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                                                                    EXHIBIT 10.2

                              EMPLOYMENT AGREEMENT

                          (EXECUTED NOVEMBER 18, 2001)
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                               TABLE OF CONTENTS

<Table>
<Caption>
                                                                   PAGE
                                                                   ----
<S>  <C>                                                           <C>
 1.  Employment Period...........................................     1
 2.  Terms of Employment.........................................     1
 3.  Termination of Employment...................................     4
 4.  Obligations of the Company upon Termination.................     6
 5.  Non-Exclusivity of Rights...................................    10
 6.  Full Settlement; Resolution of Disputes.....................    10
 7.  Certain Additional Payments by the Company..................    10
 8.  Confidential Information....................................    13
 9.  Change of Control...........................................    13
10.  Successors..................................................    16
11.  Miscellaneous...............................................    16
</Table>

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                              EMPLOYMENT AGREEMENT

     This AGREEMENT (the "Agreement"), by and between CorvettePorsche Corp., a
Delaware Corporation ("New Parent"), Conoco Inc., a Delaware corporation (the
"Company"), and Archie W. Dunham (the "Executive"), is dated as of the 18 day of
November, 2001, and is to be effective as of the date of the consummation of the
transactions (collectively, the "Merger") contemplated by the Agreement and Plan
of Merger dated as of November 18, 2001, by and among Phillips Petroleum
Company, a Delaware corporation ("Phillips"), New Parent, Porsche Merger Corp.,
a Delaware corporation and wholly owned subsidiary of New Parent, Corvette
Merger Corp., a Delaware corporation and wholly owned subsidiary of New Parent,
and the Company ("the Merger Agreement") as of the same time as the consummation
of the Merger (the "Agreement Effective Date").

     The Company and the Executive entered into an Employment Agreement
effective as of August 17, 1999, and as amended and restated as of October 19,
2000 (the "Prior Employment Agreement") pursuant to authorization by the Board
of Directors of the Company (the "Company Board") to provide the Executive with
substantial incentives to continue to serve the Company as Chairman of the
Company Board, President and Chief Executive Officer and a member of the Company
Board performing at the highest level of leadership and stewardship, without
distraction or concern over compensation, benefits or tenure, to manage the
Company's future growth and development, and to maximize the returns to the
Company's stockholders.

     As the Merger will constitute a "Change of Control" under the Prior
Employment Agreement and the election of another individual as Chief Executive
Officer constitutes "Good Reason" under the Prior Employment Agreement, either
of which events triggers the Executive's right to terminate his employment and
receive certain compensation and benefits, and in consideration of the
Executive's entering into this Agreement, which results in substantial
modifications of the terms and conditions of the Executive's continuing
relationship with the Company, the parties agree that in lieu of the
compensation and benefits provided under the Prior Employment Agreement,
promptly following the Agreement Effective Date the Executive shall receive the
compensation and benefits set forth in Annex B, determined as of the Agreement
Effective Date without regard to any services performed or compensation earned
following the Agreement Effective Date.

     NOW, THEREFORE, IT IS HEREBY AGREED AS FOLLOWS:

          1.  Employment Period.  As of the Agreement Effective Date, the
     Company hereby agrees to continue to employ the Executive, and the
     Executive hereby agrees to accept employment with the Company, in
     accordance with, and subject to, the terms and provisions of this
     Agreement, for the period commencing on the Agreement Effective Date and
     ending on the date that is the later of (i) October 1, 2004 and (ii) the
     second anniversary of the Agreement Effective Date. As used herein, the
     term "Employment Period" means the period commencing on the Agreement
     Effective Date and ending on the date that is the later of (i) October 1,
     2004 and (ii) the second anniversary of the Agreement Effective Date.

          2.  Terms of Employment.

          (a) Position and Duties.

             (i) During the Employment Period, (i) the Executive shall be a
        senior executive employee of New Parent and a member and Chairman of the
        Board of Directors of New Parent (the "New Parent Board") and Chairman
        of the Executive Committee of the New Parent Board, and (ii) the
        Executive's services shall be performed at New Parent's headquarters in
        the Houston, Texas metropolitan area. During the Employment Period: the
        Executive shall preside at meetings of the New Parent Board and of New
        Parent's shareholders; shall work with the Chief Executive Officer of
        New Parent (the "CEO" or "Chief Executive Officer") on external
        stakeholder relations (community, state, federal and foreign
        governments), business development (growth) initiatives, and the
        creation of an outstanding and cohesive New Parent Board; and shall have
        such other executive responsibilities as he and the CEO may agree. While
        the Executive is

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        Chairman of the New Parent Board, the Executive and the CEO shall
        jointly recommend to the New Parent Board the long-range strategic plan
        for New Parent, major acquisitions and divestitures, and major changes
        to New Parent's capital structure, and with respect to all other
        matters, the CEO shall, in consultation with the Executive, arrange the
        agenda for meetings of the New Parent Board, and shall report to the New
        Parent Board and arrange for other executives and advisors to report to
        the New Parent Board. At the conclusion of the Employment Period, the
        Executive shall retire from employment with New Parent and as Chairman
        of the New Parent Board but shall remain a member of the New Parent
        Board, a member of the Executive Committee of the New Parent Board and
        Chairman of the Committee on Directors' Affairs until his 70th birthday
        (or earlier retirement from such positions), subject to being
        periodically re-elected to the New Parent Board by New Parent's
        shareholders; provided, that he shall be proposed for such re-election
        whenever his then current term as a member of the New Parent Board is
        set to expire before his 70th birthday. The duties and responsibilities
        of the Executive may not be terminated or diminished during the
        Employment Period other than pursuant to the affirmative vote of at
        least two-thirds of the members of the New Parent Board (the "Required
        Board Majority").

             (ii) During the Employment Period, excluding any periods of
        vacation and sick leave to which the Executive is entitled, the
        Executive agrees to devote reasonable attention and time during normal
        business hours to the business and affairs of the Company and, to the
        extent necessary to discharge the responsibilities assigned to the
        Executive hereunder, to use the Executive's reasonable best efforts to
        perform faithfully and efficiently such responsibilities. During the
        Employment Period, it shall not be a violation of this Agreement for the
        Executive to (A) serve on corporate, civic or charitable boards or
        committees, (B) deliver lectures, fulfill speaking engagements or teach
        at educational institutions and (C) manage personal investments. It is
        expressly understood and agreed that to the extent that any such
        activities have been conducted by the Executive prior to the Agreement
        Effective Date, the continued conduct of such activities (or the conduct
        of activities similar in nature and scope thereto) subsequent to the
        Agreement Effective Date shall not thereafter be deemed to interfere
        with the performance of the Executive's responsibilities to the Company.

          (b) Compensation.  During the Employment Period, Executive's
     compensation and benefits shall be, both in the aggregate and with respect
     to each element of compensation and benefits, the same as the Chief
     Executive Officer. However, with respect to employee benefit plans,
     programs and practices that were in effect prior to the Agreement Effective
     Date for individuals who were salaried United States Company employees
     (including senior executives) prior to the Agreement Effective Date (the
     "Company Prior Arrangements"), participation by Executive in such programs
     after the Agreement Effective Date, even if such arrangements provide
     lesser benefits than those analogous arrangements provided the Chief
     Executive Officer, shall satisfy any requirement in this Agreement that
     Executive participate in, or be covered by, such an arrangement, but only
     if (i) the analogous arrangements provided to the Chief Executive Officer
     were in effect prior to the Agreement Effective Date ("Phillips Prior
     Arrangements"), (ii) to the extent either of the Company Prior Arrangements
     or Phillips Prior Arrangements are modified, both are similarly modified
     and (iii) each of such arrangements continue to cover the applicable of
     Company or Phillips United States salaried employees (including senior
     executives) generally in the same manner as immediately prior to the
     Agreement Effective Date. Notwithstanding any other provision of this
     Agreement, neither the Executive's compensation and benefits set forth on
     Annex B nor the Chief Executive Officer's Special Grants (as defined in the
     Employment Agreement dated as of November 18, 2001 among New Parent,
     Phillips and James J. Mulva) shall be taken into account in determining the
     comparability of the compensation and benefits of the Executive to the
     Chief Executive Officer.

             (i) Base Salary.  Commencing on the Agreement Effective Date,
        during the Employment Period, the Executive shall receive an annual base
        salary of not less than his annual base salary as in effect immediately
        prior to the Agreement Effective Date ("Annual Base Salary"), which

                                        2
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        shall be paid in accordance with the Company's regular payroll
        practices. Commencing on the January 1 following the Agreement Effective
        Date, and thereafter during the Employment Period, the Annual Base
        Salary shall be reviewed at least annually and shall be increased at any
        time and from time to time as shall be substantially consistent with
        competitive industry practice but in no event less than increases
        consistent with increases in base salary generally awarded in the
        ordinary course of business to the Chief Executive Officer, taking into
        account the Executive's unique position with the Company and in no event
        shall Annual Base Salary be less than that applicable to the Chief
        Executive Officer. Any increase in Annual Base Salary shall not serve to
        limit or reduce any other obligation to the Executive under this
        Agreement. Annual Base Salary shall not be reduced after any such
        increase, and the term "Annual Base Salary," as utilized in this
        Agreement, shall refer to Annual Base Salary as so increased.

             (ii) Annual Bonus.  In addition to Annual Base Salary, the
        Executive shall be awarded, for each fiscal year or portion thereof
        during the Employment Period, an Annual Bonus opportunity (the "Annual
        Bonus") in an amount substantially consistent with competitive industry
        practice, prorated for any period consisting of less than 12 full
        months. The Annual Bonus shall not be less than the annual bonus paid to
        the Chief Executive Officer for the same fiscal year or portion thereof.

             (iii) Incentive, Savings and Retirement Plans.  During the
        Employment Period, the Executive shall be entitled to participate in all
        incentive, savings and retirement plans that are tax-qualified under
        Section 401(a) of the Internal Revenue Code of 1986, as amended
        ("Code"), and in all plans that are supplemental to any such
        tax-qualified plans, in each case to the extent that such plans are
        applicable generally to other executives of the Company, but in no event
        shall such plans provide the Executive with incentive opportunities
        (measured with respect to both regular and special incentive
        opportunities, to the extent, if any, that such distinction is
        applicable), savings opportunities and retirement benefit opportunities
        that are, in each case, less favorable to the Executive, in the
        aggregate, than the most favorable plans of the Company. As used in this
        Agreement, the term "most favorable" shall, when used with reference to
        any plans, practices, policies or programs of the Company, be deemed to
        refer to the plans, practices, policies or programs of the Company, as
        in effect at any time during the Employment Period and provided
        generally to the Chief Executive Officer or to other executives of the
        Company, that are most favorable to the Executive.

             (iv) Welfare Benefit Plans.  During the Employment Period, the
        Executive and/or the Executive's family, as the case may be, shall be
        eligible for participation in and shall receive all benefits under all
        welfare benefit plans, practices, policies and programs provided by the
        Company (including, without limitation, medical, prescription, dental,
        vision, disability, salary continuance, group life and supplemental
        group life, accidental death and travel accident insurance plans and
        programs) to the extent applicable generally to other executives of the
        Company, but in no event shall such plans, practices, policies and
        programs provide the Executive with benefits that are less favorable, in
        the aggregate, than the most favorable such plans, practices, policies
        and programs of the Company.

             (v) Expenses.  During the Employment Period, the Executive shall be
        entitled to receive prompt reimbursement for all reasonable expenses
        incurred by the Executive in accordance with the most favorable
        policies, practices and procedures of the Company.

             (vi) Fringe Benefits and Perquisites.  During the Employment
        Period, the Executive shall be entitled to fringe benefits and
        perquisites in accordance with the most favorable plans, practices,
        programs and policies of the Company.

             (vii) Office and Support Staff.  During the Employment Period, the
        Executive shall be entitled to an office or offices of a size and with
        furnishings and other appointments at least equal to the most favorable
        of the foregoing provided to the Executive by the Company at any time
        during the Employment Period, and to secretarial and other assistance to
        the extent needed to

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        fulfill his corporate responsibilities at least equal to the most
        favorable of the foregoing provided to the Executive by the Company at
        any time during the Employment Period.

             (viii) Vacation.  During the Employment Period, the Executive shall
        be entitled to paid vacation in accordance with the most favorable
        plans, policies, programs and practices of the Company.

             (ix) Long-Term Incentive Compensation.  In addition to Base Salary,
        Annual Bonus and other elements of compensation described in Section
        2(b) or otherwise in this Agreement, during the Employment Period, the
        Executive periodically shall be awarded incentive compensation awards,
        which may consist of, among other things, stock options, stock
        appreciation rights, restricted stock, stock units or performance
        awards, having in the aggregate target values consistent with each of
        (A) the Executive's position and (B) competitive industry practice. Such
        incentive compensation awards shall be substantially the same, both in
        amount, exercise, strike or base price (if applicable) and other terms
        and conditions, as those awarded to the Chief Executive Officer.

             (x) Financial and Tax Planning.  During the Employment Period, the
        Executive shall be entitled to reimbursement of (A) reasonable expenses
        incurred with respect to preparation of his personal income tax returns
        and (B) reasonable costs of financial counseling (in either case,
        including a complete gross up for any taxes incurred by the Executive as
        a result of such reimbursement). Such reimbursement shall be
        substantially the same, both in scope and other terms and conditions, as
        those made available to the Chief Executive Officer.

             (xi) Life Insurance.  During the Employment Period, the Company
        shall provide the Executive with term life insurance in an amount equal
        to the Executive's Annual Base Salary multiplied by four, which
        insurance may be provided through one or more group policies and/or the
        purchase of an individual policy, as well as a complete gross up for any
        taxes incurred by the Executive as a result of such insurance coverage.
        The Executive agrees to submit to physical examinations as reasonably
        requested by the Company for purposes of obtaining such insurance. Such
        coverage shall be substantially the same, both in scope and other terms
        and conditions, as made available to the Chief Executive Officer.

     Notwithstanding the foregoing provisions of this Section 2(b), prior to a
     Change of Control, the Company may reduce or modify amounts and benefits
     described in this Section 2(b) to the extent that such changes are
     applicable to all of the Company's senior executives, including the Chief
     Executive Officer.

          3.  Termination of Employment.

          (a) Death or Disability.  The Executive's employment shall terminate
     automatically upon the Executive's death during the Employment Period. If
     the Required Board Majority determines in good faith that a Disability of
     the Executive has occurred during the Employment Period, it may give to the
     Executive written notice in accordance with Section 11(d) of this Agreement
     of its intention to terminate the Executive's employment. In such event,
     the Executive's employment with the Company shall terminate effective on
     the later of (i) the date the Executive would otherwise be placed on
     permanent disability status under the Company's disability programs for
     United States salaried employees and (ii) the 30th day after receipt of
     such notice by the Executive, provided that, within the 30 days after such
     receipt, the Executive shall not have returned to full-time performance of
     the Executive's duties (such later date being the "Disability Effective
     Date"). For purposes of this Agreement, "Disability" shall mean the absence
     of the Executive from the Executive's duties with the Company on a
     full-time basis for 180 consecutive business days as a result of incapacity
     due to mental or physical illness or injury which is determined to be total
     and permanent by a physician selected by the Company or its insurers and
     acceptable to the Executive or the Executive's legal representative (such
     agreement as to acceptability not to be withheld unreasonably).

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          (b) Cause.  The Company, acting pursuant to a resolution adopted by
     the Required Board Majority, may terminate the Executive's employment
     during the Employment Period with or without Cause. For purposes of this
     Agreement, "Cause" shall mean the Company's termination pursuant to a
     resolution adopted by the Required Board Majority of the Executive's
     employment for any of the following: (i) the Executive's final conviction
     of a felony crime against the Company involving moral turpitude or (ii) the
     Executive's deliberate and intentional continuing failure to substantially
     perform his duties and responsibilities hereunder (except by reason of the
     Executive's incapacity due to physical or mental illness or injury) for a
     period of 45 days after the Required Board Majority has delivered to the
     Executive a written demand for substantial performance hereunder which
     specifically identifies the bases for the Required Board Majority's
     determination that the Executive has not substantially performed his duties
     and responsibilities hereunder (that 45-day period being the "Grace
     Period"); provided, that for purposes of this clause (ii), the Company
     shall not have Cause to terminate the Executive's employment unless (A) at
     a meeting of the New Parent Board called and held following the Grace
     Period in the city in which the Company's principal executive offices are
     located, of which the Executive was given not less than 10 days' prior
     written notice and at which the Executive was afforded the opportunity to
     be represented by counsel, to appear and to be heard, the Required Board
     Majority shall adopt a written resolution that (1) sets forth the Required
     Board Majority's determination that the failure of the Executive to
     substantially perform his duties and responsibilities hereunder has (except
     by reason of his incapacity due to physical or mental illness or injury)
     continued past the Grace Period and (2) specifically identifies the bases
     for that determination, and (B) the Company, at the written direction of
     the Required Board Majority, shall deliver to the Executive a Notice of
     Termination for Cause to which a copy of that resolution, certified as
     being true and correct by the secretary or any assistant secretary of the
     Company, is attached.

          (c) Good Reason.  The Executive's employment may be terminated during
     the Employment Period by the Executive for Good Reason. For purposes of
     this Agreement, "Good Reason" shall mean:

             (i) the assignment to the Executive of any duties inconsistent in
        any respect with the Executive's position (including status, offices,
        titles and reporting requirements), authority, duties or
        responsibilities as contemplated by Section 2 of this Agreement, or any
        other action by the Company which results in a diminution in such
        position, authority, duties or responsibilities (whether or not
        occurring solely as a result of the Company ceasing to be a publicly
        traded entity or becoming a subsidiary of a publicly traded entity),
        excluding for this purpose an isolated, insubstantial and inadvertent
        action not taken in bad faith that is remedied by the Company promptly
        after receipt of notice thereof given by the Executive;

             (ii) any failure by the Company to comply with any of the
        provisions of this Agreement not specifically addressed in parts (iii)
        through (vi) below, other than an isolated, insubstantial and
        inadvertent failure not occurring in bad faith that is remedied by the
        Company promptly after receipt of notice thereof given by the Executive;

             (iii) the Company's requiring the Executive to be based at any
        office outside the Houston, Texas metropolitan area;

             (iv) any purported termination by the Company of the Executive's
        employment otherwise than as expressly permitted by this Agreement;

             (v) the failure to continue the Executive as Chairman of the New
        Parent Board; or

             (vi) any failure by the Company to comply with and satisfy the
        requirements of Section 10 of this Agreement; provided that (A) the
        successor described in Section 10(c) has received, at least 10 days
        prior to the Date of Termination (as defined in subparagraph (f) below),
        written notice from the Company or the Executive of the requirements of
        such provision, and (B) such

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        failure to be in compliance with and satisfy the requirements of Section
        10 continues as of the Date of Termination.

     Anything in this Agreement to the contrary notwithstanding, if a Change of
     Control occurs and if the Executive's employment with the Company is
     terminated within one year prior to the date on which the Change of Control
     occurs, unless it is reasonably demonstrated by the Company that such
     termination of employment (x) was not at the request of a third party who
     has taken steps reasonably calculated to effect the Change of Control and
     (y) otherwise did not arise in connection with or anticipation of the
     Change of Control, then any such termination shall be deemed for Good
     Reason.

          (d) Other Termination by the Executive.  The Executive's employment
     (and status as a member of the New Parent Board) may be terminated
     voluntarily by the Executive at any time during the Employment Period and,
     if other than (i) at a time when the Executive is eligible to terminate his
     employment for Good Reason or (ii) by retirement on or after the last day
     of the Employment Period ("Retirement"), is referred to herein as an "Other
     Termination by the Executive." The Executive agrees not to cause
     termination of employment to occur within six months following a Change of
     Control, except by reason of a Retirement, for Good Reason or Disability.

          (e) Notice of Termination.  Any termination shall be communicated by
     Notice of Termination to the other party hereto given in accordance with
     Section 11(d) of this Agreement. The failure by the Executive or the
     Company to set forth in the Notice of Termination any fact or circumstance
     which contributes to a showing of Good Reason or Cause shall not waive any
     right of the Executive or the Company hereunder or preclude the Executive
     or the Company from asserting such fact or circumstance in enforcing the
     Executive's or the Company's rights hereunder.

          (f) Date of Termination.  For purposes of this Agreement, the term
     "Date of Termination" means (i) if the Executive's employment is terminated
     by the Company for Cause, by the Executive for Good Reason, or as an Other
     Termination by the Executive, the date of receipt of the Notice of
     Termination or any later date specified therein, as the case may be, (ii)
     if the Executive's employment is terminated by the Company other than for
     Cause or Disability, the Date of Termination shall be the date on which the
     Company notifies the Executive of such termination, (iii) if the
     Executive's employment is terminated by reason of death or Disability, the
     Date of Termination shall be the date of death of the Executive or the
     Disability Effective Date, as the case may be and (iv) if the Executive's
     employment is terminated at the expiration of the Employment Period as
     provided in Section 4(e), then the last day of the Employment Period.

          4.  Obligations of the Company upon Termination.

          (a) Good Reason; Other than for Cause or Death or Disability.  If,
     during the Employment Period, (x) the Company shall terminate the
     Executive's employment other than for Cause or death or Disability or (y)
     the Executive shall terminate employment for Good Reason:

             (i) the Company shall pay or provide to or in respect of the
        Executive the following amounts and benefits:

                A.  in a lump sum in cash, within 10 days after the Date of
           Termination, an amount equal to the sum of (1) the Executive's Annual
           Base Salary through the Date of Termination, (2) at the election of
           the Executive prior to the Date of Termination, any deferred
           compensation previously awarded to or earned by the Executive
           (together with any accrued interest or earnings thereon) and (3) any
           compensation for unused vacation time for which the Executive is
           eligible in accordance with the most favorable plans, policies,
           programs and practices of the Company, in each case to the extent not
           theretofore paid (the sum of the amounts described in clauses (1),
           (2) and (3) shall be hereinafter referred to as the "Accrued
           Obligation");

                B.  in a lump sum in cash, within 10 days after the Date of
           Termination, an amount equal to the product of (x) the Annual Bonus
           (excluding for this purpose any payments set

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           forth on Annex B) paid or awarded by the Company to or for the
           benefit of the Executive in respect of the fiscal year immediately
           preceding the Date of Termination and (y) a fraction, the numerator
           of which is the number of days in the current fiscal year through the
           Date of Termination and the denominator of which is 365;

                C.  in a lump sum in cash, undiscounted, within 10 days after
           the Date of Termination, an amount equal to the amount of Annual Base
           Salary that would have been paid to the Executive pursuant to this
           Agreement for the period (the "Remaining Employment Period")
           beginning on the Date of Termination and ending on the date that is
           the last day of the Employment Period (the "Final Expiration Date")
           if the Executive's employment had not been terminated plus the Annual
           Bonus that would have been paid or awarded to or for the benefit of
           the Executive during the Remaining Employment Period if the
           Executive's employment had not been terminated and if the amount of
           the Annual Bonus (excluding for this purpose any payments set forth
           on Annex B) for each fiscal year or portion thereof during such
           period were equal to the average of the two highest Annual Bonuses
           paid or awarded to or for the benefit of the Executive in respect of
           the three full fiscal years preceding the Date of Termination,
           prorated in the case of any period of less than a full fiscal year;

                D.  in a lump sum in cash, undiscounted, within 30 days after
           the Date of Termination, an amount equal to the economic equivalent
           of the benefits the Executive (and his dependents or beneficiaries)
           would have received or become entitled to under Section 2(b)(iii) of
           this Agreement for the Remaining Employment Period if the Executive's
           employment had not been terminated;

                E.  effective as of the Date of Termination, (1) if the
           Executive has not received a grant of stock options in respect of any
           calendar year during the Employment Period or the Remaining
           Employment Period, for each such calendar year, a stock option grant
           covering the same number of shares and on the same terms and
           conditions as the average of the prior stock option grants to the
           Executive for the three full fiscal years preceding the Date of
           Termination (excluding for this purpose any grant pursuant to Annex
           B), prorated in the case of any period of less than a full fiscal
           year, and (2) if the Executive has not received a grant of restricted
           stock and/or restricted stock units and/or other similar equity-based
           awards in respect of any calendar year during the Employment Period
           or the Remaining Employment Period, for each such calendar year, a
           grant covering the same number of shares and on the same terms and
           conditions as the average of the prior grants of such awards to the
           Executive for the three full fiscal years preceding the Date of
           Termination (excluding for this purpose any grant pursuant to Annex
           B), prorated in the case of any period of less than a full fiscal
           year; provided that any awards required by (1) or (2) shall be
           prorated based on the length of the Remaining Employment Period as
           compared to the customary terms of such awards for purposes of a
           recipient becoming entitled to full vesting in such award; and

                F.  effective as of the Date of Termination, (1) immediate
           vesting and exercisability of, and termination of any restrictions on
           sale or transfer (other than any such restriction arising by
           operation of law) with respect to, each and every stock option,
           restricted stock award, restricted stock unit award and other
           equity-based award and performance award that is outstanding as of
           the Date of Termination (including, without limitation, each of the
           foregoing granted pursuant to Section 4(a)(i)(E)) (each, a
           "Compensatory Award"), (2) the extension of the term during which
           each and every Compensatory Award may be exercised by the Executive
           until the earlier of (x) the first anniversary of the Date of
           Termination or (y) the date upon which the right to exercise any
           Compensatory Award would have expired if the Executive had continued
           to be employed by the Company under the terms of this Agreement until
           the Final Expiration Date and (3) if a Change of Control precedes or
           occurs within one year following the Date of Termination, at the sole
           election of

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           the Executive, in exchange for any or all Compensatory Awards that
           are either denominated in or payable in Common Stock (as defined in
           Section 9 hereof), an amount in cash equal to the excess of (x) the
           Highest Price Per Share over (y) the exercise or purchase price, if
           any, of such Compensatory Awards. As used herein, the term "Highest
           Price Per Share" shall mean the highest price per share that can be
           determined to have been paid or agreed to be paid for any share of
           Common Stock by a Covered Person (as defined below) at any time
           during the six-month period immediately preceding any Change of
           Control. As used herein, the term "Covered Person" shall mean any
           Person other than an Exempt Person (in each case as defined in
           Section 9 hereof) who (I) is the Beneficial Owner (as defined in
           Section 9 hereof) of 20% or more of the outstanding shares of Common
           Stock or 20% or more of the combined voting power of the outstanding
           Voting Stock (as defined in Section 9 hereof) of the Company at any
           time during the Employment Period, (II) is a Person who has any
           material involvement in proposing or effectuating the Change of
           Control (as defined in Section 9 hereof), (III) is an assignee of or
           has otherwise succeeded to any shares of Common Stock or Voting Stock
           of the Company which were at any time during the Employment Period
           "beneficially owned" (as defined in Section 9 hereof) by any Person
           identified in clause (I) or (II) of this definition, if such
           assignment or succession shall have occurred in the course of a
           privately negotiated transaction rather than an open market
           transaction, or (IV) is described in Section 3(c)(vi) hereof. For
           purposes of determining whether a Person is a Covered Person, the
           number of shares of Common Stock or Voting Stock of the Company
           deemed to be outstanding shall include shares of which the Person is
           deemed the Beneficial Owner, but shall not include any other shares
           which may be issuable pursuant to any agreement, arrangement or
           understanding, or upon exercise of conversion rights, warrants or
           options. In determining the Highest Price Per Share, the price paid
           or agreed to be paid by a Covered Person will be appropriately
           adjusted to take into account (W) distributions paid or payable in
           stock, (X) subdivisions of outstanding stock, (Y) combinations of
           shares of stock into a smaller number of shares and (Z) similar
           events.

             (ii) for the period extending until the later of (A) the third
        anniversary of the Date of Termination or (B) the date the Executive
        attains age 70, or such longer period as any plan, program, practice or
        policy may provide (the "Benefit Continuation Period"), the Company
        shall continue benefits to the Executive and/or the Executive's family
        at least equal to those which would have been provided to them in
        accordance with the most favorable plans, programs, practices and
        policies described in Sections 2(b)(iv) of this Agreement if the
        Executive's employment had not been terminated, provided that the
        obligation of the Company to provide these benefits shall cease upon the
        Executive's refusal to serve as a member of the New Parent Board. For
        purposes of determining eligibility of the Executive for retiree
        benefits pursuant to such plans, practices, programs and policies, the
        Executive shall be considered to have remained employed until the Final
        Expiration Date and to have retired on such date;

             (iii) for the Remaining Employment Period, to the extent not
        previously paid or provided, the Company shall timely pay or provide to
        the Executive and/or the Executive's family any other amounts or
        benefits required to be paid or provided, or which the Executive and/or
        the Executive's family is eligible to receive as of the Date of
        Termination, pursuant to this Agreement and under any plan, program,
        policy or practice or contract or agreement of the Company as in effect
        and applicable generally to other executives and their families on the
        Agreement Effective Date or, if more favorable to the Executive, as in
        effect generally thereafter and on or prior to the Date of Termination
        with respect to other executives of the Company and their families (such
        other amounts and benefits shall be hereinafter referred to as the
        "Other Benefits");

             (iv) upon the Executive's termination of employment described in
        Section 4(a), the Executive shall receive Post-Employment Compensation
        during the Benefit Continuation Period as described in Section 4(f); and

                                        8
<PAGE>

             (v) unless otherwise provided herein, until the Executive (or any
        family member or family entity assignee of the Executive) no longer
        holds any stock options granted by the Company to the Executive, the
        Company will provide to the Executive at no cost to the Executive
        (including a complete gross up for any taxes incurred by the Executive
        as a result of receiving such benefits), the benefits described in
        Sections 2(b)(x) and 2(b)(xi), but in no event beyond the date of death
        of the Executive.

          (b) Death or Disability.  If the Executive's employment is terminated
     by reason of the Executive's death or Disability during the Employment
     Period (regardless of whether a Change of Control has occurred), this
     Agreement shall terminate without further obligations to the Executive
     under this Agreement, other than the payment of Accrued Obligations, which
     shall be paid to the Executive, or the Executive's estate or beneficiary,
     as applicable, in a lump sum in cash within 30 days after the Date of
     Termination, and the provision of the Other Benefits.

          (c) Cause.  If the Executive's employment shall be terminated for
     Cause during the Employment Period, this Agreement shall terminate without
     further obligations to the Executive under this Agreement, other than the
     payment of the Accrued Obligations. In such case, all Accrued Obligations
     shall be paid to the Executive in a lump sum in cash within 30 days after
     the Date of Termination.

          (d) Other Termination by the Executive:  If an Other Termination by
     the Executive occurs during the Employment Period, this Agreement shall
     terminate without further obligations to the Executive under this
     Agreement, other than the payment of Accrued Obligations and the provision
     of the Other Benefits. In such case, all Accrued Obligations shall be paid
     to the Executive in a lump sum in cash within 30 days after the Date of
     Termination.

          (e) Expiration of Employment Period.  Notwithstanding any other
     provision of this Agreement, if the Executive remains employed until the
     expiration of the Employment Period, upon any termination of employment at
     or after such expiration, (i) the Executive shall be entitled to payment of
     the Accrued Obligation as described in Section 4(a)(i)(A) as though the
     termination of employment was a termination by the Executive with Good
     Reason and (ii) each and every Compensatory Award, as defined in Section
     4(a)(i)(F)(1), shall be immediately vested and exercisable, and any
     restrictions on sale or transfer (other than any such restrictions arising
     by operation of law) with respect to such awards shall lapse. Immediately
     upon such a termination, the Executive shall receive the Post-Employment
     Compensation as described in Section 4(f), provided that the obligation of
     Company to provide these benefits shall cease upon the Executive's refusal
     to serve as a member of the New Parent Board. It is contemplated by the
     parties that the Executive shall serve as a member of the New Parent Board
     during the Benefit Continuation Period.

          (f) Post-Employment Compensation.  As used herein, Post-Employment
     Compensation shall mean, during the Benefit Continuation Period:

             (i) continued participation in the Directors' Charitable Gift Plan;

             (ii) continued participation in the benefit plans described in
        Section 2(b)(iv);

             (iii) continued coverage under the comprehensive security program
        the Executive participated in pursuant to Section 11(b) during
        employment, in the same manner and providing the same level of security
        protection as in effect on the date of execution of this Agreement, and
        in any event on a basis no less favorable than the coverage provided to
        the Chief Executive Officer, including both company-provided air and
        ground transportation and home security protection and a complete gross
        up for any taxes incurred by the Executive as a result of such continued
        coverage, and

             (iv) continued participation in the Conoco Domestic Relocation
        Policy with respect to a single relocation, at the election of the
        Executive.

                                        9
<PAGE>

          5.  Non-Exclusivity of Rights.  Except as provided in Section 4 of
     this Agreement, nothing in this Agreement shall prevent or limit the
     Executive's continuing or future participation in any plan, program, policy
     or practice provided by the Company and for which the Executive may
     qualify, nor shall anything herein limit or otherwise affect such rights as
     the Executive may have under any contract or agreement with the Company.
     Amounts which are vested benefits or which the Executive is otherwise
     entitled to receive under any plan, policy, practice or program of, or any
     contract or agreement with, the Company at or subsequent to the Date of
     Termination shall be payable in accordance with such plan, policy, practice
     or program or contract or agreement except as such plan, policy, practice
     or program or contract or agreement is superseded by this Agreement.

          6.  Full Settlement; Resolution of Disputes.

          (a) The Company's obligation to make payments provided for in this
     Agreement and otherwise to perform its obligations hereunder shall not be
     affected by any set off, counterclaim, recoupment, defense, mitigation or
     other claim, right or action which the Company may have against the
     Executive or others. The Company agrees to pay promptly as incurred, to the
     fullest extent permitted by law, all legal fees and expenses that the
     Executive may reasonably incur as a result of any contest (regardless of
     the outcome thereof) by the Company, the Executive or others as to the
     validity or enforceability of, or liability under, any provision of this
     Agreement or any guarantee of performance thereof (including as a result of
     any contest by the Executive about the amount of any such payment pursuant
     to this Agreement) plus, in each case, interest on any delayed payment at
     the annual percentage rate which is three percentage points above the
     interest rate shown as the Prime Rate in the Money Rates column in the then
     most recently published edition of The Wall Street Journal (Southwest
     Edition), or, if such rate is not then so published on at least a weekly
     basis, the interest rate announced by Chase Bank Texas, N.A. (or its
     successor), from time to time, as its "Base Rate" (or prime lending rate),
     from the date those amounts were required to have been paid or reimbursed
     to the Executive until those amounts are finally and fully paid or
     reimbursed; provided, however, that in no event shall the amount of
     interest contracted for, charged or received hereunder exceed the maximum
     non-usurious amount of interest allowed by applicable law.

          (b) If there shall be any dispute between the Company and the
     Executive concerning (i) in the event of any termination of the Executive's
     employment by the Company, whether such termination was for Cause or
     Disability, (ii) in the event of any termination of employment by the
     Executive, whether Good Reason existed, (iii) whether termination occurred
     after expiration of the Employment Period or in contemplation of or
     following a Change of Control, (iv) the compensation or benefits to be
     provided in respect of any termination of the Executive's employment with
     the Company or as Post-Employment Compensation, or (v) the compensation and
     benefits to be provided to Executive as described in Annex B on or after
     the Agreement Effective Date, then, unless and until there is a final,
     nonappealable judgment by a court of competent jurisdiction declaring that
     such termination was for Cause or Disability or that the determination by
     the Executive of the existence of Good Reason was improper or that the
     termination did not occur in contemplation of or following a Change of
     Control or after expiration of the Employment Period, or that the Executive
     or the Executive's beneficiary or estate claimed improper benefits upon
     termination or as Post-Employment Compensation, the Company shall pay all
     amounts, and provide all benefits, to the Executive and/or the Executive's
     family or other beneficiaries, as the case may be, that the Company would
     be required to pay or provide pursuant to the applicable provisions of
     Section 4 hereof as though such termination were by the Company without
     Cause or in contemplation of or following a Change of Control or by the
     Executive with Good Reason or by either party after expiration of the
     Employment Period, or the benefits that the Executive or the Executive's
     beneficiary or estate claimed were properly payable hereunder.

     7.  Certain Additional Payments by the Company.

          (a) Anything in this Agreement to the contrary notwithstanding and
     except as set forth below, in the event it shall be determined that any
     Payment would be subject to the Excise Tax, then the

                                        10
<PAGE>

     Executive shall be entitled to receive an additional payment (the "Gross-Up
     Payment") in an amount such that, after payment by the Executive of all
     taxes (and any interest or penalties imposed with respect to such taxes),
     including, without limitation, any income and employment taxes (and any
     interest and penalties imposed with respect thereto) and Excise Tax imposed
     upon the Gross-Up Payment, the Executive retains an amount of the Gross-Up
     Payment equal to the Excise Tax imposed upon the Payments. The Company's
     obligation to make Gross-Up Payments under this Section 7 shall not be
     conditioned upon the Executive's termination of employment.

          (b) Subject to the provisions of Section 7(c), all determinations
     required to be made under this Section 7, including whether and when a
     Gross-Up Payment is required, the amount of such Gross-Up Payment and the
     assumptions to be utilized in arriving at such determination, shall be made
     by PricewaterhouseCoopers LLP or such other nationally recognized certified
     public accounting firm as may be designated by the Executive (the
     "Accounting Firm"). The Accounting Firm shall provide detailed supporting
     calculations both to the Company and the Executive within 15 business days
     of the receipt of notice from the Executive that there has been a Payment
     or such earlier time as is requested by the Company. In the event that the
     Accounting Firm is serving as accountant or auditor for the individual,
     entity or group effecting the Merger (as defined in the Merger Agreement)
     or the Change of Control, the Executive may appoint another nationally
     recognized accounting firm to make the determinations required hereunder
     (which accounting firm shall then be referred to as the Accounting Firm
     hereunder). The Accounting Firm shall not determine that no Excise Tax is
     payable by the Executive unless it delivers to the Executive a written
     opinion (the "Accounting Opinion") that failure to report the Excise Tax on
     the Executive's applicable federal income tax return would not result in
     the imposition of a negligence or similar penalty. All fees and expenses of
     the Accounting Firm shall be borne solely by the Company. Any Gross-Up
     Payment, as determined pursuant to this Section 7, shall be paid by the
     Company to the Executive within 5 days of the receipt of the Accounting
     Firm's determination. Any determination by the Accounting Firm shall be
     binding upon the Company and the Executive. As a result of the uncertainty
     in the application of Section 4999 of the Code at the time of the initial
     determination by the Accounting Firm hereunder, it is possible that
     Gross-Up Payments that will not have been made by the Company should have
     been made (the "Underpayment"), consistent with the calculations required
     to be made hereunder. In the event the Company exhausts its remedies
     pursuant to Section 7(c) and the Executive thereafter is required to make a
     payment of any Excise Tax, the Accounting Firm shall determine the amount
     of the Underpayment that has occurred and any such Underpayment shall be
     promptly paid by the Company to or for the benefit of the Executive.

          (c) The Executive shall notify the Company in writing of any claims by
     the Internal Revenue Service that, if successful, would require the payment
     by the Company of the Gross-Up Payment. Such notification shall be given as
     soon as practicable but no later than 30 days after the Executive actually
     receives notice in writing of such claim and shall apprise the Company of
     the nature of such claim and the date on which such claim is requested to
     be paid; provided, however, that the failure of the Executive to notify the
     Company of such claim (or to provide any required information with respect
     thereto) shall not affect any rights granted to the Executive under this
     Section 7 except to the extent that the Company is materially prejudiced in
     the defense of such claim as a direct result of such failure. The Executive
     shall not pay such claim prior to the expiration of the 30-day period
     following the date on which the Executive gives such notice to the Company
     (or such shorter period ending on the date that any payment of taxes with
     respect to such claim is due). If the Company notifies the Executive in
     writing prior to the expiration of such period that the Company desires to
     contest such claim, the Executive shall:

             (i) give the Company any information reasonably requested by the
        Company relating to such claim;

             (ii) take such action in connection with contesting such claim as
        the Company shall reasonably request in writing from time to time,
        including, without limitation, accepting legal

                                        11
<PAGE>

        representation with respect to such claim by an attorney selected by the
        Company and reasonably acceptable to the Executive;

             (iii) cooperate with the Company in good faith in order to
        effectively contest such claim; and

             (iv) permit the Company to participate in any proceedings relating
        to such claim;

     provided, however, that the Company shall bear and pay directly all costs
     and expenses (including additional interest and penalties) incurred in
     connection with such contest, and shall indemnify and hold the Executive
     harmless, on an after-tax basis, for any Excise Tax or income or employment
     tax (including interest and penalties) imposed as a result of such
     representation and payment of costs and expenses. Without limitation on the
     foregoing provisions of this Section 7(c), the Company shall control all
     proceedings taken in connection with such contest, and, at its sole
     discretion, may pursue or forgo any and all administrative appeals,
     proceedings, hearings and conferences with the applicable taxing authority
     in respect of such claim and may, at its sole discretion, either direct the
     Executive to pay the tax claimed and sue for a refund or contest the claim
     in any permissible manner, and the Executive agrees to prosecute such
     contest to a determination before any administrative tribunal, in a court
     of initial jurisdiction and in one or more appellate courts, as the Company
     shall determine; provided, however, that, if the Company directs the
     Executive to pay such claim and sue for a refund, the Company shall advance
     the amount of such payment to the Executive, on an interest-free basis, and
     shall indemnify and hold the Executive harmless, on an after-tax basis,
     from any Excise Tax or income tax (including interest or penalties) imposed
     with respect to such advance or with respect to any imputed income in
     connection with such advance; and provided, further, that any extension of
     the statute of limitations relating to payment of taxes for the taxable
     year of the Executive with respect to which such contested amount is
     claimed to be due is limited solely to such contested amount. Furthermore,
     the Company's control of the contest shall be limited to issues with
     respect to which the Gross-Up Payment would be payable hereunder, and the
     Executive shall be entitled to settle or contest, as the case may be, any
     other issue raised by the Internal Revenue Service or any other taxing
     authority.

          (d) If, after the receipt by the Executive of an amount advanced by
     the Company pursuant to Section 7(c), the Executive becomes entitled to
     receive any refund with respect to such claim, the Executive shall (subject
     to the Company's complying with the requirements of Section 7(c)) promptly
     pay to the Company the amount of such refund (together with any interest
     paid or credited thereon after taxes applicable thereto). If, after the
     receipt by the Executive of an amount advanced by the Company pursuant to
     Section 7(c), a determination is made that the Executive shall not be
     entitled to any refund with respect to such claim, and the Company does not
     notify the Executive in writing of its intent to contest such denial of
     refund prior to the expiration of 30 days after such determination, then
     such advance shall be forgiven and shall not be required to be repaid and
     the amount of such advance shall offset, to the extent thereof, the amount
     of Gross-Up Payment required to be paid.

          (e) Notwithstanding any other provision of this Section 7, the Company
     may, in its sole discretion, withhold and pay over to the Internal Revenue
     Service or any other applicable taxing authority, for the benefit of the
     Executive, all or any portion of the Gross-Up Payment, and the Executive
     hereby consents to such withholding.

          (f) Definitions.  The following terms shall have the following
     meanings for purposes of this Section 7.

             (i) "Excise Tax" shall mean the excise tax imposed by Section 4999
        of the Code, together with any interest or penalties imposed with
        respect to such excise tax.

             (ii) A "Payment" shall mean any payment or distribution in the
        nature of compensation (within the meaning of Section 280G(b)(2) of the
        Code) to or for the benefit of the Executive, whether paid or payable
        pursuant to this Agreement or otherwise.

                                        12
<PAGE>

          8.  Confidential Information.  The Executive shall hold in a fiduciary
     capacity for the benefit of the Company all secret or confidential
     information, knowledge or data relating to the Company or any of its
     affiliated companies, and their respective businesses, which shall have
     been obtained by the Executive during the Executive's employment by the
     Company or any of its affiliated companies and which shall not be or become
     public knowledge (other than by acts by the Executive or representatives of
     the Executive in violation of this Agreement) (referred to herein as
     "Confidential Information"). After termination of the Executive's
     employment with the Company, the Executive shall not, without the prior
     written consent of the Company or as may otherwise be required by law or
     legal process, communicate or divulge any such information, knowledge or
     data to anyone other than the Company and those designated by it. In no
     event shall an asserted violation of the provisions of this Section 8
     constitute a basis for deferring or withholding any amounts otherwise
     payable to the Executive under this Agreement. Also, within 14 days after
     the termination of Executive's employment for any reason, the Executive
     shall return to Company all documents and other tangible items containing
     Company information which are in the Executive's possession, custody or
     control.

          9.  Change of Control.  As used in this Agreement, the terms set forth
     below shall have the following respective meanings:

          "Affiliate" shall have the meaning ascribed to such term in Rule 12b-2
     of the General Rules and Regulations under the Exchange Act, as in effect
     on the date of this Agreement.

          "Associate" shall mean, with reference to any Person, (a) any
     corporation, firm, partnership, association, unincorporated organization or
     other entity (other than New Parent or a subsidiary of New Parent) of which
     such Person is an officer or general partner (or officer or general partner
     of a general partner) or is, directly or indirectly, the Beneficial Owner
     of 10% or more of any class of equity securities, (b) any trust or other
     estate in which such Person has a substantial beneficial interest or as to
     which such Person serves as trustee or in a similar fiduciary capacity and
     (c) any relative or spouse of such Person, or any relative of such spouse,
     who has the same home as such Person.

          "Beneficial Owner" shall mean, with reference to any securities, any
     Person if:

             (a) such Person or any of such Person's Affiliates and Associates,
        directly or indirectly, is the "beneficial owner" of (as determined
        pursuant to Rule 13d-3 of the General Rules and Regulations under the
        Exchange Act, as in effect on the date of this Agreement) such
        securities or otherwise has the right to vote or dispose of such
        securities, including pursuant to any agreement, arrangement or
        understanding (whether or not in writing); provided, however, that a
        Person shall not be deemed the "Beneficial Owner" of, or to
        "beneficially own," any security under this subsection (a) as a result
        of an agreement, arrangement or understanding to vote such security if
        such agreement, arrangement or understanding: (i) arises solely from a
        revocable proxy or consent given in response to a public (i.e., not
        including a solicitation exempted by Rule 14a-2(b)(2) of the General
        Rules and Regulations under the Exchange Act) proxy or consent
        solicitation made pursuant to, and in accordance with, the applicable
        provisions of the General Rules and Regulations under the Exchange Act
        and (ii) is not then reportable by such Person on Schedule 13D under the
        Exchange Act (or any comparable or successor report);

             (b) such Person or any of such Person's Affiliates and Associates,
        directly or indirectly, has the right or obligation to acquire such
        securities (whether such right or obligation is exercisable or effective
        immediately or only after the passage of time or the occurrence of an
        event) pursuant to any agreement, arrangement or understanding (whether
        or not in writing) or upon the exercise of conversion rights, exchange
        rights, other rights, warrants or options, or otherwise; provided,
        however, that a Person shall not be deemed the Beneficial Owner of, or
        to "beneficially own," (i) securities tendered pursuant to a tender or
        exchange offer made by such Person or any of such Person's Affiliates or
        Associates until such tendered securities are accepted for purchase or
        exchange or (ii) securities issuable upon exercise of Exempt Rights; or

                                        13
<PAGE>

             (c) such Person or any of such Person's Affiliates or Associates
        (i) has any agreement, arrangement or understanding (whether or not in
        writing) with any other Person (or any Affiliate or Associate thereof)
        that beneficially owns such securities for the purpose of acquiring,
        holding, voting (except as set forth in the proviso to subsection (a) of
        this definition) or disposing of such securities or (ii) is a member of
        a group (as that term is used in Rule 13d-5(b) of the General Rules and
        Regulations under the Exchange Act) that includes any other Person that
        beneficially owns such securities;

     provided, however, that nothing in this definition shall cause a Person
     engaged in business as an underwriter of securities to be the Beneficial
     Owner of, or to "beneficially own," any securities acquired through such
     Person's participation in good faith in a firm commitment underwriting
     until the expiration of 40 days after the date of such acquisition. For
     purposes hereof, "voting" a security shall include voting, granting a
     proxy, consenting or making a request or demand relating to corporate
     action (including, without limitation, a demand for a stockholder list, to
     call a stockholder meeting or to inspect corporate books and records) or
     otherwise giving an authorization (within the meaning of Section 14(a) of
     the Exchange Act) in respect of such security.

          The terms "beneficially own" and "beneficially owning" shall have
     meanings that are correlative to this definition of the term "Beneficial
     Owner."

          "Change of Control" shall mean the first to occur of any of the
     following occurring after the Agreement Effective Date (it being understood
     and agreed that for purposes of this Agreement, neither the Merger, nor
     approval by the shareholders of Phillips or the Company thereof, shall
     constitute a "Change of Control" under this Agreement):

             (a) any Person (other than an Exempt Person) shall become the
        Beneficial Owner of 20% or more of the shares of Common Stock then
        outstanding or 20% or more of the combined voting power of the Voting
        Stock of New Parent then outstanding; provided, however, that no Change
        of Control shall be deemed to occur for purposes of this subsection (a)
        if such Person shall become a Beneficial Owner of 20% or more of the
        shares of Common Stock or 20% or more of the combined voting power of
        the Voting Stock of New Parent solely as a result of (i) an Exempt
        Transaction or (ii) an acquisition by a Person pursuant to a
        reorganization, merger or consolidation, if, following such
        reorganization, merger or consolidation, the conditions described in
        clauses (i), (ii) and (iii) of subsection (c) of this definition are
        satisfied;

             (b) individuals who, immediately following the consummation of the
        Merger, constitute the New Parent Board (the "Incumbent Board") cease
        for any reason to constitute at least a majority of the New Parent
        Board; provided, however, that any individual becoming a director
        thereafter whose election, or nomination for election by New Parent's
        shareholders, was approved by a vote of at least a majority of the
        directors then comprising the Incumbent Board shall be considered as
        though such individual were a member of the Incumbent Board; provided,
        further, that there shall be excluded, for this purpose, any such
        individual whose initial assumption of office occurs as a result of any
        actual or threatened election contest that is subject to the provisions
        of Rule 14a-11 of the General Rules and Regulations under the Exchange
        Act;

             (c) the shareholders of New Parent shall approve a reorganization,
        merger or consolidation, in each case, unless, following such
        reorganization, merger or consolidation, (i) more than 70% of the then
        outstanding shares of common stock of the corporation resulting from
        such reorganization, merger or consolidation and the combined voting
        power of the then outstanding Voting Stock of such corporation
        beneficially owned, directly or indirectly, by all or substantially all
        of the Persons who were the Beneficial Owners of the outstanding Common
        Stock immediately prior to such reorganization, merger or consolidation
        in substantially the same proportions as their ownership, immediately
        prior to such reorganization, merger or consolidation, of the
        outstanding Common Stock, (ii) no Person (excluding any Exempt Person or
        any Person beneficially owning, immediately prior to such
        reorganization, merger or consolidation, directly or indirectly, 20% or
        more of the Common Stock then outstanding or 20% or more of the combined

                                        14
<PAGE>

        voting power of the Voting Stock of New Parent then outstanding)
        beneficially owns, directly or indirectly, 20% or more of the then
        outstanding shares of common stock of the corporation resulting from
        such reorganization, merger or consolidation or the combined voting
        power of the then outstanding Voting Stock of such corporation and (iii)
        at least a majority of the members of the board of directors of the
        corporation resulting from such reorganization, merger or consolidation
        were members of the Incumbent Board at the time of the execution of the
        initial agreement or initial action by the New Parent Board providing
        for such reorganization, merger or consolidation; or

             (d) the shareholders of New Parent shall approve (i) a complete
        liquidation or dissolution of New Parent unless such liquidation or
        dissolution is approved as part of a plan of liquidation and dissolution
        involving a sale or disposition of all or substantially all of the
        assets of New Parent to a corporation with respect to which, following
        such sale or other disposition, all of the requirements of clauses
        (ii)(A), (B) and (C) of this subsection (d) are satisfied, or (ii) the
        sale or other disposition of all or substantially all of the assets of
        New Parent, other than to a corporation, with respect to which,
        following such sale or other disposition, (A) more than 70% of the then
        outstanding shares of common stock of such corporation and the combined
        voting power of the Voting Stock of such corporation is then
        beneficially owned, directly or indirectly, by all or substantially all
        of the Persons who were the Beneficial Owners of the outstanding Common
        Stock immediately prior to such sale or other disposition in
        substantially the same proportion as their ownership, immediately prior
        to such sale or other disposition, of the outstanding Common Stock, (B)
        no Person (excluding any Exempt Person and any Person beneficially
        owning, immediately prior to such sale or other disposition, directly or
        indirectly, 20% or more of the Common Stock then outstanding or 20% or
        more of the combined voting power of the Voting Stock of New Parent then
        outstanding) beneficially owns, directly or indirectly, 20% or more of
        the then outstanding shares of common stock of such corporation and the
        combined voting power of the then outstanding Voting Stock of such
        corporation and (C) at least a majority of the members of the board of
        directors of such corporation were members of the Incumbent Board at the
        time of the execution of the initial agreement or initial action of the
        New Parent Board providing for such sale or other disposition of assets
        of New Parent.

          "Common Stock" shall mean the common stock, par value $.01 per share,
     of New Parent.

          "Exchange Act" shall mean the Securities Exchange Act of 1934, as
     amended.

          "Exempt Person" shall mean any of New Parent, any subsidiary of New
     Parent, any employee benefit plan of New Parent or any subsidiary of New
     Parent, and any Person organized, appointed or established by New Parent
     for or pursuant to the terms of any such plan.

          "Exempt Rights" shall mean any rights to purchase shares of Common
     Stock or other Voting Stock of New Parent if at the time of the issuance
     thereof such rights are not separable from such Common Stock or other
     Voting Stock (i.e., are not transferable otherwise than in connection with
     a transfer of the underlying Common Stock or other Voting Stock), except
     upon the occurrence of a contingency, whether such rights exist as of the
     Agreement Effective Date or are thereafter issued by New Parent as a
     dividend on shares of Common Stock or other Voting Securities or otherwise.

          "Exempt Transaction" shall mean an increase in the percentage of the
     outstanding shares of Common Stock or the percentage of the combined voting
     power of the outstanding Voting Stock of New Parent beneficially owned by
     any Person solely as a result of a reduction in the number of shares of
     Common Stock then outstanding due to the repurchase of Common Stock or
     Voting Stock by New Parent, unless and until such time as (a) such Person
     or any Affiliate or Associate of such Person shall purchase or otherwise
     become the Beneficial Owner of additional shares of Common Stock
     constituting 1% or more of the then outstanding shares of Common Stock or
     additional Voting Stock representing 1% or more of the combined voting
     power of the then outstanding Voting Stock, or (b) any other Person (or
     Persons) who is (or collectively are) the Beneficial Owner of shares of
     Common Stock constituting 1% or more of the then outstanding shares of
     Common Stock or Voting

                                        15
<PAGE>

     Stock representing 1% or more of the combined voting power of the then
     outstanding Voting Stock shall become an Affiliate or Associate of such
     Person.

          "Person" shall mean any individual, firm, corporation, partnership,
     association, trust, unincorporated organization or other entity.

          "Voting Stock" shall mean, with respect to a corporation, all
     securities of such corporation of any class or series that are entitled to
     vote generally in the election of directors of such corporation (excluding
     any class or series that would be entitled so to vote by reason of the
     occurrence of any contingency, so long as such contingency has not
     occurred).

          10.  Successors.

          (a) This Agreement is personal to the Executive and without the prior
     written consent of the Company shall not be assignable by the Executive
     otherwise than by will or the laws of descent and distribution. This
     Agreement shall inure to the benefit of, and be enforceable by, the
     Executive's heirs, executors and other legal representatives.

          (b) This Agreement shall inure to the benefit of, and be binding upon,
     the Company and may only be assigned to a successor described in Section
     10(c).

          (c) As of the Agreement Effective Date, New Parent shall be
     substituted for the Company as the obligor under this Agreement, and each
     reference to the Company with respect to periods on or after the Agreement
     Effective Date shall be replaced with a reference to New Parent, and each
     reference to the Company with respect to periods prior to the Agreement
     Effective Date shall mean Conoco Inc., except where the context requires
     otherwise. 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 to assume
     expressly and agree to perform this Agreement in the same manner and to the
     same extent that the Company would be required to perform it if no such
     succession had taken place. As used in this Agreement, "Company" shall mean
     the Company as hereinbefore defined and any successor to its business
     and/or assets as aforesaid which assumes and agrees to perform this
     Agreement by operation of law, or otherwise.

          11.  Miscellaneous.

          (a) This Agreement shall be governed by and construed in accordance
     with the laws of the State of Texas, without reference to principles of
     conflict of laws that would require the application of the laws of any
     other state or jurisdiction.

          (b) The Executive acknowledges that the Company currently has and may
     in the future institute comprehensive security programs associated with the
     Executive and his position with the Company. The Executive further
     acknowledges that such programs are instituted by the Company to protect
     the Company's interest in the Executive's continued performance of his
     responsibilities as Chairman of the New Parent Board. To that end, the
     Executive agrees to comply with such programs and, to the extent
     practicable, to cause members of his family to comply with such programs if
     such individuals are covered thereby. The Executive further acknowledges
     that the Company has a substantial interest in the health of the Executive
     and agrees to comply with preventive medical policies and programs
     established by the Company. Such policies currently include a requirement
     that the Executive annually obtain a complete physical examination at the
     Johns Hopkins Medical Center (or another facility of similar stature at the
     election of the Executive).

          (c) This Agreement may not be amended or modified otherwise than by a
     written agreement executed by the parties hereto or their respective
     successors and heirs, executors and other legal representatives.

          (d) All notices and other communications hereunder shall be in writing
     and shall be given, if by the Executive to the Company, by telecopy or
     facsimile transmission at the telecommunications

                                        16
<PAGE>

     number set forth below and, if by either the Company or the Executive,
     either by hand delivery to the other party or by registered or certified
     mail, return receipt requested, postage prepaid, addressed as follows:

          If to the Executive:

          Mr. Archie W. Dunham
          Conoco Inc.
          600 North Dairy Ashford
          Petroleum Building, Suite PE3034
          Houston, Texas 77079-6651

          If to the Company:

          Conoco Inc. or New Parent
          600 North Dairy Ashford
          Houston, Texas 77079-6651
          Telecommunications Number: (281) 293-1054
          Attention: General Counsel

     or to such other address as either party shall have furnished to the other
     in writing in accordance herewith. Notice and communications shall be
     effective when actually received by the addressee.

          (e) The invalidity or unenforceability of any provision of this
     Agreement shall not affect the validity or enforceability of any other
     provision of this Agreement.

          (f) The Company may withhold from any amounts payable under this
     Agreement such federal, state or local taxes as shall be required to be
     withheld pursuant to any applicable law or regulation.

          (g) The Executive's or the Company's failure to insist upon strict
     compliance with any provision of this Agreement or the failure to assert
     any right the Executive or the Company may have hereunder, including,
     without limitation, the right of the Executive to terminate employment for
     Good Reason pursuant to Section 3(c) of this Agreement, shall not be deemed
     to be a waiver of such provision or right or any other provision or right
     of this Agreement.

          (h) As of the Agreement Effective Date, but not before, this Agreement
     supersedes the Prior Employment Agreement. The provisions of this Agreement
     shall govern in the event of a conflict or inconsistency with respect to
     any other agreement concerning Executive's employment relationship with the
     Company, including the provisions of any benefit plan, program or practice.

          (i) This Agreement shall be effective as of the Agreement Effective
     Date.

                                        17
<PAGE>

     IN WITNESS WHEREOF, the Executive has hereunto set his hand and, pursuant
to the authorization from the Company, Board and the New Parent Board,
respectively, the Company and New Parent each have caused these presents to be
executed in its name on its behalf.

                                          CONOCO INC.

                                          By:
                                          --------------------------------------
                                              Thomas C. Knudson
                                              Senior Vice President
                                              Human Resources, Information
                                              Management and Corporate
                                              Communications

                                          CORVETTEPORSCHE CORP.

                                          By:
                                          --------------------------------------

                                          --------------------------------------

                                          --------------------------------------

                                          --------------------------------------
                                          Archie W. Dunham

                                        18
<PAGE>

                                    ANNEX A

                              CERTAIN DEFINITIONS

Accounting Firm is defined in Section 7(b).

Accounting Opinion is defined in Section 7(b).

Accrued Obligation is defined in Section 4(a)(i)(A).

Affiliate is defined in Section 9.

Agreement Effective Date is defined in the Preamble.

Annual Base Salary is defined in Section 2(b)(i).

Annual Bonus is defined in Section 2(b)(ii).

Associate is defined in Section 9.

Base Rate is defined in Section 6(a)

Beneficial Owner is defined in Section 9.

Benefit Continuation Period is defined in Section 4(a)(ii).

Cause is defined in Section 3(b).

Change of Control is defined in Section 9.

Chief Executive Officer or CEO is defined in Section 2(a).

Code is defined in Section 2(b)(iii).

Common Stock is defined in Section 9.

Company is defined in the Preamble and in Section 10(c).

Company Board is defined in the Preamble.

Company Prior Arrangements is defined in Section 2(b).

Compensatory Award is defined in Section 4(a)(i)(F).

Confidential Information is defined in Section 8.

Covered Person is defined in Section 4(a)(i)(F).

Date of Termination is defined in Section 3(f).

Directors' Charitable Gift Plan is referenced in Section 4(f).

Disability is defined in Section 3(a).

Disability Effective Date is defined in Section 3(a).

Employment Period is defined in Section 1.

Exchange Act is defined in Section 9.

Excise Tax is defined in Section 7(f).

Executive is defined in the Preamble.

Exempt Person is defined in Section 9.

Exempt Rights is defined in Section 9.

Exempt Transaction is defined in Section 9.

                                        19
<PAGE>

Final Expiration Date is defined in Section 4(a)(i)(C).

Good Reason is defined in Section 3(c).

Grace Period is defined in Section 3(b).

Gross-Up Payment is defined in Section 7(a).

Highest Price Per Share is defined in Section 4(a)(i)(F).

Incumbent Board is defined in Section 9.

Merger is defined in the Preamble.

Merger Agreement is defined in the Preamble.

Most Favorable is defined in Section 2(b)(iii).

New Parent is defined in the Preamble.

New Parent Board is defined in the Preamble.

Other Benefits is defined in Section 4(a)(iii).

Other Termination by the Executive is defined in Section 3(d).

Payment is defined in Section 7(f).

Person is defined in Section 9.

Phillips is defined in the Preamble.

Phillips Prior Arrangements is defined in Section 2(b).

Post-Employment Compensation is defined in Section 4(f).

Prior Compensatory Award is defined in Annex B, Section (i)(E).

Prior Employment Agreement is defined in the Preamble.

Prior Final Expiration Date is defined in Annex B, Section (i)(B).

Remaining Employment Period is defined in Section 4(a)(i)(C).

Remaining Prior Employment Period is defined in Annex B, Section (i)(B).

Required Board Majority is defined in Section 2(a).

Retirement is defined in Section 3(d).

Underpayment is defined in Section 7(b).

Voting is defined in Section 9.

Voting Stock is defined in Section 9.

                                        20
<PAGE>

                                    ANNEX B

     In consideration for the execution of this Agreement, New Parent, the
Company and the Executive hereby agree to the following:

          (i) promptly following the Agreement Effective Date, the Company shall
     pay or provide to or in respect of the Executive the following amounts and
     benefits:

             A.  in a lump sum in cash, within 10 days after the Agreement
        Effective Date, an amount equal to the sum of (1) the Executive's Annual
        Base Salary (as defined in the Prior Employment Agreement) through the
        Agreement Effective Date, (2) any deferred compensation previously
        awarded to or earned by the Executive (together with any accrued
        interest or earnings thereon) and (3) any compensation for unused
        vacation time for which the Executive is eligible in accordance with the
        most favorable plans, policies, programs and practices of the Company,
        in each case to the extent not theretofore paid;

             B.  in a lump sum in cash, undiscounted, within 10 days after the
        Agreement Effective Date, an amount equal to the sum of (i) the amount
        of Annual Base Salary (as defined in the Prior Employment Agreement)
        that would have been paid to the Executive pursuant to the Prior
        Employment Agreement for the period (the "Remaining Prior Employment
        Period") beginning on the Agreement Effective Date and ending on the
        date that is three years following the Agreement Effective Date (the
        "Prior Final Expiration Date") if the Executive's employment had
        continued uninterrupted pursuant to the Prior Employment Agreement and
        (ii) the Annual Bonus (as defined in the Prior Employment Agreement)
        that would have been paid or awarded to or for the benefit of the
        Executive during the Remaining Prior Employment Period if the
        Executive's employment continued uninterrupted pursuant to the Prior
        Employment Agreement and if the amount of the Annual Bonus (as defined
        in the Prior Employment Agreement) for each fiscal year or portion
        thereof during such period were equal to the average of the two highest
        Annual Bonuses (as defined in the Prior Employment Agreement) paid or
        awarded to or for the benefit of the Executive in respect of the three
        full fiscal years preceding the Agreement Effective Date, prorated in
        the case of any period of less than a full fiscal year;

             C.  in a lump sum in cash, undiscounted, within 30 days after the
        Agreement Effective Date, an amount equal to the economic equivalent of
        the benefits the Executive (and his dependents or beneficiaries) would
        have received or become entitled to under Section 2(b)(iii) of the Prior
        Employment Agreement for the Remaining Prior Employment Period if the
        Executive's employment continued uninterrupted pursuant to the Prior
        Employment Agreement;

             D.  effective as of the Agreement Effective Date, (1) if the
        Executive has not received a grant of stock options in respect of any
        calendar year during the Employment Period (as defined in the Prior
        Employment Agreement) or the Remaining Prior Employment Period, for each
        such calendar year, a stock option grant covering the same number of
        shares and on the same terms and conditions as the average of the prior
        stock option grants to the Executive for the three full fiscal years
        preceding the Agreement Effective Date, prorated in the case of any
        period of less than a full fiscal year (except that the option will vest
        after two years of service, subject to earlier vesting upon the
        occurrence of certain events in accordance with the Agreement and/or the
        Company's customary stock option grants), and (2) if the Executive has
        not received a grant of restricted stock and/or restricted stock units
        and/or other similar equity-based awards in respect of any calendar year
        during the Employment Period (as defined in the Prior Employment
        Agreement) or the Remaining Prior Employment Period, for each such
        calendar year, a grant covering the same number of shares and on the
        same terms and conditions as the average of the prior grants of such
        awards to the Executive for the three full fiscal years preceding the
        Agreement Effective Date, prorated in the case of any period of less
        than a full fiscal year; provided that any awards required by (1) or (2)
        shall be prorated based on the length of the Remaining Prior Employment
        Period as compared to the customary terms of such awards for purposes of
        a recipient becoming entitled to full vesting in such award;

                                        21
<PAGE>

             E.  effective as of the Agreement Effective Date, (1) immediate
        vesting and exercisability of, and termination of any restrictions on
        sale or transfer (other than any such restriction arising by operation
        of law) with respect to, each and every stock option, restricted stock
        award, restricted stock unit award and other equity-based award and
        performance award that is outstanding as of the Agreement Effective Date
        (including, without limitation, each of the foregoing granted pursuant
        to paragraph (i)(D)(2) of this Annex B, but excluding for this purpose
        the option grant made pursuant to paragraph (i)(D)(1) of this Annex B)
        (each, a "Prior Compensatory Award"), and (2) the extension of the term
        during which each and every Prior Compensatory Award may be exercised by
        the Executive until the earlier of (x) the first anniversary of the
        Agreement Effective Date or (y) the date upon which the right to
        exercise any Prior Compensatory Award would have expired if the
        Executive had continued to be employed by the Company under the terms of
        the Prior Employment Agreement until the Prior Final Expiration Date;
        and

             F.  effective as of the Agreement Effective Date or as soon as
        practicable thereafter, the Company shall pay to the Executive any
        Gross-Up Payments due to the Executive pursuant to Section 7 of this
        Agreement on account of any payments made pursuant to this Annex B or
        otherwise; provided, that in the case of any Gross-Up Payment relating
        to a payment that is deferred as provided for below, such Gross-Up
        Payment shall be paid as and when actually due in respect of such
        deferred payment; and provided, further, that the Company may, in its
        sole discretion, withhold and pay over to the Internal Revenue Service
        or any other applicable taxing authority, for the benefit of the
        Executive, all or any portion of such Gross-Up Payments, and the
        Executive hereby consents to such withholding.

          (ii) for the Remaining Prior Employment Period, or such longer period
     as any plan, program, practice or policy may provide, the Company shall
     continue benefits to the Executive and/or the Executive's family at least
     equal to those benefits which would have been provided to them in
     accordance with the most favorable plans, programs, practices and policies
     described in Section 2(b)(iv) of the Prior Employment Agreement if the
     Executive's employment had continued uninterrupted. For purposes of
     determining eligibility of the Executive for retiree benefits pursuant to
     such plans, practices, programs and policies, the Executive shall be
     considered to have remained employed until at least the Prior Final
     Expiration Date and to have retired on such date;

          (iii) for the Remaining Prior Employment Period, to the extent not
     previously paid or provided, the Company shall timely pay or provide to the
     Executive and/or the Executive's family any other amounts or benefits
     required to be paid or provided, or which the Executive and/or the
     Executive's family would have been eligible to receive, pursuant to the
     Prior Employment Agreement and under any plan, program, policy or practice
     or contract or agreement of the Company as in effect and applicable
     generally to other executives and their families immediately prior to the
     Agreement Affective Date or, if more favorable to the Executive, as in
     effect generally thereafter with respect to other executives of the Company
     and their families; and

          (iv) unless otherwise provided herein, until the Executive (or any
     family member or family entity assignee of the Executive) no longer holds
     any stock options granted by the Company to the Executive, the Company will
     provide to the Executive at no cost to the Executive (including a complete
     gross up for any taxes incurred by the Executive as a result of receiving
     such benefits), the benefits described in Sections 2(b)(x) and 2(b)(xi) of
     the Prior Employment Agreement, but in no event beyond the date of death of
     the Executive.

     Any payments to be made pursuant to this Annex B may be deferred pursuant
to an election by the Executive on or before March 31, 2002, but in no event
later than the date 30 days before the Agreement Effective Date. Any amounts so
deferred shall be deferred pursuant to the Global Variable Compensation Deferral
Plan.

     The parties agree that the compensation and benefits to be provided in this
Annex B are in addition to the compensation and benefits to be provided under
this Agreement, and in no event shall the payments

                                        22
<PAGE>

and benefits provided under Annex B reduce or offset the amount or duration of
payments and benefits to be provided pursuant to this Agreement, and in no event
shall the payments and benefits provided pursuant to this Agreement reduce or
offset the amount or duration of payments and benefits to be provided under this
Annex B; provided, that notwithstanding the foregoing, during any period when
the Executive or his family are entitled to receive, pursuant to this Agreement,
benefits otherwise required to be provided pursuant to clause (ii), (iii) or
(iv) of this Annex B, the Executive shall be entitled to receive benefits under
the most favorable of such arrangements, but there shall be no duplication of
such benefits and no extension of the period during which such benefits are
otherwise required to be provided under Annex B or this Agreement.

                                        23