Exhibit 10.10




 





 


 


RELATIVE PERFORMANCE VALUE PLAN


 


OF


 


CHEVRON PHILLIPS CHEMICAL COMPANY LLC


 


(Effective January 1, 2006)




 





 


 

















 


RELATIVE PERFORMANCE VALUE PLAN


OF


CHEVRON PHILLIPS CHEMICAL COMPANY LLC


(Effective January 1, 2006)


 


TABLE OF CONTENTS


 


	
   

  	
   

  	
  Page

  
	
   

  	
   

  	
   

  
	
  1.

  	
  Interpretation
  and Definitions

  	
  1

  
	
  2.

  	
  Administration
  of Plan

  	
  6

  
	
  3.

  	
  Eligibility and
  Participation

  	
  7

  
	
  4.

  	
  Grants and
  Settlement of Awards

  	
  8

  
	
  5.

  	
  Deferral of
  Awards

  	
  9

  
	
  6.

  	
  Vesting and
  Forfeiture

  	
  9

  
	
  7.

  	
  Amendments or
  Discontinuance

  	
  10

  
	
  8.

  	
  Recapitalization,
  Merger, and Consolidation

  	
  11

  
	
  9.

  	
  General
  Provisions

  	
  11

  
	
   

  	
  Exhibit A “Peer
  Companies”

  	
  13

  
	
   

  	
  Exhibit B “Award
  Calculation Example”

  	
  14

  



 


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RELATIVE PERFORMANCE VALUE PLAN


OF


CHEVRON PHILLIPS CHEMICAL COMPANY LLC


Effective January 1, 2006


 


PURPOSE


 


The purpose of this
Relative Performance Value Plan of Chevron Phillips Chemical Company LLC (the “Plan”)
is to attract, motivate, and retain qualified management personnel by providing
to them a long-term incentive compensation plan that will provide competitive
compensation opportunities similar to those of comparable companies in the
chemical industry, align the interests of key management with the interests of
the Company’s owners, and encourage the creation of additional owner value.


 


The Plan is intended to
be a “bonus program” within the meaning of Labor Reg. § 2510.3-2(c) and,
therefore, is not intended to be subject to the requirements of ERISA.  It is also intended that the Plan comply with
the requirements of Section 409A of the Internal Revenue Code, as added by
The American Jobs Creation Act of 2004 (“Section 409A”).


 


The Plan shall be
effective as of January 1, 2006.


 


1.                                      Interpretation
and Definitions


 


(a)                                  General.


 


(1)                                  Interpretation.  Unless a clear contrary intention appears,
for purposes of construction of this Plan and all related Plan Documents:


 


(i)                                     the
singular number includes the plural number and vice versa;


 


(ii)                                  reference
to any person includes such person’s successors and assigns but, if applicable,
only if such successors and assigns are permitted by the Plan Documents, and
reference to a person in a particular capacity excludes such person in any
other capacity or individually;


 


(iii)                               reference to any gender
includes the other gender;


 


(iv)                              reference
to any Plan Document or any other agreement, document or instrument means the
applicable Plan Document or such other agreement, document or instrument as
amended or modified and in effect from time to time in accordance with the
terms thereof;


 


(v)                                 reference
to any law means such law as amended, modified, codified, replaced or
reenacted, in whole or in part, and in effect from time to time, including rules and
regulations promulgated thereunder, and reference to any section or other
provision of any law means that provision


 


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of
such law from time to time in effect and constituting the substantive
amendment, modification, codification, replacement or reenactment of such section or
other provision;


 


(vi)                              reference
in any Plan Document to any article, section, appendix, schedule or
exhibit means such article or section thereof or appendix, schedule or
exhibit thereto;


 


(vii)                           “hereunder”,
“hereof”, and words of similar import shall be deemed references to a Plan
Document as a whole and not to any particular article, section or other
provision thereof;


 


(viii)                        “including”
(and with the correlative meaning “include”) means including without limiting
the generality of any description preceding such term;


 


(ix)                                “or”
is not exclusive;


 


(x)                                   relative
to the determination of any period of time, “from” means “from and including”
and “to” means “to but excluding;” and


 


(xi)                                references
to days, weeks, months, quarters and years are references to such periods as
determined by the Gregorian calendar.


 


(2)                                  Accounting Terms.  In
each Plan Document, unless expressly otherwise provided, accounting terms shall
be construed and interpreted, and accounting determinations and computations
shall be made, in accordance with generally accepted accounting principles.


 


(3)                                  Conflict in Plan Documents. 
If there is any conflict between any two or more Plan Documents, such
Plan Documents shall be interpreted and construed, if possible, so as to avoid
or minimize such conflict but, to the extent (and only to the extent) of such
conflict, the Plan Document dealing most specifically with the matter as to
which there is a conflict shall prevail and control.  If it cannot be determined which Plan
Document deals most specifically with a matter as to which there is a conflict
then the Plan shall prevail and control.


 


(b)                                 Definitions


 


(1)                                  “Board”
means the Board of Directors of the Company.


 


(2)                                  “Capital
Charge” means the economic cost of the Total Assets used in the operations of
the Company, as determined by the Committee from time to time.


 


(3)                                  “Chem
Systems Leader” means reports provided by Nexant Company or other relevant
third party data that review chemical industry performance in various areas


 


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such
as cash cost margins and cash cost return on investment. The chemical industry
may use this data to illustrate their performance compared to the performance
of the rest of the chemical industry, and to identify top performance in the
industry.


 


(4)                                  “Chevron”
means Chevron Corporation, or such entity as may be controlled by Chevron
Corporation, that directly or indirectly holds a membership interest in the
Company.


 


(5)                                  “Committee”
means the Compensation Committee of the Board.


 


(6)                                  “Company”
means Chevron Phillips Chemical Company LLC and any successor entity.


 


(7)                                  “ConocoPhillips”
means ConocoPhillips, or such entity as may be controlled by ConocoPhillips,
that directly or indirectly holds a membership interest in the Company.


 


(8)                                  “Date
of Grant” means the effective date on which a Relative Performance Value Award
is granted to a Participant.


 


(9)                                  “Date
of Termination” means the date on which a Participant ceases to be an Employee.


 


(10)                            “Deferred
Compensation Plan” means the Chevron Phillips Chemical Company LP Executive
Deferred Compensation Plan.


 


(11)                            “Disability”
means the Participant is eligible for, and is continuously receiving disability
insurance benefits under the Social Security Act or the Participating Employer’s
long-term disability plan.


 


(12)                            “EBITDA”
means earnings before interest, taxes, depreciation, and amortization as
reported in the financial records of the Company, or the financial records of
any other company, or segment thereof, against whom the performance of the
Company is being compared.


 


(13)                            “Effective
Date” means, for purposes of this Plan, January 1, 2006.


 


(14)                            “Eligible
Employee” means any regular, full time Employee (including an Employee who is
also a director or an officer) who is a pay grade 93 or above.  Notwithstanding anything contained in the
Plan to the contrary, any person who, pursuant to a written contract with a
Participating Employer that provides that he is an independent contractor and
not an Employee, shall be excluded from the definition of Eligible Employee and
shall not be eligible to participate in the Plan during the period such written
contract is in effect regardless of such person’s reclassification as an
Employee for such period by the Internal Revenue Service for tax withholding
purposes.  If, during any period, a
Participating Employer has not treated an individual as an Employee and,


 


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for
that reason, has not withheld employment taxes with respect to that individual,
then that individual shall not be an Eligible Employee for that period, even in
the event that the individual is determined, retroactively, to have been an
Employee during all or any portion of that period.


 


(15)                            “Employee”
means any employee of a Participating Employer.


 


(16)                            “ERISA”
means the Employee Retirement Income Security Act of 1974, as amended.


 


(17)                            “EVA”
or “Economic Value Added” means EBITDA minus any Capital Charge.


 


(18)                            “Geographic
Differences” means the impact of the location of various assets owned by a Peer
Company that cause differences in financial performance, such as assets owned
in the United States vs. assets owned in Europe, the Middle East, or other
areas.


 


(19)                            “Grant”
means the award of a Relative Performance Value Award, subject to such terms
and conditions as may be set forth in a Grant Agreement accompanying such
award.


 


(20)                            “Grant
Agreement” or “Agreement” means the agreement accompanying such Grant that sets
forth the Relative Performance Value Award target amount, the Share Ratio
underlying said target amount, the initial Market Value Per Share, Performance
Cycle, vesting, and other terms and conditions pertaining to that Grant as
established by the Committee.  All such
Grant Agreements may be entered into by the Company as agent for the
Participating Employers, and all Relative Performance Value Awards shall be and
remain the liability of the Participating Employer employing the Participant at
the time of such Grants.


 


(21)                            “Market
Value Per Share” means the closing price of each Parent Company’s common stock
on the applicable Valuation Date, as adjusted by the Committee in its sole
discretion, considering factors deemed relevant by the Committee, which may
include, but are not limited to, the dividend policies of the Parent Companies.


 


(22)                            “Parent
Company” means Chevron, ConocoPhillips, and their respective successors.


 


(23)                            “Participant”
means an Eligible Employee to whom a Relative Performance Value Award may be
granted pursuant to the Plan.


 


(24)                            “Participating
Employer” means the Company and any direct or indirect subsidiary entity of the
Company which, with the Company’s consent, has adopted the Plan.


 


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(25)                            “Peer
Companies” means those chemical companies, or chemical segments thereof,
identified in Exhibit A which may be amended from time to time by the
Committee in its discretion.


 


(26)                            “Performance
Cycle” means the continuous period as established in the respective Grant
Agreement during which a Relative Performance Value Award is earned by a Participant.


 


(27)                            “Plan”
means the Relative Performance Value Plan of Chevron Phillips Chemical Company
LLC.


 


(28)                            “Plan
Document” means this Plan, any Grant Agreement executed in respect of any
award, and any other document defining the rights and liabilities of any
Participant.


 


(29)                            “Relative
Performance” means any measure established by the Committee in its sole and
absolute discretion that compares the Company’s performance to a group of Peer
Companies. Relative Performance measures considered may include, but are not
limited to, EBITDA divided by Total Assets; comparison to Chem Systems Leader
or other relevant third party data; and/or EVA. 
The evaluation by the Committee may consider adjustments to normalize portfolio
and Geographic Differences and to account for special events.


 


(30)                            “Relative
Performance Value Award”, “RPVA” or “Award” means, unless modified by the
Committee pursuant to the authority granted to it herein, an award under the
Plan that rewards Participants for changes in the Company’s Relative
Performance compared to a group of Peer Companies.


 


(31)                            “Retirement”
means an Eligible Employee’s Termination of Service in connection with the
attainment of any applicable early retirement age or normal retirement age as
defined in (i) the Chevron Phillips Chemical Company LP Retirement Plan, (ii) any
retirement plan of any Participating Employer, or (iii) the retirement
plan of any Parent Company or any of its respective subsidiaries other than
Chevron Phillips Chemical Company LLC. A Participant whose Termination of
Service occurs while eligible to retire under any of such plans, but who does
not elect to immediately commence the receipt of benefits thereunder, shall
nevertheless be deemed to have retired under such plan for purposes of this Plan.


 


(32)                            “Share
Ratio” means the number of hypothetical shares of each ConocoPhillips and
Chevron common shares underlying each Relative Performance Value Award target
amount as determined by the Committee. 
Such Share Ratio is generally established to provide that one-half of
the opportunity inherent in the Grant is based on the value of common stock of
each Parent Company, considering factors deemed relevant by the Committee,
which may include but are not limited to, dividend policies of each Parent Company.  Share Ratios are fixed over the Performance
Cycle of any individual Grant, but may vary among Grants occurring on different
dates.


 


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Notwithstanding the foregoing, the Committee retains
the authority to adjust the Share Ratio for active Performance Cycles in a
manner it deems appropriate to account for capital restructurings or other
similar transactions involving the common shares of the Parent Company.


 


(33)                            “Termination
of Service” occurs when a Participant ceases to serve as an Employee for any
reason.


 


(34)                            “Total
Assets” means the sum of current and long-term assets owned by a company.


 


(35)                            “Valuation
Date” means:


 


(i)                                     for
purposes of determining the Market Value Per Share at the beginning of any
Performance Cycle, the last New York Stock Exchange trading day in December for
the year immediately preceding said Performance Cycle; and


 


(ii)                                  for
purposes of determining the Market Value Per Share at the end of any
Performance Cycle, the last New York Stock Exchange trading day in December for
the last year of said Performance Cycle.


 


2.                                      Administration
of the Plan


 


(a)                                  The
Plan shall be administered by the Committee.


 


(b)                                 Notwithstanding
any other provision of the Plan, the Plan shall be interpreted, operated and
administered in a manner consistent with Section 409A.


 


(c)                                  The
Committee may establish, from time to time and at any time, subject to the
limitations of the Plan as set forth herein, such rules and regulations
and amendments and supplements thereto, as it deems necessary to comply with
applicable law and for the proper administration of the Plan.


 


(d)                                 The
Committee’s interpretation and construction of the provisions of the Plan and rules and
regulations adopted by the Committee shall be final.  No member of the Committee or the Board shall
be liable for any action taken, or determination made, in respect of the Plan
in good faith.


 


(e)                                  The
members of the Committee may retain counsel, employ agents, and provide for
such clerical, accounting and consulting services as they may require in
carrying out the provisions of the Plan; and may allocate among themselves or
delegate to other persons all or such portion of their duties under the Plan as
they in their sole discretion, shall decide. 
Each member of the Committee and each member of the Board shall be fully
justified in relying upon or acting in good faith upon any opinion, report, or
information furnished in connection with the Plan by any accountant, counsel,
or other


 


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specialist so retained (including financial officers
of the Company, whether or not such persons are Participants in the Plan).


 


(f)                                    This
Plan may be adopted by such subsidiary entities of the Company as the Board or
Committee may approve, whereupon such entities shall become Participating
Employers.


 


(g)                                 The
Committee shall periodically evaluate the effectiveness of the Plan in meeting
the purposes for which the Plan was adopted. Subject to the limitations and
requirements of Section 7 and Section 409A, the Committee, based on
such an evaluation, may in its sole and absolute discretion, add a new optional
form of Grant, eliminate an optional form of Grant, modify the terms of an
existing form of Grant, or offer one form of Grant in exchange for an existing
Grant made to a Participant for a Performance Cycle.  Any exchange of an existing Grant for a new
Grant under the Plan shall be for good and valuable consideration and subject
to consent of the Participant and the provisions of Section 7 and Section 409A.


 


3.                                      Eligibility
and Participation


 


(a)                                  The
Committee, upon its own action, may grant, but shall not be required to grant,
Relative Performance Value Awards to any Eligible Employee.  Grants may be made by the Committee at any
time and from time to time to new Eligible Employees, or to then Eligible
Employees, or to a greater or lesser number of Eligible Employees, and may
include or exclude previous Participants, as the Committee shall determine.


 


(b)                                 If,
during a Performance Cycle, a regular, full time Employee is promoted to a pay
grade of 93 or above, the Employee becomes eligible to participate in the
Plan.  If the Eligible Employee is
otherwise selected by the Committee to participate in the Plan, the Eligible
Employee will receive a Grant of a Relative Value Performance Award for the
most recent, active Performance Cycle. Such Award will be prorated for the
period which begins on the date of promotion and ends as of the end of the
applicable Performance Cycle. If, during a Performance Cycle, an individual is
hired in a pay grade of 93 or above, the Employee becomes eligible to
participate in the Plan.  If the Eligible
Employee is otherwise selected by the Committee to participate in the Plan, the
Eligible Employee will receive a Grant of a Relative Value Performance Award
for the most recent, active Performance Cycle. Such Award will be pro-rated for
the period which begins on the date of hire and ends as of the end of the
applicable Performance Cycle. 
Notwithstanding the foregoing, when an individual is hired in a pay
grade of 93 or above, the CEO will have the authority to give prorated Awards
for all active Performance Cycles when required for competitive reasons.  In the event a Participant is demoted to a
pay grade lower than 90, outstanding Relative Performance Value Awards will be
prorated for all active Performance Cycles to which such outstanding Awards
apply.  For this purpose, the proration
period will begin as of the Date of Grant for each applicable Award and will
end on the effective date of the Participant’s demotion. Outstanding Relative
Performance Value Awards will not be subject to such proration in the event the
Participant is demoted to a pay grade lower than 93; provided such demotion is
not below 90.  At the end of the
applicable Performance Cycle, the value of


 


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said
prorated Relative Performance Value Awards, as determined in accordance with Section 4,
shall be deferred to Participant’s Deferred Compensation Plan account in
accordance with Section 5.


 


4.                                      Grants and
Settlement of Awards


 


(a)                                  Each
Grant shall be evidenced by a Grant Agreement executed by the Participant in
such form and with such terms and conditions, as the Committee may from time to
time determine. The rights of a Participant with respect to any Grant shall at
all times be subject to the terms and conditions set forth in the Grant
Agreement relating thereto and in the Plan Documents. Except as required by
this Plan, different Grants need not contain terms or conditions similar to any
Grant made prior thereto or contemporaneously therewith.  The Committee’s determinations under the Plan
(including determinations of which Eligible Employees, if any, are to receive
Grants, the form, amount and timing of such Grants, the terms and provisions of
such Grants and the agreements evidencing same) need not be uniform and may be
made by it selectively among Eligible Employees who receive, or are eligible to
receive, Grants under the Plan.


 


(b)                                 Each
Performance Cycle, subject to the other limitations set forth in the Plan, may
extend for a period of up to three (3) years from the Date of Grant.  The length of each Performance Cycle shall be
determined by the Committee; provided, however, if no term is established by
the Committee the term of the Performance Cycle shall be three (3) years
from the Date of Grant.


 


(c)                                  At
the beginning of each Performance Cycle, the Committee shall establish the
Participant’s Relative Performance Value Award target amount. The Committee
shall also determine the (1) Share Ratio underlying such Relative
Performance Value Award target amount based upon the Market Value Per Share
established by the Committee at the beginning of said Performance Cycle; and (2) the
Relative Performance measures for the Performance Cycle, at the beginning of
said Performance Cycle. Moreover, the RPVA target amounts, applicable Share
Ratio, and the Relative Performance measures shall be set forth in writing
within ninety (90) days of the beginning of each Performance Cycle.


 


Notwithstanding anything in the Plan to the contrary,
in no event shall any RPVA be awarded to any Participant for a Performance
Cycle if the Award is not based on the Company’s favorable performance as
compared with the group of Peer Companies.


 


(d)                                 At
the end of each Performance Cycle, the Committee shall evaluate the Company’s
Relative Performance in comparison to the group of Peer Companies to establish
what percentage of the Share Ratio will be used as a basis for calculating the
Participant’s Relative Performance Value Award. 
The percentage may range from 0% to 200%.


 


(e)                                  At
the end of each Performance Cycle, the Committee shall also establish a Market
Value Per Share which shall be applied to the Share Ratio, as adjusted pursuant
to Section 4(d), to determine the Participant’s Relative Performance Value
Award. Any


 


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Relative
Performance Value Award may be further adjusted as a result of the application
of the provisions in Section 4(f) or by the Committee in its sole and
absolute discretion either in individual cases or in the aggregate.  An example of a Relative Performance Value
Award determination is set forth, for illustration purposes only, in Exhibit B.


 


(f)                                    Notwithstanding
anything contained in this Plan document to the contrary, in the event that any
Participant engages in any activity which the Committee judges to be
detrimental to any Participating Employer, or otherwise fails to perform his
obligations as a regular, full time Employee, the Committee may cancel or
reduce the Participant’s Relative Performance Value Award in whole or in part
at any time prior to the date said RPVA is deferred to the Participant’s
Deferred Compensation Plan account, as more particularly described in Section 5.


 


5.                                      Deferral
of Awards


 


(a)                                  Upon
final determination by the Committee of a Participant’s right to receive a
Relative Performance Value Award, the amount of said RPVA shall be
automatically deferred to the Participant’s Deferred Compensation Plan account
attributable to Relative Performance Value Awards.  Deferrals shall occur on May 10 of the
year following the end of the Performance Cycle; provided, however that if a
deferral date occurs on a Saturday, Sunday or bank holiday, the deferral will
be made the next following business day.


 


(b)                                 The
rules and procedures governing the Deferred Compensation Plan shall govern
and be binding upon the Participants. In addition, deferral and distribution
elections shall be made in accordance with Section 409A and the terms of
the Deferred Compensation Plan. 
Specifically, irrevocable elections by Participants of the time and form
of payment of the RPVA paid under the Deferred Compensation Plan shall be made
no later than the date that is six (6) months before the end of the
applicable Performance Cycle in accordance with the Proposed Treasury
Regulation section 1.409A-2(a)(7) and subsequent guidance.


 


6.                                      Vesting
and Forfeiture


 


(a)                                  Except
as provided in the Plan Document, upon a Participant’s Termination of Service,
the Participant’s outstanding Grants of Relative Value Performance Awards and
all rights thereunder shall terminate on the Date of Termination; provided,
however, that in the case of a Participant’s Termination of Service due to
Retirement, transfer to a Parent Company, Disability or death, the Participant
shall be entitled, with respect to each Grant still outstanding, to a prorated
Relative Performance Value Award for the period beginning as of the Date of
Grant for each respective Relative Performance Value Award and ending on the
Date of Termination.  At the end of
applicable Performance Cycle, the amount of said prorated Relative Performance
Value Award shall be deferred to Participant’s Deferred Compensation Plan
account as described in Section 5.


 


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(b)                                 Except
as provided in the Plan Document or the Deferred Compensation Plan, a
Participant will be vested in his Deferred Compensation Plan account
attributable to Relative Performance Value Award deferrals (and deemed earnings
and losses thereon) only upon Participant’s Date of Termination resulting from
Termination of Service due to Retirement, layoff, transfer to a Parent Company,
Disability or death.  If a Participant
terminates employment with the Participating Employer for any reason other than
Retirement, layoff, transfer to a Parent Company, Disability or death, then the
Participant shall forfeit the entire portion of the Participant’s Deferred
Compensation Plan account attributable to Relative Performance Value Award
deferrals (and deemed earnings and losses thereon).


 


Notwithstanding the foregoing, any Eligible Employee
who is a Participant in the Plan as of January 1, 2006 will be vested in
his Deferred Compensation Plan account attributable to Relative Performance
Value Award deferrals (and deemed earnings and losses thereon) upon his Date of
Termination without regard to the cause of the Termination of Service.


 


(c)                                  Notwithstanding
the foregoing, in the event a Participant takes a leave of absence from the
Participating Employer for personal reasons or as a result of entry into the
Armed Forces of the United States, or terminates employment for reasons which,
in the judgment of the Committee, are deemed to be special circumstances, the Committee
may consider such circumstances and may take such action (to the extent
consistent with Section 409A) in respect of the Participant’s (1) related
outstanding Grants as it may deem appropriate under the circumstances,
including extending the rights of a Participant to continue participation in
the Plan beyond his Date of Termination; provided in no event may participation
be extended beyond the term of the Performance Cycle; or (2) vesting
rights related to his Deferred Compensation Plan account attributable to the
Relative Performance Value Award deferrals (and deemed earnings and losses
thereon), including extending vesting rights to the Participant upon his Date
of Termination with respect to said account.


 


7.                                      Amendment or
Discontinuance


 


Subject to the limitations set forth in this Section 7,
the Board may at any time and from time to time, without the consent of the
Participants, alter, amend, revise, suspend, or discontinue the Plan in whole
or in part.  Any such amendment shall, to
the extent deemed necessary or advisable by the Committee, be applicable to any
outstanding Grants theretofore awarded under the Plan, notwithstanding any
contrary provisions contained in any Grant Agreement.  In the event of any such amendment to the
Plan, the holder of any Grant outstanding under the Plan shall, upon request of
the Committee and as a condition to the exercisability thereof, execute a
conforming amendment in the form prescribed by the Committee to any Grant
Agreement relating thereto. 
Notwithstanding anything contained in this Plan to the contrary, unless
required by law, no action contemplated or permitted by this Section 7
shall adversely affect any rights of Participants or obligations of the
Participating Employer to Participants with respect to any award theretofore
granted under the Plan without the consent of the affected Participant.


 


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8.                                      Recapitalization,
Merger, and Consolidation


 


The existence of this Plan and the awards granted
hereunder shall not affect in any way the right or power of the Company or
those entities holding membership interests in the Company to make or authorize
any or all adjustments, reorganizations, or other changes in the Company’s
capital structure and its business, or any merger or consolidation of the
Company, or the dissolution or liquidation of the Company, or any sale or
transfer of all or part of its assets or business, or any other corporate act
or proceeding, whether of a similar character or otherwise.


 


9.                                      General
Provisions


 


(a)                                  Relative
Value Performance Awards shall be nontransferable and nonassignable, except
that any such Grant may be transferred (1) to such beneficiary as the
Participant may designate in the event of death, Disability or other
incapacity, or (2) by testamentary instrument or by the laws of descent
and distribution. The Committee shall prescribe the form and manner in which
beneficiary designations shall be made, revoked or amended. Any valid
beneficiary designation on file with the Company shall take priority over any
conflicting provision of any testamentary or similar instrument.


 


(b)                                 The
establishment of the Plan shall not confer any legal rights upon any Employee
or other person to continued employment, nor shall it interfere with the right
of any Participating Employer (which right is hereby reserved) to discharge any
Employee and to treat him without regard to the effect which that treatment might
have upon him as a Participant or potential
Participant.


 


(c)                                  Neither
the adoption of this Plan nor any action of the Board or the Committee shall be
deemed to give any person any right to be granted an award or any other rights
except as may be evidenced by a Grant Agreement, or any amendment thereto, duly
authorized by the Committee and executed on behalf of the Company, and then
only to the extent and upon the terms and conditions expressly set forth
therein.


 


(d)                                 The
Company shall have the right to deduct from all amounts hereunder paid in cash,
any federal, state, local, or other taxes required by law to be withheld with
respect to such payments.


 


(e)                                  THE
VALIDITY, CONSTRUCTION AND EFFECT OF THE PLAN, ANY PLAN DOCUMENTS, AND ANY
ACTIONS TAKEN OR RELATING TO THE PLAN SHALL BE DETERMINED IN ACCORDANCE WITH
THE LAWS OF THE STATE OF TEXAS APPLICABLE TO CONTRACTS MADE AND TO BE PERFORMED
WITHIN SUCH STATE.


 


(f)                                    The
Company will require any successor (whether direct or indirect, by purchase,
merger, consolidation or otherwise) to all or substantially all of the business
and/or assets of the Company, expressly to assume and agree to perform the
Company’s obligations


 


11

















 


under this Plan in the same manner and to the same
extent that the Company would be required to perform them if no such succession
had taken place.


 


(g)                                 The
Plan shall be unfunded. Neither the Company, any Participating Employer, the
Committee, nor the Board shall be required to segregate any assets or secure
any liability that may at any time be represented by Grants made pursuant to
the Plan.


 


(h)                                 The
Plan shall have a term of ten (10) years from its Effective Date.  After termination of the Plan, no future
Grants may be made, but Grants made before that date will continue to be
effective in accordance the terms and conditions of the respective Grant
Agreement.


 


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EXHIBIT A


 


PEER COMPANIES


 


The
following companies, or the chemicals segments thereof, shall be the initial
comparator companies for purposes of Performance Awards:


 


1.                                       The
Dow Chemical Company


 


2.                                       Borealis
(polyolefins & chemicals segment)


 


3.                                       NOVA
Chemicals Corporation


 


4.                                       Lyondell
(chemical segment)


 


5.                                       ExxonMobil
Corporation (chemicals segment)


 


6.                                       BP,
p.l.c. (chemicals segment)


 


7.                                       Royal
Dutch/Shell Group (chemicals segment)


 


Chem
Systems Data or other relevant third-party data may also be used to determine
relative performance.


 


THIS EXHIBIT A
MAY BE MODIFIED FROM TIME TO TIME BY THE COMMITTEE IN ITS SOLE AND
ABSOLUTE DISCRETION.


 


13

















 


EXHIBIT B


AWARD CALCULATION EXAMPLE


 


Assume that Participant’s
RPVA target amount for a Performance Cycle is $100,000, and the Market Value
Per Share for common stock of each Parent Company as determined by the
Committee at the beginning of the Performance Cycle is $51.98 for Chevron stock
and $53.51 for COP stock.


 


The Share Ratio for the
RPVA target amount, as determined by the following formula, is 962 shares of
Chevron stock and 934 shares of COP stock.


 


	
  COP Share Ratio Allocation =

  	
  .5 x RVPA Target/COP
  MVPS

  
	
  {In this example:

  	
  .5
  x 100,000/$53.51}

  
	
   

  
	
  CVX  Share
  Ratio Allocation=

  	
  .5 x RVPA
  Target/CVX MVPS

  
	
  {In this example:

  	
  .5
  x 100,000/$51.98}

  
				



 


Where,


 


RVPA Target is the RPVA target amount for
the Performance Cycle;


 


COP MVPS is the Market Value Per Share for
COP stock at the beginning of the Performance Cycle; and


 


CVX MVPS is the Market Value Per Share for
Chevron stock at the beginning of the Performance Cycle.


 


Assume that at the
end of the Performance Cycle, based upon the Company’s Relative Performance
during the Performance Cycle, the Committee awards the Participants 110% of the
Share Ratios underlying their RPVA target amount, as determined above.  Further assume that at the end of the
Performance Cycle, the Market Value Per Share for Chevron stock is $77.00 and
the Market Value Per Share for COP stock is $67.00.  In this example, the Participant’s Relative
Value Performance Award will equal $150,275, as calculated in accordance with
the following formula:


 


RVPA = [(COP Share
Ratio Allocation x RP%) x MVPS1)] + [(CVX Share Ratio Allocation x
RP%) x CVX MVPS1)],


 


{In this example:  [(934 x 110%) x $67] + [(962 x 110%) x $77]}


 


Where


 


COP Share Ratio Allocation and CVX Share Ratio Allocation are defined
above;


 


RP% is the percentage to be applied to the
Participants’ Share Ratios based upon Committee’s determination of the Company’s
Relative Performance;


 


COP MVPS1 is the Market Value
Per Share for COP stock at the end of the Performance Cycle; and


 


CVX MVPS1 is the Market Value
Per Share for Chevron stock at the end of the Performance Cycle.


 


14

















 


AMENDMENT NUMBER ONE

TO THE

RELATIVE PERFORMANCE VALUE PLAN OF

CHEVRON PHILLIPS CHEMICAL
COMPANY LLC


 


WHEREAS, effective January 1, 2006, Chevron
Phillips Chemical Company LLC (the “Company”) established the Relative Performance
Value Plan of Chevron Phillips Chemical Company LLC (the “Plan”);


 


WHEREAS, pursuant to Section 7 of the Plan,
the Company reserves the right at any time and from time to time to amend the
Plan in whole or in part;


 


NOW, THEREFORE, BE IT RESOLVED,


 


1.             Effective January 1, 2006, paragraphs (a) and
(b) of Section 6 are amended in their entirety as follows:


 


(a)                                  If
a Participant becomes Disabled or has a Termination of Service due to Retirement,
transfer to a Parent Company, or death, the Participant shall be entitled, with
respect to each Grant still outstanding, to a prorated Relative Performance
Value Award for the period beginning as of the Date of Grant for each
respective Relative Performance Value Award and ending when the Participant is
placed on Disability or on the Participant’s Date of Termination, as
applicable. If a Participant terminates employment for any reason other than
Retirement, transfer to a Parent Company, or death, then the Participant’s
outstanding Grants of Relative Performance Value Awards and all rights
thereunder shall be forfeited.


 


(b)                                 A
Participant shall be vested in his Deferred Compensation Plan account
attributable to Relative Performance Value Award deferrals (and deemed earnings
and losses thereon) only upon the Participant’s Disability or on the
Participant’s Date of Termination resulting from Termination of Service due to
Retirement, layoff, transfer to a Parent Company, or death.  If a Participant terminates employment for
any reason other than Retirement, layoff, transfer to a Parent Company, or
death, then the Participant shall forfeit the entire portion of the
Participant’s Deferred Compensation Plan account  attributable to Relative Performance Value
Award deferrals (and deemed earnings and losses thereon).


 


Notwithstanding the foregoing, any Participant who is
a Participant in the Plan  as of January
1, 2006 will become vested in the entire portion of his Deferred Compensation
account attributable to Relative Performance Value Award deferrals (and deemed
earning and losses thereon) on the Participant’s Date of Termination, without
regard to the cause of his Termination of Service.


 

















 


2.             Effective January
1, 2006, paragraph (a) of Section 9 is amended in its entirety as follows:


 


(a)                             Except
as otherwise expressly provided in the Deferred Compensation Plan, Relative
Value Performance Awards 


shall be
nontransferable and nonassignable.


 


 


IN WITNESS WHEREOF, Chevron Phillips Chemical
Company LLC has caused this Amendment Number One to be executed this 24 day of
February, 2006.


 


 


	
   

  	
  CHEVRON PHILLIPS CHEMICAL

  COMPANY LLC

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ James L. Gallogly

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  Its:

  	
  President
  and Chief Executive Officer