UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C.  20549

 

 
FORM 8-K
 
CURRENT REPORT
Pursuant To Section 13 or 15(d) of
the Securities Exchange Act of 1934
 
Date of report (date of earliest event reported):   August 30, 2013
 
MURPHY OIL CORPORATION
(Exact Name of Registrant
as Specified in Charter)
     
Delaware
1-8590
71-0361522
(State or Other Jurisdiction of Incorporation)
(Commission File Number)
(IRS Employer Identification No.)
 
200 Peach Street, El Dorado, AR
 
71731-7000
(Address of Principal Executive Offices)
 
(Zip Code)
 
     
Registrant’s telephone number, including area code:   (870) 862-6411
 
 
(Former Name or Former Address, if Changed Since Last Report)
 
Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions (see General Instruction A.2. below):
 
 
o
Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)
 
 
o
Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)
 
 
o
Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))
 
 
o
Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

 
 
 
 
 
Item 1.01 Entry into a Material Definitive Agreement.
 
On August 30, 2013, Murphy Oil Corporation (“Murphy Oil”) completed the previously announced spin-off of its U.S. retail marketing business through the distribution to its stockholders of record of all the shares of common stock of Murphy USA Inc. (“Murphy USA”). In the distribution, Murphy Oil distributed to its stockholders one share of Murphy USA common stock for every four shares of Murphy Oil common stock outstanding as of 5:00 p.m. New York City time on August 21, 2013, the record date for the distribution.
 
In connection with the spin-off, Murphy Oil entered into several definitive agreements with Murphy USA that, among other things, effect the spin-off and provide a framework for its relationship with Murphy USA after the spin-off, including the following agreements:
 
•    Separation and Distribution Agreement;
•    Tax Matters Agreement;
•    Transition Services Agreement;
•    Employee Matters Agreement; and
•    Trademark License Agreement.
 
Separation and Distribution Agreement . The Separation and Distribution Agreement governs the terms of the spin-off of the U.S. retail marketing business from Murphy Oil’s other businesses. Generally, the Separation and Distribution Agreement includes Murphy Oil’s and Murphy USA’s agreements relating to the restructuring steps to be taken to complete the spin-off, including the assets and rights to be transferred, liabilities to be assumed and related matters. Subject to the receipt of required governmental and other consents and approvals, in order to accomplish the spin-off, the Separation and Distribution Agreement provides for Murphy Oil and Murphy USA to transfer specified assets between the companies that will operate the U.S. retail marketing business after the distribution, on the one hand, and Murphy Oil’s remaining businesses, on the other hand. The Separation and Distribution Agreement requires Murphy Oil and Murphy USA to use reasonable efforts to obtain consents, approvals and amendments required to novate or assign the assets and liabilities that are required to be transferred pursuant to the Separation and Distribution Agreement.
 
Unless otherwise provided in the Separation and Distribution Agreement or any of the related ancillary agreements, all assets were transferred on an “as is, where is” basis. Generally, during the period in which any transfer, assignment or assumption is delayed as a result of the absence of a required consent, each of Murphy Oil and Murphy USA agree to cooperate in a mutually agreeable arrangement under which the intended transferee would, to the maximum extent possible, obtain the benefits and assume the obligations of the relevant asset, claim, right, benefit and/or liability as if the relevant transfer, assignment or assumption had taken place (including by sub-contract, sub-license or sub-lease to such transferee) or under which the transferor would, with respect to an agreement, enforce for the benefit of the transferee and at the cost of the transferee, with the transferee assuming the transferor’s obligations, the rights of the transferor against any third party thereunder.
 
The Separation and Distribution Agreement specifies those conditions that were required to be satisfied or waived by Murphy Oil prior to the distribution. In addition, Murphy Oil had the right to determine the date and terms of the distribution, and had the right, at any time until completion of the distribution, to determine to abandon or modify the distribution and to terminate the Separation and Distribution Agreement.
 
In addition, the Separation and Distribution Agreement governs the treatment of indemnification, insurance and litigation responsibility and management. Generally, the Separation and Distribution Agreement provides for uncapped cross-indemnities principally designed to place financial responsibility for the obligations and liabilities of Murphy USA’s business with Murphy USA and financial responsibility for the obligations and liabilities of Murphy Oil’s business and liabilities arising out of refineries and related facilities previously owned by Murphy Oil with Murphy Oil. The Separation and Distribution Agreement also established procedures for handling claims subject to indemnification and related matters.
 
Tax Matters Agreement . The Tax Matters Agreement governs Murphy Oil’s and Murphy USA’s respective rights, responsibilities and obligations with respect to taxes (including taxes arising in the ordinary course of business and taxes, if any, incurred as a result of any failure of the distribution and certain related transactions to qualify as tax-free for federal income tax purposes), tax attributes, tax returns, tax contests and certain other tax matters.
 
In general, under the Tax Matters Agreement, responsibility for taxes for periods prior to the distribution is allocated in the following manner:
 
 
 
 
 
 
•
with respect to any U.S. federal income taxes of the affiliated group of which Murphy Oil is the common parent, Murphy USA generally will be responsible for such taxes to the extent attributable to the U.S. marketing business and all Murphy Oil USA, Inc. federal income tax filings and Murphy Oil generally will be responsible for all other such taxes;
 
 
•
with respect to U.S. state or local income taxes, Murphy USA generally will be responsible for such taxes to the extent attributable to the U.S. marketing business and all Murphy Oil USA, Inc. income and franchise tax filings and Murphy Oil generally will be responsible for all other such taxes;
 
 
•
with respect to any U.S. state or local property taxes, Murphy USA generally will be responsible for such taxes to the extent attributable to property owned by Murphy USA or one of Murphy USA’s subsidiaries and prospectively, for any assets contributed, and Murphy Oil generally will be responsible for all other such taxes; and
 
 
•
with respect to certain non-income taxes, such as motor fuel, excise, sales and use taxes, Murphy USA generally will be responsible for such taxes to the extent attributable to the U.S. marketing business and all Murphy Oil USA, Inc. non-income tax filings, and Murphy Oil generally will be responsible for all other such taxes.
 
In addition, the Tax Matters Agreement imposes certain restrictions on Murphy USA and Murphy USA’s subsidiaries (including restrictions on share issuances, business combinations, sales of assets and similar transactions) that are designed to preserve the tax-free status of the distribution and certain related transactions. The Tax Matters Agreement provides special rules allocating tax liabilities in the event the distribution, together with certain related transactions, is not tax-free. In general, under the Tax Matters Agreement, Murphy USA will be responsible for any taxes imposed on Murphy Oil that arise from the failure of the distribution and certain related transactions to qualify as a tax-free transaction for federal income tax purposes within the meaning of Sections 355 and 368(a)(1)(D) and certain other relevant provisions of the   Internal Revenue Code of 1986, as amended (the “Code”), to the extent that the failure to qualify is attributable to actions, events, or transactions relating to Murphy USA’s stock, assets or business, or a breach of the relevant representations or covenants made by Murphy USA in the Tax Matters Agreement.
 
The Tax Matters Agreement also sets forth Murphy Oil’s and Murphy USA’s obligations as to the filing of tax returns, the administration of tax contests and assistance and cooperation on tax matters.
 
Transition Services Agreement . The Transition Services Agreement sets forth the terms on which Murphy Oil will provide to Murphy USA, and Murphy USA will provide to Murphy Oil, on a temporary basis, certain services or functions that the companies historically have shared. Transition services will include various corporate services. The agreement provides for the provision of specified transition services, generally for a period of up to 18 months, with a possible extension of 6 months (an aggregate of 24 months). Compensation for transition services will be determined using an internal cost allocation methodology based on fully loaded cost (e.g., including an allocation of corporate overhead), or, in certain cases, may be based on terms and conditions comparable to those that would have been arrived at by parties bargaining at arm’s-length.
 
Employee Matters Agreement . The Employee Matters Agreement governs Murphy Oil’s and Murphy USA’s compensation and employee benefit obligations with respect to the current and former employees and non-employee directors of each company, and generally allocates liabilities and responsibilities relating to employee compensation and benefit plans and programs. The Employee Matters Agreement provides for the treatment of outstanding Murphy Oil equity awards and certain other outstanding annual and long-term incentive awards. The Employee Matters Agreement provides that, following the distribution, Murphy USA’s active employees generally no longer participate in benefit plans sponsored or maintained by Murphy Oil and commence participation in Murphy USA’s benefit plans. The Employee Matters Agreement also sets forth the general principles relating to employee matters, including with respect to the assignment of employees, the assumption and retention of liabilities and related assets, expense reimbursements, workers’ compensation, leaves of absence, the provision of comparable benefits, employee service credit, the sharing of employee information, and the duplication or acceleration of benefits.
 
The Employee Matters Agreement also provides that (i) the distribution did not constitute a change in control under Murphy Oil’s plans, programs, agreements or arrangements and (ii) the distribution and the assignment, transfer or continuation of the employment of employees with another entity did not constitute a severance event under the applicable plans, programs, agreements or arrangements.
 
Trademark License Agreement . The Trademark License Agreement governs the allocation of trademark rights between Murphy USA and Murphy Oil. In connection with the spin-off, Murphy Oil USA, Inc. assigned all of its rights in all trademarks incorporating the term “Murphy” to Murphy Oil. Pursuant to the Trademark License Agreement, Murphy Oil licensed to Murphy USA certain trademarks incorporating such term for use in Murphy USA’s business on a royalty-free basis.
 
 
 
 
 
The foregoing descriptions of these agreements are summaries of the material terms of these agreements; for the complete text of these agreements, please see the agreements filed with this Current Report on Form 8-K as Exhibits 2.1, 10.1, 10.2, 10.3 and 10.4, each of which is incorporated herein by reference.
 
Item 2.01 Completion of Acquisition or Disposition of Assets.
 
On August 30, 2013, in connection with the spin-off, Murphy Oil Corporation contributed 100% of the capital stock of Murphy Oil USA, Inc. to Murphy USA Inc. Murphy Oil USA, Inc. is the primary operating subsidiary of Murphy Oil’s U.S. retail marketing business that was separated from Murphy Oil in connection with the spin-off. In consideration for the contribution, Murphy USA Inc. issued 46,743,216 shares of its common stock which, together with the 100 shares previously held by Murphy Oil, were distributed to Murphy Oil shareholders of record in the distribution. The description of the spin-off included under Item 1.01 and the Separation and Distribution Agreement attached as Exhibit 2.1 to this Current Report on Form 8-K are incorporated in this Item 2.01 by reference.
 
Item 8.01 Other Events.
 
On August 30, 2013, Murphy Oil issued a press release announcing the completion of the spin-off. The full text of the press release is filed as Exhibit 99.1 to this Current Report on Form 8-K and is incorporated by reference into this Item 8.01.
 
Item 9.01 Financial Statements and Exhibits.
 
(b)           Pro Forma Financial Information
 
The unaudited pro forma condensed consolidated balance sheet of Murphy Oil dated as of June 30, 2013 and the unaudited pro forma condensed consolidated statements of income of Murphy Oil for the six months ended June 30, 2013 and for the year ended December 31, 2012 are filed as Exhibit 99.2 to this Current Report on Form 8-K.
 
(d)           Exhibits
 
Exhibit No.
 
Description
2.1
 
Separation and Distribution Agreement, dated August 30, 2013, between Murphy Oil Corporation and Murphy USA Inc.
10.1
 
Tax Matters Agreement, dated August 30, 2013, between Murphy Oil Corporation and Murphy USA Inc.
10.2
 
Transition Services Agreement, dated August 30, 2013, between Murphy Oil Corporation and Murphy USA Inc.
10.3
 
Employee Matters Agreement, dated August 30, 2013, between Murphy Oil Corporation and Murphy USA Inc.
10.4
 
Trademark License Agreement, dated August 30, 2013, between Murphy Oil Corporation and Murphy USA Inc.
99.1
 
Press release issued by Murphy Oil Corporation, dated August 30, 2013, announcing the completion of the spin-off of Murphy USA Inc. from Murphy Oil Corporation.
99.2
 
Unaudited pro forma condensed consolidated balance sheet of Murphy Oil Corporation dated as of June 30, 2013 and the unaudited pro forma condensed consolidated statements of income of Murphy Oil for the six months ended June 30, 2013 and for the year ended December 31, 2012.
 
 
 
 
 
SIGNATURES
 
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.
 
 
   
MURPHY OIL CORPORATION
 
 
Date: 
September 5, 2013
 
By: 
/s/ John W. Eckart
       
Name: 
John W. Eckart
       
Title:
Senior Vice President and Controller
 
 
 
 

EXHIBIT INDEX

Exhibit Number
 
Description
2.1
 
Separation and Distribution Agreement, dated August 30, 2013, between Murphy Oil Corporation and Murphy USA Inc.
10.1
 
Tax Matters Agreement, dated August 30, 2013, between Murphy Oil Corporation and Murphy USA Inc.
10.2
 
Transition Services Agreement, dated August 30, 2013, between Murphy Oil Corporation and Murphy USA Inc.
10.3
 
Employee Matters Agreement, dated August 30, 2013, between Murphy Oil Corporation and Murphy USA Inc.
10.4
 
Trademark License Agreement, dated August 30, 2013, between Murphy Oil Corporation and Murphy USA Inc.
99.1
 
Press release issued by Murphy Oil Corporation, dated August 30, 2013, announcing the completion of the spin-off of Murphy USA Inc. from Murphy Oil Corporation.
99.2
 
Unaudited pro forma condensed consolidated balance sheet of Murphy Oil Corporation dated as of June 30, 2013 and the unaudited pro forma condensed consolidated statements of income of Murphy Oil for the six months ended June 30, 2013 and for the year ended December 31, 2012

 
Exhibit 2.1
 
 

 
 
SEPARATION AND DISTRIBUTION AGREEMENT

 
by and between

MURPHY OIL CORPORATION

and

MURPHY USA INC.

Dated as of August 30, 2013




 
 
 

TABLE OF CONTENTS
__________________
 
Page
ARTICLE 1
Definitions
 
Section 1.01 .  Definitions
2
Section 1.02 .  Interpretation
11
   
ARTICLE 2
Prior to the Distribution
 
Section 2.01.   Information Statement; Listing
13
Section 2.02.   Restructuring
13
Section 2.03.   Transfers of Certain Other Assets and Liabilities
13
Section 2.04 .  Transfers of Certain Assets to Third Parties
14
Section 2.05 .  Agreement Relating To Consents Necessary To Transfer Assets and Liabilities
14
Section 2.06.   Intercompany Accounts
15
Section 2.07 .  Intercompany Agreements
15
Section 2.08 .  Bank Accounts; Cash Balances
16
Section 2.09.   Novation of Liabilities
17
Section 2.10 .  Further Assurances and Consents
19
   
ARTICLE 3
Distribution
 
Section 3.01.   Conditions Precedent to Distribution
19
Section 3.02.   The Distribution
20
Section 3.03.   Fractional Shares
21
Section 3.04.   NO REPRESENTATIONS OR WARRANTIES
21
   
ARTICLE 4
Insurance Matters
 
Section 4.01 .  Insurance Prior to the Distribution Time
22
Section 4.02 .  Ownership of Existing Policies and Programs
22
Section 4.03 .  Acquisition and Maintenance of Post-Distribution Insurance by Murphy USA
23
Section 4.04.   Rights Under Shared Policies
23
Section 4.05 .  Administration and Reserves
25
Section 4.06 .  Insurance Premiums
25
Section 4.07 .  Agreement for Waiver of Conflict and Shared Defense
26
Section 4.08 .  Duty to Mitigate
26
Section 4.09 .  Non-Waiver of Rights to Coverage
26
 
 
i 
 
 

 
ARTICLE 5
Access to Information
 
Section 5.01.   Access to Information
26
Section 5.02.   Litigation Cooperation
27
Section 5.03.   Reimbursement
28
Section 5.04.   Ownership of Information
29
Section 5.05.   Retention of Records
29
Section 5.06.   Confidentiality
29
Section 5.07 .  Privileged Information
30
   
ARTICLE 6
Release; Indemnification
 
Section 6.01 .  Release of Pre-Distribution Claims.
31
Section 6.02 .  Murphy USA Indemnification of the Murphy Oil Group
33
Section 6.03 .  Murphy Oil Indemnification of Murphy USA Group
33
Section 6.04.   Procedures
34
Section 6.05 .  Calculation of Indemnification Amount
35
Section 6.06.   Contribution
36
Section 6.07.   Non-Exclusivity of Remedies
36
Section 6.08.   Survival of Indemnities
36
   
ARTICLE 7
Miscellaneous
 
Section 7.01 .  Notices
36
Section 7.02.   Amendments; No Waivers
37
Section 7.03.   Expenses
38
Section 7.04.   Successors and Assigns
38
Section 7.05.   Governing Law
38
Section 7.06.   Counterparts; Effectiveness; Third-Party Beneficiaries
38
Section 7.07.   Entire Agreement
38
Section 7.08.   Tax Matters
39
Section 7.09.   Jurisdiction
39
Section 7.10 .  WAIVER OF JURY TRIAL
39
Section 7.11.   Termination
39
Section 7.12.   Severability
40
Section 7.13.   Survival
40
Section 7.14.   Captions
40
Section 7.15 .  Interpretation
40
Section 7.16.   Specific Performance
40
Section 7.17.   Performance
41



ii 
 
 

SCHEDULES
 
   
Schedule 1
Restructuring Plan
Schedule 2.07(b)
Intercompany Agreements
   
EXHIBITS
 
   
Exhibit A
Employee Matters Agreement
Exhibit B
Tax Matters Agreement
Exhibit C
Transition Services Agreement
Exhibit D
Trademark Assignment Agreement
Exhibit E
Trademark License Agreement
Exhibit F
Peach Street Lease Agreement
Exhibit G
Aircraft Maintenance Labor Pooling Agreement
Exhibit H
Airplane Interchange Agreement
Exhibit I
Hangar Rental Agreement
 
 
iii 
 
 

 
SEPARATION AND DISTRIBUTION AGREEMENT
 
SEPARATION AND DISTRIBUTION AGREEMENT dated as of August 30, 2013 (the “ Agreement ”) between Murphy Oil Corporation, a Delaware corporation (“ Murphy Oil ”), and Murphy USA Inc., a Delaware corporation (“ Murphy USA ”).
 
W I T N E S S E T H :
 
WHEREAS, Murphy USA is a wholly owned subsidiary of Murphy Oil;
 
WHEREAS, the Board of Directors of Murphy Oil has determined that it is in the best interests of Murphy Oil and the stockholders of Murphy Oil to distribute   to the holders of the issued and outstanding shares of common stock, par value $1.00 per share, of Murphy Oil (the “ Murphy Oil Common Stock ”) as of the Record Date (as defined below), by means of a pro rata dividend, 100% of the issued and outstanding shares of common stock, par value $0.01 per share, of Murphy USA (the “ Murphy USA Common Stock ”), on the basis of one share of Murphy USA Common Stock for every four then issued and outstanding shares of Murphy Oil Common Stock (the “ Distribution ”);
 
WHEREAS, Murphy Oil and Murphy USA have prepared, and Murphy USA has filed with the Commission (as defined below), the Form 10 (as defined below), which includes the Information Statement (as defined below), and which sets forth appropriate disclosure concerning Murphy USA and the Distribution, and the Form 10 has become effective under the Exchange Act (as defined below);
 
WHEREAS, the Distribution will be preceded by, among other things, the Restructuring (as defined below), in which, among other things, all of the stock of MOUSA will be contributed to Murphy USA;
 
WHEREAS, for United States federal and state income tax purposes, the Distribution is intended to qualify as a tax-free transaction under Sections 355 and 368 of the Internal Revenue Code of 1986, as amended (the “ Code ”), and the corresponding provisions of state law, and Murphy Oil has obtained certain tax rulings to such effect; and
 
WHEREAS, the parties hereto have determined to set forth the principal actions required to effect the Distribution and to set forth certain agreements that will govern the relationship between the parties following the Distribution.
 
NOW, THEREFORE, in consideration of the mutual covenants contained in this Agreement, the parties hereby agree as follows:
 
 
 
1
 
ARTICLE 1
Definitions
 
Section 1.01 .  Definitions.   The following terms, as used herein, have the following meanings:
 
“ Action ” means any demand, claim, suit, action, arbitration, inquiry, investigation or other proceeding by or before any Governmental Authority or any arbitration or mediation tribunal.
 
“ Affiliate ” means, with respect to any Person, any other Person directly or indirectly controlling, controlled by, or under common control with, such other Person.  For the purposes of this definition, “ control ” means the possession, directly or indirectly, of the power to direct or cause the direction of the management and policies of a Person, whether through the ownership of voting securities, by contract or otherwise, and the terms “ controlling ” and “ controlled ” have meanings correlative to the foregoing.  Notwithstanding any provision of this Agreement to the contrary (except where the relevant provision states explicitly to the contrary), no member of the Murphy Oil Group, on the one hand, and no member of the Murphy USA Group, on the other hand, shall be deemed to be an Affiliate of the other.
 
“ Agreement ” has the meaning set forth in the preamble.
 
“ Aircraft Maintenance Labor Pooling Agreement ” means the Aircraft   Maintenance Labor Pooling Agreement between Murphy Oil and MOUSA, dated as of the date hereof, substantially in the form of Exhibit G , as such agreement may be amended from time to time in accordance with its terms.
 
“ Airplane Interchange Agreement ” means the Airplane Interchange Agreement between Murphy Oil and MOUSA, dated as of the date hereof, substantially in the form of Exhibit H , as such agreement may be amended from time to time in accordance with its terms.
 
“ Ancillary Agreement ” means each of the Tax Matters Agreement, the Transition Services Agreement, the Employee Matters Agreement, the Trademark Assignment Agreement, the Trademark License Agreement, the Peach Street Lease Agreement, the Aircraft Maintenance Labor Pooling Agreement, the Airplane Interchange Agreement and the Hangar Rental Agreement.
 
“ Applicable Law ” means, with respect to any Person, any federal, state, local or foreign law (statutory, common or otherwise), constitution, treaty, convention, ordinance, code, rule, regulation, order, injunction, judgment, decree, ruling, directive, guidance, instruction, direction, permission, waiver, notice, condition, limitation, restriction or prohibition or other similar requirement enacted, adopted, promulgated, imposed, issued or applied by a Governmental Authority that is binding upon or applicable to such Person, its properties or assets or its business or operations, as amended unless expressly specified otherwise.
 
 
2
 
“ Business ” means, with respect to the Murphy Oil Group, the Murphy Oil Business and, with respect to the Murphy USA Group, the Murphy USA Business.
 
“ Business Day ” means a day, other than Saturday, Sunday or other day on which commercial banks in New York, New York are authorized or required by Applicable Law to close.
 
“ Calumet ” means Calumet Specialty Products Partners, L.P. (together with any of its Affiliates to which it assigns any of its rights).
 
“ Calumet Asset Purchase Agreement ” means that certain Asset Purchase Agreement, dated as of July 25, 2011, as amended from time to time, between Calumet and Murphy Oil.
 
“ Claim ” has the meaning set forth in Section 6.04(a).
 
“ Claims Administration ” means the processing of claims made under Murphy Oil Policies, including the reporting of claims to the insurance carrier, management and defense of claims, and providing for appropriate releases upon settlement of claims.
 
“ Claims Made Policies ” has the meaning set forth in Section 4.04(a).
 
“ Code ” has the meaning set forth in the recitals to this Agreement.
 
“ Commission ” means the United States Securities and Exchange Commission.
 
“ Confidential Information ” means, with respect to a Group, (i) any proprietary information that is competitively sensitive, material or otherwise of value to the members of such Group and not generally known to the public, including product planning information, marketing strategies, financial information, information regarding operations, consumer and/or customer relationships, consumer and/or customer profiles, sales estimates, business plans and internal performance results relating to the past, present or future business activities of the members of such Group and the consumers, customers, clients and suppliers of the members of such Group; (ii) any proprietary scientific or technical information, design, invention, process, procedure, formula, or improvement that is commercially valuable and secret in the sense that its confidentiality affords any member of such Group a competitive advantage over its competitors; and (iii) all confidential or proprietary concepts, documentation, reports, data, specifications, computer software, source code, object code, flow charts, databases, inventions, information, and trade secrets; in each case, related primarily to such Group’s Business.
 
“ Credit Facility ” means that certain senior secured credit agreement dated as of August 30, 2013, as amended from time to time, consisting of an
 
 
3
 
asset-based revolving facility and a term loan facility, by and among, Murphy USA, as holdings, MOUSA, as borrower, the borrowing subsidiaries from time to time party thereto, JPMorgan Chase Bank, N.A., as administrative agent and the other agents and lenders from time to time party thereto.

“ Disposing Party ” has the meaning set forth in Section 5.05.
 
“ Distribution ” has the meaning set forth in the recitals to this Agreement.
 
“ Distribution Agent ” means Computershare Investor Services, LLC.
 
“ Distribution Date ” means August 30, 2013, the date on which the Distribution shall be effected.
 
“ Distribution Documents ” means this Agreement and the Ancillary Agreements.
 
“ Distribution Time ” means the time at which the Distribution is effective on the Distribution Date, which shall be deemed to be 11:59 p.m., Eastern Daylight Time, on the Distribution Date.
 
“ Employee Matters Agreement ” means the Employee Matters Agreement between Murphy Oil and Murphy USA, dated as of the date hereof, substantially in the form of Exhibit A , as such agreement may be amended from time to time in accordance with its terms.
 
“ Environmental Law ” means any Applicable Law relating to pollution, protection or restoration of or prevention of harm to the environment or natural resources, or the effect on the environment of the use, handling, transportation, treatment, storage, disposal, release or discharge of, or any human exposure to, any toxic or hazardous materials.
 
“ Environmental Liabilities ” means all Liabilities relating to, arising out of or resulting from the effect on the environment of the use, handling, transportation, treatment, storage, disposal, release or discharge of, or any human exposure to, any toxic or hazardous materials, Environmental Law or contract or agreement relating to any such matters (including related removal, remediation or cleanup costs, investigatory costs, response costs, natural resources damages, property damages, personal injury damages, costs of compliance and indemnity, contribution or similar obligations) and all costs and expenses, interest, fines, penalties or other monetary sanctions in connection therewith.
 
“ Exchange Act ” means the Securities Exchange Act of 1934, as amended, and the rules and regulations promulgated thereunder.
 
“ FIFO Basis ” means, with respect to the payment of Unrelated Claims pursuant to the same Shared Policy, the payment in full of each successful claim (regardless of whether a Murphy Oil Insured Party or a Murphy USA Insured
 
 
4
 
Party is the claimant) in the order in which such successful claim is approved by the insurance carrier, until the limit of the applicable Shared Policy is met.
“ Form 10 ” means the registration statement on Form 10 filed by Murphy USA with the Commission to effect the registration of Murphy USA Common Stock pursuant to the Exchange Act in connection with the Distribution, as such registration statement may be amended or supplemented from time to time.
 
“ Former Business ” means any corporation, partnership, entity, division, business unit, business or set of business operations that has been sold, conveyed, assigned, transferred or otherwise disposed of or divested (other than solely in connection with the Restructuring), in whole or in part, or the operations, activities or production of which has been discontinued, abandoned, completed or otherwise terminated, in whole or in part, in each case, by either Group prior to the Distribution Time.
 
“ Former Refineries Business ” has the meaning set forth in the definition of “Murphy Oil Former Business.”
 
“ Governmental Authority ” means any multinational, foreign, federal, state, local or other governmental, statutory or administrative authority, regulatory body or commission or any court, tribunal or judicial or arbitral authority which has any jurisdiction or control over either party (or any of their Affiliates).
 
“ Group ” means, as the context requires, the Murphy USA Group or the Murphy Oil Group.
 
“ Hangar Rental Agreement ” means the Hangar Rental Agreement between Murphy Oil and MOUSA, dated as of the date hereof, substantially in the form of Exhibit I , as such agreement may be amended from time to time in accordance with its terms.
 
“ Indemnified Party ” has the meaning set forth in Section 6.04(a).
 
“ Indemnifying Party ” has the meaning set forth in Section 6.04(a).
 
“ Indemnitees ” means, as the context requires, the Murphy Oil Indemnitees or the Murphy USA Indemnitees.
 
“ Information Statement ” means the Information Statement to be sent to each holder of Murphy Oil Common Stock in connection with the Distribution.
 
“ Insured Party ” means a Murphy Oil Insured Party or a Murphy USA Insured Party.
 
“ Intercompany Accounts ” has the meaning set forth in Section 2.06.
 
“ IRS ” means the Internal Revenue Service.
 
 
5
 

“ Liabilities ” means any and all claims, debts, liabilities, losses and obligations, absolute or contingent, matured or not matured, liquidated or unliquidated, accrued or unaccrued, known or unknown, whenever arising, including all costs and expenses relating thereto, and including, without limitation, those debts, liabilities and obligations arising under this Agreement, any Applicable Law, any Action or threatened Action, any order or consent decree of any Governmental Authority or any award of any arbitrator of any kind, and those arising under any agreement, commitment or undertaking.
 
“ Losses ” means, with respect to any Person, any and all damages, losses, liabilities and expenses incurred or suffered by such Person (including, without limitation, reasonable expenses of investigation and reasonable attorneys’, accountants’, consultants’ and other professionals’ fees and expenses in connection with any and all Actions or threatened Actions and reasonable expenses in connection with the enforcement of the rights hereunder).
 
“ MOUSA ” means Murphy Oil USA, Inc.
 
“ Murphy Oil ” has the meaning set forth in the preamble.
 
“ Murphy Oil Accounts ” has the meaning set forth in Section 2.08.
 
“ Murphy Oil Assumed Actions ” has the meaning set forth in Section 5.02(b).
 
“ Murphy Oil Business ”   means (i) the business conducted by the Murphy Oil Group from time to time, whether before, on or after the Distribution (but excluding the Murphy USA Business and any Murphy USA Former Business) and (ii) the Murphy Oil Former Business.  For the avoidance of doubt, the Murphy USA Contributed Assets, the Specified Calumet/Valero Contracts and any Other Calumet Transferred Operations will not be considered part of the Murphy Oil Business.
 
“ Murphy Oil Common Stock ” has the meaning set forth in the recitals to this Agreement.
 
“ Murphy Oil Former Business ” means (i) the Former Businesses previously owned, in whole or in part, or previously operated, in whole or in part, primarily by any member of the Murphy Oil Group and (ii) all refineries (and related facilities, other assets or operations transferred prior to the Distribution Time in connection with the transfer of any such refineries) owned, in whole or in part, or operated, in whole or in part, prior to the Distribution Time by Murphy Oil or any of its current or former Subsidiaries or other Affiliates (including, for this purpose, members of the Murphy USA Group) (the “ Former Refineries Business ”).  For the avoidance of doubt, ethanol plants are not considered “refineries” for purposes of clause (ii) of this definition.
 
 
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“ Murphy Oil Group ” means Murphy Oil and its Subsidiaries (other than any member of the Murphy USA Group), including all predecessors to such Persons.
 
“ Murphy Oil Indemnitees ” has the meaning set forth in Section 6.02(a).
 
“ Murphy Oil Insured Party ” means any member of the Murphy Oil Group that is named insured, additional named insured or insured under any Shared Policy.
 
“ Murphy Oil Liabilities ” means (i) all Liabilities expressly delegated or allocated to, or assumed by, Murphy Oil or any member of the Murphy Oil Group under this Agreement or any Ancillary Agreement, including (A) all Liabilities arising in connection with the Murphy Oil Assumed Actions and (B) all Liabilities to the extent relating to, or arising from or in connection with, the Milford Haven, Wales refinery and related facilities, including any purchase or sale of any interest therein, including any Liabilities of MOUSA under its guarantee of certain obligations under the Total Agreement; (ii) except as otherwise specifically provided in this Agreement or any Ancillary Agreement, all Liabilities (whether arising before, on or after the Distribution Date and whether based on facts occurring before, on or after the Distribution Date and including Environmental Liabilities) of or to the extent relating to, or arising from or in connection with, (A) the Murphy Oil Business (including any sale or transfer thereof) or (B) except to the extent included as a Murphy USA Liability pursuant to clause (i) or (ii)(A) of the definition thereof, the Murphy Oil Group.  No Liability shall be both a Murphy Oil Liability and a Murphy USA Liability, and in the event of any inconsistency or conflict that may arise in the application or interpretation of this definition or the definition of “Murphy USA Liabilities”, for the purpose of determining what is and is not a Murphy Oil Liability, the explicit delegation or allocation to, or assumption by, Murphy Oil or any member of the Murphy Oil Group under this Agreement or any Ancillary Agreement shall take priority over any more general textual provision of this Agreement that would otherwise operate to cause such Liability to be a Murphy USA Liability.  For the avoidance of doubt, except as otherwise specifically provided in this Agreement or any Ancillary Agreement, (x) the designation in this Agreement of Liabilities as “Murphy Oil Liabilities” or “Murphy USA Liabilities” is only for purposes of allocating such Liabilities as between the parties and their respective Subsidiaries and shall not affect any obligations to, or give rise to any rights of, any Third Parties and (y) all Liabilities of the Murphy Oil Group or the Murphy USA Group arising from or relating to the sale of any Murphy Oil Former Business will be a Murphy Oil Liability.
 
“ Murphy Oil Policies ” has the meaning set forth in Section 4.02.
 
“ Murphy USA ” has the meaning set forth in the preamble.
 
“ Murphy USA Accounts ” has the meaning set forth in Section 2.08
 
 
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“ Murphy USA Assumed Actions ” has the meaning set forth in Section 5.02(a).
 
“ Murphy USA Business ” means (i) the business conducted by the Murphy USA Group from time to time, whether before, on or after the Distribution (excluding any Murphy Oil Former Business), (ii) the Murphy USA Former Business, (iii) the Murphy USA Contributed Assets and (iv) the Specified Calumet/Valero Contracts.
 
“ Murphy USA Common Stock ” has the meaning set forth in the recitals to this Agreement.
 
“ Murphy USA Contributed Assets ” has the meaning set forth on Schedule 1.
 
“ Murphy USA Financing Arrangements ” means the Notes and the Credit Facility.
 
“ Murphy USA Former Business ” means (i) the Former Businesses previously owned, in whole or in part, or previously operated, in whole or in part, primarily by any member of the Murphy USA Group and (ii) if, but only if, transferred prior to the Distribution Time to Calumet or any of its Affiliates, the so-called “Northern Crude Gathering System” (if so transferred prior to the Distribution Time, the “ Other Calumet Transferred Operations ”); provided that in no event will the Former Refineries Business be considered a Murphy USA Former Business.
 
“ Murphy USA Group ” means Murphy USA and its Subsidiaries as of (and, except where the context clearly indicates otherwise, after) the Distribution Time and after giving effect to the Restructuring, including all predecessors to such Persons.
 
“ Murphy USA Indemnitees ” has the meaning set forth in Section 6.03.
 
“ Murphy USA Insured Party ” means any member of the Murphy USA Group that is named insured, additional named insured or insured under any Shared Policy.
 
“ Murphy USA Liabilities ” means, (i) all Liabilities expressly delegated or allocated to, or assumed by, Murphy USA or any member of the Murphy USA Group under this Agreement or any Ancillary Agreement, including all Liabilities arising in connection with the Murphy USA Assumed Actions; and (ii) except as otherwise specifically provided in this Agreement or any Ancillary Agreement, all Liabilities (whether arising before, on or after the Distribution Date and whether based on facts occurring before, on or after the Distribution Date and including Environmental Liabilities) of or to the extent relating to, or arising from or in connection with, (A) the Murphy USA Business (including any sale or transfer thereof) or (B) except to the extent included as a Murphy Oil Liability pursuant to
 
 
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clause (i) or (ii)(A) of the definition thereof, the Murphy USA Group.  No Liability shall be both a Murphy USA Liability and a Murphy Oil Liability, and in the event of any inconsistency or conflict that may arise in the application or interpretation of this definition or the definition of “Murphy Oil Liabilities”, for the purpose of determining what is and is not a Murphy USA Liability, the explicit delegation or allocation to, or assumption by, Murphy USA or any member of the Murphy USA Group under this Agreement or any Ancillary Agreement shall take priority over any more general textual provision of this Agreement that would otherwise operate to cause such Liability to be a Murphy Oil Liability.  For the avoidance of doubt, except as otherwise specifically provided in this Agreement or any Ancillary Agreement, (x) the designation in this Agreement of Liabilities as “Murphy USA Liabilities” or “Murphy Oil Liabilities” is only for purposes of allocating such Liabilities as between the parties and their respective Subsidiaries and shall not affect any obligations to, or give rise to any rights of, any Third Parties and (y) all Liabilities of the Murphy Oil Group or the Murphy USA Group arising from or relating to the sale of any Murphy USA Former Business will be a Murphy USA Liability.
“ Notes ” has the meaning set forth in the definition of “Notes Offering Memorandum.”
 
“ Notes Offering Memorandum ” means each of the preliminary offering memorandum, subject to completion, dated August 5, 2013, the preliminary offering memorandum supplement, subject to completion, dated August 7, 2013, and the final offering memorandum, dated August 9, 2013, with respect to the offering and sale of $500,000,000 aggregate principal amount of senior unsecured notes of MOUSA (the “ Notes ”).
 
“ NYSE ” means The New York Stock Exchange, Inc.
 
“ Occurrence Based Policies ” has the meaning set forth in Section 4.04(a).
 
“ Other Calumet Transferred Operations ” has the meaning set forth in the definition of “Murphy USA Former Business.”
 
“ Peach Street Lease Agreement ” means the Lease Agreement for 200 Peach Street, El Dorado, Arkansas between Murphy Oil and MOUSA, dated as of the date hereof, substantially in the form of Exhibit F , as such agreement may be amended from time to time in accordance with its terms.
 
“ Person ” means an individual, corporation, partnership, limited liability company, association, trust or other entity or organization, including a Governmental Authority.
 
“ Privilege ” has the meaning set forth in Section 5.07(a).
 
“ Privileged Information ” has the meaning set forth in Section 5.07(a).
 
 
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“ Receiving Party ” has the meaning set forth in Section 5.05.
 
“ Record Date ” means the close of business on August 21, 2013, the date determined by the Board of Directors of Murphy Oil as the record date for the Distribution.
 
“ Related Claims ” means a claim or claims against a Shared Policy made by one or more Murphy USA Insured Parties, on the one hand, and one or more Murphy Oil Insured Parties, on the other hand, filed in connection with Losses suffered by either a Murphy USA Insured Party or a Murphy Oil Insured Party, as the case may be, arising out of the same underlying transaction or series of transactions or event or series of events that have also given rise to Losses suffered by a Murphy Oil Insured Party or a Murphy USA Insured Party, as the case may be, which Losses are the subject of a claim or claims by such Person against a Shared Policy.
 
“ Representatives ” has the meaning set forth in Section 5.06.
 
“ Restructuring ” means the reorganization of certain businesses, assets and liabilities of the Murphy Oil Group and the Murphy USA Group to be completed before the Distribution Time, as described in Schedule 1 .
 
“ Securities Act ” means the Securities Act of 1933, as amended, and the rules and regulations promulgated thereunder.
 
“ Shared Policies ” has the meaning set forth in Section 4.04(a).
 
“ Specified Calumet/Valero Contracts ” means (i) the Crude Supply Agreement dated September 30, 2011, as amended from time to time, by and between MOUSA and Calumet, (ii) the Throughput Agreement dated as of October 1, 2011, as amended from time to time, by and between MOUSA and Valero Marketing and Supply Company and (iii) the Pipeline Servitude Agreement by Valero to MOUSA dated September 29, 2011, as amended from time to time.
 
“ Stock Options Registration Statement ” means the Registration Statement on Form S-8 or such other form or forms as may be appropriate, as amended and supplemented, including all documents incorporated by reference therein, to effect the registration under the Securities Act of Murphy USA Common Stock subject to certain stock options granted to current and former officers, employees, directors and consultants of the Murphy Oil Group pursuant to the Employee Matters Agreement.
 
“ Subsidiary ” means, with respect to any Person, any other entity of which securities or other ownership interests having ordinary voting power to elect a majority of the board of directors or other persons performing similar functions are at the time directly or indirectly owned by such Person.
 
 
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“ Tax Matters Agreement ” means the Tax Matters Agreement between Murphy Oil and Murphy USA, dated as of the date hereof, substantially in the form of Exhibit B , as such agreement may be amended from time to time in accordance with its terms.
 
“ Third-Party Claim ” has the meaning set forth in Section 6.04(b).
 
“ Third Party ” means a Person that is not an Affiliate of the Murphy USA Group or the Murphy Oil Group.
 
“ Trademark Assignment Agreement ” means the Trademark Assignment Agreement between Murphy Oil and MOUSA, to be dated as of the date hereof, substantially in the form of Exhibit D , as such agreement may be amended from time to time in accordance with its terms.
 
“ Trademark License Agreement ” means the Trademark Assignment Agreement between Murphy Oil and Murphy USA, to be dated as of the date hereof, substantially in the form of Exhibit E , as such agreement may be amended from time to time in accordance with its terms.
 
“ Transition Services Agreement ” means the Transition Services Agreement between Murphy Oil and Murphy USA, dated as of the date hereof, substantially in the form of Exhibit C , as such agreement may be amended from time to time in accordance with its terms.
 
“ Unrelated Claims ” means a claim or claims against a Shared Policy that is not a Related Claim.
 
“ Unreleased Murphy Oil Liability ” has the meaning set forth in Section 2.09(d).
 
“ Unreleased Murphy USA Liability ” has the meaning set forth in Section 2.09(b).
 
“ Valero ” means Valero Refining-Meraux LLC (together with any of its Affiliates to which it assigns any of its rights).
 
“ Valero Asset Purchase Agreement ” means that certain Asset Purchase Agreement, dated as of September 1, 2011, as amended from time to time, between Valero and Murphy Oil.
 
Section 1.02 .  Interpretation.   (a) In this Agreement, unless the context clearly indicates otherwise:
 
(i)   words used in the singular include the plural and words used in the plural include the singular;
 
 
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(ii)   references to any Person include such Person’s successors and assigns but, if applicable, only if such successors and assigns are permitted by this Agreement;
 
(iii)   except as otherwise clearly indicated, reference to any gender includes the other gender;
 
(iv)   the words “include,” “includes” and “including” shall be deemed to be followed by the words “without limitation”;
 
(v)   reference to any Article, Section, Exhibit or Schedule means such Article or Section of, or such Exhibit or Schedule to, this Agreement, as the case may be, and references in any Section or definition to any clause means such clause of such Section or definition;
 
(vi)   the words “herein,” “hereunder,” “hereof,” “hereto” and words of similar import shall be deemed references to this Agreement as a whole and not to any particular Section or other provision hereof;
 
(vii)   reference to any agreement, instrument or other document means such agreement, instrument or other document as amended, supplemented and modified from time to time to the extent permitted by the provisions thereof and by this Agreement;
 
(viii)   reference to any law (including statutes and ordinances) means such law (including all rules and regulations promulgated thereunder) as amended, modified, codified or reenacted, in whole or in part, and in effect at the time of determining compliance or applicability;
 
(ix)   relative to the determination of any period of time, “from” means “from and including,” “to” means “to and including” and “through” means “through and including”;
 
(x)   the titles to Articles and headings of Sections contained in this Agreement have been inserted for convenience of reference only and shall not be deemed to be a part of or to affect the meaning or interpretation of this Agreement;
 
(xi)   unless otherwise specified in this Agreement, all references to dollar amounts herein shall be in respect of lawful currency of the United States; and
 
(xii)   any capitalized term used in an Exhibit or Schedule but not otherwise defined therein shall have the meaning set forth in this Agreement.
 

 
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ARTICLE 2
Prior to the Distribution
 
On or prior to the Distribution Date:
 
Section 2.01.   Information Statement; Listing.   Murphy Oil shall mail the Information Statement to the holders of Murphy Oil Common Stock as of the Record Date.  Murphy Oil and Murphy USA shall take all such actions as may be necessary or appropriate under the securities or blue sky laws of states or other political subdivisions of the United States and shall use reasonable efforts to comply with all applicable foreign securities laws in connection with the transactions contemplated by this Agreement and the Ancillary Agreements.  Murphy USA shall prepare, file and pursue an application to permit listing of the Murphy USA Common Stock on the NYSE.
 
Section 2.02.   Restructuring .  Each of Murphy Oil and Murphy USA shall use, and shall cause each of its respective Subsidiaries to use, all reasonable efforts to consummate the Restructuring prior to the Distribution Time.
 
Section 2.03.   Transfers of Certain Other Assets and Liabilities .  Unless otherwise provided in this Agreement or in any Ancillary Agreement and to the extent not previously effected in accordance with Section 2.02, prior to the Distribution Time (a) Murphy Oil shall, or shall cause the relevant member of the Murphy Oil Group to, assign, contribute, convey, transfer and deliver to Murphy USA or any Subsidiary of Murphy USA as of the Distribution Time designated by Murphy USA (a “ Murphy USA Designee ”) all of the right, title and interest of Murphy Oil or such member of the Murphy Oil Group in and to all assets, if any, held by any member of the Murphy Oil Group that relate solely to the Murphy USA Business (and not to the Murphy Oil Business) and Murphy USA or such Murphy USA Designee shall assume and take transfer of all Liabilities to the extent associated with such assets and (b) Murphy Oil and Murphy USA shall, or shall cause the relevant member of the Murphy USA Group to, assign, contribute, convey, transfer and deliver to Murphy Oil or any Subsidiary of Murphy Oil as of the Distribution Time designated by Murphy Oil (a “ Murphy Oil Designee ”) all of the right, title and interest of Murphy USA or such member of the Murphy USA Group in and to all assets, if any, held by any member of the Murphy USA Group that relate solely to the Murphy Oil Business (and not to the Murphy USA Business) and Murphy Oil or such Murphy Oil Designee shall assume and take transfer of all Liabilities to the extent associated with such assets.  To the extent any assignment, contribution, conveyance, transfer, delivery or assumption of any asset or Liability of either Group as of the Distribution Time is not effected in accordance with this Section 2.03 prior to the Distribution Time for any reason (including as a result of the failure of the parties to identify it as being required to be transferred pursuant to this Section 2.03, but subject to Section 2.05), it shall be effected as promptly thereafter as practicable.
 
 
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Section 2.04 .  Transfers of Certain Assets to Third Parties .  Murphy USA shall, and shall cause the members of the Murphy USA Group to, cooperate with Murphy Oil with respect to satisfaction of the obligations of Murphy Oil under each of the Calumet Asset Purchase Agreement and the Valero Asset Purchase Agreement, including by assigning, contributing, conveying, transferring and delivering in accordance therewith (a) to Calumet all of the right, title and interest of Murphy USA or any member of the Murphy USA Group in and to all Purchased Assets (as such term is defined in the Calumet Asset Purchase Agreement) in accordance with the terms of the Calumet Asset Purchase Agreement and (b) to Valero all of the right, title and interest of Murphy USA or any member of the Murphy USA Group in and to all Purchased Assets (as such term is defined in the Valero Asset Purchase Agreement) in accordance with the terms of the Valero Asset Purchase Agreement.  Notwithstanding the foregoing, and except for the Specified Calumet/Valero Contracts, all Liabilities relating to, or arising from or in connection with, the Calumet Asset Purchase Agreement or the Valero Asset Purchase Agreement shall be “Murphy Oil Liabilities” (and shall not be “Murphy USA Liabilities”).  Murphy USA shall, and shall cause the members of the Murphy USA Group to, comply with all agreements entered into in connection with any sale of Other Calumet Transferred Operations, and all Liabilities under such agreements will be “Murphy USA Liabilities”.  For the avoidance of doubt, this Agreement shall not give rise to any obligations of Murphy USA or any other member of the Murphy USA Group to, or give rise to any rights of, Calumet, Valero or any of their Affiliates.
 
Section 2.05 .  Agreement Relating To Consents Necessary To Transfer Assets and Liabilities.   Notwithstanding any provision of this Agreement to the contrary, this Agreement shall not constitute an agreement to transfer or assign any asset (including any contract, agreement or instrument but excluding the direct or indirect transfer of capital stock of any member of any Group) or any claim or right or any benefit arising thereunder or resulting therefrom, or to assume any Liability associated therewith, if such transfer, assignment, or assumption without the necessary consent of a Third Party, would result in a breach, or constitute a default (or an event which, with the giving of notice or lapse of time, or both, would become a default), under any contract, agreement or other material instrument or would otherwise adversely affect the rights of a member of the Murphy Oil Group or Murphy USA Group thereunder.  Murphy Oil and Murphy USA will use their reasonable efforts to obtain the consent of any Third Party or any Governmental Authority, if any, required in connection with the transfer or assignment pursuant to Section 2.03 of any such asset or any such claim or right or benefit arising thereunder and the assumption of any Liability associated therewith.  If and when such consent is obtained, the absence of which caused the deferral of the transfer or assignment of any asset or any claim or right or benefit arising thereunder, or the assumption of any Liability associated therewith, pursuant to Section 2.03 (and assuming any other legal impediments for such transfer, assignment and/or assumption have been removed), such transfer, assignment and/or assumption shall be effected in accordance with the terms of this Agreement and/or the applicable Ancillary Agreement.  During the
 
 
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period in which any transfer, assignment or assumption is delayed pursuant to this Section 2.05 as a result of the absence of a required consent, Murphy Oil and Murphy USA will cooperate in a mutually agreeable arrangement under which the intended transferee would, to the maximum extent possible, obtain the benefits and assume the obligations of the relevant asset, claim, right, benefit and/or Liability in accordance with this Agreement as if the relevant transfer, assignment or assumption had taken place, including by sub-contract, sub-license or sub-lease to such transferee, or under which the transferor would, with respect to an agreement, enforce for the benefit and at the cost of the transferee, with the transferee assuming the transferor’s obligations, any and all rights of the transferor against any Third Party thereunder.  For the avoidance of doubt, nothing contained in this Section 2.05 shall prevent or prohibit the transfer of stock.
 
Section 2.06.   Intercompany Accounts.   The parties shall use reasonable efforts to settle prior to the Distribution Date (to the extent practicable), all intercompany receivables, payables and other balances, in each case, that arise prior to the Distribution Time between members of the Murphy Oil Group, on the one hand, and members of the Murphy USA Group, on the other hand  (“ Intercompany Accounts ”), by one or more cash payments in satisfaction of such amounts.  From and after the Distribution Time, the parties shall settle as promptly as practicable and in the manner set forth in the first sentence of this Section 2.06 any Intercompany Accounts that are not settled as of the Distribution Time; provided that any claim by any member of either Group with respect to an Intercompany Account must be made in writing  (which writing shall be provided in accordance with Section 7.01 and be reasonably specific as to the applicable Intercompany Account and the amount thereof) to the applicable member of the other Group within 90 days of the Distribution Date, and any Intercompany Account that is not settled, or that a claim in respect thereof is not made in compliance with Section 2.06, within such 90 day period shall be deemed waived and released in accordance with Section 6.01 without any further action by either party.
 
Section 2.07 .  Intercompany Agreements.   (a) Except as set forth in Section 2.07(b), all agreements, arrangements, commitments or understandings, whether or not in writing, between members of the Murphy Oil Group, on the one hand, and members of the Murphy USA Group, on the other hand, in effect immediately prior to the Distribution shall be terminated, cancelled and of no further force and effect from and after the Distribution Time (including any provision thereof that purports to survive termination).
 
(b)   The provisions of Section 2.07(a) shall not apply to any of the following agreements, arrangements, commitments or understandings: (i) this Agreement and the Ancillary Agreements (and each other agreement or instrument expressly contemplated by this Agreement or any Ancillary Agreement to be entered into by any of the parties hereto or any of the members of their respective Groups); (ii) any agreements, arrangements, commitments or
 
 
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understandings to which any Person other than the parties hereto and the members of their respective Groups is a party; (iii) any Intercompany Accounts to the extent such Intercompany Accounts were not satisfied and/or settled in accordance with the first sentence of Section 2.06 (it being understood that such Intercompany Accounts shall be satisfied or settled in accordance with, but shall be subject to the time limitation set forth in, the second sentence of Section 2.06); and (iv) the agreements, arrangements, commitments and understanding set forth on Schedule 2.07(b) and any other agreements, arrangements, commitments or understandings that this Agreement or any Ancillary Agreements expressly contemplate will survive the Distribution Date.
 
Section 2.08 .  Bank Accounts; Cash Balances.   (a) Murphy Oil and Murphy USA each agrees to take, or cause the respective members of their respective Groups to take, at the Distribution Date (or such earlier date as Murphy Oil and Murphy USA may agree), all actions necessary to amend all contracts or agreements governing each bank and brokerage account owned by Murphy USA or any other member of the Murphy USA Group (collectively, the “ Murphy USA Accounts ”) so that such Murphy USA Accounts, if currently linked (whether by automatic withdrawal, automatic deposit or any other authorization to transfer funds from or to, hereinafter “linked”) to any bank or brokerage account owned by Murphy Oil or any other member of the Murphy Oil Group (collectively, the “ Murphy Oil Accounts ”), are de-linked from the Murphy Oil Accounts.
 
(b)   Murphy Oil and Murphy USA each agrees to take, or cause the respective members of their respective Groups to take, at the Distribution Date (or such earlier date as Murphy Oil and Murphy USA may agree), all actions necessary to amend all contracts or agreements governing the Murphy Oil Accounts so that such Murphy Oil Accounts, if currently linked to a Murphy USA Account, are de-linked from the Murphy USA Accounts.
 
(c)   It is intended that, following consummation of the actions contemplated by Sections 2.08(a) and 2.08(b), there will be in place a centralized cash management process pursuant to which the Murphy USA Accounts will be managed centrally and funds collected will be transferred into one or more centralized accounts maintained by Murphy USA.
 
(d)   It is intended that, following consummation of the actions contemplated by Sections 2.08(a) and 2.08(b), there will continue to be in place a centralized cash management process pursuant to which the Murphy Oil Accounts will be managed centrally and funds collected will be transferred into one or more centralized accounts maintained by Murphy Oil.
 
(e)   With respect to any outstanding payments initiated by Murphy Oil, Murphy USA, or any of their respective Subsidiaries prior to the Distribution Time, such outstanding payments shall be honored following the Distribution by the Person or Group owning the account from which the payment was initiated.
 
 
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(f)   As between Murphy Oil and Murphy USA (and the members of their respective Groups) all payments received after the Distribution Date by either party (or member of its Group) that relate to a business, asset or Liability of the other party (or member of its Group), shall be held by such party for the use and benefit of the party entitled thereto (at the expense of the party entitled thereto).  Each party shall maintain an accounting of any such payments, and the parties shall have a monthly reconciliation, whereby all such payments received by each party are calculated and the net amount owed to Murphy Oil or Murphy USA shall be paid over with right of set-off.  If at any time the net amount owed to either party exceeds $500,000, an interim payment of such net amount owed shall be made to the party entitled thereto within three (3) Business Days of such amount exceeding $500,000.  Notwithstanding the foregoing, neither Murphy Oil nor Murphy USA shall act as collection agent for the other party, nor shall either party act as surety or endorser with respect to non-sufficient funds checks or funds to be returned in a bankruptcy or fraudulent conveyance action.
 
Section 2.09.   Novation of Liabilities.   (a )  Each of Murphy Oil and Murphy USA, at the request of the other, shall endeavor, if reasonably practicable, to obtain, or to cause to be obtained, if reasonably practicable, any consent, substitution, approval or amendment required to novate or assign all obligations under agreements, leases, licenses and other Liabilities of any nature whatsoever that constitute Murphy USA Liabilities, or to obtain in writing the unconditional release of all parties to such arrangements other than any member of the Murphy USA Group so that, in any such case, the members of the Murphy USA Group will be solely responsible for the Murphy USA Liabilities (including by providing a substitute letter of credit of like amount or substitute guaranty for any existing letter of credit or guaranty, respectively); provided, however, that neither Murphy Oil nor Murphy USA shall be obligated to contribute any capital or pay any consideration in any form (including providing any letter of credit, guaranty or other financial accommodation, except for a substitute letter of credit or substitute guaranty as referenced in the prior parenthetical) to any third Person from whom any such consent, substitution, approval, amendment or release is requested.
 
(b)   If Murphy Oil or Murphy USA is unable to obtain, or to cause to be obtained, any such required consent, substitution, approval, amendment or release and the applicable member of the Murphy Oil Group continues to be bound by such agreement, lease, license or other Liability (each, an “ Unreleased Murphy USA Liability ”), Murphy USA shall, to the extent not prohibited by Applicable Law, as indemnitor, guarantor, agent or subcontractor for such member of the Murphy Oil Group, as the case may be, (i) on a timely basis pay, perform and discharge fully all the Liabilities of such member of the Murphy Oil Group that constitute Unreleased Murphy USA Liabilities and (ii) use its commercially reasonable efforts to effect such payment, performance, or discharge prior to any demand for such payment, performance or discharge is permitted to be made by the obligee thereunder on any member of the Murphy Oil Group.  If and when such consent, substitution, approval, amendment or release shall be obtained or
 
 
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the Unreleased Murphy USA Liabilities shall otherwise become assignable or able to be novated, Murphy Oil shall promptly assign, or cause to be assigned, and Murphy USA or the applicable member of the Murphy USA Group shall assume, such Unreleased Murphy USA Liabilities without exchange of further consideration.
 
(c)   Each of Murphy Oil and Murphy USA, at the request of the other, shall endeavor, if reasonably practicable, to obtain, or to cause to be obtained, if reasonably practicable, any consent, substitution, approval or amendment required to novate or assign all obligations under agreements, leases, licenses and other Liabilities of any nature whatsoever that constitute Murphy Oil Liabilities, or to obtain in writing the unconditional release of all parties to such arrangements other than any member of the Murphy Oil Group, so that, in any such case, the members of the Murphy Oil Group will be solely responsible for the Murphy Oil Liabilities (including by providing a substitute letter of credit of like amount or substitute guaranty for any existing letter of credit or guaranty, respectively); provided, however, that neither Murphy Oil nor Murphy USA shall be obligated to contribute any capital or pay any consideration in any form (including providing any letter of credit, guaranty or other financial accommodation, except for a substitute letter of credit or substitute guaranty as referenced in the prior parenthetical) to any third Person from whom any such consent, substitution, approval, amendment or release is requested.  Notwithstanding the foregoing, neither Murphy Oil nor Murphy USA shall be required to obtain, or to cause to be obtained, any consent, substitution, approval or amendment required to novate or assign any obligations or other Liabilities under or in respect of that certain Sale and Purchase of the Milford Haven Refinery Business, dated as of October 3, 2007, as amended from time to time, among Total UK Limited, Total Milford Haven Refinery Limited, Murco Petroleum Limited and MOUSA (the “ Total Agreement ”); provided that, for the avoidance of doubt, all such obligations shall be Murphy Oil Liabilities under this Agreement.
 
(d)   If Murphy Oil or Murphy USA is unable to obtain, or to cause to be obtained, any such required consent, substitution, approval, amendment or release and the applicable member of the Murphy Oil Group continues to be bound by such agreement, lease, license or other Liability (each, an “ Unreleased Murphy Oil Liability ”), Murphy Oil shall, to the extent not prohibited by Applicable Law, as indemnitor, guarantor, agent or subcontractor for such member of the Murphy Oil Group, as the case may be, (i) on a timely basis pay, perform and discharge fully all the obligations or other Liabilities of such member of the Murphy Oil Group that constitute Unreleased Murphy Oil Liabilities and (ii) use its commercially reasonable efforts to effect such payment, performance, or discharge prior to any demand for such payment, performance or discharge is permitted to be made by the obligee thereunder on any member of the Murphy USA Group.  If and when such consent, substitution, approval, amendment or release shall be obtained or the Unreleased Murphy USA Liabilities shall otherwise become assignable or able to be novated, Murphy USA shall promptly assign, or cause to be assigned, and Murphy Oil or the applicable member of the
 
 
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Murphy Oil Group shall assume, such Unreleased Murphy Oil Liabilities without exchange of further consideration.
 
Section 2.10 .  Further Assurances and Consents.   In addition to the actions specifically provided for elsewhere in this Agreement, each of the parties hereto shall use its reasonable efforts to take, or cause to be taken, all actions, and to do, or cause to be done, all things, reasonably necessary, proper or advisable under Applicable Laws and agreements or otherwise to consummate and make effective the transactions contemplated by this Agreement, including but not limited to using its reasonable efforts to obtain any consents and approvals and to make any filings and applications necessary or desirable in order to consummate the transactions contemplated by this Agreement.
 
 
ARTICLE 3
Distribution
 
Section 3.01.   Conditions Precedent to Distribution.   In no event shall the Distribution occur unless each of the following conditions shall have been satisfied (or waived by Murphy Oil in its sole discretion):
 
(i)   the Board of Directors of Murphy Oil shall be satisfied that the Distribution will be made out of surplus within the meaning of Section 170 of the General Corporation Law of the State of Delaware;
 
(ii)   the Board of Directors of Murphy Oil shall have approved the Distribution and shall not have abandoned the Distribution or terminated this Agreement at any time prior to the Distribution;
 
(iii)   the Restructuring shall have been completed;
 
(iv)   the Form 10 shall have been filed with the Commission and declared effective by the Commission, no stop order suspending the effectiveness of the Form  10 shall be in effect, no proceedings for such purpose shall be pending before or threatened by the Commission, and the Information Statement shall have been mailed to holders of the Murphy Oil Common Stock as of the Record Date;
 
(v)   all actions and filings necessary or appropriate under applicable federal, state or foreign securities or “blue sky” laws and the rules and regulations thereunder shall have been taken and, where applicable, become effective or been accepted;
 
(vi)   the Murphy USA Common Stock to be delivered in the Distribution shall have been approved for listing on the NYSE, subject to official notice of issuance;
 
 
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(vii)   the Board of Directors of Murphy USA, as named in the Information Statement, shall have been duly elected, and the amended and restated certificate of incorporation and the amended and restated bylaws of Murphy USA, each in substantially the form filed as an exhibit to the Form  10, shall be in effect;
 
(viii)   each of the Ancillary Agreements shall have been duly executed and delivered by the parties thereto;
 
(ix)   Murphy Oil shall have received a private letter ruling from the IRS and an opinion of Davis Polk & Wardwell LLP (neither of which shall have been revoked or modified in any material respect), in each case, reasonably satisfactory to Murphy Oil, confirming that the Distribution will be tax free to Murphy Oil and to the stockholders of Murphy Oil for United States federal income tax purposes;
 
(x)   no Applicable Law shall have been adopted, promulgated or issued that prohibits the consummation of the Distribution or any of the other transactions contemplated hereby;
 
(xi)   any material governmental approvals and consents and any material permits, registrations and consents from Third Parties, in each case, necessary to effect the Distribution and to permit the operation of the Murphy USA Business after the Distribution Date substantially as it is conducted at the date hereof shall have been obtained;
 
(xii)   a credit facility shall have been made available to MOUSA by its lenders on terms and in an amount satisfactory to Murphy Oil; and
 
(xiii)   no event or development shall have occurred or exist that, in the judgment of the Board of Directors of Murphy Oil, in its sole discretion, makes it inadvisable to effect the Distribution or the other transactions contemplated hereby.
 
Each of the foregoing conditions is for the sole benefit of Murphy Oil and shall not give rise to or create any duty on the part of Murphy Oil or its Board of Directors to waive or not to waive any such condition or to effect the Distribution, or in any way limit Murphy Oil’s rights of termination as set forth in Section 7.11 or alter the consequences of any termination from those specified in Section 7.11.  Any determination made by Murphy Oil on or prior to the Distribution concerning the satisfaction or waiver of any or all of the conditions set forth in this Section 3.01 shall be conclusive and binding on the parties.
 
Section 3.02.   The Distribution .  (a) Murphy Oil shall, in its sole discretion, determine the Distribution Date and all terms of the Distribution, including the timing of the consummation of all or part of the Distribution.  Murphy Oil may, at any time and from time to time until the consummation of the Distribution, modify or change the terms of the Distribution including, without
 
 
20
 
limitation, by accelerating or delaying the timing of the consummation of all or part of the Distribution.  For the avoidance of doubt, nothing in this Agreement shall in any way limit Murphy Oil’s right to terminate this Agreement or the Distribution as set forth in Section 7.11 or alter the consequences of any such termination from those specified in Section 7.11.
 
(b)   Subject to the terms and conditions set forth in this Agreement, (i) on or prior to the Distribution Date, Murphy Oil shall take such steps as are reasonably necessary or appropriate to permit the Distribution by the Distribution Agent of validly issued, fully paid and nonassessable shares of Murphy USA Common Stock, registered in book-entry form through the registration system, (ii) the Distribution shall be effective at the Distribution Time, and (iii) Murphy Oil shall instruct the Distribution Agent to distribute, on or as soon as practicable after the Distribution Date, to each holder of record of Murphy Oil Common Stock as of the Record Date, by means of a pro rata dividend, one share of Murphy USA Common Stock for every four shares of Murphy Oil Common Stock so held.  Following the Distribution Date, Murphy USA agrees to provide all book-entry transfer authorizations for shares of Murphy USA Common Stock that Murphy Oil or the Distribution Agent shall require (after giving effect to Sections 3.03 and 3.04) in order to effect the Distribution.
 
Section 3.03.   Fractional Shares .  No fractional shares of Murphy USA Common Stock will be distributed in the Distribution.  The Distribution Agent will be directed to determine (based on the aggregate number of shares held by each holder) the number of whole shares and the fractional share of Murphy USA Common Stock allocable to each holder of Murphy Oil Common Stock as of the Record Date.  Upon the determination by the Distribution Agent of such numbers of whole shares and fractional shares, as soon as practicable on or after the Distribution Date, the Distribution Agent, acting on behalf of the holders thereof, shall aggregate the fractional shares into whole shares and shall sell the whole shares obtained thereby for cash on the open market (with the Distribution Agent, in its sole discretion, determining when, how and through which broker-dealer(s) and at which price(s) to make such sales) and shall thereafter promptly distribute to each such holder entitled thereto (pro rata based on the fractional share such holder would have been entitled to receive in the Distribution) the resulting aggregate cash proceeds, after making appropriate deductions of the amounts required to be withheld for United States federal income tax purposes, if any, and after deducting an amount equal to all brokerage fees and commissions, transfer taxes and other costs attributed to the sale of shares pursuant to this Section 3.03.  Neither Murphy Oil nor Murphy USA will be required to guarantee any minimum sale price for the fractional shares.  Recipients of cash in lieu of fractional shares will not be entitled to any interest on the amounts of payments made in lieu of fractional shares.
 
Section 3.04.   NO REPRESENTATIONS OR WARRANTIES.   EXCEPT AS EXPRESSLY SET FORTH HEREIN OR IN ANY OTHER DISTRIBUTION DOCUMENT, NO MEMBER OF EITHER GROUP MAKES ANY
 
 
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REPRESENTATION OR WARRANTY OF ANY KIND WHATSOEVER, EXPRESS OR IMPLIED, TO ANY MEMBER OF THE OTHER GROUP OR ANY OTHER PERSON WITH RESPECT TO ANY OF THE TRANSACTIONS OR MATTERS CONTEMPLATED HEREBY (INCLUDING WITH RESPECT TO THE BUSINESS, ASSETS, LIABILITIES, CONDITION OR PROSPECTS (FINANCIAL OR OTHERWISE) OF, OR ANY OTHER MATTER INVOLVING, EITHER BUSINESS, OR THE SUFFICIENCY OF ANY ASSETS TRANSFERRED TO THE APPLICABLE GROUP, OR THE TITLE TO ANY SUCH ASSETS, OR THAT ANY REQUIREMENTS OF APPLICABLE LAW ARE COMPLIED WITH WITH RESPECT TO THE RESTRUCTURING OR THE DISTRIBUTION).  EXCEPT AS EXPRESSLY SET FORTH HEREIN OR IN ANY OTHER DISTRIBUTION DOCUMENT, EACH MEMBER OF EACH GROUP SHALL TAKE ALL OF THE BUSINESS, ASSETS AND LIABILITIES TRANSFERRED TO OR ASSUMED BY IT PURSUANT TO THIS AGREEMENT OR ANY DISTRIBUTION DOCUMENT ON AN “AS IS, WHERE IS” BASIS, AND ALL IMPLIED WARRANTIES OF MERCHANTABILITY, FITNESS FOR A SPECIFIC PURPOSE OR OTHERWISE ARE HEREBY EXPRESSLY DISCLAIMED.
 
ARTICLE 4
Insurance Matters
 
Section 4.01 .  Insurance Prior to the Distribution Time.   Except as may otherwise be expressly provided in this Article 4, Murphy USA does hereby agree, for itself and on behalf of the Murphy USA Group, that the Murphy Oil Group shall not have any Liability whatsoever to the Murphy USA Group as a result of the insurance policies, insurance contracts and claim administration contracts and practices related to the foregoing of the Murphy Oil Group in effect at any time prior to the Distribution Time, including as a result of the level or scope of any such insurance policies, insurance contracts, claim administration contracts, the creditworthiness of any insurance carrier, the terms and conditions of any policy or contract and the adequacy or timeliness of any notice, or lack thereof, to any insurance carrier, bank trustee for any insurer, scheme administrator for any insurer, or claims administrator with respect to any actual claim or potential claim or otherwise.
 
Section 4.02 .  Ownership of Existing Policies and Programs. Murphy Oil or any member of the Murphy Oil Group will continue to own all insurance policies, insurance contracts and claim administration contracts of any kind of any member of the Murphy Oil Group which were or are in effect at any time at or prior to the Distribution Time (other than insurance policies, insurance contracts and claim administration contracts established in contemplation of the Distribution to cover only the Murphy USA Group after the Distribution Time), together with all rights, benefits and privileges under any of the foregoing (collectively, the “ Murphy Oil Policies ”). Subject to the provisions of this Agreement, including the Murphy USA Group’s rights under Section 4.04, (a) the
 
 
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members of the Murphy Oil Group shall retain all of their respective rights, benefits and privileges, if any, under the Murphy Oil Policies and (b) coverage of the Murphy USA Group under the Murphy Oil Policies shall cease as of the Distribution Time with respect to all Losses to the extent incurred or suffered by the Murphy USA Group in connection with, relating to, arising out of or due to, directly or indirectly, any event or occurrence at or after the Distribution Time.  Nothing contained herein shall be construed to be an attempted assignment of or a change to any part of the ownership of the Murphy Oil Policies or shall be construed to waive any right or remedy of any member of the Murphy Oil Group in respect thereof.  No provision of this Agreement is intended to relieve any insurer of any Liability under any policy.
 
Section 4.03 .  Acquisition and Maintenance of Post-Distribution Insurance by Murphy USA.   Commencing on and as of the Distribution Time, Murphy USA shall be responsible for establishing and maintaining a separate insurance program consisting of the types of insurance policies and coverages that Murphy USA considers appropriate to carry on behalf of the Murphy USA Group.  Each member of the Murphy USA Group, as appropriate, shall be responsible for all administrative and financial matters relating to insurance policies established and maintained by any member of the Murphy USA Group and claims relating to any period at or after the Distribution Time involving any member of the Murphy USA Group.
 
Section 4.04.   Rights Under Shared Policies .   (a) At and after the Distribution Time: (i) Murphy USA and the other members of the Murphy USA Group will have the right to assert and prosecute and/or continue to prosecute claims for any Losses with respect to the Murphy USA Business under Murphy Oil Policies that cover any member of the Murphy USA Group and/or any or all of the Murphy USA Business within the definition of the named insured, additional named insured, additional insured or insured (excluding, for the avoidance of doubt, any group health and welfare insurance policies) (“ Shared Policies ”) with Third Party insurers that are “occurrence based” insurance policies (such Shared Policies, “ Occurrence Based Policies ”) arising out of insured occurrences occurring from the date coverage thereunder first commenced until the Distribution Time to the extent that the terms and conditions of any such Occurrence Based Policies and agreements relating thereto so allow and (ii) Murphy USA and the other members of the Murphy USA Group will have the right to continue to prosecute claims with respect to the Murphy USA Business under Shared Policies with Third Party insurers that are made under liability insurance policies written on a “claims made” basis (such Shared Policies, “ Claims Made Policies ”) arising out of insured incidents occurring from the date coverage thereunder first commenced until the Distribution Time to the extent that the terms and conditions of any such Claims Made Policies and agreements relating thereto so allow; provided that in the case of clauses (i) and (ii), (A) subject to Section 4.04(c), the Murphy Oil Group may, at any time, without liability or obligation to the Murphy USA Group, amend, commute, terminate, buy-out, extinguish liability under or otherwise modify any Shared Policies (and
 
 
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such claims shall be subject to any such amendments, commutations, terminations, buy-outs, extinguishments and modifications); (B) such claims will be subject to (and recovery thereon will be reduced by the amount of) any applicable deductibles, retentions or self-insurance provisions, and, with respect to any such deductibles, retentions or self-insurance provisions which require a payment by a member of the Murphy Oil Group in respect thereof, Murphy USA shall reimburse such member of the Murphy Oil Group for a pro rata portion of such payment based on Murphy USA’s interest in such claim; (C) Murphy USA shall be responsible for and shall pay any claims handling expenses or residual Liability arising from such claims and (D) such claims will be subject to exhaustion of existing sublimits and aggregate limits as provided in Section 4.04(d).
 
(b)   Murphy Oil will use reasonable efforts to assist Murphy USA in asserting claims and establishing its right to coverage under applicable Shared Policies if so requested by Murphy USA in writing (so long as all of the Murphy Oil Group’s out-of-pocket expenses in connection therewith are promptly paid by Murphy USA following receipt of an invoice for such expenses), but Murphy Oil will not be otherwise obligated to negotiate, investigate, defend, settle or otherwise handle such claims on behalf of Murphy USA.  No member of the Murphy Oil Group will bear any Liability for the failure of an insurer to pay any claim under any Shared Policy. It is understood that any Claims Made Policies may not provide any coverage to the Murphy USA Group for incidents occurring prior to the Distribution Time but that are asserted with the insurance carrier after the Distribution Time.
 
(c)   In the event that after the Distribution Time Murphy Oil proposes to amend, commute, terminate, buy-out, extinguish liability under or otherwise modify any Shared Policies, in respect of periods of coverage prior to the Distribution Time, under which Murphy USA, the Murphy USA Business or the other members of the Murphy USA Group has or may in the future have rights to assert claims pursuant to this Article 4 in a manner that would adversely affect any such rights of Murphy USA, the Murphy USA Business or any of the other members of the Murphy USA Group, (i) Murphy Oil will, if such proposed action would be material to the Murphy USA Group, give Murphy USA prior notice thereof and consult with Murphy USA with respect to such action and (ii) Murphy Oil will pay to Murphy USA its equitable share (as reasonably determined by Murphy Oil), if any, of any net proceeds actually received by Murphy Oil from the insurer under the applicable Shared Policy as a result of such action by Murphy Oil (after deducting Murphy Oil’s out-of-pocket expenses incurred in connection with such action).
 
(d)   To the extent that the limits of any Shared Policy preclude payment in full of Unrelated Claims filed by any member of the Murphy Oil Group, on the one hand, and any member of the Murphy USA Group, on the other hand, the insurance proceeds available under such Shared Policy shall be paid to Murphy Oil and/or Murphy USA, as applicable, on a FIFO Basis.  In the event that any
 
 
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member of the Murphy Oil Group, on the one hand, and any member of the Murphy USA Group, on the other hand, files Related Claims under any Shared Policy, each of Murphy Oil and Murphy USA shall receive a pro rata amount of the available insurance proceeds, based on the relationship the Loss incurred by each such party bears to the total Loss to both such parties from the occurrence or event underlying the Related Claims.
 
(e)   In no event (except as provided in Section 4.04(c) or Section 4.04(d)) will any member of the Murphy Oil Group have any liability or obligation whatsoever to any member of the Murphy USA Group if any Shared Policy is terminated or otherwise ceases to be in effect for any reason, is unavailable or inadequate to cover any Liability of any member of the Murphy USA Group for any reason whatsoever or is not renewed or extended beyond the current expiration date.
 
Section 4.05 .  Administration and Reserves.   (a) From and after the Distribution Time, the Murphy Oil Group will be responsible for the Claims Administration with respect to claims of the Murphy Oil Group under Shared Policies.
 
(b)   From and after the Distribution Time, the Murphy USA Group will be responsible for the Claims Administration with respect to claims of the Murphy USA Group under Shared Policies, and Murphy Oil shall provide appropriate instructions to the applicable insurance brokers under the Shared Policies to facilitate Claims Administration by Murphy USA.  Murphy USA shall provide advance notice to Murphy Oil of any such claims.
 
(c)   Each party agrees to consider in good faith (but shall have no obligation to accept) any requests by the other party to provide assistance to, and cooperate with, such party or any member of its Group with respect to the Claims Administration referred to in Sections 4.05(a) and 4.05(b).  None of the members of either Group and their respective directors, officers, agents and employees shall have any liability, whether direct or indirect, in contract or tort or otherwise, to any Person for or in connection with the provision of such assistance or cooperation.  All out-of-pocket expenses incurred by either party or any member of its Group in providing any such assistance or cooperation shall be reimbursed promptly by the other party or any member of its Group.
 
Section 4.06 .  Insurance Premiums.   From and after the Distribution Time, Murphy Oil will pay all premiums, taxes, assessments or similar charges (retrospectively-rated or otherwise) as required under the terms and conditions of the respective Shared Policies in respect of periods of coverage prior to the Distribution Time, whereupon Murphy USA will upon the request of Murphy Oil promptly reimburse Murphy Oil for that portion of such additional premiums and other payments paid by Murphy Oil as are reasonably determined by Murphy Oil to be attributable to the Murphy USA Business; provided that, prior to agreeing to pay any such premiums or other payments that would reasonably be expected to
 
 
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result in a requirement for Murphy USA to provide reimbursement under this Section 4.06, Murphy Oil shall, to the extent reasonably practicable, provide Murphy USA with prior notice and a reasonable opportunity to consult with Murphy Oil with respect thereto.  Notwithstanding the foregoing, to the extent that Murphy USA has previously paid a premium (or has been allocated a portion of a premium by Murphy Oil) or satisfied a deductible amount under a Shared Policy, Murphy USA shall not be required to pay such premium pursuant to the foregoing sentence or satisfy such deductible again if Murphy USA makes a claim under such Shared Policy in accordance with this Article 4.
 
Section 4.07 .  Agreement for Waiver of Conflict and Shared Defense.   In the event that a Shared Policy provides coverage for both a member of the Murphy Oil Group, on the one hand, and a member of the Murphy USA Group, on the other hand, relating to the same occurrence, Murphy Oil and Murphy USA agree to defend the relevant matter jointly, provided that in the event there is a conflict of interest which in the reasonable opinion of either party would otherwise prevent the conduct of that joint defense, the parties shall cooperate to pursue coverage under such Shared Policy pursuant to appropriate arrangements (which may require separate counsel) as permitted by such Shared Policy. Nothing in this Section 4.07 will be construed to limit or otherwise alter in any way the indemnity obligations of the parties, including those created by this Agreement, by operation of law or otherwise.
 
Section 4.08 .  Duty to Mitigate.   To the extent that either Murphy Oil or Murphy USA is responsible for the Claims Administration for any claim under any Shared Policy after the Distribution Time, such party shall use its reasonable efforts to mitigate the amount of any Loss which is the subject of such claim under the applicable Shared Policy.
 
Section 4.09 .  Non-Waiver of Rights to Coverage.   An insurance carrier that would otherwise be obligated to pay any claim shall not be relieved of the responsibility with respect thereto, or, solely by virtue of the provisions of this Article 4, have any subrogation rights with respect thereto, it being expressly understood and agreed that no insurance carrier or any Third Party shall be entitled to a benefit (i.e., a benefit such Person would not be entitled to receive had the Distribution not occurred or in the absence of the provisions of this Article 4) by virtue of the provisions hereof.
 
 
ARTICLE 5
Access to Information
 
Section 5.01.   Access to Information .  (a) For a period of six years after the Distribution Date, each Group shall afford promptly the other Group and its agents and, to the extent required by Applicable Law, authorized representatives of any Governmental Authority of competent jurisdiction, reasonable access (which shall include, to the extent reasonably requested, the right to make copies)
 
 
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during normal business hours to its books of account, financial and other records (including accountant’s work papers, to the extent any required consents have been obtained), information, employees and auditors to the extent necessary or useful for such other Group in connection with any audit, investigation, dispute or litigation, complying with their obligations under this Agreement or any Ancillary Agreement, any regulatory proceeding, any regulatory filings, complying with reporting disclosure requirements or any other requirements imposed by any Governmental Authority or any other reasonable business purpose of the Group requesting such access; provided that any such access shall not unreasonably interfere with the conduct of the business of the Group providing such access; provided further that in the event any party reasonably determines that affording any such access to the other party would be commercially detrimental in any material respect or violate any Applicable Law or agreement to which such party or member of its Group is a party, or waive any attorney-client privilege applicable to such party or any member of its Group, the parties shall use reasonable efforts to permit the compliance with such request in a manner that avoids any such harm or consequence.
 
(b)   Without limiting the generality of the foregoing, until the end of the first full Murphy USA fiscal year occurring after the Distribution Date (and for a reasonable period of time afterwards as required for each party to prepare consolidated financial statements or complete a financial statement audit for the fiscal year during which the Distribution Date occurs), each party shall use reasonable efforts to cooperate with the other party’s information requests to enable the other party to meet its timetable for dissemination of its earnings releases and financial statements and enable such other party’s auditors timely to complete their audit of the annual financial statements and review of the quarterly financial statements.
 
Section 5.02.   Litigation Cooperation .  (a) Effective as of the Distribution Time, the applicable member of the Murphy USA Group shall assume and thereafter be responsible for all Liabilities of either Group that may result from the Murphy USA Assumed Actions and, subject to Section 6.04(c), all fees and costs relating to the defense of the Murphy USA Assumed Actions, including attorneys’, accountants’, consultants’ and other professionals’ fees and expenses that have been incurred prior to the Distribution Time and are unpaid as of the Distribution Time, or, that are incurred on or after the Distribution Time. “ Murphy USA Assumed Actions ” means those Actions primarily relating to the Murphy USA Business, including those in which any member of the Murphy Oil Group or any Affiliate of a member of the Murphy Oil Group is a defendant or a party against whom the claim or investigation is directed.  If any member of the Murphy Oil Group has any rights or claims against a Third Party insurer or other Third Party in connection with or relating to any Murphy USA Assumed Action, such member shall, subject to Section 2.05, transfer and assign to the applicable member of the Murphy USA Group all such rights or claims and cooperate with the Murphy USA Group in connection with the enforcement and collection thereof.
 
 
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(b)   Effective as of the Distribution Time, the applicable member of the Murphy Oil Group shall assume and thereafter be responsible for all Liabilities of either Group that may result from the Murphy Oil Assumed Actions and, subject to Section 6.04(c), all fees and costs relating to the defense of the Murphy Oil Assumed Actions, including attorneys’, accountants’, consultants’ and other professionals’ fees and expenses that have been incurred prior to the Distribution Time and are unpaid as of or after the Distribution Time, or, that are incurred on or after the Distribution Time. “ Murphy Oil Assumed Actions ” means those Actions primarily related to the Murphy Oil Business, including those in which any member of the Murphy USA Group or any Affiliate of a member of the Murphy USA Group is a defendant or the party against whom the claim or investigation is directed.  If any member of the Murphy USA Group has any rights or claims against a Third Party insurer or other Third Party in connection with or relating to any Murphy Oil Assumed Action, such member shall, subject to Section 2.05, transfer and assign to the applicable member of the Murphy Oil Group all such rights or claims and cooperate with the Murphy Oil Group in connection with the enforcement and collection thereof.
 
(c)   Each party agrees that at all times from and after the Distribution Time if an Action relating primarily to its Business is commenced by a Third Party naming a member of each Group as defendants thereto, then such action shall be deemed to be a Murphy USA Assumed Action (in the case of an Action primarily related to the Murphy USA Business) or a Murphy Oil Assumed Action (in the case of an Action primarily related to the Murphy Oil Business) and the party as to which the Action primarily relates shall use its reasonable efforts to cause the other party or member of its Group to be removed from such Action.
 
(d)   The parties agree that at all times from and after the Distribution Time, if an Action which does not relate primarily to either party’s Business is commenced by a Third Party naming a member of each Group as a defendant thereto, then the parties shall cooperate and consult to the extent necessary or advisable with respect to such Action.
 
(e)   Each Group shall use reasonable efforts to make available to the other Group and its attorneys, accountants, consultants and other designated representatives, upon written request, its directors, officers, employees and representatives as witnesses, and shall otherwise cooperate with the other Group, to the extent reasonably requested in connection with any Action arising out of either Group’s Business prior to the Distribution Time in which the requesting Group may from time to time be involved.
 
Section 5.03.   Reimbursement .  Each Group providing information or witnesses to the other Group or otherwise incurring any out-of-pocket expense in connection with cooperating under Section 5.01 or Section 5.02 shall be entitled to receive from the recipient thereof, upon the presentation of invoices therefor, payment for all out-of-pocket costs and expenses (including attorney’s fees but
 
 
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excluding reimbursement for general overhead, salary and employee benefits) actually incurred in providing such access, information, witnesses or cooperation.
 
Section 5.04.   Ownership of Information .  All information owned by one party (or a member of its Group) that is provided to the other party (or a member of its Group) under Section 5.01 or Section 5.02 shall be deemed to remain the property of the providing party.  Unless specifically set forth herein or in any Ancillary Agreement, nothing contained in this Agreement shall be construed to grant or confer rights of license or otherwise in any such information.
 
Section 5.05.   Retention of Records .  Except as otherwise required by Applicable Law or agreed to in writing, each party shall, and shall cause the members of its Group to, retain, in accordance with the practice of such party applicable to the retention of its own information as in effect from time to time, any and all information in its possession or control relating to the other Group’s Business.  Neither party shall destroy, or permit the destruction, or otherwise dispose, or permit the disposal, of any such information, subject to such retention practice, unless, prior to such destruction or disposal, the party proposing (or whose Group member is proposing) such destruction or disposal (the “ Disposing Party ”) provides not less than 30 days’ prior written notice to the other party (the “ Receiving Party ”), specifying the information proposed to be destroyed or disposed of and the scheduled date for such destruction or disposal.  If the Receiving Party shall request in writing prior to the scheduled date for such destruction or disposal that any of the information proposed to be destroyed or disposed of be delivered to the Receiving Party, the Disposing Party shall promptly arrange for the delivery of such of the information as was requested at the expense of the Receiving Party; provided that in the event that the Disposing Party reasonably determines that any such provision of information would violate any Applicable Law or agreement to which such party or member of its Group is a party, or waive any attorney-client privilege applicable to such party or any member of its Group, the parties shall use reasonable efforts to permit the prompt compliance with such request in a manner that avoids any such harm or consequence.  Any records or documents that were subject to a litigation hold prior to the Distribution Date must be retained by the applicable party until such party or member of its Group is notified by the other party that the litigation hold is no longer in effect.
 
Section 5.06.   Confidentiality .  Each party acknowledges that it or a member of its Group may have in its possession, and, in connection with this Agreement and the Ancillary Agreements, may receive, Confidential Information of the other party or any member of its Group (including information in the possession of such other party relating to its clients or customers).  Each party shall hold and shall cause its directors, officers, employees, agents, consultants and advisors (“ Representatives ”) and the members of its Group and their Representatives to hold in strict confidence and not to use except as permitted by this Agreement or any Ancillary Agreement all such Confidential Information concerning the other Group unless (a) such party or any of the members of its
 
 
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Group or its or their Representatives is compelled to disclose such Confidential Information by judicial or administrative process or by other requirements of Applicable Law or (b) such Confidential Information can be shown to have been (i) in the public domain through no fault of such party or any of the members of its Group or its or their Representatives, (ii) lawfully acquired after the Distribution Date on a non-confidential basis from other sources not known by such party to be under any legal obligation to keep such information confidential or (iii) developed by such party or any of the members of its Group or its or their Representatives without the use of any Confidential Information of the other Group.  Notwithstanding the foregoing, such party or member of its Group or its or their Representatives may disclose such Confidential Information to the members of its Group and its or their Representatives so long as such Persons are informed by such party of the confidential nature of such Confidential Information and are directed by such party to treat such information confidentially.  The obligation of each party and the members of its Group and its and their Representatives to hold any such Confidential Information in confidence shall be satisfied if they exercise the same level of care with respect to such Confidential Information as they would with respect to their own proprietary information.  If such party or any of a member of its Group or any of its or their Representatives becomes legally compelled to disclose any documents or information subject to this Section 5.06, such party will promptly notify the other party and, upon request, use reasonable efforts to cooperate with the other party’s efforts to seek a protective order or other remedy.  If no such protective order or other remedy is obtained or if the other party waives in writing such party’s compliance with this Section 5.06, such party or the member of its Group or its or their Representatives may furnish only that portion of the information which it concludes, after consultation with counsel, is legally required to be disclosed and will exercise its reasonable efforts to obtain reliable assurance that confidential treatment will be accorded such information.  Each party agrees to be responsible for any breach of this Section 5.06 by it, the members of its Group and its and their Representatives.
 
Section 5.07 .  Privileged Information.   (a) The parties acknowledge that members of the Murphy Oil Group, on the one hand, and members of the Murphy USA Group, on the other hand, may possess documents or other information regarding the other Group that is or may be subject to the attorney-client privilege, the work product doctrine or common interest privilege (collectively, “ Privileges ”; and such documents and other information collectively, the “ Privileged Information ”).  Each party agrees to use reasonable efforts to protect and maintain, and to cause their respective Affiliates to protect and maintain, any applicable claim to Privilege in order to prevent any of the other Group’s Privileged Information from being disclosed or used in a manner inconsistent with such Privilege without the other party’s consent.  Without limiting the generality of the foregoing, a party and its Affiliates shall not, without the other party’s prior written consent, (i) waive any Privilege with respect to any of the other party’s or any member of its Group’s Privileged Information, (ii) fail to defend any Privilege with respect to any such Privileged Information, or (iii) fail to take any
 
 
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other actions reasonably necessary to preserve any Privilege with respect to any such Privileged Information.
 
(b)   Upon receipt by a party or any member of such party’s Group of any subpoena, discovery or other request that calls for the production or disclosure of Privileged Information of the other party or a member of its Group, such party shall promptly notify the other party of the existence of the request and shall provide the other party a reasonable opportunity to review the information and to assert any rights it or a member of its Group may have under this Section 5.07 or otherwise to prevent the production or disclosure of such Privileged Information. Each party agrees that neither it nor any member of its Group will produce or disclose any information that may be covered by a Privilege of the party or a member of its Group under this Section 5.07 unless (i) the other party has provided its written consent to such production or disclosure (which consent shall not be unreasonably withheld) or (ii) a court of competent jurisdiction has entered an order finding that the information is not entitled to protection under any applicable Privilege or otherwise requires disclosure of such information.
 
 
ARTICLE 6
Release; Indemnification
 
Section 6.01 .  Release of Pre-Distribution Claims.
 
(a)   Except (i) as provided in Section 6.01(b) and (ii) as otherwise expressly provided in this Agreement or any Ancillary Agreement, each party hereto does hereby, on behalf of itself and each member of its Group, and each of their successors and assigns, release and forever discharge the other party and the other members of such party’s Group, and their respective successors and assigns, and all Persons who at any time prior to the Distribution Time have been directors, officers or employees of such other party or any member of its Group (in each case, in their respective capacities as such), and their respective heirs, executors, administrators, successors and assigns (collectively, the “ Released Parties ”), from any and all demands, Actions and Liabilities whatsoever, whether at law or in equity (including any right of contribution or any right pursuant to any Environmental Law whether now or hereinafter in effect), whether arising under any contract or agreement, by operation of law or otherwise (and including for the avoidance of doubt, those arising as a result of the negligence, strict liability or any other liability under any theory of law or equity of, or any violation of law by any Released Party), existing or arising from any acts or events occurring or failing to occur or alleged to have occurred or to have failed to occur or any conditions existing or alleged to have existed on or before the Distribution Date, including in connection with the transactions and all other activities to implement the Distribution. Murphy Oil shall cause each of the other members of the Murphy Oil Group to, effective as of the Distribution Time, release and forever discharge each of the Murphy USA Indemnitees as and to the same extent as the release and discharge provided by Murphy Oil pursuant to the
 
 
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foregoing provisions of this Section 6.01(a). Murphy USA shall cause each of the other members of the Murphy USA Group to, effective as of the Distribution Time, release and discharge each of the Murphy Oil Indemnitees as and to the same extent as the release and discharge provided by Murphy USA pursuant to the foregoing provisions of this Section 6.01(a).
 
(b)   Nothing contained in Section 6.01(a) shall impair any right of any Person identified in Section 6.01(a) to enforce this Agreement or any Ancillary Agreement. Nothing contained in Section 6.01(a) shall release or discharge any Person from:
 
(i)   any Liability assumed, transferred, assigned, retained or allocated to that Person in accordance with, or any other Liability of that Person under, this Agreement or any of the Ancillary Agreements;
 
(ii)   any Liability that is expressly specified in this Agreement (including Section 2.06 and Section 2.07) or any Ancillary Agreement to continue after the Distribution Time, but subject to any limitation set forth in this Agreement (including Section 2.06 and Section 2.07) or any Ancillary Agreement relating specifically to such Liability; or
 
(iii)   any Liability the release of which would result in the release of any Person other than a member of the Murphy Oil Group or any related Released Party; provided , however , that the parties hereto agree not to bring or allow their respective Subsidiaries to bring suit against the other party or any related Released Party with respect to any such Liability.
 
In addition, nothing contained in Section 6.01(a) shall release any party or any member of its Group from honoring its existing obligations to indemnify, or advance expenses to, any Person who was a director, officer or employee of such party or any member of its Group, at or prior to the Distribution Time, to the extent such Person was entitled to such indemnification or advancement of expenses pursuant to then-existing obligations; provided , however , that to the extent applicable, Section 6.02 hereof shall determine whether any party shall be required to indemnify the other or a member of its Group in respect of such Liability.
 
(c)   No party hereto shall make, nor permit any member of its Group to make, any claim or demand, or commence any Action asserting any claim or demand, including any claim of contribution or indemnification, against the other party, or any related Released Party, with respect to any Liability released pursuant to Section 6.01(a).
 
(d)   It is the intent of each of the parties hereto by virtue of the provisions of this Section 6.01 to provide for a full and complete release and discharge of all Liabilities existing or arising from all acts and events occurring or
 
 
32
 
 
failing to occur or alleged to have occurred or to have failed to occur and all conditions existing or alleged to have existed on or before the Distribution Date between members of the Murphy Oil Group, on the one hand, and members of the Murphy USA Group, on the other hand, (including any contractual agreements or arrangements existing or alleged to exist between the parties on or before the Distribution Date), except as expressly set forth in Section 6.01(b) or as expressly provided in this Agreement or any Ancillary Agreement. At any time, at the reasonable request of either Murphy Oil or Murphy USA, the other party hereto shall execute and deliver (and cause its respective Subsidiaries to execute and deliver) releases reflecting the provisions hereof.
 
Section 6.02 .  Murphy USA Indemnification of the Murphy Oil Group.   (a) Effective as of and after the Distribution Time, Murphy USA shall indemnify, defend and hold harmless the Murphy Oil Group and the respective directors, officers, employees and Affiliates of each Person in the Murphy Oil Group (the “ Murphy Oil Indemnitees ”) from and against any and all Losses incurred or suffered by any of the Murphy Oil Indemnitees arising out of or in connection with (i) any of the Murphy USA Liabilities, or the failure of any member of the Murphy USA Group to pay, perform or otherwise discharge any of the Murphy USA Liabilities and (ii) any breach by Murphy USA or any member of the Murphy USA Group of this Agreement or any Ancillary Agreement.
 
(b)   Except to the extent set forth in Section 6.03(b), effective as of and after the Distribution Time, Murphy USA shall indemnify, defend and hold harmless each of the Murphy Oil Indemnitees and each Person, if any, who controls any Murphy Oil Indemnitee within the meaning of either Section 15 of the Securities Act or Section 20 of the Exchange Act from and against any and all Losses caused by any untrue statement or alleged untrue statement of a material fact contained in the Form 10 or any amendment thereof, the Information Statement (as amended or supplemented if Murphy USA shall have furnished any amendments or supplements thereto), the Stock Options Registration Statement or any offering memorandum or other marketing materials prepared in connection with the Murphy USA Financing Arrangements or caused by any omission or alleged omission to state therein a material fact necessary to make the statements therein, in the light of the circumstances under which they were made, not misleading.
 
Section 6.03 .  Murphy Oil Indemnification of Murphy USA Group.   (a) Effective as of and after the Distribution Time, Murphy Oil shall indemnify, defend and hold harmless the Murphy USA Group and the respective directors, officers, employees and Affiliates of each Person in the Murphy USA Group (the “ Murphy USA Indemnitees ”) from and against any and all Losses incurred or suffered by any of the Murphy USA Indemnitees and arising out of or in connection with (i) any of the Murphy Oil Liabilities, or the failure of any member of the Murphy Oil Group to pay, perform or otherwise discharge any of the Murphy Oil Liabilities and (ii) any breach by Murphy Oil or any member of the Murphy Oil Group of this Agreement or any Ancillary Agreement.
 
 
33
 

(b)   Effective as of and after the Distribution Time, Murphy Oil shall indemnify, defend and hold harmless each of the Murphy USA Indemnitees and each Person, if any, who controls any Murphy USA Indemnitee within the meaning of either Section 15 of the Securities Act or Section 20 of the Exchange Act from and against any and all Losses caused by any untrue statement or alleged untrue statement of a material fact contained in the Form 10 or any amendment thereof, the Information Statement (as amended or supplemented if Murphy USA shall have furnished any amendments or supplements thereto), the Stock Options Registration Statement or any offering memorandum or other marketing materials prepared in connection with the Murphy USA Financing Arrangements or caused by any omission or alleged omission to state therein a material fact necessary to make the statements therein, in the light of the circumstances under which they were made, not misleading, in each case to the extent, but only to the extent, that such Losses are caused by any such untrue statement or omission or alleged untrue statement or omission based on information furnished by Murphy Oil solely in respect of the Murphy Oil Group, including, for the avoidance of doubt, information contained in the Information Statement under the caption “The Separation – Reasons for the Separation”.
 
Section 6.04.   Procedures .  (a) The party seeking indemnification under Section 6.02 or Section 6.03 (the “ Indemnified Party ”) agrees to give prompt notice to the party against whom indemnity is sought (the “ Indemnifying Party ”) of the assertion of any claim, or the commencement of any suit, action or proceeding (each, a “ Claim ”) in respect of which indemnity may be sought hereunder and will provide the Indemnifying Party such information with respect thereto that the Indemnifying Party may reasonably request. The failure to so notify the Indemnifying Party shall not relieve the Indemnifying Party of its obligations hereunder, except to the extent such failure shall have prejudiced the Indemnifying Party.
 
(b)   The Indemnifying Party shall be entitled to participate in the defense of any Claim asserted by any Third Party (“ Third-Party Claim ”) and, subject to the limitations set forth in this Section 6.04, if it so notifies the Indemnified Party no later than 30 days after receipt of the notice described in Section 6.04(a), shall be entitled to control and appoint lead counsel for such defense, in each case at its expense.  If the Indemnifying Party does not, the Indemnified Party shall have the right to defend or contest such Third-Party Claim through counsel chosen by the Indemnified Party reasonably acceptable to the Indemnifying Party, subject to the provisions of this Section 6.04.  The Indemnified Party shall provide the Indemnifying Party and such counsel with such information regarding such Third-Party Claim as either of them may reasonably request (which request may be general or specific).
 
(c)   If the Indemnifying Party shall assume the control of the defense of any Third-Party Claim in accordance with the provisions of this Section 6.04, (i) the Indemnifying Party shall obtain the prior written consent of the Indemnified Party (which shall not be unreasonably withheld) before entering into any
 
 
34
 
 
settlement of such Third-Party Claim, if the settlement does not release the Indemnified Party from all liabilities and obligations with respect to such Third-Party Claim or the settlement imposes injunctive or other equitable relief against the Indemnified Party or any of its related Indemnitees or is otherwise materially prejudicial to any such Person and (ii) the Indemnified Party shall be entitled to participate in (but not control) the defense of such Third-Party Claim and, at its own expense, to employ separate counsel of its choice for such purpose; provided that in the event of a conflict of interest between the Indemnifying Party and the applicable Indemnified Party, the reasonable fees and expenses of such separate counsel shall be at the Indemnifying Party’s expense.
 
(d)   Each party shall cooperate, and cause their respective Affiliates to cooperate, in the defense or prosecution of any Third-Party Claim and shall furnish or cause to be furnished such records, information and testimony, and attend such conferences, discovery proceedings, hearings, trials or appeals, as may be reasonably requested in connection therewith.
 
(e)   Each Indemnified Party shall use reasonable efforts to collect any amounts available under insurance coverage, or from any other Person alleged to be responsible, for any Losses payable under Section 6.02 or Section 6.03 and the reasonable expenses incurred in connection therewith will be treated as Losses subject to indemnification hereunder.
 
(f)   If any Third Party Claim shall be brought against a member of each Group, then such Action shall be deemed to be a Murphy USA Assumed Action or a Murphy Oil Assumed Action in accordance with Sections 5.02(a) and 5.02(b), to the extent applicable, and the related party shall be deemed to be the Indemnifying Party for the purposes of this Article 6.  In the event of any Action in which the Indemnifying Party is not also named defendant, at the request of either the Indemnified Party or the Indemnifying Party, the parties will use reasonable efforts to substitute the Indemnifying Party or its applicable Affiliate for the named defendant in the Action.
 
Section 6.05 .  Calculation of Indemnification Amount.   Any indemnification amount pursuant to Section 6.02 or Section 6.03 shall be paid (i) net of any amounts recovered by the Indemnified Party under applicable Third Party insurance policies or from any other Third Party alleged to be responsible therefor, and (ii) taking into account any tax benefit actually realized and any tax cost incurred by the Indemnified Party arising from the incurrence or payment of the relevant Losses.  Murphy Oil and Murphy USA agree that, for federal income tax purposes, any payment made pursuant to this Article 6 will be treated as an adjustment to the contributions to and distributions by MOUSA, as applicable, occurring immediately prior to the Distribution.  If the Indemnified Party receives any amounts under applicable Third Party insurance policies, or from any other Third Party alleged to be responsible for any Losses, subsequent to an indemnification payment by the Indemnifying Party in respect thereof, then such Indemnified Party shall promptly reimburse the Indemnifying Party for any
 
 
35
 
payment made by such Indemnifying Party in respect thereof up to the amount received by the Indemnified Party from such Third Party insurance policy or Third Party, as applicable.  The Indemnifying Party shall not be liable for any Losses under Section 6.02 or Section 6.03 to the extent such Losses are special, indirect, incidental, consequential or punitive damages or lost profits (other than such Losses paid to Third Parties).
 
Section 6.06.   Contribution .  If for any reason the indemnification provided for in Section 6.02 or Section 6.03 is unavailable to any Indemnified Party, or insufficient to hold it harmless, then the Indemnifying Party shall contribute to the amount paid or payable by such Indemnified Party as a result of such Losses in such proportion as is appropriate to reflect the relative fault of the Murphy Oil Group, on the one hand, and the Murphy USA Group, on the other hand, in connection with the conduct, statement or omission that resulted in such Losses.  In case of any Losses arising out of or related to information contained in the Form 10 or any amendment thereof, the Information Statement (as amended or supplemented if Murphy USA shall have furnished any amendments or supplements thereto), the Stock Options Registration Statement or any offering memorandum or other marketing materials prepared in connection with the Murphy USA Financing Arrangements, the relative fault of the Murphy Oil Group, on the one hand, and the Murphy USA Group, on the other hand, shall be determined by reference to, among other things, whether the untrue statement or alleged untrue statement of a material fact or the omission or alleged omission of a material fact relates to information supplied by Murphy Oil or Murphy USA.
 
Section 6.07.   Non-Exclusivity of Remedies .  Subject to Section 6.01, the remedies provided for in this Article 6 are not exclusive and shall not limit any rights or remedies which may otherwise be available to any Indemnified Party at law or in equity; provided that the procedures set forth in Sections 6.04 and 6.05 shall be the exclusive procedures governing any indemnity action brought under this Agreement.
 
Section 6.08.   Survival of Indemnities.   The rights and obligations of any Indemnified Party or Indemnifying Party under this Article 6 shall survive the sale or other transfer of any party of any of its assets, business or liabilities.
 
 
ARTICLE 7
Miscellaneous
 
Section 7.01 .  Notices.   Any notice, instruction, direction or demand under the terms of this Agreement required to be in writing shall be duly given upon delivery, if delivered by hand, facsimile transmission, or mail, to the following addresses:
 
 
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If to Murphy Oil to:
 
Murphy Oil Corporation
200 Peach Street
P.O. Box 7000
El Dorado, Arkansas 71731
Attn: Walter K. Compton
Facsimile: 870-864-6489

with a copy to:

Davis Polk & Wardwell LLP
450 Lexington Avenue
New York, New York 10017
Attn: William L. Taylor
Facsimile: (212) 701-5800
 
If to Murphy USA to:
 
Murphy USA Inc.
200 Peach Street
P.O. Box 7300
El Dorado, Arkansas 71731
Attn: John A. Moore
Facsimile: 870-881-6893
 
with a copy to:
 
Davis Polk & Wardwell LLP
450 Lexington Avenue
New York, New York 10017
Attn: William L. Taylor
Facsimile: (212) 701-5800

or such other address or facsimile number as such party may hereafter specify for the purpose by notice to the other party hereto.  All such notices, requests and other communications shall be deemed received on the date of receipt by the recipient thereof if received prior to 5:00 p.m. in the place of receipt and such day is a Business Day in the place of receipt.  Otherwise, any such notice, request or communication shall be deemed not to have been received until the next succeeding Business Day in the place of receipt.
 
Section 7.02.   Amendments; No Waivers .  (a) Any provision of this Agreement may be amended or waived if, and only if, such amendment or waiver is in writing and is signed, in the case of an amendment, by Murphy Oil and Murphy USA, or in the case of a waiver, by the party against whom the waiver is to be effective.
 
 
37
 

(b)   No failure or delay by any party in exercising any right, power or privilege hereunder shall operate as a waiver thereof nor shall any single or partial exercise thereof preclude any other or further exercise thereof or the exercise of any other right, power or privilege.   The rights and remedies herein provided shall be cumulative and not exclusive of any rights or remedies provided by Applicable Law.
 
Section 7.03.   Expenses .  Except as specifically provided otherwise in this Agreement or any Ancillary Agreement, all costs and expenses incurred by the Murphy Oil Group in connection with the Distribution and related transactions shall be paid by Murphy Oil, and all costs and expenses incurred by the Murphy USA Group in connection with the Distribution and related transactions shall be paid by Murphy USA.
 
Section 7.04.   Successors and Assigns .  The provisions of this Agreement shall be binding upon and inure to the benefit of the parties hereto and their respective successors and permitted assigns; provided that neither party may assign, delegate or otherwise transfer any of its rights or obligations under this Agreement without the consent of the other party hereto.  If any party or any of its successors or permitted assigns (i) shall consolidate with or merge into any other Person and shall not be the continuing or surviving corporation or entity of such consolidation or merger or (ii) shall transfer all or substantially all of its properties and assets to any Person, then, and in each such case, proper provisions shall be made so that the successors and assigns of such party shall assume all of the obligations of such party under the Distribution Documents.
 
Section 7.05.   Governing Law .  This Agreement shall be governed by and construed in accordance with the law of the State of Arkansas, without regard to the conflicts of law rules of such state.
 
Section 7.06.   Counterparts; Effectiveness; Third-Party Beneficiaries .  This Agreement may be signed in any number of counterparts, each of which shall be an original, with the same effect as if the signatures thereto and hereto were upon the same instrument.  This Agreement shall become effective when each party hereto shall have received a counterpart hereof signed by the other party hereto.  Until and unless each party has received a counterpart hereof signed by the other party hereto, this Agreement shall have no effect and no party shall have any right or obligation hereunder (whether by virtue of any other oral or written agreement or other communication).  Except for the indemnification and release provisions of Article 6, neither this Agreement nor any provision hereof is intended to confer any rights, benefits, remedies, obligations, or liabilities hereunder upon any Person other than the parties hereto and their respective successors and permitted assigns.
 
Section 7.07.   Entire Agreement .  This Agreement and the other Distribution Documents constitute the entire understanding of the parties with respect to the subject matter hereof and thereof and supersede all prior
 
 
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agreements, understandings and negotiations, both written and oral, between the parties with respect to the subject matter hereof and thereof.  No representation, inducement, promise, understanding, condition or warranty not set forth herein or in the other Distribution Documents has been made or relied upon by any party hereto or any member of their Group with respect to the transactions contemplated by the Distribution Documents.  To the extent that the provisions of this Agreement are inconsistent with the provisions of any other Distribution Document, the provisions of such other Distribution Document shall prevail.
 
Section 7.08.   Tax Matters .  Except as otherwise expressly provided herein, this Agreement shall not govern tax matters, which shall be exclusively governed by the Tax Matters Agreement and the Employee Matters Agreement.
 
Section 7.09.   Jurisdiction .  The parties hereto agree that any suit, action or proceeding seeking to enforce any provision of, or based on any matter arising out of or in connection with, this Agreement or the transactions contemplated hereby shall be brought in the United States District Court for the Western District of Arkansas, El Dorado Division or any Arkansas State court sitting in El Dorado, Arkansas, so long as one of such courts shall have subject matter jurisdiction over such suit, action or proceeding, and that any cause of action arising out of this Agreement shall be deemed to have arisen from the transaction of business in the State of Arkansas, and each of the parties hereby irrevocably consents to the exclusive jurisdiction of such courts (and of the appropriate appellate courts therefrom) in any such suit, action or proceeding and irrevocably waives, to the fullest extent permitted by law, any objection that it may now or hereafter have to the laying of the venue of any such suit, action or proceeding in any such court or that any such suit, action or proceeding brought in any such court has been brought in an inconvenient forum.  Process in any such suit, action or proceeding may be served on any party anywhere in the world, whether within or outside of the jurisdiction of any such court.  Without limiting the foregoing, each party agrees that service of process on such party as provided in Section 7.01 shall be deemed effective service of process on such party.
 
Section 7.10 .  WAIVER OF JURY TRIAL.   EACH OF THE PARTIES HERETO HEREBY IRREVOCABLY WAIVES ANY AND ALL RIGHT TO TRIAL BY JURY IN ANY LEGAL PROCEEDING ARISING OUT OF OR RELATED TO THIS AGREEMENT OR THE TRANSACTIONS CONTEMPLATED HEREBY.
 
Section 7.11.   Termination .  Notwithstanding any provision of this Agreement to the contrary, the Murphy Oil Board of Directors may, in its sole discretion and without the approval of Murphy USA or any other Person, at any time prior to the Distribution terminate this Agreement and/or abandon the Distribution, whether or not it has theretofore approved this Agreement and/or the Distribution.  In the event this Agreement is terminated pursuant to the preceding sentence, this Agreement shall forthwith become void and neither party nor any of
 
 
39
 
its directors or officers shall have any liability or further obligation to the other party or any other Person by reason of this Agreement.
 
Section 7.12.   Severability .  If any one or more of the provisions contained in this Agreement should be declared invalid, illegal or unenforceable in any respect, the validity, legality and enforceability of the remaining provisions contained in this Agreement shall not in any way be affected or impaired thereby so long as the economic or legal substance of the transactions contemplated hereby is not affected in any manner materially adverse to any party.  Upon such a declaration, the parties shall modify this Agreement so as to effect the original intent of the parties as closely as possible in an acceptable manner so that the transactions contemplated hereby are consummated as originally contemplated to the fullest extent possible.
 
Section 7.13.   Survival .  All covenants and agreements of the parties contained in this Agreement shall survive the Distribution Date indefinitely, unless a specific survival or other applicable period is expressly set forth herein.
 
Section 7.14.   Captions .  The captions herein are included for convenience of reference only and shall be ignored in the construction or interpretation hereof.
 
Section 7.15 .  Interpretation.   In the event an ambiguity or question of intent or interpretation arises, this Agreement shall be construed as if drafted jointly by the parties, and no presumption or burden of proof shall arise favoring or disfavoring any party by virtue of its authorship of any of the provisions of this Agreement.
 
Section 7.16.   Specific Performance .  Each party to this Agreement acknowledges and agrees that damages for a breach or threatened breach of any of the provisions of this Agreement would be inadequate and irreparable harm would occur.  In recognition of this fact, each party agrees that, if there is a breach or threatened breach, in addition to any damages, the other nonbreaching party to this Agreement, without posting any bond, shall be entitled to seek and obtain equitable relief in the form of specific performance, temporary restraining order, temporary or permanent injunction, attachment, or any other equitable remedy which may then be available to obligate the breaching party (i) to perform its obligations under this Agreement or (ii) if the breaching party is unable, for whatever reason, to perform those obligations, to take any other actions as are necessary, advisable or appropriate to give the other party to this Agreement the economic effect which comes as close as possible to the performance of those obligations (including, but not limited to, transferring, or granting liens on, the assets of the breaching party to secure the performance by the breaching party of those obligations).
 
 
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Section 7.17.   Performance .  Each party shall cause to be performed all actions, agreements and obligations set forth herein to be performed by any member of such party’s Group.
 
 
[ Remainder of page intentionally left blank ]
 
 
41
 
IN WITNESS WHEREOF the parties hereto have caused this Agreement to be duly executed by their respective authorized officers as of the date first above written.
 
MURPHY OIL CORPORATION
 
 
 
By:
/s/ Walter K. Compton
 
 
Name:
Walter K. Compton
 
 
Title:
Senior Vice President and General Counsel
 

 
MURPHY USA INC.
 
 
 
By:
/s/ John A. Moore
 
 
Name:
John A. Moore
 
 
Title:
Senior Vice President, General Counsel and Secretary
 

 





















(Signature Page to Separation and Distribution Agreement)
 
 
 
 
 
SCHEDULE 1
 
RESTRUCTURING PLAN
 

 
Set forth below is a description of the restructuring transactions that, except as the parties may otherwise agree, are intended to take place in the order set forth below prior to the Distribution.  Prior to the Distribution, each of the entities described below is wholly owned, directly or indirectly, by Murphy Oil.
 
 
1.
Murphy Oil will contribute to MOUSA the following assets (which are referred to collectively as the “ Murphy USA Contributed Assets ”) and any related liabilities:
 
 
i.
the real estate located at 422 North Washington Avenue, El Dorado, Arkansas and appurtenant furniture, fixtures and personal property;
 
 
ii.
(A) the real estate located at 200 Peach Street, El Dorado, Arkansas (but excluding, for the avoidance of doubt, lots 2 and 3 of Block 9, Original Town of El Dorado) and (B) all appurtenant furniture, fixtures and personal property other than (1) furniture and personal property located on the first and fourth floors of that property and (2) fixtures, furniture and personal property set forth on Schedule 1- A ;
 
 
iii.
a Cessna Citation 560XL aircraft (tail# N370M, acquired July 2005); and
 
 
iv.
licenses associated with the SolArc and the PDI information systems and hardware primarily related thereto.
 
 
2.
MOUSA will liquidate the following subsidiaries by merging each with and into MOUSA: (i) Murphy Latin America Refining & Marketing, Inc., a Delaware corporation, (ii) Murphy LOOP, Inc., a Delaware corporation and (iii) Murphy Lot Holdings, LLC, a Delaware limited liability company.
 
 
3.
MOUSA will transfer and assign to Murphy Oil all of the Assigned Marks (as such term is defined in the Trademark Assignment Agreement).
 
 
4.
MOUSA will distribute to Murphy Oil (i) a cash dividend of $650 million and (ii) all of the stock of (A) Murphy Gas Gathering Inc., a Delaware corporation, (B) Arkansas Oil Company, a Delaware Corporation and (C) Murphy Crude Oil Marketing, Inc., a Delaware corporation.
 
 
5.
Murphy Oil will contribute all of the stock of MOUSA to Murphy USA in exchange for a number of shares of Murphy USA
 
 
 
 
 
 
 
Common Stock equal to the number of shares to be distributed by Murphy Oil in the Distribution less the number of shares of Murphy USA Common Stock held by Murphy Oil immediately prior to the contribution.
 

 
 
 
 
Schedule 1-A
 
MURPHY OIL OWNED FIXTURES, FURNITURE AND EQUIPMENT

1.  All gallery fixtures on the 1 st floor.
 
2.  Rugs with the Rowel logo on the 1 st floor.
 
3.  Map on 1 st floor wall.
 
4.  Cabinet and monitor next to map on 1 st floor wall.
 
5.  Annual report display.
 
6.  Corporate award display on 1 st floor.
 
7.  Display outside executive suite on 4 th floor with monitor for executive book.
 
8.  Ship model display outside executive suite on 4 th floor.
 
9.  Graphic panels on walls throughout the building including murals on 1 st floor.
 
10.  All printer, computer, fax and phone equipment used by MOC as of the Effective Date.
 
11.  All servers, server racks and networking gear, in MOC’s computer room as of the Effective Date.
 
12.  The IT safe located in the room outside MOC’s computer room.
 
13.  IT closet switches located on the 1 st and 4 th floors.
 
14.  Alignment tools used by MOC’s administrative services group.
 
15.  All ECCR supplies and equipment including cameras and TVs.
 
16.  TV and stand in the office service area.
 
17.  Contents of library that is located in the administration area.
 
18.  Computer, printer, camera and supplies used to produce employee badges.
 
19.  Vinyl Printer and supplies.
 
20.  4 stainless trash cans with MOC’s logo.
 
21.  All pool cars.
 
22.  All printers, sealers, safe and other equipment located in MOC’s Treasury equipment room.
 
23.  All furniture, displays, audio and visual equipment including wall map located in the executive suite on the 4 th floor.
 
24.  4 round benches with Rowel logo located on the 3 rd and 4 th floor.
 
 
 
 
SCHEDULE 2.07(B)

INTERCOMPANY AGREEMENTS

1.
Agreements entered into to effect the Restructuring

2.
Lease Agreement for 214 N. Jefferson Street, El Dorado, Arkansas between Murphy Oil and MOUSA

3.
Assignment Agreement dated as of August 29, 2013 between Murphy Oil and MOUSA

4.
Agreements entered into to effect the transactions contemplated hereby

 
 
 
EXHIBIT A
 
EMPLOYEE MATTERS AGREEMENT
 
 
A-1
 
EXHIBIT B
 
TAX MATTERS AGREEMENT
 
 
B-1
 
EXHIBIT C
 
TRANSITION SERVICES AGREEMENT
 
 
C-1
 
EXHIBIT D
 
TRADEMARK ASSIGNMENT AGREEMENT
 
 
D-1
 
EXHIBIT E
 
TRADEMARK LICENSE AGREEMENT
 
 
E-1
 
EXHIBIT F
 
PEACH STREET LEASE AGREEMENT
 
 
F-1
 
EXHIBIT G
 
AIRCRAFT MAINTENANCE LABOR POOLING AGREEMENT
 
 
G-1
 
EXHIBIT H
 
AIRPLANE INTERCHANGE AGREEMENT
 
 
H-1
 
EXHIBIT I
 
HANGAR RENTAL AGREEMENT
 

 
 
 
I-1
 
Exhibit 10.1





TAX MATTERS AGREEMENT
 
between
 
MURPHY OIL CORPORATION ,
on behalf of itself
and the members
of the Distributing Group,
 
 
and
 
 
Murphy USA Inc. ,
on behalf of itself
and the members
of the Controlled Group
 
 
Dated as of August 30, 2013
 
 
 
 
 
 
 
 
TAX MATTERS AGREEMENT
 
This Agreement is entered into as of the 30th day of August, 2013 between Murphy Oil Corporation (“ Distributing ”), a Delaware corporation, on behalf of itself and the members of the Distributing Group, as defined below, and Murphy USA Inc. (“ Controlled ”), a Delaware corporation, on behalf of itself and the members of the Controlled Group, as defined below.
 
WITNESSETH:
 
WHEREAS, pursuant to the tax laws of various jurisdictions, certain members of the Controlled Group presently file certain tax returns on an affiliated, consolidated, combined, unitary, fiscal unity or other, group basis (including as permitted by Section 1501 of the Internal Revenue Code of 1986, as amended (the “ Code ”)) with certain members of the Distributing Group;
 
WHEREAS, Distributing and Controlled have entered into a Separation and Distribution Agreement, dated as of August 30, 2013 (the “ Distribution Agreement ”), providing for the distribution by Distributing to its shareholders of all of the common stock of Controlled that is held by Distributing (the “ Distribution ”) and certain other matters;
 
WHEREAS, Distributing and Controlled desire to set forth their agreement on the rights and obligations of Distributing, Controlled and the members of the Distributing Group and the Controlled Group, respectively, with respect to (A) the handling and allocation of federal, state, local and foreign taxes incurred in taxable periods beginning prior to the Distribution Date, as defined below, (B) taxes resulting from the Distribution and transactions effected in connection with the Distribution and (C) various other tax matters;
 
NOW, THEREFORE, in consideration of the mutual covenants and agreements hereinafter set forth, the parties agree as follows:
 
SECTION 1 .    Definitions.
 
(a)      As used in this Agreement:
 
“ Active Business ” shall mean an active trade or business relied upon to satisfy the requirements of Section 355 of the Code as set forth in the Ruling Request, as defined below, and in the opinion being delivered by counsel in connection with the Distribution.
 
“ After-Tax Amount ” shall mean an additional amount necessary to reflect the hypothetical Tax consequences of the receipt or accrual of any payment, using the maximum statutory rate (or rates, in the case of an item that affects more than one Tax) applicable to the recipient of such payment for the relevant Taxable year, reflecting, for example, the effect of the deductions available for interest paid or accrued and for Taxes, such as state and local income Taxes.
 
 
 
 
 
“ AMT ” shall mean the alternative minimum tax, within the meaning of Section 55 of the Code.
 
“ Closing of the Books Method ” shall mean the apportionment of items between portions of a Taxable period based on a closing of the books and records on the Distribution Date (as if the Distribution Date were the end of the Taxable period), provided that any items not susceptible to such apportionment shall be apportioned on the basis of elapsed days during the relevant portion of the Taxable period.
 
“ Code ” shall have the meaning ascribed thereto in the recital.
 
“ Combined Apportionment Factor ” shall mean the apportionment factor reflected on the applicable consolidated, combined or unitary state or local income Tax return and utilized in computing the combined, consolidated or unitary state or local income Tax liability.
 
“ Consolidated Federal Return ” shall mean a Pre-Deconsolidation Period Return filed in respect of federal income Taxes by a Consolidated Group.
 
“ Consolidated Group ” shall mean any group consisting of (i) at least one member of the Distributing Group that filed (or will file) any Pre-Deconsolidation Period Return that reflects the income, assets or operations of any member of the Controlled Group or (ii) at least one member of the Controlled Group that filed (or will file) any Pre-Deconsolidation Period Return that reflects the income, assets or operations of any member of the Distributing Group.
 
“ Consolidated State Return ” shall mean a Pre-Deconsolidation Period Return filed in respect of state or local income Taxes by a Consolidated Group, including, for the avoidance of doubt, any combined state income tax return.
 
“ Controlled ” shall have the meaning ascribed thereto in the recital.
 
“ Controlled Group ” shall mean Controlled and each of its direct and indirect Subsidiaries immediately after the Distribution, including any predecessors thereto.
 
“ Deconsolidation Date ” shall mean with respect to a Return the date on which any member of the Controlled Group is no longer consolidated, combined or in a unitary relationship (as the case may be) with any member of the Distributing Group in filing such Return.
 
“ Distributing ” shall have the meaning ascribed thereto in the recital.
 
“ Distributing Assumed Liability Payment ” means a payment by any member of the Distributing Group in respect of a Murphy Oil Liability, as defined in the Distribution Agreement.
 
“ Distributing Group ” shall mean Distributing and each of its direct and indirect Subsidiaries other than those entities comprising the Controlled Group.
 
“ Distribution ” shall have the meaning ascribed thereto in the recital.
 
 
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“ Distribution Agreement ” shall have the meaning ascribed thereto in the recital.
 
“ Distribution Date ” shall mean the date on which the Distribution occurs.
 
“ Ethanol Facility Disposition ” shall mean the sale or other disposition of (i) any assets of the ethanol production facilities located in Hankinson, North Dakota and Hereford, Texas or (ii) the stock or other interests of any entity that holds only such assets, and shall include the discontinuation of the operations of any such facility.
 
“ Equity Securities ” shall mean any stock or other securities treated as equity for tax purposes, options, warrants, rights, convertible debt, or any other instrument or security that affords any Person the right, whether conditional or otherwise, to acquire stock or to be paid an amount determined by reference to the value of stock.
 
“ Final Determination ” shall mean (i) with respect to federal income Taxes, (A) a “determination” as defined in Section 1313(a) of the Code, or (B) execution of an IRS Form 870-AD (or any successor form thereto), as a final resolution of Tax liability for any Taxable period, except that a Form 870-AD (or successor form thereto) that reserves the right of the taxpayer to file a claim for Refund or the right of the IRS to assert a further deficiency shall not constitute a Final Determination with respect to the item or items so reserved; (ii) with respect to Taxes other than federal income Taxes, any final determination of liability in respect of a Tax that, under applicable law, is not subject to further appeal, review or modification through proceedings or otherwise; (iii) with respect to any Tax, any final disposition by reason of the expiration of the applicable statute of limitations; or (iv) with respect to any Tax, the payment of Tax by any member of the Distributing Group or the Controlled Group, whichever is responsible for payment of such Tax under applicable law, with respect to any item disallowed or adjusted by a Taxing Authority, provided that the provisions of Section 13 hereof have been complied with, or, if such section is inapplicable, that the party responsible under the terms of this Agreement for such Tax is notified by the party paying such Tax that it has determined that no action should be taken to recoup such disallowed item, and the other party agrees with such determination.
 
“ Group ” shall mean the Controlled Group or the Distributing Group, as appropriate.
 
“ IRS ” shall mean the Internal Revenue Service.
 
“ Loss Group ” shall mean a Group that incurs a Separate Group Taxable Loss for the relevant Taxable period.
 
“ Person ” shall have the meaning ascribed to it in Section 7701(a)(1) of the Code.
 
“ Post-Deconsolidation Period ” shall mean any Taxable period (or portion thereof) beginning after the Deconsolidation Date.
 
“ Pre-Deconsolidation Period ” shall mean any Taxable period (or portion thereof) ending on or before the Deconsolidation Date.
 
 
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“ Refund ” shall mean any refund of Taxes, including any reduction in Taxes by means of a credit, offset or otherwise.
 
“ Return ” shall mean any Tax return, statement, report, form, election, claim or surrender (including estimated Tax returns and reports, extension requests and forms, and information returns and reports) required to be filed with any Taxing Authority.
 
“ Ruling Request ” shall mean the private letter ruling request, dated December 12, 2012, together with all attachments, exhibits and supplements thereto submitted by Distributing to the IRS.
 
“ Separate Group Taxable Income ” shall mean, with respect to a Group, such Group’s Taxable income computed as if such Group were a separate consolidated, combined or unitary group, and applying the Tax principles, including limitations and carryovers (excluding limits for charitable contributions and dividends received deduction, and accounting for deferred intercompany transactions consistent with the deferral and recognition rules of Treasury Regulations Section 1.1502-13 (or any successor rule) or analogous state or local rule), that would have been applicable to such Group had such Group never been part of the Consolidated Group or any other consolidated, combined or unitary group.  In the context of state and local Tax, Separate Group Taxable Income shall be computed prior to the application of any apportionment formula.
 
“ Separate Group Tax Liability ” shall mean (i) with respect to federal income Taxes, the product of a Group’s Separate Group Taxable Income, computed for federal income Tax purposes, and the highest federal income Tax rate imposed under the Code on the Taxable income of a corporation for the relevant Taxable period (or portion thereof), reduced by any Tax credits that the Group would be able to use if it were calculating its federal income Tax liability on a stand-alone basis and (ii) with respect to the Taxes of a particular state or locality, the product of the Group’s Separate Group Taxable Income and the Combined Apportionment Factor and the State Tax Rate, reduced by any applicable Tax credits that the Group would be able to use if it were calculating its Tax liability on a stand-alone basis.
 
“ Separate Group Taxable Loss ” shall mean, with respect to a Group, such Group’s Taxable loss computed as if such Group were a separate consolidated, combined or unitary group, and applying the Tax principles, including limitations and carryovers (excluding limits for charitable contributions and dividends received deduction, and accounting for deferred intercompany transactions consistent with the deferral and recognition rules of Treasury Regulations Section 1.1502-13 (or any successor rule) or analogous state or local rule), that would have been applicable to such Group had such Group never been part of the Consolidated Group or any other consolidated, combined or unitary group.  In the context of state and local Tax, Separate Group Taxable Loss shall be computed prior to the application of any apportionment formula.
 
“ State Tax Rate ” shall mean, with respect to a particular state or locality, the highest applicable Tax rate imposed under applicable law on the Separate Group Taxable Income of the Group for the relevant Taxable period (or portion thereof).
 
 
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“ Subsidiary ” of any Person shall mean any corporation, partnership or other entity directly or indirectly owned more than 50 percent (by vote or value) by such Person.
 
“ Tax ” (and the correlative meaning, “ Taxes, ” “ Taxing ” and “ Taxable ”) shall mean (A) any tax imposed under Subtitle A of the Code, or any net income, gross income, gross receipts, alternative or add-on minimum, sales, use, business and occupation, value-added, trade, goods and services, ad valorem, franchise, profits, license, business royalty, withholding, payroll, employment, capital, excise, transfer, recording, severance, stamp, occupation, premium, property, asset, real estate acquisition, environmental, custom duty, or other tax, governmental fee or other like assessment or charge of any kind whatsoever, together with any interest and any penalty, addition to tax or additional amount imposed by a Taxing Authority; or (B) any liability of a member of the Distributing Group or the Controlled Group for the payment of any amounts described in clause (A) as a result of any express or implied obligation to indemnify any other Person.
 
“ Tax Proceeding ” shall mean any Tax audit, dispute or proceeding (whether administrative, judicial or contractual).
 
“ Taxing Authority ” shall mean any governmental authority (domestic or foreign), including, without limitation, any state, municipality, political subdivision or governmental agency, responsible for the imposition of any Tax.
 
(b)      All capitalized terms used but not defined herein shall have the same meanings as in the Distribution Agreement.  Any term used in this Agreement which is not defined in this Agreement or the Distribution Agreement shall, to the extent the context requires, have the meaning assigned to it in the Code or the applicable Treasury regulations thereunder (as interpreted in administrative pronouncements and judicial decisions), in comparable provisions of applicable law or in the Ruling Request.
 
SECTION 2 .  Sole Tax Sharing Agreement.   Any and all existing Tax sharing agreements or arrangements, written or unwritten, between any member of the Distributing Group, on the one hand, and any member of the Controlled Group, on the other hand, shall be or shall have been terminated on or before the Distribution Date. Following the Distribution, neither the members of the Controlled Group nor the members of the Distributing Group shall have any further rights or liabilities thereunder, and this Agreement shall be the sole Tax sharing agreements between the members of the Controlled Group, on the one hand, and the members of the Distributing Group, on the other hand. Distributing and Controlled shall act in good faith in the performance of this Agreement.
 
SECTION 3 .  Federal Income Taxes.
 
(a)       Return Filing .
 
(i)      Distributing shall prepare and file, or cause to be prepared and filed, Consolidated Federal Returns for which the Consolidated Group is required or permitted to file a Consolidated Federal Return using, inter alia, information previously provided by Controlled. Controlled shall maintain all necessary information to file a Consolidated
 
 
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Federal Return and shall provide Distributing with all such necessary information in accordance with past practice and in no event later than 45 days before such return is due.  Each member of the Consolidated Group shall execute and file such consents, elections and other documents as may be required or appropriate for the filing of such Consolidated Federal Returns.
 
(ii)      To the extent that Controlled or any member of the Controlled Group is included in any Consolidated Federal Return for a Taxable period that includes the Distribution Date, Distributing shall include in such Consolidated Federal Return the results of Controlled or of the member of the Controlled Group on the basis of the Closing of the Books Method.
 
(iii)                 Subject to the provisions of Sections 3(b),   6 and 7 , Distributing shall pay, or cause to be paid, any and all federal income Taxes due or required to be paid with respect to, or required to be reported on, any such Consolidated Federal Return filed in accordance with Section 3(a)(i).
 
(b)       Allocated Tax Charge .
 
(i)      Distributing shall be responsible for calculating the Separate Group Taxable Income or Separate Group Taxable Loss, as the case may be, for each Group included in a Consolidated Federal Return.  Each Group included in a Consolidated Federal Return shall bear its Separate Group Tax Liability, if any.  For purposes of such calculation, the deduction for state and local Taxes to which each Group is entitled will be determined in a manner consistent with Section 4 of this Agreement.
 
(ii)      If the Controlled Group included in the Consolidated Federal Return incurs a Separate Group Taxable Loss, Distributing shall pay to the Controlled Group (A) the amount, if any, by which the federal income Taxes payable with respect to the Consolidated Federal Return are reduced by reason of the Controlled Group’s Separate Group Taxable Loss and (B) any Refund of federal income Taxes or other federal income Tax benefit attributable to such Separate Group Taxable Loss that is actually realized, in each case as determined by Distributing in its sole discretion. To the extent the Controlled Group receives a payment from Distributing in respect of a Separate Company Taxable Loss pursuant to this Section 3(b)(ii), such loss shall not be carried forward or carried back by the Controlled Group for purposes of determining Separate Group Taxable Income or Separate Group Taxable Loss in any other Taxable period (or portion thereof). To the extent the Controlled Group does not receive a payment from Distributing in respect of a Separate Group Taxable Loss pursuant to this Section 3(b)(ii), such loss may be carried forward or carried back, subject to any applicable limitation with respect to carry forward or carry back losses, by the Controlled Group for purposes of determining Separate Group Taxable Income or Separate Group Taxable Loss in another Taxable period (or portion thereof).
 
(iii)                 In the event a Consolidated Group incurs an AMT liability with respect to any Taxable period (or portion thereof), Distributing shall be solely responsible for such
 
 
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liability. Any Tax benefit arising from the utilization of a consolidated federal AMT credit shall be for the sole benefit of Distributing.
 
SECTION 4 .  State and Local Income Taxes.
 
(a)       Return Filing .
 
(i)      Distributing shall prepare and file, or cause to be prepared and filed, Consolidated State Returns for which the Consolidated Group is required or permitted to file a Consolidated State Return using, inter alia, information previously provided by Controlled. Controlled shall maintain all necessary information to file a Consolidated State Return and shall provide Distributing with all such necessary information in accordance with past practice and in no event later than 45 days before such return is due.  Each member of the Consolidated Group shall execute and file such consents, elections and other documents as may be required or appropriate for the filing of such Consolidated State Returns.
 
(ii)      To the extent that Controlled or any member of the Controlled Group is included in any Consolidated State Return for a Taxable period that includes the Distribution Date, Distributing shall include in such Consolidated State Return the results of Controlled or of the member of the Controlled Group on the basis of the Closing of the Books Method.
 
(iii)                 Subject to the provisions of Sections 4(b) , 6 and 7 , Distributing shall pay, or cause to be paid, any and all income Taxes due or required to be paid with respect to, or required to be reported on, any such Consolidated State Return filed in accordance with Section 4(a)(i).
 
(iv)                 In the event a Consolidated State Return is not filed, each relevant member of the Distributing Group and Controlled Group shall be responsible for (A) filing its own Return as a separate entity in respect of state and local income Taxes, or its own Return in respect of state and local income Taxes relating to a group consisting solely of members of the Distributing Group or members of the Controlled Group, as the case may be, on behalf of the separate group, in each case including requests for extension, as if this Agreement were not in effect and (B) making Tax payments (including estimated Tax payments, if necessary). Each such member filing a Return as a separate entity pursuant to this Section 4(a)(iv) shall be entitled to any Tax benefit and shall be liable for any Tax burden resulting from the filing of such separate Return.
 
(b)      Allocated Tax Charge.
 
(i)      Distributing shall be responsible for calculating the Separate Group Taxable Income or Separate Group Taxable Loss, as the case may be, for each Group included in a Consolidated State Return.  Each Group included in a Consolidated State Return shall bear its Separate Group Tax Liability, if any.
 
 
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(ii)      If the Controlled Group included in a Consolidated State Return incurs a Separate Group Taxable Loss, Distributing shall pay, or shall cause to be paid, to the Controlled Group (A) the amount, if any, by which the state or local income Taxes reflected on such Return are reduced by reason of the Controlled Group’s Separate Group Taxable Loss and (B) any Refund of state or local income Taxes or other state or local income Tax benefit attributable to such Separate Group Taxable Loss that is actually realized, in each case as determined by Distributing in its sole discretion.  To the extent the Controlled Group receives a payment from Distributing in respect of a Separate Group Taxable Loss pursuant to this Section 4(b)(ii), such loss shall not be carried forward or carried back by the Controlled Group for purposes of determining Separate Group Taxable Income or Separate Group Taxable Loss in any other Taxable period (or portion thereof).  To the extent the Controlled Group does not receive a payment from Distributing in respect of a Separate Group Taxable Loss pursuant to this Section 4(b)(ii), such loss may be carried forward or carried back, subject to any applicable limitation with respect to carry forward or carry back losses, by the Controlled Group for purposes of determining Separate Group Taxable Income or Separate Group Taxable Loss in another Taxable period (or portion thereof).
 
SECTION 5 .  Foreign Income Tax.   With respect to the calculation of each Group’s Tax liability for foreign Taxes, the principles set forth in Section 4 shall apply mutatis mutandis .
 
SECTION 6 .  Estimated Tax Payments.
 
(a)      If estimated Tax payments are required with respect to a Consolidated Group for a Pre-Deconsolidation Period, Distributing shall pay, or cause to be paid, to the IRS, and/or to each relevant state, local and foreign Taxing Authority, on behalf of the members of such Consolidated Group, those estimated Tax payments that are due on the relevant dates prescribed by applicable law.  On March 15 (or the proper due date under applicable law) of the year following the current Tax year, Distributing shall pay to the IRS, and to each relevant state, local and foreign Taxing Authority, on behalf of the members of any Consolidated Group, the payment, if any, required to be made with a request for an extension of time in which to file a Consolidated Federal Return or a Consolidated State Return, as the case may be.  Each Group’s share of such estimated Tax payments, and payments required to be made with a request for an extension of time in which to file a Consolidated Federal Return or a Consolidated State Return, shall be determined in a manner consistent with the methods set forth in Sections 3, 4 and 5 of this Agreement.  Reimbursement to Distributing of the Controlled Group’s share of any quarterly estimated tax payments or any payment made with a request for an extension of time in which to file a Consolidated Federal Return or a Consolidated State Return, shall be made within 20 business days after receiving notice of such liability from Distributing.
 
(b)      Notwithstanding the provisions of Section 6(a), if Distributing requests in writing an advance reimbursement from the Controlled Group of the Controlled Group’s share of a quarterly estimated Tax payment or any payment required to be made with a request for an extension of time in which to file a Consolidated Federal Return or a Consolidated State Return, which request shall be not more than 10 business days and not less than 5 business days prior to
 
 
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the due date of such payment, the Controlled Group shall reimburse Distributing not later than the due date of such estimated Tax payment.
 
SECTION 7 .   Settlement; Certain Other Tax Sharing Provisions .
 
(a)      Distributing shall calculate settlement of the final federal, state, local and foreign Tax liability for all Pre-Deconsolidation Periods, and notify the Controlled Group of such settlement. Subject to Section 21 of this Agreement (relating to dispute resolution procedures), the Controlled Group shall pay to Distributing its share of such Tax liability, as determined under Sections 3, 4 and 5 of this Agreement, within 20 business days after receiving notice of such Tax liability from Distributing. Any amounts paid by any member of the Controlled Group pursuant to Section 6 and any amounts receivable by the Controlled Group in respect of a Separate Group Taxable Loss or Tax credit shall be included in determining the payments due from the Controlled Group. If the sum of any payments by the Controlled Group pursuant to Section 6, and any amounts receivable by the Controlled Group in respect of a Separate Group Taxable Loss or Tax credit exceed its Tax liability, such excess shall be refunded to the Controlled Group. Interest will be due on any underpayment or overpayment of Tax, computed from the date on which a final Return is filed at the rate equal to the “prime” rate as published in the Wall Street Journal, Eastern Edition on such date.
 
(b)      If a portion or all of an unused loss or Tax credit is allocated to a member of the Consolidated Group, pursuant to Treasury Regulations Section 1.1502-21(b) or Treasury Regulations Section 1.1502-79, and is carried back or forward to a Taxable year in which such member filed a separate Return or consolidated, combined or unitary Return with an affiliated group that is not a Consolidated Group, any Refund or reduction in Tax liability arising from such carry back or carryover shall be retained by such member, subject to future audit adjustments.  Notwithstanding the foregoing, Distributing, in its sole discretion, (i) shall determine whether an election shall be made to relinquish the entire carry back period with respect to part or all of a consolidated net operating loss for any Pre-Deconsolidation Period in accordance with Treasury Regulations Section 1.1502-21(b)(3) and (ii) may require Controlled to make an election to relinquish the entire carry back period with respect to all net operating losses and consolidated net operating losses attributable to Controlled in accordance with Proposed Treasury Regulations Section 1.1502-72(e)(1) (or any final, amended or successor version thereof that is substantively comparable).
 
(c)      Notwithstanding Section 7(b) above, no member of the Controlled Group shall make any election to carry back any Tax item from a Post-Deconsolidation Period to a Pre-Deconsolidation Period without Distributing’s consent.  In the event that Distributing consents to the carry back of any Tax item by a member of the Controlled Group from a Post-Deconsolidation Period to a Pre-Deconsolidation Period or in the event that a member of the Controlled Group is required by applicable law to carry back a Tax item from a Post-Deconsolidation Period to a Pre-Deconsolidation Period, Distributing shall currently compensate the Controlled Group only for a Tax item that is carried back which does not result in the loss or deferral of any Tax attribute of any member of the Distributing Group.  In the event that such item of a member of the Distributing Group is only deferred, Distributing shall make a payment to the Controlled Group in respect of such deferred item at the time the Distributing Group
 
 
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actually realizes the deferred Tax attribute.  To the extent the Distributing Group suffers a permanent loss of such Tax attribute, no payment shall be made to the Controlled Group.
 
(d)      In the event that the Controlled Group is entitled to a Tax benefit by reason of a Distributing Assumed Liability Payment, Controlled shall pay to Distributing (A) the amount, if any, by which any Taxes payable by the Controlled Group are reduced by reason of the Distributing Assumed Liability Payment and (B) any Refund of Taxes or other Tax benefit attributable thereto that is actually realized, in each case as determined by Controlled in consultation with Distributing.
 
(e)      Controlled and Distributing hereby acknowledge and agree that Sections 6 and 7(a) are applicable only with respect to Pre-Deconsolidation Periods for which a final Return is filed after the date hereof.
 
(f)      Deductions and Reporting for Certain Equity-Based Awards.
 
(i)      Distributing shall be entitled to the economic benefit of, and to the extent permitted by law, may file Returns claiming, the Tax deductions attributable to (x) the exercise of options to purchase stock of Distributing or (y) any payments (whether in cash or stock) made by Distributing pursuant to Section 3.04 of the Employee Matters Agreement in respect of any restricted stock units, cash-based restricted stock units, or cash-based performance units, in each case that are held by employees or former employees of the Controlled Group.
 
(ii)      To the extent Distributing determines that the Distributing Group will not or may not claim such Tax deductions (whether as a result of disallowance of deductions originally claimed by Distributing or otherwise), the Controlled Group shall pay to the Distributing Group an amount equal to the product of the amount of the related  deduction and the Distributing  Group’s effective Tax rate for the relevant Taxable period, as determined by Distributing in consultation with Controlled.
 
(iii)                 Except as Distributing may at any time determine in its sole discretion, Distributing shall be responsible for (A) all income, payroll, or other tax reporting related to income to any current or former employees of the Controlled Group arising from the exercise of any option or from any payment described in Section 7(f)(i); and (B) remitting applicable tax withholdings for such income to each applicable taxing authority.  Distributing and Controlled acknowledge and agree that the parties shall cooperate with each other and with third-party providers to effectuate withholding and remittance of taxes, as well as required tax reporting, in a timely, efficient, and appropriate manner.
 
SECTION 8 .  Other Taxes.   All federal, state, local, foreign and other Taxes that are (i) not otherwise expressly dealt with herein or (ii) determined on a single-entity basis (including any federal excise Taxes and any franchise Taxes), and the filing of any Returns with respect to such Taxes, shall be the responsibility of the Person who is liable for such Taxes or is responsible for filing such Returns under applicable law.
 
 
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SECTION 9 .  Certain Representations and Covenants.
 
(a)       Controlled Representations. Controlled and each member of the Controlled Group represents that as of the date hereof, and covenants that on the Distribution Date, there is no plan or intention:
 
(i)      to liquidate Controlled or to merge or consolidate Controlled, or any member of the Controlled Group, with any other Person subsequent to the Distribution,
 
(ii)      to sell or otherwise dispose of any material asset of Controlled or any member of the Controlled Group (other than pursuant to an Ethanol Facility Disposition) subsequent to the Distribution, except in the ordinary course of business,
 
(iii)                 to take any action inconsistent with the written information and representations furnished to the IRS in connection with the Ruling Request, or to counsel in connection with any opinion being delivered by counsel with respect to the Distribution, regardless of whether such information and representations were included in the ruling issued by the IRS or in the opinion of counsel,
 
(iv)                 to repurchase stock of Controlled other than in a manner that satisfies the requirements of IRS Revenue Procedure 96-30, as modified by IRS Revenue Procedure 2003-48, and any representations made in the Ruling Request,
 
(v)      to take any action, other than pursuant to an Ethanol Facility Disposition, that management of Controlled knows, or should have known, is reasonably likely to contravene any agreement with a Taxing Authority entered into prior to the Distribution Date to which any member of the Controlled Group or the Distributing Group is a party, or
 
(vi)                 to enter into any negotiations, agreements, or arrangements with respect to transactions or events (including stock issuances, pursuant to the exercise of options or otherwise, option grants, the adoption of, or authorization of shares under, a stock option plan, capital contributions, or acquisitions, but not including the Distribution) that could reasonably be expected to cause the Distribution to be treated as part of a plan pursuant to which one or more Persons acquire directly or indirectly Controlled stock representing a “ 50-percent or greater interest ” within the meaning of Section 355(d)(4) of the Code.
 
(b)       Controlled Covenants .  Controlled covenants to Distributing that, without the prior written consent of Distributing,
 
(i)      during the two-year period following the Distribution Date, other than pursuant to an Ethanol Facility Disposition, (A) neither Controlled, nor any member of the Controlled Group conducting an Active Business, will, or will agree to, discontinue such business or dissolve, liquidate or engage in any transaction involving a merger, consolidation or other reorganization, and (B) none of Controlled or any other member of the Controlled Group will, or will agree to, sell, exchange, distribute or otherwise dispose
 
 
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of any asset of any member of the Controlled Group, except in the ordinary course of business or as set forth on Schedule 9(b)(i),
 
(ii)      Controlled will not, nor will it permit any member of the Controlled Group to, take any action inconsistent with the information and representations furnished to the IRS in connection with the Ruling Request, or to counsel in connection with any opinion being delivered by counsel with respect to the Distribution, regardless of whether such information and representations were included in the ruling issued by the IRS or in the opinion of counsel,
 
(iii)                 Controlled will not, nor will it permit any member of the Controlled Group to, take any action, other than pursuant to an Ethanol Facility Disposition, that management of Controlled knows, or should have known, is reasonably likely to contravene any agreement with a Taxing Authority entered into prior to the Distribution Date to which any member of the Controlled Group or the Distributing Group is a party,
 
(iv)                 during the two-year period following the Distribution Date, Controlled will not repurchase stock of Controlled in a manner contrary to the requirements of IRS Revenue Procedure 96-30, as modified by IRS Revenue Procedure 2003-48, or in a manner contrary to the representations made in the Ruling Request,
 
(v)      on or after the Distribution Date, Controlled will not, nor will it permit any member of the Controlled Group to, make or change any accounting method, amend any Return or take any Tax position on any Return, take any other action or enter into any transaction that results in any increased Tax liability or reduction of any Tax asset of the Distributing Group or any member thereof in respect of any Pre-Deconsolidation Period,
 
(vi)                 during the two-year period following the Distribution Date, none of Controlled or any other member of the Controlled Group will, or will agree to, sell or otherwise issue to any Person, or redeem or otherwise acquire from any Person, any Equity Securities of Controlled or any other member of the Controlled Group; provided, however , that Controlled may repurchase stock of Controlled as permitted by Section 9(b)(iv) hereof and may issue such Equity Securities to the extent such issuances satisfy Safe Harbor VIII (relating to acquisitions in connection with a person’s performance of services) or Safe Harbor IX (relating to acquisitions by a retirement plan of an employer) of Treasury Regulation Section 1.355-7(d), and
 
(vii)                 during the two-year period following the Distribution Date, none of Controlled or any other member of the Controlled Group will (A) solicit any Person to make a tender offer for, or otherwise acquire or sell, the Equity Securities of Controlled, (B) participate in or support any unsolicited tender offer for, or other acquisition, issuance or disposition of, the Equity Securities of Controlled or (C) approve or otherwise permit any proposed business combination or any transaction which, in the case of clauses (A) or (B), individually or in the aggregate, together with any transaction occurring within the four-year period beginning on the date which is two years before the Distribution Date and any other transaction which is part of a plan or series of related
 
 
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transactions (within the meaning of Section 355(e) of the Code) that includes the Distribution, could result in one or more Persons acquiring (except for acquisitions that otherwise satisfy Safe Harbor VIII (relating to acquisitions in connection with a person’s performance of services) or Safe Harbor IX (relating to acquisitions by a retirement plan of an employer) of Treasury Regulation Section 1.355−7(d)) directly or indirectly stock representing a 40% or greater interest, by vote or value, in Controlled (or any successor thereto).
 
(c)       Controlled Covenants Exceptions .  Notwithstanding the foregoing, Controlled and the members of Controlled Group may take actions inconsistent with the covenants contained in Section ‎ 9(b) above, if:
 
(i)      In the case of any disposition of assets that could otherwise be subject to Section 9(b)(i) or (ii), the aggregate book value of such assets does not exceed 5 percent of total assets; or
 
(ii)      In the case of any other action: (A) Controlled notifies Distributing of its proposal to take such action and Controlled and Distributing obtain a ruling from the IRS to the effect that such actions will not result in the Distribution being taxable to Distributing or its shareholders, provided that Controlled agrees in writing to bear any expenses associated with obtaining such a ruling and, provided further , that Controlled shall not be relieved of any liability under Section 10(a) of this Agreement by reason of seeking or having obtained such a ruling; or (B) Controlled notifies Distributing of its proposal to take such action and obtains an opinion of counsel recognized as an expert in federal income tax matters and acceptable to Distributing to the same effect as in Section 9(c)(ii)(A) , provided that such opinion is acceptable to Distributing in its sole discretion; provided further , that Controlled shall not be relieved of any liability under Section 10(a) of this Agreement by reason of having obtained such an opinion.
 
SECTION 10 .  Indemnities.
 
(a)       Controlled Indemnity .  Controlled and each member of the Controlled Group will jointly and severally indemnify Distributing and the members of the Distributing Group against, and hold them harmless from:
 
(i)      any Tax liability of the Controlled Group as determined in accordance with this Agreement;
 
(ii)      any liability or damage resulting from a breach by Controlled or any member of the Controlled Group of any representation or covenant made by Controlled herein;
 
(iii)    any Tax liability of Distributing that is attributable to any action of Controlled or any member of the Controlled Group, other than any action required by the Distribution Agreement without regard to whether Distributing has consented to such action; and
 
 
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(iv)   all liabilities, costs, expenses (including, without limitation, reasonable expenses of investigation and attorneys’ fees and expenses), losses, damages, assessments, settlements or judgments arising out of or incident to the imposition, assessment or assertion of any Tax liability or damage described in (i), (ii), or (iii), including those incurred in the contest in good faith in appropriate proceedings relating to the imposition, assessment or assertion of any such Tax, liability or damage.
 
(b)       Distributing Indemnity .  Distributing and each member of the Distributing Group will jointly and severally indemnify Controlled and the members of the Controlled Group against, and hold them harmless from:
 
(i)      any Tax liability of the Consolidated Group, other than any such liabilities described in Section 10(a);
 
(ii)      any Taxes imposed on Controlled or any member of the Controlled Group under Treasury Regulation 1.1502-6 (or similar provision of state, local or foreign law) solely as a result of Controlled or any such member being or having been a member of a Consolidated Group; and
 
(iii)    all liabilities, costs, expenses (including, without limitation, reasonable expenses of investigation and attorneys’ fees and expenses), losses, damages, assessments, settlements or judgments arising out of or incident to the imposition, assessment or assertion of any income Tax liability or damage described in (i) or (ii) including those incurred in the contest in good faith in appropriate proceedings relating to the imposition, assessment or assertion of any such income Tax, liability or damage.
 
(c)       Discharge of Indemnity .  Controlled, Distributing and the members of the Controlled Group and Distributing Group, respectively, shall discharge their obligations under Sections 10(a) and 10(b) hereof, respectively, by paying the relevant amount within 30 days of demand therefor.  Any such demand shall include a statement showing the amount due under Section 10(a) or 10(b), as the case may be.  Items described in Sections 10(a)(i) and 10(b)(i) shall be calculated as set forth in Sections 3, 4 and 5.  Notwithstanding the foregoing, if either Controlled, Distributing or any member of the Controlled Group or Distributing Group disputes in good faith the fact or the amount of its obligation under Section 10(a) or Section 10(b), then no payment of the amount in dispute shall be required until any such good faith dispute is resolved in accordance with Section 21 hereof; provided, however , that any amount not paid within 30 days of demand therefor shall bear interest as provided in Section 14.
 
(d)       Tax Benefits .  If an indemnification obligation of any member of the Distributing Group or any member of the Controlled Group, as the case may be, under this Section 10 with respect to a Consolidated Group arises in respect of an adjustment that makes allowable to a member of the Controlled Group or a member of the Distributing Group, respectively, any Tax benefit   which would not, but for such adjustment, be allowable, then any payment by any member of the Distributing Group or any member of the Controlled Group, respectively, pursuant to this Section 10 shall be an amount equal to (x) the amount otherwise due but for this subsection (d), minus (y) the present value of the product of the Tax benefit multiplied (i) by the
 
 
14
 
 
maximum applicable federal, foreign, state or local, as the case may be, corporate Tax rate in effect at the time such Tax benefit becomes allowable to a member of the Controlled Group or a member of the Distributing Group (as the case may be) or (ii) in the case of a credit, by 100 percent.  The present value of such product shall be determined by discounting such product from the time the Tax benefit becomes allowable at the rate equal to the “prime” rate as published in the Wall Street Journal, Eastern Edition on the date of such determination.
 
SECTION 11 .  Guarantees.   Distributing or Controlled, as the case may be, shall guarantee or otherwise perform the obligations of each member of the Distributing Group or the Controlled Group, respectively, under this Agreement
 
SECTION 12 .  Communication and Cooperation.
 
(a)       Consult and Cooperate.   Controlled and Distributing shall consult and cooperate (and shall cause each member of the Controlled Group or the Distributing Group, respectively, to cooperate) fully at such time and to the extent reasonably requested by the other party in connection with all matters subject to this Agreement.  Such cooperation shall include, without limitation,
 
(i)      the retention, and provision on reasonable request, of any and all information including all books, records, documentation or other information pertaining to Tax matters relating to the Distributing Group and the Controlled Group, any necessary explanations of information, and access to personnel, until one year after the expiration of the applicable statute of limitation (giving effect to any extension, waiver, or mitigation thereof);
 
(ii)      the execution of any document that may be necessary (including to give effect to Section 13) or helpful in connection with any required Return or in connection with any audit, proceeding, suit or action; and
 
(iii)                 the use of the parties’ best efforts to obtain any documentation from a governmental authority or a third party that may be necessary or helpful in connection with the foregoing.
 
(b)       Provide Information.   Distributing and Controlled shall keep each other fully informed with respect to any material development relating to the matters subject to this Agreement.
 
(c)       Tax Attribute Matters.   Distributing and Controlled shall promptly advise each other with respect to any proposed Tax adjustments relating to a Consolidated Group, which are the subject of an audit or investigation, or are the subject of any proceeding or litigation, and which may affect any Tax liability or any Tax attribute of Distributing, Controlled, the Distributing Group, the Controlled Group or any member of the Controlled Group or the Distributing Group (including, but not limited to, basis in an asset or the amount of earnings and profits).
 
 
15
 
 
SECTION 13 .  Audits and Contest.
 
(a)       Notice .  Distributing or Controlled shall promptly notify the other in writing upon the receipt of any notice of Tax Proceeding from the relevant Taxing Authority; provided, that a party’s right to indemnification under this Agreement shall not be limited in any way by a failure to so notify, except to the extent that the indemnifying party is materially prejudiced by such failure.
 
(b)       Distributing Control . Notwithstanding anything in this Agreement to the contrary, except to the extent provided in paragraphs (c), (d) and (e) below, Distributing shall have the right to control all matters relating to any Tax Return or any Tax Proceeding with respect to any Tax matters of a Consolidated Group or any member of a Consolidated Group. Distributing shall have absolute discretion with respect to any decisions to be made, or the nature of any action to be taken, with respect to any Tax matter described in the preceding sentence; provided, however , that Distributing shall keep Controlled informed of all material developments and events relating to such matters to the extent they affect the Separate Group Tax Liability of the Controlled Group or may give rise to a claim for indemnity by Distributing against Controlled under Section 10(a) of this Agreement; and at its own cost and expense, Controlled shall have the right to participate in (but not to control) the defense of any such tax claim.
 
(c)       Controlled Assumption of Control; Non-Section 355 Matters . If Distributing determines that the resolution of any matter relating to a Tax Return or Tax Proceeding (other than a Tax Proceeding relating to the qualification of the Distribution under Sections 355 and 368(a)(1)(D) of the Code) is reasonably likely to have an adverse effect on Controlled Group with respect to any Post-Deconsolidation Period, Distributing may permit Controlled to elect to assume control over disposition of such matter at Controlled’s sole cost and expense; provided, however , that if Controlled so elects, it will (i) be responsible for the payment of any liability arising from the disposition of such matter notwithstanding any other provision of this Agreement to the contrary and (ii) indemnify the Distributing Group for any increase in a liability and any reduction of a Tax asset of the Distributing Group arising from such matter.
 
(d)       Controlled Assumption of Control; Section 355 Matters . In the event of a Tax Proceeding relating to the qualification of the Distribution under Sections 355 and 368(a)(1)(D) of the Code, Distributing shall have the right to control the defense of the matter in all proceedings before the IRS, provided that Distributing shall keep Controlled fully informed of all material developments and shall permit Controlled a reasonable opportunity to participate in the defense of the matter.
 
(e)       Controlled Control . Controlled shall have full control over all matters relating to any Tax Proceeding with respect to Returns of Controlled Group relating to any Post-Deconsolidation Period.
 
SECTION 14 .  Payments.
 
(a)         Timing, After-Tax Amounts . All payments to be made hereunder shall be made in immediately available funds.  Except as otherwise provided, all payments required to be made pursuant to this Agreement will be due 30 days after the receipt of notice of such payment or,
 
 
16
 
 
where no notice is required, 30 days after the fixing of liability or the resolution of a dispute. Payments shall be deemed made when received.  Any payment that is not made when due shall bear interest at the ra te equal to the “prime” rate as published on such date in the Wall Street Journal, Eastern Edition .  If, pursuant to a Final Determination, any amount paid by Distributing or the members of the Distributing Group or Controlled or the members of the Controlled Group, as the case may be, pursuant to this Agreement results in any increased Tax liability or reduction of any Tax asset of Controlled or any member of the Controlled Group or Distributing or any member of the Distributing Group, respectively, then Distributing or Controlled, as appropriate, shall indemnify the other party and hold it harmless from any interest or penalty attributable to such increased Tax liability or the reduction of such Tax asset and shall pay to the other party, in addition to amounts otherwise owed, the After-Tax Amount.  With respect to any payment required to be made or received under this Agreement, Distributing has the right to designate, by written notice to Controlled, which member of the Distributing Group will make or receive such payment.
 
(b)       Netting of Payments . If, on the day payment is due under this Agreement, each of Distributing and Controlled (each, a “ Party ”) owes an amount to the other Party pursuant to this Agreement and any other agreement between the Parties, including, without limitation, the Distribution Agreement and any Ancillary Agreement, as defined in the Distribution Agreement, the Parties shall satisfy their respective obligations to each other by netting the aggregate amounts due to one Party against the aggregate amounts due to the other Party, with the Party, if any, owning the greater aggregate amount paying the other Party the difference between the amounts owed. Such net payment shall be made pursuant to the provision of Section 14(a).
 
SECTION 15 .  Notices.   Any notice, demand, claim, or other communication under this Agreement shall be in writing and shall be deemed to have been given upon the delivery or mailing, thereof, as the case may be, if delivered personally or sent by certified mail, return receipt requested, postage prepaid, to the parties at the following addresses (or at such other address as a party may specify by notice to the other):
 
If to Distributing or the Distributing Group, to:
 
Murphy Oil Corporation
Attn: Tim Butler
200 Peach St., P.O. Box 7000
El Dorado, Arkansas 71731

Murphy Oil Corporation
Attn: John Eckart
200 Peach St., P.O. Box 7000
El Dorado, Arkansas 71731

If to Controlled or the Controlled Group, to:
 
Murphy USA Inc.
Attn: Dan Farish
 
 
17
 
 
200 Peach St., P.O. Box 7300
El Dorado, Arkansas 71730

Murphy USA Inc.
Attn: Donald Smith
200 Peach St., P.O. Box 7300
El Dorado, Arkansas 71730

SECTION 16 .  Costs and Expenses.
 
(a)      Except as expressly set forth in this Agreement, each party shall bear its own costs and expenses incurred pursuant to this Agreement.  For purposes of this Agreement, costs and expenses shall include, but not be limited to, reasonable attorneys’ fees, accountant fees and other related professional fees and disbursements.  Notwithstanding anything to the contrary in this Agreement, each of the Controlled Group and the Distributing Group will be responsible for its allocable portion, as determined by Distributing, of (i) all costs and expenses attributable to filing any Return that reflects the income, assets or operations of the Controlled Group or the Distributing Group, respectively and (ii) all costs and expenses incurred by Distributing or Controlled, respectively, in complying with the provisions of Section 12 of this Agreement.
 
(b)      With respect to all Tax Proceedings, including any pending litigation with any Taxing Authority, costs shall be allocated in good faith by Distributing.  Each party hereto shall be liable for its allocable portion of such costs as provided in Section 10.
 
SECTION 17 .  Effectiveness; Termination and Survival.   This Agreement shall become effective upon the consummation of the Distribution. All rights and obligations arising hereunder shall survive until they are fully effectuated or performed; provided, further , that notwithstanding anything in this Agreement to the contrary, this Agreement shall remain in effect and its provisions shall survive for one year after the full period of all applicable statutes of limitation (giving effect to any extension, waiver or mitigation thereof) and, with respect to any claim hereunder initiated prior to the end of such period, until such claim has been satisfied or otherwise resolved.
 
SECTION 18 .  Section Headings.   The headings contained in this Agreement are inserted for convenience only and shall not constitute a part hereof or in any way affect the meaning or interpretation of this Agreement.
 
SECTION 19 .  Entire Agreement; Amendments and Waivers.
 
(a)       Entire Agreement.   This Agreement contains the entire understanding of the parties hereto with respect to the subject matter contained herein. No alteration, amendment, modification, or waiver of any of the terms of this Agreement shall be valid unless made by an instrument signed by an authorized officer of each of Distributing and Controlled, or in the case of a waiver, by the party against whom the waiver is to be effective.
 
(b)       Amendments and Waivers.   No failure or delay by any party in exercising any right, power or privilege hereunder shall operate as a waiver hereof nor shall any single or partial
 
 
18
 
 
exercise thereof preclude any other or further exercise thereof or the exercise of any right, power or privilege. This Agreement shall not be waived, amended or otherwise modified except in writing, duly executed by all of the parties hereto.
 
SECTION 20 .  Governing Law and Interpretation.   This Agreement shall be construed and enforced in accordance with the laws of the State of New York without giving, effect to laws and principles relating to conflicts of law.
 
SECTION 21 .  Dispute Resolution.   In the event of any dispute relating to this Agreement, including but not limited to whether a Tax liability is a liability of the Distributing Group or the Controlled Group, the parties shall work together in good faith to resolve such dispute within 30 days. If the parties are unable to resolve such dispute within 30 days, such dispute shall be resolved by an accounting firm whose selection shall be reasonably satisfactory to both parties and whose fees and costs shall be shared equally by Distributing and Controlled.
 
SECTION 22 .  Counterparts.   This Agreement may be executed in any number of counterparts, each of which shall be deemed an original, but all of which together shall constitute one and the same Agreement.
 
SECTION 23 .  Assignments; Third Party Beneficiaries.   Except as provided below, this Agreement shall be binding upon and shall inure only to the benefit of the parties hereto and their respective successors and assigns, by merger, acquisition of assets or otherwise (including but not limited to any successor of a party hereto succeeding to the Tax attributes of such party under applicable law).  This Agreement is not intended to benefit any person other than the parties hereto and such successors and assigns, and no such other person shall be a third party beneficiary hereof.
 
SECTION 24 .  Authorization, Etc.   Each of the parties hereto hereby represents and warrants that it has the power and authority to execute, deliver and perform this Agreement, that this Agreement has been duly authorized by all necessary corporate action on the part of such party, that this Agreement constitutes a legal, valid and binding obligation of each such party, and that the execution, delivery and performance of this Agreement by such party does not contravene or conflict with any provision or law or of its charter or bylaws or any agreement, instrument or order binding on such party.
 
 
19
 
 
IN WITNESS WHEREOF, the parties have executed and delivered this Agreement as of the day and year first written above.
 
 
Distributing on its own behalf and on behalf of the members of the Distributing Group.
 
         
         
  By:     /s/ Walter K. Compton  
    Name:    Walter K. Compton  
    Title:  Senior Vice President and General Counsel  
 
 
Controlled on its own behalf and on behalf of the members of the Controlled Group.
 
         
         
  By:     /s/ John A. Moore  
    Name:    John A. Moore  
    Title:  Senior Vice President, General Counsel and Secretary  
 
 
20
 
 
 
SCHEDULE 9(b)(i)

None
 
 
 
 
21
 
 
 
 
 
Exhibit 10.2
 

 
 

 
TRANSITION SERVICES AGREEMENT
 
by and between
 
MURPHY OIL CORPORATION
 
and
 
MURPHY USA INC.
 
Dated as of August 30, 2013
 
 
 
 
 
 
 
 
TABLE OF CONTENTS
 
 
Page
ARTICLE 1
 
DEFINITIONS
 
Section 1.01.  Definitions
1
ARTICLE 2
 
PURCHASE AND SALE OF SERVICES
 
Section 2.01.  Purchase and Sale of Services
5
Section 2.02.  Third Party Licenses and Consents
6
Section 2.03.  Third Party Providers
6
Section 2.04.  Cooperation
7
ARTICLE 3
 
SERVICE COSTS; OTHER CHARGES
 
Section 3.01.  Service Costs Generally
7
Section 3.02.  Taxes
7
Section 3.03.  Invoicing and Settlement
8
ARTICLE 4
 
THE SERVICES
 
Section 4.01.  Standards of Service
8
Section 4.02.  Changes to Services
9
Section 4.03.  Management of Services By Provider
9
Section 4.04.  Liaisons
9
ARTICLE 5
 
DISCLAIMER, LIABILITY AND INDEMNIFICATION
 
Section 5.01.  Exclusion Of Warranties
10
Section 5.02.  Limitation of Liability
10
Section 5.03.  Indemnification of Provider by Recipient
11
Section 5.04.  Indemnification of Recipient by Provider
11
Section 5.05.  Indemnification as Exclusive Remedy
11
Section 5.06.  Conduct of Proceedings
12
ARTICLE 6
 
TERM AND TERMINATION
 
Section 6.01.  Term
12
 
 
 
i
 
 
Section 6.02.   Termination
12
Section 6.03.  Effect of Termination
13
ARTICLE 7
 
ADDITIONAL AGREEMENTS
 
Section 7.01.  Confidential Information
14
Section 7.02.  Ownership of Assets
15
Section 7.03.  Security
16
Section 7.04.  Access to Information and Audit
16
Section 7.05.  Compliance with Applicable Law
16
Section 7.06.  Labor Matters
16
Section 7.07.  Record Retention
17
ARTICLE 8
 
MISCELLANEOUS
 
Section 8.01.  No Agency; Independent Contractor Status
17
Section 8.02.  Subcontractors
17
Section 8.03.  Force Majeure
17
Section 8.04.  Entire Agreement
18
Section 8.05.  Notices
18
Section 8.06.  Governing Law
19
Section 8.07.  Jurisdiction.
19
Section 8.08.  Specific Performance
20
Section 8.09.  WAIVER OF JURY TRIAL
20
Section 8.10.  Severability
20
Section 8.11.  Amendments and Waivers
20
Section 8.12.  Successors and Assigns
20
Section 8.13.  Third Party Beneficiaries
21
Section 8.14.  Counterparts
21
Section 8.15.  Construction and Interpretation
21
Section 8.16.  Conflict of Terms
21
   
Schedule A    Services
 
Schedule B     Liaisons
 
 
 
 
ii
 
 
TRANSITION SERVICES AGREEMENT
 
This TRANSITION SERVICES AGREEMENT (this “ Agreement ”) is entered into as of August 30, 2013 by and between Murphy Oil Corporation, a Delaware corporation (“ Murphy Oil ”) and Murphy USA Inc., a Delaware corporation (“ Murphy USA ”).
 
RECITALS
 
WHEREAS, Murphy Oil and Murphy USA have entered into a Separation and Distribution Agreement dated as of August 30, 2013 (as amended from time to time, the “ Separation and Distribution Agreement ”) providing for the distribution by Murphy Oil to its shareholders of all of the common stock of Murphy USA; and
 
WHEREAS, the Separation and Distribution contemplates that the parties hereto will enter into this Agreement, pursuant to which Murphy Oil will provide, or cause to be provided, certain services to Murphy USA (and if requested, one or more of its Subsidiaries) and Murphy USA will provide, or cause to be provided, certain services to Murphy Oil (and if requested, one or more of its Subsidiaries), on the terms and conditions set forth herein.
 
NOW, THEREFORE, for good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the parties hereto, for themselves, their successors and permitted assigns, hereby agree as follows:
 
 
ARTICLE 1
Definitions
 
Section 1.01 .  Definitions.   (a)   Any capitalized term that is used herein but not defined herein shall have the meaning assigned to such term in the Separation and Distribution Agreement.
 
(b)      As used in this Agreement, the following terms shall have the following meanings, applicable both to the singular and the plural forms of the terms described:
 
“ Affiliate ” means, with respect to any Person, any other Person directly or indirectly controlling, controlled by, or under common control with, such other Person.  For the purposes of this definition, “ control ” means the possession, directly or indirectly, of the power to direct or cause the direction of the management and policies of a Person, whether through the ownership of voting securities, by contract or otherwise, and the terms “ controlling ” and “ controlled ”
 

 
 
 

have meanings correlative to the foregoing.  Notwithstanding any provision of this Agreement to the contrary (except where the relevant provision states explicitly to the contrary), no member of the Murphy Oil Group, on the one hand, and no member of the Murphy USA Group, on the other hand, shall be deemed to be an Affiliate of the other.

 “ Applicable Law ” means, with respect to any Person, any federal, state, local or foreign law (statutory, common or otherwise), constitution, treaty, convention, ordinance, code, rule, regulation, order, injunction, judgment, decree, ruling, directive, guidance, instruction, direction, permission, waiver, notice, condition, limitation, restriction or prohibition or other similar requirement enacted, adopted, promulgated, imposed, issued or applied by a Governmental Authority that is binding upon or applicable to such Person, its properties or assets or its business or operations, as amended unless expressly specified otherwise.
 
“ Business Day ” means a day, other than Saturday, Sunday or other day on which commercial banks in New York, New York are authorized or required by Applicable Law to close.
 
“ Change of Control ” means, with respect to Murphy Oil or Murphy USA, the occurrence of any of the following: (i) a “Person” (as such term is used in Sections 13(d) and 14(d)(2) of the Exchange Act) becomes a beneficial owner, directly or indirectly, of equity representing fifty percent (50%) or more of the total voting power of Murphy Oil’s or Murphy USA’s, as applicable, then outstanding equity capital; (ii) such entity merges into, is consolidated with or effects an amalgamation with another Person, or merges another Person into such entity, on a basis whereby less than fifty percent (50%) of the total voting power of the surviving Person immediately after such merger, consolidation or amalgamation is represented by equity held directly or indirectly by former equityholders of (and in respect of their former equity holdings in) such entity immediately prior to such merger, consolidation or amalgamation; and (iii) such entity directly or indirectly sells, transfers or exchanges all, or substantially all, of its assets to another Person unless at least fifty percent (50%) of the total voting power of the transferee is directly or indirectly owned by the equityholders of Murphy Oil or Murphy USA, as applicable, in respect of their former equity holdings in Murphy Oil or Murphy USA immediately prior to transfer; provided that in no event shall the consummation, execution or closing of the Spin-Off constitute a Change of Control with respect to Murphy Oil or Murphy USA.
 
“ Distribution ” has the meaning set forth in the Separation and Distribution Agreement.
 
“ Distribution Time ” has the meaning set forth in the Separation and Distribution Agreement.
 

 
2
 

“ Employee Costs ” means with respect to the provision of the applicable Service by any employee, the product of (i) the hours attributable to the Service, (ii) such employee’s Hourly Rate and (iii) the Intercompany Charge-Out Rate applicable to such employee.
 
“ Governmental Authority ” means any multinational, foreign, federal, state, local or other governmental, statutory or administrative authority, regulatory body or commission or any court, tribunal or judicial or arbitral authority which has any jurisdiction or control over either party (or any of their Affiliates).
 
“ Group ” means, as the context requires, the Murphy USA Group or the Murphy Oil Group.
 
“ Hourly Rate ” means, (i) with respect to any salaried employee, (A) such employee’s annual salary as of the Distribution Date (or if such employee was not employed by the Provider or an Affiliate as of the Distribution Date, as of such employee’s initial hiring by the Provider or an Affiliate) divided by (B) 1800 and (ii) with respect to any hourly employee, such employee’s hourly (non-overtime) wage rate (regardless of whether any applicable hours providing Services are worked on an overtime basis) as of the Distribution Date (or if such employee was not employed by the Provider or an Affiliate as of the Distribution Date, as of such employee’s initial hiring by the Provider or an Affiliate).
 
“ Insolvency Event ” means with respect to either party, as applicable, (i) the making by such party of any assignment for the benefit of creditors of all or substantially all of its assets or the admission by such party in writing of its inability to pay all or substantially all of its debts as they become due; (ii) the adjudication of such party as bankrupt or insolvent or the filing by such party of a petition or application to any tribunal for the appointment of a trustee or receiver for such party or any substantial part of the assets of such party; or (iii) the commencement of any voluntary or involuntary bankruptcy proceedings (and, with respect to involuntary bankruptcy proceedings, the failure of such proceedings to be discharged within 60 days), reorganization proceedings or similar proceeding with respect to such party or the entry of an order appointing a trustee or receiver or approving a petition in any such proceeding.
 
“ Intercompany Charge-Out Rate ” means with respect to any employee, Provider’s departmental charge rate applicable to such employee as of the Distribution Date (or, if such employee was not employed by the Provider or an Affiliate as of the Distribution Date, the charge rate that would have been applicable to such employee on the Distribution Date if he or she had been an employee on such date).
 
“ Murphy Oil Entity ” means any member of the Murphy Oil Group.
 

 
3
 

“ Murphy Oil Group ” means Murphy Oil and its Subsidiaries (other than any member of the Murphy USA Group), including all predecessors to such Persons.
 
“ Murphy Oil Systems ”   means any computer hardware or software program or routine or part thereof owned, licensed or provided by any Murphy Oil Entity or any of their suppliers on any Murphy Oil Entity’s behalf, each as modified, maintained or enhanced from time to time by any Murphy Oil Entity, any Murphy USA Entity or any third party.
 
“ Murphy USA Entity ” means any member of the Murphy USA Group.
 
“ Murphy USA Group ” means Murphy USA and its Subsidiaries as of (and, except where the context clearly indicates otherwise, after) the Distribution Time and after giving effect to the Restructuring, including all predecessors to such Persons.
 
“ Murphy USA Systems ”   means any computer hardware or software program or routine or part thereof owned, licensed or provided by any Murphy USA Entity or any of their suppliers on any Murphy USA Entity’s behalf, each as modified, maintained or enhanced from time to time by any Murphy USA Entity, any Murphy Oil Entity or any third party.
 
“ Person ” means an individual, corporation, partnership, limited liability company, association, trust or other entity or organization, including a Governmental Authority.
 
“ Provider Group ” means, as the context requires, the Murphy Oil Group, in the case of Services to be provided by Murphy Oil, or the Murphy USA Group, in the case of Services to be provided by Murphy USA.
 
“ Recipient Entity ” means any member of the Recipient Group.
 
“ Recipient Group ” means, as the context requires, the Murphy Oil Group, in the case of Services to be received by the Murphy Oil Group, or the Murphy USA Group, in the case of Services to be received by the Murphy USA Group.
 
“ Schedule ” means a Schedule attached hereto forming part of this Agreement.
 
“ Service Costs ” means the sum of the Provider Group’s (i) reasonable actual out-of-pocket costs attributable to the provision of the applicable Service and (ii) Provider’s Employee Costs.  For purposes of clause (i), and without limitation, the parties agree that such costs with respect to any given good or service will be considered reasonable if the relevant out-of-pocket cost for such good or service either (x) do not exceed the comparable cost being paid by
 

 
4
 

Provider or an Affiliate for such good or service prior to the Distribution Time or (y) do not exceed the cost being paid by Provider or an Affiliate for such good or service being rendered to Provider or its Affiliates not in connection with the provision of the Services.

“ Subsidiary ” means, with respect to any Person, any other entity of which securities or other ownership interests having ordinary voting power to elect a majority of the board of directors or other persons performing similar functions are at the time directly or indirectly owned by such Person.
 
 “ Systems ”   means the Murphy Oil Systems or the Murphy USA Systems, individually, or the Murphy Oil Systems and the Murphy USA Systems, collectively, as the context may indicate or require.
 
(c)      Each of the following terms is defined in the Section set forth opposite such term:
 
Term
 
Section
Actions
 
5.03
Agreement
 
Preamble
Baseline Period
 
4.01(a)
Confidential Information
 
7.01
force majeure
 
8.03
Invoice Date
 
3.03(a)
Liaison
 
4.04(a)
Murphy Oil
 
Preamble
Murphy USA
 
Preamble
Payment Date
 
3.03(b)
Provider
 
2.01(a)
Provider Indemnified Person
 
5.02
Recipient
 
2.01(a)
Recipient Indemnified Person
 
5.04
Separation and Distribution Agreement
 
Recitals
Services
 
2.01(a)
 
ARTICLE 2
Purchase And Sale Of Services
 
Section 2.01 .  Purchase and Sale of Services.   (a) On the terms and subject to the conditions of this Agreement and in consideration of the payment of the Service Costs in accordance with Section 3.01, after the Distribution Time each of Murphy Oil and Murphy USA (each in its capacity as a provider of Services, “ Provider ”) agrees to provide to the other party (in its capacity as a recipient of Services, “ Recipient ”), or procure the provision to Recipient of, and Recipient
 

 
5
 

agrees to purchase from Provider, the transition services set forth on Schedule A as Services to be provided by the relevant Provider (the “ Services ”).

(b)      It is understood that (i) the Services to be provided to Recipient under this Agreement shall, at Recipient’s request, be provided to any Person that is a Subsidiary of Recipient (and to the extent Services are so provided, references to “Recipient” (and related references) shall be construed accordingly as the context requires) and (ii) Provider may satisfy its obligation to provide or procure Services hereunder by causing one or more of its Affiliates to provide or procure such Services (and, to the extent Services are so provided, references to “Provider” (and related references) shall be construed accordingly as the context requires), which Affiliates it may change at its discretion from time to time; provided that Provider shall remain responsible for the performance of such Affiliates.  With respect to Services provided to, or procured on behalf of, any Subsidiary of Recipient, Recipient agrees to pay on behalf of such Subsidiary, or cause such Subsidiary to pay, all amounts payable by or in respect of such Services pursuant to this Agreement.
 
(c)      Except for the Services expressly contemplated to be provided in accordance with this Section 2.01, Provider shall have no obligation under this Agreement to provide any services to the Recipient Group.  Provider agrees to consider in good faith any requests by Recipient for the provision of any additional services.  Any such additional services that Provider agrees to provide will be on such terms and conditions (including pricing) as the parties shall mutually and reasonably agree.
 
Section 2.02.   Third Party Licenses and Consents .  Provider and Recipient shall use commercially reasonable efforts to obtain, and to keep and maintain in effect, all governmental or third party licenses and consents required for the provision of any Service by Provider in accordance with the terms of this Agreement; provided that if Provider is unable to obtain any such license or consent, Provider shall promptly notify Recipient in writing and shall, and shall cause its Affiliates to, use commercially reasonable efforts to implement an appropriate alternative arrangement.   The costs relating to obtaining any such licenses or consents shall be borne by Recipient; provided that Provider shall not incur any such costs without the prior written consent of Recipient.  If any such license, consent or alternative arrangement is not available despite the commercially reasonable efforts of Provider and its Affiliates or as a result of Recipient failing to consent to the incurrence of costs relating to obtaining any such license or consent, Provider shall not be required to provide the affected Services.
 
Section 2.03 .  Third Party Providers .  If Provider receives written notice from any third party service provider that such Person intends to terminate a service pursuant to which Provider provides a Service to Recipient, then Provider
 

 
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shall provide a copy of such written notice to Recipient and shall use commercially reasonable efforts to secure the continued provision of that service from such third party or an alternative service provider.  If Provider is unable to secure the continued provision of that service from such third party or an alternative service provider, Provider shall not be required to provide the affected Service.

Section 2.04 .  Cooperation .  Provider and Recipient agree to cooperate in providing for an orderly transition of Services, including Services terminated pursuant to Section 6.02, to Recipient or a successor service provider designated by Recipient.  Such cooperation shall be subject to the provisions hereof relating to the provision of Services including that Recipient shall pay to Provider the Service Costs related thereto.
 
ARTICLE 3
Service Costs; Other Charges
 
Section 3.01 .  Service Costs Generally .  Unless the applicable Schedule hereto expressly provides otherwise (in which event the parties agree to the costs set forth therein) or the parties agree in writing to a different arrangement, for each period in which Recipient receives a Service hereunder, Recipient shall pay Provider the Service Costs for the applicable Service. In the case of a termination of any or all Services prior to the End Date (other than (x) a termination under Section 6.02(c) or (y) a termination under Section 6.02(f) arising from Provider suffering an Insolvency Event), (i) Recipient shall continue to be responsible for the reasonable out-of-pocket costs associated with such Services until the End Date, (ii) Provider shall use reasonable efforts to eliminate such costs referenced in clause (i) as soon as possible and (iii) until such costs referenced in clause (i) are eliminated they will be treated as Service Costs relating to Services provided prior to termination and may be invoiced as incurred.  Provider may not rely on the prior sentence with respect to the costs for a given contract if the contract was entered into in connection with providing the Services and the term of the contract was more than three months unless Recipient approved Provider entering into such contract.
 
Section 3.02 .  Taxes.   (a)  Recipient shall pay all applicable sales or use taxes incurred with respect to provision of the Services.  Such taxes shall be incremental to other payments or charges identified in this Agreement.
 
(b)      All sums payable under this Agreement shall be paid free and clear of all deductions or withholdings unless the deduction or withholding is required by Applicable Law, in which event the amount of the payment due from the party required to make such payment (other than amounts of interest) shall be increased to an amount which after any withholding or deduction leaves an amount equal to
 

 
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the payment which would have been due if no such deduction or withholding had been required.

Section 3.03 .  Invoicing and Settlement .  (a) Unless any Schedule hereto indicates otherwise or the parties agree in writing to a different arrangement, Provider shall invoice or notify in writing the Recipient on a monthly basis (not later than 30 days after the end of each month) for the charges for Services hereunder for the prior month (the date of delivery of such invoice, the “ Invoice Date ”).
 
(b)      Recipient agrees to pay on or before the date (each, a “ Payment Date ”) that is 30 days   after the Invoice Date by wire transfer of immediately available funds payable to the order of Provider to such account(s) designated by Provider all amounts invoiced by Provider pursuant to Section 3.03(a), except for any portion of those amounts reasonably disputed in good faith.  Payment for amounts reasonably disputed in good faith for any Services may be withheld beyond their due date by Recipient until such dispute is resolved pursuant to Section 4.04, in which event the relevant payment shall include interest at the Interest Rate from the date that is 15 days after the original relevant Payment Date to the actual payment date.  In the event of any overpayments by Recipient, Provider agrees to promptly refund any such overpaid amount to Recipient no later than 15 days from the date it is determined that there has been an overpayment.
 
ARTICLE 4
The Services
 
Section 4.01 .  Standards of Service .  (a) The level or volume of any specific Service required to be provided to Recipient hereunder shall be at a level or volume consistent in all material respects with the level or volume, as the case may be, of such specific Service as utilized by the Recipient Group during the twelve month period prior to the Distribution Time (the “ Baseline Period ”).  Provider agrees to consider in good faith any requests by Recipient to modify the level or volume of any specific Service.  Any modification to which Provider agrees will be on such terms and conditions (including pricing) as the parties shall mutually and reasonably agree.
 
(b)      The manner, nature, quality and standard of care applicable to the delivery by Provider of the Services hereunder shall be substantially the same as that of similar services which Provider provided to the Recipient Group during the Baseline Period.
 
(c)      Provider shall have no obligation to provide any Services hereunder in respect of any business, assets or properties not forming part of the Recipient Group’s business as of the Distribution Time.  Provider agrees to consider in good
 

 
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faith any requests by Recipient for the provision of any additional services that Recipient considers are reasonably necessary to accommodate normal growth in Recipient’s business.  Any such additional services to which Provider agrees will be on such terms and conditions (including pricing) as the parties shall mutually and reasonably agree.

Section 4.02 .   Changes to Services.   It is understood and agreed that Provider may from time to time modify or change the manner, nature, quality and/or standard of care of any Service provided to Recipient to the extent Provider is making a similar change in the performance of such services for the Provider and its Affiliates and provided that any such modification, change or enhancement will not reasonably be expected to materially affect such Service.  Provider shall furnish to Recipient substantially the same notice (in content and timing), if any, as Provider furnishes to its own organization with respect to such modifications or changes.
 
Section 4.03 .  Management of Services By Provider.   Except as may otherwise be expressly provided in this Agreement, the management of and control over the provision of the Services by Provider shall reside solely with Provider and notwithstanding anything to the contrary Provider shall be permitted to choose the personnel, methodology, systems, applications and third party providers it utilizes in the provision of such Services; provided that Provider shall remain responsible for the performance of the Services in accordance with this Agreement .  The provision, use of and access to the Services shall be subject to (i) Provider’s business, operational and technical environment, standards, policies and procedures as in effect from time to time, (ii) Applicable Law and (iii) the terms of this Agreement.
 
Section 4.04 .  Liaisons.   (a)  Each party shall designate one representative to act as such party’s primary contact person in connection with the Services (each, a “ Liaison ”) and each party may also designate a separate liaison for each Service provided hereunder (who shall act as such party’s primary contact person in connection with the applicable Service).  The Liaisons will oversee the implementation and ongoing operation of this Agreement and shall attempt in good faith to resolve disputes between the parties.  The parties have designated their respective initial Liaisons and provided contact information therefor on Schedule B.  The parties shall ensure that their respective Liaisons shall meet in person or telephonically at such times as are reasonably requested by Provider or Recipient to review and discuss the status of, and any issues arising in connection with, the Services or this Agreement.  Each party may re-designate its Liaison from time to time; provided that it shall notify the other party in writing of the name and contact information for the newly designated Liaison in accordance with Section 8.05.
 
(b)      If the Liaisons are unable to make a decision, resolve a dispute or agree upon any necessary action, the unresolved matter shall be referred to the
 

 
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senior legal officer of each of Murphy Oil and Murphy USA notified to the other party for such purpose from time to time, who shall attempt in good faith within a period of 14 days to conclusively resolve any such matter.  If such senior legal officers of the parties are unable to resolve the dispute within 30 days from the date such dispute was submitted for consideration or such longer period as the parties may agree, either party may pursue its remedies under Section 8.07.
 
ARTICLE 5
Disclaimer, Liability And Indemnification
 
Section 5.01 .  E XCLUSION OF WARRANTIES .   EXCEPT AS EXPRESSLY SET FORTH IN THIS AGREEMENT, THE SERVICES ARE PROVIDED “AS-IS” WITH NO WARRANTIES, AND PROVIDER EXPRESSLY EXCLUDES AND DISCLAIMS ANY WARRANTIES UNDER OR ARISING AS A RESULT OF THIS AGREEMENT, WHETHER EXPRESS, IMPLIED OR STATUTORY, INCLUDING, WITHOUT LIMITATION, THE IMPLIED WARRANTIES OF MERCHANTABILITY, FITNESS FOR A PARTICULAR PURPOSE, TITLE, NON-INFRINGEMENT OR ANY OTHER WARRANTY WHATSOEVER.
 
Section 5.02.   Limitation of Liability .  (a) Recipient agrees that, except for the indemnity obligation set forth in Section 5.04, none of the Provider or its Affiliates or any of its or their respective directors, officers, agents, consultants, representatives and/or employees (each, a “ Provider Indemnified Person ”) shall have any liability, whether direct or indirect, in contract or tort or otherwise, to any Recipient Entity or any other Person for or in connection with the Services rendered or to be rendered by or on behalf of any Provider Indemnified Person pursuant to this Agreement, the transactions contemplated hereby or any actions or inactions by or on behalf of a Provider Indemnified Person in connection with any such Services or the transactions contemplated hereby, except to the extent any damages have resulted from such Provider Indemnified Person’s gross negligence or willful misconduct in connection with any such Services, actions or inactions.
 
(b)      Notwithstanding the provisions of Section 5.02(a), no Provider Indemnified Person or Recipient Indemnified Person shall be liable for any special, indirect, incidental, consequential or punitive damages of any kind whatsoever in any way due to, resulting from or arising in connection with any of the Services or the performance of or failure to perform Provider’s or Recipient’s obligations under this Agreement, as applicable, except to the extent the same are payable by a party or its Affiliates to an unaffiliated third party in respect of a claim by such third party and are covered by the other party’s indemnification obligations hereunder. This disclaimer applies without limitation (i) to claims arising from the provision of the Services or any failure or delay in connection therewith, (ii) to claims for lost profits or opportunities, (iii) regardless of the form of action, whether in
 

 
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contract, tort (including negligence), strict liability, or otherwise, and (iv) regardless of whether such damages are foreseeable or whether Provider or Recipient, as applicable, or any of its Affiliates has been advised of the possibility of such damages.

(c)      In addition to the foregoing, each party hereto agrees that it shall, in all circumstances, use commercially reasonable efforts to mitigate and otherwise minimize its damages and those of its Affiliates, whether direct or indirect, due to, resulting from or arising in connection with any failure by the other party to comply fully with its obligations under this Agreement.
 
Section 5.03.   Indemnification of Provider by Recipient .  Recipient agrees to indemnify and hold harmless each Provider Indemnified Person from and against any damages, and to reimburse each Provider Indemnified Person for all costs, damages, liabilities and fees and expenses (including reasonable attorneys’ fees and expenses and any other expenses reasonably incurred in connection with investigating, prosecuting or defending any Action) (collectively, “ Losses ”) incurred in investigating, preparing, pursuing, or defending any claim, action, proceeding, or investigation, whether or not in connection with pending or threatened litigation and whether or not any Provider Indemnified Person is a party (collectively, “ Actions ”), arising out of or in connection with Services rendered or to be rendered by or on behalf of any Provider Indemnified Person pursuant to this Agreement, the transactions contemplated hereby or any actions or inactions by or on behalf of any Provider Indemnified Person in connection with any such Services or transactions; provided that Recipient shall not be responsible for any Losses of any Provider Indemnified Person to the extent such Losses have resulted from such Provider Indemnified Person’s gross negligence or willful misconduct in connection with any of such Services, actions or inactions.
 
Section 5.04.   Indemnification of Recipient by Provider .  Provider agrees to indemnify and hold harmless the Recipient, each of its Affiliates and its and their respective directors, officers, agents, consultants, representatives and/or employees (each, a “ Recipient Indemnified Person ”) from and against any Losses incurred (including in investigating, preparing, or defending any Action) to the extent such Losses have arisen out of the gross negligence or willful misconduct of any Provider Indemnified Person in connection with the Services rendered or to be rendered pursuant to this Agreement.
 
Section 5.05.   Indemnification as Exclusive Remedy .  Without limitation to the termination rights provided under Sections 6.02(b) and 6.02(c) or to the rights under Section 8.08, the indemnification provisions of this Article 5 shall be the exclusive remedy for money damages for breach of this Agreement and any matters relating to this Agreement.
 
 
 
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Section 5.06 .   Conduct of Proceedings.   Any proceedings relating to indemnification under Section 5.03 or 5.04 shall be conducted in accordance with the procedures set forth in Section 6.04 of the Separation and Distribution Agreement.
 
 
ARTICLE 6
Term and Termination
 
Section 6.01.   Term .   Except as otherwise provided in this Article 6 or Section 8.03, the term of this Agreement with respect to each Service shall commence as of the Distribution Time, and shall cease on the earlier of (i) the date set forth in respect of such Service on the applicable Schedule hereto, (ii) the date that is 18 months after the Distribution Time (the “ End Date ,” unless extended pursuant to the proviso below) or (iii) such earlier date as determined in accordance with Section 6.02; provided that upon giving prior written notice to Provider at least 30 days prior to the then-applicable End Date, Recipient may extend the End Date until a date that is no more than 24 months after the Distribution Time.  This Agreement shall terminate in its entirety upon the expiration of the terms (as determined pursuant to the preceding sentence) of all Services; provided that the provisions of Articles 3, 5, 6 and 8 and Sections 7.01 and 7.02 shall survive any such termination indefinitely.
 
Section 6.02.   Termination . (a) Recipient may from time to time terminate this Agreement with respect to one or more of the Services it receives, in whole or in part, upon giving at least 30 days’ prior notice to Provider.
 
(b)      Provider may terminate any Service or any part thereof it provides at any time if Recipient shall have failed to perform any of its material obligations under this Agreement relating to any such Service, Provider has notified Recipient in writing of such failure and such failure (i) shall have continued uncured for a period of 30 days after receipt by Recipient of written notice of such failure or (ii) is incapable of remedy.  For the avoidance of doubt, the failure by Recipient to pay the full amount of any invoiced amount when due shall be considered a breach of Recipient’s material obligations under this Agreement, unless such failure to pay results from a good faith dispute in accordance with and subject to Section 3.03(b).
 
(c)      Recipient may terminate any Service it receives as provided in the applicable Schedule or at any time if Provider shall have failed to perform any of its material obligations under this Agreement relating to any such Service, Recipient has notified Provider in writing of such failure, and such failure (i) shall have continued for a period of 30 days after receipt by Provider of written notice of such failure or (ii) is incapable of remedy.
 

 
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(d)      At any time following announcement of a transaction involving a Change of Control of Recipient, Provider may elect, by delivery of notice in writing to Recipient, to terminate any or all Services hereunder, such termination to take effect on the date or dates specified by Provider in such notice; provided that without the written consent of Recipient, no such termination of Service shall occur prior to the closing of such Change of Control transaction.
 
(e)      Upon completion of the sale or other disposition of any portion of the Recipient Group’s business, assets or properties, Provider’s obligation to provide any Service in respect of the business, assets or properties so disposed shall terminate automatically and without any notice or other action by Provider, and the aggregate level or volume of such Service required to be provided to the Recipient (and, in the case of a Service, if any, for which the cost is not the Service Cost, the service costs payable by Recipient) in respect thereof shall be reduced appropriately; provided that Provider’s obligation hereunder (if any) to provide Services relating to reporting obligations in respect of such disposed business, assets or properties shall, to the extent related to the period prior to such disposition, not so terminate but, except as the parties may otherwise agree, shall continue until the time they would have terminated absent this Section 6.02(e).
 
(f)      Either party may terminate this Agreement at any time with immediate effect upon serving written notice upon the other party if the other party suffers an Insolvency Event.
 
(g)      For the avoidance of doubt, any notice of termination under this Section 6.02 shall be delivered in accordance with Section 8.05.
 
Section 6.03.   Effect of Termination .  (a) Other than as required by Applicable Law, upon termination of any Service pursuant to Section 6.02, Provider shall have no further obligation to provide the terminated Service and Recipient shall have no obligation to pay any fees relating to such Services; provided that, notwithstanding such termination, (i) Recipient shall remain liable to Provider for Service Costs and other fees owed and payable in respect of Services provided prior to the effective date of the termination and (ii) Recipient shall be responsible for the costs referred to in the second sentence to Section 3.01 to the extent set forth therein.
 
(b)      Termination of this Agreement as provided for herein shall not prejudice or affect any rights or remedies which shall have accrued to either party, a Recipient Indemnified Person or a Provider Indemnified Person in respect of Services provided or to have been provided prior to termination.
 

 
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ARTICLE 7
Additional Agreements
 
Section 7.01 .  Confidential Information .    (a) The parties hereby covenant and agree to keep, and to cause its Affiliates to keep, confidential all Confidential Information relating to the other party or any of such other party’s Affiliates.  Without limiting the generality of the foregoing, each party shall, and shall cause its Affiliates and its and their employees and agents to, exercise the same level of care with respect to Confidential Information relating to the other party or any of its Affiliates as it would with respect to proprietary information, materials and processes relating to itself or any of its Affiliates.  “ Confidential Information ” shall mean all confidential and proprietary information, materials and processes relating to a party or any Affiliate of such party obtained by the other party or any Affiliate of such other party at any time (whether prior to or after the date hereof) in any format whatsoever (whether orally, visually, in writing, electronically or in any other form) to the extent arising out of the rendering or receipt of Services hereunder (or preparations for the same or for the termination thereof) and shall include, but not be limited to, economic and business information or data, business plans, computer software and information relating to employees, vendors, customers, products, financial performance and projections, processes, strategies and systems but shall not include (i) information of the other party or its Affiliates which is or becomes generally available to the public other than by release in violation of the provisions of this Section 7.01(a), (ii) information of the other party or its Affiliates which is or becomes available on a non-confidential basis to a party from a source other than the other party or its Affiliates, provided the party in question reasonably believes that such source is not or was not bound by an obligation to the other party or one of its Affiliates to hold such information confidential and (iii) information developed independently by a party or its Affiliates without use or reference to otherwise Confidential Information of the other party or its Affiliates.  Except with the prior written consent of the other party, each party will, and will cause its Affiliates to, use the other party’s and its Affiliates’ Confidential Information only in connection with the performance of its obligations hereunder and each party shall, and shall cause its Affiliates to, use commercially reasonable efforts to restrict access to the other party’s and its Affiliates’ Confidential Information to those employees of such party and its Affiliates requiring access for the purpose of providing or receiving Services hereunder.  Notwithstanding any provision of this Section 7.01(a) to the contrary, a party may disclose such portion of the Confidential Information relating to the other party or its Affiliates to the extent, but only to the extent, the disclosing party reasonably believes that such disclosure is required under Applicable Law or the rules of a Governmental Authority; provided that if permissible under Applicable Law and practicable, the disclosing party shall first notify the other party hereto of such requirement and allow such party a reasonable opportunity to seek a protective order or other appropriate remedy to prevent such disclosure.  The
 

 
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parties acknowledge that money damages would not be a sufficient remedy for any breach of the provisions of this Section 7.01(a) and that the non-breaching party shall be entitled to equitable relief in a court of law in the event of, or to prevent, a breach of this Section 7.01(a).  In the event that a party learns or has reason to believe that Confidential Information of the other party or its Affiliates has been disclosed or accessed by an unauthorized Person, such party will immediately give notice of such event to its Liaison at the other party.
 
(b)      Upon the termination of this Agreement, except to the extent otherwise required by Applicable Law and/or its internal policies and procedures , each party shall, at its election, promptly return to the other party or destroy all Confidential Information of the other received under or pursuant to the performance of this Agreement (including, to the extent practicable, all copies (in any and all media) and summaries thereof) that is within the such party’s or its Affiliates’ possession, power, custody or control; provided that any Confidential Information retained by such party or its Affiliates has shall continue to be subject to Section 7.01(a) .   Promptly upon the request of a party, the other party shall confirm in writing to such first party that it has complied with this Section  7.01(b) .
 
Section 7.02 .  Ownership of Assets.   (a) Murphy Oil Systems and any and all enhancements thereof or improvements thereto are and shall remain the sole exclusive property of the Murphy Oil Entities and/or its Affiliates and/or its or their suppliers as applicable.
 
(b)      Murphy USA Systems and any and all enhancements thereof or improvements thereto are and shall remain the sole exclusive property of the Murphy USA Entities and/or its Affiliates and/or its or their suppliers as applicable.
 
(c)      With respect to any Systems that a Murphy Oil Entity, a Murphy USA Entity, or any of their respective Affiliates, as applicable, is required to maintain or enhance hereunder, as between the Murphy Oil Entities and the Murphy USA Entities, all right, title and interest in and to such enhancements and any related documentation, whether created by the party that provides the Service or any employee, contractor, Affiliate or supplier on such party’s behalf, shall be owned exclusively by and vested exclusively in the party or its Group member by whom the applicable System is owned, licensed or provided.
 
(d)      As between any Murphy Oil Entity, on the one hand, and any Murphy USA Entity, on the other hand, all right, title and interest in and to all data processed hereunder shall be owned exclusively by the Murphy Oil Entity or the Murphy USA Entity that originally supplied it to the other, provided that all data created hereunder in connection with the delivery of any Service to Recipient or otherwise on behalf of Recipient shall be owned exclusively by Recipient.  Each of Murphy Oil and Murphy USA hereby assign to the other, and shall cause any of its
 

 
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respective employees, contractors, Affiliates, suppliers or third parties performing Services on its behalf pursuant to this Agreement to assign to the other, as applicable, all right, title and interest that any Murphy Oil Entity or any Murphy USA Entity, as applicable, may have in the other’s or its Affiliates’ data acquired hereunder.
 
Section 7.03 .  Security.   Each party, its Affiliates and their respective employees, authorized agents and subcontractors shall only use or access such other party’s and its Affiliates’ Systems, premises or data to the extent such Person is authorized by the other party or pursuant to the terms hereof.  Each party, its Affiliates and their employees, authorized agents and subcontractors shall comply with the other party’s and its Affiliates’ policies and procedures in relation to the use and access of the other party’s and its Affiliates’ Systems provided that they do not conflict with the terms of this Agreement; provided that to the extent such policies and procedures of Recipient make the provision of a given Service impracticable, Provider will be relieved of the obligation to provide such Service; provided further that Provider will give reasonable advance notice prior to terminating any Services pursuant to the preceding proviso.
 
Section 7.04 .  Access to Information and Audit.   Subject to Applicable Law, Recipient shall, and shall cause its Affiliates to, with respect to any Service during the term of such Service, upon reasonable advance notice, afford Provider and its representatives reasonable access, during normal business hours, to the employees, properties, books and records and other documents that are reasonably requested in connection with the provision and receipt of such Service hereunder.  Recipient or its representatives shall have reasonable access, after requesting such access in writing in advance, during normal business hours to such records for the purpose of auditing and verifying the accuracy of the invoices submitted regarding such amounts due.  Any such audits performed by or on behalf of Recipient shall be at Recipient’s sole cost and expense.  Recipient shall have the right to audit Provider’s books for a period of one (1) year after the month in which the Services were rendered, except in those circumstances where contracts by Provider or any of its Affiliates with third parties limit the audit period to less than one year.
 
Section 7.05.   Compliance with Applicable Law.   Each party shall (and shall cause its Affiliates to) at all times fully comply with all Applicable Law to which such party and its Affiliates (to the extent such Affiliates are engaged in the receipt or provision of Services) is subject in connection with the receipt or provision of Services hereunder, as applicable.
 
Section 7.06 .  Labor Matters.   All labor matters relating to employees of Provider and its Affiliates (including, without limitation, employees involved in the provision of Services to Recipient or any of its Affiliates) shall be within the exclusive control of Provider, and Recipient shall not take any action affecting such matters.  Nothing in this Agreement is intended to transfer the employment of
 

 
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employees engaged in the provision of any Service from one party or its Affiliates to the other or its Affiliates.  All employees and representatives of a party and any of its Affiliates will be deemed for all compensation, employee benefits, tax and social security contribution purposes to be employees or representatives of such party or its Affiliates (or their subcontractors) and not employees or representatives of the other party or any of its Affiliates (or their subcontractors).  In providing the Services, such employees and representatives of Provider and its Affiliates (or their subcontractors) will be under the direction, control and supervision of Provider or its Affiliates (or their subcontractors) and not of Recipient or its Affiliates.
 
Section 7.07 .  Record Retention.   Each party shall take reasonable steps to preserve and maintain complete and accurate accounts, books, and records of and supporting documentation relating to the Services provided hereunder, which records shall be retained by such party and/or its Affiliates for the period of time specified in such party’s record retention policies and procedures (which shall comply with Applicable Law).
 
 
ARTICLE 8
Miscellaneous
 
Section 8.01.   No Agency; Independent Contractor Status .   Nothing in this Agreement shall constitute or be deemed to constitute a partnership or joint venture between the parties hereto or constitute or be deemed to constitute any party the agent or employee of the other party for any purpose whatsoever and neither party shall have authority or power to bind the other or to contract in the name of, or create a liability against, the other in any way or for any purpose.  The parties hereto acknowledge and agree that Provider is an independent contractor in the performance of each and every part of this Agreement and nothing herein shall be construed to be inconsistent with this status.  Subject to the terms and conditions of this Agreement, Provider shall have the authority to select the means, methods and manner by which any Service is performed.
 
Section 8.02.   Subcontractors .   Provider may hire or engage one or more subcontractors to perform all or any of its obligations under this Agreement; provided that, (i) Provider shall use the same degree of care in selecting any subcontractors as it would if such subcontractor was being retained to provide similar services to Provider and (ii) Provider shall in all cases remain responsible for ensuring that obligations with respect to the standards of services set forth in this Agreement are satisfied with respect to any Service provided by a subcontractor hired or engaged by Provider.
 
Section 8.03.   Force Majeure . (a) For purposes of this Section 8.03, “ force majeure ” means an event beyond the reasonable control of either party, which by
 

 
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its nature was not foreseen by such party, or, if it was foreseen, was not reasonably avoidable, and includes without limitation, acts of God, storms, floods, riots, fires, sabotage, civil commotion or civil unrest, interference by civil or military authorities, threat, declaration, continuation, escalation or acts of war (declared or undeclared) or acts of terrorism, failure or shortage of energy sources, raw materials or components, strike, walkout, lockout or other labor trouble or shortage, delays by unaffiliated suppliers or carriers, and acts, omissions or delays in acting by any Governmental Authority or the other party.
 
(b)      Without limiting the generality of Section 5.02, neither party shall be under any liability for failure to fulfill any obligation to provide Services under this Agreement, so long as and to the extent to which the fulfillment of such obligation is prevented, frustrated, hindered, or delayed as a consequence of circumstances of force majeure; provided that (i) such party shall have used commercially reasonable efforts to minimize to the extent practicable the effect of force majeure on its obligations hereunder and (ii) nothing in this Section 8.03 shall be construed to require the settlement of any strike, walkout, lockout or other labor dispute on terms which, in the reasonable judgment of the affected party, are contrary to its interests.  It is understood that the settlement of a strike, walkout, lockout or other labor dispute will be entirely within the discretion of the affected party.  The party affected by the force majeure event shall notify the other party of that fact as soon as practicable.
 
Section 8.04.   Entire Agreement .  This Agreement constitutes the entire agreement between the parties with respect to the subject matter hereof and supersedes all prior agreements and understandings, both oral and written, between the parties with respect to the subject matter hereof.
 
Section 8.05.   Notices .   Any notice, instruction, direction or demand under the terms of this Agreement required to be in writing shall be duly given upon delivery, if delivered by hand, facsimile transmission, or mail, to the following addresses:
 
If to Murphy Oil to:
 
Murphy Oil Corporation
200 Peach Street
P.O. Box 7000
El Dorado, Arkansas 71731
Attn: General Counsel
Facsimile: 870-864-6489


 
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If to Murphy USA to:
 
Murphy USA Inc.
200 Peach Street
P.O. Box 7300
El Dorado, Arkansas 71731
Attn: General Counsel
Facsimile: 870-881-6893
 

or such other address or facsimile number as such party may hereafter specify for the purpose by notice to the other party hereto; provided that any notice of termination under Section 6.02 must be signed by the applicable department head of the terminating party, or in the case of termination of more than one Service, the applicable department heads of the terminating party, for the relevant Service(s).  All such notices, requests and other communications shall be deemed received on the date of receipt by the recipient thereof if received prior to 5:00 p.m. in the place of receipt and such day is a Business Day in the place of receipt.  Otherwise, any such notice, request or communication shall be deemed not to have been received until the next succeeding Business Day in the place of receipt.
 
Section 8.06 .   Governing Law .   This Agreement shall be governed by and construed in accordance with the law of the State of Arkansas, without regard to the conflicts of law rules of such state.
 
Section 8.07 .  Jurisdiction. The parties hereto agree that any suit, action or proceeding seeking to enforce any provision of, or based on any matter arising out of or in connection with, this Agreement or the transactions contemplated hereby shall be brought in the United States District Court for the Western District of Arkansas, El Dorado Division or any Arkansas State court sitting in El Dorado, Arkansas, so long as one of such courts shall have subject matter jurisdiction over such suit, action or proceeding, and that any cause of action arising out of this Agreement shall be deemed to have arisen from the transaction of business in the State of Arkansas, and each of the parties hereby irrevocably consents to the exclusive jurisdiction of such courts (and of the appropriate appellate courts therefrom) in any such suit, action or proceeding and irrevocably waives, to the fullest extent permitted by law, any objection that it may now or hereafter have to the laying of the venue of any such suit, action or proceeding in any such court or that any such suit, action or proceeding brought in any such court has been brought in an inconvenient forum.  Process in any such suit, action or proceeding may be served on any party at such party’s corporate headquarters.  Without limiting the foregoing, each party agrees that service of process on such party as provided in Section 8.05 shall be deemed effective service of process on such party.
 

 
19
 

Section 8.08. Specific Performance .  The parties hereto agree that irreparable damage would occur if any provision of this Agreement were not performed in accordance with the terms hereof and that the parties shall be entitled to an injunction or injunctions to prevent breaches of this Agreement or to enforce specifically the performance of the terms and provisions hereof in any court set forth in Section 8.07, in addition to any other remedy to which they are entitled at law or in equity.
 
Section 8.09.   WAIVER OF JURY TRIAL .  EACH OF THE PARTIES HERETO HEREBY IRREVOCABLY WAIVES ANY AND ALL RIGHT TO TRIAL BY JURY IN ANY LEGAL PROCEEDING ARISING OUT OF OR RELATED TO THIS AGREEMENT OR THE TRANSACTIONS CONTEMPLATED HEREBY.
 
Section 8.10.   Severability .   If any term, provision, covenant or restriction of this Agreement is held by a court of competent jurisdiction or other Governmental Authority to be invalid, void or unenforceable, the remainder of the terms, provisions, covenants and restrictions of this Agreement shall remain in full force and effect and shall in no way be affected, impaired or invalidated so long as the economic or legal substance of the transactions contemplated hereby is not affected in any manner materially adverse to any party.  Upon such a determination, the parties shall negotiate in good faith to modify this Agreement so as to effect the original intent of the parties as closely as possible in an acceptable manner in order that the transactions contemplated hereby be consummated as originally contemplated to the fullest extent possible.
 
Section 8.11.   Amendments and Waivers .   (a)  Any provision of this Agreement (including the Schedules hereto) may be amended or waived if, and only if, such amendment or waiver is in writing and is signed, in the case of an amendment, by Murphy Oil and Murphy USA, or in the case of a waiver, by the party against whom the waiver is to be effective.
 
(b)      No failure or delay by any party in exercising any right, power or privilege hereunder shall operate as a waiver thereof nor shall any single or partial exercise thereof preclude any other or further exercise thereof or the exercise of any other right, power or privilege.   The rights and remedies herein provided shall be cumulative and not exclusive of any rights or remedies provided by Applicable Law.
 
Section 8.12.   Successors and Assigns .  The provisions of this Agreement shall be binding upon and inure to the benefit of the parties hereto and their respective successors and assigns; provided that no party may assign, delegate or otherwise transfer any of its rights or obligations under this Agreement without the prior written consent of the other party hereto.
 

 
20
 


Section 8.13.   Third Party Beneficiaries .  Except as set forth in Sections 5.02, 5.03 and 5.04, no provision of this Agreement is intended to, or shall, confer any third party beneficiary or other rights or remedies upon any Person other than the parties hereto .
 
Section 8.14 .   Counterparts .   This Agreement may be executed in any  number of counterparts, each of which shall be deemed an original and all of which, when taken together, shall constitute one agreement.
 
Section 8.15 .  Construction and Interpretation.   The parties hereto agree that any rule of construction to the effect that ambiguities are to be resolved against the drafting party shall not be applied in the construction or interpretation of this Agreement.  Each party shall cause to be performed all actions, agreements and obligations set forth herein to be performed by any member of such party’s Group.
 
Section 8.16.   Conflict of Terms .  If the terms of this Agreement conflict with terms of the Separation and Distribution Agreement with respect to any matter, then the terms of this Agreement will control.
 
 
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21
 
 
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be duly executed by their respective authorized officers as of the date first above written.
 

 
MURPHY OIL CORPORATION
 
By:
/s/ Walter K. Compton
 
Name:
Walter K. Compton
 
Title:
Senior Vice President and General Counsel

 
MURPHY USA INC.
 
By:
/s/ John A. Moore
 
Name:
John A. Moore
 
Title:
Senior Vice President, General Counsel and Secretary
 
 
 
 
 
 
(Signature Page to Transition Services Agreement)
 
 
 
 
 
Schedule A
 
Services
 
TRANSITION SERVICES AGREEMENT – MASTER SCHEDULE OF SERVICES
 
UNIT
AREA/CC NAME
SERVICES PROVIDED
TERMS
 
TAX
 
Tax compliance, audit & provisioning
 
Services MUR will provide to MUSA:
 
A1)     Federal and state income tax planning and research support
A2)     Income tax provisioning support (monthly and/or quarterly)
A3)     Post-filing income tax return reconciliations to accrual support ("true-ups")
A4)     Assistance with income tax estimated payments and tax compliance support for federal income and state income and franchise tax return filings (tax elections, tax return reviews, CorpTax software application usage, and tax depreciation knowledge transfer)
A5)     Any other incidental income tax support services currently conducted for MUSA and its subsidiaries by the MUR income tax personnel
 
Services MUSA will provide to MUR:
 
B1)     Periodic assistance in knowledge transfer and support related to Sales/Use and Ad Valorem tax matters involving MUR or upstream assets, processes and records
B2)     MUSA income tax personnel will provide interim tax compliance support on any pre-spin 2013 (as well as any post-spin 2013) federal consolidated or state income tax filings (where they have past experience or unique
 
 
1)    Services, whether by MUR or MUSA, will be provided during normal business hours of MUR and MUSA and may include overtime hour support, if necessary, to meet specific financial close or tax due date compliance deadlines
 
2)    MUR support to MUSA will be overseen by these key division personnel:
·       Income Tax Compliance (Mgr. Tax Compliance)
·       Income Tax Audits (Asst. Mgr. Audit and International Tax)
·      Income Tax Provisioning (Asst. Mgr. Financial Tax)
·       Excise/Sales/Ad Valorem Tax (Asst. Mgr. Excise and sales Tax)
·      Tax Research (Mgr. Research and Foreign Tax)
 
 3)   MUSA support to MUR will be overseen by the department head or employee designated most knowledgeable or most experienced regarding the subject:
 
·      Excise/Sales Tax Support
·      Ad Valorem Tax
·      Income Tax Compliance
 
 
 
 
 
 
 
 
A-1
 
 
 
   
individual knowledge) necessary for the remaining MUR income tax group to be tax compliant
 
 
 
 
A-2
 
 
 
AUDIT
 
Internal audit
 
Services MUR will provide to MUSA:
 
A1)   Consulting on historical audit activity as required
 
Services MUSA will provide to MUR:
 
B1)     Periodic assistance in knowledge transfer and support related to operated JV audit coordination activities
B2)     eriodic assistance in knowledge transfer and support related to non-operated JV audit activities including consulting on historical audit activity
 
1)    Services, whether by MUR or MUSA, will be provided during normal business hours of MUR and MUSA and may include overtime hour support, if necessary, to meet specific due date deadlines
 
2)    MUR support to MUSA will be overseen by these key division personnel:
·       Chief Audit Executive responsibilities to include Audit Committee communications, risk assessment and strategic direction (Director – Internal Audit)
·       Quality Assurance and TeamMate Administration (Designee of the Director of Internal Audit)
 
3)    MUSA support to MUR will be overseen by the department head or employee designated most knowledgeable or most experienced regarding the subject :
    ·       Non-operated JV audits
    ·       Operated JV audits
 
ERM
 
Enterprise Risk Management
 
 
Services MUR will provide to MUSA:
 
A1)     Operation of Middle Office for Corn Hedging Program
A2)     Completion and delivery of Annual Enterprise Risk Assessment
A3)     Risk Analysis services as requested by MUSA
A4)     Facilitation of Business Continuity Planning with head of MUSA program
 
 
1)    Services provided by MUR to MUSA will be itemized in a written statement of work to be performed
 
2)    MUR support to MUSA will be overseen by the Director of Enterprise Risk Management
 
3)    Improvements will be offered to MUSA; however, MUSA remains responsible for implementation of suggested improvements
 
 
 
EHS
 
Enterprise Health and Safety
  
Services MUR will provide to MUSA:
 
A1)    General EHS consulting as requested
A2)    EHS data support and analysis for any
 
1)    Services, whether by MUR or MUSA, will be provided during normal business hours of MUR and MUSA
 
 
A-3
 
 
 
 
transactions involving former MUR/MUSA Sites
A3)     Regulatory support as requested
A4)     Any other incidental EHS support services currently provided for MUSA by MUR EHS
 
Services MUSA will provide to MUR:
 
B1)     Periodic assistance in knowledge transfer and support related to EHS matters involving corporate or downstream assets, processes and records
B2)     Any EHS  filings (where MUSA EHS staff have past experience or unique individual knowledge) necessary for MUR legacy issues, as appropriate
2)    MUR support to MUSA will be overseen by the Director of Corporate EHS
 
3)    MUSA support to MUR will be overseen by these key division personnel: (a)EHS Manager with responsibility for any specific issue in question, including retail remediation and retail safety, and (b) Sr. Director, Midstream EHS
 
 
 
TREASURY
 
Treasury
 
MUR will provide to MUSA periodic assistance in knowledge transfer and support related to the following processes:
 
A1)    Cash disbursements
A2)    Cash receipts
A3)    Cash management
A4)    Bank account maintenance
A5)    Working capital management
A6)    Reporting
 
MUSA will provide to MUR periodic assistance in knowledge transfer and support related to the following processes:
 
B1)    Cash disbursements
B2)    Cash receipts
B3)    Cash management
B4)    Bank account maintenance
B5)    Working capital management
B6)    Reporting
 
 1)   Services, whether by MUR or MUSA, will be provided during normal business hours of MUR and MUSA and may include overtime hour support, if necessary, to meet specific due date deadlines
 
 
 
 
 
A-4
 
 
 
 
LAW
 
Legal
 
Services MUR will provide to MUSA:
 
A1)     Securities law consultation and assistance
A2)     Labor law/EEOC consultation and assistance
A3)     Clerical assistance
A4)     Any other incidental legal support services currently conducted for MUSA by MUR legal personnel
 
Services MUSA will provide to MUR:
 
B1)      Assistance with disposition of UK downstream assets (Murphy Petroleum)
B2)      Assistance with Lobbying Reporting/Corporate PAC/Governmental Affairs issues
B3)      Garnishment/Child Support
B4)      Clerical assistance
B5)      Any other incidental legal support services currently conducted for MUR by MUSA legal personnel
 
 
1)    Services, whether by MUR or MUSA, will be provided during normal business hours of MUR and MUSA and may include overtime hour support, if necessary, to meet specific due date compliance deadlines
 
2)    MUR support to MUSA will be overseen by these key division personnel:
•  Securities law (Sr. Attorney with knowledge)
•  Labor/EEOC (Mgr. Law and Sr. Attorney with knowledge)
•  Clerical assistance (staff)
 
3)    MUSA support to MUR will be overseen by these key division personnel:
•  UK Downstream  (Associate General Counsel)
•  Lobbying/PAC/Governmental Affairs (Associate General Counsel)
•  Garnishment/Child Support (staff)
•   Clerical assistance (staff)
 
 
 
FINANCE
 
Controller / Finance
 
Services MUR will provide to MUSA:
 
A1)     Knowledge sharing for Hyperion, JDE, and APX systems and subsystems as requested
A2)     Knowledge sharing for SEC reporting, 10-Q and 10-K prep, XBRL services, printing and administration of SEC reporting and all related ancillary services such as annual report printing
A3)     Assistance with reconciliation of information between accounting systems to ensure that both Company's systems are working properly from a financial reporting perspective
 
1)    Services, whether by MUR or MUSA, will be provided during normal business hours of MUR and MUSA and may include overtime hour support, if necessary, to meet specific financial close or tax due date compliance deadlines
 
2)    MUR support to MUSA will be overseen by key division personnel designated most knowledgeable or experienced regarding the following subjects:
·  Hyperion support and guidance
·  JDE support and guidance
·  APX system support and guidance
·  SEC reporting, 10-Q and 10-K prep,
 
 
 
A-5
 
 
     
A4)     Assistance in developing unclaimed property reporting for MUSA
A5)     Assistance with Sarbanes Oxley testing and results as requested for pre transaction periods as well as allowing access to records for MUSA SOX testing post transaction as requested
A6)     Provide employee time regarding Ethanol plant activities for transition of responsibilities.
 
Services MUSA will provide to MUR:
 
B1)      Knowledge sharing for Hyperion, JDE, and APX systems and related subsystems as requested
B2)      Audit support and access to historical data for any systems controlled by MUSA post transaction (i.e., Solarc, PDI, Reconnet, etc.)
B3)      Assistance with reconciliation of information between accounting systems to ensure that both Company's systems are working properly from a financial reporting perspective
B4)      Assistance with Sarbanes Oxley testing and results as requested for pre transaction periods as well as allowing access to records for Murphy SOX testing post transaction as requested
B5)      MUSA station banking group to assist with establishing a new bank account reconciliation function within Murphy Controller's department post spin
 
printing and admin of SEC reporting and other services
·  Reconciliation services between MUR and MUSA
·  XBRL services
·  Unclaimed Property
·  Sarbanes Oxley testing and results / TSA related testing between companies
 
3)    MUSA support to MUR will be overseen by the department head or employee designated most knowledgeable or experienced regarding the subject:
·   Hyperion support and guidance
·  JDE support and guidance
·  APX system support and guidance
·  Solarc, PDI, Great Plains and Reconnet along with any other downstream accounting systems
·  Reconciliation services between MUSA and MUR
·  Sarbanes Oxley testing and results
·  Station banking to assist with setup of reconciliation process for bank accounts
 
 
 
 
A-6
 
 
 
CORPORATE IT
 
Backup and Regulatory Audit Requests
 
Services MUR will provide to MUSA:
 
Restoration of files from backup tapes held by MUR. The availability of the requested files will be subject to MUR's normal tape retention policy
 
Both MUR and MUSA will provide, when requested, data, reports or information related to any IT regulatory compliance audits
 
1)    Services will be provided during MUR's normal business hours except in the event of a Declared Emergency. A Declared Emergency is defined as an event mutually identified by the designated MUR and MUSA management in which critical business systems are inoperative, impaired or otherwise unavailable for immediately essential business activity
 
2)    Best efforts will be made to respond to a Declared Emergency, as defined above, within two hours of the request.  Best efforts will be made to respond to all other requests for services within one business day of the request. No other SLA will be required or provided
 
3)    Support services will be overseen by the MUR Director Global IT Operations
 
4)    Services regarding regulatory compliance audit requests will be managed by each company’s respective head of IT
 
5)    Both parties will use diligent good faith efforts to respond to any regulatory compliance audit requests within five (5) business days, but there is no further SLA provided or required
 
CORPORATE IT
 
Oracle Hyperion
 
MUR and MUSA will provide services to each other requiring expert knowledge of the Oracle Hyperion system provided and to the extent that such knowledge exists within the requested IT organization at the time of the requested service. Services will include, but not be limited to, consultation, problem resolution and knowledge transfer. Services will not include ongoing routine system administration, maintenance, support, or development
 
1)    Services will be provided during MUR's normal business hours except in the event of a Declared Emergency, as defined above
 
2)    Best efforts will be made to respond to a Declared Emergency within two hours of the request. Best efforts will be made to respond to all other requests for services within one business day of the request. No other SLA will be required or provided
 
 
 
 
A-7
 
 
     
3)    Support services will be overseen by the MUR Director System Support and MUSA Manager
 
CORPORATE IT
 
Network
 
MUR will provide to MUSA services requiring expert knowledge of routers, switches and other network devices and systems provided and to the extent that such knowledge exists within the MUR IT organization at the time of the requested service. Services will include, but not be limited to, consultation, problem resolution and knowledge transfer. Services will not include ongoing routine system administration, maintenance, support, or development
 
1)    Services will be provided during MUR's normal business hours except in the event of a Declared Emergency, as defined above
 
2)    Best efforts will be made to respond to a Declared Emergency within two hours of the request. Best efforts will be made to respond to all other requests for services within one business day of the request. No other SLA will be required or provided
 
3)    Support services will be overseen by the MUR Director Global IT Operations
 
CORPORATE IT
 
COBOL
 
MUSA will provide to MUR support services requiring expert knowledge of the in-house developed HR/payroll related systems provided and to the extent that such knowledge exists within the MUSA IT organization at the time of the requested service. Services will include, but not be limited to, consultation, problem resolution and knowledge transfer. Services will not include ongoing routine system administration, maintenance, support, or development
 
1)    Services will be provided during MUR's normal business hours except in the event of a Declared Emergency, as defined above
 
2)    Best efforts will be made to respond to a Declared Emergency within two hours of the request. Best efforts will be made to respond to all other requests for services within one business day of the request. No other SLA will be required or provided
 
3)    Support services will be overseen by a MUSA IT Manager
 
CORPORATE IT
 
JD Edwards
 
MUR will provide to MUSA services requiring expert knowledge of the Oracle JD Edwards system provided and to the extent that such knowledge exists within the MUR IT organization at the time of the requested service. Services will include, but not be limited to, consultation, problem resolution and knowledge transfer. Services will not
 
1)    Services will be provided during MUR's normal business hours except in the event of a Declared Emergency, as defined above
 
2)    Best efforts will be made to respond to a Declared Emergency within two hours of the request. Best efforts will be made to
 
 
 
A-8
 
 
    include ongoing routine system administration, maintenance, support, or development
       respond to all other requests for services within one business day of the request. No other SLA will be required or provided
 
3)    Support services will be overseen by the MUR Director Systems Support
 
CORPORATE IT
 
Vault
 
MUR will provide MUSA services requiring expert knowledge of the EMC Vault system provided and to the extent that such knowledge exists within the MUR IT organization at the time of the requested service. Services will include, but not be limited to, consultation, problem resolution and knowledge transfer. Services will not include ongoing routine system administration, maintenance, support, or development
 
1)    Services will be provided during MUR's normal business hours except in the event of a Declared Emergency, as defined above
 
2)    Best efforts will be made to respond to a Declared Emergency within two hours of the request. Best efforts will be made to respond to all other requests for services within one business day of the request. No other SLA will be required or provided
 
3)    Support services will be overseen by the MUR Director Global IT Operations
 
CORPORATE IT
 
Documentum
 
MUSA will provide to MUR support services requiring expert knowledge of the EMC Documentum/APX system provided and to the extent that the knowledge exists within the MUSA IT organization at the time of the requested service. Services will include, but not be limited to, consultation, problem resolution and knowledge transfer. Services will not include ongoing routine system administration, maintenance, support, or development
 
1)    Services will be provided during MUR's normal business hours except in the event of a Declared Emergency, as defined above
 
2)    Best efforts will be made to respond to a Declared Emergency within two hours of the request. Best efforts will be made to respond to all other requests for services within one business day of the request. No other SLA will be required or provided
 
3)    Support services will be overseen by a MUSA IT manager
 
 
 
A-9
 
 
 
 
CORPORATE IT
 
Lotus Notes
 
MUR will provide to MUSA services requiring expert knowledge of the IBM Lotus Notes system provided and to the extent that Such knowledge exists within the MUR IT organization at the time of the requested service. Services will include, but not be limited to, consultation, problem resolution and knowledge transfer. Services will not include ongoing routine system administration, maintenance, support, or development
 
1)    Services will be provided during MUR's normal business hours except in the event of a Declared Emergency, as defined above
 
2)    Best efforts will be made to respond to a Declared Emergency, within two hours of the request. Best efforts will be made to respond to all other requests for services within one business day of the request. No other SLA will be required or provided
 
3)    Support services will be overseen by the MUR Director Global IT Operations
 
ADMIN & FACILITIES
 
Administrative Services
 
The MUR Administrative Services group will function as it does prior to the  transaction, Details regarding Administrative Services are further set forth in the Lease Agreement regarding the building located at 200 Peach Street, El Dorado, AR
 
 
These services will be coordinated by MUR’s Director of Administrative Services and MUSA’s General Counsel
 
CREDIT
 
Credit
 
MUR and MUSA will each provide the other with the following services:
 
A1)     Financial analysis of current and new customers
A2)     Manage and handle negotiations of guarantees
A3)     Miscellaneous functions related to evaluating credit, risk mitigation, and   exposures for the other entity.
 
 
1)    Services, whether by MUR or MUSA, will be provided during normal business hours of MUR and MUSA and may include overtime hour support, if necessary
 
2)    Financial analysis and risk mitigation support will be managed by each company’s Manager and Supervisor of Credit
 
3)    Guarantee execution and negotiation support will be managed by each company’s Sr. Credit Assistant
 
4)    Administrative and collections support will be managed by each company’s Credit Analysts and Credit Assistants.
PAYROLL   Payroll   MUR will administer payroll for MUSA in 1)    Services will be provided during normal
 
 
 
A-10
 
 
 
 
 
Administration
 
the same manner as immediately prior to the transaction.  These services include, but are not limited to:
 
A1)     Banking Authorization
A2)     Deductions Tracking and Reporting
A3)     Deductions Not Taken Calculations and Tracking
A4)     Earnings Tracking and Management
A5)     Processing Imputed Income for Payroll
A6)     Disability Income Processing
A7)     Retro Pay Processing
A8)     Payroll Processing
A9)     Management of (Money Network) Pay Cards
A10)   Checks and Advices Creating and Mailing
A11)   Interim Check Processing
A12)   Accounting (e.g., Vacation Liability Calculation, General Ledger Interface Reconciliation)
A13)   Tax Filing
A14)   Year End Processing
A15)   Employee Support
A16)   Reporting
A17)   Garnishments Processing
A18)   Support outsourcing of the current MUSA payroll administration function in a consulting role by sharing knowledge on the current state scope, processes, and technology
 
business hours of MUR and MUSA and may include overtime hour support, if necessary, to meet specific due date deadlines
 
 
NOTE:   Printers will be ordered by MUR for the service recipient, which cannot be returned. These charges may be invoiced if service is terminated early.
 
 
 
 
A-11
 
 
 
HUMAN RESOURCES
 
Benefits Administration
 
Services MUR will provide to MUSA:
 
A1)     Assistance with benefits administration for all Employee Benefit programs that are currently offered to retail employees prior to the transaction date.  Includes all duplicated or newly created programs established as of the effective date of the transaction
A2)     Assistance with processing of benefit enrollments, changes, etc.
A3)     Assistance with payroll processing as it relates to benefit deductions, etc., including reconciling and processing vendor payments
A4)     Assistance with processing employee deductions and vendor premium payments and forwarding to various vendors
A5)     Assistance with FMLA and other sick leave administration
A6)     Assistance with employee questions
A7)     Assistance with annual renewals of employee benefit programs
A8)     Assistance with COBRA administration (initial notices and continuation benefits)
A9)     Assistance with compliance requirements such as 5500    reports, PBGC, ERISA, etc.
A10)   Assistance with annual census data
A11)   Assistance with developing and providing employee communications as requested for compliance purposes or as needed to communicate benefit plans
A12)   Assistance with year-end bonus, LTI and STI calculations
A13)   Assistance with 2014 AAP/EEO-1/Vets 100 reports.
A14)   Assistance with training of new benefits staff as needed
A15)   Assistance with Health Care Reform issues
 
1)    Services, whether by MUR or MUSA, will be provided during normal business hours of MUR and MUSA and may include overtime hour support, if necessary
 
 
 
 
 
A-12
 
 
     
A16)   Advisory services on policies and programs, if required
A17)   Support outsourcing of the current MUSA benefit administration function in a consulting role by sharing knowledge on the current state scope, processes, and technology
 
Out of Scope Services MUR will not provide to MUSA:
 
AY)    Assistance with new benefit programs created after the transaction date, except as may be required due to national health care reform
AZ)    Assistance with modifying or changing existing programs after the transaction date, except as may be required due to national health care reform
 
Services MUSA will provide to MUR:
 
B1)     Providing access to employee data as needed
B2)     Providing access to Benefits Staff transferred to MUSA to allow for orderly transition on both sides
B3)     Advisory services on policies and programs, if requested
 
 
INSURANCE
 
Corporate Insurance
 
Services MUR will provide to MUSA:
 
A1)    Assistance training personnel as requested
A2)    Policy renewal support
A3)    Assistance with contract review as requested
A4)    Assistance with administering claims as requested
 
Services MUSA will provide to MUR:
 
B1)     Assistance with training of replacement personnel as   requested
B2)     Policy renewal support
 
 
 1)   Services, whether by MUR or MUSA, will be provided during normal business hours of MUR and MUSA and may include overtime hour support, if necessary, to meet specific deadlines
 
 2)   MUR support to MUSA will be overseen by these key personnel:
· Assistance with training of replacement personnel as requested (Claims Mgr.)
· Policy renewal support (Director Corporate Insurance)
· Assistance with contract review (Director Corporate Insurance)
· Assistance with administering claims as
 
 
 
A-13
 
 
     
B3)    Assistance with contract review
B4)    Assistance with administering claims as requested
B5)    Administrative support as requested
 
needed (Claims Mgr.)
 
 3)   MUSA support to MUR will be overseen by these key personnel:
·  Assistance with training of replacement personnel as needed (Insurance Asst.)
·  Policy renewal support (Mgr. Insurance)
·  Assistance with contract review (Claims Asst.)
·  Assistance with administering claims as needed (Sr. Insurance Analyst)
·  Administrative support as needed (Insurance Asst.)
 
NOTE: Lease of a satellite claims office (SCO) expires December 31, 2013.  The SCO houses both MUR and MUSA employees.  If requested by either MUR OR MUSA, the SCO lease will be extended to December 31, 2014 at a similar rate.  Afterwards, if either MUR or MUSA request, the SCO lease will be extended on a monthly basis.  At the end of the SCO lease, any/all files, furniture, and equipment at that location will be the property of MUSA
 
Lease and office equipment/supplies cost for the SCO will be invoiced monthly and should be settled within 30 days of the invoice date.  There will be one monthly invoice from each company to the other.  Costs for the SCO will be allocated 40% to MUR and 60% to MUSA
 

 
A-14
 
 
Schedule B
 
Liaisons
 
Murphy Oil: John Eckart
 
Murphy USA: Donald Smith
 
 
 
 
 
 


EXHIBIT 10.3  
 

 
 

 
EMPLOYEE MATTERS AGREEMENT
 
 
by and between
 
 
MURPHY OIL CORPORATION
 
 
and
 
 
MURPHY USA INC.
 
 
 
Dated as of August 30, 2013
 
 
 
 
 
 
TABLE OF CONTENTS
 
Page
 
 
ARTICLE 1
 
Definitions
 
Section 1.01 .  Definitions
1
ARTICLE 2
General Allocation of Liabilities
   
Section 2.01 .  Allocation of Liabilities Generally.
5
Section 2.02 .  Method of Settlement
6
Section 2.03 .  Further Assurances.
6
Section 2.04 .  Assignment of Certain Rights; Non-Solicitation.
7
   
ARTICLE 3
Employees; Assumption and/or Adoption of Plans; Option Adjustments
   
Section 3.01 .  Employees
8
Section 3.02 .  Assumption by Murphy USA of Certain Plans
8
Section 3.03 .  Adoption of Plans.
8
Section 3.04 .  Murphy Oil Equity-Based Plan Retention; Option Adjustments; Bonus Payments; Murphy Oil ESPP.
8
   
ARTICLE 4
Thrift, Supplemental and Retirement Plans
   
Section 4.01 .  The Thrift Plan.
11
Section 4.02 .  Supplemental Plan.
11
Section 4.03 .  Retirement Plan Liabilities
12
   
ARTICLE 5
Health and Welfare Plans
   
Section 5.01 .  Assumption of Health and Welfare Plan Liabilities; General Provisions
12
Section 5.02 .  Post-retirement Health and Retired Life Insurance Benefits
13
Section 5.03 .  Effect of Change in Rates
13
Section 5.04 .  COBRA and HIPPA.
13
Section 5.05 .  Leave of Absence Programs and FMLA.
14
Section 5.06 .  Murphy USA Workers’ Compensation Program.
14
Section 5.07 .  Flexible Benefit Plans.
15
Section 5.08 .  Application of Article 5 to the Murphy Oil Group
15
 
 
 
 
 
ARTICLE 6
 
Indemnification
 
   
   
ARTICLE 7
 
General Provisions
 
   
Section 7.01 .  Notices
16
Section 7.02 .  Amendments; No Waivers
17
Section 7.03 .  Successors and Assigns
17
Section 7.04 .  Governing Law
17
Section 7.05 .  Counterparts; Effectiveness
17
Section 7.06 .  Entire Agreement; No Change in Control or Severance Event
17
Section 7.07 .  Dispute Resolution
18
Section 7.08 .  No Third Party Beneficiaries
18
Section 7.09 .  Headings
18
Section 7.10 .  Severability
18
Section 7.11 .  Schedules
18
Section 7.12 .  Cooperation and Coordination
18
Section 7.13 .  Withholdings
18

 
ii
 
 
EMPLOYEE MATTERS AGREEMENT
 
EMPLOYEE MATTERS AGREEMENT (the “ Agreement ”) dated as of August 30, 2013, between Murphy Oil Corporation, a Delaware corporation (“ Murphy Oil ”) and Murphy USA Inc., a Delaware corporation (“ Murphy USA ”).
 
W I T N E S S E T H :
 
WHEREAS, Murphy Oil has decided to distribute the common stock of Murphy USA to the holders of Murphy Oil Common Stock, $1.00 par value, (the “ Distribution ”); and
 
WHEREAS, in furtherance of the foregoing, Murphy Oil and Murphy USA have entered into the Distribution Agreement (as defined below) and certain other agreements that will govern certain matters relating to the Distribution and the relationship of Murphy Oil and Murphy USA and their respective Subsidiaries following the Distribution; and
 
WHEREAS, pursuant to the Distribution Agreement, Murphy Oil and Murphy USA have agreed to enter into this Agreement for the purpose of allocating between them assets, liabilities, and responsibilities with respect to certain employee compensation and benefit plans and programs;
 
WHEREAS, Murphy Oil and Murphy USA have agreed that, except as otherwise specifically provided herein, the general approach and philosophy underlying this agreement is to allocate assets, liabilities and responsibilities between Murphy Oil and Murphy USA on the basis of the employment relationships in effect at the time of the Distribution;
 
NOW, THEREFORE, in consideration of the mutual promises contained herein and in the Distribution Agreement, the parties agree as follows:
 
 
ARTICLE 1
Definitions
 
Section 1.01 .  Definitions.   (a) The following terms, as used herein, shall have the meanings set forth below, provided, however, that capitalized terms used and not defined herein shall have the meanings set forth in the Distribution Agreement:
 
“ Applicable Law ”   shall have the meaning set forth in the Distribution Agreement.
 
“ Close of the Distribution Date ” means 11:59:59 P.M., Eastern Standard Time or Eastern Daylight Time (whichever shall then be in effect), on the Distribution Date.
 
“ Code ” shall have the meaning set forth in the Distribution Agreement.
 
 
 
 
 
“ COBRA ” means the continuation coverage requirements for “group health plans” under Title X of the Consolidated Omnibus Budget Reconciliation Act of 1985, as amended, and as codified in Code § 4980B and ERISA §§ 601 through 608.
 
“Distribution” has the meaning set forth in the recitals to this Agreement.
 
“ Distribution Agreement ” means the Separation and Distribution Agreement by and between Murphy Oil Corporation and Murphy USA Inc., dated as of August 30, 2013, 2013, to which this Agreement is Exhibit A.
 
“ Distribution Date ” shall have the meaning set forth in the Distribution Agreement.
 
“ ERISA ” means the Employee Retirement Income Security Act of 1974, as amended, or any successor federal labor or employment law. Reference to a specific ERISA provision also includes any proposed, temporary, or final regulation in force under that provision.
 
“ FMLA ” means the Family Leave and Medical Act of 1993, as amended.
 
“ Immediately after the Distribution Date ” means 12:00 A.M., Eastern Standard Time or Eastern Daylight Time (whichever shall then be in effect), on the day after the Distribution Date.
 
“ Liabilities ” shall have the meaning set forth in the Distribution Agreement.
 
“ Murphy Oil Business ” shall have the meaning set forth in the Distribution Agreement.
 
“ Murphy Oil Common Stock ” shall have the meaning set forth in the Distribution Agreement.
 
“ Murphy Oil Employee ” means each Person who, on the Distribution Date (a) is actively employed in the Murphy Oil Business and who is listed on the payroll records of any member of the Murphy Oil Group, (b) is on short-term disability leave, authorized leave of absence, military service or lay-off with recall rights and who was last actively employed in the Murphy Oil Business by any member of the Murphy Oil Group, (c) is an inactive or former employee and who was last actively employed in the Murphy Oil Business by any member of the Murphy Oil Group, including any former employee who has been on long-term disability leave or unauthorized leave of absence or who has terminated his or her employment, retired or died on or before the Distribution Date, and, in each case, their respective beneficiaries and dependents or (d) is an individual set forth on Schedule 1.01(a).  Murphy Oil Employees shall not include the individuals set forth on Schedule 1.01(b).
 
“ Murphy Oil Equity-Based Plans ” means the Murphy Oil Corporation 1992 Stock Incentive Plan, 2007 Long-Term Incentive Plan, 2012 Long-Term Incentive Plan, 2003 Stock Plan for Non-Employee Directors, 2008 Stock Plan for Non-Employee Directors and the 2013 Stock Plan for Non-Employee Directors.
 
 
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“ Murphy Oil ERISA Affiliate ” means any entity that, together with Murphy Oil and after giving effect to the Distribution, would be treated as a single employer under Section 414(b) or (c) of the Code without regard to Sections 4069 and 4212(c) of ERISA.
 
“ Murphy Oil ESPP ” means the Murphy Oil Corporation Employee Stock Purchase Plan.
 
“ Murphy Oil Group ” shall have the meaning set forth in the Distribution Agreement.
 
“Murphy Oil Plans” : means the Murphy Oil Basic Life and Accidental Death and Dismemberment Plan (excluding retired life classes), the Murphy Oil Supplemental Life Plan, the Murphy Oil Occupational Life Plan, the Murphy Oil Business Travel Policy, the Murphy Oil Long Term Disability Plan, the Murphy Oil HCSAP, the Murphy Oil DCSAP, the Murphy Oil Medical Plan, the Murphy Oil Dental Plan, the Murphy Oil Vision Plan, the Thrift Plan, the Supplemental Plan, the Murphy Oil Vacation Policy for Corporate Employees, the Murphy Oil Service Awards Program, the Murphy Oil Employee Assistance Policy, the Murphy Oil Education Assistance Policy, and the Murphy Oil Occupational and Non-Occupational Illness Policy.
 
“ Murphy USA Business ” shall have the meaning set forth in the Distribution Agreement.
 
“ Murphy USA Employee ” means each Person who, on the Distribution Date, is or has at any time been employed in the Murphy USA Business who is not a Murphy Oil Employee.
 
“ Murphy USA ERISA Affiliate ” means any entity that, together with Murphy USA and after giving effect to the Distribution, would be treated as a single employer under Section 414(b) or (c) of the Code without regard to Sections 4069 and 4212(c) of ERISA.
 
“ Murphy USA Group ” shall have the meaning set forth in the Distribution Agreement.
 
“ New Murphy USA Plans ” means new, duplicate or mirror plans, policies or programs, as applicable, adopted or to be adopted by Murphy USA that correspond to the Murphy Oil Plans, with such changes therein as are necessary or appropriate to effectuate the terms of this Agreement.
 
“ Profit Sharing Plan ” means the Profit Sharing Plan for Employees of Murphy Oil Corporation.
 
“ Retirement Plan ” means the Retirement Plan for Employees of Murphy Oil Corporation.
 
“ Specified Murphy Oil Rights ” means any and all rights to enjoy, benefit from or enforce any and all restrictive covenants including, without limitation covenants relating to non-disclosure, non-solicitation, non-competition, confidentiality or trade
 
 
3
 
 
secrets, applicable or related, in whole or in part, to the Murphy Oil Business that are provided for, contained or set forth in the Murphy Oil Equity-Based Plans or any stock option or other award agreement issued thereunder, or pursuant to any non-competition, consulting, employment, termination, separation or severance agreement or arrangement with any Murphy USA Employee or Murphy Oil Employee and to which any member of the Murphy USA Group or the Murphy Oil Group is a party.
 
“ Specified Murphy USA Rights ” means any and all rights to enjoy, benefit from or enforce any and all restrictive covenants including, without limitation covenants relating to non-disclosure, non-solicitation, non-competition, confidentiality or trade secrets, applicable or related, in whole or in part, to the Murphy USA Business that are provided for, contained or set forth in the Murphy Oil Equity-Based Plans or any stock option or other award agreement issued thereunder, or pursuant to any non-competition, consulting, employment, termination, separation or severance agreement or arrangement with any Murphy USA Employee or Murphy Oil Employee and to which any member of the Murphy USA Group or Murphy Oil Group is a party.
 
“ Supplemental Plan ” means the Murphy Oil Corporation Supplemental Executive Retirement Plan.
 
“ Tax Matters Agreement ” shall have the meaning set forth in the Distribution Agreement.
 
“ Thrift Plan ” means the Thrift Plan for Employees of Murphy Oil Corporation.
 
(b)           Each of the following terms is defined in the Section set forth opposite such term:
 
TERMS
SECTION
   
Employee Withholding Documents
7.13
Murphy Oil Retained Liabilities
2.01
Murphy Oil Bonus Liabilities
3.04
Murphy Oil DCSAP
5.07
Murphy Oil HCSAP
5.07
Murphy Oil Health and Welfare Liabilities
5.01
Murphy Oil Health and Welfare Plans
5.01
Murphy Oil 2012 AIP
3.04
Murphy Oil Retained Liabilities
2.01
Murphy Oil WCP Liabilities
5.06
Murphy USA Assumed Plans
3.02
Murphy USA Assumed Liabilities
2.01
Murphy USA DC Plan
4.01
Murphy USA DC Plan Liabilities
4.01
Murphy USA Health and Welfare Liabilities
5.01
Murphy USA Assumed Liabilities
2.01
Murphy USA Supplemental Plan Liabilities
4.02
Murphy USA WCP Liabilities
5.06
 
 
4
 
 
TERMS
SECTION
   
New Murphy USA Health and Welfare Plans
5.01
PUs
3.04
Retained Murphy Oil Retiree Health
  and Life Liabilities
5.02
Retained Retiree Health and Life Liabilities
5.02
Retained Supplemental Plan Liabilities
4.02
Retained Thrift Plan Liabilities
4.01
RSUs
3.04
RSUCs
3.04
Standard Procedure
7.13
 
ARTICLE 2
General Allocation of Liabilities
 
Section 2.01 .  Allocation of Liabilities Generally.
 
(a)   Subject to the terms and conditions of this Agreement, effective as of the Close of the Distribution Date, Murphy Oil hereby assumes and agrees to pay when due, honor and discharge, the following Liabilities, whether incurred before, on or after the Distribution Date (“ Murphy Oil Retained Liabilities ”):
 
(i)   all Liabilities arising under any employment, separation or retirement agreement or arrangement to the extent applicable to any Murphy Oil Employee;
 
(ii)   the Murphy Oil Bonus Liabilities, Murphy Oil Deferred Compensation Liabilities, Murphy Oil WCP Liabilities, Retained Retiree Health and Life Liabilities, Murphy Oil Health and Welfare Liabilities, Retained Supplemental Plan Liabilities, Retained Thrift Plan Liabilities and all Liabilities arising under the Murphy Oil Equity-Based Plans, the Murphy Oil ESPP and the Retirement Plan;
 
(iii)   all Liabilities arising under any other employee benefit plan or arrangement sponsored or maintained at any time after the Distribution Date by any of the Murphy Oil Companies to the extent applicable to any member of the Murphy Oil Group;
 
(iv)   all Liabilities arising under any federal, state, local or foreign law, order or regulation (including, without limitation, ERISA and the Code) to the extent they relate to participation by any Murphy Oil Employee in any employee benefit plan sponsored or maintained by any member of the Murphy Oil Group, whether relating to events occurring on, prior to or after the Close of the Distribution Date or arising by reason of the transactions contemplated by this Agreement or otherwise;
 
 
5
 
 
(v)   all statutory Liabilities to any Murphy Oil Employee, which arise, directly or indirectly, by reason of the transactions contemplated by this Agreement; and
 
(vi)   all other Liabilities attributable to actions specified to be taken by Murphy Oil under this Agreement.
 
(b)   Subject to the terms and conditions of this Agreement, effective as of Immediately after the Distribution Date, Murphy USA hereby assumes and agrees to pay when due, honor and discharge, the following Liabilities, whether incurred before, on or after the Distribution Date (“ Murphy USA Assumed Liabilities ”):
 
(i)   all Liabilities arising under any employment, separation or retirement agreement or arrangement to the extent applicable to any Murphy USA Employee;
 
(ii)   the New Murphy USA Plans, the Murphy USA Assumed Plans, Murphy USA Bonus Liabilities, Murphy USA DC Plan Liabilities, Murphy USA Health and Welfare Liabilities, Murphy USA Supplemental Plan Liabilities and the Murphy USA WCP Liabilities;
 
(iii)   all Liabilities arising under any other employee benefit plan or arrangement sponsored or maintained at any time after the Distribution Date by any member of the Murphy USA Group;
 
(iv)   all Liabilities arising under any federal, state, local or foreign law, order or regulation (including, without limitation, ERISA and the Code) to the extent they relate to participation by any Murphy USA Employee in any New Murphy USA Plan or other employee benefit plan sponsored or maintained by any member of the Murphy USA Group, relating to events occurring on or after the time Immediately after the Distribution Date;
 
(v)   all statutory Liabilities to any Murphy USA Employee which arises, directly or indirectly, by reason of the transactions contemplated by this Agreement; and
 
(vi)   all other Liabilities attributable to actions specified to be taken by Murphy USA under this Agreement.
 
Section 2.02 .  Method of Settlement.   Notwithstanding anything herein to the contrary but except as set forth in Schedule 2.02, to the extent possible any transfer or assumption of Liabilities pursuant to this Article 2 shall be effected, prior to the Distribution Date or as soon thereafter as is reasonably practicable, through a corresponding adjustment in the relevant intercompany account balances of the parties hereto.
 
Section 2.03 .  Further Assurances.
 
 
6
 
 
(a)   On and after the date hereof, Murphy USA will, at the reasonable request of Murphy Oil, execute, acknowledge and deliver all such endorsements, assurances, consents, assignments, transfers, conveyances, powers of attorney and other instruments and documents, and take such other actions necessary (i) to assign, transfer, convey and deliver to Murphy Oil, acting in its fiduciary capacity, all the assets to be transferred to Murphy Oil pursuant to this Agreement and (ii) to assist Murphy Oil in obtaining the consent and approval of all Governmental Authorities and other Persons required to be obtained by Murphy Oil to effect the transfer thereof and the assumption of the Murphy Oil Retained Liabilities by Murphy Oil or otherwise appropriate to carry out the transactions contemplated hereby.
 
(b)   On and after the date hereof, Murphy Oil will, at the reasonable request of Murphy USA, execute, acknowledge and deliver all such endorsements, assurances, consents, assignments, transfers, conveyances, powers of attorney and other instruments and documents, and take such other actions necessary (i) to assign, transfer, convey and deliver to Murphy USA, acting in its fiduciary capacity, all the assets to be transferred to Murphy USA pursuant to this Agreement, and (ii) to assist Murphy USA in obtaining the consent and approval of all Governmental Authorities and other Persons required to be obtained by Murphy USA to effect the transfer thereof and the assumption of the Murphy USA Assumed Liabilities by Murphy USA or otherwise appropriate to carry out the transactions contemplated hereby.
 
Section 2.04 .  Assignment of Certain Rights; Non-Solicitation.
 
(a)   To the extent permitted by applicable law, Murphy Oil hereby assigns, to the maximum extent possible, on behalf of itself and the Murphy Oil Group, the Specified Murphy USA Rights, to Murphy USA and Murphy Oil shall take such actions to effect such assignment pursuant to Section 2.03(b) as Murphy USA may reasonably request.
 
(b)   To the extent permitted by applicable law, Murphy USA hereby assigns, to the maximum extent possible, on behalf of itself and the Murphy USA Group, the Specified Murphy Oil Rights, to Murphy Oil and Murphy USA shall take such actions to effect such assignment pursuant to Section 2.03(a) as Murphy Oil may reasonably request.
 
(c)   Murphy Oil and Murphy USA agree that neither party shall, without the prior written approval of the other, directly or indirectly for 12 months after the Distribution Date, solicit any employee of the other party to terminate his or her relationship with any member of the Murphy USA Group or Murphy Oil Group, respectively, provided that the foregoing shall not apply to (i) the use of an independent employment agency (so long as the agency was not directed to solicit such person) or (ii) as a result of the use of a general solicitation (such as an advertisement) not specifically directed to employees of the other party.
 
 
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ARTICLE 3
Employees; Assumption and/or Adoption of Plans; Option Adjustments
 
Section 3.01 .  Employees.   No provision of this Agreement shall require Murphy Oil or Murphy USA or any of their respective Subsidiaries to continue the employment of any of their respective employees following the Distribution Date.
 
Section 3.02 .  Assumption by Murphy USA of Certain Plans.   Effective as of the Close of the Distribution Date, Murphy USA hereby assumes responsibility for and becomes the sponsor of, and Murphy Oil or the relevant Murphy Oil Subsidiary hereby ceases, except as otherwise provided herein, to be responsible for, or be the sponsor of, and ceases to be a “participating employer” in or to otherwise have any Liability in respect of, the Group Insurance Plan for Retail Store Managers of Murphy Oil USA, Inc., Murphy USA Inc., Limited Liability Plan, the Profit Sharing Plan and any vacation credited under the Vacation Policy for Retail Marketing Assistant Store Managers and Cashiers (Policy 05-01-08A) (collectively, “ Murphy USA Assumed Plans ”).  Murphy Oil and Murphy USA agree to cooperate and take all reasonable actions necessary or appropriate to cause a change in the sponsor of any Murphy USA Assumed Plan or in the title thereof.
 
Section 3.03 .  Adoption of Plans.
 
(a)   Effective as of not later than Immediately after the Distribution Date, Murphy USA or a Murphy USA Affiliate shall adopt, or cause to be adopted, the New Murphy USA Plans, provided that nothing shall prevent Murphy USA from terminating or amending such plans except to the extent precluded by Applicable Law, as would result in the loss of grandfathered status under the Patient Protection and Affordable Care Act or as otherwise provided herein.
 
(b)   The New Murphy USA Plans shall be, with respect to all Murphy USA Employees, in all respects the successors in interest to any corresponding Murphy Oil Plans.  With respect to Murphy USA Employees, each New Murphy USA Plan and any other benefit plan, arrangement or policy applicable after the Distribution Date for Murphy USA Employees shall provide that all service, compensation, and other benefit-affecting determinations, as of the Close of the Distribution Date, that were otherwise recognized under the corresponding Murphy Oil Plan (for periods ending on the Distribution Date) shall, as of Immediately after the Distribution Date, receive full recognition and credit to the extent the recognition or credit can validly be taken into account under the New Murphy USA Plan to the same extent as if those items occurred under the Murphy Oil Plans, except to the extent that duplication of benefits would result.  Murphy Oil shall provide appropriate data to Murphy USA about such past service.
 
Section 3.04 .   Murphy Oil Equity-Based Plan Retention; Option Adjustments; Bonus Payments; Murphy Oil ESPP.
 
(a)   In connection with the Distribution, Murphy Oil shall retain the Murphy Oil Equity-Based Plans and shall cause such actions to be taken under such Plans as are
 
 
8
 
 
necessary or appropriate to reflect the Distribution as provided in this Section 3.04 (a) and (b).
 
(i)   In connection with the Distribution and effective as of the Distribution Date, all outstanding vested options to purchase shares of Murphy Oil Common Stock, whether held by a current or a former Murphy Oil Employee, a current or a former Murphy USA Employee or a current or former non-employee director of Murphy Oil will be adjusted pursuant to the terms of the applicable Murphy Oil Equity-Based Plan and Applicable Law to preserve the intrinsic value of each original option grant and the ratio of the exercise price to the fair market value of Murphy Oil Common Stock on the Distribution Date.  Such adjusted options held by Murphy USA Employees will be exercisable until the earlier of two years from the Distribution Date or the stated expiration date of the grant.
 
(ii)   In connection with the Distribution and effective as of the Distribution Date, any outstanding unvested options to purchase Murphy Oil Common Stock which are held by Murphy Oil Employees will be adjusted as described in Section 3.04 (a)(i).  Murphy USA will replace any outstanding unvested options to purchase shares of Murphy Oil Common Stock which are held by Murphy USA Employees Immediately after the Distribution Date with long-term incentive awards of generally equivalent value under one or more long-term incentive plans to be adopted by Murphy USA.
 
(iii)   In connection with the Distribution and effective as of the Distribution Date, any outstanding unvested stock appreciation rights related to Murphy Oil Common Stock which are held by Murphy Oil Employees will be adjusted as described in Section 3.04 (a)(i).  Murphy USA will replace any outstanding unvested stock appreciation rights related to Murphy Oil Common Stock which are held by Murphy USA Employees Immediately after the Distribution Date with long-term incentive awards of generally equivalent value under one or more long-term incentive plans to be adopted by Murphy USA.
 
(iv)   In connection with the Distribution and effective as of the Distribution Date, similar adjustments as provided in Section 3.04(a)(i) will be made to the Murphy Oil non-employee director restricted stock unit awards granted under the applicable Murphy Oil Equity-Based Plan.
 
(v)   In connection with the Distribution and effective as of the Distribution Date, phantom stock units granted under the applicable Murphy Oil Equity-Based Plan and held by Murphy Oil Employees will be adjusted as described in Section 3.04(a)(i).
 
(vi)   In connection with the Distribution and effective as of the Distribution Date, restricted stock units (“ RSUs” ) whether held by a current or a former Murphy Oil Employee or a current or a former Murphy USA Employee will be adjusted pursuant to the terms of the applicable Murphy Oil Equity-Based Plan and Applicable Law to preserve the intrinsic value of each original grant on the Distribution Date.  RSUs that are held by Murphy USA Employees will be prorated based on the extent to which the applicable performance goals are attained as of
 
 
9
 
 
the Distribution Date, if at all, and will be paid out by Murphy Oil based on the number of months in the performance period ending on the Distribution Date divided by 36.  Murphy USA will replace the balance of the RSUs with long-term incentive awards of generally equivalent value under one or more long-term incentive plans to be adopted by Murphy USA.
 
(vii)   In connection with the Distribution and effective as of the Distribution Date, cash-based restricted stock units (“ RSUCs ”) granted under the applicable Murphy Oil Equity-Based Plan whether held by a current or a former Murphy Oil Employee or a current or a former Murphy USA Employee will be adjusted pursuant to the terms of the applicable Murphy Oil Equity-Based Plan and Applicable Law to preserve the intrinsic value of each original grant on the Distribution Date.  RSUCs that are held by Murphy USA Employees will be prorated based on the extent to which the applicable performance goals are attained as of Distribution Date, if at all, and will be paid out by Murphy Oil based on the number of months in the performance period ending on the Distribution Date divided by 36.  Murphy USA will replace the balance of the RSUCs with long-term incentive awards of generally equivalent value under one or more long-term incentive plans to be adopted by Murphy USA.
 
(viii)   In connection with the Distribution and effective as of the Distribution Date, cash based performance units (“ PUs ”) granted under the applicable Murphy Oil Equity-Based Plan that are held by Murphy USA Employees will be prorated based on the extent to which the applicable performance goals are attained as of Distribution Date, if at all, and will be paid out by Murphy Oil based on the number of months in the performance period ending on the Distribution Date divided by 36.  Murphy USA agrees to replace the balance of the PUs with long-term incentive awards of equivalent value under one or more long-term incentive plans to be adopted by Murphy USA.
 
(b)   Murphy Oil hereby retains (i)  Liability for all annual bonus payments to Murphy Oil Employees   under the Murphy Oil Corporation 2012 Annual Incentive Plan (the “Murphy Oil 2012 AIP” ) and (ii)  Liability for all 2013 calendar year bonus payments under the Murphy Oil 2012 AIP to Murphy USA Employees   as determined pursuant to the Murphy 2012 AIP and the applicable award agreement (all such Liabilities, the “ Murphy Oil Bonus Liabilities ”).
 
(c)   The rights of, and continued participation in, if any, of Murphy Oil Employees and Murphy USA Employees under the Murphy Oil ESPP will be determined pursuant to the terms thereof.  For the avoidance of doubt, Murphy USA will not be under any obligation to replicate the Murphy Oil ESPP or to provide a similar benefit.
 
 
10
 
 
ARTICLE 4
Thrift, Supplemental and Retirement Plans
 
Section 4.01 .  The Thrift Plan.
 
(a)   Murphy Oil shall retain all Liabilities and obligations in respect of benefits accrued by each Murphy Oil Employee under the Thrift Plan.
 
(b)   Effective as of not later than Immediately after the Distribution Date, Murphy USA or a Murphy USA ERISA Affiliate shall adopt a savings plan for the benefit of Murphy USA Employees that is substantially similar to the Thrift Plan and is intended to qualify under Section 401(a) of the Code (the “ Murphy USA DC Plan ”).  Not later than the end of the calendar year in which the Distribution Date occurs or as soon thereafter as is reasonably practicable, (1) Murphy Oil shall cause the Thrift Plan accounts of all Murphy USA Employees which are held by the Thrift Plan’s related trust to be transferred to the Murphy USA DC Plan and its related trust, and Murphy USA shall cause those transferred accounts, all of which shall be 100% vested as of the Distribution Date, to be accepted by the Murphy USA DC Plan and its related trust and (2) the Murphy USA DC Plan shall assume and be solely responsible for Liabilities only with respect to transferred accounts of such Murphy USA Employees (all such assumed liabilities, “ Murphy USA DC Plan Liabilities ”).  Such transfer shall be in-kind, including loans, to the maximum extent practicable and shall not favor participants who are Murphy Oil Employees over participants who are Murphy USA Employees.  Any Murphy USA DC Plan fund relating to Murphy Oil Common Stock shall be administered so as to permit transfers out of, but not additions to, such fund.
 
(c)   After the Distribution Date, Murphy Oil shall retain all assets and Liabilities under the Thrift Plan except as otherwise provided in Section 4.01(b) (“ Retained Thrift Plan Liabilities ”).
 
Section 4.02 .  Supplemental Plan.
 
(a)   (i) Effective as of Immediately after the Distribution Date, all Liabilities accrued on the books and records of any member of the Murphy Oil Group or any member of the Murphy USA Group with respect to the Supplemental Plan to the extent applicable to any Murphy USA Employee, and assets allocable to such Liabilities, if any, shall be transferred to and assumed by Murphy USA, or retained by Murphy USA as the case may be, (“ Murphy USA Supplemental Plan Liabilities ”) under the New Murphy USA Plan that corresponds to the Supplemental Plan.
 
  (ii)   All other Liabilities under the Supplemental Plan, and all related assets, if any, are hereby transferred to and assumed or otherwise retained by Murphy Oil (“ Retained Supplemental Plan Liabilities ”).
 
(b)   Murphy USA and Murphy Oil shall cooperate to ensure that no deferred compensation amount is distributed prematurely in respect of any Murphy Oil Employee or Murphy USA Employee.
 
 
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Section 4.03 .  Retirement Plan Liabilities.   Murphy Oil shall retain and remain responsible for all assets and Liabilities under the Retirement Plan accrued in respect of Murphy Oil Employees and Murphy USA Employees pursuant to the terms of the Retirement Plan.  For the avoidance of doubt, no Murphy USA Employee shall accrue any benefit after the Distribution Date under the Retirement Plan.
 
 
ARTICLE 5
Health and Welfare Plans
 
Section 5.01 .  Assumption of Health and Welfare Plan Liabilities; General Provisions.
 
(a)   Effective as of Immediately after the Distribution Date and except to the extent provided in this Article 5, all Liabilities relating to claims incurred prior to, on or after the Distribution Date by each Murphy USA Employee under the “ Murphy Oil Health and Welfare Plans ” (designated as such on Schedule 5.01(a) hereto) shall cease to be Liabilities of the Murphy Oil Health and Welfare Plans and shall be transferred to and assumed by Murphy USA as of Immediately after the Distribution Date (“ Murphy USA Health and Welfare Liabilities ”) under the New Murphy USA Plans that correspond to the Murphy Oil Health and Welfare Plans (the “ New Murphy USA Health and Welfare Plans ”).  Murphy Oil shall retain all other Liabilities under the Murphy Oil Health and Welfare Plans (“ Murphy Oil Health and Welfare Liabilities ”).
 
(b)   Murphy USA shall cause the New Murphy USA Health and Welfare Plans to recognize and maintain all coverage and contribution elections made by Murphy USA Employees under the Murphy Oil Health and Welfare Plans as of the Distribution Date and apply such elections under the New Murphy USA Health and Welfare Plans for the remainder of the period or periods for which such elections are by their terms applicable. The transfer or other movement of employment from Murphy Oil to Murphy USA at any time before the Close of the Distribution Date shall neither constitute nor be treated as a “status change” under the New Murphy USA Health and Welfare Plans or the Murphy Oil Health and Welfare Plans.
 
(c)   Murphy USA shall cause the New Murphy USA Health and Welfare Plans to recognize and give credit for all amounts applied to deductibles, out-of-pocket maximums, and other applicable benefit coverage limits with respect to which such expenses have been incurred by Murphy USA Employees under the Murphy Oil Health and Welfare Plans for the remainder of the year in which the Distribution Date occurs to the extent recognized under the comparable Murphy Oil Health and Welfare Plans.
 
(d)   Murphy USA shall provide coverage to Murphy USA Employees under the New Murphy USA Health and Welfare Plans without the need to undergo a physical examination or otherwise provide evidence of insurability to the extent provided under the comparable Murphy Oil Health and Welfare Plans.
 
(e)   Murphy USA shall cause the New Murphy USA Health and Welfare Plans to recognize and credit all service of each Murphy USA Employee recognized by the
 
 
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corresponding Murphy Oil Health and Welfare Plans before the Close of the Distribution Date for all purposes, including, but not limited to, severance, disability, vacation and paid time off.  On or as soon as reasonably practicable after the Distribution Date, Murphy Oil shall deliver to Murphy USA a schedule setting forth the accrued and unused vacation and paid time off for each Murphy USA Employee as of the Distribution Date, and Murphy USA shall assume and be responsible for all Liabilities therefor which, for the avoidance of doubt, shall be included in Murphy USA Health and Welfare Liabilities.
 
(f)   Education or tuition reimbursement liabilities shall be the responsibility of the employer of the tuition reimbursement program participant at the time the education or tuition reimbursement request is formally submitted by the program participant in accordance with the terms and conditions of such program.
 
Section 5.02 .  Post-retirement Health and Retired Life Insurance Benefits.   Murphy Oil shall be responsible for providing to Murphy USA Employees who are eligible to receive post-retirement medical or retired life insurance coverage under the Murphy Oil Health and Welfare Plans and retire prior to the Close of the Distribution Date and to all Murphy Oil Employees such coverage under the Murphy Oil Health and Welfare Plans (“ Retained Retiree Health and Life Liabilities ”), in each case pursuant to the terms of the applicable Murphy Oil Health and Welfare Plans.  Nothing shall prevent (i) Murphy Oil from amending or terminating such plans or (ii) notwithstanding Section 2.04(c) hereof, Murphy USA from actively employing any retired Murphy Oil Employees.
 
Section 5.03 .  Effect of Change in Rates.   Murphy USA and Murphy Oil shall use their reasonable efforts to cause each of the insurance companies, HMOs, point-of-service vendors and third-party administrators providing services and benefits under the New Murphy USA Health and Welfare Plans and the Murphy Oil Health and Welfare Plans to maintain the premium and/or administrative rates based on the aggregate number of participants in both the New Murphy USA Health and Welfare Plans and the Murphy Oil Health and Welfare Plans through the expiration of the financial fee or rate guarantees in effect as of the Close of the Distribution Date under the respective contracts, policies, and agreements separately rated or adjusted for the demographics, experience or other relevant factors related to the covered participants of Murphy USA and Murphy Oil, respectively.  To the extent they are not successful in such efforts, Murphy USA and Murphy Oil shall each bear the revised premium or administrative rates attributable to the individuals covered by their respective health and welfare plans.
 
Section 5.04 .  COBRA and HIPPA.
 
(a)   Murphy Oil shall be solely responsible for administering compliance with the health care continuation coverage requirements of COBRA and the Murphy Oil Health and Welfare Plans (i) with respect to Murphy Oil Employees and, (ii) with respect to Murphy USA Employees and their dependents who incur a COBRA qualifying event other than under a Murphy USA Assumed Plan prior to the Distribution Date.
 
(b)   Effective as of Immediately after the Distribution Date, Murphy USA shall solely be responsible for administering compliance with the health care continuation
 
 
13
 
 
coverage requirements of COBRA and the New Murphy USA Health and Welfare plans with respect to Murphy USA Employees and their dependents who incur a COBRA qualifying event (i) under a Murphy USA Assumed Plan prior to the Distribution Date, and (ii) in all cases on or after the Distribution Date.
 
(c)   For periods before the Distribution Date, Murphy Oil shall be responsible for administering compliance with the portability requirements under the Health Insurance Portability and Accountability Act of 1996 with respect to Murphy USA Employees and beginning not later than Immediately after the Distribution Date Murphy USA shall be responsible for filing all necessary employee change notices with respect to in accordance with applicable Murphy Oil policies and procedures.  Effective as of Immediately after the Distribution Date, Murphy Oil shall be solely responsible for administering compliance with such health care continuation coverage and portability requirements with respect to Murphy Oil Employees, and Murphy USA shall be solely responsible for administering compliance with such requirements with respect to Murphy USA Employees.
 
Section 5.05 .  Leave of Absence Programs and FMLA.
 
(a)   Murphy USA shall be responsible for administering compliance with the Murphy USA leave of absence programs and FMLA with respect to Murphy USA Employees.
 
(b)   Effective as of Immediately after the Distribution Date: (i) Murphy USA shall adopt, and shall cause each member of the Murphy USA Group to adopt, leave of absence programs; (ii) Murphy USA shall honor, and shall cause each member of the Murphy USA Group to honor, all terms and conditions of leaves of absence which have been granted to any Murphy USA Employee under a Murphy Oil leave of absence program or FMLA before the Distribution Date, including such leaves that are to commence after the Distribution Date; (iii) Murphy Oil and each member of the Murphy Oil Group shall be solely responsible for administering leaves of absence and compliance with FMLA with respect to their employees; and (iv) Murphy USA and each member of the Murphy USA Group shall recognize all periods of service of each Murphy USA Employee with the Murphy Oil Group to the extent such service is recognized by Murphy Oil for the purpose of eligibility for leave entitlement under the Murphy Oil leave of absence programs and FMLA.
 
(c)   As soon as administratively possible and not later than the Close of the Distribution Date, Murphy Oil shall provide to Murphy USA copies of all records pertaining to the Murphy Oil leave of absence programs and FMLA with respect to all Murphy USA Employees to the extent such records have not been provided previously to Murphy USA or a member of the Murphy USA Group.
 
Section 5.06 .  Murphy USA Workers’ Compensation Program.
 
(a)   (i)  Effective as of Immediately after the Distribution Date, Murphy USA shall assume, retain and be responsible for all workers’ compensation Liabilities relating to Murphy USA Employees (the “ Murphy USA WCP Liabilities ”).
 
 
14
 
 
      (ii)   Effective as of Immediately after the Distribution Date, Murphy Oil shall assume, retain and be responsible for all workers compensation Liabilities relating to Murphy Oil Employees (“ Murphy Oil WCP Liabilities ”).
 
      (iii)   For the avoidance of doubt, workers’ compensation Liabilities in respect of any current or former employee shall be the responsibility of such employee’s employer on the Distribution Date or, in the case of former employees, any such former employee’s last employer prior to the Distribution Date.
 
(b)   Murphy Oil and Murphy USA shall cooperate with respect to the issuance of new, or transfer of, existing workers’ compensation policies and licenses.
 
Section 5.07 .  Flexible Benefit Plans.
 
(a)   To the extent any Murphy USA Employee contributed to an account under the Murphy Oil Health Care Spending Account Plan (“ Murphy Oil HCSAP ”) during the calendar year that includes the Distribution Date, effective as of Immediately after the Distribution Date Murphy Oil shall transfer to the corresponding New Murphy USA Health and Welfare Plan the account balances of such Murphy USA Employees for such calendar year under the Murphy Oil HCSAP, regardless of whether the account balance is positive or negative.
 
(b)   To the extent any Murphy USA Employee contributed to the Murphy Oil Dependent Care Spending Account Plan (“ Murphy Oil DCSAP ”) during the calendar year that includes the Distribution Date, effective as of Immediately after the Distribution Date, Murphy Oil shall transfer to the corresponding New Murphy USA Health and Welfare Plan the account balances of such Murphy USA Employees for such calendar year in the Murphy Oil DCSAP Plan, regardless of whether the account balance is positive or negative.
 
Section 5.08   .  Application of Article 5 to the Murphy Oil Group.   Any reference in this Article 5 to “Murphy USA” shall include a reference to the Murphy USA Group when and to the extent Murphy USA has caused a member of the Murphy USA Group to (a) become a party to a  vendor contract, group insurance contract, or HMO letter agreement associated with a New Murphy USA Health and Welfare Plan, (b) become a self-insured entity for the purposes of one or more New Murphy USA Health and Welfare Plans, (c) assume all or a portion of the Liabilities or administrative responsibilities for benefits which arose before the Distribution Date under a Murphy Oil Health and Welfare Plan and which were expressly assumed by Murphy USA pursuant to the terms of this Agreement, or (d) take any other action, extend any coverage, assume any other Liability or fulfill any other responsibility that Murphy USA would otherwise be required to take under the terms of this Article 5, unless it is clear from the context that the particular reference is not intended to include a member of the Murphy USA Group. In all such instances in which a reference in this Article 5 to “Murphy USA” includes a reference to a member of the Murphy USA Group, Murphy USA shall be responsible to Murphy Oil for ensuring that the member of the Murphy USA Group complies with the applicable terms of this Agreement.
 
 
15
 
 
ARTICLE 6
Indemnification
 
With respect to indemnification, the parties hereto agree as set forth in the Distribution Agreement.
 
 
ARTICLE 7 
General Provisions
 
Section 7.01 .  Notices.   Any notice, instruction, direction or demand under the terms of this Agreement required to be in writing shall be duly given upon delivery, if delivered by hand, facsimile transmission, or mail, to the following addresses:
 
If to Murphy Oil, to:
 
Murphy Oil Corporation
200 Peach Street
P.O. Box 7000
El Dorado, Arkansas  71731-7000
Attn:  Walter Compton
Facsimile:  (870) 864-6220

With a copy to:
 
Davis Polk & Wardwell LLP
450 Lexington Avenue
New York, New York  10017
Attn:  William L. Taylor, Esq.
Facsimile:  (212) 701-5800

If to Murphy USA, to:
 
Murphy USA Inc.
200 Peach Street
P.O. Box 7300
El Dorado, Arkansas  71731-7300
Attn:  John A. Moore
Facsimile:  (870) 881-6893

or to such other addresses or telecopy numbers as may be specified by like notice to the other party.  All such notices, requests and other communications shall be deemed given, (a) when delivered in person or by courier or a courier services, (b) if sent by facsimile transmission (receipt confirmed) on a business day prior to 5 p.m. in the place of receipt, on the date of transmission (or, if sent after 5 p.m. or on a day other than a business day, on the following business day) or (c) if mailed by certified mail (return receipt requested), on the date specified on the return receipt.
 
 
16
 
 
Section 7.02 .  Amendments; No Waivers.   (a)   Any provision of this Agreement may be amended or waived if, and only if, such amendment or waiver is in writing and signed, in the case of an amendment, by Murphy Oil and Murphy USA, or in the case of a waiver, by the party against whom the waiver is to be effective.
 
(b)   No failure or delay by any party in exercising any right, power or privilege hereunder shall operate as a waiver thereof nor shall any single or partial exercise thereof preclude any other or further exercise thereof or the exercise of any other right, power or privilege.   The rights and remedies herein provided shall be cumulative and not exclusive of any rights or remedies provided by law.
 
Section 7.03 .  Successors and Assigns.   The provisions of this Agreement shall be binding upon and inure to the benefit of the parties hereto and their respective successors and assigns; provided that neither party may assign, delegate or otherwise transfer any of its rights or obligations under this Agreement without the consent of the other parties hereto.
 
Section 7.04 .  Governing Law.   This Agreement shall be construed in accordance with and governed by the law of the State of New York, without regard to the conflicts of laws rules thereof.
 
Section 7.05 .  Counterparts; Effectiveness.   This Agreement may be signed in any number of counterparts, each of which shall be an original, with the same effect as if the signatures thereto and hereto were upon the same instrument.  This Agreement shall become effective when each party hereto shall have received a counterpart hereof signed by the other party hereto.  Until and unless each party has received a counterpart hereof signed by the other party hereto, this Agreement shall have no effect and no party shall have any right or obligation hereunder (whether by virtue of any other oral or written agreement or other communication).
 
Section 7.06 .  Entire Agreement; No Change in Control or Severance Event.   (a) This Agreement constitutes the entire understanding of the parties with respect to the subject matter hereof and thereof and supersedes all prior agreements, understandings and negotiations, both written and oral, between the parties with respect to the subject matter hereof and thereof.  No representation, inducement, promise, understanding, condition or warranty not set forth herein has been made or relied upon by any party hereto or any member of their Group with respect to the transactions contemplated by this Agreement.  To the extent that the provisions of this Agreement are inconsistent with the provisions of the Tax Matters Agreement, the provisions of the Tax Matters Agreement shall prevail.
 
(b)   Neither the Distribution nor the consummation of the transactions contemplated herein or under the Distribution Agreement shall constitute a change in control for purposes of, or trigger or otherwise give rise to any severance obligations or entitlements under, any Murphy Oil or Murphy USA plan, program, agreement or arrangement.
 
 
17
 
 
Section 7.07 .  Dispute Resolution.   Any dispute hereunder or with respect to the rights, duties and Liabilities of the parties hereto shall be resolved pursuant to the applicable provisions, including Article 8, of the Distribution Agreement.
 
Section 7.08 .  No Third Party Beneficiaries.   Nothing contained in this Agreement is intended to constitute an amendment to any plan or arrangement governed by ERISA, or to confer upon any person or entity other than the parties hereto and their respective successors and permitted assigns, any benefit, right or remedies under or by reason of this Agreement.
 
Section 7.09 .  Headings.   The section and other headings contained in this Agreement are for reference purposes only and shall not in any way affect the meaning or interpretation of this Agreement.
 
Section 7.10 .  Severability.   If any one or more of the provisions contained in this Agreement should be declared invalid, illegal or unenforceable in any respect, the validity, legality and enforceability of the remaining provisions contained in this Agreement shall not in any way be affected or impaired thereby so long as the economic or legal substance of the transactions contemplated hereby is not affected in any manner materially adverse to any party.  Upon such a declaration, the parties shall modify this Agreement so as to effect the original intent of the parties as closely as possible in an acceptable manner so that the transactions contemplated hereby are consummated as originally contemplated to the fullest extent possible.
 
Section 7.11 .  Schedules.   Murphy Oil and Murphy USA shall cooperate and mutually agree on each of the schedules to this Agreement.  Murphy Oil and Murphy USA shall have the right to amend or supplement the information set forth in any schedule hereto from time to time until two business days prior to the Distribution Date.
 
Section 7.12 .  Cooperation and Coordination.   The parties agree to share, and furnish each other with, such information concerning employees and employee benefit plans, and to take all such other action, as is necessary and appropriate to effect the transactions contemplated hereby, and to coordinate, in advance, the time, form and content of communications to current and former employees of the parties relating to such transactions.
 
Section 7.13 .  Withholdings.   (a) To the extent consistent with the terms of the Tax Matters Agreement, the party that is responsible for making a payment hereunder shall be responsible for making the appropriate withholdings, if any, attributable to such payments.
 
(b)   Murphy Oil and Murphy USA agree to comply with the Standard Procedure described in Section 4 of Revenue Procedure 2004-53, 2004-2 C.B. 320 (the “ Standard Procedure ”).  With respect to each Murphy USA Employee, Murphy Oil shall, in accordance with Revenue Procedure 2004-53, assume all responsibility for preparing and filing Form W-2, Wage and Tax Statements; Form W-3, Transmittal of Income and Tax Statements; Form 941, Employer’s Quarterly Federal Tax Returns; Form W-4, Employee's Withholding Allowance Certificates; and Form W-5, Earned Income Credit
 
 
18
 
 
Advance Payment Certificates (collectively, the “ Employee Withholding Documents ”) with regard to wages paid during the period through the Close of the Distribution Date.  Murphy USA shall assume all responsibility for preparing and filing the Employee Withholding Documents with regard to wages paid to each Murphy USA Employee after the Close of the Distribution Date.  Murphy USA and Murphy Oil shall cooperate in good faith to the extent necessary to permit each of them to comply with the Standard Procedure.
 
[Signature Page Follows]
 
 
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IN WITNESS WHEREOF the parties hereto have caused this Agreement to be duly executed by their respective authorized officers as of the date first above written.
 
MURPHY OIL CORPORATION
 
       
By:
/s/ Walter K. Compton
 
  Name:
Walter K. Compton
 
  Title:
Senior Vice President and General Counsel
 
 
 
MURPHY USA INC.
 
       
By:
/s/ John A. Moore
 
  Name:
John A. Moore
 
  Title:
Senior Vice President, General Counsel and Secretary
 
 
 
 
[Signature Page to Employee Matters Agreement]
 
 
20
 
 
SCHEDULE 1.01(a)
 
Name
 
Brandon Lawrence
 
 
 
 
 
SCHEDULE 1.01(b)
 
[None.]
 
 
 
 
 
SCHEDULE 2.02
 
[None.]
 
 
 
 
 
SCHEDULE 5.01(a)
 

Murphy Oil Health and Welfare Plans:
 
·  
Murphy Oil Basic Life and Accidental Death and Dismemberment Plan (excluding retired life classes);
·  
Murphy Oil Supplemental Life Plan;
·  
Murphy Oil Occupational Life Plan;
·  
Murphy Oil Business Travel Policy;
·  
Murphy Oil Long Term Disability Plan;
·  
Murphy Oil HCSAP;
·  
Murphy Oil DCSAP;
·  
Murphy Oil Medical Plan;
·  
Murphy Oil Dental Plan;
·  
Murphy Oil Vision Plan;
·  
Murphy Oil Vacation Policy for Corporate Employees;
·  
Murphy Oil Service Awards Program;
·  
Murphy Oil Employee Assistance Policy;
·  
Murphy Oil Education Assistance Policy; and
·  
Murphy Oil Occupational and Non-Occupational Illness Policy.
 
 

 
Exhibit 10.4
 

TRADEMARK LICENSE AGREEMENT
 
This TRADEMARK LICENSE AGREEMENT (this “ Agreement ”) dated as of August 30, 2013 (the “ Effective Date ”) between Murphy Oil Corporation, a Delaware corporation (“ Licensor ”), and Murphy USA Inc., a Delaware corporation (“ Licensee ”, and each of Licensor and Licensee, a “ Party ”) .
 
WITNESSETH:
 
WHEREAS, Licensor will contribute to Licensee, its wholly-owned Subsidiary, all of Licensor’s shares in Murphy Oil USA, Inc. (“ Murphy Oil USA ”) in connection with the spin-off of Licensee into an independent and separately traded company (the “ Spin-Off ”) that is engaged, indirectly through Murphy Oil USA, in the business of retail marketing of petroleum products and convenience merchandise through a chain of retail gasoline stations (the “ Retail Business ”) and operating production distribution terminals and ethanol production facilities (together with the Retail Business, the “ Business ”);
 
WHEREAS, in connection with the Spin-Off, Murphy Oil USA will assign to Licensor all of its right, title and interest in and to certain trademarks, including the Licensed Marks (as defined below); and
 
WHEREAS, subject to the terms and conditions set forth herein, Licensee desires to obtain, and Licensor is willing to grant to Licensee, a license to use the Licensed Marks in the conduct of the Business.
 
NOW, THEREFORE, for the mutual covenants contained herein, and for other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the Parties agree as follows:
 
ARTICLE 1
Definitions
 
Section 1.01 .  Definitions.   (a) The following terms, as used herein, have the following meanings:
 
“ Affiliate ” means, with respect to any Person, any other Person directly or indirectly controlling, controlled by, or under common control with such Person.  For purposes of this definition, “ control ” when used with respect to any Person means the power to direct the management and policies of such Person, directly or indirectly, whether through the ownership of voting securities, by contract or
 

 
 
 

otherwise, and the terms “ controlling ” and “ controlled ” have correlative meanings.
 
“ Applicable Law ” means, with respect to any Person, any transnational, domestic or foreign federal, state or local law (statutory, common or otherwise), constitution, treaty, convention, ordinance, code, rule, permit, approval, regulation, order, injunction, judgment, decree, ruling or other similar requirement enacted, adopted or promulgated or applied by a Governmental Authority that is binding upon or applicable to such Person.
 
“ Business Day ” means a day, other than Saturday, Sunday or any other day on which commercial banks in New York, New York are authorized or required by Applicable Law to close.
 
“ Change of Control ” means, with respect to Licensee or Murphy Oil USA, the occurrence of any of the following: (i) a “Person” (as such term is used in Sections 13(d) and 14(d)(2) of the Exchange Act) becomes a beneficial owner, directly or indirectly, of equity representing fifty percent (50%) or more of the total voting power of Licensee’s or Murphy Oil USA’s, as applicable, then outstanding equity capital; (ii) such entity merges into, is consolidated with or effects an amalgamation with another Person, or merges another Person into such entity, on a basis whereby less than fifty percent (50%) of the total voting power of the surviving Person immediately after such merger, consolidation or amalgamation is represented by equity held directly or indirectly by former equityholders of (and in respect of their former equity holdings in) such entity immediately prior to such merger, consolidation or amalgamation; and (iii) such entity directly or indirectly sells, transfers or exchanges all, or substantially all, of its assets to another Person unless at least fifty percent (50%) of the total voting power of the transferee is directly or indirectly owned by the equityholders of Licensee or Murphy Oil USA, as applicable, in respect of their former equity holdings in Licensee or Murphy Oil USA immediately prior to transfer; provided that in no event shall the consummation, execution or closing of the Spin-Off constitute a Change of Control with respect to Licensee or Murphy Oil USA.
 
“ Excluded Marks ” means the trademark “MURPHY” and the Rowel Design, in each case whether used on a standalone basis or in connection with any other trademark, design, company name, trade name, domain name or other source identifier (other than as specifically used in the trademarks set forth in Exhibit B).  For the avoidance of doubt, the Excluded Marks shall include the trademarks set forth in Exhibit A.
 
“ Governmental Authority ” means any transnational, domestic or foreign federal, state or local governmental authority, instrumentality, court, legislative body, government organization, commission, tribunal or regulatory or administrative agency, or any political or other subdivision, department or branch of any of the foregoing.
 

 
2
 


“ Licensed Marks ” means the trademarks set forth (and only as set forth) in Exhibit B, including the registrations and applications for registration set forth in Exhibit B.  For the avoidance of doubt, the Licensed Marks shall not include any trademark that is derivative of the trademarks set forth in Exhibit B or any Excluded Mark.
 
“ Person ” means an individual, corporation, partnership, limited liability company, association, trust or other entity or organization, including a governmental authority.
 
“ Rowel Design ” means the design set forth in Exhibit C.
 
“ Subsidiary ” means, with respect to any Person, any entity of which such Person owns, directly or indirectly, securities or other ownership interests having ordinary voting power to elect a majority of the board of directors or other persons performing similar functions.
 
(b)      Each of the following terms is defined in the Section set forth opposite such term:
 
Term
Section
Administrative Agent
Section 2.02(b)
Agent
Section 2.02(b)
Agreement
Preamble
Business
Recitals
Credit Agreement
Section 2.02(b)
Effective Date
Preamble
Financing Agreements
Section 2.02(b)
Insolvency Proceedings
5.03
License
2.01
Licensee
Preamble
Licensor
Preamble
Murphy Oil USA
Recitals
Party
Preamble
Retail Business
Recitals
Spin-Off
Recitals
Term
5.01
Trademark Claims
4.03

Section 1.02 .  Other Definitional and Interpretative Provisions.   The words “hereof”, “herein” and “hereunder” and words of like import used in this Agreement shall refer to this Agreement as a whole and not to any particular provision of this Agreement.  The captions herein are included for convenience of reference only and shall be ignored in the construction or interpretation hereof.  References to Articles, Sections and Exhibits are to Articles, Sections and Exhibits of this Agreement unless otherwise specified.  All Exhibits annexed
 

 
3
 

hereto or referred to herein are hereby incorporated in and made a part of this Agreement as if set forth in full herein.  Any capitalized terms used in any Exhibit but not otherwise defined therein shall have the respective meanings given to them in this Agreement.  Any singular term in this Agreement shall be deemed to include the plural, and any plural term the singular.  Whenever the words “include”, “includes” or “including” are used in this Agreement, they shall be deemed to be followed by the words “without limitation”, whether or not they are in fact followed by those words or words of like import.  “Writing”, “written” and comparable terms refer to printing, typing and other means of reproducing words (including electronic media) in a visible form.
 
ARTICLE 2
License
 
Section 2.01 .  Grant of License.   Subject to the terms and conditions set forth herein, Licensor hereby grants to Licensee a worldwide, exclusive (subject to Section 2.03), non-transferable (except as otherwise set forth in Section 6.01), non-sublicensable (except as otherwise set forth in Section 2.02), royalty-free, fully paid-up license to use the Licensed Marks solely in connection with the conduct of the Business during the Term (the “ License ”).  For the avoidance of doubt, subject to the terms and conditions contained herein, the License shall include (i) Licensee’s right to use “Murphy USA Inc.”, (ii) Murphy Oil USA’s right to use “Murphy Oil USA, Inc.” and (iii) Murphy Oil Trading Company (Eastern)’s right to use “Murphy Oil Trading Company (Eastern)”, in each case, as their respective corporate names during the Term.
 
Section 2.02 .  Sublicense Rights. (a) The License shall include the right of Licensee to grant sublicenses to its Subsidiaries; provided that any such sublicense shall terminate immediately upon the applicable sublicensee ceasing to be a Subsidiary of Licensee.  Any such sublicense shall be evidenced in writing, contain terms and conditions that are no less restrictive on the applicable sublicensee’s use of the Licensed Marks than the terms and conditions in this Agreement and be provided in written form to Licensor as soon as is reasonably practicable following the grant of such sublicense.
 
(b)      Licensee has entered into a Credit Agreement (as amended or extended from time to time, the “ Credit Agreement ”) with certain lenders and JPMorgan Chase Bank, N.A., as Administrative Agent for such lenders (in such capacity, and together with its successors, the “ Administrative Agent ”) and may in the future enter into one or more other credit agreements or other financing agreements (together with the Credit Agreement, “ Financing Agreements ”).  The obligations of Licensee and its Subsidiaries under the Credit Agreement are secured, and the obligations of Licensee and its Subsidiaries under one or more other Financing Agreements may be secured, by security interests in inventory of Licensee and its Subsidiaries.  Licensor hereby consents to the grant by Licensee and/or Murphy Oil USA to the Administrative Agent, and to any financial institution serving as agent or trustee under any other Financing Agreement (the
 
 
 
4
 
 
Administrative Agent and any such other agent or trustee being called an “ Agent ”), of a sublicense to use the Licensed Marks in a manner consistent with their use by Licensee and its Subsidiaries and solely to liquidate   inventory pledged to such Agent as collateral under the applicable Financing Agreement during a period of 180 days immediately following the commencement by such Agent of any exercise of remedies permitted under such Financing Agreement with respect to such collateral (such period to be extended for a period equal to any period that such Agent is subject to the automatic stay or a court order preventing or enjoining it from liquidating such collateral).  Any such sublicense shall be evidenced in writing, contain terms and conditions that are no less restrictive on the applicable sublicensee’s use of the Licensed Marks than the terms and conditions in this Agreement and be provided in written form to Licensor as soon as is reasonably practicable following the grant of such sublicense.  Licensor further agrees for the benefit of each Agent and the secured parties for which such Agent acts, and notwithstanding any other provision of this Agreement, that the rights of such Agent under any such sublicense shall continue in effect in accordance with the terms and conditions set forth above notwithstanding any termination of this Agreement or the License pursuant to Article 5 hereof.
 
Section 2.03 .  U.K. Downstream Business.   The Parties hereby acknowledge that Licensor will engage, directly or indirectly, in the conduct of the Business in the United Kingdom following the Spin-Off.  Notwithstanding anything in this Agreement to the contrary, Licensor shall be permitted to use, and license or otherwise allow others (including acquirers of or successors to the Business as conducted by Licensor in the United Kingdom) to use, “Murco” and any derivative thereof that does not include the term “USA” in connection with the conduct of the Business in the United Kingdom.
 
ARTICLE 3
Ownership and Use of Licensed Marks
 
Section 3.01 .  Ownership of Licensed Marks; Reservation of Rights.   (a) Licensee hereby acknowledges that (i) the License is the only license granted to Licensee or any of its Affiliates with respect to the Licensed Marks and (ii) no other licenses whatsoever have been granted, expressly or by implication or estoppel, to Licensee or any of its Affiliates by the provisions of this Agreement.  Neither this Agreement nor its performance shall confer on Licensee or any of its Affiliates any right with respect to the Licensed Marks other than those rights expressly granted herein, and any and all rights in and to the Licensed Marks not expressly granted to Licensee herein are reserved and retained by Licensor, as is the right to use any Excluded Mark or any trademark that contains the term “Murphy” or the Rowel Design other than the Licensed Marks in any manner (subject to Section 3.05).  Any use of the Licensed Marks by Licensee or any of its Affiliates pursuant to the License shall inure to the benefit of Licensor.
 

 
5
 


(b)      Licensee shall not, and shall cause its Affiliates to not, (i) challenge the validity or ownership of the Licensed Marks, the Excluded Marks or any other marks of Licensor or its Affiliates or claim adversely or assist in any claim adverse to Licensor concerning any right, title or interest in or to the Licensed Marks or the Excluded Marks, (ii) do or permit any act which may directly or indirectly impair or prejudice Licensor’s title to the Licensed Marks or Excluded Marks or be detrimental to the reputation and goodwill of Licensor, (iii) register or attempt to register any trademark, design, company name, trade name, domain name or other source identifier that is derivative of, confusingly similar to or contains any Licensed Mark or Excluded Mark or (iv) use or attempt to use any trademark, design, company name, trade name, domain name or other source identifier (other than the Licensed Marks) that is derivative of, confusingly similar to or contains any Excluded Mark.
 
Section 3.02 .  Appearance of the Licensed Marks; Quality Control .  Licensee shall use the Licensed Marks only in the form stipulated by Licensor and shall conform to and observe such standards as Licensor from time to time prescribes, including standards relative to the quality, design, identity, size, position, appearance, marking and color of the Licensed Marks and the manner, disposition and use of the Licensed Marks.   All goods and services provided by Licensee under the Licensed Marks shall at all times be provided in compliance with Applicable Law and in a manner consistent with the quality of goods and services provided by Licensor and its Affiliates under the Licensed Marks as of immediately prior to the Effective Date.  Licensor shall have the right to inspect any written or electronic materials bearing any Licensed Mark.
 
Section 3.03 .  Prosecution and Maintenance.   Licensor shall, reasonably promptly following Licensee’s request and at Licensee’s sole cost and expense, take all such actions as Licensee may reasonably request to prosecute and maintain any registration or application for registration of any Licensed Mark.
 
Section 3.04 .  Third Party Notices.   If requested in writing by Licensor, Licensee shall ensure that any written or electronic materials bearing a Licensed Mark includes a written statement to the effect that such Licensed Mark is used by Licensee under license from Licensor.
 
Section 3.05 .  Licensor’s Use of Marks.   Subject to Section 2.03, Licensor shall not, and shall cause its Affiliates to not, use the Licensed Marks, the Excluded Marks or any trademark containing the term “Murphy” or the Rowel Design within the field of the Retail Business during the Term.
 
Section 3.06 .  Fair Use.   For the avoidance of doubt, nothing in this Agreement shall restrict or limit either Party’s right to make any use of any term or trademark that constitutes fair use under Applicable Law or factual use for historical or reference purposes.
 

 
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ARTICLE 4
Claims and Liability
 
Section 4.01 .  Disclaimers; Limitation of Liability.   NOTWITHSTANDING ANYTHING IN THIS AGREEMENT TO THE CONTRARY, THE LICENSE IS GRANTED ON AN “AS IS” BASIS WITH NO REPRESENTATIONS OR WARRANTIES, AND EACH PARTY, ON BEHALF OF ITSELF AND ITS AFFILIATES, HEREBY EXCLUDES AND DISCLAIMS ANY EXPRESS OR IMPLIED REPRESENTATIONS OR WARRANTIES OF ANY KIND WITH RESPECT TO THE LICENSE, INCLUDING THOSE REGARDING MERCHANTABILITY, FITNESS FOR A PARTICULAR PURPOSE AND NON-INFRINGEMENT AND ANY WARRANTIES IMPLIED BY ANY COURSE OF DEALING OR TRADE USAGE.  NEITHER PARTY NOR ANY OF ITS AFFILIATES SHALL BE LIABLE UNDER ANY LEGAL OR EQUITABLE THEORY FOR ANY DIRECT, INDIRECT, SPECIAL, INCIDENTAL, CONSEQUENTIAL, PUNITIVE OR EXEMPLARY DAMAGES OF ANY KIND IN CONNECTION WITH THIS AGREEMENT EVEN IF THE OTHER PARTY HAS BEEN ADVISED OF THE POSSIBILITY OF SUCH DAMAGES.
 
Section 4.02 .  Infringement of Licensed Marks by Third Party.   Licensee shall promptly notify Licensor of any unauthorized or improper use by any Person of any Licensed Marks, including in such notice the particulars of such use and any other information that Licensee and its Affiliates may have relating to such use, and reasonably cooperate with Licensor, at Licensee’s sole cost and expense, in connection with any action Licensor may take to prevent or halt such use.  In the event that Licensor does not take reasonable action to halt any such use related to the Business within a reasonable period of time following such notice, Licensee may take reasonable action to prevent or halt such use, and Licensor shall reasonably cooperate with Licensee, at Licensee’s sole cost and expense, in connection with any such action of Licensee.
 
Section 4.03 .  Third Party Actions.   Licensee shall promptly notify Licensor of any allegations, claims or demands (actual or threatened) against Licensee or any of its Affiliates for infringement of any intellectual property rights of third parties by reason of Licensee’s or its Affiliates’ use of the Licensed Marks (collectively, “ Trademark Claims ”) and provide all related particulars requested by Licensor.  Licensor shall retain exclusive control over the resolution of any Trademark Claim, including the right to agree to an injunction against further use of any Licensed Mark at issue or to otherwise settle such Trademark Claim; provided that such settlement shall not require any payment by Licensee without Licensee’s prior written consent.  In the event that Licensor does not take reasonable action to resolve a Trademark Claim within a reasonable period of time following such notice, Licensee may assume exclusive control over such Trademark Claim (but solely to the extent such Trademark Claim relates to allegations, claims or demands (actual or threatened) against Licensee or any of its Affiliates), including the right to agree to an injunction against further use of
 

 
7
 

any Licensed Mark at issue by Licensee or any of its Affiliates or to otherwise settle such Trademark Claim with respect to Licensee and its Affiliates; provided that such settlement shall not bind or apply to Licensor in any manner without Licensor’s prior written consent.  Subject to the foregoing and at Licensee’s sole cost and expense, each Party shall provide to the other Party such assistance as such other Party may reasonably request in connection with the defense or settlement of any Trademark Claim.

Section 4.04 .  Indemnification.   Licensee shall indemnify, defend and hold harmless Licensor, its Affiliates and their respective directors, officers, employees and agents from and against any damages, losses, liabilities, fines, penalties and expenses (including reasonable costs of investigation and reasonable attorneys’ fees in connection with any action, suit or proceeding) related to or arising out of the use of the Licensed Marks by Licensee or any of its Affiliates or the exercise of Licensee’s rights and obligations under this Agreement.
 
ARTICLE 5
Term and Termination
 
Section 5.01 .  Term.   This Agreement is effective as of the Effective Date and shall continue in full force and effect in perpetuity unless terminated in accordance with Section 5.02 or Section 5.03 (the “ Term ”).
 
Section 5.02 .  Termination by Licensee.   Licensee may terminate this Agreement at any time immediately upon written notice to Licensor.
 
Section 5.03 .  Termination by Licensor.   Licensor may terminate this Agreement immediately upon written notice to Licensee upon the occurrence of any of the following:
 
(a)      a material breach of any provision of this Agreement by Licensee or any of its Affiliates and failure to fully cure such breach within 30 days after Licensor’s provision of written notice to Licensee of such breach;
 
(b)      a Change of Control of Licensee or Murphy Oil USA; and
 
(c)      with respect to Licensee or any of its Affiliates, (i) the voluntary commencement of any proceeding (all of which proceedings are hereinafter collectively referred to as “ Insolvency Proceedings ”) under the United States Bankruptcy Code or any other law of any jurisdiction for the relief, liquidation or rehabilitation of debtors, (ii) the involuntary commencement of an Insolvency Proceeding that is not dismissed within ninety (90) days after the filing thereof, or (iii) the appointment of or taking of possession by a receiver, custodian, trustee, liquidator or similar official.
 
Section 5.04 .  Effect of Termination; Survival.   Upon expiration or termination of this Agreement, the License shall immediately terminate without
 

 
8
 

any further action by Licensor, and Licensee shall, and shall cause each of its Affiliates to, cease using the Licensed Marks in any form.   Notwithstanding anything in this Agreement to the contrary, Sections Section 2.02(b), 3.01(a), 4.01, 4.04 and 5.04 and Article 6 shall survive any expiration or termination of this Agreement.
ARTICLE 6
General
 
Section 6.01 .  Successors and Assigns.   The provisions of this Agreement shall be binding upon and inure to the benefit of the Parties and their respective successors and permitted assigns; provided that, except as expressly set forth in Section 2.02, Licensee may not assign, delegate or otherwise transfer this Agreement or any of its rights or obligations hereunder without the express prior written consent of Licensor.
 
Section 6.02 .  Notices. All notices, requests and other communications to any Party shall be in writing (including facsimile and email transmission) and shall be given,
 
if to Licensee, to:
 
Murphy USA Inc.
200 Peach Street
P.O. Box 7000
El Dorado, Arkansas 71731
Attn: John Moore
Facsimile: 870-864-6489
 
with a copy to:
 
Davis Polk & Wardwell LLP
450 Lexington Avenue
New York, New York 10017
Attn: William L. Taylor, Esq.
Facsimile: (212) 701-5800
 
if to Licensor, to:
 
Murphy Oil Corporation
200 Peach Street
P.O. Box 7000
El Dorado, Arkansas 71731
Attn: Walter Compton
Facsimile: 870-881-6893

with a copy to:


 
9
 

Davis Polk & Wardwell LLP
450 Lexington Avenue
New York, New York 10017
Attn: William L. Taylor, Esq.
Facsimile: (212) 701-5800

 
or such other address, facsimile number or email address as such Party may hereafter specify for the purpose by notice to the other Party.  All such notices, requests and other communications shall be deemed received on the date of receipt by the recipient thereof if received prior to 5:00 p.m. in the place of receipt and such day is a Business Day.  Otherwise, any such notice, request or communication shall be deemed not to have been received until the next succeeding Business Day.
 
Section 6.03 .  Specific Performance.   The Parties acknowledge that money damages are not an adequate remedy for any violation of this Agreement and that either Party may, in its sole discretion, apply to the courts set forth in Section 6.05 for specific performance, or injunctive or such other relief as such courts may deem just and proper, in order to enforce this Agreement or prevent any violation hereof, and to the extent permitted by Applicable Law, each Party waives the posting of bond and any objection to the imposition of such relief.
 
Section 6.04 .  Amendments and Waivers.   (a) Any provision of this Agreement may be amended or waived if, and only if, such amendment or waiver is in writing and signed, in the case of an amendment, by each of the Parties or, in the case of a waiver, by the Party against whom the waiver is to be effective.
 
(b)       No failure or delay by any Party in exercising any right, power or privilege hereunder shall operate as a waiver thereof nor shall any single or partial exercise thereof preclude any other or further exercise thereof or the exercise of any other right, power or privilege.  The rights and remedies herein provided shall be cumulative and not exclusive of any rights or remedies provided by Applicable Law.
 
Section 6.05 .  Governing Law and Jurisdiction.   This Agreement shall be subject to and governed by the laws of the State of New York without regard to the conflict of law rules of such state.  Each Party hereby submits and consents to the jurisdiction of the state and federal courts in the State of New York and to venue in New York, New York.
 
Section 6.06 .   Counterparts.   This Agreement may be signed in any number of counterparts, each of which shall be deemed an original and all of which, when taken together, shall constitute one agreement.
 
Section 6.07 .  No Third Party Beneficiaries.   Except as provided in Section 2.02(b), no provision of this Agreement is intended to confer any rights, benefits,
 

 
10
 

remedies, obligations or liabilities hereunder upon any Person other than the Parties and their respective successors and permitted assigns.
 
Section 6.08 .  Entire Agreement.   This Agreement constitutes the entire agreement between the Parties with respect to the subject matter hereof and supersedes all prior agreements, understandings and negotiations, both oral and written, among the Parties with respect to the subject matter hereof.  For the avoidance of doubt, the Parties acknowledge and agree that the transactions contemplated in connection with the Spin-Off, together with the transactions contemplated by this Agreement, collectively constitute a single and integrated transaction.
 
Section 6.09 .  Severability.   If any provision of this Agreement or any part thereof shall be determined to be invalid or unenforceable, such invalidity or unenforceability shall not render the entire Agreement invalid.  Rather, the Agreement shall be construed as if not containing the particular invalid or unenforceable provision, and the rights and obligations of each Party shall be construed and enforced accordingly.
 
[remainder of page intentionally left blank]
 

 
11
 

IN WITNESS WHEREOF, the Parties have caused this Agreement to be duly executed as of the date first written above.
 
MURPHY OIL CORPORATION
By:
/s/ Walter K. Compton
 
Name:
Walter K. Compton
 
Title:
Senior Vice President and General Counsel

 
MURPHY USA INC.
By:
/s/ John A. Moore
 
Name:
John A. Moore
 
Title:
Senior Vice President, General Counsel and Secretary

 

 

 

 

 
[ Signature Page to Trademark License Agreement ]

 
 
 

Exhibit A
Excluded Marks
 
Murphy Oil Corporation
Murphy Gas Gathering Inc.
Arkansas Oil Company
Murphy Crude Oil Marketing
Caledonia Land Company
El Dorado Engineering Inc.
El Dorado Contractors Inc.
Marine Land Company
Murphy Eastern Oil Company
Murphy Exploration & Production Company
Mentor Holding Corporation
Mentor Excess and Surplus Lines Insurance Company
MIRC Corporation
Murphy Building Corporation
Murphy Exploration & Production Company – International
Canam Offshore Limited
Canam Brunei Oil Ltd.
Murphy Peninsular Malaysia Oil Co., Ltd.
Murphy Sabah Oil Co., Ltd.
Murphy Sarawak Oil Co., Ltd.
El Dorado Exploration, S.A.
Murphy Australia Holdings Pty. Ltd.
Murphy Australia NT/P80 Oil Pty. Ltd.
Murphy Australia Oil Pty. Ltd.
Murphy Australia AC/P 36 Oil Pty. Limited
Murphy Australia WA-408-P Oil Pty. Ltd.
Murphy Australia WA-423-P Oil Pty. Ltd.
Murphy Australia WA-476-P Oil Pty. Ltd.
Murphy Australia WA-481-P Oil Pty. Ltd.
Murphy Baranan Oil Co., Ltd.
Murphy Brazil Exploracao e Producao de Petroleo e Gas Ltda.
Murphy Cameroon Elombo Oil Co., Ltd.
Murphy Cameroon Ntem Oil Co., Ltd.
Murphy Central Dohuk Oil Co. Ltd.
Murphy Equatorial Guinea Oil Co., Ltd.
Murphy Exploration (Alaska), Inc.
Murphy Global, Inc.
Murphy International Marketing & Trading Company
Murphy Italy Oil Company (see company F. below)
Murphy Kurdistan Oil Co., Ltd.
Murphy Nha Trang Oil Co., Ltd.
Murphy Overseas Ventures Inc.

 
A-1
 

Murphy Brazil Exploracao e Producao de Petroleo e Gas Ltda.
Murphy Phuong Nam Oil Co., Ltd.
Murphy SE Asia Oil Pte. Ltd.
Murphy Semai IV Ltd.
Murphy Semai Oil Co., Ltd.
Murphy Somali Oil Company
Murphy South Barito, Ltd.
Murphy-Spain Oil Company
Murphy Suriname Company Ltd.
Murphy Suriname Oil Company, Ltd.
Murphy West Africa, Ltd.

 

 
A-2
 

 
Exhibit B
 
  Licensed Marks
 
Murphy USA
Murphy USA Inc.
Murphy Oil USA, Inc.
Murphy Oil USA
Murphy Oil Trading Company (Eastern)
Murphy Express
Murpay
Dr. Murphy’s Crazy Concoction

Registrations

Country
Mark
Status
Application No.
Registration No.
U.S.
MURPHY USA and two-star design
Registered
77/844,528
3,938,678
U.S.
MURPHY USA and design
Registered
75/300,843
2,180,353
U.S.
MURPAY
Registered
77/844,494
3,938,676
U.S.
DR. MURPHY’S CRAZY CONCOCTION
Registered
85/444,396
4,269,358


 
16
 

 
Exhibit C

Rowel Design

 
 
 
Exhibit 99.1
 
 
 
 
MURPHY OIL CORPORATION COMPLETES SPIN-OFF OF MURPHY USA INC.

EL DORADO, Arkansas, August 30, 2013 – Murphy Oil Corporation (NYSE:MUR) (“Murphy Oil”) announced today that it has completed the spin-off of its U.S. retail marketing business into an independent public company called Murphy USA Inc. (“Murphy USA”).  The spin-off was achieved through the distribution to Murphy Oil’s shareholders of one share of Murphy USA common stock for every four shares of Murphy Oil stock held at the close of business on the record date of August 21, 2013.
 
Steve Cossé, President and Chief Executive Officer of Murphy Oil Corporation said, “Today’s announcement demonstrates Murphy Oil’s commitment to provide long-term value to our shareholders.  Murphy USA is well-positioned with a strong management team and business plan to be a successful independent company.”  Cossé added, “Following the spin-off, Murphy Oil will move forward, under the leadership of Roger Jenkins, as a focused exploration and production company with a strong portfolio of global assets.”
 
Murphy USA common stock will begin regular-way trading on the New York Stock Exchange under the ticker symbol “MUSA” on September 3, 2013.
 
For more information go to the website for Murphy Oil Corporation at www.murphyoilcorp.com and for Murphy USA Inc. at www.murphyusa.com .
 
This press release contains forward-looking statements as defined in the Private Securities Litigation Reform Act of 1995.  These statements, which express management’s current views concerning future events or results, are subject to inherent risks and uncertainties.  Factors that could cause one or more of the events forecasted in this press release not to occur include, but are not limited to, a deterioration in the business or prospects of Murphy Oil or Murphy USA, adverse developments in Murphy Oil’s or Murphy USA’s markets, or adverse developments in the U.S. or global capital
 
 
 
 
 
markets, credit markets or economies generally.  Factors that could cause actual results to differ materially from those expressed or implied in our forward-looking statements include, but are not limited to, the volatility and level of crude oil and natural gas prices, the level and success rate of our exploration programs, our ability to maintain production rates and replace reserves, political and regulatory instability, uncontrollable natural hazards and a failure to execute a sale of the U.K. downstream operations on acceptable terms.  For further discussion of risk factors, see Murphy Oil’s Annual Report on Form 10-K for the year ended December 31, 2012 and subsequent Forms 10-Q, Murphy USA’s Registration Statement on Form 10 and subsequent Forms 8-K of each on file with the U.S. Securities and Exchange Commission.  Neither Murphy Oil nor Murphy USA undertake any duty to publicly update or revise any forward-looking statements.
 
 
 
 
 
 
Exhibit 99.2
 
 
Murphy Oil Corporation
Unaudited Pro Forma Consolidated Financial Statements
 
On August 30, 2013, Murphy Oil Corporation (Murphy) completed the separation of its U.S. downstream business by distributing 100% of the shares of Murphy USA Inc. (MUSA) to its shareholders. On August 30, 2013, Murphy's shareholders of record as of the close of business on August 21, 2013 (the "Record Date") received one common share of MUSA for every four common shares of Murphy held as of the Record Date.
 
The unaudited pro forma consolidated financial statements of Murphy presented in this Exhibit were derived from our historical consolidated financial statements and are being presented to give effect to the separation of MUSA. Beginning with Murphy's financial statements for the period ending and as of September 30, 2013, the U.S. downstream operating results will be reported as discontinued operations. The unaudited pro forma condensed consolidated balance sheet assumes the separation of MUSA occurred on June 30, 2013. The unaudited pro forma condensed consolidated statements of income are presented as if the separation of our U.S. downstream business occurred on January 1, 2012. The following unaudited pro forma condensed consolidated financial statements should be read in conjunction with our historical financial statements and accompanying notes.
 
The pro forma adjustments are based on available information and assumptions management believes are factually supportable and for income statement purposes are recurring in nature. The pro forma adjustments to reflect the separation of MUSA include:
 
 
–
Reclassifications of accounts payable to MUSA previously eliminated in consolidation as third-party accounts payable
 
–
A one-time distribution from MUSA to Murphy of $650 million in connection with the separation
 
–
An adjustment to reclassify the remaining deferred tax balance after the spin-off of MUSA on the balance sheet.
 
Murphy's unaudited pro forma condensed consolidated statements of income do not include adjustments for all of the costs of operating MUSA after the separation since they are not factually supportable and recurring. The costs of effecting the separation of MUSA are reflected in the Pro Forma column in the pro forma condensed consolidated statements of income for the applicable periods that these costs were incurred.
 
The unaudited pro forma condensed consolidated financial statements are for illustrative purposes only, and do not reflect what our financial position and results of operations would have been had the separation occurred on the dates indicated and these statements are not indicative of our future financial position and future results of operations.
 
 
1
 
 
MURPHY OIL CORPORATION AND CONSOLIDATED SUBSIDIARIES
UNAUDITED PRO FORMA CONDENSED CONSOLIDATED STATEMENTS OF INCOME
SIX MONTHS ENDED JUNE 30, 2013
 
         
Separation
   
Pro Forma
       
(Thousands of dollars except per share amounts)
 
Historical
   
of MUSA
   
Adjustments
   
Pro Forma
 
Revenues
                       
Sales and other operating revenues
  $ 13,849,452       (8,477,755 )           5,371,697  
Gain (loss) on sale of assets
    (278 )     (8 )           (286 )
Interest and other income
    8,622       –             8,622  
Total revenues
    13,857,796       (8,477,763 )           5,380,033  
 
Costs and Expenses
                             
Crude oil and product purchases
    10,452,171       (7,872,186 )           2,579,985  
Operating expenses
    1,125,244       (345,538 )           779,706  
Exploration expenses, including undeveloped
                             
lease amortization
    197,265       –             197,265  
Selling and general expenses
    225,009       (46,003 )           179,006  
Depreciation, depletion and amortization
    806,042       (38,107 )           767,935  
Impairment of properties
    21,587       –             21,587  
Accretion of asset retirement obligations
    24,404       (547 )           23,857  
Interest expense
    56,621       –             56,621  
Interest capitalized
    (27,866 )     –             (27,866 )
Total costs and expenses
    12,880,477       (8,302,381 )           4,578,096  
 
Income from continuing operations before income taxes
    977,319       (175,382 )           801,937  
Income tax expense
    437,221       (68,089 )           369,132  
Income from continuing operations
    540,098       (107,293 )           432,805  
Income from discontinued operations, net of income taxes
    223,145       –             223,145  
Net Income
  $ 763,243       (107,293 )     –       655,950  
 
Income per Common Share – Basic
                               
Income from continuing operations
  $ 2.85                       2.28  
Income from discontinued operations
    1.17                       1.18  
Net Income – Basic
  $ 4.02                       3.46  
 
Income per Common Share – Diluted
                               
Income from continuing operations
  $ 2.83                       2.27  
Income from discontinued operations
    1.17                       1.17  
Net Income – Diluted
  $ 4.00                       3.44  
 
Average Common shares outstanding – basic
    189,753,673                       189,753,673  
Average Common shares outstanding – diluted
    190,702,248                       190,702,248  
 
 
See accompanying notes to unaudited pro forma condensed consolidated financial statements.
 
 
2
 
 
MURPHY OIL CORPORATION AND CONSOLIDATED SUBSIDIARIES
UNAUDITED PRO FORMA CONDENSED CONSOLIDATED STATEMENTS OF INCOME
YEAR ENDED DECEMBER 31, 2012
 
         
Separation
   
Pro Forma
       
(Thousands of dollars except per share amounts)
 
Historical
   
of MUSA
   
Adjustments
   
Pro Forma
 
Revenues
                       
Sales and other operating revenues
    $28,616,331       (17,724,393 )           10,891,938  
Loss on sale of assets
    (1,258 )     1,005             (253 )
Interest and other income
    10,973       –             10,973  
Total revenues
    28,626,046       (17,723,388 )           10,902,658  
Costs and Expenses
                             
Crude oil and product purchases
    22,449,306       (16,595,123 )           5,854,183  
Operating expenses
    2,127,503       (727,740 )           1,399,763  
Exploration expenses, including undeveloped
                             
lease amortization
    380,924       –             380,924  
Selling and general expenses
    354,493       (85,269 )           269,224  
Depreciation, depletion and amortization
    1,375,577       (75,235 )           1,300,342  
Impairment of properties
    260,988       (60,988 )           200,000  
Accretion of asset retirement obligations
    39,341       (980 )           38,361  
Interest expense
    54,105       –             54,105  
Interest capitalized
    (39,173 )     –             (39,173 )
Total costs and expenses
    27,003,064       (17,545,335 )            9,457,729  
Income from continuing operations before income taxes
    1,622,982       (178,053 )           1,444,929  
Income tax expense
    658,936       (72,666 )             586,270  
Income from continuing operations
    964,046       (105,387 )             858,659  
Income from discontinued operations, net of income taxes
    6,830       18,082               24,912  
Net Income
  $ 970,876       (87,305 )     –       883,571  
Income per Common Share – Basic
                               
Income from continuing operations
  $ 4.97                       4.43  
Income from discontinued operations
    0.04                       0.13  
Net Income – Basic
  $ 5.01                       4.56  
Income per Common Share – Diluted
                               
Income from continuing operations
  $ 4.95                       4.41  
Income from discontinued operations
    0.04                       0.13  
Net Income – Diluted
  $ 4.99                       4.54  
Average Common shares outstanding – basic
    193,902,335                       193,902,335  
Average Common shares outstanding – diluted
    194,668,737                       194,668,737  
 
 
See accompanying notes to unaudited pro forma condensed consolidated financial statements.
 
 
3
 
 
MURPHY OIL CORPORATION AND CONSOLIDATED SUBSIDIARIES
UNAUDITED PRO FORMA CONSOLIDATED BALANCE SHEETS
JUNE 30, 2013
 
         
Separation
   
Pro Forma
       
(Thousands of dollars)
 
Historical
   
of MUSA
   
Adjustments
   
Pro Forma
 
 
ASSETS
                       
Current assets
                       
Cash and cash equivalents
    $974,426       (59,658 )     650,000
(a)
    1,564,768  
Canadian government securities with maturities
                               
greater than 90 days at the date of acquisition
    129,884       –       –       129,884  
Accounts receivable, less allowance for doubtful
                               
accounts
    2,083,309       (393,575 )     –       1,689,734  
Inventories, at lower of cost or market
                               
Crude oil
    186,629       (27,880 )     –       158,749  
Finished products
    264,947       (164,313 )     –       100,634  
Materials and supplies
    307,686       (5,491 )     –       302,195  
Prepaid expenses
    404,255       (21,037 )     –       383,218  
Deferred income taxes
    64,577       –       11,879 (b)     76,456  
Total current assets
    4,415,713       (671,954 )     661,879       4,405,638  
 
Property, plant and equipment, at cost, less accumulated
                               
depreciation, depletion and amortization
    14,233,376       (1,234,527 )     –       12,998,849  
Goodwill
    40,652       –       –       40,652  
Deferred charges and other assets
    135,234       (413 )     –       134,821  
 
Total assets
    $18,824,975       (1,906,894 )     661,879       17,579,960  
 
LIABILITIES AND STOCKHOLDERS’ EQUITY
                               
Current liabilities
                               
Current maturities of long-term debt
    $17,575       (47 )     –       17,528  
Accounts payable and accrued liabilities
    3,341,504       (588,630 )     67,673
(c)
    2,820,547  
Income taxes payable
    393,228       (20,541 )     –       372,687  
Deferred income taxes
    –        (11,879 )     11,879 (b)     –  
Total current liabilities
    3,752,307       (621,097 )     79,552       3,210,762  
 
Long-term debt
    3,046,062       (1,100 )     –       3,044,962  
Deferred income taxes
    1,557,744       (122,803 )     –       1,434,941  
Asset retirement obligations
    819,970       (16,388 )     –       803,582  
Deferred credits and other liabilities
    514,720       (17,656 )     –       497,064  
 
Stockholders’ equity
                               
Cumulative Preferred Stock, par $100, authorized 400,000
                               
shares none issued
    –       –       –       –  
Common Stock, par $1.00, authorized 450,000,000
                               
shares, issued 194,770,551 shares
    194 ,771       –       –       194,771  
Capital in excess of par value
    881,617       –       –       881,617  
Retained earnings
    8,361,256       (1,127,850 )     58 2,327
(d)
    7,815,733  
Accumulated other comprehensive income
    182,133       –       –       182,133  
Treasury stock, 7,881,548 shares of
                               
Common Stock, at cost
    (485,605 )     –       –       (485,605 )
Total stockholders’ equity
    9,134,172       (1,127,850 )     582,327       8,588,649  
 
Total liabilities and stockholders’ equity
    $18,824,975       (1,906,894 )     661,879       17,579,960  
 
See accompanying notes to unaudited pro forma condensed consolidated financial statements.
 
 
4
 

Notes to Unaudited Pro Forma Condensed Consolidated Financial Statements
 
 
(a)    
Immediately prior to the separation, Murphy USA, Inc. (MUSA) distributed cash of $650 million to Murphy Oil Corporation. Murphy Oil used a portion of this distribution to pay down debt in August 2013, but the dividend is reflected herein as an increase to cash balance.
     
  (b) Re presents the adjustment to reclassify the remaining deferred tax balance after the spin-off of MUSA on the balance sheet.
     
 
(c)    
Represents the adjustment to reflect previously recorded accounts payable to MUSA of $67.7 million and previously eliminated in consolidation as third-party accounts payable.
     
 
(d)    
Stockholders’ equity was adjusted as a result of adjustments (a) and (c).
     
 
(e)    
Separation costs incurred related to the separation of MUSA have not been included as pro forma adjustments in the pro forma condensed consolidated financial statements. Separation costs incurred were $5.6 million for the six months ended June 30, 2013 and $3.0 million for the year ended December 31, 2012. These costs primarily included legal, accounting and information systems costs.
     
 
(f)    
Additional costs approximately $17.0 million are expected to be incurred by the Company in connection with the MUSA spin-off. These projected costs are as follows (in millions of dollars):

Banker fees
  $ 13.0  
Legal and accounting
    2.0  
Other
    2.0  
    $ 17.0  
 
 
   
These projected costs have not been included in the pro forma condensed consolidated financial statements.
 
 
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