to deliver superior operational performance and a stream-lined fixed cost structure, would deliver an incremental $200 million in annual EBITDA relative to historical “through the cycle” performance with run-rate starting in 2027.

The December 2023 Projections assumed no material acquisitions or divestitures by USS.
The following table summarizes the December 2023 Projections, with dollars in millions:
Q4
2023E
2024E
2025E
2026E
2027E
2028E
2029E
2030E
2031E
2032E
2033E
Revenue(1)
$ 4,103 $ 17,688 $ 18,189 $ 17,859 $ 17,743 $ 17,784 $ 17,535 $ 17,535 $ 13,120 $ 13,120 $ 13,120
Adj. EBITDA(2)
$ 223 $ 2,365 $ 2,985 $ 3,082 $ 3,061 $ 2,993 $ 2,780 $ 2,605 $ 2,586 $ 2,577 $ 2,569
Capital Expenditures
$ 572 $ 1,549 $ 803 $ 762 $ 692 $ 602 $ 557 $ 547 $ 497 $ 497 $ 497
Unlevered Free Cash Flow(3)
$ (418) $ 95 $ 1,599 $ 1,855 $ 1,838 $ 1,864 $ 1,770 $ 1,396 $ 2,284 $ 1,614 $ 1,606
(1)
USS management assumed prices per net ton of hot-rolled coil of $814 for the fourth quarter of fiscal year 2023, $750 in fiscal year 2024 and $700 in each of fiscal years 2025-2033.
 
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(2)
Adj. EBITDA is defined as earnings before interest, taxes, depreciation and amortization, excluding the effect of stock-based compensation expense.
(3)
Unlevered Free Cash Flow is defined as Adj. EBITDA, less stock-based compensation expense, less cash taxes, less capital expenditures, adjusted for net working capital increases / decreases, other cash flow expenses / income and any other non-cash flow expenses / income.
Important Information Regarding the Company Projections
The inclusion of the Company Projections or of this summary does not constitute an admission or representation by USS, Barclays, Goldman Sachs, Evercore or any other person that the information is material, should not be regarded as an indication that the Board of Directors, Barclays, Goldman Sachs, Evercore, USS or its management or any other recipient of this information considered, or now considers, it to be an assurance of the achievement of future results or an accurate prediction of future results, and they should not be relied on as such. This information is not fact and should not be relied upon as indicative of actual future results, and readers of this proxy statement are cautioned not to place undue reliance on the Company Projections.
The Company Projections include financial measures not prepared using United States generally accepted accounting principles (which we refer to as “GAAP”), including Adjusted EBITDA, Unlevered Free Cash Flow and Free Cash Flow. Please see the tables above for a description of how USS defines these non-GAAP financial measures for purposes of the Company Projections in this section. Non-GAAP financial measures should not be considered in isolation from, or as a substitute for, financial information presented in accordance with GAAP, and non-GAAP financial measures used by USS may not be comparable to similarly titled measures used by other companies.
The Company Projections and the underlying assumptions upon which the Company Projections were based are subjective in many respects and subject to multiple interpretations and frequent revisions attributable to the dynamics of USS’s industry and based on actual experience and business developments. The Company Projections, while presented with numerical specificity, reflect numerous assumptions with respect to Company performance, industry performance, general business, economic, regulatory, market and financial conditions and other matters, many of which are difficult to predict, subject to significant economic and competitive uncertainties and beyond USS’s control. The Company Projections constitute forward-looking information and are subject to a wide variety of significant risks and uncertainties, including those described in the section of this proxy statement entitled “Forward-Looking Statements,” that could cause the Company Projections or the underlying assumptions to be inaccurate or for actual results to differ materially from the Company Projections. As a result, the Company Projections may not be realized and actual results may be significantly higher or lower than projected, and the Company Projections cannot be considered a guarantee of future operating results and should not be relied upon as such. Because the Company Projections cover multiple years, such information by its nature becomes less reliable with each successive year. The Company Projections do not take into account any circumstances or events occurring after the date on which they were prepared, including the Merger, and some or all of the assumptions that have been made in connection with the preparation of the Company Projections may have changed since the date the Company Projections were prepared. Economic and business environments can and do change quickly, which adds an additional significant level of uncertainty as to whether the results portrayed in the Company Projections will be achieved.
In addition, the Company Projections have not been updated or revised to reflect information or results after the date the Company Projections were prepared or as of the date of this proxy statement. None of USS, NSC or any of our or their respective affiliates intends to, and each of them disclaims any obligation to, update or otherwise revise the Company Projections or the specific portions presented to reflect circumstances existing after the date when made or to reflect the occurrence of future events, even in the event that any or all of the assumptions are shown to be in error (except as required by applicable securities laws). These considerations should be taken into account in reviewing the Company Projections, which were prepared as of an earlier date.
For the foregoing reasons, and considering that the Special Meeting will be held several months after the Company Projections were prepared, as well as the uncertainties inherent in any forecasting information,
 
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readers of this proxy statement are cautioned not to place unwarranted reliance on the Company Projections set forth above. The summary of the Company Projections is not provided to influence USS stockholders’ decisions regarding whether to vote for the Merger Agreement Proposal or any other proposal. The Company Projections should be evaluated, if at all, in conjunction with the historical financial statements and other information contained in USS’s public filings with the SEC. USS urges all of its stockholders to review its most recent SEC filings for a description of its reported financial results. See the section of this proxy statement entitled “Where You Can Find More Information.”
The Company Projections were not prepared with the purpose of, or with a view toward, public disclosure or toward compliance with United States GAAP, published guidelines of the SEC or the guidelines established by the American Institute of Certified Public Accountants for preparation and presentation of prospective financial information. Neither PricewaterhouseCoopers LLP (which we refer to as “PwC”), USS’s independent registered public accounting firm, nor any other accounting firm, has examined, compiled, or performed any procedures with respect to the Company Projections and, accordingly, neither PwC nor any other accounting firm expresses an opinion or any other form of assurance with respect thereto. The PwC report incorporated by reference in this proxy statement relates to USS’s historical financial information. It does not extend to the prospective financial information contained herein and should not be read to do so.
None of USS or its affiliates, officers, directors, advisors or other representatives has made or makes any representation to any USS stockholder or to Parent or Merger Sub in the Merger Agreement or otherwise concerning the Company Projections or regarding USS’s ultimate performance compared to the information contained in the Company Projections or that the projected results will be achieved.
Interests of USS’s Executive Officers and Directors in the Merger
In considering the recommendation of the Board of Directors that USS stockholders approve the transaction and vote in favor of the Merger Agreement Proposal, the Compensation Proposal and the Adjournment Proposal, USS stockholders should be aware that the executive officers and directors of USS have certain interests in the transactions that are or may be different from, or in addition to, the interests of USS stockholders generally. The Board of Directors was aware of these interests and considered them, among other matters, in approving the Merger Agreement and the transactions contemplated by it, including the Merger, and in making their recommendation that USS stockholders adopt the Merger Agreement.
These interests are described in more detail below, and certain of these interests are quantified in the narrative below, including compensation that may become payable in connection with the Merger to USS’s named executive officers, as described under the section titled “Quantification of Payments and Benefits to USS’s Named Executive Officers — 402(t) Table” ​(which is the subject of the advisory (non-binding) vote of USS stockholders described in Proposal 2: The Compensation Proposal). The dates used below to quantify these interests have been selected for illustrative purposes only in accordance with SEC rules and do not necessarily reflect the dates on which certain events will occur.
For purposes of this disclosure, USS’s executive officers are:

David B. Burritt — President & Chief Executive Officer & Director,

Jessica T. Graziano — Senior Vice President & Chief Financial Officer,

James E. Bruno — Senior Vice President  —  European Solutions & President, USSK,

Scott D. Buckiso — Senior Vice President & Chief Manufacturing Officer, NAFR,

Duane D. Holloway — Senior Vice President, General Counsel and Chief Ethics & Compliance Officer,

Daniel R. Brown — Senior Vice President — Advanced Technology Steelmaking & Chief Operating Officer, Big River Steel Works,

Richard L. Fruehauf — Senior Vice President — Chief Strategy & Sustainability Officer,

Manpreet S. Grewal — Vice President, Controller & Chief Accounting Officer, and

Kenneth E. Jaycox — Senior Vice President and Chief Commercial Officer.
 
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For purposes of this disclosure, USS’s non-employee directors are:

Tracy A. Atkinson,

Andrea J. Ayers,

Alicia J. Davis,

Terry L. Dunlap,

John J. Engel,

John V. Faraci,

Murry S. Gerber,

Jeh C. Johnson,

Paul A. Mascarenas,

Michael H. McGarry,

David S. Sutherland, and

Patricia A Tracey.
For purposes of this disclosure, Christine S. Breves (Former Executive Vice President -Business Transformation and Senior Vice President & Chief Financial Officer), is not considered an executive officer, but is considered a named executive officer for purposes of the section titled “Quantification of Payments and Benefits to USS’s Named Executive Officers — 402(t) Table.” Ms. Breves served as USS’s Chief Financial Officer until August 8, 2022 and resigned from USS as of December 31, 2022.
Treatment of USS Equity Awards
Immediately prior to the Effective Time, and without any action on the part of Parent, USS or any other person, each Company RSU Award (or portion thereof) that is outstanding immediately prior to the Effective Time will, to the extent not vested, automatically become fully vested and be cancelled and converted into the right of the holder of each such Company RSU Award (or portion thereof) to receive (subject to any applicable withholdings) an amount in cash equal to the product of (i) the Merger Consideration, multiplied by (ii) the total number of shares of USS common stock subject to such Company RSU Award (or portion thereof) immediately prior to the Effective Time, together with any accrued and unpaid dividends corresponding to such vested Company RSU Award (or portion thereof).
Immediately prior to the Effective Time, and without any action on the part of Parent, USS or any other person, each Company PSU Award (or portion thereof) that is outstanding immediately prior to the Effective Time will, to the extent not vested, automatically become fully vested and be cancelled and converted into the right of the holder of each such Company PSU Award (or portion thereof) to receive (subject to any applicable withholdings) an amount in cash equal to the product of (i) the Merger Consideration, multiplied by (ii) the total number of shares of USS common stock subject to such Company PSU Award (or portion thereof) immediately prior to the Effective Time, together with any accrued and unpaid dividends corresponding to such vested Company PSU Award (or portion thereof). The total number of shares of USS common stock subject to a Company PSU Award will be based on actual performance for any portion of a Company PSU Award that has been earned by its terms as of the Effective Time but has not yet vested. For any portion of a Company PSU Award that has not been earned by its terms as of the Effective Time, the total number of shares of USS common stock subject to a Company PSU Award will be based on deemed achievement of the greater of (1) maximum performance, if required by the applicable award agreement as of the date of the Merger Agreement, (2) actual performance or (3) target performance through the Effective Time.
Immediately prior to the Effective Time, and without any action on the part of Parent, USS or any other person, each Company Option Award (or portion thereof) that is outstanding immediately prior to the Effective Time will, to the extent not vested, automatically become fully vested and be cancelled, and converted into the right of the holder of each such Company Option Award to receive (subject to any
 
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applicable withholdings) an amount in cash equal to the product of (i) the positive difference, if any, of the Merger Consideration minus the applicable exercise price of such Company Option Award, multiplied by (ii) the number of shares of USS common stock subject to such Company Option Award immediately prior to the Effective Time (assuming full vesting for any Company Option Award (or portion thereof) that is subject to performance-based vesting). If the exercise price of any Company Option Award (whether vested or unvested) is equal to or greater than the Merger Consideration, such Company Option Award will be cancelled without payment and will have no further force or effect.
Each Company DSU Award will be converted into the right to receive an amount in cash equal to the Merger Consideration or such other amount contemplated by the Company DSU Award and settled in accordance with the terms of such award.
We estimate that the aggregate value of unvested equity awards held by all executive officers of USS that would vest assuming the Closing occurs on February 21, 2024 (which is the latest practicable date to determine such amount before the filing of this proxy statement), is $136,337,162 (excluding C. Breves), calculated based on the Merger Consideration of $55.00 per share and assuming that Company PSU Awards vest at target. For additional information regarding the individualized value of unvested USS equity awards held by our named executive officers that would vest assuming that the Closing occurs on February 21, 2024, see the section titled “Quantification of Payments and Benefits to USS’s Named Executive Officers — 402(t) Table.”
Name
Company
RSU Awards
($)
Company
PSU Awards
($)
Company
Option Awards
($)
Named Executive Officers(i)
David B. Burritt
$ 12,065,955 $ 35,720,520 $ 6,407,262
Jessica T. Graziano
$ 5,275,435 $ 10,638,155
James E. Bruno
$ 2,001,835 $ 9,274,100 $ 85,913
Scott D. Buckiso
$ 2,001,835 $ 9,274,100 $ 789,447
Duane D. Holloway
$ 2,001,835 $ 9,274,100
Executive Officers (excluding the named executive officers above) as an Aggregated Group
$ 10,736,495 $ 20,716,850 $ 73,325
Total
$ 35,538,690 $ 102,574,175 $ 7,355,947
(i)
As of February 21, 2024, Mr. Burritt has met the requirements for a normal retirement (i.e., age 65) and full vesting and Mr. Buckiso has met the requirements for an early retirement (i.e., age 55 with 10 years of service) and pro rata vesting.
We estimate that the aggregate value of unvested equity awards held by all non-employee directors of USS that would vest assuming the Closing occurs on February 21, 2024 (which is the latest practicable date to determine such amount before the filing of this proxy statement), is $40,847,124, calculated based on the Merger Consideration of $55.00 per share.
 
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Equity Awards
Name
Company
DSU
Awards
($)
Unvested
Company
RSU
Awards
($)
Non-Employee Directors
Tracy A. Atkinson
$ 1,667,368
Andrea J. Ayers
$ 902,539
Alicia J. Davis
$ 423,720
Terry L. Dunlap
$ 473,660
John J. Engel
$ 4,806,524
John V. Faraci
$ 1,950,886 $ 198,550
Murry S. Gerber
$ 3,689,943 $ 397,045
Jeh C. Johnson
$ 3,513,320
Paul A. Mascarenas
$ 3,586,922 $ 203,005
Michael H. McGarry
$ 2,174,456
David S. Sutherland
$ 11,777,625
Patricia A Tracey
$ 4,709,376 $ 372,185
Total
$ 38,778,959 $ 2,068,165
Change in Control Severance Plan
USS maintains the Change in Control Severance Plan (which we refer to as the “CIC Plan”), which provides for enhanced severance benefits, in lieu of the benefits provided under other severance plans maintained by USS for the benefit of its employees, for certain executive officers approved by the Compensation Committee & Organization of the USS Board of Directors in the event of certain qualifying terminations in connection with a “Change in Control” ​(as d