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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 No Fee Required
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 No Fee Required
For the transition period from to .
Commission file number: 1-170-2
Amoco Corporation
(Exact name of registrant as specified in its charter)
Indiana 36-1812780
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
200 East Randolph Drive, Chicago, Illinois 60601
(Address of principal executive offices) (Zip Code)
Registrant's telephone number including area code: (312) 856-6111
Securities registered pursuant to Section 12(b) of the Act:
Name of each exchange
Title of each class on which registered
Common Stock, without par value New York, Chicago,
Pacific, Toronto, and
Swiss Stock Exchanges
Guarantee of Amoco Company:
8 5/8% Debentures Due 2016 New York Stock Exchange
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, 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
Aggregate market value of voting stock held by non-affiliates
as of January 31, 1997, based on a closing price of $87 was
approximately $43,359,000,000.
Number of common shares outstanding as of January 31, 1997,
was 496,644,139 shares.
DOCUMENTS INCORPORATED BY REFERENCE
Proxy Statement dated March 10, 1997.
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AMOCO CORPORATION
INDEX
Page
PART I
Items 1. and 2. Business and Properties ..................... 3
Exploration and Production ................................ 3
Reserves .................................................. 10
Oil and Gas Sales Commitments ............................. 11
Supply and Marketing of NGL ............................... 12
Refining .................................................. 12
Transportation ............................................ 13
Marketing of Petroleum Products ........................... 13
Chemicals ................................................. 14
Other Operations .......................................... 16
Research .................................................. 16
Employees ................................................. 17
Competition ............................................... 17
Government Regulation ..................................... 17
Environmental Protection .................................. 18
Executive Officers of the Registrant ...................... 20
Item 3. Legal Proceedings ................................... 21
Item 4. Submission of Matters to a Vote of Security Holders . 22
PART II
Item 5. Market for the Registrant's Common Stock and
Related Stockholder Matters ................................ 23
Item 6. Selected Financial Data ............................. 24
Item 7. Management's Discussion and Analysis of Financial
Condition and Results of Operations ........................ 25
Item 8. Financial Statements and Supplemental Information ... 37
Item 9. Changes in and Disagreements with Accountants on
Accounting and Financial Disclosure ........................ 84
PART III
Item 10. Directors and Executive Officers of the Registrant . 84
Item 11. Executive Compensation ............................. 84
Item 12. Security Ownership of Certain Beneficial Owners and
Management ................................................. 84
Item 13. Certain Relationships and Related Transactions ..... 84
PART IV
Item 14. Exhibits, Financial Statement Schedules, and
Reports on Form 8-K ........................................ 85
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AMOCO CORPORATION
PART I
Items 1. and 2. Business and Properties
Amoco Corporation was incorporated in Indiana in 1889 and has
its principal executive offices at 200 East Randolph Drive,
Chicago, Illinois 60601. Amoco Corporation is a parent corporation
concerned with overall policy guidance, financing, coordination of
operations, staff services, performance evaluation and planning for
its subsidiaries.
Amoco Corporation and its consolidated subsidiaries (herein
collectively also called "Amoco" or the "Corporation") form a large
integrated petroleum and chemical enterprise. There are three
principal wholly owned subsidiaries. These subsidiaries and the
businesses in which they are engaged are summarized below:
Amoco Production Company .. Exploration, development and
production of crude oil,
natural gas, and natural gas
liquids("NGL"), and marketing
of natural gas and NGL.
Amoco Oil Company ......... Refining, marketing and
transporting of petroleum and
related products.
Amoco Chemical Company .... Manufacture and sale of
chemical products.
Amoco Company, a wholly owned subsidiary of Amoco Corporation,
is the holding company for substantially all petroleum and chemical
operating subsidiaries except Amoco Canada Petroleum Company Ltd.
("Amoco Canada"), which is wholly owned by Amoco Corporation, and
selected other activities. Amoco Corporation has guaranteed the
outstanding public debt obligations of Amoco Company. Amoco
Corporation and Amoco Company have guaranteed the notes and
debentures of Amoco Canada. See Note 9 to the Consolidated
Financial Statements. Summarized financial information relating to
Amoco Company and Amoco Canada is disclosed in Note 22 to the
Consolidated Financial Statements.
Selected financial information by industry segment and
geographic area for the three years ended December 31, 1996, is
presented in Note 23 to the Consolidated Financial Statements.
WORLDWIDE OPERATIONS
Exploration and Production
Amoco is engaged in exploration for crude oil and natural gas
in onshore and offshore areas of the United States, Canada and
various countries outside North America. United States offshore
efforts are conducted primarily in the Gulf of Mexico in both
shallow and deep water. Foreign exploration activities are carried
out primarily in the Alberta Basin of Canada, the North Sea (United
Kingdom, Norway and the Netherlands), the Gulf of Suez and Nile
Delta (Egypt), West Africa (Angola and Nigeria), Caspian Sea
(Azerbaijan), South America (Colombia and Venezuela) and Trinidad.
Amoco's U.S. production of crude oil, condensate, NGL, and
natural gas is principally in the states of Alaska, Colorado,
Kansas, Louisiana, New Mexico, Oklahoma, Texas, Utah, Wyoming and
offshore in the Gulf of Mexico. Principal foreign oil and gas
production is located in Argentina, Canada, China, Egypt, the
Netherlands, Norway, Sharjah, Trinidad and the United Kingdom.
Worldwide net production of liquid hydrocarbons in 1996
averaged 662,000 barrels per day, slightly higher than 1995. U.S.
liquids production averaged 297,000 barrels per day in 1996, as
higher NGL production offset declining crude oil production.
Worldwide net production of natural gas increased 143 million cubic
feet ("mmcf") per day in 1996 and averaged 4,382 mmcf per day for
the year. In the United States, natural gas production increased
five percent to average 2,572 mmcf per day.
Amoco's net production of oil and gas for the three years
ended December 31, 1996, which includes applicable volumes produced
under service contracts and production sharing agreements in
certain foreign countries, is summarized below:
United
States Canada Europe Other Worldwide
Crude oil and natural gas
liquids* (thousands of
barrels per day)
1996 ................... 297 61 60 244 662
1995 ................... 295 66 64 235 660
1994 ................... 292 73 66 237 668
Natural gas (millions of
cubic feet per day)
1996 ................... 2,572 815 386 609 4,382
1995 ................... 2,453 842 363 581 4,239
1994 ................... 2,520 821 335 552 4,228
*U.S. production includes NGL from processing plants in which Amoco
has an ownership interest of 66, 64 and 55 thousands of barrels per
day for the years 1996, 1995 and 1994, respectively.
At year-end 1996, Amoco owned entirely or had an ownership
interest in 47 natural gas processing plants in the United States,
of which it was the operator for 27.
Amoco continued optimization of production from existing
waterflood and improved oil recovery operations in 1996. These
projects are predominately located in the Permian Basin of west
Texas and New Mexico and in Colorado and Wyoming. Collectively
these areas account for approximately 70 percent of Amoco's U.S.
net crude and condensate production.
In early 1997, Amoco and Shell Oil Company completed the
formation of Altura Energy Ltd., a partnership combining their
assets in the Permian Basin area of west Texas and southeast New
Mexico. The partnership is designed to reduce costs and capitalize
on economies of scale. Amoco will receive about 115,000 barrels
of oil equivalent per day from its approximately 64 percent
interest in the combined assets.
After conducting several pilot tests of its proprietary
technology in enhanced coalbed methane ("ECBM"), Amoco continued
with its Tiffany ECBM project. Tiffany, the first Amoco full-scale
commercial ECBM project, is located in southwestern Colorado.
Initial nitrogen injection is scheduled for mid-1997.
Capitalizing on recent advances in 3-D seismic technology,
Amoco drilled 13 consecutive producing wells in the Tuscaloosa
trend of Louisiana. Net proved reserves of 340 billion cubic feet
("bcf") of natural gas and production of 70 mmcf per day of natural
gas were added with these wells. Development of Amoco's holdings in
this trend is anticipated to continue through the turn of the
century.
Amoco maintained production and drilling operations in the
U.S. Gulf of Mexico shelf area at approximately the same levels as
1995. During 1996, Amoco drilled or participated in the drilling of
23 development and extension wells in the Gulf of Mexico, of which
21 were producers. The installation of the platform and facilities
for the subsalt Mahogany field (outside operated) was completed in
1996 and first production occurred in December. Completion and
hook up of additional wells will continue into the first half of
1997.
In the Gulf of Mexico deepwater area, development of the Ram-
Powell field continued with pre-drilling of four development wells
and continued work on the fabrication of the tension leg-platform
hull and topsides. Amoco's share of total development expenses
throughout the project life is estimated at $260 million. First
production is expected to occur in the fourth quarter of 1997.
Development of Marlin, the first Amoco operated deepwater
field, was approved in 1996. Marlin is 125 miles southeast of New
Orleans in 3,240 feet of water and will be developed using a
tension leg platform. Construction and drilling operations will
begin in mid-1997 with production expected by 1999. Appraisal work
continues on nearby acreage. Amoco expects to maintain an active
deepwater exploration program in 1997.
During 1996, Amoco acquired properties in the San Juan Basin
and in the Gulf of Mexico. These acquisitions increased natural
gas production by approximately 45 mmcf per day and strengthened
Amoco's holdings in two core operating areas in the United States.
Divestitures in Michigan, south Texas, and the outer-continental
shelf of the Gulf of Mexico were consummated in the last half of
1996.
In Canada, Amoco divested its remaining interest in Crestar
Energy Inc., as well as its conventional oil properties in the Swan
Hills area and other non-core oil and gas properties in western
Canada. Proceeds are being used to maintain natural gas production,
and fund heavy oil growth in the Primrose and Wabasca areas of
Alberta and exploration off the coast of Newfoundland.
In Colombia, Amoco initiated construction of a pipeline and
facilities necessary to begin natural gas sales from its Opon field
discovery. Net sales of approximately 30 mmcf per day of natural
gas will begin in 1997 to Ecopetrol, the Colombian national oil
company. By late 1997, Amoco is expected to supply as much as 18
mmcf per day of natural gas to the 200 megawatt Termo Santander
power station being built by Amoco Power Resources Corporation.
In China, production commenced in March from the Liuhua field
located in the South China Sea. Amoco combined proved techniques,
innovative new technologies and teamwork to complete the project.
This technological achievement has been recognized throughout the
industry and Amoco will be receiving the 1997 Offshore Technology
Conference's "Distinguished Achievement Award" for the Liuhua
development project. This award recognizes Amoco's ability to use
innovative techniques to blend subsea production systems with
floating production, storage and offloading systems.
In Egypt, continued exploration success established the Nile
Delta as a world-class natural gas basin. With Agip and the
Egyptian General Petroleum Company ("EGPC"), Amoco - with about 25
percent net interest - completed six commercial discoveries in
1996. Plans are proceeding with initial sales to the local
Egyptian market. Amoco also signed a memorandum of understanding
for the export of liquefied natural gas ("LNG") from the Nile Delta
to Turkey. The memorandum calls for the formation of a joint
venture by Amoco and EGPC to develop, construct and operate an LNG
plant on the Egyptian coast.
In the Netherlands, Amoco completed the conversion of an
existing natural gas field into an underground storage reservoir to
supply natural gas to consumers in times of peak demand. Natural
gas injection into the reservoir began in November with first
deliveries expected in the winter of 1997.
In Norway, Amoco completed the construction of a wellhead
protector platform and connected it to the existing facilities at
the Valhall field. Production commenced from the new platform in
the second quarter of 1996. This facility should increase gross
production from this field by 85 million barrels of crude oil and
150 bcf of natural gas.
In the United Kingdom, two new fields, Arkwright and Telford
came on stream in the fourth quarter of 1996, and averaged
additional net production of about 12,000 barrels of oil equivalent
per day.
Also in the United Kingdom, natural gas sales were contracted
to the first customers of Beacon Gas Limited ("Beacon"). Amoco
holds a 50 percent interest in Beacon which is a joint venture
formed to sell natural gas directly to consumers. In August,
natural gas from the Andrew field in the North Sea began flowing
through the Amoco operated Central Area Transmission System. With
this addition, sixteen fields are now contracted for the entire 1.6
bcf per day capacity of this pipeline system.
In Sharjah, the northern flank of the Sajaa Field was
developed using two multilateral, horizontal wells which resulted
in a sustained five fold increase in production from the wells.
In Trinidad and Tobago, Amoco enjoyed continued success,
adding 2.7 trillion cubic feet of natural gas reserves, 90 million
barrels of crude oil and condensate reserves and completing four
successful exploration wells. A renegotiated natural gas sales
contract provides the opportunity for the Corporation to sell up to
an additional 350 mmcf per day to meet growing island demand with
projected sales reaching 520 mmcf per day by 1999. Amoco is
participating, with a 34 percent ownership interest, in the
construction of a new LNG facility. Amoco is expected to supply 100
percent of the plant's initial natural gas requirements of
approximately 450 mmcf per day beginning in 1999. Amoco is
positioned to supply additional gas as the LNG facility is
expanded.
In Bolivia, Amoco was successful in December in a competitive
bid for operatorship and 50 percent ownership in a new Bolivian
company, Empresa Petrolera Chaco, which was formed by the partial
privatization of the state-owned oil and gas company, Yacimientos
Petroliferos Fiscales Bolivianos. Amoco will pre-fund $307 million
of expenditures in the new company, which has estimated proved
reserves of 1.4 trillion cubic feet of natural gas and 35 million
barrels of crude oil. Existing hydrocarbon reserves and production
are expected to increase with planned future investments and
application of advanced geoscience and engineering technology.
Amoco will assume operatorship of this company upon signing of the
final contracts, which is expected to occur in the first half of
1997.
In Venezuela, two successful wildcat wells were drilled and
tested in the Jusepin area, where the Corporation holds a 45
percent working interest in an operating services agreement. Early
production in the Jusepin area is expected by the end of March,
with full production of 14,000 barrels per day anticipated by the
end of the year. During Venezuela's first exploration bid round in
1996, Amoco captured interest in two areas. The Corporation
operates and holds a 100 percent interest in the Punta Pescador
area and holds a nonoperating 37.5 percent interest in the
Guarapiche area. These properties lie in highly prospective
portions of eastern Venezuela. While currently in the seismic
acquisition phase of both projects, drilling is scheduled to begin
in the Guarapiche area in late 1997 and in the Punta Pescador area
in early 1998.
In Azerbaijan, Amoco with a 17 percent working interest is one
of the leading companies in the development of the Azeri, Chirag
and Gunashli fields located in the Caspian Sea. Reserves are
anticipated to be four billion barrels of crude oil with a gross
investment of $8 billion. Since the production sharing contract
was ratified in 1994, the Azerbaijan International Operating
Company ("AIOC") was formed to implement the minimum work program
and field development. Major developments in 1996 included:
progress on facilities related to the first phase of production,
with production expected to begin in late 1997; and securing the
western pipeline route which is planned for the second phase of
production.
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Average sales prices (including transfers) and production
costs per unit of oil and gas produced, for the three years ended
December 31, 1996, are as follows:
United
States Canada Europe Other
1996
Average sales prices:
Crude oil (per barrel) ..... $20.21 $17.73 $20.94 $19.30
Natural gas liquids
(per barrel) ............... $13.95 $13.73 $ -- $ --
Natural gas (per thousand
cubic feet, "mcf") ......... $ 1.93 $ 1.15 $ 2.47 $ 1.17
Average production costs (per
equivalent barrel) (*) ...... $ 3.77 $ 3.38 $ 6.23 $ 4.58
1995
Average sales prices:
Crude oil (per barrel) ..... $16.02 $15.15 $17.18 $16.02
Natural gas liquids
(per barrel) ............... $10.00 $ 9.71 $ -- $ --
Natural gas (per mcf)....... $ 1.35 $ .89 $ 2.45 $ 1.11
Average production costs (per
equivalent barrel) (*) ...... $ 3.54 $ 3.29 $ 5.59 $ 3.93
1994
Average sales prices:
Crude oil (per barrel) ..... $14.82 $13.38 $15.49 $14.23
Natural gas liquids
(per barrel) ............... $ 9.39 $ 8.75 $ -- $ --
Natural gas (per mcf) ...... $ 1.66 $ 1.39 $ 2.23 $ .89
Average production costs (per
equivalent barrel) (*) ...... $ 3.89 $ 3.62 $ 6.62 $ 3.84
(*) Production costs are shown on a dollar-per-barrel basis after
converting natural gas into equivalent barrel units. Natural
gas was converted on the basis of approximate relative energy
content.
Reported average sales prices represent recorded revenues for
oil and gas production quantities sold or transferred. In some
cases, particularly in overseas areas, recorded revenues reflect
adjustments for royalties, net profits interests, and other
contractual provisions. Accordingly, the reported per barrel
figures do not necessarily represent actual average prices at which
sales and transfer transactions occurred. Production costs include
costs involved in lifting oil or gas to the surface and in
gathering, treating, field processing and field storage. Such costs
include operating labor, repairs and maintenance, materials,
supplies and fuel consumed. Also included are operating costs of
NGL plants.
Data regarding Amoco's exploratory and development drilling
activities during the three years ended December 31, 1996, are
summarized below:
United World-
States Canada Europe Other wide
1996
Net exploratory wells:
Productive .......... 51 45 -- 13 109
Dry ................. 78 20 5 6 109
Total .............. 129 65 5 19 218
Net development wells:
Productive .......... 273 169 5 112 559
Dry ................. 32 22 -- 6 60
Total .............. 305 191 5 118 619
Total net wells .... 434 256 10 137 837
1995
Net exploratory wells:
Productive .......... 53 71 -- 4 128
Dry ................. 47 24 4 8 83
Total .............. 100 95 4 12 211
Net development wells:
Productive .......... 348 168 6 127 649
Dry ................. 20 10 -- 4 34
Total .............. 368 178 6 131 683
Total net wells .... 468 273 10 143 894
1994
Net exploratory wells:
Productive .......... 43 39 -- 11 93
Dry ................. 12 16 8 9 45
Total .............. 55 55 8 20 138
Net development wells:
Productive .......... 457 114 2 98 671
Dry ................. 15 14 -- 10 39
Total .............. 472 128 2 108 710
Total net wells .... 527 183 10 128 848
Shown below are wells in process of being drilled at
December 31, 1996:
United World-
States Canada Europe Other wide
Gross wells ...... 123 6 5 21 155
Net wells ........ 60 3 2 16 81
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The number of wells owned by Amoco at December 31, 1996, were
as follows:
United World-
States Canada Europe Other wide
Gross wells owned:
Oil wells ...... 21,707 3,885 222 2,618 28,432
Gas wells ...... 14,684 1,731 140 99 16,654
Total ........ 36,391 5,616 362 2,717 45,086
Net wells owned:
Oil wells ...... 7,622 2,105 80 2,591 12,398
Gas wells ...... 8,909 1,170 34 62 10,175
Total ........ 16,531 3,275 114 2,653 22,573
Multiple completion wells included above:
Gross wells .... 1,644 213 -- -- 1,857
Net wells ...... 793 160 -- -- 953
Amoco's proved and unproved acreage holdings, including
acreage held under reservations, permits, options or similar
arrangements at December 31, 1996, are summarized below:
United World-
States Canada Europe Other wide
(thousands of acres)
Gross acres:
Proved ................ 5,401 2,211 739 951 9,302
Unproved .............. 11,962 4,693 11,803 43,180 71,638
Reservations, permits,
options, etc. ......... 219 3,431 -- -- 3,650
Total .............. 17,582 10,335 12,542 44,131 84,590
Net acres:
Proved ................ 2,373 1,233 212 431 4,249
Unproved .............. 5,041 2,403 5,406 23,458 36,308
Reservations, permits,
options, etc. ......... 66 2,406 -- -- 2,472
Total .............. 7,480 6,042 5,618 23,889 43,029
Reserves
This section should be read in conjunction with data on
reserves presented in "Supplemental Information" to the
Consolidated Financial Statements.
Amoco replaced 180 percent of its production on an oil-energy
equivalent basis during 1996, excluding ownership changes.
Including the sales and purchases of properties, which primarily
involved sales of interests in Canada, the production replacement
rate was 165 percent. The tables in the "Supplemental Information"
section set forth, by geographic area, net proved reserves as of
December 31, 1996, 1995, 1994, and 1993 including reserves in which
Amoco holds economic interest under production sharing and other
types of operating agreements with foreign governments. Adding to
1996 reserves were discoveries and extensions in Canada and
Trinidad and booking of additional crude oil reserves associated
with Amoco's 17 percent interest in a contract signed with the
Azerbaijan government covering three fields in the Caspian Sea.
Improved recovery additions in Canada, Egypt, the United Kingdom,
Norway, Trinidad and the United States were also significant.
Downward revisions of natural gas reserves occurred in the United
States and Canada. As of March 1, 1997, no major discovery or
significant event had occurred that would have a material effect on
the estimated proved reserves reported at December 31, 1996.
Shown below are estimated proved reserves as of December 31,
1996 and 1995:
Crude Oil &
NGL Natural Gas
(millions of (billions of
barrels) cubic feet)
Net proved reserves:
December 31, 1996 ........... 2,423 20,346
December 31, 1995 ........... 2,322 19,153
Net proved developed reserves:
December 31, 1996 ........... 1,882 14,166
December 31, 1995 ........... 1,918 15,441
Amoco has been required to file certain oil and gas reserve
information with various governmental agencies and committees,
including the Department of Energy ("DOE"), in connection with a
variety of matters. Reserve estimates furnished to such authorities
or agencies were determined on the same basis as the estimates
contained herein, except for differences in format and definition
as prescribed by the requesting authority.
Oil and Gas Sales Commitments
Amoco sells gas from its producing operations under a variety
of contractual arrangements. Amoco has several gas sales contracts
that specify obligations to make available fixed and determinable
quantities. Amoco has 51 such contracts in the United States which,
as of December 31, 1996, provide for the potential future delivery
over the next three years of 668 bcf of natural gas. Amoco expects
this commitment to be fulfilled from proved reserves. Amoco (U.K.)
Exploration Company has a gas contract with Teesside Power Limited
which provides deliveries of approximately 57 bcf of natural gas
over a three-year period as of December 31, 1996. Amoco expects
this commitment to be fulfilled from reserves currently being
developed. During 1996 Amoco Trinidad Oil Company entered into a
long-term natural gas sales contract with Atlantic LNG Company.
Deliveries will commence in 1999 and are expected to approximate 79
bcf of natural gas in that year. Amoco expects this commitment to
be fulfilled from reserves currently being developed. Amoco Canada
has 19 outstanding natural gas contracts as of December 31, 1996.
Over the next three years, deliveries under these contracts total
approximately 400 bcf of natural gas, which Amoco anticipates will
be fulfilled from proved reserves.
Satisfying Amoco's obligations under sales contracts that
specify fixed and determinable quantities is not expected to have a
material adverse effect on Amoco's operations or earnings. These
contracts do not limit potential gains due to future increases in
market prices since essentially all are based on market postings,
an index basis, are negotiated annually, or are converted from
fixed prices to market prices through the use of swaps (see Note 4
to the Consolidated Financial Statements).
Supply and Marketing of NGL
In Canada, Amoco is engaged in the wholesale marketing of NGL,
which consists of ethane, propane, butanes and pentanes extracted
from natural gas. The majority of Amoco's NGL is marketed on a
wholesale basis under annual supply contracts which provide for
price redetermination based on prevailing market prices. Sales
volumes of NGL for 1996, 1995 and 1994 averaged 200,000 barrels per
day, 204,000 barrels per day and 173,000 barrels per day,
respectively.
Refining
Amoco owns and operates five refineries in the United States.
The daily operable capacity of these refineries in 1996 is shown
below:
Daily
Operable
Capacity
Location of Refinery (barrels)
Texas City, Texas ........................... 433,000
Whiting, Indiana ............................ 410,000
Mandan, North Dakota ........................ 58,000
Yorktown, Virginia .......................... 57,000
Salt Lake City, Utah ........................ 51,000
Total ............................. 1,009,000
Daily input to crude units averaged 954,000 barrels in 1996,
926,000 barrels in 1995 and 959,000 barrels in 1994. Crude unit
utilization was 94.6 percent in 1996 compared with 92.8 percent in
1995. The improvement compared with 1995 reflected continuing
improvements in equipment reliability and optimization, as well as
reduced crude unit planned maintenance. Refinery investments
focused on chemical feedstock production, sustaining reliable
operations, increasing crude flexibility, and environmental
compliance.
Transportation
Amoco operates extensive transportation facilities for crude
oil, refined products, NGL, CO2 and petrochemical feedstocks in the
United States. Crude oil is transported from most of the oil-
producing areas of the continental United States to refining
centers in the Rocky Mountain, midwestern and southwestern states.
The crude oil system delivers directly to 11 refineries, four of
which are owned by Amoco. Indirectly, the system serves some 35
refineries of other companies through connecting common carrier
pipelines. In addition, the common carrier refined petroleum
product system is connected to three refineries. Chemical feedstock
lines receive product directly from Amoco refineries and other
Amoco plants, and deliver directly to various plants. NGL is
gathered and then transported through a system of owned, partially
owned and common carrier pipelines in Canada and the United States.
In total, Amoco's pipeline network in North America aggregates
16,388 miles, consisting of 2,946 miles of gathering lines and
13,442 miles of trunk lines. In 1996, shipments through Amoco's
pipeline system in North America totaled 412 million barrels of
crude oil and 404 million barrels of refined products and
feedstocks.
Minority interests are also owned in 9 other common carrier
pipeline companies, including Amoco's 14.3 percent interest in
Colonial Pipeline Company, a common carrier refined products
pipeline system which runs 1,600 miles from near Houston, Texas, to
the New York City area, and its 10.5 percent interest in Endicott
Pipeline, a crude oil pipeline system which runs from the Beaufort
Sea to the Trans Alaska Pipeline.
In February 1997, a pipeline from Billings, Montana, to Elk
Basin, Wyoming, built as part of a joint venture with Conoco to
ship Canadian crude oil to Salt Lake City and Denver, became
operational. The pipeline will increase the availability of
Canadian crude oil to the Salt Lake City refinery, supporting
refining and marketing plans for the northern Rocky Mountain
states. Also completed in 1996 was a Main Pass crude oil gathering
system in the Gulf of Mexico and a liquefied petroleum gas joint-
venture pipeline from west Texas to Juarez, Mexico. A pipeline from
Casper, Wyoming to Freeman, Missouri was divested during 1996.
Amoco also owns and leases a number of trucks and railcars
which are used to transport crude oil, raw materials, refined
products and chemicals in North America.
As of December 31, 1996, Amoco owned four U.S. Flag tug/barges
and bareboat chartered another tug/barge, giving Amoco an aggregate
of 100 thousand deadweight tonnage ("DWT"). Amoco was also
committed under long-term time charters to three international flag
tankers, totaling 240 thousand DWT. An additional 420 thousand DWT
was time chartered on a short-term basis, of which 51 thousand DWT
was for a U.S. Flag tanker.
Marketing of Petroleum Products
The principal refined products manufactured and marketed by
Amoco are gasolines, diesel fuels, jet fuels, heating oils,
asphalt, residual fuels, motor oils, greases and lubricants. Motor
gasolines, diesel fuels, heating oils and motor oils are sold under
various brand names and trade names, the principal ones of which
include the words AMOCO, PERMALUBE, ULTIMATE, SILVER and in the
midwestern states, STANDARD. Amoco also sells large quantities of
liquefied petroleum gas and NGL, and offers convenience merchandise
and related services to motorists, some of which are marketed under
the CERTICARE and SPLIT SECOND brand names.
In the United States, Amoco's marketing of petroleum products
is concentrated in the midwest, east and southeast. Amoco supplies
about 9,300 gasoline retail outlets, of which approximately 3,000
are either owned or leased. Most of these outlets are independently
operated. Amoco continues to reposition its marketing operations by
acquisitions, asset recapitalization and construction of high
volume facilities, including cobranded sites with retailers such as
McDonald's Corporation. In 1996, petroleum product sales volumes
averaged 1.2 million barrels per day in the United States, an
increase of three percent over 1995. Gasoline sales increased three
percent during 1996 to average 630,000 barrels per day. Distillates
averaged 370,000 barrels per day, about the same as 1995.
U.S. sales volumes of petroleum products for the three years
ended December 31, 1996, are detailed below:
1996 1995 1994
(thousands of barrels per day)
United States:
Gasoline .............. 630 614 612
Distillates ........... 370 366 369
Other products ........ 201 191 196
Total ................ 1,201 1,171 1,177
Chemicals
Amoco produces and markets a variety of petroleum-based
chemicals worldwide. Chemical feedstocks include paraxylene ("PX"),
metaxylene, olefins, and styrene used as raw materials for other
chemical product lines. Chemical intermediates include purified
terephthalic acid ("PTA"), the preferred raw material for the
manufacture of polyester; purified isophthalic acid used for
isopolyester resins and gel coats; trimellitic anhydride used
principally in plasticizers; polybutene used in lubricating oil
additives; dimethyl-2 6-naphthalene dicarboxylate, commonly known
as "NDC", used for photographic film and specialized packaging;
linear alpha-olefins used for detergents and plasticizers; and poly
alpha-olefins used as base stock for synthetic lubricants. Polymers
include polypropylene used for molded products, fibers and films;
engineering polymers used for medical, automotive and electronic
applications; and carbon fibers used in sporting goods and
aerospace applications. Fabrics and fibers are primarily used in
carpet backing and industrial uses such as civil engineering
fabrics and agricultural bagging.
Amoco's principal North American chemical and plastic products
facilities are located at Alvin, Baytown, Deer Park, Pasadena and
Texas City, Texas; Decatur and Roanoke, Alabama; Greenville, Rock
Hill, Seneca, Spartanburg, and the Cooper River plant near Mount
Pleasant, South Carolina; Rocky Mount, North Carolina; Atlanta,
Augusta, Bainbridge, Hazlehurst and Nashville, Georgia; Joliet,
Illinois; Afton, Virginia; Marietta, Ohio; Hawkesbury and
Brantford, Ontario and Matehuala, Mexico.
A wholly owned chemical plant at Geel, Belgium manufactures
PTA, PIA and polypropylene. Facilities for the fabrication of
carpet backing and industrial cloth from polypropylene are located
in the United Kingdom, Germany, Australia and Brazil. Linear alpha-
olefins and poly alpha-olefins are processed at a plant in Feluy,
Belgium.
In 1996, Amoco began operations at its 500,000 tons-per-year
wholly owned PTA plant in Kuantan, Malaysia. Amoco continued
construction of the 350,000 tons-per-year joint-venture PTA plant
in Merak, Indonesia; startup is scheduled this year. Amoco also
holds a 40 percent direct interest in an aromatics complex in
Singapore. This joint venture, Singapore Aromatics Company,
includes paraxylene capacity of 350,000 tons per year and began
commercial production in January 1997.
Amoco also holds a 50 percent interest in a fabrics plant in
China; a 50 percent interest in an isophthalic acid plant in Japan;
and the following interests in PTA plants: 49 percent in Brazil;
50 percent in Taiwan; 35 percent in South Korea; and 9 percent in
Mexico.
The following table sets forth chemical segment revenues for
the three years ended December 31, 1996:
1996 1995 1994
(millions of dollars)
Chemical feedstocks ...... $ 745 $ 704 $ 531
Chemical intermediates ... 2,533 2,622 1,791
Polymers ................. 938 890 697
Fabrics and fibers ....... 963 970 936
Foam products ............ 181 288 252
Other .................... 409 243 307
Total worldwide ........ $ 5,769 $ 5,717 $ 4,514
In August 1996, Amoco completed the sale of Amoco Foam
Products Company to Tenneco Inc. for $310 million. Amoco Foam
manufactured and marketed polystyrene foam products and had nine
plants in the United States. In addition, Amoco sold its
polystyrene business in December 1996 which included manufacturing
facilities in Joliet and Willow Springs, Illinois.
On March 1, 1996, Amoco Corporation completed the purchase of
Albemarle Corporation's alpha-olefins, poly alpha-olefins and
synthetic alcohol businesses for $535 million. The purchase
involved about 550 people and assets in Texas and Belgium.
Other Operations
Amoco has a wholly owned real estate subsidiary, AmProp, Inc.
("AmProp"), which was formed in late 1988. AmProp was established
to develop a portfolio of actively managed real estate investments.
The real estate investments have been developed in partnerships
with local developers. AmProp is the general partner with a
controlling interest in each venture partnership.
Amoco conducts certain non-petrochemical technology
development through a separate operating subsidiary, Amoco
Technology Company. Currently, the operating company has two areas
of major focus: photovoltaics (solar power) and DNA-based
diagnostics.
In January 1995, Amoco and Enron Corporation formed a general
partnership to continue the manufacturing and marketing of both
semicrystalline and amorphous silicon modules that produce
electricity directly from sunlight, as well as to develop solar
powered electric generation facilities. The joint venture,
Amoco/Enron Solar, owns the business and technologies previously
held by Solarex Corporation (a wholly owned subsidiary of Amoco
Technology Company). A separate division, Amoco/Enron Solar Power
Development, assumed the responsibility for development of
worldwide power marketing for projects that produce and sell solar
energy.
Vysis, Inc., another wholly owned venture, is currently
developing, manufacturing and marketing a series of research and
clinical DNA probe reagents and automated instruments which can be
used for genetic testing or diagnosing cancer and prenatal
disorders.
During 1996, Amoco Technology Company's interest in ATx
Telecom Systems, Inc., was sold. ATx Telecom Systems, Inc.
manufactured high performance fiber optic communications equipment.
Research
Research operations are conducted at five research centers. At
Tulsa, Oklahoma, research activities are directed toward new and
improved methods for finding and producing crude oil and natural
gas. At Naperville, Illinois, research is conducted to develop new
and enhanced chemical and petroleum products and processes. These
efforts include improvement of product performance and methods used
in the manufacturing of chemicals and polymers, and refining of
crude oil. The Alpharetta, Georgia, research facility also conducts
research for polymers and engineered resins. Research and
development in support of photovoltaics and physical technology are
carried out at Newtown, Pennsylvania, and Downers Grove, Illinois,
respectively.
Expenditures for research and technology development
activities totaled $171 million in 1996, $175 million in 1995 and
$255 million in 1994. An average of 1,230, 1,326 and 1,382
professional employees were engaged full-time in these activities
during 1996, 1995 and 1994, respectively.
Employees
Amoco had 41,723 employees in its worldwide operations as of
December 31, 1996. Of this total, 32,433 were located in the
United States, with approximately 15 percent represented by various
labor organizations. The remaining 9,290 employees were located in
non-U.S. countries, of which approximately 28 percent were
represented by labor groups.
Competition
All phases of the petroleum and chemical industries,
comprising numerous competitors large and small, are highly
competitive, including the search for and development of new
sources of supply; the construction and operation of crude oil and
refined products pipelines; and the refining, manufacturing,
distributing and marketing of petroleum and chemical products. The
petroleum industry also competes with other industries in supplying
energy, fuel and other needs of consumers. Amoco does not consider
one or a small group of competitors to be dominant in the
industries in which it competes. Amoco is the largest corporate
producer of natural gas in the United States, and it is the largest
private owner of natural gas reserves in North America. Amoco
believes that it ranked sixth in crude oil and natural gas liquids
production in the United States in 1996. Amoco sells petroleum
products in 33 states. Amoco was also active in approximately 35
countries. Amoco is among the largest U.S. chemical companies in
terms of sales revenues. Amoco is the world's largest manufacturer
of PTA, with annual capacity of 5.6 million metric tons, including
joint ventures. Amoco is also the world's leading manufacturer of
paraxylene with annual wholly owned production capacity of 1.8
million metric tons. In addition, the discussion under the headings
"Exploration and Production," "Reserves," "Oil and Gas Sales
Commitments," "Supply and Marketing of NGL," "Refining,"
"Transportation," "Marketing of Petroleum Products," "Chemicals,"
"Other Operations" and "Research" in Items 1 and 2 of this Form 10-
K discloses more detailed information on product markets included
in the various segments of Amoco's operations.
Government Regulation
Petroleum industry activities have been, and in the future may
be, affected from time to time by political developments, both
foreign and domestic, and federal, state and local laws,
regulations and decrees, such as restrictions on production,
imports and exports, crude oil and products allocation and
rationing, price controls, tax increases and retroactive tax
claims, expropriation of property, cancellation of contract rights
and environmental protection controls. The likelihood of such
occurrences and their overall effect upon Amoco vary from country
to country and are not predictable.
The DOE and the Federal Energy Regulatory Commission ("FERC")
have jurisdiction over Amoco's common carrier pipelines engaged in
the interstate transportation of oil. The Interstate Commerce Act
requires Amoco to file tariffs showing all rates, charges and
regulations for movements through its common carrier pipeline
system. FERC has the authority to establish rates for regulated
movements. Various state agencies also regulate Amoco's common
carrier pipelines engaged in the intra-state transportation of oil.
An excise tax, commonly known as the Superfund tax, became
effective on January 1, 1987. This tax is imposed to finance an
$11.97 billion hazardous substance cleanup program. The tax
consists of four parts: (1) a petroleum tax, imposed at a rate of
9.7 cents per barrel for domestic crude received at U.S. refineries
and imported petroleum products (including crude oil). In addition,
the Oil Spill Liability Trust Fund Tax became effective January 1,
1990. This tax, which was imposed at the rate of 5 cents per
barrel and is an additional part of the petroleum tax portion of
the Superfund tax imposed upon domestic crude and imported
petroleum products (including crude oil), was suspended effective
July 1, 1993; (2) a chemical feedstock tax, imposed at a rate of up
to $4.87 per ton for taxable chemicals. Effective January 1, 1989,
certain taxable substances, which are manufactured from chemicals
subject to the chemical feedstock tax, are taxable on imports into
the United States. On export, these substances are eligible for a
credit or refund of the chemical feedstock tax paid on chemicals
used in their manufacture; (3) a broad-based environmental tax,
imposed at a rate of .12 percent of a corporation's "modified
alternative minimum taxable income" in excess of $2 million as
computed under the Tax Reform Act of 1986. This tax applies
regardless of whether a taxpayer has any alternative minimum tax
liability; and (4) an underground storage tank tax, which is
imposed at a rate of .1 cent per gallon of gasoline and certain
other fuels. Effective January 1, 1996 the Superfund tax expired;
however, it is subject to reauthorization by Congress.
Environmental Protection
Federal, state and local environmental, health and safety laws
and regulations continue to grow in both number and complexity,
presenting Amoco and the industry with new challenges in attaining
and maintaining compliance. This trend is also reflected in the
international arena where Amoco has targeted new growth
opportunities. Public concern about environmental quality and
potential health risks are driving forces behind many new
requirements. The activities of natural resource companies like
Amoco are increasingly affected by these initiatives. On the
horizon, new initiatives like global warming, may lead to
additional regulation in the future.
Amoco's operations face stricter controls on releases of
pollutants to the air, water, soil and ground water. Process
equipment and pollution control devices continue to be upgraded, or
new controls added, to comply with these standards. Waste handling
and treatment strategies have been adopted to deal with
restrictions on the land disposal of certain hazardous wastes, the
liabilities imposed by federal and state waste handling and
disposal laws and increasingly stringent wastewater treatment
requirements. Remediation of contaminated sites under the Resource
Conservation and Recovery Act, the federal Superfund law, and
similar state laws is ongoing and will continue for the foreseeable
future. Amoco has conducted environmental reviews of many
refineries, chemical plants, distribution facilities, service
stations, oil and gas operations and other sites, and numerous
projects are underway or completed to address the contamination
found. Amoco's refining and marketing operations continue to adapt
to current and future reformulated gasoline requirements under
clean air laws.
Amoco engages in a wide variety of activities as part of its
commitment to environmental stewardship. Amoco conducts periodic
audits of its organizations and facilities to ensure the integrity
and effectiveness of environmental, health and safety management
systems. The Crisis Management Plan seeks to provide prompt and
effective responses to emergencies. Amoco has in place many worker
health and safety programs. Amoco's International Standard of Care
sets performance standards or goals that apply to Amoco's diverse
operations.
Amoco's 1996 capital expenditures for existing environmental
regulations totaled $127 million. This sum excluded $408 million
for operating costs and amounts spent on research and development,
and $90 million of mandated and voluntary remediation spending.
Remediation costs in 1997 are expected to approximate the 1996
level. Capital expenditures in the environmental area are expected
to be approximately $105 million in both 1997 and 1998.
<PAGE>
<PAGE>
Executive Officers of the Registrant
Certain information required by Item 10 with respect to
executive officers is incorporated by reference to pages 3-10 of
Amoco's Proxy Statement dated March 10, 1997. The following table
sets forth information concerning other executive officers of Amoco
as of March 1, 1997:
Served
as
Officer
Name Principal Occupation Age Since
R. Wayne Anderson . Senior vice president, human 55 1986
resources
Judith G. Boynton . Vice president and controller 42 1996
John L. Carl ...... Executive vice president and 49 1991
chief financial officer
James E. Fligg .... Senior executive vice president, 60 1991
strategic planning and
international business development
L. Richard Flury .. Executive vice president, 49 1994
exploration and production sector
W. Douglas Ford ... Executive vice president, 53 1992
petroleum products sector
Enrique J. Sosa ... Executive vice president, 56 1995
chemicals sector
George S. Spindler Senior vice president, law and 59 1989
corporate affairs
David F. Work ..... Senior vice president, shared 51 1996
services
An officer holds office until his or her resignation, removal,
death, retirement or termination of employment with Amoco. All
executive officers, with the exception of Enrique J. Sosa, have
been employed by Amoco or its subsidiaries for more than five
years.
Enrique J. Sosa was appointed executive vice president,
Chemicals Sector, effective October 1, 1995. Prior to that time,
Enrique J. Sosa was senior vice president of Dow Chemical Company
and president of Dow North America. From 1987 to 1990, Enrique J.
Sosa was group vice president, Chemicals and Performance Products.
He was commercial vice president, Specialty Chemicals, from 1985 to
1987 and president, Dow Brazil, from 1984 to 1985.
John L. Carl was elected Executive Vice President and Chief
Financial Officer effective April 1, 1994. From October 1993 to
April 1994, he was Senior Vice President Finance and Controller of
Amoco Corporation. Prior to that time, John L. Carl was Vice
President and Controller of Amoco Corporation, elected effective
February 1, 1991.
James E. Fligg was appointed Senior Executive Vice President,
strategic planning and international business development,
effective October 1, 1995. James E. Fligg was elected Executive
Vice President in June 1993. His title changed to Executive Vice
President, Chemicals Sector effective July 1, 1994. He was named
President of Amoco Chemical Company in July 1991.
L. Richard Flury was appointed Executive Vice President,
Exploration and Production Sector, effective January 1, 1996. L.
Richard Flury was elected Senior Vice President, Shared Services in
July 1994. From 1993 until July 1994 he was both Chairman of Amoco
Orient Company and Project Manager for an extensive study of
Amoco's corporate support groups. L. Richard Flury served as
Executive Vice President of Amoco Chemical Company from February
1991 to March 1993.
W. Douglas Ford was elected Executive Vice President in June
1993. His title changed to Executive Vice President, Petroleum
Products Sector effective July 1, 1994. He was named President of
Amoco Oil Company in July 1992. From February 1991 to 1993, W.
Douglas Ford was Executive Vice President of Amoco Oil Company.
David F. Work was appointed Senior Vice President, Shared
Services, effective January 1, 1996. Six of the Shared Services
departments report to David F. Work: information technology;
facilities and services; business services; environment, health and
safety; purchasing; and analytical services. In addition, the
Shared Services Integration Team reports to David F. Work. David F.
Work joined Amoco in 1970 and was group Vice President of worldwide
exploration for Amoco Production since February, 1992.
Judith G. Boynton was appointed Vice President and Controller
effective April 7, 1996. Judith G. Boynton was named General
Manager Auditing in July 1994, and Controller, Amoco Oil Company in
September 1993. Prior to that time, she had been Assistant
Controller, Budgeting and Benefit Plans Accounting since May 1992.
She progressed through a series of analyst and managerial positions
in the Treasurer's, Strategic Planning, and Planning and Economics
groups between 1989 and 1992.
Except as previously described, others shown in the table on
the previous page, who have been officers less than five years,
served in substantially the same position but were not officers or
had different officer titles.
Item 3. Legal Proceedings
Thirteen proceedings instituted by governmental authorities
are pending or known to be contemplated against Amoco and certain
of its subsidiaries under federal, state or local environmental
laws, each of which could result in monetary sanctions in excess of
$100,000. No individual proceeding is, nor are the proceedings as a
group, expected to have a material adverse effect on Amoco's
liquidity, consolidated financial position or results of
operations. Amoco estimates that in the aggregate the monetary
sanctions reasonably likely to be imposed from these proceedings
amount to approximately $7.4 million.
The Internal Revenue Service ("IRS") has challenged the
application of certain foreign income taxes as credits against the
Corporation's U.S. taxes that otherwise would have been payable for
the years 1980 through 1992. On June 18, 1992, the IRS issued a
statutory Notice of Deficiency for additional taxes in the amount
of $466 million, plus interest, relating to 1980 through 1982. The
Corporation filed a petition in the U.S. Tax Court contesting the
IRS statutory Notice of Deficiency. Trial on the matter was held
in April 1995, and a decision was rendered by the U.S. Tax Court in
March 1996, in Amoco's favor. The IRS has appealed the Tax Court's
decision to the U.S. Court of appeals for the Seventh Circuit. A
comparable adjustment of foreign tax credits for each year has been
proposed for the years 1983 through 1992 based upon subsequent IRS
audits. The Corporation believes that the foreign income taxes
have been reflected properly in its U.S. federal tax returns.
Consequently, this dispute is not expected to have a material
adverse effect on liquidity, results of operations, or the
consolidated financial position of the Corporation.
Amoco has various other suits and claims pending against it
among which are several class actions for substantial monetary
damages which in Amoco's opinion are not meritorious. While it is
impossible to estimate with certainty the ultimate legal and
financial liability with respect to these other suits and claims,
Amoco believes that, while the aggregate amount could be
significant, it will not be material in relation to its liquidity
or its consolidated financial position.
Item 4. Submission of Matters to a Vote of Security Holders
No matters were submitted to a vote of security holders during
the quarter ended December 31, 1996.
<PAGE>
<PAGE>
PART II
Item 5. Market for the Registrant's Common Stock and Related
Stockholder Matters
The principal public trading market for Amoco common stock is
the New York Stock Exchange. Amoco common stock is also traded on
the Chicago, Pacific, Toronto, and Swiss stock exchanges. The
following table sets forth the high and low share sales prices of
Amoco common stock as reported on the New York Stock Exchange and
cash dividends paid for the periods presented.
Market Prices Cash
Dividends
High Low Per Share
1996
First quarter ..... $ 74 1/8 $ 67 1/2 $ .65
Second quarter .... $ 75 1/8 $ 69 1/2 $ .65
Third quarter ..... $ 72 5/8 $ 65 $ .65
Fourth quarter .... $ 83 1/2 $ 70 1/4 $ .65
1995
First quarter ..... $ 64 1/4 $ 56 3/8 $ .60
Second quarter .... $ 69 3/4 $ 61 3/8 $ .60
Third quarter ..... $ 69 1/4 $ 62 1/2 $ .60
Fourth quarter .... $ 72 5/8 $ 63 1/8 $ .60
Year-end 1996 and 1995 market prices were $80 1/2 and $71 7/8,
respectively.
Amoco had 134,472 shareholders of record at December 31, 1996.
The quarterly cash dividend rate was raised to 70 cents per
share, effective with the first quarter 1997 dividend, an increase
of 5 cents per share, or 8 percent, over the previous rate.
<PAGE>
<PAGE>
Item 6. Selected Financial Data
The following selected financial data, as it relates to the
years 1992 through 1996, have been derived from the consolidated
financial statements of Amoco, including the consolidated statement
of financial position at December 31, 1996 and 1995 and the related
consolidated statement of income and consolidated statement of cash
flows for the three years ended December 31, 1996, and the notes
thereto, appearing elsewhere herein.
1996 1995 1994 1993 1992
(millions of dollars, except per-share
amounts and ratios)
Income statement data--
Year ended
December 31:
Sales and other operating
revenues (excluding
consumer excise taxes) .. $32,150 $27,066 $26,048 $25,336 $25,280
Net income (1) .......... $ 2,834 $ 1,862 $ 1,789 $ 1,820 $ 850
Net income per share (1) $ 5.69 $ 3.76 $ 3.60 $ 3.66 $ 1.71
Cash dividends per share $ 2.60 $ 2.40 $ 2.20 $ 2.20 $ 2.20
Ratio of earnings to
fixed charges (2) ....... 10.3 6.9 8.9 8.0 3.5
Balance sheet data-At
December 31:
Total assets ............ $32,100 $29,845 $29,316 $28,486 $28,453
Long-term debt .......... $ 4,153 $ 3,962 $ 4,387 $ 4,037 $ 5,005
Shareholders' equity .... $16,408 $14,848 $14,382 $13,665 $12,960
Shareholders' equity per
share ................... $ 33.00 $ 29.91 $ 28.97 $ 27.53 $ 26.11
(1)Excludes cumulative effects of accounting changes of $(924)
million in 1992, or $(1.86) per share.
(2)Earnings consist of income before income taxes and fixed
charges; fixed charges include interest on indebtedness,
rental expense representative of an interest factor, and
adjustments for certain companies accounted for by the equity
method.
<PAGE>
<PAGE>
Item 7. Management's Discussion and Analysis of Financial
Condition and Results of Operations
This discussion should be read in conjunction with the
consolidated financial statements, accompanying notes and
supplemental information.
Highlights 1996 1995 1994
Net income (millions) ....... $ 2,834 $ 1,862 $ 1,789
Net income per share ........ $ 5.69 $ 3.76 $ 3.60
Cash dividends per share .... $ 2.60 $ 2.40 $ 2.20
Return on average
shareholders' equity ...... 18.1% 12.7% 12.8%
Return on average
capital employed .......... 13.8% 10.3% 10.2%
Consolidated net income for 1996 was a record $2,834 million,
compared with $1,862 million in 1995 and $1,789 million in 1994.
Year-to-year comparisons in net income were affected by significant
unusual items summarized in the table below.
incr./(decr.) net income 1996 1995 1994
(millions of dollars)
Gains on dispositions ....... $ 153 $ 83 $ 45
LIFO inventory .............. 90 -- --
Impairment .................. -- (380) --
Crude oil excise tax
settlement ................ -- -- 270
Restructuring accruals ...... -- -- (256)
Environmental provisions .... -- -- (60)
Tax obligations and other ... -- -- 62
Benefiting 1996 earnings were gains of $97 million from the
sale of Amoco's polystyrene foam products business, $56 million on
certain Canadian asset dispositions and $90 million from the
drawdown of inventories valued under the last-in, first-out
("LIFO") method. In 1995, earnings were reduced by non-cash charges
of $380 million associated with the adoption of Statement of
Financial Accounting Standards ("SFAS") No. 121, "Accounting for
the Impairment of Long-Lived Assets and for Long-Lived Assets to Be
Disposed Of." Also included in 1995 earnings was an $83 million
gain related to the sale of Amoco Motor Club.
Earnings in 1994 included $270 million from settlements of
crude oil excise taxes ("COET"), a gain of $45 million related to
the disposition of certain European oil and gas properties and tax
adjustments related to prior years totaling $62 million. Adversely
affecting 1994 earnings were charges of $256 million associated
with Amoco's restructuring of operations, and provisions for future
environmental remediation expenditures relating to past operations
totaling $60 million.
Excluding these unusual items for all periods, 1996 earnings
would have been $2,591 million, up 20 percent from 1995 earnings of
$2,159 million; 1995 earnings increased 25 percent over 1994
earnings.
The record earnings in 1996 were primarily driven by higher
crude oil and natural gas prices. An increase in worldwide natural
gas production was also a contributing factor. These strong
results, as well as continuing efficiency improvements throughout
the organization, more than offset lower chemical and petroleum
product results.
Sales and other operating revenues totaled $32 billion for
1996, a 19 percent increase over 1995. Crude oil and natural gas
revenues increased 30 percent and 46 percent, respectively,
primarily as the result of higher prices. Refined product revenues
increased 20 percent, primarily resulting from higher U.S. gasoline
prices and sales volumes. Chemical revenues were comparable to
1995, as lower prices and divestments were offset by higher sales
volumes associated with capacity additions and acquisitions.
Total costs and expenses on a worldwide basis increased 12
percent from 1995. Purchased crude oil, natural gas, petroleum
products and merchandise costs increased 27 percent reflecting
higher crude oil and natural gas prices and volumes, and an
increase in refined product prices. Selling and administrative
expenses for 1996 increased by 6 percent. Included in selling and
administrative expenses were reorganization expenses of $136
million in 1996, compared with $133 million in 1995. Depreciation,
depletion, amortization, and retirements and abandonments ("DD&A")
decreased $500 million compared with 1995. In 1995, DD&A included
impairment charges of $602 million associated with the adoption of
SFAS No. 121. Interest expense decreased $143 million in 1996,
reflecting lower interest related to revised estimates of tax
obligations.
Industry Segments
Results on a segment basis, for the five years ended December
31, 1996, are presented in the table below.
1996 1995 1994 1993 1992
(millions of dollars)
Exploration and production
United States .......... $1,132 $ 463 $ 820 $ 826 $ 788
Canada ................. 378 9 199 449 38
Europe ................. 118 88 (65) (102) (103)
Other .................. 333 245 76 (48) 280
Subtotal ............. 1,961 805 1,030 1,125 1,003
Petroleum products ....... 351 380 410 713 309
Chemicals ................ 735 963 485 222 (91)
Corporate and other
operations* ............ (213) (286) (136) (240) (371)
Income before the
cumulative effects of
accounting changes ..... 2,834 1,862 1,789 1,820 850
Cumulative effects of
accounting changes ..... -- -- -- -- (924)
Net income (loss) .... $2,834 $1,862 $1,789 $1,820 $ (74)
*Corporate and other operations include net interest and general
corporate expenses, and the results of investments in technology
companies, real estate interests and other activities.
<PAGE>
<PAGE>
Exploration and Production
United States
Exploration and Production ("E&P") earnings in the United
States totaled $1,132 million in 1996, compared with $463 million
in 1995 and $820 million in 1994. Included in 1995 results were
after-tax charges of $234 million for impairment of oil and gas
producing properties associated with the adoption of Statement of
Financial Accounting Standards No. 121. Under this method, these
properties are evaluated by individual field; previously an
aggregated approach was used.
Excluding this item, 1996 earnings increased by $435 million
over the $697 million earned in 1995. The improvement primarily
reflected a 43 percent increase in average natural gas prices along
with a 26 percent increase in average crude oil prices. Higher
natural gas liquids ("NGL") prices and natural gas volumes, and a
$10 million before-tax reduction in exploration expenses also
contributed favorably to results.
Amoco's U.S. natural gas prices averaged $1.93 per thousand
cubic feet ("mcf") in 1996, $.58 per mcf above 1995. Amoco's U.S.
crude oil prices averaged over $20.00 per barrel for 1996, up more
than $4.00 per barrel over 1995.
U.S. natural gas production averaged 2.6 billion cubic feet
per day in 1996, 5 percent above 1995. Crude oil and NGL production
averaged 297,000 barrels per day in 1996, about the same as in
1995, as a 5 percent increase in NGL production offset normal crude
oil field declines.
Canada
Canadian exploration and production operations, including
supply and marketing of NGL, earned $378 million in 1996, compared
with earnings of $9 million in 1995 and $199 million in 1994.
Benefiting 1996 earnings were gains of $56 million on asset
dispositions, including the sale of Amoco's remaining investment in
Crestar Energy Inc. Earnings in 1995 included impairment charges of
$93 million. Excluding these items, 1996 earnings of $322 million,
increased $220 million over 1995, mainly as a result of higher
energy prices and increased NGL margins.
Canadian natural gas prices averaged $1.15 per mcf, $.26 per
mcf above 1995 levels. Crude oil prices increased about $2.60 per
barrel to average $17.73 per barrel for the year. Also contributing
to the earnings increase were higher supply and marketing earnings
and a $44 million before-tax decline in exploration expenses.
Natural gas production averaged 815 million cubic feet ("mmcf") per
day in 1996, down 3 percent from 1995, reflecting normal field
declines. Crude oil and NGL production declined 5,000 barrels per
day in 1996, as normal field declines and divestments offset a
7,000 barrel per day increase in average heavy crude oil
production.
<PAGE>
<PAGE>
Overseas
European exploration and production operations earned $118
million in 1996 compared with $88 million in 1995 and a loss of $65
million in 1994. The improvement in 1996 earnings primarily
reflected higher average crude oil prices, which increased by
almost $3.80 per barrel over 1995. Partly offsetting were higher
exploration expenses, which increased $18 million before tax. Gains
on property dispositions added approximately $15 million to 1995
earnings. Production, on an energy-equivalent basis in 1996, was
the same as 1995; increases in natural gas production offset
decreases in crude oil production.
Exploration and production operations in other overseas areas
earned $333 million in 1996. This compared with $245 million in
1995 and $76 million in 1994. Contributing to the improvement were
higher energy prices and production volumes, which more than offset
an increase in exploration expenses of $42 million before tax.
Average crude oil prices increased about $3.25 per barrel over 1995
while natural gas prices increased 5 percent to average $1.17 per
mcf. Earnings in 1995 included a gain of $18 million related to
divestment of Congo operations. Natural gas production increased 5
percent in 1996 to 609 mmcf per day, largely as a result of higher
production in Sharjah. Crude oil and NGL production averaged
244,000 barrels per day in 1996, 4 percent higher than 1995,
reflecting production from the Liuhua field in the South China Sea,
which began in late March 1996, and averaged 20,000 barrels per day
for the year.
1995 vs. 1994
U.S. exploration and production operations earned $463 million
in 1995 compared with $820 million in 1994. Earnings in 1995
included an impairment charge of $234 million while 1994 earnings
benefited from the crude oil excise tax settlement of $90 million,
offset by restructuring charges of $47 million. Excluding those
items, 1995 earnings of $697 million declined 10 percent from 1994
as a result of lower U.S. natural gas prices and higher exploration
expenses. Partly offsetting were higher crude oil prices and a
reduction in operating expenses.
In 1995, earnings outside the United States for exploration
and production operations totaled $342 million, compared with $210
million in 1994. Higher crude oil prices, which averaged about
$1.70 per barrel above 1994, and lower exploration expenses of $62
million before tax, contributed to the improvement. Offsetting were
lower Canadian natural gas prices, down by $.50 per mcf, and
unfavorable after-tax currency effects of $16 million. Impairment
charges in 1995 lowered earnings by $93 million while gains from
asset dispositions added $33 million to results.
Outlook
Crude oil and natural gas price volatility affects all aspects
of Amoco's business. Despite recent increases in energy prices,
supply and demand concerns are expected to keep downward pressures
on crude oil and natural gas prices.
Amoco's exploration efforts will target those areas that offer
the most potential. Amoco will also continue to capitalize on its
natural gas resources.
Amoco's worldwide barrel-oil-equivalent production is expected
to increase from 1996 levels by 25 percent over the next five
years, with the largest increases expected to occur in the later
years. Production in 1997 is expected to increase by 2 percent,
with incremental production anticipated from the Gulf of Mexico,
and production from Venezuela and Colombia.
Amoco will continue to benefit from both past and ongoing cost
reduction programs. Strategic alliances, acquisitions and
divestments will be part of Amoco's portfolio management process.
In early 1997, Amoco and Shell Oil Company completed formation of
Altura Energy Ltd., to combine the two companies' exploration and
production assets in the Permian Basin area of west Texas and
southeast New Mexico. Amoco has a 64 percent interest in the joint
venture.
Petroleum Products
United States 1996 1995 1994 1993 1992
Cents per gallon:
Average selling price
Gasoline .................... 74.6 66.4 63.4 66.4 71.3
Total petroleum products .... 65.3 56.6 54.5 57.5 60.9
Average cost of crude input ... 50.6 41.8 38.4 39.6 44.6
Percent:
Refinery capacity utilization 94.6 92.8 97.5 96.9 95.3
Refinery yield .............. 107.0 107.0 107.2 106.8 106.9
Petroleum products operations earned $351 million in 1996,
compared with earnings of $380 million in 1995 and $410 million in
1994. Operations in 1996 benefited by $90 million from the drawdown
of inventories valued under the last-in, first-out ("LIFO") method.
Included in 1995 earnings were an after-tax gain of $83 million
from the sale of Amoco Motor Club and an after-tax charge for
impairment of $11 million. Adjusting both periods for these items,
1996 earnings of $261 million were $47 million lower than 1995.
The decrease in earnings reflected lower refining margins in a
very competitive U.S. market and higher expenses related to
international business development. Contributing favorably to 1996
earnings were higher sales volumes and a gain on an asset
disposition.
Petroleum product sales volumes averaged 1.2 million barrels
per day in 1996, 3 percent higher than 1995. Gasoline sales
averaged 630,000 barrels per day an increase of 3 percent.
Distillates averaged 370,000 barrels per day.
The refinery utilization rate averaged 95 percent of rated
capacity in 1996, up from 93 percent in 1995.
1995 vs. 1994
In 1995, petroleum products operations earned $380 million
compared with $410 million for 1994. The decrease in 1995 primarily
resulted from lower refined product margins, which decreased almost
2 cents per gallon. Adversely affecting 1994 earnings were charges
of $60 million related to estimated future cost of environmental
remediation activities and restructuring charges of $41 million.
Outlook
The petroleum products industry is faced with both significant
challenges and opportunities. Profitability is affected by crude
oil price volatility and overall industry supply/demand balance.
Efficient utilization of assets is critical to profitable growth.
Amoco anticipates continued weak refining margins in the near term
in a very competitive U.S. market.
Amoco's marketing strategy will continue to emphasize brand
product quality and growth in its position as a convenience
retailer. Strategic alliances with such companies as McDonald's
Corporation and Femsa in Mexico are expected to be expanded. A
decision was made in 1996 to sell Amoco's retail marketing sites in
Central Europe as part of Amoco's strategy to grow retail marketing
operations primarily in North America.
Amoco plans to manage its pipeline facilities to maximize
capital utilization through joint ventures and other commercial
opportunities.
Chemicals
Chemical operations earned $735 million in 1996, compared with
record earnings of $963 million in 1995 and $485 million in 1994.
Excluding a gain of $97 million from the sale of Amoco's
polystyrene foam products business, 1996 earnings of $638 million
were among the highest ever for the chemical segment, although
earnings declined 37 percent from adjusted 1995 results. Included
in 1995 earnings were charges of $42 million related to the
impairment of specialty polymer facilities.
Margins for major product lines dropped sharply in 1996,
particularly in the first half of the year. Industrywide inventory
destocking of purified terephthalic acid ("PTA") and paraxylene
("PX") early in the year as new capacity came onstream pressured
margins. Over the latter part of the year, results were affected by
lower margins for olefins and PX, reflecting higher hydrocarbon
feedstock costs. Further affecting PX margins were lower prices.
Partially offsetting the decline in margins were increases in
sales volumes, reflecting capacity additions and recent
acquisitions, and investment incentives. In 1996, produced volumes
for olefins and PX increased 9 percent and 16 percent,
respectively; polypropylene sales volumes were up 16 percent; and
PTA sales volumes increased 5 percent, reflecting the start up of
Amoco's wholly owned plant in Malaysia. Overall chemicals capacity
utilization rates averaged 94 percent in 1996 and 93 percent in
1995.
1995 vs. 1994
In 1995, chemical operations earned $963 million compared with
1994 earnings of $485 million. The increase in 1995 reflected
higher margins for major product lines, particularly olefins, PTA,
PX and polypropylene, and higher sales volumes for olefins and PTA.
Included in 1995 were impairment charges of $42 million; 1994
results included restructuring charges of $36 million.
Outlook
Chemical profitability is affected by overall industry product
supply and demand. Amoco's overall strategy is to continuously
improve its portfolio to make its businesses stronger and more
competitive. The acquisition of Albemarle Corporation's alpha-
olefins and related businesses integrates Amoco's ethylene business
with downstream applications. Amoco improves competitiveness of
existing businesses by selectively investing to support local
market growth. Amoco's other integrated product chains -- PTA/PX,
purified isophthalic acid/metaxylene, and propylene from monomer to
polyproplyene fabrics -- also allow the Corporation to maintain
high plant capacity utilizations and production volumes.
While current industry excess PTA capacity is putting downside
pressure on margins, long-term worldwide growth is expected to be 8
percent, which should restore supply/demand balance and improve
returns. To meet this expected growth, expansions at wholly owned
and joint-venture PTA facilities have been completed or are in
progress. In 1996, construction was completed at the wholly owned
Malaysia plant. Additional PTA expansions are scheduled to be
completed over the next two years at wholly owned facilities in
South Carolina and Belgium, and joint-venture plants in China and
Indonesia. Long-term annual growth for PX is expected to be 6
percent. A PX joint-venture plant in Singapore began commercial
production in early 1997.
Amoco continues to manage its portfolio to optimize the
quality of its businesses. At the same time, Amoco plans to
broaden its current commodity businesses where opportunities to
enter attractive product lines through acquisition, internal
development or alliance can be established.
Corporate and Other Operations
Corporate and other operations include net interest and
general corporate expenses, and the results of investments in
technology companies, real estate interests and other activities.
This segment incurred net after-tax expenses of $213 million in
1996, compared with net expenses of $286 million and $136 million
for 1995 and 1994, respectively. The 26 percent decrease in net
after-tax expenses in 1996 reflected lower interest expense,
reflecting lower interest related to revised estimates of tax
obligations, and a gain on an asset disposition. After-tax
reorganization expenses, primarily associated with system
development and redesign, were approximately $84 million in 1996
and $75 million in 1995.
The increase in corporate and other operations net expenses
between 1995 and 1994 resulted from the previously mentioned
reorganization expenses of $75 million and higher interest costs
reflecting higher debt balances and interest rates. Partly
offsetting were lower costs associated with technology operations
and other activities. Corporate and other operations net expenses
for 1994 included interest income of $180 million related to the
COET settlement, restructuring charges of $112 million, and
favorable tax adjustments for prior years of $33 million.
Restructuring
In conjunction with the 1994 reorganization and restructuring,
an after-tax charge of $256 million was accrued in the second
quarter of 1994. Severance charges against that accrual related to
approximately 3,400 positions, totaled $132 million after tax
through the end of 1996, of which $23 million and approximately 400
positions were associated with 1996. Approximately $14 million
after tax remains for future severances as a result of the ongoing
process redesign to improve efficiencies in support functions. Also
in 1994, $110 million after tax was recognized related to facility
closures and dispositons.
Additional costs for system redesign, relocation, work
consolidation and development of new processes in support of the
reorganization were estimated in July 1994 at approximately $200
million after tax, but were not accrued. Costs for those programs
were essentially completed in 1996. Selling and administrative
expenses included $136 million ($88 million after tax) in 1996;
$133 million ($86 million after tax) in 1995; and $24 million in
1994 ($16 million after tax) related to these activities.
Liquidity and Capital Resources
In 1996, cash flow from operating activities amounted to $4.8
billion, compared with $3.8 billion in 1995.
Total short- and long-term debt was $5.1 billion at year-end
1996, compared with $5 billion at year-end 1995. Debt as a percent
of debt-plus-equity was 23.6 percent at December 31, 1996, down
from 25.2 percent at year-end 1995.
Working capital was $924 million at year-end 1996, compared
with $716 million at year-end 1995. At year-end 1996, the
Corporation's current ratio was 1.15 to 1. As a matter of policy,
Amoco practices asset and liability management techniques that are
designed to minimize its investment in non-cash working capital.
This does not impair operational flexibility since the Corporation
has ready access to both short- and long-term debt markets.
Cash dividends paid in 1996 totaled $1,287 million, or $2.60
per share, compared to $1,197 million, or $2.40 per share in 1995.
The quarterly cash dividend was raised to 70 cents per share
effective with the first quarter 1997 dividend, an increase of 5
cents per share, or 8 percent.
In December 1996, Amoco announced plans to repurchase up to $2
billion of its common stock, in excess of amounts needed for
benefit plan purposes, over the next two years.
The Corporation believes its strong financial position will
permit the financing of its business needs and opportunities as
they arise. It is anticipated that ongoing operations will be
financed primarily by internally generated funds. Short-term
obligations, such as commercial paper borrowings, give the
Corporation the flexibility to meet short-term working capital and
other temporary requirements. At December 31, 1996, bank lines of
credit available to support commercial paper borrowings were $500
million, all of which were supported by commitment fees.
The Corporation also may use its favorable access to long-term
debt markets to finance profitable growth opportunities. A $500
million shelf registration statement for debt securities remains on
file with the Securities and Exchange Commission ("SEC") to permit
ready access to capital markets. In 1995, Amoco Argentina Oil
Company ("Amoco Argentina"), an indirect wholly owned subsidiary of
Amoco, filed a shelf registration with the SEC for $200 million of
debt securities, of which $100 million were subsequently issued. In
early 1997, the $100 million remaining under this registration was
issued. Amoco Corporation and Amoco Company (a wholly owned
subsidiary of Amoco) guarantee the securities issued under this
registration statement. Amoco Canada Petroleum Company Ltd. ("Amoco
Canada") canceled a $225 million 10-year revolving term facility in
November 1996.
Price risk management
Amoco is routinely exposed to hydrocarbon commodity price
risk. It manages a portion of that risk mainly through the use of
futures contracts, swaps and options generally to achieve market
prices on specific purchase and sales transactions. Also at
December 31, 1996, the Corporation had fixed the sales price or a
range of prices of 12 million barrels of crude oil and 45 trillion
British thermal units of natural gas production using forward swaps
and option contracts. See Notes 1 and 4 to the Consolidated
Financial Statements.
Environmental protection and remediation costs
The Corporation has provided in its accounts for the
reasonably estimable future costs of probable environmental
remediation obligations. These amounts relate to various refining
and marketing sites, chemical locations, and oil and gas
operations, including multiparty sites at which Amoco has been
identified as a potentially responsible party by the U.S.
Environmental Protection Agency. Such estimated costs will be
refined over time as remediation requirements and regulations
become better defined. However, any additional costs cannot be
reasonably estimated at this time due to uncertainty of timing, the
magnitude of contamination, future technology, regulatory changes
and other factors. Although future costs could be significant, they
are not expected to be material in relation to Amoco's liquidity or
consolidated financial position. In total, the accrued liability
represents a reasonable best estimate of Amoco's remediation
liability. See Notes 1 and 21 to the Consolidated Financial
Statements.
The Corporation and its subsidiaries maintain insurance
coverage for environmental pollution resulting from the sudden or
accidental release of pollutants. Various deductibles of up to $50
million per occurrence could apply, depending on the type of
incident involved. Coverage for other types of environmental
obligations is not generally provided, except when required by
regulation or contract. The financial statements do not reflect
any significant recovery from claims under prior or current
insurance coverage.
At December 31, 1996, the Corporation's reserves for future
environmental remediation costs totaled $538 million, of which $318
million related to refining and marketing sites. The Corporation
also maintains reserves associated with dismantlement, restoration
and abandonment of oil and gas properties, which totaled $654
million at December 31, 1996.
Capital expenditures resulting from existing environmental
regulations, primarily related to refining and marketing, and
exploration and production sites, totaled $127 million in 1996.
Excluded from that total were $408 million for operating costs and
amounts spent on research and development, and $90 million of
mandated and voluntary remediation spending. Amoco's 1997 estimated
capital spending for environmental cleanup and protection projects
is expected to be approximately $105 million; spending for
remediation in 1997 is expected to approximate the 1996 level.
Capital and exploration expenditures
1996 1995 1994 1993 1992
(millions of dollars)
Capital and exploration
expenditures
Exploration and
production
United States ..... $ 1,196 $ 1,146 $ 829 $ 672 $ 475
Canada ............ 456 423 456 340 198
Europe ............ 558 491 279 493 538
Other ............. 858 654 687 682 578
Subtotal ........ 3,068 2,714 2,251 2,187 1,789
Petroleum products .. 452 461 417 704 788
Chemicals ........... 985 850 467 369 320
Corporate and other
operations .......... 116 111 70 86 99
Total ....... $ 4,621 $ 4,136 $ 3,205 $ 3,346 $ 2,996
Petroleum exploration
expenditures charged to
income (included above)
United States ..... $ 142 $ 152 $ 113 $ 90 $ 140
Canada ............ 68 112 117 47 72
Europe ............ 141 123 178 151 150
Other ............. 265 223 225 241 300
Total ....... $ 616 $ 610 $ 633 $ 529 $ 662
Spending in 1996 totaled $4.6 billion, an increase of 12
percent over the $4.1 billion spent in 1995. The increase reflected
higher E&P spending associated with construction of a liquefied
natural gas plant in Trinidad and continuation of programs in Egypt
and the North Sea. Higher chemical spending related to expansions
or construction of new facilities. The 1996 capital expenditures
excluded $535 million for the acquisition of Albemarle
Corporation's alpha-olefins and related businesses.
Capital and exploration expenditures of $4.1 billion have been
approved for 1997. Approximately 56 percent of total E&P spending
of $2.7 billion is planned for locations outside North America.
Targeted growth areas include Trinidad, Venezuela, Colombia,
Azerbaijan, Egypt, the North Sea and the deepwater Gulf of Mexico.
Chemicals expenditures in 1997 are expected to be approximately
$750 million with the majority being spent for the completion of
expansions or new facilities in Indonesia, Belgium and the United
States. The 1997 capital spending program excludes $307 million
for pre-funding of expenditures related to the recently approved
operatorship and 50 percent ownership in a new Bolivian oil and gas
company, Empresa Petrolera Chaco.
It is anticipated that the 1997 capital and exploration
expenditures budget will be financed primarily by funds generated
internally. The planned expenditure level is subject to adjustment
as dictated by changing economic and political conditions.
"Safe Harbor" Statement under the Private Securities Litigation
Reform Act of 1995.
Statements in this report that are not historical facts,
including statements in Management's Discussion and Analysis under
the heading "Outlook" and other statements about industry and
company growth, estimates of expenditures and savings, and other
trend projections are forward looking statements. These statements
are based on current expectations and involve risk and
uncertainties. Actual future results or trends may differ
materially depending on a variety of factors. These include
specific factors identified in the discussion accompanying such
forward looking statements, industry product supply and pricing,
political stability and economic growth in relevant areas of the
world, the company's successful execution of its internal
performance plans, successful partnering, actions of competitors,
natural disasters, and other changes to business conditions.
<PAGE>
<PAGE>
Item 8. Financial Statements and Supplemental Information
Index to Financial Statements and Supplemental Information Page
Report of Independent Accountants ........................ 38
Consolidated Financial Statements:
Consolidated Statement of Income ...................... 39
Consolidated Statement of Financial Position .......... 40
Consolidated Statement of Shareholders' Equity......... 41
Consolidated Statement of Cash Flows .................. 42
Notes to Consolidated Financial Statements ............ 43
Financial Statement Schedule:
Valuation and Qualifying Accounts (Schedule II) ..... 88
Supplemental Information:
Quarterly Results and Stock Market Data ............... 73
Oil and Gas Exploration and Production Activities ..... 74
Separate financial statements of subsidiary companies not
consolidated, and of 50 percent or less owned companies accounted
for by the equity method, have been omitted since, if considered in
the aggregate, they would not constitute a significant subsidiary.
<PAGE>
<PAGE>
REPORT OF INDEPENDENT ACCOUNTANTS
PRICE WATERHOUSE LLP
To the Board of Directors and Shareholders of Amoco Corporation
In our opinion, the consolidated financial statements listed
in the accompanying index present fairly, in all material respects,
the financial position of Amoco Corporation and its subsidiaries 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
Amoco 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.
As discussed in Note 6 to the financial statements, Amoco
Corporation changed its method of accounting for the impairment of
long-lived assets in 1995 to comply with the provisions of
Statement of Financial Accounting Standards No. 121.
PRICE WATERHOUSE LLP
Chicago, Illinois
February 25, 1997
<PAGE>
<PAGE>
AMOCO CORPORATION AND SUBSIDIARIES
CONSOLIDATED STATEMENT OF INCOME
Year Ended December 31
1996 1995 1994
(millions of dollars except
per-share amounts)
Revenues:
Sales and other operating revenues .... $32,150 $27,066 $26,048
Consumer excise taxes ................. 3,386 3,339 3,409
Other income .......................... 576 599 905
Total revenues ...................... 36,112 31,004 30,362
Costs and expenses:
Purchased crude oil, natural gas,
petroleum products and merchandise .. 17,942 14,140 13,558
Operating expenses .................... 4,642 4,555 4,743
Petroleum exploration expenses,
including exploratory dry holes ..... 616 610 633
Selling and administrative expenses ... 2,246 2,124 2,227
Taxes other than income taxes ......... 4,215 4,042 4,153
Depreciation, depletion, amortization,
and retirements and abandonments .... 2,294 2,794 2,239
Interest expense ...................... 192 335 318
Total costs and expenses ............ 32,147 28,600 27,871
Income before income taxes ............ 3,965 2,404 2,491
Income taxes .......................... 1,131 542 702
Net income .......................... $ 2,834 $ 1,862 $ 1,789
Net income per share ................ $ 5.69 $ 3.76 $ 3.60
(The accompanying notes are an integral part of these statements.)
<PAGE>
<PAGE>
AMOCO CORPORATION AND SUBSIDIARIES
CONSOLIDATED STATEMENT OF FINANCIAL POSITION
December 31
1996 1995
ASSETS (millions of dollars)
Current Assets:
Cash ............................................. $ 186 $ 182
Marketable securities--at cost (all corporate,
except $141 on December 31, 1996, and $184 on
December 31, 1995, which represent state and
municipal securities) ........................... 1,135 1,212
Accounts and notes receivable (less allowances
of $17 on December 31, 1996, and $16 on
December 31, 1995) .............................. 3,942 3,332
Inventories ...................................... 1,069 1,041
Prepaid expenses and income taxes ................ 731 723
7,063 6,490
Investments and other assets:
Investments and related advances ................. 796 654
Long-term receivables and other assets ........... 841 655
1,637 1,309
Properties--at cost, less accumulated
depreciation, depletion and amortization of
$27,111 on December 31, 1996, and $26,531 on
December 31, 1995 ............................... 23,400 22,046
$32,100 $29,845
LIABILITIES AND SHAREHOLDERS' EQUITY
Current liabilities:
Current portion of long-term obligations.......... $ 151 $ 341
Short-term obligations ........................... 821 735
Accounts payable ................................. 3,196 2,822
Accrued liabilities .............................. 908 989
Taxes payable (including income taxes) ........... 1,063 887
6,139 5,774
Long-term obligations:
Debt ............................................. 4,153 3,962
Capitalized leases ............................... 76 --
4,229 3,962
Deferred credits and other non-current liabilities:
Income taxes ..................................... 2,850 2,745
Other ............................................ 2,345 2,401
5,195 5,146
Minority interest ................................. 129 115
Shareholders' equity:
Common stock (authorized 800,000,000 shares;
issued and outstanding as of December 31, 1996--
497,275,364 shares; December 31, 1995--
496,402,697 shares) ............................. 2,646 2,590
Earnings retained and invested in the business ... 13,806 12,295
Pension liability adjustment ..................... (25) (49)
Foreign currency translation adjustment .......... (19) 12
Total shareholders' equity ........................ 16,408 14,848
$32,100 $29,845
(The successful efforts method of accounting is followed for costs
incurred in oil and gas producing activities.)
(The accompanying notes are an integral part of these statements.)
<PAGE>
<PAGE>
AMOCO CORPORATION AND SUBSIDIARIES
CONSOLIDATED STATEMENT OF SHAREHOLDERS' EQUITY
Earnings
Retained
and
Invested Other
Common in the Equity
Stock Business Adjustments Total
(millions of dollars, except per-share amounts)
Balance on December 31, 1993 $2,147 $ 11,557 $ (39) $13,665
Net income ............... 1,789 1,789
Cash dividends of $2.20
per share ............... (1,092) (1,092)
Foreign currency
translation adjustment .. 32 32
Issuances of common stock
(net) ................... 19 (31) (12)
Balance on December 31, 1994 2,166 12,223 (7) 14,382
Net income ............... 1,862 1,862
Cash dividends of $2.40
per share ............... (1,197) (1,197)
Foreign currency
translation adjustment .. 19 19
Pension liability
adjustment............... (49) (49)
Issuances of common stock
(net) ................... 424 (593) (169)
Balance on December 31, 1995 2,590 12,295 (37) 14,848
Net income ............... 2,834 2,834
Cash dividends of $2.60
per share ............... (1,287) (1,287)
Foreign currency
translation adjustment .. (31) (31)
Pension liability
adjustment .............. 24 24
Issuances of common stock
(net) ................... 56 (36) 20
Balance on December 31, 1996 $2,646 $ 13,806 $ (44) $16,408
(The accompanying notes are an integral part of these statements.)
<PAGE>
<PAGE>
AMOCO CORPORATION AND SUBSIDIARIES
CONSOLIDATED STATEMENT OF CASH FLOWS
Year Ended December 31
1996 1995 1994
(millions of dollars)
Cash flows from operating activities:
Net income ........................ $ 2,834 $ 1,862 $ 1,789
Adjustments to reconcile net
income to net cash provided
by operating activities:
Depreciation, depletion,
amortization, and retirements
and abandonments ................ 2,294 2,794 2,239
Increase in receivables .......... (661) (33) (137)
Decrease in inventories .......... 4 1 68
Increase in payables and
accrued liabilities ............. 608 31 492
Deferred taxes and other items ... (291) (846) (122)
Net cash provided by operating
activities ...................... 4,788 3,809 4,329
Cash flows from investing activities:
Capital expenditures .............. (3,910) (3,526) (2,572)
Proceeds from dispositions of
property and other assets ........ 475 290 335
New investments, advances and
business acquisitions ............ (721) (173) (91)
Proceeds from sales of investments 521 20 176
Other ............................. 20 81 (18)
Net cash used in investing
activities ....................... (3,615) (3,308) (2,170)
Cash flows from financing activities:
New long-term obligations ......... 362 661 438
Repayment of long-term obligations (427) (309) (138)
Cash dividends paid ............... (1,287) (1,197) (1,092)
Issuances of common stock ......... 59 42 29
Acquisitions of common stock ...... (39) (704) (41)
Issuance of preferred stock
by affiliate ..................... -- 100 --
Increase (decrease) in short-term
obligations ...................... 86 511 (783)
Net cash used in financing
activities ....................... (1,246) (896) (1,587)
(Decrease) increase in cash and
marketable securities .............. (73) (395) 572
Cash and marketable securities-
beginning of year .................. 1,394 1,789 1,217
Cash and marketable securities-
end of year ........................ $ 1,321 $ 1,394 $ 1,789
(The accompanying notes are an integral part of these statements.)
<PAGE>
<PAGE>
AMOCO CORPORATION AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
Note 1. Accounting Policies
Principles of consolidation. The operations of all significant
subsidiaries in which the Corporation directly or indirectly owns
more than 50 percent of the voting stock are included in the
consolidated financial statements. The Corporation also
consolidates its proportionate share of assets, liabilities and
results of operations of undivided interest pipelines and oil and
gas joint ventures. Investments in other companies in which less
than a majority interest is held are generally accounted for by the
equity method.
Estimates in financial statements. The preparation of
financial statements in conformity with generally accepted
accounting principles requires estimates and assumptions that
affect certain reported amounts. Actual results may differ in some
cases from the estimates.
Inventories. Inventories are carried at the lower of current
market value or cost. Cost is determined under the last-in,
first-out ("LIFO") method for the majority of inventories of crude
oil, petroleum products and chemical products. The costs of
remaining inventories are determined on the first-in, first-out
("FIFO") or average cost methods.
Costs incurred in oil and gas producing activities. The
Corporation follows the successful efforts method of accounting.
Costs of property acquisitions, successful exploratory wells, all
development costs (including CO2 and certain other injected
materials that benefit production over multiple years in enhanced
recovery projects) and support equipment and facilities are
capitalized. Unsuccessful exploratory wells are expensed when
determined to be non-productive. Production costs, overhead and all
exploration costs other than exploratory drilling are charged
against income as incurred.
Depreciation, depletion and amortization. Generally,
depreciation of plant and equipment, other than oil and gas
facilities, is computed on a straight-line basis over the estimated
economic lives of the facilities, which for refining and chemical
facilities average 20 years, for administrative buildings average
45 years and for service stations average 16 years. Depletion of
the cost of producing oil and gas properties, amortization of
related intangible drilling and development costs and depreciation
of tangible lease and well equipment are recognized using the
unit-of-production method.
The portion of costs of unproved oil and gas properties
estimated to be non-productive is amortized over projected holding
periods.
<PAGE>
<PAGE>
AMOCO CORPORATION AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued)
The estimated costs to dismantle, restore and abandon oil and
gas properties are recognized over the properties' productive lives
on the unit-of-production method.
Long-lived assets with recorded values that are not expected
to be recovered through future cash flows are written down to
current fair value. Fair value is generally determined from
estimated future net cash flows.
Significant gains or losses from retirements or disposition of
facilities are credited or charged to income.
Maintenance and repairs. All maintenance and repair costs
are charged against income, while significant improvements are
capitalized.
Derivative contracts. The Corporation enters into futures,
swaps, forwards and option contracts to manage its exposure to
price fluctuations on hydrocarbon transactions and its exposure to
exchange rate fluctuations on its debt and commitments denominated
in foreign currencies. Hedge accounting is applied to derivative
contracts that reduce the Corporation's exposure to price
fluctuations or that are entered into in conjunction with specific
fixed price natural gas sales contracts. Gains, losses and cash
flows from hedges are reported as components of the related
transactions.
Translation of foreign currencies. The U.S. dollar has been
determined to be the appropriate functional currency for
essentially all operations except certain foreign chemical
operations.
Environmental liabilities. The Corporation has provided in
its accounts for the reasonably estimable future costs of probable
environmental remediation obligations relating to current and past
activities, including obligations for previously disposed assets or
businesses. In the case of long-lived cleanup projects, the effects
of inflation and other factors, such as improved application of
known technologies and methodologies, are considered in determining
the amount of estimated liabilities. The liability is undiscounted
and primarily consists of costs such as site assessment,
monitoring, equipment, utilities and soil and ground water
treatment and disposal. Probable recoveries from third parties are
recorded as receivables.
Net income per share. Net income per share of common stock is
based on the monthly weighted average number of shares outstanding
during the year.
<PAGE>
<PAGE>
AMOCO CORPORATION AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued)
Note 2. Acquisitions, Dispositions and Special Items
In March 1996, the Corporation acquired the alpha-olefins and
related businesses of Albemarle Corporation for $535 million.
Other income in 1996 included gains on the sale of Amoco's
polystyrene foam products business ($97 million after tax) and on
certain Canadian asset dispositions ($56 million after tax).
Other income in 1995 included a gain of $132 million ($83
million after tax) related to the sale of Amoco Motor Club.
In 1994, earnings included benefits of $270 million related to
final settlements with the Internal Revenue Service involving crude
oil excise taxes ("COET") assessed in the 1980s. Of this amount,
$180 million represented interest on the settlements. Earnings
also included a gain of $45 million on the sale of certain European
oil and gas properties.
In the second quarter of 1994, a charge of $394 million ($256
million after tax) was accrued in conjunction with an
organizational restructuring. Included in selling and
administrative expenses were charges of $225 million ($146 million
after tax) related to employee-termination costs. Since July 1994,
charges against the accrual have totaled $204 million ($132 million
after tax), of which $36 million ($23 million after tax) was
charged in 1996. As of December 31, 1996, the remaining accrual
balance associated with restructuring was $21 million ($14 million
after tax), which is considered adequate for future severances of
about 300 staff positions as a result of the ongoing process
redesign to improve efficiencies in support functions. As a result
of restructuring, more than 4,400 positions have been eliminated
through year-end 1996, with more than 3,400 employees receiving
termination benefits. Also included in 1994 operating expenses
were charges of $169 million ($110 million after tax) related to a
reduction in carrying value of assets that have been divested.
Note 3. Cash Flow Information
The Consolidated Statement of Cash Flows provides information
about changes in cash and cash equivalents, including cash in
excess of daily requirements that is invested in marketable
securities, substantially all of which have a maturity of three
months or less when acquired. The effect of foreign currency
exchange rate fluctuations on total cash and marketable securities
balances was not significant.
<PAGE>
<PAGE>
AMOCO CORPORATION AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued)
Net cash provided by operating activities reflects cash
payments for interest and income taxes as follows:
1996 1995 1994
(millions of dollars)
Interest paid ......... $343 $327 $297
Income taxes paid ..... $951 $706 $903
Note 4. Financial Instruments and Hedging Activities
In the normal course of business, Amoco holds or issues
various financial instruments which expose the Company to financial
risk associated with market interest rates, currency exchange rates
and credit worthiness. Also, Amoco's petroleum and chemical
businesses are affected by commodity price movements. To manage a
portion of these inherent risks, Amoco purchases and sells various
derivative financial instruments and commodity futures contracts.
All financial instruments held by the Corporation are for purposes
other than trading.
Fair values. The carrying values of most financial instruments
are based on historical costs. The carrying values of receivables,
payables, marketable securities and short-term obligations
approximate their fair value. The estimated fair value of long-
term debt outstanding as of December 31, 1996 and 1995 was $4,301
million and $4,400 million, respectively. The estimated fair
values of marketable securities and debt were based on quoted
market prices for the same or similar issues, or the current rates
offered to the Corporation for issues with the same remaining
maturities.
Credit risks. A significant portion of Amoco's receivables is
from other oil and gas and chemical companies. Although collection
of these receivables could be influenced by economic factors
affecting these industries, the risk of significant loss is
considered remote. Substantially all derivatives are either
exchange traded or with major financial institutions, and the risk
of credit loss is considered remote.
<PAGE>
<PAGE>
AMOCO CORPORATION AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued)
Currency risks. The Corporation conducts its business
primarily in U.S. dollars. Significant exposures to foreign
currency exchange risk are reduced through the use of financial
instruments, primarily by hedging of foreign currency borrowings
and contractual commitments. The following table shows the amount
of debt, including current portions, denominated in foreign
currencies as of December 31, 1996 and 1995, and the face amounts
of foreign currency forward and option contracts that have been
designated as hedges of that debt:
1996 1995
Debt Hedge* Debt Hedge*
(millions of U.S. dollars)
British pound sterling $ 652 $ 954 $ 601 $ 940
Canadian dollar ...... $ 236 $ 281 $ 135 $ 173
* Includes tax effects.
In addition, the Corporation has entered into foreign currency
forward contracts to manage its foreign currency exposure
associated with construction projects in Singapore and Belgium.
The face amount of these forward contracts at year-end 1996 was $31
million and $12 million, respectively.
The hedge contracts generally have the same maturities as the
related debt or commitments. The carrying value and fair value of
the forward and option contracts were not material at December 31,
1996 and 1995.
Commodity price risks. The Corporation also enters into
futures, swaps and option contracts to manage a portion of its
exposure to price fluctuations on hydrocarbon transactions.
Natural gas futures, swaps and options are used to convert specific
sales and purchase contracts from fixed prices to market prices.
Swaps also are used to hedge exposure for price differences between
locations. Future contracts are used to convert specific gasoline
and distillate contracts from fixed to market prices.
<PAGE>
<PAGE>
AMOCO CORPORATION AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued)
Natural gas swap contracts outstanding under these programs at
both December 31, 1996 and 1995 totaled 334 trillion British
thermal units ("Btus"). Most contracts are for a remaining term of
less than one year, while contracts representing 54 trillion Btus
of natural gas have terms that extend from one to five years.
While these contracts have no carrying value, their fair value,
representing the estimated amount that would have been required to
terminate the swaps at year-end 1996, was $28 million for contracts
with favorable positions, and $19 million for contracts with
unfavorable positions. The comparable amounts for 1995 were $27
million for contracts with favorable positions and $43 million for
contracts with unfavorable positions.
At December 31, 1996, the Corporation also had fixed the sales
price or a range of prices of 12 million barrels of crude oil and
45 trillion Btus of natural gas production for periods up to 22
months using forward swaps and options. There were no significant
unrealized gains or losses on these contracts at December 31, 1996.
Commitments and guarantees. In the normal course of business,
the Corporation has entered into contracts for the purchase of
transportation capacity, materials and services over terms of up to
20 years. The remaining minimum payments required under these
contracts at December 31, 1996, totaled $558 million. At December
31, 1996, contingent liabilities of the Corporation included
guarantees of $36 million on outstanding loans of others.
Note 5. Inventories
Inventories at December 31, 1996 and 1995, are shown in the
following table:
December 31
1996 1995
(millions of dollars)
Crude oil and petroleum products ....... $ 315 $ 292
Chemical products ...................... 465 436
Other products and merchandise ......... 15 22
Materials and supplies ................. 274 291
Total ............................. $ 1,069 $ 1,041
<PAGE>
<PAGE>
AMOCO CORPORATION AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued)
During the year ended December 31, 1996, the Corporation
reduced certain inventory quantities which were valued at lower
LIFO costs prevailing in prior years. The effect of this reduction
was to increase net income by approximately $90 million.
Inventories carried under the LIFO method represented
approximately 48 percent of total year-end inventory carrying
values in 1996 and 53 percent in 1995. It is estimated that
inventories would have been approximately $1,400 million and $1,100
million higher than reported on December 31, 1996 and 1995,
respectively, if the quantities valued on the LIFO basis were
instead valued at current prices.
Note 6. Property, Plant and Equipment
Investment in properties at December 31, 1996 and 1995,
detailed by industry segment, was as follows.
1996 1995
Gross Net Net
(millions of dollars)
Exploration and production:
United States ........... $16,272 $ 7,032 $ 6,875
Non-U.S. ................ 15,545 6,078 5,842
Petroleum products ........ 9,675 4,950 5,004
Chemicals ................. 7,521 4,477 3,540
Corporate and other
operations .............. 1,498 863 785
$50,511 $23,400 $22,046
In the fourth quarter of 1995, the Corporation adopted
Statement of Financial Accounting Standards ("SFAS") No. 121,
"Accounting for the Impairment of Long-Lived Assets and for Long-
Lived Assets to be Disposed Of." Depreciation, depletion,
amortization, and retirements and abandonments for 1995 included
charges of $602 million ($380 million after tax) for the impairment
of long-lived assets. About $300 million of the after-tax charge
related to oil and gas producing properties in North America, most
of which were acquired or developed during periods of higher price
expectations. Another $42 million of the after-tax charge related
to certain unprofitable specialty polymer production facilities.
<PAGE>
<PAGE>
AMOCO CORPORATION AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued)
Note 7. Short-Term Obligations
Amoco's short-term obligations consist of notes payable and
commercial paper. Notes payable as of December 31, 1996, totaled
$80 million at an average annual interest rate of 6.2 percent,
compared with $36 million at an average annual interest rate of 5.7
percent at year-end 1995. Commercial paper borrowings at
December 31, 1996, were $741 million at an average annual interest
rate of 5.4 percent compared with $699 million at an average annual
interest rate of 5.7 percent as of December 31, 1995.
Bank lines of credit available to support commercial paper
borrowings of the Corporation amounted to $500 million at December
31, 1996 and $490 million at December 31, 1995. All of these were
supported by commitment fees.
Note 8. Accounts Payable
Accounts payable at December 31, 1996 and 1995, included
liabilities in the amount of $390 million and $320 million,
respectively, for checks issued in excess of related bank balances
but not yet presented for collection.
Note 9. Long-Term Debt
Amoco's long-term debt resides principally with two Amoco
subsidiaries--Amoco Company and Amoco Canada. Amoco Company
functions as the principal holding company for substantially all of
Amoco's petroleum and chemical operations, except Canadian
petroleum operations and selected other activities.
<PAGE>
<PAGE>
AMOCO CORPORATION AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued)
The components of long-term debt and year-end rates are
summarized as follows:
1996 1995
(millions of
dollars)
Amoco Company and subsidiaries
8 5/8% Debentures due 2016 ........ $ 32 $ 32
10.39% Notes due 2001 ............. 40 --
9 3/4% Debentures due 2016 ........ -- 57
9 7/8% Debentures due 2016 ........ -- 25
Environmental and other industrial
development obligations ........... 880 877
U.K. loans-6.7% Sterling(*) ....... 652 601
-U.S. dollar ............ -- 110
Argentina loan-6 5/8% due 2005 .... 100 100
Other indebtedness ................ 541 571
Subtotal ........................ 2,245 2,373
Less current maturities ........... 55 196
Total Amoco Company ............. 2,190 2,177
Amoco Canada
6 3/4% Debentures due 2005 ........ 299 299
7 1/4% Notes due 2002 ............. 299 299
6 3/4% Debentures due 2023 ........ 297 297
7.95% Debentures due 2022 ......... 296 296
7 1/4% Notes due 2002 ............. 253 253
8.98% Bonds due 2005 .............. 222 224
Other ............................. 40 39
Total Amoco Canada .............. 1,706 1,707
Other subsidiaries (less current
maturities) ....................... 257 78
Total long-term debt ............ $4,153 $3,962
(*)Weighted average interest rate at December 31, 1996.
Amoco Corporation guarantees the outstanding public debt
obligations of Amoco Company. Amoco Corporation and Amoco Company
guarantee the notes and debentures of Amoco Canada and Amoco
Argentina.
AmProp Inc., a real estate subsidiary, had long-term debt
secured by real estate assets, totaling $52 million at year-end
1996 and 1995, which is not guaranteed by Amoco Corporation or
Amoco Company.
<PAGE>
<PAGE>
AMOCO CORPORATION AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued)
Annual maturities of total long-term debt during the next five
years, including the portion classified as current, are $132
million in 1997, $252 million in 1998, $128 million in 1999, $166
million in 2000 and $246 million in 2001.
Note 10. Capital Stock
There were 800,000,000 shares of common stock without par
value authorized at December 31, 1996. Details concerning share
transactions are shown below:
1996 1995
Shares Amount Shares Amount
(thous) (mil) (thous) (mil)
Outstanding on Jan. 1 ..... 496,403 $2,590 496,393 $2,166
Stock repurchases ......... (457) (2) (10,604) (110)
Sales and distributions
under employee benefit
plans, etc. ............. 1,329 58 1,971 92
Canadian SEDs conversion .. -- -- 8,643 442
Shares outstanding on
Dec. 31 ................. 497,275 $2,646 496,403 $2,590
1994
Shares Amount
(thous) (mil)
Outstanding on Jan. 1 ..... 496,401 $2,147
Stock repurchases ......... (771) (10)
Sales and distributions
under employee benefit
plans, etc. ............. 763 29
Canadian SEDs conversion .. -- --
Shares outstanding on
Dec. 31 ................. 496,393 $2,166
In addition, there are 50 million shares of voting preferred
stock and 50 million shares of non-voting preferred stock
authorized. As of December 31, 1996, none of the preferred stock
had been issued.
<PAGE>
<PAGE>
AMOCO CORPORATION AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued)
Note 11. Leases
The Corporation leases various types of properties, including
service stations, tankers, buildings, railcars and other
facilities, some of which are subleased to others. Some of the
leases and subleases provide for contingent rentals based on
refined product throughput.
Summarized below as of December 31, 1996, are future minimum
rentals payable and related sublease rental income for non-
cancelable capital and operating leases.
Capital Leases Operating Leases
Rentals Rentals Rental
Payable Payable Income
(millions of dollars)
1997 ........................... $ 20 $ 191 $ 45
1998 ........................... 15 160 28
1999 ........................... 13 141 13
2000 ........................... 11 122 2
2001 ........................... 9 114 1
After 2002 ..................... 84 438 2
Total minimum rentals ........ $ 152 $ 1,166 $ 91
Less--Amounts
representing interest ...... 57
Capitalized lease obligations
(including $19 million
payable within one year) .... $ 95
Rental expense and related rental income applicable to
operating leases for the three years ended December 31, 1996, are
summarized below:
1996 1995 1994
(millions of dollars)
Minimum rental expense ....... $ 295 $ 269 $ 252
Contingent rental expense .... 42 25 19
Total ................... 337 294 271
Less--Related rental income .. 55 63 64
Net rental expense ...... $ 282 $ 231 $ 207
<PAGE>
<PAGE>
AMOCO CORPORATION AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued)
Note 12. Foreign Currency
A foreign currency loss of $17 million was reflected in income
in 1996, compared with gains of $1 million and $24 million for 1995
and 1994, respectively. In addition, a net translation loss of $31
million for 1996 and net translation gains of $19 million and $32
million for 1995 and 1994, respectively, were reflected in the
foreign currency translation adjustment account in shareholders'
equity.
Note 13. Interest Expense
The Corporation capitalizes interest cost related to the
financing of major projects under development. All other interest
is expensed as incurred. The components of interest expense are
summarized in the following table:
1996 1995 1994
(millions of dollars)
Short-term obligations ...... $ 47 $ 16 $ 19
Long-term obligations ....... 270 301 269
Total external financing .. 317 317 288
Other interest expense ...... (103) 30 30
214 347 318
Less--Capitalized interest .. 22 12 --
Net interest expense ...... $ 192 $ 335 $ 318
Note 14. Research and Development Expenses
Research and development costs are expensed as incurred and
amounted to $171 million in 1996, $175 million in 1995 and $255
million in 1994.
<PAGE>
<PAGE>
AMOCO CORPORATION AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued)
Note 15. Taxes
The provision for income taxes is composed of:
1996 1995 1994
(millions of dollars)
Federal--current ........ $ 513 $ 283 $ 392
--deferred ....... 57 (63) (74)
Foreign--current ........ 561 520 422
--deferred ....... (35) (232) (47)
State and local ......... 35 34 9
$1,131 $ 542 $ 702
The following is a reconciliation between the provision for
income taxes and income taxes determined by applying the federal
statutory rate to income before income taxes:
1996 1995
Percent Percent
Amount of Amount of
(mil- Pre-Tax (mil- Pre-Tax
lions) Income lions) Income
Pretax income:
U.S. source ...... $2,453 $1,556
Foreign source ... 1,512 848
$3,965 $2,404
Theoretical U.S.
income tax ....... $1,388 35.0 $ 842 35.0
Increase
(reduction)
due to:
Foreign taxes at
rates different
than the U.S. rate (17) (.4) 39 1.6
Effect of
foreign currency
gains/losses ..... 14 .3 (8) (.4)
Tax credits ...... (176) (4.4) (179) (7.4)
Tax-rate changes . -- -- (16) (.7)
Prior-year
adjustments ...... (26) (.7) (27) (1.1)
All other (net) .. (52) (1.3) (109) (4.5)
$1,131 28.5 $ 542 22.5
<PAGE>
<PAGE>
AMOCO CORPORATION AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued)
1994
Percent
of
Amount Pre-Tax
(millions) Income
Pretax income:
U.S. source ................. $ 1,738
Foreign source .............. 753
$ 2,491
Theoretical U.S. income tax . $ 872 35.0
Increase (reduction)
due to:
Foreign taxes at rates
different than the U.S. rate 120 4.8
Effect of foreign currency
gains/losses ................ (9) (.3)
Tax credits ................. (174) (7.0)
Tax-rate changes ............ -- --
Prior-year adjustments ...... (68) (2.7)
All other (net) ............. (39) (1.6)
$ 702 28.2
The aggregate federal and foreign deferred income tax balance
represents the tax effect of the following items at December 31:
1996 1995
(millions of dollars)
Tax credit and loss carryforwards ..... $1,450 $1,042
Exploration costs ..................... 339 347
Postretirement benefits ............... 537 527
Environmental costs ................... 273 361
Other ................................. 394 392
Gross deferred tax assets ............. 2,993 2,669
Deferred tax asset valuation allowance (569) (586)
Net deferred tax assets ............ $2,424 $2,083
Accelerated depreciation .............. $3,625 $3,183
Intangible drilling costs ............. 736 719
Other ................................. 249 347
Deferred tax liabilities ........... $4,610 $4,249
<PAGE>
<PAGE>
AMOCO CORPORATION AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued)
Taxes other than income taxes include:
1996 1995 1994
(millions of dollars)
Consumer excise taxes ........... $3,386 $3,339 $3,409
Production and severance taxes
United States ................. 140 100 112
Foreign ....................... 187 113 73
Property taxes .................. 290 254 289
Social Security, corporation and
other taxes ................... 212 236 270
$4,215 $4,042 $4,153
Undistributed earnings of certain foreign subsidiaries and
joint-venture companies aggregated $510 million on December 31,
1996, which, under existing law, will not be subject to U.S. tax
until distributed as dividends. Since the earnings have been or
are intended to be indefinitely reinvested in foreign operations,
no provision has been made for any U.S. taxes that may be
applicable thereto. Furthermore, any taxes paid to foreign
governments on those earnings may be used in whole or in part as
credits against the U.S. tax on any dividends distributed from such
earnings. It is not practicable to estimate the amount of
unrecognized deferred U.S. taxes on these undistributed earnings.
Note 16. Stock Option Plans
The Corporation's stock option plans approved by shareholders
provide for the granting of options with or without stock
appreciation rights ("SARs") to key managerial and other eligible
employees for up to 27 million shares of common stock. Such
options may be incentive stock options to the extent provided in
the Internal Revenue Code. No options may be granted under the
current plan after December 31, 2001. The grant price of each
option equals the fair market value of the Corporation's stock on
the date of grant. Options granted under the plans normally extend
for 10 years and generally become exercisable one or two years
after the date of the grant. Options with SARs permit the holder to
surrender exercisable options in exchange for payment determined by
the amount by which the market value of the shares on the dates the
rights are exercised exceeds the grant price. Such payments can be
made in shares, cash or a combination at the discretion of the
administering committee. No options were granted with SARs in
1996.
<PAGE>
<PAGE>
AMOCO CORPORATION AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued)
Option plan transactions in 1996, 1995 and 1994 are summarized
in the following table:
1996 1995 1994
Average Average Average
Shares Exercise Shares Exercise Shares Exercise
(000) Price (000) Price (000) Price
Outstanding at
Jan. 1 ........... 12,666 $52.50 11,595 $49.91 10,559 $48.30
Granted ........ 2,792 $73.21 2,282 $62.69 2,295 $55.07
Exercised ...... (1,218) $47.69 (921) $45.70 (684) $41.76
Surrendered
or terminated .. (186) $64.75 (214) $56.80 (454) $55.66
Canceled upon
exercise of SARs (121) $35.58 (76) $33.88 (121) $31.54
Outstanding at
Dec. 31 .......... 13,933 $57.06 12,666 $52.50 11,595 $49.91
Options exercisable at December 31, 1996, 1995 and 1994 were
10,153,687; 9,440,725; and 7,537,234; respectively. Of the total
options outstanding on December 31, 1996, 149,000 were with SARs.
In 1996, Amoco adopted the provisions of SFAS No. 123,
"Accounting for Stock-Based Compensation." As permitted under this
Statement, the Corporation retained its existing method of
accounting for stock compensation. Pro forma net income and
earnings per share effects of applying the provisions of this
Statement were immaterial.
The following table summarizes information about the options
outstanding at December 31, 1996:
Outstanding Exercisable
Average
Remaining Average Average
Range of Shares Contractual Exercise Shares Exercise
Exercise Prices (000) Life (years) Price (000) Price
$ 37 - 44 2,843 3.3 $ 42 2,843 $ 42
$ 52 - 56 4,569 5.2 $ 54 4,569 $ 54
$ 57 - 66 3,786 7.3 $ 60 2,742 $ 59
$ 67 - 75 2,735 9.2 $ 73 -- $ --
<PAGE>
<PAGE>
AMOCO CORPORATION AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued)
The Corporation's restricted stock grant plans provide for the
awarding of shares of Corporation common stock up to 5 million
shares to selected employees of Amoco and its participating
subsidiaries and outside directors. Shares issued under the plans
may not be sold or otherwise transferred for a minimum period as
established at the time of the grant. The shares generally are
subject to forfeiture if the recipient's employment terminates
during the specified period unless such termination is due to
death, total disability or involuntary retirement. Shares issued
have dividend and voting rights identical to other outstanding
shares of the Corporation's common stock. During 1996, 99,250
shares were issued under the current plans. No restricted shares
may be issued under the current plan after December 31, 2001.
Note 17. Employee Incentive Compensation Programs
Management incentive compensation plans approved by
shareholders provide for the granting of awards to key managerial
employees and executives of the Corporation and certain
subsidiaries. Amounts charged against earnings in anticipation of
awards to be made later were $21 million in 1996, $16 million in
1995, and $15 million in 1994. Awards made in 1996, 1995 and 1994
amounted to $18 million, $20 million and $21 million, respectively.
The Amoco Performance Share Plan allocates Amoco stock to
eligible employees when the Corporation's total return to
shareholders, based on the average return for three years, meets or
exceeds the average return achieved by a select group of
competitors. No contributions were made on behalf of employees in
1996 and 1995. The return on Amoco stock was above the competitor
average in 1994. As a result, employees earned stock equal to 3.5
percent of compensation. The amount charged to expense in 1994 was
$59 million.
Note 18. Retirement Plans
The Corporation and its subsidiaries have a number of defined
benefit pension plans covering most employees. Plan benefits are
generally based on employees' years of service and average final
compensation. Essentially all of the cost of these plans is borne
by the Corporation. The Corporation makes contributions to the
plans in amounts that are intended to provide for the cost of
pension benefits over the service lives of employees.
<PAGE>
<PAGE>
AMOCO CORPORATION AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued)
The funded status of the plans as of December 31 for 1996 and
1995 was as follows:
Plans for which
Assets Benefits
Exceed Exceed
Benefits Assets
(millions of dollars)
1996
Fair value of plan assets, principally
equity and fixed-income securities ... $ 2,910 $ --
Actuarial present value of benefit
obligations:
Accumulated benefit obligation* .... 2,785 125
Additional benefits based on
estimated future salary levels ..... 517 31
Projected benefit obligation ("PBO") 3,302 156
Plan assets under PBO ................ (392) (156)
Unrecognized net (gains) losses
at transition ........................ (47) 18
Other unrecognized net losses ........ 396 59
Unrecognized prior service cost ...... 61 (19)
Minimum pension liability adjustment . -- (39)
Net pension cost prepaid (accrued) ... $ 18 $ (137)
1995
Fair value of plan assets, principally
equity and fixed-income securities ... $ 383 $ 2,218
Actuarial present value of benefit
obligations:
Accumulated benefit obligation* .... 318 2,452
Additional benefits based on
estimated future salary levels ..... 48 501
Projected benefit obligation ("PBO") 366 2,953
Plan assets over (under) PBO ......... 17 (735)
Unrecognized net gains at transition . (13) (21)
Other unrecognized net losses ........ 25 602
Unrecognized prior service cost ...... 8 39
Minimum pension liability adjustment . -- (132)
Net pension cost prepaid (accrued) ... $ 37 $ (247)
* Accumulated benefits totaling $311 million and $308 million were
non-vested at December 31, 1996 and 1995, respectively.
<PAGE>
<PAGE>
AMOCO CORPORATION AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued)
The actuarial assumptions used for the Corporation's principal
pension plans for 1996 and 1995 were as follows:
1996 1995
Discount rate for service and interest cost .. 7.0% 8.5%
Discount rate for the projected benefit
obligation ................................. 7.0% 7.0%
Rate of compensation increase for the
projected benefit obligation ............... 5.0% 5.0%
Long-term rate of return on assets ........... 10.0% 10.0%
The components of net pension cost for the past three years
were as follows:
1996 1995 1994
(millions of dollars)
Service cost--benefits earned
during the period ............. $ 121 $ 98 $ 113
Interest cost on projected
benefit obligation ............ 236 242 221
Actual (gain) loss on assets .. (446) (492) 53
Unrecognized gain (loss) ...... 186 217 (311)
Recognized gain on assets ..... (260) (275) (258)
Settlement/curtailment loss ... 4 2 21
Amortization of unrecognized
amounts ....................... 29 12 22
Net pension cost .............. $ 130 $ 79 $ 119
Most employees are also eligible to participate in defined
contribution plans by contributing a portion of their compensation.
The Corporation matches contributions up to specified percentages
of each employee's compensation. Matching contributions charged to
income were $80 million in 1996, $83 million in 1995 and $99
million in 1994.
Note 19. Other Postretirement Benefits
The Corporation and its subsidiaries provide certain health
care and life insurance benefits for retired employees.
Substantially all of the Corporation's domestic employees and
employees in certain foreign countries are provided these benefits
through insurance companies whose premiums are based on benefits
paid during the year. The cost of such benefits is recognized
during employees' years of active service.
<PAGE>
<PAGE>
AMOCO CORPORATION AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued)
The status of the Corporation's unfunded plans as of December
31 for 1996 and 1995 was as follows:
1996 1995
(millions of
dollars)
Accumulated benefit obligation
Retirees .............................. $ 642 $ 655
Fully eligible active plan participants 216 157
Other active plan participants ........ 281 370
Total ................................. 1,139 1,182
Unrecognized net gains .................. 213 106
Unrecognized prior service gains ........ 191 235
Accrued postretirement benefit cost ..... $ 1,543 $ 1,523
The actuarial assumptions used for the Corporation's principal
postretirement benefit plans for 1996 and 1995 were as follows:
1996 1995
Discount rate for service and interest cost ........ 7.0% 8.5%
Discount rate for the accumulated benefit obligation 7.0% 7.0%
Rate of compensation increase for the accumulated
benefit obligation ................................. 5.0% 5.0%
Assumed current year health care cost trend rate
--retirees under 65 ........................... 9.4% 10.3%
--Medicare eligible retirees .................. 7.5% 8.0%
Assumed ultimate trend rate ........................ 5.0% 5.0%
Year ultimate health care cost rate will be achieved 2002 2002
Effect of 1% increase in health care cost trend
rates (millions)
--annual aggregate service and interest costs . $ 15 $ 12
--accumulated postretirement benefit obligation $ 120 $ 119
The components of net postretirement benefit costs for the
past three years were as follows:
1996 1995 1994
(millions of dollars)
Service cost--benefits earned
during the period .............. $ 30 $ 26 $ 34
Interest cost on accumulated
benefit obligation ............. 81 86 89
Amortization and other ......... (39) (36) (33)
Net postretirement benefit cost $ 72 $ 76 $ 90
<PAGE>
<PAGE>
AMOCO CORPORATION AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued)
Note 20. Litigation
The Internal Revenue Service ("IRS") has challenged the
application of certain foreign income taxes as credits against the
Corporation's U.S. taxes that otherwise would have been payable for
the years 1980 through 1992. On June 18, 1992, the IRS issued a
statutory Notice of Deficiency for additional taxes in the amount
of $466 million, plus interest, relating to 1980 through 1982. The
Corporation filed a petition in the U.S. Tax Court contesting the
IRS statutory Notice of Deficiency. Trial on the matter was held
in April 1995, and a decision was rendered by the U.S. Tax Court in
March 1996, in Amoco's favor. The IRS has appealed the Tax Court's
decision to the U.S. Court of Appeals for the Seventh Circuit. A
comparable adjustment of foreign tax credits for each year has been
proposed for the years 1983 through 1992 based upon subsequent IRS
audits. The Corporation believes that the foreign income taxes
have been reflected properly in its U.S. federal tax returns.
Consequently, this dispute is not expected to have a material
adverse effect on liquidity, results of operations, or the
consolidated financial position of the Corporation.
Note 21. Other Contingencies
Amoco is subject to federal, state and local environmental
laws and regulations. Amoco is currently participating in the
cleanup of numerous sites pursuant to such laws and regulations.
The reasonably estimable future costs of probable environmental
obligations, including Amoco's probable costs for obligations for
which Amoco is jointly and severally liable, and for assets or
businesses that were previously disposed, have been provided for in
the Corporation's results of operations. These estimated costs
represent the amount of expenditures expected to be incurred in the
future to remediate sites with known environmental obligations.
The accrued liability represents a reasonable best estimate of
Amoco's remediation liability. As the scope of the obligations
becomes better defined, there may be changes in the estimated
future costs, which could result in charges against the company's
future results of operations. The ultimate amount of any such
future costs, and the range within which such costs can be expected
to fall, cannot be determined. Although the costs could be
significant in relationship to the results of operations in any one
period, they are not expected to have a material effect on Amoco's
liquidity or consolidated financial position.
<PAGE>
<PAGE>
AMOCO CORPORATION AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued)
Note 22. Summarized Financial Data
The Corporation's principal subsidiary, Amoco Company, is the
holding company for substantially all petroleum and chemical
operating subsidiaries except Amoco Canada and selected other
activities. Amoco guarantees the outstanding public debt
obligations of Amoco Company.
Summarized financial data for Amoco Company are presented as
follows:
1996 1995 1994
(millions of dollars)
For the years ended December 31:
Revenues (including excise
taxes) ....................... $32,629 $28,339 $27,841
Operating profit ............. $ 3,735 $ 2,783 $ 2,470
Net income ................... $ 2,402 $ 1,798 $ 1,878
At December 31:
Current assets ............... $ 6,361 $ 5,303 $ 5,399
Total assets ................. $29,208 $26,326 $24,549
Current liabilities .......... $ 4,926 $ 4,578 $ 4,142
Long-term debt - affiliates .. $ 4,731 $ 4,608 $ 4,104
- other ....... $ 2,190 $ 2,177 $ 2,086
Deferred credits ............. $ 4,524 $ 4,397 $ 4,584
Minority interest ............ $ 131 $ 110 $ 5
Shareholder's equity ......... $12,630 $10,456 $ 9,628
Annual maturities of long-term debt during the next five
years, including the portion classified as current, are $55 million
in 1997, $128 million in 1998, $80 million in 1999, $122 million in
2000 and $205 million in 2001.
Amoco Canada is a wholly owned subsidiary of Amoco
Corporation. Amoco and Amoco Company guarantee the notes and
debentures of Amoco Canada.
<PAGE>
<PAGE>
AMOCO CORPORATION AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued)
Summarized financial data for Amoco Canada are presented as
follows:
1996 1995 1994
(millions of dollars)
For the years ended December 31:
Revenues ..................... $ 4,598 $ 3,619 $ 3,256
Net income (loss) ............ $ 307 $ (205) $ 82
At December 31:
Current assets ............... $ 1,615 $ 1,252 $ 1,354
Total assets ................. $ 4,412 $ 4,493 $ 4,613
Current liabilities .......... $ 1,110 $ 2,494 $ 1,976
Non-current liabilities ...... $ 3,377 $ 2,381 $ 2,815
Shareholder's deficit ........ $ (75) $ (382) $ (178)
There are no scheduled maturities of long-term debt during the
next five years.
Amoco Argentina Oil Company ("Amoco Argentina") is an indirect
wholly owned subsidiary of Amoco. Amoco and Amoco Company
guarantee the outstanding public debt obligations of Amoco
Argentina.
Summarized financial data for Amoco Argentina are presented as
follows:
1996 1995 1994
(millions of dollars)
For the years ended December 31:
Revenues ..................... $ 336 $ 258 $ 189
Net income ................... $ 127 $ 88 $ 76
At December 31:
Current assets ............... $ 251 $ 73 $ 97
Total assets ................. $ 613 $ 389 $ 349
Current liabilities .......... $ 87 $ 49 $ 58
Non-current liabilities ...... $ 237 $ 113 $ 100
Shareholder's equity ......... $ 289 $ 227 $ 191
There are no scheduled maturities of long-term debt during the
next five years.
<PAGE>
<PAGE>
AMOCO CORPORATION AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued)
Note 23. Segment and Geographic Data
The Corporation operates worldwide in the petroleum and
chemical industries, in several industry segments. Petroleum
operations include exploration and production ("E&P") and petroleum
products segments. The E&P segment is engaged in exploring for,
developing and producing crude oil and natural gas; and extraction,
transportation and marketing of natural gas and natural gas liquids
("NGL"). The petroleum products segment is responsible for refining
operations, marketing of all petroleum products, the transportation
of crude oil and petroleum products, and associated supply and
trading activities, primarily in the United States. The chemical
segment manufactures and sells various petroleum-based chemical
products. Corporate and other operations include net interest and
general corporate expenses, and the results of investments in
technology companies, real estate interests and other activities.
Intersegment and intergeographic sales are accounted for at
prices that approximate market prices. Income taxes are generally
assigned to the operations that give rise to the tax effects.
Identifiable assets are those used in the operations of each
segment or area, including intersegment or intergeographic
receivables. Corporate assets consist primarily of cash, marketable
securities and the unamortized cost of purchased tax benefits.
<PAGE>
<PAGE>
Statement of Information by Industry Segment
(millions of dollars) Petroleum Operations
Exploration
and Petroleum Chemical
Production Products Operations
Year 1996
Revenues other than intersegment
sales ........................... $ 9,396 $ 20,767 $ 5,698
Intersegment sales .............. 4,223 1,603 71
Total revenues ................ $ 13,619 $ 22,370 $ 5,769
Operating profit ................ $ 3,063 $ 479 $ 924
Equity in earnings of others .... (1) 32 112
General corporate amounts .......
Interest expense ................
Income taxes .................... (1,101) (160) (301)
Net income .................... $ 1,961 $ 351 $ 735
Depreciation and related charges $ 1,491 $ 432 $ 261
Capital expenditures ............ $ 2,452 $ 452 $ 985
Identifiable assets ............. $ 16,940 $ 6,422 $ 6,215
Equity investments and related
advances ........................ $ 71 $ 82 $ 565
Corporate
and
Other
Operations Consolidated*
Year 1996
Revenues other than intersegment
sales ........................... $ 44 $ 36,112
Intersegment sales .............. -- --
Total revenues ................ $ 44 $ 36,112
Operating profit ................ $ (5) $ 4,461
Equity in earnings of others .... 1 144
General corporate amounts ....... (448) (448)
Interest expense ................ (192) (192)
Income taxes .................... 431 (1,131)
Net income .................... $ (213) $ 2,834
Depreciation and related charges $ 87 $ 2,271
Capital expenditures ............ $ 116 $ 4,005
Identifiable assets ............. $ 2,513 $ 31,358
Equity investments and related
advances ........................ $ 24 742
Total assets .................. $ 32,100
* After elimination of intersegment transactions.
<PAGE>
<PAGE>
Statement of Information by Industry Segment (continued)
(millions of dollars) Petroleum Operations
Exploration
and Petroleum Chemical
Production Products Operations
Year 1995
Revenues other than intersegment
sales ........................... $ 6,978 $ 18,018 $ 5,655
Intersegment sales .............. 3,494 1,066 62
Total revenues ................ $ 10,472 $ 19,084 $ 5,717
Operating profit ................ $ 1,200 $ 498 $ 1,256
Equity in earnings of others .... -- 35 133
General corporate amounts .......
Interest expense ................
Income taxes .................... (395) (153) (426)
Net income .................... $ 805 $ 380 $ 963
Depreciation and related charges $ 1,996 $ 446 $ 293
Capital expenditures ............ $ 2,104 $ 461 $ 850
Identifiable assets ............. $ 15,241 $ 6,694 $ 5,183
Equity investments and related
advances ........................ $ 47 $ 33 $ 502
Corporate
and
Other
Operations Consolidated*
Year 1995
Revenues other than intersegment
sales ........................... $ 46 $ 31,004
Intersegment sales .............. -- --
Total revenues ................ $ 46 $ 31,004
Operating profit ................ $ (75) $ 2,879
Equity in earnings of others .... 2 170
General corporate amounts ....... (310) (310)
Interest expense ................ (335) (335)
Income taxes .................... 432 (542)
Net income .................... $ (286) $ 1,862
Depreciation and related charges $ 59 $ 2,794
Capital expenditures ............ $ 111 $ 3,526
Identifiable assets ............. $ 2,705 $ 29,241
Equity investments and related
advances ........................ $ 22 604
Total assets .................. $ 29,845
* After elimination of intersegment transactions.
<PAGE>
<PAGE>
Statement of Information by Industry Segment (continued)
(millions of dollars) Petroleum Operations
Exploration
and Petroleum Chemical
Production Products Operations
Year 1994
Revenues other than intersegment
sales ........................... $ 7,124 $ 18,185 $ 4,445
Intersegment sales .............. 2,989 1,093 69
Total revenues ................ $ 10,113 $ 19,278 $ 4,514
Operating profit ................ $ 1,649 $ 576 $ 603
Equity in earnings of others .... 4 31 98
General corporate amounts .......
Interest expense ................
Income taxes .................... (623) (197) (216)
Net income .................... $ 1,030 $ 410 $ 485
Depreciation and related charges $ 1,531 $ 444 $ 195
Capital expenditures ............ $ 1,618 $ 417 $ 467
Identifiable assets ............. $ 15,140 $ 6,866 $ 4,371
Equity investments and related
advances ........................ $ 34 $ 32 $ 351
Corporate
and
Other
Operations Consolidated*
Year 1994
Revenues other than intersegment
sales ........................... $ 106 $ 30,362
Intersegment sales .............. -- --
Total revenues ................ $ 106 $ 30,362
Operating profit ................ $ (216) $ 2,612
Equity in earnings of others .... -- 133
General corporate amounts ....... 64 64
Interest expense ................ (318) (318)
Income taxes .................... 334 (702)
Net income .................... $ (136) $ 1,789
Depreciation and related charges $ 69 $ 2,239
Capital expenditures ............ $ 70 $ 2,572
Identifiable assets ............. $ 3,014 $ 28,896
Equity investments and related
advances ........................ $ 3 420
Total assets .................. $ 29,316
* After elimination of intersegment transactions.
<PAGE>
<PAGE>
Statement of Information by Geographic Area
United
(millions of dollars) States Canada Europe
Year 1996
Revenues other than
intergeographic sales . $27,936 $3,472 $1,916
Intergeographic sales . 1,200 1,040 172
Total revenues ...... $29,136 $4,512 $2,088
Operating profit ...... $ 2,876 $ 563 $ 280
Net income ............ $ 2,094 $ 378 $ 126
Capital expenditures .. $ 2,219 $ 390 $ 636
Identifiable assets ... $20,319 $3,622 $3,101
Equity investments
and related advances .. $ 85 $ -- $ 2
Equity in earnings
of others ............. $ 32 $ -- $ 1
Consol-
Cor- idated
Other porate (*)
Year 1996
Revenues other than
intergeographic sales . $2,583 $36,112
Intergeographic sales . 470 --
Total revenues ...... $3,053 $36,112
Operating profit ...... $ 742 $ 4,461
Net income ............ $ 444 $ (208) $ 2,834
Capital expenditures .. $ 690 $ 70 $ 4,005
Identifiable assets ... $3,612 $1,901 $31,358
Equity investments
and related advances .. $ 655 742
Total assets ........ $32,100
Equity in earnings
of others ............. $ 111 $ 144
(*) After elimination of intergeographic transactions.
<PAGE>
<PAGE>
Statement of Information by Geographic Area (continued)
United
(millions of dollars) States Canada Europe
Year 1995
Revenues other than
intergeographic sales . $23,978 $2,676 $1,749
Intergeographic sales . 1,335 942 170
Total revenues ...... $25,313 $3,618 $1,919
Operating profit ...... $ 2,065 $ 29 $ 223
Net income ............ $ 1,582 $ 11 $ 142
Capital expenditures .. $ 2,039 $ 311 $ 452
Identifiable assets ... $18,880 $3,591 $2,755
Equity investments
and related advances .. $ 53 $ 32 $ 6
Equity in earnings
of others ............. $ 36 $ -- $ 1
Consol-
Cor- idated
Other porate (*)
Year 1995
Revenues other than
intergeographic sales . $2,294 $31,004
Intergeographic sales . 404 --
Total revenues ...... $2,698 $31,004
Operating profit ...... $ 562 $ 2,879
Net income ............ $ 364 $ (237) $ 1,862
Capital expenditures .. $ 658 $ 66 $ 3,526
Identifiable assets ... $2,713 $2,189 $29,241
Equity investments
and related advances .. $ 513 604
Total assets ........ $29,845
Equity in earnings
of others ............. $ 133 $ 170
(*) After elimination of intergeographic transactions.
<PAGE>
<PAGE>
Statement of Information by Geographic Area (continued)
United
(millions of dollars) States Canada Europe
Year 1994
Revenues other than
intergeographic sales . $24,003 $2,555 $1,403
Intergeographic sales . 711 706 24
Total revenues ...... $24,714 $3,261 $1,427
Operating profit ...... $ 1,836 $ 349 $ 47
Net income ............ $ 1,393 $ 203 $ 4
Capital expenditures .. $ 1,537 $ 340 $ 126
Identifiable assets ... $18,254 $3,724 $2,481
Equity investments
and related advances .. $ 36 $ 33 $ 4
Equity in earnings
of others ............. $ 30 $ 4 $ --
Consol-
Cor- idated
Other porate (*)
Year 1994
Revenues other than
intergeographic sales . $1,899 $30,362
Intergeographic sales . 473 --
Total revenues ...... $2,372 $30,362
Operating profit ...... $ 380 $ 2,612
Net income ............ $ 188 $ 1 $ 1,789
Capital expenditures .. $ 524 $ 45 $ 2,572
Identifiable assets ... $2,292 $2,634 $28,896
Equity investments
and related advances .. $ 347 420
Total assets ........ $29,316
Equity in earnings
of others ............. $ 99 $ 133
(*) After elimination of intergeographic transactions.
<PAGE>
<PAGE>
AMOCO CORPORATION AND SUBSIDIARIES
SUPPLEMENTAL INFORMATION
1. Quarterly Results and Stock Market Data
Net Cash
Net Income Dividends
Operating Income Per Per
Revenues Profit (1) Share Share
(millions of dollars except per-share amounts)
1996
First quarter .. $ 8,214 $ 1,092 $ 728 $ 1.47 $ .65
Second quarter . 8,765 989 600 1.20 .65
Third quarter .. 9,018 1,019 635 1.28 .65
Fourth quarter . 10,115 1,361 871 1.74 .65
1995
First quarter .. $ 7,564 $ 797 $ 523 $ 1.05 $ .60
Second quarter . 7,713 881 533 1.08 .60
Third quarter .. 7,638 922 599 1.21 .60
Fourth quarter . 8,089 279 207 .42 .60
Common Stock
Price Ranges
(2)
High Low
1996
First quarter .. $ 74 1/8 $ 67 1/2
Second quarter . 75 1/8 69 1/2
Third quarter .. 72 5/8 65
Fourth quarter . 83 1/2 70 1/4
1995
First quarter .. $ 64 1/4 $ 56 3/8
Second quarter . 69 3/4 61 3/8
Third quarter .. 69 1/4 62 1/2
Fourth quarter . 72 5/8 63 1/8
(1) Fourth-quarter 1996 earnings included a gain of $90 million
related to a reduction in LIFO inventory levels. Third-quarter
1996 earnings included a gain on the sale of Amoco's
polystyrene foam products business of $97 million. Gains of
$56 million on certain Canadian asset dispositions benefited
first-quarter 1996 results. Fourth-quarter 1995 earnings
included charges of $380 million related to impairment of long-
lived assets and a gain of $83 million on the sale of Amoco
Motor Club.
(2) The common stock price range is that on the New York Stock
Exchange. Amoco's common stock is also traded on the Chicago,
Pacific, Toronto and Swiss stock exchanges.
<PAGE>
<PAGE>
2. Oil and Gas Exploration and Production Activities
The tables presented below provide supplemental information
about oil and gas exploration and production activities as defined
by SFAS No. 69, "Disclosures about Oil and Gas Producing
Activities." This information excludes other activities within the
exploration and production segment, primarily activities associated
with marketing of natural gas and supply and marketing of NGL in
Canada.
Results of Operations for Oil and Gas Producing Activities
United World-
(millions of dollars) States Canada Europe Other wide
1996
Oil and gas production
revenues:
From consolidated
subsidiaries ............. $3,075 $ 369 $ 3 $1,146 $4,593
From unaffiliated entities 719 346 817 853 2,735
Other revenues ............. 111 86 83 97 377
Total revenues ........... 3,905 801 903 2,096 7,705
Production costs:
Taxes other than income .. 261 15 33 170 479
Other production costs ... 760 235 256 414 1,665
Exploration expenses ....... 142 68 141 265 616
Depreciation, depletion and
amortization expense ..... 682 190 164 351 1,387
Other related costs ........ 459 43 64 130 696
Total costs .............. 2,304 551 658 1,330 4,843
Operating profit ........... 1,601 250 245 766 2,862
Income tax expense ......... 398 54 127 433 1,012
Results of operations .... $1,203 $ 196 $ 118 $ 333 $1,850
1995
Oil and gas production
revenues:
From consolidated
subsidiaries ............. $2,223 $ 331 $ -- $ 908 $3,462
From unaffiliated entities 512 274 719 717 2,222
Other revenues ............. 155 100 102 92 449
Total revenues ........... 2,890 705 821 1,717 6,133
Production costs:
Taxes other than income .. 179 13 25 112 329
Other production costs ... 744 240 233 369 1,586
Exploration expenses ....... 152 112 123 223 610
Depreciation, depletion and
amortization expense ..... 973 350 197 337 1,857
Other related costs ........ 321 73 85 117 596
Total costs .............. 2,369 788 663 1,158 4,978
Operating profit ........... 521 (83) 158 559 1,155
Income tax expense ......... 15 (37) 70 314 362
Results of operations .... $ 506 $ (46) $ 88 $ 245 $ 793
<PAGE>
<PAGE>
Results of Operations for Oil and Gas Producing Activities
(continued)
United World-
(millions of dollars) States Canada Europe Other wide
1994
Oil and gas production
revenues:
From consolidated
subsidiaries ............. $2,497 $ 323 $ 2 $ 877 $3,699
From unaffiliated entities 460 412 668 603 2,143
Other revenues ............. 263 186 100 69 618
Total revenues ........... 3,220 921 770 1,549 6,460
Production costs:
Taxes other than income .. 242 17 21 65 345
Other production costs ... 788 265 278 401 1,732
Exploration expenses ....... 113 117 178 225 633
Depreciation, depletion and
amortization expense ..... 629 261 215 340 1,445
Other related costs ........ 412 27 130 151 720
Total costs .............. 2,184 687 822 1,182 4,875
Operating profit ........... 1,036 234 (52) 367 1,585
Income tax expense ......... 188 113 11 290 602
Results of operations .... $ 848 $ 121 $ (63) $ 77 $ 983
Oil and gas production revenues reflect the market prices of
net production sold or transferred, with appropriate adjustments
for royalties, net profits interest and other contractual
provisions. Other revenues in 1994 include the U.S. COET
settlement. Taxes other than income include production and
severance taxes and property taxes. Other production costs are
lifting costs incurred to operate and maintain productive wells and
related equipment, including such costs as operating labor, repairs
and maintenance, materials, supplies and fuel consumed. Also
included are operating costs of field natural gas liquids plants.
Production costs include related administrative expenses and
depreciation applicable to support equipment associated with
production activities.
Exploration expenses include the costs of geological and
geophysical activity, carrying and retaining undeveloped properties
and drilling exploratory wells determined to be non-productive.
Depreciation, depletion and amortization ("DD&A") expense relates
to capitalized costs incurred in acquisition, exploration and
development activities and does not include depreciation applicable
to support equipment. In 1995, DD&A included $355 million and $121
million in the United States and Canada, respectively, related to
impairment of long-lived assets. Included in other related costs
are significant, non-recurring items and purchases of natural gas
for field natural gas liquids plants. Significant, non-recurring
items include $102 million for restructuring in 1994.
Income taxes are generally assigned to the operations that
give rise to the tax effects. Results of operations do not include
interest expense and general corporate amounts nor their associated
tax effects.
<PAGE>
<PAGE>
Standardized Measure of Discounted Future Net Cash Flows
Relating to Proved Oil and Gas Reserves
The standardized measure of discounted future net cash flows
relating to proved oil and gas reserves is prescribed by SFAS No.
69. The statement requires measurement of future net cash flows
through assignment of a monetary value to proved reserve quantities
and changes therein using a standardized formula. The amounts
shown are based on prices and costs at the end of each period,
legislated tax rates and a 10 percent annual discount factor.
Because the calculation assumes static economic and political
conditions and requires extensive judgment in estimating the timing
of production, the resultant future net cash flows are not
necessarily indicative of the fair market value of estimated proved
reserves, but provide a reference point that may assist the user in
projecting future cash flows.
Summarized below is the standardized measure of discounted
future net cash flows relating to proved oil and gas reserves at
December 31, 1996, 1995 and 1994.
United World-
(millions of dollars) States Canada Europe Other wide
December 31, 1996
Future cash inflows ....... $65,932 $10,929 $11,546 $21,813 $110,220
Future development and
production costs .......... 15,749 3,665 4,174 7,595 31,183
Future income taxes ....... 15,497 2,592 3,035 5,854 26,978
Future net cash flows ..... 34,686 4,672 4,337 8,364 52,059
Ten percent annual discount 19,194 2,115 1,759 3,700 26,768
Discounted net cash flows . $15,492 $ 2,557 $ 2,578 $ 4,664 $ 25,291
December 31, 1995
Future cash inflows ....... $33,326 $ 7,534 $ 8,671 $13,359 $ 62,890
Future development and
production costs .......... 15,923 3,759 4,174 5,173 29,029
Future income taxes ....... 4,438 1,155 1,841 3,401 10,835
Future net cash flows ..... 12,965 2,620 2,656 4,785 23,026
Ten percent annual discount 7,385 1,013 948 1,844 11,190
Discounted net cash flows . $ 5,580 $ 1,607 $ 1,708 $ 2,941 $ 11,836
December 31, 1994
Future cash inflows ....... $33,605 $ 8,135 $ 6,736 $10,951 $ 59,427
Future development and
production costs .......... 16,922 3,686 3,939 4,207 28,754
Future income taxes ....... 3,999 1,471 950 2,776 9,196
Future net cash flows ..... 12,684 2,978 1,847 3,968 21,477
Ten percent annual discount 7,189 1,324 538 1,435 10,486
Discounted net cash flows . $ 5,495 $ 1,654 $ 1,309 $ 2,533 $ 10,991
<PAGE>
<PAGE>
Future cash inflows are computed by applying the year-end
prices of oil and gas to proved reserve quantities as reported in
the tables under the heading "Estimated Proved Reserves." Future
price changes are considered only to the extent provided by
contractual arrangements. Future development and production costs
are estimated expenditures to develop and produce the proved
reserves based on year-end costs and assuming continuation of
existing economic conditions. Future income taxes are calculated
by applying appropriate statutory tax rates to future pre-tax net
cash flows from proved oil and gas reserves less recovery of the
tax basis of proved properties, and adjustments for permanent
differences.
Statement of Changes in Standardized Measure
of Discounted Future Net Cash Flows
The following table details the changes in the standardized
measure of discounted future net cash flows for the three years
ended December 31, 1996:
1996 1995 1994
(millions of dollars)
Balance at January 1 $11,836 $10,991 $10,044
Changes resulting from:
Sales and transfers of oil and gas
produced, net of production costs ... (5,184) (3,769) (3,765)
Net changes in prices, and
development and production costs .... 17,332 407 1,059
Current-year expenditures for
development ......................... 2,007 1,707 1,499
Extensions, discoveries and
improved recovery, less related costs 3,928 1,922 1,128
(Sales) purchases of reserves
in place ............................ (332) 128 (45)
Revisions of previous quantity
estimates ........................... 445 56 303
Accretion of discount ............... 1,735 1,441 1,331
Net change in income taxes .......... (7,375) (833) (253)
Other ............................... 899 (214) (310)
Balance at December 31 ................ $25,291 $11,836 $10,991
The prices of crude oil and natural gas have fluctuated over
the past several years, which effects the computed future cash
flows over the period shown. Specifically, the prices of crude oil
and natural gas increased significantly towards the end of 1996.
Consequently, the standardized measure of discounted future net
cash flows, which is based on year-end prices, also increased
significantly. Because the price of crude oil and natural gas is
likely to remain volatile in the future, price changes can be
expected to continue to significantly affect the standardized
measure of discounted future net cash flows.
<PAGE>
<PAGE>
Estimated Proved Reserves
Net proved reserves of crude oil (including condensate), NGL
and natural gas at the beginning and end of 1996, 1995 and 1994,
with the detail of changes during those years, are presented below.
Reported quantities include reserves in which the Corporation holds
an economic interest under production-sharing and other types of
operating agreements with foreign governments. The estimates were
prepared by Corporation engineers and are based on current
technology and economic conditions. The Corporation considers such
estimates to be reasonable and consistent with current knowledge of
the characteristics and extent of proved production. These
estimates include only those amounts considered to be proved
reserves and do not include additional amounts that may result from
extensions of currently proved areas, or amounts that may result
from new discoveries in the future, or from application of
secondary or tertiary recovery processes not yet determined to be
commercial. Proved developed reserves are those reserves that are
expected to be recovered through existing wells with existing
equipment and operating methods.
<PAGE>
<PAGE>
Crude Oil and NGL Reserves
United States Canada Europe
Crude Crude Crude
(millions of barrels) Oil NGL Oil NGL Oil NGL
Proved reserves:
December 31, 1993 ... 813 443 225 42 191 15
Revisions of
previous estimates (20) 18 (2) 2 7 (1)
Improved recovery
applications ...... 16 3 6 -- 4 --
Extensions,
discoveries and
other additions ... 48 6 36 2 6 2
Purchases of
reserves in place . 5 -- 4 -- -- --
Sales of reserves
in place .......... (5) (1) (3) -- (7) (1)
Production ........ (71) (22)(*) (21) (5) (24) (1)
December 31, 1994 ... 786 447 245 41 177 14
Revisions of
previous estimates 5 12 3 2 5 (2)
Improved recovery
applications ...... 12 2 41 -- 23 2
Extensions,
discoveries and
other additions ... 27 9 50 3 15 1
Purchases of
reserves in place . 4 3 1 1 56 --
Sales of reserves
in place .......... (1) (3) (22) (1) -- --
Production ........ (66) (22)(*) (20) (5) (22) (1)
December 31, 1995 ... 767 448 298 41 254 14
Revisions of
previous estimates (1) (19) (4) 2 2 --
Improved recovery
applications ...... 25 9 24 -- 8 1
Extensions,
discoveries and
other additions ... 12 7 92 1 73 --
Purchases of
reserves in place . 3 3 -- -- -- --
Sales of reserves
in place .......... (9) (4) (45) (4) -- --
Production ........ (65) (27)(*) (18) (4) (21) (1)
December 31, 1996 ... 732 417 347 36 316 14
Proved developed
reserves:
December 31, 1993 ... 789 396 205 39 154 12
December 31, 1994 ... 727 404 198 38 150 10
December 31, 1995 ... 713 409 222 38 143 7
December 31, 1996 ... 675 376 239 35 138 8
<PAGE>
<PAGE>
Crude Oil and NGL Reserves (continued)
Other Worldwide
Crude
Oil, Crude
(millions of barrels) NGL Oil NGL
Proved reserves:
December 31, 1993 ................... 494 1,714 509
Revisions of previous estimates ... 27 13 18
Improved recovery applications .... 30 56 3
Extensions, discoveries and
other additions ................... 49 139 10
Purchases of reserves in place .... -- 9 --
Sales of reserves in place ........ (22) (37) (2)
Production ........................ (83) (198) (29)
December 31, 1994 ................... 495 1,696 509
Revisions of previous estimates ... 12 25 12
Improved recovery applications .... 29 105 4
Extensions, discoveries and
other additions ................... 54 146 13
Purchases of reserves in place .... 8 69 4
Sales of reserves in place ........ (12) (35) (4)
Production ........................ (86) (192) (30)
December 31, 1995 ................... 500 1,814 508
Revisions of previous estimates ... 21 16 (15)
Improved recovery applications .... 15 72 10
Extensions, discoveries and
other additions ................... 114 290 9
Purchases of reserves in place .... -- 3 3
Sales of reserves in place ........ -- (54) (8)
Production ........................ (89) (192) (33)
December 31, 1996 ................... 561 1,949 474
Proved developed reserves:
December 31, 1993 ................... 381 1,521 455
December 31, 1994 ................... 387 1,455 459
December 31, 1995 ................... 386 1,458 460
December 31, 1996 ................... 411 1,458 424
(*) Excludes non-leasehold NGL production attributable to
processing plant ownership of approximately 10 million
barrels for 1994, and 15 million barrels for 1995 and 1996.
<PAGE>
<PAGE>
Natural Gas Reserves
United World-
(billions of cubic feet) States Canada Europe Other wide
Proved reserves:
December 31, 1993 ...... 11,767 2,969 1,266 1,648 17,650
Revisions of
previous estimates ... 220 91 14 159 484
Improved recovery
applications ......... 1 1 2 -- 4
Extensions,
discoveries and
other additions ...... 555 288 236 778 1,857
Purchases of
reserves in place .... 117 7 -- -- 124
Sales of reserves
in place ............. (39) (45) (9) -- (93)
Production ........... (893) (289) (121) (202) (1,505)
December 31, 1994 ...... 11,728 3,022 1,388 2,383 18,521
Revisions of
previous estimates ... (198) (25) 11 126 (86)
Improved recovery
applications ......... 139 11 39 102 291
Extensions,
discoveries and
other additions ...... 475 174 72 1,082 1,803
Purchases of
reserves in place .... 305 36 -- -- 341
Sales of reserves
in place ............. (76) (78) (26) -- (180)
Production ........... (891) (302) (131) (213) (1,537)
December 31, 1995 ...... 11,482 2,838 1,353 3,480 19,153
Revisions of
previous estimates ... (796) (55) 38 129 (684)
Improved recovery
applications ......... 214 12 9 -- 235
Extensions,
discoveries and
other additions ...... 378 79 3 2,871 3,331
Purchases of
reserves in place .... 300 21 -- -- 321
Sales of reserves
in place ............. (154) (259) -- (20) (433)
Production ........... (918) (293) (143) (223) (1,577)
December 31, 1996 ...... 10,506 2,343 1,260 6,237 20,346
Proved developed reserves:
December 31, 1993 ...... 11,019 2,556 1,062 618 15,255
December 31, 1994 ...... 10,829 2,643 1,028 1,038 15,538
December 31, 1995 ...... 10,443 2,559 1,017 1,422 15,441
December 31, 1996 ...... 9,304 2,156 961 1,745 14,166
<PAGE>
<PAGE>
Capitalized Costs
The following table summarizes capitalized costs for oil and
gas exploration and production activities, and the related
accumulated depreciation, depletion and amortization.
United World-
(millions of dollars) States Canada Europe Other wide
December 31, 1996
Unproved properties:
Gross assets ............ $ 370 $ 232 $ 98 $ 303 $ 1,003
Accumulated amortization 97 104 6 7 214
Net assets ............ 273 128 92 296 789
Proved properties:
Gross assets ............ 15,448 3,364 3,207 6,728 28,747
Accumulated depreciation,
depletion, etc. ......... 8,927 1,809 1,767 5,045 17,548
Net assets ............ 6,521 1,555 1,440 1,683 11,199
Support equipment and
facilities:
Gross assets ............ 369 88 171 325 953
Accumulated depreciation 163 55 79 238 535
Net assets ............ 206 33 92 87 418
Net capitalized costs ..... $ 7,000 $1,716 $1,624 $2,066 $12,406
December 31, 1995
Unproved properties:
Gross assets ............ $ 358 $ 226 $ 140 $ 256 $ 980
Accumulated amortization 99 99 14 -- 212
Net assets ............ 259 127 126 256 768
Proved properties:
Gross assets ............ 15,313 3,872 2,897 6,189 28,271
Accumulated depreciation,
depletion, etc. ......... 8,938 2,133 1,612 4,746 17,429
Net assets ............ 6,375 1,739 1,285 1,443 10,842
Support equipment and
facilities:
Gross assets ............ 461 59 144 338 1,002
Accumulated depreciation 255 37 72 220 584
Net assets ............ 206 22 72 118 418
Net capitalized costs ..... $ 6,840 $1,888 $1,483 $1,817 $12,028
<PAGE>
<PAGE>
Costs Incurred
Property acquisition costs include costs incurred to purchase,
lease or otherwise acquire oil and gas properties. Exploration
costs include the costs of geological and geophysical activity,
carrying and retaining undeveloped properties and drilling and
equipping exploratory wells. Development costs include the costs of
drilling and equipping development wells, CO2 and certain other
injected materials for enhanced recovery projects and facilities to
extract, treat and gather and store oil and gas. Exploration and
development costs include administrative expenses and depreciation
applicable to support equipment associated with these activities.
Costs incurred summarized below include both amounts expensed and
capitalized.
United World-
(millions of dollars) States Canada Europe Other wide
1996
Property acquisition:
Proved ............ $ 113 $ 23 $ -- $ 10 $ 146
Unproved .......... 67 20 -- 54 141
Exploration ......... 313 77 174 369 933
Development ......... 833 327 436 411 2,007
Total .......... $1,326 $ 447 $ 610 $ 844 $ 3,227
1995
Property acquisition:
Proved ............ $ 176 $ 6 $ -- $ -- $ 182
Unproved .......... 74 33 -- 28 135
Exploration ......... 262 124 179 409 974
Development ......... 769 288 344 306 1,707
Total .......... $1,281 $ 451 $ 523 $ 743 $ 2,998
1994
Property acquisition:
Proved ............ $ 52 $ 11 $ 9 $ 1 $ 73
Unproved .......... 50 51 3 2 106
Exploration ......... 245 116 185 291 837
Development ......... 614 246 193 446 1,499
Total .......... $ 961 $ 424 $ 390 $ 740 $ 2,515
<PAGE>
<PAGE>
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
The information required by this item with respect to
directors is incorporated by reference to pages 3-10 of Amoco's
Proxy Statement dated March 10, 1997. Also, see heading "Executive
Officers of the Registrant" of this Form 10-K.
Item 11. Executive Compensation
The information required by this item is incorporated by
reference to pages 11-18 of Amoco's Proxy Statement dated March 10,
1997. Information related to the Board Compensation and
Organization Committee Report on Executive Compensation and the
Cumulative Total Shareholder Return Five-Year Comparison graph are
identified separately therein and are not incorporated herein.
Item 12. Security Ownership of Certain Beneficial Owners and
Management
The information required by this item is incorporated by
reference to pages 3, 10, 11, 12 and 13 of Amoco's Proxy Statement
dated March 10, 1997.
Item 13. Certain Relationships and Related Transactions
During 1996, the Corporation and its subsidiaries had purchase
and sale transactions with unaffiliated companies of which certain
of the Corporation's non-employee directors or director nominees
were executive officers or directors. Such transactions were made
in the ordinary course of business at competitive prices and terms
and are not considered material.
<PAGE>
<PAGE>
Part IV
Item 14. Exhibits, Financial Statement Schedules, and Reports on
Form 8-K
(a) 1. and 2. Financial Statements and Schedules
See Index to Financial Statements and Supplemental
Information under Part II, Item 8, "Financial Statements and
Supplemental Information."
Schedules not included in this Form 10-K have been omitted
because they are either not applicable or the required
information is shown in the financial statements or notes
thereto.
3. Exhibits
See "Index to Exhibits."
(b) Reports on Form 8-K.
No reports on Form 8-K were filed during the quarter ended
December 31, 1996.
<PAGE>
<PAGE>
SIGNATURES
Pursuant to the requirements of Section 13 or 15(d) 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, in the City of Chicago, and State of
Illinois, on the 21st day of March, 1997.
AMOCO CORPORATION
(Registrant)
JOHN L. CARL
John L. Carl
Executive Vice President
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 indicated on March
21, 1997.
Signatures Titles
H. L. FULLER* Chairman of the Board and Director
H. L. Fuller (Principal Executive Officer)
W. G. LOWRIE* President and Director
W. G. Lowrie
JOHN L. CARL* Executive Vice President and Chief
John L. Carl Financial Officer
(Principal Financial Officer)
JUDITH G. BOYNTON* Vice President and Controller
Judith G. Boynton (Principal Accounting Officer)
DONALD R. BEALL* Director
Donald R. Beall
RUTH BLOCK* Director
Ruth Block
JOHN H. BRYAN* Director
John H. Bryan
<PAGE>
<PAGE>
Signatures Titles
ERROLL B. DAVIS, JR.* Director
Erroll B. Davis Jr.
RICHARD FERRIS* Director
Richard Ferris
F. A. MALJERS* Director
F. A. Maljers
ROBERT H. MALOTT* Director
Robert H. Malott
ARTHUR C. MARTINEZ* Director
Arthur C. Martinez
WALTER E. MASSEY* Director
Walter E. Massey
MARTHA R. SEGER* Director
Martha R. Seger
THEODORE M. SOLSO* Director
Theodore M. Solso
MICHAEL WILSON* Director
Michael Wilson
RICHARD D. WOOD* Director
Richard D. Wood
*By
JOHN L. CARL Individually and as Attorney-in-Fact
John L. Carl
<PAGE>
<PAGE>
SCHEDULE II
AMOCO CORPORATION
VALUATION AND QUALIFYING ACCOUNTS(1)
For the Year Ended December 31,
(millions of dollars)
Additions
Balance Charged
at to costs Charged Deduc- Balance
beginning and to other tions at end
Description of year expenses accounts (2) of year
1996
Allowance for
doubtful notes and
accounts receivable $ 16 $ 4 $ -- $ 3 $ 17
1995
Allowance for
doubtful notes and
accounts receivable 23 7 -- 14 16
1994
Allowance for
doubtful notes and
accounts receivable 65 27 -- 69 23
(1)Reserves were deducted from the assets to which they apply
in the Consolidated Statement of Financial Position.
(2)Accounts written off less recoveries and other
adjustments.
<PAGE>
<PAGE>
AMOCO CORPORATION
INDEX TO EXHIBITS
Exhibit
Number Exhibit
3(a) The Amended Articles of Incorporation of the
registrant are incorporated by reference to Exhibit
3(a) to the registrants's Quarterly Report on Form
10-Q for the quarter ended March 31, 1985.
3(b) By-laws of the registrant are incorporated by
reference to Exhibit 3(b) to the registrants's
Annual Report on Form 10-K for the year ended
December 31, 1995.
4 The registrant will provide to the Securities and
Exchange Commission upon request copies of
instruments defining the rights of holders of
long-term debt of the registrant and its
consolidated subsidiaries.
9 None.
10(a) The 1981 Management Incentive Program of Amoco
Corporation and its Participating Subsidiaries,
as amended through November 29, 1983, is
incorporated by reference to Exhibit 10(a) to
the registrant's Annual Report on Form 10-K for
the year ended December 31, 1983.
10(b) Employment arrangements between the registrant
and Enrique J. Sosa.
--Employment Agreement dated November 22, 1995; *
--Letter Agreement amending Employment *
Agreement dated October 28, 1996;
--Restricted Stock Agreement under the 1991 *
Incentive Program of Amoco Corporation and
its Participating Subsidiaries, dated
October 2, 1995;
--Stock Option Agreement under the 1991 *
Incentive Program of Amoco Corporation and
its Participating Subsidiaries, dated
March 26, 1996;
--Stock Option Agreement under the 1991 *
Incentive Program of Amoco Corporation and
its Participating Subsidiaries, dated
October 2, 1995;
--Deferred Sign-On Bonus Agreement, dated *
September 25, 1995.
*Included herein.
<PAGE>
<PAGE>
10(c) The 1986 Management Incentive Program of Amoco
Corporation and its Participating Subsidiaries,
as amended through April 25, 1989, is
incorporated by reference to Exhibit 10(c) to the
registrant's Annual Report on Form 10-K for the
year ended December 31, 1989. Amendments to the
1986 Management Incentive Program are incorporated
by reference to pages 9-16 Amoco's Proxy Statement
dated March 15, 1991.
10(d) Amendments to the 1981 Management Incentive
Program are incorporated by reference to
pages 22-37 of Amoco's Proxy Statement dated
March 14, 1986.
10(e) The 1991 Incentive Program of Amoco Corporation *
and its Participating Subsidiaries, as amended
and restated effective November 1, 1996.
10(f) Restricted Stock Plan for Non-Employee Directors
and Retainer Stock Plan for Non-Employee
Directors are incorporated by reference to
pages 20 through 26 of the registrant's Proxy
Statement dated March 16, 1989.
10(g) Amoco Employee Savings Plan as amended and
restated, effective November 29, 1994, is
incorporated by reference to Exhibit 10(g)
to the registrant's Form S-8 Registration
Statement filed March 14, 1995 (No. 33-58063).
10(h) Deferral and Restoration Plans are incorporated
by reference to Exhibit 10(h) to the registrant's
Annual Report on Form 10-K for the year ended
December 31, 1995.
--Performance Unit Deferral Plan and Form of
Performance Unit Plan Payout Deferral Election;
--ERISA Retirement Restoration Plan of Amoco
Corporation and Participating Companies; and
--Deferral Retirement Restoration Plan of Amoco
Corporation and Participating Companies.
10(i) Amoco Fabrics and Fibers Company Hourly 401(k) *
Savings Plan ("AFFC Hourly Plan") as amended
and restated, effective January 1, 1996 is
incorporated by reference to Exhibit 10(i) of
the registrants's Annual Report on Form 10-K
for the year ended December 31, 1995.
Amendments to the AFFC Hourly Plan effective
November 1, 1996 are included herein.
* Included herein.
<PAGE>
<PAGE>
10(j) Amoco Fabrics and Fibers Company Salaried 401(k) *
Savings Plan, effective January 1, 1996, and
amendments to such plan effective November 1, 1996
are included herein.
10(k) Deferral and Restoration Plans included herein.
--Amoco Performance Share Restoration Plan, *
amended and restated effective as of
January 1, 1997;
--Deferral Savings Restoration Plan of Amoco *
Corporation and Participating Companies,
amended and restated as of November 1, 1996;
--ERISA Savings Restoration Plan of Amoco *
Corporation and Participating Companies,
amended and restated as of November 1, 1996;
--Amoco Corporation Directors' Deferred Fee *
Plan, as amended and restated effective
November 1, 1996; and
--Amoco Corporation Bonus Deferral Plan for *
1991 Incentive Program, as amended and
restated effective November 1, 1996.
11 None Required.
12 Statement Setting Forth Computation of Ratio of *
Earnings to Fixed Charges for the five years ended
December 31, 1996.
13 None.
16 None.
18 None.
21 Subsidiaries of the registrant *
22 None.
23 Consent of Price Waterhouse LLP. *
24 Powers of Attorney not included herein are *
incorporated by reference to Exhibit 24 to
the registrants's Annual Report on Form 10-K
for the period ended December 31, 1995.
27 Financial Data Schedule for the year ended *
December 31, 1996.
28 None.
*Included herein.
<PAGE>
<PAGE>
Exhibit 10(b)
EMPLOYMENT AGREEMENT
THIS AGREEMENT made this 22nd day of November, 1995, by and
between Amoco Corporation, a corporation organized under the laws
of Indiana, with its principal place of business at 200 East
Randolph Drive, Chicago, Illinois (hereinafter, together with its
successors and assigns, including any assignee of its rights and
obligations under this Agreement, as described in Section 5.2
herein, referred to as the "Company") and Enrique J. Sosa of 132
East Delaware Place, Unit 5502, Chicago, Illinois 60611,
(hereinafter referred to as "Executive"; the Company and
Executive hereinafter referred to collectively as the "Parties").
Recitals:
A. The Company is an integrated petroleum and chemical
business operating throughout the world and is engaged in oil and
gas exploration and production, petroleum products refining and
marketing and the manufacture and marketing of specialty chemical
products.
B. The Company desires to secure the services of Executive
as Executive Vice President--Chemicals Sector and Executive
desires to perform such services for the Company, on the terms
and conditions set forth herein.
NOW THEREFORE, in exchange for the mutual covenants and
commitments contained herein, the Parties hereto agree as
follows:
Part One: TERMS AND CONDITIONS OF EMPLOYMENT
1.1 Employment. The Company hereby employs and engages the
services of the Executive in the position set forth in Section
1.3 of this Agreement for the Term of Employment defined in
Section 1.2(a) herein. Executive agrees to serve the Company in
such position for the Term of Employment.
1.2 Definitions.
(a) Term of Employment. The Term of Employment is the five
(5) year period commencing on October 1, 1995, and ending at the
close of business on September 30, 2000, unless sooner terminated
pursuant to the terms of this Agreement.
(b) Cause. "Cause" for termination of the Executive shall
mean willful misconduct, gross negligence, gross dereliction of
duty, gross incompetence in the performance of Executive's duties
hereunder, or engaging in any conduct which constitutes a felony.
(c) Good Reason. "Good Reason" means (i) the assignment to
the Executive of any duties inconsistent with the Executive's
position (including status, offices, titles and reporting
requirements), authority, duties or responsibilities as
contemplated by Section 1.3 of this Agreement, or any other
action by the Employer which results in a significant diminution
in such position, authority, duties or responsibilities, other
than any assignment or action which is remedied by the Employer
promptly after receipt of written notice thereof given by the
Executive, (ii) any failure by the Employer to comply in any
material respect with any of the provisions of Part Two of this
Agreement other than any failure which is remedied by the
Employer promptly after receipt of written notice thereof given
by the Executive, or (iii) the failure of the Company to obtain
the assumption in writing of its obligation to perform this
Agreement by any successor to all or substantially all of the
assets of the Company, or of all or substantially all of the
assets of Amoco Chemical Company ("ACC") if Amoco has previously
assigned its rights under this Agreement to ACC, within fifteen
(15) days after a sale, consolidation, or similar transaction.
(d) Total Disability shall have the same meaning as Total
Disability in the Company's Long-Term Disability Plan.
(e) Base Salary. "Base Salary" refers to the actual
annualized bi-weekly base salary paid to Executive in any pay
period during the Term of Employment.
(f) Annual Bonus. "Annual Bonus" refers to the actual
annual cash bonus paid to Executive under the terms and
conditions of Section 2.2 herein.
(g) Stock. "Stock" refers to the common stock of the
Company.
(h) Annual Performance Year. "Annual Performance Year"
refers to the twelve (12) month period of employment upon which
annual bonus payments are based, which shall consist of the
twelve-month calendar year, unless such period is changed by the
Company for all employees at Executive's level.
(i) Thirty (30) Year U. S. Treasury Rate. "Thirty (30)
Year U. S. Treasury Rate" is the yield on the benchmark 30 year
Treasury bond as reported daily in the Wall Street Journal.
1.3 Position and Duties. During the Term of Employment,
Executive shall be employed by the Company as Executive Vice
President--Chemicals Sector, reporting initially to the Chairman
and Chief Executive Officer (hereinafter the "Chairman");
however, the Parties agree and understand that Executive's exact
title, reporting relationship and place in the Company's
organizational structure may be changed pursuant to any plan of
reorganization or restructuring approved from time to time by the
Human Resources Committee (hereinafter "HRC") of the Company or
its successor committee, the Compensation and Organization
Committee (hereinafter "C&OC") of the Board of Directors
(hereinafter the "Board"), or the Board, so long as Executive's
position and duties remain substantially equivalent to the
position and duties of Executive Vice President--Chemicals Sector
or Executive consents to the assumption of the new position and
duties.
(a) Executive's authority and responsibilities and the type
of work Executive is asked to perform shall be of the type
usually and customarily performed by such an executive at the
Company, and may include such duties and responsibilities not
inconsistent therewith as are assigned from time to time by the
Chairman or the President, as applicable. Executive agrees to
use his best efforts to perform faithfully and efficiently such
responsibilities.
(b) Executive agrees to devote his full efforts and time
during normal business hours to the business and affairs of the
Company; however, it shall not be a violation of this Agreement
for Executive to (i) serve on a reasonable number of corporate,
civic or charitable boards or committees, subject to the usual
and customary approval process by the Chairman of the Board or
applicable Board Committee, (ii) deliver lectures or fulfill
speaking engagements, and (iii) manage personal investments, so
long as such activities do not interfere with the performance of
Executive's responsibilities as an employee of the Company in
accordance with this Agreement.
1.4 Relocation: Executive shall be reimbursed for all moving
and relocation expenses in accordance with the terms and
conditions of the Amoco Relocation Policy applicable to
Experienced Hires. If Executive is required to relocate
thereafter, his moving expenses shall be reimbursed in accordance
with such policy of the Company as is in effect at the time.
1.5 Representations. The Executive represents that there is no
agreement between him and any other person, firm or organization
that would be in conflict with or violated by the performance of
his duties and responsibilities under this Agreement.
1.6 Post-Agreement Employment Status. At the end of the Term of
Employment, the employment of Executive shall be "at will" and
subject to all of the terms and conditions of employment
applicable to similarly-situated executives of the Company,
except that the provisions of Section 2.5 herein shall remain
applicable if Executive's employment with the Company continues
following the Term of Employment.
Part Two: COMPENSATION AND EMPLOYEE BENEFITS
2.1 Base Salary. During the Term of Employment, Executive shall
receive a base salary of no less than $550,000 (the Minimum
Guaranteed Annualized Base Salary ("MGA Base Salary"), to be
payable on a bi-weekly basis, or such other basis as may be
generally applicable from time to time to other executive
employees of the Company. During the Term of Employment,
Executive's Base Salary shall be reviewed and may be adjusted
from time to time in accordance with the Company's salary review
procedures applicable to other key executives of the Company, but
in no event shall Executive's Base Salary be less than the MGA
Base Salary during the Term of Employment.
2.2 Annual Bonus.
(a) During the Term of Employment, Executive shall receive,
in addition to Base Salary, an annual cash bonus in the amount
specified below, to be payable (i) in accordance with the
Company's cash bonus payment policies and procedures in effect
from time to time under Section 7 of the 1991 Incentive Program
of Amoco Corporation and Its Participating Subsidiaries (IP), or
any other bonus plan maintained by the Company for key executives
of the Company, as it may be duly amended from time to time, and
(ii) at the same time as such bonus is payable to other eligible
executives.
(b) Executive shall receive an Annual Bonus applicable to
the 1995 Annual Performance Year equal to the greater of (i)
Eighty-Two Thousand Five Hundred Dollars ($82,500),
(ii) one-fourth of the amount of any bonus payable to Executive
under the IP attributable to the 1995 performance year, or (iii)
one-fourth of the full 1995 bonus payment that his former
employer, Dow Chemical Company (hereinafter "Dow"), would have
paid to him had he remained with Dow for the full year. For
purposes of calculating the amount under (iii), Executive agrees
that he will provide the Company with a written record of the
bonus actually paid to him by Dow attributable to three-quarters
of the 1995 performance year and that the amount of (iii) shall
be equal to one-third of such Dow bonus payment.
(c) During each of the first three (3) full Annual
Performance years of the Term of Employment, Executive shall be
eligible to receive an Annual Bonus payment under Section 7 of
the IP or any other plan maintained by the Company for key
executives of the Company during the Term of Employment; however,
Executive will receive a Minimum Guaranteed Annual Bonus payment
(the "MGA Bonus") equal to sixty (60) per cent of Executive's
year-end Base Salary for the applicable performance year. For
purposes of this Subsection 2.2(c), it is agreed and understood
that the Annual Bonus includes both of the components referred to
as the Individual Variable Component (IVC) and the Variable
Incentive Plan (VIP) Component of the bonuses provided for in
Section 7 of the IP.
d) For the remainder of the Term of Employment, Executive
shall be eligible to receive an Annual Bonus in accordance with
the terms and conditions of Section 7 of the IP or any other
bonus plan maintained by the Company for key executives of the
Company.
2.3 Long-Term Incentive Compensation.
(a) Participation in Plans. Executive shall be entitled to
participate in any long-term incentive compensation plan of the
Company applicable to key executives of the Company during the
Term of Employment, including, but not limited to, Section 6 of
the IP, as it may be duly amended from time to time, and any
other employee stock option plans, plans based on Company or
individual performance and the like, as the Company may adopt,
during the Term of Employment.
(b) Restricted Stock Grant. As soon as practicable after
commencement of Executive's employment, the Company shall grant
Executive Thirty-Five Thousand (35,000) restricted shares of
Stock, such grant to be in the form and subject to the terms and
conditions of the grant agreement attached to this Agreement as
Exhibit A.
(c) Initial Stock Option Grant. As soon as practicable
after commencement of the Executive's employment, the Company
shall grant the Executive a 10-year option to purchase Fifty
thousand (50,000) shares of Stock, such grant to be subject to
the terms and conditions of the grant agreement attached to this
Agreement as Exhibit B.
(d) Periodic Stock Option Grants.
(i) Executive shall be eligible for stock option
grants in accordance with the terms and conditions of the IP, as
it may be duly amended from time to time, and/or such other stock
option or long-term incentive plans as may be in effect for key
executives of the Company.
(ii) During the first three (3) years of the Term of
Employment, such grants shall be in an amount equal to the
greater of (i) Fifty Thousand (50,000) shares of Stock (the
"Guaranteed Minimum Stock Option Grant") or (ii) the number of
shares which would otherwise be granted to Executive under the IP
or other applicable stock option plan. Such grants shall be
subject to the terms and conditions of the grant agreement
attached to this Agreement as Exhibit B, and such grants shall be
made at the same time as grants are made to other key executives
of the Company; provided that, the Guaranteed Minimum Stock
Option Grant provisions will apply to no fewer and no more than
three (3) grants during the Term of Employment, regardless of the
time when such grants are made. In the event that the Company
discontinues granting stock options or replaces its practice of
granting periodic stock options in whole or in part with an
alternative form of long-term incentive compensation, the Company
agrees to provide Executive with a long-term incentive of
equivalent value to the Guaranteed Minimum Stock Option Grant
during the first three (3) years of the Term of Employment. For
purposes of this Subsection 2.3(d), Equivalent Value shall be
defined as compensation, the value of which equals or exceeds one-
third of the market value of 50,000 shares of Stock at the close
of business on March 31 (or the next preceding business day if
March 31 is a weekend day or holiday) of the year following the
applicable Annual Performance Year.
(iii) At the end of the first three (3) years of the
Term of Employment, Executive shall be eligible to receive stock
option grants or other long-term incentive grants during the Term
of Employment solely in accordance with the plans, policies and
procedures then in effect for other key executives of the
Company.
2.4 Employee Savings and Amoco Performance Share Plans.
Executive shall be entitled to participate during the Term of
Employment in the Amoco Employee Savings Plan and/or applicable
restoration plans ("Employee Savings Plan"), the Amoco
Performance Share Plan ("APSP") and/or applicable restoration
plans and all similar plans and programs applicable to other
similarly-situated employees of the Company during the Term of
Employment, in accordance with all terms and conditions of such
plans.
2.5 Guaranteed Minimum Retirement Benefit.
(a) Executive shall be eligible to receive a pension
benefit (hereinafter referred to as the "Pension Benefit") to be
determined in accordance with the terms of the Employee
Retirement Plan of Amoco Corporation and Its Participating
Companies (the "Employee Retirement Plan") and/or applicable
restoration defined benefit retirement plans, as they may be duly
amended from time to time.
(b) Subject to the terms and conditions set forth in
Section 2.5 of this Agreement, the Company agrees to provide
Executive with a Guaranteed Minimum Retirement Benefit ("GMRB").
The GMRB shall be equal to the lump sum equivalent of Incremental
Pension Benefit ("IPB" as defined below) which Executive will
forego from Dow as a consequence of retiring early, less the lump
sum equivalent value of the Pension Benefit, if any, earned
during Executive's employment with the Company as of the date of
his termination from employment with the Company.
(i) In calculating the lump sum equivalent of the
Pension Benefit, the Company shall use as assumptions the Thirty
(30) Year U. S. Treasury Rate as of the date of Executive's
termination from employment with the Company, or next previous
business day, and the 1983 Group Annuity Mortality Table, or if
the Pension Benefit is paid in a lump sum, the Company shall use
the actual amount paid.
(ii) The IPB shall be determined as follows: a
deferred age 65 life annuity will be calculated, which represents
the difference between (1) the projected normal retirement
annuity benefit which the Executive would have earned under the
applicable program or programs of Dow had he remained employed by
Dow until age 65, assuming a fifteen percent (15%) growth in
earnings in 1996 and an annual growth in earnings of five percent
(5%) thereafter, to the earlier of age 60 or the date he becomes
Totally Disabled, and (2) the earned normal retirement annuity
benefit upon his actual retirement from the applicable program or
programs of Dow. This deferred age 65 annuity shall be commuted
to a present value lump sum equivalent as of the date of
Executive's termination from employment with the Company, using
the Thirty (30) Year U.S. Treasury Rate as of the date of
Executive's termination from employment with the Company, or next
previous business day, and the 1983 Group Annuity Mortality
Table.
(c) If Executive's employment is terminated under Sections
3.1 or 3.4 of this Agreement, the GMRB will not apply and
Executive will only be entitled to receive a Pension Benefit
under Subsection 2.5(a).
(d) If Executive dies during his employment with the
Company, the Company shall pay a Supplemental Survivor Pension
Benefit ("SSPB"), to be calculated and paid as follows:
(i) A projected annuity shall be calculated which is
equal to the difference between (A) the projected annuity
Executive would have received from Dow had he remained employed
at Dow until the date of his death, and (B) the earned normal
retirement annuity benefit upon his actual retirement from the
applicable program or programs of Dow. This annuity shall be
commuted to a present value lump sum equivalent as of the
Executive's date of death, using the thirty (30) year U.S.
Treasury interest rate and the 1983 Group Annuity Mortality
Table.
(ii) Executive's surviving spouse, if any, will be
entitled to receive an SSPB payment equal to fifty percent (50%)
of the amount put forth on Subsection 2.5(d)(i), or if there is
no surviving spouse, the Executive's estate shall receive an SSPB
payment equal to twenty-five percent (25%) of the amount set
forth in Subsection 2.5(d)(i); such payments to be payable as of
the date of Executive's death in accordance with the applicable
provisions of Section 2.5.
(e) The payment, if any, due to Executive under Subsection
2.5(b) shall be payable to Executive as follows:
(i) Such payment shall be due to Executive upon the
occurrence of the earlier of (A) his retirement under the
Company's Employee Retirement Plan at age 65, (B) his termination
from the Company during the Term of Employment under Section 3.2
or 3.3 of this Agreement, or (C) the date of his termination from
the Company for any reason after the expiration of the Term of
Employment.
(ii) Such payment shall be paid in a lump sum, out of
the Company's general assets and not funded in any manner,
included in the Executive's gross income as ordinary income,
subject to all income and payroll tax withholdings required to be
made under applicable federal, state and local laws or
regulations, and not subject to any tax make-up payments.
(f) The payment, if any, due Executive's surviving spouse
under Subsection 2.5(d) shall be paid in a lump sum, paid out of
the Company's general assets and not funded in any manner, and
shall be treated as ordinary income subject to all applicable
federal, state and local taxes, and not subject to any tax make-
up payments.
2.6 Welfare Benefit Plans and Policies.
(a) During the Term of Employment, Executive and
Executive's eligible dependents, may participate in and shall
receive all benefits under welfare benefit plans and policies
provided by the Company to key executive employees of the
Company, including, but not limited to the following welfare
benefit plans and policies: Amoco Medical Plan, group life
insurance, dental, long-term disability (LTD), sickness and
disability benefits (S&DB), occupational injury or illness
(OI&I), vacation pay, Business Travel Accident Policy, and Work
Related Accidental Death Benefit, in accordance with the terms
and conditions of the applicable policies and plans. Nothing in
this Agreement shall be construed to require the Company to offer
such welfare benefit plans or policies or to prohibit the Company
from amending, modifying or discontinuing any such welfare
benefit plans or policies at any time.
(b) For purposes of calculating any welfare benefit
referred to herein, Executive's actual Base Salary and actual
Annual Bonus shall be used.
(c) For purposes of the Sickness and Disability Benefits
Plan only, Executive will be deemed to have thirty (30) years of
credited service at the outset of his employment.
2.7 Paid Time Off. In addition to paid holidays, Executive
shall be entitled to six (6)) weeks paid time off during each
calendar year and a prorata amount of paid time off for each
fraction of a calendar year during the Term of Employment. Any
vacation pay benefits payable to Executive under the terms of the
Company's vacation pay policy shall be counted for purposes of
meeting the commitment contained in this Subsection 2.7.
2.8 Fringe Benefits and Perquisites of Employment.
During the Term of Employment, Executive shall be eligible for
all fringe benefits and perquisites of employment in accordance
with the terms and conditions of the Executive Policies Manual
and such other arrangements as are in effect from time to time
for the Company's key executives. Such perquisites include, but
are not limited to, use of chauffeur operated vehicles, club
memberships, use of executive aircraft, first class air travel,
use of company lodges and other facilities, financial planning
and tax return services, entitlement to an executive secretary,
and executive physicals.
2.9 Expenses. During the Term of Employment, Executive shall be
entitled to receive prompt reimbursement for all reasonable
business expenses incurred in the performance of his employment
by the Company in accordance with the policies and procedures of
the Company as are in effect during the Term of Employment.
2.10 Payroll, Tax and Other Deductions. All payments to
Executive under Part Two of this Agreement shall, unless
otherwise specified, be subject to applicable payroll, tax and
other deductions required or permitted by law or specifically
authorized in writing by Executive, without any provision for tax
makeup payments.
Part Three: TERMINATION AND BREACH
3.1 Termination By The Company For Cause.
(a) The Company may terminate Executive's employment at any
time during the Term of Employment for "Cause", as defined in
Section 1.2(b). A termination for Cause shall not take effect
unless the Executive is given written notice of the Company's
intention to terminate him for Cause.
(b) In the event the Company terminates the Executive's
employment for Cause, Executive shall only be entitled to receive
(i) Base Salary through the date of termination, and (ii) other
benefits in accordance with the terms and conditions of the
applicable policies and plans of the Company.
(c) Except as set forth in this Section 3.1, the Company
shall have no further obligations to Executive under this
Agreement following his termination; however, nothing in this
Section 3.1 shall in any way limit the Company's right to obtain
damages or other relief under Subsections 3.7(a) and 4.6 herein
for any breach by Executive of this Agreement.
3.2 Termination by the Company for Any Reason Other than
Cause.
(a) The Company may terminate Executive's employment
hereunder for any reason upon thirty (30) days written notice to
the Executive.
(b) In the event Executive's employment is terminated under
this Subsection 3.2(a) for any reason other than Cause, the
following provisions shall apply:
(i) Executive shall be paid the MGA Base Salary for the
remainder of the Term of Employment, to be payable in quarterly
installments.
(ii) Executive shall be paid an Annual Bonus for the
remainder of the Term of Employment equal to Three Hundred Thirty
Thousand Dollars ($330,000) for each full performance year of the
Term of Employment, and equal to Two Hundred Forty-Seven Thousand
Five Hundred Dollars ($247,500) for the last nine (9) months of
the Term of Employment, to be payable annually on April 1 of each
successive year.
(iii) Executive shall be entitled to receive the GMRB
in accordance with the terms and conditions of Section 2.5
herein.
(iv) All restrictions on the restricted stock grant
under Subsection 2.4(a) will lapse on the effective date of
Executive's termination in accordance with the terms of the grant
agreement attached hereto as Exhibit A.
(v) Executive shall be entitled to exercise all
outstanding stock option grants in accordance with the terms and
conditions of the grants for the remaining terms of the grants.
(c) In the event of termination of Executive's employment
pursuant to Subsection 3.2(a), Executive shall be relieved of his
obligations under Section 4.5 herein.
(d) In the event Executive's employment is terminated under
this Section 3.2, Executive shall be under no obligation to seek
other employment and there shall be no offset against amounts due
Executive under this Agreement on account of any remuneration
attributable to any subsequent employment that he may obtain.
(e) Executive shall be entitled to receive income beginning
at the later of (i) his sixtieth (60th) birthday or (ii) the
effective date of his termination from employment with the
Company, and ending on his sixty-fifth (65th) birthday, at the
applicable rates of income set forth on Exhibit C hereto, as
prorated to the later of the dates in (i) and (ii) above. Such
income shall be paid within thirty (30) days of the effective
date of his termination in a lump sum which represents the
present value of the income due Executive under this Subsection
3.2(e). For purposes of computing the present value of the
income due Executive under this Subsection 3.2(e), the interest
rate assumption used shall be the Thirty (30) Year U. S. Treasury
Rate, as of the date of Executive's termination from employment
with the Company, or next previous business day.
(f) Any amounts due under Subsection 3.2(b) are in the
nature of severance payments considered to be reasonable by the
Company and are not in the nature of a penalty.
3.3 Termination by Executive for Good Reason.
(a) The Executive's employment may be terminated by the
Executive for Good Reason as defined in Subsection 1.2(c) herein.
(b) In the event the Executive's employment is terminated
under this Section 3.3, the provisions of Subsections 3.2(b)
through (e) will apply.
3.4 Voluntary Resignation by Executive.
(a) Executive may voluntarily resign his employment with
the Company at any time by giving thirty (30) days prior written
notice to the Company, and such resignation shall not be deemed a
breach of this Agreement; however, nothing in this Subsection
3.4(a) shall in any way limit the Company's right to obtain
damages or other relief under Sections 3.7(a) and 4.6 herein for
any breach by Executive of this Agreement.
(b) If Executive voluntarily resigns for other than Good
Reason, as defined in Subsection 1.2(c), the provisions of
Subsection 3.1(b) shall apply.
(c) Except as set forth in this Section 3.4, the Company
shall have no further obligations to Executive under this
Agreement after his resignation.
3.5 Termination Due to Total Disability.
(a) In the event the Executive's employment is terminated
due to his Total Disability, as defined in Subsection 1.2(d), the
following provisions shall apply:
(i) Executive shall be eligible for disability
benefits in accordance with the provisions of the LTD program, as
applicable to senior executives of the Company.
(ii) Executive shall be entitled to exercise all
outstanding and otherwise exercisable stock option grants in
accordance with the terms and conditions of paragraph 5 of the
grant agreement attached hereto as Exhibit B.
(iii) All restrictions on the restricted stock grant
referred to in Subsection 2.4(a) and attached hereto as Exhibit A
will lapse on the effective date of Executive's termination.
(iv) Executive shall be entitled to all other
applicable benefits in accordance with the terms and conditions
of the relevant policies and plans.
(b) Executive shall be entitled to any applicable payment
under Section 2.5(b), to be payable at the time of his retirement
at age 65.
3.6 Termination Due to Death.
(a) In the event that Executive's employment is terminated
due to his death:
(i) Executive's estate or his beneficiaries, as
applicable, shall be entitled to (A) Executive's Base Salary
through his date of death; and (B) a pro rata Annual Bonus
through the date of death.
(ii) all restrictions on the restricted stock grant
referred to in Subsection 2.4(a) and attached herein as Exhibit A
will lapse on the date of Executive's death.
(iii) all outstanding and otherwise exercisable stock
options must be exercised in accordance with the terms of
paragraph 5 of the grant agreement attached as Exhibit B.
(iv) Executive's beneficiary shall be entitled to an
SSPB payment, as defined in Subsection 2.5(d).
3.7 Breach.
(a) Any breach or evasion of any term of the Agreement by
either Party will authorize the other Party to seek all legal or
equitable remedies to which such other Party may be entitled
under the law, subject to the provisions of this Agreement.
(b) The failure of either Party to require the performance
of any terms or condition of this Agreement, or the waiver by
either Party of any breach of this Agreement, shall not prevent a
subsequent enforcement of any such term or any other term nor be
deemed to be a waiver of any subsequent breach. However, each
Party agrees to provide written notice of any alleged breach of
this Agreement to the other Party within a reasonable time after
such breach became known to him.
3.8 Disputes.
(a) In the case of any controversy or claim arising out of
or relating to this Agreement or an alleged breach hereof other
than the provisions of Part Four of this Agreement, the Parties
hereto agree to submit such controversy to the American
Arbitration Association in Chicago, Illinois, as soon as
practicable for a resolution by a sole arbitrator selected in
accordance with the rules of the American Arbitration
Association. Such arbitration shall be final and binding on the
Parties hereto, subject only to judicial review in accordance
with the laws of the State of Illinois.
(b) The arbitrator shall have no authority to change or
modify any provision of this Agreement.
(c) Each Party will bear 50% of the costs of the
arbitration, including fees of the arbitrator and the American
Arbitration Association, but will bear its own attorneys' fees
and costs.
(d) Pending decision by the arbitrator, the Parties to this
Agreement shall diligently proceed pursuant to the terms and
provisions hereof, including payment of all monies not in
dispute.
(e) The arbitrator shall have the authority to award
interest with respect to any monetary award from the date the
payment should have been made to the date of the arbitration
decision.
Part Four: INVENTIONS, NON-DISCLOSURE, AND NON-COMPETITION
4.1 Inventions and Discoveries. All ideas, discoveries, and
inventions (hereinafter collectively called "inventions"),
whether patentable or not, which Executive makes, originates,
conceives, or reduces to practice during his employment by the
Company and which relate to the business of the Company or to
work or investigations done for the Company, shall be the sole
and exclusive property of the Company, and Executive will
promptly and fully disclose such to the Company. In order that
the Company may protect such property, Executive will make
adequate written records of all inventions, which records shall
be the Company's property; and both during and after termination
of this employment by the Company he will, without charge to the
Company, but at its request and expense, sign all papers,
including forms of assignment, and render any other assistance
necessary for the Company to obtain, maintain, and enforce
patents thereon throughout the world.
4.2 Non-Disclosure or Personal Use of Company Information.
Executive will not use, disclose to others, or publish any
inventions, trade secrets or any confidential or proprietary
business information about the affairs of the Company, including,
but not limited to, information concerning the Company's
properties, plans, methods, engineering designs and standards,
analytical techniques, business systems, manufacturing know-how,
technical information, research, customer information, employee
information, and other information relating to the Company's
businesses, practices, management and policies, acquired by him
in the course of his employment by the Company. Executive
further agrees not to use any such information except in the
course of his employment hereunder.
4.3 Possession and Surrender of Company Information.
Executive recognizes that all records, reports, notes,
compilations or other recorded matter, and copies or
reproductions thereof, relating to operations, activities or
business, made or received by him during any period of employment
with the Company are and shall be the property of the Company
exclusively, and he will keep the same at all times in its
custody and subject to its control and will surrender the same to
the Company at the termination of his employment, if not before.
4.4 Non-Disclosure of Confidential Information from Prior
Employers. Executive will not and the Company will neither
require nor expect him to disclose to the Company, or to use at
or for the Company, any inventions, trade secrets or any
confidential or proprietary business information that he obtained
from any of his former employers which is not then publicly
available, except as expressly authorized by a former employer,
and he agrees not to use at or for the Company any such secret or
confidential information.
4.5 Non-Competition.
(a) The Executive understands and agrees that by virtue of
his employment by the Company as its Executive Vice President--
Chemicals Sector, he must and will have complete and intimate
knowledge of confidential and proprietary information about the
Company's, including its subsidiaries and affiliated companies,
current and future business policies, accounts, suppliers,
customers, technology, procedures and methods of operation all of
which the Executive agrees are confidential and the sole and
exclusive property of the Company.
(b) The Parties agree that the Company would suffer great
loss and damage if either during the Term of Employment or the
two-year period immediately following the termination of the
Executive's employment for whatever reason, the Executive were to
become employed by, provide services to, serve as a director,
consultant, advisor or in any other capacity render advice or
services to a competitor of the Company, including a competitor
of a wholly-owned subsidiary of the Company or a competitor of
any entity in which the Company holds a fifty percent or greater
interest. Accordingly, Executive agrees that he will not seek or
accept any such employment during the periods specified in the
Subsection 4.5(b).
(c) Competitor shall be defined by the Chairman acting in
his sole discretion exercising reasonable judgment as to both the
then current and future anticipated activities of the Company.
(d) The provisions and limitations of this Section 4.5
shall apply on a worldwide basis.
4.6 Specific Enforcement. Any breach or evasion of any term of
this Part Four by Executive will cause immediate and irreparable
injury to the Company and will authorize recourse by the Company
to injunction and/or specific performance, as well as to all
other legal or equitable remedies to which the Company may be
entitled under the law.
Part Five: MISCELLANEOUS
5.1 Indemnification. Executive shall be entitled to
indemnification by the Company during the Term of Employment in
accordance with the provisions of Article VIII of the By-Laws of
the Company, as it may be duly amended from time to time.
5.2 Assignability: Binding Nature.
(a) This Agreement is personal to Executive and no rights
or obligations of Executive under this Agreement may be assigned
or transferred by the Executive other than his rights to
compensation and benefits, which may be transferred only in
accordance with their terms by will or operation of law.
(b) No rights or obligations of the Company under this
Agreement may be assigned or transferred by the Company except
that such rights or obligations may be assigned or transferred
(i) to a successor entity pursuant to a merger or consolidation
in which the Company is not the continuing entity, or the sale or
liquidation of all or substantially all of the assets of the
Company, provided that the assignee or transferee assumes the
liabilities, obligations and duties of the Company, as contained
in this Agreement, either contractually or as a matter of law,
and (ii) to Amoco Chemical Company or any entity which is a
successor to all or substantially all of the assets or business
of Amoco Chemical Company, provided that the assignee or
transferee assumes the liabilities, obligations and duties of the
Company, as contained in this Agreement, either contractually or
as a matter of law. If this Agreement is assigned to ACC, ACC
may reassign this Agreement to the Company so long as ACC is a
non-publicly held affiliate of the Company.
(c) The Company agrees that in the event of a sale of
assets or liquidation as described above, it shall take whatever
action it legally can in order to cause such assignee or
transferee to expressly assume the liabilities, obligations and
duties of the Company hereunder.
(d) In the event that this Agreement is assigned or
transferred under Subsections 5.2(b) or (c) herein, all
obligations and liabilities of the Company will thereafter cease
and terminate; provided that the transferee, in writing, assumes
the full performance of all the terms and provisions hereof to be
performed by the Company following the date of such transfer or
assignment, with the same force and effect as if such transferee
originally had been a party to this Agreement, except in the case
where the assignee or transferee is declared insolvent and, after
taking all available legal steps to collect any monies owed to
him by the transferee or assignee, Executive is unable to do so.
In such case, the Company agrees that it will guarantee any of
the transferee's or assignee's obligations under Section Two of
this Agreement upon written notice and satisfactory documentation
of the assignee's or transferee's insolvency and Executive's
efforts to collect any monies owed to him under Section Two of
this Agreement
(e) This Agreement shall be binding upon and inure to the
benefit of the Parties and their respective successors, heirs (in
the case of the Executive) and assigns.
5.3 Survivorship. The respective rights and obligations of the
Parties hereunder shall survive any termination of the
Executive's employment to the extent necessary to the intended
preservation of such rights and obligations.
5.4 Entire Agreement. This Agreement contains the entire
understanding and agreement between the Parties concerning the
subject matter hereof and supersedes all prior agreements,
understandings, discussions, negotiations and undertakings,
whether written or oral, between the Parties with respect
thereto.
5.5 Amendment or Waiver. No provisions in this Agreement may be
amended unless such amendment is agreed to in writing and signed
by the Executive and an authorized officer of the Company. No
waiver by either Party or any breach by the other Party of any
condition or provision contained in this Agreement to be
performed by such other Party shall be deemed a waiver of a
similar or dissimilar condition or provision at the same or any
prior or subsequent time. Any waiver must be in writing and
signed by the Executive or an authorized officer of the Company,
as the case may be.
5.6 Severability. In the event that any provision or portion of
this Agreement shall be determined to be invalid or unenforceable
for any reason, in whole or in part, the remaining provisions of
this Agreement shall be unaffected thereby and shall remain in
full force and effect to the fullest extent permitted by law.
5.7 Governing Law. This Agreement shall be governed by and
construed in accordance with the substantive laws of the State of
Illinois without regard to its principles of conflicts of laws.
5.8 Notices. All notices and other communications hereunder
shall be in writing and shall be deemed given when hand delivered
to the other party or when mailed by registered or certified
mail, return receipt requested, postage prepaid, addressed as
follows:
To the Executive: Enrique J. Sosa
132 East Delaware Place
Unit 5502
Chicago, Illinois 60611
To the Company: Amoco Corporation
Attn: Senior Vice President-
Human Resources
200 East Randolph Drive
Chicago, Illinois 60601
or to such other address as either Party shall have furnished to
the other in writing in accordance herewith.
5.9 Savings Clause. The invalidity or unenforceability of any
provision of this Agreement shall not affect the
5.9 Savings Clause. The invalidity or unenforceability of any
provision of this Agreement shall not affect the validity of
enforceability of any other provision of this Agreement.
5.10 Headings. The headings of the sections contained in this
Agreement are for convenience only and shall not be deemed to
control or affect the meaning or construction of any provision of
this Agreement.
5.11 Counterparts. This Agreement may be executed in two or
more counterparts.
IN WITNESS WHEREOF, the undersigned have executed this Agreement
as of the date first written above.
AMOCO CORPORATION ENRIQUE J. SOSA
By: H. Laurance Fuller _______Enrique Sosa________
H. Laurance Fuller
Chairman and CEO
Attest: Witnessed by:
Patricia A. Brandin____ John F. Campbell___________
Patricia A. Brandin John F. Campbell
Corporate Secretary Vice President
Executive Resources
<PAGE>
<PAGE>
Exhibit A
RESTRICTED STOCK AGREEMENT UNDER THE 1991 INCENTIVE PROGRAM OF
AMOCO CORPORATION AND ITS PARTICIPATING SUBSIDIARIES
(As approved April 23, 1991)
Restricted Stock Agreement dated October 2, 1995 (this
"Agreement") between Amoco Corporation (the "Corporation") and
Enrique J. Sosa ("Participant").
WHEREAS, the Corporation, pursuant to the authority and
approval of its shareholders, adopted, effective April 23, 1991,
the 1991 Incentive Program of Amoco Corporation and its
Participating Subsidiaries (the "Program"); and
WHEREAS, the participant has been designated as an eligible
employee to whom restricted shares may be granted under the
Program.
NOW, THEREFORE, in consideration of services to be rendered
by the Participant to the Corporation and/or one or more of the
Participating Subsidiaries and the mutual covenants contained
herein, and other good and valuable consideration, the parties
hereto agree as follows:
1. Program. All of the terms, conditions and provisions of the
Program are incorporated herein by reference. All
capitalized terms used herein and not otherwise defined
shall have the same meanings as set forth in the Program.
2. Restricted Shares. The Participant is hereby granted, as
additional compensation for services to be rendered to the
Corporation and/or one or more of the Participating
Subsidiaries, thirty-five thousand (35,000) restricted
shares of the Corporation's common stock, subject to the
terms and conditions contained in this Agreement. These
shares are referred to in this Agreement as "Restricted
Shares" during the applicable Restriction Period (as
hereinafter defined). Certificates representing the
Restricted Shares will be held for the Participant's account
by Amoco Corporation (the "Custodian") until the end of the
Restriction Period.
3. Shareholder Status. Effective upon the date that the
Restricted Shares are registered in the Participant's name
on the records of the Corporation, the Participant will be a
holder of record of the Restricted Shares and will have all
rights of a shareholder with respect to such shares (including
the right to vote such shares at any meeting of shareholders
of the Corporation and the right to receive all dividends
paid with respect to such shares), subject only to the terms
and conditions imposed by this Agreement.
4. Effect of Changes in Capitalization. In the event of a
reorganization, recapitalization, stock split, stock
dividend, exchange of shares, combination of shares, merger,
consolidation or any other change in corporate structure of
the Corporation affecting the Corporation's shares of common
stock, an appropriate adjustment will be made in respect of
the Restricted Shares. Any new, additional or different
shares or securities issued as the result of such an
adjustment will be registered in the Participant's name on
the records of the Corporation and held by the Custodian and
will be deemed included within the term "Restricted Shares".
5. Change of Custodian. In the event of any change of
Custodian, the Corporation will notify each Participant for
whom stock certificates have been issued of the name of the
new Custodian.
6. Lapse of Restrictions.
(a) All restrictions set forth in paragraph 7 below will
lapse in their entirety on the earliest of: (1)
(1) October 2, 2000;
(2) the effective date of the Participant's
termination of employment by the Company for any
reason other than Cause, as defined in Section
8(a) below;
(3) the effective date of the Participant's
termination from employment from the Company or a
Participating Subsidiary for Good Reason, as
defined in Section 7 (b) below; or
(4) the effective date of termination of the
Participant's employment with the Corporation or
one of its Participating Subsidiaries in the event
of the Participant's death or Total Disability.
(b) As soon as practicable after the restrictions with
respect to the Restricted Shares lapse at the end of
the period set forth in Section 6(a) above (the
"Restriction Period"), the Custodian will deliver to
the Participant or the Participant's legal
representative in case of death, the certificate or
certificates for such shares free of further
restrictions. The Participant, and the Participant's
legal representative in case of death, agree to pay the
Corporation or the appropriate participating subsidiary
within two weeks of being billed therefore such amounts
as the Corporation or the appropriate Participating
Subsidiary determines it is required to withhold with
respect to the Restricted Shares or the lapse of
restrictions thereon for income tax purposes.
7. Restrictions.
(a) In the event that the Participant's employment with the
Corporation or one of its Participating Subsidiaries
terminates during the period in which the restrictions
set forth in paragraph 6 apply to the Restricted Shares
(the "Restricted Period"), due to voluntary resignation
from the Corporation and its Participating Subsidiaries
by the Participant or termination for Cause, such
Restricted Shares shall be forfeited to the Corporation
or the appropriate Participating Subsidiary.
(b) None of the Restricted Shares, nor the
Participant's interest in any of the Restricted Shares,
may be sold, assigned, transferred, pledged or
otherwise disposed of or encumbered at any time during
the Restriction Period applicable to any installment of
Restricted Shares. In the event of any such action,
such installment of Restricted Shares shall be
forfeited to the Corporation or the appropriate
Participating Subsidiary upon delivery to the
Participant of notice of forfeiture. Such forfeiture
shall be effective upon such event, and the Participant
agrees to repay to the Corporation all dividends, if
any, paid after such event with respect to the
forfeited shares.
(c) If the Participant at any time forfeits any or all
of the Restricted Shares pursuant to this Agreement,
the Participant agrees that the certificate or
certificates for such Restricted Shares will be delivered
by the Custodian to the Corporation or the appropriate
Participating Subsidiary. All of the Participant's rights
to and interest in the Restricted Shares shall terminate upon
forfeiture without payment of consideration.
(d) The Participant recognizes that under the
provisions of Section 83(b) of the Internal Revenue
Code of 1986, as amended, the Participant has the right
to elect to include in gross income, for the taxable
year in which the Restricted Shares are granted, the
fair market value of such Restricted Shares at the time
of transfer into the Participant's name (determined
without regard to any of the restrictions set forth in
this Agreement) rather than include in gross income the
future value of such Restricted Shares at such time as
the restrictions may lapse. The Participant agrees to
waive the right to make such an election, and if such
an election is made, all Restricted Shares issued in
the Participant's name shall be forfeited to the
Corporation or the appropriate Participating
Subsidiary.
(e) The Participant agrees to sign and deliver to the
Corporation an acceptance and stock power relating to
the Restricted Shares, and acknowledges and agrees that
if any or all of the Restricted Shares are forfeited
hereunder at any time during the Restriction Period,
the Corporation shall direct the Transfer Agent and
Registrar of the Corporation's common stock to make
appropriate entries upon the records showing the
cancellation of the certificate or certificates for
such Restricted Shares and to return the Restricted
Shares to the Corporation. Such acceptance and stock
power will be returned to the Participant upon the
lapse of restrictions on all installments of Restricted
Shares. Execution of the acceptance and stock power by
the Participant constitutes acceptance of the
Restricted Shares upon the terms and conditions
contained in this Agreement and acceptance of and
agreement to the terms and conditions of this
Agreement.
(f) Determination as to whether an event has occurred
resulting in the forfeiture of or lapse of restrictions
on Restricted Shares, in accordance with this
Agreement, shall be made by the Compensation and
Organization Committee according to the terms of the
1991 Program and all determinations of the Committee
shall be final and conclusive.
8. Definitions.
(a) For purposes of this Agreement, "Cause" shall mean
willful misconduct, gross negligence, gross dereliction
of duty, gross incompetence in the performance of
Participant's duties, or engaging in any conduct which
constitutes a felony.
(b) For purposes of this Agreement, "Good Reason"
shall have the same meaning as it has in any written
Employment Agreement between Amoco Corporation and the
Executive. If no such written Employment Agreement is
in effect, "Good Reason" shall mean termination by the
Participant of his employment as a consequence of (i) a
material diminution by the Corporation or applicable
Participating Subsidiary of Participant's duties,
responsibilities, authorities or compensation unless
agreed to by the Participant, or, (ii) failure of the
Corporation or appropriate Participating Subsidiary to
obtain a contractual commitment from any successor to
employ Participant in the same or equivalent capacity
and at the same or equivalent compensation and benefits
following a sale or transfer of all or substantially
all of the Corporation's assets or all or substantially
all of the assets of Amoco Chemical Company.
9. Notices.
(a) Any notice to the Corporation or a Participating
Subsidiary pursuant to any provision of the Agreement
will be deemed to have been delivered when delivered in
person or when deposited in the local mail, addressed to
D. H. Clement, Supervisor - Executive Compensation
Administration, Amoco Corporation, 200 East Randolph
Drive, Chicago, Illinois 60601, or such other address as
the Corporation may from time to time designate in
writing.
(b) Any notice or demand pursuant to any provision of
this Agreement will be deemed to have been delivered to
the Participant when delivered in person or when
deposited in the United States mail, addressed to the
Participant at the address given on the shareholders
records of the Corporation or such other address as the
Participant may from time to time designate in writing
in accordance with this Agreement.
IN WITNESS WHEREOF, the Corporation or a Participating
Subsidiary has caused this Agreement to be executed as of the
date first above written and Participant has caused the
acceptance and stock power to be executed on the date indicated
therein.
AMOCO CORPORATION
BY: ________________________
H. L. FULLER ENRIQUE J. SOSA
<PAGE>
<PAGE>
Exhibit B
STOCK OPTION AGREEMENT UNDER
THE 1991 INCENTIVE PROGRAM OF
AMOCO CORPORATION AND ITS PARTICIPATING SUBSIDIARIES
(As approved April 23, 1991)
Agreement dated ______________ between AMOCO CORPORATION, (the
"Corporation") and ENRIQUE J. SOSA (the "Optionee").
WHEREAS, the Corporation, pursuant to the authority and approval
of its shareholders, adopted, effective April 23, 1991, the 1991
Incentive Program of Amoco Corporation and its Participating
Subsidiaries (the "Program") for the purpose of furthering the
interests of the Corporation and its shareholders by providing
additional incentives for key, managerial, and other salaried
employees who possess valuable experience and skills and giving
such employees an interest in the Corporation parallel to that of
the shareholders so as to enhance the proprietary and personal
interest of such employees in the Corporation's continued success
and progress; and
WHEREAS, the Optionee has been designated as an eligible
employee to whom an option may be granted.
NOW, THEREFORE, in consideration of the services to be rendered
by the Optionee and the mutual covenants contained herein, and
other good and valuable consideration, the parties hereto agree
as follows:
1. Program. All of the terms, conditions and provisions of the
Program are incorporated herein by reference. All capitalized
terms used herein and not otherwise defined shall have the same
meanings as set forth in the Program.
2. Nonqualified Stock Option. The Corporation grants to the
Optionee, as a matter of separate inducement and agreement in
connection with the Optionee's employment by the Corporation or
one of its participating subsidiaries, for a period of ten years
from the date of this Agreement, options, not intended as an
incentive or statutory stock options, to purchase all or any part
of an aggregate of ______ shares of common stock of the
Corporation at a purchase price of ________ per share.
3. Exercise. Except as otherwise provided in the Program and
this Agreement, one-half of the total number of options granted
under Section 2 shall become exercisable in whole or in part
after the expiration of one year from the date of this
agreement. The remaining options granted under Section 2 shall
become exercisable in whole or in part after the expiration of
two years from the date of this Agreement. No options shall be
exercisable if exercise or delivery of shares upon exercise
would constitute a violation of any federal or state securities
or other valid regulation.
4. Employment.
(a) Except as otherwise provided in the Program or this
Agreement, an option granted under Section 2 shall be
exercisable only if the Optionee remains in the
service of the Corporation or of a participating
subsidiary continuously until the expiration of the
applicable period set forth in Section 3, at such
rate or rates of compensation as shall be determined
from time to time by the Corporation or as provided
in any employment agreement between the Optionee and
the Corporation or such participating subsidiary, as
the case may be; but except as may be provided in any
employment agreement between the Optionee and the
Corporation, nothing herein shall be deemed to limit
or restrict the right of the Corporation or of such
participating subsidiary to terminate the Optionee's
employment at any time for any reason.
(b) If the Optionee's employment is terminated prior to
September 30, 2000 for any reason other than Cause,
as defined in Section 5, or if the Optionee
terminates his employment prior to September 30, 2000 for
Good Reason, as defined below, the options
granted under Section 2 shall become immediately
exercisable in whole or in part for the full grant
period set forth in Section 2. For purposes of this
Agreement, "Good Reason" shall have the same meaning
as it has in any written Employment Agreement between
Amoco Corporation and the Optionee. If no such
written Employment Agreement is in effect, "Good
Reason" shall mean termination by the Optionee of his
employment as a consequence of (i) a material
diminution by the Corporation or applicable
participating subsidiary of Optionee's duties,
responsibilities, authorities or compensation unless
agreed to by the Optionee, or, (ii) failure of the
Corporation or appropriate participating subsidiary
to obtain a contractual commitment from any successor
to employ Optionee in the same or equivalent capacity
and at the same or equivalent compensation and
benefits following a sale or transfer of all or
substantially all of the Corporation's assets or all
or substantially all of the assets of Amoco Chemical
Company.
(c) Notwithstanding anything in this Agreement to the
contrary, an option granted under Section 2 shall be
exercisable only if the Optionee, while employed by
the Corporation or a participating subsidiary, or
while all or any portion of an option granted under
Section 2 remains in effect, does not engage in any
activity prejudicial in the judgment of the
Compensation and Organization Committee or Human
Resources Committee, as appropriate, to the interests of
the Corporation or any of its subsidiaries.
5. Termination of Employment. An option granted under Section
2 shall expire ten years from the date of this Agreement
unless otherwise terminated at an earlier date pursuant to
the provisions of the Program or this Agreement. In the
event of the death of the Optionee during employment by the
Corporation or a participating subsidiary or the Optionee
becomes Totally Disabled, after completing the applicable
period of continuous employment required by Section 4(a), an
option granted under Section 2 shall expire at the earlier of
ten years from the date of this Agreement or three years from
the date of death. Termination of employment with the
Corporation for Cause or voluntary resignation, prior to
September 30, 2000, will result in cancellation of the option
granted under Section 2 as of the Optionee's termination
date. For purposes of this Agreement, "Cause" shall mean
willful misconduct, gross incompetence in the performance of
the Optionee's duties, or engaging in any conduct which
constitutes a felony.
6. Notice of Exercise. Subject to the terms, conditions and
provisions of this Agreement and the Program, the Optionee
from time to time may exercise an option granted under
Section 2 to purchase all or any part of the shares of common
stock subject thereto by written notice to the Corporation
identifying the option to be exercised and specifying the
number of shares of stock to be purchased thereunder,
addressed to: D. H. Clement, Supervisor-Executive
Compensation Administration, Amoco Corporation, 200 East
Randolph Drive, Chicago, Illinois 60601, or to any other
person at such address as the Corporation may notify the
Optionee in writing,accompanied by full payment of the
purchase price of said shares in accordance with Section 7.
Any other notice by the Optionee to the Corporation shall be
similarly addressed, and any certificates or notices to be
delivered to the Optionee shall be addressed as set forth
beneath the Optionee's signature hereto or as the Optionee
may otherwise notify the Corporation in writing.
7. Payment. Payment by the Optionee upon exercise of an
option granted under Section 2 may be made in cash or, in the
case of an exercise with respect to at least 100 shares, in
shares of common stock of the Corporation that have been
owned by the Optionee for at least one year prior to the date
of exercise, at the fair market value per share on the date
of exercise.
8. Taxes. It shall be a condition to delivery by the
Corporation of certificates for shares under Section 6 that
adequate provision has, in the judgment of the Corporation,
been made for payment of any taxes which may be required to
be withheld pursuant to any applicable law.
9. Succession. This Agreement shall be binding upon and inure
to the benefit of the Corporation and its successors and
assigns; and shall be binding upon and, to the extent
permitted by the provisions of the Program, shall inure to
the benefit of the Optionee and, in the event of the
Optionee's death, to such person or persons (including the
Optionee's Beneficiary) as shall have acquired the Optionee's
rights hereunder by beneficiary designation, by will or the
laws of descent and distribution applicable to the Optionee's
estate, but shall not otherwise be transferable or assignable
by any of them.
IN WITNESS WHEREOF, the parties hereto have caused this
Agreement to be executed as of the date first written above.
AMOCO CORPORATION
BY ________________________ _______________________________
H. L. FULLER ENRIQUE J. SOSA
Home Address: _________________________
_________________________
<PAGE>
<PAGE>
Exhibit B-1
STOCK OPTION AGREEMENT UNDER
THE 1991 INCENTIVE PROGRAM OF
AMOCO CORPORATION AND ITS PARTICIPATING SUBSIDIARIES
(As approved April 23, 1991)
Agreement dated _______________ between AMOCO CORPORATION, (the
"Corporation") and ENRIQUE J. SOSA (the "Optionee").
WHEREAS, the Corporation, pursuant to the authority and approval
of its shareholders, adopted, effective April 23, 1991, the 1991
Incentive Program of Amoco Corporation and its Participating
Subsidiaries (the "Program") for the purpose of furthering the
interests of the Corporation and its shareholders by providing
additional incentives for key, managerial, and other salaried
employees who possess valuable experience and skills and giving
such employees an interest in the Corporation parallel to that of
the shareholders so as to enhance the proprietary and personal
interest of such employees in the Corporation's continued success
and progress; and
WHEREAS, the Optionee has been designated as an eligible
employee to whom an option may be granted.
NOW, THEREFORE, in consideration of the services to be rendered
by the Optionee and the mutual covenants contained herein, and
other good and valuable consideration, the parties hereto agree
as follows:
1. Program. All of the terms, conditions and provisions of the
Program are incorporated herein by reference. All capitalized
terms used herein and not otherwise defined shall have the same
meanings as set forth in the Program.
2. Nonqualified Stock Option. The Corporation grants to the
Optionee, as a matter of separate inducement and agreement in
connection with the Optionee's employment by the Corporation or
one of its participating subsidiaries, for a period of ten years
from the date of this Agreement, options, not intended as an
incentive or statutory stock options, to purchase all or any part
of an aggregate of ______ shares of common stock of the
Corporation at a purchase price of _______ per share.
3. Exercise. Except as otherwise provided in the Program and
this Agreement, one-half of the total number of options granted
under Section 2 shall become exercisable in whole or in part
after the expiration of one year from the date of this
Agreement. The remaining options granted under Section 2 shall
become exercisable in whole or in part after the expiration of
two years from the date of this Agreement. No options shall be
exercisable if exercise or delivery of shares upon exercise
would constitute a violation of any federal or state securities
or other valid regulation.
4. Employment.
(a) Except as otherwise provided in the Program or this
Agreement, an option granted under Section 2 shall be
exercisable only if the Optionee remains in the service of the
Corporation or of a participating subsidiary continuously until
the expiration of the applicable period set forth in Section 3,
at such rate or rates of compensation as shall be determined
from time to time by the Corporation or as provided in any
employment agreement between the Optionee and the Corporation or
such participating subsidiary, as the case may be; but except as
may be provided in any employment agreement between the Optionee
and the Corporation, nothing herein shall be deemed to limit or
restrict the right of the Corporation or of such participating
subsidiary to terminate the Optionee's employment at any time
for any reason.
(b) If the Optionee's employment is terminated prior to
September 30, 2000 for any reason other than Cause, as
defined in Section 5, or if the Optionee terminates his
employment prior to September 30, 2000 for Good Reason, as
defined below, the options granted under Section 2 shall
become immediately exercisable in whole or in part for the
full grant period set forth in Section 2. For purposes of
this Agreement, "Good Reason" shall have the same meaning
as it has in any written Employment Agreement between
Amoco Corporation and the Optionee. If no such written
Employment Agreement is in effect, "Good Reason" shall
mean termination by the Optionee of his employment as a
consequence of (i) a material diminution by the
Corporation or applicable participating subsidiary of
Optionee's duties, responsibilities, authorities or
compensation unless agreed to by the Optionee, or, (ii)
failure of the Corporation or appropriate participating
subsidiary to obtain a contractual commitment from any
successor to employ Optionee in the same or equivalent
capacity and at the same or equivalent compensation and
benefits following a sale or transfer of all or
substantially all of the Corporation's assets or all or
substantially all of the assets of Amoco Chemical Company.
(c) Notwithstanding anything in this Agreement to the
contrary, an option granted under Section 2 shall be
exercisable only if the Optionee, while employed by the
Corporation or a participating subsidiary, or while all or
any portion of an option granted under Section 2 remains
in effect, does not engage in any activity prejudicial in
the judgment of the Compensation and Organization
Committee or Human Resources Committee, as appropriate, to
the interests of the Corporation or any of its
subsidiaries.
5. Termination of Employment. An option granted under Section
2 shall expire ten years from the date of this Agreement
unless otherwise terminated at an earlier date pursuant to
the provisions of the Program or this Agreement. In the
event of the death of the Optionee during employment by the
Corporation or a participating subsidiary or the Optionee
becomes Totally Disabled, after completing the applicable
period of continuous employment required by Section 4(a), an
option granted under Section 2 shall expire at the earlier of
ten years from the date of this Agreement or three years from
the date of death. Termination of employment with the
Corporation for Cause or voluntary resignation, prior to
September 30, 2000, will result in cancellation of the option
granted under Section 2 as of the Optionee's termination
date. For purposes of this Agreement, "Cause" shall mean
willful misconduct, gross incompetence in the performance of
the Optionee's duties, or engaging in any conduct which
constitutes a felony.
6. Notice of Exercise. Subject to the terms, conditions and
provisions of this Agreement and the Program, the Optionee
from time to time may exercise an option granted under
Section 2 to purchase all or any part of the shares of common
stock subject thereto by written notice to the Corporation
identifying the option to be exercised and specifying the
number of shares of stock to be purchased thereunder,
addressed to: D. H. Clement, Supervisor-Executive
Compensation Administration, Amoco Corporation, 200 East
Randolph Drive, Chicago, Illinois 60601, or to any other
person at such address as the Corporation may notify the
Optionee in writing, accompanied by full payment of the
purchase price of said shares in accordance with Section 7.
Any other notice by the Optionee to the Corporation shall be
similarly addressed, and any certificates or notices to be
delivered to the Optionee shall be addressed as set forth
beneath the Optionee's signature hereto or as the Optionee
may otherwise notify the Corporation in writing.
7. Payment. Payment by the Optionee upon exercise of an
option granted under Section 2 may be made in cash or, in the
case of an exercise with respect to at least 100 shares, in
shares of common stock of the Corporation that have been
owned by the Optionee for at least one year prior to the date
of exercise, at the fair market value per share on the date
of exercise.
8. Taxes. It shall be a condition to delivery by the
Corporation of certificates for shares under Section 6 that
adequate provision has, in the judgment of the Corporation,
been made for payment of any taxes which may be required to
be withheld pursuant to any applicable law.
9. Succession. This Agreement shall be binding upon and inure
to the benefit of the Corporation and its successors and
assigns; and shall be binding upon and, to the extent
permitted by the provisions of the Program, shall inure to
the benefit of the Optionee and, in the event of the
Optionee's death, to such person or persons (including the
Optionee's Beneficiary) as shall have acquired the Optionee's
rights hereunder by beneficiary designation, by will or the
laws of descent and distribution applicable to the Optionee's
estate, but shall not otherwise be transferable or assignable
by any of them.
IN WITNESS WHEREOF, the parties hereto have caused this
Agreement to be executed as of the date first written above.
AMOCO CORPORATION
BY ________________________ _______________________________
H. L. FULLER ENRIQUE J. SOSA
Home Address: _____________________________
_____________________________
<PAGE>
<PAGE>
Exhibit C
Compensation Period Applicable Rate of Income
March 17, 2000 - $1,039,100
March 16, 2001
March 17, 2001- 923,700
March 16, 2002
March 17, 2002- 808,200
March 16, 2003
March 17, 2003- 750,500
March 16, 2004
March 17, 2004- 692,800
March 16, 2005
<PAGE>
<PAGE>
Amoco Corporation
200 East Randolph Drive
Post Office Box 87703
Chicago Illinois 60680-0703
312-856-6621
R. Wayne Anderson
Senior Vice President
October 28, 1996
Personal and Confidential
Enrique J. Sosa, MC 3000
Dear Enrique:
The Compensation and Organization Committee recently approved
modifications to the Bonus Deferral Plan to permit Section 16
officers to switch balances in their deferred bonus accounts from
cash to share units and from share units to cash once in any
twelve month period. The C & OC also approved similar changes to
the Deferred Sign-On Bonus Agreement dated September 25, 1995
(the "Agreement") between you and the Corporation. This letter
serves as an amendment to the Agreement with respect to the
changes approved by the C & OC.
The last sentence of Section 3 of the Agreement is deleted and
replaced with the following:
Executive shall be permitted to switch all or part of
the Sign-On Bonus between investment alternatives
within the Executive's Account once in any twelve
month period. The twelve month period shall commence
on the date the Executive elects to switch all or a
part of the Sign-On Bonus between investment
alternatives and end on the date twelve months after
such election.
If you are in agreement with the terms of this amendment to the
Agreement, please sign both copies of this letter, return one
signed copy to me and retain the other signed copy for your
records.
Very truly yours,
Wayne
Agreed to this 25 day of October, 1996
_____Enrique Sosa_______
Enrique J. Sosa
<PAGE>
<PAGE>
RESTRICTED STOCK AGREEMENT UNDER THE 1991 INCENTIVE PROGRAM OF
AMOCO CORPORATION AND ITS PARTICIPATING SUBSIDIARIES
(As approved April 23, 1991)
Restricted Stock Agreement dated October 2, 1995 (this
"Agreement") between Amoco Corporation (the "Corporation") and
Enrique J. Sosa ("Participant").
WHEREAS, the Corporation, pursuant to the authority and
approval of its shareholders, adopted, effective April 23, 1991,
the 1991 Incentive Program of Amoco Corporation and its
Participating Subsidiaries (the "Program"); and
WHEREAS, the participant has been designated as an eligible
employee to whom restricted shares may be granted under the
Program.
NOW, THEREFORE, in consideration of services to be rendered
by the Participant to the Corporation and/or one or more of the
Participating Subsidiaries and the mutual covenants contained
herein, and other good and valuable consideration, the parties
hereto agree as follows:
1. Program. All of the terms, conditions and provisions of the
Program are incorporated herein by reference. All
capitalized terms used herein and not otherwise defined
shall have the same meanings as set forth in the Program.
2. Restricted Shares. The Participant is hereby granted, as
additional compensation for services to be rendered to the
Corporation and/or one or more of the Participating
Subsidiaries, thirty-five thousand (35,000) restricted
shares of the Corporation's common stock, subject to the
terms and conditions contained in this Agreement. These
shares are referred to in this Agreement as "Restricted
Shares" during the applicable Restriction Period (as
hereinafter defined). Certificates representing the
Restricted Shares will be held for the Participant's account
by Amoco Corporation (the "Custodian") until the end of the
Restriction Period.
3. Shareholder Status. Effective upon the date that the
Restricted Shares are registered in the Participant's name
on the records of the Corporation, the Participant will be a
holder of record of the Restricted Shares and will have all
rights of a shareholder with respect to such shares
(including the right to vote such shares at any meeting of
shareholders of the Corporation and the right to receive all
dividends paid with respect to such shares), subject only to
the terms and conditions imposed by this Agreement.
4. Effect of Changes in Capitalization. In the event of a
reorganization, recapitalization, stock split, stock
dividend, exchange of shares, combination of shares, merger,
consolidation or any other change in corporate structure of
the Corporation affecting the Corporation's shares of common
stock, an appropriate adjustment will be made in respect of
the Restricted Shares. Any new, additional or different
shares or securities issued as the result of such an
adjustment will be registered in the Participant's name on
the records of the Corporation and held by the Custodian and
will be deemed included within the term "Restricted Shares".
5. Change of Custodian. In the event of any change of
Custodian, the Corporation will notify each Participant for
whom stock certificates have been issued of the name of the
new Custodian.
6. Lapse of Restrictions.
(a) All restrictions set forth in paragraph 7 below will
lapse in their entirety on the earliest of: (1)
(1) October 2, 2000;
(2) the effective date of the Participant's
termination of employment by the Company for any
reason other than Cause, as defined in Section
8(a) below;
(3) the effective date of the Participant's
termination from employment from the Company or a
Participating Subsidiary for Good Reason, as
defined in Section 7 (b) below; or
(4) the effective date of termination of the
Participant's employment with the Corporation or
one of its Participating Subsidiaries in the event
of the Participant's death or Total Disability.
(b) As soon as practicable after the restrictions with
respect to the Restricted Shares lapse at the end of
the period set forth in Section 6(a) above (the
"Restriction Period"), the Custodian will deliver to
the Participant or the Participant's legal
representative in case of death, the certificate or
certificates for such shares free of further
restrictions. The Participant, and the Participant's
legal representative in case of death,
agree to pay the Corporation or the appropriate participating
subsidiary within two weeks of being billed therefore
such amounts as the Corporation or the appropriate
Participating Subsidiary determines it is required to
withhold with respect to the Restricted Shares or the
lapse of restrictions thereon for income tax purposes.
7. Restrictions.
(a) In the event that the Participant's employment with the
Corporation or one of its Participating Subsidiaries
terminates during the period in which the restrictions
set forth in paragraph 6 apply to the Restricted Shares
(the "Restricted Period"), due to voluntary resignation
from the Corporation and its Participating Subsidiaries
by the Participant or termination for Cause, such
Restricted Shares shall be forfeited to the Corporation
or the appropriate Participating Subsidiary.
(b) None of the Restricted Shares, nor the
Participant's interest in any of the Restricted Shares,
may be sold, assigned, transferred, pledged or
otherwise disposed of or encumbered at any time during
the Restriction Period applicable to any installment of
Restricted Shares. In the event of any such action,
such installment of Restricted Shares shall be
forfeited to the Corporation or the appropriate
Participating Subsidiary upon delivery to the
Participant of notice of forfeiture. Such forfeiture
shall be effective upon such event, and the Participant
agrees to repay to the Corporation all dividends, if
any, paid after such event with respect to the
forfeited shares.
(c) If the Participant at any time forfeits any or all
of the Restricted Shares pursuant to this Agreement,
the Participant agrees that the certificate or
certificates for such Restricted Shares will be
delivered by the Custodian to the Corporation or the
appropriate Participating Subsidiary. All of the
Participant's rights to and interest in the Restricted
Shares shall terminate upon forfeiture without payment
of consideration.
(d) The Participant recognizes that under the
provisions of Section 83(b) of the Internal Revenue
Code of 1986, as amended, the Participant has the right
to elect to include in gross income, for the taxable
year in which the Restricted Shares are granted, the
fair market value of such Restricted Shares at the time
of transfer into the Participant's name (determined
without regard to any of the restrictions set forth in
this Agreement) rather than include in gross income the
future value of such Restricted Shares at such time as
the restrictions may lapse. The Participant agrees to
waive the right to make such an election, and if such
an election is made, all Restricted Shares issued in
the Participant's name shall be forfeited to the
Corporation or the appropriate Participating
Subsidiary.
(e) The Participant agrees to sign and deliver to the
Corporation an acceptance and stock power relating to
the Restricted Shares, and acknowledges and agrees that
if any or all of the Restricted Shares are forfeited
hereunder at any time during the Restriction Period,
the Corporation shall direct the Transfer Agent and
Registrar of the Corporation's common stock to make
appropriate entries upon the records showing the
cancellation of the certificate or certificates for
such Restricted Shares and to return the Restricted
Shares to the Corporation. Such acceptance and stock
power will be returned to the Participant upon the
lapse of restrictions on all installments of Restricted
Shares. Execution of the acceptance and stock power by
the Participant constitutes acceptance of the
Restricted Shares upon the terms and conditions
contained in this Agreement and acceptance of and
agreement to the terms and conditions of this
Agreement.
(f) Determination as to whether an event has occurred
resulting in the forfeiture of or lapse of restrictions
on Restricted Shares, in accordance with this
Agreement, shall be made by the Compensation and
Organization Committee according to the terms of the
1991 Program and all determinations of the Committee
shall be final and conclusive.
8. Definitions.
(a) For purposes of this Agreement, "Cause" shall mean
willful misconduct, gross negligence, gross dereliction
of duty, gross incompetence in the performance of
Participant's duties, or engaging in any conduct which
constitutes a felony.
(b) For purposes of this Agreement, "Good Reason"
shall have the same meaning as it has in any written
Employment Agreement between Amoco Corporation and the
Executive. If no such written Employment Agreement is
in effect, "Good Reason" shall mean termination by the
Participant of his employment as a consequence of (i) a
material diminution by the Corporation or applicable
Participating Subsidiary of Participant's duties,
responsibilities, authorities or compensation unless
agreed to by the Participant, or, (ii) failure of the
Corporation or appropriate Participating Subsidiary to
obtain a contractual commitment from any successor to
employ Participant in the same or equivalent capacity
and at the same or equivalent compensation and benefits
following a sale or transfer of all or substantially
all of the Corporation's assets or all or substantially
all of the assets of Amoco Chemical Company.
9. Notices.
(a) Any notice to the Corporation or a Participating
Subsidiary pursuant to any provision of the Agreement
will be deemed to have been delivered when delivered in
person or when deposited in the local mail, addressed to
D. H. Clement, Supervisor - Executive Compensation
Administration, Amoco Corporation, 200 East Randolph
Drive, Chicago, Illinois 60601, or such other address as
the Corporation may from time to time designate in
writing.
(b) Any notice or demand pursuant to any provision of
this Agreement will be deemed to have been delivered to
the Participant when delivered in person or when
deposited in the United States mail, addressed to the
Participant at the address given on the shareholders
records of the Corporation or such other address as the
Participant may from time to time designate in writing
in accordance with this Agreement.
IN WITNESS WHEREOF, the Corporation or a Participating
Subsidiary has caused this Agreement to be executed as of the
date first above written and Participant has caused the
acceptance and stock power to be executed on the date indicated
therein.
AMOCO CORPORATION
BY: H. L. FULLER____________
H. L. FULLER ENRIQUE J. SOSA
<PAGE>
<PAGE>
Acceptance and Stock Power
I acknowledge acceptance of the shares of common stock of Amoco
Corporation, granted to me on October 2, 1995, under the 1991
Incentive Program of Amoco Corporation and its Participating
Subsidiaries and held by Amoco Corporation as Custodian or such
other entity as the Amoco Corporation Directors' Compensation and
Organization Committee may appoint as Custodian from time to
time, subject to the terms of the related Restricted Stock
Agreement dated October 2, 1995, and provide the following stock
power as contemplated by such Agreement. I acknowledge that I
have received and read a copy of the Restricted Stock Agreement,
and agree to the terms and conditions of the Restricted Stock
Agreement.
For value received, I hereby sell, assign and transfer unto
_________________________________________________________________
____________________________________________________ shares of
common stock of Amoco Corporation, standing in my name on the
books of said corporation represented by Certificate
Nos.______________________________________________________________
herewith and do irrevocable constitute and appoint________________
attorney to transfer said stock on the books of said corporation
with full power of substitution in the premises.
Date: ______10/3/95________ _______Enrique Sosa___________
(Signature)
_______Enrique Sosa___________
(Print Name Here)
Instructions: Please date, sign and print your name in the
spaces provided in this form, which serves the dual purposes of
acknowledging your acceptance of the Restricted Shares and
agreeing to the terms and conditions of the related Restricted
Stock Agreement, and giving a Stock Power relating to those
shares in the event of their forfeiture. You need not fill in
the Stock Power, which the Custodian will complete, as
appropriate, should a forfeiture occur. Kindly return this form
promptly in the envelope provided.
<PAGE>
<PAGE>
STOCK OPTION AGREEMENT UNDER
THE 1991 INCENTIVE PROGRAM OF
AMOCO CORPORATION AND ITS PARTICIPATING SUBSIDIARIES
(As approved April 23, 1991)
Agreement dated March 26, 1996 between AMOCO CORPORATION, (the
"Corporation") and ENRIQUE J. SOSA (the "Optionee").
WHEREAS, the Corporation, pursuant to the authority and approval
of its shareholders, adopted, effective April 23, 1991, the 1991
Incentive Program of Amoco Corporation and its Participating
Subsidiaries (the "Program") for the purpose of furthering the
interests of the Corporation and its shareholders by providing
additional incentives for key, managerial, and other salaried
employees who possess valuable experience and skills and giving
such employees an interest in the Corporation parallel to that of
the shareholders so as to enhance the proprietary and personal
interest of such employees in the Corporation's continued success
and progress; and
WHEREAS, the Optionee has been designated as an eligible
employee to whom an option may be granted.
NOW, THEREFORE, in consideration of the services to be rendered
by the Optionee and the mutual covenants contained herein, and
other good and valuable consideration, the parties hereto agree
as follows:
1. Program. All of the terms, conditions and provisions of the
Program are incorporated herein by reference. All capitalized
terms used herein and not otherwise defined shall have the same
meanings as set forth in the Program.
2. Nonqualified Stock Option. The Corporation grants to the
Optionee, as a matter of separate inducement and agreement in
connection with the Optionee's employment by the Corporation or
one of its participating subsidiaries, for a period of ten years
from the date of this Agreement, options, not intended as an
incentive or statutory stock options, to purchase all or any part
of an aggregate of 50,000 shares of common stock of the
Corporation at a purchase price of $73.2500 per share.
3. Exercise. Except as otherwise provided in the Program and
this Agreement, one-half of the total number of options granted
under Section 2 shall become exercisable in whole or in part
after the expiration of one year from the date of this
agreement. The remaining options granted under Section 2 shall
become exercisable in whole or in part after the expiration of
two years from the date of this Agreement. No options shall be
exercisable if exercise or delivery of shares upon exercise
would constitute a violation of any federal or state securities
or other valid regulation.
4. Employment.
(a) Except as otherwise provided in the Program or this
Agreement, an option granted under Section 2 shall be
exercisable only if the Optionee remains in the
service of the Corporation or of a participating
subsidiary continuously until the expiration of the
applicable period set forth in Section 3, at such
rate or rates of compensation as shall be determined
from time to time by the Corporation or as provided
in any employment agreement between the Optionee and
the Corporation or such participating subsidiary, as
the case may be; but except as may be provided in any
employment agreement between the Optionee and the
Corporation, nothing herein shall be deemed to limit
or restrict the right of the Corporation or of such
participating subsidiary to terminate the Optionee's
employment at any time for any reason.
(b) If the Optionee's employment is terminated prior to
September 30, 2000 for any reason other than Cause,
as defined in Section 5, or if the Optionee
terminates his employment prior to September 30, 2000 for
Good Reason, as defined below, the options
granted under Section 2 shall become immediately
exercisable in whole or in part for the full grant
period set forth in Section 2. For purposes of this
Agreement, "Good Reason" shall have the same meaning
as it has in any written Employment Agreement between
Amoco Corporation and the Optionee. If no such
written Employment Agreement is in effect, "Good
Reason" shall mean termination by the Optionee of his
employment as a consequence of (i) a material
diminution by the Corporation or applicable
participating subsidiary of Optionee's duties,
responsibilities, authorities or compensation unless
agreed to by the Optionee, or, (ii) failure of the
Corporation or appropriate participating subsidiary
to obtain a contractual commitment from any successor to
employ Optionee in the same or equivalent capacity and
at the same or equivalent compensation and
benefits following a sale or transfer of all or
substantially all of the Corporation's assets or all
or substantially all of the assets of Amoco Chemical
Company.
(c) Notwithstanding anything in this Agreement to the
contrary, an option granted under Section 2 shall be
exercisable only if the Optionee, while employed by
the Corporation or a participating subsidiary, or
while all or any portion of an option granted under
Section 2 remains in effect, does not engage in any
activity prejudicial in the judgment of the
Compensation and Organization Committee or Human
Resources Committee, as appropriate, to the interests of
the Corporation or any of its subsidiaries.
5. Termination of Employment. An option granted under Section
2 shall expire ten years from the date of this Agreement
unless otherwise terminated at an earlier date pursuant to
the provisions of the Program or this Agreement. In the
event of the death of the Optionee during employment by the
Corporation or a participating subsidiary or the Optionee
becomes Totally Disabled, after completing the applicable
period of continuous employment required by Section 4(a), an
option granted under Section 2 shall expire at the earlier of
ten years from the date of this Agreement or three years from
the date of death. Termination of employment with the
Corporation for Cause or voluntary resignation, prior to
September 30, 2000, will result in cancellation of the option
granted under Section 2 as of the Optionee's termination
date. For purposes of this Agreement, "Cause" shall mean
willful misconduct, gross incompetence in the performance of
the Optionee's duties, or engaging in any conduct which
constitutes a felony.
6. Notice of Exercise. Subject to the terms, conditions and
provisions of this Agreement and the Program, the Optionee
from time to time may exercise an option granted under
Section 2 to purchase all or any part of the shares of common
stock subject thereto by written notice to the Corporation
identifying the option to be exercised and specifying the
number of shares of stock to be purchased thereunder,
addressed to: D. H. Clement, Supervisor-Executive
Compensation Administration, Amoco Corporation, 200 East
Randolph Drive, Chicago, Illinois 60601, or to any other
person at such address as the Corporation may notify the
Optionee in writing,accompanied by full payment of the
purchase price of said shares in accordance with Section 7.
Any other notice by the Optionee to the Corporation shall be
similarly addressed, and any certificates or notices to be
delivered to the Optionee shall be addressed as set forth
beneath the Optionee's signature hereto or as the Optionee
may otherwise notify the Corporation in writing.
7. Payment. Payment by the Optionee upon exercise of an
option granted under Section 2 may be made in cash or, in the
case of an exercise with respect to at least 100 shares, in
shares of common stock of the Corporation that have been
owned by the Optionee for at least one year prior to the date
of exercise, at the fair market value per share on the date
of exercise.
8. Taxes. It shall be a condition to delivery by the
Corporation of certificates for shares under Section 6 that
adequate provision has, in the judgment of the Corporation,
been made for payment of any taxes which may be required to
be withheld pursuant to any applicable law.
9. Succession. This Agreement shall be binding upon and inure
to the benefit of the Corporation and its successors and
assigns; and shall be binding upon and, to the extent
permitted by the provisions of the Program, shall inure to
the benefit of the Optionee and, in the event of the
Optionee's death, to such person or persons (including the
Optionee's Beneficiary) as shall have acquired the Optionee's
rights hereunder by beneficiary designation, by will or the
laws of descent and distribution applicable to the Optionee's
estate, but shall not otherwise be transferable or assignable
by any of them.
IN WITNESS WHEREOF, the parties hereto have caused this
Agreement to be executed as of the date first written above.
AMOCO CORPORATION
BY H. L. FULLER____________ _____ENRIQUE SOSA______________
H. L. FULLER ENRIQUE J. SOSA
Home Address: __132 E. DELAWARE________
__CHICAGO, IL 60611______
<PAGE>
<PAGE>
STOCK OPTION AGREEMENT UNDER
THE 1991 INCENTIVE PROGRAM OF
AMOCO CORPORATION AND ITS PARTICIPATING SUBSIDIARIES
(As approved April 23, 1991)
Agreement dated October 2, 1995 between AMOCO CORPORATION, (the
"Corporation") and ENRIQUE J. SOSA (the "Optionee").
WHEREAS, the Corporation, pursuant to the authority and approval
of its shareholders, adopted, effective April 23, 1991, the 1991
Incentive Program of Amoco Corporation and its Participating
Subsidiaries (the "Program") for the purpose of furthering the
interests of the Corporation and its shareholders by providing
additional incentives for key, managerial, and other salaried
employees who possess valuable experience and skills and giving
such employees an interest in the Corporation parallel to that of
the shareholders so as to enhance the proprietary and personal
interest of such employees in the Corporation's continued success
and progress; and
WHEREAS, the Optionee has been designated as an eligible
employee to whom an option may be granted.
NOW, THEREFORE, in consideration of the services to be rendered
by the Optionee and the mutual covenants contained herein, and
other good and valuable consideration, the parties hereto agree
as follows:
1. Program. All of the terms, conditions and provisions of the
Program are incorporated herein by reference. All capitalized
terms used herein and not otherwise defined shall have the same
meanings as set forth in the Program.
2. Nonqualified Stock Option. The Corporation grants to the
Optionee, as a matter of separate inducement and agreement in
connection with the Optionee's employment by the Corporation or
one of its participating subsidiaries, for a period of ten years
from the date of this Agreement, options, not intended as an
incentive or statutory stock options, to purchase all or any part
of an aggregate of 50,000 shares of common stock of the
Corporation at a purchase price of $63.875 per share.
3. Exercise. Except as otherwise provided in the Program and
this Agreement, one-half of the total number of options granted
under Section 2 shall become exercisable in whole or in part
after the expiration of one year from the date of this
Agreement. The remaining options granted under Section 2 shall
become exercisable in whole or in part after the expiration of
two years from the date of this Agreement. No options shall be
exercisable if exercise or delivery of shares upon exercise
would constitute a violation of any federal or state securities
or other valid regulation.
4. Employment.
(a) Except as otherwise provided in the Program or this
Agreement, an option granted under Section 2 shall be
exercisable only if the Optionee remains in the service of the
Corporation or of a participating subsidiary continuously until
the expiration of the applicable period set forth in Section 3,
at such rate or rates of compensation as shall be determined
from time to time by the Corporation or as provided in any
employment agreement between the Optionee and the Corporation or
such participating subsidiary, as the case may be; but except as
may be provided in any employment agreement between the Optionee
and the Corporation, nothing herein shall be deemed to limit or
restrict the right of the Corporation or of such participating
subsidiary to terminate the Optionee's employment at any time
for any reason.
(b) If the Optionee's employment is terminated prior to
September 30, 2000 for any reason other than Cause, as
defined in Section 5, or if the Optionee terminates his
employment prior to September 30, 2000 for Good Reason, as
defined below, the options granted under Section 2 shall
become immediately exercisable in whole or in part for the
full grant period set forth in Section 2. For purposes of
this Agreement, "Good Reason" shall have the same meaning
as it has in any written Employment Agreement between
Amoco Corporation and the Optionee. If no such written
Employment Agreement is in effect, "Good Reason" shall
mean termination by the Optionee of his employment as a
consequence of (i) a material diminution by the
Corporation or applicable participating subsidiary of
Optionee's duties, responsibilities, authorities or
compensation unless agreed to by the Optionee, or, (ii)
failure of the Corporation or appropriate participating
subsidiary to obtain a contractual commitment from any
successor to employ Optionee in the same or equivalent
capacity and at the same or equivalent compensation and
benefits following a sale or transfer of all or
substantially all of the Corporation's assets or all or
substantially all of the assets of Amoco Chemical Company.
(c) Notwithstanding anything in this Agreement to the
contrary, an option granted under Section 2 shall be
exercisable only if the Optionee, while employed by the
Corporation or a participating subsidiary, or while all or
any portion of an option granted under Section 2 remains in
effect, does not engage in any activity prejudicial in the
judgment of the Compensation and Organization Committee or
Human Resources Committee, as appropriate, to the
interests of the Corporation or any of its subsidiaries.
5. Termination of Employment. An option granted under Section
2 shall expire ten years from the date of this Agreement
unless otherwise terminated at an earlier date pursuant to
the provisions of the Program or this Agreement. In the
event of the death of the Optionee during employment by the
Corporation or a participating subsidiary or the Optionee
becomes Totally Disabled, after completing the applicable
period of continuous employment required by Section 4(a), an
option granted under Section 2 shall expire at the earlier of
ten years from the date of this Agreement or three years from
the date of death. Termination of employment with the
Corporation for Cause or voluntary resignation, prior to
September 30, 2000, will result in cancellation of the option
granted under Section 2 as of the Optionee's termination
date. For purposes of this Agreement, "Cause" shall mean
willful misconduct, gross incompetence in the performance of
the Optionee's duties, or engaging in any conduct which
constitutes a felony.
6. Notice of Exercise. Subject to the terms, conditions and
provisions of this Agreement and the Program, the Optionee
from time to time may exercise an option granted under
Section 2 to purchase all or any part of the shares of common
stock subject thereto by written notice to the Corporation
identifying the option to be exercised and specifying the
number of shares of stock to be purchased thereunder,
addressed to: D. H. Clement, Supervisor-Executive
Compensation Administration, Amoco Corporation, 200 East
Randolph Drive, Chicago, Illinois 60601, or to any other
person at such address as the Corporation may notify the
Optionee in writing, accompanied by full payment of the
purchase price of said shares in accordance with Section 7.
Any other notice by the Optionee to the Corporation shall be
similarly addressed, and any certificates or notices to be
delivered to the Optionee shall be addressed as set forth
beneath the Optionee's signature hereto or as the Optionee
may otherwise notify the Corporation in writing.
7. Payment. Payment by the Optionee upon exercise of an
option granted under Section 2 may be made in cash or, in the
case of an exercise with respect to at least 100 shares, in
shares of common stock of the Corporation that have been
owned by the Optionee for at least one year prior to the date
of exercise, at the fair market value per share on the date
of exercise.
8. Taxes. It shall be a condition to delivery by the
Corporation of certificates for shares under Section 6 that
adequate provision has, in the judgment of the Corporation,
been made for payment of any taxes which may be required to
be withheld pursuant to any applicable law.
9. Succession. This Agreement shall be binding upon and inure
to the benefit of the Corporation and its successors and
assigns; and shall be binding upon and, to the extent
permitted by the provisions of the Program, shall inure to
the benefit of the Optionee and, in the event of the
Optionee's death, to such person or persons (including the
Optionee's Beneficiary) as shall have acquired the Optionee's
rights hereunder by beneficiary designation, by will or the
laws of descent and distribution applicable to the Optionee's
estate, but shall not otherwise be transferable or assignable
by any of them.
IN WITNESS WHEREOF, the parties hereto have caused this
Agreement to be executed as of the date first written above.
AMOCO CORPORATION
BY H. L. FULLER____________ _____ENRIQUE SOSA______________
H. L. FULLER ENRIQUE J. SOSA
Home Address: __132 E. DELAWARE_- Unit 5502
__CHICAGO, IL 60611__________
<PAGE>
<PAGE>
DEFERRED SIGN-ON BONUS AGREEMENT
This Deferred Sign-on Agreement (hereinafter the "Agreement") is
made by and between Amoco Corporation, an Indiana corporation
(hereinafter referred to as the "Corporation") and Enrique J.
Sosa (hereinafter referred to as the "Executive").
1. SIGN-ON BONUS.
The Corporation agrees to pay to Executive a sign-on bonus
in consideration of his commencement of employment with the
Corporation as Executive Vice President--Chemicals Sector,
in the amount of Five Hundred Thousand Dollars
($500,000.00), to be payable in accordance with the terms
and conditions of this Agreement.
2. DEFINITIONS.
The following terms used herein shall have the following
meanings:
(a) "Dividend Equivalent"--the entry in a deferred
compensation account of a dividend credit with respect
to a Share Unit, each Dividend Equivalent being equal
to the dividend paid from time to time on a Share.
(b) "Share"--a share of the Corporation's common stock
without par value and any share or shares of stock of
the Corporation hereafter issued or issuable in
substitution or exchange for each such share.
(c) "Share Unit"--the entry in a deferred compensation
account of a credit equal to one Share.
3. DEFERRED COMPENSATION ACCOUNT.
A deferred compensation account shall be maintained for the
Executive ("Executive's Account"). The Sign-on Bonus shall
be credited to Executive's Account on October 2, 1995 as set
forth below. Such amounts, along with interest and Dividend
Equivalents credited to Executive's Account shall constitute
vested rights to deferred payment.
$500,000 Cash
$ -0- Share Units
Such amounts may not be changed between deferral in cash or
share units at any time.
4. SHARE UNITS.
Share Units shall be credited to Executive's Account
promptly upon the execution of this Agreement by both
parties. The value of Share Units for the purposes of
crediting the account and periodic Dividend Equivalents
shall be the average of the high and low prices for Shares
as reported on the New York Stock Exchange on the last
trading day on which Shares were traded preceding the date
on which this Agreement was executed by both parties or the
applicable dividend payment date, as the case may be. Any
fractional Share Units shall be carried forward and credited
to Executive's Account in conjunction with subsequent
fractional Share Units on Dividend Equivalents. The number
of Share Units in the account shall be adjusted to give
effect to any increase or decrease in the number of issued
and outstanding Shares through the declaration of a stock
dividend, or through recapitalization resulting in a stock
split, combination or exchange of Shares of the Corporation,
or the like.
Share Units shall not entitle Executive or any other person
to the rights of a shareholder.
5. DIVIDEND EQUIVALENTS.
Until payment in accordance with Section 7, Executive's
Account credited with Share Units shall be credited on
dividend payment dates with Dividend Equivalents. On any
dividend payment date when cumulative Dividend Equivalents
in Executive's Account shall equal or exceed the value of a
full Share Unit, such Dividend Equivalents shall be credited
to such account in a full Share Unit. Fractional share
units shall also be maintained.
6. INTEREST.
Until payment in accordance with Section 7, Executive's
Account deferred in cash shall accrue interest during any
calendar month at a rate equal to the prime rate of The
First National Bank of Chicago in effect on the first
business day of such month. Interest shall be compounded
monthly.
7. PAYMENT OF DEFERRED COMPENSATION.
(a) Executive shall be entitled to receive in cash all
deferred compensation credited to his Account to be
payable in a lump sum (less taxes, if any, required to
be withheld by the Federal or any state or local
government and paid over to such government for the
Executive) within thirty (30) days following his
termination from employment with the Corporation or one
of its wholly-owned subsidiaries. All amounts paid to
Executive shall be valued as of the effective date of
his termination. Amounts deferred in Share Units shall
be based on the average of the high and low prices of
Shares as reported on the New York Stock Exchange for
the effective date of Executive's termination. Payment
of deferred compensation in Executive's account may not
be made in shares.
(b) No withdrawal or other payout of all or a portion
of the Executive's Account may be made from Executive's
Account except as provided in this Section 7.
(c) In the event of Executive's death, the Executive's
designated beneficiary shall continue to receive
payment according to the Executive's election. In the
absence of a designated beneficiary, the balance in the
Executive's Account shall be determined as of the date
of death, and such balance shall be paid in a single
payment to the Executive's estate as soon as reasonably
possible thereafter.
8. VALUE OF DEFERRED COMPENSATION ACCOUNTS.
The value of the Executive's Account shall consist of the
portion of the sign-on bonus deferred in the form of cash or
Share Units and the interest or Dividend Equivalents
described in Sections 5 and 6. All deferred cash credits to
an account shall earn interest for the period from the date
credited to the date of withdrawal. As promptly as
practicable following the close of each calendar year a
statement will be sent to Executive as to the balance in his
Account as of the end of such year.
9. EXECUTIVE'S RIGHT UNSECURED.
No fund is to be created to meet payment obligations under
this Agreement, and the right of the Executive to receive
any unpaid portion of his Account shall be an unsecured
claim against the general assets of the Corporation.
10. NON-ASSIGNABILITY.
The right of Executive to receive payment from his Account
shall not be assigned, transferred, pledged or encumbered or
be subject in any manner to alienation or anticipation,
except that he may designate, on forms provided by the
Corporation, a beneficiary to receive the Account balance in
the event of his death.
Executed this 25 day of September, 1995.
AMOCO CORPORATION
By: _____H. L. Fuller_______ ___Enrique Sosa______________
H. L. Fuller Enrique J. Sosa
<PAGE>
<PAGE>
Exhibit 10(e)
This document constitutes
part of a prospectus covering
securities that have been
registered under the
Securities Act of 1933.
1991 INCENTIVE PROGRAM OF
AMOCO CORPORATION AND ITS PARTICIPATING SUBSIDIARIES
1. Purpose and Effective Date
The purpose of this 1991 Incentive Program of Amoco Corporation
and its Participating Subsidiaries is to further the interests of
Amoco Corporation, an Indiana corporation, its participating
subsidiaries and its shareholders by providing incentives in the form
of awards to employees who contribute materially to the success and
profitability of the Corporation and such subsidiaries. Such awards
will recognize and reward outstanding performances and individual
contributions and give key, managerial and other salaried employees
who possess valuable experience and skills, an interest in the
Corporation parallel to that of the shareholders, thus enhancing the
proprietary and personal interest of such employees in the
Corporation's continued success and progress. This Program will also
enable the Corporation and its subsidiaries to attract and retain
such employees.
This Program shall become effective upon its approval by the
Corporation's shareholders on April 23, 1991 and remain effective
until December 31, 2001, subject to the ability of the Board of
Directors and the Compensation and Organization Committee to
terminate this Program as provided in Section 14.1.
2. Definitions
As used in this Program:
(1) "Adjusted Net Income" means the net income of the Corporation
as reported in the Corporation's annual financial statements adjusted
to exclude publicly disclosed unusual or special items affecting
reported net income.
(2) "Award" means the grant of any form of Option, Stock
Appreciation Right, Performance Award, Restricted Share, Bonus, or
any other form of Share based or non-Share based Award granted
pursuant to this Program.
(3) "Award Agreement" means a written agreement between the
Corporation and a Participant that sets forth the terms, conditions
and limitations applicable to an Award.
(4) "Beneficiary" means a person or persons designated by a
Participant to receive, in the event of death, any unpaid portion of
an Award held by the Participant. Any Participant may, subject to
such limitations as may be prescribed by the Committee, designate one
or more persons primarily or contingently as beneficiaries in writing
upon forms supplied by and delivered to the Corporation, and may
revoke such designations in writing. If a Participant fails
effectively to designate a beneficiary, then the Participant's estate
shall be deemed to be the Participant's beneficiary.
(5) "Board" means the Board of Directors of the Corporation.
(6) "Bonus" means any payment under Section 7.
(7) "Change in Control" has the meaning set forth in Section 9.
(8) "Chief Executive Officer" means the Employee of the
Corporation serving in such capacity.
(9) "Code" means the Internal Revenue Code of 1986, as amended and
in effect from time to time, or any successor statute.
(10) "Committee" means the Compensation and Organization Committee
of the Corporation or any successor committee with substantially the
same responsibilities.
(11) "Corporation" means Amoco Corporation, an Indiana
corporation, or any successor corporation.
(12) "Employee" means any individual who is a salaried employee on
the payroll of the Corporation or any Participating Subsidiary.
(13) "Fair Market Value Per Share" in reference to the common
stock of the Corporation means (i) the average of the reported
highest and lowest sale prices per share of such stock as reported on
the New York Stock Exchange on the date as of which determination is
to be made, or (ii) in the absence of reported sales on that date,
the average of such reported highest and lowest sale prices per share
on the next preceding date on which reported sales occurred.
(14) "Named Executive Officer" means an Employee as described in
Section 162(m)(3) of the Code for the year an Award is granted.
(15) "Option" means an Award to purchase Shares granted pursuant
to Section 6.1, and includes Incentive Stock Options and Non-
Qualified Options, as such terms are defined in Section 6.1.
(16) "Participant" means any Employee who is granted an Award
under this Program.
(17) "Participating Subsidiary" means a subsidiary of the
Corporation, more than 50% of the aggregate outstanding voting shares
of all outstanding classes and series of which are beneficially
owned, directly or indirectly, by the Corporation, and one or more
Employees of which are Participants, or are eligible for Awards,
pursuant to this Program.
(18) "Performance Award" has the meaning described in Section 6.4.
(19) "Program" means this 1991 Incentive Program of Amoco
Corporation and its Participating Subsidiaries as it may be amended
from time to time.
(20) "Restricted Shares" means Shares, which have certain
restrictions attached to the ownership thereof, which may be issued
under Section 6.3.
(21) "Retirement" means termination of a Participant's employment
with the Corporation or a Participating Subsidiary by retirement
under the normal, mandatory, and applicable age plus service or other
provision of the applicable retirement plan of the Corporation or a
Participating Subsidiary.
(22) "Shares" mean shares of common stock of the Corporation.
(23) "Share Unit" means the right to receive a payment equivalent
in value to one Share on the date of payment.
(24) "Stock Appreciation Right" means a right, the value of which
is determined relative to the appreciation in value of Shares, which
may be issued under Section 6.2.
(25) "Totally Disabled" means solely because of disease or injury,
a Participant is deemed by a qualified physician selected by the
Corporation to be unable to work at any reasonable occupation.
"Reasonable occupation" means any gainful activity for which the
Participant is, or may reasonably become, fitted by education,
training or experience, but shall not mean any activity if it is
in connection with an approved rehabilitation program.
Notwithstanding the foregoing, a Participant shall not be deemed
Totally Disabled if the cause of disability was contributed to or
resulted from: (i) intentionally self-inflicted injuries; (ii) drug
addiction; (iii) insurrection, rebellion, participation in a riot or
civil commotion; or (iv) commission by the Participant of an assault,
battery or felony.
3. Administration
3.1 Compensation and Organization Committee
(a) This Program shall be administered by the Committee, which
shall be appointed by the Board. The Committee shall consist of not
less than a sufficient number of disinterested members of the Board
so as to qualify the Committee to administer this Program as
contemplated by Section 162(m) of the Code. The Board may remove
members from or add members to the Committee. Vacancies on the
Committee shall be filled by the Board.
(b) To the extent permitted by Section 14.3, the Committee is
authorized to (i) determine which Employees shall be Participants in
the Program and which Awards shall be granted to Participants, (ii)
establish, amend and rescind rules, regulations and guidelines
relating to this Program as it deems appropriate, (iii) interpret and
administer this Program, Awards and Award Agreements, (iv) establish,
modify and terminate terms and conditions of Award Agreements, (v)
grant waivers and accelerations of Program, Award and Award Agreement
restrictions and (vi) take any other action necessary for the proper
administration and operation of the Program, all of which shall be
executed in accordance with the objectives of this Program.
(c) The Committee may designate persons and entities other than
its members, including but not limited to, the Human Resources
Committee of the Corporation, any successor committee, the Chief
Executive Officer, and the Vice President of Human Resources, to
carry out any of its responsibilities under and described in this
Program, under such conditions or limitations as the Committee may
establish.
3.2 Effect of Determinations
Determinations of the Committee and its designees shall be final,
binding and conclusive on the Corporation, its Participating
Subsidiaries, shareholders, Employees and Participants. No member of
the Committee or any of its designees shall be personally liable for
any action or determination made in good faith with respect to this
Program, any Award, or any Award Agreement.
4. Eligibility
Persons eligible for Awards under this Program shall consist of
key, managerial and other Employees who possess valuable experience
and skills and have contributed, or can be expected to contribute,
materially to the success of the Corporation. The Committee shall
determine which Employees shall be Participants, the types of Awards
to be made to Participants and the terms, conditions and limitations
applicable to the Awards.
5. Shares Subject to this Program
5.1 Maximum Number of Shares
The maximum number of Shares available for Awards under this
Program in each calendar year during any part of which this Program
shall be in effect shall be nine tenths of one percent (0.9%) of the
total issued and outstanding Shares as of December 31 of the
immediately preceding year, subject to Section 8 of this Program.
Any and all such Shares may be issued in respect of any of the types
of Awards; provided, however that no more than twenty million
(20,000,000) Shares shall be issued with respect to Incentive Stock
Options, and provided, further, that no more than twenty percent
(20%) of the Shares available for Awards under this Program shall be
issued in respect of Restricted Shares.
Notwithstanding the immediately preceding paragraph, any
Participant, including any Named Executive Officer, shall be limited
to a maximum annual aggregate award (a) under Section 6.1 of no more
than 400,000 Shares underlying an Option Award and (b) under Section
6.2 of no more than 400,000 Shares or Share Units related to a Stock
Appreciation Right Award.
5.2 Share Accounting
Shares related to Awards that are forfeited, terminated, expired
unexercised, exchanged, settled in cash in lieu of Shares or settled
in such other manner so that a portion or all of the Shares included
in an Award are not issued to a Participant shall be available for
other Awards. Any Shares not so used, and any unused Shares of the
nine tenths of one percent (0.9%) limit described in Section 5.1 in
any calendar year, shall be available for Awards in succeeding
calendar years. Shares issued under this Program shall be authorized
and unissued Shares or Shares reacquired by the Corporation, as
determined by the Committee. No fractional Shares shall be issued
under this Program.
6. Awards
Awards may include, but are not limited to, those described in
this Section 6. Awards may be granted singly, in combination, or in
tandem with other Awards. Subject to the other provisions of this
Program, Awards may also be made in combination or in tandem with, in
replacement of, or as alternatives to, grants or rights under this
Program and any other employee plan of the Corporation, including any
plan of any acquired entity. Subject to the terms of the Awards
described in this Section 6 and the related Award Agreement, the form
of payment for Awards may be in cash, in Shares, in Share Units, or
such other form as determined by the Committee, and may be made
partly in one form and partly in one or more other forms, all as
determined by the Committee. Except as otherwise provided in this
Program, Awards shall be evidenced by Award Agreements, the terms of
which may be amended or accelerated by the Committee following the
grant of any Award and need not be uniform among Participants.
Except as otherwise provided in this Program, Awards shall be granted
for such minimum consideration as is required by applicable law,
rules and regulations, and such additional consideration, if any, as
may be determined by the Committee.
6.1 Options
Options may be granted under this Program from time to time. If
Options are granted they shall be upon the following terms and
conditions and such additional terms and conditions, not inconsistent
with the express provisions of this Program, as the Committee in its
discretion shall deem desirable:
(a) Options granted to Employees may be either of a type that
meets the requirements of incentive stock options, as defined in
Section 422 of the Code ("Incentive Stock Options"), or of a type or
types that do not meet such requirements ("Non-Qualified Options"),
if otherwise consistent with the provisions of this Program.
(b) The option price per Share for all Options shall be that
recommended by the Committee, but it shall not be less than one
hundred percent (100%) of the Fair Market Value Per Share on the date
the Option is granted.
(c) Award Agreements for Options shall conform to the requirements
of this Program, and may contain such other provisions as the
Committee shall deem advisable; provided, however, that if an Option
is designated as an Incentive Stock Option the terms of the Award
Agreement shall be in conformance with the statutory requirements for
an Incentive Stock Option as specified in the Code.
(d) Award Agreements for Options shall specify when an Option may
be exercisable. An Option may be exercised, in whole or in part, by
giving written notice of exercise to the Corporation specifying the
number of Shares to be purchased. Shares purchased upon exercise of
an Option shall be paid for in full at the time the Option is
exercised in cash or in Shares. Payment may also be made in any
other manner or form approved by the Committee, consistent with
applicable law, regulations and rules.
(e) A holder of an Option shall have no rights as a shareholder
with respect to any Shares covered by such Option unless and until
the date of the issuance of the stock certificate for such Shares.
(f) (i) If a Participant dies while employed by the Corporation or
a Participating Subsidiary and after completion of the required
period of continuous employment as provided in the Award Agreement
following the date an Option is granted, then the Option shall be
exercisable by the Beneficiary of the Participant, but only within
the period specified in the Award Agreement which shall not be
later than three (3) years after the date of the Participant's
death and, in any event, not later than the expiration date of the
Option.
ii) Following the death of a Participant, the Committee may
at its discretion, upon the request of such Participant's
Beneficiary who holds an exercisable Option and in consideration
of the surrender of such Option, pay the amount by which the Fair
Market Value Per Share on the date of such request shall exceed
the Option price per Share multiplied by the number of Shares as
to which the request was made.
(g) If a Participant is deemed by the Corporation to be Totally
Disabled, or if a Participant Retires, after completion of any
required period of continuous employment as provided in the Award
Agreement, following the date an Option was granted, the Option shall
be exercisable by the Participant or the Participant's legal guardian
or representative, but only within the period specified in the Award
Agreement, which shall not be later than the expiration date of the
Option. If a Participant, to whom this Section 6.1(g) is applicable,
dies before the expiration of the period specified in the Award
Agreement during which the Option may be exercised, and without
having exercised the Option, then the Option shall be exercisable by
the Beneficiary of the Participant during the remainder of such
specified period but only within three (3) years after the date of
the Participant's death, and in any event, not later than the
expiration date of the Option.
6.2 Stock Appreciation Rights
Stock Appreciation Rights may be granted under this Program from
time to time. If Stock Appreciation Rights are granted they shall be
upon the following terms and conditions, and such additional terms
and conditions, not inconsistent with the express provisions of this
Program, as the Committee in its discretion shall deem desirable:
(a) A Stock Appreciation Right may be granted in tandem with part
or all of, in addition to, or completely independent of, an Option or
any other Award under this Program. A Stock Appreciation Right
issued in tandem with an Option may be granted at the time of grant
of the related Option or at any time thereafter during the term of
the Option.
(b) Award Agreements for Stock Appreciation Rights shall conform
to the requirements of this Program and may contain such other
provisions (including but not limited to, the permitted form of
payment for the exercise of the Stock Appreciation Right, the
requirement of employment for designated periods of time prior to
exercise and the ability of the Committee to revoke Stock
Appreciation Rights which are issued in tandem with Options without
compensation to the Participant) as the Committee shall deem
advisable.
(c) Stock Appreciation Rights issued in tandem with Options shall
be subject to the following:
(i) Stock Appreciation Rights shall be exercisable at such
time or times and to the extent, but only to the extent, that the
Option to which they relate shall be exercisable.
(ii) Upon exercise of Stock Appreciation Rights the holder
thereof shall be entitled to receive a number of Shares equal in
aggregate value to the amount by which the Fair Market Value Per
Share on the date of such exercise shall exceed the option price
per Share of the related Option, multiplied by the number of
Shares in respect of which the Stock Appreciation Rights shall
have been exercised.
(iii) All or any part of the obligation arising out of an
exercise of Stock Appreciation Rights may, at the discretion of
the Committee, be settled by the payment of cash equal to the
aggregate value of the Shares (or a fraction of a Share) that
would otherwise be delivered under the Section 6.2 (c) (ii).
(iv) Upon exercise of Stock Appreciation Rights the
Participant shall surrender to the Corporation the unexercised
tandem Options.
(v) Stock Appreciation Rights issued in tandem with Options
shall automatically terminate upon the exercise of such Options.
6.3 Restricted Shares
Awards of Restricted Shares may be granted under this Program from
time to time. If Awards of Restricted Shares are granted they shall
be upon the following terms and conditions and such additional terms
and conditions, not inconsistent with the express provisions of this
Program, as the Committee in its discretion shall deem desirable:
(a) Restricted Shares are Shares which are subject to such terms,
conditions and restrictions as the Committee deems appropriate, which
may include restrictions upon the sale, assignment, transfer or other
disposition of the Restricted Shares and the requirement of
forfeiture of the Restricted Shares upon termination of employment
under certain specified conditions. The Committee may condition the
lapsing of restrictions on part or all of an Award of Restricted
Shares upon the attainment of specific performance goals or such
other factors as the Committee may determine. Awards of Restricted
Shares may be granted for no cash consideration or for such minimum
consideration as may be required by applicable law.
(b) Award Agreements for Restricted Shares shall conform to the
requirements of this Program, and may contain such other terms and
conditions (including but not limited to, a description of a period
during which the Participant may not transfer the Restricted Shares
and limits on encumbering the Restricted Shares during such period)
as the Committee shall deem desirable. To the extent permitted by
Section 14.3 hereof, the Committee may provide for the lapse of any
such term or condition in installments and may accelerate or waive
any such term or condition in whole or in part, based on service,
performance and/or such other factors or criteria as the Committee
may determine.
(c) Award Agreements for Restricted Shares shall provide that the
stock certificates representing Restricted Shares shall be legended,
that the stock certificates shall be held by a custodian, or that
there be other mechanisms for maintaining control by the Corporation
of the Restricted Shares until the restrictions thereon are no
longer in effect. After the lapse, waiver or release of the
restrictions imposed pursuant to the Award Agreement on any
Restricted Shares, the Corporation shall cause to be issued in the
Participant's name a stock certificate evidencing the Restricted
Shares with respect to which the restrictions have lapsed or been
waived or released, free of any legend, and shall cause such stock
certificate to be delivered to the Participant.
(d) Except as otherwise provided in this Program or in the Award
Agreement, the Participant shall have, with respect to Awards of
Restricted Shares, all of the rights of a shareholder of the
Corporation, including the right to vote the Restricted Shares and
the right to receive any cash or stock dividends on such Restricted
Shares. The Committee may provide that the payment of cash dividends
shall or may be deferred. Any reinvestment of deferred cash
dividends shall be as determined by the Committee. Stock dividends
issued with respect to Restricted Shares shall be Restricted Shares
and shall be subject to the same terms, conditions and restrictions
that apply to the Restricted Shares with respect to which such
dividends are issued. Any additional Shares issued with respect to
cash or stock dividends shall not be counted against the maximum
number of Shares for which Awards may be granted under this Program
as set forth in Section 5.
(e) If the employment of a Participant is terminated prior to the
lapse of restrictions on Restricted Shares because the Participant
dies, becomes Totally Disabled or Retires involuntarily, the
restrictions on all Restricted Shares awarded to a Participant shall
lapse on the date of such termination.
6.4 Performance Awards
Performance Awards may be granted under this Program from time to
time. If Performance Awards are granted they shall be upon the
following terms and conditions and such additional terms and
conditions, not inconsistent with the express provisions of this
Program, as the Committee in its discretion shall deem advisable:
(a) Performance Awards are Awards which are based upon the
performance of all or a portion of the Corporation and/or its
Participating Subsidiaries or which are based upon the individual
performance of a Participant. Performance Awards may be in the form
of performance units, performance shares and such other forms of
Performance Awards which the Committee shall determine to be
desirable. Performance Awards are Awards which are granted to
Participants contingent upon (i) the future performance of all or a
portion of the Corporation and/or one or more Participating
Subsidiaries, which may include, without limitation, performance
relative to a group of companies in the same or related industries,
achievement of specific business objectives, attainment of certain
growth rates, profitability goals and such other measurements as the
Committee determines to be appropriate, (ii) the future performance
of a Participant, which may include, without limitation, attainment
of specified goals and objectives and such other measurements as the
Committee determines to be appropriate, (iii) the future performance
of a combination of all or a portion of the Corporation and/or one or
more Participating Subsidiaries and a Participant, or (iv) such other
measurements and criteria as may be considered appropriate by the
Committee. Performance Awards may contain multiple performance
measurements.
(b) Award Agreements for Performance Awards shall conform to the
requirements of this Program and may contain such other terms and
conditions (including but not limited to, applicable performance
measurements, a description of whether performance measurements are
to be used singly or in combination, a description of whether
different performance measurements may be used for different
performance periods, the length of performance periods, the ability
of the Committee to amend and adjust measurements, payouts and
performance periods of Performance Awards and any requirements of
employment during performance periods) as the Committee shall deem
desirable.
(c) Award Agreements for Performance Awards shall provide for a
required minimum period of continuous employment during a performance
period of a Performance Award. If such minimum period of continuous
employment shall have elapsed, the Award Agreement may provide, or
the Committee may determine, the portion of the payment of the
Performance Award which the Participant or the Participant's
Beneficiary, as applicable, is to receive at the end of the
performance period.
6.5 Other Awards
The Committee may grant other Share based Awards under this
Program, including without limitation, those Awards pursuant to which
Shares are or may in the future be acquired, Awards denominated in
Share Units, securities convertible into Shares and dividend
equivalents. The Committee shall determine the terms and conditions
of such other Share based Awards. Shares issued in connection with
such other Share based Awards shall be issued for such minimum
consideration as shall be required by applicable law, rules and
regulations, and such additional consideration, if any, as may be
determined by the Committee.
The Committee may also grant other non-Share based Awards under
this Program and shall determine the terms and conditions of such
other non-Share based Awards. The Committee may grant such other
Share based Awards and non-Share based Awards in tandem or
combination with other Awards or each other, in exchange of other
Awards, or in tandem or combination with, or as alternatives to
grants or rights under any other employee plan of the Corporation,
including any plan of any acquired entity. The Committee shall have
the authority to determine the Participants for such Awards and all
other terms and conditions of such other Awards. No amendment of
this Program is required for the creation of another type of Award.
7. Bonuses
7.1 Determination of Bonuses
Bonuses may be granted under this Program from time to time. The
amount of Bonuses which may be awarded shall be as determined by the
Committee. The Committee may establish a basis upon which aggregate
Bonus expenditures for any year shall be determined, which may
include measurements of financial performance of the Corporation
and/or one or more of its Participating Subsidiaries, relative
performance of the Corporation and/or any one or more of its
Participating Subsidiaries within the same or related industries,
competitive compensation considerations and other measurements and
criteria.
In the case of Named Executive Officers, the maximum annual
individual Bonus Award to the Chief Executive Officer shall be
limited to an amount no greater than 0.15% of Adjusted Net Income and
for the other Named Executive Officers, an amount no greater than
0.10% of Adjusted Net Income.
The Committee in its sole discretion may, but shall not be
required to, reduce the amount of, or not grant a Bonus Award that
could otherwise be granted based upon such considerations as it deems
appropriate.
7.2 Form and Time of Payment of Bonuses
(a) Each Bonus may be made at the discretion of the Committee
either in cash, in Shares, in Share Units, or in another form as
determined by the Committee and may be made partly in one form and
partly in one or more other forms. In the case of an Award of a
Bonus in Shares or Share Units, the number shall be determined by
using the Fair Market Value Per Share on the date of the Award of the
Bonus.
(b) The payment of any Bonus shall be subject to such obligations
or conditions as the Committee may specify in making or recommending
the Award of the Bonus, but Bonuses need not be evidenced by Award
Agreements.
(c) When payment of all or part of a Bonus is deferred in the form
of Shares or Share Units, the account of the Participant to whom the
Bonus was made will be credited with an amount per Share equal to the
dividends payable on each issued and outstanding Share ("dividend
equivalents"). Amounts thus credited shall, in the discretion of the
Committee, either:
(i) be paid in cash as and when each such credit shall be
made, or
(ii) be credited in Shares or Share Units, with the number
determined by using the Fair Market Value Per Share on the date of
the dividend payment and delivered in such form and at such time
or times as may be determined by the Committee.
(d) When payment of all or part of a Bonus is deferred in cash,
the Committee may provide that the account of the Participant to whom
the Bonus was made shall be credited with amounts equivalent to
interest ("interest equivalents"). Amounts thus credited shall be at
the rate determined by the Committee.
(e) Any Bonus payable in Shares may, in the discretion of the
Committee, be paid in cash, on each date on which payment in Shares
would otherwise have been made, in an amount equal to the Fair Market
Value Per Share on each such date, multiplied by the number of Shares
which would otherwise have been paid on such date.
(f) Bonuses may be awarded in Share Units in accordance with the
following terms and conditions and such other terms and conditions as
the Committee may impose:
(i) The number of Share Units awarded with respect to any
Bonus shall be the number determined by using the Fair Market
Value Per Share on the date of the Award of the Bonus.
(ii) Any Bonus made in Share Units may, in the discretion or
on the recommendation of the Committee, be paid in Shares on each
date on which payment in cash would otherwise be made.
(g) In lieu of the foregoing forms of payment of Bonuses, the
Committee may specify or recommend any other form of payment which it
determines to be of substantially equivalent economic value to the
cash value of the Bonus including, without limitation, forms
involving payments to a trust or trusts for the benefit of one or
more Participants.
(h) Each payment of a Bonus that is to be made in cash shall be
from the general funds of the Corporation or the Participating
Subsidiary making the payment.
(I) In the event of the death of a Participant to whom a Bonus is
to be or shall have been made, the Bonus or any portion thereof
remaining unpaid shall be paid to such Participant's Beneficiary
either in the manner in which payment would have been made had the
Participant not died or in such other manner as may be determined by
the Committee.
8. Adjustments upon Changes in Capitalization
Subject to any required action by the Corporation's shareholders,
in the event of a reorganization, recapitalization, stock split,
stock dividend, exchange of Shares, combination of Shares, merger,
consolidation or any other change in corporate structure of the
Corporation affecting the Shares, or in the event of a sale by the
Corporation of all or a significant part of its assets, or any
distribution to its shareholders other than a normal cash dividend,
the Committee may make appropriate adjustment in the number, kind,
price and value of Shares authorized by this Program and any
adjustments to outstanding Awards as it determines appropriate so as
to prevent dilution or enlargement of rights.
9. Change in Control
9.1 Definition of Change in Control
A "Change in Control" shall be deemed to have occurred if any one
or more of the events described in paragraphs (a), (b) or (c) below
occurs:
(a) Any "person," as such term is used in Sections 13(d) and 14(d)
of the Exchange Act (including any group of persons with which any
person [or its affiliates or associates, as such terms are defined in
Rule 12b-2 under the Exchange Act, of such person] has any agreement,
arrangement or understanding, oral or written, regarding the
acquiring, holding, voting or disposing of any of the Corporation's
securities, but excluding a trustee or other fiduciary holding
securities under an employee benefit plan of the Corporation) (i)
is or becomes the "beneficial owner" (as defined in Rule 13d-3 under
the Exchange Act), directly or indirectly, of securities of the
Corporation representing twenty percent (20%) or more of the combined
voting power of the Corporation's then outstanding securities
(hereinafter referred to as an "Acquiring Person"), and (ii) any such
person becoming an Acquiring Person was not approved by the Board of
Directors of the Corporation which was composed of "Continuing
Directors," as that term is defined below in (b), before the person
became an Acquiring Person; or
(b) The Board of Directors is no longer comprised of "Continuing
Directors" (which for purposes of this Program shall mean (i) any
person who is a director prior to the effective date of this Program
and who is not, while serving as a director, an Acquiring Person (or
a representative, affiliate or associate thereof), or (ii) any person
whose nomination for election, or election, to the Board of Directors
subsequent to the date of this Program is recommended or approved by
at least two-thirds of Continuing Directors and who is not, while
serving as a director, an Acquiring Person (or a representative,
affiliate or associate thereof) ); or
(c) There occurs a "Business Combination," as that term is defined
as of the effective date of this Program in INDIANA CODE Section 23-1-
43-5 (with the terms "resident domestic corporation" and "interested
shareholder" as used in that Section being deemed to refer to the
Corporation and to an Acquiring Person, respectively), that was not
approved by the Board of Directors of the Corporation, which was
comprised of Continuing Directors, before the Acquiring Person became
an Acquiring Person.
However, in no event shall a Change in Control be deemed to have
occurred, with respect to a Participant, if that Participant is part
of an Acquiring Person which consummates the Change in Control
transaction. A Participant shall be deemed "part of an Acquiring
Person" for purposes of the preceding sentence if the Participant is
an equity participant or has agreed to become an equity participant
in the Acquiring Person (except for (i) passive ownership of less
than 3% of the securities of the Acquiring Person; or (ii) ownership
of equity participation in the Acquiring Person which is otherwise
not deemed to be significant, as determined prior to the Change in
Control by a majority of the disinterested Continuing Directors).
9.2 Effect of Change in Control
Upon the occurrence of an event of Change in Control, unless
otherwise specifically prohibited by the terms of the second
paragraph of Section 6:
(a) Any and all Options and Stock Appreciation Rights shall become
immediately exercisable;
(b) Any restriction periods and restrictions imposed on Restricted
Shares shall lapse, and within ten (10) business days after the
occurrence of a Change in Control, the stock certificates
representing Restricted Shares, without any restrictions or legend
thereon, shall be delivered to the applicable Participants;
(c) The target value attainable under all Performance Awards shall
be deemed to have been fully earned for the entire performance period
as of the effective date of the Change in Control, except that all
Performance Awards which shall have been outstanding less than six
(6) months on the effective date of the Change in Control shall not
be deemed to have earned the target value; and
(d) Subject to Section 14.3 hereof, all such other actions and
modifications to the Awards as determined by the Committee to be
appropriate before the Acquiring Person became an Acquiring Person
upon the Change in Control of the Corporation shall become effective.
10. Relationship of the Program to Benefit Plans
The amount of Bonuses to any Participant under this Program shall
be eligible for inclusion in the Participant's earnings base for the
purpose of determining the benefits to which the Participant is
entitled under retirement, savings, group life insurance, long-term
disability plans and other benefit plans of the Corporation or a
Participating Subsidiary as determined by the Committee. No other
income of a Participant attributable to this Program shall be
included in the Participant's earnings for purposes of any benefit
plan in which the Participant may be eligible to participate.
11. Effect of the Program On Right to Continued Employment and
Interest In Particular Property
None of the existence of this Program, any Awards granted pursuant
hereto or any Award Agreement shall create any right to continued
employment of any Employee by the Corporation or any of its
subsidiaries. No Participant shall have, under any circumstances,
any interest whatsoever, vested or contingent, in any particular
property or asset of the Corporation or any Participating Subsidiary
or in any particular Share or Shares of the Corporation that may be
held by the Corporation or any Participating Subsidiary (other than
Restricted Shares held by a custodian) by virtue of any Award. A
Participant may be granted additional Awards under this Program under
such circumstances and at such times as the Committee may determine;
provided, however, that no Participant shall be entitled to any Award
in the absence of a specific grant by the Committee of an Award,
notwithstanding the prior grant of an Award to such Participant.
This Program shall not be deemed a substitute for, and shall not
preclude the establishment or continuation of any other plan,
practice or arrangement that may now or hereafter be provided for the
payment of compensation, special awards or employee benefits to
employees of the Corporation and its subsidiaries generally, or to
any class or group of employees, including without limitation, any
savings, thrift, profit-sharing, pension, retirement, excess benefit,
insurance, health care plans or other employee benefit plans. Any
such arrangements may be authorized by the Corporation and its
subsidiaries and payment thereunder made independently of this
Program.
12. Withholding Taxes and Deferrals
12.1 Cash Withholding
The Corporation shall have the right to deduct from any cash
payment made under Awards under this Program any federal, state or
local income, or other taxes required by law to be withheld with
respect to such payment or to take such other action as may be
necessary in the opinion of the Corporation to satisfy all
obligations for the payment of such taxes.
12.2 Share Withholding
Any Share based Award may provide by the grant thereof that the
recipient of such Award may elect, in accordance with any applicable
laws, rules and regulations, to pay a portion or all of the amount of
such minimum required withholding taxes in Shares. In such event,
the Participant shall authorize the Corporation to withhold, or shall
agree to deliver to the Corporation, Shares owned by such Participant
or a portion of the Shares that otherwise would be distributed to
such Participant, having a Fair Market Value equal to the amount of
withholding tax liability.
12.3 Deferrals
The Committee may require or permit a Participant to defer such
Participant's receipt of the payment of cash or the delivery of
Shares that would otherwise be due to such Participant by virtue of
the exercise, the satisfaction of any requirements or goals or lapse
or waiver of restrictions of an Award made under this Program. If
any such deferment election is required or permitted, the Committee
shall establish rules and procedures for such payment deferrals.
13. Compliance With Applicable Legal Requirements
No certificate for Shares distributable pursuant to this Program
shall be issued and delivered unless the issuance of such certificate
complies with all applicable legal requirements including, without
limitation, compliance with the provisions of applicable state
securities laws, the Securities Act of 1933, as amended from time to
time or any successor statute, the Securities Exchange Act of 1934,
as amended from time to time or any successor statute and the
requirements of the exchanges on which Shares may, at the time, be
listed.
14. Amendments
14.1 Program Amendments
The Committee or the Board, as appropriate, may, insofar as
permitted by law, from time to time, with respect to any Shares at
the time not subject to Awards, suspend or discontinue this Program
or revise or amend it in any respect whatsoever; provided, however,
unless the Committee or the Board, as appropriate, specifically
otherwise provides, any revision or amendment that would cause this
Program to fail to comply with any requirement of applicable law,
regulation or rule if such amendment were not approved by the
shareholders of the Corporation shall not be effective unless and
until the approval of the shareholders of the Corporation is
obtained.
14.2 Amendments of Awards
Subject to the terms and conditions and within the limitations of
this Program, the Committee may amend, cancel, modify, or extend
outstanding Awards granted under this Program.
14.3 Rights of Participants
No amendment, suspension or termination of this Program nor any
amendment, cancellation or modification of any outstanding Award or
Award Agreement that would adversely affect the right of any
Participant with respect to an Award previously granted under this
Program will be effective without the written consent of the affected
Participant. Such written consent may be obtained simultaneously
with the grant of any Award.
15. Miscellaneous Provisions
15.1 Beneficiaries
Any Award Agreement may provide that in the case of an Award that
is not forfeitable by its terms upon the death of the Participant,
the Participant may designate a Beneficiary with respect to such
Award in the event of death of a Participant. If such Beneficiary is
the executor or administrator of the estate of the Participant, any
rights with respect to such Award may be transferred to the person or
persons or entity (including a trust) entitled thereto by bequest of
or inheritance from the holder of such Award.
15.2 Awards in Foreign Countries
The Committee shall have the authority to adopt such
modifications, procedures and subplans as may be necessary or
desirable to comply with provisions of the laws of foreign countries
in which the Corporation or its Participating Subsidiaries may
operate to assure the viability of the benefits of Awards made to
Participants employed in such countries and to meet the objectives of
this Program.
15.3 Non-Transferability
Except as otherwise provided in Award Agreements or in this
Program, Awards under this Program may not be transferred by
Participants during their lifetimes and may not be assigned, pledged
or otherwise transferred, except for those Awards which are not
forfeitable upon the death of a Participant may be transferred by
will or the laws of descent and distribution. The designation of a
Beneficiary shall not constitute a transfer.
15.4 Cancellation of Awards
Except as otherwise provided in this Program or in applicable
Award Agreements, the terms of which need not be uniform among
Participants, if a Participant to whom an Award is granted ceases to
be employed by the Corporation or by a Participating Subsidiary, all
of such Participant's unexercised Awards and Awards on which there
are restrictions shall be immediately canceled.
As amended and restated effective November 1, 1996.
<PAGE>
<PAGE>
Exhibit 10(i)
AMOCO FABRICS AND FIBERS COMPANY
CONSENT ACTION OF THE
BOARD OF DIRECTORS
October 15, 1996
Action by Consent of Directors, Amoco Fabrics and Fibers
Company, ("the Company") effective October 15, 1996.
We, the undersigned, being all of the Directors of the
Company, do hereby waive call, notice, meeting and vote and do
hereby consent to, confirm and verify the following corporate
action pursuant to authority vested by Delaware General
Corporation Law, Section 141(f):
Amoco Fabrics and Fibers Company
Hourly 401(k) Savings Plan
WHEREAS, Amoco Fabrics and Fibers Company maintains the
Amoco Fabrics and Fibers Company Hourly 401(k) Savings
Plan ("Plan"); and
WHEREAS, the first amendment of the Plan as Amended and
Restated effective January 1, 1996 is now considered
desirable;
NOW, THEREFORE, BE IT
RESOLVED, that pursuant to the power reserved the
Company under subsection 12.1 of the Plan, the Plan is
hereby amended, effective November 1, 1996, as
reflected on Attachment A.
FURTHER RESOLVED, that the officers of the Company be
and they hereby are authorized to take such actions as
they may deem necessary or appropriate to carry out the
intent and purpose of the foregoing resolution.
Amoco Fabrics and Fibers Company
Salaried 401(k) Savings Plan
WHEREAS, Amoco Fabrics and Fibers Company maintains the
Amoco Fabrics and Fibers Company Salaried 401(k)
Savings Plan ("Plan"); and
WHEREAS, the first amendment of the Plan is now
considered desirable;
NOW, THEREFORE, BE IT
RESOLVED, that pursuant to the power reserved the
Company under subsection 12.1 of the Plan, the Plan is
hereby amended, effective November 1, 1996, as
reflected on Attachment B.
FURTHER RESOLVED, that the officers of the Company be
and they hereby are authorized to take such actions as
they may deem necessary or appropriate to carry out the
intent and purpose of the foregoing resolution.
F. G. Andrusko
B. J. Armistead
J. Stover
The undersigned Assistant Secretary does hereby certify
that the signatories to the above instrument are, as of the date
hereof, all of the Directors of the Company.
Assistant Secretary
<PAGE>
<PAGE>
Attachment A
Amendment to
Amoco Fabrics and Fibers Company
Hourly 401(k) Savings Plan
1. By substituting for Section 2.4 of the Plan the following
new Section 2.4:
"2.4 "Applicable Compensation" means amounts paid by
Amoco or an Affiliated Company to an Employee who is
eligible to participate as (i) basic salary and wages,
including forms of base pay delivered in alternative forms
such as piecework; payment by mileage for drivers; overtime;
and shift differentials, (ii) pay-in-lieu of vacation, (iii)
commissions, (iv) variable incentive payments, (v) bonuses
in the year received while an Employee, including foreign
service premium payments made prior to January 1, 1997, (vi)
lump sum performance awards, and (vii) amounts contributed
on behalf of the Employee to a cafeteria plan or a cash or
deferred arrangement and not included in the Employee's
gross income for federal income tax purposes under Section
125 or 402(e)(3) of the Code, but excluding (i) sign-on,
retention, severance and separation payments, (ii) reward
and recognition payments, (iii) remuneration received
attributable to moving and educational expenses, (iv)
expense allowances and reimbursement for federal income tax
purposes, and (vi) any other items of remuneration.
For any Plan Year beginning on or after January 1, 1994, the
amount of Applicable Compensation taken into account under
the Plan for any Participant will not exceed $150,000 or
such greater amount as may be determined by the Commissioner
of Internal Revenue for that year. In determining the
compensation of a Participant for purposes of this
limitation, the rules of Section 414(q)(6) of the Code shall
apply, except in applying such rules, the term "family"
shall include only the spouse of the Participant and any
lineal descendants of the Participant who have not attained
age 19 before the close of the year. If as a result of the
application of such rules the adjusted annual compensation
limitation is exceeded, then the limitation shall be
prorated among the affected individuals in proportion to
each such individual's compensation as determined under this
section prior to the application of this limitation.
If compensation for any prior determination period is taken
into account in determining a Participant's allocations for
the current Plan Year, the compensation for such prior
determination period is subject to the applicable annual
compensation limit in effect for that prior period. For
this purpose, in determining allocations in Plan Years
beginning on or after January 1, 1994, the annual
compensation limit in effect for determination periods
beginning before that date is $150,000 (as adjusted in
accordance with Code Section 401(a)(17))."
2. By adding the following new Section 2.26 immediately after
Section 2.25:
"2.26 "Employee" means a person who is an employee
of Amoco or an Affiliated Company."
3. By substituting for Section 3.1 of the Plan the following
new Section 3.1:
"3.1 Eligible Class. Each Hourly Employee employed by
an Employer who is remunerated in U. S. Currency through an
Employer's payroll system, who is classified as an employee
by an Employer and who has not been specifically excluded
pursuant to his Employer's participation agreement is in
the eligible class, except the following:
(a) an Hourly Employee who is represented by a union
unless the union and the Employer have entered into a
collective bargaining or other agreement that provides that
the Hourly Employee shall participate in the Plan; or
(b) an Hourly Employee who is a nonresident alien
(within the meaning of Code Section 7701(b)(1)(B)) and who
receives no earned income (within the meaning of Code
Section 911(d)(2)) from the Employer which constitutes
income from sources within the United States (within the
meaning of Code Section 861(a)(3)); or
(c) an Hourly Employee who is employed by an Employer
pursuant to an agreement that provides that the individual
shall not be eligible to participate in the Plan."
4. By adding the following new Section 16.14 immediately after
Section 16.13:
"16.14 Uniformed Services Employment and
Reemployment Rights Act of 1994 ("USERRA"). Notwithstanding
any provision of the Plan to the contrary, any Participant
or Eligible Employee who is reemployed by an Employer after
serving in the United States military within the time period
prescribed by USERRA on or after December 12, 1994 shall be
treated as not having incurred a break in service due to
military service. Such reemployed individual shall have up
to three times his period of military service to make missed
Participant contributions, not to exceed five years. The
Employer will make the applicable Company Matching
Contributions with respect to any Participant contributions
made pursuant to this Section. No interest will be charged
on either the Participant and Company Matching
Contributions, and the Participant will not be credited with
interest or earnings that would have been earned on such
contributions."
<PAGE>
<PAGE>
Exhibit 10(j)
AMOCO FABRICS AND FIBERS COMPANY
SALARIED 401(k) SAVINGS PLAN
Effective January 1, 1996
<PAGE>
<PAGE>
AMOCO FABRICS AND FIBERS COMPANY
SALARIED 401(k) SAVINGS PLAN
TABLE OF CONTENTS
Page
I INTRODUCTION
1.1 Effective Date 1
1.2 Compliance with Code and ERISA 1
1.3 Exclusive Benefit of Participants 1
1.4 Limitation on Rights Created by Plan 1
1.5 Application of Plan's Terms 1
1.6 Benefits Not Guaranteed 2
II DEFINITIONS
2.1 Affiliated Company 3
2.2 Amoco 3
2.3 Amoco Corporation 3
2.4 Applicable Compensation 3
2.5 Beneficiary 4
2.6 Casual Employee 4
2.7 Code 4
2.8 Employer 4
2.9 Entry Date 4
2.10 ERISA 4
2.11 Highly-Compensated Employee 4
2.12 Hour of Service 6
2.13 Hourly Employee 6
2.14 Part-Time Employee 6
2.15 Participant 6
2.16 Plan 7
2.17 Plan Year 7
2.18 Pre-Tax Contributions 7
2.19 Regular Employee 7
2.20 Salaried Employee 7
2.21 Spouse. 7
2.22 Temporary Employee 7
2.23 Trust Agreement 7
2.24 Trust Fund. 7
2.25 Trustee 7
III PARTICIPATION
3.1 Eligible Class. 9
3.2 Participation 10
3.3 End of Participation 10
3.4 Reentry of Former Participant 10
IV PRE-TAX CONTRIBUTIONS BY PARTICIPANTS
4.1 Pre-Tax Contributions 11
4.2 Procedure for Pre-Tax Contributions 11
4.3 Collection of Pre-Tax Contributions 11
4.4 Change in Pre-Tax Contributions 11
4.5 401(k) Pre-Tax Contributions Limitation 12
4.6 Maximum Amount of Participant Pre-Tax Contributions 13
4.7 Direct Rollover Contributions 13
V COMPANY MATCHING CONTRIBUTIONS
5.1 Company Matching Contributions 15
5.2 Time of Contribution 15
5.3 Section 415 Annual Contribution Limitation 15
5.4 Combined Benefit Limitations 16
5.5 Limitation on Allocation of Contributions 16
5.6 Allocation of Earnings to Distributions of Excess
Contributions 17
5.7 Multiple Use of Alternative Limitation 17
5.8 No Interest in Company 18
VI ACCOUNTS AND CREDITS
6.1 Establishment of Accounts 19
6.2 Crediting Participants' Pre-Tax Contributions 19
6.3 Crediting Matching Contributions 19
6.4 Crediting Rollovers 19
6.5 Charge to Accounts 19
VII INVESTMENT FUNDS AND CREDITING INVESTMENT EXPERIENCE
7.1 Investment Funds 20
7.2 Investment Directions and Transfers Among Funds 20
7.3 Valuation of Assets 21
7.4 Crediting Investment Experience 21
VIII LOANS TO PARTICIPANTS
8.1 Plan Administrator Shall Administer the Loan Program 23
8.2 Availability of Loans 23
8.3 Conditions of Loan 23
8.4 Accounting for Loans 25
IX IN-SERVICE WITHDRAWALS
9.1 Withdrawals From Rollover Account 26
9.2 Withdrawals From Pre-Tax Contribution Account 26
9.3 Order of Asset Liquidation for All Withdrawals 27
X DISTRIBUTIONS
10.1 Distributions 28
10.2 Termination of Employment Prior to Retirement
or Death 28
10.3 Reemployment 31
10.4 $3,500 Cash-Out 31
10.5 Required Distribution Date 31
10.6 Distribution Upon Death of a Participant 32
10.7 Rehire Before Distribution 33
10.8 Waiver of 30-Day Notice 33
XI DIRECT ROLLOVERS
11.1 Direct Rollover 34
11.2 Definitions 34
XII AMENDMENT, MERGER AND TERMINATION OF PLAN
12.1 Amendment of Plan 36
12.2 Merger of Plans 36
12.3 Termination 36
12.4 Effect of Termination 36
XIII NAMED FIDUCIARIES
13.1 Identity of Named Fiduciaries 38
13.2 Responsibilities and Authority of Plan Administrator 38
13.3 Responsibilities and Authority of Trustee 38
13.4 Responsibilities of Amoco 38
13.5 Responsibilities Not Shared 38
13.6 Dual Fiduciary Capacity Permitted 39
13.7 Actions by Amoco. 39
13.8 Advice 39
XIV PLAN ADMINISTRATOR
14.1 Appointment 40
14.2 Notice to Trustee 40
14.3 Administration of Plan. 40
14.4 Reporting and Disclosure 40
14.5 Records 40
14.6 Claims Review Procedure. 40
14.7 Administrative Discretion; Final Authority 41
XV PARTICIPATING EMPLOYERS
15.1 Adoption by Other Employers 42
15.2 Designation of Agent 42
15.3 Employee Transfers 42
15.4 Discontinuance of Participation 42
15.5 Participating Employer Contribution for Affiliate 42
XVI MISCELLANEOUS
16.1 Qualified Domestic Relations Orders 43
16.2 Nonalienation of Benefits 43
16.3 Payment of Minors and Incompetents 43
16.4 Current Address of Payee 43
16.5 Disputes over Entitlement to Benefits 44
16.6 Payment of Benefits 44
16.7 Plan Supplements 44
16.8 Rules of Construction 44
16.9 Text Controls 44
16.10 Applicable State Law 45
16.11 Plan Administration Expenses 45
16.12 Voting and Tendering of Amoco Stock 45
16.13 Action by Company 46
SUPPLEMENT A
Special Rules for Top-Heavy Plans A-1
<PAGE>
<PAGE>
ARTICLE I
INTRODUCTION
1.1 Effective Date. Amoco Fabrics and Fibers Company
established the Amoco Fabrics and Fibers Company Salaried 401(k)
Savings Plan ("Plan") effective as of January 1, 1996.
1.2 Compliance with Code and ERISA. This Plan is intended
to qualify as a profit-sharing plan under Code Section 401(a) and
a cash or deferred arrangement under Code Section 401(k). It is
also intended to comply with the applicable provisions of ERISA.
The Plan will be interpreted in a manner that comports with these
intentions.
1.3 Exclusive Benefit of Participants. The Plan is for the
exclusive benefit of Participants and their Beneficiaries.
Employer and Participant contributions are made to the Trust Fund
for the purpose of accumulating a fund for distribution to
Participants and their Beneficiaries in accordance with the Plan.
Except as provided in Section 5.6, no part of the Trust Fund or
any distribution therefrom will be used for or diverted to
purposes other than for the exclusive benefit of Participants and
their Beneficiaries and defraying the reasonable expenses of
administering the Plan and Trust Fund not paid by the Employer.
1.4 Limitation on Rights Created by Plan. Nothing
appearing in the Plan will be construed (a) to give any person
any benefit, right or interest except as expressly provided
herein, or (b) to create a contract of employment or to give any
Employee the right to continue as an Employee or to affect or
modify his terms of employment in any way.
1.5 Application of Plan's Terms. The benefits and rights
of a Participant and his Beneficiaries under the Plan will be
determined in accordance with the terms of the Plan that are in
effect on the date that contributions on a Participant's behalf
are made or credited to his Accounts or on the date of the
Participant's retirement, death or other termination of
employment, whichever may be applicable.
1.6 Benefits Not Guaranteed. The Employer and the Trustee
do not guarantee the payment of benefits hereunder. Benefits
will be paid from the assets of the Trust Fund and are limited to
the amount of assets therein.
<PAGE>
<PAGE>
ARTICLE II
DEFINITIONS
This article contains a number of definitions of terms used
in the Plan. Other terms are defined, explained or clarified in
other articles. This is done for convenience of plan
administration. There is no other significance to the location
of a definition.
2.1 "Affiliated Company" means (i) any corporation (foreign
or domestic) controlled by, controlling or under common control
with Amoco Corporation, by ownership, direct or indirect, of more
than eighty percent (80%) of the voting stock thereof, and any of
their respective successors in business; (ii) a trade or business
which is under common control (as defined in Code Section 414(c))
with Amoco Corporation; (iii) a corporation, partnership or other
entity which, together with Amoco, is a member of an affiliated
service group (as defined in Code Section 414(m)); or (iv) an
organization which is required to be aggregated with Amoco
pursuant to regulations promulgated under Code Section 414(o).
2.2 "Amoco" means Amoco Fabrics and Fibers Company, a
Delaware Corporation, or its successor.
2.3 "Amoco Corporation" means Amoco Corporation, an Indiana
Corporation, or its successor.
2.4 "Applicable Compensation" of a Participant means his
total salary, wages and commissions; overtime; shift
differentials; bonuses, including bonuses in the form of premium
pay for services rendered outside of normal working hours or
conditions; and variable incentive payments, paid to him for
services rendered to an Employer, before reduction for any pre-
tax contributions he elected under section 4.1 and any Code
Section 125 cafeteria plan, but excluding any compensation for
any year in excess of $150,000 (or such greater amount as may be
determined by the Commissioner of Internal Revenue for that
year).
2.5 "Beneficiary" means a person or persons (natural or
otherwise) designated by a Participant in accordance with Section
10.6 (b) to receive any death benefit payable under this Plan, or
if there is no such designation, the person (natural or otherwise
entitled) to receive any death benefit in accordance with Section
10.6 (c).
2.6 "Casual Employee" means a person who is employed for
work which is irregular or occasional in nature, and who works
the schedule of hours (either daily or weekly) in effect at the
place of employment for employees regularly assigned to the same
or similar work.
2.7 "Code" means the Internal Revenue Code of 1986, as
amended from time to time, or any successor statute enacted in
its place.
2.8 "Employer" means Amoco or any successor organization,
and any other entity of Amoco that adopts the Plan for its
Employees with the consent of Amoco in accordance with Section
15. The term "Employer" may refer to each Employer individually
or to all the Employers collectively, as the context may require.
2.9 "Entry Date" means the date an Employee is eligible to
participate in the Plan pursuant to Section 3.2 and Section 3.4.
2.10 "ERISA" means the Employee Retirement Income Security
Act of 1974, as amended from time to time, or any successor
statute enacted in its place.
2.11 "Highly-Compensated Employee" means any present or
former employee who, during the current or immediately preceding
plan year:
(a) was a five percent (5%) owner of the
company at any time during the "determination
year" or "look-back year";
(b) received annual compensation from a
participating Employer of more than $75,000 during
the "look-back year" (or such greater amount as
may be determined by the Commissioner of Internal
Revenue for that year);
(c) received annual compensation during the
"look-back year" from a participating Employer of
more than $50,000 (or such greater amount as may
be determined by the Commissioner of Internal
Revenue for that year) and was in the top-paid
twenty percent (20%) of the employees; or
(d) was an officer of a participating
Employer during the "look-back year" receiving
annual compensation greater than fifty percent
(50%) of the limitation in effect under Section
415(b)(1)(A) of the Internal Revenue Code;
provided, that for purposes of this subparagraph
(d), no more than 50 employees of the company (or
if lesser, the greater of 3 employees or ten
percent (10%) of the employees) shall be treated
as officers.
For purposes of subsection 2.11, 4.5 and 5.5, an employee's
compensation means his total cash compensation for services
rendered to a participating Employer as an employee, determined
in accordance with Section 415(c)(3) of the Internal Revenue Code
and the regulations thereunder, but including Pre-Tax
Contributions he had elected under subsection 4.1 and any Code
Section 125 cafeteria plan.
The term highly-compensated employee also includes employees
who are both described in the preceding sentence if the term
"determination year" is substituted for the term "look-back year"
and the employee is one of the 100 employees who received the
most compensation from a participating Employer during the
determination year. The "look-back year" shall be the calendar
year ending with or within the Plan Year for which testing is
being performed, and the "determination year" (if applicable)
shall be the period of time, if any, which extends beyond the
"look-back year" and ends on the last day of the Plan Year for
which testing is being performed (the "lag period"). If the "lag
period" is less than twelve months long, the dollar threshold
amounts specified in this section shall be prorated based upon
the number of months in the "lag period".
If an employee is, during a determination year or look-back
year, a family member of either a five percent (5%) owner who is
an active or former employee or a highly-compensated employee who
is one of the 10 most highly-compensated employees ranked on the
basis of compensation paid by the employer during such year, then
the family member and the five percent (5%) owner or top-10
highly-compensated employee shall be aggregated. In such case,
the family member and five percent (5%) owner or top-10 highly-
compensated employee shall be treated as a single employee
receiving compensation and plan contributions or benefits equal
to the sum of such compensation and contributions or benefits of
the family member and five percent (5%) owner or top-10 highly-
compensated employee. For purposes of this section, family member
includes the spouse, lineal ascendants and descendants of the employee
or former employee and the spouses of such lineal ascendants and
descendants.
2.12 "Hour of Service," for purposes of determining an
Employee's eligibility to participate under Section 3.2 and Year
of Vesting Service under Section 10.2 (b), means any hour for
which an Employee is compensated by an Employer, directly or
indirectly, or is entitled to compensation from an Employer for
the performance of duties and for reasons other than the
performance of duties, and each previously uncredited hour for
which back pay has been awarded or agreed to by an Employer,
irrespective of mitigation of damages. Hours of Service shall be
credited to the period for which duties are performed (or for
which payment is made if no duties were performed), except that
Hours of Service for which back pay is awarded or agreed to by an
Employer shall be credited to the period to which the back pay
award or agreement pertains. The rules for crediting Hours of
Service set forth in paragraphs (b) and (c) of Section 2530.200b-
2 of Department of Labor regulations are incorporated by
reference. References in this section to an Employer shall
include any affiliated or related corporation which is a
controlled group member as defined in the Code.
2.13 "Hourly Employee" means a person who is compensated on
the basis of an hourly rate or rates of pay.
2.14 "Part-Time Employee" means a person who is employed for
work which is irregular or occasional in nature and who works
less than the schedule of hours (either daily or weekly) in
effect at the place of employment for employees regularly
assigned to the same or similar work.
2.15 "Participant" means an Employee or former Employee
whose participation in the Plan has begun and has not yet ended.
2.16 "Plan" means the Amoco Fabrics and Fibers Company
Employee Savings Plan, as set forth in this Plan document, and as
it may be amended from time to time.
2.17 "Plan Year" means the 12-month period beginning on
January 1 and ending on the next following December 31.
2.18 "Pre-Tax Contributions" means contributions by an
Employer on behalf of a Participant in the amount equal to the
amount such Participant elects, in writing filed with his
Employer, which reduces his compensation subject to federal
income taxation.
2.19 "Regular Employee" means a person who is assigned to a
position which requires full-time service as determined by his
Employer, which is established to fill regular and ordinary
employment requirements, and which is expected to continue for an
indefinite period of time.
2.20 "Salaried Employee" means a person who is principally
compensated on the basis of a monthly or annual rate of pay.
2.21 "Spouse" means the person to whom a Participant is
lawfully married (under the law of the state in which the
Participant resides).
2.22 "Temporary Employee" means a person who is assigned to
a position which requires full-time service as determined by his
Employer, which is established due to an unusual circumstance,
and which will continue for a specific period of time or until
the occurrence of a specified event such as the return to work of
a regular employee or the completion of a special assignment or
project.
2.23 "Trust Agreement" means the instrument executed by
Amoco and the Trustee, as amended from time to time, fixing the
rights and responsibilities of each party with respect to the
holding, investment and administration of the Trust Fund.
2.24 "Trust Fund" means the property held by the Trustee for
the purposes of the Plan.
2.25 "Trustee" means the person, individual or corporation,
serving as sole trustee, or the persons serving as co-trustees,
at any time under the terms of the Trust Agreement. Copies of
the Plan and Trust Agreement, and any amendments thereto, will be
on file at Amoco Corporation at 200 East Randolph Drive, Chicago,
Illinois 60601, where they may be examined by any participant or
other person entitled to benefits under the Plan. The provisions
of and benefits under the Plan are subject to the terms and
provisions of the Trust Agreement.
<PAGE>
<PAGE>
ARTICLE III
PARTICIPATION
3.1 Eligible Class. Each Salaried Employee employed by a
participating Employer is in the eligible class, except the
following:
(a) Salaried Employees included in a unit of Employees
covered by a collective bargaining agreement between the employer
and Employee representatives, if retirement benefits were the
subject of good faith bargaining and if two percent or less of
the employees who are covered pursuant to that agreement are
professionals as defined in section 1.410(b)-9 of the Internal
Revenue Service regulations. For this purpose, the term
"Employee representatives" does not include any organization more
than half of whose members are Employees who are owners,
officers, or executives of the employer.
(b) Salaried Employees who are nonresident aliens (within
the meaning of Code Section 7701(b)(1)(B)) and who receive no
earned income (within the meaning of Code Section 911(d)(2)) from
the employer which constitutes income from sources within the
United States (within the meaning of Code Section 861(a)(3)).
(c) Salaried Employees who are leased employees (as defined
below). A "leased employee" means any person who is not an
employee of a participating Employer, but who has provided
services to a participating Employer of a type which have historically
(within the business field of a participating Employer) been
provided by employees, on a substantially full-time basis for a
period of at least one year, pursuant to an agreement between a
participating Employer and a leasing organization. The period
during which a leased employee performs services for a
participating Employer shall be taken into account for purposes
of subsection 3.2 and 10.2 of the Plan if such leased employee
becomes an employee of a participating Employer; unless (i) such
leased employee is a participant in a money purchase pension plan
maintained by the leasing organization which provides a non-
integrated employer contribution rate of at least ten percent
(10%) of compensation, immediate participation for all employees
and full and immediate vesting, and (ii) leased employees do not
constitute more than twenty percent (20%) of a participating
Employer's nonhighly compensated workforce.
3.2 Participation. Participation in the Plan is voluntary
and no Salaried Employee will be required to participate.
Subject to the conditions and limitations of the Plan, each
Salaried Employee in the Eligible Class who is employed on
January 1, 1996, is eligible to participate immediately. Each
Salaried Employee in the Eligible Class hired after January 1,
1996, will be eligible to participate as follows. A Regular or
Temporary Employee in the Eligible Class will be eligible to
participate starting as soon as administratively practicable
after the first day his employment commences with his Employer.
A Casual or Part-Time Employee in the Eligible Class will be
eligible to participate as soon as administratively practicable
after the first day of his payroll cycle starting immediately
after he is credited with 1,000 Hours of Service within the fiscal
year commencing with his date of hire or, if he fails to meet that
requirement, as soon as administratively practicable after the
first day of his payroll cycle starting immediately after he is
credited with 1,000 Hours of Service within any succeeding Plan Year.
3.3 End of Participation. A Participant's active
participation in the Plan will end upon the termination of his
service as a Salaried Employee in the Eligible Class for any
reason. A Participant's participation in the Plan will end when
he has no further interest under the Plan.
3.4 Reentry of Former Participant. A former Participant
who terminates his service with his Employer and who returns to
service as a Salaried Employee in the Eligible Class will become
an active Participant on his date of rehire and will be eligible
to make Pre-Tax Contributions starting on the first date of his
payroll cycle, of the calendar month, starting immediately on or
after his date of rehire.
<PAGE>
<PAGE>
ARTICLE IV
PRE-TAX CONTRIBUTIONS BY PARTICIPANTS
4.1 Pre-Tax Contributions. Under the terms stated below,
and subject to any limitations contained in the Plan, a
Participant may elect to make Pre-Tax Contributions to the Plan
in integral percentages of his Applicable Compensation from a
minimum of one percent to a maximum of sixteen percent (16%).
4.2 Procedure for Pre-Tax Contributions. A Participant who
wishes to make Pre-Tax Contributions must notify the Plan
Administrator and specify the amount of his Pre-Tax Contributions
and provide such other information as the Plan Administrator may
require. A Participant will be given the opportunity to elect
Pre-Tax Contributions beginning on the first date when he is
eligible to participate in the Plan pursuant to Article III. His
Pre-Tax Contributions will begin on such date provided he gives
the Plan Administrator advance notice in the manner prescribed by
the Plan Administrator by the date required by the Plan
Administrator. If the Participant declines to make Pre-Tax
Contributions initially, he may elect to begin making Pre-Tax
Contributions as of the first day of any of his subsequent
payroll cycles, of the applicable calendar month, provided he
notifies the Plan Administrator by the date required by the Plan
Administrator.
4.3 Collection of Pre-Tax Contributions. The Employer will
collect Participants' Pre-Tax Contributions using payroll
procedures. A Participant's Pre-Tax Contributions shall be
deducted by his Employer from his compensation at the time of
payment of such compensation. Amounts so deducted (or by which a
Participant's compensation has been so reduced) for any
accounting period under the Plan shall be paid to the trustee as
soon as practicable thereafter, but no later than thirty days
after the accounting date which ends that accounting period.
4.4 Change in Pre-Tax Contributions.
(a) Increase or Reduction. A Participant making Pre-
Tax Contributions may increase or reduce the rate of his Pre-Tax
Contributions to any higher or lower rate he elects (subject to
the limitations stated in Section 4.1) by notifying the Plan
Administrator once a calendar month. The new rate will become
effective with his first payroll cycle of the applicable calendar
month after the Plan Administrator has been notified.
(b) Suspension. A Participant may suspend his Pre-Tax
Contributions by notifying the Plan Administrator. The
suspension of Pre-Tax Contributions will become effective with
his first payroll cycle of the applicable calendar month after
notifying the Plan Administrator.
(c) Resumption. A Participant who suspended his Pre-
Tax Contributions may resume such contributions on the first day
of
his payroll cycle of the applicable calendar month after
notifying the Plan Administrator by the date required by the Plan
Administrator.
(d) Plan Administrator Rules. The Plan Administrator
may establish such rules and procedures for Pre-Tax Contributions
as the Plan Administrator deems necessary for the efficient
administration of the Plan.
4.5 401(k) Pre-Tax Contributions Limitation.
Notwithstanding the foregoing provisions of this Section 4, in no
event shall the average deferral percentage (as defined below)
for any Plan Year of the highly compensated employees who are
Plan Participants exceed the greater of:
(a) the average deferral percentage of all
other Participants for such Plan Year multiplied
by 1.25; or
(b) the average deferral percentage of all
other Participants for such Plan Year multiplied
by 2.0; provided that the average deferral
percentage of such highly compensated employees
does not exceed that of all other Participants by
more than 2 percentage points.
The "average deferral percentage" of a group of Participants for
a Plan Year means the average of the ratios (determined
separately for each Participant in such group to the nearest one-
hundredth of one percent) of: (i) the Pre-Tax Contributions made by such
Participant for such Plan Year; to (ii) the Participant's
compensation (as defined in subsection 2.11) for such Plan Year.
For purposes of this subsection 4.5, a Participant means any
employee who is eligible to make contributions under the Plan.
The Pre-Tax Contributions made by the highly compensated
employees will be reduced (in the order of their contribution
percentages beginning with the highest percentage) to the extent
necessary to meet the requirements of this subsection 4.5. If,
because of the foregoing limitations, a portion of the Pre-Tax
Contributions made by a highly compensated employee may not be
credited to his account for a Plan Year, such portion (and the
earnings thereon) shall be distributed to such employee within
two and one-half months after the end of that Plan Year.
4.6 Maximum Amount of Participant Pre-Tax Contributions.
In no event shall the amount of Pre-Tax Contributions by a
Participant for any calendar year exceed $9,500 (or such greater
amount as may be determined by the Commissioner of Internal
Revenue for that calendar year). If, because of the foregoing
limitation, a portion of the Pre-Tax Contributions made by a
Participant may not be credited to his account for a calendar
year, such portion (and the earnings thereon) shall be
distributed to the Participant by April 15 of the following
calendar year.
4.7 Direct Rollover Contributions.
(a) With the approval of the Plan Administrator, a
Salaried Employee may make a direct rollover ("Rollover
Contribution") to the Plan in cash in an amount which constitutes
all or part of an "Eligible Rollover Distribution" (as defined in
Section 401(a)(31)(C) of the Code) from a qualified defined
benefit and/or defined contribution plan (except a "Keogh" plan
and/or an Individual Retirement Account) as defined in the Code.
However, a direct rollover to this Plan of accumulated deductible
employee contributions made under another plan will not be
permitted, and a direct or indirect transfer to this Plan from
another qualified plan will not be permitted if such transfer
would subject this Plan to the qualified joint and survivor rules
of Code Section 401(a)(11).
(b) The Employer, the Plan Administrator and the
Trustee have no responsibility for determining the propriety of,
proper amount or time of, or status as a tax-free transaction of,
any transfer under subsection (a) above.
(c) The Plan Administrator shall develop such
procedures, and may require such information from an the
individual who is requesting to make a direct rollover to the
Plan, as necessary or desirable in order to determine that the
proposed rollover will meet the requirements of this Section 4.7.
(d) A direct rollover will be credited to a separate
Rollover Account in the name of the Participant making such
Rollover Contribution. Such account shall be 100% vested in the
Participant.
(e) The Plan Administrator in its discretion may
direct the return to the Participant of any Rollover Contribution
to the extent the Plan Administrator determines that such return
may be necessary to insure the continued qualification of this
Plan under Section 401(a) of the Code or that the holding of such
Rollover Contributions would be administratively burdensome.
<PAGE>
<PAGE>
ARTICLE V
COMPANY MATCHING CONTRIBUTIONS
5.1 Company Matching Contributions. For each Plan Year the
Employer will make a matching contribution ("Company Matching
Contributions") on behalf of each Participant who makes Pre-Tax
Contributions during such Plan Year in accordance with the
following schedule. For each Plan Year the Company Matching
Contributions made on behalf of each Participant will equal fifty
percent (50%) of the sum of such Participant's Pre-Tax
Contributions which are equal to or less than six percent (6%)
of such Participant's Applicable Compensation.
5.2 Time of Contribution. The Employer will make Company
Matching Contributions under Section 5.1 to the Trustee in cash
and will normally make such contributions as soon as practicable
after each payroll cycle. In any event, such contributions will
be made, without interest, to the Trustee no later than the due
date (including extensions) for filing the Employer's federal
income tax return for such year.
5.3 Section 415 Annual Contribution Limitation.
(a) Notwithstanding anything contained herein to the
contrary, the annual additions (Pre-Tax Contributions and Company
Matching Contributions) to a Participant's Accounts for each Plan
Year (which will be the limitation year for purposes of Code
Section 415) may not exceed the lesser of (i) $30,000, as
adjusted periodically for cost-of-living changes in accordance
with Code Section 415 and regulations thereunder, or (ii) twenty-
five percent (25%) of his total Code Section 415 compensation for
such Plan Year. "Code Section 415 compensation" means a
Participant's compensation for services rendered to an Employer
as an employee determined in accordance with Section 415(c)(3) of
the Code and the regulations thereunder.
(b) Annual additions to a Participant's Account for
any Plan Year means the sum of the annual additions (as defined
in Code Section 415(c)(2)) under all qualified defined
contribution plans maintained by Amoco or any Affiliated Company.
(c) If the foregoing limit is applicable to a
Participant for a Plan Year, the Plan Administrator shall reduce
the annual additions to such Participants' Accounts by returning
contributions in the following order of priority:
(i) the Pre-Tax Contributions made on behalf of
the Participant under this Plan; and
(ii) the Company Matching Contributions made on
behalf of the Participant under this Plan.
5.4 Combined Benefit Limitations. If a Participant in this
Plan also is a Participant in a defined benefit plan maintained
by Amoco or a member of Amoco Corporation's controlled group of
corporations, the aggregate benefits payable to, or on account
of, him under both plans will be determined in a manner consistent
with Section 415 of the Code and Section 1106 of the Tax Reform
Act of 1986. Accordingly, there will be determined with respect
to the Participant a defined contribution plan fraction and a
defined benefit plan fraction in accordance with said Sections
415 and 1106. The benefits provided for the Participant under
the defined benefit plan will be adjusted to the extent necessary
so that the sum of such fractions determined with respect to the
Participant does not exceed 1.0.
5.5 Limitation on Allocation of Contributions.
Notwithstanding the foregoing provisions of this Section 5, in no
event shall the contribution percentage (as defined below) of the
highly compensate employees who are Plan Participants for any
Plan Year exceed the greater of:
(a) the contribution percentage of all other
Participants for such Plan Year multiplied by
1.25; or
(b) the contribution percentage of all other
Participants for such Plan Year multiplied by 2.0;
provided that the contribution percentage of the
highly compensate employees does not exceed that
of all other Participants by more than 2
percentage points.
The "contribution percentage" of a group of Participants for a
Plan Year means the average of the ratios (determined separately
for each Participant in such group) of: (i) the sum of company
matching contributions for such Plan Year; to (ii) the
Participant's compensation (as defined in subsection 2.4) for
such Plan Year. For purposes of this subsection 5.5, a
Participant means any employee who is eligible to receive company
matching contributions. The company matching contributions
allocated to the highly compensated employees will be reduced (in
the order of their contribution percentages beginning with the
highest percentage) to the extent necessary to meet the
requirements of this subsection. If, because of the foregoing
limitations, a portion of the matching contributions allocated to
a highly compensated employee may not be credited to his account
for a Plan Year, such portion (and the earnings thereon) shall be
distributed to such employee within two and one-half months after
the end of that Plan Year.
5.6 Allocation of Earnings to Distributions of Excess
Contributions. The earnings allocable to distributions of Pre-
Tax Contributions exceeding the limits of subsection 4.5 and Pre-
Tax Contributions exceeding the limits of subsection 4.6 shall be
determined by multiplying the earnings attributable to the
Participant's Pre-Tax Contributions for the year by a fraction,
the numerator of which is the applicable excess amount, and the
denominator of which is the balance in the appropriate account of
the Participant on the last day of such year reduced by gains (or
increased by losses) attributable to such account for the year.
The earnings as so determined shall be increased by ten percent
(10%) thereof for each month (or portion thereof in excess of 15
days) between the end of the year and the date of distribution.
5.7 Multiple Use of Alternative Limitation. In accordance
with Treasury regulation 1.401(m)-2(c), multiple use of the
alternative limitation which occurs as a result of testing under
the limitations described in subsections 4.5 and 5.5 will be
corrected in the manner described in Treasury Regulation 1.401(m)-
1(e). The term "alternative limitation" as used above means the
alternative methods of compliance with Sections 401(k) and 401(m)
of the Code contained in Sections 401(k)(3)(A)(ii)(II) and
401(m)(2)(A)(ii) thereof, respectively.
5.8 No Interest in Company. A Participating Employer shall
have no right, title or interest in the trust fund, nor shall any
part of the trust fund revert or be repaid to a Participating
Employer, directly or indirectly, unless:
(a) the Internal Revenue Service initially
determines that the Plan does not meet the
requirements of Section 401(a) of the Code, in
which event the contributions made to the Plan by
a Participating Employer shall be returned to it
within one year after such adverse determination;
(b) a contribution is made by a
Participating Employer by mistake of fact and such
contribution is returned to the Participating
Employer within one year after payment to the
trustee; or
(c) a contribution conditioned on the
deductibility thereof is disallowed as an expense
for federal income tax purposes and such
contribution (to the extent disallowed) is
returned to a Participating Employer within one
year after the disallowance of the deduction.
Contributions may be returned to a Participating Employer
pursuant to the subparagraph (a) above only if they are
conditioned upon initial qualification of the Plan, and an
application for determination was made by the time prescribed by
law for filing Amoco's Federal income tax return for the taxable
year in which the Plan was adopted (or such later date as the
Secretary of the Treasury may prescribe). The amount of any
contribution that may be returned to a Participating Employer
pursuant to subparagraph (b) or (c) above must be reduced by any
portion thereof previously distributed from the trust fund and by
any losses of the trust fund allocable thereto, and in no event
may the return of such contribution cause any Participant's
account balances to be less than the amount of such balances had
the contribution not been made under the Plan.
<PAGE>
<PAGE>
ARTICLE VI
ACCOUNTS AND CREDITS
6.1 Establishment of Accounts. The Plan Administrator will
establish and maintain in the name of each Participant such of
the following accounts as are appropriate for the Participant:
(a) Pre-Tax Contribution Account;
(b) Company Contribution Account; and
(c) Rollover Account.
Credit and charges to such Accounts will be made as provided in
the Plan. A Participant is 100% vested in his Pre-Tax
Contributions Account and Rollover Account at all times.
6.2 Crediting Participants' Pre-Tax Contributions. Pre-Tax
Contributions made by a Participant for a payroll cycle will be
credited to such Participant's Accounts as of the Valuation Date
(as defined in Section 7.3) (as soon as practicable) immediately
following receipt thereof by the Trustee.
6.3 Crediting Matching Contributions. Company Matching
Contributions made pursuant to Section 5.1 for a payroll cycle
will be credited to the Company Contribution Account of those
Participants entitled to a Company Matching Contribution for such
payroll cycle as of the Valuation Date (as soon as practicable)
immediately following receipt thereof by the Trustee.
6.4 Crediting Rollovers. Rollovers will be credited to the
Participant's Rollover Account as of the Valuation Date (as soon
as practicable) immediately following receipt thereof by the
Trustee.
6.5 Charge to Accounts. Any amount distributed, paid or
withdrawn from an Account will be charged against such Account as
of the Valuation Date on which the distribution, payment or
withdrawal occurs.
<PAGE>
<PAGE>
ARTICLE VII
INVESTMENT FUNDS AND CREDITING INVESTMENT EXPERIENCE
7.1 Investment Funds. The Trustee will separate the Trust
Fund into four Investment Funds as follows:
(a) Amoco Stock Fund
(b) Money Market Fund
(c) Equity Index Fund
(d) Balanced Fund
The Plan Administrator will maintain records which reflect
the portion of each Account of a Participant that is invested in
each separate Investment Fund. The existence of such records and
of Participants' Accounts will not be deemed to give any person
any right, title or interest in or to any specific assets or part
of the Trust Fund or any separate Investment Fund.
7.2 Investment Directions and Transfers Among Funds.
(a) Investment of Accounts. Each Participant may
direct the separate Investment Fund or Funds in which his
Accounts will be invested. Once a calendar month, a Participant
may direct investment of his Pre-Tax Contributions to his Account
entirely in one Investment Fund or in a combination of two or
more of the Investment Funds, provided that combinations must be
specified in five percent (5%) increments and the total
combinations must equal 100%. Company Matching Contributions
will be invested initially in the Amoco Stock Fund.
In addition, once a calendar month the Participant may
direct transfers among the Investment Funds, so that his Accounts
are invested entirely in one Investment Fund or in a combination
of two or more of the Investment Funds, provided that
combinations must be specified in five percent (5%) increments
and the total combinations must equal 100%.
The Participant's change in investment direction or
transfer of assets among Investment Funds shall be effective the
first day of the first full payroll cycle following the election.
The Participant will have sole responsibility for the
investment of his Accounts and for transfers among the available
Investment Funds, and no named fiduciary or other person will
have any liability for any loss or diminution in value resulting
from the Participant's exercise of such investment
responsibility. It is intended that Section 404(c) of ERISA will
apply to a Participant's exercise of investment responsibilities
under this subsection.
(b) Manner and Time of Giving Directions. A
Participant's initial directions governing the investment of his
Pre-Tax Contribution Account and Rollover Account must be made by
notifying the Plan Administrator and must be in five percent (5%)
increments. A Participant may change the investment of future
contributions to his Accounts or direct transfers among the
Investment Funds in five percent (5%) increments once a calendar
month by contacting the Plan Administrator in accordance with
uniform rules. If a Participant does not give complete
directions to the Plan Administrator, his Pre-Tax Contributions
or Rollover Contribution will be invested pro rata (rounded to
the applicable five percent (5%) increment) in the Investment
Funds as directed in the incomplete directions. If no directions
are given, all contributions will be invested in the Money Market
Fund.
7.3 Valuation of Assets. As of the last business day of
each calendar month and at any other date ("Valuation Date") that
the Plan Administrator may direct, the Trustee will determine the
fair market value of the assets in each separate Investment Fund
of the Trust Fund, relying upon such evidence of valuation as the
Trustee deems appropriate.
7.4 Crediting Investment Experience. As of each Valuation
Date (before crediting any contributions or making any investment
transfers as of such date), Investment Fund management expenses
not paid directly by the Employer, investment income and gains
and losses in asset values in each separate Investment Fund since
the preceding Valuation Date will be credited or charged to
Participants' Accounts invested in such fund. The allocation of
Investment Fund management expenses and investment results will
be in proportion to the adjusted account balances in such fund as
of each Valuation Date. The adjusted account balance of an
Account invested in a separate Investment Fund is the amount in
such Account as of the close of business on the preceding Valuation
Date, increased by any Pre-Tax Contributions, Company Matching
Contributions and loan repayments credited to such Account as of
the current Valuation Date under Article VI and Article VIII,
decreased by any withdrawals, transfers or distributions from
such Account since the preceding Valuation Date, and increased or
decreased in accordance with uniform rules established by the
Plan Administrator to allocate equitable expenses and investment
results.
<PAGE>
<PAGE>
ARTICLE VIII
LOANS TO PARTICIPANTS
8.1 Plan Administrator Shall Administer the Loan Program.
The Plan Administrator shall administer the loan program in
accordance with the provisions of Article VIII, in a uniform and
nondiscriminatory manner.
8.2 Availability of Loans. Upon application by a
Participant who is an active Employee, the Plan Administrator may
direct the Trustee to make a loan (in increments of $50) to the
Participant from his Accounts.
A Participant may make two loans during a
calendar year. However, he may not have more than two
outstanding loans. Also, a Participant will not be permitted to
make a loan if he previously defaulted on a Plan loan within the
preceding 36 months.
8.3 Conditions of Loan.
(a) Maximum Amount. The loan shall not exceed the
lesser of (A) $50,000 reduced by the highest outstanding loan
balance during the one-year period ending on the day before the
Valuation Date the current loan is made or (B) 50% of the market
value of the Participant's non-forfeitable accrued benefit on the
Valuation Date the loan request from the Participant is processed
by the Plan Administrator.
(b) Minimum Amount. The minimum loan shall be $500.
(c) Repayment Period. The term of the loan shall not
be less than 6 months and not more than 54 months in increments
of 6 months. The payment of interest and principal shall be
amortized in level payments not less frequently than quarterly.
(d) Interest Rate. The interest rate shall equal the
prime rate, as published in the Wall Street Journal, in effect on
the next-to-last business day of the month immediately before the
month in which the loan request is received by the Plan
Administrator and will be fixed for the term of the loan.
(e) Participant Fees. Reasonable fees may be charged
to the borrower for making and administering the loan. Effective
January 1, 1996 this fee shall be $40.
(f) Security for Repayment. Each loan hereunder will
be a Participant-directed investment for the benefit of the
Participant requesting such loan; accordingly, any default in the
repayment of principal or interest of any loan hereunder will
reduce the amount available for distribution to such Participant
(or his Beneficiary). Any loan hereunder will be effectively and
adequately secured by fifty percent (50%) of the non-forfeited
accrued benefit in the Participant's Accounts.
(g) Repayment. Each Participant who requests a loan
from his Accounts will execute an agreement to repay the
principal and interest of the loan through payroll withholding
from his compensation. The Plan Administrator may establish back-
up repayment procedures for Participants on an "authorized leave of
absence." Any loan hereunder may be prepaid in full by certified
or cashier's check at any time after six months since the first
repayment by payroll without penalty. If the automatic payroll
arrangement lapses by the Participant's termination of employment
for any reason or is canceled, and a new arrangement is not in
place before the next payment is due the loan shall be in default
and the entire unpaid principal and interest of any loan then
outstanding to such Participant will become immediately due and
payable.
(h) Action Upon Default. If a Participant defaults on
any payment of interest or principal on a loan hereunder or
defaults upon any other obligation relating to such loan, the
Plan Administrator shall immediately request payment of principal
and interest on the loan, and if not paid within the time
specified in the request for payment, the amount of the loan will
be deemed distributed to him. If the default is by reason of
termination of employment, and the Participant refuses to pay the
entire outstanding principal and interest on the loan in full
within 90 days of the default, the loan will be deemed
distributed to him. However, no foreclosure on the Participant's
loan or attachment of the Participant's Account balances will
occur until a distributable event occurs in the Plan.
(i) Distribution to Participant With Loan. In the
case of any Participant who terminates employment with a loan
outstanding hereunder, the amount available for distribution to
such Participant (or his Beneficiary) will consist of the portion
of his Accounts invested in the Investment Funds of the Trust
Fund. In the case of a Participant dying with an outstanding
loan, such loan will be deemed distributed to his estate upon his
death.
8.4 Accounting for Loans.
(a) Source of Loan. The Plan Administrator shall
liquidate the Participant's Accounts in the following order to
make a loan to him:
Participant Accounts.
(1) Pre-Tax Contribution Account
(2) Rollover Account
(3) Company Contribution Account
The Plan Administrator shall also liquidate the Participant's
Investment Funds pro rata.
(b) Loan Investment Account. The Plan Administrator
will establish and maintain a loan investment account for each
borrowing Participant. The unpaid principal and accrued but
unpaid interest on the loan to a Participant will be reflected
for plan accounting purposes in the Participant's loan account.
Repayments of principal by the Participant will reduce the Participant's
loan account balance and will be credited to the Participant's
other Accounts in the following order:
Participant Accounts.
(1) Company Contribution Account
(2) Rollover Account
(3) Pre-Tax Contribution Account
Repayments will be invested in the Investment Funds according to
a Participant's current investment election.
<PAGE>
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ARTICLE IX
IN-SERVICE WITHDRAWALS
9.1 Withdrawals From Rollover Account. A Participant may
withdraw in cash any portion of his accrued benefit in his
Rollover Account once during a calendar year. Notwithstanding the
foregoing, the minimum amount a Participant may withdraw is $300.
9.2 Withdrawals From Pre-Tax Contribution Account. A
Participant may withdraw in cash from his Pre-Tax Contribution
Account once every calendar year the amount necessary to meet one
of the following immediate and heavy financial needs:
1. Medical expenses described in Code
Section 213(d) previously incurred by the
Participant, his spouse, or any of his dependents
(as defined in Code Section 152) or necessary for
these persons to obtain medical care described in
Code Section 213(d);
2. The purchase (excluding mortgage
payments) of a principal residence for the
Participant;
3. Payment of tuition, housing, and related
educational fees for the next 12 months of post-
secondary education for the Participant, his
spouse, children, or dependents;
4. The need to prevent the eviction of the
Participant from his principal residence or
foreclosure on the mortgage of the Participant's
principal residence; or
5. Other unexpected or unusual expenses
creating a financial need for which withdrawal is
permitted by Code Regulation Section 1.401(k)-1.
The amount of an immediate and heavy financial need
includes any amounts necessary to pay any federal, state, or
local income taxes or penalties reasonably anticipated to result
from a withdrawal from a Participant's Pre-Tax Contribution
Account. Notwithstanding the foregoing, the amount withdrawn
cannot include the Participant's earnings on all his Pre-Tax
Contributions. In addition, before a Participant makes a
withdrawal from his Pre-Tax Contribution Account he must make a
loan under the Plan for the maximum amount permitted and then
withdraw the maximum amount permitted by the Plan from his
Rollover Account. If a Participant makes a withdrawal from his
Pre-Tax Contribution Account he will be prohibited from making
any Pre-Tax Contributions for the 12-month period commencing with
the first day of his payroll cycle of the calendar month starting
immediately after the distribution of such withdrawal. Finally,
notwithstanding Section 4.6, if a Participant makes a withdrawal
from his Pre-Tax Account, the Code Section 402(g) limitation that
applies to his Pre-Tax Contributions during
the Plan Year immediately after such withdrawal shall be reduced
by the total amount of his Tax-Deferred Contributions during the
year of the withdrawal.
9.3 Order of Asset Liquidation for All Withdrawals. The
Plan Administrator shall liquidate the Investment Funds of the
Account from which the withdrawal is being made pro rata.
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ARTICLE X
DISTRIBUTIONS
10.1 Distributions.
(a) Amount. A Participant whose employment terminates
as a result of Retirement will receive the total amount in his
Accounts in a single-sum payment as soon as administratively
practicable after the month such separation of service occurs.
If a Participant receives immediate distribution of his Accounts,
his Account balances will be determined as of the Valuation Date
immediately preceding such distribution. If a Participant defers
payment of part or all of his Accounts, his Account balances will
be determined as of the Valuation Date immediately preceding his
subsequent distribution.
(b) Retirement Defined. For purposes of this Plan,
"Retirement" means a Participant's termination of employment on
or after his 65th birthday. A Participant will become fully
vested in his Company Contribution Account balance upon reaching
his 65th birthday (normal retirement age).
(c) Form of Payment. Upon a Participant's termination
of service with his Employer, a distribution of his Accounts will
be paid in a single-sum payment of his entire Account balances at
any time until age 65. All distributions made pursuant to this
subsection shall be made in cash, except that a Participant can
elect to receive Amoco common stock in-kind.
10.2 Termination of Employment Prior to Retirement or Death.
(a) If a Participant's service with an Employer
terminates prior to his attainment of age 65, he shall be 100%
vested in an amount equal to the market value of his Pre-Tax
Contribution Account and Rollover Account. In addition, such
Participant shall acquire a vested interest in his Company
Contribution Account balance in accordance with the following
vesting schedule:
Years of
Vesting Service
Vested
At least But Less Than Percentage
2 years 0%
2 years 3 years 25%
3 years 4 years 50%
4 years 5 years 75%
5 years 100%
The benefit determined in accordance with the foregoing provision
shall never be adjusted or altered in any fashion on account of
any years of Vesting Service which the Participant might complete
upon reemployment with an Employer, except as otherwise provided
in Section 10.3.
(b) (i) Vesting Service or Period of Vesting
Service. Vesting Service means the aggregate of all years and
fractions of years of an Employee's Periods of Vesting Service
with an Employer and an Affiliated Company. Fractions of years
shall be expressed in terms of months. A period of Vesting
Service shall mean a period beginning on the first day of the
calendar month during which the Employee enters service (or
reenters service) and ending on the termination date (as defined
below) with respect to such period, subject to the following
special rules:
(A) An Employee shall be deemed to enter
service on the date he first completes an Hour of Service.
(B) An Employee shall be deemed to reenter
service on the date following a termination date when he
again completes an Hour of Service.
(C) The termination date of an Employee shall be
the last day of the calendar month during which the earlier
of the following occurs: (i) the date he quits, is
discharged, retires or dies, or (ii) except as provided
below, the first anniversary of the date he is absent from
service for any other reason (including, but not limited to,
vacation, holiday, leave of absence, and layoff). If an
Employee, absent from service under circumstances described
in (ii), quits, is discharged, retires or dies before the
first anniversary of commencement of said absence, his
termination date shall be the date he quits, is discharged,
retires or dies. An absence described in (ii) shall be
deemed to commence with respect to an Employee on the date
he is terminated as an Employee on the payroll records of
the Employer and members of Amoco Corporation's controlled
group of corporations. An Employee shall be deemed to have
continued in service (and thus not to have incurred a
termination date) for the following periods:
i) any period for which he
shall be required to be given credit for service
under any laws of the United States; and
ii) any period for which he is
on an approved "leave of absence".
(D) All periods of service of an Employee
shall be aggregated in determining his Vesting Service.
(E) If an Employee shall be absent from work
because he quits, is discharged or retires, and he reenters
service before the first anniversary of the date of such
absence, such date shall not constitute a termination date
and the period of such absence shall be included as service.
(ii) Month of Vesting Service. A Month of
Vesting Service means a calendar month during any part of which
an Employee was credited with an Hour of Service as defined in
Section 2.12.
(iii) Year of Vesting Service. A Year of Vesting
Service means 12 Months of vesting service, whether or not
consecutive.
(iv) One-Year Break In Service. A One-Year
Break In Service means a Period of twelve consecutive calendar
months during which the Employee is not credited with one month
of Vesting Service.
(c) Form of Payment. A Participant whose service
terminates with his Employer will be paid a distribution of his
vested Account balances in a single-sum payment as soon as
administratively practicable after the month such separation of
service occurs, unless he elects to defer receipt of his
distribution until a date not later than his attainment of age
65.
A single-sum payment made pursuant to this subsection shall be
made in cash, unless the Participant elects to receive Amoco
common stock in kind.
(d) If a Participant receives immediate distribution
of his Accounts, his Account balances will be determined as of
the Valuation Date immediately preceding such distribution. If a
Participant defers payment of his Accounts, his Account balances
will be determined as of the Valuation Date immediately preceding
his subsequent distribution.
(e) The determination of the amount to which such
terminated Participant is entitled in accordance with the
foregoing rules shall be made by the Plan Administrator.
(f) Any amount of a Participant's Company
Contribution Account to which he is not entitled at the time of
his termination of employment shall be forfeited by him when his
service terminates with his Employer. As soon as practicable
after such forfeiture occurs it shall be used to reduce Company
Matching Contributions or pay Plan administration expenses in
accordance with Section 16.11.
10.3 Reemployment. If a terminated Participant is reemployed
by an Employer, he shall again become a Participant upon
reemployment pursuant to Section 3.4. All future Company
Matching Contributions shall be credited to his Company
Contribution Account, and his prior Period(s) of Vesting Service
shall be restored for the purpose of calculating the vested
portion of such Account. Also, the portion of his Company
Contribution Account that has been forfeited shall be restored
without interest to his Company Contribution Account.
10.4 $3,500 Cash-Out. If the value of the nonforfeitable
portion of the Participant's Accounts does not exceed $3,500 as
of the Valuation Date immediately following his termination of
service for any reason, the Plan Administrator shall distribute
in cash and in a single-sum payment the entire balance in his
Accounts as soon as administratively practicable.
10.5 Required Distribution Date. Distribution to any
Participant must be made no later than April 1 following the
calendar year in which he reaches age 70-1/2 in annual payments
based on such Participant's life expectancy as of the date he
attained age 70-1/2 in accordance with the minimum distribution
rules of Section 401(a)(9) of the Code and the regulations
promulgated thereunder.
10.6 Distribution Upon Death of a Participant.
(a) In General. If Participant dies while employed
by the Employer with a balance in any Account under the Plan, his
Beneficiary will receive 100% of the amount in his Accounts.
Such amount will be determined as of the Valuation Date
immediately preceding the date when the Plan Administrator makes
such distribution. After the Plan Administrator identifies the
Beneficiary, he shall distribute to such Beneficiary in cash, the
remaining amount in the deceased Participant's Accounts as soon
as administratively practicable.
(b) Designation of Beneficiary. A Participant may
designate one or more Beneficiaries and may revoke or change such
designation at any time. If the Participant names two or more
Beneficiaries, distribution to them will be in such proportions
as the Participant designates or, if the Participant does not so
designate, in equal shares pro rata from such Participant's
Accounts. If the Participant designates one or more
Beneficiaries and one the Beneficiaries predeceases the
Participant, then the deceased Beneficiary's share will be
distributed pro rata in accordance with the Participant's
beneficiary election as to the other Beneficiary(ies). Any
designation of Beneficiary will be in writing on such form as the
Plan Administrator may prescribe and will be effective upon
filing with the Plan Administrator.
Notwithstanding the preceding paragraph, the sole
Beneficiary of a married Participant will be the Participant's
spouse unless the spouse consents in writing to the designation
of another person as beneficiary. The spouse's consent must
acknowledge the effect of such consent and be witnessed by a
notary public.
(c) No Designation. Any portion of a distribution
payable upon the death of a Participant which is not disposed of
by a designation of Beneficiary for any reason whatsoever will be
paid to the Participant's spouse if living at his death, otherwise to
the Participant's estate.
(d) Payment Under Prior Designation. Amoco may
direct the Plan Administrator to make payment in accordance with
a prior designation of Beneficiary (and will be fully protected
in so doing) if such direction (i) is given before a later
designation is received, or (ii) is due to Amoco's inability to
verify the authenticity of a later designation. Such a
distribution will discharge all liability therefor under the
Plan.
10.7 Rehire Before Distribution. If a former Participant is
rehired by an Employer or an Affiliated Company, before
distribution of his Accounts has been made, such distribution
will be deferred until his subsequent termination of employment.
10.8 Waiver of 30-Day Notice. If a distribution is one to
which Code Section 401(a)(11) and 417 do not apply, such
distribution may commence less than 30 days after the notice
required under Regulation 1.411(a)-11(c) is given, provided that:
(1) the Plan Administrator clearly informs the Participant that
the Participant has a right to a period of at least 30 days after
receiving the notice to consider the decision of whether or not
to elect a distribution (and, if applicable, a particular
distribution option), and (2) the Participant, after receiving
the notice, affirmatively elects a distribution.
<PAGE>
<PAGE>
ARTICLE XI
DIRECT ROLLOVERS
11.1 Direct Rollover. Notwithstanding any provision of the
Plan to the contrary that would otherwise limit a distributee's
election under this section, a distributee may elect, at the time
and in the manner prescribed by the Plan Administrator, to have
any portion of an eligible rollover distribution paid directly to
an eligible retirement plan specified by the distributee in a
direct rollover.
11.2 Definitions.
(a) "Eligible Rollover Distribution" is any
distribution provided for in this Plan of all or any portion of
the balance to the credit of the distributee, except that an
eligible rollover distribution does not include: any
distribution that is one of a series of substantially equal
periodic payments (not less frequently than annually) made for
the life (or life expectancy) of the distributee or the joint
lives (or joint life expectancies) of the distributee's
designated beneficiary, or for a specified period of ten years or
more; any distribution to the extent such distribution is
required under section 401(a)(9) of the Code; and the portion of
any distribution that is not includable in gross income
(determined without regard to the exclusion for net unrealized
appreciation with respect to employer securities).
(b) "Eligible Retirement Plan" is an individual
retirement account described in section 408(a) of the Code, an
individual retirement annuity described in section 408(b) of the
Code, an annuity plan described in section 403(a) of the Code, or
a qualified trust described in section 401(a) of the Code that
accepts the distributee's eligible rollover distribution.
However, in the case of an eligible rollover distribution to the
surviving spouse, an eligible retirement plan is an individual
retirement account or individual retirement annuity.
(c) "Distributee" includes a Participant, the
Participant's surviving spouse and the Participant's spouse who
is the alternate payee under a qualified domestic relations
order, as defined in section 414(p) of the Code.
(d) "Direct Rollover" is a payment by the Plan to the
eligible retirement plan specified by the distributee.
<PAGE>
<PAGE>
ARTICLE XII
AMENDMENT, MERGER AND TERMINATION OF PLAN
12.1 Amendment of Plan. At any time and from time to time,
Amoco may amend or modify any or all of the provisions of the
Plan without the consent of any person, provided that no
amendment will reduce any Participant's nonforfeitable Account
balance as of the date such amendment is adopted (or its
effective date if later) or eliminate an optional form of
benefit, and provided further that no amendment will permit any
part of the Trust Fund to revert to the Employer or be used for
or diverted to purposes other than for the exclusive benefit of
Participants or their Beneficiaries, except as provided in
Section 5.6.
12.2 Merger of Plans. A merger or consolidation with, or
transfer of assets or liabilities to, any other plan will be
permitted only if the benefit each Participant would receive if
such plan were terminated immediately after the merger,
consolidation or transfer is not less than the benefit he would
have received if this Plan had terminated immediately before the
merger, consolidation or transfer.
12.3 Termination. Amoco has established the Plan and is
maintaining the Plan with the bona fide expectation and intention
that it will continue the Plan indefinitely, but Amoco will not
be
under any obligation or liability whatsoever to maintain the Plan
for any particular length of time. Notwithstanding any other
provision hereof, Amoco may terminate this Plan at any time.
There will be no liability to any Participant, Beneficiary or
other person as a result of any such discontinuance or
termination.
The Employer's failure to make contributions in any year or
years will not operate to terminate the Plan in the absence of
formal action by Amoco to terminate the Plan.
12.4 Effect of Termination. Upon complete discontinuance of
contributions or termination or partial termination of the Plan,
the Pre-Tax and Rollover Accounts of affected Participants will
remain nonforfeitable and their Company Contribution Account will
become nonforfeitable. After termination of the Plan, no
Employee will become a Participant and no further Pre-Tax
Contributions or Company Matching Contributions will be made
hereunder on behalf of Participants.
The Trustee will continue to hold the assets of the Trust Fund
for distribution as directed by the Plan Administrator. The Plan
Administrator directs the Trustee to disburse the Plan's assets
as immediate benefit payments, to retain and disburse them in the
future, or to follow any other procedure which it deems
advisable.
<PAGE>
<PAGE>
ARTICLE XIII
NAMED FIDUCIARIES
13.1 Identity of Named Fiduciaries.
(a) Named Fiduciaries. Amoco, the Plan
Administrator, the Trustee and any investment manager appointed
by Amoco will be the named fiduciaries under the Plan and will
control and manage the Plan and its assets to the extent and in
the manner indicated in the Plan and in the Trust Agreement. Any
responsibility assigned to a named fiduciary will not be deemed
to be a duty of a "fiduciary" (as defined in ERISA) solely
because of such assignment.
(b) Plan Administrator. Amoco Corporation is the
"Plan Administrator" as defined in ERISA.
13.2 Responsibilities and Authority of Plan Administrator.
The Plan Administrator will have the responsibilities and
authority with respect to control and management of the Plan and
its assets as set forth in detail in various articles of the Plan
including Article XIII.
13.3 Responsibilities and Authority of Trustee. The Trustee
will manage and control the assets of the Plan, except to the
extent that such responsibilities are specifically assigned
hereunder or under the Trust Agreement to Amoco, or the
Participants, or are delegated to one or more investment managers
by Amoco. The responsibilities and authority of the Trustee are
set forth in detail primarily in the Trust Agreement.
13.4 Responsibilities of Amoco. Amoco will have the
responsibilities and authority to appoint, remove and replace the
Trustee and to amend and terminate the Plan and Trust. The
responsibilities and authority of Amoco are set forth in further
detail in the various articles of the Plan and in the Trust
Agreement.
13.5 Responsibilities Not Shared. Except as otherwise
provided herein or required by law, each named fiduciary will
have only those responsibilities that are specifically assigned
to it hereunder, in the Administrative and Recordkeeping Services
Agreement, and in the Trust Agreement, and no named fiduciary
will incur liability because of improper performance or
nonperformance of responsibilities assigned to another named
fiduciary.
13.6 Dual Fiduciary Capacity Permitted. Any person or group
of persons may serve in more than one fiduciary capacity.
13.7 Actions by Amoco. Wherever the Plan specifies that Amoco
is required or permitted to take any action, such action will be
taken by its board of directors, or by a duly authorized
committee thereof, or by one or more directors, officers,
employees or other persons duly authorized to do so by the board
of directors.
13.8 Advice. A named fiduciary may employ or retain such
attorneys, accountants, investment advisors, consultants,
specialists and other persons or firms as it deems necessary or
desirable to advise or assist it in the performance of its
duties. Unless otherwise provided by law, the fiduciary will be
fully protected with respect to any action taken or omitted by
him or it in reliance upon any such person or firm rendered
within his or its area of expertise.
<PAGE>
<PAGE>
ARTICLE XIV
PLAN ADMINISTRATOR
14.1 Appointment. Amoco is the Plan Sponsor and retains the
authority to appoint a Plan Administrator. Any notice or
document required to be given to or filed with the Plan
Administrator will be properly given or filed if delivered or
mailed, by registered mail, postage prepaid, to the Plan
Administrator, in care of Amoco Corporation at 200 East Randolph
Drive, Chicago, Illinois 60601.
14.2 Notice to Trustee. Amoco will notify the Trustee in
writing of the appointment, and the Trustee may assume such
appointment continues in effect until written notice to the
contrary is given by Amoco.
14.3 Administration of Plan. The Plan Administrator and Amoco
will have all powers and authority necessary and appropriate to
carry out its responsibilities as provided in the Plan. All
determinations and actions of the Plan Administrator will be
conclusive and binding upon all persons, except as otherwise
provided herein or by law, and except that the Plan Administrator
may revoke or modify a determination or action previously made in
error. The Plan Administrator will exercise all powers and
authority given to it in a nondiscriminatory manner.
14.4 Reporting and Disclosure. The Plan Administrator will
prepare, file, submit, distribute or make available any plan
descriptions, reports, statements, forms or other information to
any government agency, Employees, former Employees, or
Beneficiary as may be required by law or by the Plan.
14.5 Records. The Plan Administrator will record its acts and
decisions, and keep all data, records, books of account and
instruments pertaining to plan administration. The Employer will
supply all information required by the Plan Administrator to
administer the Plan, and the Plan Administrator may rely upon the
accuracy of such information.
14.6 Claims Review Procedure. Any request for benefits (the
"claim") by a Participant or his Beneficiary (the "claimant")
will be filed in writing with the Plan Administrator. Within a
reasonable period after receipt of a claim, the Plan
Administrator will provide written notice to any claimant whose
claim has been wholly or partly denied, including: (a) the
reasons for the denial, (b) the Plan provisions on which the
denial is based, (c) any additional material or information
necessary to perfect the claim and the reasons why it is
necessary, and (d) the Plan's claims review procedure. The
claimant will be given a full and fair review in writing within a
reasonable period after notification of the denial. The claimant
may review pertinent documents and may submit issues and comments
orally, in writing, or both. The Plan Administrator will render
its decision or review properly and in writing and will include
specific reasons for the decision and reference to the Plan
provisions on which the decision is based. The Participant may
appeal the Plan Administrator's decision by making such appeal in
writing filed with Amoco Corporation (Director, Qualified Plans - Human
Resources) within 60 days after his receipt of the Plan
Administrator's decision.
14.7 Administrative Discretion; Final Authority.
(a) The Plan Administrator shall have the exclusive
discretionary authority to interpret the provisions of, and make
factual determinations under, the Plan and to decide any and all
matters arising hereunder, including without limitation the right
to remedy possible ambiguities, inconsistencies, or omissions by
general rule or particular decision; provided that all such
interpretations and decisions shall be applied in a uniform and
nondiscriminatory manner to all Participants and beneficiaries
who are similarly situated. The Plan Administrator shall
determine conclusively for all parties all questions arising out
of the interpretation or administration of the Plan.
(b) The Plan Administrator may delegate authority
with respect to certain matters, and the Plan Administrator may
allocate its responsibilities among Amoco employees.
(c) To the extent that the Plan Administrator
properly delegates or allocates administrative powers or duties
to any other individual or entity, such individual or entity
shall have exclusive discretionary authority, as described in
subsection 14.7(a), to exercise such powers or duties.
<PAGE>
<PAGE>
ARTICLE XV
PARTICIPATING EMPLOYERS
15.1 Adoption by Other Employers.
Notwithstanding anything herein to the contrary, with the
consent of Amoco, any other entity may adopt this Plan and all of
the provisions hereof, and participate herein and be known as a
participating Employer, by a properly executed Participation
Agreement evidencing said intent and will of such participating
Employer. A Participation Agreement may contain terms and
conditions approved by Amoco that apply only to such
participating Employer and shall constitute an amendment of the
Plan.
15.2 Designation of Agent. Each participating Employer shall
be deemed a part of this Plan; provided, however, that with
respect to all of its relations with the Trustee and Plan
Administrator for the purpose of this Plan, each participating
Employer shall be deemed to have designated irrevocably Amoco as
its agent.
15.3 Employee Transfers. It is anticipated that an Employee
may be transferred between participating Employers and non-
participating Affiliated Companies. No such transfer shall
effect a termination of employment hereunder for purposes of
Section 10.
15.4 Discontinuance of Participation. Any participating
Employer shall be permitted to discontinue or revoke its
participation in the Plan with a properly executed document filed
with Amoco and with the consent of Amoco.
15.5 Participating Employer Contribution for Affiliate. If
any participating Employer is prevented in whole or in part from
making a contribution to the Trust Fund which it would otherwise
have made under the Plan for any reason, then, pursuant to Code
Section 404(a)(3)(B), so much of the contribution which such
participating Employer was so prevented from making may be made,
for the benefit of the participating Employees of such
participating Employer, by the other participating Employers who
are members of the same affiliated group within the meaning of
Code Section 1504.
<PAGE>
<PAGE>
ARTICLE XVI
MISCELLANEOUS
16.1 Qualified Domestic Relations Orders.
(a) A Qualified Domestic Relations Order (QDRO) is a
judgment, decree, or order which meets the requirements of Code
Section 414(p). An alternate payee is an individual named in the
QDRO who is to receive some or all of the Participant's benefits.
(b) A payment to an alternate payee shall be in cash
and in a single sum.
16.2 Nonalienation of Benefits. No benefit, right or interest
hereunder of any person will be subject to anticipation,
alienation, sale, transfer, assignment, pledge, encumbrance or
charge, or to seizure, attachment or other legal, equitable or
other process, or be liable for, or subject to, the debts,
liabilities or other obligations of such person, except that the
Plan Administrator may prescribe rules for the payment of
benefits in accordance with Qualified Domestic Relations Orders
as defined in Section 16.1.
16.3 Payment of Minors and Incompetents. If the Plan
Administrator deems any person incapable of giving a binding
receipt for benefit payments because of his minority, illness,
infirmity or other incapacity, it may direct payment directly for
the benefit of such person, or to any person selected by Amoco to
disburse it. Such payment, to the extent thereof, will discharge
all liability for such payment under the Plan.
16.4 Current Address of Payee. Any person entitled to
benefits is responsible for keeping Amoco informed of his current
address at all times. The Plan Administrator, the Trustee and
Amoco have no obligation to locate such person, and will be fully
protected if all payments and communications are mailed to his
last known address, or are withheld pending receipt of proof of
his current address and proof that he is alive. If payments are
withheld and after reasonable efforts, the Plan Administrator
cannot locate a former Participant (or Beneficiary) within a
reasonable time, but in any event not later than four (4) years,
the amount of the Participant's Accounts shall be forfeited and
shall be reapplied in such a way as to reduce succeeding Company
Matching Contributions under the Plan; provided, however, that if
such former Participant (or Beneficiary) subsequently files a
valid claim for benefits with the Plan Administrator or Amoco
with respect to his Account balances under the Plan, his Accounts
shall be restored to the value previously forfeited (and without
interest) from such Accounts.
16.5 Disputes over Entitlement to Benefits. If two or more
persons claim entitlement to payment of the same benefit
hereunder, the Plan Administrator may withhold payment of such
benefit until
the dispute has been determined by a court of competent
jurisdiction or has been settled by the persons concerned.
16.6 Payment of Benefits. Unless he elects otherwise, a
Participant's benefit payments under the Plan will begin no later
than 60 days after the close of the Plan Year in which the latest
of the following dates occurs: (a) the date he terminates
service with his Employer; (b) his 65th birthday; or (c) the
tenth anniversary of the year in which he began participating in
the Plan.
16.7 Plan Supplements. The provisions of the Plan may be
modified by supplements to the Plan. The terms and provisions of
each supplement are a part of the Plan and supersede the
provisions of the Plan to the extent necessary to eliminate
inconsistencies between the Plan and the supplement.
16.8 Rules of Construction.
(a) A word or phase defined or explained in any
section or article has the same meaning throughout the Plan
unless the context indicates otherwise.
(b) Where the context so requires, the masculine
includes the feminine, the singular includes the plural, and the
plural includes the singular.
(c) Unless the context indicates otherwise, the words
"herein," "hereof," "hereunder," and words of similar import
refer to the Plan as a whole and not only to the section in which
they appear.
16.9 Text Controls. Headings and titles are for convenience
only and the text will control in all matters.
16.10 Applicable State Law. To the extent that state
law applies, the provisions of the Plan will be construed,
enforced and administered according to the laws of the State of
Georgia.
16.11 Plan Administration Expenses. All reasonable Plan
administration expenses shall be paid out of the Trust Fund;
provided that the obligation of the Trust Fund to pay such
expenses shall cease to exist to the extent such expenses are
paid by an Employer or are paid to the Trust Fund as a
reimbursement by an Employer. This provision shall be deemed to
apply to any contract or arrangement to provide for expenses of
plan administration without regard to whether or not the
signatory or party to such contract or arrangement is, as a
matter of administrative convenience, an Employer. Any
reasonable plan administration expense paid to the Trust Fund by
an Employer as a reimbursement shall not be considered an
Employer contribution and shall not be credited to Participants'
Accounts. The Plan Administrator shall only direct the Trustee
to pay Plan administration expenses from the Trust Fund upon the
written direction of Amoco.
16.12 Voting and Tendering of Amoco Stock.
(a) For the purposes of voting or responding to bona
fide offers with respect to the Amoco Corporation Stock held by
the Plan, each Participant and Beneficiary of a deceased
Participant whose Accounts are invested in whole or in part in the Amoco
Stock Fund shall be a "named fiduciary" within the meaning of
Section 403(a)(1) of ERISA. The Trustee shall follow the proper
instructions, which instructions shall be held by the Trustee in
strict confidence, of the Participants and Beneficiaries with
respect to such Amoco Corporation stock in the manner described
in this Section 16.
(b) Before each annual or special meeting of Amoco
Corporation, there shall be sent to each Participant or
Beneficiary to whom Amoco Corporation stock is allocated a copy
of the proxy solicitation material for the meeting, together with
a form requesting instructions to the Trustee on how to vote the
Amoco Corporation stock allocated to his Accounts. Upon receipt
of such instructions, the Trustee shall vote the Amoco
Corporation stock as instructed.
(c) The Trustee shall vote Amoco Corporation stock
for which no voting instructions are timely received to the
extent required by law in its uncontrolled discretion.
(d) In the event that a bona fide offer (such as a
tender offer or exchange offer) shall be made to acquire any
Amoco Corporation Employer stock held by the Trustee, each
Participant or Beneficiary of a deceased Participant shall be
entitled to direct the Trustee as to the disposition of the Amoco
Corporation stock (including fractional shares) allocated to his
Accounts, and to direct the Trustee to take other solicited action
on his behalf(including the voting of such Stock) with respect to
the Amoco Corporation stock allocated to this account. Amoco, with the
cooperation of the Trustee, shall use its best efforts to provide
each Participant or Beneficiary to whom this paragraph may apply
with a copy of any offer solicitation material generally
available to members of the public who hold the Amoco Corporation
stock affected by the offer, or with such other written
information as the offeror may provide. Such material shall be
provided with a form requesting instructions to the Trustee as to
the disposition under the offer of the Amoco Corporation stock
allocated to each Account. Upon receipt of such instructions
from the Participant or Beneficiary, the Trustee shall respond to
the offer in accordance with such instructions with respect to
the Amoco Corporation stock allocated to the Account.
(e) The Trustee shall respond to an offer described
in subsection (d) with respect to Amoco Corporation stock for
which no instructions are timely received to the extent required
by law in its uncontrolled discretion.
16.13 Action by Company. Any action required or
permitted to be taken by Amoco (or a participating Employer)
under the Plan shall be by resolution of its Board of Directors,
by resolution of a duly authorized committee of its Board of
Directors, or by a person or persons authorized by resolution of
its Board of Directors or such committee.
<PAGE>
<PAGE>
SUPPLEMENT A
Special Rules for Top-Heavy Plans
A-1. Purpose and Effect. The purpose of this Supplement A is
to comply with the requirements of Section 416 of the Internal
Revenue Code. The provisions of this Supplement A shall be
effective for each Plan Year in which the Plan is a "top-heavy
plan" within the meaning of Section 416(g) of the Internal
Revenue Code.
A-2. Top-Heavy Plan. In general, the Plan will be a top-heavy
plan for any Plan Year if, as of the last day of the preceding
Plan Year (the "determination date"), the aggregate account
balances of Participants who are key employees (as defined in
Section 416(i)(1) of the Internal Revenue Code) exceed 60 percent
of the aggregate account balances of all Participants. In making
the foregoing determination, the following special rules shall
apply:
(a) A Participant's account balances
shall be increased by the aggregate
distributions, if any, made with respect to
the Participant during the 5-year period
ending on the determination date.
(b) The account balances of a Participant
who was previously a key employee, but who is
no longer a key employee, shall be
disregarded.
(c) The accounts of a beneficiary of a
Participant shall be considered accounts of
the Participant.
(d) The account balances of a Participant
who did not perform any services for the
company during the 5-year period ending on the
determination date shall be disregarded.
A-3. Key Employee. In general, a "key employee" is an
employee who, at the time during the 5-year period ending on the
determination date, is:
(a) an officer of Amoco receiving annual
compensation greater than 50% of the
limitation in effect under Section
415(b)(1)(A) of the Internal Revenue Code;
provided, that for purposes of this
subparagraph (a), no more than 50 employees of
Amoco (or if lesser, the greater of employees
or 10 percent of the employees) shall be
treated as officers;
(b) one of the ten employees receiving
annual compensation from Amoco of more than
the limitation in effect under Section
415(c)(1)(A) of the Internal Revenue Code and
owning both more than 1/2 percent interest and
the largest interest in Amoco;
(c) a 5 percent owner of Amoco; or
(d) a 1 percent owner of Amoco receiving
annual compensation from Amoco of more than
$150,000.
A-4. Minimum Vesting. For any Plan Year in which the Plan is
a top-heavy plan, a Participant's vested percentage in his
company contribution account shall not be less than the
percentage determined under the following table:
Years of Service Vested Percentage
Less than 2 0
2 20
3 40
4 60
5 80
6 or more 100
If the foregoing provisions of this paragraph A-4 become
effective, and the Plan subsequently ceases to be a top-heavy
plan, each Participant who has then completed three or more years
of service may elect to continue to have the vested percentage of
his company contribution account determined under the provisions
of this paragraph A-4.
A-5. Minimum Company Contribution. For any Plan Year in which
the Plan is a top-heavy plan, the company contributions, if any,
credited to each Participant who is not a key employee shall not
be less than three percent of such Participant's compensation for
that year. In no event, however, shall the company contributions
credited in any year to a Participant who is not a key employee
(expressed as a percentage of such Participant's compensation)
exceed the maximum company contribution and remainders credited
in that year to a key employee (expressed as a percentage of such
key employee's compensation up to $150,000).
A-6. Maximum Earnings. For any Plan Year in which the Plan is
a top-heavy plan, a Participant's earnings in excess of $150,000
(or such greater amount as may be determined by the Commissioner
of Internal Revenue for that Plan Year) shall be disregarded for
purposes of subsection 5.5 of the Plan.
A-7. Aggregation of Plans. In accordance with Section
416(g)(2) of the Internal Revenue code, other plans maintained by
Amoco may be required or permitted to be aggregated with this
Plan for purposes of determining whether the Plan is a top-heavy
plan.
A-8. No Duplication of Benefits. If Amoco maintains more than
one plan, the minimum company contribution otherwise required
under the paragraph A-5 above may be reduced in accordance with
regulations of the Secretary of the Treasury to prevent
inappropriate duplication of minimum contributions or benefits.
A-9. Adjustment of Combined Benefit Limitations. For any Plan
Year in which the Plan is a top-heavy plan, the determination of
the defined contribution plan fraction and defined benefit plan
fraction under subsection 5.4 of the Plan shall be adjusted in
accordance with the provisions of Section 416(h) of the Internal
Revenue Code.
A-10. Use of Terms. All terms and provisions of the
Plan shall apply to this Supplement A, except that where the
terms and provisions of the Plan and this Supplement A conflict,
the terms and provisions of this Supplement A shall govern.
<PAGE>
<PAGE>
AMOCO FABRICS AND FIBERS COMPANY
CONSENT ACTION OF THE
BOARD OF DIRECTORS
October 15, 1996
Action by Consent of Directors, Amoco Fabrics and Fibers
Company, ("the Company") effective October 15, 1996.
We, the undersigned, being all of the Directors of the
Company, do hereby waive call, notice, meeting and vote and do
hereby consent to, confirm and verify the following corporate
action pursuant to authority vested by Delaware General
Corporation Law, Section 141(f):
Amoco Fabrics and Fibers Company
Hourly 401(k) Savings Plan
WHEREAS, Amoco Fabrics and Fibers Company maintains the
Amoco Fabrics and Fibers Company Hourly 401(k) Savings
Plan ("Plan"); and
WHEREAS, the first amendment of the Plan as Amended and
Restated effective January 1, 1996 is now considered
desirable;
NOW, THEREFORE, BE IT
RESOLVED, that pursuant to the power reserved the
Company under subsection 12.1 of the Plan, the Plan is
hereby amended, effective November 1, 1996, as
reflected on Attachment A.
FURTHER RESOLVED, that the officers of the Company be
and they hereby are authorized to take such actions as
they may deem necessary or appropriate to carry out the
intent and purpose of the foregoing resolution.
Amoco Fabrics and Fibers Company
Salaried 401(k) Savings Plan
WHEREAS, Amoco Fabrics and Fibers Company maintains the
Amoco Fabrics and Fibers Company Salaried 401(k)
Savings Plan ("Plan"); and
WHEREAS, the first amendment of the Plan is now
considered desirable;
NOW, THEREFORE, BE IT
RESOLVED, that pursuant to the power reserved the
Company under subsection 12.1 of the Plan, the Plan is
hereby amended, effective November 1, 1996, as
reflected on Attachment B.
FURTHER RESOLVED, that the officers of the Company be
and they hereby are authorized to take such actions as
they may deem necessary or appropriate to carry out the
intent and purpose of the foregoing resolution.
F. G. Andrusko
B. J. Armistead
J. Stover
The undersigned Assistant Secretary does hereby certify
that the signatories to the above instrument are, as of the date
hereof, all of the Directors of the Company.
Assistant Secretary
<PAGE>
<PAGE>
Attachment B
Amendment to
Amoco Fabrics and Fibers Company
Salaried 401(k) Savings Plan
1. By substituting for Section 2.4 of the Plan the following
new Section 2.4:
"2.4 "Applicable Compensation" means amounts paid by
Amoco or an Affiliated Company to an Employee who is
eligible to participate as (i) basic salary and wages,
including forms of base pay delivered in alternative forms
such as piecework; payment by mileage for drivers; overtime;
and shift differentials, (ii) pay-in-lieu of vacation, (iii)
commissions, (iv) variable incentive payments, (v) bonuses
in the year received while an Employee, including foreign
service premium payments made prior to January 1, 1997, (vi)
lump sum performance awards, and (vii) amounts contributed
on behalf of the Employee to a cafeteria plan or a cash or
deferred arrangement and not included in the Employee's
gross income for federal income tax purposes under Section
125 or 402(e)(3) of the Code, but excluding (i) sign-on,
retention, severance and separation payments, (ii) reward
and recognition payments, (iii) remuneration received
attributable to moving and educational expenses, (iv)
expense allowances and reimbursement for federal income tax
purposes, and (vi) any other items of remuneration.
For any Plan Year beginning on or after January 1, 1996, the
amount of Applicable Compensation taken into account under
the Plan for any Participant will not exceed $150,000 or
such greater amount as may be determined by the Commissioner
of Internal Revenue for that year. In determining the
compensation of a Participant for purposes of this
limitation, the rules of Section 414(q)(6) of the Code shall
apply, except in applying such rules, the term "family"
shall include only the spouse of the Participant and any
lineal descendants of the Participant who have not attained
age 19 before the close of the year. If as a result of the
application of such rules the adjusted annual compensation
limitation is exceeded, then the limitation shall be
prorated among the affected individuals in proportion to
each such individual's compensation as determined under this
section prior to the application of this limitation.
If compensation for any prior determination period is taken
into account in determining a Participant's allocations for
the current Plan Year, the compensation for such prior
determination period is subject to the applicable annual
compensation limit in effect for that prior period. For
this purpose, in determining allocations in Plan Years
beginning on or after January 1, 1996, the annual
compensation limit in effect for determination periods
beginning before that date is $150,000 (as adjusted in
accordance with Code Section 401(a)(17))."
2. By adding the following new Section 2.26 immediately after
Section 2.25:
"2.26 "Employee" means a person who is an employee
of Amoco or an Affiliated Company."
3. By substituting for Section 3.1 of the Plan the following
new Section 3.1:
"3.1 Eligible Class. Each Salaried Employee employed
by an Employer who is remunerated in U. S. Currency through
an Employer's payroll system, who is classified as an
employee by an Employer and who has not been specifically
excluded pursuant to his Employer's participation agreement
is in the eligible class, except the following:
(a) a Salaried Employee who is represented by a union
unless the union and the Employer have entered into a
collective bargaining or other agreement that provides that
the Salaried Employee shall participate in the Plan; or
(b) a Salaried Employee who is a nonresident alien
(within the meaning of Code Section 7701(b)(1)(B)) and who
receives no earned income (within the meaning of Code
Section 911(d)(2)) from the Employer which constitutes
income from sources within the United States (within the
meaning of Code Section 861(a)(3)); or
(c) a Salaried Employee who is employed by an Employer
pursuant to an agreement that provides that the individual
shall not be eligible to participate in the Plan."
4. By adding the following new Section 16.14 immediately after
Section 16.13:
"16.14 Uniformed Services Employment and
Reemployment Rights Act of 1994 ("USERRA"). Notwithstanding
any provision of the Plan to the contrary, any Participant
or Eligible Employee who is reemployed by an Employer after
serving in the United States military within the time period
prescribed by USERRA on or after December 12, 1994 shall be
treated as not having incurred a break in service due to
military service. Such reemployed individual shall have up
to three times his period of military service to make missed
Participant contributions, not to exceed five years. The
Employer will make the applicable Company Matching
Contributions with respect to any Participant contributions
made pursuant to this Section. No interest will be charged
on either the Participant and Company Matching
Contributions, and the Participant will not be credited with
interest or earnings that would have been earned on such
contributions."
<PAGE>
<PAGE>
Exhibit 10(k)
AMOCO PERFORMANCE SHARE RESTORATION PLAN
Established as of: January 1, 1992
Amended and Restated as of: January 1, 1997
<PAGE>
<PAGE>
AMOCO PERFORMANCE SHARE RESTORATION PLAN
TABLE OF CONTENTS
Page
I. DEFINITIONS
1.01 Act 1
1.02 Amoco 1
1.03 Code 1
1.04 Company 1
1.05 Deferred Earnings 1
1.06 Effective Date 1
1.07 Maximum Benefit 1
1.08 Participant 1
1.09 Performance Share Plan 2
1.10 Plan 2
1.11 Section 16 Officer 2
1.12 Unrestricted Benefit 2
II. COMPANY CONTRIBUTION ACCOUNT
2.01 Establishment of Company
Contribution Account 3
2.02 Crediting Company Matching
Contributions 3
2.03 Charge to Company Contribution
Accounts 3
III. HYPOTHETICAL INVESTMENT OF COMPANY CONTRIBUTIONS
3.01 Hypothetical Investment 4
<PAGE>
<PAGE>
AMOCO PERFORMANCE SHARE RESTORATION PLAN
TABLE OF CONTENTS
(Continued)
Page
IV. DISTRIBUTIONS
4.01 Distribution Upon Termination of Employment
Other than Death 5
4.02 Distribution Upon Death of a Participant 5
4.03 $3,500 Cash-Out 5
4.04 Designation of Beneficiary 5
4.05 No Designation 6
4.06 All Distributions In Cash 6
4.07 Other Withdrawals and Distributions 6
V. ADMINISTRATION OF THE PLAN
5.01 Plan Administrator 7
5.02 Amendment and Termination 7
5.03 Payments 7
5.04 Non-assignability of Benefits 7
5.05 Status of Plan 7
5.06 Nonguarantee of Employment 7
5.07 Applicable Law 7
5.08 Rules of Construction 8
5.09 Withholding 8
<PAGE>
<PAGE>
ARTICLE I
DEFINITIONS
1.01 "Act" shall mean the Employee Retirement Income
Security Act of 1974 ("ERISA"), as amended from time to time.
1.02 "Amoco" shall mean Amoco Corporation, an Indiana
corporation.
1.03 "Code" shall mean the Internal Revenue Code of 1986, as
amended from time to time.
1.04 "Company" shall mean Amoco and any of its subsidiaries
or affiliated business entities participating in the Performance
Share Plan.
1.05 "Deferred Earnings" shall mean all or the portion of a
Participant's bonus under the 1991 Incentive Program for Amoco
Corporation and its Participating Subsidiaries that the payment
of such bonus was deferred past the initial payment date.
1.06 "Effective Date" shall mean January 1, 1992.
1.07 "Maximum Benefit" shall mean the maximum total Company
Contribution permitted by the Code to be contributed to the
account of a participant of the Performance Share Plan.
1.08 "Participant" shall mean any employee of the Company
who satisfies any of the following, including without limitation
a Section 16 Officer:
1) Is an active participant in the Performance Share Plan
on or after the Effective Date and whose Company
Contribution determined under the Performance Share Plan,
without regard to the Section 415 (C)(1)(A) and Section 401
(a)(17) limitations of the Code,would exceed the Maximum
Benefit, or
2) Is (I) an active participant in the Performance Share
Plan and (II) is a recipient of a bonus under the 1991
Incentive Program for Amoco Corporation and its
Participating Subsidiaries and has deferred payment of
all or a portion of any bonus past the initial payment
date.
1.09 "Performance Share Plan" shall mean the Amoco
Performance Share Plan, as amended from time to time.
1.10 "Plan" shall mean the Amoco Performance Share
Restoration Plan, as amended from time to time or restated, which
shall be an unfunded excess benefit plan as defined in Act
Section 3(36).
1.11 "Section 16 Officer" shall mean any employee of the
Company who is an officer subject to Section 16 of the Securities
Exchange Act of 1934.
1.12 "Unrestricted Benefit" shall mean the Participant's
Company Contribution that would have been contributed to his
Performance Share Plan company contribution account for any
calendar year determined under the Performance Share Plan
assuming Deferred Earnings are "Applicable Compensation" as
defined in the Performance Share Plan.
<PAGE>
<PAGE>
ARTICLE II
COMPANY CONTRIBUTION ACCOUNT
2.01 Establishment of Company Contribution Account. The
Plan Administrator will establish and maintain an unfunded
Company Contribution Account in the name of each Participant.
2.02 Crediting Company Matching Contributions. As soon as
administratively practicable after the Company Contribution to
the Performance Share Plan is calculated, the Plan Administrator
shall determine which Participants have an Unrestricted Benefit
greater than their Maximum Benefit. Then under a procedure
similar to the one used for the Performance Share Plan, the Plan
Administrator shall credit to the Company Contribution Accounts
of each of those Participants an amount equal to his Unrestricted
Benefit less his Maximum Benefit.
2.03 Charge to Company Contribution Accounts. Any amount
distributed or paid from a Company Contribution Account will be
charged against such account, under a procedure similar to the
one used for the Performance Share Plan, as of the day on which
the distribution or payment occurs. Also, if a Participant
receives any Deferred Earnings prior to his termination of
employment with the Company the amount of Company Matching
Contributions credited to his Company Contribution Account for
this Plan at the time such Participant deferred receipt of such
earnings, will be charged against his Company Contribution
Account (disregarding all hypothetical investment results) during
the payroll cycle of the receipt of the Deferred Earnings, but in
no event shall his Company Contribution Account be charged more
than the account's hypothetical market value at the time of the
charge.
<PAGE>
<PAGE>
ARTICLE III
HYPOTHETICAL INVESTMENT OF COMPANY CONTRIBUTIONS
3.01 Hypothetical Investment. The Plan Administrator will
maintain records which reflect the Company Contribution Account
of a Participant that is hypothetically to be always invested in
Amoco Common Stock. The Plan Administrator shall use the same
values used by the plan administrator of the Performance Share
Plan in maintaining these records. The hypothetical dividends
will be hypothetically invested in Amoco Common Stock at the New
York Stock Exchange's average price of the high and low for Amoco
Common Stock on the day such dividend is payable.
<PAGE>
<PAGE>
ARTICLE IV
DISTRIBUTIONS
4.01 Distribution Upon Termination of Employment other than
Death. A Participant whose employment terminates for any reason
other than death will receive the total amount credited to his
Company Contribution Account in a cash lump sum, in the January
following his termination of employment. Notwithstanding the
foregoing, a Participant can accelerate payment of his lump sum
distribution by irrevocably electing to accelerate prior to his
termination of employment, his cash lump sum distribution to the
month following his termination of employment.
4.02 Distribution Upon Death of a Participant. If a
Participant dies with a balance in his Company Contribution
Account, his beneficiary will receive the total amount in his
account in a cash lump sum as soon as administratively
practicable.
4.03 $3,500 Cash-Out. If the vested amount credited to a
Participant's Company Contribution Account does not exceed $3,500
at the date of his termination of employment for any reason, the
Plan Administrator shall distribute in a cash lump sum the entire
vested amount credited to his account as soon as administratively
practicable.
4.04 Designation of Beneficiary. A Participant may
designate one or more beneficiaries and may revoke or change such
designation at any time. If the Participant names two or more
beneficiaries, distribution to them will be in such proportions
as the Participant designates or, if the Participant does not so
designate, in equal shares pro rata from such Participant's
Company Contribution Account. Also, if the Participant names two
or more beneficiaries and one beneficiary predeceases the
Participant, then the deceased beneficiary's share shall be
distributed to the other beneficiaries in the percentages stated
on the Participants' beneficiary election form. Any designation
of beneficiary will be in writing on such form as Amoco may
prescribe and will be effective upon filing with Amoco.
Notwithstanding the preceding paragraph, the sole
beneficiary of a married Participant will be the Participant's
spouse unless the spouse consents in writing to the designation
of another person as beneficiary. The spouse's consent must
acknowledge the effect of such consent and be witnessed by a
notary public.
4.05 No Designation. Any portion of a distribution payable
upon the death of a Participant which is not disposed of by a
designation of beneficiary for any reason whatsoever will be paid
to the Participant's spouse if living at this death, otherwise to
the Participant's estate.
4.06 All Distributions In Cash. All distributions made from
the Plan shall be made in cash only.
4.07 Other Withdrawals and Distributions. Withdrawals and
distributions from the Plan shall not be permitted for any
reasons other than those in this Article IV.
<PAGE>
<PAGE>
ARTICLE V
ADMINISTRATION OF THE PLAN
5.01 Plan Administrator. The Plan shall be administered by
Amoco (or its agent) which shall have the discretionary authority
to interpret the Plan and issue such regulations as it deems
appropriate. The Plan Administrator shall have the duty and
responsibility of maintaining records and making the requisite
calculations. The Plan Administrator's interpretations,
determinations, regulations, and calculations shall be final and
binding on all persons and parties concerned.
5.02 Amendment and Termination. Amoco may amend or
terminate the Plan at any time, provided, however, that no such
amendment or termination shall adversely affect a benefit to
which a terminated or retired Participant or his beneficiary is
entitled under Article II prior to the date of such amendment or
termination.
5.03 Payments. The Company will pay all benefits arising
under this Plan and all costs, charges, and expenses relating
thereto.
5.04 Non-assignability of Benefits. The benefits payable
hereunder or the right to receive future benefits under the Plan
may not be anticipated, assigned (either at law or in equity),
alienated, pledged, encumbered, or subject to attachment,
garnishment, levy, execution or other legal or equitable process.
5.05 Status of Plan. The benefits under this plan shall not
be funded but shall constitute liabilities of the Company when
due.
5.06 Nonguarantee of Employment. Nothing contained in this
Plan shall be construed as a contract of employment between the
Company and any Participant, or as a right of any Participant to
be continued in employment of the Company, or as a limitation on
the right of the Company to discharge any of its employees, with
or without cause.
5.07 Applicable Law. All questions pertaining to the
construction and validity of the Plan shall be determined in
accordance with the laws of the United States, and to the extent
not preempted by such laws, by the laws of the State of Illinois.
5.08 Rules of Construction. Where the context so requires,
the masculine includes the feminine, the singular includes the
plural, and the plural includes the singular.
5.09 Withholding. The Company is authorized to withhold all
income and other taxes required to be withheld from amounts
payable under this Plan.
<PAGE>
<PAGE>
DEFERRAL SAVINGS RESTORATION PLAN
OF
AMOCO CORPORATION
AND
PARTICIPATING COMPANIES
Established as of: July 1, 1983
Amended and Restated as of: November 1, 1996
<PAGE>
<PAGE>
DEFERRAL SAVINGS RESTORATION PLAN
OF
AMOCO CORPORATION
AND
PARTICIPATING COMPANIES
TABLE OF CONTENTS
Page
I. DEFINITIONS
1.01 Act 1
1.02 Amoco 1
1.03 Code 1
1.04 Company 1
1.05 Deferred Earnings 1
1.06 Effective Date 1
1.07 Maximum Benefit 1
1.08 Participant 1
1.09 Savings Plan 1
1.10 Plan 1
1.11 Section 16 Officer 2
1.12 Unrestricted Benefit 2
II. COMPANY CONTRIBUTION ACCOUNT
2.01 Establishment of Company
Contribution Account 3
2.02 Crediting Company Matching
Contributions 3
2.03 Charge to Company Contribution
Accounts 3
III. HYPOTHETICAL INVESTMENT FUNDS
3.01 Hypothetical Investment Funds 4
3.02 Hypothetical Investment of Credited
Company Matching Contributions
and Transfers Among Funds 4
<PAGE>
<PAGE>
DEFERRAL SAVINGS RESTORATION PLAN
OF
AMOCO CORPORATION
AND
PARTICIPATING COMPANIES
TABLE OF CONTENTS
(Continued)
Page
IV. DISTRIBUTIONS
4.01 Distribution Upon Retirement 5
4.02 Distribution Upon Death of a Participant 5
4.03 Termination of Employment Prior to
Retirement or Death 5
4.04 $3,500 Cash-Out 6
4.05 Designation of Beneficiary 6
4.06 No Designation 6
4.07 All Distributions In Cash 6
4.08 Other Withdrawals and Distributions 7
V. ADMINISTRATION OF THE PLAN
5.01 Plan Administrator 8
5.02 Amendment and Termination 8
5.03 Payments 8
5.04 Non-assignability of Benefits 8
5.05 Status of Plan 8
5.06 Nonguarantee of Employment 8
5.07 Applicable Law 8
5.08 Rules of Construction 9
5.09 Withholding 9
<PAGE>
<PAGE>
ARTICLE I
DEFINITIONS
1.01 "Act" shall mean the Employee Retirement Income
Security Act of 1974 ("ERISA"), as amended from time to time.
1.02 "Amoco" shall mean Amoco Corporation, an Indiana
corporation.
1.03 "Code" shall mean the Internal Revenue Code of 1986, as
amended from time to time.
1.04 "Company" shall mean Amoco and any of its subsidiaries
or affiliated business entities participating in the Savings
Plan.
1.05 "Deferred Earnings" shall mean all or the portion of a
Participant's bonus under the 1991 Incentive Program for Amoco
Corporation and its Participating Subsidiaries that the payment
of such bonus was deferred past the initial payment date.
1.06 "Effective Date" shall mean July 1, 1983.
1.07 "Maximum Benefit" shall mean the sum of a Participant's
Company Matching Contributions contributed to his Savings Plan
company contribution account and credited to his ERISA Savings
Restoration Plan of Amoco Corporation and Participating Companies
company contribution account for any calendar year.
1.08 "Participant" shall mean any employee of the Company,
including without limitation a Section 16 Officer, who is an
active Participant in the Savings Plan, is a recipient of a bonus
under the 1991 Incentive Program for Amoco Corporation and its
Participating Subsidiaries and has deferred payment of all or a
portion of any bonus past the initial payment date.
1.09 "Savings Plan" shall mean the Amoco Employee Savings
Plan, as amended from time to time.
1.10 "Plan" shall mean the Deferral Savings Restoration Plan
of Amoco Corporation and Participating Companies, as amended from
time to time or restated, which shall be an unfunded excess
benefit plan as defined in Act Section 3(36).
1.11 "Section 16 Officer" shall mean any employee of the
Company who is an officer subject to Section 16 of the Securities
Exchange Act of 1934.
1.12 "Unrestricted Benefit" shall mean the sum of a
Participant's Company Matching Contributions that would have been
contributed to his Savings Plan company contribution account and
credited to his ERISA Savings Restoration Plan of Amoco
Corporation and Participating Companies company contribution
account for any calendar year determined under both of these
plans assuming Deferred Earnings are "Applicable Compensation" as
defined in the Savings Plan.
<PAGE>
<PAGE>
ARTICLE II
COMPANY CONTRIBUTION ACCOUNT
2.01 Establishment of Company Contribution Account. The
Plan Administrator will establish and maintain an unfunded
Company Contribution Account in the name of each Participant.
2.02 Crediting Company Matching Contributions. For every
payroll cycle the Plan Administrator shall determine which
Participants have an Unrestricted Benefit greater than their
Maximum Benefit. The Plan Administrator shall make this
determination by making the calculations on a payroll cycle
basis. Then, under a procedure similar to the one used for the
Savings Plan, the Plan Administrator shall credit to the Company
Contribution Accounts of each of those Participants an amount
equal to his Unrestricted Benefit less his Maximum Benefit.
2.03 Charge to Company Contribution Accounts. Any amount
distributed or paid from a Company Contribution Account will be
charged against such account, under a procedure similar to the
one used for the Savings Plan, as of the day on which the
distribution or payment occurs. Also, if a Participant receives
any Deferred Earnings prior to his termination of employment with
the Company the amount of Company Matching Contributions credited
to his Company Contribution Account for this Plan at the time
such Participant deferred receipt of such earnings, will be
charged against his Company Contribution Account (disregarding
all hypothetical investment results) during the payroll cycle of
the receipt of the Deferred Earnings, but in no event shall his
Company Contribution Account be charged more than the account's
hypothetical market value at the time of the charge.
<PAGE>
<PAGE>
ARTICLE III
HYPOTHETICAL INVESTMENT FUNDS
3.01 Hypothetical Investment Funds. The Plan Administrator
will maintain records which reflect the portion of each Company
Contribution Account of a Participant that is hypothetically to
be invested in any of the investment funds available to
participants in the Savings Plan, as amended from time to time.
The Plan Administrator shall use the same values used by the plan
administrator of the Savings Plan in maintaining these records.
3.02 Hypothetical Investment of Credited Company Matching
Contributions and Transfers Among Funds. All Company Matching
Contributions will be hypothetically invested in the Savings Plan
Amoco Stock Fund when they are initially credited to
Participants' Company Contribution Accounts. Twice a calendar
month, a Participant may direct a hypothetical transfer among the
investment funds available to participants in the Savings Plan,
so that his Company Contribution Account is invested entirely in
one investment fund or in a combination of two or more of the
investment funds, provided that combinations must be specified in
5% increments and the total combination must equal 100%.
<PAGE>
<PAGE>
ARTICLE IV
DISTRIBUTIONS
4.01 Distribution Upon Retirement. A Participant whose
employment terminates as a result of retirement, as defined under
the Savings Plan, will receive the total amount credited to his
Company Contribution Account, in a cash lump sum, in the January
following his retirement. Notwithstanding the foregoing, a
Participant can accelerate payment of his lump sum distribution
by irrevocably electing to accelerate, prior to his retirement,
his cash lump sum distribution to the month following his
retirement.
4.02 Distribution Upon Death of a Participant. If a
Participant dies with a balance in his Company Contribution
Account, his beneficiary will receive the total amount in his
account in a cash lump sum as soon as administratively
practicable.
4.03 Termination of Employment Prior to Retirement or Death.
If a Participant's employment with the Company terminates under
circumstances other than for retirement or death, he shall be
100% vested in an amount equal to the amount credited to his
Company Contribution Account [less the smaller of: 1. the value
of the sum of the Company Matching Contributions, valued on the
date credited to his Company Contribution Account, times the
result of 100% minus his vested percent or, 2. the value of his
Company Contribution Account times his vested percent], which is
a percentage based upon his years of vesting service (as defined
under the Savings Plan), as follows:
Year of Vesting But Less Than Vested Percentage
Service
2 Years 0%
2 Years 3 Years 25%
3 Years 4 Years 50%
4 Years 5 Years 75%
5 Years 100%
A Participant whose employment terminates under
circumstances other than for retirement or death will receive the
vested portion credited to his Company Contribution Account in a
cash lump sum, in the January following his termination of
employment. Notwithstanding the foregoing, a Participant can
accelerate payment of his lump sum distribution by irrevocably
electing to accelerate prior to his termination of employment,
his cash lump sum distribution to the month following his
termination of employment.
4.04 $3,500 Cash-Out. If the vested amount credited to a
Participant's Company Contribution Account does not exceed $3,500
at the date of his termination of employment for any reason, the
Plan Administrator shall distribute in a cash lump sum the entire
vested amount credited to his account as soon as administratively
practicable.
4.05 Designation of Beneficiary. A Participant may
designate one or more beneficiaries and may revoke or change such
designation at any time. If the Participant names two or more
beneficiaries, distribution to them will be in such proportions
as the Participant designates or, if the Participant does not so
designate, in equal shares pro rata from such Participant's
Company Contribution Account. Also, if the Participant names two
or more beneficiaries and one beneficiary predeceases the
Participant, then the deceased beneficiary's share shall be
distributed to the other beneficiaries in the percentages stated
on the Participants' beneficiary election form. Any designation
of beneficiary will be in writing on such form as Amoco may
prescribe and will be effective upon filing with Amoco.
Notwithstanding the preceding paragraph, the sole
beneficiary of a married Participant will be the Participant's
spouse unless the spouse consents in writing to the designation
of another person as beneficiary. The spouse's consent must
acknowledge the effect of such consent and be witnessed by a
notary public.
4.06 No Designation. Any portion of a distribution payable
upon the death of a Participant which is not disposed of by a
designation of beneficiary for any reason whatsoever will be paid
to the Participant's spouse if living at this death, otherwise to
the Participant's estate.
4.07 All Distributions In Cash. All distributions made from
the Plan shall be made in cash only.
4.08 Other Withdrawals and Distributions. Withdrawals and
distributions from the Plan shall not be permitted for any
reasons other than those in this Article IV.
<PAGE>
<PAGE>
ARTICLE V
ADMINISTRATION OF THE PLAN
5.01 Plan Administrator. The Plan shall be administered by
Amoco (or its agent) which shall have the discretionary authority
to interpret the Plan and issue such regulations as it deems
appropriate. The Plan Administrator shall have the duty and
responsibility of maintaining records and making the requisite
calculations. The Plan Administrator's interpretations,
determinations, regulations, and calculations shall be final and
binding on all persons and parties concerned.
5.02 Amendment and Termination. Amoco may amend or
terminate the Plan at any time, provided, however, that no such
amendment or termination shall adversely affect a benefit to
which a terminated or retired Participant or his beneficiary is
entitled under Article II prior to the date of such amendment or
termination.
5.03 Payments. The Company will pay all benefits arising
under this Plan and all costs, charges, and expenses relating
thereto.
5.04 Non-assignability of Benefits. The benefits payable
hereunder or the right to receive future benefits under the Plan
may not be anticipated, assigned (either at law or in equity),
alienated, pledged, encumbered, or subject to attachment,
garnishment, levy, execution or other legal or equitable process.
5.05 Status of Plan. The benefits under this plan shall not
be funded but shall constitute liabilities of the Company when
due.
5.06 Nonguarantee of Employment. Nothing contained in this
Plan shall be construed as a contract of employment between the
Company and any Participant, or as a right of any Participant to
be continued in employment of the Company, or as a limitation on
the right of the Company to discharge any of its employees, with
or without cause.
5.07 Applicable Law. All questions pertaining to the
construction and validity of the Plan shall be determined in
accordance with the laws of the United States, and to the extent
not preempted by such laws, by the laws of the State of Illinois.
5.08 Rules of Construction. Where the context so requires,
the masculine includes the feminine, the singular includes the
plural, and the plural includes the singular.
5.09 Withholding. The Company is authorized to withhold all
income and other taxes required to be withheld from amounts
payable under this Plan.
<PAGE>
<PAGE>
ERISA SAVINGS RESTORATION PLAN
OF
AMOCO CORPORATION
AND
PARTICIPATING COMPANIES
Established as of: July 1, 1983
Amended and Restated as of: November 1, 1996
<PAGE>
<PAGE>
ERISA SAVINGS RESTORATION PLAN
OF
AMOCO CORPORATION
AND
PARTICIPATING COMPANIES
TABLE OF CONTENTS
Page
I. DEFINITIONS
1.01 Act 1
1.02 Amoco 1
1.03 Code 1
1.04 Company 1
1.05 Effective Date 1
1.06 Maximum Benefit 1
1.07 Participant 1
1.08 Savings Plan 1
1.09 Plan 1
1.10 Section 16 Officer 1
1.11 Unrestricted Benefit 1
II. COMPANY CONTRIBUTION ACCOUNT
2.01 Establishment of Company
Contribution Account 3
2.02 Crediting Company Matching
Contributions 3
2.03 Charge to Company Contribution
Accounts 3
III. HYPOTHETICAL INVESTMENT FUNDS
3.01 Hypothetical Investment Funds 4
3.02 Hypothetical Investment of Credited
Company Matching Contributions
and Transfers Among Funds 4
<PAGE>
<PAGE>
ERISA SAVINGS RESTORATION PLAN
OF
AMOCO CORPORATION
AND
PARTICIPATING COMPANIES
TABLE OF CONTENTS
(Continued)
Page
IV. DISTRIBUTIONS
4.01 Distribution Upon Retirement 5
4.02 Distribution Upon Death of a Participant 5
4.03 Termination of Employment Prior to
Retirement or Death 5
4.04 $3,500 Cash-Out 6
4.05 Designation of Beneficiary 6
4.06 No Designation 6
4.07 All Distributions In Cash 6
4.08 Other Withdrawals and Distributions 7
V. ADMINISTRATION OF THE PLAN
5.01 Plan Administrator 8
5.02 Amendment and Termination 8
5.03 Payments 8
5.04 Non-assignability of Benefits 8
5.05 Status of Plan 8
5.06 Nonguarantee of Employment 8
5.07 Applicable Law 8
5.08 Rules of Construction 9
5.09 Withholding 9
<PAGE>
<PAGE>
ARTICLE I
DEFINITIONS
1.01 "Act" shall mean the Employee Retirement Income
Security Act of 1974 ("ERISA"), as amended from time to time.
1.02 "Amoco" shall mean Amoco Corporation, an Indiana
corporation.
1.03 "Code" shall mean the Internal Revenue Code of 1986, as
amended from time to time.
1.04 "Company" shall mean Amoco and any of its subsidiaries
or affiliated business entities participating in the Savings
Plan.
1.05 "Effective Date" shall mean July 1, 1983.
1.06 "Maximum Benefit" shall mean the maximum total of
Company Matching Contributions permitted by the Code to be
contributed to the account of a Participant of the Savings Plan
for any calendar year under Sections 415(c)(1)(A) and 401(a)(17)
of the Code.
1.07 "Participant" shall mean any employee of the Company,
including without limitation a Section 16 Officer, who is an
active Participant in the Savings Plan on or after the Effective
Date, is a recipient of a bonus under the 1991 Incentive Program
for Amoco Corporation and its Participating Subsidiaries and has
deferred payment of all or a portion of any bonus past the
initial payment date.
1.08 "Savings Plan" shall mean the Amoco Employee Savings
Plan, as amended from time to time.
1.09 "Plan" shall mean the ERISA Savings Restoration Plan of
Amoco Corporation and Participating Companies, as amended from
time to time or restated, which shall be an unfunded excess
benefit plan as defined in Act Section 3(36).
1.10 "Section 16 Officer" shall mean any employee of the
Company who is an officer subject to Section 16 of the Securities
Exchange Act of 1934.
1.11 "Unrestricted Benefit" shall mean the maximum total of
Company Matching Contributions that would have been contributed
to the Savings Plan company contribution account of a Participant
of the Savings Plan for any calendar year, without regard to the
limitations of the Code imposed under Sections 415(c)(1)(A) and
401(a)(17).
<PAGE>
<PAGE>
ARTICLE II
COMPANY CONTRIBUTION ACCOUNT
2.01 Establishment of Company Contribution Account. The
Plan Administrator will establish and maintain an unfunded
Company Contribution Account in the name of each Participant.
2.02 Crediting Company Matching Contributions. For every
payroll cycle the Plan Administrator shall determine which
Participants have an Unrestricted Benefit greater than their
Maximum Benefit. The Plan Administrator shall make this
determination by making the calculations on a payroll cycle
basis. Then, under a procedure similar to the one used for the
Savings Plan, the Plan Administrator shall credit to the Company
Contribution Accounts of each of those Participants an amount
equal to his Unrestricted Benefit less his Maximum Benefit.
2.03 Charge to Company Contribution Accounts. Any amount
distributed or paid from a Company Contribution Account will be
charged against such account, under a procedure similar to the
one used for the Savings Plan, as of the day on which the
distribution or payment occurs.
<PAGE>
<PAGE>
ARTICLE III
HYPOTHETICAL INVESTMENT FUNDS
3.01 Hypothetical Investment Funds. The Plan Administrator
will maintain records which reflect the portion of each Company
Contribution Account of a Participant that is hypothetically to
be invested in any of the investment funds available to
participants in the Savings Plan, as amended from time to time.
The Plan Administrator shall use the same values used by the plan
administrator of the Savings Plan in maintaining these records.
3.02 Hypothetical Investment of Credited Company Matching
Contributions and Transfers Among Funds. All Company Matching
Contributions will be hypothetically invested in the Savings Plan
Amoco Stock Fund when they are initially credited to
Participants' Company Contribution Accounts. Twice a calendar
month, a Participant may direct a hypothetical transfer among the
investment funds available to participants in the Savings Plan,
so that his Company Contribution Account is invested entirely in
one investment fund or in a combination of two or more of the
investment funds, provided that combinations must be specified in
5% increments and the total combination must equal 100%.
<PAGE>
<PAGE>
ARTICLE IV
DISTRIBUTIONS
4.01 Distribution Upon Retirement. A Participant whose
employment terminates as a result of retirement, as defined under
the Savings Plan, will receive the total amount credited to his
Company Contribution Account, in a cash lump sum, in the January
following his retirement. Notwithstanding the foregoing, a
Participant can accelerate payment of his lump sum distribution
by irrevocably electing to accelerate, prior to his retirement,
his cash lump sum distribution to the month following his
retirement.
4.02 Distribution Upon Death of a Participant. If a
Participant dies with a balance in his Company Contribution
Account, his beneficiary will receive the total amount in his
account in a cash lump sum as soon as administratively
practicable.
4.03 Termination of Employment Prior to Retirement or Death.
If a Participant's employment with the Company terminates under
circumstances other than for retirement or death, he shall be
100% vested in an amount equal to the amount credited to his
Company Contribution Account [less the smaller of: 1. the value
of the sum of the Company Matching Contributions, valued on the
date credited to his Company Contribution Account, times the
result of 100% minus the vested percent or, 2. the value of his
Company Contribution Account times the vested percent], which is
a percentage based upon his years of vesting service (as defined
under the Savings Plan), as follows:
Year of Vesting But Less Than Vested Percentage
Service
2 Years 0%
2 Years 3 Years 25%
3 Years 4 Years 50%
4 Years 5 Years 75%
5 Years 100%
A Participant whose employment terminates under
circumstances other than for retirement or death will receive the
vested portion credited to his Company Contribution Account in a
cash lump sum, in the January following his termination of
employment. Notwithstanding the foregoing, a Participant can
accelerate payment of his lump sum distribution by irrevocably
electing to accelerate prior to his termination of employment,
his cash lump sum distribution to the month following his
termination of employment.
4.04 $3,500 Cash-Out. If the vested amount credited to a
Participant's Company Contribution Account does not exceed $3,500
at the date of his termination of employment for any reason, the
Plan Administrator shall distribute in a cash lump sum the entire
vested amount credited to his account as soon as administratively
practicable.
4.05 Designation of Beneficiary. A Participant may
designate one or more beneficiaries and may revoke or change such
designation at any time. If the Participant names two or more
beneficiaries, distribution to them will be in such proportions
as the Participant designates or, if the Participant does not so
designate, in equal shares pro rata from such Participant's
Company Contribution Account. Also, if the Participant names two
or more beneficiaries and one beneficiary predeceases the
Participant, then the deceased beneficiary's share shall be
distributed to the other beneficiaries in the percentages stated
on the Participants' beneficiary election form. Any designation
of beneficiary will be in writing on such form as Amoco may
prescribe and will be effective upon filing with Amoco.
Notwithstanding the preceding paragraph, the sole
beneficiary of a married Participant will be the Participant's
spouse unless the spouse consents in writing to the designation
of another person as beneficiary. The spouse's consent must
acknowledge the effect of such consent and be witnessed by a
notary public.
4.06 No Designation. Any portion of a distribution payable
upon the death of a Participant which is not disposed of by a
designation of beneficiary for any reason whatsoever will be paid
to the Participant's spouse if living at this death, otherwise to
the Participant's estate.
4.07 All Distributions In Cash. All distributions made from
the Plan shall be made in cash only.
4.08 Other Withdrawals and Distributions. Withdrawals and
distributions from the Plan shall not be permitted for any
reasons other than those in this Article IV.
<PAGE>
<PAGE>
ARTICLE V
ADMINISTRATION OF THE PLAN
5.01 Plan Administrator. The Plan shall be administered by
Amoco (or its agent) which shall have the discretionary authority
to interpret the Plan and issue such regulations as it deems
appropriate. The Plan Administrator shall have the duty and
responsibility of maintaining records and making the requisite
calculations. The Plan Administrator's interpretations,
determinations, regulations, and calculations shall be final and
binding on all persons and parties concerned.
5.02 Amendment and Termination. Amoco may amend or
terminate the Plan at any time, provided, however, that no such
amendment or termination shall adversely affect a benefit to
which a terminated or retired Participant or his beneficiary is
entitled under Article II prior to the date of such amendment or
termination.
5.03 Payments. The Company will pay all benefits arising
under this Plan and all costs, charges, and expenses relating
thereto.
5.04 Non-assignability of Benefits. The benefits payable
hereunder or the right to receive future benefits under the Plan
may not be anticipated, assigned (either at law or in equity),
alienated, pledged, encumbered, or subject to attachment,
garnishment, levy, execution or other legal or equitable process.
5.05 Status of Plan. The benefits under this plan shall not
be funded but shall constitute liabilities of the Company when
due.
5.06 Nonguarantee of Employment. Nothing contained in this
Plan shall be construed as a contract of employment between the
Company and any Participant, or as a right of any Participant to
be continued in employment of the Company, or as a limitation on
the right of the Company to discharge any of its employees, with
or without cause.
5.07 Applicable Law. All questions pertaining to the
construction and validity of the Plan shall be determined in
accordance with the laws of the United States, and to the extent
not preempted by such laws, by the laws of the State of Illinois.
5.08 Rules of Construction. Where the context so requires,
the masculine includes the feminine, the singular includes the
plural, and the plural includes the singular.
5.09 Withholding. The Company is authorized to withhold
all income and other taxes required to be withheld from amounts
payable under this Plan.
<PAGE>
<PAGE>
AMOCO CORPORATION
DIRECTORS DEFERRED FEE PLAN
1. PURPOSE.
The purpose of this Directors Deferred Fee Plan (the "Plan")
is to provide non-employee directors of the Corporation an
opportunity to receive the cash portion of their Directors
Fees on a deferred basis.
2. DEFINITIONS.
Unless the context otherwise requires, the following words
as used herein shall have the following meanings:
(a) "Board"--the Board of Directors of the
Corporation.
(b) "Corporation"--Amoco Corporation, an Indiana
corporation.
(c) "Directors Fees"--annual amount of fees paid from
time to time by the Corporation for membership on the
Board or any of its committees (exclusive of expense
reimbursement).
(d) "Dividend Equivalent"--the entry in a deferred
compensation account of a dividend credit with respect
to a Share Unit, each Dividend Equivalent being equal
to the dividend paid from time to time on a Share.
(e) "Participant"--an eligible member of the Board who
elects to participate in the Plan.
(f) "Participant's Account"--has the meaning described
in Section 6.
(g) "Share"--a share of the Corporation's common stock
without par value and any share or shares of stock of
the Corporation hereafter issued or issuable in
substitution or exchange for each such share.
(h) "Share Unit"--the entry in a deferred compensation
account of a credit equal to the Share.
3. ELIGIBILITY.
Each member of the Board who is not an employee of the
Corporation or any subsidiary of the Corporation shall be
eligible to participate in the Plan.
4. ELECTION OF DEFERRED COMPENSATION.
Each duly elected member of the Board who is not an employee
of the Corporation or any subsidiary of the Corporation may
elect to receive on a deferred basis any or all of the cash
portion of Directors Fees. An election shall be made by
submitting a completed election form to the Secretary of the
Corporation not later than the day of any annual meeting.
An election to defer all or part of the cash portion of
Directors Fees shall be irrevocable once made for any given
year; provided however, that Directors may elect to cease
deferrals for future years by informing the Secretary in
writing of such election to cease deferrals before the day
of any subsequent annual meeting. Directors may thereafter
elect to defer Directors Fees for any future year, and may
change the percentage of the cash portion of Directors Fees
deferred and the form of deferral (e.g. cash or share units
or a combination thereof) for any future year by submitting
a new election form before the day of any subsequent annual
meeting. Directors elected to the Board at any time other
than at an annual meeting may elect to participate in the
Plan within 30 days of the date of their election to the
Board.
5. MANNER OF ELECTING DEFERRAL.
A Participant shall elect to defer the cash portion of
Directors Fees by giving written notice to the Secretary of
the Corporation on the election form substantially in the
form attached hereto as Exhibit A. Such notice shall
include:
(1) the percentage of the cash portion of Directors
Fees to be deferred,
(2) the form of deferral, being either cash or Share
Units or any combination thereof,
(3) an election of a cash lump-sum payment or of a
number of annual cash installments (not to exceed ten)
for the payment of the deferred amounts, and
(4) the date of the lump-sum payment or the first
installment payment (which may be January 15 of the
year following the year in which continuous service as
a director terminates or January 15 of a stated year
preceding the Participant's 71st birthday).
6. PARTICIPANTS' ACCOUNTS.
An account shall be maintained for each Participant for all
deferred Directors Fees ("Participant's Account"). Cash,
interest, Share Units, and Dividend Equivalents shall be
credited to a Participant's Account as stipulated in the
applicable election form(s) and as set forth in the Plan.
Amounts credited to a Participant's Account shall constitute
vested rights to deferred payment. A participant may direct
from time to time, but not more than once in any twelve
month period, that the investment direction of all or any
part of the balance in his or her Participant's Account be
changed from cash to Share Units or from Share Units to
cash, based on the average of the high and low prices of
Shares as reported on the New York Stock Exchange on the
date written instructions with respect to the change is
received by the Corporation. The twelve month period shall
commence on the date a Participant elects to change the
investment direction of all or a part of the balance in his
or her Participant's Account and end on the date twelve
months after such election.
7. SHARE UNITS.
Share Units shall be credited to a Participant's Account
promptly upon the cash portion of Directors Fees deferred in
Share Units becoming due. The value of Share Units for the
purposes of crediting accounts with Directors Fees and
periodic Dividend Equivalents shall be the average of the
high and low prices for Shares as reported on the New York
Stock Exchange on the last trading day on which Shares were
traded preceding the date on which the cash portion of
Directors Fees are payable or the applicable dividend
payment date, as the case may be. Any fractional Share
Units shall be carried forward and credited to a
Participant's Account in conjunction with subsequent
fractional Share Units on Dividend Equivalents. The number of
Share Units in an account shall be adjusted to give effect
to any increase or decrease in the number of issued and
outstanding Shares through the declaration of a stock
dividend, or through recapitalization resulting in a stock
split, combination or exchange of Shares of the Corporation,
or the like. Share Units shall not entitle any person to
the rights of a shareholder.
8. DIVIDEND EQUIVALENTS.
Until payment in accordance with Section 11, a Participant's
Account credited with Share Units shall be credited on
dividend payment dates with Dividend Equivalents. On any
dividend payment date when cumulative Dividend Equivalents
in a Participant's Account shall equal or exceed the value
of a full Share Unit, such Dividend Equivalents shall be
credited to such account in a full Share Unit.
9. CASH.
A Participant's Account shall be credited promptly upon and
in the amount of the cash portion of the Directors Fees
deferred in cash becoming due.
10. INTEREST.
Until payment in accordance with Section 11, Participants'
Accounts deferred in cash shall accrue interest during any
calendar month at a rate equal to the prime rate of The
First National Bank of Chicago in effect on the first
business day of such month. Interest shall be compounded
monthly.
11. PAYMENT OF DEFERRED COMPENSATION.
Each Participant shall be entitled to receive in cash all
deferred compensation credited to such Participant's Account
(less taxes, if any, required to be withheld by the Federal
or any state or local government and paid over to such
government for the Participant) in accordance with such
Participant's election(s) with respect to date and manner of
payment. Payment of amounts deferred in Share Units shall
be based on the average of the high and low prices of Shares
as reported on the New York Stock Exchange for the trading
day preceding a payment date.
If annual installments are elected, the amount of the first
payment shall be a fraction of the balance in the
Participant's Account as of the day preceding such payment,
the numerator of which is one and the denominator of which
is the total number of installments elected. The amount of
each subsequent payment shall be a fraction of the balance
in the Participant's Account as of the day preceding each
subsequent payment, the numerator of which is one and the
denominator of which is the total number of installments
elected minus the number of installments previously paid.
For purposes of determining the balance in a Participant's
Account, Share Units shall be valued at the average of the
high and low prices of Shares as reported on the New York
Stock Exchange on the valuation date.
No withdrawal may be made from a Participant's Account
except as provided in this Section 11.
In the event of a Participant's death, the Participant's
designated beneficiary shall continue to receive payment
according to the Participant's election(s). In the absence
of a designated beneficiary, the balance in the
Participant's Account shall be determined as of the date of
death, and such balance shall be paid in a single payment to
the Participant's estate as soon as reasonably possible
thereafter.
12. VALUE OF DEFERRED COMPENSATION ACCOUNTS.
The value of each Participant's Account shall consist of the
cash portion of the Directors Fees deferred in the form of
cash or Share Units and the interest or Dividend Equivalents
described in Sections 8 and 10. All deferred cash credits
to an account shall earn interest for the period from the
date credited to the date of withdrawal. As promptly as
practicable following the close of each calendar year a
statement will be sent to each Participant as to the balance
in the Participant's Account as of the end of such year.
13. PARTICIPANT'S RIGHT UNSECURED.
No fund is to be created to meet payment obligations under
this Plan, and the right of a Participant to receive any
unpaid portion of the Participant's Account shall be an
unsecured claim against the general assets of the
Corporation.
14. NON-ASSIGNABILITY.
The right of a Participant to receive any unpaid portion of
the Participant's Account shall not be assigned,
transferred, pledged or encumbered or be subject in any
manner to alienation or anticipation, except that a
Participant may designate, on forms provided by the
Corporation, a beneficiary to receive unpaid installments in
the event of such Participant's death.
15. ADMINISTRATION.
The administrator of this Plan shall be the Corporate
Secretary of the Corporation. The Corporate Secretary shall
have the authority to adopt rules and regulations for
carrying out the Plan and to interpret and implement the
provisions hereof.
16. AMENDMENT AND TERMINATION.
The Plan may at any time be amended, modified or terminated
by the Board. No amendment, modification or termination
shall, without the consent of a Participant, adversely
affect such Participant's rights with respect to amounts
credited to the Participant's Account.
17. EFFECTIVE DATE.
The Plan became effective on December 22, 1981, and will
continue in effect until terminated by the Board.
As amended and restated effective November 1, 1996.
<PAGE>
<PAGE>
AMOCO CORPORATION
DIRECTORS DEFERRED FEE PLAN
Election Form
TO: CORPORATE SECRETARY
In accordance with the provisions of the Directors Deferred
Fee Plan, I hereby elect to defer the cash portion of Directors
Fees (excluding expense reimbursements) for services as a
Director of Amoco Corporation otherwise payable to me after the
date of Amoco Corporation's Annual Meeting in 199_.
Amount of Deferral: __________% of the cash portion of
Directors Fees.
Deferral to be either in cash or Share Units related to
common stock of Amoco Corporation or any combination thereof as
indicated below:
__________% Cash
__________% Share Units
The deferred cash portion of Directors Fees payable to me
after Amoco Corporation's Annual Meeting in 199_ is to be paid to
me in cash as provided in the Plan in ______ (insert number not
to exceed ten) annual installment(s), the first of which is to be
paid on (choose one):
A. ________ January 15th of the calendar
year following the year in which my
continuous service as a Director terminates.
B. ________ January 15, ______ (a date
preceding my 71st birthday).
C. ________ The earlier of A or B, above.
In the event of my death before receiving the entire balance
in my account covered by this election form, unpaid installments
shall be paid to my designated beneficiary in accordance with my
election, and in the absence of a designated beneficiary, the
unpaid balance in my account shall be paid as soon as reasonably
possible to my estate in a single paycheck.
This election is subject to the terms of the Directors
Deferred Fee Plan on file with the records of the Corporation.
Upon acceptance by the Corporation, this election shall be
binding upon me and be irrevocable with respect to the cash
portion of Directors Fees for the years covered by this election
form. I understand that I may elect to cease deferrals of the
cash portion of Directors Fees for any future years by informing
the Secretary in writing prior to the day of any Amoco
Corporation Annual Meeting. I may change the amount and form of
my deferral of Directors Fees for future years by submitting a
new election form prior to the day of any subsequent Amoco
Corporation Annual Meeting.
Date: _______________
____________________________________
Signature of Director
Received and accepted on
__________________, 19___
on behalf of Amoco Corporation
By __________________________
Secretary
<PAGE>
<PAGE>
DESIGNATION OF BENEFICIARY
Pursuant to the "Directors Deferred Fee Plan" of Amoco
Corporation, an Indiana Corporation, I hereby direct that all
amounts payable thereunder upon my death shall be paid to the
beneficiary or beneficiaries designated below:
_________________________________________________________________
_________________________________________________________________
LAST FIRST MIDDLE
NAME NAME INITIAL ADDRESS_________ ___
____________________________
(Number and Street)
____________________________
(City, State, Zip)
_________________________________________________________________
If I designate more than one beneficiary and do not direct
otherwise, any amount which may be payable under said plan will
be paid in equal shares to those beneficiaries who survive me.
If I do not name a beneficiary or if all of the beneficiaries I
name do not survive me, any amount which may be payable under
said plan will be paid to my estate.
I may designate a new beneficiary or beneficiaries by completing
another Designation of Beneficiary form.
Additional information __________________: (Describe any
additional instructions below)
_______________________________
(Signature)
Date: _______________
Please return forms to:
Corporate Secretary
Amoco Corporation
200 East Randolph Drive
Chicago, IL 60601
<PAGE>
<PAGE>
AMOCO CORPORATION
BONUS DEFERRAL PLAN FOR 1991 INCENTIVE PROGRAM
AS AMENDED AND RESTATED EFFECTIVE NOVEMBER 1, 1996
1. PURPOSE
The purpose of this Bonus Deferral Plan (this "Plan") is to
provide certain employees of Amoco Corporation ("Amoco") and
its subsidiaries who receive bonuses pursuant to the 1991
Incentive Program of Amoco Corporation and its Participating
Subsidiaries (the "1991 Incentive Program") an opportunity
to receive such bonuses on a deferred basis. This Plan
shall be considered part of the 1991 Incentive Program and
is set out in a separate document merely for convenience.
2. ELIGIBILITY
Persons regularly eligible for a bonus under the 1991
Incentive Program who are on a United States (U.S. $)
payroll, including without limitation officers subject to
Section 16 of the Securities Exchange Act of 1934 ("Section
16"), are eligible to participate in this Plan. Persons on
other countries' payrolls will be eligible only as, and if,
determined by the Compensation and Organization Committee or
its delegatee(s).
3. TERMS OF DEFERRAL
a. Eligible persons may voluntarily elect to defer receipt
of a portion or all of any bonus which may be earned in
future years.
b. Deferral elections must be made no later than August 31
of the year in which a bonus is earned.
c. Deferrals may be for a specified period during
employment or until after retirement, or a combination
of both.
d. Deferred bonuses will be deemed to be invested in
either of two ways or a combination thereof.
1) Cash credited with interest at a rate determined
by the Compensation and Organization Committee
("Benchmark Interest Rate").
2) Share Units equivalent to shares of Amoco common
stock with quarterly dividend equivalents credited
and reinvested in additional Share Units.
e. Participants shall be permitted to switch deferred
bonuses for any given year or years between investment
alternatives once within the Participant's Account (as
defined in Section 4 below) in any twelve month period.
The twelve month period shall commence on the date a
Participant elects to switch deferred bonuses between
investment alternatives and end on the date twelve
months after such election. In connection with any
change in the Benchmark Interest Rate made by the
Compensation and Organization Committee pursuant to
Section 9 of this Plan, the Compensation and
Organization Committee may elect to permit Participants
to switch deferred bonuses for any given year or years
between investment alternatives once within the
Participant's Account (in addition to the once-per-
twelve-month switch permitted by the preceding
sentence) effective with such change in the Benchmark
Interest Rate. In the event that the Compensation and
Organization Committee elects to permit any such
special switch between investment alternatives,
appropriate notice shall be sent to all Participants in
advance of the effective date.
f. Payout of a deferred bonuses may be as follows:
1) In lump sum or in up to five (5) annual
installments if payout occurs or commences during
employment, or
2) In lump sum or in up to fifteen (15) annual
installments if payout occurs or commences
following retirement, or
3) A combination of 1 and 2.
"Retirement" shall mean retirement under a qualified
retirement plan of Amoco and its subsidiaries.
g. Acceleration of payout of deferred bonuses to a date or
dates sooner than originally elected is permissible
only in the case of severe financial hardship beyond
the control of the Participant and is at the discretion
of the Compensation and Organization Committee, for
officers subject to Section 16, and of Amoco, for all
other Participants.
h. Payouts of deferred bonuses shall be made only in the
form of cash. Payment for Share Units will be based on
the fair market value of Amoco common shares at the
time of payout as provided in this Plan.
4. PARTICIPANTS' ACCOUNTS
An account shall be maintained for each Participant for all
deferred bonuses ("Participant's Account"). Cash, interest
equivalents, Share Units, and Dividend Equivalents shall be
credited to a Participant's Account as stipulated in the
applicable election form(s) and as set forth in this Plan.
5. UNFUNDED OBLIGATION
All payments under this Plan shall be made from the general
funds of Amoco and no special or separate fund shall be
established and no other segregation of assets shall be made
to assure the payment of any deferred payments. No
Participant shall have any right, title or interest whatever
in or to any investment which Amoco may make to aid it in
meeting its obligations hereunder. Nothing contained in
this Plan and no action taken pursuant to its provisions,
shall create or be construed to create a trust or escrow of
any kind or a fiduciary relationship between Amoco and a
Participant or any other person. To the extent a
Participant or any other person acquires a right to receive
payments from Amoco, such right shall be no greater than the
right of a general unsecured creditor.
6. SHARE UNITS
Share Units shall be credited to a Participant's Account
promptly upon payment of a bonus for the amount of the bonus
deferred in Share Units. The value of Share Units for the
purposes of crediting accounts with periodic Dividend
Equivalents shall be the average of the high and low prices
for shares of Amoco common stock ("Shares") as reported on
the New York Stock Exchange on the applicable dividend
payment date. Any fractional Share Units shall be
maintained in the Participant's Account. The number of
Share Units in an account shall be adjusted to give effect
to any increase or decrease in the number of issued and
outstanding Shares through the declaration of a stock
dividend, or through recapitalization resulting in a stock
split, combination or exchange of Shares of Amoco, or the
like. Share Units shall not entitle any person to the
rights of a shareholder.
7. DIVIDEND EQUIVALENTS
Until payment in accordance with this Plan, a Participant's
Account credited with Share Units shall be credited on
dividend payment dates with Dividend Equivalents. On any
dividend payment date when cumulative Dividend Equivalents
in a Participant's Account shall equal or exceed the value
of a full Share Unit, such Dividend Equivalents shall be
credited to such account in a full Share Unit. Fractional
Share Units shall also be maintained.
8. CASH
A Participant's Account shall be credited promptly upon
payment of a bonus for the applicable amount of bonus
deferred in cash.
9. INTEREST
Until payment in accordance with this Plan, Participant's
Accounts deferred in cash shall be deemed to accrue interest
equivalents, which shall be credited and compounded monthly
at the Benchmark Interest Rate determined by the
Compensation and Organization Committee.
10. PAYMENT OF DEFERRED COMPENSATION
Each Participant shall be entitled to receive in cash all
deferred compensation credited to such Participant's Account
(less taxes, if any, required to be withheld by the Federal
or any state or local government and paid over to such
government for the Participant) in accordance with such
Participant's election(s). Payment of amounts deferred in
Share Units shall be based on the average of the high and
low prices of Shares as reported on the New York Stock
Exchange for the trading day preceding a payment date.
If annual installments are elected, the amount of the first
payment shall be a fraction of the balance in the
Participant's Account as of the day preceding each
subsequent payment, the numerator of which is one and the
denominator of which is the total number of installments
elected minus the number of installments previously paid.
In the event of a Participant's death, the balance in the
Participant's Account shall be paid to the Participant's
designated beneficiary, or to the Participant's estate. The
balance in the Participant's account shall be determined as
of the date of death. Such balance shall be paid in a
single payment to the Participant's beneficiary or the
Participant's estate, as applicable, as soon as reasonably
practicable thereafter.
Notwithstanding the foregoing, if a Participant shall
terminate his or her employment with Amoco or its
subsidiaries for any reason other than death or retirement,
the balance in the Participant's Account shall be determined
as of the date of termination. Such balance shall be paid
in a single payment to the Participant as soon as reasonably
practicable thereafter.
11. VALUE OF PARTICIPANTS' ACCOUNTS
The value of each Participant's Account shall consist of the
amount of bonuses deferred in the form of cash and/or Share
Units and the interest equivalents or Dividend Equivalents
described in Sections 7 and 9. All deferred cash credits to
an account shall be deemed to earn interest equivalents for
the period from the date credited to the date of withdrawal.
12. NON-ASSIGNABILITY
The right of a Participant to receive any unpaid portion of
the Participant's Account shall not be voluntarily or
involuntarily assigned, transferred, pledged or encumbered
or be subject in any manner to alienation or anticipation,
except that a Participant may designate, on forms provided
by Amoco, a beneficiary to receive unpaid installments in
the event of such Participant's death.
13. ADMINISTRATION
The administrator of the Plan shall be the Compensation and
Organization Committee and its delegatee(s). The
Compensation and Organization Committee and its delegatee(s)
shall have the authority to adopt rules, regulations and
procedures for carrying out this Plan and to interpret and
implement the provisions hereof.
14. AMENDMENT AND TERMINATION
This Plan may at any time be amended, modified or terminated
by the Compensation and Organization Committee and its
delegatee(s). No amendment, modification or termination
shall, without the consent of a Participant, adversely
affect such Participant's rights with respect to amounts
credited to the Participant's Account.
15. EFFECTIVE DATE
This Plan is effective as of November 1, 1991. This Plan
will continue in effect until terminated by the Compensation
and Organization Committee. The first bonuses under the
1991 Incentive Program to which this Plan shall apply shall
be bonuses payable in calendar year 1993.
Amended and Restated effective November 1, 1996.
<PAGE>
<PAGE>
EXHIBIT 12
AMOCO CORPORATION
______________________
STATEMENT SETTING FORTH COMPUTATION OF RATIO OF
EARNINGS TO FIXED CHARGES
(millions of dollars, except ratios)
Year Ended December 31,
1996 1995 1994 1993 1992
Determination of Income:
Consolidated earnings
before income taxes
and minority interest.. $3,965 $2,404 $2,491 $2,506 $ 998
Fixed charges expensed by
consolidated companies. 412 406 316 350 376
Adjustments for certain
companies accounted for
by the equity method... 69 25 7 11 28
Adjusted earnings plus
fixed charges.......... $4,446 $2,835 $2,814 $2,867 $1,402
Determination of Fixed Charges:
Consolidated interest on
indebtedness (including
interest capitalized).. $ 317 $ 317 $ 288 $ 299 $ 333
Consolidated rental
expense representative
of an interest factor.. 107 89 23 50 44
Adjustments for certain
companies accounted for
by the equity method... 8 6 5 8 20
Total fixed charges...... $ 432 $ 412 $ 316 $ 357 $ 397
Ratio of earnings to
fixed charges............ 10.3 6.9 8.9 8.0 3.5
<PAGE>
<PAGE>
Exhibit 21
AMOCO CORPORATION
_________________
SUBSIDIARIES OF THE REGISTRANT
AT December 31, 1996
Organized
Under
Company (1) Laws of
Amoco Canada Petroleum Company Ltd................. Canada
ACP (Malaysia), Inc............................... Delaware
Amoco Chemical (Malaysia) Sdn Bhd............... Malaysia
Amoco Canada Hydrocarbons Ltd..................... Canada
Amoco Canada Marketing Corp....................... Delaware
Amoco Canada Resources Ltd........................ Canada
Dome Petroleum Corp. (U.S.)....................... North Dakota
Dome Pipeline Corporation (U.S.)................. Delaware
Amoco Company...................................... Delaware
Amoco Chemical Company............................ Delaware
Amoco Chemical Holding Company................... Delaware
Amoco Chemical Belgium N.V...................... Belgium
Amoco Chemical Indonesia Limited................ Delaware
Amoco Chemical Malaysia Holding .Co............. Delaware
Amoco Chemical Singapore Holding .Co............ Delaware
Plaskon Electronic Materials, Ltd............. Bermuda
Amoco Chemical Singapore Limited................ Delaware
Amoco Chemicals Pty. Limited.................... Australia
Amoco do Brasil Ltda............................ Brazil
Amoco Fabrics and Fibers Company................ Delaware
Amoco Nisseki CLAF, Inc. (A).................. Delaware
Amoco Fabrics and Fibers Ltd.................... Canada
Amoco International Finance Corporation......... Delaware
A. G. International Chemical Company Inc.(A).. Japan
Amoco Chemical Asia Pacific Limited........... Hong Kong
Amoco Olefins Corporation....................... Delaware
Amoco Polymers, Inc............................. Delaware
Amoco Remediation Management Services Company... Delaware
China American Petrochemical Co., Ltd. (A)....... Taiwan
Samsung Petrochemical Co., Ltd. (A).............. Korea
Amoco Leasing Corporation......................... Delaware
Amoco Tax Leasing X Corporation.................. Delaware
Amoco Research Corporation........................ Delaware
Amoco Research Operating Company................. Delaware
Amoco Oil Company................................. Maryland
Amoco Environmental Services Company............. Virginia
Amoco Oil Holding Company........................ Delaware
Amoco Corporate Development Company (Latin
America).................................... Delaware
Amoco Mexico Holding Company S.A. de C.V...... Mexico
Amoco Sulfur Recovery Company................... Delaware
Omega Oil Company............................... Delaware
Amoco Marketing Environmental Services Company... Nevada
Amoco Pipeline Company............................ Maine
Amoco Pipeline Holding Company................... Delaware
<PAGE>
<PAGE>
Organized
Under
Company (1) Laws of
Amoco Production Company........................... Delaware
Amoco Caspian Sea Petroleum Company.............. Delaware
Amoco Caspian Sea Petroleum Limited............. British Virgin
Islands
Amoco Colombia Petroleum Company................. Delaware
Amoco Egypt Gas Company.......................... Delaware
Amoco Egypt Oil Company.......................... Delaware
Gulf of Suez Petroleum Company (A).............. Egypt
Amoco Energy Trading Corporation................. Delaware
Amoco Eurasia Petroleum Company.................. Delaware
Amoco Gas Company................................ Delaware
Amoco International Petroleum Company............ Delaware
Amoco Argentina Oil Company..................... Delaware
Amoco Trinidad Oil Company...................... Delaware
Amoco Netherlands Petroleum Company.............. Delaware
Amoco Netherlands, B.V.......................... Delaware
Amoco Trinidad (LNG) B.V....................... Netherlands
Amoco Nigeria Petroleum Company.................. Delaware
Amoco Norway Oil Company......................... Delaware
Amoco Ob River Petroleum Company................. Delaware
Amoco Orient Petroleum Company................... Delaware
Amoco Overseas Exploration Company............... Delaware
Amoco Sharjah LPG Company........................ Delaware
Amoco Sharjah Oil Company........................ Delaware
Amoco Supply and Trading Company................. Delaware
Amoco Trinidad Power Resources Corporation....... Delaware
Amoco (U.K.) Exploration Company................. Delaware
Amoco Venezuela Petroleum Company................ Delaware
Coastwise Trading Company, Inc................... Delaware
Coastwise Guaranty Company...................... Delaware
TOC--Rocky Mountains Inc......................... Delaware
Amoco Properties Incorporated..................... Delaware
Amoco Chemical (Europe) S.A........................ Delaware
Amoco Chemical U.K. Limited....................... England
Amoco Fabrics (U.K.) Limited..................... England
Amoco Holding GmbH................................ Germany
Amoco Deutschland GmbH........................... Germany
Amoco Fabrics Europe B.V........................ Netherlands
Amoco Technology Company........................... Delaware
Vysis, Inc........................................ Delaware
Amoco Solar Holding Company....................... Delaware
Amoco/Enron Solar (A)............................ Delaware
AmProp Finance Company............................. Indiana
AmProp, Inc........................................ Delaware
(1) Two hundred eighty-three subsidiaries and thirty-four
50% or less owned companies accounted for by the equity
method are not named. Such subsidiaries and affiliate
companies,considered in the aggregate, do not constitute a
significant subsidiary.
(A) Represents holdings between 10% and 50% inclusive.
<PAGE>
<PAGE>
EXHIBIT 23
AMOCO CORPORATION
_________________
CONSENT OF INDEPENDENT ACCOUNTANTS
We hereby consent to the incorporation by reference in the
Registration Statements on Forms S-8 (Nos. 33-65153, 33-58063,
33-52575, 33-66170, 33-51475, 33-55748, 33-42950, 33-52579, 33-
40099, and 33-5332) and in the Prospectuses constituting part
of the Registration Statements on Forms S-3 (Nos. 33-11635, 33-
61389, and 33-63811) of Amoco Corporation of our report dated
February 25, 1997 appearing in Item 8 of this Form 10-K.
PRICE WATERHOUSE LLP
Chicago, Illinois
March 21, 1997
<PAGE>
<PAGE>
Exhibit 24
POWER OF ATTORNEY
KNOW ALL MEN BY THESE PRESENTS, that the undersigned
constitutes and appoints H. L. Fuller, W. G. Lowrie and J. L.
Carl, and each of them, his or her true and lawful attorney-in-
fact and agent, 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 (i) any and all Amoco
Corporation registration statements and amendments thereto
relating to issuance, through or in connection with employee
benefit plans, of Amoco Corporation common stock and plan
interests, and (ii) annual reports of Amoco Corporation on Form
10-K, for any fiscal year, and (iii) any and all amendments to
Registration Statements Nos. 33-11635, 33-22897, and 33-63811 on
Form S-3, and to file the same with the Securities and Exchange
Commission, with all exhibits thereto, and all other documents as
may be necessary or appropriate in connection therewith, granting
unto said attorney-in-fact and agent, full power and authority to
do and perform each and every act and thing which said attorneys
and agents, or any of them, deem advisable to enable Amoco
Corporation to comply with the federal or state securities laws,
and any requirements or regulations in respect thereto, as fully
to all intents and purposes as he or she might or could do in
person, and the undersigned does hereby ratify and confirm all
that said attorney-in-fact and agent, or his substitute or
substitutes, may lawfully do or cause to be done by virtue
hereof.
IN WITNESS WHEREOF, I have executed this Power of Attorney
on the _10th_ day of __March__, 1997.
_Judith G. Boynton____________
(signature)
_Judith G. Boynton____________
(print name)
<PAGE>
<PAGE>
POWER OF ATTORNEY
KNOW ALL MEN BY THESE PRESENTS, that the undersigned
constitutes and appoints H. L. Fuller, W. G. Lowrie and J. L.
Carl, and each of them, his or her true and lawful attorney-in-
fact and agent, 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 (i) any and all Amoco
Corporation registration statements and amendments thereto
relating to issuance, through or in connection with employee
benefit plans, of Amoco Corporation common stock and plan
interests, and (ii) annual reports of Amoco Corporation on Form
10-K, for any fiscal year, and (iii) any and all amendments to
Registration Statements Nos. 33-11635, 33-22897, and 33-63811 on
Form S-3, and to file the same with the Securities and Exchange
Commission, with all exhibits thereto, and all other documents as
may be necessary or appropriate in connection therewith, granting
unto said attorney-in-fact and agent, full power and authority to
do and perform each and every act and thing which said attorneys
and agents, or any of them, deem advisable to enable Amoco
Corporation to comply with the federal or state securities laws,
and any requirements or regulations in respect thereto, as fully
to all intents and purposes as he or she might or could do in
person, and the undersigned does hereby ratify and confirm all
that said attorney-in-fact and agent, or his substitute or
substitutes, may lawfully do or cause to be done by virtue
hereof.
IN WITNESS WHEREOF, I have executed this Power of Attorney
on the _14th_ day of __March__, 1997.
_Arthur C. Martinez___________
(signature)
_Arthur C. Martinez___________
(print name)
<PAGE>
<PAGE>
POWER OF ATTORNEY
KNOW ALL MEN BY THESE PRESENTS, that the undersigned
constitutes and appoints H. L. Fuller, W. G. Lowrie and J. L.
Carl, and each of them, his or her true and lawful attorney-in-
fact and agent, 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 (i) any and all Amoco
Corporation registration statements and amendments thereto
relating to issuance, through or in connection with employee
benefit plans, of Amoco Corporation common stock and plan
interests, and (ii) annual reports of Amoco Corporation on Form
10-K, for any fiscal year, and (iii) any and all amendments to
Registration Statements Nos. 33-11635, 33-22897, and 33-63811 on
Form S-3, and to file the same with the Securities and Exchange
Commission, with all exhibits thereto, and all other documents as
may be necessary or appropriate in connection therewith, granting
unto said attorney-in-fact and agent, full power and authority to
do and perform each and every act and thing which said attorneys
and agents, or any of them, deem advisable to enable Amoco
Corporation to comply with the federal or state securities laws,
and any requirements or regulations in respect thereto, as fully
to all intents and purposes as he or she might or could do in
person, and the undersigned does hereby ratify and confirm all
that said attorney-in-fact and agent, or his substitute or
substitutes, may lawfully do or cause to be done by virtue
hereof.
IN WITNESS WHEREOF, I have executed this Power of Attorney
on the _14th_ day of __March__, 1997.
_Theodore M. Solso____________
(signature)
_Theodore M. Solso____________
(print name)
<TABLE> <S> <C>
<PAGE>
<PAGE>
<ARTICLE> 5
<LEGEND>
This schedule contains summary financial information extracted from the
Consolidated Statement of Income and the Consolidated Statement of Financial
Position and is qualified in its entirety by reference to such financial
statements.
</LEGEND>
<CIK> 0000093397
<NAME> AMOCO CORPORATION
<MULTIPLIER> 1,000,000
<S> <C>
<PERIOD-TYPE> YEAR
<FISCAL-YEAR-END> DEC-31-1996
<PERIOD-START> JAN-01-1996
<PERIOD-END> DEC-31-1996
<CASH> 186
<SECURITIES> 1135
<RECEIVABLES> 3959
<ALLOWANCES> 17
<INVENTORY> 1069
<CURRENT-ASSETS> 7063
<PP&E> 50511
<DEPRECIATION> 27111
<TOTAL-ASSETS> 32100
<CURRENT-LIABILITIES> 6139
<BONDS> 4153
0
0
<COMMON> 2946
<OTHER-SE> 13762
<TOTAL-LIABILITY-AND-EQUITY> 32100
<SALES> 32150
<TOTAL-REVENUES> 36112
<CGS> 23200
<TOTAL-COSTS> 23200
<OTHER-EXPENSES> 6509
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 192
<INCOME-PRETAX> 3965
<INCOME-TAX> 1131
<INCOME-CONTINUING> 2834
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 2834
<EPS-PRIMARY> 5.69
<EPS-DILUTED> 0
</TABLE>
