EFFECTIVE JANUARY 1,
2005
CONOCOPHILLIPS
KEY EMPLOYEE SUPPLEMENTAL RETIREMENT PLAN
2008 RESTATEMENT
The purpose of
the ConocoPhillips Key Employee Supplemental Retirement Plan (the
“Plan”) is to attract and retain key employees by
providing them with supplemental retirement benefits. This Plan is
intended to be and shall be administered in part as an unfunded
pension excess benefit plan within the meaning of ERISA
Sections 3(36) and in part as an unfunded pension benefit plan
maintained primarily for a select group of management or highly
compensated employees.
PRE-AMERICAN JOBS CREATION ACT OF
2004
GRANDFATHERED PROVISIONS
Benefits under
this Plan, formerly called the Key Employee Supplemental Retirement
Plan of Phillips Petroleum Company (the “Phillips
Plan”), that commenced prior to January 1, 2005
(“AJCA-grandfathered benefits”), shall be subject
exclusively to the terms and conditions of the Phillips Plan in
effect on or before October 3, 2004. No change in the
ConocoPhillips Retirement Plan adopted subsequent to such date and
no change in the Phillips Plan or in the ConocoPhillips Key
Employee Supplemental Retirement Plan adopted after such date shall
apply to an AJCA-grandfathered benefit. Provided, however, for
purposes of this paragraph, benefits shall be deemed to have
commenced prior to January 1, 2005 and shall be
AJCA-grandfathered
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benefits if the
relevant corporate officer or committee approved the
Employee’s petition regarding time and form of payment before
January 1, 2005 even if the benefits commenced after
December 31, 2004. The “relevant corporate officer or
committee” means the person or persons with the authority
under the Phillips Plan to approve a petition regarding the time
and form of payment.
Terms used in
this Plan shall have the same meaning they have in the relevant
Title of the ConocoPhillips Retirement Plan if they are not
otherwise specifically defined herein. As used in this
Plan:
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(a)
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“Board” shall mean the
board of directors of the Company.
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(b)
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“Code” shall mean the
Internal Revenue Code of 1986, as amended from time to
time.
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(c)
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“Committee” shall mean
the Compensation Committee of the Board of Directors of
ConocoPhillips.
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(d)
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“Company” shall mean
ConocoPhillips Company, a Delaware corporation, or any successor
corporation. The Company is a subsidiary of
ConocoPhillips.
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(e)
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“ConocoPhillips” shall
mean ConocoPhillips, a Delaware corporation, or any successor
corporation. ConocoPhillips is a publicly held corporation and the
parent of the Company.
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(f)
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“Controlled Group” shall
mean ConocoPhillips and its Subsidiaries.
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(g)
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“Employee” shall mean a
person who is an active participant or a terminated vested
participant in the Retirement Plan.
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(h)
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“ERISA” shall mean the
Employee Retirement Income Security Act of 1974, as amended from
time to time, or any successor statute.
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(i)
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“Final Average Earnings”
shall mean “final average earnings” as that term is
defined in
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Title I of the ConocoPhillips
Retirement Plan.
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(j)
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“Incentive Compensation
Plan” shall mean the Incentive Compensation Plan of Phillips
Petroleum Company, the Annual Incentive Compensation Plan of
Phillips Petroleum Company, the Variable Cash Incentive Program of
ConocoPhillips or successor plans or programs, or all, as the
context may require.
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(k)
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“KEDCP” shall mean the
ConocoPhillips Key Employee Deferred Compensation Plan or a
successor plan.
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(l)
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“Participant” shall mean
an Employee who is eligible to receive a benefit from this Plan,
whether as an active participant who is currently employed by a
member of the Controlled Group or as a terminated vested
participant who was previously employed by a member of the
Controlled Group.
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(m)
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“Participating
Subsidiary” shall mean a Subsidiary that has adopted one or
more plans making Participants eligible for participation in this
Plan.
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(n)
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“Plan” shall mean the
ConocoPhillips Key Employee Supplemental Retirement Plan, the terms
of which are stated in and by this document. The Plan is sponsored
and maintained by the Company.
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(o)
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“Plan Administrator”
shall mean the person who is the highest level officer of the
Company with primary responsibility for human resources, or such
person’s successor.
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(p)
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“Plan-age 55” shall mean
the first of the calendar month after an Employee’s age 55
or, if earlier, the date the applicable title of the Retirement
Plan treats the Employee as being age 55.
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(q)
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“Restricted Stock” shall
mean shares of Stock which have certain restrictions attached to
the ownership thereof.
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(r)
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“Retirement Plan” shall
mean the ConocoPhillips Retirement Plan, which is qualified under
Code Section 401(a).
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(s)
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“Salary” shall mean the
monthly equivalent rate of pay for an Employee before adjustments
for any before-tax voluntary reductions.
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(t)
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“Schedule A
Employee” shall mean an Employee whose name appears in
Schedule A attached to and made a part of this
Plan.
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(u)
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“Separation from
Service” shall mean the date on which the Participant
separates from service with the Controlled Group within the meaning
of Code section 409A, whether by reason of disability, retirement,
or otherwise. In determining Separation from Service, with regard
to a bona fide leave of absence that is due to any medically
determinable physical or mental impairment that can be expected to
result in death or can be expected to last for a continuous period
of not less than six months, where such impairment causes the
Employee to be unable to perform the duties of his or her position
of employment or any substantially similar position of employment,
a 29-month period of absence shall be substituted for the six-month
period set forth in section 1.409A-1(h)(1)(i) of the regulations
issued under section 409A of the Code, as allowed thereunder. For
purposes of this Plan, Separation from Service shall not include a
separation caused by death.
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(v)
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“Stock” means shares of
common stock of ConocoPhillips, par value $.01.
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(w)
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“Subsidiary “ shall mean
any corporation or other entity that is treated as a single
employer with ConocoPhillips under section 414(b) or (c) of
the Code. In applying section 1563(a)(1), (2), and (3) of the
Code for purposes of determining a controlled group of corporations
under section 414(b) of the Code and for purposes of determining
trades or businesses (whether or not incorporated) under common
control under regulation section 1.414(c)-2 for purposes of section
414(c) of the Code, the language “at least 80%” shall
be
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used without substitution as allowed
under regulations pursuant to section 409A of the Code.
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(x)
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“Title I” shall mean
Title I of the ConocoPhillips Retirement Plan (Phillips Retirement
Income Plan).
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(y)
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“Title II” shall mean
Title II of the ConocoPhillips Retirement Plan (Cash Balance
Account).
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(z)
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“Title III” shall mean
Title III of the ConocoPhillips Retirement Plan (Tosco Pension
Plan).
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(aa)
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“Title IV” shall mean
Title IV of the ConocoPhillips Retirement Plan (Retirement Plan of
Conoco).
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(bb)
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“Total Final Average
Earnings” shall mean the sum of: (i) the average of the
high 3 consecutive Annual Earnings, (including any increases under
Section II(b)(bb), (ee), (ff) and (gg) of this Plan,
but excluding Incentive Compensation Plan awards and any increases
under Section II(b)(aa), (cc), and (dd) of this Plan),
paid or deemed to be paid in the Employee’s final eleven
calendar years of employment with the Company or a Participating
Subsidiary including the calendar year in which the
Employee’s last date of employment with the Company or a
Participating Subsidiary occurs; plus (ii) the average of the
high 3 Incentive Compensation Plan awards (including any increases
under Section II(b)(aa), (cc), or (dd) of this Plan, but
excluding any increases under Section II(b)(bb), (ee),
(ff) and (gg) of this Plan) paid or deemed to be paid in
the Employee’s final eleven calendar years of employment with
the Company or a Participating Subsidiary including the calendar
year in which the Employee’s last date of employment with the
Company or Participating Subsidiary occurs. Provided, however, in
determining Total Final Average Earnings, an Incentive Compensation
Plan award (and any increases under the provisions
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of
Section II(b) cited above) shall be taken into consideration
only if the Employee to whom such award or increase applies, was at
the time of the award or increase, classified in a ConocoPhillips
salary grade 19 or above job or any equivalent salary grade of
Phillips Petroleum Company.
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(cc)
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“Trustee” means the
trustee of the grantor trust established by the Trust Agreement
between the Company and Wachovia Bank, N.A. dated as of
June 1, 1998, or any successor trustee.
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SECTION II.
Plan Accrued Benefit .
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(a)
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An
Employee shall be entitled to payments under this Plan based on an
accrued benefit with the following components: (i) his Title
I-related accrued benefit, (ii) his Title II-related accrued
Benefit, (iii) his Title III-related accrued benefit (but only
with regard to an Employee who, on or after July 1, 2007,
performed an hour of service under Title III), and (iv) his
Title IV-related accrued benefit, each as defined below.
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(b)
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“Title I-related accrued
benefit shall mean the sum of (i), (ii), and
(iii) below:
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(i)
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The
difference between the Employee’s total accrued benefit under
Title I and his actual accrued benefit under Title I. For this
purpose, an Employee’s “total accrued benefit under
Title I” is the accrued benefit he would have if his accrued
benefit under Title I were determined under the terms of Title I
but with the following modifications:
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(aa)
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Include in Annual Earnings an award
under the Incentive Compensation Plan which the employee deferred
under the terms of the KEDCP. Include such award in the calendar
year in which the award would have been paid to the Employee if it
had not been deferred.
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(bb)
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Include in Annual Earnings salary
that would have been paid to the Employee but for the fact that he
voluntarily elected to defer receipt of that salary under the terms
of KEDCP. Include the deferred salary in Annual Earnings in the
calendar year in which the salary would have been paid had it not
been deferred.
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(cc)
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Include in Annual Earnings the
initial value of a restricted stock or restricted stock unit award
under the Incentive Compensation Plan. Include that value in Annual
Earnings in the calendar year in which the award was
granted.
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(dd)
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Include in Annual Earnings the value
of any special award specified by the Committee under the terms of
the special award to be included for Annual Earnings purposes under
Title I in the year in which any applicable restrictions on the
award lapse or, if deferred, in the year in which any applicable
restrictions would have lapsed absent an election to
defer.
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(ee)
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Disregard the limitations on
compensation related to Code section 401(a)(17).
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(ff)
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Disregard the limitation on benefits
related to Code section 415.
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(gg)
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If
an Employee is eligible to receive benefits under the
ConocoPhillips Executive Severance Plan or under the ConocoPhillips
Key Employee Change in Control Severance Plan, include in Annual
Earnings an amount determined by dividing the Employee’s
Salary by 4.3333 times the number of weeks or partial weeks from
the date the Employee’s employment ends with the Employer to
the end of that calendar year. Provided, however, this subsection
(gg) shall be disregarded to the extent the benefit created
solely by operation of this subsection (gg) is provided under
the terms of Title I.
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(ii)
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In
the case of an Employee who terminated employment on or after
February
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8,
1993, the Title I-related accrued benefit shall include an
additional supplemental accrued benefit calculated under the terms
of Title I, but disregarding the limitation on compensation that is
taken into account, using as final average earnings the difference,
if any, between the Total Final Average Earnings and the Final
Average Earnings used in Title I.
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(iii)
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The
Title I-related accrued benefit shall also include any benefit
provided under Section IV of this Plan.
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(c)
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“Title II-related accrued
benefit” shall mean the difference between the
Employee’s total accrued benefit under Title II and his
actual accrued benefit under Title II. For this purpose, an
Employee’s “total accrued benefit under Title II”
is the accrued benefit he would have if his accrued benefit under
Title II were determined under the terms of Title II but with the
following modifications:
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(i)
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Include in Annual Earnings an award
under the Incentive Compensation Plan which the Employee deferred
under the terms of the KEDCP. Include such award in the calendar
month and year in which the award would have been paid to the
Employee if it had not been deferred.
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(ii)
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Include in Annual Earnings salary
that would have been paid to the employee but for the fact that he
voluntarily elected to defer receipt of that salary under the terms
of KEDCP. Include the deferred salary in Annual Earnings in the
calendar month and year in which the salary would have been paid
had it not been deferred.
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(iii)
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Include in Annual Earnings the
initial value of a restricted stock or restricted stock unit award
under the Incentive Compensation Plan. Include that
value
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in
Annual Earnings in the calendar month and year in which the award
was granted.
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(iv)
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Include in Annual Earnings the value
of any special award specified by the Committee under the terms of
the special award to be included for Annual Earnings purposes under
Title II in the year in which any applicable restrictions on the
award lapse or, if deferred, in the year in which any applicable
restrictions would have lapsed absent an election to
defer.
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