-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: keymaster@town.hall.org Originator-Key-Asymmetric: MFkwCgYEVQgBAQICAgADSwAwSAJBALeWW4xDV4i7+b6+UyPn5RtObb1cJ7VkACDq pKb9/DClgTKIm08lCfoilvi9Wl4SODbR1+1waHhiGmeZO8OdgLUCAwEAAQ== MIC-Info: RSA-MD5,RSA, BqWDAZiqg9r5JsoFy3YuVWAQZM1ptKklm/+7fFVdOb0R5AFX3Xr7eo9K6YzZiq0z c9fW8nVOcONXuNdCk32gpg== 0000950128-94-000043.txt : 19940228 0000950128-94-000043.hdr.sgml : 19940228 ACCESSION NUMBER: 0000950128-94-000043 CONFORMED SUBMISSION TYPE: 424B5 PUBLIC DOCUMENT COUNT: 1 FILED AS OF DATE: 19940225 FILER: COMPANY DATA: COMPANY CONFORMED NAME: USX CAPITAL LLC CENTRAL INDEX KEY: 0000916849 STANDARD INDUSTRIAL CLASSIFICATION: 3312 STATE OF INCORPORATION: DE FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: 424B5 SEC ACT: 33 SEC FILE NUMBER: 033-52287 FILM NUMBER: 94512770 BUSINESS ADDRESS: STREET 1: MACLAW HOUSE DUKE STREET STREET 2: P O BOX 103 CITY: GRAND TURKS STATE: W7 ZIP: 15219-4776 BUSINESS PHONE: 4124331121 MAIL ADDRESS: STREET 1: C/O USX CAPITAL MANAGEMENT CO STREET 2: 5555 SAND FELIPE ROAD CITY: HOUSTON STATE: TX ZIP: 77056 FILER: COMPANY DATA: COMPANY CONFORMED NAME: USX CORP CENTRAL INDEX KEY: 0000101778 STANDARD INDUSTRIAL CLASSIFICATION: 3312 IRS NUMBER: 250996816 STATE OF INCORPORATION: DE FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: 424B5 SEC ACT: 33 SEC FILE NUMBER: 033-52287-01 FILM NUMBER: 94512771 BUSINESS ADDRESS: STREET 1: 600 GRANT ST CITY: PITTSBURGH STATE: PA ZIP: 15219-4776 BUSINESS PHONE: 4124331121 FORMER COMPANY: FORMER CONFORMED NAME: UNITED STATES STEEL CORP/DE DATE OF NAME CHANGE: 19860714 424B5 1 USX CAPITAL LLC 1 PROSPECTUS SUPPLEMENT TO PROSPECTUS DATED FEBRUARY 22, 1994 10,000,000 SHARES USX CAPITAL LLC 8 3/4% CUMULATIVE MONTHLY INCOME PREFERRED SHARES ("MIPS"*), SERIES A (LIQUIDATION PREFERENCE $25 PER SHARE) GUARANTEED TO THE EXTENT SET FORTH HEREIN BY USX CORPORATION ------------------ The 8 3/4% Cumulative Monthly Income Preferred Shares, Series A (the "Series A Preferred Shares"), offered hereby are being issued by USX Capital LLC, a limited life company organized under the laws of the Turks and Caicos Islands (the "Company"). The Company is a wholly owned subsidiary of USX Corporation, a Delaware corporation ("USX"). The payment of dividends, if and to the extent declared out of moneys held by the Company and legally available therefor, and payments on liquidation or redemption with respect to the Series A Preferred Shares are guaranteed by USX to the extent described in the accompanying Prospectus. The Series A Preferred Shares will entitle holders to receive cumulative preferential cash dividends, at an annual rate of 8 3/4% of the liquidation preference of $25 per share, accruing from the date of original issuance and payable, in United States dollars, monthly in arrears on the last day of each calendar month of each year, commencing March 31, 1994. The Series A Preferred Shares are redeemable, at the option of the Company (with USX's consent), in whole or in part, from time to time, on or after March 31, 1999, at $25 per share plus accumulated and unpaid dividends (whether or not declared) (the "Redemption Price") to the date fixed for redemption (the "Redemption Date"), and will be redeemed at such price from the proceeds of any repayment of the loan of the proceeds hereof to USX. In addition, if at any time the Company or USX is or would be required to pay certain additional amounts or to withhold or deduct certain amounts, the Series A Preferred Shares are redeemable at the Redemption Price at the option of the Company with USX's consent, from time to time. See "Description of Preferred Shares--Redemption" and "Description of the Guarantee--Additional Amounts" in the accompanying Prospectus. In the event of the liquidation of the Company, holders of Series A Preferred Shares will be entitled to receive for each Series A Preferred Share a liquidation preference of $25 plus accumulated and unpaid dividends to the date of payment, subject to certain limitations. See "Certain Terms of the Series A Preferred Shares--Liquidation Preference" herein and "Description of Preferred Shares--Liquidation Distribution" in the accompanying Prospectus. For a description of the various contractual backup undertakings of USX relating to the Series A Preferred Shares, see "Description of Preferred Shares--Miscellaneous", "Description of the Guarantee" and "Description of the Loans" in the accompanying Prospectus. The Series A Preferred Shares have been approved for listing on the New York Stock Exchange, subject to official notice of issuance, under the symbol XLC Pr. ------------------ THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES AND EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION NOR HAS THE SECURITIES AND EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION PASSED UPON THE ACCURACY OR ADEQUACY OF THIS PROSPECTUS SUPPLEMENT OR THE PROSPECTUS TO WHICH IT RELATES. ANY REPRESENTATION TO THE CONTRARY IS A CRIMINAL OFFENSE. ------------------
INITIAL PUBLIC UNDERWRITING PROCEEDS TO THE OFFERING PRICE(1) COMMISSION(2) COMPANY(1)(3)(4) ------------------ ------------- ----------------- Per Series A Preferred Share................................... $25.00 (3) $25.00 Total(4)....................................................... $250,000,000 (3) $250,000,000
- --------- (1) Plus accrued dividends, if any, from the date of original issuance. (2) USX and the Company have agreed to indemnify the several Underwriters against certain liabilities, including liabilities under the Securities Act of 1933, as amended. See "Underwriting" herein. (3) In view of the fact that the proceeds of the sale of the Series A Preferred Shares will be loaned to USX, under the Underwriting Agreement USX has agreed to pay to the Underwriters as compensation ("Underwriters' Compensation") for their services $.7875 per Series A Preferred Share (or $7,875,000 in the aggregate); provided that such compensation will be $.50 per Series A Preferred Share sold to certain institutions. Therefore, to the extent that Series A Preferred Shares are sold to such institutions, the actual amount of Underwriters' Compensation will be less than the amount specified in the preceding sentence. See "Underwriting" herein. (4) Expenses of the offering, which are payable by USX, are estimated to be $500,000. ------------------ The Series A Preferred Shares offered hereby are offered by the several Underwriters, as specified herein, subject to receipt and acceptance by them and subject to their right to reject any order in whole or in part. It is expected that delivery of certificates for the Series A Preferred Shares will be made only in book-entry form through the facilities of The Depository Trust Company on or about March 3, 1994. - --------- * An application has been filed by Goldman, Sachs & Co. with the United States Patent and Trademark Office for the registration of the MIPS servicemark. GOLDMAN, SACHS & CO. BEAR, STEARNS & CO. INC. A.G. EDWARDS & SONS, INC. KIDDER, PEABODY & CO. INCORPORATED LEHMAN BROTHERS MORGAN STANLEY & CO. INCORPORATED PAINEWEBBER INCORPORATED PRUDENTIAL SECURITIES INCORPORATED SALOMON BROTHERS INC SMITH BARNEY SHEARSON INC. ------------------ The date of this Prospectus Supplement is February 24, 1994. 2 IN CONNECTION WITH THIS OFFERING, THE UNDERWRITERS MAY OVER-ALLOT OR EFFECT TRANSACTIONS WHICH STABILIZE OR MAINTAIN THE MARKET PRICE OF THE SERIES A PREFERRED SHARES OFFERED HEREBY AT LEVELS ABOVE THOSE WHICH MIGHT OTHERWISE PREVAIL IN THE OPEN MARKET. SUCH TRANSACTIONS MAY BE EFFECTED ON THE NEW YORK STOCK EXCHANGE, IN THE OVER-THE-COUNTER MARKET OR OTHERWISE. SUCH STABILIZING, IF COMMENCED, MAY BE DISCONTINUED AT ANY TIME. ------------------ USX CORPORATION The following discussion is a brief description of USX Corporation ("USX") and is qualified in its entirety by reference to the documents incorporated by reference herein. See "Incorporation of Certain Documents by Reference" in the accompanying Prospectus. Readers of this Prospectus Supplement are encouraged to refer to such incorporated documents for a more complete description of USX. USX is a diversified company engaged in the energy business through its Marathon Group, in the steel business through its U.S. Steel Group and in the gas gathering and processing business through its Delhi Group. - The Marathon Group includes the operations of Marathon Oil Company, a wholly owned subsidiary of USX ("Marathon"), which is engaged in worldwide exploration, production, transportation and marketing of crude oil and natural gas; and domestic refining, marketing and transportation of petroleum products. Marathon Group sales (excluding sales from operations now included in the Delhi Group) as a percentage of total USX consolidated sales were 66% in 1993, 69% in 1992 and 72% in 1991. - The U.S. Steel Group includes U.S. Steel, one of the largest integrated steel producers in the United States, which is primarily engaged in the production and sale of a wide range of steel mill products, coke and taconite pellets. The U.S. Steel Group also includes the management of mineral resources, domestic coal mining, engineering and consulting services and technology licensing. Other businesses that are part of the U.S. Steel Group include real estate development and management, fencing products, leasing and financing activities and a majority interest in a titanium metal products company. U.S. Steel Group sales as a percentage of total USX consolidated sales were 31% in 1993, 28% in 1992 and 26% in 1991. - The Delhi Group includes Delhi Gas Pipeline Corporation and certain related companies which are engaged in the purchasing, gathering, processing, transporting and marketing of natural gas. Prior to creation of the Delhi Group on October 2, 1992, these businesses were included in the Marathon Group. Sales from the businesses included in the Delhi Group as a percentage of total USX consolidated sales were 3% in each of 1993 and 1992 and 2% in 1991. USX has three classes of common stock: USX-Marathon Group Common Stock ("Marathon Stock"), USX-U.S. Steel Group Common Stock ("Steel Stock") and USX-Delhi Group Common Stock ("Delhi Stock"). Each class of common stock is intended to provide the stockholders of such class with a separate equity security reflecting the performance of the related group. A portion of USX's corporate assets and liabilities are attributed to each of the Marathon Group, the U.S. Steel Group and the Delhi Group. Although the financial statements of the Marathon Group, the U.S. Steel Group and the Delhi Group separately report the assets, liabilities (including contingent liabilities) and stockholders' equity of USX attributed to each such group, such attribution does not affect legal title to such assets or responsibility for such liabilities. Holders of Marathon Stock, Steel Stock and Delhi Stock are stockholders of USX and continue to be subject to all of the risks associated with an investment in USX and all of its businesses and liabilities. The Guarantee (as defined in the accompanying Prospectus) will be an obligation of USX and not of any segment, group or subsidiary of USX. S-2 3 FINANCIAL HIGHLIGHTS The following is a three-year summary of financial highlights for the groups.
OPERATING INCOME ASSETS SALES (LOSS)(A) (AT YEAR-END) ------- ---------- ------------- (MILLIONS) Marathon Group (b) 1993................................................ $11,962 $ 169 $10,806 1992................................................ 12,782 304 11,141 1991................................................ 13,975 358 11,644 U.S. Steel Group 1993................................................ 5,612 (149) 6,616 1992................................................ 4,919 (241) 6,251 1991................................................ 4,864 (617) 5,627 Delhi Group (c) 1993................................................ 535 36 580 1992................................................ 458 33 565 1991................................................ 423 31 584 Eliminations 1993................................................ (45) -- (628) 1992................................................ (346) (26) (705) 1991................................................ (437) (31) (816) Total USX Corporation 1993................................................ $18,064 $ 56 $17,374 1992................................................ 17,813 70 17,252 1991................................................ 18,825 (259) 17,039
- --------- (a) Operating income (loss) included the following: a $342 million charge related to the Bessemer and Lake Erie Railroad ("B&LE") litigation for the U.S. Steel Group in 1993; restructuring charges of $42 million, $10 million and $402 million for the U.S. Steel Group in 1993, 1992, and 1991, respectively; restructuring charges of $115 million and $24 million for the Marathon Group in 1992 and 1991, respectively; and inventory market valuation charges (credits) for the Marathon Group of $241 million, $(62) million and $260 million in 1993, 1992 and 1991, respectively. (b) Includes sales and operating income for the businesses comprising the Delhi Group for periods prior to October 2, 1992, and assets related to the businesses comprising the Delhi Group for year-end 1991. (c) Includes historic sales, operating income and assets for the businesses included in the Delhi Group which, prior to October 2, 1992, were included in the Marathon Group. USX CAPITAL LLC USX Capital LLC, a wholly owned subsidiary of USX, is a limited life company organized in December 1993 under the laws of the Turks and Caicos Islands. The Company's registered offices are located at MacLaw House, P.O. Box 103, Duke Street, Grand Turk, Turks and Caicos Islands, British West Indies, telephone: (809) 946-2476. The principal executive offices of the manager of the Company, USX Capital Management Company (the "Manager"), are located at 5555 San Felipe Road, Houston, Texas 77056, telephone (713) 629-6600. USX will own directly or indirectly all of the common shares of the Company, which shares are nontransferable. The Company exists solely for the purpose of issuing preferred and common shares and lending the net proceeds thereof to USX. S-3 4 CERTAIN INVESTMENT CONSIDERATIONS Prospective purchasers of Series A Preferred Shares should carefully review the information contained elsewhere in this Prospectus Supplement and in the Prospectus and should particularly consider the following matters: USX's obligations under the Guarantee are subordinate and junior in right of payment to all other liabilities of USX and its obligations under the Loan Agreement are subordinate and junior in right of payment to all Senior Indebtedness of USX. See "Description of the Guarantee--Status of the Guarantee" and "Description of the Loans--Subordination" in the Prospectus. The Company is a newly formed, limited life subsidiary of USX organized under the laws of the Turks and Caicos Islands with no physical assets located in the United States. As a result, it may not be possible for purchasers of Series A Preferred Shares to effect service of process upon the Company within the United States or to enforce civil judgments against the Company in United States courts based upon federal securities laws of the United States. In addition, there is doubt as to the enforceability of actions based upon the federal securities laws of the United States in the Turks and Caicos Islands courts. USX has the right under the Loan Agreement to extend interest payment periods for up to 18 months, and, as a consequence, monthly dividend payments on the Series A Preferred Shares can be deferred (but dividends will continue to accumulate) by the Company during any such extended interest payment period. In the event that USX exercises this right, USX may not declare dividends on any share of its preferred or common stock, and therefore, the extension of a payment period is, in the view of the Company and USX, remote. See "Description of the Loans--Interest" in the Prospectus. Should an extended interest payment period occur, the Company will continue to accrue income for U.S. federal income tax purposes which will be allocated, but not distributed, to record holders of Series A Preferred Shares. As a result, such holders must include such interest in gross income for U.S. federal income tax purposes in advance of the receipt of cash, and any such holders who dispose of Series A Preferred Shares prior to the record date for payment of dividends following such period must also include such interest in gross income but will not receive cash related thereto. See "Taxation--United States--Potential Extension of Interest Payment Period" in the Prospectus. S-4 5 USE OF PROCEEDS Based on the offering price of $25.00 per share, the proceeds to the Company from the offering will be $250,000,000. The proceeds from the sale of the Series A Preferred Shares will be loaned to USX to be used for general corporate purposes, including the refunding of outstanding indebtedness and other financial obligations. In view of this loan, USX has agreed under the Underwriting Agreement to pay Underwriters' Compensation to the Underwriters as well as the expenses of the offering, as set forth in Notes (3) and (4), respectively, on the cover page of this Prospectus Supplement. CAPITALIZATION The following table sets forth the total consolidated capitalization of USX at December 31, 1993 and as adjusted to give effect to the sale of the Series A Preferred Shares offered hereby and the application of the proceeds therefrom as described under "Use of Proceeds" herein. The table should be read in conjunction with USX's consolidated financial statements and notes thereto and other financial data incorporated herein by reference. See "Incorporation of Certain Documents by Reference" in the accompanying Prospectus.
DECEMBER 31, 1993 --------------------- ACTUAL AS ADJUSTED ------ ----------- (IN MILLIONS) SHORT-TERM OBLIGATIONS (including notes payable and current maturities of long-term debt)............................... $ 36 $ 36 LONG-TERM DEBT DUE AFTER ONE YEAR(A).......................... 5,888 5,888 MINORITY INTEREST............................................. 5 5 PREFERRED STOCK OF CONSOLIDATED SUBSIDIARY.................... -- 250 STOCKHOLDERS' EQUITY(B)....................................... 3,864 3,864 ------ ----------- TOTAL CAPITALIZATION..................................... $9,793 $10,043 ------ ----------- ------ -----------
- --------- (a) At December 31, 1993, $699 million of Marathon 9 1/2% Guaranteed Notes due March 1, 1994 was included in long-term debt of USX since unused long-term credit agreements of $1,500 million were available for refinancing if needed. In February 1994, USX sold $300 million principal amount of 7.20% Notes Due 2004 and $150 million principal amount of medium-term LIBOR-based Floating Rate Notes due 1996. (b) In February 1994, USX sold 5,000,000 shares of USX-U.S. Steel Group Common Stock for net proceeds of $201 million. S-5 6 USX CORPORATION SELECTED CONSOLIDATED FINANCIAL INFORMATION The following selected consolidated financial information has been derived from the consolidated financial statements of USX for each of the five years in the period ended December 31, 1993. The information set forth below should be read in connection with the USX consolidated financial statements and notes thereto and accompanying "Management's Discussion and Analysis" contained in the USX Form 8-K dated February 14, 1994, incorporated herein by reference.
YEAR ENDED DECEMBER 31, --------------------------------------------------- 1993 1992 1991 1990 1989 ------- ------- ------- ------- ------- (DOLLARS IN MILLIONS) STATEMENT OF OPERATIONS DATA: Sales............................................ $18,064 $17,813 $18,825 $20,659 $18,717 Operating income (loss).......................... 56 70 (259) 1,556 1,570 Operating costs include: Depreciation, depletion and amortization..... 1,077 1,091 1,128 1,304 1,336 Inventory market valuation charges (credits)................................. 241 (62) 260 (140) (145) Restructuring charges........................ 42 125 426 -- -- B&LE litigation charge....................... 342 -- -- -- -- Other income (loss).............................. 257 (2) 39 37 406 Other income (loss) includes: Gain on disposal of assets................... 253 24 30 7 370 Total income (loss) before income taxes and cumulative effect of changes in accounting principles..................................... (239) (189) (691) 1,216 1,358 Total income (loss) before cumulative effect of changes in accounting principles............... (167) (160) (578) 818 965 Net income (loss)................................ $ (259) $(1,826) $ (578) $ 818 $ 965 BALANCE SHEET DATA (AT YEAR END): Cash and cash equivalents........................ $ 268 $ 57 $ 279 $ 263 $ 786 Working capital.................................. (154) (370) (215) 351 273 Capital expenditures--for year................... 1,151 1,505 1,392 1,391 1,429 Property, plant and equipment--net............... 11,603 11,759 11,593 11,584 11,995 Total assets..................................... 17,374 17,252 17,039 17,268 17,500 Capitalization: Notes payable.................................. $ 1 $ 47 $ 79 $ 138 $ 16 Total long-term debt........................... 5,923 6,302 6,438 5,527 5,875 Total proceeds from production agreements...... -- -- 17 142 327 Minority interest.............................. 5 16 37 67 -- Stockholders' equity........................... 3,864 3,709 4,987 5,869 5,737 ------- ------- ------- ------- ------- Total capitalization.................... $ 9,793 $10,074 $11,558 $11,743 $11,955 ------- ------- ------- ------- ------- ------- ------- ------- ------- -------
S-6 7 CERTAIN TERMS OF THE SERIES A PREFERRED SHARES GENERAL The following summary of certain terms and provisions of the Series A Preferred Shares supplements the description of certain terms and provisions of the Preferred Shares of any series set forth in the accompanying Prospectus under the heading "Description of Preferred Shares," to which description reference is hereby made. Capitalized terms used and not defined in this Prospectus Supplement shall have the meanings ascribed to them in the Prospectus unless otherwise defined in this Prospectus Supplement. The Series A Preferred Shares constitute a series of Preferred Shares of the Company, which Preferred Shares may be issued from time to time in one or more series with such designations, dividend rights, liquidation value per share, redemption provisions, voting rights and other rights, preferences, privileges, limitations and restrictions as are established by the Memorandum of Association of the Company (the "Memorandum"), the Articles of Association of the Company (the "Articles") and resolutions (the "Resolutions") adopted, or to be adopted, by the Manager prior to the closing of the sale of the Series A Preferred Shares offered hereby. The Resolutions will provide that so long as any Series A Preferred Shares are outstanding, the Company may not issue any shares of capital stock ranking, as to participation in the profits or assets of the Company, senior to the Series A Preferred Shares. The summary of certain terms and provisions of the Series A Preferred Shares set forth below does not purport to be complete and is subject to, and qualified in its entirety by reference to, the Memorandum, the Articles and the Resolutions adopted by the Manager establishing the rights, preferences, privileges, limitations and restrictions relating to the Series A Preferred Shares. A copy of the Resolutions will be included as an exhibit to a Current Report on Form 8-K to be filed by USX at or prior to the closing of the sale of the Series A Preferred Shares offered hereby. DIVIDENDS Dividends on the Series A Preferred Shares will be cumulative, will accrue from the date of the original issuance thereof and will be payable in United States dollars monthly in arrears on the last day of each calendar month of each year, commencing March 31, 1994, when, as and if declared by the Company, except as otherwise described under "Description of Preferred Shares--Dividends" in the accompanying Prospectus. The dividend payable on each Series A Preferred Share will be fixed at a rate per annum of 8 3/4% of the stated liquidation preference thereof. LIQUIDATION PREFERENCE The liquidation preference of the Series A Preferred Shares is $25 per share. REDEMPTION The Series A Preferred Shares are redeemable as described in the accompanying Prospectus. Additionally, the Series A Preferred Shares are redeemable, at the option of the Company and subject to the prior consent of USX, in whole or part, from time to time, on or after March 31, 1999, upon not less than 30 nor more than 60 days' notice, at the redemption price of $25 per share, plus accumulated and unpaid dividends (whether or not declared) to the date fixed for redemption (the "Redemption Price"). S-7 8 CERTAIN TERMS OF THE LOANS Pursuant to the Loan Agreement, the Company will agree to make loans to USX in an aggregate principal amount equal to $316,455,696, such amount being the aggregate stated liquidation preference of $25 per Series A Preferred Share issued and sold by the Company and the proceeds from the issuance of the Company's Common Shares and related capital contributions (the "Common Share Payments"). The entire principal amount of the Loans will become due and payable, together with any accrued and unpaid interest thereon, including Additional Interest, if any, on the earliest of the date that is the 50th anniversary of the issuance of the Series A Preferred Shares or the date upon which USX, the Manager or the Company is dissolved, wound-up or liquidated. INTEREST The Loans will bear interest at an annual rate equal to 8 3/4% from the date they are made until maturity. Such interest will be payable on the last day of each calendar month of each year, commencing March 31, 1994. UNDERWRITING Subject to the terms and conditions of the Underwriting Agreement, the Company has agreed to sell to each of the Underwriters named below, and each of the Underwriters, for whom Goldman, Sachs & Co., Bear, Stearns & Co. Inc., A.G. Edwards & Sons, Inc., Kidder, Peabody & Co. Incorporated, Lehman Brothers Inc., Morgan Stanley & Co. Incorporated, PaineWebber Incorporated, Prudential Securities Incorporated, Salomon Brothers Inc and Smith Barney Shearson Inc. are acting as Representatives, has severally agreed to purchase from the Company the respective number of Series A Preferred Shares set forth opposite its name below:
NUMBER OF SERIES A UNDERWRITERS PREFERRED SHARES - ------------------------------------------------------------------------ ---------------- Goldman, Sachs & Co. ................................................... 848,625 Bear, Stearns & Co. Inc. ............................................... 848,625 A.G. Edwards & Sons, Inc. .............................................. 848,625 Kidder, Peabody & Co. Incorporated...................................... 848,625 Lehman Brothers Inc. ................................................... 848,625 Morgan Stanley & Co. Incorporated....................................... 848,625 PaineWebber Incorporated................................................ 848,625 Prudential Securities Incorporated...................................... 848,625 Salomon Brothers Inc ................................................... 848,625 Smith Barney Shearson Inc. ............................................. 848,625 Advest, Inc. ........................................................... 40,000 J.C. Bradford & Co. .................................................... 40,000 Alex. Brown & Sons Incorporated ........................................ 134,750 Commerzbank Capital Markets Corporation ................................ 134,750 Cowen & Company ........................................................ 40,000 Credit Lyonnais Securities (USA) Inc. .................................. 40,000 Dain Bosworth Incorporated ............................................. 40,000 Davenport & Co. of Virginia, Inc. ...................................... 40,000 Dillon, Read & Co. Inc. ................................................ 134,750 Fahnestock & Co. Inc. .................................................. 40,000 First of Michigan Corporation .......................................... 40,000
S-8 9
NUMBER OF SERIES A UNDERWRITERS PREFERRED SHARES - ------------------------------------------------------------------------ ---------------- Hamilton Investments, Inc. ............................................. 40,000 Interstate/Johnson Lane Corporation .................................... 40,000 Janney Montgomery Scott Inc. ........................................... 40,000 Kemper Securities, Inc. ................................................ 134,750 Legg Mason Wood Walker Incorporated .................................... 40,000 McDonald & Company Securities, Inc. .................................... 40,000 Montgomery Securities .................................................. 40,000 Morgan Keegan & Company, Inc. .......................................... 40,000 Oppenheimer & Co., Inc. ................................................ 134,750 Parker/Hunter Incorporated ............................................. 40,000 Piper Jaffray Inc. ..................................................... 40,000 Pryor, McClendon, Counts & Co., Inc. ................................... 40,000 Rauscher Pierce Refsnes, Inc. .......................................... 40,000 Raymond James & Associates, Inc. ....................................... 40,000 Wheat, First Securities, Inc. .......................................... 40,000 ---------------- Total.............................................................. 10,000,000 ---------------- ----------------
Under the terms and conditions of the Underwriting Agreement, the Underwriters are committed to take and pay for all such Series A Preferred Shares offered hereby, if any are taken. The Underwriters propose to offer the Series A Preferred Shares in part directly to the public at the initial public offering price set forth on the cover page of this Prospectus Supplement, and in part to certain securities dealers at such price less a concession of $.50 per Series A Preferred Share ($.30 per Series A Preferred Share sold to certain institutions). The Underwriters may allow, and such dealers may reallow, a concession not in excess of $.25 per Series A Preferred Share to certain brokers and dealers. After the Series A Preferred Shares are released for sale to the public, the offering price and other selling terms may from time to time be varied by the Representatives. In view of the fact that the proceeds from the sale of the Series A Preferred Shares will be loaned to USX, under the Underwriting Agreement USX has agreed to pay as compensation for the Underwriters' services, an amount in New York Clearing House (next day) funds of $.7875 per Series A Preferred Share ($.50 per Series A Preferred Share sold to certain institutions) for the accounts of the several Underwriters. Certain of the Underwriters are customers of, or engage in transactions with, and from time to time have performed services for, USX and its subsidiaries and associated companies in the ordinary course of business. Prior to this offering, there has been no public market for the Series A Preferred Shares. In order to meet one of the requirements for listing the Series A Preferred Shares on the New York Stock Exchange, the Underwriters will undertake to sell lots of 100 or more Series A Preferred Shares to a minimum of 400 beneficial holders. The Company and USX have agreed to indemnify the Underwriters against certain liabilities, including liabilities under the United States Securities Act of 1933, as amended. S-9 10 VALIDITY OF SECURITIES The validity of the Series A Preferred Shares is being passed upon by Misick and Stanbrook, Turks and Caicos Islands counsel to the Company. The validity of the Backup Undertakings relating to the Series A Preferred Shares, consisting of the Guarantee, the Loan Agreement, the Expense Agreement and the Keep Well Agreement, will be passed upon on behalf of the Company and USX by Dan D. Sandman, General Counsel of USX. The validity of such Backup Undertakings of USX relating to the Series A Preferred Shares will be passed upon on behalf of the Underwriters by Sullivan & Cromwell, United States counsel to the Underwriters. As to all matters of Turks and Caicos Islands law, Mr. Sandman will rely on the opinion of Misick and Stanbrook and as to all matters of New York law, he will rely on the opinion of Sullivan & Cromwell. S-10 11 USX CAPITAL LLC CUMULATIVE MONTHLY INCOME PREFERRED SHARES ("MIPS*") GUARANTEED TO THE EXTENT SET FORTH HEREIN BY USX CORPORATION ------------------ USX Capital LLC (the "Company"), a limited life company organized under the laws of the Turks and Caicos Islands, may offer from time to time, in one or more series, its authorized but unissued shares of Cumulative Monthly Income Preferred Shares (the "MIPS*" or "Preferred Shares"). The Company is a wholly owned subsidiary of USX Corporation ("USX"), a Delaware corporation. The payment of dividends, if and to the extent declared out of moneys held by the Company and legally available therefor, and payments on liquidation or redemption with respect to the Preferred Shares are guaranteed (the "Guarantee") by USX to the extent set forth herein. No portion of the dividends received by a holder of the Preferred Shares will be eligible for the dividends received deduction for federal income tax purposes. The Guarantee will rank subordinate and junior in right of payment to all other liabilities of USX and senior to the most senior preferred or preference stock issued by USX. See "USX Capital LLC", "Description of Preferred Shares--Miscellaneous," "Description of the Guarantee" and "Description of the Loans" for a description of the various contractual backup obligations of USX Corporation relating to the Preferred Shares. The total number of Preferred Shares of all series to be issued under the registration statement of which this Prospectus forms a part will not exceed 10,000,000. The terms of the Preferred Shares of a particular series will be determined at the time of sale. The specific designation, liquidation value per share, initial public offering price, dividend rate (or method of calculation thereof), dates on which dividends will be payable, voting rights, any redemption provisions and the other rights, preferences, privileges, limitations and restrictions relating to the Preferred Shares of the particular series in respect of which this Prospectus is being delivered will be set forth in the Prospectus Supplement pertaining to such series (the "Prospectus Supplement"). The Preferred Shares may be sold for public offering to or through underwriters, including Goldman, Sachs & Co., or dealers or may be sold through agents designated from time to time or directly by the Company. See "Plan of Distribution" herein. The names of any such underwriters, dealers or agents involved in the sale of the Preferred Shares of the particular series in respect of which this Prospectus is being delivered, the number of Preferred Shares to be purchased by any such underwriters and any applicable commissions or discounts will be set forth in the Prospectus Supplement. The net proceeds to the Company will also be set forth in the Prospectus Supplement. ------------------ THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES AND EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION NOR HAS THE SECURITIES AND EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION PASSED UPON THE ACCURACY OR ADEQUACY OF THIS PROSPECTUS. ANY REPRESENTATION TO THE CONTRARY IS A CRIMINAL OFFENSE. ------------------ No person has been authorized to give any information or to make any representations, other than those contained herein or incorporated by reference in this Prospectus, in connection with the offer contained in this Prospectus, and, if given or made, such information or representations must not be relied upon. Neither the delivery of this Prospectus nor any sale hereunder shall under any circumstances create an implication that there has been no change in the affairs of the Company or the Guarantor since the date hereof. This Prospectus does not constitute an offer to sell or a solicitation of an offer to buy any of the securities offered hereby in any jurisdiction to any person to whom it is unlawful to make such offer in such jurisdiction. This Prospectus may not be used to consummate sales of Preferred Shares unless accompanied by a Prospectus Supplement. - --------- * An application has been filed by Goldman, Sachs & Co. with the United States Patent and Trademark Office for the registration of the MIPS servicemark. GOLDMAN, SACHS & CO. -------------------- The date of this Prospectus is February 22, 1994. 12 TABLE OF CONTENTS
PAGE ----- Available Information ................................................................ 2 Incorporation of Certain Documents by Reference ...................................... 3 USX Corporation ...................................................................... 3 USX Corporation Ratio of Earnings to Combined Fixed Charges and Preferred Stock Dividends ...................................................... 4 USX Capital LLC ...................................................................... 4 Use of Proceeds ...................................................................... 5 Description of Preferred Shares ...................................................... 5 Description of the Guarantee ......................................................... 13 Description of the Loans ............................................................. 15 Taxation ............................................................................. 20 Plan of Distribution ................................................................. 23 Validity of Securities ............................................................... 23 Experts .............................................................................. 24
AVAILABLE INFORMATION USX Corporation ("USX" or the "Guarantor") is subject to the informational requirements of the Securities Exchange Act of 1934, as amended (the "Exchange Act"), and, in accordance therewith, files reports, proxy statements and other information with the Securities and Exchange Commission (the "Commission"). Such reports, proxy statements and other information filed by USX can be inspected and copied at prescribed rates at the Public Reference Room of the Commission at Judiciary Plaza, 450 Fifth Street, N.W., Washington, D.C. 20549, and at the public reference facilities maintained by the Commission at 7 World Trade Center, New York, New York 10048, and Northwestern Atrium Center, 500 West Madison Street, Suite 1400, Chicago, Illinois 60661. Documents filed by USX can also be inspected at the offices of the New York Stock Exchange, Inc. (the "New York Stock Exchange"), the Chicago Stock Exchange and the Pacific Stock Exchange. USX and USX Capital LLC (the "Company") have filed a Registration Statement on Form S-3 (the "Registration Statement") with the Commission pursuant to the Securities Act of 1933, as amended (the "Securities Act"), covering the Preferred Shares. This Prospectus does not contain all the information set forth in the Registration Statement and the exhibits thereto, to which reference is hereby made. No separate financial statements of the Company have been included herein. The Company and USX Corporation do not consider that such financial statements would be material to holders of the Preferred Shares because the Company is a newly organized special purpose entity, has no operating history and no independent operations and is not engaged in, and does not propose to engage in, any activity other than the issuance of the Preferred Shares and its common shares, and the lending of the net proceeds thereof to USX Corporation. See "USX Capital LLC". The Company is a limited life company organized under the laws of the Turks and Caicos Islands and will be managed by USX Capital Management Company (the "Manager"), an indirect wholly owned subsidiary of USX. USX owns, directly or indirectly, all of the Company's common stock, which is nontransferable. All or a substantial portion of the Company's assets will be located outside the United States. The Company has been advised by its Turks and Caicos Islands legal counsel, Misick and Stanbrook, that there is doubt as to the enforceability, in the Turks and Caicos Islands in original actions or in actions for enforcement of judgments of United States courts, of liabilities predicated solely upon the federal securities laws of the United States. 2 13 INCORPORATION OF CERTAIN DOCUMENTS BY REFERENCE The following documents filed by USX with the Commission (file no. 1-5153) are incorporated herein by reference: (a) Annual Report on Form 10-K for the year ended December 31, 1992. (b) Quarterly Reports on Form 10-Q for the quarters ended March 31, June 30, and September 30, 1993. (c) Current Reports on Form 8-K dated January 26, February 11, February 24, May 27, June 11, June 29, and July 27, 1993, January 21, January 24, and February 14, 1994. All reports and other documents filed by USX pursuant to Section 13(a), 13(c), 14 or 15(d) of the Exchange Act subsequent to the date of this Prospectus and prior to the termination of the offering described herein shall be deemed to be incorporated by reference herein. Any statement contained in a document incorporated or deemed to be incorporated by reference herein shall be deemed to be modified or superseded for purposes of this Prospectus and any Prospectus Supplement to the extent that a statement contained herein or in any other subsequently filed document which also is incorporated or deemed to be incorporated by reference herein modifies or supersedes such statement. Any such statement so modified or superseded shall not be deemed, except as so modified or superseded, to constitute a part of this Prospectus or any Prospectus Supplement. USX undertakes to provide without charge to each person to whom a Prospectus or any Prospectus Supplement is delivered, on the written or oral request of such person, a copy of any or all of the information incorporated by reference in this Prospectus or any Prospectus Supplement other than exhibits to such information (unless such exhibits are specifically incorporated by reference into the information that this Prospectus or any Prospectus Supplement incorporates). Requests for such copies should be directed to the Office of the Corporate Secretary, USX Corporation, 600 Grant Street, Pittsburgh, Pennsylvania 15219-4776 (telephone: 412-433-2885). USX CORPORATION USX, a Delaware corporation organized in 1901, is a diversified company engaged in the energy business through its Marathon Group, in the steel business through its U.S. Steel Group and in the gas gathering and processing business through its Delhi Group. USX has three classes of common stock, USX--Marathon Group Common Stock ("Marathon Stock"), USX--U.S. Steel Group Common Stock ("Steel Stock") and USX--Delhi Group Common Stock ("Delhi Stock"). Each class of common stock is intended to provide the stockholders of such class with a separate security reflecting the performance of the related group. The Marathon Group includes the operations of Marathon Oil Company ("Marathon"), a wholly owned subsidiary of USX, which is engaged in worldwide exploration, production, transportation and marketing of crude oil and natural gas; and domestic refining, marketing and transportation of petroleum products. The U.S. Steel Group includes U.S. Steel, one of the largest integrated steel producers in the United States, which is primarily engaged in the production and sale of a wide range of steel mill products, coke and taconite pellets. The U.S. Steel Group also includes the management of mineral resources, domestic coal mining, engineering and consulting services and technology licensing. Other businesses that are part of the U.S. Steel Group include real estate development and management, fencing products, leasing and financing activities, and a majority interest in a titanium metal products company. The Delhi Group includes Delhi Gas Pipeline Corporation and certain related companies which are engaged in the purchasing, gathering, processing, transporting and marketing of natural gas. 3 14 Prior to October 2, 1992, the businesses which are now included in the Delhi Group were included in the Marathon Group and data regarding the Delhi Group for periods prior to that date reflect the combined historical financial data of the businesses comprising the Delhi Group. USX continues to include consolidated financial information in its periodic reports required by the Exchange Act, in its annual shareholder reports and in other financial communications. The consolidated financial statements are supplemented with separate financial statements of the Marathon Group, the U.S. Steel Group and the Delhi Group, together with the related Management's Discussion and Analyses, descriptions of business and other financial and business information to the extent such information is required to be presented in the report being filed. The financial information of the Marathon Group, the U.S. Steel Group and the Delhi Group, taken together, includes all accounts which comprise the corresponding consolidated financial information of USX. For consolidated financial reporting purposes, USX's reportable industry segments correspond with its three groups. The attribution of assets, liabilities (including contingent liabilities) and stockholders' equity among the Marathon Group, the U.S. Steel Group and the Delhi Group for the purpose of preparing their respective financial statements does not affect legal title to such assets and responsibility for such liabilities. Accordingly, USX is responsible for its liabilities (including those pursuant to the Guarantee (as defined under "Description of the Guarantee") and the Loan Agreement (as defined under "Description of the Loans")) without regard to the attribution of shareholders' equity among the three Groups. Marathon Stock stockholders, Steel Stock stockholders and Delhi Stock stockholders are holders of common stock of USX and continue to be subject to all of the risks associated with an investment in USX and all of its businesses and liabilities. Financial impacts arising from any of the Marathon Group, the U.S. Steel Group or the Delhi Group which affect the overall cost of USX's capital could affect the results of operations and financial condition of all groups. Accordingly, the USX consolidated financial information should be read in connection with the Marathon Group, the U.S. Steel Group and the Delhi Group financial information. The executive offices of USX are located at 600 Grant Street, Pittsburgh, PA 15219-4776 (tel: (412) 433-1121). The term "USX" when used herein refers to USX Corporation and its subsidiaries, as required by the context. USX CORPORATION RATIO OF EARNINGS TO COMBINED FIXED CHARGES AND PREFERRED STOCK DIVIDENDS (UNAUDITED)
YEAR ENDED DECEMBER 31 ------------------------------------- 1993 1992 1991 1990 1989 ----- ---- ---- ---- ---- Ratio of earnings to combined fixed charges and preferred stock dividends........................................ (a) (a) (a) 2.69 2.33 ----- ---- ---- ---- ---- ----- ---- ---- ---- ----
- --------- (a) Earnings did not cover combined fixed charges and preferred stock dividends by $325 million for 1993, by $211 million for 1992 and by $696 million for 1991. USX CAPITAL LLC USX Capital LLC, a wholly owned subsidiary of USX, is a limited life company organized in December 1993 under the laws of the Turks and Caicos Islands. The Company's registered offices are located at MacLaw House, P.O. Box 103, Duke Street, Grand Turk, Turks and Caicos Islands, British West Indies, telephone: (809) 946-2476. The principal executive offices of the Manager are located at 5555 San Felipe Road, Houston, Texas 77056, telephone (713) 629-6600. USX will own directly or indirectly all of the common shares of the Company, which shares are nontransferable. 4 15 The Company exists solely for the purpose of issuing preferred and common shares and lending the net proceeds thereof to USX. USE OF PROCEEDS The proceeds from the sale of the Preferred Shares will be loaned to USX to be used for general corporate purposes, including the refunding of outstanding indebtedness and other financial obligations. As of December 31, 1993, USX had long-term debt obligations maturing within one year of $734 million, including $699 million of Marathon 9 1/2% Guaranteed Notes Due March 1, 1994. DESCRIPTION OF PREFERRED SHARES The following is a summary of certain terms and provisions of the Preferred Shares of any series (collectively referred to as the "Preferred Shares"). Certain terms and provisions of the Preferred Shares of a particular series will be summarized in the Prospectus Supplement relating to the Preferred Shares of such series. If so indicated in the Prospectus Supplement, the terms and provisions of the Preferred Shares of a particular series may differ from the terms set forth below. The summaries set forth below and in the applicable Prospectus Supplement address the material terms of the Preferred Shares of any particular series but do not purport to be complete and are subject to, and qualified in their entirety by reference to, the Memorandum of Association of the Company (the "Memorandum"), the Articles of Association of the Company (the "Articles") and the resolutions adopted, or to be adopted, as the case may be, by the Manager establishing the rights, preferences, privileges, limitations and restrictions relating to the Preferred Shares of any series or of a particular series. Copies of the Memorandum and the Articles have been filed as exhibits to the Registration Statement of which this Prospectus forms a part. GENERAL The Company's authorized capital is US $10,005,000, divided into 5,000 ordinary shares of US $1.00 each (the "Common Shares"), of which 4,998 are issued and outstanding and owned directly or indirectly by USX, and 10,000,000 Preferred Shares of US $1.00 each, which may be issued in one or more series or classes, with such dividend rights, liquidation preference per share, redemption provisions, voting rights and other rights, preferences, privileges, limitations and restrictions as shall be set forth in the Articles and the resolutions providing for the issuance thereof to be adopted by the Manager. The Manager by resolution may increase the number of authorized Preferred Shares and establish other classes of shares having such preferred, deferred or other special rights or such restrictions, whether in regard to dividends, voting, return of capital or otherwise, as the Manager may determine. All of the Preferred Shares, to be issued in one or more series or classes, will rank pari passu with each other with respect to participation in profits and assets. The resolutions providing for the issuance of Preferred Shares of any particular series will not permit the issuance of any preference shares ranking, as to participation in the profits or the assets of the Company, senior to the Preferred Shares of any particular series. The initial offering price of the Preferred Shares of any particular series will be reasonably related to the liquidation preference thereof. The Preferred Shares of any series will be issued in registered form only without dividend coupons. Registration of, and registration of transfers of, the Preferred Shares of any series will be by book-entry only. The Preferred Shares of any series will have the dividend rights, rights upon liquidation, redemption provisions and voting rights set forth below, unless otherwise provided in the Prospectus Supplement relating to the Preferred Shares of a particular series. Reference is made to the Prospectus Supplement relating to the Preferred Shares of a particular series for specific terms including (i) the designation of the Preferred Shares of such series, (ii) the liquidation value, 5 16 (iii) the price at which the Preferred Shares of such series will be issued, (iv) the dividend rate (or method of calculation thereof) and the dates on which dividends will be payable, (v) the voting rights of the Preferred Shares of such series, (vi) any redemption provisions, (vii) any other rights, preferences, privileges, limitations and restrictions relating to the Preferred Shares of such series and (viii) the terms upon which the proceeds from the sale of the Preferred Shares of such series will be loaned to USX. DIVIDENDS Dividends on the Preferred Shares will be cumulative. Cumulative dividends on the Preferred Shares of a series will accrue from the date of original issue thereof and will be payable in United States dollars monthly in arrears on the last day of each calendar month of each year, commencing on the dates specified in the Prospectus Supplement relating to such series. The dividend payable on Preferred Shares of a particular series will be fixed at the rate per annum specified in the Prospectus Supplement relating to such series. The amount of dividends payable for any period will be computed on the basis of twelve 30-day months and a 360-day year and, for any period shorter than a full monthly dividend period, will be computed on the basis of the actual number of days elapsed in such period. Payment of dividends is limited in relation to the amount of funds held by the Company and legally available therefor. See "Description of the Loans--Interest" and "Description of the Guarantee--General" below. Dividends on the Preferred Shares of any series must be declared by the Manager of the Company in any calendar year or portion thereof to the extent that the Manager reasonably anticipates that at the time of payment the Company will have, and must be paid by the Company to the extent that at the time of proposed payment it has, (x) funds legally available for the payment of such dividends and (y) cash on hand sufficient to permit such payments. It is anticipated that the Company's earnings will be limited to payments under the Loans of the proceeds from the issuance and sale of the Preferred Shares and the Common Shares. See "Description of the Loans". Dividends declared on the Preferred Shares of any series will be payable to the record holders thereof as they appear on the register for the Preferred Shares of such series on the relevant record dates which will be, unless otherwise specified in the Prospectus Supplement relating to each such series, one Business Day (as hereinafter defined) prior to the relevant payment dates. Subject to any applicable fiscal or other laws and regulations, each such payment will be made as described under "Book-Entry-Only Issuance; The Depository Trust Company" below. In the event that any date on which dividends are payable on the Preferred Shares of any series is not a Business Day, then payment of the dividend payable on such date will be made on the next succeeding day which is a Business Day (and without any interest or other payment in respect of any such delay) except that, if such Business Day is in the next succeeding calendar year, such payment shall be made on the immediately preceding Business Day, in each case with the same force and effect as if made on such date. A "Business Day" shall mean any day other than a day on which banking institutions in The City of New York are authorized or required by law to close. CERTAIN RESTRICTIONS ON THE COMPANY If dividends have not been paid in full on the Preferred Shares of a particular series, the Company shall not: (i) pay, or declare and set aside for payment, any dividends on the Preferred Shares of any other series or any other preferred or preference stock of the Company ranking pari passu with the Preferred Shares of such series as regards participation in profits of the Company ("Company Dividend Parity Shares"), unless the amount of any dividends declared on any Company Dividend Parity Shares is paid on the Company Dividend Parity Shares and the Preferred Shares of such series on a pro rata basis on the date such dividends are paid on such Company Dividend Parity Shares, so that: 6 17 (x) (A) the aggregate amount of dividends paid on the Preferred Shares of such series bears to (B) the aggregate amount of dividends paid on such Company Dividend Parity Shares the same ratio as (y) (A) the aggregate of all accumulated arrears of unpaid dividends in respect of the Preferred Shares of such series bears to (B) the aggregate of all accumulated arrears of unpaid dividends in respect of such Company Dividend Parity Shares; (ii) pay, or declare and set aside for payment, any dividends on any shares of the Company ranking junior to the Preferred Shares of such series as to dividends ("Company Dividend Junior Shares"); or (iii) redeem, purchase or otherwise acquire any Company Dividend Parity Shares or Company Dividend Junior Shares; until, in each case, such time as all accumulated arrears of unpaid dividends on the Preferred Shares of such series shall have been paid in full for all dividend periods terminating on or prior to, in the case of clauses (i) and (ii), such payment, and in the case of clause (iii), the date of such redemption, purchase or acquisition. As of the date of this Prospectus, there are no Company Dividend Parity Shares outstanding. REDEMPTION The Preferred Shares of a series will be redeemable at the option of the Company and subject to the prior consent of USX, in whole or in part from time to time, on or after the date specified in the Prospectus Supplement relating to such series, at the stated liquidation preference per share for such series, plus accumulated and unpaid dividends (whether or not declared) (the "Redemption Price") to the date fixed for redemption (the "Redemption Date"). In the event that fewer than all of the outstanding Preferred Shares of a particular series are to be redeemed, except as described below, the Preferred Shares of such series to be redeemed may be selected as described under "Book-Entry-Only Issuance; The Depository Trust Company" below. If at any time USX repays the Loans when due or prepays the Loans as described under "Description of the Loans--Optional Prepayment", the proceeds from such repayment of principal on the Loans to USX will be applied, subject to the provisions in clause (iii) under "Certain Restrictions on the Company" above, to redeem the Preferred Shares of such series at the Redemption Price; provided that any such amounts may be reloaned to USX and not used for such redemption, if at the time of each such loan, and as determined in the judgment of the Manager, and its financial advisor, (a) USX is not in bankruptcy, (b) USX is not in default on any loan pertaining to Preferred Shares of any series, (c) USX has made timely payments on the repaid loan for the immediately preceding 18 months, (d) the Company is not in arrears on payments of dividends on the Preferred Shares of such series, (e) USX is expected to be able to make timely payment of principal and interest on such loan, (f) such loan is being made on terms, and under circumstances, that are consistent with those which a lender would require for a loan to an unrelated party, (g) such loan is being made at a rate sufficient to provide payments equal to or greater than the amount of dividend payments required under the Preferred Shares of such series, (h) the senior unsecured long-term debt of USX is rated BBB- or better by Standard & Poor's Corporation or Baa3 or better by Moody's Investors Service, Inc. or the equivalent by any other nationally recognized statistical rating organization, (i) such loan is being made for a term that is consistent with market circumstances and USX's financial condition, and (j) the final maturity of such loan is not later than the 100th anniversary of the issuance of the Preferred Shares of the first series issued. If at any time after the issuance of Preferred Shares of a series, the Company is or would be required to pay any Additional Amounts (as defined herein) with respect to the Preferred Shares of 7 18 such series or USX is or would be required to withhold or deduct certain amounts as described under "Description of the Guarantee--Additional Amounts" with respect to the Preferred Shares of such series, then, subject to the prior consent of USX, the Company may, at its option but subject to the provisions of clause (iii) under "Certain Restrictions on the Company" above, upon not less than 30 nor more than 60 days' notice to the holders of the Preferred Shares of such series, redeem the Preferred Shares of such series in whole, or if such requirement relates to only certain of the Preferred Shares of such series, only the Preferred Shares of such series subject to the requirement may be redeemed at the Redemption Price for such series, provided that, in the case of such a redemption of Preferred Shares in part, the Company may (i) cause the global certificate representing all of the Preferred Shares of such series to be withdrawn from The Depository Trust Company or its successor securities depository (see "Book-Entry-Only Issuance; The Depository Trust Company"), (ii) issue share certificates in definitive form representing Preferred Shares of such series and (iii) redeem the Preferred Shares subject to such requirement to withhold or deduct Additional Amounts; and provided further that, if a partial redemption would result in a delisting of the Preferred Shares of such series from any national securities exchange on which they are then listed, the Company may only redeem the Preferred Shares of such series in whole. The Company may not redeem any Preferred Shares of any series unless all accumulated arrears of unpaid dividends have been paid on all Preferred Shares of all series for all monthly dividend periods terminating on or prior to the date of redemption. If the Company gives a notice of redemption in respect of Preferred Shares of a particular series, then, by 12:00 noon, New York time, on the Redemption Date, the Company will irrevocably deposit with The Depository Trust Company funds sufficient to pay the applicable Redemption Price, and will give The Depository Trust Company irrevocable instructions and authority to pay the Redemption Price to the holders thereof. If notice of redemption shall have been given and funds deposited as required, then upon the date of such deposit, all rights of holders of such Preferred Shares of a series so called for redemption will cease, except the right of the holders of such shares to receive the Redemption Price, but without interest. In the event that any date on which any payment in respect of the redemption of Preferred Shares of any series is not a Business Day, then payment of the Redemption Price payable on such date will be made on the next succeeding day which is a Business Day (and without any interest or other payment in respect of any such delay), except that, if such Business Day falls in the next calendar year, such payment will be made on the immediately preceding Business Day. In the event that payment of the Redemption Price in respect of Preferred Shares of any series is improperly withheld or refused and not paid either by the Company or by USX pursuant to the Guarantee, dividends on such shares will continue to accrue, at the then applicable rate, from the original Redemption Date to the date that the Redemption Price is actually paid, in which case the actual payment date will be the date fixed for redemption for purposes of calculating the Redemption Price. Subject to the foregoing and applicable law (including, without limitation, U.S. federal securities laws) USX or its subsidiaries may at any time and from time to time purchase outstanding Preferred Shares of any series by tender, in the open market or by private agreement. LIQUIDATION DISTRIBUTION In the event of any voluntary or involuntary liquidation, dissolution or winding up of the Company, the holders of Preferred Shares of each series at the time outstanding will be entitled to receive out of the assets of the Company legally available for distribution to shareholders, before any distribution of assets is made to holders of Common Shares of the Company or any other class of shares of the Company ranking junior to the Preferred Shares of such series as regards participation in assets of the Company, but together with the holders of outstanding Preferred Shares of every other series and the holders of every other series of preferred or preference stock of the Company outstanding, if any, ranking pari passu with the Preferred Shares of such series as regards participation in the assets of the Company ("Company Liquidation Parity Shares"), an 8 19 amount equal, in the case of the holders of the Preferred Shares of such series, to the aggregate of the stated liquidation preference for Preferred Shares of such series as set forth in the Prospectus Supplement and all accumulated and unpaid dividends (whether or not declared) to the date of payment (the "Liquidation Distribution"). If, upon any such liquidation, the Liquidation Distributions can be paid only in part because the Company has insufficient assets available to pay in full the aggregate Liquidation Distributions and the aggregate maximum liquidation distributions on the Company Liquidation Parity Shares, then the amounts payable directly by the Company on the Preferred Shares of such series and on such Company Liquidation Parity Shares shall be paid on a pro rata basis, so that (i) (x) the aggregate amount paid as the Liquidation Distribution on the Preferred Shares of such series bears to (y) the aggregate amount paid as Liquidation Distributions on the Company Liquidation Parity Shares the same ratio as (ii) (x) the aggregate Liquidation Distribution bears to (y) the aggregate maximum Liquidation Distributions on the Company Liquidation Parity Shares. Pursuant to the Articles, the Company will automatically dissolve and be liquidated (i) when the period fixed for the duration of the Company expires, (ii) if the Manager by resolution requires the Company to be wound up and dissolved, (iii) upon the bankruptcy, resignation, withdrawal, expulsion, termination, cessation or dissolution of the Manager, or (iv) upon the bankruptcy, insolvency or liquidation of USX. VOTING RIGHTS If (i) the Company fails to pay dividends in full on the Preferred Shares of any series for 18 consecutive monthly dividend periods; (ii) an Event of Default (as defined in the Loan Agreement relating to the Loans) occurs and is continuing on the Loans; or (iii) USX is in default on any of its payment or other obligations under the Guarantee (as described under "Description of the Guarantee--Certain Covenants of USX"), then the holders of a majority in liquidation preference of the outstanding Preferred Shares of such series, together with the holders of any other Preferred Shares of the Company having the right to vote for the appointment of a trustee in such event, acting as a single class, will be entitled to appoint and authorize a trustee to enforce the Company's rights under the Loans, against USX and to enforce the obligations undertaken by USX under the Guarantee (as defined below) and declare and pay dividends on the Preferred Shares of all series. For purposes of determining whether the Company has failed to pay dividends in full for 18 consecutive monthly dividend periods, dividends shall be deemed to remain in arrears, notwithstanding any payments in respect thereof, until full cumulative dividends have been or contemporaneously are declared and paid with respect to all monthly dividend periods terminating on or prior to the date of payment of such full cumulative dividends. Not later than 30 days after such right to appoint a trustee arises, the Manager will convene a general meeting for the above purpose. If the Manager fails to convene such meeting within such 30-day period, the holders of 10% in liquidation preference of the outstanding Preferred Shares of such series and such other Preferred Shares will be entitled to convene such meeting. The provisions of the Articles relating to the convening and conduct of the general meetings of shareholders will apply with respect to any such meeting. Any trustee so appointed shall vacate office immediately, subject to the terms of such other Preferred Shares, if the Company (or USX pursuant to the Guarantee) shall have paid in full all accumulated and unpaid dividends on the Preferred Shares of all series or such default or breach by USX, as the case may be, shall have been cured. If any resolution is proposed for adoption by the shareholders of the Company providing for, or the Manager otherwise proposes to effect, (x) any variation or abrogation of the rights, preferences and privileges of the Preferred Shares of any series, whether by way of amendment to the Company's Articles, the Resolutions or otherwise (including, without limitation, the authorization or issuance of any shares of the Company ranking, as to participation in the profits or assets of the 9 20 Company, senior to the Preferred Shares), or (y) the liquidation, dissolution or winding up of the Company, then the holders of outstanding Preferred Shares of all series (and, in the case of a resolution described in clause (x) above which would adversely affect the rights, preferences or privileges of any Company Dividend Parity Shares or any Company Liquidation Parity Shares, such Company Dividend Parity Shares or such Company Liquidation Parity Shares, as the case may be, or, in the case of any resolution described in clause (y) above, all Company Liquidation Parity Shares) will be entitled to vote on such resolution or action of the Manager (but not on any other resolution or action), and such resolution or action shall not be effective except with the approval of the holders of 66 2/3% in liquidation preference of such outstanding shares; provided, however, that no such approval shall be required under clauses (x) and (y) if the liquidation, dissolution or winding up of the Company is proposed or initiated upon the initiation of proceedings, or after proceedings have been initiated, for the liquidation, dissolution or winding up of USX. The rights attached to the Preferred Shares of any series will be deemed not to be varied by the creation or issue of, and no vote will be required for the creation of any further shares of the Company ranking junior to or pari passu with the Preferred Shares of any series with regard to participation in the profits or assets of the Company. Holders of Preferred Shares of any series have no preemptive rights. Any required approval of holders of Preferred Shares may be given at a separate meeting of such holders convened for such purpose, at a general meeting of shareholders of the Company or pursuant to written consent. The Company will cause a notice of any meeting at which holders of the Preferred Shares of a series are entitled to vote, or of any matter upon which action by written consent of such holders is to be taken, to be mailed to each holder of record of Preferred Shares of such series. Each such notice will include a statement setting forth (i) the date of such meeting or the date by which such action is to be taken, (ii) a description of any resolution proposed for adoption at such meeting on which such holders are entitled to vote or of such matter upon which written consent is sought and (iii) instructions for the delivery of proxies or consents. No vote or consent of the holders of the Preferred Shares of any series will be required for the Company to redeem and cancel Preferred Shares of any series in accordance with the Articles and the Resolutions. Notwithstanding that holders of Preferred Shares of any series are entitled to vote or consent under any of the circumstances described above, any of the Preferred Shares of any series that are owned by USX or any entity owned more than 50% by USX, either directly or indirectly, shall not be entitled to vote or consent and shall, for the purposes of such vote or consent, be treated as if they were not outstanding. ADDITIONAL AMOUNTS All payments in respect of the Preferred Shares of all series by the Company will be made without withholding or deduction for or on account of any present or future taxes, duties, assessments or governmental charges of whatever nature imposed or levied upon or as a result of such payment by or on behalf of the Turks and Caicos Islands or any authority therein or thereof having power to tax, unless the withholding or deduction of such taxes, duties, assessments or governmental charges is required by law. In that event, the Company will pay as a dividend such additional amounts as may be necessary in order that the net amounts received by the holders of the Preferred Shares after such withholding or deduction will equal the amount which would have been receivable in respect of such Preferred Shares in the absence of such withholding or deduction ("Additional Amounts"), except that no such Additional Amounts will be payable to a holder of Preferred Shares (or a third party on his behalf) with respect to Preferred Shares: (a) if such holder is liable for such taxes, duties, assessments or governmental charges in respect of such Preferred Shares by reason of such holder's having some connection with the Turks and Caicos Islands other than being a holder of such Preferred Shares; or 10 21 (b) if the Company has notified such holder of the obligation to withhold taxes and requested but not received from such holder a declaration of non-residence or other claim for exemption, and such withholding or deduction would not have been required had such declaration or claim been received. BOOK-ENTRY-ONLY ISSUANCE; THE DEPOSITORY TRUST COMPANY The Depository Trust Company ("DTC") will act as securities depository for the Preferred Shares. The Preferred Shares will be issued only as fully-registered securities registered in the name of Cede & Co. (DTC's nominee). One or more fully-registered global Preferred Share certificates will be issued for each series of Preferred Shares, in the aggregate liquidation preference of such issue, and will be deposited with DTC. DTC is a limited-purpose trust company organized under the New York Banking Law, a "banking organization" within the meaning of the New York Banking Law, a member of the Federal Reserve System, a "clearing corporation" within the meaning of the New York Uniform Commercial Code, and a "clearing agency" registered pursuant to the provisions of Section 17A of the Securities Exchange Act of 1934. DTC holds securities that its participants ("Participants") deposit with DTC. DTC also facilitates the settlement among Participants of securities transactions, such as transfers and pledges, in deposited securities through electronic computerized book-entry changes in Participants' accounts, thereby eliminating the need for physical movement of securities certificates. Direct Participants include securities brokers and dealers, banks, trust companies, clearing corporations, and certain other organizations ("Direct Participants"). DTC is owned by a number of its Direct Participants and by the New York Stock Exchange, Inc., the American Stock Exchange and the National Association of Securities Dealers, Inc. Access to the DTC system is also available to others such as securities brokers and dealers, banks, and trust companies that clear through or maintain a custodial relationship with a Direct Participant, either directly or indirectly ("Indirect Participants"). The Rules applicable to DTC and its Participants are on file with the Securities and Exchange Commission. Purchases of Preferred Shares under the DTC system must be made by or through Direct Participants, which will receive a credit for the Preferred Shares on DTC's records. The ownership interest of each actual purchaser of each Preferred Share ("Beneficial Owner") is in turn recorded on the Direct and Indirect Participants' records. Beneficial Owners will not receive written confirmation from DTC of their purchase, but Beneficial Owners are expected to receive written confirmations providing details of their transactions, as well as periodic statements of their holdings, from the Direct or Indirect Participants through which the Beneficial Owners purchased Preferred Shares. Transfers of ownership interests in the Preferred Shares are to be accomplished by entries made on the books of Participants acting on behalf of Beneficial Owners. Beneficial Owners will not receive certificates representing their ownership interests in Preferred Shares, except in the event that use of the book-entry system for the Preferred Shares is discontinued. To facilitate subsequent transfers, all Preferred Shares deposited by Participants with DTC are registered in the name of Cede & Co. The deposit of Preferred Shares with DTC and their registration in the name of Cede & Co. effect no change in beneficial ownership. DTC has no knowledge of the actual Beneficial Owners of the Preferred Shares; DTC's records reflect only the identity of the Direct Participants to whose accounts such Preferred Shares are credited, which may or may not be the Beneficial Owners. The Participants will remain responsible for keeping account of their holdings on behalf of their customers. Conveyance of notices and other communications by DTC to Direct Participants, by Direct Participants to Indirect Participants, and by Direct Participants and Indirect Participants to Beneficial Owners will be governed by arrangements among them, subject to any statutory or regulatory requirements as may be in effect from time to time. 11 22 Redemption notices shall be sent to Cede & Co. If less than all of the Preferred Shares of any series are being redeemed, DTC's practice is to determine by lot the amount of the interest of each Direct Participant in such series to be redeemed. Although voting with respect to the Preferred Shares is limited, in those cases where a vote is required, neither DTC nor Cede & Co. will consent or vote with respect to Preferred Shares. Under its usual procedures, DTC mails an Omnibus Proxy to the Company as soon as possible after the record date. The Omnibus Proxy assigns Cede & Co.'s consenting or voting rights to those Direct Participants to whose accounts the Preferred Shares are credited on the record date (identified in a listing attached to the Omnibus Proxy). Dividend payments on the Preferred Shares will be made to DTC. DTC's practice is to credit Direct Participants' accounts on the relevant payable date in accordance with their respective holdings shown on DTC's records unless DTC has reason to believe that it will not receive payments on such payable date. Payments by Participants to Beneficial Owners will be governed by standing instructions and customary practices and will be the responsibility of such Participant and not of DTC, the Company or USX, subject to any statutory or regulatory requirements as may be in effect from time to time. Payment of dividends to DTC is the responsibility of the Company, disbursement of such payments to Direct Participants shall be the responsibility of DTC, and disbursement of such payments to the Beneficial Owners shall be the responsibility of Direct and Indirect Participants. DTC may discontinue providing its services as securities depository with respect to the Preferred Shares of any series at any time by giving reasonable notice to the Company. Under such circumstances, in the event that a successor securities depository is not obtained, Preferred Share certificates for such series are required to be printed and delivered. Additionally, in the event that the Company were to redeem only a portion of the Preferred Shares of any series because the Company or USX is or would be required to withhold or deduct Additional Amounts in regard to such Preferred Shares to be redeemed, the Company may cause the global certificate or certificates representing all of the Preferred Shares of such series to be withdrawn from DTC (or its successor securities depository) and may issue share certificates in definitive form representing the Preferred Shares. Thereafter, the Preferred Shares subject to such requirement to withhold or deduct Additional Amounts would be redeemed. The information in this section concerning DTC and DTC's book-entry system has been obtained from sources that the Company believes to be reliable, but the Company takes no responsibility for the accuracy thereof. REGISTRAR, TRANSFER AGENT AND PAYING AGENT Mellon Bank will act as registrar, transfer agent and paying agent for the Preferred Shares. Registration of transfers of Preferred Shares of any series will be effected without charge by or on behalf of the Company, but upon payment (with the giving of such indemnity as the Company or USX may require) in respect of any tax or other governmental charges which may be imposed in relation to it. The Company will not be required to register or cause to be registered the transfer of Preferred Shares of a particular series after such Preferred Shares have been called for redemption. MISCELLANEOUS The Company is not subject to any mandatory redemption or sinking fund provisions with respect to the Preferred Shares of any series. USX and the Company will enter into an agreement (the "Expense Agreement") pursuant to which USX will agree to guarantee the payment of any liabilities incurred by the Company (other than obligations to holders of Preferred Shares, which will be separately guaranteed to the extent 12 23 set forth in the Guarantee; see "Description of the Guarantee"). The Expense Agreement will expressly provide that it is for the benefit of, and is enforceable by, third parties to whom the Company owes such obligations. A copy of the form of Expense Agreement has been filed as an exhibit to the Registration Statement of which this Prospectus forms a part. USX and the Manager will enter into an agreement (the "Keep Well Agreement") pursuant to which USX will agree to cause the Manager to at all times have at least $1.00 more than its cash obligations. The Keep Well Agreement will expressly provide that it is for the benefit of, and is enforceable by, holders of Preferred Shares. A copy of the form of Keep Well Agreement has been filed as an exhibit to the Registration Statement of which this Prospectus forms a part. DESCRIPTION OF THE GUARANTEE Set forth below is condensed information concerning the guarantee (the "Guarantee") which will be executed and delivered by USX for the benefit of the holders from time to time of Preferred Shares. This summary contains all material information concerning the Guarantee but does not purport to be complete. References to provisions of the Guarantee are qualified in their entirety by reference to the text of the Guarantee, a form of which has been filed as an exhibit to the Registration Statement of which this Prospectus forms a part. GENERAL The Guarantor will irrevocably and unconditionally agree, to the extent set forth herein, to pay in full, to the holders of the Preferred Shares of any series, the Guarantee Payments (as defined below) (except to the extent paid by the Company), as and when due, regardless of any defense, right of set-off or counterclaim which the Company may have or assert. The following payments to the extent not paid by the Company (the "Guarantee Payments") will be subject to the Guarantee (without duplication): (i) any accumulated and unpaid dividends which have been theretofore declared on the Preferred Shares of such series out of moneys legally available therefor, (ii) the redemption price (including all accumulated and unpaid dividends) payable out of funds legally available therefor with respect to Preferred Shares of such series called for redemption by the Company, (iii) upon a liquidation of the Company, the lesser of (a) the aggregate of the liquidation preference and all accumulated and unpaid dividends (whether or not declared) to the date of payment and (b) the amount of assets of the Company available for distribution to Preferred Shareholders of such series in liquidation of the Company and (iv) any Additional Amounts payable by the Company in respect of the Preferred Shares of such series. USX's obligation to make a Guarantee Payment may be satisfied by direct payment of the required amounts by USX to the holders of Preferred Shares of any series or by causing the Company to pay such amounts to such holders. CERTAIN COVENANTS OF USX In the Guarantee, USX will covenant that, so long as any Preferred Shares of any series remain outstanding, it shall not declare or pay any dividend on, or redeem, purchase, acquire or make a liquidation payment with respect to, any of USX's capital stock or make any guarantee payments with respect to the foregoing (other than payments under the Guarantee), if at such time USX shall be in default with respect to its payment or other obligations under the Guarantee, the Expense Agreement or the Keep Well Agreement or there shall have occurred any event that, with the giving of notice or the lapse of time or both, would constitute an Event of Default under the Loan Agreement. In the Guarantee, USX will also covenant that, so long as Preferred Shares of any series remain outstanding, it will (i) maintain direct or indirect 100% ownership of the Common Shares and any other shares of the Company other than the Preferred Shares of any series, (ii) cause at least 21% of the total value of the Company and at least 21% of all interests in the capital, income, gain, loss, 13 24 deduction and credit of the Company to be represented by Common Shares, (iii) not voluntarily dissolve, wind-up or liquidate the Company or the Manager, (iv) cause USX Capital Management Company to remain the Manager of the Company and timely perform all of its duties as Manager of the Company (including the duty to declare and pay dividends on the Preferred Shares as described under "Description of Preferred Shares--Dividends"), (v) use reasonable efforts to cause the Company to remain a limited life company and otherwise continue to be treated as a partnership for United States federal income tax purposes, and (vi) to at all times own directly or indirectly all of the capital stock of the Manager. ADDITIONAL AMOUNTS All Guarantee Payments will be made without withholding or deduction for or on account of any present or future taxes, duties, assessments or governmental charges of whatever nature imposed or levied upon or as a result of such payment by or on behalf of the United States, any State thereof or any other jurisdiction through which or from which such payment is made, or any authority therein or thereof having power to tax, unless the withholding or deduction of such taxes, duties, assessments or governmental charges is required by law. In that event, USX will pay such additional amounts as may be necessary in order that the net amounts received by the holders of the Preferred Shares after such withholding or deduction will equal the amount which would have been receivable in respect of the Preferred Shares in the absence of such withholding or deduction (the "Additional Amounts"), except that no such Additional Amounts will be payable to a holder of the Preferred Shares (or a third party on his behalf) with respect to any of the Preferred Shares: (a) if such holder is liable for such taxes, duties, assessments or governmental charges in respect of the Preferred Shares by reason of such holder's having some connection with the United States, any State thereof or any other jurisdiction through which or from which such payment is made, other than being a holder of the Preferred Shares, or (b) if the Company or USX has notified such holder of the obligation to withhold taxes and requested but not received from such holder a declaration of non-residence or other similar claim for exemption, and such withholding or deduction would not have been required had such declaration or similar claim been received. AMENDMENTS AND ASSIGNMENT Except with respect to any changes which do not adversely affect the rights of holders (in which case no vote will be required), the Guarantee may be amended only with the prior approval of the holders of not less than 66 2/3% in liquidation preference of all Preferred Shares of all series then outstanding. The manner of obtaining any such approval of holders of the Preferred Shares will be as set forth under "Description of Preferred Shares--Voting Rights." All guarantees and agreements contained in the Guarantee shall bind the successors, assigns, receivers, trustees and representatives of the Guarantor and shall inure to the benefit of the holders of the Preferred Shares. TERMINATION OF THE GUARANTEE The Guarantee will terminate and be of no further force and effect upon full payment of the Redemption Price of such Preferred Shares of all series or upon full payment of the amounts payable upon liquidation of the Company. The Guarantee will continue to be effective or will be reinstated, as the case may be, if at any time any holder of Preferred Shares of any series must restore payment of any sums paid under the Preferred Shares of such series or the Guarantee. STATUS OF THE GUARANTEE The Guarantee will constitute an unsecured obligation of the Guarantor and will rank (i) subordinate and junior in right of payment to all other liabilities of the Guarantor and (ii) senior to 14 25 the most senior preferred or preference stock of any series now or hereafter issued by the Guarantor and senior to any guarantee now or hereafter entered into by the Guarantor in respect of any preferred or preference stock of any affiliate of the Guarantor. The Guarantee will constitute a guarantee of payment and not of collection. A holder of Preferred Shares may enforce the Guarantee directly against the Guarantor, and the Guarantor will waive any right or remedy to require that any action be brought against the Company or any other person or entity before proceeding against the Guarantor. The Guarantee will not be discharged except by payment of the Guarantee Payments in full to the extent not paid by the Company and by complete performance of all obligations under the Guarantee. GOVERNING LAW The Guarantee will be governed and construed in accordance with the laws of the State of New York. DESCRIPTION OF THE LOANS Set forth below is condensed information concerning the loans (the "Loans") which will be made by the Company to USX of the proceeds of the issuance of (i) the Preferred Shares of each series and (ii) the Company's Common Shares and related capital contributions ("Common Share Payments"). This summary contains all material information concerning the loan agreement (the "Loan Agreement") but does not purport to be complete. References to provisions of the Loan Agreement are qualified in their entirety by reference to the text of the Loan Agreement, a form of which has been filed as an exhibit to the Registration Statement of which this Prospectus forms a part. USX's obligation under the Loan Agreement will also be for the benefit of the holders from time to time of the Preferred Shares, and such holders will be entitled to enforce the Loan Agreement directly against USX. All Loans will be made pursuant to a single Loan Agreement. GENERAL The aggregate dollar amount of the Loans will be set forth in the Prospectus Supplement and will be equal to the aggregate liquidation preference of the Preferred Shares of each series, together with the related Common Share Payments. The entire principal amount of the Loans will become due and payable, together with any accrued and unpaid interest thereon, including Additional Interest (as herein defined), if any, on the earliest of (i) the date that is the 50th anniversary of the issuance of the Preferred Shares of the first series issued or (ii) the date upon which the Company, USX or the Manager is dissolved, wound up or liquidated. MANDATORY PREPAYMENT If the Company redeems Preferred Shares of any series in accordance with the terms thereof, the Loans pertaining to such shares will become due and payable in a principal amount equal to the aggregate stated liquidation preference of the Preferred Shares of such series so redeemed. Any payment pursuant to this provision shall be made prior to 12:00 noon, New York time, on the Redemption Date or at such other time on such earlier date as the Company and USX shall agree. OPTIONAL PREPAYMENT USX shall have the right to prepay the Loans relating to Preferred Shares of a series, without premium or penalty, 15 26 (i) in whole or in part (together with any accrued but unpaid interest, including Additional Interest, if any, on the portion being prepaid) at any time following the date, if any, set forth in the Prospectus Supplement for such series; and (ii) in whole (together with all accrued and unpaid interest, including Additional Interest, if any, thereon) at any time if USX is or would be required to pay Additional Interest on the entire amount of such Loans or in part (together with all accrued and unpaid interest, including Additional Interest on the portion being prepaid) at any time if USX is or would be required to pay Additional Interest with respect to only a portion of such Loans, provided that if a partial prepayment would, through the corresponding partial redemption required under the terms of the Preferred Shares of such series, result in a delisting of the Preferred Shares of such series, USX may, and may only, prepay such Loans in whole. In no event, however, shall USX have the right to prepay such Loans, or a portion thereof, under this clause (ii) based on (a) a technical obligation to pay Additional Interest because of a withholding obligation to the extent USX would not incur any significant penalties, interest or tax under the Internal Revenue Code or other applicable law if USX did not withhold, or (b) a de minimis obligation to pay Additional Interest. For purposes of the foregoing, in the event that USX is advised by independent legal counsel that more than an insubstantial risk exists that USX will incur penalties, interest or tax under the Internal Revenue Code or other applicable law if it does not withhold, USX shall have the right to repay such Loans, or a portion thereof, under this clause (ii) unless the obligation to pay Additional Interest if USX does so withhold is a de minimis obligation. INTEREST The Loans relating to the Preferred Shares of a series shall bear interest at the annual rate set forth in the Prospectus Supplement for such series, accruing from the date they are made until maturity. Such interest shall be payable on the last day of each calendar month of each year, commencing on the dates set forth in the Prospectus Supplement relating to such series. In the event that any date on which interest is payable on such Loans is not a Business Day, then payment of the interest payable on such date will be made on the next succeeding day which is a Business Day (and without any interest or other payment in respect of any such delay) except that, if such Business Day is in the next succeeding calendar year, such payment shall be made on the immediately preceding Business Day, in each case with the same force and effect as if made on such date; provided that USX shall have the right at any time or times during the term of such Loans, so long as USX is not in default in the payment of interest on any Loans, to extend the interest payment period to up to 18 months, at the end of which period USX shall pay all interest which has accrued and not been paid (together with interest thereon at the rate specified for the Loans to the extent permitted by applicable law); provided further that, during any such extended interest period neither USX, nor any majority-owned subsidiary of USX, shall declare or pay any dividend on, or redeem, purchase, acquire or make a liquidation payment with respect to, any of its capital stock or make any guarantee payments with respect to the foregoing (other than (i) payments under the Guarantee or (ii) dividends or guarantee payments to USX); and provided further that any such extended interest period may only be selected with respect to a Loan if an extended interest period of identical length is simultaneously selected for all Loans. Prior to the termination of any such extended interest payment period USX may further extend the interest payment period, provided that such extended interest payment period, together with all such further extensions thereof, may not exceed 18 months. USX shall give the Company notice of its selection of such extended interest payment period one Business Day prior to the earlier of (i) the date the Company declares the related dividend or (ii) the date the Company is required to give notice of the record or payment date of such related dividend to the New York Stock Exchange or other applicable self-regulatory organization or to holders of the Preferred Shares, but in any event not less than two Business Days prior to such record date. USX shall cause the Company to give such notice of USX's selection of such extended interest payment period to the holders of the Preferred Shares. 16 27 ADDITIONAL INTEREST In addition, if at any time following the date of the Loan Agreement (a) the Company shall be required to pay any Additional Amounts in respect of the Preferred Shares of any series, pursuant to the terms thereof, (b) USX shall be required to withhold or deduct any amounts, for or on account of any taxes, duties or governmental charges of whatever nature imposed by the United States of America (or any political subdivision thereof or therein), from the interest payments to be made by USX on the Loans relating to such series or (c) the Company shall be required to pay, with respect to its income derived from the interest payments on such Loans, any amounts, for or on account of any taxes, duties or governmental charges of whatever nature imposed by the Turks and Caicos Islands (or any political subdivision thereof or therein), or any other taxing authority, then, in any such case, USX will pay as interest such additional amounts ("Additional Interest") as may be necessary in order that the net amounts received and retained by the Company after paying such Additional Amounts, or after such withholding or deduction or the payment of such taxes, duties, assessments or governmental charges, as the case may be, shall result in the Company's having such funds as it would have had in the absence of the obligation to pay such Additional Amounts, or such withholding or deduction or the payment of such taxes, duties, assessments or governmental charges, as the case may be. The obligation to pay Additional Interest under (b) above shall be reduced proportionately to the extent that (x) USX or the Company has notified holders of Preferred Shares of such series of the obligation to withhold taxes and requested but not received from such holders declarations of nonresidence or other similar claim for exemption and (y) such withholding or deduction would not have been required had such declaration or similar claim been received. METHOD AND DATE OF PAYMENT Each payment by USX of principal and interest (including Additional Interest, if any) on the Loans shall be made to the Company in lawful money of the United States, at such place and to such account as may be designated by the Company. SET-OFF Notwithstanding anything to the contrary in the Loan Agreement, USX shall have the right to set-off any payment it is otherwise required to make thereunder with and to the extent USX has theretofore made, or is concurrently on the date of such payment making, a payment under the Guarantee. SUBORDINATION The Loan Agreement will provide that USX and the Company covenant and agree (and each holder of Preferred Shares by acceptance thereof agrees) that each of the Loans is subordinate and junior in right of payment to all Senior Indebtedness as provided in the Loan Agreement. The term "Senior Indebtedness" shall mean the principal, premium, if any, and interest on (i) all indebtedness of USX, whether outstanding on the date of the Loan Agreement or thereafter created, incurred or assumed, which is for money borrowed, or evidenced by a note or similar instrument given in connection with the acquisition of any business, properties or assets, including securities, (ii) any indebtedness of others of the kinds described in the preceding clause (i) for the payment of which USX is responsible or liable (directly or indirectly, contingently or otherwise) as guarantor or otherwise and (iii) amendments, renewals, extensions and refundings of any such indebtedness, unless in any instrument or instruments evidencing or securing such indebtedness or pursuant to which the same is outstanding, or in any such amendment, renewal, extension or refunding, it is expressly provided that such indebtedness is not superior in right of payment to the Loans. The Senior Indebtedness shall continue to be Senior Indebtedness and entitled to the benefits of the subordination provisions irrespective of any amendment, modification or waiver of any term of the Senior Indebtedness or extension or renewal of the Senior Indebtedness. 17 28 In the event that (i) USX shall default in the payment of any principal, or premium, if any, or interest on any Senior Indebtedness when the same becomes due and payable, whether at maturity or at a date fixed for prepayment or declaration or otherwise or (ii) an event of default occurs with respect to any Senior Indebtedness permitting the holders thereof to accelerate the maturity thereof and written notice describing such event of default and requesting commencement of payment blockage on transactions as hereinafter described is given to USX by the holders of Senior Indebtedness, then unless and until such default in payment and event of default shall have been cured or waived or shall have ceased to exist, no direct or indirect payment (in cash, property, securities, by set-off or otherwise) shall be made or agreed to be made on account of the Loans or interest thereon or in respect of any repayment, redemption, retirement, purchase or other acquisition of the Loans. In the event of (i) any insolvency, bankruptcy, receivership, liquidation, reorganization, read-justment, composition or other similar proceeding relating to USX, its creditors or its property, (ii) any proceeding for the liquidation, dissolution or other winding up of USX, voluntary or involuntary, whether or not involving insolvency or bankruptcy proceedings, (iii) any assignment by USX for the benefit of its creditors, or (iv) any other marshalling of the assets of USX, all Senior Indebtedness shall first be paid in full before any payment or distribution, whether in cash, securities or other property, shall be made by USX on account of the Loans. Any payment or distribution, whether in cash, securities or other property (other than securities of USX or any other corporation provided for by a plan of reorganization or readjustment, the payment of which is subordinate, at least to the extent provided in the subordination provisions of the Loan Agreement with respect to the indebtedness evidenced by the Loans, to the payment of all Senior Indebtedness at the time outstanding and to any securities issued in respect thereof under any such plan of reorganization or readjustment), which would otherwise (but for the subordination provisions) be payable or deliverable in respect of the Loans shall be paid or delivered directly to the holders of Senior Indebtedness in accordance with the priorities then existing among such holders until all Senior Indebtedness shall have been paid in full. No present or future holder of any Senior Indebtedness shall be prejudiced in the right to enforce subordination of the indebtedness constituting the Loans by any act or failure to act on the part of USX. Senior Indebtedness shall not be deemed to have been paid in full unless the holders thereof shall have received cash, securities or other property equal to the amount of such Senior Indebtedness then outstanding. Upon the payment in full of all Senior Indebtedness, the Company shall be subrogated to all the rights of any holders of Senior Indebtedness to receive any further payments or distributions applicable to the Senior Indebtedness until the Loans shall have been paid in full, and such payments or distributions received by the Company, by reason of such subrogation, of cash, securities or other property which otherwise would be paid or distributed to the holders of Senior Indebtedness, shall, as between USX and its creditors other than the holders of Senior Indebtedness, on the one hand, and the Company, on the other, be deemed to be a payment by USX on account of Senior Indebtedness, and not on an account of the Loans. CERTAIN COVENANTS OF USX USX will covenant that it will not declare or pay any dividend on, or redeem, purchase, acquire or make a liquidation payment with respect to, any of its capital stock, or make any guarantee payments with respect to the foregoing (other than payments under the Guarantee) if at such time (i) there shall have occurred any event that, with the giving of notice or the lapse of time or both, would constitute an Event of Default under the Loan Agreement or (ii) USX shall be in default with respect to its payment or other obligations under the Guarantee, the Expense Agreement or the Keep Well Agreement. USX will also covenant (i) to maintain direct or indirect 100% ownership of the Common Shares and any other shares of the Company other than any series of the Preferred Shares, (ii) to cause at least 21% of the total value of the Company and at least 21% of all interests in the capital, income, gain, loss, deduction and credit of the Company to be represented by 18 29 Common Shares, (iii) not to voluntarily dissolve, wind-up, or liquidate the Company or the Manager, (iv) to cause USX Capital Management Company to remain the Manager of the Company and to timely perform all of its duties as Manager of the Company (including the duty to declare and pay dividends on the Preferred Shares as described under "Description of Preferred Shares--Dividends"), (v) to use its reasonable efforts to cause the Company to remain a limited life company and otherwise continue to be treated as a partnership for United States federal income tax purposes, and (vi) to at all times own directly or indirectly all of the capital stock of the Manager. The Company may not waive compliance or waive any default in compliance by USX of any covenant or other term in the Loan Agreement without the approval of the same percentage of Preferred Shareholders, obtained in the same manner, as would be required for an amendment of the Loan Agreement to the same effect. EVENTS OF DEFAULT If one or more of the following events (each an "Event of Default") shall occur and be continuing: (a) default in the payment of any interest under the Loan Agreement, including any Additional Interest, when due for 10 days (whether by virtue of the provisions described above under "Subordination" or otherwise); provided that a valid extension of the interest payment period by USX shall not constitute a default in the payment of interest for this purpose; or (b) default in the payment of any principal under the Loan Agreement when due (whether by virtue of the provisions described above under "Subordination" or otherwise); or (c) the dissolution, winding up or liquidation of the Company; or (d) the bankruptcy, insolvency or liquidation of USX; or (e) the bankruptcy, insolvency or liquidation of the Manager; or (f) breach of any covenants contained in the Loan Agreement continued for 30 days after notice to USX from any Preferred Shareholder; then provided that the holders of a majority in liquidation preference of the outstanding Preferred Shares of such series are entitled to appoint a trustee (as described under "Description of Preferred Shares--Voting Rights"), the Company will have the right to declare the principal of and the interest on the Loans (including any Additional Interest and any interest subject to an extension election) and any other amounts payable under the Loan Agreement to be forthwith due and payable and to enforce its other rights as a creditor with respect to the Loans. No Loans may be so accelerated by the Company unless all Loans are so accelerated. Under the terms of the Preferred Shares, the holders of outstanding Preferred Shares will have the rights referred to under "Description of Preferred Shares--Voting Rights", including the right to appoint a trustee, which trustee shall be authorized to exercise the Company's right to accelerate the principal amount of the Loans and to enforce the Company's other creditor rights under the Loans. MISCELLANEOUS USX will have the right at all times to assign any of its rights or obligations under the Loan Agreement to a direct or indirect wholly owned subsidiary of USX; provided that, in the event of any such assignment, USX will remain jointly and severally liable for all such obligations. The Company may not assign any of its rights under the Loan Agreement without the prior written consent of USX. Subject to the foregoing, the Loan Agreement will be binding upon and inure to the benefit of USX and the Company and their respective successors and assigns. The Loan Agreement provides that it may not otherwise be assigned by USX or the Company. 19 30 The Loan Agreement will provide that USX may merge with or into another entity, may permit another entity to merge with or into USX and may sell, transfer or lease all or substantially all of its assets to another entity only if (i) at such time no Event of Default has occurred and is continuing, or would occur as a result of such merger, sale, transfer or lease, and (ii) USX is the survivor of such merger or the survivor of such merger or entity to which USX's assets are sold, transferred or leased is an entity organized under the laws of the United States or any state thereof and assumes all of USX's obligations under the Loan Agreement. Except as to matters relating to the authorization, execution and delivery of the Loan Agreement by the Company, which will be governed by the laws of the Turks and Caicos Islands, the Loan Agreement will be governed by and construed in accordance with the laws of the State of New York. The Loan Agreement may be amended by mutual consent of the parties in the manner the parties shall agree; provided that, so long as any of the Preferred Shares remain outstanding, no such amendment shall be made, and no termination of the Loan Agreement shall occur, without the prior approval of the holders of at least 66 2/3% of the outstanding Preferred Shares unless and until the Loans and all accrued and unpaid interest thereon (including Additional Interest, if any) shall have been paid in full. TAXATION The following discussion is a summary of certain Turks and Caicos Islands and United States federal income tax consequences of the purchase, ownership and disposition of Preferred Shares and is based upon the advice of Misick and Stanbrook with respect to Turks and Caicos Islands taxes, and Miller & Chevalier, Chartered, United States tax counsel to USX, with respect to United States federal income taxes. It deals only with Preferred Shares held as capital assets by initial purchasers, and not with special classes of holders, such as dealers in securities or currencies, life insurance companies, persons holding Preferred Shares as a hedge or hedged against currency risks or as part of a straddle, or persons whose functional currency is not the U.S. dollar. The summary deals only with holders who purchase Preferred Shares of a series, and is subject to additional discussion of material Turks and Caicos Islands and United States federal income tax consequences that may appear in a Prospectus Supplement delivered in connection with a particular series of Preferred Shares. This summary is based on tax laws in effect in the United States and the Turks and Caicos Islands, and administrative and judicial interpretations thereof, as of the date hereof, all of which are subject to change (possibly on a retroactive basis). PROSPECTIVE PURCHASERS OF PREFERRED SHARES ARE ADVISED TO CONSULT THEIR OWN TAX ADVISORS AS TO THE TURKS AND CAICOS ISLANDS, UNITED STATES OR OTHER TAX CONSEQUENCES OF THE PURCHASE, OWNERSHIP AND DISPOSITION OF PREFERRED SHARES, INCLUDING THE EFFECT OF ANY STATE, LOCAL AND FOREIGN TAX LAWS. UNITED STATES INCOME FROM PREFERRED SHARES In the opinion of Miller & Chevalier, Chartered, the Company will be treated as a partnership for federal income tax purposes. Each holder of Preferred Shares (a "Shareholder") will be required to include in gross income his distributive share of the Company's net income. Such income will not exceed dividends received on a Preferred Share, except in limited circumstances as described below under "Potential Extension of Interest Payment Period". No portion of such income will be eligible for the dividends received deduction. DISPOSITION OF PREFERRED SHARES Gain or loss will be recognized on a sale of Preferred Shares equal to the difference between the amount realized and the Shareholder's tax basis for the Preferred Shares sold. Gain or loss 20 31 recognized by a Shareholder on the sale or exchange of a Preferred Share held for more than one year will be taxable as long-term capital gain or loss. COMPANY INFORMATION RETURNS USX Capital Management Company, as Manager of the Company, will furnish each Shareholder with a Schedule K-1 setting forth each Shareholder's allocable share of income within 90 days after the close of the Company's taxable year. Any person who holds Preferred Shares as a nominee for another person is required to furnish to the Company (a) the name, address and taxpayer identification number of the beneficial owners and the nominee; (b) whether the beneficial owner is (i) a person that is not a United States person, (ii) a foreign government, an international organization or any wholly owned agency or instrumentality of either of the foregoing, or (iii) a tax-exempt entity; (c) the amount and description of Preferred Shares held, acquired or transferred for the beneficial owners; and (d) certain information including the dates of acquisitions and transfers, means of acquisitions and transfers, and acquisition cost for purchases, as well as the amount of net proceeds from sales. Brokers and financial institutions are required to furnish additional information, including whether they are a United States person, and certain information on Preferred Shares they acquire, hold or transfer for their own account. A penalty of $50 per occurrence (up to a maximum of $100,000 per calendar year) is imposed under the Internal Revenue Code for failure to report such information to the Company. The nominee is required to supply the beneficial owner of the Preferred Shares with the information furnished to the Company. POTENTIAL EXTENSION OF INTEREST PAYMENT PERIOD Under the terms of any Loan which may be made from the proceeds of issuance of Preferred Shares, USX may be permitted to extend the interest payment period on all Loans up to 18 months. In the event that USX exercises this right, USX may not, among other things, declare dividends on any share of its capital stock, and therefore, the extension of a payment period is, in the view of the Company, remote. In the event that the payment period is extended, the Company will continue to accrue income, equal to the amount of the interest payment due at the end of the extended payment period, over the length of the extended payment period. Accrued income will be allocated, but not distributed, to holders of record on the last day of each calendar month. As a result, holders of record during an extended interest payment period will include interest in gross income in advance of the receipt of cash, and any such holders who dispose of Preferred Shares prior to the record date for the payment of dividends following such extended interest payment period will include interest in gross income but will not receive any cash related thereto. The tax basis of a Preferred Share will be increased by the amount of any interest that is included in income without a receipt of cash, and will be decreased again when and if such cash is subsequently received from the Company. UNITED STATES ALIEN HOLDERS For purposes of this discussion, a "United States Alien Holder" is any holder who or which is (i) a nonresident alien individual or (ii) a foreign corporation, partnership or estate or trust, in either case not subject to United States federal income tax on a net income basis in respect of a Preferred Share. 21 32 Under present United States federal income tax law: (i) payments by the Company or any of its paying agents to any holder of a Preferred Share who or which is a United States Alien Holder will not be subject to United States federal withholding tax; provided that (a) the beneficial owner of the Preferred Share does not actually or constructively own 10% or more of the total combined voting power of all classes of stock of USX entitled to vote, (b) the beneficial owner of the Preferred Share is not a controlled foreign corporation that is related to USX through stock ownership, and (c) either (A) the beneficial owner of the Preferred Share certifies to the Company or its agent, under penalties of perjury, that it is not a United States Holder and provides its name and address or (B) a securities clearing organization, bank or other financial institution that holds customers' securities in the ordinary course of its trade or business (a "financial institution") and holds the Preferred Share certifies to the Company or its agent under penalties of perjury that such statement has been received from the beneficial owner by it or by a financial institution between it and the beneficial owner and furnishes the payor with a copy thereof; and (ii) A United States Alien Holder of a Preferred Share will not be subject to United States federal withholding tax on any gain realized on the sale or exchange of a Preferred Share. BACKUP WITHHOLDING AND INFORMATION REPORTING In general, information reporting requirements will apply to payments of the proceeds of the sale of Preferred Shares within the United States to noncorporate U.S. holders, and "backup withholding" at a rate of 31% will apply to such payments if the United States holder fails to provide an accurate taxpayer identification number. Payments of the proceeds from the sale by a United States Alien Holder of Preferred Shares made to or through a foreign office of a broker will not be subject to information reporting or backup withholding, except that, if the broker is a United States person, a controlled foreign corporation for United States tax purposes or a foreign person 50% or more of whose gross income is effectively connected with a United States trade or business for a specified three-year period, information reporting may apply to such payments. Payments of the proceeds from the sale of Preferred Shares to or through the United States office of a broker is subject to information reporting and backup withholding unless the holder or beneficial owner certifies as to its non-United States status or otherwise establishes an exemption from information reporting and backup withholding. TURKS AND CAICOS ISLANDS The following discussion represents the opinion of Misick and Stanbrook insofar as it relates to matters of law and legal conclusions. Payment of dividends on the Preferred Shares will not be subject to any withholding under the tax laws of the Turks and Caicos Islands. There are no taxes in the Turks and Caicos Islands on income, profits, capital gains or turnover, nor are there any inheritance, estate, or gift taxes or duties in the Turks and Caicos Islands. The Company is exempted from the payment of stamp duty on the issuance of any shares, debentures or other obligations of the Company. No stamp duty is payable on the transfer or redemption of shares in the Company. The Company has been issued a certificate by the Governor of the Turks and Caicos Islands stating that the Company is exempt, for a period of twenty years from the date of its organization, December 20, 1993, from the payment of any taxes or duties which may be imposed in the future on profits, income, capital gains, assets or appreciations and any such tax or duty or tax in the nature of estate duty or inheritance tax payable on the shares, debentures or other obligations of the Company. 22 33 PLAN OF DISTRIBUTION The Company may sell Preferred Shares (i) through underwriters, including Goldman, Sachs & Co., (ii) through dealers, (iii) through agents or (iv) directly to purchasers. The Prospectus Supplement relating to the Preferred Shares of a particular series will set forth the terms of such offering, including the names of any underwriters, dealers or agents involved in the sale of such Preferred Shares, the number of Preferred Shares of such series to be purchased by any underwriters and any applicable commissions or discounts. The net estimated proceeds to the Company from such series of Preferred Shares will also be set forth in the Prospectus Supplement. If underwriters are used in the sale, the Preferred Shares being sold will be acquired by the underwriters for their own account and may be resold from time to time in one or more transactions, including negotiated transactions, at a fixed public offering price or at varying prices determined at the time of sale. Unless otherwise set forth in the Prospectus Supplement relating to the Preferred Shares of a particular series, the obligations of the underwriters to purchase such Preferred Shares will be subject to certain conditions precedent and the underwriters will be obliged to purchase all of such Preferred Shares if any of such Preferred Shares are purchased. Any initial public offering price and any discounts or concessions allowed or reallowed or paid to dealers may be changed from time to time. If dealers are used in the sale, unless otherwise indicated in the Prospectus Supplement relating to the Preferred Shares of a particular series, the Company will sell such Preferred Shares to such dealers as principals. Such dealers may then resell such Preferred Shares to the public at varying prices to be determined by them at the time of resale. Preferred Shares of a particular series may also be sold through agents designated by the Company from time to time or directly by the Company. Any agent involved in the offering and sale of any such Preferred Shares will be named, and any commissions payable by the Company to such agent will be set forth, in the Prospectus Supplement relating to the Preferred Shares of such series. Unless otherwise indicated in such Prospectus Supplement, any such Agent will act on a best efforts basis for the period of its appointment. Underwriters, dealers and agents may be entitled under agreements entered into with the Company to indemnification by the Company against certain civil liabilities, including liabilities under the Securities Act, or to contribution with respect to payments which the underwriters, dealers or agents may be required to make in respect thereof. Underwriters, dealers and agents may be customers of, engage in transactions with, or perform services for, the Company in the ordinary course of business. VALIDITY OF SECURITIES The validity of the Preferred Shares of each series will be passed upon by Misick and Stanbrook, Turks and Caicos Islands counsel to the Company. The validity of the Backup Undertakings relating to the Preferred Shares of such series, consisting of the Guarantee, the Loan Agreement, the Expense Agreement and the Keep Well Agreement, will be passed upon on behalf of the Company and USX by Dan D. Sandman, Esq., General Counsel and Secretary of USX. The validity of such Backup Undertakings of USX relating to such Preferred Shares will be passed upon on behalf of the Underwriters by Sullivan & Cromwell, United States counsel to the Underwriters. Mr. Sandman, in his capacity as General Counsel and Secretary of USX, is paid a salary by USX and participates in various employee benefit plans offered to officers of USX generally. As to all matters of Turks and Caicos Islands law, Mr. Sandman will rely upon the opinion of Misick and Stanbrook, and as to all matters of New York law, he will rely upon the opinion of Sullivan & Cromwell. 23 34 EXPERTS The consolidated financial statements of USX, the financial statements of the Marathon Group, the financial statements of the U.S. Steel Group and the financial statements of the Delhi Group as of December 31, 1993 and 1992 and for each of the three years in the period ended December 31, 1993, incorporated in this Prospectus by reference to USX's Form 8-K dated February 14, 1994, have been so incorporated in reliance on the reports (the report pertaining to the U.S. Steel Group financial statements contains an explanatory paragraph referring to the U.S. Steel Group's involvement in certain contingencies) of Price Waterhouse, independent accountants, given on the authority of said firm as experts in auditing and accounting. 24 35 - ------------------------------------------------------ - ------------------------------------------------------ NO PERSON HAS BEEN AUTHORIZED TO GIVE ANY INFORMATION OR TO MAKE ANY REPRESENTATIONS OTHER THAN THOSE CONTAINED IN THIS PROSPECTUS SUPPLEMENT OR THE PROSPECTUS AND, IF GIVEN OR MADE, SUCH INFORMATION OR REPRESENTATIONS MUST NOT BE RELIED UPON AS HAVING BEEN AUTHORIZED. THIS PROSPECTUS SUPPLEMENT AND THE PROSPECTUS DO NOT CONSTITUTE AN OFFER TO BUY ANY SECURITIES OTHER THAN THE SECURITIES DESCRIBED IN THIS PROSPECTUS SUPPLEMENT AND THE PROSPECTUS OR AN OFFER TO SELL OR THE SOLICITATION OF AN OFFER TO BUY SUCH SECURITIES IN ANY CIRCUMSTANCES IN WHICH SUCH OFFER OR SOLICITATION IS UNLAWFUL. NEITHER THE DELIVERY OF THIS PROSPECTUS SUPPLEMENT OR THE PROSPECTUS NOR ANY SALE MADE HEREUNDER OR THEREUNDER SHALL, UNDER ANY CIRCUMSTANCES, CREATE ANY IMPLICATION THAT THE INFORMATION CONTAINED HEREIN OR THEREIN IS CORRECT AS OF ANY TIME SUBSEQUENT TO THE DATE OF SUCH INFORMATION. ------------------ TABLE OF CONTENTS
PAGE ---- PROSPECTUS SUPPLEMENT USX Corporation...................... S-2 USX Capital LLC...................... S-3 Certain Investment Considerations.... S-4 Use of Proceeds...................... S-5 Capitalization....................... S-5 USX Corporation Selected Consolidated Financial Information.............. S-6 Certain Terms of the Series A Preferred Shares................... S-7 Certain Terms of the Loans........... S-8 Underwriting......................... S-8 Validity of Securities............... S-10 PROSPECTUS Available Information................ 2 Incorporation of Certain Documents by Reference.......................... 3 USX Corporation...................... 3 USX Corporation Ratio of Earnings to Combined Fixed Charges and Preferred Stock Dividends.......... 4 USX Capital LLC...................... 4 Use of Proceeds...................... 5 Description of Preferred Shares...... 5 Description of the Guarantee......... 13 Description of the Loans............. 15 Taxation............................. 20 Plan of Distribution................. 23 Validity of Securities............... 23 Experts.............................. 24
- ------------------------------------------------------ - ------------------------------------------------------ - ------------------------------------------------------ - ------------------------------------------------------ 10,000,000 SHARES USX CAPITAL LLC GUARANTEED TO THE EXTENT SET FORTH HEREIN BY USX CORPORATION 8 3/4% CUMULATIVE MONTHLY INCOME PREFERRED SHARES, SERIES A ------------------ PROSPECTUS SUPPLEMENT ------------------ GOLDMAN, SACHS & CO. BEAR, STEARNS & CO. INC. A.G. EDWARDS & SONS, INC. KIDDER, PEABODY & CO. INCORPORATED LEHMAN BROTHERS MORGAN STANLEY & CO. INCORPORATED PAINEWEBBER INCORPORATED PRUDENTIAL SECURITIES INCORPORATED SALOMON BROTHERS INC SMITH BARNEY SHEARSON INC. REPRESENTATIVES OF THE UNDERWRITERS FEBRUARY 24, 1994 - ------------------------------------------------------ - ------------------------------------------------------ -----END PRIVACY-ENHANCED MESSAGE-----