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EXHIBIT 10.1
CONOCO INC.
DEFERRED COMPENSATION PLAN
FOR NON-EMPLOYEE DIRECTORS
(AS AMENDED EFFECTIVE AS OF MAY 12, 1999)
ARTICLE I
PURPOSES OF PLAN AND DEFINITIONS
1.1 Purpose. Pursuant to the 1998 Stock and Performance
Incentive Plan, Conoco Inc., a Delaware corporation, established the Conoco Inc.
Deferred Compensation Plan for Non-Employee Directors (the "Plan") for the
purpose of providing non-employee directors of the Company the opportunity to
defer a portion of their compensation and to provide greater incentives for
those Directors to attain and maintain the highest standards of performance, to
attract and retain Directors of outstanding competence and ability, to stimulate
the active interest of such persons in the development and financial success of
the Company, to further the identity of interests of such Directors with those
of the Company's stockholders generally, and to reward such Directors for
outstanding performance. The Plan has been amended effective May 12, 1999.
1.2 Definitions.
"Applicable Annual Rate" will initially be 7.14% and will be
adjusted as of January 1 of each year to that rate which is equal to
120% of the applicable federal long-term rate for the month of January
of such year as published by the Internal Revenue Service pursuant to
Section 1274(d) of the Code.
"Award" means any incentive award made to a Participant under
the Plan or any other Plan of the Company.
"Beneficiary" means the person(s) or entity(ies) designated by
the Participant, as provided in Section 4.5, to receive any payments
otherwise due the Participant under this Plan in the event of the
Participant's death.
"Board of Directors" or "Board" means the Board of Directors
of the Company.
"Cash Compensation" means all of the cash compensation payable
to a Participant, including annual, meeting and other fees.
"Change in Control" means a Change in Control as defined in
the Conoco Inc. Key Employee Severance Plan, as amended from time to
time.
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"Class A Common Stock" means the Class A Common Stock, par
value $.01 per share, of the Company.
"Class B Common Stock" means the Class B Common Stock, par
value $.01 per share, of the Company.
"Code" means the Internal Revenue Code of 1986, as amended
from time to time.
"Committee" means such committee of the Board as is designated
by the Board to administer the Plan in accordance with Article II, but
(i) prior to the IPO shall be the Board or such other persons as are
authorized by the Board and (ii) after the IPO shall initially be the
Compensation Committee of the Board.
"Common Stock" means the Class A Common Stock or Class B
Common Stock, except where the context requires that the reference is
to one of such classes.
"Company" means Conoco Inc.
"Deferred Compensation Period" means such period of 365 days
(or such longer or shorter period) as shall from time to time be
prescribed by the Committee for which Participants shall be entitled to
defer receipt of all or any part of their Cash Compensation.
"Deferred Interest Bearing Account" means the bookkeeping
account maintained for each Participant to record certain amounts
deferred by the Participant in accordance with Article III hereof.
"Determination Date" means the date on which payment of a
Participant's deferred compensation is made or commences, as determined
in accordance with Section 4.1.
"Director" means an individual who is serving as a member of
the Board.
"Effective Date" means the IPO Closing Date.
"Election Effective Date" means the date upon which a
Participant's deferred compensation is credited to his Deferred
Interest Bearing Account pursuant to Section 3.3 of this Plan.
"Eligible Director" means each Director who is not an employee
of E.I. duPont de Nemours and Company or of any of its subsidiaries, or
of the Company or of any of the Company's subsidiaries.
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"Exchange Act" means the Securities Exchange Act of 1934, as
amended from time to time.
"Fair Market Value" of a share of Class A Common Stock or
Class B Common Stock means, as of a particular date, (i) if shares of
that class of Common Stock are listed on a national securities
exchange, the mean between the highest and lowest sales price per share
of such Common Stock on the consolidated transaction reporting system
for the principal national securities exchange on which shares of such
Common Stock are listed on that date, or, if there shall have been no
such sale so reported on that date, on the next succeeding date on
which such a sale was so reported, (ii) if shares of that class of
Common Stock are not so listed but are quoted on the Nasdaq National
Market, the mean between the highest and lowest sales price per share
of such class of Common Stock reported by the Nasdaq National Market on
that date, or, if there shall have been no such sale so reported on
that date, on the next succeeding date on which such a sale was so
reported, (iii) if that class of Common Stock is not so listed or
quoted, the mean between the closing bid and asked price on that date,
or, if there are no quotations available for such date, on the next
succeeding date on which such quotations shall be available, as
reported by the Nasdaq Stock Market, or, if not reported by the Nasdaq
Stock Market, by the National Quotation Bureau Incorporated or (iv) if
shares of that class of Common Stock are not publicly traded, the most
recent value determined by an independent appraiser appointed by the
Company for such purpose; provided that, notwithstanding the foregoing,
"Fair Market Value" in the case of any Award made in connection with
the IPO, means the price per share to the public of the Common Stock in
the IPO, as set forth in the final prospectus relating to the IPO.
"Fair Market Value" of a Stock Unit means, as of a particular date, the
Fair Market Value of a share of the applicable class of Common Stock on
such date.
"IPO" means the first time a registration statement filed
under the Securities Act of 1933 and respecting an underwritten primary
offering by the Company of shares of common stock of the Company is
declared effective under that Act and the shares registered by that
registration statement are issued and sold by the Company (otherwise
than pursuant to the exercise of any overallotment option).
"IPO Closing Date" means the date on which the Company first
receives payment for the shares of common stock of the Company it sells
in the IPO.
"Participant" means an Eligible Director who elects to
participate in the Plan or is otherwise credited with Stock Units
pursuant to Article III.
"Stock Account" means the bookkeeping account maintained for
each Participant to record certain amounts deferred by the Participant
in accordance with Article III hereof.
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"Stock Unit" means a unit equal to one share of Class A Common
Stock or Class B Common Stock (as determined in accordance with Section
3.2) (as adjusted pursuant to Section 3.6), utilized for the purpose of
measuring the benefits payable under Section 4.3.
"Total Deferred Unit Amount" means the aggregate Fair Market
Value on the Valuation Date coinciding with or immediately preceding
the Determination Date of the number of Stock Units then credited to a
Participant's Stock Account.
"Valuation Date" means the Effective Date and the first day of
each month thereafter or, in the event the applicable class of Common
Stock is traded or quoted on a national securities exchange or in the
over-the-counter market, each day on which a sale or sales of such
Common Stock is reported or a quotation for such Common Stock is
available (as the case may be).
"1998 Incentive Plan" means the 1998 Stock and Performance
Incentive Plan of Conoco Inc.
ARTICLE II
ADMINISTRATION OF THE PLAN
2.1 Committee. This Plan shall be administered by the
Committee. The Committee shall consist of at least two members of the Board.
2.2 Committee's Powers. Subject to the provisions hereof, the
Committee shall have full and exclusive power and authority to administer this
Plan and to take all actions which are specifically contemplated hereby or are
necessary or appropriate in connection with the administration hereof. The
Committee shall also have full and exclusive power to interpret this Plan and to
adopt such rules, regulations and guidelines for carrying out this Plan as it
may deem necessary or proper, all of which powers shall be exercised in the best
interests of the Company and in keeping with the objectives of this Plan. The
Committee may, in its discretion, determine the eligibility of individuals to
participate herein, determine the amount of Cash Compensation a Participant may
elect to defer, or waive any restriction or other provision of this Plan. The
Committee shall determine whether, and under what conditions, Stock Units are to
relate to either or both of Class A Common Stock or Class B Common Stock. The
Committee may correct any defect or supply any omission or reconcile any
inconsistency in this Plan in the manner and to the extent the Committee deems
necessary or desirable to carry it into effect.
2.3 Committee Determinations Conclusive. Any decision of the
Committee in the interpretation and administration of this Plan shall lie within
its sole and absolute discretion and shall be final, conclusive and binding on
all parties concerned.
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2.4 Committee Liability. No member of the Committee or officer
of the Company to whom the Committee has delegated authority in accordance with
the provisions of Section 2.5 of this Plan shall be liable for anything done or
omitted to be done by him or her, by any member of the Committee or by an
officer of the Company in connection with the performance of any duties under
this Plan, except for his or her own willful misconduct or as expressly provided
by statute.
2.5 Delegation of Authority. The Committee may delegate to the
Chief Executive Officer and to other senior officers of the Company its duties
under this Plan pursuant to such conditions or limitations as the Committee may
establish.
ARTICLE III
ACCOUNTS
3.1 Establishment of Accounts. The Company shall set up an
appropriate record (hereinafter called the "Deferred Interest Bearing Account")
which will from time to time reflect the name of each Participant and the
amounts deferred by such Participant to an interest bearing account pursuant to
Section 3.2. The Company shall also set up an appropriate record (hereinafter
called the "Stock Account") which will from time to time reflect the name of
each Participant, the number of Stock Units (distinguished by whether the Stock
Unit relates to Class A Common Stock or Class B Common Stock) credited to such
Participant pursuant to Section 3.2, and the Fair Market Value of that number of
Stock Units credited to the Participant.
3.2 Deferred Compensation.
(a) A Participant may elect to defer receipt of all or any
part of the Cash Compensation payable to the Participant for serving on
the Board of Directors for any Deferred Compensation Period. At the
election of the Participant, the amount deferred shall be credited to:
(a) his or her Deferred Interest Bearing Account; (b) his or her Stock
Account; or (c) a combination of both. If a Participant chooses to
receive a credit to his Stock Account, a number of Stock Units (rounded
up to the nearest whole number) relating to either Class A Common Stock
or Class B Common Stock, as elected by the Participant with the consent
of the Committee, having a Fair Market Value on the Election Effective
Date equal to the dollar amount of fees the Participant elects to
forego in the applicable Deferred Compensation Period in exchange for
Stock Units shall be credited to such account. A Participant may only
elect to defer Cash Compensation which is otherwise payable after an
election to defer compensation is made pursuant to Section 5.1 hereof.
(b) As additional deferred compensation and pursuant to the
requirements of paragraph 9 of the 1998 Incentive Plan, each Eligible
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Director shall be credited with certain Stock Units on the later to
occur of the IPO Pricing Date or the initial election of an individual
as an Eligible Director and on each subsequent Annual Director Award
Date, as provided for in paragraph 9 of the 1998 Incentive Plan.
3.3 Crediting of Deferred Amounts.
(a) Any Cash Compensation credited to a Participant's Deferred
Interest Bearing Account or Stock Account shall be credited to such
account on the last day of the month in which the deferred Cash
Compensation would otherwise have been paid (the "Election Effective
Date"). For example, if a Participant effectively elects to defer Cash
Compensation to his Deferred Interest Bearing Account for a Deferred
Compensation Period of 365 days beginning January 1 by notifying the
Company in the manner provided in Section 5.1, the Cash Compensation
which accrues for the month of January shall be credited to such
Participant's Deferred Interest Bearing Account on January 31.
(b) Any Stock Units credited under the 1998 Incentive Plan to
a Participant as described in Section 3.2(b) hereof shall be credited
to the Participant's Stock Account as of the date specified in Section
3.2(b) hereof.
3.4 Interest on Deferred Interest Bearing Accounts. The amount
of deferred compensation credited to a Participant's Deferred Interest Bearing
Account will bear interest from (but excluding) the date so credited, to (and
including) the Determination Date, at a rate per annum equal to the Applicable
Annual Rate in effect from time to time, compounded monthly, and such interest
shall be credited to the Deferred Interest Bearing Account as of the last day of
each calendar month during the applicable Deferred Compensation Period and the
last day of the calendar month in which such period ends (or, if applicable, the
Determination Date). Interest so credited shall similarly bear interest from
(but excluding) the date so credited, to (and including) the Determination Date,
at a rate per annum equal to the Applicable Annual Rate in effect from time to
time, compounded monthly and credited as of the last day of each calendar month
during the applicable Deferred Compensation Period and the last day of the
calendar month in which such period ends (or, if applicable, the Determination
Date).
3.5 Dividends. As of each date that dividends are paid with
respect to a class of Common Stock, a Participant who has any outstanding Stock
Units relating to that class of Common Stock credited to his Stock Account shall
have a number of Stock Units relating to that class of Common Stock credited to
his Stock Account with respect to such dividends. The Stock Units credited in
respect of dividends shall have a Fair Market Value equal to the dollar amount
of the dividend paid per share of Common Stock as of such dividend payment date
multiplied by the number of Stock Units relating to that class of
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Common Stock credited to the Participant's Stock Account immediately prior to
such dividend payment date.
3.6 Adjustments.
(a) Exercise of Corporate Powers. The existence of this Plan
and any outstanding Stock Units credited hereunder shall not affect in
any manner the right or power of the Company or its stockholders to
make or authorize any or all adjustments, recapitalizations,
reorganizations or other changes in the capital stock of the Company or
its business or any merger or consolidation of the Company, or any
issue of bonds, debentures, preferred or prior preference stock
(whether or not such issue is prior to, on a parity with or junior to
the existing Common Stock) or the dissolution or liquidation of the
Company, or any sale or transfer of all or any part of its assets or
business, or any other corporate act or proceeding of any kind, whether
or not of a character similar to that of the acts or proceedings
enumerated above.
(b) Recapitalizations, Reorganizations and Other Activities.
In the event of any subdivision or consolidation of outstanding shares
of either class of Common Stock, declaration of a dividend payable in
shares of either class of Common Stock or other stock split, then (i)
the number of Stock Units relating to such class of Common Stock and
(ii) the appropriate Fair Market Value and other price determinations
for such Stock Units shall each be proportionately adjusted by the
Board to reflect such transaction. In the event of any other
recapitalization or capital reorganization of the Company, any
consolidation or merger of the Company with another corporation or
entity, the adoption by the Company of any plan of exchange affecting
any class of Common Stock or any distribution to holders of any class
of Common Stock of securities or property (other than normal cash
dividends or dividends payable in Common Stock), the Board shall make
appropriate adjustments to (i) the number of Stock Units relating to
such class of Common Stock and (ii) the appropriate Fair Market Value
and other price determinations for such Stock Units to give effect to
such transaction; provided that such adjustments shall only be such as
are necessary to preserve, without increasing, the value of such units.
In the event of a corporate merger, consolidation, acquisition of
property or stock, separation, reorganization or liquidation, the Board
shall be authorized to issue or assume units by means of substitution
of new units, as appropriate, for previously issued units or an
assumption of previously issued units as part of such adjustment.
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ARTICLE IV
PAYMENTS
4.1 Period of Deferral. A Participant may elect that payment
of amounts credited to the Participant under the Plan be made or commence at (a)
a date that is five years following the date of the termination of the
Participant's status as a Director of the Company, or (b) the date of the
termination of the Participant's status as a Director of the Company (either of
such dates elected by the Participant to be known as the "Determination Date").
If alternative (a) is elected by the Participant, payment will be made or will
commence within 60 days after the date that is five years after termination of
the Participant's status as a Director of the Company. If alternative (b) is
elected by the Participant, payment will be made or will commence within 60 days
after termination of the Participant's status as a Director of the Company.
Notwithstanding the foregoing, except in the case of death or disability of a
Director, no amount may be distributed in respect of a Stock Unit awarded under
the 1998 Incentive Plan until such Stock Unit has been held under this Plan for
three years.
4.2 Payment of Amounts in Deferred Interest Bearing Account.
As of the Determination Date, the sum of the amounts theretofore credited to a
Participant's Deferred Interest Bearing Account for each Deferred Compensation
Period plus all interest accrued thereon to, and including, the Determination
Date (the "Total Deferred Compensation Amount") shall be calculated. A
Participant shall receive payment of his Total Deferred Compensation Amount with
respect to each Deferred Compensation Period in the form he has previously
elected under Section 4.4.
4.3 Payment of Amounts in Stock Account. As of the
Determination Date, the aggregate Fair Market Value on the Valuation Date
coinciding with or immediately preceding the Determination Date of that number
of Stock Units credited to a Participant's Stock Account as of such
Determination Date with respect to each Deferred Compensation Period and with
respect to each Award under the 1998 Incentive Plan shall be calculated. The
result is the "Total Deferred Unit Amount." A Participant shall receive payment
of his Total Deferred Unit Amount with respect to each Deferred Compensation
Period or 1998 Incentive Plan Award in the form he has previously elected under
Section 4.4.
4.4 Form of Payment. Payment to a Participant of amounts in
his Deferred Interest Bearing Account shall be made in the form of cash. Payment
to a Participant in respect of a Stock Unit in his Stock Account shall be made
in the form of that class of Common Stock to which the unit relates; provided
that under conditions established by the Committee, a Participant may elect to
receive an amount payable in respect of a Stock Unit in the form of cash.
Payment to a Participant of amounts in both accounts shall be made by one of the
following methods: (a) a lump sum, (b) three substantially equal consecutive
annual installments, or (c) five substantially equal consecutive annual
installments; subject to the requirements of Section 4.1 hereof that no amount
is distributable in respect of a Stock Unit Award under the 1998 Incentive Plan
until it has
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been held for three years, except in the case of death or disability of a
Director. The Total Deferred Compensation Amount and the Total Deferred Unit
Amount that is to be distributed in cash shall bear interest from, but
excluding, the Determination Date to, and including, the date paid at the
Applicable Annual Rate as in effect from time to time, compounded monthly, and
the payment of each annual installment shall be accompanied by payment of the
amount of interest accrued thereon.
4.5 Death Prior to Payment. In the event that a Participant
dies prior to payment of all of the amounts payable pursuant to the Plan, any
remaining amounts together with all interest accrued thereon, shall be paid to
the Participant's designated Beneficiary in a lump sum within 60 days following
the Company's notification of the Participant's death. If no Beneficiary has
been designated, such payment shall be made to the Participant's estate. A
beneficiary designation, or revocation of a prior beneficiary designation, shall
be effective only if it is made in writing on a form provided by the Company,
signed by the Participant and received by the Committee. In the event that a
Participant dies prior to payment of all of the amounts payable pursuant to the
Plan, and the designated Beneficiary dies prior to payment of all the amounts
payable pursuant to the Plan, payment shall be made to the Participant's estate
in a lump sum within 60 days of notification of the Beneficiary's death.
4.6 Payments to Minors and Incompetents. Should the
Participant become incompetent or should the Participant designate a Beneficiary
who is a minor or incompetent, the Company shall be authorized to pay such funds
to a parent or guardian of such minor or incompetent, or directly to such minor
or incompetent, whichever manner the Committee shall determine in its sole
discretion.
4.7 Change in Control. Participants may elect that upon a
Change in Control, the entire amounts payable under Sections 4.2 and 4.3 be made
in a lump sum payment within 60 days of the Change in Control.
ARTICLE V
ELECTING DEFERRALS
5.1 Manner of Electing Deferral. Each election made by a
Participant to defer Cash Compensation under the Plan (i) shall take the form of
a written document (provided by the Company) signed by the Participant and filed
with the Committee, (ii) shall designate the Deferred Compensation Period for
which such deferral is elected, the account to which such deferral shall be
credited, the class of Common Stock to which any Stock Unit is to relate, the
period of deferral and the form and manner of payment, (iii) shall only apply to
Cash Compensation payable after the date of such election and (iv) may not be
revoked or modified without the prior written approval of the Committee if the
proposed revocation or modification applies to amounts deferred with respect to
a Deferred Compensation Period which has already commenced at the time such
revocation or modification is proposed to be effected. With respect to each
award of Stock Units made
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to a Participant under the 1998 Incentive Plan, as described in Section 3.2(b)
hereof, the Participant shall make an election which (i) shall take the form of
a written document (provided by the Company) signed by the Participant and filed
with the Committee, (ii) shall designate the period of deferral and the form and
manner of payment elected by the Participant, and (iii) may not be revoked or
modified without the prior written approval of the Committee. The Committee
shall be authorized to adopt such rules and limitations as it shall determine
are necessary or appropriate with respect to the timing of elections to defer
compensation under the Plan.
ARTICLE VI
MISCELLANEOUS
6.1 Unfunded Plan. Nothing contained herein shall be deemed to
create a trust of any kind or create any fiduciary relationship. This Plan shall
be unfunded. Funds invested hereunder shall continue for all purposes to be part
of the general funds of the Company. To the extent that a Participant acquires a
right to receive payments from the Company under the Plan, such right shall not
be greater than the right of any unsecured general creditor of the Company and
such right shall be an unsecured claim against the general assets of the
Company. Although bookkeeping accounts may be established with respect to
Participants, any such accounts shall be used merely as a bookkeeping
convenience. The Company shall not be required to segregate any assets that may
at any time be represented by cash or rights thereto, nor shall this Plan be
construed as providing for such segregation, nor shall the Company, the Board or
the Committee be deemed to be a trustee of any cash or rights thereto to be
granted under this Plan. Any liability or obligation of the Company to any
Participant with respect to cash or rights thereto under this Plan shall be
based solely upon any contractual obligations that may be created by this Plan,
and no such liability or obligation of the Company shall be deemed to be secured
by any pledge or other encumbrance on any property of the Company. Neither the
Company nor the Board nor the Committee shall be required to give any security
or bond for the performance of any obligation that may be created by this Plan.
6.2 Title to Funds Remains with Company. Amounts credited to
each Participant's Deferred Interest Bearing Account and Stock Account shall not
be specifically set aside or otherwise segregated, but will be combined with
corporate assets. Title to such funds will remain with the Company and the
Company's only obligation will be to make timely payments to Participants in
accordance with the Plan.
6.3 Statement of Account. A statement will be furnished to
each Participant annually on such date as may be determined by the Committee
stating the balance of the Participant's Deferred Interest Bearing Account and
Stock Account and accrued interest thereon as of a recent date designated by the
Committee.
6.4 Assignability. Except as provided in Section 4.5, no right
to receive payment hereunder shall be transferable or assignable by a
Participant except by will or the
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laws of descent and distribution or pursuant to a qualified domestic relations
order as defined by the Code or Title I of the Employee Retirement Income
Security Act of 1974, as amended, or the rules thereunder. Any attempted
assignment of any benefit under this Plan in violation of this Section 6.4 shall
be null and void.
6.5 Amendment, Modification, Suspension or Termination. The
Board may amend, modify, suspend or terminate this Plan for the purpose of
meeting or addressing any changes in legal requirements or for any other purpose
permitted by law, except that no amendment, modification or termination shall,
without the consent of the Participant, impair the rights of any Participant to
the balance in such Participant's Deferred Interest Bearing Account or Stock
Account or the amount of interest accrued thereon as of the date of such
amendment, modification or termination. The Board may at any time and from time
to time delegate to the Committee any or all of this authority under this
Section 6.5.
6.6 Governing Law. This Plan and all determinations made and
actions taken pursuant hereto, to the extent not otherwise governed by mandatory
provisions of the Code or the securities laws of the United States, shall be
governed by and construed in accordance with the laws of the State of Delaware.
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