Exhibit 10.2
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Thomas C. Knudson Conoco Inc.
Senior Vice President MA 3086
Human Resources, Information Management and P.O. Box 2197
Corporate Communications Houston, TX 77252-2197
Phone: 281-293-1310
Fax: 281-293-2961
April 12, 2002
Jimmy W. Nokes
Conoco Inc.
PE3070
Houston, TX
Re: Conoco Inc. Key Employee Severance Plan
Dear Jim:
The purpose of this agreement (this "Agreement") is to set
forth our understanding related to your benefits under the Conoco
Inc. Key Employee Severance Plan (the "Plan") in connection with
the transactions (collectively the "Transaction") contemplated by
the Agreement and Plan of Merger, dated as of November 18, 2001,
by and among Conoco Inc. (the "Company"), Phillips Petroleum
Company, a Delaware corporation, CorvettePorsche Corp., a
Delaware corporation, which was renamed "ConocoPhillips",
Corvette Merger Corp., a Delaware corporation and a wholly owned
subsidiary of ConocoPhillips, and Porsche Merger Corp., a
Delaware corporation and a wholly owned subsidiary of
ConocoPhillips (the "Merger Agreement").
1. Payment on Closing. If you are still employed by the
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Company and/or any affiliate of the Company or any successor
thereof on the Closing Date, as defined in the Merger Agreement,
then, in exchange for your agreement to waive your rights under
the Plan with respect to the Transaction (as described in Section
2 below), promptly after the Closing Date (but in no event later
than ten (10) days after the Closing Date) the Company and/or any
affiliate of the Company or any successor thereof shall pay to
you in cash the amount to which you would be entitled to receive
had the Company and/or any affiliate of the Company or any
successor thereof terminated your employment without Cause (as
defined in the Plan) immediately following the Closing Date (the
"Closing Payment"). In addition, at the same time the payment in
the immediately preceding sentence is made, the Company and/or
any affiliate of the Company or any successor thereof will pay to
you in cash the amount of Gross-Up Payments (the "Gross-Up
Payments"), if any, to which you would be entitled to receive
under the Plan had the Company and/or any affiliate of the
Company or any successor thereof terminated your employment
without Cause immediately following the Closing Date. Both the
Closing Payment and the Gross-Up Payments shall be reduced by
applicable withholdings of income, excise and employment taxes.
Notwithstanding any other provision of this Agreement to the
contrary, if you are not employed by the Company and/or any
affiliate of the Company or any successor thereof on the Closing
Date on account of your death or "disability" (as defined below
in the following sentence), you shall nevertheless be deemed for
purposes of this Agreement to be employed on the Closing Date.
For purposes of this Agreement, "disability" shall mean a
physical or mental condition causing your inability to
substantially perform your duties with the Company and/or any
affiliate of the Company or any successor thereof and entitling
you to benefits under any long-term sick pay or disability income
policy or program of the Company and/or any affiliate of the
Company or any successor thereof. An
estimate of the total amount of the before-tax Closing Payment,
not including the Gross-Up Payments which will in fact be part of
the actual amount paid, is set forth in Exhibit A which is
attached to this Agreement and incorporated into the Agreement
for all purposes.
2. Waiver and Release: As a condition precedent to the receipt
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of payment under this Agreement, you hereby agree to irrevocably
waive any and all claims of any kind arising out of or in
connection with the Plan solely as it relates to the Transaction,
and to irrevocably release the Company or any of its officers,
directors, subsidiaries or affiliates from liability for any and
all claims of any kind arising out of or in connection with the
Plan solely as it relates to the Transaction. Your waiver and
release under this Section 2 is contingent upon your actual
receipt of the payment described in Section 1. The above-
described waiver and release shall be identical in every material
respect to the waiver and release attached to the Agreement as
Exhibit B.
3. Source of Payment: The payment provided for in this
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Agreement shall be paid in cash from the general funds of the
Company, and no special or separate funds shall be established
and no other segregation of assets shall be made to assure
payment. You will have no right, title or interest whatever in
or to any investments which the Company may make to aid the
Company in meeting its obligations hereunder. Nothing contained
in this Agreement, and no action taken pursuant to this
provision, shall create or be construed to create a trust of any
kind, or a fiduciary relationship, between the Company and you or
any other person. To the extent that you acquire a right to
receive payment from the Company hereunder, such right shall be
no greater than the right of an unsecured creditor of the
Company. For purposes of this Section 3, the term Company shall
include any affiliate of the Company that employs you and any
successor of the Company and/or any such affiliate.
4. Miscellaneous:
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A. This Agreement shall be governed by and construed in
accordance with the laws of the State of Texas, without reference
to principles of conflict of laws. Further, you agree that any
legal proceeding to enforce the provisions of this Agreement
shall be brought in Houston, Harris County, Texas, and hereby
waive your right to any pleas regarding subject matter or
personal jurisdiction and venue. This Agreement may not be
amended or modified otherwise than by a written agreement
executed by the parties hereto or their respective successors and
legal representatives.
B. This Agreement constitutes the entire agreement between us
with respect to the Plan and supersedes any and all prior written
or oral agreements, arrangements or understandings between you
and the Company. If your employment by the Company and/or any
affiliate of the Company or any successor thereof terminates for
any reason (other than death or disability) prior to the Closing
Date resulting in your not being employed by the Company or any
affiliate of the Company or any successor thereof on the Closing
Date, then this Agreement shall be null and void and be of no
effect, neither party will be bound to perform the obligations
set forth in Section 1 or 2 of this Agreement and the Plan will
control the severance benefits, if any, payable to you upon any
such termination. We also agree that if the Closing Date does
not occur prior to March 13, 2003, this Agreement shall be null
and void and be of no effect, and neither party will be bound to
perform the obligations set forth in Section 1 or 2 of this
Agreement and the Plan will control the severance benefits, if
any, payable to you upon termination of your employment resulting
in your not being employed by the Company or any affiliate of the
Company or any successor thereof.
2
Please sign both copies of this Agreement to indicate your
agreement to the foregoing, and return one original signed copy
to me.
Sincerely,
/s/ Tom Knudson
Tom Knudson
Senior Vice President, Human Resources,
Information Management and Corporate Communications
Accepted and Agreed to By:
/s/ Jim W. Nokes
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[Name]
April 16, 2002
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[Date]
3
Exhibit A
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Jimmy W. Nokes
Estimate Of Benefits To Be Paid At Closing
Of Conoco Phillips Merger
Pursuant To Key Employee Severance Plan Of Conoco
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Annual Base Salary (projected at 4%) $624,000
Annual Incentive Compensation 825,000
Option-Based Amount 2,384,250
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3,833,250
x 3
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Subtotal 11,499,750
Retirement Plan-Related Amount 1,713,056
TOTAL BEFORE TAX $13,212,806
Note: This is an estimate. The actual payment will be
recalculated at closing using current assumptions at that time.
The actual payment will also include a tax "Gross-Up Payment" as
defined by the Plan.
Exhibit B
WAIVER AND RELEASE OF CLAIMS
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In consideration of, and subject to, the payments to be made
to me by Conoco Inc., a Delaware corporation (the "Company") or
any of its subsidiaries, pursuant to the letter agreement to
which this Waiver and Release of Claims is attached, which I
acknowledge that I would not otherwise be entitled to receive, I
hereby waive any claims I may have under the Conoco Inc. Key
Employee Severance Plan (the "Plan") solely as it relates to the
transactions (collectively the "Transaction") contemplated by the
Agreement and Plan of Merger, dated as of November 18, 2001, by
and among the Company, Phillips Petroleum Company, a Delaware
corporation, CorvettePorsche Corp., a Delaware corporation, which
was renamed "ConocoPhillips", Corvette Merger Corp., a Delaware
corporation and a wholly owned subsidiary of ConocoPhillips, and
Porsche Merger Corp., a Delaware corporation and a wholly owned
subsidiary of ConocoPhillips, and further agree to and do release
and forever discharge the Company and its successors or any
subsidiary or parent of the Company and their respective
successors, and their respective past and present officers,
directors, shareholders, employees and agents from any and all
claims and causes of action, known or unknown, arising out of or
in connection with the Plan solely as it relates to the
Transaction.
Notwithstanding the foregoing or any other provision hereof,
nothing in this Waiver and Release of Claims shall adversely
affect (i) my rights to benefits other than severance benefits
under plans, programs and arrangements of the Company or any
subsidiary or parent of the Company which are accrued but unpaid
as of the date hereof; or (ii) my rights to indemnification under
any indemnification agreement, applicable law and the
certificates of incorporation and bylaws of the Company and any
subsidiary or parent of the Company, and my rights under any
director's and officers' liability insurance policy covering me.
I acknowledge that I have signed this Waiver and Release of
Claims voluntarily, knowingly, of my own free will and without
reservation or duress and that no promises or representations
have been made to me by any person to induce me to do so other
than the promise of payment set forth in the first paragraph
above and the Company's acknowledgement of my rights reserved
under the second paragraph above.
Signature: /s/ Jim W. Nokes
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Dated: August 29, 2002
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