EXHIBIT 1.2
EXECUTION VERSION
MARATHON GLOBAL FUNDING CORPORATION
DEBT SECURITIES
(FULLY AND UNCONDITIONALLY GUARANTEED
BY MARATHON OIL CORPORATION)
PRICING AGREEMENT
New York, New York
June 18, ▇▇▇▇
▇▇▇▇ ▇▇ ▇▇▇▇▇▇▇ Securities LLC
▇.▇. ▇▇▇▇▇▇ Securities Inc.
As Representatives of the several Underwriters,
c/o Banc of America Securities LLC
▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
c/o ▇.▇. ▇▇▇▇▇▇ Securities Inc.
▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇ ▇▇▇▇▇
Dear Sirs:
Marathon Global Funding Corporation, a Nova Scotia unlimited
liability company (the "Company"), and Marathon Oil Corporation, a Delaware
corporation (the "Guarantor"), propose, subject to the terms and conditions
stated herein and in the Underwriting Agreement, dated June 18, 2002 (the
"Underwriting Agreement"), among the Company, the Guarantor, and Banc of America
Securities LLC and ▇.▇. ▇▇▇▇▇▇ Securities Inc., as Representatives of the
several underwriters, to issue and sell to the Underwriters named in Schedule I
hereto (the "Underwriters") the Securities specified in Schedule II hereto (the
"Designated Securities"). The Designated Securities are fully and
unconditionally guaranteed by the Guarantor. 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 Final 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 Final Prospectus (as therein defined),
and also a representation and warranty as of the date of this Pricing Agreement
in relation to the Final Prospectus as amended or supplemented relating to the
Designated Securities which are the subject of this Pricing
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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 &
▇▇▇▇▇, counsel for the Underwriters, at ▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇
▇▇▇▇▇ 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.
[THE REMAINDER OF PAGE IS INTENTIONALLY LEFT BLANK]
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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, the Company, and the Guarantor. 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 Global Funding Corporation
By: /s/ ▇▇▇▇ ▇. ▇▇▇▇▇
------------------------------------
Name: ▇▇▇▇ ▇. ▇▇▇▇▇
Title: Treasurer
Very truly yours,
Marathon Oil Corporation
By: /s/ ▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
------------------------------------
Name: ▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
Title: Vice President, Finance and Treasurer
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The foregoing Agreement is hereby
confirmed and accepted as of the
date first above written.
BANC OF AMERICA SECURITIES LLC
▇. ▇. ▇▇▇▇▇▇ SECURITIES INC.
By: Banc of America Securities LLC
By: /s/ ▇▇▇▇ ▇▇▇▇▇
------------------------------------
Name: ▇▇▇▇ ▇▇▇▇▇
Title: Principal
By: ▇.▇. ▇▇▇▇▇▇ Securities Inc.
By: /s/ ▇.▇. ▇▇▇▇▇▇▇▇▇▇▇
------------------------------------
Name: ▇.▇. ▇▇▇▇▇▇▇▇▇▇▇
Title: Vice President
For each of themselves and the other
several Underwriters named in
Schedule I to this Agreement.
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SCHEDULE I
PRINCIPAL AMOUNT OF DESIGNATED
UNDERWRITER SECURITIES TO BE PURCHASED
----------------------------------------------------------- -----------------------------------------------------
Banc of America Securities LLC $130,000,000
▇.▇. ▇▇▇▇▇▇ Securities Inc. $130,000,000
Commerzbank Capital Markets Corp. $ 23,077,000
Credit Suisse First Boston Corporation $ 23,077,000
▇▇▇▇▇▇ Brothers Inc. $ 23,077,000
Scotia Capital (USA) Inc. $ 23,077,000
ABN AMRO Incorporated $ 15,898,000
Mellon Financial Markets, LLC $ 15,897,000
▇▇▇▇▇▇ ▇▇▇▇▇▇▇ & Co. Incorporated $ 15,897,000
------------
Total: $400,000,000
============
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SCHEDULE II
TITLE: 6% Notes Due 2012.
PRINCIPAL AMOUNT: $400,000,000.
INDENTURE: Indenture, dated as of June 14, 2002, between the Company,
the Guarantor, and JPMorgan Chase Bank, as Trustee.
INTEREST: 6% from June 21, 2002, payable semiannually on January 1 and
July 1, commencing January 1, 2003, to holders of record on the preceding June
15 and December 15, as the case may be.
MATURITY: July 1, 2012.
PURCHASE PRICE: 98.524% of principal amount plus accrued interest, if
any, from June 21, 2002.
EXPECTED REOFFERING PRICE: 99.174% 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 a.m. on June 21, 2002, at the offices of Cravath, Swaine &
▇▇▇▇▇, ▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇, in same day funds.
NAMES AND ADDRESSES OF CO-REPRESENTATIVES:
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Banc of America Securities LLC ▇.▇. ▇▇▇▇▇▇ Securities Inc.
▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇▇ ▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇ ▇▇▇ ▇▇▇▇, ▇▇ ▇▇▇▇▇
Attention: Transaction Execution Group
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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 Banc of America Securities
LLC and ▇.▇. ▇▇▇▇▇▇ Securities Inc. and their respective successors, and two
other firms that are primary U.S. Government securities dealers (each a "Primary
Treasury Dealer") which the Company specifies 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
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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.
