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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
For the fiscal year ended December 31, 1997 or
( ) TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d)
OF THE SECURITIES EXCHANGE ACT OF 1934
For the transition period from to .
Commission file number: 1-170-2
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, 1998, based on a closing price of $81.375 was
approximately $39,451,000,000.
Number of common shares outstanding as of January 31, 1998,
was 482,203,176 shares.
DOCUMENTS INCORPORATED BY REFERENCE
Proxy Statement dated March 16, 1998
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AMOCO CORPORATION
INDEX
Page
PART I
Items 1. and 2. Business and Properties ................... 3
Exploration and Production .............................. 3
Reserves ................................................ 12
Oil and Gas Sales Commitments ........................... 13
Supply and Marketing of NGL ............................. 13
Refining ................................................ 14
Transportation .......................................... 14
Marketing of Petroleum Products ......................... 15
Chemicals ............................................... 16
Other Operations ........................................ 18
Research ................................................ 18
Employees ............................................... 19
Competition ............................................. 19
Government Regulation ................................... 19
Safety, Health and Environmental Protection ............. 20
Executive Officers of the Registrant .................... 22
Item 3. Legal Proceedings ................................. 23
Item 4. Submission of Matters to a Vote of Security Holders 24
PART II
Item 5. Market for the Registrant's Common Stock and
Related Stockholder Matters ............................. 25
Item 6. Selected Financial Data ........................... 26
Item 7. Management's Discussion and Analysis of Financial
Condition and Results of Operations ..................... 27
Item 8. Financial Statements and Supplemental Information . 40
Item 9. Changes in and Disagreements with Accountants on
Accounting and Financial Disclosure ..................... 95
PART III
Item 10. Directors and Executive Officers of the Registrant 95
Item 11. Executive Compensation ........................... 95
Item 12. Security Ownership of Certain Beneficial Owners
and Management .......................................... 95
Item 13. Certain Relationships and Related Transactions ... 95
PART IV
Item 14. Exhibits, Financial Statement Schedules, and
Reports on Form 8-K ..................................... 96
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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, bonds and
debentures of Amoco Canada. See Note 10 to the Consolidated
Financial Statements. Summarized financial information relating to
Amoco Company and Amoco Canada is disclosed in Note 23 to the
Consolidated Financial Statements.
Selected financial information by geographic area and industry
segment for the three years ended December 31, 1997, is presented
in Note 24 to the Consolidated Financial Statements.
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 and Norway), the Gulf of Suez and Nile Delta (Egypt), West
Africa (Algeria, Angola and Nigeria), Caspian Sea (Azerbaijan and
Kazakstan), South America (Argentina, Bolivia, Colombia and
Venezuela) and Trinidad and Tobago.
Amoco's U.S. production of crude oil, condensate, NGL, and
natural gas is principally in the states of Alabama, Arkansas,
Colorado, Kansas, Louisiana, Mississippi, New Mexico, Oklahoma,
Texas, Wyoming and offshore in the Gulf of Mexico. Foreign crude
oil and natural gas production is located in Argentina, Azerbaijan,
Bolivia, Canada, China, Colombia, Egypt, the Netherlands, Norway,
Sharjah, Trinidad, the United Kingdom and Venezuela.
Worldwide net production of liquid hydrocarbons in 1997
averaged 637,000 barrels per day, about four percent lower than the
1996 level of 662,000 barrels per day. U.S. liquids production
averaged 274,000 barrels per day in 1997, down eight percent from
1996, as a result of normal field declines and property
dispositions. Worldwide net production of natural gas decreased 240
million cubic feet ("mmcf") per day in 1997 and averaged 4,142 mmcf
per day for the year. In the United States, natural gas production
decreased eight percent in 1997, and averaged 2,368 mmcf per day
for the year.
Amoco's net production of oil and gas for the three years
ended December 31, 1997, 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)
1997................... 274 61 65 237 637
1996 .................. 297 61 60 244 662
1995 .................. 295 66 64 235 660
Natural gas (millions of
cubic feet per day)
1997 .................. 2,368 761 390 623 4,142
1996 .................. 2,572 815 386 609 4,382
1995 .................. 2,453 842 363 581 4,239
* 1997 includes Amoco's interest in affiliates' production. U.S.
production includes NGL from processing plants in which Amoco has
an ownership interest of 62, 66 and 64 thousands of barrels per day
for the years 1997, 1996 and 1995, respectively.
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. In 1997, Amoco received 110,000 barrels of
oil equivalent per day from its 64 percent interest.
Also in 1997, Amoco formed a partnership called Crescendo
Resources L.P., with a subsidiary of YPF S.A. This partnership owns
and operates reserves of about one trillion cubic feet ("tcf") of
natural gas in the Texas Panhandle and Western Oklahoma.
At year-end 1997, Amoco owned entirely or had an ownership
interest in 42 natural gas processing plants in the United States.
Amoco is the operator of 9 of the plants; Altura Energy Ltd. is the
operator for 11 plants; and Crescendo Resources L.P. is the
operator of 2 plants. A new plant in Kansas, in which Amoco is
operator, is expected to be fully operational by the end of the
first quarter of 1998.
Amoco continued optimization of production from existing
waterflood and improved oil recovery operations in 1997. 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 56 percent of Amoco's U.S.
net crude and condensate production.
After conducting several pilot tests of its proprietary
technology in enhanced coalbed methane ("ECBM"), Amoco proceeded
with Tiffany ECBM, its first full-scale commercial ECBM project
located in southwestern Colorado. Initial nitrogen injection began
in January 1998.
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 200 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.
In the Gulf of Mexico deepwater area, Amoco produced first oil
and natural gas from the Ram-Powell Project, a development with
Shell Oil Company and Exxon Corporation. Amoco's share of total
development expenses for the project is estimated at $260 million.
Development of the $465 million Marlin Project ("Marlin")
began in early 1997. Marlin is located 125 miles southwest of New
Orleans in 3,240 feet of water. Marlin is the first Amoco-operated
deepwater development in the Gulf of Mexico, and will be developed
using a tension leg platform. Construction and drilling operations
began in mid-1997 with production expected by mid-1999. Evaluation
work continues on nearby acreage. Amoco expects to maintain an
active deepwater exploration program in 1998.
Amoco is building and will be operating a cryogenic natural
gas processing plant in Pascagoula, Mississippi to process the
Marlin natural gas. The plant, in which Amoco will have a 60
percent interest, is expected to have a daily processing capacity
of one billion cubic feet of natural gas. The plant is anticipated
to be fully operational in early 1999.
In 1997, Amoco sold non-core oil and gas properties as part of
its strategy to upgrade and refocus the U.S. portfolio of E&P
assets. These properties had a net annual impact on production of
about 20 thousand barrels per day of crude oil and NGL and 120 mmcf
per day of natural gas. Proceeds from these sales and the sale of
an intrastate natural gas pipeline in Texas, approximated $1.2
billion. Additional oil and gas properties identified by the
Corporation as non-core are expected to be sold in 1998.
In Canada, Amoco divested its arctic drilling operations, as
well as other non-core oil and gas properties in western Canada.
Proceeds are mainly being used to maintain natural gas production.
Amoco entered into an alliance with Northstar Energy
Corporation of Calgary ("Northstar") to pursue natural gas
exploration in northeast British Columbia. Northstar will commit
$32 million to exploration and development activities on Amoco's
acreage over the next three years. Amoco also entered into an
agreement with CU Power International Ltd. to develop a steam
enhancement plant. The plant will use natural gas as a fuel source
to efficiently produce steam and electricity for use at Amoco's
Primrose heavy-oil project. Surplus electricity is expected to be
sold to third parties.
In November 1997, Amoco Argentina Oil Company ("Amoco
Argentina")and Bridas Corporation ("Bridas") created a jointly-
owned company called Pan American Energy LLC. ("Pan American"). The
new enterprise is a result of the combination of the respective
assets of Amoco Argentina and Bridas in the southern part of South
America. Pan American is the second largest producer of crude oil
and natural gas in Argentina. Amoco holds a 60 percent interest in
the new venture.
In Bolivia, Amoco owns an interest and assumed operatorship of
a new Bolivian company, Empresa Petrolera Chaco S.A. ("Chaco"), in
April 1997. During 1997, Chaco commenced efforts to increase
liquids production, initiate exploration and drilling operations
and improve facilities.
In China, Amoco completed the Liuhua field program with the
completion of the twenty-fourth well in the South China Sea.
Development was completed significantly ahead of the original plan
and on target with the accelerated plan approved in 1997. Also,
acquisition of 3-D seismic data was approved and completed in 1997,
and is expected to be used to support optimal sidetrack drilling in
1998 and throughout the remaining life of the field.
In Colombia, Amoco completed 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 began in late 1997 to Ecopetrol, the Colombian national oil
company. In 1998, Amoco is expected to supply natural gas from the
Opon field to the 200 megawatt Termo Santander power generation
station, which was partially completed in 1997 by Amoco Power
Resources Corporation.
In Egypt, Amoco continues to enjoy success in exploration and
development of natural gas in the Nile Delta. Through its working
interest in a number of partnerships, Amoco participated in 18
commercial gas discoveries in the Nile Delta. In 1997, Amoco and
its partner announced plans to develop the 2 tcf Ha'py field
natural gas discovery in the Nile Delta. Natural gas is expected to
be sold into the expanding Egyptian domestic market beginning in
late 1999. Amoco is also moving ahead with plans for additional
sales to the local Egyptian market over the next few years (net 120
mmcf of natural gas per day on line by 2000), and is exploring
natural gas export opportunities.
In the Netherlands, Amoco successfully completed the
construction of the Peak Gas storage facility. The plant was
officially dedicated in December 1997. The $150 million facility at
Alkmaar will help the Dutch national gas transmission and
distribution company, Gasunie, meet peak demand for natural gas
starting in 1998.
In Norway, ongoing development drilling on the new well
protector platform resulted in the addition of five wells in the 19
well program. Other notable accomplishments included installation
of the new crude oil pipeline and natural gas pipeline to be
commissioned in conjunction with the Ekofisk II rebuild.
In Sharjah, Amoco continued development of the Sajaa Field
using multi-lateral horizontal wells resulting in sustained peak
production. In addition, the first phase of Inlet Compression was
completed resulting in a lower reservoir abandonment pressure.
In Trinidad and Tobago, Amoco enjoyed continued success,
adding 1.3 tcf of natural gas reserves, 25.5 million barrels of
crude oil and condensate reserves and completing three successful
exploration wells. Amoco is participating with a 34 percent
ownership interest in the construction of a new liquid natural gas
("LNG") facility, and is expected to supply 100 percent of the
plant's initial natural gas requirement of approximately 450 mmcf
per day beginning in 1999. Amoco is positioned to supply additional
gas as the LNG facility is expanded. Amoco recently signed two
production sharing contracts with the government of Trinidad and
Tobago. Amoco is the operator and holds a 70 percent interest in
Block 5B and has a 40 percent non-operating interest in Block S11B.
Seismic work on these blocks has been completed and exploration
drilling is scheduled to begin in the second quarter of 1998.
In the United Kingdom, production from the Armada complex
commenced in October 1997, and averaged production of 13,000
barrels of oil equivalent per day to Amoco in the fourth quarter.
Amoco's working interest in the project is 18.2 percent. The export
of natural gas from Armada boosted throughput in the Amoco operated
Central Area Transmission System (CATS). Beacon Gas Limited, whose
principal activity is the distribution of natural gas to the retail
sector and in which Amoco has a 50 percent interest, increased the
number of customers contracted to 150,000.
In Venezuela, gross production commenced in the first quarter
of 1997 in the Deep Jusepin field at approximately 10,000 barrels
of oil per day through a temporary production facility. The rate
was increased to 18,000 barrels per day in October 1997 when the
permanent production facility was completed. Development drilling
is expected to enable gross production at capacity of 30,000
barrels of oil per day by the end of the second quarter of 1998.
Amoco has a 45 percent interest in the Jusepin field. During 1997,
Amoco began exploration programs in the Punta Pescador and
Guarapiche blocks, in which Amoco holds 50 percent and 37.5 percent
interests, respectively. Seismic acquisition is currently under way
with exploratory wells planned in 1998.
In Azerbaijan, Amoco has a 17 percent working interest and is
a leading partner in the Azeri, Chirag, and deepwater Gunashli
project in the Azeri sector of the Caspian Sea. Azerbaijan
International Operating Company ("AIOC") is the operator on behalf
of the partners. In 1997, AIOC completed the minimum work program
and initiated production from the early oil project. Production
from the early oil project is expected to be exported via a
distribution route which runs from Baku to Novorossiysk, Russia. In
1997, work progressed on another distribution route from Baku to
Supsa, Georgia and on phase 1 of the offshore development.
In 1997, Amoco and other partners were awarded the rights to
explore and develop the Ashrafi and Dan Ulduzu prospects in the
Caspian Sea. Amoco is the lead partner with a 30 percent working
interest. North Absheron Operating Company ("NAOC") was formed to
act as operator on behalf of the partners. NAOC completed a 3-D
seismic program and commenced drilling of the first exploration
well.
Average sales prices (including transfers) and production
costs per unit of crude oil and natural gas produced, for the three
years ended December 31, 1997, are as follows:
United
States Canada Europe Other
1997
Average sales prices:
Crude oil (per barrel) ..... $18.47 $14.19 $18.56 $17.85
Natural gas liquids
(per barrel) ............. $12.46 $14.36 $ -- $ --
Natural gas (per thousand
cubic feet ("mcf")) ...... $ 2.15 $ 1.38 $ 2.69 $ 1.19
Average production costs (per
equivalent barrel) (*) ..... $ 4.04 $ 3.48 $ 7.33 $ 4.98
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 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
(*) 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.
Sales prices have declined significantly since December 31,
1997. Reported average sales prices represent recorded revenues for
crude oil and natural 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 crude oil or
natural 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 and in certain
overseas areas, costs related to product transportation expenses.
Data regarding Amoco's exploratory and development drilling
activities during the three years ended December 31, 1997, are
summarized below:
United World-
States Canada Europe Other wide
1997
Net exploratory wells:
Productive .......... 13 15 1 3 32
Dry ................. 9 4 15 6 34
Total ............. 22 19 16 9 66
Net development wells:
Productive .......... 178 115 5 134 432
Dry ................. 9 19 -- 4 32
Total ............. 187 134 5 138 464
Total net wells ... 209 153 21 147 530
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
Shown below are wells in process of being drilled at
December 31, 1997:
United World-
States Canada Europe Other wide
Gross wells ...... 179 12 8 25 224
Net wells ........ 69 4 2 21 96
The number of wells owned by Amoco at December 31, 1997, was
as follows:
United World-
States Canada Europe Other wide
Gross wells owned:
Oil wells ...... 22,028 4,623 204 797 27,652
Gas wells ...... 16,114 2,229 194 122 18,659
Total ........ 38,142 6,852 398 919 46,311
Net wells owned:
Oil wells ...... 6,376 2,368 47 699 9,490
Gas wells ...... 9,015 1,419 74 75 10,583
Total ........ 15,391 3,787 121 774 20,073
Multiple completion wells included above:
Gross wells .... 1,608 354 -- 51 2,013
Net wells ...... 713 249 -- 15 977
Amoco's proved and unproved acreage holdings, including
acreage held under reservations, permits, options or similar
arrangements at December 31, 1997, are summarized below:
United World-
States Canada Europe Other wide
(thousands of acres)
Gross acres:
Proved ................ 4,934 2,009 877 898 8,718
Unproved .............. 12,273 3,969 10,023 31,772 58,037
Reservations, permits,
options, etc. ....... 134 3,163 -- -- 3,297
Total ............... 17,341 9,141 10,900 32,670 70,052
Net acres:
Proved ................ 2,262 1,300 243 368 4,173
Unproved .............. 4,241 2,323 4,513 17,286 28,363
Reservations, permits,
options, etc. ....... 32 2,147 -- -- 2,179
Total ............... 6,535 5,770 4,756 17,654 34,715
Reserves
This section should be read in conjunction with data on
reserves presented in "Supplemental Information" to the
Consolidated Financial Statements.
Amoco replaced 178 percent of its production on an oil-energy
equivalent basis during 1997, excluding ownership changes.
Including the sales and purchases of properties, which primarily
involved sales of interests in the United States and Canada, the
production replacement rate was 147 percent. The tables in the
"Supplemental Information" section set forth, by geographic area,
net proved reserves as of December 31, 1997, 1996, 1995, and 1994
including reserves in which Amoco holds economic interest under
production sharing and other types of operating agreements with
foreign governments. Also included are Amoco's proportionate
economic interest in estimated proved reserves of equity affiliates
in Argentina and Bolivia.
Adding to 1997 reserves were discoveries and extensions in the
United States, Egypt, Argentina, Canada, Sharjah, the United
Kingdom and Trinidad. Major improved recovery additions occurred in
Argentina, Sharjah, Egypt, the United Kingdom and the United
States. There were also significant upward revisions in crude oil
in the United States, Egypt, Norway and Trinidad, and significant
natural gas revisions in Canada, Bolivia and Trinidad. Downward
revisions of natural gas reserves occurred in the United States. As
of March 1, 1998, no major discovery or significant event had
occurred that would have a material effect on the estimated proved
reserves reported at December 31, 1997.
Shown below are estimated proved reserves as of December 31,
1997 and 1996:
Crude Oil & NGL Natural Gas
(millions of barrels) (billions of cubic feet)
Consoli- Affil- Consoli- Affil-
dated iates Total dated iates Total
Net proved reserves:
December 31, 1997 2,253 164 2,417 20,088 1,368 21,456
December 31, 1996 2,423 -- 2,423 20,346 -- 20,346
Net proved developed
reserves:
December 31, 1997 1,646 120 1,766 13,097 807 13,904
December 31, 1996 1,882 -- 1,882 14,166 -- 14,166
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 natural gas from its producing operations under a
variety of contractual arrangements. Amoco has several natural gas
sales contracts that specify obligations to make available fixed
and determinable quantities.
Amoco has 39 such contracts in the United States which, as of
December 31, 1997, provide for the delivery over the next three
years of 507 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
16 bcf of natural gas over the next three years. Amoco expects this
commitment to be fulfilled from reserves currently being developed.
In Trinidad and Tobago, Amoco entered into a long-term gas
sales contract with Atlantic LNG Company in 1996. Deliveries are
expected to commence in 1999 and approximate 79 bcf of natural gas
in that year. Amoco expects this commitment to be fulfilled from
reserves currently being developed.
Amoco Canada has 20 outstanding natural gas contracts as of
December 31, 1997. Over the next three years, deliveries under
these contracts total approximately 527 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 and Supplemental Data).
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 1997, 1996 and 1995 averaged 189,000 barrels per
day, 200,000 barrels per day, and 204,000 barrels per day,
respectively.
Amoco owns or has interest in four fractionator plants in
Canada and the United States. Two are located in Canada in Fort
Saskatchewan and Sarnia and two are located in the United States in
Hobbs, New Mexico and Mont Belvieu, Texas. In 1997, Amoco acquired
a 12 percent interest in the Mont Belvieu plant, which has a design
capacity to process 200,000 barrels per day of raw NGL mix.
Refining
Amoco owns and operates five refineries in the United States.
The daily operable capacity of these refineries in 1997 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 ........................ 52,000
Total ..................................... 1,010,000
Daily input to crude units averaged 938,000 in 1997, 954,000
barrels in 1996 and 926,000 barrels in 1995. Crude unit utilization
was 92.9 percent in 1997 compared with 94.6 percent in 1996,
primarily reflecting planned maintenance on a major crude
processing unit. Refinery investments focused on chemical feedstock
production, sustaining reliable operations, increasing crude oil
flexibility, and environmental compliance.
Transportation
Amoco operates extensive transportation facilities for crude
oil, refined products, NGL, carbon dioxide ("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 refined petroleum product
system is connected to three refineries. Chemical feedstock lines
receive product directly from Amoco refineries and other Amoco and
non-Amoco facilities, 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 over 15,000 miles. In 1997, shipments through Amoco's
pipeline system in North America totaled 442 million barrels of
crude oil and 397 million barrels of refined products and
feedstocks.
Minority interests are also owned in 11 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 1997, Amoco acquired an equity interest in the Longhorn
Partners Pipeline, Inc., a joint-venture pipeline company that will
use new and existing assets to move refined products from Houston
to El Paso starting in late 1998. 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.
Development of the Destine Pipeline system to transport
hydrocarbons from Marlin to onshore Mississippi was approved in
1997. The Destine Pipeline system is jointly owned by Amoco, Shell
Oil Company and Sonnet Exploration. The pipeline will be used to
move product into the natural gas processing plant in Pascagoula,
Mississippi.
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, 1997, Amoco owned three U.S. Flag
tug/barges and bareboat chartered another tug/barge, giving Amoco
an aggregate of 79 thousand deadweight tonnage ("DWT"). In February
1997, Amoco sold a U.S. Flag tug/barge with an aggregate of 21
thousand DWT. Amoco was also committed under long-term time
charters to three international flag tankers, totaling 240 thousand
DWT. An additional 350 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 3,200
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 1997, petroleum products sales volumes
averaged 1.2 million barrels per day in the United States, about
the same as in 1996. Gasoline sales increased five percent during
1997, and averaged 660,000 barrels per day for the year.
Distillates sales averaged 339,000 barrels per day, about eight
percent lower than in 1996.
U.S. sales volumes of petroleum products for the three years
ended December 31, 1997, are detailed below:
1997 1996 1995
(thousands of barrels per day)
United States:
Gasoline .............. 660 630 614
Distillates ........... 339 370 366
Other products ........ 204 201 191
Total ............... 1,203 1,201 1,171
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 ("PIA") 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 polyethylene, 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, home furnishings and
industrial uses such as civil engineering fabrics and bulk bags.
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. In 1997,
Amoco began operations at a carpet-backing plant in Gyor, Hungary.
Linear alpha-olefins and poly alpha-olefins are processed at a
plant in Feluy, Belgium.
In 1997, Amoco's PTA plant in Kuantan, Malaysia was expanded
by 100,000 metric tons in mid-year. Amoco's PTA joint-venture plant
in Indonesia was successfully started in September 1997. A 500,000
ton PTA unit in Mount Pleasant, South Carolina came onstream in
June 1997. Construction continues on a new 500,000 ton Geel,
Belgium PTA unit, which is scheduled to start in the second quarter
of 1998.
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 Indonesia; 50 percent in Taiwan; 35 percent in South
Korea; and 9 percent in Mexico. Amoco holds a 40 percent interest
in Singapore Aromatics Company, which operates an aromatic complex
that includes 350,000 tons of PX capacity.
The following table sets forth chemical segment revenues for
the three years ended December 31, 1997:
1997 1996 1995
(millions of dollars)
Chemical feedstocks ........ $ 1,230 $ 745 $ 704
Chemical intermediates ..... 2,607 2,533 2,622
Polymers ................... 980 938 890
Fabrics and fibers ......... 927 963 970
Foam products .............. -- 181 288
Other ...................... 646 409 243
Total worldwide .......... $ 6,390 $ 5,769 $ 5,717
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. One such venture, the Cantera development
west of Chicago, began occupancy in 1997 and will eventually
consist of nine million square feet of office, light-industrial,
and multi-family residential units. The project will also include
retail, hotel, and recreational developments.
Amoco conducts certain non-petrochemical technology
development through a separate operating subsidiary, Amoco
Technology Company. Currently, the operating company has interests
in two areas of major focus: photovoltaics (solar power) and
genomic disease management.
Amoco/Enron Solar, a partnership with Enron Corporation,
manufactures and markets semicrystalline and amorphous silicon
modules that produce electricity directly from sunlight, as well as
develops solar powered electric generation facilities.
Vysis, Inc. is a genomic disease management company that
develops, commercializes and markets clinical products that provide
information critical to the evaluation and management of cancer,
prenatal disorders and other genetic diseases. The company
currently markets five clinical products cleared by the Food and
Drug Administration, more than 240 research products, an integrated
line of genetic imaging workstations and other instruments for
cytogenetic analysis. In February 1998, Vysis, Inc. completed a
public offering of its common stock. Amoco retains a 69 percent
interest in this previously wholly owned venture.
Amoco has retained LaSalle Partners to handle the possible
sale of the Amoco Building in Chicago, Illinois, the headquarters
of Amoco.
Research
Research operations are conducted primarily at five research
locations. At Tulsa, Oklahoma, research activities are directed
toward new and improved methods for finding and producing crude oil
and natural gas. In 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,
and at Austell, Georgia, research and development activities focus
on extending and creating synthetic fabrics, fibers, yarns and
related processing equipment. Research and development in support
of genetic research and products is carried out at Downers Grove,
Illinois.
Expenditures for research and technology development
activities totaled $151 million in 1997, $171 million in 1996 and
$175 million in 1995. An average of 834, 854 and 1,000 professional
employees were engaged full-time in these activities during 1997,
1996 and 1995, respectively.
Employees
Amoco had 43,451 employees in its worldwide operations as of
December 31, 1997. Of this total, 32,726 were located in the United
States, with approximately 16 percent represented by various labor
organizations. The remaining 10,725 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. In 1997, Amoco was the largest
corporate producer of natural gas in the United States. Amoco
believes that it ranked sixth in crude oil and natural gas liquids
production in the United States in 1997. Amoco sells petroleum
products in 33 states and the District of Columbia. 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 6.7 million metric tons, including joint ventures.
Amoco is also the world's leading manufacturer of paraxylene with
annual production capacity of 2.1 million metric tons, including
joint ventures. Amoco has operations in approximately 30 countries.
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 crude 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
crude 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 0.12 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 0.1 cent per gallon of gasoline and certain
other fuels. Effective January 1, 1996 the Superfund tax expired.
However, part (4) the underground storage tank tax was reimposed
effective October 1, 1997, at the same rate and on the same fuels
as previously imposed. The other parts of the Superfund tax are
subject to reauthorization by Congress.
Safety, Health and Environmental Protection
Amoco facilities and products are subject to a large body of
national and local laws and regulations regarding protection of
human health, safety and the environment. The Corporation is
committed to safety, health and environmental stewardship, as
reflected in its policies and programs. An auditing program
periodically evaluates and assures the integrity and effectiveness
of safety, health and environmental management systems in use at
Amoco facilities and operations worldwide. The Amoco Crisis
Management system seeks to provide rapid and effective response in
the event of an emergency at Amoco operations.
Amoco's chemical and petroleum products are manufactured and
sold in compliance with numerous laws and regulations related to
product safety. The Corporation has a product stewardship program
to evaluate the safety, health and environmental aspects of its
products, to obtain necessary country-specific clearances for the
sale of products, and to provide information to employees and
customers on the safe and environmentally sound use of Amoco
products. Additionally, Amoco's refining and marketing operations
continue to adapt to current and future reformulated gasoline
requirements under clean air laws.
Amoco's operations face strict controls on release of
pollutants to the air, water, soil and ground water. Process
equipment and pollution control devices continue to be upgraded or
added to meet environmental standards. Waste handling and treatment
strategies are reviewed and adjusted to meet requirements for
environmental protection.
Remediation of contaminated sites under the Resources
Conservation and Recovery Act, the federal Superfund law, and
similar state laws is ongoing and will continue for the foreseeable
future. Existing and potential remediation obligations are
identified through an assessment program, and numerous projects are
under way to address the contamination found. The Corporation is
also subject to claims made for natural resource damages under
several federal laws.
In the future, new laws or regulations intended to address
global climate change could impact emission monitoring or reduction
requirements at Amoco operations and facilities. Such requirements
also might have impacts on manufacturing processes, product
formulation or product characteristics.
Amoco's 1997 capital expenditures for existing environmental
regulations totaled $89 million. In addition, Amoco spent $292
million for related operating costs and research and development,
and $59 million for mandated and voluntary remediation projects.
Remediation costs in 1998 are expected to approximate the 1997
level. Capital expenditures in the environmental area are expected
to be approximately $96 million in 1998. In 1999, approximately the
same level of environmental spending is expected.
Executive Officers of the Registrant
Certain information required by Item 10 with respect to
executive officers is incorporated by reference to pages 2-7 of
Amoco's Proxy Statement dated March 16, 1998. The following table
sets forth information concerning other executive officers of Amoco
as of March 1, 1998:
Served
as
Executive
Officer
Name Principal Occupation Age Since
John F. Campbell . Senior vice president, human 54 1998
resources
John L. Carl ..... Executive vice president and 50 1991
chief financial officer
James E. Fligg ... Senior executive vice president, 61 1991
strategic planning and
international business development
L. Richard Flury . Executive vice president, 50 1994
exploration and production sector
W. Douglas Ford .. Executive vice president, 54 1992
petroleum products sector
Enrique J. Sosa .. Executive vice president, 57 1995
chemicals sector
George S. Spindler Senior vice president, law and 60 1989
corporate affairs
David F. Work .... Senior vice president, shared 52 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.
John F. Campbell was appointed Senior Vice President, Human
Resources effective January 1, 1998 replacing R. Wayne Anderson.
From April 1996 through December 1997, John F. Campbell was the
Vice President of Human Resources for Corporate People Strategies.
He was named Vice President Corporate People Strategies and
Chemicals Sector HR Contact Executive in April 1997 and Vice
President Executive Resources and Chemicals Sector HR Contact
Executive in January 1995. Prior to that time, Mr. Campbell had
been General Manager Executive Resources since 1992 and progressed
through a series of Human Resources managerial positions between
1967 and 1992.
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.
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,
effective July 1, 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. In February
1991, W. Douglas Ford was named Executive Vice President of Amoco
Oil Company.
Enrique J. Sosa was appointed Executive Vice President,
Chemicals Sector, effective October 1, 1995. From 1990, Enrique J.
Sosa was Senior Vice President of Dow Chemical Company and
President of Dow North America.
David F. Work was appointed Senior Vice President, Shared
Services, effective January 1, 1996. David F. Work joined Amoco in
1970 and was Group Vice President of Worldwide Exploration for
Amoco Production Company from February 1992 to the effective date
of his current appointment.
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
Twelve 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 $7.25 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 appealed the Tax Court's
decision to the U.S. Court of Appeals for the Seventh Circuit, and
on March 11, 1998, the Seventh Circuit affirmed the Tax Court's
prior decision. 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, 1997.
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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.
Cash
Market Prices Dividends
High Low Per Share
1997
First quarter ..... $ 91 5/8 $ 80 1/4 $ .70
Second quarter .... $ 91 7/8 $ 79 1/4 $ .70
Third quarter ..... $ 99 $ 87 $ .70
Fourth quarter .... $ 98 3/8 $ 81 13/16 $ .70
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
Year-end 1997 and 1996 market prices were $85 1/8 and $80 1/2,
respectively.
Amoco had 134,029 shareholders of record at December 31, 1997.
The quarterly cash dividend was raised to 75 cents per share,
effective with the first quarter 1998 dividend.
Amoco declared a two-for-one split of each share of common
stock outstanding on March 31, 1998.
<PAGE>
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Item 6. Selected Financial Data
The following selected financial data, as it relates to the
years 1993 through 1997, have been derived from the consolidated
financial statements of Amoco, including the consolidated statement
of financial position at December 31, 1997 and 1996 and the related
consolidated statement of income and consolidated statement of cash
flows for the three years ended December 31, 1997, and the notes
thereto, appearing elsewhere herein.
1997 1996 1995 1994 1993
(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) $31,910 $32,150 $27,066 $26,048 $25,336
Net income .............. $ 2,720 $ 2,834 $ 1,862 $ 1,789 $ 1,820
Net income per share
(basic) ............... $ 5.55 $ 5.69 $ 3.76 $ 3.60 $ 3.66
Net income per share
(assuming dilution) ... $ 5.52 $ 5.67 $ 3.75 $ 3.57 $ 3.63
Cash dividends per share $ 2.80 $ 2.60 $ 2.40 $ 2.20 $ 2.20
Ratio of earnings to
fixed charges (*) ..... 9.1 10.3 6.9 8.9 8.0
Balance sheet data-At
December 31:
Total assets ............ $32,489 $32,100 $29,845 $29,316 $28,486
Long-term debt .......... $ 4,639 $ 4,153 $ 3,962 $ 4,387 $ 4,037
Shareholders' equity .... $16,319 $16,408 $14,848 $14,382 $13,665
Shareholders' equity per
share ................. $ 33.79 $ 33.00 $ 29.91 $ 28.97 $ 27.53
(*) 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
Highlights 1997 1996 1995
Net income (millions) ....... $ 2,720 $ 2,834 $ 1,862
Net income per share (basic). $ 5.55 $ 5.69 $ 3.76
Net income per share
(assuming dilution) ....... $ 5.52 $ 5.67 $ 3.75
Cash dividends per share .... $ 2.80 $ 2.60 $ 2.40
Return on average
shareholders' equity ...... 16.6% 18.1% 12.7%
Return on average
capital employed .......... 13.2% 13.8% 10.3%
Net income for 1997 was $2.7 billion, second only to record
1996 earnings of $2.8 billion, and $800 million above the $1.9
billion earned in 1995. Year-to-year comparisons of net income were
affected by significant unusual items summarized in the table
below.
incr.(decr.) net income 1997 1996 1995
(millions of dollars)
Net asset dispositions
and impairments ........... $ 271 $ 153 $ (297)
LIFO inventory .............. -- 90 --
Amoco's continued aggressive portfolio management in 1997
focused on investing in significant growth opportunities while
identifying non-strategic assets to be divested. Earnings in 1997
included $271 million of net gains from asset dispositions,
primarily the sale of non-core oil and gas properties in the United
States. Asset sales in the United States, including the sale of a
natural gas pipeline unit in Texas, generated proceeds of about
$1.2 billion. Additional sales of U.S. oil and gas properties are
expected to be completed in early 1998.
Included in 1996 earnings were gains of $97 million on the
sale of Amoco's polystyrene foam products business and $56 million
on the sale of certain Canadian oil and gas properties, and a $90
million gain from a reduction in last-in, first-out ("LIFO")
inventory levels. Earnings in 1995 included an $83 million gain on
the sale of Amoco Motor Club; non-cash charges of $380 million
associated with asset impairments reduced 1995's income.
Excluding these unusual items for all periods, 1997 earnings
of $2,449 million were five percent below 1996 earnings of $2,591
million, but were 13 percent above 1995 earnings of $2,159 million.
Earnings in 1997 benefited from higher natural gas prices and
improved refining operations and petroleum product sales margins.
Also benefiting 1997 results were continued efficiencies accruing
from Amoco's Shared Services operations. Adversely affecting 1997
earnings were lower crude oil prices and lower production volumes.
Chemical earnings were below 1996 levels, as excess industry
capacity put downward pressure on sales prices and margins,
especially for paraxylene ("PX"). Higher corporate expenses
reflecting increased interest expense, adverse currency effects and
revised estimates of tax obligations, also contributed to the
decline.
Sales and other operating revenues totaled $32 billion for
1997, about the same as in 1996. Natural gas revenues increased
five percent primarily as the result of higher prices. Chemical
revenues increased by seven percent, as higher sales volumes
associated with capacity additions and acquisitions more than
offset lower prices. Refined product and crude oil revenues
declined four percent and six percent, respectively, mainly
reflecting lower prices.
Equity in income of affiliates and other income of $926
million in 1997 was $350 million above 1996, primarily reflecting
the gain on U.S. non-core exploration and production ("E&P")
property dispositions.
Total costs and expenses on a worldwide basis totaled $33
billion, a slight increase from 1996. Operating expenses increased
eight percent primarily resulting from higher refinery maintenance
costs and costs associated with the start-up of production in
Venezuela and Bolivia, increased activity in Trinidad and higher
maintenance costs related to operations in the North Sea and the
United States. Interest expense increased $209 million in 1997,
reflecting an increase in long-term debt, as well as interest
expense associated with revised estimates of tax obligations. Lower
selling and administrative expenses, exploration expenses and costs
for purchased materials and products were partly offsetting. Net
income also benefited from favorable prior-year tax adjustments.
Industry Segments
In 1997, Amoco changed the basis upon which operations are
grouped for the purpose of business segment reporting to maintain
alignment with changes made in its internal structure. Canadian
supply and marketing operations for crude oil, sulfur and natural
gas liquids ("NGL") are now included in the petroleum products
segment. Previously, those businesses were reported in the Canadian
E&P segment. Segment earnings for prior years have been restated to
conform to the new basis.
Results on a segment basis, for the five years ended December
31, 1997, are presented in the table below:
Consolidated Results on a Segment Basis
1997 1996 1995 1994 1993
(millions of dollars)
Exploration and production
United States .......... $1,447 $1,132 $ 463 $ 820 $ 826
Canada ................. 195 201 (102) 113 347
Europe ................. 145 118 88 (65) (102)
Other .................. 193 333 245 76 (48)
Subtotal ............. 1,980 1,784 694 944 1,023
Petroleum products ....... 587 528 491 496 815
Chemicals ................ 493 735 963 485 222
Corporate and other
operations* ............ (340) (213) (286) (136) (240)
Net income ........... $2,720 $2,834 $1,862 $1,789 $1,820
*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.
Exploration and Production
Worldwide
Exploration and Production earnings totaled $1.6 billion in
1997, excluding net gains of $352 million associated with the
disposition of non-strategic properties, compared with earnings of
$1.8 billion in 1996. Higher worldwide natural gas prices favorably
affected 1997 results. More than offsetting this favorable factor
were lower crude oil and NGL prices and a decline in North American
crude oil and natural gas production, due to normal field declines
and dispositions.
Worldwide, Amoco produced 637,000 barrels per day of crude oil
and NGL and 4.1 billion cubic feet ("bcf") per day of natural gas.
Production declined the equivalent of 65,000 barrels per day from
1996, reflecting normal field declines and dispositions, primarily
in the United States. The production decline was mitigated by
incremental or new production in Colombia, Venezuela, Argentina and
Bolivia. These new areas along with production in Azerbaijan are
projected to add about 50,000 oil-equivalent barrels per day to
1998 production.
In 1997, Amoco replaced 178 percent of its production
(excluding ownership changes) with new reserves. This was the fifth
consecutive year in which reserve additions, (improved recovery,
discoveries and revisions) exceeded production. Exploration
activities focused on 20 countries in 1997. Amoco's worldwide
exploration drilling success rate was 48 percent. Success in recent
years came from a combination of new technology, such as 3-D
seismic imaging -- utilized over the past few years -- and
concentrating on selected countries.
United States
United States E&P operations earned $1.4 billion in 1997.
Excluding gains of $329 million related to non-core property
dispositions, 1997 earnings of $1,118 million were comparable with
1996 earnings of $1,132 million. Higher natural gas prices and
lower exploration expenses of $41 million before tax favorably
affected 1997 results. These favorable factors were offset by lower
crude oil prices and production volumes.
Amoco's average U.S. natural gas prices of $2.15 per thousand
cubic feet ("mcf") in 1997 increased $.22 per mcf from 1996.
Amoco's U.S. crude oil prices averaged $18.47 per barrel, down over
$1.70 per barrel from 1996, reflecting the effect of more than
adequate crude oil supplies.
U.S. natural gas production averaged 2.4 bcf per day in 1997,
down eight percent from 1996. Crude oil and NGL production averaged
274,000 barrels per day, also down eight percent from 1996. The
decline in production resulted from normal field declines and
property dispositions.
Canada
Canadian E&P operations earned $195 million in 1997, compared
with earnings of $201 million in 1996. A gain of $56 million on
asset dispositions, including Amoco's remaining investment in
Crestar Energy Inc., benefited 1996 earnings. Higher natural gas
prices and a gain on the sale of Amoco's arctic drilling unit of
$35 million impacted 1997 earnings.
Amoco's 1997 Canadian natural gas prices averaged $1.38 per
mcf, $.23 per mcf over 1996 levels. Crude oil prices of $14.19 per
barrel in 1997 were down $3.54 per barrel, reflecting lower
industry prices and increased heavy-oil production.
Amoco's Canadian natural gas production of 761 million cubic
feet ("mmcf") per day in 1997 declined seven percent from 1996
levels due to normal field declines and property dispositions.
Crude oil and NGL production averaged 61,000 barrels per day, the
same as in 1996, as increased heavy-oil production offset normal
field declines and dispositions. In 1997, heavy-oil production
averaged 28,000 barrels per day, up from 20,000 barrels per day in
1996.
Overseas
European exploration and production operations earned $145
million in 1997, $27 million higher than the $118 million earned in
1996. The increase in 1997 earnings primarily reflected higher
crude oil and natural gas production, higher natural gas prices and
a gain on a property disposition. Partly offsetting these factors
were lower crude oil prices, higher exploration expenses of $18
million before tax and higher operating expenses.
Exploration and production operations in other overseas areas
earned $193 million in 1997, down from the $333 million earned in
1996. Higher operating expenses, mainly reflecting start-up of
production and increased maintenance costs, and lower crude oil
prices and production, more than offset increased natural gas
prices and production.
Overseas crude oil and NGL production averaged 302,000 barrels
a day, a slight decline from 1996, primarily reflecting lower
production in China and Egypt. Partly offsetting the decline was
new production in Venezuela and Bolivia and increases in Norway and
the United Kingdom. Natural gas production increased two percent to
1,013 mmcf per day, primarily from new production in Argentina and
Bolivia.
Petroleum Products
Petroleum products operations earned $587 million in 1997,
compared with earnings of $528 million in 1996. The drawdown of
inventories valued under the LIFO method benefited operations in
1996 by $90 million. Adjusting for that item, 1997 earnings were
$149 million higher than 1996 earnings of $438 million, reflecting
improved refinery operations and higher U.S. refined product
margins and volumes. Refined product margins increased 2.4 cents-
per-gallon during 1997 as declining crude oil costs more than
offset the 2.5 cents-per-gallon decline in the average selling
prices.
Petroleum product sales volumes averaged 1.4 million barrels
per day in 1997, about the same as 1996. Gasoline sales averaged
660,000 barrels per day, an increase of five percent, in response
to new and aggressive marketing initiatives. Distillate sales
volumes averaged 339,000 barrels per day. The refinery utilization
rate averaged 93 percent of rated capacity in 1997, compared with
95 percent in 1996, primarily reflecting planned maintenance on a
major crude processing unit. The refinery yield rate was at 107.0
percent in 1997, the same as in 1996.
Chemicals
Chemical operations earned $493 million in 1997, compared with
1996 earnings of $735 million. Charges related to the anticipated
disposition of certain non-core chemical operations lowered 1997
earnings by $81 million, while 1996 earnings included a gain of $97
million from the sale of Amoco's polystyrene foam products
business.
Adjusting both years for these items, 1997 earnings of $574
million were ten percent lower than 1996. The lower earnings in
1997 mainly reflected a decline in PX margins and the absence of
foreign investment incentives. Partially offsetting were increases
in purified terephthalic acid ("PTA") and PX sales volumes,
reflecting capacity additions, and higher olefins margins. In 1997,
produced volumes for PX increased about 30 percent; polypropylene
sales volumes were up 11 percent; and PTA sales volumes increased
23 percent. Overall, chemicals' capacity utilization rates averaged
93 percent in 1997 and 94 percent in 1996.
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 $340 million in
1997, compared with net expenses of $213 million in 1996. The
increase in corporate and other operations expenses primarily
reflected an increase in interest expense resulting from higher
corporate debt balances, revised estimates of tax obligations,
including associated interest expense, and adverse currency effects
of $38 million.
1996 vs. 1995
Excluding unusual items, 1996 earnings of $2,591 million
increased 20 percent over 1995 earnings of $2,159 million. Higher
crude oil and natural gas prices and an increase in worldwide
natural gas production contributed to the improvement. Offsetting
those favorable items were lower chemical and petroleum product
earnings resulting from lower margins.
U.S. exploration and production operations earned $1.1 billion
in 1996 compared with $463 million in 1995. After-tax charges of
$234 million for impairment of crude oil and natural gas producing
properties were included in 1995 earnings. Excluding that item,
1996 earnings increased by $435 million, mainly reflecting a 43
percent increase in Amoco's average natural gas prices and a 26
percent increase in Amoco's average crude oil prices.
Earnings outside the United States for exploration and
production operations were $652 million, an increase of $421
million over 1995. The improvement in earnings primarily reflected
higher crude oil and natural gas prices and higher natural gas
production volumes. Included in the 1996 results were gains on the
sale of assets of $56 million. Included in 1995 earnings were
impairment charges of $93 million.
In 1996, petroleum products earnings of $528 million compared
with earnings of $491 million for 1995. The drawdown of inventories
valued under the LIFO method benefited 1996 results by $90 million.
Included in 1995 earnings were an after-tax gain of $83 million
from an asset sale and an after-tax impairment charge of $11
million. Adjusting both years, 1996 adjusted earnings were $438
million compared with $419 million for 1995.
The slight increase in petroleum products earnings reflected
higher Canadian supply and marketing earnings, higher sales volumes
and a gain on an asset sale. Offsetting these factors were lower
refining margins and higher expenses related to international
business development. In late 1996, Amoco decided to sell its
retail outlets in Central Europe as part of the Corporation's
strategy to concentrate on retail marketing operations in North
America. The Corporation completed the sale of those facilities in
1997.
In 1996, chemical operations earned $735 million compared with
1995 earnings of $963 million. Included in 1996 earnings was a gain
of $97 million from the sale of Amoco's polystyrene foam products
business. Included in 1995 earnings were charges of $42 million
related to the impairment of specialty polymer facilities. After
adjusting for special items, 1996 earnings of $638 million were 37
percent lower than adjusted 1995 earnings.
The decrease in chemicals earnings was primarily related to a
sharp drop in margins for major product lines and the impact from
industrywide inventory "destocking" of PTA and PX. Partially
offsetting those factors were increases in sales volumes,
reflecting capacity additions and acquisitions, and investment
incentives.
The decrease in corporate and other operations net expenses to
$213 million in 1996 from $286 million in 1995 resulted from lower
interest expense associated with revised estimates of tax
obligations, and a gain on an asset disposition.
Outlook
The volatility of crude oil, natural gas and refined product
prices, and the overall product supply/demand balance of the
petrochemical industry will continue to affect Amoco's
profitability. While refining margins strengthened during 1997,
over the long term Amoco anticipates refining margins being under
pressure in a very competitive U.S. market. Uncertainty in world
markets, particularly in Asia, new governmental regulation and
technological advances add to the significant challenges that must
be addressed and successfully managed by Amoco.
Amoco believes it has the structure and resources to allow it
to achieve improvements in profitability and growth of its
businesses through intensive portfolio management. Amoco also
expects to continue to benefit from ongoing cost reduction
programs. Efficiency gains are expected through development of new
work processes, alliances, joint ventures, strategic acquisitions
and divestments and increased volume growth in its operations.
Amoco's worldwide barrel-oil-equivalent production is expected
to increase from 1996 levels by 25 percent by the year 2001, with
the largest increases expected to occur in the later years.
Significant contributions are anticipated from the deepwater Gulf
of Mexico, Trinidad, Venezuela, Colombia, Argentina, Bolivia,
Egypt, and the Caspian Basin.
In late 1997, Amoco and Bridas Corporation formed Pan American
Energy LLC ("Pan American"), which created one of the largest
producers of crude oil and natural gas in Argentina. In Bolivia,
Amoco acquired an interest and assumed operatorship of the new
Bolivian company, Empresa Petrolera Chaco S.A. ("Chaco").
Earlier in 1997, Altura Energy Ltd. was established to operate
the combined oil and gas producing properties of Amoco and Shell
Oil Company in west Texas and southeast New Mexico. Amoco has a 64
percent interest in the venture. Amoco also formed a limited
partnership with YPF S.A., called Crescendo Resources L.P., to
manage about one trillion cubic feet of natural gas reserves in the
Texas Panhandle and western Oklahoma.
In petroleum products, a key to Amoco's improved performance
in its refining operations is a new approach and organization that
is enhancing revenues and improving refinery utilization
simultaneously. This has led to aggressive changes in three key
work areas: planning and scheduling, control and optimization, and
asset management. Amoco has already seen benefits during 1997, and
expects further improvements in the future.
Amoco's marketing strategy will continue to emphasize brand
product quality and growth in its position as a convenience
retailer, with the objective of increasing gasoline volumes an
average of four percent per year over the long term. The new
convenience store format, Split Second, has the potential to
increase site profits compared with traditional food shops. Amoco
also has a renewed commitment to the service bay, called Certicare,
which has the potential for growth. Strategic marketing alliances
with such companies as McDonald's Corporation and Fomento Economico
Mexicano S.A. de C.V. in Mexico are expected to continue.
In chemicals, Amoco's overall strategy is to manage its
portfolio to maximize existing business value by stronger
functional excellence, increased market focus and more efficient
management of opportunities. Amoco is in the process of selectively
increasing capacities within its chemical portfolio. While current
industry excess PTA capacity is putting downside pressure on
margins, long-term worldwide annual growth is expected to be eight
percent. PX long-term annual growth is expected to be seven
percent. In order to meet expected growth in PTA and PX, Amoco is
expanding its wholly owned and joint-venture operations. A 500,000
ton PTA unit at the Corporation's plant in Geel, Belgium, is
expected to be completed in 1998, while a new 420,000 ton PX unit
at the same location is scheduled for mechanical completion in late
1999.
In the specialty chemical area, Amoco's dimethyl-2,6-
naphthalene dicarboxylate ("NDC") plant in Decatur, Ala., achieved
full-scale production capacity of 27,000 tons per year in the third
quarter of 1997. Amoco is planning expansion of this facility to
between 40,000 and 50,000 tons by 2000.
Amoco is also expanding its polypropylene capacity, adding a
250,000 ton unit at its existing plant near Alvin, Texas. Alpha-
olefins capacity is being expanded by 100,000 tons at a plant in
Belgium.
Liquidity and Capital Resources
In 1997, cash flow from operating activities totaled $4.6
billion, compared with $4.8 billion in 1996.
Total short- and long-term debt was $5.6 billion at year-end
1997, compared with $5.1 billion at year-end 1996. Debt as a
percent of debt-plus-equity was 25.4 percent at December 31, 1997,
up from 23.6 percent at year-end 1996, reflecting new borrowings
undertaken during the year.
Working capital was $1.0 billion at year-end 1997, compared
with $924 million at year-end 1996. At year-end 1997, the
Corporation's current ratio was 1.17 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 1997 totaled $1.4 billion, or $2.80 per
share, compared to $1.3 billion, or $2.60 per share in 1996. The
quarterly cash dividend was raised to 75 cents per share, effective
with the first-quarter 1998 dividend, an increase of 5 cents per
share, or seven percent. The cash dividend has been raised 20 cents
per share each year from 1994 through 1998, an increase of 36
percent over the period. Amoco also declared a two-for-one split of
each share of common stock outstanding on March 31, 1998.
As of December 31, 1997, Amoco completed $1.2 billion of the
previously announced $2 billion, two-year common stock repurchase
program, representing 13.4 million common shares. Amoco plans to
complete the repurchase program during 1998. Stock repurchased
under the program was in addition to shares purchased for benefit
plan purposes.
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, 1997, 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. During
1997, Amoco Company issued $300 million of 10-year, 6.5% guaranteed
notes and $200 million of seven-year, 6.25% guaranteed notes. A
$500 million shelf registration for debt securities is on file with
the Securities and Exchange Commission to permit ready access to
capital markets.
With the 21st century approaching, Amoco has been addressing
the issue of adapting its computer systems to process information
in the year 2000 and beyond. As part of the Corporation's renewal
process, Amoco has been implementing new systems and upgrading its
computer technology. In addition, Amoco has reviewed its
information and process control systems, as well as other
electronic control systems, to identify all critical equipment and
software that will need to be altered or replaced to be prepared
for the year 2000. The upgrading of these systems for the year 2000
is under way, and will occur primarily during the three years
ending in December 1999. Incremental costs related to the year 2000
issue, beyond the Corporation's normal level of systems renewal or
spending primarily designed to provide increased functionality
unrelated to the year 2000, are expected to reduce income by about
$55 million before tax in 1998, and by about $100 million over the
three-year period.
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. See Notes 1 and
4 to the Consolidated Financial Statements and Supplemental
Information, "Market Risks and Derivative Instruments."
Environmental protection and remediation costs
The Corporation has provided in its accounts for reasonably
estimable future costs of probable environmental remediation
obligations. These amounts relate to various refining and marketing
sites, chemical locations, and crude oil and natural gas
operations, including multi-party sites where 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 22 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 anticipated recovery from claims under prior or current
insurance coverage.
At December 31, 1997, the Corporation's reserves for future
environmental remediation costs totaled $510 million, of which $310
million was related to refining and marketing sites. The
Corporation also maintains reserves associated with dismantlement,
restoration and abandonment of crude oil and natural gas
properties, which totaled $666 million at December 31, 1997.
Capital expenditures resulting from existing environmental
regulations, primarily related to refining, marketing and chemicals
sites totaled $89 million in 1997. Excluded from that total were
$292 million for operating costs and amounts spent on research and
development, and $59 million of mandated and voluntary remediation
spending. Amoco's 1998 estimated capital spending for environmental
cleanup and protection projects is expected to be approximately $96
million; spending for remediation in 1998 is expected to
approximate the 1997 level.
Capital and exploration expenditures
Spending in 1997 totaled $3.9 billion, a decrease of 15
percent from the $4.6 billion spent in 1996. The 1997 spending
excludes Amoco's investments in affiliates, including Pan American
and Chaco. Expenditures in 1997 included E&P spending associated
with construction of facilities in Trinidad, Venezuela, Colombia
and the Gulf of Mexico and continuation of programs in Egypt and
the North Sea. Chemical spending in 1997 related to expansions and
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 $4.2 billion have been
approved for 1998. Approximately 60 percent of total E&P spending
of $2.7 billion is planned for locations outside the United States.
Targeted growth areas include the Caspian Basin, Trinidad, Egypt's
Nile Delta, Venezuela, Argentina, Bolivia, West Africa and the
deepwater Gulf of Mexico. Chemicals expenditures in 1998 are
expected to be approximately $750 million for the completion of
expansions currently under way and new facilities in Belgium and
the United States. The capital and exploration expenditures budget
for 1998 excludes any new investments in affiliates, and the
Corporation's share of affiliate spending.
It is anticipated that the 1998 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.
Capital and Exploration Expenditures
1997 1996 1995 1994 1993
(millions of dollars)
Exploration and
production
United States ..... $ 876 $1,196 $1,146 $ 829 $ 672
Canada ............ 393 408 384 408 314
Europe ............ 503 558 491 279 493
Other ............. 942 858 654 687 682
Subtotal ........ 2,714 3,020 2,675 2,203 2,161
Petroleum products .... 455 500 500 465 730
Chemicals ............. 652 985 850 467 369
Corporate and other
operations .......... 122 116 111 70 86
Total ........... $3,943 $4,621 $4,136 $3,205 $3,346
Petroleum exploration
expenditures charged to
income (included above)
United States ..... $ 101 $ 142 $ 152 $ 113 $ 90
Canada ............ 69 68 112 117 47
Europe ............ 159 141 123 178 151
Other ............. 270 265 223 225 241
Total ........... $ 599 $ 616 $ 610 $ 633 $ 529
1997 excludes about $200 million of Amoco's share of affiliates'
spending.
1993 through 1996 restated; see "Industry Segments."
"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, demand and
pricing, political stability and economic growth in relevant areas
of the world, the Corporation's successful execution of its
internal performance plans, development and use of new technology,
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 ....................... 41
Consolidated Financial Statements:
Consolidated Statement of Income ...................... 42
Consolidated Statement of Financial Position .......... 43
Consolidated Statement of Shareholders' Equity......... 44
Consolidated Statement of Cash Flows .................. 45
Notes to Consolidated Financial Statements ............ 46
Financial Statement Schedule:
Valuation and Qualifying Accounts (Schedule II) ..... 99
Supplemental Information:
Oil and Gas Exploration and Production Activities ..... 77
Quarterly Results and Stock Market Data ............... 88
Market Risks and Derivative Instruments ............... 89
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, 1997 and 1996, and the results of their operations and
their cash flows for each of the three years in the period ended
December 31, 1997, 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 2 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 24, 1998
<PAGE>
<PAGE>
AMOCO CORPORATION AND SUBSIDIARIES
___________________________
CONSOLIDATED STATEMENT OF INCOME
Year Ended December 31
1997 1996 1995
(millions of dollars,
except as noted)
Revenues:
Sales and other operating revenues .... $31,910 $32,150 $27,066
Consumer excise taxes ................. 3,451 3,386 3,339
Equity income in affiliates and
other income ........................ 926 576 599
Total revenues ...................... 36,287 36,112 31,004
Costs and expenses:
Purchased crude oil, natural gas,
petroleum products and merchandise .. 17,735 17,942 14,140
Operating expenses .................... 5,009 4,642 4,555
Petroleum exploration expenses,
including exploratory dry holes ..... 599 616 610
Selling and administrative expenses ... 2,172 2,246 2,124
Taxes other than income taxes ......... 4,222 4,215 4,042
Depreciation, depletion, amortization,
and retirements and abandonments .... 2,373 2,294 2,794
Interest expense ...................... 401 192 335
Total costs and expenses ............ 32,511 32,147 28,600
Income before income taxes ............ 3,776 3,965 2,404
Income taxes .......................... 1,056 1,131 542
Net income ............................ $ 2,720 $ 2,834 $ 1,862
Net income per share
Basic ............................... $ 5.55 $ 5.69 $ 3.76
Assuming dilution ................... $ 5.52 $ 5.67 $ 3.75
Average common shares outstanding
(millions)
Basic ............................... 490 497 495
Assuming dilution ................... 493 499 497
After stock split (Unaudited)
Net income per share
Basic ............................... $ 2.77 $ 2.84 $ 1.88
Assuming dilution ................... $ 2.76 $ 2.83 $ 1.87
Average common shares outstanding
(millions)
Basic ............................... 980 994 $ 991
Assuming dilution ................... 986 998 994
(The accompanying notes are an integral part of these statements.)
<PAGE>
<PAGE>
AMOCO CORPORATION AND SUBSIDIARIES
___________________________
CONSOLIDATED STATEMENT OF FINANCIAL POSITION
December 31
1997 1996
ASSETS (millions of dollars)
Current Assets:
Cash ............................................ $ 166 $ 186
Marketable securities--at cost (all corporate,
except $104 on December 31, 1997, and $141 on
December 31, 1996, which represent state and
municipal securities) ......................... 979 1,135
Accounts and notes receivable (less allowances
of $10 on December 31, 1997, and $17 on
December 31, 1996) ............................ 3,585 3,942
Inventories ..................................... 1,174 1,069
Prepaid expenses, and income taxes and other .... 1,140 731
7,044 7,063
Investments and other assets:
Investments and related advances .............. 2,099 796
Long-term receivables and other assets ........ 803 841
2,902 1,637
Properties--at cost, less accumulated
depreciation, depletion and amortization of
$26,814 on December 31, 1997, and $27,111 on
December 31, 1996 ............................. 22,543 23,400
$32,489 $32,100
LIABILITIES AND SHAREHOLDERS' EQUITY
Current liabilities:
Current portion of long-term obligations......... $ 218 $ 151
Short-term obligations .......................... 751 821
Accounts payable ................................ 3,026 3,196
Accrued liabilities ............................. 785 908
Taxes payable (including income taxes) .......... 1,264 1,063
6,044 6,139
Long-term obligations:
Debt ............................................ 4,639 4,153
Capitalized leases .............................. 80 76
4,719 4,229
Deferred credits and other non-current liabilities:
Income taxes .................................... 2,868 2,850
Other ........................................... 2,408 2,345
5,276 5,195
Minority interest ................................. 131 129
Shareholders' equity:
Common stock (authorized 800,000,000 shares;
issued and outstanding as of December 31, 1997-
483,023,808 shares; December 31, 1996--
497,275,364 shares) ........................... 2,568 2,646
Earnings retained and invested in the business .. 13,900 13,806
Pension liability adjustment .................... (31) (25)
Foreign currency translation adjustment ......... (118) (19)
Total shareholders' equity .................... 16,319 16,408
$32,489 $32,100
(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 as noted)
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
Net income ............... 2,720 2,720
Cash dividends of $2.80
per share .............. (1,382) (1,382)
Foreign currency
translation adjustment . (99) (99)
Pension liability
adjustment ............. (6) (6)
Acquisitions of common
stock(net) ............. (78) (1,244) (1,322)
Balance on December 31, 1997 $2,568 $13,900 $(149) $16,319
(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
1997 1996 1995
(millions of dollars)
Cash flows from operating activities:
Net income ......................... $ 2,720 $ 2,834 $ 1,862
Adjustments to reconcile net
income to net cash provided
by operating activities:
Depreciation, depletion,
amortization, and retirements
and abandonments ............... 2,373 2,294 2,794
Decrease (increase)in receivables 269 (661) (33)
(Increase)decrease in inventories (117) 4 1
(Decrease)increase in payables and
accrued liabilities ............ (63) 608 31
Gain on sale of assets ........... (645) (220) (221)
Deferred taxes and other items ... 108 (71) (625)
Net cash provided by operating
activities ..................... 4,645 4,788 3,809
Cash flows from investing activities:
Capital expenditures ............. (3,344) (3,910) (3,526)
Proceeds from dispositions of
property and other assets ...... 1,617 475 290
New investments, advances and
business acquisitions .......... (1,154) (721) (173)
Proceeds from sales of investments 21 521 20
Other ............................ 59 20 81
Net cash used in investing
activities ..................... (2,801) (3,615) (3,308)
Cash flows from financing activities:
New long-term obligations ........ 1,028 362 661
Repayment of long-term obligations (274) (427) (309)
Cash dividends paid .............. (1,382) (1,287) (1,197)
Issuances of common stock ........ 100 59 42
Acquisitions of common stock ..... (1,422) (39) (704)
Issuance of minority interest
preferred stock ................ -- -- 100
(Decrease) increase in short-term
obligations .................... (70) 86 511
Net cash used in financing
activities ..................... (2,020) (1,246) (896)
Decrease in cash and marketable
securities ....................... (176) (73) (395)
Cash and marketable securities-
beginning of year .................. 1,321 1,394 1,789
Cash and marketable securities-
end of year ........................ $ 1,145 $ 1,321 $ 1,394
(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 assets, liabilities and
results of operations of subsidiaries in which the Corporation has
a controlling interest are included in the Consolidated Financial
Statements. The Corporation also consolidates its proportionate
share of the accounts of undivided interest pipelines and certain
oil and gas joint ventures. Investments in companies in which less
than a controlling 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.
<PAGE>
<PAGE>
AMOCO CORPORATION AND SUBSIDIARIES
___________________________
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued)
The portion of costs of unproved oil and gas properties
estimated to be non-productive is amortized over projected holding
periods.
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 discounted 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.
<PAGE>
<PAGE>
AMOCO CORPORATION AND SUBSIDIARIES
___________________________
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued)
Net income per share. Basic net income per share of common
stock is based on the monthly weighted average number of shares
outstanding during the year. Diluted net income per share reflects
the potential dilution from the exercise of stock options.
Securities that could potentially dilute basic net income per share
in the future are immaterial.
Note 2. Acquisitions, Dispositions and Special Items
In 1997, proceeds from dispositions included approximately
$1.2 billion from the sale of U.S. non-core oil and gas properties
and an intrastate natural gas pipeline unit in Texas. These sales
were part of the Corporation's strategy to upgrade and refocus the
U.S. portfolio of E&P assets. Other income included related gains
on property dispositions, which increased after-tax earnings by
$377 million. Other current assets include properties held for sale
with a net book value of $312 million.
In 1997, new investments included approximately $865 million
in cash for interests in Pan American Energy LLC in Argentina and
Empresa Petrolera Chaco in Bolivia.
Depreciation, depletion, amortization, and retirements and
abandonments for 1997 included charges of $133 million ($106
million after tax), primarily related to the anticipated sale or
other disposition of certain non-core chemical operations. During
1997 these assets generated net income of $9 million on a carrying
value of $339 million, before the impairment charge.
In 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).
In 1995, the Corporation adopted 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 $602 million ($380
million after tax) for the impairment of long-lived assets. The
charge was primarily related to oil and gas producing properties in
North America (about $300 million after tax), which were acquired
or developed during periods of higher prices, and
<PAGE>
<PAGE>
AMOCO CORPORATION AND SUBSIDIARIES
___________________________
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued)
certain unprofitable specialty polymer production facilities ($42
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.
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.
Net cash provided by operating activities reflects cash
payments for interest and income taxes as follows:
1997 1996 1995
(millions of dollars)
Interest paid ......... $362 $343 $327
Income taxes paid ..... $913 $951 $706
Excluded from the Consolidated Statement of Cash Flows for
1997 were the following effects of non-cash investing and financing
activities related to investments in Argentina and Bolivia:
(millions of dollars)
Non-cash assets and liabilities contributed:
-- Properties .............................. $ 400
-- Working capital and other assets ........ 42
442
-- Long-term debt and liabilities .......... 208
Net assets contributed ....................... 234
Cash portion of new investments .............. 865
New investments .............................. $1,099
<PAGE>
<PAGE>
AMOCO CORPORATION AND SUBSIDIARIES
___________________________
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued)
Note 4. Financial Instruments and Hedging Activities
In the normal course of business, Amoco holds or issues
various financial instruments which expose the Corporation 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. Substantially 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, 1997 and 1996 was $4,909
million and $4,301 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 and the countries in which Amoco and its
customers operate, 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.
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, 1997 and 1996, and the face amounts
of foreign currency forward contracts that have been designated as
hedges:
<PAGE>
<PAGE>
AMOCO CORPORATION AND SUBSIDIARIES
___________________________
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued)
1997 1996
Debt Hedge* Debt Hedge*
(millions of U.S. dollars)
British pound sterling $ 624 $ 935 $ 652 $ 954
Canadian dollar ...... $ 216 $ 224 $ 276 $ 281
* Includes tax effects.
The hedge contracts generally have maturities that match the
risks being hedged. The carrying value and fair value of the
forward contracts were not material at December 31, 1997 and 1996.
Commodity price risks. The Corporation 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.
Futures contracts are used to convert specific gasoline and
distillate contracts from fixed to market prices.
Natural gas swap contracts outstanding under these programs at
December 31, 1997 and 1996 totaled 368 trillion British thermal
units ("Btus") and 334 trillion Btus, respectively. Most contracts
are for a remaining term of less than one year, while contracts
representing 29 trillion Btus of natural gas have terms that extend
from one to three 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 1997,
was $20 million for contracts with favorable positions, and $20
million for contracts with unfavorable positions. The comparable
amounts for 1996 were $28 million for contracts with favorable
positions and $19 million for contracts with unfavorable positions.
At December 31, 1997, the Corporation also had fixed the sales
price or a range of prices of 4 million barrels of crude oil and 6
trillion Btus of natural gas production for periods of less than
one year using forward swaps. There were no significant unrealized
gains or losses on these contracts at December 31, 1997.
<PAGE>
<PAGE>
AMOCO CORPORATION AND SUBSIDIARIES
___________________________
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued)
Commitments and guarantees. At December 31, 1997, the
remaining minimum payments required under certain contracts for the
purchase of transportation capacity, materials and services over
terms of up to 20 years totaled $328 million. Contingent
liabilities of the Corporation included guarantees of $312 million
of outstanding loans of equity affiliates as described in Note 6,
and guarantees of $37 million on outstanding loans of others.
Note 5. Inventories
Inventories at December 31, 1997 and 1996, are shown in the
following table:
December 31
1997 1996
(millions of dollars)
Crude oil and petroleum products ....... $ 407 $ 315
Chemical products ...................... 485 465
Other products and merchandise ......... 22 15
Materials and supplies ................. 260 274
Total ............................. $ 1,174 $ 1,069
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 55 percent of total year-end inventory carrying
values in 1997 and 48 percent in 1996. It is estimated that
inventories would have been approximately $800 million and $1,400
million higher than reported on December 31, 1997 and 1996,
respectively, if the quantities valued on the LIFO basis were
instead valued at current prices.
<PAGE>
<PAGE>
AMOCO CORPORATION AND SUBSIDIARIES
___________________________
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued)
Note 6. Equity Investments
Amoco conducts portions of its business through investments in
companies accounted for using the equity method. The equity
affiliates are primarily engaged in exploration and production in
the recently established ventures in Argentina and Bolivia,
transportation of crude oil and petroleum products in the United
States and chemical operations in Asia. Following is summarized
financial information for Amoco's equity affiliates combined, as
well as Amoco's proportionate interest in the affiliates:
1997 1996 1995
Amoco Amoco Amoco
Total Share Total Share Total Share
(millions of dollars)
Current assets .... $1,319 $ 536 $ 856 $ 310 $1,002 $ 380
Other assets ...... 8,348 3,455 4,032 1,363 3,905 1,080
Current liabilities 1,154 454 783 246 940 311
Other liabilities . 3,725 1,518 2,291 685 2,275 545
Net assets ........ $4,788 $2,019 $1,814 $ 742 $1,692 $ 604
Total revenues .... $2,754 $ 989 $2,658 $ 950 $2,973 $1,110
Income before
income taxes ..... $ 378 $ 79 $ 512 $ 130 $ 712 $ 232
Net income ........ $ 152 $ 24 $ 463 $ 144 $ 491 $ 170
Dividends received from these investments amounted to $70
million in 1997, $136 million in 1996 and $101 million in 1995.
Amoco's share of undistributed earnings of the equity affiliates
totaled $208 million at December 31, 1997.
Accounts and notes receivable in the Consolidated Statement of
Financial Position included $44 million and $26 million at December
31, 1997 and 1996, respectively, of amounts due from affiliated
companies. Accounts payable included $6 million and $4 million at
December 31, 1997 and 1996, respectively, of amounts due to
affiliated companies.
<PAGE>
<PAGE>
AMOCO CORPORATION AND SUBSIDIARIES
___________________________
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued)
Note 7. Property, Plant and Equipment
Investment in properties at December 31, 1997 and 1996,
detailed by industry segment, was as follows:
1997 1996
Gross Net Net
(millions of dollars)
Exploration and production:
United States ........... $14,872 $ 6,328 $ 7,032
Non-U.S. ................ 14,487 5,426 5,464
Petroleum products ........ 10,656 5,418 5,564
Chemicals ................. 7,801 4,554 4,477
Corporate and other
operations .............. 1,541 817 863
$49,357 $22,543 $23,400
Note 8. Short-Term Obligations
Amoco's short-term obligations consist of notes payable and
commercial paper. Notes payable as of December 31, 1997, totaled
$53 million at an average annual interest rate of 5.7 percent,
compared with $80 million at an average annual interest rate of 6.2
percent at year-end 1996. Commercial paper borrowings at
December 31, 1997, were $698 million at an average annual interest
rate of 5.6 percent compared with $741 million at an average annual
interest rate of 5.4 percent as of December 31, 1996. Bank lines of
credit available to support commercial paper borrowings of the
Corporation amounted to $500 million at December 31, 1997, and
December 31, 1996. All of these were supported by commitment fees.
Note 9. Accounts Payable
Accounts payable at December 31, 1997 and 1996, included
liabilities in the amount of $418 million and $390 million,
respectively, for checks issued in excess of related bank balances
but not yet presented for collection.
<PAGE>
<PAGE>
AMOCO CORPORATION AND SUBSIDIARIES
___________________________
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued)
Note 10. Long-Term Debt
Amoco's long-term debt resides principally with two Amoco
subsidiaries--Amoco Company and Amoco Canada Petroleum Company Ltd.
("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.
The components of long-term debt and year-end interest rates
are summarized as follows:
1997 1996
(millions of
dollars)
Amoco Company and subsidiaries
6.25% Notes due 2004 .............. $ 200 $ --
6.5% Notes due 2007 ............... 300 --
Environmental and other industrial
development obligations ......... 916 880
6.4% Pound Sterling loans* ........ 624 652
6.1% Bank loan due 2002* .......... 300 170
6.2% Bank loan due 2005* .......... 198 177
Other indebtedness ................ 388 366
Subtotal ........................ 2,926 2,245
Less current maturities ........... 135 55
Total Amoco Company ............. 2,791 2,190
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 ......... 297 296
7 1/4% Notes due 2002 ............. 252 253
8.98% Bonds due 2005 .............. 219 222
Other ............................. 41 40
Total Amoco Canada .............. 1,704 1,706
Other subsidiaries (less current
maturities) ....................... 144 257
Total long-term debt ............ $4,639 $4,153
*Weighted average interest rate at December 31, 1997.
<PAGE>
<PAGE>
AMOCO CORPORATION AND SUBSIDIARIES
___________________________
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued)
Amoco Corporation guarantees the outstanding public debt of
Amoco Company. Amoco Corporation and Amoco Company guarantee the
notes, bonds and debentures of Amoco Canada.
Annual maturities of total long-term debt during the next five
years, including the portion classified as current, are $207
million in 1998, $220 million in 1999, $274 million in 2000, $344
million in 2001 and $874 million in 2002.
Note 11. Capital Stock
There were 800,000,000 shares of common stock without par
value authorized at December 31, 1997. Details concerning share
transactions are shown below:
1997 1996
Shares Amount Shares Amount
(thous) (mil) (thous) (mil)
Outstanding on Jan. 1 ..... 497,275 $2,646 496,403 $2,590
Stock repurchases ......... (16,167) (178) (457) (2)
Sales and distributions
under employee benefit
plans, etc. ............. 1,916 100 1,329 58
Canadian SEDs conversion .. -- -- -- --
Shares outstanding on
Dec. 31 ................. 483,024 $2,568 497,275 $2,646
1995
Shares Amount
(thous) (mil)
Outstanding on Jan. 1 ..... 496,393 $2,166
Stock repurchases ......... (10,604) (110)
Sales and distributions
under employee benefit
plans, etc. ............. 1,971 92
Canadian SEDs conversion .. 8,643 442
Shares outstanding on
Dec. 31 ................. 496,403 $2,590
On January 27, 1998, the Board of Directors approved an
irrevocable two-for-one common stock split. Each share outstanding
on March 31, 1998, will be split into two shares.
<PAGE>
<PAGE>
AMOCO CORPORATION AND SUBSIDIARIES
___________________________
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued)
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, 1997, none of the preferred stock
had been issued.
Note 12. 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, 1997, 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)
1998 ........................... $ 16 $ 207 $ 42
1999 ........................... 14 180 5
2000 ........................... 12 148 2
2001 ........................... 10 112 1
2002 ........................... 10 108 1
After 2003 ..................... 82 444 9
Total minimum rentals ........ 144 $ 1,199 $ 60
Less--Amounts
representing interest ...... 53
Capitalized lease obligations
(including $11 million
payable within one year) .... $ 91
Rental expense and related rental income applicable to
operating leases for the three years ended December 31, 1997, are
summarized below:
1997 1996 1995
(millions of dollars)
Minimum rental expense ....... $ 297 $ 295 $ 269
Contingent rental expense .... 8 42 25
Total .................... 305 337 294
Less--Related rental income .. 47 55 63
Net rental expense ....... $ 258 $ 282 $ 231
<PAGE>
<PAGE>
AMOCO CORPORATION AND SUBSIDIARIES
___________________________
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued)
Note 13. Foreign Currency
A foreign currency loss of $36 million was reflected in income
in 1997, compared with a loss of $17 million in 1996 and a gain of
$1 million in 1995. In addition, net translation losses of $99
million and $31 million for 1997 and 1996, respectively, and a net
translation gain of $19 million for 1995 were reflected in the
foreign currency translation adjustment account in shareholders'
equity.
Note 14. 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:
1997 1996 1995
(millions of dollars)
Short-term obligations ...... $ 56 $ 47 $ 16
Long-term obligations ....... 307 270 301
Total external financing .. 363 317 317
Other interest expense ...... 62 (103) 30
425 214 347
Less--Capitalized interest .. 24 22 12
Net interest expense ...... $ 401 $ 192 $ 335
Note 15. Research and Development Expenses
Research and development costs are expensed as incurred and
amounted to $151 million in 1997, $171 million in 1996 and $175
million in 1995.
<PAGE>
<PAGE>
AMOCO CORPORATION AND SUBSIDIARIES
___________________________
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued)
Note 16. Taxes
The provision for income taxes is composed of:
1997 1996 1995
(millions of dollars)
Federal--current ........ $ 546 $ 513 $ 283
--deferred ....... (50) 57 (63)
Foreign--current ........ 518 561 520
--deferred ....... 2 (35) (232)
State and local ......... 40 35 34
$1,056 $1,131 $ 542
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:
1997 1996
Percent Percent
of of
Amount Pre-Tax Amount Pre-Tax
(millions) Income (millions) Income
Pre-tax income:
U.S. source ...... $ 2,504 $ 2,453
Foreign source ... 1,272 1,512
$ 3,776 $ 3,965
Theoretical U.S.
income tax ....... $ 1,321 35.0 $ 1,388 35.0
Increase (reduction)
due to:
Foreign taxes at
rates different
than the U.S. rate 145 3.8 3 .1
Tax credits ........ (166) (4.4) (176) (4.4)
Tax-rate changes ... 15 .4 -- --
Carryforward
utilization and
prior-year adj. .. (206) (5.4) (46) (1.2)
All other (net) .... (53) (1.4) (38) (1.0)
$ 1,056 28.0 $ 1,131 28.5
<PAGE>
<PAGE>
AMOCO CORPORATION AND SUBSIDIARIES
___________________________
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued)
1995
Percent
of
Amount Pre-Tax
(millions) Income
Pre-tax income:
U.S. source .............................. $ 1,556
Foreign source ........................... 848
$ 2,404
Theoretical U.S. income tax ................ $ 842 35.0
Increase (reduction) due to:
Foreign taxes at rates different
than the U.S. rate........................ 39 1.6
Tax credits ................................ (173) (7.2)
Tax-rate changes ........................... (16) (.7)
Carryforward utilization and prior-year adj. (63) (2.6)
All other (net) ............................ (87) (3.6)
$ 542 22.5
The aggregate federal and foreign deferred income tax balance
represents the tax effect of the following items at December 31:
1997 1996
(millions of dollars)
Tax credit and loss carryforwards ..... $1,808 $1,450
Exploration costs ..................... 306 339
Postretirement benefits ............... 541 537
Environmental costs ................... 229 273
Other ................................. 323 394
Gross deferred tax assets ............. 3,207 2,993
Deferred tax asset valuation allowance (886) (569)
Net deferred tax assets ............. $2,321 $2,424
Accelerated depreciation .............. $3,307 $3,625
Intangible drilling costs ............. 754 736
Other ................................. 345 249
Deferred tax liabilities ............ $4,406 $4,610
<PAGE>
<PAGE>
AMOCO CORPORATION AND SUBSIDIARIES
___________________________
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued)
Taxes other than income taxes include:
1997 1996 1995
(millions of dollars)
Consumer excise taxes ........... $3,451 $3,386 $3,339
Production and severance taxes
United States ................. 127 140 100
Foreign ....................... 159 187 113
Property taxes .................. 281 290 254
Social Security, corporation and
other taxes ................... 204 212 236
$4,222 $4,215 $4,042
Undistributed earnings of certain foreign subsidiaries and
joint-venture companies aggregated $549 million on December 31,
1997, 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 17. 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 31 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 1997.
<PAGE>
<PAGE>
AMOCO CORPORATION AND SUBSIDIARIES
___________________________
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued)
Amoco applies APB Option 25 to account for its stock options.
Accordingly, no compensation costs have been recognized for its
plans. Had compensation costs been determined based on the fair
value at the grant dates for awards under the plans consistent with
the method recommended by SFAS 123 "Accounting for Stock-Based
Compensation," the Corporation's pro forma net income and basic net
income per share would have been $2,690 million or $5.49 per share
for 1997, $2,813 million or $5.66 per share for 1996 and $1,853
million or $3.74 per share for 1995.
The grant-date fair values of options granted during 1997,
1996 and 1995 were $16.82, $13.55 and $13.06, respectively. The
fair value of each option was estimated on the date of grant using
the Black-Scholes option-pricing model with the following
assumptions: risk-free interest rates of 6.7 percent for 1997, 6.1
percent for 1996 and 7.0 percent for 1995; expected volatility of
17.2 percent for 1997, 18.9 percent for 1996 and 19.8 percent for
1995; expected life of six years and dividend yield of 4 percent
for all years.
Option plan transactions in 1997, 1996 and 1995 are summarized
in the following table:
1997 1996 1995
Aver- Aver- Aver-
age age age
Exer- Exer- Exer-
Shares cise Shares cise Shares cise
(000) Price (000) Price (000) Price
Outstanding at
Jan. 1 ....... 13,933 $57.06 12,666 $52.50 11,595 $49.91
Granted .... 3,399 $89.79 2,792 $73.21 2,282 $62.69
Exercised .. (1,788) $50.41 (1,218) $47.69 (921) $45.70
Surrendered
or
terminated . (185) $77.46 (186) $64.75 (214) $56.80
Canceled upon
exercise of
SARs ....... (40) $39.09 (121) $35.58 (76) $33.88
Outstanding at
Dec. 31 ...... 15,319 $65.00 13,933 $57.06 12,666 $52.50
<PAGE>
<PAGE>
AMOCO CORPORATION AND SUBSIDIARIES
___________________________
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued)
Options exercisable at December 31, 1997, 1996 and 1995 were
10,719,431; 10,153,687; and 9,440,725; respectively. Of the total
options outstanding on December 31, 1997, 108,500 were with SARs.
The following table summarizes information about the options
outstanding at December 31, 1997:
Outstanding Exercisable
Average
Remaining Average Average
Range of Shares Contractual Exercise Shares Exercise
Exercise Prices (000) Life (years) Price (000) Price
$ 37 - 54 3,011 2.7 $ 46 3,011 $ 46
$ 54 - 58 4,501 5.0 $ 56 4,501 $ 56
$ 59 - 75 4,459 7.8 $ 69 3,207 $ 67
$ 82 - 97 3,348 9.2 $ 90 -- $ --
The Corporation's restricted stock grant plans provide for the
awarding of shares of Corporation common stock up to 6 million
shares to selected employees 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 1997,
112,795 shares were issued under the current plans. No restricted
shares may be issued under the current employee plan after December
31, 2001.
Note 18. Management Incentive 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 $19 million in 1997, $21 million in
1996 and $16 million in 1995. Awards made in 1997, 1996 and 1995
amounted to $20 million, $18 million and $20 million, respectively.
<PAGE>
<PAGE>
AMOCO CORPORATION AND SUBSIDIARIES
___________________________
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued)
Note 19. 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.
The funded status of the plans as of December 31 for 1997 and
1996 was as follows:
Plans for which
Assets Benefits
Exceed Exceed
Benefits Assets
(millions of dollars)
1997
Fair value of plan assets, principally
equity and fixed-income securities . $ 3,393 $ --
Actuarial present value of benefit
obligations:
Accumulated benefit obligation* .... 3,074 123
Additional benefits based on
estimated future salary levels ... 452 12
Projected benefit obligation ("PBO") 3,526 135
Plan assets under PBO ................ (133) (135)
Unrecognized net (gains) losses
at transition ...................... (38) 8
Other unrecognized net losses ........ 197 57
Unrecognized prior service cost ...... (54) (14)
Minimum pension liability adjustment . -- (48)
Net pension cost accrued ............. $ (28) $ (132)
<PAGE>
<PAGE>
AMOCO CORPORATION AND SUBSIDIARIES
___________________________
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued)
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)
* Accumulated benefits totaling $150 million and $311
million were non-vested at December 31, 1997 and 1996,
respectively.
The actuarial assumptions used for the Corporation's principal
pension plans for 1997 and 1996 were as follows:
1997 1996
Discount rate for service and interest cost .. 7.0% 7.0%
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%
<PAGE>
<PAGE>
AMOCO CORPORATION AND SUBSIDIARIES
___________________________
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued)
The components of net pension cost for the past three years
were as follows:
1997 1996 1995
(millions of dollars)
Service cost--benefits earned
during the period ........... $ 131 $ 121 $ 98
Interest cost on projected
benefit obligation .......... 244 236 242
Actual gain on assets ......... (681) (446) (492)
Unrecognized gain ............. 409 186 217
Recognized gain on assets ..... (272) (260) (275)
Settlement/curtailment loss ... 9 4 2
Amortization of unrecognized
amounts ..................... 27 29 12
Net pension cost .............. $ 139 $ 130 $ 79
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 $78 million in 1997, $80 million in 1996 and $83
million in 1995.
Note 20. 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 1997 and 1996 was as follows:
1997 1996
(millions of dollars)
Accumulated benefit obligation
Retirees .............................. $ 638 $ 642
Fully eligible active plan participants 236 216
Other active plan participants ........ 260 281
Total ................................. 1,134 1,139
Unrecognized net gains .................. 258 213
Unrecognized prior service gains ........ 170 191
Accrued postretirement benefit cost ..... $ 1,562 $ 1,543
The actuarial assumptions used for the Corporation's principal
postretirement benefit plans for 1997 and 1996 were as follows:
1997 1996
Discount rate for service and interest cost ........ 7.0% 7.0%
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 .............................. 8.5% 9.4%
--Medicare eligible retirees ..................... 7.0% 7.5%
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 .... $ 14 $ 15
--accumulated postretirement benefit obligation .. $ 112 $ 120
The components of net postretirement benefit costs for the
past three years were as follows:
1997 1996 1995
(millions of dollars)
Service cost--benefits earned
during the period ............ $ 27 $ 30 $ 26
Interest cost on accumulated
benefit obligation ........... 78 81 86
Amortization and other ......... (33) (39) (36)
Net postretirement benefit cost $ 72 $ 72 $ 76
<PAGE>
<PAGE>
AMOCO CORPORATION AND SUBSIDIARIES
___________________________
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued)
Note 21. 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 22. 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 23. 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:
1997 1996 1995
(millions of dollars)
For the years ended December 31:
Revenues (including excise
taxes) ..................... $32,986 $32,629 $28,339
Operating profit ............. $ 3,820 $ 3,735 $ 2,783
Net income ................... $ 2,274 $ 2,402 $ 1,798
At December 31:
Current assets ............... $ 6,442 $ 6,361 $ 5,303
Total assets ................. $30,062 $29,208 $26,326
Current liabilities .......... $ 5,165 $ 4,926 $ 4,578
Long-term debt - affiliates .. $ 4,739 $ 4,731 $ 4,608
- other ....... $ 2,791 $ 2,190 $ 2,177
Deferred credits ............. $ 4,663 $ 4,524 $ 4,397
Minority interest ............ $ 119 $ 131 $ 110
Shareholder's equity ......... $12,505 $12,630 $10,456
Annual maturities of long-term debt during the next five years,
including the portion classified as current, are $135 million in
1998, $174 million in 1999, $215 million in 2000, $304 million in
2001 and $323 million in 2002.
Amoco Canada is a wholly owned subsidiary of Amoco
Corporation. Amoco and Amoco Company guarantee the notes, bonds 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:
1997 1996 1995
(millions of dollars)
For the years ended December 31:
Revenues ..................... $ 4,705 $ 4,598 $ 3,619
Net income (loss) ............ $ 301 $ 307 $ (205)
At December 31:
Current assets ............... $ 1,479 $ 1,615 $ 1,252
Total assets ................. $ 4,217 $ 4,412 $ 4,493
Current liabilities .......... $ 948 $ 1,110 $ 2,494
Non-current liabilities ...... $ 3,043 $ 3,377 $ 2,381
Shareholder's equity (deficit) $ 226 $ (75) $ (382)
$552 million of long-term debt is scheduled to mature in 2002.
Note 24. Geographic and Segment Data
The Corporation operates worldwide in the petroleum and
chemical industries, in several industry segments. Petroleum
operations include E&P and petroleum products segments. The E&P
segment is engaged in exploring for, developing and producing crude
oil and natural gas; extraction of natural gas liquids ("NGL"); and
marketing of natural gas. The petroleum products segment is
responsible for petroleum refining operations, marketing of all
petroleum products, the transportation of crude oil and petroleum
products, associated supply and trading activities, primarily in
the United States, and transportation and wholesale marketing of
Canadian crude oil, sulfur and NGL. 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. In 1997,
Amoco transferred Canadian supply and marketing activities for
crude oil, sulfur and NGL to the petroleum products segment from
the E&P segment. Segment data for prior years have been restated.
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 Geographic Area
United
(millions of dollars) States Canada Europe
Year 1997
Revenues other than
intergeographic sales $28,199 $3,389 $2,133
Intergeographic sales . 1,199 1,072 153
Total revenues ...... $29,398 $4,461 $2,286
Operating profit ...... $ 3,189 $ 561 $ 308
Net income ............ $ 2,333 $ 351 $ 135
Capital expenditures .. $ 1,615 $ 364 $ 612
Identifiable assets ... $19,783 $3,065 $2,982
Equity investments
and related advances $ 155 $ -- $ --
Equity in earnings
of others ........... $ 37 $ -- $ (8)
Consol-
Cor- idated
Other porate (*)
Year 1997
Revenues other than
intergeographic sales $2,456 $36,287
Intergeographic sales . 471 --
Total revenues ...... $2,927 $36,287
Operating profit ...... $ 466 $ 4,524
Net income ............ $ 196 $( 295) $ 2,720
Capital expenditures .. $ 698 $ 55 $ 3,344
Identifiable assets ... $3,863 $1,813 $30,470
Equity investments
and related advances $1,864 2,019
Total assets ........ $32,489
Equity in earnings
of others ........... $ (5) $ 24
(*) After elimination of intergeographic transactions.
<PAGE>
<PAGE>
Statement of Information by Geographic Area (continued)
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 Industry Segment
(millions of dollars) Petroleum Operations
Exploration
and Petroleum Chemical
Production Products Operations
Year 1997
Revenues other than intersegment
sales ......................... $ 7,393 $ 22,794 $ 5,941
Intersegment sales .............. 3,420 2,018 449
Total revenues ................ $ 10,813 $ 24,812 $ 6,390
Operating profit ................ $ 3,004 $ 862 $ 732
Equity in earnings of others .... (6) 35 (7)
General corporate amounts .......
Interest expense ................
Income taxes .................... (1,018) (310) (232)
Net income .................... $ 1,980 $ 587 $ 493
Depreciation and related charges $ 1,430 $ 455 $ 397
Capital expenditures ............ $ 2,115 $ 455 $ 652
Identifiable assets ............. $ 14,682 $ 7,520 $ 6,351
Equity investments and related
advances ...................... $ 1,260 $ 164 $ 569
Corporate
and
Other
Operations Consolidated*
Year 1997
Revenues other than intersegment
sales ......................... $ 48 $ 36,287
Intersegment sales .............. -- --
Total revenues ................ $ 48 $ 36,287
Operating profit ................ $ (74) $ 4,524
Equity in earnings of others .... 2 24
General corporate amounts ....... (371) (371)
Interest expense ................ (401) (401)
Income taxes .................... 504 (1,056)
Net income .................... $ (340) $ 2,720
Depreciation and related charges $ 91 $ 2,373
Capital expenditures ............ $ 122 $ 3,344
Identifiable assets ............. $ 2,399 $ 30,470
Equity investments and related
advances ...................... $ 26 2,019
Total assets .................. $ 32,489
* 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 1996
Revenues other than intersegment
sales ......................... $ 6,409 $ 23,755 $ 5,698
Intersegment sales .............. 3,630 1,607 71
Total revenues ................ $ 10,039 $ 25,362 $ 5,769
Operating profit ................ $ 2,771 $ 771 $ 924
Equity in earnings of others .... (1) 32 112
General corporate amounts .......
Interest expense ................
Income taxes .................... (986) (275) (301)
Net income .................... $ 1,784 $ 528 $ 735
Depreciation and related charges $ 1,467 $ 456 $ 261
Capital expenditures ............ $ 2,404 $ 500 $ 985
Identifiable assets ............. $ 15,866 $ 7,415 $ 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 ......................... $ 4,717 $ 20,279 $ 5,655
Intersegment sales .............. 2,915 1,038 62
Total revenues ................ $ 7,632 $ 21,317 $ 5,717
Operating profit ................ $ 1,011 $ 687 $ 1,256
Equity in earnings of others .... -- 35 133
General corporate amounts .......
Interest expense ................
Income taxes .................... (317) (231) (426)
Net income .................... $ 694 $ 491 $ 963
Depreciation and related charges $ 1,971 $ 471 $ 293
Capital expenditures ............ $ 2,065 $ 500 $ 850
Identifiable assets ............. $ 14,372 $ 7,445 $ 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>
AMOCO CORPORATION AND SUBSIDIARIES
___________________________
SUPPLEMENTAL INFORMATION
1. 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 activities associated with
marketing of natural gas and Amoco's economic interest in equity
affiliates.
Results of Operations for Oil and Gas Producing Activities
United World-
(millions of dollars) States Canada Europe Other wide
1997
Oil and gas production
revenues:
From consolidated
subsidiaries ........... $2,938 $ 306 $ -- $ 957 $4,201
From unaffiliated entities 576 387 836 788 2,587
Other revenues ............. 617 86 226 75 1,004
Total revenues ........... 4,131 779 1,062 1,820 7,792
Production costs:
Taxes other than income .. 229 14 41 137 421
Other production costs ... 776 230 314 487 1,807
Exploration expenses ....... 101 69 159 270 599
Depreciation, depletion and
amortization expense ..... 616 178 220 329 1,343
Other related costs ........ 508 35 37 134 714
Total costs .............. 2,230 526 771 1,357 4,884
Operating profit ........... 1,901 253 291 463 2,908
Income tax expense ......... 476 109 142 268 995
Results of operations .... $1,425 $ 144 $ 149 $ 195 $1,913
<PAGE>
<PAGE>
Results of Operations for Oil and Gas Producing Activities
(continued)
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
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 1997 included gains on the sale of
non-core U.S. and European properties. 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.
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.
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.
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, 1997, 1996 and 1995. The amount shown for affiliates
represents Amoco's proportionate economic interest in the estimated
discounted future net cash flows of equity affiliates.
United World-
(millions of dollars) States Canada Europe Other wide
December 31, 1997
Future cash inflows ....... $41,138 $ 7,381 $ 9,441 $19,302 $ 77,262
Future development and
production costs ........ 15,178 3,210 4,582 7,192 30,162
Future income taxes ....... 6,885 1,426 1,882 6,049 16,242
Future net cash flows ..... 19,075 2,745 2,977 6,061 30,858
Ten percent annual discount 10,397 1,093 1,025 2,997 15,512
Discounted net cash flows . $ 8,678 $ 1,652 $ 1,952 $ 3,064 $ 15,346
Affiliates ................ $ -- $ -- $ -- $ 809 $ 809
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
Future cash inflows are computed by applying the year-end
prices of oil and gas to proved reserve quantities as reported
under "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, 1997:
(millions of dollars) 1997 1996 1995
Balance at January 1 $25,291 $11,836 $10,991
Changes resulting from:
Sales and transfers of oil and gas
produced, net of production costs (4,560) (5,184) (3,769)
Net changes in prices, and
development and production costs (15,208) 17,332 407
Current-year expenditures for
development ..................... 2,077 2,007 1,707
Extensions, discoveries and
improved recovery, less
related costs ................... 2,056 3,928 1,922
(Sales) purchases of reserves
in place ........................ (2,287) (332) 128
Revisions of previous quantity
estimates ....................... 31 445 56
Accretion of discount ............. 3,763 1,735 1,441
Net change in income taxes ........ 5,073 (7,375) (833)
Other ............................. (890) 899 (214)
Balance at December 31 .............. $15,346 $25,291 $11,836
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. 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.
Estimated Proved Reserves
Net proved reserves of crude oil (including condensate), NGL
and natural gas at the beginning and end of 1997, 1996 and 1995,
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. The amounts shown for affiliates
represent Amoco's proportionate economic interest in estimated
proved reserves of equity affiliates.
<PAGE>
<PAGE>
Crude Oil and NGL Reserves
Consolidated
United States Canada Europe
Crude Crude Oil Crude Oil
(millions of barrels) Oil NGL and NGL and NGL
Proved reserves:
December 31, 1994 ........ 786 447 286 191
Revisions of previous
estimates ............ 5 12 5 3
Improved recovery
applications ......... 12 2 41 25
Extensions, discoveries
and other additions .. 27 9 53 16
Purchases of reserves in
place ................ 4 3 2 56
Sales of reserves in
place ................ (1) (3) (23) --
Production ............. (66) (22) * (25) (23)
December 31, 1995 ........ 767 448 339 268
Revisions of
previous estimates ... (1) (19) (2) 2
Improved recovery
applications ......... 25 9 24 9
Extensions, discoveries
and other additions .. 12 7 93 73
Purchases of reserves
in place ............. 3 3 -- --
Sales of reserves
in place ............. (9) (4) (49) --
Production ............. (65) (27) * (22) (22)
December 31, 1996 ........ 732 417 383 330
Revisions of
previous estimates ... 166 (34) 6 11
Improved recovery
applications ......... 6 4 1 7
Extensions, discoveries
and other additions .. 41 5 47 4
Purchases of reserves
in place ............. 11 1 2 --
Sales of reserves
in place ............. (107) (78) (11) --
Production ............. (60) (24) * (22) (24)
December 31, 1997......... 789 291 406 328
Proved developed reserves:
December 31, 1994 ........ 727 404 236 160
December 31, 1995 ........ 713 409 260 150
December 31, 1996 ........ 675 376 274 146
December 31, 1997 ........ 638 267 284 149
<PAGE>
<PAGE>
Crude Oil and NGL Reserves (continued)
Consolidated
Other Total Affiliates Worldwide
Crude Oil Crude Oil Crude Oil Crude Oil
(millions of barrels) and NGL and NGL and NGL and NGL
Proved reserves:
December 31, 1994 .......... 495 2,205 -- 2,205
Revisions of previous
estimates .............. 12 37 -- 37
Improved recovery
applications ........... 29 109 -- 109
Extensions, discoveries
and other additions .... 54 159 -- 159
Purchases of reserves in
place .................. 8 73 -- 73
Sales of reserves in place (12) (39) -- (39)
Production ............... (86) (222) -- (222)
December 31, 1995 .......... 500 2,322 -- 2,322
Revisions of
previous estimates ..... 21 1 -- 1
Improved recovery
applications ........... 15 82 -- 82
Extensions, discoveries
and other additions .... 114 299 -- 299
Purchases of reserves
in place ............... -- 6 -- 6
Sales of reserves in place -- (62) -- (62)
Production ............... (89) (225) -- (225)
December 31, 1996 .......... 561 2,423 -- 2,423
Revisions of
previous estimates ..... 27 176 -- 176
Improved recovery
applications ........... 32 50 -- 50
Extensions, discoveries
and other additions .... 71 168 -- 168
Purchases of reserves
in place ............... 46 60 166 226
Sales of reserves in place (214) (410) -- (410)
Production ............... (84) (214) (2) (216)
December 31, 1997........... 439 2,253 164 2,417
Proved developed reserves:
December 31, 1994 .......... 387 1,914 -- 1,914
December 31, 1995 .......... 386 1,918 -- 1,918
December 31, 1996 .......... 411 1,882 -- 1,882
December 31, 1997 .......... 308 1,646 120 1,766
(*) Excludes non-leasehold NGL production attributable to processing plant
ownership of approximately 15 million barrels for 1995, 1996 and 1997.
<PAGE>
<PAGE>
Natural Gas Reserves
Consolidated
United
(billions of cubic feet) States Canada Europe Other
Proved reserves:
December 31, 1994 ............. 11,728 3,022 1,388 2,383
Revisions of
previous estimates ........ (198) (25) 11 126
Improved recovery
applications .............. 139 11 39 102
Extensions, discoveries
and other additions ....... 475 174 72 1,082
Purchases of reserves
in place .................. 305 36 -- --
Sales of reserves in place .. (76) (78) (26) --
Production .................. (891) (302) (131) (213)
December 31, 1995 ............. 11,482 2,838 1,353 3,480
Revisions of
previous estimates ........ (796) (55) 38 129
Improved recovery
applications .............. 214 12 9 --
Extensions, discoveries
and other additions ....... 378 79 3 2,871
Purchases of reserves
in place .................. 300 21 -- --
Sales of reserves in place .. (154) (259) -- (20)
Production .................. (918) (293) (143) (223)
December 31, 1996 ............. 10,506 2,343 1,260 6,237
Revisions of
previous estimates ........ (308) 96 6 918
Improved recovery
applications .............. 100 11 2 93
Extensions, discoveries
and other additions ....... 664 112 41 734
Purchases of reserves
in place .................. 170 27 -- 980
Sales of reserves in place .. (1,188) (113) (10) (1,101)
Production .................. (847) (279) (141) (225)
December 31, 1997.............. 9,097 2,197 1,158 7,636
Proved developed reserves:
December 31, 1994 ............. 10,829 2,643 1,028 1,038
December 31, 1995 ............. 10,443 2,559 1,017 1,422
December 31, 1996 ............. 9,304 2,156 961 1,745
December 31, 1997 ............. 8,017 1,980 1,034 2,066
<PAGE>
<PAGE>
Natural Gas Reserves (continued)
Consoli-
dated
(billions of cubic feet) Total Affiliates Worldwide
Proved reserves:
December 31, 1994 ............. 18,521 -- 18,521
Revisions of
previous estimates ........ (86) -- (86)
Improved recovery
applications .............. 291 -- 291
Extensions, discoveries
and other additions ....... 1,803 -- 1,803
Purchases of reserves
in place .................. 341 -- 341
Sales of reserves in place .. (180) -- (180)
Production .................. (1,537) -- (1,537)
December 31, 1995 ............. 19,153 -- 19,153
Revisions of
previous estimates ........ (684) -- (684)
Improved recovery
applications .............. 235 -- 235
Extensions, discoveries
and other additions ....... 3,331 -- 3,331
Purchases of reserves
in place .................. 321 -- 321
Sales of reserves in place .. (433) -- (433)
Production .................. (1,577) -- (1,577)
December 31, 1996 ............. 20,346 -- 20,346
Revisions of
previous estimates ........ 712 -- 712
Improved recovery
applications .............. 206 -- 206
Extensions, discoveries
and other additions .......
Purchases of reserves 1,551 -- 1,551
in place .................. 1,177 1,374 2,551
Sales of reserves in place .. (2,412) -- (2,412)
Production .................. (1,492) (6) (1,498)
December 31, 1997.............. 20,088 1,368 21,456
Proved developed reserves:
December 31, 1994 ............. 15,538 -- 15,538
December 31, 1995 ............. 15,441 -- 15,441
December 31, 1996 ............. 14,166 -- 14,166
December 31, 1997 ............. 13,097 807 13,904
<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, 1997
Unproved properties:
Gross assets ............ $ 467 $ 270 $ 81 $ 143 $ 961
Accumulated amortization 96 107 26 7 236
Net assets ............ 371 163 55 136 725
Proved properties:
Gross assets ............ 14,019 3,334 3,538 6,469 27,360
Accumulated depreciation,
depletion, etc. ......... 8,245 1,807 1,942 4,743 16,737
Net assets ............ 5,774 1,527 1,596 1,726 10,623
Support equipment and
facilities:
Gross assets ............ 386 112 220 278 996
Accumulated depreciation 203 64 84 248 599
Net assets ............ 183 48 136 30 397
Net capitalized costs ..... $6,328 $1,738 $1,787 $1,892 $11,745
December 31, 1996
Unproved properties:
Gross assets ............ $ 477 $ 232 $ 98 $ 303 $ 1,110
Accumulated amortization 97 104 6 7 214
Net assets ............ 380 128 92 296 896
Proved properties:
Gross assets ............ 15,341 3,364 3,207 6,728 28,640
Accumulated depreciation,
depletion, etc. ......... 8,927 1,809 1,767 5,045 17,548
Net assets ............ 6,414 1,555 1,440 1,683 11,092
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
1997 excludes $2.0 billion associated with Amoco's interest in
affiliates.
<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
Year 1997
Property acquisition:
Proved .............. $ 2 $ 5 $ -- $ 2 $ 9
Unproved ............ 38 9 33 2 82
Exploration ........... 261 83 176 372 892
Development ........... 823 327 268 659 2,077
Total ............. $1,124 $ 424 $ 477 $1,035 $3,060
Year 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
Year 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
1997 excludes $865 million in cash for Amoco's interest in
affiliates.
<PAGE>
<PAGE>
2. QUARTERLY RESULTS AND STOCK MARKET DATA
Net Net
Income Income
Net Per Per Share
Operating Income Share (Assuming
Revenues Profit (1) (Basic) Dilution)
(millions of dollars, except as noted)
1997
First quarter .. $ 8,993 $ 1,149 $ 674 $ 1.36 $ 1.35
Second quarter . 8,624 1,036 622 1.26 1.25
Third quarter .. 8,983 1,099 635 1.30 1.29
Fourth quarter . 9,687 1,240 789 1.63 1.62
1996
First quarter .. $ 8,214 $ 1,092 $ 728 $ 1.47 $ 1.46
Second quarter . 8,765 989 600 1.20 1.20
Third quarter .. 9,018 1,019 635 1.28 1.27
Fourth quarter . 10,115 1,361 871 1.74 1.73
Cash
Dividends Common Stock
Per Price Ranges (2)
Share High Low
1997
First quarter .. $ .70 $ 91 5/8 $ 80 1/4
Second quarter . .70 91 7/8 79 1/4
Third quarter .. .70 99 87
Fourth quarter . .70 98 3/8 81 13/16
1996
First quarter .. $ .65 $ 74 1/8 $ 67 1/2
Second quarter . .65 75 1/8 69 1/2
Third quarter .. .65 72 5/8 65
Fourth quarter . .65 83 1/2 70 1/4
(1) Fourth-quarter 1997 earnings included net gains of $271
million primarily associated with asset dispositions, including the
sale of certain non-core oil and gas properties in the United
States. 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.
(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>
3. MARKET RISKS AND DERIVATIVE INSTRUMENTS
In the normal course of business, Amoco holds or issues
various financial instruments which expose the Corporation to
financial risk associated with market currency exchange rates and
interest rates. 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.
Substantially all financial instruments held by the Corporation are
for purposes other than trading.
Currency Risks
The Corporation conducts its business primarily in U.S.
dollars. Prices for most of the Corporation's products are based on
global market prices which are affected primarily by U.S. dollars.
Similarly, prices for non-proprietary feedstocks for most of the
Corporation's operations are generally based on U.S. dollars.
Significant exposures to specific foreign currency exchange risk
are reduced through the use of financial instruments, primarily by
hedging of foreign currency borrowings and contractual commitments.
The table below shows the amount of foreign currency forward
contracts that have been designated as hedges of foreign currency
debt. In addition, forward contracts to acquire Singapore dollars
with a face amount of $4 million, which hedge the Corporation's
foreign currency exposure associated with certain construction
contracts, were outstanding at December 31, 1997. The forward
contracts matured in January 1998.
Interest Rate Risks
The table below also provides information about the interest
rates of the Corporation's debt obligations. The table shows the
amount of debt, including current portion, and related weighted
average interest rates, as of December 31, 1997, by expected
maturity dates. Weighted average variable rates are based on
forward rates as of December 31, 1997.
<PAGE>
<PAGE>
Expected Maturity Date
1998 1999 2000 2001
(millions of U.S. dollars)
U.S. DOLLAR:
Debt
- -- Fixed rate ......... $ 27 $ 4 $ 3 $ 33
- -- Avg. interest rate . 6.5% 10.1% 10.1% 10.4%
- -- Variable rate ...... $ 12 $ 105 $ 164 $ 82
- -- Avg. interest rate . 6.5% 6.6% 6.9% 6.9%
BRITISH POUND:
Debt
- -- Variable rate ...... $ 120 $ 65 $ 65 $ 190
- -- Avg. interest rate . 6.5% 6.8% 7.0% 7.1%
Forward purchases*..... $ 935 $ -- $ -- $ --
CANADIAN DOLLAR:
Debt
- -- Fixed rate ......... $ 48 $ 46 $ 42 $ 39
- -- Avg. interest rate . 6.7% 6.7% 6.7% 6.7%
Forward purchases ..... $ 56 $ 56 $ 56 $ 56
Expected
Maturity
Date
2002 Thereafter Total Fair Value
(millions U.S. of dollars)
U.S. DOLLAR:
Debt
- -- Fixed rate ......... $ 552 $1,793 $2,412 $2,457
- -- Avg. interest rate . 7.3% 7.1% 7.2%
- -- Variable rate ...... $ 232 $ 999 $1,594 $1,594
- -- Avg. interest rate . 6.9% 5.5% 6.0%
BRITISH POUND:
Debt
- -- Variable rate ...... $ 90 $ 94 $ 624 $ 624
- -- Avg. interest rate . 7.2% 7.2% 7.0%
Forward purchases*..... $ -- $ -- $ 935 $ 10
CANADIAN DOLLAR:
Debt
- -- Fixed rate ......... $ -- $ 41 $ 216 $ 234
- -- Avg. interest rate . -- 6.1% 6.5%
Forward purchases ..... $ -- $ -- $ 224 $ (8)
* Forward purchases are renewed periodically to match debt
maturities.
<PAGE>
<PAGE>
Commodity Price Risks
Amoco is a vertically integrated petroleum and chemical
company. The hydrocarbon commodity markets are influenced by global
as well as regional supply and demand. Worldwide political events
can also impact commodity prices. Amoco's policy generally is to be
exposed to market pricing for commodity purchases and sales.
Accordingly, the forward energy markets have been used primarily to
refloat fixed-price purchases and sales of crude oil, gasoline,
heating oil, and natural gas. Most of the contracts listed below
are for this purpose. However, Amoco occasionally uses forward
sales of its commodity products to fix prices that are favorable
with respect to its future price forecasts, reducing its natural
long exposure to commodity prices. At December 31, 1997, Amoco had
sold forward 4 million barrels of crude oil and 6 trillion Btus of
natural gas production for periods of less than one year.
The table below provides information about the Corporation's
futures, swaps and option contracts that are sensitive to
hydrocarbon price changes. Contract amounts represent the notional
amount of the contract. Fair value represents the amount that
would have been required to terminate the contracts at December 31,
1997. Weighted average price represents the year-end forward price
for futures; the fixed price and the year-end forward price related
to the settlement month for swaps; and the weighted average strike
price for options.
<PAGE>
<PAGE>
Commodity Price Risks (continued)
Fair
Contract Value
Quantity Amount Favorable
(000 (millions of dollars)
Barrels)
Crude Oil:
Maturing in 1998
Futures-short ............. 740 $ 13 $ 1
Options-owned puts ........ 50 $ 1 $ --
Swaps-receive
fixed pay variable ...... 3,900 $ 82 $ 11
Maturing in 1999
Futures-long .............. 9 $ -- $ --
Refined Products: (million
gallons)
Heating oil
Maturing in 1998
Futures-long .............. 49 $ 26 $ --
Maturing in 1999
Futures-long .............. 1 $ 1 $ --
Unleaded Gasoline
Maturing in 1998
Futures-long .............. 3 $ 1 $ --
Natural Gas: (trillion
Btus)
Maturing in 1998
Futures-long .............. 3 $ 6 $ --
Options-owned puts ........ 3 $ 3 $ --
Options-written puts ...... 6 $ 11 $ --
Options-owned calls ....... 6 $ 14 $ --
Options-written calls ..... 1 $ 2 $ --
Swaps-receive
fixed pay variable ...... 52 $ 88 $ 12
Swaps-receive
variable pay fixed ...... 95 $166 $ 4
Swaps-receive
and pay variable ........ 198 $410 $ 4
<PAGE>
<PAGE>
Commodity Price Risks (continued)
Fair Weighted Average
Value Price
Unfavorable Receive Pay
(millions (dollar/barrel)
Crude Oil: of dollars)
Maturing in 1998
Futures-short ............. $ 1 $17.91 $ --
Options-owned puts ........ $ -- $17.00 $ --
Swaps receive
fixed pay variable ...... $ -- $21.00 $18.29
Maturing in 1999
Futures-long .............. $ -- $ -- $18.64
Refined Products: (dollar/gallon)
Heating oil
Maturing in 1998
Futures-long .............. $ 2 $ -- $ .50
Maturing in 1999
Futures-long .............. $ -- $ -- $ .54
Unleaded Gasoline
Maturing in 1998
Futures-long .............. $ -- $ -- $ .53
Natural Gas: (dollar/mmBtu)
Maturing in 1998
Futures-long .............. $ -- $ -- $ 2.21
Options-owned puts ........ $ -- $ 1.31 $ --
Options-written puts ...... $ 1 $ -- $ 1.80
Options-owned calls ....... $ -- $ -- $ 2.28
Options-written calls ..... $ -- $ 1.46 $ --
Swaps-receive
fixed pay variable ...... $ 1 $ 1.69 $ 1.48
Swaps-receive
variable pay fixed ...... $ 14 $ 1.64 $ 1.75
Swaps-receive
and pay variable ........ $ 5 $ 2.07 $ 2.07
<PAGE>
<PAGE>
Commodity Price Risks (continued)
Contract Fair Value
Quantity Amount Favorable
(trillion (millions of dollars)
Btus)
Natural Gas:
Maturing in 1999
Options-written puts ...... 1 $ 3 $ --
Options-owned calls ....... 1 $ 4 $ --
Options-written calls ..... 1 $ 1 $ --
Swaps-receive
fixed pay variable ...... 6 $ 11 $ 1
Swaps-receive
variable pay fixed ...... 6 $ 10 $ 1
Swaps-receive
and pay variable ........ 10 $ 22 $ --
Maturing in 2000
Swaps-receive
fixed pay variable ...... 1 $ 1 $ --
Swaps-receive
variable pay fixed ...... 4 $ 8 $ 1
Swaps-receive
and pay variable ........ 2 $ 3 $ --
Fair Weighted Average
Value Price
Unfavorable Receive Pay
(millions (dollar/mmBtu)
of dollars)
Natural Gas:
Maturing in 1999
Options-written puts ...... $ -- $ -- $ 2.27
Options-owned calls ....... $ -- $ -- $ 2.56
Options-written calls ..... $ -- $ 1.42 $ --
Swaps-receive
fixed pay variable ...... $ -- $ 1.82 $ 1.73
Swaps receive
variable pay fixed ...... $ -- $ 1.91 $ 1.77
Swaps-receive
and pay variable ........ $ -- $ 2.30 $ 2.29
Maturing in 2000
Swaps-receive
fixed pay variable ..... $ -- $ 1.69 $ 1.58
Swaps-receive
variable pay fixed ..... $ -- $ 1.99 $ 1.87
Swaps-receive
and pay variable ....... $ -- $ 1.99 $ 1.99
<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 2-7 of Amoco's
Proxy Statement dated March 16, 1998. 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 8-15 of Amoco's Proxy Statement dated March 16,
1998. 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 2, 7, 8, 9, 10 and 11 of Amoco's Proxy Statement
dated March 16, 1998.
Item 13. Certain Relationships and Related Transactions
During 1997, 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, 1997.
<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 20th day of March, 1998.
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
20, 1998.
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
<PAGE>
<PAGE>
Signatures Titles
JOHN H. BRYAN* Director
John H. Bryan
ERROLL B. DAVIS, JR.* Director
Erroll B. Davis Jr.
RICHARD FERRIS* Director
Richard Ferris
F. A. MALJERS* Director
F. A. Maljers
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
*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
1997
Allowance for
doubtful notes and
accounts receivable $ 17 $ 7 $ -- $ 14 $ 10
1996
Allowance for
doubtful notes and
accounts receivable 16 4 -- 3 17
1995
Allowance for
doubtful notes and
accounts receivable 23 7 -- 14 16
(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, *
and amendments thereto.
3(b) The Amended By-laws of the registrant dated *
January 27, 1998.
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 are incorporated by reference to
Exhibit 10(b) to the registrant's Annual Report on
Form 10-K for the year ended December 31, 1996.
--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;
*Included herein.
<PAGE>
<PAGE>
10 (b) --Deferred Sign-On Bonus Agreement, dated
(cont.) September 25, 1995.
--Stock Option Agreement under the 1991 Incentive *
Program of Amoco Corporation and its Participating
Subsidiaries, dated March 25, 1997;
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
of 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 is incorporated by reference
to Exhibit 10(e) to the registrant's Annual Report
on Form 10-K for the year ended December 31, 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 July 1, 1996.
--Seventh Amendment of Amoco Employee Savings Plan *
effective January 11, 1998.
--Sixth Amendment of Amoco Employee Savings Plan *
effective January 1, 1998.
--Fifth Amendment of Amoco Employee Savings Plan *
effective December 1, 1997.
--Fourth Amendment of Amoco Employee Savings Plan *
effective January 1, 1998.
--Third Amendment of Amoco Employee Savings Plan *
effective December 31, 1997.
--Second Amendment of Amoco Employee Savings Plan *
effective October 1, 1997.
*Included herein.
<PAGE>
<PAGE>
10(g) --Third Amendment of Amoco Employee Savings Plan *
(cont.) effective March 1, 1997.
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) to the registrant'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 incorporated by reference to
Exhibit 10(i) to the registrant's Annual Report on
Form 10-K for the year ended December 31, 1996.
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 incorporated by reference to Exhibit 10(j) to the
registrant's Annual Report on Form 10-K for the year
ended December 31, 1996.
10(k) Deferral and Restoration Plans are incorporated by
reference to Exhibit 10(k) to the registrant's Annual
Report or Form 10-K for the year-ended December 31, 1996
--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;
*Included herein.
<PAGE>
<PAGE>
10(k) --ERISA Savings Restoration Plan of Amoco
(cont.) 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 Computation of Basic and Diluted Net Income Per Share *
for the three years ended December 31, 1997.
12 Statement Setting Forth Computation of Ratio of *
Earnings to Fixed Charges for the five years ended
December 31, 1997.
13 None.
16 None.
18 None.
21 Subsidiaries of the registrant *
22 None.
23 Consent of Price Waterhouse LLP. *
24 Powers of Attorney are incorporated by reference to
Exhibit 24 to the registrant's Annual Report on
Form 10-K for the period ended December 31, 1995 or
to
Exhibit 24 to the registrant's Annual Report on Form
10-K for the year ended December 31, 1996.
27 Financial Data Schedule for the year ended *
December 31, 1997.
28 None.
*Included herein.
<PAGE>
<PAGE>
<PAGE>
<PAGE>
Exhibit 3(a)
State of Indiana
OFFICE OF THE SECRETARY OF STATE
CERTIFICATE OF AMENDED ARTICLES OF INCORPORATION OF
STANDARD OIL COMPANY
I, Edwin J. Simcox, Secretary of State of Indiana, hereby
certify that Amended Articles of Incorporation for the above
Corporation have been filed, in the form prescribed by my office,
prepared and signed in duplicate in accordance with Chapter Four
of the Indiana General Corporation Act (IC 23-1-4). The name of
the corporation is amended as follows:
AMOCO CORPORATION
Now, therefore, upon due examination, I find that the Amended
Articles of Incorporation conform to law, and have endorsed my
approval upon the duplicate copies of such Articles; that all
fees have been paid as required by law; that one copy of such
Articles bearing the endorsement of my approval and filing has
been returned by me to the Corporation.
In Witness Whereof, I have hereunto
set my hand and
affixed the seal of the State of
Indiana, at the City of
Indianapolis, this 23rd day of
April, 1985.
(Seal of The State of Indiana)
/s/ Edwin J. Simcox
Edwin J. Simcox, Secretary of State
By /s/ Mark S. Adams
Deputy
<PAGE>
<PAGE>
AMENDED ARTICLES OF INCORPORATION
OF
STANDARD OIL COMPANY
(NOW AMOCO CORPORATION)
H. L. Fuller and R. E. Callahan, President and Secretary,
respectively, of Standard Oil Company, a corporation existing
under the Indiana General Corporation Act, as amended (the
"Corporation"), desiring to give notice of corporate action
effecting the amendment of its Articles of Incorporation of the
Corporation and the restatement of those Articles of
Incorporation, as so amended, in the form of these Amended
Articles of Incorporation, certify the following facts:
Subdivision A - Text of Amended Articles
The exact text of the entire Articles of Incorporation of
the Corporation as amended now is as follows:
Amended Articles of Incorporation of Amoco Corporation
The Amended Articles of Incorporation of Amoco Corporation,
a corporation duly organized and existing under and pursuant to
the provisions of The Indiana General Corporation Act, as amended
(the "Act"), which supersede and take the place of the heretofore
existing Articles of Incorporation, are as follows:
Article 1 - Name of the Corporation
The name of the Corporation is Amoco Corporation (the
"Corporation").
Article 2 - Purpose of the Corporation
The Corporation is organized for the purpose of engaging in
any and all lawful businesses for which corporations may be
incorporated under the Act.
Article 3 - Period of Existence of the Corporation
The period during which the Corporation shall continue to
exist as a corporation is perpetual.
Article 4 - Principal Office and Resident Agent of the
Corporation
Section 4.1 - Principal Office. The post office address of
the Principal Office of the Corporation is:
c/o Prentice-Hall Corporation System, Inc.
Circle Tower
Indianapolis, Indiana 46204
Section 4.2 - Resident Agent. The name and post office
address of the Resident Agent of the Corporation are:
Prentice-Hall Corporation System, Inc.
Circle Tower
Indianapolis, Indiana 46204
Article 5 - Number of Authorized Shares of the Corporation
The Corporation has authority to issue 900,000,000 shares,
all of which are shares without par value. Shares without par
value may be issued for such consideration as may be fixed from
time to time by the Board of Directors.
Article 6 - General Provisions Regarding Shares of the
Corporation
Section 6.1 - Common Stock. 800,000,000 of the shares which
the Corporation has authority to issue constitute a separate and
single class of shares known as Common Stock ("Common Stock").
The shares of Common Stock shall not be issued in series. All
shares of Common Stock shall be identical with each other in all
respects.
Section 6.2 - Voting Preferred Stock. 50,000,000 of the
shares which the Corporation has authority to issue constitute a
separate and single class of shares known as Voting Preferred
Stock ("Voting Preferred Stock"). The shares of Voting Preferred
Stock may be issued in one or more series. The Board of
Directors is vested with authority to determine and state the
designations and the relative rights, preferences,
qualifications, limitations and restrictions (other than voting
rights) of each such series by the adoption and filing in
accordance with the Act of an appropriate resolution or
resolutions authorizing the issuance of such series prior to the
issuance of such series. All shares of Voting Preferred Stock of
the same series shall be identical with each other in all
respects.
Section 6.3 - Non-Voting Preferred Stock. 50,000,000 of the
shares which the Corporation has authority to issue constitute a
separate and single class of shares known as Non-Voting Preferred
Stock ("Non-Voting Preferred Stock"). The shares of Non-Voting
Preferred Stock may be issued in one or more series. The Board
of Directors is vested with authority to determine and state the
designations and the relative rights, preferences,
qualifications, limitations and restrictions (other than voting
rights) of each such series by the adoption and filing in
accordance with the Act of a resolution or resolutions
authorizing the issuance of such series prior to the issuance of
such series. All shares of Non-Voting Preferred Stock of the
same series shall be identical with each other in all respects.
Section 6.4 - Issuance of Shares. The Board of Directors
has authority to authorize and direct the issuance by the
Corporation of shares of Common Stock, Voting Preferred Stock and
Non-Voting Preferred Stock at such times, in such amounts, to
such persons, for such considerations and upon such terms and
conditions as it may, from time to time, determine, subject only
to the restrictions, limitations, conditions and requirements
imposed by the Act, other applicable laws, these Amended Articles
of Incorporation and the resolution or resolutions authorizing
the issuance of any series of shares of Voting Preferred Stock or
Non-Voting Preferred Stock adopted by the Board of Directors
pursuant to Section 6.2 or Section 6.3 of these Amended Articles
of Incorporation.
Section 6.5 - Distribution Upon Shares. The Board of
Directors has authority to authorize and direct the payment of
dividends and the making of other distributions by the
Corporation in respect of shares of the issued and outstanding
Common Stock, Voting Preferred Stock and Non-Voting Preferred
Stock at such times, in such amounts and forms, from such sources
(specifically including, but not limited to, the unrestricted and
unreserved capital surplus of the Corporation) and upon such
terms and conditions as it may, from time to time, determine,
subject only to the restrictions, limitations, conditions and
requirements imposed by the Act, by other applicable laws, by
these Amended Articles of Incorporation and by the resolution or
resolutions authorizing the issuance of any series of shares of
Voting Preferred Stock or Non-Voting Preferred Stock adopted by
the Board of Directors pursuant to Section 6.2 or Section 6.3 of
these Amended Articles of Incorporation. The Board of Directors
has authority to authorize and direct the payment of dividends
and the making of distributions by the Corporation in respect of
shares of the issued and outstanding Common Stock, Voting
Preferred Stock or Non-Voting Preferred Stock in shares of the
same class or in shares of any other class without obtaining the
affirmative vote or the written consent of the class in which the
payment or distribution is to be made.
Section 6.6 - Acquisition of Shares. The Board of Directors
has authority to authorize and direct the acquisition by the
Corporation of the issued and outstanding shares of Common Stock,
Voting Preferred Stock and Non-Voting Preferred Stock at such
times, in such amounts, from such persons, for such
considerations, from such sources (specifically including, but
not limited to, the unrestricted and unreserved capital surplus
of the Corporation) and upon such terms and conditions as it may,
from time to time, determine, subject only to the restrictions,
limitations, conditions and requirements imposed by the Act, by
other applicable laws, by these Amended Articles of Incorporation
and by the resolution or resolutions authorizing the issuance of
any series of shares of Voting Preferred Stock or Non-Voting
Preferred Stock adopted by the Board of Directors pursuant to
Section 6.2 or Section 6.3 of these Amended Articles of
Incorporation.
Article 7 - Voting Rights of Shares of the Corporation
Section 7.1 - Common Stock. The holders of shares of Common
Stock have the right, voting separately by class, to cast one
vote for each duly authorized, issued and outstanding share of
Common Stock held by them upon each question or matter in respect
of which, under the Act, such holders are entitled to vote by
class. Such holders also have the right, voting in common with
the holders of shares of Voting Preferred Stock and not
separately by class, to cast one vote for each duly authorized,
issued and outstanding share of Common Stock held by them upon
each question or matter submitted generally to the holders of
shares of the Corporation in respect of which, under the Act,
voting by class or series is not required. The holders of shares
of Common Stock have the right, voting in common with the holders
of shares of Voting Preferred Stock and not separately by class,
to vote for the election of members of the Board of Directors to
be elected at any meeting of shareholders, other than those
members, if any, to be elected by the holders of shares of Voting
Preferred Stock and Non-Voting Preferred Stock in accordance with
Section 7.4 of these Amended Articles of Incorporation.
Section 7.2 - Voting Preferred Stock. The holders of shares
of Voting Preferred Stock have the right, voting separately by
class or by series, to cast one vote for each duly authorized,
issued and outstanding share of Voting Preferred Stock held by
them upon each question or matter in respect of which, under the
Act, such holders are entitled to vote by class or by series.
Such holders also have the right, voting in common with the
holders of shares of Common Stock and not separately by class or
by series, to cast one vote for each duly authorized, issued and
outstanding share of Voting Preferred Stock held by them upon
each question or matter submitted generally to the holders of
shares of the Corporation in respect of which, under the Act,
voting by class or by series is not required. The holders of
shares of Voting Preferred Stock have the right, voting in common
with holders of shares of Common Stock and not separately by
class, to vote for the election of members of the Board of
Directors to be elected at any meeting of shareholders, other
than those members, if any, to be elected by the holders of
Voting Preferred Stock and Non-Voting Preferred Stock in
accordance with Section 7.4 of these Amended Articles of
Incorporation.
Section 7.3 - Non-Voting Preferred Stock. The holders of
shares of Non-Voting Preferred Stock have the right, voting
separately by class or by series, to cast one vote for each duly
authorized, issued and outstanding share of Non-Voting Preferred
Stock held by them upon each question or matter in respect of
which, under the Act, such holders are entitled to vote by class
or by series. Such holders have no further voting rights other
than in accordance with Section 7.4 of these Amended Articles of
Incorporation.
Section 7.4 - Election of Directors by Holders of Preferred
Stock. If the Corporation shall, at any time, be in default in
the payment of dividends on any series of shares of Voting
Preferred Stock or Non-Voting Preferred Stock in an amount
equivalent to six quarterly dividends, the number of directors
constituting the Board of Directors of the Corporation shall
automatically be increased by two, and the holders of the shares
of all series of Voting Preferred Stock and Non-Voting Preferred
Stock in respect to which there shall be such a default shall
have the right, in addition to the other voting rights contained
in this Article 7, to elect, at the next ensuing special or
annual meeting of the shareholders, two individuals to fill the
vacancies created in the Board of Directors as a result of such
increase in the number of members of the Board of Directors.
The right to participate in the election of two individuals
to the Board of Directors to fill the positions created by such
increase shall continue, in the case of each series of shares of
Voting Preferred Stock or Non-Voting Preferred Stock having
cumulative dividend rights, until all arrearages in dividends
accumulated in respect of such shares shall have been paid in
full and, in the case of each series of shares of Voting
Preferred Stock or Non-Voting Preferred Stock not having
cumulative dividend rights, until dividends in respect of such
shares shall have been paid consecutively in an amount equal to
four quarterly dividend payments, and shall thereupon terminate.
In the case of any series of shares of Voting Preferred Stock or
Non-Voting Preferred Stock, this right once terminated shall not
revive unless and until the Corporation shall be in default in
payment of dividends in an amount equal to six quarterly
dividends in respect of dividend periods ending after the date
upon which this right shall have terminated in accordance with
the preceding sentence.
Section 7.5 - Vote Required. Any action required to be
taken by the shareholders of shares of Voting Preferred Stock or
Non-Voting Preferred Stock in respect of which, under the Act,
voting by class is required shall be taken pursuant to the
affirmative vote of two-thirds of the duly authorized, issued and
outstanding shares of such class.
Section 7.6 - Written Consent. Any action which may be
taken at a meeting of the shareholders of the Corporation can be
taken without a meeting only if, prior to such action, a consent
in writing setting forth the action so taken shall be signed by
all of the shareholders entitled to vote with respect thereto and
such written consent is filed with the minutes of the proceedings
of the shareholders.
Article 8 - Requirement for Commencing Business
The stated capital of the Corporation at April 23, 1985 is
at least one billion dollars ($1,000,000,000).
Article 9 - The Board of Directors of the Corporation
Section 9.1 - Election of Directors. The number of
directors of the Corporation shall be specified from time to time
by its By-Laws but in no event shall such number be less then
ten. The members of the Board of Directors, other than any
directors elected by holders of preferred stock pursuant to
Section 7.4, shall consist of three classes of membership as
nearly equal in number as practicable, as determined by the Board
of Directors. One class shall be elected to hold office
initially for one year until the annual meeting of shareholders
to be held in 1986; a second class shall be elected to hold
office initially for two years until the annual meeting of
shareholders to be held in 1987; and a third class shall be
elected to hold office for three years until the annual meeting
of shareholders to be held in 1988. The successors of the class
of directors whose term expires at any annual meeting shall be
elected to hold office for a term of three years expiring at the
annual meeting of shareholders to be held in the third year
following the year of election.
Section 9.2 - Vacancies. Subject to the rights of holders
of any preferred stock under Section 7.4, any vacancies on the
Board of Directors resulting from death, resignation, retirement,
disqualification, removal from office or other cause and newly
created directorships resulting from an increase in the number of
directors shall be filled by a majority vote of the remaining
directors then in office, and any directors so chosen shall hold
office for the remainder of the full term of the class of
director in which the vacancy occurred or in which the new
directorship was created. No decrease in the number of directors
shall shorten the term of any incumbent director.
Section 9.3 - Removal of Directors. Subject to the rights
of holders of any preferred stock under Section 7.4, members of
the Board of Directors may be removed from office only for cause
and by vote, at a meeting of shareholders called for that
purpose, of 75 percent of the shares then entitled to vote at an
election of directors.
Section 9.4 - Amendment of Article 9. The provisions of
this Article 9 may be amended, altered or repealed only at a
meeting of shareholders by vote of the holders of 75 percent of
the shares then entitled to vote on amendments to these Articles
of Incorporation.
Article 10 - Identity of Members of the Board of Directors of the
Corporation
The names and addresses of the directors of the Corporation
holding office at the time of adoption of these Amended Articles
of Incorporation are as follows:
Leland C. Adams 200 E. Randolph Drive, Chicago, IL 60601
Karl D. Bays One American Plaza, Evanston, IL 60201
Henry O. Boswell 200 E. Randolph Drive, Chicago, IL 60601
John H. Bryan Jr. Three First National Plaza, Chicago, IL 60602
James W. Cozad 200 E. Randolph Drive, Chicago, IL 60601
Richard J. Ferris Post Office Box 66100, Chicago, IL 60666
James C. Fletcher 7925 Jones Branch Drive, McLean, VA 22102
H. Laurance Fuller 200 E. Randolph Drive, Chicago, IL 60601
Frederick G. Jaicks 30 W. Monroe Street, Chicago, IL 60603
Richard H. Leet 200 E. Randolph Drive, Chicago, IL 60601
Robert H. Malott 200 E. Randolph Drive, Chicago, IL 60601
Walter E. Massey 5801 S. Ellis Street, Chicago, IL 60637
Richard M. Morrow 200 E. Randolph Drive, Chicago, IL 60601
Walter R. Peirson 200 E. Randolph Drive, Chicago, IL 60601
Arthur E. Rasmussen 155 N. Michigan Avenue, Chicago, IL 60601
Richard D. Wood 307 E. McCarty Street, Indianapolis, IN 46225
The names and addresses of the President and the Secretary
of the Corporation holding office at the time of adoption of
these Amended Articles of Incorporation are:
H. Laurance Fuller, President 200 E. Randolph Drive, Chicago, IL 60601
Ronald E. Callahan, Secretary 200 E. Randolph Drive, Chicago, IL 60601
Article 11 - Location of Meetings of Shareholders
All meetings of the shareholders of the Corporation shall be
held at such location, within or outside the State of Indiana, as
may from time to time be designated by resolution of the Board of
Directors as provided in the By-Laws.
Subdivision B - Manner of Adoption and Vote
Section 1 - Action by Board of Directors. The Board of
Directors of the Corporation, at a meeting which was duly called,
constituted and held on February 26, 1985, and at which a quorum
was present and voting throughout, duly adopted a resolution
proposing to the shareholders of the Corporation that the
Articles of Incorporation of the Corporation be amended to
provide as set forth in these Amended Articles of Incorporation
and directing that that proposal be submitted to a vote of the
shareholders at their next ensuing annual meeting.
Section 2 - Action by Shareholders. The shareholders of the
Corporation, at the annual meeting which was duly called,
constituted and held on April 23, 1985, and at which a quorum was
present and voting throughout, duly adopted a resolution amending
the Articles of Incorporation to provide as set forth in these
Amended Articles of Incorporation. The number of shares of the
Corporation entitled to vote in respect of the amendment, the
number of shares voted in favor of the adoption of the amendment
and the number of shares voted against the adoption of the
amendment, were as follows:
Number of Shares Entitled to Vote 269,451,782
Number of Shares Voted in Favor 176,063,244
Number of Shares Voted Against 31,321,993
Section 3 - Compliance With Legal Requirements. The manner
of the adoption of the amendment, and the vote by which it was
adopted, constitute full legal compliance with the provisions of
The Indiana General Corporation Act, as amended, and the Articles
of Incorporation and By-Laws of the Corporation.
Subdivision C - Statement of Changes Made With Respect to Number
of Shares Authorized
The number of shares which the Corporation was authorized to
issue before the amendment, the additional number of shares which
the Corporation is authorized to issue by the adoption of the
amendment and the total number of shares which the Corporation is
authorized to issue after adoption of the amendment are as
follows:
Authorized Shares Authorized Shares Authorized Shares
Class Before Amendment Added by Amendment After Amendment
Common Stock
without par value 800,000,000 0 800,000,000
Non-Voting Preferred
Stock without par value 0 50,000,000 50,000,000
Voting Preferred Stock
without par value 0 50,000,000 50,000,000
Total Authorized
Shares 800,000,000 100,000,000 900,000,000
These Amended Articles of Incorporation have been executed
as of April 23, 1985.
/s/ H. L. Fuller /s/ R. E. Callahan
H. L. Fuller, President R. E. Callahan, Secretary
_________________________________________________________________
___________________
STATE OF ILLINOIS )
) SS:
COUNTY OF COOK )
On April 23, 1985, before me, a Notary Public having
jurisdiction to act in my capacity as such within such State and
County, personally appeared H. L. Fuller and R. E. Callahan, the
President and Secretary, respectively, of Standard Oil Company,
each of whom, being first duly sworn by me upon his oath
according to law, acknowledged his execution of these Amended
Articles of Incorporation and stated that the facts set forth
therein were true.
/s/ Christine S. Sumida
Notary Public
Christine S. Sumida
Printed Signature
My commission expires:
December 9, 1986
This instrument prepared by:
Stephen F. Gates, Esq.
200 East Randolph Drive
Chicago, Illinois 60601
<PAGE>
<PAGE>
STATE OF INDIANA
OFFICE OF THE SECRETARY OF STATE
ARTICLES OF AMENDMENT
To Whom These Presents Come, Greeting:
WHEREAS, there has been presented to me at this office, Articles
of Amendment for:
AMOCO CORPORATION
and said Articles of Amendment have been prepared and signed in
accordance with the provisions of the Indiana Business
Corporation Law, as amended.
NOW, THEREFORE, I, SUE ANNE GILROY, Secretary of State of
Indiana, hereby certify that I have this day filed said articles
in this office.
The effective date of these Articles of Amendment is March 12,
1998.
In Witness Whereof, I have hereunto set my hand and affixed the
seal of the State of Indiana, at the City of Indianapolis, this
Twelfth day of March, 1998.
/s/ Sue Anne Gilroy
SUE ANNE GILROY, Secretary of State
Deputy
SUE ANNE GILROY
SECRETARY OF STATE
CORPORATIONS DIVISION
302 W. Washington St., Rm. E018
Indianapolis, IN 46204
Telephone: (317) 232-8576
ARTICLES OF AMENDMENT OF THE
ARTICLES OF INCORPORATION
State Form 38333 (R8/12-96)
Approved by State Board of Accounts 1995
Indiana Code 23-1-38-1 et esq.
Filing Fee: $30.00
INSTRUCTIONS: Use 8 1/2" x 11" white paper for inserts.
Present original and two copies to address in upper right hand
corner of this form. Please TYPE or PRINT.
ARTICLES OF AMENDMENT OF THE
ARTICLES OF INCORPORATION OF:
Name of Corporation:
AMOCO CORPORATION
Date of Incorporation:
6-18-89
The undersigned officers of the above referenced Corporation
(hereinafter referred to as the "Corporation") existing pursuant
to the provisions of: (indicate appropriate act)
X Indiana Business Corporation Law
Indiana Professional Corporation Act of 1983
as amended (hereinafter referred to as the "Act"), desiring to
give notice of corporate action effectuating amendment to certain
provisions of its Articles of Incorporation, certify the
following facts:
ARTICLE I Amendment(s)
The exact text of Article(s) 5 of the Articles
ARTICLE 5
NUMBER OF AUTHORIZED SHARES OF THE
CORPORATION
The Corporation has authority to issue 1,700,000,000 shares, all
of which are shares without par value. Shares without par value
may be issued for such consideration as may be fixed from time to
time by the Board of Directors.
The exact text of Article(s) 6 Section 6.1 of the Articles
ARTICLE 6
GENERAL PROVISIONS REGARDING SHARES OF THE
CORPORATION
Section 6.1. Common Stock. 1,600,000,000 of the shares which
the Corporation has authority to issue constitute a separate and
single class of shares known as Common Stock ("Common Stock").
The shares of Common Stock shall not be issued in series. All
shares of Common Stock shall be identical with each other in all
respects.
ARTICLE II
Date of each amendment's adoption:
January 27, 1998
(Continued on reverse side)
(IND. - 1026 - 6/6/97)
ARTICLE III Manner of Adoption and Vote
Mark applicable section. NOTE - Only in limited situations does
Indiana law permit an Amendment without shareholder approval.
Because a name change requires shareholder approval, Section 2
must be marked and either A or B completed.
X SECTION 1 This amendment was adopted by the Board of
Directors or incorporators and shareholder action was not
required.
SECTION 2 The shareholders of the Corporation entitled to vote
in respect to the amendment adopted the proposed amendment. The
amendment was adopted by: (Shareholder approval may be by either
A or B.)
A. Vote of such shareholders during a meeting called by the
Board of Directors. The result of such vote is as follows:
Shares entitled to vote.
Number of shares represented at the meeting.
Shares voted in favor.
Shares voted against.
B. Unanimous written consent executed on
__________________________, 19_____ and signed by all such
shareholders entitled to vote.
ARTICLE IV Compliance with Legal Requirements
The manner of the adoption of the Articles of Amendment and the
vote by which they were adopted constitute full legal compliance
with the provisions of the Act, the Articles of Incorporation,
and the By-Laws of the Corporation.
I hereby verify, subject to the penalties of perjury, that the
statements contained herein are true, this 11th day of March,
1998.
Signature of current officer or chairman of the board.
/s/ S. F. Gates
Printed name of officer or chairman of the board
S. F. Gates
Signature's title
Vice President, General Counsel and Corporate Secretary
<PAGE>
<PAGE>
<PAGE>
<PAGE>
Exhibit 3(b)
[LOGO]
BY-LAWS
AMENDED JANUARY 27, 1998
AMOCO CORPORATION
<PAGE>
<PAGE>
AMOCO CORPORATION
INDEX TO BY-LAWS
Description Page
Article 1 - Shareholders
Section 1. Annual Meeting 1
Section 2. Special Meetings 1
Section 3. Notice of Meetings 1
Section 4. Location 1
Section 5. Quorum 1
Section 6. Adjournment 1
Section 7. Organization 1
Section 8. Voting 1
Section 9. List of Shareholders 2
Article II - Directors
Section 1. Number 2
Section 2. Term of Office 2
Section 3. Vacancies 2
Section 4. Annual Meeting of Board 2
Section 5. Regular Meetings 2
Section 6. Special Meetings 2
Section 7. Adjournments 3
Section 8. Quorum 3
Section 9. Chairman 3
Section 10. Place of Meeting 3
Article III - Committees
Section 1. Designation of Committees 3
Section 2. Executive Committee 3
Article IV - Officers
Section 1. Titles, Election, Appointment and Tenure 3
Section 2. Powers 3
Section 3. Chairman of the Board 3
Section 4. Corporate Secretary and Assistant Corporate
Secretaries 3
Section 5. Controller and Assistant Controllers 4
Article V - Shares
Section 1. Form 4
Section 2. Transfer and Cancellation of Shares 4
Section 3. Regulations 4
Section 4. Fixing Dates of Record 5
Section 5. Shareholder Addresses 5
Article VI - Corporate Seal 5
Article VII - Fiscal Year 5
Article VIII - Indemnification of Directors, Officers and
Others 5
Description Page
Article IX - Emergency By-Laws
Section 1. Applicability 6
Section 2. Emergency Meeting 6
Section 3. Substitute Directors 6
Section 4. Extreme Emergency 6
Section 5. Power/Substitute Officers 7
Section 6. Term 7
Article X - Amendments to By-Laws 7
<PAGE>
<PAGE>
AMOCO CORPORATION
BY-LAWS
Article I - Shareholders
Section 1. Annual Meeting. The annual meeting of
shareholders shall be held on the fourth Tuesday in April of each
year for the purpose of electing directors and for the
transaction of other business.
Section 2. Special Meetings. Special meetings of the
shareholders may be called by the Chairman of the Board, or by a
majority of the actual number of directors elected and qualified
from time to time. The business of any such special meeting
shall be confined to the subject or subjects specified in the
notice thereof.
Section 3. Notice of Meetings. Notice of each meeting of
shareholders stating the place, day and hour of the meeting and,
in the case of a special meeting, the purpose or purposes for
which the meeting is called, shall be delivered or mailed by the
Corporate Secretary to each shareholder of record entitled to
vote at such meeting, at such address as appears upon the books
of the Corporation, at least ten (10) days and not more than
sixty (60) days before the date of the meeting.
Section 4. Location. Meetings of the shareholders shall be
held at such location as shall be determined with respect to any
such meeting by resolution of the Board of Directors, except that
the Chairman of the Board shall determine the location of any
special meeting of the shareholders which is called by the
Chairman of the Board.
Section 5. Quorum. At any shareholders meeting the holders
of a majority of the voting power of each class of the issued and
outstanding shares entitled to vote at such meeting, represented
in person or by proxy, shall constitute a quorum.
Section 6. Adjournment. Any meeting of shareholders may
adjourn from time to time and no further notice of such adjourned
meeting or meetings shall be necessary unless a new record date
is set. If at any such meeting there shall be no quorum, a
majority in interest of the shareholders attending in person or
by proxy may adjourn the meeting from time to time without
further notice until a quorum shall attend.
Section 7. Organization. The Chairman of the Board, or in
his or her absence a Vice Chairman or the President of the
Corporation, or in the absence of all of them a director
appointed by a majority of the directors present, shall preside
as Chairman of meetings of the shareholders. The Corporate
Secretary shall act as Secretary of all meetings of shareholders
or, if absent, the Chairman of the meeting may appoint a
Secretary. The Chairman of the meeting shall have the power and
the duty to preserve order and to ensure that the meeting is
properly conducted and that the shareholders, both present and
absent, are treated fairly and in good faith. Without limiting
the generality of the foregoing, the Chairman of the meeting
shall declare any shareholder proposal to be out of order if
notice of such proposal was not properly given. Notice shall be
properly given only if it is received by the Corporate Secretary
not less than 90 days or more than 120 days prior to the
anniversary of the preceding year's annual meeting and contains
(a) a brief description of the business desired to be brought
before the meeting, (b) the name and address of the shareholder
proposing such business, and if such shareholder is not a holder
on the Corporation's stock records, evidence demonstrating
beneficial ownership of shares, (c) the total number of shares
beneficially owned by the shareholder, and (d) disclosure of any
interest of the shareholder in, or benefit from such business,
which interest or benefit is not shared with other shareholders
at large.
Section 8. Voting. At all meetings of the shareholders each
shareholder shall be entitled to one vote for each share
registered in such shareholder's name at the close of business on
the date of record fixed by the Board of Directors, or, if any
holder acquires title to a share after that date, such holder
shall be entitled to one vote for each share for which such
holder has received a proxy from the shareholder of record. Such
vote may be given in person or by proxy duly executed in writing
by the shareholder or the shareholder's duly authorized attorney-
in-fact. The election of directors shall be decided by a
plurality of the votes cast by the shares entitled to vote in the
election. Action on a matter other than the election of
directors is approved if the number of shares cast "for" the
proposal exceeds the number of shares cast "against" the
proposal, unless otherwise provided by statute or by the Articles
of Incorporation. The Board of Directors shall prescribe rules
and regulations for voting, consistent with the laws of Indiana
and these By-Laws, and shall appoint inspectors to collect and
count the votes and cause the result of a vote on any matter
voted upon to be entered in the minutes of the shareholders'
meeting. The inspectors shall also pass upon the qualification
of voters, the validity of proxies, and the acceptance or
rejection of votes. No person who is a candidate for the office
of director shall act as inspector with respect to a vote for
election of directors. The Corporate Secretary shall keep true
records of the votes on election of directors and other
proceedings at shareholders meetings, but it shall not be
necessary to record at length upon such records the names of the
shareholders voting, and only the totals of the votes cast "for,"
"against" or "abstain" on any proposition voted upon by the
shareholders need be recorded.
Section 9. List of Shareholders. The Corporate Secretary
shall make, at least five (5) business days before each
shareholders meeting, a complete list of the shareholders
entitled to vote at said meeting, arranged in alphabetical order
with the address and number of shares so entitled to vote held by
each, which list shall be on file at the principal office of the
Corporation, and subject to inspection by any shareholder for a
proper purpose. Such list shall be produced and kept open at the
time and place of the meeting and subject to inspection by any
shareholder during the holding of such meeting. The original
stock register or transfer record (which may be maintained on
magnetic tape or other electrical storage form), or a duplicate
thereof or printout therefrom, shall be the only evidence as to
who are the shareholders entitled to examine such list or the
stock register or transfer record, or to vote at the meeting of
shareholders.
Article II - Directors
Section 1. Number. The Board of Directors shall consist of
at least twelve (12) and not more than twenty (20) persons, as
fixed from time to time by the Board of Directors.
Section 2. Term of Office. The members of the Board of
Directors shall consist of three (3) classes of membership as
nearly equal in number as practicable, as determined by the Board
of Directors. The successors of the class of directors whose
term expires at any annual meeting shall be elected to hold
office for a term of three (3) years expiring at the annual
meeting of shareholders to be held in the third year following
the year of election. The Board of Directors may adopt from time
to time a director retirement or other tenure policy.
Section 3. Vacancies. Any vacancies on the Board of
Directors resulting from death, resignation, retirement,
disqualification, removal from office or other cause and newly
created directorships resulting from an increase in the number of
directors shall be filled by a majority vote of the remaining
directors then in office, and any directors so chosen shall hold
office for the remainder of the full term of the class of
director in which the vacancy occurred or in which the new
directorship was created. No decrease in the number of directors
shall shorten the term of any incumbent director.
Section 4. Annual Meeting of the Board. After each annual
meeting of shareholders, the directors shall meet forthwith for
the transaction of business. No prior notice of such meeting
shall be required.
Section 5. Regular Meetings. Regular meetings of the Board
shall be held, without notice, at the office of the Corporation
at 200 East Randolph Drive, Chicago, Illinois, at such times as
may be fixed from time to time by resolution of the Board.
Section 6. Special Meetings. Special meetings of the Board
of Directors may be called by the Chairman of the Board, or in
his or her absence by a Vice Chairman or the President of the
Corporation, or in the absence of all of them by any director,
upon at least twenty-four (24) hours prior notice to each
director, either personally or by mail or telegram. Special
meetings shall be called by the Chairman of the Board, or the
Corporate Secretary, in like manner and on like notice on the
written request of four directors.
Section 7. Adjournments. If less than a quorum is present at
any meeting, those directors present may adjourn from time to
time until a quorum shall be present.
Section 8. Quorum. A majority of the actual number of
directors elected and qualified from time to time, and for the
time being in office, shall be necessary to constitute a quorum
for the transaction of any business, and the act of a majority of
the directors present at a meeting at which a quorum is present,
shall be the act of the Board of Directors, unless the act of a
greater number is required by statute, the Articles of
Incorporation or these By-Laws.
Section 9. Chairman. At all meetings of the Board, the
Chairman of the Board, or in his or her absence a Vice Chairman
or the President of the Corporation, or in the absence of all of
them a chairman pro tem chosen by the directors present, shall
preside.
Section 10. Place of Meeting. The Board of Directors may, at
their option, hold any special meeting at any place, either
within or outside the State of Indiana.
Article III - Committees
Section 1. Designation of Committees. The Board may from
time to time, by resolution adopted by a majority of the
directors then in office, (i) designate any three (3) or more of
its members to constitute an Executive Committee and specify the
number of directors which shall constitute a quorum for the
transaction of any business, (ii) designate any one (1) or more
of its members to constitute any other Committee, and (iii)
designate or change the functions and authority of, fill any
vacancies on, change the members on, or terminate the existence
of any such Committee.
Section 2. Executive Committee. During the intervals between
meetings of the Board, and subject to such limitations as may be
required by resolution of the Board, the Articles of
Incorporation, these By-Laws or applicable law, the Executive
Committee shall have and may exercise all of the authority of the
Board.
Article IV - Officers
Section 1. Titles, Election, Appointment and Tenure. The
Board of Directors shall elect a Chairman of the Board, a
Corporate Secretary, and a Controller and may elect such other
officers with such titles as the resolution of the Board electing
them shall designate. The Chairman of the Board is authorized to
appoint officers of the Corporation to offices other than Vice
Chairman, President and those offices specified above. Each
officer shall hold office until his or her resignation, removal,
death, retirement or termination of employment with the
Corporation. The Board of Directors (or, for officers appointed
by the Chairman, the Chairman) may remove any officer, either
with or without cause, at any time.
Section 2. Powers. All officers of the Corporation shall
have such authority and perform such duties in the management and
operation of the Corporation as shall be prescribed in these By-
Laws, the resolutions of the Board of Directors electing them or
the documents appointing them, and shall have such additional
authority and duties as are incident to their offices except to
the extent that such resolutions or documents of appointment may
be inconsistent therewith.
Section 3. Chairman of the Board. The Chairman of the Board
shall be a member of the Board of Directors, shall be the Chief
Executive Officer of the Corporation and shall preside at all
meetings of the shareholders and of the directors. Subject to
the direction of the Board, he or she shall have and exercise
general charge and supervision over the business and affairs of
the Corporation.
Section 4. Corporate Secretary and Assistant Corporate
Secretaries. The Corporate Secretary shall attend all meetings
of the shareholders and the Board of Directors and shall record
and keep minutes thereof in books provided for the purpose; shall
attend to the giving of all required notices of meetings of the
directors and shareholders; shall have the care and custody of
the corporate seal,minute books, and other books, documents and
records pertaining to the Corporate Secretary's office and may
authenticate records of the Corporation; shall sign, with the
proper officers such contracts and other documents as may require
the Corporate Secretary's signature and shall, in proper cases,
affix the corporate seal thereto; shall, from time to time,
render to the Board of Directors and the Chairman of the Board
such statements and reports pertaining to the Corporate
Secretary's office and duties as they may require; and shall
perform such other duties as may be assigned to him or her by the
Board or the Chairman of the Board. An Assistant Corporate
Secretary may perform any duties of the Corporate Secretary in
the absence of the Corporate Secretary, or whenever requested by
the Corporate Secretary, and shall perform such other duties as
may be assigned to him or her by the Board or the Chairman of the
Board. In the absence of the Corporate Secretary and of all
Assistant Corporate Secretaries, minutes of any meetings may be
kept by a secretary pro tem appointed for that purpose by the
presiding officer.
Section 5. Controller and Assistant Controllers. The
Controller, under such general supervision as may be determined
by the Chairman of the Board, shall have general charge and
responsibility for the accounting affairs of the Corporation, the
keeping of the corporate, general and cost accounting books and
records of the Corporation, and other documents and papers
necessary to properly reflect the business and corporate
transactions upon the books of the Corporation. An Assistant
Controller may perform any duties of the Controller in the
absence of the Controller, or whenever requested by the
Controller.
Article V - Shares
Section 1. Form.
(a) Shares of the Corporation may be issued with or without
certificates, as determined by the Board of Directors from time
to time. All shares of the same class or series shall have the
same rights, preferences, qualifications, limitations and
restrictions as other shares of the same class or series
regardless of whether such shares are represented by
certificates.
(b) Certificates for shares of the Corporation shall be in such
form as shall be approved by the Board and shall be signed by the
Chairman of the Board and the Corporate Secretary, whose
signatures thereon may consist of printed facsimiles. Each
certificate shall be countersigned by any authorized transfer
agent, and by any authorized registrar, whose signatures thereon
may consist of printed facsimiles. Certificates shall be
numbered consecutively as issued within each class of shares, and
the name of the registered holder, the number of shares, and date
of issuance shall be entered in the proper books of the
Corporation.
Section 2. Transfer and Cancellation of Shares. Shares shall
be transferable at the office of any authorized transfer agent,
and on the books of the Corporation by the record holder thereof
in person, or by the record holder's duly authorized attorney
appointed in writing. Except as herein provided, no certificate
for shares shall be issued in lieu of a former certificate until
such former certificate shall have been surrendered and canceled.
A new certificate may be issued in the name of the appropriate
State Officer or Office without surrender of the original
certificate for shares presumed abandoned under the provisions of
applicable State escheat or abandoned property statutes. With
respect to certificates alleged to have been lost, stolen, or
destroyed, a new certificate may be issued in the name of the
record holder (or legal representative of the record holder)
without surrender of the original certificate, but only upon
production of such evidence of the loss, theft, or destruction of
the original certificate, and upon delivery to the Corporation of
a bond of indemnity in such amount and upon such terms as the
Corporation, in its discretion, may require.
Section 3. Regulations. The Board may make such rules and
regulations as it may deem expedient from time to time concerning
the issuance, transfer and registration of certificates for
shares of the Corporation.
Section 4. Fixing Dates of Record. The Board of Directors
may, by resolution, fix, in advance, a date not exceeding seventy
(70) days preceding the date of any meeting of shareholders, or
the date for the payment of any dividend, or the date for the
allotment of any rights, or the date when any change or
conversion or exchange of shares shall go into effect, as a
record date for the determination of the shareholders entitled to
notice of, and to vote at, any such meeting, or entitled to
receive payment of any such dividend, or entitled to receive any
such allotment of rights, or to exercise the rights in respect to
any such change, conversion or exchange of shares, and in such
case only shareholders of record on the date so fixed shall be
entitled to notice of and, subject to the provision of Section 8
of Article I hereof, to vote at any such meeting, or to receive
payment of such dividend, or to receive such allotment of rights
or exercise such rights, as the case may be, notwithstanding any
transfer of any shares on the books of the Corporation after such
record date fixed as aforesaid.
Section 5. Shareholder Addresses. Every Shareholder shall
furnish the Corporate Secretary with an address to which notices
of meetings of the shareholders and all other notices may be
served or mailed, and in default thereof notices may be addressed
to the shareholder's last known address.
Article VI - Corporate Seal
The Corporation's corporate seal shall be a circular impression
bearing the words "Amoco Corporation" and the date "1889" around
the margin and the word "Indiana" in the center.
Article VII - Fiscal Year
The fiscal year of the Corporation shall be the calendar year.
Article VIII - Indemnification of Directors, Officers and Others
To the extent not inconsistent with Indiana law as in effect from
time to time, every person (and the heirs, executors and
administrators of such person) who is or was a director or
officer of the Corporation shall in accordance with the
provisions of this Article be indemnified by the Corporation
against any and all liability and reasonable expense that may be
incurred by him or her in connection with or resulting from any
claim, action, suit or proceeding; provided that such director or
officer is wholly successful with respect thereto or acted in
good faith, in what he or she reasonably believed to be either in
the best interests of the Corporation or, for matters outside the
person's official capacity, not opposed to the Corporation's best
interests; and, in addition, with respect to any criminal action
or proceeding, had reasonable cause to believe that his or her
conduct was lawful or had no reasonable cause to believe that his
or her conduct was unlawful. "Claim, action, suit or proceeding"
shall include any claim, action, suit or proceeding (whether
brought by or in the right of the Corporation or any other
corporation or otherwise), civil, criminal, administrative or
investigative, or threat thereof, in which a director or officer
of the Corporation (or his or her heirs, executors or
administrators) may become involved, as a party or otherwise:
(a) by reason of such person being or having been a
director or officer of the Corporation, or of any subsidiary
corporation of the Corporation, or of any other corporation
which he or she served as such at the request of the
Corporation and of which the Corporation directly or
indirectly is a shareholder or creditor, or in which, or in
the stocks, bonds, securities or other obligations of which,
it is in any way interested, or
(b) by reason of such person acting or having acted in any
capacity in a corporation, partnership, association, trust,
foundation, not-for-profit corporation or other organization
or entity where he or she served as such at the request of
the Corporation, or
(c) by reason of any action taken or not taken by such
person in any such capacity, whether or not he or she
continues in such capacity at the time such liability or
expense shall have been incurred.
The terms "liability" and "expense" shall include, but shall not
be limited to, counsel fees and disbursements and amounts of
judgments, fines or penalties against, and amounts paid in
settlement by or on behalf of, a director or officer, but shall
not in any event include any liability or expenses on account of
profits realized by him or her in the purchase or sale of
securities of the Corporation. The termination of any claim,
action, suit or proceeding, by judgment, settlement (whether with
or without court approval) or conviction or upon a plea of guilty
or of nolo contendere, or its equivalent, shall not create a
presumption that a director or officer did not meet the standards
of conduct set forth in this Article. The determination of
whether indemnification is permissible hereunder, and any
reimbursement of expenses in advance of final disposition of a
proceeding, shall be made in accordance with the procedures set
forth in the Indiana Business Corporation Law at the time in
effect.
The rights of indemnification provided in this Article shall be
in addition to any rights to which any such director or officer
may otherwise be entitled by contract or as a matter of law.
Persons who are not directors or officers of the Corporation but
are employees of the Corporation or any subsidiary or are
directors or officers of any subsidiary may be indemnified to the
extent authorized at any time or from time to time by the Board
of Directors.
Irrespective of the provisions of this Article, the Board of
Directors may, at any time or from time to time, approve
indemnification of directors and officers or other persons to the
full extent permitted by the provisions of the Indiana Business
Corporation Law at the time in effect, whether on account of past
or future transactions.
To the extent not inconsistent with Indiana law as in effect from
time to time, the Board of Directors may, at any time or from
time to time, approve the purchase and maintenance of insurance
on behalf of any such director, officer or other person against
any liability asserted against him or her in his or her capacity
or arising out of his or her status as a director, officer,
employee or agent of the Corporation or any corporation,
partnership, association, trust, foundation, not-for-profit
corporation or other organization or entity which he or she
served as such at the request of the Corporation, whether or not
the Corporation would have the power to indemnify him or her
under the provisions of this Article.
Article IX - Emergency By-Laws
Section 1. Applicability. This Article shall apply only
during an emergency which is defined for purposes hereof as any
period of time during which an extraordinary event prevents a
quorum of the Board of Directors from assembling in time to deal
with the business for which the meeting has been or is to be
called.
Section 2. Emergency Meeting. After the extraordinary event
giving rise to the emergency has occurred, any director may call
an emergency meeting by giving at least twenty-four (24) hours
advance notice thereof in whatever manner is reasonably
calculated to give actual notice to those directors whom it is
practicable to reach.
Section 3. Substitute Directors. A majority of directors
present at such emergency meeting may appoint substitute
directors (i) from a list of Emergency Directors approved in
advance of the emergency by a majority of the directors then in
office, and (ii) from among any of the following officers of the
Corporation: Senior Vice President, Vice President, Treasurer
and Controller. Each substitute director so appointed shall be
treated for all purposes as a director, and such appointment
shall expire upon cessation of the emergency giving rise to such
appointment.
Section 4. Extreme Emergency. If the emergency is of such a
nature that none of the directors is available or able to call a
meeting in accordance with Section 2 above, then (i) all of the
Emergency Directors on the list established in accordance with
Section 3 above shall be automatically deemed to be substitute
directors, (ii) any of the Emergency Directors may call an
emergency meeting in accordance with the procedure set forth in
Section 2 above, (iii) any three (3) of the Emergency Directors
shall constitute a quorum at such meeting, and (iv) a majority of
the Emergency Directors at such meeting may appoint additional
substitute directors from among the officers and employees of the
Corporation and its subsidiaries.
Section 5. Power/Substitute Officers. Each substitute
director appointed under this Article shall be treated for all
purposes as a regular director, and the Board of Directors
constituted under this Article shall have all of the powers of
the regular Board. The Board of Directors constituted hereunder
may appoint substitute officers to have the powers and to carry
out the duties of any officers of the Corporation who are
unavailable because of the emergency.
Section 6. Term. The term of any substitute director or any
substitute officer appointed under this Article shall expire
automatically upon the cessation of the emergency giving rise to
the appointment.
Article X - Amendments to By-Laws
These By-Laws, or any of them, may be altered, amended or
repealed by resolution of the Board of Directors adopted by
affirmative vote of a majority of the directors then in office.
* * *
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Exhibit 10(b)
STOCK OPTION AGREEMENT UNDER
THE 1991 INCENTIVE PROGRAM OF
AMOCO CORPORATION AND ITS PARTICIPATING SUBSIDIARIES
Agreement dated March 25, 1997 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 $90.1875 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
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Exhibit 10(g)
AMOCO EMPLOYEE SAVINGS PLAN
As Amended and Restated
July 1, 1996
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ARTICLE I INTRODUCTION 1
1.1 JULY 1, 1996 AMENDMENT AND RESTATEMENT OF PLAN 1
1.2 COMPLIANCE WITH CODE AND ERISA 1
1.3 EXCLUSIVE BENEFIT OF PARTICIPANTS 1
1.4 LIMITATION ON RIGHTS CREATED BY PLAN 2
1.5 APPLICATION OF PLAN'S TERMS 2
1.6 BENEFITS NOT GUARANTEED 2
ARTICLE II DEFINITIONS 3
2.1 ADMINISTRATIVE AND RECORDKEEPING SERVICES AGREEMENT 3
2.2 AFFILIATED COMPANY 3
2.3 AFTER-TAX SAVINGS CONTRIBUTIONS 4
2.4 ALTERNATE PAYEE 4
2.5 AMOCO 4
2.6 APPLICABLE COMPENSATION 4
2.7 BENEFICIARY 5
2.8 CASUAL EMPLOYEE 5
2.9 CODE 6
2.10 EMPLOYEE 6
2.11 EMPLOYER 6
2.12 ENTRY DATE 6
2.13 ERISA 6
2.14 HIGHLY-COMPENSATED EMPLOYEE 6
2.15 HOUR OF SERVICE 9
2.16 NORMAL RETIREMENT AGE 11
2.17 PART-TIME EMPLOYEE 11
2.18 PARTICIPANT 11
2.19 PLAN 11
2.20 PLAN YEAR 11
2.21 REGULAR EMPLOYEE 11
2.22 SAVINGS CONTRIBUTIONS 11
2.23 SURVIVING SPOUSE 11
2.24 TAX-DEFERRED SAVINGS CONTRIBUTIONS 12
2.25 TEMPORARY EMPLOYEE 12
2.26 TRUST AGREEMENT 12
2.27 TRUST FUND 12
2.28 TRUSTEE 12
ARTICLE III PARTICIPATION 13
3.1 ELIGIBLE CLASS 13
3.2 PARTICIPATION 13
3.3 END OF PARTICIPATION 14
3.4 REENTRY OF FORMER PARTICIPANT 14
ARTICLE IV SAVINGS CONTRIBUTIONS BY PARTICIPANTS 15
4.1 SAVINGS CONTRIBUTIONS 15
4.2 ENROLLMENT FOR SAVINGS CONTRIBUTIONS 15
4.3 COLLECTION OF SAVINGS CONTRIBUTIONS 16
4.4 CHANGE IN SAVINGS CONTRIBUTIONS 16
(A) INCREASE OR REDUCTION 16
(B) SUSPENSION 16
(C) RESUMPTION 16
(D) PLAN ADMINISTRATOR RULES 16
4.5 CONTRIBUTIONS CONTINGENT ON DEDUCTABILITY 16
4.6 RETURN OF EMPLOYER CONTRIBUTIONS 17
4.7 TWO SEPARATE CONTRACTS 17
4.8 401(K) TAX-DEFERRED SAVINGS CONTRIBUTIONS LIMITS 17
4.9 401(K) DEFERRAL PERCENTAGE 18
4.10 HIGHER AND LOWER PAID GROUPS 19
(A) HIGHER PAID GROUP 19
(B) LOWER PAID GROUP 19
4.11 MONITORING PARTICIPANTS' 401(K) DEFERRAL PERCENTAGES;
ADJUSTMENTS 19
(A) ADJUSTMENTS FROM THE TOP DOWN 19
(B) TIMING OF ADJUSTMENTS 19
(C) EARNINGS ON EXCESS TAX-DEFERRED SAVINGS CONTRIBUTIONS 20
(D) ANNUAL ADDITIONS FOR CODE SECTION 415 21
4.12 LIMIT ON TDS CONTRIBUTIONS 21
4.13 DIRECT ROLLOVER CONTRIBUTIONS 22
ARTICLE V COMPANY MATCHING CONTRIBUTIONS 24
5.1 COMPANY MATCHING CONTRIBUTIONS 24
5.2 TIME OF CONTRIBUTION 24
5.3 401(M) LIMITS 24
5.4 401(M) CONTRIBUTION PERCENTAGE 25
5.5 401(K)/(401(M) COMBINED LIMIT 26
(A) MULTIPLE USE TEST 26
(B) CORRECTION OF VIOLATION 26
ARTICLE VI ACCOUNTS AND CREDITS 28
6.1 ESTABLISHMENT OF ACCOUNTS 28
6.2 CREDITING PARTICIPANTS' SAVINGS CONTRIBUTIONS 28
6.3 CREDITING MATCHING CONTRIBUTIONS 28
6.4 CREDITING ROLLOVERS 28
6.5 CHARGE TO ACCOUNTS 29
6.6 ANNUAL LIMITS 29
ARTICLE VII INVESTMENT FUNDS AND CREDITING INVESTMENT EXPERIENCE32
7.1 INVESTMENT FUNDS 32
7.2 INVESTMENT DIRECTIONS AND TRANSFERS AMONG FUNDS 32
(A) INVESTMENT OF ACCOUNTS 32
(B) MANNER AND TIME OF GIVING DIRECTIONS 33
7.3 VALUATION OF ASSETS 33
7.4 CREDITING INVESTMENT EXPERIENCE 34
7.5 RISK OF LOSS 34
7.6 INTERESTS IN THE FUNDS 35
7.7 SOLE SOURCE OF BENEFITS 35
ARTICLE VIII LOANS TO PARTICIPANTS 36
8.1 PLAN ADMINISTRATOR SHALL ADMINISTER THE LOAN PROGRAM 36
8.2 AVAILABILITY OF LOANS 36
8.3 PROMISSORY NOTE 36
8.4 CONDITIONS OF LOAN 36
(A) MAXIMUM AMOUNT 36
(B) MINIMUM AMOUNT 37
(C) REPAYMENT PERIOD 37
(D) INTEREST RATE 37
(E) SECURITY FOR REPAYMENT 37
(F) REPAYMENT 37
(G) PREPAYMENT 38
(H) DEFAULT 38
(I) FEES 39
8.5 ACCOUNTING FOR LOANS 40
(A) SOURCE OF LOAN 40
(B) LOAN INVESTMENT ACCOUNT 40
(C) DISTRIBUTION UPON DEFAULT 41
ARTICLE IX IN-SERVICE WITHDRAWALS 42
9.1 WITHDRAWALS FROM AFTER-TAX SAVINGS ACCOUNT 42
9.2 WITHDRAWALS FROM ROLLOVER ACCOUNT 42
9.3 WITHDRAWALS FROM COMPANY CONTRIBUTION ACCOUNT 42
9.4 HARDSHIP WITHDRAWALS FROM TAX-DEFERRED SAVINGS ACCOUNT 43
9.5 ORDER OF ASSET LIQUIDATION FOR ALL WITHDRAWALS 44
9.6 OUTSTANDING LOAN 44
ARTICLE X DISTRIBUTIONS 45
10.1 DISTRIBUTION UPON RETIREMENT 45
(A) AMOUNT 45
(B) RETIREMENT DEFINED 45
(C) FORM OF PAYMENT 45
10.2 TERMINATION OF EMPLOYMENT PRIOR TO RETIREMENT OR DEATH 47
10.3 REEMPLOYMENT 51
10.4 $3,500 CASH-OUT 53
10.5 REQUIRED DISTRIBUTION DATE 53
10.6 DISTRIBUTION UPON DEATH OF A PARTICIPANT 53
(A) IN GENERAL 53
(B) DESIGNATION OF BENEFICIARY 54
(C) NO DESIGNATION 54
(D) PAYMENT UNDER PRIOR DESIGNATION 54
(E) RISK OF LOSS 54
10.7 REHIRE BEFORE DISTRIBUTION 55
10.8 WAIVER OF 30 DAY NOTICE 55
ARTICLE XI DIRECT ROLLOVERS 56
11.1 DIRECT ROLLOVER 56
11.2 DEFINITIONS 56
(A) ELIGIBLE ROLLOVER DISTRIBUTION 56
(B) ELIGIBLE RETIREMENT PLAN 56
(C) DISTRIBUTEE 57
(D) DIRECT ROLLOVER 57
ARTICLE XII AMENDMENT, MERGER AND TERMINATION OF PLAN 58
12.1 AMENDMENT OF PLAN 58
12.2 MERGER OF PLANS 58
12.3 TERMINATION 58
12.4 EFFECT OF TERMINATION 59
ARTICLE XIII NAMED FIDUCIARIES 60
13.1 IDENTITY OF NAMED FIDUCIARIES 60
(A) NAMED FIDUCIARIES 60
(B) PLAN ADMINISTRATOR 60
13.2 RESPONSIBILITIES AND AUTHORITY OF PLAN ADMINISTRATOR 60
13.3 RESPONSIBILITIES AND AUTHORITY OF TRUSTEE 60
13.4 RESPONSIBILITIES OF AMOCO 61
13.5 RESPONSIBILITIES NOT SHARED 61
13.6 DUAL FIDUCIARY CAPACITY PERMITTED 61
13.7 ACTIONS BY AMOCO 61
13.8 ADVICE 61
13.9 DESIGN DECISIONS 62
ARTICLE XIV PLAN ADMINISTRATOR 63
14.1 APPOINTMENT 63
14.2 NOTICE TO TRUSTEE 63
14.3 ADMINISTRATION OF PLAN 63
14.4 REPORTING AND DISCLOSURE 63
14.5 RECORDS 63
14.6 CLAIMS REVIEW PROCEDURE 64
14.7 ADMINISTRATIVE DISCRETION; FINAL AUTHORITY 66
ARTICLE XV PARTICIPATING EMPLOYERS 67
15.1 ADOPTION BY OTHER EMPLOYERS 67
15.2 DESIGNATION OF AGENT 67
15.3 EMPLOYEE TRANSFERS 67
15.4 DISCONTINUANCE OF PARTICIPATION 67
15.5 PARTICIPATING EMPLOYER CONTRIBUTION FOR AFFILIATE 67
ARTICLE XVI MISCELLANEOUS 69
16.1 QUALIFIED DOMESTIC RELATIONS ORDERS 69
16.2 NONALIENATION OF BENEFITS 69
16.3 PAYMENT OF MINORS AND INCOMPETENTS 70
16.4 CURRENT ADDRESS OF PAYEE 70
16.5 DISPUTES OVER ENTITLEMENT TO BENEFITS 70
16.6 PAYMENT OF BENEFITS 70
16.7 TOP-HEAVY PLAN PROVISIONS 71
(A) APPLICABILITY OF SECTION 71
(B) DEFINITIONS 71
(C) MINIMUM CONTRIBUTION 74
16.8 RULES OF CONSTRUCTION 75
16.9 TEXT CONTROLS 75
16.10 APPLICABLE STATE LAW 75
16.11 PLAN ADMINISTRATION EXPENSES 75
16.12 VOTING AND TENDERING OF AMOCO STOCK 76
16.13 TRANSFER OF ABANDONED ESOP ASSETS TO PLAN 77
16.14 SEVERABILITY 78
16.15 UNIFORMED SERVICES EMPLOYMENT AND REEMPLOYMENT RIGHTS
ACT OF 1994 ("USERRA") 78
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ARTICLE I
INTRODUCTION
1.1 July 1, 1996 Amendment and Restatement of Plan. This
document amends and restates in its entirety the Amoco Employee
Savings Plan (the "Plan"), effective as of July 1, 1996. Except
as otherwise specifically provided herein, this restatement shall
apply only to contributions to the Plan, and the operation of the
Plan, from and after July 1, 1996. The operation of the Plan
before July 1, 1996, shall be determined under the applicable
instruments then in effect, except as otherwise provided herein.
Effective July 1, 1996 (except to the extent that a particular
provision of the Plan specifies a different effective date), the
Plan is hereby amended and restated to read in its entirety as
follows.
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 4.6, 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, the Trustee and
the Plan Administrator 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.
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 "Administrative and Recordkeeping Services Agreement"
means the instrument executed by Amoco and the Plan
Administrator, as amended from time to time, fixing the rights
and responsibilities of each party with respect to the
administration of the Plan.
2.2 "Affiliated Company" means (i) a corporation (foreign
or domestic) controlled by, controlling or under common control
with Amoco, by ownership, direct or indirect, of more than 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; (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)); (iv) except to the extent otherwise
provided in Treasury Regulations, a leasing organization with
respect to the periods of service performed by an individual who
is a leased employee, within the meaning of Section 414(n) of the
Code, with respect to the Company or an Affiliated Company
(determined without regard to this paragraph (iv); and (v) an
organization which is required to be aggregated with Amoco
pursuant to regulations promulgated under Code Section 414(o),
provided that an entity described in this Section shall not be
considered an Affiliated Company during the period preceding the
date on which it becomes an Affiliated Company within the meaning
of this Section.
2.3 "After-Tax Savings Contributions" means contributions
by a Participant made pursuant to his election which does not
reduce his compensation subject to federal income taxation.
2.4 "Alternate Payee" means an alternate payee within the
meaning of Section 414(p)(8) of its Code and Section 206(d)(3)(K)
of ERISA.
2.5 "Amoco" means Amoco Corporation, an Indiana
Corporation, or its successor.
2.6 "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, 1989, the
amount of Applicable Compensation taken into account under the
Plan for any Participant will not exceed $200,000 ($150,000 for
Plan Years beginning after December 31, 1993) 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, 1989,
the annual compensation limit in effect for determination periods
beginning before that date is $200,000 (as adjusted in accordance
with Code Section 401(a)(17)). In addition, 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)).
2.7 "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).
2.8 "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.
2.9 "Code" means the Internal Revenue Code of 1986, as
amended from time to time, or any successor statute enacted in
its place.
2.10 "Employee" means a person who is an employee of Amoco
or an Affiliated Company.
2.11 "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 Article
XV. The term "Employer" may refer to each Employer individually
or to all the Employers collectively, as the context may require.
2.12 "Entry Date" means the date an Employee is eligible to
participate in the Plan pursuant to Section 3.2 and Section 3.4.
2.13 "ERISA" means the Employee Retirement Income Security
Act of 1974, as amended from time to time, or any successor
statute enacted in its place.
2.14 "Highly-Compensated Employee" includes highly-
compensated active Employees and highly-compensated former
Employees.
A highly-compensated active Employee includes any Employee
who performs services for the Employer during the determination
year and who, during the look-back year:
(i) received compensation from the Employer in excess of
$75,000 (as adjusted pursuant to section 415(d) of the
Code);
(ii) received compensation from the Employer in excess of
$50,000 (as adjusted pursuant to section 415(d) of the
Code) and was a member of the top-paid group for such
year; or
(iii) was an officer of an Employer and received
compensation during such year that is greater than 50
percent of the dollar limitation in effect under
section 415(b)(1)(A) of the Code; provided, that for
purposes of this subparagraph (iii) no more than 50
Employees of the Employers (or if lesser, the greater
of 3 employees or 10 percent of the Employees) shall be
treated as officers.
The term highly-compensated Employee also includes:
(i) 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 the Employer during the
determination year; and
(ii) Employees who are 5 percent owners at any time during
the look-back year or determination year.
If no officer has satisfied the compensation requirement of
(iii), above, during either a determination year or a look-back
year, the highest paid officer for such year shall be treated as
a highly-compensated Employee.
For this purpose, the determination year shall be the Plan
Year. The look-back year shall be the 12-month period
immediately preceding the determination year.
A highly-compensated former Employee includes any Employee
who separated from service (or was deemed to have separated)
prior to the determination year, returns to service for the
Employer during the determination year, and was a highly-
compensated active Employee for either the separation year or any
determination year ending on or after the Employee's 55th
birthday.
If an Employee is, during a determination year or look-back
year, a family member of either a 5 percent 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 5 percent owner or top-10 highly-
compensated Employee shall be aggregated. In such case, the
family member and 5 percent 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 5 percent 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.
For purposes of this Section 2.14 and the determination of a
Highly-Compensated Employee, the term "Compensation" shall mean
compensation as defined in Code Section 414 (q)(7) and the
regulations thereunder.
The determination of who is a highly-compensated Employee,
including the determination of the number and identity of
Employees in the top-paid group, the top 100 Employees, the
number of Employees treated as officers and the compensation that
is considered, will be made in accordance with section 414(q) of
the Code and the Regulations thereunder.
Effective for the Plan Year beginning December 1, 1989,
pursuant to Internal Revenue Code of 1986 Regulation Section
1.414(q)-IT, Q&A 14(b), the look-back year calculation for a
determination year shall be made on the basis of the calendar
year ending with the applicable determination year.
2.15 "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:
(1) Each hour for which an Employee is paid, or
entitled to payment for the performance of duties for the
Employer. These hours will be credited to the Employee for
the computation period in which the duties are performed;
and
(2) Each hour for which an Employee is paid, or
entitled to payment, by the Employer on account of a period
of time during which no duties are performed (irrespective
of whether the employment relationship has terminated) due
to vacation, holiday, illness, incapacity (including
disability), layoff, jury duty, military duty or leave of
absence. No more than 501 hours of service will be credited
under this paragraph for any single continuous period
(whether or not such period occurs in a single computation
period). Hours under this paragraph will be calculated and
credited pursuant to section 2530.200b-2 of the Department
of Labor Regulations which is incorporated herein by this
reference; and
(3) Each hour for which back pay, irrespective of
mitigation of damages, is either awarded or agreed to by the
Employer. The same hours of service will not be credited
both under paragraph (1) or paragraph (2), as the case may
be, and under this paragraph (3). These hours will be
credited to the Employee for the computation period or
periods to which the award or agreement pertains rather than
the computation period in which the award, agreement or
payment is made.
Hours of service will be credited for employment with other
members of an affiliated service group (under Code Section
414(m)), a controlled group of corporations (under Section
414(b)), or a group of trades or businesses under common control
(under Code Section 414(c)) of which the adopting Employer is a
member, and any other entity required to be aggregated with the
Employer pursuant to Code Section 414(o).
An individual who is a "leased employee" (within the meaning
of Section 414(n) or (o) of the Code) of Amoco or an Affiliated
Company shall be credited with Hours of Service to the same
extent as if he had been employed and paid by Amoco or an
Affiliated Company for which he performs services, provided that
a leased employee shall not be credited with Hours of Service for
any period during which the safe harbor requirement of Section
414(a)(5) of the Code is satisfied with respect to such leased
employee.
Solely for purposes of determining whether a break in
service for participation has occurred in a computation period,
an individual who is absent from work for maternity or paternity
reasons shall receive credit for the hours of service which would
otherwise have been credited to such individual but for such
absence, or in any case in which such hours cannot be determined,
8 hours of service per day of such absence. For purposes of this
paragraph, an absence from work for maternity or paternity
reasons means an absence (1) by reason of pregnancy of the
individual, (2) by reason of a birth of a child of the
individual, (3) by reason of the placement of a child with the
individual in connection with the adoption of such child by such
individual, or (4) for purposes of caring for such child for a
period beginning immediately following such birth or placement.
The Hours of Service credited under this paragraph shall be
credited (1) in the computation period in which the absence
begins if the crediting is necessary to prevent a break in
service in that period, or (2) in all other cases, in the
following computation period.
2.16 "Normal Retirement Age" means age 65.
2.17 "Part-Time Employee" means a person who is assigned to
a position which is established to fill regular and ordinary
employment requirements, which is expected to continue for an
indefinite period of time, and in which the employee is able to
work a schedule of up to 35 hours per week.
2.18 "Participant" means an Employee or former Employee
whose participation in the Plan has begun and has not yet ended.
2.19 "Plan" means the Amoco Employee Savings Plan, as set
forth in this Plan document, and as it may be amended from time
to time.
2.20 "Plan Year" effective January 1, 1991, means the 12
consecutive month period beginning on each January 1 during the
continuance of the Plan. "Plan Year" shall also mean the time
period January 1, 1989 through November 30, 1989; December 1,
1989 through November 30, 1990 and December 1, 1990 through
December 31, 1990.
2.21 "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.
2.22 "Savings Contributions" means Participant's Tax-
Deferred Savings Contributions and/or After-Tax Savings
Contributions.
2.23 "Surviving Spouse" means the person to whom a
Participant is lawfully married (under the law of the state in
which the Participant resides) on the date of the Participant's
death.
2.24 "Tax-Deferred Savings Contributions" means
contributions by an Employer on behalf of a Participant in the
amount equal to the amount such Participant elects which reduces
his compensation subject to federal income taxation.
2.25 "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.
2.26 "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.
2.27 "Trust Fund" means the property held by the Trustee for
the purposes of the Plan.
2.28 "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.
ARTICLE III
PARTICIPATION
3.1 Eligible Class. Each 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 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
Employee shall participate in the Plan; or
(b) an 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 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.
3.2 Participation. Participation in the Plan is voluntary
and no Employee will be required to participate. Each Employee
who is eligible to make Savings Contributions before this
amendment and restatement will continue to be eligible to make
Savings Contributions. Each Employee who was a Participant
immediately before July 1, 1996, shall be a Participant on July
1, 1996. Every other Employee in the Eligible Class will be
eligible to participate as follows: A Regular or Temporary
Employee in the Eligible Class will be eligible to participate
starting on the day his employment commences with his Employer
effective October 1, 1991. A Casual or Part-Time Employee in the
Eligible Class will be eligible to participate 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, 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 an 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 an Employee in the Eligible Class will become an
active Participant on his date of rehire and will be eligible to
make Savings Contributions immediately following his date of
rehire.
ARTICLE IV
SAVINGS CONTRIBUTIONS BY PARTICIPANTS
4.1 Savings Contributions. Each Employee who has met one
of the participation requirements in Article III may make Tax-
Deferred and/or After-Tax Savings Contributions to the Plan in
integral percentages of his Applicable Compensation from a
minimum of 1% percent to the following maximums. Subject to Code
limitations, his maximum Tax-Deferred Savings Contributions in
any Plan Year is 15% of his Applicable Compensation for such Plan
Year. Also, subject to Code limitations, his maximum After-Tax
Savings Contributions in any Plan Year is 21% of his Applicable
Compensation for such Plan Year. The foregoing 15% Tax-Deferred
Savings and 21% After-Tax Savings Contributions limitations are
applied to the Participant's Applicable Compensation in each
payroll cycle and only prospectively.
4.2 Enrollment for Savings Contributions. An Employee who
wishes to make Savings Contributions must specify the amount of
his Savings Contributions in such manner and form, and at such
time established by Amoco and the Plan Administrator. An
Employee will be given the opportunity to elect Savings
Contributions beginning on the first date when he is eligible to
participate in the Plan pursuant to Article III. His Savings
Contributions will begin on such date provided he gives his
Employer or the Plan Administrator advance notice in such a
manner and form and at such time established by Amoco and the
Plan Administrator. If the Employee declines to make Savings
Contributions initially, he may elect to begin making Savings
Contributions as soon as administratively practicable thereafter,
provided he gives the required notice to his Employer or the Plan
Administrator in such a manner and form and at such time
established by Amoco and the Plan Administrator.
4.3 Collection of Savings Contributions. The Employer will
collect Participants' Savings Contributions using payroll
procedures.
4.4 Change in Savings Contributions.
(a) Increase or Reduction. A Participant making
Savings Contributions may increase or reduce the rate of his
Tax-Deferred and/or After-Tax Savings Contributions to any
higher or lower rate he elects (subject to the limitations
stated in Section 4.1) by so notifying his Employer or Plan
Administrator once a calendar month in such a manner and
form and at such time established by Amoco and the Plan
Administrator. The new rate will become effective as soon
as practicable upon proper notification.
(b) Suspension. A Participant may suspend his Savings
Contributions provided he gives proper notice in such manner
and form, and at such time established by Amoco and the Plan
Administrator. The suspension of Savings Contributions will
become effective as soon as practicable following such
notification.
(c) Resumption. A Participant who suspended his
Savings Contributions may resume such contributions on the
first day of any of his subsequent payroll cycles provided
he gives proper notice in such manner and form, and at such
time established by Amoco and the Plan Administrator.
(d) Plan Administrator Rules. The Plan Administrator,
after consulting with Amoco, may establish such rules and
procedures for Savings Contributions as the Plan
Administrator deems necessary for the efficient
administration of the Plan.
4.5 Contributions Contingent on Deductability. Each Tax-
Deferred Contribution and each Company Matching Contribution
shall be made on the condition that it is deductible under
Section 404 of the Code in the taxable year of the Employer with
respect to which the contribution is made.
4.6 Return of Employer Contributions. If a Tax-Deferred
Contribution or a Company Matching Contribution was made (i) by
reason of a mistake of fact, or (ii) on the condition that it was
currently deductible as provided in Section 4.5 and such amount
is subsequently determined not to be currently deductible as
provided in Section 4.5, the contribution (adjusted for any
investment losses allocable thereto, but not for any investment
gains allocable thereto) shall be refunded to the Company;
provided that in the case of a contribution described in clause
(i), the refund may be made only within one year after the
payment of the contribution; and provided further that in the
case of a contribution described in clause (ii), the refund may
be made only within one year after the disallowance of the
deduction and may be made only to the extent that the deduction
was disallowed.
4.7 Two Separate Contracts. Contributions to the Plan
shall be made pursuant to two separate contracts for purposes of
Section 72 (e) of the Code. After-Tax Contributions made after
December 31, 1986, plus any gains and minus any losses thereon,
shall be allocated to one contract (the "first contract"), and
all other contributions to the Plan, plus any gains and minus any
losses thereon, shall be allocated to the other contract (the
"second contract"). If a Participant withdraws After-Tax
Contributions from the Plan pursuant to Section 9.1, the
withdrawal shall be made first from the second contract (until
all of the Participant's After-Tax Contributions thereunder have
been withdrawn) and then from the first contract.
4.8 401(k) Tax-Deferred Savings Contributions Limits. As
of the last day of each Plan Year the average of the individual
401(k) Deferral Percentages of the Higher Paid Group (the HCE-
ADP) may not exceed the average of the individual 401(k) Deferral
Percentages of the Lower Paid Group (the NHCE-ADP) by more than
the amount specified in the following table:
If NHCE-ADP is: HCE-ADP may not exceed:
less than 2% two times NHCE-ADP
2% but less two percentage points
than 8% more than NHCE-ADP
8% or higher 1.25 times NHCE-ADP
See Section 5.5 for additional limits on Tax-Deferred Savings
Contributions.
4.9 401(k) Deferral Percentage. The 401(k) Deferral
Percentage of a Participant or Employee eligible to be a
Participant for a Plan Year means his Tax-Deferred Savings
Contributions for such year computed as a percentage of his
Applicable Compensation for such year (to the nearest one-
hundredth of a percentage point). Applicable Compensation used
to calculate a Participant's 401(k) Deferral Percentage shall
exclude compensation amounts earned prior to the date on which
the Employee becomes eligible to participate in the Plan. If an
Employee is eligible to be a Participant under Article III but
has not elected to make Tax-Deferred Savings Contributions, he
will nevertheless be taken into account as having made zero Tax-
Deferred Savings Contributions.
Amoco may elect to treat all or a part of the Company
Matching Contributions made on a Participant's behalf for a Plan
Year as if such Company Matching Contributions were Tax-Deferred
Savings Contributions when determining his 401(k) Deferral
Percentage. Company Matching Contributions which are used in
determining a Participant's 401(k) Deferral Percentage will not
be used in determining his Matching Contribution Percentage under
Section 5.4.
4.10 Higher and Lower Paid Groups.
(a) Higher Paid Group. An Employee who is eligible to
make Savings Contributions is in the Higher Paid Group for a
Plan Year if during such Plan Year (Determination Year) or
the preceding Plan Year (Look-Back Year) he is a Highly-
Compensated Employee.
(b) Lower Paid Group. If an Employee eligible to make
Savings Contributions is not in the Higher Paid Group for a
Plan Year, then he is in the Lower Paid Group.
4.11 Monitoring Participants' 401(k) Deferral Percentages;
Adjustments.
(a) Adjustments from the Top Down. The Plan
Administrator will monitor Participants' 401(k) Deferral
Percentages to insure compliance with the requirements of
Section 4.5 above. Any adjustments in Participants'
elections or actual Tax-Deferred Savings Contributions
necessary to meet the requirements of Section 4.5 will be
made as follows. The Plan Administrator will reduce the
401(k) Deferral Percentage of the Participant (or
Participants) in the Higher Paid Group with the highest
401(k) Deferral Percentage until it reaches the 401(k)
Deferral Percentage of the Participant (or participants) in
the Higher Paid Group with the next highest 401(k) Deferral
Percentage; next the Plan Administrator will reduce the
401(k) Deferral Percentages of both (or all) such
Participants until they reach that of the Participant with
the next highest 401(k) Deferral Percentage; and so on. The
foregoing reductions will be made only to the extent
necessary to meet the requirements of Section 4.5.
(b) Timing of Adjustments. The Plan Administrator
will adjust Tax-Deferred Savings Contributions elections by
Participants in the Higher Paid Group in accordance with the
preceding paragraph at such time or times before or during a
Plan Year as the Plan Administrator deems advisable to
insure that the requirements of the preceding sentence, and
the requirements of Section 4.5, are met as of the last day
of a Plan Year. Such adjustments may also be made after the
end of a Plan Year by paying to a Participant the amount of
his excess Tax-Deferred Savings Contributions plus earnings
(or losses) on such excess (as specified in the following
paragraph). Excess Tax-Deferred Savings Contributions means
Tax-Deferred Savings Contributions by a Participant in the
Higher Paid Group in excess of the amount that would satisfy
the requirements of Section 4.8 above. Any such payment of
excess Tax-Deferred Savings Contributions will be designated
as such by the Plan Administrator, and will be made by the
end of the succeeding Plan Year to avoid Plan
disqualification.
(c) Earnings on Excess Tax-Deferred Savings
Contributions. The amount of earnings (or losses) to be
distributed with a Participant's excess Tax-Deferred Savings
Contributions will be determined by multiplying the
investment income and gain or loss on the Participant's Tax-
Deferred Savings Contributions Account for the Plan Year for
which excess Tax-Deferred Savings Contributions are
withdrawn by a fraction. The numerator of the fraction is
the amount of the Participant's excess Tax-Deferred Savings
Contributions to be distributed and the denominator is the
amount credited to such Account as of the last day of the
Plan Year. To the extent actual earnings figures are
unavailable, the amount determined under the preceding two
sentences may be increased by 10% for each month between the
end of the Plan Year and date of distribution of excess; for
this purpose, a distribution on or before the 15th day of a
month will be deemed to have occurred on the last day of the
preceding month, and a distribution after the 15th day of a
month will be deemed to have occurred on the last day of
that month. Notwithstanding the foregoing, the Plan
Administrator, with the consent of Amoco, may use any method
permitted under the Code and applicable regulations in
determining the amount, if any, of earnings that have to be
distributed with a Participant's excess Tax-Deferred Savings
Contributions.
(d) Annual Additions for Code Section 415. Any excess
Tax-Deferred Savings Contributions distributed under this
subsection will nevertheless be considered as annual
additions for purposes of applying the limitations of
Section 6.6.
4.12 Limit on TDS Contributions. For each Plan year, the
aggregrate Tax-Deferred Contributions (as defined in Section
402(g)(3) of the Code) made on behalf of each Participant under
the Plan shall not exceed:
(a) $7,000 (as adjusted by the Secretary of the
Treasury or his delegate for increases in the cost of living
pursuant to Section 402(g) of the Code, provided that no
such adjustment shall be taken into account hereunder before
the Plan Year in which it becomes effective), reduced by
(b) the sum of any of the following amounts that were
contributed on behalf of the Participant for a calendar
year under a plan, contract or arrangement other than this
Plan:
(1) any employer contribution under a qualified cash
or deferred arrangement (as defined in Section
401(k) of the Code) to the extent not includable
in the Participant's gross income for the taxable
year under Section 402(a)(8) of the Code
(determined without regard to Section 402(g) of
the Code);
(2) any employer contribution to the extent not
includable in the Participant's gross income for
the taxable year under Section 402(h)(1)(B) of the
Code (determined without regard to Section 402(g)
of the Code); and
(3) any employer contribution to purchase an annuity
contract under Section 403(b) of the Code under a
salary reduction agreement (within the meaning of
Section 3121(a)(5)(D) of the Code);
provided that no contribution described in this subsection (b)
shall be taken into account for the purpose of reducing the
dollar limit in subsection (a), above, if the plan, contract or
arrangement is not maintained by Amoco or an Affiliated Company
unless the Participant has filed a notice with the Plan
Administrator, in such manner and form, at such time and
containing such information concerning the contribution as the
Plan Administrator shall require.
4.13 Direct Rollover Contributions.
(a) With the approval of the Plan Administrator, an
Employee who is eligible to participate, an active
Participant and a "Retiree" who has assets in any account
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 4.13.
(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.
(f) Company matching contributions shall not be made
with respect to Rollover Contributions.
ARTICLE V
COMPANY MATCHING CONTRIBUTIONS
5.1 Company Matching Contributions. Effective October 1,
1991 for each Plan Year the Employer will make a matching
contribution ("Company Matching Contributions") on behalf of each
Participant who makes Tax-Deferred and/or After-Tax Savings
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 100%
of the sum of such Participant's Tax-Deferred and After-Tax
Savings Contributions which are equal to or less than (1) 4% of
such Participant's Applicable Compensation if he has less than 3
years of Vesting Service, (2) 5% of such Participant's Applicable
Compensation if he has 3 or more years of Vesting Service, but
less than 6 years of Vesting Service, or (3) 6% of such
Participant's Applicable Compensation if he has 6 or more years
of Vesting Service.
5.2 Time of Contribution. The Employer will make Company
Matching Contributions under Section 5.1 to the Trustee in cash
or in Amoco common stock and will normally make such
contributions as soon as practicable after each payroll cycle.
In any event, such contributions will be made to the Trustee no
later than the due date (including extensions) for filing the
Employer's federal income tax return for such year.
5.3 401(m) Limits. As of the last day of each Plan Year,
the average of the sum of the individual After-Tax Savings
Contributions and Company Matching Contributions Percentages
("401(m) Contribution Percentage") of the Higher Paid Group (the
HCE-ACP) may not exceed the average of the individual 401(m)
Contribution Percentages of the Lower Paid Group (the NHCE-ACP)
by more than the amount specified under the following table:
If NHCE-ACP is: HCE-ACP may not exceed:
less than 2% two times NHCE-ACP
2% but less 8% 2 percentage points
more than NHCE-ACP
8% or higher 1.25 times NHCE-ACP
See Section 5.5 for additional limits on After-Tax Savings
Contributions and Company Matching Contributions. The Higher
Paid Group and Lower Paid Group are defined in Section 4.10.
5.4 401(m) Contribution Percentage.
(a) The 401(m) Contribution Percentage of a
Participant or Employee eligible to be a Participant for a
Plan Year means the sum of his After-Tax Savings
Contributions and Company Matching Contributions for the
Plan Year (other than Company Matching Contributions used in
determining his 401(k) Deferral Percentage under Section
4.5), computed as a percentage of his Applicable
Compensation for such year (to the nearest 1/100 of a
percentage point). Compensation used to calculate the
401(m) Contribution Percentage is an Employee's Applicable
Compensation.
(b) If the Plan does not meet the requirements of
Section 5.3 as of the last day of a Plan Year, the Plan
Administrator will reduce the 401(m) Contribution Percentage
of the Participant (or Participants) in the Higher Paid
Group with the highest 401(m) Contribution Percentage (by
reducing his After-Tax Savings Contributions) until it
reaches the 401(m) Contribution Percentage of the
Participant (or Participants) in the Higher Paid Group with
the next highest 401(m) Contribution Percentage; and so on.
The foregoing reductions will be made only to the extent
necessary to meet the requirements of Section 5.3. After
all such reductions have been made, the Plan Administrator
shall pay to the Participant the amount of his excess After-
Tax Savings Contributions plus earnings (or losses) on such
excess (as determined in accordance to the provisions of
Section 4.8). Excess 401(m) Contributions means After-Tax
Savings Contributions and/or Company Matching Contributions
allocated to a Participant in the Higher Paid Group in
excess of the amount that would satisfy the requirements of
Section 5.3. Any such payment of excess 401(m)
Contributions will be designated as such by the Plan
Administrator, and will be made by the end of the succeeding
Plan Year to avoid Plan disqualification.
(c) Notwithstanding any other provision of this Plan
to the contrary, all highly compensated participants (those
earning more than $52,235 in 1988), are prohibited from
making any contributions for the month of November in 1989
in order to comply with the Internal Revenue Code Section
401(m) contributions limitations for the plan year ending
November 30, 1989.
5.5 401(k)/(401(m) Combined Limit.
(a) Multiple Use Test. The sum of the HCE-ADP under
Section 4.8 and the HCE-ACP under Section 5.3 cannot exceed
the combined limit determined under rules and regulations
promulgated by the Internal Revenue Service to prevent the
multiple use of the alternative limitation (i.e. 2
percentage points more than NHCE-ADP or NHCE-ACP, but in no
event more than twice NHCE-ADP or NHCE-ACP.)
(b) Correction of Violation. If the sum of the HCE-
ADP and the HCE-ACP exceeds the combined limit, the Plan
Administrator will first reduce the After-Tax Savings
Contribution percentages of the Participant (or
Participants) in the Higher Paid Group in accordance with
Section 5.4(b) to the extent necessary to meet the combined
limit and will then if necessary reduce the Company Matching
Contribution percentages of the Participant (or
Participants) in the Higher Paid Group to the extent
necessary.
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) Tax-Deferred Savings Account;
(b) After-Tax Savings Account;
(c) Company Contribution Account; and
(d) Rollover Account.
Credit and charges to such Accounts will be made as provided in
the Plan. A Participant is 100% vested in his Tax-Deferred
Savings Account, After-Tax Savings Account, and Rollover Account
at all times.
6.2 Crediting Participants' Savings Contributions. Savings
Contributions made by a Participant for a payroll cycle will be
credited to such Participant's Accounts as of the Valuation Date
as soon as practicable 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
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 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 day on which the distribution, payment or withdrawal
occurs.
6.6 Annual Limits.
(a) Notwithstanding anything contained herein to the
contrary, the annual additions to a Participant's Accounts
for a calendar 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) 25% of his total Code Section 415
compensation for such year. For purposes of this section,
Code Section 415 compensation means a Participant's total
non-deferred compensation from an Employer for a Plan Year,
as defined in Code Section 415 and regulations thereunder.
The foregoing $30,000 shall be reduced proportionately to
reflect any short Plan Year of less than twelve months.
(b) Annual additions to a Participant's Account for
any Limitation 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 Limitation Year, the Plan Administrator
shall reduce the annual additions to such Participants'
Accounts in the following order of priority:
(i) against the After-Tax Savings Contributions made
by the Participant under this Plan, but only to
the extent that such Participant's Company
Matching Contributions are not reduced;
(ii) against the Tax-Deferred Savings Contributions
made on behalf of the Participant under this Plan;
and
(iii) against the Company Matching Contributions
made on behalf of the Participant under this Plan.
(d) For any Plan Year, the sum of a Participant's
defined contribution plan fraction and his defined benefit
plan fraction may not exceed 1, as follows:
(i) His defined contribution plan fraction for any
Plan Year is the fraction (A) whose numerator is
the sum of annual additions to his Accounts as of
the close of such Plan Year, and (B) whose
denominator is the sum of the lesser of the
following amounts determined for such year and for
each prior year of service with his Employer; the
product of 1.25 (1.0 if the plan is top-heavy) and
the dollar limitation in effect for such year, or
the product of 1.4 and 25% of the Participant's
compensation determined under Section 415 of the
Code for such year.
(ii) His defined benefit plan fraction for any Plan
Year is a fraction (A) whose numerator is his
aggregate projected annual benefit under all
defined benefit plans sponsored by Amoco (or any
Affiliated Company that is included in a
controlled group or under common control with
Amoco Corporation within the meaning of Code
Section 414(b), (c), (m) and (o) and 415(h)) as
the close of such Plan Year, and (B) whose
denominator as the lesser of the product of 1.25
(1.0 if the Plan is a top-heavy) and the dollar
limitation in effect under Section 415(b)(1)(A) of
the Code, or the product of 1.4 and the
Participant's highest average compensation as
determined under Section 415(b)(1)(B) of the Code.
For this purpose, the projected annual benefit of
the Participant means the total normal retirement
benefit to which he would be entitled on the
assumptions that his employment continues until
his normal retirement date and his annual earnings
and all other relevant factors remain the same for
all future years as in the year when the
projection is made.
(iii) If the sum of such fractions would exceed 1
without the application of this section, his
benefit under the defined benefit plan or plans
will be reduced to a benefit that will produce a
defined benefit plan fraction which, when added to
the defined contribution plan fraction, will equal
1.
ARTICLE VII
INVESTMENT FUNDS AND CREDITING INVESTMENT EXPERIENCE
7.1 Investment Funds. The Trustee will separate the Trust
Fund into six Investment Funds as follows:
(a) Amoco Stock Fund
(b) Money Market Fund
(c) U.S. Savings Bonds
(d) Equity Index Fund
(e) Balanced Fund
(f) Bond Index 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 future Savings
Contributions, except company Matching Contributions, to his
Accounts 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 combinations must equal 100%. Company Matching
Contributions will be invested initially in the Amoco Stock
Fund.
In addition, twice a calendar month, but no more than
one time per day, 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 5% increments and the total
combinations must equal 100%.
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 Accounts will be filed with the Plan Administrator in
such manner and form, and at such time established by the
Plan Administrator. A Participant may change the investment
of future Savings Contributions to his Accounts among the
Investment Funds in 5% increments once per calendar month by
contacting the Plan Administrator in such manner and form,
and at such time established by the Plan Administrator. If
a Participant does not give any investment directions to the
Plan Administrator, his Savings Contributions or Rollover
Contribution will be invested in the Money Market Fund.
7.3 Valuation of Assets. Effective October 1, 1991, as of
each business day 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 is the amount in such Account as of the close of business
on the preceding Valuation Date, increased by any Savings
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 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.
7.5 Risk of Loss. The Plan Administrator and the Employer
do not guarantee that the fair market value of the Investment
Funds, or of any particular Investment Fund, will be equal to or
greater than the amounts allocated thereto. The Plan
Administrator and the Employer do not guarantee that the value of
the Accounts will be equal to or greater than the contributions
credited thereto. The Participants assume all risk of any
decrease in the value of the Investment Funds and the Accounts.
7.6 Interests in the Funds. No Participant, Surviving
Spouse or Beneficiary shall have any claim, right, title or
interest in or to the Fund, except as and to the extent expressly
provided herein.
7.7 Sole Source of Benefits. Members, Surviving Spouses
and Beneficiaries shall look only to the Trust for the payment of
benefits under the Plan, and except as otherwise required by law,
the Employer assumes no responsibility or liability therefor.
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 of Amoco or an Affiliated
Company, the Plan Administrator may direct the Trustee to make a
loan 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; provided, however, that
effective January 1, 1995, a Participant who has defaulted on a
loan will be permitted to again make loans two years after the
full repayment of the defaulted loan.
8.3 Promissory Note. A Participant may obtain a loan only
if he executes a promissory note in a form approved by the Plan
Administrator.
8.4 Conditions of Loan.
(a) Maximum Amount. The loan shall not exceed the
lesser of (i) $50,000 reduced by the excess (if any) of the
highest outstanding loan(s) balance during the one-year
period ending on the day before the date the current loan is
made, over the outstanding loan balance from the Plan to
the Participant on the date on which such loan was made or
(ii) 50% of the market value of the Participant's non-
forfeitable accrued benefit on the date the loan request
from the Participant is received by the Plan Administrator.
(b) Minimum Amount. The minimum loan shall be $1,000.
(c) Repayment Period. The term of the loan shall not
be less than 6 months and not more than five years in
increments of 6 months.
(d) Interest Rate. Effective October 1, 1991, 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) 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 50%
of the non-forfeited accrued benefit in the Participant's
Accounts.
(f) Repayment. A Loan must be repaid in level
installments of principal and interest by payroll deduction.
If the Participant is granted an unpaid leave of absence or
is transferred to an Affiliated Company or a position or
location that is not covered by the Plan (or ceases to have
sufficient compensation from which the loan payment can be
made), the Participant must continue to make timely level
installment payments of principal and interest, by certified
check or cashier's check. 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.
(g) Prepayment. A Participant may prepay a loan, in
full, at any time and without penalty by certified check or
cashier's check. Partial prepayment of a loan is not
permitted.
(h) Default.
(a) A Participant shall default on a loan if any
of the following events occur:
(1) the Participant's separation from service for
any reason (including the Participant's
death);
(2) the Participant's failure to make any payment
of principal or interest on the loan on the
date the payment is due;
(3) the Participant's failure to perform or
observe any covenant, duty or agreement under
the promissory note evidencing the loan;
(4) receipt by the Plan of an opinion of counsel
to the effect that (i) the Plan will, or
could, lose its status as a tax-qualified
plan unless the loan is repaid or (ii) the
loan violates, or might violate, any
provision of ERISA;
(5) any portion of the Participant's Account that
secures the loan becomes payable to the
Participant, his Surviving Spouse or
Beneficiary, an Alternate Payee, or any other
person;
(6) the Participant makes an assignment for the
benefit of creditors, files a petition in
bankruptcy, is adjudicated insolvent or
bankrupt, or becomes a subject of any wage
earner plan under federal or state bankruptcy
or insolvency law, or there is commenced
against the Participant any bankruptcy or
insolvency law or similar proceeding that
remains undismissed for a period of 90 days
(or the Participant by an act indicates his
consent to, approval of, or acquiescence in
any such proceeding); or
(7) the termination of the Plan.
(b) If a default on a loan occurs, the entire
outstanding balance of the loan shall be immediately
due and payable.
(c) If a default on a loan occurs, and the
Participant does not pay the entire outstanding balance
of the loan (together with the accrued and unpaid
interest) by the 90th day after the day the default
occurs, the Participant's nonforfeitable interest in
his Account shall be applied immediately to the extent
lawful.
(d) Any failure by the Plan Administrator to
enforce the Plan's rights with respect to a default on
a loan shall not constitute a waiver of such rights
either with respect to that default or any other
default.
(i) Fees. A Participant who receives a loan shall
pay such fees as Amoco and the Plan Administrator may
establish from time to time.
8.5 Accounting for Loans.
(a) Source of Loan. The Plan Administrator shall
liquidate the Participant's Investment Funds to make a loan
to him in the following order:
Investment Funds.
(1) Money Market Fund;
(2) Equity Index Fund;
(3) Balanced Fund;
(4) Bond Index Fund;
(5) U.S. Savings Bonds; and
(6) Amoco Stock Fund.
As the Plan Administrator liquidates the Participant's
Investment Funds in the above order, he shall liquidate such
Participant's Accounts in the following order:
Accounts.
(1) Tax-Deferred Savings Account;
(2) Rollover Account;
(3) Company Contribution Account; and
(4) After-Tax Savings Account.
Effective October 1, 1991, funds shall be liquidated
first by Account in the order specified above and then by
Investment Fund (i.e. all assets in the Tax-Deferred Savings
Account shall be liquidated first in the order of Investment
Funds described above; then all assets in the Rollover
Account and so forth).
(b) Loan Investment Account. The Plan Administrator
will establish and maintain a loan investment account for
each borrowing Participant. A loan shall be treated by the
Plan Administrator as a separate investment of the borrowing
Participant's Account. 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 and interest by the
Participant will reduce the Participant's loan account
balance and will be credited to the Participant's other
Accounts in the order that they were liquidated to make the
loan. Repayments will be invested in the Investment Funds
according to a Participant's current investment election.
(c) Distribution Upon Default. In the event a
Participant defaults upon a loan upon termination of
employment, the loan shall be deemed to be distributed from
the Participant's Accounts in the following order:
Accounts.
(1) Tax-Deferred Savings Account;
(2) Rollover Account;
(3) Company Contribution Account; and
(4) After-Tax Savings Account.
The order of liquidation of funds shall be as specified
in (a) above.
ARTICLE IX
IN-SERVICE WITHDRAWALS
9.1 Withdrawals From After-Tax Savings Account. A
Participant may withdraw in cash any portion of his accrued
benefit in his After-Tax Savings Account, except for his After-
Tax Savings Contributions made in the calendar year during which
his withdrawal is made, twice during a 12-month period.
9.2 Withdrawals From Rollover Account. A Participant may
withdraw in cash any portion of his accrued benefit in his
Rollover Account twice during a 12-month period.
9.3 Withdrawals From Company Contribution Account. A
Participant may withdraw in cash any portion of his accrued
benefit in his Company Contribution Account, except for the
greater of the last 24 months of Company Matching Contributions
or the value of the initial Company Matching Contributions that
would not be vested under Section 10.2 if such Participant's
service with his Employer terminated on the date of such
withdrawal, once during a 24-month period. If the Participant
withdraws 50% or less of his accrued benefit from his Company
Contribution Account then he will not be eligible to receive
Company Matching Contributions during the 6-month period
commencing with the first day of his payroll cycle starting
immediately after the distribution of such withdrawal. If the
Participant withdraws more than 50% of his accrued benefit, then
he will not be eligible to receive Company Matching Contributions
during the 12-month period commencing with the first day of his
payroll cycle starting immediately after the distribution of such
withdrawal.
9.4 Hardship Withdrawals From Tax-Deferred Savings Account.
A Participant may withdraw in cash from his Tax-Deferred Savings
Account once every 12 months the amount necessary to meet one of
the following immediate and heavy financial needs:
(a) 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);
(b) The purchase (excluding mortgage payments) of a
principal residence for the Participant;
(c) Payment of tuition related to educational fees and room
and board expenses for the next 12 months of post-
secondary education for the Participant, his spouse,
children, or dependents;
(d) 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
(e) 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 Tax-Deferred Savings Account.
Notwithstanding the foregoing, the amount withdrawn cannot
include the Participant's current calendar year's Tax-Deferral
Savings Contributions and/or any earnings on all his Tax-Deferred
Savings Contributions. In addition, before a Participant makes a
withdrawal from his Tax-Deferred 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 other Accounts.
If a Participant makes a withdrawal from his Tax-Deferred Savings
Account he will be prohibited from making any Savings
Contributions for the 12-month period commencing with the first
day of his payroll cycle starting immediately after the
distribution of such withdrawal. Finally, notwithstanding
Section 4.12, if a Participant makes a withdrawal from his Tax-
Deferred Savings Account, the Code Section 402(g) limitation that
applies to his Tax-Deferred Savings 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.
9.5 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 in the following
order:
Investment Funds.
(1) Money Market Fund;
(2) Equity Index Fund;
(3) Balanced Fund;
(4) Bond Index Fund;
(5) U.S. Savings Bonds; and
(6) Amoco Stock Fund.
9.6 Outstanding Loan. Notwithstanding any other provision
of this Article, if a Participant's Account shows that the
Participant has an outstanding balance securing a loan, the
Participant shall not be permitted to make a withdrawal pursuant
to this Article of any portion of the Participant's Account that
secures the loan.
ARTICLE X
DISTRIBUTIONS
10.1 Distribution Upon Retirement.
(a) Amount. A Participant whose employment with the
Employer and the Affiliated Companies terminates as a result
of retirement will receive the total amount in his Accounts.
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
(1) on or after his 65th birthday or (2) on or after his
attainment of age 50 and 15 years of Vesting Service. A
Participant will become fully vested in his Company Account
balance upon reaching his 65th birthday (normal retirement
age).
(c) Form of Payment. Upon a Participant's Retirement
a distribution of his Accounts will be paid in one of the
following methods as selected by the Participant.
(i) a single-sum payment of his entire Account
balances at any time until age 70 1/2; or
(ii) monthly, quarterly or annually (of which the
frequency and amount can be changed at any time
subject to administrative feasibility) equal
payments for a period less than ten years.
In addition to the above two methods of distribution, a
Participant who has retired in accordance with subsection 10.1(b)
can make a withdrawal of any amount once a month.
All distributions made pursuant to this subsection shall be
made in cash, except that a Participant who elects to receive a
single-sum payment under Section 10.1(c)(i) can elect to receive
Amoco common stock in-kind. The Plan Administrator shall
liquidate the Participant's Accounts to make a distribution to
him pursuant to this Section in the following order:
Accounts
(1) After-Tax Savings Account;
(2) Rollover Account;
(3) Company Contribution Account; and
(4) Tax-Deferred Savings Account.
As the Plan Administrator liquidates the Participant's
Accounts in the above order, he shall liquidate the Participant's
Investment Funds in the following order:
Investment Funds
(1) Money Market Fund;
(2) Equity Index Fund;
(3) Balanced Fund;
(4) Bond Index Fund;
(5) U.S. Savings Bonds; and
(6) Amoco Stock Fund.
10.2 Termination of Employment Prior to Retirement or Death.
(a) If a Participant's service with the Employer and
the Affiliated Companies terminates under circumstances
other than as provided for under subsections 10.1(b) or
10.6, he shall be 100% vested in an amount equal to the
market value of his Tax-Deferred Savings Account, After-Tax
Savings Account and Rollover Account. In addition, such
Participant shall be 100% vested in an amount equal to the
greater of: (1) the market value of his Company Contribution
Account less 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, a percentage based on years of Vesting
Service as provided below; or (2) the market value of the
Participant's Company Contribution Account times the
Participant's vested percentage based upon his years of
Vesting Service, as follows:
Years ofVesting Service
At least But Less Percentage
Than Vested
2 years 0%
2 years 3 years 25%
3 years 4 years 50%
4 years 5 years 75%
5 years 100%
Notwithstanding the foregoing, if a Participant's service
with an Employer terminates because of (1) a sale of stock or
assets of the Employer, a merger or other transaction involving
an Employer, each involving a third party, the result of which is
the Employer is no longer deemed an Employer by Amoco, or such
other transaction as may be approved by Amoco or (2) under the
terms of a voluntary or involuntary Employer severance plan
officially adopted by an Employer as evidenced by a written plan
document, he shall be 100% vested in his Company Contribution
Account. 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).
(b)(i) Vesting Service and Period of Vesting
Service. Effective with regard to the calculation
of Vesting Service on or after October 1, 1991,
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. A Period of Vesting Service means the
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) of this
paragraph, 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) of this paragraph 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 or an Affiliate.
Notwithstanding the foregoing provisions of
(b)(i), 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 medical or family "leave of
absence".
(D) All periods of service of an Employee
shall be aggregated in determining his Vesting
Service unless they can be disregarded under the
break in service rules of Section 10.3.
(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 which an
Employee is credited with service.
(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.
(v) Non-Duplication. Notwithstanding anything to
the contrary in this Section, a Participant shall
not receive credit under the Plan for a period of
service more than once for Vesting Services.
(c) Form of Payment. A Participant whose service
terminates with his Employer under circumstances other than
in accordance with subsection 10.1(b) (retirement) will be
paid a distribution of his vested Account balances in one of
the following methods as selected by the Participant:
(i) a single-sum payment at any time prior to age 65;
or
(ii) 10 annual installments commencing as soon as
practicable after his service terminates.
The election to receive 10 annual installments is
irrevocable and all such installments shall be made in cash
and the Participant's Accounts and Investment Funds that he
is invested in shall be liquidated in the same order as
provided in Section 10.1(c). If the Participant has not
received his single-sum payment before his attainment of age
65, the Plan Administrator shall distribute it as soon as
practicable after he reaches such age. 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.
(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 portion of a Participant's Company
Contribution Account to which he is not entitled at the time
of the distribution of his Account balances shall be
forfeited by him upon such termination of employment. As
soon as practicable after such forfeitures occur they 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 who was
partially or fully vested in his Company Contribution Account 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 all his prior years 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, if any, shall be
restored without interest to his Account. Upon any subsequent
termination of employment the nonforfeitable portion of his
Company Contribution Account shall be calculated as if any non-
forfeitable amounts distributed upon the previous termination had
been repayed to the Plan.
If such a terminated Participant was 0% vested in his
Company Contribution Account under Section 10.2 at the time of
his prior termination, the following special provisions shall
apply:
(a) If such a terminated Participant is reemployed
after incurring 5 or more consecutive One-Year Breaks In
Service, he shall have no right to the previously forfeited
portion of his Company Contribution Account, and his prior
years of Vesting Service shall not be restored for the
purpose of calculating the vested portion of such Account.
(b) If such a terminated Participant is reemployed
before incurring 5 consecutive One-Year Breaks In Service,
the portion of the Participant's Company Contribution
Account that had been forfeited shall be restored without
interest to his Account. In order to effect the restoration
of previously forfeited amounts to a Participant's Company
Contribution Account, the Plan Administrator shall first
utilize any available forfeitures, and then requesting
additional Employer Contributions which shall be paid by the
Employer, and his prior years of Vesting Service shall be
restored for the purpose of calculating the vested portion
of such Account.
Notwithstanding this section 10.3, if a Participant,
after his military leave of absence expires, files for
restoration of his job during one of the periods prescribed
by the Vietnam Era Veterans' Readjustment Act of 1974 and is
hired by an Employer, his prior years of Vesting Service
shall be restored and he shall be credited with Vesting
Service for the period of time he was on the military leave
of absence. In addition, the portion of his company
contribution Account that has been forfeited, if any, shall
be restored without interest to his Company 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 any date after 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 in accordance with the
applicable rules of the Plan Administrator.
10.5 Required Distribution Date. Distribution to any
Participant (whether employed by an Employer, retired or
otherwise terminated) must be made no later than April 1
following the calendar year in which he reaches age 70-1/2 in
accordance with the minimum distribution rules of Section
401(a)(9) of the Code and the regulations promulgated thereunder;
provided, however, that in the case of a Participant who attained
age 70-1/2 prior to January 1, 1988, distribution may be delayed
until April 1 following the calendar year in which he retires if
such Participant is not a 5% owner.
10.6 Distribution Upon Death of a Participant.
(a) In General. If Participant dies while employed by
the Employer or an Affiliated Company 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 receives instructions from Amoco as to
who the Beneficiary is, he shall distribute to such
Beneficiary in cash, Amoco common stock, or any combination
thereof as directed by Amoco, 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. No such revocation or
designation shall be effective unless and until it is
received by the Employer or its agent before the
Participant's death in such form and manner established by
Amoco and 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.
(e) Risk of Loss. The value of a Participant's
nonforfeitable interest in his Account shall continue to be
adjusted to reflect the investment performance of the
Investment Fund(s) in which his Account is invested (and
shall therefore remain subject to the risk of loss) during
the period between the Participant's separation of service
and the date when the Participant's nonforfeitable interest
in his Account has been distributed in full.
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 section 401(a)(11) and 417 of the Code does not apply, such
distribution may commence less than 30 days after the notice
required under section 1.411(a)11(c) of the Income Tax
Regulations 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.
ARTICLE XI
DIRECT ROLLOVERS
11.1 Direct Rollover. This section applies to distributions
made on or after January 1, 1993. 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 provided for in this Plan 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.
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 4.6.
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 Tax-Deferred Savings, After-Tax Savings 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 Savings 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.
Amoco will determine whether to direct the Plan Administrator who
will, in turn, direct 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.
ARTICLE XIII
NAMED FIDUCIARIES
13.1 Identity of Named Fiduciaries.
(a) Named Fiduciaries. Amoco or its delegates as
provided by Resolution of its Board of Directors, 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, in the
Administrative and Recordkeeping Services Agreement, in the
Trust Agreement and as described in certain delegations of
authority of the Board of Directors of Amoco to the extent
such delegations are not inconsistent with the terms of the
Plan. 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. State Street Bank & Trust
Company of Boston has been appointed by Amoco as 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 and the Administrative and Recordkeeping
Services Agreement.
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, the Plan
Administrator 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 the Plan Administrator, to monitor their
performances, to resolve Plan appeals 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 and in the Administrative and
Recordkeeping Services 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,
including service both as Trustee and Plan Administrator.
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.
13.9 Design Decisions. Decisions regarding the design of
the Plan shall be made in a settlor capacity and shall not be
governed by the fiduciary responsibility provisions of ERISA.
ARTICLE XIV
PLAN ADMINISTRATOR
14.1 Appointment. Amoco will appoint a Plan Administrator.
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 and agreed upon in the Administrative and Recordkeeping
Services Agreement with respect to the operation and
administration of the Plan. All determinations and actions of
the Plan Administrator and Amoco will be conclusive and binding
upon all persons, except as otherwise provided herein or by law,
and except that the Plan Administrator and Amoco may revoke or
modify a determination or action previously made in error. The
Plan Administrator and Amoco will exercise all powers and
authority given to it in a nondiscriminatory manner.
14.4 Reporting and Disclosure. The Plan Administrator and
Amoco, as agreed upon in the Administrative and Recordkeeping
Services Agreement, 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, which will be
subject to inspection or audit by Amoco at any time. 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. A claim for benefits under
the Plan by a Participant, Surviving Spouse, Beneficiary,
Alternate Payee or any other person shall be filed in writing
with the Plan Administrator. The Plan Administrator shall,
within a reasonable time, consider the claim and shall issue his
determination in writing. If the claim is denied in whole or in
part by the Plan Administrator, the Plan Administrator shall,
within a reasonable time, provide the claimant with a written
notice setting forth in a manner calculated to be understood by
the claimant:
(a) The specific reason or reasons for the denial of
the cliam;
(b) Specific reference to pertinent Plan provisions on
which the denial is based;
(c) A description of any additional material or
information necessary for the claimant to perfect the claim
and an explanation of why such material or information is
necessary; and
(d) An explanation of the Plan's claim review
procedure.
Amoco shall provide each claimant with a reasonable
opportunity to appeal a denial of the claim to Amoco for a full
and fair review. The claimant or his duly authorized
representative shall be permitted to request a review upon
written application to Amoco to review pertinent documents, and
to submit issues and comments in writing. Amoco may establish
such time limits within which claimants may request review of
denied claims as are reasonable in relation to the nature of the
benefit that is the subject of the claim and to other attendant
circumstances, but which in no event shall be less than 60 days
after receipt by the claimant of written notice of denial of his
claim. The decision by Amoco with respect to the claim shall be
made not later than 60 days after receipt of the request for
review, unless special circumstances require an extension of time
for processing, in which case a decision shall be rendered as
soon as possible but not later than 120 days after receipt of the
request for review. The decision on review shall be in writing,
shall include specific reasons for the decision and specific
references to the pertinent Plan provisions on which the decision
is based and shall be written in a manner calculated to be
understood by the claimant. To the extent permitted by law, the
decision of the Plan Administrator (if no review is properly
requested) or the decision of Amoco on review, as the case may
be, shall be final and binding on all parties if it is supported
by the facts that were considered and is reasonably based on the
applicable provisions of law, the Plan and the Trust Agreement.
Any person eligible to receive benefits hereunder shall
furnish to the Plan Administrator or Amoco any information or
evidence requested by the Plan Administrator or Amoco and
reasonably required for the proper administration of the Plan.
Failure on the part of any person to comply with any such request
within a reasonable period of time shall be sufficient grounds
for delay in the payment of any benefits that may be due under
the Plan until such information or evidence is received by the
Plan Administrator or Amoco. The Plan Administrator or Amoco may
recoup from the payments to any person any amount previously paid
to such person to which he was not entitled under the provisions
of the Plan.
14.7 Administrative Discretion; Final Authority.
(a) The Plan Administrator, and Amoco with regard to
the handling of appeals, shall have the exclusive
discretionary authority to interpret 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 and Amoco with regard to Plan appeals 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.
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 or other documentation
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.
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) Upon receipt of written directions from Amoco that
a Participant's Accounts could be subject to a QDRO the Plan
Administrator will prohibit such Participant from making any
type of withdrawal and making a loan. The Plan
Administrator shall prohibit the above transactions until
directed otherwise in writing by Amoco.
(c) A payment to an alternate payee shall be in cash
and in a single sum immediately after Amoco directs the Plan
Administrator in writing, even if the Participant is not
otherwise eligible for an immediate distribution.
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 (1)
federal tax liens, and (2) rules that Amoco may prescribe 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 or Amoco 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 or
Amoco cannot locate a former Participant (or Beneficiary) within
a reasonable time, but in any event not later than 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
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, as directed by Amoco, 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 Top-Heavy Plan Provisions.
(a) Applicability of Section. This section is
included in the Plan to meet the requirements of Code
Section 416, and the provisions of this section will be
operative only if, when and to the extent that Code
Section 416 applies to the Plan. At such time as the
requirements of Code Section 416 apply to the Plan because
the Plan is top-heavy as defined in subsection (b)(i) below,
the provisions of this section will apply and will govern
over contrary provisions of the Plan.
(b) Definitions.
(i) The Plan will be top-heavy for a Plan Year if, as
of the determination date, the sum of (A) the
aggregate amount in the accounts of Participants
who are key employees (including all defined
contributions plans within the required or
permissive aggregation group) and (B) the
aggregate present value of cumulative accrued
benefits of Participants who are key employees
(including all defined benefit plans within such
group), exceeds 60 percent of such amount
determined for all participants in all such plans.
In determining the amounts in Participants' Accounts
and present values of the accrued benefits under the
preceding two paragraphs, (1) the present value of accrued
benefits will be based on the actuarial assumptions used to
determine the minimum funding requirements of Code
Section 412(b); if there is more than one defined benefit
plan in the aggregation group, each plan will use the same
actuarial assumption for purpose of the top heavy test, as
determined by the actuary; (2) distributions made during the
five years ending on the determination date will be taken
into account; (3) rollover contributions will be taken into
account only to the extent provided in regulations under
Code Section 416(g)(4)(A); (4) account balances and accrued
benefit values of a person who was but no longer is a key
employee will be disregarded; and (5) account balances and
accrued benefit values of any individual who has not
performed any services for the employer at any time during
the five years ending on the determination date will be
disregarded.
(ii) The determination date for purposes of determining
whether the Plan is top-heavy under subsection (i)
for a particular Plan Year is the last day of the
preceding Plan Year, except that in the case of
the first Plan Year of any Plan, the determination
date is the last day of such Plan Year.
(iii) A key employee is any Employee or former
Employee who has satisfied Section 3.2 (including
a Beneficiary of such an employee) and who at any
time during the Plan Year or any of the four
preceding Plan Years was:
(A) An officer of the Employer or an
Affiliated Employer having annual compensation
greater than 50% of the amount in effect under
Section 415(b)(1)(A) of the Code for such Plan
Year (but no more than 50 Employees will be taken
into account under this subsection (A) as key
employees);
(B) One of the 10 Employees owning (or
considered as owning within the meaning of Code
Section 318) the largest interests in the Employer
or Affiliated Employer but only if such Employee's
compensation for such plan year exceeds the amount
specified in Code Section 415(c)(1)(A). For
purposes of the preceding sentence, if two
Employees have the same interest in the Employer
or Affiliated Employer, the Employee having
greater annual compensation from the Employer or
an Affiliated Employer shall be treated as having
a larger interest;
(C) A person owning (or considered as owning
within the meaning of Code Section 318) more than
5% of the outstanding stock of the Employee or
Affiliated Employer or stock possessing more than
5% of the total combined voting power of all such
stock; or
(D) A person who has annual compensation
from the Employer or an Affiliated Employer of
more than $150,000 and who would be described in
subsection (C) above if 1% were substituted for
5%.
For purposes of applying Code Section 318 to
the provisions of this subsection (iii),
subparagraph (c) of Code Section 318(a)(2) will be
applied by substituting "five percent" for "50
percent." In addition, the rules of Code Section
414(b), (c), (m) and (o) will not apply for
purposes of determining ownership under
subsections (C) and (D) above.
(iv) A non-key employee is an Employee who has
satisfied Section 3.2 (including a beneficiary of
such employee) and who is not a key employee under
subsection (iii) above.
(v) A required aggregation group includes all
qualified plans of the Employer or an Affiliated
Employer in which a key employee participates,
including a terminated plan, and each other
qualified plan of the Employer or an Affiliated
Employer that enables any of such plans to meet
the requirements of Section 401(a)(4) or
Section 410 of the Code. A permissive aggregation
group includes (in addition to plans in a required
aggregation group) any plan which Amoco designates
for inclusion provided that inclusion of such plan
does not cause the group to fail the requirements
of Section 401(a)(4) and Section 410 of the Code.
(c) Minimum Contribution. For any Plan Year in which
the Plan is top-heavy, the Employer will make a minimum
contribution on behalf of each non-key employee who has
satisfied the requirements of Section 3.2 (and who is
therefore eligible to make Savings Contributions) and who is
employed on the last day of the Plan Year. The minimum
contribution will be 3% of his total compensation (as
defined in Section 6.6) or, if less, the percentage for such
Plan Year under this Plan (and any other defined
contribution plan included in an aggregation group with this
Plan) on behalf of the key employee for whom such percentage
is the highest. In the case of a non-key employee who
participates in a qualified defined benefit plan sponsored
by the Employer, the minimum contribution shall be 5% of his
total compensation (as defined in Section 6.6).
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
Illinois.
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
16.12.
(b) Before each annual or special meeting of Amoco
Corporation, there shall be sent to each Participant and
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 the 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 Transfer of Abandoned ESOP Assets to Plan.
Effective November 30, 1989 the abandoned property in the Amoco
Corporation Employee Stock Ownership Plan ("ESOP") was
transferred to the Plan's abandoned property account.
Notwithstanding anything in the Plan to the contrary, the
following shall apply. The assets transferred from the ESOP
shall remain in the Plan's abandoned property account until
December 31, 1990 and any remaining assets shall be forfeited on
January 1, 1991. If the ESOP Plan Administrator determines an
individual has a valid claim for benefits under the ESOP he shall
instruct the Plan Administrator in writing to distribute the
benefits. Such distribution will be made from the abandoned
property account, then the forfeiture account if necessary and
then from additional employer contributions if necessary.
16.14 Severability. If any provision of this Plan shall
be held illegal or invalid for any reason, said illegality or
invalidity shall not affect the remaining parts of this Plan, but
this Plan shall be construed and enforced as if said illegal or
invalid provision had never been included herein.
16.15 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>
AMENDMENT AND RESTATEMENT
OF
AMOCO EMPLOYEE SAVINGS PLAN
WHEREAS, Amoco Corporation ("Amoco") maintains the Amoco Employee
Savings Plan ("Plan"); and
WHEREAS, amendment and restatement of the Plan is now considered
desirable:
NOW, THEREFORE, pursuant to resolutions adopted by the Board of
Directors of Amoco on September 27, 1994 which delegated various
powers relating to employee benefit plans to the Senior Vice
President (Human Resources) of Amoco and the power reserved Amoco
under subsection 12.1 of the Plan, the Plan is hereby amended and
restated as evidence by the attached official text, effective
July 1, 1996.
*****************************************************************
I, R. W. Anderson, Senior Vice President of Amoco Corporation
(Human Resources), hereby approve and adopt the attached offical
text of the Amoco Employee Savings Plan, as amended and restated,
effective July 1, 1996.
Dated this 24 day of September, 1996
R. Wayne Anderson
Senior Vice President, Amoco Corporation
As aforesaid
<PAGE>
<PAGE>
SEVENTH AMENDMENT
OF
AMOCO EMPLOYEE SAVINGS PLAN
(As Amended and Restated Effective July 1, 1996)
WHEREAS, Amoco Corporation ("Amoco") maintains the Amoco Employee
Savings Plan ("Plan"); and
WHEREAS, amendment of the Plan is now considered desirable to
allow Amoco to increase the Company Matching Contribution for
certain collective bargaining units which have agreed to enter
into memoranda of understanding with Amoco regarding certain
benefit plan changes.
NOW, THEREFORE, pursuant to resolutions adopted by the Board of
Directors of Amoco on September 27, 1994 which delegated various
powers relating to employee benefit plans to the Senior Vice
President (Human Resources) of Amoco and the power reserved Amoco
under subsection 12.1 of the Plan, the Plan is hereby amended,
effective January 11, 1998 as follows:
1. Section 4.1 is amended in its entirety to read as follows:
"4.1 Savings Contributions. Each Employee who has
met one of the participation requirements in
Article III may make Tax-Deferred and/or After-Tax
Savings Contributions to the Plan in integral
percentages of his Applicable Compensation from a
minimum of 1% percent to the following maximums.
Subject to Code limitations, his maximum Tax-
Deferred Savings Contributions in any Plan Year is
15% of his Applicable Compensation for such Plan
Year. Also, subject to Code limitations, his
maximum After-Tax Savings Contributions in any
Plan Year is 20% of his Applicable Compensation
for such Plan Year. The foregoing 15% Tax-
Deferred Savings and 20% After-Tax Savings
Contributions limitations are applied to the
Participant's Applicable Compensation in each
payroll cycle and only prospectively."
2. Section 5.1 is amended in its entirety to read as follows:
"5.1 Company Matching Contributions. Effective
January 11, 1998 for each Plan Year the Employer
will make a matching contribution ("Company
Matching Contributions") on behalf of each
Participant who makes Tax-Deferred and/or After-
Tax Savings Contributions in accordance with the
following schedule. For each Plan Year the
Company Matching Contributions made on behalf of
each Participant will equal 100% of the sum of
such Participant's Tax-Deferred and After-Tax
Savings Contributions which are equal to or less
than (1) 5% of such Participant's Applicable
Compensation if he has less than 3 years of
Vesting Service, (2) 6% of such Participant's
Applicable Compensation if he has 3 or more years
of Vesting Service but less than 6 years of
Vesting Service, or (3) 7% of such Participant's
Applicable Compensation if he has 6 or more years
of Vesting Service."
*****************************************************************
I, J. F. Campbell, Senior Vice President of Amoco Corporation
(Human Resources), hereby approve and adopt the foregoing
amendment of the Amoco Employee Savings Plan, effective January
11, 1998.
Dated this 9th day of January, 1998
John F. Campbell
Senior Vice President, Amoco Corporation
As aforesaid
<PAGE>
<PAGE>
SIXTH AMENDMENT
OF
AMOCO EMPLOYEE SAVINGS PLAN
(As Amended and Restated Effective July 1, 1996)
WHEREAS, Amoco Corporation ("Amoco") maintains the Amoco Employee
Savings Plan ("Plan"); and
WHEREAS, amendment of the Plan is now considered desirable to
allow Amoco to increase the Company Matching Contribution for
certain collective bargaining units which have agreed to enter
into memoranda of understanding with Amoco regarding certain
benefit plan changes.
NOW, THEREFORE, pursuant to resolutions adopted by the Board of
Directors of Amoco on September 27, 1994 which delegated various
powers relating to employee benefit plans to the Senior Vice
President (Human Resources) of Amoco and the power reserved Amoco
under subsection 12.1 of the Plan, the Plan is hereby amended,
effective January 1, 1998 as follows:
1. The last paragraph of Section 5.1 is amended to read as
follows:
"For purposes of this subsection (b) "Affected Union
Employee" means each Participant who is employed by the
Employer within any of the following bargaining units:
(i) OCAW Local No. 4-449 - Texas City Chemicals
(ii) OCAW Local No. 4-449 - Texas City Refinery."
**************************************************
I, R. W. Anderson, Senior Vice President of Amoco Corporation
(Human Resources), hereby approve and adopt the foregoing
amendment of the Amoco Employee Savings Plan, effective January
1, 1998.
Dated this 24 day of December, 1997
R. Wayne Anderson
Senior Vice President, Amoco Corporation
As aforesaid
<PAGE>
<PAGE>
FIFTH AMENDMENT
OF
AMOCO EMPLOYEE SAVINGS PLAN
(As Amended and Restated as of July 1, 1996)
WHEREAS, Amoco Corporation ("Amoco") maintains the Amoco Employee
Savings Plan (the "Plan"); and
WHEREAS, amendment of the Plan is now considered desirable to
specify how the former employees of Amoco Production Company
("APC") and Amoco Gas Company ("AGC") who terminate due to the
sale of certain facilities during the period commencing December
1, 1997 and ending July 1, 1998, will be treated under the Plan:
NOW, THEREFORE, pursuant to resolutions adopted by the Board of
Directors of Amoco on September 27, 1994, which delegated various
powers relating to employee benefit plans to the Senior Vice
President (Human Resources) of Amoco, and the power reserved to
Amoco under Section 21.01 of the Plan, the Plan is hereby amended
effective December 1, 1997, to provide that all participants
whose employment with APC or AGC is terminated because of the
sale of any element of APC during the period commencing December
1, 1997 and ending July 1, 1998, shall become 100% vested in
their Plan account balance and treated as no longer employed by
Amoco or any of its participating subsidiaries for all purposes
under the Plan.
******************************************************
I, R. W. Anderson, Senior Vice President of Amoco Corporation
(Human Resources), hereby approve and adopt the foregoing
amendment of the Employee Savings Plan of Amoco Corporation and
Participating Companies, effective December 1, 1997.
Dated this 19 day of
December, 1997
R. Wayne Anderson
Senior Vice President, Amoco Corporation
As aforesaid
<PAGE>
<PAGE>
FOURTH AMENDMENT
OF
AMOCO EMPLOYEE SAVINGS PLAN
(As Amended and Restated Effective July 1, 1996)
WHEREAS, Amoco Corporation ("Amoco") maintains the Amoco Employee
Savings Plan ("Plan"): and
WHEREAS, amendment of the Plan is now considered desirable to
allow Amoco to increase the Company Matching Contribution and to
make certain other changes:
NOW, THEREFORE, pursuant to resolutions adopted by the Board of
Directors of Amoco on September 27, 1994 which delegated various
powers relating to employee benefit plans to the Senior Vice
President (Human Resources) of Amoco and the power reserved Amoco
under subsection 12.1 of the Plan, the Plan is hereby amended,
effective January 1, 1998 as follows:
1. Section 4.1 is amended by adding the following sentence to
the end thereto:
"Except with respect to each Affected Union
Employee (as defined in Section 5.1(b)), the
maximum limitation of this Section 4.1 shall be
reduced from 21% to 20% commencing effective for
the entire payroll period ending on January 9,
1998."
2. The third sentence of Section 4.2 is amended to read as
follows:
"His Savings Contributions will begin as soon as
administratively possible after the first full
payroll period following the date he enrolls."
3. Section 5.1 is amended in its entirety to read as follows:
"5.1 Company Matching Contributions.
(a) For each Plan Year commencing effective for the
entire payroll period ending on January 9, 1998, the
Employer will make a matching contribution ("Company
Matching Contributions") on behalf of each Participant
who makes Tax-Deferred and After-Tax Savings
Contributions which are equal to or less than (1) 5% of
such Participant's Applicable Compensation if he has
less than 3 years of Vesting Service, (2) 6% of such
Participant's Applicable Compensation if he has 3 or
more years of Vesting Service but less than 6 years of
Vesting Service, or (3) 7% of such Participant's
Applicable Compensation if he has 6 or more years of
Vesting Service.
(b) Notwithstanding subsection (a), the maximum
Company Matching Contributions for each Affected Union
Employee will be (1) 4% of such Participant's
Applicable Compensation if he has less than 3 years of
Vesting Service, (2) 5% of such Participant's
Applicable Compensation if he has 3 or more years of
Vesting Service, but less than 6 years of Vesting
Service, or (3) 6% of such Participant's Applicable
Compensation if he has 6 or more years of Vesting
Service.
For purposes of this subsection (b), "Affected Union
Employee" means each Participant who is employed by the
Employer within any of the following bargaining units:
(i) OCAW Local No. 7-736-Wood River
(ii) OCAW Local No. 7-1-Whiting Refinery
(iii) OCAW Local No. 7-1-Whiting Terminal
(iv) OCAW Local No. 7-1-Whiting Refinery (Guards)
(v) OCAW Local No. 6-10-Mandan Refinery
(vi) OCAW Local No. 4-449-Texas City Chemicals
(vii) OCAW Local No. 4-449-Texas City Refinery
(viii) OCAW Local No. 2-286-Salt Lake Refinery
(ix) OCAW Local No. 3-1-Yorktown Refinery."
4. Section 8.2 is amended by deleting the second and third
sentences thereto and inserting in lieu thereof the
following sentence:
"A Participant may not have more than two
outstanding loans."
5. Section 9.4 is amended by revising the penultimate sentence
thereto to read as follows:
"If a Participant makes a withdrawal from his Tax-
Deferred Savings Account he will be prohibited
from making any Savings Contributions until the
first day of the first payroll period commencing
12 months following the last day of the payroll
period during which the distribution of the
withdrawal occurred."
*****************************************************************
I, R. W. Anderson, Senior Vice President of Amoco Corporation
(Human Resources), hereby approve and adopt the foregoing
amendment of the Amoco Employee Savings Plan, effective January
1, 1998.
Dated this 19 day of December, 1997
R. Wayne Anderson
Senior Vice President, Amoco Corporation
As aforesaid
<PAGE>
<PAGE>
THIRD AMENDMENT
OF
AMOCO EMPLOYEE SAVINGS PLAN
(As Amended and Restated Effective July 1, 1996)
WHEREAS, Amoco Corporation ("Amoco") maintains the Amoco Employee
Savings Plan ("Plan"): and
WHEREAS, amendment of the Plan is now considered desirable to
allow Amoco to make Supplemental Company Matching Contributions:
NOW, THEREFORE, pursuant to resolutions adopted by the Board of
Directors of Amoco on September 27, 1994 which delegated various
powers relating to employee benefit plans to the Senior Vice
President (Human Resources) of Amoco and the power reserved Amoco
under subsection 12.1 of the Plan, the Plan is hereby amended,
effective December 31, 1997 by adding the following new
subsection 16.16:
"16.16 Conditions of Supplemental Company Matching
Contributions.
(a) Supplemental Company Matching Contributions. For
any Plan Year, Amoco may make Supplemental Company Matching
Contributions to the Plan in the form of employer contributions
(within the meaning of Section 404 of the Code), in cash, at
least equal to a specified dollar amount. Such amount shall be
determined by the Board of Directors of Amoco or an authorized
officer of Amoco by appropriate written documentation.
Any Supplemental Company Matching Contributions
contributed for a Plan Year by Amoco may be made in one or more
installments without interest. Amoco shall pay the Supplemental
Company Matching Contributions at any time during the Plan Year,
and for purposes of deducting such Contribution, shall make the
Contribution, not later than the time prescribed by the Code for
filing Amoco's Federal income tax return including extensions,
for its taxable year that ends within such Plan Year.
(b) Allocation of Supplemental Company Matching
Contributions. The Supplemental Company Matching Contribution
for any Plan Year shall be allocated to the Company Contribution
Account of each Participant who was employed by an Employer on
the first day of the Plan Year for which the Supplemental Company
Matching Contribution is made, as follows:
(1) First, the Supplemental Company Matching
Contribution for the Plan Year shall be allocated to the Tax-
Deferred Savings Account of each Participant as Tax-Deferred
Savings Contributions pursuant to Article IV and to the Company
Contribution Account of each Participant as Company Matching
Contributions pursuant to Article V.
(2) Second, the balance of any Supplemental
Company Matching Contribution remaining after the allocation in
subsection 16.16(b)(1) shall be allocated to the Company
Contribution Account of each Participant who is employed by an
Employer on the last day of the Plan Year, in the ratio that such
Participant's Tax-Deferred Savings Contributions during the
Plan Year bears to the Tax-Deferred Savings Contributions of all
such Participants during such Plan Year.
(3) The Plan Administrator shall reduce the
proportionate allocation under subsection 16.16(b)(2) to Highly
Compensated Employees (as defined in Section 414(q) of the Code)
to the extent necessary to comply with the provisions of Section
401(a)(4) of the Code and regulations thereunder.
(4) The Supplemental Company Matching
Contribution allocated to the Company Contribution Account of a
Participant pursuant to subsection 16.16(b)(2) shall be treated
in the same manner as Company Matching Contributions for all
purposes of the Plan, and shall become vested in accordance with
Section 10.2.
(5) The Supplemental Company Matching
Contribution shall be held in a suspense account until allocated
in accordance with this subsection 16.16. Such suspense account
shall not participate in the allocation of investment gains,
losses, income and deductions of the Trust Fund as a whole, but
shall be invested separately and all gains, losses, income and
deductions attributable to such investment shall be applied to
reduce any reasonable Plan administrative expense and thereafter,
to reduce employer contributions (within the meaning of Section
404 of the Code). In the event that any Supplemental Company
Matching Contribution remains to be allocated after the
application of subsections 16.16(b)(2) and 16.16(b)(3), then such
excess shall be held in a suspense account to be used to be
allocated as Supplemental Company Matching Contributions in the
next, and (to the extent necessary) succeeding, Plan Years.
(6) Notwithstanding any provision of the Plan to
the contrary, any allocation of a Participant's Tax-Deferred
Savings Contributions shall be made under either Article IV or
this subsection 16.16, as appropriate, but not both provisions.
Similarly, any allocation of Company Matching Contributions shall
be made under either Article V or this subsection 16.16, as
appropriate, but not both provisions.
(7) Notwithstanding any provision of the Plan to
the contrary, any Supplemental Company Matching Contribution made
to the Plan by Amoco (i) may not be returned to Amoco or any of
its affiliates and (ii) can be made whether or not Amoco has
current or accumulated profits."
*****************************************************************
I, R. W. Anderson, Senior Vice President of Amoco Corporation
(Human Resources), hereby approve and adopt the foregoing
amendment of the Amoco Employee Savings Plan, effective December
31, 1997.
Dated this 19 day of December, 1997
R. Wayne Anderson
Senior Vice President, Amoco Corporation
As aforesaid
<PAGE>
<PAGE>
SECOND AMENDMENT
OF
EMPLOYEE SAVINGS PLAN OF
AMOCO CORPORATION AND PARTICIPATING COMPANIES
(As Amended and Restated July 1, 1996)
WHEREAS, Amoco Corporation ("Amoco") maintains the Employee
Savings Plan of Amoco Corporation and Participating Companies
(the "Plan"); and
WHEREAS, amendment of the Plan is considered desirable:
NOW, THEREFORE, pursuant to the resolutions adopted by the Board
of Directors of Amoco on September 27, 1994, which delegated
various powers relating to employee benefit plans to the Senior
Vice President (Human Resources) of Amoco and the power reserved
Amoco under Section 12.01 of the Plan, the Plan is hereby amended
as follows:
Midgard Energy Company ("Midgard") employees who become employees
of Amoco or any company participating in the Plan shall be given
participation and vesting credit under the Plan for Midgard
service. This provision shall apply only to employees accepting
employment on or after October 1, 1997 but not later than
December 31, 1999.
I. R.W. Anderson, Senior Vice President (Human Resources) of
Amoco Corporation, hereby approve and adopt the foregoing
amendment to the Plan, effective October 1, 1997.
Dated this 21 day of Oct, 1997
R. W. Anderson
Senior Vice President, Amoco Corporation
As aforesaid
<PAGE>
<PAGE>
THIRD AMENDMENT
OF
AMOCO EMPLOYEE SAVINGS PLAN
(As Amended and Restated Effective July 1, 1996)
WHEREAS, Amoco Corporation ("Amoco") maintains the Amoco Employee
Savings Plan ("Plan"): and
WHEREAS, amendment of the Plan is now considered desirable to
specify how the former employees of Amoco and its participating
subsidiaries who become employees of Altura Energy Ltd. during
the period commencing March 1, 1997 and ending June 2, 1997 will
be treated under the Plan:
NOW, THEREFORE, pursuant to resolutions adopted by the Board of
Directors
of Amoco on September 27, 1994 which delegated various powers
relating to employee benefit plans to the Senior Vice President
(Human Resources) of Amoco and the power reserved Amoco under
subsection 12.1 of the Plan, the Plan is hereby amended,
effective March 1, 1997 to specify how the former employees of
Amoco and its participating subsidiaries who become employees of
Altura Energy Ltd. during the period commencing March 1, 1997 and
ending June 2, 1997 they will be 100% vested in their Company
Contribution Account balance, their outstanding loans will be
subject to the Plan's default procedure, will not be able to
initiate any new loans, will not be able to receive a lump-sum
distribution resulting from a separation of service until they
are no longer employed by Altura Energy Ltd. and will be able to
make any type of in-service withdrawal under the Plan.
.
* * * * * * * * * * * * * * * * *
*
I, R. W. Anderson, Senior Vice President of Amoco Corporation
(Human Resources), hereby approve and adopt the foregoing
amendment of the Amoco Employee Savings Plan, effective March 1,
1997.
Dated this 10 day of March, 1997.
R. Wayne Anderson
Senior Vice President, Amoco Corporation
As aforesaid
<PAGE>
<PAGE>
<PAGE>
<PAGE>
Exhibit 11
AMOCO CORPORATION
_________________
COMPUTATION OF BASIC AND DILUTED
NET INCOME PER SHARE
(in millions, except per share)
Year ended December 31,
1997 1996 1995
Net income per share (basic)
Shares of common stock:
Weighted average number of
common shares outstanding...... 490 497 495
Basic weighted average shares
outstanding..................... 490 497 495
Net income....................... $2,720 $2,834 $1,862
Net income used in computing net
income per common share (basic). $2,720 $2,834 $1,862
Net income per share (basic)..... $ 5.55 $ 5.69 $ 3.76
Net income per share (assuming dilution)
Shares of common stock:
Weighted average number of
common shares outstanding...... 490 497 495
Dilutive effect of options...... 3 2 2
Diluted weighted average shares
outstanding..................... 493 499 497
Net income....................... $2,720 $2,834 $1,862
Net income used in computing
net income per common share
(assuming dilution)............. $2,720 $2,834 $1,862
Net income per share (assuming
dilution)....................... $ 5.52 $ 5.67 $ 3.75
<PAGE>
<PAGE>
<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,
1997 1996 1995 1994 1993
Determination of Income:
Consolidated earnings
before income taxes
and minority interest.. $3,771 $3,965 $2,404 $2,491 $2,506
Fixed charges expensed by
consolidated companies. 452 412 406 316 350
Adjustments for certain
companies accounted for
by the equity method... 66 69 25 7 11
Adjusted earnings plus
fixed charges.......... $4,289 $4,446 $2,835 $2,814 $2,867
Determination of Fixed Charges:
Consolidated interest on
indebtedness (including
interest capitalized).. $ 363 $ 317 $ 317 $ 288 $ 299
Consolidated rental
expense representative
of an interest factor.. 102 107 89 23 50
Adjustments for certain
companies accounted for
by the equity method... 7 8 6 5 8
Total fixed charges...... $ 472 $ 432 $ 412 $ 316 $ 357
Ratio of earnings to
fixed charges............ 9.1 10.3 6.9 8.9 8.0
<PAGE>
<PAGE>
<PAGE>
<PAGE>
Exhibit 21
AMOCO CORPORATION
_________________
SUBSIDIARIES OF THE REGISTRANT
AT December 31, 1997
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 Corporatin.......... 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
Organized
Under
Company (1) Laws of
Amoco Oil Holding Company....................... Delaware
Amoco Corporate Development Company (Latin
America).................................... Delaware
Amoco Mexico Holding Company S.A. de C.V.... Mexico
Amoco Fabrics and Fibers de Mexico
S.A. de C.V............................. Mexico
Amoco Sulfur Recovery Company................. Delaware
Amoco Marketing Environmental Services Company.. Nevada
Amoco Pipeline Company............................ Maine
Amoco Pipeline Holding Company.................. Delaware
Amoco Production Company.......................... Delaware
Amoco Caspian Sea Petroleum Company............. Delaware
Amoco Caspian Sea Petroleum Limited........... British
Virgin
Islands
Amoco Colombia Petroleum Company................ Delaware
Amoco D.T. 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 Europe Limited............................ England
Amoco (U.K.) Exploration Company.............. Delaware
Amoco International Petroleum Company........... Delaware
Amoco Argentina Oil Company................... Delaware
Pan American Energy LLC.(A)................. Delaware
Amoco Trinidad Oil Company.................... Delaware
Amoco Netherlands Petroleum Company............. Delaware
Amoco Bolivia Oil and Gas Atkiebolag.......... Sweden
Empresa Petrolera Chaco S.A.(A)............. Bolivia
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 Venezuela Petroleum Company............... Delaware
Organized
Under
Company (1) Laws of
Amoco X.T. Company.............................. Delaware
Altura Energy Ltd............................. Texas
Amoco Y.M. Company.............................. Delaware
Crescendo Resources, L.P.(A).................. Delaware
Coastwise Trading Company, Inc.................. Delaware
Coastwise Guaranty Company.................... Delaware
TOC--Rocky Mountains Inc........................ Delaware
Amoco Y.T. Company............................ 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) Three hundred subsidiaries and thirty-six 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>
<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. 333-26145, 333-
27981, 33-65153, 33-52575, 33-51475, 33-40099, and 33-5332)
and in the Prospectuses constituting part of the Registration
Statements on Forms S-3 (Nos. 333-36923, 33-61389, and 33-
63811) of Amoco Corporation of our report dated February 24,
1998 appearing in Item 8 of this Form 10-K.
PRICE WATERHOUSE LLP
Chicago, Illinois
March 20, 1998
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<PAGE>
<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> 1000000
<S> <C>
<PERIOD-TYPE> YEAR
<FISCAL-YEAR-END> DEC-31-1997
<PERIOD-START> JAN-01-1997
<PERIOD-END> DEC-31-1997
<CASH> 166
<SECURITIES> 979
<RECEIVABLES> 3595
<ALLOWANCES> 10
<INVENTORY> 1174
<CURRENT-ASSETS> 7044
<PP&E> 49357
<DEPRECIATION> 26814
<TOTAL-ASSETS> 32489
<CURRENT-LIABILITIES> 6044
<BONDS> 4639
0
0
<COMMON> 2568
<OTHER-SE> 13751
<TOTAL-LIABILITY-AND-EQUITY> 32489
<SALES> 31910
<TOTAL-REVENUES> 36287
<CGS> 23343
<TOTAL-COSTS> 23343
<OTHER-EXPENSES> 6595
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 401
<INCOME-PRETAX> 3776
<INCOME-TAX> 1056
<INCOME-CONTINUING> 2720
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 2720
<EPS-PRIMARY> 5.55
<EPS-DILUTED> 5.52
<PAGE>
<PAGE>
</TABLE>
