Exhibit 10.18
Board of Directors Amended
February 9, 1998
NON-EMPLOYEE DIRECTOR RETIREMENT PLAN
OF PHILLIPS PETROLEUM COMPANY
ARTICLE I - PURPOSE
The Non-Employee Director Retirement Plan is intended to provide Non-Employee
Directors with income commencing upon their retirement from service on the
Phillips Petroleum Company Board of Directors.
ARTICLE II - DEFINITIONS
The following terms, when used in this Plan, have the following meaning unless
the context clearly indicates otherwise:
1. "Annual Board Service Retainer" shall mean the sum of the cash
compensation paid for Board service exclusive of compensation for
committee membership and of fees for attendance at Board or
Committee meetings, if any, plus the value of the Company common
stock granted, if any, to a Non-Employee Director during the twelve
calendar months immediately preceding the date on which the Non-
Employee Director retires, such value to be determined as the
product of the number of shares of such common stock granted
multiplied by the higher of the Fair Market Value for the last year
or the average of the
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high three Fair Market Values calculated in accordance with Article
II, Section 6, for the last ten years preceding the Non-Employee
Director's retirement.
2. "Board" shall mean the Board of Directors of the Company.
3. "Chief Executive Officer" shall mean the Chief Executive Officer of
the Company.
4. "Company" shall mean Phillips Petroleum Company.
5. "Disability" shall mean that condition in which, by reason of bodily
injury or disease, a Non-Employee Director is prevented from serving
in such capacity. All determinations of Disability shall be made by
a physician selected by the Company.
6. "Fair Market Value" shall be calculated as the average of the high
three monthly fair market values of the Company common stock during
the twelve calendar months preceding the month in which the
Non-Employee Director retires. The monthly fair market value of the
Company common stock is the average of the daily fair market value
of the stock for each trading day of the month. The daily fair
market value of the stock shall be deemed equal to the average of
the high and low selling prices
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of the stock on the New York Stock Exchange, as reported in the Wall
Street Journal.
7. "Non-Employee Director" shall mean a member of the Board of
Directors who is not a present employee nor former employee of the
Company or any of its subsidiaries.
8. "Normal Retirement Date" shall mean the date of the Annual
Stockholders Meeting of the Company in the year in which the
director is no longer eligible for election as a director as defined
in the Bylaws of the Company, currently the year in which the
director attains age 71.
9. "Plan" shall mean the Non-Employee Director Retirement Plan of
Phillips Petroleum Company, the terms and provisions of which are
herein set forth, together with such amendments thereto as may
hereafter from time to time be adopted.
10. "Retires" or "Retirement" shall mean the termination of Board
service due to a) the Non-Employee Director's not being nominated
for election to the Board; or b) the Non-Employee Director's not
being reelected to Board service after being so nominated; or c) the
Non-Employee Director's resignation from Board service as a result
of the Director's Disability or any reason, acceptable to a majority
of the remaining members of the Board of
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Directors.
11. "Years of Service" shall mean the number of full and partial
consecutive calendar years during which the Non-Employee Director
was a member of the Board; provided, however that only a
Non-Employee Director whose Normal Retirement Date occurs in 1998,
shall accrue Years of Service after December 31, 1997, and further
that no Non-Employee Director shall accrue Years of Service after
the date of the 1998 Annual Stockholders Meeting of the Company.
ARTICLE III - ELIGIBILITY
Only Non-Employee Directors are eligible to participate in the Plan.
ARTICLE IV - PAYMENT OF RETIREMENT BENEFITS
Upon Retirement from Board service each Non-Employee Director shall receive
payments under this Plan. Notwithstanding anything to the contrary in this Plan,
no payments shall be made under this Plan for any Non-Employee Director who has
given written consent to the Company to receive an Award of Restricted Stock, as
of March 2, 1998, under the Phillips Petroleum Company Stock Plan for
Non-Employee Directors representing and in lieu of his or her accrued benefits
under this Plan.
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a) These payments shall be made on a monthly basis beginning on or
about the first of the month after Retirement. The amount of these
monthly payments shall be equal to the Annual Board Service Retainer
divided by 12; provided, however, that the amount of payments to any
retired Non-Employee Director who has commenced receiving payments
from this Plan prior to April 10, 1995, shall not be increased or
paid in a different manner, but shall be paid in the same amount and
manner as in effect at the time payments commenced. These payments
shall continue for a number of months equal to Years of Service
times 12.
b) Notwithstanding (a) above, a Retiring Non-Employee Director may, not
earlier than 150 days nor later than 30 days prior to the date
retirement benefit payments would begin, express a preference, in
the manner prescribed by the Chief Executive Officer, to have the
monthly payment provided hereunder converted to one lump sum payment
which is calculated as the present value of the monthly payment
amount using the December 1 of the year prior to Retirement rate of
the 30-year Treasury Bond as quoted in the Federal Reserve
Statistical Release Bulletin No. H.15, or the comparable successor
publication, and the number of Years of Service.
All or part of such lump sum payment may be either paid
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to the Non-Employee Director or considered for deferral under the
Deferred Compensation Plan for Non-Employee Directors of Phillips
Petroleum Company. The Chief Executive Officer shall consider such
indication of preference for a lump sum and shall respectively
decide in the Chief Executive Officer's sole discretion whether to
accept or reject the preference expressed. In the event the Chief
Executive Officer accepts such Non-Employee Director's preference
for a lump sum, part or all of the retirement benefit shall be paid
in a lump sum as soon as practicable after the later of such
acceptance or on or about the first of the month after Retirement.
ARTICLE V - DEATH OF NON-EMPLOYEE DIRECTOR
In the event a Non-Employee Director dies prior to Retirement, no benefits shall
be payable from this Plan. After commencement of Retirement payments, if paid as
a monthly payment determined in accordance with Article IV (a), such monthly
payments will continue until the total number of payments has been made, or the
death of the retired Non-Employee Director, whichever occurs first. If death
occurs first, then the remaining payments shall be made to the surviving spouse,
if any. If there is no surviving spouse, or if the surviving spouse should die,
then there will be no further payment obligation under this Plan.
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ARTICLE VI - ADMINISTRATION
The Chief Executive Officer is authorized, subject to the provisions of the
Plan, to establish rules and regulations, to make determinations under and such
interpretations of, and to take steps in connection with the Plan as the Chief
Executive Officer deems necessary or advisable, and to appoint agents as the
Chief Executive Officer deems appropriate for the proper administration of the
Plan. Each determination, interpretation, or other action made or taken pursuant
to the provisions of the Plan by the Chief Executive Officer shall be reported
to the Board of Directors and once so reported shall be final and shall be
binding and conclusive for all purposes and upon all persons.
ARTICLE VII - TERMINATION OR AMENDMENT OF THE PLAN
The Board may at any time terminate the Plan and may from time to time alter or
amend the Plan, or any part thereof, (including any amendment deemed necessary
to ensure that the Company may comply with any regulatory requirement);
provided, however, that no director may act to terminate or amend the Plan if
such action would either increase benefits payable under the Plan to that
director or remove or reduce the risk that such director's benefits under the
Plan might be forfeited. Such termination or amendment will not negatively
impact any rights or benefits accrued to date of such termination or amendment
under this Plan. After the 1998 Annual Stockholders Meeting of the Company and
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upon the final payment of all amounts owed to Retired Non-Employee Directors and
their surviving spouses, this Plan shall automatically terminate without further
action of this Board.
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ARTICLE VIII - NON-ASSIGNABILITY
Retirement payments may not be pledged, anticipated, assigned (either at law or
in equity), alienated or subject to attachment, garnishment, levy, execution or
other legal or equitable process.
ARTICLE IX - MISCELLANEOUS
(a) All amounts payable under this Plan are unfunded and unsecured benefits
and shall be paid solely from the general assets of the Company and any
rights accruing to the Non-Employee Director or the surviving spouse under
the Plan shall be those of a unsecured general creditor; provided,
however, that the Company may establish a grantor trust to pay part or all
of its Plan payment obligations so long as the Plan remains unfunded for
federal tax purposes.
(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) This Plan shall be construed, regulated, and administered in accordance
with the laws of the State of Delaware except to the extent that said laws
have been preempted by the laws of
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the United States.
ARTICLE X - EFFECTIVE DATE OF THE PLAN
The Plan is amended and restated effective as of January 1, 1998.
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