ConocoPhillips Severance Pay Plan

Transcription

1 ConocoPhillips Severance Pay Plan Summary Plan Description ConocoPhillips Company March 13, 2004

2 Contents Plan Highlights ConocoPhillips Severance Pay Plan Introduction..2 About this Summary Plan Description (SPD) Eligibility Requirements Qualifying Circumstances Disqualifying Circumstances Companies Adopting the Plan Benefits Basic Benefit Supplemental Benefits Benefit Calculation Examples Aminoil Employees Benefit Payments Beneficiaries Rehire Waiver of Benefits Expenses and Funding of the Plan Plan Administration Plan Identification Information Plan Administrator ConocoPhillips Severance Pay Plan Committee Errors or Misstatements Claims Procedures Filing Claims Under the Plan Filing for Review of Claim Denial Amendment and Termination of the Plan Assignment of Benefits Agent for Service of Legal Process Your Rights Under ERISA Receive Information About Your Plan and Benefits...9 Prudent Actions by Plan Fiduciaries Enforce Your Rights Assistance With Your Questions Change in Control, Appendix A Glossary of Terms This is the Summary Plan Description (SPD) for the ConocoPhillips Severance Pay Plan (plan). Information about claims, participant rights, plan administration and other provisions mandated by the Employee Retirement Income Security Act of 1974 (ERISA), as amended are contained in this SPD. If there is any conflict between this SPD (or other administrative materials) and the official plan document, the official plan document will govern. Nothing in this SPD creates an employment contract between ConocoPhillips Company or its subsidiaries and affiliates and any employee. Except as otherwise provided in the plan, ConocoPhillips Company reserves the right to amend or terminate any plan at any time, at its sole discretion, according to the terms of the plan.

3 Plan Highlights When corporate circumstances result in involuntary loss of employment, ConocoPhillips, in some cases, provides employees with severance benefits that give a measure of security during transition, as part of a competitive benefits package. These benefits include severance pay, medical and dental continuation, and other special transition provisions. These Plan Highlights cover the ConocoPhillips Severance Pay Plan (plan), which provides severance pay and educational reimbursement. Other severance benefits are covered in other plans and communications. Information about the ConocoPhillips Severance Pay Plan Beginning March 13, 2004, the ConocoPhillips Severance Pay Plan (plan) went into effect. This plan provides benefits to employees of the company who are involuntarily laid off (and who meet all the plan requirements), as well as supplemental benefits to participants who release the company from all employment-related claims. A quick look at major features of the ConocoPhillips Severance Pay Plan Benefits and payout Basic/minimum benefit: Four weeks pay; no Release required Supplemental benefit Three weeks pay per each year of service, less the basic benefit General Release of Liability required from the employee Maximum benefit: 60 weeks pay Form of Payout: Lump-sum cash payment Educational reimbursement Up to $2,000 for approved tuition, required fees and books One year limit to complete courses Change in Control provisions The plan has change in control provisions which prohibit termination of the plan or certain amendments that would reduce eligibility or benefits under the plan for 24 months after the change in control as defined in the plan. 1

4 ConocoPhillips Severance Pay Plan Introduction The purpose of the ConocoPhillips Severance Pay Plan (plan) is to provide severance benefits to employees who are involuntarily laid off and meet the eligibility requirements under circumstances defined in the plan. It is also designed, by offering supplemental benefits, to satisfy and compromise all claims in existence at the time of the layoff related to participant s employment or termination of employment. About this Summary Plan Description (SPD) This SPD describes benefits of the ConocoPhillips Severance Pay Plan that became effective on March 13, 2004, that may be available to you under the plan. This is the SPD of the plan that is required by the Employee Retirement Income Security Act of 1974 (ERISA), as amended. You are urged to read this SPD carefully, and keep it for future reference. Some terms in this SPD are given special meaning to describe the plan benefits. A glossary is provided to assist you with defined terms used in the plan and in this SPD. If you have any questions not answered here, contact your Human Resources representative for further information. When a defined term is used in this SPD, the term will be italicized. This SPD does not include all of the details of the plan. All rights and obligations of ConocoPhillips Company and all eligible employees, beneficiaries or other claimants covered by this plan are governed solely by the official text of the plan. A copy of the official text of the plan is available upon written request to the Plan Administrator. In this SPD, the term company is used to describe ConocoPhillips Company and the other companies whose employees may be eligible for this plan. Except as otherwise provided in the plan, the company has retained the right to amend, modify or terminate the plan in accordance with its terms. To Obtain More Information About the Plan Contact: ConocoPhillips Central Administration Retirement Services, Monday-Friday, 8 to 10 a.m. and 1 to 5 p.m. Central time, at the following numbers: (Outside Bartlesville area) (Bartlesville area) retirement@conocophillips.com Address: P.O. Box 5555 Bartlesville, OK Eligibility Requirements A. All employees are eligible to be a participant in the plan subject to the terms and conditions as described in the plan, except (i) retail store or retail marketing outlet personnel, and (ii) members of a recognized or certified collective bargaining unit, whether such collective bargaining agreement specifically provides for the exclusion of members of such units from participation in the plan, unless coverage under the plan is expressly included, by designation of this plan by name, under the collective bargaining agreement. B. Except as provided in Item C on the next page, you are eligible to receive benefits under this plan if all Qualifying Circumstances have occurred and there is not a Disqualifying Circumstance. Qualifying Circumstances You have a layoff on or after March 13, 2004; You are an employee on the date of layoff; and You have completed or will complete one year of service as of the date of layoff. Disqualifying Circumstances (even if notice of layoff has been given) Your termination of employment is in connection with a corporate event, and the successor employer or one of the successor employers associated with that corporate event, offers you a job with comparable pay; Your termination of employment is in connection with a corporate event, and you accept any job offered by the successor employer or one of the successor employers associated with the corporate event; 2

5 You are recorded in the company s or employer s personnel system as in inactive disability status as of the date of layoff; You are recorded in the company s or employer s personnel system as on personal leave of absence as of the date of layoff; or You are terminated for cause as indicated by the fact that your termination is recorded in the company s or employer s personnel system as a discharge or similar classification. C. If you are otherwise eligible for benefits under this plan, you are still not entitled to receive benefits under this plan if: You failed to waive benefits under any other layoff plan, severance plan, or similar program of the company or of the employer other than this plan and other than a retention bonus; You received layoff pay or termination pay under a negotiated working agreement or collective bargaining agreement; You are paid on an hourly basis and covered by a collective bargaining agreement or a working policy, and you have not exhausted your rights to displace less senior employees in the same work unit; At the time you would otherwise be paid under the plan, you have any outstanding obligation to the company, including but not limited to an obligation to repay benefits received from this plan, from the Conoco Severance Pay Plan or from the Phillips Layoff Plan, and no arrangement has been made to repay such obligation which is acceptable to the company; or You waived benefits under this plan. D. If you receive layoff pay under this plan and are rehired by the company, you will again become eligible for benefits only if you again satisfy the rules for eligibility to be a participant and the rules for eligibility to receive benefits. Companies Adopting the Plan As of the date of this SPD, the following companies have adopted the plan for their employees unless otherwise noted. Companies not listed have not adopted the plan. ConocoPhillips Company Conoco Pipe Line Company ConocoPhillips Services, Inc. International Energy Limited Louisiana Gas Systems, Inc. Phillips Expatriate Service Company Phillips Pipe Line Company Phillips Utility Gas Corporation The company may, from time to time, authorize participation in the plan by employees of other subsidiary or affiliated companies and may at any time withdraw the authorization for participation by an employee or group, or a unit or division of employees. In addition to being employed by one of the above companies, you must satisfy all of the eligibility requirements of the plan before you will receive benefits. Benefits Basic Benefit The basic benefit of four weeks pay will be paid to you if you are eligible to receive benefits under the plan. The basic benefit will be paid in a lump-sum cash payment. Supplemental Benefits If you are eligible for supplemental benefits, you will be entitled to a cash lump-sum supplemental benefit of three weeks pay for each year of service up to a maximum of 60 weeks pay less the basic 3

6 benefit. You also will be entitled to educational reimbursement. If you are laid off and receive supplemental benefits, the company will make available to you educational reimbursement up to $2,000 for tuition, required fees and books. Eligible qualified courses must be approved by designated Human Resources personnel. To qualify for educational reimbursement, you must submit a plan of course studies within ninety (90) days after layoff. The course studies must be at an accredited college, university, trade school or be a part of a certified/licensed instructional program. All courses must be completed and requests for reimbursement submitted no later than the first anniversary date of layoff. Educational costs which are reimbursed by any Federal, state, or local governmental agency or by any private source will not be reimbursed by this plan. A supplemental benefit will be paid to you in a lump-sum cash payment if you are eligible for benefits according to the Eligibility Requirements and you sign a General Release of Liability (Release) and provide such Release to the Plan Administrator by the required deadline. If you should die after the company provides you notice of layoff, but before you sign the General Release of Liability, such Release must be signed by your spouse or by the representative of your estate and must be returned by the deadline specified in the plan in order for supplemental benefits to be paid. The signed General Release of Liability must be received by the Plan Administrator or your Human Resources representative by the 45 th calendar day after the date of layoff. However, if you should die before signing the Release, the signed General Release of Liability must be received by the Plan Administrator by the later of the 45 th calendar day after the date of your death or the 45 th calendar day after the Plan Administrator, or his or her delegate, provides the Release to your spouse or to the representative of your estate. If the 45 th calendar day is a scheduled company holiday, the Release must be received by the next business day. A faxed copy will be accepted, provided it is followed by the original signed Release. The Release must remain unrevoked at all times through, and including, the date you receive full payment of benefits from this plan. The General Release of Liability is revocable during the seven-day period after execution of the Release. It is irrevocable after that seven-day period. Upon request by you, your spouse (if you are deceased), or the representative of your estate (if you are deceased), or the company, the deadline for return of the Release may be extended in those instances where an extension is necessary, in the determination of the Plan Administrator, to resolve or clarify matters relating to the scope or coverage of the Release. An extension may not be granted solely to extend the time benefit payments would otherwise be due under the terms of the plan. If the Plan Administrator does not receive the executed General Release of Liability by the required deadline, you (or your spouse or estate) will not be entitled to supplemental benefits. If the General Release of Liability is not signed and returned as required, only the basic benefit of four (4) weeks will be paid. Layoff pay is calculated as shown below: Years of Service Less than Weeks' Pay 0 4 (Basic Benefit) Years of Service Weeks' Pay

7 Benefit Calculation Examples Following are some examples of how benefits are calculated. Rounding to the nearest dollar has been used for these examples only. Rounding to the nearest dollar will not be used in actual calculations. Example 1 10 Years Service Pat has worked continuously for ConocoPhillips since August 1, His regular monthly base salary rate is $2,600, and he has satisfied all the eligibility requirements of the plan. He is notified of layoff and laid off on June 15, He is eligible for 30 weeks pay ( = 10 years of service). His plan benefit is calculated as follows: $ 600 (week s pay = $2,600 / ) x 30 (3 weeks pay times 10 years of service) $18,000 layoff pay* * If Pat does not sign and return the General Release of Liability as required, he receives only the basic benefit of $2,400 ($600 x 4 weeks). Example 2 25 Years Service Robin has worked continuously for ConocoPhillips since March 1, Her regular monthly base salary rate is $4,335, and she has satisfied all the eligibility requirements of the plan. She is notified of layoff and is laid off on May 16, She is eligible for 60 weeks pay ( = 25 years of service; maximum benefit reached at 20 years of service). Her plan benefit is calculated as follows: $ 1,000 (week s pay = $4,335 / ) x 60 (maximum benefit for 20 or more years of service) $ 60,000 layoff pay* * If Robin does not sign and return the General Release of Liability as required, she receives only the basic benefit of $4,000 ($1,000 x 4 weeks). Aminoil Employees Aminoil employees, who execute a General Release of Liability, may decline, in a form acceptable to the Plan Administrator, the basic and supplemental benefits discussed above and instead receive benefits under the Aminoil schedule as follows: Exempt employees: Eight weeks pay plus one week s pay for each year of service up to 15 years of service plus two weeks pay for each year of service over 15 years of service, maximum of 52 weeks pay. Non-exempt employees: Two weeks pay plus one week s pay for each year of service up to 15 years of service plus two weeks pay for each year of service over 15 years of service, maximum of 52 weeks pay. Benefit Payments Payment Layoff pay will be paid in a lump-sum cash payment. Taxes To the extent any benefit payments are subject to federal or state taxes, the company will withhold any amounts required by law. For expatriate employees, hypothetical taxes will be withheld. Beneficiaries If you die after the company provides you with written notice of layoff, but before receipt of the layoff pay to which you would have been entitled had you lived, the payment will be made to your surviving spouse, or to your estate if you are not married at the date of death. In order to receive supplemental benefits, your spouse or the representative of your estate must sign a General Release of Liability and return it by the deadline specified in the plan. 5

8 Rehire If you receive layoff pay from this plan and are rehired as an employee by the company, you will be required to forfeit and repay the weeks of layoff pay received that exceed the number of weeks from the date of layoff to the date of rehire. Waiver of Benefits You may waive benefits under this plan by filing a written waiver, in a form acceptable to the Plan Administrator, with the Plan Administrator. Such waiver must apply to all benefits otherwise payable under this plan and must be irrevocable. Expenses and Funding of the Plan The company will pay all reasonable expenses necessary for the operation of the plan and payment of benefits from the general assets of the company. Neither employees nor participants shall be required or permitted to make contributions under the plan. The plan is not insured. Plan Administration Plan Identification Information The official name of the plan is the ConocoPhillips Severance Pay Plan. The plan is a welfare benefit plan. The most significant employer whose employees participate in the plan is ConocoPhillips Company. Employer Identification Number: Plan Number Assigned by Company: 545 Date of End of Plan s Fiscal Year: December 31 Effective Date: March 13, 2004 Named Fiduciaries: Plan Administrator ConocoPhillips Severance Pay Plan Committee Plan Administrator The person holding the position of Manager, Human Resources Compensation and Benefits, for ConocoPhillips Company, or the successor in this position, is the Plan Administrator under the plan. The Plan Administrator is responsible for the operation and administration of the plan. The Plan Administrator has discretionary authority under the plan to resolve issues of benefits, eligibility and all other matters arising under the plan. The Plan Administrator is a named fiduciary under the plan and has such authority as given by law and by the terms of the plan. The Plan Administrator may delegate his or her responsibilities and authority under the plan. The Plan Administrator s name, address and telephone number, at the time of the printing of this document, are: James D. McMorran ConocoPhillips 5 A4 Phillips Building Bartlesville, OK Phone: ConocoPhillips Severance Pay Plan Committee ConocoPhillips Company shall appoint a committee consisting of such number of officers or other employees of ConocoPhillips Company as it shall deem appropriate and shall designate its chairman. The ConocoPhillips Severance Pay Plan Committee (Committee) has the power, including, without limitation, discretionary power to make all determinations the plan requires for its administration, and to construe and interpret the plan whenever necessary to carry out its intent and purpose and to facilitate its administration, including, but not by way of limitation, the discretion to grant or to deny claims for benefits under the plan. The Committee has absolute discretion in carrying out its responsibilities. All interpretations of the plan, findings of fact and resolutions made by the Committee are binding, final and conclusive on all parties. 6

9 Errors or Misstatements If an error by the company, agents or representatives occurs with respect to the benefits of you or your beneficiary, or calculation of benefits, or administration of the plan is made, an adjustment will be made in an equitable manner to conform to the facts. Or, if in you or your beneficiary s application or claim for a benefit, or in response to any request of the company for information, you or your beneficiary makes any statement which is erroneous or fails to state any material fact, an adjustment will be made in an equitable manner to conform to the facts. Such adjustments may include, where appropriate, and without limitation, the requirement that you or your beneficiary redeliver to the plan any payment or distribution to you or your beneficiary as a result of such action. Claims Procedures These claims procedures explain the rules that must be followed by the plan when making decisions on claims or appeals. These claims procedures also explain the rules that you must follow to make claims under the plan and to appeal the denial of any claim. Any reduction or termination of a plan benefit will be treated as a claim denial and will be subject to the rules in these claims procedures. You can appeal a reduction or termination of plan benefits the same way you can appeal any other claim denial. You may authorize another person to represent you in making a claim for a plan benefit or in appealing the denial of a claim under the plan. To do so, written authorization must be received by the Plan Administrator. The authorization must be received before the representative makes a claim for benefits or appeal of the denial of a claim on your behalf. If the authorization is received after the claim or request for appeal, the claim or request for appeal will be treated as if it had been received on the date the Plan Administrator received the written authorization for the representative. Filing Claims Under the Plan If you believe you are entitled to benefits but do not receive them, you may file a claim. Any claim for benefits provided under this plan must be presented in writing to the Plan Administrator for consideration, and approval or denial within 24 months after your employment end date with the company. In the event a claim is denied in whole or in part by the Plan Administrator, you will receive a written notice of the denial within a reasonable period of time, but not later than 90 days after receipt of the claim by the Plan Administrator, unless special circumstances require an extension of time for processing, in which case a decision will be rendered within a reasonable time, but not later than 180 days after receipt of a request. In the event your claim is denied, in whole or in part, you will receive written notice containing the following: A statement of the specific reason or reasons for the denial; Reference(s) to the specific plan provisions upon which the denial is based; 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 A description of the plan s appeal procedures and the time limits applicable to such procedures, including a statement of your right to file a lawsuit under section 502(a) of ERISA following a denial of an appeal. Filing for Review of Claim Denial If your claim is denied, in whole or in part, you have the right to request the ConocoPhillips Severance Pay Plan Committee (Committee) review the denial, provided you file a written request for review with the Committee within 60 days after the date you received written notice of denial. You have the right to review free of charge all pertinent documents, records and other information of the plan which relate to your claim and to submit issues and comments in writing. A document, record or information is relevant if it was relied on in a determination of your benefits or if it was submitted, considered or generated in connection with the making of a determination of your benefits. The Committee shall render a decision and notify you regarding the claim within 60 days after the receipt of a request for review, unless special circumstances require an extension of time for processing, in which case a decision will be rendered within a reasonable period of time, but not later 7

10 than 120 days after the receipt of a request for review. In the event that a period of time is extended as permitted due to your failure to submit information necessary to decide your claim, the period for deciding the appeal will be suspended until the date on which you respond to the request for additional information. In the event your appeal is denied, in whole or in part, you will receive written notice containing the following: The specific reason or reasons for the denial; Reference(s) to the specific plan provision on which the denial was based; A statement that you are entitled to documents, records and other information relevant to your claim for benefits; and A statement of your right to file a lawsuit under section 502(a) of ERISA. You must properly file a claim for benefits and request a review of any complete or partial claim denial prior to seeking a review of your claim for benefits in a court of law. A decision on a review of a claim denial shall be the final decision of the Committee. After the Committee provides this final decision, you may seek judicial remedies in accordance with your rights under the Employee Retirement Income Security Act of 1974 (ERISA). Amendment and Termination of the Plan ConocoPhillips Company has the right to terminate, suspend, withdraw, amend or modify the plan and all further payments by the plan in whole or in part at any time; however, No amendment, termination, suspension or withdrawal will affect any benefits which may be payable to a participant who has satisfied all of the eligibility requirements and has become entitled to receive a payment which has not been paid in full; and The plan cannot be amended, terminated, suspended or withdrawn within 24 months after a change in control, except 1) the plan can be amended to comply with legal requirements and 2) the plan can be amended to make changes that do not negatively affect eligibility to be a participant in the plan and that do not negatively affect participants eligibility for benefits, amount of benefits or other rights under the plan. The restrictions described in this paragraph apply to the 24 months after the occurrence of the first event that constitutes a Change in Control. The restrictions lapse at the end of those 24 months, regardless of whether another event that constitutes a Change in Control occurs. Any other employer that has adopted the plan may end participation in the plan for its employees and other beneficiaries (in whole or in part) at any time. Assignment of Benefits The benefits provided by the plan cannot be assigned, sold or transferred, in whole or in part, nor can they be used as security for loans. Benefits are, however, subject to garnishment, attachment or other legal process. If your benefits are garnished or attached by legal process, the company will pay the garnished or attached amount in accordance with the decree ordering such payment. Neither the company nor any plan fiduciary is required to investigate the validity of any decree which appears to be valid on its face. In the event you have an outstanding obligation to the company, you may, with the consent of the company, assign all or a portion of your benefit to the company to the extent of such obligation. Agent for Service of Legal Process The agent designated to receive service of legal process on this plan is: General Counsel ConocoPhillips P.O. Box 4783 Houston, TX Service of legal process may also be made on the Plan Administrator. 8

11 Your Rights Under ERISA As a participant in the ConocoPhillips Severance Pay Plan, you are entitled to certain rights and protections under the Employee Retirement Income Security Act of 1974 (ERISA). ERISA provides all plan participants will be entitled to: Receive Information About Your Plan and Benefits Examine, without charge, at the Plan Administrator s office and at other specified locations, such as worksites and union halls, all documents governing the plan, including collective bargaining agreements, and a copy of the latest annual report (Form 5500 Series) filed by the plan with the U.S. Department of Labor and available at the Public Disclosure Room of the Employee Benefits Security Administration. Obtain, upon written request to the Plan Administrator, copies of documents governing the operation of the plan, including collective bargaining agreements, and copies of the latest annual report (Form 5500 Series) and updated Summary Plan Description (SPD). The Plan Administrator may make a reasonable charge for the copies. Receive a summary of the plan s annual financial report. The Plan Administrator is required by law to furnish each participant with a copy of this summary annual report. Prudent Actions by Plan Fiduciaries In addition to creating rights for plan participants, ERISA imposes duties upon the people who are responsible for the operation of the employee benefit plan. The people who operate this plan, called fiduciaries of the plan, have a duty to do so prudently and in the interest of you and other plan participants and beneficiaries. No one, including your employer, your union, or any other person, may fire you or otherwise discriminate against you in any way to prevent you from obtaining a benefit or exercising your rights under ERISA. Enforce Your Rights If your claim for benefits is denied or ignored, in whole or in part, you have a right to know why this was done, to obtain copies of documents relating to the decision without charge, and to appeal any denial, all within certain time schedules. Under ERISA, there are steps you can take to enforce the above rights. For instance, if you request a copy of plan documents or the latest annual report from the plan and do not receive them within 30 days, you may file suit in a federal court. In such a case, the court may require the Plan Administrator to provide the materials and pay you up to $110 a day until you receive the materials, unless the materials were not sent because of reasons beyond the control of the administrator. If you have a claim for benefits, which is denied or ignored, in whole or in part, you may file suit in a federal court. If it should happen that plan fiduciaries misuse the plan s money, or if you are discriminated against for asserting your rights, you may seek assistance from the U.S. Department of Labor, or you may file suit in a federal court. The court will decide who should pay court costs and legal fees. If you are successful, the court may order the person you have sued to pay these costs and fees. If you lose, the court may order you to pay these costs and fees, for example, if it finds your claim is frivolous. Assistance With Your Questions If you have any questions about this plan, you should contact the Plan Administrator. If you have any questions about this statement or about your rights under ERISA, or if you need assistance in obtaining documents from the Plan Administrator, you should contact the nearest office of the Employee Benefits Security Administration, U.S. Department of Labor, listed in your telephone directory or the Division of Technical Assistance and Inquiries, Employee Benefits Security Administration, U.S. Department of Labor, 200 Constitution Avenue N.W., Washington, D.C You may also obtain certain publications about your rights and responsibilities under ERISA by calling the publications hotline of the Employee Benefits Security Administration. 9

12 Appendix A ConocoPhillips Severance Pay Plan Change of Control The following definitions apply to the Change of Control provision in Section 10 of the Plan. affiliate shall have the meaning ascribed to such term in Rule 12b-2 of the General Rules and Regulations under the Exchange Act, as in effect on March 13, associate shall mean, with reference to any person, (a) any corporation, firm, partnership, association, unincorporated organization or other entity (other than the company or a subsidiary of the company) of which such person is an officer or general partner (or officer or general partner of a general partner) or is, directly or indirectly, the beneficial owner of 10 percent or more of any class of equity securities, (b) any trust or other estate in which such person has a substantial beneficial interest or as to which such person serves as trustee or in a similar fiduciary capacity and (c) any relative or spouse of such person, or any relative of such spouse, who has the same home as such person. beneficial owner shall mean, with reference to any securities, any person if: (a) such person or any of such person s affiliates and associates, directly or indirectly, is the beneficial owner of (as determined pursuant to Rule 13d-3 of the General Rules and Regulations under the Exchange Act, as in effect on March 13, 2004) such securities or otherwise has the right to vote or dispose of such securities, including pursuant to any agreement, arrangement or understanding (whether or not in writing); provided, however, that a person shall not be deemed the beneficial owner of, or to beneficially own, any security under this subsection (a) as a result of an agreement, arrangement or understanding to vote such security if such agreement, arrangement or understanding: (i) arises solely from a revocable proxy or consent given in response to a public (i.e., not including a solicitation exempted by Rule 14a-2(b)(2) of the General Rules and Regulations under the Exchange Act) proxy or consent solicitation made pursuant to, and in accordance with, the applicable provisions of the General Rules and Regulations under the Exchange Act and (ii) is not then reportable by such person on Schedule 13D under the Exchange Act (or any comparable or successor report); (b) such person or any of such person s affiliates and associates, directly or indirectly, has the right or obligation to acquire such securities (whether such right or obligation is exercisable or effective immediately or only after the passage of time or the occurrence of an event) pursuant to any agreement, arrangement or understanding (whether or not in writing) or upon the exercise of conversion rights, exchange rights, other rights, warrants or options, or otherwise; provided, however, that a person shall not be deemed the beneficial owner of, or to beneficially own, (i) securities tendered pursuant to a tender or exchange offer made by such person or any of such person s affiliates or associates until such tendered securities are accepted for purchase or exchange or (ii) securities issuable upon exercise of exempt rights; or (c) such person or any of such person s affiliates or associates (i) has any agreement, arrangement or understanding (whether or not in writing) with any other person (or any affiliates or associates thereof) that beneficially owns such securities for the purpose of acquiring, holding, voting (except as set forth in the proviso to subsection (a) of this definition) or disposing of such securities or (ii) is a member of a group (as that term is used in Rule 13d-5(b) of the General Rules and Regulations under the Exchange Act) that includes any other person that beneficially owns such securities; provided, however, that nothing in this definition shall cause a person engaged in business as an underwriter of securities to be the beneficial owner of, or to beneficially own, any securities acquired through such person s participation in good faith in a firm commitment underwriting until the expiration of 40 days after the date of such acquisition. For purposes hereof, voting a security shall include voting, granting a proxy, consenting or making a request or demand relating to corporate action (including, without limitation, a demand for a stockholder list, to call a stockholder meeting or to inspect corporate 10

13 books and records) or otherwise giving an authorization (within the meaning of Section 14(a) of the Exchange Act) in respect of such security. The terms beneficially own and beneficially owning shall have meanings that are correlative to this definition of the term beneficial owner. Board shall mean the Board of Directors of ConocoPhillips. Change of Control shall mean any of the following occurring on or after March 13, 2004: (a) any Person (other than an exempt person) shall become the beneficial owner of 20 percent or more of the shares of common stock then outstanding or 20 percent or more of the combined voting power of the voting stock of the company then outstanding; provided, however, that no Change of Control shall be deemed to occur for purposes of this subsection (a) if such person shall become a beneficial owner of 20 percent or more of the shares of common stock or 20 percent or more of the combined voting power of the voting stock of the company solely as a result of (i) an exempt transaction or (ii) an acquisition by a person pursuant to a reorganization, merger or consolidation, if, following such reorganization, merger or consolidation, the conditions described in clauses (i), (ii) and (iii) of subsection (c) of this definition are satisfied; (b) individuals who, as of March 13, 2004, constitute the Board (the Incumbent Board) cease for any reason to constitute at least a majority of the Board; provided, however, that any individual becoming a director subsequent to March 13, 2004 whose election, or nomination for election by the company s shareholders, was approved by a vote of at least a majority of the directors then comprising the Incumbent Board shall be considered as though such individual were a member of the Incumbent Board; provided, further, that there shall be excluded, for this purpose, any such individual whose initial assumption of office occurs as a result of any actual or threatened election contest that is subject to the provisions of Rule 14a-11 of the General Rules and Regulations under the Exchange Act; (c) the company shall consummate a reorganization, merger, or consolidation, in each case, unless, following such reorganization, merger, or consolidation, (i) 50 percent or more of the then outstanding shares of common stock of the corporation resulting from such reorganization, merger, or consolidation and the combined voting power of the then outstanding voting stock of such corporation are beneficially owned, directly or indirectly, by all or substantially all of the persons who were the beneficial owners of the outstanding common stock immediately prior to such reorganization, merger, or consolidation in substantially the same proportions as their ownership, immediately prior to such reorganization, merger, or consolidation, of the outstanding common stock, (ii) no person (excluding any exempt person or any person beneficially owning, immediately prior to such reorganization, merger, or consolidation, directly or indirectly, 20 percent or more of the common stock then outstanding or 20 percent or more of the combined voting power of the voting stock of the company then outstanding) beneficially owns, directly or indirectly, 20 percent or more of the then outstanding shares of common stock of the corporation resulting from such reorganization, merger, or consolidation or the combined voting power of the then outstanding voting stock of such corporation, and (iii) at least a majority of the members of the Board of Directors of the corporation resulting from such reorganization, merger, or consolidation were members of the Incumbent Board at the time of the initial agreement or initial action by the Board providing for such reorganization, merger, or consolidation; or (d) (i) the shareholders of the company shall approve a complete liquidation or dissolution of the company unless such liquidation or dissolution is approved as part of a plan of liquidation and dissolution involving a sale or disposition of all or substantially all of the assets of the company to a corporation with respect to which, following such sale or other disposition, all of the requirements of clauses (ii)(a), (B), and (C) of this subsection (d) are satisfied, or (ii) the company shall consummate the sale or other disposition of all or substantially all of the assets of the company, other than to a corporation, with respect to which, following such sale or other disposition, (A) 50 percent or more of the then outstanding shares of common stock of such 11

14 corporation and the combined voting power of the voting stock of such corporation is then beneficially owned, directly or indirectly, by all or substantially all of the persons who were the beneficial owners of the outstanding common stock immediately prior to such sale or other disposition in substantially the same proportion as their ownership, immediately prior to such sale or other disposition, of the outstanding common stock, (B) no person (excluding any exempt person and any person beneficially owning, immediately prior to such sale or other disposition, directly or indirectly, 20 percent or more of the common stock then outstanding or 20 percent or more of the combined voting power of the voting stock of the company then outstanding) beneficially owns, directly or indirectly, 20 percent or more of the then outstanding shares of common stock of such corporation and the combined voting power of the then outstanding voting stock of such corporation, and (C) at least a majority of the members of the Board of Directors of such corporation were members of the Incumbent Board at the time of the initial agreement or initial action of the Board providing for such sale or other disposition of assets of the company. common stock shall mean common stock, par value $.01, of the company. company shall mean ConocoPhillips. election contest shall mean a solicitation of proxies of the kind described in Rule 14a-12(c) under the Exchange Act. Exchange Act shall mean the Securities Exchange Act of 1934, as amended. exempt person shall mean any of the company, any subsidiary of the company, any employee benefit plan of the company or any subsidiary of the company, and any person organized, appointed or established by the company for or pursuant to the terms of any such plan. exempt rights shall mean any rights to purchase shares of common stock or other voting stock of the company if at the time of the issuance thereof such rights are not separable from such common stock or other voting stock (i.e., are not transferable otherwise than in connection with a transfer of the underlying common stock or other voting stock), except upon the occurrence of a contingency, whether such rights exist as of March 13, 2004, or are thereafter issued by the company as a dividend on shares of common stock or other Voting Securities or otherwise. exempt transaction shall mean an increase in the percentage of the outstanding shares of common stock or the percentage of the combined voting power of the outstanding voting stock of the company beneficially owned by any person solely as a result of a reduction in the number of shares of common stock then outstanding due to the repurchase of common stock or voting stock by the company, unless and until such time as (a) such person or any affiliate or associate of such person shall purchase or otherwise become the beneficial owner of additional shares of common stock constituting 1 percent or more of the then outstanding shares of common stock or additional voting stock representing 1 percent or more of the combined voting power of the then outstanding voting stock, or (b) any other person (or persons) who is (or collectively are) the beneficial owner of shares of common stock constituting 1 percent or more of the then outstanding shares of common stock or voting stock representing 1 percent or more of the combined voting power of the then outstanding voting stock shall become an affiliate or associate of such person. person shall mean any individual, firm, corporation, partnership, association, trust, unincorporated organization or other entity. voting stock shall mean, with respect to a corporation, all securities of such corporation of any class or series that are entitled to vote generally in the election of directors of such corporation (excluding any class or series that would be entitled so to vote by reason of the occurrence of any contingency, so long as such contingency has not occurred). 12

15 Glossary of Terms To understand this plan, it is important that you are familiar with certain terms used in the plan and in this SPD which have been given special meaning to describe plan benefits. affiliate: A member of the affiliated group. affiliated group: Consists of ConocoPhillips and entities of which ConocoPhillips has at least a 5 percent ownership interest. Aminoil employee: An employee who was an employee of Aminoil, Inc. on Oct. 26, basic benefit: Four weeks pay. Change in Control: The meaning described in Appendix A to this plan. Code: The Internal Revenue Code (IRC) of 1986, as amended. company: ConocoPhillips Company and any other member of the employer that, with the permission of ConocoPhillips Company, has adopted this plan by action of the adopting company s Board of Directors. comparable employment level: A new job has a comparable employment level to a current job if it is no lower than one level below the level of the current job. For this purpose, level means salary grade or similar pay band established by the company. comparable pay: A new job has comparable pay to a current job if weekly base wages or base salary for the new job, including any pay for regularly scheduled overtime, are equal to or greater than 80 percent of the weekly pay for the current job. ConocoPhillips: The Delaware corporation by that name. corporate event: The sale of an asset or assets by the company or by a member of the employer to one or more unrelated entities, The sale of stock of an entity which is owned by the company or by a member of the employer to one or more unrelated entities, The formation of a joint venture between the company or a member of the employer and one or more unrelated entities, The sale of an interest in a joint venture by the company or a member of the employer to one or more unrelated entities, The cessation of the company s role as operator of a joint venture or business and the commencement of that role by one or more unrelated entities, or The transfer of a job, function or service formerly performed by employees of the company or a member of the employer to one or more unrelated entities. date of layoff: The last day a participant who is laid off is an employee as reflected by the employment end date recorded in the company s personnel records. 13

16 employee: A person who is on the company s direct U.S. dollar payroll, for whom the company or its agent issues a form W-2 to report compensation to the Internal Revenue Service, and who is in a regular full-time or regular part-time employment status on the date of layoff. The term Employee shall not include temporary personnel, intermittent personnel, leased employees within the meaning of Internal Revenue Code Section 414(n), and other non-regular employees of the company. The term Employee shall not include a person who is retroactively reclassified as a common law employee by the Internal Revenue Service or by a court. employer: ConocoPhillips and the members of its controlled group of corporations as that term is defined in section 414(b) of the Code and entities under common control with ConocoPhillips as defined in section 414(c) of the Code. ERISA: The Employee Retirement Income Security Act of 1974, as amended. General Release of Liability (Release): A waiver and Release signed by the participant, or, if the participant is deceased, signed by the participant s spouse or the representative of the participant s estate, in a form acceptable to the company, of all claims, whether or not asserted, arising out of or related to participant s employment or termination from employment. Such waiver and Release shall apply to claims against the company or other members of the affiliated group by participants, including, without limitation, any claims of discrimination arising out of or incident to a participant s employment and termination thereof, other than claims made for work-related injuries under applicable worker s compensation statutes, claims for benefits payable in accordance with the terms of employee benefit plans of the company, and claims regarding reimbursements for business associated expenses the participant may have. inactive disability status: Except as provided in the next sentence, a participant is in inactive disability status if their status as an employee has not been terminated but they are not performing services due to disability. Notwithstanding the preceding sentence, the term Inactive Disability Status shall not include the period of time during which a participant is eligible for short-term disability benefits under the Company s Short-Term Disability Plan or successor plan or program. layoff or laid off: These terms apply if (1) the company gives the participant written notice of layoff, (2) the participant s employment is terminated with the company and with all members of the employer following such written notice of layoff, on a date determined by the company and (3) the termination of employment is caused by a reduction in work force, a job abolishment, a corporate event or the termination of employment is designated by the Chief Executive Officer of ConocoPhillips Company as a layoff. However, even if the company has given a participant written notice of layoff, the participant s termination of employment shall not be considered a layoff if (a) the participant resigns as of a date prior to the date specified for layoff in the notice of layoff, (b) the participant s employment is terminated because he or she failed to accept, within seven calendar days of the offer, a job offered by an employer at comparable pay at a comparable employment level and not in the same geographical area for which he or she would receive relocation assistance, (c) the participant s employment is terminated because he or she failed to accept, within seven calendar days of the offer, a job offered by an employer at comparable pay at a comparable employment level and in the same geographical area, (d) the participant s employment is terminated because he or she failed to accept, within seven calendar days of the offer, a transfer job at comparable pay offered by an affiliate that is not an employer based on a mutual agreement between the company and the affiliate providing for such transfer job offer or (e) the participant accepts any transfer job offered by an affiliate that is not an employer based on mutual agreement between the company and the affiliate providing for such transfer job offer. 14