<PAGE> 1
As filed with the Securities and Exchange Commission on February 26, 1996.
Registration No. 33-
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SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
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FORM S-3
REGISTRATION STATEMENT
UNDER THE SECURITIES ACT OF 1933
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<TABLE>
<S> <C> <C>
PHILLIPS PETROLEUM COMPANY DELAWARE 73-0400345
PHILLIPS 66 CAPITAL I DELAWARE TO BE APPLIED FOR
PHILLIPS 66 CAPITAL II DELAWARE TO BE APPLIED FOR
PHILLIPS 66 CAPITAL III DELAWARE TO BE APPLIED FOR
PHILLIPS 66 CAPITAL IV DELAWARE TO BE APPLIED FOR
(Exact name of registrant as (State or other jurisdiction of (I.R.S. Employer
specified in its charter) incorporation or organization) Identification No.)
</TABLE>
PHILLIPS BUILDING
BARTLESVILLE, OKLAHOMA 74004
(918) 661-6600
(Address, including zip code, and telephone number, including area code of each
registrant's principal executive offices)
----------------
JOHN A. CARRIG
TREASURER
3 PHILLIPS BUILDING
BARTLESVILLE, OKLAHOMA 74004
(918) 661-5633
(Name, address, including zip code, and telephone number, area code,
of agent for service for each registrant)
Copies to:
DALE J. BILLAM, ESQ. VINCENT J. PISANO, ESQ.
PHILLIPS PETROLEUM COMPANY SKADDEN, ARPS, SLATE, MEAGHER & FLOM
1234 ADAMS BUILDING 919 THIRD AVENUE
BARTLESVILLE, OKLAHOMA 74004 NEW YORK, NEW YORK 10022
(918) 661-5638 (212) 735-2718
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APPROXIMATE DATE OF COMMENCEMENT OF PROPOSED SALE TO THE PUBLIC: From
time to time after the effective date of this registration statement.
If the only securities being registered on this Form are being offered
pursuant to dividend or interest reinvestment plans, check the following box.
/ /
If any of the securities being registered on this Form are to be offered
on a delayed or continuous basis pursuant to Rule 415 under the Securities Act
of 1933, as amended (the "Securities Act"), other than securities offered only
in connection with dividend or interest reinvestment plans, check the following
box. / x /
If this Form is filed to register additional securities for an offering
pursuant to Rule 462(b) under the Securities Act, please 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(c)
under 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 delivery of the prospectus is expected to be made pursuant to Rule
434, please check the following box: / x /
CALCULATION OF REGISTRATION FEE
<TABLE>
<CAPTION>
=======================================================================================================================
Proposed
Proposed Maximum Maximum Aggregate Amount of
Title of Each Class of Securities Amount to be Offering Price Per Offering Price Registration
to be Registered Registered(1) Unit(1)(2)(3) (1)(2)(3) Fee(2)
- -----------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Preferred Securities of Phillips 66
Capital I
- -----------------------------------------------------------------------------------------------------------------------
Preferred Securities of Phillips 66
Capital II
- -----------------------------------------------------------------------------------------------------------------------
Preferred Securities of Phillips 66
Capital III
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Preferred Securities of Phillips 66
Capital IV
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Subordinated Debt Securities of Phillips
Petroleum Company
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Guarantees of Preferred Securities of
Phillips 66 Capital I, Phillips 66
Capital II, Phillips 66 Capital III
and Phillips 66 Capital IV by Phillips
Petroleum Company(4)
- -----------------------------------------------------------------------------------------------------------------------
Total $750,000,000 100% $750,000,000 $258,620.69
=======================================================================================================================
</TABLE>
(1) Such indeterminate number of Preferred Securities of Phillips 66 Capital I,
Phillips 66 Capital II, Phillips 66 Capital III and Phillips 66 Capital IV
and such indeterminate principal amount of Subordinated Debt Securities of
Phillips Petroleum Company as may from time to time be issued at
indeterminate prices. Subordinated Debt Securities may be issued and sold
to Phillips 66
<PAGE> 2
Capital I, Phillips 66 Capital II, Phillips 66 Capital III and Phillips 66
Capital IV, in which event such Subordinated Debt Securities may later be
distributed to the holders of Preferred Securities upon a dissolution of
Phillips 66 Capital I, Phillips 66 Capital II, Phillips 66 Capital III and
Phillips 66 Capital IV and the distribution of the assets thereof.
(2) Estimated solely for the purpose of calculating the registration fee
pursuant to Rule 457. The aggregate public offering price of the Preferred
Securities of Phillips 66 Capital I, Phillips 66 Capital II, Phillips 66
Capital III and Phillips 66 Capital IV and the Subordinated Debt Securities
of Phillips Petroleum Company registered hereby will not exceed
$750,000,000.
(3) Exclusive of accrued interest and distributions, if any.
(4) No separate consideration will be received for any Guarantees.
__________________
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 THAT SPECIFICALLY STATES THAT THIS REGISTRATION STATEMENT
SHALL THEREAFTER BECOME EFFECTIVE IN ACCORDANCE WITH SECTION 8(a) OF THE
SECURITIES ACT OF 1933, AS AMENDED, 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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<PAGE> 3
INFORMATION CONTAINED HEREIN IS SUBJECT TO COMPLETION OR AMENDMENT. A
REGISTRATION STATEMENT RELATING TO THESE SECURITIES HAS BEEN FILED WITH THE
SECURITIES AND EXCHANGE COMMISSION. THESE SECURITIES MAY NOT BE SOLD NOR MAY
OFFERS TO BUY BE ACCEPTED PRIOR TO THE TIME THE REGISTRATION STATEMENT BECOMES
EFFECTIVE AND ANY FINAL PROSPECTUS SUPPLEMENT IS DELIVERED. THIS PROSPECTUS AND
ANY ACCOMPANYING PROSPECTUS SUPPLEMENT SHALL NOT CONSTITUTE AN OFFER TO SELL OR
THE SOLICITATION OF AN OFFER TO BUY NOR SHALL THERE BE ANY SALE OF THESE
SECURITIES IN ANY STATE IN WHICH SUCH OFFER, SOLICITATION OR SALE WOULD BE
UNLAWFUL PRIOR TO REGISTRATION OR QUALIFICATION UNDER THE SECURITIES LAWS OF
ANY SUCH STATE.
SUBJECT TO COMPLETION, DATED FEBRUARY 26, 1996
PROSPECTUS
$750,000,000
PHILLIPS PETROLEUM COMPANY
SUBORDINATED DEBT SECURITIES
__________________
PHILLIPS 66 CAPITAL I
PHILLIPS 66 CAPITAL II
PHILLIPS 66 CAPITAL III
PHILLIPS 66 CAPITAL IV
PREFERRED SECURITIES
GUARANTEED TO THE EXTENT SET FORTH HEREIN BY
PHILLIPS PETROLEUM COMPANY
__________________
Phillips Petroleum Company ("Phillips" or the "Company"), a Delaware
corporation, may from time to time offer its subordinated debentures, notes or
other evidence of indebtedness (the "Subordinated Debt Securities") in one or
more series and in amounts, at prices and on terms to be determined at the time
of the offering. The Subordinated Debt Securities when issued will be unsecured
obligations of the Company. The Company's obligations under the Subordinated
Debt Securities will be subordinate and junior in right of payment to certain
other indebtedness, as may be described in an accompanying Prospectus Supplement
(the "Prospectus Supplement").
Phillips 66 Capital I, Phillips 66 Capital II, Phillips 66 Capital III and
Phillips 66 Capital IV (each, a "Phillips Capital Trust"), each a statutory
business trust formed under the laws of the State of Delaware, may offer, from
time to time, preferred securities, representing undivided beneficial interests
in the assets of the respective Phillips Capital Trust ("Preferred Securities").
The payment of periodic cash distributions ("distributions") with respect to
Preferred Securities of each of the Phillips Capital Trusts out of moneys held
by each of the Phillips Capital Trusts, and payment on liquidation, redemption
or otherwise with respect to such Preferred Securities, will be guaranteed by
Phillips to the extent described herein (each a "Preferred Securities
Guarantee"). See "Description of the Preferred Securities Guarantees" below.
Phillips' obligations under the Preferred Securities Guarantees are subordinate
and junior in right of payment to all other liabilities of Phillips and rank
pari passu with the most senior preferred stock, if any, issued from time to
time by Phillips. Subordinated Debt Securities may be issued and sold from time
to time in one or more series to a Phillips Capital Trust, or a trustee of such
Phillips Capital Trust, in connection with the investment of the proceeds from
the offering of Preferred Securities and Common Securities (as defined herein,
together the "Trust Securities") of such Phillips Capital Trust. The
Subordinated Debt Securities purchased by a Phillips Capital Trust may be
subsequently distributed pro rata to holders of Preferred Securities and Common
Securities in connection with the dissolution of such Phillips Capital Trust
upon the occurrence of certain events as may be described in an accompanying
Prospectus Supplement. The Subordinated Debt Securities and the Preferred
Securities and the related Preferred Securities Guarantees are sometimes
collectively referred to hereafter as the "Offered Securities."
Specific terms of the Subordinated Debt Securities of any series or the
Preferred Securities of any Phillips Capital Trust in respect of which this
prospectus (the "Prospectus") is being delivered will be set forth in a
Prospectus Supplement with respect to such securities, which will describe,
without limitation and where applicable, the following: (i) in the case of
Subordinated Debt Securities, the specific designation, aggregate principal
amount, denomination, maturity, premium, if any, any exchange, conversion,
redemption or sinking fund provisions, if any, interest rate (which may be fixed
or variable), if any, the time and method of calculating interest payments, if
any, dates on which premium, if any, and interest, if any, will be payable, the
right of Phillips, if any, to defer payment of interest on the Subordinated Debt
Securities and the maximum length of such deferral period, the initial public
offering price, subordination terms, and any listing on a securities exchange
and other specific terms of the offering; and (ii) in the case of Preferred
Securities, the designation, number of securities, liquidation preference per
security, initial public offering price, any listing on a securities exchange,
distribution rate (or method of calculation thereof),
<PAGE> 4
dates on which distributions shall be payable and dates from which distributions
shall accrue, any voting rights, terms for any conversion or exchange into other
securities, any redemption, exchange or sinking fund provisions, any other
rights, preferences, privileges, limitations or restrictions relating to the
Preferred Securities and the terms upon which the proceeds of the sale of the
Preferred Securities shall be used to purchase a specific series of Subordinated
Debt Securities of Phillips.
The Offered Securities may be offered in amounts, at prices and on terms to
be determined at the time of offering; provided, however, that the aggregate
initial public offering price of all Offered Securities shall not exceed
$750,000,000. The Prospectus Supplement relating to any series of Offered
Securities will contain information concerning certain United States federal
income tax considerations, if applicable to the Offered Securities.
Phillips and/or each of the Phillips Capital Trusts may sell the Offered
Securities directly, through agents designated from time to time, or through
underwriters or dealers. See "Plan of Distribution" below. If any agents of
Phillips and/or any Phillips Capital Trust or any underwriters or dealers are
involved in the sale of the Offered Securities, the names of such agents,
underwriters or dealers and any applicable commissions and discounts will be set
forth in any related Prospectus Supplement.
This Prospectus may not be used to consummate sales of securities unless
accompanied by a Prospectus Supplement.
THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY
THE SECURITIES AND EXCHANGE COMMISSION OR ANY STATE
SECURITIES COMMISSION NOR HAS THE SECURITIES AND
EXCHANGE COMMISSION OR ANY STATE SECURITIES
COMMISSION PASSED UPON THE ACCURACY OR
ADEQUACY OF THIS PROSPECTUS. ANY
REPRESENTATION TO THE CONTRARY
IS A CRIMINAL OFFENSE.
The date of this Prospectus is , 1996
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<PAGE> 5
NO PERSON HAS BEEN AUTHORIZED TO GIVE ANY INFORMATION OR TO MAKE ANY
REPRESENTATIONS OTHER THAN THOSE CONTAINED IN THIS PROSPECTUS, ANY ACCOMPANYING
PROSPECTUS SUPPLEMENT OR THE DOCUMENTS INCORPORATED OR DEEMED INCORPORATED BY
REFERENCE HEREIN, AND ANY INFORMATION OR REPRESENTATIONS NOT CONTAINED HEREIN OR
THEREIN MUST NOT BE RELIED UPON AS HAVING BEEN AUTHORIZED BY THE COMPANY OR BY
ANY AGENT, DEALER OR UNDERWRITER. THIS PROSPECTUS AND ANY ACCOMPANYING
PROSPECTUS SUPPLEMENT DO NOT CONSTITUTE AN OFFER TO SELL OR A SOLICITATION OF AN
OFFER TO BUY THE SECURITIES IN ANY CIRCUMSTANCES IN WHICH SUCH OFFER OR
SOLICITATION IS UNLAWFUL. THE DELIVERY OF THIS PROSPECTUS OR ANY PROSPECTUS
SUPPLEMENT AT ANY TIME DOES NOT IMPLY THAT THE INFORMATION HEREIN OR THEREIN IS
CORRECT AS OF ANY TIME SUBSEQUENT TO THE DATE OF SUCH INFORMATION.
AVAILABLE INFORMATION
This Prospectus constitutes a part of a combined Registration Statement on
Form S-3 (together with all amendments and exhibits thereto, the "Registration
Statement") filed by Phillips and the Phillips Capital Trusts with the
Securities and Exchange Commission (the "SEC") under the Securities Act of 1933,
as amended (the "Securities Act"), with respect to the Offered Securities. This
Prospectus does not contain all of the information set forth in such
Registration Statement, certain parts of which are omitted in accordance with
the rules and regulations of the SEC. Reference is made to such Registration
Statement and to the exhibits relating thereto for further information with
respect to the Company, the Phillips Capital Trusts and the Offered Securities.
Any statements contained herein concerning the provisions of any document filed
as an exhibit to the Registration Statement or otherwise filed with the SEC or
incorporated by reference herein are not necessarily complete, and, in each
instance, reference is made to the copy of such document so filed for a more
complete description of the matter involved. Each such statement is qualified
in its entirety by such reference.
Phillips is subject to the informational requirements of the Securities
Exchange Act of 1934, as amended (the "Exchange Act"), and in accordance
therewith files reports, proxy statements and other information with the SEC.
Reports, proxy statements and other information concerning Phillips can be
inspected and copied at prescribed rates at the SEC's Public Reference Room,
Judiciary Plaza, 450 Fifth Street, Northwest, Washington, D.C. 20549, as well as
the following Regional Offices of the SEC: 7 World Trade Center, New York, New
York 10048; and Northwestern Atrium Center, 500 West Madison Street, Chicago,
Illinois 60661. Such reports, proxy statements and other information may also
be inspected at the offices of the following stock exchanges on which certain of
the Company's securities are listed: the New York Stock Exchange, 20 Broad
Street, New York, New York 10005; the Pacific Stock Exchange, 301 Pine Street,
San Francisco, California 94104; and The Toronto Stock Exchange, The Exchange
Tower, 2 First Canadian Place, Toronto, Ontario, Canada M5X 1J2.
No separate financial statements of any of the Phillips Capital Trusts have
been included herein. Phillips does not consider that such financial statements
would be material to holders of the Preferred Securities because (i) all of the
voting securities of each of the Phillips Capital Trusts will be owned, directly
or indirectly, by Phillips, a reporting company under the Exchange Act, (ii)
each of the Phillips Capital Trusts has no independent operations but exists for
the sole purpose of issuing securities representing undivided beneficial
interests in the assets of such Phillips Capital Trust and investing the
proceeds thereof in Subordinated Debt Securities issued by Phillips, and (iii)
Phillips' obligations described herein and in any accompanying Prospectus
Supplement under the Declarations of each Trust, the guarantee issued with
respect to Preferred Securities issued by that Trust, the Subordinated Debt
Securities purchased by that Trust and the related Indenture, taken together,
constitute a full and unconditional guarantee of payments due on the Preferred
Securities. See "Description of the Subordinated Debt Securities" and
"Description of the Preferred Securities Guarantees."
The Phillips Capital Trusts are not currently subject to the information
reporting requirements of the Exchange Act. The Phillips Capital Trusts will
become subject to such requirements upon the effectiveness of the Registration
Statement, although they intend to seek and expect to receive exemptions
therefrom.
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<PAGE> 6
INCORPORATION OF CERTAIN DOCUMENTS BY REFERENCE
Phillips' Annual Report on Form 10-K for the year ended December 31, 1995,
which has previously been filed by the Company with the SEC, is incorporated by
reference in this Prospectus.
All documents filed by Phillips pursuant to Sections 13(a), 13(c), 14 or
15(d) of the Securities Exchange Act of 1934, as amended, subsequent to the date
of this Prospectus and prior to the termination of the offering of the Offered
Securities shall be deemed to be incorporated by reference in this Prospectus
and to be a part hereof from the date of filing of such documents. Any statement
contained in this Prospectus or in a document incorporated or deemed to be
incorporated by reference herein or in any Prospectus Supplement shall be deemed
to be modified or superseded for purposes of this Prospectus or any Prospectus
Supplement to the extent that a statement contained herein or therein (or in any
subsequently filed document that also is or is deemed to be incorporated by
reference herein or therein) modifies or supersedes such statement. Any
statement so modified or superseded shall not be deemed, except as so modified
or superseded, to constitute a part of this Prospectus or any Prospectus
Supplement.
Phillips will provide without charge to each person to whom a copy of this
Prospectus has been delivered, upon the written or oral request of such person,
a copy of any or all of the documents referred to above which have been or may
be incorporated by reference herein (other than exhibits to such documents
unless such exhibits are specifically incorporated by reference in such
documents). Requests for such copies should be directed to Dale J. Billam,
Secretary, Phillips Petroleum Company, 1234 Adams Building, Bartlesville,
Oklahoma 74004 (telephone (918) 661-5638).
PHILLIPS PETROLEUM COMPANY
Phillips Petroleum Company, incorporated in Delaware in 1917, is a fully
integrated oil company engaged in petroleum exploration and production on a
worldwide basis, petroleum refining and marketing, and natural gas gathering and
processing, principally in the United States. Phillips also produces and
distributes chemicals worldwide. Its principal executive offices are located in
the Phillips Building, Bartlesville, Oklahoma 74004 (telephone (918) 661-6600).
THE TRUSTS
Each of Phillips 66 Capital I, Phillips 66 Capital II, Phillips 66 Capital
III and Phillips 66 Capital IV is a statutory business trust formed under
Delaware law pursuant to (i) a separate declaration of trust (each a
"Declaration") executed by the Company, as sponsor for such trust (the
"Sponsor") and the Phillips Capital Trustees (as defined herein) for such trust
and (ii) the filing of a certificate of trust with the Delaware Secretary of
State on February 23, 1996. Each Phillips Capital Trust exists for the
exclusive purposes of (i) issuing the Preferred Securities and common securities
representing undivided beneficial interests in the assets of such Trust (the
"Common Securities" and, together with the Preferred Securities, the "Trust
Securities"), (ii) investing the gross proceeds of the Trust Securities in the
Subordinated Debt Securities and (iii) engaging in only those other activities
necessary or incidental thereto. All of the Common Securities will be directly
or indirectly owned by the Company. The Common Securities will rank pari passu,
and payments will be made thereon pro rata, with the Preferred Securities except
that upon an event of default under the Declaration, the rights of the holders
of the Common Securities to payment in respect of distributions and payments
upon liquidation, redemption and otherwise will be subordinated to the rights of
the holders of the Preferred Securities. The Company will, directly or
indirectly, acquire Common Securities in an aggregate liquidation amount equal
to 3 percent of the total capital of each Phillips Capital Trust. Each Phillips
Capital Trust has a term of approximately 55 years, but may earlier terminate as
provided in the Declaration. Each Phillips Capital Trust's business and affairs
will be conducted by the trustees (the "Phillips Capital Trustees") appointed by
the Company, as the direct or indirect holder of all the Common Securities. The
holder of the Common Securities will be entitled to appoint,
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<PAGE> 7
remove or replace any of, or increase or reduce the number of, the Phillips
Capital Trustees of a Phillips Capital Trust. The duties and obligations of the
Phillips Capital Trustees shall be governed by the Declaration of such Phillips
Capital Trust. A majority of the Phillips Capital Trustees (the "Regular
Trustees") of each Phillips Capital Trust will be persons who are employees or
officers of or affiliated with the Company. One Phillips Capital Trustee of
each Phillips Capital Trust will be a financial institution which will be
unaffiliated with the Company and which shall act as property trustee and as
indenture trustee for purposes of the Trust Indenture Act of 1939, as amended
(the "Trust Indenture Act"), pursuant to the terms set forth in a Prospectus
Supplement (the "Property Trustee"). In addition, unless the Property Trustee
maintains a principal place of business in the State of Delaware, and otherwise
meets the requirements of applicable law, one Phillips Capital Trustee of each
Phillips Capital Trust will have its principal place of business or reside in
the State of Delaware (the "Delaware Trustee"). The Company will pay all fees
and expenses related to the Phillips Capital Trusts and the offering of Trust
Securities, the payment of which will be guaranteed by the Company. The office
of the Delaware Trustee for each Phillips Capital Trust in the State of
Delaware is The Bank of New York (Delaware), White Clay Center, Route 273,
Newark, Delaware 19711. The principal place of business of each Phillips
Capital Trust shall be c/o Phillips Petroleum Company, 3 Phillips Building,
Bartlesville, Oklahoma 74004.
RATIO OF EARNINGS TO FIXED CHARGES
The following table sets forth the ratio of earnings to fixed charges for
the periods indicated:
<TABLE>
<CAPTION>
Year Ended December 31,
---------------------------------
1995 1994 1993 1992 1991
----- ----- ----- ----- -----
<S> <C> <C> <C> <C> <C>
Ratio of earnings to fixed charges. 3.4 3.2 2.3 2.1 2.0
</TABLE>
For the purpose of computing the ratio of earnings to fixed charges,
earnings consist of income before income taxes, extraordinary items and
cumulative effect of changes in accounting principle, plus fixed charges
(excluding capitalized interest and the portion of the preferred dividend
requirements of a subsidiary not previously deducted from pretax income, but
including amortization of amounts previously capitalized), less equity in
undistributed earnings of companies owned less than 50 percent. Fixed charges
consist of interest (including capitalized interest) on all indebtedness,
amortization of debt discount and expense, that portion of rental expense which
the Company believes to be representative of interest and the amounts accrued to
cover the preferred stock dividend requirements of a subsidiary. A statement
setting forth the computation of the unaudited ratios of earnings to fixed
charges is filed as an exhibit to the Registration Statement of which this
Prospectus is a part.
USE OF PROCEEDS
The Trust will use all proceeds received from the sale of the Preferred
Securities to purchase Subordinated Debt Securities from Phillips. Phillips
intends to add the net proceeds from the sale of the Subordinated Debt
Securities to its general funds, to be used for general corporate purposes,
including capital expenditures, repayment or repurchases of outstanding
long-term debt securities, investments in subsidiaries, working capital,
repayment of short-term commercial paper notes and/or other business
opportunities.
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<PAGE> 8
DESCRIPTION OF THE SUBORDINATED DEBT SECURITIES
Subordinated Debt Securities may be issued from time to time in one or more
series under an Indenture (the "Indenture"), between the Company and The Bank of
New York, as Trustee (the "Debt Trustee"). The terms of the Subordinated Debt
Securities will include those stated in the Indenture and those made part of the
Indenture by reference to the Trust Indenture Act. The following summary does
not purport to be complete and is subject in all respects to the provisions of,
and is qualified in its entirety by reference to, the Indenture, which is filed
as an exhibit to the Registration Statement of which this Prospectus forms a
part, and the Trust Indenture Act. Whenever particular provisions or defined
terms in the Indenture are referred to herein, such provisions or defined terms
are incorporated by reference herein. Section and Article references used
herein are references to provisions of the Indenture unless otherwise noted.
GENERAL
The Subordinated Debt Securities will be unsecured, subordinated
obligations of the Company. The Indenture does not limit the aggregate
principal amount of Subordinated Debt Securities which may be issued thereunder
and provides that the Subordinated Debt Securities may be issued from time to
time in one or more series. The Subordinated Debt Securities are issuable in
one or more series pursuant to an indenture supplemental to the Indenture or a
resolution of the Company's Board of Directors or a special committee appointed
thereby (each, a "Supplemental Indenture"). (Section ___)
In the event Subordinated Debt Securities are issued to a Phillips Capital
Trust or a trustee of such trust in connection with the issuance of Trust
Securities by such Phillips Capital Trust, such Subordinated Debt Securities
subsequently may be distributed pro rata to the holders of such Trust Securities
in connection with the dissolution of such Phillips Capital Trust upon the
occurrence of certain events described in the Prospectus Supplement relating to
such Trust Securities. Only one series of Subordinated Debt Securities will be
issued to a Phillips Capital Trust or a trustee of such trust in connection with
the issuance of Trust Securities by such Phillips Capital Trust.
Reference is made to the Prospectus Supplement relating to the particular
Subordinated Debt Securities being offered thereby for the following terms: (1)
the designation of such Subordinated Debt Securities; (2) the aggregate
principal amount of such Subordinated Debt Securities; (3) the percentage of
their principal amount at which such Subordinated Debt Securities will be
issued, (4) the date or dates on which such Subordinated Debt Securities will
mature and the right, if any, to extend such date or dates; (5) the rate or
rates, if any, per annum, at which such Subordinated Debt Securities will bear
interest, or the method of determination of such rate or rates; (6) the date or
dates from which such interest shall accrue, the interest payment dates on which
such interest will be payable or the manner of determination of such interest
payment dates and the record dates for the determination of holders to whom
interest is payable on any such interest payment dates; (7) the right, if any,
to extend the interest payment periods and the duration of such extension; (8)
provisions for a sinking purchase or other analogous fund, if any; (9) the
period or periods, if any, within which, the price or prices of which, and the
terms and conditions upon which such Subordinated Debt Securities may be
redeemed, in whole or in part, at the option of the Company or the holder; (10)
the form of such Subordinated Debt Securities; and (11) any other specific terms
of the Subordinated Debt Securities. Principal, premium, if any, and interest,
if any, will be payable, and the Subordinated Debt Securities offered hereby
will be transferable, at the corporate trust office of the Debt Trustee in New
York, New York, provided that payment of interest, if any, may be made at the
option of the Company by check mailed to the address of the person entitled
thereto as it appears in the Security Register. (Section ___)
If a Prospectus Supplement specifies that a series of Subordinated Debt
Securities is denominated in a currency or currency unit other than United
States dollars, such Prospectus Supplement shall also specify the denomination
in which such Subordinated Debt Securities will be issued and the coin or
currency in which the principal, premium, if any, and interest, if any, on such
Subordinated Debt Securities will be payable, which
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<PAGE> 9
may be United States dollars based upon the exchange rate for such other
currency or currency unit existing on or about the time a payment is due.
The Indenture contains no covenants or other provisions to afford
protection to holders of the Subordinated Debt Securities in the event of a
highly leveraged transaction or a change in control of the Company, except to
the limited extent described under "Limitation on Mergers and Sales of Assets"
below.
FORM, EXCHANGE, REGISTRATION, TRANSFER AND PAYMENT
Unless otherwise specified in the applicable Prospectus Supplement, the
Subordinated Debt Securities will be issued in fully registered form without
coupons and in denominations of $1,000 and multiples of $1,000. No service
charge will be made for any transfer or exchange of the Subordinated Debt
Securities, but the Company or the Debt Trustee may require payment of a sum
sufficient to cover any tax or other government charge payable in connection
therewith. Where Subordinated Debt Securities of any series are issued in
bearer form, the special restrictions and considerations, including special
offering restrictions and special United States federal income tax
considerations, applicable to any such Subordinated Debt Securities and to
payment on and transfer and exchange of such Subordinated Debt Securities will
be described in the applicable Prospectus Supplement. Bearer Subordinated Debt
Securities will be transferrable by delivery.
Unless otherwise provided in the applicable Prospectus Supplement,
principal and premium, if any, or interest, if any, will be payable and the
Subordinated Debt Securities may be surrendered for payment or transferred at
the offices of the Debt Trustee as paying and authenticating agent, provided
that payment of interest on registered securities may be made at the option of
the Company by check mailed to the address of the person entitled thereto as it
appears in the Security Register. Payment of Subordinated Debt Securities in
bearer form will be made at such paying agencies outside of the United States
as the Company may appoint.
BOOK-ENTRY SUBORDINATED DEBT SECURITIES
The Subordinated Debt Securities of a series may be issued in whole or in
part in the form of one or more Global Securities that will be deposited with,
or on behalf of, a depositary (the "Global Depositary"), or its nominee,
identified in the Prospectus Supplement relating to such series. In such a
case, one or more Global Securities will be issued in a denomination or
aggregate denomination equal to the portion of the aggregate principal amount of
Outstanding Subordinated Debt Securities of the series to be represented by such
Global Security or Securities. Unless and until it is exchanged in whole or in
part for Subordinated Debt Securities in definitive registered form, a Global
Security may not be registered for transfer or exchange except as a whole by the
Global Depositary for such Global Security to a nominee for such Global
Depositary and except in the circumstances described in the applicable
Prospectus Supplement.
The specific terms of the depositary arrangement with respect to any
portion of a series of Subordinated Debt Securities to be represented by a
Global Security and a description of the Global Depositary will be provided in
the applicable Prospectus Supplement.
SUBORDINATION
The Subordinated Debt Securities will be subordinated and junior in right
of payment to certain other indebtedness of the Company to the extent set forth
in the applicable Prospectus Supplement.
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<PAGE> 10
CERTAIN COVENANTS OF THE COMPANY
Securities Issued to a Phillips Capital Trust. If Subordinated Debt
Securities are issued to a Phillips Capital Trust or a trustee of such trust in
connection with the issuance of Trust Securities by such Phillips Capital Trust
and (i) there shall have occurred any event that would constitute an Event of
Default (as defined herein) or (ii) the Company shall be in default with respect
to its payment of any obligations under the related Preferred Securities
Guarantee or Common Securities Guarantee, then (a) the Company shall not declare
or pay any dividend on, make any distributions with respect to, or redeem,
purchase or make a liquidation payment with respect to, any of its capital stock
(other than (i) purchases or acquisitions of shares of Phillips Common Stock in
connection with the satisfaction by Phillips of its obligations under any
employee benefit plans or the satisfaction by Phillips of its obligations
pursuant to any contract or security requiring Phillips to purchase shares of
Phillips Common Stock, (ii) as a result of a reclassification of Phillips
capital stock or the exchange or conversion of one class or series of Phillips
capital stock for another class or series of Phillips capital stock or, (iii)
the purchase of fractional interests in shares of Phillips capital stock
pursuant to the conversion or exchange provisions of such Phillips capital stock
or the security being converted or exchanged) or make any guarantee payments
with respect to the foregoing, and (b) the Company shall not make any payment of
interest, principal or premium, if any, on or repay, repurchase or redeem any
debt securities (including guarantees) issued by the Company which rank pari
passu with or junior to such Subordinated Debt Securities.
If Subordinated Debt Securities are issued to a Phillips Capital Trust or a
trustee of such trust in connection with the issuance of Trust Securities by
such Phillips Capital Trust and the Company shall have given notice of its
election to defer payments of interest on such Subordinated Debt Securities by
extending the interest payment period as provided in the Indenture and such
period, or any extension thereof, shall be continuing, then (a) the Company
shall not declare or pay any dividend on, make any distributions with respect
to, or redeem, purchase or make a liquidation payment with respect to, any of
its capital stock, and (b) the Company shall not make any payment of interest,
principal or premium, if any, on or repay, repurchase or redeem any debt
securities (including guarantees) issued by the Company which rank pari passu
with or junior to such Subordinated Debt Securities.
In the event Subordinated Debt Securities are issued to a Phillips Capital
Trust or a trustee of such trust in connection with the issuance of Trust
Securities of such Phillips Capital Trust, for so long as such Trust Securities
remain outstanding, the Company will covenant (i) to directly or indirectly
maintain 100% ownership of the Common Securities of such Phillips Capital
Trust; provided, however, that any permitted successor of the Company under the
Indenture may succeed to the Company's ownership of such Common Securities, (ii)
to use its reasonable efforts to cause such Phillips Capital Trust (a) to remain
a statutory business trust, except in connection with the distribution of
Subordinated Debt Securities to the holders of Trust Securities in liquidation
of such Phillips Capital Trust, the redemption of all of the Trust Securities of
such Phillips Capital Trust, or certain mergers, consolidations or
amalgamations, each as permitted by the Declaration of such Phillips Capital
Trust, and (b) to otherwise continue not to be classified as an association
taxable as a corporation or partnership for United States federal income tax
purposes and (iii) to use its reasonable efforts to cause each holder of Trust
Securities to be treated as owning an undivided beneficial interest in the
Subordinated Debt Securities. (Section ___)
LIMITATION ON MERGERS AND SALES OF ASSETS
The Company shall not consolidate with, or merge into, any corporation or
convey or transfer its properties and assets substantially as an entirety to any
Person unless the successor entity shall be a corporation organized under the
laws of the United States or any State or the District of Columbia and shall
expressly assume the obligations of the Company under the Indenture. (Section
10.01)
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<PAGE> 11
EVENTS OF DEFAULT, WAIVER AND NOTICE
The Indenture provides than any one or more of the following described
events which has occurred and is continuing constitutes an "Event of Default"
with respect to each series of Subordinated Debt Securities:
(a) default for 30 days in payment of any interest on the Subordinated
Debt Securities of that series, including any Additional Interest in
respect thereof, when due; provided, however, that a valid extension of
the interest payment period by the Company shall not constitute a default
in the payment of interest for this purpose; or
(b) default in payment of principal and premium, if any, on the
Subordinated Debt Securities of that series when due either at maturity,
upon redemption, by declaration or otherwise; provided, however, that a
valid extension of the maturity of such Subordinated Debt Securities shall
not constitute a default for this purpose; or
(c) default by the Company in the performance of any other of the
covenants or agreements in the Indenture which shall not have been
remedied for a period of 90 days after notice; or
(d) certain events of bankruptcy, insolvency or reorganization of the
Company; or
(e) in the event Subordinated Debt Securities are issued to a Phillips
Capital Trust or a trustee of such trust in connection with the issuance
of Trust Securities by such Phillips Capital Trust, the voluntary or
involuntary dissolution, winding-up or termination of such Phillips
Capital Trust, except in connection with the distribution of Subordinated
Debt Securities to the holders of Trust Securities in liquidation of such
Phillips Capital Trust, the redemption of all of the Trust Securities of
such Phillips Capital Trust, or certain mergers, consolidations or
amalgamations, each as permitted by the Declaration of such Phillips
Capital Trust.
(Section 5.01) The Indenture provides that the Debt Trustee may withhold notice
to the holders of a series of Subordinated Debt Securities (except in payment of
principal or of interest or premium on the Subordinated Debt Securities) if the
Trustee considers it in the interest of such holders to do so. (Section 5.08).
The Indenture provides that, (a) if an Event of Default due to the default
in the payment of principal, interest or premium, if any, on any series of
Subordinated Debt Securities shall have occurred and be continuing, either the
Debt Trustee or the holders of 25 percent in principal amount of the
Subordinated Debt Securities of all series affected thereby then outstanding may
declare the principal of all such Subordinated Debt Securities to be due and
payable immediately, and (b) if an Event of Default resulting from default in
the performance of any other of the covenants or agreements in the Indenture or
certain events of bankruptcy, insolvency and reorganization of the Company shall
have occurred and be continuing, either the Debt Trustee or the holders of 25
percent in principal amount of all Subordinated Debt Securities then outstanding
(treated as one class) may declare the principal of all Subordinated Debt
Securities to be due and payable immediately, but upon certain conditions such
declarations may be annulled and past defaults may be waived (except defaults in
payment of principal of or interest or premium on the Subordinated Debt
Securities) by the holders of a majority in principal amount of the Subordinated
Debt Securities of such series (or of all series, as the case may be) then
outstanding. (Section 5.01)
The holders of a majority in principal amount of the Subordinated Debt
Securities of any and all series affected and then outstanding shall have the
right to direct the time, method and place of conducting any proceeding for any
remedy available to the Debt Trustee under the Indenture, provided that the
holders of the Subordinated Debt Securities shall have offered to the Debt
Trustee reasonable indemnity against expenses and liabilities. (Sections 5.07
and 5.04) The Indenture requires the annual filing by the Company with the Debt
Trustee of a certificate as to the absence of certain defaults under the
Indenture. (Section 3.07)
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<PAGE> 12
MODIFICATION OF THE INDENTURE
The Indenture contains provisions permitting the Company and the Debt
Trustee, with the consent of the holders of not less than a majority in
principal amount of the Subordinated Debt Securities of all series affected by
such modification at the time outstanding, to modify the Indenture or any
supplemental indenture or the rights of the holders of the Subordinated Debt
Securities; provided that no such modification shall (i) extend the fixed
maturity of any Security, or reduce the principal amount thereof (including in
the case of a discounted Security the amount payable thereon in the event of
acceleration or the amount provable in bankruptcy) or any redemption premium
thereon, or reduce the rate or extend the time of payment of interest thereon,
or make the principal of, or interest or premium on, the Subordinated Debt
Securities payable in any coin or currency other than that provided in the
Subordinated Debt Securities, or impair or affect the right of any holder of
Subordinated Debt Securities to institute suit for the payment thereof or the
right of prepayment, if any, at the option of the holder, without the consent of
the holder of each Security so affected, or (ii) reduce the aforesaid percentage
of Subordinated Debt Securities the consent of the holders of which is required
for any such modification without the consent of the holders of each Security
affected. (Section 9.02)
DEFEASANCE AND DISCHARGE
The Indenture provides that the Company, at the Company's option: (a) will
be Discharged from any and all obligations in respect of the Subordinated Debt
Securities of a series (except for certain obligations to register the transfer
or exchange of Subordinated Debt Securities, replace stolen, lost or mutilated
Subordinated Debt Securities, maintain paying agencies and hold moneys for
payment in trust) or (b) need not comply with certain restrictive covenants of
the Indenture (including those described under "Certain Covenants of the
Company"), in each case if the Company deposits, in trust with the Debt Trustee
or the Defeasance Agent, money or U.S. Government Obligations which through the
payment of interest thereon and principal thereof in accordance with their terms
will provide money, in an amount sufficient to pay all the principal (including
any mandatory sinking fund payments) of, and interest and premium, if any, on,
the Subordinated Debt Securities of such series on the dates such payments are
due in accordance with the terms of such Subordinated Debt Securities. To
exercise any such option, the Company is required to deliver to the Debt Trustee
and the Defeasance Agent, if any, an opinion of counsel to the effect that (i)
the deposit and related defeasance would not cause the holders of the
Subordinated Debt Securities of such series to recognize income, gain or loss
for federal income tax purposes and, in the case of a Discharge pursuant to
clause (a), such opinion shall be accompanied by a private letter ruling to the
effect received from the United States Internal Revenue Service or a revenue
ruling pertaining to a comparable form of transaction to the effect published by
the United States Internal Revenue Service, and (ii) if listed on any national
securities exchange, such Subordinated Debt Securities would not be delisted
from such exchange as a result of the exercise of such option. (Section 11.05)
GOVERNING LAW
The Indenture and the Subordinated Debt Securities will be governed by, and
construed in accordance with, the internal laws of the State of New York.
(Section 13.04).
THE DEBT TRUSTEE
The Company may have normal banking relationships with the Debt Trustee in
the ordinary course of business.
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<PAGE> 13
DESCRIPTION OF THE PREFERRED SECURITIES
Each Phillips Capital Trust may issue, from time to time, only one series
of Preferred Securities having terms described in the Prospectus Supplement
relating thereto. The Declaration of each Phillips Capital Trust authorizes the
Regular Trustees of such Phillips Capital Trust to issue on behalf of such
Phillips Capital Trust one series of Preferred Securities. The Declaration will
be qualified as an indenture under the Trust Indenture Act. The Preferred
Securities will have such terms, including distributions, redemption, voting,
liquidation rights and such other preferred, deferred or other special rights or
such restrictions as shall be set forth in the Declaration or made part of the
Declaration by the Trust Indenture Act. Reference is made to the Prospectus
Supplement relating to the Preferred Securities of the Phillips Capital Trust
for specific terms, including (i) the distinctive designation of such Preferred
Securities; (ii) the number of Preferred Securities issued by such Phillips
Capital Trust; (iii) the annual distribution rate (or method of determining such
rate) for Preferred Securities issued by such Phillips Capital Trust and the
date or dates upon which such distributions shall be payable; provided, however,
that distributions on such Preferred Securities shall be payable on a quarterly
basis to holders of such Preferred Securities as of a record date in each
quarter during which such Preferred Securities are outstanding; (iv) whether
distributions on Preferred Securities issued by such Phillips Capital Trust
shall be cumulative, and, in the case of Preferred Securities having such
cumulative distribution rights, the date or dates or method of determining the
date or dates from which distributions on Preferred Securities issued by such
Phillips Capital Trust shall be cumulative; (v) the amount or amounts which
shall be paid out of the assets of such Phillips Capital Trust to the holders of
Preferred Securities of such Phillips Capital Trust upon voluntary or
involuntary dissolution, winding-up or termination of such Phillips Capital
Trust; (vi) the obligation, if any, of such Phillips Capital Trust to purchase
or redeem Preferred Securities issued by such Phillips Capital Trust and the
price or prices at which, the period or periods within which, and the terms and
conditions upon which, Preferred Securities issued by such Phillips Capital
Trust shall be purchased or redeemed, in whole or in part, pursuant to such
obligation; (vii) the voting rights, if any, of Preferred Securities issued by
such Phillips Capital Trust in addition to those required by law, including the
number of votes per Preferred Security and any requirement for the approval by
the holders of Preferred Securities, or of Preferred Securities issued by one or
more Phillips Capital Trusts, or of both, as a condition to specified action or
amendments to the Declaration of such Phillips Capital Trust; (viii) the terms
and conditions, if any, upon which the Subordinated Debt Securities may be
distributed to holders of Preferred Securities; (ix) if applicable, any
securities exchange upon which the Preferred Securities shall be listed; and (x)
any other relevant rights, preferences, privileges, limitations or restrictions
of Preferred Securities issued by such Phillips Capital Trust not inconsistent
with the Declaration of such Phillips Capital Trust or with applicable law. All
Preferred Securities offered hereby will be guaranteed by the Company to the
extent set forth below under "Description of the Preferred Securities
Guarantees." Any United States federal income tax considerations applicable to
any offering of Preferred Securities will be described in the Prospectus
Supplement relating thereto.
In connection with the issuance of Preferred Securities, each Phillips
Capital Trust will issue one series of Common Securities. The Declaration of
each Phillips Capital Trust authorizes the Regular Trustees of such trust to
issue on behalf of such Phillips Capital Trust one series of Common Securities
having such terms including distributions, redemption, voting, liquidation
rights or such restrictions as shall be set forth therein. The terms of the
Common Securities issued by a Phillips Capital Trust will be substantially
identical to the terms of the Preferred Securities issued by such trust and the
Common Securities will rank pari passu, and payments will be made thereon pro
rata, with the Preferred Securities except that, upon an event of default under
the Declaration, the rights of the holders of the Common Securities to payment
in respect of distributions and payments upon liquidation, redemption and
otherwise will be subordinated to the rights of the holders of the Preferred
Securities. Except in certain limited circumstances, the Common Securities will
also carry the right to vote to appoint, remove or replace any of the Phillips
Capital Trustees of a Phillips Capital Trust. All of the Common Securities of
each Phillips Capital Trust will be directly or indirectly owned by the Company.
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<PAGE> 14
DESCRIPTION OF THE PREFERRED SECURITIES GUARANTEES
Set forth below is a summary of information concerning the Preferred
Securities Guarantees which will be executed and delivered by Phillips for the
benefit of the holders from time to time of Preferred Securities. Each
Preferred Securities Guarantee will be qualified as an indenture under the Trust
Indenture Act. The Bank of New York will act as indenture trustee under each
Preferred Securities Guarantee (the "Preferred Guarantee Trustee"). The terms
of each Preferred Securities Guarantee will be those set forth in such Preferred
Securities Guarantee and those made part of such Preferred Securities Guarantee
by the Trust Indenture Act. The summary does not purport to be complete and is
subject in all respects to the provisions of, and is qualified in its entirety
by reference to, the form of Preferred Securities Guarantee, which is filed as
an exhibit to the Registration Statement of which this Prospectus forms a part,
and the Trust Indenture Act. Each Preferred Securities Guarantee will be held
by the Preferred Guarantee Trustee for the benefit of the holders of the
Preferred Securities of the applicable Phillips Capital Trust.
GENERAL
Pursuant to each Preferred Securities Guarantee, the Company will
irrevocably and unconditionally agree, to the extent set forth therein, to pay
in full, to the holders of the Preferred Securities issued by a Phillips Capital
Trust, the Guarantee Payments (as defined herein) (except to the extent paid by
such Phillips Capital Trust), as and when due, regardless of any defense, right
of set-off or counterclaim which such Phillips Capital Trust may have or assert.
The following payments with respect to Preferred Securities issued by a Phillips
Capital Trust to the extent not paid by such Phillips Capital Trust (the
"Guarantee Payments"), will be subject to the Preferred Securities Guarantee
thereon (without duplication): (i) any accrued and unpaid distributions which
are required to be paid on such Preferred Securities, to the extent such
Phillips Capital Trust shall have funds available therefor; (ii) the redemption
price, including all accrued and unpaid distributions (the "Redemption Price"),
to the extent such Phillips Capital Trust has funds available therefor with
respect to any Preferred Securities called for redemption by such Phillips
Capital Trust and (iii) upon a voluntary or involuntary dissolution, winding-up
or termination of such Phillips Capital Trust (other than in connection with the
distribution of Subordinated Debt Securities to the holders of Preferred
Securities or the redemption of all of the Preferred Securities), the lesser of
(a) the aggregate of the liquidation amount and all accrued and unpaid
distributions on such Preferred Securities to the date of payment, to the extent
such Phillips Capital Trust has funds available therefor and (b) the amount of
assets of such Phillips Capital Trust remaining available for distribution to
holders of such Preferred Securities in liquidation of such Phillips Capital
Trust. The Company's obligation to make a Guarantee Payment may be satisfied by
direct payment of the required amounts by the Company to the holders of
Preferred Securities or by causing the applicable Phillips Capital Trust to pay
such amounts to such holders.
Each Preferred Securities Guarantee will be a full and unconditional
guarantee with respect to the Preferred Securities issued by the applicable
Phillips Capital Trust, but will not apply to any payment of distributions
except to the extent such Phillips Capital Trust shall have funds available
therefor. If the Company does not make interest payments on the Subordinated
Debt Securities purchased by a Phillips Capital Trust, such Phillips Capital
Trust will not pay distributions on the Preferred Securities issued by such
Phillips Capital Trust and will not have funds available therefor. See
"Description of the Subordinated Debt Securities -- Certain Covenants."
The Company has also agreed separately to irrevocably and unconditionally
guarantee the obligations of the Phillips Capital Trusts with respect to the
Common Securities (the "Common Securities Guarantees") to the same extent as the
Preferred Securities Guarantees, except that upon an event of default under the
Indenture, holders of Preferred Securities shall have priority over holders of
Common Securities with respect to distributions and payments on liquidation,
redemption or otherwise.
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<PAGE> 15
CERTAIN COVENANTS OF THE COMPANY
In each Preferred Securities Guarantee, the Company will covenant that, so
long as any Preferred Securities issued by the applicable Phillips Capital Trust
remain outstanding, if there shall have occurred any event that would constitute
an event of default under such Preferred Securities Guarantee or the Declaration
of such Phillips Capital Trust, then (a) the Company shall not declare or pay
any dividend on, make any distributions with respect to, or redeem, purchase or
make liquidation payment with respect to, any of its capital stock (other than
(i) purchases or acquisitions of shares of Phillips Common Stock in connection
with the satisfaction by Phillips of its obligations under any employee benefit
plans or the satisfaction by Phillips of its obligations pursuant to any
contract or security requiring Phillips to purchase shares of Phillips Common
Stock, (ii) as a result of a reclassification of Phillips capital stock or the
exchange or conversion of one class or series of Phillips capital stock for
another class or series of Phillips capital stock or, (iii) the purchase of
fractional interests in shares of Phillips capital stock pursuant to the
conversion or exchange provisions of such Phillips capital stock or the security
being converted or exchanged) or make any guarantee payments with respect to the
foregoing and (b) the Company shall not make any payment of interest, principal
or premium, if any, on or repay, repurchase or redeem any debt securities
(including guarantees) issued by the Company which rank pari passu with or
junior to such Subordinated Debt Securities.
MODIFICATION OF THE PREFERRED SECURITIES GUARANTEES; ASSIGNMENT
Except with respect to any changes which do not adversely affect the rights
of holders of Preferred Securities (in which case no vote will be required),
each Preferred Securities Guarantee may be amended only with the prior approval
of the holders of not less than a majority in liquidation amount of the
outstanding Preferred Securities issued by the applicable Phillips Capital
Trust. The manner of obtaining any such approval of holders of such Preferred
Securities will be as set forth in an accompanying Prospectus Supplement. All
guarantees and agreements contained in a Preferred Securities Guarantee shall
bind the successors, assigns, receivers, trustees and representatives of the
Company and shall inure to the benefit of the holders of the Preferred
Securities of the applicable Phillips Capital Trust then outstanding.
TERMINATION
Each Preferred Securities Guarantee will terminate as to the Preferred
Securities issued by the applicable Phillips Capital Trust (a) upon full payment
of the Redemption Price of all Preferred Securities of such Phillips Capital
Trust, (b) upon distribution of the Subordinated Debt Securities held by such
Phillips Capital Trust to the holders of the Preferred Securities of such
Phillips Capital Trust or (c) upon full payment of the amounts payable in
accordance with the Declaration of such Phillips Capital Trust upon liquidation
of such Phillips Capital Trust. Each Preferred Securities Guarantee will
continue to be effective or will be reinstated, as the case may be, if at any
time any holder of Preferred Securities issued by the applicable Phillips
Capital Trust must restore payment of any sums paid under such Preferred
Securities or such Preferred Securities Guarantee.
EVENTS OF DEFAULT
An event of default under a Preferred Securities Guarantee will occur upon
the failure of the Company to perform any of its payment or other obligations
thereunder.
The holders of a majority in liquidation amount of the Preferred Securities
relating to such Preferred Securities Guarantee have the right to direct the
time, method and place of conducting any proceeding for any remedy available to
the Preferred Guarantee Trustee in respect of the Preferred Securities Guarantee
or to direct the exercise of any trust or power conferred upon the Preferred
Guarantee Trustee under such Preferred Securities. If the Preferred Guarantee
Trustee fails to enforce such Preferred Securities Guarantee, any holder of
Preferred Securities relating to such Preferred Securities Guarantee may
institute a legal proceeding directly against the Company to enforce the
Preferred Guarantee Trustee's rights under such Preferred Securities Guarantee,
without first instituting a legal proceeding against the relevant Phillips
Capital
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<PAGE> 16
Trust, the Preferred Guarantee Trustee or any other person or entity.
Notwithstanding the foregoing, if the Company has failed to make a guarantee
payment, a holder of Preferred Securities may directly institute a proceeding
against the Company for enforcement of the Preferred Securities Guarantee for
such payment. The Company waives any right or remedy to require that any action
be brought first against such Phillips Capital Trust or any other person or
entity before proceeding directly against the Company.
STATUS OF THE PREFERRED SECURITIES GUARANTEES
The Preferred Securities Guarantees will constitute unsecured obligations
of the Company and will rank (i) subordinate and junior in right of payment to
all other liabilities of the Company, (ii) pari passu with the most senior
preferred or preference stock now or hereafter issued by the Company and with
any guarantee now or hereafter entered into by Phillips in respect of any
preferred or preference stock of any affiliate of the Company; and (iii) senior
to the Company's common stock. The terms of the Preferred Securities provide
that each holder of Preferred Securities issued by the applicable Phillips
Capital Trust by acceptance thereof agrees to the subordination provisions and
other terms of the Preferred Securities Guarantee relating thereto.
The Preferred Securities Guarantees will constitute a guarantee of payment
and not of collection (that is, the guaranteed party may institute a legal
proceeding directly against the guarantor to enforce its rights under the
Preferred Securities Guarantee without instituting a legal proceeding against
any other person or entity).
INFORMATION CONCERNING THE PREFERRED GUARANTEE TRUSTEE
The Preferred Guarantee Trustee, prior to the occurrence of a default with
respect to a Preferred Securities Guarantee, undertakes to perform only such
duties as are specifically set forth in such Preferred Securities Guarantee and,
after default, shall exercise the same degree of care as a prudent individual
would exercise in the conduct of his or her own affairs. Subject to such
provisions, the Preferred Guarantee Trustee is under no obligation to exercise
any of the powers vested in it by a Preferred Securities Guarantee at the
request of any holder of Preferred Securities, unless offered reasonable
indemnity against the costs, expenses and liabilities which might be incurred
thereby.
The Company and certain of its affiliates maintain a banking relationship
with the Preferred Guarantee Trustee.
GOVERNING LAW
The Preferred Securities Guarantees will be governed by and construed in
accordance with the internal laws of the State of New York.
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<PAGE> 17
PLAN OF DISTRIBUTION
Phillips may sell the Subordinated Debt Securities and any Phillips Capital
Trust may sell Preferred Securities in any of, or any combination of, the
following ways: (i) directly to purchasers; (ii) through agents, (iii) through
underwriters, and (iv) through dealers.
Offers to purchase Offered Securities may be solicited directly by Phillips
and/or any Phillips Capital Trust, as the case may be, or by agents designated
by Phillips and/or any Phillips Capital Trust, as the case may be, from time to
time. Any such agent, who may be deemed to be an underwriter as that term is
defined in the Securities Act of 1933, involved in the offer or sale of the
Offered Securities in respect of which this Prospectus is delivered will be
named, and any commissions payable by Phillips to such agent will be set
forth,in the Prospectus Supplement. Unless otherwise indicated in the
Prospectus Supplement, any such agency will be acting in a best efforts basis
for the period of its appointment (ordinarily five business days or less).
Agents, dealers and underwriters may be customers of, engage in transactions
with, or perform services for the Company in the ordinary course of business.
If an underwriter or underwriters are utilized in the sale, Phillips will
execute an underwriting agreement with such underwriters at the time of sale to
them and the names of the underwriters and the terms of the transaction will be
set forth in the Prospectus Supplement, which will be used by the underwriters
to make releases of the Offered Securities in respect of which this Prospectus
is delivered to the public.
If a dealer is utilized in the sale of the Offered Securities in respect of
which this Prospectus is delivered, Phillips and/or any Phillips Capital Trust,
as the case may be, will sell such Offered Securities to the dealer, as
principal. The dealer may then resell such Offered Securities to the public at
varying prices to be determined by such dealer at the time of resale. The name
of the dealer and the terms of the transaction will be set forth in the
Prospectus Supplement.
Agents, underwriters, and dealers may be entitled under the relevant
agreements to indemnification by Phillips and/or any Phillips Capital Trust, as
the case may be, against certain liabilities, including liabilities under the
Securities Act of 1933.
The place and time of delivery for the Offered Securities in respect of
which this Prospectus is delivered are set forth in the accompanying Prospectus
Supplement.
LEGAL MATTERS
Certain matters of Delaware law relating to the validity of the Preferred
Securities will be passed upon on behalf of the Phillips Capital Trusts by
Skadden, Arps, Slate, Meagher & Flom, special Delaware counsel to the Phillips
Capital Trusts. The validity of the Subordinated Debt Securities and the
Guarantee and certain matters relating thereto will be passed upon for Phillips
by Dale J. Billam, Senior Counsel of Phillips. Certain United States federal
income taxation matters will be passed upon for Phillips and the Phillips
Capital Trusts by Skadden, Arps, Slate, Meagher & Flom, special tax counsel to
Phillips and the Phillips Capital Trusts.
EXPERTS
The consolidated financial statements and schedule of Phillips Petroleum
Company appearing in its Annual Report on Form 10-K for the year ended December
31, 1995, have been audited by Ernst & Young LLP, independent auditors, as set
forth in their report thereon included therein and incorporated herein by
reference. Such consolidated financial statements and schedule are
incorporated herein by reference in reliance upon such report given upon the
authority of such firm as experts in accounting and auditing.
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<PAGE> 18
PART II
INFORMATION NOT REQUIRED IN PROSPECTUS
ITEM 14. OTHER EXPENSES OF ISSUANCE AND DISTRIBUTION
The estimated expenses payable by the Company in connection with the
offering described in this Registration Statement (other than underwriting
discounts and commissions) are as follows:
<TABLE>
<S> <C>
SEC registration fee $258,620.69
Printing and engraving expenses ...... *
Accounting fees and expenses ......... *
Legal fees and expenses .............. *
Blue Sky fees and expenses ........... *
Trustee's expenses.................... *
Fees of rating agencies .............. *
NYSE listing fee...................... *
Miscellaneous......................... *
-----------
Total $ *
===========
</TABLE>
------------------------
* To be completed by amendment
ITEM 15. INDEMNIFICATION OF DIRECTORS AND OFFICERS
Article III, section 14 of the Bylaws of the Company, as amended, provides
for indemnification of officers, directors and employees of the Company to the
extent authorized by the General Corporation Law of the State of Delaware.
Pursuant to Section 145 of the Delaware General Corporation Law, the Company
generally has the power to indemnify its present and former directors, officers,
employees and agents against expenses incurred by them in connection with any
suit to which they are, or are threatened to be made, a party by reason of their
serving in such positions so long as they acted in good faith and in a manner
they reasonably believed to be in, or not opposed to, the best interests of the
corporation, and with respect to any criminal action, they had no reasonable
cause to believe their conduct was unlawful. With respect to suits by or in the
right of a corporation, however, indemnification is not available if such person
is adjudged to be liable for negligence or misconduct in the performance of his
duty to the corporation unless the court determines that indemnification is
appropriate. In addition, the Company has the power to purchase and maintain
insurance for such persons. The statute also expressly provides that the power
to indemnify authorized thereby is not exclusive of any rights granted under any
bylaw, agreement, vote of stockholders or disinterested directors, or otherwise.
Pursuant to authority conferred by stockholders at the annual meeting of
the Company on April 30, 1987, the Company has entered into Indemnity Agreements
with each of its directors. The Indemnity Agreements establish contract rights
in favor of the Company's directors and thus give them assurances that the
indemnity provided would continue despite possible future changes or amendments
to the Company's Bylaws or the Restated Certificate of Incorporation. The
Indemnity Agreements generally provide that the directors are entitled to
indemnification to the fullest extent permitted by law against liabilities
arising from any claims made against them arising from acts or omissions alleged
to have been committed while acting as directors and solely because of their
being directors.
Also at the annual meeting of the Company on April 30, 1987, stockholders
approved an amendment to the Company's Restated Certificate of Incorporation to
eliminate the personal liability of each director of the Company to the Company
or its shareholders for monetary damages for breach of fiduciary duty
II-1
<PAGE> 19
under certain circumstances. The amendment is consistent with amendments to the
Delaware General Corporation Law effective July 1, 1986.
In addition to the indemnification provision of the Company's Bylaws and
the Indemnity Agreements, the Company's directors and officers are covered by
Directors' and Officers' liability insurance with a limit of $100 million, which
insurance is subject to exclusions, deductibles and conditions.
The above discussion of the Company's Bylaws, Section 145 of the Delaware
General Corporation Law and the Company's Indemnity Agreements with its
directors is not intended to be exhaustive and is respectively qualified in its
entirety by such Bylaws, statute and Agreements.
ITEM 16. EXHIBITS
Exhibits identified in parentheses below are on file with the SEC and are
incorporated herein by reference to such previous filings. All other exhibits
are provided as part of this electronic transmission.
* 1 - Form of Underwriting Agreement for offering of Preferred
Securities.
4-A - Certificate of Trust of Phillips 66 Capital I.
4-B - Certificate of Trust of Phillips 66 Capital II.
4-C - Certificate of Trust of Phillips 66 Capital III.
4-D - Certificate of Trust of Phillips 66 Capital IV.
4-E - Declaration of Trust of Phillips 66 Capital I.
4-F - Declaration of Trust of Phillips 66 Capital II.
4-G - Declaration of Trust of Phillips 66 Capital III.
4-H - Declaration of Trust of Phillips 66 Capital IV.
* 4-I - Form of Amended and Restated Declaration of Trust to be used in
connection with the issuance of Preferred Securities.
* 4-J - Form of Indenture between Phillips Petroleum Company and The
Bank of New York , as Trustee.
* 4-K - Form of Supplemental Indenture to be used in connection with the
issuance of Subordinated Debt Securities and Preferred
Securities.
* 4-L - Form of Preferred Security (included in 4-I above).
* 4-M - Form of Subordinated Debt Security (included in 4-K above).
* 4-N - Form of Guarantee with respect to Preferred Securities.
* 5-A - Opinion of Dale J. Billam, Esq.
* 5-B - Opinion of Skadden, Arps, Slate, Meagher & Flom.
* 8-A - Opinion of Skadden, Arps, Slate, Meagher & Flom.
12 - Computation of Ratio of Earnings to Fixed Charges of Phillips
Petroleum Company
23-A - Consent of Independent Auditors.
* 23-B - Consent of Dale J. Billam, Esq. is contained in the
opinion of counsel filed as Exhibit 5-A.
* 23-C - Consent of Skadden, Arps, Slate, Meagher & Flom is contained in
the opinion of counsel filed as Exhibit 5-B.
24 - Powers of Attorney (the powers of attorney for Phillips are
included under "Power of Attorney" in the Registration
Statement).
* 25-A - Statement of Eligibility under the Trust Indenture Act of 1939,
as amended, of The Bank of New York, as Debt Trustee under the
Indenture.
* 25-B - Statement of Eligibility under the Trust Indenture Act of 1939,
as amended, of The Bank of New York, as Property Trustee under
the Amended and Restated Declaration of Trust of Phillips 66
Capital I.
* 25-C - Statement of Eligibility under the Trust Indenture Act of 1939,
as amended, of The Bank of New York, as Property Trustee under
the Amended and Restated Declaration of Trust of Phillips 66
Capital II.
* 25-D - Statement of Eligibility under the Trust Indenture Act of 1939,
as amended, of The Bank of New York, as Property Trustee under
the Amended and Restated Declaration of Trust of Phillips 66
Capital III.
* 25-E - Statement of Eligibility under the Trust Indenture Act of 1939,
as amended, of The Bank of New York, as Property Trustee under
the Amended and Restated Declaration of Trust of Phillips 66
Capital IV.
* 25-F - Statement of Eligibility under the Trust Indenture Act of 1939,
as amended, of The Bank of New York, as Preferred Guarantee
Trustee under the Preferred Securities Guarantee of Phillips
Petroleum Company for the benefit of the holders of Preferred
Securities of Phillips 66 Capital I.
* 25-G - Statement of Eligibility under the Trust Indenture Act of 1939,
as amended, of The Bank of New York, as Preferred Guarantee
Trustee under the Preferred Securities Guarantee of Phillips
Petroleum Company for the benefit of the holders of Preferred
Securities of Phillips 66 Capital II.
* 25-H - Statement of Eligibility under the Trust Indenture Act of 1939,
as amended, of The Bank of New York, as Preferred Guarantee
Trustee under the Preferred Securities Guarantee of Phillips
Petroleum Company for the benefit of the holders of Preferred
Securities of Phillips 66 Capital III.
* 25-I - Statement of Eligibility under the Trust Indenture Act of 1939,
as amended, of The Bank of New York, as Preferred Guarantee
Trustee under the Preferred Securities Guarantee of Phillips
Petroleum Company for the benefit of the holders of Preferred
Securities of Phillips 66 Capital IV.
- --------------------
* To be filed by amendment
II-2
<PAGE> 20
ITEM 17 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 of 1933, as amended (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; (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) above
do not apply if the information required to be included in a
post-effective amendment by those paragraphs is contained in periodic
reports filed by the Company 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 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 Company'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 this 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 their counsel the matter has been settled by controlling
precedent, submit to a court of appropriate jurisdiction the question whether
such indemnification by them is against public policy as expressed in the
Securities Act and will be governed by the final adjudication of such issue.
II-3
<PAGE> 21
(d) The undersigned Registrants hereby undertake that:
(1) For purposes of determining any liability under the
Securities act of 1933, the information omitted from the form of
prospectus filed as part of this Registration Statement in reliance upon
Rule 430A and contained in a form of prospectus filed by the Registrants
pursuant to Rule 424(b)(1) or (4) or 497(h) under the Securities Act shall
be deemed to be part of this Registration Statement as of the time it was
declared effective.
(2) For the purpose of determining any liability under the
Securities Act of 1933, each post-effective amendment that contains a form
of prospectus 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.
II-4
<PAGE> 22
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, Phillips
Petroleum Company certifies that it has reasonable grounds to believe that it
meets all of the requirements for filing on Form S-3 and has duly caused this
Registration Statement or amendment thereto to be signed on its behalf by the
undersigned, thereunto duly authorized, in the City of Bartlesville and State of
Oklahoma on February 22, 1996.
PHILLIPS PETROLEUM COMPANY
By /s/ W.W. Allen
----------------------------------
W.W. Allen
Chairman of the Board of Directors
and Chief Executive Officer
II-5
<PAGE> 23
POWER OF ATTORNEY
Each person whose signature appears below constitutes and appoints and
hereby authorizes T. C. Morris, L.F. Francis and John A. Carrig, jointly and
severally, such persons' true and lawful attorneys-in-fact, with full power
of substitution or resubstitution, for such person and in his name, place and
stead, in any and all capacities, to sign on such person's behalf, individually
and in each capacity stated below, any and all amendments, including
post-effective amendments to this Registration Statement and to sign any and all
additional registration statements relating to the same offering of securities
as this Registration Statement that are filed pursuant to the Rule 462(b) of the
Securities Act of 1933, and to file the same, with all exhibits thereto, and
other documents in connection therewith, with the Securities and Exchange
Commission, granting unto said attorneys-in-fact, full power and authority to do
and perform each and every act and thing requisite or necessary to be done in
and about the premises, as fully to all intents and purposes as such person
might or could do in person, hereby ratifying and confirming all that said
attorneys-in-fact, or their substitute or 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 or amendment thereto has been signed below by the
following persons in the capacities indicated on February 22, 1996.
<TABLE>
<CAPTION>
Signatures Title Date
---------- ----- ----
<S> <C> <C>
Chairman of the Board of Directors February 22, 1996
/s/ W.W. Allen and Chief Executive Officer
- ---------------------- (Principal Executive Officer)
(W.W. Allen)
Senior Vice President February 22, 1996
/s/ T.C. Morris and Chief Financial Officer
- ---------------------- (Principal Financial Officer)
(T.C. Morris)
/s/ L.F. Francis Controller February 22, 1996
- ---------------------- (Principal Accounting Officer)
(L.F. Francis)
/s/ J.J. Mulva* President and Chief Operating February 22, 1996
- ---------------------- Officer and Director
(J.J. Mulva)
/s/ C.L. Bowerman* Executive Vice President and February 22, 1996
- ---------------------- Director
(C.L. Bowerman)
/s/ George B. Beitzel* Director February 22, 1996
- ----------------------
(George B. Beitzel)
/s/ David L. Boren* Director February 22, 1996
- ----------------------
(David L. Boren)
</TABLE>
II-6
<PAGE> 24
<TABLE>
<CAPTION>
Signatures Title Date
---------- ----- ----
<S> <C> <C>
/s/ Robert E. Chappell, Jr.* Director February 22, 1996
- ----------------------------
(Robert E. Chappell, Jr.)
/s/ Lawrence S. Eagleburger* Director February 22, 1996
- ----------------------------
(Lawrence S. Eagleburger)
/s/ James B. Edwards* Director February 22, 1996
- ----------------------------
(James B. Edwards)
/s/ Larry D. Horner* Director February 22, 1996
- ----------------------------
(Larry D. Horner)
/s/ Randall L. Tobias* Director February 22, 1996
- ----------------------------
(Randall L. Tobias)
/s/ Victoria J. Tschinkel* Director February 22, 1996
- ----------------------------
(Victoria J. Tschinkel)
/s/ Kathryn C. Turner* Director February 22, 1996
- ----------------------------
(Kathryn C. Turner)
*By /s/ T.C. Morris
------------------------
(T.C. Morris)
</TABLE>
II-7
<PAGE> 25
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, Phillips 66
Capital I, Phillips 66 Capital II, Phillips 66 Capital III and Phillips 66
Capital IV certify that they have reasonable grounds to believe that they meet
all of the requirements for filing on Form S-3 and that they have duly caused
this Registration Statement or amendment thereto to be signed on their behalf by
the undersigned, thereunto duly authorized, in the City of Bartlesville and
State of Oklahoma on February 23, 1996.
PHILLIPS 66 CAPITAL I
By /s/ T.C. Morris
-----------------------------------
T.C. Morris, Trustee
By /s/ John A. Carrig
-----------------------------------
John A. Carrig, Trustee
By /s/ L.L. McCall
-----------------------------------
L.L. McCall, Trustee
PHILLIPS 66 CAPITAL II
By /s/ T.C. Morris
-----------------------------------
T.C. Morris, Trustee
By /s/ John A. Carrig
-----------------------------------
John A. Carrig, Trustee
By /s/ L.L. McCall
-----------------------------------
L.L. McCall, Trustee
PHILLIPS 66 CAPITAL III
By /s/ T.C. Morris
-----------------------------------
T.C. Morris, Trustee
By /s/ John A. Carrig
-----------------------------------
John A. Carrig, Trustee
By /s/ L.L. McCall
-----------------------------------
L.L. McCall, Trustee
II-8
<PAGE> 26
PHILLIPS 66 CAPITAL IV
By /s/ T.C. Morris
-----------------------------------
T.C. Morris, Trustee
By /s/ John A. Carrig
-----------------------------------
John A. Carrig, Trustee
By /s/ L.L. McCall
-----------------------------------
L.L. McCall, Trustee
II-9
<PAGE> 27
EXHIBIT INDEX
-------------
Exhibit
No. Description
------- -----------
* 1 - Form of Underwriting Agreement for offering of Preferred
Securities.
4-A - Certificate of Trust of Phillips 66 Capital I.
4-B - Certificate of Trust of Phillips 66 Capital II.
4-C - Certificate of Trust of Phillips 66 Capital III.
4-D - Certificate of Trust of Phillips 66 Capital IV.
4-E - Declaration of Trust of Phillips 66 Capital I.
4-F - Declaration of Trust of Phillips 66 Capital II.
4-G - Declaration of Trust of Phillips 66 Capital III.
4-H - Declaration of Trust of Phillips 66 Capital IV.
* 4-I - Form of Amended and Restated Declaration of Trust to be used in
connection with the issuance of Preferred Securities.
* 4-J - Form of Indenture between Phillips Petroleum Company and The
Bank of New York , as Trustee.
* 4-K - Form of Supplemental Indenture to be used in connection with the
issuance of Subordinated Debt Securities and Preferred
Securities.
* 4-L - Form of Preferred Security (included in 4-I above).
* 4-M - Form of Subordinated Debt Security (included in 4-K above).
* 4-N - Form of Guarantee with respect to Preferred Securities.
* 5-A - Opinion of Dale J. Billam, Esq.
* 5-B - Opinion of Skadden, Arps, Slate, Meagher & Flom.
* 8-A - Opinion of Skadden, Arps, Slate, Meagher & Flom.
12 - Computation of Ratio of Earnings to Fixed Charges of Phillips
Petroleum Company
23-A - Consent of Independent Auditors.
* 23-B - Consent of Dale J. Billam, Esq. is contained in the
opinion of counsel filed as Exhibit 5-A.
* 23-C - Consent of Skadden, Arps, Slate, Meagher & Flom is contained in
the opinion of counsel filed as Exhibit 5-B.
24 - Powers of Attorney (the powers of attorney for Phillips are
included under "Power of Attorney" in the Registration
Statement).
* 25-A - Statement of Eligibility under the Trust Indenture Act of 1939,
as amended, of The Bank of New York, as Debt Trustee under the
Indenture.
* 25-B - Statement of Eligibility under the Trust Indenture Act of 1939,
as amended, of The Bank of New York, as Property Trustee under
the Amended and Restated Declaration of Trust of Phillips 66
Capital I.
* 25-C - Statement of Eligibility under the Trust Indenture Act of 1939,
as amended, of The Bank of New York, as Property Trustee under
the Amended and Restated Declaration of Trust of Phillips 66
Capital II.
* 25-D - Statement of Eligibility under the Trust Indenture Act of 1939,
as amended, of The Bank of New York, as Property Trustee under
the Amended and Restated Declaration of Trust of Phillips 66
Capital III.
* 25-E - Statement of Eligibility under the Trust Indenture Act of 1939,
as amended, of The Bank of New York, as Property Trustee under
the Amended and Restated Declaration of Trust of Phillips 66
Capital IV.
* 25-F - Statement of Eligibility under the Trust Indenture Act of 1939,
as amended, of The Bank of New York, as Preferred Guarantee
Trustee under the Preferred Securities Guarantee of Phillips
Petroleum Company for the benefit of the holders of Preferred
Securities of Phillips 66 Capital I.
* 25-G - Statement of Eligibility under the Trust Indenture Act of 1939,
as amended, of The Bank of New York, as Preferred Guarantee
Trustee under the Preferred Securities Guarantee of Phillips
Petroleum Company for the benefit of the holders of Preferred
Securities of Phillips 66 Capital II.
* 25-H - Statement of Eligibility under the Trust Indenture Act of 1939,
as amended, of The Bank of New York, as Preferred Guarantee
Trustee under the Preferred Securities Guarantee of Phillips
Petroleum Company for the benefit of the holders of Preferred
Securities of Phillips 66 Capital III.
* 25-I - Statement of Eligibility under the Trust Indenture Act of 1939,
as amended, of The Bank of New York, as Preferred Guarantee
Trustee under the Preferred Securities Guarantee of Phillips
Petroleum Company for the benefit of the holders of Preferred
Securities of Phillips 66 Capital IV.
- -------------------
* To be filed by amendment
<PAGE> 1
Exhibit 4-A
CERTIFICATE OF TRUST
The undersigned, the trustees of Phillips 66 Capital I,
desiring to form a business trust pursuant to Delaware Business Trust Act, 12
Del. C. Section 3810, hereby certify as follows:
1. The name of the business trust being formed hereby
(the "Trust") is "Phillips 66 Capital I."
2. The name and business address of the trustee of the
Trust which has its principal place of business in
the State of Delaware is as follows:
The Bank of New York (Delaware)
White Clay Center, Route 273
Newark, Delaware 19711
3. This Certificate of Trust shall be effective as of
the date of filing.
Dated: February 23, 1996
/s/ T. C. Morris
-----------------------------------
Name: T.C. Morris
Title: Trustee
/s/ John A. Carrig
-----------------------------------
Name: John A. Carrig
Title: Trustee
/s/ L.L. McCall
-----------------------------------
Name: L.L. McCall
Title: Trustee
THE BANK OF NEW YORK (DELAWARE), as
Trustee
By: /s/ Walter Douglas
-------------------------------
Name: Walter Douglas
Title: Vice President
<PAGE> 1
Exhibit 4-B
CERTIFICATE OF TRUST
The undersigned, the trustees of Phillips 66 Capital II,
desiring to form a business trust pursuant to Delaware Business Trust Act, 12
Del. C. Section 3810, hereby certify as follows:
4. The name of the business trust being formed hereby
(the "Trust") is "Phillips 66 Capital II."
5. The name and business address of the trustee of the
Trust which has its principal place of business in
the State of Delaware is as follows:
The Bank of New York (Delaware)
White Clay Center, Route 273
Newark, Delaware 19711
6. This Certificate of Trust shall be effective as of
the date of filing.
Dated: February 23, 1996
/s/ T.C. Morris
-----------------------------------
Name: T.C. Morris
Title: Trustee
/s/ John A. Carrig
-----------------------------------
Name: John A. Carrig
Title: Trustee
/s/ L.L. McCall
-----------------------------------
Name: L.L. McCall
Title: Trustee
THE BANK OF NEW YORK (DELAWARE), as
Trustee
By: /s/ Walter Douglas
--------------------------------
Name: Walter Douglas
Title: Vice President
<PAGE> 1
Exhibit 4-C
CERTIFICATE OF TRUST
The undersigned, the trustees of Phillips 66 Capital III,
desiring to form a business trust pursuant to Delaware Business Trust Act, 12
Del. C. Section 3810, hereby certify as follows:
7. The name of the business trust being formed hereby
(the "Trust") is "Phillips 66 Capital III."
8. The name and business address of the trustee of the
Trust which has its principal place of business in
the State of Delaware is as follows:
The Bank of New York (Delaware)
White Clay Center, Route 273
Newark, Delaware 19711
9. This Certificate of Trust shall be effective as of
the date of filing.
Dated: February 23, 1996
/s/ T.C. Morris
-----------------------------------
Name: T.C. Morris
Title: Trustee
/s/ John A. Carrig
-----------------------------------
Name: John A. Carrig
Title: Trustee
/s/ L.L. McCall
-----------------------------------
Name: L.L. McCall
Title: Trustee
THE BANK OF NEW YORK (DELAWARE), as
Trustee
By: /s/ Walter Douglas
-------------------------------
Name: Walter Douglas
Title: Vice President
<PAGE> 1
Exhibit 4-D
CERTIFICATE OF TRUST
The undersigned, the trustees of Phillips 66 Capital IV,
desiring to form a business trust pursuant to Delaware Business Trust Act, 12
Del. C. Section 3810, hereby certify as follows:
10. The name of the business trust being formed hereby
(the "Trust") is "Phillips 66 Capital IV."
11. The name and business address of the trustee of the
Trust which has its principal place of business in
the State of Delaware is as follows:
The Bank of New York (Delaware)
White Clay Center, Route 273
Newark, Delaware 19711
12. This Certificate of Trust shall be effective as of
the date of filing.
Dated: February 23, 1996
/s/ T.C. Morris
-----------------------------------
Name: T.C. Morris
Title: Trustee
/s/ John A. Carrig
-----------------------------------
Name: John A. Carrig
Title: Trustee
/s/ L.L. McCall
-----------------------------------
Name: L.L. McCall
Title: Trustee
THE BANK OF NEW YORK (DELAWARE), as
Trustee
By: /s/ Walter Douglas
--------------------------------
Name: Walter Douglas
Title: Vice President
<PAGE> 1
EXHIBIT 4-E
================================
DECLARATION OF TRUST
Phillips 66 Capital I
Dated as of February 23, 1996
================================
<PAGE> 2
TABLE OF CONTENTS
<TABLE>
<CAPTION>
ARTICLE I
DEFINITIONS Page
<S> <C> <C>
SECTION 1.1 Definitions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1
ARTICLE II
ORGANIZATION
SECTION 2.1 Name . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4
SECTION 2.2 Office . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4
SECTION 2.3 Purpose . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4
SECTION 2.4 Authority . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4
SECTION 2.5 Title to Property of the Trust . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4
SECTION 2.6 Powers of the Trustees . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5
SECTION 2.7 Filing of Certificate of Trust . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6
SECTION 2.8 Duration of Trust. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6
SECTION 2.9 Responsibilities of the Sponsor . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6
Section 2.10 Declaration Binding on Securities Holders . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7
ARTICLE III
TRUSTEES
SECTION 3.1 Trustees . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7
SECTION 3.2 Regular Trustees . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7
SECTION 3.3 Delaware Trustee . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8
SECTION 3.4 Property Trustee. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8
SECTION 3.5 Not Responsible for Recitals or Sufficiency of Declaration. . . . . . . . . . . . . . . . . . . . . 8
ARTICLE IV
LIMITATION OF LIABILITY OF
HOLDERS OF SECURITIES, TRUSTEES OR OTHERS
SECTION 4.1 Exculpation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9
SECTION 4.2 Fiduciary Duty . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9
SECTION 4.3 Indemnification . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10
SECTION 4.4 Outside Businesses . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 14
ARTICLE V
AMENDMENTS, TERMINATION, MISCELLANEOUS
SECTION 5.1 Amendments . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 14
SECTION 5.2 Termination of Trust . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 14
SECTION 5.3 Governing Law . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 15
SECTION 5.4 Headings . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 15
SECTION 5.5 Successors and Assigns . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 15
SECTION 5.6 Partial Enforceability . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 15
SECTION 5.7 Counterparts . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 15
</TABLE>
i
<PAGE> 3
DECLARATION OF TRUST
OF
Phillips 66 Capital I
February 23, 1996
DECLARATION OF TRUST ("Declaration") dated and effective as of
February 23, 1996 by the Trustees (as defined herein), the Sponsor (as defined
herein), and by the holders, from time to time, of undivided beneficial
interests in the Trust to be issued pursuant to this Declaration;
WHEREAS, the Trustees and the Sponsor desire to establish a
trust (the "Trust") pursuant to the Delaware Business Trust Act for the sole
purpose of issuing and selling certain securities representing undivided
beneficial interests in the assets of the Trust and investing the proceeds
thereof in certain Debentures of the Debenture Issuer; and
NOW, THEREFORE, it being the intention of the parties hereto
that the Trust constitute a business trust under the Business Trust Act and
that this Declaration constitute the governing instrument of such business
trust, the Trustees declare that all assets contributed to the Trust will be
held in trust for the exclusive benefit of the holders, from time to time, of
the securities representing undivided beneficial interests in the assets of the
Trust issued hereunder, subject to the provisions of this Declaration.
ARTICLE I
DEFINITIONS
SECTION 1.1 Definitions.
Unless the context otherwise requires:
(a) Capitalized terms used in this Declaration but not defined in
the preamble above have the respective meanings assigned to
them in this Section 1.1;
(b) a term defined anywhere in this Declaration has the same
meaning throughout;
(c) all references to "the Declaration" or "this Declaration" are
to this Declaration of Trust as modified, supplemented or
amended from time to time;
(d) all references in this Declaration to Articles and Sections
are to Articles and Sections of this Declaration unless
otherwise specified; and
<PAGE> 4
(e) a reference to the singular includes the plural and vice
versa.
"Affiliate" has the same meaning as given to that term in Rule
405 of the Securities Act or any successor rule thereunder.
"Business Day" means any day other than a day on which banking
institutions in New York, New York are authorized or required by law to close.
"Business Trust Act" means Chapter 38 of Title 12 of the
Delaware Code, 12 Del. Code Section 3801 et seq., as it may be amended from
time to time, or any successor legislation.
"Commission" means the Securities and Exchange Commission.
"Common Security" means a security representing an undivided
beneficial interest in the assets of the Trust with such terms as may be set
out in any amendment to this Declaration.
"Company Indemnified Person" means (a) any Regular Trustee;
(b) any Affiliate of any Regular Trustee; (c) any officers, directors,
shareholders, members, partners, employees, representatives or agents of any
Regular Trustee; or (d) any employee or agent of the Trust or its Affiliates.
"Covered Person" means (a) any officer, director, shareholder,
partner, member, representative, employee or agent of (i) the Trust or (ii) the
Trust's Affiliates and (b) any holder of Securities.
"Debenture Issuer" means the Parent in its capacity as the
issuer of the Debentures under the Indenture.
"Debentures" means the series of Debentures to be issued by
the Debenture Issuer and acquired by the Trust.
"Debenture Trustee" means [The Bank of New York, a New York
banking corporation], as trustee under the Indenture until a successor is
appointed thereunder, and thereafter means such successor trustee.
"Delaware Trustee" has the meaning set forth in Section 3.1.
"Exchange Act" means the Securities Exchange Act of 1934, as
amended from time to time or any successor legislation.
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<PAGE> 5
"Fiduciary Indemnified Person" has the meaning set forth in
Section 4.3(b).
"Indemnified Person" means a Company Indemnified Person or a
Fiduciary Indemnified Person.
"Indenture" means the indenture to be entered into between the
Parent and the Debenture Trustee and any indenture supplemental thereto
pursuant to which the Debentures are to be issued.
"Parent" means Phillips Petroleum Company, a Delaware
corporation or any successor entity in a merger.
"Person" means a legal person, including any individual,
corporation, estate, partnership, joint venture, association, joint stock
company, limited liability company, trust, unincorporated association, or
government or any agency or political subdivision thereof, or any other entity
of whatever nature.
"Preferred Security" means a security representing an
undivided beneficial interest in the assets of the Trust with such terms as may
be set out in any amendment to this Declaration.
"Regular Trustee" means any Trustee other than the Delaware
Trustee and the Institutional Trustee (as hereinafter defined).
"Securities" means the Common Securities and the Preferred
Securities.
"Securities Act" means the Securities Act of 1933, as amended
from time to time, or any successor legislation.
"Sponsor" means the Parent in its capacity as sponsor of the
Trust.
"Trustee" or "Trustees" means each Person who has signed this
Declaration as a trustee, so long as such Person shall continue in office in
accordance with the terms hereof, and all other Persons who may from time to
time be duly appointed, qualified and serving as Trustees in accordance with
the provisions hereof, and references herein to a Trustee or the Trustees shall
refer to such Person or Persons solely in their capacity as trustees hereunder.
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<PAGE> 6
ARTICLE II
ORGANIZATION
SECTION 2.1 Name.
The Trust created by this Declaration is named "Phillips 66
Capital I." The Trust's activities may be conducted under the name of the
Trust or any other name deemed advisable by the Regular Trustees.
SECTION 2.2 Office.
The address of the principal office of the Trust is c/o
Phillips Petroleum Company, Phillips Building, Bartlesville, Oklahoma 74004.
At any time, the Regular Trustees may designate another principal office.
SECTION 2.3 Purpose.
The exclusive purposes and functions of the Trust are (a) to
issue and sell Securities and use the proceeds from such sale to acquire the
Debentures, and (b) except as otherwise limited herein, to engage in only those
other activities necessary, or incidental thereto. The Trust shall not borrow
money, issue debt or reinvest proceeds derived from investments, pledge any of
its assets, or otherwise undertake (or permit to be undertaken) any activity
that would cause the Trust not to be classified for United States federal
income tax purposes as a grantor trust.
SECTION 2.4 Authority.
Subject to the limitations provided in this Declaration, the
Regular Trustees shall have exclusive and complete authority to carry out the
purposes of the Trust. An action taken by the Regular Trustees in accordance
with their powers shall constitute the act of and serve to bind the Trust. In
dealing with the Regular Trustees acting on behalf of the Trust, no person
shall be required to inquire into the authority of the Regular Trustees to bind
the Trust. Persons dealing with the Trust are entitled to rely conclusively on
the power and authority of the Regular Trustees as set forth in this
Declaration.
SECTION 2.5 Title to Property of the Trust.
Legal title to all assets of the Trust shall be vested in the
Trust.
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<PAGE> 7
SECTION 2.6 Powers of the Trustees.
The Regular Trustees shall have the exclusive power and
authority to cause the Trust to engage in the following activities:
(a) to issue and sell the Preferred Securities and the
Common Securities in accordance with this Declaration; provided,
however, that the Trust may issue no more than one series of Preferred
Securities and no more than one series of Common Securities, and,
provided further, that there shall be no interests in the Trust other
than the Securities and the issuance of the Securities shall be
limited to a one-time, simultaneous issuance of both Preferred
Securities and Common Securities;
(b) in connection with the issue and sale of the
Preferred Securities, at the direction of the Sponsor, to:
(i) execute and file with the Commission a
registration statement on Form S-3 prepared by the Sponsor,
including any amendments thereto in relation to the Preferred
Securities;
(ii) execute and file any documents prepared by
the Sponsor, or take any acts as determined by the Sponsor to
be necessary in order to qualify or register all or part of
the Preferred Securities in any State in which the Sponsor has
determined to qualify or register such Preferred Securities
for sale;
(iii) execute and file an application, prepared
by the Sponsor, to the New York Stock Exchange or any other
national stock exchange or the Nasdaq Stock Market's National
Market for listing upon notice of issuance of any Preferred
Securities;
(iv) execute and file with the Commission a
registration statement on Form 8-A, including any amendments
thereto, prepared by the Sponsor relating to the registration
of the Preferred Securities under Section 12(b) of the
Exchange Act; and
(v) execute and enter into an underwriting
agreement and pricing agreement providing for the sale of the
Preferred Securities;
(c) to employ or otherwise engage employees and agents
(who may be designated as officers with titles) and managers,
contractors, advisors, and consultants and provide for reasonable
compensation for such services;
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<PAGE> 8
(d) to incur expenses which are necessary or incidental
to carry out any of the purposes of this Declaration; and
(e) to execute all documents or instruments, perform all
duties and powers, and do all things for and on behalf of the Trust in
all matters necessary or incidental to the foregoing.
SECTION 2.7 Filing of Certificate of Trust.
On or after the date of execution of this Declaration, the
Trustees shall cause the filing of the Certificate of Trust for the Trust in
the form attached hereto as Exhibit A with the Secretary of State of the State
of Delaware.
SECTION 2.8 Duration of Trust.
The Trust, absent termination pursuant to the provisions of
Section 5.2, shall have existence for fifty-five (55) years from the date
hereof.
SECTION 2.9 Responsibilities of the Sponsor.
In connection with the issue and sale of the Preferred
Securities, the Sponsor shall have the exclusive right and responsibility to
engage in the following activities:
(a) to prepare for filing by the Trust with the
Commission a registration statement on Form S-3 in relation to the
Preferred Securities, including any amendments thereto;
(b) to determine the States in which to take appropriate
action to qualify or register for sale all or part of the Preferred
Securities and to do any and all such acts, other than actions which
must be taken by the Trust, and advise the Trust of actions it must
take, and prepare for execution and filing any documents to be
executed and filed by the Trust, as the Sponsor deems necessary or
advisable in order to comply with the applicable laws of any such
States;
(c) to prepare for filing by the Trust an application to
the New York Stock Exchange or any other national stock exchange or
the Nasdaq National Market for listing upon notice of issuance of any
Preferred Securities;
(d) to prepare for filing by the Trust with the
Commission a registration statement on Form 8-A relating to the
registration of the class of Preferred Securities under Section 12(b)
of the Exchange Act, including any amendments thereto; and
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<PAGE> 9
(e) to negotiate the terms of an underwriting agreement
and pricing agreement providing for the sale of the Preferred
Securities.
Section 2.10 Declaration Binding on Securities Holders.
Every Person by virtue of having become a holder of a Security
or any interest therein in accordance with the terms of this Declaration, shall
be deemed to have expressly assented and agreed to the terms of, and shall be
bound by, this Declaration.
ARTICLE III
TRUSTEES
SECTION 3.1 Trustees.
The number of Trustees initially shall be four (4), and
thereafter the number of Trustees shall be such number as shall be fixed from
time to time by a written instrument signed by the Sponsor. The Sponsor is
entitled to appoint or remove without cause any Trustee at any time; provided,
however, that the number of Trustees shall in no event be less than two (2);
provided further that one Trustee, in the case of a natural person, shall be a
person who is a resident of the State of Delaware or that, if not a natural
person, is an entity which has its principal place of business in the State of
Delaware (the "Delaware Trustee"); provided further that there shall be at
least one trustee who is an employee or officer of, or is affiliated with the
Parent (a "Regular Trustee").
SECTION 3.2 Regular Trustees.
The initial Regular Trustees shall be:
T.C. Morris
John A. Carrig
L.L. McCall
(a) Except as expressly set forth in this Declaration, any
power of the Regular Trustees may be exercised by, or with the consent of, any
one such Regular Trustee.
(b) Unless otherwise determined by the Regular Trustees,
and except as otherwise required by the Business Trust Act, any Regular Trustee
is authorized to execute on behalf of the Trust any documents which the Regular
Trustees have the power and authority to cause the Trust to execute pursuant to
Section 2.6 provided, that, the registration statement referred to in Section
2.6(b)(i), including any amendments thereto, shall be signed by a majority of
the Regular Trustees; and
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<PAGE> 10
(c) a Regular Trustee may, by power of attorney
consistent with applicable law, delegate to any other natural person over the
age of 21 his or her power for the purposes of signing any documents which the
Regular Trustees have power and authority to cause the Trust to execute
pursuant to Section 2.6.
SECTION 3.3 Delaware Trustee.
The initial Delaware Trustee shall be:
The Bank of New York (Delaware)
Notwithstanding any other provision of this Declaration, the
Delaware Trustee shall not be entitled to exercise any of the powers, nor shall
the Delaware Trustee have any of the duties and responsibilities of the Regular
Trustees described in this Declaration. The Delaware Trustee shall be a
Trustee for the sole and limited purpose of fulfilling the requirements of
Section 3807 of the Business Trust Act. Notwithstanding anything herein to the
contrary, the Delaware Trustee shall not be liable for the acts or omissions to
act of the Trust or of the Regular Trustees except such acts as the Delaware
Trustee is expressly obligated or authorized to undertake under this
Declaration or the Business Trust Act and except for the gross negligence or
willful misconduct of the Delaware Trustee.
SECTION 3.4 Property Trustee.
Prior to the issuance of the Preferred Securities and Common
Securities, the Sponsor shall appoint another trustee (the "Institutional
Trustee") meeting the requirements of an eligible trustee of the Trust
Indenture Act of 1939, as amended, by the execution of an amendment to this
Declaration executed by the Regular Trustees, the Sponsor, the Institutional
Trustee and the Delaware Trustee.
SECTION 3.5 Not Responsible for Recitals or Sufficiency of Declaration.
The recitals contained in this Declaration shall be taken as
the statements of the Sponsor, and the Trustees do not assume any
responsibility for their correctness. The Trustees make no representations as
to the value or condition of the property of the Trust or any part thereof.
The Trustees make no representations as to the validity or sufficiency of this
Declaration.
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<PAGE> 11
ARTICLE IV
LIMITATION OF LIABILITY OF
HOLDERS OF SECURITIES, TRUSTEES OR OTHERS
SECTION 4.1 Exculpation.
(a) No Indemnified Person shall be liable, responsible or
accountable in damages or otherwise to the Trust or any Covered Person for any
loss, damage or claim incurred by reason of any act or omission performed or
omitted by such Indemnified Person in good faith on behalf of the Trust and in
a manner such Indemnified Person reasonably believed to be within the scope of
the authority conferred on such Indemnified Person by this Declaration or by
law, except that an Indemnified Person shall be liable for any such loss,
damage or claim incurred by reason of such Indemnified Person's negligence or
willful misconduct with respect to such acts or omissions; and
(b) an Indemnified Person shall be fully protected in
relying in good faith upon the records of the Trust and upon such information,
opinions, reports or statements presented to the Trust by any Person as to
matters the Indemnified Person reasonably believes are within such other
Person's professional or expert competence and who has been selected with
reasonable care by or on behalf of the Trust, including information, opinions,
reports or statements as to the value and amount of the assets, liabilities,
profits, losses, or any other facts pertinent to the existence and amount of
assets from which distributions to holders of Securities might properly be
paid.
SECTION 4.2 Fiduciary Duty.
(a) To the extent that, at law or in equity, an
Indemnified Person has duties (including fiduciary duties) and liabilities
relating thereto to the Trust or to any other Covered Person, an Indemnified
Person acting under this Declaration shall not be liable to the Trust or to any
other Covered Person for its good faith reliance on the provisions of this
Declaration. The provisions of this Declaration, to the extent that they
restrict the duties and liabilities of an Indemnified Person otherwise existing
at law or in equity, are agreed by the parties hereto to replace such other
duties and liabilities of such Indemnified Person;
(b) unless otherwise expressly provided herein:
(i) whenever a conflict of interest exists or
arises between Covered Persons; or
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<PAGE> 12
(ii) whenever this Declaration or any other
agreement contemplated herein or therein provides that an
Indemnified Person shall act in a manner that is, or provides
terms that are, fair and reasonable to the Trust or any holder
of Securities,
the Indemnified Person shall resolve such conflict of interest, take such
action or provide such terms, considering in each case the relative interest of
each party (including its own interest) to such conflict, agreement,
transaction or situation and the benefits and burdens relating to such
interests, any customary or accepted industry practices, and any applicable
generally accepted accounting practices or principles. In the absence of bad
faith by the Indemnified Person, the resolution, action or term so made, taken
or provided by the Indemnified Person shall not constitute a breach of this
Declaration or any other agreement contemplated herein or of any duty or
obligation of the Indemnified Person at law or in equity or otherwise; and
(c) whenever in this Declaration an Indemnified Person is
permitted or required to make a decision:
(i) in its "discretion" or under a grant of
similar authority, the Indemnified Person shall be entitled to
consider such interests and factors as it desires, including
its own interests, and shall have no duty or obligation to
give any consideration to any interest of or factors affecting
the Trust or any other Person; or
(ii) in its "good faith" or under another
express standard, the Indemnified Person shall act under such
express standard and shall not be subject to any other or
different standard imposed by this Declaration or by
applicable law.
SECTION 4.3 Indemnification.
(a) (i) The Debenture Issuer shall indemnify, to the
full extent permitted by law, any Company Indemnified Person who was
or is a party or is threatened to be made a party to any threatened,
pending or completed action, suit or proceeding, whether civil,
criminal, administrative or investigative (other than an action by or
in the right of the Trust) by reason of the fact that he is or was a
Company Indemnified Person against expenses (including attorneys'
fees), judgments, fines and amounts paid in settlement actually and
reasonably incurred by him in connection with such action, suit or
proceeding if he acted in good faith and in a manner he reasonably
believed to be in or not opposed to the best interests of the Trust,
and, with respect to any criminal action or proceeding, had no
reasonable
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<PAGE> 13
cause to believe his conduct was unlawful. The termination of any
action, suit or proceeding by judgment, order, settlement, conviction,
or upon a plea of nolo contendere or its equivalent, shall not, of
itself, create a presumption that the Company Indemnified Person did
not act in good faith and in a manner which he reasonably believed to
be in or not opposed to the best interests of the Trust, and, with
respect to any criminal action or proceeding, had reasonable cause to
believe that his conduct was unlawful.
(ii) The Debenture Issuer shall indemnify, to the full
extent permitted by law, any Company Indemnified Person who was or is
a party or is threatened to be made a party to any threatened, pending
or completed action or suit by or in the right of the Trust to procure
a judgment in its favor by reason of the fact that he is or was a
Company Indemnified Person against expenses (including attorneys'
fees) actually and reasonably incurred by him in connection with the
defense or settlement of such action or suit if he acted in good faith
and in a manner he reasonably believed to be in or not opposed to the
best interests of the Trust and except that no such indemnification
shall be made in respect of any claim, issue or matter as to which
such Company Indemnified Person shall have been adjudged to be liable
to the Trust unless and only to the extent that the Court of Chancery
of Delaware or the court in which such action or suit was brought
shall determine upon application that, despite the adjudication of
liability but in view of all the circumstances of the case, such
person is fairly and reasonably entitled to indemnity for such
expenses which such Court of Chancery or such other court shall deem
proper.
(iii) To the extent that a Company Indemnified Person shall
be successful on the merits or otherwise (including dismissal of an
action without prejudice or the settlement of an action without
admission of liability) in defense of any action, suit or proceeding
referred to in paragraphs (i) and (ii) of this Section 4.3(a), or in
defense of any claim, issue or matter therein, he shall be
indemnified, to the full extent permitted by law, against expenses
(including attorneys' fees) actually and reasonably incurred by him in
connection therewith.
(iv) Any indemnification under paragraphs (i) and (ii) of
this Section 4.3(a) (unless ordered by a court) shall be made by the
Debenture Issuer only as authorized in the specific case upon a
determination that indemnification of the Company Indemnified Person
is proper in the circumstances because he has met the applicable
standard of conduct set forth in paragraphs (i) and (ii). Such
determination shall be made (1) by the Regular Trustees by a majority
vote of a quorum consisting of such Regular Trustees who were not
par-
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ties to such action, suit or proceeding, (2) if such a quorum is
not obtainable, or, even if obtainable, if a quorum of disinterested
Regular Trustees so directs, by independent legal counsel in a written
opinion, or (3) by the Common Security Holder of the Trust.
(v) Expenses (including attorneys' fees) incurred by a
Company Indemnified Person in defending a civil, criminal,
administrative or investigative action, suit or proceeding referred to
in paragraphs (i) and (ii) of this Section 4.3(a) shall be paid by the
Debenture Issuer in advance of the final disposition of such action,
suit or proceeding upon receipt of an undertaking by or on behalf of
such Company Indemnified Person to repay such amount if it shall
ultimately be determined that he is not entitled to be indemnified by
the Debenture Issuer as authorized in this Section 4.3(a).
Notwithstanding the foregoing, no advance shall be made by the
Debenture Issuer if a determination is reasonably and promptly made
(i) by the Regular Trustees by a majority vote of a quorum of
disinterested Regular Trustees, (ii) if such a quorum is not
obtainable, or, even if obtainable, if a quorum of disinterested
Regular Trustees so directs, by independent legal counsel in a written
opinion or (iii) the Common Security Holder of the Trust, that, based
upon the facts known to the Regular Trustees, counsel or the Common
Security Holder at the time such determination is made, such Company
Indemnified Person acted in bad faith or in a manner that such person
did not believe to be in or not opposed to the best interests of the
Trust, or, with respect to any criminal proceeding, that such Company
Indemnified Person believed or had reasonable cause to believe his
conduct was unlawful. In no event shall any advance be made in
instances where the Regular Trustees, independent legal counsel or
Common Security Holder reasonably determine that such person
deliberately breached his duty to the Trust or its Common or Preferred
Security Holders.
(vi) The indemnification and advancement of expenses
provided by, or granted pursuant to, the other paragraphs of this
Section 4.3(a) shall not be deemed exclusive of any other rights to
which those seeking indemnification and advancement of expenses may be
entitled under any agreement, vote of stockholders or disinterested
directors of the Debenture Issuer or Preferred Security Holders of the
Trust or otherwise, both as to action in his official capacity and as
to action in another capacity while holding such office. All rights
to indemnification under this Section 4.3(a) shall be deemed to be
provided by a contract between the Debenture Issuer and each Company
Indemnified Person who serves in such capacity at any time while this
Section 4.3(a) is in effect. Any repeal or modification of this
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Section 4.3(a) shall not affect any rights or obligations then
existing.
(vii) The Debenture Issuer or the Trust may purchase and
maintain insurance on behalf of any person who is or was a Company
Indemnified Person against any liability asserted against him and
incurred by him in any such capacity, or arising out of his status as
such, whether or not the Debenture Issuer would have the power to
indemnify him against such liability under the provisions of this
Section 4.3(a).
(viii) For purposes of this Section 4.3(a), references to
"the Trust" shall include, in addition to the resulting or surviving
entity, any constituent entity (including any constituent of a
constituent) absorbed in a consolidation or merger, so that any person
who is or was a director, trustee, officer or employee of such
constituent entity, or is or was serving at the request of such
constituent entity as a director, trustee, officer, employee or agent
of another entity, shall stand in the same position under the
provisions of this Section 4.3(a) with respect to the resulting or
surviving entity as he would have with respect to such constituent
entity if its separate existence had continued.
(ix) The indemnification and advancement of expenses
provided by, or granted pursuant to, this Section 4.3(a) shall, unless
otherwise provided when authorized or ratified, continue as to a
person who has ceased to be a Company Indemnified Person and shall
inure to the benefit of the heirs, executors and administrators of
such a person.
(b) The Debenture Issuer agrees to indemnify (i) the Delaware
Trustee, (ii) any Affiliate of the Delaware Trustee, and (iii) any officers,
directors, shareholders, members, partners, employees, representatives,
nominees, custodians or agents of the Delaware Trustee (each of the Persons in
(i) through (iii) being referred to as a "Fiduciary Indemnified Person") for,
and to hold each Fiduciary Indemnified Person harmless against, any loss,
liability or expense incurred without negligence or bad faith on its part,
arising out of or in connection with the acceptance or administration of the
trust or trusts hereunder, including the costs and expenses (including
reasonable legal fees and expenses) of defending itself against, or
investigating, any claim or liability in connection with the exercise or
performance of any of its powers or duties hereunder. The obligation to
indemnify as set forth in this Section 4.3(b) shall survive the termination of
this Declaration.
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SECTION 4.4 Outside Businesses.
Any Covered Person, the Sponsor and the Delaware Trustee may
engage in or possess an interest in other business ventures of any nature or
description, independently or with others, similar or dissimilar to the
business of the Trust, and the Trust and the holders of Securities shall have
no rights by virtue of this Declaration in and to such independent ventures or
the income or profits derived therefrom and the pursuit of any such venture,
even if competitive with the business of the Trust, shall not be deemed
wrongful or improper. No Covered Person, the Sponsor or the Delaware Trustee
shall be obligated to present any particular investment or other opportunity to
the Trust even if such opportunity is of a character that, if presented to the
Trust, could be taken by the Trust, and any Covered Person, the Sponsor and the
Delaware Trustee shall have the right to take for its own account (individually
or as a partner or fiduciary) or to recommend to others any such particular
investment or other opportunity. Any Covered Person and the Delaware Trustee
may engage or be interested in any financial or other transaction with the
Sponsor or any Affiliate of the Sponsor, or may act as depositary for, trustee
or agent for or may act on any committee or body of holders of, securities or
other obligations of the Sponsor or its Affiliates.
ARTICLE V
AMENDMENTS, TERMINATION, MISCELLANEOUS
SECTION 5.1 Amendments.
At any time before the issue of any Securities, this
Declaration may be amended by, and only by, a written instrument executed by
all of the Regular Trustees and the Sponsor.
SECTION 5.2 Termination of Trust.
(a) The Trust shall terminate and be of no further force
or effect:
(i) upon the bankruptcy of the Sponsor;
(ii) upon the filing of a certificate of
dissolution or its equivalent with respect to the Sponsor or
the revocation of the Sponsor's charter or of the Trust's
certificate of trust;
(iii) upon the entry of a decree of judicial
dissolution of the Sponsor, or the Trust; and
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(iv) before the issue of any Securities, with
the consent of all of the Regular Trustees and the Sponsor;
and
(b) as soon as is practicable after the occurrence of an
event referred to in Section 5.2(a), the Trustees shall file a certificate of
cancellation with the Secretary of State of the State of Delaware.
SECTION 5.3 Governing Law.
This Declaration and the rights of the parties hereunder shall
be governed by and interpreted in accordance with the laws of the State of
Delaware and all rights and remedies shall be governed by such laws without
regard to principles of conflict of laws.
SECTION 5.4 Headings.
Headings contained in this Declaration are inserted for
convenience of reference only and do not affect the interpretation of this
Declaration or any provision hereof.
SECTION 5.5 Successors and Assigns.
Whenever in this Declaration any of the parties hereto is
named or referred to, the successors and assigns of such party shall be deemed
to be included, and all covenants and agreements in this Declaration by the
Sponsor and the Trustees shall bind and inure to the benefit of their
respective successors and assigns, whether so expressed.
SECTION 5.6 Partial Enforceability.
If any provision of this Declaration, or the application of
such provision to any Person or circumstance, shall be held invalid, the
remainder of this Declaration, or the application of such provision to persons
or circumstances other than those to which it is held invalid, shall not be
affected thereby.
SECTION 5.7 Counterparts.
This Declaration may contain more than one counterpart of the
signature page and this Declaration may be executed by the affixing of the
signature of each of the Trustees to one of such counterpart signature pages.
All of such counterpart signature pages shall be read as though one, and they
shall have the same force and effect as though all of the signers had signed a
single signature page.
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IN WITNESS WHEREOF, the undersigned has caused these presents
to be executed as of the day and year first above written.
/s/ T.C. Morris
--------------------------------
Name: T.C. Morris
Title: Regular Trustee
/s/ John A. Carrig
--------------------------------
Name: John A. Carrig
Title: Regular Trustee
/s/ L.L. McCall
--------------------------------
Name: L.L. McCall
Title: Regular Trustee
THE BANK OF NEW YORK (DELAWARE), as
Delaware Trustee
By: /s/ Walter Douglas
-----------------------------
Name: Walter Douglas
Title: Vice President
PHILLIPS PETROLEUM COMPANY, as Sponsor
By: /s/ J. Bryan Whitworth
-----------------------------
Name: J. Bryan Whitworth
Title: Senior Vice President
and General Counsel
<PAGE> 19
EXHIBIT A
CERTIFICATE OF TRUST
The undersigned, the trustees of Phillips 66 Capital I,
desiring to form a business trust pursuant to Delaware Business Trust Act, 12
Del. C. Section 3810, hereby certify as follows:
(a) The name of the business trust being formed hereby
(the "Trust") is "Phillips 66 Capital I."
(b) The name and business address of the trustee of the
Trust which has its principal place of business in
the State of Delaware is as follows:
The Bank of New York (Delaware)
White Clay Center, Route 273
Newark, Delaware 19711
(c) This Certificate of Trust shall be effective as of
the date of filing.
Dated: February 23, 1996
--------------------------------
Name: T.C. Morris
Title: Trustee
--------------------------------
Name: John A. Carrig
Title: Trustee
--------------------------------
Name: L.L. McCall
Title: Trustee
THE BANK OF NEW YORK (DELAWARE), as
Trustee
By:
-----------------------------
Name: Walter Douglas
Title: Vice President
16
<PAGE> 1
Exhibit 4-F
================================
DECLARATION OF TRUST
Phillips 66 Capital II
Dated as of February 23, 1996
================================
<PAGE> 2
TABLE OF CONTENTS
<TABLE>
<S> <C> <C>
Page
----
ARTICLE I
DEFINITIONS
SECTION 1.1 Definitions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1
ARTICLE II
ORGANIZATION
SECTION 2.1 Name . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4
SECTION 2.2 Office . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4
SECTION 2.3 Purpose . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4
SECTION 2.4 Authority . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4
SECTION 2.5 Title to Property of the Trust . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4
SECTION 2.6 Powers of the Trustees . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5
SECTION 2.7 Filing of Certificate of Trust . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6
SECTION 2.8 Duration of Trust. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6
SECTION 2.9 Responsibilities of the Sponsor . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6
Section 2.10 Declaration Binding on Securities Holders . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7
ARTICLE III
TRUSTEES
SECTION 3.1 Trustees . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7
SECTION 3.2 Regular Trustees . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7
SECTION 3.3 Delaware Trustee . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8
SECTION 3.4 Property Trustee. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8
SECTION 3.5 Not Responsible for Recitals or Sufficiency of Declaration. . . . . . . . . . . . . . . . . . . . . 8
ARTICLE IV
LIMITATION OF LIABILITY OF
HOLDERS OF SECURITIES, TRUSTEES OR OTHERS
SECTION 4.1 Exculpation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9
SECTION 4.2 Fiduciary Duty . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9
SECTION 4.3 Indemnification . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10
SECTION 4.4 Outside Businesses . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 14
ARTICLE V
AMENDMENTS, TERMINATION, MISCELLANEOUS
SECTION 5.1 Amendments . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 14
SECTION 5.2 Termination of Trust . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 14
SECTION 5.3 Governing Law . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 15
SECTION 5.4 Headings . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 15
SECTION 5.5 Successors and Assigns . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 15
SECTION 5.6 Partial Enforceability . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 15
SECTION 5.7 Counterparts . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 15
</TABLE>
i
<PAGE> 3
DECLARATION OF TRUST
OF
Phillips 66 Capital II
February 23, 1996
DECLARATION OF TRUST ("Declaration") dated and effective as of
February 23, 1996 by the Trustees (as defined herein), the Sponsor (as defined
herein), and by the holders, from time to time, of undivided beneficial
interests in the Trust to be issued pursuant to this Declaration;
WHEREAS, the Trustees and the Sponsor desire to establish a
trust (the "Trust") pursuant to the Delaware Business Trust Act for the sole
purpose of issuing and selling certain securities representing undivided
beneficial interests in the assets of the Trust and investing the proceeds
thereof in certain Debentures of the Debenture Issuer; and
NOW, THEREFORE, it being the intention of the parties hereto
that the Trust constitute a business trust under the Business Trust Act and
that this Declaration constitute the governing instrument of such business
trust, the Trustees declare that all assets contributed to the Trust will be
held in trust for the exclusive benefit of the holders, from time to time, of
the securities representing undivided beneficial interests in the assets of the
Trust issued hereunder, subject to the provisions of this Declaration.
ARTICLE I
DEFINITIONS
SECTION 1.1 Definitions.
Unless the context otherwise requires:
(a) Capitalized terms used in this Declaration but not defined in
the preamble above have the respective meanings assigned to
them in this Section 1.1;
(b) a term defined anywhere in this Declaration has the same
meaning throughout;
(c) all references to "the Declaration" or "this Declaration" are
to this Declaration of Trust as modified, supplemented or
amended from time to time;
(d) all references in this Declaration to Articles and Sections
are to Articles and Sections of this Declaration unless
otherwise specified; and
<PAGE> 4
(e) a reference to the singular includes the plural and vice
versa.
"Affiliate" has the same meaning as given to that term in Rule
405 of the Securities Act or any successor rule thereunder.
"Business Day" means any day other than a day on which banking
institutions in New York, New York are authorized or required by law to close.
"Business Trust Act" means Chapter 38 of Title 12 of the
Delaware Code, 12 Del. Code Section 3801 et seq., as it may be amended from
time to time, or any successor legislation.
"Commission" means the Securities and Exchange Commission.
"Common Security" means a security representing an undivided
beneficial interest in the assets of the Trust with such terms as may be set
out in any amendment to this Declaration.
"Company Indemnified Person" means (a) any Regular Trustee;
(b) any Affiliate of any Regular Trustee; (c) any officers, directors,
shareholders, members, partners, employees, representatives or agents of any
Regular Trustee; or (d) any employee or agent of the Trust or its Affiliates.
"Covered Person" means (a) any officer, director, shareholder,
partner, member, representative, employee or agent of (i) the Trust or (ii) the
Trust's Affiliates and (b) any holder of Securities.
"Debenture Issuer" means the Parent in its capacity as the
issuer of the Debentures under the Indenture.
"Debentures" means the series of Debentures to be issued by
the Debenture Issuer and acquired by the Trust.
"Debenture Trustee" means [The Bank of New York, a New York
banking corporation], as trustee under the Indenture until a successor is
appointed thereunder, and thereafter means such successor trustee.
"Delaware Trustee" has the meaning set forth in Section 3.1.
"Exchange Act" means the Securities Exchange Act of 1934, as
amended from time to time or any successor legislation.
2
<PAGE> 5
"Fiduciary Indemnified Person" has the meaning set forth in
Section 4.3(b).
"Indemnified Person" means a Company Indemnified Person or a
Fiduciary Indemnified Person.
"Indenture" means the indenture to be entered into between the
Parent and the Debenture Trustee and any indenture supplemental thereto
pursuant to which the Debentures are to be issued.
"Parent" means Phillips Petroleum Company, a Delaware
corporation or any successor entity in a merger.
"Person" means a legal person, including any individual,
corporation, estate, partnership, joint venture, association, joint stock
company, limited liability company, trust, unincorporated association, or
government or any agency or political subdivision thereof, or any other entity
of whatever nature.
"Preferred Security" means a security representing an
undivided beneficial interest in the assets of the Trust with such terms as may
be set out in any amendment to this Declaration.
"Regular Trustee" means any Trustee other than the Delaware
Trustee and the Institutional Trustee (as hereinafter defined).
"Securities" means the Common Securities and the Preferred
Securities.
"Securities Act" means the Securities Act of 1933, as amended
from time to time, or any successor legislation.
"Sponsor" means the Parent in its capacity as sponsor of the
Trust.
"Trustee" or "Trustees" means each Person who has signed this
Declaration as a trustee, so long as such Person shall continue in office in
accordance with the terms hereof, and all other Persons who may from time to
time be duly appointed, qualified and serving as Trustees in accordance with
the provisions hereof, and references herein to a Trustee or the Trustees shall
refer to such Person or Persons solely in their capacity as trustees hereunder.
3
<PAGE> 6
ARTICLE II
ORGANIZATION
SECTION 2.1 Name.
The Trust created by this Declaration is named "Phillips 66
Capital II." The Trust's activities may be conducted under the name of the
Trust or any other name deemed advisable by the Regular Trustees.
SECTION 2.2 Office.
The address of the principal office of the Trust is c/o
Phillips Petroleum Company, Phillips Building, Bartlesville, Oklahoma 74004.
At any time, the Regular Trustees may designate another principal office.
SECTION 2.3 Purpose.
The exclusive purposes and functions of the Trust are (a) to
issue and sell Securities and use the proceeds from such sale to acquire the
Debentures, and (b) except as otherwise limited herein, to engage in only those
other activities necessary, or incidental thereto. The Trust shall not borrow
money, issue debt or reinvest proceeds derived from investments, pledge any of
its assets, or otherwise undertake (or permit to be undertaken) any activity
that would cause the Trust not to be classified for United States federal
income tax purposes as a grantor trust.
SECTION 2.4 Authority.
Subject to the limitations provided in this Declaration, the
Regular Trustees shall have exclusive and complete authority to carry out the
purposes of the Trust. An action taken by the Regular Trustees in accordance
with their powers shall constitute the act of and serve to bind the Trust. In
dealing with the Regular Trustees acting on behalf of the Trust, no person
shall be required to inquire into the authority of the Regular Trustees to bind
the Trust. Persons dealing with the Trust are entitled to rely conclusively on
the power and authority of the Regular Trustees as set forth in this
Declaration.
SECTION 2.5 Title to Property of the Trust.
Legal title to all assets of the Trust shall be vested in the
Trust.
4
<PAGE> 7
SECTION 2.6 Powers of the Trustees.
The Regular Trustees shall have the exclusive power and
authority to cause the Trust to engage in the following activities:
(a) to issue and sell the Preferred Securities and the
Common Securities in accordance with this Declaration; provided,
however, that the Trust may issue no more than one series of Preferred
Securities and no more than one series of Common Securities, and,
provided further, that there shall be no interests in the Trust other
than the Securities and the issuance of the Securities shall be
limited to a one-time, simultaneous issuance of both Preferred
Securities and Common Securities;
(b) in connection with the issue and sale of the
Preferred Securities, at the direction of the Sponsor, to:
(i) execute and file with the Commission a
registration statement on Form S-3 prepared by the Sponsor,
including any amendments thereto in relation to the Preferred
Securities;
(ii) execute and file any documents prepared by
the Sponsor, or take any acts as determined by the Sponsor to
be necessary in order to qualify or register all or part of
the Preferred Securities in any State in which the Sponsor has
determined to qualify or register such Preferred Securities
for sale;
(iii) execute and file an application, prepared
by the Sponsor, to the New York Stock Exchange or any other
national stock exchange or the Nasdaq Stock Market's National
Market for listing upon notice of issuance of any Preferred
Securities;
(iv) execute and file with the Commission a
registration statement on Form 8-A, including any amendments
thereto, prepared by the Sponsor relating to the registration
of the Preferred Securities under Section 12(b) of the
Exchange Act; and
(v) execute and enter into an underwriting
agreement and pricing agreement providing for the sale of the
Preferred Securities;
(c) to employ or otherwise engage employees and agents
(who may be designated as officers with titles) and managers,
contractors, advisors, and consultants and provide for reasonable
compensation for such services;
5
<PAGE> 8
(d) to incur expenses which are necessary or incidental
to carry out any of the purposes of this Declaration; and
(e) to execute all documents or instruments, perform all
duties and powers, and do all things for and on behalf of the Trust in
all matters necessary or incidental to the foregoing.
SECTION 2.7 Filing of Certificate of Trust.
On or after the date of execution of this Declaration, the
Trustees shall cause the filing of the Certificate of Trust for the Trust in
the form attached hereto as Exhibit A with the Secretary of State of the State
of Delaware.
SECTION 2.8 Duration of Trust.
The Trust, absent termination pursuant to the provisions of
Section 5.2, shall have existence for fifty-five (55) years from the date
hereof.
SECTION 2.9 Responsibilities of the Sponsor.
In connection with the issue and sale of the Preferred
Securities, the Sponsor shall have the exclusive right and responsibility to
engage in the following activities:
(a) to prepare for filing by the Trust with the
Commission a registration statement on Form S-3 in relation to the
Preferred Securities, including any amendments thereto;
(b) to determine the States in which to take appropriate
action to qualify or register for sale all or part of the Preferred
Securities and to do any and all such acts, other than actions which
must be taken by the Trust, and advise the Trust of actions it must
take, and prepare for execution and filing any documents to be
executed and filed by the Trust, as the Sponsor deems necessary or
advisable in order to comply with the applicable laws of any such
States;
(c) to prepare for filing by the Trust an application to
the New York Stock Exchange or any other national stock exchange or
the Nasdaq National Market for listing upon notice of issuance of any
Preferred Securities;
(d) to prepare for filing by the Trust with the
Commission a registration statement on Form 8-A relating to the
registration of the class of Preferred Securities under Section 12(b)
of the Exchange Act, including any amendments thereto; and
6
<PAGE> 9
(e) to negotiate the terms of an underwriting agreement
and pricing agreement providing for the sale of the Preferred
Securities.
Section 2.10 Declaration Binding on Securities Holders.
Every Person by virtue of having become a holder of a Security
or any interest therein in accordance with the terms of this Declaration, shall
be deemed to have expressly assented and agreed to the terms of, and shall be
bound by, this Declaration.
ARTICLE III
TRUSTEES
SECTION 3.1 Trustees.
The number of Trustees initially shall be four (4), and
thereafter the number of Trustees shall be such number as shall be fixed from
time to time by a written instrument signed by the Sponsor. The Sponsor is
entitled to appoint or remove without cause any Trustee at any time; provided,
however, that the number of Trustees shall in no event be less than two (2);
provided further that one Trustee, in the case of a natural person, shall be a
person who is a resident of the State of Delaware or that, if not a natural
person, is an entity which has its principal place of business in the State of
Delaware (the "Delaware Trustee"); provided further that there shall be at
least one trustee who is an employee or officer of, or is affiliated with the
Parent (a "Regular Trustee").
SECTION 3.2 Regular Trustees.
The initial Regular Trustees shall be:
T.C. Morris
John A. Carrig
L.L. McCall
(a) Except as expressly set forth in this Declaration, any
power of the Regular Trustees may be exercised by, or with the consent of, any
one such Regular Trustee.
(b) Unless otherwise determined by the Regular Trustees,
and except as otherwise required by the Business Trust Act, any Regular Trustee
is authorized to execute on behalf of the Trust any documents which the Regular
Trustees have the power and authority to cause the Trust to execute pursuant to
Section 2.6 provided, that, the registration statement referred to in Section
2.6(b)(i), including any amendments thereto, shall be signed by a majority of
the Regular Trustees; and
7
<PAGE> 10
(c) a Regular Trustee may, by power of attorney
consistent with applicable law, delegate to any other natural person over the
age of 21 his or her power for the purposes of signing any documents which the
Regular Trustees have power and authority to cause the Trust to execute
pursuant to Section 2.6.
SECTION 3.3 Delaware Trustee.
The initial Delaware Trustee shall be:
The Bank of New York (Delaware)
Notwithstanding any other provision of this Declaration, the
Delaware Trustee shall not be entitled to exercise any of the powers, nor shall
the Delaware Trustee have any of the duties and responsibilities of the Regular
Trustees described in this Declaration. The Delaware Trustee shall be a
Trustee for the sole and limited purpose of fulfilling the requirements of
Section 3807 of the Business Trust Act. Notwithstanding anything herein to the
contrary, the Delaware Trustee shall not be liable for the acts or omissions to
act of the Trust or of the Regular Trustees except such acts as the Delaware
Trustee is expressly obligated or authorized to undertake under this
Declaration or the Business Trust Act and except for the gross negligence or
willful misconduct of the Delaware Trustee.
SECTION 3.4 Property Trustee.
Prior to the issuance of the Preferred Securities and Common
Securities, the Sponsor shall appoint another trustee (the "Institutional
Trustee") meeting the requirements of an eligible trustee of the Trust
Indenture Act of 1939, as amended, by the execution of an amendment to this
Declaration executed by the Regular Trustees, the Sponsor, the Institutional
Trustee and the Delaware Trustee.
SECTION 3.5 Not Responsible for Recitals or Sufficiency of Declaration.
The recitals contained in this Declaration shall be taken as
the statements of the Sponsor, and the Trustees do not assume any
responsibility for their correctness. The Trustees make no representations as
to the value or condition of the property of the Trust or any part thereof.
The Trustees make no representations as to the validity or sufficiency of this
Declaration.
8
<PAGE> 11
ARTICLE IV
LIMITATION OF LIABILITY OF
HOLDERS OF SECURITIES, TRUSTEES OR OTHERS
SECTION 4.1 Exculpation.
(a) No Indemnified Person shall be liable, responsible or
accountable in damages or otherwise to the Trust or any Covered Person for any
loss, damage or claim incurred by reason of any act or omission performed or
omitted by such Indemnified Person in good faith on behalf of the Trust and in
a manner such Indemnified Person reasonably believed to be within the scope of
the authority conferred on such Indemnified Person by this Declaration or by
law, except that an Indemnified Person shall be liable for any such loss,
damage or claim incurred by reason of such Indemnified Person's negligence or
willful misconduct with respect to such acts or omissions; and
(b) an Indemnified Person shall be fully protected in
relying in good faith upon the records of the Trust and upon such information,
opinions, reports or statements presented to the Trust by any Person as to
matters the Indemnified Person reasonably believes are within such other
Person's professional or expert competence and who has been selected with
reasonable care by or on behalf of the Trust, including information, opinions,
reports or statements as to the value and amount of the assets, liabilities,
profits, losses, or any other facts pertinent to the existence and amount of
assets from which distributions to holders of Securities might properly be
paid.
SECTION 4.2 Fiduciary Duty.
(a) To the extent that, at law or in equity, an
Indemnified Person has duties (including fiduciary duties) and liabilities
relating thereto to the Trust or to any other Covered Person, an Indemnified
Person acting under this Declaration shall not be liable to the Trust or to any
other Covered Person for its good faith reliance on the provisions of this
Declaration. The provisions of this Declaration, to the extent that they
restrict the duties and liabilities of an Indemnified Person otherwise existing
at law or in equity, are agreed by the parties hereto to replace such other
duties and liabilities of such Indemnified Person;
(b) unless otherwise expressly provided herein:
(i) whenever a conflict of interest exists or
arises between Covered Persons; or
9
<PAGE> 12
(ii) whenever this Declaration or any other
agreement contemplated herein or therein provides that an
Indemnified Person shall act in a manner that is, or provides
terms that are, fair and reasonable to the Trust or any holder
of Securities,
the Indemnified Person shall resolve such conflict of interest, take such
action or provide such terms, considering in each case the relative interest of
each party (including its own interest) to such conflict, agreement,
transaction or situation and the benefits and burdens relating to such
interests, any customary or accepted industry practices, and any applicable
generally accepted accounting practices or principles. In the absence of bad
faith by the Indemnified Person, the resolution, action or term so made, taken
or provided by the Indemnified Person shall not constitute a breach of this
Declaration or any other agreement contemplated herein or of any duty or
obligation of the Indemnified Person at law or in equity or otherwise; and
(c) whenever in this Declaration an Indemnified Person is
permitted or required to make a decision:
(i) in its "discretion" or under a grant of
similar authority, the Indemnified Person shall be entitled to
consider such interests and factors as it desires, including
its own interests, and shall have no duty or obligation to
give any consideration to any interest of or factors affecting
the Trust or any other Person; or
(ii) in its "good faith" or under another
express standard, the Indemnified Person shall act under such
express standard and shall not be subject to any other or
different standard imposed by this Declaration or by
applicable law.
SECTION 4.3 Indemnification.
(a) (i) The Debenture Issuer shall indemnify, to the
full extent permitted by law, any Company Indemnified Person who was
or is a party or is threatened to be made a party to any threatened,
pending or completed action, suit or proceeding, whether civil,
criminal, administrative or investigative (other than an action by or
in the right of the Trust) by reason of the fact that he is or was a
Company Indemnified Person against expenses (including attorneys'
fees), judgments, fines and amounts paid in settlement actually and
reasonably incurred by him in connection with such action, suit or
proceeding if he acted in good faith and in a manner he reasonably
believed to be in or not opposed to the best interests of the Trust,
and, with respect to any criminal action or proceeding, had no
reasonable
10
<PAGE> 13
cause to believe his conduct was unlawful. The termination of any
action, suit or proceeding by judgment, order, settlement, conviction,
or upon a plea of nolo contendere or its equivalent, shall not, of
itself, create a presumption that the Company Indemnified Person did
not act in good faith and in a manner which he reasonably believed to
be in or not opposed to the best interests of the Trust, and, with
respect to any criminal action or proceeding, had reasonable cause to
believe that his conduct was unlawful.
(ii) The Debenture Issuer shall indemnify, to the full
extent permitted by law, any Company Indemnified Person who was or is
a party or is threatened to be made a party to any threatened, pending
or completed action or suit by or in the right of the Trust to procure
a judgment in its favor by reason of the fact that he is or was a
Company Indemnified Person against expenses (including attorneys'
fees) actually and reasonably incurred by him in connection with the
defense or settlement of such action or suit if he acted in good faith
and in a manner he reasonably believed to be in or not opposed to the
best interests of the Trust and except that no such indemnification
shall be made in respect of any claim, issue or matter as to which
such Company Indemnified Person shall have been adjudged to be liable
to the Trust unless and only to the extent that the Court of Chancery
of Delaware or the court in which such action or suit was brought
shall determine upon application that, despite the adjudication of
liability but in view of all the circumstances of the case, such
person is fairly and reasonably entitled to indemnity for such
expenses which such Court of Chancery or such other court shall deem
proper.
(iii) To the extent that a Company Indemnified Person shall
be successful on the merits or otherwise (including dismissal of an
action without prejudice or the settlement of an action without
admission of liability) in defense of any action, suit or proceeding
referred to in paragraphs (i) and (ii) of this Section 4.3(a), or in
defense of any claim, issue or matter therein, he shall be
indemnified, to the full extent permitted by law, against expenses
(including attorneys' fees) actually and reasonably incurred by him in
connection therewith.
(iv) Any indemnification under paragraphs (i) and (ii) of
this Section 4.3(a) (unless ordered by a court) shall be made by the
Debenture Issuer only as authorized in the specific case upon a
determination that indemnification of the Company Indemnified Person
is proper in the circumstances because he has met the applicable
standard of conduct set forth in paragraphs (i) and (ii). Such
determination shall be made (1) by the Regular Trustees by a majority
vote of a quorum consisting of such Regular Trustees who were not par-
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<PAGE> 14
ties to such action, suit or proceeding, (2) if such a quorum is not
obtainable, or, even if obtainable, if a quorum of disinterested Regular
Trustees so directs, by independent legal counsel in a written opinion, or (3)
by the Common Security Holder of the Trust.
(v) Expenses (including attorneys' fees) incurred by a
Company Indemnified Person in defending a civil, criminal,
administrative or investigative action, suit or proceeding referred to
in paragraphs (i) and (ii) of this Section 4.3(a) shall be paid by the
Debenture Issuer in advance of the final disposition of such action,
suit or proceeding upon receipt of an undertaking by or on behalf of
such Company Indemnified Person to repay such amount if it shall
ultimately be determined that he is not entitled to be indemnified by
the Debenture Issuer as authorized in this Section 4.3(a).
Notwithstanding the foregoing, no advance shall be made by the
Debenture Issuer if a determination is reasonably and promptly made
(i) by the Regular Trustees by a majority vote of a quorum of
disinterested Regular Trustees, (ii) if such a quorum is not
obtainable, or, even if obtainable, if a quorum of disinterested
Regular Trustees so directs, by independent legal counsel in a written
opinion or (iii) the Common Security Holder of the Trust, that, based
upon the facts known to the Regular Trustees, counsel or the Common
Security Holder at the time such determination is made, such Company
Indemnified Person acted in bad faith or in a manner that such person
did not believe to be in or not opposed to the best interests of the
Trust, or, with respect to any criminal proceeding, that such Company
Indemnified Person believed or had reasonable cause to believe his
conduct was unlawful. In no event shall any advance be made in
instances where the Regular Trustees, independent legal counsel or
Common Security Holder reasonably determine that such person
deliberately breached his duty to the Trust or its Common or Preferred
Security Holders.
(vi) The indemnification and advancement of expenses
provided by, or granted pursuant to, the other paragraphs of this
Section 4.3(a) shall not be deemed exclusive of any other rights to
which those seeking indemnification and advancement of expenses may be
entitled under any agreement, vote of stockholders or disinterested
directors of the Debenture Issuer or Preferred Security Holders of the
Trust or otherwise, both as to action in his official capacity and as
to action in another capacity while holding such office. All rights
to indemnification under this Section 4.3(a) shall be deemed to be
provided by a contract between the Debenture Issuer and each Company
Indemnified Person who serves in such capacity at any time while this
Section 4.3(a) is in effect. Any repeal or modification of this
12
<PAGE> 15
Section 4.3(a) shall not affect any rights or obligations then existing.
(vii) The Debenture Issuer or the Trust may purchase and
maintain insurance on behalf of any person who is or was a Company
Indemnified Person against any liability asserted against him and
incurred by him in any such capacity, or arising out of his status as
such, whether or not the Debenture Issuer would have the power to
indemnify him against such liability under the provisions of this
Section 4.3(a).
(viii) For purposes of this Section 4.3(a), references to
"the Trust" shall include, in addition to the resulting or surviving
entity, any constituent entity (including any constituent of a
constituent) absorbed in a consolidation or merger, so that any person
who is or was a director, trustee, officer or employee of such
constituent entity, or is or was serving at the request of such
constituent entity as a director, trustee, officer, employee or agent
of another entity, shall stand in the same position under the
provisions of this Section 4.3(a) with respect to the resulting or
surviving entity as he would have with respect to such constituent
entity if its separate existence had continued.
(ix) The indemnification and advancement of expenses
provided by, or granted pursuant to, this Section 4.3(a) shall, unless
otherwise provided when authorized or ratified, continue as to a
person who has ceased to be a Company Indemnified Person and shall
inure to the benefit of the heirs, executors and administrators of
such a person.
(b) The Debenture Issuer agrees to indemnify (i) the Delaware
Trustee, (ii) any Affiliate of the Delaware Trustee, and (iii) any officers,
directors, shareholders, members, partners, employees, representatives,
nominees, custodians or agents of the Delaware Trustee (each of the Persons in
(i) through (iii) being referred to as a "Fiduciary Indemnified Person") for,
and to hold each Fiduciary Indemnified Person harmless against, any loss,
liability or expense incurred without negligence or bad faith on its part,
arising out of or in connection with the acceptance or administration of the
trust or trusts hereunder, including the costs and expenses (including
reasonable legal fees and expenses) of defending itself against, or
investigating, any claim or liability in connection with the exercise or
performance of any of its powers or duties hereunder. The obligation to
indemnify as set forth in this Section 4.3(b) shall survive the termination of
this Declaration.
13
<PAGE> 16
SECTION 4.4 Outside Businesses.
Any Covered Person, the Sponsor and the Delaware Trustee may
engage in or possess an interest in other business ventures of any nature or
description, independently or with others, similar or dissimilar to the
business of the Trust, and the Trust and the holders of Securities shall have
no rights by virtue of this Declaration in and to such independent ventures or
the income or profits derived therefrom and the pursuit of any such venture,
even if competitive with the business of the Trust, shall not be deemed
wrongful or improper. No Covered Person, the Sponsor or the Delaware Trustee
shall be obligated to present any particular investment or other opportunity to
the Trust even if such opportunity is of a character that, if presented to the
Trust, could be taken by the Trust, and any Covered Person, the Sponsor and the
Delaware Trustee shall have the right to take for its own account (individually
or as a partner or fiduciary) or to recommend to others any such particular
investment or other opportunity. Any Covered Person and the Delaware Trustee
may engage or be interested in any financial or other transaction with the
Sponsor or any Affiliate of the Sponsor, or may act as depositary for, trustee
or agent for or may act on any committee or body of holders of, securities or
other obligations of the Sponsor or its Affiliates.
ARTICLE V
AMENDMENTS, TERMINATION, MISCELLANEOUS
SECTION 5.1 Amendments.
At any time before the issue of any Securities, this
Declaration may be amended by, and only by, a written instrument executed by
all of the Regular Trustees and the Sponsor.
SECTION 5.2 Termination of Trust.
(a) The Trust shall terminate and be of no further force
or effect:
(i) upon the bankruptcy of the Sponsor;
(ii) upon the filing of a certificate of
dissolution or its equivalent with respect to the Sponsor or
the revocation of the Sponsor's charter or of the Trust's
certificate of trust;
(iii) upon the entry of a decree of judicial
dissolution of the Sponsor, or the Trust; and
14
<PAGE> 17
(iv) before the issue of any Securities, with
the consent of all of the Regular Trustees and the Sponsor;
and
(b) as soon as is practicable after the occurrence of an
event referred to in Section 5.2(a), the Trustees shall file a certificate of
cancellation with the Secretary of State of the State of Delaware.
SECTION 5.3 Governing Law.
This Declaration and the rights of the parties hereunder shall
be governed by and interpreted in accordance with the laws of the State of
Delaware and all rights and remedies shall be governed by such laws without
regard to principles of conflict of laws.
SECTION 5.4 Headings.
Headings contained in this Declaration are inserted for
convenience of reference only and do not affect the interpretation of this
Declaration or any provision hereof.
SECTION 5.5 Successors and Assigns.
Whenever in this Declaration any of the parties hereto is
named or referred to, the successors and assigns of such party shall be deemed
to be included, and all covenants and agreements in this Declaration by the
Sponsor and the Trustees shall bind and inure to the benefit of their
respective successors and assigns, whether so expressed.
SECTION 5.6 Partial Enforceability.
If any provision of this Declaration, or the application of
such provision to any Person or circumstance, shall be held invalid, the
remainder of this Declaration, or the application of such provision to persons
or circumstances other than those to which it is held invalid, shall not be
affected thereby.
SECTION 5.7 Counterparts.
This Declaration may contain more than one counterpart of the
signature page and this Declaration may be executed by the affixing of the
signature of each of the Trustees to one of such counterpart signature pages.
All of such counterpart signature pages shall be read as though one, and they
shall have the same force and effect as though all of the signers had signed a
single signature page.
15
<PAGE> 18
IN WITNESS WHEREOF, the undersigned has caused these presents
to be executed as of the day and year first above written.
/s/ T.C. MORRIS
---------------------------
Name: T.C. Morris
Title: Regular Trustee
/s/ JOHN A. CARRIG
---------------------------
Name: John A. Carrig
Title: Regular Trustee
/s/ L.L. MCCALL
---------------------------
Name: L.L. McCall
Title: Regular Trustee
THE BANK OF NEW YORK (DELAWARE), as
Delaware Trustee
By: /s/ WALTER DOUGLAS
-------------------------
Name: Walter Douglas
Title: Vice President
PHILLIPS PETROLEUM COMPANY, as Sponsor
By: /s/ J. BRYAN WHITWORTH
-------------------------
Name: J. Bryan Whitworth
Title: Senior Vice President
and General Counsel
<PAGE> 19
EXHIBIT A
CERTIFICATE OF TRUST
The undersigned, the trustees of Phillips 66 Capital II,
desiring to form a business trust pursuant to Delaware Business Trust Act, 12
Del. C. Section 3810, hereby certify as follows:
(a) The name of the business trust being formed hereby
(the "Trust") is "Phillips 66 Capital II."
(b) The name and business address of the trustee of the
Trust which has its principal place of business in
the State of Delaware is as follows:
The Bank of New York (Delaware)
White Clay Center, Route 273
Newark, Delaware 19711
(c) This Certificate of Trust shall be effective as of
the date of filing.
Dated: February 23, 1996
-----------------------------------
Name: T.C. Morris
Title: Trustee
-----------------------------------
Name: John A. Carrig
Title: Trustee
-----------------------------------
Name: L.L. McCall
Title: Trustee
THE BANK OF NEW YORK (DELAWARE), as
Trustee
By:
--------------------------------
Name: Walter Douglas
Title: Vice President
17
<PAGE> 1
Exhibit 4-G
================================
DECLARATION OF TRUST
Phillips 66 Capital III
Dated as of February 23, 1996
================================
<PAGE> 2
TABLE OF CONTENTS
<TABLE>
<S> <C> <C>
Page
----
ARTICLE I
DEFINITIONS
SECTION 1.1 Definitions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1
ARTICLE II
ORGANIZATION
SECTION 2.1 Name . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4
SECTION 2.2 Office . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4
SECTION 2.3 Purpose . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4
SECTION 2.4 Authority . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4
SECTION 2.5 Title to Property of the Trust . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4
SECTION 2.6 Powers of the Trustees . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5
SECTION 2.7 Filing of Certificate of Trust . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6
SECTION 2.8 Duration of Trust. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6
SECTION 2.9 Responsibilities of the Sponsor . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6
Section 2.10 Declaration Binding on Securities Holders . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7
ARTICLE III
TRUSTEES
SECTION 3.1 Trustees . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7
SECTION 3.2 Regular Trustees . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7
SECTION 3.3 Delaware Trustee . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8
SECTION 3.4 Property Trustee. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8
SECTION 3.5 Not Responsible for Recitals or Sufficiency of Declaration. . . . . . . . . . . . . . . . . . . . . 8
ARTICLE IV
LIMITATION OF LIABILITY OF
HOLDERS OF SECURITIES, TRUSTEES OR OTHERS
SECTION 4.1 Exculpation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9
SECTION 4.2 Fiduciary Duty . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9
SECTION 4.3 Indemnification . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10
SECTION 4.4 Outside Businesses . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 14
ARTICLE V
AMENDMENTS, TERMINATION, MISCELLANEOUS
SECTION 5.1 Amendments . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 14
SECTION 5.2 Termination of Trust . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 14
SECTION 5.3 Governing Law . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 15
SECTION 5.4 Headings . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 15
SECTION 5.5 Successors and Assigns . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 15
SECTION 5.6 Partial Enforceability . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 15
SECTION 5.7 Counterparts . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 15
</TABLE>
i
<PAGE> 3
DECLARATION OF TRUST
OF
Phillips 66 Capital III
February 23, 1996
DECLARATION OF TRUST ("Declaration") dated and effective as of
February 23, 1996 by the Trustees (as defined herein), the Sponsor (as defined
herein), and by the holders, from time to time, of undivided beneficial
interests in the Trust to be issued pursuant to this Declaration;
WHEREAS, the Trustees and the Sponsor desire to establish a
trust (the "Trust") pursuant to the Delaware Business Trust Act for the sole
purpose of issuing and selling certain securities representing undivided
beneficial interests in the assets of the Trust and investing the proceeds
thereof in certain Debentures of the Debenture Issuer; and
NOW, THEREFORE, it being the intention of the parties hereto
that the Trust constitute a business trust under the Business Trust Act and
that this Declaration constitute the governing instrument of such business
trust, the Trustees declare that all assets contributed to the Trust will be
held in trust for the exclusive benefit of the holders, from time to time, of
the securities representing undivided beneficial interests in the assets of the
Trust issued hereunder, subject to the provisions of this Declaration.
ARTICLE I
DEFINITIONS
SECTION 1.1 Definitions.
Unless the context otherwise requires:
(a) Capitalized terms used in this Declaration but not defined in
the preamble above have the respective meanings assigned to
them in this Section 1.1;
(b) a term defined anywhere in this Declaration has the same
meaning throughout;
(c) all references to "the Declaration" or "this Declaration" are
to this Declaration of Trust as modified, supplemented or
amended from time to time;
(d) all references in this Declaration to Articles and Sections
are to Articles and Sections of this Declaration unless
otherwise specified; and
<PAGE> 4
(e) a reference to the singular includes the plural and vice
versa.
"Affiliate" has the same meaning as given to that term in Rule
405 of the Securities Act or any successor rule thereunder.
"Business Day" means any day other than a day on which banking
institutions in New York, New York are authorized or required by law to close.
"Business Trust Act" means Chapter 38 of Title 12 of the
Delaware Code, 12 Del. Code Section 3801 et seq., as it may be amended from
time to time, or any successor legislation.
"Commission" means the Securities and Exchange Commission.
"Common Security" means a security representing an undivided
beneficial interest in the assets of the Trust with such terms as may be set
out in any amendment to this Declaration.
"Company Indemnified Person" means (a) any Regular Trustee;
(b) any Affiliate of any Regular Trustee; (c) any officers, directors,
shareholders, members, partners, employees, representatives or agents of any
Regular Trustee; or (d) any employee or agent of the Trust or its Affiliates.
"Covered Person" means (a) any officer, director, shareholder,
partner, member, representative, employee or agent of (i) the Trust or (ii) the
Trust's Affiliates and (b) any holder of Securities.
"Debenture Issuer" means the Parent in its capacity as the
issuer of the Debentures under the Indenture.
"Debentures" means the series of Debentures to be issued by
the Debenture Issuer and acquired by the Trust.
"Debenture Trustee" means [The Bank of New York, a New York
banking corporation], as trustee under the Indenture until a successor is
appointed thereunder, and thereafter means such successor trustee.
"Delaware Trustee" has the meaning set forth in Section 3.1.
"Exchange Act" means the Securities Exchange Act of 1934, as
amended from time to time or any successor legislation.
2
<PAGE> 5
"Fiduciary Indemnified Person" has the meaning set forth in
Section 4.3(b).
"Indemnified Person" means a Company Indemnified Person or a
Fiduciary Indemnified Person.
"Indenture" means the indenture to be entered into between the
Parent and the Debenture Trustee and any indenture supplemental thereto
pursuant to which the Debentures are to be issued.
"Parent" means Phillips Petroleum Company, a Delaware
corporation or any successor entity in a merger.
"Person" means a legal person, including any individual,
corporation, estate, partnership, joint venture, association, joint stock
company, limited liability company, trust, unincorporated association, or
government or any agency or political subdivision thereof, or any other entity
of whatever nature.
"Preferred Security" means a security representing an
undivided beneficial interest in the assets of the Trust with such terms as may
be set out in any amendment to this Declaration.
"Regular Trustee" means any Trustee other than the Delaware
Trustee and the Institutional Trustee (as hereinafter defined).
"Securities" means the Common Securities and the Preferred
Securities.
"Securities Act" means the Securities Act of 1933, as amended
from time to time, or any successor legislation.
"Sponsor" means the Parent in its capacity as sponsor of the
Trust.
"Trustee" or "Trustees" means each Person who has signed this
Declaration as a trustee, so long as such Person shall continue in office in
accordance with the terms hereof, and all other Persons who may from time to
time be duly appointed, qualified and serving as Trustees in accordance with
the provisions hereof, and references herein to a Trustee or the Trustees shall
refer to such Person or Persons solely in their capacity as trustees hereunder.
3
<PAGE> 6
ARTICLE II
ORGANIZATION
SECTION 2.1 Name.
The Trust created by this Declaration is named "Phillips 66
Capital III." The Trust's activities may be conducted under the name of the
Trust or any other name deemed advisable by the Regular Trustees.
SECTION 2.2 Office.
The address of the principal office of the Trust is c/o
Phillips Petroleum Company, Phillips Building, Bartlesville, Oklahoma 74004.
At any time, the Regular Trustees may designate another principal office.
SECTION 2.3 Purpose.
The exclusive purposes and functions of the Trust are (a) to
issue and sell Securities and use the proceeds from such sale to acquire the
Debentures, and (b) except as otherwise limited herein, to engage in only those
other activities necessary, or incidental thereto. The Trust shall not borrow
money, issue debt or reinvest proceeds derived from investments, pledge any of
its assets, or otherwise undertake (or permit to be undertaken) any activity
that would cause the Trust not to be classified for United States federal
income tax purposes as a grantor trust.
SECTION 2.4 Authority.
Subject to the limitations provided in this Declaration, the
Regular Trustees shall have exclusive and complete authority to carry out the
purposes of the Trust. An action taken by the Regular Trustees in accordance
with their powers shall constitute the act of and serve to bind the Trust. In
dealing with the Regular Trustees acting on behalf of the Trust, no person
shall be required to inquire into the authority of the Regular Trustees to bind
the Trust. Persons dealing with the Trust are entitled to rely conclusively on
the power and authority of the Regular Trustees as set forth in this
Declaration.
SECTION 2.5 Title to Property of the Trust.
Legal title to all assets of the Trust shall be vested in the
Trust.
4
<PAGE> 7
SECTION 2.6 Powers of the Trustees.
The Regular Trustees shall have the exclusive power and
authority to cause the Trust to engage in the following activities:
(a) to issue and sell the Preferred Securities and the
Common Securities in accordance with this Declaration; provided,
however, that the Trust may issue no more than one series of Preferred
Securities and no more than one series of Common Securities, and,
provided further, that there shall be no interests in the Trust other
than the Securities and the issuance of the Securities shall be
limited to a one-time, simultaneous issuance of both Preferred
Securities and Common Securities;
(b) in connection with the issue and sale of the
Preferred Securities, at the direction of the Sponsor, to:
(i) execute and file with the Commission a
registration statement on Form S-3 prepared by the Sponsor,
including any amendments thereto in relation to the Preferred
Securities;
(ii) execute and file any documents prepared by
the Sponsor, or take any acts as determined by the Sponsor to
be necessary in order to qualify or register all or part of
the Preferred Securities in any State in which the Sponsor has
determined to qualify or register such Preferred Securities
for sale;
(iii) execute and file an application, prepared
by the Sponsor, to the New York Stock Exchange or any other
national stock exchange or the Nasdaq Stock Market's National
Market for listing upon notice of issuance of any Preferred
Securities;
(iv) execute and file with the Commission a
registration statement on Form 8-A, including any amendments
thereto, prepared by the Sponsor relating to the registration
of the Preferred Securities under Section 12(b) of the
Exchange Act; and
(v) execute and enter into an underwriting
agreement and pricing agreement providing for the sale of the
Preferred Securities;
(c) to employ or otherwise engage employees and agents
(who may be designated as officers with titles) and managers,
contractors, advisors, and consultants and provide for reasonable
compensation for such services;
5
<PAGE> 8
(d) to incur expenses which are necessary or incidental
to carry out any of the purposes of this Declaration; and
(e) to execute all documents or instruments, perform all
duties and powers, and do all things for and on behalf of the Trust in
all matters necessary or incidental to the foregoing.
SECTION 2.7 Filing of Certificate of Trust.
On or after the date of execution of this Declaration, the
Trustees shall cause the filing of the Certificate of Trust for the Trust in
the form attached hereto as Exhibit A with the Secretary of State of the State
of Delaware.
SECTION 2.8 Duration of Trust.
The Trust, absent termination pursuant to the provisions of
Section 5.2, shall have existence for fifty-five (55) years from the date
hereof.
SECTION 2.9 Responsibilities of the Sponsor.
In connection with the issue and sale of the Preferred
Securities, the Sponsor shall have the exclusive right and responsibility to
engage in the following activities:
(a) to prepare for filing by the Trust with the
Commission a registration statement on Form S-3 in relation to the
Preferred Securities, including any amendments thereto;
(b) to determine the States in which to take appropriate
action to qualify or register for sale all or part of the Preferred
Securities and to do any and all such acts, other than actions which
must be taken by the Trust, and advise the Trust of actions it must
take, and prepare for execution and filing any documents to be
executed and filed by the Trust, as the Sponsor deems necessary or
advisable in order to comply with the applicable laws of any such
States;
(c) to prepare for filing by the Trust an application to
the New York Stock Exchange or any other national stock exchange or
the Nasdaq National Market for listing upon notice of issuance of any
Preferred Securities;
(d) to prepare for filing by the Trust with the
Commission a registration statement on Form 8-A relating to the
registration of the class of Preferred Securities under Section 12(b)
of the Exchange Act, including any amendments thereto; and
6
<PAGE> 9
(e) to negotiate the terms of an underwriting agreement
and pricing agreement providing for the sale of the Preferred
Securities.
Section 2.10 Declaration Binding on Securities Holders.
Every Person by virtue of having become a holder of a Security
or any interest therein in accordance with the terms of this Declaration, shall
be deemed to have expressly assented and agreed to the terms of, and shall be
bound by, this Declaration.
ARTICLE III
TRUSTEES
SECTION 3.1 Trustees.
The number of Trustees initially shall be four (4), and
thereafter the number of Trustees shall be such number as shall be fixed from
time to time by a written instrument signed by the Sponsor. The Sponsor is
entitled to appoint or remove without cause any Trustee at any time; provided,
however, that the number of Trustees shall in no event be less than two (2);
provided further that one Trustee, in the case of a natural person, shall be a
person who is a resident of the State of Delaware or that, if not a natural
person, is an entity which has its principal place of business in the State of
Delaware (the "Delaware Trustee"); provided further that there shall be at
least one trustee who is an employee or officer of, or is affiliated with the
Parent (a "Regular Trustee").
SECTION 3.2 Regular Trustees.
The initial Regular Trustees shall be:
T.C. Morris
John A. Carrig
L.L. McCall
(a) Except as expressly set forth in this Declaration, any
power of the Regular Trustees may be exercised by, or with the consent of, any
one such Regular Trustee.
(b) Unless otherwise determined by the Regular Trustees,
and except as otherwise required by the Business Trust Act, any Regular Trustee
is authorized to execute on behalf of the Trust any documents which the Regular
Trustees have the power and authority to cause the Trust to execute pursuant to
Section 2.6 provided, that, the registration statement referred to in Section
2.6(b)(i), including any amendments thereto, shall be signed by a majority of
the Regular Trustees; and
7
<PAGE> 10
(c) a Regular Trustee may, by power of attorney
consistent with applicable law, delegate to any other natural person over the
age of 21 his or her power for the purposes of signing any documents which the
Regular Trustees have power and authority to cause the Trust to execute
pursuant to Section 2.6.
SECTION 3.3 Delaware Trustee.
The initial Delaware Trustee shall be:
The Bank of New York (Delaware)
Notwithstanding any other provision of this Declaration, the
Delaware Trustee shall not be entitled to exercise any of the powers, nor shall
the Delaware Trustee have any of the duties and responsibilities of the Regular
Trustees described in this Declaration. The Delaware Trustee shall be a
Trustee for the sole and limited purpose of fulfilling the requirements of
Section 3807 of the Business Trust Act. Notwithstanding anything herein to the
contrary, the Delaware Trustee shall not be liable for the acts or omissions to
act of the Trust or of the Regular Trustees except such acts as the Delaware
Trustee is expressly obligated or authorized to undertake under this
Declaration or the Business Trust Act and except for the gross negligence or
willful misconduct of the Delaware Trustee.
SECTION 3.4 Property Trustee.
Prior to the issuance of the Preferred Securities and Common
Securities, the Sponsor shall appoint another trustee (the "Institutional
Trustee") meeting the requirements of an eligible trustee of the Trust
Indenture Act of 1939, as amended, by the execution of an amendment to this
Declaration executed by the Regular Trustees, the Sponsor, the Institutional
Trustee and the Delaware Trustee.
SECTION 3.5 Not Responsible for Recitals or Sufficiency of Declaration.
The recitals contained in this Declaration shall be taken as
the statements of the Sponsor, and the Trustees do not assume any
responsibility for their correctness. The Trustees make no representations as
to the value or condition of the property of the Trust or any part thereof.
The Trustees make no representations as to the validity or sufficiency of this
Declaration.
8
<PAGE> 11
ARTICLE IV
LIMITATION OF LIABILITY OF
HOLDERS OF SECURITIES, TRUSTEES OR OTHERS
SECTION 4.1 Exculpation.
(a) No Indemnified Person shall be liable, responsible or
accountable in damages or otherwise to the Trust or any Covered Person for any
loss, damage or claim incurred by reason of any act or omission performed or
omitted by such Indemnified Person in good faith on behalf of the Trust and in
a manner such Indemnified Person reasonably believed to be within the scope of
the authority conferred on such Indemnified Person by this Declaration or by
law, except that an Indemnified Person shall be liable for any such loss,
damage or claim incurred by reason of such Indemnified Person's negligence or
willful misconduct with respect to such acts or omissions; and
(b) an Indemnified Person shall be fully protected in
relying in good faith upon the records of the Trust and upon such information,
opinions, reports or statements presented to the Trust by any Person as to
matters the Indemnified Person reasonably believes are within such other
Person's professional or expert competence and who has been selected with
reasonable care by or on behalf of the Trust, including information, opinions,
reports or statements as to the value and amount of the assets, liabilities,
profits, losses, or any other facts pertinent to the existence and amount of
assets from which distributions to holders of Securities might properly be
paid.
SECTION 4.2 Fiduciary Duty.
(a) To the extent that, at law or in equity, an
Indemnified Person has duties (including fiduciary duties) and liabilities
relating thereto to the Trust or to any other Covered Person, an Indemnified
Person acting under this Declaration shall not be liable to the Trust or to any
other Covered Person for its good faith reliance on the provisions of this
Declaration. The provisions of this Declaration, to the extent that they
restrict the duties and liabilities of an Indemnified Person otherwise existing
at law or in equity, are agreed by the parties hereto to replace such other
duties and liabilities of such Indemnified Person;
(b) unless otherwise expressly provided herein:
(i) whenever a conflict of interest exists or
arises between Covered Persons; or
9
<PAGE> 12
(ii) whenever this Declaration or any other
agreement contemplated herein or therein provides that an
Indemnified Person shall act in a manner that is, or provides
terms that are, fair and reasonable to the Trust or any holder
of Securities,
the Indemnified Person shall resolve such conflict of interest, take such
action or provide such terms, considering in each case the relative interest of
each party (including its own interest) to such conflict, agreement,
transaction or situation and the benefits and burdens relating to such
interests, any customary or accepted industry practices, and any applicable
generally accepted accounting practices or principles. In the absence of bad
faith by the Indemnified Person, the resolution, action or term so made, taken
or provided by the Indemnified Person shall not constitute a breach of this
Declaration or any other agreement contemplated herein or of any duty or
obligation of the Indemnified Person at law or in equity or otherwise; and
(c) whenever in this Declaration an Indemnified Person is
permitted or required to make a decision:
(i) in its "discretion" or under a grant of
similar authority, the Indemnified Person shall be entitled to
consider such interests and factors as it desires, including
its own interests, and shall have no duty or obligation to
give any consideration to any interest of or factors affecting
the Trust or any other Person; or
(ii) in its "good faith" or under another
express standard, the Indemnified Person shall act under such
express standard and shall not be subject to any other or
different standard imposed by this Declaration or by
applicable law.
SECTION 4.3 Indemnification.
(a) (i) The Debenture Issuer shall indemnify, to the
full extent permitted by law, any Company Indemnified Person who was
or is a party or is threatened to be made a party to any threatened,
pending or completed action, suit or proceeding, whether civil,
criminal, administrative or investigative (other than an action by or
in the right of the Trust) by reason of the fact that he is or was a
Company Indemnified Person against expenses (including attorneys'
fees), judgments, fines and amounts paid in settlement actually and
reasonably incurred by him in connection with such action, suit or
proceeding if he acted in good faith and in a manner he reasonably
believed to be in or not opposed to the best interests of the Trust,
and, with respect to any criminal action or proceeding, had no
reasonable
10
<PAGE> 13
cause to believe his conduct was unlawful. The termination of any
action, suit or proceeding by judgment, order, settlement, conviction,
or upon a plea of nolo contendere or its equivalent, shall not, of
itself, create a presumption that the Company Indemnified Person did
not act in good faith and in a manner which he reasonably believed to
be in or not opposed to the best interests of the Trust, and, with
respect to any criminal action or proceeding, had reasonable cause to
believe that his conduct was unlawful.
(ii) The Debenture Issuer shall indemnify, to the full
extent permitted by law, any Company Indemnified Person who was or is
a party or is threatened to be made a party to any threatened, pending
or completed action or suit by or in the right of the Trust to procure
a judgment in its favor by reason of the fact that he is or was a
Company Indemnified Person against expenses (including attorneys'
fees) actually and reasonably incurred by him in connection with the
defense or settlement of such action or suit if he acted in good faith
and in a manner he reasonably believed to be in or not opposed to the
best interests of the Trust and except that no such indemnification
shall be made in respect of any claim, issue or matter as to which
such Company Indemnified Person shall have been adjudged to be liable
to the Trust unless and only to the extent that the Court of Chancery
of Delaware or the court in which such action or suit was brought
shall determine upon application that, despite the adjudication of
liability but in view of all the circumstances of the case, such
person is fairly and reasonably entitled to indemnity for such
expenses which such Court of Chancery or such other court shall deem
proper.
(iii) To the extent that a Company Indemnified Person shall
be successful on the merits or otherwise (including dismissal of an
action without prejudice or the settlement of an action without
admission of liability) in defense of any action, suit or proceeding
referred to in paragraphs (i) and (ii) of this Section 4.3(a), or in
defense of any claim, issue or matter therein, he shall be
indemnified, to the full extent permitted by law, against expenses
(including attorneys' fees) actually and reasonably incurred by him in
connection therewith.
(iv) Any indemnification under paragraphs (i) and (ii) of
this Section 4.3(a) (unless ordered by a court) shall be made by the
Debenture Issuer only as authorized in the specific case upon a
determination that indemnification of the Company Indemnified Person
is proper in the circumstances because he has met the applicable
standard of conduct set forth in paragraphs (i) and (ii). Such
determination shall be made (1) by the Regular Trustees by a majority
vote of a quorum consisting of such Regular Trustees who were not par-
11
<PAGE> 14
ties to such action, suit or proceeding, (2) if such a quorum is not
obtainable, or, even if obtainable, if a quorum of disinterested
Regular Trustees so directs, by independent legal counsel in a written
opinion, or (3) by the Common Security Holder of the Trust.
(v) Expenses (including attorneys' fees) incurred by a
Company Indemnified Person in defending a civil, criminal,
administrative or investigative action, suit or proceeding referred to
in paragraphs (i) and (ii) of this Section 4.3(a) shall be paid by the
Debenture Issuer in advance of the final disposition of such action,
suit or proceeding upon receipt of an undertaking by or on behalf of
such Company Indemnified Person to repay such amount if it shall
ultimately be determined that he is not entitled to be indemnified by
the Debenture Issuer as authorized in this Section 4.3(a).
Notwithstanding the foregoing, no advance shall be made by the
Debenture Issuer if a determination is reasonably and promptly made
(i) by the Regular Trustees by a majority vote of a quorum of
disinterested Regular Trustees, (ii) if such a quorum is not
obtainable, or, even if obtainable, if a quorum of disinterested
Regular Trustees so directs, by independent legal counsel in a written
opinion or (iii) the Common Security Holder of the Trust, that, based
upon the facts known to the Regular Trustees, counsel or the Common
Security Holder at the time such determination is made, such Company
Indemnified Person acted in bad faith or in a manner that such person
did not believe to be in or not opposed to the best interests of the
Trust, or, with respect to any criminal proceeding, that such Company
Indemnified Person believed or had reasonable cause to believe his
conduct was unlawful. In no event shall any advance be made in
instances where the Regular Trustees, independent legal counsel or
Common Security Holder reasonably determine that such person
deliberately breached his duty to the Trust or its Common or Preferred
Security Holders.
(vi) The indemnification and advancement of expenses
provided by, or granted pursuant to, the other paragraphs of this
Section 4.3(a) shall not be deemed exclusive of any other rights to
which those seeking indemnification and advancement of expenses may be
entitled under any agreement, vote of stockholders or disinterested
directors of the Debenture Issuer or Preferred Security Holders of the
Trust or otherwise, both as to action in his official capacity and as
to action in another capacity while holding such office. All rights
to indemnification under this Section 4.3(a) shall be deemed to be
provided by a contract between the Debenture Issuer and each Company
Indemnified Person who serves in such capacity at any time while this
Section 4.3(a) is in effect. Any repeal or modification of this
12
<PAGE> 15
Section 4.3(a) shall not affect any rights or obligations then
existing.
(vii) The Debenture Issuer or the Trust may purchase and
maintain insurance on behalf of any person who is or was a Company
Indemnified Person against any liability asserted against him and
incurred by him in any such capacity, or arising out of his status as
such, whether or not the Debenture Issuer would have the power to
indemnify him against such liability under the provisions of this
Section 4.3(a).
(viii) For purposes of this Section 4.3(a), references to
"the Trust" shall include, in addition to the resulting or surviving
entity, any constituent entity (including any constituent of a
constituent) absorbed in a consolidation or merger, so that any person
who is or was a director, trustee, officer or employee of such
constituent entity, or is or was serving at the request of such
constituent entity as a director, trustee, officer, employee or agent
of another entity, shall stand in the same position under the
provisions of this Section 4.3(a) with respect to the resulting or
surviving entity as he would have with respect to such constituent
entity if its separate existence had continued.
(ix) The indemnification and advancement of expenses
provided by, or granted pursuant to, this Section 4.3(a) shall, unless
otherwise provided when authorized or ratified, continue as to a
person who has ceased to be a Company Indemnified Person and shall
inure to the benefit of the heirs, executors and administrators of
such a person.
(b) The Debenture Issuer agrees to indemnify (i) the Delaware
Trustee, (ii) any Affiliate of the Delaware Trustee, and (iii) any officers,
directors, shareholders, members, partners, employees, representatives,
nominees, custodians or agents of the Delaware Trustee (each of the Persons in
(i) through (iii) being referred to as a "Fiduciary Indemnified Person") for,
and to hold each Fiduciary Indemnified Person harmless against, any loss,
liability or expense incurred without negligence or bad faith on its part,
arising out of or in connection with the acceptance or administration of the
trust or trusts hereunder, including the costs and expenses (including
reasonable legal fees and expenses) of defending itself against, or
investigating, any claim or liability in connection with the exercise or
performance of any of its powers or duties hereunder. The obligation to
indemnify as set forth in this Section 4.3(b) shall survive the termination of
this Declaration.
13
<PAGE> 16
SECTION 4.4 Outside Businesses.
Any Covered Person, the Sponsor and the Delaware Trustee may
engage in or possess an interest in other business ventures of any nature or
description, independently or with others, similar or dissimilar to the
business of the Trust, and the Trust and the holders of Securities shall have
no rights by virtue of this Declaration in and to such independent ventures or
the income or profits derived therefrom and the pursuit of any such venture,
even if competitive with the business of the Trust, shall not be deemed
wrongful or improper. No Covered Person, the Sponsor or the Delaware Trustee
shall be obligated to present any particular investment or other opportunity to
the Trust even if such opportunity is of a character that, if presented to the
Trust, could be taken by the Trust, and any Covered Person, the Sponsor and the
Delaware Trustee shall have the right to take for its own account (individually
or as a partner or fiduciary) or to recommend to others any such particular
investment or other opportunity. Any Covered Person and the Delaware Trustee
may engage or be interested in any financial or other transaction with the
Sponsor or any Affiliate of the Sponsor, or may act as depositary for, trustee
or agent for or may act on any committee or body of holders of, securities or
other obligations of the Sponsor or its Affiliates.
ARTICLE V
AMENDMENTS, TERMINATION, MISCELLANEOUS
SECTION 5.1 Amendments.
At any time before the issue of any Securities, this
Declaration may be amended by, and only by, a written instrument executed by
all of the Regular Trustees and the Sponsor.
SECTION 5.2 Termination of Trust.
(a) The Trust shall terminate and be of no further force
or effect:
(i) upon the bankruptcy of the Sponsor;
(ii) upon the filing of a certificate of
dissolution or its equivalent with respect to the Sponsor or
the revocation of the Sponsor's charter or of the Trust's
certificate of trust;
(iii) upon the entry of a decree of judicial
dissolution of the Sponsor, or the Trust; and
14
<PAGE> 17
(iv) before the issue of any Securities, with
the consent of all of the Regular Trustees and the Sponsor;
and
(b) as soon as is practicable after the occurrence of an
event referred to in Section 5.2(a), the Trustees shall file a certificate of
cancellation with the Secretary of State of the State of Delaware.
SECTION 5.3 Governing Law.
This Declaration and the rights of the parties hereunder shall
be governed by and interpreted in accordance with the laws of the State of
Delaware and all rights and remedies shall be governed by such laws without
regard to principles of conflict of laws.
SECTION 5.4 Headings.
Headings contained in this Declaration are inserted for
convenience of reference only and do not affect the interpretation of this
Declaration or any provision hereof.
SECTION 5.5 Successors and Assigns.
Whenever in this Declaration any of the parties hereto is
named or referred to, the successors and assigns of such party shall be deemed
to be included, and all covenants and agreements in this Declaration by the
Sponsor and the Trustees shall bind and inure to the benefit of their
respective successors and assigns, whether so expressed.
SECTION 5.6 Partial Enforceability.
If any provision of this Declaration, or the application of
such provision to any Person or circumstance, shall be held invalid, the
remainder of this Declaration, or the application of such provision to persons
or circumstances other than those to which it is held invalid, shall not be
affected thereby.
SECTION 5.7 Counterparts.
This Declaration may contain more than one counterpart of the
signature page and this Declaration may be executed by the affixing of the
signature of each of the Trustees to one of such counterpart signature pages.
All of such counterpart signature pages shall be read as though one, and they
shall have the same force and effect as though all of the signers had signed a
single signature page.
15
<PAGE> 18
IN WITNESS WHEREOF, the undersigned has caused these presents
to be executed as of the day and year first above written.
/s/ T.C. MORRIS
----------------------------
Name: T.C. Morris
Title: Regular Trustee
/s/ JOHN A. CARRIG
----------------------------
Name: John A. Carrig
Title: Regular Trustee
/s/ L.L. MCCALL
----------------------------
Name: L.L. McCall
Title: Regular Trustee
THE BANK OF NEW YORK (DELAWARE), as
Delaware Trustee
By: /s/ WALTER DOUGLAS
-------------------------
Name: Walter Douglas
Title: Vice President
PHILLIPS PETROLEUM COMPANY, as Sponsor
By: /s/ J. BRYAN WHITWORTH
-------------------------
Name: J. Bryan Whitworth
Title: Senior Vice President
and General Counsel
<PAGE> 19
EXHIBIT A
CERTIFICATE OF TRUST
The undersigned, the trustees of Phillips 66 Capital III,
desiring to form a business trust pursuant to Delaware Business Trust Act, 12
Del. C. Section 3810, hereby certify as follows:
(a) The name of the business trust being formed hereby
(the "Trust") is "Phillips 66 Capital III."
(b) The name and business address of the trustee of the
Trust which has its principal place of business in
the State of Delaware is as follows:
The Bank of New York (Delaware)
White Clay Center, Route 273
Newark, Delaware 19711
(c) This Certificate of Trust shall be effective as of
the date of filing.
Dated: February 23, 1996
-----------------------------------
Name: T.C. Morris
Title: Trustee
-----------------------------------
Name: John A. Carrig
Title: Trustee
-----------------------------------
Name: L.L. McCall
Title: Trustee
THE BANK OF NEW YORK (DELAWARE), as
Trustee
By:
--------------------------------
Name: Walter Douglas
Title: Vice President
17
<PAGE> 1
Exhibit 4-H
================================
DECLARATION OF TRUST
Phillips 66 Capital IV
Dated as of February 23, 1996
================================
<PAGE> 2
TABLE OF CONTENTS
<TABLE>
<S> <C> <C>
Page
ARTICLE I
DEFINITIONS
SECTION 1.1 Definitions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1
ARTICLE II
ORGANIZATION
SECTION 2.1 Name . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4
SECTION 2.2 Office . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4
SECTION 2.3 Purpose . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4
SECTION 2.4 Authority . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4
SECTION 2.5 Title to Property of the Trust . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4
SECTION 2.6 Powers of the Trustees . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5
SECTION 2.7 Filing of Certificate of Trust . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6
SECTION 2.8 Duration of Trust. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6
SECTION 2.9 Responsibilities of the Sponsor . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6
Section 2.10 Declaration Binding on Securities Holders . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7
ARTICLE III
TRUSTEES
SECTION 3.1 Trustees . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7
SECTION 3.2 Regular Trustees . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7
SECTION 3.3 Delaware Trustee . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8
SECTION 3.4 Property Trustee. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8
SECTION 3.5 Not Responsible for Recitals or Sufficiency of Declaration. . . . . . . . . . . . . . . . . . . . . 8
ARTICLE IV
LIMITATION OF LIABILITY OF
HOLDERS OF SECURITIES, TRUSTEES OR OTHERS
SECTION 4.1 Exculpation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9
SECTION 4.2 Fiduciary Duty . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9
SECTION 4.3 Indemnification . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10
SECTION 4.4 Outside Businesses . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 14
ARTICLE V
AMENDMENTS, TERMINATION, MISCELLANEOUS
SECTION 5.1 Amendments . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 14
SECTION 5.2 Termination of Trust . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 14
SECTION 5.3 Governing Law . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 15
SECTION 5.4 Headings . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 15
SECTION 5.5 Successors and Assigns . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 15
SECTION 5.6 Partial Enforceability . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 15
SECTION 5.7 Counterparts . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 15
</TABLE>
i
<PAGE> 3
DECLARATION OF TRUST
OF
Phillips 66 Capital IV
February 23, 1996
DECLARATION OF TRUST ("Declaration") dated and effective as of
February 23, 1996 by the Trustees (as defined herein), the Sponsor (as defined
herein), and by the holders, from time to time, of undivided beneficial
interests in the Trust to be issued pursuant to this Declaration;
WHEREAS, the Trustees and the Sponsor desire to establish a
trust (the "Trust") pursuant to the Delaware Business Trust Act for the sole
purpose of issuing and selling certain securities representing undivided
beneficial interests in the assets of the Trust and investing the proceeds
thereof in certain Debentures of the Debenture Issuer; and
NOW, THEREFORE, it being the intention of the parties hereto
that the Trust constitute a business trust under the Business Trust Act and
that this Declaration constitute the governing instrument of such business
trust, the Trustees declare that all assets contributed to the Trust will be
held in trust for the exclusive benefit of the holders, from time to time, of
the securities representing undivided beneficial interests in the assets of the
Trust issued hereunder, subject to the provisions of this Declaration.
ARTICLE I
DEFINITIONS
SECTION 1.1 Definitions.
Unless the context otherwise requires:
(a) Capitalized terms used in this Declaration but not defined in
the preamble above have the respective meanings assigned to
them in this Section 1.1;
(b) a term defined anywhere in this Declaration has the same
meaning throughout;
(c) all references to "the Declaration" or "this Declaration" are
to this Declaration of Trust as modified, supplemented or
amended from time to time;
(d) all references in this Declaration to Articles and Sections
are to Articles and Sections of this Declaration unless
otherwise specified; and
<PAGE> 4
(e) a reference to the singular includes the plural and vice
versa.
"Affiliate" has the same meaning as given to that term in Rule
405 of the Securities Act or any successor rule thereunder.
"Business Day" means any day other than a day on which banking
institutions in New York, New York are authorized or required by law to close.
"Business Trust Act" means Chapter 38 of Title 12 of the
Delaware Code, 12 Del. Code Section 3801 et seq., as it may be amended from
time to time, or any successor legislation.
"Commission" means the Securities and Exchange Commission.
"Common Security" means a security representing an undivided
beneficial interest in the assets of the Trust with such terms as may be set
out in any amendment to this Declaration.
"Company Indemnified Person" means (a) any Regular Trustee;
(b) any Affiliate of any Regular Trustee; (c) any officers, directors,
shareholders, members, partners, employees, representatives or agents of any
Regular Trustee; or (d) any employee or agent of the Trust or its Affiliates.
"Covered Person" means (a) any officer, director, shareholder,
partner, member, representative, employee or agent of (i) the Trust or (ii) the
Trust's Affiliates and (b) any holder of Securities.
"Debenture Issuer" means the Parent in its capacity as the
issuer of the Debentures under the Indenture.
"Debentures" means the series of Debentures to be issued by
the Debenture Issuer and acquired by the Trust.
"Debenture Trustee" means [The Bank of New York, a New York
banking corporation], as trustee under the Indenture until a successor is
appointed thereunder, and thereafter means such successor trustee.
"Delaware Trustee" has the meaning set forth in Section 3.1.
"Exchange Act" means the Securities Exchange Act of 1934, as
amended from time to time or any successor legislation.
2
<PAGE> 5
"Fiduciary Indemnified Person" has the meaning set forth in
Section 4.3(b).
"Indemnified Person" means a Company Indemnified Person or a
Fiduciary Indemnified Person.
"Indenture" means the indenture to be entered into between the
Parent and the Debenture Trustee and any indenture supplemental thereto
pursuant to which the Debentures are to be issued.
"Parent" means Phillips Petroleum Company, a Delaware
corporation or any successor entity in a merger.
"Person" means a legal person, including any individual,
corporation, estate, partnership, joint venture, association, joint stock
company, limited liability company, trust, unincorporated association, or
government or any agency or political subdivision thereof, or any other entity
of whatever nature.
"Preferred Security" means a security representing an
undivided beneficial interest in the assets of the Trust with such terms as may
be set out in any amendment to this Declaration.
"Regular Trustee" means any Trustee other than the Delaware
Trustee and the Institutional Trustee (as hereinafter defined).
"Securities" means the Common Securities and the Preferred
Securities.
"Securities Act" means the Securities Act of 1933, as amended
from time to time, or any successor legislation.
"Sponsor" means the Parent in its capacity as sponsor of the
Trust.
"Trustee" or "Trustees" means each Person who has signed this
Declaration as a trustee, so long as such Person shall continue in office in
accordance with the terms hereof, and all other Persons who may from time to
time be duly appointed, qualified and serving as Trustees in accordance with
the provisions hereof, and references herein to a Trustee or the Trustees shall
refer to such Person or Persons solely in their capacity as trustees hereunder.
3
<PAGE> 6
ARTICLE II
ORGANIZATION
SECTION 2.1 Name.
The Trust created by this Declaration is named "Phillips 66
Capital IV." The Trust's activities may be conducted under the name of the
Trust or any other name deemed advisable by the Regular Trustees.
SECTION 2.2 Office.
The address of the principal office of the Trust is c/o
Phillips Petroleum Company, Phillips Building, Bartlesville, Oklahoma 74004.
At any time, the Regular Trustees may designate another principal office.
SECTION 2.3 Purpose.
The exclusive purposes and functions of the Trust are (a) to
issue and sell Securities and use the proceeds from such sale to acquire the
Debentures, and (b) except as otherwise limited herein, to engage in only those
other activities necessary, or incidental thereto. The Trust shall not borrow
money, issue debt or reinvest proceeds derived from investments, pledge any of
its assets, or otherwise undertake (or permit to be undertaken) any activity
that would cause the Trust not to be classified for United States federal
income tax purposes as a grantor trust.
SECTION 2.4 Authority.
Subject to the limitations provided in this Declaration, the
Regular Trustees shall have exclusive and complete authority to carry out the
purposes of the Trust. An action taken by the Regular Trustees in accordance
with their powers shall constitute the act of and serve to bind the Trust. In
dealing with the Regular Trustees acting on behalf of the Trust, no person
shall be required to inquire into the authority of the Regular Trustees to bind
the Trust. Persons dealing with the Trust are entitled to rely conclusively on
the power and authority of the Regular Trustees as set forth in this
Declaration.
SECTION 2.5 Title to Property of the Trust.
Legal title to all assets of the Trust shall be vested in the
Trust.
4
<PAGE> 7
SECTION 2.6 Powers of the Trustees.
The Regular Trustees shall have the exclusive power and
authority to cause the Trust to engage in the following activities:
(a) to issue and sell the Preferred Securities and the
Common Securities in accordance with this Declaration; provided,
however, that the Trust may issue no more than one series of Preferred
Securities and no more than one series of Common Securities, and,
provided further, that there shall be no interests in the Trust other
than the Securities and the issuance of the Securities shall be
limited to a one-time, simultaneous issuance of both Preferred
Securities and Common Securities;
(b) in connection with the issue and sale of the
Preferred Securities, at the direction of the Sponsor, to:
(i) execute and file with the Commission a
registration statement on Form S-3 prepared by the Sponsor,
including any amendments thereto in relation to the Preferred
Securities;
(ii) execute and file any documents prepared by
the Sponsor, or take any acts as determined by the Sponsor to
be necessary in order to qualify or register all or part of
the Preferred Securities in any State in which the Sponsor has
determined to qualify or register such Preferred Securities
for sale;
(iii) execute and file an application, prepared
by the Sponsor, to the New York Stock Exchange or any other
national stock exchange or the Nasdaq Stock Market's National
Market for listing upon notice of issuance of any Preferred
Securities;
(iv) execute and file with the Commission a
registration statement on Form 8-A, including any amendments
thereto, prepared by the Sponsor relating to the registration
of the Preferred Securities under Section 12(b) of the
Exchange Act; and
(v) execute and enter into an underwriting
agreement and pricing agreement providing for the sale of the
Preferred Securities;
(c) to employ or otherwise engage employees and agents
(who may be designated as officers with titles) and managers,
contractors, advisors, and consultants and provide for reasonable
compensation for such services;
5
<PAGE> 8
(d) to incur expenses which are necessary or incidental
to carry out any of the purposes of this Declaration; and
(e) to execute all documents or instruments, perform all
duties and powers, and do all things for and on behalf of the Trust in
all matters necessary or incidental to the foregoing.
SECTION 2.7 Filing of Certificate of Trust.
On or after the date of execution of this Declaration, the
Trustees shall cause the filing of the Certificate of Trust for the Trust in
the form attached hereto as Exhibit A with the Secretary of State of the State
of Delaware.
SECTION 2.8 Duration of Trust.
The Trust, absent termination pursuant to the provisions of
Section 5.2, shall have existence for fifty-five (55) years from the date
hereof.
SECTION 2.9 Responsibilities of the Sponsor.
In connection with the issue and sale of the Preferred
Securities, the Sponsor shall have the exclusive right and responsibility to
engage in the following activities:
(a) to prepare for filing by the Trust with the
Commission a registration statement on Form S-3 in relation to the
Preferred Securities, including any amendments thereto;
(b) to determine the States in which to take appropriate
action to qualify or register for sale all or part of the Preferred
Securities and to do any and all such acts, other than actions which
must be taken by the Trust, and advise the Trust of actions it must
take, and prepare for execution and filing any documents to be
executed and filed by the Trust, as the Sponsor deems necessary or
advisable in order to comply with the applicable laws of any such
States;
(c) to prepare for filing by the Trust an application to
the New York Stock Exchange or any other national stock exchange or
the Nasdaq National Market for listing upon notice of issuance of any
Preferred Securities;
(d) to prepare for filing by the Trust with the
Commission a registration statement on Form 8-A relating to the
registration of the class of Preferred Securities under Section 12(b)
of the Exchange Act, including any amendments thereto; and
6
<PAGE> 9
(e) to negotiate the terms of an underwriting agreement
and pricing agreement providing for the sale of the Preferred
Securities.
Section 2.10 Declaration Binding on Securities Holders.
Every Person by virtue of having become a holder of a Security
or any interest therein in accordance with the terms of this Declaration, shall
be deemed to have expressly assented and agreed to the terms of, and shall be
bound by, this Declaration.
ARTICLE III
TRUSTEES
SECTION 3.1 Trustees.
The number of Trustees initially shall be four (4), and
thereafter the number of Trustees shall be such number as shall be fixed from
time to time by a written instrument signed by the Sponsor. The Sponsor is
entitled to appoint or remove without cause any Trustee at any time; provided,
however, that the number of Trustees shall in no event be less than two (2);
provided further that one Trustee, in the case of a natural person, shall be a
person who is a resident of the State of Delaware or that, if not a natural
person, is an entity which has its principal place of business in the State of
Delaware (the "Delaware Trustee"); provided further that there shall be at
least one trustee who is an employee or officer of, or is affiliated with the
Parent (a "Regular Trustee").
SECTION 3.2 Regular Trustees.
The initial Regular Trustees shall be:
T.C. Morris
John A. Carrig
L.L. McCall
(a) Except as expressly set forth in this Declaration, any
power of the Regular Trustees may be exercised by, or with the consent of, any
one such Regular Trustee.
(b) Unless otherwise determined by the Regular Trustees,
and except as otherwise required by the Business Trust Act, any Regular Trustee
is authorized to execute on behalf of the Trust any documents which the Regular
Trustees have the power and authority to cause the Trust to execute pursuant to
Section 2.6 provided, that, the registration statement referred to in Section
2.6(b)(i), including any amendments thereto, shall be signed by a majority of
the Regular Trustees; and
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<PAGE> 10
(c) a Regular Trustee may, by power of attorney
consistent with applicable law, delegate to any other natural person over the
age of 21 his or her power for the purposes of signing any documents which the
Regular Trustees have power and authority to cause the Trust to execute
pursuant to Section 2.6.
SECTION 3.3 Delaware Trustee.
The initial Delaware Trustee shall be:
The Bank of New York (Delaware)
Notwithstanding any other provision of this Declaration, the
Delaware Trustee shall not be entitled to exercise any of the powers, nor shall
the Delaware Trustee have any of the duties and responsibilities of the Regular
Trustees described in this Declaration. The Delaware Trustee shall be a
Trustee for the sole and limited purpose of fulfilling the requirements of
Section 3807 of the Business Trust Act. Notwithstanding anything herein to the
contrary, the Delaware Trustee shall not be liable for the acts or omissions to
act of the Trust or of the Regular Trustees except such acts as the Delaware
Trustee is expressly obligated or authorized to undertake under this
Declaration or the Business Trust Act and except for the gross negligence or
willful misconduct of the Delaware Trustee.
SECTION 3.4 Property Trustee.
Prior to the issuance of the Preferred Securities and Common
Securities, the Sponsor shall appoint another trustee (the "Institutional
Trustee") meeting the requirements of an eligible trustee of the Trust
Indenture Act of 1939, as amended, by the execution of an amendment to this
Declaration executed by the Regular Trustees, the Sponsor, the Institutional
Trustee and the Delaware Trustee.
SECTION 3.5 Not Responsible for Recitals or Sufficiency of Declaration.
The recitals contained in this Declaration shall be taken as
the statements of the Sponsor, and the Trustees do not assume any
responsibility for their correctness. The Trustees make no representations as
to the value or condition of the property of the Trust or any part thereof.
The Trustees make no representations as to the validity or sufficiency of this
Declaration.
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<PAGE> 11
ARTICLE IV
LIMITATION OF LIABILITY OF
HOLDERS OF SECURITIES, TRUSTEES OR OTHERS
SECTION 4.1 Exculpation.
(a) No Indemnified Person shall be liable, responsible or
accountable in damages or otherwise to the Trust or any Covered Person for any
loss, damage or claim incurred by reason of any act or omission performed or
omitted by such Indemnified Person in good faith on behalf of the Trust and in
a manner such Indemnified Person reasonably believed to be within the scope of
the authority conferred on such Indemnified Person by this Declaration or by
law, except that an Indemnified Person shall be liable for any such loss,
damage or claim incurred by reason of such Indemnified Person's negligence or
willful misconduct with respect to such acts or omissions; and
(b) an Indemnified Person shall be fully protected in
relying in good faith upon the records of the Trust and upon such information,
opinions, reports or statements presented to the Trust by any Person as to
matters the Indemnified Person reasonably believes are within such other
Person's professional or expert competence and who has been selected with
reasonable care by or on behalf of the Trust, including information, opinions,
reports or statements as to the value and amount of the assets, liabilities,
profits, losses, or any other facts pertinent to the existence and amount of
assets from which distributions to holders of Securities might properly be
paid.
SECTION 4.2 Fiduciary Duty.
(a) To the extent that, at law or in equity, an
Indemnified Person has duties (including fiduciary duties) and liabilities
relating thereto to the Trust or to any other Covered Person, an Indemnified
Person acting under this Declaration shall not be liable to the Trust or to any
other Covered Person for its good faith reliance on the provisions of this
Declaration. The provisions of this Declaration, to the extent that they
restrict the duties and liabilities of an Indemnified Person otherwise existing
at law or in equity, are agreed by the parties hereto to replace such other
duties and liabilities of such Indemnified Person;
(b) unless otherwise expressly provided herein:
(i) whenever a conflict of interest exists or
arises between Covered Persons; or
9
<PAGE> 12
(ii) whenever this Declaration or any other
agreement contemplated herein or therein provides that an
Indemnified Person shall act in a manner that is, or provides
terms that are, fair and reasonable to the Trust or any holder
of Securities,
the Indemnified Person shall resolve such conflict of interest, take such
action or provide such terms, considering in each case the relative interest of
each party (including its own interest) to such conflict, agreement,
transaction or situation and the benefits and burdens relating to such
interests, any customary or accepted industry practices, and any applicable
generally accepted accounting practices or principles. In the absence of bad
faith by the Indemnified Person, the resolution, action or term so made, taken
or provided by the Indemnified Person shall not constitute a breach of this
Declaration or any other agreement contemplated herein or of any duty or
obligation of the Indemnified Person at law or in equity or otherwise; and
(c) whenever in this Declaration an Indemnified Person is
permitted or required to make a decision:
(i) in its "discretion" or under a grant of
similar authority, the Indemnified Person shall be entitled to
consider such interests and factors as it desires, including
its own interests, and shall have no duty or obligation to
give any consideration to any interest of or factors affecting
the Trust or any other Person; or
(ii) in its "good faith" or under another
express standard, the Indemnified Person shall act under such
express standard and shall not be subject to any other or
different standard imposed by this Declaration or by
applicable law.
SECTION 4.3 Indemnification.
(a) (i) The Debenture Issuer shall indemnify, to the
full extent permitted by law, any Company Indemnified Person who was
or is a party or is threatened to be made a party to any threatened,
pending or completed action, suit or proceeding, whether civil,
criminal, administrative or investigative (other than an action by or
in the right of the Trust) by reason of the fact that he is or was a
Company Indemnified Person against expenses (including attorneys'
fees), judgments, fines and amounts paid in settlement actually and
reasonably incurred by him in connection with such action, suit or
proceeding if he acted in good faith and in a manner he reasonably
believed to be in or not opposed to the best interests of the Trust,
and, with respect to any criminal action or proceeding, had no
reasonable
10
<PAGE> 13
cause to believe his conduct was unlawful. The termination of any
action, suit or proceeding by judgment, order, settlement, conviction,
or upon a plea of nolo contendere or its equivalent, shall not, of
itself, create a presumption that the Company Indemnified Person did
not act in good faith and in a manner which he reasonably believed to
be in or not opposed to the best interests of the Trust, and, with
respect to any criminal action or proceeding, had reasonable cause to
believe that his conduct was unlawful.
(ii) The Debenture Issuer shall indemnify, to the full
extent permitted by law, any Company Indemnified Person who was or is
a party or is threatened to be made a party to any threatened, pending
or completed action or suit by or in the right of the Trust to procure
a judgment in its favor by reason of the fact that he is or was a
Company Indemnified Person against expenses (including attorneys'
fees) actually and reasonably incurred by him in connection with the
defense or settlement of such action or suit if he acted in good faith
and in a manner he reasonably believed to be in or not opposed to the
best interests of the Trust and except that no such indemnification
shall be made in respect of any claim, issue or matter as to which
such Company Indemnified Person shall have been adjudged to be liable
to the Trust unless and only to the extent that the Court of Chancery
of Delaware or the court in which such action or suit was brought
shall determine upon application that, despite the adjudication of
liability but in view of all the circumstances of the case, such
person is fairly and reasonably entitled to indemnity for such
expenses which such Court of Chancery or such other court shall deem
proper.
(iii) To the extent that a Company Indemnified Person shall
be successful on the merits or otherwise (including dismissal of an
action without prejudice or the settlement of an action without
admission of liability) in defense of any action, suit or proceeding
referred to in paragraphs (i) and (ii) of this Section 4.3(a), or in
defense of any claim, issue or matter therein, he shall be
indemnified, to the full extent permitted by law, against expenses
(including attorneys' fees) actually and reasonably incurred by him in
connection therewith.
(iv) Any indemnification under paragraphs (i) and (ii) of
this Section 4.3(a) (unless ordered by a court) shall be made by the
Debenture Issuer only as authorized in the specific case upon a
determination that indemnification of the Company Indemnified Person
is proper in the circumstances because he has met the applicable
standard of conduct set forth in paragraphs (i) and (ii). Such
determination shall be made (1) by the Regular Trustees by a majority
vote of a quorum consisting of such Regular Trustees who were not par-
11
<PAGE> 14
ties to such action, suit or proceeding, (2) if such a quorum is not
obtainable, or, even if obtainable, if a quorum of disinterested
Regular Trustees so directs, by independent legal counsel in a written
opinion, or (3) by the Common Security Holder of the Trust.
(v) Expenses (including attorneys' fees) incurred by a
Company Indemnified Person in defending a civil, criminal,
administrative or investigative action, suit or proceeding referred to
in paragraphs (i) and (ii) of this Section 4.3(a) shall be paid by the
Debenture Issuer in advance of the final disposition of such action,
suit or proceeding upon receipt of an undertaking by or on behalf of
such Company Indemnified Person to repay such amount if it shall
ultimately be determined that he is not entitled to be indemnified by
the Debenture Issuer as authorized in this Section 4.3(a).
Notwithstanding the foregoing, no advance shall be made by the
Debenture Issuer if a determination is reasonably and promptly made
(i) by the Regular Trustees by a majority vote of a quorum of
disinterested Regular Trustees, (ii) if such a quorum is not
obtainable, or, even if obtainable, if a quorum of disinterested
Regular Trustees so directs, by independent legal counsel in a written
opinion or (iii) the Common Security Holder of the Trust, that, based
upon the facts known to the Regular Trustees, counsel or the Common
Security Holder at the time such determination is made, such Company
Indemnified Person acted in bad faith or in a manner that such person
did not believe to be in or not opposed to the best interests of the
Trust, or, with respect to any criminal proceeding, that such Company
Indemnified Person believed or had reasonable cause to believe his
conduct was unlawful. In no event shall any advance be made in
instances where the Regular Trustees, independent legal counsel or
Common Security Holder reasonably determine that such person
deliberately breached his duty to the Trust or its Common or Preferred
Security Holders.
(vi) The indemnification and advancement of expenses
provided by, or granted pursuant to, the other paragraphs of this
Section 4.3(a) shall not be deemed exclusive of any other rights to
which those seeking indemnification and advancement of expenses may be
entitled under any agreement, vote of stockholders or disinterested
directors of the Debenture Issuer or Preferred Security Holders of the
Trust or otherwise, both as to action in his official capacity and as
to action in another capacity while holding such office. All rights
to indemnification under this Section 4.3(a) shall be deemed to be
provided by a contract between the Debenture Issuer and each Company
Indemnified Person who serves in such capacity at any time while this
Section 4.3(a) is in effect. Any repeal or modification of this
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<PAGE> 15
Section 4.3(a) shall not affect any rights or obligations then
existing.
(vii) The Debenture Issuer or the Trust may purchase and
maintain insurance on behalf of any person who is or was a Company
Indemnified Person against any liability asserted against him and
incurred by him in any such capacity, or arising out of his status as
such, whether or not the Debenture Issuer would have the power to
indemnify him against such liability under the provisions of this
Section 4.3(a).
(viii) For purposes of this Section 4.3(a), references to
"the Trust" shall include, in addition to the resulting or surviving
entity, any constituent entity (including any constituent of a
constituent) absorbed in a consolidation or merger, so that any person
who is or was a director, trustee, officer or employee of such
constituent entity, or is or was serving at the request of such
constituent entity as a director, trustee, officer, employee or agent
of another entity, shall stand in the same position under the
provisions of this Section 4.3(a) with respect to the resulting or
surviving entity as he would have with respect to such constituent
entity if its separate existence had continued.
(ix) The indemnification and advancement of expenses
provided by, or granted pursuant to, this Section 4.3(a) shall, unless
otherwise provided when authorized or ratified, continue as to a
person who has ceased to be a Company Indemnified Person and shall
inure to the benefit of the heirs, executors and administrators of
such a person.
(b) The Debenture Issuer agrees to indemnify (i) the Delaware
Trustee, (ii) any Affiliate of the Delaware Trustee, and (iii) any officers,
directors, shareholders, members, partners, employees, representatives,
nominees, custodians or agents of the Delaware Trustee (each of the Persons in
(i) through (iii) being referred to as a "Fiduciary Indemnified Person") for,
and to hold each Fiduciary Indemnified Person harmless against, any loss,
liability or expense incurred without negligence or bad faith on its part,
arising out of or in connection with the acceptance or administration of the
trust or trusts hereunder, including the costs and expenses (including
reasonable legal fees and expenses) of defending itself against, or
investigating, any claim or liability in connection with the exercise or
performance of any of its powers or duties hereunder. The obligation to
indemnify as set forth in this Section 4.3(b) shall survive the termination of
this Declaration.
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<PAGE> 16
SECTION 4.4 Outside Businesses.
Any Covered Person, the Sponsor and the Delaware Trustee may
engage in or possess an interest in other business ventures of any nature or
description, independently or with others, similar or dissimilar to the
business of the Trust, and the Trust and the holders of Securities shall have
no rights by virtue of this Declaration in and to such independent ventures or
the income or profits derived therefrom and the pursuit of any such venture,
even if competitive with the business of the Trust, shall not be deemed
wrongful or improper. No Covered Person, the Sponsor or the Delaware Trustee
shall be obligated to present any particular investment or other opportunity to
the Trust even if such opportunity is of a character that, if presented to the
Trust, could be taken by the Trust, and any Covered Person, the Sponsor and the
Delaware Trustee shall have the right to take for its own account (individually
or as a partner or fiduciary) or to recommend to others any such particular
investment or other opportunity. Any Covered Person and the Delaware Trustee
may engage or be interested in any financial or other transaction with the
Sponsor or any Affiliate of the Sponsor, or may act as depositary for, trustee
or agent for or may act on any committee or body of holders of, securities or
other obligations of the Sponsor or its Affiliates.
ARTICLE V
AMENDMENTS, TERMINATION, MISCELLANEOUS
SECTION 5.1 Amendments.
At any time before the issue of any Securities, this
Declaration may be amended by, and only by, a written instrument executed by
all of the Regular Trustees and the Sponsor.
SECTION 5.2 Termination of Trust.
(a) The Trust shall terminate and be of no further force
or effect:
(i) upon the bankruptcy of the Sponsor;
(ii) upon the filing of a certificate of
dissolution or its equivalent with respect to the Sponsor or
the revocation of the Sponsor's charter or of the Trust's
certificate of trust;
(iii) upon the entry of a decree of judicial
dissolution of the Sponsor, or the Trust; and
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<PAGE> 17
(iv) before the issue of any Securities, with
the consent of all of the Regular Trustees and the Sponsor;
and
(b) as soon as is practicable after the occurrence of an
event referred to in Section 5.2(a), the Trustees shall file a certificate of
cancellation with the Secretary of State of the State of Delaware.
SECTION 5.3 Governing Law.
This Declaration and the rights of the parties hereunder shall
be governed by and interpreted in accordance with the laws of the State of
Delaware and all rights and remedies shall be governed by such laws without
regard to principles of conflict of laws.
SECTION 5.4 Headings.
Headings contained in this Declaration are inserted for
convenience of reference only and do not affect the interpretation of this
Declaration or any provision hereof.
SECTION 5.5 Successors and Assigns.
Whenever in this Declaration any of the parties hereto is
named or referred to, the successors and assigns of such party shall be deemed
to be included, and all covenants and agreements in this Declaration by the
Sponsor and the Trustees shall bind and inure to the benefit of their
respective successors and assigns, whether so expressed.
SECTION 5.6 Partial Enforceability.
If any provision of this Declaration, or the application of
such provision to any Person or circumstance, shall be held invalid, the
remainder of this Declaration, or the application of such provision to persons
or circumstances other than those to which it is held invalid, shall not be
affected thereby.
SECTION 5.7 Counterparts.
This Declaration may contain more than one counterpart of the
signature page and this Declaration may be executed by the affixing of the
signature of each of the Trustees to one of such counterpart signature pages.
All of such counterpart signature pages shall be read as though one, and they
shall have the same force and effect as though all of the signers had signed a
single signature page.
15
<PAGE> 18
IN WITNESS WHEREOF, the undersigned has caused these presents
to be executed as of the day and year first above written.
/s/ T.C. MORRIS
----------------------------
Name: T.C. Morris
Title: Regular Trustee
/s/ JOHN A. CARRIG
----------------------------
Name: John A. Carrig
Title: Regular Trustee
/s/ L.L. MCCALL
----------------------------
Name: L.L. McCall
Title: Regular Trustee
THE BANK OF NEW YORK (DELAWARE), as
Delaware Trustee
By: /s/ WALTER DOUGLAS
-------------------------
Name: Walter Douglas
Title: Vice President
PHILLIPS PETROLEUM COMPANY, as Sponsor
By: /s/ J. BRYAN WHITWORTH
-------------------------
Name: J. Bryan Whitworth
Title: Senior Vice President
and General Counsel
<PAGE> 19
EXHIBIT A
CERTIFICATE OF TRUST
The undersigned, the trustees of Phillips 66 Capital IV,
desiring to form a business trust pursuant to Delaware Business Trust Act, 12
Del. C. Section 3810, hereby certify as follows:
(a) The name of the business trust being formed hereby
(the "Trust") is "Phillips 66 Capital IV."
(b) The name and business address of the trustee of the
Trust which has its principal place of business in
the State of Delaware is as follows:
The Bank of New York (Delaware)
White Clay Center, Route 273
Newark, Delaware 19711
(c) This Certificate of Trust shall be effective as of
the date of filing.
Dated: February 23, 1996
-----------------------------------
Name: T.C. Morris
Title: Trustee
-----------------------------------
Name: John A. Carrig
Title: Trustee
-----------------------------------
Name: L.L. McCall
Title: Trustee
THE BANK OF NEW YORK (DELAWARE), as Trustee
By:
--------------------------------
Name: Walter Douglas
Title: Vice President
17
<PAGE> 1
Exhibit 12
PHILLIPS PETROLEUM COMPANY AND CONSOLIDATED SUBSIDIARIES
TOTAL ENTERPRISE
Computation of Ratio of Earnings to Fixed Charges
<TABLE>
<CAPTION>
Millions of Dollars
--------------------------------------
Years Ended December 31
--------------------------------------
1995 1994 1993 1992 1991
--------------------------------------
(Unaudited)
<S> <C> <C> <C> <C> <C>
EARNINGS AVAILABLE FOR FIXED CHARGES
Income before income taxes,
extraordinary items and cumulative
effect of changes in accounting
principles $1,064 852 538 511 451
Distributions in excess of (less than)
equity in earnings of less-than-
fifty-percent-owned companies (1) 2 9 (3) 1
Fixed charges, excluding
capitalized interest and the
portion of the preferred dividend
requirements of a subsidiary not
previously deducted from income* 364 340 363 442 631
- -----------------------------------------------------------------------------
$1,427 1,194 910 950 1,083
=============================================================================
Fixed Charges
Interest and expense on
indebtedness, excluding
capitalized interest $ 285 266 290 392 460
Capitalized interest 31 15 11 16 37
Preferred dividend requirements
of a subsidiary 73 56 71 3 -
One-third of rental expense,
net of subleasing income,
for operating leases 36 32 30 38 34
- -----------------------------------------------------------------------------
$ 425 369 402 449 531
=============================================================================
RATIO OF EARNINGS TO FIXED CHARGES 3.4 3.2 2.3 2.1 2.0
- -----------------------------------------------------------------------------
</TABLE>
*Includes amortization of capitalized interest totaling approximately
$10 million, $10 million, $11 million, $10 million and $137 million in 1995,
1994, 1993, 1992 and 1991, respectively. For 1991, the amount includes
approximately $120 million of capitalized interest associated with the
writedown of offshore California investments.
Earnings available for fixed charges include, if any, the company's equity in
losses of companies owned less than fifty percent and having debt for which the
company is contingently liable. Fixed charges include the company's
proportionate share, if any, of interest relating to the contingent debt.
In 1990 and 1988, respectively, the company guaranteed a $400 million bank loan
and $250 million of notes payable for the Long-Term Stock Savings Plan (LTSSP),
an employee benefit plan. In 1994, the notes payable were refinanced with a
$131 million term loan, and the $400 million loan was amended in 1994, and
again in 1995. Consolidated interest expense includes interest attributable to
the LTSSP borrowings of $3 million, $1 million, $1 million, $1 million and
$13 million in 1995, 1994, 1993, 1992 and 1991, respectively.
<PAGE> 1
Exhibit 23-A
CONSENT OF INDEPENDENT AUDITORS
We consent to the reference to our firm under the caption "Experts" in the
Registration Statement (Form S-3), and related Prospectus of Phillips Petroleum
Company for the registration of $750,000,000 of its subordinated debt securities
and the preferred securities of the Phillips 66 Capital Trusts (as defined in
the Registration Statement) and to the incorporation by reference therein of our
report dated February 21, 1996, 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, 1995, filed with the
Securities and Exchange Commission.
/s/ Ernst & Young LLP
--------------------------
ERNST & YOUNG LLP
Tulsa, Oklahoma
February 21, 1996
