Exhibit 10.23
AMENDED BY BOARD OF DIRECTORS
AUGUST 26, 2002
KEY EMPLOYEE SUPPLEMENTAL RETIREMENT PLAN OF
PHILLIPS PETROLEUM COMPANY
PURPOSE
The purpose of the Key Employee Supplemental Retirement Plan of Phillips
Petroleum Company (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 as an unfunded excess benefit plan for highly
compensated employees within the meaning of ERISA Sections 3(36) and 4(b)(5)
subject to Section V.
SECTION I. Definitions.
As used in this Plan:
(a) "Board" shall mean the board of directors of the Company.
(b) "Chief Executive Officer (CEO)" shall mean the Chief Executive Officer of
the Company.
(c) "Code" shall mean the Internal Revenue Code of 1986, as amended from time
to time.
(d) "Committee" shall mean the Compensation Committee of the Board of
Directors of ConocoPhillips.
(e) "Company" shall mean Phillips Petroleum Company.
(f) "Employee" shall mean a person who is an active participant in the
Retirement Plan.
(g) "ERISA" shall mean the Employee Retirement Income Security Act of 1974, as
amended
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from time to time, or any successor statute.
(h) "Exchange Act" shall mean the Securities Exchange Act of 1934, as amended
and in effect from time to time, or any successor statute.
(i) "Incentive Compensation Plan" shall mean the Incentive Compensation Plan
of the Company, or the Annual Incentive Compensation Plan of Phillips
Petroleum Company, or similar plan of a Participating Subsidiary, or any
similar or successor plans, or all, as the context may require.
(j) "KEDCP" shall mean the Key Employee Deferred Compensation Plan of Phillips
Petroleum Company.
(k) "Nonqualified Plans" shall mean the Key Employee Supplemental Retirement
Plan, Supplemental Executive Retirement Plan, the Key Employee Missed
Credited Service Retirement Plan and any similar plan or plans of the
Company or a Participating Subsidiary.
(l) "Participating Subsidiary" shall mean a subsidiary of the Company, of
which the Company beneficially owns, directly or indirectly, more than 50%
of the aggregate voting power of all outstanding classes and series of
stock, where such subsidiary has adopted one or more plans making
participants eligible for participation in this Plan.
(m) "Plan" shall mean the Key Employee Supplemental Retirement Plan of
Phillips Petroleum Company, the terms of which are stated in and by this
document.
(n) "Plan Administrator" shall mean Executive Vice President, Planning,
Corporate Relations and Services, or his successor.
(o) "Restricted Stock" shall mean shares of Stock which have certain
restrictions attached to the ownership thereof.
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(p) "Retirement Plan" shall mean the Retirement Income Plan of Phillips
Petroleum Company, which plan is qualified under Code Section 401(a).
(q) "Salary" shall mean the monthly equivalent rate of pay for an Employee
before adjustments for any before-tax voluntary reductions.
(r) "Stock" means shares of common stock of ConocoPhillips, par value $.01.
(s) "Total Final Average Earnings" shall mean the average of the high 3
earnings, excluding Incentive 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 Awards for any of
such last 10 years under the Incentive Compensation Plan, whether paid or
deferred, and shall include the value of any special awards specified by
the Compensation Committee to be included for final average earnings
purposes under the terms of the special awards when granted by the
Compensation Committee and shall also recognize benefits paid under
Section 4.2 of the Phillips Petroleum Company Executive Severance Plan in
the same manner as layoff pay is recognized by the Retirement Plan.
(t) "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 II. Plan Benefits.
Supplemental payments will be made in such amounts which, together with the
payments which the Employee or the Employee's surviving spouse, in the case of
the death of an Employee prior to retirement or the death of a former Employee
prior to commencing retirement benefits is
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eligible to receive under the Retirement Plan, will equal the retirement benefit
that would have been payable under the Retirement Plan except for any or all of
the following reasons:
(a) An Employee's deferral of all or any portion of one or more awards under
the Incentive Compensation Plan, pursuant to the provisions of KEDCP,
which results in a reduction in the total retirement benefits which would
have been payable under the Retirement Plan,
(b) The issuance of Restricted Stock in settlement of awards under the
Incentive Compensation Plan (which for purposes of this Section the
initial value thereof shall be considered a "deferral"), which results in
a reduction in the total retirement benefits which would have been payable
under the Retirement Plan,
(c) An Employee's voluntary reduction of salary pursuant to the provisions of
KEDCP which results in a reduction in the total retirement benefits which
would have been payable under the Retirement Plan,
(d) The payments which would have been received under the Retirement Plan
except for limitations relating to Code Section 401(a)(17), or
(e) The payments which would have been received under the Retirement Plan
except for limitations relating to Code Section 415, including without
limitation the interest rate limitations of Code Section 415(b)(2)(E).
(f) The payments which would have been received under the Retirement Plan if
benefits under Section 4.2 of the Phillips Petroleum Company Executive
Severance Plan were recognized under the Retirement Plan as layoff pay for
purposes of final average earnings and credited service.
In addition to the supplemental payments in Section II (a), (b), (c), (d), (e)
and (f) hereof, an
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additional supplemental retirement payment will be made to an Employee who
terminates employment on or after February 8, 1993, calculated under the terms
of the Retirement Plan using as final average earnings the difference, if any,
between the Total Final Average Earnings and the Final Average Earnings used in
the Retirement Plan.
SECTION III. Special Survivor Benefit.
Each senior vice president or higher level executive of the Company may, as soon
as practicable, following the announcement of the merger of Conoco and Phillips,
elect to receive a lump sum benefit under the Company's Nonqualified Plans when
they retire after the transaction. If such officer should die before actually
commencing retirement benefits, then his or her surviving spouse will receive a
lump sum benefit calculated on the same basis as if the executive had commenced
his or her retirement benefit from the Retirement Income Plan and applicable
Nonqualified Plans as a lump sum, less the value of the pre-retirement 50% joint
and survivor annuity death benefit payable under the Retirement Income Plan, the
first of the month following the death of the executive. The surviving spouse
who receives such lump sum will not be eligible to receive the pre-retirement
50% joint and survivor annuity death benefit from the Nonqualified Plans.
SECTION IV. Special Provision for former ARCO Alaska Employees.
Notwithstanding any provisions to the contrary, in order to comply with the
terms of the Board approved Master Purchase and Sale Agreement ("Sale
Agreement") by which the Company
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acquired certain Alaskan assets of Atlantic Richfield Company, Inc. ("ARCO"),
the following supplemental payments will be made:
(a) The payments which would have been received under Article XXIV - ARCO
Flight Crew of the Retirement Plan for those who were classified as an
Aviation Manager, Chief Pilot, Assistant Chief Pilot, Captain or Reserve
Captain as of July 31, 2000 if they had been eligible for those benefits
under the Retirement Plan, except that if they receive a limited social
security makeup benefit from the Retirement Plan it will be offset from
the benefit payable from the plan.
(b) A final ARCO Supplemental Executive Retirement Plan (SERP) benefit will be
calculated at the earlier of the time an Employee who had an ARCO SERP
benefit terminates employment or, 2 years following the ARCO/BP Amoco
p.l.c. merger, April 17, 2002 ("calculation date"). The SERP benefit
attributable to service through July 31, 2000 shall be paid by BP Amoco
p.l.c. and the difference shall be paid by this plan. The SERP calculation
will be done as if the Employee had continued to participate in the
Atlantic Richfield Retirement Plan and SERP up to the calculation date.
The ARCO Annual Incentive Plan (AIP) amount used will be:
(i) if the Employee terminates employment involuntarily prior to April
17, 2002, the highest of the actual AIP in the last 3 years
including the AIP target payment amount for years after 1999 or the
payment received under Phillips Annual Incentive Compensation Plan
(ii) if the Employee terminates employment voluntarily prior to April 17,
2002, or if the calculation is made as of April 17, 2002, then the
AIP will include the highest 3
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year average using the highest of the actual AIP, the AIP target
payment amount for years after 1999, or the payment received under
Phillips Annual Incentive Compensation Plan.
Any benefit paid by this plan under this Section IV (b)(ii) and the SERP
benefit paid by BP Amoco p.l.c. shall offset the benefit payable from this
plan at the time the Employee commences benefits under the Retirement
Plan.
SECTION V. Payment of Benefits.
Subject to the requirement that the manner of payment of supplemental retirement
benefits which an Employee is eligible to receive under this Plan, the Principal
Corporate Officers Supplemental Retirement Plan of Phillips Petroleum Company,
the Phillips Petroleum Company Supplemental Executive Retirement Plan, the
Phillips Petroleum Company Key Employee Death Protection Plan, the Key Employee
Missed Credited Service Retirement Plan and any similar plan or plans of the
Company or a Participating Subsidiary, shall be the same and, subject further to
the condition that an Employee who receives payments under this Plan in the
manner described in Section IV (b) hereof, shall agree to be available to
provide from time to time advice and consultation to the Company after
reasonable notice and for reasonable compensation therefore:
(a) An Employee may elect in the manner prescribed by the Plan
Administrator to have the payments provided for hereunder made on a
straight life annuity basis, or to have such life annuity payments
converted in the manner provided by the Retirement Plan
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to any one of the other forms of payments which the Employee would
be entitled to select (except the lump-sum settlement option) if
such payments were to be paid to the Employee under the Retirement
Plan.
(b) Notwithstanding (a) above, an Employee who is commencing retirement
benefits and is eligible for a lump sum distribution from the
Retirement Income Plan may, not earlier than 90 days nor later than
30 days prior to commencing retirement benefits, express a
preference, in the manner prescribed by the Plan Administrator, to
have the payment of the amounts provided for hereunder converted in
the manner provided by the Retirement Plan from a life annuity basis
to one lump-sum payment of which all or part of the lump sum payment
is either paid to the Employee or considered an award pursuant to
the provisions of KEDCP. The Chief Executive Officer, with respect
to Employees who are not subject to Section 16 of the Exchange Act,
and the Committee, with respect to Employees who are subject to
Section 16 of the Exchange Act, shall consider such indication of
preference and shall respectively decide in the Chief Executive
Officer's or the Committee's sole discretion whether to accept or
reject the preference expressed. In the event the Chief Executive
Officer or the Committee, as applicable, accepts such Employee's
preference, part or all of the Plan benefits shall be paid in a lump
sum as soon as practicable after the later of such acceptance or the
Employee's retirement benefit commencement date or credited as of
the Employee's retirement benefit commencement date to the
Employee's KEDCP account as applicable.
SECTION VI. Method of Providing Benefits.
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All amounts payable under this Plan shall be paid solely from the general assets
of the Company and any rights accruing to an eligible Employee or Retiree 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 an unfunded excess benefit plan for
purposes of Title I of ERISA.
SECTION VII. Nonassignability.
The right of an Employee, or beneficiary, or other person who becomes entitled
to receive payments under this Plan, shall not be assignable or subject to
garnishment, attachment or any other legal process by the creditors of, or other
claimants against, the Employee, beneficiary, or other such person.
SECTION VIII. Administration.
(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) 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
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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;
(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
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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 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.
SECTION IX. Employment not Affected by Plan.
Participation or nonparticipation in this Plan shall neither adversely affect
any person's employment status, or confer any special rights on any person other
than those expressly stated in the Plan. Participation in the Plan by an
Employee of the Company or of a Participating Subsidiary shall not affect the
Company's or the Participating Subsidiary's right to terminate the Employee's
employment or to change the Employee's compensation or position.
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SECTION X. Miscellaneous Provisions.
(a) The Board reserves the right to amend or terminate this Plan at any time,
if, in the sole judgment of the Board, such amendment or termination is
deemed desirable; provided that no member of the Board who is also an
Employee or Retiree shall participate in any action which has the actual
or potential effect of increasing his or her benefits hereunder, and
further provided, the Company shall remain liable for any benefits accrued
under this Plan prior to the date of amendment or termination.
(b) 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.
(c) No amount accrued or payable hereunder shall be deemed to be a portion of
an 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 Plan.
(d) 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.
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