Description of Securities of the Registrant
EX-4.1 2 d875559dex41.htm EX-4.1 EX-4.1 Exhibit 4.1 As of December 31, 2019, ConocoPhillips had two classes of securities registered under Section The following summary description of our common stock is based upon our certificate of We are authorized to issue 2.5 billion shares of common stock, par value $0.01 per share, and Each holder of our common stock is entitled to one vote per share in the election of directors and Subject to the rights of the holders of any series of our preferred stock that may be outstanding Our common stock is traded on the New York Stock Exchange under the trading symbol "COP." Exhibit 4.1 Our certificate of incorporation and bylaws contain provisions that could delay or make more In this regard, our certificate of incorporation grants our board of directors broad power to Exhibit 4.1 In addition to the director nomination provisions described above, our bylaws contain a “proxy These procedures may limit the ability of stockholders to nominate candidates for director and Our certificate of incorporation requires that specified business combinations involving a person Amendments to our certificate of incorporation generally must be approved by our board of Under our certificate of incorporation, the affirmative vote of shares representing not less than Exhibit 4.1 Additionally, the affirmative vote of shares representing (1) not less than 80% of the votes Our bylaws have similar supermajority vote requirements for provisions relating to, among To the fullest extent permitted by Delaware law, our directors will not be personally liable to us As a result, neither us nor our stockholders have the right, through stockholders' derivative suits We are a Delaware corporation and is subject to Section 203 of the Delaware General Exhibit 4.1 Under Section 203, the restrictions described above also do not apply to specific business Section 203 may make it more difficult for a person who would be an interested stockholder to Exhibit 4.1 Exhibit 4.1 Exhibit 4.1 Exhibit 4.1 Exhibit 4.1
1
DESCRIPTION OF THE REGISTRANT’S SECURITIES
REGISTERED PURSUANT TO SECTION 12 OF THE
SECURITIES EXCHANGE ACT OF 1934
12 of the Securities Exchange Act of 1934, as amended: our common stock and the 7% Debentures
due 2029 issued by ConocoPhillips Company, as successor to Phillips Petroleum Company (the “2029
Debentures”). Unless the context otherwise requires, references to “ConocoPhillips,” “us,” “we” and
“our” are solely to ConocoPhillips and not to any of its subsidiaries or affiliates, and references to
“CPCo” refer solely to ConocoPhillips Company, and not any of its subsidiaries or affiliates.
DESCRIPTION OF CAPITAL STOCK
incorporation and bylaws and applicable provisions of the law. The summary is not complete and is
subject to and qualified in its entirety by reference to the complete text of our certificate of
incorporation and bylaws, which are filed as exhibits to this Annual Report on Form 10-K. You
should read those documents for provisions that may be important to you.
Authorized Capital Stock
500 million shares of preferred stock, par value $0.01 per share. As of December 31, 2019, there were
1,084,868,389 shares of common stock issued and outstanding and no shares of preferred stock issued
and outstanding.
Common Stock
on all other matters submitted to the vote of our stockholders. However, except as otherwise required
by law, holders of our common stock are not entitled to vote on any amendment to our certificate of
incorporation that relates solely to the terms of any series of our preferred stock if holders of our
preferred stock are entitled to vote on the amendment under our certificate of incorporation or
Delaware law. There are no cumulative voting rights, meaning that the holders of a majority of the
shares of our common stock voting for the election of directors can elect all of the directors standing
for election.
from time to time, each share of our common stock will have an equal and ratable right to receive
dividends as may be declared by the our board of directors out of funds legally available for the
payment of dividends, and, in the event of our liquidation, dissolution or winding up, will be entitled
to share equally and ratably in the assets available for distribution to our stockholders. No holder of
our common stock will have any preemptive or other subscription rights to purchase or subscribe for
any of our securities. In addition, holders of our common stock have no conversion rights, and there
are no redemption or sinking fund provisions applicable to our common stock.
The transfer agent for our common stock is Computershare Shareowner Services LLC.
2
Anti-Takeover Provisions of ConocoPhillips' Certificate of Incorporation and Bylaws
difficult the acquisition of control of us through a hostile tender offer, open market purchases, proxy
contest, merger or other takeover attempt that a stockholder might consider in his or her best interest,
including those attempts that might result in a premium over the market price of our common stock.
Authorized but Unissued Stock
We have 2.5 billion authorized shares of common stock and 500 million authorized shares of
preferred stock. One of the consequences of our authorized but unissued common stock and
undesignated preferred stock may be to enable our board of directors to make more difficult or to
discourage an attempt to obtain control of us. If, in the exercise of its fiduciary obligations, our board
of directors determined that a takeover proposal was not in our best interest, our board of directors
could authorize the issuance of those shares without stockholder approval, subject to limits imposed
by the New York Stock Exchange. The shares could be issued in one or more transactions that might
prevent or make the completion of a proposed change of control transaction more difficult or costly
by:
•
diluting the voting or other rights of the proposed acquiror or insurgent stockholder
group;
•
creating a substantial voting block in institutional or other hands that might undertake to
support the position of the incumbent board; or
•
effecting an acquisition that might complicate or preclude the takeover.
establish the rights and preferences of the authorized and unissued preferred stock. Our board of
directors could establish one or more series of preferred stock that entitle holders to:
•
vote separately as a class on any proposed merger or consolidation;
•
cast a proportionately larger vote together with our common stock on any transaction or
for all purposes;
•
elect directors having terms of office or voting rights greater than those of other directors;
•
convert preferred stock into a greater number of shares of our common stock or other
securities;
•
demand redemption at a specified price under prescribed circumstances related to a
change of control of us; or
•
exercise other rights designed to impede a takeover.
Stockholder Action by Written Consent; Special Meetings of Stockholders
Our certificate of incorporation provides that no action that is required or permitted to be taken by
stockholders at any annual or special meeting may be taken by written consent of stockholders in lieu
of a meeting, and that special meetings of stockholders may be called only by our board of directors or
the chairman of the board.
Advance Notice Procedure for Director Nominations and Stockholder Proposals; Proxy Access
Our bylaws provide the manner in which stockholders may give notice of stockholder nominations
and other business to be brought before an annual meeting. In general, to bring a matter before an
annual meeting or to nominate a candidate for director, a stockholder must give notice of the proposed
matter or nomination not less than 90 and not more than 120 days prior to the first anniversary date of
the immediately preceding meeting. If the annual meeting is not within 30 days before or after the
3
anniversary date of the preceding annual meeting, the stockholder notice must be received not earlier
than the 120th day prior to the date of such annual meeting and not later than the close of business on
the later of (1) 90 days prior to the date of the annual meeting or (2) if the first public announcement
of the date of such annual meeting is less than 100 days prior to the date of the annual meeting, the
close of business on the 10th day following the day on which notice of the annual meeting was mailed
or first publicly disclosed.
access” provision that provides that any stockholder or group of up to twenty stockholders who have
owned 3% or more of our outstanding common stock continuously for at least three years to nominate
and include in our proxy materials director candidates constituting up to 20% of our board of directors
or two directors, whichever is greater, provided that the stockholders and the nominees satisfy the
eligibility requirements specified in our bylaws. A stockholder proposing to nominate a person for
election to our board of directors through the proxy access provision must provide us with a notice
requesting the inclusion of the director nominee in our proxy materials and other required information
not less than 120 days nor more than 150 days prior to the first anniversary of the date on which we
first mail our proxy materials for the preceding year's annual meeting of stockholders. In addition, an
eligible stockholder may include a written statement of not more than 500 words supporting the
candidacy of such stockholder nominee. The complete proxy access provision for director
nominations are set forth in our bylaws.
bring other business before a stockholders meeting, including the consideration of any transaction that
could result in a change of control and that might result in a premium to our stockholders.
Fair Price Provision
or entity that beneficially owns 15% or more of the outstanding shares of our voting stock or that is an
affiliate of that person, which we refer to as a related person, must be approved by (1) at least 80% of
the votes entitled to be cast by the voting stock and (2) at least 66
2
/3% of the votes entitled to be cast
by the voting stock other than voting stock owned by the related person. These supermajority
requirements do not apply if:
•
a majority of the directors who are unaffiliated with the related person and who were in
office before the related person became a related person approve the transaction; or
•
specified fair price conditions are met that in general provide that the payment received
by the stockholders in the business combination is not less than the amount the related
person paid or agreed to pay for any shares of our voting stock acquired within one year
of the business combination.
Amendment of Certificate of Incorporation and Bylaws
directors and by a majority of the outstanding stock entitled to vote on the amendment, and, if
applicable, by majority of the outstanding stock of each class or series entitled to vote on the
amendment as a class or series.
80% of the votes entitled to be cast by the voting stock is required to alter, amend or adopt any
provision inconsistent with or repeal the provisions that, among others, (1) control the constitution of
our board of directors, (2) deny stockholders the right to call a special meeting or to act by written
4
consent, (3) limit or eliminate the liability of our directors and (4) set the 80% supermajority threshold
applicable with respect to the provisions above.
entitled to be cast by the voting stock, voting together as a single class, and (2) not less than 66
2
/3% of
the votes entitled to be cast by the voting stock not owned, directly or indirectly, by any related person
is required to amend, repeal, or adopt any provisions inconsistent with, the fair price provision
described above.
others, special stockholder meetings; prohibition on action by stockholder written consent; nominating
directors and bringing business before an annual stockholder meeting; the number, classification and
qualification of directors; filling vacancies on the board of directors; and removing directors.
Limitation of Liability of Directors
or our stockholders for monetary damages for breach of fiduciary duty as a director. Delaware law
currently permits the elimination of all liability for breach of fiduciary duty, except liability:
•
for any breach of the duty of loyalty to us or our stockholders;
•
for acts or omissions not in good faith or involving intentional misconduct or a knowing
violation of law;
•
for unlawful payment of a dividend or unlawful stock purchases or redemptions; and
•
for any transaction from which the director derived an improper personal benefit.
on our behalf, to recover monetary damages against a director for breach of fiduciary duty as a
director, including breaches resulting from grossly negligent behavior, except in the situations
described above.
Delaware Anti-Takeover Law
Corporation Law, which regulates corporate acquisitions. Section 203 prevents an “interested
stockholder,” which is defined generally as a person owning 15% or more of a corporation's voting
stock, or any affiliate or associate of that person, from engaging in a broad range of “business
combinations” with the corporation for three years after becoming an interested stockholder unless:
•
the board of directors of the corporation had previously approved either the business
combination or the transaction that resulted in the stockholder's becoming an interested
stockholder;
•
upon completion of the transaction that resulted in the stockholder's becoming an
interested stockholder, that person owned at least 85% of the voting stock of the
corporation outstanding at the time the transaction commenced, excluding shares owned
by persons who are directors and also officers and shares owned in employee stock plans
in which participants do not have the right to determine confidentially whether shares
held subject to the plan will be tendered in a tender or exchange offer; or
•
following the transaction in which that person became an interested stockholder, the
business combination is approved by the board of directors of the corporation and holders
of at least two-thirds of the outstanding voting stock not owned by the interested
stockholder.
5
combinations proposed by an interested stockholder following the announcement or notification of
designated extraordinary transactions involving the corporation and a person who had not been an
interested stockholder during the previous three years or who became an interested stockholder with
the approval of a majority of the corporation's directors, if such extraordinary transaction is approved
or not opposed by a majority of the directors who were directors prior to any person becoming an
interested stockholder during the previous three years or were recommended for election or elected to
succeed such directors by a majority of such directors.
effect various business combinations with a corporation for a three-year period.
DESCRIPTION OF THE 2029 DEBENTURES
The following description of the 2029 Debentures is a summary and does not purport to be
complete. It is subject to and qualified in its entirety by reference to the Indenture, dated September
15, 1990 (the “Indenture”), as supplemented by Supplemental Indenture No. 1, dated May 23, 1991,
and the Supplement, dated September 9, 2002 (together with the Indenture, the “Senior Indenture”),
between CPCo (as successor to Phillips Petroleum Company) and U.S. Bank National Association,
formerly First Trust National Association (as successor to Continental Bank, National Association), as
trustee, forms of which are available from us upon request. The 2029 Debentures are traded on the
NYSE Stock Exchange under CUSIP No. 718507BK1. You should read the Senior Indenture for
provisions that may be important to you.
Interest and Maturity
The 2029 Debentures were initially issued in aggregate principal amount of $200,000,000 and bear
interest at the rate of 7% per year. The maturity date of the 2029 Debentures is March 30, 2029.
Interest on the 2029 Debentures are payable semiannually on March 30 and September 30 of each
year, commencing September 30, 1999, to the holders of record of the 2029 Debentures at the close of
business on the preceding March 15 or September 15, whether or not that day is a business day. All
payments of interest and principal are payable in United States dollars.
Principal and interest on the 2029 Debentures are payable, and the 2029 Debentures may be presented
for transfer and exchange, at the corporate trust office or agency of the trustee in New York, New
York or Chicago, Illinois. Payment of interest may also be made by check mailed to the registered
holders, at our option.
Ranking; Guarantees
The 2029 Debentures are senior unsecured obligations of CPCo and rank equally in right of payment
to all of CPCo’s other unsecured senior indebtedness. The 2029 Debentures are not be entitled to the
benefit of any sinking fund. ConocoPhillips
has fully and unconditionally guaranteed, on a senior
unsecured basis, the full and prompt payment of the principal of and interest on the 2029 Debentures,
when and as they be become due and payable, whether at maturity or otherwise.
Optional Redemption
At CPCo’s option, CPCo may redeem the 2029 Debentures, in whole or in part, at any time or from
time to time at a redemption price equal to the greater of (i) 100 percent of the principal amount of the
2029 Debentures to be redeemed, and (ii) the sum of the present values of the remaining scheduled
payment of principal and interest on the 2029 Debentures to be redeemed (not including any portion
of such payments of interest accrued as of the date of redemption) discounted to the date of
6
redemption on a semi-annual basis (assuming a 360-day year consisting of twelve 30-day months) at
the Adjusted Treasury Rate (as defined below) plus 25 basis points for the 2029 Debentures, as
determined by the Quotation Agent (as defined below), in each case, plus accrued interest thereon to
the date of redemption.
Notice of any redemption must be mailed at least 30 days but not more than 60 days before the
redemption date to each holder of the 2029 Debentures to be redeemed. Unless CPCo defaults in
payment of the redemption price, on and after the redemption date, interest will cease to accrue on the
2029 Debentures or portions thereof called for redemption.
“Adjusted Treasury Rate” means, with respect to any redemption date, the rate per annum equal to the
semi-annual equivalent yield to maturity of the Comparable Treasury Issue, assuming a price for the
Comparable Treasury Issue (expressed as a percentage of its principal amount) equal to the
Comparable Treasury Price for such redemption date.
“Comparable Treasury Issue” means the United States Treasury security selected by the Quotation
Agent as having a maturity comparable to the remaining term of the 2029 Debentures to be redeemed
that would be utilized, at the time of selection and in accordance with customary financial practice, in
pricing new issues of corporate debt securities of comparable maturity to the remaining term of the
2029 Debentures.
“Comparable Treasury Price” means, with respect to any redemption date, (i) the average of the
Reference Treasury-Dealer Quotations for such redemption date, after excluding the highest and
lowest of
such Reference Treasury Dealer Quotations, or (ii) if the trustee obtains fewer than three such
Reference
Treasury Dealer Quotations, the average of all such quotations.
“Quotation Agent” means the Reference Treasury Dealer appointed by CPCo.
“Reference Treasury Dealer” means (i) each of Merrill Lynch, Pierce, Fenner & Smith Incorporated,
Chase Securities Inc., Goldman, Sachs & Co. and J.P. Morgan Securities Inc. and their respective
successors;
provided, however, that if any of the foregoing shall cease to be a primary U.S. Government securities
dealer
in New York City (a "Primary Treasury Dealer"), CPCo shall substitute therefor another Primary
Treasury
Dealer, and (ii) any other Primary Treasury Dealer selected by CPCo.
“Reference Treasury Dealer Quotations” means, with respect to each Reference Treasury Dealer and
any
redemption date, the average, as determined by CPCo, of the bid and asked prices for the Comparable
Treasury Issue (expressed in each case as a percentage of its principal amount) quoted in writing to the
trustee by such Reference Treasury Dealer at 5:00 p.m., New York City time, on the third business
day preceding such
redemption date.
Certain Covenants
Limitation on Liens
CPCo will not, and will not permit any Restricted Subsidiary (as defined below) to, incur, issue,
assume or guarantee any indebtedness for borrowed money secured by a mortgage, pledge or other
lien (“Mortgage”) on any Restricted Property (as defined below), or on any shares of stock or
7
indebtedness of a Restricted Subsidiary, without providing that the 2029 Debentures shall be secured
equally and ratably with (or prior to) such secured indebtedness, unless after giving effect thereto the
aggregate amount of all such indebtedness so secured (other than indebtedness secured by excepted
Mortgages referred to in the following sentence), together with all CPCo’s Attributable Debt (as
defined below) and CPCo’s Restricted Subsidiaries in respect of sale and leaseback transactions
involving Restricted Property, except sale and leaseback transactions, the proceeds of which are
applied to the retirement of funded debt, would not exceed 10 percent of Consolidated Adjusted Net
Assets (as defined below) as shown on CPCo’s latest audited consolidated financial statements. This
restriction will not apply to (a) Mortgages on property of, or on any shares of stock or indebtedness of,
any corporation existing at the time such corporation becomes a Subsidiary (as defined below), (b)
Mortgages on property existing at the time of acquisition thereof (including acquisition through
merger or consolidation) or to secure the payment of all or any part of the purchase price or
construction cost thereof or to secure any indebtedness incurred prior to, at the time of, or within six
months after such acquisition or completion of such property for the purpose of financing all or any
part of the purchase price or construction cost thereof, (c) Mortgages on substantially unimproved
property to secure the cost of exploration, drilling or development of, or improvements to, such
property, and (d) Mortgages in favor of CPCo or a Restricted Subsidiary, and will not apply to any
extension, renewal or replacement of any Mortgage referred to in the foregoing clauses (a) through
(d), inclusive. The following types of transactions are not deemed to create indebtedness secured by
Mortgage (a) the sale or transfer of crude oil, natural gas or natural gas liquids in place for a period of
time until, or in an amount such that, the purchaser will realize there from a specified amount of
money or of such oil, gas or gas liquids, or any other interest in property commonly referred to as a
"production payment,” and (b) the Mortgage of any property of CPCo or any Subsidiary in favor of
governmental bodies to secure partial progress, advance or other payments to CPCo or any Subsidiary
pursuant to any contract or statute, or the Mortgage of any property to secure indebtedness of the
pollution control or industrial revenue bond type.
Limitation on Sales and Leasebacks
Neither CPCo nor any Restricted Subsidiary may enter into any sale and leaseback transaction
involving any Restricted Property which has been owned or operated by CPCo or such Restricted
Subsidiary for more than six months unless (a) CPCo or such Restricted Subsidiary could mortgage
such property in an amount equal to the Attributable Debt with respect to the sale and leaseback
transaction without equally and ratably securing the 2029 Debentures, (b) since the date of the Senior
Indenture and within a period commencing 12 months prior to the consummation of the sale and
leaseback transaction and ending 12 months after the consummation of such sale and leaseback
transaction, CPCo or any Restricted Subsidiary has expended or will expend for any Restricted
Property an amount equal to (i) the greater of (x) the net proceeds of such sale and leaseback
transaction and (y) the fair market value of the Restricted Property so leased at the time of entering
into such transaction, as determined by CPCo’s board of directors (the greater of the sums specified in
clauses (x) and (y) being referred to herein as the "Net Proceeds of such transaction"), and CPCo
elects to designate such amount as satisfying any obligation it would otherwise have under clause (c)
hereof, or (ii) a part of the Net Proceeds of such transaction and CPCo elects to designate such amount
as satisfying part of the obligation it would otherwise have under clause (c) hereof and applies an
amount equal to the remainder of such Net Proceeds as provided in clause (c) hereof, or (c) CPCo,
within 12 months of the consummation of any such sale and leaseback transaction, applies an amount
equal to the Net Proceeds of such transaction (less any amount elected under clause (b) hereof) to the
retirement of certain funded indebtedness of CPCo ranking on a parity with the 2029 Debentures. This
restriction will not apply to certain sale and leaseback transactions (a) between CPCo and a Restricted
Subsidiary or between Restricted Subsidiaries, or (b) involving the taking back of a lease for a period
of less than three years.
8
Limitations on Mergers and Sales of Assets
Neither the Senior Indenture nor the 2029 Debentures contain covenants or other provisions to afford
protection to the holders of the 2029 Debentures in the event of a recapitalization, holding company
merger, or other transaction (leverage or otherwise) with CPCo, CPCo’s management or affiliates,
except to the limited extent described below.
CPCo may not consolidate with, or merge into, any corporation or convey or transfer its properties
and assets substantially as an entirety to any person unless the successor entity shall be a corporation
organized under the laws of the United States or any state or the District of Columbia and shall
expressly assume CPCo’s obligations under the Senior Indenture. If, upon any such consolidation,
merger, conveyance or transfer of CPCo with or into any person or of any Restricted Subsidiary with
or to any other Subsidiary, any Restricted Property of CPCo or of any Restricted Subsidiary or any
shares of stock or indebtedness of any Restricted Subsidiary would thereupon become subject to any
Mortgage (other than a Mortgage permitted under the limitation on liens described above, without
CPCo having to secure the 2029 Debentures equally and ratably), CPCo will secure the 2029
Debentures (together with, if CPCo shall so determine, other securities ranking on a parity with the
2029 Debentures) prior to all liens other than any theretofore existing.
Definitions
“Attributable Debt” is defined to mean the total net amount of rent (discounted at the rate per annum
indicated in the Senior Indenture) required to be paid during the remaining term of any lease.
“Consolidated Adjusted Net Assets” is defined to mean the total amount of assets after deducting
therefrom (a) all current liabilities (excluding any thereof which are by their terms extendible or
renewable at the option of the obligor thereon to a time more than twelve months after the time as of
which the amount thereof is being computed), and (b) total prepaid expenses and deferred charges.
“Restricted Property” is defined to mean (a) any interest in property located in the United States
(including any interest in property located off the coast of the United States operated pursuant to
leases from any governmental body) which is producing crude oil, natural gas or natural gas liquids in
paying quantitates, or (b) any refining or manufacturing plant located in the United States, except (i)
related transportation or marketing facilities, or (ii) any refining or manufacturing plant or portion
thereof which, in the opinion of CPCo’s board of directors, is not a principal plant in relation to
CPCo’s activities and Restricted Subsidiaries as a whole.
“Restricted Subsidiary” is defined to mean any Subsidiary which owns a Restricted Property if
substantially all of the tangible property in which such Subsidiary has an interest in (a) is located in
the United States, or (b) is located off the coast of the United States and is operated pursuant to leases
from any governmental body.
“Subsidiary” is defined to mean a corporation, a majority of the outstanding voting stock of which is
owned, directly or indirectly, by CPCo or by one or more other Subsidiaries, or by CPCo and one or
more other Subsidiaries.
9
Modifications of the Senior Indenture
The Senior Indenture contains provisions permitting CPCo and the trustee, with the consent of the
holders of not less than 66⅔ percent-in principal amount of the 2029 Debentures at the time
outstanding, to modify the Senior Indenture or any supplemental indenture, or the rights of the holders
of the 2029 Debentures; provided that no such modification shall (i) extend the fixed maturity of the
2029 Debentures, or reduce the principal amount thereof (including in the case of a discounted
security the amount payable thereon in the event of acceleration or the amount provable in
bankruptcy) or any redemption premium thereon, or reduce the rate or extend the time of payment of
interest thereon, or make the principal of, or interest or premium on, the 2029 Debentures payable in
any coin or currency other than that provided in the 2029 Debentures, or impair or affect the right of
any 2029 Debentures holder to institute suit for the payment thereof or the right of prepayment, if any,
at the option of the holder, without the consent of the holder of each 2029 Debentures so affected, or
(ii) reduce the aforesaid percentage of 2029 Debentures the consent of the holders of which is required
for any such modification.
Events of Default
An Event of Default is defined in the Senior Indenture as being:
●
Default for 30 days in payment of any interest on the 2029 Debentures;
●
Default in payment of principal and premium of the 2029 Debentures as and when the same
shall become due and payable either at maturity, upon redemption, by declaration or
otherwise;
●
Default by CPCo in the performance of any other of the covenants or agreements in the
Senior Indenture which shall not have been remedied for a period of 90 days after notice; or
●
Certain events of bankruptcy, insolvency, and reorganization of CPCo.
The Senior Indenture provides that the trustee may withhold notice to the holders of the 2029
Debentures of any default (except in payment of principal or of interest or premium on the 2029
Debentures) if the trustee considers it in the interest of the holders to do so.
If an Event of Default due to the default in the payment of principal, interest or premium, if any, on
the 2029 Debentures shall have occurred and be continuing, either the trustee or the holders of 25
percent in principal amount of the 2029 Debentures affected thereby then outstanding may declare the
principal of all such 2029 Debentures to be due and payable immediately. If an Event of Default
resulting from default in performance of any other of the covenants or agreements in the Senior
Indenture or certain events of bankruptcy, insolvency and reorganization of CPCo, either the trustee or
the holders of 25 percent in principal amount of all 2029 Debentures then outstanding may declare the
principal of all 2029 Debentures to be due and payable immediately, but upon certain conditions such
declarations may be annulled and past defaults may be waived (except defaults in payment of
principal of or interest or premium on the 2029 Debentures) by the holders of a majority in principal
amount of the 2029 Debentures then outstanding.
The holders of a majority in principal amount of the 2029 Debentures affected and then outstanding
shall have the right to direct the time, method and place of conducting any proceeding for any remedy
available to the trustee under the Senior Indenture, provided that holders of the 2029 Debentures
have
offered to the trustee reasonable indemnity against expenses and liabilities.
Defeasance
The Senior Indenture provides that CPCo, at its option: (a) will be discharged from any and all
obligations in respect of the 2029 Debentures (except for certain obligations to register the transfer or
10
exchange of 2029 Debentures, replace stolen, lost or mutilated 2029 Debentures, maintain paying
agencies and hold moneys for payment in trust) or (b) need not comply with certain restrictive covenants
of the Senior Indenture (including those described herein), in each case if CPCo deposits, in trust with
the trustee or the defeasance agent, money or U.S. government obligations which through the payment
of interest thereon and principal thereof in accordance with their terms will provide money, in an amount
sufficient to pay all the principal (including any mandatory sinking fund payments) of, and interest and
premium, if any, on, the 2029 Debentures on the dates such payments are due in accordance with the
terms of such 2029 Debentures.
Governing Law
The Senior Indenture and the 2029 Debentures are governed by the internal law of the State of New
York.
