AS FILED WITH THE SECURITIES AND EXCHANGE COMMISSION ON NOVEMBER 13, 2002
REGISTRATION NO. 333-
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UNITED STATES SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
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FORM S-4
REGISTRATION STATEMENT UNDER THE SECURITIES ACT OF 1933
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CONOCOPHILLIPS DELAWARE 2911 01-0562944
CONOCO INC. DELAWARE 2911 51-0370352
PHILLIPS PETROLEUM COMPANY DELAWARE 2911 73-0400345
(Exact name of each registrant as (State or other jurisdiction (Primary standard industrial (I.R.S. employer
specified in its charter) of incorporation or classification code number) identification number)
organization)
600 NORTH DAIRY ASHFORD RICK A. HARRINGTON
HOUSTON, TEXAS 77079 SENIOR VICE PRESIDENT, LEGAL,
(281) 293-1000 AND GENERAL COUNSEL
(Address, including zip code, and telephone number, including area CONOCOPHILLIPS
code, of each registrant's principal executive offices) 600 NORTH DAIRY ASHFORD
HOUSTON, TEXAS 77079
(281) 293-1000
(Name, address, including zip code, and telephone number,
including area code, of agent for service)
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Copy to:
KELLY B. ROSE
BAKER BOTTS L.L.P.
ONE SHELL PLAZA
910 LOUISIANA
HOUSTON, TEXAS 77002
(713) 229-1234
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APPROXIMATE DATE OF COMMENCEMENT OF PROPOSED SALE TO THE PUBLIC: As soon as
practicable after the effective date of this Registration Statement.
If the securities being registered on this Form are being offered in
connection with the formation of a holding company and there is compliance with
General Instruction G, check the following box. [ ]
If this Form is filed to register additional securities for an offering
pursuant to Rule 462(b) under the Securities Act of 1933, as amended (the
"Securities Act"), check the following box and list the Securities Act
registration statement number of the earlier effective registration statement
for the same offering. [ ]
If this Form is a post-effective amendment filed pursuant to Rule 462(d)
under the Securities Act, check the following box and list the Securities Act
registration statement number of the earlier registration statement for the same
offering. [ ]
CALCULATION OF REGISTRATION FEE
===================================================================================================================================
PROPOSED MAXIMUM PROPOSED MAXIMUM
TITLE OF EACH CLASS OF AMOUNT TO BE OFFERING PRICE AGGREGATE AMOUNT OF
SECURITIES TO BE REGISTERED REGISTERED PER SHARE (1) OFFERING PRICE (1) REGISTRATION FEE
- -----------------------------------------------------------------------------------------------------------------------------------
3.625% Notes due 2007 $400,000,000 100% $400,000,000 $36,800
- -----------------------------------------------------------------------------------------------------------------------------------
4.75% Notes due 2012 $1,000,000,000 100% $1,000,000,000 $92,000
- -----------------------------------------------------------------------------------------------------------------------------------
5.90% Notes due 2032 $600,000,000 100% $600,000,000 $55,200
- -----------------------------------------------------------------------------------------------------------------------------------
Guarantees of the Notes by Conoco Inc. -- -- -- (2)
and Phillips Petroleum Company
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Total $2,000,000,000 $2,000,000,000 $184,000(3)
===================================================================================================================================
(1) Estimated solely for the purpose of calculating the registration fee
pursuant to Rule 457(f) under the Securities Act.
(2) Pursuant to Rule 457(n) under the Securities Act, no registration fee is
required with respect to the Guarantees.
(3) Pursuant to Rule 457(p) under the Securities Act, ConocoPhillips hereby
offsets the registration fee required in connection with this Registration
Statement by a total of $184,000 previously paid by Phillips Petroleum
Company and certain Delaware trusts of Phillips, each of which are wholly
owned subsidiaries of ConocoPhillips, in connection with the registration
of $696,969,697 aggregate initial offering price of securities of Phillips
and such trusts pursuant to the Registration Statement on Form S-3
(Registration Nos. 333-34336, 333-34336-01, 333-34336-02, 333-34336-03 and
333-34336-04) initially filed with the Securities and Exchange Commission
on April 7, 2000. Accordingly, no filing fee is paid herewith.
THE REGISTRANTS HEREBY AMEND THIS REGISTRATION STATEMENT ON SUCH DATE OR
DATES AS MAY BE NECESSARY TO DELAY ITS EFFECTIVE DATE UNTIL THE REGISTRANTS
SHALL FILE A FURTHER AMENDMENT WHICH SPECIFICALLY STATES THAT THIS REGISTRATION
STATEMENT SHALL THEREAFTER BECOME EFFECTIVE IN ACCORDANCE WITH SECTION 8(a) OF
THE SECURITIES ACT OR UNTIL THE REGISTRATION STATEMENT SHALL BECOME EFFECTIVE ON
SUCH DATE AS THE COMMISSION, ACTING PURSUANT TO SAID SECTION 8(a), MAY
DETERMINE.
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THE INFORMATION IN THIS PROSPECTUS IS NOT COMPLETE AND MAY BE CHANGED. WE MAY
NOT SELL THESE SECURITIES UNTIL THE REGISTRATION STATEMENT FILED WITH THE
SECURITIES AND EXCHANGE COMMISSION IS EFFECTIVE. THIS PROSPECTUS IS NOT AN OFFER
TO SELL THESE SECURITIES AND WE ARE NOT SOLICITING AN OFFER TO BUY THESE
SECURITIES IN ANY JURISDICTION WHERE THE OFFER OR SALE IS NOT PERMITTED.
SUBJECT TO COMPLETION, DATED NOVEMBER 13, 2002
$2,000,000,000
CONOCOPHILLIPS
OFFER TO EXCHANGE
3.625% NOTES DUE 2007 FOR ALL 4.75% NOTES DUE 2012 FOR ALL 5.90% NOTES DUE 2032 FOR ALL
OUTSTANDING 3.625% NOTES DUE 2007 OUTSTANDING 4.75% NOTES DUE 2012 OUTSTANDING 5.90% NOTES DUE 2032
($400,000,000) ($1,000,000,000) ($600,000,000)
FULLY AND UNCONDITIONALLY GUARANTEED BY
CONOCO INC. AND PHILLIPS PETROLEUM COMPANY
THE NEW NOTES YOU SHOULD NOTE THAT
- - will be freely tradeable and otherwise - we will exchange all old notes that are validly
substantially identical to the old notes tendered and not validly withdrawn for an equal
principal amount of new notes that we have
THE EXCHANGE OFFER registered under the Securities Act of 1933
- - expires at 5:00 p.m., New York City time, on - you may withdraw tenders of old notes at any
, , unless extended time prior to the expiration of the exchange offer
- - is not conditioned upon any minimum aggregate - the exchange of old notes for new notes in the
principal amount of old notes being tendered exchange offer should not be a taxable event for
U.S. federal income tax purposes
NEITHER THE SECURITIES AND EXCHANGE COMMISSION NOR ANY STATE SECURITIES
COMMISSION HAS APPROVED OR DISAPPROVED OF THE NEW NOTES OR DETERMINED IF THIS
PROSPECTUS IS TRUTHFUL OR COMPLETE. ANY REPRESENTATION TO THE CONTRARY IS A
CRIMINAL OFFENSE.
THE DATE OF THIS PROSPECTUS IS ,
THIS PROSPECTUS INCORPORATES IMPORTANT BUSINESS AND FINANCIAL INFORMATION
ABOUT US THAT IS NOTINCLUDED IN OR DELIVERED WITH THIS DOCUMENT. SEE "WHERE YOU
CAN FIND MORE INFORMATION" ON PAGE 46 FOR A LISTING OF DOCUMENTS WE INCORPORATE
BY REFERENCE. THESE DOCUMENTS ARE AVAILABLE WITHOUT CHARGE UPON WRITTEN OR ORAL
REQUEST DIRECTED TO CONOCOPHILLIPS, SHAREHOLDER RELATIONS DEPARTMENT, P.O. BOX
2197, HOUSTON, TEXAS 77079-2197, TELEPHONE: (281) 293-6800. TO ENSURE TIMELY
DELIVERY OF THESE DOCUMENTS, ANY REQUEST BY STOCKHOLDERS SHOULD BE MADE BY ,
. THE EXHIBITS TO THESE DOCUMENTS WILL GENERALLY NOT BE MADE AVAILABLE
UNLESS THEY ARE SPECIFICALLY INCORPORATED BY REFERENCE IN THE DOCUMENTS.
TABLE OF CONTENTS
Forward-Looking Information 3
Prospectus Summary 4
Private Placement 12
Use of Proceeds 12
Capitalization 13
Ratio of Earnings to Fixed Charges 14
The Exchange Offer 15
Description of the Notes 25
Registration Rights Agreement 40
United States Federal Income Tax Consequences 43
Plan of Distribution 44
Transfer Restrictions on Old Notes 45
Legal Matters 46
Experts 46
Where You Can Find More Information 46
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THIS PROSPECTUS IS PART OF A REGISTRATION STATEMENT WE FILED WITH THE
SECURITIES AND EXCHANGE COMMISSION. YOU SHOULD RELY ONLY ON THE INFORMATION WE
HAVE PROVIDED OR INCORPORATED BY REFERENCE IN THIS PROSPECTUS. WE HAVE NOT
AUTHORIZED ANYONE TO PROVIDE YOU WITH ADDITIONAL OR DIFFERENT INFORMATION. WE
ARE NOT MAKING AN OFFER OF THESE SECURITIES IN ANY JURISDICTION WHERE THE OFFER
IS NOT PERMITTED. YOU SHOULD ASSUME THAT THE INFORMATION IN THIS PROSPECTUS IS
ACCURATE ONLY AS OF THE DATE ON THE FRONT OF THIS DOCUMENT AND THAT ANY
INFORMATION WE HAVE INCORPORATED BY REFERENCE IS ACCURATE ONLY AS OF THE DATE OF
THE DOCUMENT INCORPORATED BY REFERENCE.
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2
FORWARD-LOOKING INFORMATION
This prospectus, including the information we incorporate by reference,
includes forward-looking statements within the meaning of Section 27A of the
Securities Act of 1933 and Section 21E of the Securities Exchange Act of 1934.
You can identify our forward-looking statements by the words "expects,"
"anticipates," "intends," "plans," "projects," "believes," "estimates" and
similar expressions.
We have based the forward-looking statements relating to our operations
on our current expectations, estimates and projections about us and the
industries in which we operate in general. We caution you that these statements
are not guarantees of future performance and involve risks, uncertainties and
assumptions that we cannot predict. In addition, we have based many of these
forward-looking statements on assumptions about future events that may prove to
be inaccurate. Accordingly, our actual outcomes and results may differ
materially from what we have expressed or forecast in the forward-looking
statements. Any differences could result from a variety of factors, including
the following:
o fluctuations in crude oil, natural gas and natural gas liquids
prices, refining and marketing margins and margins for our chemicals
business;
o changes in our business, operations, results and prospects;
o the operation and financing of our mid-stream and chemicals joint
ventures;
o potential failure to realize fully or within the expected time frame
the expected cost savings and synergies from the combination of Conoco
and Phillips;
o costs or difficulties related to the integration of the businesses of
Conoco and Phillips, as well as the continued integration of businesses
recently acquired by each of them;
o potential failure or delays in achieving expected reserve or
production levels from existing and future oil and gas development
projects due to operating hazards, drilling risks and the inherent
uncertainties in predicting oil and gas reserves and oil and gas
reservoir performance;
o unsuccessful exploratory drilling activities;
o failure of new products and services to achieve market acceptance;
o unexpected cost increases or technical difficulties in constructing
or modifying facilities for exploration and production projects,
manufacturing or refining;
o unexpected difficulties in manufacturing or refining our refined
products, including synthetic crude oil, and chemicals products;
o lack of, or disruptions in, adequate and reliable transportation for
our crude oil, natural gas and refined products;
o inability to timely obtain or maintain permits, comply with
government regulations or make capital expenditures required to
maintain compliance;
o potential disruption or interruption of our facilities due to
accidents, political events or terrorism;
o international monetary conditions and exchange controls;
o liability for remedial actions, including removal and reclamation
obligations, under environmental regulations;
o liability resulting from litigation;
o general domestic and international economic and political conditions,
including armed hostilities and governmental disputes over territorial
boundaries;
o changes in tax and other laws or regulations applicable to our
business; and
o inability to obtain economical financing for exploration and
development projects, construction or modification of facilities and
general corporate purposes.
3
PROSPECTUS SUMMARY
This summary highlights selected information from this prospectus, but does
not contain all information that may be important to you. This prospectus
includes specific terms of the exchange offer and the new notes, information
about our business and financial data, and we encourage you to read it in its
entirety before making an investment decision.
In this prospectus, we refer to ConocoPhillips, its wholly owned and
majority owned subsidiaries (including Conoco Inc. and Phillips Petroleum
Company) and its ownership interest in equity affiliates as "we," "us" or
"ConocoPhillips," unless the context clearly indicates otherwise. Our ownership
interest in equity affiliates includes corporate entities, partnerships, limited
liability companies and other ventures in which we exert significant influence
by virtue of our ownership interest, which is typically between 20% and 50%.
ABOUT CONOCOPHILLIPS
We are an international, integrated energy company. We are the third
largest integrated energy company in the United States, based on market
capitalization and oil and gas reserves and production. Worldwide, we are the
sixth largest publicly owned energy company, based on oil and gas reserves, and
the fifth largest refiner. We were founded in 2002 as a result of the
combination of the businesses of Conoco Inc. and Phillips Petroleum Company.
Combined, the new company has more than 200 years of experience in the energy
industry. Headquartered in Houston, Texas, we operate in 49 countries. We have
approximately 56,000 employees worldwide and, as of June 30, 2002, pro forma
assets of approximately $75 billion.
We have four core activities worldwide:
- petroleum exploration and production;
- petroleum refining, marketing, supply and transportation;
- natural gas gathering, processing and marketing; and
- chemicals and plastics production.
As of December 31, 2001, on a pro forma combined basis, we had proved
worldwide oil and natural gas reserves of 8.4 billion barrels of oil equivalent
("BOE") and tar sands reserves of 0.3 billion BOE. In this prospectus, natural
gas volumes have been converted to BOE using a ratio of six thousand cubic feet
to one barrel of oil. Based on pro forma production figures for 2001, we would
have had average daily production of 1.6 million BOE per day and a reserve life
of approximately 15 years. We conduct exploration and/or production activities
in 30 countries.
After dispositions relating to Federal Trade Commission review of the
ConocoPhillips merger, we will own interests in 18 refineries in six countries
with aggregate net refining capacity of 2,606 thousand barrels per day. In the
United States, we will own and operate 12 refineries with aggregate net refining
capacity of 2,166 thousand barrels per day, making us the largest refiner in the
nation. We will market our products through approximately 19,500 marketing
outlets in 18 countries.
We participate in the chemicals and plastics business through a 50%
interest in Chevron Phillips Chemical Company, a leading producer of olefins,
polyolefins, aromatics and styrenics. We participate in the natural gas
gathering, processing and marketing business through our 30.3% interest in Duke
Energy Field Services and with other directly owned assets.
We have technological expertise in deepwater exploration and production,
reservoir management and exploitation, 3-D seismic, high-grade petroleum coke
upgrading and sulfur removal. In addition, we have three emerging businesses
under development -- carbon fibers, natural gas refining and power generation.
4
Our principal executive office is located at 600 North Dairy Ashford,
Houston, Texas 77079, telephone (281) 293-1000.
ABOUT CONOCO AND PHILLIPS
Conoco Inc. and Phillips Petroleum Company are our wholly owned
subsidiaries. Their principal executive offices are located at 600 North Dairy
Ashford, Houston, Texas 77079, telephone (281) 293-1000.
THE EXCHANGE OFFER
On October 9, 2002, we issued $400 million principal amount of the
outstanding 3.625% Notes due 2007, $1,000 million principal amount of the
outstanding 4.75% Notes due 2012 and $600 million principal amount of the
outstanding 5.90% Notes due 2032. We sold the old notes of each series in
transactions that were exempt from or not subject to the registration
requirements under the Securities Act. Accordingly, the old notes are subject to
transfer restrictions. In general, you may not offer or sell the old notes
unless either they are registered under the Securities Act or the offer or sale
is exempt from or not subject to registration under the Securities Act and
applicable state securities laws.
In connection with the sale of the old notes, we entered into a
registration rights agreement with the initial purchasers of the old notes. We
agreed to use our reasonable best efforts to have the registration statement of
which this prospectus is a part declared effective by the SEC within 180 days
after the issue date of the old notes and to complete the exchange offer for
each series of notes within 45 days after the registration statement becomes
effective. In the exchange offer, you are entitled to exchange your old notes
for new notes with substantially identical terms, except that the existing
transfer restrictions will be removed. You should read the discussion under the
headings "--Terms of the New Notes" beginning on page 8 and "Description of the
Notes" beginning on page 25 for further information about the new notes.
The exchange offer consists of separate, independent exchange offers for
each series of notes. We have summarized the terms of the exchange offer below.
You should read the discussion under the heading "The Exchange Offer" beginning
on page 15 for further information about the exchange offer and resale of the
new notes. IF YOU FAIL TO EXCHANGE YOUR OLD NOTES FOR NEW NOTES IN THE EXCHANGE
OFFER, THE EXISTING TRANSFER RESTRICTIONS WILL REMAIN IN EFFECT AND THE MARKET
VALUE OF YOUR OLD NOTES LIKELY WILL BE ADVERSELY AFFECTED BECAUSE OF A SMALLER
FLOAT AND REDUCED LIQUIDITY.
Expiration Date The exchange offer will expire at 5:00 p.m., New York City time, on ,
, or such later date and time to which we extend it.
Withdrawal of Tenders You may withdraw your tender of old notes at any time prior to the expiration date.
We will return to you, without charge, promptly after the expiration or termination of
the exchange offer, any old notes that you tendered but that were not accepted for
exchange.
Conditions to the Exchange Offer We will not be required to accept old notes for exchange:
- if the exchange offer would be unlawful or would violate any interpretation of
the staff of the SEC; or
- if any legal action has been instituted or threatened that would impair our
ability to proceed with the exchange offer.
The exchange offer is not conditioned upon any minimum aggregate principal amount of
old notes being tendered. Please read "The Exchange Offer--Conditions to the Exchange
Offer" beginning on page 17 for more information about the conditions to the exchange
offer.
5
Procedures for Tendering Old Notes If you wish to participate in the exchange offer, you must complete, sign and date the
letter of transmittal that we are providing with this prospectus and mail or deliver
the letter of transmittal, together with the old notes, to the exchange agent. If
your old notes are held through The Depository Trust Company, you may effect delivery
of the old notes by book-entry transfer.
In the alternative, if your old notes are held through DTC, you may participate in
the exchange offer through DTC's automated tender offer program. If you tender under
this program, you will agree to be bound by the letter of transmittal as though you
had signed it.
By signing or agreeing to be bound by the letter of transmittal, you will represent
to us that, among other things:
- any new notes that you receive will be acquired in the ordinary course of your
business;
- you have no arrangement or understanding with any person to participate in the
distribution of the old notes or the new notes;
- you are not our "affiliate," as defined in Rule 405 of the Securities Act, or,
if you are our affiliate, you will comply with the registration and prospectus
delivery requirements of the Securities Act to the extent applicable;
- if you are not a broker-dealer, you are not engaged in, and do not intend to
engage in, the distribution of the new notes;
- if you are a broker-dealer, you will receive new notes for your own account in
exchange for old notes that you acquired as a result of market-making activities
or other trading activities, and you will deliver a prospectus in connection with
any resale of such new notes;
- if you are a broker-dealer, you did not purchase the old notes to be exchanged
for the new notes from us; and
- you are not acting on behalf of any person who could not truthfully and
completely make the foregoing representations.
Special Procedures for Beneficial Owners If you own a beneficial interest in old notes that are registered in the name of a
broker, dealer, commercial bank, trust company or other nominee and you wish to
tender the old notes in the exchange offer, please contact the registered holder as
soon as possible and instruct it to tender on your behalf and to comply with our
instructions described in this prospectus.
Guaranteed Delivery Procedures You must tender your old notes according to the guaranteed delivery procedures
described in "The Exchange Offer--Guaranteed Delivery Procedures" beginning on
page 21 if any of the following apply:
- you wish to tender your old notes but they are not immediately available;
6
- you cannot deliver your old notes, the letter of transmittal or any other
required documents to the exchange agent prior to the expiration date; or
- you cannot comply with the applicable procedures under DTC's automated tender
offer program prior to the expiration date.
United States Federal Income Tax The exchange of old notes for new notes in the exchange offer should not be a
Consequences taxable event for U.S. federal income tax purposes. Please read "United States Federal
Income Tax Consequences" beginning on page 43.
Use of Proceeds We will not receive any cash proceeds from the issuance of new notes in the exchange
offer.
THE EXCHANGE AGENT
We have appointed The Bank of New York as exchange agent for the exchange
offer. Please direct questions and requests for assistance, requests for
additional copies of this prospectus or of the letter of transmittal and
requests for the notice of guaranteed delivery to the exchange agent. If you are
not tendering under DTC's automated tender offer program, you should send the
letter of transmittal and any other required documents to the exchange agent as
follows:
THE BANK OF NEW YORK
(212) 815-2742
BY OVERNIGHT DELIVERY, COURIER OR
MAIL (REGISTERED OR CERTIFIED MAIL
RECOMMENDED):
The Bank of New York
101 Barclay Street - 7 East Floor
New York, New York 10286
Attention: Enrique Lopez
Reorganization Unit - 7E
BY FACSIMILE TRANSMISSION (ELIGIBLE INSTITUTIONS ONLY):
(212) 298-1915
Attention: Enrique Lopez
Confirm by Telephone:
(212) 815-2742
7
TERMS OF THE NEW NOTES
The new notes will be freely tradeable and otherwise substantially
identical to the old notes. The new notes will not have registration rights or
provisions for additional interest. The new notes will evidence the same debt as
the old notes, and the old notes and the new notes will be governed by the same
indenture. The old notes of a series and the new notes of that series will vote
together as a single separate class under the indenture.
Notes Offered $400 million principal amount of 3.625% Notes due 2007
$1,000 million principal amount of 4.75% Notes due 2012
$600 million principal amount of 5.90% Notes due 2032
Maturity Date October 15, 2007 for the 3.625% Notes due 2007
October 15, 2012 for the 4.75% Notes due 2012
October 15, 2032 for the 5.90% Notes due 2032
Interest Payment Dates April 15 and October 15 of each year, commencing April 15, 2003
Optional Redemption At any time, ConocoPhillips may elect to redeem any or all of the new notes of a
series in principal amounts of $1,000 or any integral multiple of $1,000.
ConocoPhillips will pay an amount equal to the principal amount of notes redeemed
plus a make-whole premium, which is described under the heading "Description of the
Notes--Redemption" beginning on page 26. ConocoPhillips will also pay accrued
interest to the redemption date.
Guarantee Conoco and Phillips will fully and unconditionally guarantee on a senior unsecured
basis the due and punctual payment of the principal of and any premium and interest
on the new notes when and as it becomes due and payable, whether at maturity or
otherwise.
Ranking The new notes will constitute senior debt of ConocoPhillips and will rank:
- equally with its senior unsecured debt from time to time outstanding, including
its guarantees of the debt of Conoco and Phillips;
- senior to its subordinated debt from time to time outstanding; and
- effectively junior to its secured debt and to all debt and other liabilities of
its subsidiaries other than Conoco and Phillips from time to time outstanding.
Covenants We will issue the new notes under an indenture containing covenants for your benefit.
These covenants restrict our ability, with certain exceptions, to:
- incur debt secured by liens;
- engage in sale/leaseback transactions; and
- merge, consolidate or transfer all or substantially all of our assets.
8
Rights under Registration Rights
Agreement If we fail to complete the exchange offer as required by the registration rights
agreement, we may be obligated to pay additional interest to holders of the old notes.
Please read "Registration Rights Agreement" beginning on page 40 for more information
regarding your rights as a holder of old notes.
Lack of a Public Market for the New Notes There is no existing trading market for the new notes, and there can be no assurance
regarding:
- any future development or liquidity of a trading market for the new notes;
- your ability to sell your new notes at all; or
- the price at which you may be able to sell your new notes.
Future trading prices of the new notes will depend on many factors, including:
- prevailing interest rates;
- our operating results and financial condition; and
- the market for similar securities.
Although we have applied to list the notes on the Luxembourg Stock Exchange, we do not
currently intend to apply for the listing of the notes on any other securities
exchange or for quotation of the notes in any dealer quotation system. We cannot
guarantee that listing will be obtained on the Luxembourg Stock Exchange.
Further Issues The 3.625% Notes due 2007 are limited to $400 million in aggregate principal amount,
the 4.75% Notes due 2012 are limited to $1,000 million in aggregate principal amount
and the 5.90% Notes due 2032 are limited to $600 million in aggregate principal
amount. We may, however, "reopen" each series of notes and issue an unlimited
principal amount of additional notes of that series in the future without the consent
of the holders.
9
SUMMARY PRO FORMA COMBINED FINANCIAL DATA
We have provided in the table below summary pro forma combined financial
data of ConocoPhillips. The data have been derived from, and should be read
together with, the pro forma combined financial statements and related notes
incorporated by reference in this prospectus. This information is based on the
historical consolidated balance sheets and related adjusted historical
consolidated statements of income of Conoco and Phillips, and gives effect to
the August 2002 combination of Conoco and Phillips using the purchase method of
accounting for business combinations. Conoco's and Phillips' income statements
for the year ended December 31, 2001 have been adjusted to reflect the pro forma
impact of the acquisition of Gulf Canada Resources Limited, effective July 1,
2001, and the acquisition of Tosco Corporation on September 14, 2001,
respectively, as if both transactions had occurred on January 1, 2001.
The companies may have performed differently had they always been combined.
You should not rely on the summary pro forma combined financial data as being
indicative of the historical results that would have been achieved had the
companies always been combined or of our future results.
SIX MONTHS ENDED YEAR ENDED
JUNE 30 DECEMBER 31
2002 2001
----------------- -----------
(IN MILLIONS)
STATEMENT OF INCOME DATA:
Sales and other operating revenues $37,832 85,857
Income before extraordinary items and cumulative effect
of changes in accounting principles 544 3,940
AT
JUNE 30
2002
-------------
(IN MILLIONS)
BALANCE SHEET DATA:
Total assets $74,822
Long-term debt 17,179
10
SUMMARY HISTORICAL FINANCIAL DATA
We have provided in the tables below summary consolidated historical
financial data of Conoco and Phillips. We have derived the statement of income
data for each of the years in the five-year period ended December 31, 2001, and
the historical balance sheet data as of December 31, 2001, 2000, 1999, 1998 and
1997, from audited consolidated financial statements of Conoco and Phillips. We
have derived the statement of income data for the six-month periods ended June
30, 2002 and 2001, and the balance sheet data as of June 30, 2002, from
unaudited consolidated financial statements of Conoco and of Phillips, which, in
our management's opinion, include all adjustments necessary for the fair
presentation of the financial position of each company at such date and the
results of operations of each company for such periods. Results of operations of
each company for the six-month period ended June 30, 2002 are not necessarily
indicative of the results of operations that may be achieved for the entire
year. You should read the following financial data in conjunction with the pro
forma combined financial statements and related notes, the consolidated
financial statements and related notes and the other financial information that
we have incorporated by reference in this prospectus.
SUMMARY CONSOLIDATED HISTORICAL FINANCIAL DATA OF CONOCO
SIX MONTHS
ENDED
JUNE 30 YEARS ENDED DECEMBER 31
----------------- --------------------------------------------
2002 2001 2001 2000 1999 1998 1997
------- ------ ------ ------ ------ ------ ------
(IN MILLIONS)
STATEMENT OF INCOME DATA:
Sales and other operating revenues $17,556 21,002 38,737 38,737 27,039 22,796 25,796
Income before extraordinary item and cumulative effect
of change in accounting principle 214 1,168 1,596 1,902 744 450 1,097
Net income 234 1,205 1,589 1,902 744 450 1,097
OTHER DATA:
Cash provided by operations 1,283 1,623 3,141 3,438 2,216 1,373 2,876
Cash used in investing activities 1,339 859 6,347 2,472 1,706 1,598 2,037
Cash provided by (used in) financing activities (43) (473) 3,362 (920) (552) (555) (499)
Capital expenditures and investments 1,448 971 2,835 2,796 1,787 2,516 3,114
Cash exploration expense 128 78 262 191 139 217 286
BALANCE SHEET DATA (AT END OF PERIOD):
Total assets 29,754 27,904 18,127 16,375 16,075 17,062
Long-term debt 8,240 8,267 4,138 4,080 4,689 1,556
SUMMARY CONSOLIDATED HISTORICAL FINANCIAL DATA OF PHILLIPS
SIX MONTHS
ENDED
JUNE 30 YEARS ENDED DECEMBER 31
----------------- --------------------------------------------
2002 2001 2001 2000 1999 1998 1997
------- ------ ------ ------ ------ ------ ------
(IN MILLIONS)
STATEMENT OF INCOME DATA:
Sales and other operating revenues $20,930 10,593 26,729 22,690* 15,396* 13,208* 16,545*
Income before extraordinary item and cumulative effect
of change in accounting principle 264 1,107 1,643 1,862 609 237 959
Net income 249 1,135 1,661 1,862 609 237 959
Pro forma income before extraordinary item assuming the
turnaround accounting method was applied
retroactively** 264 1,107 1,643 1,851 609 242 971
Pro forma net income assuming the turnaround accounting
method was applied retroactively** 249 1,135 1,633 1,851 609 242 971
OTHER DATA:
Cash provided by operations 1,109 1,948 3,562 4,014 1,941 1,630 2,245
Cash used in investing activities 1,460 1,190 2,770 5,762 1,482 1,984 2,056
Cash provided by (used in) financing activities 354 (820) (799) 1,759 (418) 288 (641)
Capital expenditures and investments 1,543 1,414 3,085 2,022 1,690 2,052 2,043
Cash exploration expense 88 90 207 168 133 165 151
BALANCE SHEET DATA (AT END OF PERIOD):
Total assets 36,823 35,217 20,509 15,201 14,216 13,860
Long-term debt 8,576 8,645 6,622 4,271 4,106 2,775
Mandatorily redeemable preferred securities of Phillips
66 Capital Trusts I and II 350 650 650 650 650 650
- ----------
* Restated to include excise taxes on the sale of petroleum products.
** Effective January 1, 2001, Phillips changed its accounting method for major
maintenance turnarounds from the accrue-in-advance method to the
expense-as-incurred method. Amounts reflect the pro forma effects of
retroactive application to all periods presented.
11
PRIVATE PLACEMENT
On October 9, 2002, we issued the $400 million principal amount of the
outstanding 3.625% Notes due 2007, the $1,000 million principal amount of the
outstanding 4.75% Notes due 2012 and the $600 million principal amount of the
outstanding 5.90% Notes due 2032 to the initial purchasers of those notes and
received proceeds, after deducting the discount to the initial purchasers, equal
to 99.545%, 99.550% and 97.877%, respectively, of the principal amount.
We issued the old notes of each series to the initial purchasers in
transactions exempt from or not subject to registration under the Securities Act
of 1933. The initial purchasers then offered and resold the notes to qualified
institutional buyers, institutional accredited investors and non-U.S. persons
initially at the following prices:
- 99.895% of the principal amount of 3.625% Notes due 2007;
- 100.000% of the principal amount of 4.75% Notes due 2012; and
- 98.752% of the principal amount of 5.90% Notes due 2032.
We received aggregate net proceeds of $1,980 million from the sale of the
old notes. We used those proceeds to repay Conoco's Floating Rate Notes due
October 15, 2002, to reduce outstanding commercial paper and for general
corporate purposes.
USE OF PROCEEDS
We will not receive any cash proceeds from the issuance of the new notes.
In consideration for issuing the new notes of each series, we will receive in
exchange a like principal amount of old notes of that series. The old notes
surrendered in exchange for the new notes will be retired and canceled and
cannot be reissued. Accordingly, issuance of the new notes will not result in
any change in our capitalization.
12
CAPITALIZATION
We have provided in the table below, as of June 30, 2002, the consolidated
capitalization of Conoco and of Phillips on an historical basis and of
ConocoPhillips (1) on a pro forma basis giving effect to the August 2002
combination of Conoco and Phillips as if it had occurred on June 30, 2002, and
(2) as further adjusted to give effect to the issuance of the old notes and the
application of all the net proceeds to repay Conoco's floating rate notes and to
reduce outstanding commercial paper.
JUNE 30, 2002
--------------------------------------------------------------
CONOCOPHILLIPS
CONOCO PHILLIPS CONOCOPHILLIPS PRO FORMA
HISTORICAL HISTORICAL PRO FORMA AS ADJUSTED
---------- ---------- -------------- --------------
(IN MILLIONS)
Short-term debt:
Notes payable and long-term debt due within
one year $ 1,782 1,059 2,841 861
------- ------ ------ ------
Long-term debt:
3.625% Notes due 2007 -- -- -- 400
4.75% Notes due 2012 -- -- -- 1,000
5.90% Notes due 2032 -- -- -- 600
Other long-term debt 8,240 8,576 17,179 17,179
------- ------ ------ ------
Total long-term debt 8,240 8,576 17,179 19,179
------- ------ ------ ------
Company-obligated mandatorily redeemable preferred
securities -- 350 350 350
------- ------ ------ ------
Total common stockholders' equity 7,145 14,456 29,513 29,513
------- ------ ------ ------
Total capitalization $17,167 24,441 49,883 49,903
======= ====== ====== ======
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RATIO OF EARNINGS TO FIXED CHARGES
The following table presents the historical ratios of earnings to fixed
charges of each of Conoco and Phillips for the six-month period ended June 30,
2002, and for each of the years in the five-year period ended December 31, 2001.
The following table also presents the unaudited pro forma ratio of earnings to
fixed charges of ConocoPhillips for the six-month period ended June 30, 2002,
and for the year ended December 31, 2001, giving effect to the combination of
Conoco and Phillips using the purchase method of accounting, as if the
combination had occurred on January 1, 2001.
SIX MONTHS
ENDED YEAR ENDED DECEMBER 31
JUNE 30 -------------------------------------
2002 2001 2000 1999 1998 1997
---------- ---- ---- ---- ---- -----
RATIO OF EARNINGS TO FIXED CHARGES:
Conoco 2.4x 6.4x 8.5x 3.9x 3.2x 12.9x
Phillips 2.7x 5.4x 6.6x 3.7x 2.1x 5.5x
ConocoPhillips (pro forma) 2.8x 5.8x
For purposes of this table, "earnings" consist of income before income
taxes, extraordinary items and cumulative effect of accounting changes, plus
fixed charges (excluding capitalized interest and the portion of the preferred
dividend requirement of a subsidiary not previously deducted from pretax income,
but including amortization of amounts previously capitalized), less
undistributed earnings of equity investees of Conoco, Phillips or
ConocoPhillips, as applicable. "Fixed charges" consist of interest (including
capitalized interest) on all debt, amortization of debt discounts and expenses
incurred on issuance, and that portion of rental expense believed to represent
interest.
14
THE EXCHANGE OFFER
PURPOSE OF THE EXCHANGE OFFER
We sold the old notes of each series in transactions that were exempt from
or not subject to the registration requirements under the Securities Act.
Accordingly, the old notes are subject to transfer restrictions. In general, you
may not offer or sell the old notes unless either they are registered under the
Securities Act or the offer or sale is exempt from or not subject to
registration under the Securities Act and applicable state securities laws.
In connection with the sale of the old notes, we entered into a
registration rights agreement with the initial purchasers of the old notes. In
that agreement, we agreed to use our reasonable best efforts to file a
registration statement relating to an offer to exchange each series of old notes
for new notes of the same series and to have that registration statement
declared effective by the SEC within 180 days after the issue date of the old
notes. We also agreed to use our reasonable best efforts to complete the
exchange offer for each series within 45 days after the registration statement
becomes effective. We are offering the new notes of each series under this
prospectus in a separate, independent exchange offer for the old notes of that
series to satisfy our obligations under the registration rights agreement. We
sometimes refer to these separate, independent exchange offers as the "exchange
offer."
RESALE OF NEW NOTES
Based on interpretations of the SEC staff in "no action letters" issued to
third parties, we believe that each new note issued in the exchange offer may be
offered for resale, resold and otherwise transferred by you without compliance
with the registration and prospectus delivery provisions of the Securities Act
if:
- you are not our "affiliate" within the meaning of Rule 405 under the
Securities Act;
- you acquire such new notes in the ordinary course of your business;
and
- you are not engaged in, and do not intend to engage in, and have no
arrangement or understanding with any person to participate in, a
distribution of new notes.
The SEC has not, however, considered the legality of our exchange offer in
the context of a "no action letter," and there can be no assurance that the
staff of the SEC would make a similar determination with respect to our exchange
offer as it has in other interpretations to other parties.
If you tender your old notes in the exchange offer with the intention of
participating in any manner in a distribution of the new notes, you:
- cannot rely on such interpretations by the SEC staff; and
- must comply with the registration and prospectus delivery requirements
of the Securities Act in connection with a secondary resale
transaction of the new notes.
Unless an exemption from registration is otherwise available, the resale by
any securityholder intending to distribute new notes should be covered by an
effective registration statement under the Securities Act containing the selling
securityholder's information required by Item 507 or Item 508, as applicable, of
Regulation S-K under the Securities Act. This prospectus may be used for an
offer to resell, resale or other retransfer of new notes only as specifically
described in this prospectus. Failure to comply with the registration and
prospectus delivery requirements by a holder subject to these requirements could
result in that holder incurring liability for which it is not indemnified by us.
With respect to broker-dealers, only those that acquired the old notes for their
own account as a result of market-making activities or other trading activities
may participate in the exchange offer. Each broker-dealer that receives new
notes for its own account in exchange for old notes acquired as a result of
market-making activities or other trading activities may be deemed to be an
"underwriter" within the meaning of the Securities Act
15
and must deliver a prospectus in connection with any resale of such new notes.
Please read the section captioned "Plan of Distribution" for more details
regarding the transfer of new notes.
TERMS OF THE EXCHANGE OFFER
Upon the terms and subject to the conditions described in this prospectus
and in the letter of transmittal, we will accept for exchange any old notes of a
series properly tendered and not withdrawn prior to the expiration date of the
exchange offer for notes of that series. We will issue $1,000 principal amount
of new notes of a series in exchange for each $1,000 principal amount of old
notes of that series surrendered under the applicable exchange offer. Old notes
may be tendered only in integral multiples of $1,000.
No exchange offer for notes of a series is conditioned upon any minimum
aggregate principal amount of old notes of that series being tendered for
exchange or upon the consummation of any other exchange offer.
As of the date of this prospectus, $400 million principal amount of 3.625%
Notes due 2007, $1,000 million principal amount of 4.75% Notes due 2012 and $600
million principal amount of 5.90% Notes due 2032 are outstanding. This
prospectus and the letter of transmittal are being sent to all registered
holders of old notes. There will be no fixed record date for determining
registered holders of old notes entitled to participate in the exchange offer.
We intend to conduct the exchange offer in accordance with the provisions
of the registration rights agreement, the applicable requirements of the
Securities Act and the Securities Exchange Act of 1934 and the rules and
regulations of the SEC. Old notes that are not tendered for exchange in the
exchange offer:
- will remain outstanding;
- will continue to accrue interest; and
- will be entitled to the rights and benefits that holders have under
the indenture relating to the notes and, if applicable, the
registration rights agreement.
We will be deemed to have accepted for exchange properly tendered old notes
when we have given oral or written notice of the acceptance to the exchange
agent and complied with the applicable provisions of the registration rights
agreement. The exchange agent will act as agent for the tendering holders for
the purposes of receiving the new notes from us.
If you tender old notes in the exchange offer, you will not be required to
pay brokerage commissions or fees or, subject to the instructions in the letter
of transmittal, transfer taxes with respect to the exchange of old notes. We
will pay all charges and expenses, other than certain applicable taxes described
below, in connection with the exchange offer. It is important that you read the
section "--Fees and Expenses" for more details about fees and expenses incurred
in the exchange offer.
We will return any old notes that we do not accept for exchange for any
reason without expense to the tendering holder as promptly as practicable after
the expiration or termination of the applicable exchange offer.
EXPIRATION DATE
Each exchange offer will expire at 5:00 p.m., New York City time, on ,
, unless in our sole discretion we extend it.
EXTENSIONS, DELAY IN ACCEPTANCE, TERMINATION OR AMENDMENT
We expressly reserve the right, at any time or at various times, to extend
the period of time during which an exchange offer for notes of a series is open.
We may extend that period for each series independently. We may
16
delay acceptance for exchange of any old notes of a series by giving oral or
written notice of the extension to their holders. During any such extensions,
all old notes of that series you have previously tendered will remain subject to
the exchange offer for that series, and we may accept them for exchange.
To extend an exchange offer, we will notify the exchange agent orally or in
writing of any extension. We also will make a public announcement of the
extension no later than 9:00 a.m., New York City time, on the next business day
after the previously scheduled expiration date.
If any of the conditions described below under "--Conditions to the
Exchange Offer" have not been satisfied with respect to an exchange offer for
notes of a series, we reserve the right, in our sole discretion:
- to delay accepting for exchange any old notes of that series;
- to extend that exchange offer; or
- to terminate that exchange offer.
We will give oral or written notice of such delay, extension or termination to
the exchange agent. Subject to the terms of the registration rights agreement,
we also reserve the right to amend the terms of that exchange offer in any
manner.
Any such delay in acceptance, extension, termination or amendment will be
followed as promptly as practicable by oral or written notice thereof to the
registered holders of old notes of the series affected. If we amend the exchange
offer in a manner that we determine to constitute a material change, we will
promptly disclose that amendment by means of a prospectus supplement. We will
distribute the supplement to the registered holders of the old notes of the
series affected. Depending upon the significance of the amendment and the manner
of disclosure to the registered holders, we will extend the exchange offer if
the exchange offer would otherwise expire during such period.
Without limiting the manner in which we may choose to make public
announcements of any delay in acceptance, extension, termination or amendment of
the exchange offer, we have no obligation to publish, advertise or otherwise
communicate any such public announcement, other than by making a timely release
to an appropriate news agency.
CONDITIONS TO THE EXCHANGE OFFER
Despite any other term of the exchange offer, we will not be required to
accept for exchange, or exchange any new notes of a series for, any old notes of
that series, and we may terminate the exchange offer for that series as provided
in this prospectus before accepting any old notes of that series for exchange,
if in our reasonable judgment:
- the exchange offer for that series, or the making of any exchange by a
holder of old notes of that series, would violate any applicable law
or any applicable interpretation of the staff of the SEC; or
- any action or proceeding has been instituted or threatened in any
court or by or before any governmental agency with respect to the
exchange offer for that series that, in our judgment, would reasonably
be expected to impair our ability to proceed with that exchange offer.
In addition, we will not be obligated to accept for exchange the old notes
of any holder that has not made to us:
- the representations described under "--Procedures for Tendering" and
in the letter of transmittal; and
17
- - such other representations as may be reasonably necessary under applicable
SEC rules, regulations or interpretations to make available to us an
appropriate form for registering the new notes under the Securities Act.
We expressly reserve the right to amend or terminate each exchange offer,
and to reject for exchange any old notes not previously accepted for exchange in
that exchange offer, upon the occurrence of any of the conditions to that
exchange offer specified above. We will give oral or written notice of any
extension, amendment, non-acceptance or termination to the holders of the old
notes of the series affected as promptly as practicable.
These conditions are for our sole benefit, and we may assert them or waive
them in whole or in part at any time or at various times in our sole discretion.
Our failure at any time to exercise any of these rights will not mean that we
have waived our rights. Each right will be deemed an ongoing right that we may
assert at any time or at various times.
In addition, we will not accept for exchange any old notes tendered, and
will not issue new notes in exchange for any such old notes, if at that time any
stop order has been threatened or is in effect with respect to the registration
statement of which this prospectus constitutes a part or the qualification of
the indenture relating to the notes under the Trust Indenture Act of 1939.
PROCEDURES FOR TENDERING
HOW TO TENDER GENERALLY
Only a holder of old notes may tender such old notes in the exchange offer.
To tender in the exchange offer, a holder must either (1) comply with the
procedures for physical tender or (2) comply with the automated tender offer
program procedures of The Depository Trust Company, or DTC, described below.
To complete a physical tender, a holder must:
- complete, sign and date the letter of transmittal or a facsimile of
the letter of transmittal;
- have the signature on the letter of transmittal guaranteed if the
letter of transmittal so requires;
- mail or deliver the letter of transmittal or facsimile to the exchange
agent prior to the expiration date; and
- deliver the old notes to the exchange agent prior to the expiration
date or comply with the guaranteed delivery procedures described
below.
To be tendered effectively, the exchange agent must receive any physical
delivery of the letter of transmittal and other required documents at its
address provided above under "Prospectus Summary--The Exchange Agent" prior to
the expiration date. To complete a tender through DTC's automated tender offer
program, the exchange agent must receive, prior to the expiration date, a timely
confirmation of book-entry transfer of such old notes into the exchange agent's
account at DTC according to the procedure for book-entry transfer described
below and a properly transmitted agent's message.
The tender by a holder that is not withdrawn prior to the expiration date
and our acceptance of that tender will constitute an agreement between the
holder and us in accordance with the terms and subject to the conditions
described in this prospectus and in the letter of transmittal.
THE METHOD OF DELIVERY OF OLD NOTES, THE LETTER OF TRANSMITTAL AND ALL
OTHER REQUIRED DOCUMENTS TO THE EXCHANGE AGENT IS AT YOUR ELECTION AND RISK.
RATHER THAN MAIL THESE ITEMS, WE RECOMMEND THAT YOU USE AN OVERNIGHT OR HAND
DELIVERY SERVICE. IN ALL CASES, YOU SHOULD ALLOW SUFFICIENT TIME TO ASSURE
DELIVERY TO THE EXCHANGE AGENT BEFORE THE EXPIRATION DATE. YOU SHOULD NOT SEND
THE LETTER OF TRANSMITTAL OR OLD NOTES TO US.
18
YOU MAY REQUEST YOUR BROKER, DEALER, COMMERCIAL BANK, TRUST COMPANY OR OTHER
NOMINEE TO EFFECT THE ABOVE TRANSACTIONS FOR YOU.
BOOK-ENTRY TRANSFER
The exchange agent will make a request to establish an account with respect
to the old notes at DTC for purposes of the exchange offer promptly after the
date of this prospectus. Any financial institution participating in DTC's system
may make book-entry delivery of old notes by causing DTC to transfer such old
notes into the exchange agent's account at DTC in accordance with DTC's
procedures for transfer. If you are unable to deliver confirmation of the
book-entry tender of your old notes into the exchange agent's account at DTC or
all other documents required by the letter of transmittal to the exchange agent
on or prior to the expiration date, you must tender your old notes according to
the guaranteed delivery procedures described below.
TENDERING THROUGH DTC'S AUTOMATED TENDER OFFER PROGRAM
The exchange agent and DTC have confirmed that any financial institution
that is a participant in DTC's system may use DTC's automated tender offer
program to tender its old notes. Accordingly, participants in the program may,
instead of physically completing and signing the letter of transmittal and
delivering it to the exchange agent, transmit their acceptance of the exchange
offer electronically. They may do so by causing DTC to transfer the old notes to
the exchange agent in accordance with its procedures for transfer. DTC will then
send an agent's message to the exchange agent.
An "agent's message" is a message transmitted by DTC to and received by the
exchange agent and forming part of the book-entry confirmation, stating that:
- DTC has received an express acknowledgment from a participant in DTC's
automated tender offer program that is tendering old notes that are
the subject of such book-entry confirmation;
- the participant has received and agrees to be bound by the terms of
the letter of transmittal or, in the case of an agent's message
relating to guaranteed delivery, the participant has received and
agrees to be bound by the applicable notice of guaranteed delivery;
and
- we may enforce the agreement against the participant.
HOW TO TENDER IF YOU ARE A BENEFICIAL OWNER
If you beneficially own old notes that are registered in the name of a
broker, dealer, commercial bank, trust company or other nominee and you wish to
tender those notes, you should contact the registered holder as soon as possible
and instruct the registered holder to tender on your behalf. If you are a
beneficial owner and wish to tender on your own behalf, you must, prior to
completing and executing the letter of transmittal and delivering your old
notes, either:
- make appropriate arrangements to register ownership of the old notes
in your name; or
- obtain a properly completed bond power from the registered holder of
your old notes.
The transfer of registered ownership may take considerable time and may not
be completed prior to the expiration date.
SIGNATURES AND SIGNATURE GUARANTEES
You must have signatures on a letter of transmittal or a notice of
withdrawal described below guaranteed by an "eligible institution" unless the
old notes are tendered:
19
- by a registered holder who has not completed the box entitled "Special
Issuance Instructions" or "Special Delivery Instructions" on the
letter of transmittal and the new notes are being issued directly to
the registered holder of the old notes tendered in the exchange offer
for those new notes; or
- for the account of an eligible institution.
An "eligible institution" is a member firm of a registered national securities
exchange or of the National Association of Securities Dealers, Inc., a
commercial bank or trust company having an office or correspondent in the United
States, or an "eligible guarantor institution" within the meaning of Rule
17Ad-15 under the Exchange Act, in each case that is a member of one of the
recognized signature guarantee programs identified in the letter of transmittal.
WHEN ENDORSEMENTS OR BOND POWERS ARE NEEDED
If a person other than the registered holder of any old notes signs the
letter of transmittal, the old notes must be endorsed or accompanied by a
properly completed bond power. The registered holder must sign the bond power as
the registered holder's name appears on the old notes. An eligible institution
must guarantee that signature.
If the letter of transmittal or any old notes or bond powers are signed by
trustees, executors, administrators, guardians, attorneys-in-fact, officers of
corporations or others acting in a fiduciary or representative capacity, those
persons should so indicate when signing. Unless we waive this requirement, they
also must submit evidence satisfactory to us of their authority to deliver the
letter of transmittal.
DETERMINATIONS UNDER THE EXCHANGE OFFER
We will determine in our sole discretion all questions as to the validity,
form, eligibility, time of receipt, acceptance of tendered old notes and
withdrawal of tendered old notes. Our determination will be final and binding.
We reserve the absolute right to reject any old notes not properly tendered or
any old notes our acceptance of which, in the opinion of our counsel, might be
unlawful. We also reserve the right to waive any defects, irregularities or
conditions of the exchange offer as to particular old notes. Our interpretation
of the terms and conditions of the exchange offer, including the instructions in
the letter of transmittal, will be final and binding on all parties.
Unless waived, any defects or irregularities in connection with tenders of
old notes must be cured within the time we determine. Neither we, the exchange
agent nor any other person will be under any duty to give notification of
defects or irregularities with respect to tenders of old notes, nor will we or
those persons incur any liability for failure to give such notification. Tenders
of old notes will not be deemed made until such defects or irregularities have
been cured or waived. Any old notes received by the exchange agent that are not
properly tendered and as to which the defects or irregularities have not been
cured or waived will be returned to the tendering holder, unless otherwise
provided in the letter of transmittal, as soon as practicable following the
expiration date.
WHEN WE WILL ISSUE NEW NOTES
In all cases, we will issue new notes for old notes that we have accepted
for exchange in the exchange offer only after the exchange agent timely
receives:
- old notes or a timely book-entry confirmation of such old notes into
the exchange agent's account at DTC; and
- a properly completed and duly executed letter of transmittal and all
other required documents or a properly transmitted agent's message.
20
RETURN OF OLD NOTES NOT ACCEPTED OR EXCHANGED
If we do not accept any tendered old notes for exchange for any reason
described in the terms and conditions of the exchange offer or if old notes are
submitted for a greater principal amount than the holder desires to exchange, we
will return the unaccepted or non-exchanged old notes without expense to their
tendering holder. In the case of old notes tendered by book-entry transfer into
the exchange agent's account at DTC according to the procedures described above,
such non-exchanged old notes will be credited to an account maintained with DTC.
These actions will occur as promptly as practicable after the rejection of
tender or the expiration or termination of the exchange offer.
YOUR REPRESENTATIONS TO US
By signing or agreeing to be bound by the letter of transmittal, you will
represent to us that, among other things:
- any new notes that you receive will be acquired in the ordinary course
of your business;
- you have no arrangement or understanding with any person to
participate in the distribution of the old notes or the new notes;
- you are not our "affiliate," as defined in Rule 405 of the Securities
Act, or, if you are our affiliate, you will comply with the
registration and prospectus delivery requirements of the Securities
Act to the extent applicable;
- if you are not a broker-dealer, you are not engaged in, and do not
intend to engage in, the distribution of the new notes;
- if you are a broker-dealer, you will receive new notes for your own
account in exchange for old notes that you acquired as a result of
market-making activities or other trading activities, and you will
deliver a prospectus in connection with any resale of such new notes;
- if you are a broker-dealer, you did not purchase the old notes to be
exchanged for the new notes from us; and
- you are not acting on behalf of any person who could not truthfully
and completely make the foregoing representations.
GUARANTEED DELIVERY PROCEDURES
If you wish to tender your old notes but they are not immediately available
or if you cannot deliver your old notes, the letter of transmittal or any other
required documents to the exchange agent or comply with the applicable
procedures under DTC's automated tender offer program prior to the expiration
date, you may tender if:
- the tender is made through a member firm of a registered national
securities exchange or of the National Association of Securities
Dealers, Inc., a commercial bank or trust company having an office or
correspondent in the United States, or an eligible guarantor
institution;
- prior to the expiration date, the exchange agent receives from that
firm, bank, trust company or institution either a properly completed
and duly executed notice of guaranteed delivery by facsimile
transmission, mail or hand delivery or a properly transmitted agent's
message relating to a notice of guaranteed delivery:
- stating your name and address, the registration number or numbers
of your old notes and the principal amount of old notes tendered;
21
- stating that the tender is being made thereby; and
- guaranteeing that, within three New York Stock Exchange trading
days after the expiration date, the letter of transmittal or
facsimile thereof or agent's message in lieu thereof, together
with the old notes or a book-entry confirmation, and any other
documents required by the letter of transmittal will be deposited
by the eligible guarantor institution with the exchange agent;
- the exchange agent receives such properly completed and executed
letter of transmittal or facsimile or agent's message, as well as all
tendered old notes in proper form for transfer or a book-entry
confirmation, and all other documents required by the letter of
transmittal, within three New York Stock Exchange trading days after
the expiration date.
Upon request to the exchange agent, the exchange agent will send a notice
of guaranteed delivery to you if you wish to tender your old notes according to
the guaranteed delivery procedures described above.
WITHDRAWAL OF TENDERS
Except as otherwise provided in this prospectus, you may withdraw your
tender at any time prior to 5:00 p.m., New York City time, on the expiration
date.
For a withdrawal to be effective:
- the exchange agent must receive a written notice of withdrawal at one
of the addresses listed above under "Prospectus Summary--The Exchange
Agent"; or
- the withdrawing holder must comply with the appropriate procedures of
DTC's automated tender offer program.
Any notice of withdrawal must:
- specify the name of the person who tendered the old notes to be
withdrawn;
- identify the old notes to be withdrawn, including the registration
number or numbers and the principal amount of such old notes;
- be signed by the person who tendered the old notes in the same manner
as the original signature on the letter of transmittal used to deposit
those old notes, or be accompanied by documents of transfer sufficient
to permit the trustee to register the transfer into the name of the
person withdrawing the tender; and
- specify the name in which such old notes are to be registered, if
different from that of the person who tendered the old notes.
If old notes have been tendered under the procedure for book-entry transfer
described above, any notice of withdrawal must specify the name and number of
the account at DTC to be credited with the withdrawn old notes and otherwise
comply with the procedures of DTC.
We will determine in our sole discretion all questions as to the validity,
form, eligibility and time of receipt of notice of withdrawal, and our
determination will be final and binding on all parties. We will deem any old
notes so withdrawn not to have been validly tendered for exchange for purposes
of the exchange offer.
Any old notes that have been tendered for exchange but that are not
exchanged for any reason will be returned to their holder without cost to the
holder or, in the case of old notes tendered by book-entry transfer into the
22
exchange agent's account at DTC according to the procedures described above,
such old notes will be credited to an account maintained with DTC for the old
notes. This return or crediting will take place as soon as practicable after
withdrawal. You may retender properly withdrawn old notes by following one of
the procedures described under "--Procedures for Tendering" above at any time on
or prior to the expiration date.
FEES AND EXPENSES
We will bear the expenses of soliciting tenders. The principal solicitation
is being made by mail; however, we may make additional solicitation by
facsimile, email, telephone or in person by our officers and regular employees
and those of our affiliates.
We have not retained any dealer-manager in connection with the exchange
offer and will not make any payments to broker-dealers or others soliciting
acceptances of the exchange offer. We will, however, pay the exchange agent
reasonable and customary fees for its services and reimburse it for its related
reasonable out-of-pocket expenses. We may also pay brokerage houses and other
custodians, nominees and fiduciaries the reasonable out-of-pocket expenses
incurred by them in forwarding copies of this prospectus, letters of transmittal
and related documents to the beneficial owners of the old notes and in handling
or forwarding tenders for exchange.
We will pay the cash expenses to be incurred in connection with the
exchange offer. They include:
- SEC registration fees;
- fees and expenses of the exchange agent and trustee;
- accounting and legal fees and printing costs; and
- related fees and expenses.
TRANSFER TAXES
We will pay all transfer taxes, if any, applicable to the exchange of old
notes in the exchange offer. The tendering holder will, however, be required to
pay any transfer taxes, whether imposed on the registered holder or any other
person, if:
- certificates representing new notes or old notes for principal amounts
not tendered or accepted for exchange are to be delivered to, or are
to be issued in the name of, any person other than the registered
holder of old notes tendered;
- tendered old notes are registered in the name of any person other than
the person signing the letter of transmittal; or
- a transfer tax is imposed for any reason other than the exchange of
old notes in the exchange offer.
If satisfactory evidence of payment of any transfer taxes payable by a tendering
holder is not submitted with the letter of transmittal, the amount of such
transfer taxes will be billed directly to that tendering holder. The exchange
agent will retain possession of new notes with a face amount equal to the amount
of the transfer taxes due until it receives payment of the taxes.
CONSEQUENCES OF FAILURE TO EXCHANGE
If you do not tender your old notes for new notes in the exchange offer, or
if you tender your old notes but subsequently withdraw them, your old notes will
remain outstanding and continue to accrue interest, but will not retain any
rights under the registration rights agreement (except in limited circumstances
involving the initial purchasers and specified broker-dealers) or accrue
additional interest under that agreement. IN ADDITION, YOU WILL
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REMAIN SUBJECT TO THE EXISTING RESTRICTIONS ON TRANSFER OF THE OLD NOTES. IN
GENERAL, YOU MAY NOT OFFER OR SELL THE OLD NOTES UNLESS EITHER THEY ARE
REGISTERED UNDER THE SECURITIES ACT OR THE OFFER OR SALE IS EXEMPT FROM OR NOT
SUBJECT TO REGISTRATION UNDER THE SECURITIES ACT AND APPLICABLE STATE SECURITIES
LAWS. Except as required by the registration rights agreement, we do not intend
to register resales of the old notes under the Securities Act.
THE TENDER OF OLD NOTES OF A SERIES IN THE EXCHANGE OFFER WILL REDUCE THE
PRINCIPAL AMOUNT OF THE OLD NOTES OF THAT SERIES OUTSTANDING. DUE TO THE
CORRESPONDING REDUCTION IN LIQUIDITY, THIS MAY HAVE AN ADVERSE EFFECT UPON, AND
INCREASE THE VOLATILITY OF, THE MARKET PRICE OF ANY OLD NOTES OF THAT SERIES
THAT YOU CONTINUE TO HOLD.
ACCOUNTING TREATMENT
We will not recognize a gain or loss for accounting purposes upon the
consummation of the exchange offer. We will amortize our expenses of each
exchange offer over the term of the applicable series of new notes under U.S.
generally accepted accounting principles.
OTHER
Participation in the exchange offer is voluntary, and you should carefully
consider whether to accept. You are urged to consult your financial and tax
advisors in making your decision on what action to take. In the future, we may
seek to acquire untendered old notes in open market or privately negotiated
transactions, through subsequent exchange offers or otherwise. We have no
present plan to acquire any old notes that are not tendered in the exchange
offer or to file a registration statement to permit resales of any untendered
old notes, except as required by the registration rights agreement.
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DESCRIPTION OF THE NOTES
We will issue the new notes, and we issued the old notes, under an
indenture, dated as of October 9, 2002, among ConocoPhillips, as issuer, Conoco
and Phillips, as guarantors, and The Bank of New York, as trustee. The notes are
ConocoPhillips' general unsecured obligations and are fully and unconditionally
guaranteed by Conoco and Phillips on a senior unsecured basis. We have
summarized material provisions of the indenture, the notes and the guarantees
below. This summary is not complete. We have filed the indenture as an exhibit
to the registration statement, and you should read the indenture for provisions
that may be important to you.
The old notes of a series, the new notes of that series issued in the
exchange offer and any debt securities of that series issued in the private
exchange described below under "Registration Rights Agreements" will together
constitute a separate single series of securities under the indenture. If the
exchange offer for notes of a series is consummated, holders of old notes of
that series who do not exchange their old notes for either new notes of that
series in the exchange offer or debt securities of that series in the private
exchange will vote together with holders of that series of new notes and private
exchange notes for all relevant purposes under the indenture. Accordingly, in
determining whether the required holders have given any notice, consent or
waiver or taken any other action permitted under the indenture, any old notes
that remain outstanding after the applicable exchange offer or private exchange
will be aggregated with the applicable series of new notes and private exchange
notes, and the holders of those old notes, new notes and private exchange notes
will vote together as a single series.
In this summary description of the notes, unless we state otherwise or the
context clearly indicates otherwise, all references to ConocoPhillips mean
ConocoPhillips only, all references to Conoco mean Conoco Inc. only and all
references to Phillips mean Phillips Petroleum Company only.
GENERAL
The 3.625% Notes due 2007 will mature on October 15, 2007, and will bear
interest at 3.625% per year. The 4.75% Notes due 2012 will mature on October 15,
2012, and will bear interest at 4.75% per year. The 5.90% Notes due 2032 will
mature on October 15, 2032, and will bear interest at 5.90% per year. Interest
on the notes will accrue from October 9, 2002. ConocoPhillips:
- will pay interest semiannually on April 15 and October 15 of each
year, commencing April 15, 2003;
- will pay interest to the person in whose name a note is registered at
the close of business on the April 1 or October 1 immediately
preceding the interest payment date;
- will compute interest on the basis of a 360-day year consisting of
twelve 30-day months;
- will make payments on the notes at the offices of the trustee and any
paying agent; and
- may make payments by wire transfer for notes held in book-entry form
or by check mailed to the address of the person entitled to the
payment as it appears in the security register.
ConocoPhillips will issue the notes only in fully registered form, without
coupons, in denominations of $1,000 and any integral multiple of $1,000. The
notes will not be subject to any sinking fund or mandatory redemption
provisions.
The 3.625% Notes due 2007 are limited to $400 million in aggregate
principal amount, the 4.75% Notes due 2012 are limited to $1,000 million in
aggregate principal amount and the 5.90% Notes due 2032 are limited to $600
million in aggregate principal amount. We may, however, "reopen" each series of
notes and issue an unlimited principal amount of additional notes of that series
in the future without the consent of the holders. We may reopen a series of
notes only if the additional notes issued will be fungible with the original
notes of the series for United States federal income tax purposes.
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The indenture does not limit the amount of debt that ConocoPhillips may
issue under the indenture, nor the amount of other unsecured debt or securities
that ConocoPhillips may issue. ConocoPhillips may issue debt securities under
the indenture from time to time in one or more series, each in an amount
authorized prior to issuance. Other than the restrictions on liens and
sale/leaseback transactions described below under "-- Restrictive Covenants,"
the indenture does not contain any covenants or other provisions designed to
protect holders of the notes in the event ConocoPhillips participates in a
highly leveraged transaction or upon a change of control. The indenture also
does not contain provisions that give holders the right to require
ConocoPhillips to repurchase their notes in the event of a decline in
ConocoPhillips' credit ratings for any reason, including as a result of a
takeover, recapitalization or similar restructuring or otherwise.
REDEMPTION
The notes of each series will be redeemable at ConocoPhillips' option, in
whole or in part, at any time and from time to time, in principal amounts of
$1,000 or any integral multiple of $1,000 for an amount equal to:
- 100% of the principal amount of the notes of that series to be
redeemed; and
- a premium equal to the amount, if any, by which the sum of the present
values of the Remaining Scheduled Payments on the notes being
redeemed, discounted to the redemption date on a semiannual basis
(assuming a 360-day year consisting of twelve 30-day months) at the
Treasury Rate plus 15 basis points for the 3.625% Notes due 2007, 20
basis points for the 4.75% Notes due 2012 and 20 basis points for the
5.90% Notes due 2032, exceeds the principal amount of the notes to be
redeemed.
In each case, ConocoPhillips will pay accrued interest to the date of
redemption.
"Treasury Rate" means the rate per year equal to:
- the yield, under the heading that represents the average for the
immediately preceding week, appearing in the most recently published
statistical release designated "H.15 (519)" or any successor
publication which is published weekly by the Board of Governors of the
Federal Reserve System and which establishes yields on actively traded
United States Treasury securities adjusted to constant maturity under
the caption "Treasury Constant Maturities," for the maturity
corresponding to the Comparable Treasury Issue; provided that if no
maturity is within three months before or after the maturity date for
the applicable series of notes, yields for the two published
maturities most closely corresponding to the Comparable Treasury Issue
will be determined and the Treasury Rate will be interpolated or
extrapolated from those yields on a straight line basis rounding to
the nearest month; or
- if that release, or any successor release, is not published during the
week preceding the calculation date or does not contain such yields,
the rate per year equal to the semiannual equivalent yield to maturity
of the Comparable Treasury Issue, calculated using a price for the
Comparable Treasury Issue (expressed as a percentage of its principal
amount) equal to the Comparable Treasury Price for that redemption
date.
The Treasury Rate will be calculated on the third business day preceding
the redemption date.
"Comparable Treasury Issue" means the United States Treasury security
selected by an Independent Investment Banker that would be used, at the time of
selection and in accordance with customary financial practice, in pricing new
issues of corporate debt securities of comparable maturity to the remaining term
of the applicable series of notes. "Independent Investment Banker" means one of
the Reference Treasury Dealers that we appoint.
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"Comparable Treasury Price" means (a) the average of the Reference Treasury
Dealer Quotations for the redemption date, after excluding the highest and
lowest of such Reference Treasury Dealer Quotations, or (b) if the trustee
obtains fewer than four such Reference Treasury Dealer Quotations, the average
of all quotations obtained.
"Reference Treasury Dealer" means each of Banc of America Securities LLC
(and its successors), J.P. Morgan Securities Inc. (and its successors), Salomon
Smith Barney Inc. (and its successors) and one other nationally recognized
investment banking firm that is a primary U.S. Government securities dealer
specified from time to time by us. If, however, any of them shall cease to be a
primary U.S. Government securities dealer, we will substitute another nationally
recognized investment banking firm that is such a dealer.
"Reference Treasury Dealer Quotations" means, with respect to each
Reference Treasury Dealer and any redemption date, the average, as determined by
the trustee, of the bid and asked prices for the Comparable Treasury Issue
(expressed in each case as a percentage of its principal amount) quoted in
writing to the trustee by such Reference Treasury Dealer as of 3:30 p.m., New
York time, on the third business day preceding the redemption date.
"Remaining Scheduled Payments" means the remaining scheduled payments of
the principal of and interest on each note to be redeemed that would be due
after the related redemption date but for such redemption. If the redemption
date is not an interest payment date with respect to the note being redeemed,
the amount of the next succeeding scheduled interest payment on the note will be
reduced by the amount of interest accrued thereon to that redemption date.
We will mail notice of a redemption not less than 30 days nor more than 60
days before the redemption date to holders of notes to be redeemed. As long as
those notes are listed on the Luxembourg Stock Exchange, we also will publish
notice in the Luxemburger Wort or another newspaper of general circulation in
Luxembourg.
If ConocoPhillips is redeeming less than all the notes of a series, the
trustee will select the particular notes of the series to be redeemed pro rata,
by lot or by another method the trustee deems fair and appropriate. Unless there
is a default in payment of the redemption amount, on and after the redemption
date, interest will cease to accrue on the notes or portions thereof called for
redemption. If ConocoPhillips redeems less than all the notes of a series,
ConocoPhillips will notify the Luxembourg Stock Exchange of the aggregate
principal amount of the notes of that series that remains outstanding after the
redemption. ConocoPhillips will pay 100% of the principal amount of the notes of
each series at the maturity of those notes.
Except as described above, the notes will not be redeemable by
ConocoPhillips prior to maturity and will not be entitled to the benefit of any
sinking fund.
GUARANTEE
Conoco and Phillips will each fully and unconditionally guarantee on a
senior unsecured basis the full and prompt payment of the principal of and any
premium and interest on the notes when and as the payment becomes due and
payable, whether at maturity or otherwise. The guarantees provide that in the
event of a default in the payment of principal of or any premium or interest on
a note, the holder of the note may institute legal proceedings directly against
Conoco and Phillips to enforce the guarantees without first proceeding against
ConocoPhillips.
RANKING
In connection with the combination of Conoco and Phillips, and to simplify
the companies' credit structure, ConocoPhillips and Conoco have fully and
unconditionally guaranteed the payment obligations of Phillips with respect to
its publicly held debt securities, and ConocoPhillips and Phillips have fully
and unconditionally guaranteed the payment obligations of Conoco and Conoco
Funding Company, Conoco's wholly owned finance subsidiary, with respect to the
publicly held debt securities of Conoco and the publicly held debt securities of
Conoco Funding Company fully and unconditionally guaranteed by Conoco.
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The notes will constitute senior debt of ConocoPhillips and will rank
equally with its senior unsecured debt from time to time outstanding, including
its guarantees of the debt of Conoco and Phillips; senior to its subordinated
debt from time to time outstanding; and effectively junior to its secured debt
and to all debt and other liabilities of its subsidiaries other than Conoco and
Phillips from time to time outstanding. Each of Conoco's and Phillips'
guarantees will rank equally with all of its senior unsecured debt from time to
time outstanding, including its guarantee of the debt of the other; senior to
its subordinated debt from time to time outstanding; and effectively junior to
its secured debt and to all debt and other liabilities of its subsidiaries from
time to time outstanding.
Each of ConocoPhillips and Conoco conducts substantially all its operations
through subsidiaries, and those subsidiaries generate substantially all its
operating income and cash flow. As a result, distributions or advances from
those subsidiaries are the principal source of funds necessary to meet the debt
service obligations of ConocoPhillips and Conoco. Contractual provisions or
laws, as well as the subsidiaries' financial condition and operating
requirements, may limit the ability of each of ConocoPhillips and Conoco to
obtain cash from its subsidiaries that it requires to pay its debt service
obligations, including any payments required to be made under the notes and
Conoco's related guarantee.
As of June 30, 2002, on a pro forma basis giving effect to the combination
of Conoco and Phillips and as further adjusted to give effect to the issuance of
the notes and the application of all the net proceeds to repay Conoco's floating
rate notes and to reduce outstanding commercial paper, ConocoPhillips would have
had an aggregate of $19.2 billion of consolidated long-term debt. Approximately
$14.8 billion would have ranked equally in right of payment with the notes.
Approximately $2.4 billion would have been secured or owed by subsidiaries other
than Conoco or Phillips and therefore effectively senior to the notes with
respect to the assets securing the debt or the assets of the subsidiary obligor.
RESTRICTIVE COVENANTS
ConocoPhillips has agreed to two principal restrictions on its activities
for the benefit of holders of the notes. The restrictive covenants summarized
below will apply to the notes of each series (unless waived or amended) as long
as the notes of that series are outstanding. We have used in this summary
description capitalized terms that we have defined below under "-- Glossary."
LIMITATION ON LIENS
ConocoPhillips has agreed that it and its Principal Domestic Subsidiaries
will issue, assume or guarantee Debt for borrowed money secured by a lien upon a
Principal Property or shares of stock or Debt of any Principal Domestic
Subsidiary only if the outstanding notes and all other debt securities issued
under the indenture are secured equally and ratably with or prior to the Debt
secured by that lien. If the notes and such other debt securities are so
secured, ConocoPhillips has the option to secure any of its and its
Subsidiaries' other Debt or obligations equally and ratably with or prior to the
Debt secured by the lien and, accordingly, equally and ratably with the notes.
This covenant has exceptions that permit:
(a) liens existing on the date we first issued the notes;
(b) liens on the property, assets, stock, equity or Debt of any entity
existing at the time ConocoPhillips or a Subsidiary acquires that entity or
its property or at the time the entity becomes a Subsidiary or a Principal
Domestic Subsidiary;
(c) liens on assets either:
- existing at the time of acquisition of the assets;
- securing all or part of the cost of acquiring, constructing,
improving, developing or expanding the assets; or
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- securing Debt incurred to finance all or part of the purchase
price of the assets or the cost of constructing, improving,
developing or expanding the assets that was incurred before, at
the time of or within two years after the later of the
acquisition, the completion of construction, improvement,
development or expansion or the commencement of commercial
operation of the assets;
(d) liens on specific assets to secure Debt incurred to provide funds
for the cost of exploration, drilling or development of those assets;
(e) intercompany liens;
(f) liens securing industrial development, pollution control or other
revenue bonds of a domestic government entity;
(g) liens on personal property, other than shares of stock or debt of
any Principal Domestic Subsidiary, securing loans maturing in less than one
year;
(h) liens on a Principal Property arising in connection with the sale
of accounts receivable resulting from the sale of oil or gas at the
wellhead;
(i) statutory or other liens arising in the ordinary course of
business and relating to amounts that are not yet delinquent or are being
contested in good faith; and
(j) any extensions, substitutions, replacements or renewals of the
above-described liens or any Debt secured by these liens if both:
- the new lien is limited to the property (plus any improvements)
secured by the original lien; and
- the amount of Debt secured by the new lien and not otherwise
permitted does not materially exceed the amount of Debt
refinanced plus any premium or fee payable in connection with any
such extension, substitution, replacement or renewal.
In addition, without securing the notes and all other debt securities
issued under the indenture as described above, ConocoPhillips and its Principal
Domestic Subsidiaries may issue, assume or guarantee Debt that this covenant
would otherwise restrict in a total principal amount that, when added to all
other outstanding Debt of ConocoPhillips and its Principal Domestic Subsidiaries
that this covenant would otherwise restrict and the total amount of Attributable
Debt outstanding for Sale/Leaseback Transactions, does not exceed a "basket"
equal to 10% of Consolidated Adjusted Net Assets. When calculating this total
principal amount, we exclude from the calculation Attributable Debt from
Sale/Leaseback Transactions in connection with which ConocoPhillips or a
Subsidiary has purchased property or retired or defeased Debt as described in
clause (b) below under "Limitation on Sale/Leaseback Transactions."
The following types of transactions do not create "Debt" secured by "liens"
within the meaning of this covenant:
(a) the sale or other transfer of either:
- oil, gas or other minerals in place for a period of time until,
or in an amount such that, the purchaser will realize from those
minerals a specified amount of money or a specified amount of
those minerals; or
- any other interest in property commonly referred to as a
"production payment"; and
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(b) the mortgage or pledge of any property of ConocoPhillips or a
Subsidiary in favor of the United States, any state of the United States or
any department, agency or instrumentality of either, to secure payments
under any contract or statute.
LIMITATION ON SALE/LEASEBACK TRANSACTIONS
ConocoPhillips has agreed that it and any of its Principal Domestic
Subsidiaries will enter into a Sale/Leaseback Transaction only if at least one
of the following applies:
(a) ConocoPhillips or that Principal Domestic Subsidiary could incur
Debt in a principal amount equal to the Attributable Debt for that
Sale/Leaseback Transaction and, without violating the "Limitation on Liens"
covenant, could secure that Debt by a lien on the property to be leased
without equally and ratably securing the notes.
(b) Within the period beginning one year before the closing of the
Sale/Leaseback Transaction and ending one year after the closing,
ConocoPhillips or any Subsidiary applies the net proceeds of the
Sale/Leaseback Transaction either:
- to the voluntary defeasance or retirement of the notes, any other
debt securities issued under the indenture or any Funded Debt; or
- to the acquisition, exploration, drilling, development,
construction, improvement or expansion of one or more Principal
Properties.
Any net proceeds that are not applied for the purposes described in (b)
will be subject to the limitation described in (a). For purposes of these
calculations, the net proceeds of the Sale/ Leaseback Transaction means the
net proceeds of the sale or transfer of the property leased in the
Sale/Leaseback Transaction (or, if greater, the fair value of that property
at the time of the Sale/ Leaseback Transaction as determined by
ConocoPhillips' board of directors).
GLOSSARY
"Attributable Debt" means the present value of the rental payments during
the remaining term of the lease included in the Sale/Leaseback Transaction. To
determine that present value, we use a discount rate equal to the lease rate of
the Sale/Leaseback Transaction. For these purposes, rental payments do not
include any amounts required to be paid for taxes, maintenance, repairs,
insurance, assessments, utilities, operating and labor costs and other items
that do not constitute payments for property rights. In the case of any lease
that the lessee may terminate by paying a penalty, if the net amount (including
payment of the penalty) would be reduced if the lessee terminated the lease on
the first date that it could be terminated, then this lower net amount will be
used.
"Consolidated Adjusted Net Assets" means the total amount of assets of
ConocoPhillips and its consolidated subsidiaries less:
- all current liabilities (excluding liabilities that are extendable or
renewable at ConocoPhillips' option to a date more than 12 months
after the date of calculation and excluding current maturities of
long-term debt); and
- total prepaid expenses and deferred charges.
ConocoPhillips will calculate its Consolidated Adjusted Net Assets based on its
most recent quarterly balance sheet.
"Debt" means all notes, bonds, debentures or similar evidences of debt for
money borrowed.
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"Funded Debt" means all Debt that matures on or is renewable to a date more
than one year after the date the Debt is incurred.
"Principal Domestic Subsidiary" means each of Conoco, Phillips and any
Subsidiary (1) that has substantially all its assets in the United States, (2)
that owns a Principal Property and (3) in which ConocoPhillips' capital
investment, together with any intercompany loans to that Subsidiary and any debt
of that Subsidiary guaranteed by ConocoPhillips or any other Subsidiary, exceeds
$100 million.
"Principal Property" means any oil or gas producing property located
onshore or offshore of the United States or any refinery or manufacturing plant
located in the United States. This term excludes any property, refinery or plant
that in the opinion of ConocoPhillips' board of directors is not materially
important to the total business conducted by ConocoPhillips and its consolidated
subsidiaries. This term also excludes any transportation or marketing facilities
or assets.
"Sale/Leaseback Transaction" means any arrangement with anyone under which
ConocoPhillips or a Subsidiary leases any Principal Property that ConocoPhillips
or that Subsidiary has sold or transferred or will sell or transfer to that
person. This term excludes the following:
- temporary leases for a term of not more than three years;
- intercompany leases;
- leases of a Principal Property executed by the time of or within 12
months after the latest of the acquisition, the completion of
construction or improvement, or the commencement of commercial
operation of the Principal Property; and
- arrangements under any provision of law with an effect similar to the
former Section 168(f)(8) of the Internal Revenue Code of 1954.
"Subsidiary" means an entity at least a majority of the outstanding voting
stock of which is owned, directly or indirectly, by ConocoPhillips or by one or
more other Subsidiaries, or by ConocoPhillips and one or more other
Subsidiaries.
CONSOLIDATION, MERGER AND SALE OF ASSETS
The indenture generally permits a consolidation or merger involving
ConocoPhillips, Conoco or Phillips. It also permits ConocoPhillips, Conoco or
Phillips to lease, transfer or dispose of all or substantially all of its
assets. Each of ConocoPhillips, Conoco and Phillips has agreed, however, that it
will not consolidate with or merge into any entity (other than ConocoPhillips,
Conoco or Phillips, as applicable) or lease, transfer or dispose of all or
substantially all of its assets to any entity (other than ConocoPhillips, Conoco
or Phillips, as applicable) unless:
- it is the continuing corporation; or
- if it is not the continuing corporation, the resulting entity or
transferee is organized and existing under the laws of any United
States jurisdiction and assumes the performance of its covenants and
obligations under the indenture and, in the case of ConocoPhillips,
the due and punctual payments on the notes or, in the case of Conoco
or Phillips, the performance of the related guarantee; and
- in either case, immediately after giving effect to the transaction, no
default or event of default would occur and be continuing or would
result from the transaction.
Upon any such consolidation, merger or asset lease, transfer or
disposition, the resulting entity or transferee will be substituted for
ConocoPhillips, Conoco or Phillips, as applicable, under the indenture and
notes. In the case
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of an asset transfer or disposition other than a lease, ConocoPhillips, Conoco
or Phillips, as applicable, will be released from the indenture.
EVENTS OF DEFAULT
The following are events of default with respect to a series of notes:
- failure to pay interest on that series of notes for 30 days when due;
- failure to pay principal of or any premium on that series of notes
when due;
- failure to comply with any covenant or agreement in that series of
notes or the indenture (other than an agreement or covenant that has
been included in the indenture solely for the benefit of other series
of debt securities issued under the indenture) for 90 days after
written notice by the trustee or by the holders of at least 25% in
principal amount of the outstanding debt securities issued under the
indenture that are affected by that failure;
- specified events involving bankruptcy, insolvency or reorganization of
ConocoPhillips, Conoco or Phillips.
A default under one series of notes will not necessarily be a default under
the other series or any other series of debt securities issued under the
indenture. The trustee may withhold notice to the holders of the notes of any
default or event of default (except in any payment on the notes) if the trustee
considers it in the interest of the holders to do so.
If an event of default for any series of notes occurs and is continuing,
the trustee or the holders of at least 25% in principal amount of the
outstanding notes of the series affected by the default (or, in some cases, 25%
in principal amount of all debt securities issued under the indenture that are
affected, voting as one class) may declare the principal of and all accrued and
unpaid interest on those notes (or debt securities) to be due and payable. If an
event of default relating to certain events of bankruptcy, insolvency or
reorganization occurs, the principal of and interest on all the debt securities
issued under the indenture, including the notes, will become immediately due and
payable without any action on the part of the trustee or any holder. The holders
of a majority in principal amount of the outstanding notes of the series
affected by the default (or, in some cases, of all debt securities issued under
the indenture that are affected, voting as one class) may in some cases rescind
this accelerated payment requirement.
A holder of a note of any series may pursue any remedy under the indenture
only if:
- the holder gives the trustee written notice of a continuing event of
default for that series;
- the holders of at least 25% in principal amount of the outstanding
notes of that series make a written request to the trustee to pursue
the remedy;
- the holders offer to the trustee indemnity satisfactory to the
trustee;
- the trustee fails to act for a period of 60 days after receipt of the
request and offer of indemnity; and
- during that 60-day period, the holders of a majority in principal
amount of the notes of that series do not give the trustee a direction
inconsistent with the request.
This provision does not, however, affect the right of a holder of a note to sue
for enforcement of any overdue payment.
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In most cases, holders of a majority in principal amount of the outstanding
notes of a series (or of all debt securities issued under the indenture that are
affected, voting as one class) may direct the time, method and place of:
- conducting any proceeding for any remedy available to the trustee; and
- exercising any trust or power conferred on the trustee relating to or
arising as a result of an event of default.
The indenture requires ConocoPhillips, Conoco and Phillips to file each
year with the trustee a written statement as to their compliance with the
covenants contained in the indenture.
MODIFICATION AND WAIVER
The indenture may be amended or supplemented if the holders of a majority
in principal amount of the outstanding notes and all other series of debt
securities issued under the indenture that are affected by the amendment or
supplement (acting as one class) consent to it. Without the consent of each
holder of a note, however, no modification may:
- reduce the amount of notes whose holders must consent to an amendment,
supplement or waiver;
- reduce the rate of or change the time for payment of interest on the
note;
- reduce the principal of the note or change its stated maturity;
- reduce any premium payable on the redemption of the note or change the
time at which the note may be redeemed;
- make payments on the notes payable in currency other than U.S.
dollars;
- impair the holder's right to institute suit for the enforcement of any
payment on or with respect to the note;
- make any change in the percentage of principal amount of notes
necessary to waive compliance with certain provisions of the indenture
or to make any change in the provision related to modification; or
- waive a continuing default or event of default regarding any payment
on the notes.
The indenture may be amended or supplemented or any provision of the
indenture may be waived without the consent of any holders of notes in certain
circumstances, including:
- to cure any ambiguity, omission, defect or inconsistency;
- to provide for the assumption of the obligations under the indenture
of ConocoPhillips, Conoco or Phillips by a successor upon any merger,
consolidation or asset transfer permitted under the indenture;
- to provide for uncertificated notes in addition to or in place of
certificated notes or to provide for bearer notes;
- to provide any security for, any guarantees of or any additional
obligors on any series of the notes or the related guarantees;
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- to comply with any requirement to effect or maintain the qualification
of the indenture under the Trust Indenture Act of 1939;
- to add covenants that would benefit the holders of any series of notes
or to surrender any rights ConocoPhillips, Conoco or Phillips has
under the indenture;
- to add events of default with respect to any series of notes; and
- to make any change that does not adversely affect any outstanding
notes of any series in any material respect.
The holders of a majority in principal amount of the outstanding notes of
any series (or, in some cases, of all debt securities issued under the indenture
that are affected, voting as one class) may waive any existing or past default
or event of default with respect to those notes (or debt securities). Those
holders may not, however, waive any default or event of default in any payment
on any note or compliance with a provision that cannot be amended or
supplemented without the consent of each holder affected.
DEFEASANCE
When we use the term defeasance, we mean discharge from some or all of our
obligations under the indenture. If any combination of funds or government
securities are deposited with the trustee sufficient to make payments on the
notes of a series on the dates those payments are due and payable, then, at
ConocoPhillips' option, either of the following will occur:
- ConocoPhillips, Conoco and Phillips will be discharged from their
obligations with respect to the notes of that series and the related
guarantees ("legal defeasance"); or
- ConocoPhillips, Conoco and Phillips will no longer have any obligation
to comply with the restrictive covenants, the merger covenant and
other specified covenants under the indenture, and the related events
of default will no longer apply ("covenant defeasance").
If a series of notes is defeased, the holders of the notes of that series
will not be entitled to the benefits of the indenture, except for obligations to
register the transfer or exchange of notes, replace stolen, lost or mutilated
notes or maintain paying agencies and hold moneys for payment in trust. In the
case of covenant defeasance, the obligation of ConocoPhillips to pay principal,
premium and interest on the notes and Conoco's and Phillips' guarantees of the
payments will also survive.
We will be required to deliver to the trustee an opinion of counsel that
the deposit and related defeasance would not cause the holders of the notes to
recognize income, gain or loss for U.S. federal income tax purposes. If we elect
legal defeasance, that opinion of counsel must be based upon a ruling from the
U.S. Internal Revenue Service or a change in law to that effect.
GOVERNING LAW
New York law will govern the indenture and the notes.
TRUSTEE
The Bank of New York is the trustee under the indenture. The Bank of New
York also serves as trustee or custodian relating to approximately $2.7 billion
of debt, trust preferred securities and other long-term repayment obligations of
subsidiaries of ConocoPhillips as of June 30, 2002. The Bank of New York and its
affiliates perform certain commercial banking services for us for which they
receive customary fees and are lenders under various outstanding credit
facilities of subsidiaries of ConocoPhillips.
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If an event of default occurs under the indenture and is continuing, the
trustee will be required to use the degree of care and skill of a prudent person
in the conduct of that person's own affairs. The trustee will become obligated
to exercise any of its powers under the indenture at the request of any of the
holders of the notes only after those holders have offered the trustee indemnity
reasonably satisfactory to it.
The indenture contains limitations on the right of the trustee, if it
becomes a creditor of ConocoPhillips, Conoco or Phillips, to obtain payment of
claims or to realize on certain property received for any such claim, as
security or otherwise. The trustee is permitted to engage in other transactions
with ConocoPhillips, Conoco and Phillips. If, however, it acquires any
conflicting interest, it must eliminate that conflict or resign within 90 days
after ascertaining that it has a conflicting interest and after the occurrence
of a default under the indenture, unless the default has been cured, waived or
otherwise eliminated within the 90-day period.
EXCHANGE, REGISTRATION AND TRANSFER
Notes of any series will be exchangeable for other notes of the same
series, the same total principal amount and the same terms but in different
authorized denominations in accordance with the indenture. Holders may present
notes for registration of transfer at the office of the security registrar or
any transfer agent ConocoPhillips designates, including any transfer agent in
Luxembourg. The security registrar or transfer agent will effect the transfer or
exchange if its requirements and the requirements of the indenture are met.
There will be no service charge for any registration of transfer or exchange of
the notes. However, payment of any transfer tax or similar governmental charge
payable for that registration may be required.
The trustee has been appointed as security registrar for the notes.
ConocoPhillips is required to maintain an office or agency for transfers and
exchanges in each place of payment. In addition, as long as a series of notes is
listed on the Luxembourg Stock Exchange, ConocoPhillips will maintain a transfer
agent for that series in Luxembourg. ConocoPhillips may at any time designate
additional transfer agents for any series of notes.
In the case of any redemption, ConocoPhillips will not be required to
register the transfer or exchange of:
- any note during a period beginning 15 business days prior to the
mailing of the relevant notice of redemption or repurchase and ending
on the close of business on the day of mailing of such notice; or
- any note that has been called for redemption in whole or in part,
except the unredeemed portion of any note being redeemed in part.
NOTICES
We will mail notices and communications to the holder's address shown on
the register of the notes. In addition, as long as a series of notes is listed
on the Luxembourg Stock Exchange, we will publish notices for that series in the
Luxemburger Wort or another newspaper of general circulation in Luxembourg.
PAYMENT AND PAYING AGENTS
The trustee has been appointed as paying agent for the notes. As long as a
series of notes is listed on the Luxembourg Stock Exchange, ConocoPhillips also
will maintain a paying agent for that series in Luxembourg. Payments on the
notes will be made in U.S. dollars at the office of the trustee and any paying
agent, including any paying agent in Luxembourg. At ConocoPhillips' option,
however, payments may be made by wire transfer for notes held in book-entry form
or by check mailed to the address of the person entitled to the payment as it
appears in the security register. ConocoPhillips may at any time designate
additional paying agents or rescind the designation of any paying agent or
approve a change in the office through which any paying agent acts.
If the principal of or any premium or interest on the notes is payable on a
day that is not a business day, the payment will be made on the following
business day. For these purposes, a "business day" is any day that is not a
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Saturday, a Sunday or a day on which banking institutions in any of New York,
New York; Houston, Texas or a place of payment on the notes is authorized or
obligated by law, regulation or executive order to remain closed.
Subject to the requirements of any applicable abandoned property laws, the
trustee and paying agent will pay to us upon written request any money held by
them for payments on the notes that remains unclaimed for two years after the
date upon which that payment has become due. After payment to us, holders
entitled to the money must look to us for payment. In that case, all liability
of the trustee or paying agent with respect to that money will cease.
OTHER
We will make all payments on the notes without withholding or deducting any
taxes or other governmental charges imposed by a United States jurisdiction,
unless we are required to do so by applicable law. If we are required to
withhold taxes, we will not pay any additional, or gross up, amounts with
respect to the withholding or deduction.
We may at any time purchase notes on the open market or otherwise at any
price. We will surrender all notes that we redeem or purchase to the trustee for
cancellation. We may not reissue or resell any of these notes.
At any meeting of holders of the notes, the trustee may make reasonable
rules for action by or at that meeting. The registrar and any paying agent for
the notes also may make reasonable rules and set reasonable requirements for its
functions.
BOOK-ENTRY DELIVERY AND SETTLEMENT
We will issue the new notes of each series in the form of one or more
permanent global notes in definitive, fully registered, book-entry form. The
global notes will be deposited with or on behalf of The Depository Trust Company
and registered in the name of Cede & Co., as nominee of DTC, or will remain in
the custody of the trustee in accordance with the FAST Balance Certificate
Agreement between DTC and the trustee.
Beneficial interests in the global notes will be represented through
book-entry accounts of financial institutions acting on behalf of beneficial
owners as direct and indirect participants in DTC. Investors may elect to hold
interests in the global notes through either DTC (in the United States) or
Clearstream Banking, societe anonyme, Luxembourg, or Euroclear Bank S.A./N.V.
(the "Euroclear Operator"), as operator of the Euroclear System (in Europe),
either directly if they are participants of such systems or indirectly through
organizations that are participants in such systems. Clearstream and Euroclear
will hold interests on behalf of their participants through customers'
securities accounts in Clearstream's and Euroclear's names on the books of their
U.S. depositaries, which in turn will hold such interests in customers'
securities accounts in the U.S. depositaries' names on the books of DTC.
Citibank, N.A. will act as the U.S. depositary for Clearstream, and JPMorgan
Chase Bank will act as the U.S. depositary for Euroclear.
DTC has advised us as follows:
- DTC is a limited-purpose trust company organized under the New York
Banking Law, a "banking organization" within the meaning of the New
York Banking Law, a member of the Federal Reserve System, a "clearing
corporation" within the meaning of the New York Uniform Commercial
Code and a "clearing agency" registered under Section 17A of the
Securities Exchange Act of 1934.
- DTC holds securities that its participants deposit with DTC and
facilitates the settlement among participants of securities
transactions, such as transfers and pledges, in deposited securities
through electronic computerized book-entry changes in participants'
accounts, thereby eliminating the need for physical movement of
securities certificates.
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- Direct participants include securities brokers and dealers, banks,
trust companies, clearing corporations and other organizations.
- DTC is owned by a number of its direct participants and by The New
York Stock Exchange, Inc., the American Stock Exchange LLC and the
National Association of Securities Dealers, Inc.
- Access to the DTC system is also available to others such as
securities brokers and dealers, banks and trust companies that clear
through or maintain a custodial relationship with a direct
participant, either directly or indirectly.
- The rules applicable to DTC and its direct and indirect participants
are on file with the SEC.
Clearstream has advised us that it is incorporated under the laws of
Luxembourg as a professional depositary. Clearstream holds securities for its
customers and facilitates the clearance and settlement of securities
transactions between its customers through electronic book-entry changes in
accounts of its customers, thereby eliminating the need for physical movement of
certificates. Clearstream provides to its customers, among other things,
services for safekeeping, administration, clearance and settlement of
internationally traded securities and securities lending and borrowing.
Clearstream interfaces with domestic markets in several countries. As a
professional depositary, Clearstream is subject to regulation by the Luxembourg
Commission for the Supervision of the Financial Section. Clearstream customers
are recognized financial institutions around the world, including underwriters,
securities brokers and dealers, banks, trust companies, clearing corporations
and other organizations. Indirect access to Clearstream is also available to
others, such as banks, brokers, dealers and trust companies that clear through
or maintain a custodial relationship with a Clearstream customer either directly
or indirectly.
Euroclear has advised us that it was created in 1968 to hold securities for
participants of Euroclear and to clear and settle transactions between Euroclear
participants through simultaneous electronic book-entry delivery against
payment, thereby eliminating the need for physical movement of certificates and
any risk from lack of simultaneous transfers of securities and cash. Euroclear
provides various other services, including securities lending and borrowing and
interfaces with domestic markets in several countries. Euroclear is operated by
the Euroclear Operator under contract with Euroclear Clearance Systems S.C., a
Belgian cooperative corporation (the "Cooperative"). All operations are
conducted by the Euroclear Operator, and all Euroclear securities clearance
accounts and Euroclear cash accounts are accounts with the Euroclear Operator,
not the Cooperative. The Cooperative establishes policy for Euroclear on behalf
of Euroclear participants. Euroclear participants include banks (including
central banks), securities brokers and dealers and other professional financial
intermediaries. Indirect access to Euroclear is also available to other firms
that clear through or maintain a custodial relationship with a Euroclear
participant, either directly or indirectly.
The Euroclear Operator has advised us that it is licensed by the Belgian
Banking and Finance Commission to carry out banking activities on a global
basis. As a Belgian bank, it is regulated and examined by the Belgian Banking
Commission.
We have provided the descriptions of the operations and procedures of DTC,
Clearstream and Euroclear in this prospectus solely as a matter of convenience.
These operations and procedures are solely within the control of those
organizations and are subject to change by them from time to time. None of
ConocoPhillips, Conoco, Phillips or the trustee takes any responsibility for
these operations or procedures, and you are urged to contact DTC, Clearstream
and Euroclear or their participants directly to discuss these matters.
We expect that under procedures established by DTC:
- upon deposit of the global notes with DTC or its custodian, DTC will
credit on its internal system the accounts of direct participants
exchanging old notes for new notes with portions of the principal
amounts of the global notes; and
37
- ownership of the notes will be shown on, and the transfer of ownership
thereof will be effected only through, records maintained by DTC or
its nominee, with respect to interests of direct participants, and the
records of direct and indirect participants, with respect to interests
of persons other than participants.
The laws of some jurisdictions may require that purchasers of securities
take physical delivery of those securities in definitive form. Accordingly, the
ability to transfer interests in the notes represented by a global note to those
persons may be limited. In addition, because DTC can act only on behalf of its
participants, who in turn act on behalf of persons who hold interests through
participants, the ability of a person having an interest in notes represented by
a global note to pledge or transfer those interests to persons or entities that
do not participate in DTC's system, or otherwise to take actions in respect of
such interest, may be affected by the lack of a physical definitive security in
respect of such interest.
So long as DTC or its nominee is the registered owner of a global note, DTC
or that nominee will be considered the sole owner or holder of the notes
represented by that global note for all purposes under the indenture and under
the notes. Except as provided below, owners of beneficial interests in a global
note will not be entitled to have notes represented by that global note
registered in their names, will not receive or be entitled to receive physical
delivery of certificated notes and will not be considered the owners or holders
thereof under the indenture or under the notes for any purpose, including with
respect to the giving of any direction, instruction or approval to the trustee.
Accordingly, each holder owning a beneficial interest in a global note must rely
on the procedures of DTC and, if that holder is not a direct or indirect
participant, on the procedures of the participant through which that holder owns
its interest, to exercise any rights of a holder of notes under the indenture or
the global note.
Neither ConocoPhillips, Conoco, Phillips nor the trustee will have any
responsibility or liability for any aspect of the records relating to or
payments made on account of notes by DTC, Clearstream or Euroclear, or for
maintaining, supervising or reviewing any records of those organizations
relating to the notes.
Payments on the notes represented by the global notes will be made to DTC
or its nominee, as the case may be, as the registered owner thereof. We expect
that DTC or its nominee, upon receipt of any payment on the notes represented by
a global note, will credit participants' accounts with payments in amounts
proportionate to their respective beneficial interests in the global note as
shown in the records of DTC or its nominee. We also expect that payments by
participants to owners of beneficial interests in the global note held through
such participants will be governed by standing instructions and customary
practice as is now the case with securities held for the accounts of customers
registered in the names of nominees for such customers. The participants will be
responsible for those payments.
Distributions on the notes held beneficially through Clearstream will be
credited to cash accounts of its customers in accordance with its rules and
procedures, to the extent received by the U.S. depositary for Clearstream.
Securities clearance accounts and cash accounts with the Euroclear Operator are
governed by the Terms and Conditions Governing Use of Euroclear and the related
Operating Procedures of the Euroclear System, and applicable Belgian law
(collectively, the "Terms and Conditions"). The Terms and Conditions govern
transfers of securities and cash within Euroclear, withdrawals of securities and
cash from Euroclear, and receipts of payments with respect to securities in
Euroclear. All securities in Euroclear are held on a fungible basis without
attribution of specific certificates to specific securities clearance accounts.
The Euroclear Operator acts under the Terms and Conditions only on behalf of
Euroclear participants and has no record of or relationship with persons holding
through Euroclear participants.
Distributions on the notes held beneficially through Euroclear will be
credited to the cash accounts of its participants in accordance with the Terms
and Conditions, to the extent received by the U.S. depositary for Euroclear.
CLEARANCE AND SETTLEMENT PROCEDURES
Secondary market trading between DTC participants will occur in the
ordinary way in accordance with DTC rules and will be settled in immediately
available funds. Secondary market trading between Clearstream
38
customers and/or Euroclear participants will occur in the ordinary way in
accordance with the applicable rules and operating procedures of Clearstream and
Euroclear and will be settled using the procedures applicable to conventional
eurobonds in immediately available funds.
Cross-market transfers between persons holding directly or indirectly
through DTC, on the one hand, and directly or indirectly through Clearstream
customers or Euroclear participants, on the other, will be effected in DTC in
accordance with DTC rules on behalf of the relevant European international
clearing system by the U.S. depositary; however, such cross-market transactions
will require delivery of instructions to the relevant European international
clearing system by the counterparty in such system in accordance with its rules
and procedures and within its established deadlines (European time). The
relevant European international clearing system will, if the transaction meets
its settlement requirements, deliver instructions to the U.S. depositary to take
action to effect final settlement on its behalf by delivering or receiving the
notes in DTC, and making or receiving payment in accordance with normal
procedures for same-day funds settlement applicable to DTC. Clearstream
customers and Euroclear participants may not deliver instructions directly to
their U.S. depositaries.
Because of time-zone differences, credits of the notes received in
Clearstream or Euroclear as a result of a transaction with a DTC participant
will be made during subsequent securities settlement processing and dated the
business day following the DTC settlement date. Such credits or any transactions
in the notes settled during such processing will be reported to the relevant
Clearstream customers or Euroclear participants on such business day. Cash
received in Clearstream or Euroclear as a result of sales of the notes by or
through a Clearstream customer or a Euroclear participant to a DTC participant
will be received with value on the DTC settlement date but will be available in
the relevant Clearstream or Euroclear cash account only as of the business day
following settlement in DTC.
Although DTC, Clearstream and Euroclear have agreed to the foregoing
procedures to facilitate transfers of the notes among participants of DTC,
Clearstream and Euroclear, they are under no obligation to perform or continue
to perform such procedures and such procedures may be changed or discontinued at
any time.
CERTIFICATED NOTES
We will issue certificated notes to each person that DTC identifies as the
beneficial owner of the notes represented by the global notes upon surrender by
DTC of the global notes if either:
- DTC notifies us that it is no longer willing or able to act as a
depositary for the global notes, and we have not appointed a successor
depositary within 90 days of that notice;
- an event of default has occurred and is continuing, and DTC requests
the issuance of certificated notes; or
- we determine not to have the notes represented by a global note.
Neither we nor the trustee will be liable for any delay by DTC, its nominee
or any direct or indirect participant in identifying the beneficial owners of
the related notes. We and the trustee may conclusively rely on, and will be
protected in relying on, instructions from DTC or its nominee for all purposes,
including with respect to the registration and delivery, and the respective
principal amounts, of the notes to be issued.
If we issue certificated notes of a series listed on the Luxembourg Stock
Exchange, holders in Luxembourg may obtain certificates at the offices of the
paying agent and transfer agent for that series in Luxembourg. We will make
those certificates available in Luxembourg at the time we deliver certificates
to the trustee. If the notes are no longer represented by a global note and are
no longer deposited with a clearing system such as DTC, the Luxembourg Stock
Exchange has informed us that they will no longer list the notes.
39
REGISTRATION RIGHTS AGREEMENT
We have summarized material provisions of the registration rights agreement
below. This summary is not complete. We have filed the registration rights
agreement as an exhibit to the registration statement, and you should read the
agreement for provisions that may be important to you.
EXCHANGE OFFER REGISTRATION STATEMENT
In connection with the issuance of the old notes, we entered into a
registration rights agreement with the initial purchasers of the old notes. This
agreement provides that we will use our reasonable best efforts to:
- file a registration statement relating to an exchange offer for each
series of old notes with the SEC and cause the SEC to declare the
registration statement effective under the Securities Act no later
than the 180th day after the issue date of the old notes;
- cause the registation statement to remain effective until the closing
of the exchange offer; and
- complete the exchange offer within 45 days after the registration
statement becomes effective.
We will keep the exchange offer open for at least 20 business days (or
longer, if required by applicable law or otherwise extended by us at our option)
after the date notice of the exchange offer is mailed to the holders of the old
notes. During the exchange offer, we will offer to all holders of old notes who
are legally eligible to participate in the exchange offer the opportunity to
exchange their old notes for new notes.
If any holder holds any old notes acquired by it that have the status of an
unsold allotment in the initial distribution of the old notes or if any holder
is not entitled to participate in the exchange offer because of applicable law
or interpretations by the staff of the SEC, we will issue and deliver to that
holder in a private exchange, upon request and in exchange for the old notes
held by that holder, a like aggregate principal amount of our debt securities
that are identical in all material respects to the new notes. These private
exchange notes will, however, be subject to transfer restrictions.
The registration rights agreement also provides that we will:
- use our reasonable best efforts to make available, for at least 180
days after the consummation of the exchange offer, a prospectus for
use in connection with any resale of the new notes received by
broker-dealers in exchange for old notes acquired as a result of
market-making activities or other trading activities, as described
under "Plan of Distribution"; and
- pay certain expenses incident to the exchange offer and indemnify
specified holders of the new notes (including broker-dealers) against
certain liabilities, including liabilities under the Securities Act.
A broker-dealer that delivers this prospectus to purchasers in connection with
resales of new notes will be subject to civil liability provisions under the
Securities Act in connection with those sales and will be bound by the
applicable provisions of the registration rights agreement, including the
indemnification obligations.
If you desire to tender your old notes, you will be required to make to us
the representations described under "The Exchange Offer--Procedures for
Tendering--Your Representations to Us" to participate in the exchange offer.
SHELF REGISTRATION
We may be required to file a shelf registration statement to permit certain
holders of "registrable notes" (as defined under "--Additional Interest") who
were not eligible to participate in the exchange offer to resell the
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registrable notes periodically without being limited by transfer restrictions
applicable to the old notes. We will be required to file a shelf registration
statement only if:
- there is a change in law or applicable interpretations of the law by
the staff of the SEC and, as a result, we are not permitted to effect
the exchange offer as contemplated by this prospectus;
- the exchange offer is not consummated within 45 days after the
exchange offer registration statement is declared effective, but we
may terminate the shelf registration statement at any time, without
penalty, after the exchange offer is consummated;
- any holder of the old notes, other than an initial purchaser holding
old notes acquired directly from us as part of the initial
distribution, is not eligible to participate in the exchange offer
because of any change in applicable law or interpretations thereof or
elects to participate in the exchange offer but does not receive
freely transferable new notes; or
- any of the initial purchasers so requests before the date that is 90
days after the consummation of the exchange offer with respect to old
notes not eligible to be exchanged in the exchange offer and held by
it following consummation of the exchange offer.
If a shelf registration statement is required, we will:
- file the shelf registration statement with the SEC no later than (a)
the 180th day after the issue date of the old notes or (b) the 60th
day after that filing obligation arises, whichever is later;
- use our reasonable best efforts to cause the shelf registration
statement to be declared effective by the SEC no later than the 60th
day after the date on which we are required to file such shelf
registration; and
- use our reasonable best efforts to keep the shelf registration
statement effective for a period of two years after the latest date on
which any old notes are originally issued or, if earlier, until all
the registrable notes covered by the shelf registration statement are
sold thereunder, become eligible for resale pursuant to Rule 144(k)
under the Securities Act or cease to be registrable notes.
We may suspend the availability of a shelf registration statement and the
use of the related prospectus if:
- the SEC or any state securities authority requests an amendment or
supplement to the shelf registration statement or the related
prospectus or additional information;
- the SEC or any state securities authority issues any stop order
suspending the effectiveness of the shelf registration statement or
initiates proceedings for that purpose;
- we receive notification of the suspension of the qualification of the
registrable notes subject to the shelf registration statement for sale
in any U.S. jurisdiction or the initiation or threatening of any
proceeding for that purpose;
- the suspension is required by applicable law;
- the suspension is taken by us in good faith and for valid business
reasons, including the possible acquisition or divestiture of assets
or a material corporate transaction or event; or
- the happening of any event or the discovery of any fact makes any
statement made in the shelf registration statement or the related
prospectus untrue in any material respect or constitutes an omission
to state a material fact in the shelf registration statement or the
related prospectus.
41
The period for which we are obligated to keep the shelf registration statement
effective will be extended by the period of such suspension.
Each holder of registrable notes will be required to discontinue
disposition of registrable notes under that registration statement upon receipt
from us of notice of any events described in the preceding paragraph.
The shelf registration statement will permit only certain holders to resell
their notes from time to time. In particular, these holders must:
- provide specified information in connection with the shelf
registration statement; and
- agree in writing to be bound by all provisions of the registration
rights agreement, including the indemnification obligations.
A holder who sells notes under the shelf registration statement will be
required to be named as a selling securityholder in the prospectus and to
deliver a copy of the prospectus to purchasers. If we are required to file a
shelf registration statement, we will provide to each holder of the registrable
notes copies of the prospectus that is a part of the shelf registration
statement and notify each of these holders when the shelf registration statement
becomes effective. These holders will be subject to civil liability provisions
under the Securities Act in connection with those sales and will be bound by the
provisions of the registration rights agreement applicable to these holders,
including the indemnification obligations.
ADDITIONAL INTEREST
If a "registration default" occurs with respect to a series of registrable
notes, we will be required to pay additional interest to each holder of
registrable notes of that series. During the first 90-day period that such a
registration default occurs and is continuing, we will pay additional interest
on the registrable notes of that series at a rate of 0.25% per year. If a
registration default occurs and is continuing for a period of more than 90 days,
then the amount of additional interest we are required to pay on the registrable
notes of that series will increase, effective from and after the 91st day in
that period, by an additional 0.25% per year until all registration defaults
with respect to that series have been cured. However, in no event will the rate
of additional interest exceed 0.50% per year, and we will not be required to pay
additional interest for more than one registration default at a time. This
additional interest will accrue only for those days that a registration default
occurs and is continuing. All accrued additional interest will be paid to the
holders of the registrable notes in the same manner as interest payments on the
notes, with payments being made on the interest payment dates for notes.
Following the cure of all registration defaults with respect to a series of
registrable notes, no more additional interest will accrue for that series
unless a subsequent registration default occurs with respect to that series.
Additional interest will not be payable on any notes other than registrable
notes. You will not be entitled to receive any additional interest on any
registrable notes if you were, at any time while the exchange offer was pending,
eligible to exchange, and did not validly tender or withdrew, registrable notes
for new notes in the exchange offer.
A "registration default" will occur if:
- we fail to file any of the registration statements required by the
registration rights agreement on or before the date specified for that
filing;
- any such registration statement is not declared effective by the SEC
on or prior to the date specified for its effectiveness;
- we fail to complete the exchange offer on or prior to the date
specified for completion; or
42
- the shelf registration statement is declared effective but thereafter
ceases to be effective or usable in connection with resales of the
registrable notes covered thereby during the periods specified in the
registration rights agreement, except during limited periods as a
result of the exercise by us of our right to suspend use of the shelf
registration statement and the related prospectus as described under
"-- Shelf Registration" above.
The term "registrable notes" means the old notes. However, any old notes
will cease to be registrable notes when:
- a shelf registration statement with respect to those notes has been
declared effective under the Securities Act and those notes have been
disposed of under the shelf registration statement;
- those notes have been sold pursuant to Rule 144 under the Securities
Act or are saleable pursuant to Rule 144(k) under the Securities Act;
- those notes have ceased to be outstanding; or
- those notes have been exchanged for new notes in the exchange offer.
New notes received by broker-dealers in exchange for old notes acquired as a
result of market-making activities or other trading activities and private
exchange notes received in the private exchange described above will continue to
registrable notes until they are sold to purchasers in whose hands those notes
are freely tradeable without restriction under the Securities Act.
UNITED STATES FEDERAL INCOME TAX CONSEQUENCES
We have based the following discussion on the current provisions of the
Internal Revenue Code of 1986, applicable Treasury regulations, judicial
authority and administrative rulings. We have not obtained an opinion of counsel
and have not sought a ruling from the Internal Revenue Service, and we can give
you no assurance that the IRS will agree with the following discussion. Changes
in the applicable law may occur that may be retroactive and could affect the tax
consequences to you of the receipt of new notes in exchange for old notes in the
exchange offer. We do not discuss the effect of special rules such as those that
apply to insurance companies, tax-exempt organizations, financial institutions,
broker-dealers, foreign corporations, and a person who is not a citizen or
resident of the United States. WE RECOMMEND THAT YOU CONSULT YOUR OWN TAX
ADVISOR AS TO THE PARTICULAR TAX CONSEQUENCES OF RECEIVING NEW NOTES IN EXCHANGE
FOR OLD NOTES IN THE EXCHANGE OFFER, INCLUDING THE APPLICABILITY AND EFFECT OF
ANY STATE, LOCAL OR FOREIGN TAX LAW.
We believe that the receipt of new notes in exchange for old notes in the
exchange offer should not be treated as an exchange for United States federal
income tax purposes because the new notes and the old notes are not materially
different in kind or in extent, and as a result on the receipt of new notes in
exchange for old notes in the exchange offer you should not recognize gain or
loss, your initial tax basis in the new notes should be the same as your
adjusted tax basis in the old notes immediately before such exchange, and your
holding period for the new notes should include your holding period for the old
notes.
43
PLAN OF DISTRIBUTION
Based on interpretations by the staff of the SEC in no-action letters
issued to third parties, we believe that you may transfer new notes issued in
the exchange offer in exchange for the old notes if:
- you acquire the new notes in the ordinary course of your business; and
- you are not engaged in, and do not intend to engage in, and have no
arrangement or understanding with any person to participate in, a
distribution of new notes.
We believe that you may not transfer new notes issued in the exchange offer
in exchange for the old notes if you are:
- our "affiliate" within the meaning of Rule 405 under the Securities
Act;
- a broker-dealer that acquired old notes directly from us; or
- a broker-dealer that acquired old notes as a result of market-making
activities or other trading activities, unless you comply with the
registration and prospectus delivery provisions of the Securities Act.
If you wish to exchange your old notes for new notes in the exchange offer,
you will be required to make representations to us as described in "The Exchange
Offer -- Procedures for Tendering -- Your Representations to Us" of this
prospectus and in the letter of transmittal. In addition, each broker-dealer
that receives new notes for its own account in the exchange offer must
acknowledge that it will deliver a prospectus in connection with any resale of
those new notes. This prospectus, as it may be amended or supplemented from time
to time, may be used by a broker-dealer for resales of new notes received in
exchange for old notes that had been acquired as a result of market-making or
other trading activities. We have agreed that, for a period of 180 days after
the expiration date of the exchange offer, we will make this prospectus, as it
may be amended or supplemented, available to any broker-dealer for use in
connection with any such resale. Any broker-dealers required to use this
prospectus and any amendments or supplements to this prospectus for resales of
the new notes must notify us of this fact by checking the box on the letter of
transmittal requesting additional copies of these documents.
We are entitled under the registration rights agreement to suspend the use
of this prospectus by broker-dealers under specified circumstances. For example,
we may suspend the use of this prospectus if:
- the SEC or any state securities authority requests an amendment or
supplement to this prospectus or the related registration statement or
additional information;
- the SEC or any state securities authority issues any stop order
suspending the effectiveness of the registration statement or
initiates proceedings for that purpose;
- we receive notification of the suspension of the qualification of the
new notes for sale in any U.S. jurisdiction or the initiation or
threatening of any proceeding for that purpose;
- the suspension is required by law;
- the suspension is taken by us in good faith and for valid business
reason, including the possible acquisition or divestiture of assets or
a material corporate transaction or event; or
- the happening of any event or the discovery of any fact makes any
statement made in this prospectus untrue in any material respect or
constitutes an omission to state a material fact in this prospectus.
44
If we suspend the use of this prospectus, the 180-day period referred to above
will be extended by a number of days equal to the period of the suspension.
We will not receive any proceeds from any sale of new notes by
broker-dealers. New notes received by broker-dealers for their own account under
the exchange offer may be sold from time to time in one or more transactions:
- in the over-the-counter market;
- in negotiated transactions;
- through the writing of options on those notes; or
- a combination of those methods of resale.
The prices at which these sales occur may be:
- at market prices prevailing at the time of resale;
- at prices related to prevailing market prices; or
- at negotiated prices.
Any resales may be made directly to purchasers or to or through brokers or
dealers who may receive compensation in the form of commissions or concessions
from the selling broker-dealer or the purchasers of the new notes. Any
broker-dealer that resells new notes received by it for its own account under
the exchange offer and any broker or dealer that participates in a distribution
of the new notes may be deemed to be an "underwriter" within the meaning of the
Securities Act, and any profit on any resale of new notes and any commissions or
concessions received by these persons may be deemed to be underwriting
compensation under the Securities Act. The letter of transmittal states that, by
acknowledging that it will deliver and by delivering a prospectus, a
broker-dealer will not be deemed to admit that it is an "underwriter" within the
meaning of the Securities Act.
We have agreed to pay all expenses incidental to the exchange offer,
including the expenses of one counsel for the holders of old notes, other than
commissions and concessions of any broker or dealer. We also have agreed that we
will indemnify specified holders of the new notes, including broker-dealers,
against certain liabilities, including liabilities under the Securities Act, or
contribute to payments that they may be required to make in respect thereof.
TRANSFER RESTRICTIONS ON OLD NOTES
The old notes were not registered under the Securities Act. Accordingly, we
offered and sold the old notes only in private sales exempt from or not subject
to the registration requirements of the Securities Act:
- to "qualified institutional buyers" under Rule 144A under the
Securities Act;
- to a limited number of institutional "accredited investors"; and
- outside the United States in compliance with Regulation S under the
Securities Act.
You may not offer or sell those old notes in the United States or to, or for the
account or benefit of, U.S. persons except in transactions exempt from or not
subject to the Securities Act registration requirements.
45
LEGAL MATTERS
Baker Botts L.L.P., Houston, Texas, our outside legal counsel, has issued
an opinion about the legality of the new notes.
EXPERTS
The financial statements and the financial statement schedule incorporated
in this prospectus by reference to Conoco's Annual Report on Form 10-K for the
year ended December 31, 2001, have been so incorporated in reliance on the
reports of PricewaterhouseCoopers LLP, independent accountants, given on the
authority of said firm as experts in auditing and accounting.
Ernst & Young LLP, independent auditors, have audited the consolidated
financial statements and schedule of Phillips included in Phillips' Annual
Report on Form 10-K for the year ended December 31, 2001, as amended, as set
forth in their report, which is incorporated by reference in this prospectus.
Phillips' financial statements and schedule are incorporated by reference in
reliance on Ernst & Young LLP's report, given on their authority as experts in
accounting and auditing.
WHERE YOU CAN FIND MORE INFORMATION
ConocoPhillips files, and Conoco and Phillips have filed, annual, quarterly
and current reports, proxy statements and other information with the SEC. You
can read and copy these materials at the SEC's public reference room at 450
Fifth Street, N.W., Washington, D.C. 20549. You can obtain information about the
operation of the SEC's public reference room by calling the SEC at
1-800-SEC-0330. The SEC also maintains an Internet site that contains
information ConocoPhillips, Conoco and Phillips have filed electronically with
the SEC, which you can access over the Internet at http://www.sec.gov. You can
also obtain information about ConocoPhillips at the offices of the New York
Stock Exchange, 20 Broad Street, New York, New York 10005. Conoco and Phillips
are not subject to the information reporting requirements of the Securities
Exchange Act of 1934.
This prospectus is part of a joint registration statement we have filed
with the SEC relating to the notes and the related guarantees. As permitted by
SEC rules, this prospectus does not contain all of the information we have
included in the registration statement and the accompanying exhibits and
schedules we file with the SEC. You may refer to the registration statement,
exhibits and schedules for more information about us and these securities. The
registration statement, exhibits and schedules are available at the SEC's public
reference room or through its Internet site.
The SEC allows us to "incorporate by reference" the information
ConocoPhillips, Conoco and Phillips have filed with it, which means that we can
disclose important information to you by referring you to those documents. The
information we incorporate by reference is an important part of this prospectus,
and later information that ConocoPhillips, Conoco or Phillips files with the SEC
will automatically update and supersede this information. We incorporate by
reference the documents listed below and any future filings ConocoPhillips,
Conoco or Phillips makes with the SEC under Sections 13(a), 13(c), 14 or 15(d)
of the Exchange Act until the offering made by this prospectus terminates. The
documents we incorporate by reference are:
- Conoco's Annual Report on Form 10-K for the year ended December 31,
2001, as filed with the SEC on March 15, 2002;
- Phillips' Annual Report on Form 10-K for the year ended December 31,
2001, as filed with the SEC on March 20, 2002, and as amended by Form
10-K/A filed with the SEC on June 24, 2002;
- Conoco's Quarterly Reports on Form 10-Q for the quarter ended March
31, 2002, as filed with the SEC on May 8, 2002, and for the quarter
ended June 30, 2002, as filed with the SEC on August 9, 2002;
46
- Phillips'Quarterly Reports on Form 10-Q for the quarter ended March
31, 2002, as filed with the SEC on May 14, 2002, and for the quarter
ended June 30, 2002, as filed with the SEC on August 12, 2002;
- ConocoPhillips' Current Reports on Form 8-K as filed with the SEC on
August 30, 2002 (as amended by Form 8-K/A filed with the SEC on
October 1, 2002) and October 8, 2002;
- Conoco's Current Reports on Form 8-K as filed with the SEC on February
25, 2002; February 26, 2002; March 12, 2002; August 16, 2002 and
August 30, 2002; and
- Phillips' Current Reports on Form 8-K as filed with the SEC on
February 25, 2002; February 26, 2002; March 12, 2002 and August 30,
2002.
You may request a copy of these filings, other than an exhibit to these
filings unless we have specifically incorporated that exhibit by reference into
the filing, at no cost, by writing or telephoning ConocoPhillips at the
following address:
ConocoPhillips
Shareholder Relations Department
P. O. Box 2197
Houston, Texas 77079-2197
Telephone: (281) 293-6800
47
[LOGO]
PART II
INFORMATION NOT REQUIRED IN THE PROSPECTUS
ITEM 20. INDEMNIFICATION OF DIRECTORS AND OFFICERS
Delaware law permits a corporation to adopt a provision in its certificate
of incorporation eliminating or limiting the personal liability of a director,
but not an officer in his or her capacity as such, to the corporation or its
stockholders for monetary damages for breach of fiduciary duty as a director,
except that such provision shall not limit the liability of a director for (1)
any breach of the director's duty of loyalty to the corporation or its
stockholders, (2) acts or omissions not in good faith or that involve
intentional misconduct or a knowing violation of law, (3) liability under
section 174 of the Delaware General Corporation Law for unlawful payment of
dividends or stock purchases or redemptions, or (4) any transaction from which
the director derived an improper personal benefit. ConocoPhillips' restated
certificate of incorporation provides that, to the fullest extent of Delaware
law, no ConocoPhillips director shall be liable to ConocoPhillips or
ConocoPhillips' stockholders for monetary damages for breach of fiduciary duty
as a director. Each of Conoco's and Phillips' certificate of incorporation has
similar provisions with respect to its directors.
Under Delaware law, a corporation may indemnify any individual made a party
or threatened to be made a party to any type of proceeding, other than an action
by or in the right of the corporation, because he or she is or was an officer,
director, employee or agent of the corporation or was serving at the request of
the corporation as an officer, director, employee or agent of another
corporation or entity against expenses, judgments, fines and amounts paid in
settlement actually and reasonably incurred in connection with such proceeding:
(1) if he or she acted in good faith and in a manner he or she reasonably
believed to be in or not opposed to the best interests of the corporation; or
(2) in the case of a criminal proceeding, he or she had no reasonable cause to
believe that his or her conduct was unlawful. A corporation may indemnify any
individual made a party or threatened to be made a party to any threatened,
pending or completed action or suit brought by or in the right of the
corporation because he or she was an officer, director, employee or agent of the
corporation, or is or was serving at the request of the corporation as a
director, officer, employee or agent of another corporation or other entity,
against expenses actually and reasonably incurred in connection with such action
or suit if he or she acted in good faith and in a manner he or she reasonably
believed to be in or not opposed to the best interests of the corporation,
provided that such indemnification will be denied if the individual is found
liable to the corporation unless, in such a case, the court determines the
person is nonetheless entitled to indemnification for such expenses. A
corporation must indemnify a present or former director or officer who
successfully defends himself or herself in a proceeding to which he or she was a
party because he or she was a director or officer of the corporation against
expenses actually and reasonably incurred by him or her. Expenses incurred by an
officer or director, or any employees or agents as deemed appropriate by the
board of directors, in defending civil or criminal proceedings may be paid by
the corporation in advance of the final disposition of such proceedings upon
receipt of an undertaking by or on behalf of such director, officer, employee or
agent to repay such amount if it shall ultimately be determined that he or she
is not entitled to be indemnified by the corporation. The Delaware law regarding
indemnification and expense advancement is not exclusive of any other rights
which may be granted by our restated certificate of incorporation or bylaws, a
vote of stockholders or disinterested directors, agreement or otherwise.
Under the Delaware General Corporation Law, termination of any proceeding
by conviction or upon a plea of nolo contendere or its equivalent shall not, of
itself, create a presumption that such person is prohibited from being
indemnified.
ConocoPhillips' bylaws provide for the indemnification and advancement of
expenses of any individual made, or threatened to be made, a party to an action,
suit or proceeding, whether civil, criminal, administrative or investigative, by
reason of the fact that he or she is or was a director or officer of
ConocoPhillips or is or was a director or officer of ConocoPhillips serving as
an officer, director, employee or agent of any other enterprise at the request
of ConocoPhillips. Phillips' bylaws have similar provisions. Conoco's bylaws
provide for such indemnification and advancement of expenses if such officer or
director acted in good faith and in a manner he or she reasonably believed to be
in or not opposed to the best interests of Conoco and, with respect to any
criminal action or proceeding, had no reasonable cause to believe his or her
conduct was unlawful. However, neither
49
ConocoPhillips, Conoco nor Phillips will indemnify a director or officer who
commences any proceeding (except for proceedings to enforce rights of
indemnification), unless the commencement of that proceeding was authorized or
consented to by the respective company's board of directors.
ConocoPhillips has agreed to indemnify each present and former director and
officer of Conoco, Phillips or any of their subsidiaries, against all costs or
expenses, judgments, fines, losses, claims, damages or liabilities in connection
with any claim, action, suit, proceeding or investigation brought within six
years of the closing of the mergers of Conoco and Phillips with subsidiaries of
ConocoPhillips (collectively, the "merger") for acts or omissions, existing or
occurring before the merger, to the fullest extent permitted under applicable
law.
Subject to a cap on premiums, for a period of six years after the merger,
ConocoPhillips has agreed to maintain a policy of directors' and officers'
liability insurance for acts and omissions occurring before the merger with
coverage in an amount and scope at least as favorable as Conoco's and Phillips'
existing directors' and officers' liability insurance coverage.
Notwithstanding any other provision, the treatment of past and present
directors, officers and employees of either Conoco or Phillips and their
respective subsidiaries with respect to elimination of liability,
indemnification, advancement of expenses and liability insurance under the
merger agreement shall be, in the aggregate, no less advantageous to intended
beneficiaries thereof than the corresponding treatment of the past and present
directors, officers and employees of the other company and its subsidiaries.
ITEM 21. EXHIBITS AND FINANCIAL STATEMENT SCHEDULES
(a) Exhibits
The following instruments and documents are included as Exhibits to this
Registration Statement. Exhibits incorporated by reference are so indicated by
parenthetical information.
EXHIBIT NO. EXHIBIT
- ----------- -------
4.1 -- Indenture, dated as of October 9, 2002, among ConocoPhillips, as issuer, Conoco Inc.
and Phillips Petroleum Company, as guarantors, and The Bank of New York, as trustee
(incorporated by reference to Exhibit 4.5 to the Registration Statement on Form S-3 of
ConocoPhillips, Conoco Inc., Phillips Petroleum Company, ConocoPhillips Trust I and
ConocoPhillips Trust II filed on the date hereof).
4.2 -- Registration Rights Agreement dated October 9, 2002 between ConocoPhillips and Banc of
America Securities LLC, J.P. Morgan Securities Inc., Salomon Smith Barney Inc. and the
other initial purchasers named therein.
4.3 -- Terms of 3.625% Notes due 2007, 4.75% Notes due 2012 and 5.90% Notes due 2032,
including the form of note.
5.1 -- Opinion of Baker Botts L.L.P. as to the legality of the securities.
+12.1 -- Computation of ratio of earnings to fixed charges of Conoco Inc.
+12.2 -- Computation of ratio of earnings to fixed charges of Phillips Petroleum Company.
+12.3 -- Computation of pro forma ratio of earnings to fixed charges of ConocoPhillips.
23.1 -- Consent of PricewaterhouseCoopers LLP.
23.2 -- Consent of Ernst & Young LLP.
50
EXHIBIT NO. EXHIBIT
- ----------- -------
23.3 -- Consent of Baker Botts L.L.P. (contained in Exhibit 5.1).
24.1 -- Powers of Attorney (included on the signature page of the Registration Statement).
25.1 -- Statement of Eligibility and Qualification under the Trust Indenture Act of 1939, as
amended, of The Bank of New York, as trustee under the Indenture, on Form T-1.
99.1 -- Form of Letter of Transmittal.
99.2 -- Form of Notice of Guaranteed Delivery.
99.3 -- Form of Letter to Depository Trust Company Participants.
99.4 -- Form of Letter to Clients.
- ------------------
+ To be filed by amendment.
(b) Financial Statement Schedules
Not applicable.
ITEM 22. UNDERTAKINGS
(a) The undersigned Registrants hereby undertake:
(1) To file, during any period in which offers or sales are being
made, a post-effective amendment to this registration statement:
(i) To include any prospectus required by Section 10(a)(3) of the
Securities Act;
(ii) To reflect in the prospectus any facts or events arising
after the effective date of the registration statement (or the most
recent post-effective amendment thereof) which, individually or in the
aggregate, represent a fundamental change in the information set forth
in the registration statement. Notwithstanding the foregoing, any
increase or decrease in volume of securities offered (if the total
dollar value of securities offered would not exceed that which was
registered) and any deviation from the low or high end of the
estimated maximum offering range may be reflected in the form of
prospectus filed with the Commission pursuant to Rule 424(b) under the
Securities Act if, in the aggregate, the changes in volume and price
represent no more than a 20 percent change in the maximum aggregate
offering price set forth in the "Calculation of Registration Fee"
table in the effective registration statement;
(iii) To include any material information with respect to the
plan of distribution not previously disclosed in the registration
statement or any material change to such information in the
registration statement;
provided, however, that paragraphs (a)(1)(i) and (a)(1)(ii) do not apply if
the registration statement is on Form S-3 or Form S-8 and the information
required to be included in a post-effective amendment by those paragraphs
is contained in periodic reports filed by the registrant pursuant to
section 13 or section 15(d) of the Securities Exchange Act of 1934, as
amended (the "Exchange Act") that are incorporated by reference in the
Registration Statement.
(2) That, for the purpose of determining any liability under the
Securities Act, each such post-effective amendment shall be deemed to be a
new registration statement relating to the securities
51
offered therein, and the offering of such securities at that time shall be
deemed to be the initial bona fide offering thereof.
(3) To remove from registration by means of a post-effective amendment
any of the securities being registered which remain unsold at the
termination of the offering.
(b) The undersigned Registrants hereby undertake that, for purposes of
determining any liability under the Securities Act, each filing of the
respective Registrant's annual report pursuant to section 13(a) or section 15(d)
of the Exchange Act (and, where applicable, each filing of an employee benefit
plan's annual report pursuant to section 15(d) of the Exchange Act) that is
incorporated by reference in the Registration Statement shall be deemed to be a
new registration statement relating to the securities offered therein, and the
offering of such securities at that time shall be deemed to be the initial bona
fide offering thereof.
(c) Insofar as indemnification for liabilities arising under the Securities
Act may be permitted to directors, officers and controlling persons of the
Registrants pursuant to the foregoing provisions, or otherwise, the Registrants
have been advised that, in the opinion of the Securities and Exchange
Commission, such indemnification is against public policy as expressed in the
Securities Act and is, therefore, unenforceable. In the event that a claim for
indemnification against such liabilities (other than the payment by the
Registrants of expenses incurred or paid by a director, officer or controlling
person of the Registrants in the successful defense of any action, suit or
proceeding) is asserted by such director, officer or controlling person in
connection with the securities being registered, the Registrants will, unless,
in the opinion of its counsel, the matter has been settled by controlling
precedent, submit to a court of appropriate jurisdiction the question whether
such indemnification by it is against public policy as expressed in the
Securities Act and will be governed by the final adjudication of such issue.
(d) The undersigned Registrants hereby undertake to respond to requests for
information that is incorporated by reference into the Prospectus pursuant to
Item 4, 10(b), 11, or 13 of this Form, within one business day of receipt of
such request, and to send the incorporated documents by first class mail or
other equally prompt means. This includes information contained in documents
filed subsequent to the effective date of the Registration Statement through the
date of responding to the request.
(e) The undersigned Registrants hereby undertake to supply by means of a
post-effective amendment all information concerning a transaction, and the
company being acquired involved therein, that was not the subject of and
included in the Registration Statement when it became effective.
52
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, as amended, the
undersigned Registrant has duly caused this Registration Statement to be signed
on its behalf by the undersigned, thereunto duly authorized, in the City of
Houston, State of Texas, on November 12, 2002.
CONOCOPHILLIPS
By: /s/ John A. Carrig
--------------------------------------
John A. Carrig
Executive Vice President, Finance, and
Chief Financial Officer
POWER OF ATTORNEY
Each person whose signature appears below appoints John A. Carrig, Rick A.
Harrington and Rand C. Berney, and each of them, severally, as his or her true
and lawful attorney or attorneys-in-fact and agent or agents, each of whom shall
be authorized to act with or without the other, with full power of substitution
and resubstitution, for him or her and in his or her name, place and stead in
his or her capacity as a director or officer or both, as the case may be, of
ConocoPhillips, to sign any and all amendments (including post-effective
amendments) to this Registration Statement and all documents or instruments
necessary or appropriate to enable ConocoPhillips to comply with the Securities
Act of 1933, as amended, and to file the same with the Securities and Exchange
Commission, with full power and authority to each of said attorneys-in-fact and
agents to do and perform in the name and on behalf of each such director or
officer, or both, as the case may be, each and every act whatsoever that is
necessary, appropriate or advisable in connection with any or all of the
above-described matters and to all intents and purposes as he or she might or
could do in person, hereby ratifying and confirming all that said
attorneys-in-fact and agents or any of them or their substitutes, may lawfully
do or cause to be done by virtue hereof.
PURSUANT TO THE REQUIREMENTS OF THE SECURITIES ACT OF 1933, THIS
REGISTRATION STATEMENT HAS BEEN SIGNED BELOW BY THE FOLLOWING PERSONS IN THE
CAPACITIES INDICATED ON NOVEMBER 12, 2002.
SIGNATURE TITLE
--------- -----
/s/ J. J. Mulva
- ------------------------------------------------------- Chief Executive Officer, President and Director
J. J. Mulva (Principal Executive Officer)
/s/ John A. Carrig
- ------------------------------------------------------- Executive Vice President, Finance, and
John A. Carrig Chief Financial Officer
(Principal Financial Officer)
/s/ Rand C. Berney
- ------------------------------------------------------- Vice President and Controller
Rand C. Berney (Principal Accounting Officer)
/s/ Archie W. Dunham
- ------------------------------------------------------- Chairman of the Board and Director
Archie W. Dunham
/s/ Richard A. Auchinleck
- ------------------------------------------------------- Director
Richard A. Auchinleck
/s/ Norman R. Augustine
- ------------------------------------------------------- Director
Norman R. Augustine
/s/ David L. Boren
- ------------------------------------------------------- Director
David L. Boren
SIGNATURE TITLE
--------- -----
/s/ Kenneth M. Duberstein
- ------------------------------------------------------- Director
Kenneth M. Duberstein
/s/ Ruth R. Harkin
- ------------------------------------------------------- Director
Ruth R. Harkin
/s/ Larry D. Horner
- ------------------------------------------------------- Director
Larry D. Horner
/s/ Charles C. Krulak
- ------------------------------------------------------- Director
Charles C. Krulak
/s/ Frank A. McPherson
- ------------------------------------------------------- Director
Frank A. McPherson
/s/ William K. Reilly
- ------------------------------------------------------- Director
William K. Reilly
/s/ William R. Rhodes
- ------------------------------------------------------- Director
William R. Rhodes
/s/ J. Stapleton Roy
- ------------------------------------------------------- Director
J. Stapleton Roy
/s/ Randall L. Tobias
- ------------------------------------------------------- Director
Randall L. Tobias
/s/ Victoria J. Tschinkel
- ------------------------------------------------------- Director
Victoria J. Tschinkel
/s/ Kathryn C. Turner
- ------------------------------------------------------- Director
Kathryn C. Turner
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, as amended, the
undersigned Registrant has duly caused this Registration Statement to be signed
on its behalf by the undersigned, thereunto duly authorized, in the City of
Houston, State of Texas, on November 12, 2002.
CONOCO INC.
By: /s/ John A. Carrig
--------------------------------------
John A. Carrig
Executive Vice President, Finance, and
Chief Financial Officer
POWER OF ATTORNEY
Each person whose signature appears below appoints John A. Carrig, Rick A.
Harrington and Rand C. Berney, and each of them, severally, as his or her true
and lawful attorney or attorneys-in-fact and agent or agents, each of whom shall
be authorized to act with or without the other, with full power of substitution
and resubstitution, for him or her and in his or her name, place and stead in
his or her capacity as a director or officer or both, as the case may be, of
Conoco Inc., to sign any and all amendments (including post-effective
amendments) to this Registration Statement and all documents or instruments
necessary or appropriate to enable Conoco Inc. to comply with the Securities Act
of 1933, as amended, and to file the same with the Securities and Exchange
Commission, with full power and authority to each of said attorneys-in-fact and
agents to do and perform in the name and on behalf of each such director or
officer, or both, as the case may be, each and every act whatsoever that is
necessary, appropriate or advisable in connection with any or all of the
above-described matters and to all intents and purposes as he or she might or
could do in person, hereby ratifying and confirming all that said
attorneys-in-fact and agents or any of them or their substitutes, may lawfully
do or cause to be done by virtue hereof.
PURSUANT TO THE REQUIREMENTS OF THE SECURITIES ACT OF 1933, THIS
REGISTRATION STATEMENT HAS BEEN SIGNED BELOW BY THE FOLLOWING PERSONS IN THE
CAPACITIES INDICATED ON NOVEMBER 12, 2002.
SIGNATURE TITLE
--------- -----
/s/ J. J. Mulva
- -------------------------------------------- President and Chief Executive Officer
J. J. Mulva (Principal Executive Officer)
/s/ John A. Carrig
- -------------------------------------------- Executive Vice President, Finance,
John A. Carrig and Chief Financial Officer and Director
(Principal Financial Officer)
/s/ Rand C. Berney
- -------------------------------------------- Vice President and Controller
Rand C. Berney (Principal Accounting Officer)
/s/ Rick A. Harrington
- -------------------------------------------- Director
Rick A. Harrington
/s/ Thomas C. Knudson
- -------------------------------------------- Director
Thomas C. Knudson
/s/ John E. Lowe
- -------------------------------------------- Director
John E. Lowe
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, as amended, the
undersigned Registrant has duly caused this Registration Statement to be signed
on its behalf by the undersigned, thereunto duly authorized, in the City of
Houston, State of Texas, on November 12, 2002.
PHILLIPS PETROLEUM COMPANY
By: /s/ John A. Carrig
--------------------------------------
John A. Carrig
Executive Vice President, Finance, and
Chief Financial Officer
POWER OF ATTORNEY
Each person whose signature appears below appoints John A. Carrig, Rick A.
Harrington and Rand C. Berney, and each of them, severally, as his or her true
and lawful attorney or attorneys-in-fact and agent or agents, each of whom shall
be authorized to act with or without the other, with full power of substitution
and resubstitution, for him or her and in his or her name, place and stead in
his or her capacity as a director or officer or both, as the case may be, of
Phillips Petroleum Company, to sign any and all amendments (including
post-effective amendments) to this Registration Statement and all documents or
instruments necessary or appropriate to enable Phillips Petroleum Company to
comply with the Securities Act of 1933, as amended, and to file the same with
the Securities and Exchange Commission, with full power and authority to each of
said attorneys-in-fact and agents to do and perform in the name and on behalf of
each such director or officer, or both, as the case may be, each and every act
whatsoever that is necessary, appropriate or advisable in connection with any or
all of the above-described matters and to all intents and purposes as he or she
might or could do in person, hereby ratifying and confirming all that said
attorneys-in-fact and agents or any of them or their substitutes, may lawfully
do or cause to be done by virtue hereof.
PURSUANT TO THE REQUIREMENTS OF THE SECURITIES ACT OF 1933, THIS
REGISTRATION STATEMENT HAS BEEN SIGNED BELOW BY THE FOLLOWING PERSONS IN THE
CAPACITIES INDICATED ON NOVEMBER 12, 2002.
SIGNATURE TITLE
--------- -----
/s/ J. J. Mulva
- -------------------------------------------- President and Chief Executive Officer
J. J. Mulva (Principal Executive Officer)
/s/ John A. Carrig
- -------------------------------------------- Executive Vice President, Finance,
John A. Carrig and Chief Financial Officer and Director
(Principal Financial Officer)
/s/ Rand C. Berney
- -------------------------------------------- Vice President and Controller
Rand C. Berney (Principal Accounting Officer)
/s/ Rick A. Harrington
- -------------------------------------------- Director
Rick A. Harrington
/s/ Thomas C. Knudson
- -------------------------------------------- Director
Thomas C. Knudson
/s/ John E. Lowe
- -------------------------------------------- Director
John E. Lowe
EXHIBIT INDEX
EXHIBIT NO. EXHIBIT
- ----------- -------
4.1 -- Indenture, dated as of October 9, 2002, among ConocoPhillips, as issuer, Conoco Inc.
and Phillips Petroleum Company, as guarantors, and The Bank of New York, as trustee
(incorporated by reference to Exhibit 4.5 to the Registration Statement on Form S-3 of
ConocoPhillips, Conoco Inc., Phillips Petroleum Company, ConocoPhillips Trust I and
ConocoPhillips Trust II filed on the date hereof).
4.2 -- Registration Rights Agreement dated October 9, 2002 between ConocoPhillips and Banc of
America Securities LLC, J.P. Morgan Securities Inc., Salomon Smith Barney Inc. and the
other initial purchasers named therein.
4.3 -- Terms of 3.625% Notes due 2007, 4.75% Notes due 2012 and 5.90% Notes due 2032,
including the form of note.
5.1 -- Opinion of Baker Botts L.L.P. as to the legality of the securities.
+12.1 -- Computation of ratio of earnings to fixed charges of Conoco Inc.
+12.2 -- Computation of ratio of earnings to fixed charges of Phillips Petroleum Company.
+12.3 -- Computation of pro forma ratio of earnings to fixed charges of ConocoPhillips.
23.1 -- Consent of PricewaterhouseCoopers LLP.
23.2 -- Consent of Ernst & Young LLP.
23.3 -- Consent of Baker Botts L.L.P. (contained in Exhibit 5.1).
24.1 -- Powers of Attorney (included on the signature page of the Registration Statement).
25.1 -- Statement of Eligibility and Qualification under the Trust Indenture Act of 1939, as
amended, of The Bank of New York, as trustee under the Indenture, on Form T-1.
99.1 -- Form of Letter of Transmittal.
99.2 -- Form of Notice of Guaranteed Delivery.
99.3 -- Form of Letter to Depository Trust Company Participants.
99.4 -- Form of Letter to Clients.
- ------------------
+ To be filed by amendment.
EXHIBIT 4.2
[CONFORMED]
- --------------------------------------------------------------------------------
REGISTRATION RIGHTS AGREEMENT
Dated as of October 9, 2002
among
CONOCOPHILLIPS
as Issuer
and
BANC OF AMERICA SECURITIES LLC
J.P. MORGAN SECURITIES INC.
SALOMON SMITH BARNEY INC.
AND
THE OTHER INITIAL PURCHASERS
REFERRED TO HEREIN
as the Initial Purchasers
- --------------------------------------------------------------------------------
REGISTRATION RIGHTS AGREEMENT
REGISTRATION RIGHTS AGREEMENT (the "Agreement") dated as of October 9,
2002 among CONOCOPHILLIPS, a Delaware corporation (the "Company"), as issuer and
BANC OF AMERICA SECURITIES LLC, J.P. MORGAN SECURITIES INC., SALOMON SMITH
BARNEY INC. and the other parties referred to in Annex A hereto (each, an
"Initial Purchaser" and collectively, the "Initial Purchasers").
This Agreement is made pursuant to the Purchase Agreement dated October
2, 2002 by and among the Company, and the Initial Purchasers (the "Purchase
Agreement"), which provides for the sale by the Company to the Initial
Purchasers of $400,000,000 aggregate principal amount of the Company's 3.625%
Notes due 2007, $1,000,000,000 aggregate principal amount of the Company's 4.75%
Notes due 2012 and $600,000,000 aggregate principal amount of the Company's
5.90% Notes due 2032 (collectively, the "Notes"). The Notes will be fully and
unconditionally guaranteed (the "Guarantees," and together with the Notes, the
"Securities") by Conoco Inc. and Phillips Petroleum Company (each a "Guarantor"
and together the "Guarantors"). In order to induce the Initial Purchasers to
enter into the Purchase Agreement and in satisfaction of a condition to the
Initial Purchasers' obligations thereunder, the Company has agreed to provide to
the Initial Purchasers and their respective direct and indirect transferees and
assigns the registration rights set forth in this Agreement.
In consideration of the foregoing, the parties hereto agree as follows:
1. Definitions. As used in this Agreement, the following capitalized
defined terms shall have the following meanings:
"1933 Act" shall mean the Securities Act of 1933, as amended
from time to time, and the rules and regulations of the SEC promulgated
thereunder.
"1934 Act" shall mean the Securities Exchange Act of 1934, as
amended from time to time, and the rules and regulations of the SEC
promulgated thereunder.
"Additional Interest" shall have the meaning set forth in
Section 2(e) hereof.
"Closing Time" shall mean October 9, 2002.
"Depositary" shall mean The Depository Trust Company, or any
other depositary appointed by the Company, including any agent thereof;
provided, however, that any such depositary must at all times have an
address in the Borough of Manhattan, The City of New York.
"Exchange Offer" shall mean the exchange offer by the Company
and the Guarantors of Exchange Securities for Registrable Securities
pursuant to Section 2(a) hereof.
"Exchange Offer Registration" shall mean a registration of the
Exchange Offer under the 1933 Act effected pursuant to Section 2(a)
hereof.
"Exchange Offer Registration Statement" shall mean a
registration statement of the Company and the Guarantors on Form S-4 or
another appropriate form covering the Exchange Offer and all amendments
and supplements to such registration statement, in each case including
the Prospectus contained therein, all exhibits thereto and all material
incorporated or deemed to be incorporated by reference therein.
"Exchange Securities" shall mean the 3.625% Notes due 2007,
the 4.75% Notes due 2012 and the 5.90% Notes due 2032 of the Company
and the related guarantees of the Guarantors to be issued under the
Indenture with terms identical to the Securities (except that (i)
provisions relating to an increase in the stated rate of interest
thereon upon the occurrence of a Registration Default shall be
eliminated and (ii) the transfer restrictions, minimum purchase
requirements and legends relating to restrictions on ownership and
transfer thereof as a result of the issuance of the Securities without
registration under the 1933 Act shall be eliminated) and offered to
Holders of Registrable Securities in exchange for Registrable
Securities pursuant to the Exchange Offer.
"Guarantees" shall have the meaning set forth in the preamble
of this Agreement.
"Holders" shall mean, as the context requires, (i) the Initial
Purchasers, for so long as they own any Registrable Securities, and
each of their respective successors, assigns and direct and indirect
transferees who become registered holders of Registrable Securities
under the Indenture and (ii) each Participating Broker-Dealer that
holds Exchange Securities for so long as such Participating
Broker-Dealer is required to deliver a prospectus meeting the
requirements of the 1933 Act in connection with any resale of such
Exchange Securities.
"Indenture" shall mean the Indenture dated as of October 9,
2002 between the Company, the Guarantors and The Bank of New York, as
trustee, as the same may be further amended or supplemented from time
to time in accordance with the terms thereof.
"Interest Accrual Date" means October 9, 2002.
"Initial Purchasers" shall have the meaning set forth in the
preamble of this Agreement.
"Majority Holders" shall mean the Holders of a majority of the
aggregate principal amount of Registrable Securities outstanding
(voting as one class); provided, however, that whenever the consent or
approval of Holders of a specified percentage of Registrable Securities
is required hereunder, Registrable Securities held by the Company or
any of its affiliates (as such term is defined in Rule 405 under the
1933 Act) shall be disregarded in determining whether such consent or
approval was given by the Holders of such required percentage.
"NASD" shall mean the National Association of Securities
Dealers, Inc.
"Notes" shall have the meaning set forth in the preamble of
this Agreement.
"Notifying Broker-Dealer" shall have the meaning set forth in
Section 3(f) hereof.
2
"Participating Broker-Dealer" shall have the meaning set forth
in Section 3(f) hereof.
"Person" shall mean an individual, partnership, joint venture,
limited liability company, corporation, trust or unincorporated
organization or other entity, or a government or agency or political
subdivision thereof.
"Private Exchange Securities" shall have the meaning set forth
in Section 2(a) hereof.
"Prospectus" shall mean the prospectus included in a
Registration Statement, including any preliminary prospectus, and any
such prospectus as amended or supplemented by any prospectus
supplement, including a prospectus supplement with respect to the terms
of the offering of any portion of the Registrable Securities covered by
a Shelf Registration Statement, and by all other amendments and
supplements to a prospectus, including post-effective amendments, and
in each case including all material incorporated or deemed to be
incorporated by reference therein.
"Purchase Agreement" shall have the meaning set forth in the
preamble to this Agreement.
"Registrable Securities" shall mean the Securities; provided,
however, that any Securities shall cease to be Registrable Securities
when (i) a Shelf Registration Statement with respect to the resale of
such Securities shall have been declared effective under the 1933 Act
and such Securities shall have been disposed of pursuant to such Shelf
Registration Statement, (ii) such Securities shall have been sold to
the public pursuant to Rule 144 (or any similar provision then in
force, but not Rule 144A) under the 1933 Act or is saleable pursuant to
Rule 144(k) under the 1933 Act, (iii) such Securities shall have ceased
to be outstanding, (iv) such Securities shall have been exchanged for
Exchange Securities which have been registered pursuant to the Exchange
Offer Registration Statement upon consummation of the Exchange Offer
unless such Exchange Securities are held by Participating
Broker-Dealers or otherwise are not freely tradable without any
limitations or restrictions under the 1933 Act, in which case such
Exchange Securities will be deemed to be Registrable Securities until
such time as such Exchange Securities are sold to a purchaser in whose
hands such Exchange Securities are freely tradeable without any
limitations or restrictions under the 1933 Act or (v) such Securities
shall have been exchanged for Private Exchange Securities pursuant to
this Agreement, in which case such Private Exchange Securities will be
deemed to be Registrable Securities until such time as such Private
Exchange Securities are sold to a purchaser in whose hands such Private
Exchange Securities are freely tradeable without any limitations or
restrictions under the 1933 Act.
"Registration Default" shall have the meaning set forth in
Section 2(e) hereof.
"Registration Expenses" shall mean any and all expenses
incident to performance of or compliance by the Company with this
Agreement, including without limitation: (i) all SEC, stock exchange or
NASD registration and filing fees, (ii) all fees and expenses
3
incurred in connection with compliance with state or other securities
or blue sky laws and compliance with the rules of the NASD (including
reasonable fees and disbursements of one firm of counsel for any
Holders in connection with qualification of any of the Exchange
Securities or Registrable Securities under state or other securities or
blue sky laws and any filing with and review by the NASD), (iii) all
expenses of any Persons in preparing, printing and distributing any
Registration Statement, any Prospectus, any amendments or supplements
thereto, certificates representing the Securities, Private Exchange
Securities (if any) or Exchange Securities and other documents relating
to the performance of and compliance with this Agreement, (iv) all
rating agency fees, (v) all fees and expenses incurred in connection
with the listing, if any, of the Securities, Private Exchange
Securities (if any) or Exchange Securities on any securities exchange
or exchanges or on any quotation system, (vi) all fees and
disbursements relating to the qualification of the Indenture under
applicable securities laws, (vii) the fees and disbursements of counsel
for the Company and the Guarantors and the fees and expenses of
independent public accountants for the Company and the Guarantors or
for any other Person, business or assets whose financial statements are
included in any Registration Statement or Prospectus, (viii) the fees
and expenses of the Trustee, any registrar, any depositary, any paying
agent, any escrow agent or any custodian, in each case including fees
and disbursements of their respective counsel, (ix) the reasonable fees
and expenses of counsel to the Initial Purchasers in connection with
the Exchange Offer and (x) the fees and disbursements, if any, of one
firm of special counsel representing the Holders of Registrable
Securities designated pursuant to Section 2(c) below.
"Registration Statement" shall mean any registration statement
of the Company and the Guarantors relating to any offering of the
Exchange Securities or Registrable Securities pursuant to the
provisions of this Agreement (including, without limitation, any
Exchange Offer Registration Statement and any Shelf Registration
Statement), and all amendments and supplements to any such Registration
Statement, including post-effective amendments, in each case including
the Prospectus contained therein, all exhibits thereto (other than the
Statement of Eligibility under the TIA of the Trustee on Form T-1) and
all material incorporated or deemed to be incorporated by reference
therein.
"SEC" shall mean the Securities and Exchange Commission or any
successor thereto.
"Securities" shall have the meaning set forth in the preamble
to this Agreement.
"Shelf Registration" shall mean a registration covering the
resale of Securities or Private Exchange Securities (if any) effected
pursuant to Section 2(b) hereof.
"Shelf Registration Statement" shall mean a registration
statement of the Company and the Guarantors on Form S-3 filed pursuant
to Rule 415(a)(1)(i) under the 1933 Act covering the Shelf
Registration, and all amendments and supplements to such registration
statement, including post-effective amendments, in each case including
the Prospectus contained therein, all exhibits thereto and all material
incorporated or deemed to be incorporated by reference therein.
4
"TIA" shall mean the Trust Indenture Act of 1939, as amended
from time to time, and the rules and regulations of the SEC promulgated
thereunder.
"Trustee" shall mean the trustee with respect to the
Securities, the Private Exchange Securities (if any) and the Exchange
Securities under the Indenture.
For purposes of this Agreement, (i) all references in this Agreement to
any Registration Statement, preliminary prospectus or Prospectus or any
amendment or supplement to any of the foregoing shall be deemed to include the
copy filed with the SEC pursuant to its Electronic Data Gathering, Analysis and
Retrieval system; (ii) all references in this Agreement to financial statements
and schedules and other information which is "contained", "included",
"disclosed" or "stated" in any Registration Statement, preliminary prospectus or
Prospectus (or other references of like import) shall be deemed to include all
such financial statements and schedules and other information which is
incorporated or deemed to be incorporated by reference in such Registration
Statement, preliminary prospectus or Prospectus, as the case may be, at the time
of effectiveness or delivery, as the case may be; (iii) all references in this
Agreement to amendments or supplements to any Registration Statement,
preliminary prospectus or Prospectus shall be deemed to include the filing of
any document under the 1934 Act which is incorporated or deemed to be
incorporated by reference in such Registration Statement, preliminary prospectus
or Prospectus, as the case may be, after the time of effectiveness or delivery,
as the case may be; (iv) all references in this Agreement to Rule 144, Rule 144A
or Rule 405 under the 1933 Act, and all references to any sections or
subsections thereof or terms defined therein, shall in each case include any
successor provisions thereto; and (v) all references in this Agreement to days
(but not to business days) shall mean calendar days.
2. Registration Under the 1933 Act.
(a) Exchange Offer Registration. To the extent not prohibited by
applicable law or by applicable interpretations of the staff of the SEC, the
Company shall, and shall cause the Guarantors to, use reasonable best efforts to
(A) file with the SEC on or prior to the 120th day after the Closing Time an
Exchange Offer Registration Statement covering the offer by the Company and the
Guarantors to the Holders to exchange all of the Registrable Securities for a
like aggregate principal amount of Exchange Securities, (B) cause such Exchange
Offer Registration Statement to be declared effective by the SEC no later than
the 180th day after the Closing Time, (C) cause such Registration Statement to
remain effective until the closing of the Exchange Offer and (D) consummate the
Exchange Offer no later than 45 days after the effective date of the Exchange
Offer Registration Statement. Upon the effectiveness of the Exchange Offer
Registration Statement, the Company shall promptly commence the Exchange Offer,
it being the objective of such Exchange Offer to enable each Holder eligible and
electing to exchange Registrable Securities for Exchange Securities (assuming
that such Holder (1) is not an affiliate of the Company or either Guarantor
within the meaning of Rule 405 under the 1933 Act or an Initial Purchaser
holding Securities acquired by it and having the status of an unsold allotment
in the initial offering and sale of Securities pursuant to the Purchase
Agreement, (2) acquires the Exchange Securities in the ordinary course of such
Holder's business and (3) has no arrangements or understandings with any Person
to participate in the Exchange Offer for the purpose of distributing such
Exchange Securities and is not engaged in, and does not intend to engage in, any
such distribution) to trade such Exchange Securities from and after their
receipt
5
without any limitations or restrictions under the 1933 Act or under the
securities or blue sky laws of the states of the United States.
In connection with the Exchange Offer, the Company shall:
(i) promptly mail to each Holder a copy of the Prospectus
forming part of the Exchange Offer Registration Statement, together
with an appropriate letter of transmittal and related documents;
(ii) keep the Exchange Offer open for not less than 20
business days (or longer if required by applicable law) after the date
notice thereof is mailed to the Holders and, during the Exchange Offer,
offer to all Holders who are eligible to participate in the Exchange
Offer the opportunity to exchange their Registrable Securities for
Exchange Securities;
(iii) use the services of a depositary or other exchange agent
with an address in the Borough of Manhattan, The City of New York, for
the Exchange Offer;
(iv) permit Holders to withdraw tendered Registrable
Securities at any time prior to the close of business, New York City
time, on the last business day on which the Exchange Offer shall remain
open;
(v) notify each Holder that any Registrable Security not
tendered, or tendered and subsequently withdrawn, will remain
outstanding and continue to accrue interest, but will not retain any
rights under this Agreement (except in the case of the Initial
Purchasers and Participating Broker-Dealers as provided herein) or
accrue Additional Interest; and
(vi) otherwise comply in all material respects with all
applicable laws relating to the Exchange Offer.
If, at or prior to the consummation of the Exchange Offer, any Initial
Purchaser holds any Securities acquired by it and having the status of an unsold
allotment in the initial offering and sale of Securities pursuant to the
Purchase Agreement, or any Holder is not entitled to participate in the Exchange
Offer because of applicable law or interpretations thereof by the staff of the
SEC, the Company shall, upon the request of such Initial Purchaser or Holder,
simultaneously with the delivery of the Exchange Securities in the Exchange
Offer to other Holders, issue and deliver to such Initial Purchaser or Holder in
exchange for such Securities a like principal amount of debt securities of the
Company ("Private Exchange Securities"), and the Company shall cause the
Guarantors to provide corresponding guarantees, to be issued under the Indenture
with terms identical to the Exchange Securities, except that such debt
securities and related guarantees shall be subject to transfer restrictions and
minimum purchase requirements, shall bear a legend relating to restrictions on
ownership and transfer identical to those applicable to the Securities as a
result of the issuance thereof without registration under the 1933 Act and shall
provide for the payment of Additional Interest. The Company shall use its
reasonable best efforts to have the Private Exchange Securities bear the same
CUSIP number as the Exchange Securities and, if unable to do so, the Company
will, at such time as any Private Exchange Security ceases to be a "restricted
security" within the meaning of Rule 144 under the 1933 Act,
6
permit any such Private Exchange Security to be exchanged for a like principal
amount of Exchange Securities.
The Exchange Securities and the Private Exchange Securities (if any)
shall be issued under the Indenture, which shall be qualified under the TIA.
Interest on each Exchange Security and such Private Exchange Security (if any)
will accrue from the last date on which interest was paid or duly provided for
on the Securities surrendered in exchange therefor or, if no interest has been
paid or duly provided for on such Securities, from the Interest Accrual Date.
The Indenture shall provide that the Exchange Securities, the Private
Exchange Securities (if any) and the Securities of each series shall vote and
consent together on all matters as a single class and shall constitute a single
series of debt securities issued under the Indenture.
As soon as practicable after the close of the Exchange Offer, the
Company shall with respect to each series of Securities:
(i) accept for exchange all Registrable Securities duly
tendered and not validly withdrawn pursuant to the Exchange Offer in
accordance with the terms of the Exchange Offer Registration Statement
and the related letter of transmittal;
(ii) deliver, or cause to be delivered, to the Trustee for
cancellation all Registrable Securities so accepted for exchange by the
Company; and
(iii) cause the Trustee promptly to authenticate and deliver
Exchange Securities to each Holder of Registrable Securities so
accepted for exchange equal in principal amount to the principal amount
of the Registrable Securities of such Holder so accepted for exchange.
The Exchange Offer shall not be subject to any conditions, other than
that (i) the Exchange Offer, or the making of any exchange by a Holder, does not
violate any applicable law or any applicable interpretation of the staff of the
SEC, (ii) no action or proceeding shall have been instituted or threatened in
any court or by or before any governmental agency with respect to the Exchange
Offer which, in the Company's judgment, would reasonably be expected to impair
the ability of the Company to proceed with the Exchange Offer and (iii) the
Holders tender the Registrable Securities to the Company in accordance with the
Exchange Offer. Each Holder of Registrable Securities (other than Participating
Broker-Dealers) who wishes to exchange such Registrable Securities for Exchange
Securities in the Exchange Offer will be required to represent that (1) it is
not an affiliate (as defined in Rule 405 under the 1933 Act) of the Company or
an Initial Purchaser holding Securities acquired by it and having the status of
an unsold allotment in the initial offering and sale of Securities pursuant to
the Purchase Agreement, (2) any Exchange Securities to be received by it will be
acquired in the ordinary course of business and (3) it has no arrangement or
understanding with any Person to participate in the distribution (within the
meaning of the 1933 Act) of the Exchange Securities and is not engaged in, and
does not intend to engage in, any such distribution, and shall be required to
make such other representations as may be reasonably necessary under applicable
SEC rules, regulations or interpretations to render the use of Form S-4 or
another appropriate form under the 1933 Act available.
7
(b) Shelf Registration. (i) If, because of any change in law or
applicable interpretations thereof by the staff of the SEC, the Company and the
Guarantors are not permitted to effect the Exchange Offer as contemplated by
Section 2(a) hereof or (ii) if for any other reason (A) the Exchange Offer
Registration Statement is not declared effective within 180 days following the
Closing Time or (B) the Exchange Offer is not consummated within 45 days after
effectiveness of the Exchange Offer Registration Statement (provided that if the
Exchange Offer Registration Statement shall be declared effective after such
180-day period or if the Exchange Offer shall be consummated after such 45-day
period, then the Company's obligations under this clause (ii) arising from the
failure of the Exchange Offer Registration Statement to be declared effective
within such 180-day period or the failure of the Exchange Offer to be
consummated within such 45-day period, respectively, shall terminate), (iii) if
any Holder (other than an Initial Purchaser holding Securities acquired directly
from the Company and the Guarantors as part of the offering and sale of
Securities pursuant to the Purchase Agreement) is not eligible to participate in
the Exchange Offer because of any change in law or applicable interpretations
thereof by the staff of the SEC or elects to participate in the Exchange Offer
but does not receive Exchange Securities which are freely tradeable without any
limitations or restrictions under the 1933 Act or (iv) upon the request of any
Initial Purchasers (provided that, in the case of this clause (iv), such Initial
Purchaser shall hold Registrable Securities (including, without limitation,
Private Exchange Securities) that it acquired directly from the Company and the
Guarantors as part of the offering and sale of Securities pursuant to the
Purchase Agreement and such request is made before the date that is 90 days
after consummation of the Exchange Offer), the Company shall, and shall cause
the Guarantors to, at their cost:
(A) as promptly as practicable, but no later than (a)
the 180th day after the Closing Time or (b) the 60th day after
any such filing obligation arises, whichever is later, file
with the SEC a Shelf Registration Statement relating to the
resale of the Registrable Securities by the Holders from time
to time in accordance with the methods of distribution set
forth in such Shelf Registration Statement;
(B) use reasonable best efforts to cause such Shelf
Registration Statement to be declared effective by the SEC as
promptly as practicable, but in no event later than the 60th
day after the date on which the Company is required to file
the Shelf Registration Statement. In the event that the
Company and the Guarantors are required to file a Shelf
Registration Statement pursuant to clause (iii) or (iv) above,
the Company shall, and shall cause the Guarantors to, file and
use reasonable best efforts to have declared effective by the
SEC both an Exchange Offer Registration Statement pursuant to
Section 2(a) with respect to all Registrable Securities other
than the Private Exchange Securities (if any) and a Shelf
Registration Statement (which may be combined with the
Exchange Offer Registration Statement) with respect to resales
of Registrable Securities held by such Holder or such Initial
Purchaser, as applicable;
(C) use reasonable best efforts to keep the Shelf
Registration Statement continuously effective, supplemented
and amended as required, in order to permit the Prospectus
forming part thereof to be usable by Holders for a period (x)
of two years after the latest date on which any Securities are
originally issued by the Company and the Guarantors (subject
to extension pursuant to the last paragraph of Section 3) or,
(y) if earlier, when all of the Registrable Securities covered
by such Shelf Registration
8
Statement (i) have been sold pursuant to the Shelf
Registration Statement in accordance with the intended method
of distribution thereunder, (ii) become eligible for resale
pursuant to Rule 144(k) under the 1933 Act or (iii) cease to
be Registrable Securities; and
(D) notwithstanding any other provisions hereof, use
reasonable best efforts to ensure that (i) the Shelf
Registration Statement and each amendment thereto (if any) and
the Prospectus forming a part thereof and each amendment or
supplement thereto comply in all material respects with the
1933 Act and the rules and regulations thereunder, (ii)
neither the Shelf Registration Statement nor any amendment
thereto, when it becomes effective, contains an untrue
statement of a material fact or omits to state a material fact
required to be stated therein or necessary to make the
statements therein not misleading and (iii) except during
circumstances described in the last two paragraphs of Section
3, neither the Prospectus forming part of the Shelf
Registration Statement nor any amendment or supplement thereto
includes an untrue statement of a material fact or omits to
state a material fact necessary in order to make the
statements therein, in the light of the circumstances under
which they were made, not misleading; provided, however, that
this provision shall not apply to any statements or omissions
made in reliance upon and in conformity with information
furnished in writing to the Company by a holder of Registrable
Securities expressly for use therein.
The Company shall not permit any securities other than Registrable
Securities to be included in the Shelf Registration Statement without the prior
written consent of Banc of America Securities LLC. The Company further agrees,
if necessary, to supplement or amend the Shelf Registration Statement if
reasonably requested by the Majority Holders with respect to information
relating to the Holders and otherwise as required by Section 3(b) below, to use
reasonable best efforts to cause any such amendment to become effective and such
Shelf Registration Statement to become usable as soon as practicable thereafter
and to furnish to the Holders of Registrable Securities as many copies of any
such supplement or amendment as such Holders may reasonably request promptly
after its being used or filed with the SEC.
(c) Expenses. The Company shall pay all Registration Expenses in
connection with the registration pursuant to Section 2(a) and 2(b) hereof and,
in the case of the Shelf Registration Statement, will reimburse the Holders or
the Initial Purchasers for the reasonable fees and disbursements of one counsel
designated in writing by the Majority Holders of such Registrable Securities
included in such offering (or, if a Shelf Registration Statement is filed solely
pursuant to clause (iv) of the first paragraph of Section 2(b), designated by
the Initial Purchasers) to act as counsel for the Holders of the Registrable
Securities in connection therewith, which, until otherwise designated in
accordance with this Section 2(c), shall be Cravath, Swaine & Moore. Each Holder
shall pay all fees and disbursements of its counsel other than as set forth in
the preceding sentence or in the definition of Registration Expenses and all
discounts, commissions and other expenses (other than Registration Expenses) and
transfer taxes, if any, relating to the sale or disposition of such Holder's
Registrable Securities pursuant to a the Shelf Registration Statement.
9
(d) Effective Registration Statement.
(i) The Company shall be deemed not to have used reasonable
best efforts to cause the Exchange Offer Registration Statement or any
Shelf Registration Statement, as the case may be, to become, or to
remain, effective during the requisite periods set forth herein if the
Company or either Guarantor takes any action or fails to take any
action that could reasonably be expected to result in any such
Registration Statement not being declared effective or remaining
effective or in the Holders of Registrable Securities (including, under
the circumstances contemplated by Section 3(f) hereof, Exchange
Securities) covered thereby not being able to exchange or offer and
sell such Registrable Securities during that period unless (A) such
action is required by applicable law, (B) such action is taken or
omitted by the Company or either Guarantor in good faith and for valid
business reasons (which does not include avoidance of the Company's
obligations hereunder), including the acquisition or divestiture of
assets or a material corporate transaction or event, or (C) such action
results from the happening of any event or the discovery of any facts
which makes any statement made in such Registration Statement or the
related Prospectus untrue in any material respect or which constitutes
an omission to state a material fact in such Registration Statement or
Prospectus, in each case so long as the Company promptly complies with
the requirements of Section 3(k) hereof, if applicable, to notify
Holders to suspend the use of the Prospectus. Nothing in this paragraph
shall prevent the accrual of Additional Interest on any Securities,
Private Exchange Securities or Exchange Securities.
(ii) An Exchange Offer Registration Statement pursuant to
Section 2(a) hereof or a Shelf Registration Statement pursuant to
Section 2(b) hereof shall not be deemed to have become effective unless
it has been declared effective by the SEC; provided, however, that if,
after it has been declared effective, the offering of Registrable
Securities pursuant to a Registration Statement is interfered with by
any stop order, injunction or other order or requirement of the SEC or
any other governmental agency or court, such Registration Statement
shall be deemed not to have been effective during the period of such
interference until the offering of Registrable Securities pursuant to
such Registration Statement may legally resume.
(e) Increase in Interest Rate. In the event that:
(i) the Exchange Offer Registration Statement is not filed
with the SEC on or prior to the 120th day following the Closing Time,
or
(ii) the Exchange Offer Registration Statement is not declared
effective by the SEC on or prior to the 180th day following the Closing
Time, or
(iii) the Exchange Offer is not consummated on or prior to the
45th day following the effective date of the Exchange Offer
Registration Statement, or
(iv) if required, a Shelf Registration Statement is not filed
with the SEC on or prior to (A) the 180th day following the Closing
Time or (B) the 60th day after the filing obligation arises, whichever
is later, or
10
(v) if required, a Shelf Registration Statement is not
declared effective on or prior to the 60th day after the date on which
the Company and the Guarantors are required to file such Shelf
Registration Statement, or
(vi) a Shelf Registration Statement is declared effective by
the SEC but such Shelf Registration Statement ceases to be effective or
such Shelf Registration Statement or the Prospectus included therein
ceases to be usable in connection with resales of Registrable
Securities covered thereby for any reason and either (A) the aggregate
number of days in any consecutive 365-day period for which the Shelf
Registration Statement or such Prospectus shall not be effective or
usable exceeds 90 days or (B) the Shelf Registration Statement or such
Prospectus shall not be effective or usable for a period of more than
30 consecutive days, or
(vii) the Exchange Offer Registration Statement is declared
effective by the SEC but, if the Exchange Offer Registration Statement
is being used in connection with the resale of Exchange Securities as
contemplated by Section 3(f)(B) of this Agreement, the Exchange Offer
Registration Statement ceases to be effective or the Exchange Offer
Registration Statement or the Prospectus included therein ceases to be
usable in connection with resales of Exchange Securities for any reason
during the 180-day period referred to in Section 3(f)(B) of this
Agreement (as such period may be extended pursuant to the last
paragraph of Section 3 of this Agreement) and either (A) the aggregate
number of days in any consecutive 365-day period for which the Exchange
Offer Registration Statement or such Prospectus shall not be effective
or usable exceeds 90 days or (B) the Exchange Offer Registration
Statement or the Prospectus shall not be effective or usable for a
period of more than 30 consecutive days,
(each of the events referred to in clauses (i) through (vii) above being
hereinafter called a "Registration Default"), the per annum interest rate borne
by the Registrable Securities of a series shall be increased ("Additional
Interest") by one-quarter of one percent (0.25%) per annum immediately following
such 120-day period in the case of clause (i) above, immediately following such
180-day period in the case of clause (ii) above, immediately following such
45-day period in the case of clause (iii) above, immediately following any such
180-day period or 60-day period, whichever ends later, in the case of clause
(iv) above, immediately following any such 60-day period in the case of clause
(v) above, immediately following the 90th day in any consecutive 365-day period
or immediately following the 30th consecutive day, whichever occurs first, that
a Shelf Registration Statement shall not be effective or a Shelf Registration
Statement or the Prospectus included therein shall not be usable as contemplated
by clause (vi) above, or immediately following the 90th day in any consecutive
365-day period or immediately following the 30th consecutive day, whichever
occurs first, that the Exchange Offer Registration Statement shall not be
effective or the Exchange Offer Registration Statement or the Prospectus
included therein shall not be usable as contemplated by clause (vii) above,
which rate will be increased by an additional one-quarter of one percent (0.25%)
per annum immediately following each 90-day period that any Additional Interest
continues to accrue under any circumstances; provided, however, that the
aggregate increase in such annual interest rate may in no event exceed one-half
of one percent (0.50%) per annum and the Company will not be required to pay
Additional Interest for more than one Registration Default at a time. Upon the
filing of the Exchange Offer Registration Statement after the 120-day period
described in clause (i) above,
11
the effectiveness of the Exchange Offer Registration Statement after the 180-day
period described in clause (ii) above, the consummation of the Exchange Offer
after the 45-day period described in clause (iii) above, the filing of the Shelf
Registration Statement after the 180-day period or 60-day period, as the case
may be, described in clause (iv) above, the effectiveness of a Shelf
Registration Statement after the 60-day period described in clause (v) above,
the Shelf Registration Statement once again being effective or the Shelf
Registration Statement and the Prospectus included therein becoming usable in
connection with resales of Registrable Securities of the applicable series, as
the case may be, in the case of clause (vi) above, or the Exchange Offer
Registration Statement once again being effective or the Exchange Offer
Registration Statement and the Prospectus included therein becoming usable in
connection with resales of Exchange Securities of the applicable series, as the
case may be, in the case of clause (vii) above, the interest rate borne by the
Registrable Securities of such series from the date of such filing,
effectiveness, consummation or resumption of effectiveness or useability, as the
case may be, shall be reduced to the original interest rate so long as no other
Registration Default shall have occurred with respect to such series and shall
be continuing at such time and the Company is otherwise in compliance with this
section; provided, however, that if, after any such reduction in interest rate,
one or more Registration Defaults with respect to such series shall again occur,
the interest rate of such series of Registrable Securities shall again be
increased pursuant to the foregoing provisions.
The Company shall notify the Trustee within three business days after
each and every date on which an event occurs in respect of which Additional
Interest is required to be paid. Additional Interest shall be paid by depositing
with the Trustee, in trust, for the benefit of the Holders of Registrable
Securities of the applicable series, on or before the applicable semiannual
interest payment date, immediately available funds in sums sufficient to pay the
Additional Interest then due. The Additional Interest due shall be payable on
each such interest payment date to the record Holder of Registrable Securities
of such series entitled to receive the interest payment to be paid on such date
as set forth in the Indenture. Each obligation to pay Additional Interest shall
be deemed to accrue from and including the day following the applicable
Registration Default.
Anything herein to the contrary notwithstanding, any Holder who was, at
the time the Exchange Offer was pending and consummated, eligible to exchange,
and did not validly tender or withdrew, its Securities for Exchange Securities
in the Exchange Offer will not be entitled to receive any Additional Interest.
For purposes of clarity, it is hereby acknowledged and agreed that, under
current interpretations of law by the SEC, Initial Purchasers holding unsold
allotments of Securities acquired from the Company and the Guarantors pursuant
to the Purchase Agreement are not eligible to participate in the Exchange Offer.
(f) Specific Enforcement. Without limiting the remedies available to
the Initial Purchasers and the Holders, the Company acknowledges that any
failure by the Company to comply with its obligations under Sections 2(a)
through 2(d) hereof may result in material irreparable injury to the Initial
Purchasers, the Holders or the Participating Broker-Dealers for which there is
no adequate remedy at law, that it will not be possible to measure damages for
such injuries precisely and that, in the event of any such failure, the Initial
Purchasers, any Holder and any Participating Broker-Dealer may obtain such
relief as may be required to specifically enforce the Company's obligations
under Section 2(e) hereof.
12
3. Registration Procedures. In connection with the obligations of the
Company with respect to the Registration Statements pursuant to Sections 2(a)
and 2(b) hereof, the Company shall, and shall cause the Guarantors to:
(a) prepare and file with the SEC a Registration Statement or,
if required, Registration Statements, within the time periods specified
in Section 2, on the appropriate form under the 1933 Act, which form
(i) shall be selected by the Company, (ii) shall, in the case of a
Shelf Registration Statement, be available for the sale of the
Registrable Securities by the selling Holders thereof and (iii) shall
comply as to form in all material respects with the requirements of the
applicable form and include or incorporate by reference all financial
statements required by the SEC to be filed therewith, and use its
reasonable best efforts to cause such Registration Statement to become
effective and remain effective in accordance with Section 2 hereof;
(b) prepare and file with the SEC such amendments and
post-effective amendments to each Registration Statement as may be
necessary under applicable law to keep such Registration Statement
effective for the applicable period in accordance with Section 2
hereof; cause each Prospectus to be supplemented by any required
prospectus supplement, and as so supplemented to be filed pursuant to
Rule 424 under the 1933 Act; and comply with the provisions of the 1933
Act and the 1934 Act with respect to the disposition of all Securities
covered by each Registration Statement during the applicable period in
accordance with the intended method or methods of distribution by the
selling Holders thereof;
(c) in the case of a Shelf Registration, (i) notify each
Holder of Registrable Securities which may be included in such Shelf
Registration, at least ten business days prior to filing or such
shorter period as is reasonable under the circumstances, that a Shelf
Registration Statement with respect to the Registrable Securities is
being filed; (ii) furnish to each Holder of Registrable Securities, to
counsel for the Initial Purchasers and to one firm of counsel for the
Holders, without charge, as many copies of each Prospectus, including
each preliminary Prospectus, and any amendment or supplement thereto
and such other documents as such Holder or counsel may reasonably
request, including financial statements and schedules and, if such
Holder or counsel so requests, all exhibits (including those
incorporated by reference) in order to facilitate the public sale or
other disposition of the Registrable Securities; and (iii) subject to
the penultimate paragraph of this Section 3, the Company hereby
consents to the use of the Prospectus, including each preliminary
Prospectus, or any amendment or supplement thereto by each of the
Holders of Registrable Securities in connection with the offering and
sale of the Registrable Securities covered by any Prospectus or any
amendment or supplement thereto;
(d) use reasonable best efforts to register or qualify, to the
extent required, the Registrable Securities under all applicable state
securities or "blue sky" laws of such jurisdictions of the United
States as any Holder of Registrable Securities covered by a
Registration Statement shall reasonably request in writing by the time
the applicable Registration Statement is declared effective, to
cooperate with the Holders of any Registrable Securities in connection
with any filings required to be made with the NASD,
13
to keep each such registration or qualification effective during the
period such Registration Statement is required to be effective and do
any and all other acts and things which may be reasonably necessary or
advisable to enable such Holder to consummate the disposition in each
such jurisdiction of such Registrable Securities owned by such Holder;
provided, however, that neither the Company nor either Guarantor shall
be required to (i) file any general consent to service of process or to
qualify as a foreign corporation or as a dealer in securities in any
jurisdiction in which it is not so qualified or (ii) to subject
themselves to taxation in any jurisdiction in which they are not so
subject;
(e) in the case of a Shelf Registration, notify each Holder of
Registrable Securities included in such Shelf Registration and one firm
of counsel for such Holders promptly and, if requested by such Holder
or counsel, confirm such advice in writing promptly (i) when a
Registration Statement has become effective and when any post-effective
amendments and supplements thereto become effective, (ii) of any
request by the SEC or any state securities authority for post-effective
amendments or supplements to a Registration Statement or Prospectus or
for additional information after a Registration Statement has become
effective, (iii) of the issuance by the SEC or any state securities
authority of any stop order suspending the effectiveness of a
Registration Statement or the initiation of any proceedings for that
purpose, (iv) of the receipt by the Company or a Guarantor of any
notification with respect to the suspension of the registration or
qualification of the Registrable Securities for sale in any U.S.
jurisdiction or the initiation or threatening of any proceeding for
such purpose, (v) of the happening of any event or the discovery of any
facts during the period a Shelf Registration Statement is effective
which is contemplated in Section 2(d)(i)(A), 2(d)(i)(B) or 2(d)(i)(C)
and (vi) of any determination by the Company or a Guarantor that a
post-effective amendment to a Registration Statement would be
appropriate; and without limitation to any other provisions of this
Agreement, the Company agrees that this Section 3(e) shall also be
applicable, mutatis mutandis, with respect to the Exchange Offer
Registration Statement and the Prospectus included therein to the
extent that such Prospectus is being used by Participating
Broker-Dealers as contemplated by Section 3(f);
(f) (A) in the case of an Exchange Offer, (i) include in the
Exchange Offer Registration Statement (x) a "Plan of Distribution"
section substantially in the form set forth in Annex B hereto or other
such form as is reasonably acceptable to Banc of America Securities LLC
covering the use of the Prospectus included in the Exchange Offer
Registration Statement by broker-dealers who have exchanged their
Registrable Securities for Exchange Securities for the resale of such
Exchange Securities and (y) a statement to the effect that any such
broker-dealers who wish to use the related Prospectus in connection
with the resale of Exchange Securities acquired as a result of
market-making or other trading activities will be required to notify
the Company to that effect, together with instructions for giving such
notice (which instructions shall include a provision for giving such
notice by checking a box or making another appropriate notation on the
related letter of transmittal) (each such broker-dealer who gives
notice to the Company as aforesaid being hereinafter called a
"Notifying Broker-Dealer"), (ii) furnish to each Notifying
Broker-Dealer who desires to participate in the Exchange Offer, without
charge, as many copies of each Prospectus included in the Exchange
Offer Registration Statement, including any preliminary prospectus, and
any amendment or
14
supplement thereto, as such broker-dealer may reasonably request, (iii)
include in the Exchange Offer Registration Statement a statement that
any broker-dealer who holds Registrable Securities acquired for its own
account as a result of market-making activities or other trading
activities (a "Participating Broker-Dealer"), and who receives Exchange
Securities for Registrable Securities pursuant to the Exchange Offer,
may be a statutory underwriter and must deliver a prospectus meeting
the requirements of the 1933 Act in connection with any resale of such
Exchange Securities, (iv) subject to the penultimate paragraph of this
Section 3, the Company hereby consents to the use of the Prospectus
forming part of the Exchange Offer Registration Statement or any
amendment or supplement thereto by any Notifying Broker-Dealer in
connection with the sale or transfer of Exchange Securities and (v)
include in the transmittal letter or similar documentation to be
executed by an exchange offeree in order to participate in the Exchange
Offer substantially the following provision:
"If the undersigned is not a broker-dealer, the undersigned
represents that it is not engaged in, and does not intend to engage in,
a distribution of Exchange Securities. If the undersigned is a
broker-dealer that will receive Exchange Securities for its own account
in exchange for Registrable Securities, it represents that the
Registrable Securities to be exchanged for Exchange Securities were
acquired by it as a result of market-making activities or other trading
activities and acknowledges that it will deliver a prospectus meeting
the requirements of the 1933 Act in connection with any resale of such
Exchange Securities pursuant to the Exchange Offer; however, by so
acknowledging and by delivering a prospectus, the undersigned will not
be deemed to admit that it is an "underwriter" within the meaning of
the 1933 Act. If the undersigned is a broker-dealer, it represents that
it did not purchase the Registrable Securities to be exchanged for
Exchange Securities from the Company";
(B) to the extent any Notifying Broker-Dealer participates in
the Exchange Offer, (i) the Company shall use reasonable best efforts
to maintain the effectiveness of the Exchange Offer Registration
Statement for a period of 180 days (subject to extension pursuant to
the last paragraph of this Section 3) following the last date on which
exchanges are accepted pursuant to the Exchange Offer and (ii) the
Company will comply, insofar as relates to the Exchange Offer
Registration Statement, the Prospectus included therein and the
offering and sale of Exchange Securities pursuant thereto, with its
obligations under Section 2(b)(D), the last paragraph of Section 2(b),
Sections 3(c), 3(e), 3(i), 3(j), 3(k), 3(n), 3(o), 3(p) and 3(q) and
the last two paragraphs of this Section 3 as if all references therein
to a Shelf Registration Statement, the Prospectus included therein and
the Holders of Registrable Securities referred, mutatis mutandis, to
the Exchange Offer Registration Statement, the Prospectus included
therein and the applicable Notifying Broker-Dealers and, for purposes
of this Section 3(f), all references in any such paragraphs or sections
to the "Majority Holders" shall be deemed to mean, solely insofar as
relates to this Section 3(f), the Notifying Broker-Dealers who are the
Holders of the majority in aggregate principal amount of the Exchange
Securities which are Registrable Securities (voting as one class); and
(C) the Company shall not be required to amend or supplement
the Prospectus contained in the Exchange Offer Registration Statement
as would otherwise be
15
contemplated by Section 3(b) or 3(k) hereof, or take any other action
as a result of this Section 3(f), for a period exceeding 180 days
(subject to extension pursuant to the last paragraph of this Section 3)
after the date on which the Exchange Offer Registration Statement is
declared effective or such shorter period of time such Notifying
Broker-Dealers must comply with the prospectus delivery requirements of
the 1933 Act in order to resell the Exchange Securities received in
exchange for the Registrable Securities acquired for their own account
as a result of market-making or other trading activity, and Notifying
Broker-Dealers shall not be authorized by the Company to, and shall
not, deliver such Prospectus after such period in connection with
resales contemplated by this Section 3;
(g) (i) in the case of an Exchange Offer, furnish counsel for
the Initial Purchasers and (ii) in the case of a Shelf Registration,
furnish one firm of counsel for the Holders of Registrable Securities
copies of any request by the SEC or any state securities authority for
amendments or supplements to a Registration Statement or Prospectus or
for additional information;
(h) use reasonable best effort to obtain the withdrawal of any
order suspending the effectiveness of a Registration Statement as soon
as practicable and provide prompt notice to each Holder of the
withdrawal of any such order;
(i) in the case of a Shelf Registration, furnish to each
Holder of Registrable Securities included in such Shelf Registration,
upon request from such Holder and without charge, at least one
conformed copy of each Registration Statement and any post-effective
amendments thereto (without documents incorporated or deemed to be
incorporated therein by reference or exhibits thereto, unless
requested), if such documents are not available via the SEC EDGAR
database;
(j) in the case of a Shelf Registration, cooperate with the
selling Holders of Registrable Securities to facilitate the timely
preparation and delivery of certificates representing Registrable
Securities to be sold and not bearing any restrictive legends; and
cause such Registrable Securities to be in such denominations
(consistent with the provisions of the Indenture) and in a form
eligible for deposit with the Depositary;
(k) in the case of a Shelf Registration, upon the occurrence
of any event or the discovery of any facts as contemplated by Section
3(e)(v) hereof, subject to the last paragraph of this Section 3 use
reasonable best efforts to prepare a supplement or post-effective
amendment to a Registration Statement or the related Prospectus or any
document incorporated or deemed to be incorporated therein by reference
or file any other required document so that, as thereafter delivered to
the purchasers of the Registrable Securities, such Prospectus will not
include at the time of such delivery any untrue statement of a material
fact or omit to state a material fact necessary in order to make the
statements therein, in light of the circumstances under which they were
made, not misleading; the Company agrees to notify each Holder to
suspend use of the Prospectus as promptly as practicable after the
occurrence of such an event, and each Holder hereby agrees to suspend
use of the Prospectus until the Company has amended or supplemented the
Prospectus to correct such misstatement or omission; and at such time
16
as such public disclosure is otherwise made or the Company determines
that such disclosure is not necessary, in each case to correct any
misstatement of a material fact or to include any omitted material
fact, the Company agrees promptly to notify each Holder of such
determination and to furnish each Holder such number of copies of the
Prospectus, as amended or supplemented, as such Holder may reasonably
request;
(l) obtain CUSIP numbers for all Exchange Securities or
Registrable Securities, as the case may be, not later than the
effective date of a Registration Statement, and provide the Trustee
with printed or word-processed certificates for the Exchange Securities
or Registrable Securities, as the case may be, in a form eligible for
deposit with the Depositary;
(m) (i) cause the Indenture to be qualified under the TIA in
connection with the registration of the Exchange Securities or
Registrable Securities, as the case may be, (ii) cooperate with the
Trustee and the Holders to effect such changes, if any, to the
Indenture as may be required for the Indenture to be so qualified in
accordance with the terms of the TIA and (iii) execute, and use
reasonable best efforts to cause the Trustee to execute, all documents
as may be required to effect such changes, if any, and all other forms
and documents required to be filed with the SEC to enable the Indenture
to be so qualified in a timely manner;
(n) in the case of a Shelf Registration, if requested by the
Holders of a majority in principal amount of the Registrable Securities
registered pursuant to such Shelf Registration Statement and consented
to by the Company, which consent shall not be unreasonably withheld,
effect not more than one underwritten registration and, in connection
with such underwritten registration, enter into agreements (including
underwriting agreements or similar agreements) and take all other
customary and appropriate actions (including those reasonably requested
by the Holders of a majority in principal amount of the Registrable
Securities being sold) in order to expedite or facilitate the
disposition of such Registrable Securities and in such connection, in a
manner that is reasonable and customary;
(o) in the case of a Shelf Registration, make available for
inspection by the Holders of the Registrable Securities included in
such Shelf Registration Statement who shall certify to the Company in
writing that they have a current intention to sell the Registrable
Securities pursuant to the Shelf Registration Statement and any single
firm of counsel or single firm of accountants retained by such Holders,
all financial statements and other records, documents and properties of
the Company reasonably requested by any such Persons, and cause the
respective officers, directors, employees, and any other agents of the
Company to supply all information reasonably requested by any such
Persons in connection with a Shelf Registration Statement, subject to
such confidentiality agreements as the Company may reasonably require
and to privilege;
(p) (i) in the case of an Exchange Offer, a reasonable time
prior to the filing of any Exchange Offer Registration Statement, any
Prospectus forming a part thereof, any amendment to an Exchange Offer
Registration Statement or amendment or supplement to such Prospectus
(excluding documents incorporated by reference), provide copies of such
17
documents to counsel for the Initial Purchasers, and will not file any
such documents as to which the Initial Purchasers or their counsel may
reasonably object prior to such filing; (ii) in the case of a Shelf
Registration, a reasonable time prior to filing any Shelf Registration
Statement, any Prospectus forming a part thereof, any amendment to such
Shelf Registration Statement or amendment or supplement to such
Prospectus (excluding documents incorporated by reference), provide
copies of such document to the Holders of Registrable Securities
included in such Shelf Registration Statement, to the Initial
Purchasers, and to one firm of counsel for any such Holders or Initial
Purchasers and will not file any such documents as to which the Holders
of Registrable Securities, the Initial Purchasers or any of their
respective counsel may reasonably object prior to such filing; and
(iii) cause the representatives of the Company to be available for
discussion of such documents as shall be reasonably requested by the
Holders of Registrable Securities or the Initial Purchasers on behalf
of such Holders, and shall not at any time make any filing of any such
document of which such Holders, the Initial Purchasers on behalf of
such Holders or their counsel shall not have previously been advised
and furnished a copy as required by this Section 3(p) or to which the
Majority Holders of Registrable Securities included in such
Registration Statement, the Initial Purchasers on behalf of such
Holders or their counsel shall reasonably object prior to such filing;
(q) in the case of a Shelf Registration, use reasonable best
efforts to cause the Registrable Securities to be rated with the
appropriate rating agencies, if so requested by the Majority Holders of
Registrable Securities, unless the Registrable Securities are already
so rated;
(r) otherwise use reasonable best efforts to comply with all
applicable rules and regulations of the SEC and, with respect to each
Registration Statement and each post-effective amendment, if any,
thereto and each filing by the Company of an Annual Report on Form
10-K, make available to its security holders, as soon as reasonably
practicable, an earnings statement covering at least twelve months
which shall satisfy the provisions of Section 11(a) of the 1933 Act and
Rule 158 thereunder;
(s) in the case of a Shelf Registration, immediately after the
filing of any document which is to be incorporated by reference into a
Registration Statement or a Prospectus after initial filing of a
Registration Statement, provide as many copies of such document to the
Initial Purchasers on behalf of such Holders as shall be reasonably
requested and, upon request of such Initial Purchasers, make
representatives of the Company as shall be reasonably requested by the
Holders of Registrable Securities, or the Initial Purchasers on behalf
of such Holders, available for discussion of such document; and
(t) in the case of a Shelf Registration and if Exchange
Securities are so listed, use reasonable best efforts to cause all
Registrable Securities to be listed on any securities exchange on which
Exchange Securities are then listed if such listing of Registrable
Securities included in such Shelf Registration is requested by the
Majority Holders.
In the case of a Shelf Registration Statement, the Company may (as a
condition to such Holder's participation in the Shelf Registration) require each
Holder of Registrable Securities to
18
furnish to the Company such information regarding such Holder and the proposed
distribution by such Holder of such Registrable Securities as the Company may
from time to time reasonably request in writing and require such Holder to agree
in writing to be bound by all provisions of this Agreement applicable to such
Holder. Each Holder of Registrable Securities as to which any Shelf Registration
is being effected agrees to furnish promptly to the Company all information
required to be disclosed so that the information previously furnished to the
Company by such Holder is not materially misleading and does not omit to state
any material fact required to be stated therein or necessary to make the
statements therein not misleading in light of the circumstances under which they
were made.
In the case of a Shelf Registration Statement, each Holder agrees and,
in the event that any Participating Broker-Dealer is using the Prospectus
included in the Exchange Offer Registration Statement in connection with the
sale of Exchange Securities pursuant to Section 3(f), each such Participating
Broker-Dealer agrees that, upon receipt of any notice from the Company of the
happening of any event or the discovery of any facts of the kind described in
Section 3(e)(ii) through 3(e)(vi) hereof, such Holder or Participating
Broker-Dealer, as the case may be, will forthwith discontinue disposition of
Registrable Securities pursuant to a Registration Statement until receipt by
such Holder or Participating Broker-Dealer, as the case may be, of (i) the
copies of the supplemented or amended Prospectus contemplated by Section 3(k)
hereof or (ii) written notice from the Company that the Shelf Registration
Statement or the Exchange Offer Registration Statement, respectively, are once
again effective or that no supplement or amendment is required. If so directed
by the Company, such Holder or Participating Broker-Dealer, as the case may be,
will deliver to the Company (at the Company's expense) all copies in its
possession, other than permanent file copies then in its possession, of the
Prospectus covering such Registrable Securities that is current at the time of
receipt of such notice. Nothing in this paragraph shall prevent the accrual of
Additional Interest on any Securities, Private Exchange Securities or Exchange
Securities.
If the Company shall give any such notice to suspend the disposition of
Registrable Securities pursuant to the immediately preceding paragraph, the
Company shall be deemed to have used reasonable best efforts to keep the Shelf
Registration Statement or, in the case of Section 3(f), the Exchange Offer
Registration Statement, as the case may be, effective during such period of
suspension; provided that (i) such period of suspension shall not exceed the
time periods provided in Section 2(e)(vii) hereof and (ii) the Company shall use
reasonable best efforts to file and have declared effective (if an amendment) as
soon as practicable thereafter an amendment or supplement to the Shelf
Registration Statement or the Exchange Offer Registration Statement or both, as
the case may be, or the Prospectus included therein and shall, subject to
Section 2(b)(C)(y), extend the period during which the Shelf Registration
Statement or the Exchange Offer Registration Statement or both, as the case may
be, shall be maintained effective pursuant to this Agreement (and, if
applicable, the period during which Participating Broker-Dealers may use the
Prospectus included in the Exchange Offer Registration Statement pursuant to
Section 3(f) hereof) by the number of days during the period from and including
the date of the giving of such notice to and including the earlier of the date
when the Holders or Participating Broker-Dealers, respectively, shall have
received copies of the supplemented or amended Prospectus necessary to resume
such dispositions and the effective date of written notice from the Company to
the Holders or Participating Broker-Dealers, respectively, that the
19
Shelf Registration Statement or the Exchange Offer Registration Statement,
respectively, are once again effective or that no supplement or amendment is
required.
4. Underwritten Registrations.
If any of the Registrable Securities covered by any Shelf Registration
are to be sold in an underwritten offering in accordance with Section 3(n), the
investment banker or investment bankers and manager or managers that will manage
the offering will be selected by the Majority Holders of such Registrable
Securities included in such offering, subject to the consent of the Company,
which consent shall not be unreasonably withheld.
No Holder of Registrable Securities may participate in any underwritten
registration hereunder unless such Holder (a) agrees to sell such Holder's
Registrable Securities on the basis provided in any underwriting arrangements
approved by the Persons entitled hereunder to approve such arrangements and (b)
completes and executes all questionnaires, powers of attorney, indemnities,
underwriting agreements and other documents required under the terms of such
underwriting arrangements.
5. Indemnification and Contribution.
(a) The Company agrees to indemnify and hold harmless each Initial
Purchaser, each Holder, each Participating Broker-Dealer and each Person, if
any, who controls any Initial Purchaser, Holder or Participating Broker-Dealer
within the meaning of either Section 15 of the 1933 Act or Section 20 of the
1934 Act (each a "Company Indemnitee"), against any losses, claims, damages or
liabilities, joint or several, to which such Company Indemnitee may become
subject, under the 1933 Act or otherwise, insofar as such losses, claims,
damages or liabilities (or actions in respect thereof) arise out of or are based
upon any untrue statement or alleged untrue statement of any material fact
contained in any Registration Statement pursuant to which Exchange Securities or
Registrable Securities were registered under the 1933 Act, any related
Prospectus, or any amendment or supplement thereto, or any related preliminary
prospectus or preliminary prospectus supplement, or arise out of or are based
upon the omission or alleged omission to state therein a material fact required
to be stated therein or necessary to make the statements therein not misleading,
and will reimburse each Company Indemnitee for any legal or other expenses
reasonably incurred by such Company Indemnitee in connection with investigating
or defending any such loss, claim, damage, liability or action as such expenses
are incurred; provided, however, that the Company will not be liable in any such
case to the extent that any such loss, claim, damage or liability arises out of
or is based upon an untrue statement or alleged untrue statement in or omission
or alleged omission from any of such documents in reliance upon and in
conformity with written information furnished to the Company by any Initial
Purchaser, Holder or Participating Broker-Dealer with respect to such Initial
Purchaser, Holder or Participating Broker-Dealer, as the case may be,
specifically for use therein; and provided, further, that with respect to any
untrue statement or alleged untrue statement in or omission or alleged omission
from any preliminary prospectus or preliminary prospectus supplement the
indemnity agreement contained in this subsection (a) shall not inure to the
benefit of any Company Indemnitee from whom the person asserting any such
losses, claims, damages or liabilities purchased the Registrable Securities or
Exchange Securities concerned, to the extent that a prospectus supplement
relating to such Securities was required to be delivered by such
20
Company Indemnitee under the 1933 Act in connection with such purchase and any
such loss, claim, damage or liability of such Company Indemnitee results from
the fact that there was not sent or given to such person, at or prior to the
written confirmation of the sale of such Securities to such person, a copy of
the most recent Prospectus if the Company had previously furnished copies
thereof to such Company Indemnitee.
(b) Each Initial Purchaser, each Holder and each Participating
Broker-Dealer will severally and not jointly indemnify and hold harmless the
Company, each Guarantor, their respective directors and officers, each other
Initial Purchaser, each other selling Holder, each other Participating
Broker-Dealer and each Person, if any, who controls the Company, any Guarantor,
any such Initial Purchaser, any such Holder and any such Participating
Broker-Dealer within the meaning of either Section 15 of the 1933 Act or Section
20 of the 1934 Act (each a "Holder Indemnitee"), against any losses, claims,
damages or liabilities to which such Holder Indemnitee may become subject, under
the 1933 Act or otherwise, insofar as such losses, claims, damages or
liabilities (or actions in respect thereof) arise out of or are based upon any
untrue statement or alleged untrue statement of any material fact contained in
any Registration Statement pursuant to which Exchange Securities or Registrable
Securities were registered under the 1933 Act, any related Prospectus, or any
amendment or supplement thereto, or any related preliminary prospectus or
preliminary prospectus supplement, or arise out of or are based upon the
omission or the alleged omission to state therein a material fact required to be
stated therein or necessary to make the statements therein not misleading, in
each case to the extent, but only to the extent, that such untrue statement or
alleged untrue statement or omission or alleged omission was made in reliance
upon and in conformity with written information furnished to the Company by any
Initial Purchaser, Holder or Participating Broker-Dealer with respect to such
Initial Purchaser, Holder or Participating Broker-Dealer, as the case may be,
specifically for use therein, and will reimburse any legal or other expenses
reasonably incurred by the Company in connection with investigating or defending
any such loss, claim, damage, liability or action as such expenses are incurred.
(c) Promptly after receipt by an indemnified party under this Section 5
of notice of the commencement of any action, such indemnified party will, if a
claim in respect thereof is to be made against the indemnifying party under
subsection (a) or (b) above, notify the indemnifying party of the commencement
thereof; but the omission so to notify the indemnifying party will not relieve
it from any liability which it may have to any indemnified party otherwise than
under subsection (a) or (b) above. In case any such action is brought against
any indemnified party and it notifies the indemnifying party of the commencement
thereof, the indemnifying party will be entitled to participate therein and, to
the extent that it may wish, jointly with any other indemnifying party similarly
notified, to assume the defense thereof, with counsel satisfactory to such
indemnified party (who shall not, except with the consent of the indemnified
party, be counsel to the indemnifying party), and after notice from the
indemnifying party to such indemnified party of its election so to assume the
defense thereof, the indemnifying party will not be liable to such indemnified
party under this Section 5 for any legal or other expenses subsequently incurred
by such indemnified party in connection with the defense thereof other than
reasonable costs of investigation. In no event shall the indemnifying parties be
liable for the fees and expenses of more than one counsel (in addition to any
local counsel) separate from their own counsel for all indemnified parties in
connection with any one action or separate but similar or related actions in the
same jurisdiction arising out of the same general allegations
21
or circumstances. No indemnifying party shall, without the prior written consent
of the indemnified party, effect any settlement of any pending or threatened
action in respect of which any indemnified party is or could have been a party
and indemnity could have been sought hereunder by such indemnified party unless
such settlement (i) includes an unconditional release of such indemnified party
from all liability on any claims that are the subject matter of such action and
(ii) does not include a statement as to, or an admission of fault, culpability
or a failure to act by or on behalf of an indemnified party.
(d) If the indemnification provided for in this Section 5 is
unavailable or insufficient to hold harmless an indemnified party under
subsection (a) or (b) above, then each indemnifying party shall contribute to
the amount paid or payable by such indemnified party as a result of the losses,
claims, damages or liabilities referred to in subsection (a) or (b) above (i) in
such proportion as is appropriate to reflect the relative benefits received by
the Company from the offering and sale of the Securities on the one hand and the
Initial Purchaser, Holder or Participating Broker-Dealer, as the case may be, on
the other from the sale of the Registrable Securities or Exchange Securities
pursuant to the applicable Registration Statement by such Initial Purchaser,
Holder or Participating Broker-Dealer or (ii) if the allocation provided by
clause (i) above is not permitted by applicable law, in such proportion as is
appropriate to reflect not only the relative benefits referred to in clause (i)
above but also the relative fault of the Company on the one hand and such
Initial Purchaser, Holder or Participating Broker-Dealer on the other in
connection with the statements or omissions which resulted in such losses,
claims, damages or liabilities as well as any other relevant equitable
considerations. The relative benefits received by the Company on the one hand
and such Initial Purchaser, Holder or Participating Broker-Dealer on the other
shall be deemed to be in the same proportion as the total net proceeds from the
offering (before deducting expenses) received by the Company bear to the total
proceeds received by such Initial Purchaser, Holder or Participating
Broker-Dealer on the sale of such Registrable Securities or Exchange Securities,
as the case may be. The relative fault shall be determined by reference to,
among other things, whether the untrue or alleged untrue statement of a material
fact or the omission or alleged omission to state a material fact relates to
information supplied by the Company or such Initial Purchaser, Holder or
Participating Broker-Dealer and the parties' relative intent, knowledge, access
to information and opportunity to correct or prevent such untrue statement or
omission. The amount paid by an indemnified party as a result of the losses,
claims, damages or liabilities referred to in the first sentence of this
subsection (d) shall be deemed to include any legal or other expenses reasonably
incurred by such indemnified party in connection with investigating or defending
any action or claim which is the subject of this subsection (d). Notwithstanding
the provisions of this subsection (d), no Initial Purchaser, Holder or
Participating Broker-Dealer shall be required to contribute any amount in excess
of the amount by which the total price at which the Registrable Securities or
Exchange Securities sold by it to any purchaser exceeds the amount of any
damages which such Initial Purchaser, Holder or Participating Broker-Dealer has
otherwise been required to pay by reason of such untrue or alleged untrue
statement or omission or alleged omission. No person guilty of fraudulent
misrepresentation (within the meaning of Section 11(f) of the 1933 Act) shall be
entitled to contribution from any person who was not guilty of such fraudulent
misrepresentation.
(e) The obligations of the Company under this Section 5 shall be in
addition to any liability which the Company may otherwise have and shall extend,
upon the same terms and
22
conditions, to each person, if any, who controls any Initial Purchaser, Holder
or Participating Broker-Dealer within the meaning of Section 15 of the 1933 Act
or Section 20 of the 1934 Act; and the obligations of the Initial Purchasers,
Holders and Participating Broker-Dealers under this Section 5 shall be in
addition to any liability which the respective Initial Purchaser, Holder or
Participating Broker-Dealer may otherwise have and shall extend, upon the same
terms and conditions, to each Guarantor, each director of the Company or a
Guarantor, to each officer of the Company or a Guarantor who has signed the
Registration Statement and to each person, if any, who controls the Company or a
Guarantor within the meaning of Section 15 of the 1933 Act or Section 20 of the
1934 Act.
The indemnity and contribution provisions contained in this Section 5
shall remain operative and in full force and effect regardless of (i) any
termination of this Agreement, (ii) any investigation made by or on behalf of
any Initial Purchaser, Holder or Participating Broker-Dealer or any Person
controlling any Initial Purchaser, Holder or Participating Broker-Dealer, or by
or on behalf of the Company or either Guarantor, their officers or directors or
any Person controlling the Company or either Guarantor, (iii) acceptance of any
of the Exchange Securities and (iv) any sale of Registrable Securities or
Exchange Securities pursuant to a Shelf Registration Statement.
6. Miscellaneous.
(a) Rule 144 and Rule 144A. For so long as the Company is subject to
the reporting requirements of Section 13 or 15(d) of the 1934 Act, the Company
covenants that it will file all reports required to be filed by it under Section
13(a) or 15(d) of the 1934 Act and the rules and regulations adopted by the SEC
thereunder, that if it ceases to be so required to file such reports, it will
upon the request of any Holder or beneficial owner of Registrable Securities (i)
make publicly available such information (including, without limitation, the
information specified in Rule 144(c)(2) under the 1933 Act) as is necessary to
permit sales pursuant to Rule 144 under the 1933 Act, (ii) deliver or cause to
be delivered, promptly following a request by any Holder or beneficial owner of
Registrable Securities or any prospective purchaser or transferee of Registrable
Securities designated by such Holder or beneficial owner, such information
(including, without limitation, the information specified in Rule 144A(d)(4)
under the 1933 Act) as is necessary to permit sales pursuant to Rule 144A under
the 1933 Act, and (iii) take such further action that is reasonable in the
circumstances, in each case to the extent required from time to time to enable
such Holder to sell its Registrable Securities without registration under the
1933 Act within the limitation of the exemptions provided by Rule 144, Rule 144A
or any similar rules or regulations hereafter adopted by the SEC. Upon the
request of any Holder or beneficial owner of Registrable Securities, the Company
will deliver to such Holder or beneficial owner a written statement as to
whether it has complied with such requirements. Notwithstanding the foregoing,
nothing in this Section 6(a) shall be deemed to require the Company to register
any of its securities pursuant to the 1934 Act.
(b) No Inconsistent Agreements. The Company has not entered into, nor
will the Company on or after the date of this Agreement enter into, any
agreement which is inconsistent with the rights granted to the Holders of
Registrable Securities in this Agreement or otherwise conflicts with the
provisions hereof. The rights granted to the Holders hereunder do not and will
not in any way conflict with and are not and will not be inconsistent with the
rights granted to the
23
holders of any of the Company's other issued and outstanding securities under
any other agreements entered into by the Company or any of its subsidiaries.
(c) Amendments and Waivers. The provisions of this Agreement, including
the provisions of this sentence, may not be amended, modified or supplemented,
and waivers or consents to departures from the provisions hereof may not be
given, unless the Company has obtained the written consent of Holders of a
majority in aggregate principal amount of the outstanding Registrable Securities
affected by such amendment, modification, supplement, waiver or departure. Each
Holder of Registrable Securities outstanding at the time of any such amendment,
modification, supplement, waiver or consent thereafter shall be bound by any
such amendment, modification, supplement, waiver or consent effected pursuant to
this Section 6(c), whether or not any notice, writing or marking indicating such
amendment, modification, supplement, waiver or consent appears on the
Registrable Securities or is delivered to such Holder. Each Holder may waive
compliance with respect to any obligation of the Company under this Agreement as
it may apply or be enforced by such particular Holder.
(d) Notices. All notices and other communications provided for or
permitted hereunder shall be made in writing by hand-delivery, first-class mail,
telecopier, or any courier guaranteeing overnight delivery (i) if to a Holder or
Participating Broker-Dealer (other than an Initial Purchaser), at the most
current address set forth on the records of the registrar under the Indenture,
(ii) if to an Initial Purchaser, at the most current address given by such
Initial Purchaser to the Company by means of a notice given in accordance with
the provisions of this Section 6(d), which address initially is the address set
forth in the Purchase Agreement; and (iii) if to the Company, initially at the
address set forth in the Purchase Agreement and thereafter at such other
address, notice of which is given in accordance with the provisions of this
Section 6(d) , with a copy to Baker Botts L.L.P., One Shell Plaza, 910 Louisiana
Street, Houston, Texas 77002, Telecopier No.: (713) 229-2779, Attention: Tull R.
Florey.
All such notices and communications shall be deemed to have been duly
given: at the time delivered by hand, if personally delivered; three business
days after being deposited in the mail, first class, postage prepaid, if mailed;
when receipt is acknowledged, if telecopied; and on the next business day if
timely delivered to an air courier guaranteeing overnight delivery.
Copies of all such notices, demands or other communications shall be
concurrently delivered by the Person giving the same to the Trustee, at the
address specified in the Indenture.
(e) Successors and Assigns. This Agreement shall inure to the benefit
of and be binding upon the successors, assigns and transferees of each of the
parties, including, without limitation and without the need for an express
assignment, subsequent Holders; provided that nothing herein shall be deemed to
permit any assignment, transfer or other disposition of Registrable Securities
in violation of the terms hereof or of the Purchase Agreement or the Indenture.
If any transferee of any Holder shall acquire Registrable Securities, in any
manner, whether by operation of law or otherwise, such Registrable Securities
shall be held subject to all of the terms of this Agreement, and by taking and
holding such Registrable Securities, such Person shall be conclusively deemed to
have agreed to be bound by and to perform all of the terms and provisions of
this Agreement, including the restrictions on resale set forth in this
24
Agreement and, if applicable, the Purchase Agreement, and such Person shall be
entitled to receive the benefits hereof.
(f) Third Party Beneficiary. Each Holder shall be a third party
beneficiary of the agreements made hereunder between the Company , on the one
hand, and the Initial Purchasers, on the other hand, and shall have the right to
enforce such agreements directly to the extent it deems such enforcement
necessary or advisable to protect its rights or the rights of other Holders
hereunder. Each Holder, by its acquisition of Securities, shall be deemed to
have agreed to the provisions of Section 5(b) hereof.
(g) Counterparts. This Agreement may be executed in any number of
counterparts and by the parties hereto in separate counterparts, each of which
when so executed shall be deemed to be an original and all of which taken
together shall constitute one and the same agreement.
(h) Headings. The headings in this Agreement are for convenience of
reference only and shall not limit or otherwise affect the meaning hereof.
(i) Restriction on Resales. Until the expiration of two years (or such
shorter period as may hereafter be referred to in Rule 144(k) under the 1933 Act
(or similar successor rule)) after the original issuance of the Securities,
without the prior written consent of the Initial Purchasers, the Issuer will
not, and will not permit any of its affiliates (as defined in Rule 501(b) under
the 1933 Act) to, resell any of the Securities that have been reacquired by
them, except for Securities purchased by the Issuer or any of its affiliates (as
defined in Rule 501(b) under the 1933 Act) and resold in a transaction
registered under the 1933 Act.
(j) GOVERNING LAW. THIS AGREEMENT SHALL BE GOVERNED BY AND CONSTRUED IN
ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK.
(k) Severability. In the event that any one or more of the provisions
contained herein, or the application thereof in any circumstance, is held
invalid, illegal or unenforceable, the validity, legality and enforceability of
any such provision in every other respect and of the remaining provisions
contained herein shall not be affected or impaired thereby.
[SIGNATURE PAGE FOLLOWS]
25
IN WITNESS WHEREOF, the parties hereto have executed this Agreement as
of the date first written above.
CONOCOPHILLIPS
By: /s/ Jeff W. Sheets
--------------------------------
Jeff W. Sheets
Vice President and Treasurer
Confirmed and accepted as of the date first above written:
BANC OF AMERICA SECURITIES LLC
J.P. MORGAN SECURITIES INC.
SALOMON SMITH BARNEY INC.
And the other parties referred to in Annex A hereto
By: BANC OF AMERICA SECURITIES LLC
By: /s/ Lily Chang
------------------
Lily Chang
Principal
For itself and on behalf of the other Initial Purchasers
ANNEX A
INITIAL PURCHASERS
Banc of America Securities LLC
J.P. Morgan Securities Inc.
Salomon Smith Barney Inc.
Barclays Capital Inc.
The Royal Bank of Scotland plc
ABN AMRO Incorporated
Banc One Capital Markets, Inc.
BNP Paribas Securities Corp.
Credit Suisse First Boston Corporation
Scotia Capital (USA) Inc.
SG Cowen Securities Corporation
A-1
ANNEX B
PLAN OF DISTRIBUTION
Each broker-dealer that receives new notes for its own account under
the exchange offer must acknowledge that it will deliver a prospectus in
connection with any resale of those notes. This prospectus, as it may be amended
or supplemented from time to time, may be used by a broker-dealer for resales of
new notes received in exchange for original notes that had been acquired as a
result of market-making or other trading activities. We have agreed that, for a
period of 180 days after the expiration date of the exchange offer, we will make
this prospectus, as it may be amended or supplemented, available to any
broker-dealer for use in connection with any such resale. Any broker-dealers
required to use this prospectus and any amendments or supplements to this
prospectus for resales of the new notes must notify us of this fact by checking
the box on the letter of transmittal requesting additional copies of these
documents.
Notwithstanding the foregoing, we are entitled under the registration
rights agreement to suspend the use of this prospectus by broker-dealers under
specified circumstances. For example, we may suspend the use of this prospectus
if:
- the SEC or any state securities authority requests an
amendment or supplement to this prospectus or the related
registration statement or additional information;
- the SEC or any state securities authority issues any stop
order suspending the effectiveness of the registration
statement or initiates proceedings for that purpose;
- we receive notification of the suspension of the qualification
of the new notes for sale in any U.S. jurisdiction or the
initiation or threatening of any proceeding for that purpose;
- the suspension is required by law;
- the suspension is taken by us in good faith and for valid
business reason, including the possible acquisition or
divestiture of assets or a material corporate transaction or
event; or
- an event occurs which makes any statement in this prospectus
untrue in any material respect or which constitutes an
omission to state a material fact in this prospectus.
If we suspend the use of this prospectus, the 180-day period referred
to above will be extended by a number of days equal to the period of the
suspension.
We will not receive any proceeds from any sale of new notes by
broker-dealers. New notes received by broker-dealers for their own account under
the exchange offer may be sold from time to time in one or more transactions in
the over-the-counter market, in negotiated transactions, through the writing of
options on those notes or a combination of those methods of resale, at market
prices prevailing at the time of resale, at prices related to prevailing market
B-1
prices or at negotiated prices. Any resales may be made directly to purchasers
or to or through brokers or dealers who may receive compensation in the form of
commissions or concessions from the selling broker-dealer or the purchasers of
the new notes. Any broker-dealer that resells new notes received by it for its
own account under the exchange offer and any broker or dealer that participates
in a distribution of the new notes may be deemed to be an "underwriter" within
the meaning of the Securities Act and any profit on any resale of new notes and
any commissions or concessions received by these persons may be deemed to be
underwriting compensation under the Securities Act. The letter of transmittal
states that, by acknowledging that it will deliver and by delivering a
prospectus, a broker- dealer will not be deemed to admit that it is an
"underwriter" within the meaning of the Securities Act.
We have agreed to pay all expenses incidental to the exchange offer,
including the expenses of one counsel for the holders of old notes, other than
commissions and concessions of any broker or dealer and will indemnify holders
of the new notes, including any broker-dealers, against certain liabilities,
including liabilities under the Securities Act or contribute to payments that
they may be required to make in request thereof.
B-2
EXHIBIT 4.3
CONOCOPHILLIPS
3.625% Notes due 2007
4.75% Notes due 2012
5.90% Notes due 2032
Fully and Unconditionally Guaranteed by
CONOCO INC. AND PHILLIPS PETROLEUM COMPANY
Three series of Securities are hereby established pursuant to
Section 2.01 of the Indenture dated as of October 9, 2002 (the "Indenture")
among ConocoPhillips, as issuer (the "Company"), Conoco Inc. and Phillips
Petroleum Company, as guarantors (collectively, the "Guarantors"), and The Bank
of New York, as trustee (the "Trustee"), as follows:
1. Each capitalized term used but not defined herein shall
have the meaning assigned to such term in the Indenture.
2. The title of the 3.625% Notes due 2007 shall be "3.625%
Notes due 2007" (the "2007 Notes"), the title of the 4.75% Notes due 2012 shall
be "4.75% Notes due 2012" (the "2012 Notes") and the title of the 5.90% Notes
due 2032 shall be "5.90% Notes due 2032" (the "2032 Notes" and, together with
the 2007 Notes and the 2012 Notes, the "Notes").
3. The limit upon the aggregate principal amount of the 2007
Notes, the 2012 and the 2032 Notes that may be authenticated and delivered under
the Indenture (except for Notes of such series authenticated and delivered upon
registration of transfer of, or in exchange for, or in lieu of, other Notes of
such series pursuant to Section 2.08, 2.09, 2.12, 2.17, 3.07 or 9.05 of the
Indenture and except for any Notes of such series which, pursuant to Section
2.04 or 2.17 of the Indenture, are deemed never to have been authenticated and
delivered thereunder) is $400,000,000, $1,000,000,000 and $600,000,000,
respectively; provided, however, that the authorized aggregate principal amount
of the 2007 Notes, the 2012 Notes and the 2032 Notes may be increased before or
after the issuance of any Notes of such series by a Board Resolution (or action
pursuant to a Board Resolution) to such effect; provided further, however, that
the authorized aggregate principal amount of the 2007 Notes, the 2012 Notes and
the 2032 Notes may be increased only if the additional Notes issued will be
fungible with the original Notes of such series for United States federal income
tax purposes.
4. The Notes of each series shall be issued upon original
issuance in whole in the form of one or more Global Securities (the "Global
Notes"). The Notes of each series which are initially sold to "qualified
institutional buyers" ("QIBs") under Rule 144A of the Securities Act of 1933, as
amended (the "Securities Act"), and to institutional "accredited investors" (as
defined in Rule 501(a)(1), (2), (3) or (7) under the Securities Act)
("Institutional Accredited Investors") shall be issued as permanent Global
Securities of such series under the Indenture (the "Rule 144A Global Note" and
the "IAI Global Note," respectively, of such series). The Notes of each series
which are initially sold to non-U.S. persons outside the United States in
offshore transactions in reliance on Regulation S under the Securities Act shall
initially be issued as temporary Global Securities of such series under the
Indenture (the "Temporary Regulation S
Global Note" of such series). Upon expiration of a 40-day "distribution
compliance period" as defined in Regulation S under the Securities Act (the
"Distribution Compliance Period"), and upon the receipt by the Trustee of a
written certificate from the Depositary, together with copies of certificates
from Euroclear Bank S.A./N.V. ("Euroclear"), as operator of the Euroclear
System, and Clearstream Banking, societe anonyme ("Clearstream"), certifying
that they have received certification of non-United States beneficial ownership
of 100% of the aggregate principal amount of the Temporary Regulation S Global
Note of a series (except to the extent of any beneficial owners thereof who
acquired an interest therein during the Distribution Compliance Period pursuant
to another exemption from registration under the Securities Act, or in a
transaction not subject to registration under the Securities Act, and who will
take delivery of a beneficial ownership interest in a Rule 144A Global Note or
an IAI Global Note of such series), the Temporary Regulation S Global Note of
such series shall become permanent Global Securities of such series under the
Indenture (the "Permanent Regulation S Global Note" of such series), and
beneficial interests in such Temporary Regulation S Global Note shall become
beneficial interests in the Permanent Regulation S Global Note. Notwithstanding
Section 2.17 of the Indenture, in no event shall beneficial interests in the
Temporary Regulation S Global Note of a series be transferred or exchanged for
Notes of such series in definitive form prior to (x) the expiration of the
Distribution Compliance Period and (y) the receipt by the Registrar of any
certificates required pursuant to Rule 903(b)(3)(ii)(B) of Regulation S under
the Securities Act. The Depository Trust Company and the Trustee are hereby
designated as the Depositary and the Security Custodian, respectively, for the
Global Notes under the Indenture.
5. The date on which the principal of the 2007 Notes, the 2012
Notes and the 2032 Notes is payable shall be October 15, 2007, October 15, 2012
and October 15, 2032, respectively.
6. The rate at which the 2007 Notes shall bear interest shall
be 3.625% per annum, the rate at which the 2012 Notes shall bear interest shall
be 4.75% per annum and the rate at which the 2032 Notes shall bear interest
shall be 5.90% per annum. Interest shall be computed on the basis of a 360-day
year of twelve 30-day months. No Additional Amounts with respect to the Notes
shall be payable. The date from which interest shall accrue for the Notes of
each series shall be October 9, 2002. The Interest Payment Dates on which such
interest shall be payable shall be April 15 and October 15 of each year,
commencing April 15, 2003. The record dates for the interest payable on the
Notes on any Interest Payment Date shall be the April 1 or October 1, as the
case may be, next preceding such Interest Payment Date.
7. The place or places where the principal of, premium (if
any) on and interest on the Notes shall be payable shall be the office or agency
of the Company maintained for that purpose, initially the office of the Trustee,
in The City of New York, and any other office or agency maintained by the
Company for such purpose. Payments in respect of Global Notes (including
principal, premium, if any, and interest) shall be made by wire transfer of
immediately available funds to the accounts specified by the Holder of such
Notes. In all other cases, at the option of the Company, payment of interest may
be made by check mailed to the address of the person entitled thereto as such
address shall appear in the register of the Notes maintained by the Registrar.
8. The Paying Agent and Registrar for the Notes of each series
initially shall be the Trustee. In addition, as long as the Notes of any series
are listed on the Luxembourg
2
Stock Exchange, the Company shall maintain a Paying Agent and Registrar for the
Notes of such series in Luxembourg, which initially shall be The Bank of New
York (Luxembourg) S.A.
9. The Notes of each series are subject to redemption, in
whole or in part, at any time and from time to time, at the option of the
Company, upon not less than 30 nor more than 60 days' prior notice as provided
in the Indenture, at a Redemption Price equal to the sum of (i) 100% of the
principal amount of the Notes of such series to be redeemed and (ii) the amount,
if any, by which the sum of the present values of the Remaining Scheduled
Payments thereon, discounted to the Redemption Date on a semi-annual basis
(assuming a 360-day year consisting of twelve 30-day months) at the Treasury
Rate plus 15 basis points for the 2007 Notes, 20 basis points for the 2012 Notes
and 20 basis points for the 2032 Notes, exceeds the principal amount of the
Notes to be redeemed, in each case plus accrued and unpaid interest thereon to
the Redemption Date.
"Treasury Rate" means, with respect to any Redemption Date,
the rate per annum equal to (i) the yield, under the heading which represents
the average for the immediately preceding week, appearing in the most recently
published statistical release designated "H.15 (519)" or any successor
publication which is published weekly by the Board of Governors of the Federal
Reserve System and which establishes yields on actively traded United States
Treasury securities adjusted to constant maturity under the caption "Treasury
Constant Maturities," for the maturity corresponding to the Comparable Treasury
Issue; provided that if no maturity is within three months before or after the
Stated Maturity for the applicable series of Notes, yields for the two published
maturities most closely corresponding to the Comparable Treasury Issue will be
determined and the Treasury Rate will be interpolated or extrapolated from such
yields on a straight-line basis rounding to the nearest month; or (ii) if such
release (or any successor release) is not published during the week preceding
such calculation date or does not contain such yields, the rate per annum equal
to the semiannual equivalent yield to maturity of the Comparable Treasury Issue,
calculated using a price for the Comparable Treasury Issue (expressed as a
percentage of its principal amount) equal to the Comparable Treasury Price for
such Redemption Date. The Treasury Rate shall be calculated on the third
Business Day preceding such Redemption Date.
"Comparable Treasury Issue" means the United States Treasury
security selected by an Independent Investment Banker that would be used, at the
time of selection and in accordance with customary financial practice, in
pricing new issues of corporate debt securities of comparable maturity to the
remaining term of the applicable series of Notes.
"Independent Investment Banker" means one of the Reference
Treasury Dealers appointed by the Company.
"Comparable Treasury Price" means, with respect to any
Redemption Date, (i) the average of the Reference Treasury Dealer Quotations for
such Redemption Date, after excluding the highest and lowest of such Reference
Treasury Dealer Quotations, or (ii) if the Trustee obtains fewer than four such
Reference Treasury Dealer Quotations, the average of all such Quotations.
"Reference Treasury Dealer" means each of Banc of America
Securities LLC (and its successors), J.P. Morgan Securities Inc. (and its
successors), Salomon Smith Barney Inc.
3
(and its successors) and one other nationally recognized investment banking firm
that is a primary U.S. Government securities dealer (a "Primary Treasury
Dealer") specified from time to time by the Company; provided, however, that if
any of the foregoing shall cease to be a Primary Treasury Dealer, the Company
shall substitute therefor another nationally recognized investment banking firm
that is a Primary Treasury Dealer.
"Reference Treasury Dealer Quotations" means, with respect to
each Reference Treasury Dealer and any Redemption Date, the average, as
determined by the Trustee, of the bid and asked prices for the Comparable
Treasury Issue (expressed in each case as a percentage of its principal amount)
quoted in writing to the Trustee by such Reference Treasury Dealer as of 3:30
p.m., New York time, on the third Business Day preceding such Redemption Date.
"Remaining Scheduled Payments" means, with respect to each
Note to be redeemed, the remaining scheduled payments of the principal thereof
and interest thereon that would be due after the related Redemption Date but for
such redemption; provided, however, that, if such Redemption Date is not an
Interest Payment Date with respect to such Note, the amount of the next
succeeding scheduled interest payment thereon will be reduced by the amount of
interest accrued thereon to such Redemption Date.
10. The Company shall have no obligation to redeem, purchase
or repay Notes pursuant to any sinking fund or analogous provision or at the
option of a Holder thereof.
11. The Notes and the Trustee's certificate of authentication
shall be substantially in the form of Annex A hereto (the "Form of Note").
12. Legends.
(i) Each Global Note shall bear the legend set forth on the
face of the Form of Note.
(ii) Each Temporary Regulation S Global Note shall bear a
legend in substantially the following form:
THE RIGHTS ATTACHING TO THIS SECURITY, AND THE
CONDITIONS AND PROCEDURES GOVERNING ITS EXCHANGE FOR
CERTIFICATED SECURITIES, ARE AS SPECIFIED IN THIS SECURITY AND
PURSUANT TO THE INDENTURE (AS DEFINED HEREIN).
(iii) Except as permitted by the following paragraphs (iv) and
(v), each certificate evidencing the Notes shall bear a legend (the "Private
Placement Legend") substantially in the following form and shall be subject to
the transfer restrictions set forth therein:
THIS SECURITY HAS NOT BEEN REGISTERED UNDER THE
SECURITIES ACT OF 1933, AS AMENDED (THE "SECURITIES ACT"), OR
ANY STATE OR OTHER SECURITIES LAWS. NEITHER THIS SECURITY NOR
ANY INTEREST OR PARTICIPATION HEREIN MAY BE REOFFERED, SOLD,
ASSIGNED, TRANSFERRED, PLEDGED, ENCUMBERED OR OTHERWISE
DISPOSED OF IN THE ABSENCE OF
4
THAT REGISTRATION OR UNLESS THE TRANSACTION IS EXEMPT FROM, OR
NOT SUBJECT TO, THE REGISTRATION REQUIREMENTS OF THE
SECURITIES ACT. BY ITS ACQUISITION HEREOF, THE HOLDER (1)
REPRESENTS THAT IT IS (A) A "QUALIFIED INSTITUTIONAL BUYER"
(AS DEFINED IN RULE 144A ("RULE 144A") UNDER THE SECURITIES
ACT), (B) AN INSTITUTIONAL "ACCREDITED INVESTOR" WITHIN THE
MEANING OF SUBPARAGRAPHS (a)(1), (2), (3) OR (7) OF RULE 501
UNDER THE SECURITIES ACT (AN "INSTITUTIONAL ACCREDITED
INVESTOR") THAT IS ACQUIRING THIS SECURITY FOR ITS OWN ACCOUNT
OR FOR THE ACCOUNT OF ANOTHER INSTITUTIONAL ACCREDITED
INVESTOR, IN EACH CASE IN A MINIMUM PRINCIPAL AMOUNT OF THE
SECURITIES OF NOT LESS THAN $100,000, FOR INVESTMENT PURPOSES
AND NOT WITH A VIEW TO, OR FOR OFFER OR SALE IN CONNECTION
WITH, ANY DISTRIBUTION HEREOF IN VIOLATION OF THE SECURITIES
ACT, OR (C) A PERSON THAT, AT THE TIME THE BUY ORDER FOR THIS
SECURITY WAS ORIGINATED, WAS OUTSIDE THE UNITED STATES AND WAS
NOT A U.S. PERSON (AND WAS NOT PURCHASING FOR THE ACCOUNT OR
BENEFIT OF A U.S. PERSON), (2) AGREES NOT TO OFFER, SELL OR
OTHERWISE TRANSFER THIS SECURITY PRIOR TO (X) THE DATE THAT IS
TWO YEARS (OR SUCH SHORTER PERIOD OF TIME AS PERMITTED BY RULE
144(k) OF THE SECURITIES ACT) AFTER THE LATER OF THE ORIGINAL
ISSUE DATE OF THE SECURITIES AND THE LAST DATE ON WHICH
CONOCOPHILLIPS OR ANY "AFFILIATE" (AS DEFINED IN RULE 144
UNDER THE SECURITIES ACT) OF CONOCOPHILLIPS WAS THE OWNER OF
THIS SECURITY (OR ANY PREDECESSOR OF THIS SECURITY) OR (Y)
SUCH LATER DATE, IF ANY, AS MAY BE REQUIRED BY APPLICABLE LAW
(THE "RESALE RESTRICTION TERMINATION DATE"), EXCEPT (A) TO
CONOCOPHILLIPS, (B) PURSUANT TO A REGISTRATION STATEMENT THAT
HAS BEEN DECLARED EFFECTIVE UNDER THE SECURITIES ACT, (C) FOR
SO LONG AS THIS SECURITY IS ELIGIBLE FOR RESALE PURSUANT TO
RULE 144A, TO A PERSON IT REASONABLY BELIEVES IS A "QUALIFIED
INSTITUTIONAL BUYER" (AS DEFINED IN RULE 144A) THAT PURCHASES
FOR ITS OWN ACCOUNT OR FOR THE ACCOUNT OF A QUALIFIED
INSTITUTIONAL BUYER, IN EACH CASE TO WHOM NOTICE IS GIVEN THAT
THE TRANSFER IS BEING MADE IN RELIANCE ON RULE 144A, (D) TO A
NON-U.S. PERSON IN AN OFFSHORE TRANSACTION IN ACCORDANCE WITH
RULE 903 OR RULE 904 OF REGULATION S UNDER THE SECURITIES ACT,
(E) TO AN INSTITUTIONAL ACCREDITED INVESTOR THAT IS ACQUIRING
THIS SECURITY FOR ITS OWN ACCOUNT OR FOR THE ACCOUNT OF
ANOTHER INSTITUTIONAL ACCREDITED INVESTOR, IN EACH CASE IN A
MINIMUM PRINCIPAL AMOUNT OF THE SECURITIES OF NOT LESS THAN
$100,000, FOR INVESTMENT PURPOSES AND NOT WITH A VIEW TO, OR
FOR OFFER OR SALE IN CONNECTION WITH, ANY DISTRIBUTION HEREOF
IN VIOLATION OF THE SECURITIES ACT, (F) PURSUANT TO AN
EXEMPTION FROM THE REGISTRATION REQUIREMENTS OF THE SECURITIES
ACT PROVIDED
5
BY RULE 144 THEREUNDER (IF AVAILABLE) OR (G) PURSUANT TO ANY
OTHER AVAILABLE EXEMPTION FROM THE REGISTRATION REQUIREMENTS
OF THE SECURITIES ACT, SUBJECT IN EACH OF THE FOREGOING CASES
TO COMPLIANCE WITH ANY APPLICABLE STATE OR OTHER SECURITIES
LAWS, AND (3) AGREES THAT IT WILL GIVE TO EACH PERSON TO WHOM
THIS SECURITY IS TRANSFERRED A NOTICE SUBSTANTIALLY TO THE
EFFECT OF THIS LEGEND; PROVIDED THAT (I) PRIOR TO ANY SALE OR
TRANSFER PURSUANT TO CLAUSE (E) A CERTIFICATE OF TRANSFER (THE
FORM OF WHICH MAY BE OBTAINED FROM THE TRUSTEE) IS COMPLETED
BY THE TRANSFEREE AND DELIVERED BY THE TRANSFEROR TO
CONOCOPHILLIPS AND THE TRUSTEE AND (II) CONOCOPHILLIPS AND THE
TRUSTEE SHALL HAVE THE RIGHT PRIOR TO ANY OFFER, SALE OR
TRANSFER OF THIS SECURITY PURSUANT TO CLAUSE (D), (E), (F) OR
(G) TO REQUIRE THE DELIVERY OF AN OPINION OF COUNSEL,
CERTIFICATIONS AND/OR OTHER INFORMATION SATISFACTORY TO EACH
OF THEM. THIS LEGEND WILL BE REMOVED UPON THE EARLIER OF THE
TRANSFER OF THE SECURITY EVIDENCED HEREBY PURSUANT TO CLAUSE
2(B) ABOVE OR UPON THE REQUEST OF THE HOLDER AFTER THE RESALE
RESTRICTION TERMINATION DATE. AS USED HEREIN, THE TERMS
"UNITED STATES," "OFFSHORE TRANSACTION," AND "U.S. PERSON"
HAVE THE RESPECTIVE MEANINGS GIVEN TO THEM BY REGULATION S
UNDER THE SECURITIES ACT.
(iv) Upon any sale or transfer of a Registrable Security (as
defined in the Registration Rights Agreement dated as of October 9, 2002 (the
"Registration Rights Agreement") between the Company and the Initial Purchasers
named therein), including any Registrable Security in the form of a Global Note,
pursuant to Rule 144 under the Securities Act or an effective registration
statement under the Securities Act, which shall be certified to the Trustee and
the Registrar upon which each may conclusively rely:
(a) in the case of any Registrable Security in definitive form
(other than in the form of a Global Security), the Registrar shall
permit the Holder thereof to exchange such Registrable Security for a
Note in definitive form that does not bear the Private Placement Legend
and rescind any restriction on the transfer of such Registrable
Security; and
(b) in the case of any Registrable Security in the form of a
Global Security, such Registrable Security shall not be required to
bear the Private Placement Legend if all other interests in such Global
Security have been or are concurrently being sold or transferred
pursuant to Rule 144 under the Securities Act or pursuant to an
effective registration statement under the Securities Act, but such
Security shall continue to be subject to the provisions of Sections
2.08 and 2.17 of the Indenture and this paragraph 12.
(v) Notwithstanding the foregoing, upon consummation of the
Exchange Offer (as defined in the Registration Rights Agreement), the Company
shall issue, the Guarantors shall execute and, upon receipt of an authentication
order in accordance with Section
6
2.04 of the Indenture, the Trustee shall authenticate Notes ("Exchange Notes")
in exchange for Notes accepted for exchange in the Exchange Offer, which
Exchange Notes shall not bear the Private Placement Legend, and the Registrar
shall rescind any restriction on the transfer of such Exchange Notes, in each
case unless the Holder of Notes accepted for exchange in the Exchange Offer (1)
is an affiliate of the Company or either Guarantor within the meaning of Rule
405 under the Securities Act or an Initial Purchaser (as defined in the
Registration Rights Agreement) holding Notes acquired by it and having the
status of an unsold allotment in the initial offering and sale of Notes pursuant
to the Purchase Agreement (as defined in the Registration Rights Agreement), (2)
does not acquire the Exchange Notes in the ordinary course of such Holder's
business or (3) has an arrangement or understanding with any Person to
participate in the Exchange Offer for the purpose of distributing such Exchange
Notes or is engaged in, and intends to engage in, any such distribution. The
Company shall identify to the Trustee and the Registrar such Holders of the
Notes in a written certification signed by an Officer of the Company and, absent
certification from the Company to such effect, the Trustee and the Registrar
shall assume that there are no such Holders.
13. Transfer and Exchange.
(i) Transfer and Exchange of Notes in Definitive Form. In
addition to the requirements set forth in Section 2.08 of the Indenture, Notes
in definitive form that are Registrable Securities presented or surrendered for
registration of transfer or exchange pursuant to Section 2.08 of the Indenture
shall be accompanied by the following additional information and documents, as
applicable, upon which the Registrar may conclusively rely:
(a) if such Registrable Securities are being delivered to the
Registrar by a Holder for registration in the name of such Holder,
without transfer, a certification from such Holder to that effect (in
substantially the form of Annex B hereto);
(b) if such Registrable Securities are being transferred (1)
to a QIB in accordance with Rule 144A under the Securities Act or (2)
pursuant to an exemption from registration in accordance with Rule 144
under the Securities Act (and based upon an opinion of counsel if the
Company or the Trustee so requests) or (3) pursuant to an effective
registration statement under the Securities Act, a certification to
that effect from such Holder (in substantially the form of Annex B
hereto);
(c) if such Registrable Securities are being transferred to an
Institutional Accredited Investor in accordance with Regulation D under
the Securities Act pursuant to a private placement exemption from the
registration requirements of the Securities Act, a certification to
that effect from such Holder (in substantially the form of Annex B
hereto) and a certification from the applicable transferee (in
substantially the form of Annex C hereto) and an opinion of counsel to
that effect if the Company or the Trustee so requests;
(d) if such Registrable Securities are being transferred
pursuant to an exemption from registration in accordance with Rule 903
or Rule 904 of Regulation S under the Securities Act, certifications to
that effect from such Holder (in substantially the form of Annexes B
and D hereto) and an opinion of counsel to that effect if the Company
or the Trustee so requests; or
7
(e) if such Registrable Securities are being transferred in
reliance on and in compliance with another exemption from the
registration requirements of the Securities Act, a certification to
that effect from such Holder (in substantially the form of Annex B
hereto) and an opinion of counsel to that effect if the Company or the
Trustee so requests.
(ii) Transfer and Exchange of Global Notes. The transfer and
exchange of Global Notes or beneficial interests therein shall be effected
through the Depositary, in accordance with Section 2.17 of the Indenture and
paragraphs 12 and 13 hereof (including the restrictions on transfer set forth
therein and herein) and the rules and procedures of the Depositary therefor,
which shall include restrictions on transfer comparable to those set forth
therein and herein to the extent required by the Securities Act; provided,
however, that prior to the expiration of the Distribution Compliance Period,
transfers and exchanges of beneficial interests in the Temporary Regulation S
Global Note may be made pursuant to such restrictions only (1) to a Person that
is not a U.S. person or for the account or benefit of a Person that is not a
U.S. person (other than an Initial Purchaser) within the meaning of Regulation S
under the Securities Act, (2) to a QIB or (3) to an Institutional Accredited
Investor, in each case that hold such interests through Euroclear or
Clearstream.
8
Annex A
[FORM OF FACE OF SECURITY]
[Rule 144A Global Security]
[Regulation S Global Security]
[Accredited Investor Global Security]
[Unless and until it is exchanged in whole or in part for Securities in
definitive form, this Security may not be transferred except as a whole by the
Depositary to a nominee of the Depositary or by a nominee of the Depositary to
the Depositary or another nominee of the Depositary or by the Depositary or any
such nominee to a successor Depositary or a nominee of such successor
Depositary. The Depository Trust Company (55 Water Street, New York, New York),
a New York corporation ("DTC"), shall act as the Depositary until a successor
shall be appointed by the Company and the Registrar. Unless this certificate is
presented by an authorized representative of DTC to the issuer or its agent for
registration of transfer, exchange or payment, and any certificate issued is
registered in the name of Cede & Co. or in such other name as is requested by an
authorized representative of DTC (and any payment is made to Cede & Co. or to
such other entity as is requested by an authorized representative of DTC), ANY
TRANSFER, PLEDGE OR OTHER USE HEREOF FOR VALUE OR OTHERWISE BY OR TO ANY PERSON
IS WRONGFUL inasmuch as the registered owner hereof, Cede & Co., has an interest
herein.]*
CONOCOPHILLIPS
[3.625% NOTE DUE 2007] [4.75% NOTE DUE 2012] [5.90% NOTE DUE 2032]
FULLY AND UNCONDITIONALLY GUARANTEED BY
CONOCO INC. AND PHILLIPS PETROLEUM COMPANY
CUSIP No._____________
No.___________ $_____________
ConocoPhillips, a Delaware corporation (the "Company," which
term includes any successor Person under the Indenture hereinafter referred to),
for value received, promises to pay to ____________ or registered assigns, the
principal sum of ______________________ Dollars[, or such greater or lesser
amount as indicated on the Schedule of Exchanges of Securities hereto,]* on
October 15, [2007][2012] [2032].
Interest Payment Dates: April 15 and October 15
Record Dates: April 1 and October 1
Reference is hereby made to the further provisions of this
Security set forth on the reverse hereof, which further provisions shall for all
purposes have the same effect as if set forth at this place.
[THE RIGHTS ATTACHING TO THIS SECURITY, AND THE CONDITIONS AND
PROCEDURES GOVERNING ITS EXCHANGE FOR CERTIFICATED SECURITIES, ARE AS SPECIFIED
IN THIS SECURITY AND PURSUANT TO THE INDENTURE (AS DEFINED HEREIN).]**
THIS SECURITY HAS NOT BEEN REGISTERED UNDER THE SECURITIES ACT
OF 1933, AS AMENDED (THE "SECURITIES ACT"), OR ANY STATE OR OTHER SECURITIES
LAWS. NEITHER THIS SECURITY NOR ANY INTEREST OR PARTICIPATION HEREIN MAY BE
REOFFERED, SOLD, ASSIGNED, TRANSFERRED, PLEDGED, ENCUMBERED OR OTHERWISE
DISPOSED OF IN THE ABSENCE OF THAT REGISTRATION OR UNLESS THE TRANSACTION IS
EXEMPT FROM, OR NOT SUBJECT TO, THE REGISTRATION REQUIREMENTS OF THE SECURITIES
ACT. BY ITS ACQUISITION HEREOF, THE HOLDER (1) REPRESENTS THAT IT IS (A) A
"QUALIFIED INSTITUTIONAL BUYER" (AS DEFINED IN RULE 144A ("RULE 144A") UNDER THE
SECURITIES ACT), (B) AN INSTITUTIONAL "ACCREDITED INVESTOR" WITHIN THE MEANING
OF SUBPARAGRAPHS (a)(1), (2), (3) OR (7) OF RULE 501 UNDER THE SECURITIES ACT
(AN "INSTITUTIONAL ACCREDITED INVESTOR") THAT IS ACQUIRING THIS SECURITY FOR ITS
OWN ACCOUNT OR FOR THE ACCOUNT OF ANOTHER INSTITUTIONAL ACCREDITED INVESTOR, IN
EACH CASE IN A MINIMUM PRINCIPAL AMOUNT OF THE SECURITIES OF NOT LESS THAN
$100,000, FOR INVESTMENT PURPOSES AND NOT WITH A VIEW TO, OR FOR OFFER OR SALE
IN CONNECTION WITH, ANY DISTRIBUTION HEREOF IN VIOLATION OF THE SECURITIES ACT,
OR (C) A PERSON THAT, AT THE TIME THE BUY ORDER FOR THIS SECURITY WAS
ORIGINATED, WAS OUTSIDE THE UNITED STATES AND WAS NOT A U.S. PERSON (AND WAS NOT
PURCHASING FOR THE ACCOUNT OR BENEFIT OF A U.S. PERSON), (2) AGREES NOT TO
OFFER, SELL OR OTHERWISE TRANSFER THIS SECURITY PRIOR TO (X) THE DATE THAT IS
TWO YEARS (OR SUCH SHORTER PERIOD OF TIME AS PERMITTED BY RULE 144(k) OF THE
SECURITIES ACT) AFTER THE LATER OF THE ORIGINAL ISSUE DATE OF THE SECURITIES AND
THE LAST DATE ON WHICH CONOCOPHILLIPS OR ANY "AFFILIATE" (AS DEFINED IN RULE 144
UNDER THE SECURITIES ACT) OF CONOCOPHILLIPS WAS THE OWNER OF THIS SECURITY (OR
ANY PREDECESSOR OF THIS SECURITY) OR (Y) SUCH LATER DATE, IF ANY, AS MAY BE
REQUIRED BY APPLICABLE LAW (THE "RESALE RESTRICTION TERMINATION DATE"), EXCEPT
(A) TO CONOCOPHILLIPS, (B) PURSUANT TO A REGISTRATION STATEMENT THAT HAS BEEN
DECLARED EFFECTIVE UNDER THE SECURITIES ACT, (C) FOR SO LONG AS THIS SECURITY IS
ELIGIBLE FOR RESALE PURSUANT TO RULE 144A, TO A PERSON IT REASONABLY BELIEVES IS
A "QUALIFIED INSTITUTIONAL BUYER" (AS DEFINED IN RULE 144A) THAT PURCHASES FOR
ITS OWN ACCOUNT OR FOR THE ACCOUNT OF A QUALIFIED INSTITUTIONAL BUYER, IN EACH
CASE TO WHOM NOTICE IS GIVEN THAT THE TRANSFER IS BEING MADE IN RELIANCE ON RULE
144A, (D) TO A NON-U.S. PERSON IN AN OFFSHORE TRANSACTION IN ACCORDANCE WITH
RULE 903 OR RULE 904 OF REGULATION S UNDER THE SECURITIES ACT, (E) TO AN
INSTITUTIONAL ACCREDITED INVESTOR THAT IS ACQUIRING THIS SECURITY FOR ITS OWN
ACCOUNT OR FOR THE ACCOUNT OF ANOTHER INSTITUTIONAL ACCREDITED INVESTOR, IN EACH
CASE IN A MINIMUM PRINCIPAL AMOUNT OF THE SECURITIES OF NOT LESS THAN $100,000,
FOR INVESTMENT PURPOSES AND NOT WITH A VIEW TO, OR FOR OFFER OR SALE IN
CONNECTION WITH, ANY
A-2
DISTRIBUTION HEREOF IN VIOLATION OF THE SECURITIES ACT, (F) PURSUANT TO AN
EXEMPTION FROM THE REGISTRATION REQUIREMENTS OF THE SECURITIES ACT PROVIDED BY
RULE 144 THEREUNDER (IF AVAILABLE) OR (G) PURSUANT TO ANY OTHER AVAILABLE
EXEMPTION FROM THE REGISTRATION REQUIREMENTS OF THE SECURITIES ACT, SUBJECT IN
EACH OF THE FOREGOING CASES TO COMPLIANCE WITH ANY APPLICABLE STATE OR OTHER
SECURITIES LAWS, AND (3) AGREES THAT IT WILL GIVE TO EACH PERSON TO WHOM THIS
SECURITY IS TRANSFERRED A NOTICE SUBSTANTIALLY TO THE EFFECT OF THIS LEGEND;
PROVIDED THAT (I) PRIOR TO ANY SALE OR TRANSFER PURSUANT TO CLAUSE (E) A
CERTIFICATE OF TRANSFER (THE FORM OF WHICH MAY BE OBTAINED FROM THE TRUSTEE) IS
COMPLETED BY THE TRANSFEREE AND DELIVERED BY THE TRANSFEROR TO CONOCOPHILLIPS
AND THE TRUSTEE AND (II) CONOCOPHILLIPS AND THE TRUSTEE SHALL HAVE THE RIGHT
PRIOR TO ANY OFFER, SALE OR TRANSFER OF THIS SECURITY PURSUANT TO CLAUSE (D),
(E), (F) OR (G) TO REQUIRE THE DELIVERY OF AN OPINION OF COUNSEL, CERTIFICATIONS
AND/OR OTHER INFORMATION SATISFACTORY TO EACH OF THEM. THIS LEGEND WILL BE
REMOVED UPON THE EARLIER OF THE TRANSFER OF THE SECURITY EVIDENCED HEREBY
PURSUANT TO CLAUSE 2(B) ABOVE OR UPON THE REQUEST OF THE HOLDER AFTER THE RESALE
RESTRICTION TERMINATION DATE. AS USED HEREIN, THE TERMS "UNITED STATES,"
"OFFSHORE TRANSACTION," AND "U.S. PERSON" HAVE THE RESPECTIVE MEANINGS GIVEN TO
THEM BY REGULATION S UNDER THE SECURITIES ACT.
A-3
IN WITNESS WHEREOF, the Company has caused this Security to be
signed manually or by facsimile by its duly authorized officers.
Dated:
CONOCOPHILLIPS
By:
--------------------------------------
Name:
Title:
By:
--------------------------------------
Name:
Title:
GUARANTEE
Conoco Inc., a Delaware corporation formerly incorporated
under the name Conoco Energy Company, and Phillips Petroleum Company, a Delaware
corporation, jointly and severally, unconditionally guarantee to the holder of
this Security, upon the terms and subject to the conditions set forth in the
Indenture referenced on the reverse hereof, (a) the full and prompt payment of
the principal of and any premium on this Security when and as the same shall
become due, whether at the stated maturity thereof, by acceleration, redemption
or otherwise, and (b) the full and prompt payment of interest on this Security
when and as the same shall become due, subject to any applicable grace period.
CONOCO INC.
By:
-------------------------------------
Name:
Title:
PHILLIPS PETROLEUM COMPANY
By:
-------------------------------------
Name:
Title:
A-4
Certificate of Authentication:
This is one of the Securities of the series designated therein referred to in
the within-mentioned Indenture.
THE BANK OF NEW YORK, as Trustee
By:
---------------------------------------
Authorized Signatory
- ------------------
* To be included only if the Security is a Global Security.
** To be included only on a Temporary Regulation S Global Security.
A-5
[FORM OF REVERSE OF SECURITY]
CONOCOPHILLIPS
[3.625% NOTE DUE 2007] [4.75% NOTE DUE 2012] [5.90% NOTE DUE 2032]
FULLY AND UNCONDITIONALLY GUARANTEED BY
CONOCO INC. AND PHILLIPS PETROLEUM COMPANY
This Security is one of a duly authorized issue of [3.625%
Notes due 2007] [4.75% Notes due 2012] [5.90% Notes due 2032] (the "Securities")
of ConocoPhillips, a Delaware corporation (the "Company").
1. Interest. The Company promises to pay interest on the
principal amount of this Security at [3.625] [4.75] [5.90]% per annum from
October 9, 2002 until maturity. The Company will pay interest semiannually on
April 15 and October 15 of each year (each an "Interest Payment Date"), or if
any such day is not a Business Day, on the next succeeding Business Day.
Interest on the Securities will accrue from the most recent Interest Payment
Date on which interest has been paid or, if no interest has been paid, from
October 9, 2002; provided that if there is no existing Default in the payment of
interest, and if this Security is authenticated between a record date referred
to on the face hereof (each, a "Record Date") and the next succeeding Interest
Payment Date, interest shall accrue from such next succeeding Interest Payment
Date; provided, further, that the first Interest Payment Date shall be April 15,
2003. The Company shall pay interest on overdue principal and premium (if any)
from time to time at a rate equal to the interest rate then in effect; it shall
pay interest on overdue installments of interest (without regard to any
applicable grace periods) from time to time at the same rate to the extent
lawful. Interest will be computed on the basis of a 360-day year consisting of
twelve 30-day months.
2. Guarantee. Conoco Inc., a Delaware corporation formerly
incorporated under the name Conoco Energy Company, and Phillips Petroleum
Company, a Delaware corporation (collectively, the "Guarantors"), jointly and
severally, unconditionally guarantee to the Holders from time to time of the
Securities, upon the terms and subject to the conditions set forth in the
Indenture (as defined below), (a) the full and prompt payment of the principal
of and any premium on the Securities when and as the same shall become due,
whether at the Stated Maturity thereof, by acceleration, redemption or
otherwise, and (b) the full and prompt payment of any interest on the Securities
when and as the same shall become due, subject to any applicable grace period.
The Guarantee constitutes a guarantee of payment and not of collection. In the
event of a default in the payment of principal of or any premium on the
Securities when and as the same shall become due, whether at the Stated Maturity
thereof, by acceleration, call for redemption or otherwise, or in the event of a
default in the payment of any interest on the Securities when and as the same
shall become due, each of the Trustee (as defined below) and the Holders of the
Securities shall have the right to proceed first and directly against the
Guarantors under the Indenture without first proceeding against the Company or
exhausting any other remedies which the Trustee or such Holder may have and
without resorting to any other security held by it.
A-6
3. Method of Payment. The Company will pay interest on the
Securities (except defaulted interest) to the Persons who are registered Holders
of Securities at the close of business on the Record Date next preceding the
Interest Payment Date, even if such Securities are canceled after such Record
Date and on or before such Interest Payment Date. The Holder must surrender this
Security to a Paying Agent to collect principal payments. The Company will pay
the principal of, premium (if any) on and interest on the Securities in money of
the United States of America that at the time of payment is legal tender for
payment of public and private debts. Such amounts shall be payable at the
offices of the Trustee, provided that at the option of the Company, the Company
may pay such amounts (1) by wire transfer with respect to Global Securities or
(2) by check payable in such money mailed to a Holder's registered address with
respect to any Securities.
4. Paying Agent and Registrar. Initially, The Bank of New York
(the "Trustee"), the trustee under the Indenture, will act as Paying Agent and
Registrar. In addition, as long as the Securities are listed on the Luxembourg
Stock Exchange, the Company shall maintain a Paying Agent and Registrar for the
Securities in Luxembourg, which initially shall be The Bank of New York
(Luxembourg) S.A. The Company may change any Paying Agent, Registrar,
co-registrar or additional paying agent without notice to any Holder. The
Company, any Guarantor or any Subsidiary of the Company may act in any such
capacity.
5. Indenture. The Company issued the Securities under an
Indenture dated as of October 9, 2002 (the "Indenture") among the Company, the
Guarantors and the Trustee. The terms of the Securities include those stated in
the Indenture and those made part of the Indenture by reference to the Trust
Indenture Act of 1939, as amended (the "TIA"), as in effect on the date of
execution of the Indenture. The Securities are subject to all such terms, and
Holders are referred to the Indenture and the TIA for a statement of such terms
and for the definitions of capitalized terms used but not defined herein. The
Securities are unsecured general obligations of the Company limited to
$[400,000,000] [1,000,000,000] [600,000,000] in aggregate principal amount;
provided, however, that the authorized aggregate principal amount of the
Securities may be increased before or after the issuance of any Securities by a
Board Resolution (or action pursuant to a Board Resolution) to such effect;
provided further, however, that the authorized aggregate principal amount of the
Securities may be increased only if the additional Securities issued will be
fungible with the original Securities for United States federal income tax
purposes. The Indenture provides for the issuance of other series of debt
securities (including the Securities, the "Debt Securities") thereunder.
6. Denominations, Transfer, Exchange. The Securities are in
registered form without coupons in denominations of $1,000 and integral
multiples of $1,000. The transfer of Securities may be registered and Securities
may be exchanged as provided in the Indenture. The Registrar and the Trustee may
require a Holder, among other things, to furnish appropriate endorsements and
transfer documents and to pay any taxes and fees required by law or permitted by
the Indenture. Neither the Company, the Trustee nor the Registrar shall be
required to register the transfer or exchange of (a) any Security selected for
redemption in whole or in part, except the unredeemed portion of any Security
being redeemed in part, or (b) any Security during the period beginning 15
Business Days before the mailing of notice of redemption of Securities to be
redeemed and ending at the close of business on the day of mailing.
A-7
7. Persons Deemed Owners. The registered Holder of a Security
shall be treated as its owner for all purposes.
8. Redemption. The Securities are subject to redemption, in
whole or in part, at any time and from time to time, at the option of the
Company, upon not less than 30 nor more than 60 days' prior notice as provided
in the Indenture, at a Redemption Price equal to the sum of (i) 100% of the
principal amount of the Securities to be redeemed and (ii) the amount, if any,
by which the sum of the present values of the Remaining Scheduled Payments
thereon, discounted to the Redemption Date on a semi-annual basis (assuming a
360-day year consisting of twelve 30-day months) at the Treasury Rate plus [15]
[20] [20] basis points, exceeds the principal amount of the Securities to be
redeemed, plus accrued and unpaid interest thereon to the Redemption Date.
"Treasury Rate" means, with respect to any Redemption Date,
the rate per annum equal to (i) the yield, under the heading which represents
the average for the immediately preceding week, appearing in the most recently
published statistical release designated "H.15 (519)" or any successor
publication which is published weekly by the Board of Governors of the Federal
Reserve System and which establishes yields on actively traded United States
Treasury securities adjusted to constant maturity under the caption "Treasury
Constant Maturities," for the maturity corresponding to the Comparable Treasury
Issue; provided that if no maturity is within three months before or after the
Stated Maturity for the Securities, yields for the two published maturities most
closely corresponding to the Comparable Treasury Issue will be determined and
the Treasury Rate will be interpolated or extrapolated from such yields on a
straight-line basis rounding to the nearest month; or (ii) if such release (or
any successor release) is not published during the week preceding such
calculation date or does not contain such yields, the rate per annum equal to
the semiannual equivalent yield to maturity of the Comparable Treasury Issue,
calculated using a price for the Comparable Treasury Issue (expressed as a
percentage of its principal amount) equal to the Comparable Treasury Price for
such Redemption Date. The Treasury Rate shall be calculated on the third
Business Day preceding such Redemption Date.
"Comparable Treasury Issue" means the United States Treasury
security selected by an Independent Investment Banker that would be used, at the
time of selection and in accordance with customary financial practice, in
pricing new issues of corporate debt securities of comparable maturity to the
remaining term of the Securities.
"Independent Investment Banker" means one of the Reference
Treasury Dealers appointed by the Company.
"Comparable Treasury Price" means, with respect to any
Redemption Date, (i) the average of the Reference Treasury Dealer Quotations for
such Redemption Date, after excluding the highest and lowest of such Reference
Treasury Dealer Quotations, or (ii) if the Trustee obtains fewer than four such
Reference Treasury Dealer Quotations, the average of all such Quotations.
"Reference Treasury Dealer" means each of Banc of America
Securities LLC (and its successors), J.P. Morgan Securities Inc. (and its
successors), Salomon Smith Barney Inc. (and its successors) and one other
nationally recognized investment banking firm that is a primary U.S. Government
securities dealer (a "Primary Treasury Dealer") specified from time to
A-8
time by the Company; provided, however, that if any of the foregoing shall cease
to be a Primary Treasury Dealer, the Company shall substitute therefor another
nationally recognized investment banking firm that is a Primary Treasury Dealer.
"Reference Treasury Dealer Quotations" means, with respect to
each Reference Treasury Dealer and any Redemption Date, the average, as
determined by the Trustee, of the bid and asked prices for the Comparable
Treasury Issue (expressed in each case as a percentage of its principal amount)
quoted in writing to the Trustee by such Reference Treasury Dealer as of 3:30
p.m., New York time, on the third Business Day preceding such Redemption Date.
"Remaining Scheduled Payments" means, with respect to each
Security to be redeemed, the remaining scheduled payments of the principal
thereof and interest thereon that would be due after the related Redemption Date
but for such redemption; provided, however, that, if such Redemption Date is not
an Interest Payment Date with respect to such Security, the amount of the next
succeeding scheduled interest payment thereon will be reduced by the amount of
interest accrued thereon to such Redemption Date.
9. Amendments and Waivers. Subject to certain exceptions and
limitations, the Indenture or the Securities may be amended or supplemented with
the consent of the Holders of at least a majority in principal amount of the
then outstanding Debt Securities of all series affected by such amendment or
supplement (acting as one class), and any existing or past Default or Event of
Default under, or compliance with any provision of, the Indenture may be waived
(other than any continuing Default or Event of Default in the payment of the
principal of, premium (if any) on or interest on the Securities) by the Holders
of at least a majority in principal amount of the then outstanding Debt
Securities of any series or of all series (acting as one class) in accordance
with the terms of the Indenture. Without the consent of any Holder, the Company,
the Guarantors and the Trustee may amend or supplement the Indenture or the
Securities or waive any provision of either: (i) to cure any ambiguity,
omission, defect or inconsistency; (ii) if required, to provide for the
assumption of the obligations of the Company or a Guarantor under the Indenture
in the case of the merger, consolidation or sale, lease, conveyance, transfer or
other disposition of all or substantially all of the assets of the Company or
such Guarantor; (iii) to provide for uncertificated Securities in addition to or
in place of certificated Securities or to provide for the issuance of bearer
Securities (with or without coupons); (iv) to provide any security for, or to
add any guarantees of or additional obligors on, the Securities or the related
Guarantees; (v) to comply with any requirement in order to effect or maintain
the qualification of the Indenture under the TIA; (vi) to add to the covenants
of the Company or any Guarantor for the benefit of the Holders of the
Securities, or to surrender any right or power conferred by the Indenture upon
the Company or any Guarantor; (vii) to add any additional Events of Default with
respect to all or any series of the Debt Securities; (viii) to change or
eliminate any of the provisions of the Indenture, provided that no outstanding
Security is adversely affected in any material respect; (ix) to supplement any
of the provisions of the Indenture to such extent as shall be necessary to
permit or facilitate the defeasance and discharge of the Securities pursuant to
the Indenture; or (x) to evidence and provide for the acceptance of appointment
under the Indenture by a successor Trustee with respect to the Securities and to
add to or change any of the provisions of the Indenture as shall be necessary to
provide for or facilitate the administration of the trusts thereunder by more
than one Trustee, pursuant to the requirements of the Indenture.
A-9
The right of any Holder to participate in any consent required
or sought pursuant to any provision of the Indenture (and the obligation of the
Company or any Guarantor to obtain any such consent otherwise required from such
Holder) may be subject to the requirement that such Holder shall have been the
Holder of record of any Securities with respect to which such consent is
required or sought as of a date identified by the Company or such Guarantor in a
notice furnished to Holders in accordance with the terms of the Indenture.
Without the consent of each Holder affected, the Company may
not (i) reduce the amount of Debt Securities whose Holders must consent to an
amendment, supplement or waiver; (ii) reduce the rate of or change the time for
payment of interest, including default interest, on any Security; (iii) reduce
the principal of or premium on, or change the Stated Maturity of, any Security;
(iv) reduce the premium, if any, payable upon the redemption of any Security or
change the time at which any Security may or shall be redeemed; (v) change the
coin or currency in which any Security or any premium or interest with respect
thereto is payable; (vi) impair the right to institute suit for the enforcement
of any payment of principal of or premium (if any) or interest on any Security,
except as provided in the Indenture; (vii) make any change in the percentage of
principal amount of Debt Securities necessary to waive compliance with certain
provisions of the Indenture or make any change in the provision for
modification; or (viii) waive a continuing Default or Event of Default in the
payment of principal of or premium (if any) or interest on the Securities.
A supplemental indenture that changes or eliminates any
covenant or other provision of the Indenture which has expressly been included
solely for the benefit of one or more particular series of Debt Securities under
the Indenture, or which modifies the rights of the Holders of Debt Securities of
such series with respect to such covenant or other provision, shall be deemed
not to affect the rights under the Indenture of the Holders of Debt Securities
of any other series.
10. Defaults and Remedies. Events of Default are defined in
the Indenture and generally include: (i) default for 30 days in payment of any
interest on the Securities; (ii) default in any payment of principal of or
premium, if any, on the Securities when due and payable; (iii) default by the
Company or any Guarantor in compliance with any of its other covenants or
agreements in, or provisions of, the Securities or in the Indenture which shall
not have been remedied within 90 days after written notice by the Trustee or by
the holders of at least 25% in principal amount of the Securities then
outstanding (or, in the event that other Debt Securities issued under the
Indenture are also affected by the default, then 25% in principal amount of all
outstanding Debt Securities so affected); or (iv) certain events involving
bankruptcy, insolvency or reorganization of the Company or any Guarantor. If an
Event of Default occurs and is continuing, the Trustee or the Holders of at
least 25% in principal amount of the then outstanding Securities (or, in the
case of an Event of Default described in clause (iii) above, if outstanding Debt
Securities of other series are affected by such Default, then at least 25% in
principal amount of the then outstanding Debt Securities so affected), may
declare the principal of and interest on all the Securities (or such Debt
Securities) to be immediately due and payable, except that in the case of an
Event of Default arising from certain events of bankruptcy, insolvency or
reorganization of the Company or any Guarantor, all outstanding Debt Securities
under the Indenture become due and payable immediately without further action or
notice. The amount due and payable upon the acceleration of any Security is
equal to 100% of the principal amount thereof plus accrued interest to the date
of payment. Holders may not enforce the
A-10
Indenture or the Securities except as provided in the Indenture. The Trustee may
require indemnity satisfactory to it before it enforces the Indenture or the
Securities. Subject to certain limitations, Holders of a majority in principal
amount of the then outstanding Securities (or affected Debt Securities) may
direct the Trustee in its exercise of any trust or power. The Trustee may
withhold from Holders notice of any continuing default (except a default in
payment of principal, premium or interest) if it determines that withholding
notice is in their interests. The Company and the Guarantors must furnish annual
compliance certificates to the Trustee.
11. Discharge Prior to Maturity. The Indenture with respect to
the Securities shall be discharged and canceled upon the payment of all of the
Securities and shall be discharged except for certain obligations upon the
irrevocable deposit with the Trustee of any combination of funds and U.S.
Government Obligations sufficient for such payment.
12. Trustee Dealings with Company and Guarantors. The Trustee,
in its individual or any other capacity, may become the owner or pledgee of
Securities and may make loans to, accept deposits from, and perform services for
the Company, any Guarantor or any of their respective Affiliates, and may
otherwise deal with the Company, any Guarantor or any such Affiliates, as if it
were not Trustee.
13. No Recourse Against Others. A director, officer, employee,
stockholder, partner or other owner of the Company, a Guarantor or the Trustee,
as such, shall not have any liability for any obligations of the Company under
the Securities, for any obligations of any Guarantor under the Guarantee or for
any obligations of the Company, any Guarantor or the Trustee under the Indenture
or for any claim based on, in respect of or by reason of such obligations or
their creation. Each Holder by accepting a Security waives and releases all such
liability. The waiver and release shall be part of the consideration for the
issue of Securities.
14. Authentication. This Security shall not be valid until
authenticated by the manual signature of the Trustee or an authenticating agent.
15. CUSIP Numbers. Pursuant to a recommendation promulgated by
the Committee on Uniform Security Identification Procedures, the Company has
caused CUSIP numbers to be printed on the Securities as a convenience to the
Holders of the Securities. No representation is made as to the accuracy of such
numbers as printed on the Securities and reliance may be placed only on the
other identification numbers printed thereon.
16. Abbreviations. Customary abbreviations may be used in the
name of a Holder or an assignee, such as: TEN COM (= tenants in common), TEN ENT
(= tenants by the entireties), JT TEN (= joint tenants with right of
survivorship and not as tenants in common), CUST (= Custodian), and U/G/M/A (=
Uniform Gifts to Minors Act).
17. Transfer Restrictions. By its acceptance of any Security
bearing a legend restricting transfer, each Holder of such Security acknowledges
the restrictions on transfer of such Security set forth in the Officers'
Certificate establishing the terms of the Securities pursuant to the Indenture
and in such legend and agrees that it will transfer such Security only as
provided in such Officers' Certificate and the Indenture.
A-11
The Company will furnish to any Holder upon written request
and without charge a copy of the Indenture. Request may be made to:
ConocoPhillips
600 North Dairy Ashford
Houston, Texas 77079
Telephone: (281) 293-1000
Attention: Treasurer
A-12
SCHEDULE OF EXCHANGES OF SECURITIES*
The following exchanges of a part of this Global Security for other Securities
have been made:
Principal Amount
Amount of Amount of of this Global Signature of
Decrease in Increase in Security Following Authorized Officer
Principal Amount Principal Amount Such Decrease of Trustee or
Date of Exchange of this Global Security of this Global Security or Increase Security Custodian
- ----------------- ------------------------ ------------------------ ----------- ------------------
- -----
*To be included only if the Security is a Global Security.
A-13
ASSIGNMENT FORM
To assign this Security, fill in the form below: (I) or (we)
assign and transfer this Security to
- --------------------------------------------------------------------------------
(Insert assignee's social security or tax I.D. number)
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
(Print or type assignee's name, address and zip code)
and irrevocably appoint
--------------------------------------------------------
as agent to transfer this Security on the books of the Company. The agent may
substitute another to act for him.
Date: Your Signature:
--------- --------------------------------------
(Sign exactly as your name appears on
the face of this Security)
Signature Guarantee:
----------------------------------------------------------
(Participant in a Recognized Signature
Guaranty Medallion Program)
A-14
Annex B
FORM OF CERTIFICATE TO BE DELIVERED UPON EXCHANGE
OR REGISTRATION OF TRANSFER OF SECURITIES
Re: [3.625% Notes due 2007] [4.75% Notes due 2012] [5.90% Notes due 2032]
of ConocoPhillips (the "Notes")
This Certificate relates to $_____ principal amount of Notes
held in *______ book-entry or *______ definitive form by _____________________
(the "Transferor").
The Transferor has requested the Trustee by written order to
exchange or register the transfer of a Note or Notes or beneficial interests
therein (the "Transfer").
In connection with such request and in respect of each such
Note or beneficial interest therein, the Transferor does hereby certify that the
Transferor is familiar with the Indenture relating to the above-captioned Notes
and that the Transfer does not require registration under the Securities Act of
1933, as amended (the "Securities Act"), because:*
[ ] Such Note or beneficial interest is being acquired for the
Transferor's own account without transfer.
[ ] Such Note or beneficial interest is being transferred (i)
to a "qualified institutional buyer" (as defined in Rule 144A under the
Securities Act), in accordance with Rule 144A under the Securities Act, that is
purchasing for its own account or for the account of another qualified
institutional buyer, in each case to whom notice is given that the Transfer is
being made in reliance on Rule 144A; or (ii) to a non-U.S. person in an offshore
transaction in accordance with Rule 903 or Rule 904 of Regulation S under the
Securities Act (and in the case of clause (ii), based upon an opinion of counsel
if the Company or the Trustee so requests, together with a certification in
substantially the form of Annex D to the officers' certificate establishing the
terms of the Notes pursuant to the Indenture (the "Officers' Certificate")).
[ ] Such Note or beneficial interest is being transferred (i)
pursuant to an exemption from the registration requirements of the Securities
Act provided by Rule 144 (and based upon an opinion of counsel if the Company or
the Trustee so requests) or (ii) pursuant to an effective registration statement
under the Securities Act.
[ ] Such Note or beneficial interest is being transferred to
an institutional "accredited investor" within the meaning of Rule 501(a)(1),
(2), (3) or (7) of Regulation D under the Securities Act that is acquiring such
Note or beneficial interest for its own account or for the account of another
institutional accredited investor, in each case in a minimum principal amount of
the Notes of not less than $100,000, for investment purposes and not with a view
to, or for offer or sale in connection with, any distribution thereof in
violation of the Securities Act (and based upon an opinion of counsel if the
Company or the Trustee so requests), together with a certification in
substantially the form of Annex C to the Officers' Certificate.
- --------
*Fill in blank or check appropriate box, as applicable.
B-1
[ ] Such Note or beneficial interest is being transferred in
reliance on and in compliance with another exemption from the registration
requirements of the Securities Act (and based upon an opinion of counsel if the
Company or the Trustee so requests).
[INSERT NAME OF TRANSFEROR]
By:
----------------------
Name:
Title:
Address:
Date:
------------------------
B-2
Annex C
FORM OF LETTER TO BE DELIVERED
BY INSTITUTIONAL ACCREDITED INVESTORS
The Bank of New York
101 Barclay Street, Floor 8W
New York, New York 10286
Attn: Corporate Trust Administration
ConocoPhillips
600 North Dairy Ashford
Houston, Texas 77079
Attention: General Counsel
Ladies and Gentlemen:
We are delivering this letter in connection with our proposed
purchase of $_______ aggregate principal amount of [3.625% Notes due 2007]
[4.75% Notes due 2012] [5.90% Notes due 2032] (including the beneficial
interests therein, the "Notes") of ConocoPhillips (the "Company"). We hereby
confirm that:
(a) we are an institutional "accredited investor" within the
meaning of Rule 501(a)(1), (2), (3) or (7) under the Securities Act of
1933, as amended (the "Securities Act") (an "Institutional Accredited
Investor");
(b) any purchase of the Notes by us will be for our own
account or for the account of one or more other Institutional
Accredited Investors for which we exercise sole investment discretion
("Accounts"), and will be made for investment purposes and not with a
view to, or for offer or sale in connection with, any distribution
thereof in violation of the Securities Act;
(c) in the event that we purchase any of the Notes, we will
acquire Notes having a minimum aggregate principal amount of not less
than $100,000, in each case for our own account or for one or more
Accounts;
(d) in the normal course of our business, we invest in or
purchase securities similar to the Notes and we have such knowledge and
experience in financial and business matters that we are capable of
evaluating the merits and risks of purchasing the Notes; and
(e) we are aware that we (or any Account) may be required to
bear the economic risk of an investment in the Notes for an indefinite
period of time and we (or such Account) are able to bear this risk for
an indefinite period.
We understand and acknowledge that the offer and sale of the
Notes have not been registered under the Securities Act or any other applicable
securities law, are being offered for resale in transactions not requiring
registration under the Securities Act or any other
C-1
securities laws, including sales pursuant to Rule 144A under the Securities Act
("Rule 144A"), and may not be offered, sold or otherwise transferred except in
compliance with the registration requirements of the Securities Act or any other
applicable securities law, or pursuant to an exemption therefrom or in a
transaction not subject thereto. We agree on our behalf and on behalf of any
Account for which you are purchasing the Notes to offer, sell or otherwise
transfer the Notes prior to: (x) the date which is two years (or such shorter
period of time as permitted by Rule 144(k) under the Securities Act) after the
later of the issue date of the Notes and the last date on which the Company or
any of its "affiliates" (as defined in Rule 144 under the Securities Act) was
the owner of the Notes (or any predecessor thereto); or (y) such later date, if
any, as may be required by applicable law (the "Resale Restriction Termination
Date"), only:
(a) to the Company;
(b) pursuant to a registration statement that has been
declared effective under the Securities Act;
(c) for so long as the Notes are eligible for resale pursuant
to Rule 144A, to a person we reasonably believe is a qualified
institutional buyer under Rule 144A (a "QIB") that purchases for its
own account or for the account of a QIB, in each case to whom notice is
given that the transfer is being made in reliance on Rule 144A;
(d) to a non-U.S. person in an offshore transaction in
accordance with Rule 903 or Rule 904 of Regulation S under the
Securities Act ("Regulation S");
(e) to an Institutional Accredited Investor that is acquiring
the Notes for its own account or for the account of another
Institutional Accredited Investor, in each case in a minimum principal
amount of the Notes of not less than $100,000, for investment purposes
and not with a view to, or for offer or sale in connection with, any
distribution thereof in violation of the Securities Act;
(f) pursuant to an exemption from the registration
requirements of the Securities Act provided by Rule 144 thereunder (if
available); or
(g) pursuant to any other available exemption from the
registration requirements of the Securities Act;
subject in each of the foregoing cases to compliance with any applicable state
or other securities laws. If any resale or transfer of the Notes is proposed to
be made pursuant to clause (e) above prior to the Resale Restriction Termination
Date, the transferor shall deliver a letter from the transferee substantially in
the form of this letter to the Company and the Trustee for the Notes. The
foregoing restrictions on resale will not apply subsequent to the Resale
Restriction Termination Date. We acknowledge that the Company and the Trustee
reserve the right, prior to any offer, sale or other transfer of Notes prior to
the Resale Restriction Termination Date pursuant to clause (d), (e), (f) or (g)
above, to require the delivery of an opinion of counsel, certifications and/or
other information satisfactory to the Company and the Trustee.
We acknowledge that you and others will rely upon our
confirmations, acknowledgements and agreements set forth herein, and we agree to
notify you promptly in writing if any of our representations or warranties
herein ceases to be accurate and complete.
C-2
THIS LETTER SHALL BE GOVERNED BY, AND CONSTRUED IN ACCORDANCE
WITH, THE LAWS OF THE STATE OF NEW YORK, WITHOUT REGARD TO PRINCIPLES OF
CONFLICTS OF LAWS.
Very truly yours,
[Name of Purchaser]
Date: By:
------------------ --------------------------------------
Name:
Title:
Address:
Upon transfer, the Notes would be registered in the name of
the new beneficial owner as follows:
Name:
-------------------------------------
Address:
----------------------------------
- --------------------------------------------
Taxpayer ID No.
----------------------------
C-3
Annex D
FORM OF CERTIFICATE TO BE DELIVERED IN CONNECTION
WITH TRANSFERS PURSUANT TO REGULATION S
___________, ____
The Bank of New York, as Security Custodian
101 Barclay Street, Floor 8W
New York, New York 10286
Attn: Corporate Trust Administration
Ladies and Gentlemen:
In connection with our proposed transfer of certain [3.625%
Notes due 2007] [4.75% Notes due 2012] [5.90% Notes due 2032] (the "Notes") of
ConocoPhillips (the "Company"), or beneficial interests in such Notes, we
represent that:
(i) the offer of such Notes or beneficial interests was not
made to a person in the United States;
(ii) at the time the buy order was originated, the transferee
was outside the United States or we and any person acting on our behalf
reasonably believed that the transferee was outside the United States;
or the transaction was executed in, on or through the facilities of a
designated offshore securities market and neither we nor any person
acting on our behalf knows that the transaction was prearranged with a
buyer in the United States;
(iii) no directed selling efforts have been made by us in the
United States in contravention of the requirements of Rule 903(a) or
Rule 904(a) of Regulation S under the U.S. Securities Act of 1933 (the
"Securities Act"), as applicable;
(iv) the transaction is not part of a plan or scheme to evade
the registration requirements of the Securities Act; and
(v) if the proposed transfer is being made prior to the
expiration of a 40-day "distribution compliance period" as defined in
Regulation S under the Securities Act, the transfer is being made (a)
to a person that is not a U.S. person or for the account or benefit of
a person that is not a U.S. person within the meaning of Regulation S
under the Securities Act; (b) to a "qualified institutional buyer"
within the meaning of Rule 144A under the Securities Act; or (c) to an
institutional "accredited investor" within the meaning of Rule
501(a)(1), (2), (3) or (7) under the Securities Act, in each case that
holds such Note or beneficial interests through Euroclear Bank
S.A./N.V., as operator of the Euroclear System, or Clearstream Banking,
societe anonyme.
You and the Company are entitled to rely upon this letter and
you are irrevocably authorized to produce this letter or a copy hereof to any
interested party in any administrative or legal proceedings or official inquiry
with respect to the matters covered hereby. Terms used in this certificate have
the meanings set forth in Regulation S under the Securities Act.
D-1
Very truly yours,
[Name]
By:
----------------------------------------
Name:
Title:
Address:
D-2
EXHIBIT 5.1
[BAKER BOTTS L.L.P. LETTERHEAD]
November 13, 2002
ConocoPhillips
600 North Dairy Ashford
Houston, Texas 77079
Ladies and Gentlemen:
As set forth in the Registration Statement on Form S-4 (the "Registration
Statement") to be filed with the Securities and Exchange Commission (the
"Commission") by ConocoPhillips, a Delaware corporation (the "Company"), Conoco
Inc., a Delaware corporation ("Conoco"), and Phillips Petroleum Company, a
Delaware corporation ("Phillips" and, collectively with Conoco, the
"Guarantors"), under the Securities Act of 1933, as amended (the "Act"),
relating to the registration under the Act of $400 million aggregate principal
amount of the Company's 3.625% Notes due 2007, $1,000 million aggregate
principal amount of the Company's 4.75% Notes due 2012 and $600 million
aggregate principal amount of the Company's 5.90% Notes due 2032 (collectively,
the "New Notes") fully and unconditionally guaranteed by the Guarantors (the
"Guarantees"), to be offered by the Company and the Guarantors in exchange (the
"Exchange Offer") for a like principal amount of the Company's issued and
outstanding 3.625% Notes due 2007, 4.75% Notes due 2012 and 5.90% Notes due 2032
fully and unconditionally guaranteed by the Guarantors (collectively, the "Old
Notes"), certain legal matters in connection with the New Notes and the related
Guarantees are being passed upon for you by us. The New Notes and the related
Guarantees are to be issued under an Indenture, dated as of October 9, 2002 (the
"Indenture"), among the Company, the Guarantors and The Bank of New York, as
Trustee, pursuant to the terms of each series of the New Notes as established
pursuant to resolutions duly adopted by the Board of Directors of the Company.
In our capacity as your counsel in the connection referred to above, we
have examined the Company's Restated Certificate of Incorporation and Bylaws,
each as amended to date, Conoco's Restated Certificate of Incorporation and
Bylaws, each as amended to date, Phillips' Restated Certificate of Incorporation
and Bylaws, each as amended to date, and the originals, or copies certified or
otherwise identified, of the Indenture, of corporate records of each of the
Company, Conoco and Phillips, including minute books of each of the Company,
Conoco and Phillips as furnished to us by the Company, Conoco and Phillips,
certificates of public officials and of representatives of each of the Company,
Conoco and Phillips, statutes and other instruments and documents, as a basis
for the opinions hereinafter expressed. We have assumed that the signatures on
all documents examined by us are genuine, all documents submitted to us as
originals are authentic and all documents submitted to us as certified or
photostatic copies conform to the originals thereof. We also have assumed that
(i) the Registration Statement will have become effective under the Act and the
Indenture will have been qualified under the Trust Indenture Act of 1939, as
amended, and (ii) the New Notes and the related Guarantees will have been duly
executed, authenticated and delivered in accordance with the provisions of the
Indenture and issued in exchange for Old Notes pursuant to, and in accordance
with the terms of, the Exchange Offer as contemplated in the Registration
Statement.
BAKER BOTTS L.L.P.
ConocoPhillips November 13, 2002
2
Based upon and subject to the foregoing, we are of the opinion that:
1. The New Notes, when issued, will constitute legal, valid and
binding obligations of the Company, enforceable against the Company in
accordance with their terms, except as that enforcement is subject to (a)
any applicable bankruptcy, insolvency, reorganization, moratorium,
fraudulent transfer or conveyance or other laws relating to or affecting
creditors' rights generally, (b) general principles of equity (regardless
of whether that enforceability is considered in a proceeding in equity or
at law) and (c) any implied covenants of good faith and fair dealing.
2. Each Guarantee of Conoco or Phillips, when issued, will constitute
legal, valid and binding obligations of Conoco or Phillips, as applicable,
enforceable against Conoco or Phillips, as applicable, in accordance with
their terms, except as that enforcement is subject to (a) any applicable
bankruptcy, insolvency, reorganization, moratorium, fraudulent transfer or
conveyance or other laws relating to or affecting creditors' rights
generally, (b) general principles of equity (regardless of whether that
enforceability is considered in a proceeding in equity or at law) and (c)
any implied covenants of good faith and fair dealing.
The opinions set forth above are limited in all respects to matters of the
contract law of the State of New York, the General Corporation Law of the State
of Delaware and applicable federal law. We hereby consent to the filing of this
opinion of counsel as Exhibit 5.1 to the Registration Statement. We also consent
to the reference to our Firm under the heading "Legal Matters" in the prospectus
forming a part of the Registration Statement. In giving this consent, we do not
hereby admit that we are in the category of persons whose consent is required
under Section 7 of the Act or the rules and regulations of the Commission
thereunder.
Very truly yours,
BAKER BOTTS L.L.P.
KBR/TRF/SML
EXHIBIT 23.1
CONSENT OF INDEPENDENT ACCOUNTANTS
We hereby consent to the incorporation by reference in this Registration
Statement on Form S-4 of our report dated February 19, 2002 relating to the
consolidated financial statements, which appears in Conoco Inc.'s Current Report
on Form 8-K dated February 25, 2002 and Conoco Inc.'s Annual Report on Form 10-K
for the year ended December 31, 2001, and of our report dated February 19, 2002
relating to the financial statement schedule of Conoco Inc., which appears in
Conoco Inc.'s Annual Report on Form 10-K for the year ended December 31, 2001.
We also consent to the reference to us under the heading "Experts" in such
Registration Statement.
PRICEWATERHOUSECOOPERS LLP
Houston, Texas
November 12, 2002
Exhibit 23.2
CONSENT OF ERNST & YOUNG LLP
We consent to the reference to our firm under the caption "Experts" in the Form
S-4 Registration Statement and related prospectus of ConocoPhillips, Conoco Inc.
and Phillips Petroleum Company for the registration of $2,000,000,000 of
ConocoPhillips' notes payable and to the incorporation by reference therein of
our report dated March 15, 2002, with respect to the consolidated financial
statements and schedule of Phillips Petroleum Company included in its Annual
Report (Form 10-K) for the year ended December 31, 2001, as amended, filed with
the Securities and Exchange Commission.
/s/ Ernst & Young LLP
ERNST & YOUNG LLP
Tulsa, Oklahoma
November 12, 2002
EXHIBIT 25.1
================================================================================
FORM T-1
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
STATEMENT OF ELIGIBILITY
UNDER THE TRUST INDENTURE ACT OF 1939 OF A
CORPORATION DESIGNATED TO ACT AS TRUSTEE
CHECK IF AN APPLICATION TO DETERMINE
ELIGIBILITY OF A TRUSTEE PURSUANT TO
SECTION 305(b)(2) |__|
THE BANK OF NEW YORK
(Exact name of trustee as specified in its charter)
New York 13-5160382
(State of incorporation (I.R.S. employer
if not a U.S. national bank) identification no.)
One Wall Street, New York, N.Y. 10286
(Address of principal executive offices) (Zip code)
ConocoPhillips
(Exact name of obligor as specified in its charter)
Delaware 01-0562944
(State or other jurisdiction of (I.R.S. employer
incorporation or organization) identification no.)
Conoco Inc.
(Exact name of obligor as specified in its charter)
Delaware 51-0370352
(State or other jurisdiction of (I.R.S. employer
incorporation or organization) identification no.)
Phillips Petroleum Company
(Exact name of obligor as specified in its charter)
Delaware 73-0400345
(State or other jurisdiction of (I.R.S. employer
incorporation or organization) identification no.)
600 North Dairy Ashford
Houston, Texas 77079
(Address of principal executive offices) (Zip code)
3.625% Notes due 2007
4.75% Notes due 2012
5.90% Notes due 2032
(Title of the indenture securities)
================================================================================
-2-
1. GENERAL INFORMATION. FURNISH THE FOLLOWING INFORMATION AS TO THE
TRUSTEE:
(A) NAME AND ADDRESS OF EACH EXAMINING OR SUPERVISING AUTHORITY TO
WHICH IT IS SUBJECT.
- --------------------------------------------------------------------------------
Name Address
- --------------------------------------------------------------------------------
Superintendent of Banks of the State of 2 Rector Street, New York,
New York N.Y. 10006, and Albany, N.Y. 12203
Federal Reserve Bank of New York 33 Liberty Plaza, New York,
N.Y. 10045
Federal Deposit Insurance Corporation Washington, D.C. 20429
New York Clearing House Association New York, New York 10005
(B) WHETHER IT IS AUTHORIZED TO EXERCISE CORPORATE TRUST POWERS.
Yes.
2. AFFILIATIONS WITH OBLIGOR.
IF THE OBLIGOR IS AN AFFILIATE OF THE TRUSTEE, DESCRIBE EACH SUCH
AFFILIATION.
None.
16. LIST OF EXHIBITS.
EXHIBITS IDENTIFIED IN PARENTHESES BELOW, ON FILE WITH THE COMMISSION,
ARE INCORPORATED HEREIN BY REFERENCE AS AN EXHIBIT HERETO, PURSUANT TO
RULE 7A-29 UNDER THE TRUST INDENTURE ACT OF 1939 (THE "ACT") AND 17
C.F.R. 229.10(D).
1. A copy of the Organization Certificate of The Bank of New York
(formerly Irving Trust Company) as now in effect, which
contains the authority to commence business and a grant of
powers to exercise corporate trust powers. (Exhibit 1 to
Amendment No. 1 to Form T-1 filed with Registration Statement
No. 33-6215, Exhibits 1a and 1b to Form T-1 filed with
Registration Statement No. 33-21672 and Exhibit 1 to Form T-1
filed with Registration Statement No. 33-29637.)
4. A copy of the existing By-laws of the Trustee. (Exhibit 4 to
Form T-1 filed with Registration Statement No. 33-31019.)
6. The consent of the Trustee required by Section 321(b) of the
Act. (Exhibit 6 to Form T-1 filed with Registration Statement
No. 33-44051.)
7. A copy of the latest report of condition of the Trustee
published pursuant to law or to the requirements of its
supervising or examining authority.
SIGNATURE
Pursuant to the requirements of the Act, the Trustee, The Bank of New
York, a corporation organized and existing under the laws of the State of New
York, has duly caused this statement of eligibility to be signed on its behalf
by the undersigned, thereunto duly authorized, all in The City of New York, and
State of New York, on the 30th day of October, 2002.
THE BANK OF NEW YORK
By: /S/ MING SHIANG
--------------------------
Name: MING SHIANG
Title: VICE PRESIDENT
-4-
EXHIBIT 7
- --------------------------------------------------------------------------------
Consolidated Report of Condition of
THE BANK OF NEW YORK
of One Wall Street, New York, N.Y. 10286
And Foreign and Domestic Subsidiaries,
a member of the Federal Reserve System, at the close of business June 30, 2002,
published in accordance with a call made by the Federal Reserve Bank of this
District pursuant to the provisions of the Federal Reserve Act.
Dollar Amounts
In Thousands
ASSETS
Cash and balances due from depository institutions:
Noninterest-bearing balances and currency and coin . $ 2,850,111
Interest-bearing balances .......................... 6,917,898
Securities:
Held-to-maturity securities ........................ 1,201,319
Available-for-sale securities ...................... 13,227,788
Federal funds sold in domestic offices ................ 1,748,562
Securities purchased under agreements to
resell ............................................. 808,241
Loans and lease financing receivables:
Loans and leases held for sale ..................... 974,505
Loans and leases, net of unearned
income...............36,544,957
LESS: Allowance for loan and
lease losses............578,710
Loans and leases, net of unearned
income and allowance ............................. 35,966,247
Trading Assets ........................................ 6,292,280
Premises and fixed assets (including capitalized
leases) ............................................ 860,071
Other real estate owned ............................... 660
Investments in unconsolidated subsidiaries and
associated companies ............................... 272,214
Customers' liability to this bank on acceptances
outstanding ........................................ 467,259
Intangible assets
Goodwill ........................................... 1,804,922
Other intangible assets ............................ 70,679
Other assets .......................................... 4,639,158
-----------
Total assets .......................................... $ 78,101,914
============
LIABILITIES
Deposits:
In domestic offices ................................ $ 29,456,619
Noninterest-bearing .................... 11,393,028
Interest-bearing ....................... 18,063,591
In foreign offices, Edge and Agreement
subsidiaries, and IBFs ........................... 26,667,608
Noninterest-bearing .................... 297,347
Interest-bearing ....................... 26,370,261
Federal funds purchased in domestic
offices ............................................. 1,422,522
Securities sold under agreements to repurchase ........ 466,965
Trading liabilities ................................... 2,946,403
Other borrowed money:
(includes mortgage indebtedness and obligations
under capitalized leases) .......................... 1,844,526
Bank's liability on acceptances executed and
outstanding ........................................ 469,319
Subordinated notes and debentures ..................... 1,840,000
Other liabilities ..................................... 5,998,479
------------
Total liabilities ..................................... $ 71,112,441
============
Minority interest in consolidated
subsidiaries ....................................... 500,154
EQUITY CAPITAL
Perpetual preferred stock and related
surplus ............................................ 0
Common stock .......................................... 1,135,284
Surplus ............................................... 1,055,509
Retained earnings ..................................... 4,244,963
Accumulated other comprehensive income ................ (53,563)
Other equity capital components ....................... 0
------------
Total equity capital .................................. 6,489,319
------------
Total liabilities minority interest and equity capital $ 78,101,914
============
I, Thomas J. Mastro, Senior Vice President and Comptroller of the
above-named bank do hereby declare that this Report of Condition is true and
correct to the best of my knowledge and belief.
Thomas J. Mastro,
Senior Vice President and Comptroller
We, the undersigned directors, attest to the correctness of this
statement of resources and liabilities. We declare that it has been examined by
us, and to the best of our knowledge and belief has been prepared in conformance
with the instructions and is true and correct.
Thomas A. Renyi }
Gerald L. Hassell } Directors
Alan R. Griffith }
- --------------------------------------------------------------------------------
EXHIBIT 99.1
CONOCOPHILLIPS
LETTER OF TRANSMITTAL
FOR
TENDER OF ALL OUTSTANDING
3.625% NOTES DUE 2007 4.75% NOTES DUE 2012 5.90% NOTES DUE 2032
IN EXCHANGE FOR IN EXCHANGE FOR IN EXCHANGE FOR
REGISTERED REGISTERED REGISTERED
3.625% NOTES DUE 2007 4.75% NOTES DUE 2012 5.90% NOTES DUE 2032
FULLY AND UNCONDITIONALLY GUARANTEED BY
CONOCO INC. AND PHILLIPS PETROLEUM COMPANY
- --------------------------------------------------------------------------------
EACH EXCHANGE OFFER WILL EXPIRE AT 5:00 P.M., NEW YORK CITY TIME, ON ,
, UNLESS EXTENDED (THE "EXPIRATION DATE"). OUTSTANDING NOTES OF A SERIES
TENDERED IN AN EXCHANGE OFFER MAY BE WITHDRAWN AT ANY TIME PRIOR TO 5:00 P.M.,
NEW YORK CITY TIME, ON THE EXPIRATION DATE FOR THAT EXCHANGE OFFER.
- --------------------------------------------------------------------------------
DELIVER TO THE EXCHANGE AGENT:
THE BANK OF NEW YORK
(212) 815-2742
BY OVERNIGHT DELIVERY, COURIER OR MAIL (IF BY
MAIL, REGISTERED OR CERTIFIED MAIL RECOMMENDED):
The Bank of New York
101 Barclay Street - 7 East Floor
New York, New York 10286
Attn: Enrique Lopez
Reorganization Unit - 7E
BY FACSIMILE TRANSMISSION (ELIGIBLE INSTITUTIONS ONLY):
(212) 298-1915
Attention: Enrique Lopez
Confirm by Telephone:
(212) 815-2742
DELIVERY OF THIS INSTRUMENT TO AN ADDRESS OTHER THAN AS SET FORTH ABOVE OR
TRANSMISSION OF INSTRUCTIONS VIA A FACSIMILE NUMBER OTHER THAN THE ONE LISTED
ABOVE WILL NOT CONSTITUTE A VALID DELIVERY. THE INSTRUCTIONS ACCOMPANYING THIS
LETTER OF TRANSMITTAL SHOULD BE READ CAREFULLY BEFORE THE LETTER OF TRANSMITTAL
IS COMPLETED.
The undersigned hereby acknowledges receipt and review of the prospectus
dated , , of ConocoPhillips, Conoco Inc. ("Conoco") and Phillips
Petroleum Company ("Phillips") and this letter of transmittal. These two
documents together constitute the offer by ConocoPhillips, Conoco and Phillips
to exchange ConocoPhillips' 3.625% Notes due 2007, 4.75% Notes due 2012 and
5.90% Notes due 2032 fully and unconditionally guaranteed by Conoco and Phillips
(collectively, the "New Notes"), the issuance of which has been registered under
the Securities Act of 1933, as amended (the "Securities Act"), for a like
principal amount of ConocoPhillips' issued and outstanding 3.625% Notes due
2007, 4.75% Notes due 2012 and 5.90% Notes due 2032 fully and unconditionally
guaranteed by Conoco and Phillips (collectively, the "Old Notes"), respectively,
which offer consists of separate, independent offers to exchange the New Notes
of each series for Old Notes of that series (each an "Exchange Offer" and
sometimes collectively referred to as the "Exchange Offer").
ConocoPhillips reserves the right, at any time or from time to time, to
extend the period of time during which an Exchange Offer for the Old Notes of a
series is open, at its discretion, in which event the term "Expiration Date"
with respect to such series shall mean the latest date to which such Exchange
Offer is extended. ConocoPhillips reserves the right to extend such period for
each series independently. ConocoPhillips shall notify
The Bank of New York (the "Exchange Agent") of any extension by oral or written
notice and shall make a public announcement thereof no later than 9:00 a.m., New
York City time, on the next business day after the previously scheduled
Expiration Date.
This letter of transmittal is to be used by a holder of Old Notes of a
series (i) if certificates of Old Notes of such series are to be forwarded
herewith or (ii) if delivery of Old Notes of such series is to be made by
book-entry transfer to the account maintained by the Exchange Agent at The
Depository Trust Company ("DTC") pursuant to the procedures set forth in the
prospectus under the caption "The Exchange Offer -- Procedures for Tendering --
Book-Entry Transfer" and an "agent's message" is not delivered as described in
the prospectus under the caption "The Exchange Offer -- Procedures for Tendering
- -- Tendering Though DTC's Automated Tender Offer Program." Tenders by book-entry
transfer may also be made by delivering an agent's message in lieu of this
letter of transmittal pursuant to DTC's Automated Tender Offer Program ("ATOP").
Holders of Old Notes of a series whose Old Notes are not immediately available,
or who are unable to deliver their Old Notes, this letter of transmittal and all
other documents required hereby to the Exchange Agent or to comply with the
applicable procedures under DTC's ATOP on or prior to the Expiration Date for
the Exchange Offer for that series, must tender their Old Notes according to the
guaranteed delivery procedures set forth in the prospectus under the caption
"The Exchange Offer -- Guaranteed Delivery Procedures." See Instruction 2.
DELIVERY OF DOCUMENTS TO DTC DOES NOT CONSTITUTE DELIVERY TO THE EXCHANGE AGENT.
The term "holder" with respect to the Exchange Offer for Old Notes of a
series means any person in whose name such Old Notes are registered on the books
of the security registrar for the Old Notes, any person who holds such Old Notes
and has obtained a properly completed bond power from the registered holder or
any participant in the DTC system whose name appears on a security position
listing as the holder of such Old Notes and who desires to deliver such Old
Notes by book-entry transfer at DTC. The undersigned has completed, executed and
delivered this letter of transmittal to indicate the action the undersigned
desires to take with respect to such Exchange Offer. Holders who wish to tender
their Old Notes must complete this letter of transmittal in its entirety (unless
such Old Notes are to be tendered by book-entry transfer and an agent's message
is delivered in lieu hereof pursuant to DTC's ATOP).
PLEASE READ THE ENTIRE LETTER OF TRANSMITTAL AND THE PROSPECTUS CAREFULLY
BEFORE CHECKING ANY BOX BELOW.
THE INSTRUCTIONS INCLUDED WITH THIS LETTER OF TRANSMITTAL MUST BE FOLLOWED.
QUESTIONS AND REQUESTS FOR ASSISTANCE OR FOR ADDITIONAL COPIES OF THE PROSPECTUS
AND THIS LETTER OF TRANSMITTAL MAY BE DIRECTED TO THE EXCHANGE AGENT.
List below the Old Notes of each series tendered under this letter of
transmittal. If the space below is inadequate, list the title of the series, the
registered numbers and principal amounts on a separate signed schedule and affix
the list to this letter of transmittal.
- ------------------------------------------------------------------------------------------------------------------------------------
DESCRIPTION OF OLD NOTES TENDERED
- ------------------------------------------------------------------------------------------------------------------------------------
Name(s) and Address(es) Old Note(s) Tendered
of Registered Holder(s) Exactly
as Name(s) Appear(s) on Old
Notes (Please Fill In, If Blank)
- ------------------------------------------------------------------------------------------------------------------------------------
Title of Series* Registered Aggregate Principal Principal Amount
Number(s)** Amount Represented Tendered***
by Note(s)
------------------------------------------------------------------------------------------
------------------------------------------------------------------------------------------
------------------------------------------------------------------------------------------
------------------------------------------------------------------------------------------
Total
- ------------------------------------------------------------------------------------------------------------------------------------
* Either "3.625% Notes due 2007," "4.75% Notes due 2012" or "5.90% Notes due
2032."
** Need not be completed by book-entry holders.
*** Unless otherwise indicated, any tendering holder of Old Notes will be
deemed to have tendered the entire aggregate principal amount represented
by such Old Notes. All tenders must be in integral multiples of $1,000.
2
[ ] CHECK HERE IF TENDERED OLD NOTES ARE ENCLOSED HEREWITH.
[ ] CHECK HERE AND COMPLETE THE FOLLOWING IF TENDERED OLD NOTES ARE BEING
DELIVERED BY BOOK-ENTRY TRANSFER MADE TO THE ACCOUNT MAINTAINED BY THE
EXCHANGE AGENT WITH DTC (FOR USE BY ELIGIBLE INSTITUTIONS ONLY):
Name of Tendering Institution:
-------------------------------------------------
DTC Account Number(s):
---------------------------------------------------------
Transaction Code Number(s):
---------------------------------------------------
[ ] CHECK HERE AND COMPLETE THE FOLLOWING IF TENDERED OLD NOTES ARE BEING
DELIVERED PURSUANT TO A NOTICE OF GUARANTEED DELIVERY EITHER ENCLOSED
HEREWITH OR PREVIOUSLY DELIVERED TO THE EXCHANGE AGENT (COPY ATTACHED) (FOR
USE BY ELIGIBLE INSTITUTIONS ONLY):
Name(s) of Registered holder(s)
of Old Notes:
------------------------------------------------------------------
Date of Execution of Notice of
Guaranteed Delivery:
-----------------------------------------------------------
Window Ticket Number
(if available):
----------------------------------------------------------------
Name of Eligible Institution that
Guaranteed Delivery:
-----------------------------------------------------------
DTC Account Number(s) (if delivered by
book-entry transfer):
----------------------------------------------------------
Transaction Code Number(s) (if delivered by
book-entry transfer):
----------------------------------------------------------
Name of Tendering Institution (if delivered by
book-entry transfer):
----------------------------------------------------------
[ ] CHECK HERE AND COMPLETE THE FOLLOWING IF YOU ARE A BROKER-DEALER AND WISH
TO RECEIVE 10 ADDITIONAL COPIES OF THE PROSPECTUS AND 10 COPIES OF ANY
AMENDMENTS OR SUPPLEMENTS THERETO:
Name:
--------------------------------------------------------------------------
Address:
-----------------------------------------------------------------------
3
SIGNATURES MUST BE PROVIDED BELOW
PLEASE READ THE ACCOMPANYING INSTRUCTIONS CAREFULLY
Ladies and Gentlemen:
Subject to the terms and conditions of the Exchange Offer, the undersigned
hereby tenders to ConocoPhillips, Conoco and Phillips for exchange the principal
amount of Old Notes (including the related guarantees) indicated above. Subject
to and effective upon the acceptance for exchange of the principal amount of Old
Notes of any series tendered in accordance with this letter of transmittal, the
undersigned hereby exchanges, assigns and transfers to, or upon the order of,
ConocoPhillips, Conoco and Phillips all right, title and interest in and to such
Old Notes tendered for exchange hereby. The undersigned hereby irrevocably
constitutes and appoints the Exchange Agent the true and lawful agent and
attorney-in-fact for the undersigned (with full knowledge that said Exchange
Agent also acts as the agent for ConocoPhillips, Conoco and Phillips in
connection with the Exchange Offer) with respect to the tendered Old Notes with
full power of substitution to (i) deliver such Old Notes, or transfer ownership
of such Old Notes on the account books maintained by DTC, to ConocoPhillips,
Conoco and Phillips, as applicable, and deliver all accompanying evidences of
transfer and authenticity, and (ii) present such Old Notes for transfer on the
books of ConocoPhillips and receive all benefits and otherwise exercise all
rights of beneficial ownership of such Old Notes, all in accordance with the
terms of the Exchange Offer. The power of attorney granted in this paragraph
shall be deemed to be irrevocable and coupled with an interest.
The undersigned hereby represents and warrants that the undersigned has
full power and authority to tender, exchange, assign and transfer the Old Notes
tendered hereby and to acquire the New Notes issuable upon the exchange of such
tendered Old Notes, and that ConocoPhillips, Conoco and Phillips will acquire
good and unencumbered title thereto, free and clear of all liens, restrictions,
charges and encumbrances and not subject to any adverse claim, when the same are
accepted for exchange by ConocoPhillips, Conoco and Phillips.
The undersigned acknowledges that the Exchange Offer is being made in
reliance upon interpretations set forth in no-action letters issued to third
parties by the staff of the Securities and Exchange Commission (the "SEC"),
including Exxon Capital Holdings Corporation (available May 13, 1988), Morgan
Stanley & Co. Incorporated (available June 5, 1991), Mary Kay Cosmetics, Inc.
(available June 5, 1991), Shearman & Sterling (available July 2, 1993) and
similar no-action letters (the "Prior No-Action Letters"), that the New Notes
issued in exchange for the Old Notes pursuant to the Exchange Offer may be
offered for resale, resold and otherwise transferred by holders thereof (other
than any such holder that is an "affiliate" of ConocoPhillips, Conoco or
Phillips within the meaning of Rule 405 under the Securities Act), without
compliance with the registration and prospectus delivery provisions of the
Securities Act; provided that such New Notes are acquired in the ordinary course
of such holders' business and such holders are not engaged in, and do not intend
to engage in, and have no arrangement or understanding with any person to
participate in, a distribution of such New Notes. The SEC has not, however,
considered the Exchange Offer in the context of a no-action letter, and there
can be no assurance that the staff of the SEC would make a similar determination
with respect to the Exchange Offer as it has in other interpretations to other
parties.
The undersigned hereby further represents to ConocoPhillips, Conoco and
Phillips that (i) any New Notes received are being acquired in the ordinary
course of business of the person receiving such New Notes, whether or not the
undersigned, (ii) neither the undersigned nor any such other person has an
arrangement or understanding with any person to participate in the distribution
of the Old Notes or the New Notes within the meaning of the Securities Act and
(iii) neither the holder nor any such other person is an "affiliate," as defined
in Rule 405 under the Securities Act, of ConocoPhillips, Conoco or Phillips or,
if it is such an affiliate, it will comply with the registration and prospectus
delivery requirements of the Securities Act to the extent applicable.
If the undersigned is not a broker-dealer, the undersigned represents that
it is not engaged in, and does not intend to engage in, a distribution of New
Notes. If the undersigned is a broker-dealer, the undersigned represents that it
will receive New Notes for its own account in exchange for Old Notes that were
acquired as a result of market-making activities or other trading activities,
and it acknowledges that it will deliver a prospectus in connection with any
resale of such New Notes; however, by so acknowledging and by delivering a
prospectus, the undersigned will not be deemed to admit that it is an
"underwriter" within the meaning of the Securities Act. If the undersigned is a
broker-dealer, the undersigned represents that it did not purchase the Old Notes
to be exchanged for the New Notes from ConocoPhillips, Conoco or Phillips.
Additionally, the undersigned represents that it is not acting on behalf of any
person who could not truthfully make the foregoing representations and the
representations in the immediately preceding paragraph. The undersigned
acknowledges that if the undersigned is tendering Old Notes in the Exchange
Offer with the intention of participating in any manner in a distribution of the
New Notes (i)
4
the undersigned cannot rely on the position of the staff of the SEC set forth in
the Prior No-Action Letters and, in the absence of an exemption therefrom, must
comply with the registration and prospectus delivery requirements of the
Securities Act in connection with a secondary resale transaction of the New
Notes, in which case the registration statement must contain the selling
security holder information required by Item 507 or Item 508, as applicable, of
Regulation S-K under the Securities Act, and (ii) failure to comply with such
requirements in such instance could result in the undersigned incurring
liability for which the undersigned is not indemnified by ConocoPhillips, Conoco
or Phillips.
The undersigned will, upon request, execute and deliver any additional
documents deemed by the Exchange Agent or ConocoPhillips to be necessary or
desirable to complete the exchange, assignment and transfer of the Old Notes
tendered hereby, including the transfer of such Old Notes on the account books
maintained by DTC.
For purposes of an Exchange Offer for Old Notes of a series,
ConocoPhillips, Conoco and Phillips shall be deemed to have accepted for
exchange validly tendered Old Notes of such series when, as and if
ConocoPhillips gives oral or written notice thereof to the Exchange Agent. Any
tendered Old Notes that are not accepted for exchange pursuant to such Exchange
Offer for any reason will be returned, without expense, to the undersigned as
promptly as practicable after the Expiration Date for such Exchange Offer.
All authority conferred or agreed to be conferred by this letter of
transmittal shall survive the death, incapacity or dissolution of the
undersigned, and every obligation of the undersigned under this letter of
transmittal shall be binding upon the undersigned's successors, assigns, heirs,
executors, administrators, trustees in bankruptcy and legal representatives.
This tender may be withdrawn only in accordance with the procedures set forth in
the prospectus under the caption "The Exchange Offer -- Withdrawal of Tenders."
The undersigned acknowledges that ConocoPhillips', Conoco's and Phillips'
acceptance of properly tendered Old Notes pursuant to the procedures described
under the caption "The Exchange Offer -- Procedures for Tendering" in the
prospectus and in the instructions hereto will constitute a binding agreement
between the undersigned and ConocoPhillips, Conoco and Phillips upon the terms
and subject to the conditions of the Exchange Offer.
The Exchange Offer is subject to certain conditions set forth in the
prospectus under the caption "The Exchange Offer -- Conditions to the Exchange
Offer." The undersigned recognizes that as a result of these conditions (which
may be waived, in whole or in part, by ConocoPhillips), ConocoPhillips, Conoco
and Phillips may not be required to exchange any of the Old Notes tendered
hereby.
Unless otherwise indicated under "Special Issuance Instructions," please
issue the New Notes issued in exchange for the Old Notes accepted for exchange,
and return any Old Notes not tendered or not exchanged, in the name(s) of the
undersigned (or, in the case of a book-entry delivery of Old Notes, please
credit the account indicated above maintained at DTC). Similarly, unless
otherwise indicated under "Special Delivery Instructions," please mail or
deliver the New Notes issued in exchange for the Old Notes accepted for exchange
and any Old Notes not tendered or not exchanged (and accompanying documents, as
appropriate) to the undersigned at the address shown below the undersigned's
signature(s). In the event that both "Special Issuance Instructions" and
"Special Delivery Instructions" are completed, please issue the New Notes issued
in exchange for the Old Notes accepted for exchange in the name(s) of, and
return any Old Notes not tendered or not exchanged to, the person(s) (or
account(s)) so indicated. The undersigned recognizes that neither
ConocoPhillips, Conoco nor Phillips has any obligation pursuant to the "Special
Issuance Instructions" and "Special Delivery Instructions" to transfer any Old
Notes from the name of the registered holder(s) thereof if ConocoPhillips,
Conoco and Phillips do not accept for exchange any of the Old Notes so tendered
for exchange.
5
- ------------------------------------------------------------------------------------------------------------------------------------
SPECIAL ISSUANCE INSTRUCTIONS SPECIAL DELIVERY INSTRUCTIONS
(SEE INSTRUCTIONS 5 AND 6) (SEE INSTRUCTIONS 5 AND 6)
To be completed ONLY (i) if Old Notes in a principal To be completed ONLY if Old Notes in a principal
amount not tendered, or New Notes issued in exchange amount not tendered, or New Notes issued in exchange
for Old Notes accepted for exchange, are to be for Old Notes accepted for exchange, are to be mailed
issued in the name of someone other than the or delivered to someone other than the undersigned,
undersigned, or (ii) if Old Notes tendered by or to the undersigned at an address other than that
book-entry transfer which are not exchanged are to shown below the undersigned's signature. Mail or
be returned by credit to an account maintained at deliver New Notes and/or Old Notes to:
DTC other than the DTC Account Number set forth
above. Issue New Notes and/or Old Notes to:
Name: Name:
---------------------------------------------- -------------------------------------------------------
Address: Address:
------------------------------------------- ----------------------------------------------------
(include Zip Code) (include Zip Code)
-------------------------------------------------- -------------------------------------------------------------
(Tax Identification or Social Security Number) (Tax Identification or Social Security Number)
(Please Type or Print) (Please Type or Print)
- ------------------------------------------------------------------------------------------------------------------------------------
[ ] Credit unexchanged Old Notes delivered by book-entry transfer to the DTC
account number set forth below:
DTC Account Number:
------------------------------------------------------------
6
IMPORTANT
PLEASE SIGN HERE WHETHER OR NOT
OLD NOTES ARE BEING PHYSICALLY TENDERED HEREBY
(Complete Accompanying Substitute Form W-9 Below)
- ->
-----------------------------------------------------------------------------
- ->
-----------------------------------------------------------------------------
(Signature(s) of Registered Holder(s) of Old Notes)
Dated
-----------------------------
(The above lines must be signed by the registered holder(s) of Old Notes as
your/their name(s) appear(s) on the Old Notes or on a security position listing,
or by person(s) authorized to become registered holder(s) by a properly
completed bond power from the registered holder(s), a copy of which must be
transmitted with this letter of transmittal. If Old Notes to which this letter
of transmittal relate are held of record by two or more joint holders, then all
such holders must sign this letter of transmittal. If signature is by a trustee,
executor, administrator, guardian, attorney-in-fact, officer of a corporation or
other person acting in a fiduciary or representative capacity, then such person
must (i) set forth his or her full title below and (ii) unless waived by
ConocoPhillips, submit evidence satisfactory to ConocoPhillips of such person's
authority so to act. See Instruction 5 regarding the completion of this letter
of transmittal, printed below.)
Name(s):
-----------------------------------------------------------------------
(Please Type or Print)
Capacity:
----------------------------------------------------------------------
Address:
-----------------------------------------------------------------------
(Include Zip Code)
Area Code and Telephone Number:
------------------------------------------------
Taxpayer Identification or Social Security Number:
-----------------------------
MEDALLION SIGNATURE GUARANTEE
(IF REQUIRED BY INSTRUCTION 5)
Certain signatures must be guaranteed by an Eligible Guarantor Institution.
Signature(s) Guaranteed by an
Eligible Guarantor Institution:
- --------------------------------------------------------------------------------
(Authorized Signature)
- --------------------------------------------------------------------------------
(Title)
- --------------------------------------------------------------------------------
(Name of Firm)
- --------------------------------------------------------------------------------
(Address, Include Zip Code)
- --------------------------------------------------------------------------------
(Area Code and Telephone Number)
Dated
-----------------------------------
7
INSTRUCTIONS
FORMING PART OF THE TERMS AND CONDITIONS OF THE EXCHANGE OFFER
1. DELIVERY OF THIS LETTER OF TRANSMITTAL AND OLD NOTES OR AGENT'S MESSAGE
AND BOOK-ENTRY CONFIRMATIONS. All physically delivered Old Notes of a series or
any confirmation of a book-entry transfer to the Exchange Agent's account at DTC
of Old Notes of a series tendered by book-entry transfer (a "Book-Entry
Confirmation"), as well as a properly completed and duly executed copy of this
letter of transmittal or facsimile hereof (or an agent's message in lieu hereof
pursuant to DTC's ATOP), and any other documents required by this letter of
transmittal, must be received by the Exchange Agent at its address set forth
herein prior to 5:00 p.m., New York City time, on the Expiration Date for the
Exchange Offer for such series, or the tendering holder must comply with the
guaranteed delivery procedures set forth below. THE METHOD OF DELIVERY OF THE
TENDERED OLD NOTES, THIS LETTER OF TRANSMITTAL AND ALL OTHER REQUIRED DOCUMENTS
TO THE EXCHANGE AGENT IS AT THE ELECTION AND RISK OF THE HOLDER AND, EXCEPT AS
OTHERWISE PROVIDED BELOW, THE DELIVERY WILL BE DEEMED MADE ONLY WHEN ACTUALLY
RECEIVED OR CONFIRMED BY THE EXCHANGE AGENT. INSTEAD OF DELIVERY BY MAIL, IT IS
RECOMMENDED THAT THE HOLDER USE AN OVERNIGHT OR COURIER SERVICE. IN ALL CASES,
SUFFICIENT TIME SHOULD BE ALLOWED TO ASSURE DELIVERY TO THE EXCHANGE AGENT
BEFORE THE EXPIRATION DATE. NO LETTER OF TRANSMITTAL OR OLD NOTES SHOULD BE SENT
TO CONOCOPHILLIPS, CONOCO OR PHILLIPS.
2. GUARANTEED DELIVERY PROCEDURES. Holders who wish to tender their Old
Notes and (a) whose Old Notes are not immediately available, (b) who cannot
deliver their Old Notes, this letter of transmittal or any other documents
required hereby to the Exchange Agent prior to the applicable Expiration Date or
(c) who are unable to comply with the applicable procedures under DTC's ATOP
prior to the applicable Expiration Date, must tender their Old Notes according
to the guaranteed delivery procedures set forth in the prospectus. Pursuant to
such procedures: (i) such tender must be made by or through a firm which is a
member of a registered national securities exchange or of the National
Association of Securities Dealers, Inc., a commercial bank or trust company
having an office or correspondent in the United States or an "eligible guarantor
institution" within the meaning of Rule 17Ad-15 under the Securities Exchange
Act of 1934, as amended (an "Eligible Institution"); (ii) prior to the
applicable Expiration Date, the Exchange Agent must have received from the
Eligible Institution a properly completed and duly executed notice of guaranteed
delivery (by facsimile transmission, mail, courier or overnight delivery) or a
properly transmitted agent's message and notice of guaranteed delivery setting
forth the name and address of the holder of the Old Notes, the registration
number(s) of such Old Notes and the total principal amount of Old Notes
tendered, stating that the tender is being made thereby and guaranteeing that,
within three New York Stock Exchange trading days after such Expiration Date,
this letter of transmittal (or facsimile hereof or an agent's message in lieu
hereof) together with the Old Notes in proper form for transfer (or a Book-Entry
Confirmation) and any other documents required hereby, will be deposited by the
Eligible Institution with the Exchange Agent; and (iii) this letter of
transmittal (or facsimile hereof or an agent's message in lieu hereof) together
with the certificates for all physically tendered Old Notes in proper form for
transfer (or Book-Entry Confirmation, as the case may be) and all other
documents required hereby are received by the Exchange Agent within three New
York Stock Exchange trading days after such Expiration Date.
Any holder of Old Notes who wishes to tender Old Notes pursuant to the
guaranteed delivery procedures described above must ensure that the Exchange
Agent receives the notice of guaranteed delivery prior to 5:00 p.m., New York
City time, on the applicable Expiration Date. Upon request of the Exchange
Agent, a notice of guaranteed delivery will be sent to holders who wish to
tender their Old Notes according to the guaranteed delivery procedures set forth
above.
See "The Exchange Offer -- Guaranteed Delivery Procedures" section of the
prospectus.
3. TENDER BY HOLDER. Only a holder of Old Notes may tender such Old Notes
in the Exchange Offer. Any beneficial holder of Old Notes who is not the
registered holder and who wishes to tender should arrange with the registered
holder to execute and deliver this letter of transmittal on his behalf or must,
prior to completing and executing this letter of transmittal and delivering his
Old Notes, either make appropriate arrangements to register ownership of the Old
Notes in such holder's name or obtain a properly completed bond power from the
registered holder.
4. PARTIAL TENDERS. Tenders of Old Notes will be accepted only in integral
multiples of $1,000. If less than the entire principal amount of any Old Notes
is tendered, the tendering holder should fill in the principal amount tendered
in the fifth column of the box entitled "Description of Old Notes Tendered"
above. The entire principal amount of Old Notes delivered to the Exchange Agent
will be deemed to have been tendered unless
8
otherwise indicated. If the entire principal amount of all Old Notes is not
tendered, then Old Notes for the principal amount of Old Notes not tendered and
New Notes issued in exchange for any Old Notes accepted will be returned to the
holder as promptly as practicable after the Old Notes are accepted for exchange.
5. SIGNATURES ON THIS LETTER OF TRANSMITTAL; BOND POWERS AND ENDORSEMENTS;
MEDALLION GUARANTEE OF SIGNATURES. If this letter of transmittal (or facsimile
hereof) is signed by the record holder(s) of the Old Notes tendered hereby, the
signature(s) must correspond exactly with the name(s) as written on the face of
the Old Notes without alteration, enlargement or any change whatsoever. If this
letter of transmittal (or facsimile hereof) is signed by a participant in DTC,
the signature must correspond with the name as it appears on the security
position listing as the holder of the Old Notes. If any tendered Old Notes are
owned of record by two or more joint owners, all of such owners must sign this
letter of transmittal.
If this letter of transmittal (or facsimile hereof) is signed by the
registered holder(s) of Old Notes listed and tendered hereby and the New Notes
issued in exchange therefor are to be issued (or any untendered principal amount
of Old Notes is to be reissued) to the registered holder(s), the said holder(s)
need not and should not endorse any tendered Old Notes, nor provide a separate
bond power. In any other case, such holder(s) must either properly endorse the
Old Notes tendered or transmit a properly completed separate bond power with
this letter of transmittal, with the signatures on the endorsement or bond power
guaranteed by an Eligible Institution that is a member in good standing of a
recognized Medallion Program approved by the Securities Transfer Association,
Inc., including the Security Transfer Agent Medallion Program, the New York
Stock Exchange, Inc. Medallion Signature Program or the Stock Exchanges
Medallion Program (an "Eligible Guarantor Institution").
If this letter of transmittal (or facsimile hereof) or any Old Notes or
bond powers are signed by trustees, executors, administrators, guardians,
attorneys-in-fact, officers of corporations or others acting in a fiduciary or
representative capacity, such persons should so indicate when signing, and,
unless waived by ConocoPhillips, evidence satisfactory to ConocoPhillips of
their authority to act must be submitted with this letter of transmittal.
NO SIGNATURE GUARANTEE IS REQUIRED IF (i) THIS LETTER OF TRANSMITTAL (OR
FACSIMILE HEREOF) IS SIGNED BY THE REGISTERED HOLDER(s) OF THE OLD NOTES
TENDERED HEREIN (OR BY A PARTICIPANT IN DTC WHOSE NAME APPEARS ON A SECURITY
POSITION LISTING AS THE OWNER OF THE TENDERED OLD NOTES) AND THE NEW NOTES ARE
TO BE ISSUED DIRECTLY TO SUCH REGISTERED HOLDER(s) (OR, IF SIGNED BY A
PARTICIPANT IN DTC, DEPOSITED TO SUCH PARTICIPANT'S ACCOUNT AT DTC) AND NEITHER
THE BOX ENTITLED "SPECIAL DELIVERY INSTRUCTIONS" NOR THE BOX ENTITLED "SPECIAL
REGISTRATION INSTRUCTIONS" HAS BEEN COMPLETED, OR (II) SUCH OLD NOTES ARE
TENDERED FOR THE ACCOUNT OF AN ELIGIBLE INSTITUTION. IN ALL OTHER CASES, ALL
SIGNATURES ON THIS LETTER OF TRANSMITTAL (OR FACSIMILE HEREOF) MUST BE
GUARANTEED BY AN ELIGIBLE GUARANTOR INSTITUTION.
6. SPECIAL ISSUANCE AND DELIVERY INSTRUCTIONS. Tendering holders should
indicate, in the applicable box or boxes, the name and address to which New
Notes or substitute Old Notes for principal amounts not tendered or not accepted
for exchange are to be issued or sent, if different from the name and address of
the person signing this letter of transmittal. In the case of issuance in a
different name, the taxpayer identification or social security number of the
person named must also be indicated. Holders tendering Old Notes by book-entry
transfer may request that Old Notes not exchanged be credited to such account
maintained at DTC as such noteholder may designate hereon. If no such
instructions are given, such Old Notes not exchanged will be returned to the
name and address (or account number) of the person signing this letter of
transmittal.
7. TRANSFER TAXES. ConocoPhillips will pay or cause to be paid all transfer
taxes, if any, applicable to the exchange of Old Notes pursuant to the Exchange
Offer. If, however, New Notes or Old Notes for principal amounts not tendered or
accepted for exchange are to be delivered to, or are to be registered or issued
in the name of, any person other than the registered holder of the Old Notes
tendered hereby, or if tendered Old Notes are registered in the name of any
person other than the person signing this letter of transmittal, or if a
transfer tax is imposed for any reason other than the exchange of Old Notes
pursuant to the Exchange Offer, then the amount of any such transfer taxes
(whether imposed on the registered holder or any other persons) will be payable
by the tendering holder. If satisfactory evidence of payment of such taxes or
exemption therefrom is not submitted with this letter of transmittal, the amount
of such transfer taxes will be billed directly to such tendering holder and the
Exchange Agent will retain possession of an amount of New Notes with a face
amount at least equal to the amount of such transfer taxes due by such tendering
holder pending receipt by the Exchange Agent of the amount of such taxes.
9
8. TAX IDENTIFICATION NUMBER. Federal income tax law requires that a holder
of any Old Notes or New Notes must provide ConocoPhillips (as payor) with its
correct taxpayer identification number ("TIN"), which, in the case of a holder
who is an individual is his or her social security number. If ConocoPhillips is
not provided with the correct TIN, the holder may be subject to a $50 penalty
imposed by the Internal Revenue Service and backup withholding of 30% on
interest payments on the New Notes.
To prevent backup withholding, each tendering holder must provide such
holder's correct TIN by completing the Substitute Form W-9 set forth herein,
certifying that the TIN provided is correct (or that such holder is awaiting a
TIN), and that (i) the holder has not been notified by the Internal Revenue
Service that such holder is subject to backup withholding as a result of failure
to report all interest or dividends or (ii) the Internal Revenue Service has
notified the holder that such holder is no longer subject to backup withholding.
If the New Notes will be registered in more than one name or will not be in the
name of the actual owner, consult the instructions on Internal Revenue Service
Form W-9, which may be obtained from the Exchange Agent, for information on
which TIN to report.
Certain foreign individuals and entities will not be subject to backup
withholding or information reporting if they submit a Form W-8, signed under
penalties of perjury, attesting to their foreign status. A Form W-8 can be
obtained from the Exchange Agent.
If such holder does not have a TIN, such holder should consult the
instructions on Form W-9 concerning applying for a TIN, check the box in Part 3
of the Substitute Form W-9, write "applied for" in lieu of its TIN and sign and
date the form and the Certificate of Awaiting Taxpayer Identification Number.
Checking this box, writing "applied for" on the form and signing such
certificate means that such holder has already applied for a TIN or that such
holder intends to apply for one in the near future. If such holder does not
provide its TIN to ConocoPhillips within 60 days, backup withholding will begin
and continue until such holder furnishes its TIN to ConocoPhillips.
ConocoPhillips reserves the right in its sole discretion to take whatever
steps are necessary to comply with ConocoPhillips' obligations regarding backup
withholding.
9. VALIDITY OF TENDERS. All questions as to the validity, form,
eligibility, time of receipt, acceptance and withdrawal of tendered Old Notes
will be determined by ConocoPhillips in its sole discretion, which determination
will be final and binding. ConocoPhillips reserves the absolute right to reject
any and all Old Notes not properly tendered or any Old Notes ConocoPhillips'
acceptance of which might, in the opinion of ConocoPhillips' counsel, be
unlawful. ConocoPhillips also reserves the absolute right to waive any
conditions of the Exchange Offer or defects or irregularities of tenders as to
particular Old Notes. ConocoPhillips' interpretation of the terms and conditions
of the Exchange Offer (including this letter of transmittal and the instructions
hereto) shall be final and binding on all parties. Unless waived, any defects or
irregularities in connection with tenders of Old Notes must be cured within such
time as ConocoPhillips shall determine. Neither ConocoPhillips, Conoco,
Phillips, the Exchange Agent nor any other person shall be under any duty to
give notification of defects or irregularities with respect to tenders of Old
Notes nor shall any of them incur any liability for failure to give such
notification.
10. WAIVER OF CONDITIONS. ConocoPhillips reserves the absolute right to
waive, in whole or part, any of the conditions to the Exchange Offer set forth
in the prospectus.
11. NO CONDITIONAL TENDER. No alternative, conditional, irregular or
contingent tender of Old Notes will be accepted.
12. MUTILATED, LOST, STOLEN OR DESTROYED OLD NOTES. Any holder whose Old
Notes have been mutilated, lost, stolen or destroyed should contact the Exchange
Agent at the address indicated above for further instructions. This letter of
transmittal and related documents cannot be processed until the procedures for
replacing lost, stolen or destroyed Old Notes have been followed.
13. REQUESTS FOR ASSISTANCE OR ADDITIONAL COPIES. Requests for assistance
or for additional copies of the prospectus or this letter of transmittal may be
directed to the Exchange Agent at the address or telephone number set forth on
the cover page of this letter of transmittal. Holders may also contact their
broker, dealer, commercial bank, trust company or other nominee for assistance
concerning the Exchange Offer.
10
14. WITHDRAWAL. Tenders may be withdrawn only pursuant to the limited
withdrawal rights set forth in the prospectus under the caption "The Exchange
Offer -- Withdrawal of Tenders."
IMPORTANT: THIS LETTER OF TRANSMITTAL OR A MANUALLY SIGNED FACSIMILE HEREOF OR
AN AGENT'S MESSAGE IN LIEU HEREOF (TOGETHER WITH THE OLD NOTES DELIVERED BY
BOOK-ENTRY TRANSFER OR IN ORIGINAL HARD COPY FORM) MUST BE RECEIVED BY THE
EXCHANGE AGENT, OR THE NOTICE OF GUARANTEED DELIVERY MUST BE RECEIVED BY THE
EXCHANGE AGENT, PRIOR TO THE EXPIRATION DATE.
11
- ------------------------------------------------------------------------------------------------------------------------------------
SUBSTITUTE
PART 1--PLEASE PROVIDE YOUR TIN:
FORM W-9 TIN IN THE BOX AT RIGHT AND Social Security Number
DEPARTMENT OF THE CERTIFY BY SIGNING AND DATING or
TREASURY BELOW Employer Identification
INTERNAL REVENUE SERVICE Number
---------------------------------------------------------------------------------------------
PAYOR'S REQUEST
FOR TAXPAYER
IDENTIFICATION NUMBER PART 2--TIN Applied For [ ]
("TIN") AND ---------------------------------------------------------------------------------------------
CERTIFICATION CERTIFICATION:
UNDER THE PENALTIES OF PERJURY,
I CERTIFY THAT:
(1) the number shown on this form
is my correct Taxpayer
Identification Number (or I am
waiting for a number to be
issued to me),
(2) I am not subject to backup withholding either because:
(a) I am exempt from backup withholding, or
(b) I have not been notified by the Internal Revenue Service (the
"IRS") that I am subject to backup withholding as a result of a
failure to report all interest or dividends, or
(c) the IRS has notified me that I am no longer subject to backup
withholding, and
(3) any other information provided on this form is true and correct.
SIGNATURE DATE
------------------------------------------- --------------------------
- ------------------------------------------------------------------------------------------------------------------------------------
You must cross out item (2) of the above certification if you have been notified by the IRS that you are subject to backup
withholding because of underreporting of interest or dividends on your tax return and you have not been notified by the IRS that
you are no longer subject to backup withholding.
- ------------------------------------------------------------------------------------------------------------------------------------
FAILURE TO COMPLETE AND RETURN THIS FORM MAY RESULT IN BACKUP WITHHOLDING
OF 30% OF ANY PAYMENTS MADE TO YOU WITH RESPECT TO THE NEW NOTES.
YOU MUST COMPLETE THE FOLLOWING CERTIFICATE IF YOU CHECKED THE BOX
IN PART 2 OF SUBSTITUTE FORM W-9
- --------------------------------------------------------------------------------
CERTIFICATE OF AWAITING TAXPAYER IDENTIFICATION NUMBER
I certify under penalties of perjury that a taxpayer identification number
has not been issued to me, and either (a) I have mailed or delivered an
application to receive a taxpayer identification number to the appropriate
Internal Revenue Service Center or Social Security Administrative Office or (b)
I intend to mail or deliver an application in the near future. I understand that
if I do not provide a taxpayer identification number, 30 percent of all
reportable payments made to me will be withheld until I provide the number.
SIGNATURE DATE
-------------------------------------- ----------------------
- --------------------------------------------------------------------------------
12
EXHIBIT 99.2
CONOCOPHILLIPS
NOTICE OF GUARANTEED DELIVERY
FOR
TENDER OF ALL OUTSTANDING
3.625% NOTES DUE 2007 4.75% NOTES DUE 2012 5.90% NOTES DUE 2032
IN EXCHANGE FOR IN EXCHANGE FOR IN EXCHANGE FOR
REGISTERED REGISTERED REGISTERED
3.625% NOTES DUE 2007 4.75% NOTES DUE 2012 5.90% NOTES DUE 2032
FULLY AND UNCONDITIONALLY GUARANTEED BY
CONOCO INC. AND PHILLIPS PETROLEUM COMPANY
This form, or one substantially equivalent hereto, must be used by a holder
to accept the Exchange Offer relating to 3.625% Notes due 2007, 4.75% Notes due
2012 and 5.90% Notes due 2032 of ConocoPhillips fully and unconditionally
guaranteed by Conoco Inc. and Phillips Petroleum Company, and to tender Old
Notes to The Bank of New York, as exchange agent (the "Exchange Agent"),
pursuant to the guaranteed delivery procedures described in "The Exchange Offer
- -- Guaranteed Delivery Procedures" of the prospectus dated , ,
of ConocoPhillips, Conoco and Phillips and in Instruction 2 to the related
letter of transmittal. Any holder who wishes to tender Old Notes of a series
pursuant to such guaranteed delivery procedures must ensure that the Exchange
Agent receives this notice of guaranteed delivery, properly completed and duly
executed, prior to the Expiration Date (as defined below) of the Exchange Offer
for such series. Capitalized terms used but not defined herein have the meanings
ascribed to them in the letter of transmittal.
- --------------------------------------------------------------------------------
EACH EXCHANGE OFFER WILL EXPIRE AT 5:00 P.M., NEW YORK CITY TIME, ON ,
, UNLESS EXTENDED (THE "EXPIRATION DATE"). OUTSTANDING NOTES OF A SERIES
TENDERED IN AN EXCHANGE OFFER MAY BE WITHDRAWN AT ANY TIME PRIOR TO 5:00 P.M.,
NEW YORK CITY TIME, ON THE EXPIRATION DATE FOR THAT EXCHANGE OFFER.
- --------------------------------------------------------------------------------
The Exchange Agent for the Exchange Offer is:
THE BANK OF NEW YORK
(212) 815-2742
BY OVERNIGHT DELIVERY, COURIER OR MAIL (IF BY
MAIL, REGISTERED OR CERTIFIED MAIL RECOMMENDED):
The Bank of New York
101 Barclay Street - 7 East Floor
New York, New York 10286
Attn: Enrique Lopez
Reorganization Unit - 7E
BY FACSIMILE TRANSMISSION (ELIGIBLE INSTITUTIONS ONLY):
(212) 298-1915
Attention: Enrique Lopez
Confirm by Telephone:
(212) 815-2742
DELIVERY OF THIS INSTRUMENT TO AN ADDRESS OTHER THAN AS SET FORTH ABOVE OR
TRANSMISSION OF INSTRUCTIONS VIA A FACSIMILE NUMBER OTHER THAN THE ONE LISTED
ABOVE WILL NOT CONSTITUTE A VALID DELIVERY. THE INSTRUCTIONS ACCOMPANYING THIS
NOTICE OF GUARANTEED DELIVERY SHOULD BE READ CAREFULLY BEFORE THE NOTICE OF
GUARANTEED DELIVERY IS COMPLETED.
This notice of guaranteed delivery is not to be used to guarantee
signatures. If a signature on a letter of transmittal is required to be
guaranteed by an "Eligible Institution" under the instructions thereto, that
signature guarantee must appear in the applicable space in the box provided on
the letter of transmittal for guarantee of signatures.
Ladies and Gentlemen:
The undersigned hereby tenders to ConocoPhillips, Conoco and Phillips, in
accordance with their offer, upon the terms and subject to the conditions set
forth in the prospectus and the related letter of transmittal, receipt of which
is hereby acknowledged, the principal amount of Old Notes of the series set
forth below pursuant to the guaranteed delivery procedures set forth in the
prospectus under the caption "The Exchange Offer -- Guaranteed Delivery
Procedures" and in Instruction 2 of the letter of transmittal.
The undersigned hereby tenders the Old Notes of the series listed below:
- -----------------------------------------------------------------------------------------------------------
Certificate Number(s) (if
Title of known) of Old Notes Aggregate Principal Aggregate Principal
Series* or Account Number at DTC Amount Represented Amount Tendered
- -----------------------------------------------------------------------------------------------------------
- -----------------------------------------------------------------------------------------------------------
PLEASE SIGN AND COMPLETE
- --------------------------------------------------------- -----------------------------------------
- --------------------------------------------------------- -----------------------------------------
Names of Registered Holder(s) Signature(s) of Registered Holder(s) or
Authorized Signatory
- ---------------------------------------------------------
- ---------------------------------------------------------
Address Dated:
-----------------------------------
- ---------------------------------------------------------
Area Code and Telephone Number(s)
- -----------------------------------------------------------------------------------------------------------
* Either "3.625% Notes due 2007," "4.75% Notes due 2012" or "5.90% Notes due
2032."
---------------------
2
THIS NOTICE OF GUARANTEED DELIVERY MUST BE SIGNED BY THE REGISTERED
HOLDER(s) OF OLD NOTES EXACTLY AS THE NAME(s) OF SUCH PERSON(s) APPEAR(s) ON
CERTIFICATES FOR OLD NOTES OR ON A SECURITY POSITION LISTING AS THE OWNER OF OLD
NOTES, OR BY PERSON(s) AUTHORIZED TO BECOME HOLDER(s) BY ENDORSEMENTS AND
DOCUMENTS TRANSMITTED WITH THIS NOTICE OF GUARANTEED DELIVERY. IF SIGNATURE IS
BY A TRUSTEE, EXECUTOR, ADMINISTRATOR, GUARDIAN, ATTORNEY-IN-FACT, OFFICER OF A
CORPORATION OR OTHER PERSON ACTING IN A FIDUCIARY OR REPRESENTATIVE CAPACITY,
SUCH PERSON MUST PROVIDE THE FOLLOWING INFORMATION:
PLEASE PRINT NAME(s) AND ADDRESS(ES)
Name(s):
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
Capacity:
- --------------------------------------------------------------------------------
Address(es):
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
GUARANTEE
(Not to be used for signature guarantee)
The undersigned, a firm which is a member of a registered national
securities exchange or of the National Association of Securities Dealers, Inc.,
a commercial bank or trust company having an office or correspondent in the
United States, or an "eligible guarantor institution" within the meaning of Rule
17Ad-15 under the Securities Exchange Act of 1934, hereby guarantees deposit
with the Exchange Agent of the letter of transmittal (or facsimile thereof or
agent's message in lieu thereof), together with the Old Notes of the series
tendered hereby in proper form for transfer (or confirmation of the book-entry
transfer of such Old Notes into the Exchange Agent's account at the DTC
described in the prospectus under the caption "The Exchange Offer -- Procedures
for Tendering -- Book-Entry Transfer" and in the letter of transmittal) and any
other required documents, all by 5:00 p.m., New York City time, within three New
York Stock Exchange trading days following the Expiration Date for such series.
Name of Firm:
---------------------------------- ------------------------------------------------
(Authorized Signature)
Address:
---------------------------------------
(Include Zip Code) Name:
------------------------------------------
Area Code and Tel. Number: Title:
-----------------------------------------
- ------------------------------------------------ (Please Type or Print)
Date:
------------------------------------------
DO NOT SEND OLD NOTES WITH THIS FORM. ACTUAL SURRENDER OF OLD NOTES MUST BE
MADE PURSUANT TO, AND BE ACCOMPANIED BY, A PROPERLY COMPLETED AND DULY EXECUTED
LETTER OF TRANSMITTAL AND ANY OTHER REQUIRED DOCUMENTS.
3
INSTRUCTIONS FOR NOTICE OF GUARANTEED DELIVERY
1. DELIVERY OF THIS NOTICE OF GUARANTEED DELIVERY. A properly completed and
duly executed copy of this notice of guaranteed delivery (or facsimile hereof or
an agent's message and notice of guaranteed delivery in lieu hereof) and any
other documents required by this notice of guaranteed delivery with respect to
the Old Notes of a series must be received by the Exchange Agent at its address
set forth herein prior to the Expiration Date of the Exchange Offer for that
series. Delivery of such notice of guaranteed delivery may be made by facsimile
transmission, mail, courier or overnight delivery. THE METHOD OF DELIVERY OF
THIS NOTICE OF GUARANTEED DELIVERY AND ANY OTHER REQUIRED DOCUMENTS TO THE
EXCHANGE AGENT IS AT THE ELECTION AND SOLE RISK OF THE HOLDER, AND THE DELIVERY
WILL BE DEEMED MADE ONLY WHEN ACTUALLY RECEIVED BY THE EXCHANGE AGENT. If
delivery is by mail, registered mail with return receipt requested, properly
insured, is recommended. As an alternative to delivery by mail, holders may wish
to consider using an overnight or courier service. In all cases, sufficient time
should be allowed to assure timely delivery. For a description of the guaranteed
delivery procedures, see Instruction 2 of the letter of transmittal.
2. SIGNATURES ON THIS NOTICE OF GUARANTEED DELIVERY. If this notice of
guaranteed delivery (or facsimile hereof) is signed by the registered holder(s)
of the Old Notes referred to herein, the signature(s) must correspond exactly
with the name(s) as written on the face of the Old Notes without alteration,
enlargement or any change whatsoever. If this notice of guaranteed delivery (or
facsimile hereof) is signed by a participant in the DTC whose name appears on a
security position listing as the owner of the Old Notes, the signature must
correspond with the name as it appears on the security position listing as the
owner of the Old Notes.
If this notice of guaranteed delivery (or facsimile hereof) is signed by a
person other than the registered holder(s) of any Old Notes listed or a
participant of the DTC, this notice of guaranteed delivery must be accompanied
by appropriate bond powers, signed as the name(s) of the registered holder(s)
appear(s) on the Old Notes or signed as the name(s) of the participant appears
on the DTC's security position listing.
If this notice of guaranteed delivery (or facsimile hereof) is signed by a
trustee, executor, administrator, guardian, attorney-in-fact, officer of a
corporation or other person acting in a fiduciary or representative capacity,
such person should so indicate when signing and submit herewith evidence
satisfactory to the Exchange Agent of such person's authority to so act.
3. REQUESTS FOR ASSISTANCE OR ADDITIONAL COPIES. Questions and requests for
assistance and requests for additional copies of the prospectus and this notice
of guaranteed delivery may be directed to the Exchange Agent at the address set
forth on the cover page hereof. Holders may also contact their broker, dealer,
commercial bank, trust company or other nominee for assistance concerning the
Exchange Offer.
4
EXHIBIT 99.3
CONOCOPHILLIPS
LETTER TO
DEPOSITORY TRUST COMPANY PARTICIPANTS
FOR
TENDER OF ALL OUTSTANDING
3.625% NOTES DUE 2007 4.75% NOTES DUE 2012 IN 5.90% NOTES DUE 2032
IN EXCHANGE FOR EXCHANGE FOR IN EXCHANGE FOR
REGISTERED REGISTERED REGISTERED
3.625% NOTES DUE 2007 4.75% NOTES DUE 2012 5.90% NOTES DUE 2032
FULLY AND UNCONDITIONALLY GUARANTEED BY
CONOCO INC. AND PHILLIPS PETROLEUM COMPANY
- --------------------------------------------------------------------------------
EACH EXCHANGE OFFER WILL EXPIRE AT 5:00 P.M., NEW YORK CITY TIME, ON , ,
UNLESS EXTENDED (THE "EXPIRATION DATE"). OUTSTANDING NOTES OF A SERIES TENDERED
IN AN EXCHANGE OFFER MAY BE WITHDRAWN AT ANY TIME PRIOR TO 5:00 P.M., NEW YORK
CITY TIME, ON THE EXPIRATION DATE FOR THAT EXCHANGE OFFER.
- --------------------------------------------------------------------------------
To Depository Trust Company Participants:
We are enclosing with this letter the material listed below relating to the
offer by ConocoPhillips, Conoco Inc. and Phillips Petroleum Company to exchange
ConocoPhillips' 3.625% Notes due 2007, 4.75% Notes due 2012 and 5.90% Notes due
2032 fully and unconditionally guaranteed by Conoco and Phillips (collectively,
the "New Notes"), the issuance of which has been registered under the Securities
Act of 1933, for a like principal amount of ConocoPhillips' issued and
outstanding 3.625% Notes due 2007, 4.75% Notes due 2012 and 5.90% Notes due 2032
fully and unconditionally guaranteed by Conoco and Phillips (collectively, the
"Old Notes"), which offer consists of separate, independent offers to exchange
the New Notes of each series for Old Notes of that series (each an "Exchange
Offer" and sometimes collectively referred to as the "Exchange Offer"), upon the
terms and subject to the conditions set forth in the prospectus dated , of
ConocoPhillips, Conoco and Phillips and the related letter of transmittal.
We are enclosing copies of the following documents:
1. Prospectus dated , ;
2. Letter of transmittal, together with accompanying Substitute Form
W-9 Guidelines;
3. Notice of guaranteed delivery; and
4. Letter that may be sent to your clients for whose account you hold
Old Notes in your name or in the name of your nominee, with space provided
for obtaining that client's instruction with regard to the Exchange Offer.
We urge you to contact your clients promptly. Please note that each
Exchange Offer will expire at 5:00 p.m., New York City time, on , , unless
extended.
No Exchange Offer for Old Notes of a series is conditioned upon any minimum
aggregate principal amount of Old Notes of that series being tendered for
exchange or upon the consummation of any other Exchange Offer.
Pursuant to the letter of transmittal, each holder of Old Notes will
represent to ConocoPhillips, Conoco and Phillips that:
- any New Notes received are being acquired in the ordinary course of
business of the person receiving such New Notes;
- such person does not have an arrangement or understanding with any
person to participate in the distribution of the Old Notes or the New
Notes within the meaning of the Securities Act;
- such person is not an "affiliate," as defined in Rule 405 under the
Securities Act, of ConocoPhillips, Conoco or Phillips, or, if it is
such an affiliate, it will comply with the registration and prospectus
delivery requirements of the Securities Act to the extent applicable;
- if such person is not a broker-dealer, it is not engaged in, and does
not intend to engage in, a distribution of New Notes;
- if such person is a broker-dealer, it will receive New Notes for its
own account in exchange for Old Notes that were acquired as a result
of market-making activities or other trading activities, and it will
deliver a prospectus in connection with any resale of such New Notes;
however, by so acknowledging and by delivering a prospectus, it will
not be deemed to admit that it is an "underwriter" within the meaning
of the Securities Act;
- if such person is a broker-dealer, it did not purchase the Old Notes
to be exchanged for the New Notes from ConocoPhillips, Conoco or
Phillips; and
- such person is not acting on behalf of any person who could not
truthfully and completely make the foregoing representations.
The enclosed Letter to Clients contains an authorization by the beneficial
owners of the Old Notes for you to make the foregoing representations.
Neither ConocoPhillips, Conoco nor Phillips will pay any fee or commission
to any broker or dealer or to any other person (other than the Exchange Agent)
in connection with the solicitation of tenders of Old Notes under the Exchange
Offer. ConocoPhillips will pay or cause to be paid any transfer taxes payable on
the transfer of Old Notes to it, except as otherwise provided in Instruction 7
of the enclosed Letter of Transmittal.
Additional copies of the enclosed material may be obtained from us upon
request.
Very truly yours,
THE BANK OF NEW YORK
2
EXHIBIT 99.4
CONOCOPHILLIPS
LETTER TO CLIENTS
FOR
TENDER OF ALL OUTSTANDING
3.625% NOTES DUE 2007 4.75% NOTES DUE 2012 IN 5.90% NOTES DUE 2032
IN EXCHANGE FOR EXCHANGE FOR IN EXCHANGE FOR
REGISTERED REGISTERED REGISTERED
3.625% NOTES DUE 2007 4.75% NOTES DUE 2012 5.90% NOTES DUE 2032
FULLY AND UNCONDITIONALLY GUARANTEED BY
CONOCO INC. AND PHILLIPS PETROLEUM COMPANY
- --------------------------------------------------------------------------------
EACH EXCHANGE OFFER WILL EXPIRE AT 5:00 P.M., NEW YORK CITY TIME, ON ,
, UNLESS EXTENDED (THE "EXPIRATION DATE"). OUTSTANDING NOTES OF A SERIES
TENDERED IN AN EXCHANGE OFFER MAY BE WITHDRAWN AT ANY TIME PRIOR TO 5:00 P.M.,
NEW YORK CITY TIME, ON THE EXPIRATION DATE FOR THAT EXCHANGE OFFER.
- --------------------------------------------------------------------------------
To Our Clients:
We are enclosing with this letter a prospectus dated , of
ConocoPhillips, Conoco Inc. and Phillips Petroleum Company and the related
letter of transmittal. These two documents together constitute their offer to
exchange ConocoPhillips' 3.625% Notes due 2007, 4.75% Notes due 2012 and 5.90%
Notes due 2032 fully and unconditionally guaranteed by Conoco and Phillips
(collectively, the "New Notes"), the issuance of which has been registered under
the Securities Act of 1933, for a like principal amount of ConocoPhillips'
issued and outstanding 3.625% Notes due 2007, 4.75% Notes due 2012 and 5.90%
Notes due 2032 fully and unconditionally guaranteed by Conoco and Phillips
(collectively, the "Old Notes"), which offer consists of separate, independent
offers to exchange the New Notes of each series for Old Notes of that series
(each an "Exchange Offer" and sometimes collectively referred to as the
"Exchange Offer").
No Exchange Offer for Old Notes of a series is conditioned upon any minimum
aggregate principal amount of Old Notes of that series being tendered for
exchange or upon the consummation of any other Exchange Offer.
We are the holder of record of Old Notes held by us for your own account. A
tender of your Old Notes held by us can be made only by us as the record holder
according to your instructions. The letter of transmittal is furnished to you
for your information only and cannot be used by you to tender Old Notes held by
us for your account.
We request instructions as to whether you wish to tender any or all of the
Old Notes held by us for your account under the terms and conditions of the
Exchange Offer. We also request that you confirm that we may, on your behalf,
make the representations contained in the letter of transmittal.
Pursuant to the letter of transmittal, each holder of Old Notes will
represent to ConocoPhillips, Conoco and Phillips that:
- any New Notes received are being acquired in the ordinary course of
business of the person receiving such New Notes;
- such person does not have an arrangement or understanding with any
person to participate in the distribution of the Old Notes or the New
Notes within the meaning of the Securities Act;
- such person is not an "affiliate," as defined in Rule 405 under the
Securities Act, of ConocoPhillips, Conoco or Phillips, or, if it is
such an affiliate, it will comply with the registration and prospectus
delivery requirements of the Securities Act to the extent applicable;
- if such person is not a broker-dealer, it is not engaged in, and does
not intend to engage in, a distribution of New Notes;
- if such person is a broker-dealer, it will receive New Notes for its
own account in exchange for Old Notes that were acquired as a result
of market-making activities or other trading activities, and it will
deliver a prospectus in connection with any resale of such New Notes;
however, by so acknowledging and by delivering a prospectus, it will
not be deemed to admit that it is an "underwriter" within the meaning
of the Securities Act;
- if such person is a broker-dealer, it did not purchase the Old Notes
to be exchanged for the New Notes from ConocoPhillips, Conoco or
Phillips; and
- such person is not acting on behalf of any person who could not
truthfully and completely make the foregoing representations.
Very truly yours,
2
PLEASE RETURN YOUR INSTRUCTIONS TO US IN THE ENCLOSED ENVELOPE WITHIN AMPLE
TIME TO PERMIT US TO SUBMIT A TENDER ON YOUR BEHALF PRIOR TO THE APPLICABLE
EXPIRATION DATE.
INSTRUCTION TO DTC PARTICIPANT
To Participant of the DTC:
The undersigned hereby acknowledges receipt and review of the prospectus
dated , of ConocoPhillips, Conoco Inc. and Phillips Petroleum
Company and the related letter of transmittal. These two documents together
constitute the offer to exchange ConocoPhillips' 3.625% Notes due 2007, 4.75%
Notes due 2012 and 5.90% Notes due 2032 fully and unconditionally guaranteed by
Conoco and Phillips (collectively, the "New Notes"), the issuance of which has
been registered under the Securities Act of 1933, for a like principal amount of
ConocoPhillips' issued and outstanding 3.625% Notes due 2007, 4.75% Notes due
2012 and 5.90% Notes due 2032 fully and unconditionally guaranteed by Conoco and
Phillips (collectively, the "Old Notes"), which offer consists of separate,
independent offers to exchange the New Notes of each series for Old Notes of
that series (each "an Exchange Offer" and sometimes collectively referred to as
"the Exchange Offer").
This will instruct you, the registered holder and DTC participant, as to
the action to be taken by you relating to the Exchange Offer for the Old Notes
held by you for the account of the undersigned.
The aggregate principal amount of the Old Notes of each series held by you
for the account of the undersigned is (fill in amount):
- -----------------------------------------------------------------------------------------------------------
TITLE OF SERIES PRINCIPAL AMOUNT
- -----------------------------------------------------------------------------------------------------------
3.625% Notes due 2007
- -----------------------------------------------------------------------------------------------------------
4.75% Notes due 2012
- -----------------------------------------------------------------------------------------------------------
5.90% Notes due 2032
- -----------------------------------------------------------------------------------------------------------
WITH RESPECT TO THE EXCHANGE OFFER, THE UNDERSIGNED HEREBY INSTRUCTS YOU
(CHECK APPROPRIATE BOX):
[ ] TO TENDER ALL OLD NOTES HELD BY YOU FOR THE ACCOUNT OF THE UNDERSIGNED.
[ ] TO TENDER THE FOLLOWING AMOUNT OF OLD NOTES HELD BY YOU FOR THE ACCOUNT
OF THE UNDERSIGNED:
- -----------------------------------------------------------------------------------------------------------
TITLE OF SERIES PRINCIPAL AMOUNT TENDERED
- -----------------------------------------------------------------------------------------------------------
3.625% Notes due 2007
- -----------------------------------------------------------------------------------------------------------
4.75% Notes due 2012
- -----------------------------------------------------------------------------------------------------------
5.90% Notes due 2032
- -----------------------------------------------------------------------------------------------------------
[ ] NOT TO TENDER ANY OLD NOTES HELD BY YOU FOR THE ACCOUNT OF THE UNDERSIGNED.
IF NO BOX IS CHECKED, A SIGNED AND RETURNED INSTRUCTION TO DTC PARTICIPANT
WILL BE DEEMED TO INSTRUCT YOU TO TENDER ALL OLD NOTES HELD BY YOU FOR THE
ACCOUNT OF THE UNDERSIGNED.
If the undersigned instructs you to tender the Old Notes of a series held
by you for the account of the undersigned, it is understood that you are
authorized to make, on behalf of the undersigned (and the undersigned, by its
signature below, hereby makes to you), the representations contained in the
letter of transmittal that are to be made with respect to the undersigned as a
beneficial owner, including, but not limited to, the representations that:
3
- any New Notes received are being acquired in the ordinary course of
business of the undersigned;
- the undersigned does not have an arrangement or understanding with any
person to participate in the distribution of the Old Notes or the New
Notes within the meaning of the Securities Act;
- the undersigned is not an "affiliate," as defined in Rule 405 under
the Securities Act, of ConocoPhillips, Conoco or Phillips, or, if it
is such an affiliate, it will comply with the registration and
prospectus delivery requirements of the Securities Act to the extent
applicable;
- if the undersigned is not a broker-dealer, it is not engaged in, and
does not intend to engage in, a distribution of New Notes;
- if the undersigned is a broker-dealer, it will receive New Notes for
its own account in exchange for Old Notes that were acquired as a
result of market-making activities or other trading activities, and it
will deliver a prospectus in connection with any resale of such New
Notes; however, by so acknowledging and by delivering a prospectus,
the undersigned will not be deemed to admit that it is an
"underwriter" within the meaning of the Securities Act;
- if the undersigned is a broker-dealer, it did not purchase the Old
Notes to be exchanged for the New Notes from ConocoPhillips, Conoco or
Phillips; and
- the undersigned is not acting on behalf of any person who could not
truthfully and completely make the foregoing representations.
SIGN HERE
Name of beneficial owner(s):
----------------------------------------------------
Signature(s):
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Name(s) (please print):
---------------------------------------------------------
Address:
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Telephone Number:
---------------------------------------------------------------
Taxpayer Identification or Social Security Number:
------------------------------
Date:
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4
