Exhibit 10(a)
BOARD OF DIRECTORS APPROVED
MAY 3, 1999
PHILLIPS PETROLEUM COMPANY
EXECUTIVE SEVERANCE PLAN
Introduction
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The Board of Directors of Phillips Petroleum Company
recognizes that, from time to time, the Company may explore
potential transactions that could result in a Change of Control
of the Company. This possibility and the uncertainty it creates
may result in the loss or distraction of senior management
employees of the Company to the detriment of the Company and its
shareholders.
The Board considers the avoidance of such loss and
distraction to be essential to protecting and enhancing the best
interests of the Company and its shareholders. The Board also
believes that when a Change of Control is perceived as imminent,
or is occurring, the Board should be able to receive and rely on
disinterested service from senior management employees regarding
the best interests of the Company and its shareholders without
concern that senior management employees might be distracted or
concerned by the personal uncertainties and risks created by the
perception of an imminent or occurring Change of Control.
In addition, the Board believes that it is consistent
with the Company's employment practices and policies and in the
best interests of the Company and its shareholders to treat
fairly its employees whose employment terminates in connection
with or following a Change of Control.
Accordingly, the Board has determined that appropriate
steps should be taken to assure the Company of the continued
employment and attention and dedication to duty of its senior
management employees and to seek to ensure the availability of
their continued service, notwithstanding the possibility or
occurrence of a Change of Control.
Therefore, in order to fulfill the above purposes, the
following plan has been developed and is hereby adopted.
ARTICLE I
ESTABLISHMENT OF PLAN
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As of the Effective Date, the Company hereby
establishes the Phillips Petroleum Company Executive Severance
Plan, as set forth in this document. This Plan provides benefits
in addition to those provided for under the Work Force
Stabilization Plan to a select group of management or highly
compensated employees.
ARTICLE II
DEFINITIONS
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As used herein the following words and phrases shall
have the following respective meanings (unless the context
clearly indicates otherwise):
(a) Base Salary. The amount a Participant is entitled
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to receive as wages or salary on an annualized basis, excluding
all bonus, overtime, health additive and incentive compensation,
payable by an Employer as consideration for the Participant's
services.
(b) Board. The Board of Directors of Phillips
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Petroleum Company.
(c) Cause. A termination for "Cause" shall have
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occurred where a Participant is terminated because of (A) the
willful and continued failure of the Participant to perform
substantially the Participant's duties with the Company or any of
its affiliates (other than any such failure resulting from
incapacity due to physical or mental illness); or (B) the willful
engaging by the Participant in illegal conduct or gross
misconduct which is materially and demonstrably injurious to the
Company.
(d) Change of Control. Any of the events listed in
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the definition of "Coverage Date" under the Work Force
Stabilization Plan.
(e) Code. The Internal Revenue Code of 1986, as
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amended from time to time.
(f) Committee. The Compensation Committee of the
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Board.
(g) Company. Phillips Petroleum Company and any
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successor thereto.
(h) Date of Termination. As defined in Section 4.2.
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(i) Disability. A termination for "Disability" shall
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have occurred where a Participant is terminated because of a
disability which would entitle the Participant to long-term
disability benefits under the Phillips Petroleum Company Long-
Term Disability Insurance Plan if he or she participated in such
disability plan.
(j) Effective Date. May 3, 1999.
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(k) Employee. As defined in the Work Force
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Stabilization Plan.
(l) Employer. The Company or any of its subsidiaries.
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(m) Excise Tax. The excise tax imposed by Section
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4999 of the Code, together with any interest or penalties
imposed with respect to such excise tax.
(n) Good Reason. With respect to any Participant, the
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occurrence of any of the following events: (A) a reduction in
the Participant's Base Salary below the Required Base Salary; (B)
a material and adverse change in the Participant's duties and
responsibilities in com-
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parison to the duties and responsibilities enjoyed by the
Participant immediately prior to the Change of Control; (C) a
material reduction in the aggregate level of the incentive
compensation and employee benefits offered to the Participant in
comparison to the incentive compensation and benefits
arrangements enjoyed by the Participant immediately prior to the
Change of Control; or (D) any other event that constitutes a
"Layoff" of the Participant under the Work Force Stabilization
Plan.
(o) Net After-Tax Amount. With respect to any
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Payment, the Value of the Payment net of all taxes imposed on the
Participant with respect thereto under Sections 1 and 4999 of the
Code and applicable state and local law, determined by applying
the highest marginal rates that are expected to apply to the
Participant's taxable income for the taxable year in which the
Payment is made.
(p) Offset Amount. As defined in the Work Force
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Stabilization Plan.
(q) Parachute Value. With respect to any Payment, the
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present value as of the date of the change of control for
purposes of Section 280G of the Code of the Portion of such
Payment that constitutes a "parachute payment" under Section
280G(b)(2), as determined by the Accounting Form for purpose of
determining whether and to what extent the Excise Tax will apply
to such payment.
(r) Participant. As defined in Section 3.1.
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(s) Payment. Any payment or distribution in the
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nature of compensation to or for the benefit of a Participant,
whether paid or payable pursuant to the Plan otherwise.
(t) Plan. The Phillips Petroleum Company Executive
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Severance Plan.
(u) Qualified Sale. With respect to any Participant,
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a sale, distribution or other disposition by an Employer or an
affiliate of an Employer of the subsidiary, branch or other
business unit in which the Participant was employed before such
sale, distribution or disposition, if the Participant is offered
employment with the purchaser of such subsidiary, branch or other
business unit or the corporation or other entity which is the
owner thereof on substantially the same terms and conditions
under which the Participant worked for the Employer, including,
without limitation, base salary, duties and responsibilities,
program of benefits and location where based, and a legally
binding agreement or plan covering such Participant, providing
that upon a termination of employment with the subsidiary, branch
or business unit (or the corporation or other entity which is the
owner thereof) or any successor of the kind described in Article
VI of this Plan, within two years after the Change of Control of
the Company, the Participant's employer or any successor will pay
to each such former Participant an amount equal to the Separation
Benefit and other benefits that such former Participant would
have received under the Plan had he been a Participant at the
time of such termination, and which new employer plan or
agreement treats service with any Employer (irrespective of
whether the Employer was an affiliate of the Company or the
Employee was a Participant at the time of such service) and the
new employer as continuous service for purposes of calculating
separation benefits.
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(v) Required Base Salary. With respect to any
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Participant, the higher of (x) the Participant's Base Salary as
in effect immediately prior to the Change of Control and (y) the
Participant's highest Base Salary in effect at any time
thereafter.
(w) Retirement. A termination by "Retirement" shall
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have occurred where a Participant's termination is due to his or
her voluntary normal or early retirement under a pension plan
sponsored by an Employer or its affiliates, as defined in such
plan.
(x) Safe Harbor Amount. Means the maximum Parachute
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Value of all Payments that a Participant can receive without any
Payments being subject to the Excise Tax.
(y) Separation Payments. The Supplemental Separation
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Payments and the benefits payable under Paragraphs 1 and 3 of
Article 5 of the Work Force Stabilization Plan.
(z) Separation Period. With respect to any
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Participant, the period beginning on the Participant's Date of
Termination, and continuing for 156 weeks for a Group I
Participant and for 104 weeks for a Group II Participant.
(aa) Supplemental Separation Payments. The payments
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provided for in accordance with Section 4.2 of the Plan.
(bb) Trustee. The trustee of the grantor trust
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established by the Trust Agreement between the Company and
Wachovia Bank, N. A. dated as of June 1, 1998, or any successor
trustee.
(cc) Value. With respect to any Payment, the economic
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present value of a Payment as of the date of the Change of
Control for purposes of Section 280G of the Code, as determined
by the Accounting Firm using the discount rate required by
Section 280G(I)(4) of the Code.
(dd) Week's Pay. As defined in the Work Force
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Stabilization Plan, provided, that the Participant's "regular
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monthly salary rate" for such purpose shall be not less than the
Participant's Required Base Salary divided by twelve.
(ee) Work Force Stabilization Plan. The Work Force
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Stabilization Plan of Phillips Petroleum Company, as in effect
from time to time.
ARTICLE III
ELIGIBILITY
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3.1 Participation. Each Employee who is approved by
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the Committee to participate in the latest established
Performance Period of the Long-Term Incentive Plan of the
Phillips Petroleum Company Omnibus Securities Plan ("LTIP")
established before a Change of Control shall be a "Participant"
in the Plan. Group I Participants include all Participants who
hold the office of Senior Vice President of the Company and all
higher offices. Group II Participants include all Participants
other than Group I Participants.
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3.2 Duration of Participation. A Participant shall
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cease to be a Participant in the Plan when he or she (i) ceases
to be an Employee of an Employer or (ii) is not approved by the
Committee to be a participant in the latest established
Performance Period under the LTIP. A Group I Participant shall
cease to be included in Group I at such time as the Participant
ceases to hold the office of Senior Vice President of the Company
or a higher office. Notwithstanding the foregoing, a
Participant who is entitled, as a result of ceasing to be an
Employee of an Employer, to payment of a Separation Benefit or
any other amounts under the Plan shall remain a Participant in
the Plan until the full amount of the Separation Benefit and any
other amounts payable under the Plan have been paid to the
Participant, and an Employee who is a Participant immediately
before a Change of Control shall remain a Participant even if he
or she is not approved by the Committee as a participant in any
Performance Period under the LTIP established after the Change of
Control.
ARTICLE IV
SEPARATION BENEFITS
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4.1 Right to Separation Benefit. A Participant shall
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be entitled to receive from the Company or an Employer a
Supplemental Separation Benefit in the amount provided in Section
4.2 if:
(a) a Change of Control has occurred,
(b) the Participant's employment by an Employer is
terminated: (i) by action of the Employer or any of its
affiliates, unless the termination is because of the
Participant's transfer to another Employer, death, Disability, or
Retirement, for Cause, or as a result of a Qualified Sale; or
(ii) by the Participant within 90 days after the occurrence of an
event constituting Good Reason; provided, in either event, that
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either (A) such termination occurs after such Change of Control
and on or before the second anniversary thereof, or (B) the
termination described in clause (i), or the event constituting
Good Reason giving rise to the termination described in clause
(ii), as applicable, occurs before such Change of Control but the
Participant can reasonably demonstrate that such termination or
event, as applicable, occurred at the request of a third party
who had taken steps reasonably calculated to effect a Change of
Control, or otherwise occurred in connection with or in
anticipation of a Change of Control, and
(c) the Participant has executed and delivered to the
Plan Administrator or his designee on or before the date which is
sixty (60) days after the later of his Date of Termination, or
the date he is notified of his benefits under this Plan, or if
the Participant has not been notified of his benefits pursuant to
Plan, sixty (60) days after the date a claim for benefits is
approved pursuant to Article VIII, a general release of all
liabilities and claims relating to his employment and termination
thereof (except for claims under the National Labor Relations Act
or applicable worker's compensation statutes, claims under the
Phillips Layoff Plan or any successor plan, claims for medical
benefits under Section 4.4, claims for benefits under the Work
Force Stabilization Plan, or such claims as the Participant may
have under the Company's personnel policies regarding
reimbursements for business associated expenses) on a form
prescribed by the Com-
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pany; provided, if the sixtieth (60th) day is a scheduled Company
holiday at the Employee's work location, the first business day
thereafter shall be the last date the release may be executed and
delivered; provided, further that the release must remain
unrevoked by the Participant through and including the time he
receives payment of such benefits from this Plan;
4.2 Separation Benefits. The Supplemental Separation
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Benefit shall be a lump sum payment in cash equal to (a) one
Week's Pay times (b) the number of weeks in the Separation
Period, reduced (but not below zero) by (i) any cash severance
pay to which the Participant is entitled under Paragraphs 1 and 3
of Article 5 of the Work Force Stabilization Plan before
reduction for any Offset Amount and (ii) any other severance pay
or pay in lieu of notice required to be paid to such Employee
under applicable law. The Supplemental Separation Benefit shall
be paid by the Company or the Participant's Employer to the
Participant within ten days of the date such termination takes
effect (the "Date of Termination").
4.3 Other Benefits Payable. The Separation Benefit
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provided pursuant to Section 4.2 above shall be provided in
addition to, and not in lieu of, all other accrued or vested or
earned but deferred compensation, rights, options or other
benefits which may be owed to the Participant upon or following
termination, including but not limited to accrued vacation or
sick pay, amounts or benefits payable under any bonus or other
compensation plans, stock option plan, stock ownership plan,
stock purchase plan, life insurance plan, health plan, disability
plan or similar or successor plan.
4.4 Health Plan Coverage. Provided a Participant is
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eligible for Supplemental Separation Payments under Section 4.1
(without regard to whether such payment may be reduced to zero
under Section 4.2), the Participant and his or her eligible
dependents shall also eligible to continue health plan coverage
including medical, dental, and/or prescription drug coverages on
the same terms and conditions as active employees and their
dependents, except as specified in this Section 4.4, for a period
of time after the Participant's Date of Termination equal to
eighteen months (provided that the total number of months of such
continued coverage eligibility provided under this Plan and the
Work Force Stabilization Plan will not exceed eighteen months);
provided further that such benefits will continue only for so
long as the Participant continues to pay premiums at a rate equal
to twenty percent of total premium for each such coverage. The
"qualifying event" of a Participant and his or her eligible
dependents for purposes of the health continuation coverage
requirements of the Employee Retirement Income Security Act of
1974, as amended ("ERISA") and the Code that arises in connection
with the Participant's termination shall be considered to occur
on the Participant's Date of Termination.
4.5 Certain Additional Payments by the Company.
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(a) Anything in this Agreement to the contrary
notwithstanding and except as set forth below, in the event it
shall be determined that any Payment to a Participant would be
subject to the Excise Tax, then the Participant shall be entitled
to receive an additional payment (a "Gross-Up Payment") in an
amount such that after payment by the Participant of all taxes
(including any interest or penalties imposed with respect to such
taxes), including, without limitation, any income taxes (and any
interest and penalties imposed with respect thereto) and Excise
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Tax imposed upon the Gross-Up Payment, the Participant retains an
amount of the Gross-Up Payment equal to the Excise Tax imposed
upon the Payments. Notwithstanding the foregoing provisions of
this Section 4.5, if it shall be determined that the Participant
is entitled to a Gross-Up Payment, but that the Parachute Value
of all of the Participant's Payments does not exceed 110% of the
Safe Harbor Amount, then no Gross-Up Payment shall be made to the
Participant and the Participant's Separation Payments, in the
aggregate, shall be reduced to (but not below zero) such that the
Parachute Value of all of the Participant's Payments equals the
Safe Harbor Amount, determined in such a manner as to maximize
the Value of all Payments actually made to the Participant.
(b) Subject to the provisions of Section 4.5(c), all
determinations required to be made under this Section 4.5,
including whether and when a Gross-Up Payment is required and the
amount of such Gross-Up Payment and the assumptions to be
utilized in arriving at such determination, shall be made at the
Company's direction by either (i) the enrolled actuary for the
Retirement Income Plan of Phillips Petroleum Company immediately
prior to the Change of Control, or (ii) the shareholder approved
independent auditor for the Company immediately prior to the
Change of Control (the "Accounting Firm"), which shall provide
detailed supporting calculations both to the Company and the
Participant within 15 business days of the receipt of notice from
the Participant that there has been a Payment, or such earlier
time as is requested by the Company. All fees and expenses of
the Accounting Firm shall be borne solely by the Company.
Subject to Section 4.5(e) below, any Gross-Up Payment, as
determined pursuant to this Section 4.5, shall be paid by the
Company to the Participant within five days of the receipt of the
Accounting Firm's determination. Any determination by the
Accounting Firm shall be binding upon the Company and the
Participant. As a result of the uncertainty in the application
of Section 4999 of the Code at the time of the initial
determination by the Accounting Firm hereunder, it is possible
that Gross-Up Payments which will not have been made by the
Company should have been made ("Underpayment"), consistent with
the calculations required to be made hereunder. In the event
that the Company exhausts its remedies pursuant to Section 4.5(c)
and the Participant thereafter is required to make a payment of
any Excise Tax, the Accounting Firm shall determine the amount of
the Underpayment that has occurred and any such Underpayment
shall be promptly paid by the Company to or for the benefit of
the Participant.
(c) The Participant shall notify the Company in
writing of any claim by the Internal Revenue Service that, if
successful, would require the payment by the Company of the
Gross-Up Payment. Such notification shall be given as soon as
practicable but no later than ten business days after the
Participant is informed in writing of such claim and shall
apprise the Company of the nature of such claim and the date on
which such claim is requested to be paid. The Participant shall
not pay such claim prior to the expiration of the 30-day period
following the date on which it gives such notice to the Company
(or such shorter period ending on the date that any payment of
taxes with respect to such claim is due). If the Company
notifies the Participant in writing prior to the expiration of
such period that it desires to contest such claim, the
Participant shall:
(i) give the Company any information reasonably
requested by the Company relating to such
claim,
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(ii) take such action in connection with contesting
such claim as the Company shall reasonably
request in writing from time to time,
including, without limitation, accepting legal
representation with respect to such claim by an
attorney reasonably selected by the Company,
(iii) cooperate with the Company in good faith in
order effectively to contest such claim, and
(iv) permit the Company to participate in any
proceedings relating to such claim;
provided, that the Company shall bear and pay directly all costs
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and expenses (including additional interest and penalties)
incurred in connection with such contest and shall indemnify and
hold the Participant harmless, on an after-tax basis, for any
Excise Tax or income tax (including interest and penalties with
respect thereto) imposed as a result of such representation and
payment of costs and expenses. Without limitation on the
foregoing provisions of this Section 4.5(c), the Company shall
control all proceedings taken in connection with such contest
and, at its sole option, may pursue or forgo any and all
administrative appeals, proceedings, hearings and conferences
with the taxing authority in respect of such claim and may, at
its sole option, either direct the Participant to pay the tax
claimed and sue for a refund or contest the claim in any
permissible manner, and the Participant shall prosecute such
contest to a determination before any administrative tribunal, in
a court of initial jurisdiction and in one or more appellate
courts, as the Company shall determine; provided, that if the
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Company directs the Participant to pay such claim and sue for a
refund, the Company shall advance the amount of such payment to
the Participant, on an interest-free basis and shall indemnify
and hold the Participant harmless, on an after-tax basis, from
any Excise Tax or income tax (including interest or penalties
with respect thereto) imposed with respect to such advance or
with respect to any imputed income with respect to such advance;
and provided, further, that any extension of the statute of
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limitations relating to payment of taxes for the taxable year of
the Participant with respect to which such contested amount is
claimed to be due is limited solely to such contested amount.
Furthermore, the Company's control of the contest shall be
limited to issues with respect to which a Gross-Up Payment would
be payable hereunder and the Participant shall be entitled to
settle or contest, as the case may be, any other issue raised by
the Internal Revenue Service or any other taxing authority.
(d) If, after the receipt by the Participant of an
amount advanced by the Company pursuant to Section 4.5(c), the
Participant becomes entitled to receive any refund with respect
to such claim, the Participant shall (subject to the Company's
complying with the requirements of Section 4.5(c)) promptly pay
to the Company the amount of such refund (together with any
interest paid or credited thereon after taxes applicable
thereto). If, after the receipt by the Participant of an amount
advanced by the Company pursuant to Section 4.5(c), a
determination is made that the Participant shall not be entitled
to any refund with respect to such claim and the Company does not
notify the Participant in writing of its intent to contest such
denial of refund prior to the expiration of 30 days after such
determination, then such advance shall be forgiven
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and shall not be required to be repaid and the amount of such
advance shall offset, to the extent thereof, the amount of Gross-
Up Payment required to be paid.
(e) Notwithstanding any other provision of this
Section 4.5, the Company may withhold and pay over to the
Internal Revenue Service for the benefit of the Participant all
or any portion of the Gross-Up Payment that it determines in good
faith that it is or may be in the future required to withhold,
and the Participant hereby consents to such withholding.
4.6 Payment Obligations Absolute. Subject to Section
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4.5, the obligations of the Company and an Employer to pay the
Separation Benefits described in Section 4.2 shall be absolute
and unconditional and shall not be affected by any circumstances,
including, without limitation, any set-off, counterclaim,
recoupment, defense or other right which the Company or any of
its Subsidiaries may have against any Participant. In no event
shall a Participant be obligated to seek other employment or take
any other action by way of mitigation of the amounts payable to a
Participant under any of the provisions of this Plan, nor shall
the amount of any payment hereunder be reduced by any
compensation earned by a Participant as a result of employment by
another employer.
ARTICLE V
SUCCESSOR TO COMPANY
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5.1 Successor. This Plan shall bind any successor of
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the Company, its assets or its businesses (whether direct or
indirect, by purchase, merger, consolidation or otherwise), in
the same manner and to the same extent that the Company would be
obligated under this Plan if no succession had taken place. In
the case of any transaction in which a successor would not by the
foregoing provision or by operation of law be bound by this Plan,
the Company shall require such successor expressly and
unconditionally to assume and agree to perform the Company's
obligations under this Plan, in the same manner and to the same
extent that the Company would be required to perform if no such
succession had taken place. The term "Company," as used in this
Plan, shall mean the Company as hereinbefore defined and any
successor or assignee to the business or assets which by reason
hereof becomes bound by this Plan.
ARTICLE VI
DURATION, AMENDMENT AND TERMINATION
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6.1 Duration. If a Change of Control has not
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occurred, this Plan shall continue in effect unless and until it
is terminated as provided in Section 6.2. If a Change of Control
occurs, this Plan shall continue in full force and effect and
shall not terminate or expire until after all Participants who
become or may become entitled to any payments hereunder shall
have received such payments in full and all adjustments required
to be made pursuant to Section 4.5 have been made.
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6.2 Amendment and Termination.
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(a) If a Change of Control has not occurred, this Plan
may be amended from time to time during its term by the Company
acting through its Board of Directors, Executive Committee, or to
the extent authorized by the Board of Directors, its Chief
Executive Officer, provided that any such amendment which shall
in any manner reduce, diminish or otherwise adversely affect any
benefit which is or may at any time in the future become payable
hereunder, or any such amendment which shall alter the definition
of Change of Control shall be made effective not less than two
years after the action of the Company authorizing such amendment,
and in no event shall any such amendment take effect prior to
May 3, 2001, unless, and then only to the extent that such amendment
is or becomes necessary in order to assure continued compliance
by this Plan with any applicable state or federal law or
regulation.
(b) This Plan shall not terminate prior to May 3,
2001. On or after May 3, 1999 the Company may, by action of its
Board of Directors, terminate this Plan, provided, however, that
the effective date of such termination shall be not less than two
years from the date of such Board action. Provided further that
in the event a Change of Control shall occur prior to the
effective date of termination, the provisions of Section 6.2(c)
shall apply.
(c) If a Change of Control shall occur while this Plan
is in effect, no then-pending amendment or termination shall take
effect, this Plan shall remain in full force and effect as at the
Change of Control, and this Plan shall terminate automatically
without further action on behalf of the Company immediately
following the making of all payments to Participants of this
Plan.
ARTICLE VII
FUNDING AND ADMINISTRATION
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7.1 Funding. All benefits accruing or to be paid
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hereunder shall be paid from the general assets of the Company;
provided, however, that the Company has established a grantor
trust which the Company may (but need not) use to satisfy all of
its Plan payment obligations so long as the Plan remains an
unfunded excess benefit plan for purposes of Title I of ERISA.
Neither Employees nor Participants shall be required or permitted
to make contributions under the Plan.
7.2 Administration.
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(a) The Plan shall be administered by the Plan
Administrator. The Plan Administrator may adopt such rules,
regulations and forms as deemed desirable for administration of
the Plan and shall have the discretionary authority to allocate
responsibilities under the Plan to such other persons as may be
designated, whether or not employee members of the Board.
(b) The person who occupies the position of Executive
Vice President, Human Resources, Capital Budgeting and Services
(or similar title), Phillips Petroleum Company, or his
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successor, shall be a Named Fiduciary and shall be the Plan
Administrator. Whenever there is a change in the name of the
person occupying the position of Plan Administrator, the
Secretary of Phillips Petroleum Company shall advise the Trustee
in writing of the name of such person, and the Trustee may assume
that such person shall continue in office until advised
differently in the same manner.
7.3 Errors and Misstatements. If in the
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administration of the Plan an inadvertent error by the Company or
its agents shall occur with respect to the benefits of any
Participant, or if in a claim for a benefit hereunder, or in
response to any request of the Company for information, any
Employee or Participant makes any statement which is erroneous or
fails to state any material fact, the amount of his benefits
shall be adjusted in an equitable manner to conform to the facts.
Such adjustment may include, where appropriate, the requirement
that the Participant repay to the Company any amount paid to the
Participant as a result of inadvertent error by the Company or
its agents, or such erroneous statement or material omission of
fact.
7.4 Administrative Expenses. The reasonable expenses
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incident to the operation of the Plan, including but not limited
to the compensation and expenses of the attorneys, advisors,
actuaries, accountants, fiduciaries, and such other persons
providing professional, technical, and clerical assistance as may
be required, shall be paid by the Company.
ARTICLE VIII
CLAIMS PROCEDURE
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8.1 Initial Claims. Any claim for benefits under this
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Plan shall be presented in writing to the Plan Administrator for
consideration, and grant or denial. In the event that a claim is
denied in whole or in part by the Plan Administrator, the
claimant, within sixty (60) days of receipt of said claim by the
Plan Administrator, shall receive written notice of denial. Such
notice shall contain:
(i) a statement of the specific reason or reasons
for the denial;
(ii) specific reference(s) to the pertinent Plan
provision(s) on which such denial is based; and
(iii) a description of any additional material or
information necessary to perfect the claim and
an explanation of the Plan's claim review
procedure.
8.2 Appeals. Any claimant who believes that a claim
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has been improperly denied in whole or in part by the Plan
Administrator may request a further review of the denial by
making written application to the Trustee to appeal the denial.
The claimant shall have the right to review all pertinent Plan
documents relating to his claim and to submit issues and comments
in writing to the Trustee. Any person filing an appeal from the
denial of a claim must do so in writing within sixty (60) days
after the Plan Administrator's issuance of a written notice of
denial. The Trustee shall render a decision regarding the claim
within sixty (60) days after receipt of a request for review
unless special circumstances require an extension of time for
processing,
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in which case a decision shall be rendered within a reasonable
time but not later than one hundred twenty (120) days after the
receipt of a request for review. The decision of the Trustee
shall be in writing and, in the case of the continued denial of a
claim in whole or in part, shall set forth a statement of the
specific reason or reasons for denial and specific reference to
the pertinent Plan provisions on which the denial is based. The
Trustee shall have absolute discretion in carrying out its
responsibilities to make its decision of an appeal, including the
authority to interpret and construe the terms hereunder, and all
interpretations, findings of fact, and the decision of the rustee
regarding the appeal shall be final, conclusive and binding on
all parties.
8.3 Further Actions. Compliance with the procedure
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specified by this Article shall be a condition precedent to the
filing of any action in a court of competent jurisdiction by any
claimant or other person seeking to enforce any claim for
benefits under the Plan.
ARTICLE IX
MISCELLANEOUS
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9.1 Indemnification. If a Participant institutes any
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legal action in seeking to obtain or enforce, or is required to
defend in any legal action the validity or enforceability of, any
right or benefit provided by this Plan, the Company or the
Employer shall reimburse the Participant for all reasonable costs
and expenses relating to such legal action, including reasonable
attorney's fees and expenses incurred by such Participant, unless
a court or other finder of fact having jurisdiction thereof makes
a determination that the Participant's position was frivolous.
In no event shall the Participant be required to reimburse the
Company for any of the costs and expenses relating to such legal
action. The Company's obligations under this Section 9.1 shall
survive the termination of this Plan.
9.2 Employment Status. This Plan does not constitute
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a contract of employment or impose on the Participant or the
Participant's Employer any obligation to retain the Participant
as an Employee, to change the status of the Participant's
employment, or to change the Company's policies or those of its
Subsidiaries' regarding termination of employment.
9.3 Validity and Severability. The invalidity or
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unenforceability of any provision of the Plan shall not affect
the validity or enforceability of any other provision of the
Plan, which shall remain in full force and effect, and any
prohibition or unenforceability in any jurisdiction shall not
invalidate or render unenforceable such provision in any other
jurisdiction.
9.4 Governing Law. The validity, interpretation,
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construction and performance of the Plan shall in all respects be
governed by the laws of Oklahoma, without reference to principles
of conflict of law, except to the extent pre-empted by federal
law.
2DP/ExecSevPlan 05/03/99
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