Exhibit 10(16)
AMERADA HESS CORPORATION
JOHN B. HESS 1185 AVENUE OF THE AMERICAS
Chairman of the Board NEW YORK, NEW YORK 10036-2677
(212) 536-8514
March 18, 2002
Mr. F. Borden Walker
307 Heights Road
Ridgewood, NJ 07450
Dear Borden:
This letter will confirm our understanding concerning your participation in the
Amerada Hess Corporation Pension Restoration Plan (the "PRP") and the deferred
compensation you will receive in connection with your continued employment by
Amerada Hess Corporation (the "Corporation").
The Compensation and Management Development Committee of the Corporation's Board
of Directors has determined that you will receive Prior Service (as defined in
Section 4.1 of the PRP) for nineteen (19) years of related experience with Mobil
Oil Corporation ("Mobil") acquired prior to the date of your employment by the
Corporation on July 15, 1996 for the purpose of determining PRP benefits.
In general, PRP benefits are calculated as a life annuity based on the formula
of the Corporation's Employees' Pension Plan (the "Pension Plan") as though your
Prior Service counted under that plan, and there were no legal limits on
qualified plan benefits or annual compensation. The resulting amount is reduced
as necessary to account for any payment before age 65 or in any form other than
a life annuity based on the actuarial factors used to determine Pension Plan
benefits. Then the amount is reduced by subtracting any benefits payable from
the Pension Plan. Finally, the PRP amount is reduced by:
"... the monthly benefit actually payable to or on behalf of the Member
under the qualified and nonqualified pension plans of any prior employers
derived from periods of employment with such employers for which credit for
Prior Service was granted, or such amounts as would be payable from
investments made with the proceeds of lump sum payments received by the
Member from such other plans in a manner determined by the Committee at the
time credit for such Prior Service is granted ...."
You have advised us that as a result of your employment with Mobil you have a
total accrued and vested benefit of $4,892.42 per month payable at age 65 from a
combination of Mobil's qualified and non-qualified retirement plans. The life
annuity
Mr. F. Borden Walker March 18, 2002
equivalent of this Mobil pension will be coordinated with the PRP benefit at the
time of your retirement as described above. For this purpose, the actuarial
factors used by the Pension Plan shall be applied to the Mobil benefit to
account for any payment before age 65.
Nothing contained in the Pension Plan, PRP or this letter shall be construed as
a contract of employment or as changing the normal terms of the employment
relationship.
To qualify for the deferred compensation payments described above, you must sign
and return the enclosed copy of this letter by May 17, 2002. If you do not sign
and return the letter by then, the deferred compensation payments will not be
made available to you in the future.
The deferred compensation plan described above is unfunded for tax purposes and
for purposes of Title I of the Employee Retirement Income Security Act of 1974.
You would have the status of a general unsecured creditor of the Corporation
with respect to plan payments. The plan constitutes a mere promise to make
benefit payments in the future. Your rights with respect to any such payments
would not be subject in any manner to anticipation, alienation, sale, transfer,
assignment, pledge, encumbrance, attachment or garnishment by your creditors or
the creditors of your beneficiaries.
Please indicate your acceptance of and agreement to the foregoing by signing the
enclosed copy of this letter in the space provided below and returning it to me.
Yours truly,
AMERADA HESS CORPORATION
/s/ John B. Hess
By: John B. Hess
Accepted and Agreed to by:
/s/ H. Borden Walker March 18, 2002
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H. Borden Walker Date
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