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
AUGUST 30, 2002
(Date of Earliest Event Reported)
CONOCOPHILLIPS
(Exact name of registrant as specified in its charter)
DELAWARE 01-0562944
(State or other (Commission File Number) (IRS Employer
jurisdiction Identification
of incorporation) No.)
600 NORTH DAIRY ASHFORD ROAD
HOUSTON, TEXAS 77079
(Address of principal executive offices, including Zip Code)
(281) 293-1000
(Registrant's telephone number, including area code)
ITEM 2. ACQUISITION OR DISPOSITION OF ASSETS.
On August 30, 2002, Phillips Petroleum Company, a Delaware
corporation ("Phillips") and Conoco Inc., a Delaware corporation ("Conoco"),
combined their businesses by merging with and into separate acquisition
subsidiaries of ConocoPhillips, a Delaware corporation ("ConocoPhillips"). As a
result of the mergers, each of Phillips and Conoco became a wholly-owned
subsidiary of ConocoPhillips. In the mergers, each share of Phillips common
stock, par value $1.25 per share, has been converted into one share of
ConocoPhillips common stock, par value $.01 per share ("ConocoPhillips Common
Stock"), and each share of Conoco common stock, par value $.01 per share, has
been converted into 0.4677 of a share of ConocoPhillips Common Stock. Each share
of ConocoPhillips Common Stock has attached to it a preferred stock purchase
right.
The issuance of ConocoPhillips Common Stock in the mergers was
registered under the Securities Act of 1933 pursuant to ConocoPhillips'
registration statement on Form S-4 (File No. 333-74798) (the "Registration
Statement") filed with the Securities and Exchange Commission (the "SEC") and
declared effective on February 7, 2002. The Joint Proxy Statement/Prospectus of
Phillips and Conoco included in the Registration Statement contains additional
information about this transaction. Pursuant to Rule 12g-3(c) under the
Securities Exchange Act of 1934, as amended (the "Exchange Act"), the
ConocoPhillips Common Stock, including the attached preferred stock purchase
right, is deemed to be registered under Section 12(b) of the Exchange Act. The
ConocoPhillips Common Stock has been approved for listing on the New York Stock
Exchange and will trade under the ticker symbol "COP". The description of
ConocoPhillips Common Stock contained under the caption "Description of New
Parent Capital Stock" in the Joint Proxy Statement/Prospectus is incorporated by
reference herein.
Phillips' common stock and Conoco's common stock were both
registered pursuant to Section 12(b) of the Exchange Act and listed on the New
York Stock Exchange. Each of Phillips and Conoco is delisting its common stock
from the New York Stock Exchange and filing a Form 15 with the SEC to terminate
the registration of its common stock under the Exchange Act.
ConocoPhillips' fiscal year will end on the 31st day of
December in each year.
On August 30, 2002, ConocoPhillips issued a press release
announcing the completion of the mergers. A copy of the press release is
attached hereto as Exhibit 99.1 and incorporated herein by reference. The
foregoing description of the press release is qualified in its entirety by
reference to the full text of Exhibit 99.1.
ITEM 5. OTHER EVENTS.
Regulatory Approvals
On August 30, 2002, the Federal Trade Commission (the "FTC")
voted to accept for public comment the Agreement Containing Consent Orders,
including the Decision and Order and the Order to Hold Separate and Maintain
Assets (collectively, the "FTC Consent Decree") among Phillips, Conoco and the
FTC.
The FTC's acceptance of the FTC Consent Decree for public
comment satisfied the final outstanding condition to the obligations of Phillips
and Conoco to consummate the mergers, other than conditions that by their nature
could not be satisfied until the date of the consummation of the mergers.
ITEM 7. FINANCIAL STATEMENTS AND EXHIBITS.
The mergers will be reported by ConocoPhillips as an
acquisition of Conoco by Phillips. Pursuant to the instructions to Item 7(a)(4)
and Item 7(b)(2) of Form 8-K, not later than 60 days after the date that this
Report was required to be filed, ConocoPhillips intends to file an amendment to
this Report on Form 8-K/A that will include the audited financial statements of
the business acquired (Conoco) and the related pro forma financial information
within 60 days.
(C) Exhibits.
Exhibit 2.1 Agreement and Plan of Merger, dated
as of November 18, 2001, by and
among Phillips, ConocoPhillips, P
Merger Corp. (formerly known as
Porsche Merger Corp.), C Merger
Corp. (formerly known as Corvette
Merger Corp.) and Conoco
(incorporated by reference to Annex
A to the Joint Proxy Statement/
Prospectus in Amendment No. 3 to
ConocoPhillips' Registration
Statement on Form S-4 filed on
February 7, 2002 (File No.
333-74798))
Exhibit 3.1 Restated Certificate of
Incorporation of ConocoPhillips
Exhibit 3.2 Certificate of Designations of
Series A Junior Participating
Preferred Stock
Exhibit 3.3 By-Laws of ConocoPhillips
Exhibit 4.1 Rights Agreement, dated as of
June 30, 2002, between
ConocoPhillips and Mellon Investor
Services LLC, a New Jersey limited
liability company, as rights agent
Exhibit 99.1 Press Release dated August 30, 2002
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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.
CONOCOPHILLIPS
Date: August 30, 2002 By: /s/ RICK A. HARRINGTON
-----------------------------------
Name: Rick A. Harrington, Esq.
Title: Senior Vice President and
General Counsel
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EXHIBIT INDEX
Exhibit No. Description
__________ ___________
Exhibit 2.1 Agreement and Plan of Merger, dated as of November
18, 2001, by and among Phillips, ConocoPhillips, P
Merger Corp. (formerly known as Porsche Merger
Corp.), C Merger Corp. (formerly known as Corvette
Merger Corp.) and Conoco (incorporated by reference
to Annex A to the Joint Proxy Statement/Prospectus in
Amendment No. 3 to ConocoPhillips' Registration
Statement on Form S-4 filed on February 7, 2002
(File No. 333-74798))
Exhibit 3.1 Restated Certificate of Incorporation of
ConocoPhillips
Exhibit 3.2 Certificate of Designations of Series A Junior
Participating Preferred Stock of ConocoPhillips
Exhibit 3.3 By-Laws of ConocoPhillips
Exhibit 4.1 Rights Agreement, dated as of June 30, 2002,
between ConocoPhillips and Mellon Investor Services
LLC, a New Jersey limited liability company, as
rights agent
Exhibit 99.1 Press Release dated August 30, 2002
RESTATED CERTIFICATE OF INCORPORATION
of
CONOCOPHILLIPS
FIRST: The name of the Corporation is ConocoPhillips
(hereinafter the "Corporation").
SECOND: The address of the registered office of the
Corporation in the State of Delaware is 1209 Orange Street, in the City of
Wilmington, County of New Castle. The name of its registered agent at that
address is The Corporation Trust Company.
THIRD: The purpose of the Corporation is to engage in any
lawful act or activity for which a corporation may be organized under the
General Corporation Law of the State of Delaware as set forth in Title 8 of the
Delaware Code (the "DGCL").
FOURTH: A. AUTHORIZED SHARES. The total number of shares of
stock that the Corporation shall have authority to issue is 3,000,000,000 (three
billion) of which (i) 2,500,000,000 (two billion, five hundred million) shares
shall be shares of Common Stock, par value $.01 per share (the "Common Stock"),
and (ii) 500,000,000 (five hundred million) shares shall be shares of Preferred
Stock, par value $.01 per share (the "Preferred Stock"). The number of
authorized shares of any of the Preferred Stock or the Common Stock may be
increased or decreased (but not below the number of shares thereof then
outstanding) by the affirmative vote of the holders of a majority in voting
power of the stock of the Corporation entitled to vote thereon irrespective of
the provisions of Section 242(b)(2) of the DGCL (or any successor provision
thereto), and no vote of the holders of any of the Preferred Stock or the Common
Stock voting separately as a class shall be required therefor.
B. PREFERRED STOCK. The Board of Directors is hereby expressly
authorized, by resolution or resolutions, to provide, out of the unissued shares
of Preferred Stock, for series of Preferred Stock and, with respect to each such
series, to fix the number of shares constituting such series and the designation
of such series, and the voting powers, preferences and relative,participating,
optional or other special rights, if any, and any qualifications, limitations or
restrictions thereof, of the shares of such series. The voting powers,
preferences and relative, participating, optional and other special rights, if
any, of each series of Preferred Stock, and any qualifications, limitations or
restrictions thereof, if any, may differ from those of any and all other series
at any time outstanding.
C. COMMON STOCK.
(1) Subject to the rights of the holders of Preferred Stock,
and subject to any other provisions of this Restated Certificate of
Incorporation ("Certificate of Incorporation"), holders of Common Stock shall be
entitled to receive such dividends and other distributions in cash, stock of any
corporation or property of the Corporation as may be declared thereon by the
Board of Directors from time to time out of assets or funds of the Corporation
legally available therefor and shall share equally on a per share basis in all
such dividends and other distributions.
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(2) (a) At every meeting of the stockholders of the
Corporation every holder of Common Stock shall be entitled to one vote in person
or by proxy for each share of Common Stock standing in his or her name on the
transfer books of the Corporation in connection with the election of directors
and all other matters submitted to a vote of stockholders; provided, however,
that, except as otherwise required by law, holders of Common Stock, as such,
shall not be entitled to vote on any amendment to this Certificate of
Incorporation (including any Certificate of Designation relating to any series
of Preferred Stock) that relates solely to the terms of one or more outstanding
series of Preferred Stock if the holders of such affected series are entitled,
either separately or together with the holders of one or more other such series,
to vote thereon pursuant to this Certificate of Incorporation (including any
Certificate of Designation relating to any series of Preferred Stock) or
pursuant to the DGCL.
(b) The affirmative vote of shares representing not
less than 80% of the votes entitled to be cast by the Voting Stock shall be
required to alter, amend or adopt any provision inconsistent with or repeal
Article FIFTH, Article SEVENTH or Article NINTH or any provision of this
paragraph (C)(2)(b), and the affirmative vote of shares representing not less
than 80% of the votes entitled to be cast by the Voting Stock, acting on the
unanimous recommendation of the entire Board of Directors, shall be required to
alter, amend or adopt any provision inconsistent with or repeal Article FIRST.
"Voting Stock" shall mean the then outstanding shares of capital stock entitled
to vote generally on the election of directors and shall exclude any class or
series of capital stock only entitled to vote in the event of dividend
arrearages thereon, whether or not at the time of determination there are any
such dividend arrearages.
(c) Every reference in this Certificate of Incorporation to a
majority or other proportion of shares, or a majority or other proportion of the
votes of shares, of Voting Stock shall refer to such majority or other
proportion of the votes to which such shares of Voting Stock are entitled.
(d) At any meeting of stockholders, the presence in person or
by proxy of the holders of shares of capital stock entitled to cast a majority
of all the votes which could be cast at such meeting by the holders of all of
the outstanding shares of capital stock of the Corporation entitled to vote at
such meeting shall constitute a quorum.
(3) In the event of any dissolution, liquidation or winding up
of the affairs of the Corporation, whether voluntary or involuntary, after
payment in full of the amounts required to be paid to the holders of Preferred
Stock, the remaining assets and funds of the Corporation shall be distributed
pro rata to the holders of Common Stock. For purposes of this paragraph (C)(3),
the voluntary sale, conveyance, lease, exchange or transfer (for cash, shares of
stock, securities or other consideration) of all or substantially all of the
assets of the Corporation or a consolidation or merger of the Corporation with
one or more other corporations or other entities (whether or not the Corporation
is the corporation surviving such consolidation or merger) shall not be deemed
to be a liquidation, dissolution or winding up, voluntary or involuntary.
(4) (a) All rights to vote and all voting power (including,
without limitation thereto, the right to elect directors) shall be vested
exclusively in the holders of Common Stock, except as otherwise expressly
provided in this Certificate of Incorporation, in a
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Certificate of Designation with respect to any Preferred Stock or as otherwise
expressly required by applicable law.
(b) No stockholder shall be entitled to exercise any right of
cumulative voting.
FIFTH: A. The business and affairs of the Corporation shall be
managed by or under the direction of a Board of Directors. The total number of
directors constituting the entire Board shall be not less than six nor more than
twenty as determined from time to time by resolution adopted by affirmative vote
of a majority of the entire Board of Directors. The directors shall be divided
into three classes, designated Class I, Class II and Class III. Each class shall
consist, as nearly as may be possible, of one-third of the total number of
directors constituting the entire Board of Directors. Each director shall serve
for a term ending on the date of the third annual meeting following the annual
meeting at which such director was elected and until his successor shall be
elected and shall qualify, subject however, to prior death, resignation
or removal from office. Notwithstanding the immediately preceding sentence: the
Class I directors in office immediately following the Merger Effective Time
shall have an initial term ending on the date of the first annual meeting held
after the date on which the mergers provided for in the Agreement and Plan of
Merger dated as of November 18, 2001, by and among Phillips Petroleum Company,
the Corporation, Porsche Merger Corp., Corvette Merger Corp. and Conoco Inc.
became effective (the "Merger Effective Time"); the Class II directors in office
immediately following the Merger Effective Time shall have an initial term
ending on the date of the second annual meeting held after the Merger Effective
Time; and the Class III directors in office immediately following the Merger
Effective Time shall have an initial term ending on the date of the third annual
meeting held after the Merger Effective Time. If the number of directors is
changed, any increase or decrease shall be apportioned among the classes so as
to maintain the number of directors in each class as nearly equal as possible,
and any additional director of any class elected to fill a vacancy resulting
from an increase in such class shall hold office for a term that shall coincide
with the remaining term of that class, but in no case will a decrease in the
number of directors shorten the term of any incumbent director. A director shall
hold office until the annual meeting at which his term expires and until his
successor shall be elected and shall qualify, subject, however, to prior death,
resignation or removal from office. Unless otherwise required by law, any
vacancy on the Board of Directors may be filled only by a majority of the
directors then in office, though less than a quorum, or by a sole remaining
director, or by stockholders if such vacancy was caused by the action of
stockholders (in which event such vacancy may not be filled by the directors or
a majority thereof).
Any director elected to fill a vacancy not resulting from an
increase in the number of directors shall have the same remaining term as that
of his predecessor.
Notwithstanding the foregoing, whenever the holders of
outstanding shares of one or more series of Preferred Stock are entitled to
elect a director or directors of the Corporation separately as a series or
together with one or more other series pursuant to a resolution of the Board of
Directors providing for the establishment of such series, such director or
directors shall not be classified pursuant to or be subject to the foregoing
provisions of this Article FIFTH, and the election, term of office, removal and
filling of vacancies in respect of such director or directors shall be governed
by the resolution of the Board of Directors so providing for the establishment
of such series and by applicable law.
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B. Any director or the entire Board of Directors may only be
removed for cause, such removal to be by the affirmative vote of the shares
representing at least a majority of the votes entitled to be cast by the Voting
Stock. Unless the Board of Directors has made a determination that removal is in
the best interests of the Corporation (in which case the following definition
shall not apply), "cause" for removal of a director shall be deemed to exist
only if (i) the director whose removal is proposed has been convicted, or when a
director is granted immunity to testify when another has been convicted, of a
felony by a court of competent jurisdiction and such conviction is no longer
subject to direct appeal; (ii) such director has been found by the affirmative
vote of a majority of the Directors then in office at any regular or special
meeting of the Board of Directors called for that purpose, or by a court of
competent jurisdiction to have been guilty of willful misconduct in the
performance of his duties to the Corporation in a matter of substantial
importance to the Corporation; or (iii) such director has been adjudicated by a
court of competent jurisdiction to be mentally incompetent, which mental
incompetency directly affects his ability as a director of the Corporation.
Notwithstanding the foregoing, whenever holders of outstanding shares of one or
more series of Preferred Stock are entitled to elect directors of the
Corporation pursuant to the provisions applicable in the case of arrearages in
the payment of dividends or other defaults contained in the resolution or
resolutions of the Board of Directors providing for the establishment of any
such series, any such director of the Corporation so elected may be removed in
accordance with the provisions of such resolution or resolutions.
C. There shall be no limitation on the qualification of any
person to be a director or on the ability of any director to vote on any matter
brought before the Board or any Board committee, except (i) as required by
applicable law, (ii) as set forth in this Certificate of Incorporation or (iii)
any By-Law adopted by the Board of Directors with respect to the eligibility for
election as a director or the qualification for continuing service as a director
upon reaching a specified age or, in the case of employee directors, with
respect to the qualification for continuing service of directors upon ceasing
employment from the Corporation.
D. Except as (i) required by applicable law or (ii) set forth
in this Certificate of Incorporation, at all meetings of the Board of Directors,
a majority of the entire Board of Directors shall constitute a quorum for the
transaction of business and the act of a majority of the directors present at
any meeting at which there is a quorum shall be the act of the Board of
Directors.
E. The following provisions are inserted for further
definition, limitation and regulation of the powers of the Corporation and of
its directors and stockholders:
(1) The By-Laws of the Corporation may be adopted, altered,
amended or repealed (i) by the affirmative vote of the shares representing a
majority of the votes entitled to be cast by the Voting Stock; PROVIDED,
HOWEVER, that any proposed alteration, amendment or repeal of, or the adoption
of any By-Law inconsistent with, Section 3, 7, 10 or 11 of Article II of the
By-Laws or Section 1, 2 or 11 of Article III of the By-Laws or Section 4, 5 or
12 of Article IV of the By-Laws (in each case, as in effect on the date hereof),
or the alteration, amendment or the repeal of, or the adoption of any provision
inconsistent with this sentence, by the stockholders shall require the
affirmative vote of shares representing not less than 80% of the votes entitled
to be cast by the Voting Stock; and PROVIDED, FURTHER, HOWEVER, that in the case
of
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any such stockholder action at a special meeting of stockholders, notice of the
proposed alteration, amendment, repeal or adoption of the new By-Law or By-Laws
must be contained in the notice of such special meeting, or (ii) by action of
the Board of Directors of the Corporation except as otherwise specified in
Section 12 of Article IV of the By-Laws.
(2) In addition to the powers and authority hereinbefore or
by statute expressly conferred upon them, the directors are hereby empowered to
exercise all such powers and do all such acts and things as may be exercised or
done by the Corporation, subject, nevertheless, to the provisions of the DGCL,
this Certificate of Incorporation, and any By-Laws adopted by the stockholders;
PROVIDED, HOWEVER, that no By-Laws hereafter adopted by the stockholders shall
invalidate any prior act of the directors which would have been valid if such
By-Laws had not been adopted.
SIXTH: Meetings of stockholders may be held within or without
the State of Delaware, as the By-Laws may provide. The books of the Corporation
may be kept (subject to any provision contained in the DGCL) outside the State
of Delaware at such place or places as may be designated from time to time by
the Board of Directors or in the By-Laws of the Corporation.
SEVENTH: Any action required or permitted to be taken by the
stockholders of the Corporation may be effected only at a duly called annual or
special meeting of such holders and may not be effected by a consent in writing
by such holders in lieu of such a meeting. Except as otherwise required by law,
special meetings of stockholders of the Corporation for any purpose or purposes
may be called only by the Board of Directors pursuant to a resolution stating
the purpose or purposes thereof or by the Chairman of the Board of Directors of
the Corporation and any power of stockholders to call a special meeting is
specifically denied. No business other than that stated in the notice of such
meeting shall be transacted at any special meeting.
EIGHTH: A. Subject to Section 253 of the DGCL, in addition to
any affirmative vote that may be required by law, this Certificate of
Incorporation or the By-Laws of the Corporation, and except as otherwise
expressly provided in paragraph (B) of this Article EIGHTH:
(i) any merger or consolidation of the Corporation or any
subsidiary of the Corporation with or into (A) any Related Person or (B) any
Person that is an Affiliate of a Related Person; or
(ii) any sale, lease, exchange, transfer or other disposition
by the Corporation to any Related Person or any Affiliate of any Related Person
of all or substantially all of the assets of the Corporation; or
(iii) any reclassification of securities (including any
reverse stock split) or recapitalization of the Corporation for which the
approval of shareholders of the Corporation is otherwise required, or any
merger, consolidation or share exchange of the Corporation with any of its
subsidiaries for which the approval of shareholders of the Corporation is
otherwise required, which has the effect, either directly or indirectly, of
increasing by more than 1% the
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proportionate share of the Common Stock or Voting Stock Beneficially Owned by
any Related Person or any Affiliate of any Related Person; or
(iv) any dissolution of the Corporation voluntarily caused or
proposed by or on behalf of a Related Person or any Affiliate of any Related
Person, shall require the affirmative vote of shares representing (x) not less
than 80% of the votes entitled to be cast by the Voting Stock and (y) not less
than 66-2/3% of the votes entitled to be cast by the Voting Stock not
Beneficially Owned, directly or indirectly, by any Related Person, with respect
to such Business Combination. Such affirmative vote shall be required,
notwithstanding the fact that no vote may be required, or that a lesser
percentage may be specified, by law, elsewhere in this Certificate of
Incorporation, in the By-Laws of the Corporation or in any agreement with any
national securities exchange or otherwise.
B. The provisions of paragraph (A) shall not be applicable to
any particular Business Combination, and such Business Combination shall require
only such affirmative vote as is required by law, the By-Laws of the Corporation
and any other provision of the Certificate of Incorporation, if all of the
conditions specified in either of the following paragraphs (B)(i) and (B)(ii)
are met:
(i) the cash, property, securities or other consideration to
be received per share by each holder of any outstanding class or series of
Voting Stock in the Business Combination is, with respect to each such class or
series, either (A) the same in form and amount per share as the highest
consideration paid by the Related Person in a tender or exchange offer in which
such Related Person acquired at least 50% of the outstanding stock of such class
or series of Voting Stock and which was consummated not more than one year prior
to the date of such Business Combination, or if earlier, the entering into of a
definitive agreement providing therefor or (B) not less in amount (as to cash)
or Fair Market Value (as to consideration other than cash) as of the date of the
determination of the Highest Per Share Price (as to property, securities or
other consideration) than the Highest Per Share Price applicable to such class
or series of shares of Voting Stock; PROVIDED THAT, in the event of any Business
Combination in which the Corporation survives, any shares retained by the
holders thereof shall constitute consideration other than cash for purposes of
this paragraph (B)(i); or
(ii) a majority of the Continuing Directors shall have
expressly approved such Business Combination either in advance of or subsequent
to such Related Person's having become a Related Person.
In the case of any Business Combination with a Related Person
to which paragraph (B)(ii) above does not apply, a majority of the Continuing
Directors, promptly following the request of a Related Person, shall determine
the Highest Per Share Price for each class or series of stock of the
Corporation. Such determination shall be announced not less than five days prior
to the meeting at which holders of shares vote on the Business Combination. Such
determination shall be final, unless the Related Person becomes the Beneficial
Owner of additional shares of Common Stock after the date of the earlier
determination, in which case the Continuing Directors shall make a new
determination as to the Highest Per Share Price for each class or series of
shares prior to the consummation of the Business Combination.
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A Related Person shall be deemed to have acquired a share at the time
that such Related Person became the Beneficial Owner thereof. With respect to
shares owned by Affiliates, Associates and other Persons whose ownership is
attributable to a Related Person, if the price paid by such Related Person for
such shares is not determinable by a majority of the Continuing Directors, the
price so paid shall be deemed to be the higher of (i) the price paid upon the
acquisition thereof by the Affiliate, Associate or other Person or (ii) the
Share Price of the shares in question at the time when the Related Person became
the Beneficial Owner thereof.
C. For purposes of this Article EIGHTH and notwithstanding
anything to the contrary set forth in this Certificate of Incorporation:
(i) The term "Affiliate," used to indicate a relationship to a
specified Person, shall mean a Person that directly, or indirectly through one
or more intermediaries, controls, is controlled by, or is under common control
with, such specified Person.
(ii) The term "Associate," used to indicate a relationship
with a specified Person, shall mean (A) any corporation, partnership, limited
liability company, association, joint venture or other organization (other than
the Corporation or any wholly owned subsidiary of the Corporation) of which such
specified Person is an officer or partner or is, directly or indirectly, the
Beneficial Owner of 10% or more of any class of equity securities; (B) any trust
or other estate in which such specified Person has a beneficial interest of 10%
or more or as to which such specified Person serves as trustee or in a similar
fiduciary capacity; (C) any Person who is a director or officer of such
specified Person or any of its parents or subsidiaries (other than the
Corporation or any wholly owned subsidiary of the Corporation); and (D) any
relative or spouse of such specified Person or of any of its Associates, or any
relative of any such spouse, who has the same home as such specified Person or
such Associate.
(iii) A Person shall be a "Beneficial Owner" of any stock (A)
which such Person or any of its Affiliates or Associates beneficially owns,
directly or indirectly; or (B) which such Person or any of its Affiliates or
Associates has, directly or indirectly, (1) the right to acquire (whether such
right is exercisable immediately or only after the passage of time), pursuant to
any agreement, arrangement or understanding or upon the exercise of conversion
rights, exchange rights, warrants or options, or otherwise, or (2) the right to
vote pursuant to any agreement, arrangement or understanding; or (C) which is
beneficially owned, directly or indirectly, by any other Person, with which such
Person or any of its Affiliates or Associates has any agreement, arrangement or
understanding for the purpose of acquiring, holding, voting or disposing of such
stock; or (D) of which such Person would be the Beneficial Owner pursuant to the
terms of Rule 13d-3 of the Exchange Act, as in effect on September 30, 1998.
Stock shall be deemed "Beneficially Owned" by the Beneficial Owner or Owners
thereof.
(iv) The term "Business Combination" shall mean any
transaction which is referred to in any one or more of clauses (i) through (iv)
of paragraph (A) of this Article EIGHTH.
(v) The term "Continuing Director" shall mean, with respect to
a Business Combination with a Related Person, any director of the Corporation
who is unaffiliated with the Related Person and was a director prior to the time
that the Related Person became a Related
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Person, and any successor of a Continuing Director who is unaffiliated with the
Related Person and is recommended or nominated to succeed a Continuing Director
by a majority of the Continuing Directors. Without limiting the generality of
the foregoing, a director shall be deemed to be affiliated with a Related Person
if such director (A) is an officer, director, employee or general partner of
such Related Person; (B) is an Affiliate or Associate of such Related Person;
(C) is a relative or spouse of such Related Person or of any such officer,
director, general partner, Affiliate or Associate; (D) performs services, or is
a member, employee, greater than 5% stockholder or other equity owner of any
organization (other than the Corporation and its subsidiaries) which performs
services for such Related Person or any Affiliate of such Related Person, or is
a relative or spouse of any such Person; or (E) was nominated for election as a
director by such Related Person.
(vi) The term "Fair Market Value" shall mean, in the case of
securities, the average of the closing sales prices during the 30-day period
immediately preceding the date in question of such security on the principal
United States securities exchange registered under the Exchange Act on which
such security is listed (or the composite tape therefor) or, if such securities
are not listed on any such exchange, the average of the last reported sales
price (if so reported) or the closing bid quotations with respect to such
security during the 30-day period preceding the date in question on the New York
Stock Exchange or, if no such quotations are available, the fair market value on
the date in question of such security as determined in good faith by a majority
of the Continuing Directors; and in the case of property other than cash or
securities, the fair market value of such property on the date in question as
determined in good faith by a majority of the Continuing Directors.
(vii) The term "Highest Per Share Price" shall mean, with
respect to a Related Person, the highest price that can be determined to have
been paid or agreed to be paid for any share or shares of any class or series of
Voting Stock by such Related Person in a transaction that either (1) resulted in
such Related Person's Beneficially Owning 15% or more of such class or series of
Voting Stock outstanding or (2) was effected at a time when such Related Person
Beneficially Owned 15% or more of such class or series of Voting Stock
outstanding, in either case occurring not more than one year prior to the date
of the Business Combination. In determining the Highest Per Share Price,
appropriate adjustment will be made to take into account (w) distributions paid
or payable in stock, (x) subdivisions of outstanding stock, (y) combinations of
shares of stock into a smaller number of shares and (z) similar events.
(viii) The term "Person" shall mean any individual,
corporation, limited liability company, association, partnership, joint venture,
trust, estate or other entity or organization.
(ix) The term "Related Person" shall mean any Person
(other than the Corporation or any subsidiary of the Corporation and other than
any profit sharing, employee ownership or other employee benefit plan of the
Corporation or any subsidiary of the corporation or any trustee of or fiduciary
with respect to any such plan when acting in such capacity) who or which (A) is
the Beneficial Owner of 15% or more of any class or series of Voting Stock
outstanding; or (B) is an Affiliate of the Corporation and at any time within
the two-year period immediately prior to the date in question was the Beneficial
Owner of 15% or more of any class or series of Voting Stock outstanding. For the
purposes of determining whether a Person is a Related Person, the number of
shares of any class or series deemed to be outstanding shall
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include shares of such class or series of which the Person is deemed the
Beneficial Owner, but shall not include any other shares which may be issuable
pursuant to any agreement, arrangement or understanding, or upon exercise of
conversion rights, warrants or options, otherwise.
D. Nothing contained in this Article EIGHTH shall be construed
to relieve any Related Person from any fiduciary obligation imposed by law.
E. Notwithstanding any other provision of this Certificate of
Incorporation (and notwithstanding that a lesser percentage may be specified by
law), the affirmative vote of shares representing (x) not less than 80% of the
votes entitled to be cast by the Voting Stock voting together as a single class
and (y) not less than 66-2/3% of the votes entitled to be cast by the Voting
Stock not Beneficially Owned, directly or indirectly, by any Related Person
shall be required to amend or repeal, or adopt any provisions inconsistent with,
this Article EIGHTH.
NINTH: To the fullest extent that the DGCL or any other law of
the State of Delaware as it exists or as it may hereafter be amended permits the
limitation or elimination of the liability of directors, no director of the
Corporation shall be liable to the Corporation or its stockholders for monetary
damages for breach of fiduciary duty as a director. No amendment to or repeal of
this Article NINTH shall apply to or have any effect on the liability or alleged
liability of any director of the Corporation for or with respect to any acts or
omissions of such director occurring prior to such amendment or repeal.
CERTIFICATE OF DESIGNATIONS
of
SERIES A JUNIOR PARTICIPATING PREFERRED STOCK
of
CONOCOPHILLIPS
(Pursuant to Section 151 of the
Delaware General Corporation Law)
---------------------------
CONOCOPHILLIPS, a corporation organized and existing under the
General Corporation Law of the State of Delaware (hereinafter called the
"CORPORATION"), hereby certifies that the following resolution was adopted by
the Board of Directors of the Corporation as required by Section 151 of the
General Corporation Law acting by written consent pursuant to Section 141(f) of
the General Corporation Law on June 30, 2002:
RESOLVED, that pursuant to the authority granted to and vested in the
Board of Directors of this Corporation (hereinafter called the "BOARD OF
DIRECTORS" or the "BOARD") in accordance with the provisions of the Certificate
of Incorporation, the Board of Directors hereby creates a series of Preferred
Stock, par value $.01 per share, of the Corporation (the "Preferred Stock"), and
hereby states the designation and number of shares, and fixes the relative
rights, powers, preferences, and limitations thereof as follows:
Series A Junior Participating Preferred Stock:
SECTION 1. DESIGNATION AND AMOUNT. The shares of such series shall be
designated as "Series A Junior Participating Preferred Stock" (the "SERIES A
PREFERRED STOCK") and the number of shares constituting the Series A Preferred
Stock shall be 10,000,000. Such number of shares may be increased or decreased
by resolution of the Board of Directors; PROVIDED, that no decrease shall reduce
the number of shares of Series A Preferred Stock to a number less than the
number of shares then outstanding plus the number of shares reserved for
issuance upon the exercise of outstanding options, rights or warrants or upon
the conversion of any outstanding securities issued by the Corporation
convertible into Series A Preferred Stock.
SECTION 2. DIVIDENDS AND DISTRIBUTIONS.
(A) Subject to the rights of the holders of any shares of any series
of Preferred Stock (or any similar stock) ranking prior and superior to the
Series A Preferred Stock with respect to dividends, the holders of shares
of Series A Preferred Stock, in preference to the holders of Common Stock,
par value $.01 per share (the "COMMON STOCK"), of the Corporation, and of
any other junior stock, shall be entitled to receive, when, as and if
declared by the Board of Directors out of funds legally available for the
purpose, quar-
terly dividends payable in cash on the first day of March,
June, September and December in each year (each such date being referred to
herein as a "Quarterly Dividend Payment Date"), commencing on the first
Quarterly Dividend Payment Date after the first issuance of a share or
fraction of a share of Series A Preferred Stock, in an amount per share
(rounded to the nearest cent) equal to the greater of (a) $1 or (b) subject
to the provision for adjustment hereinafter set forth, 100 times the
aggregate per share amount of all cash dividends, and 100 times the
aggregate per share amount (payable in kind) of all non-cash dividends or
other distributions, other than a dividend payable in shares of Common
Stock or a subdivision of the outstanding shares of Common Stock (by
reclassification or otherwise), declared on the Common Stock since the
immediately preceding Quarterly Dividend Payment Date or, with respect to
the first Quarterly Dividend Payment Date, since the first issuance of any
share or fraction of a share of Series A Preferred Stock. In the event the
Corporation shall at any time declare or pay any dividend on the Common
Stock payable in shares of Common Stock, or effect a subdivision or
combination or consolidation of the outstanding shares of Common Stock (by
reclassification or otherwise than by payment of a dividend in shares of
Common Stock) into a greater or lesser number of shares of Common Stock,
then in each such case the amount to which holders of shares of Series A
Preferred Stock were entitled immediately prior to such event under clause
(b) of the preceding sentence shall be adjusted by multiplying such amount
by a fraction, the numerator of which is the number of shares of Common
Stock outstanding immediately after such event and the denominator of which
is the number of shares of Common Stock that were outstanding immediately
prior to such event.
(B) The Corporation shall declare a dividend or distribution on the
Series A Preferred Stock as provided in paragraph (A) of this Section
immediately after it declares a dividend or distribution on the Common
Stock (other than a dividend payable in shares of Common Stock); provided
that, in the event no dividend or distribution shall have been declared on
the Common Stock during the period between any Quarterly Dividend Payment
Date and the next subsequent Quarterly Dividend Payment Date, a dividend of
$1 per share on the Series A Preferred Stock shall nevertheless be payable
on such subsequent Quarterly Dividend Payment Date.
(C) Dividends shall begin to accrue and be cumulative on outstanding
shares of Series A Preferred Stock from the Quarterly Dividend Payment Date
next preceding the date of issue of such shares, unless the date of issue
of such shares is prior to the record date for the first Quarterly Dividend
Payment Date, in which case dividends on such shares shall begin to accrue
from the date of issue of such shares, or unless the date of issue is a
Quarterly Dividend Payment Date or is a date after the record date for the
determination of holders of shares of Series A Preferred Stock entitled to
receive a quarterly dividend and before such Quarterly Dividend Payment
Date, in either of which events such dividends shall begin to accrue and be
cumulative from such Quarterly Dividend Payment Date. Accrued but unpaid
dividends shall not bear interest. Dividends paid on the shares of Series A
Preferred Stock in an amount less than the total amount of such dividends
at the time accrued and payable on such shares shall be allocated pro rata
on a share-by-share basis among all such shares at the time outstanding.
The Board of Directors may fix a record date for the determination of
holders of shares of Series A Preferred
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Stock entitled to receive payment of a dividend or distribution declared
thereon, which record date shall be not more than 60 days prior to the date
fixed for the payment thereof.
SECTION 3. VOTING RIGHTS. The holders of shares of Series A Preferred
Stock shall have the following voting rights:
(A) Subject to the provision for adjustment hereinafter set forth,
each share of Series A Preferred Stock shall entitle the holder thereof to
100 votes on all matters submitted to a vote of the holders of Common Stock
of the Corporation. In the event the Corporation shall at any time declare
or pay any dividend on the Common Stock payable in shares of Common Stock,
or effect a subdivision or combination or consolidation of the outstanding
shares of Common Stock (by reclassification or otherwise than by payment of
a dividend in shares of Common Stock) into a greater or lesser number of
shares of Common Stock, then in each such case the number of votes per
share to which holders of shares of Series A Preferred Stock were entitled
immediately prior to such event shall be adjusted by multiplying such
number by a fraction, the numerator of which is the number of shares of
Common Stock outstanding immediately after such event and the denominator
of which is the number of shares of Common Stock that were outstanding
immediately prior to such event.
(B) Except as otherwise provided herein, in any other Certificate of
Designations creating a series of Preferred Stock or any similar stock, or
by law, the holders of shares of Series A Preferred Stock and the holders
of shares of Common Stock and any other capital stock of the Corporation
having general voting rights shall vote together as one class on all
matters submitted to a vote of stockholders of the Corporation.
(C) Except as set forth herein, or as otherwise provided by law,
holders of Series A Preferred Stock shall have no special voting rights and
their consent shall not be required (except to the extent they are entitled
to vote with holders of Common Stock as set forth herein) for taking any
corporate action.
SECTION 4. CERTAIN RESTRICTIONS.
(A) Whenever quarterly dividends or other dividends or distributions
payable on the Series A Preferred Stock as provided in Section 2 are in
arrears, thereafter and until all accrued and unpaid dividends and
distributions, whether or not declared, on shares of Series A Preferred
Stock outstanding shall have been paid in full, the Corporation shall not:
(i) declare or pay dividends, or make any other distributions, on
any shares of stock ranking junior (either as to dividends or upon
liquidation, dissolution or winding up) to the Series A Preferred
Stock;
(ii) declare or pay dividends, or make any other distributions,
on any shares of stock ranking on a parity (either as to dividends or
upon liquidation, dissolution or winding up) with the Series A
Preferred Stock, except dividends paid ratably on the Series A
Preferred Stock and all such parity stock on which divi-
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dends are payable or in arrears in proportion to the total amounts to
which the holders of all such shares are then entitled;
(iii) redeem or purchase or otherwise acquire for consideration
shares of any stock ranking junior (either as to dividends or upon
liquidation, dissolution or winding up) to the Series A Preferred
Stock, provided that the Corporation may at any time redeem, purchase
or otherwise acquire shares of any such junior stock in exchange for
shares of any stock of the Corporation ranking junior (either as to
dividends or upon dissolution, liquidation or winding up) to the
Series A Preferred Stock; or
(iv) redeem or purchase or otherwise acquire for consideration
any shares of Series A Preferred Stock, or any shares of stock ranking
on a parity with the Series A Preferred Stock, except in accordance
with a purchase offer made in writing or by publication (as determined
by the Board of Directors) to all holders of such shares upon such
terms as the Board of Directors, after consideration of the respective
annual dividend rates and other relative rights and preferences of the
respective series and classes, shall determine in good faith will
result in fair and equitable treatment among the respective series or
classes.
(B) The Corporation shall not permit any subsidiary of the Corporation
to purchase or otherwise acquire for consideration any shares of stock of
the Corporation unless the Corporation could, under paragraph (A) of this
Section 4, purchase or otherwise acquire such shares at such time and in
such manner.
SECTION 5. REACQUIRED SHARES. Any shares of Series A Preferred Stock
purchased or otherwise acquired by the Corporation in any manner whatsoever
shall be retired and cancelled promptly after the acquisition thereof. All such
shares shall upon their cancellation become authorized but unissued shares of
Preferred Stock and may be reissued as part of a new series of Preferred Stock
subject to the conditions and restrictions on issuance set forth herein, in the
Restated Certificate of Incorporation, or in any other Certificate of
Designations creating a series of Preferred Stock or any similar stock or as
otherwise required by law.
SECTION 6. LIQUIDATION, DISSOLUTION OR WINDING UP. Upon any
liquidation, dissolution or winding up of the Corporation, no distribution shall
be made (1) to the holders of shares of stock ranking junior (either as to
dividends or upon liquidation, dissolution or winding up) to the Series A
Preferred Stock unless, prior thereto, the holders of shares of Series A
Preferred Stock shall have received $100 per share, plus an amount equal to
accrued and unpaid dividends and distributions thereon, whether or not declared,
to the date of such payment, provided that the holders of shares of Series A
Preferred Stock shall be entitled to receive an aggregate amount per share,
subject to the provision for adjustment hereinafter set forth, equal to 100
times the aggregate amount to be distributed per share to holders of shares of
Common Stock, or (2) to the holders of shares of stock ranking on a parity
(either as to dividends or upon liquidation, dissolution or winding up) with the
Series A Preferred Stock, except distributions made ratably on the Series A
Preferred Stock and all such parity stock in proportion to the total amounts to
which the holders of all such shares are entitled upon such liquidation,
dissolution or winding up. In the event the Corporation shall at any time
declare or pay any dividend on the
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Common Stock payable in shares of Common Stock, or effect a subdivision or
combination or consolidation of the outstanding shares of Common Stock (by
reclassification or otherwise than by payment of a dividend in shares of Common
Stock) into a greater or lesser number of shares of Common Stock, then in each
such case the aggregate amount to which holders of shares of Series A Preferred
Stock were entitled immediately prior to such event under the proviso in clause
(1) of the preceding sentence shall be adjusted by multiplying such amount by a
fraction the numerator of which is the number of shares of Common Stock
outstanding immediately after such event and the denominator of which is the
number of shares of Common Stock that were outstanding immediately prior to such
event.
SECTION 7. CONSOLIDATION, MERGER, ETC. In case the Corporation shall
enter into any consolidation, merger, combination or other transaction in which
the shares of Common Stock are exchanged for or changed into other stock or
securities, cash and/or any other property, then in any such case each share of
Series A Preferred Stock shall at the same time be similarly exchanged or
changed into an amount per share, subject to the provision for adjustment
hereinafter set forth, equal to 100 times the aggregate amount of stock,
securities, cash and/or any other property (payable in kind), as the case may
be, into which or for which each share of Common Stock is changed or exchanged.
In the event the Corporation shall at any time declare or pay any dividend on
the Common Stock payable in shares of Common Stock, or effect a subdivision or
combination or consolidation of the outstanding shares of Common Stock (by
reclassification or otherwise than by payment of a dividend in shares of Common
Stock) into a greater or lesser number of shares of Common Stock, then in each
such case the amount set forth in the preceding sentence with respect to the
exchange or change of shares of Series A Preferred Stock shall be adjusted by
multiplying such amount by a fraction, the numerator of which is the number of
shares of Common Stock outstanding immediately after such event and the
denominator of which is the number of shares of Common Stock that were
outstanding immediately prior to such event.
SECTION 8. NO REDEMPTION. The shares of Series A Preferred Stock
shall not be redeemable.
SECTION 9. RANK. The Series A Preferred Stock shall rank, with respect
to the payment of dividends and the distribution of assets, junior to all series
of any other class of the Corporation's Preferred Stock.
SECTION 10. AMENDMENT. The Restated Certificate of Incorporation of
the Corporation shall not be amended in any manner which would materially alter
or change the powers, preferences or special rights of the Series A Preferred
Stock so as to affect them adversely without the affirmative vote of the holders
of at least two-thirds of the outstanding shares of Series A Preferred Stock,
voting together as a single class.
-5-
IN WITNESS WHEREOF, this Certificate of Designations is executed on
behalf of the Corporation by its President this 30th day of August, 2002.
/s/ J. BRYAN WHITWORTH
-------------------------------
Name: J. Bryan Whitworth
Title: President
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BY-LAWS
OF
CONOCOPHILLIPS
(hereinafter called the "Corporation")
ARTICLE I
OFFICES
Section 1. REGISTERED OFFICE. The registered office of the
Corporation shall be in the City of Wilmington, County of New
Castle, State of Delaware.
Section 2. OTHER OFFICES. The Corporation may also have
offices at such other places both within and without the State of
Delaware as the Board of Directors may from time to time
determine.
ARTICLE II
MEETINGS OF STOCKHOLDERS
Section 1. PLACE AND TIME OF MEETINGS. Meetings of the stockholders
for the election of directors or for any other purpose shall be held at such
time and place, either within or without the State of Delaware, as shall be
designated from time to time by the Board of Directors. Subject to applicable
law, the Board of Directors may elect to postpone any previously scheduled
meeting of stockholders.
Section 2. ANNUAL MEETINGS. The annual meetings of stockholders for
the election of directors shall be held on such date and at such time as shall
be designated from time to time by the Board of Directors. Any other proper
business may be transacted at the annual meeting of stockholders.
Section 3. SPECIAL MEETINGS. Unless otherwise required by law or by
the certificate of incorporation of the Corporation, as amended and restated
from time to time (including any certificates of designation with respect to any
Preferred Stock, the "Certificate of Incorporation"), special meetings of
stockholders, for any purpose or purposes, may only be called by the Board of
Directors pursuant to a resolution stating the purpose or purposes thereof or by
the Chairman, if there be one, and any power of stockholders to call a special
meeting is specifically denied. Written notice of a special meeting stating the
place, date and hour of the meeting and the purpose or purposes for which the
meeting is called shall be given not less than ten (10) nor more than sixty (60)
days before the date of the meeting to each stockholder entitled to vote at such
meeting. Only such business shall be conducted at a special meeting as shall be
specified in the notice of meeting (or any supplement thereto).
Section 4. ADJOURNMENTS. Any meeting of the stockholders may be
adjourned by the chairman of the meeting or by the stockholders or their proxies
in attendance, from time to time, to reconvene at the same or some other place,
and notice need not be given of any such adjourned meeting if the time and place
thereof are announced at the meeting at which the adjournment is taken. At the
adjourned meeting, the Corporation may transact any business which might have
been transacted at the original meeting. If the adjournment is for more than
thirty (30) days, or if after the adjournment a new record date is fixed for the
adjourned meeting, notice of the adjourned meeting shall be given to each
stockholder of record entitled to vote at the meeting.
Section 5. QUORUM. Unless otherwise required by law or the
Certificate of Incorporation, the presence in person or by proxy of the holders
of shares of capital stock entitled to cast a majority of the votes which could
be cast at such meeting by the holders of all the outstanding shares of capital
stock entitled to vote at such meeting shall constitute a quorum at all meetings
of the stockholders for the transaction of business. A quorum, once established,
shall not be broken by the withdrawal of enough votes to leave less than a
quorum. If, however, such quorum shall not be present or represented at any
meeting of the stockholders, the stockholders entitled to vote thereat, present
in person or represented by proxy, shall have power to adjourn the meeting from
time to time, in the manner provided in Section 4, until a quorum shall be
present or represented.
Section 6. VOTING. Unless otherwise provided by law, the Certificate
of Incorporation or these By-Laws or any rule or regulation of any stock
exchange or regulatory body applicable to the Corporation, any question brought
before any meeting of stockholders, other than the election of directors, shall
be decided by the affirmative vote of the holders of a majority of the votes of
shares of capital stock present in person or represented by proxy at the meeting
and entitled to vote on the question, voting as a single class. Every reference
in these By-Laws to a majority or other proportion of shares, or a majority or
other proportion of the votes of shares, of capital stock shall refer to such
majority or other proportion of the votes to which such shares of capital stock
are entitled as provided in the Certificate of Incorporation. Votes of
stockholders entitled to vote at a meeting of stockholders may be cast in person
or by proxy but no proxy shall be voted on or after three years from its date,
unless such proxy provides for a longer period. The Board of Directors, in its
discretion, or the officer of the Corporation presiding at a meeting of
stockholders, in such officer's discretion, may require that any votes cast at
such meeting shall be cast by written ballot.
Section 7. NO ACTION BY CONSENT OF STOCKHOLDERS IN LIEU OF MEETING.
Any action required or permitted to be taken by the stockholders of the
Corporation may be effected only at a duly called annual or special meeting of
such holders and may not be effected by a consent in writing by such holders in
lieu of such a meeting.
Section 8. LIST OF STOCKHOLDERS ENTITLED TO VOTE. The officer of the
Corporation who has charge of the stock ledger of the Corporation shall prepare
and make, at least ten (10) days before every meeting of stockholders, a
complete list of the stockholders entitled to vote at the meeting, arranged in
alphabetical order, and showing the address of each stockholder and the number
of shares registered in the name of each stockholder. Such list shall be open to
the examination of any stockholder for any purpose germane to the meeting for a
-2-
period of at least ten (10) days prior to the meeting, as required by applicable
law. Subject to applicable law, the list shall also be produced and kept at the
time and place of the meeting during the whole time thereof, and may be
inspected by any stockholder of the Corporation who is present.
Section 9. STOCK LEDGER. The stock ledger of the Corporation shall be
the only evidence as to who are the stockholders entitled to examine the stock
ledger, the list required by Section 8 of this Article II or the books of the
Corporation, or to vote in person or by proxy at any meeting of stockholders.
Section 10. NOMINATION OF DIRECTORS. Only persons who are nominated
in accordance with the following procedures shall be eligible for election as
directors of the Corporation, except as may be otherwise provided in the
Certificate of Incorporation of the Corporation with respect to the right of
holders of Preferred Stock of the Corporation to nominate and elect a specified
number of directors in certain circumstances. Nominations of persons for
election to the Board of Directors may be made at any annual meeting of
stockholders (a) by or at the direction of the Board of Directors (or any duly
authorized committee thereof) or (b) by any stockholder of the Corporation (i)
who is a stockholder of record on the date of the giving of the notice provided
for in this Section 10 and on the record date for the determination of
stockholders entitled to vote at such annual meeting and (ii) who complies with
the notice procedures set forth in this Section 10.
In addition to any other applicable requirements, for a nomination to
be made by a stockholder, such stockholder must have given timely notice thereof
in proper written form to the Secretary of the Corporation.
To be timely, a stockholder's notice to the Secretary must be
delivered to or mailed and received at the principal executive offices of the
Corporation not less than ninety (90) days nor more than one hundred and twenty
(120) days prior to the anniversary date of the immediately preceding annual
meeting of stockholders; PROVIDED, HOWEVER, that in the event that the annual
meeting is called for a date that is not within thirty (30) days before or after
such anniversary date, notice by the stockholder in order to be timely must be
so received not later than the later of (i) ninety (90) days prior to the
anniversary date of the immediately preceding annual meeting of stockholders and
(ii) the close of business on the tenth (10th) day following the day on which
such notice of the date of the annual meeting was mailed or such public
disclosure of the date of the annual meeting was made, whichever first occurs.
To be in proper written form, a stockholder's notice to the Secretary
must set forth (a) as to each person whom the stockholder proposes to nominate
for election as a director (i) the name, age, business address and residence
address of the person, (ii) the principal occupation or employment of the
person, (iii) the class or series and number of shares of capital stock of the
Corporation which are owned beneficially or of record by the person that would
be required to be disclosed in a proxy statement or other filings required to be
made in connection with solicitations of proxies for election of directors
pursuant to Section 14 of the Securities Exchange Act of 1934, as amended (the
"Exchange Act"), and the rules and regulations promulgated thereunder; and (b)
as to the stockholder giving the notice (i) the name and record address of such
stockholder, (ii) the class or series and number of shares of capital stock of
the
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Corporation which are owned beneficially or of record by such stockholder,
(iii) a description of all arrangements or understandings between such
stockholder and each proposed nominee and any other person or persons (including
their names) pursuant to which the nomination (s) are to be made by such
stockholder, (iv) a representation that such stockholder intends to appear in
person or by proxy at the annual meeting to nominate the persons named in its
notice and (v) any other information relating to such stockholder that would be
required to be disclosed in a proxy statement or other filings required to be
made in connection with solicitations of proxies for election of directors
pursuant to Section 14 of the Exchange Act and the rules and regulations
promulgated thereunder. Such notice must be accompanied by a written consent of
each proposed nominee to being named as a nominee and to serve as a director if
elected.
No person shall be eligible for election as a director of the
Corporation unless nominated in accordance with the procedures set forth in this
Section 10. If the chairman of the annual meeting determines that a nomination
was not made in accordance with the foregoing procedures, the chairman shall
declare to the meeting that the nomination was defective and such defective
nomination shall be disregarded.
Section 11. BUSINESS AT ANNUAL MEETINGS. No business may be
transacted at an annual meeting of stockholders, other than business that is
either (a) specified in the notice of meeting (or any supplement thereto) given
by or at the direction of the Board of Directors (or any duly authorized
committee thereof), (b) otherwise properly brought before the annual meeting by
or at the direction of the Board of Directors (or any duly authorized committee
thereof) or (c) otherwise properly brought before the annual meeting by any
stockholder of the Corporation (i) who is a stockholder of record on the date of
the giving of the notice provided for in this Section 11 and on the record date
for the determination of stockholders entitled to vote at such annual meeting
and (ii) who complies with the notice procedures set forth in this Section 11.
In addition to any other applicable requirements, for business to be
properly brought before an annual meeting by a stockholder, such stockholder
must have given timely notice thereof in proper written form to the Secretary of
the Corporation.
To be timely, a stockholder's notice to the Secretary must be
delivered to or mailed and received at the principal executive offices of the
Corporation not less than ninety (90) days nor more than one hundred and twenty
(120) days prior to the anniversary date of the immediately preceding annual
meeting of stockholders; PROVIDED, HOWEVER, that in the event that the annual
meeting is called for a date that is not within thirty (30) days before or after
such anniversary date, notice by the stockholder in order to be timely must be
so received not later than the later of (i) ninety (90) days prior to the
anniversary date of the immediately preceding annual meeting of stockholders and
(ii) the close of business on the tenth (10th) day following the day on which
such notice of the date of the annual meeting was mailed or such public
disclosure of the date of the annual meeting was made, whichever first occurs.
To be in proper written form, a stockholder's notice to the Secretary
must set forth as to each matter such stockholder proposes to bring before the
annual meeting (i) a brief description of the business desired to be brought
before the annual meeting and the reasons for conducting such business at the
annual meeting, (ii) the name and record address of such
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stockholder, (iii) the class or series and number of shares of capital stock of
the Corporation which are owned beneficially or of record by such stockholder,
(iv) a description of all arrangements or understandings between such
stockholder and any other person or persons (including their names) in
connection with the proposal of such business by such stockholder and any
material interest of such stockholder in such business and (v) a representation
that such stockholder intends to appear in person or by proxy at the annual
meeting to bring such business before the meeting.
No business shall be conducted at the annual meeting of stockholders
except business brought before the annual meeting in accordance with the
procedures set forth in this Section 11; PROVIDED, HOWEVER, that, once business
has been properly brought before the annual meeting in accordance with such
procedures, nothing in this Section 11 shall be deemed to preclude discussion by
any stockholder of any such business. If the chairman of an annual meeting
determines that business was not properly brought before the annual meeting in
accordance with the foregoing procedures, the chairman shall declare to the
meeting that the business was not properly brought before the meeting and such
business shall not be transacted.
Section 12. CONDUCT OF MEETINGS. The Board of Directors of the
Corporation may adopt by resolution such rules and regulations for the conduct
of the meetings of the stockholders as it shall deem appropriate. Except to the
extent inconsistent with such rules and regulations as adopted by the Board of
Directors, the chairman of any meeting of the stockholders shall have the right
and authority to prescribe such rules, regulations and procedures and to do all
such acts as, in the judgment of such chairman, are appropriate for the proper
conduct of the meeting. Such rules, regulations or procedures, whether adopted
by the Board of Directors or prescribed by the chairman of the meeting, may
include, without limitation, the following: (i) the establishment of an agenda
or order of business for the meeting; (ii) the determination of when the polls
shall open and close for any given matter to be voted on at the meeting; (iii)
rules and procedures for maintaining order at the meeting and the safety of
those present; (iv) limitations on attendance at or participation in the meeting
to stockholders of record of the corporation, their duly authorized and
constituted proxies or such other persons as the chairman of the meeting shall
determine; (v) restrictions on entry to the meeting after the time fixed for the
commencement thereof; (vi) limitations on the time allotted to questions or
comments by participants; and (vii) policies and procedures with respect to the
adjournment of such meeting.
ARTICLE III
DIRECTORS
Section 1. NUMBER, CLASSIFICATION AND QUALIFICATION OF DIRECTORS.
(a) The Board of Directors shall consist initially of 16 members with the exact
number of directors to be determined from time to time by the Board of
Directors. The directors shall be divided into three (3) classes, designated
Class I, Class II and Class III, as provided in the Certificate of
Incorporation. Any director may resign at any time upon written notice to the
Corporation. Directors need not be stockholders. Subject to applicable law, any
person shall be eligible for election as a director; PROVIDED that (i) in the
case of a director who is also an employee of the Corporation, subject to
Section 12 of Article IV and the employment agreements referred to
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therein, any person (A) who shall have attained the age of 65 shall be
ineligible for election or appointment as a director and (B) who ceases to be an
employee of the Corporation shall be disqualified from continued service as a
director and such person's term of office as a director shall automatically
terminate and (ii) in the case of any director, (A) any person who shall have
attained the age of 70 shall be ineligible for election or appointment as a
director and (B) any person who shall have attained the age of 70 shall be
disqualified from continued service as a director and such person's term of
office as a director shall automatically terminate as of the date such director
attains the age of 70; provided that this clause (ii)(B) shall not apply during
a director's initial term of office if such director was elected to the Board of
Directors effective as of the effective time of the merger of P Merger Corp.
with and into Phillips Petroleum Company and the merger of C Merger Corp. with
and into Conoco Inc.
(b) There shall be no limitation on the qualification of any person
to be a director or on the ability of any director to vote on any matter brought
before the Board or any Board committee, except (i) as required by applicable
law, (ii) as set forth in the Certificate of Incorporation or (iii) as set forth
in the foregoing Section 1(a) of this Article III or (iv) in any By-Law adopted
by the Board of Directors with respect to the eligibility for election as a
director upon reaching a specified age or, in the case of employee directors,
with respect to the qualification for continuing service of directors upon
cessation of employment with the Corporation.
Section 2. VACANCIES. Unless otherwise required by law or the
Certificate of Incorporation, vacancies arising through death, resignation,
removal, an increase in the number of directors or otherwise may be filled by a
majority of the directors then in office, though less than a quorum, or by a
sole remaining director, or by the stockholders if such vacancy resulted from
the action of stockholders (in which event such vacancy may not be filled by the
directors or a majority thereof), and the directors so chosen shall hold office
until the next election for such class and until their successors are duly
elected and qualified, or until their earlier death, resignation or removal.
Section 3. DUTIES AND POWERS. The business and affairs of the
Corporation shall be managed by or under the direction of the Board of Directors
which may exercise all such powers of the Corporation and do all such lawful
acts and things as are not by statute or by the Certificate of Incorporation or
by these By-Laws required to be exercised or done by the stockholders.
Section 4. MEETINGS. The Board of Directors may hold meetings, both
regular and special, either within or without the State of Delaware. Regular
meetings of the Board of Directors may be held without notice at such time and
at such place as may from time to time be determined by the Board of Directors.
Special meetings of the Board of Directors may be called by the Chairman, if
there be one, the President, or by any director. Notice thereof stating the
place, date and hour of the meeting shall be given to each director either by
mail not less than forty-eight (48) hours before the time of the meeting, by
telephone, telegram, facsimile transmission or other electronic transmission not
less than twenty-four (24) hours before the time of the meeting, or on such
shorter notice as the person or persons calling such meeting may deem necessary
or appropriate in the circumstances.
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Section 5. QUORUM. Except as otherwise required by law or the
Certificate of Incorporation, at all meetings of the Board of Directors, a
majority of the entire Board of Directors shall constitute a quorum for the
transaction of business and the act of a majority of the directors present at
any meeting at which there is a quorum shall be the act of the Board of
Directors. If a quorum shall not be present at any meeting of the Board of
Directors, the directors present thereat may adjourn the meeting from time to
time, without notice other than announcement at the meeting of the time and
place of the adjourned meeting, until a quorum shall be present.
Section 6. ACTIONS BY WRITTEN CONSENT OF THE BOARD. Unless otherwise
provided in the Certificate of Incorporation or these By-Laws, any action
required or permitted to be taken at any meeting of the Board of Directors or of
any committee thereof may be taken without a meeting, if all the members of the
Board of Directors or committee, as the case may be, consent thereto in writing
or by electronic transmission, and the writing or writings or electronic
transmission or transmissions as are filed with the minutes of proceedings of
the Board of Directors or committee.
Section 7. MEETINGS BY MEANS OF CONFERENCE TELEPHONE. Unless
otherwise provided in the Certificate of Incorporation, members of the Board of
Directors of the Corporation, or any committee thereof, may participate in a
meeting of the Board of Directors or such committee by means of a conference
telephone or other communications equipment by means of which all persons
participating in the meeting can hear each other, and participation in a meeting
pursuant to this Section 7 shall constitute presence in person at such meeting.
Section 8. STANDING COMMITTEES. (a) The Board of Directors, by
resolution adopted by a majority of the entire Board, shall appoint from among
its members (i) an Executive Committee, (ii) an Audit and Compliance Committee,
(iii) a Compensation Committee, (iv) a Committee on Directors' Affairs and (v) a
Public Policy Committee (together, the "Standing Committees") each consisting of
three (3) (or such greater number as the Board of Directors may designate)
directors, to perform the functions traditionally performed by such Board
committees.
(b) The Executive Committee shall have and may exercise all
the powers and authority of the Board of Directors in the management of the
business and affairs of the Corporation and may authorize the seal of the
Corporation to be affixed to all papers which may require it, in each case, to
the fullest extent permitted by applicable law.
(c) The Committee on Directors' Affairs shall meet at the
discretion of the Committee Chairman and have the following powers and duties:
(i) evaluating and recommending director candidates to the Board of Directors,
(ii) recommending committee assignments to the Board of Directors, (iii)
assessing the performance of the Board of Directors, (iv) recommending director
compensation and benefits policy for the Corporation, and (v) periodically
reviewing the Corporation's corporate governance profile. Only persons
recommended by the Committee on Directors' Affairs shall be eligible for
nomination by the Board of Directors for election as directors or to fill a
vacancy, but if the Board of Directors does not approve of one or more of the
persons recommended by the Committee on Directors' Affairs,
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the Committee shall submit a recommendation of other persons by the date
specified by the Board of Directors.
Section 9. COMMITTEES. The Board of Directors may designate one or
more other committees (in addition to the Standing Committees), each such other
committee to consist of one or more of the directors of the Corporation. With
respect to all Board committees, the Board of Directors may designate one or
more directors as alternate members of any committee, who may replace any absent
or disqualified member at any meeting of any such committee. With respect to all
Board committees, in the absence or disqualification of a member of a committee,
and in the absence of a designation by the Board of Directors of an alternate
member to replace the absent or disqualified member, the member or members
thereof present at any meeting and not disqualified from voting, whether or not
such member or members constitute a quorum, may unanimously appoint another
member of the Board of Directors to act at the meeting in the place of any
absent or disqualified member. Any Board committee, to the extent permitted by
law and provided in the resolution establishing such committee, shall have and
may exercise all the powers and authority of the Board of Directors in the
management of the business and affairs of the Corporation, and may authorize the
seal of the Corporation to be affixed to all papers which may require it. Each
Board committee shall keep regular minutes and report to the Board of Directors
when required.
Section 10. COMPENSATION. The directors may be paid their expenses,
if any, of attendance at each meeting of the Board of Directors and shall
receive such compensation for their services as directors as shall be determined
by the Board of Directors. No such payment shall preclude any director from
serving the Corporation in any other capacity and receiving compensation
therefor. Members of Board committees may be allowed like compensation for
attending committee meetings.
Section 11. REMOVAL. A director may only be removed for cause, such
removal to be by the affirmative vote of the shares representing a majority of
the votes entitled to be cast by the Voting Stock. For purposes of these
By-Laws, Voting Stock shall mean the then outstanding shares of capital stock
entitled to vote generally in the election of directors and shall exclude any
class or series of capital stock only entitled to vote in the event of dividend
arrearages thereon, whether or not at the time of determination there are any
dividend arrearages. Unless the Board of Directors has made a determination that
removal is in the best interests of the Corporation (in which case the following
definition shall not apply), "cause" for removal of a director shall be deemed
to exist only if (i) the director whose removal is proposed has been convicted,
or when a director is granted immunity to testify when another has been
convicted, of a felony by a court of competent jurisdiction and such conviction
is no longer subject to direct appeal; (ii) such director has been found by the
affirmative vote of a majority of the directors then in office at any regular or
special meeting of the Board of Directors called for that purpose, or by a court
of competent jurisdiction to have been guilty of willful misconduct in the
performance of his duties to the Corporation in a matter of substantial
importance to the Corporation; or (iii) such director has been adjudicated by a
court of competent jurisdiction to be mentally incompetent, which mental
incompetency directly affects his ability as a director of the Corporation.
Notwithstanding the foregoing, whenever holders of outstanding shares of one or
more series of Preferred Stock are entitled to elect directors of the
Corporation pursuant to the provisions applicable in the case of arrearages in
the payment of dividends or other defaults
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contained in the resolution or resolutions of the Board of Directors providing
for the establishment of any such series, any such director of the Corporation
so elected may be removed in accordance with the provisions of such resolution
or resolutions.
ARTICLE IV
OFFICERS
Section 1. GENERAL. The officers of the Corporation shall be chosen
by the Board of Directors and shall be a Chief Executive Officer; President, a
Secretary and a Treasurer. The Board of Directors, in its discretion, also may
choose a Chairman of the Board (who must be a director) and one or more Vice
Presidents, Assistant Secretaries, Assistant Treasurers and other officers;
PROVIDED that for so long as the Employment Agreements are in effect, the Board
of Directors, subject to their fiduciary duties, shall elect the Chairman of the
Board as specified therein. Any number of offices may be held by the same
person, unless otherwise prohibited by law or the Certificate of Incorporation.
The officers of the Corporation need not be stockholders of the Corporation nor,
except in the case of the Chairman of the Board, need such officers be directors
of the Corporation.
Section 2. ELECTION. The Board of Directors, at its first meeting held
after each annual meeting of stockholders, shall elect the officers of the
Corporation who shall hold their offices for such terms and shall exercise such
powers and perform such duties as shall be determined from time to time by the
Board of Directors; and all officers of the Corporation shall hold office until
their successors are chosen and qualified, or until their earlier death,
resignation or removal. Subject to Section 12 of this Article IV, any officer
elected by the Board of Directors may be removed at any time by the affirmative
vote of the Board of Directors. Any vacancy occurring in any office of the
Corporation shall be filled by the Board of Directors.
Section 3. VOTING SECURITIES OWNED BY THE CORPORATION. Powers of
attorney, proxies, waivers of notice of meeting, consents and other instruments
relating to securities owned by the Corporation may be executed in the name of
and on behalf of the Corporation by the President or any Vice President or any
other officer authorized to do so by the Board of Directors and any such officer
may, in the name of and on behalf of the Corporation, take all such action as
any such officer may deem advisable to vote in person or by proxy at any meeting
of security holders of any corporation in which the Corporation may own
securities and at any such meeting shall possess and may exercise any and all
rights and power incident to the ownership of such securities and which, as the
owner thereof, the Corporation might have exercised and possessed if present.
The Board of Directors may, by resolution, from time to time confer like powers
upon any other person or persons.
Section 4. CHAIRMAN OF THE BOARD OF DIRECTORS. The Chairman of the
Board of Directors shall preside at meetings of the Board and of the
Corporation's stockholders. The Chairman shall work with the Chief Executive
Officer on external stakeholder relations (community, state, federal and foreign
governments), business development (growth) initiatives, and the creation of an
outstanding and cohesive Board of Directors; and shall have such other executive
responsibilities as the Chairman and the Chief Executive Officer may agree. The
Chairman and the Chief Executive Officer shall jointly recommend to the Board of
Directors the
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long-range strategic plan for the Corporation, major acquisitions and
divestitures, and major changes to the Corporation's capital structure. With
respect to all other matters, the Chief Executive Officer shall, in consultation
with the Chairman, arrange the agenda for meetings of the Board, and shall
report to the Board and arrange for other executives and advisors to report to
the Board.
Section 5. CHIEF EXECUTIVE OFFICER; PRESIDENT. The Chief Executive
Officer shall have general responsibility for the management of the Corporation
as provided in these By-laws, reporting directly to the Board of Directors. The
Chief Executive Officer shall have all the customary duties and responsibilities
of such office, and all of the Corporation's executive officers shall report
directly to him or indirectly to him through another such executive officer who
reports to him. The Chief Executive Officer shall also be the President. While
Archie Dunham is serving as Chairman of the Board, the Chief Executive Officer
shall work with the Chairman on external stakeholder relations (community,
state, federal and foreign governments), business development (growth)
initiatives, and the creation of an outstanding and cohesive Board of Directors.
Furthermore, while Archie Dunham is Chairman of the Board, the Chief Executive
Officer and the Chairman shall jointly recommend to the Board of Directors the
long-range strategic plan for the Corporation, major acquisitions and
divestitures, and major changes to the Corporation's capital structure. With
respect to all other matters, the Chief Executive Officer shall, in consultation
with the Chairman, arrange the agenda for meetings of the Board, and shall
report to the Board and arrange for other executives and advisors to report to
the Board.
Section 6. VICE PRESIDENTS. At the request of the Chief Executive
Officer or in the Chief Executive Officer's absence or in the event of the Chief
Executive Officer's inability or refusal to act (and if there be no Chairman of
the Board), the Vice President, or the Vice Presidents if there is more than
one, to the extent expressly authorized at such time by the Board of Directors,
shall perform the duties of the Chief Executive Officer, and when so acting,
shall have all the powers of and be subject to all the restrictions upon the
Chief Executive Officer. Each Vice President shall perform such other duties and
have such other powers as the Board of Directors from time to time may
prescribe. If there be no Chairman of the Board and no Vice President, the Board
of Directors shall designate the officer of the Corporation who, in the absence
of the Chief Executive Officer or in the event of the inability or refusal of
the Chief Executive Officer to act, shall perform the duties of the Chief
Executive Officer, and when so acting, shall have all the powers of and be
subject to all the restrictions upon the Chief Executive Officer.
Section 7. SECRETARY. The Secretary shall attend all meetings of the
Board of Directors and all meetings of stockholders and record all the
proceedings thereat in a book or books to be kept for that purpose; the
Secretary shall also perform like duties for committees of the Board of
Directors when required. The Secretary shall give, or cause to be given, notice
of all meetings of the stockholders and special meetings of the Board of
Directors, and shall perform such other duties as may be prescribed by the Board
of Directors, the Chairman of the Board or the Chief Executive Officer, under
whose supervision the Secretary shall be. If the Secretary shall be unable or
shall refuse to cause to be given notice of all meetings of the stockholders and
special meetings of the Board of Directors, and if there be no Assistant
Secretary, then either the Board of Directors or the President may choose
another officer to cause such notice to be given. The Secretary shall have
custody of the seal of the Corporation and the Secretary or any Assistant
Secretary, if there be one, shall have authority to affix the same to any
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instrument requiring it and when so affixed, it may be attested by the signature
of the Secretary or by the signature of any such Assistant Secretary. The Board
of Directors may give general authority to any other officer to affix the seal
of the Corporation and to attest to the affixing by such officer's signature.
The Secretary shall see that all books, reports, statements, certificates and
other documents and records required by law to be kept or filed are properly
kept or filed, as the case may be.
Section 8. TREASURER. The Treasurer shall have the custody of the
corporate funds and securities and shall keep full and accurate accounts of
receipts and disbursements in books belonging to the Corporation and shall
deposit all moneys and other valuable effects in the name and to the credit of
the Corporation in such depositories as may be designated by the Board of
Directors. The Treasurer shall disburse the funds of the Corporation as may be
ordered by the Board of Directors, taking proper vouchers for such
disbursements, and shall render to the President and the Board of Directors, at
its regular meetings, or when the Board of Directors so requires, an account of
all transactions as Treasurer and of the financial condition of the Corporation.
If required by the Board of Directors, the Treasurer shall give the Corporation
a bond in such sum and with such surety or sureties as shall be satisfactory to
the Board of Directors for the faithful performance of the duties of the office
of the Treasurer and for the restoration to the Corporation, in case of the
Treasurer's death, resignation, retirement or removal from office, of all books,
papers, vouchers, money and other property of whatever kind in the Treasurer's
possession or under the Treasurer's control belonging to the Corporation.
Section 9. ASSISTANT SECRETARIES. Assistant Secretaries, if there be
any, shall perform such duties and have such powers as from time to time may be
assigned to them by the Board of Directors, the President, any Vice President,
if there be one, or the Secretary, and in the absence of the Secretary or in the
event of the Secretary's disability or refusal to act, shall perform the duties
of the Secretary, and when so acting, shall have all the powers of and be
subject to all the restrictions upon the Secretary.
Section 10. ASSISTANT TREASURERS. Assistant Treasurers, if there be
any, shall perform such duties and have such powers as from time to time may be
assigned to them by the Board of Directors, the President, any Vice President,
if there be one, or the Treasurer, and in the absence of the Treasurer or in the
event of the Treasurer's disability or refusal to act, shall perform the duties
of the Treasurer, and when so acting, shall have all the powers of and be
subject to all the restrictions upon the Treasurer. If required by the Board of
Directors, an Assistant Treasurer shall give the Corporation a bond in such sum
and with such surety or sureties as shall be satisfactory to the Board of
Directors for the faithful performance of the duties of the office of Assistant
Treasurer and for the restoration to the Corporation, in case of the Assistant
Treasurer's death, resignation, retirement or removal from office, of all books,
papers, vouchers, money and other property of whatever kind in the Assistant
Treasurer's possession or under the Assistant Treasurer's control belonging to
the Corporation.
Section 11. OTHER OFFICERS. Such other officers as the Board of
Directors may choose shall perform such duties and have such powers as from time
to time may be assigned to them by the Board of Directors. The Board of
Directors may delegate to any other officer of the Corporation the power to
choose such other officers and to prescribe their respective duties and powers.
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Section 12. SUCCESSION ARRANGEMENTS.
(a) Notwithstanding any other provision of these By-Laws, the
election of individuals to the positions of Chairman of the Board and Chief
Executive Officer shall be as specifically provided for in the Employment
Agreements between the Corporation and Archie Dunham and James J. Mulva, dated
as of November 18, 2001 (the "Employment Agreements"), and (1) the election of
any other individual to such positions, or (2) the removal or replacement of
Archie Dunham or James J. Mulva from one or more of those positions, shall
require a two-thirds vote of the entire Board of Directors.
(b) Any amendment to, modification or termination by the
Company of, either of the Employment Agreements by the Corporation and any
amendment, alteration or repeal of, or the adoption of any provision
inconsistent with, Section 4, 5 or 12 of this Article IV by the Board of
Directors, shall require a two-thirds vote of the entire Board of Directors.
(c) This Section 12 will terminate at the earlier of (1) the
first date on which neither Archie Dunham nor James J. Mulva remains employed
under the relevant Employment Agreement and (2) the later of (A) the second
anniversary of the closing date of the merger contemplated by the Agreement and
Plan of Merger dated as of November 18, 2001, by and among Phillips Petroleum
Company, CorvettePorsche Corp., Porsche Merger Corp., Corvette Merger Corp. and
Conoco Inc. and (B) October 1, 2004.
ARTICLE V
STOCK
Section 1. UNCERTIFICATED AND CERTIFICATED SHARES; FORM OF
CERTIFICATES. Effective at such time as the President or any Vice President or
the Treasurer of the Corporation, if so authorized by resolution of the Board of
Directors, designates in writing to the Corporate Secretary and any transfer
agents of the Corporation with respect to any class of stock of the Corporation,
the shares of such class shall be uncertificated shares, PROVIDED that the
foregoing shall not apply to shares represented by a certificate until such
certificate is surrendered to the Corporation, and PROVIDED FURTHER that upon
request every holder of uncertificated shares shall be entitled, to the extent
provided in Section 158 of the Delaware General Corporation Law, to have a
certificate signed, in the name of the Corporation by the Chairman of the Board
of Directors, President or a Vice President and by the Treasurer or an Assistant
Treasurer, or the Secretary or an Assistant Secretary of the Corporation,
certifying the number of shares owned by such stockholder in the Corporation.
Section 2. SIGNATURES. Any or all of the signatures on a certificate
may be a facsimile. In case any officer, transfer agent or registrar who has
signed or whose facsimile signature has been placed upon a certificate shall
have ceased to be such officer, transfer agent or registrar before such
certificate is issued, it may be issued by the Corporation with the same effect
as if such person were such officer, transfer agent or registrar at the date of
issue.
Section 3. LOST CERTIFICATES. The Board of Directors may direct a new
certificate to be issued in place of any certificate theretofore issued by the
Corporation alleged to
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have been lost, stolen or destroyed, upon the making of an affidavit of that
fact by the person claiming the certificate of stock to be lost, stolen or
destroyed. When authorizing such issue of a new certificate, the Board of
Directors may, in its discretion and as a condition precedent to the issuance
thereof, require the owner of such lost, stolen or destroyed certificate, or the
owner's legal representative, to advertise the same in such manner as the Board
of Directors shall require and/or to give the Corporation a bond in such sum as
it may direct as indemnity against any claim that may be made against the
Corporation with respect to the certificate alleged to have been lost, stolen or
destroyed or the issuance of such new certificate.
Section 4. TRANSFERS. Stock of the Corporation shall be transferable
in the manner prescribed by law and in these By-Laws. Transfers of stock shall
be made on the books of the Corporation only by the person named as the holder
thereof on the stock records of the Corporation by such person's attorney
lawfully constituted in writing, and in the case of shares represented by a
certificate upon the surrender of the certificate therefor, which shall be
canceled before a new certificate shall be issued. No transfer of stock shall be
valid as against the Corporation for any purpose until it shall have been
entered in the stock records of the Corporation by an entry showing from and to
whom transferred. To the extent designated by the President or any Vice
President or the Treasurer of the Corporation, the Corporation may recognize the
transfer of fractional uncertificated shares, but shall not otherwise be
required to recognize the transfer of fractional shares.
Section 5. RECORD DATE.
(a) In order that the Corporation may determine the
stockholders entitled to notice of or to vote at any meeting of stockholders or
any adjournment thereof, the Board of Directors may fix a record date, which
record date shall not precede the date upon which the resolution fixing the
record date is adopted by the Board of Directors, and which record date shall
not be more than sixty (60) nor less than ten (10) days before the date of such
meeting. If no record date is fixed by the Board of Directors, the record date
for determining stockholders entitled to notice of or to vote at a meeting of
stockholders shall be at the close of business on the day next preceding the day
on which notice is given, or, if notice is waived, at the close of business on
the day next preceding the day on which the meeting is held. A determination of
stockholders of record entitled to notice of or to vote at a meeting of
stockholders shall apply to any adjournment of the meeting; PROVIDED, HOWEVER,
that the Board of Directors may fix a new record date for the adjourned meeting.
(b) In order that the Corporation may determine the
stockholders entitled to receive payment of any dividend or other distribution
or allotment of any rights or the stockholders entitled to exercise any rights
in respect of any change, conversion or exchange of stock, or for the purpose of
any other lawful action, the Board of Directors may fix a record date, which
record date shall not precede the date upon which the resolution fixing the
record date is adopted, and which record date shall be not more than sixty (60)
days prior to such action. If no record date is fixed, the record date for
determining stockholders for any such purpose shall be at the close of business
on the day on which the Board of Directors adopts the resolution relating
thereto.
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Section 6. RECORD OWNERS. The Corporation shall be entitled to
recognize the exclusive right of a person registered on its books as the owner
of shares to receive dividends, and to vote as such owner, and to hold liable
for calls and assessments a person registered on its books as the owner of
shares, and shall not be bound to recognize any equitable or other claim to or
interest in such share or shares on the part of any other person, whether or not
it shall have express or other notice thereof, except as otherwise required by
law.
ARTICLE VI
NOTICES
Section 1. NOTICES. Whenever written notice is required by law, the
Certificate of Incorporation or these By-Laws, to be given to any director,
member of a committee or stockholder, such notice may be given by mail,
addressed to such director, member of a committee or stockholder, at such
person's address as it appears on the records of the Corporation, with postage
thereon prepaid, and such notice shall be deemed to be given at the time when
the same shall be deposited in the United States mail. Notice may also be given
personally, or by telegram, telex, cable or electronic transmission to the
extent permitted by applicable law.
Section 2. WAIVERS OF NOTICE. Whenever any notice is required by law,
the Certificate of Incorporation or these By-Laws, to be given to any director,
member of a committee or stockholder, a waiver thereof in writing, signed by the
person or persons entitled to said notice or by electronic transmission, whether
before or after the time stated therein, shall be deemed equivalent thereto.
Attendance of a person at a meeting, present in person or represented by proxy,
shall constitute a waiver of notice of such meeting, except where the person
attends the meeting for the express purpose of objecting at the beginning of the
meeting to the transaction of any business because the meeting is not lawfully
called or convened.
ARTICLE VII
GENERAL PROVISIONS
Section 1. DIVIDENDS. Dividends upon the capital stock of the
Corporation, subject to the requirements of the Delaware General Corporation Law
and the provisions of the Certificate of Incorporation, if any, may be declared
by the Board of Directors at any regular or special meeting of the Board of
Directors (or any action by written consent in lieu thereof in accordance with
Section 6 of Article III hereof), and may be paid in cash, in property, or in
shares of the Corporation's capital stock. Before payment of any dividend, there
may be set aside out of any funds of the Corporation available for dividends
such sum or sums as the Board of Directors from time to time, in its absolute
discretion, deems proper as a reserve or reserves to meet contingencies, or for
equalizing dividends, or for repairing or maintaining any property of the
Corporation, or for any proper purpose, and the Board of Directors may modify or
abolish any such reserve.
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Section 2. DISBURSEMENTS. All checks or demands for money and notes
of the Corporation shall be signed by such officer or officers or such other
person or persons as the Board of Directors may from time to time designate.
Section 3. FISCAL YEAR. The fiscal year of the Corporation shall be
fixed by resolution of the Board of Directors.
Section 4. CORPORATE SEAL. The corporate seal shall have inscribed
thereon the name of the Corporation, the year of its organization and the words
"Corporate Seal, Delaware". The seal may be used by causing it or a facsimile
thereof to be impressed or affixed or reproduced or otherwise.
ARTICLE VIII
INDEMNIFICATION
Section 1. POWER TO INDEMNIFY IN ACTIONS, SUITS OR PROCEEDINGS OTHER
THAN THOSE BY OR IN THE RIGHT OF THE Corporation. Subject to Section 3 of this
Article VIII, the Corporation shall indemnify any person who was or is a party
or is threatened to be made a party to any threatened, pending or completed
action, suit or proceeding, whether civil, criminal, administrative or
investigative (other than an action by or in the right of the Corporation) by
reason of the fact that such person is or was a director or officer of the
Corporation, or is or was a director or officer of the Corporation serving at
the request of the Corporation as a director or officer, employee or agent of
another corporation, partnership, joint venture, trust, employee benefit plan or
other enterprise, against expenses (including attorneys' fees), judgments, fines
and amounts paid in settlement actually and reasonably incurred by such person
in connection with such action, suit or proceeding if such person acted in good
faith and in a manner such person reasonably believed to be in or not opposed to
the best interests of the Corporation, and, with respect to any criminal action
or proceeding, had no reasonable cause to believe such person's conduct was
unlawful. The termination of any action, suit or proceeding by judgment, order,
settlement, conviction, or upon a plea of nolo contendere or its equivalent,
shall not, of itself, create a presumption that the person did not act in good
faith and in a manner which such person reasonably believed to be in or not
opposed to the best interests of the Corporation, and, with respect to any
criminal action or proceeding, had reasonable cause to believe that such
person's conduct was unlawful.
Section 2. POWER TO INDEMNIFY IN ACTIONS, SUITS OR PROCEEDINGS BY OR
IN THE RIGHT OF THE CORPORATION. Subject to Section 3 of this Article VIII, the
Corporation shall indemnify any person who was or is a party or is threatened to
be made a party to any threatened, pending or completed action or suit by or in
the right of the Corporation to procure a judgment in its favor by reason of the
fact that such person is or was a director or officer of the Corporation, or is
or was a director or officer of the Corporation serving at the request of the
Corporation as a director, officer, employee or agent of another corporation,
partnership, joint venture, trust, employee benefit plan or other enterprise
against expenses (including attorneys' fees) actually and reasonably incurred by
such person in connection with the defense or settlement of such action or suit
if such person acted in good faith and in a manner such person reasonably
believed to be in or not opposed to the best interests of the Corporation;
except that no indemnification
-15-
shall be made in respect of any claim, issue or matter as to which such person
shall have been adjudged to be liable to the Corporation unless and only to the
extent that the Court of Chancery or the court in which such action or suit was
brought shall determine upon application that, despite the adjudication of
liability but in view of all the circumstances of the case, such person is
fairly and reasonably entitled to indemnity for such expenses which the Court of
Chancery or such other court shall deem proper.
Section 3. AUTHORIZATION OF INDEMNIFICATION. Any indemnification
under this Article VIII (unless ordered by a court) shall be made by the
Corporation only as authorized in the specific case upon a determination that
indemnification of the director or officer is proper in the circumstances
because such person has met the applicable standard of conduct set forth in
Section 1 or Section 2 of this Article VIII, as the case may be. Such
determination shall be made, with respect to a person who is a director or
officer at the time of such determination, (i) by a majority vote of the
directors who are not parties to such action, suit or proceeding, even though
less than a quorum, or (ii) by a committee of such directors designated by a
majority vote of such directors, even though less than a quorum, or (iii) if
there are no such directors, or if such directors so direct, by independent
legal counsel in a written opinion or (iv) by the stockholders. Such
determination shall be made, with respect to former directors and officers, by
any person or persons having the authority to act on the matter on behalf of the
Corporation. To the extent, however, that a present or former director or
officer of the Corporation has been successful on the merits or otherwise in
defense of any action, suit or proceeding described above, or in defense of any
claim, issue or matter therein, such person shall be indemnified against
expenses (including attorneys' fees) actually and reasonably incurred by such
person in connection therewith, without the necessity of authorization in the
specific case.
Section 4. GOOD FAITH DEFINED. For purposes of any determination
under Section 3 of this Article VIII, a person shall be deemed to have acted in
good faith and in a manner such person reasonably believed to be in or not
opposed to the best interests of the Corporation, or, with respect to any
criminal action or proceeding, to have had no reasonable cause to believe such
person's conduct was unlawful, if such person's action is based on good faith
reliance on the records or books of account of the Corporation or another
enterprise, or on information supplied to such person by the officers of the
Corporation or another enterprise in the course of their duties, or on the
advice of legal counsel for the Corporation or another enterprise or on
information or records given or reports made to the Corporation or another
enterprise by an independent certified public accountant or by an appraiser or
other expert selected with reasonable care by the Corporation or another
enterprise. The term "another enterprise" as used in this Section 4 shall mean
any other corporation or any partnership, joint venture, trust, employee benefit
plan or other enterprise of which such person is or was serving at the request
of the Corporation as a director, officer, employee or agent. The provisions of
this Section 4 shall not be deemed to be exclusive or to limit in any way the
circumstances in which a person may be deemed to have met the applicable
standard of conduct set forth in Section 1 or 2 of this Article VIII, as the
case may be.
Section 5. INDEMNIFICATION BY A COURT. Notwithstanding any contrary
determination in the specific case under Section 3 of this Article VIII, and
notwithstanding the absence of any determination thereunder, any director or
officer may apply to the Court of Chancery in the State of Delaware for
indemnification to the extent otherwise permissible under
-16-
Sections 1 and 2 of this Article VIII. The basis of such indemnification by a
court shall be a determination by such court that indemnification of the
director or officer is proper in the circumstances because such person has met
the applicable standards of conduct set forth in Section 1 or 2 of this Article
VIII, as the case may be. Neither a contrary determination in the specific case
under Section 3 of this Article VIII nor the absence of any determination
thereunder shall be a defense to such application or create a presumption that
the director or officer seeking indemnification has not met any applicable
standard of conduct. Notice of any application for indemnification pursuant to
this Section 5 shall be given to the Corporation promptly upon the filing of
such application. If successful, in whole or in part, the director or officer
seeking indemnification shall also be entitled to be paid the expense of
prosecuting such application.
Section 6. EXPENSES PAYABLE IN ADVANCE. Expenses incurred by a
director or officer in defending any civil, criminal, administrative or
investigative action, suit or proceeding shall be paid by the Corporation in
advance of the final disposition of such action, suit or proceeding upon receipt
of an undertaking by or on behalf of such director or officer to repay such
amount if it shall ultimately be determined that such person is not entitled to
be indemnified by the Corporation as authorized in this Article VIII.
Section 7. NONEXCLUSIVITY OF INDEMNIFICATION AND ADVANCEMENT OF
EXPENSES. The indemnification and advancement of expenses provided by or granted
pursuant to this Article VIII shall not be deemed exclusive of any other rights
to which those seeking indemnification or advancement of expenses may be
entitled under the Certificate of Incorporation, any By-Law, agreement, vote of
stockholders or disinterested directors or otherwise, both as to action in such
person's official capacity and as to action in another capacity while holding
such office, it being the policy of the Corporation that indemnification of the
persons specified in Sections 1 and 2 of this Article VIII shall be made to the
fullest extent permitted by law. The provisions of this Article VIII shall not
be deemed to preclude the indemnification of any person who is not specified in
Section 1 or 2 of this Article VIII but whom the Corporation has the power or
obligation to indemnify under the provisions of the Delaware General Corporation
Law, or otherwise.
Section 8. INSURANCE. The Corporation may purchase and maintain
insurance on behalf of any person who is or was a director or officer of the
Corporation, or is or was a director or officer of the Corporation serving at
the request of the Corporation as a director, officer, employee or agent of
another corporation, partnership, joint venture, trust, employee benefit plan or
other enterprise against any liability asserted against such person and incurred
by such person in any such capacity, or arising out of such person's status as
such, whether or not the Corporation would have the power or the obligation to
indemnify such person against such liability under the provisions of this
Article VIII.
Section 9. CERTAIN DEFINITIONS. For purposes of this Article VIII,
references to "the Corporation" shall include, in addition to the resulting
corporation, any constituent corporation (including any constituent of a
constituent) absorbed in a consolidation or merger which, if its separate
existence had continued, would have had power and authority to indemnify its
directors or officers, so that any person who is or was a director or officer of
such constituent corporation, or is or was a director or officer of such
constituent corporation serving at the request of such constituent corporation
as a director, officer, employee or agent of another
-17-
corporation, partnership, joint venture, trust, employee benefit plan or other
enterprise, shall stand in the same position under the provisions of this
Article VIII with respect to the resulting or surviving corporation as such
person would have with respect to such constituent corporation if its separate
existence had continued. For purposes of this Article VIII, references to
"fines" shall include any excise taxes assessed on a person with respect to an
employee benefit plan; and references to "serving at the request of the
Corporation" shall include any service as a director, officer, employee or agent
of the Corporation which imposes duties on, or involves services by, such
director or officer with respect to an employee benefit plan, its participants
or beneficiaries; and a person who acted in good faith and in a manner such
person reasonably believed to be in the interest of the participants and
beneficiaries of an employee benefit plan shall be deemed to have acted in a
manner "not opposed to the best interests of the Corporation" as referred to in
this Article VIII.
Section 10. SURVIVAL OF INDEMNIFICATION AND ADVANCEMENT OF EXPENSES.
The indemnification and advancement of expenses provided by, or granted pursuant
to, this Article VIII shall, unless otherwise provided when authorized or
ratified, continue as to a person who has ceased to be a director or officer and
shall inure to the benefit of the heirs, executors and administrators of such a
person.
Section 11. LIMITATION ON INDEMNIFICATION. Notwithstanding anything
contained in this Article VIII to the contrary, except for proceedings to
enforce rights to indemnification (which shall be governed by Section 5 of this
Article VIII), the Corporation shall not be obligated to indemnify any director
or officer in connection with a proceeding (or part thereof) initiated by such
person unless such proceeding (or part thereof) was authorized or consented to
by the Board of Directors of the Corporation.
Section 12. INDEMNIFICATION OF EMPLOYEES AND AGENTS. The Corporation
may, to the extent authorized from time to time by the Board of Directors,
provide rights to indemnification and to the advancement of expenses to
employees and agents of the Corporation similar to those conferred in this
Article VIII to directors and officers of the Corporation.
ARTICLE IX
AMENDMENTS
Section 1. AMENDMENTS. These By-Laws may be altered, amended or
repealed, in whole or in part, and new By-Laws may be adopted (i) by the
affirmative vote of the shares representing a majority of the votes entitled to
be cast by the Voting Stock; PROVIDED, HOWEVER, that any proposed alteration,
amendment or repeal of, or the adoption of any By-Law inconsistent with, Section
3, 7, 10 or 11 of Article II of these By-Laws or Section 1, 2 or 11 of Article
III of these By-Laws or Section 4, 5 or 12 of Article IV of these By-Laws or
this sentence, by the stockholders shall require the affirmative vote of shares
representing not less than 80% of the votes entitled to be cast by the Voting
Stock; and PROVIDED FURTHER, HOWEVER, that in the case of any such stockholder
action at a meeting of stockholders, notice of the proposed alteration,
amendment, repeal or adoption of the new By-Law or By-Laws must be contained in
the notice of such meeting, or (ii) by action of the Board of Directors of the
Corporation. The provisions of this Section 1 are subject to any contrary
provisions and any provisions requiring a
-18-
greater vote that are set forth in the Certificate of Incorporation and in
Section 12 of Article IV of these By-Laws.
Section 2. ENTIRE BOARD OF DIRECTORS. As used in these By-Laws
generally, the term "entire Board of Directors" means the total number of
directors which the Corporation would have if there were no vacancies.
-19-
---------------------------------------------
CONOCOPHILLIPS
And
MELLON INVESTOR SERVICES LLC
as Rights Agent
Rights Agreement
Dated as of June 30, 2002
---------------------------------------------
TABLE OF CONTENTS
Page
NUMBER
Section 1. Definitions....................................... 1
Section 2. Appointment of Rights Agent....................... 7
Section 3. Issue of Right Certificates....................... 7
Section 4. Form of Right Certificates........................ 10
Section 5. Countersignature and Registration................. 10
Section 6. Transfer, Split Up, Combination and Exchange
of Right Certificates; Mutilated, Destroyed,
Lost or Stolen Right Certificates................. 11
Section 7. Exercise of Rights; Purchase Price;
Expiration Date of Rights......................... 13
Section 8. Cancellation and Destruction of Right
Certificates...................................... 14
Section 9. Availability of Preferred Shares.................. 15
Section 10. Preferred Shares Record Date...................... 16
Section 11. Adjustment of Purchase Price, Number of
Shares or Number of Rights........................ 16
Section 12. Certificate of Adjusted Purchase Price
or Number of Shares .............................. 27
Section 13. Consolidation, Merger or Sale or Transfer
of Assets or Earning Power........................ 28
Section 14. Fractional Rights and Fractional Shares........... 29
Section 15. Rights of Action.................................. 31
Section 16. Agreement of Right Holders........................ 32
Section 17. Right Certificate Holder Not Deemed a
Stockholder....................................... 33
Section 18. Concerning the Rights Agent....................... 33
Section 19. Merger or Consolidation or Change of
Name of Rights Agent.............................. 34
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Page
NUMBER
Section 20. Duties of Rights Agent............................ 35
Section 21. Change of Rights Agent............................ 38
Section 22. Issuance of New Right Certificates................ 40
Section 23. Redemption........................................ 40
Section 24 Exchange.......................................... 41
Section 25 Notice of Certain Events.......................... 44
Section 26 Notices........................................... 45
Section 27 Supplements and Amendments........................ 46
Section 28 Successors........................................ 47
Section 29 Benefits of this Agreement........................ 47
Section 30 Severability...................................... 48
Section 31 Governing Law..................................... 48
Section 32 Counterparts...................................... 48
Section 33 Descriptive Headings.............................. 48
Signatures....................................................... 46
Exhibit A - Form of Certificate of Designations
Exhibit B - Form of Right Certificate
Exhibit C - Summary of Rights to Purchase Preferred Shares
-ii-
Agreement, dated as of June 30, 2002, between CONOCOPHILLIPS, a
Delaware corporation (the "COMPANY"), and MELLON INVESTOR SERVICES LLC, a New
Jersey limited liability company, as rights agent (the "RIGHTS AGENT").
The Board of Directors of the Company has authorized and declared a
dividend of one preferred share purchase right (a "RIGHT") for each Common Share
(as hereinafter defined) of the Company outstanding on June 30, 2002 (the
"RECORD DATE"), each Right representing the right to purchase one one-hundredth
of a Preferred Share (as hereinafter defined), upon the terms and subject to the
conditions herein set forth, and has further authorized and directed the
issuance of one Right with respect to each Common Share that shall become
outstanding between the Record Date and the earliest of the Distribution Date,
the Redemption Date and the Final Expiration Date (as such terms are hereinafter
defined).
Accordingly, in consideration of the premises and the mutual
agreements herein set forth, the parties hereby agree as follows:
Section 1. DEFINITIONS. For purposes of this Agreement,
the following terms have the meanings indicated:
(a) "ACQUIRING PERSON" shall mean any Person who or which, together
with all Affiliates and Associates of such Person, shall be the Beneficial Owner
of 15% or more of the Common Shares of the Company then outstanding, but shall
not include Conoco (as defined below), Phillips (as defined below), the Company,
any Subsidiary of the Company, any employee benefit plan of the Company or any
Subsidiary of the Company, or any entity holding Common Shares for or pursuant
to the terms of any such plan. Notwithstanding the foregoing, no Person shall
become an "Acquiring Person" as the result of an acquisition of Common Shares by
the
Company which, by reducing the number of Common Shares of the Company
outstanding, increases the proportionate number of Common Shares of the Company
beneficially owned by such Person to 15% or more of the Common Shares of the
Company then outstanding; PROVIDED, HOWEVER, that, if a Person shall become the
Beneficial Owner of 15% or more of the Common Shares of the Company then
outstanding by reason of share purchases by the Company and shall, after such
share purchases by the Company, become the Beneficial Owner of any additional
Common Shares of the Company, then such Person shall be deemed to be an
"Acquiring Person," unless such Person is not then the Beneficial Owner of 15%
or more of the Common Shares of the Company then outstanding. Notwithstanding
the foregoing, if the Board of Directors of the Company determines in good faith
that a Person who would otherwise be an "Acquiring Person," as defined pursuant
to the foregoing provisions of this paragraph (a), became or has become such
inadvertently, and such Person divested or divests as promptly as practicable a
sufficient number of Common Shares so that such Person would no longer be an
"Acquiring Person," as defined pursuant to the foregoing provisions of this
paragraph (a), then such Person shall not be deemed to be an "Acquiring Person"
for any purposes of this Agreement.
(b) "AFFILIATE" shall have the meaning ascribed to such term in Rule
12b-2 of the General Rules and Regulations under the Exchange Act as in effect
on the date of this Agreement.
(c) "ASSOCIATE" shall have the meaning ascribed to such term in Rule
12b-2 of the General Rules and Regulations under the Exchange Act as in effect
on the date of this Agreement.
-2-
(d) A Person shall be deemed the "Beneficial Owner" of and shall be
deemed to "beneficially own" any securities:
(i) which such Person or any of such Person's Affiliates or
Associates beneficially owns, directly or indirectly;
(ii) which such Person or any of such Person's Affiliates or
Associates has (A) the right to acquire (whether such right is exercisable
immediately or only after the passage of time) pursuant to any agreement,
arrangement or understanding (other than customary agreements with and
between underwriters and selling group members with respect to a BONA FIDE
public offering of securities), or upon the exercise of conversion rights,
exchange rights, rights (other than these Rights), warrants or options, or
otherwise; PROVIDED, HOWEVER, that a Person shall not be deemed the
Beneficial Owner of, or to beneficially own, securities tendered pursuant
to a tender or exchange offer made by or on behalf of such Person or any
of such Person's Affiliates or Associates until such tendered securities
are accepted for purchase or exchange; or (B) the right to vote pursuant
to any agreement, arrangement or understanding; PROVIDED, HOWEVER, that a
Person shall not be deemed the Beneficial Owner of, or to beneficially
own, any security if the agreement, arrangement or understanding to vote
such security (1) arises solely from a revocable proxy or consent given to
such Person in response to a public proxy or consent solicitation made
pursuant to, and in accordance with, the applicable rules and regulations
promulgated under the Exchange Act and (2) is not also then reportable on
Schedule 13D under the Exchange Act (or any comparable or successor
report); or
-3-
(iii) which are beneficially owned, directly or indirectly, by any
other Person and with respect to which such Person or any of such Person's
Affiliates or Associates has any agreement, arrangement or understanding
(other than customary agreements with and between underwriters and selling
group members with respect to a bona fide public offering of securities)
for the purpose of acquiring, holding, voting (except to the extent
contemplated by the proviso to Section 1(d)(ii)(B) hereof) or disposing of
such securities of the Company.
Notwithstanding anything in this definition of Beneficial Ownership
to the contrary, the phrase "then outstanding," when used with reference to a
Person's Beneficial Ownership of securities of the Company, shall mean the
number of such securities then issued and outstanding together with the number
of such securities not then actually issued and outstanding which such Person
would be deemed to own beneficially hereunder.
(e) "BUSINESS DAY" shall mean any day other than a Saturday, a Sunday,
or a day on which banking institutions in the State of New York are authorized
or obligated by law or executive order to close.
(f) "CLOSE OF BUSINESS" on any given date shall mean 5:00 P.M., New
York City time, on such date; PROVIDED, HOWEVER, that, if such date is not a
Business Day, it shall mean 5:00 P.M., New York City time, on the next
succeeding Business Day.
(g) "COMMON SHARES" when used with reference to the Company shall mean
the shares of common stock, par value $.01 per share, of the Company. "Common
Shares" when used with reference to any Person other than the Company shall mean
the capital stock (or equity interest) with the greatest voting power of such
other Person or, if such other Person is a Subsidi-
-4-
ary of another Person, the Person or Persons which ultimately control such
first-mentioned Person.
(h) "CONOCO" shall mean Conoco Inc., a Delaware corporation.
(i) "DISTRIBUTION DATE" shall have the meaning set forth in
Section 3(a) hereof.
(j) "EXCHANGE ACT" shall mean the Securities Exchange Act of
1934, as amended.
(k) "EXCHANGE RATIO" shall have the meaning set forth in Section
24(a) hereof.
(l) "FINAL EXPIRATION DATE" shall have the meaning set forth in
Section 7(a) hereof.
(m) "MERGER EFFECTIVE TIME" shall mean the date and time at which
the mergers provided for in the Agreement and Plan of Merger dated as of
November 18, 2001, by and among the Company, Phillips, Conoco, Porsche Merger
Corp (now known as P Merger Corp.) and Corvette Merger Corp. (now known as C
Merger Corp.) become effective.
(n) "NASDAQ" shall mean the Nasdaq Stock Market.
(o) "PERSON" shall mean any individual, firm, corporation or other
entity, and shall include any successor (by merger or otherwise) of such entity.
(p) "PHILLIPS" shall mean Phillips Petroleum Company, a Delaware
corporation.
-5-
(q) "PREFERRED SHARES" shall mean shares of Series A Junior
Participating Preferred Stock, par value $.01 per share, of the Company having
the rights and preferences set forth in the Form of Certificate of Designations
attached to this Agreement as Exhibit A.
(r) "PURCHASE PRICE" shall have the meaning set forth in Section
4 hereof.
(s) "RECORD DATE" shall have the meaning set forth in the second
paragraph hereof.
(t) "REDEMPTION DATE" shall have the meaning set forth in
Section 7(a) hereof.
(u) "REDEMPTION PRICE" shall have the meaning set forth in
Section 23(a) hereof.
(v) "RIGHT" shall have the meaning set forth in the second
paragraph hereof.
(w) "RIGHT CERTIFICATE" shall have the meaning set forth in
Section 3(a) hereof.
(x) "SHARES ACQUISITION DATE" shall mean the first date of public
announcement by the Company or an Acquiring Person that an Acquiring Person has
become such.
(y) "SUBSIDIARY" of any Person shall mean any corporation or other
entity of which a majority of the voting power of the voting equity securities
or equity interest is owned, directly or indirectly, by such Person.
(z) "SUMMARY OF RIGHTS" shall have the meaning set forth in
Section 3(b) hereof.
(aa) "TRADING DAY" shall have the meaning set forth in Section 11(d)
hereof.
-6-
Section 2. APPOINTMENT OF RIGHTS AGENT. The Company hereby appoints
the Rights Agent to act as agent for the Company in accordance with the terms
and conditions hereof, and the Rights Agent hereby accepts such appointment. The
Company may from time to time appoint such co-Rights Agents as it may deem
necessary or desirable. The Rights Agent shall have no duty to supervise, and in
no event shall be liable for, the acts or omissions of any such co-Rights Agent.
Section 3. ISSUE OF RIGHT CERTIFICATES. (a) Until the earlier of (i)
the Shares Acquisition Date or (ii) such date as may be determined by action of
the Board of Directors of the Company (prior to such time as any Person becomes
an Acquiring Person) after the date of the commencement by any Person (other
than the Company, any Subsidiary of the Company, any employee benefit plan of
the Company or of any Subsidiary of the Company or any entity holding Common
Shares of the Company for or pursuant to the terms of any such plan) of a tender
or exchange offer the consummation of which would result in any Person becoming
the Beneficial Owner of Common Shares of the Company aggregating 15% or more of
the then outstanding Common Shares of the Company (including any such date which
is after the date of this Agreement and prior to the issuance of the Rights; the
earlier of such dates being herein referred to as the "DISTRIBUTION DATE"), (x)
the Rights will be evidenced (subject to the provisions of Section 3(b) hereof)
by the certificates for Common Shares of the Company registered in the names of
the holders thereof (which certificates shall also be deemed to be Right
Certificates) and not by separate Right Certificates, and (y) the right to
receive Right Certificates will be transferable only in connection with the
transfer of Common Shares of the Company. As soon as practicable after the
Distribution Date, the Company will prepare and execute, the Rights Agent will
countersign, and the Company will send or cause to be sent (and the Rights Agent
will, if requested
-7-
and provided with all necessary information, send) by first-class, insured,
postage-prepaid mail, to each record holder of Common Shares of the Company as
of the Close of Business on the Distribution Date, at the address of such holder
shown on the records of the Company, a Right Certificate, in substantially the
form of Exhibit B hereto (a "RIGHT CERTIFICATE"), evidencing one Right for each
Common Share so held. As of the Distribution Date, the Rights will be evidenced
solely by such Right Certificates.
(b) On the Record Date, or as soon as practicable thereafter, the
Company will send a copy of a Summary of Rights to Purchase Preferred Shares, in
substantially the form of Exhibit C hereto (the "SUMMARY OF RIGHTS"), by
first-class, postage-prepaid mail, to each record holder of Common Shares as of
the Close of Business on the Record Date, at the address of such holder shown on
the records of the Company. As soon as practicable after the Merger Effective
Time, the Company will send a copy of the Summary of Rights, by first-class,
postage-prepaid mail, to each holder of Phillips Common Shares immediately prior
to the Merger Effective Time, at the address of such holder shown on the records
of Phillips. With respect to certificates for Common Shares of the Company
outstanding as of the Record Date, and certificates for Common Shares which
immediately prior to the Merger Effective Time represented shares of Phillips
Common Stock, until the Distribution Date, the Rights associated with the Common
Shares represented by such certificates will be evidenced by such certificates
registered in the names of the holders thereof together with a copy of the
Summary of Rights attached thereto. Until the Distribution Date (or the earlier
of the Redemption Date or the Final Expiration Date), the surrender for transfer
of any certificate for Common Shares of the Company outstanding on the Record
Date, and certificates for Common Shares which immediately prior to the Merger
Effective Time represented shares of Phillips Common Stock, with or without a
copy of the Summary of Rights
-8-
attached thereto, shall also constitute the transfer of the Rights associated
with the Common Shares of the Company represented thereby. The reference in the
preceding two sentences to certificates for Common Shares which immediately
prior to the Merger Effective Time represented shares of Phillips Common Stock
shall be deemed to include any uncertificated Phillips Common Shares as
evidenced by the relevant book-entry accounts and the stock distribution
statements.
(c) Certificates (other than certificates which immediately prior to
the Merger Effective Time represented shares of Phillips Common Shares) for
Common Shares which become outstanding (including, without limitation,
reacquired Common Shares referred to in the last sentence of this paragraph (c))
after the Record Date but prior to the earliest of the Distribution Date, the
Redemption Date or the Final Expiration Date shall have impressed on, printed
on, written on or otherwise affixed to them the following legend:
This certificate also evidences and entitles the holder hereof to certain
rights as set forth in an Agreement between CONOCOPHILLIPS and MELLON
INVESTOR SERVICES LLC, as Rights Agent, dated as of June 30, 2002, as it
may be amended from time to time (the "Agreement"), the terms of which are
hereby incorporated herein by reference and a copy of which is on file at
the principal executive offices of CONOCOPHILLIPS. Under certain
circumstances, as set forth in the Agreement, such Rights (as defined in
the Agreement) will be evidenced by separate certificates and will no
longer be evidenced by this certificate. CONOCOPHILLIPS will mail to the
holder of this certificate a copy of the Agreement without charge after
receipt of a written request therefor. As set forth in the Agreement,
Rights beneficially owned by any Person (as defined in the Agreement) who
becomes an Acquiring Person (as defined in the Agreement) become void.
With respect to such certificates containing the foregoing legend, until the
Distribution Date, the Rights associated with the Common Shares of the Company
represented by such certificates shall be evidenced by such certificates alone,
and the surrender for transfer of any such certificate shall also constitute the
transfer of the Rights associated with the Common Shares of the Company
represented thereby. In the event that the Company purchases or acquires any
Com-
-9-
mon Shares of the Company after the Record Date but prior to the Distribution
Date, any Rights associated with such Common Shares of the Company shall be
deemed cancelled and retired so that the Company shall not be entitled to
exercise any Rights associated with the Common Shares of the Company which are
no longer outstanding.
Section 4. FORM OF RIGHT CERTIFICATES. The Right Certificates (and the
forms of election to purchase Preferred Shares and of assignment to be printed
on the reverse thereof) shall be substantially the same as Exhibit B hereto, and
may have such marks of identification or designation and such legends, summaries
or endorsements printed thereon as the Company may deem appropriate, which do
not affect the duties or responsibilities of the Rights Agent and as are not
inconsistent with the provisions of this Agreement, or as may be required to
comply with any applicable law or with any applicable rule or regulation made
pursuant thereto or with any applicable rule or regulation of any stock exchange
or the National Association of Securities Dealers, Inc., or to conform to usage.
Subject to the provisions of Section 22 hereof, the Right Certificates shall
entitle the holders thereof to purchase such number of one one-hundredths of a
Preferred Share as shall be set forth therein at the price per one one-hundredth
of a Preferred Share set forth therein (the "PURCHASE PRICE"), but the number of
such one one-hundredths of a Preferred Share and the Purchase Price shall be
subject to adjustment as provided herein.
Section 5. COUNTERSIGNATURE AND REGISTRATION. The Right Certificates
shall be executed on behalf of the Company by its Chairman of the Board, its
Chief Executive Officer, its President, any of its Vice Presidents or its
Treasurer, either manually or by facsimile signature, shall have affixed thereto
the Company's seal or a facsimile thereof, and shall be attested by the
Secretary or an Assistant Secretary of the Company, either manually or by
facsimile signature. The Right Certificates shall be manually countersigned by
the Rights Agent and shall not be
-10-
valid for any purpose unless countersigned. In case any officer of the Company
who shall have signed any of the Right Certificates shall cease to be such
officer of the Company before countersignature by the Rights Agent and issuance
and delivery by the Company, such Right Certificates, nevertheless, may be
countersigned by the Rights Agent and issued and delivered by the Company with
the same force and effect as though the individual who signed such Right
Certificates had not ceased to be such officer of the Company; and any Right
Certificate may be signed on behalf of the Company by any individual who, at the
actual date of the execution of such Right Certificate, shall be a proper
officer of the Company to sign such Right Certificate, although at the date of
the execution of this Agreement any such individual was not such an officer.
Following the Distribution Date and receipt by the Rights Agent of
all necessary information, the Rights Agent will keep or cause to be kept, at
its office designated for such purpose pursuant to Section 26 hereof ("Principal
Office"), books for registration and transfer of the Right Certificates issued
hereunder. Such books shall show the names and addresses of the respective
holders of the Right Certificates, the number of Rights evidenced on its face by
each of the Right Certificates and the date of each of the Right Certificates.
Section 6. TRANSFER, SPLIT UP, COMBINATION AND EXCHANGE OF RIGHT
CERTIFICATES; MUTILATED, DESTROYED, LOST OR STOLEN RIGHT CERTIFICATES. Subject
to the provisions of Section 14 hereof, at any time after the Close of Business
on the Distribution Date, and at or prior to the Close of Business on the
earlier of the Redemption Date or the Final Expiration Date, any Right
Certificate or Right Certificates (other than Right Certificates representing
Rights that have become void pursuant to Section 11(a)(ii) hereof or that have
been exchanged pursuant to Section 24 hereof) may be transferred, split up,
combined or exchanged for another Right Certificate
-11-
or Right Certificates entitling the registered holder to purchase a like number
of one one-hundredths of a Preferred Share as the Right Certificate or Right
Certificates surrendered then entitled such holder to purchase. Any registered
holder desiring to transfer, split up, combine or exchange any Right Certificate
or Right Certificates shall make such request in writing delivered to the Rights
Agent, and shall surrender the Right Certificate or Right Certificates to be
transferred, split up, combined or exchanged at the principal office of the
Rights Agent. Thereupon the Rights Agent shall countersign and deliver to the
Person entitled thereto a Right Certificate or Right Certificates, as the case
may be, as so requested. The Company may require payment of a sum sufficient to
cover any tax or governmental charge that may be imposed in connection with any
transfer, split up, combination or exchange of Right Certificates. The Rights
Agent shall have no duty or obligation under this Section unless and until it is
satisfied that all such taxes and/or charges have been paid.
Upon receipt by the Company and the Rights Agent of evidence
reasonably satisfactory to them of the loss, theft, destruction or mutilation of
a Right Certificate, and, in case of loss, theft or destruction, of indemnity or
security reasonably satisfactory to them, and, at the Company's request,
reimbursement to the Company and the Rights Agent of all reasonable expenses
incidental thereto, and upon surrender to the Rights Agent and cancellation of
the Right Certificate if mutilated, the Company will make and deliver a new
Right Certificate of like tenor to the Rights Agent for delivery to the
registered holder in lieu of the Right Certificate so lost, stolen, destroyed or
mutilated.
Section 7. EXERCISE OF RIGHTS; PURCHASE PRICE; EXPIRATION DATE OF
RIGHTS. (a) The registered holder of any Right Certificate may exercise the
Rights evidenced thereby (except as otherwise provided herein), in whole or in
part, at any time after the Distribution Date, upon
-12-
surrender of the Right Certificate, with the form of election to purchase on the
reverse side thereof duly executed, to the Rights Agent at the Principal Office
of the Rights Agent, together with payment of the Purchase Price for each one
one-hundredth of a Preferred Share as to which the Rights are exercised, at or
prior to the earliest of (i) the Close of Business on June 30, 2012 (the "FINAL
EXPIRATION DATE"), (ii) the time at which the Rights are redeemed as provided in
Section 23 hereof (the "REDEMPTION DATE"), or (iii) the time at which such
Rights are exchanged as provided in Section 24 hereof.
(b) The Purchase Price for each one one-hundredth of a Preferred
Share purchasable pursuant to the exercise of a Right shall initially be $300,
and shall be subject to adjustment from time to time as provided in Section 11
or 13 hereof, and shall be payable in lawful money of the United States of
America in accordance with paragraph (c) below.
(c) Upon receipt of a Right Certificate representing exercisable
Rights, with the form of election to purchase duly executed, accompanied by
payment of the Purchase Price for the shares to be purchased and an amount equal
to any applicable transfer tax or charge required to be paid by the holder of
such Right Certificate in accordance with Section 9 hereof by certified check,
cashier's check or money order payable to the order of the Company, the Rights
Agent shall thereupon promptly (i) (A) requisition from any transfer agent of
the Preferred Shares certificates for the number of Preferred Shares to be
purchased and the Company hereby irrevocably authorizes any such transfer agent
to comply with all such requests, or (B) requisition from the depositary agent
depositary receipts representing such number of one one-hundredths of a
Preferred Share as are to be purchased (in which case certificates for the
Preferred Shares represented by such receipts shall be deposited by the transfer
agent of the Preferred Shares with such depositary agent) and the Company hereby
directs such depositary agent
-13-
to comply with such request; (ii) when appropriate, requisition from the Company
the amount of cash to be paid in lieu of issuance of fractional shares in
accordance with Section 14 hereof; (iii) promptly after receipt of such
certificates or depositary receipts, cause the same to be delivered to or upon
the order of the registered holder of such Right Certificate, registered in such
name or names as may be designated by such holder; and (iv) when appropriate,
after receipt, promptly deliver such cash to or upon the order of the registered
holder of such Right Certificate.
(d) In case the registered holder of any Right Certificate shall
exercise less than all the Rights evidenced thereby, a new Right Certificate
evidencing Rights equivalent to the Rights remaining unexercised shall be issued
by the Rights Agent to the registered holder of such Right Certificate or to
such holder's duly authorized assigns, subject to the provisions of Section 14
hereof.
Section 8. CANCELLATION AND DESTRUCTION OF RIGHT CERTIFICATES. All
Right Certificates surrendered for the purpose of exercise, transfer, split up,
combination or exchange shall, if surrendered to the Company or to any of its
agents, be delivered to the Rights Agent for cancellation or in cancelled form,
or, if surrendered to the Rights Agent, shall be cancelled by it, and no Right
Certificates shall be issued in lieu thereof except as expressly permitted by
any of the provisions of this Agreement. The Company shall deliver to the Rights
Agent for cancellation and retirement, and the Rights Agent shall so cancel and
retire, any other Right Certificate purchased or acquired by the Company
otherwise than upon the exercise thereof. The Rights Agent shall deliver all
cancelled Right Certificates to the Company, or shall, at the written request of
the Company, destroy such cancelled Right Certificates, and, in such case, shall
deliver a certificate of destruction thereof to the Company.
-14-
Section 9. AVAILABILITY OF PREFERRED SHARES. The Company covenants
and agrees that it will cause to be reserved and kept available out of its
authorized and unissued Preferred Shares or any Preferred Shares held in its
treasury the number of Preferred Shares that will be sufficient to permit the
exercise in full of all outstanding Rights in accordance with Section 7 hereof.
The Company covenants and agrees that it will take all such action as may be
necessary to ensure that all Preferred Shares delivered upon exercise of Rights
shall, at the time of delivery of the certificates for such Preferred Shares
(subject to payment of the Purchase Price), be duly and validly authorized and
issued and fully paid and nonassessable shares.
The Company further covenants and agrees that it will pay when due
and payable any and all federal and state transfer taxes and charges which may
be payable in respect of the issuance or delivery of the Right Certificates or
of any Preferred Shares upon the exercise of Rights. The Company shall not,
however, be required to pay any transfer tax or charge which may be payable in
respect of any transfer or delivery of Right Certificates to a Person other
than, or the issuance or delivery of certificates or depositary receipts for the
Preferred Shares in a name other than that of, the registered holder of the
Right Certificate evidencing Rights surrendered for exercise or to issue or to
deliver any certificates or depositary receipts for Preferred Shares upon the
exercise of any Rights until any such tax or charge shall have been paid (any
such tax being payable by the holder of such Right Certificate at the time of
surrender) or until it has been established to the Company's reasonable
satisfaction that no such tax or charge is due.
Section 10. PREFERRED SHARES RECORD DATE. Each Person in whose name
any certificate for Preferred Shares is issued upon the exercise of Rights shall
for all purposes be deemed to have become the holder of record of the Preferred
Shares represented thereby on, and such certificate shall be dated, the date
upon which the Right Certificate evidencing such Rights
-15-
was duly surrendered and payment of the Purchase Price (and any applicable
transfer taxes or charges) was made; PROVIDED, HOWEVER, that, if the date of
such surrender and payment is a date upon which the Preferred Shares transfer
books of the Company are closed, such Person shall be deemed to have become the
record holder of such shares on, and such certificate shall be dated, the next
succeeding Business Day on which the Preferred Shares transfer books of the
Company are open. Prior to the exercise of the Rights evidenced thereby, the
holder of a Right Certificate shall not be entitled to any rights of a holder of
Preferred Shares for which the Rights shall be exercisable, including, without
limitation, the right to vote, to receive dividends or other distributions or to
exercise any preemptive rights, and shall not be entitled to receive any notice
of any proceedings of the Company, except as provided herein.
Section 11. ADJUSTMENT OF PURCHASE PRICE, NUMBER OF SHARES OR NUMBER
OF RIGHTS. The Purchase Price, the number of Preferred Shares covered by each
Right and the number of Rights outstanding are subject to adjustment from time
to time as provided in this Section 11.
(a) (i) In the event the Company shall at any time after the date of
this Agreement (A) declare a dividend on the Preferred Shares payable in
Preferred Shares, (B) subdivide the outstanding Preferred Shares, (C) combine
the outstanding Preferred Shares into a smaller number of Preferred Shares or
(D) issue any shares of its capital stock in a reclassification of the Preferred
Shares (including any such reclassification in connection with a consolidation
or merger in which the Company is the continuing or surviving corporation),
except as otherwise provided in this Section 11(a), the Purchase Price in effect
at the time of the record date for such dividend or of the effective date of
such subdivision, combination or reclassification, and the number and kind of
shares of capital stock issuable on such date, shall be proportionately
-16-
adjusted so that the holder of any Right exercised after such time shall be
entitled to receive the aggregate number and kind of shares of capital stock
which, if such Right had been exercised immediately prior to such date and at a
time when the Preferred Shares transfer books of the Company were open, such
holder would have owned upon such exercise and been entitled to receive by
virtue of such dividend, subdivision, combination or reclassification; PROVIDED,
HOWEVER, that in no event shall the consideration to be paid upon the exercise
of one Right be less than the aggregate par value of the shares of capital stock
of the Company issuable upon exercise of one Right.
(ii) Subject to Section 24 hereof, in the event any Person becomes an
Acquiring Person, each holder of a Right shall thereafter have a right to
receive, upon exercise thereof at a price equal to the then current Purchase
Price multiplied by the number of one one-hundredths of a Preferred Share for
which a Right is then exercisable (whether or not then exercisable for Preferred
Shares), in accordance with the terms of this Agreement and in lieu of Preferred
Shares, such number of Common Shares of the Company as shall equal the result
obtained by (A) multiplying the then current Purchase Price by the number of one
one-hundredths of a Preferred Share for which a Right is then exercisable
(whether or not then exercisable for Preferred Shares) and dividing that product
by (B) 50% of the then current per share market price of the Common Shares of
the Company (determined pursuant to Section 11(d) hereof) on the date of the
occurrence of such event. In the event that any Person shall become an Acquiring
Person, subject to Section 24, the Company shall not take any action which would
eliminate or diminish the benefits intended to be afforded by the Rights.
From and after the occurrence of such event, any Rights that are or
were acquired or beneficially owned by any Acquiring Person (or any Associate or
Affiliate of such Acquiring
-17-
Person) shall be void, and any holder of such Rights shall thereafter have no
right to exercise such Rights under any provision of this Agreement. No Right
Certificate shall be issued pursuant to Section 3 hereof that represents Rights
beneficially owned by an Acquiring Person whose Rights would be void pursuant to
the preceding sentence or any Associate or Affiliate thereof; no Right
Certificate shall be issued at any time upon the transfer of any Rights to an
Acquiring Person whose Rights would be void pursuant to the preceding sentence
or any Associate or Affiliate thereof or to any nominee of such Acquiring
Person, Associate or Affiliate; and any Right Certificate delivered to the
Rights Agent for transfer to an Acquiring Person whose Rights would be void
pursuant to the preceding sentence shall be cancelled.
(iii) In the event that there shall not be sufficient Common Shares
issued but not outstanding or authorized but unissued to permit the exercise in
full of the Rights in accordance with subparagraph (ii) above, the Company shall
take all such action as may be necessary to authorize additional Common Shares
for issuance upon exercise of the Rights. In the event the Company shall, after
good faith effort, be unable to take all such action as may be necessary to
authorize such additional Common Shares, the Company shall substitute, for each
Common Share that would otherwise be issuable upon exercise of a Right, a number
of Preferred Shares or fraction thereof such that the current per share market
price of one Preferred Share multiplied by such number or fraction is equal to
the current per share market price of one Common Share as of the date of
issuance of such Preferred Shares or fraction thereof.
(b) In case the Company shall fix a record date for the issuance of
rights, options or warrants to all holders of Preferred Shares entitling them
(for a period expiring within 45 calendar days after such record date) to
subscribe for or purchase Preferred Shares (or shares having the same rights,
privileges and preferences as the Preferred Shares ("EQUIVALENT PREFERRED
-18-
SHARES")) or securities convertible into Preferred Shares or equivalent
preferred shares at a price per Preferred Share or equivalent preferred share
(or having a conversion price per share, if a security convertible into
Preferred Shares or equivalent preferred shares) less than the then current per
share market price of the Preferred Shares (as defined in Section 11(d)) on such
record date, the Purchase Price to be in effect after such record date shall be
determined by multiplying the Purchase Price in effect immediately prior to such
record date by a fraction, the numerator of which shall be the number of
Preferred Shares outstanding on such record date plus the number of Preferred
Shares which the aggregate offering price of the total number of Preferred
Shares and/or equivalent preferred shares so to be offered (and/or the aggregate
initial conversion price of the convertible securities so to be offered) would
purchase at such current market price and the denominator of which shall be the
number of Preferred Shares outstanding on such record date plus the number of
additional Preferred Shares and/or equivalent preferred shares to be offered for
subscription or purchase (or into which the convertible securities so to be
offered are initially convertible); PROVIDED, HOWEVER, that in no event shall
the consideration to be paid upon the exercise of one Right be less than the
aggregate par value of the shares of capital stock of the Company issuable upon
exercise of one Right. In case such subscription price may be paid in a
consideration part or all of which shall be in a form other than cash, the value
of such consideration shall be as determined in good faith by the Board of
Directors of the Company, whose determination shall be described in a statement
filed with the Rights Agent and shall be binding on the Rights Agent and holders
of the Rights. Preferred Shares owned by or held for the account of the Company
shall not be deemed outstanding for the purpose of any such computation. Such
adjustment shall be made successively whenever such a record date is fixed; and,
in the event
-19-
that such rights, options or warrants are not so issued, the Purchase Price
shall be adjusted to be the Purchase Price which would then be in
effect if such record date had not been fixed.
(c) In case the Company shall fix a record date for the making of a
distribution to all holders of the Preferred Shares (including any such
distribution made in connection with a consolidation or merger in which the
Company is the continuing or surviving corporation) of evidences of indebtedness
or assets (other than a regular quarterly cash dividend or a dividend payable in
Preferred Shares) or subscription rights or warrants (excluding those referred
to in Section 11(b) hereof), the Purchase Price to be in effect after such
record date shall be determined by multiplying the Purchase Price in effect
immediately prior to such record date by a fraction, the numerator of which
shall be the then-current per share market price of the Preferred Shares on such
record date, less the fair market value (as determined in good faith by the
Board of Directors of the Company, whose determination shall be described in a
statement filed with the Rights Agent and shall be binding on the Rights Agent
and holders of the Rights) of the portion of the assets or evidences of
indebtedness so to be distributed or of such subscription rights or warrants
applicable to one Preferred Share and the denominator of which shall be such
then-current per share market price of the Preferred Shares on such record date;
PROVIDED, HOWEVER, that in no event shall the consideration to be paid upon the
exercise of one Right be less than the aggregate par value of the shares of
capital stock of the Company to be issued upon exercise of one Right. Such
adjustments shall be made successively whenever such a record date is fixed;
and, in the event that such distribution is not so made, the Purchase Price
shall again be adjusted to be the Purchase Price which would then be in effect
if such record date had not been fixed.
(d) (i) For the purpose of any computation hereunder, the "current per
share market price" of any security (a "SECURITY" for the purpose of this
Section 11(d)(i)) on any date
-20-
shall be deemed to be the average of the daily closing prices per share of such
Security for the 30 consecutive Trading Days immediately prior to such date;
PROVIDED, HOWEVER, that, in the event that the current per share market price of
the Security is determined during a period following the announcement by the
issuer of such Security of (A) a dividend or distribution on such Security
payable in shares of such Security or Securities convertible into such shares,
or (B) any subdivision, combination or reclassification of such Security and
prior to the expiration of 30 Trading Days after the ex-dividend date for such
dividend or distribution, or the record date for such subdivision, combination
or reclassification, then, and in each such case, the current per share market
price shall be appropriately adjusted to reflect the current market price per
share equivalent of such Security. The closing price for each day shall be the
last sale price, regular way, reported at or prior to 4:00 P.M. New York City
time or, in case no such sale takes place on such day, the average of the bid
and asked prices, regular way, reported as of 4:00 P.M. New York City time, in
either case, as reported in the principal consolidated transaction reporting
system with respect to securities listed or admitted to trading on the New York
Stock Exchange or, if the Security is not listed or admitted to trading on the
New York Stock Exchange, as reported in the principal consolidated transaction
reporting system with respect to securities listed on the principal national
securities exchange on which the Security is listed or admitted to trading or,
if the Security is not listed or admitted to trading on any national securities
exchange, the last quoted price reported at or prior to 4:00 P.M. New York City
time or, if not so quoted, the average of the high bid and low asked prices in
the over-the-counter market, as reported as of 4:00 P.M. New York City time by
NASDAQ or such other system then in use, or, if on any such date the Security is
not quoted by any such organization, the average of the closing bid and asked
prices as furnished by a professional market maker making a market in the
Security selected by the Board of Direc-
-21-
tors of the Company. The term "TRADING DAY" shall mean a day on which the
principal national securities exchange on which the Security is listed or
admitted to trading is open for the transaction of business, or, if the Security
is not listed or admitted to trading on any national securities exchange, a
Business Day.
(ii) For the purpose of any computation hereunder, the "current per share market
price" of the Preferred Shares shall be determined in accordance with the method
set forth in Section 11(d)(i). If the Preferred Shares are not publicly traded,
the "current per share market price" of the Preferred Shares shall be
conclusively deemed to be the current per share market price of the Common
Shares as determined pursuant to Section 11(d)(i) hereof (appropriately adjusted
to reflect any stock split, stock dividend or similar transaction occurring
after the date hereof), multiplied by one hundred. If neither the Common Shares
nor the Preferred Shares are publicly held or so listed or traded, "current per
share market price" shall mean the fair value per share as determined in good
faith by the Board of Directors of the Company, whose determination shall be
described in a statement filed with the Rights Agent.
(e) No adjustment in the Purchase Price shall be required unless such
adjustment would require an increase or decrease of at least 1% in the Purchase
Price; PROVIDED, HOWEVER, that any adjustments which by reason of this Section
11(e) are not required to be made shall be carried forward and taken into
account in any subsequent adjustment. All calculations under this Section 11
shall be made to the nearest cent or to the nearest one one-millionth of a
Preferred Share or one ten-thousandth of any other share or security as the case
may be. Notwithstanding the first sentence of this Section 11(e), any adjustment
required by this Section 11 shall be made no later than the earlier of (i) three
years from the date of the transaction which requires such adjustment or (ii)
the date of the expiration of the right to exercise any Rights.
-22-
(f) If, as a result of an adjustment made pursuant to Section 11(a)
hereof, the holder of any Right thereafter exercised shall become entitled to
receive any shares of capital stock of the Company other than Preferred Shares,
thereafter the number of such other shares so receivable upon exercise of any
Right shall be subject to adjustment from time to time in a manner and on terms
as nearly equivalent as practicable to the provisions with respect to the
Preferred Shares contained in Section 11(a) through (c) hereof, inclusive, and
the provisions of Sections 7, 9, 10 and 13 hereof with respect to the Preferred
Shares shall apply on like terms to any such other shares.
(g) All Rights originally issued by the Company subsequent to any
adjustment made to the Purchase Price hereunder shall evidence the right to
purchase, at the adjusted Purchase Price, the number of one one-hundredths of a
Preferred Share purchasable from time to time hereunder upon exercise of the
Rights, all subject to further adjustment as provided herein.
(h) Unless the Company shall have exercised its election as provided
in Section 11(i) hereof, upon each adjustment of the Purchase Price as a result
of the calculations made in Sections 11(b) and (c) hereof, each Right
outstanding immediately prior to the making of such adjustment shall thereafter
evidence the right to purchase, at the adjusted Purchase Price, that number of
one one-hundredths of a Preferred Share (calculated to the nearest one
one-millionth of a Preferred Share) obtained by (A) multiplying (x) the number
of one one-hundredths of a share covered by a Right immediately prior to this
adjustment by (y) the Purchase Price in effect immediately prior to such
adjustment of the Purchase Price and (B) dividing the product so obtained by the
Purchase Price in effect immediately after such adjustment of the Purchase
Price.
-23-
(i) The Company may elect, on or after the date of any adjustment of
the Purchase Price, to adjust the number of Rights in substitution for any
adjustment in the number of one one-hundredths of a Preferred Share purchasable
upon the exercise of a Right. Each of the Rights outstanding after such
adjustment of the number of Rights shall be exercisable for the number of one
one-hundredths of a Preferred Share for which a Right was exercisable
immediately prior to such adjustment. Each Right held of record prior to such
adjustment of the number of Rights shall become that number of Rights
(calculated to the nearest one ten-thousandth) obtained by dividing the Purchase
Price in effect immediately prior to adjustment of the Purchase Price by the
Purchase Price in effect immediately after adjustment of the Purchase Price. The
Company shall make a public announcement of its election to adjust the number of
Rights, indicating the record date for the adjustment, and, if known at the
time, the amount of the adjustment to be made, with prompt notice thereof to the
Rights Agent. This record date may be the date on which the Purchase Price is
adjusted or any day thereafter, but, if the Right Certificates have been issued,
shall be at least 10 days later than the date of the public announcement. If
Right Certificates have been issued, upon each adjustment of the number of
Rights pursuant to this Section 11(i), the Company shall, as promptly as
practicable, cause to be distributed to holders of record of Right Certificates
on such record date Right Certificates evidencing, subject to Section 14 hereof,
the additional Rights to which such holders shall be entitled as a result of
such adjustment, or, at the option of the Company, shall cause to be distributed
to such holders of record in substitution and replacement for the Right
Certificates held by such holders prior to the date of adjustment, and upon
surrender thereof, if required by the Company, new Right Certificates evidencing
all the Rights to which such holders shall be entitled after such adjustment.
Right Certificates so to be distributed shall be issued, executed and
countersigned in the manner provided
-24-
for herein, and shall be registered in the names of the holders of record of
Right Certificates on the record date specified in the public announcement.
(j) Irrespective of any adjustment or change in the Purchase Price or
in the number of one one-hundredths of a Preferred Share issuable upon the
exercise of the Rights, the Right Certificates theretofore and thereafter issued
may continue to express the Purchase Price and the number of one one-hundredths
of a Preferred Share which were expressed in the initial Right Certificates
issued hereunder.
(k) Before taking any action that would cause an adjustment reducing
the Purchase Price below one one-hundredth of the then par value, if any, of the
Preferred Shares issuable upon exercise of the Rights, the Company shall take
any corporate action which may, in the opinion of its counsel, be necessary in
order that the Company may validly and legally issue fully paid and
nonassessable Preferred Shares at such adjusted Purchase Price.
(l) In any case in which this Section 11 shall require that an
adjustment in the Purchase Price be made effective as of a record date for a
specified event, the Company may elect to defer (with prompt notice thereof to
the Rights Agent) until the occurrence of such event the issuing to the holder
of any Right exercised after such record date of the Preferred Shares and other
capital stock or securities of the Company, if any, issuable upon such exercise
over and above the Preferred Shares and other capital stock or securities of the
Company, if any, issuable upon such exercise on the basis of the Purchase Price
in effect prior to such adjustment; PROVIDED, HOWEVER, that the Company shall
deliver to such holder a due bill or other appropriate instrument evidencing
such holder's right to receive such additional shares upon the occurrence of the
event requiring such adjustment.
-25-
(m) Anything in this Section 11 to the contrary notwithstanding, the
Company shall be entitled to make such reductions in the Purchase Price, in
addition to those adjustments expressly required by this Section 11, as and to
the extent that it, in its sole discretion, shall determine to be advisable in
order that any consolidation or subdivision of the Preferred Shares, issuance
wholly for cash of any Preferred Shares at less than the current market price,
issuance wholly for cash of Preferred Shares or securities which by their terms
are convertible into or exchangeable for Preferred Shares, dividends on
Preferred Shares payable in Preferred Shares or issuance of rights, options or
warrants referred to in Section 11(b) hereof, hereafter made by the Company to
holders of the Preferred Shares shall not be taxable to such stockholders.
(n) In the event that, at any time after the date of this Agreement
and prior to the Distribution Date, the Company shall (i) declare or pay any
dividend on the Common Shares payable in Common Shares, or (ii) effect a
subdivision, combination or consolidation of the Common Shares (by
reclassification or otherwise than by payment of dividends in Common Shares)
into a greater or lesser number of Common Shares, then, in any such case, (A)
the number of one one-hundredths of a Preferred Share purchasable after such
event upon proper exercise of each Right shall be determined by multiplying the
number of one one-hundredths of a Preferred Share so purchasable immediately
prior to such event by a fraction, the numerator of which is the number of
Common Shares outstanding immediately before such event and the denominator of
which is the number of Common Shares outstanding immediately after such event,
and (B) each Common Share outstanding immediately after such event shall have
issued with respect to it that number of Rights which each Common Share
outstanding immediately prior to such event had issued with respect to it. The
adjustments provided for in this Section 11(n) shall
-26-
be made successively whenever such a dividend is declared or paid or such a
subdivision, combination or consolidation is effected.
Section 12. CERTIFICATE OF ADJUSTED PURCHASE PRICE OR NUMBER OF
SHARES. Whenever an adjustment is made as provided in Section 11 or 13 hereof,
the Company shall promptly (a) prepare a certificate setting forth such
adjustment and a brief statement of the facts accounting for such adjustment,
(b) file with the Rights Agent and with each transfer agent for the Common
Shares or the Preferred Shares and the Securities and Exchange Commission a copy
of such certificate and (c) if such adjustment occurs at any time after the
Distribution Date, mail a brief summary thereof to each holder of a Right
Certificate in accordance with Section 25 hereof. The Rights Agent shall be
fully protected in relying on any certificate or any adjustment therein
contained and shall have no duty with respect to and shall not be deemed to have
knowledge of any such adjustment unless and until it shall have received such
certificate.
Section 13. CONSOLIDATION, MERGER OR SALE OR TRANSFER OF ASSETS OR
EARNING POWER. In the event, directly or indirectly, at any time after a Person
has become an Acquiring Person, (a) the Company shall consolidate with, or merge
with and into, any other Person, (b) any Person shall merge with and into the
Company and the Company shall be the continuing or surviving corporation of such
merger and, in connection with such merger, all or part of the Common Shares
shall be changed into or exchanged for stock or other securities of any other
Person (or the Company) or cash or any other property, or (c) the Company shall
sell or otherwise transfer (or one or more of its Subsidiaries shall sell or
otherwise transfer), in one or more transactions, assets or earning power
aggregating 50% or more of the assets or earning power of the Company and its
Subsidiaries (taken as a whole) to any other Person other than the Company or
one or more of its wholly-owned Subsidiaries, then, and in each such case,
proper provision
-27-
shall be made so that (i) each holder of a Right (except as otherwise provided
herein) shall thereafter have the right to receive, upon the exercise thereof at
a price equal to the then current Purchase Price multiplied by the number of one
one-hundredths of a Preferred Share for which a Right is then exercisable
(whether or not then exercisable for Preferred Shares), in accordance with the
terms of this Agreement and in lieu of Preferred Shares, such number of Common
Shares of such other Person (including the Company as successor thereto or as
the surviving corporation) as shall equal the result obtained by (A) multiplying
the then current Purchase Price by the number of one one-hundredths of a
Preferred Share for which a Right is then exercisable (whether or not then
exercisable for Preferred Shares) and dividing that product by (B) 50% of the
then current per share market price of the Common Shares of such other Person
(determined pursuant to Section 11(d) hereof) on the date of consummation of
such consolidation, merger, sale or transfer; (ii) the issuer of such Common
Shares shall thereafter be liable for, and shall assume, by virtue of such
consolidation, merger, sale or transfer, all the obligations and duties of the
Company pursuant to this Agreement; (iii) the term "Company" shall thereafter be
deemed to refer to such issuer; and (iv) such issuer shall take such steps
(including, but not limited to, the reservation of a sufficient number of its
Common Shares in accordance with Section 9 hereof) in connection with such
consummation as may be necessary to assure that the provisions hereof shall
thereafter be applicable, as nearly as reasonably may be, in relation to the
Common Shares of the Company thereafter deliverable upon the exercise of the
Rights. The Company shall not consummate any such consolidation, merger, sale or
transfer unless, prior thereto, the Company and such issuer shall have executed
and delivered to the Rights Agent a supplemental agreement so providing. The
Company shall not enter into any transaction of the kind referred to in this
Section 13 if at the time of such transaction there are any rights, warrants,
instruments or securi-
-28-
ties outstanding or any agreements or arrangements which, as a result of the
consummation of such transaction, would eliminate or substantially diminish the
benefits intended to be afforded by the Rights. The provisions of this Section
13 shall similarly apply to successive mergers or consolidations or sales or
other transfers.
Section 14. FRACTIONAL RIGHTS AND FRACTIONAL SHARES. (a) The Company
shall not be required to issue fractions of Rights or to distribute Right
Certificates which evidence fractional Rights. In lieu of such fractional
Rights, there shall be paid to the registered holders of the Right Certificates
with regard to which such fractional Rights would otherwise be issuable, an
amount in cash equal to the same fraction of the current market value of a whole
Right. For the purposes of this Section 14(a), the current market value of a
whole Right shall be the closing price of the Rights for the Trading Day
immediately prior to the date on which such fractional Rights would have been
otherwise issuable. The closing price for any day shall be the last sale price,
regular way, or, in case no such sale takes place on such day, the average of
the closing bid and asked prices, regular way, in either case, as reported in
the principal consolidated transaction reporting system with respect to
securities listed or admitted to trading on the New York Stock Exchange or, if
the Rights are not listed or admitted to trading on the New York Stock Exchange,
as reported in the principal consolidated transaction reporting system with
respect to securities listed on the principal national securities exchange on
which the Rights are listed or admitted to trading or, if the Rights are not
listed or admitted to trading on any national securities exchange, the last
quoted price or, if not so quoted, the average of the high bid and low asked
prices in the over-the-counter market, as reported by NASDAQ or such other
system then in use or, if on any such date the Rights are not quoted by any such
organization, the average of the closing bid and asked prices as furnished by a
professional market maker making a market in the Rights selected
-29-
by the Board of Directors of the Company. If on any such date no such market
maker is making a market in the Rights, the fair value of the Rights on such
date as determined in good faith by the Board of Directors of the Company shall
be used.
(b) The Company shall not be required to issue fractions of Preferred
Shares (other than fractions which are integral multiples of one one-hundredth
of a Preferred Share) upon exercise of the Rights or to distribute certificates
which evidence fractional Preferred Shares (other than fractions which are
integral multiples of one one-hundredth of a Preferred Share). Fractions of
Preferred Shares in integral multiples of one one-hundredth of a Preferred Share
may, at the election of the Company, be evidenced by depositary receipts,
pursuant to an appropriate agreement between the Company and a depositary
selected by it; PROVIDED that such agreement shall provide that the holders of
such depositary receipts shall have all the rights, privileges and preferences
to which they are entitled as beneficial owners of the Preferred Shares
represented by such depositary receipts. In lieu of fractional Preferred Shares
that are not integral multiples of one one-hundredth of a Preferred Share, the
Company shall pay to the registered holders of Right Certificates at the time
such Rights are exercised as herein provided an amount in cash equal to the same
fraction of the current market value of one Preferred Share. For the purposes of
this Section 14(b), the current market value of a Preferred Share shall be the
closing price of a Preferred Share (as determined pursuant to the second
sentence of Section 11(d)(i) hereof) for the Trading Day immediately prior to
the date of such exercise.
(c) The holder of a Right, by the acceptance of the Right, expressly
waives such holder's right to receive any fractional Rights or any fractional
shares upon exercise of a Right (except as provided above).
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Section 15. RIGHTS OF ACTION. All rights of action in respect of this
Agreement, excepting the rights of action given to the Rights Agent under
Sections 18 and 20 hereof, are vested in the respective registered holders of
the Right Certificates (and, prior to the Distribution Date, the registered
holders of the Common Shares); and any registered holder of any Right
Certificate (or, prior to the Distribution Date, of the Common Shares), without
the consent of the Rights Agent or of the holder of any other Right Certificate
(or, prior to the Distribution Date, of the Common Shares), may, in such
holder's own behalf and for such holder's own benefit, enforce, and may
institute and maintain any suit, action or proceeding against the Company to
enforce, or otherwise act in respect of, such holder's right to exercise the
Rights evidenced by such Right Certificate in the manner provided in such Right
Certificate and in this Agreement. Without limiting the foregoing or any
remedies available to the holders of Rights, it is specifically acknowledged
that the holders of Rights would not have an adequate remedy at law for any
breach of this Agreement, and will be entitled to specific performance of the
obligations under, and injunctive relief against actual or threatened violations
of the obligations of any Person subject to, this Agreement.
Section 16. AGREEMENT OF RIGHT HOLDERS. Every holder of a Right, by
accepting the same, consents and agrees with the Company and the Rights Agent
and with every other holder of a Right that:
(a) prior to the Distribution Date, the Rights will be transferable
only in connection with the transfer of the Common Shares;
-31-
(b) after the Distribution Date, the Right Certificates are
transferable only on the registry books of the Rights Agent if surrendered at
the Principal Office of the Rights Agent, duly endorsed or accompanied by a
proper instrument of transfer; and
(c) the Company and the Rights Agent may deem and treat the person in
whose name the Right Certificate (or, prior to the Distribution Date, the
associated Common Shares certificate) is registered as the absolute owner
thereof and of the Rights evidenced thereby (notwithstanding any notations of
ownership or writing on the Right Certificate or the associated Common Shares
certificate made by anyone other than the Company or the Rights Agent) for all
purposes whatsoever, and neither the Company nor the Rights Agent shall be
affected by any notice to the contrary.
Section 17. RIGHT CERTIFICATE HOLDER NOT DEEMED A STOCKHOLDER. No
holder, as such, of any Right Certificate shall be entitled to vote, receive
dividends or be deemed for any purpose the holder of the Preferred Shares or any
other securities of the Company which may at any time be issuable on the
exercise of the Rights represented thereby, nor shall anything contained herein
or in any Right Certificate be construed to confer upon the holder of any Right
Certificate, as such, any of the rights of a stockholder of the Company or any
right to vote for the election of directors or upon any matter submitted to
stockholders at any meeting thereof, or to give or withhold consent to any
corporate action, or to receive notice of meetings or other actions affecting
stockholders (except as provided in Section 25 hereof), or to receive dividends
or subscription rights, or otherwise, until the Right or Rights evidenced by
such Right Certificate shall have been exercised in accordance with the
provisions hereof.
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Section 18. CONCERNING THE RIGHTS AGENT. The Company agrees to pay to
the Rights Agent reasonable compensation for all services rendered by it
hereunder, and, from time to time, on demand of the Rights Agent, its reasonable
expenses and counsel fees and other disbursements incurred in the
administration, preparation, delivery, amendment and execution of this Agreement
and the exercise and performance of its duties hereunder. The Company also
agrees to indemnify the Rights Agent for, and to hold it harmless against, any
loss, liability, damage, judgment, fine, penalty, claim, demand, settlement,
cost or expense incurred without gross negligence, bad faith or willful
misconduct (as determined by a court of competent jurisdiction) on the part of
the Rights Agent, for any action taken, suffered or omitted by the Rights Agent
in connection with the acceptance, amendment and administration of this
Agreement, including the costs and expenses of defending against any claim of
liability in the premises. The indemnity provided herein shall survive the
termination of this Agreement, the resignation or removal of the Rights Agent,
and the termination and expiration of the Rights. Anything to the contrary
notwithstanding, in no event shall the Rights Agent be liable for special,
punitive, indirect, consequential or incidental loss or damage of any kind
whatsoever (including but not limited to lost profits), even if the Rights Agent
has been advised of the likelihood of such loss or damage. Any liability of the
Rights Agent under this Rights Agreement will be limited to the amount of fees
paid by the Company to the Rights Agent.
The Rights Agent shall be authorized and protected and shall incur no
liability for, or in respect of any action taken, suffered or omitted by it in
connection with, its administration of this Agreement in reliance upon any Right
Certificate or certificate for the Preferred Shares or Common Shares or for
other securities of the Company, instrument of assignment or transfer, power of
attorney, endorsement, affidavit, letter, notice, direction, consent,
certificate, statement,
-33-
or other paper or document believed by it to be genuine and to be signed,
executed and, where necessary, verified or acknowledged, by the proper person
or persons, or otherwise upon the advice of counsel as set forth in Section 20
hereof.
Section 19. MERGER OR CONSOLIDATION OR CHANGE OF NAME OF RIGHTS AGENT.
Any Person into which the Rights Agent or any successor Rights Agent may be
merged or with which it may be consolidated, or any Person resulting from any
merger or consolidation to which the Rights Agent or any successor Rights Agent
shall be a party, or any Person succeeding to the stock transfer or corporate
trust powers of the Rights Agent or any successor Rights Agent, shall be the
successor to the Rights Agent under this Agreement without the execution or
filing of any paper or any further act on the part of any of the parties hereto;
PROVIDED that such Person would be eligible for appointment as a successor
Rights Agent under the provisions of Section 21 hereof. In case at the time such
successor Rights Agent shall succeed to the agency created by this Agreement,
any of the Right Certificates shall have been countersigned but not delivered,
any such successor Rights Agent may adopt the countersignature of the
predecessor Rights Agent and deliver such Right Certificates so countersigned;
and, in case at that time any of the Right Certificates shall not have been
countersigned, any successor Rights Agent may countersign such Right
Certificates either in the name of the predecessor Rights Agent or in the name
of the successor Rights Agent; and, in all such cases, such Right Certificates
shall have the full force provided in the Right Certificates and in this
Agreement.
In case at any time the name of the Rights Agent shall be changed and
at such time any of the Right Certificates shall have been countersigned but not
delivered, the Rights Agent may adopt the countersignature under its prior name
and deliver Right Certificates so countersigned; and, in case at that time any
of the Right Certificates shall not have been counter-
-34-
signed, the Rights Agent may countersign such Right Certificates either in its
prior name or in its changed name; and, in all such cases, such Right
Certificates shall have the full force provided in the Right Certificates and in
this Agreement.
Section 20. DUTIES OF RIGHTS AGENT. The Rights Agent undertakes the
duties and obligations expressly imposed by this Agreement upon the following
terms and conditions, by all of which the Company and the holders of Right
Certificates, by their acceptance thereof, shall be bound:
(a) The Rights Agent may consult with legal counsel (who may be legal
counsel for the Company), and the advice or opinion of such counsel shall be
full and complete authorization and protection to the Rights Agent as to any
action taken, suffered or omitted by it in good faith and in accordance with
such advice or opinion.
(b) Whenever in the performance of its duties under this Agreement the
Rights Agent shall deem it necessary or desirable that any fact or matter be
proved or established by the Company prior to taking or suffering any action
hereunder, such fact or matter (unless other evidence in respect thereof be
herein specifically prescribed) may be deemed to be conclusively proved and
established by a certificate signed by any one of the Chairman of the Board, the
Chief Executive Officer, the President, any Vice President, the Treasurer or the
Secretary of the Company and delivered to the Rights Agent; and such certificate
shall be full authorization to the Rights Agent for any action taken, suffered
or omitted in good faith by it under the provisions of this Agreement in
reliance upon such certificate.
-35-
(c) The Rights Agent shall be liable hereunder to the Company and any
other Person only for its own gross negligence, bad faith or willful misconduct
as determined by a court of competent jurisdiction.
(d) The Rights Agent shall not be liable for or by reason of any of
the statements of fact or recitals contained in this Agreement or in the Right
Certificates (except its countersignature thereof) or be required to verify the
same, but all such statements and recitals are and shall be deemed to have been
made by the Company only.
(e) The Rights Agent shall not be under any responsibility in respect
of the validity of this Agreement or the execution and delivery hereof (except
the due execution hereof by the Rights Agent) or in respect of the validity or
execution of any Right Certificate (except its countersignature thereof); nor
shall it be responsible for any breach by the Company of any covenant or
condition contained in this Agreement or in any Right Certificate; nor shall it
be responsible for any change in the exercisability of the Rights (including the
Rights becoming void pursuant to Section 11(a)(ii) hereof) or any adjustment in
the terms of the Rights (including the manner, method or amount thereof)
provided for in Section 3, 11, 13, 23 or 24 hereof, or the ascertaining of the
existence of facts that would require any such change or adjustment (except with
respect to the exercise of Rights evidenced by Right Certificates after actual
notice that such change or adjustment is required); nor shall it by any act
hereunder be deemed to make any representation or warranty as to the
authorization or reservation of any Preferred Shares to be issued pursuant to
this Agreement or any Right Certificate or as to whether any Preferred Shares
will, when issued, be validly authorized and issued, fully paid and
nonassessable.
-36-
(f) The Company agrees that it will perform, execute, acknowledge and
deliver or cause to be performed, executed, acknowledged and delivered all such
further and other acts, instruments and assurances as may reasonably be required
by the Rights Agent for the carrying out or performing by the Rights Agent of
the provisions of this Agreement.
(g) The Rights Agent is hereby authorized and directed to accept
instructions with respect to the performance of its duties hereunder from any
one of the Chairman of the Board, the Chief Executive Officer, the President,
any Vice President, the Secretary or the Treasurer of the Company, and to apply
to such officers for advice or instructions in connection with its duties, and
it shall not be liable for any action taken, suffered or omitted by it in good
faith in accordance with instructions of any such officer or for any delay in
acting while waiting for those instructions.
(h) The Rights Agent and any stockholder, director, Affiliate, officer
or employee of the Rights Agent may buy, sell or deal in any of the Rights or
other securities of the Company or become pecuniarily interested in any
transaction in which the Company may be interested, or contract with or lend
money to the Company or otherwise act as fully and freely as though it were not
Rights Agent under this Agreement. Nothing herein shall preclude the Rights
Agent from acting in any other capacity for the Company or for any other Person.
(i) The Rights Agent may execute and exercise any of the rights or
powers hereby vested in it or perform any duty hereunder either itself or by or
through its attorneys or agents, and the Rights Agent shall not be answerable or
accountable for any act, default, neglect or misconduct of any such attorneys or
agents or for any loss to the Company resulting from any
-37-
such act, default, neglect or misconduct, provided that reasonable care was
exercised in the selection and continued employment thereof.
(j) No provision of this Agreement shall require the Rights Agent to
expend or risk its own funds or otherwise incur any financial liability in the
performance of any of its duties hereunder or in the exercise of its rights if
it believes that repayment of such funds or adequate indemnification against
such risk or liability is not reasonably assured to it.
Section 21. CHANGE OF RIGHTS AGENT. The Rights Agent or any successor
Rights Agent may resign and be discharged from its duties under this Agreement
upon 30 days' notice in writing mailed to the Company and to each transfer agent
of the Common Shares or Preferred Shares by registered or certified mail, and to
the holders of the Right Certificates by first-class mail. The Company may
remove the Rights Agent or any successor Rights Agent upon 30 days' notice in
writing, mailed to the Rights Agent or successor Rights Agent, as the case may
be, and to each transfer agent of the Common Shares or Preferred Shares by
registered or certified mail, and to the holders of the Right Certificates by
first-class mail. If the Rights Agent shall resign or be removed or shall
otherwise become incapable of acting, the Company shall appoint a successor to
the Rights Agent. If the Company shall fail to make such appointment within a
period of 30 days after giving notice of such removal or after it has been
notified in writing of such resignation or incapacity by the resigning or
incapacitated Rights Agent or by the holder of a Right Certificate (which holder
shall, with such notice, submit such holder's Right Certificate for inspection
by the Company), then the registered holder of any Right Certificate may apply
to any court of competent jurisdiction for the appointment of a new Rights
Agent. Any successor Rights Agent, whether appointed by the Company or by such a
court, shall be a Person organized and doing business under the laws of the
United States or of the State
-38-
of New York (or of any other state of the United States so long as such Person
is authorized to do business in the State of New York), in good standing, having
an office in the State of New York, which is authorized under such laws to
exercise corporate trust or stock transfer powers and is subject to supervision
or examination by federal or state authority and which has at the time of its
appointment as Rights Agent a combined capital and surplus of at least $50
million. After appointment, the successor Rights Agent shall be vested with the
same powers, rights, duties and responsibilities as if it had been originally
named as Rights Agent without further act or deed; but the predecessor Rights
Agent shall deliver and transfer to the successor Rights Agent any property at
the time held by it hereunder, and execute and deliver any further assurance,
conveyance, act or deed necessary for the purpose. Not later than the effective
date of any such appointment, the Company shall file notice thereof in writing
with the predecessor Rights Agent and each transfer agent of the Common Shares
or Preferred Shares, and mail a notice thereof in writing to the registered
holders of the Right Certificates. Failure to give any notice provided for in
this Section 21, however, or any defect therein, shall not affect the legality
or validity of the resignation or removal of the Rights Agent or the appointment
of the successor Rights Agent, as the case may be.
Section 22. ISSUANCE OF NEW RIGHT CERTIFICATES. Notwithstanding any
of the provisions of this Agreement or of the Rights to the contrary, the
Company may, at its option, issue new Right Certificates evidencing Rights in
such form as may be approved by the Board of Directors of the Company to reflect
any adjustment or change in the Purchase Price and the number or kind or class
of shares or other securities or property purchasable under the Right
Certificates made in accordance with the provisions of this Agreement.
-39-
Section 23. REDEMPTION. (a) The Board of Directors of the Company may,
at its option, at any time prior to such time as any Person becomes an Acquiring
Person, redeem all but not less than all the then outstanding Rights at a
redemption price of $.01 per Right, appropriately adjusted to reflect any stock
split, stock dividend or similar transaction occurring after the date hereof
(such redemption price being hereinafter referred to as the "REDEMPTION PRICE").
The redemption of the Rights by the Board of Directors of the Company may be
made effective at such time, on such basis and with such conditions as the Board
of Directors of the Company, in its sole discretion, may establish.
(b) Immediately upon the action of the Board of Directors of the
Company ordering the redemption of the Rights pursuant to paragraph (a) of this
Section 23, and without any further action and without any notice, the right to
exercise the Rights will terminate and the only right thereafter of the holders
of Rights shall be to receive the Redemption Price. The Company shall promptly
give public notice of any such redemption; PROVIDED, HOWEVER, that the failure
to give, or any defect in, any such notice shall not affect the validity of such
redemption. Within 10 days after such action of the Board of Directors of the
Company ordering the redemption of the Rights, the Company shall mail a notice
of redemption to the Rights Agent and to all the holders of the then outstanding
Rights at their last addresses as they appear upon the registry books of the
Rights Agent or, prior to the Distribution Date, on the registry books of the
transfer agent for the Common Shares. Any notice which is mailed in the manner
herein provided shall be deemed given, whether or not the holder receives the
notice. Each such notice of redemption will state the method by which the
payment of the Redemption Price will be made. Neither the Company nor any of its
Affiliates or Associates may redeem, acquire or purchase for value any Rights at
any time in any manner other than that specifically set forth in this Section 23
or in
-40-
Section 24 hereof, and other than in connection with the purchase of Common
Shares prior to the Distribution Date.
Section 24. EXCHANGE. (a) The Board of Directors of the Company may,
at its option, at any time after any Person becomes an Acquiring Person,
exchange all or part of the then outstanding and exercisable Rights (which shall
not include Rights that have become void pursuant to the provisions of Section
11(a)(ii) hereof) for Common Shares at an exchange ratio of one Common Share per
Right, appropriately adjusted to reflect any adjustment in the number of Rights
pursuant to Section 11(i) (such exchange ratio being hereinafter referred to as
the "EXCHANGE RATIO"). Notwithstanding the foregoing, the Board of Directors of
the Company shall not be empowered to effect such exchange at any time after any
Person (other than the Company, any Subsidiary of the Company, any employee
benefit plan of the Company or any such Subsidiary, or any entity holding Common
Shares for or pursuant to the terms of any such plan), together with all
Affiliates and Associates of such Person, becomes the Beneficial Owner of 50% or
more of the Common Shares then outstanding.
(b) Immediately upon the action of the Board of Directors of the
Company ordering the exchange of any Rights pursuant to paragraph (a) of this
Section 24 and without any further action and without any notice, the right to
exercise such Rights shall terminate and the only right thereafter of a holder
of such Rights shall be to receive that number of Common Shares equal to the
number of such Rights held by such holder multiplied by the Exchange Ratio. The
Company shall promptly give public notice of any such exchange with prompt
notice thereof to the Rights Agent; PROVIDED, HOWEVER, that the failure to give,
or any defect in, such notice shall not affect the validity of such exchange.
The Company promptly shall mail a notice of any such exchange to all of the
holders of such Rights at their last addresses as they appear upon the
-41-
registry books of the Rights Agent. Any notice which is mailed in the manner
herein provided shall be deemed given, whether or not the holder receives the
notice. Each such notice of exchange will state the method by which the exchange
of the Common Shares for Rights will be effected, and, in the event of any
partial exchange, the number of Rights which will be exchanged. Any partial
exchange shall be effected PRO RATA based on the number of Rights (other than
Rights which have become void pursuant to the provisions of Section 11(a)(ii)
hereof) held by each holder of Rights.
(c) In the event that there shall not be sufficient Common Shares
issued but not outstanding or authorized but unissued to permit any exchange of
Rights as contemplated in accordance with this Section 24, the Company shall
take all such action as may be necessary to authorize additional Common Shares
for issuance upon exchange of the Rights. In the event the Company shall, after
good faith effort, be unable to take all such action as may be necessary to
authorize such additional Common Shares, the Company shall substitute, for each
Common Share that would otherwise be issuable upon exchange of a Right, a number
of Preferred Shares or fraction thereof such that the current per share market
price of one Preferred Share multiplied by such number or fraction is equal to
the current per share market price of one Common Share as of the date of
issuance of such Preferred Shares or fraction thereof.
(d) The Company shall not be required to issue fractions of Common
Shares or to distribute certificates which evidence fractional Common Shares. In
lieu of such fractional Common Shares, the Company shall pay to the registered
holders of the Right Certificates with regard to which such fractional Common
Shares would otherwise be issuable an amount in cash equal to the same fraction
of the current market value of a whole Common Share. For the purposes of this
paragraph (d), the current market value of a whole Common Share shall be the
-42-
closing price of a Common Share (as determined pursuant to the second sentence
of Section 11(d)(i) hereof) for the Trading Day immediately prior to the date of
exchange pursuant to this Section 24.
Section 25. NOTICE OF CERTAIN EVENTS. (a) In case the Company shall,
at any time after the Distribution Date, propose (i) to pay any dividend payable
in stock of any class to the holders of the Preferred Shares or to make any
other distribution to the holders of the Preferred Shares (other than a regular
quarterly cash dividend), (ii) to offer to the holders of the Preferred Shares
rights or warrants to subscribe for or to purchase any additional Preferred
Shares or shares of stock of any class or any other securities, rights or
options, (iii) to effect any reclassification of the Preferred Shares (other
than a reclassification involving only the subdivision of outstanding Preferred
Shares), (iv) to effect any consolidation or merger into or with, or to effect
any sale or other transfer (or to permit one or more of its Subsidiaries to
effect any sale or other transfer), in one or more transactions, of 50% or more
of the assets or earning power of the Company and its Subsidiaries (taken as a
whole) to, any other Person, (v) to effect the liquidation, dissolution or
winding up of the Company, or (vi) to declare or pay any dividend on the Common
Shares payable in Common Shares or to effect a subdivision, combination or
consolidation of the Common Shares (by reclassification or otherwise than by
payment of dividends in Common Shares), then, in each such case, the Company
shall give to each holder of a Right Certificate and the Rights Agent, in
accordance with Section 26 hereof, a notice of such proposed action, which shall
specify the record date for the purposes of such stock dividend, or distribution
of rights or warrants, or the date on which such reclassification,
consolidation, merger, sale, transfer, liquidation, dissolution, or winding up
is to take place and the date of participation therein by the holders of the
Common Shares and/or Preferred Shares, if any such date is to be
-43-
fixed, and such notice shall be so given in the case of any action covered by
clause (i) or (ii) above at least 10 days prior to the record date for
determining holders of the Preferred Shares for purposes of such action, and, in
the case of any such other action, at least 10 days prior to the date of the
taking of such proposed action or the date of participation therein by the
holders of the Common Shares and/or Preferred Shares, whichever shall be the
earlier.
(b) In case the event set forth in Section 11(a)(ii) hereof shall
occur, then the Company shall, as soon as practicable thereafter, give to each
holder of a Right Certificate and the Rights Agent, in accordance with Section
26 hereof, a notice of the occurrence of such event, which notice shall describe
such event and the consequences of such event to holders of Rights under Section
11(a)(ii) hereof.
Section 26. NOTICES. Notices or demands authorized by this Agreement
to be given or made by the Rights Agent or by the holder of any Right
Certificate to or on the Company shall be sufficiently given or made if sent by
first-class mail, postage prepaid, addressed (until another address is filed in
writing with the Rights Agent) as follows:
ConocoPhillips
600 North Dairy Ashford Road
Houston, Texas 77079
Attention: Corporate Secretary
Subject to the provisions of Section 21 hereof, any notice or demand authorized
by this Agreement to be given or made by the Company or by the holder of any
Right Certificate to or on the Rights Agent shall be sufficiently given or made
if sent by first-class mail, postage prepaid, addressed (until another address
is filed in writing with the Company) as follows:
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Mellon Investor Services LLC
85 Challenger Road
Ridgefield Park, NJ 07660
Attention: Relationship Manager
Notices or demands authorized by this Agreement to be given or made by the
Company or the Rights Agent to the holder of any Right Certificate shall be
sufficiently given or made if sent by first-class mail, postage prepaid,
addressed to such holder at the address of such holder as shown on the registry
books of the Company.
Section 27. SUPPLEMENTS AND AMENDMENTS. The Company may from time to
time supplement or amend this Agreement without the approval of any holders of
Right Certificates in order to cure any ambiguity, to correct or supplement any
provision contained herein which may be defective or inconsistent with any other
provisions herein, or to make any other provisions with respect to the Rights
which the Company may deem necessary or desirable, any such supplement or
amendment to be evidenced by a writing signed by the Company and, if required
pursuant to this section, the Rights Agent; PROVIDED, HOWEVER, that, from and
after such time as any Person becomes an Acquiring Person, this Agreement shall
not be amended in any manner which would adversely affect the interests of the
holders of Rights. Any supplement or amendment to this Rights Agreement duly
approved by the Company that does not amend the rights, duties or obligations of
the Rights Agent hereunder shall become effective immediately upon execution by
the Company, whether or not also executed by the Rights Agent. Without limiting
the foregoing, the Company may at any time prior to such time as any Person
becomes an Acquiring Person amend this Agreement to lower the thresholds set
forth in Section 1(a) and 3(a) hereof to not less than 10% (the "Reduced
Threshold"); PROVIDED, HOWEVER, that no Person who beneficially owns a number of
Common Shares equal to or greater than the Reduced
-45-
Threshold shall become an Acquiring Person unless such Person shall, after the
public announcement of the Reduced Threshold, increase its beneficial ownership
of the then outstanding Common Shares (other than as a result of an acquisition
of Common Shares by the Company) to an amount equal to or greater than the
greater of (x) the Reduced Threshold or (y) the sum of (i) the lowest beneficial
ownership of such Person as a percentage of the outstanding Common Shares as of
any date on or after the date of the public announcement of such Reduced
Threshold plus (ii) .001%. If pursuant to the terms of this section a supplement
or amendment must be executed by the Rights Agent, the Rights Agent shall
execute such supplement or amendment upon the delivery of a certificate from an
appropriate officer of the Company which states that the proposed supplement or
amendment is in compliance with the terms of this Section 27.
Section 28. SUCCESSORS. All the covenants and provisions of
this Agreement by or for the benefit of the Company or the Rights
Agent shall bind and inure to the benefit of their respective
successors and assigns hereunder.
Section 29. BENEFITS OF THIS AGREEMENT. Nothing in this Agreement
shall be construed to give to any Person other than the Company, the Rights
Agent and the registered holders of the Right Certificates (and, prior to the
Distribution Date, the Common Shares) any legal or equitable right, remedy or
claim under this Agreement; but this Agreement shall be for the sole and
exclusive benefit of the Company, the Rights Agent and the registered holders of
the Right Certificates (and, prior to the Distribution Date, the Common Shares).
Section 30. SEVERABILITY. If any term, provision, covenant or
restriction of this Agreement is held by a court of competent jurisdiction or
other authority to be invalid, void or unenforceable, the remainder of the
terms, provisions, covenants and restrictions of this Agree-
-46-
ment shall remain in full force and effect and shall in no way be affected,
impaired or invalidated.
Section 31. GOVERNING LAW. This Agreement and each Right Certificate
issued hereunder shall be deemed to be a contract made under the laws of the
State of Delaware and for all purposes shall be governed by and construed in
accordance with the laws of such state applicable to contracts to be made and
performed entirely within such state.
Section 32. COUNTERPARTS. This Agreement may be executed in any
number of counterparts and each of such counterparts shall for all purposes be
deemed to be an original, and all such counterparts shall together constitute
but one and the same instrument.
Section 33. DESCRIPTIVE HEADINGS. Descriptive headings of the
several Sections of this Agreement are inserted for convenience only and shall
not control or affect the meaning or construction of any of the provisions
hereof.
-47-
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to
be duly executed and attested, all as of the day and year first above written.
Attest: CONOCOPHILLIPS
By /S/ WAYNE C. BYERS By /S/ RICK A. HARRINGTON
---------------------- ---------------------------
Name: Wayne C. Byers Name: Rick A. Harrington
Title: Vice President, Treasurer and Title: Chairman
Assistant Secretary
Attest: MELLON INVESTOR SERVICES LLC
By /S/ DANIEL M. EGAN By /S/ GARY R. D'ALESSANDRO
---------------------- ---------------------------
Name: Daniel M. Egan Name: Gary R. D'Alessandro
Title: Vice President Title Vice President
-48-
EXHIBIT A
FORM
of
CERTIFICATE OF DESIGNATIONS
of
SERIES A JUNIOR PARTICIPATING PREFERRED STOCK
of
CONOCOPHILLIPS
(Pursuant to Section 151 of the
Delaware General Corporation Law)
----------------------
CONOCOPHILLIPS, a corporation organized and existing under the
General Corporation Law of the State of Delaware (hereinafter called the
"CORPORATION"), hereby certifies that the following resolution was adopted by
the Board of Directors of the Corporation as required by Section 151 of the
General Corporation Law acting by written consent pursuant to Section 141(f) of
the General Corporation Law on June 30, 2002:
RESOLVED, that pursuant to the authority granted to and vested in the
Board of Directors of this Corporation (hereinafter called the "BOARD OF
DIRECTORS" or the "BOARD") in accordance with the provisions of the Certificate
of Incorporation, the Board of Directors hereby creates a series of Preferred
Stock, par value $.01 per share, of the Corporation (the "Preferred Stock"), and
hereby states the designation and number of shares, and fixes the relative
rights, powers, preferences, and limitations thereof as follows:
Series A Junior Participating Preferred Stock:
Section 1. DESIGNATION AND AMOUNT. The shares of such series shall be
designated as "Series A Junior Participating Preferred Stock" (the "SERIES A
PREFERRED STOCK") and the number of shares constituting the Series A Preferred
Stock shall be 10,000,000. Such number of shares may be increased or decreased
by resolution of the Board of Directors; PROVIDED, that no decrease shall reduce
the number of shares of Series A Preferred Stock to a number less than the
number of shares then outstanding plus the number of shares reserved for
issuance upon the exercise of outstanding options, rights or warrants or upon
the conversion of any outstanding securities issued by the Corporation
convertible into Series A Preferred Stock.
Section 2. DIVIDENDS AND DISTRIBUTIONS.
(A) Subject to the rights of the holders of any shares of any series
of Preferred Stock (or any similar stock) ranking prior and superior to the
Series A Preferred Stock
A-1
with respect to dividends, the holders of shares of Series A Preferred
Stock, in preference to the holders of Common Stock, par value $.01 per
share (the "COMMON STOCK"), of the Corporation, and of any other junior
stock, shall be entitled to receive, when, as and if declared by the Board
of Directors out of funds legally available for the purpose, quarterly
dividends payable in cash on the first day of March, June, September and
December in each year (each such date being referred to herein as a
"Quarterly Dividend Payment Date"), commencing on the first Quarterly
Dividend Payment Date after the first issuance of a share or fraction of a
share of Series A Preferred Stock, in an amount per share (rounded to the
nearest cent) equal to the greater of (a) $1 or (b) subject to the
provision for adjustment hereinafter set forth, 100 times the aggregate per
share amount of all cash dividends, and 100 times the aggregate per share
amount (payable in kind) of all non-cash dividends or other distributions,
other than a dividend payable in shares of Common Stock or a subdivision of
the outstanding shares of Common Stock (by reclassification or otherwise),
declared on the Common Stock since the immediately preceding Quarterly
Dividend Payment Date or, with respect to the first Quarterly Dividend
Payment Date, since the first issuance of any share or fraction of a share
of Series A Preferred Stock. In the event the Corporation shall at any time
declare or pay any dividend on the Common Stock payable in shares of Common
Stock, or effect a subdivision or combination or consolidation of the
outstanding shares of Common Stock (by reclassification or otherwise than
by payment of a dividend in shares of Common Stock) into a greater or
lesser number of shares of Common Stock, then in each such case the amount
to which holders of shares of Series A Preferred Stock were entitled
immediately prior to such event under clause (b) of the preceding sentence
shall be adjusted by multiplying such amount by a fraction, the numerator
of which is the number of shares of Common Stock outstanding immediately
after such event and the denominator of which is the number of shares of
Common Stock that were outstanding immediately prior to such event.
(B) The Corporation shall declare a dividend or distribution on the
Series A Preferred Stock as provided in paragraph (A) of this Section
immediately after it declares a dividend or distribution on the Common
Stock (other than a dividend payable in shares of Common Stock); provided
that, in the event no dividend or distribution shall have been declared on
the Common Stock during the period between any Quarterly Dividend Payment
Date and the next subsequent Quarterly Dividend Payment Date, a dividend of
$1 per share on the Series A Preferred Stock shall nevertheless be payable
on such subsequent Quarterly Dividend Payment Date.
(C) Dividends shall begin to accrue and be cumulative on outstanding
shares of Series A Preferred Stock from the Quarterly Dividend Payment Date
next preceding the date of issue of such shares, unless the date of issue
of such shares is prior to the record date for the first Quarterly Dividend
Payment Date, in which case dividends on such shares shall begin to accrue
from the date of issue of such shares, or unless the date of issue is a
Quarterly Dividend Payment Date or is a date after the record date for the
determination of holders of shares of Series A Preferred Stock entitled to
receive a quarterly dividend and before such Quarterly Dividend Payment
Date, in either of which events such dividends shall begin to accrue and be
cumulative from such Quarterly Dividend Payment Date. Accrued but unpaid
dividends shall not bear interest. Dividends paid on the shares of Series A
Preferred Stock in an amount less than the total amount of such
A-2
dividends at the time accrued and payable on such shares shall be allocated
pro rata on a share-by-share basis among all such shares at the time
outstanding. The Board of Directors may fix a record date for the
determination of holders of shares of Series A Preferred Stock entitled to
receive payment of a dividend or distribution declared thereon, which
record date shall be not more than 60 days prior to the date fixed for the
payment thereof.
Section 3. VOTING RIGHTS. The holders of shares of Series A
Preferred Stock shall have the following voting rights:
(A) Subject to the provision for adjustment hereinafter set forth,
each share of Series A Preferred Stock shall entitle the holder thereof to
100 votes on all matters submitted to a vote of the holders of Common Stock
of the Corporation. In the event the Corporation shall at any time declare
or pay any dividend on the Common Stock payable in shares of Common Stock,
or effect a subdivision or combination or consolidation of the outstanding
shares of Common Stock (by reclassification or otherwise than by payment of
a dividend in shares of Common Stock) into a greater or lesser number of
shares of Common Stock, then in each such case the number of votes per
share to which holders of shares of Series A Preferred Stock were entitled
immediately prior to such event shall be adjusted by multiplying such
number by a fraction, the numerator of which is the number of shares of
Common Stock outstanding immediately after such event and the denominator
of which is the number of shares of Common Stock that were outstanding
immediately prior to such event.
(B) Except as otherwise provided herein, in any other Certificate
of Designations creating a series of Preferred Stock or any similar stock,
or by law, the holders of shares of Series A Preferred Stock and the
holders of shares of Common Stock and any other capital stock of the
Corporation having general voting rights shall vote together as one class
on all matters submitted to a vote of stockholders of the Corporation.
(C) Except as set forth herein, or as otherwise provided by law,
holders of Series A Preferred Stock shall have no special voting rights and
their consent shall not be required (except to the extent they are entitled
to vote with holders of Common Stock as set forth herein) for taking any
corporate action.
Section 4. CERTAIN RESTRICTIONS.
(A) Whenever quarterly dividends or other dividends or distributions
payable on the Series A Preferred Stock as provided in Section 2 are in
arrears, thereafter and until all accrued and unpaid dividends and
distributions, whether or not declared, on shares of Series A Preferred
Stock outstanding shall have been paid in full, the Corporation shall not:
(i) declare or pay dividends, or make any other distributions, on
any shares of stock ranking junior (either as to dividends or upon
liquidation, dissolution or winding up) to the Series A Preferred
Stock;
(ii) declare or pay dividends, or make any other distributions,
on any shares of stock ranking on a parity (either as to dividends or
upon liquidation, dis-
A-3
solution or winding up) with the Series A Preferred Stock, except
dividends paid ratably on the Series A Preferred Stock and all such
parity stock on which dividends are payable or in arrears in
proportion to the total amounts to which the holders of all such
shares are then entitled;
(iii) redeem or purchase or otherwise acquire for consideration
shares of any stock ranking junior (either as to dividends or upon
liquidation, dissolution or winding up) to the Series A Preferred
Stock, provided that the Corporation may at any time redeem, purchase
or otherwise acquire shares of any such junior stock in exchange for
shares of any stock of the Corporation ranking junior (either as to
dividends or upon dissolution, liquidation or winding up) to the
Series A Preferred Stock; or
(iv) redeem or purchase or otherwise acquire for consideration
any shares of Series A Preferred Stock, or any shares of stock ranking
on a parity with the Series A Preferred Stock, except in accordance
with a purchase offer made in writing or by publication (as determined
by the Board of Directors) to all holders of such shares upon such
terms as the Board of Directors, after consideration of the respective
annual dividend rates and other relative rights and preferences of the
respective series and classes, shall determine in good faith will
result in fair and equitable treatment among the respective series or
classes.
(B) The Corporation shall not permit any subsidiary of the Corporation
to purchase or otherwise acquire for consideration any shares of stock of
the Corporation unless the Corporation could, under paragraph (A) of this
Section 4, purchase or otherwise acquire such shares at such time and in
such manner.
Section 5. REACQUIRED SHARES. Any shares of Series A Preferred Stock
purchased or otherwise acquired by the Corporation in any manner whatsoever
shall be retired and cancelled promptly after the acquisition thereof. All such
shares shall upon their cancellation become authorized but unissued shares of
Preferred Stock and may be reissued as part of a new series of Preferred Stock
subject to the conditions and restrictions on issuance set forth herein, in the
Certificate of Incorporation, or in any other Certificate of Designations
creating a series of Preferred Stock or any similar stock or as otherwise
required by law.
Section 6. LIQUIDATION, DISSOLUTION OR WINDING UP. Upon any
liquidation, dissolution or winding up of the Corporation, no distribution shall
be made (1) to the holders of shares of stock ranking junior (either as to
dividends or upon liquidation, dissolution or winding up) to the Series A
Preferred Stock unless, prior thereto, the holders of shares of Series A
Preferred Stock shall have received $100 per share, plus an amount equal to
accrued and unpaid dividends and distributions thereon, whether or not declared,
to the date of such payment, provided that the holders of shares of Series A
Preferred Stock shall be entitled to receive an aggregate amount per share,
subject to the provision for adjustment hereinafter set forth, equal to 100
times the aggregate amount to be distributed per share to holders of shares of
Common Stock, or (2) to the holders of shares of stock ranking on a parity
(either as to dividends or upon liquidation, dissolution or winding up) with the
Series A Preferred Stock, except distributions made ratably on the Series A
Preferred Stock and all such parity stock in proportion to the total
A-4
amounts to which the holders of all such shares are entitled upon such
liquidation, dissolution or winding up. In the event the Corporation shall at
any time declare or pay any dividend on the Common Stock payable in shares of
Common Stock, or effect a subdivision or combination or consolidation of the
outstanding shares of Common Stock (by reclassification or otherwise than by
payment of a dividend in shares of Common Stock) into a greater or lesser number
of shares of Common Stock, then in each such case the aggregate amount to which
holders of shares of Series A Preferred Stock were entitled immediately prior to
such event under the proviso in clause (1) of the preceding sentence shall be
adjusted by multiplying such amount by a fraction the numerator of which is the
number of shares of Common Stock outstanding immediately after such event and
the denominator of which is the number of shares of Common Stock that were
outstanding immediately prior to such event.
Section 7. CONSOLIDATION, MERGER, ETC. In case the Corporation shall
enter into any consolidation, merger, combination or other transaction in which
the shares of Common Stock are exchanged for or changed into other stock or
securities, cash and/or any other property, then in any such case each share of
Series A Preferred Stock shall at the same time be similarly exchanged or
changed into an amount per share, subject to the provision for adjustment
hereinafter set forth, equal to 100 times the aggregate amount of stock,
securities, cash and/or any other property (payable in kind), as the case may
be, into which or for which each share of Common Stock is changed or exchanged.
In the event the Corporation shall at any time declare or pay any dividend on
the Common Stock payable in shares of Common Stock, or effect a subdivision or
combination or consolidation of the outstanding shares of Common Stock (by
reclassification or otherwise than by payment of a dividend in shares of Common
Stock) into a greater or lesser number of shares of Common Stock, then in each
such case the amount set forth in the preceding sentence with respect to the
exchange or change of shares of Series A Preferred Stock shall be adjusted by
multiplying such amount by a fraction, the numerator of which is the number of
shares of Common Stock outstanding immediately after such event and the
denominator of which is the number of shares of Common Stock that were
outstanding immediately prior to such event.
Section 8. NO REDEMPTION. The shares of Series A Preferred Stock
shall not be redeemable.
Section 9. RANK. The Series A Preferred Stock shall rank, with respect
to the payment of dividends and the distribution of assets, junior to all series
of any other class of the Corporation's Preferred Stock.
Section 10. AMENDMENT. The Certificate of Incorporation of the
Corporation shall not be amended in any manner which would materially alter or
change the powers, preferences or special rights of the Series A Preferred Stock
so as to affect them adversely without the affirmative vote of the holders of at
least two-thirds of the outstanding shares of Series A Preferred Stock, voting
together as a single class.
A-5
IN WITNESS WHEREOF, this Certificate of Designations is executed on
behalf of the Corporation by its President this __ day of June, 2002.
-------------------------------
Name: J. Bryan Whitworth
Title: President
A-6
EXHIBIT B
Form of Right Certificate
Certificate No. R- Rights
---
NOT EXERCISABLE AFTER JUNE 30, 2012 OR EARLIER IF
REDEMPTION OR EXCHANGE OCCURS. THE RIGHTS ARE SUB-
JECT TO REDEMPTION AT $.01 PER RIGHT AND TO EXCHANGE
ON THE TERMS SET FORTH IN THE AGREEMENT.
Right Certificate
CONOCOPHILLIPS
This certifies that ________________, or registered assigns, is the
registered owner of the number of Rights set forth above, each of which entitles
the owner thereof, subject to the terms, provisions and conditions of the
Agreement, dated as of June 30, 2002 (the "Agreement"), between CONOCOPHILLIPS,
a Delaware corporation (the "Company"), and MELLON INVESTOR SERVICES LLC (the
"Rights Agent"), to purchase from the Company at any time after the Distribution
Date (as such term is defined in the Agreement) and prior to 5:00 P.M., New York
City time, on June 30, 2012 at the principal office of the Rights Agent, or at
the office of its successor as Rights Agent, one one-hundredth of a fully paid
non-assessable share of Series A Junior Participating Preferred Stock, par value
$.01 per share, of the Company (the "Preferred Shares"), at a purchase price of
$300 per one one-hundredth of a Preferred Share (the "Purchase Price"), upon
presentation and surrender of this Right Certificate with the Form of Election
to Purchase duly executed. The number of Rights evidenced by this Right
Certificate (and the number of one one-hundredths of a Preferred Share which may
be purchased upon exercise hereof) set forth above, and the Purchase Price set
forth above, are the number and Purchase Price as of June 30, 2002, based on the
Preferred Shares as constituted at such date. As provided in the Agreement, the
Purchase Price and the number of one one-hundredths of a Preferred Share which
may be purchased upon the exercise of the Rights evidenced by this Right
Certificate are subject to modification and adjustment upon the happening of
certain events.
This Right Certificate is subject to all of the terms, provisions and
conditions of the Agreement, which terms, provisions and conditions are hereby
incorporated herein by reference and made a part hereof and to which Agreement
reference is hereby made for a full description of the rights, limitations of
rights, obligations, duties and immunities hereunder of the Rights Agent, the
Company and the holders of the Right Certificates. Copies of the Agreement are
on file at the principal executive offices of the Company and the offices of the
Rights Agent.
This Right Certificate, with or without other Right Certificates,
upon surrender at the principal office of the Rights Agent, may be exchanged for
another Right Certificate or Right Certificates of like tenor and date
evidencing Rights entitling the holder to purchase a like aggregate number of
Preferred Shares as the Rights evidenced by the Right Certificate or Right
Cer-
B-1
tificates surrendered shall have entitled such holder to purchase. If this
Right Certificate shall be exercised in part, the holder shall be entitled to
receive upon surrender hereof another Right Certificate or Right Certificates
for the number of whole Rights not exercised.
Subject to the provisions of the Agreement, the Rights evidenced by
this Right Certificate (i) may be redeemed by the Company at a redemption price
of $.01 per Right or (ii) may be exchanged in whole or in part for Preferred
Shares or shares of the Company's Common Stock, par value $.01 per share.
No fractional Preferred Shares will be issued upon the exercise of
any Right or Rights evidenced hereby (other than fractions which are integral
multiples of one one-hundredth of a Preferred Share, which may, at the election
of the Company, be evidenced by depositary receipts), but, in lieu thereof, a
cash payment will be made, as provided in the Agreement.
No holder of this Right Certificate shall be entitled to vote or
receive dividends or be deemed for any purpose the holder of the Preferred
Shares or of any other securities of the Company which may at any time be
issuable on the exercise hereof, nor shall anything contained in the Agreement
or herein be construed to confer upon the holder hereof, as such, any of the
rights of a stockholder of the Company or any right to vote for the election of
directors or upon any matter submitted to stockholders at any meeting thereof,
or to give or withhold consent to any corporate action, or to receive notice of
meetings or other actions affecting stockholders (except as provided in the
Agreement), or to receive dividends or subscription rights, or otherwise, until
the Right or Rights evidenced by this Right Certificate shall have been
exercised as provided in the Agreement.
This Right Certificate shall not be valid or obligatory for any
purpose until it shall have been countersigned by the Rights Agent.
WITNESS the facsimile signature of the proper officers
of the Company and its corporate seal. Dated as of ___________, ______
ATTEST: CONOCOPHILLIPS
_________________________ By ________________________
Name: Name:
Title: Title:
Countersigned:
MELLON INVESTOR SERVICES LLC
By ________________________
Name:
Title:
B-2
Form of Reverse Side of Right Certificate
FORM OF ASSIGNMENT
(To be executed by the registered holder if such
holder desires to transfer the Right Certificate.)
FOR VALUE RECEIVED ________________________ hereby sells, assigns and
transfers unto ______________________________________________________________
_____________________________________________________________________________
(Please print name and address of transferee)
_____________________________________________________________________________
this Right Certificate, together with all right, title and interest therein, and
does hereby irrevocably constitute and appoint ___________________ Attorney, to
transfer the within Right Certificate on the books of the within-named Company,
with full power of substitution.
Dated: ___________________
_________________________________
Signature
Signature Guaranteed:
All Guarantees must be made by a financial institution (such as a
bank or broker) which is a participant in the Securities Transfer Agents
Medallion Program ("STAMP"), the New York Stock Exchange, Inc. Medallion
Signature Program ("MSP"), or the Stock Exchanges Medallion Program ("SEMP") and
must not be dated. Guarantees by a notary public are not acceptable.
The undersigned hereby certifies that the Rights evidenced by this
Right Certificate are not beneficially owned by an Acquiring Person or an
Affiliate or Associate thereof (as defined in the Agreement).
_________________________________
Signature
B-3
Form of Reverse Side of Right Certificate - continued
FORM OF ELECTION TO PURCHASE
(To be executed if holder desires to exercise
Rights represented by the Right Certificate.)
To CONOCOPHILLIPS
The undersigned hereby irrevocably elects to exercise ______________
Rights represented by this Right Certificate to purchase the Preferred Shares
issuable upon the exercise of such Rights and requests that certificates for
such Preferred Shares be issued in the name of:
Please insert social security
or other identifying number
_____________________________________________________________________________
(Please print name and address)
_____________________________________________________________________________
If such number of Rights shall not be all the Rights evidenced by this Right
Certificate, a new Right Certificate for the balance remaining of such Rights
shall be registered in the name of and delivered to:
Please insert social security
or other identifying number
_____________________________________________________________________________
(Please print name and address)
_____________________________________________________________________________
Dated: __________________
_________________________________
Signature
B-4
Signature Guaranteed:
All Guarantees must be made by a financial institution (such as a bank
or broker) which is a participant in the Securities Transfer Agents Medallion
Program ("STAMP"), the New York Stock Exchange, Inc. Medallion Signature Program
("MSP"), or the Stock Exchanges Medallion Program ("SEMP") and must not be
dated. Guarantees by a notary public are not acceptable.
The undersigned hereby certifies that the Rights evidenced by this
Right Certificate are not beneficially owned by an Acquiring Person or an
Affiliate or Associate thereof (as defined in the Agreement).
-----------------------------------
Signature
NOTICE
The signature in the Form of Assignment or Form of Election to
Purchase, as the case may be, must conform to the name as written upon the face
of this Right Certificate in every particular, without alteration or enlargement
or any change whatsoever.
In the event the certification set forth above in the Form of
Assignment or the Form of Election to Purchase, as the case may be, is not
completed, the Company and the Rights Agent will deem the beneficial owner of
the Rights evidenced by this Right Certificate to be an Acquiring Person or an
Affiliate or Associate thereof (as defined in the Agreement) and such Assignment
or Election to Purchase will not be honored.
B-5
EXHIBIT C
SUMMARY OF RIGHTS TO PURCHASE
PREFERRED SHARES
INTRODUCTION
On June 30, 2002, the Board of Directors (the "Board") of
ConocoPhillips, a Delaware corporation (the "Company"), declared a dividend of
one preferred share purchase right (a "Right") for each outstanding share of
common stock, par value $.01 per share. The dividend is payable on June 30, 2002
to the stockholders of record on June 30, 2002.
The Board has adopted this Rights Agreement to protect stockholders
from coercive or otherwise unfair takeover tactics. In general terms, it works
by imposing a significant penalty upon any person or group which acquires 15% or
more of the outstanding common stock without the approval of the Board. The
Rights Agreement should not interfere with any merger or other business
combination approved by the Board.
For those interested in the specific terms of the Rights Agreement as
made between the Company and Mellon Investor Services LLC, as the Rights Agent,
on June 30, 2002, we provide the following summary description. Please note,
however, that this description is only a summary, and is not complete, and
should be read together with the entire Rights Agreement, which has been filed
with the Securities and Exchange Commission as an exhibit to a Current Report on
Form 8-K dated August __, 2002. A copy of the agreement is available free of
charge from the Company.
THE RIGHTS. The Board authorized the issuance of a Right with respect to each
outstanding share of common stock on June 30, 2002. The Rights will initially
trade with, and will be inseparable from, the common stock. The Rights are
evidenced only by certificates that represent shares of common stock. New Rights
will accompany any new shares of common stock that the Company issues after June
30, 2002 until the Distribution Date described below.
EXERCISE PRICE. Each Right will allow its holder to purchase from the Company
one one-hundredth of a share of Series A Junior Participating Preferred Stock
("Preferred Share") for $300, once the Rights become exercisable. This portion
of a Preferred Share will give the stockholder approximately the same dividend,
voting, and liquidation rights as would one share of common stock. Prior to
exercise, the Right does not give its holder any dividend, voting, or
liquidation rights.
EXERCISABILITY. The Rights will not be exercisable until
o the date of the public announcement that a person or group has become an
"Acquiring Person" by obtaining beneficial ownership of 15% or more of the
Company's outstanding common stock, or, if earlier,
o such date determined by the Board (prior to the time any person or group
becomes an Acquiring Person) after a person or group begins a tender or
exchange offer which, if completed, would result in that person or group
becoming an Acquiring Person.
C-1
The date when the Rights become exercisable is referred to as the
"Distribution Date." Until that date, the common stock certificates will also
evidence the Rights, and any transfer of shares of common stock will constitute
a transfer of Rights. After that date, the Rights will separate from the common
stock and be evidenced by Rights certificates that will be mailed to all
eligible holders of common stock. Any Rights held by an Acquiring Person are
void and may not be exercised.
The Board may reduce the threshold at which a person or group becomes
an Acquiring Person from 15% to not less than 10% of the outstanding common
stock.
CONSEQUENCES OF A PERSON OR GROUP BECOMING AN ACQUIRING PERSON.
o FLIP IN. If a person or group becomes an Acquiring Person, all holders of
Rights except the Acquiring Person may, for $300, purchase shares of the
Company's common stock with a market value of $600, based on the market price
of the common stock prior to such acquisition.
o FLIP OVER. If the Company is later acquired in a merger or similar
transaction after the Rights Distribution Date, all holders of Rights except
the Acquiring Person may, for $300, purchase shares of the acquiring
corporation with a market value of $600 based on the market price of the
acquiring corporation's stock, prior to such merger.
PREFERRED SHARE PROVISIONS.
Each one one-hundredth of a Preferred Share, if issued:
o will not be redeemable.
o will entitle holders to quarterly dividend payments of $.01 per share, or an
amount equal to the dividend paid on one share of common stock, whichever is
greater.
o will entitle holders upon liquidation either to receive $1 per share or an
amount equal to the payment made on one share of common stock, whichever is
greater.
o will have the same voting power as one share of common stock.
o if shares of common stock are exchanged via merger, consolidation, or a
similar transaction, will entitle holders to a per share payment equal to the
payment made on one share of common stock.
The value of one one-hundredth interest in a Preferred Share should approximate
the value of one share of common stock.
EXPIRATION. The Rights will expire on June 30, 2012.
REDEMPTION. The Board may redeem the Rights for $.01 per Right at any time
before any person or group becomes an Acquiring Person. If the Board redeems any
Rights, it must redeem all of the Rights. Once the Rights are redeemed, the only
right of the holders of Rights will be to re-
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ceive the redemption price of $.01 per Right. The redemption price will be
adjusted in the event of a stock split or stock dividend of common stock.
EXCHANGE. After a person or group becomes an Acquiring Person, but before an
Acquiring Person owns 50% or more of the Company's outstanding common stock, the
Board may extinguish the Rights by exchanging one share of common stock or an
equivalent security for each Right, other than Rights held by the Acquiring
Person.
ANTI-DILUTION PROVISIONS. The Board may adjust the purchase price of the
Preferred Shares, the number of Preferred Shares issuable and the number of
outstanding Rights to prevent dilution that may occur from a stock dividend, a
stock split, a reclassification of the Preferred Shares or common stock. No
adjustments to the Exercise Price of less than 1% will be made.
AMENDMENTS. The Board may amend the terms of the Rights Agreement without the
consent of the holders of the Rights. However, the Board may not amend the
Rights Agreement to lower the threshold at which a person or group becomes an
Acquiring Person to below 10% of the outstanding common stock. In addition, the
Board may not cause a person or group to become an Acquiring Person by lowering
this threshold below the percentage interest that such person or group already
owns. After a person or group becomes an Acquiring Person, the Board may not
amend the agreement in a way that adversely affects holders of the Rights.
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CONTACTS:
Kristi DesJarlais 281-293-5089
Carlton Adams 281-293-1043
CONOCOPHILLIPS MERGER COMPLETED
HOUSTON, Aug. 30, 2002 --- ConocoPhillips [NYSE:COP] has completed the
merger of Conoco Inc. [NYSE:COC] and Phillips Petroleum Company [NYSE:P],
following clearance by the U.S. Federal Trade Commission earlier today.
Shareholders of both companies and all U.S. and foreign regulatory authorities
cleared the merger earlier this year.
ConocoPhillips is the third-largest integrated U.S. energy company. On
a global basis, it is the sixth-largest publicly held energy company based on
hydrocarbon reserves and production, and it is the fifth-largest global refiner.
ConocoPhillips has net proved reserves of 8.7 billion barrels of oil
equivalent (BOE), daily oil and natural gas production of 1.7 million BOE, and a
refining capacity of 2.6 million barrels per day, and has assets of $75 billion.
"Today marks the creation of a new international integrated major
energy company, with the assets, talent, financial strength and technology
needed to achieve superior results for all stakeholders," said Jim Mulva,
president and chief executive officer of ConocoPhillips. "We possess a
diversified global portfolio of legacy assets and growth projects, as well as a
commitment to financial discipline and operating excellence. Delivering on our
portfolio of organic opportunities, together with highgrading our investments
and capturing synergies, will provide a high-quality earnings base that will
drive shareholder value."
Each share of Phillips common stock has been converted into one share
of ConocoPhillips common stock, and each share of Conoco common stock has been
converted into 0.4677 of a share of ConocoPhillips common stock. Information
regarding exchange of share certificates will be sent to former Phillips and
Conoco shareholders as soon as practicable. Beginning September 3,
ConocoPhillips'
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ConocoPhillips Merger Completed
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stock will be listed on the New York Stock Exchange under the symbol "COP".
"ConocoPhillips combines two successful energy industry pioneers into a
global energy company that is focused on providing safe, clean and sustainable
energy for the world and exceptional value for our shareholders," said Archie W.
Dunham, chairman of the board of ConocoPhillips. "With skilled and dedicated
employees, a strong balance sheet, upstream investment opportunities, and
greater operational efficiency, ConocoPhillips is a tough new major competitor
in the international petroleum industry."
ConocoPhillips is a major international integrated energy company with
operations in some 49 countries. Headquartered in Houston, the company has
assets of $75 billion, net proved reserves of 8.7 billion barrels of oil
equivalent (BOE), and daily production of 1.7 million BOE.
# # #
08/30/02
www.conocophillips.com
CAUTIONARY STATEMENT FOR THE PURPOSES OF THE "SAFE HARBOR" PROVISIONS
OF THE PRIVATE SECURITIES LITIGATION REFORM ACT OF 1995
This press release contains forward-looking statements within the meaning of the
"safe harbor" provisions of the Private Securities Litigation Reform Act of
1995. These statements are based on management's current expectations and
beliefs and are subject to a number of factors and uncertainties that could
cause actual results to differ materially from those described in the
forward-looking statements. The forward-looking statements contained in this
press release include statements about the management and operations of
ConocoPhillips. These statements are not guarantees of future performance,
involve certain risks, uncertainties, and assumptions that are difficult to
predict, and are based upon assumptions as to future events that may not prove
accurate. Therefore, actual outcomes and results may differ materially from what
is expressed herein. In any forward-looking statement in which ConocoPhillips
expresses an expectation or belief as to future results, such expectation or
belief is expressed in good faith and believed to have a reasonable basis, but
there can be no assurance that the statement or expectation or belief will
result or be achieved or accomplished. The following factors, among others,
could cause actual results to differ materially from those described in the
forward-looking statements: costs related to the merger; and other economic,
business, competitive and/or regulatory factors affecting ConocoPhillips'
business generally as set forth in filings with the SEC by Conoco and Phillips
prior to the merger and by ConocoPhillips. ConocoPhillips is under no obligation
to (and expressly disclaims any such obligation to) update or alter its
forward-looking statements whether as a result of new information, future events
or otherwise. For more information, visit the company's Web site at
www.conocophillips.com.