Exhibit 10.7


 


ORIGINAL
FOR EXECUTION


APPROVED
VICE PRESIDENT HUMAN RESOURCES


EFFECTIVE JANUARY 1, 2005


 


CONOCOPHILLIPS


SUPPLEMENTAL EXECUTIVE RETIREMENT PLAN


 


PRE-AMERICAN JOBS CREATION ACT OF 2004 (“AJCA”)


GRANDFATHERED PROVISIONS


 


Benefits under this Plan,
formerly the Phillips Petroleum Company Supplemental Executive Retirement Plan,
(the “Phillips Plan”), that commenced prior to January 1, 2005 (“AJCA-grandfathered
benefits”), shall be subject exclusively to the terms and conditions of the
Phillips Plan in effect or before October 3, 2004. No change in the
ConocoPhillips Retirement Plan adopted subsequent to such date and no change in
the Phillips Plan or in the ConocoPhillips Supplemental Executive Retirement
Plan adopted after such date shall apply to an AJCA-grandfathered benefit. Provided,
however, for purposes of this paragraph, benefits shall be deemed to have
commenced prior to January 1, 2005 and shall be AJCA-grandfathered benefits if
the relevant corporate officer or committee approved the eligible employee’s
petition regarding time and form of payment before January 1, 2005 even if the
benefit commenced after December 31, 2004. The “relevant corporate officer or
committee” means the person or persons with the authority under the Phillips
Plan to approve a petition regarding the time and form of payment.


 


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SECTION I -
PURPOSE


 


The purpose of the ConocoPhillips
Supplemental Executive Retirement Plan (“Plan”) is to supplement the retirement
benefits of Retiring eligible employees who were hired in mid- career. ConocoPhillips
Company (“Company”) recognizes that from time to time, it retains the services
of employee(s) after the employee has performed services at another company (or
companies) for varying periods of time, in order to obtain the special skills
and expertise developed by the key employee during these other periods of
employment. These employees generally forego all or a portion of their
potential retirement benefits upon leaving their previous employer(s). This
Plan, therefore, supplements retirement benefits to at least partially
compensate for the loss of retirement benefits accrued at the previous
employer(s). The amount of supplemental benefit payable under this Plan is not
intended to cause a Retiring eligible employee’s retirement benefit to equal or
exceed a full career Retiring eligible employee’s benefit.


 


SECTION II - DEFINITION OF TERMS


 


	
  a)

  	
  Affiliated
  Group

  	
   

  	
  shall mean
  the Company plus other subsidiaries and affiliates in which it owns a 5% or
  more equity interest.

  
	
   

  	
   

  	
   

  	
   

  
	
  b)

  	
  Retirement
  Income Plan

  	
   

  	
  is Title I
  of the ConocoPhillips Retirement Plan (Phillips Retirement Income Plan).

  
	
   

  	
   

  	
   

  	
   

  
	
  c)

  	
  Retirement
  (or Retire, or Retiring)

  	
   

  	
  is
  termination of employment with the Company on or after the employee’s
  earliest early retirement date as defined in the Retirement Income Plan. It
  includes termination of employment

  



 


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  at an age
  below 55 only when Section V applies.

  
	
   

  	
   

  	
   

  	
   

  
	
  d)

  	
  Credited
  Service, Final Average Earnings, Normal Retirement Date, and Early Retirement
  Date

  	
   

  	
  as
  determined in accordance with the provisions of the Retirement Income Plan.

  
	
   

  	
   

  	
   

  	
   

  
	
  e)

  	
  Total Final
  Average Earnings

  	
   

  	
  is the
  average of the high 3 earnings, excluding Incentive Compensation Plan Awards,
  paid in consecutive years of the last 10 years prior to termination of
  employment plus the average of the high 3 Incentive Compensation Plan Awards
  for any of such last 10 years under the Incentive Compensation Plan, whether
  paid or deferred and shall include the value of any special awards specified
  by the Compensation Committee to be included for final average earnings
  purposes under the terms of the special awards when granted by the
  Compensation Committee, and shall also recognize benefits paid under Section
  4.2 of the Phillips Petroleum Company Executive Severance Plan in the same
  manner as layoff pay is recognized under the Retirement Income Plan.

  
	
   

  	
   

  	
   

  	
   

  
	
  f)

  	
  Total
  Credited Service

  	
   

  	
  is an
  employee’s Credited Service plus any additional months of service as
  calculated under the Principal Corporate Officers Supplemental Retirement
  Plan and Missed Credited Service as defined in sub-section (j) of Section II
  of Article I in the Retirement Income Plan, plus months of service by recognizing
  benefits paid under Section 4.2 of the Phillips Petroleum Company Executive
  Severance Plan in the same manner as layoff pay is recognized under the
  Retirement Income Plan.

  
	
   

  	
   

  	
   

  	
   

  
	
  g)

  	
  Plan
  Administrator

  	
   

  	
  means the
  person who is the highest level officer of the Company with primary
  responsibility for human

  



 


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  resources,
  or such person’s successor.

  
	
   

  	
   

  	
   

  	
   

  
	
  h)

  	
  Trustee

  	
   

  	
  means the
  trustee of the grantor trust established by the Trust Agreement between the
  Company and Wachovia Bank, N. A. dated as of June 1, 1998, or any successor
  trustee.

  
	
   

  	
   

  	
   

  	
   

  
	
  i)

  	
  Participating
  Subsidiary

  	
   

  	
  means a
  subsidiary of the Company, of which the Company beneficially owns, directly
  or indirectly, more than 50% of the aggregate voting power of all outstanding
  classes and series of stock, where such subsidiary has adopted one or more
  plans making participants eligible for participation in this Plan.

  



 


SECTION III - ELIGIBLE EMPLOYEES


 


All employees of the Company
who are participants in the Retirement Income Plan and who, a) as of November
1, 1988 participated in the Incentive Compensation Plan as members of Teams I,
II, III (including those individuals promoted to such levels through November
1, 1988, ie: Grade 33 or above and ICP eligible), or b) were active employee
participants or were eligible to participate in the Key Employee Death
Protection Plan on the date of its termination (December 31, 1986), c) are
hired subsequent to November 1, 1988 and at the time of hire are recommended for
participation in the Plan by the Plan Administrator, with approval by the Chief
Executive Officer of the Company, or d) prior to retirement are recommended for
participation in the Plan by the Plan Administrator, with approval by the Chief
Executive Officer of the Company, will be eligible for benefits under this
Plan.


 


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SECTION IV - ELIGIBILITY FOR BENEFITS


 


An eligible employee as
described in Section III, will be eligible to receive the benefit amount described
in Section VI only if the results of (a) below exceed the results of (b) below
where:


 


(a)         is the lesser of the
following percentages;


 


(i)            2.4% times the greater
of the eligible employee’s Credited Service or the Employee’s Total Credited
Service at the time of Retirement; or


 


(ii)           the Maximum SERP
Benefit Percentage shown in the schedule below based upon the eligible employee’s
attained age at Retirement


 


and,      (b)           is
the percentage derived by multiplying 1.6% times the eligible employee’s Total
Credited Service at the time of Retirement.


 




	
  Attained

  	
   

  	
   

  	
   

  
	
  Age at

  	
   

  	
  Maximum SERP

  	
   

  
	
  Retirement

  	
   

  	
  Benefit Percentage

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  65

  	
   

  	
  60.0

  	
  %

  
	
  64

  	
   

  	
  58.4

  	
  %

  
	
  63

  	
   

  	
  56.8

  	
  %

  
	
  62

  	
   

  	
  55.2

  	
  %

  
	
  61

  	
   

  	
  53.6

  	
  %

  
	
  60

  	
   

  	
  52.0

  	
  %

  
	
  59

  	
   

  	
  50.4

  	
  %

  
	
  58

  	
   

  	
  48.8

  	
  %

  
	
  57

  	
   

  	
  47.2

  	
  %

  
	
  56

  	
   

  	
  45.6

  	
  %

  
	
  55

  	
   

  	
  44.0

  	
  %

  
	
  54 or younger

  	
   

  	
  -0-

  	
   

  






 


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SECTION V - SPECIAL ELIGIBILITY


 


An eligible employee as
described in Section III who is less than age 55 and who is laid off under the
Layoff Plan of Phillips Petroleum Company and/or the Supplemental Layoff Plan
of Phillips Petroleum Company and/or the Enhanced Supplemental Layoff Pay Plan
of Phillips Petroleum Company and/or the Phillips Layoff Plan and/or the Work
Force Stabilization Plan of Phillips Petroleum Company and/or who receives
benefits under the Phillips Petroleum Company Executive Severance Plan or any
similar plans which may be adopted by the Company from time to time and any
employee who becomes employed by a member of the Affiliated Group, other than
the Company or a Participating Subsidiary, immediately after terminating
employment with the Company or a Participating Subsidiary, will be eligible to
receive the benefit described in Section VI if the results of (a) below exceed
the results of (b) below where:


 


(a)         is the lesser of the
following percentages;


 


(i)            2.4% times the greater
of an eligible employee’s Credited Service, or the employee’s Total Credited
Service at the time of layoff or termination; or


 


(ii)           the Maximum SERP
Benefit Percentage shown in the schedule below based upon the eligible employee’s
attained age at the time of layoff or termination.


 


and,      (b)           is
the percentage derived by multiplying 1.6% times the eligible employee’s Total
Credited Service at the time of layoff or termination.


 


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  Attained Age

  	
   

  	
   

  	
   

  
	
  at the time

  	
   

  	
  Maximum SERP

  	
   

  
	
  of Layoff

  	
   

  	
  Benefit Percentage

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  54

  	
   

  	
  42.4

  	
  %

  
	
  53

  	
   

  	
  40.8

  	
  %

  
	
  52

  	
   

  	
  39.2

  	
  %

  
	
  51

  	
   

  	
  37.6

  	
  %

  
	
  50

  	
   

  	
  36.0

  	
  %

  
	
  49

  	
   

  	
  34.4

  	
  %

  
	
  48

  	
   

  	
  32.8

  	
  %

  
	
  47

  	
   

  	
  31.2

  	
  %

  
	
  46

  	
   

  	
  29.6

  	
  %

  
	
  45

  	
   

  	
  28.0

  	
  %

  
	
  44

  	
   

  	
  26.4

  	
  %

  
	
  43

  	
   

  	
  24.8

  	
  %

  
	
  42

  	
   

  	
  23.2

  	
  %

  
	
  41

  	
   

  	
  21.6

  	
  %

  
	
  40

  	
   

  	
  20.0

  	
  %

  
	
  39

  	
   

  	
  18.4

  	
  %

  
	
  38

  	
   

  	
  16.8

  	
  %

  
	
  37

  	
   

  	
  15.2

  	
  %

  
	
  36

  	
   

  	
  13.6

  	
  %

  
	
  35

  	
   

  	
  12.0

  	
  %

  
	
  34

  	
   

  	
  10.4

  	
  %

  
	
  33

  	
   

  	
  8.8

  	
  %

  
	
  32

  	
   

  	
  7.2

  	
  %

  
	
  31

  	
   

  	
  5.6

  	
  %

  
	
  30

  	
   

  	
  4.0

  	
  %

  
	
  29

  	
   

  	
  2.4

  	
  %

  
	
  28

  	
   

  	
  0.8

  	
  %

  






 


SECTION VI - BENEFIT AMOUNT


 


Notwithstanding anything to the
contrary in this Section VI, and subject to the AJCA Grandfather Provisions of
this Plan, the rules for calculating an eligible employee’s benefit will be applied
consistently with good faith compliance with section 409A of the Internal
Revenue Code of 1986 as amended; and any provisions of this Plan to the
contrary will be disregarded. An eligible employee who qualifies for benefits
under this Plan in accordance with Sections IV and V will be eligible to
receive retirement benefits from the Plan as follows:


 


A.         With respect to eligible
employees who commence retirement benefits on or after their Normal Retirement
Date - 


 


7

















 


multiply the lesser of (a)(i) or (a) (ii) as computed in Sections IV or
V, as applicable, times the greater of the employee’s Final Average Earnings or
the employee’s Total Final Average Earnings and with the results reduced by the
portion of the eligible employee’s Primary Social Security benefit as
determined in the same manner as such reduction is determined under the Final
Average Earnings formula of the Retirement Income Plan.


 


B.          With respect to eligible
employees who commence retirement benefits at an Early Retirement Date -
benefits will be calculated in the same manner as the benefits for Normal Retirement
Date, as described in A. of this Section, but reduced for early retirement in
the same manner as is applicable under the Retirement Income Plan.


 


In either A. or B. above the
Retirement Income Plan calculations shall be made as if no benefit limitations
were imposed by the Internal Revenue Code and no benefit reductions resulted
from participation in any qualified or non-qualified Company-sponsored benefit
plan, and the resulting benefit amount will be reduced by applicable retirement
benefit payments for which the retiree is eligible from any of the following
plans, or any other similar plan or plans, of the Company or any of its
subsidiary or affiliated companies; Retirement Income Plan, Retirement
Restoration Plan of Phillips Petroleum Company, Key Employee Deferred
Compensation Plan of Phillips Petroleum Company, the Retirement Makeup Plan of


 


8

















 


Phillips Petroleum Company,
Principal Corporate Officers Supplemental Retirement Plan of Phillips Petroleum
Company, the Phillips Petroleum Company Key Employee Death Protection Plan, the
Key Employee Supplemental Retirement Plan and the Key Employee Missed Credited
Service Retirement Plan.


 


SECTION VII - PAYMENT OF RETIREMENT BENEFITS


 


Subject to the AJCA Grandfather
provisions of the Plan, payment of benefits to eligible employees shall be as
follows:


 


A.         The
rules for payment of benefits to eligible employees listed on Schedule A
attached to this plan (“Schedule A Employees”) shall be as follows:


 


(1)         The
benefit shall be paid as a straight life annuity for the life of the Schedule A
Employee commencing in December, 2005, or if later, six months after Separation
from Service. The Plan shall pay simple interest at a rate of 3% per annum on
each delayed payment from the annuity starting date to December 1, 2005.


 


(2)         Provided,
however, notwithstanding subsection A.(1), (i) a Schedule A Employee who is
married may, on or before December 1, 2005, elect, in writing, to receive a 50%
joint and survivor annuity with the spouse as survivor commencing in December,
2005, with the rules regarding interest being as described in subsection (1)
above; and


 


9

















 


(ii) Any Schedule A Employee may elect on or before December 1, 2005,
to cancel, in writing, participation in this Plan in which case the Schedule A
Employee shall receive the present value of his entire accrued benefit under
this Plan on or before December 31, 2005.


 


B.          Benefits
that commence under this Plan after 2005 for an eligible employee who is not a
Schedule A Employee shall be paid in a lump sum the later of the first day of
the first calendar month after the day the employee becomes age 55 (or, if the
Retirement Income Plan treats the Employee as turning age 55 before that birth
date, on the day he is treated as being age 55)  or the first day of the seventh calendar month
after Separation from Service as that term is defined in section 409A of the
Internal Revenue Code and regulatory guidance thereunder(excluding death) but
in no event before November 1, 2006. If the applicable commencement date is the
first day of the seventh calendar month after Separation from Service, the Plan
shall pay simple interest at the 6 month T-Bill rate (as determined by the Plan
Administrator) in effect as of the annuity starting date. Such interest shall
be paid from the annuity starting date used in calculating the benefit under
this Plan to the commencement date.


 


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SECTION VIII - METHOD OF PROVIDING BENEFITS


 


This Plan shall be unfunded. All
benefits shall be provided solely from the general assets of the Company and
any rights accruing to an eligible employee under the Plan shall be those of a
general creditor; provided, however, that the Company may establish a grantor
trust to satisfy part or all of its Plan payment obligations so long as the
plan remains unfunded for purposes of Title I of ERISA.


 


SECTION IX - MISCELLANEOUS PROVISIONS


 


(a)         No right or interest of
an eligible employee under this Plan shall be assignable or transferable, in
whole or in part, directly or indirectly, by operation of law or otherwise
(excluding devolution upon death or mental incompetency).


 


(b)        Any claim for benefits
hereunder shall be presented in writing to the Plan Administrator for
consideration, grant or denial. In the event that a claim is denied in whole or
in part by the Plan Administrator, the claimant, within ninety days of receipt
of said claim by the Plan Administrator, shall receive written notice of denial.
Such notice shall contain:


 


(1)              a statement of the
specific reason or reasons for the denial;


 


(2)              specific references
to the pertinent provisions hereunder on which such denial is based;


 


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


 


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(4)              an explanation of
the following claims review procedure set forth in paragraph (c) below.


 


(c)         Any claimant who feels
that a claim has been improperly denied in whole or in part by the Plan
Administrator may request a review of the denial by making written application
to the Trustee. The claimant shall have the right to review all pertinent
documents relating to said claim and to submit issues and comments in writing
to the Trustee. Any person filing an appeal from the denial of a claim must do
so in writing within sixty days after receipt of written notice of denial. The
Trustee shall render a decision regarding the claim within sixty days after
receipt of a request for review, unless special circumstances require an
extension of time for processing, in which case a decision shall be rendered
within a reasonable time, but not later than 120 days after receipt of the
request for review. The decision of the Trustee shall be in writing and, in the
case of the denial of a claim in whole or in part, shall set forth the same
information as is required in an initial notice of denial by the Plan Administrator,
other than an explanation of this claims review procedure. The Trustee shall
have absolute discretion in carrying out its responsibilities to make its
decision of an appeal, including the authority to interpret and construe the
terms hereunder, and all interpretations, findings of fact, and the decision of


 


12

















 


the Trustee regarding the appeal shall be final, conclusive and binding
on all parties.


 


(d)        Compliance with the
procedures described in paragraphs (b) and (c) shall be a condition precedent
to the filing of any action to obtain any benefit or enforce any right which
any individual may claim hereunder. Notwithstanding anything to the contrary in
this Plan, these paragraphs (b), (c) and (d) may not be amended without the
written consent of a seventy-five percent (75%) majority of Participants and
Beneficiaries and such paragraphs shall survive the termination of this Plan
until all benefits accrued hereunder have been paid.


 


(e)         The Chief Executive
Officer, may amend or terminate this Plan at any time if, in his or her sole
judgment such amendment or termination is deemed desirable. However, such
amendments may not increase the benefits payable hereunder to any Officer of
the Company who is also currently a Director of the Company.


 


(f)         No amount accrued or payable hereunder
shall be deemed to be a portion of an eligible employee’s compensation or
earnings for the purpose of any other employee benefit plan adopted or
maintained by the Company, nor shall this Plan be deemed to amend or modify the
provisions of the Retirement Income Plan.


 


(g)        Participation or
nonparticipation in this Plan shall not affect any eligible employee’s
employment status, or confer any special rights other than those expressly
stated in the Plan.


 


(h)        Except as otherwise
provided herein, the Plan shall be binding upon the Company, its successors and
assigns, including but not


 


13

















 


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.


 


(i)          The 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.


 


SECTION X - EFFECTIVE DATE


 


This Plan became effective
January 1, 1987. This amendment and restatement of the Plan became effective
January 1, 2005.


 


 


CONOCOPHILLIPS


 


 


	
  By:

  	
  /s/ Carin S. Knickel

  	
   

  	
  Dated:

  	
  December 20, 2005

  	
   

  	
   

  	
   

  
	
   

  	
  Carin S.
  Knickel

  	
   

  
	
   

  	
  Vice
  President, Human Resources

  
									



 


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