Document:

exv10w41

 

Exhibit 10.41

ConocoPhillips

Matching Gift Plan

for Directors and Executives

Terms and Conditions

Eligible Donors

	§ 	 	Current executive employees (grade level      and higher; paid in U.S. dollars) of ConocoPhillips, or its U.S.
subsidiaries in which the company ownership is at least 50 percent.
	 
	§ 	 	Current or past members of Heritage-Phillips, Heritage-Conoco or ConocoPhillips boards of directors.

Eligible Recipients

	§ 	 	Private or public, nonprofit K-12 schools with appropriate regional or professional accreditation.
	 
	§ 	 	Private or public, nonprofit schools of higher education (includes four-year colleges, graduate and professional
schools, junior colleges, technical institutes and community colleges) as accredited by the American Council on
Education.
	 
	§ 	 	Charitable organizations or political subdivisions (cities, counties, states, school districts, etc.) with
tax-exempt status (U.S. Internal Revenue Code, Section 501(c)(3)).

Matching Rates

	§ 	 	Current members of the Board of Directors and current company executives are matched $1 for $1 to an annual maximum
of $15,000.
	 
	§ 	 	Retired directors and executives are matched $1 for $1 to an annual maximum of $7,500.

If an individual’s gift(s) exceeds the maximum match amount, the gifts will be
matched up to the annual maximum in date-of-gift order.

Match Qualifications

($50.00 minimum contribution)

	§ 	 	Cash. Gifts made from the eligible donor’s personal or joint account, or credit card account.
	 
	§ 	 	Marketable securities. The value of the securities under this plan will be the average price (between the high
and low quotations) on the date the gift was made.

Matching Gift forms must have gift documentation attached (copy of check,
credit card or securities transaction, etc.) to be eligible for a match.

Guidelines on Ineligible Gifts

	§ 	 	Any contribution that results in a personal benefit or privilege to the donor, the donor’s family or anyone
designated by the donor.
	 
	§ 	 	Educational gifts to fraternities or sororities.
	 
	§ 	 	Educational gifts to athletics: funds, foundations, facilities or scholarships.
	 
	§ 	 	Donations to alumni association dues or activities.

 

 

	§ 	 	Contributions made in lieu of tuition, fees or school loans.
	 
	§ 	 	United Way campaign pledges.
	 
	§ 	 	Gifts to political organizations.
	 
	§ 	 	Gifts to religious organizations (except accredited schools).
	 
	§ 	 	Gifts intended to fulfill a church-related financial obligation, e.g., tithing.
	 
	§ 	 	Multiple gifts submitted on one application form.
	 
	§ 	 	Deferred gifts (e.g., charitable remainder trusts or annuity trusts).
	 
	§ 	 	Accumulated or pooled monies raised by a group of donors and submitted by one donor.
	 
	§ 	 	Gifts for admission tickets.
	 
	§ 	 	Gifts for subscription or membership fees.
	 
	§ 	 	Gifts of real estate or personal property.
	 
	§ 	 	Gifts made from business accounts or non-employee/retiree spouse’s account.
	 
	§ 	 	Gifts with incomplete matching gift forms.

Completing Gift Forms

	§ 	 	Donor. Fills out Form A and sends the entire document to the
organization receiving the donation, along with the gift.
	 
	§ 	 	Recipient. An authorized official of the educational
institution or charitable organization completes Form B and
mails completed form along with documentation of gift (copy of
check, credit card or securities transaction) to:

ConocoPhillips

Matching Gift Administrator

600 N. Dairy Ashford (MA 3131)

Houston, Texas 77079

	§ 	 	Contributions will be matched twice annually.
	 
	§ 	 	Contributions made the first half of the year will be matched the second half of the year. Forms and proof of the gift
must be received by this office by July 31, or the gift will not be matched until the first half of the following year.
	 
	§ 	 	Contributions made the second half of the calendar year will be matched the first half of the following year. Forms and
proof of the gift must be received by this office by January 31 of the following year, or eligibility will lapse and the
gift will not be matched.
	 
	§ 	 	Forms are to be completed in full.
	 
	§ 	 	Upon determination of eligibility, ConocoPhillips management will authorize payment.

Other Administrative Conditions

ConocoPhillips may modify, suspend or terminate the Matching Gift Plan at any
time. The interpretation, application and administration of the plan shall be
determined by the management of corporate contributions, whose decision shall
be final.exv10w42

 

Exhibit 10.42

Amended by Corporate Approval

May 13, 2003

KEY EMPLOYEE DEFERRED COMPENSATION PLAN OF

CONOCOPHILLIPS

PURPOSE

The purpose of the Key Employee Deferred Compensation Plan of ConocoPhillips
(the “Plan”) is to attract and retain key employees by providing them with an
opportunity to defer receipt of cash amounts which otherwise would be paid to
them under various compensation programs or plans by the Company. This Plan is
the continuation of the Key Employee Deferred Compensation Plan of Phillips
Petroleum Company, and all deferrals made thereunder shall continue under their
terms and the terms of this Plan.

SECTION 1. Definitions.

	 	(a)	 	“Affiliated Group” shall mean the Company plus other subsidiaries
and affiliates in which it owns, directly or through a subsidiary or
affiliate, a 5% or more equity interest.
	 
	 	(b)	 	“Award” shall mean the United States cash dollar amount (i)
allotted to an Employee under the terms of an Incentive Compensation
Plan or a Long Term Incentive Plan, or (ii) required to be credited to
an Employee’s Deferred Compensation Account pursuant to an Incentive
Compensation Plan, the Long Term Incentive Compensation Plan, the
Strategic Incentive Plan, a Long Term Incentive Plan, or any similar
plans, or any administrative procedure adopted pursuant thereto, or
(iii) credited as a result

 

 

	 	 	 	of a Participant’s deferral of the receipt of the value of the Stock
which would otherwise be delivered to an Employee in the event
restrictions lapse on Restricted Stock or Restricted Stock Units or
the settlement of Restricted Stock Units previously awarded or which
may be awarded to the Participant pursuant to an Incentive
Compensation Plan, the Long Term Incentive Compensation Plan, the
Strategic Incentive Plan, a Long Term Incentive Plan, an Omnibus
Securities Plan, or any similar plans, or any administrative procedure
adopted pursuant thereto, or (iv) credited resulting from a lump sum
distribution from any of the Company’s non-qualified retirement plans
and/or plans which provide for a retirement supplement, or (v)
resulting from the forfeiture of Restricted Stock, required by
Phillips Petroleum Company, of key employees who became employees of
GPM Gas Corporation, or (vi) credited as a result of an Employee’s
deferral of the receipt of the lump sum cash payment from the
Employee’s account in the Defined Contribution Makeup Plan, or (vii)
credited as a result of an Employee’s voluntary reduction of Salary,
or (viii) credited as a result of an Employee’s deferral of a
Performance Based Incentive Award, or (ix) any other amount determined
by the Committee to be an Award under the Plan. Sections 2 and 3 of
this Plan shall not apply with respect to Awards included under (ii),
(v), and (ix) above and a participant receiving such an Award shall be
deemed, with respect thereto, to have elected a Section 5(b)(i)
payment option — 10 annual installments commencing about one year
after retirement at age 55 or above, but subject to revision under the
terms of this Plan.
	 
	 	(c)	 	“Board of Directors” shall mean the board of directors of the
Company.
	 
	 	(d)	 	“Chief Executive Officer” or “CEO” shall mean the Chief Executive
Officer of the Company.
	 
	 	(e)	 	“Committee” shall mean the Compensation Committee of the Board of
Directors.
	 
	 	(f)	 	“Company” shall mean ConocoPhillips.

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	 	(g)	 	“Deferred Compensation Account” shall mean an account established
and maintained for each Participant in which is recorded the amounts
of Awards deferred by a Participant, the deemed gains, losses and
earnings accrued thereon and payments made therefrom all in accordance
with the terms of the Plan.
	 
	 	(h)	 	“Defined Contribution Makeup Plan” shall mean the Defined
Contribution Makeup Plan of ConocoPhillips, or any similar plan or
successor plans.
	 
	 	(i)	 	“Disability” shall mean the inability, in the opinion of the
Company’s Medical Director, of a Participant, because of an injury or
sickness, to work at a reasonable occupation that is available with
the Company, a Participating Subsidiary, or another subsidiary of the
Company.
	 
	 	(j)	 	“Employee” shall mean any individual or Rehired Participant who
satisfies the conditions of Section 5(j) who is a salaried employee of
the Company or of a Participating Subsidiary who is eligible to
receive an Award from an Incentive Compensation Plan, has Restricted
Stock and/or Restricted Stock Units, and is classified as a
ConocoPhillips salary grade 19 or above or any equivalent salary grade
at a Participating Subsidiary. Employee shall also include
Participants who are employed by a member of the Affiliated Group and
former employees of a member of the Affiliated Group who Retire or are
Laid Off and are eligible to receive a lump sum distribution from
non-qualified retirement plans. Employee shall also include any
individual or Rehired Participant who is hired as a salaried employee
of ConocoPhillips Services Inc. on or after January 1, 2003 and is
classified as a ConocoPhillips salary grade 19 or above or any
equivalent salary grade at a Participating Subsidiary.
Notwithstanding the foregoing, Employee shall not include anyone who
is classified as a Heritage Conoco Employee.
	 
	 	(k)	 	“ERISA” shall mean the Employee Retirement Income Security Act of
1974, as amended from time to time, or any successor statute.

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	 	(l)	 	“Exchange Act” shall mean the Securities Exchange Act of 1934, as
amended and in effect from time to time, or any successor statute.
	 
	 	(m)	 	“Heritage Conoco Employee” shall mean an individual employed by
Conoco Inc., Conoco Pipe Line Company, or Louisiana Gas Systems Inc.
prior to January 1, 2003; provided, however, that an individual who
has been terminated from employment with a member of the Affiliated
Group at any time and rehired by a member of the Affiliated Group
after January 1, 2003, shall not be considered a Heritage Conoco
Employee for purposes of this Plan.
	 
	 	(n)	 	“Incentive Compensation Plan” shall mean the ConocoPhillips
Variable Cash Incentive Program, the Incentive Compensation Plan of
Phillips Petroleum Company, or the Annual Incentive Compensation Plan
of Phillips Petroleum Company, the Special Incentive Plan for Former
Tosco Executives, or similar plan of a Participating Subsidiary, or
any similar or successor plans, or all, as the context may require.
	 
	 	(o)	 	“Layoff” or “Laid Off” shall mean an applicable termination of
employment by reason of layoff under the Phillips Layoff Plan or the
Phillips Work Force Stabilization Plan, an applicable Qualifying Event
(without there being a Disqualifying Event) under the Conoco Severance
Pay Plan, or layoff or redundancy under any other layoff or redundancy
plan which the Company, any Participating Subsidiary, or any other
member of the Affiliated Group may adopt from time to time. If all or
any portion of the benefits under the layoff or redundancy plan are
contingent on the employee’s signing a general release of liability,
such termination shall not be considered as a Layoff for purposes of
this Plan unless the employee executes and does not revoke a general
release of liability, acceptable to the Company, under the terms of
such layoff or redundancy plan.
	 
	 	(p)	 	“Long-Term Incentive Compensation Plan” shall mean the Long-Term
Incentive Compensation Plan of Phillips Petroleum Company, which was
terminated December 31, 1985.

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	 	(q)	 	“Long-Term Incentive Plan” shall mean the ConocoPhillips
Performance Share Program, the Phillips Petroleum Company Long-Term
Incentive Plan, or a similar or successor plan of either of them,
established under an Omnibus Securities Plan.
	 
	 	(r)	 	“Newhire Employee” shall mean any Employee who is hired or
rehired during a calendar year.
	 
	 	(s)	 	“Omnibus Securities Plan” shall mean the Omnibus Securities Plan
of Phillips Petroleum Company, the 2002 Omnibus Securities Plan of
Phillips Petroleum Company, the 1998 Stock and Performance Incentive
Plan of ConocoPhillips, the 1998 Key Employee Stock Plan of
ConocoPhillips, or a similar or successor plan of any of them.
	 
	 	(t)	 	“Participant” shall mean a person for whom a Deferred
Compensation Account is maintained.
	 
	 	(u)	 	“Participating Subsidiary” shall mean a subsidiary of the
Company, of which the Company beneficially owns, directly or
indirectly, more than 50% of the aggregate voting power of all
outstanding classes and series of stock, where such subsidiary has
adopted one or more plans making participants eligible for
participation in this Plan and one or more Employees of which are
Potential Participants.
	 
	 	(v)	 	“Plan Administrator” shall mean the Vice President Human
Resources of the Company, or his successor.
	 
	 	(w)	 	“Potential Participant” shall mean a person who has received a
notice specified in Section 2 or in Section 5 (h).
	 
	 	(x)	 	“Rehired Participant” shall mean a Participant who, subsequent to
Retirement or Layoff, is rehired by the Company, or any subsidiary of
the Company, and whose
employment status is classified as regular full-time or its equivalent.

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	 	(y)	 	“Restricted Stock” and “Restricted Stock Units” shall mean
respectively shares of Stock and units each of which shall represent a
hypothetical share of Stock, which have certain restrictions attached
to the ownership thereof or the delivery of shares pursuant thereto.
	 
	 	(z)	 	“Retirement” or “Retire” or “Retiring” shall mean termination of
employment with the Company or any subsidiary of the Company on or
after the earliest early retirement date at age 55 or above as defined
in the ConocoPhillips Retirement Plan or of the applicable retirement
plan of a member of the Affiliated Group.
	 
	 	(aa)	 	“Retirement Income Plan” shall mean the ConocoPhillips Retirement
Plan or a similar retirement plan of the Participating Subsidiary
pursuant to the terms of which the Participant retires.
	 
	 	(bb)	 	“Settlement Date” shall mean the date on which all acts under an
Incentive Compensation Plan or the Long-Term Incentive Compensation
Plan or actions directed by the Committee, as the case may be, have
been taken which are necessary to make an Award payable to the
Participant.
	 
	 	(cc)	 	“Salary” shall mean the monthly equivalent rate of pay for an
Employee before adjustments for any before-tax voluntary reductions.
	 
	 	(dd)	 	“Stock” means shares of common stock of ConocoPhillips, par value
$.01.
	 
	 	(ee)	 	“Strategic Incentive Plan” shall mean the Strategic Incentive
Plan portion of the 1986 Stock Plan of Phillips Petroleum Company, of
the 1990 Stock Plan of Phillips Petroleum Company, of the Phillips
Petroleum Company Omnibus Securities Plan, and of any successor plans
of similar nature.

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

SECTION 2. Notification of Potential Participants.

	 	(a)	 	Incentive Compensation Plan. Each year, during October,
Employees who are eligible to receive an Award in the immediately
following calendar year under an Incentive Compensation Plan will be
notified and given the opportunity, in a manner prescribed by the Plan
Administrator, to indicate a preference concerning deferral of all or
part of such Award.
	 
	 	(b)	 	Restricted Stock and Restricted Stock Units Lapsing.
(i) Each year during October, Employees who are or will be 55 years of
age or older prior to the end of the calendar year will be notified
and given the opportunity, in a manner prescribed by the Plan
Administrator to indicate a preference to delay the lapsing of the
restrictions on part or all of the shares of Restricted Stock and/or
Restricted Stock Units previously awarded or which may be awarded to
the Employee under an Incentive Compensation Plan, the Long Term
Incentive Compensation Plan, a Long-Term Incentive Plan, or the
Strategic Incentive Plan in the event the Compensation Committee takes
action in the following calendar year to lapse restrictions on
Restricted Stock and/or Restricted Stock Units and/or settle
Restricted Stock Units.
	 
	 	 	 	(ii) Each year during October, Employees who have been granted a
special Restricted Stock Award and/or Restricted Stock Unit Award will
be notified and given the opportunity, in a manner prescribed by the
Plan Administrator to indicate a preference to delay the lapsing of
the restrictions on part or all of the shares of Restricted Stock
and/or Restricted Stock Units when the restrictions lapse on the
Special Restricted Stock and/or Restricted Stock Units or the
Restricted Stock Units are settled based on
the terms of the Special Restricted Stock and/or Restricted Stock Unit
Awards in the following year.

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	 	 	 	(iii) Such indication of preference as outlined in (i) above may be
made within
60 days of the amendment of this Plan providing for the notice;
provided, however, that such indication of preference must be made no
later than June 6, 2003 for such Awards that would otherwise be lapsed
or settled later in 2003.
	 
	 	(c)	 	Restricted Stock and Restricted Stock Unit Awards Deferral.
(i) Each year, during October, Employees who are or will be 55 years
of age or older prior to the end of the calendar year will be notified
and given the opportunity, in a manner prescribed by the Plan
Administrator, to indicate a preference concerning the deferral of the
receipt of the value of all or part of the Stock which would otherwise
be delivered to the Employees in the event, during the following
calendar year, the Compensation Committee takes action to lapse
restrictions on Restricted Stock and/or Restricted Stock Units and/or
settle Restricted Stock Units previously awarded or which may be
awarded to the Employees under an Incentive Compensation Plan, the
Long Term Incentive Compensation Plan, a Long Term Incentive Plan, or
the Strategic Incentive Plan.
	 
	 	 	 	(ii) Employees who have been granted a special Restricted Stock
Award and/or Restricted Stock Units Award may, in the year preceding
the year in which the restrictions are scheduled to lapse or the
Restricted Stock Units are to be settled, indicate a preference
concerning the deferral of the value of all or part of the stock which
would otherwise be delivered to the Employees in the next calendar year
when the restrictions lapse on the special Restricted Stock and /or
Restricted Stock Units or the Restricted Stock Units are settled based
on the terms of the special Restricted Stock Awards and/or Restricted
Stock Units Awards.
	 
	 	 	 	(iii) Employees who are Laid Off during or after the year they
reach age 50 may no later than 30 days after being notified of Layoff,
in the manner prescribed by the Plan

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	 	 	 	Administrator, indicate a preference concerning the deferral of the
receipt of the value of all or part of the Stock which would be
otherwise be delivered to the Employees in the event Restricted Stock
Units, which have been granted in exchange for Restricted Stock
pursuant to the Exchange offer initiated by the Company on December 17,
2001, are settled.
	 
	 	 	 	(iv) Such indication of preference as outlined in (i) above may be
made within 60 days of the amendment of this Plan providing for the notice;
provided, however, that such indication of preference must be made no
later than June 6, 2003 for such Awards that would otherwise be lapsed
or settled later in 2003.
	 
	 	(d)	 	Lump Sum Distribution from Non-Qualified Retirement Plans. With
respect to the lump sum distribution permitted from the Company’s
non-qualified retirement plans and/or plans which provide for a
retirement supplement, Employees may indicate, in a manner prescribed
by the Plan Administrator, a preference concerning deferral of all or
part of such lump sum distribution.
	 
	 	(e)	 	Lump Sum from Defined Contribution Makeup Plan. Employees who
will receive a lump sum cash payment from their account under the
Defined Contribution Makeup Plan, may indicate, in a manner prescribed
by the Plan Administrator, a preference concerning deferral of all or
part of such payment.
	 
	 	(f)	 	Salary Reduction. Annually, Employees and Newhire Employees on
the U.S. dollar payroll may elect, in a manner prescribed by the Plan
Administrator, a voluntary reduction of Salary for each pay period of
the following calendar year, or for Newhire Employees the remainder of
the calendar year in which they are hired, in which case the Company
will credit a like amount as an Award hereunder, provided that the
amount of such voluntary reduction shall not be less than 2% nor more
than a percentage of the Employee’s Salary per pay period such that
the resulting salary that is paid is sufficient to satisfy all benefit
plan deductions, tax deductions, elective deductions, and other
deductions required to be withheld by the Company.

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	 	(g)	 	Performance Based Incentive Award. Each year, during October,
Employees who are eligible to receive a Performance Based Incentive
Award in the immediately following calendar year will be notified and
given the opportunity, in a manner prescribed by the Plan
Administrator, to indicate a preference for the award to be paid as
cash, deferred to their KEDCP account or issued as Restricted Stock or
a combination of cash, deferred compensation and Restricted Stock.

SECTION 3. Indication of Preference or Election to Defer Award.

	 	(a)	 	Incentive Compensation Plan. If a Potential Participant prefers
to defer under this Plan all or any part of the Award to which a
notice received under Section 2(a) pertains, the Potential Participant
must indicate such preference, in a manner prescribed by the Plan
Administrator, (i) if the Potential Participant is subject to Section
16 of the Exchange Act, to the Committee, or (ii) if the Potential
Participant is not subject to Section 16 of the Exchange Act, to the
CEO. The Potential Participant’s preference must be received on or
before October 31 of the year in which said Section 2(a) notice was
received. Such indication must state the portion of the Award the
Potential Participant desires to be deferred. If an indication is not
received by October 31, the Potential Participant will be deemed to
have elected to receive and not to defer any such Incentive
Compensation Plan award.
	 
	 	 	 	Such indication of preference, if accepted, becomes irrevocable on
November 1 of the year in which the indication is submitted to the
Committee or CEO, except that, in the event of any of the following:

	 	i)	 	the Employee is demoted to a job classification/grade
that is no longer eligible to receive an Award from an Incentive
Compensation Plan,
	 
	 	ii)	 	the Employee’s employment status is classified to a
status other than regular full-time or its equivalent, or
	 
	 	iii)	 	the Employee is receiving Unavoidable Absence Benefits
(UAB) pay such that the pay received is less than his/her pay had
been prior to being on UAB,

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	 	 	 	the Employee can request, subject to approval by the Plan
Administrator, that his/her indication of preference to defer, whether
approved or not, be revoked for that Incentive Compensation Plan
Award.
	 
	 	 	 	The Committee or CEO, as applicable, shall consider such indication of
preference as submitted and shall decide whether to accept or reject
the preference expressed.
	 
	 	(b)	 	Restricted Stock and Restricted Stock Unit Awards Lapsing.

If a Potential Participant prefers to delay the lapsing of the
restrictions on part or all of the shares of Restricted Stock and/or
Restricted Stock Units to which a notice received under Section 2(b)
pertains, the Potential Participant must indicate such preference in a
manner prescribed by the Plan Administrator, (i) if the Potential
Participant is subject to Section 16 of the Exchange Act, to the
Committee, or (ii) if the Potential Participant is not subject to
Section 16 of the Exchange Act, to the CEO. The Potential
Participant’s preference must state the percentage of the shares
and/or units on which the lapsing is to be delayed. If an indication
is not received by October 31, the Potential Participant will be
deemed to have elected to have the restrictions lapsed if the
Compensation Committee takes action to lapse restrictions or as
specified under the terms of the Special Restricted Stock and/or
Restricted Stock Unit Awards. If the Potential Participant prefers to
delay the lapsing of the restrictions on part or all of the shares of
Restricted Stock or Restricted Stock Units awarded under an Incentive
Compensation Plan, the Long Term Incentive Compensation Plan, a Long
Term Incentive Plan, or Strategic Incentive Plan, those shares and/or
units will be subject to another indication of preference in the
following year. If the Potential Participant prefers to delay the
lapsing of the restrictions on part or all of the shares of Restricted
Stock or Restricted Stock Units from Special Stock Awards, those
shares and/or units will remain restricted and the Employee will
receive a notice to indicate a preference for such shares when the
Employee is or will be 55 years of age or older prior to the end of
the calendar year as specified in
Section 2(b)(i).

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	 	(c)	 	Restricted Stock or Restricted Stock Unit Deferral. If a
Potential Participant prefers to defer under this Plan the value of
all or any part of the Restricted Stock or Restricted Stock Units to
which a notice received under Section 2(c) pertains, the Potential
Participant must indicate such preference, in a manner prescribed by
the Plan Administrator, (i) if the Potential Participant is subject to
Section 16 of the Exchange Act, to the Committee, or (ii) if the
Potential Participant is not subject to Section 16 of the Exchange
Act, to the CEO. The Potential Participant’s preference must be
received on or before October 31 of the year in which said Section
2(c) notice was received. Such indication must state the portion of
the value of the Restricted Stock or Restricted Stock Units the
Potential Participant desires to be deferred. If an indication is not
received by October 31, the Potential Participant will be deemed to
have elected to receive any shares or units for which the restrictions
are lapsed. Such indication of preference becomes irrevocable on
November 1 of the year in which the indication is submitted to the
Committee or CEO. The Committee or CEO, as applicable, shall consider
such indication of preference as submitted and shall decide whether to
accept or reject the preference expressed. A deferral of the value of
the Restricted Stock or Restricted Stock Units will be paid under the
terms of Section 5(b)(i) hereof — 10 annual installments commencing
about one year after Retirement at age 55 or above, but subject to
revision under the terms of this Plan. Such approved indication of
preference shall also apply to any Restricted Stock Units granted in
exchange for shares of Restricted Stock pursuant to the Exchange offer
initiated by the Company on December 17, 2001.
	 
	 	(d)	 	Lump Sum Distribution from Non-Qualified Retirement Plans. If a
Potential Participant prefers to defer under this Plan all or part of
the lump sum distribution to which Section 2(d) pertains, the
Potential Participant must indicate such preference, in a manner
prescribed by the Plan Administrator, (i) if the Potential Participant
is subject to Section 16 of the Exchange Act, to the Committee or (ii)
if the Potential Participant is not subject to Section 16 of the
Exchange Act, to the CEO. The Potential Participant’s preference must
be received in the period beginning 90 days prior to and ending no
less than 30 days prior to the date of commencement of

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	 	 	 	retirement benefits under such plans. Such indication must state the
portion of the lump sum distribution the Potential Participant desires
to be deferred. The Committee or CEO, as applicable, shall consider
such indication of preference as submitted and shall decide whether to
accept or reject the preference expressed as soon as practicable.
Such indication of preference, if accepted, becomes irrevocable on the
date of such acceptance.
	 
	 	(e)	 	Lump Sum from Defined Contribution Makeup Plan. If a Potential
Participant prefers to defer under this Plan all or part of the lump
sum cash payment to which Section 2(e) pertains, the Potential
Participant must indicate such preference, in a manner prescribed by
the Plan Administrator, (i) if the Potential Participant is subject to
Section 16 of the Exchange Act, to the Committee or (ii) if the
Potential Participant is not subject to Section 16 of the Exchange
Act, to the CEO. The Potential Participant’s preference must be
received in the period beginning 365 days prior to and ending no less
than 90 days prior to the Participant’s retirement date at age 55 or
above except that if a Potential Participant is notified of layoff
during or after the year in which the Potential Participant reaches
age 50, the Potential Participant’s preference must be received no
later than 30 days after being notified of layoff. Such indication
must state the portion of the lump sum payment the Potential
Participant desires to be deferred. The Committee or CEO, as
applicable, shall consider such indication of preference as submitted
and shall decide whether to accept or reject the preference expressed
as soon as practicable. Such indication of preference, if accepted,
becomes irrevocable on the date of such acceptance. A deferral of the
lump sum from the Defined Contribution Makeup Plan will be paid under
the terms of Section 5(b)(i) hereof — 10 annual installments
commencing about one year after retirement at age 55 or above, but
subject to revision under the terms of the Plan.
	 
	 	(f)	 	Salary Reduction. If a Potential Participant elects to
voluntarily reduce Salary and receive an Award hereunder in lieu
thereof, the Potential Participant must make an election, in the
manner prescribed by the Plan Administrator, which must be received on
or before October 31 prior to the beginning of the calendar year of
the elected

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	 	 	 	deferral or for Newhire Employees as soon as practicable within a
30-day period after their first day of employment or reemployment.
Such election must be in writing signed by the Potential Participant,
and must state the amount of the salary reduction the Potential
Participant elects. Such election becomes irrevocable on October 31
prior to the beginning of the calendar year or for Newhire Employees
after the 30-day period after their first day of employment or
reemployment, except that in the event of any of the following:

	 	i)	 	the Employee is demoted to a job
classification/grade that is no longer eligible to receive
an Award from an Incentive Compensation Plan,
	 
	 	ii)	 	the Employee’s employment status is
classified to a status other than regular full-time or its
equivalent, or
	 
	 	iii)	 	the Employee is receiving Unavoidable
Absence Benefits (UAB) pay such that the pay received is
less than his/her pay had been prior to being on UAB,

	 	 	 	the Employee can request, subject to approval by the Plan Benefits
Administrator, that his/her election to voluntarily reduce his/her
salary be revoked for the remainder of the calendar year.
	 
	 	 	 	An Award in lieu of voluntarily reduced salary will be paid under the
terms of
Section 5(b)(i) hereof — 10 annual installments commencing about one
year after retirement at age 55 or above, but subject to revision
under the terms of the Plan.
	 
	 	(g)	 	Performance Based Incentive Award. The Potential Participant who
is eligible to receive a Performance Based Incentive Award in the
immediately following calendar year, must indicate a preference, in a
manner prescribed by the Plan Administrator, (i) if the Potential
Participant is subject to Section 16 of the Exchange Act, to the
Committee, or (ii) if the Potential Participant is not subject to
Section 16 of the Exchange Act, to the CEO. The Potential
Participant’s preference must be received on or before October 31 of
the year in which said Section 2(g) notice was received. Such
indication must state the portion of the award the Potential
Participant desires to be in cash, the portion to be deferred and the
portion to be in Restricted Stock. If an

-14-

 

	 	 	 	indication is not received by October 31 the Potential Participant
will be deemed to have elected to receive the award as cash. Such
indication of preference becomes irrevocable on November 1 of the year
in which the indication is submitted to the Committee or CEO. The
Committee or CEO, as applicable, shall consider such indication of
preference as submitted and shall decide whether to accept or reject
the preference expressed.

SECTION 4. Deferred Compensation Accounts.

	 	(a)	 	Credit for Deferral. Amounts deferred pursuant to Section 3(a)
and Section 5(h)(1) will be credited to the Participant’s Deferred
Compensation Account as soon as practicable, but not less than 30 days
after the Settlement Date of the Incentive Compensation Plan. Amounts
deferred pursuant to Section 3(c) and Section 5(h)(2) will be
credited, as applicable, as soon as practicable, but not later than 30
days after the date as of which the restrictions lapse at the market
value of the underlying Restricted Stock or the shares represented by
the Restricted Stock Units awarded under an Incentive Compensation
Plan, the Long Term Incentive Compensation Plan, a Long Term Incentive
Plan or a Strategic Incentive Plan Performance Period which began
prior to January 1, 2003. For this purpose, the market value of the
underlying Restricted Stock or the shares represented by the
Restricted Stock Units, as applicable, shall be based on the higher of
(i) the average of the high and low selling prices of the Stock on the
date the restrictions lapse or the last trading day before the day the
restrictions lapse if such date is not a trading day or (ii) the
average of the high three monthly Fair Market Values of the Stock
during the twelve calendar months preceding the month in which the
restrictions lapse. The monthly Fair Market Value of the Stock is the
average of the daily Fair Market Value of the Stock for each trading
day of the month.
	 
	 	 	 	The market value of the underlying Restricted Stock or the shares
represented by the Restricted Stock Units awarded under a Long Term
Incentive Plan Performance Period or an Incentive Compensation Plan
that began on or after January 1, 2003 and for the Special Stock
Awards issued on October 22, 2002 shall be the monthly

-15-

 

	 	 	 	average Fair Market Value of the Stock during the calendar month
preceding the month in which the restrictions lapse or shares are to
be delivered as applicable. The monthly average Fair Market Value of
the Stock is the average of the daily Fair Market Value of the Stock
for each trading day of the month.
	 
	 	 	 	The daily Fair Market Value of the Stock shall be deemed equal to the
average of the high and low selling prices of the Stock on the New
York Stock Exchange.
	 
	 	 	 	Amounts deferred pursuant to Section 3(e) and 3(f) and Section 5(h)(3)
will be credited to the Participant’s Deferred Compensation Account as
soon as practicable, but not later than 30 days after the cash payment
would have been made had it not been deferred. Amounts deferred
pursuant to other provisions of this Plan shall be credited as soon as
practicable but not later than 30 days after the date the Award would
otherwise be payable.
	 
	 	(b)	 	Designation of Investments. The amount in each Participant’s
Deferred Compensation Account shall be deemed to have been invested
and reinvested from time to time, in such “eligible securities” as the
Participant shall designate. Prior to or in the absence of a
Participant’s designation, the Company shall designate an “eligible
security” in which the Participant’s Deferred Compensation Account
shall be deemed to have been invested until designation instructions
are received from the Participant. Eligible securities are those
securities designated by the Chief Financial Officer of the Company,
or his successor. The Chief Financial Officer of the Company may
include as eligible securities, stocks listed on a national securities
exchange, and bonds, notes, debentures, corporate or governmental,
either listed on a national securities exchange or for which price
quotations are published in The Wall Street Journal and shares issued
by investment companies commonly known as “mutual funds”. The
Participant’s Deferred Compensation Account will be adjusted to
reflect the deemed gains, losses, and earnings as though the amount
deferred was actually invested and reinvested in the eligible
securities for the Participant’s Deferred Compensation Account.

-16-

 

	 	 	 	Notwithstanding anything to the contrary in this section 4(b), in the
event the Company (or any trust maintained for this purpose) actually
purchases or sells such securities in the quantities and at the times
the securities are deemed to be purchased or sold for a Participant’s
Deferred Compensation Account, the Account shall be adjusted
accordingly to reflect the price actually paid or received by the
Company for such securities after adjustment for all transaction
expenses incurred (including without limitation brokerage fees and
stock transfer taxes).
	 
	 	 	 	In the case of any deemed purchase not actually made by the Company,
the Deferred Compensation Account shall be charged with a dollar
amount equal to the quantity and kind of securities deemed to have
been purchased multiplied by the fair market value of such security on
the date of reference and shall be credited with the quantity and kind
of securities so deemed to have been purchased. In the case of any
deemed sale not actually made by the Company, the account shall be
charged with the quantity and kind of securities deemed to have been
sold, and shall be credited with a dollar amount equal to the quantity
and kind of securities deemed to have been sold multiplied by the fair
market value of such security on the date of reference. As used in
this paragraph “fair market value” means in the case of a listed
security the closing price on the date of reference, or if there were
no sales on such date, then the closing price on the nearest preceding
day on which there were such sales, and in the case of an unlisted
security the mean between the bid and asked prices on the date of
reference, or if no such prices are available for such date, then the
mean between the bid and asked prices to the nearest preceding day for
which such prices are available.
	 
	 	 	 	The Chief Financial Officer of the Company may also designate a third
party to provide services that may include record keeping, Participant
accounting, Participant communication, payment of installments to the
Participant, tax reporting, and any other services specified by the
Company in agreement with such third party.

-17-

 

	 	(c)	 	Payments. A Participant’s Deferred Compensation Account shall be
debited with respect to payments made from the account pursuant to
this Plan as of the date such payments are made from the account. The
payment shall be made as soon as practicable, but no later than 30
days, after the installment payment date.
	 
	 	 	 	If any person to whom a payment is due hereunder is under legal
disability as determined in the sole discretion of the Plan
Administrator, the Plan Administrator shall have the power to cause
the payment due such person to be made to such person’s guardian or
other legal representative for the person’s benefit, and such payment
shall constitute a full release and discharge of the Company, the Plan
Administrator, and any fiduciary of the Plan.
	 
	 	(d)	 	Statements. At least one time per year the Company or the
Company’s designee will furnish each Participant a written statement
setting forth the current balance in the Participant’s Deferred
Compensation Account, the amounts credited or debited to such account
since the last statement and the payment schedule of deferred Awards
and deemed gains, losses, and earnings accrued thereon as provided by
the deferred payment option selected by the Participant.

SECTION 5. Payments from Deferred Compensation Accounts.

	 	(a)	 	Election of Method of Payment for an Incentive Compensation Plan
Award. At the time a Potential Participant submits an indication of
preference to defer all or any part of an Award under an Incentive
Compensation Plan as provided in Section 3(a) above, the Potential
Participant shall also elect in a manner prescribed by the Plan
Administrator, which of the payment options, provided for in Paragraph
(b) of this Section, shall apply to the deferred portion of said Award
adjusted for any deemed gains, losses and earnings accrued thereon
credited to the
(b) Participant’s Deferred Compensation Account under this Plan.
Subject to Paragraphs (e), (g), and (h) of this Section, if the
Committee or CEO, as appropriate, accepts the

-18-

 

	 	 	 	Potential Participant’s indication of preference, the election of the
method of payment of the amount deferred shall become irrevocable.

	 	(b)	 	Payment Options. A Potential Participant may elect to have the
deferred portion of an Incentive Compensation Plan Award adjusted for
any deemed gains, losses, and earnings accrued thereon paid:

	 	(i)	 	(Post-Retirement) in 10 annual installments, the
payment of the first of such installments to commence on the
first day of the first calendar quarter which is on or after the
first anniversary of the Potential Participant’s first day of
Retirement at age 55 or above, or
	 
	 	(ii)	 	(Pre-Retirement) in annual installments of not less
than 5 nor more than 10, in semi-annual installments of not less
than 10 nor more than 20, or in quarterly installments of not
less than 20 nor more than 40. The first of such installments to
commence, as soon as practicable after any date specified by the
Potential Participant, so long as such date is the first day of a
calendar quarter, is on or after the Settlement Date, is at least
one year from the date the payout option was elected, and is
prior to the date the Potential Participant will attain the
Participant’s Normal Retirement Date under the terms of the
Retirement Income Plan.

	 	(c)	 	Election of Method of Payment of the Value of Restricted Stock
and Restricted Stock Units. As provided in Section 3(c) above, a
deferral of the value of all or part of the Restricted Stock or
Restricted Stock Units will be considered payment option (b)(i) of
this Section subject to Paragraphs (e) and (g) of this Section.
	 
	 	(d)	 	Election of Method of Payment of a Lump Sum Distribution from
Non-Qualified Retirement Plans. At the time a Potential Participant
submits an indication of preference to defer all or part of the lump
sum distribution as provided in Section 3(d) above, the Potential
Participant shall also elect in a manner prescribed by the Plan

-19-

 

	 	 	 	Administrator which payment option shall apply to the deferred lump
sum adjusted for any gains, losses and earnings to be accrued thereon
credited to the Participant’s Deferred Compensation Account under this
Plan. The payment options are annual installments of not less than 1
nor more than 15, semi-annual installments of not less than 2 nor more
than 30, or quarterly installments of not less than 4 nor more than
60. The first installment to commence as soon as practicable after any
date specified by the Potential Participant, so long as such date is
the first day of a calendar quarter and is at least one year and not
later than five years from the date the payout option was elected.
Subject to Paragraph (g) of this Section, if the Committee or CEO, as
appropriate, accepts the Potential Participant’s indication of
preference, the election of the method of payment of the amount
deferred shall become irrevocable.
	 
	 	(e)	 	Payment Option Revisions. If a Section 5(b)(i) payment option
applies to any part of the balance of a Participant’s Deferred
Compensation Account, the Participant may revise such payment option
as follows:

	 	(i)	 	Prior to Retirement. The Participant at any time
during a period beginning 365 days prior to and ending 90 days
prior to the date the Participant Retires at age 55 or above may,
with respect to the total of all amounts subject to such payment
option at the time of the Participant’s retirement at age 55 or
above, in the manner prescribed by the Plan Administrator, revise
such payment option and elect one of the payment options
specified in (e)(iv) of this Section to apply to such total
amount in place of such payment option.
	 
	 	(ii)	 	Upon Layoff. If a Participant who is eligible to
Retire or who is Laid Off during or after the year in which the
Participant reaches age 50 is notified of Layoff, the Participant
may, no later than 30 days after being notified of Layoff, in the
manner prescribed by the Plan Administrator, revise such payment
option and elect one of the payment options specified in (e)(iv)
of this Section to apply to such total amount in place of such
payment option.

-20-

 

	 	(iii)	 	If Disabled. The Participant may at any time during a
period from the date of the beginning of the qualifying period
for the Company’s Long Term Disability Plan or similar plan to no
later than 90 days prior to the end of such period, or within 30
days of the amendment of this Plan providing for such election,
in the manner prescribed by the Plan Administrator, revise such
payment option and elect one of the payment options specified in
(e)(iv) of this Section to apply to the total of all amounts
subject to such payment option; provided, however, that after the
payments have begun, such payments may be made in a different
manner if, the Participant due to an unanticipated emergency
caused by an event beyond the control of the Participant results
in financial hardship to the Participant, so request and the CEO
gives written consent to the method of payment requested.
	 
	 	(iv)	 	Payment Options After Revision. If a Participant
revises a Section 5(b)(i) payment option as specified in (e)(i),
(e)(ii) or (e)(iii) of this Section, the Participant may select
payments in annual installments of not less than 1 nor more than
15, in semi-annual installments of not less than 2 nor more than
30, or in quarterly installments of not less than 4 nor more than
60 with the first installment to commence, as soon as practicable
following any date specified by the Participant so long as such
date is the first day of a calendar quarter, is on or after the
Participant’s first day of Retirement at age 55 or above or the
first day the Participant is no longer an Employee following
Layoff, is at least one year and no more than five years from the
date the payment option was revised.

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

-21-

 

	 	(g)	 	Death of Participant. Upon the death of a Participant, the
Participant’s beneficiary or beneficiaries designated in accordance
with Section 6, or in the absence of an effective beneficiary
designation, the surviving spouse, surviving children (natural or
adopted) in equal shares, or the Estate of the deceased Participant,
in that order of priority, shall receive payments in accordance with
the payment option selected by the Participant, if death occurred
after such payments had commenced; or if death occurred before
payments have commenced, the beneficiary may select payments in annual
installments of not less than 1 nor more than 15, in semi-annual
installments of not less than 2 nor more than 30, or in quarterly
installments of not less than 4 nor more than 60 with the first
installment to commence, as soon as practicable following any date
specified by the beneficiary so long as such date is the first day of
a calendar quarter and is at least one year and no more than five
years from the date the payment option is selected and is not later
than the date the deceased Participant would have been age 65;
provided, however, such payments may be made in a different manner if
the beneficiary or beneficiaries entitled to receive or receiving such
payments, due to an unanticipated emergency caused by an event beyond
the control of the beneficiary or beneficiaries that results in
financial hardship to the beneficiary or beneficiaries, so requests
and the CEO gives written consent to the method of payment requested.
	 
	 	(h)	 	Disability of Participant. In the event a Participant or
Employee becomes disabled, the individual may, in the period from the
date of the beginning of the qualifying period for the Company’s Long
Term Disability Plan to no later than 90 days prior to the end of such
period, or within 30 days of the amendment of this Plan providing for
such election, indicate a preference, in a manner prescribed by the
Plan Administrator, for any of the following:

	 	1)	 	to defer part or all of any Incentive Compensation Plan
Award the Employee is eligible to receive in the immediately
following calendar year,

-22-

 

	 	2)	 	to defer part or all of the value of the Stock which
would otherwise be delivered to the Employee when the
restrictions lapse on any Restricted Stock or Restricted Stock
Units or Restricted Stock Units are settled,
	 
	 	3)	 	to defer part or all of the value from their account
under the Defined Contribution Makeup Plan which would otherwise
be paid as a lump sum to the Participant.

	 	 	 	Such indications of preference shall be subject to approval by the
Committee if the Potential Participant is subject to Section 16 of the
Exchange Act or by the CEO if the Potential Participant is not subject
to Section 16 of the Exchange Act. The Committee or CEO, as
applicable, shall consider such indication or preference as submitted
and shall decide whether to accept or reject the preference expressed.
	 
	 	 	 	Such indications of preference, if accepted, become irrevocable on the
date of such acceptance. A deferral of any amount will be paid under
the terms of Section 5(b)(i) hereof — ten (10) annual installments,
but subject to revision as specified under the terms of this Plan.
	 
	 	(i)	 	Termination of Employment.

In the event a Participant’s employment with the Company, any
Participating Subsidiary, or any other subsidiary of the Company
terminates for any reason other than death, Retirement at age 55 or
above, Disability, or Layoff during or after the year in which the
Participant reaches age 50, the entire balance of the Participant’s
Deferred Compensation Account shall be paid to the Participant in one
lump sum as soon as practicable after the date the Participant
terminates employment, except that a Participant who becomes employed
by a member of the Affiliated Group immediately after terminating
employment with the Company or Participating Subsidiary shall not
receive their benefit under the Plan until the Participant terminates
employment from the Affiliated Group; provided, however, the
Committee, in its sole discretion, may
elect to make such payments in the amounts and on such schedule as it
may determine.

-23-

 

	 	(j)	 	Rehire of Participant.

In the event a Participant is a Rehired Participant, he/she will be
eligible to receive notifications as specified in Section 2 and will
be eligible to submit an Indication of Preference or Election to Defer
as specified in Section 3, if the Participant agrees to the suspension
of payments from his/her Deferred Compensation Account during the
period of reemployment by the Company. Upon termination of
reemployment, such payments shall resume on the same schedule as was
in effect at the time the Participant previously Retired or was Laid
Off.

SECTION 6. Special Provisions for Former ARCO Alaska Employees.

Notwithstanding any provisions to the contrary, in order to comply with the
terms of the Master Purchase and Sale Agreement (“Sale Agreement”) by which
the Company acquired certain Alaskan assets of Atlantic Richfield Company
(“ARCO”), a Participant who was eligible to participate in the ARCO
employee benefit plans immediately prior to becoming an Employee and who
was not employed by ARCO Marine, Inc. (a “former ARCO Alaska employee”)
may, in a manner prescribed by the Plan Administrator, indicate a
preference or make an election to:

	 	a)	 	voluntarily reduce salary and receive an Award in the amount of
the reduction credited to, at the Employee’s election, (i) an account
under this Plan, or (ii) for so long as the ARCO Executive Deferral
Plan will accept such deferrals of salary, but not beyond December 31,
2001, an account under the ARCO Executive Deferral Plan.
	 
	 	b)	 	defer any Award payable to a former ARCO employee who is
involuntarily terminated prior to April 18, 2002 in lieu of a target
ARCO Annual Incentive Plan (AIP) award, and at the Employee’s election
credit the Award to (i) an account under this Plan, or (ii) to the
ARCO Executive Deferral Plan.

-24-

 

	 	c)	 	defer the Final ARCO Supplemental Executive Retirement Plan
(SERP) benefit that will be calculated as of the earlier of April 17,
2002 or the date the former ARCO employee voluntarily or involuntarily
terminates employment from the Company or any Participating Subsidiary
to the ARCO Executive Deferral Plan.
	 
	 	d)	 	defer the value of the restricted stock granted on July 31, 2000
to an account under this Plan when the restrictions lapse on July 31,
2001, July 31, 2002 and July 31, 2002. Such indications of preference
shall be made in July of the year preceding the calendar year when the
restrictions are scheduled to lapse or as soon as practicable after
July 31, 2000 for the restrictions on the shares that are to be lapsed
on July 31, 2001.
	 
	 	e)	 	all indications of preference in Section 6(a), (b) and (c) are
subject to approval by the Compensation Committee if the Employee is
subject to Section 16 of the Exchange Act and by the CEO if the
Employee is not subject to Section 16 of the Exchange Act.
	 
	 	f)	 	for a former ARCO Alaska employee who was classified as a grade 7
or 8 under ARCO’s job classification system and was eligible under
ARCO’s Executive Deferral Plan to voluntarily reduce salary and defer
the amount of the voluntary salary reduction and who was classified as
a grade 31 or below at that time under Phillips Petroleum Company’s
job classification system, make an annual election to voluntarily
reduce salary and defer the amount of the voluntary salary reduction
for salary received from July 31, 2000 through December 31, 2000 and
for the five years from 2001 through 2005 and receive a salary
deferral credit under this Plan.

SECTION 7. Designation of Beneficiary.

Each Participant shall designate a beneficiary or beneficiaries to receive
the entire balance of the Participant’s Deferred Compensation Account by
giving signed written notice of such designation to the Plan Administrator.
The Participant may from time to time change or

-25-

 

cancel any previous beneficiary designation in the same manner. The last
beneficiary designation received by the Plan Administrator shall be
controlling over any prior designation and over any testamentary or other
disposition. After acceptance by the Plan Administrator of such written
designation, it shall take effect as of the date on which it was signed by
the Participant, whether the Participant is living at the time of such
receipt, but without prejudice to the Company or the CEO on account of any
payment made under this Plan before receipt of such designation.

SECTION 8. Nonassignability.

The right of a Participant, or beneficiary, or other person who becomes
entitled to receive payments under this Plan, shall not be assignable or
subject to garnishment, attachment or any other legal process by the
creditors of, or other claimants against, the Participant, beneficiary, or
other such person.

SECTION 9. Administration.

	(a)	 	The Plan Administrator may adopt such rules, regulations, and forms as
deemed desirable for administration of the Plan and shall have the
discretionary authority to allocate responsibilities under the Plan to
such other persons as may be designated.
	 
	(b)	 	Any claim for benefits hereunder shall be presented in writing to the
Plan Administrator for consideration, grant or denial. In the event that
a claim is denied in whole or in part by the Plan Administrator, the
claimant, within ninety days of receipt of said claim by the Plan
Administrator, shall receive written notice of denial. Such notice shall
contain:

	 	(1)	 	a statement of the specific reason or reasons for the denial;
	 
	 	(2)	 	specific references to the pertinent provisions hereunder on
which such denial is based;

-26-

 

	 	(3)	 	a description of any additional material or information
necessary to perfect the claim and an explanation of why such
material or information is necessary; and
	 
	 	(4)	 	an explanation of the following claims review procedure set
forth in paragraph (c) below.

	(c)	 	Any claimant who feels that a claim has been improperly denied in whole
or in part by the Plan Administrator may request a review of the denial by
making written application to the Trustee. The claimant shall have the
right to review all pertinent documents relating to said claim and to
submit issues and comments in writing to the Trustee. Any person filing
an appeal from the denial of a claim must do so in writing within sixty
days after receipt of written notice of denial. The Trustee shall render
a decision regarding the claim within sixty days after receipt of a
request for review, unless special circumstances require an extension of
time for processing, in which case a decision shall be rendered within a
reasonable time, but not later than 120 days after receipt of the request
for review. The decision of the Trustee shall be in writing and, in the
case of the denial of a claim in whole or in part, shall set forth the
same information as is required in an initial notice of denial by the Plan
Administrator, other than an explanation of this claims review procedure.
The Trustee shall have absolute discretion in carrying out its
responsibilities to make its decision of an appeal, including the
authority to interpret and construe the terms hereunder, and all
interpretations, findings of fact, and the decision of the Trustee
regarding the appeal shall be final, conclusive and binding on all
parties.
	 
	(d)	 	Compliance with the procedures described in paragraphs (b) and (c) shall
be a condition precedent to the filing of any action to obtain any benefit
or enforce any right which any individual may claim hereunder.
Notwithstanding anything to the contrary in the Plan, these paragraphs
(b), (c) and (d) may not be amended without the written consent of a
seventy-five percent (75%) majority of Participants and Beneficiaries and
such paragraphs shall survive the termination of this Plan until all
benefits accrued hereunder have been paid.

-27-

 

SECTION 10. Employment not Affected by Plan.

Participation or nonparticipation in this Plan shall neither adversely
affect any person’s employment status, or confer any special rights on any
person other than those expressly stated in the Plan. Participation in the
Plan by an Employee of the Company or of a Participating Subsidiary shall
not affect the Company’s or the Participating Subsidiary’s right to
terminate the Employee’s employment or to change the Employee’s
compensation or position.

SECTION 11. Determination of Recipients of Awards.

The determination of those persons who are entitled to Awards under an
Incentive Compensation Plan and any other such plans shall be governed
solely by the terms and provisions of the applicable plan, and the
selection of an Employee as a Potential Participant or the acceptance of an
indication of preference to defer an Award hereunder shall not in any way
entitle such Potential Participant to an Award.

SECTION 12. Method of Providing Payments.

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

-28-

 

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

SECTION 13. Amendment or Termination of Plan.

Subject to Paragraph 9(d), the Company reserves the right to amend this
Plan from time to time or to terminate the Plan entirely, provided,
however, that no amendment may affect the balance in a Participant’s
account on the effective date of the amendment. No Participant shall
participate in a decision to amend or terminate this Plan. In the event of
termination of the Plan, the Chief Executive Officer, in his sole
discretion, may elect to pay to the Participant in one lump sum as soon as
practicable after termination of the Plan, the balance then in the
Participant’s account.

SECTION 14. Miscellaneous Provisions.

	 	(a)	 	Except as otherwise provided herein, the Plan shall be binding
upon the Company, its successors and assigns, including but not
limited to any corporation which may acquire all or substantially all
of the Company’s assets and business or with or into which the Company
may be consolidated or merged.
	 
	 	(b)	 	This Plan shall be construed, regulated, and administered in
accordance with the laws of the State of Texas except to the extent
that said laws have been preempted by the laws of the United States.

SECTION 15. Effective Date of the Plan.

This Plan is amended and restated effective as of April 1, 2003.

-29-

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