Key Employee Temporary Severance Plan
KEY EMPLOYEE TEMPORARY SEVERANCE PLAN
The Company hereby adopts the Conoco Inc. Key Employee Temporary
Severance Plan for the benefit of certain employees of the Company and its
subsidiaries, on the terms and conditions hereinafter stated. All capitalized
terms used herein are defined in Section 1 hereof. This Plan is intended to be a
welfare plan maintained primarily for a select group of management or highly
compensated employees, within the meaning of Title I of the Employee Retirement
Income Security Act of 1974, as amended and shall be interpreted in a manner
consistent with such intention.
SECTION 1. DEFINITIONS. As hereinafter used:
1.1 'Affiliate' shall have the meaning set forth in Rule 12(b)(2)
promulgated under Section 12 of the Exchange Act.
1.2 'Beneficial Owner' shall have the meaning set forth in Rule 13(d)(3)
under the Exchange Act.
1.3 'Board' means the Board of Directors of the Company.
1.4 'Change in Control' shall be deemed to have occurred if the event set
forth in any one of the following paragraphs shall have occurred:
(i) any Person is or becomes the Beneficial Owner, directly or
indirectly, of securities of the Company (not including in the
securities beneficially owned by such Person any securities acquired
directly from the Company) representing 30% or more of the combined
voting power of the Company's then outstanding securities, excluding
any Person who becomes such a Beneficial Owner in connection with a
transaction described in clause (A) of paragraph (iii) below; or
(ii) the following individuals cease for any reason to
constitute a majority of the number of directors then serving:
individuals who, on the date hereof, constitute the Board and any
new director (other than a director whose initial assumption of
office is in connection with an actual or threatened election
contest, including but not limited to a consent solicitation,
relating to the election of directors of the Company) whose
appointment or election by the Board or nomination for election by
the Company's stockholders was approved or recommended by a vote of
at least two-thirds (2/3) of the directors then still in office who
either were directors on the date hereof or whose appointment,
election or nomination for election was previously so approved or
(iii) there is consummated a merger or consolidation of the
Company or any direct or indirect subsidiary of the Company with any
other corporation other than (A) a merger or consolidation which
would result in the voting securities of the Company outstanding
prior to such merger or consolidation continuing to represent
(either by remaining outstanding or by being converted into voting
securities of the surviving entity or any parent thereof), in
combination with the ownership of any trustee or other fiduciary
holding securities under an employee benefit plan of the Company or
any subsidiary of the Company, at least 50% of the combined voting
power of the securities of the Company or such surviving entity or
any parent thereof outstanding immediately after such merger or
consolidation, or (B) a merger or consolidation effected to
implement a recapitalization of the Company (or similar transaction)
in which no Person is or becomes the Beneficial Owner, directly or
indirectly, of securities of the Company representing 30% or more of
the combined voting power of the Company's then outstanding
(iv) the stockholders of the Company approve a plan of
complete liquidation or dissolution of the Company or there is
consummated an agreement for the sale or disposition by the Company
of all or substantially all of the Company's assets, other than a
sale or disposition by the Company of all or substantially all of
the Company's assets to an entity, at least 50% of the combined
voting power of the voting securities of which are owned by
stockholders of the Company in substantially the same proportions as
their ownership of the Company immediately prior to such sale.
Notwithstanding the foregoing, a 'Change in Control' shall not be deemed to have
occurred by virtue of the consummation of any transaction or series of
integrated transactions immediately following which the record holders of the
common stock of the Company immediately prior to such transaction or series of
transactions continue to have substantially the same proportionate ownership in
an entity which owns all or substantially all of the assets of the Company
immediately following such transaction or series of transactions
1.5 'Code' means the Internal Revenue Code of 1986, as it may be amended
from time to time.
1.6 'Company means the Conoco Inc. or any successors thereto.
1.7 'Employer' means the Company or any of its subsidiaries.
1.8 'Exchange Act' shall mean the Securities Exchange Act of 1934, as
amended from time to time.
1.9 'Person' shall have the meaning given in Section 3(a)(9) of the
Exchange Act, as modified and used in Sections 13(d) and 14(d) thereof, except
that such term shall not include (i) the Company or any of its Affiliates
(including, without limitation, E.I. du Pont de Nemours and Company), (ii) a
trustee or other fiduciary holding securities under an employee benefit plan of
the Company or any of its Affiliates, (iii) an underwriter temporarily holding
securities pursuant to an offering of such securities, or (iv) a corporation
owned, directly or indirectly, by the stockholders of the Company in
substantially the same proportions as their ownership of stock of the Company.
1.10 'Plan' means the Conoco Inc. Key Employee Temporary Severance Plan,
as set forth herein, as it may be amended from time to time.
1.11 'Plan Administrator' means the person or persons appointed from time
to time by the Board which appointment may be revoked at any time by the Board.
1.12 'Potential Change in Control' shall be deemed to have occurred if:
(a) the Company enters into a written agreement, the consummation of
which would result in the occurrence of a Change in Control; or
(b) any Person (including the Company) publicly announces an intention
to take or to consider taking action which if consummated would
constitute a Change in Control.
1.13 'Public Offering' shall mean the initial sale of common equity
securities of the Company pursuant to an effective registration statement (other
than a registration on Form S-4 or S-8 or any successor or similar forms) filed
under the Securities Act of 1933.
SECTION 2. ELIGIBILITY REQUIREMENTS
You must be in Salary Grade 8 or above and meet both of the following
requirements at the time of your termination to be eligible for Key Employee
Temporary Severance Plan benefits:
o You must be a regular, full-time employee or a regular, part-time employee
(but you must have worked at least 1 year as a regular, full-time employee
immediately before going to regular part-time status) and
o You must have at least 1 full year of service from your most recent date
of employment or reemployment.
If you are not in Salary Grade 8 or above and do not meet both of these
requirements, you are not eligible to participate in the Plan or to receive
SECTION 3. QUALIFYING EVENTS
You must meet the eligibility requirements and at least one of the
qualifying events outlined below to receive Plan benefits.
o You are terminated due to a reduction in force or
o Your current job is abolished or restructured to the extent it is not a
comparable position(1) or
o Your current job is moved, essentially as it currently exists, to a
location outside the immediate geographic area(2) or
(1) A job is considered a comparable position if it is within one salary grade
(or equivalent) of your current salary grade and the base salary is at least 80
percent of your base salary.
o You are displaced by an individual returning from a Company-approved leave
of absence (such as military or educational leave), or
o After a Change in Control, your Salary Grade level is reduced so that you
are no longer eligible for benefits under this Plan.
You will not be eligible to receive Plan benefits if you have any 'disqualifying
events,' even if you have met the eligibility requirements and have a qualifying
SECTION 4. DISQUALIFYING EVENTS
You are not eligible to receive Plan benefits if any of the following
events apply, even if you have met the eligibility requirements and a qualifying
event has occurred.
You are disqualified if you are:
o Discharged by the Company for cause or if you resign;
o Offered and refuse a comparable position in the immediate geographic area
with Conoco, DuPont, or an affiliated company;
o On a temporary assignment (including an expatriate assignment) or 'special
project' (including domestic assignments) and are offered and refuse a
comparable position at the location from which you departed.
o Terminated or if you resign prior to the Company-designated termination
o Terminated while on personal leave of absence;
o A Conoco store employee;
o Represented by a collective bargaining agreement;
o Scheduled off temporarily due to emergencies beyond management's control,
such as fire, flood, strike, power failure, or transportation difficulty
(including transportation strikes that force total or partial suspension
o Disabled on the date of termination and have qualified for Social Security
disability benefits or, in the opinion of the Integrated Health Services
Division, will qualify for such benefits as a result of a disability that
exists on the date you are terminated;
(2) A job is considered in the immediate geographic area if the distance from
your residence to the location of the new position is not more than 35 miles
greater than the distance from your residence to the location of your previous
o Offered employment under an agreement between Conoco, DuPont, or an
affiliated company and a
1. purchaser or recipient of Company assets, entered into in connection
with the transfer or sale of such assets, or
2. third-party provider of services to Conoco, entered into in
connection with the 'outsourcing' or provision of such services,
a. accept the offered employment or
b. reject the offered employment and the offered employment is a
comparable position(1) in the immediate geographic area.(2)
The important points to remember are that to be eligible for Plan
benefits, you must meet the eligibility requirements, have a qualifying event,
and not have a disqualifying event.
SECTION 5. AMOUNT OF SEVERANCE PAY
Plan benefits shall be equal to the sum of an employee's annual base
salary and most recent annual global variable compensation payment. For purposes
of this Section, annual base salary shall be determined immediately prior to the
date a qualifying event occurs and annual global variable compensation shall be
deemed to equal the annual global variable compensation earned by such employee
pursuant to the annual bonus or global variable compensation plan maintained by
the Company in respect to the fiscal year ending immediately prior to the date a
qualifying event occurs. Plan benefits shall be in lieu of any payments or
benefits which may otherwise be payable pursuant to any other severance plan,
policy or program of the Company. If it is determined that an employee has a
right to a payment pursuant to any other severance plan, policy or program of
the Company, the amount of benefits payable under this Plan shall be reduced by
the amount payable pursuant to any other severance plan, policy or program of
The Company shall be entitled to withhold from amounts to be paid
hereunder, any federal, state or local withholding or other taxes or charges
which it is from time to time required to withhold.
SECTION 6. PAYMENT OPTIONS
You have four optional forms of payment:
o Lump sum at time of departure;
o 50 percent at time of departure and 50 percent the following January,
o 50 percent in the January after departure and 50 percent in the following
January, without interest; or
o Semimonthly payments until equivalent severance amount is paid, without
SECTION 7. REEMPLOYMENT AS A REGULAR EMPLOYEE
If you have received severance pay from Conoco, DuPont, or any affiliated
company and are reemployed as a regular, full-time employee or a regular,
part-time employee by any of these companies, you will be required to reimburse
the respective company a pro rata amount of severance pay for any unexpired
period. The reimbursement amount will be determined by multiplying the number of
days absent times the daily rate of severance pay (determined by U.S. HR
Leveraged Services). For example, if you received 6 weeks (30 days) of severance
pay and were reemployed on a regular, full-time basis after 4 weeks (20 days),
you would be required to pay 2 weeks (10 days) of severance pay.
If you are reemployed, terminated, and again qualify for severance pay,
the benefit calculation will be based on your total years of service (including
the second or subsequent service period), rather than solely on the length of
the second or subsequent service period. The second severance amount paid will
be the amount resulting from the following calculation: total severance pay
benefits (based on equated employment date and total full years of service)
minus any previous severance payments already received and not repaid to the
SECTION 8. PLAN ADMINISTRATION
The Plan Administrator shall administer the Plan and may interpret the
Plan, prescribe, amend and rescind rules and regulations under the Plan and make
all other determinations necessary or advisable for the administration of the
Plan, subject to all of the provisions of the Plan.
The Plan Administrator may delegate any of its duties hereunder to such
persons or persons from time to time as it may designate.
The Plan Administrator is empowered, on behalf of the Plan, to engage
accountants, legal counsel and such other personnel as it deems necessary or
advisable to assist it in the performance of its duties under the Plan. The
functions of any such persons engaged by the Plan Administrator shall be limited
to the specified services and duties for which they are engaged, and such
persons shall have no other duties, obligations or responsibilities under the
Plan. Such persons shall exercise no discretionary authority or discretionary
control respecting the management of the Plan. All reasonable expenses thereof
shall be borne by the Employer.
In carrying out its responsibilities under the Plan, including, but not
limited to the review of all claims for benefits under the Plan, the Plan
Administrator shall have full and exclusive discretionary authority to interpret
the terms of the Plan and to determine all issues concerning eligibility for and
entitlement to Plan benefits in accordance with the terms of the Plan.
SECTION 9. PLAN TERMINATION AND/OR AMENDMENT
The Plan shall be effective as of May 10, 1998 and shall terminate on the
third anniversary thereof. The Plan may be amended by the Board or its delegee;
provided, however, that any such amendment during the period that E.I. du Pont
de Nemours and Company owns at least (50%) of the combined voting power of the
Company's then outstanding securities must be approved by E.I. du Pont de
Nemours and Company. Notwithstanding the foregoing, after a Change of Control,
the Plan may not be amended, if such amendment would be adverse to the interest
of any eligible employee, without such eligible employee's written consent.
Change in Control, no Plan termination, except as provided in the first sentence
of this Section 9., shall affect the rights of any eligible employee under this
Plan, without such eligible employee's written consent.
SECTION 10. GENERAL PROVISIONS
Except as otherwise provided herein or by law, no right or interest of any
employee under the Plan shall be assignable or transferable, in whole or in
part, either directly or by operation of law or otherwise, including without
limitation by execution, levy, garnishment, attachment, pledge or in any manner,
no attempted assignment or transfer thereof shall be effective; and no right or
interest of any employee under the Plan shall be liable for, or subject to, any
obligation or liability of such employee. When a payment is due under this Plan
to an employee who is unable to care for his or her affairs, payment may be made
directly to his or her legal guardian or personal representative.
If the Company is obligated by law or by contract to pay severance pay, a
termination indemnity, notice pay, or the like, or if the Company is obligated
by law to provide advance notice of separation ('Notice Period'), then any
payment hereunder shall be reduced by the amount of any such severance pay,
termination indemnity, notice pay or the like, as applicable, and by the amount
of any compensation received during any Notice Period.
Neither the establishment of the Plan, nor any modification thereof, nor
the creation of any fund, trust or account, nor the payment of any benefits
shall be construed as giving any employee, or any person whomsoever, the right
to be retained in the service of the Employer, and all employees shall remain
subject to discharge to the same extent as if the Plan had never been adopted.
If any provision of this Plan shall be held invalid or unenforceable, such
invalidity or unenforceability shall not affect any other provisions hereof, and
this Plan shall be construed and enforced as if such provisions had not been
This Plan shall be binding upon the heirs, executors, administrators,
successors and assigns of the parties, including each employee, present and
future, and any successor to the Employer.
The headings and captions herein are provided for reference and
convenience only, shall not be considered part of the Plan, and shall not be
employed in the construction of the Plan.
The Plan shall not be funded. No employee shall have any right to, or
interest in, any assets of any Employer which may be applied by the Employer to
the payment of benefits or other rights under this Plan.
Any notice or other communication required or permitted pursuant to the
terms hereof shall have been duly given when delivered or mailed by United
States Mail, first class, postage prepaid, addressed to the intended recipient
at his, her or its last known address.
This Plan shall be construed and enforced according to the laws of the
State of Delaware.
SECTION 11. ADMINISTRATIVE PROCEDURES IF A CLAIM IS DENIED
Claims for benefits from the Plan must be submitted in writing to the Plan
If a claim is wholly or partial denied, you will be notified in writing of
the denial within 90 calendar days after U.S. HR Leveraged Services in Ponca
City receives the claim, unless special circumstances require an extension. If
an extension is required, you will be notified in writing of the extension
within 90 calendar days after filing the claim. The written notice will explain
the reason for the delay and estimate a decision date. In no case will the
extension period exceed 180 calendar days from date of receipt of the claim.
You will be advised in writing by the Plan Administrator or the insurance
carrier of the specific reasons for such denial, referred to pertinent Plan
provisions on which the denial is based and provided a description of any
additional material or information required to perfect the claim, an explanation
of why such material or information is necessary, and appropriate information as
to the steps to be taken if you wish to submit your claim for review.
By written request to the Plan Administrator within 60 calendar days after
receipt of notice of denial or partial denial, you may seek review by the Plan
Administrator of such denial or partial denial. You, or your duly authorized
representative, may review pertinent documents relating to the denial and submit
issues and comments in writing.
The Plan Administrator will render a written decision to you within 60
calendar days following receipt of the review request, unless special
circumstances require an extension of time. In that case, a decision will be
rendered no later than 120 calendar days following receipt of your request. If
such an extension is required, written notice of the extension will be furnished
to you prior to the start of the extension.
The Plan Administrator's decision will be furnished to you in writing and
will contain specific reasons for the decision and specific references to
pertinent Plan provisions on which the denial is based.