Execution Copy
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AGREEMENT AND PLAN OF MERGER
DATED AS OF DECEMBER 12, 2005
BY AND AMONG
CONOCOPHILLIPS,
CELLO ACQUISITION CORP.,
AND
BURLINGTON RESOURCES INC.
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TABLE OF CONTENTS
Page
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ARTICLE I CERTAIN DEFINITIONS.............................................1
ARTICLE II THE MERGER......................................................9
2.1 The Merger.......................................................9
2.2 Effective Time of the Merger....................................10
2.3 Effects of the Merger...........................................10
2.4 Closing.........................................................10
2.5 Certificate of Incorporation....................................10
2.6 By-Laws.........................................................10
2.7 Directors and Officers..........................................10
2.8 Actions of ConocoPhillips as Sole Stockholder of
Merger Sub......................................................11
ARTICLE III CONVERSION OF SECURITIES.......................................11
3.1 Effect on Capital Stock.........................................11
3.2 Dissenting Shares...............................................12
3.3 Stock Options and Equity Awards.................................12
3.4 Shares Held by Burlington Affiliates............................14
3.5 Surrender and Payment...........................................14
3.6 Fractional Shares...............................................16
3.7 Lost Certificates...............................................16
3.8 Withholding Rights..............................................17
3.9 No Further Ownership Rights in Burlington Common Stock..........17
3.10 Investment of Cash by the Exchange Agent........................17
3.11 Further Assurances..............................................17
ARTICLE IV REPRESENTATIONS AND WARRANTIES.................................18
4.1 Representations and Warranties of Burlington....................18
(a) Corporate Organization.....................................18
(b) Capitalization.............................................18
(c) Authority; No Violation....................................19
(d) Consents and Approvals.....................................20
(e) Financial Reports and SEC Documents........................21
(f) Absence of Undisclosed Liabilities.........................22
(g) Absence of Certain Changes or Events.......................22
(h) Legal Proceedings..........................................23
(i) Compliance with Applicable Law.............................23
(j) Environmental Liability....................................23
(k) Employee Benefit Plans; Labor Matters......................24
(l) Taxes......................................................25
(m) Contracts..................................................26
(n) Reorganization under the Code..............................27
(o) Form S-4; Proxy Statement/Prospectus.......................27
(p) State Takeover Laws; Rights Plan...........................27
(q) Opinion of Financial Advisors..............................28
(r) Board Approval.............................................28
(s) Brokers' Fees..............................................28
(t) Ownership of ConocoPhillips Capital Stock..................28
4.2 Representations and Warranties of ConocoPhillips................28
(a) Corporate Organization.....................................28
(b) Capitalization.............................................29
(c) Authority; No Violation....................................30
(d) Consents and Approvals.....................................30
(e) Financial Reports and SEC Documents........................31
(f) Absence of Undisclosed Liabilities.........................32
(g) Absence of Certain Changes or Events.......................33
(h) Legal Proceedings..........................................34
(i) Compliance with Applicable Law.............................34
(j) Environmental Liability....................................34
(k) Taxes......................................................34
(l) Contracts..................................................34
(m) Reorganization under the Code..............................35
(n) Form S-4; Proxy Statement/Prospectus.......................35
(o) State Takeover Laws; Rights Plan...........................36
(p) Opinion of Financial Advisors..............................36
(q) Board Approval.............................................36
(r) Brokers' Fees..............................................36
(s) Ownership of Burlington Capital Stock......................36
ARTICLE V COVENANTS RELATING TO CONDUCT OF BUSINESS......................36
5.1 Covenants of Burlington.........................................36
(a) Ordinary Course............................................37
(b) Dividends; Changes in Share Capital........................37
(c) Issuance of Securities.....................................37
(d) Governing Documents........................................38
(e) No Acquisitions............................................38
(f) No Dispositions............................................38
(g) Investments; Indebtedness..................................38
(h) Tax-Free Qualification.....................................39
(i) Compensation...............................................39
(j) Accounting Methods.........................................39
(k) Non-Compete................................................39
(l) Certain Actions............................................39
(m) Material Contracts.........................................40
(n) Claims; Litigation.........................................40
(o) Intellectual Property......................................40
(p) Agreements with Governmental Entities......................40
(q) Extraordinary Actions......................................40
(r) Rabbi Trust Funding........................................40
(s) Related Actions............................................40
5.2 Covenants of ConocoPhillips.....................................41
(a) Ordinary Course............................................41
(b) Dividends, Changes in Share Capital........................41
(c) No Acquisitions............................................41
(d) Tax-Free Qualification.....................................41
(e) Related Actions............................................42
5.3 Governmental Filings............................................42
5.4 Control of Other Party's Business...............................42
ARTICLE VI ADDITIONAL AGREEMENTS..........................................42
6.1 Preparation of Proxy Statement; Stockholders Meetings...........42
6.2 Governance Matters..............................................43
6.3 Access to Information...........................................44
6.4 Required Actions................................................44
6.5 Acquisition Proposals...........................................47
6.6 Fees and Expenses...............................................48
6.7 Directors' and Officers' Indemnification and Insurance..........49
6.8 Employee Benefits...............................................49
6.9 Public Announcements............................................51
6.10 Listing of Shares of ConocoPhillips Common Stock................51
6.11 Rights Agreement................................................51
6.12 Affiliates......................................................51
6.13 Section 16 Matters..............................................52
6.14 Dividends.......................................................52
6.15 Tax Representation Letters......................................52
ARTICLE VII CONDITIONS PRECEDENT...........................................52
7.1 Conditions to Each Party's Obligation to Effect the Merger......52
(a) Stockholder Approval.......................................52
(b) No Injunctions or Restraints; Illegality...................52
(c) HSR Act; Other Approvals...................................53
(d) NYSE Listing...............................................53
(e) Effectiveness of the Form S-4..............................53
7.2 Additional Conditions to Obligations of ConocoPhillips..........53
(a) Representations and Warranties.............................53
(b) Performance of Obligations of Burlington...................53
(c) Tax Opinion................................................54
7.3 Additional Conditions to Obligations of Burlington..............54
(a) Representations and Warranties.............................54
(b) Performance of Obligations of ConocoPhillips...............54
(c) Tax Opinion................................................54
ARTICLE VIII TERMINATION AND AMENDMENT......................................55
8.1 Termination.....................................................55
8.2 Effect of Termination...........................................56
8.3 Amendment.......................................................57
8.4 Extension; Waiver...............................................57
ARTICLE IX GENERAL PROVISIONS.............................................58
9.1 Non-Survival of Representations, Warranties and Agreements......58
9.2 Notices.........................................................58
9.3 Interpretation..................................................59
9.4 Counterparts....................................................59
9.5 Entire Agreement; No Third Party Beneficiaries..................59
9.6 Governing Law...................................................60
9.7 Severability....................................................60
9.8 Assignment......................................................60
9.9 Submission to Jurisdiction; Waivers.............................60
9.10 Enforcement.....................................................60
LIST OF EXHIBITS
Exhibit Title
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Exhibit A Form of Affiliate Agreement
AGREEMENT AND PLAN OF MERGER, dated as of December 12, 2005 (this
"Agreement"), by and among CONOCOPHILLIPS, a Delaware corporation
("ConocoPhillips"), CELLO ACQUISITION CORP., a Delaware corporation and
wholly owned subsidiary of ConocoPhillips ("Merger Sub"), and BURLINGTON
RESOURCES INC., a Delaware corporation ("Burlington").
W I T N E S S E T H:
WHEREAS, the Boards of Directors of ConocoPhillips and Burlington
deem it advisable and in the best interests of their respective
corporations and stockholders that ConocoPhillips and Burlington engage in
a business combination in order to advance the long term strategic
interests of ConocoPhillips and Burlington;
WHEREAS, to effect such business combination, the Boards of
Directors of ConocoPhillips, Merger Sub and Burlington have approved this
Agreement and the merger of Burlington with and into Merger Sub (the
"Merger"), upon the terms and subject to the conditions set forth herein;
and
WHEREAS, for Federal income tax purposes, it is intended that the
Merger shall qualify as a "reorganization" within the meaning of Section
368(a) of the Internal Revenue Code of 1986, as amended (the "Code"), and
the regulations promulgated thereunder, and that this Agreement will be,
and hereby is, adopted as a plan of reorganization.
NOW, THEREFORE, in consideration of the foregoing and the
respective representations, warranties, covenants and agreements set forth
in this Agreement, and intending to be legally bound hereby, the parties
hereto agree as follows:
ARTICLE I
CERTAIN DEFINITIONS
As used in this Agreement, the following terms shall have the
respective meanings set forth below:
"Acquisition Proposal" shall have the meaning set forth in
Section 6.5(a).
"Affiliate Agreement" shall have the meaning set forth in Section
6.12.
"Agreement" shall have the meaning set forth in the preamble.
"Antitrust Laws" means the HSR Act, the EC Merger Regulation, the
Canadian Investment Regulations or other antitrust, competition or
premerger notification, trade regulation law, regulation or order.
"beneficial ownership" or "beneficially own" shall have the
meaning ascribed to such terms under Section 13(d) of the Exchange Act.
"Benefit Plan" means any employee benefit plan, program, policy,
practice, agreement, contract or other arrangement, whether or not written,
including any "employee welfare benefit plan" within the meaning of Section
3(1) of ERISA, any "employee pension benefit plan" within the meaning of
Section 3(2) of ERISA (whether or not such plan is subject to ERISA), any
employment or severance agreement, and any bonus, incentive, deferred
compensation, vacation, stock purchase, stock option, severance, change of
control or fringe benefit plan, program, policy, practice, agreement,
contract, or other arrangement.
"Book Entry Shares" shall have the meaning set forth in Section
3.5(a).
"Burlington" shall have the meaning set forth in the preamble.
"Burlington Benefit Plan" means a Benefit Plan providing benefits
to any current or former employee, officer or director of Burlington or any
of its affiliates or any beneficiary or dependent thereof that is sponsored
or maintained by Burlington or any of its affiliates or to which Burlington
or any of its affiliates is party, contributes, or is obligated to
contribute.
"Burlington Capital Budgets" shall have the meaning set forth in
Section 5.1(a)(ii).
"Burlington Capital Stock" means the Burlington Common Stock
together with the Burlington Preferred Stock.
"Burlington Common Stock" means common stock, par value $0.01 per
share, of Burlington. References to "Burlington Common Stock" shall, where
appropriate, be deemed to include the Burlington Rights attached thereto or
associated therewith.
"Burlington Contract" shall have the meaning set forth in Section
4.1(m)(i).
"Burlington Disclosure Schedule" means the disclosure schedule
delivered by Burlington to ConocoPhillips concurrently herewith.
"Burlington Employees" shall have the meaning set forth in
Section 6.8(b).
"Burlington Necessary Consents" shall have the meaning set forth
in Section 4.1(d).
"Burlington Preferred Stock" means preferred stock, par value
$0.01 per share, of Burlington.
"Burlington Recommendation" shall have the meaning set forth in
Section 6.1(b).
"Burlington Rights" shall mean the rights to purchase Series A
junior participating preferred stock of Burlington in connection with the
Burlington Rights Agreement.
"Burlington Rights Agreement" shall mean the Shareholder Rights
Agreement dated as of December 16, 1998, between Burlington and EquiServe
Trust Company, N.A, as rights agent.
"Burlington SEC Documents" shall have the meaning set forth in
Section 4.1(e)(i).
"Burlington September 10-Q" means Burlington's Quarterly Report
on Form 10-Q for the quarter ended September 30, 2005, as filed with the
SEC.
"Burlington Stock Option" shall have the meaning set forth in
Section 3.3(a).
"Burlington Stock Plans" shall mean the Burlington Resources Inc.
1992 Stock Option Plan for Non-employee Directors, the Burlington Resources
Inc. 2000 Stock Option Plan for Non-employee Directors, the Burlington
Resources Inc., 1993 Stock Incentive Plan, the Burlington Resources Inc.,
1997 Employee Stock Incentive Plan, and the Burlington Resources Inc., 2002
Stock Incentive Plan.
"Burlington Stock Unit" means any compensatory right measured by
the value of a number of shares of Burlington Common Stock, other than (i)
the Burlington Stock Options, (ii) restricted Burlington Common Stock or
(iii) performance units granted under Burlington's 2005 Performance Share
Unit Plan.
"Burlington Stockholder Approval" shall have the meaning set
forth in Section 4.1(c)(i).
"Burlington Stockholders Meeting" shall have the meaning set
forth in Section 4.1(c)(i).
"Burlington 2004 10-K" means Burlington's Annual Report on Form
10-K for the fiscal year ended December 31, 2004, as filed with the SEC.
"Business Day" means any day on which banks are not required or
authorized to close in the City of New York.
"Canadian Investment Regulations" means the Competition Act
(Canada) and the Investment Canada Act of 1984 (Canada).
"Cancelled Shares" shall have the meaning set forth in Section
3.1(d).
"Certificate" shall have the meaning set forth in Section 3.1(b).
"Certificate of Merger" shall have the meaning set forth in
Section 2.2.
"Change in the Burlington Recommendation" shall have the meaning
set forth in Section 6.1(b).
"Closing" shall have the meaning set forth in Section 2.4.
"Closing Date" shall have the meaning set forth in Section 2.4.
"Code" shall have the meaning set forth in the recitals.
"Common Shares Trust" shall have the meaning set forth in Section
3.6(b).
"Confidentiality Agreement" shall have the meaning set forth in
Section 6.3.
"ConocoPhillips" shall have the meaning set forth in the
preamble.
"ConocoPhillips Benefit Plan" means a Benefit Plan providing
benefits to any current or former employee, officer or director of
ConocoPhillips or any of its affiliates or any beneficiary or dependent
thereof that is sponsored or maintained by ConocoPhillips or any of its
affiliates or to which ConocoPhillips or any of its affiliates is party,
contributes, or is obligated to contribute.
"ConocoPhillips Capital Stock" means the ConocoPhillips Common
Stock together with the ConocoPhillips Preferred Stock.
"ConocoPhillips Common Stock" means common stock, par value $0.01
per share, of ConocoPhillips. References to "ConocoPhillips Common Stock"
shall, where appropriate, be deemed to include the ConocoPhillips Rights
attached thereto.
"ConocoPhillips Contract" shall have the meaning set forth in
Section 4.2(l)(i).
"ConocoPhillips Disclosure Schedule" means the disclosure
schedule delivered by ConocoPhillips to Burlington concurrently herewith.
"ConocoPhillips Necessary Consents" shall have the meaning set
forth in Section 4.2(d).
"ConocoPhillips Preferred Stock" means preferred stock, par value
$0.01 per share, of ConocoPhillips.
"ConocoPhillips Rights" shall mean the rights to purchase Series
A junior participating preferred stock of ConocoPhillips in connection with
the ConocoPhillips Rights Agreement.
"ConocoPhillips Rights Agreement" shall mean the Rights
Agreement, dated as of June 30, 2002, between ConocoPhillips and Mellon
Investor Services LLC, as rights agent.
"ConocoPhillips SEC Documents" shall have the meaning set forth
in Section 4.2(e)(i).
"ConocoPhillips September 10-Q" means ConocoPhillips' Quarterly
Report on Form 10-Q for the quarter ended September 30, 2005, as filed with
the SEC.
"ConocoPhillips Stock Plans" shall have the meaning set forth in
Section 4.2(b).
"ConocoPhillips 2004 10-K" means ConocoPhillips' Annual Report on
Form 10-K for the fiscal year ended December 31, 2004, as filed with the
SEC.
"CERCLA" means the Comprehensive Environmental Response,
Compensation and Liability Act of 1980, as amended, and the rules and
regulations promulgated thereunder.
"Controlled Group Liability" means any and all liabilities (a)
under Title IV of ERISA, other than for payment of premiums to the Pension
Benefit Guaranty Corporation, (b) under Section 302 of ERISA, (c) under
Sections 412 and 4971 of the Code, (d) for violation of the continuation
coverage requirements of Section 601 et seq. of ERISA and Section 4980B of
the Code or the group health requirements of Sections 9801 et seq. of the
Code and Sections 701 et seq. of ERISA, and (e) under corresponding or
similar provisions of foreign laws or regulations.
"Converted ConocoPhillips Option" shall have the meaning set
forth in Section 3.3(a).
"DGCL" means the General Corporation Law of the State of
Delaware.
"Dissenting Shares" shall have the meaning set forth in Section
3.2.
"DOJ" means the Antitrust Division of the U.S. Department of
Justice.
"EC Merger Regulation" shall have the meaning set forth in
Section 4.1(d).
"Effective Time" shall have the meaning set forth in Section 2.2.
"Environmental Claims" means, in respect of any person, (i) any
and all administrative, regulatory or judicial actions, suits, orders,
decrees, demands, directives, claims, liens, proceedings or written notices
of noncompliance or violation by any Governmental Entity, alleging
potential presence or Release of, or exposure to, any Hazardous Materials
at any location, whether or not owned, operated, leased or managed by such
person, or (ii) any and all indemnification, cost recovery, compensation or
injunctive relief resulting from the presence or Release of, or exposure
to, any Hazardous Materials.
"Environmental Laws" means all applicable federal, state, local
and foreign laws (including international conventions, protocols and
treaties), common law, rules, regulations, orders, decrees, judgments,
binding agreements or Environmental Permits issued, promulgated or entered
into, by or with any Governmental Entity, relating to pollution, Hazardous
Materials, natural resources or the protection, investigation or
restoration of the environment as in effect on the date of this Agreement.
"Environmental Permits" means all permits, licenses,
registrations and other governmental authorizations required under
applicable Environmental Laws.
"ERISA" means the Employee Retirement Income Security Act of
1974, as amended, and the rules and regulations promulgated thereunder.
"Excess Shares" shall have the meaning set forth in Section
3.6(a).
"Exchange Act" means the Securities Exchange Act of 1934, as
amended, and the rules and regulations promulgated thereunder.
"Exchange Agent" shall have the meaning set forth in Section
3.5(a).
"Exchange Fund" shall have the meaning set forth in Section
3.5(a).
"Exchange Ratio" shall have the meaning set forth in Section
3.1(a).
"Expenses" means all out-of-pocket expenses (including all fees
and expenses of counsel, accountants, investment bankers, experts and
consultants to a party hereto and its affiliates) incurred by a party
hereto or on its behalf in connection with or related to the authorization,
preparation, negotiation, execution and performance of this Agreement and
the transactions contemplated hereby, including the preparation, printing,
filing and mailing of the Proxy Statement/Prospectus and the Form S-4 and
the solicitation of stockholder approval and all other matters related to
the transactions contemplated hereby and thereby.
"Foreign Burlington Plans" means each Burlington Benefit Plan
maintained outside the United States primarily for the benefit of employees
of Burlington and its Subsidiaries working outside of the United States.
"Foreign ConocoPhillips Plans" means each ConocoPhillips Benefit
Plan maintained outside the United States primarily for the benefit of
employees of ConocoPhillips and its subsidiaries working outside of the
United States.
"Form S-4" shall have the meaning set forth in Section 4.1(d).
"FTC" means the U.S. Federal Trade Commission.
"GAAP" means U.S. generally accepted accounting principles.
"Governmental Entity" means any supranational, national, state,
municipal or local government, foreign or domestic, any instrumentality,
subdivision, court, administrative agency or commission or other authority
thereof, or any quasi-governmental or private body exercising any
regulatory, taxing, importing or other governmental or quasi-governmental
authority.
"Hazardous Materials" means any petroleum or petroleum products,
radioactive materials or wastes, asbestos, polychlorinated biphenyls and
any chemical, material, substance or waste, in each case that is
prohibited, limited or regulated pursuant to any Environmental Law.
"HSR Act" means the Hart-Scott-Rodino Antitrust Improvements Act
of 1976, as amended, and the rules and regulations promulgated thereunder.
"IRS" means the Internal Revenue Service.
"knowledge" or "known" means, with respect to any entity, the
actual knowledge of such entity's executive officers (as defined in the
Exchange Act).
"Liens" means liens, pledges, charges, encumbrances and security
interests of any kind.
"Material Adverse Effect" means, with respect to any entity, a
material adverse effect on (a) the business, operations, results of
operations or financial condition of such entity and its Subsidiaries taken
as a whole or (b) the ability of such entity to consummate the transactions
contemplated by this Agreement, except, in each case, for any such effect
attributable to (i) general regulatory or economic conditions (including
prevailing interest rate and stock market levels) in the United States or
the other countries in which such entity operates, (ii) changes in, or
events or conditions generally affecting the industries in which such
entity operates (including changes to commodity prices) or (iii) other than
with respect to Sections 4.1(c)(ii), 4.1(d), 4.2(c)(ii) and 4.2(d), the
negotiation, announcement, execution, delivery or consummation of the
transactions contemplated by, or in compliance with, this Agreement (the
exclusions set forth in (i)-(iii), the "MAE Exclusions"). Any party seeking
to claim that a Material Adverse Effect has occurred with respect to the
other party shall have the burden of proof to establish that any adverse
effect is attributable to conditions, changes or events other than the MAE
Exclusions.
"Merger" shall have the meaning set forth in the recitals.
"Merger Consideration" shall have the meaning set forth in
Section 3.1(a).
"Merger Sub" shall have the meaning set forth in the preamble.
"New Plans" shall have the meaning set forth in Section 6.8(c).
"NYSE" means the New York Stock Exchange, Inc.
"Old Plans" shall have the meaning set forth in Section 6.8(c).
"other party" means, with respect to ConocoPhillips, Burlington,
and with respect to Burlington, ConocoPhillips.
"PBGC" means the Pension Benefit Guaranty Corporation.
"Per Share Cash Amount" shall have the meaning set forth in
Section 3.1(a).
"Person" means an individual, corporation, limited liability
company, partnership, association, trust, unincorporated organization,
other entity or group (as defined in the Exchange Act).
"Proxy Statement/Prospectus" shall have the meaning set forth in
Section 4.1(d).
"Qualifying Amendment" means an amendment or supplement to the
Proxy Statement/Prospectus or Form S-4 (including by incorporation by
reference) to the extent it contains (i) a Change in the Burlington
Recommendation, (ii) a statement of the reasons of the Board of Directors
of Burlington for making such Change in the Burlington Recommendation and
(iii) additional information reasonably related to the foregoing.
"Regulatory Law" means the Antitrust Laws, and all other U.S.
federal and state and foreign, if any, statutes, rules, regulations,
orders, decrees, administrative and judicial doctrines and other laws that
are designed or intended to prohibit, restrict or regulate (a) mergers,
acquisitions or other business combinations, (b) foreign investment, or (c)
actions having the purpose or effect of monopolization or restraint of
trade or lessening of competition.
"Release" means any actual or threatened release, spill,
emission, leaking, dumping, injection, pouring, deposit, disposal,
discharge, dispersal, leaching or migration into the environment.
"Required Approvals" shall have the meaning set forth in Section
6.4(a).
"Sarbanes-Oxley Act" shall have the meaning set forth in Section
4.1(e)(iv).
"SEC" means the U.S. Securities and Exchange Commission.
"Securities Act" means the Securities Act of 1933, as amended,
and the rules and regulations promulgated thereunder.
"Significant Subsidiary" shall have the meaning ascribed to such
term in Rule 1-02 of Regulation S-X of the SEC.
"Stock Award Exchange Ratio" shall have the meaning set forth in
Section 3.3(a).
"Subsidiary" shall have the meaning ascribed to such term in Rule
1-02 of Regulation S-X of the SEC.
"Superior Proposal" means, with respect to Burlington a bona fide
written proposal made by a Person other than a party hereto that is (a) for
an Acquisition Proposal (except that references in the definition of
"Acquisition Proposal" to "20%" shall be "50%") involving Burlington and
(b) is on terms which its Board of Directors in good faith concludes
(following receipt of the advice of its financial advisors and outside
counsel), taking into account, among other things, legal, financial,
regulatory and other aspects of the proposal, including any conditions to
consummation, as well as any revisions to the terms of the Merger or this
Agreement proposed by ConocoPhillips pursuant to Sections 6.5(b) and
6.5(c), and the Person making the proposal, (i) would, if consummated,
result in a transaction that is more favorable to Burlington and its
stockholders (in their capacities as stockholders), from a financial point
of view, than the transactions contemplated by this Agreement and (ii) is
reasonably capable of being completed on the terms so proposed.
"Surviving Corporation" shall have the meaning set forth in
Section 2.1.
"Tax Return" means any return, report or similar statement
(including any attached schedules) required to be filed with respect to any
Tax, including any information return, claim for refund, amended return or
declaration of estimated Tax.
"Taxes" means any and all U.S. federal, state or local, foreign
or other taxes of any kind (together with any and all interest, penalties,
additions to tax and additional amounts imposed with respect thereto)
imposed by any taxing authority, including taxes or other charges on or
with respect to income, franchises, windfall or other profits, gross
receipts, property, sales, use, capital stock, payroll, employment, social
security, workers' compensation, unemployment compensation, or net worth,
and taxes or other charges in the nature of excise, withholding, ad valorem
or value added.
"Termination Date" shall have the meaning set forth in Section
8.1(b).
"Termination Fee" means $1 billion.
"U.S. Burlington Benefit Plan" means each Burlington Benefit Plan
that is not a Foreign Burlington Benefit Plan.
"U.S. ConocoPhillips Benefit Plan" means each ConocoPhillips
Benefit Plan that is not a Foreign ConocoPhillips Benefit Plan.
"Voting Debt" means any bonds, debentures, notes or other
indebtedness having the right to vote on any matters on which holders of
capital stock of the same issuer may vote.
ARTICLE II
THE MERGER
2.1 The Merger. Upon the terms and subject to the conditions
herein, at the Effective Time, Burlington shall be merged with and into
Merger Sub, with Merger Sub as the surviving corporation in the Merger (the
"Surviving Corporation"), and the separate existence of Burlington shall
thereupon cease. As a result of and immediately after the Merger, Merger
Sub will remain a wholly owned subsidiary of ConocoPhillips.
2.2 Effective Time of the Merger. The Merger shall become
effective as set forth in the certificate of merger duly filed with the
Secretary of State of the State of Delaware (the "Certificate of Merger"),
which filing shall be made as soon as practicable on the Closing Date. As
used in this Agreement, the term "Effective Time" shall mean the date and
time when the Merger becomes effective, as set forth in the Certificate of
Merger. The Certificate of Merger shall be in such form as is required by,
and executed and acknowledged in accordance with, the DGCL, and as mutually
agreed by ConocoPhillips and Burlington.
2.3 Effects of the Merger. The Merger shall have the effects set
forth in the applicable provisions of the DGCL. Without limiting the
generality of the foregoing, and subject thereto, at the Effective Time,
except as otherwise provided herein, all of the property, rights,
privileges, powers and franchises of Merger Sub and Burlington shall vest
in the Surviving Corporation, and all debts, liabilities and duties of
Merger Sub and Burlington shall become the debts, liabilities and duties of
the Surviving Corporation.
2.4 Closing. Upon the terms and subject to the conditions set
forth in Article VII and the termination rights set forth in Article VIII,
the closing of the transactions contemplated by this Agreement (the
"Closing") will take place at the offices of Wachtell, Lipton, Rosen &
Katz, 51 West 52nd Street, New York, New York, 10019 at 10:00 A.M. on the
first Business Day following the satisfaction or waiver (subject to
applicable law) of the conditions (excluding conditions that, by their
nature, cannot be satisfied until the Closing Date) set forth in Article
VII, unless this Agreement has been theretofore terminated pursuant to its
terms or unless another place, time or date is agreed to in writing by the
parties hereto (the date of the Closing being referred to herein as the
"Closing Date").
2.5 Certificate of Incorporation. At the Effective Time, the
certificate of incorporation of Merger Sub as in effect immediately prior
to the Effective Time shall be the certificate of incorporation of the
Surviving Corporation, until thereafter changed or amended as provided
therein or by applicable law; provided, however, that the certificate of
incorporation of the Surviving Corporation may be amended in the Merger to
provide that the Surviving Corporation shall have a name after the Merger
other than Cello Acquisition Corp., such name as determined by
ConocoPhillips.
2.6 By-Laws. At the Effective Time, the by-laws of Merger Sub as
in effect immediately prior to the Effective Time shall be the by-laws of
the Surviving Corporation, until thereafter changed or amended as provided
therein or by applicable law.
2.7 Directors and Officers. The directors of Merger Sub shall,
from and after the Effective Time, become the initial directors of the
Surviving Corporation until their successors shall have been duly elected,
appointed or qualified or until their earlier death, resignation or removal
in accordance with the certificate of incorporation and the by-laws of the
Surviving Corporation. The officers of Merger Sub shall, from and after the
Effective Time, become the initial officers of the Surviving Corporation
until their successors shall have been duly elected, appointed or qualified
or until their earlier death, resignation or removal in accordance with the
certificate of incorporation and the by-laws of the Surviving Corporation.
2.8 Actions of ConocoPhillips as Sole Stockholder of Merger Sub.
ConocoPhillips, as the holder of all the capital stock of Merger Sub, will,
immediately upon execution of this Agreement, approve this Agreement and
the transactions contemplated hereby and shall, as the sole stockholder of
Merger Sub, adopt this Agreement. ConocoPhillips shall take all actions
necessary to cause Merger Sub to take any actions necessary in order to
consummate the Merger and the other transactions contemplated hereby to the
extent required hereunder.
ARTICLE III
CONVERSION OF SECURITIES
3.1 Effect on Capital Stock. (a) At the Effective Time, subject
to the other provisions of Article 3, each share of Burlington Common Stock
issued and outstanding immediately prior to the Effective Time (other than
shares of Burlington Common Stock owned by ConocoPhillips, Merger Sub or
Burlington and except for any Dissenting Shares) shall, by virtue of this
Agreement and without any action on the part of the holder thereof, be
converted into and shall thereafter represent the right to receive the
following consideration (collectively, the "Merger Consideration"):
Each share of Burlington Common Stock shall be converted into the
right to receive the combination of (x) $46.50 in cash (the "Per
Share Cash Amount") and (y) 0.7214 of a share of validly issued,
fully paid and non-assessable shares of ConocoPhillips Common
Stock (the "Exchange Ratio"), subject to adjustment in accordance
with Section 3.1(c).
(b) From and after the Effective Time, all of the shares of
Burlington Common Stock converted into the Merger Consideration pursuant to
this Article 3 shall no longer be outstanding and shall automatically be
cancelled and retired and shall cease to exist, and each holder of a
certificate (each a "Certificate") previously representing any such shares
of Burlington Common Stock shall thereafter cease to have any rights with
respect to such securities, except the right to receive (i) the Merger
Consideration, (ii) any dividends and other distributions in accordance
with Section 3.5(f), and (iii) any cash to be paid in lieu of any
fractional share of ConocoPhillips Common Stock in accordance with Section
3.6.
(c) If at any time during the period between the date of this
Agreement and the Effective Time, any change in the outstanding shares of
capital stock of ConocoPhillips or Burlington shall occur by reason of any
reclassification, recapitalization, stock split or combination, exchange or
readjustment of shares, or any stock dividend thereon with a record date
during such period, the Per Share Cash Amount, the Exchange Ratio and any
other similarly dependent items, as the case may be, shall be appropriately
adjusted to provide the holders of shares of Burlington Common Stock the
same economic effect as contemplated by this Agreement prior to such event.
(d) At the Effective Time, all shares of Burlington Common Stock
that are owned by ConocoPhillips, Merger Sub or Burlington (the "Cancelled
Shares") shall be cancelled and retired and shall cease to exist and no
stock of ConocoPhillips, cash or other consideration shall be delivered in
exchange therefor. For the avoidance of doubt, this Section 3.1(d) shall
not apply to shares of Burlington Common Stock held in trust or otherwise
set aside from shares held in Burlington's treasury pursuant to a
Burlington Benefit Plan other than a Burlington Stock Plan.
(e) Each issued and outstanding share of common stock, par value
$0.01 per share, of Merger Sub issued and outstanding immediately prior to
the Effective Time shall remain outstanding as one fully paid and
nonassessable share of common stock, par value $0.01 per share, of the
Surviving Corporation.
3.2 Dissenting Shares. Notwithstanding anything in this Agreement
to the contrary, with respect to each share of Burlington Common Stock as
to which the holder thereof has neither voted in favor of the Merger nor
consented thereto in writing and who shall have delivered a written demand
for appraisal of such shares in the manner provided by the DGCL and who, as
of the Effective Time, shall not have effectively withdrawn or lost such
right to appraisal (each, a "Dissenting Share"), if any, such share will
not be converted into, or represent the right to receive, the Merger
Consideration. Such holder shall be entitled to payment, solely from the
Surviving Corporation, of the appraisal value of the Dissenting Shares held
by them to the extent permitted by and in accordance with the provisions of
section 262 of the DGCL; provided, however, that (i) if any holder of
Dissenting Shares, under the circumstances permitted by and in accordance
with the DGCL, shall have effectively withdrawn his demand for appraisal of
such Dissenting Shares or lost his right to appraisal and payment for his
shares of Burlington Common Stock under section 262 of DGCL, (ii) if any
holder of Dissenting Shares shall have failed to establish his entitlement
to appraisal rights as provided in section 262 of the DGCL or (iii) if any
holder of Dissenting Shares takes or fails to take any action the
consequence of which is that such holder is not entitled to payment for his
shares under the DGCL, such holder or holders (as the case may be) shall
forfeit the right to appraisal of such shares of Burlington Common Stock
and such Burlington Common Stock shall thereupon cease to constitute
Dissenting Shares. Burlington shall give ConocoPhillips prompt notice of
any demands received by Burlington for appraisal of shares of Burlington
Common Stock, and ConocoPhillips shall have the right to participate in all
negotiations and proceedings with respect to such demands. Burlington shall
not settle, make any payments with respect to, or offer to settle, any
claim with respect to Dissenting Shares without the written consent of
ConocoPhillips.
3.3 Stock Options and Equity Awards. (a) The Board of Directors
of Burlington shall take such action as is necessary so that at the
Effective Time, each outstanding option to purchase shares of Burlington
Common Stock (a "Burlington Stock Option") granted under the Burlington
Stock Plans, whether or not vested, shall cease to represent a right to
acquire shares of Burlington Common Stock and shall thereafter constitute a
fully vested option (a "Converted ConocoPhillips Option") to acquire (on
the same terms and conditions as were applicable to such Burlington Stock
Option pursuant to the relevant Burlington Stock Plan under which it was
issued and the agreement evidencing the grant thereof prior to the
Effective Time) the number (rounded down to the nearest whole number) of
shares of ConocoPhillips Common Stock determined by multiplying (A) the
number of shares of Burlington Common Stock subject to such Burlington
Stock Option immediately prior to the Effective Time by (B) the Stock Award
Exchange Ratio. The exercise price or base price per share of
ConocoPhillips Common Stock subject to any such Converted ConocoPhillips
Option shall be an amount (rounded up to the nearest one hundredth of a
cent) equal to (A) the exercise price or base price per share of Burlington
Common Stock subject to such Burlington Stock Option immediately prior to
the Effective Time divided by (B) the Stock Award Exchange Ratio.
Notwithstanding the foregoing, any Burlington Stock Option which is an
"incentive stock option" (as defined in Section 422 of the Code) shall be
adjusted in accordance with the requirements of Section 424 of the Code.
Prior to the Effective Time, Burlington shall make any amendments to the
terms of the Burlington Stock Plans as are necessary to give effect to the
transactions contemplated by this Section 3.3(a). For purposes of this
Section 3.3(a), the "Stock Award Exchange Ratio" shall mean the sum of (i)
the Exchange Ratio plus (ii) the fraction resulting from dividing the Per
Share Cash Amount by the closing price per share of the ConocoPhillips
Common Stock on the NYSE on the last trading day immediately preceding the
Closing Date.
(b) At the Effective Time each outstanding restricted share of
Burlington Common Stock granted pursuant to a Burlington Stock Plan shall
vest. Following the Effective Time, no holder of a Burlington incentive
award or other compensatory award shall have any right to receive shares of
Burlington Common Stock in respect of such award.
(c) At the Effective Time, each Burlington Stock Unit shall cease
to be measured by the value of a number of shares of Burlington Common
Stock and shall instead be measured by the value of a number of shares of
ConocoPhillips Common Stock determined by multiplying (x) the number of
shares of Burlington Common Stock by which such Burlington Stock Unit is
measured immediately prior to the Effective Time by (y) the Stock Award
Exchange Ratio.
(d) Prior to the Effective Time, Burlington (or its Board of
Directors or the appropriate committee thereof) shall take all corporate
action necessary for the adjustment of Burlington Stock Options and
Burlington Stock Units contemplated by this Section 3.3. ConocoPhillips
shall take all corporate action necessary to assume as of the Effective
Time Burlington's obligations with respect to the Converted ConocoPhillips
Options and to reserve for issuance a sufficient number of shares of
ConocoPhillips Common Stock for delivery upon the exercise of the Converted
ConocoPhillips Option pursuant to the terms set forth in this Section 3.3.
Not later than two Business Days after the Effective Time, ConocoPhillips
shall file with the SEC a registration statement on an appropriate form or
a post-effective amendment to a previously filed registration statement
under the Securities Act with respect to the ConocoPhillips Common Stock to
be issued upon the exercise of the Converted ConocoPhillips Options, shall
deliver an applicable prospectus relating to such registration statement
and shall maintain the effectiveness of such registration statement and
prospectus for so long as such options remain outstanding.
3.4 Shares Held by Burlington Affiliates. Anything to the
contrary herein notwithstanding, no shares of ConocoPhillips Common Stock
(or certificates therefor) shall be issued in exchange for any Certificate
to any "affiliate" of Burlington (identified pursuant to Section 6.12)
until such Person shall have delivered to ConocoPhillips duly executed
letters as contemplated by Section 6.12. Such Persons shall be subject to
the restrictions described in such letters.
3.5 Surrender and Payment. (a) Prior to the Effective Time,
ConocoPhillips shall appoint Mellon Investor Services LLC or such other
exchange agent reasonably acceptable to Burlington (the "Exchange Agent")
for the purpose of exchanging Certificates representing shares of
Burlington Common Stock and non-certificated shares represented by book
entry ("Book-Entry Shares") for the Merger Consideration. At or prior to
the Effective Time, ConocoPhillips shall deposit with the Exchange Agent,
in trust for the benefit of the holders of shares of Burlington Common
Stock, (a) certificates representing shares of ConocoPhillips Common Stock
and (b) cash, to be issued and paid pursuant to Section 3.1(a) and Section
3.6 in respect of shares of Burlington Common Stock converted pursuant to
Section 3.1(a) in exchange for outstanding shares of Burlington Common
Stock upon due surrender of Certificates pursuant to this Article III.
Following the Effective Time, ConocoPhillips agrees to make available to
the Exchange Agent, from time to time as needed, cash sufficient to pay any
dividends and other distributions pursuant to Section 3.5(f). Any cash and
certificates representing ConocoPhillips Common Stock deposited with the
Exchange Agent (including the amount of any dividends or other
distributions payable with respect thereto and such cash in lieu of
fraction shares to be paid pursuant to Section 3.6) shall hereinafter be
referred to as the "Exchange Fund"). Promptly after the Effective Time,
ConocoPhillips will send, or will cause the Exchange Agent to send, to each
holder of record of shares of Burlington Common Stock as of the Effective
Time, a letter of transmittal for use in such exchange (which shall specify
that the delivery shall be effected, and risk of loss and title shall pass,
only upon proper delivery of the Certificates to the Exchange Agent) in
such form as Burlington and ConocoPhillips may reasonably agree, for use in
effecting delivery of shares of Burlington Common Stock to the Exchange
Agent. Exchange of any Book-Entry Shares shall be effected in accordance
with ConocoPhillips' customary procedures with respect to securities
represented by book entry.
(b) Each holder of shares of Burlington Common Stock that have
been converted into a right to receive the Merger Consideration, upon
surrender to the Exchange Agent of a Certificate, together with a properly
completed letter of transmittal, will be entitled to receive (A) one or
more shares of ConocoPhillips Common Stock (which shall be in
non-certificated book-entry form unless a physical certificate is
requested) representing, in the aggregate, the whole number of shares of
ConocoPhillips Common Stock, if any, that such holder has the right to
receive pursuant to Section 3.1 and (B) a check in the amount equal to the
cash portion of the Merger Consideration, if any, that such holder has the
right to receive pursuant to Section 3.1 and this Article 3, including cash
payable in lieu of fractional shares pursuant to Section 3.6 and dividends
and other distributions pursuant to Section 3.5(f). No interest shall be
paid or accrued on any Merger Consideration, cash in lieu of fractional
shares or on any unpaid dividends and distributions payable to holders of
Certificates. Until so surrendered, each such Certificate shall, after the
Effective Time, represent for all purposes only the right to receive such
Merger Consideration.
(c) If any portion of the Merger Consideration is to be
registered in the name of a Person other than the Person in whose name the
applicable surrendered Certificate is registered, it shall be a condition
to the registration thereof that the surrendered Certificate shall be
properly endorsed or otherwise be in proper form for transfer and that the
Person requesting such delivery of the Merger Consideration shall pay to
the Exchange Agent any transfer or other similar Taxes required as a result
of such registration in the name of a Person other than the registered
holder of such Certificate or establish to the satisfaction of the Exchange
Agent that such Tax has been paid or is not payable.
(d) After the Effective Time, there shall be no further
registration of transfers of shares of Burlington Common Stock. If, after
the Effective Time, Certificates are presented to the Exchange Agent, the
Surviving Corporation or ConocoPhillips, they shall be cancelled and
exchanged for the consideration provided for, and in accordance with the
procedures set forth, in this Article 3.
(e) Any portion of the Exchange Fund that remains unclaimed by
the holders of shares of Burlington Common Stock one year after the
Effective Time shall be returned to ConocoPhillips, upon demand, and any
such holder who has not exchanged his shares of Burlington Common Stock for
the Merger Consideration in accordance with this Section 3.5 prior to that
time shall thereafter look only to ConocoPhillips for delivery of the
Merger Consideration in respect of such holder's shares. Notwithstanding
the foregoing, none of Burlington, ConocoPhillips or the Exchange Agent
shall be liable to any holder of shares for any Merger Consideration from
the Exchange Fund properly delivered to a public official pursuant to
applicable abandoned property laws.
(f) No dividends or other distributions with respect to shares of
ConocoPhillips Common Stock issued in the Merger shall be paid to the
holder of any unsurrendered Certificates or Book-Entry Shares until such
Certificates or Book-Entry Shares are surrendered as provided in this
Section 3.5. Following such surrender, there shall be paid, without
interest, to the record holder of the shares of ConocoPhillips Common Stock
issued in exchange therefor (i) at the time of such surrender, all
dividends and other distributions payable in respect of such shares of
ConocoPhillips Common Stock with a record date after the Effective Time and
a payment date on or prior to the date of such surrender and not previously
paid and (ii) at the appropriate payment date, the dividends or other
distributions payable with respect to such shares of ConocoPhillips Common
Stock with a record date after the Effective Time but with a payment date
subsequent to such surrender. For purposes of dividends or other
distributions in respect of shares of ConocoPhillips Common Stock, all
shares of ConocoPhillips Common Stock to be issued pursuant to the Merger
shall be entitled to dividends pursuant to the immediately preceding
sentence as if issued and outstanding as of the Effective Time.
(g) Any portion of the Merger Consideration deposited with the
Exchange Agent pursuant to Section 3.5 to pay for shares of Burlington
Common Stock for which appraisal rights shall have been perfected shall be
returned to ConocoPhillips, upon demand.
3.6 Fractional Shares. (a) No fractional shares of ConocoPhillips
Common Stock shall be issued in the Merger, but in lieu thereof each holder
of shares of Burlington Common Stock otherwise entitled to a fractional
share of ConocoPhillips Common Stock will be entitled to receive, from the
Exchange Agent in accordance with the provisions of this Section 3.6, a
cash payment in lieu of such fractional share of ConocoPhillips Common
Stock representing such holder's proportionate interest, if any, in the
proceeds from the sale by the Exchange Agent in one or more transactions of
shares of ConocoPhillips Common Stock equal to the excess of (x) the
aggregate number of shares of ConocoPhillips Common Stock to be delivered
to the Exchange Agent by ConocoPhillips pursuant to Section 3.5(a) over (y)
the aggregate number of whole shares of ConocoPhillips Common Stock to be
distributed to the holders of Certificates pursuant to Section 3.5(b) (such
excess being herein called the "Excess Shares"). The parties acknowledge
that payment of the cash consideration in lieu of issuing fractional shares
was not separately bargained-for consideration but merely represents a
mechanical rounding off for purposes of avoiding the expense and
inconvenience to ConocoPhillips that would otherwise be caused by the
issuance of fractional shares. As soon as practicable after the Effective
Time, the Exchange Agent, as agent for the holders of the Certificates
representing shares of Burlington Common Stock, shall sell the Excess
Shares at then prevailing prices on the NYSE in the manner provided in the
following paragraph.
(b) The sale of the Excess Shares by the Exchange Agent, as agent
for the holders that would otherwise receive fractional shares, shall be
executed on the NYSE through one or more member firms of the NYSE and shall
be executed in round lots to the extent practicable. Until the proceeds of
such sale or sales have been distributed to the holders of shares of
Burlington Common Stock, the Exchange Agent shall hold such proceeds in
trust for the holders of shares of Burlington Common Stock (the "Common
Shares Trust"). The Exchange Agent shall determine the portion of the
Common Shares Trust to which each holder of shares of Burlington Common
Stock shall be entitled, if any, by multiplying the amount of the aggregate
proceeds comprising the Common Shares Trust by a fraction, the numerator of
which is the amount of the fractional share interest to which such holder
of shares of Burlington Common Stock would otherwise be entitled and the
denominator of which is the aggregate amount of fractional share interests
to which all holders of shares of Burlington Common Stock would otherwise
be entitled.
(c) As soon as practicable after the determination of the amount
of cash, if any, to be paid to holders of shares of Burlington Common Stock
in lieu of any fractional shares of ConocoPhillips Common Stock, the
Exchange Agent shall make available such amounts to such holders of shares
of Burlington Common Stock without interest, subject to and in accordance
with Section 3.5.
3.7 Lost Certificates. If any Certificate shall have been lost,
stolen or destroyed, upon the making of an affidavit of that fact by the
Person claiming such Certificate to be lost, stolen or destroyed and, if
required by ConocoPhillips or the Surviving Corporation, the posting by
such Person of a bond, in such reasonable amount as the Surviving
Corporation may direct, as indemnity against any claim that may be made
against it with respect to such Certificate, the Exchange Agent will issue
in exchange for such lost, stolen or destroyed Certificate the Merger
Consideration to be paid in respect of the shares of Burlington Common
Stock represented by such Certificate as contemplated by this Article 3.
3.8 Withholding Rights. Each of the Surviving Corporation and
ConocoPhillips shall be entitled to deduct and withhold from the
consideration otherwise payable to any Person pursuant to Article 3 such
amounts as it is required to deduct and withhold with respect to the making
of such payment under any provision of federal, state, local or foreign Tax
law. To the extent that amounts are so deducted or withheld by the
Surviving Corporation or ConocoPhillips, as the case may be, and paid over
to the applicable Governmental Entity, such deducted or withheld amounts
shall be treated for all purposes of this Agreement as having been paid to
the holder of the shares of Burlington Common Stock or other Person in
respect of which such deduction and withholding was made by the Surviving
Corporation or ConocoPhillips, as the case may be.
3.9 No Further Ownership Rights in Burlington Common Stock. All
shares of ConocoPhillips Common Stock issued and cash paid upon conversion
of shares of Burlington Common Stock in accordance with the terms of this
Article 3 (including any cash paid pursuant to Section 3.5 or 3.6) shall be
deemed to have been issued or paid in full satisfaction of all rights
pertaining to the shares of Burlington Common Stock.
3.10 Investment of Cash by the Exchange Agent. The Exchange Agent
shall invest any cash included in the Exchange Fund as directed by
ConocoPhillips on a daily basis; provided that no such investment or loss
thereon shall affect the amounts payable or the timing of the amounts
payable to Burlington stockholders pursuant to the other provisions of this
Article 3. Any interest and other income resulting from such investments
shall promptly be paid to ConocoPhillips.
3.11 Further Assurances. At and after the Effective Time, the
officers and directors of the Surviving Corporation shall be authorized to
execute and deliver, in the name and on behalf of the Surviving
Corporation, Merger Sub or Burlington, any deeds, bills of sale,
assignments or assurances and to take and do, in the name and on behalf of
the Surviving Corporation, Merger Sub or Burlington, any other actions and
things necessary to vest, perfect or confirm of record or otherwise in
ConocoPhillips or the Surviving Corporation any and all right, title and
interest in, to and under any of the rights, properties or assets acquired
or to be acquired by the Surviving Corporation as a result of, or in
connection with, the Merger.
ARTICLE IV
REPRESENTATIONS AND WARRANTIES
4.1 Representations and Warranties of Burlington. Except as
disclosed in the Burlington Disclosure Schedule (subject to the last
sentence of Section 9.3(a)) or in the Burlington SEC Documents filed with
the SEC prior to the date of this Agreement, Burlington hereby represents
and warrants to ConocoPhillips as follows:
(a) Corporate Organization. (i) Burlington is a corporation duly
organized, validly existing and in good standing under the laws of the
State of Delaware. Burlington has the corporate power and authority to own
or lease all of its properties and assets and to carry on its business as
it is now being conducted, and is duly licensed or qualified to do business
in each jurisdiction in which the nature of the business conducted by it or
the character or location of the properties and assets owned or leased by
it makes such licensing or qualification necessary, except where the
failure to be so licensed or qualified would not, either individually or in
the aggregate, have a Material Adverse Effect on Burlington. True and
complete copies of the Certificate of Incorporation and By-Laws of
Burlington, as in effect as of the date of this Agreement, have previously
been made available by Burlington to ConocoPhillips.
(ii) Each Subsidiary of Burlington (A) is duly organized and
validly existing under the laws of its jurisdiction of organization, (B) is
duly qualified to do business and in good standing in all jurisdictions
(whether federal, state, local or foreign) where its ownership or leasing
of property or the conduct of its business requires it to be so qualified
and (C) has all requisite corporate power and authority to own or lease its
properties and assets and to carry on its business as now conducted, in
each case, except as would not, individually or in the aggregate, have a
Material Adverse Effect on Burlington.
(b) Capitalization. (i) The authorized capital stock of
Burlington consists of (A) 650,000,000 shares of Burlington Common Stock,
of which, as of November 30, 2005, 375,360,604 shares were issued and
outstanding and 107,016,266 shares were held in treasury and (B) 75,000,000
shares of Burlington Preferred Stock, of which no shares are issued and
outstanding. From November 30, 2005 to the date of this Agreement, no
shares of Burlington Capital Stock have been issued except pursuant to the
Burlington Stock Plans. All issued and outstanding shares of Burlington
Common Stock have been duly authorized and validly issued and are fully
paid, nonassessable and free of preemptive rights, with no personal
liability attaching to the ownership thereof. As of the date of this
Agreement, except pursuant to the terms of Burlington Stock Options and
other stock awards issued pursuant to Burlington Stock Plans and pursuant
to the Burlington Rights, Burlington does not have and is not bound by any
outstanding subscriptions, options, warrants, calls, commitments or
agreements of any character calling for the purchase or issuance of any
shares of Burlington Capital Stock or any other equity securities of
Burlington or any securities of Burlington representing the right to
purchase or otherwise receive any shares of Burlington Capital Stock. As of
November 30, 2005, no shares of Burlington Capital Stock were reserved for
issuance, except for 17,381,746 shares of Burlington Common Stock reserved
for issuance upon the exercise of stock options pursuant to the Burlington
Stock Plans. Burlington has no Voting Debt issued or outstanding. As of
November 30, 2005, 4,420,066 shares of Burlington Common Stock are subject
to Burlington Stock Options and 1,396,830 shares of Burlington Common Stock
are restricted shares of Burlington Common Stock. Other than such
Burlington Stock Options and restricted shares, as of November 30, 2005, no
shares of Burlington Common Stock are issuable in connection with
outstanding awards under the Burlington Stock Plans or other compensatory
arrangements (other than plans intended to be "qualified plans" within the
meaning of Section 401(a) of the Code). Since November 30, 2005, except as
permitted by this Agreement, (ii) no Burlington Common Stock has been issued
except in connection with the exercise of issued and outstanding Burlington
Stock Options and (iii) no options, warrants, securities convertible into,
or commitments made with respect to the issuance of, shares of Burlington
Common Stock have been issued, granted or made.
(ii) Except for immaterial amounts of directors' qualifying
shares in foreign Subsidiaries of Burlington, as of the date hereof
Burlington owns, directly or indirectly, all of the issued and outstanding
shares of capital stock or other equity ownership interests of each
Significant Subsidiary of Burlington, free and clear of any Liens, and all
of such shares or equity ownership interests are duly authorized and
validly issued and are fully paid, nonassessable and free of preemptive
rights, with no personal liability attaching to the ownership thereof. No
Significant Subsidiary of Burlington has or is bound by any outstanding
subscriptions, options, warrants, calls, commitments or agreements of any
character calling for the purchase or issuance of any shares of capital
stock or any other equity security of such Significant Subsidiary or any
securities representing the right to purchase or otherwise receive any
shares of capital stock or any other equity security of such Significant
Subsidiary. No Subsidiary of Burlington owns any shares of Burlington
Capital Stock (or any options or other interests convertible into or
measured by reference to the value of Burlington Capital Stock).
(c) Authority; No Violation. (i) Burlington has full corporate
power and authority to execute and deliver this Agreement and to consummate
the transactions contemplated hereby. The execution and delivery of this
Agreement and the consummation of the transactions contemplated hereby have
been duly and validly approved by the Board of Directors of Burlington. The
Board of Directors of Burlington has directed that this Agreement be
submitted to Burlington stockholders at a meeting of Burlington
stockholders for the purpose of adopting this Agreement (the "Burlington
Stockholders Meeting"), and, except for the adoption of this Agreement by
the affirmative vote of the holders of a majority of the outstanding shares
of Burlington Common Stock (the "Burlington Stockholder Approval"), no
other corporate proceedings on the part of Burlington are necessary to
approve this Agreement and to consummate the transactions contemplated
hereby. This Agreement has been duly and validly executed and delivered by
Burlington and (assuming due authorization, execution and delivery by
ConocoPhillips and Merger Sub) constitutes a valid and binding obligation
of Burlington, enforceable against Burlington in accordance with its terms,
subject to the effects of bankruptcy, insolvency, fraudulent conveyance,
reorganization, moratorium and other similar laws relating to or affecting
creditors' rights generally, and general equitable principles (whether
considered in a proceeding in equity or at law).
(ii) Neither the execution and delivery of this Agreement by
Burlington, nor the consummation by Burlington of the transactions
contemplated hereby, nor compliance by Burlington with any of the terms or
provisions hereof, will (A) violate any provision of the Certificate of
Incorporation or By-Laws of Burlington, or (B) assuming that the consents
and approvals referred to in Section 4.1(d) are duly obtained, (I) violate
any statute, code, ordinance, rule, regulation, judgment, order, writ,
decree or injunction applicable to Burlington or any of its Subsidiaries or
any of their respective properties or assets or (II) violate, conflict
with, result in a breach of any provision of or the loss of any benefit
under, constitute a default (or an event that, with notice or lapse of
time, or both, would constitute a default) under, result in the termination
of or a right of termination or cancellation under, accelerate the
performance required by, accelerate any right or benefit provided by, or
result in the creation of any Lien upon any of the respective properties or
assets of Burlington or any of its Subsidiaries under, any of the terms,
conditions or provisions of any Burlington Contract, except (in the case of
clause (B) above) for such violations, conflicts, breaches, losses,
defaults, terminations, cancellations, accelerations or Liens that, either
individually or in the aggregate, would not have a Material Adverse Effect
on Burlington or the Surviving Corporation.
(d) Consents and Approvals. Except for (i) compliance with any
applicable requirements under the HSR Act, (ii) compliance with any
applicable requirements under Council Regulation (EC) No. 139/2004 of 20
January 2004 on the control of concentrations between undertakings
(published in the Official Journal of the European Union on January 29,
2004 at L 24/1) (the "EC Merger Regulation"), (iii) compliance with any
applicable requirements under the Canadian Investment Regulations, (iv)
compliance with any applicable requirements under any other Regulatory Law,
(v) the filing with the SEC of a proxy statement/prospectus relating to the
matters to be submitted to Burlington stockholders at the Burlington
Stockholders Meeting (such proxy statement/prospectus, and any amendments
or supplements thereto, the "Proxy Statement/Prospectus") and a
registration statement on Form S-4 with respect to the issuance of
ConocoPhillips Common Stock in the Merger (such Form S-4, and any
amendments or supplements thereto, the "Form S-4"), (vi) the filing of the
Certificate of Merger pursuant to the DGCL, (vii) any consents,
authorizations, approvals, filings or exemptions in connection with
compliance with the rules of the NYSE, (viii) such filings and approvals as
are required to be made or obtained under the securities or "Blue Sky" laws
of various states in connection with the issuance of the shares of
ConocoPhillips Common Stock pursuant to this Agreement (the consents,
approvals, filings and registration required under or in relation to
clauses (ii) through (viii) above, "Burlington Necessary Consents") and
(ix) such other consents, approvals, filings and registrations the failure
of which to obtain or make would not, individually or in the aggregate,
reasonably be expected to have a Material Adverse Effect on Burlington, no
consents or approvals of or filings or registrations with any Governmental
Entity are necessary in connection with (A) the execution and delivery by
Burlington of this Agreement and (B) the consummation by Burlington of the
transactions contemplated by this Agreement.
(e) Financial Reports and SEC Documents.
(i) The Burlington 2004 10-K and all other reports,
registration statements, definitive proxy statements or information
statements filed or to be filed by Burlington or any of its Subsidiaries
subsequent to December 31, 2004 under the Securities Act or under Sections
13(a), 13(c), 14 and 15(d) of the Exchange Act in the form filed, or to be
filed, with the SEC (collectively, the "Burlington SEC Documents"), (x)
complied or will comply in all material respects as to form with the
applicable requirements under the Securities Act or the Exchange Act, as
the case may be, and (y) as of their respective filing dates (except as
amended or supplemented prior to the date of this Agreement), (A) did not
or will not contain any untrue statement of a material fact or omit to
state a material fact required to be stated therein or necessary to make
the statements made therein, in light of the circumstances under which they
were made, not misleading; and (B) each of the balance sheets contained in
or incorporated by reference into any such Burlington SEC Document
(including the related notes and schedules thereto) fairly presents or will
fairly present the financial position of the entity or entities to which it
relates as of its date, and each of the statements of income and changes in
stockholders' equity and cash flows or equivalent statements in such
Burlington SEC Documents (including any related notes and schedules
thereto) fairly presents or will fairly present the results of operations,
changes in stockholders' equity and changes in cash flows, as the case may
be, of the entity or entities to which it relates for the periods to which
it relates, in each case in accordance with GAAP consistently applied
during the periods involved, except, in each case, as may be noted therein,
subject to normal year-end audit adjustments in the case of unaudited
statements.
(ii) Except as set forth in Section 4.1(e)(ii) of the
Burlington Disclosure Schedule, the records, systems, controls, data and
information of Burlington and its respective Subsidiaries are recorded,
stored, maintained and operated under means that are under the exclusive
ownership and direct control of Burlington or its Subsidiaries or
accountants, except for any non-exclusive ownership and non-direct control
that would not reasonably be expected to have a materially adverse effect
on the system of internal accounting controls described in the following
sentence. Burlington and its Subsidiaries have devised and maintain a
system of internal accounting controls sufficient to provide reasonable
assurances regarding the reliability of financial reporting and the
preparation of financial statements for external purposes in accordance
with GAAP, including that: (1) transactions are executed only in accordance
with management's authorization; (2) transactions are recorded as necessary
to permit preparation of the financial statements of Burlington and its
Subsidiaries and to maintain accountability for the assets of Burlington
and its Subsidiaries; (3) access to such assets is permitted only in
accordance with management's authorization; and (4) the reporting of such
assets is compared with existing assets at regular intervals. Each of
Burlington and its Subsidiaries (1) has designed disclosure controls and
procedures (within the meaning of Rules 13a-15(e) and 15d-15(e) of the
Exchange Act) to ensure that material information relating to such entity
and its Subsidiaries is made known to the management of such entity (or its
general partner) by others within those entities as appropriate to allow
timely decisions regarding required disclosure and to make the
certifications required by the Exchange Act with respect to the Burlington
SEC Documents, and (2) has disclosed, based on its most recent evaluation
prior to the date of this Agreement, to its auditors and the audit
committee of its Board of Directors (A) any significant deficiencies in the
design or operation of internal controls which could adversely affect in
any material respect its ability to record, process, summarize and report
financial data and have disclosed to its auditors any material weaknesses
in internal controls and (B) any fraud, whether or not material, that
involves management or other employees who have a significant role in its
internal controls.
(iii) Since December 31, 2004, through the date hereof, to
the knowledge of Burlington, (x) neither Burlington nor any of its
Subsidiaries nor any director, officer, employee, auditor, accountant or
representative of Burlington or any of its Subsidiaries has received or
otherwise had or obtained knowledge of any material complaint, allegation,
assertion or claim, whether written or oral, regarding the accounting or
auditing practices, procedures, methodologies or methods of Burlington or
any of its Subsidiaries or their respective internal accounting controls,
including any material complaint, allegation, assertion or claim that
Burlington or any of its Subsidiaries has engaged in questionable
accounting or auditing practices, and (y) no attorney representing
Burlington or any of its Subsidiaries, whether or not employed by
Burlington or any of its Subsidiaries, has reported evidence of a material
violation of securities laws, breach of fiduciary duty or similar violation
by Burlington or any of its officers, directors, employees or agents to the
Burlington Board of Directors or any committee thereof or to the General
Counsel or Chief Executive Officer of Burlington.
(iv) Burlington is in compliance in all material respects
with the provisions of the Sarbanes-Oxley Act of 2002 (the "Sarbanes-Oxley
Act") that are applicable to Burlington.
(f) Absence of Undisclosed Liabilities. Neither Burlington nor
any of its Subsidiaries had at September 30, 2005, or has incurred since
that date through the date hereof, any liabilities or obligations (whether
absolute, accrued, contingent or otherwise) of any nature, except (i)
liabilities, obligations or contingencies that (A) are accrued or reserved
against in the financial statements in the Burlington September 10-Q or
reflected in the notes thereto or (B) were incurred in the ordinary course
of business, (ii) liabilities, obligations or contingencies that (A) would
not, individually or in the aggregate, reasonably be expected to have a
Material Adverse Effect on Burlington, or (B) have been discharged or paid
in full prior to the date hereof, and (iii) liabilities, obligations and
contingencies that are of a nature not required to be reflected in the
consolidated financial statements of Burlington and its Subsidiaries
prepared in accordance with GAAP consistently applied.
(g) Absence of Certain Changes or Events. Since September 30,
2005, Burlington has conducted its business only in the ordinary course,
and since such date there has not been:
(i) any event, change, effect or development that,
individually or in the aggregate, has had or would reasonably be expected
to have a Material Adverse Effect on Burlington;
(ii) prior to the date of this Agreement, any declaration,
setting aside or payment of any dividend or other distribution (whether in
cash, stock or property) with respect to any Burlington Capital Stock or
any repurchase for value by Burlington of any Burlington Capital Stock;
(iii) prior to the date of this Agreement, any split,
combination or reclassification of any Burlington Capital Stock or any
issuance or the authorization of any issuance of any other securities in
respect of, in lieu of or in substitution for shares of Burlington Capital
Stock;
(iv) prior to the date of this Agreement, (A) any granting
by Burlington to any director or executive officer of Burlington of any
increase in compensation, except in the ordinary course of business
consistent with prior practice or as was required under employment
agreements included in the Burlington SEC Documents, (B) any granting by
Burlington to any such director or executive officer of any increase in
severance or termination pay, except as was required under any employment,
severance or termination agreements included in the Burlington SEC
Documents, or (C) any entry by Burlington into, or any amendment of, any
employment, severance or termination agreement with any such director or
executive officer; or
(v) prior to the date of this Agreement, any change in
financial accounting methods, principles or practices by Burlington or any
of its Subsidiaries materially affecting the consolidated assets,
liabilities or results of operations of Burlington, except insofar as may
have been required by a change in GAAP.
(h) Legal Proceedings. There is no suit, action or proceeding or
investigation pending or, to the knowledge of Burlington, threatened,
against or affecting Burlington or any of its Subsidiaries that would,
individually or in the aggregate, reasonably be expected to have a Material
Adverse Effect on Burlington, nor is there any judgment, decree,
injunction, rule or order of any Governmental Entity or arbitrator
outstanding against Burlington or its Subsidiaries having, or which would
reasonably be expected to have, any such effect.
(i) Compliance with Applicable Law. Burlington and each of its
Subsidiaries hold all licenses, franchises, permits and authorizations
necessary for the lawful conduct of their respective businesses under and
pursuant to each, and have complied in all respects with and are not in
default in any material respect under any, applicable law, statute, order,
rule, regulation, policy and/or guideline of any Governmental Entity
relating to Burlington or any of its Subsidiaries, except where the failure
to hold such license, franchise, permit or authorization or such
noncompliance or default would not, either individually or in the
aggregate, reasonably be expected to have a Material Adverse Effect on
Burlington.
(j) Environmental Liability. Except for matters that individually
or in the aggregate, would not have a Material Adverse Effect on
Burlington, (i) Burlington and each of its Subsidiaries are and have been
in compliance with all applicable Environmental Laws and have obtained or
applied for all Environmental Permits necessary for their operations as
currently conducted; (ii) there have been no Releases of any Hazardous
Materials that could be reasonably likely to form the basis of any
Environmental Claim against Burlington or any of its Subsidiaries; (iii)
there are no Environmental Claims pending or, to the knowledge of
Burlington, threatened against Burlington or any of its Subsidiaries; (iv)
none of Burlington and its Subsidiaries is subject to any agreement, order,
judgment, decree, letter or memorandum by or with any Governmental Entity
or third party imposing any liability or obligation under any Environmental
Law; and (v) none of Burlington and its Subsidiaries has retained or
assumed, either contractually or by operation of law, any liability or
obligation that could reasonably be expected to have formed the basis of
any Environmental Claim against Burlington or any of its Subsidiaries.
(k) Employee Benefit Plans; Labor Matters. (i) With respect to
each material U.S. Burlington Benefit Plan, Burlington has made available
(or, if it has not made available, will promptly after the date hereof make
available) to ConocoPhillips a correct and complete copy of each writing
constituting such U.S. Burlington Benefit Plan. The Internal Revenue
Service has issued a favorable determination letter with respect to each
U.S. Burlington Benefit Plan that is intended to be a "qualified plan"
within the meaning of Section 401(a) of the Code and the related trust that
has not been revoked, and, to the knowledge of Burlington, there are no
existing circumstances and no events have occurred that could result in the
revocation of such favorable determination letter.
(ii) Except as would not reasonably be expected,
individually or in the aggregate, to have a Material Adverse Effect on
Burlington, (A) each of the U.S. Burlington Benefit Plans has been operated
and administered in all material respects in accordance with applicable law
and administrative rules and regulations of any Governmental Entity,
including, but not limited to, ERISA and the Code, and (B) there are no
pending or, to the knowledge of Burlington, threatened claims (other than
claims for benefits in the ordinary course), lawsuits or arbitrations that
have been asserted or instituted, and, to the knowledge of Burlington, no
set of circumstances exists that may reasonably give rise to a claim or
lawsuit, against the U.S. Burlington Benefit Plans, any fiduciaries thereof
with respect to their duties to the U.S. Burlington Benefit Plans or the
assets of any of the trusts under any of the U.S. Burlington Benefit Plans
that could reasonably be expected to result in any material liability of
Burlington or any of its Subsidiaries to the PBGC, the U.S. Department of
the Treasury, the U.S. Department of Labor, any U.S. Burlington Benefit
Plan, any participant in a U.S. Burlington Benefit Plan, or any other
party.
(iii) There do not now exist, and to the knowledge of
Burlington, there are no existing circumstances that could reasonably be
expected to result in, any liabilities under Title IV or Section 302 of
ERISA or Section 412 or 4971 of the Code (other than for payments of
premium contributions in the ordinary course to the PBGC) that,
individually or in the aggregate, would reasonably be expected to have a
Material Adverse Effect on Burlington. Except as would not reasonably be
expected, individually or in the aggregate, to have a Material Adverse
Effect on Burlington, to the knowledge of Burlington, Burlington and each
of its Subsidiaries has reserved the right to amend, terminate or modify at
any time all plans or arrangements providing for retiree health or life
insurance coverage.
(iv) As of the date of this Agreement, neither Burlington
nor any of its Subsidiaries is a party to any material collective
bargaining or other labor union contract applicable to individuals employed
by Burlington or any of its Subsidiaries, and no such collective bargaining
agreement or other labor union contract is being negotiated by Burlington
or any of its Subsidiaries. Except as would not, individually or in the
aggregate, reasonably be expected to have a Material Adverse Effect on
Burlington, (A) there is no labor dispute, strike, slowdown or work
stoppage against Burlington or any of its Subsidiaries pending or, to the
knowledge of Burlington, threatened against Burlington or any of its
Subsidiaries and (B) no unfair labor practice or labor charge or complaint
is pending, or to the knowledge of Burlington, threatened with respect to
Burlington or any of its Subsidiaries.
(v) Except as would not reasonably be expected, individually
or in the aggregate, to have a Material Adverse Effect on Burlington,
Section 4.1(k)(v) of the Burlington Disclosure Schedule sets forth an
accurate and complete list of each U.S. Burlington Benefit Plan under which
the execution and delivery of this Agreement or the consummation of the
transactions contemplated hereby could (either alone or in conjunction with
any other event), result in, cause the accelerated vesting, funding or
delivery of, or increase the amount or value of, any payment or benefit to
any employee, officer or director of Burlington or any of its Subsidiaries,
or could limit the right of Burlington or any of its Subsidiaries to amend,
merge, terminate or receive a reversion of assets from any U.S. Burlington
Benefit Plan or related trust or any material employment agreement or
related trust. Except as set forth on Section 4.1(k)(v) of the Burlington
Disclosure Schedule, or as would not reasonably be expected, individually
or in the aggregate, to have a Material Adverse Effect on Burlington, no
amount paid or payable (whether in cash, in property, or in the form of
benefits, accelerated cash, property, or benefits, or otherwise) in
connection with the transactions contemplated hereby (either solely as a
result thereof or as a result of such transactions in conjunction with any
other event) will be an "excess parachute payment" within the meaning of
Section 280G of the Code.
(vi) All Foreign Burlington Benefit Plans comply with
applicable local law except as would not reasonably be expected,
individually or in the aggregate, to have a Material Adverse Effect.
Burlington and its subsidiaries have no unfunded liabilities with respect
to any such Foreign Burlington Benefit Plan that are not set forth in the
consolidate balance sheets included or incorporated by reference into the
company reports filed prior to the date hereof, except as would not
reasonably be expected, individually or in the aggregate, to have a
Material Adverse Effect. As of the date of this Agreement, there is no
pending or, to the knowledge of Burlington, threatened material litigation
relating to the Foreign Burlington Benefit Plans, except as would not
reasonably be expected, individually or in the aggregate, to have a
Material Adverse Effect.
(l) Taxes. (i) Each of Burlington and its Subsidiaries has duly
and timely filed all Tax Returns required to be filed by it, and all such
Tax Returns are true, complete and accurate in all respects, except to the
extent that any failure to have filed or any inaccuracies in such Tax
Returns would not, individually or in the aggregate, reasonably be expected
to have a Material Adverse Effect on Burlington. Burlington and each of its
Subsidiaries has paid all Taxes required to be paid by it, and has paid all
Taxes that it was required to withhold from amounts owing to any employee,
creditor or third party, except to the extent that any failure to pay such
Taxes would not, individually or in the aggregate, reasonably be expected
to have a Material Adverse Effect on Burlington. There are no pending or,
to the knowledge of Burlington, threatened audits, examinations,
investigations, deficiencies, claims or other proceedings in respect of
Taxes relating to Burlington or any of its Subsidiaries, except for those
that would not, individually or in the aggregate, reasonably be expected to
have a Material Adverse Effect on Burlington. There are no Liens for Taxes
upon the assets of Burlington or any of its Subsidiaries, other than Liens
for current Taxes not yet due and Liens for Taxes that would not,
individually or in the aggregate, reasonably be expected to have a Material
Adverse Effect on Burlington. Neither Burlington nor any of its
Subsidiaries has requested any extension of time within which to file any
Tax Returns in respect of any taxable year that have not since been filed,
nor made any request for waivers of the time to assess any Taxes that are
pending or outstanding, except where such request or waiver would not,
individually or in the aggregate, reasonably be expected to have a Material
Adverse Effect on Burlington. Neither Burlington nor any of its
Subsidiaries has any liability for Taxes of any Person (other than
Burlington and its Subsidiaries) under Treasury Regulation Section 1.1502-6
(or any comparable provision of U.S. state or local or foreign law), except
as would not, individually or in the aggregate, reasonably be expected to
have a Material Adverse Effect on Burlington. Neither Burlington nor any of
its Subsidiaries is a party to any Tax sharing agreement (with any Person
other than Burlington and/or any of its Subsidiaries), except as would not,
individually or in the aggregate, reasonably be expected to have a Material
Adverse Effect on Burlington.
(ii) Neither Burlington nor any of its Subsidiaries has
constituted either a "distributing corporation" or a "controlled
corporation" within the meaning of Section 355(a)(1)(A) of the Code in a
distribution of stock intended to qualify for tax-free treatment under
Section 355 of the Code (other than a distribution of a Burlington
Subsidiary by a Burlington Subsidiary to Burlington or another Burlington
Subsidiary) (A) in the two years prior to the date of this Agreement (or
will constitute such a corporation in the two years prior to the Closing
Date) or (B) in a distribution that otherwise constitutes part of a "plan"
or "series of related transactions" within the meaning of Section 355(e) of
the Code in conjunction with the Merger.
(m) Contracts.
(i) As of the date of this Agreement, neither Burlington nor
any of its Subsidiaries is a party to or bound by any contract,
arrangement, commitment or understanding (whether written or oral) (A)
which is a "material contract" (as such term is defined in Item 601(b)(10)
of Regulation S-K of the SEC) to be performed after the date of this
Agreement that has not been filed or incorporated by reference in the
Burlington SEC Documents, or (B) which materially restricts the conduct of
any line of business by Burlington. Each contract, arrangement, commitment
or understanding of the type described in clause (A) of this Section
4.1(m), whether or not set forth in the Burlington Disclosure Schedule or
in the Burlington SEC Documents, is referred to herein as a "Burlington
Contract" (for purposes of clarification, each "material contract" (as such
term is defined in Item 601(b)(10) of Regulation S-K of the SEC) to be
performed after the date of this Agreement, whether or not filed with the
SEC, is a Burlington Contract).
(ii) (A) Each Burlington Contract is valid and binding on
Burlington and any of its Subsidiaries that is a party thereto, as
applicable, and in full force and effect (subject to the effects of
bankruptcy, insolvency, fraudulent conveyance, reorganization, moratorium
and other similar laws relating to or affecting creditors' rights
generally, and general equitable principles (whether considered in a
proceeding in equity or at law)), (B) Burlington and each of its
Subsidiaries has in all material respects performed all obligations
required to be performed by it to date under each Burlington Contract,
except where such noncompliance, either individually or in the aggregate,
would not reasonably be expected to have a Material Adverse Effect on
Burlington, and (C) neither Burlington nor any of its Subsidiaries knows
of, or has received notice of, the existence of any event or condition
which constitutes, or, after notice or lapse of time or both, will
constitute, a material default on the part of Burlington or any of its
Subsidiaries under any such Burlington Contract, except where such default,
either individually or in the aggregate, would not reasonably be expected
to have a Material Adverse Effect on Burlington.
(n) Reorganization under the Code. As of the date of this
Agreement, neither Burlington nor any of its Subsidiaries has taken or
agreed to take any action or knows of any fact that is reasonably likely to
prevent or impede (i) the Merger from qualifying as a "reorganization"
within the meaning of Section 368(a) of the Code, or (ii) the ability of
counsel to render the opinions described in Sections 7.2(c) and 7.3(c) of
this Agreement.
(o) Form S-4; Proxy Statement/Prospectus. None of the information
to be supplied by Burlington or its Subsidiaries in the Form S-4 or the
Proxy Statement/Prospectus will, at the time of the mailing of the Proxy
Statement/Prospectus and any amendments or supplements thereto, and at the
time of the Burlington Stockholders Meeting, contain any untrue statement
of a material fact or omit to state any material fact required to be stated
therein or necessary in order to make the statements therein, in the light
of the circumstances under which they are made, not misleading. The Proxy
Statement/Prospectus will comply, as of its mailing date, as to form in all
material respects with all applicable law, including the provisions of the
Securities Act and the Exchange Act, except that no representation is made
by Burlington with respect to information supplied by ConocoPhillips for
inclusion therein.
(p) State Takeover Laws; Rights Plan. The Board of Directors of
Burlington has approved this Agreement and the transactions contemplated by
this Agreement as required under any applicable state takeover laws so that
any such state takeover laws will not apply to this Agreement or any of the
transactions contemplated hereby. Burlington has taken all action, if any,
necessary or appropriate so that the entering into of this Agreement, and
the consummation of the transactions contemplated hereby, do not and will
not result in the ability of any person to exercise any Burlington Rights
under the Burlington Rights Agreement or enable or require the Burlington
Rights to separate from the shares of Burlington Common Stock to which they
are attached or to be triggered or become exercisable. No "Distribution
Date" or "Stock Acquisition Date" (as such terms are defined in the
Burlington Rights Agreement) has occurred.
(q) Opinion of Financial Advisors. Burlington has received the
opinions of Morgan Stanley & Co. Incorporated and J.P. Morgan Chase & Co.,
dated the date hereof, to the effect that the Merger Consideration to be
received by holders of Burlington Common Stock in the Merger is fair to
such stockholders from a financial point of view.
(r) Board Approval. The Board of Directors of Burlington, at a
meeting duly called and held, has by unanimous vote of those directors
present (i) determined that this Agreement and the transactions
contemplated hereby are advisable and in the best interests of Burlington
stockholders, (ii) approved this Agreement and (iii) recommended that this
Agreement be adopted by the holders of Burlington Common Stock.
(s) Brokers' Fees. Neither Burlington nor any of its Subsidiaries
nor any of their respective officers or directors has employed any broker
or finder or incurred any liability for any brokers' fees, commissions or
finders' fees in connection with the transactions contemplated by this
Agreement, excluding fees to be paid to Morgan Stanley & Co. Incorporated
and J.P. Morgan Chase & Co.
(t) Ownership of ConocoPhillips Capital Stock. As of the date of
this Agreement, Burlington does not beneficially own any shares of
ConocoPhillips Capital Stock.
4.2 Representations and Warranties of ConocoPhillips. Except as
disclosed in the ConocoPhillips Disclosure Schedule (subject to the last
sentence of Section 9.3(a)) or in the ConocoPhillips SEC Documents filed
with the SEC prior to the date of this Agreement, ConocoPhillips hereby
represents and warrants to Burlington as follows:
(a) Corporate Organization. (i) ConocoPhillips is a corporation
duly organized, validly existing and in good standing under the laws of the
State of Delaware. ConocoPhillips has the corporate power and authority to
own or lease all of its properties and assets and to carry on its business
as it is now being conducted, and is duly licensed or qualified to do
business in each jurisdiction in which the nature of the business conducted
by it or the character or location of the properties and assets owned or
leased by it makes such licensing or qualification necessary, except where
the failure to be so licensed or qualified would not, either individually
or in the aggregate, have a Material Adverse Effect on ConocoPhillips. True
and complete copies of the Restated Certificate of Incorporation and the
By-Laws of ConocoPhillips, as in effect as of the date of this Agreement,
have previously been made available by ConocoPhillips to Burlington.
(ii) Each Subsidiary of ConocoPhillips (A) is duly organized
and validly existing under the laws of its jurisdiction of organization,
(B) is duly qualified to do business and in good standing in all
jurisdictions (whether federal, state, local or foreign) where its
ownership or leasing of property or the conduct of its business requires it
to be so qualified and (C) has all requisite corporate power and authority
to own or lease its properties and assets and to carry on its business as
now conducted, in each case, except as would not, individually or in the
aggregate, have a Material Adverse Effect on ConocoPhillips.
(iii) Merger Sub was formed by ConocoPhillips solely for the
purpose of engaging in the transactions contemplated hereby and has engaged
in no business and has incurred no liabilities other than in connection
with the transactions contemplated by this Agreement.
(b) Capitalization. (i) The authorized capital stock of
ConocoPhillips consists of (A) 2,500,000,000 shares of ConocoPhillips
Common Stock, of which, as of December 8, 2005, 1,423,689,904 shares were
issued and outstanding and 32,080,000 shares were held in treasury and (B)
500,000,000 shares of ConocoPhillips Preferred Stock, of which no shares
are issued and outstanding. From December 8, 2005 to the date of this
Agreement, no shares of ConocoPhillips Capital Stock have been issued
except pursuant to the employee and director stock plans of ConocoPhillips
(the "ConocoPhillips Stock Plans"). All issued and outstanding shares of
ConocoPhillips Common Stock have been duly authorized and validly issued
and are fully paid, nonassessable and free of preemptive rights, with no
personal liability attaching to the ownership thereof. As of the date of
this Agreement, except pursuant to the terms of stock options and other
stock awards issued pursuant to ConocoPhillips Stock Plans and pursuant to
the ConocoPhillips Rights, ConocoPhillips does not have and is not bound by
any outstanding subscriptions, options, warrants, calls, commitments or
agreements of any character calling for the purchase or issuance of any
shares of ConocoPhillips Capital Stock or any other equity securities of
ConocoPhillips or any securities of ConocoPhillips representing the right
to purchase or otherwise receive any shares of ConocoPhillips Capital
Stock. As of November 30, 2005, no shares of ConocoPhillips Capital Stock
were reserved for issuance, except for 132,170,899 shares of ConocoPhillips
Common Stock reserved for issuance upon the exercise of stock options
pursuant to the ConocoPhillips Stock Plans and in respect of the employee
and director savings, compensation and deferred compensation plans
described in the ConocoPhillips 2004 10-K and 5,000,000 shares of Series A
Junior Participating Preferred Stock reserved for issuance in connection
with the ConocoPhillips Rights Agreement. ConocoPhillips has no Voting Debt
issued or outstanding. As of December 3, 2005, 58,149,541 shares of
ConocoPhillips Common Stock are subject to ConocoPhillips Stock Options,
and no shares (other than those already included as issued and outstanding
as per clause (i)(A) above) of ConocoPhillips Common Stock are subject to
ConocoPhillips restricted stock awards. Since December 8, 2005, except as
permitted by this Agreement, (i) no ConocoPhillips Common Stock has been
issued except in connection with the exercise of issued and outstanding
ConocoPhillips Stock Options and (ii) no options, warrants, securities
convertible into, or commitments made with respect to the issuance of,
shares of ConocoPhillips Common Stock have been issued, granted or made.
The shares of ConocoPhillips Common Stock issued pursuant to the Merger,
when issued in accordance with the terms hereof, will be duly authorized,
validly issued, fully paid and nonassessable and not subject to preemptive
rights.
(i) The authorized capital stock of Merger Sub consists of
100 shares of common stock, par value $0.01 per share, all of which are
validly issued, fully paid and nonassessable, and are owned by
ConocoPhillips free and clear of any Liens.
(c) Authority; No Violation.
(i) Each of ConocoPhillips and Merger Sub has full corporate
power and authority to execute and deliver this Agreement and to consummate
the transactions contemplated hereby. The execution and delivery of this
Agreement and the consummation of the transactions contemplated hereby have
been duly and validly approved by the Board of Directors of each of
ConocoPhillips and Merger Sub. ConocoPhillips, as sole stockholder of
Merger Sub, has approved and adopted this Agreement and the transactions
contemplated hereby. No other corporate proceedings on the part of
ConocoPhillips or Merger Sub are necessary to approve this Agreement and to
consummate the transactions contemplated hereby. This Agreement has been
duly and validly executed and delivered by each of ConocoPhillips and
Merger Sub and (assuming due authorization, execution and delivery by
Burlington) constitutes a valid and binding obligation of ConocoPhillips
and Merger Sub, enforceable against ConocoPhillips and Merger Sub in
accordance with its terms, subject to the effects of bankruptcy,
insolvency, fraudulent conveyance, reorganization, moratorium and other
similar laws relating to or affecting creditors' rights generally, and
general equitable principles (whether considered in a proceeding in equity
or at law).
(ii) Neither the execution and delivery of this Agreement by
ConocoPhillips and Merger Sub nor the consummation by ConocoPhillips and
Merger Sub of the transactions contemplated hereby, nor compliance by
ConocoPhillips and Merger Sub with any of the terms or provisions hereof,
will (A) violate any provision of the Restated Certificate of Incorporation
or the By-Laws of ConocoPhillips or the Certificate of Incorporation or
By-Laws of Merger Sub, or (B) assuming that the consents and approvals
referred to in Section 4.2(d) are duly obtained, (I) violate any statute,
code, ordinance, rule, regulation, judgment, order, writ, decree or
injunction applicable to ConocoPhillips or any of its Subsidiaries or any
of their respective properties or assets or (II) violate, conflict with,
result in a breach of any provision of or the loss of any benefit under,
constitute a default (or an event that, with notice or lapse of time, or
both, would constitute a default) under, result in the termination of or a
right of termination or cancellation under, accelerate the performance
required by, accelerate any right or benefit provided by, or result in the
creation of any Lien upon any of the respective properties or assets of
ConocoPhillips or any of its Subsidiaries under, any of the terms,
conditions or provisions of any ConocoPhillips Contract, except (in the
case of clause (B) above) for such violations, conflicts, breaches, losses,
defaults, terminations, cancellations, accelerations or Liens that, either
individually or in the aggregate, would not have a Material Adverse Effect
on ConocoPhillips or the Surviving Corporation.
(d) Consents and Approvals. Except for (i) compliance with any
applicable requirements under the HSR Act, (ii) compliance with any
applicable requirements under the EC Merger Regulation, (iii) compliance
with any applicable requirements under the Canadian Investment Regulations,
(iv) compliance with any applicable requirements under any other Regulatory
Law, (v) the filing with the SEC of the Proxy Statement/Prospectus and the
Form S-4, (vi) the filing of the Certificate of Merger pursuant to the
DGCL, (vii) any consents, authorizations, approvals, filings or exemptions
in connection with compliance with the rules of the NYSE, (viii) such
filings and approvals as are required to be made or obtained under the
securities or "Blue Sky" laws of various states in connection with the
issuance of the shares of ConocoPhillips Common Stock pursuant to this
Agreement (the consents, approvals, filings and registration required under
or in relation to clauses (ii) through (viii) above, "ConocoPhillips
Necessary Consents") and (ix) such other consents, approvals, filings and
registrations the failure of which to obtain or make would not,
individually or in the aggregate, reasonably be expected to have a Material
Adverse Effect on ConocoPhillips, no consents or approvals of or filings or
registrations with any Governmental Entity are necessary in connection with
(A) the execution and delivery by ConocoPhillips of this Agreement and (B)
the consummation by ConocoPhillips and Merger Sub of the transactions
contemplated by this Agreement.
(e) Financial Reports and SEC Documents.
(i) The ConocoPhillips 2004 10-K and all other reports,
registration statements, definitive proxy statements or information
statements filed or to be filed by ConocoPhillips or any of its
Subsidiaries subsequent to December 31, 2004 under the Securities Act or
under Sections 13(a), 13(c), 14 and 15(d) of the Exchange Act in the form
filed, or to be filed, with the SEC (collectively, the "ConocoPhillips SEC
Documents"), (x) complied or will comply in all material respects as to
form with the applicable requirements under the Securities Act or the
Exchange Act, as the case may be, and (y) as of their respective filing
dates (except as amended or supplemented prior to the date of this
Agreement), (A) did not or will not contain any untrue statement of a
material fact or omit to state a material fact required to be stated
therein or necessary to make the statements made therein, in light of the
circumstances under which they were made, not misleading; and (B) each of
the balance sheets contained in or incorporated by reference into any such
ConocoPhillips SEC Document (including the related notes and schedules
thereto) fairly presents or will fairly present the financial position of
the entity or entities to which it relates as of its date, and each of the
statements of income and changes in stockholders' equity and cash flows or
equivalent statements in such ConocoPhillips SEC Documents (including any
related notes and schedules thereto) fairly presents or will fairly present
the results of operations, changes in stockholders' equity and changes in
cash flows, as the case may be, of the entity or entities to which it
relates for the periods to which it relates, in each case in accordance
with GAAP consistently applied during the periods involved, except, in each
case, as may be noted therein, subject to normal year-end audit adjustments
in the case of unaudited statements.
(ii) Except as set forth in Section 4.1(e)(ii) of the
ConocoPhillips Disclosure Schedule, the records, systems, controls, data
and information of ConocoPhillips and its respective Subsidiaries are
recorded, stored, maintained and operated under means that are under the
exclusive ownership and direct control of ConocoPhillips or its
Subsidiaries or accountants, except for any non-exclusive ownership and
non-direct control that would not reasonably be expected to have a
materially adverse effect on the system of internal accounting controls
described in the following sentence. ConocoPhillips and its Subsidiaries
have devised and maintain a system of internal accounting controls
sufficient to provide reasonable assurances regarding the reliability of
financial reporting and the preparation of financial statements for
external purposes in accordance with GAAP, including that: (1) transactions
are executed only in accordance with management's authorization; (2)
transactions are recorded as necessary to permit preparation of the
financial statements of ConocoPhillips and its Subsidiaries and to maintain
accountability for the assets of ConocoPhillips and its Subsidiaries; (3)
access to such assets is permitted only in accordance with management's
authorization; (4) the reporting of such assets is compared with existing
assets at regular intervals; and (5) accounts, notes and other receivables
and inventory are recorded accurately, and proper and adequate procedures
are implemented to effect the collection thereof on a current and timely
basis. Each of ConocoPhillips and its Subsidiaries (1) has designed
disclosure controls and procedures (within the meaning of Rules 13a-15(e)
and 15d-15(e) of the Exchange Act) to ensure that material information
relating to such entity and its Subsidiaries is made known to the
management of such entity (or its general partner) by others within those
entities as appropriate to allow timely decisions regarding required
disclosure and to make the certifications required by the Exchange Act with
respect to the ConocoPhillips SEC Documents, and (2) has disclosed, based
on its most recent evaluation prior to the date of this Agreement, to its
auditors and the audit committee of its Board of Directors (A) any
significant deficiencies in the design or operation of internal controls
which could adversely affect in any material respect its ability to record,
process, summarize and report financial data and have disclosed to its
auditors any material weaknesses in internal controls and (B) any fraud,
whether or not material, that involves management or other employees who
have a significant role in its internal controls.
(iii) Since December 31, 2004, through the date hereof, to
the knowledge of ConocoPhillips, (x) neither ConocoPhillips nor any of its
Subsidiaries nor any director, officer, employee, auditor, accountant or
representative of ConocoPhillips or any of its Subsidiaries has received or
otherwise had or obtained knowledge of any material complaint, allegation,
assertion or claim, whether written or oral, regarding the accounting or
auditing practices, procedures, methodologies or methods of ConocoPhillips
or any of its Subsidiaries or their respective internal accounting
controls, including any material complaint, allegation, assertion or claim
that ConocoPhillips or any of its Subsidiaries has engaged in questionable
accounting or auditing practices, and (y) no attorney representing
ConocoPhillips or any of its Subsidiaries, whether or not employed by
ConocoPhillips or any of its Subsidiaries, has reported evidence of a
material violation of securities laws, breach of fiduciary duty or similar
violation by ConocoPhillips or any of its officers, directors, employees or
agents to the ConocoPhillips Board of Directors or any committee thereof or
to the General Counsel or Chief Executive Officer of ConocoPhillips.
(iv) ConocoPhillips is in compliance in all material
respects with the provisions of the Sarbanes-Oxley Act that are applicable
to ConocoPhillips.
(f) Absence of Undisclosed Liabilities. Neither ConocoPhillips
nor any of its Subsidiaries had at September 30, 2005, or has incurred
since that date through the date hereof, any liabilities or obligations
(whether absolute, accrued, contingent or otherwise) of any nature, except
(i) liabilities, obligations or contingencies that (A) are accrued or
reserved against in the financial statements in the ConocoPhillips
September 10-Q or reflected in the notes thereto or (B) were incurred in
the ordinary course of business, (ii) liabilities, obligations or
contingencies that (A) would not, individually or in the aggregate,
reasonably be expected to have a Material Adverse Effect on ConocoPhillips,
or (B) have been discharged or paid in full prior to the date hereof, and
(iii) liabilities, obligations and contingencies that are of a nature not
required to be reflected in the consolidated financial statements of
ConocoPhillips and its Subsidiaries prepared in accordance with GAAP
consistently applied.
(g) Absence of Certain Changes or Events. Since September 30,
2005, ConocoPhillips has conducted its business only in the ordinary
course, and since such date there has not been:
(i) any event, change, effect or development that,
individually or in the aggregate, has had or would reasonably be expected
to have a Material Adverse Effect on ConocoPhillips;
(ii) prior to the date of this Agreement, any declaration,
setting aside or payment of any dividend or other distribution (whether in
cash, stock or property) with respect to any ConocoPhillips Capital Stock
or any repurchase for value by ConocoPhillips of any ConocoPhillips Capital
Stock (other than 11,990,000 shares of ConocoPhillips Common Stock
repurchased by ConocoPhillips during October and November of 2005);
(iii) prior to the date of this Agreement, any split,
combination or reclassification of any ConocoPhillips Capital Stock or any
issuance or the authorization of any issuance of any other securities in
respect of, in lieu of or in substitution for shares of ConocoPhillips
Capital Stock;
(iv) prior to the date of this Agreement, (A) any granting
by ConocoPhillips to any director or executive officer of ConocoPhillips of
any increase in compensation, except in the ordinary course of business
consistent with prior practice or as was required under employment
agreements included in the ConocoPhillips SEC Documents, (B) any granting
by ConocoPhillips to any such director or executive officer of any increase
in severance or termination pay, except as was required under any
employment, severance or termination agreements included in the
ConocoPhillips SEC Documents, or (C) any entry by ConocoPhillips into, or
any amendment of, any employment, severance or termination agreement with
any such director or executive officer; or
(v) prior to the date of this Agreement, any change in
financial accounting methods, principles or practices by ConocoPhillips or
any of its Subsidiaries materially affecting the consolidated assets,
liabilities or results of operations of ConocoPhillips, except insofar as
may have been required by a change in GAAP.
(h) Legal Proceedings. There is no suit, action or proceeding or
investigation pending or, to the knowledge of ConocoPhillips, threatened,
against or affecting ConocoPhillips or any of its Subsidiaries that would,
individually or in the aggregate, reasonably be expected to have a Material
Adverse Effect on ConocoPhillips, nor is there any judgment, decree,
injunction, rule or order of any Governmental Entity or arbitrator
outstanding against ConocoPhillips or its Subsidiaries having, or which
would reasonably be expected to have, any such effect.
(i) Compliance with Applicable Law. ConocoPhillips and each of
its Subsidiaries hold all licenses, franchises, permits and authorizations
necessary for the lawful conduct of their respective businesses under and
pursuant to each, and have complied in all respects with and are not in
default in any material respect under any, applicable law, statute, order,
rule, regulation, policy and/or guideline of any Governmental Entity
relating to ConocoPhillips or any of its Subsidiaries, except where the
failure to hold such license, franchise, permit or authorization or such
noncompliance or default would not, either individually or in the
aggregate, reasonably be expected to have a Material Adverse Effect on
ConocoPhillips.
(j) Environmental Liability. Except for matters that individually
or in the aggregate, would not have a Material Adverse Effect on
ConocoPhillips, (i) ConocoPhillips and each of its Subsidiaries are and
have been in compliance with all applicable Environmental Laws and have
obtained or applied for all Environmental Permits necessary for their
operations as currently conducted; (ii) there have been no Releases of any
Hazardous Materials that could be reasonably likely to form the basis of
any Environmental Claim against ConocoPhillips or any of its Subsidiaries;
(iii) there are no Environmental Claims pending or, to the knowledge of
ConocoPhillips, threatened against ConocoPhillips or any of its
Subsidiaries; (iv) none of ConocoPhillips and its Subsidiaries is subject
to any agreement, order, judgment, decree, letter or memorandum by or with
any Governmental Entity or third party imposing any liability or obligation
under any Environmental Law; and (v) none of ConocoPhillips and its
Subsidiaries has retained or assumed, either contractually or by operation
of law, any liability or obligation that could reasonably be expected to
have formed the basis of any Environmental Claim against ConocoPhillips or
any of its Subsidiaries.
(k) Taxes. Each of ConocoPhillips and its Subsidiaries has duly
and timely filed all Tax Returns required to be filed by it, and all such
Tax Returns are true, complete and accurate in all respects, except to the
extent that any failure to have filed or any inaccuracies in such Tax
Returns would not, individually or in the aggregate, reasonably be expected
to have a Material Adverse Effect on ConocoPhillips. ConocoPhillips and
each of its Subsidiaries has paid all Taxes required to be paid by it, and
has paid all Taxes that it was required to withhold from amounts owing to
any employee, creditor or third party, except to the extent that any
failure to pay such Taxes would not, individually or in the aggregate,
reasonably be expected to have a Material Adverse Effect on ConocoPhillips.
(l) Contracts.
(i) As of the date of this Agreement, neither ConocoPhillips
nor any of its Subsidiaries is a party to or bound by any contract,
arrangement, commitment or understanding (whether written or oral) (A)
which is a "material contract" (as such term is defined in Item 601(b)(10)
of Regulation S-K of the SEC) to be performed after the date of this
Agreement that has not been filed or incorporated by reference in the
ConocoPhillips SEC Documents, or (B) which materially restricts the ability
of ConocoPhillips or the Surviving Corporation to engage in any line of
business. Each contract, arrangement, commitment or understanding of the
type described in clause (A) of this Section 4.2(l), whether or not set
forth in the ConocoPhillips Disclosure Schedule or in the Burlington SEC
Documents, is referred to herein as a "ConocoPhillips Contract" (for
purposes of clarification, each "material contract" (as such term is
defined in Item 601(b)(10) of Regulation S-K of the SEC) to be performed
after the date of this Agreement, whether or not filed with the SEC, is a
ConocoPhillips Contract).
(ii) (A) Each ConocoPhillips Contract is valid and binding
on ConocoPhillips and any of its Subsidiaries that is a party thereto, as
applicable, and in full force and effect (subject to the effects of
bankruptcy, insolvency, fraudulent conveyance, reorganization, moratorium
and other similar laws relating to or affecting creditors' rights
generally, and general equitable principles (whether considered in a
proceeding in equity or at law)), (B) ConocoPhillips and each of its
Subsidiaries has in all material respects performed all obligations
required to be performed by it to date under each ConocoPhillips Contract,
except where such noncompliance, either individually or in the aggregate,
would not reasonably be expected to have a Material Adverse Effect on
ConocoPhillips, and (C) neither ConocoPhillips nor any of its Subsidiaries
knows of, or has received notice of, the existence of any event or
condition which constitutes, or, after notice or lapse of time or both,
will constitute, a material default on the part of ConocoPhillips or any of
its Subsidiaries under any such ConocoPhillips Contract, except where such
default, either individually or in the aggregate, would not reasonably be
expected to have a Material Adverse Effect on ConocoPhillips.
(m) Reorganization under the Code. As of the date of this
Agreement, neither ConocoPhillips nor any of its Subsidiaries has taken or
agreed to take any action or knows of any fact that is reasonably likely to
prevent or impede (i) the Merger from qualifying as a "reorganization"
within the meaning of Section 368(a) of the Code, or (ii) the ability of
counsel to render the opinions described in Sections 7.2(c) and 7.3(c) of
this Agreement.
(n) Form S-4; Proxy Statement/Prospectus. None of the information
to be supplied by ConocoPhillips or its Subsidiaries in the Form S-4 or the
Proxy Statement/ Prospectus will, at the time of the mailing of the Proxy
Statement/Prospectus and any amendments or supplements thereto, and at the
time of the Burlington Stockholders Meeting, contain any untrue statement
of a material fact or omit to state any material fact required to be stated
therein or necessary in order to make the statements therein, in the light
of the circumstances under which they are made, not misleading. The Proxy
Statement/Prospectus will comply, as of its mailing date, as to form in all
material respects with all applicable law, including the provisions of the
Securities Act and the Exchange Act, except that no representation is made
by ConocoPhillips with respect to information supplied by Burlington for
inclusion therein.
(o) State Takeover Laws; Rights Plan. The Board of Directors of
ConocoPhillips has approved this Agreement and the transactions
contemplated by this Agreement as required under any applicable state
takeover laws so that any such state takeover laws will not apply to this
Agreement or any of the transactions contemplated hereby. ConocoPhillips
has taken all action, if any, necessary or appropriate so that the entering
into of this Agreement, and the consummation of the transactions
contemplated hereby, do not and will not result in the ability of any
person to exercise any ConocoPhillips Rights under the ConocoPhillips
Rights Agreement or enable or require the ConocoPhillips Rights to separate
from the shares of ConocoPhillips Common Stock to which they are attached
or to be triggered or become exercisable. No "Distribution Date" or "Shares
Acquisition Date" (as such terms are defined in the ConocoPhillips Rights
Agreement) has occurred.
(p) Opinion of Financial Advisors. ConocoPhillips has received
the opinions of Goldman, Sachs & Co. and Citigroup Global Markets Inc.,
dated the date hereof, to the effect that the Merger Consideration is fair
to ConocoPhillips from a financial point of view.
(q) Board Approval. The Board of Directors of ConocoPhillips, at
a meeting duly called and held, has by unanimous vote of those directors
present (i) determined that this Agreement and the transactions
contemplated hereby are advisable and in the best interests of
ConocoPhillips stockholders and (ii) approved this Agreement.
(r) Brokers' Fees. Neither ConocoPhillips nor any of its
Subsidiaries nor any of their respective officers or directors has employed
any broker or finder or incurred any liability for any brokers' fees,
commissions or finders' fees in connection with the transactions
contemplated by this Agreement, excluding fees to be paid to Goldman, Sachs
& Co. and Citigroup Global Markets Inc.
(s) Ownership of Burlington Capital Stock. As of the date of this
Agreement, ConocoPhillips and Merger Sub do not beneficially own any shares
of Burlington Capital Stock.
ARTICLE V
COVENANTS RELATING TO CONDUCT OF BUSINESS
5.1 Covenants of Burlington. During the period from the date of
this Agreement and continuing until the Effective Time, Burlington agrees
as to itself and its Subsidiaries that (except (i) as expressly
contemplated or permitted by this Agreement or disclosed in the Burlington
Disclosure Schedule and (ii) for transactions between and among Burlington
and its wholly owned Subsidiaries), without the prior written consent of
ConocoPhillips, which shall not be unreasonably withheld or delayed:
(a) Ordinary Course. (i) Burlington and its Subsidiaries shall
carry on their respective businesses in the usual, regular and ordinary
course in all material respects, in substantially the same manner as
heretofore conducted, and shall use their reasonable best efforts to keep
available the services of their respective present officers and key
employees, preserve intact their present lines of business, maintain their
rights and franchises and preserve their relationships with customers,
suppliers and others having business dealings with them to the end that
their ongoing businesses shall not be impaired in any material respect at
the Effective Time.
(ii) Burlington shall not, and shall not permit any of its
Subsidiaries to, (A) enter into any new material line of business or (B)
incur or commit to any capital expenditures or any obligations or
liabilities in connection therewith other than capital expenditures and
obligations or liabilities in connection therewith incurred or committed to
in the ordinary course of business or contemplated by the 2005 and 2006
capital budgets of Burlington and previously disclosed to ConocoPhillips
and, with respect to the period commencing January 1, 2007, a capital
budget for the first six months of 2007 of $2.5 billion (the "Burlington
Capital Budgets").
(b) Dividends; Changes in Share Capital. Burlington shall not,
and shall not permit any of its Subsidiaries to, and shall not propose to,
(i) declare or pay any dividends on or make other distributions in respect
of any of its capital stock, except (A) the declaration and payment of
regular quarterly cash dividends not in excess of $0.10 per share of
Burlington Common Stock with usual record and payment dates for such
dividends in accordance with past dividend practice and (B) the declaration
and payment of regular dividends from a Subsidiary of Burlington to
Burlington or to another Subsidiary of Burlington in accordance with past
dividend practice, (ii) split, combine or reclassify any of its capital
stock or issue or authorize or propose the issuance of any other securities
in respect of, in lieu of or in substitution for, shares of its capital
stock or (iii) repurchase, redeem or otherwise acquire any shares of its
capital stock or any securities convertible into or exercisable for any
shares of its capital stock, except for the purchase from time to time by
Burlington of Burlington Common Stock in connection with the Burlington
Benefit Plans in the ordinary course of business.
(c) Issuance of Securities. Burlington shall not, and shall not
permit any of its Subsidiaries to, issue, deliver, sell, pledge or dispose
of, or authorize or propose the issuance, delivery, sale, pledge or
disposition of, any shares of its capital stock of any class, any Voting
Debt or any securities convertible into or exercisable for, or any rights,
warrants, calls or options to acquire, any such shares or Voting Debt, or
enter into any commitment, arrangement, undertaking or agreement with
respect to any of the foregoing, other than (i) the issuance of (x)
Burlington Common Stock upon the exercise of Burlington Stock Options
existing as of the date hereof or permitted to be granted after the date
hereof and in accordance with their terms or (y) restricted Burlington
Common Stock permitted to be granted after the date hereof, (ii) issuances,
sales or deliveries by a wholly owned Subsidiary of Burlington of capital
stock to such Subsidiary's parent or another wholly owned Subsidiary of
Burlington, (iii) pursuant to acquisitions and investments as disclosed in
Section 5.1(e) or 5.1(g) of the Burlington Disclosure Schedule or the
financings therefor, (iv) sales or dispositions of capital stock of a
Subsidiary of Burlington in connection with a disposition permitted
pursuant to Section 5.1(f) or (v) issuances or deliveries of capital stock
of Subsidiaries of Burlington in the ordinary course of business in
connection with joint venture agreements existing as of the date hereof.
(d) Governing Documents. Except to the extent required to comply
with its obligations hereunder or with applicable law, Burlington shall not
amend or propose to so amend its Certificate of Incorporation or By-Laws.
(e) No Acquisitions. Other than acquisitions in the ordinary
course of business that do not present a material risk of making it
materially more difficult to obtain any approval or authorization required
in connection with the Merger under Regulatory Law and that could not
reasonably be expected to prevent or materially delay or impede the
consummation of the transactions contemplated by this Agreement, Burlington
shall not, and shall not permit any of its Subsidiaries to, acquire or
agree to acquire by merger or consolidation, or by purchasing a substantial
equity interest in or a substantial portion of the assets of, or by any
other manner, any business or any corporation, partnership, association or
other business organization or division thereof or otherwise acquire or
agree to acquire any assets, provided, however, that any such acquisitions
permitted by this Section 5.1(e) shall be made only to the extent
contemplated by the Burlington Capital Budgets.
(f) No Dispositions. Other than dispositions referred to in the
Burlington SEC Documents filed prior to the date of this Agreement or as
contemplated by the Burlington Capital Budgets, Burlington shall not, and
shall not permit any of its Subsidiaries to, sell, lease or otherwise
dispose of, or agree to sell, lease or otherwise dispose of, any of its
assets (including capital stock of Subsidiaries of Burlington), other than
in the ordinary course of business and dispositions in the aggregate amount
of up to $50 million per year in fair market value.
(g) Investments; Indebtedness. Other than as contemplated by the
Burlington Capital Budgets, Burlington shall not, and shall not permit any
of its Subsidiaries to (i) enter into any material joint venture,
partnership or other similar arrangement, (ii) make any loans, advances or
capital contributions to, or investments in, any other Person, other than
(A) loans or investments by Burlington or a Subsidiary of Burlington to or
in Burlington or any Subsidiary of Burlington, (B) in the ordinary course
of business (provided that none of such transactions referred to in this
clause (B) presents a material risk of making it more difficult to obtain
any approval or authorization required in connection with the Merger under
Regulatory Law) and (C) any capital contributions to or other obligations
in respect of any joint ventures of Burlington or any of its Subsidiaries
pursuant to an agreement in existence on or prior to the date of this
Agreement, or (iii) except in the ordinary course, incur any indebtedness
for borrowed money or guarantee any such indebtedness of another Person,
issue or sell any debt securities or warrants or other rights to acquire
any debt securities of Burlington or any of its Subsidiaries, guarantee any
debt securities of another Person, enter into any "keep well" or other
agreement to maintain any financial statement condition of another Person
(other than any wholly owned Subsidiary) or enter into any arrangement
having the economic effect of any of the foregoing, other than refinancings
of pre-existing indebtedness.
(h) Tax-Free Qualification. Burlington shall use its reasonable
best efforts to, and to cause each of its Subsidiaries to, (i) cause the
Merger to qualify as a "reorganization" within the meaning of Section
368(a) of the Code and (ii) obtain the opinions of counsel referred to in
Sections 7.2(c) and 7.3(c). Burlington shall use its reasonable best
efforts not to, and shall use its reasonable best efforts not to permit any
of its Subsidiaries to, take any action (including any action otherwise
permitted by this Section 5.1) that would prevent or impede the Merger from
qualifying as a "reorganization" within the meaning of Section 368(a) of
the Code. Provided the opinion conditions contained in Sections 7.2(c) and
7.3(c) of this Agreement have been satisfied, Burlington shall report the
Merger for U.S. federal income tax purposes as a "reorganization" within
the meaning of Section 368(a) of the Code.
(i) Compensation. Except as required by applicable law or by the
terms of any collective bargaining agreement or other binding agreement
currently in effect, Burlington and its Significant Subsidiaries shall not,
other than in the ordinary course of business consistent with past
practice: (A) enter into, adopt, amend or terminate any Benefit Plan, (B)
increase the compensation or benefits payable to any current or former
employee, officer, director, or consultant of Burlington and its
Subsidiaries (including any such increase pursuant to any bonus, pension,
equity compensation, profit sharing or other plan or commitment) or pay any
amounts under such arrangements or Benefit Plans (including severance
arrangements) not otherwise due, (C) grant or accelerate the vesting of any
equity-based awards for the benefit of any current or former employee,
officer, director, or consultant of Burlington and its Subsidiaries, (D)
enter into any new, or amend any existing, collective bargaining agreement
or similar agreement with respect to Burlington and its Subsidiaries or any
employees thereof, (E) make contributions to tax-qualified pension plans
other than to the extent required by law or modify the actuarial
assumptions in effect with respect to any such plan or (F) provide any
funding for any rabbi trust or similar arrangement.
(j) Accounting Methods. Except as disclosed in Burlington SEC
Documents filed prior to the date of this Agreement, or as required by a
Governmental Entity, Burlington shall not change in any material respect
its methods of financial accounting in effect at September 30, 2005, except
as required by changes in GAAP as concurred in by Burlington's independent
public accountants. Burlington shall not make any material Tax election,
except for elections in the ordinary course of business.
(k) Non-Compete. Except as contemplated by Section 6.4,
Burlington shall not, and shall not permit any of its Subsidiaries to,
enter into any agreement that limits (other than in an insignificant
manner) the ability of Burlington or any of its Subsidiaries, or would
limit (other than in an insignificant manner) the ability of ConocoPhillips
or any Subsidiary of ConocoPhillips after the Effective Time, to compete in
or conduct any line of business or compete with any Person in any
geographic area or during any period, it being understood that any
restriction that by its terms does not extend more than six months beyond
the Effective Time shall be deemed to be insignificant.
(l) Certain Actions. Subject to Sections 6.5 and 8.1, Burlington
and its Subsidiaries shall not take any action or omit to take any action
for the purpose of preventing, delaying or impeding the consummation of the
Merger or the other transactions contemplated by this Agreement.
(m) Material Contracts. Burlington shall not, and shall not
permit any of its Subsidiaries to, (i) modify, amend or terminate any
Burlington Contract, (ii) waive any material rights under any Burlington
Contract or (iii) enter into any agreement that would constitute a
Burlington Contract if entered into as of the date of this Agreement other
than (with respect to clauses (i) and (iii)) in the ordinary course of
business consistent with past practice.
(n) Claims; Litigation. Burlington shall not, and shall not
permit any of its Subsidiaries to, settle or compromise any claim, demand,
lawsuit or state or federal regulatory proceeding, whether now pending or
hereafter made or brought, or waive, release or assign any rights or
claims, in any such case in an amount in excess of $10 million, provided
that ConocoPhillips will not unreasonably withhold its consent to any such
settlement or compromise.
(o) Intellectual Property. Burlington shall not, and shall not
permit any of its Subsidiaries to, take any action which would limit in any
material respect Burlington's or ConocoPhillips' freedom to license,
cross-license or otherwise dispose of any material intellectual property to
which Burlington has rights as of the date of this Agreement.
(p) Agreements with Governmental Entities. Burlington shall not,
nor shall it permit its Subsidiaries to, commit any act or omission which
constitutes a material breach or default by Burlington or any of its
Subsidiaries under any agreement with any Governmental Entity or under any
material contract or material license to which any of them is a party or by
which any of them or their respective properties is bound except to the
extent required by law.
(q) Extraordinary Action. Burlington shall not, and shall not
permit its Subsidiaries to, adopt a plan or agreement of complete or
partial liquidation, dissolution, merger, consolidation, restructuring,
recapitalization or other reorganization of Burlington or any of its
Subsidiaries.
(r) Rabbi Trust Funding. Burlington shall, or shall cause its
applicable Subsidiaries to, take all actions necessary to ensure that, with
respect to any future severance obligations (contingent or otherwise), no
"rabbi trust" funding, letter of credit or similar funding arrangement has
been, or shall be, required in connection with the execution of this
Agreement, the consummation of the transactions contemplated hereby, or any
other event or action related to this Agreement, or such transactions, and
any Burlington Benefit Plans, trust agreements, or documents (including the
Burlington Restated Benefits Protection Trust) that might otherwise have
required such funding shall be amended as necessary to ensure that no such
requirement shall take effect.
(s) Related Actions. Burlington shall not, and shall not permit
any of its Subsidiaries to, agree or commit to do any of the foregoing.
5.2 Covenants of ConocoPhillips. During the period from the date
of this Agreement and continuing until the Effective Time, ConocoPhillips
agrees as to itself and its Subsidiaries that (except (i) as expressly
contemplated or permitted by this Agreement or disclosed in the
ConocoPhillips Disclosure Schedule and (ii) for transactions between and
among ConocoPhillips and its wholly owned Subsidiaries), without the prior
written consent of Burlington, which shall not be unreasonably withheld or
delayed:
(a) Ordinary Course. ConocoPhillips and its Subsidiaries shall
carry on their respective businesses in the usual, regular and ordinary
course in all material respects, in substantially the same manner as
heretofore conducted, and shall use their reasonable best efforts to
preserve intact their present lines of business, maintain their rights and
franchises and preserve their relationships with customers, suppliers and
others having business dealings with them to the end that their ongoing
businesses shall not be impaired in any material respect at the Effective
Time.
(b) Dividends; Changes in Share Capital. ConocoPhillips shall
not, and shall not permit any of its Subsidiaries to, and shall not propose
to, (i) declare or pay any dividends on or make other distributions in
respect of any of its capital stock, except (A) the declaration and payment
of regular quarterly cash dividends with usual record and payment dates for
such dividends in accordance with past dividend practice and (B) the
declaration and payment of regular dividends from a Subsidiary of
ConocoPhillips to ConocoPhillips or to another Subsidiary of ConocoPhillips
in accordance with past dividend practice or (ii) repurchase, redeem or
otherwise acquire any shares of its capital stock or any securities
convertible into or exercisable for any shares of its capital stock, except
for the purchase from time to time by ConocoPhillips of ConocoPhillips
Common Stock in connection with the ConocoPhillips Benefit Plans in the
ordinary course of business or pursuant to an ordinary course stock
repurchase plan in the ordinary course.
(c) No Acquisitions. Other than acquisitions that do not present
a material risk of making it materially more difficult to obtain any
approval or authorization required in connection with the Merger under
Regulatory Law and that could not reasonably be expected to prevent or
materially delay or impede the consummation of the transactions
contemplated by this Agreement, ConocoPhillips shall not, and shall not
permit any of its Subsidiaries to, acquire or agree to acquire by merger or
consolidation, or by purchasing a substantial equity interest in or a
substantial portion of the assets of, or by any other manner, any business
or any corporation, partnership, association or other business organization
or division thereof or otherwise acquire or agree to acquire any assets.
(d) Tax-Free Qualification. ConocoPhillips shall use its
reasonable best efforts to, and to cause each of its Subsidiaries to, (i)
cause the Merger to qualify as a "reorganization" within the meaning of
Section 368(a) of the Code and (ii) obtain the opinions of counsel referred
to in Sections 7.2(c) and 7.3(c). ConocoPhillips shall use its reasonable
best efforts not to, and shall use its reasonable best efforts not to
permit any of its Subsidiaries to, take any action (including any action
otherwise permitted by this Section 5.2) that would prevent or impede the
Merger from qualifying as a "reorganization" within the meaning of Section
368(a) of the Code. Provided the opinion conditions contained in Sections
7.2(c) and 7.3(c) of this Agreement have been satisfied, ConocoPhillips
shall report the Merger for U.S. federal income tax purposes as a
"reorganization" within the meaning of Section 368(a) of the Code.
(e) Related Actions. ConocoPhillips shall not, and shall not
permit any of its Subsidiaries to, agree or commit to do any of the
foregoing.
5.3 Governmental Filings. ConocoPhillips and Burlington shall (a)
confer on a reasonable basis with each other and (b) report to each other
(to the extent permitted by applicable law or regulation or any applicable
confidentiality agreement) on operational matters. ConocoPhillips and
Burlington shall file all reports required to be filed by each of them with
the SEC (and all other Governmental Entities) between the date of this
Agreement and the Effective Time and shall, if requested by the other party
and (to the extent permitted by applicable law or regulation or any
applicable confidentiality agreement) deliver to the other party copies of
all such reports, announcements and publications promptly upon request.
5.4 Control of Other Party's Business. Nothing contained in this
Agreement shall give Burlington, directly or indirectly, the right to
control or direct ConocoPhillips' operations or give ConocoPhillips,
directly or indirectly, the right to control or direct Burlington's
operations prior to the Effective Time. Prior to the Effective Time, each
of ConocoPhillips and Burlington shall exercise, consistent with the terms
and conditions of this Agreement, complete control and supervision over its
respective operations.
ARTICLE VI
ADDITIONAL AGREEMENTS
6.1 Preparation of Proxy Statement; Stockholders Meeting. (a) As
promptly as reasonably practicable following the date hereof,
ConocoPhillips and Burlington shall cooperate in preparing and shall cause
to be filed with the SEC mutually acceptable proxy materials that shall
constitute the Proxy Statement/Prospectus and ConocoPhillips and Burlington
shall prepare, and ConocoPhillips shall file with the SEC, the Form S-4.
The Proxy Statement/Prospectus will be included as a prospectus in and will
constitute a part of the Form S-4 as ConocoPhillips' prospectus. Each of
ConocoPhillips and Burlington shall use reasonable best efforts to have the
Proxy Statement/Prospectus cleared by the SEC and the Form S-4 declared
effective by the SEC and to keep the Form S-4 effective as long as is
necessary to consummate the Merger and the transactions contemplated
hereby. ConocoPhillips and Burlington shall, as promptly as practicable
after receipt thereof, provide the other parties with copies of any written
comments, and advise each other of any oral comments, with respect to the
Proxy Statement/Prospectus or Form S-4 received from the SEC.
ConocoPhillips and Burlington shall cooperate and provide the other parties
with a reasonable opportunity to review and comment on any amendment or
supplement to the Proxy Statement/Prospectus and the Form S-4 prior to
filing such with the SEC, and each will provide each other parties with a
copy of all such filings made with the SEC. Notwithstanding any other
provision herein to the contrary, no amendment or supplement (including by
incorporation by reference) to the Proxy Statement/Prospectus or the Form
S-4 shall be made without the approval of both ConocoPhillips and
Burlington, which approval shall not be unreasonably withheld or delayed;
provided that, with respect to documents filed by a party hereto that are
incorporated by reference in the Form S-4 or Proxy Statement/Prospectus,
this right of approval shall apply only with respect to information
relating to the other party or its business, financial condition or results
of operations; and provided, further, that Burlington, in connection with a
Change in the Burlington Recommendation, may amend or supplement the Proxy
Statement/Prospectus or Form S-4 (including by incorporation by reference)
pursuant to a Qualifying Amendment to effect such a Change in the
Burlington Recommendation, and in such event, this right of approval shall
apply only with respect to information relating to the other party or its
business, financial condition or results of operations. Burlington will use
reasonable best efforts to cause the Proxy Statement/Prospectus to be
mailed to Burlington stockholders as promptly as practicable after the Form
S-4 is declared effective under the Securities Act. ConocoPhillips and
Burlington will advise the other party, promptly after it receives notice
thereof, of the time when the Form S-4 has become effective, the issuance
of any stop order, the suspension of the qualification of the
ConocoPhillips Common Stock issuable in connection with the Merger for
offering or sale in any jurisdiction, or any request by the SEC for
amendment of the Proxy Statement/Prospectus or the Form S-4. If, at any
time prior to the Effective Time, any information relating to
ConocoPhillips or Burlington, or any of their respective affiliates,
officers or directors, is discovered by ConocoPhillips or Burlington and
such information should be set forth in an amendment or supplement to any
of the Form S-4 or the Proxy Statement/Prospectus so that any of such
documents would not include any misstatement of a material fact or omit to
state any material fact necessary to make the statements therein, in light
of the circumstances under which they were made, not misleading, the party
hereto discovering such information shall promptly notify the other parties
and, to the extent required by law, rules or regulations, an appropriate
amendment or supplement describing such information shall be promptly filed
with the SEC and disseminated to the stockholders of ConocoPhillips and
Burlington.
(b) Burlington shall duly take all lawful action to call, give
notice of, convene and hold the Burlington Stockholders Meeting as soon as
practicable for the purpose of obtaining the Burlington Stockholder
Approval and, subject to Section 6.5, shall take all lawful action to
solicit the Burlington Stockholder Approval. The Board of Directors of
Burlington shall recommend the adoption of the plan of merger contained in
this Agreement by the Burlington stockholders to the effect as set forth in
Section 4.1(r) (the "Burlington Recommendation"), and shall not (i)
withdraw, modify or qualify (or propose to withdraw, modify or qualify) in
any manner adverse to ConocoPhillips the Burlington Recommendation or (ii)
take any action or make any statement in connection with the Burlington
Stockholders Meeting inconsistent with the Burlington Recommendation
(collectively, a "Change in the Burlington Recommendation"); provided,
however, that Burlington and the Board of Directors of Burlington may take
any action permitted under Section 6.5.
6.2 Governance Matters. ConocoPhillips shall take all requisite
action to, effective as of the Effective Time, (i) cause two directors
nominated by Burlington reasonably acceptable to ConocoPhillips to be
appointed to ConocoPhillips' Board of Directors and (ii) expand, to the
extent necessary in connection with appointing such two directors, the
ConocoPhillips' Board of Directors. ConocoPhillips shall use reasonable
best efforts consistent with DGCL requirements to ensure that (x) one such
nominee is a member of the class of ConocoPhillips' Board of Directors
whose term ends at the second annual meeting of ConocoPhillips stockholders
occurring after the Closing Date and (y) the other such nominee is a member
of the class of ConocoPhillips' Board of Directors whose term ends at the
third annual meeting of ConocoPhillips stockholders occurring after Closing
Date.
6.3 Access to Information. Upon reasonable notice, each of
ConocoPhillips and Burlington shall (and shall cause its Subsidiaries to)
afford to the officers, employees, accountants, counsel, financial advisors
and other representatives of the other party reasonable access during
normal business hours, during the period prior to the Effective Time, to
all its properties, books, contracts, commitments, records, officers and
employees and, during such period, each of ConocoPhillips and Burlington
shall (and shall cause its Subsidiaries to) furnish promptly to the other
party (a) a copy of each report, schedule, registration statement and other
document filed, published, announced or received by it during such period
pursuant to the requirements of U.S. federal or state securities laws or
the HSR Act, as applicable (other than documents that such party hereto is
not permitted to disclose under applicable law), and (b) all other
information concerning it and its business, properties and personnel as
such other party may reasonably request; provided, however, that any party
hereto may restrict the foregoing access to the extent that (i) any law,
treaty, rule or regulation of any Governmental Entity applicable to such
party or any contract requires such party or its Subsidiaries to restrict
or prohibit access to any such properties or information, (ii) counsel for
such party advises that such information should not be disclosed in order
to ensure compliance with the Antitrust Laws, (iii) the information is
subject to the attorney-client privilege, work product doctrine or any
other applicable privilege concerning pending or legal proceedings or
government investigations, or (iv) the information is subject to
confidentiality obligations to a third party. The parties hereto shall hold
any information obtained pursuant to this Section 6.3 in confidence in
accordance with, and shall otherwise be subject to, the provisions of the
confidentiality agreement dated December 5, 2005, between ConocoPhillips
and Burlington (the "Confidentiality Agreement"), which Confidentiality
Agreement shall continue in full force and effect. Any investigation by
either ConocoPhillips or Burlington shall not affect the representations
and warranties of the other party.
6.4 Required Actions. (a) Subject to the terms and conditions of
this Agreement, each party hereto will use its reasonable best efforts to
take, or cause to be taken, all actions, and do, or cause to be done, all
things necessary, proper or advisable under this Agreement and applicable
laws and regulations to consummate the Merger and the other transactions
contemplated by this Agreement as soon as practicable after the date
hereof, including (i) preparing as promptly as practicable all necessary
applications, notices, petitions, filings, ruling requests, and other
documents and to obtain as promptly as practicable all Burlington Necessary
Consents or ConocoPhillips Necessary Consents, as appropriate, and all
other consents, waivers, licenses, orders, registrations, approvals,
permits, rulings, authorizations and clearances necessary or advisable to
be obtained from any third party and/or any Governmental Entity in order to
consummate the Merger or any of the other transactions contemplated by this
Agreement (collectively, the "Required Approvals") and (ii) taking all
reasonable steps as may be necessary to obtain all such Necessary Consents
and the Required Approvals. In furtherance and not in limitation of the
foregoing, each of ConocoPhillips and Burlington agrees to prepare, as
promptly as practicable, and to make (A) an appropriate filing of a
Notification and Report Form pursuant to the HSR Act with respect to the
transactions contemplated hereby (within thirty (30) Business Days), (B)
appropriate filings with the European Commission, if required, in
accordance with applicable Regulatory Laws at such time as ConocoPhillips
reasonably determines in its judgment will permit the consummation of the
transactions contemplated hereby in a timely basis, and (C) all other
necessary filings with other Governmental Entities relating to the Merger
at such time as ConocoPhillips reasonably determines in its judgment will
permit the consummation of the transactions contemplated hereby in a timely
basis, and, to prepare to supply as promptly as practicable any additional
information or documentation that may be requested pursuant to such laws or
by such Governmental Entities, and to supply such additional information
and documentation at such time as ConocoPhillips reasonably determines in
its judgment will permit the consummation of the transactions contemplated
hereby in a timely basis and to use reasonable best efforts to cause the
expiration or termination of the applicable waiting periods under the HSR
Act and the receipt of Required Approvals under such other laws or from
such authorities as soon as practicable. In furtherance and not in
limitation of the foregoing, Burlington agrees not to extend any waiting
period under the HSR Act or enter into any agreement with the FTC or the
DOJ not to consummate the transactions contemplated by this Agreement,
except with the prior written consent of ConocoPhillips.
(b) The parties shall each cooperate and consult with each other
in connection with the actions referenced in Section 6.4(a) to obtain all
Required Approvals. In particular, Burlington shall (i) furnish as promptly
as reasonably practicable to ConocoPhillips any information concerning
Burlington and its business, properties and personnel as ConocoPhillips may
reasonably request, in connection with any filing or submission and in
connection with any investigation or other inquiry, including any
proceeding initiated by a private party, and (ii) permit ConocoPhillips to
review in advance, and accept all of ConocoPhillips' reasonable comments in
connection with, any proposed written communication between it and any
Governmental Entity. In addition, each party shall (i) promptly inform the
other party of (and supply to the other party) any communication (or other
correspondence or memoranda) received by such party from, or given by such
party to, the DOJ, the FTC or any other Governmental Entity and of any
material communication received or given in connection with any proceeding
by a private party, in each case regarding any of the transactions
contemplated hereby, and (ii) consult with the other party in advance, to
the extent practicable and not prohibited by law, of any meeting or
conference with the DOJ, the FTC or any other Governmental Entity or, in
connection with any proceeding by a private party, with any other Person,
and to the extent permitted by the DOJ, the FTC or such other applicable
Governmental Entity or other Person, give the other party the opportunity
to attend and participate in such meetings and conferences. In furtherance
and not in limitation of the foregoing, Burlington agrees that
notwithstanding anything to the contrary in this Agreement, ConocoPhillips
will take the lead in all meetings and communications with any Governmental
Entity in connection with any Antitrust Laws, including by determining the
appropriate timing of any such meeting or communication (including (x) the
timing of the submission of any filing with, or response to any request by,
a Governmental Entity, and (y) the timing of any action taken pursuant to
6.4(c)) such that the requisite approvals are obtained prior to the
Termination Date.
(c) In furtherance and not in limitation of the covenants of the
parties contained in Sections 6.4(a) and 6.4(b) but subject to Section
6.4(b), Burlington and ConocoPhillips, as applicable, shall take all
actions necessary to:
(i) avoid the entry of, or to have vacated or terminated,
any decree, order, or judgment that would restrain, prevent or delay the
Closing, on or before the Termination Date, including without limitation
defending through litigation on the merits any claim asserted in any court
by any Person; and
(ii) avoid or eliminate each and every impediment under any
Regulatory Law so as to enable the Closing to occur as soon as reasonably
possible (and in any event no later than the Termination Date), including,
without limitation, (x) proposing, negotiating, committing to and
effecting, by consent decree, hold separate order, or otherwise, the sale,
divestiture or disposition of such businesses, product lines or assets of
ConocoPhillips, Burlington and their respective Subsidiaries and (y)
otherwise taking or committing to take actions that after the Closing Date
would limit ConocoPhillips or its Subsidiaries' freedom of action with
respect to, or its or their ability to retain, one or more of the
businesses, product lines or assets of ConocoPhillips, Burlington and their
respective Subsidiaries, in each case as may be required in order to avoid
the entry of, or to effect the dissolution of, any injunction, temporary
restraining order, or other order in any suit or proceeding, which would
otherwise have the effect of preventing or materially delaying the Closing.
ConocoPhillips and, if requested by ConocoPhillips, Burlington shall agree
to divest, sell, dispose of, hold separate, or otherwise take or commit to
take any action that limits its freedom of action with respect to, or
ConocoPhillips or ConocoPhillips' Subsidiaries' ability to retain, any of
the businesses, product lines or assets of ConocoPhillips, Burlington or
any of their respective Subsidiaries, provided that any such action is
conditioned upon the consummation of the Merger. Burlington agrees and
acknowledges that, notwithstanding anything to the contrary in this Section
6.4, in connection with any filing or submission required, action to be
taken or commitment to be made by ConocoPhillips, Burlington or any of
their respective Subsidiaries to consummate the Merger or other
transactions contemplated by this Agreement, neither Burlington nor any of
Burlington's Subsidiaries shall, without ConocoPhillips' prior written
consent, sell, divest, or dispose of any assets, commit to any sale,
divestiture or disposal of businesses, product lines or assets of
Burlington and Burlington's Subsidiaries or take any other action or commit
to take any action that would limit Burlington's, ConocoPhillips' or any of
their respective Subsidiaries' freedom of action with respect to, or their
ability to retain any of, their businesses, product lines or assets;
provided that the foregoing shall not relieve any party of its obligations
under this Agreement.
(d) Each party hereto and its respective Board of Directors
shall, if any state takeover statute or similar statute becomes applicable
to this Agreement, the Merger or any other transactions contemplated
hereby, take all action reasonably necessary to ensure that the Merger and
the other transactions contemplated by this Agreement may be consummated as
promptly as practicable on the terms contemplated hereby and otherwise to
minimize the effect of such statute or regulation on this Agreement, the
Merger and the other transactions contemplated hereby.
6.5 Acquisition Proposals. (a) Burlington agrees that neither it
nor any of its Subsidiaries nor any of the officers and directors of it or
its Subsidiaries shall, and that it shall use its reasonable best efforts
to cause its and such Subsidiaries' employees, agents and representatives
(including any investment banker, attorney or accountant retained by it or
any of its Subsidiaries) not to, directly or indirectly, (i) initiate,
solicit, encourage or knowingly facilitate any inquiries or the making of
any proposal or offer with respect to, or a transaction to effect, a
merger, reorganization, share exchange, consolidation, business
combination, recapitalization, liquidation, dissolution or similar
transaction involving it, or any purchase or sale of 20% or more of the
consolidated assets (including stock of its Subsidiaries) of it and its
Subsidiaries, taken as a whole, or any purchase or sale of, or tender or
exchange offer for, its equity securities that, if consummated, would
result in any Person (or the stockholders of such Person) beneficially
owning securities representing 20% or more of its total voting power (or of
the surviving parent entity in such transaction) (any such proposal, offer
or transaction (other than a proposal or offer made by the other party or
an affiliate thereof) or announcement of an intention to make any such
proposal, offer or transaction, an "Acquisition Proposal"), (ii) have any
discussion with or provide any confidential information or data to any
Person relating to an Acquisition Proposal, or engage in any negotiations
concerning an Acquisition Proposal, or knowingly facilitate any effort or
attempt to make or implement an Acquisition Proposal, (iii) approve or
recommend, or propose publicly to approve or recommend, any Acquisition
Proposal or (iv) approve or recommend, or propose to approve or recommend,
or execute or enter into, any letter of intent, agreement in principle,
merger agreement, acquisition agreement, option agreement or other similar
agreement or propose publicly or agree to do any of the foregoing related
to any Acquisition Proposal.
(b) Notwithstanding anything in this Agreement to the contrary,
Burlington (and its Board of Directors) shall be permitted to (i) comply
with applicable law (including Rule 14d-9 and Rule 14e-2 or make any other
disclosure required by law or its fiduciary duties (subject, however to
clause (B), (C) and (E) of this Section 6.5(b)), (ii) effect a Change in
the Burlington Recommendation, or (iii) engage in discussions or
negotiations with, or provide any information to, any Person in response to
an unsolicited bona fide written Acquisition Proposal by any such Person,
if and only to the extent that, in any such case referred to in clause (ii)
or (iii) above, (A) the vote at the Burlington Stockholders Meeting on the
adoption of this Agreement shall not have been taken, (B) (I) in the case
of clause (ii) above, Burlington has received an unsolicited bona fide
written Acquisition Proposal from a third party and its Board of Directors
concludes in good faith that such Acquisition Proposal constitutes a
Superior Proposal and (II) in the case of clause (iii) above, Burlington's
Board of Directors concludes in good faith that there is a reasonable
likelihood that such Acquisition Proposal would lead to a Superior
Proposal, (C) prior to providing any information or data to any Person in
connection with an Acquisition Proposal by any such Person, Burlington's
Board of Directors receives from such Person an executed confidentiality
agreement having provisions that are at least as restrictive as the
Confidentiality Agreement, (D) prior to providing any information or data
to any Person or entering into discussions or negotiations with any Person,
Burlington notifies ConocoPhillips promptly of such inquiries, proposals or
offers received by, any such information requested from, or any such
discussions or negotiations sought to be initiated or continued with, any
of Burlington's representatives indicating, in connection with such notice,
the name of such Person and the material terms and conditions of any
inquiries, proposals or offers and (E) in the case of clause (ii) above,
Burlington has given ConocoPhillips at least three Business Days after
delivery of such notice to propose revisions to the terms of this Agreement
(or to make another proposal) in response to such Acquisition Proposal and
has negotiated in good faith with ConocoPhillips with respect to such
proposed revisions or other proposal, if any. Burlington agrees that it
will promptly keep ConocoPhillips reasonably informed of the status and
terms of any inquiries, proposals or offers and the status and terms of any
discussions or negotiations, including the identity of the Person making
such inquiry, proposal or offer. Burlington agrees that it will, and will
cause its officers, directors and representatives to, immediately cease and
cause to be terminated any activities, discussions or negotiations existing
as of the date of this Agreement with any Person (other than
ConocoPhillips) conducted heretofore with respect to any Acquisition
Proposal. Burlington agrees that it will use reasonable best efforts to
promptly inform its directors, officers, key employees, agents and
representatives of the obligations undertaken in this Section 6.5. Nothing
in this Section 6.5 shall (x) permit Burlington to terminate this Agreement
(except as specifically provided in paragraph (c) of this Section 6.5 or
Article VIII) or (y) affect or limit any other obligation of Burlington
under this Agreement).
(c) Notwithstanding anything in this Section 6.5 to the contrary,
if, at any time prior to the Burlington Stockholder Approval, the Board of
Directors of Burlington determines in good faith, after consultation with
its financial advisors and outside legal counsel, in response to an
Acquisition Proposal that was unsolicited and that did not otherwise result
from a breach of this Section 6.5, that such proposal is a Superior
Proposal, Burlington may terminate this Agreement; provided, however, that
Burlington shall not terminate this Agreement pursuant to this sentence,
and any purported termination pursuant to this sentence shall be void and
of no force or effect, unless Burlington prior to or concurrently with such
termination pursuant to this Section 6.5(c) pays to ConocoPhillips the fee
payable pursuant to Section 8.2(b); provided, further, however, that
Burlington shall not exercise its right to terminate this Agreement
pursuant to this Section 6.5(c) unless Burlington notifies ConocoPhillips
that Burlington intends to take such action with respect to an Acquisition
Proposal indicating, in connection with such notice, the name of the Person
making such Acquisition Proposal and the material terms and conditions of
such Acquisition Proposal and Burlington has given ConocoPhillips at least
three Business Days after delivery of such notice to propose revisions to
the terms of this Agreement (or to make another proposal) in response to
such Acquisition Proposal.
6.6 Fees and Expenses. Subject to Section 8.2, whether or not the
Merger is consummated, all Expenses incurred in connection with this
Agreement and the transactions contemplated hereby shall be paid by the
party hereto incurring such Expenses, except (i) Expenses incurred in
connection with the filing, printing and mailing of the Proxy
Statement/Prospectus and Form S-4 and (ii) Expenses incurred in connection
with any consultants that ConocoPhillips and Burlington shall have agreed
to retain to assist in obtaining the approvals and clearances under the
Antitrust Laws, which, in each case, shall be shared equally by
ConocoPhillips and Burlington. The parties hereto shall cooperate with each
other in preparing, executing and filing any Tax Returns relating to
transfer or similar Taxes.
6.7 Directors' and Officers' Indemnification and Insurance. (a)
Following the Effective Time, ConocoPhillips and the Surviving Corporation
shall (i) jointly and severally indemnify and hold harmless, and provide
advancement of Expenses to, all past and present directors, officers and
employees of Burlington and its Subsidiaries (in all of their capacities)
(A) without limitation to subclause (B) below, to the same extent such
individuals are indemnified or have the right to advancement of Expenses as
of the date of this Agreement by Burlington pursuant to its Certificate of
Incorporation and By-Laws of Burlington and indemnification agreements, if
any, in existence on the date hereof with, or for the benefit of, any such
individuals and (B) without limitation to subclause (A) above, to the
fullest extent permitted by law, in each case for acts or omissions
occurring at or prior to the Effective Time (including for acts or
omissions occurring in connection with the approval of this Agreement and
the consummation of the transactions contemplated hereby) and (ii) include
and cause to be maintained in effect in the Certificate of Incorporation
and By-Laws of the Surviving Corporation (or any successor to the Surviving
Corporation) for a period of six years after the Effective Time, provisions
regarding elimination of liability of directors, indemnification of
officers, directors and employees and advancement of Expenses that are no
less advantageous to the intended beneficiaries than the corresponding
provisions contained in the current Certificate of Incorporation and
By-Laws of Burlington. Prior to the Effective Time, Burlington shall
endeavor to (and if it is unable to, ConocoPhillips shall cause the
Surviving Corporation to after the Effective Time) obtain and fully pay (up
to a maximum cost of 300% of the current annual premium paid by Burlington
for its existing coverage in the aggregate) for "tail" insurance policies
(providing only for the Side A coverage for such covered individuals where
the existing policies also include coverage for Burlington) with a claims
period of at least six years from the Effective Time from an insurance
carrier with the same or better credit rating as Burlington's current
insurance carrier with respect to directors' and officers' liability
insurance in an amount and scope at least as favorable as Burlington's
existing policies with respect to matters existing or occurring at or prior
to the Effective Time.
(b) The obligations of ConocoPhillips and the Surviving
Corporation under this Section 6.7 shall not be terminated or modified in
such a manner as to adversely affect any indemnitee to whom this Section
6.7 applies without the consent of such affected indemnitee (it being
expressly agreed that the indemnitees to whom this Section 6.7 applies
shall be third-party beneficiaries of this Section 6.7).
6.8 Employee Benefits. (a) ConocoPhillips agrees that, from and
after the Effective Time, ConocoPhillips and its Subsidiaries shall assume
and honor all Burlington Benefit Plans in accordance with their terms as in
effect immediately before the Effective Time, subject to any permitted
amendment or termination thereof. Burlington and ConocoPhillips hereby
agree that the consummation of the Merger shall constitute a "Change in
Control" for purposes of all Burlington Benefit Plans, pursuant to the
terms of such plans in effect on the date hereof. No provision of this
Section 6.8(a) shall be construed as a limitation on the right of
ConocoPhillips to amend or terminate any Burlington Benefit Plan which
Burlington would otherwise have under the terms of such Burlington Benefit
Plan, and no provision of this Section 6.8(a) shall be construed to create
a right in any employee or beneficiary of such employee under a Burlington
Benefit Plan that such employee or beneficiary would not otherwise have
under the terms of such plan; provided, however, that ConocoPhillips agrees
that it will respect deferrals of salary, bonus or other compensation in
place prior to the Effective Time pursuant to the Burlington Benefit Plans.
(b) For at least 18 months following the Effective Time,
ConocoPhillips shall provide, or cause to be provided, to individuals who
are employed by Burlington or any of its Subsidiaries immediately prior to
the Effective Time (other than any such employees whose terms of employment
are governed by a collective bargaining agreement) who remain employed with
ConocoPhillips or any Subsidiary of ConocoPhillips (the "Burlington
Employees"), for so long as such Burlington Employees remain so employed,
compensation (it being understood that discretionary incentive and
equity-based awards will remain discretionary) and employee benefits (i)
pursuant to Burlington's or Burlington's Subsidiaries' compensation and
employee benefit plans, programs, policies and arrangements as provided to
such employees immediately prior to the Effective Time or (ii) pursuant to
compensation and employee benefit plans, programs, policies or arrangements
maintained by ConocoPhillips or any Subsidiary of ConocoPhillips providing
coverage and benefits, which, in the aggregate, are no less favorable than
those provided pursuant to Burlington's and Burlington's Subsidiaries'
plans, programs, policies and arrangements to such employees immediately
prior to the Effective Time.
(c) For all purposes under the employee benefit plans of
ConocoPhillips and its Subsidiaries providing benefits to any Burlington
Employees after the Effective Time (the "New Plans"), ConocoPhillips will,
or will cause its Subsidiaries to, give Burlington Employees full credit
with his or her years of service for purposes of eligibility, vesting and
benefit accrual (excluding benefit accrual under any defined benefit
pension plans) under any employee benefit plans or arrangements maintained
by ConocoPhillips or any of its Subsidiaries for such Burlington employee's
service with Burlington or any Burlington Subsidiary to the same extent
recognized by Burlington immediately prior to the Effective Time. In
addition, and without limiting the generality of the foregoing: (i) each
Burlington Employee shall be immediately eligible to participate, without
any waiting time, in any and all New Plans to the extent coverage under
such New Plan replaces coverage under a Burlington Benefit Plan in which
such Burlington Employee participated immediately before the Effective Time
(such plans, collectively, the "Old Plans"); and (ii) for purposes of each
New Plan providing medical, dental, pharmaceutical and/or vision benefits
to any Burlington Employee, ConocoPhillips shall cause all pre-existing
condition exclusions and actively-at-work requirements of such New Plan to
be waived for such employee and his or her covered dependents, and
ConocoPhillips shall cause any eligible expenses incurred by such employee
and his or her covered dependents during the portion of the plan year of
the Old Plan ending on the date such employee's participation in the
corresponding New Plan begins to be taken into account under such New Plan
for purposes of satisfying all deductible, coinsurance and maximum
out-of-pocket requirements applicable to such employee and his or her
covered dependents for the applicable plan year as if such amounts had been
paid in accordance with such New Plan.
(d) Without limiting the generality of this Section 6.8,
ConocoPhillips and Burlington agree to the employee matters set forth in
Section 6.8(d) of the Burlington Disclosure Schedule.
6.9 Public Announcements. ConocoPhillips and Burlington shall,
unless otherwise required by applicable law or by obligations pursuant to
any listing agreement with or rules of any securities exchange, consult
with the other party before issuing, and provide the other party the
opportunity to review and comment upon, any press release or, to the extent
practical, otherwise making any public statement with respect to this
Agreement or the transactions contemplated hereby. In addition to the
foregoing, except as required by applicable law and to the extent disclosed
in or consistent with the Proxy Statement/Prospectus in accordance with the
provisions of Section 6.1, neither ConocoPhillips nor Burlington shall
issue any press release or otherwise make any public statement or
disclosure concerning the other party or the other party's business,
financial condition or results of operations without the consent of the
other party, which consent shall not be unreasonably withheld or delayed.
6.10 Listing of Shares of ConocoPhillips Common Stock.
ConocoPhillips shall cause the shares of ConocoPhillips Common Stock to be
issued in the Merger and the shares of ConocoPhillips Common Stock to be
reserved for issuance upon exercise of the Burlington Stock Options, to be
approved for listing on the NYSE, subject to official notice of issuance,
prior to the Closing Date.
6.11 Rights Agreement. The Board of Directors of ConocoPhillips
shall take all action to the extent necessary (including amending the
ConocoPhillips Rights Agreement) in order to render the ConocoPhillips
Rights inapplicable to the Merger and the other transactions contemplated
by this Agreement. The Board of Directors of Burlington shall take all
action to the extent necessary (including amending the Burlington Rights
Agreement) in order to render the Burlington Rights inapplicable to the
Merger and the other transactions contemplated by this Agreement.
6.12 Affiliates. Promptly following the date of mailing of Proxy
Statement/Prospectus, Burlington shall deliver to ConocoPhillips a letter
identifying all Persons who, in the judgment of Burlington, may be deemed
at the time this Agreement is submitted for Burlington Stockholders
Approval, "affiliates" of Burlington for purposes of Rule 145 under the
Securities Act and applicable SEC rules and regulations, and such list
shall be updated as necessary to reflect changes from the date thereof.
Burlington shall use reasonable best efforts to cause each Person
identified on such list to deliver to ConocoPhillips not later than ten
days prior to the Effective Time, a written agreement in the form attached
as Exhibit A hereto (an "Affiliate Agreement").
6.13 Section 16 Matters. Prior to the Effective Time,
ConocoPhillips and Burlington shall take all such steps as may be required
to cause any dispositions of Burlington Common Stock (including derivative
securities with respect to Burlington Common Stock) or acquisitions of
ConocoPhillips Common Stock (including derivative securities with respect
to ConocoPhillips Common Stock) resulting from the transactions
contemplated by Article II or Article III by each individual who is subject
to the reporting requirements of Section 16(a) of the Exchange Act with
respect to Burlington or will become subject to such reporting requirements
with respect to ConocoPhillips, to be exempt under Rule 16b-3 promulgated
under the Exchange Act.
6.14 Dividends. After the date of this Agreement, each of
ConocoPhillips and Burlington shall coordinate with the other the
declaration of any dividends in respect of ConocoPhillips Common Stock and
Burlington Common Stock and the record dates and payment dates relating
thereto, it being the intention of the parties hereto that holders of
Burlington Common Stock shall not receive two dividends, or fail to receive
one dividend, for any quarter, including the quarter in which the Effective
Time occurs, with respect to their shares of Burlington Common Stock and
shares of ConocoPhillips Common Stock any such holder receives in exchange
therefor in the Merger.
6.15 Tax Representation Letters. ConocoPhillips shall use its
reasonable best efforts to deliver to Wachtell, Lipton, Rosen & Katz and
White & Case LLP a "Tax Representation Letter," dated as of the Closing
Date and signed by an officer of ConocoPhillips, containing representations
of ConocoPhillips, and Burlington shall use its reasonable best efforts to
deliver to Wachtell, Lipton, Rosen & Katz and White & Case LLP a "Tax
Representation Letter," dated as of the Closing Date and signed by an
officer of Burlington, containing representations of Burlington, in each
case as shall be reasonably necessary or appropriate to enable Wachtell,
Lipton, Rosen & Katz to render the opinion described in Section 7.2(c) of
this Agreement and White & Case LLP to render the opinion described in
Section 7.3(c) of this Agreement.
ARTICLE VII
CONDITIONS PRECEDENT
7.1 Conditions to Each Party's Obligation to Effect the Merger.
The obligations of each of ConocoPhillips and Burlington to effect the
Merger are subject to the satisfaction or waiver in writing on or prior to
the Closing Date of the following conditions:
(a) Stockholder Approval. Burlington shall have obtained the
Burlington Stockholder Approval.
(b) No Injunctions or Restraints; Illegality. No law shall have
been adopted or promulgated, and no temporary restraining order,
preliminary or permanent injunction or other order issued by a court or
other Governmental Entity of competent jurisdiction shall be in effect,
having the effect of making the Merger illegal or otherwise prohibiting
consummation of the Merger.
(c) HSR Act; Other Approvals. (i) The waiting period (and any
extension thereof) applicable to the Merger under the HSR Act shall have
been terminated or shall have expired, (ii) all required approvals in
connection with the EC Merger Regulation and the Canadian Investment
Regulations (other than approvals under the Canadian Investment Regulations
which by their terms cannot be satisfied until after the Closing) shall
have been obtained and (iii) all other approvals required under the
Antitrust Laws to be obtained prior to Closing shall have been obtained,
except where the failure to obtain such approvals would not, individually
or in the aggregate, reasonably be expected to have a Material Adverse
Effect on Burlington.
(d) NYSE Listing. The shares of ConocoPhillips Common Stock to be
issued in the Merger and such other shares of ConocoPhillips Common Stock
to be reserved for issuance in connection with the Merger shall have been
approved for listing on the NYSE, subject to official notice of issuance.
(e) Effectiveness of the Form S-4. The Form S-4 shall have been
declared effective by the SEC under the Securities Act and no stop order
suspending the effectiveness of the Form S-4 shall have been issued by the
SEC and no proceedings for that purpose shall have been initiated or
threatened by the SEC.
7.2 Additional Conditions to Obligations of ConocoPhillips. The
obligations of ConocoPhillips to effect the Merger are subject to the
satisfaction, or waiver in writing by ConocoPhillips, on or prior to the
Closing Date, of the following additional conditions:
(a) Representations and Warranties. The representations and
warranties of Burlington set forth in this Agreement shall be true and
correct (without giving effect to any limitation on any representation or
warranty qualified as to materiality or Material Adverse Effect) as of the
date of this Agreement and as of the Closing Date as though made on and as
of the Closing Date (except to the extent expressly made as of an earlier
date, in which case as of such earlier date), except where the failure of
such representations and warranties to be so true and correct (without
giving effect to any limitation on any representation or warranty qualified
as to materiality or Material Adverse Effect) would not, individually or in
the aggregate, reasonably be expected to have a Material Adverse Effect on
Burlington. In addition, the representations and warranties set forth in
(i) Section 4.1(b) shall be true and correct in all material respects as of
the date of this Agreement and as of the Closing Date as though made on and
as of the Closing Date, and (ii) Section 4.1(g)(i) shall be true and
correct in all respects as of the date of this Agreement and as of the
Closing Date, as though made on and as of the Closing Date. ConocoPhillips
shall have received a certificate of an executive officer of Burlington
that the conditions set forth in this Section 7.2(a) have been satisfied.
(b) Performance of Obligations of Burlington. Burlington shall
have performed or complied with all agreements and covenants required to be
performed by it under this Agreement at or prior to the Closing Date that
are qualified as to materiality or Material Adverse Effect and shall have
performed or complied in all material respects with all other material
agreements and covenants required to be performed by it under this
Agreement at or prior to the Closing Date that are not so qualified; and
ConocoPhillips shall have received a certificate of an executive officer of
Burlington to such effect.
(c) Tax Opinion. ConocoPhillips shall have received from
Wachtell, Lipton, Rosen & Katz, counsel to ConocoPhillips, a written
opinion dated the Closing Date to the effect that for U.S. federal income
tax purposes the Merger will constitute a "reorganization" within the
meaning of Section 368(a) of the Code. In rendering such opinion, counsel
to ConocoPhillips shall be entitled to rely upon assumptions,
representations, warranties and covenants, including those contained in
this Agreement and in the Tax Representation Letters described in Section
6.15 of this Agreement.
7.3 Additional Conditions to Obligations of Burlington. The
obligations of Burlington to effect the Merger are subject to the
satisfaction, or waiver in writing by Burlington, on or prior to the
Closing Date, of the following additional conditions:
(a) Representations and Warranties. The representations and
warranties of ConocoPhillips set forth in this Agreement shall be true and
correct (without giving effect to any limitation on any representation or
warranty qualified as to materiality or Material Adverse Effect) as of the
date of this Agreement and as of the Closing Date as though made on and as
of the Closing Date (except to the extent expressly made as of an earlier
date, in which case as of such earlier date), except where the failure of
such representations and warranties to be so true and correct (without
giving effect to any limitation on any representation or warranty qualified
as to materiality or Material Adverse Effect) would not, individually or in
the aggregate, reasonably be expected to have a Material Adverse Effect on
ConocoPhillips. In addition, the representations and warranties set forth
in (i) Section 4.2(b) shall be true and correct in all material respects as
of the Closing Date, as though made as of the date of this Agreement and on
and as of the Closing Date, and (ii) Section 4.2(g)(i) shall be true and
correct in all respects as of the date of this Agreement and as of the
Closing Date, as though made on and as of the Closing Date. Burlington
shall have received a certificate of an executive officer of ConocoPhillips
that the conditions set forth in this Section 7.3(a) have been satisfied.
(b) Performance of Obligations of ConocoPhillips. ConocoPhillips
shall have performed or complied with all agreements and covenants required
to be performed by it under this Agreement at or prior to the Closing Date
that are qualified as to materiality or Material Adverse Effect and shall
have performed or complied in all material respects with all other material
agreements and covenants required to be performed by it under this
Agreement at or prior to the Closing Date that are not so qualified; and
Burlington shall have received a certificate of an executive officer of
ConocoPhillips to such effect.
(c) Tax Opinion. Burlington shall have received from White & Case
LLP, counsel to Burlington, a written opinion dated the Closing Date to the
effect that for U.S. federal income tax purposes the Merger will constitute
a "reorganization" within the meaning of Section 368(a) of the Code. In
rendering such opinion, counsel to Burlington shall be entitled to rely
upon assumptions, representations, warranties and covenants, including
those contained in this Agreement and in the Tax Representation Letters
described in Section 6.15 of this Agreement.
ARTICLE VIII
TERMINATION AND AMENDMENT
8.1 Termination. This Agreement may be terminated at any time
prior to the Effective Time and, except as specifically provided below,
whether before or after the Burlington Stockholders Meeting:
(a) by mutual written consent of ConocoPhillips and Burlington;
(b) by either ConocoPhillips or Burlington, if the Effective Time
shall not have occurred on or before the date 18 months from the date of
this Agreement (the "Termination Date"); provided, however, that the right
to terminate this Agreement under this Section 8.1(b) shall not be
available to any party whose failure to fulfill any obligation under this
Agreement (including such party's obligations set forth in Section 6.4) has
been the primary cause of, or resulted in, the failure of the Effective
Time to occur on or before the Termination Date;
(c) by either ConocoPhillips or Burlington, if any Governmental
Entity (i) shall have issued an order, decree or ruling or taken any other
action (which the parties hereto shall have used all required efforts to
resist, resolve or lift, as applicable, in accordance with Section 6.4)
permanently restraining, enjoining or otherwise prohibiting the
transactions contemplated by this Agreement, and such order, decree, ruling
or other action shall have become final and nonappealable or (ii) shall
have failed to issue an order, decree or ruling or to take any other action
that is necessary to fulfill the conditions set forth in Sections 7.1(c),
7.1(d) or 7.1(e), as applicable, and such denial of a request to issue such
order, decree, ruling or the failure to take such other action shall have
become final and nonappealable (which order, decree, ruling or other action
the parties hereto shall have used all required efforts to obtain, in
accordance with Section 6.4); provided, however, that the right to
terminate this Agreement under this Section 8.1(c) shall not be available
to any party hereto whose failure to comply with Section 6.4 has been the
primary cause of, or resulted in, such action or inaction;
(d) by either ConocoPhillips or Burlington, if the Burlington
Stockholder Approval has not been obtained by reason of the failure to
obtain the required vote at the Burlington Stockholders Meeting;
(e) by ConocoPhillips, if Burlington shall have (i) failed to
make the Burlington Recommendation or effected a Change in the Burlington
Recommendation, whether or not permitted by the terms hereof, (ii)
materially breached its obligations under this Agreement by reason of a
failure to call the Burlington Stockholders Meeting or a failure to comply
with requirements with respect to the Proxy Statement/Prospectus in
accordance with Section 6.1 or (iii) materially breached its obligations
under Section 6.5;
(f) by ConocoPhillips, if Burlington shall have breached or
failed to perform any of its representations, warranties, covenants or
other agreements contained in this Agreement, such that the conditions set
forth in Section 7.2(a) or 7.2(b) are not capable of being satisfied and
which shall not have been cured prior to the earlier of (i) thirty days
following notice of such breach and (ii) the Termination Date; provided,
that ConocoPhillips shall not have the right to terminate this Agreement
pursuant to this clause (f) if ConocoPhillips or Merger Sub is then in
material breach of its representations, warranties, covenants or other
agreements contained in this Agreement;
(g) by Burlington, if ConocoPhillips shall have breached or
failed to perform any of its representations, warranties, covenants or
other agreements contained in this Agreement, such that the conditions set
forth in Section 7.3(a) or 7.3(b) are not capable of being satisfied and
which shall not have been cured prior to the earlier of (i) thirty days
following notice of such breach and (ii) the Termination Date; provided,
that Burlington shall not have the right to terminate this Agreement
pursuant to this clause (g) if Burlington is then in material breach of its
representations, warranties, covenants or other agreements contained in
this Agreement; or
(h) by Burlington, prior to the Burlington Stockholder Approval
being obtained, in accordance with and subject to the terms and conditions
of Section 6.5(c).
8.2 Effect of Termination. (a) In the event of termination of
this Agreement by either Burlington or ConocoPhillips as provided in
Section 8.1, this Agreement shall forthwith become void and there shall be
no liability or obligation on the part of any party hereto or their
respective officers or directors, except with respect to Section 4.1(s),
Section 4.2(s), the second sentence of Section 6.3, Section 6.6, this
Section 8.2 and Article IX, which provisions shall survive such
termination; provided that, notwithstanding anything to the contrary
contained in this Agreement, neither ConocoPhillips nor Burlington shall be
relieved or released from any liabilities or damages arising out of its
breach of this Agreement.
(b) (i) If Burlington terminates this Agreement pursuant to
Section 8.1(h), then Burlington shall pay ConocoPhillips an amount equal to
the Termination Fee, by wire transfer of immediately available funds, prior
to or concurrently with such termination.
(ii) If (A)(x) either Burlington or ConocoPhillips
terminates this Agreement pursuant to Section 8.1(d) and at any time prior
to the Burlington Stockholders Meeting an Acquisition Proposal with respect
to Burlington shall have been publicly announced or otherwise communicated
to the stockholders of Burlington, which proposal shall not have been
withdrawn prior to the Burlington Stockholders Meeting, (y) ConocoPhillips
terminates this Agreement pursuant to Section 8.1(e) or (z) ConocoPhillips
terminates this Agreement pursuant to Section 8.1(f) and at any time prior
to such termination an Acquisition Proposal with respect to Burlington
shall have been announced or otherwise communicated to the senior
management, Board of Directors or stockholders of Burlington, which
proposal shall not have been withdrawn prior to such termination and (B)
within twelve months of the termination of this Agreement, Burlington or
any of its Subsidiaries enters into a definitive agreement with respect to,
or consummates, an Acquisition Proposal (except that for the purposes of
this Section 8.2 the references in the definition of "Acquisition Proposal"
to "20%" shall be "50%") with any Person (or an affiliate thereof), then
Burlington shall promptly, but in no event later than one Business Day
after the date Burlington or its Subsidiary enters into such agreement with
respect to, or consummates, such Acquisition Proposal, pay ConocoPhillips
an amount equal to the Termination Fee, by wire transfer of immediately
available funds.
(c) The parties hereto acknowledge that the agreements contained
in this Section 8.2 are an integral part of the transactions contemplated
by this Agreement, and that, without these agreements, neither
ConocoPhillips or Burlington would enter into this Agreement; accordingly,
if any party fails promptly to pay any amount due pursuant to this Section
8.2, and, in order to obtain such payment, the other party commences a suit
that results in a judgment against such party for the fee set forth in this
Section 8.2, such party shall pay to the other party its costs and Expenses
(including attorneys' fees and Expenses) in connection with such suit,
together with interest on the amount of the fee at the prime rate of
Citibank, N.A. in effect on the date such payment was required to be made,
notwithstanding the provisions of Section 6.6. The parties hereto agree
that any remedy or amount payable pursuant to this Section 8.2 shall not
preclude any other remedy or amount payable hereunder, and shall not be an
exclusive remedy, for any willful and material breach of any
representation, warranty, covenant or agreement contained in this
Agreement.
8.3 Amendment. This Agreement may be amended by the parties
hereto, by action taken or authorized by their respective Boards of
Directors, at any time before or after the Burlington Stockholder Approval,
but, after any such approval, no amendment shall be made which by law or in
accordance with the rules of any relevant stock exchange requires further
approval by such stockholders without such further approval. This Agreement
may not be amended, except by an instrument in writing signed on behalf of
each of the parties hereto.
8.4 Extension; Waiver. At any time prior to the Effective Time,
the parties hereto, by action taken or authorized by their respective
Boards of Directors, may, to the extent legally allowed, (a) extend the
time for the performance of any of the obligations or other acts of the
other parties hereto, (b) waive any inaccuracies in the representations and
warranties contained herein or in any document delivered pursuant hereto
and (c) waive compliance with any of the agreements or conditions contained
herein. Any agreement on the part of a party hereto to any such extension
or waiver shall be valid only if set forth in a written instrument signed
on behalf of such party hereto. The failure of any party hereto to assert
any of its rights under this Agreement or otherwise shall not constitute a
waiver of those rights.
ARTICLE IX
GENERAL PROVISIONS
9.1 Non-Survival of Representations, Warranties and Agreements.
None of the representations, warranties, covenants and other agreements in
this Agreement or in any instrument delivered pursuant to this Agreement,
including any rights arising out of any breach of such representations,
warranties, covenants, agreements and other provisions, shall survive the
Effective Time, except for those covenants, agreements and other provisions
contained herein that by their terms apply or are to be performed in whole
or in part after the Effective Time and this Article IX (including without
limitation Section 6.7).
9.2 Notices. All notices and other communications hereunder shall
be in writing and shall be deemed duly given when received. All notices
hereunder shall be delivered as set forth below, or pursuant to such other
instructions as may be designated in writing by the party to receive such
notice:
(i) if to ConocoPhillips:
600 North Dairy Ashford Road
MC 3020
Houston, Texas 77079-1175
Facsimile: (281) 293-1054
Attention: Stephen F. Gates
with a copy to:
Wachtell, Lipton, Rosen & Katz
51 West 52nd Street
New York, New York 10019
Facsimile: 212-403-2000
Attention: Andrew R. Brownstein, Esq.
(ii) if to Burlington to:
Burlington Resources Inc.
717 Texas Avenue, Suite 2100
Houston, Texas 77002
Facsimile: (713) 624-3754
Attention: Frederick J. Plaeger II
with a copy to:
Fried, Frank, Harris, Shriver & Jacobson LLP
One New York Plaza
New York, New York 10004-1980
Facsimile: 212-859-4000
Attention: Arthur Fleischer, Esq.
Warren S. de Wied, Esq.
9.3 Interpretation. (a) When a reference is made in this
Agreement to Articles, Sections, Exhibits or Schedules, such reference
shall be to an Article or Section of or Exhibit or Schedule to this
Agreement unless otherwise indicated. The table of contents and headings
contained in this Agreement are for reference purposes only and shall not
affect in any way the meaning or interpretation of this Agreement. Whenever
the words "include," "includes" or "including" are used in this Agreement,
they shall be deemed to be followed by the words "without limitation". The
words "hereby," "herein," "hereof" or "hereunder," and similar terms are to
be deemed to refer to this Agreement as a whole and not to any specific
section. In addition, each Section of this Agreement is qualified by the
matters set forth in the related Section of the ConocoPhillips Disclosure
Schedule and the Burlington Disclosure Schedule, as the case may be, and by
such matters set forth any place else in this Agreement or in the
ConocoPhillips Disclosure Schedule or the Burlington Disclosure Schedule
where the applicability of such qualification to the Section of this
Agreement is reasonably apparent.
(b) The parties have participated jointly in negotiating and
drafting this Agreement. In the event that an ambiguity or a question of
intent or interpretation arises, this Agreement shall be construed as if
drafted jointly by the parties, and no presumption or burden of proof shall
arise favoring or disfavoring any party by virtue of the authorship of any
provision of this Agreement.
9.4 Counterparts. This Agreement may be executed by facsimile and
in one or more counterparts, all of which shall be considered one and the
same agreement and shall become effective when one or more counterparts
have been signed by each of the parties and delivered to the other parties,
it being understood that all parties hereto need not sign the same
counterpart.
9.5 Entire Agreement; No Third Party Beneficiaries. (a) This
Agreement, the Confidentiality Agreement and the Exhibits and disclosure
schedules and the other agreements and instruments of the parties hereto
delivered in connection herewith constitute the entire agreement and
supersede all prior agreements and understandings, both written and oral,
among the parties hereto with respect to the subject matter hereof.
(b) This Agreement shall be binding upon and inure solely to the
benefit of each party hereto, and nothing in this Agreement, express or
implied, is intended to or shall confer upon any other Person any right,
benefit or remedy of any nature whatsoever under or by reason of this
Agreement, other than Section 6.7 (which is intended to be for the benefit
of the Persons covered thereby).
9.6 Governing Law. This Agreement shall be governed and construed
in accordance with the laws of the State of Delaware (without giving effect
to choice of law principles thereof).
9.7 Severability. If any term or other provision of this
Agreement is invalid, illegal or incapable of being enforced by any law or
public policy, all other terms and provisions of this Agreement shall
nevertheless remain in full force and effect so long as the economic or
legal substance of the transactions contemplated hereby is not affected in
any manner materially adverse to any party hereto. Upon such determination
that any term or other provision is invalid, illegal or incapable of being
enforced, the parties hereto shall negotiate in good faith to modify this
Agreement so as to effect the original intent of the parties hereto as
closely as possible in an acceptable manner in order that the transactions
contemplated hereby are consummated as originally contemplated to the
greatest extent possible.
9.8 Assignment. Neither this Agreement nor any of the rights,
interests or obligations hereunder shall be assigned by any of the parties
hereto, in whole or in part (whether by operation of law or otherwise),
without the prior written consent of the other parties hereto, and any
attempt to make any such assignment without such consent shall be null and
void. Subject to the preceding sentence, this Agreement will be binding
upon, inure to the benefit of and be enforceable by the parties hereto and
their respective successors and assigns.
9.9 Submission to Jurisdiction; Waivers. Each of ConocoPhillips
and Burlington irrevocably agrees that any legal action or proceeding with
respect to this Agreement or for recognition and enforcement of any
judgment in respect hereof brought by the other party hereto or its
successors or assigns shall be brought and determined exclusively in the
Court of Chancery or other courts of the State of Delaware, and each of
ConocoPhillips and Burlington hereby irrevocably submits with regard to any
such action or proceeding for itself and in respect to its property,
generally and unconditionally, to the exclusive jurisdiction of the
aforesaid courts (and, to the fullest extent permitted by law, to the Court
of Chancery) and to accept service of process in any manner permitted by
such courts. Each of ConocoPhillips and Burlington hereby irrevocably
waives, and agrees not to assert, by way of motion, as a defense,
counterclaim or otherwise, in any action or proceeding with respect to this
Agreement, (a) any claim that it is not personally subject to the
jurisdiction of the above-named courts for any reason other than the
failure to lawfully serve process, (b) that it or its property is exempt or
immune from jurisdiction of any such court or from any legal process
commenced in such courts (whether through service of notice, attachment
prior to judgment, attachment in aid of execution of judgment, execution of
judgment or otherwise), (c) to the fullest extent permitted by applicable
law, that (i) the suit, action or proceeding in any such court is brought
in an inconvenient forum, (ii) the venue of such suit, action or proceeding
is improper and (iii) this Agreement, or the subject matter hereof, may not
be enforced in or by such courts and (d) any right to a trial by jury.
9.10 Enforcement. The parties hereto agree that irreparable
damage would occur in the event that any of the provisions of this
Agreement were not performed in accordance with their specific terms. It is
accordingly agreed that the parties hereto shall be entitled to specific
performance of the terms hereof, this being in addition to any other remedy
to which they are entitled at law or in equity.
IN WITNESS WHEREOF, ConocoPhillips, Cello Acquisition Corp. and
Burlington Resources Inc. have caused this Agreement to be signed by their
respective officers thereunto duly authorized, all as of the date first
written above.
CONOCOPHILLIPS
By: /s/ James J. Mulva
-----------------------------
Name: James J. Mulva
Title: Chairman and Chief
Executive Officer
CELLO ACQUISITION CORP.
By: /s/ J.J. Mulva
-----------------------------
Name: J.J. Mulva
Title: Chairman
BURLINGTON RESOURCES INC.
By: /s/ Bobby S. Shackouls
-----------------------------
Name: Bobby S. Shackouls
Title: Chairman of the Board,
President and Chief
Executive
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