Exhibit 10.23
CONOCOPHILLIPS
EXECUTIVE SEVERANCE PLAN
(Amended and Restated Effective as of December 31, 2008)
Effective October 1, 2004, the Company adopted this the ConocoPhillips Executive
Severance Plan (the “Plan”) for the benefit of certain employees of the Company
and its subsidiaries. It was amended and restated effective January 1, 2005.
This amendment and restatement of the Plan shall be effective December 31, 2008.
Any Eligible Employee (as defined below) having a Severance Date (as defined
below) prior to December 31, 2008, shall have benefits under this Plan
determined in accordance with the provisions of this Plan as they existed prior
to this amendment and restatement. Any Eligible Employee (as defined below)
having a Severance Date (as defined below) on or after December 31, 2008, shall
have benefits under this Plan determined in accordance with the provisions of
this Plan pursuant to this amendment and restatement. All capitalized terms used
herein are defined in Section 1 hereof. This Plan is intended to be a plan
maintained primarily for the purpose of providing deferred compensation for a
select group of management or highly compensated employees, within the meaning
of Title I of the Employee Retirement Income Security Act of 1974, as amended
and shall be interpreted in a manner consistent with such intention.
SECTION 1. DEFINITIONS. As hereinafter used:
1.1 “Board” means the Board of Directors of the Company.
1.2 “Cause” means (i) the willful and continued failure by the Eligible Employee
to substantially perform the Eligible Employee’s duties with the Employer (other
than any such failure resulting from the Eligible Employee’s incapacity due to
physical or mental illness), or (ii) the willful engaging, not in good faith, by
the Eligible Employee in conduct which is demonstrably injurious to the Company
or any of its subsidiaries, monetarily or otherwise.
1.3 “Code” means the Internal Revenue Code of 1986, as it may be amended from
time to time.
1.4 “Company” means ConocoPhillips or any successors thereto.
1.5 Controlled Group” shall mean ConocoPhillips and its Subsidiaries.
1.6 “Credited Compensation” of a Severed Employee means the aggregate of the
Severed Employee’s annual base salary plus his or her annual incentive
compensation, each as further described below. For purposes of this definition,
(a) annual base salary shall be determined

 

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immediately prior to the Severance Date and (b) annual incentive compensation
shall be deemed to equal the Severed Employee’s most recently established target
(determined at one hundred percent of target) for annual incentive compensation
for such employee prior to such employee’s Severance Date pursuant to the
Variable Cash Incentive Program or its successor program maintained by the
Employer.
1.7 “Effective Date” means, as applicable, the date first stated above as the
original effective date of this Plan or the effective date of this Plan as
amended and restated.
1.8 “Eligible Employee” means any employee that is a Tier 1 Employee or a Tier 2
Employee, other than those employees who are listed on Exhibit B.
1.9 “Employer” means the Company or any of its subsidiaries.
1.10 “Person” means any individual, firm, corporation, partnership, association,
trust, unincorporated organization, or other entity.
1.11 “Plan” means the ConocoPhillips Executive Severance Plan, as set forth
herein, as it may be amended from time to time.
1.12 “Plan Administrator” means the person or persons appointed from time to
time by the Board, which appointment may be revoked at any time by the Board.
1.13 “Retirement Plans” means the ConocoPhillips Retirement Plan and the
ConocoPhillips Key Employee Supplemental Retirement Plan.
1.14 “Separation from Service” means 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.
1.15 “Severance” means the termination of an Eligible Employee’s employment with
the Employer by the Employer other than for Cause. An Eligible Employee will not
be considered to have incurred a Severance if his employment is discontinued by
reason of the Eligible Employee’s death or a physical or mental condition
causing such Eligible Employee’s inability to substantially perform his duties
with the Employer and entitling him or her to benefits under any long-term sick
pay or disability income policy or program of the Employer. Furthermore, an
Eligible Employee will not be considered to have incurred a Severance if
employment with the Employer is discontinued after the Eligible Employee has
been offered employment with another employer that has purchased

 

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a subsidiary or division of the Company or all or substantially all of the
assets of an a subsidiary or division of the Company and the offer of employment
from the other employer is at the same or greater salary and the same or greater
target bonus as the Eligible Employee has at that time from the Employer. Still
further, an Eligible Employee will not be considered to have incurred a
Severance if employment with the Employer is discontinued and the Eligible
Employee is also eligible for payments under the ConocoPhillips Key Employee
Change in Control Severance Plan, effective October 1, 2004, or as subsequently
amended, or under the Conoco Inc. Key Employee Severance Plan, as amended and
restated effective October 1, 2001, and as subsequently amended. Furthermore, in
order to be considered a Severance, the termination must also meet the
requirements of a Separation from Service.
1.16 “Severance Date” means the date on which an Eligible Employee incurs a
Severance.
1.17 “Severance Pay” means the payment determined pursuant to Section 2.1
hereof.
1.18 “Severed Employee” means an Eligible Employee who has incurred a Severance.
1.19 “Subsidiary” means any corporation or other entity that is treated as a
single employer with ConocoPhillips, under section 414(b) or (c) of the Code;
provided, that in making this determination, 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.
1.20 “Tier 1 Employee” means any employee of the Employer who is in salary grade
26 or above (under the salary grade schedule of the Company on the Effective
Date, with appropriate adjustment for any subsequent change in such salary grade
schedule) on the Severance Date.
1.21 “Tier 2 Employee” means any employee of the Employer, other than a Tier 1
Employee, who is in salary grade 23 or above (under the salary grade schedule of
the Company on the Effective Date, with appropriate adjustment for any
subsequent change in such salary grade schedule) on the Severance Date.
SECTION 2. BENEFITS.
2.1 Subject to Section 2.7, each Severed Employee shall be entitled to receive
Severance Pay equal to the sum of the amounts determined under Sections 2.1(a),
(b), and (c). Furthermore, for purposes of Employer compensation plans,
programs, and arrangements, each Severed Employee shall be considered to have
been laid off by the Employer.

  (a)  
The amount that is the Severed Employee’s Credited Compensation, multiplied by
(i) 2, in the case of a Tier 1 Employee or (ii) 1.5 in the case of a Tier 2
Employee.

 

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  (b)  
The amount that is the present value, determined as of the Severed Employee’s
Severance Date, of the increase in benefits under the Retirement Plans that
would result if the Severed Employee was credited with the following number of
additional years of age and service under the Retirement Plans: (i) 2, in the
case of a Tier 1 Employee or (ii) 1.5, in the case of a Tier 2 Employee;
provided, however, that in calculating (b), if the Severed Employee is entitled
under the Retirement Plans to any additional credited service due to the
circumstances of the Severed Employee’s termination, then the amount of the
present value of the increased benefits called for in the determination of
(b) shall be reduced by the amount of the present value of the increased
benefits under the Retirement Plans calculated after taking into account the
circumstances of the Severed Employee’s termination, but not below zero. Present
value shall be determined based on the assumptions utilized under the
ConocoPhillips Retirement Plan for purposes of determining contributions under
Code Section 412 for the most recently completed plan year.

  (c)  
The amount that is equal to either (i) or (ii), as applicable, plus either
(iii) or (iv), as applicable, plus (v), if applicable, plus (vi), if applicable:

  (i)  
If the Severed Employee was enrolled in company-sponsored medical coverage on
the Severance Date, an amount equal to 6 times the difference between the COBRA
participant contribution rate and the active employee contribution rate, each as
of the Severance Date, for the type of coverage in which the Tier 2 Employee was
enrolled.

  (ii)  
If the Severed Employee was not enrolled in company-sponsored medical coverage
on the Severance Date, an amount equal to 18 times the difference between the
COBRA participant contribution rate and the active employee contribution rate,
each as of the Severance Date, for PPO medical coverage.

  (iii)  
If the Severed Employee was enrolled in company-sponsored dental coverage on the
Severance Date, an amount equal to 6 times the difference between the COBRA
participant contribution rate and the active employee contribution rate, each as
of the Severance Date, for the type of coverage in which the Tier 2 Employee was
enrolled.

  (iv)  
If the Severed Employee was not enrolled in company-sponsored dental coverage on
the Severance Date, an amount equal to 18 times the difference between the COBRA
participant contribution rate and the active employee contribution rate, each as
of the Severance Date, for dental coverage (using the CP dental option
coverage).

  (v)  
In the case of a Tier 1 Employee, an amount equal to the sum of 6 times the
COBRA participant contribution rate, as of the Severance Date, for PPO medical
coverage plus 6 times the COBRA participant contribution rate, as of the
Severance Date, for dental coverage (using the CP dental option coverage).

  (vi)  
If any persons qualified as eligible dependents of the Severed Employee under
the applicable company-sponsored medical or dental coverage in which the Severed
Employee was enrolled on the Severance Date, an

 

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amount equal to the sum of the differences, for each such eligible dependent,
between the COBRA eligible dependent contribution rate and the eligible
dependent contribution rate for eligible dependents of active employees, each as
of the Severance Date, for the medical and/or dental coverage in which the
Severed Employee was enrolled on the Severance Date, as applicable, times the
factor set forth in the applicable Section 2.1(c)(i) or (ii), (c)(iii) or (iv),
and (c)(v); provided, that if the Severed Employee was not enrolled for medical
or dental coverage, then the eligibility and amount for each dependent shall be
determined as if the Severed Employee had been enrolled in the PPO medical
coverage or dental coverage (using the CP dental option coverage), as
applicable, on the Severance Date.

2.2 Subject to Section 2.7, Severance Pay (as well as any amount payable
pursuant to Section 2.4 hereof) shall be paid to an eligible Severed Employee in
a cash lump sum on the first business day immediately following 10 days after
the end of the period for executing and delivering the Severed Employee’s
release, as set forth in Section 2.7.
2.3 Subject to Section 2.7, for a period of (a) 24 months, in the case of a Tier
1 Employee or (b) 18 months, in the case of a Tier 2 Employee, beginning the
first of the month following the termination of active employee benefits, the
Company shall arrange to provide the Severed Employee and his eligible
dependents certain benefits, as enumerated below, similar to those the Severed
Employee and his eligible dependents had immediately prior to the Severed
Employee’s Severance Date. These benefits will be provided at no greater cost to
the Severed Employee than active employee rates for the plan year of coverage
provided the benefits continue to be offered by the Company to active employees
and the Severed Employee and his eligible dependents meet the same eligibility
criteria for the benefits as an active employee and dependents of an active
employee. Depending on coverages prior to the Severed Employee’s Severance Date,
these benefits could include the following, but do not include any other
benefits offered by the Company: Life Insurance, which includes Basic, Executive
Basic, Supplemental, and Dependent Life; and Personal Accident Insurance.
Severed employees may also continue Long Term Care and Executive Life directly
through the vendor to be paid for by the Severed Employee. Nothing herein shall
prevent a Severed Employee or eligible dependents of a Severed Employee from
electing to receive COBRA continuation coverage of health benefits subject to
COBRA, in accordance with the applicable provisions of the law and the
applicable plans. While as an active employee the Severed Employee may have been
able to make employee contributions or pay premiums for certain coverage through
a pre-tax salary reduction arrangement, that will not continue after the Severed
Employee’s Severance Date. The cost of these benefits will not be adjusted to
reflect that the Severed Employee’s cost will no longer be pre-tax. All other
active employee benefits, not specifically mentioned above, are excluded,
although if any of the benefits specifically mentioned above are replaced with a
similar benefit after the Severed Employee’s Severance Date, such replacement
benefits are to be considered as mentioned specifically above even though their
names, terms, and conditions may have been changed. Such benefits shall not be
provided (except to the extent as may be required by law) during any period when
the Severed

 

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Employee is eligible to receive such benefits from another employer or from an
Employer or if the Severed Employee has resumed working for an Employer. The
Severed Employee is obligated to inform the Company when or if they become
eligible to receive such benefits from another employer.
2.4 Each Severed Employee shall be entitled to receive the employee’s full
salary through the Severance Date and, subject to Section 2.7 but
notwithstanding any provision of the Company’s Variable Cash Incentive Program
or similar annual bonus incentive plan to the contrary, shall be eligible for
consideration for an award under such program or plan when awards are made with
regard to the fiscal year under such program or plan in which the Severance Date
occurred.
2.5 Each party to any dispute concerning this Plan shall be responsible for that
party’s own legal fees and expenses; provided, however, that the arbitrator
appointed pursuant to Section 3.2 of this Plan may award reasonable legal fees
and expenses to an Eligible Employee if the arbitrator determines that the
Company’s denial of the claim of the Eligible Employee was not reasonable.
2.6 The Company shall be entitled to withhold and/or to cause to be withheld
from amounts to be paid to the Severed Employee hereunder any federal, state, or
local withholding or other taxes or charges which it is from time to time
required to withhold.
2.7 No Severed Employee shall be eligible to receive Severance Pay or other
benefits under the Plan unless he or she first executes a written release
substantially in the form attached as Exhibit A hereto (or, if the Severed
Employee was not a United States employee, a similar release which is in
accordance with the applicable laws in the relevant jurisdiction) and, to the
extent such release is revocable by its terms, only if the Severed Employee does
not revoke it, and unless he or she also, at the request of the Company,
executes a written agreement not to compete with the Company, with such terms
and conditions as may be proposed by the Company at the time. Such release and,
if requrested, such agreement not to compete must be executed and delivered to
the Company within 30 days of the Employee’s Severance Date.
SECTION 3. PLAN ADMINISTRATION.
3.1 The Plan Administrator shall administer the Plan and may interpret the Plan,
prescribe, amend, and rescind rules and regulations under the Plan and make all
other determinations necessary or advisable for the administration of the Plan,
subject to the provisions of the Plan. The Plan Administrator shall have
absolute discretion and authority in carrying out its responsibilities, and all
interpretations of the Plan, determinations of eligibility under the Plan,
determinations to grant or deny benefits under the Plan, or findings of fact or
resolutions related to the Plan and its administration that are made by the Plan
Administrator shall be binding, final, and conclusive on all parties.
3.2 In the event of a claim by an Eligible Employee as to the amount or timing
of any payment or benefit, such Eligible Employee shall present the reason for
his or her claim in writing to the Plan Administrator. The Plan Administrator
shall, within 14 days after receipt of such written claim, send

 

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a written notification to the Eligible Employee as to its disposition. Except as
provided in the preceding portion of this Section 3.2, all disputes under this
Plan shall be settled exclusively by binding arbitration in Houston, Texas, in
accordance with the rules of the American Arbitration Association then in
effect. Judgment may be entered on the arbitrator’s award in any court having
jurisdiction.
3.3 The Plan Administrator may delegate any of its duties hereunder to such
person or persons from time to time as it may designate.
3.4 The Plan Administrator is empowered, on behalf of the Plan, to engage
accountants, legal counsel, and such other personnel as it deems necessary or
advisable to assist it in the performance of its duties under the Plan. The
functions of any such persons engaged by the Plan Administrator shall be limited
to the specified services and duties for which they are engaged, and such
persons shall have no other duties, obligations or responsibilities under the
Plan. Such persons shall exercise no discretionary authority or discretionary
control respecting the management of the Plan. All reasonable expenses thereof
shall be borne by the Employer.
SECTION 4. DURATION; AMENDMENT; AND TERMINATION.
4.1 This Plan shall be effective on the Effective Date. This Plan shall continue
in effect unless and until it is terminated as provided in Section 4.2.
4.2 This Plan may be amended from time to time during its term by the Company
acting through its Board of Directors or, to the extent authorized by the Board
of Directors, its officers. The Company may, by action of its Board of
Directors, terminate this Plan at any time.
SECTION 5. GENERAL PROVISIONS.
5.1 Except as otherwise provided herein or by law, no right or interest of any
Eligible Employee under the Plan shall be assignable or transferable, in whole
or in part, either directly or by operation of law or otherwise, including
without limitation by execution, levy, garnishment, attachment, pledge, or in
any manner; no attempted assignment or transfer thereof shall be effective; and
no right or interest of any Eligible Employee under the Plan shall be liable
for, or subject to, any obligation or liability of such Eligible Employee. When
a payment is due under this Plan to a Severed Employee who is unable to care for
his or her affairs, payment may be made directly to his or her legal guardian or
personal representative.
5.2 If any Employer is obligated by law or by contract to pay severance pay, a
termination indemnity, notice pay, or the like, to a Severed Employee, or if any
Employer is obligated by law to provide advance notice of separation (“Notice
Period”) to a Severed Employee, then any Severance Pay hereunder to such Severed
Employee shall be reduced by the amount of any such severance pay, termination
indemnity, notice pay, or the like, as applicable, and by the amount of any
compensation received during any Notice Period. This provision specifically
includes any payments or obligations under the ConocoPhillips Severance Pay
Plan, as effective March 13, 2004, and as subsequently

 

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amended. Furthermore, if an Eligible Employee has willful and bad faith conduct
demonstrably injurious to Company or its subsidiaries, monetarily or otherwise,
after receiving Severance Pay, the Company may offset an amount equal to such
Severance Pay against any other amounts due from other plans or programs, unless
otherwise required by law.
5.3 Neither the establishment of the Plan, nor any modification thereof, nor the
creation of any fund, trust, or account, nor the payment of any benefits shall
be construed as giving any Eligible Employee, or any person whomsoever, the
right to be retained in the service of the Employer, and all Eligible Employees
shall remain subject to discharge to the same extent as if the Plan had never
been adopted.
5.4 If any provision of this Plan shall be held invalid or unenforceable, such
invalidity or unenforceability shall not affect any other provisions hereof, and
this Plan shall be construed and enforced as if such provisions had not been
included.
5.5 This Plan shall be binding upon the heirs, executors, administrators,
successors, and assigns of the parties, including each Eligible Employee,
present and future, and any successor to the Employer.
5.6 The headings and captions herein are provided for reference and convenience
only, shall not be considered part of the Plan, and shall not be employed in the
construction of the Plan.
5.7 The Plan shall not be funded. No Eligible Employee shall have any right to,
or interest in, any assets of any Employer that may be applied by the Employer
to the payment of benefits or other rights under this Plan.
5.8 Any notice or other communication required or permitted pursuant to the
terms hereof shall have been duly given when delivered or mailed by United
States Mail, first-class, postage prepaid, addressed to the intended recipient
at his, her or its last known address.
5.9 This Plan shall be construed and enforced according to the laws of the State
of Delaware.

              CONOCOPHILLIPS        
 
           
By:
  /s/ Carin S. Knickel       Dated: 12/19/2008
 
           
 
  Carin S. Knickel        
 
  Vice President, Human Resources        

 

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Exhibit A
WAIVER AND RELEASE OF CLAIMS
In consideration of, and subject to, the payments to be made to me by
ConocoPhillips, a Delaware corporation (the “Company”) or any of its
subsidiaries, pursuant to the ConocoPhillips Executive Severance Plan (the
“Plan”), which I acknowledge that I would not otherwise be entitled to receive,
I hereby waive any claims I may have for employment or re-employment by the
Company or any subsidiary or parent of the Company after the date hereof, and I
further agree to and do release and forever discharge the Company or any
subsidiary or parent of the Company, and their respective past and present
officers, directors, shareholders, employees, and agents from any and all claims
and causes of action, known or unknown, arising out of or relating to my
employment with the Company or any subsidiary or parent of the Company, or the
termination thereof, including, but not limited to, wrongful discharge, breach
of contract, tort, fraud, the Civil Rights Acts, Age Discrimination in
Employment Act, Employee Retirement Income Security Act, Americans with
Disabilities Act, or any other federal, state, or local legislation or common
law relating to employment or discrimination in employment or otherwise.
Notwithstanding the foregoing or any other provision hereof, nothing in this
Waiver and Release of Claims shall adversely affect (i) my rights under the
Plan; (ii) my rights to benefits other than severance benefits under plans,
programs, and arrangements of the Company or any subsidiary or parent of the
Company which are accrued but unpaid as of the date of my termination; or
(iii) my rights to indemnification under any indemnification agreement,
applicable law and the certificates of incorporation and bylaws of the Company
and any subsidiary or parent of the Company, and my rights under any director’s
and officers’ liability insurance policy covering me.
I acknowledge that I have signed this Waiver and Release of Claims voluntarily,
knowingly, of my own free will and without reservation or duress and that no
promises or representations have been made to me by any person to induce me to
do so other than the promise of payment set forth in the first paragraph above
and the Company’s acknowledgement of my rights reserved under the second
paragraph above.

                 
Signature:
          Dated:    
 
               

 

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