Exhibit 10.21.2
KEY EMPLOYEE DEFERRED COMPENSATION PLAN OF
CONOCOPHILLIPS
TITLE II
(Effective for benefits earned or vested after
December 31, 2004)
2008 RESTATEMENT
PURPOSE
The purpose of the Key Employee Deferred Compensation Plan of ConocoPhillips
(the “Plan”) is to attract and retain key employees by providing them with an
opportunity to defer receipt of cash amounts which otherwise would be paid to
them under various compensation programs or plans by a Participating Subsidiary.
Title I of this Plan is effective with regard to benefits earned and vested
prior to January 1, 2005, while Title II of this Plan is effective with regard
to benefits earned or vested after December 31, 2004. Earnings, gains, and
losses shall be allocated to the Title of the Plan to which the underlying
obligations giving rise to them are allocated. The Plan is sponsored and
maintained by ConocoPhillips Company.
This Title II of the Plan is intended (1) to comply with Code section 409A, as
enacted as part of the American Jobs Creation Act of 2004, and official guidance
issued thereunder, and (2) to be “a plan which is unfunded and is maintained by
an employer primarily for the purpose of providing deferred compensation for a
select group of management or highly compensated employees” within the meaning
of sections 201(2), 301(a)(3), and 401(a)(1) of ERISA. Notwithstanding any other
provision of this Plan, this Plan shall be interpreted, operated, and
administered in a manner consistent with these intentions.

 

 

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SECTION 1. Definitions.

  (a)  
“Award” shall mean the United States cash dollar amount (i) allotted to an
Employee under the terms of an Incentive Compensation Plan or a Long Term
Incentive Plan, or (ii) required to be credited to an Employee’s Deferred
Compensation Account pursuant to the terms of an Award or of an Incentive
Compensation Plan, the Long Term Incentive Compensation Plan, the Strategic
Incentive Plan, a Long Term Incentive Plan, or any similar plans, or any
administrative procedure adopted pursuant thereto, or (iii) credited as a result
of an Employee’s voluntary reduction of Salary, or (iv) any other amount
determined by the Committee to be an Award under the Plan.

  (b)  
“Code” shall mean the Internal Revenue Code of 1986, as amended from time to
time, or any successor statute.

  (c)  
“Committee” shall mean the Compensation Committee of the Board of Directors of
ConocoPhillips.

  (d)  
“Company” shall mean ConocoPhillips Company, a Delaware corporation, or any
successor corporation. The Company is a subsidiary of ConocoPhillips.

  (e)  
“ConocoPhillips” shall mean ConocoPhillips, a Delaware corporation, or any
successor corporation. ConocoPhillips is a publicly held corporation and the
parent of the Company.

  (f)  
“Controlled Group” shall mean ConocoPhillips and its Subsidiaries.

  (g)  
“Deferred Compensation Account” shall mean an account established and maintained
for each Participant in which is recorded the amounts of Awards deferred by a
Participant, the deemed gains, losses, and earnings accrued thereon, and
payments made therefrom all in accordance with the terms of the Plan.

 

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  (h)  
“Election Form” shall mean a written form, including one in electronic format,
provided by the Plan Administrator pursuant to which a Participant may elect the
time and form of payment of his or her Benefit.

  (i)  
“Employee” shall mean any individual who is a salaried employee of the Company
or of a Participating Subsidiary who is eligible to receive an Award from an
Incentive Compensation Plan and is classified as a ConocoPhillips salary grade
19 or above or any equivalent salary grade at a Participating Subsidiary.

  (j)  
“ERISA” shall mean the Employee Retirement Income Security Act of 1974, as
amended from time to time, or any successor statute.

  (k)  
“Heritage Conoco Employee” shall mean an individual employed by Conoco Inc.,
Conoco Pipe Line Company, or Louisiana Gas Systems Inc. prior to January 1,
2003; provided, however, that an individual who has been terminated from
employment with a member of the Controlled Group at any time and rehired by a
member of the Controlled Group after January 1, 2003, shall not be considered a
Heritage Conoco Employee for purposes of this Plan.

  (l)  
“Incentive Compensation Plan” shall mean the ConocoPhillips Variable Cash
Incentive Program, the Incentive Compensation Plan of Phillips Petroleum
Company, or the Annual Incentive Compensation Plan of Phillips Petroleum
Company, the Special Incentive Plan for Former Tosco Executives, the Conoco Inc.
Global Variable Compensation Plan, or a similar plan of a Participating
Subsidiary, or any similar or successor plans, or all, as the context may
require.

  (m)  
“Long-Term Incentive Compensation Plan” shall mean the Long-Term Incentive
Compensation Plan of Phillips Petroleum Company, which was terminated
December 31, 1985.

 

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  (n)  
“Long-Term Incentive Plan” shall mean the ConocoPhillips Performance Share
Program, the ConocoPhillips Restricted Stock Program, the Phillips Petroleum
Company Long-Term Incentive Plan, or a similar or successor plan of any of them,
established under an Omnibus Securities Plan.

  (o)  
“Omnibus Securities Plan” shall mean the 2004 Omnibus Stock and Performance
Incentive Plan of ConocoPhillips, the 2002 Omnibus Securities Plan of Phillips
Petroleum Company, the Omnibus Securities Plan of Phillips Petroleum Company,
the 1998 Stock and Performance Incentive Plan of ConocoPhillips, the 1998 Key
Employee Stock Plan of ConocoPhillips, or a similar or successor plan of any of
them.

  (p)  
“Participant” shall mean a person for whom a Deferred Compensation Account is
maintained.

  (q)  
“Participating Subsidiary” shall mean a Subsidiary that has adopted one or more
plans making participants eligible for participation in this Plan and one or
more Employees of which are Potential Participants.

  (r)  
“Plan Administrator” shall mean the Vice President, Human Resources of the
Company, or his or her successor.

  (s)  
“Potential Participant” shall mean a person who has received a notice specified
in Section 2.

  (t)  
“Restricted Stock” and “Restricted Stock Units” shall mean respectively shares
of Stock and units each of which shall represent a hypothetical share of Stock,
which have certain restrictions attached to the ownership thereof or the
delivery of shares pursuant thereto.

 

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  (u)  
“Retirement” or “Retire” or “Retiring” shall mean Separation from Service from
the Controlled Group on or after age 55 or above and on or after the earliest
early retirement date as defined in applicable title of the ConocoPhillips
Retirement Plan or of the applicable retirement plan of a Participating Company.

  (v)  
“Schedule A Employee” shall mean an Employee whose name appears in Schedule A
attached to and made a part of this Plan.

  (w)  
“Separation from Service” shall mean the date on which the Participant separates
from service with the Controlled Group within the meaning of Code section 409A,
whether by reason of death, disability, retirement, or otherwise. In determining
Separation from Service, with regard to a bona fide leave of absence that is due
to any medically determinable physical or mental impairment that can be expected
to result in death or can be expected to last for a continuous period of not
less than six months, where such impairment causes the Employee to be unable to
perform the duties of his or her position of employment or any substantially
similar position of employment, a 29-month period of absence shall be
substituted for the six-month period set forth in section 1.409A-1(h)(1)(i) of
the regulations issued under section 409A of the Code, as allowed thereunder.

  (x)  
“Settlement Date” shall mean the date on which all acts under an Incentive
Compensation Plan or the Long-Term Incentive Compensation Plan or actions
directed by the Committee, as the case may be, have been taken which are
necessary to make an Award payable to the Participant.

  (y)  
“Salary” shall mean the monthly equivalent rate of pay for an Employee before
adjustments for any before-tax voluntary reductions.

  (z)  
“Stock” means shares of common stock of ConocoPhillips, par value $.01.

 

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  (aa)  
“Strategic Incentive Plan” shall mean the Strategic Incentive Plan portion of
the 1986 Stock Plan of Phillips Petroleum Company, of the 1990 Stock Plan of
Phillips Petroleum Company, of the Phillips Petroleum Company Omnibus Securities
Plan, and of any successor plans of similar nature.

  (bb)  
“Subsidiary” shall mean any corporation or other entity that is treated as a
single employer with ConocoPhillips under section 414(b) or (c) of the Code. In
applying section 1563(a)(1), (2), and (3) of the Code for purposes of
determining a controlled group of corporations under section 414(b) of the Code
and for purposes of determining trades or businesses (whether or not
incorporated) under common control under regulation section 1.414(c)-2 for
purposes of section 414(c) of the Code, the language “at least 80%” shall be
used without substitution as allowed under regulations pursuant to section 409A
of the Code.

  (cc)  
“Trustee” shall mean the trustee of the grantor trust established by the Trust
Agreement between Phillips Petroleum Company (now renamed ConocoPhillips
Company) and Wachovia Bank, N.A. dated as of June 1, 1998, or any successor
trustee.

SECTION 2. Notification of Potential Participants.

  (a)  
Incentive Compensation Plan. With regard to each year, at such times as the Plan
Administrator may determine, Employees who are eligible to receive an Award in
the immediately following calendar year under an Incentive Compensation Plan
will be notified and given the opportunity to make an election, using the
Election Form or in such other manner prescribed by the Plan Administrator, to
defer all or part of such Award.

  (b)  
Salary Reduction. With regard to each year, at such times as the Plan
Administrator may determine, Employees on the U.S. dollar payroll will be
notified and given the opportunity to make an election, using the Election Form
or in such other manner

 

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      prescribed by the Plan Administrator, to make a voluntary reduction of
Salary for each pay period of the following calendar year, in which case the
Company will credit a like amount as an Award hereunder, provided that the
amount of such voluntary reduction shall not be less than 1% nor more than 50%
of the Employee’s Salary per pay period.

SECTION 3. Election to Defer Award or Reduce Salary.

  (a)  
Incentive Compensation Plan. If a Potential Participant elects to defer under
this Plan all or any part of the Award to which a notice received under Section
2(a) pertains, the Potential Participant must make such election, using the
Election Form or in such other manner prescribed by the Plan Administrator. The
Potential Participant’s election shall become irrevocable on December 31 of the
year in which said Section 2(a) notice was received (except in the case of an
election for an Award under an Incentive Compensation Plan determined by the
Plan Administrator to be “performance-based compensation” under Code section
409A, the election shall become irrevocable on June 30 of the year in which said
Section 2(a) notice was received), subject to the provisions Section 5(d). If an
election is not properly made and timely received, the Potential Participant
will be deemed to have elected to receive and not to defer any such Incentive
Compensation Plan Award.

  (b)  
Salary Reduction. If a Potential Participant elects to voluntarily reduce Salary
to which a notice received under Section 2(b) pertains and receive an Award
hereunder in lieu thereof, the Potential Participant must make an election,
using the Election Form or in such other manner prescribed by the Plan
Administrator, which must be received on or before December 31 (or such earlier
time as may be prescribed by the Plan Administrator) prior to the beginning of
the calendar year of the elected deferral. Such election must be in writing
signed by the Potential Participant, and must state the amount of the salary
reduction the Potential Participant elects. Such election becomes irrevocable on
December 31 prior to the beginning of the calendar year, subject to the
provisions Section 5(d). If an election is not properly made and timely

 

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      received, the Potential Participant will be deemed to have elected to
receive and not to defer any such Salary.

SECTION 4. Deferred Compensation Accounts.

  (a)  
Credit for Deferral. Amounts deferred pursuant to Section 3(a) will be credited
to a Deferred Compensation Account for the Participant for the calendar year in
which the amounts are deferred not less than 30 days after the Settlement Date
of the Incentive Compensation Plan.

If an Award in the form of Restricted Stock or Restricted Stock Units provides
that, in certain instances the Restricted Stock or Restricted Stock Units shall
be cancelled and a market value in lieu thereof be credited to a Deferred
Compensation Account for the Participant, then the market value shall be
credited to a Deferred Compensation Account for the Participant as of the day
that the Award in the form of Restricted Stock or Restricted Stock Units is
cancelled. The market value of the underlying Restricted Stock or the shares
represented by the Restricted Stock Units awarded under a Long Term Incentive
Plan, under an Incentive Compensation Plan that began on or after January 1,
2003, under an Omnibus Securities Plan (with regard to awards made on or after
January 1, 2003), and for the Special Stock Awards issued on October 22, 2002,
shall be the monthly average Fair Market Value of the Stock during the calendar
month preceding the month in which the restrictions lapse or shares are to be
delivered as applicable. The monthly average Fair Market Value of the Stock is
the average of the daily Fair Market Value of the Stock for each trading day of
the month. For Awards made prior to those times, the market value of the
underlying Restricted Stock or the shares represented by the Restricted Stock
Units, as applicable, shall be based on the higher of (i) the average of the
high and low selling prices of the Stock on the date the restrictions lapse or
the last trading day before the day the restrictions lapse if such date is not a
trading day or (ii) the average of the high three monthly Fair Market Values of
the Stock during the twelve calendar months preceding the month in which the
restrictions lapse. The

 

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      monthly Fair Market Value of the 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 of the Stock on the New York Stock Exchange.

Amounts deferred pursuant to other provisions of this Plan shall be credited to
a Deferred Compensation Account for the Participant for the calendar year in
which such amounts are deferred not later than 30 days after the date the Award
or Salary would otherwise be payable.

  (b)  
Designation of Investments. The amount in each Deferred Compensation Account of
a Participant shall be deemed to have been invested and reinvested from time to
time, in such “eligible securities” as the Participant shall designate. Prior to
or in the absence of a Participant’s designation, the Company shall designate an
“eligible security” in which the Participant’s Deferred Compensation Account
shall be deemed to have been invested until designation instructions are
received from the Participant. Eligible securities are those securities
designated by the Chief Financial Officer of ConocoPhillips, or his successor.
The Chief Financial Officer of ConocoPhillips may include as eligible
securities, stocks listed on a national securities exchange, and bonds, notes,
debentures, corporate or governmental, either listed on a national securities
exchange or for which price quotations are published in The Wall Street Journal
and shares issued by investment companies commonly known as “mutual funds.” The
Deferred Compensation Accounts of a Participant will be adjusted to reflect the
deemed gains, losses, and earnings as though the amount deferred was actually
invested and reinvested in the eligible securities for each Deferred
Compensation Account of the Participant.

Notwithstanding anything to the contrary in this section 4(b), in the event the
Company (or any trust maintained for this purpose) actually purchases or sells
such securities in the quantities and at the times the securities are deemed to
be purchased or sold for a Deferred Compensation Account of a Participant, the

 

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      Account shall be adjusted accordingly to reflect the price actually paid
or received by the Company for such securities after adjustment for all
transaction expenses incurred (including without limitation brokerage fees and
stock transfer taxes).

In the case of any deemed purchase not actually made by the Company, the
Deferred Compensation Account shall be charged with a dollar amount equal to the
quantity and kind of securities deemed to have been purchased multiplied by the
fair market value of such security on the date of reference and shall be
credited with the quantity and kind of securities so deemed to have been
purchased. In the case of any deemed sale not actually made by the Company, the
account shall be charged with the quantity and kind of securities deemed to have
been sold, and shall be credited with a dollar amount equal to the quantity and
kind of securities deemed to have been sold multiplied by the fair market value
of such security on the date of reference. As used in this paragraph “fair
market value” means in the case of a listed security the closing price on the
date of reference, or if there were no sales on such date, then the closing
price on the nearest preceding day on which there were such sales, and in the
case of an unlisted security the mean between the bid and asked prices on the
date of reference, or if no such prices are available for such date, then the
mean between the bid and asked prices to the nearest preceding day for which
such prices are available.
The Plan Administrator may designate a third party to provide services that may
include record keeping, Participant accounting, Participant communication,
payment of installments to the Participant, tax reporting, and any other
services specified in an agreement with such third party.

  (c)  
Payments. A Participant’s Deferred Compensation Account shall be debited with
respect to payments made from the account pursuant to this Plan as of the date
such payments are made from the account. Payments shall be made on the dates
specified in the elections of the Participant; provided, however, that the
Participant shall have no right to complain or make a claim about the date of a
payment if such payment is

 

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      made no earlier than 30 days prior to the specified date and no later than
the end of the calendar year in which such specified date falls (or, if later,
by the 15th day of the third calendar month following the specified date).

If any person to whom a payment is due hereunder is under legal disability as
determined in the sole discretion of the Plan Administrator, the Plan
Administrator shall have the power to cause the payment due such person to be
made to such person’s guardian or other legal representative for the person’s
benefit, and such payment shall constitute a full release and discharge of the
Company, all members of the Controlled Group, the Plan Administrator, and any
fiduciary of the Plan.

  (d)  
Statements. At least one time per year the Plan Administrator (or a third party
acting for the Plan Administrator) will furnish each Participant a written
statement setting forth the current balance in the Participant’s Deferred
Compensation Account, the amounts credited or debited to such account since the
last statement and the payment schedule of deferred Awards, and deemed gains,
losses, and earnings accrued thereon as provided by the deferred payment option
selected by the Participant. This provision shall be deemed satisfied if the
Plan Administrator (or a third party acting for the Plan Administrator) makes
such information available through electronic means, such as a web site, and
informing affected Participants of the availability of the information and the
manner of accessing it.

SECTION 5. Payments from Deferred Compensation Accounts.

  (a)  
Election of Method of Payment. At the time a Potential Participant submits an
election to defer all or any part of an Award under an Incentive Compensation
Plan as provided in Section 3(a) above or to reduce any part of salary as
provided in Section 3(b) above, the Potential Participant shall also elect,
using the Election Form or in such other manner prescribed by the Plan
Administrator, which of the payment options, provided for in Paragraph (b) of
this Section, shall apply to the deferred portion of said Award or salary
adjusted for any deemed gains, losses, and earnings

 

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      accrued thereon credited to the Participant’s Deferred Compensation
Account under this Plan. Subject to Paragraph (d) of this Section, the election
of the method of payment of the amount deferred shall become irrevocable on
December 31 of the year in which the applicable Section 2(a) or (b) notice was
received (except in the case of an election for an Award under an Incentive
Compensation Plan determined by the Plan Administrator to be “performance-based
compensation” under Code section 409A, the election shall become irrevocable on
June 30 of the year in which said Section 2(a) or (b) notice was received). If
an election does not properly indicate a time and method of payment, the
Potential Participant will be deemed to have elected to receive such payment in
a single lump sum at the earlier of death or six months after Separation from
Service other than by death.

  (b)  
Payment Options. A Potential Participant may elect, using an Election Form or in
such other manner prescribed by the Plan Administrator, to have the deferred
portion of an Incentive Compensation Plan Award or salary adjusted for any
deemed gains, losses, and earnings accrued thereon paid:

  (i)  
(After Separation from Service) in 1 to 15 annual installments, in 2 to 30
semi-annual installments, or in 4 to 60 quarterly installments, the payment of
the first of any of such installments to commence on the first day of the first
calendar quarter which is on or after one year from the Participant’s Separation
from Service and is no longer than five years from the Participant’s Separation
from Service, subject to Paragraph (d) of this Section, or

  (ii)  
(Date Certain) with regard only to the deferred portion of an Incentive
Compensation Award, in 1 to 15 annual installments, in 2 to 30 semi-annual
installments, or in 4 to 60 quarterly installments, the payment of the first of
any of such installments to commence on the first day of calendar quarter which
is designated by the Participant, is at least one year after the date on which
the election is made, and is not later than the 65th birthday of the
Participant, subject to Paragraph (d) of this Section.

 

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  (iii)  
In the event that no election is properly and timely made with regard to the
time and method of payment under Section 5(b)(i), payment shall be made on the
earlier of the death or the date which is the first of the calendar quarter
following six months after the date of Separation from Service, whether by
retirement, disability, or otherwise (other than by death), of the Participant,
subject to Paragraph (d) of this Section.

  (c)  
Method of Payment of the Value of Restricted Stock and Restricted Stock Units.
If an Award in the form of Restricted Stock or Restricted Stock Units provides
that, in certain instances the Restricted Stock or Restricted Stock Units shall
be cancelled and a market value in lieu thereof be credited to a Deferred
Compensation Account for the Participant, payment of such Deferred Compensation
Account shall be made on the earlier of the death or the date which is the first
of the calendar quarter following six months after the date of Separation from
Service, whether by retirement, disability, or otherwise (than death), of the
Participant, subject to Paragraph (d) of this Section.

  (d)  
Change in Time or Form of Payment. A Participant may make an election to change
the time or form of payment elected or set under Section 5 (including this
Paragraph (d)), but only if the following rules are satisfied:

  (1)  
The election to change the time or form of payment may not take effect until at
least twelve months after the date on which such election is made;

  (2)  
Payment under such election may not be made earlier than at least five years
from the date the payment would have otherwise been made or commenced;

  (3)  
Such payment may commence as of the beginning of any calendar quarter;

  (4)  
An election to receive payments in installments shall be treated as a single
payment for purposes of these rules;

  (5)  
The election may not result in an impermissible acceleration of payment
prohibited under Code section 409A;

 

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  (6)  
No more than four such elections shall be permitted with respect to each
Deferred Compensation Account of a Participant; and

  (7)  
No payment may be made after the date that is twenty (20) years after the date
of the Participant’s Separation from Service.

  (e)  
Effect of Taxation. If a portion of a Participant’s Benefit (and earnings,
gains, and losses thereon) is includible in income under Code section 409A, such
portion shall be distributed immediately to the Participant.

  (f)  
Installment Amount. The amount of each installment shall be determined by
dividing the balance in the Participant’s Deferred Compensation Account as of
the date the installment is to be paid, by the number of installments remaining
to be paid (inclusive of the current installment).

  (g)  
Death of Participant. Upon the death of a Participant, the Participant’s
beneficiary or beneficiaries designated in accordance with Section 8, or in the
absence of an effective beneficiary designation, the surviving spouse, surviving
children (natural or adopted) in equal shares, or the Estate of the deceased
Participant, in that order of priority, shall receive payments in accordance
with the payment option selected by the Participant or, if no payment option was
properly and timely selected by the Participant with regard to a Deferred
Compensation Account, upon the death of the Participant.

SECTION 6. Special Provisions for Former ARCO Alaska Employees.
Notwithstanding any provisions to the contrary, in order to comply with the
terms of the Master Purchase and Sale Agreement (“Sale Agreement”) by which the
Company acquired certain Alaskan assets of Atlantic Richfield Company (“ARCO”),
a Participant who was eligible to participate in the ARCO employee benefit plans
immediately prior to becoming an Employee and who was not employed by ARCO
Marine, Inc. (a “former ARCO Alaska employee”) and who was classified as a grade
7 or 8 under ARCO’s job classification

 

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system and was eligible under ARCO’s Executive Deferral Plan to voluntarily
reduce salary and defer the amount of the voluntary salary reduction and who was
classified as a grade 31 or below at that time under Phillips Petroleum
Company’s job classification system may, in a manner prescribed by the Plan
Administrator, make an election to voluntarily reduce salary and defer the
amount of the voluntary salary reduction for salary received for 2005 and
receive a salary deferral credit under this Plan; provided, that all of the Plan
provisions (other than eligibility to participate) shall apply to such an
election.
SECTION 7. Schedule A Employees.
Notwithstanding any earlier election or indication of preference to participate
in voluntary salary reductions to be deferred into the Plan in 2005 or deferrals
into the Plan in 2005 of Awards under an Incentive Compensation Plan, Schedule A
Employees shall have their participation in the Plan for 2005 revoked as to the
salary reductions or Incentive Compensation Plan Award or both, as indicated on
Schedule A to this Plan. Any such deferrals made in 2005 for such Schedule A
Employees shall be returned to them (together with any earnings, gains, or
losses thereon) on or before December 31, 2005.
SECTION 8. Designation of Beneficiary.
Each Participant shall designate a beneficiary or beneficiaries to receive the
entire balance of the Participant’s Deferred Compensation Account by giving
signed written notice of such designation to the Plan Administrator. The
Participant may from time to time change or cancel any previous beneficiary
designation in the same manner. The last beneficiary designation received by the
Plan Administrator shall be controlling over any prior designation and over any
testamentary or other disposition. After acceptance by the Plan Administrator of
such written designation, it shall take effect as of the date on which it was
signed by the Participant, whether the Participant is living at the time of such
receipt, but without prejudice to the Company or any member of the Controlled
Group or the Plan Administrator or their respective employees and agents on
account of any payment made under this Plan before receipt of such designation.

 

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SECTION 9. Nonassignability.
The right of a Participant, 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 Participant, beneficiary, or other such person.
SECTION 10. Administration.

  (a)  
The Plan shall be administered by the Plan Administrator. The Plan Administrator
may delegate to employees of the Company or any member of the Controlled Group
the authority to execute and deliver such instruments and documents, to do all
such acts and things, and to take such other steps deemed necessary, advisable,
or convenient for the effective administration of the Plan in accordance with
its terms and purpose, except that the Plan Administrator may not delegate any
discretionary authority with respect to substantive decisions or functions
regarding the Plan or Benefits hereunder. 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.

  (b)  
Any claim for benefits hereunder shall be presented in writing to the Plan
Administrator for consideration, grant, or denial. Claimants will be notified in
writing of approved claims, which will be processed as claimed. A claim is
considered approved only if its approval is communicated in writing to a
claimant.

  (c)  
In the case of a denial of a claim respecting benefits paid or payable with
respect to a Participant, a written notice will be furnished to the claimant
within 90 days of the date on which the claim is received by the Plan
Administrator. If special circumstances (such as for a hearing) require a longer
period, the claimant will be notified in writing, prior to the expiration of the
90-day period, of the reasons for an

 

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      extension of time; provided, however, that no extensions will be permitted
beyond 90 days after the expiration of the initial 90-day period. A denial or
partial denial of a claim will be dated and signed by the Plan Administrator and
will clearly set forth:

  (1)  
the specific reason or reasons for the denial;

  (2)  
specific reference to pertinent Plan provisions on which the denial is based;

  (3)  
a description of any additional material or information necessary for the
claimant to perfect the claim and an explanation of why such material or
information is necessary; and

  (4)  
an explanation of the procedure for review of the denied or partially denied
claim set forth below, including the claimant’s right to bring a civil action
under ERISA section 502(a) following an adverse benefit determination on review.

  (d)  
Upon denial of a claim, in whole or in part, a claimant or his duly authorized
representative will have the right to submit a written request to the Trustee
for a full and fair review of the denied claim by filing a written notice of
appeal with the Trustee within 60 days of the receipt by the claimant of written
notice of the denial of the claim. A claimant or the claimant’s authorized
representative will have, upon request and free of charge, reasonable access to,
and copies of, all documents, records, and other information relevant to the
claimant’s claim for benefits and may submit issues and comments in writing. The
review will take into account all comments, documents, records, and other
information submitted by the claimant relating to the claim, without regard to
whether such information was submitted or considered in the initial benefit
determination. If the claimant fails to file a request for review within 60 days
of the denial notification, the claim will be deemed abandoned and the claimant
precluded from reasserting it. If the claimant does file a request for review,
his request must include a description of the issues and evidence he deems
relevant. Failure to raise issues or present evidence on review will preclude
those issues or evidence from being presented in any subsequent proceeding or
judicial review of the claim.

 

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  (e)  
The Trustee will provide a prompt written decision on review. If the claim is
denied on review, the decision shall set forth:

  (1)  
the specific reason or reasons for the adverse determination;

  (2)  
specific reference to pertinent Plan provisions on which the adverse
determination is based;

  (3)  
a statement that the claimant is entitled to receive, upon request and free of
charge, reasonable access to, and copies of, all documents, records, and other
information relevant to the claimant’s claim for benefits; and

  (4)  
a statement describing any voluntary appeal procedures offered by the Plan and
the claimant’s right to obtain the information about such procedures, as well as
a statement of the claimant’s right to bring an action under ERISA section
502(a).

  (f)  
A decision will be rendered no more than 60 days after the Trustee’s receipt of
the request for review, except that such period may be extended for an
additional 60 days if the Trustee determines that special circumstances (such as
for a hearing) require such extension. If an extension of time is required,
written notice of the extension will be furnished to the claimant before the end
of the initial 60-day period.

  (g)  
To the extent permitted by law, decisions reached under the claims procedures
set forth in this Section shall be final and binding on all parties. No legal
action for benefits under the Plan shall be brought unless and until the
claimant has exhausted his remedies under this Section. In any such legal
action, the claimant may only present evidence and theories which the claimant
presented during the claims procedure. Any claims which the claimant does not in
good faith pursue through the review stage of the procedure shall be treated as
having been irrevocably waived. Judicial review of a claimant’s denied claim
shall be limited to a determination of whether the denial was an abuse of
discretion based on the evidence and theories the claimant presented during the
claims procedure.

 

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SECTION 11. Employment not Affected by Plan.
Participation or nonparticipation in this Plan shall neither adversely affect
any person’s employment status nor 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 any Controlled Group member’s right to terminate the Employee’s
employment or to change the Employee’s compensation or position.
SECTION 12. Determination of Recipients of Awards.
The determination of those persons who are entitled to Awards under an Incentive
Compensation Plan and any other such plans shall be governed solely by the terms
and provisions of the applicable plan or program, and the selection of an
Employee as a Potential Participant or the acceptance of an indication of
preference to defer an Award hereunder shall not in any way entitle such
Potential Participant to an Award.
SECTION 13. Method of Providing Payments.

  (a)  
Nonsegregation. Amounts deferred pursuant to this Plan and the crediting of
amounts to a Participant’s Deferred Compensation Account shall represent the
Company’s unfunded and unsecured promise to pay compensation in the future. With
respect to said amounts, the relationship of the Company and a Participant shall
be that of debtor and general unsecured creditor. While the Company may make
investments for the purpose of measuring and meeting its obligations under this
Plan such investments shall remain the sole property of the Company subject to
claims of its creditors generally, and shall not be deemed to form or be
included in any part of the Deferred Compensation Account.

  (b)  
Funding. It is the intention of the Company that this Plan shall be unfunded for
federal tax purposes and for purposes of Title I of ERISA; provided, however,
that the

 

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      Company may establish a grantor trust to satisfy part or all of its Plan
payment obligations so long as the Plan remains unfunded for federal tax
purposes and for purposes of Title I of ERISA.

SECTION 14. Amendment or Termination of Plan.
The Company reserves the right to amend this Plan from time to time or to
terminate the Plan entirely, provided, however, that no amendment may affect the
balance in a Participant’s account on the effective date of the amendment.
SECTION 15. Miscellaneous Provisions.

  (a)  
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.

  (b)  
This Plan shall be construed, regulated, and administered in accordance with the
laws of the State of Texas except to the extent that said laws have been
preempted by the laws of the United States.

  (c)  
It is the intention of the Company that, so long as any of ConocoPhillips’
equity securities are registered pursuant to Section 12(b) or 12(g) of the
Securities Exchange Act of 1934, this Plan shall be operated in compliance with
16(b) and, if any Plan provision or transaction is found not to comply with
Section 16(b), that provision or transaction, as the case may be, shall be
deemed null and void ab initio. Notwithstanding anything in the Plan to the
contrary, the Company, in its absolute discretion, may bifurcate the Plan so as
to restrict, limit or condition the use of any provision of the Plan to
Participants who are officers and directors subject to Section 16(b) without so
restricting, limiting or conditioning the Plan with respect to other
Participants.

 

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SECTION 16. Effective Date of the Restated Plan.
Title II of the Plan is amended and restated as set forth in this 2008
Restatement effective as of January 1, 2005.
Executed this 19th day of December 2008, effective as of January 1, 2005, with
respect to benefits earned and vested after December 31, 2004.

     
/s/ Carin S. Knickel
   
 
Carin S. Knickel
   
Vice President, Human Resources
   

 

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