Document:

Exhibit
10.1

 

February 23, 2006

 

Walter Industries, Inc.

4211 West Boy Scout Boulevard

Tampa, Florida 33607

Attention:  General Counsel

 

Mueller Water Products, Inc.

4211 West Boy Scout Boulevard

Tampa, Florida 33607

Attention: Jeffery W. Sprick

 

Ladies and Gentlemen:

 

Reference is made to the Agreement and Plan
of Merger dated as of June 17, 2005 (as amended, the “Merger
Agreement”) among Mueller Water Products, Inc., Walter Industries,
Inc., JW MergerCo, Inc. and DLJ Merchant Banking II, Inc., as the Stockholders’
Representative. Capitalized terms used but not defined herein shall have the
meanings specified in the Merger Agreement.

 

Following the delivery of the Closing
Statements by the Surviving Corporation, and delivery of a notice of
disagreement therewith by the Stockholders’ Representative, the parties hereto
have resolved all disputed items and amounts required to determine Final
Closing Cash and Final Working Capital and have agreed that the Shortfall
Amount is $10,527,000. Accordingly, the parties hereto have agreed that in
accordance with the Escrow Agreement, an officer of Buyer and an officer of the
Stockholders’ Representative shall, contemporaneously with the execution of
this letter agreement, execute and deliver the notice attached as Annex A
hereto to the Escrow Agent, to direct the Escrow Agent to release and
distribute all funds remaining in the Escrow Account in accordance with the
instructions set forth on such notice.

 

Upon the completion of the payments set forth
above, the parties confirm that all obligations of the parties under Sections
2.12 and 2.13 of the Merger Agreement shall have been performed and satisfied
in full.

 

This letter agreement shall not constitute an
amendment or waiver of any term or condition of the Merger Agreement or any
other Transaction Agreement, and all of such terms and conditions shall remain
in full force and effect. This letter agreement shall be governed by and
construed in accordance with the laws of the State of New York applicable to
contracts entered into and performed entirely in such state. This letter
agreement may be signed in any number of counterparts, each of which shall be
deemed an original, and all such counterparts shall together constitute one and
the same instrument.

 

[Signature Page Follows]

 

 

IN WITNESS WHEREOF, the parties hereto have caused this letter
agreement to be duly executed by their respective authorized officers as of the
day and year first above written.

 

 

	
   

  	
  DLJ MERCHANT BANKING II, INC.,

  
	
   

  	
  as the Stockholders’ Representative

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
    /s/ MICHAEL S. ISIKOW

  	
   

  
	
   

  	
   

  	
  Name: Michael S. Isikow

  
	
   

  	
   

  	
  Title:   Vice President

  

 

 

Agreed and Acknowledged

 

	
  WALTER INDUSTRIES, INC.

  
	
   

  
	
   

  
	
  By:

  	
    /s/  JOSEPH J. TROY

  	
   

  
	
   

  	
  Name: Joseph J. Troy

  
	
   

  	
  Title:   Senior Vice President

  
	
   

  
	
   

  
	
  MUELLER WATER PRODUCTS, INC.

  
	
   

  
	
   

  
	
  By:

  	
    /s/  VICTOR P. PATRICK

  	
   

  
	
   

  	
  Name: Victor P. Patrick

  
	
   

  	
  Title:   Vice President

  
				

 

 

Annex A

 

February 23, 2006

 

The Bank of New York

101 Barclay Street - 8W/Escrow

New York, NY 10286

Attention:  Carlos Luciano

 

Ladies and Gentlemen:

 

Reference is made to the Escrow Agreement dated as of October 3, 2005
among Mueller Water Products, Inc., Walter Industries, Inc., DLJ Merchant
Banking II, Inc., as the Stockholders’ Representative, and The Bank of New York
(the “Escrow Agreement”). Capitalized terms
used but not defined herein shall have the meanings specified in the Escrow
Agreement. This certificate is executed by Buyer and the Stockholders’
Representative pursuant to Section 5(a) of the Escrow Agreement.

 

The Escrow Agent is hereby directed to promptly release and deliver all
funds remaining in the Escrow Account as follows:

 

a)                                     $11,223,543.07,
plus 26.975% of all interest earned on the Escrow Amount to the date of payment,
to the Stockholders’ Representative, who shall distribute such amount to the
DLJ Entities in accordance with the provisions of the Merger Agreement:

 

	
  Bank:

  	
   

  	
  Citibank, N.A.

  
	
   

  	
   

  	
  399 Park Avenue

  
	
   

  	
   

  	
  New York, NY 10036

  
	
  ABA:  021000089

  
	
  Account Name:  DLJ Merchant
  Banking II, Inc.

  
	
  Account Number:  30554143

  
	
  Reference:  Mueller Water
  Products

  

 

b)                                    $3,228,793.03,
plus 7.760% of all interest earned on the Escrow Amount to the date of payment,
to the Company, which shall distribute such amount to the Stockholders and
holders of Company Warrants (in each case, other than the DLJ Entities),
subject to the deduction of the applicable withholding taxes, in accordance
with the provisions of the Merger Agreement:

 

	
  Bank:

  	
   

  	
  Mellon Bank

  
	
   

  	
   

  	
  Pittsburgh, PA

  
	
  ABA:

  	
   

  	
  043000261

  
	
  Account Name:  Mueller Water
  Products, Inc.

  
	
  Account Number: 077-1243

  

 

 

c)                                     $20,663.90 to
Davis Polk & Wardwell in respect of Transaction Expenses incurred after the
Effective Time (in each case, as defined in the Merger Agreement); and

 

	
  Bank:

  	
   

  	
  JPMorgan Chase Bank

  
	
   

  	
   

  	
  500 Stanton Christiana Rd.

  
	
   

  	
   

  	
  Newark, DE  19713

  
	
  ABA:  021 000021

  
	
  Account Name:  Davis Polk &
  Wardwell

  
	
  Account Number:  001533316

  
	
  Reference:  Mueller Water
  Products 14530/006

  

 

d)                                    $10,527,000,
plus 65.265% of all interest earned on the Escrow Amount to the date of payment,
to:

 

	
  Bank:

  	
   

  	
  Bank of America

  
	
   

  	
   

  	
  Charlotte, NC

  
	
  ABA:

  	
   

  	
  111000012

  
	
  Account Name:  Walter
  Industries, Inc.

  
	
  Account Number:  3750658039

  

 

The Escrow Agreement shall terminate in accordance with its terms when
the Escrow Agent shall have released all amounts in the Escrow Account pursuant
to the instructions set forth above.

 

[Signature Page Follows]

 

 

IN WITNESS WHEREOF, the parties hereto have
caused this certificate to be duly executed by their respective authorized
officers as of the day and year first above written.

 

	
   

  	
  DLJ MERCHANT BANKING II, INC.,

  
	
   

  	
  as the Stockholders’ Representative

  
	
   

  	
   

  
	
   

  	
  By:

  	
    /s/ MICHAEL S. ISIKOW

  	
   

  
	
   

  	
   

  	
  Name:

  	
  Michael S. Isikow

  
	
   

  	
   

  	
  Title:

  	
  Vice President

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  WALTER INDUSTRIES, INC.

  
	
   

  	
   

  
	
   

  	
  By:

  	
    /s/ JOSEPH J. TROY

  	
   

  
	
   

  	
   

  	
  Name:

  	
  Joseph J. Troy

  
	
   

  	
   

  	
  Title:

  	
  Senior Vice PresidentfExhibit
10.4

 

CHEVRON PHILLIPS CHEMICAL COMPANY
LP

EXECUTIVE DEFERRED COMPENSATION PLAN

(As Amended and Restated

Effective January 1, 2005)

 

 

TABLE OF CONTENTS

 

	
   

  	
   

  	
   

  	
   

  	
  Page

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  ARTICLE 1 -

  	
   

  	
  INTERPRETATION AND DEFINITIONS

  	
   

  	
  2

  
	
  1.1

  	
   

  	
  Interpretation

  	
   

  	
  2

  
	
  1.2

  	
   

  	
  Definitions

  	
   

  	
  3

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  ARTICLE 2 -

  	
   

  	
  PARTICIPATION

  	
   

  	
  6

  
	
  2.1

  	
   

  	
  Date of Participation

  	
   

  	
  6

  
	
  2.2

  	
   

  	
  Termination of Participation

  	
   

  	
  6

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  ARTICLE 3 -

  	
   

  	
  CONTRIBUTIONS

  	
   

  	
  7

  
	
  3.1

  	
   

  	
  Participant Contributions

  	
   

  	
  7

  
	
  3.2

  	
   

  	
  Employer Matching Contributions

  	
   

  	
  8

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  ARTICLE 4 -

  	
   

  	
  PARTICIPANT ACCOUNT

  	
   

  	
  9

  
	
  4.1

  	
   

  	
  Individual Accounts

  	
   

  	
  9

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  ARTICLE 5 -

  	
   

  	
  INVESTMENT OF CONTRIBUTIONS

  	
   

  	
  9

  
	
  5.1

  	
   

  	
  Adjustment of Accounts

  	
   

  	
  9

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  ARTICLE 6 -

  	
   

  	
  RIGHT TO BENEFITS

  	
   

  	
  9

  
	
  6.1

  	
   

  	
  Vesting

  	
   

  	
  9

  
	
  6.2

  	
   

  	
  Death

  	
   

  	
  10

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  ARTICLE 7 -

  	
   

  	
  DISTRIBUTION OF BENEFITS

  	
   

  	
  11

  
	
  7.1

  	
   

  	
  Amount of Benefits

  	
   

  	
  11

  
	
  7.2

  	
   

  	
  Determination of Method of Distribution to
  Participants

  	
   

  	
  11

  
	
  7.3

  	
   

  	
  Distribution on Disability

  	
   

  	
  11

  
	
  7.4

  	
   

  	
  Notice to Trustee

  	
   

  	
  12

  
	
  7.5

  	
   

  	
  Unforeseeable Emergency

  	
   

  	
  12

  
	
  7.6

  	
   

  	
  Cashouts of Amounts Not Exceeding $10,000

  	
   

  	
  13

  
	
  7.7

  	
   

  	
  Effect of Early Taxation

  	
   

  	
  13

  
	
  7.8

  	
   

  	
  Permitted Delays

  	
   

  	
  13

  
	
  7.9

  	
   

  	
  Adjustment of Investment Experience

  	
   

  	
  13

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  ARTICLE 8 -

  	
   

  	
  AMENDMENT AND TERMINATION

  	
   

  	
  13

  
	
  8.1

  	
   

  	
  Amendment by the Company

  	
   

  	
  13

  
	
  8.2

  	
   

  	
  Retroactive Amendments

  	
   

  	
  14

  
	
  8.3

  	
   

  	
  Plan Termination

  	
   

  	
  14

  
	
  8.4

  	
   

  	
  Distribution upon Termination of the Plan

  	
   

  	
  14

  

 

i

 

	
   

  	
   

  	
   

  	
   

  	
  Page

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  ARTICLE 9 -

  	
   

  	
  THE TRUST

  	
   

  	
  14

  
	
  9.1

  	
   

  	
  Establishment of Trust

  	
   

  	
  14

  
	
  9.2

  	
   

  	
  Investment of Trust Funds

  	
   

  	
  14

  
	
  9.3

  	
   

  	
  Information Between Employer and Trustee

  	
   

  	
  14

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  ARTICLE 10 -

  	
   

  	
  MISCELLANEOUS

  	
   

  	
  15

  
	
  10.1

  	
   

  	
  Unsecured General Creditor of the Employer

  	
   

  	
  15

  
	
  10.2

  	
   

  	
  Employer’s Liability

  	
   

  	
  15

  
	
  10.3

  	
   

  	
  Limitation of Rights

  	
   

  	
  15

  
	
  10.4

  	
   

  	
  No Assignment of Benefits

  	
   

  	
  15

  
	
  10.5

  	
   

  	
  Facility of Payment

  	
   

  	
  16

  
	
  10.6

  	
   

  	
  Notices

  	
   

  	
  16

  
	
  10.7

  	
   

  	
  Governing Law

  	
   

  	
  16

  
	
  10.8

  	
   

  	
  Successors and Mergers, and/or Consolidation

  	
   

  	
  16

  
	
  10.9

  	
   

  	
  Employment Not Affected by the Plan

  	
   

  	
  16

  
	
  10.10

  	
   

  	
  Severability

  	
   

  	
  16

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  ARTICLE 11 -

  	
   

  	
  PLAN ADMINISTRATION

  	
   

  	
  17

  
	
  11.1

  	
   

  	
  Powers and Responsibilities the DCP Committee

  	
   

  	
  17

  
	
  11.2

  	
   

  	
  Claims and Review Procedures

  	
   

  	
  17

  
	
  11.3

  	
   

  	
  Plan Administrative Costs

  	
   

  	
  19

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  ARTICLE 12 -

  	
   

  	
  PARTICIPATING EMPLOYERS

  	
   

  	
  20

  
	
  12.1

  	
   

  	
  Adoption of the Plan

  	
   

  	
  20

  
	
  12.2

  	
   

  	
  Termination of Plan Participation

  	
   

  	
  20

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  APPENDIX A

  	
   

  	
   

  	
   

  	
  21

  

 

ii

 

PREAMBLE

 

The purpose of the Chevron Phillips Chemical
Company LP Executive Deferred Compensation Plan (the “Plan”) is to provide to
key employees of the Company an opportunity to defer the receipt of incentive
Bonuses and/or other compensation as a means of saving for their retirement or
other purposes.

 

It is intended that this Plan be a plan that
is an unfunded deferred compensation program maintained “for a select group of
management or highly compensated employees” within the meaning of the Employee
Retirement Income Security Act of 1974, as amended (“ERISA”), and shall be
implemented and administered in a manner consistent with this intention. Thus,
the Plan is subject to Title I of ERISA, but is exempt from Parts 2,
3 and 4 thereof. It is also intended that the Plan comply with the requirements
of Section 409A of the Internal Revenue Code, as added by the American Jobs
Creation Act of 2004 (“Section 409A”).

 

This Plan was originally effective as of
January 1, 2001, and was amended and restated effective January 1, 2003.

 

The Plan is, except as otherwise set forth in
the document, amended and restated effective January 1, 2005.

 

1

 

ARTICLE 1 - INTERPRETATION
AND DEFINITIONS

 

1.1                               Interpretation

 

(a)                                  General.
Unless a clear contrary intention appears, for purposes of construction of this
Plan:

 

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

 

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

 

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

 

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

 

(v)                                 reference
to any law means such law as amended, modified, codified, replaced or
reenacted, in whole or in part, and in effect from time to time, including
rules and regulations promulgated thereunder, and reference to any section or
other provision of any law means that provision of such law from time to time
in effect and constituting the substantive amendment, modification,
codification, replacement or reenactment of such section or other provision;

 

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

 

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

 

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

 

(ix)                                “or”
is not exclusive;

 

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

 

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

 

2

 

(b)                                 Accounting
Terms. Unless expressly otherwise provided, accounting terms shall be construed
and interpreted, and accounting determinations and computations shall be made,
in accordance with generally accepted accounting principles.

 

1.2                               Definitions

 

Wherever used herein, the following terms
have the meanings set forth below, unless a different meaning is clearly
required by the context:

 

(a)                                  “Account” means an account established for
the purpose of recording amounts credited on behalf of a Participant and any
income, expenses, gains, losses or distributions included thereon. The Account
shall be a bookkeeping entry only and shall be utilized solely as a device for
the measurement and determination of the amounts to be paid to a Participant
pursuant to the Plan.

 

(b)                                 “Affiliated
Employer” means an entity that is treated as an “Affiliated Employer” under
the terms of the CPChem 401(k) Plan.

 

(c)                                  “AIP Bonus” means a Participant’s
managerial incentive bonus approved for payment under the Annual Incentive
Program of Chevron Phillips Chemical Company LLC.

 

(d)                                 “Base Compensation” means “Compensation” as
defined in the CPChem 401(k) Plan for purposes of making pre-tax deferrals to
this Plan, but including amounts deferred pursuant to Section 3.1(a) of
this Plan, and disregarding the limitations imposed by section 401(a)(17)
of the Code.

 

(e)                                  “Beneficiary” means the person or persons, trusts, estates
or other entities entitled under Section 6.2 to receive benefits under the
Plan upon the death of a Participant.

 

(f)                                    “Bonus” means any AIP Bonus, LTIP Bonus,
synergy bonus or any other bonus plan or arrangement designated by the Company
as eligible for deferral pursuant to the terms of this Plan.

 

(g)                                 “Bonus Deferral” means the portion of a
Bonus payment that a Participant elects to defer in accordance with
Section 3.1(b) of this Plan.

 

(h)                                 “Bonus Deferral Agreement” means the
Deferral Agreement filed in accordance with Section 3.1 with respect to
any Bonus payment.

 

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

 

(j)                                     “Code” means the Internal Revenue Code of
1986, as amended.

 

(k)                                  “Company” means Chevron Phillips Chemical Company LP.

 

3

 

(l)                                     “Compensation Deferral” means the portion
of Base Compensation that a Participant elects to defer in accordance with
Section 3.1(a).

 

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

 

(n)                                 “Compensation Deferral Agreement” means the
Deferral Agreement filed in accordance with Section 3.1 with respect to
the Participant’s Base Compensation.

 

(o)                                 “CPChem 401(k) Plan” means Chevron Phillips
Chemical Company LP 401(k) Savings and Profit Sharing Plan.

 

(p)                                 “CPChem 401(k) Plan Limits” means the
limits imposed under (a) section 402(g) of the Code, (b) the
actual deferral percentage test under section 401(k) of the Code,
(c) the actual contribution percentage test under section 401(m) of
the Code, and (d) annual addition limit under section 415(c) of the Code.

 

(q)                                 “DCP
Committee” means two (2) or more individuals designated by the Company to
oversee the administration of the Plan.

 

(r)                                    “Deferral Agreement” means either a Bonus
Deferral Agreement or a Compensation Deferral Agreement, or both if the context
so requires. A Deferral Agreement shall be a completed agreement between the
Participant and the Employer under which the Participant agrees to a Bonus
Deferral or a Compensation Deferral as the case may be. It also means a
completed agreement between the Participant and the Employer under which the
Participant selects the time and form of payment for an RPV Award and Matching
Contribution. The Deferral Agreement shall be on a form prescribed by the
Company and shall include any amendments, attachments or appendices.

 

(s)                                  “Disability” or “Disabled” means that a
Participant is eligible for, and continuously receiving disability insurance
payments under the Social Security Act and/or the Company’s long-term
disability plan. However, for purposes of Section 7.3, “Disability” or “Disabled”
means a Participant who is unable to engage in any substantial gainful activity
by reason of any medically determinable physical or mental impairment which can
be expected to result in death or can be expected to last for a continuous
period of not less than twelve (12) months.

 

(t)                                    “Eligible Employee” means an employee of the Employer who
satisfies each of the following criteria:  (i) is determined by the Employer to be a
member of a select group of management or highly compensated employees within
the meaning of sections 201(2), 301(a)(3) and 401(a)(1) of ERISA; and
(ii) is designated by the Employer as an employee who may participate in
the Plan.

 

(u)                                 “Employer” means the Company and any one of the entities
listed in Appendix A hereto, and any other entity which is authorized by
the Company to

 

4

 

participate
in and, which in fact, does adopt the Plan in accordance with Section 12.1.
The term “Employer” shall in each instance refer to any one of the foregoing
entities and in no case shall refer to the entities collectively or to more
than one such entity.

 

(v)                                 “Entry Date” means the first day of each Plan Year, or such
other dates established by the DCP Committee, including, but not limited to the
day immediately following the due date for the filing of any Deferral Agreement
with the Company, if such dates are in accordance in Section 409A. Entry Date
shall also mean the date that is thirty (30) days after the date on which a
newly hired employee first becomes an Eligible Employee.

 

(w)                               “ERISA” means the Employee Retirement Income Security Act of
1974, as from time to time amended.

 

(x)                                   “Long-Term Incentive Plan”  or “LTIP” means the Long-Term Incentive
Plan of Chevron Phillips Chemical Company LLC.

 

(y)                                 “LTIP Bonus” means an amount paid to a
Participant pursuant to the Long-Term Incentive Plan. An LTIP Bonus may take
the form of a Relative Performance Award and/or Strategic Performance Award.

 

(z)                                   “Matching Contribution” means an employer
contribution under this Plan that is based on the rate (the “Matching Rate”) of
Matching and Profit-sharing Contributions (as such terms are defined in the
CPChem 401(k) Plan) that the Employer makes to the CPChem 401(k) Plan.

 

(aa)                            “Participant” means any Eligible Employee who participates
in the Plan in accordance with Article 2.

 

(bb)                          “Payment Date” means the first business day of the month
following an event triggering a payment, provided that if the event occurs
after the fifteenth day of a month, the “Payment Date” shall be the first
business day of the second month following the event.

 

(cc)                            “Plan” means the Chevron Phillips Chemical Company LP Executive
Deferred Compensation Plan as set forth herein and as it may be amended from
time to time.

 

(dd)                          “Plan Year” means the 12-consecutive month period beginning
January 1 and ending December 31.

 

(ee)                            “Relative Performance Award” means that portion of an LTIP
Bonus which is based on a reward earned due to performance relative to a peer
group of companies. Effective for Performance Cycles (as that term is defined
in the LTIP) beginning on or after January 1, 2006, grants of Relative
Performance Awards will no longer be available under the LTIP.

 

5

 

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

 

(gg)                          “Relative Performance Value Award” or “RPV Award”  means an award under the RPV Plan that is earned due to
performance relative to peer group of companies.

 

(hh)                          “Strategic Performance Award” means that portion of an LTIP
Bonus which is based on performance measured against defined strategic
objectives.

 

(ii)                                  “Termination of Employment” means the
termination of a Participant’s employment with his or her Employer and all
other Affiliated Employers that meets the definition of a “separation from
service” under Section 409A.

 

(jj)                                  “Trust” means the trust fund (if any) established pursuant
to the terms of the Plan.

 

(kk)                            “Trustee” means the corporation or individuals named in the
agreement establishing the Trust (if any) and such successor and/or additional
trustees as may be named in accordance with the Trust agreement.

 

(ll)                                  “Valuation Date” means the last day of the Plan Year and
such other date(s) as designated by the DCP Committee.

 

ARTICLE 2 -  PARTICIPATION

 

2.1                               Date
of Participation. Each Participant on the effective date of the amendment
and restatement of this Plan who was an Eligible Employee and a Participant on
such date shall continue as a Participant. In the case of an Employer that
adopts this Plan after the effective date of the amended and restated Plan, in
accordance with Section 12.1, an Eligible Employee shall become a
Participant in the Plan on the first Entry Date next following such Employer’s
adoption of the Plan, provided the Eligible Employee files a Deferral Agreement
with the DCP Committee in accordance with Article 3. Each Eligible
Employee not described in the foregoing sentences of this Section 2.1
shall become a Participant in the Plan on the Entry Date next following the
date the Participant files a Deferral Agreement with the DCP Committee in
accordance with Article 3. If the Eligible Employee does not file a
Deferral Agreement pursuant to Article 3 prior to his or her first Entry
Date, the Eligible Employee will become a Participant in the Plan as of the
Entry Date next following the date the Eligible Employee files a Deferral Agreement
pursuant to Article 3.

 

2.2                               Termination
of Participation. A Participant’s participation in the Plan shall cease
upon his or her Termination of Employment with the Employer for any reason or
the Participant ceasing to qualify as a “management” or “highly compensated”
employee within the meaning of sections 201(2), 301(a)(3) or 401(a)(1) of ERISA.
In addition, the DCP Committee may terminate a Participant’s participation in
the Plan at the direction of the Employer or the Employer may cease to exist or
operate and may thereby terminate its participation in the Plan in accordance
with Section 12.2 of this Plan, but such

 

6

 

termination
may not reduce the obligation of the Employer to the Participant below the amount
to which the Participant would have been entitled under the Plan as in effect
immediately prior to such termination of participation had the Plan then
terminated.

 

ARTICLE 3 -  CONTRIBUTIONS

 

3.1                               Participant
Contributions.

 

(a)                                  Each
Participant may elect, in accordance with rules and procedures established by
the DCP Committee and Section 409A, to defer Base Compensation otherwise
payable to the Participant for the Plan Year by executing a Compensation
Deferral Agreement within the time period prescribed by the DCP Committee. The
Compensation Deferral Agreement will specify in whole number multiples of 1%
the amount the Participant elects to defer of his Base Compensation. The
maximum amount of any Base Compensation deferral that is permissible under this
Section 3.1(a) shall be 50% of the Participant’s Base Compensation.

 

To
the extent permitted by the Code and Treasury Regulations, the Deferral
Agreement may, but need not, coordinate deferrals under the Plan with elective
deferrals within the meaning of Section 402(g) of the Code that the
Participant makes under the CPChem 401(k) Plan. This election, called the “wrap”
election, provides for all the Participant’s deferrals to be first made to the
Plan, and then, to the extent that the CPChem 401(k) Plan Limits permit these
contributions to be made to the CPChem 401(k) Plan, they are automatically
transferred to the CPChem 401(k) Plan. This election is irrevocable and the
Participant cannot change his deferral elections under the CPChem 401(k) Plan
for such Plan Year once this “wrap” election has been made.

 

(b)                                 Each
Participant may elect, in accordance with rules and procedures established by
the DCP Committee, to defer up to ninety-five percent (95%) of any Bonus by
executing a Bonus Deferral Agreement within the time period established by the
DCP Committee. The Bonus Deferral Agreement will specify in whole number
multiples of 1% the amount the Participant elects to defer of his or her Bonus
(and, for the LTIP Bonus, a flat dollar amount can be deferred instead). With
regard to any Bonus Deferral elections relating to LTIP Bonuses which were made
prior to September 1, 2003, such elections shall apply to both the
Relative Performance Award and Strategic Performance Award portions of the LTIP
Bonus. Effective on or after September 1, 2003, the DCP Committee, in its
discretion, may permit Participants to make separate elections with respect to
the Relative Performance Award and Strategic Performance Award portions of the
LTIP Bonus.

 

(c)                                  One
hundred percent (100%) of the RPV Award that any Eligible Employee may receive
will be deferred automatically into the Plan. A Deferral Agreement must be
timely executed and delivered to the DCP Committee no later than the date that
is six (6) months before the end of the applicable “Performance Cycle” (as
defined in the RPV Plan) in accordance with the Proposed Treasury Regulation

 

7

 

section
1.409A-2(a)(7) (and any final regulations or other guidance that supersedes
such Proposed Regulation) in order for a Participant to select the time and
form of payment of the RPV Award under this Plan.

 

(d)                                 A
new Deferral Agreement must be timely executed and delivered to the DCP
Committee for each Plan Year during which the Participant desires to defer Base
Compensation and/or Bonus. Amounts credited to a Participant’s Account prior to
the effective date of a new Deferral Agreement will not be affected by any
subsequent agreement or agreements and will be paid in accordance with the
prior election or elections. A Participant who does not timely deliver a
properly executed Deferral Agreement to the DCP Committee shall be deemed to
have elected zero deferral of Base Compensation and/or Bonus for such Plan Year.
Notwithstanding the maximum deferral limits set forth in Sections 3.1(a) and
(b), no Participant shall be permitted to defer Base Compensation or Bonus
which the DCP Committee reasonably determines is required to pay the
Participant’s payroll taxes, contributions toward benefits, or other payroll
obligations. Under no circumstances may a Deferral Agreement be adopted
retroactively. A Participant may not revoke a Deferral Agreement for a Plan
Year during such year. Notwithstanding the foregoing, if a Participant receives
a hardship withdrawal from the CPChem 401(k) Plan, such Participant’s Base
Compensation deferral election and Bonus deferral election (to the extent as
yet unpaid) under the Plan shall be terminated for the Plan Year in which the
hardship withdrawal is received.

 

In
order to elect to defer Base Compensation and Bonuses earned during a Plan
Year, a Participant must file an irrevocable Deferral Agreement with the DCP
Committee before the beginning of such Plan Year. Notwithstanding the foregoing, (1) if the DCP
Committee determines that a Bonus qualifies as “performance-based compensation”
under Section 409A, a Participant may elect to defer a portion of the Bonus by
filing a Bonus Deferral Agreement at such later time as permitted by the DCP
Committee in accordance with Section 409A, and (2) in the first year in which
an Employee becomes eligible to participate in the Plan, a deferral election
may be made with respect to compensation for services to be performed
subsequent to the election within thirty (30) days after the date the Employee
becomes eligible to participate in the Plan to the extent permitted under
Section 409A.

 

3.2                               Employer
Matching Contributions. An Eligible Employee will receive a Matching
Contribution allocation with respect to a Plan Year if that Eligible Employee
has deferred the maximum pre-tax amount he or she is eligible to defer under
the CPChem 401(k) Plan with respect to that Plan Year. The amount of this
allocation shall equal the difference between (a) the Matching Rate
multiplied by the Eligible Employee’s Base Compensation; and (b) the
amount actually allocated to the 401(k) Plan as Matching and/or Profit-sharing
Contributions on behalf of that Eligible Employee.

 

8

 

ARTICLE 4 -  PARTICIPANT ACCOUNT

 

4.1                               Individual
Accounts. The DCP Committee will establish and maintain an Account for each
Participant which will reflect contributions made pursuant to Section 3.1
and, if applicable, Section 3.2 along with earnings, expenses, gains and
losses credited thereto, attributable to the investments made with the amounts
in the Participant’s Account as provided in Article 5. The amount a Participant
elects to defer pursuant to Section 3.1(a) and 3.1(b) shall be credited
ratably to the Participant’s Account at the time the Base Compensation and/or
Bonus would otherwise have been payable to the Participant but for his or her
election to defer. Contributions made in accordance with Section 3.1(c)
shall be credited to the Participant’s Account at the time the RPV Award becomes
payable to the Participant. Contributions made in accordance with
Section 3.2 shall be credited to the Participant’s Account at such time as
the Employer, in its sole discretion, determines. The DCP Committee will
establish and maintain such other accounts and records as it decides in its
discretion to be reasonably required or appropriate to discharge its duties
under the Plan.

 

ARTICLE 5 -  INVESTMENT OF CONTRIBUTIONS

 

5.1                               Adjustment
of Accounts. The amount in a Participant’s Account shall be adjusted for
hypothetical investment earnings or losses in an amount equivalent to the gains
or losses reported by the measuring fund or funds selected by the Participant
or Beneficiary from among the measuring funds designated by the Company for
this purpose. A Participant may, in accordance with rules and procedures
established by the DCP Committee, change the measuring fund or funds to be used
for the purpose of calculating future hypothetical investment adjustments to
the Participant’s Account. The Account of each Participant shall be adjusted as
of each Valuation Date to reflect: 
(a) the hypothetical investment earnings and/or losses described
above; (b) Compensation Deferrals; (c) Bonus Deferrals; (d) RPV
Awards; (e) Matching Contributions; and (f) distributions from the
Account.

 

ARTICLE 6 -  RIGHT TO BENEFITS

 

6.1                               Vesting.

 

(a)                                  A
Participant, at all times, has a 100% nonforfeitable interest in the amounts
credited to his Account attributable to Compensation and Bonus Deferrals. Amounts
credited to a Participant’s Account attributable to Matching Contributions
shall vest only pursuant to such provisions as apply to the vesting of rights
to Matching Contributions and Profit-sharing Contributions under the CPChem
401(k) Plan. If the Participant terminates employment prior to having three (3)
years of vesting service under the CPChem 401(k) Plan, then such Participant
shall forfeit the entire portion of the Participant’s Account attributable to
Matching Contributions (and deemed earnings and losses thereon).

 

(b)                                 A
Participant has a 100% nonforfeitable interest in amounts credited to his
Account attributable to RPV Awards (i) upon disability (as that term is defined
in the RPV Plan), or (ii) upon the Participant’s termination of service (as
that term is defined in the RPV Plan) due to retirement (as that term is 

 

9

 

defined
in the RPV Plan), layoff, transfer to Chevron or ConocoPhillips, or death. If a
Participant terminates employment for any reason other than retirement, layoff,
transfer to a Chevron or ConocoPhillips, or death, the Participant shall
forfeit the entire portion of the Participant’s Account attributable to RPV
Awards (and deemed earnings and losses thereon). Notwithstanding the foregoing,
any Participant who is a Participant in the RPV Plan as of January 1, 2006 will
become fully vested in the entire portion of his Account attributable to RPV
Awards (and deemed earning and losses thereon) upon his Termination of
Employment, without regard to the cause of the Termination of Employment.

 

6.2                               Death.
If a Participant dies before the distribution of his or her Account has
commenced, or before such distribution has been completed, the Participant’s
designated Beneficiary or Beneficiaries will be entitled to receive the balance
or remaining balance of his or her vested Account, plus any amounts thereafter
credited to his or her Account. Distribution to the Beneficiary or
Beneficiaries will be made in a lump sum on the Payment Date following the
Participant’s death.

 

A Participant may designate a Beneficiary or
Beneficiaries, or change any prior designation of Beneficiary or Beneficiaries
by giving notice to the DCP Committee on a form designated by the DCP Committee.
If more than one person is designated as the Beneficiary, their respective
interests shall be as indicated on the designation form. However, if the
Participant is married at the time benefits commence (or upon his death), he
must have obtained spousal consent to any non-spouse Beneficiary to become
effective.

 

A copy of the death notice or other
sufficient documentation must be filed with and approved by the DCP Committee. If
upon the death of the Participant there is, in the opinion of the DCP
Committee, no designated Beneficiary for part or all of the Participant’s
vested Account (or the designation is not effective because no spousal consent
has been provided), such amount will be paid to the Participant’s surviving
spouse or, if none, to his or her estate (such spouse or estate shall be deemed
to be the Beneficiary for purposes of the Plan). If a Beneficiary dies after
benefits to such Beneficiary have commenced, but before they have been
completed, and, in the opinion of the DCP Committee, no person has been
designated to receive such remaining benefits, then such benefits shall be paid
to the deceased Beneficiary’s estate. In determining whether any person named
as a Beneficiary is living at the time of a Participant’s death, if such person
and the Participant died in a common disaster and there is insufficient
evidence to determine which person died first, then it shall be deemed that the
Beneficiary died first.

 

10

 

ARTICLE 7 -  DISTRIBUTION OF BENEFITS

 

7.1                               Amount
of Benefits. The vested value of a Participant’s Account shall constitute
the basis for the value of benefits payable to the Participant under the Plan.

 

7.2                               Determination
of Method of Distribution to Participants. Distributions under the Plan to
a Participant shall be made in a lump sum in cash or under a systematic
withdrawal plan of installments made not less frequently than annually, in
cash, over a five (5), ten (10), or fifteen (15) year period certain. Distributions
shall commence upon (a) the Payment Date following the Participant’s
Termination of Employment, (b) the Payment Date following the Participant’s one
year anniversary of his Termination of Employment, or (c) a date certain after
the completion of a deferral period of at least two (2) years (provided,
however, that Section 7.2(c) shall not be available for RPV Award
distributions). Subject to Section 7.5, the Participant will request the
time and method of distribution of benefits in accordance with the rules
established by the DCP Committee and Section 409A. If the Participant does not
properly request the time or method of distribution, the time and method shall
be a lump sum upon the Payment Date following his Termination of Employment.

 

Notwithstanding the foregoing, a transfer of employment to
ConocoPhillips or Chevron shall not be deemed to constitute a “Termination
of Employment” until such subsequent Termination of Employment from
ConocoPhillips or Chevron. In such case, payments to the Participant under this
Plan shall be made in the form elected under the Deferral Agreement and
commence on the Payment Date elected above, if permitted by Section 409A and
the applicable guidance thereunder; otherwise, payments shall commence as of
the Payment Date following the Participant’s two (2) year anniversary of his
Termination of Employment from the Employer.

 

A Participant may make one or more subsequent elections to change the
time or form of a distribution for a deferred amount, but any such election
made on or after January 1, 2006 shall be effective only if the following conditions
are satisfied:

 

(i)                                     The
election may not take effect until at least twelve (12) months after the date
on which the election is made;

 

(ii)                                  A
distribution may not be made earlier than at least five (5) years from the date
the distribution would have otherwise been made (or commenced to be made for
installments); and

 

(iii)                               In
the case of an election to change the time or form of a distribution under
Section 7.2(c), the election must be made at least twelve (12) months before
the date of the first scheduled distribution.

 

11

 

7.3                               Distribution
on Disability. Notwithstanding the provisions of Section 7.2, a
Participant will receive distributions due to becoming Disabled. Distributions
under the Plan to a Disabled Participant shall be made in a lump sum in cash or
under a systematic withdrawal plan of installments made not less frequently
than annually, in cash, over a five (5), ten (10), or fifteen (15) year period
certain as initially elected pursuant to Section 7.2. Distributions shall
commence upon (a) the Payment Date following Disability if the Participant
elected Section 7.2(a) above, (b) the Payment Date following the Participant’s
one year anniversary of his Disability if the Participant elected Section
7.2(b) above, or (c) a date certain if the Participant elected Section 7.2(c)
above. If the Participant does not properly elect the time or method of
distribution under Section 7.2, the time and method shall be a lump sum upon
the Payment Date following his Disability.

 

7.4                               Notice
to Trustee. If amounts are held pursuant to a Trust, the DCP Committee will
notify the Trustee in writing whenever any Participant or Beneficiary is
entitled to receive benefits under the Plan. The DCP Committee’s notice shall indicate
the form, amount and frequency of benefits that such Participant or Beneficiary
shall receive in accordance with Section 7.2 or 7.3.

 

7.5                               Unforeseeable
Emergency. Notwithstanding the provisions of Section 7.2, a
Participant may request a distribution due to an unforeseeable emergency in
accordance with Section 409A. Specifically, an Unforeseeable Emergency is
defined as a severe financial hardship of the Participant resulting from:

 

(a)                                  An
illness or accident of the Participant, the Participant’s spouse or the
Participant’s dependent (as defined in Code section 152(a));

 

(b)                                 The
loss of the Participant’s property due to casualty; or

 

(c)                                  Other
similar extraordinary and unforeseeable circumstances arising as a result of
events beyond the control of the Participant.

 

The
request for such a distribution must be in writing and must be submitted to the
DCP Committee along with evidence that the circumstances constitute an
unforeseeable emergency and must comply with any other requirements imposed by
Section 409A and applicable guidance thereunder. The DCP Committee has the
discretion to require whatever evidence it deems necessary to determine whether
a distribution shall be made. The amounts distributed with respect to an Unforeseeable Emergency may
not exceed the amounts necessary to satisfy such unforeseeable emergency plus
amounts necessary to pay taxes reasonably anticipated as a result of the
distribution, after taking into account the extent to which such hardship is or
may be relieved through reimbursement or compensation by insurance or otherwise
or by liquidation of the Participant’s assets (to the extent the liquidation of
such assets would not itself cause severe financial hardship) or by cessation
of deferrals under the Plan. The distribution will be made in the form
of a single lump sum. If a Participant who has commenced receiving installment
payments requests and is granted an Unforeseeable Emergency distribution, the
DCP Committee

 

12

 

will
accelerate the payments into a single lump sum, provided the lump sum does not
exceed the amount reasonably necessary to satisfy the Unforeseeable Emergency.

 

7.6                               Cashouts
of Amounts Not Exceeding $10,000. Any other provision of this
Article 7 notwithstanding, if the vested portion of a Participant’s
Account equals $10,000 or less on the date of the Participant’s Termination of
Employment or Disability, then the Company will distribute such amount to the
Participant in a single lump sum in cash upon the Payment Date following his
Termination of Employment or Disability.

 

7.7                               Effect
of Early Taxation. If a portion of the Participant’s Account balance is
includible in income under Section 409A, such portion shall be distributed
immediately to the Participant.

 

7.8                               Permitted
Delays. Notwithstanding the foregoing, any payment to a Participant under
the Plan may be delayed upon the DCP Committee’s determination that one or more
of the following events may occur:

 

(a)                                  The Employer’s deduction with respect to such
payment otherwise would be limited or eliminated by application of Code section
162(m);

 

(b)                                 The making of the payment would violate a
term of a loan agreement to which the Company or one of its Affiliated
Employers is a party, or other similar contract to which the Company or one of
its Affiliated Employers is a party, and such violation would cause material
harm to the Company or one of its Affiliated Employers; or

 

(c)                                  The making of the payment would violate
Federal securities laws or other applicable law;

 

provided, that any payment subject to this Section 7.7 shall ultimately
be paid in accordance with Section 409A.

 

7.9                               Adjustment
for Investment Experience. If any distribution under this Article 7 is not
made in a single payment, the amount remaining in the Account after the
distribution will be subject to adjustment until distributed to reflect the
income and gain or loss on the investments in which such amount is treated as
invested.

 

ARTICLE 8 -  AMENDMENT AND TERMINATION

 

8.1                               Amendment
by the Company. The Company reserves the authority to amend the Plan by
executing an amendment or restatement of the Plan. Except as otherwise
specified, such changes are to be effective on the effective date of such
amendment or restated Plan document. Any such change notwithstanding, the
Participant’s Account shall not be reduced by such change below the amount to
which the Participant would have been entitled if he or she had voluntarily
left the employ of the Employer immediately prior to the date of the change. In
addition, the Company may from time to time make any amendment to the Plan that
may be necessary to satisfy the Code or ERISA.

 

13

 

8.2                               Retroactive
Amendments. An amendment made by the Company in accordance with Section 8.1
may be made effective on a date prior to the first day of the Plan Year in
which it is adopted if such amendment is necessary or appropriate to enable the
Plan and Trust to satisfy the applicable requirements of the Code or ERISA or
to conform the Plan to any change in federal law or to any regulations or
ruling thereunder. Any retroactive amendment by the Company shall be subject to
the provisions of Section 8.1.

 

8.3                               Plan
Termination. The Plan has been adopted with the intention and expectation
that it will be continued indefinitely. Each Employer, however, reserves the
right to terminate the Plan, in accordance with Section 12.2, with respect
to all or certain of its participating Eligible Employees. However, each
Employer has no obligation or liability whatsoever to maintain the Plan for any
length of time and may discontinue contributions under the Plan or terminate
the Plan at any time by written notice delivered to the Trustee without any
liability hereunder for any such discontinuance or termination.

 

8.4                               Distribution
upon Termination of the Plan. Upon termination of the Plan, or as to any
particular Employer, no further contributions shall be made under the Plan, but
the Participant’s Account maintained under the Plan at the time of termination
shall continue to be governed by the terms of the Plan until paid out in
accordance with the terms of the Plan.

 

ARTICLE 9 -  THE TRUST

 

9.1                               Establishment
of Trust. The Company may establish a Trust between the Company and the
Trustee, in accordance with the terms and conditions as set forth in a separate
agreement, under which any contributions to the Trust are held, administered
and managed, subject to the claims of the Company’s creditors in the event of
the Company’s insolvency, until paid to the Participant and/or his
Beneficiaries specified in the Plan. Such a Trust will be intended to be
treated as a grantor trust under the Code, and the establishment of the Trust
shall not cause any Participant to realize current income on amounts
contributed thereto.

 

9.2                               Investment
of Trust Funds. Any amounts contributed to the Trust by the Employer shall
be invested by the Trustee in accordance with the provisions of the Trust and
the instructions of the Company. Trust investments need not reflect the
hypothetical investments selected by Participants under Section 5.1 for
the purpose of adjusting Accounts and the earnings or investment results of the
Trust shall not affect the hypothetical investment adjustments to Participant
Accounts under the Plan.

 

9.3                               Information
Between Employer and Trustee. The Employer agrees to furnish the Trustee,
and the Trustee agrees to furnish the Employer with such information relating
to the Plan and Trust as may be required by the other in order to carry out
their respective duties hereunder, including without limitation information
required under the Code or ERISA and any regulations issued or forms adopted
thereunder.

 

14

 

ARTICLE 10 -  MISCELLANEOUS

 

10.1                        Unsecured
General Creditor of the Employer. Participants and their Beneficiaries,
heirs, successors and assigns shall have no legal or equitable rights,
interests or claims in any property or assets of the Employer. For purposes of
the payment of benefits under the Plan, any and all of the Employer’s assets
shall be, and shall remain, the general, unpledged, unrestricted assets of the
Employer. Each Employer’s obligation under the Plan shall be merely that of an
unfunded and unsecured promise to pay money in the future.

 

10.2                        Employer’s
Liability. Each Employer’s liability for the payment of benefits under the
Plan shall be defined only by the Plan and/or by the Deferral Agreements
entered into between a Participant and the Employer. An Employer shall have no
obligation or liability to a Participant under the Plan except as provided by
the Plan and/or a Deferral Agreement or agreements. An Employer shall have no
liability to Participants employed by other Employers.

 

10.3                        Limitation
of Rights. Neither the establishment of the Plan and the Trust, nor any
amendment thereof, nor the creation of any fund or account, nor the payment of
any benefits, will be construed as giving to the Participant or any other
person any legal or equitable right against the Employer, DCP Committee, Company
or Trustee, except as provided herein; and in no event will the terms of
employment or service of the Participant be modified or in any way affected
hereby.

 

10.4                        No
Assignment of Benefits.

 

(a)                                  The
benefits provided under this Plan may not be alienated, assigned, transferred,
pledged or hypothecated by any person, at any time, to any person whatsoever. Except
as provided below, the benefits shall be exempt from the claims of creditors or
other claimants and from all orders, decrees, levies, garnishment or executions
to the fullest extent allowed by law.

 

(b)                                 Notwithstanding
the preceding, benefits payable under the Plan shall be paid to the
Participant, the Participant’s spouse or the Participant’s Beneficiary in
accordance with the provisions of this Plan except to the extent that such
benefits are required to be paid to an alternate payee under the provisions of
a qualified domestic relations order (a “QDRO”) which satisfies the
requirements of section 414(p) of the Code. The provisions set forth in the CPChem
Retirement Plan applicable to QDROs shall apply to the determination of whether
any such order satisfies the requirements of section 414(p) of the Code. Further,
such QDROs shall be administrated in accordance with the rules set forth in the
CPChem Retirement Plan, the provisions of which are hereby incorporated by
reference; provided, however, a benefit shall be payable to an alternate payee
under this Plan only at the time payment of the Participant’s benefit commences
under this Plan pursuant to Article 7. Neither this Plan, the DCP Committee,
the Affiliated Employers nor the Company shall be liable in any manner to any
person,

 

15

 

including the Participant, Participant’s spouse, or Participant’s Beneficiary,
for complying with any such court order or judgment.

 

10.5                        Facility
of Payment. If the DCP Committee determines, on the basis of medical
reports or other evidence satisfactory to the DCP Committee, that the recipient
of any benefit payments under the Plan is incapable of handling his affairs by
reason of minority, illness, infirmity or other incapacity, the Employer may
disburse (or the Company may direct the Trustee to disburse, if applicable)
such payments to a person or institution designated by a court which has
jurisdiction over such recipient or a person or institution otherwise having
the legal authority under State law for the care and control of such recipient.
The receipt by such person or institution of any such payments therefore, and
any such payment to the extent thereof, shall discharge the liability of the
Employer or the Trust for the payment of benefits hereunder to such recipient.

 

10.6                        Notices.
Any notice or other communication in connection with the Plan shall be
deemed delivered in writing if addressed as provided below and if either
actually delivered at said address or, in the case of a letter, five business
days shall have elapsed after the same shall have been deposited in the United
States mails, first-class postage prepaid and registered or certified.

 

If
it is sent to the Employer or the Company, it will be at the address specified
by the Employer. If it is sent to the Trustee, it will be sent to the address
set forth in the Trust agreement; or, in each case at such other address as the
addressee shall have specified by written notice delivered in accordance with
the foregoing to the addressor’s then effective notice address.

 

10.7                        Governing
Law. The Plan will be construed, administered and enforced according to
ERISA, and to the extent not preempted thereby, the laws of the State of Texas.

 

10.8                        Successors and Mergers, and/or
Consolidation. The terms and conditions of this Plan shall inure to the
benefit of and bind the Employer and the Participants, their successors,
assignees, and personal representatives. If substantially all of the stock,
assets or partnership interests of the Employer are acquired by another
corporation or entity or if the Employer is merged into, or consolidated with
another corporation or entity, then the obligations created hereunder shall be
obligations of the acquirer or successor corporation or entity, without the
requirement of further action by the acquirer or successor corporation or
entity.

 

10.9                        Employment Not Affected by the
Plan. Neither the establishment of this Plan, or any modification thereof,
nor the payment of any benefit shall be construed as giving any Participant or
any other person any legal or equitable right against the Employer, nor as
giving any Employee or Participant the right to be retained in the employ of
the Employer. All Employees shall remain subject to discharge to the same
extent as if this Plan had never been adopted.

 

10.10                 Severability. In the event any
provision of this Plan shall be held illegal or invalid for any reason, said
illegality or invalidity shall not affect the remaining provisions of this

 

16

 

Plan,
which shall be fully severable, and this Plan shall be construed and enforced
as if said illegal or invalid provisions had never been inserted.

 

ARTICLE 11 -  PLAN ADMINISTRATION

 

11.1                        Powers
and Responsibilities of the DCP Committee. The DCP Committee has the full
power and the full responsibility to administer the Plan in all of its details,
subject, however, to the applicable requirements of ERISA. The DCP Committee’s
powers and responsibilities include, but are not limited to, the following:

 

(a)                                  To
make and enforce such rules and regulations as it deems necessary or proper for
the efficient administration of the Plan;

 

(b)                                 To
interpret the Plan, its interpretation thereof in good faith to be final and
conclusive on all persons claiming benefits under the Plan;

 

(c)                                  To
administer the review procedures specified in Section 11.2;

 

(d)                                 To
comply with the reporting and disclosure requirements of Part 1 of Subtitle B
of Title I of ERISA; and

 

(e)                                  To
retain counsel, employ agents, and provide for such clerical, accounting and
consulting services as they may require in carrying out the provisions of the
Plan; and may allocate among themselves or delegate to other persons all or
such portion of their duties under the Plan as they in their sole discretion,
shall decide. Each member of the DCP Committee shall be fully justified in
relying upon or acting in good faith upon any opinion, report, or information
furnished in connection with the Plan by any accountant, counsel, or other
specialist so retained (including financial officers of the Company, whether or
not such persons are Participants in the Plan).

 

The
DCP Committee’s interpretation and construction of the provisions of the Plan
and rules and regulations adopted by the DCP Committee shall be final. No
member of the DCP Committee shall be liable for any action taken, or
determination made, in respect of the Plan in good faith. Notwithstanding any
other provision of the Plan, the Plan shall be interpreted, operated and
administered in accordance with Section 409A.

 

11.2                        Claims and Review Procedures.

 

(a)                                  Filing a Claim. A Participant or his authorized
representative may file a claim for benefits under the Plan. Any claim must be
in writing and submitted to the DCP Committee at such address as may be
specified from time to time. Claimants will be notified in writing of approved
claims, which will be processed as claimed. A claim is considered approved only
if its approval is communicated in writing to a claimant.

 

(b)                                 Denial of Claim. In the case of the denial of a claim
respecting benefits paid or payable with respect to a Participant, a written
notice will be furnished to the

 

17

 

claimant within ninety (90) days of the date on which the DCP Committee
receives the claim. If special circumstances (such as for a hearing) require a
longer period, the claimant will be notified in writing, prior to the
expiration of the ninety (90) day period, of the reasons for an extension of
time; provided, however, that no extensions will be permitted beyond ninety
(90) days after the expiration of the initial ninety (90) day period.

 

(c)                                  Reasons for Denial. A denial or partial denial of a claim
will be dated and signed by the DCP Committee and will clearly set forth:

 

(i)                                     the
specific reason or reasons for the denial;

 

(ii)                                  specific
reference to pertinent Plan provisions on which the denial is based;

 

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

 

(iv)                              an
explanation of the procedure for review of the denied or partially denied claim
set forth below, including the claimant’s right to bring a civil action under
ERISA section 502(a) following an adverse benefit determination on review.

 

(d)                                 Review of Denial. Upon denial of a claim, in whole or in
part, a claimant or his duly authorized representative will have the right to
submit a written request to the DCP Committee for a full and fair review of the
denied claim by filing a written notice of appeal with the DCP Committee within
sixty (60) days of the receipt by the claimant of written notice of the denial
of the claim. A claimant or the claimant’s authorized representative will have,
upon request and free of charge, reasonable access to, and copies of, all
documents, records, and other information relevant to the claimant’s claim for
benefits and may submit issues and comments in writing. The review will take
into account all comments, documents, records, and other information submitted
by the claimant relating to the claim, without regard to whether such information
was submitted or considered in the initial benefit determination.

 

If the claimant fails to file a request for review within sixty (60)
days of the denial notification, the claim will be deemed abandoned and the
claimant precluded from reasserting it. If the claimant does file a request for
review, his request must include a description of the issues and evidence he
deems relevant. Failure to raise issues or present evidence on review will
preclude those issues or evidence from being presented in any subsequent
proceeding or judicial review of the claim.

 

(e)                                  Decision Upon Review. The DCP Committee will provide a
prompt written decision on review. If the claim is denied on review, the
decision shall set forth:

 

18

 

(i)                                     the
specific reason or reasons for the adverse determination;

 

(ii)                                  specific
reference to pertinent Plan provisions on which the adverse determination is
based;

 

(iii)                               a
statement that the claimant is entitled to receive, upon request and free of
charge, reasonable access to, and copies of, all documents, records, and other
information relevant to the claimant’s claim for benefits; and

 

(iv)                              a
statement describing any voluntary appeal procedures offered by the Plan and
the claimant’s right to obtain the information about such procedures, as well
as a statement of the claimant’s right to bring an action under ERISA section
502(a).

 

A decision will be rendered no more than sixty (60) days after the DCP
Committee’s receipt of the request for review, except that such period may be
extended for an additional sixty (60) days if the DCP Committee determines that
special circumstances (such as for a hearing) require such extension. If an
extension of time is required, written notice of the extension will be
furnished to the claimant before the end of the initial sixty (60) day period.

 

(f)                                    Finality of Determinations; Exhaustion of Remedies. To the
extent permitted by law, decisions reached under the claims procedures set
forth in this Section shall be final and binding on all parties. No legal
action for benefits under the Plan shall be brought unless and until the
claimant has exhausted his remedies under this Section. In any such legal
action, the claimant may only present evidence and theories, which the claimant
presented during the claims procedure. Any claims, which the claimant does not
in good faith pursue through the review stage of the procedure, shall be
treated as having been irrevocably waived. Judicial review of a claimant’s
denied claim shall be limited to a determination of whether the denial was an
abuse of discretion based on the evidence and theories the claimant presented
during the claims procedure.

 

(g)                                 Limitations Period. Any suit or legal action initiated by a
claimant under the Plan must be brought by the claimant no later than one year
following a final decision on the claim for benefits by the DCP Committee. The
one-year limitation on suits for benefits will apply in any forum where a
claimant initiates such suit or legal action.

 

11.3                        Plan
Administrative Costs. All reasonable costs and expenses (including legal,
accounting, and employee communication fees) incurred by the DCP Committee and
the Trustee in administering the Plan and Trust shall, unless allocable to the
Accounts of particular Participants, be charged against the Accounts of all
Participants on a pro rata basis or in such other reasonable manner as may be
directed by the DCP Committee. Notwithstanding the foregoing, the Employer may,
in its sole discretion, elect to pay all such reasonable costs and expenses.

 

19

 

ARTICLE 12 -  PARTICIPATING EMPLOYERS

 

12.1                        Adoption
of the Plan. As of January 1, 2005, each entity listed on Appendix A
is an Employer. In addition, this Plan may be adopted by additional Employers
provided that any such adoption is with the approval of the Company. Any
adoption of this Plan by an additional Employer shall be pursuant to such
authority as is required by such Employer’s governing body, a copy of which
shall be filed with the Company.

 

12.2                        Termination
of Plan Participation. Each Employer may cease to participate in the Plan
with respect to its Employees by executing a resolution adopted pursuant to
such authority as is required by such Employer’s governing body, provided,
however, that such termination may not reduce the obligation of the Employer to
any Participant below the amount to which the Participant would have been
entitled under the Plan as in effect immediately prior to the Employer’s termination
of Plan participation. A copy of such resolution shall be filed with the
Company.

 

 

IN WITNESS WHEREOF, the Company by its duly
authorized officer(s), has caused the Plan to be amended and restated on the 

24 day of February, 2006.

 

 

Chevron Phillips Chemical Company
LP

 

 

	
  By:

  	
  /s/ James L. Gallogly

  	
   

  
	
   

  	
   

  
	
  Title:

  	
  President and Chief Executive Officer

  	
   

  

 

20

 

APPENDIX A

 

Participating Employers

 

In addition to the
Company, Chevron Phillips International Corporation is an “Employer” within the
meaning of Section 1.2(u) of the Plan. In addition, such other participating
employers may be designated in accordance with rules prescribed by the Company.

 

21

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