Exhibit 10(c)
BOARD OF DIRECTORS APPROVED
MAY 3, 1999
PHILLIPS PETROLEUM COMPANY
SUPPLEMENTAL EXECUTIVE RETIREMENT PLAN
SECTION I - PURPOSE
-------------------
The purpose of the Phillips Petroleum Company Supplemental
Executive Retirement Plan ("Plan") is to supplement the
retirement benefits of Retiring eligible employees who were hired
in mid-career. Phillips Petroleum Company ("Company") recognizes
that from time to time, it retains the services of employee(s)
after the employee has performed services at another company (or
companies) for varying periods of time, in order to obtain the
special skills and expertise developed by the key employee during
these other periods of employment. These employees generally
forego all or a portion of their potential retirement benefits
upon leaving their previous employer(s). This Plan, therefore,
supplements retirement benefits to at least partially compensate
for the loss of retirement benefits accrued at the previous
employer(s). The amount of supplemental benefit payable under
this Plan will not cause a Retiring eligible employee's
retirement benefit to equal or exceed a full career Retiring
eligible employee's benefit.
SECTION II - DEFINITION OF TERMS
--------------------------------
a) Retirement Income Plan is the Retirement Income Plan of
---------------------- Phillips Petroleum Company.
b) Retirement (or Retire, or is termination of employment with
---------- Retiring) the Company on or after the
employee's earliest early
retirement date as defined in the
Retirement Income Plan. It
includes termination of employment
at an age below 55 only when
Section V applies.
c) Credited Service, as determined in accordance with
----------------- the provisions of the Retirement
Final Average Earnings, Income Plan.
-----------------------
Normal Retirement Date,
-----------------------
and Early Retirement Date
-------------------------
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d) Total Final Average is the average of the high 3
------------------- earnings, excluding Incentive
Earnings Compensation Plan Awards, paid in
-------- consecutive years of the last 10
years prior to termination of
employment plus the average of the
high 3 Incentive Compensation Plan
Awards for any of such last 10
years under the Incentive
Compensation Plan, whether paid or
deferred and the Key Employee
Missed Credited Service Retirement
Plan, and shall recognize benefits
paid under Section 4.2 of the
Phillips Petroleum Company
Executive Severance Plan in the
same manner as layoff pay is
recognized under the Retirement
Income Plan.
e) Total Credited Service is an employee's Credited Service
---------------------- plus any additional months of
service as calculated under the
Principal Corporate Officers
Supplemental Retirement Plan and
Missed Credited Service as defined
in sub-section (j) of Section II
of Article I in the Retirement
Income Plan, plus months of
service by recognizing benefits
paid under Section 4.2 of the
Phillips Petroleum Company
Executive Severance Plan in the
same manner as layoff pay is
recognized under the Retirement
Income Plan.
f) Plan Administrator means the Executive Vice
------------------ President, Planning, Corporate
Relations and Services, or his
successor.
g) 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.
SECTION III - ELIGIBLE EMPLOYEES
--------------------------------
All employees of the Company who are participants in the
Retirement Income Plan and who, a) as of November 1, 1988
participated in the Incentive Compensation Plan as members of
Teams I, II, III
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(including those individuals promoted to such levels through
November 1, 1988, ie: Grade 33 or above and ICP eligible), or b)
were active employee participants or were eligible to participate
in the Key Employee Death Protection Plan on the date of its
termination (December 31, 1986), c) are hired subsequent to
November 1, 1988 and at the time of hire are recommended for
participation in the Plan by the Executive Vice President,
Planning, Corporate Relations and Services with approval by the
Chief Executive Officer, or d) prior to retirement are
recommended for participation in the Plan by the Executive Vice
President, Planning, Corporate Relations and Services with
approval by the Chief Executive Officer, will be eligible for
benefits under this Plan.
SECTION IV - ELIGIBILITY FOR BENEFITS
-------------------------------------
An eligible employee as described in Section III who commences
retirement benefits under the Retirement Income Plan, will be
eligible to receive the benefit amount described in Section VI
only if the results of (a) below exceed the results of (b) below
where:
(a) is the lesser of the following percentages;
(i) 2.4% times the greater of the eligible employee's
Credited Service or the Employee's Total Credited
Service at the time of Retirement; or
(ii) the Maximum SERP Benefit Percentage shown in the
schedule below based upon the eligible employee's
attained age at Retirement
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and, (b) is the percentage derived by multiplying 1.6% times the
eligible employee's Total Credited Service at the time
of Retirement.
Attained
Age at Maximum SERP
Retirement Benefit Percentage
---------- ------------------
65 60.0%
64 58.4%
63 56.8%
62 55.2%
61 53.6%
60 52.0%
59 50.4%
58 48.8%
57 47.2%
56 45.6%
55 44.0%
54 or younger -0-
SECTION V - SPECIAL ELIGIBILITY
-------------------------------
An eligible employee as described in Section III who is less than
age 55 and who is laid off under the Layoff Plan of Phillips
Petroleum Company and/or the Supplemental Layoff Plan of Phillips
Petroleum Company and/or the Enhanced Supplemental Layoff Pay
Plan of Phillips Petroleum Company and/or the Work Force
Stabilization Plan of Phillips Petroleum Company and/or who
receives benefits under the Phillips Petroleum Company Executive
Severance Plan or any similar plans which may be adopted by the
Company from time to time, will be eligible to receive the
benefit described in Section VI if the results of (a) below
exceed the results of (b) below where:
(a) is the lesser of the following percentages;
(i) 2.4% times the greater of an eligible employee's
Credited Service, or the employee's Total Credited
Service at the time of layoff or termination; or
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(ii) the Maximum SERP Benefit Percentage shown in the
schedule below based upon the eligible employee's
attained age at the time of layoff or termination.
and, (b) is the percentage derived by multiplying 1.6% times the
eligible employee's Total Credited Service at the time
of layoff or termination.
Attained Age
at the time Maximum SERP
of Layoff Benefit Percentage
---------- ------------------
54 42.4%
53 40.8%
52 39.2%
51 37.6%
50 36.0%
49 34.4%
48 32.8%
47 31.2%
46 29.6%
45 28.0%
44 26.4%
43 24.8%
42 23.2%
41 21.6%
40 20.0%
39 18.4%
38 16.8%
37 15.2%
36 13.6%
35 12.0%
34 10.4%
33 8.8%
32 7.2%
31 5.6%
30 4.0%
29 2.4%
28 0.8%
SECTION VI - BENEFIT AMOUNT
---------------------------
An eligible employee who qualifies for benefits under this Plan
in accordance with Sections IV and V will be eligible to receive
retirement benefits from the Plan as follows:
A. With respect to eligible employees who commence
retirement benefits on or after their Normal Retirement
Date -
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multiply the lesser of (a)(i) or (a) (ii) as computed
in Sections IV or V, as applicable, times the greater
of the employee's Final Average Earnings or the
employee's Total Final Average Earnings and with the
results reduced by the portion of the eligible
employee's Primary Social Security benefit as
determined in the same manner as such reduction is
determined under the Final Average Earnings formula of
the Retirement Income Plan.
B. With respect to eligible employees who commence
retirement benefits at an Early Retirement Date -
benefits will be calculated in the same manner as the
benefits for Normal Retirement Date, as described in A.
of this Section, but reduced for early retirement in
the same manner as is applicable under the Retirement
Income Plan.
In either A. or B. above the Retirement Income Plan calculations
shall be made as if no benefit limitations were imposed by the
Internal Revenue Code and no benefit reductions resulted from
participation in any qualified or non-qualified Company-sponsored
benefit plan, and the resulting benefit amount will be reduced by
applicable retirement benefit payments for which the retiree is
eligible from any of the following plans, or any other similar
plan or plans, of the Company or any of its subsidiary or
affiliated companies; Retirement Income Plan, Retirement
Restoration Plan of Phillips Petroleum Company, Key Employee
Deferred Compensation Plan of Phillips Petroleum Company, the
Retirement Makeup Plan of Phillips Petroleum Company, Principal
Corporate Officers Supplemental Retirement Plan of Phillips
Petroleum Company, the Phillips
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Petroleum Company Key Employee Death Protection Plan, the Key
Employee Supplemental Retirement Plan and the Key Employee Missed
Credited Service Retirement Plan.
SECTION VII - PAYMENT OF RETIREMENT BENEFITS
--------------------------------------------
Subject to the requirement that the manner of payment of
retirement benefits determined in accordance with this Plan, the
Retirement Restoration Plan of Phillips Petroleum Company, the
Key Employee Deferred Compensation Plan of Phillips Petroleum
Company, the Principal Corporate Officers Supplemental Retirement
Plan of Phillips Petroleum Company, the Retirement Makeup Plan of
Phillips Petroleum Company, the Key Employee Supplemental
Retirement Plan and the Key Employee Missed Credited Srvice
Retirement Plan shall be the same, and subject further to the
condition that a Retiring eligible employee who receives
retirement payments under this Plan other than in one lump-sum
payment, shall agree to be available during the payment period to
provide, from time to time, advice and consultation to the
Company after reasonable notice, or forfeit his/her remaining
unpaid benefits, therefore:
(i) The Retiring eligible employee may elect on the forms
prescribed by the Company to have such retirement
payments paid on a straight-life annuity basis, or to
have such life annuity payments converted in the manner
provided by the Retirement Income Plan to any one of
the other forms of payment which the Retiring eligible
employee would be entitled to select (except the
lump-sum settlement option) if such payments were to be
paid to the Retiring eligible employee under the
Retirement Income Plan.
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(ii) Notwithstanding (i) above, an eligible employee who is
commencing retirement benefits at age 60 or older may,
not later than 30 days prior to commencing retirement
benefits, express preferences as to:
(a) whether the payment amounts should be converted in
the manner provided by the Retirement Income Plan
from a life annuity basis to one lump-sum payment,
(b) whether such lump-sum payment shall be paid to the
employee on or as soon as practicable after the
employee's commencement of retirement benefits,
(c) whether such lump-sum payment shall be credited as
an award under the Company's Key Employee Deferred
Compensation Plan.
The Chief Executive Officer, with respect to Retiring eligible
employees who are not members of the Board of Directors and the
Compensation Committee of the Board of Directors, with respect to
Retiring eligible employees who are members of the Board of
Directors, shall consider such indication of preference and shall
respectively decide whether to accept or reject the preferences
expressed. In the event the Chief Executive Officer or the
Compensation Committee, as applicable, accepts such Retiring
eligible employee's preference, such retirement benefit shall be
paid in one lump sum as soon as practicable after the later of
such acceptance or the Retiring eligible employee's retirement
benefit commencement date; or if applicable, credited as of the
eligible
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employee's retirement benefit commencement date as an award under
the Key Employee Deferred Compensation Plan.
SECTION VIII - METHOD OF PROVIDING BENEFITS
-------------------------------------------
This Plan shall be unfunded. All benefits shall be provided
solely from the general assets of the Company and any rights
accruing to an eligible employee under the Plan shall be those of
a general creditor; provided, however, that the Company may
establish a grantor trust to satisfy part or all of its Plan
payment obligations so long as the plan remains unfunded for
purposes of Title I of ERISA.
SECTION IX - MISCELLANEOUS PROVISIONS
-------------------------------------
(a) No right or interest of an eligible employee under this Plan
shall be assignable or transferable, in whole or in part,
directly or indirectly, by operation of law or otherwise
(excluding devolution upon death or mental incompetency).
(b) Any claim for benefits hereunder shall be presented in
writing to the Plan Administrator for consideration, grant
or denial. In the event that a claim is denied in whole or
in part by the Plan Administrator, the claimant, within
ninety days of receipt of said claim by the Plan
Administrator, shall receive written notice of denial. Such
notice shall contain:
(1) a statement of the specific reason or reasons for the
denial;
(2) specific references to the pertinent provisions
hereunder on which such denial is based;
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(3) a description of any additional material or information
necessary to perfect the claim and an explanation of
why such material or information is necessary; and
(4) an explanation of the following claims review procedure
set forth in paragraph (c) below.
(c) Any claimant who feels that a claim has been improperly
denied in whole or in part by the Plan Administrator may
request a review of the denial by making written application
to the Trustee. The claimant shall have the right to review
all pertinent documents relating to said 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 days after receipt of written notice of
denial. The Trustee shall render a decision regarding the
claim within sixty days after receipt of a request for
review, unless special circumstances require an extension of
time for processing, in which case a decision shall be
rendered within a reasonable time, but not later than 120
days after receipt of the request for review. The decision
of the Trustee shall be in writing and, in the case of the
denial of a claim in whole or in part, shall set forth the
same information as is required in an initial notice of
denial by the Plan Administrator, other than an explanation
of this claims review procedure. The Trustee shall have
absolute discretion in carrying out its responsibilities to
make its decision of an appeal, including
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the authority to interpret and construe the terms hereunder,
and all interpretations, findings of fact, and the decision
of the Trustee regarding the appeal shall be final,
conclusive and binding on all parties.
(d) Compliance with the procedures described in paragraphs (b)
and (c) shall be a condition precedent to the filing of any
action to obtain any benefit or enforce any right which any
individual may claim hereunder. Notwithstanding anything to
the contrary in this Plan, these paragraphs (b), (c) and (d)
may not be amended without the written consent of a seventy-
five percent (75%) majority of Participants and Beneficiaries
and such paragraphs shall survive the termination of this
Plan until all benefits accrued hereunder have been paid.
(e) The Chief Executive Officer, may amend or terminate this
Plan at any time if, in his or her sole judgment such
amendment or termination is deemed desirable. However, such
amendments may not increase the benefits payable hereunder
to any Officer of the Company who is also currently a
Director of the Company.
(f) No amount accrued or payable hereunder shall be deemed to be
a portion of an eligible employee's compensation or earnings
for the purpose of any other employee benefit plan adopted
or maintained by the Company, nor shall this Plan be deemed
to amend or modify the provisions of the Retirement Income
Plan.
(g) Participation or nonparticipation in this Plan shall not
affect any eligible employee's employment status, or confer
any special rights other than those expressly stated in the
Plan.
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(h) Except as otherwise provided herein, the Plan shall be
binding upon the Company, its successors and assigns,
including but not limited to any corporation which may
acquire all or substantially all of the Company's assets and
business or with or into which the Company may be
consolidated or merged.
(i) The Plan shall be construed, regulated, and administered in
accordance with the laws of the State of Oklahoma except to
the extent that said laws have been preempted by the laws of
the United States.
SECTION X - EFFECTIVE DATE
--------------------------
This Plan became effective January 1, 1987.
2DP/013
05/03/99
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