Exhibit 10(i)
EXECUTION COPY
AMENDMENT NO. 1, dated as of
December 31, 1998 (this "Amendment") to the
PUT/CALL, REGISTRATION RIGHTS AND STANDSTILL
AGREEMENT dated as of January 1, 1998 (the
"Agreement") among MARATHON OIL COMPANY, an
Ohio corporation, USX CORPORATION, a Delaware
corporation, ASHLAND INC., a Kentucky
corporation and MARATHON ASHLAND PETROLEUM
LLC, a Delaware limited liability company
(collectively, the "Parties").
WHEREAS, the Parties have heretofore entered into
the Agreement (capitalized terms used in this Amendment and
not defined herein shall have the meanings given such terms
in the Agreement); and
WHEREAS, the Parties wish to amend the Agreement
to reflect certain changes to the prices set forth therein.
NOW, THEREFORE, in consideration of the mutual
agreements herein contained and other good and valuable
consideration, the sufficiency and receipt of which are
hereby acknowledged, the Parties agree as follows:
Section 1. Amendments:
(a) Section 1.01 of the Agreement is amended to
insert the following definition after the definition of
"Price Index" and prior to the definition of "Private Label
Packaged Motor Oil Business":
"'Price Reduction' shall have the meaning set
forth in Section 2.02(b) of the Put/Call, Registration
Rights and Standstill Agreement."
(b) Section 2.02(a) of the Agreement is amended
to read in its entirety as follows:
"(a) Amount. The Special Termination Price shall
be an amount equal to (i) the product of (x) 100% of
the Appraised Value of the Company multiplied by
(y) the Terminating Member's Percentage Interest, less
(ii) if the Terminating Member is Ashland, the Price
Reduction."
(c) Sections 2.02(b) and 2.02(c) as numbered in
the Agreement are numbered Sections 2.02(c) and 2.02(d)
respectively and a new Section 2.02(b) of the Agreement is
added to read in its entirety as follows:
"(b) Price Reduction. Price Reduction means an
amount equal to the excess of (i) $14,139,519, which is
the agreed present value at January 1, 1998, of the tax
cost to Ashland ("Present Value Tax Cost") of
allocating to it depreciation deductions as shown in
Chart A in Schedule 2.02(b)(1) ("Chart A
Depreciation"), as compared to allocating to Ashland
depreciation deductions as shown in Chart B in
Schedule 2.02(b)(1) ("Chart B Depreciation"), over
(ii) the present value at January 1, 1998, of the tax
cost to Ashland of allocating to it Chart A
Depreciation as compared to Chart B Depreciation,
taking into account Ashland's decreased taxable gain or
increased taxable loss on the sale of all of its
Membership Interest in the Company when Chart A
Depreciation as compared to Chart B Depreciation is
allocated to it ("Present Value Tax Cost on Sale").
"Chart A Depreciation represents the agreed
depreciation deductions with respect to property
contributed by Ashland on the Closing of the Asset
Transfer and Contribution Agreement allocated to it
through the depreciable life of such property as set
forth in Section 6.03 of the LLC Agreement as amended
and restated as of December 31, 1998. Chart B
Depreciation represents the agreed depreciation
deductions with respect to property contributed by
Ashland on the Closing of the Asset Transfer and
Contribution Agreement allocated to it through the
depreciable life of such property as set forth in
Sections 6.03, 6.12 and 4.01(c) of such agreement as in
effect prior to such restatement as if it were in
effect through such depreciable life, but treating the
assets comprising the Merrill Lynch Master Lease
Program as Subleased Property listed on Schedule
4.01(c) for purposes of Sections 4.01(c) and 6.12.
Chart A Depreciation and Chart B Depreciation shall not
be revised to reflect the actual amount of depreciation
deductions with respect to property contributed by
Ashland on the Closing of the Asset Transfer and
Contribution Agreement allocated to Ashland, or to take
into account the sale or other disposition by the
Company of any of the property contributed by Ashland
on the Closing of the Asset Transfer and Contribution
Agreement.
"Solely for purposes of determining the Present
Value Tax Cost and the Present Value Tax Cost on Sale,
the following factors and assumptions have been and
will be used: (i) discount rate of 9% per annum,
(ii) combined Federal/State income tax rate of 39%,
(iii) the cash flow impact of a reduction in Ashland's
income taxes for a year as the result of Chart A or
Chart B Depreciation is realized on the last day of
that year and (iv) the cash flow impact of Ashland's
income tax expense or benefit arising from a sale of
all of its membership interest in the Company is
incurred or realized on the last day of the year of
sale.
"Schedule 2.02(b)(2) reflects, for purposes of
illustration, the Present Value Tax Cost on Sale if
Ashland sells all of its 38% membership interest in the
Company on January 1, 2005. The Present Value Tax Cost
on Sale with respect to Ashland's sale of all of its
interest in the Company at a date different than
January 1, 2005, shall be computed in the same manner
as the Present Value Tax Cost on Sale illustrated in
Schedule 2.02(b)(2).
"Consistent with the foregoing principle, if
Ashland sells all or part of its Membership Interest to
Marathon in a transaction not otherwise described in
this Agreement, the price paid by or on behalf of
Marathon for such interest shall be appropriately
reduced."
(d) Attached new Schedules 2.02(b)(1) and
2.02(b)(2) are inserted between Schedule 1.03(d) and
Schedule 14.01(a).
(e) Section 3.02(a) of the Agreement is amended
to read in its entirety as follows:
"(a) Amount. The Marathon Call Price shall be an
amount equal to (i) the product of (x) 115% of the
Appraised Value of the Company multiplied by
(y) Ashland's Percentage Interest, less (ii) the Price
Reduction."
(f) Section 4.02(a) of the Agreement is amended
to read in its entirety as follows:
"(a) Amount. The Ashland Put Price shall be an
amount equal to the sum of (i) for that portion of the
Ashland Put Price to be paid to Ashland in Cash or in
Marathon Debt Securities, an amount equal to the
product of (1) the excess of (x) the product of (A) 85%
of the Appraised Value of the Company multiplied by
(B) Ashland's Percentage Interest over (y) the Price
Reduction, multiplied by (2) the percentage of the
Ashland Put Price to be paid to Ashland in Cash and/or
in Marathon Debt Securities, plus (ii) for that portion
of the Ashland Put Price to be paid to Ashland in
Marathon Equity Securities the same as above but
substituting 90% for 85% in Clause (A) and substituting
Marathon Equity Securities for Cash and/or Marathon
Debt Securities in clause (2)."
Section 2. Parties in Interest. This Amendment
shall inure to the benefit of, and be binding upon, the
Parties hereto and their respective successors, legal
representatives and permitted assigns.
Section 3. Counterparts. This Amendment may be
executed in counterparts, each of which shall be deemed an
original, but all of which together shall constitute one and
the same instrument.
Section 4. Governing Law. THIS AMENDMENT SHALL
BE GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH THE LAWS OF
THE STATE OF DELAWARE, WITHOUT GIVING EFFECT TO THE
PRINCIPLES OF CONFLICTS OF LAW THEREOF. ANY RIGHT TO TRIAL
BY JURY WITH RESPECT TO ANY CLAIM OR PROCEEDING RELATED TO
OR ARISING OUT OF THIS AMENDMENT, OR ANY TRANSACTION OR
CONDUCT IN CONNECTION HEREWITH, IS WAIVED.
IN WITNESS WHEREOF, the parties hereto have caused
this Amendment to be duly executed as of the day and year
first above written.
MARATHON OIL COMPANY ASHLAND INC.
By:/s/ V. G. Beghini By:/s/Paul W. Chellgren
Name:V. G. Beghini Name:Paul W. Chellgren
Title: President Title: Chairman of the Board and
Chief Executive Officer
USX CORPORATION MARATHON ASHLAND PETROLEUM,
LLC
By:/s/ Thomas J. Usher By: /s/ J. L. Frank
Name:Thomas J. Usher Name:J. L. Frank
Title:Chairman of the Board Title:President
and Chief Executive
Officer
Put/Call, Registration Rights and Standstill Agreement
Schedule 2.02(b)(1)
Chart A and Chart B Depreciation
Chart A
Calendar Depreciation Combined Present Value
Year Allocated Fed. & State Tax Effect
to Ashland Inc. Tax @ 39% @ 9%
1998 $ 116,601,400 $ 45,474,546 $ 41,719,767
1999 209,882,520 81,854,183 68,895,028
2000 167,906,016 65,483,346 50,565,158
2001 134,324,816 52,386,678 37,112,044
2002 107,506,491 41,927,531 27,250,019
2003 85,935,232 33,514,740 19,983,745
2004 76,373,917 29,785,828 16,293,868
2005 76,373,917 29,785,828 14,948,502
2006 76,373,917 29,785,828 13,714,222
2007 76,373,917 29,785,828 12,581,855
2008 38,361,861 14,961,126 5,797,928
Totals $1,166,014,004 $ 454,745,462 $ 308,862,136
Chart B
Calendar Depreciation Combined Present Value
Year Allocated Fed. & State Tax Effect
to Ashland Inc. Tax @ 39% @ 9%
1998 $ 134,434,575 $ 52,429,484 $ 48,100,444
1999 213,507,942 83,268,097 70,085,092
2000 171,643,459 66,940,949 51,690,695
2001 138,302,064 53,937,805 38,210,901
2002 111,275,746 43,397,541 28,205,424
2003 89,884,379 35,054,908 20,902,096
2004 77,757,082 30,325,262 16,588,957
2005 77,057,057 30,052,252 15,082,212
2006 77,057,057 30,052,252 13,836,892
2007 77,057,057 30,052,252 12,694,396
2008 50,315,315 19,622,973 7,604,547
Totals $1,218,291,733 $ 475,133,776 $ 323,001,655
Present Value tax cost $ 14,139,519
Put/Call, Registration Rights and Standstill Agreement
Schedule 2.02(b)(2)
Present Value Tax Cost on Sale
Illustration
Sale of 100% Interest 1/1/2005
Calendar Decr. Gain/
Year Depreciation Allocated Incr. Loss
to Ashland
Chart A Chart B Difference Chart A vs. B
1998 $116,601,400 $134,434,575 $17,833,175
1999 209,882,520 213,507,942 3,625,422
2000 167,906,016 171,643,459 3,737,443
2001 134,324,816 138,302,064 3,977,248
2002 107,506,491 111,275,746 3,769,255
2003 85,935,232 89,884,379 3,949,147
2004 76,373,917 77,757,082 1,383,165
2005 - - - (38,274,855)(1)
2006 - - -
2007 - - -
2008 - - -
Totals $ 898,530,392 $936,805,247 $38,274,855 $(38,274,855)
Increase
(Decrease) Combined
Taxable Federal/State Present
Calendar Income Income Tax Value
Year Chart A @ 39% Tax Cost on
vs. B Sale
1998 $17,833,175 $6,954,938 $6,380,677
1999 3,625,422 1,413,915 1,190,064
2000 3,737,443 1,457,603 1,125,537
2001 3,977,248 1,551,127 1,098,857
2002 3,769,255 1,470,009 955,405
2003 3,949,147 1,540,167 918,351
2004 1,383,165 539,434 295,089
2005 (38,274,855) (14,927,193) (7,491,455)
2006 - - -
2007 - - -
2008 - - -
Totals $ - $ - $4,472,526
Present Value Tax Cost (Schedule
2.02 (b)(1)) $14,139,519
Price Reduction $ 9,666,993
<FN>
(1) 100% of cumulative difference between Chart A and Chart B depreciation
through 2004.