EXHIBIT 1.2
PRICING AGREEMENT
New York, New York
February 27, 0000
Xxxx xx Xxxxxxx Securities LLC
Xxxxxxx Xxxxx Xxxxxx Inc.
As Representatives of the several Underwriters
named in Schedule I hereto,
c/o Banc of America Securities LLC
Bank of America Corporate Center
000 Xxxxx Xxxxx Xxxxxx
Xxxxxxxxx, XX 00000
c/o Xxxxxxx Xxxxx Xxxxxx Inc.
000 Xxxxxxxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Ladies and Gentlemen:
Marathon Oil Corporation, a Delaware corporation (the
"Company"), proposes, subject to the terms and conditions stated herein and in
the Underwriting Agreement, dated February 27, 2002 (the "Underwriting
Agreement"), between the Company on the one hand and Banc of America Securities
LLC and Xxxxxxx Xxxxx Barney Inc., as Representatives of the several
underwriters, on the other hand, to issue and sell to the Underwriters named in
Schedule I hereto (the "Underwriters") the Securities specified in Schedule II
and Schedule III hereto (the "Designated Securities"). Each of the provisions of
the Underwriting Agreement is incorporated herein by reference in its entirety,
and shall be deemed to be a part of this Agreement to the same extent as if such
provisions had been set forth in full herein; and each of the representations
and warranties set forth therein shall be deemed to have been made at and as of
the date of this Pricing Agreement, except that each representation and warranty
which refers to the Prospectus in Section 2 of the Underwriting Agreement shall
be deemed to be a representation or warranty as of the date of the Underwriting
Agreement in relation to the Prospectus, and also a representation and warranty
as of the date of this Pricing Agreement in relation to the Final Prospectus
relating to the Designated Securities which are the subject of this Pricing
Agreement. Each reference to the Representatives herein and in the provisions of
the Underwriting Agreement so incorporated by reference shall be deemed to refer
to you. Unless otherwise defined herein, terms defined in the Underwriting
Agreement are used herein as therein defined.
The Representatives designated to act on behalf of the
Representatives and on behalf of each of the Underwriters of the Designated
Securities pursuant to Section 12 of the Underwriting Agreement and the address
of the Representatives referred to in such Section 12 are set forth at the end
of Schedule II hereto.
The documents required to be delivered by Section 7 of the
Underwriting Agreement shall be delivered at the office of Cravath, Swaine &
Xxxxx, counsel for the Underwriters, at 000 Xxxxxx Xxxxxx, Xxx Xxxx, XX 00000,
at the Time of Delivery.
An amendment to the Registration Statement, or a supplement to
the Prospectus, as the case may be, relating to the Designated Securities, in
the form heretofore delivered to you is now proposed to be filed with the
Commission.
Subject to the terms and conditions set forth herein and in
the Underwriting Agreement incorporated herein by reference, the Company agrees
to issue and sell to each of the Underwriters and each of the Underwriters
agrees, severally and not jointly, to purchase from the Company, at the time and
place and at the purchase price to the Underwriters set forth in Schedule II
hereto, the principal amount of Designated Securities set forth opposite the
name of such Underwriter in Schedule I hereto.
[REMAINDER OF PAGE INTENTIONALLY LEFT BLANK]
If the foregoing is in accordance with your understanding,
please sign and return to us seven counterparts hereof, and upon acceptance
hereof by you, on behalf of each of the Underwriters, this letter and such
acceptance hereof, including the provisions of the Underwriting Agreement
incorporated herein by reference, shall constitute a binding agreement between
each of the Underwriters and the Company. It is understood that your acceptance
of this letter on behalf of each of the Underwriters is or will be pursuant to
the authority set forth in a form of Agreement Among Underwriters, the form of
which shall be submitted to the Company for examination upon request, but
without warranty on the part of the Representatives as to the authority of the
signers thereof.
Very truly yours,
Marathon Oil Corporation
By: /s/ XXXX X. XXXXXXXX
-----------------------------------
Name: Xxxx X. Xxxxxxxx
Title: Vice President, Finance and
Treasurer
The foregoing Agreement is hereby confirmed and accepted as of the date first
above written.
Banc of America Securities LLC
Xxxxxxx Xxxxx Barney Inc.
By: Banc of America Securities LLC
By: /s/ XXXX XXXXX
--------------------------
Name: Xxxx Xxxxx
Title: Principal
By: Xxxxxxx Xxxxx Xxxxxx Inc.
By: /s/ XXXX-XXXXXX XXXXX
--------------------------
Name: Xxxx-Xxxxxx Xxxxx
Title: Vice President
For each of themselves and the
other several Underwriters
named in Schedule I to this
Agreement.
SCHEDULE I
PRINCIPAL AMOUNT OF 2012 PRINCIPAL AMOUNT OF 2032
UNDERWRITER NOTES TO BE PURCHASED NOTES TO BE PURCHASED
----------- ------------------------ ------------------------
Banc of America Securities LLC $146,250,000 $178,760,000
Xxxxxxx Xxxxx Barney Inc. $146,250,000 $178,760,000
X.X. Xxxxxx Securities Inc. $45,000,000 $55,000,000
Credit Suisse First Boston Corporation $22,500,000 $27,500,000
Xxxxxxx, Sachs & Co. $22,500,000 $27,500,000
Xxxxxx Brothers Inc. $22,500,000 $27,500,000
Xxxxxx Xxxxxxx & Co. Incorporated $22,500,000 $27,500,000
Commerzbank Capital Markets Corp. $7,500,000 $9,160,000
Mizuho International plc $7,500,000 $9,160,000
Scotia Capital (USA) Inc. $7,500,000 $9,160,000
Total: $450,000,000 $550,000,000
SCHEDULE II
TITLE: 6.125% Notes Due 2012.
PRINCIPAL AMOUNT: $450,000,000.
INDENTURE: Indenture, dated as of February 26, 2002 between the Company
and JPMorgan Chase Bank, as Trustee.
INTEREST: 6.125% per annum, from March 4, 2002, payable semi-annually
on March 15 and September 15, commencing September 15, 2002, to holders of
record on the preceding March 1 and September 1, as the case may be.
MATURITY: March 15, 2012.
PURCHASE PRICE: 99.317% of principal amount plus accrued interest, if
any, from March 4, 2002.
EXPECTED REOFFERING PRICE: 99.967% of principal amount, subject to
change by the undersigned.
SINKING FUND: None.
DELAYED DELIVERY CONTRACTS: None.
OPTIONAL REDEMPTION: The Notes will be redeemable in whole or in part
at any time and from time to time, at the option of the Company, at a redemption
price equal to the greater of (1) 100% of the principal amount of the Notes to
be redeemed or (2) the sum of the present values of the remaining scheduled
payments of principal and interest on the Notes to be redeemed (exclusive of
interest accrued to the date of redemption) discounted to the date of redemption
on a semiannual basis (assuming a 360-day year consisting of twelve 30-day
months) at the Treasury Rate (as defined in Schedule A attached hereto) plus 25
basis points, plus, in either case, accrued and unpaid interest on the principal
amount being redeemed to the date of redemption.
CLOSING: 10:00 A.M. on March 4, 2002, at the offices of Cravath, Swaine
& Xxxxx, Worldwide Plaza, 000 Xxxxxx Xxxxxx, Xxx Xxxx, XX 00000, in same day
funds.
NAMES AND ADDRESSES OF CO-REPRESENTATIVES:
Banc of America Securities LLC Xxxxxxx Xxxxx Barney Inc.
Bank of America Corporate Center 000 Xxxxxxxxx Xxxxxx
000 Xxxxx Xxxxx Xxxxxx Xxx Xxxx, XX 00000
Xxxxxxxxx, XX 00000
SCHEDULE III
TITLE: 6.8% Notes Due 2032.
PRINCIPAL AMOUNT: $550,000,000.
INDENTURE: Indenture, dated as of February 26, 2002 between the Company
and JPMorgan Chase Bank, as Trustee.
INTEREST: 6.8% per annum, from March 4, 2002, payable semi-annually
on March 15 and September 15, commencing September 15, 2002, to holders of
record on the preceding March 1 and September 1, as the case may be.
MATURITY: March 15, 2032.
PURCHASE PRICE: 98.715% of principal amount plus accrued interest, if
any, from March 4, 2002.
EXPECTED REOFFERING PRICE: 99.590% of principal amount, subject to
change by the undersigned.
SINKING FUND: None.
DELAYED DELIVERY CONTRACTS: None.
OPTIONAL REDEMPTION: The Notes will be redeemable in whole or in part
at any time and from time to time, at the option of the Company, at a redemption
price equal to the greater of (1) 100% of the principal amount of the Notes to
be redeemed or (2) the sum of the present values of the remaining scheduled
payments of principal and interest on the Notes to be redeemed (exclusive of
interest accrued to the date of redemption) discounted to the date of redemption
on a semiannual basis (assuming a 360-day year consisting of twelve 30-day
months) at the Treasury Rate (as defined in Schedule A attached hereto) plus 30
basis points, plus, in either case, accrued and unpaid interest on the principal
amount being redeemed to the date of redemption.
CLOSING: 10:00 A.M. on March 4, 2002, at the offices of Cravath,
Swaine & Xxxxx, Worldwide Plaza, 000 Xxxxxx Xxxxxx, Xxx Xxxx, XX 00000, in same
day funds.
NAMES AND ADDRESSES OF CO-REPRESENTATIVES:
Banc of America Securities LLC Xxxxxxx Xxxxx Barney Inc.
Bank of America Corporate Center 000 Xxxxxxxxx Xxxxxx
000 Xxxxx Xxxxx Xxxxxx Xxx Xxxx, XX 00000
Xxxxxxxxx, XX 00000
SCHEDULE A
"Business Day" means any calendar day that is not a Saturday, Sunday or
legal holiday in New York, New York or Houston, Texas and on which commercial
banks are open for business in New York, New York and Houston, Texas.
"Comparable Treasury Issue" means the United States Treasury security
selected by an Independent Investment Banker as having a maturity comparable to
the remaining term ("Remaining Life") of the Notes to be redeemed that would be
utilized, at the time of selection and in accordance with customary financial
practice, in pricing new issues of corporate debt securities of comparable
maturity to the remaining term of such Notes.
"Comparable Treasury Price" means, with respect to any redemption date,
(1) the average of the Reference Treasury Dealer Quotations for such redemption
date, after excluding the highest and lowest Reference Treasury Dealer
Quotations, or (2) if the Trustee obtains fewer than four such Reference
Treasury Dealer Quotations, the average of all such quotations.
"Independent Investment Banker" means one of the Reference Treasury
Dealers that the Company appoints to act as the Independent Investment Banker
from time to time.
"Reference Treasury Dealer" means (1) Xxxxxxx Xxxxx Barney Inc., Banc
of America Securities LLC and X.X. Xxxxxx Securities Inc., and their respective
successors, and one other firm that is a primary U.S. Government securities
dealer (a "Primary Treasury Dealer") which we specify from time to time;
provided, however, that if any of them ceases to be a Primary Treasury Dealer,
the Company shall substitute therefor another Primary Treasury Dealer.
"Reference Treasury Dealer Quotations" means, with respect to each
Reference Treasury Dealer and any redemption date, the average, as determined by
the Trustee, of the bid and asked prices for the Comparable Treasury Issue
(expressed in each case as a percentage of its principal amount) quoted in
writing to the Trustee by such Reference Treasury Dealer at 5:00 p.m., New York
City time, on the third Business Day preceding such redemption date.
"Treasury Rate" means, with respect to any redemption date, the rate
per annum equal to: (1) the yield, under the heading which represents the
average for the immediately preceding week, appearing in the most recently
published statistical release designated "H.15(519)" or any successor
publication which is published weekly by the Board of Governors of the Federal
Reserve System and which establishes yields on actively traded United States
Treasury securities adjusted to constant maturity under the caption "Treasury
Constant Maturities," for the maturity corresponding to the Comparable Treasury
Issue; provided that, if no maturity is within three months before or after the
Remaining Life of the Notes to be redeemed, yields for the two published
maturities most closely corresponding to the Comparable Treasury Issue shall be
determined and the Treasury Rate shall be interpolated or extrapolated from such
yields on a straight line basis, rounding to the nearest month; or (2) if such
release (or any successor release) is not published during the week preceding
the calculation date or does not contain such yields, the rate per annum equal
to the semiannual equivalent yield to maturity of the Comparable Treasury Issue,
calculated using a price for the Comparable Treasury Issue (expressed as a
percentage of its principal amount) equal to the Comparable Treasury Price for
such redemption date. The Treasury Rate shall be calculated on the third
Business Day preceding the redemption date.
