<PAGE>
1996
- - -------------------------------------------------------------------------------
- - -------------------------------------------------------------------------------
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
----------------
FORM 10-K
[ X ] ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF
THE SECURITIES EXCHANGE ACT OF 1934
For the fiscal year ended December 31, 1996
OR
[ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF
THE SECURITIES EXCHANGE ACT OF 1934
For the transition period from to
Commission File Number 1-2256
EXXON CORPORATION
(Exact name of registrant as specified in its charter)
NEW JERSEY 13-5409005
(State or other jurisdiction of (I.R.S. Employer Identification
incorporation or organization) Number)
5959 LAS COLINAS BOULEVARD, IRVING, TEXAS 75039-2298
(Address of principal executive offices) (Zip Code)
(972) 444-1000
(Registrant's telephone number, including area code)
----------------
Securities registered pursuant to Section 12(b) of the Act:
<TABLE>
<CAPTION>
NAME OF EACH EXCHANGE
TITLE OF EACH CLASS ON WHICH REGISTERED
------------------- -----------------------
<S> <C>
COMMON STOCK, WITHOUT PAR VALUE (1,242,175,166 SHARES
OUTSTANDING AT FEBRUARY 28, 1997) NEW YORK STOCK EXCHANGE
REGISTERED SECURITIES GUARANTEED BY REGISTRANT:
SEARIVER MARITIME FINANCIAL HOLDINGS, INC.
TWENTY-FIVE YEAR DEBT SECURITIES DUE OCTOBER 1, 2011 NEW YORK STOCK EXCHANGE
EXXON CAPITAL CORPORATION
TWELVE YEAR 6% NOTES DUE JULY 1, 2005 NEW YORK STOCK EXCHANGE
</TABLE>
Indicate by check mark whether the registrant (1) has filed all reports
required to be filed by Section 13 or 15(d) of the Securities Exchange Act of
1934 during the preceding 12 months (or for such shorter period that the
registrant was required to file such reports), and (2) has been subject to
such filing requirements for the past 90 days. Yes X No
Indicate by check mark if disclosure of delinquent filers pursuant to Item
405 of Regulation S-K is not contained herein, and will not be contained, to
the best of registrant's knowledge, in definitive proxy or information
statements incorporated by reference in Part III of this Form 10-K or any
amendment to this Form 10-K. X
The aggregate market value of the voting stock held by non-affiliates of the
registrant on February 28, 1997, based on the closing price on that date of
$100 1/4 on the New York Stock Exchange composite tape, was in excess of $124
billion.
DOCUMENTS INCORPORATED BY REFERENCE:
1996 ANNUAL REPORT TO SHAREHOLDERS (PARTS I, II AND IV)
PROXY STATEMENT DATED MARCH 19, 1997 (PART III)
- - -------------------------------------------------------------------------------
- - -------------------------------------------------------------------------------
<PAGE>
EXXON CORPORATION
FORM 10-K
FOR THE FISCAL YEAR ENDED DECEMBER 31, 1996
TABLE OF CONTENTS
<TABLE>
<CAPTION>
PAGE
NUMBER
------
PART I
<C> <S> <C>
Item 1. Business..................................................... 1-2
Item 2. Properties................................................... 2-8
Item 3. Legal Proceedings............................................ 8
Item 4. Submission of Matters to a Vote of Security Holders.......... 8
Executive Officers of the Registrant [pursuant to Instruction 3 to Reg-
ulation S-K, Item 401(b)]............................................. 9
PART II
Item 5. Market for Registrant's Common Stock and Related Shareholder
Matters...................................................... 9
Item 6. Selected Financial Data...................................... 10
Item 7. Management's Discussion and Analysis of Financial Condition
and Results of Operations.................................... 10
Item 8. Financial Statements and Supplementary Data.................. 10
Item 9. Changes in and Disagreements with Accountants on Accounting
and Financial Disclosure..................................... 10
PART III
Item 10. Directors and Executive Officers of the Registrant........... 10
Item 11. Executive Compensation....................................... 10
Item 12. Security Ownership of Certain Beneficial Owners and
Management................................................... 10
Item 13. Certain Relationships and Related Transactions............... 10
PART IV
Item 14. Exhibits, Financial Statement Schedules and Reports on Form
8-K.......................................................... 10
Signatures............................................................. 11-12
Index to Financial Statements.......................................... 13
Consent of Independent Accountants..................................... 13
Index to Exhibits...................................................... 14
</TABLE>
<PAGE>
PART I
ITEM 1. BUSINESS.
Exxon Corporation was incorporated in the State of New Jersey in 1882.
Divisions and affiliated companies of Exxon operate or market products in the
United States and over 100 other countries. Their principal business is
energy, involving exploration for, and production of, crude oil and natural
gas, manufacturing of petroleum products and transportation and sale of crude
oil, natural gas and petroleum products. Exxon Chemical Company, a division of
Exxon, is a major manufacturer and marketer of basic petrochemicals, including
olefins and aromatics, and a leading supplier of specialty rubbers and of
additives for fuels and lubricants. Other products manufactured include
polyethylene and polypropylene plastics, plasticizers, specialty resins,
specialty and commodity solvents and performance chemicals for oil field
operations. Exxon is engaged in exploration for, and mining and sale of, coal
and other minerals. Exxon also has an interest in electric power generation in
Hong Kong. Affiliates of Exxon conduct extensive research programs in support
of these businesses.
Exxon Corporation has five divisions and hundreds of affiliates, many with
names that include Exxon or Esso. For convenience and simplicity, in this
report the terms Exxon and Esso, as well as the terms corporation, company,
our, we and its, are sometimes used as abbreviated references to specific
affiliates or groups of affiliates. The precise meaning depends on the context
in question.
The oil and chemical industries are highly competitive. There is competition
within the industries and also with other industries in supplying the energy,
fuel and chemical needs of commerce, industry and individuals. The corporation
competes with other firms in the sale or purchase of various goods or services
in many national and international markets and employs all methods of
competition which are lawful and appropriate for such purposes.
The operations and earnings of the corporation and its affiliates throughout
the world have been, and may in the future be, affected from time to time in
varying degree by political developments and laws and regulations, such as
forced divestiture of assets; restrictions on production, imports and exports;
price controls; tax increases and retroactive tax claims; expropriations of
property; cancellation of contract rights and environmental regulations. Both
the likelihood of such occurrences and their overall effect upon the
corporation vary greatly from country to country and are not predictable.
The operations and earnings of the corporation and its affiliates throughout
the world are also affected by local, regional and global events or conditions
that affect supply and demand for oil, natural gas and other Exxon products.
These events or conditions are generally not predictable and include, among
other things, the development of new supply sources; supply disruptions;
weather; international political events; technological advances; changes in
demographics and consumer preferences; and the competitiveness of alternative
energy sources or product substitutes. See also Page F5 of the accompanying
financial section of the 1996 Annual Report to shareholders for discussion of
the impact of inflation, changing prices and other uncertainties.
In 1996, the corporation spent $1,561 million (of which $457 million were
capital expenditures) on environmental conservation projects and expenses
worldwide, mostly dealing with air and water conservation. Total expenditures
for such activities are expected to be about $1.6 billion in each year 1997
and 1998 (with capital expenditures representing about 30 percent of the
total).
Operating data and industry segment information for the corporation are
contained on pages F3, F20 and F27, information on oil and gas reserves is
contained on pages F24 and F25 and information on company-sponsored research
and development activities is contained on page F12 of the accompanying
financial section of the 1996 Annual Report to shareholders.*
- - --------
*Only the data appearing on pages F1 and F3 through F27 of the accompanying
financial section of the 1996 Annual Report to shareholders, incorporated in
this report as Exhibit 13, are deemed to be filed as part of this Annual
Report on Form 10-K as indicated under Items 1, 2, 3, 5, 6, 7 and 8 and on
page 13.
<PAGE>
Projections, estimates and descriptions of Exxon's plans and objectives
included or incorporated in Items 1, 2 and 7 of this report are forward-
looking statements. Actual future project dates, production rates, capital
expenditures, costs and business plans could differ materially due to, among
other things, the outcome of commercial negotiations; changes in operating
conditions and costs; technical difficulties; and other factors discussed
above and elsewhere in this report.
ITEM 2. PROPERTIES.
Part of the information in response to this item and to the Securities
Exchange Act Industry Guide 2 is contained in the accompanying financial
section of the 1996 Annual Report to shareholders in Note 7, which note
appears on page F13, and on pages F3, and F22 through F27.
Information with regard to oil and gas producing activities follows:
1. NET RESERVES OF CRUDE OIL AND NATURAL GAS LIQUIDS (MILLIONS OF BARRELS) AND
NATURAL GAS (BILLIONS OF CUBIC FEET) AT YEAR-END 1996
Estimated proved reserves are shown on pages F24 and F25 of the accompanying
financial section of the 1996 Annual Report to shareholders. No major
discovery or other favorable or adverse event has occurred since December 31,
1996 that would cause a significant change in the estimated proved reserves as
of that date. The oil sands reserves shown separately for Canada represent
synthetic crude oil expected to be recovered from Imperial Oil Limited's 25
percent interest in the net reserves set aside for the Syncrude project, as
presently defined by government permit. For information on the standardized
measure of discounted future net cash flows relating to proved oil and gas
reserves, see page F26 of the accompanying financial section of the 1996
Annual Report to shareholders.
2. ESTIMATES OF TOTAL NET PROVED OIL AND GAS RESERVES FILED WITH OTHER FEDERAL
AGENCIES
During 1996, the company filed proved reserves estimates with the U.S.
Department of Energy on Forms EIA-23 and EIA-28. The information is consistent
with the 1995 Annual Report to shareholders with the exception of EIA-23 which
covered total oil and gas reserves from Exxon-operated properties in the U.S.
and does not include gas plant liquids.
3. AVERAGE SALES PRICES AND PRODUCTION COSTS PER UNIT OF PRODUCTION
Incorporated by reference to page F22 of the accompanying financial section
of the 1996 Annual Report to shareholders. Average sales prices have been
calculated by using sales quantities from our own production as the divisor.
Average production costs have been computed by using net production quantities
for the divisor. The volumes of crude oil and natural gas liquids (NGL)
production used for this computation are shown in the reserves table on page
F24 of the accompanying financial section of the 1996 Annual Report to
shareholders. The net production volumes of natural gas available for sale by
the producing function used in this calculation are shown on page F27 of the
accompanying financial section of the 1996 Annual Report to shareholders. The
volumes of natural gas were converted to oil-equivalent barrels based on a
conversion factor of six thousand cubic feet per barrel.
4. GROSS AND NET PRODUCTIVE WELLS
<TABLE>
<CAPTION>
YEAR-END 1996
--------------------------
OIL GAS
------------- ------------
GROSS NET GROSS NET
------ ------ ------ -----
<S> <C> <C> <C> <C>
United States..................................... 18,063 6,337 4,700 1,994
Canada............................................ 7,268 4,044 4,108 2,829
Europe............................................ 1,629 482 1,006 397
Asia-Pacific...................................... 835 409 395 113
Other............................................. 745 101 14 5
------ ------ ------ -----
Total............................................ 28,540 11,373 10,223 5,338
====== ====== ====== =====
</TABLE>
2
<PAGE>
5. GROSS AND NET DEVELOPED ACREAGE
<TABLE>
<CAPTION>
YEAR-END 1996
--------------------
GROSS NET
--------------------
(THOUSANDS OF ACRES)
<S> <C> <C>
United States........................................... 5,130 3,631
Canada.................................................. 3,364 1,618
Europe.................................................. 10,147 3,393
Asia-Pacific............................................ 3,806 1,458
Other................................................... 7,345 1,096
---------- ---------
Total.................................................. 29,792 11,196
========== =========
Note: Separate acreage data for oil and gas are not maintained because, in
many instances, both are produced from the same acreage.
6. GROSS AND NET UNDEVELOPED ACREAGE
<CAPTION>
YEAR-END 1996
--------------------
GROSS NET
--------------------
(THOUSANDS OF ACRES)
<S> <C> <C>
United States........................................... 5,346 3,841
Canada.................................................. 3,913 2,271
Europe.................................................. 11,955 4,784
Asia-Pacific............................................ 57,244 30,010
Other................................................... 52,124 21,612
---------- ---------
Total.................................................. 130,582 62,518
========== =========
</TABLE>
7. SUMMARY OF ACREAGE TERMS IN KEY AREAS
United States
Oil and gas exploration leases are acquired for varying periods of time,
ranging from one to ten years. Production leases normally remain in effect
until production ceases.
Canada
Exploration permits are granted for varying periods of time with renewals
possible. Production leases are held as long as there is production on the
lease.
Cold Lake oil sands leases were taken for an initial 21-year term in 1968-
1969 and renewed for a second 21-year term in 1989-1990. All undeveloped
Athabasca oil sands leases are currently in their second 21-year term after
being renewed between 1980 and 1987. They may be renewed for a third term of
15 years if the leaseholder files a development plan with the Alberta
regulatory authority. The regulatory approval received for Syncrude has set
the expiry date of the current production lease at 2025.
United Kingdom
Licenses issued prior to 1977 were for an initial period of six years with
an option to extend the license for a further 40 years on no more than half of
the license area. Licenses issued between 1977 and 1979 were for an initial
period of four years, after which one-third of the acreage was required to be
relinquished, followed by a second period of three years, after which an
additional one-third of the acreage was required to be relinquished, with an
option to extend for a total license period of 24 to 36 years on no more than
half the license area. Recent licenses are typically for an initial period of
six to nine years, with a second term of 12 to 15 years which may be extended
a further 18 to 24 years.
3
<PAGE>
Netherlands
Onshore: Exploration drilling permits are issued for a period of two to five
years. Production concessions are granted after discoveries have been made
under conditions which are negotiated with the government. Normally, they are
field-life concessions covering an area defined by hydrocarbon occurrences.
Offshore: Prospecting licenses issued prior to March 1976 were for a 15-year
period, with relinquishment of about 50 percent of the original area required
at the end of ten years. Subsequent licenses are for ten years with
relinquishment of about 50 percent of the original area required after six
years. For commercial discoveries within a prospecting license, a production
license is issued for a 40-year period.
Norway
Licenses issued prior to 1972 were for a total period of 46 years, with
relinquishment of at least one-fourth of the original area required at the end
of the sixth year and another one-fourth at the end of the ninth year.
Subsequent licenses are for a total period of 36 years, with relinquishment of
at least one-half of the original area required at the end of the sixth year.
France
Exploration permits are granted for periods of three to five years,
renewable up to two times accompanied by substantial acreage relinquishments:
50 percent of the acreage at first renewal; 25 percent of the remaining
acreage at second renewal. A 1994 law requires a bidding process prior to
granting of an exploration permit. Upon discovery of commercial hydrocarbons,
a production concession is granted for up to 50 years, renewable in periods of
25 years each.
Germany
Acreage holdings are generally concessions with indefinite periods subject
to minimum work commitments.
Australia
Onshore: Acreage terms are fixed by the individual state and territory
governments. These terms and conditions vary significantly between the states
and territories. Production licenses are generally granted for an initial term
of 21 years, with subsequent renewals, each for 21 years, for the full area.
Offshore: Acreage terms are fixed by the national government. Exploration
permits are granted for six years with possible renewals of five-year periods
to a total of 26 years. A 50 percent relinquishment of remaining area is
mandatory at the end of each renewal period. Production licenses are for 21
years, with one renewal of 21 years. Subsequent 21-year renewals are subject
to negotiation.
Malaysia
Exploration and production activities are governed by production sharing
contracts negotiated with the national oil company. The more recent contracts
have an overall term of 24 to 28 years with possible extensions to the
exploration or development periods. The exploration period is five to seven
years with the possibility of extensions, after which time areas with no
commercial discoveries must be relinquished. The development period is four to
six years from commercial discovery, with an option to extend the period for
an additional two years and possibly longer under special circumstances. Areas
from which commercial production has not started by the end of the development
period must be relinquished. The total production period is 15 years from
first commercial lifting, not to exceed the overall term of the contract.
Thailand
The Exxon concessions and the Petroleum Act of 1972 allow production for 30
years (through 2021) with a possible ten-year extension at terms generally
prevalent at the time.
4
<PAGE>
Azerbaijan
The license is a production sharing contract with an initial period of 30
years from its 1994 execution date.
Republic of Yemen
Production sharing agreements (PSAs) negotiated with the government entitle
Exxon to participate in exploration operations within a designated area during
the exploration period. In the event of a commercial discovery, the company is
entitled to proceed with development and production operations during the
development period. The length of these periods and other specific terms are
negotiated prior to executing the production sharing agreement. Existing
production operations have a development period extending 20 years from first
commercial declaration made in November 1985 for the Marib PSA and June 1995
for the Jannah PSA.
8. NUMBER OF NET PRODUCTIVE AND DRY WELLS DRILLED
<TABLE>
<CAPTION>
1996 1995 1994
---- ---- ----
<S> <C> <C> <C>
A. Net Productive Exploratory Wells Drilled
United States.................................................. 7 5 5
Canada......................................................... 8 5 8
Europe......................................................... 7 9 6
Asia-Pacific................................................... 7 15 9
Other.......................................................... 2 2 3
--- --- ---
Total......................................................... 31 36 31
--- --- ---
B. Net Dry Exploratory Wells Drilled
United States.................................................. 5 5 3
Canada......................................................... 4 12 8
Europe......................................................... 9 7 6
Asia-Pacific................................................... 8 7 7
Other.......................................................... 2 2 5
--- --- ---
Total......................................................... 28 33 29
--- --- ---
C. Net Productive Development Wells Drilled
United States.................................................. 190 152 188
Canada......................................................... 356 339 135
Europe......................................................... 36 32 25
Asia-Pacific................................................... 31 40 57
Other.......................................................... 11 11 10
--- --- ---
Total......................................................... 624 574 415
--- --- ---
D. Net Dry Development Wells Drilled
United States.................................................. 13 7 15
Canada......................................................... 2 3 3
Europe......................................................... 2 1 1
Asia-Pacific................................................... 1 -- --
Other.......................................................... 1 -- --
--- --- ---
Total......................................................... 19 11 19
--- --- ---
Total number of net wells drilled.............................. 702 654 494
=== === ===
</TABLE>
5
<PAGE>
9. PRESENT ACTIVITIES
A. Wells Drilling -- Year-End 1996
<TABLE>
<CAPTION>
GROSS NET
----- ---
<S> <C> <C>
United States...................................................... 76 42
Canada............................................................. 5 3
Europe............................................................. 33 13
Asia-Pacific....................................................... 13 5
Other.............................................................. 6 1
--- ---
Total............................................................. 133 64
=== ===
</TABLE>
B. Review of Principal Ongoing Activities in Key Areas
UNITED STATES
During 1996, exploration activities were conducted by Exxon Exploration
Company and producing activities by Exxon Company, U.S.A., both divisions of
Exxon Corporation. Some of the more significant ongoing activities are:
. Exploration and delineation of additional hydrocarbon resources
continued. At year-end 1996, Exxon's inventory of undeveloped acreage
totaled 3.8 million net acres. Exxon was active in areas onshore and
offshore in the lower 48 states and in Alaska. A total of 12.0 net
exploration and delineation wells were completed during 1996.
. During 1996, 138.4 net development wells were completed within and
around mature fields in the inland lower 48 states.
. Exxon's net acreage in the Gulf of Mexico at year-end 1996 was 1.4
million acres. A total of 39.9 net exploratory and development wells
were completed during the year.
. There were no new major projects which started up in 1996. Fabrication
of facilities for the Ram-Powell project, which will involve setting a
tension leg platform in approximately 3,200 feet of water, is
progressing. Pre-drilling of the development wells began in 1996 and
production start-up is scheduled for 1997.
. Development began on two new Gulf of Mexico projects in 1996. The
Genesis project, scheduled for start-up in 1999, will utilize a deep
draft caisson vessel to develop reserves in 2,600 feet of water. The
Ursa project, also scheduled for start-up in 1999, will utilize a
tension leg platform development concept in 3,900 feet of water.
. Participation in Alaska production and development continued and a total
of 20.8 net development wells were drilled in 1996.
CANADA
During 1996, exploration and production activities in Canada were conducted
by the Resources Division of Imperial Oil Limited, which is 69.6 percent owned
by Exxon Corporation. Some of the more significant ongoing activities are:
. Gross commercial bitumen production from Cold Lake averaged 85 thousand
barrels per day during 1996. Expansion activities associated with
development drilling for the 9th and 10th phases were completed in 1996.
. The Syncrude plant, 25 percent owned by Imperial and located in northern
Alberta, completed its 18th year of operations. Gross synthetic crude
production averaged 200 thousand barrels per day in 1996.
6
<PAGE>
OUTSIDE NORTH AMERICA
During 1996, exploration activities were conducted by Exxon Exploration
Company and producing activities by Exxon Company, International, both
divisions of Exxon Corporation. Some of the more significant ongoing
activities include:
United Kingdom
At year-end, net acreage remained at 1.7 million acres, all offshore. During
the year, 25.2 net exploration and development wells were completed.
Production started up from the Anasuria, Pelican and Schooner projects. The
Curlew, Mallard, Gannet E/F and Kingfisher projects are under way with start-
ups anticipated in 1997. The Eastern Trough Area Project moved forward and
start-up is expected in 1998.
Netherlands
Exxon's net interest in licenses totaled 1.6 million acres onshore and 1.3
million acres offshore at year-end. During the year, 11.8 net exploration and
development wells were completed. The Grijpskerk underground storage project
was completed and storage operations commenced in December while construction
at Norg continues with start-up anticipated in 1997. Construction is underway
for the onshore Anjum and Boerakker Area gas fields with start-up anticipated
in 1997 and for the offshore gas fields in the L9 and K14 blocks with start-up
anticipated in 1998.
Norway
Exxon acquired an interest in ten new blocks during the year. Total net
acreage at year-end was 0.5 million acres, all offshore. During the year, 6.1
net exploration and development wells were completed and production was
initiated at the Sleipner West field. Projects for development of the Balder
and Vigdis fields are continuing as planned, with first production scheduled
for 1997.
France
Exxon's net acreage totaled 0.8 million net acres at the end of 1996. During
the year, 4.0 net exploration and development wells were drilled and
completed.
Germany
A total of 2.2 million acres were held by Exxon in Germany at year-end, with
6.4 net exploration and development wells drilled and completed during the
year. The Uelsen underground natural gas storage project is under construction
with start-up anticipated in 1997.
Australia
Exxon's 1996 year-end acreage holdings totaled 6.0 million net acres onshore
and 1.0 million net acres offshore, with exploration and production activities
underway in both areas. During the year, 17.5 net exploration and development
wells were completed. Production from Bream B started in late 1996, and West
Tuna started up in early 1997.
Malaysia
Exxon has interests in production sharing contracts covering 4.0 million net
acres offshore Peninsular Malaysia. During 1996, a total of 27.9 net
exploration and development wells were completed. Development drilling was
completed at Tabu B and Tapis D, and continued at the Guntung D platforms. The
Lawit gas platform was installed and start-up is anticipated in 1997.
7
<PAGE>
Indonesia
At year-end, Exxon's net acreage in Indonesia totaled 2.2 million acres, all
offshore, including the acquisition of an additional 1.7 million acres in
1996.
Thailand
Exxon's net acreage in the Khorat concession onshore Thailand totaled 15,000
acres at year-end.
Azerbaijan
A total of 8,500 acres were held by Exxon in Azerbaijan at year-end, all
offshore. During the year, Exxon acquired an additional three percent interest
in the megastructure project bringing its total interest to eight percent.
Operations during the year included drilling an appraisal well.
Republic of Yemen
Exxon's net acreage in the Republic of Yemen production sharing agreement
areas totaled 0.9 million acres onshore at year-end. During the year, 14.7 net
exploration and development wells were drilled and completed and production
from the Jannah PSA area commenced.
Egypt
Exxon sold its exploration and production operations in Egypt in 1996.
Colombia
At year-end, Exxon's net acreage in Colombia totaled 0.1 million acres.
WORLDWIDE EXPLORATION
Exploration activities were underway in several areas in which Exxon has no
established production operations. Exxon continues to selectively build a
diverse portfolio of acreage, with positions in offshore West Africa, across
the former Soviet Union and onshore China. A total of 39.6 million net acres
were held at year-end, and 3.8 net exploration wells were completed during the
year.
ITEM 3. LEGAL PROCEEDINGS.
Refer to the relevant portions of Note 13 on page F16 of the accompanying
financial section of the 1996 Annual Report to shareholders for information on
legal proceedings.
ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS.
None.
----------------
8
<PAGE>
EXECUTIVE OFFICERS OF THE REGISTRANT [pursuant to Instruction 3 to Regulation
S-K, Item 401(b)].
<TABLE>
<CAPTION>
AGE AS OF
MARCH 31,
NAME 1997 TITLE (HELD OFFICE SINCE)
---- --------- ---------------------------------------------
<S> <C> <C>
L. R. Raymond....... 58 Chairman of the Board (1993)
R. Dahan............ 55 Senior Vice President (1995)
E. J. Hess.......... 63 Senior Vice President (1993)
H. J. Longwell...... 55 Senior Vice President (1995)
R. E. Wilhelm....... 56 Senior Vice President (1990)
A. L. Condray....... 54 Vice President (1995)
W. B. Cook.......... 61 Vice President and Controller (1994)
C. W. Matthews...... 52 Vice President and General Counsel (1995)
R. B. Nesbitt....... 63 Vice President (1992)
E. A. Robinson...... 63 Vice President and Treasurer (1983)
C. D. Roxburgh...... 58 Vice President (1995)
P. E. Sullivan...... 53 Vice President and General Tax Counsel (1995)
J. L. Thompson...... 57 Vice President (1991)
T. P. Townsend...... 60 Vice President -- Investor Relations (1990)
and Secretary (1995)
</TABLE>
For at least the past five years, Messrs. Raymond, Hess, Wilhelm, Robinson
and Townsend have been employed as executives of the registrant. Mr. Raymond
also holds the title of president.
The following executive officers of the registrant have also served as
executives of the subsidiaries, affiliates or divisions of the registrant
shown opposite their names during the five years preceding December 31, 1996.
<TABLE>
<S> <C>
Exxon Chemical Company................................ Nesbitt
Exxon Coal and Minerals Company....................... Roxburgh
Exxon Company, International.......................... Cook, Dahan and
Roxburgh
Exxon Company, U.S.A.................................. Condray, Longwell,
Matthews and Sullivan
Exxon Exploration Company............................. Thompson
</TABLE>
Officers are generally elected by the Board of Directors at its meeting on
the day of each annual election of directors, each such officer to serve until
his or her successor has been elected and qualified.
PART II
ITEM 5. MARKET FOR REGISTRANT'S COMMON STOCK AND RELATED SHAREHOLDER MATTERS.
Incorporated by reference to the quarterly information which appears on page
F21 of the accompanying financial section of the 1996 Annual Report to
shareholders.
On February 26, 1997, the Board of Directors approved a two-for-one stock
split to shareholders of record on March 14, 1997. The additional shares will
be distributed around April 11, 1997.**
- - --------
** All information in this Annual Report on Form 10-K for 1996 including, but
not limited to, information in response to Items 5, 6, 7, 8, 10, 11, 12 and
14(a) and the cover is on a pre-split basis.
9
<PAGE>
ITEM 6. SELECTED FINANCIAL DATA.
Incorporated by reference to page F3 of the accompanying financial section
of the 1996 Annual Report to shareholders.
ITEM 7. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND
RESULTS OF OPERATIONS.
Incorporated by reference to pages F4 through F7 of the accompanying
financial section of the 1996 Annual Report to shareholders.
ITEM 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA.
Reference is made to the Index to Financial Statements on page 13 of this
Annual Report on Form 10-K.
ITEM 9. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND
FINANCIAL DISCLOSURE.
None.
PART III
ITEM 10. DIRECTORS AND EXECUTIVE OFFICERS OF THE REGISTRANT.
Incorporated by reference to the relevant portions of pages 4 through 7 of
the registrant's definitive proxy statement dated March 19, 1997.
ITEM 11. EXECUTIVE COMPENSATION.
Incorporated by reference to the fifth through eighth paragraphs under the
heading "Board of Directors" on page 2 and to pages 9 through 12 (excluding
the portion of page 12 entitled "Board Compensation Committee Report on
Executive Compensation") of the registrant's definitive proxy statement dated
March 19, 1997.
ITEM 12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT.
Incorporated by reference to the relevant portions of pages 4 through 8
(excluding the portion of page 8 entitled "Transactions with Management") of
the registrant's definitive proxy statement dated March 19, 1997.
ITEM 13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS.
Incorporated by reference to the portion of page 8 entitled "Transactions
with Management" of the registrant's definitive proxy statement dated March
19, 1997.
PART IV
ITEM 14. EXHIBITS, FINANCIAL STATEMENT SCHEDULES AND REPORTS ON FORM 8-K.
(a)(1) and (a) (2) Financial Statements:
See Index to Financial Statements on page 13 of this Annual Report on
Form 10-K.
(a)(3) Exhibits:
See Index to Exhibits on page 14 of this Annual Report on Form 10-K.
(b)Reports on Form 8-K.
The registrant did not file any reports on Form 8-K during the last
quarter of 1996.
10
<PAGE>
SIGNATURES
PURSUANT TO THE REQUIREMENTS OF SECTION 13 OF THE SECURITIES EXCHANGE ACT OF
1934, THE REGISTRANT HAS DULY CAUSED THIS REPORT TO BE SIGNED ON ITS BEHALF BY
THE UNDERSIGNED, THEREUNTO DULY AUTHORIZED.
EXXON CORPORATION
/s/ LEE R. RAYMOND
By: _________________________________
(Lee R. Raymond,
Chairman of the Board)
Dated March 13, 1997
----------------
POWER OF ATTORNEY
EACH PERSON WHOSE SIGNATURE APPEARS BELOW CONSTITUTES AND APPOINTS JAMES I.
ALCOCK, RICHARD E. GUTMAN AND FRANK A. RISCH, AND EACH OF THEM, HIS OR HER
TRUE AND LAWFUL ATTORNEYS-IN-FACT AND AGENTS, WITH FULL POWER OF SUBSTITUTION
AND RESUBSTITUTION, FOR HIM OR HER AND IN HIS OR HER NAME, PLACE AND STEAD, IN
ANY AND ALL CAPACITIES, TO SIGN ANY AND ALL AMENDMENTS TO THIS ANNUAL REPORT
ON FORM 10-K, AND TO FILE THE SAME, WITH ALL EXHIBITS THERETO, AND OTHER
DOCUMENTS IN CONNECTION THEREWITH, WITH THE SECURITIES AND EXCHANGE
COMMISSION, GRANTING UNTO SAID ATTORNEYS-IN-FACT AND AGENTS, AND EACH OF THEM,
FULL POWER AND AUTHORITY TO DO AND PERFORM EACH AND EVERY ACT AND THING
REQUISITE AND NECESSARY TO BE DONE, AS FULLY TO ALL INTENTS AND PURPOSES AS HE
OR SHE MIGHT OR COULD DO IN PERSON, HEREBY RATIFYING AND CONFIRMING ALL THAT
SAID ATTORNEYS-IN-FACT AND AGENTS OR ANY OF THEM, OR THEIR OR HIS OR HER
SUBSTITUTE OR SUBSTITUTES, MAY LAWFULLY DO OR CAUSE TO BE DONE BY VIRTUE
HEREOF.
----------------
PURSUANT TO THE REQUIREMENTS OF THE SECURITIES EXCHANGE ACT OF 1934, THIS
REPORT HAS BEEN SIGNED BELOW BY THE FOLLOWING PERSONS ON BEHALF OF THE
REGISTRANT AND IN THE CAPACITIES AND ON THE DATES INDICATED.
<TABLE>
<S> <C> <C>
/s/ LEE R. RAYMOND Chairman of the Board March 13, 1997
- - ------------------------------------------ (Principal Executive Officer)
(Lee R. Raymond)
/s/ MICHAEL J. BOSKIN Director March 13, 1997
- - -------------------------------------------
(Michael J. Boskin)
/s/ D. WAYNE CALLOWAY Director March 13, 1997
- - -------------------------------------------
(D. Wayne Calloway)
</TABLE>
11
<PAGE>
<TABLE>
<S> <C> <C>
/s/ JESS HAY Director March 13, 1997
- - -------------------------------------------
(Jess Hay)
/s/ JAMES R. HOUGHTON Director March 13, 1997
- - -------------------------------------------
(James R. Houghton)
/s/ WILLIAM R. HOWELL Director March 13, 1997
- - -------------------------------------------
(William R. Howell)
/s/ PHILIP E. LIPPINCOTT Director March 13, 1997
- - -------------------------------------------
(Philip E. Lippincott)
/s/ HARRY J. LONGWELL Director March 13, 1997
- - -------------------------------------------
(Harry J. Longwell)
/s/ MARILYN CARLSON NELSON Director March 13, 1997
- - -------------------------------------------
(Marilyn Carlson Nelson)
/s/ JOHN H. STEELE Director March 13, 1997
- - -------------------------------------------
(John H. Steele)
/s/ ROBERT E. WILHELM Director March 13, 1997
- - -------------------------------------------
(Robert E. Wilhelm)
/s/ JOSEPH D. WILLIAMS Director March 13, 1997
- - -------------------------------------------
(Joseph D. Williams)
/s/ W. BRUCE COOK Controller (Principal March 13, 1997
- - ------------------------------------------- Accounting Officer)
(W. Bruce Cook)
/s/ EDGAR A. ROBINSON Treasurer (Principal March 13, 1997
- - ------------------------------------------- Financial Officer)
(Edgar A. Robinson)
</TABLE>
12
<PAGE>
INDEX TO FINANCIAL STATEMENTS
The consolidated financial statements, together with the report thereon of
Price Waterhouse LLP dated February 26, 1997, appearing on pages F8 to F20;
the Quarterly Information appearing on page F21; and the Supplemental
Information on Oil and Gas Exploration and Production Activities appearing on
pages F22 to F26 of the accompanying financial section of the 1996 Annual
Report to shareholders are incorporated in this Annual Report on Form 10-K as
Exhibit 13. With the exception of the aforementioned information, no other
data appearing in the accompanying financial section of the 1996 Annual Report
to shareholders is deemed to be filed as part of this Annual Report on Form
10-K under Item 8. Consolidated Financial Statement Schedules have been
omitted because they are not applicable or the required information is shown
in the consolidated financial statements or notes thereto.
CONSENT OF INDEPENDENT ACCOUNTANTS
We hereby consent to the incorporation by reference in the following
Prospectuses constituting part of the Registration Statements on:
<TABLE>
<S> <C>
Form S-3 (No. 33-60677) --Exxon Corporation Shareholder Investment Program;
Form S-3 (No. 33-48919) --Guaranteed Debt Securities and Warrants to Purchase
Guaranteed Debt Securities of Exxon Capital Corporation;
Form S-3 (No. 33-8922) --Guaranteed Debt Securities of SeaRiver Maritime
Financial Holdings, Inc. (formerly Exxon Shipping
Company)
</TABLE>
and we hereby consent to the incorporation by reference in the Registration
Statements on:
<TABLE>
<S> <C>
Form S-8 (No. 33-51107) --1993 Incentive Program of Exxon Corporation (together
with 1983 Stock Option and 1988 Long Term Incentive
Plans of Exxon Corporation);
Form S-8 (No. 33-19057) --Thrift Plans of Exxon Corporation and Participating
Affiliated Employers
</TABLE>
of our report dated February 26, 1997 appearing on page F11 of the
accompanying financial section of the 1996 Annual Report to shareholders of
Exxon Corporation which is incorporated as Exhibit 13 in this Annual Report on
Form 10-K.
Price Waterhouse LLP
Dallas, Texas
March 13 , 1997
13
<PAGE>
INDEX TO EXHIBITS
<TABLE>
<C> <S> <C>
3(i). Registrant's Restated Certificate of Incorporation, as
restated December 18, 1996 and as amended February 26,
1997.
3(ii). Registrant's By-Laws, as revised to January 31, 1996
(incorporated by reference to Exhibit 3(ii) to the
registrant's Annual Report on Form 10-K for 1995).
10(iii)(a). Registrant's 1993 Incentive Program, as amended
(incorporated by reference to Exhibit 10(iii) to the
registrant's Quarterly Report on Form 10-Q for the
quarter ended September 30, 1995).*
10(iii)(b). Registrant's Plan for Deferral of Nonemployee Director
Compensation and Fees, as amended (incorporated by
reference to Exhibit 10(iii)(b) to the registrant's
Annual Report on Form 10-K for 1993).*
10(iii)(c). Registrant's Restricted Stock Plan for Nonemployee
Directors, as amended.*
10(iii)(d). Supplemental life insurance (incorporated by reference to
Exhibit 10(iii)(d) to the registrant's Annual Report on
Form 10-K for 1992).*
10(iii)(e). Registrant's Short Term Incentive Program (incorporated by
reference to Exhibit 10(iii)(e) to the registrant's
Annual Report on Form 10-K for 1993).*
10(iii)(f). Registrant's 1997 Nonemployee Director Restricted Stock
Plan.*
12. Computation of ratio of earnings to fixed charges.
13. Pages F1 and F3 through F27 of the Financial Section of
the registrant's 1996 Annual Report to shareholders.
21. Subsidiaries of the registrant.
23. Consent of Independent Accountants (contained on page 13
of this Annual Report on Form 10-K).
27. Financial Data Schedule (included only in the electronic
filing of this document).
</TABLE>
- - --------
* Compensatory plan or arrangement required to be identified pursuant to Item
14(a)(3) of this Annual Report on Form 10-K.
The registrant has not filed with this report copies of the instruments
defining the rights of holders of long-term debt of the registrant and its
subsidiaries for which consolidated or unconsolidated financial statements are
required to be filed. The registrant agrees to furnish a copy of any such
instrument to the Securities and Exchange Commission upon request.
14
<PAGE>
EXHIBIT 3(i)
RESTATED
CERTIFICATE OF INCORPORATION
OF
EXXON CORPORATION
Exxon Corporation, a corporation organized and existing under the laws of
the State of New Jersey, restates and integrates its Certificate of
Incorporation, as heretofore restated and amended, to read in full as herein set
forth:
FIRST. The name of the corporation is:
EXXON CORPORATION
SECOND. The address of the corporation's registered office is 830 Bear
Tavern Road, West Trenton, New Jersey 08628-1020. The name of the
corporation's registered agent at such address, upon whom process against the
corporation may be served, is Corporation Service Company.
THIRD. The purposes for which the corporation is organized are to engage
in any or all activities within the purposes for which corporations now or at
any time hereafter may be organized under the New Jersey Business Corporation
Act and under all amendments and supplements thereto, or any revision thereof or
any statute enacted to take the place thereof, including but not limited to the
following:
(1) To do all kinds of mining, manufacturing and trading business;
transporting goods and merchandise by land or water in any manner; to buy, sell,
lease and improve lands; to build houses, structures, vessels, cars, wharves,
docks and piers; to lay and operate pipelines; to erect and operate telegraph
and telephone lines and lines for conducting electricity; to enter into and
carry out contracts of every kind pertaining to its business; to acquire, use,
sell and grant licenses under patent rights; to purchase or otherwise acquire,
hold, sell, assign and transfer shares of capital stock and bonds or other
evidences of indebtedness of corporations, and to exercise all the privileges of
ownership including voting upon the securities so held; to carry on its business
and have offices and agencies therefor in all parts of the world; and to hold,
purchase, mortgage and convey real estate and personal property within or
without the State of New Jersey;
(2) To engage in any activities encompassed within this Article Third
directly or through a subsidiary or subsidiaries and to take any and all acts
deemed appropriate to promote the interests of such subsidiary or subsidiaries,
including, without limiting the foregoing, the following: making contracts and
incurring liabilities for the benefit of such subsidiary or subsidiaries;
transferring or causing to be transferred to any such subsidiary or subsidiaries
assets of this corporation; guaranteeing dividends on any shares of the capital
stock of any such subsidiary; guaranteeing the principal and interest or either
of the bonds, debentures, notes or other evidences of indebtedness issued or
obligations incurred by any such subsidiary
<PAGE>
or subsidiaries; securing said bonds, debentures, notes or other evidences of
indebtedness so guaranteed by mortgage of or security interest in the property
of this corporation; and contracting that said bonds, debentures, notes or other
evidences of indebtedness so guaranteed, whether secured or not, may be
convertible into shares of this corporation upon such terms and conditions as
may be approved by the board of directors;
(3) To guarantee the bonds, debentures, notes or other evidences of
indebtedness issued, or obligations incurred, by any corporation, partnership,
limited partnership, joint venture or other association in which this
corporation at the time such guarantee is made has a substantial interest or
where such guarantee is otherwise in furtherance of the interests of this
corporation; and
(4) To exercise as a purpose or purposes each power granted to corporations
by the New Jersey Business Corporation Act or by any amendment or supplement
thereto or by any statute enacted to take the place thereof, insofar as such
powers authorize or may hereafter authorize corporations to engage in
activities.
FOURTH. The aggregate number of shares which the corporation shall have
authority to issue is two billion two hundred million (2,200,000,000) shares
divided into two hundred million (200,000,000) shares of preferred stock without
par value and two billion (2,000,000,000) shares of common stock without par
value.
(1) The board of directors of the corporation is authorized at any time or
from time to time (i) to divide the shares of preferred stock into classes and
into series within any class or classes of preferred stock; (ii) to determine
for any such class or series its designation, relative rights, preferences and
limitations; (iii) to determine the number of shares in any such class or series
(including a determination that such class or series shall consist of a single
share); (iv) to increase the number of shares of any such class or series
previously determined by it and to decrease such previously determined number of
shares to a number not less than that of the shares of such class or series then
outstanding; (v) to change the designation or number of shares, or the relative
rights, preferences and limitations of the shares, of any theretofore
established class or series no shares of which have been issued; and (vi) to
cause to be executed and filed without further approval of the shareholders such
amendment or amendments to the Restated Certificate of Incorporation as may be
required in order to accomplish any of the foregoing. In particular, but
without limiting the generality of the foregoing, the board of directors is
authorized to determine with respect to the shares of any class or series of
preferred stock:
(a) whether the holders thereof shall be entitled to cumulative, non-
cumulative or partially cumulative dividends or to no dividends and, with
respect to shares entitled to dividends, the dividend rate or rates (which may
be fixed or variable and may be made dependent upon facts ascertainable outside
of the Restated Certificate of Incorporation) and any other terms and conditions
relating to such dividends;
(b) whether the holders thereof shall be entitled to receive dividends
payable on a parity with or subordinate or in preference to the dividends
payable on any other class or series of shares of the corporation;
2
<PAGE>
(c) whether, and if so to what extent and upon what terms and conditions,
the holders thereof shall be entitled to preferential rights upon the
liquidation of, or upon any distribution of the assets of, the corporation;
(d) whether, and if so upon what terms and conditions, such shares shall be
convertible into other securities;
(e) whether, and if so upon what terms and conditions, such shares shall be
redeemable;
(f) the terms and amount of any sinking fund provided for the purchase or
redemption of such shares; and
(g) the voting rights, if any, to be enjoyed by such shares and the terms
and conditions for the exercise thereof.
(2) Each holder of shares of common stock shall be entitled to one vote for
each share of common stock held of record by such holder on all matters on which
holders of shares of common stock are entitled to vote.
(3) No holder of any shares of common or preferred stock of the corporation
shall have any right as such holder (other than such right, if any, as the board
of directors in its discretion may determine) to purchase, subscribe for or
otherwise acquire any unissued or treasury shares, or any option rights, or
securities having conversion or option rights, of the corporation now or
hereafter authorized.
(4) The relative voting, dividend, liquidation and other rights,
preferences and limitations of the shares of the class of preferred stock
designated "Class A Preferred Stock" and the class of preferred stock designated
"Class B Preferred Stock" are as set forth in this Article FOURTH and in Exhibit
A to this Restated Certificate of Incorporation.
FIFTH. The following is a list of the names and residences of the original
shareholders, and of the number of shares held by each:
H. M. Flagler of New York City, one share.
Paul Babcock, Jr. of Jersey City, one share.
James McGee of Plainfield, New Jersey, one share.
Thos. C. Bushnell of Morristown, New Jersey, one share.
John D. Rockefeller of Cleveland, Ohio, }
Wm. Rockefeller of New York City, }
J. A. Bostwick of New York City, }
John D. Archbold of New York City, }
O. H. Payne of Cleveland, Ohio, }
Wm. G. Warden of Philadelphia, Pa., }
Benj. Brewster of New York City, }
Chas. Pratt of Brooklyn, N.Y., }
and H. M. Flagler of New York City. }
3
<PAGE>
Trustees of Standard Oil Trust, twenty-nine thousand nine hundred and
ninety-six shares (29,996), of which twenty-one thousand seven hundred and
twenty-four shares (21,724) were issued for property purchased and
necessary for the business of this corporation.
SIXTH. The number of directors of the corporation as of December 1, 1996
is 12 and their names and business office addresses are:
Dr. Michael J. Boskin Mr. Harry J. Longwell
Hoover Institution 5959 Las Colinas Boulevard
Stanford University Irving, Texas 75039-2298
Stanford, California 94305-6010
Mr. D. Wayne Calloway Mrs. Marilyn Carlson Nelson
PepsiCo, Inc. Carlson Holdings, Inc.
700 Anderson Hill Road 12755 Highway 55
Purchase, New York 10577 Minneapolis, Minnesota 55441
Mr. Jess Hay Mr. Lee R. Raymond
Texas Commerce Tower 5959 Las Colinas Boulevard
2200 Ross Avenue Irving, Texas 75039-2298
Dallas, Texas 75201-2764
Mr. James R. Houghton Dr. John H. Steele
Corning Incorporated Woods Hole Oceanographic
80 E. Market Street Institution
Corning, New York 14830 Woods Hole, Massachusetts 02543
Mr. William R. Howell Mr. Robert E. Wilhelm
J. C. Penney Company, Inc. 5959 Las Colinas Boulevard
6501 Legacy Drive Irving, Texas 75039-2298
Plano, Texas 75024-3698
Mr. Philip E. Lippincott Mr. Joseph D. Williams
P.O. Box 2159 Warner-Lambert Company
Park City, Utah 84060 182 Tabor Road
Morris Plains, New Jersey 07950
SEVENTH. The number of directors at any time may be increased or
diminished by vote of the board of directors, and in case of any such increase
the board of directors shall have power to elect each such additional director
to hold office until the next succeeding annual meeting of shareholders and
until his successor shall have been elected and qualified.
The board of directors, by the affirmative vote of a majority of the
directors in office, may remove a director or directors for cause where, in the
judgment of such majority, the continuation of the director or directors in
office would be harmful to the corporation and may suspend the director or
directors for a reasonable period pending final determination that cause exists
for such removal.
4
<PAGE>
The board of directors from time to time shall determine whether and to
what extent, and at what times and places, and under what conditions and
regulations, the accounts and books of the corporation, or any of them, shall be
open to the inspection of the shareholders; and no shareholder shall have any
right of inspecting any account or book or document of the corporation, except
as conferred by statute or authorized by the board of directors, or by a
resolution of the shareholders.
EIGHTH. The following action may be taken by the affirmative vote of a
majority of the votes cast by the holders of shares of the corporation entitled
to vote thereon:
(1) The adoption by the shareholders of a proposed amendment of the
certificate of incorporation of the corporation;
(2) The adoption by the shareholders of a proposed plan of merger or
consolidation involving the corporation;
(3) The approval by the shareholders of a sale, lease, exchange, or other
disposition of all, or substantially all, the assets of the corporation
otherwise than in the usual and regular course of business as conducted by the
corporation; and
(4) Dissolution.
NINTH. Except as otherwise provided by statute or by this certificate of
incorporation or the by-laws of the corporation as in each case the same may be
amended from time to time, all corporate powers may be exercised by the board of
directors. Without limiting the foregoing, the board of directors shall have
power, without shareholder action:
(1) To authorize the corporation to purchase, acquire, hold, lease,
mortgage, pledge, sell and convey such property, real, personal and mixed,
without as well as within the State of New Jersey, as the board of directors may
from time to time determine, and in payment for any property to issue, or cause
to be issued, shares of the corporation, or bonds, debentures, notes or other
obligations or evidence of indebtedness thereof secured by pledge, security
interest or mortgage, or unsecured; and
(2) To authorize the borrowing of money, the issuance of bonds, debentures,
notes and other obligations or evidences of indebtedness of the corporation,
secured or unsecured, and the inclusion of provisions as to redeemability and
convertibility into shares of stock of the corporation or otherwise, and, as
security for money borrowed or bonds, debentures, notes and other obligations or
evidences of indebtedness issued by the corporation, the mortgaging or pledging
of any property, real, personal, or mixed, then owned or thereafter acquired by
the corporation.
TENTH. To the full extent from time to time permitted by law, no director
or officer of the corporation shall be personally liable to the corporation or
its shareholders for damages for breach of any duty owed to the corporation or
its shareholders. Neither the amendment or repeal of this Article, nor the
adoption of any provision of this certificate of incorporation inconsistent with
this Article, shall eliminate or reduce the protection afforded by this Article
to
5
<PAGE>
a director or officer of the corporation with respect to any matter which
occurred, or any cause of action, suit or claim which but for this Article would
have accrued or arisen, prior to such amendment, repeal or adoption.
IN WITNESS WHEREOF, Exxon Corporation has caused this Restated Certificate
of Incorporation to be duly executed as of December 16, 1996.
EXXON CORPORATION
L. R. RAYMOND
Chairman of the Board
FILED AND RECORDED
December 18, 1996
Lonna R. Hooks
Secretary of State New Jersey
6
<PAGE>
EXHIBIT A
PART I
CLASS A PREFERRED STOCK
Section 1. Designation and Amount; Special Purpose Restricted Transfer
--------- -----------------------------------------------------------
Issue.
-----
(A) The shares of this class of preferred stock shall be designated as "Class
A Preferred Stock" (referred to herein as the "Class A Preferred Stock") and the
aggregate number of shares constituting such class which the Corporation shall
have the authority to issue is 16,500,000. The shares of this class shall have
a stated value of $61.50 per share (the "Stated Value").
(B) Shares of Class A Preferred Stock shall be issued only to a trustee
acting on behalf the Plan (as defined in Section 9(F)(vii)). In the event of
any transfer of shares of Class A Preferred Stock to any person other than the
Corporation or the trustee of the Plan, the shares of Class A Preferred Stock so
transferred, upon such transfer and without any further action by the
Corporation or the holder, shall be automatically converted into shares of the
Corporation's Common Stock without par value (the "Common Stock") pursuant to
Section 5 hereof and no such transferee shall have any of the voting powers,
preferences and relative, participating, optional or special rights ascribed to
shares of Class A Preferred Stock hereunder but, rather, only the powers and
rights pertaining to the Common Stock into which such shares of Class A
Preferred Stock shall be so converted. In the event of such a conversion, the
transferee of the shares of Class A Preferred Stock shall be treated for all
purposes as the record holder of the shares of Common Stock into which such
shares of Class A Preferred Stock have been automatically converted as of the
date of such transfer; provided, however, that the pledge of Class A Preferred
-------- -------
Stock as collateral under any credit agreement for the financing or refinancing
of the initial purchase of the Class A Preferred Stock by the Plan shall not
constitute a transfer for purposes of this Section 1. Certificates representing
shares of Class A Preferred Stock shall be legended to reflect such restrictions
on transfer. Notwithstanding the foregoing provisions of this Section 1(B),
shares of Class A Preferred Stock (i) upon allocation to the account of a
participant in the Plan, shall be converted into shares of Common Stock or Class
B Preferred Stock, as the case may be, pursuant to Section 5 hereof and the
shares of Common Stock issued upon such conversion may be transferred by the
holder thereof as permitted by law and the shares of Class B Preferred Stock
issued upon such conversion may be transferred by the holder only as permitted
by Part II hereof and (ii) shall be redeemable by the Corporation upon the terms
and conditions provided by Sections 6, 7 and 8 hereof.
Section 2. Dividends and Distributions.
--------- ---------------------------
(A) Subject to the provisions for adjustment hereinafter set forth, the
holders of shares of Class A Preferred Stock shall be entitled to receive, when,
as and if declared by the Board of Directors out of funds available under
applicable law and the Certificate of Incorporation, cumulative cash dividends
("Preferred Dividends") in an amount per share equal to $4.68 per annum and no
more, payable (x) monthly in arrears, one-twelfth on the 20th day of each month,
commencing on July 20, 1989 and ending on June 20, 1990, and thereafter (y)
quarterly in arrears, one-quarter on the 20th day of each March, June, September
and December in each year (each such monthly and quarterly date a "Dividend
Payment Date"), to holders of record at the start of business on such Dividend
Payment Date. In the event that
7
<PAGE>
any Dividend Payment Date shall occur on any day other than a "Business Day" (as
defined in Section 9(F)(i)), the dividend payment due on such Dividend Payment
Date shall be paid on the Business Day immediately succeeding such Dividend
Payment Date. Preferred Dividends shall begin to accrue on outstanding shares of
Class A Preferred Stock from the date of issuance of such shares of Class A
Preferred Stock. Preferred Dividends shall accrue on a daily basis whether or
not the Corporation shall have earnings or surplus at the time. Preferred
Dividends accrued after the date of issuance for any period less than a full
monthly or quarterly period, as the case may be, between Dividend Payment Dates
shall be computed on the basis of a 360-day year consisting of twelve 30-day
months and such a proportional dividend shall accrue for the period from the
date of issuance until the end of the dividend payment period in which such
issuance occurs. Accumulated but unpaid Preferred Dividends shall accumulate as
of the Dividend Payment Date on which they first become payable, but no interest
shall accrue on accumulated but unpaid Preferred Dividends.
(B) So long as any Class A Preferred Stock shall be outstanding, no dividend
shall be declared or paid or set apart for payment on any other class of stock
ranking on a parity with the Class A Preferred Stock as to dividends ("Parity
Stock"), unless there shall also be or have been declared and paid or set apart
for payment on the Class A Preferred Stock dividends ratably in proportion to
the respective amounts of dividends (a) accumulated and unpaid through all
dividend payment periods for the Class A Preferred Stock ending on or before the
dividend payment date of such Parity Stock and (b) accumulated and unpaid on
such Parity Stock through the dividend payment period on such Parity Stock next
preceding such dividend payment date. So long as any Class A Preferred Stock
shall be outstanding, in the event that full cumulative dividends on the Class A
Preferred Stock have not been declared and paid or set apart for payment for all
prior dividend payment periods, the Corporation shall not declare or pay or set
apart for payment any dividends or make any other distributions on, or make any
payment on account of the purchase, redemption or other retirement of, any other
class of stock or series thereof of the Corporation ranking as to dividends
junior to the Class A Preferred Stock ("Junior Stock") until full cumulative and
unpaid dividends on the Class A Preferred Stock shall have been paid or declared
and set apart for payment; provided, however, that the foregoing shall not apply
-------- -------
to (i) any dividend payable solely in any shares of any Junior Stock, or (ii)
the acquisition of shares of any Junior Stock either (x) pursuant to any
employee or director incentive or benefit plan or arrangement (including any
employment, severance or consulting agreement) of the Corporation or any
subsidiary of the Corporation heretofore or hereafter adopted or (y) in exchange
solely for shares of any other Junior Stock.
Section 3. Voting Rights. The holders of shares of Class A Preferred Stock
--------- -------------
shall have the following voting rights:
(A) The holders of Class A Preferred Stock shall be entitled to vote on all
matters submitted to a vote of the holders of Common Stock of the Corporation,
voting together as one class with the holders of Common Stock and any other
class or series of preferred stock so voting as one class. Each share of the
Class A Preferred Stock shall entitle the holder thereof to a number of votes
equal to the number of shares of Common Stock into which such share of Class A
Preferred Stock could be converted pursuant to the first sentence of Section
5(A) hereof on the record date for determining the shareholders entitled to
vote, rounded to the nearest one-tenth of a vote; it being understood that
whenever the "Conversion Ratio" (as defined in Section 5 hereof) is adjusted
pursuant to Section 9 hereof, the voting rights of the Class A Preferred Stock
shall also be similarly adjusted.
8
<PAGE>
(B) Except as otherwise required by law, holders of Class A Preferred Stock
shall have no special voting rights and their consent shall not be required
(except to the extent they are entitled to vote with holders of Common Stock or
any other class or series of preferred stock) for the taking of any corporate
action.
Section 4. Liquidation, Dissolution or Winding-Up.
--------- --------------------------------------
(A) Upon any voluntary or involuntary liquidation, dissolution or winding-up
of the Corporation, the holders of Class A Preferred Stock shall be entitled to
receive out of assets of the Corporation which remain after satisfaction in full
of all valid claims of creditors of the Corporation and which are available for
payment to shareholders, and subject to the rights of the holders of any class
of stock of the Corporation ranking senior to or on a parity with the Class A
Preferred Stock in respect of distributions upon liquidation, dissolution or
winding-up of the Corporation, before any amount shall be paid or distributed
among the holders of Common Stock or any other class of stock ranking junior to
the Class A Preferred Stock in respect of distributions upon liquidation,
dissolution or winding-up of the Corporation, liquidating distributions in an
aggregate amount of $61.50 per share of Class A Preferred Stock plus an amount
equal to all accrued and unpaid dividends thereon to the date fixed for
distribution, and no more. If upon any liquidation, dissolution or winding-up
of the Corporation, the amounts payable with respect to the Class A Preferred
Stock and any other class of stock ranking as to any such distribution on a
parity with the Class A Preferred Stock are not paid in full, the holders of the
Class A Preferred Stock and such other class of stock shall share ratably in any
distribution of assets in proportion to the full respective preferential amounts
to which they are entitled. After payment of the full amount to which they are
entitled as provided by the foregoing provisions of this Section 4(A), the
holders of shares of Class A Preferred Stock shall not be entitled to any
further right or claim to any of the remaining assets of the Corporation.
(B) Neither the merger, consolidation or combination of the Corporation with
or into any other corporation, nor the sale, lease, transfer or other exchange
of all or any portion of the assets of the Corporation (or any purchase or
redemption of some or all of the shares of any class or series of stock of the
Corporation), shall be deemed to be a dissolution, liquidation or winding-up of
the affairs of the Corporation for purposes of this Section 4, but the holders
of Class A Preferred Stock shall nevertheless be entitled in the event of any
such transaction to the rights provided by Section 8 hereof.
(C) Written notice of any voluntary or involuntary liquidation, dissolution
or winding-up of the Corporation, stating the payment date or dates when, and
the place or places where, the amounts distributable to holders of Class A
Preferred Stock and any other class or series of preferred stock in such
circumstances shall be payable, and stating that, except in the case of Class A
Preferred Stock represented by uncertificated shares, such payment will be made
only after the surrender (or submission for notation of any partial payment) of
such holder's certificates representing shares of Class A Preferred Stock, shall
be given by first class mail, postage prepaid, mailed not less than twenty (20)
days prior to any payment date stated therein, to the holders of Class A
Preferred Stock, at the address shown on the books of the Corporation or any
transfer agent for the Class A Preferred Stock.
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Section 5. Conversion into Common Stock or Class B Preferred Stock.
--------- -------------------------------------------------------
(A) A holder of shares of Class A Preferred Stock shall be entitled at any
time, but not later than the close of business on the Redemption Date (as
hereinafter defined) of such shares pursuant to Section 6, 7 or 8 hereof, to
cause any or all of such shares to be converted into a number of shares of
Common Stock for each share of Class A Preferred Stock which initially shall be
one and which shall be adjusted as hereinafter provided (and, as so adjusted, is
hereinafter sometimes referred to as the "Conversion Ratio"). In addition to
the foregoing and subject to Section 5(B) hereof, a holder of shares of Class A
Preferred Stock upon allocation of such shares to the account of a participant
in the Plan shall be required to convert each such share of Class A Preferred
Stock into the greater of (i) that number of shares of Common Stock or Class B
Preferred Stock, as the case may be, which shall be the quotient obtained by
dividing the Stated Value of each share of Class A Preferred Stock by the
greater of (x) $15 divided by the Conversion Ratio or (y) the average of the
high and low sales prices for a share of Common Stock on the trading day next
preceding the Conversion Date (as hereinafter defined) on which one or more
sales of shares of Common Stock occur, all as reported on the Composite Tape (as
hereinafter defined), or (ii) that number of shares of Common Stock or Class B
Preferred Stock equal to the Conversion Ratio. The Corporation's determination
in good faith in respect of the number of shares to be issued upon any and all
conversions pursuant to the preceding sentence shall be conclusive.
(B) Any holder of shares of Class A Preferred Stock desiring or required to
convert such shares into shares of Common Stock or Class B Preferred Stock, as
the case may be, shall surrender the certificate or certificates representing
the shares of Class A Preferred Stock being converted, duly assigned or endorsed
for transfer to the Corporation (or accompanied by duly executed stock powers
relating thereto) in case of a request for registration in a name other than
that of such holder, at the offices of the Corporation or the transfer agent for
the Common Stock or Class B Preferred Stock, as the case may be, accompanied by
written notice of conversion. Such notice of conversion shall specify (i) the
number of shares of Class A Preferred Stock to be converted, and the name or
names in which such holder wishes the certificate or certificates for Common
Stock or Class B Preferred Stock, as the case may be, and for any shares of
Class A Preferred Stock not to be so converted to be issued (or the name or
names in which ownership of such shares is to be registered in the event that
they are to be uncertificated), (ii) the address or addresses to which such
holder wishes delivery to be made of such new certificates to be issued upon
such conversion, and (iii) whether the conversion is being effected pursuant to
the second sentence of Section 5(A) hereof, and if so, whether the shares issued
upon conversion will be shares of Common Stock or Class B Preferred Stock. In
the case of a conversion of shares of Class A Preferred Stock required pursuant
to the second sentence of Section 5(A), if such notice fails to specify the
class of stock desired, the holder thereof shall receive shares of Class B
Preferred Stock.
(C) A conversion of shares of Class A Preferred Stock into shares of Common
Stock or Class B Preferred Stock, as the case may be, pursuant to Section 5(A)
shall be effective immediately before the close of business on the day of the
later of (i) the surrender to the Corporation of the certificate or certificates
for the shares of Series A Preferred Stock to be converted, duly assigned or
endorsed for transfer to the Corporation (or accompanied by duly executed stock
powers relating thereto) in case of a request for registration in a name other
than that of such holder and (ii) the giving of the notice of conversion as
provided herein (the "Conversion Date"). On and after such Conversion Date, the
person or persons entitled to receive the Common Stock or Class B Preferred
Stock, as the case may be, issuable upon such conversion shall be treated for
all purposes as the record holder or holders of such shares of Common Stock or
Class B Preferred Stock, as the case may be.
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(D) Promptly after the Conversion Date for shares of Class A Preferred Stock
to be converted, the Corporation or the transfer agent for the Common Stock or
the Class B Preferred Stock, as the case may be, shall issue and send by hand
delivery (with receipt to be acknowledged) or by first class mail, postage
prepaid, to the holder of such shares or to such holder's designee, at the
address designated by such holder, a certificate or certificates for the number
of shares of Common Stock or Class B Preferred Stock, to which such holder shall
be entitled upon conversion. In the event that there shall have been
surrendered a certificate or certificates representing shares of Class A
Preferred Stock only part of which are to be converted, the Corporation or the
transfer agent for the Common Stock or Class B Preferred Stock, as the case may
be, shall issue and deliver to such holder or such holder's designee a new
certificate or certificates representing the number of shares of Class A
Preferred Stock which shall not have been converted.
(E) The Corporation shall not be obligated to deliver to holders of Class A
Preferred Stock any fractional share or shares of Common Stock or Class B
Preferred Stock, as the case may be, issuable upon any conversion of such shares
of Class A Preferred Stock, but in lieu thereof may make a cash payment in
respect thereof in any manner permitted by law. The determination in good faith
by the Corporation of the amount of any such cash payments shall be conclusive.
(F) The Corporation shall at all times reserve and keep available out of its
authorized and unissued and/or treasury Common Stock and Class B Preferred Stock
solely for issuance upon the conversion of shares of Class A Preferred Stock as
herein provided, free from any preemptive rights, the maximum number of shares
of Common Stock and Class B Preferred Stock as shall from time to time be
issuable upon the conversion of all the shares of Class A Preferred Stock then
outstanding.
Section 6. Redemption at the Option of the Corporation.
--------- -------------------------------------------
(A) The Class A Preferred Stock shall be redeemable, in whole or in part, at
the option of the Corporation at any time at the Stated Value, plus an amount
equal to all accrued and unpaid dividends thereon to the date fixed for
redemption (the close of business on such date being referred to as the
"Redemption Date"); provided that such redemption may be made on or after
--------
December 20, 1990 and prior to July 20, 1995 only if (i) the Corporation shall
have requested that the trustee of the Plan repay the indebtedness incurred by
such trustee to purchase the shares of Class A Preferred Stock and (ii) either
(x) Section 404(k) of the Code (as hereinafter defined) is repealed or amended
or the Internal Revenue Service or the Treasury Department promulgates a Revenue
Ruling or Regulation or a federal Court of Appeals issues a decision involving
the Corporation, at any time on or after December 20, 1990 and prior to July 20,
1995 with the effect that less than 100% of the dividends payable on the shares
of any capital stock of the Corporation including, without limitation, Class A
Preferred Stock, Class B Preferred Stock or Common Stock held in the Plan is
deductible by the Corporation, when paid to participants in the Plan or their
beneficiaries or used to repay indebtedness as described in Section 404(k) of
the Code, from its gross income for purposes of determining its liability for
the federal income tax imposed by Section 11 of the Code or (y) the Code is
amended at any time on or after December 20, 1990 and prior to July 20, 1995
(other than to change the rate of any existing tax imposed by the Code) or the
Internal Revenue Service or the Treasury Department promulgates a Revenue Ruling
or Regulation or a federal Court of Appeals issues a decision involving the
Corporation, with the effect that the Corporation's liability for the
alternative minimum tax imposed by Section 55 of the Code, the
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general federal income tax imposed by Section 11 of the Code or any other tax
hereafter imposed by the Code is increased solely by reason of its claiming a
deduction in respect of dividends paid on the shares of any capital stock of the
Corporation including, without limitation, Class A Preferred Stock, Class B
Preferred Stock or Common Stock held in the Plan in a manner consistent with
Section 404(k) of the Code. Payment of the redemption price shall be made by the
Corporation in cash or shares of Common Stock or a combination thereof, as
permitted by paragraph (C) of this Section 6. From and after the Redemption
Date, dividends on shares of Class A Preferred Stock called for redemption will
cease to accrue, such shares will no longer be deemed to be outstanding and all
rights in respect of such shares of the Corporation shall cease, except the
right to receive the redemption price. No interest shall accrue on the
redemption price after the Redemption Date. If less than all of the outstanding
shares of Class A Preferred Stock are to be redeemed, the Corporation shall
either redeem a portion of the shares of each holder determined pro rata based
on the number of shares held by each holder or shall select the shares to be
redeemed by lot or as may be otherwise determined by the Board of Directors of
the Corporation.
(B) Unless otherwise required by law, notice of redemption pursuant to
paragraph (A) of this Section 6 will be sent to the holders of Class A Preferred
Stock at the address shown on the books of the Corporation or any transfer agent
for the Class A Preferred Stock by first class mail, postage prepaid, mailed not
less than thirty (30) days nor more than sixty (60) days prior to the Redemption
Date. Such Class A Preferred Stock shall continue to be entitled to the
conversion rights provided in Section 5 hereof through such Redemption Date.
Each such notice shall state: (i) the Redemption Date; (ii) the total number of
shares of the Class A Preferred Stock to be redeemed and, if fewer than all the
shares held by such holder are to be redeemed, the number of such shares to be
redeemed from such holder; (iii) the redemption price and the intended form of
payment; (iv) the place or places where certificates for such shares are to be
surrendered for payment of the redemption price; (v) that dividends on the
shares to be redeemed will cease to accrue on such Redemption Date; and (vi) a
summary of the conversion rights of the shares to be redeemed, the period within
which conversion rights may be exercised, and the Conversion Ratio in effect at
the time. Upon surrender of the certificate for any shares so called for
redemption and not previously converted (or upon giving the notice of redemption
in the case of uncertificated shares), but not earlier than the Redemption Date,
the Corporation shall pay to the holder of such shares or its designee the
redemption price set forth pursuant to this Section 6.
(C) The Corporation, at its option, may make payment of the redemption price
required upon redemption of shares of Class A Preferred Stock pursuant to
Section 6 or 7 hereof in cash or in shares of Common Stock or in a combination
of such shares and cash, any such shares of Common Stock to be valued for such
purpose at their Fair Market Value (as defined in Section 9(F)(iii)) on the
Redemption Date. Any shares of Common Stock so issued or delivered (or issued
or delivered pursuant to Section 7) shall be deemed to have been issued or
delivered to the holder of the Class A Preferred Stock as of the Redemption Date
and such holder shall be deemed to have become the record holder thereof as of
the Redemption Date.
Section 7. Other Redemption Rights.
--------- -----------------------
Shares of Class A Preferred Stock shall be redeemed by the Corporation for
cash or, if the Corporation so elects, in shares of Common Stock, or a
combination of such shares and cash (any such shares of Common Stock to be
valued for such purpose in accordance with Section 6(C)), at a redemption price
equal to the Stated Value plus accrued and unpaid dividends thereon to the date
fixed for redemption, at the option of the holder, at any time and
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<PAGE>
from time to time upon notice to the Corporation given not less than five (5)
Business Days prior to the Redemption Date fixed by the holder in such notice
(i) in the event that the Plan is determined by the Internal Revenue Service not
to be qualified within the meaning of Sections 401(a) and 4975(e)(7) of the
Internal Revenue Code of 1986, as amended from time to time (the "Code") or (ii)
in the event that the Plan is terminated in accordance with its terms.
Section 8. Consolidation, Combination, Merger, etc.
--------- ----------------------------------------
(A) In the event that the Corporation shall consummate any consolidation,
combination, merger or substantially similar transaction, pursuant to which the
outstanding shares of Common Stock are by operation of law exchanged solely for
or changed, reclassified or converted solely into stock of any successor or
resulting corporation (including the Corporation) that constitutes "qualifying
employer securities" with respect to a holder of Class A Preferred Stock within
the meaning of Section 409(1) of the Code and Section 407(d)(5) of the Employee
Retirement Income Security Act of 1974, as amended, or any successor provisions
of law, and, if applicable, for a cash payment in lieu of fractional shares, if
any, the shares of Class A Preferred Stock of such holder shall in connection
therewith be exchanged for or converted into preferred stock of such successor
or resulting corporation, having in respect of such corporation insofar as
possible the same powers, preferences and relative, participating, optional or
other special rights (including the redemption rights provided by Sections 6, 7
and 8 hereof), and the qualifications, limitations or restrictions thereon, that
the Class A Preferred Stock had immediately prior to such transaction, except
that after such transaction each share of the Class A Preferred Stock shall be
convertible, otherwise on the terms and conditions provided by Section 5 hereof,
into the number and kind of qualifying employer securities so receivable by a
holder of the number of shares of Common Stock into which such shares of Class A
Preferred Stock could have been converted pursuant to the first sentence of
Section 5(A) hereof immediately prior to such transaction; provided, however,
-------- -------
that if by virtue of the structure of such transaction, a holder of Common Stock
is required to make an election with respect to the nature and kind of
consideration to be received in such transaction, such holder of shares of Class
A Preferred Stock shall be entitled to make an equivalent election as to the
nature and kind of consideration it shall receive, and if such election cannot
practicably be made by the holders of the Class A Preferred Stock, then the
shares of Class A Preferred Stock shall, by virtue of such transaction and on
the same terms as apply to the holders of Common Stock, be convertible into or
exchangeable for the aggregate amount of qualifying employer securities (payable
in like kind and proportion) receivable by a holder of the number of shares of
Common Stock into which such shares of Class A Preferred Stock could have been
converted immediately prior to such transaction if such holder of Common Stock
failed to exercise any rights of election to receive any kind or amount of
qualifying employer securities receivable upon such transaction (provided that,
--------
if the kind or amount of qualifying employer securities receivable upon such
transaction is not the same for each non-electing share, then the kind and
amount of qualifying employer securities receivable upon such transaction for
each such non-electing share shall be the kind and amount so receivable per
share by a plurality of the non-electing shares). The conversion rights of the
class of preferred stock of such successor or resulting corporation for which
the Class A Preferred Stock is exchanged or into which it is converted, shall
successively be subject to adjustments pursuant to Section 9 hereof after any
such transactions as nearly equivalent as practicable to the adjustments
provided for by such Section prior to such transaction. The Corporation shall
not consummate any such merger, consolidation or similar transaction unless the
successor or resulting corporation shall have agreed to recognize and honor the
rights of the holders of Series A Preferred Stock set forth in this Section
8(A).
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<PAGE>
(B) In the event that the Corporation shall consummate any consolidation,
combination, merger or substantially similar transaction, pursuant to which the
outstanding shares of Common Stock are by operation of law exchanged for or
changed, reclassified or converted into other stock or securities or cash or any
other property, or any combination thereof, other than solely qualifying
employer securities (as referred to in Section 8(A)) and cash payments, if
applicable, in lieu of fractional shares, outstanding shares of Class A
Preferred Stock shall, without any action on the part of the Corporation or any
holder thereof (but subject to Section 8(C)), be deemed to have been converted
pursuant to the first sentence of Section 5(A) hereof immediately prior to the
consummation of such merger, consolidation, combination or similar business
combination transaction into the number of shares of Common Stock into which
such shares of Class A Preferred Stock could have been converted pursuant to the
first sentence of Section 5(A) hereof at such time so that each share of Class A
Preferred Stock shall, by virtue of such transaction and on the same terms as
apply to the holders of Common Stock, be converted into or exchanged for the
aggregate amount of stock, securities, cash or other property (payable in like
kind and proportion) receivable by a holder of the number of shares of Common
Stock into which such share of Class A Preferred Stock could have been converted
pursuant to the first sentence of Section 5(A) hereof immediately prior to such
transaction; provided, however, that if by virtue of the structure of such
-------- -------
transaction, a holder of Common Stock is required to make an election with
respect to the nature and kind of consideration to be received in such
transaction, the holder of Class A Preferred Stock shall be entitled to make an
equivalent election as to the kind of consideration it shall receive, and if
such election cannot practicably be made by the holders of the Class A Preferred
Stock, then the shares of Class A Preferred Stock shall, by virtue of such
transaction and on the same terms as apply to the holders of Common Stock, be
converted into or exchanged for the aggregate amount of stock, securities, cash
or other property (payable in like kind and proportion) receivable by a holder
of the number of shares of Common Stock into which such shares of Class A
Preferred Stock could have been converted immediately prior to such transaction
if such holder of Common Stock failed to exercise any rights of election as to
the kind or amount of stock, securities, cash or other property receivable upon
such transaction (provided that, if the kind or amount of stock, securities,
-------- ----
cash or other property receivable upon such transaction is not the same for each
non-electing share, then the kind and amount of stock, securities, cash or other
property receivable upon such transaction for each such non-electing share shall
be the kind and amount so receivable per share by a plurality of the non-
electing shares).
(C) In the event the Corporation shall enter into any agreement providing for
any consolidation, combination, merger or substantially similar transaction
described in Section 8(B), then the Corporation shall as soon as practicable
thereafter (and in any event at least twenty (20) business days before
consummation of such transaction) give notice of such agreement and the material
terms thereof to each holder of Class A Preferred Stock and each holder shall
have the right to elect, by written notice to the Corporation, to receive, upon
consummation of such transaction (if and when such transaction is consummated),
from the Corporation or the successor of the Corporation, in redemption and
retirement of such Class A Preferred Stock, a cash payment equal to the amount
payable in respect of shares of Class A Preferred Stock upon redemption pursuant
to Section 6(A) hereof as if the date of the consummation of such transaction
was the Redemption Date. No such notice of redemption shall be effective unless
given to the Corporation prior to the close of business on the second Business
Day prior to consummation of such transaction, unless the Corporation or the
successor of the Corporation shall waive such prior notice, but any notice of
redemption so given prior to such time may be withdrawn by notice of withdrawal
given to the Corporation prior to the close of business on the second Business
Day prior to consummation of such transaction.
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Section 9. Anti-dilution Adjustments.
--------- -------------------------
(A) In the event the Corporation shall, at any time or from time to time
while any of the shares of the Class A Preferred Stock are outstanding, (i) pay
a dividend or make a distribution in respect of the Common Stock in shares of
Common Stock, (ii) subdivide the outstanding shares of Common Stock or (iii)
combine the outstanding shares of Common Stock into a smaller number of shares,
in each case whether by reclassification of shares, recapitalization of the
Corporation (including a recapitalization effected by a merger or consolidation
to which Section 8 hereof does not apply) or otherwise, the Conversion Ratio in
effect immediately prior to such action shall be adjusted by multiplying such
Conversion Ratio by a fraction, the numerator of which is the number of shares
of Common Stock outstanding immediately after such event, and the denominator of
which is the number of shares of Common Stock outstanding immediately before
such event. An adjustment made pursuant to this Section 9(A) shall be given
effect, upon payment of such a dividend or distribution, as of the record date
for the determination of shareholders entitled to receive such dividend or
distribution (on a retroactive basis) and in the case of a subdivision or
combination shall become effective immediately as of the effective date thereof.
(B) In the event the Corporation shall, at any time or from time to time
while any shares of Class A Preferred Stock are outstanding, issue rights,
options or warrants to all holders of its outstanding Common Stock, without any
charge to such holders, entitling them (for a period expiring within forty-five
(45) days after the record date mentioned below) to subscribe for or purchase
shares of Common Stock at a price per share which is more than 2% lower at the
record date mentioned below than the then Current Market Price per share of
Common Stock, the Conversion Ratio in effect immediately prior to such action
shall, subject to paragraphs (D) and (E) of this Section 9, be adjusted by
multiplying such Conversion Ratio by a fraction (i) the numerator of which shall
be the number of shares of Common Stock outstanding on the date of issuance of
such rights, options or warrants plus the number of additional shares of Common
Stock issued upon exercise thereof, and (ii) the denominator of which shall be
the number of shares of Common Stock outstanding on the date of issuance of such
rights, options or warrants plus the number of shares which the aggregate
offering price of the total number of shares of Common Stock so issued would
purchase at the then Current Market Price per share of Common Stock. Such
adjustment shall be made whenever such rights, options or warrants have expired,
and shall become effective retroactively immediately after the record date for
the determination of shareholders entitled to receive such rights, options or
warrants on the basis of the number of rights, options or warrants actually
exercised.
(C) In the event the Corporation shall, at any time or from time to time
while any of the shares of Class A Preferred Stock are outstanding, make an
Extraordinary Distribution (as defined in Section 9(F)(ii)) in respect of the
Common Stock, whether by dividend, distribution, reclassification of shares or
recapitalization of the Corporation (other than a recapitalization or
reclassification effected by a merger, combination or consolidation to which
Section 8 hereof applies), the Conversion Ratio in effect immediately prior to
such Extraordinary Distribution shall, subject to paragraphs (D) and (E) of this
Section 9, be adjusted by multiplying such Conversion Ratio by a fraction, the
numerator of which shall be the product of (i) the number of shares of Common
Stock outstanding immediately before such Extraordinary Distribution and (ii)
the Fair Market Value of a share of Common Stock on the Valuation Date (as
defined in Section 9(F)(vi)) with respect to an Extraordinary Distribution, and
the denominator of which shall be (i) the product of (x) the number of shares of
Common Stock outstanding immediately before such Extraordinary Distribution and
(y) the Fair Market Value of a share of Common
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<PAGE>
Stock on the Valuation Date with respect to an Extraordinary Distribution, minus
-----
(ii) the Fair Market Value of the Extraordinary Distribution on the Valuation
Date. The Corporation shall send each holder of Class A Preferred Stock notice
of its intent to make any Extraordinary Distribution at the same time as, or as
soon as practicable after, such intent is first communicated (including by
announcement of a record date in accordance with the rules of the principal
stock exchange on which the Common Stock is listed or admitted to trading) to
holders of Common Stock. Such notice shall indicate the intended record date and
the amount and nature of such dividend or distribution, and the Conversion Ratio
in effect at such time.
(D) Notwithstanding any other provisions of this Section 9, the Corporation
shall not be required to make any adjustment of the Conversion Ratio unless such
adjustment would require an increase or decrease of at least one percent (1%) in
the Conversion Ratio. Any lesser adjustment shall be carried forward and shall
be made no later than the time of, and together with, the next subsequent
adjustment which, together with any adjustment or adjustments so carried
forward, shall amount to an increase or decrease of at least one percent (1%) in
the Conversion Ratio.
(E) The Corporation shall be entitled to make such additional adjustments in
the Conversion Ratio, in addition to those required by the foregoing provisions
of this Section 9, as shall be necessary in order that any dividend or
distribution in shares of capital stock of the Corporation, subdivision,
reclassification or combination of shares of stock of the Corporation or any
recapitalization of the Corporation shall not be taxable to holders of the
Common Stock.
(F) For purposes of this Exhibit A, the following definitions shall apply:
(i) "Business Day" shall mean each day that is not a Saturday, Sunday or
a day on which state or federally chartered banking institutions in New York
are required or authorized to be closed.
(ii) "Extraordinary Distribution" shall mean any dividend or other
distribution (effected while any of the shares of Class A Preferred Stock are
outstanding) of (x) cash to the extent that such dividend or distribution
when added to the amount of all cash dividends and distributions paid during
the preceding period of twelve (12) calendar months exceeds fifteen percent
(15%) of the aggregate Fair Market Value of all shares of Common Stock
outstanding on the declaration date for such Extraordinary Distribution
and/or (y) any shares of capital stock of the Corporation (other than shares
of Common Stock), other securities of the Corporation, evidences of
indebtedness of the Corporation or any other person or any other property
(including shares of any subsidiary of the Corporation), or any combination
thereof, but excluding rights, options or warrants to which Section 9(B)
refers (without regard to the subscription or purchase price provided for
therein).
(iii) "Fair Market Value" shall mean, as to shares of Common Stock or any
other class of publicly traded capital stock or securities of the
Corporation or any other issuer which are publicly traded, the average of
the Current Market Prices of such shares or securities for each day of the
Adjustment Period. The "Fair Market Value" of any security which is not
publicly traded or of any other property shall mean the fair value thereof
as determined by an independent investment banking or appraisal firm
experienced in the valuation of such securities or property, which firm
shall be selected in good faith by the Board of Directors of the Corporation
or a committee thereof, or, if no such investment banking or appraisal firm
is in the good faith judgment of the Board
16
<PAGE>
of Directors or such committee available to make such determination, as
determined in good faith by the Board of Directors of the Corporation or
such committee.
(iv) "Current Market Price" of publicly traded shares of Common Stock
or any other class of capital stock or other security of the Corporation or
any other issuer shall mean (I) the last reported sales price, regular way,
or, if no sale takes place on such day, the average of the reported closing
bid and asked prices, regular way, in either case as reported on the
Composite Tape for New York Stock Exchange transactions (the "Composite
Tape") or, (II) if such security is not listed or admitted to trading on the
New York Stock Exchange (the "NYSE"), on the principal national securities
exchange on which such security is listed or admitted to trading or, (III)
if not listed or admitted to trading on any national securities exchange, on
the National Market System of the National Association of Securities
Dealers, Inc. Automated Quotation System ("NASDAQ National Market System")
or, (IV) if such security is not quoted on the NASDAQ National Market
System, the average of the closing bid and asked prices on each such day in
the over-the-counter market as reported by NASDAQ or, (V) if bid and asked
prices for such security on each such day shall not have been reported
through NASDAQ, the average of the bid and asked prices for such day as
furnished by any NYSE member firm regularly making a market in such security
selected for such purpose by the Board of Directors of the Corporation or a
committee thereof, in each case, on each trading day during the Adjustment
Period; provided, however, in determining the Current Market Price, the
-------- -------
value (as reasonably determined by the Board of Directors of the Corporation
or a committee thereof) of any "due-bill" or similar instrument which is
then associated with a share of Common Stock or any other class of capital
stock or other security, shall be deducted.
(v) "Adjustment Period" shall mean the period of five (5) consecutive
trading days preceding, and including, the date as of which the Fair Market
Value of a security is to be determined.
(vi) "Valuation Date" with respect to an Extraordinary Distribution
shall mean the date that is five (5) business days prior to the record date
for such Extraordinary Distribution.
(vii) "Plan" shall mean collectively the Corporation's Thrift and ESOP
plans and its Thrift and ESOP Trust.
(G) Whenever an adjustment to the Conversion Ratio and the related voting
rights of the Class A Preferred Stock is required pursuant hereto, the
Corporation shall forthwith deliver to the transfer agent(s) for the Common
Stock, the Class A Preferred Stock and Class B Preferred Stock, as the case may
be, and file with the Secretary of the Corporation, a statement signed by an
officer of the Corporation stating the adjusted Conversion Ratio determined as
provided herein, and the voting rights (as appropriately adjusted), of the Class
A Preferred Stock. Such statement shall set forth in reasonable detail such
facts as shall be necessary to show the reason and the manner of computing such
adjustment, including any determination of Fair Market Value involved in such
computation. Promptly after each adjustment to the Conversion Ratio and the
related voting rights of the Class A Preferred Stock, the Corporation shall mail
a notice thereof and of the then prevailing Conversion Ratio to each holder of
Class A Preferred Stock.
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Section 10. Ranking; Cancellation of Shares.
---------- -------------------------------
(A) The Class A Preferred Stock shall rank senior to the Common Stock and the
Class B Preferred Stock as to the payment of dividends and senior to the Common
Stock as to the distribution of assets on liquidation, dissolution and winding-
up of the Corporation, and, unless otherwise provided in the Certificate of
Incorporation, as the same may be amended, the Class A Preferred Stock shall
rank on a parity with all other classes or series of the Corporation's preferred
stock, as to payment of dividends and the distribution of assets on liquidation,
dissolution or winding-up.
(B) Any shares of Class A Preferred Stock acquired by the Corporation by
reason of the conversion or redemption of such shares as provided hereby, or
otherwise so acquired, shall be cancelled as shares of Class A Preferred Stock
and restored to the status of authorized but unissued shares of preferred stock
of the Corporation, undesignated as to classes or series, and may thereafter be
reissued as part of a new class or series of such preferred stock as permitted
by law.
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<PAGE>
PART II
CLASS B PREFERRED STOCK
Section 1. Designation and Amount; Special Purpose Restricted Transfer
--------- -----------------------------------------------------------
Issue.
-----
(A) The shares of this class of preferred stock shall be designated as "Class
B Preferred Stock" and the aggregate number of shares constituting such class
which the Corporation shall have the authority to issue is 100,000,000.
(B) Shares of Class B Preferred Stock shall be issued only to a trustee
acting on behalf the Plan. In the event of any transfer of shares of Class B
Preferred Stock to any person other than the Corporation or the trustee of the
Plan, the shares of Class B Preferred Stock so transferred, upon such transfer
and without any further action by the Corporation or the holder, shall be
automatically converted into shares of the Corporation's Common Stock (the
"Common Stock") pursuant to Section 5 hereof and no such transferee shall have
any of the voting powers, preferences or relative, participating, optional or
special rights ascribed to shares of Class B Preferred Stock hereunder but,
rather, only the powers and rights pertaining to the Common Stock into which
such shares of Class B Preferred Stock shall be so converted. In the event of
such a conversion, the transferee of the shares of Class B Preferred Stock shall
be treated for all purposes as the record holder of the shares of Common Stock
into which such shares of Class B Preferred Stock have been automatically
converted as of the date of such transfer. Certificates representing shares of
Class B Preferred Stock shall be legended to reflect such restrictions on
transfer. Notwithstanding the foregoing provisions of this Section 1(B), shares
of Class B Preferred Stock may be converted into shares of Common Stock pursuant
to Section 5 hereof and the shares of Common Stock issued upon such conversion
may be transferred by the holder thereof as permitted by law.
Section 2. Dividends and Distributions.
--------- ---------------------------
(A) Class B Preferred Stock shall be entitled to receive such dividends and
other distributions in cash, stock or property of the Corporation as may be
declared thereon by the Board of Directors from time to time out of assets or
funds of the Corporation legally available therefor, but only to the extent
hereinafter provided and no more. If at any time a dividend or other
distribution is declared on the Common Stock (whether in cash, property or other
securities), including as a result of recapitalization or reclassification, a
dividend or distribution shall simultaneously be declared on each share of Class
B Preferred Stock in an amount per share equal to 115% of the dividend or
distribution declared on each share of Common Stock and shall be payable on the
same date as such Common Stock dividend or distribution is payable. The record
date for holders of shares of Class B Preferred Stock for any such dividend or
distribution shall be the same as the record date for holders of shares of
Common Stock for the related dividend or distribution. Notwithstanding the
foregoing, the Corporation shall not at any time after the first issuance of a
share of Class B Preferred Stock (i) declare any dividend on Common Stock
payable in shares of Common Stock, (ii) subdivide the outstanding Common Stock,
or (iii) combine the outstanding Common Stock into a smaller number of such
shares, unless in each such case shares of Class B Preferred Stock shall become
entitled to a dividend in Class B Preferred Stock, be subdivided or be combined
in the same proportion as of the effective date of such event.
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<PAGE>
Section 3. Voting Rights. The holders of shares of Class B Preferred Stock
--------- -------------
shall have the following voting rights:
(A) The holders of Class B Preferred Stock shall be entitled to vote on all
matters submitted to a vote of the holders of Common Stock of the Corporation,
voting together as one class with the holders of Common Stock and any other
class or series of preferred stock so voting as one class. Each share of the
Class B Preferred Stock shall entitle the holder thereof to one vote.
(B) Except as otherwise required by law or set forth herein, holders of Class
B Preferred Stock shall have no special voting rights and their consent shall
not be required (except to the extent they are entitled to vote with holders of
Common Stock and any other class or series of Preferred Stock as set forth
herein) for the taking of any corporate action.
Section 4. Liquidation, Dissolution or Winding-Up.
--------- --------------------------------------
(A) Upon any voluntary or involuntary liquidation, dissolution or winding-up
of the Corporation, the holders of Class B Preferred Stock shall be entitled to
receive out of assets of the Corporation which remain after satisfaction in full
of all valid claims of creditors of the Corporation and which are available for
payment to shareholders, and subject to the rights of the holders of any stock
of the Corporation ranking senior to or on a parity with the Class B Preferred
Stock in respect of distributions upon liquidation, dissolution or winding-up of
the Corporation, before any amount shall be paid or distributed among the
holders of Common Stock or any other shares ranking junior to the Class B
Preferred Stock in respect of distributions upon liquidation, dissolution or
winding-up of the Corporation, liquidating distributions in an amount of $45 per
share (the "Liquidation Amount") of Class B Preferred Stock plus an amount equal
to all required and unpaid dividends thereon to the date fixed for distribution
and no more. In the event shares of Class B Preferred Stock are subdivided or
combined or any dividend is declared in such shares to holders thereof, then the
Liquidation Amount shall be proportionately adjusted as of the effective date of
such event. If upon any liquidation, dissolution or winding-up of the
Corporation, the amounts payable with respect to the Class B Preferred Stock and
any other stock ranking as to a distribution on such event on a parity with the
Class B Preferred Stock are not paid in full, the holders of the Class B
Preferred Stock and such other stock shall share ratably in any distribution of
assets in proportion to the full respective preferential amounts to which they
are entitled.
(B) Neither the merger, consolidation or combination of the Corporation with
or into any other corporation, nor the sale, lease, transfer or other exchange
of all or any portion of the assets of the Corporation (or any purchase or
redemption of some or all of the shares of any class or series of stock of the
Corporation), shall be deemed to be a dissolution, liquidation or winding-up of
the affairs of the Corporation for purposes of this Section 4, but the holders
of Class B Preferred Stock shall nevertheless be entitled in the event of any
such transaction to the rights provided by Section 6 hereof.
(C) Written notice of any voluntary or involuntary liquidation, dissolution
or winding-up of the Corporation, stating the payment date or dates when, and
the place or places where, the amounts distributable to holders of Class B
Preferred Stock and any other class or series of preferred stock in such
circumstances shall be payable, and stating that such payment will be made only
after the surrender (or submission for notation of any partial payment) of such
20
<PAGE>
holder's certificates representing shares of Class B Preferred Stock, except in
the case of Class B Preferred Stock represented by uncertificated shares, shall
be given by first class mail, postage prepaid, mailed not less than twenty (20)
days prior to any payment date stated therein, to the holders of Class B
Preferred Stock, at the address shown on the books of the Corporation or any
transfer agent for the Class B Preferred Stock.
Section 5. Conversion into Common Stock.
---------- ----------------------------
(A) A holder of shares of Class B Preferred Stock shall be entitled at any
time to cause any or all of such shares to be converted into one share of Common
Stock for each share of Class B Preferred Stock.
(B) Any holder of shares of Class B Preferred Stock desiring to convert such
shares into shares of Common Stock shall surrender the certificate or
certificates representing the shares of Class B Preferred Stock being converted,
duly assigned or endorsed for transfer to the Corporation (or accompanied by
duly executed stock powers relating thereto) in case of a request for
registration in a name other than that of such holder, at the offices of the
transfer agent for the Common Stock, accompanied by written notice of
conversion. Such notice of conversion shall specify (i) the number of shares of
Class B Preferred Stock to be converted and the name or names in which such
holder wishes the certificate or certificates for Common Stock and for any
shares of Class B Preferred Stock not to be so converted to be issued (or the
name or names in which such shares are to be registered in the event that they
are to be uncertificated) and (ii) the address or addresses to which such holder
wishes delivery to be made of such new certificates to be issued upon such
conversion.
(C) A conversion of shares of Class B Preferred Stock into shares of Common
Stock made at the option of the holder thereof shall be effective immediately
before the close of business on the day of the later of (i) the surrender to the
Corporation of the certificate or certificates for the shares of Series B
Preferred Stock to be converted, duly assigned or endorsed for transfer to the
Corporation (or accompanied by duly executed stock powers relating thereto) in
case of a request for registration in a name other than that of such holder and
(ii) the giving of the notice of conversion as provided herein (the "Conversion
Date"). On and after the Conversion Date, the person or persons entitled to
receive the Common Stock issuable upon such conversion shall be treated for all
purposes as the record holder or holders of such shares of Common Stock.
(D) Promptly after the Conversion Date for shares of Class B Preferred Stock
to be converted, the Corporation or the transfer agent for the Common Stock
shall issue and send by hand delivery (with receipt to be acknowledged) or by
first class mail, postage prepaid, to the holder of such shares or to such
holder's designee, at the address designated by such holder, a certificate or
certificates for the number of shares of Common Stock to which such holder shall
be entitled upon conversion. In the event that there shall have been
surrendered a certificate or certificates representing shares of Class B
Preferred Stock, only part of which are to be converted, the Corporation or the
transfer agent for the Common Stock shall issue and deliver to such holder or
such holder's designee a new certificate or certificates representing the number
of shares of Class B Preferred Stock which shall not have been converted.
(E) The Corporation shall at all times reserve and keep available out of its
authorized and unissued and/or treasury Common Stock solely for issuance upon
the conversion of shares of Class B Preferred Stock as herein provided, free
from any preemptive rights, the
21
<PAGE>
maximum number of shares of Common Stock as shall from time to time be issuable
upon the conversion of all the shares of Class B Preferred Stock then
outstanding.
(F) At the option of the Corporation, all shares of the Class B Preferred
Stock may be converted at any time into Common Stock as provided in this Section
5. Unless otherwise required by law, notice of conversion pursuant to this
paragraph will be sent to the holders of Class B Preferred Stock at the address
shown on the books of the Corporation or any transfer agent for the Class B
Preferred Stock by first class mail, postage prepaid, mailed not less than one
(1) day prior to the conversion date. Each such notice shall state: (i) the
date when such conversion shall be effective; and (ii) the place or places where
certificates for such shares are to be surrendered in exchange for certificates
for Common Stock. As of the commencement of business on the conversion date, a
holder shall be treated for all purposes as the holder of the number of shares
of Common Stock issuable upon conversion, without any of the powers, preferences
or rights of a holder of Class B Preferred Stock. Upon surrender of the
certificate for shares so converted, the Corporation shall issue a certificate
representing the shares of Common Stock into which such shares of Class B
Preferred Stock have been converted.
Section 6. Consolidation, Combination, Merger, etc.
--------- ----------------------------------------
(A) In the event that the Corporation shall consummate any consolidation,
combination, merger or substantially similar transaction, pursuant to which the
outstanding shares of Common Stock are by operation of law exchanged solely for
or changed, reclassified or converted solely into stock of any successor or
resulting corporation (including the Corporation) that constitutes "qualifying
employer securities" with respect to a holder of Class B Preferred Stock within
the meaning of Section 409(1) of the Code and Section 407(d)(5) of the Employee
Retirement Income Security Act of 1974, as amended, or any successor provisions
of law, and, if applicable, for a cash payment in lieu of fractional shares, if
any, the shares of Class B Preferred Stock of such holder shall in connection
therewith be exchanged for or converted into preferred stock of such successor
or resulting corporation, having in respect of such corporation insofar as
possible the same powers, preferences and relative, participating, optional or
other special rights, and the qualifications, limitations or restrictions
thereon, that the Class B Preferred Stock had immediately prior to such
transaction, except that after such transaction each share of the Class B
Preferred Stock shall be convertible, otherwise on the terms and conditions
provided by Section 5 hereof, into the number and kind of qualifying employee
securities so receivable by a holder of one share of Common Stock; provided,
--------
however, that if by virtue of the structure of such transaction, a holder of
- - -------
Common Stock is required to make an election with respect to the nature and kind
of consideration to be received in such transaction, such holder of shares of
Class B Preferred Stock shall be entitled to make an equivalent election as to
the nature and kind of consideration it shall receive, and if such election
cannot practicably be made by the holders of the Class B Preferred Stock, then
the shares of Class B Preferred Stock shall, by virtue of such transaction and
on the same terms as apply to the holders of Common Stock, be convertible into
or exchangeable for the aggregate amount of qualifying employer securities
(payable in like kind and proportion) receivable by a holder of one share of
Common Stock if such holder of Common Stock failed to exercise any rights of
election to receive any kind or amount of qualifying employer securities
receivable upon such transaction (provided that if the kind or amount of
--------
qualifying employer securities receivable upon such transaction is not the same
for each non-electing share, then the kind and amount of qualifying employer
securities receivable upon such transaction for each non-electing share shall be
the kind and amount so receivable per share by a plurality of the non-electing
shares). The Corporation shall not consummate any such merger, consolidation or
similar transaction unless the successor or resulting corporation shall
22
<PAGE>
have agreed to recognize and honor the rights of the holders of Class B
Preferred Stock set forth in this Section 6(A).
(B) In the event that the Corporation shall consummate any consolidation,
combination, merger or substantially similar transaction, pursuant to which the
outstanding shares of Common Stock are by operation of law exchanged for or
changed, reclassified or converted into other stock or securities or cash or any
other property, or any combination thereof, other than solely qualifying
employer securities (as referred to in Section 6(A)) and cash payments, if
applicable, in lieu of fractional shares, each outstanding share of Class B
Preferred Stock shall, without any action on the part of the Corporation or any
holder thereof, be deemed to have been converted immediately prior to the
consummation of such merger, consolidation, combination or similar transaction
into one share of Common Stock so that each share of Class B Preferred Stock
shall, by virtue of such transaction and on the same terms as apply to the
holders of Common Stock, be converted into or exchanged for the aggregate amount
of stock, securities, cash or other property (payable in like kind and
proportion) receivable by a holder of one share of Common Stock; provided,
--------
however, that if by virtue of the structure of such transaction, a holder of
- - -------
Common Stock is required to make an election with respect to the nature and kind
of consideration to be received in such transaction, such holder of shares of
Class B Preferred Stock shall be entitled to make an equivalent election as to
the nature and kind of consideration it shall receive, and if such election
cannot practicably be made by the holders of the Class B Preferred Stock, then
each share of Class B Preferred Stock shall, by virtue of such transaction and
on the same terms as apply to the holders of Common Stock, be converted into or
exchanged for the aggregate amount of stock, securities, cash or other property
(payable in like kind and proportion) receivable by a holder of one share of
Common Stock if such holder of Common Stock failed to exercise any rights of
election as to the kind or amount of stock, securities, cash or other property
receivable upon such transaction (provided that if the kind or amount of stock,
--------
securities, cash or other property receivable upon such transaction is not the
same for each non-electing share, then the kind and amount of stock, securities,
cash or other property receivable upon such transaction for such non-electing
share shall be the kind and amount so receivable per share by a plurality of the
non-electing shares).
Section 7. Ranking; Cancellation of Shares.
--------- -------------------------------
(A) The Class B Preferred Stock shall rank on a parity with the Common Stock
as to the payment of dividends and senior to the Common Stock as to the
distribution of assets on liquidation, dissolution and winding-up of the
Corporation, and, unless otherwise provided in the Certificate of Incorporation,
as the same may be amended, the Class B Preferred Stock shall rank junior to all
other classes or series of the Corporation's preferred stock as to payment of
dividends and on a parity with all other such classes or shares of preferred
stock as to the distribution of assets on liquidation, dissolution or winding-
up.
(B) Any shares of Class B Preferred Stock acquired by the Corporation by
reason of the conversion of such shares as provided hereby, or otherwise so
acquired, shall be cancelled as shares of Class B Preferred Stock and restored
to the status of authorized but unissued shares of preferred stock, without par
value, of the Corporation, undesignated as to classes or series, and may
thereafter be reissued as part of a new class or series of such preferred stock
as permitted by law.
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<PAGE>
PART III
MISCELLANEOUS
Section 1. Miscellaneous.
--------- -------------
(A) All notices referred to herein shall be in writing, and all notices
hereunder shall be deemed to have been given upon the earlier of receipt thereof
or three (3) Business Days after the mailing thereof if sent by registered mail
(unless first class mail shall be specifically permitted for such notice under
the terms of this Exhibit A) with postage prepaid, addressed: (i) if to the
Corporation, to its office at 1251 Avenue of the Americas, New York, NY 10020
(Attention: Treasurer) or to the transfer agent (if any) for the Class A
Preferred Stock or Class B Preferred Stock, as the case may be or (ii) if to any
holder of the Class A Preferred Stock, the Class B Preferred Stock or the Common
Stock, as the case may be, to such holder at the address of such holder as
listed in the stock record books of the Corporation (which may include the
records of any transfer agent for the Class A Preferred Stock, the Class B
Preferred Stock or the Common Stock, as the case may be) or (iii) to such other
address as the Corporation shall have designated by notice similarly given.
(B) In the event that, at any time as a result of an adjustment made pursuant
to Section 8 or 9 of Part I, the holder of any share of the Class A Preferred
Stock upon thereafter surrendering such shares for conversion shall become
entitled to receive any shares or other securities of the Corporation other than
shares of Common Stock, the Conversion Ratio in respect of such other shares or
securities so receivable upon conversion of shares of Class A Preferred Stock
shall thereafter be adjusted, and shall be subject to further adjustment from
time to time, in a manner and on terms as nearly equivalent as practicable to
the provisions with respect to Common Stock contained in Sections 8 or 9 of Part
I, and the provisions of each of the other Sections hereof with respect to the
Common Stock shall apply on like or similar terms to any such other shares or
securities. Any determination in good faith by the Corporation as to any
adjustment of the Conversion Ratio pursuant to this Section 1(B) shall be
conclusive.
(C) The Corporation shall pay any and all issuance, stock transfer and
documentary stamp taxes that may be payable in respect of any issuance or
delivery of shares of Class A Preferred Stock, Class B Preferred Stock or Common
Stock or other securities issued upon conversion of Class A Preferred Stock or
Class B Preferred Stock, as the case may be, pursuant hereto or certificates
representing such shares or securities. The Corporation shall not, however, be
required to pay any such tax which may be payable in respect of any transfer
involved in the issuance or delivery of shares of Class B Preferred Stock or
Common Stock or other securities in a name other than that in which the shares
of Class A Preferred Stock or Class B Preferred Stock with respect to which such
shares or other securities are issued or delivered were registered, or in
respect of any payment to any person with respect to any such shares or
securities other than a payment to the registered holder thereof, and shall not
be required to make any such issuance, delivery or payment unless and until the
person otherwise entitled to such issuance, delivery or payment has paid to the
Corporation the amount of any such tax for issuance, transfer or documentary
stamp taxes or has established, to the satisfaction of the Corporation, that
such tax has been paid or is not payable.
24
<PAGE>
(D) In the event that a holder of shares of Class A Preferred Stock or Class
B Preferred Stock, as the case may be, shall not by written notice designate the
name in which (i) shares of Common Stock or Class B Preferred Stock in the case
of Class A Preferred Stock, (ii) shares of Common Stock in the case of Class B
Preferred Stock and (iii) any other securities in accordance with this Exhibit
A, to be issued upon conversion of such shares should be registered or to whom
payment upon redemption of shares of Class A Preferred Stock should be made or
the address to which the certificate or certificates representing such shares,
or such payment, should be sent, the Corporation shall be entitled to register
such shares, and make such payment, in the name of the holder of such Class A
Preferred Stock or Class B Preferred Stock, as the case may be, as shown on the
records of the Corporation and to send the certificate or certificates
representing such shares, or such payment, to the address of such holder shown
on the records of the Corporation.
(E) Unless otherwise provided in the Certificate of Incorporation, as the
same may be amended, all payments of (x) dividends upon the shares of any class
of stock and upon any other class of stock ranking on a parity with such first
class of stock with respect to such dividends shall be made pro rata, so that
amounts paid per share on such first class of stock and such other class of
stock shall in all cases bear to each other the same ratio that the required
dividends then payable per share on the shares of such first class of stock and
such other class of stock bear to each other and (y) distributions on voluntary
or involuntary dissolution, liquidation or winding-up or otherwise made upon the
shares of any class of stock and upon any other class of stock ranking on a
parity with such first class of stock with respect to such distributions shall
be made pro rata, so that amounts paid per share on such first class of stock
and such other class of stock shall in all cases bear to each other the same
ratio that the required distributions then payable per share on the shares of
such first class of stock and such other class of stock bear to each other.
(F) The Corporation may appoint, and from time to time discharge and change,
a transfer agent for the Class A Preferred Stock or Class B Preferred Stock, as
the case may be. Upon any such appointment or discharge of a transfer agent, the
Corporation shall send notice thereof by first class mail, postage prepaid, to
each holder of record of Class A Preferred Stock or Class B Preferred Stock, as
the case may be. So long as there is a transfer agent for a class of stock, a
holder thereof shall give any notices to the Corporation required hereunder to
the transfer agent at the address of the transfer agent last given by the
Corporation.
(G) All references to Section numbers in any Part in this Exhibit A shall
refer only to that Part unless otherwise indicated. All terms defined within a
Part of this Exhibit A shall have the same meanings when used in any other Part
hereof, unless otherwise indicated.
(H) If the Corporation and the holder so agree, any shares of Class A
Preferred Stock or Class B Preferred Stock or any shares of Common Stock into
which the shares of Class A Preferred Stock or Class B Preferred Stock shall be
converted, may be uncertificated shares, provided that the names of the holders
--------
of all uncertificated shares and the number of such shares held by each holder
shall be registered at the offices of the Corporation or the transfer agent for
such shares. In the event that any shares shall be uncertificated, all
references herein to the surrender or issuance of stock certificates shall have
no application to such uncertificated shares.
25
<PAGE>
CERTIFICATE OF AMENDMENT OF
RESTATED CERTIFICATE OF INCORPORATION OF
EXXON CORPORATION
Pursuant to N.J.S. 14A:7-15.1(3)
Effective Date: March 14, 1997
Exxon Corporation, a New Jersey corporation, to amend its Restated
Certificate of Incorporation to effect a share division, hereby certifies:
1. The name of the corporation is Exxon Corporation.
2. The date of adoption by the Board of Directors of the corporation of
the resolutions approving the share division was February 26, 1997.
3. This amendment to the Restated Certificate of Incorporation will not
adversely affect the rights or preferences of the holders of outstanding shares
of any class or series of the corporation and will not result in the percentage
of authorized shares that remains unissued after the share division exceeding
the percentage of authorized shares that was unissued before the share division.
4. The class of shares of the corporation subject to the division is the
common stock without par value. The number of shares of common stock of the
corporation subject to the division is 1,491,818,048. All the issued shares of
common stock without par value shall be divided into two shares of common stock
without par value.
5. To effect an amendment of the corporation's Restated Certificate of
Incorporation to increase the number of authorized shares of the corporation's
common stock without par value from two billion (2,000,000,000) to three billion
(3,000,000,000), the first sentence of Article Fourth of the corporation's
Restated Certificate of Incorporation is hereby to read, in its entirety, as
follows:
"The aggregate number of shares which the corporation shall have
authority to issue is three billion two hundred million (3,200,000,000)
shares, divided into two hundred million (200,000,000) shares of
preferred stock without par value and three billion (3,000,000,000)
shares of common stock without par value."
6. This amendment and the share division shall become effective at 5:00
p.m. New Jersey time on March 14, 1997.
IN WITNESS WHEREOF, Exxon Corporation has caused this certificate to be
executed on its behalf by its duly authorized officer as of the 26th day of
February, 1997.
EXXON CORPORATION
By: /s/ Lee R. Raymond
----------------------------
L.R. Raymond, Chairman
<PAGE>
EXHIBIT 10(iii)(c)
EXXON CORPORATION
RESTRICTED STOCK PLAN FOR NONEMPLOYEE DIRECTORS
(As last amended on January 29, 1997)
I. Purpose. The purpose of the Restricted Stock Plan of Nonemployee
Directors is to provide ownership of the Corporation's common stock to
nonemployee members of the Board of Directors in order to improve the
Corporation's ability to attract and retain highly qualified individuals to
serve as directors of the Corporation; to provide competitive remuneration for
Board service; to enhance the breadth of nonemployee director remuneration; and
to strengthen the commonality of interest between directors and shareholders.
II. Effective Date. The effective date of the Plan shall be January 1, 1989,
contingent upon shareholder approval. The Plan shall be submitted to the
shareholders of the Corporation for their approval at the annual meeting of
shareholders to be held in 1989.
III. Definitions. In this Plan, the following definitions apply:
(1) "Award" means a restricted stock award granted under this Plan.
(2) "Board" means Board of Directors of the Corporation.
(3) "Common Stock" means Corporation common stock without par value.
(4) "Corporation" means Exxon Corporation, a New Jersey corporation.
(5) "Disability" means a medically determinable physical or mental
impairment which renders a participant substantially unable to
function as a director of the Corporation.
(6) "Nonemployee Director" means any member of the Corporation's Board
of Directors who is not also an employee of the Corporation or of
any affiliate of the Corporation.
(7) "Participant" means each nonemployee director to whom a restricted
stock award is granted under the Plan.
(8) "Plan" means this Exxon Corporation Restricted Stock Plan for
Nonemployee Directors.
(9) "Restricted Period" means the period of time from the date of grant
of an award until the restrictions lapse.
(10) "Restricted Stock" means any share of common stock granted under the
Plan while subject to restrictions.
(11) "Share" means a share of common stock of the Corporation issued and
reacquired by the Corporation or previously authorized but unissued.
IV. Administration. The Board shall administer the Plan. The Chairman of the
Board shall have responsibility to conclusively interpret the provisions of the
Plan and decide all questions of fact arising in its application. Determinations
made with respect to any individual participant shall be made without
participation by that director.
<PAGE>
-2-
This Plan and all action taken under it shall be governed, as to construction
and administration, by the law of the State of New York.
During the restricted period shares of common stock granted under the Plan are
not subject in whole or in part, to attachment, execution, or levy of any kind.
V. Eligibility and Awards. Each nonemployee director on the effective date
of the Plan shall be granted an award of one thousand five hundred (1,500)
shares of restricted stock. Each person who becomes a nonemployee director for
the first time after the effective date of the Plan shall be granted an award of
one thousand five hundred (1,500) shares of restricted stock effective as of the
date such person becomes a nonemployee director.
Commencing with 1990, each incumbent nonemployee director shall be granted an
award as of the beginning of each year of two hundred (200) shares of restricted
stock.
Each award shall be evidenced by a written agreement executed by or on behalf of
the Corporation and the participant.
The Board may at any time discontinue granting awards under the Plan.
VI. Restricted Period. The Restricted Period shall commence on the date an
award is granted and shall expire upon the earlier to occur of the participant's
termination of service on the Board
after reaching the age, as determined by the Board, at which the
participant is no longer eligible to stand for election, or
by reason of disability or death.
Upon recommendation of the Chairman, the Board shall have the right in its sole
and absolute discretion to bring the restricted period to an earlier expiration
with respect to some or all of the restricted stock of any individual
participant.
VII. Terms and Conditions of Restricted Stock. A stock certificate
representing the number of shares of restricted stock granted shall be
registered in the participant's name but shall be held in custody by the
Corporation for the participant's account. Each restricted stock certificate
shall bear a legend giving notice of the restrictions. Each participant must
also endorse in blank and return to the Corporation a stock power for each
restricted stock certificate.
During the restricted period the participant shall not be entitled to delivery
of the certificate and cannot sell, transfer, assign, pledge, or otherwise
encumber or dispose of the restricted stock. Otherwise during the restricted
period the participant shall have all rights and privileges of a shareholder
with respect to the restricted stock including the rights to vote the shares and
to receive dividends paid (other than in stock). If the participant has remained
a member of the Board for the entire restricted period, restrictions shall lapse
at the end of the restricted period. If the participant ceases to be a member of
the Board prior to the expiration of the restricted period, all of the shares of
restricted stock shall be forfeited and all right, title, and interest of the
participant to such shares shall terminate without further obligation on the
part of the Corporation.
<PAGE>
-3-
At the expiration of the restricted period, a stock certificate free of all
restrictions for the number of shares of restricted stock registered in the name
of a participant shall be delivered to that participant or that participant's
estate.
VII. Regulatory Compliance and Listing. The issuance or delivery of any
shares of restricted stock may be postponed by the Corporation for such period
as may be required to comply with any applicable requirements under the Federal
securities laws, any applicable listing requirements of any national securities
exchange, or any requirements under any other law or regulation applicable to
the issuance or delivery of such shares. The Corporation shall not be obligated
to issue or deliver any such shares if the issuance or delivery thereof shall
constitute a violation of any provision of any law or of any regulation of any
governmental authority or any national securities exchange.
IX. Adjustments. Whenever a stock split, stock dividend, or other relevant
change in capitalization occurs:
the number of shares specified to be granted under this Plan upon first
entitlement and annually thereafter shall be appropriately adjusted, and
any new, additional, or different shares or securities issued with
respect to restricted stock previously awarded under the Plan will be
delivered to and held by the Corporation for the participant's account
and will be deemed included within the term restricted stock.
X. Amendment of the Plan. Upon recommendation of the Chairman, the Board
can from time to time amend this Plan or any provision thereof prospectively or
retroactively except that as established in Section V:
the eligibility for awards cannot be changed,
the number of shares that may be granted cannot be increased,
the timing of each award cannot be materially modified, and
the Plan provisions relating to the number of shares granted, the price
to be paid, if any, and the timing of awards may not in any event be
amended more than once every six months, other than to comport with
changes in the Internal Revenue Code, the Employee Retirement Income
Security Act, or the rules thereunder.
Office of the Secretary
Revised January 29, 1997
<PAGE>
EXHIBIT 10(iii)(f)
EXXON CORPORATION
1997 NONEMPLOYEE DIRECTOR RESTRICTED STOCK PLAN
I. Purpose. The purpose of the 1997 Nonemployee Director Restricted Stock
Plan is to provide ownership of the Corporation's common stock to nonemployee
members of the Board in order to improve the Corporation's ability to attract
and retain highly qualified individuals to serve as directors of the
Corporation; to provide competitive remuneration for Board service; to enhance
the breadth of nonemployee director remuneration; and to strengthen the
commonality of interest between directors and shareholders.
II. Effective Date. The effective date of the Plan shall be the date the
Plan is approved and adopted by the Board.
III. Definitions. In this Plan, the following definitions apply:
(1) "Award" means a restricted stock award granted under this Plan.
(2) "Board" means the Board of Directors of the Corporation.
(3) "Common stock" means Corporation common stock without par value.
(4) "Corporation" means Exxon Corporation, a New Jersey corporation.
(5) "Disability" means a medically determinable physical or mental
impairment which renders a participant substantially unable to
function as a director of the Corporation.
(6) "Nonemployee director" means any member of the Corporation's Board
who is not also an employee of the Corporation or of any affiliate
of the Corporation.
(7) "Participant" means each nonemployee director to whom a restricted
stock award is granted under the Plan.
(8) "Plan" means this Exxon Corporation 1997 Nonemployee Director
Restricted Stock Plan.
(9) "Restricted period" means the period of time from the date of grant
of an award until the restrictions lapse.
(10) "Restricted stock" means any share of common stock granted under the
Plan while subject to restrictions.
(11) "Share" means a share of common stock of the Corporation issued and
reacquired by the Corporation or previously authorized but unissued.
<PAGE>
IV. Administration. The Board shall administer the Plan. The Chairman of the
Board shall have responsibility to conclusively interpret the provisions of the
Plan and decide all questions of fact arising in its application. Determinations
made with respect to any individual participant shall be made without
participation by that director.
This Plan and all action taken under it shall be governed, as to construction
and administration, by the law of the State of New York.
During the restricted period shares of common stock granted under the Plan are
not subject in whole or in part to attachment, execution, or levy of any kind.
V. Eligibility and Awards. Each nonemployee director on the effective date
of the Plan shall be granted an award of three hundred (300) shares of
restricted stock representing the annual grant for 1997, together with an
additional award of five hundred (500) shares of restricted stock.
Each person who becomes a nonemployee director for the first time after the
effective date of the Plan shall be granted an award of two thousand (2,000)
shares of restricted stock, effective as of the date such person becomes a
nonemployee director.
Commencing with 1998, each incumbent nonemployee director shall be granted an
award as of the beginning of each year of three hundred (300) shares of
restricted stock.
Each award shall be evidenced by a written instrument or agreement executed by
or on behalf of the Corporation and the participant.
VI. Restricted Period. The restricted period shall commence on the date an
award is granted and shall expire upon the earlier to occur of the participant's
termination of service on the Board
after reaching the age, as determined by the Board, at which the
participant is no longer eligible to stand for election, or
by reason of disability or death.
Upon recommendation of the Chairman, the Board shall have the right in its sole
and absolute discretion to bring the restricted period to an earlier expiration
with respect to some or all of the restricted stock of any individual
participant.
VII. Terms and Conditions of Restricted Stock. A stock certificate
representing the number of shares of restricted stock granted shall be
registered in the participant's name but shall be held in custody by the
Corporation or its agent for the participant's account. Each restricted stock
certificate shall bear a legend giving notice of the restrictions.
Alternatively, in the sole discretion of the Corporation, shares of restricted
stock may be held in book-entry form by the Corporation or its agent for the
participant's account, with appropriate notation of the restrictions made in the
2
<PAGE>
custodian's records. Each participant must also endorse in blank and return to
the Corporation a stock power for the shares of restricted stock.
During the restricted period the participant shall not be entitled to delivery
of certificates for the restricted stock and cannot sell, transfer, assign,
pledge, or otherwise encumber or dispose of the restricted stock. Otherwise
during the restricted period the participant shall have all rights and
privileges of a shareholder with respect to the restricted stock, including the
rights to vote the shares and to receive dividends paid (other than in stock).
If the participant has remained a member of the Board for the entire restricted
period, restrictions shall lapse at the end of the restricted period. If the
participant ceases to be a member of the Board prior to the expiration of the
restricted period, all of the shares of restricted stock shall be forfeited and
all right, title, and interest of the participant to such shares shall terminate
without further obligation on the part of the Corporation.
At the expiration of the restricted period, one or more stock certificates free
of all restrictions for the number of shares of restricted stock registered in
the name of a participant shall be delivered to that participant or that
participant's estate.
VIII. Regulatory Compliance and Listing. The issuance or delivery of any
shares of restricted stock may be postponed by the Corporation for such period
as may be required to comply with any applicable requirements under the federal
securities laws, any applicable listing requirements of any national securities
exchange, or any requirements under any other law or regulation applicable to
the issuance or delivery of such shares. The Corporation shall not be obligated
to issue or deliver any such shares if the issuance or delivery thereof shall
constitute a violation of any provision of any law or of any regulation of any
governmental authority or any national securities exchange.
IX. Adjustments. Whenever a stock split, stock dividend, or other relevant
change in capitalization occurs:
the number of shares specified to be granted under this Plan upon first
entitlement and annually thereafter shall be appropriately adjusted, and
any new, additional, or different shares or securities issued with
respect to restricted stock previously awarded under the Plan will be
delivered to and held by the Corporation or its agent for the
participant's account and will be deemed included within the term
restricted stock.
X. Amendment of the Plan. Upon recommendation of the Chairman, the Board can
from time to time amend this Plan or any provision thereof prospectively or
retroactively, or can cease making further awards hereunder.
3
<PAGE>
EXHIBIT 12
EXXON CORPORATION
COMPUTATION OF RATIO OF EARNINGS TO FIXED CHARGES
(MILLIONS OF DOLLARS)
<TABLE>
<CAPTION>
YEAR ENDED DECEMBER 31,
----------------------------------------
1996 1995 1994 1993 1992
------- ------- ------ ------ ------
<S> <C> <C> <C> <C> <C>
Income before cumulative effect of
accounting changes.................. $ 7,510 $ 6,470 $5,100 $5,280 $4,810
Excess/(shortfall) of dividends over
earnings of affiliates owned less
than 50% accounted for by the equity
method.............................. 33 25 (20) (24) (28)
Provision for income taxes(1)........ 4,893 4,428 3,025 3,113 2,811
Capitalized interest................. (389) (418) (306) (291) (287)
Minority interests in earnings of
consolidated subsidiaries........... 382 299 231 246 229
------- ------- ------ ------ ------
12,429 10,804 8,030 8,324 7,535
------- ------- ------ ------ ------
Fixed Charges:(1)
Interest expense--borrowings........ 359 478 530 533 580
Capitalized interest................ 520 533 405 374 364
Rental expense representative of
interest factor.................... 447 416 401 387 382
Dividends on preferred stock........ 3 3 3 7 29
------- ------- ------ ------ ------
1,329 1,430 1,339 1,301 1,355
------- ------- ------ ------ ------
Total adjusted earnings available for
payment of fixed charges............ $13,758 $12,234 $9,369 $9,625 $8,890
======= ======= ====== ====== ======
Number of times fixed charges are
earned.............................. 10.4 8.6 7.0 7.4 6.6
</TABLE>
- - ---------------------
Note:
(1) The provision for income taxes and the fixed charges include Exxon
Corporation's share of non-consolidated companies 50% owned.
1
<PAGE>
EXHIBIT 13
- - --------------------------------------------------------------------------------
FINANCIAL SECTION
- - --------------------------------------------------------------------------------
Financial Review
Financial Summary........................................................ F3
Management's Discussion and Analysis of Financial Condition and
Results of Operations.................................................... F4-F7
Consolidated Financial Statements
Balance Sheet............................................................ F8
Statement of Income...................................................... F9
Statement of Shareholders' Equity........................................ F9
Statement of Cash Flows................................................. F10
Report of Independent Accountants.......................................... F11
Notes to Consolidated Financial Statements............................. F11-F20
1.Summary of Accounting Policies....................................... F11
2.Miscellaneous Financial Information.................................. F12
3.Cash Flow Information................................................ F12
4.Additional Working Capital Data...................................... F12
5.Equity Company Information........................................... F13
6.Investments and Advances............................................. F13
7.Investment in Property, Plant and Equipment.......................... F13
8.Incentive Program.................................................... F14
9.Leased Facilities.................................................... F14
10.Interest Rate Swap, Currency Exchange and Commodity Contracts........ F14
11.Fair Value of Financial Instruments.................................. F15
12.Long-Term Debt....................................................... F15
13.Litigation and Other Contingencies................................... F16
14.Annuity Benefits..................................................... F16
15.Other Postretirement Benefits........................................ F18
16.Capital.............................................................. F18
17.Leveraged Employee Stock Ownership Plan (LESOP)...................... F18
18.Income, Excise and Other Taxes....................................... F19
19.Distribution of Earnings and Assets.................................. F20
Quarterly Information...................................................... F21
Supplemental Information on Oil and Gas Exploration and Production
Activities........................................................... F22-F26
Operating Summary.......................................................... F27
F1
<PAGE>
- - --------------------------------------------------------------------------------
FINANCIAL SUMMARY
- - --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
1996 1995 1994 1993 1992
- - -----------------------------------------------------------------------------------------------------------------------------------
(millions of dollars, except per share amounts)
<S> <C> <C> <C> <C> <C>
Sales and other operating revenue
Petroleum and natural gas $ 118,012 $ 107,749 $ 100,409 $ 98,808 $ 104,282
Chemicals 11,430 11,737 9,544 8,641 9,131
Other and eliminations 2,101 2,318 2,175 2,083 2,259
---------------------------------------------------------------------
Total sales and other operating revenue $ 131,543 $ 121,804 $ 112,128 $ 109,532 $ 115,672
Earnings from equity interests and other revenue 2,706 2,116 1,776 1,679 1,434
---------------------------------------------------------------------
Revenue $ 134,249 $ 123,920 $ 113,904 $ 111,211 $ 117,106
=====================================================================
Earnings
Petroleum and natural gas
Exploration and production $ 5,058 $ 3,412 $ 2,782 $ 3,313 $ 3,374
Refining and marketing 885 1,272 1,389 2,015 1,574
---------------------------------------------------------------------
Total petroleum and natural gas $ 5,943 $ 4,684 $ 4,171 $ 5,328 $ 4,948
Chemicals 1,199 2,018 954 411 451
Other operations 433 479 409 138 254
Corporate and financing (65) (711) (434) (597) (843)
---------------------------------------------------------------------
Earnings before cumulative effect of accounting changes $ 7,510 $ 6,470 $ 5,100 $ 5,280 $ 4,810
Cumulative effect of accounting changes -- -- -- -- (40)
---------------------------------------------------------------------
Net income $ 7,510 $ 6,470 $ 5,100 $ 5,280 $ 4,770
=====================================================================
Net income per common share $ 6.02 $ 5.18 $ 4.07 $ 4.21 $ 3.79
- before cumulative effect of accounting changes $ 6.02 $ 5.18 $ 4.07 $ 4.21 $ 3.82
Cash dividends per common share $ 3.12 $ 3.00 $ 2.91 $ 2.88 $ 2.83
Net income to average shareholders' equity (percent) 17.9 16.6 14.1 15.4 13.9
Net income to total revenue (percent) 5.6 5.2 4.5 4.7 4.1
Working capital $ 405 $ (1,418) $ (3,033) $ (3,731) $ (3,239)
Ratio of current assets to current liabilities 1.02 0.92 0.84 0.80 0.84
Total additions to property, plant and equipment $ 7,132 $ 7,201 $ 6,568 $ 6,919 $ 7,138
Property, plant and equipment, less allowances $ 66,607 $ 65,446 $ 63,425 $ 61,962 $ 61,799
Total assets $ 95,527 $ 91,296 $ 87,862 $ 84,145 $ 85,030
Exploration expenses, including dry holes $ 763 $ 693 $ 666 $ 648 $ 808
Research and development costs $ 520 $ 525 $ 558 $ 593 $ 624
Long-term debt $ 7,236 $ 7,778 $ 8,831 $ 8,506 $ 8,637
Total debt $ 9,746 $ 10,025 $ 12,689 $ 12,615 $ 13,424
Fixed charge coverage ratio 10.4 8.6 7.0 7.4 6.6
Debt to capital (percent) 17.7 19.0 24.3 25.3 26.8
Shareholders' equity at year-end $ 43,542 $ 40,436 $ 37,415 $ 34,792 $ 33,776
Shareholders' equity per common share $ 35.06 $ 32.56 $ 30.13 $ 28.02 $ 27.20
Average number of common shares outstanding (millions) 1,242 1,242 1,242 1,242 1,242
Number of registered shareholders at year-end (thousands) 610 603 608 622 629
Wages, salaries and employee benefits $ 5,710 $ 5,799 $ 5,881 $ 5,916 $ 5,985
Number of employees at year-end (thousands) 79 82 86 91 95
</TABLE>
F3
<PAGE>
- - --------------------------------------------------------------------------------
MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF
OPERATIONS
- - --------------------------------------------------------------------------------
REVIEW OF 1996 RESULTS
Record net income of $7,510 million in 1996 compared with the previous record of
$6,470 million in 1995. Earnings growth resulted from increased natural gas,
petroleum product and chemical sales, stronger crude oil and natural gas prices,
and continued progress in reducing unit operating expenses. These factors more
than offset weaker industry margins in the chemicals, downstream and minerals
businesses. Results for 1996 included $535 million in non-recurring credits
($410 million in the fourth quarter) as a result of the resolution of
outstanding tax issues with a number of governments, while 1995 included $90
million of non-recurring credits (all in the fourth quarter). This is the sixth
consecutive year in which non-recurring items benefited earnings and cash flow.
Revenue for 1996 totaled $134 billion, up 8 percent from 1995, and the cost
of crude oil and product purchases increased 12 percent. The combined total of
operating costs (including Exxon's share of equity company costs) increased only
1% in 1996 despite higher volumes. Unit operating expenses were reduced in all
operating segments after excluding the effects of higher fuel prices and the
generally stronger U.S. dollar. Interest expense in 1996 declined from the prior
year as impacts of lower debt levels and interest rates more than offset foreign
exchange effects.
Exploration and Production
Worldwide crude oil prices were on average about $3.75 per barrel above the
prior year, and natural gas prices were stronger, particularly in North America.
Liquids production was 1,615 kbd (thousand barrels per day) compared with 1,726
kbd in 1995. Increased production from new developments in the North Sea was
offset by the near-term effect of a revised production sharing agreement in
Malaysia and lower volumes in North America and Australia. Natural gas
production of 6,577 mcfd (million cubic feet per day) was the highest level in
the last 15 years and up 9 percent from 1995, due to colder weather in Europe
and the U.S. and increased sales in Malaysia. Earnings from U.S. exploration and
production operations were $1,781 million, up from $1,061 million in 1995, as a
result of stronger crude oil and natural gas prices and reduced operating
expenses. Outside the U.S., earnings from exploration and production operations
were $3,277 million versus $2,351 million in 1995. Non-U.S. results benefited
from higher gas sales as well as increased crude oil and natural gas prices.
Refining and Marketing
Petroleum product sales of 5,211 kbd were the highest in 17 years and up 3
percent from 1995, on the strength of increased clean product volumes in most
major geographic areas. Refinery throughput was 3,792 kbd, up 4 percent from
1995, and the highest level since 1982. U.S. refining and marketing earnings
were $169 million, compared with $229 million in 1995. Industry refining margins
in the U.S. improved relative to 1995's low level, but were offset by increases
in scheduled refinery maintenance activity and higher costs for fuel consumed.
Refining and marketing operations outside the U.S. earned $716 million, down
from $1,043 million in 1995, and were affected by weak industry conditions in
the U.K. and Japan.
Chemicals
Earnings from chemical operations totaled $1,199 million, down from 1995's
record of $2,018 million. Exxon achieved record prime product sales of 15,712
thousand metric tons in 1996, up 9 percent from the prior year, but industry
product prices were lower and feedstock costs higher than year ago levels.
Other Operations
Earnings from other operating segments were $433 million, down from $479 million
in 1995. Copper and coal production from continuing operations were at record
levels. International coal prices were higher, but copper prices were down
significantly from the prior year.
Corporate and Financing
Corporate and financing expenses of $65 million declined from $711 million in
1995 due to $305 million in non-recurring credits and lower tax-related charges
and interest costs.
REVIEW OF 1995 RESULTS
Net income of $6,470 million in 1995 compared with $5,100 million
in 1994. Production and sales volumes increased in all business segments and
progress continued in reducing operating costs. Upstream earnings benefited from
stronger worldwide crude prices, but downstream margins were depressed
throughout the year. Chemicals earnings were more than double those achieved in
1994, and earnings from the coal, minerals and power businesses were up
significantly. Results in 1995 included $90 million of credits for settlement of
outstanding natural gas contract claims (all in the fourth quarter), while 1994
included $489 million of credits from asset sales and tax-related items ($423
million for the fourth quarter).
Revenue for 1995 totaled $124 billion, up 9 percent from 1994, and the cost
of crude oil and product purchases increased 7 percent.
F4
<PAGE>
The combined total of operating costs (including operating, selling, general,
administrative, exploration, depreciation and depletion expenses from the
consolidated statement of income and Exxon's share of similar costs for equity
companies) increased 3 percent in 1995. Excluding the impacts of the weaker U.S.
dollar and volume growth, operating expenses were reduced by about $600 million
from 1994 reflecting ongoing cost reduction efforts. Unit operating costs in
1995 were lower than 1994 in all major operating segments. Interest expense in
1995 was $240 million lower than in 1994 as lower debt levels and foreign
exchange effects offset the impact of higher interest rates.
Exploration and Production
Worldwide crude prices during 1995 were on average about $1.25 per barrel above
the prior year. Liquids production of 1,726 kbd was the highest level achieved
since 1989, and was up from 1,709 kbd in 1994, principally as a result of
increased production from new developments in the U.S. and North Sea. Natural
gas production of 6,013 mcfd increased from 5,978 mcfd in 1994 and was the
highest level since 1981. Increased production in the Asia-Pacific region and
the U.S. was partially offset by lower demand in Europe, as a result of
unseasonably warm temperatures during the first half of 1995. Excluding special
items, earnings from U.S. exploration and production operations were $971
million, up from $852 million in 1994. Outside the U.S., earnings from
exploration and production operations were $2,351 million versus $1,864 million
in 1994, after excluding special items.
Refining and Marketing
Refining and marketing earnings were lower in 1995 than in 1994 due to much
weaker industry refining margins. However, petroleum product sales of 5,076 kbd
were the highest since 1979 and up from 5,028 kbd in 1994, with most of the
growth in the Asia-Pacific region. U.S. refining and marketing earnings were
$229 million compared with $243 million in the prior year. The impact of weaker
product margins was offset by increased motor gasoline sales and lower refinery
maintenance expense in 1995. Earnings from refining and marketing operations
outside the U.S. were $1,043 million, down from $1,146 million in 1994, due
principally to extremely weak refining margins in Europe.
Chemicals
Earnings from chemical operations totaled $2,018 million, more than double 1994
earnings. Higher product margins and sales volumes produced the earnings
improvement. In 1995 prime product sales of 14,377 thousand metric tons were up
408 thousand metric tons versus the prior year.
Other Operations
Earnings from other operating segments were $479 million, up from $302 million
in 1994 after excluding gains on asset sales. Prices for both copper and coal
were higher, and copper and coal production from ongoing operations were also up
from 1994.
Corporate and Financing
Corporate and financing expenses in 1995 of $711 million were down $39 million
from the prior year, after excluding non-recurring credits in 1994. Lower debt
levels offset the impact of higher interest rates.
IMPACT OF INFLATION, CHANGING PRICES AND OTHER
AND OTHER UNCERTAINTIES
The general rate of inflation in most major countries of operation has been
relatively low in recent years, and the associated impact on operating costs has
been countered by cost reductions from efficiency and productivity improvements.
In the past, crude oil and product prices have fluctuated widely in response
to changing market forces. The impacts of these price fluctuations on earnings
from exploration and production operations, refining and marketing operations
and chemical operations have been varied, tending at times to be offsetting.
Aggregate foreign exchange transaction gains/losses included in net income
are discussed in note 2 to the consolidated financial statements. The
corporation makes limited use of currency exchange contracts to reduce the risk
of adverse foreign currency movements related to certain foreign currency debt
obligations.
The operations and earnings of the corporation and its affiliates throughout
the world have been, and may in the future be, affected from time to time in
varying degree by political developments and laws and regulations, such as
forced divestiture of assets; restrictions on production, imports and exports;
price controls; tax increases and retroactive tax claims; expropriation of
property; cancellation of contract rights and environmental regulations. Both
the likelihood of such occurrences and their overall effect upon the corporation
vary greatly from country to country and are not predictable.
SITE RESTORATION AND OTHER ENVIRONMENTAL COSTS
Over the years the corporation has accrued provisions for estimated site
restoration costs to be incurred at the end of the operating life of certain of
its facilities and properties. In addition, the corporation accrues provisions
for environmental liabilities in the many countries in which it does business
when it is probable that obligations have been incurred and the amounts can be
reasonably estimated. This policy applies to assets or businesses currently
owned or previously disposed. The corporation has accrued provisions for
probable environmental remediation obligations at various sites, including
multi-party sites where Exxon has been identified as one of the potentially
responsible parties by the U.S. Environmental Protection Agency. The involvement
of other financially responsible companies at these multi-party sites mitigates
Exxon's actual joint and several liability exposure. At present, no individual
site is expected to have losses material to Exxon's operations, financial
condition or liquidity.
F5
<PAGE>
- - --------------------------------------------------------------------------------
MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF
OPERATIONS
- - --------------------------------------------------------------------------------
Charges made against income for site restoration and environmental
liabilities were $146 million in 1996, $215 million in 1995 and $160 million in
1994. At the end of 1996, accumulated site restoration and environmental
provisions, after reduction for amounts paid, amounted to $2.6 billion. Exxon
believes that any cost in excess of the amounts already provided for in the
financial statements would not have a materially adverse effect upon the
corporation's operations, financial condition or liquidity.
In 1996, the corporation spent $1,561 million (of which $457 million were
capital expenditures) on environmental conservation projects and expenses
worldwide, mostly dealing with air and water conservation. Total expenditures
for such activities are expected to be about $1.6 billion in each year 1997 and
1998 (with capital expenditures representing about 30 percent of the total).
TAXES
Income, excise and all other taxes and duties totaled $43.8 billion in 1996, an
increase of $2.6 billion, or 6 percent. Income tax expense, both current and
deferred, was $4.4 billion compared to $4.0 billion in 1995, reflecting higher
pre-tax income in 1996 and a lower effective tax rate - 39.9 percent in 1996
versus 41.4 percent in 1995. Excise and all other taxes and duties were $2.1
billion higher reflecting increased sales.
Income, excise and all other taxes and duties totaled $41.2 billion in 1995,
an increase of $4.9 billion, or 13 percent. Income tax expense, both current and
deferred, was $4.0 billion compared to $2.7 billion in 1994, reflecting higher
pre-tax income in 1995 and a higher effective tax rate - 41.4 percent in 1995
versus 38.5 percent in 1994. Excise taxes and all other taxes and duties were
$3.6 billion higher reflecting increased sales.
LIQUIDITY AND CAPITAL RESOURCES
In 1996, cash provided by operating activities totaled $13.2 billion, down $0.6
billion from 1995. Major sources of funds were net income of $7.5 billion and
non-cash provisions of $5.3 billion for depreciation and depletion.
Cash used in investing activities totaled $6.5 billion, up $0.1 billion from
1995 primarily as a result of higher additions to property, plant and equipment.
Cash used in financing activities was $5.2 billion. Dividend payments on
common shares were increased from $3.00 per share to $3.12 per share and totaled
$3.9 billion, a payout of 52 percent. Total consolidated debt decreased by $0.3
billion to $9.7 billion.
Shareholders' equity increased by $3.1 billion to $43.5 billion. The ratio of
debt to capital decreased to 18 percent in 1996 compared to 19 percent in 1995.
In 1995, cash provided by operating activities totaled $13.8 billion, up $4.0
billion from 1994. Major sources of funds were net income of $6.5 billion and
non-cash provisions of $5.4 billion for depreciation and depletion.
Cash used in investing activities totaled $6.4 billion in 1995, up from $5.4
billion in 1994, primarily as a result of higher additions to property, plant
and equipment and lower asset sales.
Cash used in financing activities was $7.1 billion in 1995. Dividend payments
on common shares were increased from $2.91 per share to $3.00 per share and
totaled $3.7 billion, a payout of 58 percent. Total consolidated debt decreased
$2.7 billion to $10.0 billion.
Shareholders' equity increased by $3.0 billion to $40.4 billion. The ratio of
debt to capital decreased to 19 percent in 1995 compared to 24 percent in 1994.
In 1996 and 1995, the corporation strengthened its financial position and
flexibility to meet future financial needs. Although the corporation issues
long-term debt from time to time and maintains a revolving commercial paper
program, internally generated funds cover the majority of its financial
requirements.
As discussed in note 10 to the consolidated financial statements, the
corporation's financial derivative activities are limited to simple risk
management strategies. The corporation does not trade in financial derivatives
nor does it use financial derivatives with leveraged features. The corporation
maintains a system of controls that includes a policy covering the
authorization, reporting and monitoring of derivative activity. The
corporation's derivative activities pose no material credit or market risks to
Exxon's operations, financial condition or liquidity.
As discussed in note 13 to the consolidated financial statements, a number of
lawsuits, including class actions, were brought in various courts against Exxon
Corporation and certain of its subsidiaries relating to the accidental release
of crude oil from the tanker Exxon Valdez in 1989. Essentially all of these
lawsuits have now been resolved or are subject to appeal.
On September 24, 1996, the United States District Court for the District of
Alaska entered a judgment in the amount of $5.058 billion in the Exxon Valdez
civil trial that began in May 1994. The District Court awarded approximately
$19.6 million in compensatory damages to fisher plaintiffs, $38 million in
prejudgment interest on the compensatory damages and $5 billion in punitive
damages to a class composed of all persons and entities who asserted claims for
punitive damages from the corporation as a result of the Exxon Valdez grounding.
The District Court also ordered that these awards shall bear interest from and
after entry of the judgment. The District Court stayed execution on the judgment
pending appeal based on a $6.75 billion letter of credit posted by the
corporation. Exxon has appealed the judgment. The corporation continues to
believe that the punitive damages in this case are unwarranted and that the
judgment should be set aside or substantially reduced by the appellate courts.
Since it is impossible to estimate what the ultimate earnings impact will be, no
charge was taken in 1995 or 1996 related to these verdicts.
On January 29, 1997, a settlement agreement was concluded resolving all
remaining matters between Exxon and various insurers arising from the Valdez
accident. Under terms of this settlement, Exxon received $480 million. Income
statement recognition of this settlement will be deferred in view of uncertainty
regarding the ultimate cost to the corporation of the Valdez accident.
F6
<PAGE>
The U.S. Tax Court has decided the issue with respect to the pricing of crude
oil purchased from Saudi Arabia for the years 1979-1981 in favor of the
corporation. This decision is subject to appeal. Ultimate resolution of this
issue and several other tax and legal issues, notably a settlement of gas
lifting imbalances in the common border area between the Netherlands and
Germany, is not expected to have a materially adverse effect upon the
corporation's operations, financial condition or liquidity.
There are no events or uncertainties known to management beyond those already
included in reported financial information that would indicate a material change
in future operating results or future financial condition.
CAPITAL AND EXPLORATION EXPENDITURES
Capital and exploration expenditures in 1996 were $9.2 billion compared to $9.0
billion in 1995.
Exploration and production expenditures totaled $4.9 billion in 1996, up 4
percent from $4.7 billion in 1995, reflecting higher spending for exploration
and development drilling and for several projects in the Gulf of Mexico. Capital
investments in refining and marketing totaled $2.0 billion in 1996, essentially
the same as in 1995.
Chemicals capital expenditures were $1.6 billion in 1996, up 49% from $1.1
billion in 1995, on investments to increase plant capacity in the U.S. and
acquisitions in Europe.
Investments in the power segment were $0.4 billion in 1996, down $0.3 billion
from 1995 when the Hong Kong Black Point Power Station construction activities
peaked.
Capital and exploration expenditures in the U.S. totaled $2.4 billion in
1996, an increase of 15 percent from 1995. Spending outside the U.S. of $6.8
billion in 1996 was essentially unchanged from 1995. Total capital and
exploration expenditures in 1997 should be at similar levels to 1996, as
attractive investment opportunities continue to be developed in each of the
major business segments.
Firm commitments related to capital projects underway at year-end 1996
totaled approximately $2.4 billion, with the largest single commitment being
$0.5 billion associated with the Black Point Power project. Similar commitments
were $3.2 billion at the end of 1995. The corporation expects to fund the
majority of these commitments through internally generated funds.
++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++
++++++ +++++++ ++++++ +++++++ ++++++ +++++++
+ + + + + +
+ + + + + +
+ GRAPH #1 + + GRAPH #2 + + GRAPH #3 +
+ + + + + +
+ + + + + +
++++++++++++++++++ ++++++++++++++++++ ++++++++++++++++++
GRAPH #1 - FUNCTIONAL EARNINGS. Five-year history of earnings by function
(Exploration & Production, Refining & Marketing, Chemicals and Other)
and net income.
GRAPH #2 - SOURCES AND USES OF CASH. Five-year history of cash sources (Cash
from Operations and Asset Sales) compared to cash uses (Plant
Additions and Dividends/Changes in Debt/Other).
GRAPH #3 - CAPITAL AND EXPLORATION EXPENDITURES. Five-year history of capital
and exploration expenditures by function (Exploration & Production,
Refining & Marketing, Chemicals and Other).
F7
<PAGE>
- - --------------------------------------------------------------------------------
CONSOLIDATED BALANCE SHEET
- - --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Dec. 31 Dec. 31
1996 1995
- - ------------------------------------------------------------------------------------------------------------------------
(millions of dollars)
<S> <C> <C>
Assets
Current assets
Cash and cash equivalents $ 2,951 $ 1,508
Other marketable securities 18 281
Notes and accounts receivable, less estimated doubtful amounts 10,499 8,925
Inventories
Crude oil, products and merchandise 4,501 4,865
Materials and supplies 784 816
Prepaid taxes and expenses 1,157 923
-------------------
Total current assets $19,910 $17,318
Investments and advances 6,010 5,697
Property, plant and equipment, at cost, less accumulated depreciation and depletion 66,607 65,446
Other assets, including intangibles, net 3,000 2,835
-------------------
Total assets $95,527 $91,296
===================
Liabilities
Current liabilities
Notes and loans payable $ 2,510 $ 2,247
Accounts payable and accrued liabilities 14,510 14,113
Income taxes payable 2,485 2,376
-------------------
Total current liabilities $19,505 $18,736
Long-term debt 7,236 7,778
Annuity reserves and accrued liabilities 9,195 8,770
Deferred income tax liabilities 13,475 12,431
Deferred credits 660 975
Equity of minority and preferred shareholders in affiliated companies 1,914 2,170
-------------------
Total liabilities $51,985 $50,860
-------------------
Shareholders' Equity
Preferred stock without par value (authorized 200 million shares) $ 303 $ 454
Guaranteed LESOP obligation (345) (501)
Common stock without par value (authorized 2,000 million shares, 1,813 million issued) 2,822 2,822
Earnings reinvested 57,156 53,539
Cumulative foreign exchange translation adjustment 1,126 1,339
Common stock held in treasury (571 million shares in 1996 and 1995) (17,520) (17,217)
-------------------
Total shareholders' equity $43,542 $40,436
-------------------
Total liabilities and shareholders' equity $95,527 $91,296
===================
</TABLE>
The information on pages F11 through F20 is an integral part of these
statements.
F8
<PAGE>
- - --------------------------------------------------------------------------------
CONSOLIDATED STATEMENT OF INCOME
- - --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
1996 1995 1994
- - ------------------------------------------------------------------------------------------------------------------------------
(millions of dollars)
<S> <C> <C> <C>
Revenue
Sales and other operating revenue, including excise taxes $131,543 $121,804 $112,128
Earnings from equity interests and other revenue 2,706 2,116 1,776
-------------------------------------
Total revenue $134,249 $123,920 $113,904
-------------------------------------
Costs and other deductions
Crude oil and product purchases $ 56,406 $ 50,320 $ 46,867
Operating expenses 13,255 12,772 12,703
Selling, general and administrative expenses 7,961 7,802 7,745
Depreciation and depletion 5,329 5,386 5,015
Exploration expenses, including dry holes 763 693 666
Interest expense 464 485 725
Excise taxes 14,815 13,911 12,445
Other taxes and duties 22,956 21,808 19,701
Income applicable to minority and preferred interests 384 301 233
-------------------------------------
Total costs and other deductions $122,333 $113,478 $106,100
-------------------------------------
Income before income taxes $ 11,916 $ 10,442 $ 7,804
Income taxes 4,406 3,972 2,704
-------------------------------------
Net income $ 7,510 $ 6,470 $ 5,100
=====================================
Net income per common share (dollars) $ 6.02 $ 5.18 $ 4.07
</TABLE>
- - --------------------------------------------------------------------------------
CONSOLIDATED STATEMENT OF SHAREHOLDERS' EQUITY
- - --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
1996 1995 1994
------------------------------------------------------------------
Shares Dollars Shares Dollars Shares Dollars
- - ------------------------------------------------------------------------------------------------------------------------------
(millions)
<S> <C> <C> <C> <C> <C> <C>
Preferred stock outstanding at end of year 5 $ 303 7 $ 454 9 $ 554
Guaranteed LESOP obligation (345) (501) (613)
Common stock issued at end of year 1,813 2,822 1,813 2,822 1,813 2,822
Earnings reinvested
At beginning of year $ 53,539 $ 50,821 $ 49,365
Net income for year 7,510 6,470 5,100
Dividends - common and preferred shares (3,893) (3,752) (3,644)
-------------------------------------------------------------------
At end of year $ 57,156 $ 53,539 $ 50,821
-------------------------------------------------------------------
Cumulative foreign exchange translation adjustment
At beginning of year $ 1,339 $ 848 $ (370)
Change during the year (213) 491 1,218
-------------------------------------------------------------------
At end of year $ 1,126 $ 1,339 $ 848
-------------------------------------------------------------------
Common stock held in treasury
At beginning of year (571) $(17,217) (571) $(17,017) (571) $(16,977)
Acquisitions, at cost (9) (801) (9) (628) (4) (220)
Dispositions 9 498 9 428 4 180
-------------------------------------------------------------------
At end of year (571) $(17,520) (571) $(17,217) (571) $(17,017)
-------------------------------------------------------------------
Shareholders' equity at end of year $ 43,542 $ 40,436 $ 37,415
-------------------------------------------------------------------
Common shares outstanding at end of year 1,242 1,242 1,242
===================================================================
</TABLE>
The information on pages F11 through F20 is an integral part of these
statements.
F9
<PAGE>
- - -------------------------------------------------------------------------------
CONSOLIDATED STATEMENT OF CASH FLOWS
- - -------------------------------------------------------------------------------
<TABLE>
<CAPTION>
1996 1995 1994
- - -----------------------------------------------------------------------------------------------------------------------------------
(millions of dollars)
<S> <C> <C> <C>
Cash flows from operating activities
Net income
Accruing to Exxon shareholders $ 7,510 $ 6,470 $ 5,100
Accruing to minority and preferred interests 384 301 233
Adjustments for non-cash transactions
Depreciation and depletion 5,329 5,386 5,015
Deferred income tax charges 835 1,043 260
Annuity and accrued liability provisions 514 843 (662)
Dividends received greater than/(less than) equity in current earnings of equity companies 11 (22) (3)
Changes in operational working capital, excluding cash and debt
Reduction/(increase) - Notes and accounts receivable (1,702) (702) (923)
- Inventories 246 37 180
- Prepaid taxes and expenses (81) 109 (111)
Increase/(reduction) - Accounts and other payables 495 546 565
All other items - net (379) (164) 197
--------------------------------
Net cash provided by operating activities $13,162 $ 13,847 $ 9,851
--------------------------------
Cash flows from investing activities
Additions to property, plant and equipment $(7,209) $(7,128) $(6,643)
Sales of subsidiaries and property, plant and equipment 719 666 1,359
Additional investments and advances (810) (530) (309)
Sales of investments and collection of advances 522 285 158
Additions to other marketable securities (159) (380) (1,341)
Sales of other marketable securities 422 732 1,354
--------------------------------
Net cash used in investing activities $(6,515) $(6,355) $(5,422)
--------------------------------
Net cash generation before financing activities $ 6,647 $ 7,492 $ 4,429
--------------------------------
Cash flows from financing activities
Additions to long-term debt $ 659 $ 1,092 $ 1,221
Reductions in long-term debt (806) (1,492) (377)
Additions to short-term debt 261 423 330
Reductions in short-term debt (607) (901) (1,205)
Additions/(reductions) in debt with less than 90 day maturity 239 (1,827) 5
Cash dividends to Exxon shareholders (3,902) (3,765) (3,659)
Cash dividends to minority interests (291) (282) (420)
Changes in minority interests and sales/(redemptions) of affiliate preferred stock (338) (84) 25
Common stock acquired (801) (628) (220)
Common stock sold 347 328 66
--------------------------------
Net cash used in financing activities $(5,239) $(7,136) $(4,234)
--------------------------------
Effects of exchange rate changes on cash $ 35 $ (5) $ (21)
--------------------------------
Increase in cash and cash equivalents $ 1,443 $ 351 $ 174
Cash and cash equivalents at beginning of year 1,508 1,157 983
--------------------------------
Cash and cash equivalents at end of year $ 2,951 $ 1,508 $ 1,157
================================
</TABLE>
The information on pages F11 through F20 is an integral part of these
statements.
F10
<PAGE>
- - --------------------------------------------------------------------------------
REPORT OF INDEPENDENT ACCOUNTANTS
- - --------------------------------------------------------------------------------
Price Waterhouse LLP
Dallas, Texas
February 26, 1997
To the Shareholders of Exxon Corporation
In our opinion, the consolidated financial statements appearing on pages F8
through F20 present fairly, in all material respects, the financial position of
Exxon Corporation and its subsidiary companies at December 31, 1996 and 1995,
and the results of their operations and their cash flows for each of the three
years in the period ended December 31, 1996, in conformity with generally
accepted accounting principles. These financial statements are the
responsibility of the Corporation's management; our responsibility is to express
an opinion on these financial statements based on our audits. We conducted our
audits of these statements in accordance with generally accepted auditing
standards which require that we plan and perform the audit to obtain reasonable
assurance about whether the financial statements are free of material
misstatement. An audit includes examining, on a test basis, evidence supporting
the amounts and disclosures in the financial statements, assessing the
accounting principles used and significant estimates made by management, and
evaluating the overall financial statement presentation. We believe that our
audits provide a reasonable basis for the opinion expressed above.
/s/ Price Waterhouse LLP
- - --------------------------------------------------------------------------------
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
- - --------------------------------------------------------------------------------
The company's principal business is energy involving the worldwide
exploration, production, transportation and sale of crude oil and natural gas
and the manufacture, transportation and sale of petroleum products. The company
is also a major worldwide manufacturer and marketer of petrochemicals, and
participates in coal and minerals mining and electric power generation.
The preparation of financial statements in conformity with generally accepted
accounting principles requires management to make estimates that affect the
reported amounts of assets, liabilities, revenues and expenses, and the
disclosure of contingent assets and liabilities. Actual results could differ
from these estimates.
Certain costs and other deductions in the consolidated statement of income
for prior years have been reclassified to conform to the 1996 presentation.
The accompanying consolidated financial statements and the supporting and
supplemental material are the responsibility of the management of Exxon
Corporation.
1. Summary of Accounting Policies
Principles of Consolidation. The consolidated financial statements include
the accounts of those significant subsidiaries owned directly or indirectly more
than 50 percent.
Amounts representing the corporation's percentage interest in the underlying
net assets of less than majority-owned companies in which a significant equity
ownership interest is held are included in "Investments and advances." The
corporation's share of the net income of these companies is included in the
consolidated statement of income caption "Earnings from equity interests and
other revenue."
Investments in all other companies, none of which is significant, are
included in "Investments and advances" at cost or less. Dividends from these
companies are included in income as received.
Financial Instruments. Interest rate swap agreements are used to modify the
interest rates on certain debt obligations. The interest differentials to be
paid or received under such swaps are recognized over the life of the agreements
as adjustments to interest expense. Currency exchange contracts are used to
reduce the risk of adverse foreign currency movements related to certain foreign
currency debt obligations. The gains or losses arising from currency exchange
contracts offset foreign exchange gains or losses on the underlying assets or
liabilities and are recognized as offsetting adjustments to the carrying
amounts. Commodity swap and futures contracts are used to mitigate the risk of
unfavorable price movements on certain crude and petroleum product purchases and
sales. Gains or losses on these contracts are recognized as adjustments to
purchase costs or to sales revenue. Related amounts payable to or receivable
from counterparties are included in current assets and liabilities.
Investments in marketable debt securities are expected to be held to maturity
and are stated at amortized cost.
The fair value of financial instruments is determined by reference to various
market data and other valuation techniques as appropriate.
Inventories. Crude oil, products and merchandise inventories are carried at the
lower of current market value or cost (generally determined under the last-in,
first-out method-LIFO). Costs include applicable purchase costs and operating
expenses, but not general and administrative expenses or research and
development costs. Inventories of materials and supplies are valued at cost or
less.
F11
<PAGE>
- - --------------------------------------------------------------------------------
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
- - --------------------------------------------------------------------------------
Property, Plant and Equipment. Depreciation, depletion and amortization, based
on cost less estimated salvage value of the asset, are primarily determined
under either the unit-of-production method or the straight-line method.
Unit-of-production rates are based on oil, gas and other mineral reserves
estimated to be recoverable from existing facilities. The straight-line method
of depreciation is based on estimated asset service life taking obsolescence
into consideration.
Maintenance and repairs are expensed as incurred. Major renewals and
improvements are capitalized, and the assets replaced are retired.
The corporation's exploration and production activities are accounted for
under the "successful efforts" method. Under this method, costs of productive
wells and development dry holes, both tangible and intangible, as well as
productive acreage are capitalized and amortized on the unit-of-production
method. Costs of that portion of undeveloped acreage likely to be unproductive,
based largely on historical experience, are amortized over the period of
exploration. Other exploratory expenditures, including geophysical costs, other
dry hole costs and annual lease rentals, are expensed as incurred.
Statement of Financial Accounting Standards No. 121 "Accounting for the
Impairment of Long-Lived Assets and for Long-Lived Assets to Be Disposed Of" was
implemented in January 1996. This Statement had no impact on the corporation's
1996 results of operations or financial position.
Environmental Conservation and Site Restoration Costs. Liabilities for
environmental conservation are recorded when it is probable that obligations
have been incurred and the amounts can be reasonably estimated. These
liabilities are not reduced by possible recoveries from third parties, and
projected cash expenditures are not discounted.
Site restoration costs that may be incurred by the corporation at the end of
the operating life of certain of its facilities and properties are reserved
ratably over the asset's productive life.
Foreign Currency Translation. The "functional currency" for translating the
accounts of the majority of refining, marketing and chemical operations outside
the U.S. is the local currency. Local currency is also used for exploration and
production operations that are relatively self-contained and integrated within a
particular country, such as in Australia, Canada, the United Kingdom, Norway and
Continental Europe. The U.S. dollar is used for operations in highly
inflationary economies and for some exploration and production operations,
primarily in Malaysia and the Middle East.
2. Miscellaneous Financial Information
Research and development costs totaled $520 million in 1996, $525 million in
1995 and $558 million in 1994.
Net income included aggregate foreign exchange transaction losses of $37
million in 1996, gains of $26 million in 1995, and losses of $30 million in
1994.
In 1996, 1995 and 1994, net income included gains of $14 million, $12
million, and $8 million, respectively, attributable to the combined effects of
LIFO inventory accumulations and draw-downs. The aggregate replacement cost of
inventories was estimated to exceed their LIFO carrying values by $4,151 million
and $2,902 million at December 31, 1996 and 1995, respectively.
3. Cash Flow Information
The consolidated statement of cash flows provides information about changes in
cash and cash equivalents. All short-term marketable securities, with original
maturities of three months or less, that are readily convertible to known
amounts of cash and are so near maturity that they present insignificant risk of
changes in value because of changes in interest rates, are classified as cash
equivalents.
Cash payments for interest were: 1996 - $669 million; 1995 - $776 million;
and 1994 - $839 million. Cash payments for income taxes were: 1996 - $3,420
million; 1995 - $2,797 million; and 1994 - $2,548 million.
4. Additional Working Capital Data
<TABLE>
<CAPTION>
Dec. 31 Dec. 31
1996 1995
- - ------------------------------------------------------------------------
(millions of dollars)
<S> <C> <C>
Notes and accounts receivable
Trade, less reserves of $81 million
and $76 million $ 7,993 $ 6,979
Other, less reserves of $17 million
and $28 million 2,506 1,946
------------------
$10,499 $ 8,925
==================
Notes and loans payable
Bank loans $ 1,359 $ 1,194
Commercial paper 645 525
Long-term debt due within one year 463 495
Other 43 33
------------------
$ 2,510 $ 2,247
==================
Accounts payable and accrued liabilities
Trade payables $ 8,343 $ 8,470
Obligations to equity companies 926 813
Accrued taxes other than income taxes 2,880 2,662
Other 2,361 2,168
------------------
$14,510 $14,113
</TABLE>
On December 31, 1996, unused credit lines for short-term financing totaled
approximately $6.3 billion. Of this total, $4.5 billion support commercial paper
programs under terms negotiated when drawn. The weighted average interest rate
on short-term borrowings outstanding at December 31, 1996 and 1995 was 5.9
percent and 6.2 percent, respectively.
F12
<PAGE>
5. Equity Company Information
The summarized financial information below includes those less than majority-
owned companies for which Exxon's share of net income is included in
consolidated net income (see note 1). These companies are primarily engaged in
natural gas production and distribution in the Netherlands and Germany, refining
and marketing operations in Japan and several chemical operations.
<TABLE>
<CAPTION>
1996 1995 1994
----------------------------------------------------------
Exxon Exxon Exxon
Total share Total share Total share
- - -------------------------------------------------------------------------------------------------------------------------------
(millions of dollars)
<S> <C> <C> <C> <C> <C> <C>
Total revenues
Percent of revenues from companies included in the Exxon
consolidation was 16% in 1996, 16% in 1995 and 18% in 1994 $33,719 $10,901 $32,187 $10,506 $26,078 $8,535
-----------------------------------------------------------
Income before income taxes $ 3,852 $ 1,831 $ 4,227 $ 1,974 $ 3,099 $1,396
Less: Related income taxes (1,229) (576) (1,306) (596) (1,101) (487)
-----------------------------------------------------------
Net income $ 2,623 $ 1,255 $ 2,921 $ 1,378 $ 1,998 $ 909
===========================================================
Current assets $ 9,231 $ 3,097 $ 9,789 $ 3,261 $ 9,692 $3,254
Property, plant and equipment, less accumulated depreciation 15,586 5,987 14,272 5,671 13,230 5,380
Other long-term assets 3,695 1,400 3,633 1,312 3,219 1,127
-----------------------------------------------------------
Total assets $28,512 $10,484 $27,694 $10,244 $26,141 $9,761
-----------------------------------------------------------
Short-term debt $ 1,661 $ 541 $ 1,233 $ 371 $ 1,343 $ 390
Other current liabilities 8,736 3,111 8,128 2,864 7,368 2,651
Long-term debt 2,857 918 2,660 839 2,543 817
Other long-term liabilities 4,319 1,820 4,424 1,818 4,274 1,832
Advances from shareholders 1,006 469 1,000 577 881 448
-----------------------------------------------------------
Net assets $ 9,933 $ 3,625 $10,249 $ 3,775 $ 9,732 $3,623
===========================================================
</TABLE>
<TABLE>
<CAPTION>
6. Investments and Advances Dec. 31 Dec. 31
1996 1995
- - -------------------------------------------------------------------------------------------------------------------------------
(millions of dollars)
<S> <C> <C>
In less than majority-owned companies
Carried at equity in underlying assets
Investments $3,625 $3,775
Advances 751 577
-----------------
$4,376 $4,352
Carried at cost or less 154 139
-----------------
$4,530 $4,491
Long-term receivables and miscellaneous investments at cost or less 1,480 1,206
-----------------
Total $6,010 $5,697
=================
</TABLE>
<TABLE>
<CAPTION>
7. Investment in Property, Plant and Equipment Dec. 31, 1996 Dec. 31, 1995
-----------------------------------------------
Cost Net Cost Net
- - -------------------------------------------------------------------------------------------------------------------------------
(millions of dollars)
<S> <C> <C> <C> <C>
Petroleum and natural gas
Exploration and production $ 69,748 $32,685 $ 66,797 $32,170
Refining and marketing 31,524 17,858 32,106 18,152
-----------------------------------------------
Total petroleum and natural gas $101,272 $50,543 $ 98,903 $50,322
Chemicals 10,785 5,880 10,018 5,370
Other 14,309 10,184 13,416 9,754
-----------------------------------------------
Total $126,366 $66,607 $122,337 $65,446
===============================================
</TABLE>
Accumulated depreciation and depletion totaled $59,759 million at the end of
1996 and $56,891 million at the end of 1995. Interest capitalized in 1996, 1995
and 1994 was $520 million, $533 million and $405 million, respectively.
F13
<PAGE>
- - --------------------------------------------------------------------------------
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
- - --------------------------------------------------------------------------------
8. Incentive Program
The 1993 Incentive Program provides for grants of stock options, stock
appreciation rights (SARs), restricted stock and other forms of award. Awards
may be granted over the 10-year period ending April 28, 2003 to eligible
employees of the corporation and those affiliates at least 50 percent owned. The
number of shares of stock which may be awarded each year under the 1993
Incentive Program may not exceed seven tenths of one percent (0.7%) of the total
number of shares of common stock of the corporation outstanding (excluding
shares held by the corporation) on December 31 of the preceding year. If the
total number of shares effectively granted in any year is less than the maximum
number of shares allowable, the balance may be carried over thereafter.
Outstanding awards are subject to certain forfeiture provisions contained in the
program or award instrument.
As under earlier programs, options and SARs may be granted at prices not less
than 100 percent of market value on the date of grant and have a maximum life of
10 years. Most of the options and SARs thus far granted first become exercisable
after one year of continuous employment following the date of grant. Of the
options outstanding at December 31, 1996 and 1995, 2,497 thousand and 4,310
thousand, respectively, included SARs. Exercise of either a related option or a
related SAR cancels the other to the extent exercised. No SARs have been granted
since 1992.
Shares available for granting at the beginning of 1996 were 16,945 thousand
and 10,782 thousand at the end of 1996. At December 31, 1996 and 1995,
respectively, 208 thousand and 171 thousand shares of restricted common stock
were outstanding.
Statement of Financial Accounting Standards No. 123 "Accounting for
Stock-Based Compensation" was implemented in January 1996. As permitted by the
Standard, Exxon retained its prior method of accounting for stock compensation.
If the accounting provisions of Statement No. 123 had been adopted, the net
impact on 1996 and 1995 income would not have been material.
The effect on net income per common share from the assumed exercise of
stock options outstanding at year-end 1996, 1995 or 1994 would be insignificant.
Changes that occurred in options outstanding in 1996, 1995 and 1994 are
summarized below (shares in thousands):
<TABLE>
<CAPTION>
1996 1995 1994
- - ----------------------------------------------------------------------------------------------------------------------------------
Avg. Exercise Avg. Exercise Avg. Exercise
Shares Price Shares Price Shares Price
- - ----------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
Outstanding at beginning of year 37,755 $59.40 39,035 $54.08 35,063 $52.36
Granted 5,984 94.13 5,893 78.94 5,780 60.50
Exercised (6,647) 51.38 (6,992) 46.24 (1,613) 38.85
Expired/Canceled (143) 75.26 (181) 57.38 (195) 60.75
------ ------ ------
Outstanding at end of year 36,949 66.40 37,755 59.40 39,035 54.08
Exercisable at end of year 30,970 61.05 31,862 55.79 33,290 52.98
</TABLE>
The following table summarizes information about stock options outstanding at
December 31, 1996 (shares in thousands):
<TABLE>
<CAPTION>
Options Outstanding Options Exercisable
- - ---------------------------------------------------------------------- -------------------------
Exercise Price Avg. Remaining Avg. Exercise Avg. Exercise
Range Shares Contractual Life Price Shares Price
- - ---------------------------------------------------------------------- -------------------------
<S> <C> <C> <C> <C> <C>
$40.00-60.50 20,124 5.2 years $55.34 20,124 $55.34
63.56-94.13 16,825 8.6 79.64 10,846 71.65
------ ------
Total 36,949 6.8 66.40 30,970 61.05
</TABLE>
- - --------------------------------------------------------------------------------
9. Leased Facilities
At December 31, 1996, the corporation and its consolidated subsidiaries held
non-cancelable operating charters and leases covering drilling equipment,
tankers, service stations and other properties with minimum lease commitments as
follows:
<TABLE>
<CAPTION>
Minimum Related
commitment rental income
- - ---------------------------------------------------------------
(millions of dollars)
<S> <C> <C>
1997 $ 795 $ 42
1998 554 34
1999 389 27
2000 309 18
2001 241 16
2002 and beyond 1,129 100
</TABLE>
Net rental expenditures for 1996, 1995 and 1994 totaled $1,284 million,
$1,212 million and $1,173 million, respectively, after being reduced by related
rental income of $133 million, $157 million and $147 million, respectively.
Minimum rental expenditures totaled $1,330 million in 1996, $1,280 million in
1995 and $1,239 million in 1994.
10. Interest Rate Swap, Currency Exchange and Commodity Contracts
The corporation limits its use of financial derivative instruments to simple
risk management activities. The corporation does not hold or issue financial
derivative instruments for trading purposes nor does it use financial
derivatives with leveraged features. Derivative instruments are matched to
existing assets, liabilities or transactions with the objective of mitigating
the impact of adverse movements in interest rates, currency exchange rates or
commodity prices. These instru-
F14
<PAGE>
ments normally equal the amount of the underlying assets, liabilities or
transactions and are held to maturity. Instruments are either traded over
authorized exchanges or with counterparties of high credit standing. As a result
of the above factors, the corporation's exposure to market and credit risks from
financial derivative instruments is considered to be negligible.
Interest rate swap agreements are used to adjust the ratio of fixed and
floating rates in the corporation's debt portfolio. Interest rate swap
agreements, maturing 1997-1999, had an aggregate notional principal amount of
$500 million and $510 million at year-end 1996 and 1995, respectively. Currency
exchange contracts are used to reduce the risk of adverse foreign currency
movements related to certain foreign currency debt obligations. Currency
exchange contracts, maturing 1997-2005, totaled $1,585 million at year-end 1996
and $1,795 million at year-end 1995. These amounts included contracts in which
affiliates held positions which were effectively offsetting totaling $794
million in 1996 and $810 million in 1995. Excluding these, the remaining
currency exchange contracts totaled $791 million and $985 million at year-end
1996 and 1995, respectively.
The corporation makes limited use of commodity swap and futures contracts of
short duration to mitigate the risk of unfavorable price movements on certain
crude and petroleum product purchases and sales. The aggregate notional amount
for these contracts at year-end 1996 and 1995 was not material.
11. Fair Value of Financial Instruments
The fair value of financial instruments is determined by reference to various
market data and other valuation techniques as appropriate. Long-term debt is the
only category of financial instruments whose fair value differs materially from
the recorded book value. The estimated fair value of total long-term debt,
including capitalized lease obligations, at December 31, 1996 and 1995 was $7.8
billion and $8.8 billion, respectively, as compared to recorded book values of
$7.2 billion and $7.8 billion.
12. Long-Term Debt
At December 31, 1996, long-term debt consisted of $6,387 million due in U.S.
dollars and $849 million representing the U.S. dollar equivalent at year-end
exchange rates of amounts payable in foreign currencies. These amounts exclude
that portion of long-term debt, totaling $463 million, which matures within one
year and is included in current liabilities. The amounts of long-term debt
maturing, together with sinking fund payments required, in each of the four
years after December 31, 1997, in millions of dollars, are: 1998 - $781; 1999 -
$646; 2000 - $224; 2001 - $686. Certain of the borrowings described may from
time to time be assigned to other Exxon affiliates. At December 31, 1996, the
corporation had $858 million in unused long-term credit lines.
In 1996, debt totaling $434 million was removed from the balance sheet as a
result of the deposit of U.S. government securities in irrevocable trusts.
Together with amounts defeased prior to 1996, the total outstanding balance of
defeased debt at year-end 1996 was $929 million.
Summarized long-term borrowings at year-end 1996 and 1995 were as follows:
<TABLE>
<CAPTION>
Dec. 31 Dec. 31
1996 1995
- - -----------------------------------------------------------------------------
(millions of dollars)
<S> <C> <C>
Exxon Capital Corporation
8.25% Guaranteed notes due 1999 $ 0 $ 26
7.45% Guaranteed notes due 2001 246 246
6.625% Guaranteed notes due 2002 0 217
6.15% Guaranteed notes due 2003 0 196
Guaranteed zero coupon notes due 2004
- Face value ($1,146) net of
unamortized discount 482 432
6.0% Guaranteed notes due 2005 246 246
6.125% Guaranteed notes due 2008 250 250
Exxon Funding B.V.
8.0% Guaranteed notes due 1998 250 249
SeaRiver Maritime Financial Holdings, Inc.
Guaranteed debt securities due 1997-2011 150 150
Guaranteed deferred interest
debentures due 2012
- Face value ($771) net of
unamortized discount 526 472
Exxon Energy Limited
8.3% Hong Kong dollar loan due 1997-2008 159 174
7.16% Export credit loans due 1997-2012 763 437
8.5% British pound loans due 1999-2002 70 70
Floating rate term loan due 2000-2006 565 531
6.87% notes due 2003 173 173
Imperial Oil Limited
9.875% Canadian dollar notes due 1999 173 174
8.3% notes due 2001 200 200
Variable rate notes due 2004 650 1,000
8.75% notes due 2019 219 219
Industrial revenue bonds due 2012-2033 926 926
Guaranteed LESOP notes due 1997-1999 235 386
Other U.S. dollar obligations 506 405
Other foreign currency obligations 402 542
Capitalized lease obligations* 45 57
------------------
Total long-term debt $7,236 $7,778
==================
</TABLE>
*At an average imputed interest rate of 9.3% in 1996 and 9.1% in 1995.
F15
<PAGE>
- - --------------------------------------------------------------------------------
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
- - --------------------------------------------------------------------------------
13. Litigation and Other Contingencies
A number of lawsuits, including class actions, were brought in various courts
against Exxon Corporation and certain of its subsidiaries relating to the
accidental release of crude oil from the tanker Exxon Valdez in 1989.
Essentially all of these lawsuits have now been resolved or are subject to
appeal.
On September 24, 1996, the United States District Court for the District of
Alaska entered a judgment in the amount of $5.058 billion in the Exxon Valdez
civil trial that began in May 1994. The District Court awarded approximately
$19.6 million in compensatory damages to fisher plaintiffs, $38 million in
prejudgment interest on the compensatory damages and $5 billion in punitive
damages to a class composed of all persons and entities who asserted claims for
punitive damages from the corporation as a result of the Exxon Valdez grounding.
The District Court also ordered that these awards shall bear interest from and
after entry of the judgment. The District Court stayed execution on the judgment
pending appeal based on a $6.75 billion letter of credit posted by the
corporation. Exxon has appealed the judgment. The corporation continues to
believe that the punitive damages in this case are unwarranted and that the
judgment should be set aside or substantially reduced by the appellate courts.
The ultimate cost to the corporation from the lawsuits arising from the Exxon
Valdez grounding is not possible to predict and may not be resolved for a number
of years.
On January 29, 1997, a settlement agreement was concluded resolving all
remaining matters between Exxon and various insurers arising from the Valdez
accident. Under terms of this settlement, Exxon received $480 million. Income
statement recognition of this settlement will be deferred in view of uncertainty
regarding the ultimate cost to the corporation of the Valdez accident.
German and Dutch affiliated companies are the concessionaires of a natural
gas field subject to a treaty between the governments of Germany and the
Netherlands under which the gas reserves in an undefined border or common area
are to be shared equally. Entitlement to the reserves is determined by
calculating the amount of gas which can be recovered from this area. Based on
the final reserve determination, the German affiliate has received more gas than
its entitlement. Arbitration proceedings, as provided in the agreements, have
been underway to determine the manner of resolving the issues between the German
and Dutch affiliated companies.
On July 8, 1996, an interim ruling was issued establishing a provisional
compensation payment for the excess gas received. Additional compensation, if
any, remains subject to further arbitration proceedings or negotiation. Other
substantive matters remain outstanding, including recovery of royalties paid on
such excess gas and the taxes payable on the final compensation amount. The net
financial impact on the corporation is not possible to predict at this time
given these outstanding issues. However, the ultimate outcome is not expected to
have a materially adverse effect upon the corporation's consolidated financial
condition or operations.
The U.S. Tax Court has decided the issue with respect to the pricing of crude
oil purchased from Saudi Arabia for the years 1979-1981 in favor of the
corporation. This decision is subject to appeal. Certain other issues for the
years 1979-1982 remain pending before the Tax Court. The ultimate resolution of
these issues is not expected to have a materially adverse effect upon the
corporation's operations or financial condition.
Claims for substantial amounts have been made against Exxon and certain of
its consolidated subsidiaries in other pending lawsuits, the outcome of which is
not expected to have a materially adverse effect upon the corporation's
consolidated financial condition or operations.
The corporation and certain of its consolidated subsidiaries were
contingently liable at December 31, 1996 for $1,293 million, primarily relating
to guarantees for notes, loans and performance under contracts. This includes
$949 million representing guarantees of non-U.S. excise taxes and customs duties
of other companies, entered into as a normal business practice, under reciprocal
arrangements. Not included in this figure are guarantees by consolidated
affiliates of $1,358 million, representing Exxon's share of obligations of
certain equity companies.
Additionally, the corporation and its affiliates have numerous
long-term sales and purchase commitments in their various business activities,
all of which are expected to be fulfilled with no adverse consequences material
to the corporation's operations or financial condition.
The operations and earnings of the corporation and its affiliates throughout
the world have been, and may in the future be, affected from time to time in
varying degree by political developments and laws and regulations, such as
forced divestiture of assets; restrictions on production, imports and exports;
price controls; tax increases and retroactive tax claims; expropriation of
property; cancellation of contract rights and environmental regulations. Both
the likelihood of such occurrences and their overall effect upon the corporation
vary greatly from country to country and are not predictable.
14. Annuity Benefits
Exxon and most of its affiliates have defined benefit retirement plans which
cover substantially all of their employees. Plan benefits are generally based on
years of service and employees' compensation during their last years of
employment.
Assets are contributed to trustees and insurance companies to provide
benefits for many of Exxon's retirement plans and are primarily invested in
equity and fixed income securities. All funded U.S. plans meet the full funding
requirements of the Department of Labor and the Internal Revenue Service as
detailed in the table at the end of this note. Certain smaller U.S. plans, and a
number of non-U.S. plans, are not funded because of local tax conventions and
regulatory practices which do not encourage funding in these plans. Book
reserves have been established for these plans to provide for future benefit
payments.
F16
<PAGE>
<TABLE>
<CAPTION>
U.S. Plans Non-U.S. Plans
---------------------- ---------------------
Annuity plans net pension cost/(credit) 1996 1995 1994 1996 1995 1994
- - -------------------------------------------------------------------------------------------------------------------------------
(millions of dollars)
<S> <C> <C> <C> <C> <C> <C>
Cost of benefits earned by employees during the year $147 $111 $146 $162 $148 $163
Interest accrual on benefits earned in prior years 361 362 354 523 540 483
Actual (gain)/loss on plan assets (544) (796) (44) (641) (625) 76
Deferral of actual versus assumed return on assets 193 486 (286) 229 254 (423)
Amortization of actuarial (gain)/loss and prior service cost 13 (23) 10 40 20 67
Net pension enhancement and curtailment/settlement expense 6 (9) 9 17 11 35
------------------------------------------------------
Net pension cost for the year $176 $131 $189 $330 $348 $401
======================================================
</TABLE>
<TABLE>
<CAPTION>
U.S. Plans Non-U.S. Plans
---------------- ----------------
Dec. 31 Dec. 31 Dec. 31 Dec. 31
Annuity plans status 1996 1995 1996 1995
- - ------------------------------------------------------------------------------------------------------------------------
(millions of dollars)
<S> <C> <C> <C> <C>
Actuarial present value of benefit obligations
Benefits based on service to date and present pay levels
Vested $3,887 $4,047 $6,219 $ 5,921
Non-vested 497 527 211 195
--------------- -----------------
Total accumulated benefit obligation $4,384 $4,574 $6,430 $ 6,116
Additional benefits related to projected pay increases 693 784 1,040 953
--------------- -----------------
Total projected benefit obligation $5,077 $5,358 $7,470 $ 7,069
--------------- -----------------
Funded assets (market values) $3,815 $3,753 $5,025 $4,547
Book reserves 1,299 1,178 2,127 2,226
--------------- -----------------
Total funded assets and book reserves $5,114 $4,931 $7,152 $ 6,773
--------------- -----------------
Assets and reserves in excess of/(less than) projected benefit
obligation $ 37 $ (427) $ (318) $ (296)
Unrecognized net gain/(loss) at transition $ 192 $ 243 $ (10) $ 21
Unrecognized net actuarial loss since transition (62) (568) (196) (16)
Unrecognized prior service costs incurred since transition (93) (102) (112) (301)
Assets and reserves in excess of accumulated benefit obligation $ 730 $ 357 $ 722 $ 657
Assumptions in projected benefit obligation and expense (percent)
Discount rate 7.50 7.00 4.5- 8.5 5.0- 9.0
Long-term rate of compensation increase 4.00 4.50 3.0- 6.5 3.0- 7.0
Long-term annual rate of return on funded assets 9.75 10.00 6.0- 10.0 6.0- 10.0
</TABLE>
- - --------------------------------------------------------------------------------
Pension data, as shown above, is reported as required by current accounting
standards which specify use of a discount rate at which pension liabilities
could be effectively settled. The discount rate stipulated for use in
calculating year-end pension liabilities is based on the year-end rate of
interest on high quality bonds. For determining the funding requirements of U.S.
pension plans in accordance with applicable federal government regulations,
Exxon has elected to use the expected long-term rate of return of the pension
fund's actual portfolio as the discount rate. This rate, 9.75 percent, has
historically been higher than bonds as the majority of pension assets are
invested in equities. On this basis, all of Exxon's U.S. funded plans meet the
full funding requirements of the government as shown below. In fact, the actual
rate earned over the past decade has been 12 percent.
<TABLE>
<CAPTION>
Dec. 31 Dec. 31
Status of U.S. plans subject to federal government funding requirements 1996 1995
- - -----------------------------------------------------------------------------------------------------------------
(millions of dollars)
<S> <C> <C>
Funded assets at market value less total projected benefit obligation $(1,262) $(1,605)
Differences between accounting and funding basis:
Certain smaller plans unfunded due to lack of tax and regulatory incentives 519 520
Use of long term rate of return on fund assets as the discount rate 900 1,170
Use of government regulations and other actuarial adjustments 54 (85)
-----------------
Funded assets in excess of obligations under government regulations $ 211 $ -
</TABLE>
F17
<PAGE>
- - --------------------------------------------------------------------------------
NOTES TO CONSOLIDATED FININCIAL STATEMENTS
- - --------------------------------------------------------------------------------
15. Other Postretirement Benefits
The corporation and several of its affiliates make contributions toward the cost
of providing certain health care and life insurance benefits to retirees, their
beneficiaries and covered dependents. The corporation determines the level of
its contributions to these plans annually; no commitments have been made
regarding the level of such contributions in the future.
The accumulated postretirement benefit obligation is based on the existing
level of the corporation's contribution toward these plans. Plan assets include
investments in equity and fixed income securities.
<TABLE>
<CAPTION>
1996 1995 1994
------------------------- ------------------------ -----------------------
Other postretirement benefits expense Total Health Life/Other Total Health Life/Other Total Health Life/Other
- - ------------------------------------------------------------------------------------------------------------------------------------
(millions of dollars)
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C>
Service cost $ 28 $12 $16 $ 22 $11 $11 $ 27 $12 $15
Interest cost 130 45 85 133 46 87 128 45 83
Actual (gain) on plan assets (57) - (57) (99) - (99) - - -
Deferral of actual versus assumed return on assets 21 - 21 71 - 71 (28) - (28)
Amortization of actuarial loss 15 7 8 1 - 1 14 4 10
-----------------------------------------------------------------------------
Net expense $137 $64 $73 $128 $57 $71 $141 $61 $80
=============================================================================
</TABLE>
<TABLE>
<CAPTION>
Dec. 31, 1996 Dec. 31, 1995
------------------------- -----------------------
Other postretirement benefit plans status Total Health Life/Other Total Health Life/Other
- - ------------------------------------------------------------------------------------------------------------------------------------
(millions of dollars)
<S> <C> <C> <C> <C> <C> <C>
Accumulated postretirement benefit obligation
Retirees $1,372 $460 $ 912 $1,375 $463 $ 912
Fully eligible participants 121 42 79 120 41 79
Other active participants 386 147 239 394 147 247
-------------------------------------------------------
$1,879 $649 $1,230 $1,889 $651 $1,238
Funded assets (market values) (422) - (422) (375) - (375)
Unrecognized prior service costs (22) (22) - (24) (24) -
Unrecognized net loss (133) (95) (38) (207) (93) (114)
-------------------------------------------------------
Book reserves $1,302 $532 $ 770 $1,283 $534 $ 749
=======================================================
Assumptions in accumulated postretirement benefit
obligation and expense (percent)
Discount rate 7.50 7.00
Long-term rate of compensation increase 4.00 4.50
Long-term annual rate of return on funded assets 9.75 10.00
- - ------------------------------------------------------------------------------------------------------------------------------------
</TABLE>
16. Capital
In 1989, the corporation sold 16.3 million shares of a new issue of convertible
Class A Preferred Stock to its leveraged employee stock ownership plan (LESOP)
trust for $61.50 per share. The proceeds of the issuance were used by the
corporation for general corporate purposes. The corporation recorded a
"Guaranteed LESOP Obligation" of $1,000 million as debt and as a reduction in
shareholders' equity, representing company-guaranteed borrowings by the LESOP
trust to purchase the preferred stock. As the debt is repaid, the Guaranteed
LESOP Obligation will be extinguished. The stock can be converted into common
stock at the lower of common stock market value or $61.50. Dividends are
cumulative and payable in an amount per share equal to $4.68 per annum.
Dividends paid per preferred share were $4.68 in 1996, 1995 and 1994.
Dividends paid per common share were $3.12 in 1996, $3.00 in 1995 and $2.91
in 1994.
Earnings per common share are based on net income less preferred stock
dividends and the weighted average number of outstanding common shares during
each year, adjusted for stock splits.
17. Leveraged Employee Stock Ownership Plan (LESOP)
In 1989, the corporation's employee stock ownership plan trustee borrowed $1,000
million under the terms of notes guaranteed by the corporation maturing between
1990 and 1999. The principal due on the notes increases from $75 million in 1990
to $125 million in 1999. As further described in note 16, the LESOP trustee used
the proceeds of the borrowing to purchase shares of convertible Class A
Preferred Stock.
Employees eligible to participate in the corporation's thrift plan may elect
to participate in the LESOP. Corporation contributions to the plan, plus
dividends, are used to make principal and interest payments on the notes. As
contributions and dividends are credited, shares of preferred stock are
proportionately converted into common stock, with no cash flow impact to the
corporation, and allocated to participants' accounts. In 1996, 1995 and 1994,
2.5 million, 1.6 million and 1.8 million shares of preferred stock totaling $151
million, $100 million and $114 million, respectively, were converted to common
stock and allocated. Preferred dividends of $27 million, $38 million and $46
million were paid during 1996, 1995 and 1994, respectively, and covered interest
payments on the notes. The 1996, 1995 and 1994 principal payments were made from
employer contributions and dividends reinvested within the
F18
<PAGE>
LESOP trust and payments, if any, by Exxon as guarantor.
Accounting for the plan follows the principles which were in effect in 1989
when the plan was established. The amount of compensation expense recorded by
the corporation for contributions to the plan was $31 million in 1996, $73
million in 1995 and $80 million in 1994. The LESOP trust held 4.9 million and
7.4 million shares of preferred stock, and 19.7 million and 19.3 million shares
of common stock at the end of 1996 and 1995, respectively.
- - --------------------------------------------------------------------------------
18. Income, Excise and Other Taxes
- - --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
1996 1995 1994
- - -------------------------------------------------------------------------------------------------------------------------------
United Non- United Non- United Non-
States U.S. Total States U.S. Total States U.S. Total
---------------------------------------------------------------------------------------
(millions of dollars)
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C>
Income taxes
Federal or non-U.S.
Current $ 988 $ 2,751 $ 3,739 $ 854 $ 1,966 $ 2,820 $ 380 $ 2,036 $ 2,416
Deferred - net 314 164 478 199 789 988 153 93 246
U.S. tax on non-U.S. operations 47 - 47 45 - 45 (8) - (8)
----------------------------------------------------------------------------------------
$1,349 $ 2,915 $ 4,264 $1,098 $ 2,755 $ 3,853 $ 525 $ 2,129 $ 2,654
State 142 - 142 119 - 119 50 - 50
----------------------------------------------------------------------------------------
Total income tax expense $1,491 $ 2,915 $ 4,406 $1,217 $ 2,755 $ 3,972 $ 575 $ 2,129 $ 2,704
Excise taxes 2,494 12,321 14,815 2,356 11,555 13,911 2,266 10,179 12,445
All other taxes and duties 853 23,689 24,542 870 22,458 23,328 874 20,310 21,184
----------------------------------------------------------------------------------------
Total $4,838 $ 38,925 $43,763 $4,443 $36,768 $41,211 $3,715 $32,618 $36,333
========================================================================================
</TABLE>
All other taxes and duties include taxes reported in operating and selling,
general and administrative expenses. The above provisions for deferred income
taxes include net (charges)/credits for the effect of changes in tax laws and
rates of $26 million in 1996, $(83) million in 1995 and $43 million in 1994.
Income taxes of $(78) million in 1996, $(14) million in 1995 and $(10) million
in 1994, were (charged)/credited directly to shareholders' equity.
- - --------------------------------------------------------------------------------
The reconciliation between income tax expense and a theoretical U.S. tax
computed by applying a rate of 35 percent for 1996, 1995 and 1994, is as
follows:
<TABLE>
<CAPTION>
1996 1995 1994
- - --------------------------------------------------------------------------------
(millions of dollars)
<S> <C> <C> <C>
Earnings before Federal and
non-U.S. income taxes
United States $ 3,706 $ 2,619 $1,924
Non-U.S. 8,068 7,704 5,830
------------------------------
Total $11,774 $10,323 $7,754
------------------------------
Theoretical tax $ 4,121 $ 3,613 $2,714
Effect of equity method accounting (439) (482) (318)
Adjustment for non-U.S. taxes in
excess of theoretical U.S. tax 530 541 407
U.S. tax on non-U.S. operations 47 45 (8)
Other U.S. 5 136 (141)
------------------------------
Federal and non-U.S. income
tax expense $ 4,264 $ 3,853 $2,654
==============================
Total effective tax rate 39.9% 41.4% 38.5%
</TABLE>
The effective income tax rate includes state income taxes and the
corporation's share of income taxes of equity companies. Equity company taxes
totaled $576 million in 1996, $596 million in 1995 and $487 million in 1994,
essentially all outside the U.S.
Deferred income taxes reflect the impact of temporary differences between the
amount of assets and liabilities recognized for financial reporting purposes and
such amounts recognized for tax purposes.
Deferred tax liabilities/(assets) are comprised of the following at December
31:
<TABLE>
<CAPTION>
Tax effects of temporary differences for: 1996 1995
- - --------------------------------------------------------------------------------
(millions of dollars)
<S> <C> <C>
Depreciation $10,574 $ 9,938
Intangible development costs 3,177 3,088
Capitalized interest 1,187 1,074
Other liabilities 1,824 1,296
----------------------
Total deferred tax liabilities $16,762 $15,396
----------------------
Pension and other postretirement benefits $(1,102) $(1,072)
Site restoration reserves (850) (794)
Tax loss carryforwards (718) (583)
Other assets (1,259) (1,035)
----------------------
Total deferred tax assets $(3,929) $(3,484)
----------------------
Asset valuation allowances 327 314
----------------------
Net deferred tax liabilities $13,160 $12,226
======================
</TABLE>
The corporation had $6.2 billion of indefinitely reinvested, undistributed
earnings from subsidiary companies outside the U.S. Unrecognized deferred taxes
on remittance of these funds are not expected to be material.
F19
<PAGE>
- - --------------------------------------------------------------------------------
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
- - --------------------------------------------------------------------------------
19. Distribution of Earnings and Assets
<TABLE>
<CAPTION>
Segment 1996 1995 1994
- - ------------------------------------------------------------------------------------------------------------------------------------
Corporate Corporate Corporate
Petroleum Chemicals total Petroleum Chemicals total Petroleum Chemicals total
-----------------------------------------------------------------------------------------------------
(millions of dollars)
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C>
Sales and operating revenue
Non-affiliated $118,012 $11,430 $131,543 $107,749 $11,737 $121,804 $100,409 $ 9,544 $112,128
Intersegment 3,049 1,683 - 2,539 1,609 - 2,327 1,419 -
-----------------------------------------------------------------------------------------------------
Total $121,061 $13,113 $131,543 $110,288 $13,346 $121,804 $102,736 $10,963 $112,128
=====================================================================================================
Operating profit $ 8,717 $ 1,662 $ 11,134 $ 6,654 $ 2,734 $ 10,185 $ 5,935 $ 1,262 $ 7,897
Add/(deduct):
Income taxes (3,735) (592) (4,420) (3,060) (896) (4,065) (2,538) (344) (2,992)
Minority interests (215) (14) (458) (129) (27) (365) (119) (7) (307)
Earnings of
equity companies 1,176 143 1,319 1,219 207 1,426 893 43 936
Corporate and financing - - (65) - - (711) - - (434)
-----------------------------------------------------------------------------------------------------
Earnings $ 5,943 $ 1,199 $ 7,510 $ 4,684 $ 2,018 $ 6,470 $ 4,171 $ 954 $ 5,100
=====================================================================================================
Identifiable assets $ 70,035 $10,715 $ 95,527 $ 68,852 $ 9,595 $ 91,296 $ 67,017 $ 8,778 $ 87,862
Depreciation and depletion $ 4,394 $ 430 $ 5,329 $ 4,474 $ 399 $ 5,386 $ 4,178 $ 399 $ 5,015
Additions to plant $ 5,161 $ 987 $ 7,132 $ 5,055 $ 782 $ 7,201 $ 4,884 $ 473 $ 6,568
</TABLE>
<TABLE>
<CAPTION>
Geographic Sales and other operating revenue Earnings Identifiable assets
- - ------------------------------------------------------------------------------------------------------------------------------------
Non-affiliated Interarea Total
-------------------------------------------------------------------
(millions of dollars)
<S> <C> <C> <C> <C> <C> <C>
1996 Petroleum and chemicals
United States $ 27,513 $ 857 $ 28,370 $2,651 $25,161
Other Western Hemisphere 20,197 158 20,355 559 10,768
Eastern Hemisphere 81,732 771 82,503 3,932 44,821
Other/eliminations 2,101 (1,786) 315 368 14,777
----------------------------------------------------------
Corporate total $ 131,543 - $131,543 $7,510 $95,527
==========================================================
1995 Petroleum and chemicals
United States $ 24,024 $ 854 $ 24,878 $2,307 $24,606
Other Western Hemisphere 18,354 328 18,682 444 10,664
Eastern Hemisphere 77,108 1,842 78,950 3,951 43,177
Other/eliminations 2,318 (3,024) (706) (232) 12,849
----------------------------------------------------------
Corporate total $ 121,804 - $121,804 $6,470 $91,296
==========================================================
1994 Petroleum and chemicals
United States $ 22,651 $ 834 $ 23,485 $1,560 $24,926
Other Western Hemisphere 16,875 500 17,375 370 10,693
Eastern Hemisphere 70,429 1,868 72,297 3,195 40,176
Other/eliminations 2,173 (3,202) (1,029) (25) 12,067
----------------------------------------------------------
Corporate total $ 112,128 - $112,128 $5,100 $87,862
==========================================================
</TABLE>
Transfers between business activities or areas are at estimated market prices.
F20
<PAGE>
- - --------------------------------------------------------------------------------
QUARTERLY INFORMATION
- - --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
1996 1995
-----------------------------------------------------------------------------------------------------
First Second Third Fourth First Second Third Fourth
Quarter Quarter Quarter Quarter Year Quarter Quarter Quarter Quarter Year
- - ------------------------------------------------------------------------------ --------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
Volumes
Production of crude oil (thousands of barrels daily)
and natural gas liquids 1,683 1,595 1,570 1,615 1,615 1,772 1,742 1,684 1,706 1,726
Refinery throughput 3,753 3,754 3,828 3,833 3,792 3,631 3,442 3,713 3,846 3,659
Petroleum product sales 5,149 5,067 5,223 5,404 5,211 5,043 4,896 5,099 5,264 5,076
Natural gas production (millions of cubic feet daily)
available for sale 8,330 5,674 5,084 7,227 6,577 7,187 5,119 4,717 7,046 6,013
(thousands of metric tons)
Chemical prime product sales 3,911 3,978 3,909 3,914 15,712 3,569 3,637 3,553 3,618 14,377
Summarized financial data
Sales and other operating (millions of dollars)
revenue $30,474 31,625 32,938 36,506 131,543 $29,197 31,084 30,577 30,946 121,804
Gross profit* $13,217 13,724 14,403 15,209 56,553 $12,316 13,102 13,685 14,223 53,326
Net income $ 1,885 1,570 1,560 2,495 7,510 $ 1,660 1,630 1,500 1,680 6,470
Per share data (dollars per share)
Net income per common share $ 1.51 1.26 1.25 2.00 6.02 $ 1.33 1.30 1.20 1.35 5.18
Dividends per common share $ 0.75 0.79 0.79 0.79 3.12 $ 0.75 0.75 0.75 0.75 3.00
Dividends per preferred share $ 1.17 1.17 1.17 1.17 4.68 $ 1.17 1.17 1.17 1.17 4.68
Common Stock prices
High $86.000 88.750 90.125 101.250 101.250 $67.000 72.375 74.250 86.000 86.000
Low $77.625 79.875 80.000 82.875 77.625 $60.125 66.000 68.125 71.375 60.125
</TABLE>
*Gross profit equals sales and other operating revenue less estimated costs
associated with products sold. Certain costs and other deductions for 1995 have
been reclassified to conform to the 1996 presentation.
The price range of Exxon Common Stock is based on the composite tape of the
several U.S. exchanges where Exxon Common Stock is traded. The principal market
where Exxon Common Stock (XON) is traded is the New York Stock Exchange,
although the stock is traded on other exchanges in and outside the United
States.
At January 31, 1997, there were 610,416 holders of record of Exxon Common
Stock.
On January 29, 1997, the corporation declared a $0.79 dividend per common
share, payable March 10, 1997.
F21
<PAGE>
- - --------------------------------------------------------------------------------
SUPPLEMENTAL INFORMATION ON OIL AND GAS EXPLORATION AND PRODUCTION ACTIVITIES
- - --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Consolidated Subsidiaries
--------------------------------------------------------------
Non-
United Consolidated Total
Results of Operations States Canada Europe** Asia-Pacific Other Total Interests Worldwide
- - --------------------------------------------------------------------------------------------------------------------------------
(millions of dollars)
<S> <C> <C> <C> <C> <C> <C> <C> <C>
1996 - Revenue
Sales to third parties $1,706 $ 443 $2,581 $1,998 $ 119 $ 6,847 $2,974 $ 9,821
Transfers 3,846 682 2,360 736 125 7,749 47 7,796
------------------------------------------------------------------------------------
$5,552 $ 1,125 $4,941 $2,734 $ 244 $14,596 $3,021 $17,617
Production costs excluding taxes 1,116 376 1,050 391 70 3,003 250 3,253
Exploration expenses 116 32 224 140 255 767 73 840
Depreciation and depletion 1,139 342 1,130 426 102 3,139 195 3,334
Taxes other than income 476 24 96 477 - 1,073 1,038 2,111
Related income tax 990 83 1,182 492 (13) 2,734 603 3,337
------------------------------------------------------------------------------------
Results of producing activities $1,715 $ 268 $1,259 $ 808 $ (170) $ 3,880 $ 862 $ 4,742
Other earnings* 63 51 103 36 5 258 58 316
------------------------------------------------------------------------------------
Total earnings $1,778 $ 319 $1,362 $ 844 $ (165) $ 4,138 $ 920 $ 5,058
====================================================================================
1995 - Revenue
Sales to third parties $1,021 $ 320 $2,253 $1,724 $ 138 $ 5,456 $2,657 $ 8,113
Transfers 3,140 715 1,782 734 113 6,484 159 6,643
------------------------------------------------------------------------------------
$4,161 $ 1,035 $4,035 $2,458 $ 251 $11,940 $2,816 $14,756
Production costs excluding taxes 1,138 366 1,093 390 88 3,075 254 3,329
Exploration expenses 108 55 166 168 194 691 83 774
Depreciation and depletion 1,245 380 1,060 464 126 3,275 250 3,525
Taxes other than income 434 26 101 349 1 911 899 1,810
Related income tax 457 89 841 477 36 1,900 540 2,440
------------------------------------------------------------------------------------
Results of producing activities $ 779 $ 119 $ 774 $ 610 $ (194) $ 2,088 $ 790 $ 2,878
Other earnings* 277 - 169 40 (3) 483 51 534
------------------------------------------------------------------------------------
Total earnings $1,056 $ 119 $ 943 $ 650 $ (197) $ 2,571 $ 841 $ 3,412
====================================================================================
1994 - Revenue
Sales to third parties $1,365 $ 351 $2,157 $1,623 $ 115 $ 5,611 $1,944 $ 7,555
Transfers 2,581 651 1,430 704 135 5,501 300 5,801
------------------------------------------------------------------------------------
$3,946 $ 1,002 $3,587 $2,327 $ 250 $11,112 $2,244 $13,356
Production costs excluding taxes 1,228 397 1,129 411 84 3,249 347 3,596
Exploration expenses 134 34 209 106 183 666 86 752
Depreciation and depletion 1,158 412 919 457 132 3,078 210 3,288
Taxes other than income 393 20 83 358 2 856 620 1,476
Related income tax 344 74 614 344 32 1,408 415 1,823
------------------------------------------------------------------------------------
Results of producing activities $ 689 $ 65 $ 633 $ 651 $ (183) $ 1,855 $ 566 $ 2,421
Other earnings* 158 (2) 129 24 10 319 42 361
------------------------------------------------------------------------------------
Total earnings $ 847 $ 63 $ 762 $ 675 $ (173) $ 2,174 $ 608 $ 2,782
====================================================================================
</TABLE>
<TABLE>
<CAPTION>
Average sales prices and production costs per unit of production
- - -------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
During 1996
Average sales prices
Crude oil and NGL, per barrel $17.24 $16.38 $19.93 $21.04 $20.50 $18.69 $20.36 $18.75
Natural gas, per thousand cubic feet 2.35 1.48 2.83 2.52 - 2.49 3.48 2.80
Average production costs, per barrel*** 3.26 5.08 4.07 2.68 5.83 3.61 1.72 3.33
During 1995
Average sales prices
Crude oil and NGL, per barrel $13.09 $12.92 $16.43 $18.19 $17.16 $15.11 $16.73 $15.16
Natural gas, per thousand cubic feet 1.64 0.95 2.98 1.44 - 1.89 3.81 2.45
Average production costs, per barrel*** 3.31 4.09 4.55 2.41 5.87 3.62 1.97 3.40
During 1994
Average sales prices
Crude oil and NGL, per barrel $12.00 $11.48 $15.01 $16.53 $15.28 $13.81 $15.26 $13.87
Natural gas, per thousand cubic feet 1.92 1.37 2.70 1.32 1.64 1.96 2.85 2.23
Average production costs, per barrel*** 3.74 4.31 4.83 2.47 5.12 3.88 2.60 3.70
</TABLE>
* Earnings related to transportation of oil and gas, sale of third party
purchases, oil sands operations and technical services agreements (reduced
by minority interests).
** Certain revenues, costs, and other deductions for prior years have been
reclassified to conform to the 1996 presentation.
*** Natural gas included by conversion to crude oil equivalent; production costs
exclude all taxes.
F22
<PAGE>
Oil and Gas Exploration and Production Costs
The amounts shown for net capitalized costs of consolidated subsidiaries are
$3,242 million less at year-end 1996 and $3,116 million less at year-end 1995
than the amounts reported as investments in property, plant and equipment for
exploration and production in note 7, page F13. This is due to the exclusion
from capitalized costs of certain transportation and research assets and assets
relating to the oil sands operations, and to inclusion of accumulated provisions
for site restoration costs, all as required in Statement of Financial Accounting
Standards No. 19.
The amounts reported as costs incurred include both capitalized costs and
costs charged to expense during the year. Total worldwide costs incurred in 1996
were $4,443 million, up $126 million from 1995, due primarily to higher
exploration costs. 1995 costs were $4,317 million, up $606 million from 1994,
due primarily to higher development costs.
<TABLE>
<CAPTION>
Consolidated Subsidiaries
------------------------------------------------------------
Non-
United Consolidated Total
Capitalized costs States Canada Europe Asia-Pacific Other Total Interests Worldwide
- - ------------------------------------------------------------------------------------------------------------------------------------
(millions of dollars)
<S> <C> <C> <C> <C> <C> <C> <C> <C>
As of December 31, 1996
Property (acreage) costs - Proved $ 3,195 $2,914 $ 90 $ 631 $ 827 $ 7,657 $ 12 $ 7,669
- Unproved 323 100 27 236 105 791 20 811
--------------------------------------------------------------------------------------
Total property costs $ 3,518 $3,014 $ 117 $ 867 $ 932 $ 8,448 $ 32 $ 8,480
Producing assets 22,405 3,690 20,009 7,022 726 53,852 2,451 56,303
Support facilities 369 78 520 699 41 1,707 130 1,837
Incomplete construction 537 98 1,726 971 207 3,539 346 3,885
--------------------------------------------------------------------------------------
Total capitalized costs $ 26,829 $6,880 $22,372 $9,559 $ 1,906 $67,546 $ 2,959 $ 70,505
Accumulated depreciation and depletion 15,761 3,418 12,302 5,498 1,124 38,103 2,240 40,343
--------------------------------------------------------------------------------------
Net capitalized costs $ 11,068 $3,462 $10,070 $4,061 $ 782 $29,443 $ 719 $ 30,162
======================================================================================
As of December 31, 1995
Property (acreage) costs - Proved $ 3,433 $3,088 $ 49 $ 582 $ 752 $ 7,904 $ 5 $ 7,909
- Unproved 428 100 65 230 63 886 30 916
--------------------------------------------------------------------------------------
Total property costs $ 3,861 $3,188 $ 114 $ 812 $ 815 $ 8,790 $ 35 $ 8,825
Producing assets 22,477 3,734 17,069 6,450 948 50,678 2,898 53,576
Support facilities 373 88 493 689 41 1,684 92 1,776
Incomplete construction 323 78 2,292 857 132 3,682 167 3,849
--------------------------------------------------------------------------------------
Total capitalized costs $ 27,034 $7,088 $19,968 $8,808 $ 1,936 $64,834 $ 3,192 $ 68,026
Accumulated depreciation and depletion 15,453 3,340 10,771 4,993 1,223 35,780 2,291 38,071
--------------------------------------------------------------------------------------
Net capitalized costs $ 11,581 $3,748 $ 9,197 $3,815 $ 713 $29,054 $ 901 $ 29,955
======================================================================================
<CAPTION>
Costs incurred in property acquisitions, exploration and development activities
- - -------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
During 1996
Property acquisition costs - Proved $ 2 $ 1 $ - $ 2 $ 81 $ 86 $ - $ 86
- Unproved 16 3 - 7 46 72 - 72
Exploration costs 156 50 258 153 283 900 117 1,017
Development costs 817 165 1,498 563 83 3,126 142 3,268
--------------------------------------------------------------------------------------
Total $ 991 $ 219 $ 1,756 $ 725 $ 493 $ 4,184 $ 259 $ 4,443
======================================================================================
During 1995
Property acquisition costs - Proved $ 1 $ 6 $ 2 $ - $ 87 $ 96 $ 1 $ 97
- Unproved 19 3 1 3 2 28 - 28
Exploration costs 131 60 251 200 207 849 89 938
Development costs 624 139 1,653 551 60 3,027 227 3,254
--------------------------------------------------------------------------------------
Total $ 775 $ 208 $ 1,907 $ 754 $ 356 $ 4,000 $ 317 $ 4,317
======================================================================================
During 1994
Property acquisition costs - Proved $ - $ 11 $ - $ 2 $ - $ 13 $ - $ 13
- Unproved 8 13 21 - 23 65 - 65
Exploration costs 168 35 234 127 201 765 101 866
Development costs 663 113 1,279 554 49 2,658 109 2,767
--------------------------------------------------------------------------------------
Total $ 839 $ 172 $ 1,534 $ 683 $ 273 $ 3,501 $ 210 $ 3,711
======================================================================================
</TABLE>
F23
<PAGE>
- - --------------------------------------------------------------------------------
SUPPLEMENTAL INFORMATION ON OIL AND GAS EXPLORATION AND PRODUCTION ACTIVITIES
- - --------------------------------------------------------------------------------
Oil and Gas Reserves
The following information describes changes during the years and balances of
proved oil and gas reserves at year-end 1994, 1995 and 1996.
The definitions used are in accordance with applicable Securities and
Exchange Commission regulations.
Proved reserves are the estimated quantities of oil and gas which geological
and engineering data demonstrate with reasonable certainty to be recoverable in
future years from known reservoirs under existing economic and operating
conditions. In some cases, substantial new investments in additional wells and
related facilities will be required to recover these proved reserves.
Proved reserves include 100 percent of each majority-owned affiliate's
participation in proved reserves and Exxon's ownership percentage of the proved
reserves of equity companies, but exclude royalties and quantities due others
when produced. Gas reserves exclude the gaseous equivalent of liquids expected
to be removed from the gas on leases, at field facilities and at gas processing
plants. These liquids are included in net proved reserves of crude oil and
natural gas liquids.
<TABLE>
<CAPTION>
Consolidated Subsidiaries
------------------------------------------------------------
Non-
United Consolidated Total
Crude Oil and Natural Gas Liquids States Canada Europe Asia-Pacific Other Total Interests Worldwide
- - ------------------------------------------------------------------------------------------------------------------------------------
(millions of barrels)
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Net proved developed and undeveloped reserves
January 1, 1994 2,324 1,135 1,400 808 91 5,758 492 6,250
Revisions 129 (2) 32 31 5 195 5 200
Purchases 4 4 1 - - 9 - 9
Sales (14) (5) - - - (19) - (19)
Improved recovery 53 107 12 3 - 175 - 175
Extensions and discoveries 34 3 67 34 - 138 2 140
Production (206) (74) (171) (117) (16) (584) (23) (607)
-----------------------------------------------------------------------------------------
December 31, 1994 2,324 1,168 1,341 759 80 5,672 476 6,148
Revisions 124 (29) 16 67 1 179 (11) 168
Purchases - - - - 47 47 - 47
Sales (8) (5) (1) - (5) (19) (7) (26)
Improved recovery 3 71 9 - - 83 - 83
Extensions and discoveries 93 9 297 31 2 432 - 432
Production (219) (73) (176) (109) (15) (592) (22) (614)
-----------------------------------------------------------------------------------------
December 31, 1995 2,317 1,141 1,486 748 110 5,802 436 6,238
Revisions 139 10 59 83 38 329 3 332
Purchases 2 - - - 50 52 - 52
Sales (31) (7) - - (5) (43) - (43)
Improved recovery 26 1 9 - - 36 - 36
Extensions and discoveries 53 1 231 13 2 300 - 300
Production (214) (63) (178) (89) (12) (556) (20) (576)
-----------------------------------------------------------------------------------------
December 31, 1996 2,292 1,083 1,607 755 183 5,920 419 6,339
Oil sands reserves
At December 31, 1994 - 448 - - - 448 - 448
At December 31, 1995 - 432 - - - 432 - 432
At December 31, 1996 - 443 - - - 443 - 443
====================================================================================================================================
Worldwide net proved developed and
undeveloped reserves (including oil sands)
At December 31, 1994 2,324 1,616 1,341 759 80 6,120 476 6,596
At December 31, 1995 2,317 1,573 1,486 748 110 6,234 436 6,670
At December 31, 1996 2,292 1,526 1,607 755 183 6,363 419 6,782
====================================================================================================================================
Developed reserves, included above
(excluding oil sands)
At December 31, 1994 1,945 571 841 561 72 3,990 437 4,427
At December 31, 1995 1,942 526 805 610 60 3,943 410 4,353
At December 31, 1996 1,925 512 815 582 44 3,878 396 4,274
</TABLE>
F24
<PAGE>
Net proved developed reserves are those volumes which are expected to be
recovered through existing wells with existing equipment and operating methods.
Undeveloped reserves are those volumes which are expected to be recovered as a
result of future investments to drill new wells, to recomplete existing wells
and/or to install facilities to collect and deliver the production from existing
and future wells.
Reserves attributable to certain oil and gas discoveries were not considered
proved as of year-end 1996 due to geological, technological or economic
uncertainties and therefore are not included in the tabulation.
Crude oil and natural gas liquids and natural gas production quantities shown
are the net volumes withdrawn from Exxon's oil and gas reserves. The natural gas
quantities differ from the quantities of gas delivered for sale by the producing
function as reported on page F27 due to volumes consumed or flared and inventory
changes. Such quantities amounted to approximately 200 billion cubic feet in
1994, 189 billion cubic feet in 1995 and 236 billion cubic feet in 1996.
<TABLE>
<CAPTION>
Consolidated Subsidiaries
-----------------------------------------------------------
Non-
United Consolidated Total
Natural Gas States Canada Europe Asia-Pacific Other Total Interests Worldwide
- - ------------------------------------------------------------------------------------------------------------------------------------
(billions of cubic feet)
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Net proved developed and undeveloped reserves
January 1, 1994 9,530 2,505 7,349 6,320 112 25,816 16,435 42,251
Revisions 405 (60) 262 (188) 1 420 753 1,173
Purchases - 4 - - - 4 - 4
Sales (25) (61) (16) - - (102) - (102)
Improved recovery 17 59 36 2 - 114 25 139
Extensions and discoveries 398 17 265 74 - 754 391 1,145
Production (787) (162) (427) (334) (9) (1,719) (663) (2,382)
-------------------------------------------------------------------------------------
December 31, 1994 9,538 2,302 7,469 5,874 104 25,287 16,941 42,228
Revisions 838 (72) 65 175 (1) 1,005 228 1,233
Purchases - - - - 10 10 - 10
Sales (27) (79) - - (3) (109) (88) (197)
Improved recovery - 19 56 - - 75 - 75
Extensions and discoveries 407 104 375 67 - 953 117 1,070
Production (809) (156) (412) (352) (8) (1,737) (646) (2,383)
-------------------------------------------------------------------------------------
December 31, 1995 9,947 2,118 7,553 5,764 102 25,484 16,552 42,036
Revisions 422 (118) 101 107 13 525 196 721
Purchases 4 11 - - 13 28 11 39
Sales (36) (76) - - (1) (113) (3) (116)
Improved recovery 39 18 5 - - 62 - 62
Extensions and discoveries 615 61 506 53 - 1,235 166 1,401
Production (841) (142) (525) (380) (8) (1,896) (747) (2,643)
-------------------------------------------------------------------------------------
December 31, 1996 10,150 1,872 7,640 5,544 119 25,325 16,175 41,500
================================================================================================================================
Worldwide net proved developed
and undeveloped reserves
At December 31, 1994 9,538 2,302 7,469 5,874 104 25,287 16,941 42,228
At December 31, 1995 9,947 2,118 7,553 5,764 102 25,484 16,552 42,036
At December 31, 1996 10,150 1,872 7,640 5,544 119 25,325 16,175 41,500
================================================================================================================================
Developed reserves, included above
At December 31, 1994 8,120 1,861 4,451 3,628 103 18,163 7,588 25,751
At December 31, 1995 8,394 1,586 4,555 4,349 92 18,976 7,210 26,186
At December 31, 1996 8,216 1,392 4,872 3,995 83 18,558 6,754 25,312
</TABLE>
F25
<PAGE>
- - --------------------------------------------------------------------------------
SUPPLEMENTAL INFORMATION ON OIL AND GAS EXPLORATION AND PRODUCTION ACTIVITIES
- - --------------------------------------------------------------------------------
Standardized Measure of Discounted Future Cash Flows
As required by the Financial Accounting Standards Board, the standardized
measure of discounted future net cash flows is computed by applying year-end
prices and costs and a discount factor of 10 percent to net proved reserves. The
corporation believes that the standardized measure is not meaningful and may be
misleading.
<TABLE>
<CAPTION>
Consolidated Subsidiaries
----------------------------------------------------------
Non-
United Consolidated Total
States Canada Europe Asia-Pacific Other Total Interests Worldwide
- - ----------------------------------------------------------------------------------------------------------------------------------
(millions of dollars)
<S> <C> <C> <C> <C> <C> <C> <C> <C>
As of December 31, 1994
Future cash inflows from sales of oil and gas $41,430 $15,646 $37,265 $18,974 $1,201 $114,516 $53,163 $167,679
Future production and development costs 21,095 6,579 19,175 10,966 485 58,300 23,611 81,911
Future income tax expenses 6,143 3,713 7,033 2,911 325 20,125 11,938 32,063
--------------------------------------------------------------------------------
Future net cash flows $14,192 $ 5,354 $11,057 $ 5,097 $ 391 $ 36,091 $17,614 $ 53,705
Effect of discounting net cash flows at 10% 6,883 2,668 4,525 2,276 100 16,452 11,251 27,703
--------------------------------------------------------------------------------
Discounted future net cash flows $ 7,309 $ 2,686 $ 6,532 $ 2,821 $ 291 $ 19,639 $ 6,363 $ 26,002
================================================================================
As of December 31, 1995
Future cash inflows from sales of oil and gas $49,920 $15,418 $43,602 $21,214 $2,015 $132,169 $63,444 $195,613
Future production and development costs 19,871 6,353 19,647 10,084 836 56,791 28,521 85,312
Future income tax expenses 10,204 3,840 11,298 4,117 456 29,915 13,928 43,843
--------------------------------------------------------------------------------
Future net cash flows $19,845 $ 5,225 $12,657 $ 7,013 $ 723 $ 45,463 $20,995 $ 66,458
Effect of discounting net cash flows at 10% 9,616 2,592 4,445 3,292 353 20,298 13,089 33,387
--------------------------------------------------------------------------------
Discounted future net cash flows $10,229 $ 2,633 $ 8,212 $ 3,721 $ 370 $ 25,165 $ 7,906 $ 33,071
================================================================================
As of December 31, 1996
Future cash inflows from sales of oil and gas $78,728 $21,969 $56,745 $26,336 $4,094 $187,872 $66,078 $253,950
Future production and development costs 20,918 6,654 19,024 11,941 1,435 59,972 30,015 89,987
Future income tax expenses 20,772 6,444 18,845 5,436 627 52,124 14,961 67,085
--------------------------------------------------------------------------------
Future net cash flows $37,038 $ 8,871 $18,876 $ 8,959 $2,032 $ 75,776 $21,102 $ 96,878
Effect of discounting net cash flows at 10% 18,022 4,808 6,703 3,955 1,203 34,691 13,066 47,757
--------------------------------------------------------------------------------
Discounted future net cash flows $19,016 $ 4,063 $12,173 $ 5,004 $ 829 $ 41,085 $ 8,036 $ 49,121
================================================================================
</TABLE>
Change in Standardized Measure of Discounted Future Net Cash Flows Relating to
Proved Oil and Gas Reserves
<TABLE>
<CAPTION>
Consolidated Subsidiaries 1996 1995 1994
- - -----------------------------------------------------------------------------------------------------------------------------------
(millions of dollars)
<S> <C> <C> <C>
Value of reserves added during the year due to extensions, discoveries, improved recovery
and net purchases less related costs $ 3,581 $3,057 $1,245
Changes in value of previous-year reserves due to:
Sales and transfers of oil and gas produced during the year, net of production (lifting) costs (10,875) (8,101) (7,219)
Development costs incurred during the year 3,082 2,850 2,629
Net change in prices, lifting and development costs 25,677 9,257 6,340
Revisions of previous reserves estimates 3,157 1,581 1,307
Accretion of discount 3,330 2,495 1,969
Net change in income taxes (12,032) (5,613) (3,367)
------------------------------
Total change in the standardized measure during the year $15,920 $5,526 $2,904
==============================
</TABLE>
F26
<PAGE>
- - --------------------------------------------------------------------------------
OPERATING SUMMARY
- - --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
1996 1995 1994 1993 1992 1991 1990 1989 1988 1987 1986
- - ------------------------------------------------------------------------------------------------------------------------------------
(thousands of barrels daily)
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
Production of crude oil and natural gas liquids
Net production
United States 587 600 562 553 591 619 640 693 760 756 761
Canada 211 242 251 254 268 278 302 312 249 222 196
Europe 499 498 484 423 396 363 313 351 444 456 473
Asia-Pacific 244 302 325 347 346 342 331 328 345 338 313
Other Non-U.S. 74 84 87 90 104 113 126 120 121 63 53
------------------------------------------------------------------------------------
Worldwide 1,615 1,726 1,709 1,667 1,705 1,715 1,712 1,804 1,919 1,835 1,796
====================================================================================
(millions of cubic feet daily)
Natural gas production available for sale
Net production
United States 2,094 2,055 2,021 1,764 1,607 1,655 1,778 1,827 1,805 1,698 1,919
Canada 194 281 286 328 326 355 413 417 209 147 142
Europe 3,361 2,804 2,842 3,049 3,097 3,010 2,694 2,707 2,787 3,012 2,946
Asia-Pacific 928 873 827 678 577 411 369 376 332 308 267
Other Non-U.S. - - 2 6 54 66 64 58 59 62 55
------------------------------------------------------------------------------------
Worldwide 6,577 6,013 5,978 5,825 5,661 5,497 5,318 5,385 5,192 5,227 5,329
====================================================================================
(thousands of barrels daily)
Refinery throughput
United States 988 1,004 994 970 1,017 1,017 950 1,093 1,055 1,066 1,116
Canada 433 424 428 416 399 419 484 486 351 354 333
Europe 1,522 1,416 1,503 1,492 1,489 1,490 1,425 1,387 1,335 1,264 1,227
Asia-Pacific 733 697 633 619 602 556 586 556 522 426 429
Other Non-U.S. 116 118 122 119 112 103 101 102 105 101 98
------------------------------------------------------------------------------------
Worldwide 3,792 3,659 3,680 3,616 3,619 3,585 3,546 3,624 3,368 3,211 3,203
====================================================================================
Petroleum product sales
United States 1,261 1,198 1,196 1,152 1,203 1,210 1,109 1,147 1,113 1,057 1,106
Canada 542 526 520 517 513 527 597 625 433 430 396
Latin America 437 441 426 422 411 391 384 383 386 388 380
Europe 1,925 1,869 1,898 1,872 1,847 1,863 1,796 1,718 1,680 1,634 1,636
Asia-Pacific and other Eastern Hemisphere 1,046 1,042 988 962 935 878 869 847 784 619 607
------------------------------------------------------------------------------------
Worldwide 5,211 5,076 5,028 4,925 4,909 4,869 4,755 4,720 4,396 4,128 4,125
====================================================================================
Aviation fuels 442 414 403 379 376 372 382 382 344 338 317
Gasoline, naphthas 1,939 1,903 1,849 1,818 1,822 1,821 1,742 1,708 1,572 1,488 1,461
Heating oils, kerosene, diesel oils 1,718 1,655 1,644 1,569 1,557 1,561 1,491 1,498 1,424 1,344 1,365
Heavy fuels 498 488 530 558 546 535 543 507 466 419 463
Specialty petroleum products 614 616 602 601 608 580 597 625 590 539 519
------------------------------------------------------------------------------------
Worldwide 5,211 5,076 5,028 4,925 4,909 4,869 4,755 4,720 4,396 4,128 4,125
====================================================================================
(thousands of metric tons)
Chemical prime product sales 15,712 14,377 13,969 13,393 13,463 12,560 12,453 12,324 12,152 11,613 10,568
====================================================================================
(millions of metric tons)
Coal production 15 16 36 36 37 39 40 36 32 30 27
====================================================================================
(thousands of metric tons)
Copper production 203 202 191 183 133 108 112 119 134 101 79
====================================================================================
</TABLE>
Operating statistics include 100 percent of operations of majority-owned
subsidiaries; for other companies, gas, crude production, petroleum product, and
chemical prime product sales include Exxon's ownership percentage, and refining
throughput includes quantities processed for Exxon. Net production excludes
royalties and quantities due others when produced, whether payment is made in
kind or cash.
F27
<PAGE>
EXHIBIT 21
Subsidiaries of the Registrant (1), (2) and (3)
AT DECEMBER 31, 1996
<TABLE>
<CAPTION>
PERCENTAGE OF
VOTING SECURITIES
OWNED BY STATE OR
IMMEDIATE COUNTRY OF
PARENT(S) ORGANIZATION
----------------- ------------
<S> <C> <C>
Ancon Insurance Company, Inc. ................... 100 Vermont
Esso Australia Resources Ltd. ................... 100 Delaware
Delhi Petroleum Pty. Ltd. ...................... 100 Australia
Esso Eastern Inc. ............................... 100 Delaware
Esso Malaysia Berhad............................ 65 Malaysia
Esso Production Malaysia Inc. .................. 100 Delaware
Esso Sekiyu Kabushiki Kaisha.................... 100 Japan
Esso Singapore Private Limited.................. 100 Singapore
Esso (Thailand) Public Company Limited.......... 87.5 Thailand
Exxon Energy Limited............................ 100 Hong Kong
Exxon Trading Asia Pacific Private Limited...... 100 Singapore
Exxon Yemen Inc................................. 100 Delaware
General Sekiyu K.K.(5)(6)....................... 49 Japan
Tonen Kabushiki Kaisha(5)....................... 25 Japan
Esso Italiana S.p.A.(7).......................... 100 Italy
Esso Standard Oil S.A. Limited................... 100 Bahamas
Exxon Asset Management Company................... 75.5 Delaware
Exxon Capital Holdings Corporation............... 100 Delaware
Exxon Capital Corporation....................... 100 New Jersey
Exxon Capital Investment, Inc................. 100 Delaware
Exxon Chemical Asset Management Partnership(8)... 100 Delaware
Exxon Mobile Bay Limited Partnership(9)......... 100 Delaware
Paxon Polymer Company, L.P. II(10)............ 100 Delaware
Exxon Chemical Eastern Inc....................... 100 Delaware
Exxon Chemical Asia Private Limited............. 100 Singapore
Exxon Chemical Singapore Private Limited........ 100 Singapore
Singapore Aromatics Company Private (5)....... 50 Singapore
Exxon Chemical HDPE Inc. ........................ 100 Delaware
Exxon Coal USA, Inc. ............................ 100 Delaware
Exxon Credit Corporation......................... 100 Delaware
</TABLE>
1
<PAGE>
<TABLE>
<CAPTION>
PERCENTAGE OF
VOTING SECURITIES
OWNED BY
IMMEDIATE STATE OR COUNTRY OF
PARENT(S) ORGANIZATION
----------------- --------------------
<S> <C> <C>
Exxon International Holdings, Inc................................ 100 Delaware
Esso Aktiengesellschaft(11)..................................... 100 Germany
BRIGITTA Erdgas und Erdoel GmbH, Hannover(4)(5)............... 50 Germany
Elwerath Erdgas und Erdoel GmbH, Hannover(4)(5)............... 50 Germany
Mineraloelraffinerie Oberrhein GmbH & Co. KG(5)............... 25 Germany
Esso Austria Aktiengesellschaft(12)............................. 100 Austria
Esso Exploration and Production Norway AS....................... 100 Norway
Esso Holding Company Holland Inc................................ 100 Delaware
Esso Holding B.V.............................................. 100 Netherlands/Delaware
Esso N.V./S.A. (13).......................................... 100 Belgium/Delaware
Exxon Chemical Antwerp Ethylene N.V. (14).................... 100 Belgium
Fina Antwerp Olefins N.V.(5)................................ 35 Belgium
Esso Nederland B.V............................................ 100 Netherlands
Exxon Chemical Holland Inc.................................... 100 Delaware
Exxon Chemical Holland B.V................................... 100 Netherlands
N. V. Nederlandse Gasunie(5).................................. 25 Netherlands
Nederlandse Aardolie Maatschappij B.V. (4)(5)................. 50 Netherlands
Esso Holding Company U.K. Inc................................... 100 Delaware
Esso UK plc................................................... 100 England
Esso Exploration and Production UK Limited................... 100 England
Esso Petroleum Company, Limited.............................. 100 England
Exxon Chemical Limited........................................ 100 England
Exxon Chemical Olefins Inc.................................... 100 Delaware
Esso Norge AS................................................... 100 Norway
Esso Sociedad Anonima Petrolera Argentina....................... 100 Argentina
Esso Societe Anonyme Francaise.................................. 81.548 France
Esso (Switzerland).............................................. 100 Switzerland
Exxon Land Development, Inc...................................... 100 Arizona
Exxon Minerals International Inc................................. 100 Delaware
Compania Minera Disputada de Las Condes S.A..................... 99.9252 Chile
Exxon Overseas Corporation....................................... 100 Delaware
Exxon Chemical Arabia Inc....................................... 100 Delaware
Al-Jubail Petrochemical Company(4)(5)......................... 50 Saudi Arabia
Exxon Overseas Investment Corporation........................... 100 Delaware
Exxon Equity Holding Company.................................. 100 Delaware
Exxon Financial Services Company Limited...................... 100 Bahamas
Exxon Ventures Inc............................................ 100 Delaware
Exxon Azerbaijan Limited..................................... 100 Bahamas
Mediterranean Standard Oil Co................................... 100 Delaware
Esso Trading Company of Abu Dhabi............................. 100 Delaware
Exxon Pipeline Holdings, Inc..................................... 100 Delaware
Exxon Pipeline Company.......................................... 100 Delaware
Exxon Rio Holding Inc............................................ 100 Delaware
Esso Brasileira de Petroleo Limitada(15)........................ 100 Brazil
Exxon Sao Paulo Holding Inc...................................... 100 Delaware
Imperial Oil Limited............................................. 69.6 Canada
International Colombia Resources Corporation(16)................. 100 Delaware
SeaRiver Maritime Financial Holdings, Inc........................ 100 Delaware
SeaRiver Maritime, Inc.......................................... 100 Delaware
Societe Francaise EXXON CHEMICAL................................. 99.359 France
Exxon Chemical France........................................... 100 France
Exxon Chemical Polymeres SNC(17)................................ 100 France
</TABLE>
2
<PAGE>
- - ---------------------
NOTES:
(1) For purposes of this list, if the registrant owns directly or indirectly
approximately 50 percent of the voting securities of any person and
approximately 50 percent of the voting securities of such person is owned
directly or indirectly by another interest, or if the registrant includes
its share of net income of any other unconsolidated person in
consolidated net income, such person is deemed to be a subsidiary.
(2) With respect to certain companies, shares in names of nominees and
qualifying shares in names of directors are included in the above
percentages.
(3) The names of other subsidiaries have been omitted from the above list
since considered in the aggregate, they would not constitute a
significant subsidiary.
(4) The registrant owns directly or indirectly approximately 50 percent of
the securities of this person and approximately 50 percent of the voting
securities of this person is owned directly or indirectly by another
single interest.
(5) The investment in this unconsolidated person is represented by the
registrant's percentage interest in the underlying net assets of such
person.
(6) Dual ownership; of the 49%, 47.468% is owned by Esso Eastern Inc. and
1.532% is owned by Esso Sekiyu Kabushiki Kaisha.
(7) Dual ownership; of the 100%, 90% is owned by Exxon Corporation and 10% by
Exxon Overseas Corporation.
(8) Dual ownership; of the 100%, 68.4% is owned by Exxon Corporation and
31.6% is owned by Exxon Asset Management Company.
(9) Dual ownership; of the 100%, 81.4% is owned by Exxon Chemical Asset
Management Partnership and 18.6% is owned by Exxon Corporation.
(10) Dual ownership; of the 100%, 98% is owned by Exxon Mobile Bay Limited
Partnership and 2% is owned by Exxon Chemical HDPE Inc.
(11) Dual ownership; of the 100%, 99.998% is owned by Exxon International
Holdings, Inc. and 0.002% is owned by Exxon Corporation.
(12) Dual ownership; of the 100%, 99.9996% is owned by Exxon International
Holdings, Inc. and 0.0004% is owned by Exxon Corporation.
(13) Dual ownership; of the 100%, 99.99997% is owned by Esso Holding B.V. and
0.00003% is owned by Exxon Chemical Holland Inc.
(14) Dual ownership; of the 100%, 99.9994% is owned by Esso Holding B.V. and
0.0006% is owned by Exxon Chemical Holland Inc.
(15) Dual ownership; of the 100%, 90% is owned by Exxon Rio Holding Inc. and
10% is owned by Exxon Sao Paulo Holding Inc.
(16) Dual ownership; of the 100%, 55% is owned by Exxon Corporation and 45% is
owned by Esso Holding Company Holland Inc.
(17) Dual ownership; of the 100%, 98% is owned by Societe Francaise EXXON
CHEMICAL and 2% is owned by Exxon Chemical France.
3
<TABLE> <S> <C>
<PAGE>
<ARTICLE> 5
<LEGEND>
THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM EXXON'S
CONSOLIDATED BALANCE SHEET AT DECEMBER 31, 1996, EXXON'S CONSOLIDATED STATEMENT
OF INCOME FOR THE YEAR 1996 AND THE RELATED NOTES TO THESE CONSOLIDATED
FINANCIAL STATEMENTS, THAT ARE CONTAINED IN EXXON'S 1996 ANNUAL REPORT ON FORM
10-K. THE SCHEDULE IS QUALIFIED IN ITS ENTIRETY BY REFERENCE TO SUCH FINANCIAL
STATEMENTS.
</LEGEND>
<MULTIPLIER> 1,000,000
<S> <C>
<PERIOD-TYPE> 12-MOS
<FISCAL-YEAR-END> DEC-31-1996
<PERIOD-END> DEC-31-1996
<CASH> 2,951
<SECURITIES> 18
<RECEIVABLES> 8,074
<ALLOWANCES> 98
<INVENTORY> 5,285
<CURRENT-ASSETS> 19,910
<PP&E> 126,366
<DEPRECIATION> 59,759
<TOTAL-ASSETS> 95,527
<CURRENT-LIABILITIES> 19,505
<BONDS> 7,236
0
303
<COMMON> 2,822
<OTHER-SE> 40,417
<TOTAL-LIABILITY-AND-EQUITY> 95,527
<SALES> 131,543
<TOTAL-REVENUES> 134,249
<CGS> 56,406
<TOTAL-COSTS> 56,406
<OTHER-EXPENSES> 19,347
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 464
<INCOME-PRETAX> 11,916
<INCOME-TAX> 4,406
<INCOME-CONTINUING> 7,510
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 7,510
<EPS-PRIMARY> 6.02
<EPS-DILUTED> 0
</TABLE>
