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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d) of
The Securities Exchange Act of 1934
Date of Report (Date of earliest event reported): April 26, 1994
USX Corporation
(Exact name of registrant as specified in its charter)
Delaware 1-5153 25-0996816
(State or other (Commission (IRS Employer
jurisdiction of File Number) Identification No.)
incorporation)
600 Grant Street, Pittsburgh, PA 15219-4776
(Address of principal executive offices) (Zip Code)
(412) 433-1121
(Registrant's telephone number,
including area code)
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Item 5. Other Events.
(1) On April 26, 1994, the Corporation executed a Distribution
Agreement with CS First Boston Corporation, Goldman, Sachs & Co., Lehman
Brothers, Inc., J. P. Morgan Securities Inc., Morgan Stanley & Co.
Incorporated and Salomon Brothers Inc in connection with the issuance of up to
$750 million of Medium-Term Notes, Series C (the "Notes") pursuant to a shelf
registration statement of Form S-3, File No. 33-52937.
(2) On April 26, 1994, the Registrant reported unaudited results for
the first quarter ended March 31, 1994 for each of the Marathon Group, the
U. S. Steel Group and the Delhi Group of USX Corporation and consolidated
results for the USX Corporation and subsidiary companies. The press releases
announcing these results and including condensed financial and operating data
are filed herewith as exhibits.
Item 7. Financial Statements and Exhibits.
(c) Exhibits
1. Distribution Agreement
4. Forms of Notes
10.(a) Issuing and Paying Agency Agreement dated April 26, 1994
between the Corporation and the First National Bank of Boston
10.(b) Calculation Agency Agreement dated April 26, 1994 between the
Corporation and the First National Bank of Boston
99.1 Press Release dated April 26, 1994 with respect to the
Marathon Group of USX Corporation and summary financial and
operating data.
99.2 Press Release dated April 26, 1994 with respect to the U. S.
Steel Group of USX Corporation and summary financial and
operating data.
99.3 Press Release dated April 26, 1994 with respect to the Delhi
Group of USX Corporation and summary financial and operating
data.
Condensed consolidated financial data with respect to USX and
subsidiary companies is included with each press release.
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SIGNATURE
Pursuant to the requirements of the Securities Exchange Act of 1934,
the registrant has duly caused this report to be signed on its behalf by the
undersigned hereunto duly authorized.
USX CORPORATION
By /s/ L. B. Jones
---------------------
L. B. Jones
Vice President & Comptroller
Dated: April 26, 1994
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Exhibit 1
$750,000,000
USX Corporation
Medium-Term Notes, Series C
DISTRIBUTION AGREEMENT
April 26, 1994
CS First Boston Corporation,
Goldman, Sachs & Co.,
Lehman Brothers Inc.,
J.P. Morgan Securities Inc.,
Morgan Stanley & Co. Incorporated,
Salomon Brothers Inc
c/o CS First Boston Corporation,
Park Avenue Plaza,
New York, New York 10055.
Dear Sirs:
1. Introduction. USX Corporation, a Delaware corporation (the
"Issuer"), agrees hereby with each of you (individually, a "Distributor" and
collectively, the "Distributors" which terms, in the case of Lehman Brothers
Inc., shall include Lehman Special Securities Inc.) with respect to the issue
and sale from time to time by the Issuer of its medium-term notes registered
under the registration statement referred to in Section 2(a) (any such
medium-term notes being hereinafter referred to as the "Securities", which
expression shall, if the context so admits, include any global Security).
Securities may be sold pursuant to Section 3 of this Agreement in an aggregate
amount not to exceed the amount of Registered Securities (as defined in Section
2(a) hereof) registered pursuant to such registration statement reduced by the
aggregate amount of any other Registered Securities sold otherwise than
pursuant to Section 3 of this Agreement. The Securities will be issued under
an indenture, dated as of March 15, 1993 (the "Indenture"), between the Issuer
and PNC Bank, National Association, as trustee (the "Trustee").
The terms of the Securities shall be described in all material
respects in the Prospectus referred to in Section 2(a) as it may be amended or
supplemented from time to time, including any supplement to the Prospectus that
sets forth only the terms of a particular issue of the Securities (a "Pricing
Supplement"). Securities will be issued, and the terms thereof established,
from time to time
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by the Issuer in accordance with the Indenture and the Procedures (as defined
in Section 3(d) hereof).
2. Representations and Warranties of the Issuer. The Issuer
represents and warrants to, and agrees with, each Distributor as follows:
(a) A registration statement (No. 33-52937), including a prospectus,
relating to debt securities of the Issuer, including the Securities
("Registered Securities"), has been filed with the Securities and Exchange
Commission ("Commission") and has become effective under the Securities
Act of 1933 ("Act"). Such registration statement, as amended as of the
Closing Date (as defined in Section 3(e) hereof), is hereinafter referred
to as the "Registration Statement", and the prospectus included in such
Registration Statement, as supplemented as of the Closing Date, including
all material incorporated by reference therein, is hereinafter referred to
as the "Prospectus". Any reference in this Agreement to amending or
supplementing the Prospectus shall be deemed to include the filing of
materials incorporated by reference in the Prospectus after the Closing
Date and any reference in this Agreement to any amendment or supplement to
the Prospectus shall be deemed to include any such materials incorporated
by reference in the Prospectus after the Closing Date.
(b) On the effective date of the registration statement relating to
the Registered Securities, such registration statement conformed in all
material respects to the requirements of the Act, the Trust Indenture Act
of 1939 ("Trust Indenture Act") and the rules and regulations of the
Commission ("Rules and Regulations") and did not include any untrue
statement of a material fact or omit to state any material fact required
to be stated therein or necessary to make the statements therein not
misleading, and on the Closing Date, the Registration Statement and the
Prospectus, and at each of the times of acceptance and of delivery
referred to in Section 6(a) hereof and at each of the times of amendment
or supplementing referred to in Section 6(b) hereof (the Closing Date and
each such time being herein sometimes referred to as a "Representation
Date"), the Registration Statement and the Prospectus as then amended or
supplemented will conform in all material respects to the requirements of
the Act, the Trust Indenture Act and the Rules and Regulations, and
neither of such documents will include any untrue statement of a material
fact or will omit to state any material fact required to be stated therein
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or necessary to make the statements therein not misleading, except that
the foregoing does not apply to statements in or omissions from any of
such documents based upon written information furnished to the Issuer by
any Distributor specifically for use therein.
3. Appointment as Distributors; Agreement of Distributors;
Solicitations as Distributors.
(a) Subject to the terms and conditions stated herein, the Issuer
hereby appoints each of the Distributors as an agent of the Issuer for the
purpose of soliciting or receiving offers to purchase the Securities from
the Issuer by others. So long as this Agreement shall remain in effect
with respect to any Distributor, the Issuer shall not, without the consent
of any such Distributor, solicit or accept offers to purchase Securities
otherwise than through one of the Distributors; provided, however, that,
subject to all of the terms and conditions of this Agreement, the
foregoing shall not be construed to prevent the Issuer from selling at any
time any Registered Securities in a firm commitment underwriting pursuant
to an underwriting agreement that does not provide for a continuous
offering of such Registered Securities; and, provided, further, that the
Issuer reserves the right from time to time to solicit and to accept
specific offers to purchase Securities made directly to the Issuer by
investors or solicited by a dealer other than the Distributors (each an
"Other Dealer"), without obtaining the prior consent of any of the
Distributors, provided that (i) the Issuer shall give each of the
Distributors notice of its decision to accept such an offer to purchase
Securities promptly following such acceptance, and (ii) any Other Dealer
shall agree to be bound by and subject to the terms and conditions of this
Agreement binding on the Distributors (including the commission schedule
set forth on Exhibit B). The Issuer reserves the right to appoint
additional Distributors for the purpose of soliciting offers to purchase
Securities from the Issuer subject to the terms and conditions stated
herein by having any such additional Distributor execute and deliver a
counterpart to this Agreement upon appointment of such additional
Distributor. The Issuer will promptly notify the existing Distributors of
the addition of a Distributor. The name of such additional Distributor
will thereafter be included in each Pricing Supplement applicable to such
Distributor or, after consultation with the existing Distributors, the
Issuer may amend or supplement the Prospectus to include such additional
Distributor.
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(b) On the basis of the representations and warranties contained
herein, but subject to the terms and conditions herein set forth, each
Distributor agrees, as an agent of the Issuer, to use all reasonable
efforts when requested by the Issuer to solicit offers to purchase the
Securities upon the terms and conditions set forth in the Prospectus, as
from time to time amended or supplemented. In placing any Securities
pursuant to an offer accepted by the Issuer, the Distributor that
solicited or received such offer (the "Presenting Distributor") may act as
agent or purchase such Securities from the Issuer as principal for resale.
Upon acceptance by the Issuer of an offer to purchase Securities, the
Presenting Distributor shall complete either (i) its standard form of
confirmation or (ii) a Terms Agreement substantially in the form of
Exhibit A hereto (a "Terms Agreement") and shall transmit the completed
confirmation or Terms Agreement, as the case may be, to the Issuer by hand
or by facsimile or other similar means of telecommunication. If such
confirmation or Terms Agreement contemplates that the Securities described
therein shall be purchased by the Presenting Distributor, as principal,
then, unless the Issuer notifies the Presenting Distributor in writing
within one Business Day that the Issuer does not agree to the terms set
forth in such confirmation or Terms Agreement, such confirmation or Terms
Agreement, as the case may be, shall constitute an agreement between the
Presenting Distributor and the Issuer for the sale and purchase of such
Securities upon the terms set forth therein and in this Agreement (whether
or not such confirmation or Terms Agreement, as the case may be, shall
have been executed by the Issuer or the Presenting Distributor).
Upon receipt of notice from the Issuer as contemplated by Section
4(b) hereof, each Distributor shall promptly suspend its solicitation of
offers to purchase Securities until such time as the Issuer shall have
furnished it with an amendment or supplement to the Registration Statement
or the Prospectus, as the case may be, contemplated by Section 4(b) and
shall have advised such Distributor that such solicitation may be resumed.
The Issuer reserves the right, in its sole discretion, to suspend
solicitation of offers to purchase the Securities commencing at any time
for any period of time or permanently. Upon receipt of at least one
Business Day's prior notice from the Issuer, the Distributors will
forthwith suspend solicitation of offers to purchase Securities from the
Issuer until
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such time as the Issuer has advised the Distributors that such
solicitation may be resumed. For the purpose of the foregoing sentence,
"Business Day" shall mean any day that is not a Saturday or Sunday, and
that in The City of New York is not a day on which banking institutions
generally are authorized or obligated by law or executive order to close.
The Distributors are authorized to solicit offers to purchase
Securities as described in the Prospectus, as amended or supplemented, and
only in a minimum aggregate amount of $100,000 (or the equivalent thereof
in one or more currencies or currency units other than U.S. dollars).
Each Distributor shall communicate to the Issuer, orally or in writing,
each reasonable offer to purchase Securities received by it as agent. The
Issuer shall have the sole right to accept offers to purchase the
Securities and may reject any such offer, in whole or in part. Each
Distributor shall have the right, in its discretion reasonably exercised,
without notice to the Issuer, to reject any offer to purchase Securities
received by it, in whole or in part, and any such rejection shall not be
deemed a breach of its agreement contained herein.
No Security which the Issuer has agreed to sell pursuant to this
Agreement shall be deemed to have been purchased and paid for, or sold by
the Issuer, until such Security shall have been delivered to the purchaser
thereof against payment by such purchaser.
(c) At the time of delivery of, and payment for, any Securities sold
by the Issuer as a result of a solicitation made by, or offer to purchase
received by, a Distributor acting on an agency basis, the Issuer agrees to
pay such Distributor a commission in accordance with the schedule set
forth in Exhibit B hereto. The Issuer agrees that each Distributor that
purchases Securities as principal for resale shall receive such
compensation, in the form of a discount or otherwise, as shall be
indicated in the applicable confirmation or Terms Agreement, as the case
may be, or, if no compensation is indicated therein, a commission in
accordance with Exhibit B hereto.
(d) Administrative procedures respecting the sale of Securities (the
"Procedures") shall be agreed upon from time to time by the Distributors
and the Issuer. The initial Procedures, which are set forth in Exhibit C
hereto, shall remain in effect until changed by agreement among the Issuer
and the Distributors. Each Distributor and the Issuer agree to perform
the
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respective duties and obligations specifically provided to be performed by
each of them herein and in the Procedures. The Issuer will furnish to the
Trustee a copy of the Procedures as from time to time in effect.
(e) The documents required to be delivered by Section 5 hereof shall
be delivered at the office of Sullivan & Cromwell, 125 Broad Street, New
York, New York, not later than 10:00 A.M., New York City time, on the date
of this Agreement or at such later time as may be mutually agreed by the
Issuer and the Distributors, which in no event shall be later than the
time at which the Distributors commence solicitation of purchases of
Securities hereunder, such time and date being herein called the "Closing
Date".
4. Certain Agreements of the Issuer. The Issuer agrees with the
Distributors that it will furnish to Sullivan & Cromwell, counsel for the
Distributors, one signed copy of the Registration Statement, including all
exhibits, in the form in which it became effective and of all amendments
thereto and that, in connection with each offering of Securities,
(a) The Issuer will advise each Distributor promptly of any proposal
to amend or supplement the Registration Statement or the Prospectus and
will afford the Distributor a reasonable opportunity to comment on any
such proposed amendment or supplement (other than (i) any Pricing
Supplement that relates to Securities not purchased through or by such
Distributor and (ii) reports and definitive proxy statements required to
be filed with the Commission under the Exchange Act, it being understood
that such reports and statements shall be provided to the Distributors at
the same time as they are filed with the Commission); and the Issuer will
also advise each Distributor of the filing and effectiveness of any such
amendment or supplement and of the institution by the Commission of any
stop order proceedings in respect of the Registration Statement or of any
part thereof and will use all reasonable efforts to prevent the issuance
of any such stop order and to obtain as soon as possible its lifting, if
issued.
(b) If, at any time when (i) a prospectus relating to the Securities
is required to be delivered under the Act and (ii) no suspension of
solicitation of offers to purchase Securities pursuant to Section 3(b) or
this Section 4(b) shall be in effect (any such time referred to in clause
(ii) and any time when either any Distributor shall own any Securities
with the intention
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of reselling them or the Issuer has accepted an offer to purchase
Securities but the related settlement has not occurred being referred to
herein as a "Marketing Time"), any event occurs as a result of which the
Prospectus as then amended or supplemented would include an untrue
statement of a material fact or omit to state any material fact necessary
to make the statements therein, in the light of the circumstances under
which they were made when such Prospectus is delivered, not misleading, or
if it is necessary at any such time to amend the Prospectus to comply with
the Act, the Issuer will promptly notify each Distributor to suspend
solicitation of offers to purchase the Securities; and if the Issuer shall
decide to amend or supplement the Registration Statement or the
Prospectus, it will promptly advise each Distributor by telephone (with
confirmation in writing) and, subject to the provisions of subsection (a)
of this Section, will promptly prepare and file with the Commission an
amendment or supplement which will correct such statement or omission or
an amendment which will effect such compliance. Notwithstanding the
foregoing, if, at the time any such event occurs or it becomes necessary
to amend the Prospectus to comply with the Act, any Distributor shall own
any of the Securities with the intention of reselling them, or the Issuer
has accepted an offer to purchase Securities but the related settlement
has not occurred, the Issuer, subject to the provisions of subsection (a)
of this Section, will promptly prepare and file with the Commission an
amendment or supplement which will correct such statement or omission or
an amendment which will effect such compliance. Neither the Distributors'
consent to, nor their delivery of, any such amendment or supplement shall
constitute a waiver of any of the conditions set forth in Section 5.
(c) The Issuer will file promptly all documents required to be filed
with the Commission pursuant to Section 13(a), 13(c), 14 or 15(d) of the
Exchange Act. In addition, on or prior to the date on which the Issuer
makes any announcement to the general public concerning earnings or
concerning any other event which is required to be described, or which the
Issuer proposes to describe, in a document filed pursuant to the Exchange
Act, the Issuer will furnish the information contained or to be contained
in such announcement to each Distributor, confirmed in writing and,
subject to the provisions of subsections (a) and (b) of this Section, will
cause the Prospectus to be amended or supplemented to reflect the
information contained in such announcement. The Issuer also will,
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at the request of a Distributor, furnish such Distributor with copies of
press releases or announcements to the general public. The Issuer will
immediately notify each Distributor of any downgrading in the rating of
any debt securities of the Issuer or any proposal to downgrade the rating
of any debt securities of the Issuer by any "nationally recognized
statistical rating organization" (as defined for purposes of Rule 436(g)
under the Act), or any public announcement that any such organization has
under surveillance or review its rating of any debt securities of the
Issuer (other than an announcement with positive implications of a
possible upgrading, and no implication of a possible downgrading of such
rating), as soon as the Issuer learns of such downgrading, proposal to
downgrade or public announcement.
(d) As soon as practicable, but not later than 16 months, after the
date of each acceptance by the Issuer of an offer to purchase Securities
hereunder, the Issuer will make generally available to its securityholders
an earnings statement covering a period of at least 12 months beginning
after the later of (i) the effective date of the registration statement
relating to the Registered Securities, (ii) the effective date of the most
recent post-effective amendment to the Registration Statement to become
effective prior to the date of such acceptance and (iii) the date of the
Issuer's most recent Annual Report on Form 10-K filed with the Commission
prior to the date of such acceptance, which will satisfy the provisions of
Section 11(a) of the Act.
(e) The Issuer will furnish to each Distributor copies of the
Registration Statement, including all exhibits, any related preliminary
prospectus, any related preliminary prospectus supplement, the Prospectus
and all amendments and supplements to such documents (including any
Pricing Supplement), in each case as soon as available and in such
quantities as are reasonably requested.
(f) The Issuer will arrange for the qualification of the Securities
for sale and the determination of their eligibility for investment under
the laws of such jurisdictions within the United States as the
Distributors designate, and otherwise as the Distributors and the Issuer
may agree, and will continue such qualifications in effect so long as
required for the distribution.
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(g) So long as this Agreement shall be in effect, the Issuer will
furnish to the Distributors, (i) as soon as practicable after the end of
each fiscal year, a copy of its annual report to stockholders for such
year, (ii) as soon as available, a copy of each report or definitive proxy
statement of the Issuer filed with the Commission under the Exchange Act
or mailed to stockholders, and (iii) from time to time, such other
information concerning the Issuer as the Issuer and the Distributors may
reasonably agree. So long as any Securities are outstanding and
subsequent to the time that this Agreement shall be in effect, the Issuer
will furnish to the Distributors such copies of its annual report to
stockholders, and such reports or definitive proxy statements of the
Issuer filed with the Commission under the Exchange Act or mailed to
stockholders, as the Issuer and the Distributors may agree.
(h) The Issuer will pay all expenses incident to the performance of
its obligations under this Agreement and will reimburse each Distributor
for any reasonable expenses (including reasonable fees and disbursements
of counsel) incurred by it in connection with qualification of the
Securities for sale and determination of their eligibility for investment
under the laws of such jurisdictions as such Distributor may designate and
the printing of memoranda relating thereto, for any fees charged by
investment rating agencies for the rating of the Securities, for any
filing fee of the National Association of Securities Dealers, Inc.
relating to the Securities, for expenses incurred by each Distributor in
distributing the Prospectus and all supplements thereto (including any
Pricing Supplement), any preliminary prospectuses and any preliminary
prospectus supplements to such Distributor, for costs incurred by each
Distributor in advertising any offering of Securities and for each
Distributor's reasonable expenses (including the reasonable fees and
disbursements of Sullivan & Cromwell, counsel to the Distributors (or such
other counsel as the Issuer may approve)) incurred in connection with the
establishment or maintenance of the program contemplated by this Agreement
or otherwise in connection with the activities of the Distributors under
this Agreement (it being understood that expenses of a Distributor or
Distributors incurred subsequent to the establishment of the program
contemplated by this Agreement and otherwise than in connection with the
maintenance of such program shall be reimbursed by the Issuer only to the
extent agreed by the Issuer and such
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Distributor or Distributors prior to the incurrence of such expenses).
Between the date of a Terms Agreement and the date of delivery of
such Securities, the Issuer will not offer or sell, or enter into any agreement
to sell, any of its debt securities in the United States, other than sales of
Securities, borrowings under the Issuer's revolving credit agreements and lines
of credit, the private placement of securities and issuances of its commercial
paper.
5. Conditions of Obligations. The obligations of each Distributor,
as agent of the Issuer, under this Agreement at any time to solicit offers to
purchase the Securities and to purchase Securities from the Issuer as principal
is subject to accuracy, on the date hereof, on each Representation Date and on
the date of each such solicitation, of the representations and warranties of
the Issuer herein, to the accuracy, on each such date, of the statements of the
Issuer's officers as to matters of fact made pursuant to the provisions hereof,
to the performance, on or prior to each such date, by the Issuer of its
obligations hereunder, and to each of the following additional conditions
precedent:
(a) The Prospectus, as amended or supplemented as of any
Representation Date or date of such solicitation, as the case may be,
shall have been filed with the Commission in accordance with the Rules and
Regulations and no stop order suspending the effectiveness of the
Registration Statement or of any part thereof shall have been issued and
no proceedings for that purpose shall have been instituted or, to the
knowledge of the Issuer or any Distributor, shall be threatened by the
Commission.
(b) Neither the Registration Statement nor the Prospectus, as
amended or supplemented as of any Representation Date or date of such
solicitation, as the case may be, shall contain any untrue statement of
fact which, in the reasonable opinion of any Distributor, is material or
omits to state a fact which, in the reasonable opinion of any Distributor,
is material and is required to be stated therein or is necessary to make
the statements therein not misleading.
(c) There shall not have occurred (i) any change, or any development
involving a prospective change, in or affecting particularly the business
or properties of the Issuer or its subsidiaries which, in the reasonable
judgment of such Distributor, materially impairs the
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investment quality of the Securities, (ii) any downgrading in the rating
of any debt securities of the Issuer by any "nationally recognized
statistical rating organization" (as defined for purposes of Rule 436(g)
under the Act), or any public announcement that any such organization has
under surveillance or review its rating of any debt securities of the
Issuer (other than an announcement with positive implications of a
possible upgrading, and no implication of a possible downgrading, of such
rating); (iii) any suspension or limitation of trading in securities
generally on the New York Stock Exchange, or any setting of minimum prices
for trading on such exchange, or any suspension of trading of any
securities of the Issuer on any exchange or in the over-the-counter
market; (iv) any banking moratorium declared by Federal or New York
authorities; or (v) any outbreak or escalation of major hostilities in
which the United States is involved, any declaration of war by Congress or
any other substantial national or international calamity or emergency if,
in the reasonable judgment of such Distributor, the effect of any such
outbreak, escalation, declaration, calamity or emergency makes it
impractical or inadvisable to proceed with solicitations of offers to
purchase, or sales of, Securities.
(d) At the Closing Date and, if specified in a Terms Agreement, if
any, at the time of delivery of the Securities described in such Terms
Agreement, the Distributors or the Distributor purchasing such Securities
(the "Purchasing Distributor"), as the case may be, shall have received an
opinion or opinions, dated the Closing Date, or such date of delivery, as
the case may be, of the General Counsel of the Issuer, or of any Associate
General Counsel or Assistant General Counsel of the Issuer, to the effect
that:
(i) The Issuer has been duly incorporated and is an existing
corporation in good standing under the laws of the State of Delaware,
with corporate power and authority to own its properties and conduct
its business as described in the Prospectus; and the Issuer is duly
qualified to do business as a foreign corporation in good standing in
all other jurisdictions in which the conduct of its business requires
such qualification;
(ii) The Indenture has been duly authorized, executed and
delivered by the Issuer and has been duly qualified under the Trust
Indenture Act and constitutes a valid and legally binding obligation
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of the Issuer enforceable in accordance with its terms, subject to
bankruptcy, insolvency, fraudulent transfer, reorganization,
moratorium and similar laws of general applicability relating to or
affecting creditors' rights and to general equity principles;
(iii) Any series of Securities established on or prior to date of
such opinion has been duly authorized and established in conformity
with the Indenture, and, when the terms of a particular Security and
of its issuance and sale have been duly authorized and established by
all necessary corporate action in conformity with the Indenture, and
such Security has been duly completed, executed, authenticated and
issued in accordance with the Indenture and delivered against payment
as contemplated by this Agreement, such Security will constitute a
valid and legally binding obligation of the Issuer enforceable in
accordance with its terms, subject to bankruptcy, insolvency,
fraudulent transfer, reorganization, moratorium and similar laws of
general applicability relating to or affecting creditors' rights and
to general equity principles, it being understood that such counsel
may (a) assume that at the time of the issuance, sale and delivery of
each Security the authorization of such series will not have been
modified or rescinded and there will not have occurred any change in
law affecting the validity, legally binding character or
enforceability of such Security, (b) assume that neither the
issuance, sale and delivery of any Security, nor any of terms of such
Security, nor compliance by the Issuer with such terms, will violate
any applicable law, any agreement or instrument then binding upon the
Issuer or any restriction imposed by any court or governmental body
having jurisdiction over the Issuer, and (c) state that as of the
date of such opinion a judgment for money in an action based on
Securities denominated in foreign currencies or currency units in
Federal or State court in the United States ordinarily would be
enforced in the United States only in United States dollars, and that
the date used to determine the rate of conversion of the foreign
currency or currency unit in which a particular Security is
denominated into United States dollars will depend upon various
factors, including which court renders the judgment;
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(iv) The Registration Statement has become effective under the
Act, the Prospectus was filed with the Commission pursuant to the
subparagraph of Rule 424(b) under the Act specified in such opinion
on the date specified therein, and, to the best of the knowledge of
such counsel, no stop order suspending the effectiveness of the
Registration Statement or of any part thereof has been issued and no
proceedings for that purpose have been instituted or are pending or
threatened under the Act, and the registration statement relating to
the Registered Securities, as of its effective date, the Registration
Statement and the Prospectus, as of the Closing Date, and any
amendment or supplement thereto, as of its date, complied as to form
in all material respects with the requirements of the Act, the Trust
Indenture Act and the Rules and Regulations; such counsel has no
reason to believe that such registration statement as of its
effective date, the Registration Statement or the Prospectus, as of
the Closing Date, or any such amendment or supplement, as of its
date, contained any untrue statement of a material fact or omitted to
state any material fact required to be stated therein or necessary to
make the statements therein not misleading; the descriptions in the
Registration Statement and Prospectus of statutes, legal and
governmental proceedings and contracts and other documents are
accurate and fairly present the information required to be described;
and such counsel do not know of any legal or governmental proceedings
required to be described in the Prospectus which are not described as
required or of any contracts or documents of a character required to
be described in the Registration Statement or the Prospectus or to be
filed as exhibits to the Registration Statement which are not
described and filed as required; it being understood that such
counsel need express no opinion as to the financial statements or
other financial data contained in the Registration Statement or the
Prospectus;
(v) No consent, approval, authorization or order of, or filing
with, any governmental agency or body or any court is required for
the consummation of the transactions contemplated by this Agreement
in connection with the issuance and sale of the Securities by the
Issuer, except such as have been obtained under the Act and the Trust
Indenture Act, and as may be required under state
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securities laws (it being understood that such counsel may assume
with respect to each particular Security that the inclusion of any
alternative or additional terms in such Security that are not
currently specified in the forms of Securities examined by such
counsel would not require the Issuer to obtain any regulatory
consent, authorization or approval or make any regulatory filing in
order for the Issuer to issue, sell and deliver such Security);
(vi) The execution, delivery and performance of the Indenture,
this Agreement and the issuance and sale of the Securities, and
compliance with the terms and provisions thereof, will not result in
a breach or violation of any of the terms and provisions of, or
constitute a default under, any statute, any rule, regulation or
order of any governmental agency or body or any court having
jurisdiction over the Issuer or any subsidiary of the Issuer or any
of their properties or any agreement or instrument to which the
Issuer or any such subsidiary is a party or by which the Issuer or
any such subsidiary is bound or to which any of the properties of the
Issuer or any such subsidiary is subject, or the charter or by-laws
of the Issuer or any such subsidiary, and the Issuer has full power
and authority to authorize, issue and sell the Securities as
contemplated by this Agreement (it being understood that such counsel
may assume with respect to each particular Security that the
inclusion of any alternative or additional terms in such Security
that are not currently specified in the forms of Securities examined
by such counsel will not cause the issuance, sale or delivery of such
Security, the terms of such Security, or the compliance by the
Company with such terms, to violate any of the court orders or laws
specified in this paragraph or to result in a default under or a
breach of any of the agreements specified in this paragraph); and
(vii) This Agreement has been duly authorized, executed and
delivered by the Issuer;
provided, however, that, in the case of each such opinion delivered pursuant to
a Terms Agreement, (x) the statements contained in such opinion relating to the
Registration Statement or the Prospectus shall relate to the Registration
Statement or the Prospectus, as the case may be, as amended or supplemented as
of the date of the Issuer's acceptance of
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<PAGE> 15
the offer to purchase such Securities and as of the time of delivery of such
Securities; (y) such opinion shall relate to the Securities being delivered on
the date of such opinion and not to other Securities as well; and (z) in lieu
of the opinion described in clause (iii), such opinion shall state that the
Securities being delivered on the date of such opinion, when delivered against
payment therefor as contemplated by this Agreement, will have been duly
executed, authenticated, issued and delivered and will constitute valid and
legally binding obligations of the Issuer enforceable in accordance with their
terms, subject only to the exceptions set forth in clause (iii) as to
bankruptcy, insolvency, fraudulent transfer, reorganization, moratorium and
similar laws of general applicability relating to or affecting creditors'
rights and general equity principles, and will conform to the description
thereof contained in the Prospectus as amended or supplemented at such date of
delivery.
In the opinion, dated the Closing Date or such date of delivery, such
counsel may state that such opinion is limited to the Federal laws of the
United States, the laws of the Commonwealth of Pennsylvania and the General
Corporation Law of the State of Delaware, and that such counsel expresses no
opinion as to the effect of the laws of any other jurisdiction.
(e) At the Closing Date and, if specified in a Terms Agreement, if
any, at the time of delivery of the Securities described in such Terms
Agreement, the Distributors, or the Purchasing Distributor, as the case
may be, shall have received a certificate dated the Closing Date or such
date of delivery, as the case may be, of the Chairman, any Vice Chairman,
the Chief Executive Officer, the Chief Operating Officer, the President or
any Vice President and a principal financial or accounting officer of the
Issuer in which such officers, to the best of their knowledge after
reasonable investigation, shall state that (i) the representations and
warranties of the Issuer in this Agreement are true and correct, (ii) the
Issuer has complied with all agreements and satisfied all conditions on
its part to be performed or satisfied hereunder at or prior to the Closing
Date or such date of delivery, as the case may be, (iii) no stop order
suspending the effectiveness of the Registration Statement or of any part
thereof has been issued and no proceedings for that purpose have been
instituted or threatened by the Commission, and (iv) subsequent to the
date of the most recent financial statements in the Prospectus, there has
been no material adverse change, and no development which is likely to
result in a
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<PAGE> 16
material adverse change, in the financial position or results of
operations of the Issuer and its subsidiaries, except as set forth in or
contemplated by the Prospectus or as described in such certificate. In
the case of each such certificate delivered pursuant to a Terms Agreement,
the statements contained in such certificate relating to the Registration
Statement or the Prospectus shall relate to the Registration Statement or
the Prospectus, as the case may be, as amended or supplemented as of the
date of the Issuer's acceptance of the offer to purchase such Securities
and as of the time of delivery of such Securities.
(f) At the Closing Date and, if specified in a Terms Agreement, if
any, at the time of delivery of the Securities described in such Terms
Agreement, the Distributors, or the Purchasing Distributor, as the case
may be, shall have received a letter, dated the Closing Date or such date
of delivery, as the case may be, of Price Waterhouse (or of such other
independent public accountants as may be acting as independent public
accountant to the Issuer at such time), confirming that they are
independent public accountants within the meaning of the Act and the
applicable published Rules and Regulations thereunder and stating in
effect that:
(i) in their opinion, the financial statements and schedules
examined by them and included in the prospectus contained in the
Registration Statement comply as to form in all material respects
with the applicable accounting requirements of the Act and the
Securities Exchange Act of 1934, as amended, and the related
published Rules and Regulations;
(ii) they have made a review of any unaudited financial
statements included or incorporated by reference in the Prospectus in
accordance with standards established by the American Institute of
Certified Public Accountants;
(iii) on the basis of the review referred to in (ii) above and a
reading of the latest available interim financial statements of the
Issuer, inquiries of officials of the Issuer who have responsibility
for financial and accounting matters and other specified procedures,
nothing came to their attention that caused them to believe that:
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<PAGE> 17
(A) any material modifications should be made to the
unaudited interim financial statements included or incorporated
by reference in the Registration Statement for them to be in
conformity with generally accepted accounting principles;
(B) the unaudited interim financial statements included
or incorporated by reference in the Registration Statement do
not comply as to form in all material respects with the
applicable accounting requirements of the Act and the related
published Rules and Regulations;
(C) at the date of the latest available balance sheet
read by such accountants, or at a subsequent specified date not
more than five days prior to the Closing Date, there was any
change in the capital stock or any increase in the sum of
short-term indebtedness and long-term debt of the Issuer and
consolidated subsidiaries, as compared with amounts shown on the
latest balance sheet included in the Prospectus; or
(D) for the period from the date of the latest income
statement included in the Prospectus to the closing date of the
latest available income statement read by such accountants there
were any decreases, as compared with the corresponding period of
the previous year, in consolidated net sales of the Issuer;
except in all cases set forth in clauses (C) and (D) above for changes,
increases or decreases which the Prospectus discloses have occurred or may
occur or which are described in such letter; and
(iv) they have compared specified dollar amounts (or percentages
derived from such dollar amounts) and other financial information
contained in the Prospectus (in each case to the extent that such
dollar amounts, percentages and other financial information are
derived from the general accounting records of the Issuer and its
subsidiaries subject to the internal controls of the Issuer's
accounting system or are derived directly from such records by
analysis or computation) with the results obtained from inquiries, a
reading of such general accounting
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<PAGE> 18
records and other procedures specified in such letter and have found
such dollar amounts, percentages and other financial information to
be in agreement with such results, except as otherwise specified in
such letter.
All financial statements and schedules included in material
incorporated by reference into the Prospectus shall be deemed included in
the Prospectus for purposes of this subsection.
In the case of each such letter delivered pursuant to a Terms
Agreement, the statements contained in such letter relating to the
Registration Statement or the Prospectus shall relate to the Registration
Statement or the Prospectus, as the case may be, as amended or
supplemented as of the date of the Issuer's acceptance of the offer to
purchase such Securities and as of the time of delivery of such
Securities.
(g) At the Closing Date and, if specified in a Terms Agreement, if
any, at the time of delivery of the Securities described in such Terms
Agreement, the Distributors, or the Purchasing Distributor, as the case
may be, shall have received from Sullivan & Cromwell, counsel for the
Distributors, such opinion or opinions, dated the Closing Date or such
date of delivery, as the case may be, with respect to the incorporation of
the Issuer, the validity of the Securities, the Registration Statement,
the Prospectus and other related matters as they may require, and the
Issuer shall have furnished to such counsel such documents as they request
for the purpose of enabling them to pass upon such matters.
The Issuer will furnish the Distributors with such conformed copies
of such opinions, certificates, letters and documents as they reasonably
request.
6. Additional Covenants of the Issuer. The Issuer agrees that:
(a) Each acceptance by the Issuer of an offer for the purchase of
Securities shall be deemed to be an affirmation that its representations
and warranties contained in this Agreement are true and correct at the
time of such acceptance and a covenant that such representations and
warranties will be true and correct at the time of delivery to the
purchaser of the Securities as though made at and as of each such time, it
being understood that such representations and warranties shall relate to
the Registration Statement
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<PAGE> 19
and the Prospectus as amended or supplemented at each such time. Each
such acceptance by the Issuer of an offer to purchase Securities shall be
deemed to constitute an additional representation, warranty and agreement
by the Issuer that, as of the date of delivery of such Securities to the
purchaser thereof, after giving effect to the issuance of such Securities,
of any other Securities to be issued on or prior to such delivery date and
of any other Registered Securities to be issued and sold by the Issuer on
or prior to such delivery date, the aggregate amount of Registered
Securities (including any Securities) which have been issued and sold by
the Issuer will not exceed the amount of Registered Securities registered
pursuant to the Registration Statement.
(b) Each time that the Registration Statement or the Prospectus
shall be amended or supplemented (other than by a Pricing Supplement), the
Issuer shall, (A) concurrently with such amendment or supplement, if such
amendment or supplement shall occur at a Marketing Time, or (B)
immediately at the next Marketing Time if such amendment or supplement
shall not occur at a Marketing Time, furnish the Distributors with a
certificate, dated the date of delivery thereof, of the Chairman, any Vice
Chairman, the Chief Executive Officer, the Chief Operating Officer, the
President or any Vice President and a principal financial or accounting
officer of the Issuer, in form satisfactory to the Distributors, to the
effect that the statements contained in the certificate covering the
matters set forth in Section 5(e) hereof which was last furnished to the
Distributors pursuant to this Section 6(b) are true and correct at the
time of such amendment or supplement, as though made at and as of such
time or, in lieu of such certificate, a certificate of the same tenor as
the certificate referred to in Section 5(e); provided, however, that any
certificate furnished under this Section 6(b) shall relate to the
Registration Statement and the Prospectus as amended or supplemented at
the time of delivery of such certificate and, in the case of the matters
set forth in clause (ii) of Section 5(e), to the time of delivery of such
certificate.
(c) At each Representation Date referred to in Section 6(b), the
Issuer shall, (A) concurrently if such Representation Date shall occur at
a Marketing Time, or (B) immediately at the next Marketing Time if such
Representation Date shall not occur at a Marketing Time, furnish the
Distributors with a written opinion or opinions, dated the date of such
Representation
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<PAGE> 20
Date, of counsel for the Issuer identified in Section 5(d) hereof, in form
satisfactory to the Distributors, to the effect set forth in Section 5(d)
hereof; provided, however, that to the extent appropriate such opinion or
opinions may reconfirm matters set forth in a prior opinion delivered at
the Closing Date or under this Section 6(c); provided further, however,
that any opinion or opinions furnished under this Section 6(c) shall
relate to the Registration Statement and the Prospectus as amended or
supplemented at such Representation Date and shall state that the
Securities sold in the relevant Applicable Period (as defined below) have
been duly executed, authenticated, issued and delivered and constitute
valid and legally binding obligations of the Issuer enforceable in
accordance with their terms, subject only to the exceptions set forth in
clause (iii) of Section 5(d) hereof as to bankruptcy, insolvency,
fraudulent transfer, reorganization, moratorium and similar laws of
general applicability relating to or affecting creditors' rights and
general equity principles, and conform in all material respects to the
description thereof contained in the Prospectus as amended or supplemented
at the relevant date or dates for the delivery of such Securities to the
purchaser or purchasers thereof. For the purposes of this Section 6(c),
"Applicable Period" shall mean with respect to any opinion delivered on a
Representation Date the period commencing on the date as of which the most
recent prior opinion delivered at the Closing Date or under this Section
6(c) speaks and ending on such Representation Date.
(d) At each Representation Date referred to in Section 6(b) on which
the Registration Statement or the Prospectus shall be amended or
supplemented to include additional financial information, the Issuer shall
cause Price Waterhouse, (A) concurrently if such Representation Date shall
occur at a Marketing Time, or (B) immediately at the next Marketing Time
if such Representation Date shall not occur at a Marketing Time, to
furnish the Distributors with a letter, addressed jointly to the Issuer
and the Distributors and dated the date of such Representation Date, in
form and substance satisfactory to the Distributors, to the effect set
forth in Section 5(f) hereof; provided, however, that to the extent
appropriate such letter may reconfirm matters set forth in a prior letter
delivered at the Closing Date or pursuant to this Section 6(d); provided
further, however, that any letter furnished under this Section 6(d) shall
relate to the Registration Statement and the Prospectus as amended or
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<PAGE> 21
supplemented at such Representation Date, with such changes as may be
necessary to reflect changes in the financial statements and other
information derived from the accounting records of the Issuer.
(e) On each date for the delivery of Securities to the purchaser
thereof, the Issuer shall, if requested by the Distributor that solicited
or received the offer to purchase any Securities being delivered on such
settlement date, furnish such Distributor with a written opinion or
opinions, dated the date of delivery thereof, of counsel for the Issuer,
in form satisfactory to such Distributor, to the effect set forth in
clauses (i), (ii) and (iii) of Section 5(d) hereof; provided, however,
that any opinion furnished under this Section 6(e) shall relate to the
Prospectus as amended or supplemented at such delivery date and shall
state that the Securities being sold by the Issuer on such delivery date,
when delivered against payment therefor as contemplated by this Agreement,
will have been duly executed, authenticated, issued and delivered and will
constitute valid and legally binding obligations of the Issuer enforceable
in accordance with their terms, subject only to the exceptions set forth
in clause (iii) of Section 5(d) hereof as to bankruptcy, insolvency,
fraudulent transfer, reorganization, moratorium and similar laws of
general applicability relating to or affecting creditors' rights and
general equity principles, and will conform to the description thereof
contained in the Prospectus as amended or supplemented at such settlement
date.
(f) The Issuer agrees that any obligation of a person who has agreed
to purchase Securities to make payment for and take delivery of such
Securities shall be subject to (i) the accuracy, on the related settlement
date fixed pursuant to the Procedures, of the Issuer's representation and
warranty deemed to be made to the Distributors pursuant to the last
sentence of subsection (a) of this Section 6, and (ii) the satisfaction,
on such settlement date, of each of the conditions set forth in Sections
5(a), (b) and (c) it being understood that under no circumstance shall any
Distributor have any duty or obligation to exercise the judgment permitted
under Section 5(b) or (c) on behalf of any such person.
7. Indemnification and Contribution.
(a) The Issuer will indemnify and hold harmless each Distributor
against any losses, claims, damages or liabilities, joint or several, to
which such
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Distributor may become subject, under the Act or otherwise, insofar as
such losses, claims, damages or liabilities (or actions in respect
thereof) arise out of or are based upon any untrue statement or alleged
untrue statement of any material fact contained in the Registration
Statement, the Prospectus, or any amendment or supplement thereto, or any
related preliminary prospectus or preliminary prospectus supplement, or
the omission or alleged omission to state therein a material fact required
to be stated therein or necessary to make the statements therein not
misleading, and will reimburse each Distributor for any legal or other
expenses reasonably incurred by such Distributor in connection with
investigating or defending any such loss, claim, damage, liability or
action as such expenses are incurred; provided, however, that the Issuer
will not be liable to such Distributor in any such case to the extent that
any such loss, claim, damage or liability arises out of or is based upon
an untrue statement or alleged untrue statement or omission or alleged
omission made in any of such documents in reliance upon and in conformity
with written information furnished to the Issuer by such Distributor
specifically for use therein, unless such loss, claim, damage or liability
arises out of the offer or sale of Securities occurring after the
Distributor has notified the Issuer in writing that such information
should no longer be used therein.
(b) Each Distributor will indemnify and hold harmless the Issuer
against any losses, claims, damages or liabilities to which the Issuer may
become subject, under the Act or otherwise, insofar as such losses,
claims, damages or liabilities (or actions in respect thereof) arise out
of or are based upon any untrue statement or alleged untrue statement of
any material fact contained in the Registration Statement, the Prospectus
or any amendment or supplement thereto, or any related preliminary
prospectus or preliminary prospectus supplement, or arise out of or are
based upon the omission or the alleged omission to state therein a
material fact required to be stated therein or necessary to make the
statements therein not misleading, in each case to the extent, but only to
the extent, that such untrue statement or alleged untrue statement or
omission or alleged omission was made in reliance upon and in conformity
with written information furnished to the Issuer by such Distributor
specifically for use therein, and will reimburse any legal or other
expenses reasonably incurred by the Issuer in connection with
investigating or defending any such loss, claim, damage, liability or
action as
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such expenses are incurred, unless such loss, claim, damage or liability
arises out of the offer or sale of Securities occurring after the
Distributor has notified the Issuer in writing that such information
should no longer be used therein.
(c) Promptly after receipt by an indemnified party under this
Section 7 of notice of the commencement of any action, such indemnified
party will, if a claim in respect thereof is to be made against the
indemnifying party under subsection (a) or (b) above, notify the
indemnifying party of the commencement thereof; but the omission so to
notify the indemnifying party will not relieve it from any liability which
it may have to any indemnified party otherwise than under subsection (a)
or (b) above. In case any such action is brought against any indemnified
party, and it notifies the indemnifying party of the commencement thereof,
the indemnifying party will be entitled to participate therein and, to the
extent that it may wish, jointly with any other indemnifying party
similarly notified, to assume the defense thereof, with counsel
satisfactory to such indemnified party (who shall not, except with the
consent of the indemnified party, be counsel to the indemnifying party),
and after notice from the indemnifying party to such indemnified party of
its election so to assume the defense thereof, the indemnifying party will
not be liable to such indemnified party under this Section 7 for any legal
or other expenses subsequently incurred by such indemnified party in
connection with the defense thereof other than reasonable costs of
investigation.
(d) If the indemnification provided for in this Section 7 is
unavailable or insufficient to hold harmless an indemnified party under
subsection (a) or (b) above, then each indemnifying party shall contribute
to the amount paid or payable by such indemnified party as a result of the
losses, claims, damages or liabilities referred to in subsection (a) or
(b) above (i) in such proportion as is appropriate to reflect the relative
benefits received by the Issuer on the one hand and any Distributor on the
other from the offering pursuant to this Agreement of the Securities which
are the subject of the action or (ii) if the allocation provided by clause
(i) above is not permitted by applicable law, in such proportion as is
appropriate to reflect not only the relative benefits referred to in
clause (i) above but also the relative fault of the Issuer on the one hand
and any Distributor on the other in connection with the statements or
omissions which resulted in such losses, claims,
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damages or liabilities as well as any other relevant equitable
considerations. The relative benefits received by the Issuer on the one
hand and any Distributor on the other shall be deemed to be in the same
proportions as the total net proceeds from the offering pursuant to this
Agreement of the Securities which are the subject of the action (before
deducting expenses) received by the Issuer bear to the total discounts and
commissions received by such Distributor from the offering of such
Securities pursuant to this Agreement. The relative fault shall be
determined by reference to, among other things, whether the untrue or
alleged untrue statement of a material fact or the omission or alleged
omission to state a material fact relates to information supplied by the
Issuer or such Distributor and the parties' relative intent, knowledge,
access to information and opportunity to correct or prevent such untrue
statement or omission. The amount paid by an indemnified party as a
result of the losses, claims, damages or liabilities referred to in the
first sentence of this subsection (d) shall be deemed to include any legal
or other expenses reasonably incurred by such indemnified party in
connection with investigating or defending any action or claim which is
the subject of this subsection (d). Notwithstanding the provisions of
this subsection (d), no Distributor shall be required to contribute any
amount in excess of the amount by which the total price at which the
Securities which are the subject of the action and which were distributed
to the public through it pursuant to this Agreement or upon resale of
Securities purchased by it from the Issuer exceeds the amount of any
damages which such Distributor has otherwise been required to pay by
reason of such untrue or alleged untrue statement or omission or alleged
omission. No person guilty of fraudulent misrepresentation (within the
meaning of Section 11(f) of the Act) shall be entitled to contribution
from any person who was not guilty of such fraudulent misrepresentation.
The obligations of each Distributor in this subsection (d) to contribute
are several, in the same proportion which the amount of the Securities
which are the subject of the action and which were distributed to the
public through such Distributor pursuant to this Agreement bears to the
total amount of such Securities distributed to the public through all of
the Distributors pursuant to this Agreement, and not joint.
(e) The obligations of the Issuer under this Section 7 shall be in
addition to any liability which the Issuer may otherwise have and shall
extend, upon
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the same terms and conditions, to each person, if any, who controls each
Distributor within the meaning of the Act; and the obligations of each
Distributor under this Section 7 shall be in addition to any liability
which each Distributor may otherwise have and shall extend, upon the same
terms and conditions, to each director of the Issuer, to each officer of
the Issuer who has signed the Registration Statement and to each person,
if any, who controls the Issuer within the meaning of the Act.
8. Status of Each Distributor. In soliciting offers to purchase the
Securities from the Issuer pursuant to this Agreement and in assuming its other
obligations hereunder (other than any obligation to purchase Securities
pursuant to Section 3 hereof), each Distributor is acting individually and not
jointly and is acting solely as agent for the Issuer and not as principal. In
connection with the placement of any Securities by a Distributor, acting as
agent, (a) each Distributor will make all reasonable efforts to assist the
Issuer in obtaining performance by each purchaser whose offer to purchase
Securities from the Issuer has been solicited by such Distributor and accepted
by the Issuer, but such Distributor shall have no liability to the Issuer in
the event any such purchase is not consummated for any reason; and (b) if the
Issuer shall default on its obligations to deliver Securities to a purchaser
whose offer it has accepted, the Issuer (i) shall hold the Distributors
harmless against any loss, claim or damage arising from or as a result of such
default by the Issuer, and (ii) in particular, shall pay to the Distributors
any commission to which they would be entitled in connection with such sale.
9. Survival of Certain Representations and Obligations. The
respective indemnities, agreements, representations, warranties and other
statements of the Issuer or its officers and of the Distributors set forth in
or made pursuant to this Agreement will remain in full force and effect,
regardless of any investigation, or statement as to the results thereof, made
by or on behalf of any Distributor, the Issuer or any of their respective
representatives, officers or directors or any controlling person and will
survive delivery of and payment for the Securities. If this Agreement is
terminated pursuant to Section 10 or for any other reason or if for any reason
the sale of Securities described in a confirmation or Terms Agreement referred
to in Section 3 by the Issuer to a Distributor is not consummated, the Issuer
shall remain responsible for the expenses to be paid or reimbursed by it
pursuant to Section 4(h) (except, in the case of a sale of Securities to a
Distributor as principal, the Issuer shall remain responsible for such expenses
only to the extent such
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<PAGE> 26
Distributor and Issuer shall have agreed in the confirmation or Terms Agreement
pertaining to such sale) and the obligations of the Issuer under Sections 4(d)
and 4(g) and the respective obligations of the Issuer and the Distributors
pursuant to Section 7 shall remain in effect. In addition, if any such
termination of this Agreement shall occur either (i) at a time when any
Distributor shall own any of the Securities with the intention of reselling
them or (ii) after the Issuer has accepted an offer to purchase Securities and
prior to the related settlement, the obligations of the Issuer under the second
sentence of Section 4(b), under Sections 4(a), 4(c), 4(e), 4(f) and 4(h) and,
in the case of a termination occurring as described in (ii) above, under
Sections 3(c), 6(a), 6(e) and 6(f) and under the last sentence of Section 8,
shall also remain in effect.
10. Termination. This Agreement may be terminated for any reason at
any time by the Issuer as to any Distributor or by such Distributor insofar as
this Agreement relates to such Distributor, upon the giving of one day's
written notice of such termination to the other parties hereto; provided,
however, that this Agreement may not be terminated with respect to a
Distributor by the giving of such notice following receipt by the Issuer of a
confirmation or Terms Agreement referred to in Section 3 relating to the
purchase of Securities by such Distributor and prior to delivery of the
Securities described in such confirmation or Terms Agreement, unless the sale
and purchase of Securities contemplated thereby is rejected by the Issuer in
accordance with Section 3. Any settlement with respect to Securities placed by
a Distributor on an agency basis occurring after termination of this Agreement
shall be made in accordance with the Procedures and each Distributor agrees, if
requested by the Issuer, to take the steps therein provided to be taken by such
Distributor in connection with such settlement.
11. Sales of Securities Denominated in a Currency other than U.S.
Dollars or of Indexed Securities. If at any time the Issuer and any of the
Distributors shall determine to issue and sell Securities denominated in a
currency other than U.S. dollars, which other currency may include a currency
unit, or with respect to which an index is used to determine the amounts of
payments of principal and any premium and interest, the Issuer and any such
Distributor may execute and deliver a supplement to this Agreement for the
purpose of making any appropriate additions to and modifications of the terms
of this Agreement (and the Procedures) applicable to such Securities and the
offer and sale thereof. The Distributors are authorized to solicit offers to
purchase Securities with respect to which an index
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<PAGE> 27
is used to determine the amounts of payments of principal and any premium and
interest, and the Issuer shall agree to any sales of such Securities (whether
offered on an agency or principal basis), only in a minimum aggregate amount of
$2,500,000.
12. Notices. Except as otherwise provided herein, all notices and
other communications hereunder shall be in writing and shall be deemed to have
been duly given if mailed or transmitted by any standard form of
telecommunication. Notices to CS First Boston Corporation shall be directed to
it at Park Avenue Plaza, New York, New York 10055, Attention: Mr. Joseph
Fashano; notices to Goldman, Sachs & Co. shall be directed to it at 85 Broad
Street, New York, New York 10004, Attention: Mr. Donald Hansen; notices to
Lehman Brothers Inc. shall be directed to it at Three World Financial Center,
New York, New York 10285, Attention: Medium-Term Notes Department; notices to
J.P. Morgan Securities Inc. shall be directed to it at 60 Wall Street, New
York, New York 10260, Attention: Medium-Term Notes; notices to Morgan Stanley &
Co. Incorporated shall be directed to it at 1251 Avenue of the Americas, New
York, New York 10020, Attention: Manager, Credit Department, with a copy to it
at 1221 Avenue of the Americas, New York, New York 10020, Attention: Managing
Director, Debt Syndicate; notices to Salomon Brothers Inc shall be directed to
it at Seven World Trade Center, New York, New York 10048, Attention:
Medium-Term Notes; and notices to the Issuer shall be directed to it at 600
Grant Street, Pittsburgh, Pennsylvania 15219, Attention: Corporate Finance
Department; or, in the case of any party hereto, to such other address or
person as such party shall specify to each other party by a notice given in
accordance with the provisions of this Section 12. Any such notice shall take
effect at the time of receipt.
13. Successors. This Agreement will inure to the benefit of and be
binding upon the parties hereto, their respective successors, the officers and
directors and controlling persons referred to in Section 9 and, to the extent
provided in Section 6(f), any person who has agreed to purchase Securities from
the Issuer, and no other person will have any right or obligation hereunder.
14. Governing Law; Counterparts. This Agreement shall be governed by
and construed in accordance with the laws of State of New York. This Agreement
may be executed in any number of counterparts, each of which shall be deemed to
be an original, but all such executed counterparts shall together constitute
one and the same Agreement.
-27-
<PAGE> 28
If the foregoing correctly sets forth our agreement, please indicate
your acceptance hereof in the space provided for that purpose below.
Very truly yours,
USX CORPORATION
By:
-----------------------
Name:
Title:
CONFIRMED AND ACCEPTED,
as of the date first
above written:
CS FIRST BOSTON CORPORATION
By:
-------------------------
Name:
Title:
- ----------------------------
(GOLDMAN, SACHS & CO.)
LEHMAN BROTHERS INC.
By:
-------------------------
Name:
Title:
J.P. MORGAN SECURITIES INC.
By:
-------------------------
Name:
Title:
-28-
<PAGE> 29
MORGAN STANLEY & CO. INCORPORATED
By:
-------------------------
Name:
Title:
SALOMON BROTHERS INC
By:
-------------------------
Name:
Title:
-29-
<PAGE> 1
Exhibit 4
[Form of Face of Security]
REGISTERED REGISTERED
USX CORPORATION
No. FXRA-___ MEDIUM-TERM NOTE,SERIES C CUSIP ________
(Fixed Rate)
[Insert if the Security is to be a Global Security -- This Security is a Global
Security within the meaning of the Indenture hereinafter referred to and is
registered in the name of a Depositary or a nominee of a Depositary. This
Security is exchangeable for Securities registered in the name of a Person
other than the Depositary or its nominee only in the limited circumstances
described in the Indenture, and may not be transferred except as a whole by the
Depositary to a nominee of the Depositary or by a nominee of the Depositary to
the Depositary or another nominee of the Depositary.
Unless this Certificate is presented by an authorized representative of The
Depository Trust Company (55 Water Street, New York, New York) to the issuer or
its agent for registration of transfer, exchange or payment, and any
certificate issued is registered in the name of Cede & Co. or such other name
as requested by an authorized representative of The Depository Trust Company
and any payment hereon is made to Cede & Co., ANY TRANSFER, PLEDGE OR OTHER USE
HEREOF FOR VALUE OR OTHERWISE BY OR TO ANY PERSON IS WRONGFUL since the
registered owner hereof, Cede & Co., has an interest herein.]
PRINCIPAL AMOUNT AND CURRENCY
OR CURRENCY UNIT:
DENOMINATIONS
(IF OTHER THAN U.S. DOLLARS OR THE U.S. DOLLAR
DENOMINATIONS SET FORTH ON THE REVERSE):
OPTION TO RECEIVE PAYMENTS IN EXCHANGE RATE AGENT:
SPECIFIED CURRENCY:
YES: ___ NO: ___
DATE OF ISSUE: STATED MATURITY OF SECURITY:
INTEREST RATE: COMPUTATION PERIOD:
INTEREST PAYMENT DATE(S): REGULAR RECORD DATE(S):
<PAGE> 2
REDEMPTION DATE(S): REDEMPTION PERCENTAGE(S):
REDEMPTION DATE(S) REDEMPTION PERCENTAGE(S)
(OPTION OF HOLDER): (OPTION OF HOLDER):
NOTICE PERIOD: (ORIGINAL ISSUE DISCOUNT SECURITY:)*
OTHER PROVISIONS:
USX CORPORATION, a corporation duly organized under the laws of the
State of Delaware (herein called the "Company", which term includes any
successor corporation under the Indenture hereinafter referred to), for value
received, hereby promises to pay to [INSERT IF THE SECURITY IS TO BE A GLOBAL
SECURITY -- Cede & Co., as nominee for The Depository Trust Company]
[________________________________________________________________], or
registered assigns, the principal amount specified above (any currency or
currency unit other than U.S. dollars being hereinafter referred to as a
"Specified Currency") on the Stated Maturity specified above and to pay
interest thereon (computed, unless a different Computation Period is specified
above, on the basis of a 360-day year of twelve 30-day months) from and
including the Date of Issue specified above (the "Date of Issue") or from and
including the most recent Interest Payment Date to which interest on this
Security (or any Predecessor Security) has been paid or duly provided for to,
but excluding, the Interest Payment Date, on the Interest Payment Date(s)
specified above in each year (each an "Interest Payment Date") and at Maturity,
at the rate per annum equal to the Interest Rate specified above, until the
principal hereof is paid or duly made available for payment; provided, however,
that, unless the Holder hereof is entitled to make, and has made, a Specified
Currency Payment Election (as hereinafter defined) with respect to one or more
such payments, the Company will make all such payments in U.S. dollars in
amounts determined as set forth on the reverse hereof. If any Interest Payment
Date or the Maturity shown on the face hereof falls on a day that is not a
Market Day, the related payment of principal, premium, if any, or interest will
be made on the next succeeding Market Day as if made on the date such payment
was due, and no interest will accrue on the amount so payable for the period
from and after such Interest Payment Date or Maturity, as the case may be. The
interest so payable, and punctually paid or duly provided for, on any Interest
Payment Date will, as provided in such Indenture, be paid to the Person in
whose name this Security (or one or more predecessor Securities) is registered
at the close of business on the fifteenth day next preceding such Interest
Payment Date, unless a different Regular Record Date is specified above (the
"Regular Record Date"); provided, however, that interest payable at Maturity
will be payable to the person to whom principal shall be payable; and provided,
further, that if the Date of Issue is after a Regular Record Date and before
the next succeeding Interest Payment Date the first
- ------------------------
* Include U.S. federal income tax original issue discount legend if and
when regulations require.
Note: This form of Security does not cover zero-coupon securities.
-2-
<PAGE> 3
payment of interest shall be payable on the second Interest Payment Date
following the Date of Issue to the person in whose name this Security (or one
or more Predecessor Securities) is registered at the close of business on the
Regular Record Date immediately preceding such Interest Payment Date. Any such
interest which is payable, but not so punctually paid or duly provided for, on
any Interest Payment Date will forthwith cease to be payable to the Holder on
such Regular Record Date and such Defaulted Interest may either be paid to the
Person in whose name this Security (or one or more Predecessor Securities) is
registered at the close of business on a Special Record Date for the payment of
such Defaulted Interest to be fixed by the Trustee, notice whereof shall be
given to Holders of Securities of this series not less than 15 days prior to
such Special Record Date, or be paid at any time in any other lawful manner not
inconsistent with the requirements of any securities exchange on which this
Security may be listed, and upon such notice as may be required by such
exchange, all as more fully provided in said Indenture.
Payment of the principal of (and premium, if any) and interest on this
Security will be made at the principal corporate trust office of the Issuing
and Paying Agent in the Borough of Manhattan, The City of New York, or such
other office or agency of the Company maintained by it for that purpose in the
Borough of Manhattan, The City of New York, in such coin or currency of the
United States of America as at the time of payment is legal tender for payment
of public and private debts; provided, however, that payment of the principal
of (and premium, if any) and interest on this Security due will be made in
immediately available funds at such corporate trust office or such other office
or agency if this Security is presented to the Paying Agent in time for the
Paying Agent to make such payments in such funds in accordance with its normal
procedures; and provided, further, that, at the option of the Company, payment
of interest (other than interest payable at Maturity) may be made by check
mailed to the address of the Holder as such address shall appear in the
Security Register; and provided, further, that if this Security is denominated
in a Specified Currency, the Holder hereof is entitled to make, and has made, a
Specified Currency Payment Election with respect to such payments, the Exchange
Rate Agent is able to convert such payments as provided below and the Specified
Currency is not unavailable due to the imposition of exchange controls or other
circumstances beyond the control of the Company, then (i) the payment of
interest on this Security will be made in the Specified Currency (or, if such
Specified Currency is not at the time of such payment legal tender for the
payment of public and private debts, in such other coin or currency of the
country which issued such Specified Currency as at the time of such payment is
legal tender for the payment of such debts) by check drawn upon a bank office
located outside the United States and mailed to the address of the Person
entitled thereto as such address shall appear in the Security Register, and
(ii) the payment of principal (and premium, if any) and interest due at
Maturity will be made in such Specified Currency (or, if applicable, such other
coin or currency) by wire transfer of immediately available funds to an account
maintained by the Holder hereof with a bank office located in the country which
issued the Specified Currency upon presentation of this Security to the Paying
Agent in time for such wire transfer to be made by the Paying Agent in
accordance with its normal procedures. Unless otherwise specified above, if
this Security is denominated in a Specified Currency the Holder hereof may
elect to receive payments of principal of (and premium, if any) and interest in
such Specified Currency (a "Specified Currency Payment Election") by delivery
of a written request (including, in the case of an election with respect to
payments at Maturity, appropriate wire transfer instructions to be received by
the Issuing and Paying Agent no later than the relevant Record Date) to the
Issuing and Paying Agent at its principal corporate trust office referred to
above on or prior to the relevant Regular Record Date or the sixteenth day
prior to Maturity, as the case may be. Such request may be in writing (mailed
or hand delivered) or by facsimile transmission. A Holder of a Security
denominated in a Specified Currency may elect to receive payment in the
Specified Currency for all principal (and premium, if any) and interest
payments and need not file a separate election for each payment. Such election
will remain in effect until revoked by written notice to the Issuing & Paying
Agent, but written notice of any
-3-
<PAGE> 4
such revocation must be received by the Issuing & Paying Agent on or prior to
the relevant Regular Record Date or the sixteenth day prior to Maturity, as the
case may be.
Reference is hereby made to the further provisions of this Security
set forth on the reverse hereof, which further provisions shall for all
purposes have the same effect as if set forth at this place.
Unless the certificate of authentication hereon has been executed by
the Trustee referred to on the reverse hereof by manual signature, this
Security shall not be entitled to any benefit under the Indenture or be valid
or obligatory for any purpose.
IN WITNESS WHEREOF, the Company has caused this instrument to be duly
executed by manual or facsimile signature under its corporate seal.
USX CORPORATION
[CORPORATE SEAL]
By
----------------------------
Name:
Title:
Attest:
- ---------------------------------
Dated: , 199
--------------------- -
TRUSTEE'S
CERTIFICATE OF
AUTHENTICATION
This is one of the Securities
of the Series designated
therein referred to in the
within-mentioned Indenture
PNC BANK, National Association, as Trustee
By THE FIRST NATIONAL BANK OF BOSTON,
as Issuing and Paying Agent
By
----------------------------------
Authorized Signatory
-4-
<PAGE> 5
[Form of Reverse of Security]
This Security is one of a duly authorized issue of securities of the
Company (herein called the "Securities"), issued and to be issued in one or
more series under the Indenture, dated as of March 15, 1993 (herein called the
"Indenture"), between the Company and PNC Bank, National Association, as
Trustee (herein called the "Trustee", which term includes any successor trustee
under the Indenture), to which Indenture and all indentures supplemental
thereto reference is hereby made for a statement of the respective rights,
limitations of rights, duties and immunities thereunder of the Company, the
Trustee and the Holders of the Securities and of the terms upon which the
Securities are, and are to be, authenticated and delivered. This Security is
one of the series designated on the face hereof, limited to an aggregate
principal amount not to exceed $750,000,000 (or if Securities of this series
are to be Original Issue Discount Securities or are to be denominated in one or
more Specified Currencies or with the amount payable in respect of principal or
any premium or interest to be determined by reference to the value, rate or
price of one or more specified indices ("Indexed Securities"), such principal
amount as shall result in an aggregate initial offering price of Securities
equivalent to not more than $750,000,000), which amount may be increased at the
option of the Company if in the future it determines that it may wish to sell
additional Securities, which may be offered or sold either in the United States
or outside the United States or both simultaneously. Except as may be
otherwise stated on the face hereof, the Securities of this series are issuable
only as registered Securities, without coupons, in denominations of $100,000
and integral multiples of $1,000 in excess thereof (or in the case of
Securities denominated in a Specified Currency, in such minimum denomination
not less than the equivalent of $100,000 in such Specified Currency on the
basis of the noon buying rate for cable transfers in The City of New York as
certified for customs purposes by (or, if not so certified, as otherwise
determined by) the Federal Reserve Bank of New York (the "Market Exchange
Rate") for such Specified Currency on the date the Company agrees to issue such
Security, and such greater denomination or denominations as shall be set forth
on the face thereof). The Securities of this series may be issued from time to
time in various principal amounts and currencies or currency units, may mature
at different times, may bear interest at different rates, may be subject to
different redemption provisions, if any, and may otherwise vary. As provided
in the Indenture and subject to certain limitations therein set forth,
Securities of this series are exchangeable for a like aggregate principal
amount of Securities of this series and of like tenor of a different authorized
denomination, as requested by the Holder surrendering the same.
The Securities are general, direct, unconditional and unsecured
obligations of the Company.
If this Security is designated on the face hereof as an Original Issue
Discount Security, then, notwithstanding anything to the contrary contained in
this Security, upon the redemption or acceleration of Maturity of this Security
there shall be payable, in lieu of the principal amount due at the Stated
Maturity hereof, as specified on the face hereof, an amount equal to the
Amortized Face Amount of this Security. The "Amortized Face Amount" shall be
the amount equal to (a) the issue price of this Security (as defined below),
plus (b) that portion of the difference between the issue price and the
principal amount of this Security that has been amortized at the Stated Yield
(as defined below) of this Security (computed in accordance with generally
accepted United States bond yield computation principles) at the date as of
which the Amortized Face Amount is calculated, but in no event shall the
Amortized Face Amount exceed the principal amount of this Security due at the
Stated Maturity hereof. As used in the previous sentence "issue price" means
the principal amount due at the Stated Maturity hereof less the Total Amount of
OID of this Security specified on the face hereof and the "Stated Yield" means
the Yield to Maturity specified on the face hereof (or if not so specified, the
yield to maturity compounded semi-annually and computed in accordance with
generally accepted United States bond yield computation principles) for the
period from the Date of Issue to the Stated Maturity on the basis of the issue
price and such principal amount.
-5-
<PAGE> 6
If this Security is denominated in a Specified Currency, unless the
Holder hereof is entitled to make, and has made, a Specified Currency Payment
Election with respect to such payments as provided on the face hereof, the
Holder of this Security shall receive payments of principal (and premium, if
any) and interest in U.S. dollars at an exchange rate based on the highest bid
quotation in The City of New York received by the Exchange Rate Agent (who,
unless otherwise specified on the face hereof, shall be the Issuing and Paying
Agent) at approximately 11:00 A.M., New York City time, on the second Market
Day with respect to this Security preceding the applicable payment date from
three recognized foreign exchange dealers (one of which may be the Exchange
Rate Agent) selected by the Exchange Rate Agent and approved by the Company for
the purchase by the quoting dealer of the Specified Currency for U.S. dollars
for settlement on such payment date in the aggregate amount of such Specified
Currency payable to all Holders of Securities of this series denominated in
such Specified Currency and scheduled to receive U.S. dollar payment on such
payment date and at which the applicable dealer commits to execute a contract.
"Market Day" means (a) with respect to any Security (unless otherwise provided
in this definition), any Business Day, (b) with respect to Securities that bear
interest on the basis of the London Interbank Offered Rate as determined from
time to time, any Business Day that is also a London Banking Day ("London
Banking Day" means any day on which dealings in deposits in U.S. dollars are
transacted in the London interbank market), (c) with respect to Securities
denominated in a Foreign Currency (other than Securities denominated in
European Currency Units ("ECUs")), any Business Day that, in the principal
financial center of the country of the Specified Currency, is not a day on
which banking institutions generally are authorized or obligated by law or
executive order to close and (d) with respect to Securities denominated in
ECUs, any Business Day that is also designated as an ECU settlement day by the
ECU Banking Association in Paris or otherwise generally regarded in the ECU
interbank market as a day in which payments in ECUs are made. All currency
exchange costs incurred by the Company in converting a Specified Currency into
U.S. dollars in order to make payments hereon will be borne by the Holder of
this Security by deductions from such payments. If such bid quotations are not
available, or if a Specified Currency Payment Election has been made with
respect to such payments, payments will be made in the Specified Currency (or,
if such Specified Currency is not at the time of such payment legal tender for
the payment of public and private debts, such other coin or currency of the
country which issued such Specified Currency as at the time of such payment is
legal tender for the payment of such debts); provided, however, that if such
Specified Currency (or, if applicable, such other coin or currency) is
unavailable due to the imposition of exchange controls or other circumstances
beyond the Company's control, the Company will be entitled to make payments in
U.S. dollars on the basis of the Market Exchange Rate for such Specified
Currency (or, if applicable, such other coin or currency) on the second Market
Day prior to such payment or, if such Market Exchange Rate is not then
available, on the basis of the most recently available Market Exchange Rate or
as otherwise indicated hereon.
If one or more Redemption Dates (or ranges of Redemption Dates) is
specified on the face hereof, this Security is subject to redemption upon not
less than 30 days' notice by mail, on any such date (or during any such range),
as a whole, or from time to time in part, at the election of the Company, at a
Redemption Price determined as provided in the next succeeding sentence,
together with accrued interest to the Redemption Date, but interest instalments
whose Stated Maturity is on or prior to the Redemption Date will be payable to
the Holder hereof (or one or more Predecessor Securities) of record at the
close of business on the Regular Record Dates referred to on the face hereof,
all as provided in the Indenture. If applicable, the "Redemption Price" for
any such redemption shall be the amount determined by multiplying the
Redemption Percentage specified on the face hereof with respect to the relevant
Redemption Date (or range of such dates), by the portion of the principal
amount hereof (or, if this Security is an Original Issue Discount Security, the
portion of the Amortized Face Amount hereof) to be redeemed; provided, however,
that in no event shall the Redemption Price be less than 100% of the portion of
the principal amount hereof (or, if
-6-
<PAGE> 7
this Security is an Original Issue Discount Security, the portion of the
Amortized Face Amount hereof) to be redeemed.
Notice of redemption having been given as aforesaid, this Security (or
the portion of the principal amount hereof so to be redeemed) shall, on the
Redemption Date, become due and payable at the Redemption Price herein
specified, and from and after such date (unless the Company shall default in
the payment of the Redemption Price and accrued interest) shall cease to bear
interest. In the case of any partial redemption at the election of the Company
of Securities of this series, the Securities of a particular tenor to be
redeemed shall be selected by the Trustee not more than 45 days prior to the
Redemption Date by such method as the Trustee shall deem fair and appropriate
and which may provide for the selection for redemption of portions of the
principal amount of Securities. In the event of any redemption of this
Security in part only, a new Security or Securities of this series of like
tenor for the unredeemed portion hereof will be issued in the name of the
Holder hereof upon the cancellation hereof, provided that such unredeemed
portion shall not be less than the minimum denomination of this Security.
If one or more Redemption Dates (Option of Holder) (or ranges of such
dates) is specified on the face hereof, this Security is subject to redemption
on any such date (or during any such range) or, if such date is not a Market
Day, on the first Market Day following such date, as a whole or from time to
time in part, at the election of the Holder hereof, at a Redemption Price
determined as provided above together with accrued interest to the Redemption
Date, but interest instalments whose Stated Maturity is on or prior to the
Redemption Date will be payable to the Holder hereof of record at the close of
business on the Regular Record Date referred to on the face hereof, all as
provided in the Indenture. Such election shall be effected by the Holder
hereof delivering to the Company at the principal corporate trust office of the
Issuing & Paying Agent in the Borough of Manhattan, The City of New York, or
such other office or agency of the Company maintained by it for that purpose in
the Borough of Manhattan, The City of New York, not less than 30 nor more than
60 days prior to the date on which this Security is to be redeemed, or during
such other Notice Period specified on the face hereof, a notice requesting such
redemption in the form described below and specifying the date upon which this
Security is to be redeemed. Any notice given by a Holder pursuant to this
paragraph shall consist of either (i) this Security with the form entitled
"Option to Elect Redemption" set forth at the end of this Security duly
completed or (ii) a telegram, facsimile transmission or a letter from a member
of a national securities exchange, or the National Association of Securities
Dealers, Inc. or a commercial bank or trust company in the United States
setting forth the name of the Holder hereof, the principal amount of this
Security, the principal amount of this Security to be redeemed, the certificate
number or a description of the terms of this Security, a statement that the
option to elect redemption is being exercised thereby and a guarantee that this
Security, together with the duly completed form entitled "Option to Elect
Redemption" below, will be received by the Issuing & Paying Agent not later
than the fifth Market Day after the date of such telegram, facsimile
transmission or letter; provided, however, that such telegram, facsimile
transmission or letter shall only be effective if this Security and form duly
completed are received by such Issuing & Paying Agent by such fifth Business
Day. Exercise of the redemption option by the Holder hereof will be
irrevocable. If applicable, the "Redemption Price" for any such redemption
shall be determined by multiplying the Redemption Percentage (Option of Holder)
specified on the face hereof with respect to the relevant Redemption Date
(Option of Holder) (or range of such dates) by the portion of the principal
amount hereof (or, if this Security is an Original Issue Discount Security, the
portion of the Amortized Face Amount hereof) to be redeemed, together with
interest accrued thereon to the Redemption Date; provided, however, that in no
event shall the Redemption Price be less than 100% of the portion of the
principal amount hereof (or, if this Security is an Original Issue Discount
Security, the portion of the Amortized Face Amount hereof) to be redeemed.
-7-
<PAGE> 8
The Indenture contains provisions for defeasance and covenant
defeasance at any time of the entire indebtedness on this Security upon
compliance by the Company with certain conditions set forth therein.
If an Event of Default with respect to the Securities of this series
shall occur and be continuing, the principal of the Securities of this series
(or, in the case of Original Issue Discount Securities the Amortized Face
Amount thereof) may be declared due and payable in the manner and with the
effect provided in the Indenture. Upon payment (i) of the amount of principal
so declared due and payable and (ii) of interest on any overdue principal and
overdue interest (in each case to the extent that the payment of such interest
shall be legally enforceable), all of the Company's obligations in respect of
the payment of the principal of and interest, if any, on the Securities of this
series shall terminate.
The Indenture permits, with certain exceptions as therein provided,
the amendment thereof and the modification of the rights and obligations of the
Company and the rights of the Holders of the Securities of each series to be
affected under the Indenture at any time by the Company and the Trustee with
the consent of the Holders of 66 2/3% in principal amount of the Securities at
the time outstanding of each series to be affected. The Indenture also
contains provisions permitting the Holders of specified percentages in
principal amount of the Securities of each series at the time outstanding, on
behalf of the Holders of all Securities of such series, to waive compliance by
the Company with certain provisions of the Indenture and certain past defaults
under the Indenture and their consequences. Any such consent or waiver by the
Holder of this Security shall be conclusive and binding upon such Holder and
upon all future Holders of this Security and of any Security issued upon the
registration of transfer hereof or in exchange therefor or in lieu hereof,
whether or not notation of such consent or waiver is made upon this Security.
No reference herein to the Indenture and no provision of this Security
or of the Indenture shall alter or impair the obligation of the Company, which
is absolute and unconditional, to pay the principal of (and premium, if any)
and interest on this Security at the times, place and rate, and in the coin or
currency, herein prescribed.
As provided in the Indenture and subject to certain limitations
therein set forth, the transfer of this Security is registrable in the Debt
Security register, upon surrender of this Security for registration of transfer
at the office or agency of the Company in any place where the principal of (and
premium, if any) and interest on this Security are payable, duly endorsed by,
or accompanied by a written instrument of transfer in form satisfactory to the
Company and the Debt Security registrar duly executed by, the Holder hereof or
his attorney duly authorized in writing, and thereupon one or more new
Securities of this series and of like tenor, of authorized denominations and
for the same aggregate principal amount, will be issued to the designated
transferee or transferees.
As provided in the Indenture and subject to certain limitations
therein set forth, the Securities of this series are exchangeable for a like
aggregate principal amount of Securities of this series and of like tenor of a
different authorized denomination, as requested by the Holder surrendering the
same. In the event of any redemption at the election of the Company, the
Trustee shall not be required to exchange or register a transfer of (a) any
Securities of this series of like tenor for a period of fifteen days next
preceding the mailing of any notice of redemption, or (b) any Security
selected, called or being called for redemption except, in the case of any
Security to be redeemed in part, the portion thereof not to be so redeemed.
Following the exercise of a redemption option by the Holder hereof, the Trustee
shall not be required to issue, register the transfer of or exchange that
portion of this Security with respect to which such option has been exercised.
-8-
<PAGE> 9
No service charge shall be made for any such registration of transfer
or exchange, but the Company may require payment of a sum sufficient to cover
any tax or other governmental charge payable in connection therewith.
The Securities of this series may be issued in the form of one or more
Global Securities to The Depository Trust Company as depositary for the Global
Securities of this series (the "Depositary") or its nominee and registered in
the name of the Depositary or such nominee. If the face of this Security
contains a legend indicating that this Security is a Global Security so
registered, the transfer and exchange hereof is subject to the additional
limitations set forth in such legend.
Prior to due presentment of this Security for registration of
transfer, the Company, the Trustee and any agent of the Company or the Trustee
may treat the Person in whose name this Security is registered as the owner
hereof for all purposes, whether or not this Security be overdue, and neither
the Company, the Trustee nor any such agent shall be affected by notice to the
contrary.
All terms used in this Security which are defined in the Indenture
shall have the meanings assigned to them in the Indenture.
-9-
<PAGE> 10
-------------------------
ABBREVIATIONS
The following abbreviations, when used in the inscription on the face
of this instrument, shall be construed as though they were written out in full
according to applicable laws or regulations.
TEN COM - as tenants in common
TEN ENT - as tenants by the entireties
JT TEN - as joint tenants with right of survivorship
and not as tenants in common
UNIF GIFT MIN ACT - Custodian
-------------- ----------------
(Custodian) (Minor)
Under Uniform Gifts to Minors Act ( )
-----------
(State)
Additional abbreviations may also be used though not in the above list.
-------------------------
FOR VALUE RECEIVED, the undersigned hereby sell(s), assign(s) and transfer(s)
unto
- --------------------------------------------------------------------------------
(PLEASE INSERT SOCIAL SECURITY OR OTHER IDENTIFYING NUMBER OF ASSIGNEE)
- --------------------------------------------------------------------------------
(PLEASE PRINT OR TYPEWRITE NAME AND ADDRESS INCLUDING POSTAL ZIP CODE OF
ASSIGNEE)
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
the within Security and all rights thereunder, hereby irrevocably constituting
and appointing
--------------------------------------------------------------
attorney to transfer said Note on the books of the Company, with full power of
substitution in the premises.
Dated: X
------------------ ------------------------------------------
NOTICE: The signature to this assignment
must correspond with the name as written
upon the face of the within instrument in
every particular, without alteration or
enlargement or any change whatever.
-10-
<PAGE> 11
OPTION TO ELECT REDEMPTION
The undersigned hereby irrevocably requests and instructs USX
CORPORATION to redeem the within Security (or portion thereof specified below)
pursuant to its terms at the Redemption Price, to the undersigned at
- ------------------------------------------------------------------------------
(PLEASE PRINT OR TYPEWRITE NAME AND ADDRESS INCLUDING POSTAL ZIP CODE OF THE
UNDERSIGNED)
- ------------------------------------------------------------------------------
- ------------------------------------------------------------------------------
If less than the entire principal amount of the within
Security is to be redeemed, specify the portion thereof which the Holder elects
to have redeemed:
- ----------------------------------------------------------------------- ; and
specify the denomination or denominations (which shall not be less than the
minimum authorized denomination) of the Securities to be issued to the Holder
for the portion of the within Security not being redeemed (in the absence of
any such specification, one such Security will be issued for the portion not
being redeemed):
- -----------------------------------------------------------------------------.
Dated:
------------- ----------------------------------------
NOTICE: This signature on this Option
to Elect Redemption must correspond with
the name as written upon the face of the
within instrument in every particular
without alteration or enlargement.
-11-
<PAGE> 12
[Form of Face of Security]
REGISTERED REGISTERED
USX CORPORATION
No. FLRA-____ MEDIUM-TERM NOTE, SERIES C CUSIP ________
(Floating Rate)
[INSERT IF THE SECURITY IS TO BE A GLOBAL SECURITY -- This Security is a Global
Security within the meaning of the Indenture hereinafter referred to and is
registered in the name of a Depositary or a nominee of a Depositary. This
Security is exchangeable for Securities registered in the name of a Person
other than the Depositary or its nominee only in the limited circumstances
described in the Indenture, and may not be transferred except as a whole by the
Depositary to a nominee of the Depositary or by a nominee of the Depositary to
the Depositary or another nominee of the Depositary.
Unless this Certificate is presented by an authorized representative of The
Depository Trust Company (55 Water Street, New York, New York) to the issuer or
its agent for registration of transfer, exchange or payment, and any
certificate issued is registered in the name of Cede & Co. or such other name
as requested by an authorized representative of The Depository Trust Company
and any payment hereon is made to Cede & Co., ANY TRANSFER, PLEDGE OR OTHER USE
HEREOF FOR VALUE OR OTHERWISE BY OR TO ANY PERSON IS WRONGFUL since the
registered owner hereof, Cede & Co., has an interest herein.]
PRINCIPAL AMOUNT AND CURRENCY EXCHANGE RATE AGENT:
OR CURRENCY UNIT:
DENOMINATIONS
(IF OTHER THAN U.S. DOLLARS OR THE U.S. DOLLAR
DENOMINATIONS SET FORTH ON THE REVERSE):
OPTION TO RECEIVE PAYMENT STATED MATURITY OF SECURITY:
IN SPECIFIED CURRENCY:
YES: ___ NO: ___
DATE OF ISSUE: COMPUTATION PERIOD:
INTEREST RATE BASIS: REGULAR RECORD DATE(S):
INTEREST PAYMENT DATE(S): SPREAD (PLUS OR MINUS):
INDEX MATURITY: SPREAD MULTIPLIER:
<PAGE> 13
INITIAL INTEREST RATE: MINIMUM INTEREST RATE:
MAXIMUM INTEREST RATE: INTEREST PAYMENT MONTH(S):
INTEREST PAYMENT PERIOD INTEREST RESET MONTH(S):
(monthly, quarterly, semi-annually or annually):
INTEREST RESET PERIOD INTEREST DETERMINATION
(monthly, quarterly, semi-annually or annually): DATE(S):
CALCULATION DATE(S): CALCULATION AGENT: The
First National Bank of Boston
INTEREST RESET DATE(S): REDEMPTION PERCENTAGE(S):
REDEMPTION DATE(S): REDEMPTION PERCENTAGE(S)
(OPTION OF HOLDER):
REDEMPTION DATE(S) [ORIGINAL ISSUE DISCOUNT
(OPTION OF HOLDER): SECURITY:]*
NOTICE PERIOD:
OTHER PROVISIONS:
USX CORPORATION, a corporation duly organized under the laws of the
State of Delaware (herein called the "Company", which term includes any
successor corporation under the Indenture hereinafter referred to), for value
received, hereby promises to pay to [INSERT IF THE SECURITY IS TO BE A GLOBAL
SECURITY -- Cede & Co., as nominee for The Depository Trust Company]
[__________________________________________________________], or registered
assigns, the principal amount specified above (any currency or currency unit
other than U.S. dollars being hereinafter referred to as a "Specified
Currency") on the Stated Maturity specified above and to pay interest thereon,
from and including the Date of Issue specified above (the "Date of Issue") or
from and including the most recent Interest Payment Date to which interest on
this Security (or any Predecessor Security) has been paid or duly provided for
to, but excluding, the Interest Payment Date (as hereinafter defined), at a
rate per annum equal to the Initial Interest Rate specified above (the "Initial
Interest Rate") until the first Interest Reset Date (as defined on the reverse
hereof) following the Date of Issue and thereafter at a
- -------------------------
* Include U.S. federal income tax original issue discount legend if and
when regulations require. Note: This form of Security does not cover
zero-coupon securities.
<PAGE> 14
rate determined in accordance with the provisions on the reverse hereof under
the heading "Determination of Commercial Paper Rate", "Determination of Prime
Rate", "Determination of CD Rate", "Determination of Federal Funds Rate",
"Determination of LIBOR" or "Determination of Treasury Rate", depending upon
whether the Interest Rate Basis specified above is Commercial Paper Rate, Prime
Rate, CD Rate, Federal Funds Rate, LIBOR or Treasury Rate, until the principal
hereof is paid or duly made available for payment; provided, however, that,
unless the Holder hereof is entitled to make, and has made, a Specified
Currency Payment Election (as hereinafter defined) with respect to one or more
such payments, the Company will make all such payments in respect of this
Security in U.S. dollars in amounts determined as set forth on the reverse
hereof. Such interest shall be payable by the Company monthly, quarterly,
semi- annually or annually as specified above under "Interest Payment Period"
and, unless otherwise specified above under "Interest Payment Date(s)", such
interest shall be payable by the Company on the third Wednesday of the month or
months specified above under "Interest Payment Month(s)" in each year (each
date so specified above or, if none is so specified, determined as herein
provided, an "Interest Payment Date") and at Maturity. If any Interest Payment
Date shown on the face hereof would otherwise be a day that is not a Market
Day, the Interest Payment Date shall be postponed to the next day that is a
Market Day, except that if the rate of interest on this Security shall be
determined in accordance with the provisions of the heading "Determination of
LIBOR" above, and such Market Day is in the next succeeding calendar month,
such Interest Payment Date shall be the immediately preceding Market Day. If
the Maturity of this Security would otherwise be a day that is not a Market
Day, the payment of principal (and premium, if any) and interest may be made on
the next succeeding Market Day, and no interest on such payment will accrue
from and after the Maturity. The interest so payable, and punctually paid or
duly provided for, on any such Interest Payment Date will be paid to the Person
in whose name this Security (or one or more Predecessor Securities) is
registered at the close of business on the fifteenth day (whether or not a
Market Day) next preceding such Interest Payment Date, unless a different
Regular Record Date is specified above (the "Regular Record Date"); provided,
however, that interest payable at Maturity will be payable to the Person to
whom principal shall be payable; and provided, further, that if the Date of
Issue is after a Regular Record Date and before the next succeeding Interest
Payment Date the first payment of interest shall be payable on the second
Interest Payment Date following the Date of Issue to the Person in whose name
this Security (or one or more Predecessor Securities) is registered at the
close of business on the Regular Record Date immediately preceding such
Interest Payment Date. Any such interest which is payable, but not so
punctually paid or duly provided for, on any Interest Payment Date will
forthwith cease to be payable to the Holder on such Regular Record Date and
such Defaulted Interest may either be paid to the Person in whose name this
Security (or one or more predecessor Securities) is registered at the close of
business on a Special Record Date for the payment of such Defaulted Interest to
be fixed by the Trustee, notice whereof shall be given to Holders of Securities
of this series not less than 15 days prior to such Special Record Date, or be
paid at any time in any other lawful manner not inconsistent with the
requirements of any securities exchange on which this Security may be listed,
and upon such notice as may be required by such exchange, all as more fully
provided in said Indenture.
Payment of the principal of (and premium, if any) or interest on this
Security will be made at the principal corporate trust office of the Issuing
and Paying Agent in the Borough of Manhattan, The City of New York, or such
other office or agency of the Company maintained by it for that purpose in the
Borough of Manhattan, The City of New York, in such coin or currency of the
United States of America as at the time of payment is legal tender for payment
of public and private debts; provided, however, that payment of the principal
of (and premium, if any) and interest on this Security due will be made in
immediately available funds at such corporate trust office or such other office
or agency if this Security is presented to the Paying Agent in time for the
Paying Agent to make such payments in accordance with its normal procedures;
and provided, further, that at the option of the Company payment of interest
(other than interest payable at Maturity) may be made by check and mailed to
the address of the Holder as such address shall appear in the Security
Register; and provided, further, that
-3-
<PAGE> 15
if this Security is denominated in a Specified Currency, the Holder hereof is
entitled to make, and has made, a Specified Currency Payment Election with
respect to such payments, the Exchange Rate Agent is able to convert such
payments as provided below and the Specified Currency is not unavailable due to
the imposition of exchange controls or other circumstances beyond the control
of the Company, then (i) the payment of interest on this Security will be made
in the Specified Currency (or, if such Specified Currency is not at the time of
such payment legal tender for the payment of public and private debts, in such
other coin or currency of the country which issued such Specified Currency as
at the time of such payment is legal tender for the payment of such debts) by
check drawn upon a bank office located outside the United States and mailed to
the address of the Person entitled thereto as such address shall appear in the
Security Register, and (ii) payment of principal (and premium, if any) and
interest due at Maturity will be made in such Specified Currency (or, if
applicable, such other coin or currency) by wire transfer of immediately
available funds to an account maintained by the Holder hereof with a bank
office located in the country which issued the Specified Currency upon
presentation of this Security to the Paying Agent in time for such wire
transfer to be made by the Paying Agent in accordance with its normal
procedures. Unless otherwise specified above, if this Security is denominated
in a Specified Currency, the Holder hereof may elect to receive payments of
principal of (and premium, if any) and interest on this Security in such
Specified Currency (a "Specified Currency Payment Election") by delivery of a
written request (including, in the case of an election with respect to payments
at Maturity, appropriate wire transfer instructions) to the Issuing and Paying
Agent at its principal corporate trust office referred to above on or prior to
the relevant Regular Record Date or the sixteenth day prior to Maturity, as the
case may be. Such request shall be in writing (mailed or hand delivered) or by
facsimile transmission. A Holder of a Security denominated in a Specified
Currency may elect to receive payment in the Specified Currency for all
principal (and premium, if any) and interest payments and need not file a
separate election for each payment. Such election will remain in effect until
revoked by written notice to the Issuing and Paying Agent, but written notice
of any such revocation must be received by the Issuing and Paying Agent on or
prior to the relevant Regular Record Date or the sixteenth day prior to
Maturity, as the case may be.
Reference is hereby made to the further provisions of this Security set
forth on the reverse hereof, which further provisions shall for all purposes
have the same effect as if set forth at this place.
-4-
<PAGE> 16
Unless the certificate of authentication hereon has been executed by the
Trustee referred to on the reverse hereof by manual signature, this Security
shall not be entitled to any benefit under the Indenture or be valid or
obligatory for any purpose.
IN WITNESS WHEREOF, the Company has caused this instrument to be duly
executed by manual or facsimile signature under its corporate seal.
USX CORPORATION
[CORPORATE SEAL]
By
----------------------------
Name:
Title:
Attest:
- ---------------------------------
Dated: ____________________, 199_
TRUSTEE'S
CERTIFICATE OF
AUTHENTICATION
This is one of the Securities
of the series designated
therein referred to in the
within-mentioned Indenture.
PNC BANK, National Association, as Trustee
By THE FIRST NATIONAL BANK OF BOSTON,
as Issuing and Paying Agent
By
------------------------------------
Authorized Signatory
-5-
<PAGE> 17
(Form of Reverse of Security)
This Security is one of a duly authorized issue of securities of the
Company (the "Securities") issued and to be issued in one or more series under
the Indenture, dated as of March 15, 1993 (the "Indenture"), between the
Company and PNC Bank, National Association, as Trustee (herein called the
"Trustee", which term includes any successor trustee under the Indenture), to
which Indenture and all indentures supplemental thereto reference is hereby
made for a statement of the respective rights, limitations of rights, duties
and immunities thereunder of the Company, the Trustee, the Holders of the
Securities and of the terms upon which the Securities are, and are to be,
authenticated and delivered. This Security is one of the series designated on
the face hereof, limited to an aggregate principal amount not to exceed
$750,000,000 (or, if Securities of this series are to be Original Issue
Discount Securities or are to be denominated in one or more Specified
Currencies or with the amount payable in respect of principal of or any premium
or interest to be determined by reference to the value, rate or price of one or
more specified indices ("Indexed Securities"), such principal amount as shall
result in an aggregate initial offering price of Securities equivalent to no
more than $750,000,000), which amount may be increased at the option of the
Company if in the future it determines that it may wish to sell additional
Securities, which may be offered or sold either in the United States or outside
the United States or both simultaneously. Except as otherwise may be stated on
the face hereof, the Securities of this series are issuable only as registered
Securities, without coupons, in denominations of $100,000 and integral
multiples of $1,000 in excess thereof (or in the case of Securities denominated
in a Specified Currency, in such minimum denomination not less than the
equivalent of $100,000 in such Specified Currency on the basis of the noon
buying rate for cable transfers in The City of New York as certified for
customs purposes by (or, if not so certified, as otherwise determined by) the
Federal Reserve Bank of New York (the "Market Exchange Rate") for such
Specified Currency on the date the Company agrees to issue such Security and
such greater denomination or denominations as shall be set forth on the face
thereof). The Securities of this series may be issued from time to time in
various principal amounts and currencies or currency units, may mature at
different times, may bear interest at different rates, may be subject to
different redemption provisions, if any, and may otherwise vary. As provided
in the Indenture and subject to certain limitations therein set forth,
Securities of this series are exchangeable for a like aggregate principal
amount of Securities of this series and of like tenor of a different authorized
denomination, as requested by the Holder surrendering the same.
The Securities are general, direct, unconditional and unsecured
obligations of the Company.
Accrued interest hereon shall be calculated by multiplying the principal
amount specified on the face hereof by an accrued interest factor. Such
accrued interest factor shall be computed by adding the interest factor
calculated for each day in the period for which accrued interest is being
calculated. The interest factor (expressed as a decimal rounded upwards, if
necessary, as described below) for each such day shall be computed by dividing
the interest rate (expressed as a decimal rounded upwards, if necessary, as
described below) applicable to such day by 360, if the Interest Rate Basis
specified on the face hereof is the Commercial Paper Rate, Prime Rate, CD Rate,
Federal Funds Rate or LIBOR, by the actual number of days in the year (365 or
366, as the case may be) if the Interest Rate Basis specified on the face
hereof is the Treasury Rate, or by the number of days in the Computation Period
specified on the face hereof. Except as otherwise provided herein, all
percentages resulting from any calculation with respect to this Security will
be rounded, if necessary, to the nearest one-hundred thousandth of a percentage
point, with five one-millionths of a percentage point rounded upwards (e.g.,
9.876545% (or .09876545) being rounded to 9.87655% (or .0987655) and 9.876544%
(or .09876544) being rounded to 9.87654% (or .0987654)), and all dollar amounts
and all amounts in Specified Currencies used in or resulting from such
calculations will be rounded to the nearest cent, or, if this Security is
denominated in a Specified Currency, the nearest unit (with one-half cent and
one-half unit being rounded upwards).
-6-
<PAGE> 18
The rate of interest on this Security will be reset daily, weekly,
monthly, quarterly, semi-annually or annually, as specified on the face hereof
under Interest Reset Period (each date upon which interest is so reset as
provided below being hereinafter referred to as an "Interest Reset Date"), and
the interest rate in effect on any day shall be (a) if such day is an Interest
Reset Date, the interest rate for such Interest Reset Date or (b) if such day
is not an Interest Reset Date the interest rate for the immediately preceding
Interest Reset Date; provided, however, that the interest rate in effect from
the Date of Issue of this Security (or one or more Predecessor Securities) to
but excluding the first Interest Reset Date will be the Initial Interest Rate.
Notwithstanding the foregoing, the interest rate hereon shall not be greater
than the Maximum Interest Rate, if any, or less than the Minimum Interest Rate,
if any, specified on the face hereof and in no event shall be higher than the
maximum rate permitted by New York law, as the same may be modified by United
States law of general application. Unless otherwise specified on the face
hereof and except as provided in the next succeeding sentence, the Interest
Reset Date with respect to this Security will be, if the Interest Reset Period
specified on the face hereof is daily, each Market Day (as defined below); if
the Interest Reset Period specified on the face hereof is weekly (unless the
Interest Rate Basis specified on the face hereof is the Treasury Rate), the
Wednesday of each week; if the Interest Reset Period specified on the face
hereof is weekly and the Interest Rate Basis specified on the face hereof is
the Treasury Rate, except as otherwise provided below, the Tuesday of each
week; if the Interest Reset Period specified on the face hereof is monthly, the
third Wednesday of each month; if the Interest Reset Period specified on the
face hereof is quarterly, the third Wednesday of each March, June, September
and December; if the Interest Reset Period specified on the face hereof is
semi-annually, the third Wednesday of two months in each year specified under
"Interest Reset Month(s)" on the face hereof; and if the Interest Reset Period
specified on the face hereof is annually, the third Wednesday of the month in
each year specified under "Interest Reset Month(s)" on the face hereof. If,
pursuant to the preceding sentence, any Interest Reset Date would otherwise be
a day that is not a Market Day with respect to this Security, the Interest
Reset Date shall be the next succeeding day that is a Market Day with respect
to this Security, except that if the Interest Rate Basis specified on the face
hereof is LIBOR and the next succeeding Market Day falls in the next succeeding
calendar month, such Interest Reset Date shall be the immediately preceding
Market Day. Subject to applicable provisions of law and except as specified
herein, on each Interest Reset Date the rate of interest on this Security shall
be the rate determined in accordance with the provisions of the applicable
heading below.
"Market Day" means (a) with respect to any Security (unless otherwise
provided in this definition), any Business Day, (b) with respect to Securities
that bear interest on the basis of the London Interbank Offered Rate as
determined from time to time, any Business Day that is also a London Banking
Day ("London Banking Day" means any day on which dealings in deposits in U.S.
dollars are transacted in the London interbank market), (c) with respect to
Securities denominated in a Foreign Currency (other than Securities denominated
in European Currency Units ("ECUs")), any Business Day that, in the principal
financial center of the country of the Specified Currency, is not a day on
which banking institutions generally are authorized or obligated by law or
executive order to close and (d) with respect to Securities denominated in
ECUs, any Business Day that is also designated as an ECU settlement day by the
ECU Banking Association in Paris or otherwise generally regarded in the ECU
interbank market as a day in which payments in ECUs are made.
Determination of Commercial Paper Rate. If the Interest Rate Basis
specified on the face hereof is the Commercial Paper Rate, the interest rate
with respect to this Security for any Interest Reset Date shall equal (a) the
Money Market Yield (calculated as described below) of the rate on the second
Market Day with respect to this Security immediately preceding such Interest
Reset Date (the "Commercial Paper Interest Determination Date") for commercial
paper having the Index Maturity specified on the face hereof, (i) as published
in "Statistical Release H.15(519), Selected Interest Rates", or any successor
publication published by the Board of Governors of the Federal Reserve System
("H.15(519)"), under the heading "Commercial Paper", or (ii) if such rate is
not so published
-7-
<PAGE> 19
prior to 3:00 P.M., New York City time, on the Calculation Date pertaining to
such Commercial Paper Interest Determination Date, then as published in
"Composite 3:30 P.M. Quotations for U.S. Government Securities", or any
successor publication published by the Federal Reserve Bank of New York
("Composite Quotations"), under the heading "Commercial Paper", or (b) if such
rate is not published in either H.15(519) or Composite Quotations by 3:00 P.M.,
New York City time, on such Calculation Date, the Money Market Yield of the
arithmetic mean, as calculated by the Calculation Agent on such Calculation
Date, of the offered rates, as of 11:00 A.M., New York City time, on such
Commercial Paper Interest Determination Date, of three leading dealers of
commercial paper in The City of New York selected by the Calculation Agent for
commercial paper having the Index Maturity specified on the face hereof placed
for an industrial issuer whose bond rating is "AA", or the equivalent, from a
nationally recognized rating agency, in each of the above cases adjusted by the
addition or subtraction of the Spread, if any, specified on the face hereof, or
by multiplication by the Spread Multiplier, if any, specified on the face
hereof; provided, however, that if at least two of the dealers selected as
aforesaid by the Calculation Agent are not quoting as mentioned in this
sentence, the Commercial Paper Rate shall be the Commercial Paper Rate in
effect on such Commercial Paper Interest Determination Date.
"Money Market Yield" shall be a yield (expressed as a percentage rounded
upwards, if necessary, to the next higher one-hundred thousandth of a
percentage point), calculated in accordance with the following formula:
D x 360
Money Market Yield = ------------ x 100
360 - (D x M)
where "D" refers to the per annum rate for commercial paper quoted on a bank
discount basis and expressed as a decimal; and "M" refers to the actual number
of days in the interest period for which interest is being calculated.
Determination of Prime Rate. If the Interest Rate Basis specified on
the face hereof is the Prime Rate, the Interest Rate with respect to this
Security for any Interest Reset Date shall equal (a) the rate on the second
Business Day with respect to this Security immediately preceding such Interest
Reset Date (the "Prime Rate Interest Determination Date") as published in
H.15(519) under the heading "Bank Prime Loan"; (b) if such rate is not so
published prior to 9:00 A.M., New York City time, on the Calculation Date
pertaining to such Prime Rate Interest Determination Date, the arithmetic mean,
as calculated by the Calculation Agent on such Calculation Date, of the rates
of interest publicly announced by each bank that appears on the Reuters Screen
NYMF Page as such bank's prime rate or base lending rate as in effect for that
Prime Rate Interest Determination Date, (c) if fewer than four such rates but
more than one such rate appear on the Reuters Screen NYMF Page for that Prime
Rate Interest Determination Date, the Prime Rate will be the arithmetic mean,
as calculated by the Calculation Agent, of the prime rates quoted on the basis
of the actual number of days in the year divided by a 360-day year as of the
close of business on such Prime Rate Interest Determination Date by four major
money center banks in The City of New York selected by the Calculation Agent,
and (d) if fewer than two quotations are provided, the Prime Rate shall be
determined on the basis of the rates furnished in The City of New York by the
appropriate number of substitute banks or trust companies organized and doing
business under the laws of the United States, or any State thereof, having
total equity capital of at least $500 million and being subject to supervision
or examination by Federal or State authority, selected by the Calculation Agent
to provide such rate or rates in each of the above cases adjusted by the
addition or subtraction of the Spread, if any, specified on the face hereof, or
by multiplication of the Spread Multiplier, if any, specified on the face
hereof; provided, however, that if the banks selected as aforesaid are not
quoting as mentioned in this sentence, the Prime Rate will be the Prime Rate in
effect on such Prime Rate Interest Determination Date.
-8-
<PAGE> 20
Determination of CD Rate. If the Interest Rate Basis specified on the
face hereof is the CD Rate, the Interest Rate with respect to any Interest
Reset Date shall equal (a) the rate on the second Business Day with respect to
this Security immediately preceding such Interest Reset Date (the "CD Rate
Interest Determination Date") for negotiable certificates of deposit having the
Index Maturity specified on the face hereof, (i) as published in H.15(519)
under the heading "CDs (Secondary Market)", or (ii) such rate is not published
prior to 3:00 P.M., New York City time, on the Calculation Date pertaining to
such CD Rate Interest Determination Date, then as published in Composite
Quotations under the heading "Certificates of Deposit", or (b) if such rate is
not yet published in either H.15(519) or Composite Quotations by 3:00 P.M., New
York City time, on such Calculation Date the arithmetic mean, as calculated by
the Calculation Agent, of the secondary market offered rates, as of 10:00 A.M.,
New York City time, on such CD Rate Interest Determination Date, of three
leading nonbank dealers of negotiable U.S. dollar certificates of deposit in
The City of New York selected by the Calculation Agent for negotiable
certificates of deposit of major United States money market banks with a
remaining maturity closest to the Index Maturity specified on the face hereof
in a denomination of $5,000,000 in each of the above cases adjusted by the
addition or subtraction of the Spread, if any, specified on the face hereof, or
by multiplication of the Spread Multiplier, if any, specified on the face
hereof; provided, however, that if the dealers selected as aforesaid by the
Calculation Agent are not quoting as mentioned in this sentence, the CD Rate
will be the CD Rate in effect on such CD Rate Interest Determination Date.
Determination of Federal Funds Rate. If the Interest Rate Basis
specified on the face hereof is the Federal Funds Rate, the interest rate with
respect to this Security for any Interest Reset Date shall equal (a) the rate
on the second Market Day with respect to this Security immediately preceding
such Interest Reset Date (the "Federal Funds Interest Determination Date") for
Federal Funds having the Index Maturity specified on the face hereof (i) as
published in H.15(519) under the heading "Federal Funds (Effective)" or (ii) if
such rate is not so published prior to 3:00 P.M., New York City time, on the
Calculation Date pertaining to such Federal Funds Interest Determination Date,
then as published in Composite Quotations under the heading "Federal Funds/
Rate" or (b) if by 3:00 P.M., New York City time, on such Calculation Date such
rate is not yet published in either H.15(519) or Composite Quotations, the
arithmetic mean, as calculated by the Calculation Agent on such Calculation
Date, of the rates, as of 11:00 A.M., New York City time, on such Federal Funds
Interest Determination Date, for the last transaction in overnight Federal
Funds arranged by three leading brokers of Federal Funds transactions in The
City of New York selected by the Calculation Agent, in each of the above cases
adjusted by the addition or subtraction of the Spread, if any, specified on the
face hereof, or by multiplication by the Spread Multiplier, if any, specified
on the face hereof; provided, however, that if the brokers selected as
aforesaid by the Calculation Agent are not quoting as mentioned in this
sentence, the Federal Funds Rate will be the Federal Funds Rate in effect on
such Federal Funds Interest Determination Date.
Determination of LIBOR. If the Interest Rate Basis specified on the
face hereof is LIBOR, the interest rate with respect to this Security for any
Interest Reset Date shall be determined by the Calculation Agent in accordance
with the following provisions:
(i) On each Interest Determination Date shown on the face
hereof, LIBOR will be, as shown on the face hereof, (a) the
arithmetic mean of the offered rates for deposits in U.S. dollars
having the Index Maturity shown on the face hereof, commencing on
the second London Banking Day (as defined below) immediately
following such Interest Determination Date, that appear on the
Reuters Screen LIBO Page as of 11:00 A.M., London time, on such
Interest Determination Date, if at least two such offered rates
appear on the Reuters Screen LIBO Page ("LIBOR Reuters"), or (b)
the rate for deposits in U.S. dollars having the Index Maturity
shown on the face hereof, commencing on the second London Banking
Day immediately following such Interest Determination Date, that
-9-
<PAGE> 21
appears on the Telerate Page 3750 as of 11:00 A.M., London time,
on such Interest Determination Date ("LIBOR Telerate"). "Reuters
Screen LIBO Page" means the display designated as page "LIBO" on
the Reuters Monitor Money Rates Service (or such other page as
may replace the LIBO page on that service for the purpose of
displaying London interbank offered rates of major banks).
"Telerate Page 3750" means the display designated as page "3750"
on the Telerate Service (or such other page as may replace page
"3750" on that service or such other service or services as may
be nominated by the British Bankers' Association for the purpose
of displaying London interbank offered rates for U.S. dollar
deposits). If neither LIBOR Reuters nor LIBOR Telerate is shown
on the face hereof, LIBOR will be determined as if LIBOR Reuters
had been so designated. If two or more offered rates appear on
the Reuters Screen LIBO Page, the rate in respect of such LIBOR
Interest Determination Date will be the arithmetic mean (rounded,
if necessary, to the nearest one hundred-thousandth of a percent)
of such offered rates as determined by the Calculation Agent. If
fewer than two offered rates appear on the Reuters Screen LIBO
Page, or if no rate appears on the Telerate Page 3750, as
applicable, LIBOR in respect of that Interest Determination Date
will be determined as if the parties had specified the rate
described in (ii) below.
(ii) On any Interest Determination Date on which fewer
than two offered rates appear on the Reuters Screen LIBO Page, as
specified in (i)(a) above, or on which no rate appears on
Telerate Page 3750, as specified in (i)(b) above, as applicable,
LIBOR will be determined on the basis of the rates at which
deposits in U.S. dollars having the Index Maturity shown on the
face hereof are offered at approximately 11:00 A.M., London time,
on such Interest Determination Date by four major banks in the
London interbank market selected, after consultation with the
Company, by the Calculation Agent (the "Reference Banks") to
prime banks in the London interbank market commencing on the
second London Banking Day immediately following such Interest
Determination Date and in a principal amount equal to an amount
of not less than $1,000,000 that is representative for a single
transaction in such market at such time. The Calculation Agent
will request the principal London office of each of such
Reference Banks to provide a quotation of its rate. If at least
two such quotations are provided, LIBOR in respect of such
Interest Determination Date will be the arithmetic mean of all
such quotations. If fewer than two quotations are provided,
LIBOR in respect of such Interest Determination Date will be the
arithmetic mean of the rates quoted at approximately 11:00 A.M.,
New York City time, on such Interest Determination Date by three
major banks in The City of New York selected, after consultation
with the Company, by the Calculation Agent for loans in U.S.
dollars to leading European banks having the Index Maturity shown
on the face hereof commencing on the second London Banking Day
immediately following such Interest Determination Date and in a
principal amount equal to an amount of not less than $1,000,000
that is representative for a single transaction in such market at
such time; provided, however, that if the banks in The City of
New York selected as aforesaid by the Calculation Agent are not
quoting as mentioned in this sentence, LIBOR with respect to such
Interest Determination Date will be LIBOR in effect on such
Interest Determination Date.
LIBOR determined with respect to any Interest Determination Date
will become effective on and as of the second London Banking Day following such
Interest Determination Date (the "LIBOR Reset Date"); provided, however, that
(i) the interest rate in effect for the period from the Original Date of Issue
to the first LIBOR Reset Date will be the Initial Interest Rate shown on the
face hereof and (ii) the interest rate in effect for the ten calendar days
immediately preceding the Maturity Date will be that in effect on the tenth
calendar day preceding such Maturity Date. The interest rate for each such
LIBOR Reset Date shall be LIBOR applicable to such LIBOR Reset Date plus or
minus the Spread
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<PAGE> 22
and/or multiplied by the Spread Multiplier, as shown on the face hereof.
"London Banking Day" means any day on which dealings in deposits in U.S.
dollars are transacted in the London interbank market.
Determination of Treasury Rate. If the Interest Rate Basis specified on
the face hereof is the Treasury Rate, the interest rate with respect to this
Security for any Interest Reset Date shall equal (a) the rate for the most
recent auction of direct obligations of the United States ("Treasury bills")
having the Index Maturity specified on the face hereof as published in
H.15(519) under the heading "U.S. Government Securities/Treasury Bills -
auction average (investment)" on the Treasury Interest Determination Date (as
defined below) or (b) if such rate is not so published by 9:00 A.M., New York
City time, on the Calculation Date pertaining to such Treasury Interest
Determination Date, the auction average rate (expressed as bond equivalent on
the basis of a year of 365 or 366 days, as applicable, and applied on a daily
basis) for such auction as otherwise announced by the United States Department
of the Treasury or (c) in the event that the results of the auction of Treasury
bills having the Index Maturity specified on the face hereof are not published
or reported as provided in (a) or (b) above by 3:00 P.M., New York City time,
on such Calculation Date or if no such auction is held in a particular week,
the yield to maturity (expressed as a bond equivalent on the basis of a year of
365 or 366 days, as applicable, and applied on a daily basis) of the arithmetic
mean, as calculated by the Calculation Agent on such Calculation Date, of the
secondary market bid rates as of approximately 3:30 P.M., New York City time,
on such Treasury Interest Determination Date, of three leading primary United
States government securities dealers selected by the Calculation Agent for the
issue of Treasury bills with a remaining maturity closest to the Index Maturity
specified on the face hereof, in each of the above cases adjusted by the
addition or subtraction of the Spread, if any, specified on the face hereof, or
by multiplication by the Spread Multiplier, if any, specified on the face
hereof; provided, however, that if at least two of the dealers selected as
aforesaid by the Calculation Agent are not quoting as mentioned in this
sentence, the Treasury Rate shall be the Treasury Rate on such Treasury
Interest Determination Date.
The "Treasury Interest Determination Date" pertaining to an Interest
Reset Date will be the day on which Treasury bills are auctioned for the week
in which such Interest Reset Date falls, or if no auction is held for such
week, the Monday of such week (or if Monday is a legal holiday, the next
succeeding Market Day) and the Interest Reset Date will be the Market Day
immediately following such Treasury Interest Determination Date. Treasury
bills are usually sold at auction on Monday of each week, unless that day is a
legal holiday, in which case the auction is usually held on the following
Tuesday, except that such auction may be held on the preceding Friday. If an
auction is held for such week on Monday or the preceding Friday, such Monday or
preceding Friday shall be the Treasury Interest Determination Date for such
week, and the Interest Reset Date for such week shall be the Tuesday of such
week (or, if such Tuesday is not a Market Day, the next succeeding Market Day).
If the auction for such week is held on any day of such week other than Monday,
then such date shall be the Treasury Interest Determination Date and the
Interest Reset Date for such week shall be the next succeeding Market Day.
Unless otherwise specified on the face hereof, the Calculation Date
pertaining (a) to any Commercial Paper Rate Interest Determination Date, CD
Rate Interest Determination Date, Treasury Interest Determination Date or
Federal Funds Rate Interest Determination Date, as the case may be, shall be
the earlier of the (i) tenth day after such interest determination date or, if
any such day is not a Market Day with respect to this Security, the next
succeeding Market Day and (ii) the Market Day next preceding such Interest
Payment Date or date of Maturity, as the case may be and (b) to any Prime Rate
Interest Determination Date or LIBOR Interest Determination Date shall be such
Prime Rate Interest Determination Date or such LIBOR Interest Determination
Date, as the case may be. The Calculation Agent shall calculate the interest
rate hereon in accordance with the foregoing on or before each Calculation
Date. At the request of the Holder hereof, the Calculation Agent will provide
to the Holder hereof the interest rate hereon then in effect and, if
determined, the interest rate which will
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<PAGE> 23
become effective as of the next Interest Reset Date. Unless otherwise
specified on the face hereof, the Calculation Agent shall be the Trustee.
If this Security is designated on the face hereof as an Original Issue
Discount Security, then, notwithstanding anything to the contrary contained in
this Security, upon the redemption or acceleration of Maturity of this Security
there shall be payable, in lieu of the principal amount due at the Stated
Maturity hereof, as specified on the face hereof, an amount equal to the
Amortized Face Amount of this Security. The "Amortized Face Amount" shall be
the amount equal to (a) the issue price of this Security (as defined below),
plus (b) that portion of the difference between the issue price and the
principal amount of this Security that has been amortized at the Stated Yield
(as defined below) of this Security (computed in accordance with generally
accepted United States bond yield computation principles) at the date as of
which the Amortized Face Amount is calculated, but in no event shall the
Amortized Face Amount exceed the principal amount of this Security due at the
Stated Maturity hereof. As used in the previous sentence "issue price" means
the principal amount due at the Stated Maturity hereof less the Total Amount of
OID specified on the face hereof and the "Stated Yield" means the Yield to
Maturity specified on the face hereof (or if not so specified, the yield to
maturity compounded semi-annually and computed in accordance with generally
accepted United States bond yield computation principles) for the period from
the Date of Issue to the Stated Maturity on the basis of the issue price and
such principal amount.
If this Security is denominated in a Specified Currency, unless the
Holder hereof is entitled to make, and has made, a Specified Currency Payment
Election with respect to such payments as provided on the face hereof, the
Holder of this Security shall receive payments of principal (and premium, if
any) and interest in U.S. dollars at an exchange rate based on the highest bid
quotation in The City of New York received by the Exchange Rate Agent (who,
unless otherwise specified on the face hereof, shall be the Issuing and Paying
Agent) at approximately 11:00 A.M., New York City time, on the second Market
Day with respect to this Security preceding the applicable payment date from
three recognized foreign exchange dealers (one of which may be the Exchange
Rate Agent) selected by the Exchange Rate Agent and approved by the Company for
the purchase by the quoting dealer of the Specified Currency for U.S. dollars
for settlement on such payment date in the aggregate amount of such Specified
Currency payable to all Holders of Securities of this series denominated in
such Specified Currency and scheduled to receive U.S. dollar payment on such
payment date and at which the applicable dealer commits to execute a contract.
All currency exchange costs incurred by the Company in converting a Specified
Currency into U.S. dollars in order to make payments hereon will be borne by
the Holder of this Security by deductions from such payments. If such bid
quotations are not available, or if a Specified Currency Payment Election has
been made with respect to such payments, payments will be made in the Specified
Currency (or, if such Specified Currency is not at the time of such payment
legal tender for the payment of public and private debts, such other coin or
currency of the country which issued such Specified Currency as at the time of
such payment is legal tender for the payment of such debts); provided, however,
that if such Specified Currency (or, if applicable, such other coin or
currency) is unavailable due to the imposition of exchange controls or other
circumstances beyond the Company's control, the Company will be entitled to
make payments in U.S. dollars on the basis of the Market Exchange Rate for such
specified currency (or, if applicable, such other coin or currency) on the
second Market Day prior to such payment or, if such Market Exchange Rate is not
then available, on the basis of the most recently available Market Exchange
Rate or as otherwise indicated hereon.
If one or more Redemption Dates (or ranges of Redemption Dates) is
specified on the face hereof, this Security is subject to redemption upon not
less than 30 days' notice by mail, on any such date (or during any such range)
as a whole, or from time to time in part, at the option of the Company, at a
Redemption Price determined as provided in the next succeeding sentence,
together with accrued interest to the Redemption Date; but interest instalments
whose Stated Maturity on or prior to the
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<PAGE> 24
Redemption Date will be payable to the Holder hereof (or one or more
Predecessor Securities) of record at the close of business on the Regular
Record Dates referred to on the face hereof, all as provided in the Indenture.
If applicable, the "Redemption Price" for any such redemption shall be the
amount determined by multiplying the Redemption Percentage specified on the
face hereof with respect to the relevant Redemption Date (or range of such
dates) by the portion of the principal amount hereof (or, if this Security is
an Original Issue Discount Security, the portion of the Amortized Face Amount
hereof) to be redeemed; provided, however, that in no event shall the
Redemption Price be less than 100% of the portion of the principal amount
hereof (or, if this Security is an Original Issue Discount Security, the
portion of the Amortized Face Amount hereof) to be redeemed.
Notice of redemption having been given as aforesaid, this Security (or
the portion of the principal amount hereof so to be redeemed) shall, on the
Redemption Date, become due and payable at the Redemption Price herein
specified, and from and after such date (unless the Company shall default in
the payment of the Redemption Price and accrued interest) shall cease to bear
interest. In the case of any partial redemption at the election of the Company
of Securities of this series, the Securities of a particular tenor to be
redeemed shall be selected by the Trustee not more than 45 days prior to the
Redemption Date by such method as the Trustee shall deem fair and appropriate
and which may provide for the selection for redemption of portions of the
principal amount of Securities. In the event of any redemption of this
Security in part only, a new Security or Securities of this series of like
tenor for the unredeemed portion hereof will be issued in the name of the
Holder hereof upon the cancellation hereof, provided that such unredeemed
portion shall not be less than the minimum denomination of this Security.
If one or more Redemption Dates (Option of Holder) (or ranges of such
dates) is specified on the face hereof, this Security is subject to redemption
on any such date (or during any such range) or, if such date is not a Market
Day, on the first Market Day following such date, as a whole or from time to
time in part, at the election of the Holder hereof at a Redemption Price
determined as provided in the fifth succeeding sentence together with accrued
interest thereon to the Redemption Date, but interest instalments whose Stated
Maturity is on or prior to the Redemption Date will be payable to the Holder
hereof of record at the close of business on the Regular Record Date referred
to on the face hereof, all as provided in the Indenture. Such election shall
be effected by the Holder hereof delivering to the Company at the principal
corporate trust office of the Issuing and Paying Agent in the Borough of
Manhattan, The City of New York, or such other office or agency of the Company
maintained by it for that purpose in the Borough of Manhattan, The City of New
York, not less than 30 nor more than 60 days prior to the date on which this
Security is to be redeemed, or during such other Notice Period specified on the
face hereof, a notice requesting such redemption in the form described below
and specifying the date upon which this Security is to be redeemed. Any notice
given by a Holder pursuant to this paragraph shall consist of either (i) this
Security with the form entitled "Option to Elect Redemption" set forth of the
end of this Security duly completed or (ii) a telegram, facsimile transmission
or a letter from a member of a national securities exchange, or the National
Association of Securities Dealers, Inc. or a commercial bank or trust company
in the United States setting forth the name of the Holder hereof, the principal
amount of this Security, the principal amount of this Security to be redeemed,
the certificate number or a description of the terms of this Security, a
statement that the option to elect redemption is being exercised thereby and a
guarantee that this Security, together with the duly completed form entitled
"Option to Elect Redemption" below, will be received by the Issuing and Paying
Agent not later than the fifth Market Day after the date of such telegram,
facsimile transmission or letter; provided, however, that such telegram,
facsimile transmission or letter shall only be effective if this Security and
form duly completed are received by the Issuing and Paying Agent by such fifth
Market Day. Exercise of the redemption option by the Holder hereof will be
irrevocable. If applicable, the "Redemption Price" for any such redemption
shall be the amount determined by multiplying the Redemption Percentage (Option
of Holder), specified on the face hereof with respect to the relevant
Redemption Date (Option of Holder) (or range of such dates) by the portion of
the
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<PAGE> 25
principal amount hereof (or, if this Security is an Original Issue Discount
Security, the portion of the Amortized Face Amount hereof) to be redeemed,
together with the interest accrued thereon to the Redemption Date; provided,
however, that in no event shall the Redemption Price be less than 100% of the
portion of the principal amount hereof (or, if this Security is an Original
Issue Discount Security, the portion of the Amortized Face Amount hereof) to be
redeemed.
The Indenture contains provisions for defeasance and covenant defeasance
at any time of the entire indebtedness on this Security upon compliance by the
Company with certain conditions set forth therein.
If an Event of Default with respect to the Securities of this series
shall occur and be continuing, the principal of the Securities of this series
(or, in the case of Original Issue Discount Securities, the Amortized Face
Amount thereof) may be declared due and payable in the manner and with the
effect provided in the Indenture. Upon payment (i) of the amount of principal
so declared due and payable and (ii) of interest on any overdue principal and
overdue interest (in each case to the extent that the payment of such interest
shall be legally enforceable), all of the Company's obligations in respect of
the payment of the principal of the interest, if any, on the Securities of this
series shall terminate.
The Indenture permits, with certain exceptions as therein provided, the
amendment thereof and the modification of the rights and obligations of the
Company and the rights of the Holders of the Securities of each series to be
affected under the Indenture at any time by the Company and the Trustee with
the consent of the Holders of 66 2/3% in principal amount of the Securities at
the time outstanding of each series to be affected. The Indenture also
contains provisions permitting the Holders of specified percentages in
principal amount of the Securities of each series at the time outstanding, on
behalf of the Holders of all Securities of such series, to waive compliance by
the Company with certain provisions of the Indenture and certain past defaults
under the Indenture and their consequences. Any such consent or waiver by the
Holder of this Security shall be conclusive and binding upon such Holder and
upon all future Holders of this Security and of any Security issued upon the
registration of transfer hereof or in exchange herefor or in lieu hereof,
whether or not notation of such consent or waiver is made upon this Security.
No reference herein to the Indenture and no provision of this Security
or of the Indenture shall alter or impair the obligation of the Company, which
is absolute and unconditional, to pay the principal of (and premium, if any)
and interest on this Security at the times, place and rate, and in the coin or
currency, herein prescribed.
As provided in the Indenture and subject to certain limitations therein
set forth, the transfer of this Security is registrable in the Debt Security
register, upon surrender of this Security for registration of transfer at the
office or agency of the Company in any place where the principal of (and
premium, if any) and interest on this Security are payable, duly endorsed by,
or accompanied by a written instrument of transfer in form satisfactory to the
Company and the Debt Security registrar duly executed by, the Holder hereof or
his attorney duly authorized in writing, and thereupon one or more new
Securities of this series and of like tenor, of authorized denominations and
for the same aggregate principal amount, will be issued to the designated
transferee or transferees.
As provided in the Indenture and subject to certain limitations therein
set forth, the Securities of this series are exchangeable for a like aggregate
principal amount of Securities of this series and of like tenor of a different
authorized denomination, as requested by the Holder surrendering the same. In
the event of any redemption at the election of the Company, the Trustee shall
not be required to exchange or register a transfer of (a) any Securities of
this series of like tenor for a period of fifteen days next preceding the
mailing of any notice of redemption, or (b) any Security selected, called or
being called for redemption except, in the case of any Security to be redeemed
in part, the portion
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<PAGE> 26
thereof not to be so redeemed. Following the exercise of any redemption option
by the Holder hereof, the Trustee shall not be required to issue, register the
transfer of or exchange that portion of this Security with respect to which
such option has been exercised.
No service charge shall be made for any such registration of transfer or
exchange, but the Company may require payment of a sum sufficient to cover any
tax or other governmental charge payable in connection therewith.
The Securities of this series may be issued in the form of one or more
Global Securities to The Depository Trust Company as depositary for the Global
Securities of this series (the "Depositary") or its nominee and registered in
the name of the Depositary or such nominee. If the face of this Security
contains a legend indicating that this Security is a Global Security so
registered, the transfer and exchange hereof is subject to the additional
limitations set forth in such legend.
Prior to due presentment of this Security for registration of transfer,
the Company, the Trustee and any agent of the Company or the Trustee may treat
the Person in whose name this Security is registered as the owner hereof for
all purposes, whether or not this Security be overdue, and neither the Company,
the Trustee nor any such agent shall be affected by notice to the contrary.
All terms used in this Security which are defined in the Indenture shall
have the meanings assigned to them in the Indenture.
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<PAGE> 27
---------------
ABBREVIATIONS
The following abbreviations, when used in the inscription on the face of
this instrument, shall be construed as though they were written out in full
according to applicable laws or regulations.
TEN COM - as tenants in common
TEN ENT - as tenants by the entireties
JT TEN - as joint tenants with right of survivorship
and not as tenants in common
UNIF GIFT MIN ACT - ______________ Custodian ________________
(Custodian) (Minor)
Under Uniform Gifts to Minors Act (___________)
(State)
Additional abbreviations may also be used though not in the above list.
---------------
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<PAGE> 28
FOR VALUE RECEIVED, the undersigned hereby sell(s), assign(s) and transfer(s)
unto
- --------------------------------------------------------------------------------
PLEASE INSERT SOCIAL SECURITY OR OTHER IDENTIFYING NUMBER OF ASSIGNEE:
- --------------------------------------------------------------------------------
(PLEASE PRINT OR TYPEWRITE NAME AND ADDRESS INCLUDING POSTAL ZIP CODE OF
ASSIGNEE)
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
the within Security and all rights thereunder, hereby irrevocably constituting
and appointing
----------------------------------------------------------------
attorney to transfer said Note on the books of the Company, with full power of
substitution in the premises.
Dated: X
------------------- ----------------------------------------
NOTICE: The signature to this
assignment must correspond with the name
as written upon the face of the within
instrument in every particlar, without
alteration or enlargement or any change
whatever.
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<PAGE> 29
OPTION TO ELECT REDEMPTION
The undersigned hereby irrevocably requests and instructs USX
CORPORATION to redeem the within Security (or portion thereof specified below)
pursuant to its terms at the Redemption Price, to the undersigned at
- --------------------------------------------------------------------------------
(PLEASE PRINT OR TYPEWRITE NAME AND ADDRESS INCLUDING POSTAL ZIP CODE OF THE
UNDERSIGNED)
- -------------------------------------------------------------------------------
- -------------------------------------------------------------------------------
If less than the entire principal amount of the within Security
is to be redeemed, specify the portion thereof which the Holder elects to have
redeemed:
- ------------------------------------------------------------------ ; and specify
the denomination or denominations (which shall not be less than the minimum
authorized denomination) of the Securities to be issued to the Holder for the
portion of the within Security not being redeemed (in the absence of any such
specification, one such Security will be issued for the portion not being
redeemed):
- -------------------------------------------------------------------------------.
Dated:
-------------------- --------------------------------------
NOTICE: This signature on this Option
to Elect Redemption must correspond
with the name as written upon the face
of the within instrument in every
particular without alteration or
enlargement.
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<PAGE> 1
Exhibit 10.(a)
ISSUING AND PAYING AGENCY AGREEMENT
AGREEMENT made on the 26th day of April, 1994 between THE FIRST
NATIONAL BANK OF BOSTON, a national banking association maintaining its
principal corporate trust office at 150 Royall Street, Canton, Massachusetts
02021 (the "Issuing and Paying Agent"), and USX CORPORATION, a Delaware
corporation having its principal place of business at 600 Grant Street,
Pittsburgh, Pennsylvania 15219-4776 (the "Issuer").
W I T N E S S E T H :
WHEREAS, the Issuer has authorized and may from time to time issue its
Medium-Term Notes, Series C (the "Notes") that are fixed rate notes ("Fixed
Rate Notes") and floating rate notes ("Floating Rate Notes"); and
WHEREAS, the Issuer desires to appoint the Issuing and Paying Agent as
Paying Agent, Issuing Agent and Debt Security registrar with respect to such
Notes as hereinafter set forth; and
WHEREAS, the Issuing and Paying Agent agrees to act as such Issuing
and Paying Agent, Issuing Agent and Debt Security registrar.
NOW, THEREFORE, in consideration of the premises, the mutual promises
hereinafter contained, and intending to be legally bound hereby, the Issuing
and Paying Agent and the Issuer hereby covenant and agree as follows:
ARTICLE I
APPOINTMENT
1. The Issuer hereby appoints the Issuing and Paying Agent as its
Issuing and Paying Agent, Issuing Agent and Debt Security registrar with
respect to the Notes pursuant to the Indenture dated as of March 15, 1993
between the Issuer and PNC Bank, National Association, as Trustee, to perform
the duties hereinafter set forth.
2. The Issuing and Paying Agent hereby accepts such appointments and
agrees to perform the duties hereinafter set forth.
<PAGE> 2
ARTICLE II
ISSUANCE OF NOTES
1. The Issuing and Paying Agent hereby agrees to issue and
authenticate the Notes in accordance with the procedures set forth in Exhibit
C ("Administrative Procedures") to the Distribution Agreement dated April 26,
1994, among the Issuer and the Agents defined therein (the "Distribution
Agreement"), a copy of which Exhibit is attached hereto and made a part hereof.
2. The Issuer hereby agrees that it will promptly notify the Issuing
and Paying Agent of any amendments or modifications to the Distribution
Agreement and that it will not effect any such amendments or modifications
which adversely affect the Issuing and Paying Agent without the prior written
consent of the Issuing and Paying Agent.
ARTICLE III
DEPOSIT OF FUNDS
1. Not later than five (5) business days prior to any interest
payment date described in a Note or Notes, the Issuer shall furnish, or cause
to be furnished, in writing or via telephone promptly confirmed in writing, to
the Issuing and Paying Agent the following information with respect to said
interest payment date and to such Notes: (a) the aggregate amount of interest
to be paid on such interest payment date with respect to any Fixed Rate Note
and the amount of such interest to be paid per $1,000 of principal outstanding;
and (b) such other information as the Issuing and Paying Agent may request from
time to time.
2. Not later than five (5) business days prior to any date on which
principal and premium, if any, is to be paid by the Issuing and Paying Agent
with respect to any of the Notes, whether at maturity, by acceleration, or
otherwise, the Issuer shall furnish, or cause to be furnished, in writing or
via telephone promptly confirmed in writing, to the
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<PAGE> 3
Issuing and Paying Agent a statement specifying such payment date and
containing information with respect to such payment in the nature of the
information described in the preceding paragraph, including such information as
the Issuing and Paying Agent may request from time to time.
3. On or prior to noon, prevailing Eastern time, on each payment date
described in any of the preceding paragraphs of this Article, the Issuer shall
deposit, or cause to be deposited, with the Issuing and Paying Agent finally
collected funds, or funds which have been ordered transferred on the Federal
Reserve System and for which a confirmation number has been issued, in an
amount equal to the aggregate amount to be paid by the Issuing and Paying Agent
on such payment date. In the event the amount deposited with respect to a
payment date is less than the sum of the aggregate amounts specified in
statements furnished to the Issuing and Paying Agent pursuant to this Article
with respect to such payment date, the Issuing and Paying Agent shall promptly
notify the Issuer, and shall effect no payments with respect to such payment
date until such discrepancy has been resolved. Until paid as hereinafter
provided, the Issuing and Paying Agent shall hold such amounts in trust for the
benefit of the holders of the Notes. The Issuing and Paying Agent shall pay to
the Issuer any interest actually earned on or with respect to amounts held or
deposited hereunder prior to the relevant payment date, and invested as
provided below, but shall be under no duty or obligation to otherwise pay
interest or earnings on such amounts or to collateralize or pledge any security
therefor, or to segregate such amounts, except as required by law. Any
investments of such deposited amounts by the Issuing and Paying Agent shall be
at the written direction of the Issuer.
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<PAGE> 4
ARTICLE IV
PAYMENTS
1. The Issuing and Paying Agent shall effect payment of the amounts
described in paragraph 1 of Article III hereof on the respective interest
payment dates. Such payment may be accomplished by the Issuing and Paying
Agent mailing a check, payable to the registered owner of the Note on the
relevant record date, to the address of such registered owner, in accordance
with the information shown on the register maintained by the Issuing and Paying
Agent, or, at the Issuer's option, by the Issuing and Paying Agent wiring such
amounts to an account specified by such registered owner in a designation in
form and substance satisfactory to the Issuing and Paying Agent.
2. The Issuing and Paying Agent shall effect payment of principal
amounts described in paragraph 2 of Article III hereof, and payment of interest
due at maturity or redemption, in immediately available funds against
presentation of the Note at the principal corporate trust office of the Issuing
and Paying Agent, or at such other office or agency of the Issuer as the Issuer
shall designate in writing to the registered owner of the Note.
3. Notwithstanding any provision elsewhere contained herein, payments
by the Issuing and Paying Agent shall be made only out of amounts deposited
pursuant to paragraph 3 of Article III hereof with the Issuing and Paying Agent
with respect to such payment.
4. The Issuing and Paying Agent will not charge, impose, collect or
receive, from the holder or owner of any Note, any fee or consideration for any
services performed in connection with any payment to such holder or owner of
principal or interest, and any charge for postage, for wiring payment, or
otherwise, shall be charged to, and promptly paid by, the Issuer.
ARTICLE V
-4-
<PAGE> 5
ADDITIONAL DUTIES OF ISSUING AND PAYING AGENT
1. As Debt Security registrar and Issuing Agent for the Notes, the
Issuing and Paying Agent shall: (i) authenticate the Notes originally issued
by the Issuer and Notes substituted for those Notes originally issued; (ii)
maintain an office or agency in the City of New York for the registration (and
for the transfer) of the Notes; (iii) maintain in the City of New York a
register of owners of the Notes (the "Debt Security Register"); (iv) keep and
maintain such other records in such form and manner as it shall determine in
its sole discretion; and (v) perform such related duties as may be necessary
for a Debt Security registrar and Issuing Agent to perform. Such records and
Debt Security register shall upon request be available for inspection by
authorized officers, employees, and agents of the Issuer during the normal
business hours of the Issuing and Paying Agent. Upon the termination of this
Agreement, the Issuing and Paying Agent shall deliver to the Issuer copies of
such records in the form and manner kept by the Issuing and Paying Agent on
such date.
2. With respect to the transfer of Notes, the Issuing and Paying
Agent hereby agrees that it shall: (i) upon presentation of a Note, with a
written transfer of title by the registered owner satisfactory to the Issuing
and Paying Agent (the signature on such instrument being guaranteed), transfer
the title of such Note; (ii) enter the name of the transferee on the Debt
Security register; (iii) cancel and retain each Note surrendered for a payment
of principal upon its making a payment which reduces the unpaid principal
amount of such Note to zero (Notes so cancelled may be delivered by the Issuing
and Paying Agent to the Issuer from time to time, and following any such
delivery the Issuer shall have the sole responsibility for any failure
thereafter to produce any such Note); and (iv) maintain in safekeeping any
blank Note forms delivered to the Issuing and Paying Agent by the Issuer.
3. The Issuing and Paying Agent shall file such Federal and state tax
returns concerning payments hereunder as shall be required of it by applicable
law, but
-5-
<PAGE> 6
shall not be responsible for the collection or withholding of taxes due on such
payments except, and only to the extent, required of the Issuing and Paying
Agent by applicable law. Without limiting the generality of the foregoing, the
Issuer, and not the Issuing and Paying Agent, shall file any reports with
respect to original issue discount.
4. The Issuing and Paying Agent shall have no duties or
responsibilities whatsoever except such duties and responsibilities as are
specifically set forth in this Agreement, and no covenant or obligation shall
be implied in this Agreement against the Issuing and Paying Agent.
ARTICLE VI
CONCERNING THE ISSUING AND PAYING AGENT
1. The Issuing and Paying Agent shall not be liable for any loss or
damage, including reasonable counsel fees and expenses, resulting from its
actions or failure to act hereunder, except for any loss arising out of its own
bad faith, gross negligence, or willful misconduct. Without limiting the
generality of the foregoing, the Issuing and Paying Agent shall not be liable
for any action taken or omitted in reliance on any obligation, notice,
direction, consent, certificate, affidavit, statement, designation or other
paper or document reasonably believed by it to be genuine and to have been
properly authorized and properly signed or presented.
2. The Issuer shall indemnify and hold harmless the Issuing and
Paying Agent from and against any and all claims, demands, expenses (including
reasonable counsel fees and expenses) and liabilities of any and every nature
which the Issuing and Paying Agent may sustain or incur or which may be
asserted against the Issuing and Paying Agent as a result of any action taken
or omitted by the Issuing and Paying Agent in connection with its obligations
hereunder without bad faith, gross negligence or willful misconduct. At any
time the Issuing and Paying Agent may apply to the Issuer for instructions with
respect to any matter arising under this Agreement and shall be
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<PAGE> 7
fully protected in acting in accordance with such instructions. In addition,
the Issuing and Paying Agent may consult counsel to the Issuer, or its own
counsel, at the reasonable expense of the Issuer, and shall be fully protected
with respect to any action taken or omitted in good faith in accordance with
such advice or opinion of counsel to the Issuing and Paying Agent. The
provisions of the first sentence of this paragraph shall survive the
termination of this Agreement.
3. The Issuing and Paying Agent may employ agents or
attorneys-in-fact, and shall not be liable for any loss or damage arising out
of, or in connection with, the actions or omissions to act of such agents or
attorneys-in-fact provided the Issuing and Paying Agent acted without bad
faith, negligence, or willful misconduct in connection with the selection of
such agents or attorneys-in-fact.
4. The Issuing and Paying Agent makes no representations with respect
to the validity or sufficiency of the Notes, or the use or application of the
proceeds of the sale or distribution thereof, and shall incur no liability with
respect to the foregoing.
5. Notwithstanding any other provision elsewhere contained in this
Agreement, including, without limitation, paragraph 3 of Article III, the
Issuing and Paying Agent is acting solely as agent of the Issuer and does not
assume any obligation or relationship of agency or trust for or with any owners
or holders of Notes, other than the limited obligations with respect to amounts
deposited hereunder contained in said paragraph 3 of Article III.
6. The Issuer shall pay to the Issuing and Paying Agent for its
performance hereunder (i) its reasonable out-of-pocket expenses (including
counsel fees and expenses) incurred in connection with this Agreement,
including, without limitation, those described or referred to in paragraph 4 of
Article IV hereof, and (ii) such compensation as may mutually be agreed upon in
writing by the Issuer and the Issuing and Paying Agent. The provisions of this
paragraph shall survive the termination of this Agreement.
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<PAGE> 8
ARTICLE VII
GENERAL
1. Either of the parties hereto may terminate this Agreement by
giving to the other a notice in writing specifying a termination date which,
unless otherwise waived by the other party, is (a) at least thirty (30) days
after the giving of such notice, and (b) in case such notice is given by the
Issuing and Paying Agency at least fifteen (15) days prior to the next
succeeding date for the payment of interest or principal or premium, if any.
Upon the date specified in such notice, the Issuing and Paying Agent shall,
upon making the delivery required by paragraph 1 of Article V hereof, be
relieved of all duties and responsibilities pursuant to this Agreement.
2. Any notice, request for instructions, or other instrument in
writing authorized or required by this Agreement to be given to either party
shall be effective upon receipt at the following addresses, or at such other
place as either party may from time to time designate in writing:
If to the Issuer: USX Corporation
600 Grant Street
Pittsburgh, Pennsylvania 15219
Telephone: (412) 433-4419, Telecopy: (412) 433-4567
Attention: Corporate Finance Department
-8-
<PAGE> 9
If to the Issuing and Paying Agent:
The First National Bank of Boston
Corporate Trust Administration
150 Royall Street, Mail Stop 45-02-15
Canton, Massachusetts 02021
Telephone: (617) 575-3145, Telecopy: (617) 575-2078.
3. This Agreement: (a) may not be amended or modified in any manner
except by a written agreement executed by both parties; (b) shall extend to and
be binding upon the parties hereto and their respective successors and assigns;
and (c) shall be governed by and construed in accordance with the laws of the
State of New York.
4. This Agreement may be executed in any number of counterparts, each
of which shall be an original; but such counterparts shall together constitute
but one and the same instrument.
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to
be executed by their respective corporate officers, thereunto duly authorized
and their respective corporate seals to be hereunto affixed, as of the day and
year first above written.
[SEAL)
Attest: THE FIRST NATIONAL BANK
OF BOSTON
By:
- ------------------------------- --------------------------------------
Title: Title:
[SEAL)
Attest: USX CORPORATION
/s/ Craig D. Malldy By: /s/ G.R. Haggerty
- ------------------------------- --------------------------------------
Title: Assistant Secretary Title: Vice President & Treasurer
<PAGE> 1
Exhibit 10.(b)
CALCULATION AGENCY AGREEMENT
AGREEMENT made on the 26th day of April, 1994 between THE FIRST
NATIONAL BANK OF BOSTON, a national banking association maintaining its
principal corporate trust office at 150 Royall Street, Canton, Massachusetts
02021 (the "Calculation Agent"), and USX CORPORATION, a Delaware corporation
having its principal place of business at 600 Grant Street, Pittsburgh,
Pennsylvania 15219-4776 (the "Issuer").
W I T N E S S E T H :
WHEREAS, the Issuer proposes to issue and sell certain of its
securities designated as its Medium-Term Notes, Series C (the "Notes"); and
WHEREAS, the Notes will be offered on a continuing basis by the Issuer
through The First Boston Corporation, Goldman, Sachs & Co., J. P. Morgan
Securities Inc., Morgan Stanley & Co. Incorporated, Salomon Brothers Inc and
Shearson Lehman Brothers, Inc., as agents (the "Agents"); and
WHEREAS, the Notes are to be issued under an Indenture (the
"Indenture") dated as of March 15, 1993, between the Issuer and PNC Bank,
National Association, as Trustee (the "Trustee"); and
WHEREAS, the Notes are to be distributed pursuant to the terms of a
Distribution Agreement dated April 26, 1994 (the "Distribution Agreement"),
among the Issuer and the Agents; and
WHEREAS, for the purpose of appointing an agent to calculate the
interest rate based on the CD Rate, the Commercial Paper Rate, the Federal
Funds Effective Rate, LIBOR, the Prime Rate or the Treasury Rate, as
applicable, on the Notes bearing interest at a rate calculated with reference
to such interest rate bases (the "Floating Rate Notes"), the Issuer has
appointed The First National Bank of Boston as its Calculation Agent.
<PAGE> 2
NOW, THEREFORE, in consideration of the premises, the mutual promises
hereinafter contained, and intending to be legally bound hereby, the
Calculation Agent and the Issuer hereby covenant and agree as follows:
1. Upon the terms and subject to the conditions contained herein, the
Issuer hereby appoints the Calculation Agent as its agent for the purpose of
calculating the interest rates on the Notes in the manner and at the times
provided herein, in the Floating Rate Notes, the Prospectus Supplement and the
related Pricing Supplements.
2. (i) The Calculation Agent shall calculate the interest rate and
the amount of interest due on each of the Floating Rate Notes for each interest
accrual period and communicate the same to the Issuer upon the terms and
conditions contained herein and in the Notes. The provisions of the Notes with
respect to interest rate calculations shall not be changed in any respect
without the express consent of the Calculation Agent. The Issuer shall provide
the Calculation Agent with not less than two (2) business days' notice of the
calculation date on which a particular floating rate calculation is to be made
by the Calculation Agent, and the Calculation Agent shall notify the Issuer of
such floating rate calculation on such calculation date and may confirm such
calculation in writing within twenty-four (24) hours after so notifying the
Issuer; (ii) in no event shall the interest rate be less than the minimum
interest rate, if any, or higher than the maximum interest rate, if any,
designated in the applicable Floating Rate Note and in no event shall the
interest rate on the Notes be higher than the maximum rate permitted by New
York law as the same may be modified by United States law of general
application; (iii) the Calculation Agent shall calculate the amount of interest
payable on each Floating Rate Note in the manner and at the times set forth in
such Note; and (iv) as soon as practicable after each interest determination
date, the Calculation Agent will cause to be forwarded to the Issuer
information regarding the interest rates, the interest periods, the amount of
interest for each interest period and
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<PAGE> 3
the relevant interest payment dates. The Calculation Agent will, upon the
request of any holder of any Floating Rate Note, provide the interest rate
which will become effective as a result of a determination made on the most
recent interest determination date with respect to such Note.
3. The Calculation Agent shall exercise due care to determine the
interest rates on the Floating Rate Notes and shall communicate the same to the
Issuer, the Trustee, The Depository Trust Company and any paying agent
identified to it in writing as soon as practicable after each determination.
The Calculation Agent will, upon the request of the holder of any Floating Rate
Note, provide the interest rate then in effect with respect to such Floating
Rate Note and, if determined, the interest rate with respect to such Floating
Rate Note which will become effective on the next Interest Reset Date. The
Calculation Agent and the Issuer agree to comply with the Administrative
Procedures attached hereto as Exhibit A. No amendment to the provisions of the
Administrative Procedures relating to the duties or obligations of the
Calculation Agent hereunder may become effective without the prior written
consent of the Calculation Agent, which consent shall not be unreasonably
withheld.
4. The Calculation Agent accepts its obligations set forth herein,
upon the terms and subject to the conditions hereof, including the following,
to all of which the Issuer agrees:
(a) The Calculation Agent shall be entitled to such compensation
as may be agreed upon with the Issuer for all services rendered by the
Calculation Agent, and the Issuer promises to pay such compensation and to
reimburse the Calculation Agent for the reasonable out-of-pocket expenses
(including attorney's and other professional's fees and expenses) incurred by
it in connection with the services rendered by it hereunder upon receipt of
such invoices as the Issuer shall reasonably require. The Issuer also agrees
to indemnify the Calculation Agent for, and to hold it
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<PAGE> 4
harmless against, any and all loss, liability, damage, claim or expense
(including the costs and expenses of defending against any claim of liability)
incurred by the Calculation Agent that rises out of or in connection with its
accepting appointment as, or acting as, Calculation Agent hereunder, except
such as may result from the gross negligence, willful misconduct or bad faith
of the Calculation Agent or any of its agents or employees. The Calculation
Agent shall incur no liability and shall be indemnified and held harmless by
the Issuer for, or in respect of, any actions taken, omitted to be taken or
suffered to be taken in good faith by the Calculation Agent in reliance upon
(i) the opinion or advice of legal advisors satisfactory to it or (ii) written
instructions from the Issuer. The Calculation Agent shall not be liable for
any error resulting from the use of or reliance on a source of information used
in good faith and with due care to calculate any interest rate hereunder. The
provisions of this Section shall survive the termination of this Agreement.
(b) In acting under this Agreement and in connection with the
Floating Rate Notes, the Calculation Agent is acting solely as agent of the
Issuer and does not assume any obligations or relationship of agency or trust
for or with any of the owners or holders of the Notes.
(c) The Calculation Agent shall be protected and shall incur no
liability for or in respect of any action taken or omitted to be taken or
anything suffered by it in reliance upon the terms of the Notes, any notice,
direction, certificate, affidavit, statement or other paper, document or
communication reasonably believed by it to be genuine and to have been approved
or signed by the proper party or parties.
(d) The Calculation Agent, its officers, directors, employees and
shareholders may become the owners of, or acquire any interest in, any Notes,
with the same rights that it or they would have if it were not the Calculation
Agent, and may
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<PAGE> 5
engage or be interested in any financial or other transaction with the Issuer
as freely as if it were not the Calculation Agent.
(e) Neither the Calculation Agent nor its officers, directors,
employees, agents or attorneys shall be liable to the Issuer for any act or
omission hereunder, or for any error of judgment made in good faith by it or
them, except in the case of its or their gross negligence or willful
misconduct.
(f) The Calculation Agent may consult with counsel and the
written advice of such counsel or any opinion of counsel shall be full and
complete authorization and protection in respect of any action taken, suffered
or omitted by it hereunder in good faith and in reliance thereon.
(g) The Calculation Agent shall be obligated to perform such
duties and only such duties as are herein specifically set forth, and no
implied duties or obligations shall be read into this Agreement against the
Calculation Agent.
(h) Unless herein otherwise specifically provided, any order,
certificate, notice, request, direction or other communication from the Issuer
made or given by it under any provision of this Agreement shall be sufficient
if signed by any officer of the Issuer.
(i) The Calculation Agent may, upon obtaining the prior written
consent of the Issuer, perform any duties hereunder either directly or by or
through agents or attorneys, and the Calculation Agent shall not be responsible
for any misconduct or negligence on the part of any agent or attorney appointed
with due care by it hereunder.
(j) The Issuer will not, without first obtaining the prior
written consent of the Calculation Agent, make any change to the Notes in the
forms filed as exhibits to the Issuer's Current Report on Form 8-K dated April
26, 1994 if such change would
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<PAGE> 6
materially and adversely affect the Calculation Agent's duties and obligations
under this Agreement.
5. (a) The Calculation Agent may at any time resign as Calculation
Agent by giving written notice to the Issuer of such intention on its part,
specifying the date on which its desired resignation shall become effective;
provided, however, that such date shall never be earlier than thirty (30) days
after the receipt of such notice by the Issuer, unless the Issuer agrees to
accept a shorter period of notice. The Calculation Agent may be removed at any
time by the filing with it of any instrument in writing signed on behalf of the
Issuer and specifying such removal and the date when it is intended to become
effective. Such resignation or removal shall take effect upon the date of the
appointment by the Issuer, as hereinafter provided, of a successor Calculation
Agent. If a successor Calculation Agent has not been appointed five (5) days
prior to when any resignation or removal is to take effect, the Calculation
Agent may petition a court of competent jurisdiction to appoint a successor
Calculation Agent. A successor Calculation Agent shall be appointed by the
Issuer by an instrument in writing signed on behalf of the Issuer and the
successor Calculation Agent. Upon the appointment of a successor Calculation
Agent and acceptance by it of such appointment, the Calculation Agent so
superseded shall cease to be such Calculation Agent hereunder. Upon its
resignation or removal, the Calculation Agent shall be entitled to the payment
by the Issuer of its compensation, if any is owed to it, for services rendered
hereunder and to the reimbursement of all reasonable out-of-pocket expenses
incurred in connection with the services rendered by it hereunder.
(b) Any successor Calculation Agent appointed hereunder shall
execute and deliver to its predecessor and to the Issuer an instrument
accepting such appointment hereunder, and thereupon such successor Calculation
Agent, without any further act, deed or conveyance, shall become vested with
all the authority, rights,
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<PAGE> 7
powers, trusts, immunities, duties and obligations of such predecessor with
like effect as if originally named as such Calculation Agent hereunder, and
such predecessor, upon payment of its charges and disbursements then unpaid,
shall thereupon become obliged to transfer and deliver, and such successor
Calculation Agent shall be entitled to receive, copies of any relevant records
maintained by such predecessor Calculation Agent.
(c) Any corporation into which the Calculation Agent may be
merged, or any corporation with which the Calculation Agent may be
consolidated, or any corporation resulting from any merger or consolidation to
which the Calculation Agent shall sell or otherwise transfer all or
substantially all of its assets and business shall, to the extent permitted by
applicable law, be the successor Calculation Agent under this Agreement without
the execution or filing of any paper or any further act on the part of any of
the parties hereto. Notice of any such merger, consolidation or sale shall
forthwith be given to the Issuer and the Trustee.
6. Any notice required to be given hereunder shall be delivered in
person, sent by letter or communicated by telephone (subject, in the case of
communication by telephone, to confirmation in writing dispatched within
twenty-four (24) hours), to the following:
If to the Issuer: USX Corporation
600 Grant Street
Pittsburgh, Pennsylvania 15219
telephone: (412) 433-4419
telecopy: (412) 433-4567
Attention: Corporate Finance Department
-7-
<PAGE> 8
If to the Calculation Agent: The First National Bank of Boston
Corporate Trust Administration
150 Royall Street, Mail Stop 45-02-15
Canton, Massachusetts 02021
telephone: (617) 575-3145
telecopy: (617) 575-2078
and, in the case of: The Depository Trust Company
Manager Announcements, Dividend Department,
The Depository Trust Company
7 Hanover Square - 22nd Floor
New York, New York 10004
telecopy: (212) 709-1264 or (212) 709-1263,
or to any other address of which any party shall have notified the others in
writing as herein provided. Any notice hereunder given by telephone, telecopy
or letter shall be effective upon receipt.
7. This Agreement shall be governed by, and construed in accordance
with, the laws of the State of New York.
8. This Agreement may be executed by each of the parties hereto in
any number of counterparts, each of which counterparts, when so executed and
delivered, shall be deemed to be an original and all such counterparts shall
together constitute one and the same agreement.
9. In the event of any conflict relating to the rights or obligations
of the Calculation Agent in connection with the calculation of the interest
rate on the Floating Rate Notes, the relevant terms of this Agreement shall
govern such rights and obligations.
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<PAGE> 9
10. Terms used but not defined herein shall have the meanings
assigned to them in the Prospectus, dated April 8, 1994, and the Prospectus
Supplement thereto, dated April 26, 1994, relating to the Notes.
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to
be executed as of the date first above written.
USX CORPORATION
By /s/ G. R. Haggerty
-------------------------------------
G. R. Haggerty
Vice President & Treasurer
THE FIRST NATIONAL BANK OF BOSTON
By:
------------------------------------
Title:
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<PAGE> 1
EXHIBIT 99.1
Contact: William E. Keslar
Don H. Herring
(412) 433-6870
FOR IMMEDIATE RELEASE
USX CORPORATION ANNOUNCES FIRST QUARTER MARATHON GROUP FINANCIAL RESULTS
PITTSBURGH, April 26, 1994 -- USX Corporation reported Marathon Group
(NYSE:MRO) first quarter 1994 net income of $110 million, or $.38 per share, on
sales of $2.7 billion. Net income in the first quarter of 1993 was $8 million,
or $.02 per share, on sales of $3.0 billion. The results reflected a strong
improvement in downstream operating income.
The Marathon Group's first quarter 1994 net income included a $90
million favorable estimated aftertax effect of an inventory market valuation
adjustment and a gain on the sale of certain production assets. First quarter
1993 net income included the unfavorable cumulative effect of two accounting
changes and a favorable inventory market valuation adjustment, which resulted
in a net estimated aftertax charge of $9 million.
USX Corporation Board Chairman Charles A. Corry commented, "Operating
income continued to reflect an improving refined product market, which
contributed to an excellent first quarter for our downstream operations.
Upstream operating income declined, in spite of increased production volumes
and ongoing expense reductions, reflecting lower oil prices, which were more
than $4 per barrel below last year's first quarter and the lowest since the
third quarter of 1986."
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<PAGE> 2
- 2 -
For the first quarter of 1994 the Marathon Group reported operating
income of $226 million, compared with $106 million in the first quarter of
1993. First quarter operating income for 1994 and 1993 included favorable
pretax noncash adjustments to the inventory market valuation reserve of $128
million and $23 million, respectively.
Operating income for refining, marketing and transportation, or
downstream operations, totaled $97 million in the first quarter of 1994,
compared with $32 million in the first quarter of 1993. The improvement was
mainly due to higher refined product margins primarily resulting from lower
crude costs.
Corry noted that "Marathon's tightly integrated refining and
distribution network allowed the company to meet the needs of all classes of
customers and show significant downstream income improvement despite severe
weather conditions, and a 29-day planned maintenance turnaround at its
Garyville, La. refinery. Marathon's ability to serve its customers in this
severe weather resulted in record quarter operating income for Marathon's Emro
Propane Company subsidiary."
Worldwide exploration and production, or upstream operations, had
operating income of $17 million in the first quarter of 1994, compared with $71
million in the first quarter of 1993. Domestic upstream reported operating
income of $15 million for the first quarter of 1994, compared with $61 million
in the first quarter of 1993. This decrease was primarily due to a nearly $5
per barrel decline in average crude prices, as well as increased dry well
expense, partially offset by higher average natural gas prices and reduced
production expenses. International upstream reported operating income of $2
million in the first quarter of 1994, compared with
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<PAGE> 3
- 3 -
operating income of $10 million in the first quarter of 1993. The decrease was
primarily due to a nearly $4 per barrel decline in average crude prices,
partially offset by lower dry well expense and a 12 percent increase in liquid
hydrocarbon liftings. The increase in liftings was primarily due to the start
of production from the East Brae Field in the U.K. North Sea in late December
1993.
While Corry called exploration and production results "disappointing,"
he noted that efforts to reduce operating costs and dispose of marginal
properties "have kept both domestic and international upstream operations
profitable. Three things stand out in the first quarter: The East Brae
platform in the United Kingdom sector of the North Sea continued to progress
toward its expected peak production rate of 115,000 gross barrels per day;
natural gas sales volumes increased over last year, reflecting higher demand in
Ireland and an increased emphasis on domestic gas activity; and, after eight
years of production declines at our Yates Field in Texas, first quarter net
liquid hydrocarbon production was up over 1,300 barrels per day from last
year's first quarter." Corry stated that "Marathon's extensive application of
new and evolving reservoir management techniques have checked the decline at
Yates, which is producing now in its eighth decade and accounts for 20 percent
of Marathon's domestic liquid hydrocarbon production."
Corry noted that "Continuing low crude prices pose a serious threat to
the viability of domestic producers, who are increasingly shutting in stripper
and other marginal wells. Marathon alone had
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<PAGE> 4
- 4 -
over 200 wells shut-in at the end of the quarter. While we remain opposed to
any form of direct subsidies or import fees, we are encouraged that
congressional and industry leaders have been working together to come up with a
program of tax incentives that will preserve marginal production, slow the loss
of jobs and help to stem the nation's increasing reliance on imports."
Other income in the first quarter of 1994 reflected a $22 million
pretax gain from the disposal of assets including the sale of certain
production assets.
* * * * * * * *
Supplemental information and statistics and condensed financial
statements for the Marathon Group and condensed consolidated financial
statements for USX Corporation are attached.
- oOo -
<PAGE> 5
MARATHON GROUP OF USX CORPORATION
CONDENSED STATEMENT OF OPERATIONS (Unaudited)
<TABLE>
<CAPTION>
Three Months Ended
March 31
(In Millions Except Per Share Data) 1994 1993*
- -----------------------------------------------------------------------------------------------------------------------
<S> <C> <C>
SALES . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $ 2,747 $ 2,954
Total operating costs . . . . . . . . . . . . . . . . . . . . . . . . . (2,521) (2,848)
------- -------
OPERATING INCOME . . . . . . . . . . . . . . . . . . . . . . . . . . . 226 106
Other income . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 22 10
Net interest and other financial costs . . . . . . . . . . . . . . . . (70) (66)
------- -------
TOTAL INCOME BEFORE INCOME TAXES AND CUMULATIVE
EFFECT OF CHANGES IN ACCOUNTING PRINCIPLES . . . . . . . . . . . . 178 50
Less provision for estimated income taxes . . . . . . . . . . . . . . . 68 19
------- -------
TOTAL INCOME BEFORE CUMULATIVE EFFECT OF CHANGES IN
ACCOUNTING PRINCIPLES . . . . . . . . . . . . . . . . . . . . . . . 110 31
Cumulative effect of changes in accounting principles . . . . . . . . . - (23)
------- -------
NET INCOME . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 110 8
Dividends on preferred stock . . . . . . . . . . . . . . . . . . . . . (1) (2)
------- -------
NET INCOME APPLICABLE TO MARATHON STOCK . . . . . . . . . . . . . . . . $ 109 $ 6
======= =======
Per common share data:
Weighted average shares, in thousands
- Primary . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 286,582 286,610
- Fully diluted . . . . . . . . . . . . . . . . . . . . . . . . . . 292,829 286,612
Primary and fully diluted:
Total income before cumulative effect of
changes in accounting principles applicable
to Marathon Stock . . . . . . . . . . . . . . . . . . . . . . $ .38 $ .10
Cumulative effect of changes in accounting
principles . . . . . . . . . . . . . . . . . . . . . . . . . - (.08)
Net income applicable to Marathon Stock . . . . . . . . . . . . .38 .02
Dividends paid . . . . . . . . . . . . . . . . . . . . . . . . . . .17 .17
</TABLE>
*Restated as a result of the adoption of two new accounting standards.
CONDENSED BALANCE SHEET (Unaudited)
<TABLE>
<CAPTION>
Mar. 31 Dec. 31 Mar. 31 Dec. 31
(In Millions) 1994 1993 1994 1993
- -----------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
ASSETS LIABILITIES AND
Cash and cash STOCKHOLDERS' EQUITY
equivalents . . . . . . . . . $ 89 $ 185 Current liabilities . . . . . $ 1,466 $ 1,668
Receivables - net . . . . . . . 331 337 Long-term debt . . . . . . . 4,013 4,239
Inventories . . . . . . . . . . 1,026 987 Other liabilities . . . . . . 2,012 1,789
Other current assets . . . . . 88 89
------- ------- ------- -------
Total current assets . . . 1,534 1,598 Total liabilities . . . . . 7,491 7,696
Property, plant and Preferred stock . . . . . . . . 78 78
equipment - net . . . . . . . 8,346 8,428 Common stockholders'
Other assets . . . . . . . . . 780 780 equity . . . . . . . . . . . 3,091 3,032
------- ------- ------- -------
Total . . . . . . . . . . . $10,660 $10,806 Total . . . . . . . . . . . $10,660 $10,806
======= ======= ======= =======
</TABLE>
The following notes are an integral part of these financial statements.
<PAGE> 6
MARATHON GROUP OF USX CORPORATION
SELECTED NOTES TO CONDENSED FINANCIAL STATEMENTS
The condensed financial statements of the Marathon Group include the results of
operations and financial position for the businesses of Marathon Oil Company
and certain other subsidiaries of USX, and a portion of the corporate assets,
liabilities and related transactions which are not separately identified with
ongoing operating units of USX. These condensed financial statements should be
read in connection with the condensed consolidated financial statements of USX.
Changes in the inventory market valuation reserve resulted in a $128 million
and $23 million credit to operating income in the first quarter of 1994 and
1993, respectively.
Other income in the first quarter of 1994 included pretax gains of $22 million
from disposal of assets, primarily related to the sale of certain production
assets.
The provision for estimated income taxes for periods reported is based on tax
rates and amounts which recognize management's best estimate of current and
deferred tax assets and liabilities in accordance with USX's tax allocation
policy.
In 1993, USX adopted Statement of Financial Accounting Standards No. 112,
"Employers' Accounting for Postemployment Benefits" (SFAS No. 112), and
Emerging Issues Task Force Consensus No. 93-14, "Accounting for Multiple-Year
Retrospectively Rated Insurance Contracts" (EITF No. 93-14). The cumulative
effect of these changes in accounting principles decreased first quarter 1993
net income by $17 million, net of $10 million income tax effect, for SFAS No.
112; and $6 million, net of $3 million income tax effect, for EITF No. 93-14.
April 26, 1994
<PAGE> 7
MARATHON GROUP OF USX CORPORATION
SUPPLEMENTAL INFORMATION
($'s in Millions)
<TABLE>
<CAPTION>
First Quarter
Ended
March 31
----------------
1994 1993
------ -------
<S> <C> <C>
SALES $ 2,747 $ 2,954
OPERATING INCOME (LOSS)
Exploration & Production
Domestic $ 15 $ 61
International 2 10
Refin., Market. & Trans. 97 32
Gas Gathering & Processing 1 1
Administrative (17) (21)
Inventory Mkt. Val. Res. Adj. 128 23
------- -------
Total Marathon Group $ 226 $ 106
======= =======
CAPITAL EXPENDITURES $ 113 $ 166
EXPLORATION EXPENSE
Domestic & International $ 33 $ 28
OPERATING STATISTICS
Net Liquids Production (a):
Domestic 110.5 112.9
International 48.7 43.6
------- -------
Worldwide 159.2 156.5
Net Natural Gas Production (b):
Domestic 572.4 568.4
International 413.7 393.7
------- -------
Worldwide 986.1 962.1
Average Sales Prices:
Liquid Hydrocarbons (per Bbl)
Domestic $ 11.19 $ 15.85
International 13.91 17.48
Natural Gas (per Mcf)
Domestic $ 2.07 $ 1.88
International 1.44 1.56
Crude Oil Refined (a) 440.8 541.4
Refined Products Sold (a) 686.0 706.4
</TABLE>
- ------------
(a) Thousands of barrels per day
(b) Millions of cubic feet per day
<PAGE> 8
USX CORPORATION AND SUBSIDIARY COMPANIES
CONDENSED CONSOLIDATED STATEMENT OF OPERATIONS (Unaudited)
<TABLE>
<CAPTION>
Three Months Ended
March 31
(In Millions Except Per Share Data) 1994 1993*
- --------------------------------------------------------------------------------------
<S> <C> <C>
SALES . . . . . . . . . . . . . . . . . . . . . $ 4,273 $ 4,280
Total operating costs . . . . . . . . . . . . . (4,069) (4,122)
------- -------
OPERATING INCOME. . . . . . . . . . . . . . . . 204 158
Other income. . . . . . . . . . . . . . . . . . 28 37
Net interest and other financial costs. . . . . (108) (112)
------- -------
TOTAL INCOME BEFORE INCOME TAXES AND CUMULATIVE
EFFECT OF CHANGES IN ACCOUNTING PRINCIPLES. . 124 83
Less provision for estimated income taxes . . . 49 36
------- -------
TOTAL INCOME BEFORE CUMULATIVE EFFECT OF CHANGES
IN ACCOUNTING PRINCIPLES. . . . . . . . . . . 75 47
Cumulative effect of changes in accounting
principles. . . . . . . . . . . . . . . . . . - (92)
------- -------
NET INCOME (LOSS) . . . . . . . . . . . . . . . 75 (45)
Dividends on preferred stock. . . . . . . . . . (7) (4)
------- -------
NET INCOME (LOSS) APPLICABLE TO COMMON STOCKS . $ 68 $ (49)
======= =======
</TABLE>
*Restated as a result of the adoption of two new accounting standards.
<TABLE>
<CAPTION>
CONDENSED CONSOLIDATED BALANCE SHEET (Unaudited)
Mar. 31 Dec. 31 Mar. 31 Dec. 31
(In Millions) 1994 1993 1994 1993
- -----------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
ASSETS LIABILITIES AND
Cash and cash STOCKHOLDERS' EQUITY
equivalents . . . . . $ 137 $ 268 Current liabilities. . $ 2,728 $ 3,334
Receivables - net . . . . 844 932 Long-term debt . . . . 5,695 5,888
Inventories . . . . . . . 1,663 1,626 Other liabilities. . . 4,619 4,288
Other current assets. . . 356 354
------- ------- ------- -------
Total current assets 3,000 3,180 Total liabilities. . 13,042 13,510
Property, plant and Preferred stock . . . . 112 112
equipment - net. . . . 11,488 11,603 Common stockholders'
Other assets. . . . . . . 2,623 2,591 equity . . . . . . . 3,957 3,752
------- ------- ------- -------
Total. . . . . . . . . $17,111 $17,374 Total. . . . . . . . $17,111 $17,374
======= ======= ======= =======
</TABLE>
The following common share data and notes are an integral part of these
financial statements.
<PAGE> 9
USX CORPORATION AND SUBSIDIARY COMPANIES
COMMON SHARE DATA (Unaudited)
<TABLE>
<CAPTION>
Three Months Ended
March 31
(In Millions Except Per Share Data) 1994 1993*
- ----------------------------------------------------------------------------------------
<S> <C> <C>
Applicable to Marathon Stock
Total income before cumulative effect of
changes in accounting principles applicable
to Marathon Stock. . . . . . . . . . . . . $ 109 $ 29
--Per share - primary and fully diluted. . .38 .10
Cumulative effect of changes in accounting
principles . . . . . . . . . . . . . . . . - (23)
--Per share - primary and fully diluted. . - (.08)
Net income applicable to Marathon Stock. . . 109 6
--Per share - primary and fully diluted. . .38 .02
Dividends paid per share . . . . . . . . . . .17 .17
Weighted average shares, in thousands
--Primary. . . . . . . . . . . . . . . . . 286,582 286,610
--Fully diluted. . . . . . . . . . . . . . 292,829 286,612
Applicable to Steel Stock
Total income (loss) before cumulative effect
of change in accounting principle
applicable to Steel Stock. . . . . . . . . $ (41) $ 8
--Per share - primary and fully diluted. . (.56) .13
Cumulative effect of change in accounting
principle. . . . . . . . . . . . . . . . . - (69)
--Per share - primary and fully diluted. . - (1.16)
Net loss applicable to Steel Stock . . . . . (41) (61)
--Per share - primary and fully diluted. . (.56) (1.03)
Dividends paid per share . . . . . . . . . . .25 .25
Weighted average shares, in thousands
--Primary. . . . . . . . . . . . . . . . . 73,598 59,978
--Fully diluted. . . . . . . . . . . . . . 73,598 59,981
Applicable to Delhi Stock
Net income applicable to Delhi Stock . . . . $ - $ 6
--Per share - primary and fully diluted. . .03 .62
Dividends paid per share . . . . . . . . . . .05 .05
Weighted average shares, in thousands
--Primary and fully diluted. . . . . . . . 9,332 9,006
</TABLE>
*Restated as a result of the adoption of two new accounting standards.
The following notes are an integral part of these financial statements.
<PAGE> 10
USX CORPORATION AND SUBSIDIARY COMPANIES
SELECTED NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
The financial information for the Marathon Group, the U. S. Steel Group and the
Delhi Group, taken together, includes all accounts which comprise the
corresponding consolidated financial information for USX.
Changes in the inventory market valuation reserve resulted in a $128 million
and $23 million credit to operating income in the first quarter of 1994 and
1993, respectively.
Other income in the first quarter of 1994 included pretax gains of $24 million
from disposal of assets, primarily related to the sale of certain Marathon
production assets. Other income in the first quarter of 1993 included a pretax
gain of $46 million from the disposal of assets, including the sale of an
investment in an insurance company.
The provision for estimated income taxes for periods reported is based on tax
rates and amounts which recognize management's best estimate of current and
deferred tax assets and liabilities.
In 1993, USX adopted Statement of Financial Accounting Standards No. 112,
"Employers' Accounting for Postemployment Benefits" (SFAS No. 112), and
Emerging Issues Task Force Consensus No. 93-14, "Accounting for Multiple-Year
Retrospectively Rated Insurance Contracts" (EITF No. 93-14). The cumulative
effect of these changes in accounting principles decreased first quarter 1993
net income by $86 million, net of $50 million income tax effect, for SFAS No.
112; and $6 million, net of $3 million income tax effect, for EITF No. 93-14.
In the first quarter of 1994, USX sold 5,000,000 shares of Steel Stock to the
public. In addition, USX Capital LLC, a wholly owned subsidiary of USX, sold
$250 million of 8-3/4% Cumulative Monthly Income Preferred Shares.
April 26, 1994
<PAGE> 1
EXHIBIT 99.2
Contact: William E. Keslar
Don H. Herring
(412) 433-6870
FOR IMMEDIATE RELEASE
USX CORPORATION ANNOUNCES FIRST QUARTER
U. S. STEEL GROUP FINANCIAL RESULTS
PITTSBURGH, April 26, 1994 -- USX Corporation reported a first
quarter 1994 net loss for its U. S. Steel Group (NYSE:X) of $35 million, or
$.56 per share. Utility curtailments and other severe winter weather
complications, an equipment failure which shut down steel production at Mon
Valley Works for 13 days, environmental remediation accruals, a signing bonus
paid under terms of the new labor agreement with the United Steelworkers of
America and outages related to the modernization of the Gary Works hot strip
mill materially contributed to the first quarter 1994 loss. The U. S. Steel
Group's first quarter 1993 net loss was $59 million, or $1.03 per share,
including the effect of an accounting change.
USX Corporation Board Chairman Charles A. Corry said that, "While
first quarter results were disappointing, they were affected by several
unforeseen and unusual circumstances and are not reflective of current strength
in steel markets or of U. S. Steel's ability to be a competitive leader in
those markets. Demand remains strong, the outlook is bright in our key market
sectors and we're confident that U. S. Steel is poised to take advantage of
market conditions in the second quarter and beyond as a low-cost supplier of
products to our customers."
- more -
<PAGE> 2
- 2 -
Sales for the first quarter of 1994 totaled $1.4 billion compared
with $1.2 billion in the first quarter of 1993. The Group had a $24 million
operating loss in the first quarter of 1994, compared with operating income of
$35 million in the first quarter of 1993 of which $28 million resulted from the
use of previously established insurance reserves to pay for certain employee
insurance benefits.
Steel shipments increased by 9 percent over first quarter 1993 levels
and prices increased modestly. However, January's record low temperatures and
extreme snow and ice conditions disrupted raw materials and steel producing
operations and caused mandated utility curtailments at U. S. Steel facilities
in the Midwest and Northeast as well as the USS/Kobe Steel Company joint
venture in Ohio.
In addition, on March 18, a steel ladle failure at Mon Valley Works
near Pittsburgh caused extensive damage and required the shutdown of steel
production facilities for 13 days. This outage resulted in costs for facility
repairs, lost steel production and reduced operating levels at downstream
finishing facilities. Steel production at Mon Valley Works returned to normal
levels in early April.
First quarter 1994 operating results reflected a reduction in
net pension credits and the adverse effects of increased scrap prices from the
prior-year quarter. The 1994 quarter also included accruals for environmental
remediation at two non-operating locations and the effects of a labor agreement
signing bonus.
Other income for the first quarter of 1993 included a pretax gain of
$38 million from the disposal of assets, including the sale of an investment in
an insurance company.
- more -
<PAGE> 3
- 3 -
Corry continued, "In the second quarter, U. S. Steel anticipates
taking advantage of the strong market and our ongoing programs to improve
quality and productivity and to reduce costs. Traditionally, raw materials
performance -- our coke and taconite operations -- improves in the second
quarter, and that upswing should be even more pronounced this year following
the severe first quarter weather. If steel demand remains high, as we expect,
we should continue to benefit from high shipment levels and price
improvements."
U. S. Steel continues to forecast 1994 domestic steel shipments of
close to 90 million tons, up 2 percent over 1993 levels. Much of the strength
is seen in the capital goods market as well as in the automotive and appliance
markets, which are consumers of the high quality value-added flat-rolled
steel products which U. S. Steel emphasizes in its commercial and operating
strategies.
Corry noted that the strength in the domestic steel market and
lingering recession in other parts of the world raise potential concerns about
increased unfairly traded steel imports into the United States. He reiterated
USX's intentions of filing additional antidumping and countervailing duty
petitions if unfair steel trade threatens U. S. Steel.
In March, Gary Works received the General Motors Mark of Excellence,
recognizing the plant's performance in quality, delivery, cost and technical
leadership. With that award, U. S. Steel became the only steel company to earn
the top supplier awards from each of the Big Three automakers.
- more -
<PAGE> 4
- 4 -
* * * * * * * *
Supplemental statistics and condensed financial statements for the
U. S. Steel Group and condensed consolidated financial statements for USX
Corporation are attached.
- oOo -
<PAGE> 5
U. S. STEEL GROUP OF USX CORPORATION
CONDENSED STATEMENT OF OPERATIONS (Unaudited)
<TABLE>
<CAPTION>
Three Months Ended
March 31
(In Millions Except Per Share Data) 1994 1993*
- ---------------------------------------------------------------------------------------------------------------------
<S> <C> <C>
SALES . . . . . . . . . . . . . . . . . . . . . . . . . . $ 1,384 $ 1,208
Total operating costs . . . . . . . . . . . . . . . . . . (1,408) (1,173)
------- -------
OPERATING INCOME (LOSS) . . . . . . . . . . . . . . . . . (24) 35
Other income . . . . . . . . . . . . . . . . . . . . . . 5 27
Net interest and other financial costs . . . . . . . . . (35) (43)
------- -------
TOTAL INCOME (LOSS) BEFORE INCOME TAXES AND CUMULATIVE
EFFECT OF CHANGE IN ACCOUNTING PRINCIPLE . . . . . . . (54) 19
Less provision (credit) for estimated income taxes . . . (19) 9
------- -------
TOTAL INCOME (LOSS) BEFORE CUMULATIVE EFFECT OF
CHANGE IN ACCOUNTING PRINCIPLE . . . . . . . . . . . . (35) 10
Cumulative effect of change in accounting principle . . . - (69)
------- -------
NET LOSS . . . . . . . . . . . . . . . . . . . . . . . . (35) (59)
Dividends on preferred stock . . . . . . . . . . . . . . (6) (2)
------- -------
NET LOSS APPLICABLE TO STEEL STOCK . . . . . . . . . . . $ (41) $ (61)
======= =======
Per common share data:
Weighted average shares, in thousands
- Primary . . . . . . . . . . . . . . . . . . . . . . 73,598 59,978
- Fully diluted . . . . . . . . . . . . . . . . . . . 73,598 59,981
Primary and fully diluted:
Total income (loss) before cumulative effect
of change in accounting principle . . . . . . . . $ (.56) $ .13
Cumulative effect of change in accounting
principle . . . . . . . . . . . . . . . . . . . . . - (1.16)
Net loss applicable to Steel Stock . . . . . . . . . . (.56) (1.03)
Dividends paid . . . . . . . . . . . . . . . . . . . . .25 .25
</TABLE>
*Restated as a result of the adoption of a new accounting standard.
CONDENSED BALANCE SHEET (Unaudited)
<TABLE>
<CAPTION>
Mar. 31 Dec. 31 Mar. 31 Dec. 31
(In Millions) 1994 1993 1994 1993
- ---------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
ASSETS LIABILITIES AND
Cash and cash STOCKHOLDERS' EQUITY
equivalents . . . . . . . . . $ 47 $ 79 Current liabilities . . . . . $1,221 $1,621
Receivables - net . . . . . . . 532 596 Long-term debt . . . . . . . . 1,599 1,540
Inventories . . . . . . . . . . 629 629 Other liabilities . . . . . . 2,941 2,838
Other current assets . . . . . 283 271
------ ------ ------ ------
Total current assets . . . . 1,491 1,575 Total liabilities . . . . . . 5,761 5,999
Property, plant and Preferred stock . . . . . . . . 32 32
equipment - net . . . . . . . 2,623 2,653 Common stockholders'
Other assets . . . . . . . . . 2,409 2,388 equity . . . . . . . . . . . . 730 585
------ ------ ------ ------
Total . . . . . . . . . . . . $6,523 $6,616 Total . . . . . . . . . . . . $6,523 $6,616
====== ====== ====== ======
</TABLE>
The following notes are an integral part of these financial statements.
<PAGE> 6
U. S. STEEL GROUP OF USX CORPORATION
SELECTED NOTES TO CONDENSED FINANCIAL STATEMENTS
The condensed financial statements of the U. S. Steel Group include the results
of operations and financial position for all businesses of USX other than the
businesses, assets and liabilities included in the Marathon Group or the Delhi
Group, and a portion of the corporate assets, liabilities and related
transactions which are not separately identified with ongoing operating units
of USX. These condensed financial statements should be read in connection with
the condensed consolidated financial statements of USX.
Other income in the first quarter of 1993 included a pretax gain of $38 million
from disposal of assets, primarily related to the sale of an investment in an
insurance company.
The provision for estimated income taxes for the periods reported is based on
tax rates and amounts which recognize management's best estimate of current and
deferred tax assets and liabilities in accordance with USX's tax allocation
policy.
In 1993, USX adopted Statement of Financial Accounting Standards No. 112,
"Employers' Accounting for Postemployment Benefits" (SFAS No. 112). The
cumulative effect of this change in accounting principle decreased first
quarter 1993 net income of the U. S. Steel Group by $69 million, net of $40
million income tax effect.
In the first quarter of 1994, USX sold 5,000,000 shares of USX-U. S. Steel
Group Common Stock to the public. The proceeds have been reflected in their
entirety in the financial statements of the U. S. Steel Group.
April 26, 1994
<PAGE> 7
U. S. STEEL GROUP OF USX CORPORATION
SUPPLEMENTAL STATISTICS
($'s in Millions)
<TABLE>
<CAPTION>
First Quarter
Ended
March 31
--------------
1994 1993
------ ------
<S> <C> <C>
SALES
Steel and Related Businesses (a) $1,334 $1,166
Other Businesses (b) 50 42
------ ------
Total U. S. Steel Group $1,384 $1,208
====== ======
OPERATING INCOME (LOSS)
Steel and Related Businesses (a) $ (36) $ 7
Other Businesses (b) (7) (7)
Administrative (c) 19 35
------ ------
Total U. S. Steel Group $ (24) $ 35
====== ======
CAPITAL EXPENDITURES $ 44 $ 36
OPERATING STATISTICS
Public & Affil. Shipments (d) 2,461 2,252
Raw Steel-Production (d) 2,743 2,751
Raw Steel-Capability Utilization 92.8% 94.1%
</TABLE>
- -------------
(a) Includes the production and sale of steel products, coke and taconite
pellets; domestic coal mining; the management of mineral resources; and
engineering and consulting services and technology licensing.
(b) Includes real estate; fencing products; leasing and financing activities;
and titanium metal products.
(c) Includes pension credits, other postretirement benefit costs and certain
other expenses principally attributable to former business units of the
U. S. Steel Group as well as the portion of USX corporate general and
administrative costs allocated to the U. S. Steel Group.
(d) Thousands of net tons
<PAGE> 8
USX CORPORATION AND SUBSIDIARY COMPANIES
CONDENSED CONSOLIDATED STATEMENT OF OPERATIONS (Unaudited)
<TABLE>
<CAPTION>
Three Months Ended
March 31
(In Millions Except Per Share Data) 1994 1993*
- --------------------------------------------------------------------------------------
<S> <C> <C>
SALES . . . . . . . . . . . . . . . . . . . . . $ 4,273 $ 4,280
Total operating costs . . . . . . . . . . . . . (4,069) (4,122)
------- -------
OPERATING INCOME. . . . . . . . . . . . . . . . 204 158
Other income. . . . . . . . . . . . . . . . . . 28 37
Net interest and other financial costs. . . . . (108) (112)
------- -------
TOTAL INCOME BEFORE INCOME TAXES AND CUMULATIVE
EFFECT OF CHANGES IN ACCOUNTING PRINCIPLES. . 124 83
Less provision for estimated income taxes . . . 49 36
------- -------
TOTAL INCOME BEFORE CUMULATIVE EFFECT OF CHANGES
IN ACCOUNTING PRINCIPLES. . . . . . . . . . . 75 47
Cumulative effect of changes in accounting
principles. . . . . . . . . . . . . . . . . . - (92)
------- -------
NET INCOME (LOSS) . . . . . . . . . . . . . . . 75 (45)
Dividends on preferred stock. . . . . . . . . . (7) (4)
------- -------
NET INCOME (LOSS) APPLICABLE TO COMMON STOCKS . $ 68 $ (49)
======= =======
</TABLE>
*Restated as a result of the adoption of two new accounting standards.
<TABLE>
<CAPTION>
CONDENSED CONSOLIDATED BALANCE SHEET (Unaudited)
Mar. 31 Dec. 31 Mar. 31 Dec. 31
(In Millions) 1994 1993 1994 1993
- -----------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
ASSETS LIABILITIES AND
Cash and cash STOCKHOLDERS' EQUITY
equivalents . . . . . $ 137 $ 268 Current liabilities. . $ 2,728 $ 3,334
Receivables - net . . . . 844 932 Long-term debt . . . . 5,695 5,888
Inventories . . . . . . . 1,663 1,626 Other liabilities. . . 4,619 4,288
Other current assets. . . 356 354
------- ------- ------- -------
Total current assets 3,000 3,180 Total liabilities. . 13,042 13,510
Property, plant and Preferred stock . . . . 112 112
equipment - net. . . . 11,488 11,603 Common stockholders'
Other assets. . . . . . . 2,623 2,591 equity . . . . . . . 3,957 3,752
------- ------- ------- -------
Total. . . . . . . . . $17,111 $17,374 Total. . . . . . . . $17,111 $17,374
======= ======= ======= =======
</TABLE>
The following common share data and notes are an integral part of these
financial statements.
<PAGE> 9
USX CORPORATION AND SUBSIDIARY COMPANIES
COMMON SHARE DATA (Unaudited)
<TABLE>
<CAPTION>
Three Months Ended
March 31
(In Millions Except Per Share Data) 1994 1993*
- ----------------------------------------------------------------------------------------
<S> <C> <C>
Applicable to Marathon Stock
Total income before cumulative effect of
changes in accounting principles applicable
to Marathon Stock. . . . . . . . . . . . . $ 109 $ 29
--Per share - primary and fully diluted. . .38 .10
Cumulative effect of changes in accounting
principles . . . . . . . . . . . . . . . . - (23)
--Per share - primary and fully diluted. . - (.08)
Net income applicable to Marathon Stock. . . 109 6
--Per share - primary and fully diluted. . .38 .02
Dividends paid per share . . . . . . . . . . .17 .17
Weighted average shares, in thousands
--Primary. . . . . . . . . . . . . . . . . 286,582 286,610
--Fully diluted. . . . . . . . . . . . . . 292,829 286,612
Applicable to Steel Stock
Total income (loss) before cumulative effect
of change in accounting principle
applicable to Steel Stock. . . . . . . . . $ (41) $ 8
--Per share - primary and fully diluted. . (.56) .13
Cumulative effect of change in accounting
principle. . . . . . . . . . . . . . . . . - (69)
--Per share - primary and fully diluted. . - (1.16)
Net loss applicable to Steel Stock . . . . . (41) (61)
--Per share - primary and fully diluted. . (.56) (1.03)
Dividends paid per share . . . . . . . . . . .25 .25
Weighted average shares, in thousands
--Primary. . . . . . . . . . . . . . . . . 73,598 59,978
--Fully diluted. . . . . . . . . . . . . . 73,598 59,981
Applicable to Delhi Stock
Net income applicable to Delhi Stock . . . . $ - $ 6
--Per share - primary and fully diluted. . .03 .62
Dividends paid per share . . . . . . . . . . .05 .05
Weighted average shares, in thousands
--Primary and fully diluted. . . . . . . . 9,332 9,006
</TABLE>
*Restated as a result of the adoption of two new accounting standards.
The following notes are an integral part of these financial statements.
<PAGE> 10
USX CORPORATION AND SUBSIDIARY COMPANIES
SELECTED NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
The financial information for the Marathon Group, the U. S. Steel Group and the
Delhi Group, taken together, includes all accounts which comprise the
corresponding consolidated financial information for USX.
Changes in the inventory market valuation reserve resulted in a $128 million
and $23 million credit to operating income in the first quarter of 1994 and
1993, respectively.
Other income in the first quarter of 1994 included pretax gains of $24 million
from disposal of assets, primarily related to the sale of certain Marathon
production assets. Other income in the first quarter of 1993 included a pretax
gain of $46 million from the disposal of assets, including the sale of an
investment in an insurance company.
The provision for estimated income taxes for periods reported is based on tax
rates and amounts which recognize management's best estimate of current and
deferred tax assets and liabilities.
In 1993, USX adopted Statement of Financial Accounting Standards No. 112,
"Employers' Accounting for Postemployment Benefits" (SFAS No. 112), and
Emerging Issues Task Force Consensus No. 93-14, "Accounting for Multiple-Year
Retrospectively Rated Insurance Contracts" (EITF No. 93-14). The cumulative
effect of these changes in accounting principles decreased first quarter 1993
net income by $86 million, net of $50 million income tax effect, for SFAS No.
112; and $6 million, net of $3 million income tax effect, for EITF No. 93-14.
In the first quarter of 1994, USX sold 5,000,000 shares of Steel Stock to the
public. In addition, USX Capital LLC, a wholly owned subsidiary of USX, sold
$250 million of 8-3/4% Cumulative Monthly Income Preferred Shares.
April 26, 1994
<PAGE> 1
EXHIBIT 99.3
Contact: William E. Keslar
Don H. Herring
(412) 433-6870
FOR IMMEDIATE RELEASE
USX CORPORATION ANNOUNCES FIRST QUARTER DELHI GROUP FINANCIAL RESULTS
PITTSBURGH, April 26, 1994 -- USX Corporation reported first quarter
1994 net income for its Delhi Group (NYSE:DGP) of $.4 million, or $.03 per
share, which included an estimated aftertax benefit of $1.0 million for an
accrual reversal related to a litigation settlement. First quarter 1994 sales
totaled $154.4 million, an increase of 18 percent from the prior-year quarter.
Net income in the first quarter of 1993 was $8.7 million, or $.62 per share.
USX Corporation Board Chairman Charles A. Corry noted, "Despite the
lower first quarter results, Delhi continued to expand its capital expenditure
program to connect dedicated natural gas reserves. This is reflected in
increased first quarter gas sales throughput volumes, which were up 22 percent
over 1993 first quarter volumes."
First quarter operating income for the Delhi Group totaled $2.5
million, down $14.6 million from the first quarter of 1993. The benefits of
higher gas sales throughput were more than offset by lower average sales prices
for natural gas liquids (NGLs), higher plant feedstock costs and lower gas
sales margins primarily resulting from reduced premiums from Southwestern
Electric Power Company (SWEPCO) and warmer weather in Delhi's premium customer
service areas. Most of the increase in sales
- more -
<PAGE> 2
- 2 -
throughput was due to increased spot market sales rather than higher margin
sales to premium customers. Due to lower first quarter 1994 NGLs sales prices,
which were adversely impacted by falling crude oil prices, Delhi chose not to
fully process some gas, which resulted in a decline in NGLs sales volumes.
First quarter 1994 operating income included a $1.6 million favorable pretax
effect of the settlement of litigation for less than the amount previously
accrued. First quarter 1993 operating income included a $1.8 million favorable
effect of the reversal of a prior-period accrual related to a natural gas
contract settlement.
On January 26, 1994, Delhi and SWEPCO resolved litigation related to
a 15-year natural gas purchase contract which was due to expire in April 1995.
The settlement agreement provided that SWEPCO pay Delhi the original contract
price through January 1994. Concurrently, Delhi executed a new four-year
agreement enabling Delhi to supply increased volumes of gas to two SWEPCO power
plants in East Texas at market sensitive prices with premiums based on the
level of service provided. The agreement provides for swing service and does
not require any minimum gas purchase volumes. Although the agreement adversely
impacted first quarter 1994 operating income by about $3 million due to the
lower premiums received in February and March, it provides for the continuation
of a long-standing relationship with a major customer.
During the first quarter of 1994, Delhi completed a project in
western Oklahoma which expanded system and processing capacity and improved
Delhi's access to interstate markets. Delhi added compression, made new
pipeline interconnections with third parties, and redesigned and moved a
previously idled processing plant which began operation in March.
- more -
<PAGE> 3
- 3 -
Corry noted, "Delhi remains committed to optimizing existing assets
such as those in western Oklahoma. In the third quarter of 1994, we expect to
complete a project there which includes constructing approximately 21 miles of
pipe to provide additional system capacity to the newly relocated plant.
System flexibility and reliability were also enhanced in the first quarter as
we began utilizing our East Texas storage space. An arrangement to store up to
2.5 billion cubic feet of natural gas was entered into in the fourth quarter of
last year with a large local distribution company (LDC)."
Corry also stated, "Delhi is well positioned to take advantage of
emerging fundamentals in the gas industry. Demand continues to be high, pumped
up by 'clean fuels' initiatives and increased economic activity. Our capital
and marketing efforts, particularly a multi-pipeline interconnection and
compression project in the Carthage area of East Texas, were successful in
generating new premium market sales which included winter month off-system
sales associated with FERC Order No. 636. These first quarter sales were to
LDCs outside Delhi's traditional marketing area and are representative of our
increasing ability to access new marketing opportunities developing in the
Midwest and Northeast."
Delhi is an established natural gas merchant engaged in the
purchasing, gathering, processing, transporting and marketing of natural gas.
It operates an extensive pipeline system of over 8,000 miles and has 22 gas
processing plants, primarily in Texas and Oklahoma.
* * * * * *
Supplemental statistics and condensed financial statements for the
Delhi Group and condensed consolidated financial statements for USX Corporation
are attached.
- oOo -
<PAGE> 4
DELHI GROUP OF USX CORPORATION
CONDENSED STATEMENT OF OPERATIONS (Unaudited)
<TABLE>
<CAPTION>
Three Months Ended
March 31
(In Millions Except Per Share Data) 1994 1993
- -------------------------------------------------------------------------------------
<S> <C> <C>
SALES . . . . . . . . . . . . . . . . . . . . . $ 154.4 $ 131.0
Total operating costs . . . . . . . . . . . . . (151.9) (113.9)
------- -------
OPERATING INCOME. . . . . . . . . . . . . . . . 2.5 17.1
Other income. . . . . . . . . . . . . . . . . . .9 2.8
Net interest and other financial costs. . . . . (2.7) (2.5)
------- -------
TOTAL INCOME BEFORE INCOME TAXES. . . . . . . . .7 17.4
Less provision for estimated income taxes . . . .3 8.7
------- -------
NET INCOME. . . . . . . . . . . . . . . . . . . .4 8.7
Net income applicable to Retained Interest. . . (.1) (3.1)
------- -------
NET INCOME APPLICABLE TO OUTSTANDING DELHI STOCK $ .3 $ 5.6
======= =======
Per common share data:
Weighted average shares, in thousands
- Primary and fully diluted . . . . . . . . . 9,332 9,006
Net income - primary and fully diluted. . . . $ .03 $ .62
Dividends paid . . . . . . . . . . . . . . . .05 .05
</TABLE>
CONDENSED BALANCE SHEET (Unaudited)
<TABLE>
<CAPTION>
Mar. 31 Dec. 31 Mar. 31 Dec. 31
(In Millions) 1994 1993 1994 1993
- ----------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
ASSETS LIABILITIES AND
Cash and cash . . . . . . STOCKHOLDERS' EQUITY
equivalents . . . . . . $ 1.0 $ 3.8 Current liabilities. . $105.5 $102.4
Receivables - net . . . . 9.2 24.2 Long-term debt . . . . 83.4 109.0
Inventories . . . . . . . 7.7 9.6 Other liabilities. . . 163.7 163.5
Other current assets. . . 4.6 4.6
------ ------ ------ ------
Total current assets 22.5 42.2 Total liabilities . . 352.6 374.9
Property, plant and Preferred stock . . . . 2.5 2.5
equipment - net. . . . . 518.5 521.8 Common stockholders'
Other assets. . . . . . . 16.8 16.4 equity . . . . . . . . 202.7 203.0
------ ------ ------ ------
Total . . . . . . . . . $557.8 $580.4 Total . . . . . . . . $557.8 $580.4
====== ====== ====== ======
</TABLE>
The following notes are an integral part of these financial statements.
<PAGE> 5
DELHI GROUP OF USX CORPORATION
SELECTED NOTES TO CONDENSED FINANCIAL STATEMENTS
The condensed financial statements of the Delhi Group include the results of
operations and financial position for the businesses of Delhi Gas Pipeline
Corporation and certain subsidiaries of USX, and a portion of the corporate
assets, liabilities and related transactions which are not separately
identified with ongoing operating units of USX. These condensed financial
statements should be read in connection with the condensed consolidated
financial statements of USX.
The USX Board of Directors initially designated 14,000,000 shares of Delhi
Stock to represent 100% of the common stockholders' equity value of USX
attributable to the Delhi Group. The Delhi Fraction is the percentage interest
in the Delhi Group represented by the shares of Delhi Stock that are
outstanding at any particular time and, based on 9,366,673 outstanding shares
as of March 31, 1994, is approximately 67%. The Marathon Group financial
statements reflect a Retained Interest of approximately 33%.
Other income in the first quarter of 1993 included a pretax gain of $1.6
million from the sale of a 25% interest in a natural gas transmission
partnership. The provision for estimated income taxes for the first quarter of
1993 included an unfavorable tax effect associated with the sale of the
partnership interest, which resulted in a $1.2 million net loss on the
transaction.
The provision for estimated income taxes for the periods reported is based on
tax rates and amounts which recognize management's best estimate of current and
deferred tax assets and liabilities in accordance with USX's tax allocation
policy.
April 26, 1994
<PAGE> 6
DELHI GROUP OF USX CORPORATION
SUPPLEMENTAL STATISTICS
($'s in Millions)
<TABLE>
<CAPTION>
First Quarter
Ended
March 31
----------------
1994 1993
------ ------
<S> <C> <C>
SALES $154.4 $131.0
GROSS MARGIN
Gas Sales Margin $ 24.8 $ 31.4
Transportation Margin 2.6 3.8
------ ------
Systems Margin 27.4 35.2
Gas Processing Margin - 7.4
------ ------
Total Gross Margin $ 27.4 $ 42.6
OPERATING INCOME $ 2.5 $ 17.1
CAPITAL EXPENDITURES $ 4.9 $ 4.5
OPERATING STATISTICS
Natural Gas Throughput (a)
Natural Gas Sales 681.3 559.4
Transportation 244.7 304.8
----- -----
Systems Throughput 926.0 864.2
Partnerships - equity share 20.2 19.1
----- -----
Total Throughput 946.2 883.3
===== =====
Natural Gas Liquids Sales (b) 627.4 808.8
</TABLE>
- ---------------
(a) Millions of cubic feet per day
(b) Thousands of gallons per day
<PAGE> 7
USX CORPORATION AND SUBSIDIARY COMPANIES
CONDENSED CONSOLIDATED STATEMENT OF OPERATIONS (Unaudited)
<TABLE>
<CAPTION>
Three Months Ended
March 31
(In Millions Except Per Share Data) 1994 1993*
- --------------------------------------------------------------------------------------
<S> <C> <C>
SALES . . . . . . . . . . . . . . . . . . . . . $ 4,273 $ 4,280
Total operating costs . . . . . . . . . . . . . (4,069) (4,122)
------- -------
OPERATING INCOME. . . . . . . . . . . . . . . . 204 158
Other income. . . . . . . . . . . . . . . . . . 28 37
Net interest and other financial costs. . . . . (108) (112)
------- -------
TOTAL INCOME BEFORE INCOME TAXES AND CUMULATIVE
EFFECT OF CHANGES IN ACCOUNTING PRINCIPLES. . 124 83
Less provision for estimated income taxes . . . 49 36
------- -------
TOTAL INCOME BEFORE CUMULATIVE EFFECT OF CHANGES
IN ACCOUNTING PRINCIPLES. . . . . . . . . . . 75 47
Cumulative effect of changes in accounting
principles. . . . . . . . . . . . . . . . . . - (92)
------- -------
NET INCOME (LOSS) . . . . . . . . . . . . . . . 75 (45)
Dividends on preferred stock. . . . . . . . . . (7) (4)
------- -------
NET INCOME (LOSS) APPLICABLE TO COMMON STOCKS . $ 68 $ (49)
======= =======
</TABLE>
*Restated as a result of the adoption of two new accounting standards.
<TABLE>
<CAPTION>
CONDENSED CONSOLIDATED BALANCE SHEET (Unaudited)
Mar. 31 Dec. 31 Mar. 31 Dec. 31
(In Millions) 1994 1993 1994 1993
- -----------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
ASSETS LIABILITIES AND
Cash and cash STOCKHOLDERS' EQUITY
equivalents . . . . . $ 137 $ 268 Current liabilities. . $ 2,728 $ 3,334
Receivables - net . . . . 844 932 Long-term debt . . . . 5,695 5,888
Inventories . . . . . . . 1,663 1,626 Other liabilities. . . 4,619 4,288
Other current assets. . . 356 354
------- ------- ------- -------
Total current assets 3,000 3,180 Total liabilities. . 13,042 13,510
Property, plant and Preferred stock . . . . 112 112
equipment - net. . . . 11,488 11,603 Common stockholders'
Other assets. . . . . . . 2,623 2,591 equity . . . . . . . 3,957 3,752
------- ------- ------- -------
Total. . . . . . . . . $17,111 $17,374 Total. . . . . . . . $17,111 $17,374
======= ======= ======= =======
</TABLE>
The following common share data and notes are an integral part of these
financial statements.
<PAGE> 8
USX CORPORATION AND SUBSIDIARY COMPANIES
COMMON SHARE DATA (Unaudited)
<TABLE>
<CAPTION>
Three Months Ended
March 31
(In Millions Except Per Share Data) 1994 1993*
- ----------------------------------------------------------------------------------------
<S> <C> <C>
Applicable to Marathon Stock
Total income before cumulative effect of
changes in accounting principles applicable
to Marathon Stock. . . . . . . . . . . . . $ 109 $ 29
--Per share - primary and fully diluted. . .38 .10
Cumulative effect of changes in accounting
principles . . . . . . . . . . . . . . . . - (23)
--Per share - primary and fully diluted. . - (.08)
Net income applicable to Marathon Stock. . . 109 6
--Per share - primary and fully diluted. . .38 .02
Dividends paid per share . . . . . . . . . . .17 .17
Weighted average shares, in thousands
--Primary. . . . . . . . . . . . . . . . . 286,582 286,610
--Fully diluted. . . . . . . . . . . . . . 292,829 286,612
Applicable to Steel Stock
Total income (loss) before cumulative effect
of change in accounting principle
applicable to Steel Stock. . . . . . . . . $ (41) $ 8
--Per share - primary and fully diluted. . (.56) .13
Cumulative effect of change in accounting
principle. . . . . . . . . . . . . . . . . - (69)
--Per share - primary and fully diluted. . - (1.16)
Net loss applicable to Steel Stock . . . . . (41) (61)
--Per share - primary and fully diluted. . (.56) (1.03)
Dividends paid per share . . . . . . . . . . .25 .25
Weighted average shares, in thousands
--Primary. . . . . . . . . . . . . . . . . 73,598 59,978
--Fully diluted. . . . . . . . . . . . . . 73,598 59,981
Applicable to Delhi Stock
Net income applicable to Delhi Stock . . . . $ - $ 6
--Per share - primary and fully diluted. . .03 .62
Dividends paid per share . . . . . . . . . . .05 .05
Weighted average shares, in thousands
--Primary and fully diluted. . . . . . . . 9,332 9,006
</TABLE>
*Restated as a result of the adoption of two new accounting standards.
The following notes are an integral part of these financial statements.
<PAGE> 9
USX CORPORATION AND SUBSIDIARY COMPANIES
SELECTED NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
The financial information for the Marathon Group, the U. S. Steel Group and the
Delhi Group, taken together, includes all accounts which comprise the
corresponding consolidated financial information for USX.
Changes in the inventory market valuation reserve resulted in a $128 million
and $23 million credit to operating income in the first quarter of 1994 and
1993, respectively.
Other income in the first quarter of 1994 included pretax gains of $24 million
from disposal of assets, primarily related to the sale of certain Marathon
production assets. Other income in the first quarter of 1993 included a pretax
gain of $46 million from the disposal of assets, including the sale of an
investment in an insurance company.
The provision for estimated income taxes for periods reported is based on tax
rates and amounts which recognize management's best estimate of current and
deferred tax assets and liabilities.
In 1993, USX adopted Statement of Financial Accounting Standards No. 112,
"Employers' Accounting for Postemployment Benefits" (SFAS No. 112), and
Emerging Issues Task Force Consensus No. 93-14, "Accounting for Multiple-Year
Retrospectively Rated Insurance Contracts" (EITF No. 93-14). The cumulative
effect of these changes in accounting principles decreased first quarter 1993
net income by $86 million, net of $50 million income tax effect, for SFAS No.
112; and $6 million, net of $3 million income tax effect, for EITF No. 93-14.
In the first quarter of 1994, USX sold 5,000,000 shares of Steel Stock to the
public. In addition, USX Capital LLC, a wholly owned subsidiary of USX, sold
$250 million of 8-3/4% Cumulative Monthly Income Preferred Shares.
April 26, 1994
