Document:

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                                                                   Exhibit 10.13

                               Amended by the Board of Directors August 26, 2002

                       ANNUAL INCENTIVE COMPENSATION PLAN
                                       OF
                           PHILLIPS PETROLEUM COMPANY

SECTION 1. PURPOSE AND ESTABLISHMENT

The purpose of the Annual Incentive Compensation Plan of Phillips Petroleum
Company (the "Plan") is to benefit the shareholders of Phillips Petroleum
Company by encouraging high levels of performance by individuals whose
performance is a key element in achieving the Company's continued financial and
operational success and to enable the Company to recruit, reward, retain and
motivate all employees to work as a team to achieve the Company's mission of
being the top performer in each of our businesses through the recognition and
reward of such performance on an annual basis when measured against
predetermined annual performance objectives.

The Annual Incentive Compensation Plan of Phillips Petroleum Company is
established effective January 1, 1993.

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SECTION 2. DEFINITIONS

      As used in this Plan:

      (a)   "AWARD" means the grant of cash or any other form of Share based or
            non-Share based Award granted pursuant to this Plan.

      (b)   "AWARD AGREEMENT" means a written agreement between the Company and
            a Participant that sets forth the terms, conditions and any
            limitations applicable to an Award granted to the Participant.

      (c)   "BENEFICIARY" means a person or persons designated by a Participant
            to receive, in the event of death, any unpaid portion of an Award
            held by the Participant. Any Participant may, subject to such
            limitations as may be prescribed by the Committee, designate one or
            more persons primarily or contingently as beneficiaries in writing
            upon forms supplied by and delivered to the Company, and may revoke
            such designations in writing. If a Participant fails effectively to
            designate a beneficiary, then the Award will be paid in the
            following order of priority:

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                  Surviving spouse

                  Surviving children in equal shares

                  To the estate of the Participant.

      (d)   "BOARD" means the Board of Directors of Phillips Petroleum Company.

      (e)   "CODE" means the Internal Revenue Code of 1986, as amended and in
            effect from time to time, or any successor statute.

      (f)   "COMMITTEE" means the Compensation Committee of the Board of
            ConocoPhillips or any successor committee with substantially the
            same responsibilities.

      (g)   "COMPANY" means Phillips Petroleum Company, a Delaware corporation,
            or any successor corporation.

      (h)   "DISABILITY" shall mean the inability, in the opinion of the
            Company's group life insurance carrier, of a Participant, because of
            an injury or sickness, to work at a reasonable occupation which is
            available with the Company or at any gainful occupation which the
            Participant is or

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            may become fitted.

      (i)   "EMPLOYEE" means any individual who is a salaried employee of the
            Company or any Participating Subsidiary.

      (j)   "EXCHANGE ACT" means the Securities Exchange Act of 1934, as amended
            and in effect from time to time, or any successor statute.

      (k)   "FAIR MARKET VALUE PER SHARE" in reference to the common stock of
            the Company means

            (i)   the average of the reported highest and lowest sale prices per
                  share of such stock as reported on the composite tape of the
                  New York Stock Exchange transactions (or such other reporting
                  system as shall be selected by the Committee), on the relevant
                  date; or

            (ii)  in the absence of reported sales on that date, the average of
                  the reported highest and lowest sales prices per share on the
                  last previous day for which there was a reported sale.

      (l)   "PARTICIPANT" means any Employee who has been designated

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            by the Committee to be eligible for an Award under this Plan.

      (m)   "PARTICIPATING SUBSIDIARY" means a subsidiary of the Company, of
            which the Company beneficially owns, directly or indirectly, more
            than 50% of the aggregate voting power of all outstanding classes
            and series of stock, and one or more employees of which are
            Participants, or are eligible for Awards pursuant to the Plan.

      (n)   "PERFORMANCE MEASURES" means the criteria which the Committee will
            use to evaluate the Company's performance.

      (o)   "PLAN YEAR" means calendar year.

      (p)   "RESTRICTED STOCK" means shares of Stock which have certain
            restrictions attached to the ownership thereof.

      (q)   "RETIREMENT" means termination of employment with the Company or a
            Participating Subsidiary which qualifies the Employee for Retirement
            as that term is defined in the Retirement Income Plan of Phillips
            Petroleum Company or of the applicable retirement plan of a
            Participating Subsidiary.

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      (r)   "RULE 16B-3" has the meaning described in Section 12(c).

      (s)   "SECTION 16" means Section 16 of the Exchange Act or any successor
            regulation and the rules promulgated thereunder as they may be
            amended from time to time.

      (t)   "STOCK" mean shares of common stock of ConocoPhillips, par value
            $.01.

      (u)   "STOCK UNIT" means the right to receive a payment equivalent in
            value to one share of Stock on the date of payment.

SECTION 3. ELIGIBILITY

Awards may be granted only to Employees who are designated as Participants from
time to time by the Committee. The Committee shall determine which Employees
shall be Participants, the types of Awards to be made to Participants and the
terms, conditions and limitations applicable to the Awards.

SECTION 4.  PERFORMANCE MEASURES

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As soon as practicable after the beginning of the year the Committee shall
determine the Performance Measures for the Plan Year and shall advise
Participants of the Performance Measures. The Performance Measures may include
corporate, group, business unit and Staff objectives. The objectives may include
a combination of financial and/or operational criteria and may be measured
solely against internal targets or in comparison to the performance of an
industry peer group or both. The Committee shall establish a threshold
Performance Measure applicable to overall financial performance of the Company
which must be achieved before Awards for the Plan Year will be granted.

SECTION 5. DETERMINATION OF AWARDS

Following the completion of the Plan Year, the Committee will review the
Company's performance with respect to the Performance Measures, and in its sole
judgment, determine the amount and manner of Awards to be granted to eligible
Employees. No Awards will be granted if the threshold Performance Measure
established under Section 4 is not achieved.

SECTION 6. PAYMENT OF AWARDS

      (a)   Each Award may be made at the discretion of the Committee either in
            cash, in Stock, in Restricted Stock, in Stock

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            Units, or in another form as determined by the Committee and may be
            made partly in one form and partly in one or more other forms. In
            the case of an Award in Stock, Restricted Stock, or Stock Units, the
            number shall be determined by using the Fair Market Value Per share
            of Stock on the date of the Award, provided, however, that no
            Employee whose acquisition of Stock, Restricted Stock, Stock Units
            or other form of Award would be subject to the provisions of Section
            16 of the Exchange Act shall be eligible to receive an Award
            otherwise than in cash, and the Committee shall grant Awards to such
            persons only in cash, unless prior to the grant of any such Award
            all action necessary to qualify such award for the exemption under
            Rule 16b-3 shall have been taken.

      (b)   The payment of any Award shall be subject to such obligations or
            conditions as the Committee may specify in making or recommending
            the Award, but Awards need not be evidenced by Award Agreements.

      (c)   Part or all of a cash Award may be deferred by a Participant under
            the terms of the Key Employee Deferred Compensation Plan of Phillips
            Petroleum Company or any successor plan thereto.

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      (d)   Any Award payable in Stock or Restricted Stock may, in the
            discretion of the Committee, be paid part or all in cash, on each
            date on which payment in Stock or Restricted Stock would otherwise
            have been made, in an amount equal to the Fair Market Value per
            share of Stock on each such date, multiplied by the number of shares
            of Stock or Restricted Stock which would otherwise have been paid on
            such date.

      (e)   Awards may be granted in Restricted Stock that is issued to a
            Participant and is subject to such terms, conditions and
            restrictions as the Committee deems appropriate, which may include
            restrictions upon the sale, assignment, transfer or other
            disposition of the Restricted Stock and the requirement of
            forfeiture of the Restricted Stock upon termination of employment
            under certain specified conditions. The Committee may provide for
            the lapse of any such term or condition or waive any term or
            condition based on such factors or criteria as the Committee may
            determine. The Participant shall have, with respect to awards of
            Restricted Stock, all of the rights of a shareholder of the Company,
            including the right to vote the Restricted Stock and the rights to
            receive any cash or stock dividend on such Stock.

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      (f)   Awards may be granted in Stock Units that are subject to such terms
            and conditions as the Committee deems appropriate. The number of
            Stock Units awarded with respect to any Award shall be the number
            determined by using the Fair Market Value per share of Stock on the
            date of the Award. Any Award made in Stock Units may, in the
            discretion or the recommendation of the Committee, be paid in shares
            of Stock on each date on which payment in cash would otherwise be
            made.

      (g)   In lieu of the foregoing forms of payment of Awards, the Committee
            may specify or recommend any other form of payment which it
            determines to be of substantially equivalent economic value to the
            cash value of the Award including, without limitation, forms
            involving payments to a trust or trusts for the benefit of one or
            more Participants.

      (h)   Each payment of an Award that is to be made in cash shall be from
            the general funds of the Company or the Participating Subsidiary
            making the payment.

      (i)   In the event the Participant resigns during the Plan Year or before
            Awards are paid for the Plan Year, no Awards shall be made to that
            Participant, provided, that the

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            Committee may, in its sole discretion, determine that an Award shall
            be made with respect to the period of time during which the
            Participant was an Employee.

      (j)   In the event the Participant transfers to a non-participating
            subsidiary or otherwise becomes ineligible prior to the end of the
            Plan Year, the Participant may remain a Participant for the purpose
            of all Awards which shall have been made prior to the Participant's
            transfer or prior to the Participant becoming ineligible or are to
            be made, but in such later case, only with respect to the period of
            time during which the Participant was an eligible Participant.

      (k)   In the event the Participant terminates employment by reason of
            Disability, the Participant may remain a Participant for the purpose
            of all Awards which shall have been made prior to the Participant's
            Disability or are to be made, but in such later case, only with
            respect to the period of time prior to the Disability.

      (l)   In the event the Participant terminates employment by Retirement,
            the Participant may remain a Participant for the purpose of all
            Awards which shall have been made

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            prior to Retirement or are to be made, but in such later case, only
            with respect to the period of time during which the Participant was
            an Employee.

      (m)   In the event of the death of a Participant to whom an Award is to be
            or shall have been made, the Award or any portion thereof remaining
            unpaid may be paid to such Participant's Beneficiary either in the
            manner in which payment would have been made had the Participant not
            died or in such other manner as may be determined by the Committee.

SECTION 7. ADMINISTRATION

      (a)   The Plan and all Awards granted pursuant thereto shall be
            administered by the Committee so as to permit the Plan to comply
            with Rule 16b-3. A majority of the members of the Committee shall
            constitute a quorum. The vote of a majority of a quorum shall
            constitute action by the Committee.

      (b)   To the extent permitted by Section 12, the Committee is authorized
            to

            (i)   determine which Employees shall be Participants in

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                  the Plan and which form of Awards shall be granted to
                  Participants,

            (ii)  establish, amend and rescind rules, regulations and guidelines
                  relating to this Plan as it deems appropriate,

            (iii) interpret and administer this Plan, Awards and Award
                  Agreements,

            (iv)  establish, modify and terminate terms and conditions of Award
                  Agreements,

            (v)   grant waivers and accelerations of Plan, Award and Award
                  Agreement restrictions and

            (vi)  take any other action necessary for the proper administration
                  and operation of the Plan, all of which shall be executed in
                  accordance with the objectives of this Program.

      (c)   The Committee may delegate to the officers or employees of the
            Company the authority to carry out any of its responsibilities under
            and described in this Plan, under such conditions or limitations as
            the Committee may

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            establish, other than its authority with regard to Participants who
            are subject to Section 16.

      (d)   Determinations of the Committee and its designees shall be final,
            binding and conclusive on the Company, its Participating
            Subsidiaries, shareholders, Employees and Participants. No member of
            the Committee or any of its designees shall be personally liable for
            any action or determination made in good faith with respect to this
            Program, any Award, or any Award Agreement.

SECTION 8. ADJUSTMENTS UPON CHANGES IN CAPITALIZATION

Subject to any required action by the shareholders of ConocoPhillips, in the
event of a reorganization, recapitalization, stock split, stock dividend,
exchange of Stock, combination of Stock, merger, consolidation or any other
changes in corporate structure of ConocoPhillips affecting the Stock, or in the
event of a sale by ConocoPhillips of all or a significant part of its assets, or
any distribution to ConocoPhillips' shareholders other than a normal cash
dividend, the Committee may make appropriate adjustment in the number, kind,
price and value of Stock authorized by this Plan and any adjustments to
outstanding Awards as it determines appropriate so as to prevent dilution or
enlargement of rights.

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SECTION 9. CHANGE OF CONTROL

(a)   In the event of a Change of Control, all restrictions and other
      limitations applicable to any Restricted Stock shall lapse, and such
      Restricted Stock shall become free of all restrictions and become fully
      vested and transferable to the full extent of the original grant.

(b)   A "Change of Control" shall mean:

      (i)   The acquisition by any individual, entity or group (within the
            meaning of Section 13(d) or 14(d)(2) of the Exchange Act (a
            "Person")) of beneficial ownership (within the meaning of Rule 13d-3
            promulgated under the Exchange Act) of 20% or more of either (a) the
            then outstanding shares of common stock of ConocoPhillips (the
            "Outstanding Company Common Stock") or (b) the combined voting power
            of the then outstanding voting securities of ConocoPhillips entitled
            to vote generally in the election of directors (the "Outstanding
            Company Voting Securities"); provided, however, that for purposes of
            this subsection (i), the following acquisitions shall not constitute
            a Change of Control: (A) any acquisition directly from
            ConocoPhillips, (B) any acquisition by ConocoPhillips, (C) any
            acquisition by any employee

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            benefit plan (or related trust) sponsored or maintained by
            ConocoPhillips or any corporation controlled by ConocoPhillips or
            (D) any acquisition pursuant to a transaction which complies with
            clauses (A), (B) and (C) of subsection (iii) of this Section 9(b);
            or

      (ii)  Individuals who, as of August 26, 2002, constitute the Board of
            Directors of ConocoPhillips (the "Incumbent Board") cease for any
            reason to constitute at least a majority of the Board of Directors
            of ConocoPhillips (the "CP Board"); provided, however, that any
            individual becoming a director subsequent to August 26, 2002, whose
            election, or nomination for election by ConocoPhillips'
            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, but
            excluding, for this purpose, any such individual whose initial
            assumption of office occurs as a result of an actual or threatened
            election contest with respect to the election or removal of
            directors or other actual or threatened solicitation of proxies or
            consents by or on behalf of a Person other than the CP Board; or

      (iii) Approval by the shareholders of ConocoPhillips of a reorganization,
            merger or consolidation or sale or other

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            disposition of all or substantially all of the assets of
            ConocoPhillips or the acquisition of assets of another entity (a
            "Corporate Transaction"), in each case, unless, following such
            Corporate Transaction, (A) all or substantially all of the
            individuals and entities who were the beneficial owners,
            respectively, of the Outstanding Company Common Stock and
            Outstanding Company Voting Securities immediately prior to such
            Corporate Transaction beneficially own, directly or
            indirectly, more than 60% of, respectively, the then outstanding
            shares of common stock and the combined voting power of the then
            outstanding voting securities entitled to vote generally in the
            election of directors, as the case may be, of the corporation
            resulting from such Corporate Transaction (including, without
            limitation, a corporation which as a result of such transaction owns
            ConocoPhillips or all or substantially all of ConocoPhillips' assets
            either directly or through one or more subsidiaries) in
            substantially the same proportions as their ownership, immediately
            prior to such Corporate Transaction of the Outstanding Company
            Common Stock and Outstanding Company Voting Securities, as the case
            may be, (B) no Person (excluding any employee benefit plan (or
            related trust) of ConocoPhillips or such corporation resulting from
            such Corporate Transaction) beneficially own, directly or

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            indirectly, 20% or more of, respectively, the then outstanding
            shares of common stock of the corporation resulting from such
            Corporate Transaction or the combined voting power of the then
            outstanding voting securities of such corporation except to the
            extent that such ownership existed prior to the Corporate
            Transaction and (C) at least a majority of the members of the board
            of directors of the corporation resulting from such Corporate
            Transaction were members of the Incumbent Board at the time of the
            execution of the initial agreement, or of the action of the CP
            Board, providing for such Corporate Transaction; or

      (iv)  Approval by the shareholders of ConocoPhillips of a complete
            liquidation or dissolution of ConocoPhillips.

SECTION 10. RIGHTS OF EMPLOYEES

      (a)   Status as an eligible Employee shall not be construed as a
            commitment that any Award will be made under the Plan to such
            eligible Employee or to eligible Employees generally.

      (b)   Nothing contained in the Plan (or in any other documents

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            related to this Plan or to any Award) shall confer upon any Employee
            or Participant any right to continue in the employ or other service
            of the Company or constitute any contract or limit in any way the
            right of the Company to change such person's compensation or other
            benefits or to terminate the employment of such person with or
            without cause.

SECTION 11. COMPLIANCE WITH APPLICABLE LEGAL REQUIREMENTS

No certificate for Stock distributable pursuant to this Plan shall be issued and
delivered unless the issuance of such certificate complies with all applicable
legal requirements including, without limitation, compliance with the provisions
of applicable state securities laws, the Securities Act of 1933, as amended from
time to time or any successor statute, the Exchange Act and the requirements of
the exchanges on which the Stock may, at the time, be listed.

SECTION 12. AMENDMENTS AND TERMINATION

      (a)   The Committee or the Board, as appropriate, may, insofar as
            permitted by law, from time to time, suspend or terminate this Plan
            or revise or amend it in any respect whatsoever; provided, however,
            unless the Committee or the Board, as

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            appropriate, specifically otherwise provides, any revision or
            amendment that would cause this Plan to fail to comply with any
            requirement of applicable law, regulation or rule if such amendment
            were not approved by the shareholders of ConocoPhillips shall not be
            effective unless and until the approval of the shareholders of
            ConocoPhillips is obtained.

      (b)   Subject to the terms and conditions and within the limitations of
            this Plan, the Committee may amend, cancel, modify or extend
            outstanding Awards granted under this Plan, but no such action taken
            after a Change of Control, at the request of a third party seeking
            to effect a Change of Control, or otherwise in connection with or in
            anticipation of a Change of Control, may adversely affect the rights
            of any Participant with respect to any outstanding award without
            such Participant's consent.

      (c)   This Plan is intended to comply with Rule 16b-3 promulgated by the
            Securities and Exchange Commission as now in force or as such
            regulation or successor regulation shall be hereafter amended ("Rule
            16b-3") with respect to Participants who are subject to Section 16
            of the Exchange Act. Should the requirements of Rule 16b-3 change,
            the Board or the Committee, as appropriate, may

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            amend the program to comply with the requirements of the amended
            Rule 16b-3 or its successor provision or provisions.

SECTION 13. UNFUNDED PLAN

The Plan shall be unfunded. Neither the Company nor the Board of Directors shall
be required to segregate any assets that may, at any time, be represented by
Awards made pursuant to the Plan. Neither the Company, the Committee, nor the
Board of Directors shall be deemed to be a trustee of any amounts to be paid
under the Plan.

SECTION 14. LIMITS OF LIABILITY

      (a)   Any liability of the Company to any Participant with respect to an
            Award shall be based solely upon contracted obligations created by
            the Plan and the Award Agreement.

      (b)   Neither the Company nor any member of the Board of Directors or of
            the Committee, nor any person participating in any determination of
            any question under the Plan, or in the interpretation,
            administration or application of the Plan, shall have any liability
            to any party for any action taken or not taken, in good faith under
            the

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            Plan.

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                                                                   Exhibit 10.17

                               AMENDED BY THE BOARD OF DIRECTORS AUGUST 26, 2002

                   KEY EMPLOYEE DEFERRED COMPENSATION PLAN OF
                           PHILLIPS PETROLEUM COMPANY

                                     PURPOSE

The purpose of the Key Employee Deferred Compensation Plan of Phillips Petroleum
Company (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.

SECTION 1. Definitions.

      (a)   "Affiliated Group" shall mean the Company plus other subsidiaries
            and affiliates in which it owns 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
            the Long Term Incentive Compensation Plan, or (ii) required to be
            credited to an Employee's Deferred Compensation Account pursuant to
            the Incentive Compensation Plan, the Long Term Incentive
            Compensation Plan, the Strategic Incentive Plan, the Long Term
            Incentive Plan, or any similar plans, or any administrative
            procedure adopted pursuant thereto, (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 the Incentive
            Compensation Plan, the Long Term Incentive Compensation Plan, the
            Strategic Incentive Plan, the Long Term Incentive Plan, the Omnibus
            Securities Plan, or any similar plans, or any administrative
            procedure adopted pursuant thereto, (iv)

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            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, (v) resulting from the forfeiture of
            Restricted Stock, required by the Company, of key employees who
            become employees of GPM Gas Corporation, (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, (vii) credited as a result of an Employee's voluntary
            reduction of Salary (viii) credited as a result of an Employee's
            deferral of the settlement of a Long Term Performance Unit 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, 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 (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 Phillips Petroleum Company.

      (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.

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      (h)   "Defined Contribution Makeup Plan" shall mean the Defined
            Contribution Makeup Plan of Phillips Petroleum Company or any
            similar plan or successor plans.

      (i)   "Disability" shall mean the inability, in the opinion of the
            Company's Medical Director or the Medical Director of the Company's
            parent, of a Participant, because of an injury or sickness, to work
            at a reasonable occupation which is available with the Company,
            ConocoPhillips, a Participating Subsidiary, or another subsidiary of
            ConocoPhillips.

      (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 or is classified as a Grade 32P
            or any equivalent grade at ConocoPhillips. Employee shall also
            include Participants who are employed by a member of the Affiliated
            Group and former employees who Retire or are Laid Off and are
            eligible to receive a lump sum distribution from non-qualified
            retirement plans.

      (k)   "ERISA" shall mean the Employee Retirement Income Security Act of
            1974, as amended from time to time or any successor statute.

      (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)   "Incentive Compensation Plan" shall mean the Incentive Compensation
            Plan of the Company, or the Annual Incentive Compensation Plan of
            Phillips Petroleum Company, or similar plan of a Participating
            Subsidiary, or any similar or successor plans, or all, as the
            context may require.

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      (n)   "Layoff" or "Laid Off" shall mean layoff under the Phillips Layoff
            Plan or any similar plan which the Company, ConocoPhillips, any
            Participating Subsidiary, any member of the Affiliated Group, or any
            other subsidiary of ConocoPhillips may adopt from time to time under
            the terms of which the Participant executes and does not revoke a
            general release of liability, acceptable to the Company,
            ConocoPhillips, such Participating Subsidiary, such member of the
            Affiliated Group, or such other subsidiary of ConocoPhillips, as
            applicable, under such layoff plan.

      (o)   "Long-Term Incentive Compensation Plan" shall mean the Long-Term
            Incentive Compensation Plan of the Company which was terminated
            December 31, 1985.

      (p)   "Long-Term Incentive Plan" shall mean the Long-Term Incentive Plan,
            or similar or successor plan, established under the Omnibus
            Securities Plan of Phillips Petroleum Company.

      (q)   "Long Term Performance Unit Award" shall mean a Performance Award as
            authorized by Section 4.4 of the Omnibus Securities Plan, or similar
            or successive plan, where the applicable administrative procedure
            for such award provides that the recipient is eligible to indicate a
            preference to defer all or any part of such award.

      (r)   "Newhire Employee" shall mean any Employee who is hired or rehired
            during a calendar year.

      (s)   "Participant" shall mean a person for whom a Deferred Compensation
            Account is maintained.

      (t)   "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

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            adopted one or more plans making participants eligible for
            participation in this Plan and one or more Employees of which are
            Potential Participants.

      (u)   "Plan Administrator" shall mean the Executive Vice President,
            Planning, Corporate Relations and Services, or his successor.

      (v)   "Potential Participant" shall mean a person who has received a
            notice specified in Section 2 or in Section 5 (h).

      (w)   "Rehired Participant" shall mean a Participant who subsequent to
            Retirement or Layoff is rehired by the Company, ConocoPhillips, or
            any other subsidiary of ConocoPhillips and whose employment status
            is classified as regular full-time or its equivalent.

      (x)   "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.

      (y)   "Retirement" or "Retire", or "Retiring" shall mean termination of
            employment with the Company, ConocoPhillips, or any other subsidiary
            of ConocoPhillips on or after the earliest early retirement date as
            defined in the Retirement Income Plan of Phillips Petroleum Company
            or of the applicable retirement plan of ConocoPhillips, a
            Participating Subsidiary, a member of the Affiliated Group or any
            other subsidiary of ConocoPhillips.

      (z)   "Retirement Income Plan" shall mean the Retirement Income Plan of
            the Company or a similar retirement plan of the Participating
            Subsidiary pursuant to the terms of which the Participant retires.

                                       5
<PAGE>
      (aa)  "Settlement Date" shall mean the date on which all acts under the
            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.

      (bb)  "Salary" shall mean the monthly equivalent rate of pay for an
            Employee before adjustments for any before-tax voluntary reductions.

      (cc)  "Stock" means shares of common stock of ConocoPhillips, par value
            $.01.

      (dd)  "Strategic Incentive Plan" shall mean the Strategic Incentive Plan
            portion of the 1986 Stock Plan of the Company, of the 1990 Stock
            Plan of the Company, and of any successor plans of similar nature.

      (ee)  "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 September, Employees
            who are eligible to receive an Award in the immediately following
            calendar year under the Company's or a Participating Subsidiary's
            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 Awards. (i) Each year
            Employees who are or will become 55 years of age prior to the end of
            the calendar year or who are

                                       6
<PAGE>
            over 55 years old and have not previously been notified 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 restrictions
            lapse on Restricted Stock and/or Restricted Stock Units or the
            settlement of Restricted Stock Units previously awarded or which may
            be awarded to the Employees.

            (ii) Employees who have been granted a special Restricted Stock
            Award and/or Restricted Stock Units Award by the Compensation
            Committee, 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 will be given an opportunity within 30 days of being notified
            of Layoff, in the manner prescribed by the Plan Administrator, to
            indicate a preference concerning the deferral of the receipt of the
            values 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.

      (c)   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 for all or part
            of the lump sum distribution, if any, to be considered an Award
            under this Plan.

      (d)   Lump Sum from Defined Contribution Makeup Plan. Employees who will
            receive a

                                       7
<PAGE>
            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 of
            part of such payment.

      (e)   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 reduction shall be not 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.

      (f)   Long Term Performance Unit Award. As soon as practicable following
            the grant of a Long Term Performance Unit Award, Employees 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.

      (g)   Performance Based Incentive Award. Each year, during September,
            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

                                       8
<PAGE>
            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 1 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 1, the Potential Participant will be deemed to have
            elected to receive any ICP award awarded by the Committee.

      Such indication of preference, if accepted, becomes irrevocable on October
      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,

            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 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. The Potential Participant shall be notified in
      writing of the decision.

      (b)   Restricted Stock or Restricted Stock Units. If a Potential
            Participant prefers to defer under this Plan the value of all or any
            part of the Restricted Stock or Restricted Stock

                                       9
<PAGE>
            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 be received on or before October 1 of
            the year in which said Section 2(b) 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 1, 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 October 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. The Potential Participant shall be
            notified in writing of the decision. 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, but subject to revision under the
            terms of this Plan. Such approved indication of preference shall
            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.

      (c)   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(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 in the period beginning 90
            days prior to and ending no less than 30 days prior to the date of
            commencement of

                                       10
<PAGE>
            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.

      (d)   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(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 365 days prior to and ending no
            less than 90 days prior to the Participant's retirement date except
            that if a Potential Participant is notified of layoff during or
            after the year in which the Potential Participant reaches age 50 and
            if there is not at least 120 days between the date the Potential
            Participant is notified of layoff and the Potential Participant's
            termination date, the Potential Participant's preference must be
            received within 30 days of 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,
            but subject to revision under the terms of the Plan.

                                       11
<PAGE>
      (e)   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 November 30 prior to the beginning of the calendar year of
            the elected 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 November 30 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,

            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, but subject to revision
            under the terms of the Plan.

      (f)   Long Term Performance Unit Award. If a Potential Participant prefers
            to defer under this Plan the value of all or any part of the Long
            Term Performance Unit Award to which a notice received under Section
            2(f) pertains, the Potential Participant must

                                       12
<PAGE>
            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 90 days from the grant date of the Long Term
            Performance Unit Award. Such indication must state the portion of
            the value of the Long Term Performance Unit Award the Potential
            Participant desires to be deferred. If an indication is not received
            by 90 days from the grant date of the award, the Potential
            Participant will be deemed to have elected not to defer any portion
            of the Award. Such indication of preference becomes irrevocable 90
            days from the grant date of the 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. The Potential Participant shall be notified in
            writing of the decision. A deferral of the value of the Long Term
            Performance Unit Award will be paid under the terms of Section 5(b)
            (i) hereof - 10 annual installments commencing about one year after
            retirement, but subject to revision under the terms of this 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 1 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 indication is not
            received by October 1, the Potential Participant will be deemed to
            have elected to receive the award as cash. Such indication of
            preference becomes irrevocable on October 1 of the year in which the
            indication is submitted to the

                                       13
<PAGE>
            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(b) and Section 5(h)(2) will
            be credited at market value of the underlying Restricted Stock or
            the shares represented by the Restricted Stock Units, as applicable,
            as soon as practicable, but not later than 30 days after the date as
            of which the restrictions lapse. 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 Company
            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 Company Stock during the twelve calendar months preceding the
            month in which the restrictions lapse. The monthly Fair Market Value
            of the Company 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(d), 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.

                                       14
<PAGE>
      (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.

            Notwithstanding anything to the contrary in this section 4(b), in
            the event the Company 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

                                       15
<PAGE>
            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 herein "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 Senior Vice President and Chief Financial Officer of the Company
            may also designate a Fund Manager to provide services which may
            include recordkeeping, Participant accounting, Participant
            communication, payment of installments to the Participant, tax
            reporting and any other services specified by the Company in
            agreement with the Fund Manager.

      (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

                                       16
<PAGE>
            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 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
            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

                                       17
<PAGE>
            on or after the first anniversary of the Potential Participant's
            first day of Retirement, 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(b) 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(c) above, the Potential
            Participant shall also elect in a manner prescribed by the Plan
            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 5 nor more than 10, semi-annual installments of not less
            than 10 nor more than 20, or quarterly installments of not less than
            20 nor more than 40. 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

                                       18
<PAGE>
            and is at least one year 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 may, with respect to the
                  total of all amounts subject to such payment option at the
                  time of the Participant's retirement, 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 and if there is not at
                  least 120 days between the date the Participant is notified of
                  Layoff and the Participant's termination date, the Participant
                  may, within 30 days of 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 the such payment option.

            (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

                                       19
<PAGE>
                  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, subject to the
                  exception in (e)(v) of this Section, may select payments 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 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 or the
                  first day the Participant is no longer an Employee following
                  Layoff, is at least one year from the date the payment option
                  was revised and is not more than two calendar quarters after
                  the Participant's 70th birthday.

            (v)   Payment Option After Revision Exception. If a Participant
                  elected a Section 5(b)(i) payment option for amounts deferred
                  prior to January 1, 1994, the Participant may select payments
                  in one lump sum or annual installments of not less than 5 nor
                  more than 20 in addition to the payment options specified in
                  (e)(iii) of this Section, provided that the commencement date
                  specified by the Participant would be permitted under
                  paragraph (e)(iii) of this Section.

                                       20
<PAGE>
      (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).

      (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 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 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 from the date the
            payment option is selected and is not more than two calendar
            quarters after the date the deceased Participant would have been age
            70; 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

                                       21
<PAGE>
            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,

            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, becomes 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,
            ConocoPhillips, any Participating Subsidiary, or any other
            subsidiary of ConocoPhillips terminates for any

                                       22
<PAGE>
            reason other than death, Retirement, Disability, or by 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, ConocoPhillips or any other subsidiary of
            ConocoPhillips 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, ConocoPhillips or any other subsidiary of
            ConocoPhillips and 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.

      (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

                                       23
<PAGE>
      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.

      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

                                       24
<PAGE>
            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 is now classified
            as a grade 31 or below under Phillips' 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 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.

                                       25
<PAGE>
      (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, whether or not
            employee members of the Board of Directors.

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

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

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

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

            (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

                                       26
<PAGE>
            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.

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 the
      Incentive

                                       27
<PAGE>
      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 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.

      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

                                       28
<PAGE>
      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.

                                       29
<PAGE>
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 Oklahoma except to the
            extent that said laws have been preempted by the laws of the United
            States.

                                       30

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