UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
SCHEDULE 14A
Proxy Statement Pursuant to Section 14(a) of the Securities
Exchange Act of 1934 (Amendment No. )
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ConocoPhillips
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600 North Dairy Ashford
Houston, Texas 77079
600 North Dairy Ashford
Houston, Texas 77079
PROXY STATEMENT
TABLE OF CONTENTS
NOTICE OF 2009 ANNUAL MEETING OF STOCKHOLDERS
Time |
9:00 a.m. (CDT) on Wednesday, May 13, 2009 |
Place |
Omni Houston Hotel at Westside |
13210 Katy Freeway
Houston, Texas 77079
Items of Business
| To elect Directors (page 8); |
| To ratify the appointment of Ernst & Young LLP as independent registered public accounting firm for the Company for 2009 (page 69); |
| To approve the 2009 Omnibus Stock and Performance Incentive Plan (page 71); |
| To consider and vote on six stockholder proposals (pages 78 through 91); and |
| To transact other business properly coming before the meeting. |
Who Can Vote |
You can vote if you were a stockholder of record as of March 16, 2009. |
Voting by Proxy |
Please submit a proxy as soon as possible so that your shares can be voted at the meeting in accordance with your instructions. You may submit your proxy: |
| Over the Internet, |
| By telephone, or |
| By mail. |
For specific instructions, please refer to the section entitled About the Annual Meeting beginning on page 2 of this proxy statement and the voting instructions on the proxy card.
Date of Mailing |
This notice and the proxy statement are first being mailed to stockholders on or about March 31, 2009. |
By Order of the Board of Directors
Janet Langford Kelly
Corporate Secretary
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What are the Committees of the Board?
Committee | Members | Principal Functions | Number of Meetings in 2008 | |||
Audit and Finance |
James E. Copeland, Jr.* Harald J. Norvik Victoria J. Tschinkel |
Discusses with management, the independent auditors, and the internal auditors the integrity of our accounting policies, internal controls, corporate governance, financial statements, financial reporting practices and significant corporate risk exposures, and steps management has taken to monitor, control and report such exposures. Monitors the qualifications, independence and performance of our independent auditors and internal auditors. Monitors our overall direction and compliance with legal and regulatory requirements and corporate governance, including our Code of Business Ethics and Conduct. Maintains open and direct lines of communication with the Board and our management, internal auditors and independent auditors. |
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Executive |
James J. Mulva* Richard H. Auchinleck James E. Copeland, Jr. Ruth R. Harkin William E. Wade, Jr. |
Exercises the authority of the full Board between Board meetings on all matters other than (1) those matters expressly delegated to another committee of the Board, (2) the adoption, amendment or repeal of any of our By-Laws, and (3) matters which cannot be delegated to a committee under statute or our Certificate of Incorporation or By-Laws. |
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Compensation |
William E. Wade, Jr.* Harold W. McGraw III Kathryn C. Turner |
Oversees and administers our executive compensation policies, plans, programs and practices. Assists the Board in discharging its responsibilities relating to the fair and competitive compensation of our executives and other key employees. Annually reviews the performance (together with the Directors Affairs Committee) and sets the compensation of the CEO. |
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Directors Affairs |
Richard H. Auchinleck* Richard L. Armitage Harold W. McGraw III Kathryn C. Turner |
Selects and recommends director candidates to the Board to be submitted for election at the Annual Meeting and to fill any vacancies on the Board. Recommends committee assignments to the Board. Reviews and recommends to the Board compensation and benefits policies for our directors. Reviews and recommends to the Board appropriate corporate governance policies and procedures for our Company. Conducts an annual assessment of the qualifications and performance of the Board. Reviews and reports to the Board annually on the performance of management and succession planning for the CEO. Together with the Compensation Committee, annually reviews the performance of the CEO. |
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Public Policy |
Ruth R. Harkin* Kenneth M. Duberstein William K. Reilly Bobby S. Shackouls |
Advises the Board on current and emerging domestic and international public policy issues. Assists the Board in the development and review of policies and budgets for charitable and political contributions. |
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* Committee Chairperson
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Election of Directors and Director Biographies
(Proposal 1 on the Proxy Card)
Who are this years nominees?
All directors are standing for annual election this year to hold office until the 2010 Annual Meeting of Stockholders.
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The Supplement to the Summary Compensation Table below reconciles the targeted and awarded amounts considered by our Compensation Committee under each of our compensation programs for each Named Executive Officer (other than Mr. Lowe, who announced, in 2008, he was transitioning to a part-time role) with the amount that is required to be reported for 2008 in the Summary Compensation Table on page 35. Targets for equity awards are expressed in dollar amounts (using the assumptions identified in the notes to the table).
SUPPLEMENT TO SUMMARY COMPENSATION TABLE
J.J. Mulva | J.A. Carrig | J.L Gallogly | S.L. Cornelius | R.C. Berney | |||||||||||||||||||||||||||||||
Target | Actual | Target | Actual | Target | Actual | Target | Actual | Target | Actual | ||||||||||||||||||||||||||
Salary |
$ | 1,500,000 | $ | 1,500,000 | $ | 967,333 | $ | 967,333 | $ | 938,458 | $ | 938,458 | $ | 599,667 | $ | 599,667 | $ | 445,333 | $ | 445,333 | |||||||||||||||
VCIP Feb 2009 |
2,025,000 | 1,417,500 | 969,752 | 1,054,944 | 910,305 | 991,322 | 497,723 | 514,522 | 289,467 | 332,308 | |||||||||||||||||||||||||
Stock Options 2008 |
5,737,500 | 5,738,304 | 1,747,150 | 1,748,208 | 1,799,025 | 1,800,480 | 856,800 | 857,648 | 358,700 | 360,096 | |||||||||||||||||||||||||
PSP IV Feb 2009(1) |
4,937,500 | 4,548,864 | 1,617,679 | 1,713,946 | 1,553,997 | 1,646,423 | 712,122 | 721,700 | 318,737 | 323,019 | |||||||||||||||||||||||||
Total Compensation Awarded in 2008 |
14,200,000 | 13,204,668 | 5,301,914 | 5,484,431 | 5,201,785 | 5,376,683 | 2,666,312 | 2,693,537 | 1,412,237 | 1,460,756 | |||||||||||||||||||||||||
Items attributable |
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-Mark to market, amortization and true-ups on prior awards |
N/A | 9,519,033 | N/A | 2,511,309 | N/A | 1,722,538 | N/A | 2,612,004 | N/A | 1,043,958 | |||||||||||||||||||||||||
-Accruals on future awards |
N/A | 1,544,265 | N/A | 1,189,877 | N/A | 494,962 | N/A | 235,781 | N/A | 98,711 | |||||||||||||||||||||||||
-Amount to be recognized in other periods on PSP IV |
N/A | (5,211,709 | ) | N/A | (1,740,494 | ) | N/A | (1,855,044 | ) | N/A | (721,700) | N/A | (323,019 | ) | |||||||||||||||||||||
-Amortization of prior year option awards |
N/A | 43,690 | N/A | 11,656 | N/A | | N/A | 427,327 | N/A | 209,391 | |||||||||||||||||||||||||
-Amount to be recognized in future years on stock option award |
N/A | | N/A | | N/A | | N/A | (380,669 | ) | N/A | (224,199 | ) | |||||||||||||||||||||||
Other items: |
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Change in pension value |
N/A | 9,776,065 | N/A | 3,644,373 | N/A | 2,842,903 | N/A | 774,791 | N/A | 487,264 | |||||||||||||||||||||||||
All other compensation |
N/A | 515,975 | N/A | 142,803 | N/A | 174,646 | N/A | 104,968 | N/A | 75,000 | |||||||||||||||||||||||||
Amount per Summary Compensation Table | N/A | 29,391,987 | N/A | 11,243,955 | N/A | 8,756,688 | N/A | 5,746,039 | N/A | 2,827,862 |
(1) | As described in our Compensation Discussion and Analysis, our PSP is based on a three-year performance cycle. As such, the target amounts shown above related to the three-year performance period ending December 31, 2008 (PSP IV) reflect the initial targeted compensation that was established in February 2006 for the 2006-2008 performance period, including adjustments for promotions that occurred during the period. As also described in our Compensation Discussion and Analysis, the Performance Share Program converts targeted compensation to share units based on the Companys stock price at the beginning of the performance period, including an adjustment for foregone dividends. Without giving effect to share price depreciation throughout the three-year performance period, the Actual amount reported above for PSP IV would have been $5,431,250 for Mr. Mulva, $2,046,364 for Mr. Carrig, $1,965,806 for Mr. Gallogly, $861,668 for Mr. Cornelius, and $385,672 for Mr. Berney. The difference between these amounts and the amounts shown in the Actual column above is attributable to stock price depreciation of 11 percent during the 2006-2008 performance period. |
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SUPPLEMENTAL TABLE 2009 TARGET COMPENSATION
In addition to determining the 2008 compensation payouts, the Compensation Committee established the targets for 2009 compensation for our Named Executive Officers (other than Mr. Lowe, who announced, in 2008, he was transitioning to a part-time role) under our four primary compensation programs.
As discussed under Performance-Based Pay Programs beginning on page 24, with the exception of salary, the targeted amounts shown below are performance-based and, therefore, actual amounts received under such programs, if any, may differ from the targets shown below.
Name | Salary | 2009 VCIP Target |
2009 Stock Option |
PSP VII (2009-2011) Target Value |
Total 2009 Target Compensation |
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J.J. Mulva |
$ | 1,500,000 | $ | 2,025,000 | $ | 5,737,500 | $ | 5,737,500 | $ | 15,000,000 | |||||||||||||||
J.A. Carrig |
1,145,000 | 1,259,500 | 3,549,500 | 3,549,500 | 9,503,500 | ||||||||||||||||||||
J.L. Gallogly |
1,017,500 | 986,975 | 2,111,313 | 2,111,313 | 6,227,101 | ||||||||||||||||||||
S.L. Cornelius |
678,000 | 562,740 | 1,067,850 | 1,067,850 | 3,376,440 | ||||||||||||||||||||
R.C. Berney |
450,000 | 292,500 | 382,500 | 382,500 | 1,507,500 |
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This graph shows ConocoPhillips cumulative total stockholder return over the five-year period from December 31, 2003, to December 31, 2008. The graph also shows the cumulative total returns for the same five-year period of the S&P 500 Index and our performance peer group of companies consisting of BP, Chevron, ExxonMobil, Royal Dutch Shell, and Total. The comparison assumes $100 was invested on December 31, 2003, in ConocoPhillips stock, in the S&P 500 Index and in ConocoPhillips peer group and assumes that all of the dividends were reinvested.
Five-Year Cumulative Total Stockholder Return
Five Years Ended December 31, 2008
December 31 | ||||||||||||||||||
Initial | 2004 | 2005 | 2006 | 2007 | 2008 | |||||||||||||
ConocoPhillips |
$ | 100 | $ | 136 | $ | 185 | $ | 234 | $ | 294 | $ | 177 | ||||||
Peer Group(1) |
100 | 123 | 138 | 172 | 210 | 161 | ||||||||||||
S&P 500 |
100 | 111 | 116 | 135 | 142 | 90 |
(1) | Performance Peer Group consists of BP, Chevron, ExxonMobil, Royal Dutch Shell, and Total. |
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The following tables and accompanying narrative disclosures and footnotes provide information concerning total compensation paid to the Chief Executive Officer, the Chief Financial Officer, and certain other officers of ConocoPhillips (the Named Executive Officers). Please also see our discussion of the relationship between the Compensation Discussion and Analysis to these tables under Compensation Analysis beginning on page 28. The data presented in the tables that follow include amounts paid to the Named Executive Officers by ConocoPhillips or any of its subsidiaries in 2008. Information about stock and stock-based awards has been adjusted in the tables below to reflect the 2-for-1 split of the Companys common stock that was effective on June 1, 2005.
As discussed in the Compensation Discussion and Analysis section of this proxy statement, ConocoPhillips provides its executives with a number of compensation and benefit arrangements. The Summary Compensation Table below reflects amounts earned with respect to 2008 under those arrangements. We have excluded arrangements that are generally available to our U.S.-based salaried employees, such as our medical, dental, disability, and flexible spending account arrangements, since all of our Named Executive Officers are U.S.-based salaried employees. Salary and other compensation for these officers are set by the Compensation Committee of the Board of Directors, as described in the Compensation Discussion and Analysis. Based on the salary and total compensation amounts for Named Executive Officers for 2008 shown in the table below, salary accounted for approximately 8.3 percent of the total compensation of the Named Executive Officers, and incentive compensation programs (stock awards, option awards, and non-equity incentive plan compensation) accounted for approximately 60.4 percent of the total compensation for Named Executive Officers. For the CEO alone in 2008, salary accounted for approximately 5.1 percent of the total compensation, and incentive compensation programs accounted for approximately 59.9 percent of the total compensation. These numbers reflect the emphasis placed by the Company on performance-based pay, as discussed in the Compensation Discussion and Analysis section of this proxy statement.
Name and Principal Position | Year | Salary ($)(1) |
Bonus ($)(2) |
Stock Awards ($)(3) |
Option Awards ($)(4) |
Non-Equity Incentive Plan Compensation ($)(5) |
Change
in Value and ($)(6) |
All Other Compensation ($)(7) |
Total ($) |
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J.J. Mulva |
2008 | $ | 1,500,000 | $ | | $ | 10,400,453 | $ | 5,781,994 | $ | 1,417,500 | $ | 9,776,065 | $ | 515,975 | $ | 29,391,987 | ||||||||||||||||||
Chairman and CEO |
2007 | 1,500,000 | | 37,949,152 | 5,542,175 | 3,442,500 | 1,727,552 | 387,647 | 50,549,026 | ||||||||||||||||||||||||||
2006 | 1,500,000 | | 26,396,778 | 6,340,259 | 3,383,775 | 5,449,910 | 373,302 | 43,444,024 | |||||||||||||||||||||||||||
J.A. Carrig |
2008 | 967,333 | | 3,674,638 | 1,759,864 | 1,054,944 | 3,644,373 | 142,803 | 11,243,955 | ||||||||||||||||||||||||||
President and COO |
2007 | 817,500 | | 11,224,184 | 1,632,457 | 1,186,291 | 1,424,708 | 131,239 | 16,416,379 | ||||||||||||||||||||||||||
2006 | 695,000 | | 6,238,265 | 1,698,868 | 1,017,967 | 1,931,140 | 101,195 | 11,682,435 | |||||||||||||||||||||||||||
J.L. Gallogly(8) |
2008 | 938,458 | | 2,008,879 | 1,800,480 | 991,322 | 2,842,903 | 174,646 | 8,756,688 | ||||||||||||||||||||||||||
Executive Vice President, Exploration and Production |
2007 | 858,666 | | 3,261,590 | 2,301,421 | 1,237,698 | 1,046,381 | 135,002 | 8,840,758 | ||||||||||||||||||||||||||
2006 | 612,747 | | 1,867,784 | 532,879 | 882,037 | 103,786 | 170,455 | 4,169,688 | |||||||||||||||||||||||||||
J.E. Lowe |
2008 | 817,367 | | 1,503,315 | 1,065,926 | 817,424 | 1,241,031 | 141,742 | 5,586,805 | ||||||||||||||||||||||||||
Assistant to CEO |
2007 | 660,400 | | 2,634,613 | 670,000 | 888,638 | 705,492 | 119,749 | 5,678,892 | ||||||||||||||||||||||||||
2006 | 583,500 | | (2,050,163 | ) | 570,356 | 856,221 | 787,016 | 79,329 | 826,259 | ||||||||||||||||||||||||||
S.L. Cornelius |
2008 | 599,667 | | 2,847,785 | 904,306 | 514,522 | 774,791 | 104,968 | 5,746,039 | ||||||||||||||||||||||||||
Senior Vice President, Finance, and CFO |
2007 | 515,000 | | 1,584,780 | 466,048 | 596,607 | 1,088,376 | 84,684 | 4,335,495 | ||||||||||||||||||||||||||
2006 | 451,000 | | (688,065 | ) | 357,501 | 472,648 | 813,930 | 64,881 | 1,471,895 | ||||||||||||||||||||||||||
R.C. Berney |
2008 | 445,333 | | 1,142,669 | 345,288 | 332,308 | 487,264 | 75,000 | 2,827,862 | ||||||||||||||||||||||||||
Vice President and Controller |
2007 | 418,001 | | 1,419,738 | 232,786 | 406,464 | 287,879 | 60,399 | 2,825,267 | ||||||||||||||||||||||||||
2006 | 394,170 | | (496,702 | ) | 199,850 | 399,688 | 517,896 | 54,634 | 1,069,536 |
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(1) | Includes any amounts that were voluntarily deferred to the Companys Key Employee Deferred Compensation Plan. |
(2) | Because our primary bonus arrangement for salaried employees (the Variable Cash Incentive Program or VCIP) has mandatory performance measures that must be achieved before there is any payout to Named Executive Officers, amounts paid under VCIP are shown in the Non-Equity Incentive Plan Compensation column of the table, rather than the bonus column. In proxy statements relating to annual meetings prior to 2007, these amounts were shown in the bonus column. See Note (5) below for a discussion of VCIP awards shown in the table above. |
(3) | Amounts shown in the Stock Awards column represent the dollar amount recognized for financial statement reporting purposes for the fiscal years ended December 31, 2008, December 31, 2007, and December 31, 2006, as applicable, as determined under FAS 123(R). FAS 123(R) may require us to include amounts attributable to awards approved both in and prior to the applicable year. See the Share-Based Compensation Plans section of Note 20 in the Notes to Consolidated Financial Statements in the Companys 2008 Annual Report on Form 10-K for a discussion of the relevant assumptions used in this determination. |
The amounts shown for stock awards are from our Performance Share Program (PSP), from long-term incentive programs of predecessor companies and from off-cycle awards. These may include awards that were originally set as target awards as early as 1998 and may extend to actual awards that are expected to be finalized as late as 2011. No new awards were made by the Company in 2008, 2007, or 2006 under long-term incentive programs of predecessor companies, but in accordance with FAS 123(R), values under these programs are taken into account for long periods of time after the actual approval of an award. The amounts shown for awards from PSP relate to performance periods that began in the years presented or earlier. Performance periods under PSP generally cover a three-year period and, as a new performance period has begun each year since the program commenced in 2003, there are three overlapping performance periods ongoing at any time. Amounts during 2006 may include reversals of prior year expense associated with the implementation of FAS 123(R). |
In February 2006, the Compensation Committee determined performance and approved final payout with regard to the performance period that began in 2003 and ended in 2005. In December 2006, the Compensation Committee approved the commencement of a performance period covering 2007 through 2009. In February 2007, the Compensation Committee determined performance and approved final payout with regard to the performance period that began in 2004 and ended in 2006. In December 2007, the Compensation Committee approved the commencement of a performance period covering 2008 through 2010. In February 2008, the Compensation Committee determined performance and approved final payout with regard to the performance period that began in 2005 and ended in 2007. In February 2009, the Compensation Committee approved the commencement of a performance period covering 2009 through 2011 and determined performance and approved final payout with regard to the performance period that began in 2006 and ended in 2008. |
Awards under PSP are made in restricted stock or restricted stock units that will generally be forfeited if the employee is terminated prior to age 65 (other than for death or following disability or after a change in control). In the event of termination due to layoff or early retirement after age 55 with five years of service, a value for the forfeited restricted stock or restricted stock units will generally be credited to a deferred compensation account for the employee for awards made prior to 2005; for later awards, restrictions lapse in the event of termination due to layoff or early retirement after age 55 with five years of service, unless the employee has elected to defer receipt of the stock until a later time. |
We set forth the cost to the Company under FAS 123(R), using the modified prospective transition method required by the Securities Exchange Commission for purposes of this disclosure. Thus, if a Named Executive Officer has attained the early retirement age of 55 with five years of service before July of the year in which final payouts are made, amounts shown reflect a ratable portion of the FAS 123(R) value for a targeted award under PSP. If a Named Executive Officer is not projected to attain age 55 with five years of service before July of the year in which such awards are made, no expense is recognized when a target is established. In this circumstance, expense is recognized only with a final award, and that cost is amortized over the period remaining until the Named Executive Officer will attain age 55 with five years of service. |
(4) | Amounts represent the FAS 123(R) valuation for the years ended December 31, 2008, December 31, 2007, and December 31, 2006 and, thus, may include amounts attributable to awards approved in and prior to the applicable year. All such options were awarded under the Companys Stock Option (and Stock Appreciation Rights) Program. Options awarded to Named Executive Officers under that program generally vest in three equal annual installments beginning with the first anniversary from the date of grant and expire ten years after the date of grant. However, in the event that a Named Executive Officer has attained the early retirement age of 55 with five years of service, the value of the options granted is taken in the year of grant or over the number of months until the executive attains age 55 with five years of service. Therefore, the amounts shown for Messrs. Mulva, Carrig, and Gallogly include the full grant value of the options granted in 2008. The amounts include approximately one-third of the value of options granted in 2006, one-third of the value of options granted in 2007, and one-third of the value of options granted in 2008 for Messrs. Lowe and Berney. For Mr. Cornelius, the amounts include approximately one-third of the value of the options granted in 2006, two-fifths of the value of the options granted in 2007, and five-ninths of the value of the options granted in 2008 (due to his age being within three years of age 55). See the Share-Based Compensation Plans section of Note 20 in the Companys 2008 Annual Report on Form 10-K for a discussion of the relevant assumptions used in this determination. |
Option awards are made in February of each year at a regularly-scheduled meeting of the Compensation Committee. Occasionally, option awards may be made at other times, such as upon the commencement of employment of an individual. In determining the number |
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of shares to be subject to these option grants, the Compensation Committee used a Black-Scholes-Merton-based methodology to value the options. In February 2009, the Compensation Committee determined option awards for that year, which become exercisable on the anniversary date of the grant in years 2010, 2011, and 2012, so some of the value will be shown in subsequent proxy statements. In February 2008, the Compensation Committee determined option awards for that year, which become exercisable on the anniversary date of the grant in years 2009, 2010, and 2011, so some of the value will be shown in subsequent proxy statements. In February 2007, the Compensation Committee determined option awards for that year, which will vest on the anniversary date of the grant in years 2008, 2009, and 2010, so some of the value will be shown in subsequent proxy statements and in February 2006, the Compensation Committee determined option awards for that year, which will become exercisable on the anniversary date of the grant in years 2007, 2008, and 2009, so some of the value will be shown in subsequent proxy statements. With respect to Mr. Gallogly, amounts in 2006 also reflect the award made in connection with the commencement of his employment. |
(5) | Includes amounts paid under VCIP, our primary non-equity incentive arrangement and includes amounts that were voluntarily deferred to the Companys Key Employee Deferred Compensation Plan. For the 2008 program year, payments were made in February 2009, for the 2007 program year, payments were made in February 2008 and for the 2006 program year payments were made in February 2007. See also Note (2) above. |
With regard to Named Executive Officers, the Compensation Committee sets two tiers of performance criteria. First, performance criteria under VCIP apply to all eligible employees, including the Named Executive Officers. The Compensation Committee assessed individual performance of Senior Officers, including all of the Named Executive Officers, at its February 2009 meeting for the 2008 program year, at its February 2008 meeting for the 2007 program year, and at its February 2007 meeting for the 2006 program year. Under VCIP, the amounts of individual awards are discretionary, but are expected, except in extraordinary cases, to range from zero to 200 percent of the target amount for the award year, based on the Compensation Committees assessment of total Company and business unit performance, with an award for individual performance available of up to an additional 50 percent. At its February 2009 meeting, the Compensation Committee approved the individual awards for Senior Officers, including the Named Executive Officers, for the 2008 program year. At its February 2008 meeting, the Compensation Committee approved the individual awards for Senior Officers, including the Named Executive Officers, for the 2007 program year. At its February 2007 meeting, the Compensation Committee approved the individual awards for Senior Officers, including the Named Executive Officers, for the 2006 program year. Individual awards for other employees were approved by the CEO effective at the same time. |
In addition, in order for a Named Executive Officer to receive any award under VCIP a second set of threshold criteria must be met. This tier of performance measure and methodology is designed to meet requirements for deductibility of this item of compensation under section 162(m) of the Internal Revenue Code. Pursuant to this tier, a maximum payment for the performance period under VCIP is set, but it is subject to downward adjustment through the application of the generally applicable methodology for VCIP awards discussed in the prior paragraph, so it effectively establishes a ceiling for VCIP payments to each Named Executive Officer. Performance criteria for the 2008 program year required that the Company meet one of the following measures as a threshold to an award being made to any Named Executive Officer: (1) Top two-thirds of specified companies in improvement in return on capital employed (adjusted to purchase accounting); (2) Top two-thirds of specified companies in total stockholder return; (3) Top two-thirds of specified companies in income per barrel-of-oil-equivalent; or (4) Cash from operations (normalized to assumptions made in our budgeting process as to price for oil equivalents and excluding non-cash working capital) of at least $14.875 billion. In addition to ConocoPhillips, the specified companies for this purpose were BP, Chevron, ExxonMobil, Royal Dutch Shell, and Total. At its February 2009 meeting, the Compensation Committee determined that this threshold had been achieved. Performance criteria for the 2007 program year required that the Company meet one of the following measures as a threshold to an award being made to any Named Executive Officer: (1) Top two-thirds of specified companies in return on capital employed (adjusted to pooling accounting); (2) Top two-thirds of specified companies in total stockholder return; (3) Top two-thirds of specified companies in income per barrel-of-oil-equivalent; or (4) Cash from operations (normalized to assumptions made in our budgeting process as to price for oil equivalents and excluding non-cash working capital) of at least $14.5 billion. In addition to ConocoPhillips, the specified companies for this purpose were BP, Chevron, ExxonMobil, Royal Dutch Shell, and Total. At its February 2008 meeting, the Compensation Committee determined that this threshold had been achieved. Performance criteria for the 2006 program year required that the Company meet one of the following measures as a threshold to an award being made to any Named Executive Officer: (1) Top two-thirds of specified companies in return on capital employed (adjusted to pooling accounting); (2) Top two-thirds of specified companies in total stockholder return; or (3) Cash from operations (normalized to assumptions made in our budgeting process as to price for oil equivalents and excluding non-cash working capital) of at least $9 billion. In addition to ConocoPhillips, the specified companies for this purpose were BP, Chevron, ExxonMobil, Royal Dutch Shell, and Total. At its February 2007 meeting, the Compensation Committee determined that this threshold had been achieved. |
(6) | Amounts shown in the Change in Pension Value and the Nonqualified Deferred Compensation Earnings column represent the actuarial increase in the present value of the Named Executive Officers benefits under all pension plans maintained by the Company determined using interest rate and mortality rate assumptions consistent with those used in the Companys financial statements. Interest rate assumption changes have a significant impact on the pension values with periods of lower interest rates having the effect of increasing the actuarial values reported. |
(7) | As discussed in the Compensation Discussion and Analysis section of this proxy statement, ConocoPhillips provides its executives with a number of compensation and benefit arrangements. The table below reflects amounts earned under those arrangements. We have excluded arrangements that are generally available to our U.S.-based salaried employees, such as our medical, dental, disability, and flexible spending account arrangements, since all of our Named Executive Officers are U.S.-based salaried employees. All Other Compensation includes the following amounts, which were determined using actual cost paid by the Company unless otherwise noted: |
37
Personal Use of Company Aircraft(a) |
Automobile Provided by Company(b) |
Home Security(c) |
Financial Planning(d) |
Club Dues(e) |
Executive Group Life Insurance Premiums(f) | |||||||||||||||||||||||||||
J.J. Mulva |
2008 | $ | 54,802 | $ | 25,409 | $ | 230 | $ | 20,000 | $ | | $ | 11,880 | |||||||||||||||||||
2007 | 35,309 | 22,740 | 10,498 | 20,000 | | 11,880 | ||||||||||||||||||||||||||
2006 | 41,154 | 23,257 | 1,315 | 20,000 | | 11,190 | ||||||||||||||||||||||||||
J.A. Carrig |
2008 | | | | | | 4,898 | |||||||||||||||||||||||||
2007 | | | | | | 4,219 | ||||||||||||||||||||||||||
2006 | | | | | | 1,902 | ||||||||||||||||||||||||||
J.L. Gallogly |
2008 | | | 599 | 1,454 | | 4,803 | |||||||||||||||||||||||||
2007 | | | 6,652 | 2,600 | | 4,431 | ||||||||||||||||||||||||||
2006 | | | 5,782 | 2,250 | | 1,691 | ||||||||||||||||||||||||||
J.E. Lowe |
2008 | | | | 10,000 | | 1,471 | |||||||||||||||||||||||||
2007 | | | | 10,000 | | 1,169 | ||||||||||||||||||||||||||
2006 | | | | 5,000 | | 1,050 | ||||||||||||||||||||||||||
S.L Cornelius |
2008 | | | | 10,000 | | 1,633 | |||||||||||||||||||||||||
2007 | | | | 10,000 | 1,306 | 1,405 | ||||||||||||||||||||||||||
2006 | | | | 10,000 | | 1,245 | ||||||||||||||||||||||||||
R.C. Berney |
2008 | | | | 10,000 | | 1,229 | |||||||||||||||||||||||||
2007 | | | | 10,000 | | 1,154 | ||||||||||||||||||||||||||
2006 | | | | 8,335 | | 1,088 |
Tax Reimbursement Gross-Up(g) |
Relocation(h) | Director Charitable Gift Program(i) |
Matching Gift Program(j) |
Matching Contributions Under the Tax-Qualified Savings Plans(k) |
Company Contributions to Nonqualified Defined Contribution Plans(l) | |||||||||||||||||||||||||
J.J. Mulva |
2008 | $ | 27,163 | $ | | $ | 113,537 | $ | 18,500 | $ | 22,576 | $ | 221,878 | |||||||||||||||||
2007 | 8,427 | | 43,628 | 18,000 | 22,668 | 194,497 | ||||||||||||||||||||||||
2006 | 11,623 | | 48,342 | 18,500 | 20,698 | 177,223 | ||||||||||||||||||||||||
J.A. Carrig |
2008 | | | | 2,500 | 22,576 | 112,829 | |||||||||||||||||||||||
2007 | | | | 24,500 | 22,668 | 79,852 | ||||||||||||||||||||||||
2006 | | | | 15,000 | 20,693 | 63,600 | ||||||||||||||||||||||||
J.L. Gallogly |
2008 | 9,168 | | | 21,000 | 22,576 | 115,046 | |||||||||||||||||||||||
2007 | 2,943 | | | 5,000 | 22,668 | 90,708 | ||||||||||||||||||||||||
2006 | 1,387 | 133,607 | | | 20,829 | 4,909 | ||||||||||||||||||||||||
J.E. Lowe |
2008 | 585 | | | 14,500 | 22,576 | 92,610 | |||||||||||||||||||||||
2007 | 733 | | | 27,500 | 22,668 | 57,679 | ||||||||||||||||||||||||
2006 | 1,374 | | | 3,600 | 20,693 | 47,612 | ||||||||||||||||||||||||
S.L Cornelius |
2008 | 1,252 | | | 13,300 | 22,576 | 56,207 | |||||||||||||||||||||||
2007 | | | | 10,864 | 22,668 | 38,441 | ||||||||||||||||||||||||
2006 | 749 | | | 2,130 | 20,693 | 30,064 | ||||||||||||||||||||||||
R.C. Berney |
2008 | 6,022 | | | 2,000 | 22,221 | 33,528 | |||||||||||||||||||||||
2007 | | | | | 22,846 | 26,399 | ||||||||||||||||||||||||
2006 | 761 | | | 1,000 | 20,908 | 22,542 |
38
(a) | The Comprehensive Security Program of the Company requires that Mr. Mulva fly on Company aircraft, unless a determination is made by the Manager of Global Security that other arrangements are an acceptable risk. Numbers above represent the approximate incremental cost to ConocoPhillips for personal use of the aircraft, including travel for any family member or guest. Approximate incremental cost has been determined by calculating the variable costs for each aircraft during the year, dividing that amount by the total number of miles flown by that aircraft, and multiplying the result by the miles flown for personal use in 2008, 2007, and 2006. Included in incremental costs reported is $24,202 in 2008, $20,551 in 2007, and $17,782 in 2006 associated with flights to the Company hangar or other locations without passengers, commonly referred to as deadhead flights. Effective June 22, 2007, the Company and Mr. Mulva entered into an agreement, the Time Share Agreement, with regard to certain of the Companys aircraft, pursuant to which Mr. Mulva agreed to reimburse the Company for his personal use of the aircraft, subject to certain limitations required by the Federal Aviation Administration. The amounts shown for incremental costs related to the personal use of an aircraft by Mr. Mulva reflect the net incremental costs to the Company after giving effect to any reimbursements received under the Time Share Agreement. |
(b) | The value shown in the table represents the approximate incremental cost to the Company of providing and maintaining an automobile, excluding Company security personnel. Approximate incremental cost was calculated using actual expenses incurred during the year. Other executives and employees of the Company may also be required to use Company-provided transportation and security personnel, especially when traveling or living outside of the United States, in accordance with risk assessments made by the Companys Manager of Global Security. |
(c) | The use of a home security system is required as part of ConocoPhillips Comprehensive Security Program for certain executives and employees, including the Named Executive Officers noted above based on risk assessments made by the Companys Manager of Global Security. Amounts shown represent the approximate incremental cost to ConocoPhillips for the installation and maintenance of the home security system with features required by the Company in excess of the cost of a standard system typical for homes in the neighborhoods where the Named Executive Officers homes are located. The Named Executive Officer pays the cost of the standard system himself. |
(d) | Historically, the Company had an Executive Financial Planning Program under which financial and tax planning expenses incurred by eligible executives were reimbursed by the Company up to $20,000 for the CEO and up to $10,000 for other Named Executive Officers. This personal benefit was discontinued effective at the end of 2008. |
(e) | Historically, the Company had provided a nominal amount for membership in a social club to certain executives for use in conducting Company business. The amount shown here is for annual dues since it is possible for the executive to use the club for personal use. No other amounts for personal use were reimbursed or paid by the Company, although the Company did pay or reimburse any amounts for business use of the club, such as entertaining customers. This personal benefit was discontinued effective at the end of 2007. |
(f) | The amounts shown are for premiums paid by the Company for executive group life insurance provided by the Company, with a value equal to the employees annual salary. In addition, certain employees of the Company, including the Named Executive Officers, are eligible to purchase group variable universal life insurance policies for which the employee pays all costs, so that there is no incremental cost to the Company. |
(g) | The amounts shown are for payments by the Company relating to certain taxes incurred by the employee. These primarily occur when the Company requests family members or other guests to accompany the employee to Company functions and, as a result, the employee is deemed to make a personal use of Company assets (for example, when a spouse accompanies an employee on a Company aircraft). The Company believes that such travel is appropriately characterized as a business expense and, therefore, in such circumstances, if the employee is imputed income in accordance with the applicable tax laws, the Company will generally reimburse the employee for any increased tax costs. |
(h) | Mr. Gallogly became an employee of the Company on April 1, 2006. The Company reimbursed Mr. Gallogly for certain of his relocation costs. |
(i) | Mr. Mulva is a member of the Board of Directors and as such was entitled to participate in the Director Charitable Gift Program. This program allowed eligible directors to designate charities and tax-exempt educational institutions to receive a donation from the Company of up to $1 million upon his or her death. Directors were vested in the program after one year of service on the Board, and Mr. Mulva was thus eligible. In 2008, as part of its regular review of the compensation of directors, the Committee on Directors Affairs decided to discontinue the Director Charitable Gift Program for current directors and future director appointees. With respect to current directors, the Company made payments equal to the net present value of the outstanding awards to charities designated by such directors in 2008. Amounts above reflect the cost to the company of the 2008 payments, less any costs reported in previous periods with respect to the Director Charitable Gift Program. |
(j) | The Company maintains a Matching Gift Program under which certain gifts by employees to qualified educational or charitable institutions are matched. For executives, the program matches up to $15,000 with regard to each program year. Administration of the program can cause more than $15,000 to be paid in a single fiscal year of the Company, due to processing claims from more than one program year in that single fiscal year. The amounts shown are for the actual payments by the Company during the year. |
(k) | Under the terms of its tax-qualified defined contribution plans, the Company makes matching contributions and allocations to the accounts of its eligible employees, including the Named Executive Officers. |
39
(l) | Under the terms of its nonqualified defined contribution plans, the Company makes contributions to the accounts of its eligible employees, including the Named Executive Officers. See the narrative, table, and notes to the Nonqualified Deferred Compensation table for further information. |
(8) | Mr. Gallogly became an employee of ConocoPhillips on April 1, 2006. Prior to joining ConocoPhillips, Mr. Gallogly was President and Chief Executive Officer for Chevron Phillips Chemical Company LLC. ConocoPhillips owns a 50 percent interest in Chevron Phillips Chemical Company LLC. None of the compensation or benefits earned by Mr. Gallogly as an employee of Chevron Phillips Chemical Company LLC is included in the Table. |
40
GRANTS OF PLAN-BASED AWARDS TABLE
The Grants of Plan-Based Awards Table is used to show participation by the Named Executive Officers in the incentive compensation arrangements described below.
The columns under the heading Estimated Future Payouts Under Non-Equity Incentive Plan Awards show information regarding the ConocoPhillips Variable Cash Incentive Program (VCIP), a performance-based bonus program that sets a target level and minimum and maximum cash payouts for each one-year performance cycle. These targets are set as a percentage of salary which varies by salary grade level. Minimum possible payouts are set at zero, as the Compensation Committee retains the authority to reduce any award from the target to zero. Maximum possible payouts are set at $10 million for each of the Named Executive Officers, under a limitation of the program designed to comply with section 162(m) of the Internal Revenue Code. This maximum was set at the December 2007 meeting of the Compensation Committee, at which it also approved separate performance criteria for any VCIP payment to the Named Executive Officers with regard to the 2008 program year. In practice, that limit has never been reached in the history of the program, due to the Compensation Committee exercising its discretion to reduce any award from the maximum payout level. Within the parameters of the program, a second (lower) maximum possible payout related to corporate and business unit performance is set at 200 percent of the target level, with a further possible adjustment of up to 50 percent of the target level for individual performance. This applies to all participants in VCIP, including the Named Executive Officers, although since the Compensation Committee has ultimate authority to grant awards, it is permitted to grant awards higher than the maximum set in the program. The maximum possible payouts set forth in the Table are shown at 250 percent of target. The amounts shown in the Table are those applicable to the 2008 program year using a minimum of zero and a maximum of 250 percent of VCIP target for each participant and do not represent actual payouts for that program year. Actual payouts for the 2008 program year were made in February 2009 and are shown in the Summary Compensation Table under the Non-Equity Incentive Plan Compensation column.
The columns under the heading Estimated Future Payouts Under Equity Incentive Plan Awards show information regarding the ConocoPhillips Performance Share Program (PSP), a performance-based program that sets a target level and minimum and maximum restricted stock unit payouts at the conclusion of the three-year performance period. The Compensation Committee, at its annual compensation review and approval meeting in February, approves targets for each of the Senior Officers of the Company, including each of the Named Executive Officers. These targets are set as a percentage of salary, which varies by salary grade level. Minimum possible payouts are set at zero, as the Compensation Committee retains the authority to reduce any award from the target to zero. Within the parameters of the program, the maximum possible payout is set at 200 percent of the target level. This applies to all participants in PSP, including the Named Executive Officers, although since the Compensation Committee has ultimate authority to grant awards, it may grant awards higher than the maximum set in the program. The maximum possible payouts set forth in the Table for Named Executive Officers are shown at 200 percent of target. The amounts shown in the Table are those set for 2008 compensation tied to the 2008 through 2010 program period under PSP (PSP VI) and do not represent actual payouts for that program year. Actual payouts of restricted stock or restricted stock units, if any, for PSP VI are not expected to be made until February 2011, after the close of the three-year performance period.
The All Other Stock Awards column reflects any off-cycle stock awards or any other stock awards outside of PSP. There were no such awards to our Named Executive Officers approved in 2008.
The All Other Option Awards column reflects option awards granted in 2008 to our Named Executive Officers. Option awards are generally granted under our Stock Option (and Stock Appreciation Rights) Program (SOP), although off-cycle option awards or other option awards outside of SOP are possible under the 2004 Omnibus Plan. In 2008, there were no option awards to Named Executive Officers other than those made under SOP. Targets for option awards under SOP are set as a percentage of salary, which varies by salary grade level. The option awards shown were granted on the same day that the target was approved. For the 2008 program year under SOP, targets were set and awards granted at the regularly scheduled February 2008 meeting of the Compensation Committee.
41
Name | Grant Date(1) |
Estimated Future Payouts Under Non-Equity Incentive Plan Awards(2) |
Estimated Future Payouts Under Equity Incentive Plan Awards(3) |
All Other |
All Other Option Awards: Number of Securities Underlying Options (#)(4) |
Exercise or Base Price of Option Awards Average Price ($Sh)(5) |
Exercise or Base Price of Option Awards Closing Price ($Sh)(6) |
Grant Date Fair Value of Stock and Option Awards(7) |
||||||||||||||||||||||||||
Threshold ($) |
Target ($) |
Maximum ($) |
Threshold (#) |
Target (#) |
Maximum (#) |
|||||||||||||||||||||||||||||
J.J. Mulva |
2/14/2008 | $ | $2,025,000 | $5,062,500 | | | | | | $ | $ | $ | ||||||||||||||||||||||
2/14/2008 | | | | | 68,716 | 137,432 | | | | | 5,454,676 | |||||||||||||||||||||||
2/14/2008 | | | | | | | | 296,400 | 79.38 | 78.96 | 5,738,304 | |||||||||||||||||||||||
J.A. Carrig |
2/14/2008 | | 969,752 | 2,424,380 | | | | | | | | | ||||||||||||||||||||||
2/14/2008 | | | | | 20,925 | 41,850 | | | | | 1,661,027 | |||||||||||||||||||||||
2/14/2008 | | | | | | | | 90,300 | 79.38 | 78.96 | 1,748,208 | |||||||||||||||||||||||
10/1/2008 | | | | | 3,234 | 6,468 | | | | | 227,657 | |||||||||||||||||||||||
10/1/2008 | | | | | 12,933 | 25,866 | | | | | 910,419 | |||||||||||||||||||||||
10/1/2008 | | | | | 16,189 | 32,378 | | | | | 1,139,625 | |||||||||||||||||||||||
J.L. Gallogly |
2/14/2008 | | 910,305 | 2,275,763 | | | | | | | | | ||||||||||||||||||||||
2/14/2008 | | | | | 21,546 | 43,092 | | | | | 1,710,321 | |||||||||||||||||||||||
2/14/2008 | | | | | | | | 93,000 | 79.38 | 78.96 | 1,800,480 | |||||||||||||||||||||||
J.E. Lowe |
2/14/2008 | | 792,846 | 1,982,115 | | | | | | | | | ||||||||||||||||||||||
2/14/2008 | | | | | 18,743 | 37,486 | | | | | 1,487,819 | |||||||||||||||||||||||
2/14/2008 | | | | | | | | 80,900 | 79.38 | 78.96 | 1,566,224 | |||||||||||||||||||||||
S.L. Cornelius |
2/14/2008 | | 497,723 | 1,244,308 | | | | | | | | | ||||||||||||||||||||||
2/14/2008 | | | | | 10,261 | 20,522 | | | | | 814,518 | |||||||||||||||||||||||
2/14/2008 | | | | | | | | 44,300 | 79.38 | 78.96 | 857,648 | |||||||||||||||||||||||
R.C. Berney |
2/14/2008 | | 289,467 | 723,668 | | | | | | | | | ||||||||||||||||||||||
2/14/2008 | | | | | 4,296 | 8,592 | | | | | 341,016 | |||||||||||||||||||||||
2/14/2008 | | | | | | | | 18,600 | 79.38 | 78.96 | 360,096 |
(1) | The grant date shown is the date on which the Compensation Committee approved the target awards under the compensation programs discussed in the narrative above and reflected in the table, except, with regard to the October 1, 2008, awards shown for Mr. Carrig. Under the terms of the Performance Share Program, an adjustment in the target and maximum awards under three ongoing performance periods automatically occurred on the effective date of his promotion, which promotion was effective October 1, 2008, and was approved in advance by the Compensation Committee. |
(2) | Threshold and maximum are based on the program provisions under VCIP. Actual awards earned can range from zero to 200 percent of the target awards for corporate and business unit performance, with a further possible adjustment of up to 50 percent of the target awards for individual performance. The Compensation Committee retains the authority to make awards under the program at its discretion, including the discretion to make awards greater than the maximum payout. |
(3) | Threshold and maximum are based on the program provisions under PSP. Actual awards earned can range from zero to 200 percent of the target awards. The Compensation Committee retains the authority to make awards under the program at its discretion, including the discretion to make awards greater than the maximum payout. Mr. Carrig was promoted effective October 1, 2008, resulting, under the terms of the Performance Share Program, in an adjustment in the target and maximum awards under three ongoing performance periods. This adjustment is shown as separate awards on that date. |
(4) | These amounts represent stock options granted during 2008. |
(5) | The exercise price is the average of the high and low prices of ConocoPhillips common stock, as reported on the NYSE, on the date of the grant (or on the last preceding date for which there was a reported sale, in the absence of any reported sales on the grant date); therefore, on the grant date, the option has no immediately realizable value and any potential payout reflects an increase in share price after the grant date. The Companys stockholder-approved 2004 Omnibus Stock and Performance Incentive Plan provides for the use of such an average price in setting the exercise price on options, unless the Compensation Committee directs otherwise. |
(6) | The closing price is the closing price of ConocoPhillips common stock, as reported on the NYSE, on the date of the grant. |
(7) | For equity incentive plan awards, these amounts represent the grant date fair value at target level under PSP as determined pursuant to FAS 123(R). For option awards, these amounts represent the grant date fair value of the option awards using a Black-Scholes-Merton-based methodology to value the options in accordance with FAS 123(R). Actual value realized upon option exercise depends on market prices at the time of exercise. For other stock awards, these amounts represent the grant date fair value of the restricted stock or restricted stock unit awards determined pursuant to FAS 123(R). See the Share-Based Compensation Plans section of Note 20 in the Companys 2008 Annual Report on Form 10-K, for a discussion of the relevant assumptions used in this determination. Under the terms of the Performance Share Program, Mr. Carrig received incremental targeted awards on the three ongoing performance periods due to a change in salary grade. |
42
OUTSTANDING EQUITY AWARDS AT FISCAL YEAR END
Option Awards(1) | Stock Awards(7) | |||||||||||||||||||||||||||||
Name | Number
of (#) Exercisable(2) |
Number
of (#) Unexercisable |
Equity (#) |
Option Exercise Price ($) |
Option Expiration Date |
Number of Shares or Units of Stock That Have Not Vested (#) |
Market ($) |
Equity (#) |
Equity ($) |
|||||||||||||||||||||
J.J. Mulva |
136,204 | | | $ | 26.330 | 7/26/2009 | | $ | | | $ | | ||||||||||||||||||
3,796 | | | 26.330 | 7/26/2009 | | | | | ||||||||||||||||||||||
233,600 | | | 23.440 | 10/11/2009 | | | | | ||||||||||||||||||||||
335,600 | | | 31.140 | 10/9/2010 | | | | | ||||||||||||||||||||||
478,000 | | | 27.385 | 10/8/2011 | | | | | ||||||||||||||||||||||
1,500,000 | | | 25.655 | 11/17/2011 | | | | | ||||||||||||||||||||||
1,500,000 | | | 32.065 | 11/17/2011 | | | | | ||||||||||||||||||||||
12,738 | | | 23.550 | 10/22/2012 | | | | | ||||||||||||||||||||||
413,062 | | | 23.550 | 10/22/2012 | | | | | ||||||||||||||||||||||
606,000 | | | 24.370 | 2/10/2013 | | | | | ||||||||||||||||||||||
745,200 | | | 32.810 | 2/8/2014 | | | | | ||||||||||||||||||||||
392,800 | | | 47.830 | 2/4/2015 | | | | | ||||||||||||||||||||||
179,200 | 89,600 | (3) | | 59.075 | 2/10/2016 | | | | | |||||||||||||||||||||
92,166 | 184,334 | (4) | | 66.370 | 2/8/2017 | | | | | |||||||||||||||||||||
| 296,400 | (5) | | 79.380 | 2/14/2018 | | | | | |||||||||||||||||||||
| 2,761,655 | 143,053,729 | 141,443 | 7,326,747 | ||||||||||||||||||||||||||
J.A. Carrig |
10,200 | | | 27.385 | 10/8/2011 | | | | | |||||||||||||||||||||
49,662 | | | 23.550 | 10/22/2012 | | | | | ||||||||||||||||||||||
122,200 | | | 24.370 | 2/10/2013 | | | | | ||||||||||||||||||||||
126,200 | | | 32.810 | 2/8/2014 | | | | | ||||||||||||||||||||||
104,600 | | | 47.830 | 2/4/2015 | | | | | ||||||||||||||||||||||
52,332 | 26,168 | (3) | | 59.075 | 2/10/2016 | | | | | |||||||||||||||||||||
26,933 | 53,867 | (4) | | 66.370 | 2/8/2017 | | | | | |||||||||||||||||||||
| 90,300 | (5) | | 79.380 | 2/14/2018 | | | | | |||||||||||||||||||||
422,144 | 21,867,059 | 71,289 | 3,692,770 | |||||||||||||||||||||||||||
J.L. Gallogly |
700 | | | 26.565 | 9/13/2009 | | | | | |||||||||||||||||||||
2,100 | | | 26.565 | 9/13/2009 | | | | | ||||||||||||||||||||||
3,472 | | | 23.440 | 10/11/2009 | | | | | ||||||||||||||||||||||
1,800 | | | 31.470 | 9/26/2010 | | | | | ||||||||||||||||||||||
42,132 | 21,068 | (6) | | 64.770 | 4/4/2016 | | | | | |||||||||||||||||||||
31,666 | 63,334 | (4) | | 66.370 | 2/8/2017 | | | | | |||||||||||||||||||||
| 93,000 | (5) | | 79.380 | 2/14/2018 | | | | | |||||||||||||||||||||
85,183 | 4,412,479 | 46,516 | 2,409,529 | |||||||||||||||||||||||||||
J.E. Lowe |
70,200 | | | 47.830 | 2/4/2015 | | | | | |||||||||||||||||||||
33,932 | 16,968 | (3) | | 59.075 | 2/10/2016 | | | | | |||||||||||||||||||||
18,200 | 36,400 | (4) | | 66.370 | 2/8/2017 | | | | | |||||||||||||||||||||
| 80,900 | (5) | | 79.380 | 2/14/2018 | | | | | |||||||||||||||||||||
287,443 | 14,889,547 | 39,862 | 2,064,852 |
43
OUTSTANDING EQUITY AWARDS AT FISCAL YEAR END
(Continued)
Option Awards(1) | Stock Awards(7) | |||||||||||||||||||||||||||||
Name | Number
of (#) Exercisable(2) |
Number
of (#) Unexercisable |
Equity (#) |
Option ($) |
Option Expiration Date |
Number of Shares or Units of Stock That Have Not Vested (#) |
Market ($) |
Equity (#) |
Equity ($) |
|||||||||||||||||||||
S.L. Cornelius |
45,000 | | | $ | 32.810 | 2/8/2014 | | $ | | | $ | | ||||||||||||||||||
47,600 | | | 47.830 | 2/4/2015 | | | | | ||||||||||||||||||||||
21,666 | 10,834 | (3) | | 59.075 | 2/10/2016 | | | | | |||||||||||||||||||||
11,933 | 23,867 | (4) | | 66.370 | 2/8/2017 | | | | | |||||||||||||||||||||
| 44,300 | (5) | | 79.380 | 2/14/2018 | | | | | |||||||||||||||||||||
113,133 | 5,860,289 | 22,165 | 1,148,147 | |||||||||||||||||||||||||||
R.C. Berney |
29,400 | | | 24.370 | 2/10/2013 | | | | | |||||||||||||||||||||
33,600 | | | 32.810 | 2/8/2014 | | | | | ||||||||||||||||||||||
25,400 | | | 47.830 | 2/4/2015 | | | | | ||||||||||||||||||||||
11,600 | 5,800 | (3) | | 59.075 | 2/10/2016 | | | | | |||||||||||||||||||||
6,333 | 12,667 | (4) | | 66.370 | 2/8/2017 | | | | | |||||||||||||||||||||
| 18,600 | (5) | | 79.380 | 2/14/2018 | | | | | |||||||||||||||||||||
110,632 | 5,730,738 | 9,279 | 480,652 |
(1) | All options shown in the table have a maximum term for exercise of ten years from the grant date. Under certain circumstances, the terms for exercise may be shorter, and in certain circumstances, the options may be forfeited and cancelled. All awards shown in the table have associated restrictions upon transferability. |
(2) | The options shown in this column vested and became exercisable in 2008 or prior years (although under certain termination circumstances, the options may still be forfeited). Following the merger of Conoco and Phillips, options become exercisable in one-third increments on the first, second, and third anniversaries of the grant date. |
(3) | Represents the final one-third vesting of the February 10, 2006 grant, which became exercisable on February 10, 2009. |
(4) | Represents the final two-thirds vesting of the February 8, 2007 grant, half of which became exercisable on February 8, 2009, and the other half will become exercisable on February 8, 2010. |
(5) | Represents the February 14, 2008 grant, one-third of which became exercisable on February 14, 2009, one-third of which will become exercisable on February 14, 2010, and the final third will become exercisable on February 14, 2011. |
(6) | Represents the final one-third of a stock option award granted upon employment which will become exercisable on April 4, 2009. |
(7) | No stock awards were made to the Named Executive Officers in 2008 except as a long-term incentive award under the Companys Performance Share Program (shown in the columns labeled Stock Awards) or pursuant to elections made by a Named Executive Officer to receive cash compensation in the form of restricted stock units. Amounts above include PSP awards for the three-year performance period ending December 31, 2008 (PSP IV), as follows: Mr. Mulva, 100,041 shares; Mr. Carrig, 37,694 shares; Mr. Gallogly, 36,209 shares; Mr. Lowe, 27,868 shares; Mr. Cornelius, 15,872 shares; and Mr. Berney, 7,104 shares. Stock awards shown in the columns entitled Number of Shares or Units of Stock That Have Not Vested (#) and Market Value of Shares or Units of Stock That Have Not Vested ($) continue to have restrictions upon transferability. Under PSP, stock awards are made in the form of restricted stock units or restricted stock, the former having been used in the most recent awards. The terms and conditions of both are substantially the same, requiring restriction on transferability until separation from service from the Company. Forfeiture is expected to occur if the separation is not the result of death, disability, layoff, retirement after the executive has reached the age of 55 with five years of service, or after a change of control, although the Compensation Committee has the authority to waive forfeiture. Restricted stock awards have voting rights and pay dividends. Restricted stock unit awards have no voting rights and pay dividend equivalents. Dividend equivalents, if any, on restricted stock units held are paid in cash or credited to each officers account in the form of additional stock units. Neither pays dividends or dividend equivalents at preferential rates. Restricted stock held by the Named Executive Officers prior to November 17, 2001 was converted to restricted stock units prior to the completion of the merger, with the original restrictions still in place. In addition to stock awards actually granted, the Table reflects potential stock awards to Named Executive Officers under ongoing performance periods for PSP, for the performance periods from 2007 through 2009 and 2008 through 2010. These are shown at target levels in the columns entitled Equity Incentive Plan Awards: Number of Unearned Shares, Units or Other Rights That Have Not Vested (#) and Equity Incentive Plan Awards: Market or Payout Value of Unearned Shares, Units or Other Rights That Have Not Vested ($). There is no assurance that these awards will be granted at, below, or above target after the end of the relevant performance periods, as the determination of whether |
44
to make an actual grant and the amount of any actual grant for Named Executive Officers is within the discretion of the Compensation Committee. Until an actual grant is made, these target awards have no voting rights and pay no dividends or dividend equivalents. Stock awards shown reflect closing price at the end of 2008 ($51.80 as of December 31, 2008). |
Amounts presented in Number of Shares or Units of Stock That Have Not Vested (#) and Market Value of Shares or Units of Stock That Have Not Vested ($) represent restricted stock and restricted stock unit awards granted with respect to prior periods. The plans and programs under which such grants were made provide that awards made in the form of restricted stock and restricted stock units be held in such form until the recipient retires. If such awards immediately vested upon completion of the relevant performance period, as we are informed by our compensation consultant is more typical for restricted stock programs, the amounts reflected in this column would be zero.
OPTION EXERCISES AND STOCK VESTED
Option Awards | Stock Awards | ||||||||||||||
Name | Number of Shares Acquired on Exercise (#) |
Value Upon Exercise ($) |
Number of Shares Acquired on Vesting (#) |
Value Vesting ($) | |||||||||||
J.J. Mulva |
149,000 | $ | 7,003,380 | | $ | ||||||||||
J.A. Carrig |
102,800 | 6,468,604 | | | |||||||||||
J.L. Gallogly |
| | | | |||||||||||
J.E. Lowe |
97,800 | 5,025,952 | | | |||||||||||
S.L. Cornelius |
| | | | |||||||||||
R.C. Berney |
71,800 | 4,475,249 | | |
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ConocoPhillips maintains several defined benefit plans for its eligible employees. With regard to U.S.-based salaried employees, the primary defined benefit plan that is qualified under the Internal Revenue Code is the ConocoPhillips Retirement Plan (CPRP).
The CPRP is a non-contributory plan that is funded through a trust. The CPRP consists of six titles, each one corresponding to a different pension formula and having numerous other differences in terms and conditions. Employees are eligible for current participation in only one title, and eligibility is based on heritage company and time of hire. Of the Named Executive Officers, Messrs. Mulva, Carrig, Gallogly, Berney, and Lowe, (having been employees of Phillips) are eligible for, and vested in, benefits under Title I of the CPRP, while Mr. Cornelius (having been an employee of Conoco) is eligible for, and vested in, benefits under Title IV. Both Titles I and IV provide a final average earnings type of pension benefit for eligible employees payable at normal or early retirement from the Company. Under both Titles I and IV, normal retirement occurs upon termination on or after age 65. Under Title I, early retirement can occur at age 55 with five years of service (or if laid off after age 50 with five years of service), while under Title IV, early retirement can occur at age 50 with 10 years of service. Under Title I, early retirement benefits are reduced by five percent per year for each year before age 60 that benefits are paid, but for benefits that commence at age 60 through age 65, the benefit is unreduced. Under Title IV, early retirement benefits are reduced by five percent per year for each year before age 57 and four percent per year between ages 57 and 60. Messrs. Mulva, Carrig, Gallogly, and Cornelius were eligible for early retirement at the end of 2008. Messrs. Berney and Lowe were not eligible for early retirement at the end of 2008. Employees become vested in the benefits after five years of service, and all of the Named Executive Officers are vested in their benefits. Titles I and IV allow the employee to elect the form of benefit payment from among several annuity types and a single sum payment option, but all of the options are actuarially equivalent. The election for form of benefit is made at retirement.
For both Title I and Title IV, the benefit formula applicable to our eligible Named Executive Officers is the same. Retirement benefits are calculated as the product of 1.6 percent times years of credited service multiplied by the final annual average eligible compensation. For Title I, final annual eligible average compensation is calculated using the three highest consecutive years in the last ten years before retirement. For Title IV, final annual eligible average compensation is calculated using the higher of the highest consecutive 36 months of compensation or the highest non-consecutive three years of compensation. In both cases, such benefits are reduced by the product of 1.5 percent of the annual primary Social Security benefit multiplied by years of credited service. The formula below provides an illustration as to how the retirement benefits are calculated. For purposes of the formula, pension compensation denotes the final annual eligible average compensation described above.
[ | 1.6% | × | Pension Compensation |
× | Years of Credited Service |
] |
|
[ | 1.5% | × | Annual Primary SS Benefit |
× | Years of Credited Service |
] |
Eligible pension compensation generally includes salary and bonus (shown in the Summary Compensation Table under the column titled Non-Equity Incentive Plan Compensation), and years of credited service generally include only actual years of service. However, under Title I, in the event that an eligible employee receives layoff benefits from the Company, eligible pension compensation includes the annualized salary for the year of layoff, rather than actual salary, and years of credited service are increased by any period for which layoff benefits are calculated. Furthermore, certain foreign service as an employee of Phillips is counted as time and a quarter when determining the service element in the benefit formula under Title I.
Eligible pension compensation under Titles I and IV is limited in accordance with the Internal Revenue Code. In 2008, that limit was $230,000. The Internal Revenue Code also limits the annual benefit (expressed as an annuity) available under Titles I and IV. In 2008, that limit was $185,000 (reduced actuarially for ages below 62).
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In addition, the Company maintains several nonqualified pension plans. These are funded through the general assets of the Company, although the Company also maintains trusts of the type generally known as rabbi trusts that may be used to pay benefits under the nonqualified pension plans. The plan available to the Named Executive Officers is the ConocoPhillips Key Employee Supplemental Retirement Plan (KESRP). This plan is designed to replace benefits that would otherwise not be received due to limitations contained in the Internal Revenue Code that apply to qualified plans. The two such limitations that most frequently impact the benefits to employees are the limit on compensation that can be taken into account in determining benefit accruals and the maximum annual pension benefit. In 2008, the former limit was set at $230,000, while the latter was set at $185,000. The KESRP determines a benefit without regard to such limits, and then reduces that benefit by the amount of benefit payable from the related qualified plan, the CPRP. Thus, in operation the combined benefits payable from the related plans for the eligible employee equals the benefit that would have been paid if there had been no limitations imposed by the Internal Revenue Code. Benefits under KESRP are generally paid in a single sum the later of age 55 or six months after retirement. When payments do not begin until after retirement, interest at then current six-month T-bill rates will, under most circumstances, be credited on the delayed benefits. Distribution may also be made upon a determination of disability.
Certain foreign service as an employee of Phillips is counted as time and a quarter when determining the service element in the benefit formula under KESRP. Also under KESRP, certain incentive payments approved by the Phillips Board of Directors in 2000, are considered as pension compensation. Otherwise, the benefit formulas under KESRP take into account only actual service with the employer and compensation arising from salary and bonuses (including bonuses that are performance-based and are included in the Summary Compensation Table as Non-Equity Incentive Plan Compensation for that reason). The footnotes below provide further detail on extra credited service and compensation.
Except where otherwise noted, assumptions used in calculating the present value of accumulated benefits in the Table are found in Note 20 in the Notes to Consolidated Financial Statements in the Companys 2008 Annual Report on Form 10-K.
47
Name | Plan Name | Number of (#)(1) |
Present Value of Accumulated Benefit ($)(2) |
Payments During Last Fiscal Year ($) | |||||||
J.J. Mulva |
Title I - ConocoPhillips Retirement Plan
|
37 | $ | 1,844,536 | $ | ||||||
ConocoPhillips Key Employee Supplemental Retirement Plan |
68,241,447 | | |||||||||
J.A. Carrig |
Title I - ConocoPhillips Retirement Plan
|
31 | 1,181,418 | | |||||||
ConocoPhillips Key Employee Supplemental Retirement Plan |
16,281,951 | | |||||||||
J.L. Gallogly |
Title I - ConocoPhillips Retirement Plan
|
25 | 880,277 | | |||||||
ConocoPhillips Key Employee Supplemental Retirement Plan |
4,735,252 | | |||||||||
J.E. Lowe |
Title I - ConocoPhillips Retirement Plan
|
28 | 653,652 | | |||||||
ConocoPhillips Key Employee Supplemental Retirement Plan |
7,840,155 | | |||||||||
S.L. Cornelius |
Title IV - ConocoPhillips Retirement Plan
|
28 | 814,805 | | |||||||
ConocoPhillips Key Employee Supplemental Retirement Plan |
3,798,444 | | |||||||||
R.C. Berney |
Title I - ConocoPhillips Retirement Plan
|
28 | 816,844 | | |||||||
ConocoPhillips Key Employee Supplemental Retirement Plan |
2,579,725 | |
(1) | Includes additional credited service for Messrs. Mulva, Carrig, Gallogly, and Lowe of 18.25, 7.5, 8.75, and 5.25 months, respectively, related to foreign assignments. Please see Note (2) for credited amounts related to such service. |
(2) | In determining the present value of the accumulated benefit for each Named Executive Officer, the eligible pension compensation used to calculate the amounts above as of December 31, 2008, for each Named Executive Officer is: Mr. Mulva, $23,308,579; Mr. Carrig, $9,106,019; Mr. Gallogly, $4,817,074; Mr. Lowe, $7,976,964; Mr. Cornelius, $1,118,831; and Mr. Berney, $2,610,430. In determining the present value of the accumulated benefit for Messrs. Mulva, Carrig, and Lowe, this takes into account as an element of pension compensation the value of an off-cycle award of restricted stock and of an off-cycle performance incentive award both approved by the Phillips Compensation Committee in 2000, but with regard to which the performance conditions were met in 2005. The value of the two off-cycle awards included as part of pension compensation for 2005 was $6,278,301 for Mr. Mulva and $3,139,151 for Messrs. Carrig and Lowe. With regard to the additional credited service for foreign service as noted above, the following amounts were included in the accumulated benefit shown in the pension table above: Mr. Mulva, $2,874,057; Mr. Carrig, $350,309; Mr. Gallogly, $208,682; and Mr. Lowe, $133,837. |
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NONQUALIFIED DEFERRED COMPENSATION
ConocoPhillips maintains several nonqualified deferred compensation plans for its eligible employees. Those available to the Named Executive Officers are briefly described below.
The Key Employee Deferred Compensation Plan of ConocoPhillips (KEDCP) is a nonqualified deferral plan that permits certain key employees to voluntarily reduce salary and request deferral of VCIP, or other similar bonus program payments, that would otherwise be received in the subsequent year. KEDCP permits eligible employees to defer compensation of up 100 percent of VCIP and up to 50 percent of salary. All of the Named Executive Officers are eligible to participate in KEDCP.
Under KEDCP, for amounts deferred and vested after December 31, 2004, the default distribution option in KEDCP is to receive a lump sum to be paid at least six months after separation from service. Participants may elect to defer payments from one to five years after separation, and to receive annual, semi-annual or quarterly payments for a period of up to 15 years. For elections that set a date certain for payment, the distribution will begin in the calendar quarter following the date requested and will be paid out on the distribution schedule elected by the participant.
For amounts deferred prior to January 1, 2005, a one-time revision of the 10 annual installment payments schedule is allowed from 365 days to no later than 90 days prior to retirement at age 55 or above or within 30 days after being notified of layoff in the calendar year in which the employee is age 50 or above. Participants may receive distributions in one to 15 annual installments, two to 30 semi-annual installments or four to 60 quarterly installments.
The Defined Contribution Make-Up Plan of ConocoPhillips (DCMP) is a nonqualified restoration plan under which the Company makes employer contributions and stock allocations that cannot be made in the qualified ConocoPhillips Savings Plan (CPSP) a defined contribution plan of the type often referred to as a 401(k) plan due to certain voluntary reductions of salary under KEDCP or due to limitations imposed by the Internal Revenue Code. For 2008, the Internal Revenue Code limited the amount of compensation that could be taken into account in determining a benefit under the CPSP to $230,000. Employees make no contributions to DCMP.
Under DCMP, amounts vested after December 31, 2004, will be distributed as a lump sum six months after separation from service, or, at a participants election, in one to 15 annual payments, no earlier than one year after separation from service. For amounts vested prior to January 1, 2005, participants may, from 365 days to no later than 90 days prior to termination or within 30 days of being notified of layoff, indicate a preference to defer the value into their account under the KEDCP.
Each participant directs investments of the individual accounts set up for that participant under both KEDCP and DCMP. Participants may make changes in the investments as often as daily. All ConocoPhillips defined contribution nonqualified deferred compensation plans allow investment of deferred amounts in a broad range of mutual funds or other market-based investments, including ConocoPhillips stock. As market-based investments, none of these provide above-market return. Since each executive participating in each plan chooses the investment vehicle or vehicles and may change his or her allocations from time to time (as often as daily), the return on the investment will depend on how well the underlying investment fund performed during the time the executive chose it as an investment vehicle. The aggregate performance of such investment is reflected in the Nonqualified Deferred Compensation Table under the column Aggregate Earnings in Last Fiscal Year.
Benefits due under each of the plans discussed above are paid from the general assets of the Company, although the Company also maintains trusts of the type generally known as rabbi trusts that may be used to pay benefits under the plans. The trusts and the funds held in them are assets of ConocoPhillips. In the event of bankruptcy, participants would be unsecured general creditors.
49
Name | Applicable Plan(1) | Beginning Balance |
Executive Contributions in Last FY ($)(2) |
Registrant Contributions in Last FY ($)(3) |
Aggregate in Last FY |
Aggregate Withdrawals/ Distributions ($) |
Aggregate Balance at Last FYE ($)(5) | ||||||||||||||||||
J.J. Mulva |
Defined Contribution Make-Up Plan of ConocoPhillips |
$ | 4,139,283 | $ | $ 221,878 | $ (1,730,699) | $ | $2,630,462 | |||||||||||||||||
Key Employee |
41,471,741 | | | (15,786,633) | | 25,685,108 | |||||||||||||||||||
J.A. Carrig |
Defined Contribution Make-Up Plan of ConocoPhillips |
784,447 | | 112,829 | (355,119) | | 542,157 | ||||||||||||||||||
Key Employee |
8,843,923 | 738,245 | | (3,090,529) | | 6,491,639 | |||||||||||||||||||
J.L. Gallogly |
Defined Contribution Make-Up Plan of ConocoPhillips |
524,184 | | 115,046 | (246,855) | | 392,375 | ||||||||||||||||||
Key Employee |
2,136,715 | | | 59,259 | | 2,195,974 | |||||||||||||||||||
J.E. Lowe |
Defined Contribution Make-Up Plan of ConocoPhillips |
375,410 | | 92,610 | (2,839) | | 465,181 | ||||||||||||||||||
Key Employee |
1,072,587 | | | 48,799 | | 1,121,386 | |||||||||||||||||||
S.L. Cornelius |
Defined Contribution Make-Up Plan of ConocoPhillips |
201,473 | | 56,207 | (108,352) | | 149,328 | ||||||||||||||||||
Key Employee |
54,586 | | | (20,179) | | 34,407 | |||||||||||||||||||
R.C. Berney |
Defined Contribution Make-Up Plan of ConocoPhillips |
256,204 | | 33,528 | (112,022) | | 177,710 | ||||||||||||||||||
Key Employee |
962,070 | | | (286,622) | | 675,448 |
(1) | Our primary defined contribution deferred compensation programs for executives (KEDCP and DCMP) make a variety of investments available to participants. As of December 31, 2008, there were a total of 96 investment options, of which 44 were the same as those available in the Companys primary tax-qualified defined contribution plan for employees (its 401(k) plan, the ConocoPhillips Savings Plan) and 52 of which were other various mutual fund options approved by an administrator designated by the relevant plan. |
(2) | Reflects $145,100 in salary deferred in 2008 (included in the Salary column of the Summary Compensation Table for 2008), $593,145 in VCIP deferral in 2008 (included in the Non-Equity Incentive Plan Compensation column of the Summary Compensation Table for 2007). |
(3) | Reflects contributions by the Company under the DCMP in 2008 (included in the All Other Compensation column of the Summary Compensation Table). |
50
(4) | None of these earnings are included in the Summary Compensation Table for 2008. |
(5) | Reflects contributions by our Named Executive Officers, contributions by the Company, and earnings on balances prior to 2008; plus contributions by our Named Executive Officers, contributions by the Company, and earnings for 2008 (shown in the appropriate columns of this table, with amounts that are included in the Summary Compensation Table for 2008 shown in Footnotes (2), (3) and (4) above). |
Executive Severance and Changes in Control
Each of our Named Executive Officers serves without an employment agreement, although, as described more fully below, in connection with his transition to part-time employment, Mr. Lowe and the Company executed a letter dated October 1, 2008, setting forth their mutual understanding regarding his transition to a temporary, part-time role with the Company. Salary and other compensation for these officers is set by the Compensation Committee, as described in the Compensation Discussion and Analysis beginning on page 16 of this proxy statement. These officers may participate in the employee benefit plans and programs of the Company for which they are eligible, in accordance with their terms. The amounts earned by the Named Executive Officers for 2008 appear in the various Executive Compensation Tables beginning on page 35 of this proxy statement.
Each of our Named Executive Officers is expected to receive amounts earned during his term of employment unless he voluntarily resigns prior to becoming retirement-eligible or is terminated for cause. Such amounts include:
| VCIP earned during the fiscal year; |
| Grants pursuant to the PSP for the most-recently completed performance period and ongoing performance periods in which the executive participated for at least one year; |
| Previously granted restricted stock and restricted stock units; |
| Vested stock option grants under the Stock Option Program; |
| Amounts contributed and vested under our defined contribution plans; and |
| Amounts accrued and vested under our pension plans. |
While normal retirement age under our benefit plans is 65, early retirement provisions allow benefits at earlier ages if vesting requirements are met, as discussed in the sections of this proxy statement entitled Pension Benefits and Nonqualified Deferred Compensation. For our compensation programs (VCIP, SOP, and PSP), early retirement is generally defined to be termination at or after the age of 55 with five years of service.
Messrs. Mulva, Carrig and Gallogly have each met the early retirement criteria under both our benefit plans and our compensation programs. Mr. Cornelius has met the early retirement criteria under the title of the pension plan for which he is eligible, but has not met the early retirement criteria for our compensation programs. Therefore, as of December 31, 2008, any voluntary resignations of Messrs. Mulva, Carrig and Gallogly would have been treated as retirements. Since Messrs. Mulva, Carrig and Gallogly are eligible for early retirement under these programs, they would be able to resign and retain all awards earned under the PSP and earlier programs. As a result, Messrs. Mulva, Carrig and Galloglys awards under such programs are not included in the incremental amounts reflected in the tables below. Furthermore, any voluntary resignation of Mr. Cornelius as of December 31, 2008, would have been treated as a retirement for purposes of his pension benefits, but not under our compensation programs, and this is reflected in the tables below. Messrs. Lowe and Berney have not yet met either the criteria under our benefit plans or our compensation programs as of December 31, 2008.
51
As part of his transition to new duties, Mr. Lowe and the Company executed a letter dated October 1, 2008, describing their mutual understanding. Under the letter, Mr. Lowe continues as an at-will employee, although as a part-time and temporary employee. He agrees during his employment and for two years after his separation from service not to compete with the Company or its affiliates, or solicit the employees or agents of the Company or divulge, at any time, the confidential information of the Company, without the written approval of the CEO. Mr. Lowe remains eligible for further awards under the PSP only through performance periods ending before 2009. Terms and conditions of existing awards continue in effect and were not altered by the letter, except that in the event of a termination without cause by the Company, restricted stock and restricted stock unit awards already granted would vest, their restrictions would lapse, and unrestricted stock would be distributed in accordance with their term and conditions and Mr. Lowes prior elections. Pursuant to the letter, effective January 1, 2009, Mr. Lowe was no longer eligible for the Executive Severance Plan, the Change in Control Severance Plan, the Deferred Compensation Plan, Executive Financial Planning, the Matching Gift Program, the Tuition Reimbursement Program, vacation pay, or executive level services under the Comprehensive Security Program. Benefits accrued under the Key Employee Supplemental Retirement Plan will be discontinued at the earlier of Mr. Lowes termination or October 12, 2012.
In addition, specific severance arrangements for executive officers, including the Named Executive Officers, are provided under two severance plans of ConocoPhillips, one being the ConocoPhillips Executive Severance Plan, available to a limited number of senior executives; and the other being the ConocoPhillips Key Employee Change in Control Severance Plan, also available to a limited number of senior executives, but only upon a change in control. These arrangements are described below. Executives are not entitled to participate in both plans as a result of a single event, that is, executives receiving benefits under the ConocoPhillips Key Employee Change in Control Severance Plan would not be entitled to benefits potentially payable under the ConocoPhillips Executive Severance Plan relating to the event giving rise to benefits under the ConocoPhillips Key Employee Change in Control Severance Plan.
ConocoPhillips Executive Severance Plan
The ConocoPhillips Executive Severance Plan (CPESP) covers executives in salary grades generally corresponding to vice president and higher. The CPESP provides that if the Company terminates the employment of a participant in the plan other than for cause, as defined in the plan, upon executing a general release of liability and, if requested by the Company, an agreement not to compete with the Company, the participant will be entitled to:
| A lump-sum cash payment equal to one-and-a-half or two times the sum of the employees base salary and current target VCIP; |
| A lump-sum cash payment equal to the present value of the increase in retirement benefits that would result from the crediting of an additional one-and-a-half or two years to the employees number of years of age and service under the applicable retirement plan; |
| A lump-sum cash payment equal to the Company cost of certain welfare benefits for an additional one-and-a-half or two years; |
| Continuation in eligibility for a pro rata portion of the annual VCIP for which the employee is eligible in the year of termination; and |
| Treatment as a layoff under the various compensation and equity programs of the Company generally, layoff treatment will allow executives to retain awards previously made and continue their eligibility under ongoing Company programs, thus, actual program grants as restricted stock or restricted stock units would vest and the executive would remain eligible for awards attributable to ongoing performance periods under the PSP in which they had participated for at least one year. |
52
The CPESP may be amended or terminated by the Company at any time. Amounts payable under the plan will be offset by any payments or benefits that are payable to the severed employee under any other plan, policy, or program of ConocoPhillips relating to severance, and amounts may also be reduced in the event of willful and bad faith conduct demonstrably injurious to the Company, monetarily or otherwise.
ConocoPhillips Key Employee Change in Control Severance Plan
The ConocoPhillips Key Employee Change in Control Severance Plan (CICSP) covers executives in salary grades generally corresponding to vice president and higher. The CICSP provides that if the employment of a participant in the plan is terminated by the Company within two years of a change in control of ConocoPhillips, other than for cause, or by the participant for good reason, as such terms are defined in the plan, upon executing a general release of liability, the participant will be entitled to:
| A lump-sum cash payment equal to two or three times the sum of the employees base salary and the higher of current target VCIP or previous two years average VCIP; |
| A lump-sum cash payment equal to the present value of the increase in retirement benefits that would result from the crediting of an additional two or three years to the employees number of years of age and service under the applicable retirement plan; |
| A lump-sum cash payment equal to the Company cost of certain welfare benefits for an additional two or three years; |
| Continuation in eligibility for a pro rata portion of the annual VCIP for which the employee is eligible in the year of termination; and |
| If necessary, a gross-up payment sufficient to compensate the participant for the amount of any excise tax imposed on payments made under the plan or otherwise pursuant to section 4999 of the Internal Revenue Code and for any taxes imposed on this additional payment, although if the applicable payments are not more than 110 percent of the safe harbor amount under section 280G of the Internal Revenue Code, the payments are cut back to the safe harbor amount rather than a gross-up payment being made. |
Upon a change in control, the participant becomes eligible for vesting in all equity awards and lapsing of any restrictions, with continued ability to exercise stock options for their remaining terms. After a change in control, the CICSP may not be amended or terminated if such amendment would be adverse to the interests of any eligible employee, without the employees written consent. Amounts payable under the plan will be offset by any payments or benefits that are payable to the severed employee under any other plan, policy, or program of ConocoPhillips relating to severance, and amounts may also be reduced in the event of willful and bad faith conduct demonstrably injurious to the Company, monetarily or otherwise.
Quantification of Severance Payments
The tables below reflect the amount of incremental compensation payable in excess of the items listed above to each of our Named Executive Officers in the event of termination of such executives employment other than as a result of voluntary resignation. The amount of compensation payable to each Named Executive Officer upon involuntary not-for-cause termination, for-cause termination, termination following a change-in-control (CIC) (either involuntarily without cause or for good reason) and in the event of the death or disability of the executive is shown below. The amounts shown assume that such termination was effective as of December 31, 2008, and thus include amounts earned through such time and are estimates of the amounts which would be paid out to the executives upon their termination. The actual amounts to be paid out can only be determined at the time of such executives separation from the Company.
53
The following tables reflect additional incremental amounts to which each of our Named Executive Officers, other than Mr. Lowe, would be entitled if their employment were terminated due to the events described above.
Executive Benefits and Payments Upon Termination | Involuntary Not-for-Cause Termination (Not CIC) |
For-Cause Termination |
Involuntary or Good Reason Termination (CIC) |
Death | Disability | ||||||||
J.J. Mulva |
|||||||||||||
Base Salary |
$ | 3,000,000 | $ | $ | 4,500,000 | $ | $ | ||||||
Short-term Incentive |
4,050,000 | | 10,239,413 | | | ||||||||
Variable Cash Incentive Program |
| (2,025,000 | ) | | | | |||||||
2006 2008 (performance period) |
| | | | | ||||||||
2007 2009 (performance period) |
| (2,511,506 | ) | | | | |||||||
2008 2010 (performance period) |
| (1,186,496 | ) | | | | |||||||
Restricted Stock/Units from prior performance |
| (1,958,040 | ) | | | | |||||||
Stock Options/SARs: |
|||||||||||||
Unvested and Accelerated |
| | | | | ||||||||
Incremental Pension |
3,820,421 | | 5,733,342 | | | ||||||||
Post-employment Health & Welfare |
42,651 | | 67,002 | | | ||||||||
Life Insurance |
| | | 3,000,000 | | ||||||||
280G Tax Gross-up |
| | 6,934,493 | | | ||||||||
10,913,072 | (7,681,042 | ) | 27,474,250 | 3,000,000 | | ||||||||
Executive Benefits and Payments Upon Termination | Involuntary Not-for-Cause Termination (Not CIC) |
For-Cause Termination |
Involuntary or Good Reason Termination (CIC) |
Death | Disability | ||||||||
J.A. Carrig |
|||||||||||||
Base Salary |
$ | 2,290,000 | $ | $ | 3,435,000 | $ | $ | ||||||
Short-term Incentive |
2,519,000 | | 3,778,500 | | | ||||||||
Variable Cash Incentive Program |
| (1,259,500) | | | | ||||||||
2006 2008 (performance period) |
| | | | | ||||||||
2007 2009 (performance period) |
| (1,180,177) | | | | ||||||||
2008 2010 (performance period) |
| (640,835) | | | | ||||||||
Restricted Stock/Units from prior performance |
| (2,094,274) | | | | ||||||||
Stock Options/SARs: |
|||||||||||||
Unvested and Accelerated |
| | | | | ||||||||
Incremental Pension |
4,328,826 | | 6,622,140 | | | ||||||||
Post-employment Health & Welfare |
21,664 | | 35,327 | | | ||||||||
Life Insurance |
| | | 2,290,000 | | ||||||||
280G Tax Gross-up |
| | 5,517,591 | | | ||||||||
9,159,490 | (5,174,786 | ) | 19,388,558 | 2,290,000 | | ||||||||
Executive Benefits and Payments Upon Termination | Involuntary Not-for-Cause Termination (Not CIC) |
For-Cause Termination |
Involuntary or Good Reason Termination (CIC) |
Death | Disability | ||||||||
J.L. Gallogly |
|||||||||||||
Base Salary |
$ | 2,035,000 | $ | $ | 3,052,500 | $ | $ | ||||||
Short-term Incentive |
1,973,950 | | 3,179,603 | | | ||||||||
Variable Cash Incentive Program |
| (986,975) | | | | ||||||||
2006 2008 (performance period) |
| | | | | ||||||||
2007 2009 (performance period) |
| (862,297) | | | | ||||||||
2008 2010 (performance period) |
| (372,028) | | | | ||||||||
Restricted Stock/Units from prior performance |
| | | | | ||||||||
Stock Options/SARs: |
|||||||||||||
Unvested and Accelerated |
| | | | | ||||||||
Incremental Pension |
1,752,036 | | 2,696,743 | | | ||||||||
Post-employment Health & Welfare |
20,563 | | 34,055 | | | ||||||||
Life Insurance |
| | | 2,035,000 | | ||||||||
280G Tax Gross-up |
| | 3,194,444 | | | ||||||||
5,781,549 | (2,221,300 | ) | 12,157,345 | 2,035,000 | | ||||||||
54
Executive Benefits and Payments Upon Termination | Involuntary Not-for-Cause Termination (Not CIC) |
For-Cause Termination |
Involuntary or Good Reason Termination (CIC) |
Death | Disability | |||||||
S.L. Cornelius |
||||||||||||
Base Salary |
$ | 1,356,000 | $ | $ | 2,034,000 | $ | $ | |||||
Short-term Incentive |
1,125,480 | | 1,688,220 | | | |||||||
Variable Cash Incentive Program |
562,740 | | 562,740 | 562,740 | 562,740 | |||||||
2006 2008 (performance period) |
822,170 | | 822,170 | 822,170 | 822,170 | |||||||
2007 2009 (performance period) |
411,085 | | 411,085 | 411,085 | 411,085 | |||||||
2008 2010 (performance period) |
177,173 | | 177,173 | 177,173 | 177,173 | |||||||
Restricted Stock/Units from prior performance |
5,038,120 | | 5,038,120 | 5,038,120 | 5,038,120 | |||||||
Stock Options/SARs: |
||||||||||||
Unvested and Accelerated |
| | | | | |||||||
Incremental Pension |
1,484,048 | | 2,251,678 | | | |||||||
Post-employment Health & Welfare |
11,693 | | 19,965 | | | |||||||
Life Insurance |
| | | 1,356,000 | | |||||||
280G Tax Gross-up |
| | 2,022,817 | | | |||||||
10,988,509 | | 15,027,968 | 8,367,288 | 7,011,288 | ||||||||
Executive Benefits and Payments Upon Termination | Involuntary Not-for-Cause Termination (Not CIC) |
For-Cause Termination |
Involuntary or Good Reason Termination (CIC) |
Death | Disability | |||||||
R.C. Berney |
||||||||||||
Base Salary |
$ | 675,000 | $ | $ | 900,000 | $ | $ | |||||
Short-term Incentive |
438,750 | | 806,152 | | | |||||||
Variable Cash Incentive Program |
292,500 | | 292,500 | 292,500 | 292,500 | |||||||
2006 2008 (performance period) |
367,987 | | 367,987 | 367,987 | 367,987 | |||||||
2007 2009 (performance period) |
172,080 | | 172,080 | 172,080 | 172,080 | |||||||
2008 2010 (performance period) |
74,178 | | 74,178 | 74,178 | 74,178 | |||||||
Restricted Stock/Units from prior performance |
3,291,476 | | 3,291,476 | 3,291,476 | 3,291,476 | |||||||
Stock Options/SARs: |
||||||||||||
Unvested and Accelerated |
| | | | | |||||||
Incremental Pension |
2,972,747 | | 3,266,991 | | | |||||||
Post-employment Health & Welfare |
6,577 | | 10,909 | | | |||||||
Life Insurance |
| | | 900,000 | | |||||||
280G Tax Gross-up |
| | 1,847,851 | | | |||||||
8,291,295 | | 11,030,124 | 5,098,221 | 4,198,221 | ||||||||
Notes Applicable to All Termination Tables In preparing each of the tables above, certain assumptions have been made. Benefits that would be available generally to all or substantially all salaried employees on the U.S. payroll are not included in the amounts shown. The following additional assumptions were also made:
| Short-Term Incentives For the short-term incentive amounts, in the event of an involuntary not-for-cause termination not related to a change in control (regular involuntary termination), the amount reflects one-and-a-half (for Mr. Berney) or two times (for other Named Executive Officers) current VCIP target, while in the event of an involuntary or good reason termination related to a change in control (CIC termination), the amount reflects the higher of two (for Mr. Berney) or three times (for other Named Executive Officers) current VCIP target or two (for Mr. Berney) or three times (for other Named Executive Officers) the average of the prior two VCIP payouts. |
| Variable Cash Incentive Program For the VCIP amounts, in the event of an involuntary not-for-cause termination not related to a change in control (regular involuntary termination), the amount reflects the employees pro-rata current VCIP target, while in the event of an involuntary or good reason termination related to a change in control (CIC termination), the amount reflects the employees current pro-rata target. Targets for VCIP are for a full year, and are pro-rata for the Named Executive Officers based on time spent in their respective positions. |
| Long-Term Incentives For the performance periods related to PSP, amounts for the 2006-2008 period are shown at the payout amount that was awarded in February 2009, while amounts for other periods are prorated to reflect the portion of the performance period completed by the end of 2008. For the PSP awards, for restricted stock and restricted stock units, amounts reflect the closing price of ConocoPhillips common stock at the end of 2008 ($51.80 on December 31, 2008). |
55
| Stock Options For stock options, amounts reflect a zero intrinsic value since the December 31, 2008 ConocoPhillips common stock price was lower than the option exercise price regarding the options that the executive would have retained for the specific termination event. |
| Incremental Pension Values For the incremental pension value, the amounts reflect the single sum value of the increment due to an additional one-and-a-half (for Mr. Berney) or two (for other Named Executive Officers) years of age and service with associated pension compensation in the event of regular involuntary termination (two (for Mr. Berney) or three (for other Named Executive Officers) years in the event of a CIC termination) regardless of whether the value is provided directly through a defined benefit plan or through the relevant severance plan. |
| 280G Tax Gross-up Each Named Executive Officer is entitled, under the relevant change in control plan, to an associated excise tax gross-up to the extent any change in control payment triggers the golden parachute excise tax provisions under Section 4999 of the Internal Revenue Code (within certain limitations). The following material assumptions were used to estimate executive excise taxes and associated tax gross-ups: |
| Equity and PSP awards were valued at the closing price of the Companys stock on December 31, 2008 of $51.80; |
| Options are assumed exchanged and valued using a Black-Scholes-Merton-based option methodology; |
| Parachute payments for time vesting stock options, restricted stock and restricted stock units were valued using Treas. Reg. Section 1.280G-1 Q&A 24(b) or (c) as applicable; and |
| Calculations assume certain performance-based pay such as PSP awards and pro-rata bonus payments are reasonable compensation for services rendered prior to the CIC. |
56
57
58
The Supplement to the Non-Employee Director Compensation Table below reconciles the annual equity compensation awards set by the Committee on Directors Affairs for each Director with the amount that is required to be reported for 2008 in the Non-Employee Director Compensation Table on page 60.
Name | Cash Compensation |
Grant Date Value of Stock Awards by Board in 2008 |
Total Compensation Awarded in 2008 |
FAS 123(R) and Other Accruals on Prior Awards |
All
Other Compensation per Non-Employee Director Compensation Table |
Amount per Non-Employee Director Compensation Table |
||||||||||||||||||
R.L. Armitage |
$ 100,000 | $ 120,010 | $ 220,010 | $ 7,102 | $ 129,978 | $ 357,090 | ||||||||||||||||||
R.H. Auchinleck |
135,338 | 120,010 | 255,348 | 46,561 | 73,762 | 375,671 | ||||||||||||||||||
N.R. Augustine |
41,667 | 120,010 | 161,677 | 37,677 | 278,834 | 478,188 | ||||||||||||||||||
J.E. Copeland, Jr. |
120,441 | 120,010 | 240,451 | 19,997 | 147,137 | 407,585 | ||||||||||||||||||
K.M. Duberstein |
100,000 | 120,010 | 220,010 | 45,974 | 154,756 | 420,740 | ||||||||||||||||||
R.R. Harkin |
110,352 | 120,010 | 230,362 | 31,908 | 146,023 | 408,293 | ||||||||||||||||||
C.C. Krulak |
44,792 | 120,010 | 164,802 | 34,664 | 171,376 | 370,842 | ||||||||||||||||||
H.W. McGraw III |
100,499 | 120,010 | 220,509 | 10,369 | 89,030 | 319,908 | ||||||||||||||||||
H.J. Norvik |
106,159 | 120,010 | 226,169 | 10,369 | 113,474 | 350,012 | ||||||||||||||||||
W.K. Reilly |
100,499 | 120,010 | 220,509 | 48,941 | 194,755 | 464,205 | ||||||||||||||||||
W.R. Rhodes |
41,667 | 120,010 | 161,677 | 31,908 | 263,372 | 456,957 | ||||||||||||||||||
J.S. Roy |
41,828 | 120,010 | 161,838 | 28,092 | 280,073 | 470,003 | ||||||||||||||||||
B.S. Shackouls |
100,000 | 120,010 | 220,010 | 7,102 | 106,390 | 333,502 | ||||||||||||||||||
V.J. Tschinkel |
107,500 | 120,010 | 227,510 | 99,804 | 113,583 | 440,897 | ||||||||||||||||||
K.C. Turner |
100,000 | 120,010 | 220,010 | 76,277 | 112,279 | 408,566 | ||||||||||||||||||
W.E. Wade, Jr. |
115,435 | 120,010 | 235,445 | 7,102 | 213,294 | 455,841 |
59
NON-EMPLOYEE DIRECTOR COMPENSATION TABLE
The following table and accompanying narrative disclosures provide information concerning total compensation paid to the non-employee directors of ConocoPhillips in 2008 (for compensation paid to our sole employee director, Mr. Mulva, please see our Executive Compensation Tables beginning on page 35).
Name | Fees Earned or Paid in Cash ($)(1) |
Stock Awards ($)(2)(3) |
Option Awards ($) |
Non-Equity Incentive Plan Compensation ($) |
Change in ($) |
All Other Compensation ($)(4) |
Total ($) |
|||||||||||||||||||||||||
R.L. Armitage |
$ | 100,000 | $ | 127,112 | $ | $ | $ | $ | 129,978 | $ | 357,090 | |||||||||||||||||||||
R.H. Auchinleck |
135,338 | 166,571 | | | | 73,762 | 375,671 | |||||||||||||||||||||||||
N.R. Augustine |
41,667 | 157,687 | | | | 278,834 | 478,188 | |||||||||||||||||||||||||
J.E. Copeland, Jr. |
120,441 | 140,007 | | | | 147,137 | 407,585 | |||||||||||||||||||||||||
K.M. Duberstein |
100,000 | 165,984 | | | | 154,756 | 420,740 | |||||||||||||||||||||||||
R.R. Harkin |
110,352 | 151,918 | | | | 146,023 | 408,293 | |||||||||||||||||||||||||
C.C. Krulak |
44,792 | 154,674 | | | | 171,376 | 370,842 | |||||||||||||||||||||||||
H.W. McGraw III |
100,499 | 130,379 | | | | 89,030 | 319,908 | |||||||||||||||||||||||||
H.J. Norvik |
106,159 | 130,379 | | | | 113,474 | 350,012 | |||||||||||||||||||||||||
W.K. Reilly |
100,499 | 168,951 | | | | 194,755 | 464,205 | |||||||||||||||||||||||||
W.R. Rhodes |
41,667 | 151,918 | | | | 263,372 | 456,957 | |||||||||||||||||||||||||
J.S. Roy |
41,828 | 148,102 | | | | 280,073 | 470,003 | |||||||||||||||||||||||||
B.S. Shackouls |
100,000 | 127,112 | | | | 106,390 | 333,502 | |||||||||||||||||||||||||
V.J. Tschinkel |
107,500 | 219,814 | | | | 113,583 | 440,897 | |||||||||||||||||||||||||
K.C. Turner |
100,000 | 196,287 | | | | 112,279 | 408,566 | |||||||||||||||||||||||||
W.E. Wade, Jr. |
115,435 | 127,112 | | | | 213,294 | 455,841 |
(1) | Reflects annual cash compensation of $100,000 payable to each non-employee director. Non-employee directors serving in specified committee positions also receive the following additional cash compensation: |
° | Director presiding over meetings of non-employee directors $25,000 |
° | Chair of the Audit and Finance Committee $20,000 |
° | Chair of the Compensation Committee $15,000 |
° | Chair of the other committees $10,000 |
° | All other Audit and Finance Committee members $7,500 |
Compensation amounts reflect adjustments related to various changes in Committee assignments by Board members throughout the year. Amounts shown include prorated amounts attributable to Committee reassignments which may occur during the year. Amounts shown in the Fees Earned or Paid in Cash column include any amounts that were voluntarily deferred to the Directors Deferred Compensation Plan, received in ConocoPhillips common stock, or received in restricted stock units.
(2) | Value reported determined in accordance with FAS 123(R). Under our Non-employee director compensation program, non-employee directors receive an annual grant of restricted stock units with an aggregate value of $120,000 on the date of grant based on the average of the high and low price for our common stock on such date. Shares with a value of $120,000 were granted on January 15, 2008 to all persons who were directors on that date. |
60
(3) | The following table reflects, for each director, the aggregate number of stock awards outstanding as of December 31, 2008. Although ConocoPhillips compensation programs for non-employee directors have not historically included stock options, certain directors below acquired options as directors of predecessor companies which converted to options to purchase ConocoPhillips stock. |
Option Awards | Stock Awards | |||||||||||
Name | Number
of (#) Exercisable |
Number
of (#) Unexercisable |
Equity (#) |
Option Exercise Price ($) |
Option Expiration Date |
Number
of (#) | ||||||
R.L. Armitage |
| | | $ | | 3,845 | ||||||
R.H. Auchinleck |
| | | | | 39,001 | ||||||
N.R. Augustine |
| | | | | 15,970 | ||||||
J.E. Copeland, Jr. |
| | | | | 18,067 | ||||||
K.M. Duberstein |
4,014 | | | 29.9337 | 6/1/2010 | | ||||||
| | | | | 36,026 | |||||||
R.R. Harkin |
4,116 | | | 29.0785 | 6/1/2009 | | ||||||
4,014 | | | 29.9337 | 6/1/2010 | | |||||||
| | | | | 21,869 | |||||||
C.C. Krulak |
4,014 | | | 29.9337 | 6/1/2010 | | ||||||
H.W. McGraw III |
| | | | | 10,477 | ||||||
H.J. Norvik |
| | | | | 8,551 | ||||||
W.K. Reilly |
| | | | | 36,199 | ||||||
W.R. Rhodes |
| | | | | | ||||||
J.S. Roy |
| | | | | 16,066 | ||||||
B.S. Shackouls |
| | | | | 3,845 | ||||||
V.J. Tschinkel |
| | | | | 48,338 | ||||||
K.C. Turner |
| | | | | 38,814 | ||||||
W.E. Wade, Jr. |
14,425 | | | 13.2370 | 3/31/2009 | | ||||||
5,770 | | | 14.4415 | 3/31/2009 | | |||||||
5,770 | | | 16.6528 | 3/31/2009 | | |||||||
5,770 | | | 22.8640 | 3/31/2009 | | |||||||
5,770 | | | 34.3454 | 3/31/2009 | | |||||||
| | | | | 5,914 |
61
The following table lists option exercises by directors and vesting of director stock awards in 2008.
Option Awards | Stock Awards | |||||||||||||||
Name | Number of Shares Acquired on Exercise (#) |
Value Realized Upon Exercise ($) |
Number of Shares Acquired on Vesting (#)(c) |
Value Realized Upon Vesting ($) |
||||||||||||
R.L. Armitage |
| $ | | $ | ||||||||||||
R.H. Auchinleck |
| | | | ||||||||||||
N.R. Augustine(c) |
| | 36,146 | 3,149,538 | ||||||||||||
J.E. Copeland, Jr. |
| | | | ||||||||||||
K.M. Duberstein |
| | | | ||||||||||||
R.R. Harkin(a) |
3,650 | 168,125 | | | ||||||||||||
C.C. Krulak(c) |
| | 25,803 | 1,476,283 | ||||||||||||
H.W. McGraw III |
| | | | ||||||||||||
H.J. Norvik |
| | | | ||||||||||||
W.K. Reilly |
| | | | ||||||||||||
W.R. Rhodes(b) (c) |
11,780 | 769,141 | 17,277 | 825,015 | ||||||||||||
J.S. Roy(c) |
| | 3,507 | 167,384 | ||||||||||||
B.S. Shackouls |
| | | | ||||||||||||
V.J. Tschinkel |
| | | | ||||||||||||
K.C. Turner |
| | | | ||||||||||||
W.E. Wade, Jr. |
| | | |
(a) | During her service as a Director of Conoco Inc. from 19982002, Mrs. Harkin received a nonqualified stock option grant of 3,650 options on October 21, 1998 at grant price $24.5884, and the options were set to expire on October 20, 2008. Mrs. Harkin exercised the full award on September 10, 2008 using a cashless hold method, which allows the option holder to receive the net number of shares after withholding for payment of the option cost and fees. Although taxes are not collected by the Company on behalf of the non-employee director at the time of exercise, the value of the options exercised are reported on a Form 1099 for the year in which the taxable event occurs. The number of shares shown in the table reflects the gross number of options exercised by Mrs. Harkin. 1,272 shares were sold on the market to cover the option cost and fees, and Mrs. Harkin actually received 2,378 shares of company stock as a result of this transaction. |
(b) | During his service as a Director of Conoco Inc. from 19982002, Mr. Rhodes received three nonqualified stock option grants: (1) 3,650 options on October 21, 1998 at grant price $24.5884, and the options were set to expire on October 20, 2008; (2) 4,116 options on June 1, 1999 at grant price $29.0785, and the options were set to expire on June 1, 2009; and (3) 4,014 options on June 1, 2000 at grant price $29.9337, and the options were set to expire on June 1, 2010. Mr. Rhodes exercised all three awards on June 10, 2008 using a cashless hold method, which allows the option holder to receive the net number of shares after withholding for payment of the option cost and fees. Although taxes are not collected by the Company on behalf of the non-employee director at the time of exercise, the value of the options exercised are reported on a Form 1099 for the year in which the taxable event occurs. The number of shares shown in the table reflects the gross number of options exercised by Mr. Rhodes. In total, 3,541 shares were sold on the market to cover the option cost and fees, and Mr. Rhodes actually received 8,239 shares of company stock as a result of this transaction. |
(c) | Effective May 14, 2008, Mr. Augustine, General Krulak, Mr. Rhodes, and Mr. Roy retired from service on the ConocoPhillips Board of Directors. As a result, under the terms and conditions of the stock awards reflected in the table that were in the form of restricted stock and restricted stock units, restrictions lapsed and the awards settled per the election made by the Director for each grant. Although taxes are not collected by the Company on behalf of the non-employee director, the value of lapsed shares are reported on a Form 1099 for the year in which the taxable event occurs. |
Mr. Augustine received restricted stock unit awards for his service as a Director of Phillips Petroleum Company from 19982002 totaling 34,390 units. The restriction period ended upon his retirement. As permitted by the terms and conditions of the awards, Mr. Augustine elected to defer the value of the award to a Deferred Compensation account at Vanguard to be paid out in 10 annual installments beginning in July 2009. Per the Amended and Restated Deferred Compensation Plan for Non-Employee Directors, the higher of the average of the high and low selling price on retirement date (or last preceding trading date if retirement date is on a non-trading date), or the average of the high three monthly fair market values of COP stock during the 12 calendar months preceding the month of the participants retirement date should be used to value the award. The average of the high and low on May 14, 2008 ($89.1450) was used to value the award. $3,065,716 was deferred to Vanguard. Mr. Augustine received restricted
62
stock and restricted stock unit awards for his service as a Director of ConocoPhillips from 20022008. Mr. Augustine elected to receive unrestricted shares in 10 annual installments beginning upon separation from service. Per their terms, these awards remained restricted until six months after separation from service. The total unrestricted shares acquired on vesting of these awards were 1,756 shares, valued at $83,822.
General Krulak received restricted stock unit awards for his service as a Director of Conoco Inc. from 20002002 totaling 5,897 units. The restriction period ended upon his retirement. As permitted by the terms and conditions of the awards, General Krulak elected to receive unrestricted shares in lump sum upon separation from service on May 14, 2008, valued at $525,670. General Krulak received restricted stock and restricted stock unit awards for his service as Director of ConocoPhillips from 2002 2008, for which he elected to receive unrestricted shares as a lump sum upon separation from service. Per their terms, these awards remained restricted until six months after separation from service. The total unrestricted shares acquired on vesting of these awards are 19,906 shares, valued at $950,613.
Mr. Rhodes received restricted stock unit awards for his service as a Director of ConocoPhillips from 20022008 totaling 17,277 units. As permitted by the terms and conditions of the awards, Mr. Rhodes elected to receive unrestricted shares in lump sum upon separation from service on May 14, 2008. Per their terms, these awards remained restricted until six months after separation from service. The total unrestricted shares acquired on vesting of these awards are 17,277 shares, valued at $825,015.
Mr. Roy received restricted stock and restricted stock unit awards for his service as a Director of ConocoPhillips from 20022008. As permitted by the terms and conditions of the awards, Mr. Roy elected to receive unrestricted shares in five annual installments beginning upon separation from service. Per their terms, these awards remained restricted until six months after separation from service. The total unrestricted shares acquired on vesting of these awards were 3,507 shares, valued at $167,384.
(4) | Includes the amounts attributable to the following: |
Name | Tax Reimbursement Gross-Up(a) |
Director Charitable Gift Program(b) |
Matching Gift Amounts(c) |
Total | ||||||||||||
R.L. Armitage |
$ | $ 129,978 | $ | $ 129,978 | ||||||||||||
R.H. Auchinleck |
117 | 62,195 | 11,450 | 73,762 | ||||||||||||
N.R. Augustine |
1,308 | 262,526 | 15,000 | 278,834 | ||||||||||||
J.E. Copeland, Jr. |
2,288 | 129,849 | 15,000 | 147,137 | ||||||||||||
K.M. Duberstein |
433 | 139,323 | 15,000 | 154,756 | ||||||||||||
R.R. Harkin |
| 135,023 | 11,000 | 146,023 | ||||||||||||
C.C. Krulak |
| 166,376 | 5,000 | 171,376 | ||||||||||||
H.W. McGraw III |
| 89,030 | | 89,030 | ||||||||||||
H.J. Norvik |
| 113,474 | | 113,474 | ||||||||||||
W.K. Reilly |
| 194,755 | | 194,755 | ||||||||||||
W.R. Rhodes |
1,682 | 261,690 | | 263,372 | ||||||||||||
J.S. Roy |
743 | 264,330 | 15,000 | 280,073 | ||||||||||||
B.S. Shackouls |
1,037 | 90,353 | 15,000 | 106,390 | ||||||||||||
V.J. Tschinkel |
894 | 98,085 | 14,604 | 113,583 | ||||||||||||
K.C. Turner |
| 102,279 | 10,000 | 112,279 | ||||||||||||
W.E. Wade, Jr. |
437 | 201,357 | 11,500 | 213,294 |
(a) | The amounts shown are for payments by the Company relating to certain taxes incurred by the director. These primarily occur when the Company requests spouses or other guests to accompany the director to Company functions, including Board and Committee meetings, and as a result, the director is deemed to make a personal use of Company assets (for example, when a spouse accompanies a director on a Company aircraft). In such circumstances, if the director is imputed income in accordance with the applicable tax laws, the Company will generally reimburse the director for the increased tax costs. |
(b) | The Company maintains a Director Charitable Gift Program. This program allows an eligible director to designate charities and tax-exempt educational institutions to receive a donation from the Company of up to $1 million upon his or her death. Donations are payable over five years following the death of the director. A director becomes vested in the program after one year of service on the Board. ConocoPhillips also maintains similar programs with regard to directors of companies that it has acquired, including, most recently, Burlington Resources Inc. Messrs. Shackouls and Wade are eligible under the Burlington Resources Inc. program, while all of the other directors are eligible under the ConocoPhillips program. Although eligibility, time of payment, and other provisions may differ under these programs, each has the same general purpose of allowing directors to designate charities and tax-exempt educational institutions to receive a donation from the Company of up to $1 million upon the directors death. In 2008, |
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as part of its regular review of the compensation of directors, the Committee on Directors Affairs made the election to discontinue the Director Charitable Gift Program for current and future director appointees. With respect to current directors, the Company made payments equal to the net present value of the outstanding awards to charities designated by such directors in 2008, with the exception of Mr. Shackouls, who, as a result of his participation in the Burlington Resources charitable gift program, will continue to have the donation paid upon his death. Eligible directors who retired prior to 2008 were given the opportunity to request that the Company pay the net present value to their designated charities in 2008 or continue with the prior terms of the program. Amounts above for all directors reflect the cost to the company of the 2008 payments, less any compensation reported in previous periods with respect to the Director Charitable Gift Program. The Company does not expect to have any further costs associated with the program for Mr. Shackouls until payment of a benefit at his death. Mr. Mulva was also eligible for the Director Charitable Gift Program. Information for Mr. Mulva is shown on the Summary Compensation Table on page 35 and the notes to that table. During 2008, directors who had retired prior to 2008 were asked whether they preferred their charities to receive the actuarial present value as calculated by the Company in 2008 or to wait until after the death of the director, per the terms of the applicable program. In response, 21 retired directors requested the current payment, and the Company made such payments in the total amount of $6,604,219, while 22 retired directors requested that the Company wait, and the estimated incremental cost to the Company of continuing the applicable programs during 2008 for these directors is $988,953. |
(c) | The Company maintains a Matching Gift Program under which we match certain gifts by directors to charities and educational institutions, excluding religious, political, fraternal, or athletic organizations, that are tax-exempt under Section 501(c)(3) of the Internal Revenue Code of the United States or meet similar requirements under the applicable law of other countries. For directors, the program matches up to $15,000 with regard to each program year. Administration of the program can cause more than $15,000 to be paid in a single fiscal year of the Company, due to processing claims from more than one program year in that single fiscal year. The amounts shown are for the actual payments by the Company in 2008. Mr. Mulva is eligible for the Program as an executive of the Company, rather than as a director. Information for Mr. Mulva is shown on the Summary Compensation Table on page 35 and the notes to that table. |
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Equity Compensation Plan Information
The following table sets forth information about ConocoPhillips common stock that may be issued under all existing equity compensation plans as of December 31, 2008:
Plan category |
Number of Securities to be Issued Upon Exercise of Outstanding Options, Warrants and Rights(2) |
Weighted Average Exercise Price of Outstanding Options, Warrants and Rights |
Number of Securities Remaining Available for Future Issuance |
||||||
Equity compensation plans approved by security holders(1) |
16,771,505 | (3) | $ | 63.2500 | 48,260,191 | (4) | |||
Equity compensation plans not approved by security holders |
| | | ||||||
Total |
16,771,505 | $ | 63.2500 | 48,260,191 | |||||
(1) | Includes awards issued from the 2004 Omnibus Stock and Performance Incentive Plan of ConocoPhillips, which was approved by stockholders on May 5, 2004. |
(2) | Excludes (a) options to purchase 28,579,258 shares of ConocoPhillips common stock at a weighted average price of $27.91, (b) 2,468,739 restricted stock units, and (c) 37,716 shares underlying stock units, payable in common stock on a one-for-one basis, credited to stock unit accounts under our deferred compensation arrangements. These awards, which were excluded from the above table, were issued from the 1998 Stock and Performance Incentive Plan of ConocoPhillips, the 1998 Key Employee Stock Performance Plan of ConocoPhillips, the 2002 Omnibus Securities Plan of Phillips Petroleum Company, the Omnibus Securities Plan of Phillips Petroleum Company, the Phillips Petroleum Company Stock Plan for Non-Employee Directors, the Incentive Compensation Plan of Phillips Petroleum Company, the 2001 Global Performance Sharing Plans of Conoco Inc., the 1993 Burlington Resources Inc. Stock Incentive Plan, the Burlington Resources Inc. 1997 Employee Stock Incentive Plan, the Burlington Resources Inc. 2002 Stock Incentive Plan, and the Burlington Resources Inc. 2000 Stock Option Plan for Non-Employee Directors. Upon consummation of the merger of Conoco and Phillips, all outstanding options to purchase and restricted stock units payable in common stock of Conoco and Phillips were converted into options to purchase or rights to receive shares of ConocoPhillips common stock. Likewise, upon the acquisition of Burlington Resources Inc., all outstanding options to purchase and restricted stock units payable in common stock of Burlington Resources Inc. were converted into options or rights to receive shares of ConocoPhillips common stock. No additional awards may be granted under the aforementioned plans. |
(3) | Includes an aggregate of 103,010 restricted stock units issued in payment of annual awards and dividend equivalents which were reinvested with regard to existing awards received annually, and 42,465 restricted stock units issued in payment of dividend equivalents with regard to fees that were deferred in the form of stock units under our deferred compensation arrangements for non-employee members of the Board of Directors of ConocoPhillips, or assumed in connection with the merger for services performed as a non-employee member of the Board of Directors for either Conoco Inc. or Phillips Petroleum Company. Also includes 60,017 restricted stock units issued in payment of dividend equivalents reinvested with respect to certain special award made to Mr. Mulva. Further includes 6,492 restricted stock units issued with respect to an option gain deferral election made by a retired Conoco executive pursuant to a heritage Conoco plan, assumed in connection with the merger. Dividend equivalents were credited under the 2004 Omnibus Stock and Performance Incentive Plan during the time period from May 5, 2004 to December 31, 2008. Also includes 54,660 restricted stock units issued in payment of a long-term incentive award for Mr. Mulva and off cycle awards for recently hired executives. In addition, 3,585,539 restricted stock units that are eligible for cash dividend equivalents were issued to U.S. and U.K. payrolled employees residing in the United States or the United Kingdom at the time of the grant; 1,303,319 restricted stock units that are not eligible for cash dividend equivalents due to legal restrictions were issued to non-U.S. or non-U.K. payrolled employees and U.S. or U.K. payrolled employees residing in countries other than the United States or United Kingdom at the time of the grant. Both awards vest over a period of five years, the restrictions lapsing in three equal annual installments beginning on the third anniversary of the grant date. Includes 1,122,131 restricted stock units issued to executives on February 10, 2006, 994,586 restricted stock units issued to executives on February 8, 2007, and 1,059,461 restricted stock units issued to executives on February 14, 2008. These restricted stock units have no voting rights, are eligible for cash dividend equivalents, and have restrictions on transferability that last until separation of service from the Company. In addition, 412,155 restricted stock units that are not eligible for cash dividend equivalents were issued as retention bonuses; the awards vest over a period of three years, the restrictions lapsing in three equal annual installments beginning on the first anniversary of the grant dates. Further included are 7,830,094 non-qualified and 197,576 incentive stock options with a term of 10 years and become exercisable in three equal annual installments beginning on the first anniversary of the grant date. |
(4) | The securities remaining available for issuance may be issued in the form of stock options, stock appreciation rights, stock awards, stock units, and performance shares. Under the 2004 Omnibus Stock and Performance Incentive Plan, no more than 40,000,000 shares of common stock may be issued for incentive stock options (197,576 have been issued with 39,802,424 available for future issuance) and no more than 40,000,000 shares of common stock may be issued with respect to stock awards (11,974,452 have been issued with 28,025,548 available for future issuance). |
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Holdings of Major Stockholders
The following table sets forth information regarding persons whom we know to be the beneficial owners of more than five percent of our issued and outstanding common stock (as of the date of such stockholders Schedule 13G filing with the SEC):
Common Stock | |||||
Name and Address |
Number of Shares |
Percent of Class |
|||
Vanguard Fiduciary Trust Company(1) 500 Admiral Nelson Blvd. Malvern, Pennsylvania 19355 |
102,746,358 | 6.9 | % | ||
Warren E. Buffett(2) 1440 Kiewit Plaza Omaha, Nebraska 68131 |
84,896,273 | 5.7 | % |
(1) | Based on a Schedule 13G filed with the SEC on February 5, 2009, by Vanguard Fiduciary Trust Company, in its capacity as trustee for ConocoPhillips Savings Plan, the Retirement Savings Plan of Phillips Petroleum Company, the Tosco Corporation Capital Accumulation Plan, and the ConocoPhillips Store Savings Plan (collectively, the Plans) and the ConocoPhillips Compensation and Benefits Trust (the CBT) with shared voting power. Vanguard and the Plans have disclaimed beneficial ownership of the shares held by Vanguard as trustee of the Plans and the CBT. Vanguard votes shares held by the Plans, which represent the allocated interests of participants, in the manner directed by individual participants. Participants in the Plans are appointed by ConocoPhillips as fiduciaries entitled to direct the trustee as to how to vote allocated shares which are not directed in these Plans and unallocated shares held by the ConocoPhillips Savings Plan. Such shares are allocated pro rata among participants accepting their fiduciary appointment and are voted by the trustee as directed by the participant fiduciaries. The trustee will vote other shares held by the Plans at its discretion only if required to do so by ERISA. Vanguard votes shares held by the CBT only in accordance with the pro rata directions of eligible domestic employees and the trustees of certain international stock plans of ConocoPhillips. |
(2) | Based on a Schedule 13G filed with the SEC on February 17, 2009, by Warren E. Buffett on behalf of himself, Berkshire Hathaway Inc., OBH, Inc., National Indemnity Company, National Fire & Marine Insurance Company, GEICO Corporation, Government Employees Insurance Company, General Re Corporation, and General Reinsurance Corporation. |
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Securities Ownership of Officers and Directors
The following table sets forth the number of shares of our common stock beneficially owned as of March 1, 2009, by each ConocoPhillips Director, by each Named Executive Officer and by all of our Directors and Executive Officers as a group. Together these individuals beneficially own less than one percent (1%) of our common stock. The table also includes information about stock options, restricted stock, and restricted and deferred stock units credited to the accounts of our Directors and Executive Officers under various compensation and benefit plans. For purposes of this table, shares are considered to be beneficially owned if the person, directly or indirectly, has sole or shared voting or investment power with respect to such shares. In addition, a person is deemed to beneficially own shares if that person has the right to acquire such shares within 60 days of March 2, 2009.
Number of Shares or Units | |||||||
Name of Beneficial Owner |
Total Common Stock Beneficially Owned |
Restricted/Deferred Stock Units(1) |
Options Exercisable Within 60 Days(2) | ||||
Richard L. Armitage |
505 | 6,449 | | ||||
Richard H. Auchinleck |
5,763 | 40,579 | | ||||
Rand C. Berney |
55,094 | 95,312 | 124,666 | ||||
John A. Carrig |
282,070 | 372,526 | 575,328 | ||||
James E. Copeland, Jr. |
21,842 | 20,856 | | ||||
Sigmund L. Cornelius |
28,417 | 109,538 | 163,732 | ||||
Kenneth M. Duberstein |
13,359 | 32,084 | 4,014 | ||||
James L. Gallogly |
35,549 | 85,183 | 144,537 | ||||
Ruth R. Harkin |
17,627 | (3) | 24,708 | 8,130 | |||
John E. Lowe |
74,216 | 213,407 | 184,466 | ||||
Harold W. McGraw III |
1,000 | 13,566 | | ||||
James J. Mulva |
701,409 | (4) | 2,338,405 | 6,908,933 | |||
Harald J. Norvik |
| 11,643 | | ||||
William K. Reilly |
6,502 | 32,722 | | ||||
Bobby S. Shackouls |
39,298 | 6,449 | | ||||
Victoria J. Tschinkel |
17,128 | (5) | 43,016 | | |||
Kathryn C. Turner |
12,443 | 37,377 | | ||||
William E. Wade, Jr. |
2,242 | (6) | 8,773 | 37,505 | |||
Directors and Executive Officers as a Group |
1,301,086 | 3,415,347 | 8,252,548 |
(1) | Includes restricted or deferred stock units that may be voted or sold only upon passage of time. |
(2) | Includes beneficial ownership of shares of common stock which may be acquired within 60 days of March 1, 2008 through stock options awarded under compensation plans. |
(3) | Includes 46 shares held by Ms. Harkins daughter. |
(4) | Includes 20,176 shares pledged as collateral. |
(5) | Includes 171 shares of common stock owned by the Erica Tschinkel Trust and 13,067 shares of common stock owned jointly with Ms. Tschinkels spouse. |
(6) | Includes 367 shares of common stock owned by the Wade Family Trust. |
(7) | Excludes shares owned by Mr. Lowe, who, in 2008, announced his transition to a part-time role. |
Section 16(a) Beneficial Ownership Reporting Compliance
Section 16(a) of the Securities Exchange Act of 1934 requires ConocoPhillips directors and executive officers, and persons who own more than 10 percent of a registered class of ConocoPhillips equity securities, to file reports of ownership and changes in ownership of ConocoPhillips common stock with the SEC and the NYSE, and to furnish ConocoPhillips with copies of the forms they file. To ConocoPhillips knowledge, based solely upon a review of the copies of such reports furnished to it and written representations of its officers and directors, during the year ended December 31, 2008, all Section 16(a) reports applicable to its officers and directors were filed on a timely basis.
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2009 OMNIBUS STOCK AND PERFORMANCE INCENTIVE PLAN
OF CONOCOPHILLIPS
(As Established Effective May 13, 2009)
RECITALS
ConocoPhillips has established and maintained the 2004 Omnibus Stock and Performance Incentive Plan of ConocoPhillips, effective May 5, 2004 (together with any other stock incentive plans established and maintained by ConocoPhillips or its subsidiaries or predecessors under which awards are outstanding or under which shares have been reserved but not yet used, the Prior Plans).
Effective May 13, 2009, upon shareholder approval, ConocoPhillips hereby establishes the 2009 Omnibus Stock and Performance Incentive Plan of ConocoPhillips (the Plan). As of the effective date of the Plan, (i) any shares of Common Stock available for future awards under the Prior Plans and (ii) any shares of Common Stock represented by awards granted under the Prior Plans that are forfeited, expire or are canceled without delivery of shares of Common Stock or which result in the forfeiture of shares of Common Stock back to the Company shall be available for Awards under the Plan and no new awards shall be granted under the Prior Plans.
1. | Plan. The 2009 Omnibus Stock and Performance Incentive Plan of ConocoPhillips (the Plan) is adopted by ConocoPhillips, a Delaware corporation, to reward certain employees and nonemployee directors of the Company and its Subsidiaries by providing for certain cash benefits and by enabling them to acquire shares of Common Stock of the Company. |
2. | Objectives. The purpose of the Plan is to further the interests of the Company, its Subsidiaries and its shareholders by providing incentives in the form of Awards to employees and directors who can contribute materially to the success and profitability of the Company and its Subsidiaries. Such Awards will recognize and reward outstanding performances and individual contributions and give Participants in the Plan an interest in the Company parallel to that of the shareholders, thus enhancing the proprietary and personal interest of such Participants in the Companys continued success and progress. This Plan will also enable the Company and its Subsidiaries to attract and retain such employees and directors. |
3. | Definitions. As used herein, the terms set forth below shall have the following respective meanings: |
Award means an Employee Award or a Director Award.
Award Agreement means one or more Employee Award Agreements or Director Award Agreements.
Board means the Board of Directors of the Company.
Cash Award means an award denominated in cash.
Change of Control is defined in Attachment A.
Code means the Internal Revenue Code of 1986, as amended from time to time.
Committee means the Compensation Committee or any committee designated pursuant to Paragraph 7.
Common Stock means ConocoPhillips common stock, par value $.01 per share.
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Company means ConocoPhillips, a Delaware corporation.
Compensation Committee means the Compensation Committee of the Board or any successor committee of the Board that is designated by the Board to administer certain portions of the Plan.
Director means an individual serving as a member of the Board.
Director Award means the grant of any Nonqualified Stock Option, SAR, Stock Award, Cash Award, or Performance Award, whether granted singly, in combination, or in tandem, to a Participant who is a Nonemployee Director pursuant to such applicable terms, conditions, and limitations as may be established in order to fulfill the objectives of the Plan.
Director Award Agreement means one or more agreements between the Company and a Nonemployee Director setting forth the terms, conditions, and limitations applicable to a Director Award.
Dividend Equivalents means, with respect to Restricted Stock Units or shares of Restricted Stock that are to be issued at the end of the Restriction Period, an amount equal to all dividends and other distributions (or the economic equivalent thereof) that are payable to shareholders of record during the Restriction Period on a like number of shares of Common Stock.
Employee means an employee of the Company or any of its Subsidiaries and an individual who has agreed to become an employee of the Company or any of its Subsidiaries and is expected to become such an employee within the following six months.
Employee Award means the grant of any Option, SAR, Stock Award, Cash Award, or Performance Award, whether granted singly, in combination, or in tandem, to an Employee pursuant to such applicable terms, conditions, and limitations (including treatment as a Performance Award) as may be established in order to fulfill the objectives of the Plan.
Employee Award Agreement means one or more agreements between the Company and an Employee setting forth the terms, conditions, and limitations applicable to an Employee Award.
Fair Market Value of a share of Common Stock means, as of a particular date, (i) (A) if shares of Common Stock are listed on a national securities exchange, the mean between the highest and lowest sales price per share of the Common Stock on the consolidated transaction reporting system for the principal national securities exchange on which shares of Common Stock are listed on that date, or, if there shall have been no such sale so reported on that date, on the last preceding date on which such a sale was so reported, or, at the discretion of the Committee, the price prevailing on the exchange at the relevant time (as determined under procedures established by the Committee), (B) if the Common Stock is not so listed, the mean between the closing bid and asked price on that date, or, if there are no quotations available for such date, on the last preceding date on which such quotations shall be available, as reported by Pink OTC Markets Inc., or (C) if shares of Common Stock are not publicly traded, the most recent value determined by an independent appraiser appointed by the Company for such purpose in accordance with the requirements of Section 409A of the Code, or (ii) if applicable and taking into account the requirements of Section 409A of the Code, the price per share as determined in accordance with the terms, conditions, and limitations set forth in an Award Agreement, or (iii) if applicable and taking into account the requirements of Section 409A of the Code, the price per share as determined in accordance with the procedures of a third party administrator retained by the Company to administer the Plan and as approved by the Committee.
Grant Date means the date an Award is granted to a Participant pursuant to the Plan. The Grant Date for a substituted award is the Grant Date of the original award.
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Grant Price means the price at which a Participant may exercise his or her right to receive cash or Common Stock, as applicable, under the terms of an Award.
Incentive Stock Option means an Option that is intended to comply with the requirements set forth in Section 422 of the Code.
Nonemployee Director means an individual serving as a member of the Board who is not an Employee.
Nonqualified Stock Option means an Option that is not an Incentive Stock Option.
Option means a right to purchase a specified number of shares of Common Stock at a specified Grant Price, which right may be an Incentive Stock Option or a Nonqualified Stock Option.
Participant means an Employee or a Director to whom an Award has been granted under this Plan.
Performance Award means an award made pursuant to this Plan that is subject to the attainment of one or more Performance Goals.
Performance Goal means one or more standards established by the Committee to determine in whole or in part whether a Performance Award shall be earned.
Qualified Performance Award means a Performance Award intended to qualify as qualified performance-based compensation under Section 162(m) of the Code, as provided in Section 8(a)(v)(B).
Restricted Stock means any shares of Common Stock that are restricted or subject to forfeiture provisions.
Restricted Stock Unit means a Stock Unit that is restricted or subject to forfeiture provisions.
Restriction Period means a period of time beginning as of the Grant Date of an Award of Restricted Stock or Restricted Stock Units and ending as of the date upon which the Common Stock subject to such Award is no longer restricted or subject to forfeiture provisions.
Stock Appreciation Right or SAR means a right to receive a payment, in cash or Common Stock, equal to the excess of the Fair Market Value or other specified valuation of a specified number of shares of Common Stock on the date the right is exercised over a specified Grant Price, in each case, as determined by the Committee.
Stock Award means an Award in the form of shares of Common Stock or Stock Units, including an award of Restricted Stock or Restricted Stock Units.
Stock Unit means a unit evidencing the right to receive in specified circumstances one share of Common Stock or equivalent value (as determined by the Committee).
Subsidiary means (i) in the case of a corporation, any corporation of which the Company directly or indirectly owns shares representing 50% or more of the combined voting power of the shares of all classes or series of capital stock of such corporation which have the right to vote generally on matters submitted to a vote of the shareholders of such corporation, (ii) in the case of a partnership or other business entity not organized as a corporation, any such business entity of which the Company directly or indirectly owns 50% or more of the voting, capital, or profits interests (whether in the form of partnership interests, membership interests or otherwise), and (iii) any other corporation, partnership or other entity that is a subsidiary of the Company within the meaning of Rule 405 promulgated by the Securities and Exchange Commission under the Securities Act of 1933, as amended.
Ten Percent Shareholder means a person owning shares possessing more than ten percent of the total combined voting power of all classes of shares of the Company, any subsidiary corporation (within the
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meaning of Section 424(f) of the Code), or parent corporation (within the meaning of Section 424(f) of the Code).
4. | Eligibility. |
a. | Employees. All Employees are eligible for the grant of Employee Awards under this Plan in the discretion of the Committee. |
b. | Directors. Nonemployee Directors are eligible for the grant of Director Awards under this Plan. |
5. | Common Stock Available for Awards. Subject to the provisions of Paragraph 17 hereof, no Award shall be granted if it shall result in the aggregate number of shares of Common Stock issued under the Plan plus the number of shares of Common Stock covered by or subject to Awards then outstanding under this Plan (after giving effect to the grant of the Award in question) to exceed 70,000,000. No more than 40,000,000 shares of Common Stock shall be available for Incentive Stock Options. No more than 40,000,000 shares of Common Stock shall be available for Stock Awards. All such share limits in this Paragraph are inclusive of any Awards under Prior Plans which remain outstanding at the date the Plan becomes effective. |
The number of shares of Common Stock that are the subject of Awards under this Plan or the Prior Plans that are forfeited or terminated, expire unexercised, are settled in cash in lieu of Common Stock or in a manner such that all or some of the shares covered by an Award are not issued to a Participant or are exchanged for Awards that do not involve Common Stock, shall again immediately become available for Awards hereunder. If the Grant Price or other purchase price of any Option or other Award granted under the Plan or the Prior Plans is satisfied by tendering shares of Common Stock to the Company or by forfeiture or cancellation of a portion of the Option or other Award, or if the tax withholding obligation resulting from the settlement of any such Option or other Award is satisfied by tendering or withholding shares of Common Stock or by forfeiture or cancellation of a portion of the Option or other Award, only the number of shares of Common Stock issued net of the shares of Common Stock tendered, withheld, forfeited, or cancelled shall be deemed delivered for purposes of determining usage of shares against the maximum number of shares of Common Stock available for delivery under the Plan or any sublimit set forth above. Shares of Common Stock delivered under the Plan as an Award or in settlement of an Award issued or made (a) upon the assumption, substitution, conversion, or replacement of outstanding awards under a plan or arrangement of an entity acquired in a merger or other acquisition or (b) as a post-transaction grant under such a plan or arrangement of an acquired entity shall not reduce or be counted against the maximum number of shares of Common Stock available for delivery under the Plan, to the extent that the exemption for transactions in connection with mergers and acquisitions from the shareholder approval requirements of the New York Stock Exchange for equity compensation plans applies. The Committee may from time to time adopt and observe such rules and procedures concerning the counting of shares against the Plan maximum or any sublimit as it may deem appropriate, including rules more restrictive than those set forth above to the extent necessary to satisfy the requirements of any national stock exchange on which the Common Stock is listed or any applicable regulatory requirement. The Board and the appropriate officers of the Company are authorized to take from time to time whatever actions are necessary, and to file any required documents with governmental authorities, stock exchanges, and transaction reporting systems to ensure that shares of Common Stock are available for issuance pursuant to Awards.
6. | Administration. |
a. | This Plan shall be administered by the Committee, except as otherwise provided herein. |
b. | Subject to the provisions hereof, the Committee shall have full and exclusive power and authority to administer this Plan and to take all actions that are specifically contemplated hereby or are necessary or appropriate in connection with the administration hereof. The Committee shall also have full and exclusive power to interpret this Plan and to adopt such rules, regulations, and guidelines for carrying |
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out this Plan as it may deem necessary or proper. The Committee may, in its discretion, provide for the extension of the exercisability of an Employee Award, accelerate the vesting or exercisability of an Employee Award, eliminate or make less restrictive any restrictions applicable to an Employee Award, waive any restriction or other provision of this Plan (insofar as such provision relates to Employee Awards) or an Employee Award, or otherwise amend or modify an Employee Award in any manner that is either (i) not adverse to the Participant to whom such Employee Award was granted (including in a manner which could result in accelerated or additional tax under Section 409A of the Code) or (ii) consented to by such Participant. Notwithstanding anything herein to the contrary, without the prior approval of the Companys shareholders, Options or SARs issued under the Plan will not be repriced, replaced, or regranted through cancellation or by decreasing the exercise price of a previously granted Option or SAR, except as expressly provided by the adjustment provisions of Paragraph 17. The Committee may correct any defect or supply any omission or reconcile any inconsistency in this Plan or in any Award in the manner and to the extent the Committee deems necessary or desirable to further the Plan purposes. Any decision of the Committee in the interpretation and administration of this Plan shall lie within its sole and absolute discretion and shall be final, conclusive, and binding on all parties concerned. |
c. | No member of the Committee or officer of the Company to whom the Committee has delegated authority in accordance with the provisions of Paragraph 7 of this Plan shall be liable for anything done or omitted to be done by him or her, by any member of the Committee, or by any officer of the Company in connection with the performance of any duties under this Plan, except for his or her own willful misconduct or as expressly provided by statute. |
d. | Subject to Section 8(a)(v)(B), the Board shall have the same powers, duties, and authority to administer the Plan with respect to Director Awards as the Committee retains with respect to Employee Awards. |
7. | Delegation of Authority. Following the authorization of a pool of cash or shares of Common Stock to be available for Awards, the Board or the Committee may authorize a committee of one or more members of the Board, or one or more officers of the Company, to grant individual Employee Awards from such pool pursuant to such conditions or limitations as the Board or the Committee may establish consistent with Section 157(c) of the Delaware General Corporation Law, if applicable. The Committee may delegate to the Chief Executive Officer and to other employees of the Company its administrative duties under this Plan (excluding its granting authority) pursuant to such conditions or limitations as the Committee may establish. The Committee may engage or authorize the engagement of a third party administrator to carry out administrative functions under the Plan. |
8. | Employee Awards. |
a. | The Committee shall determine the type or types of Employee Awards to be made under this Plan and shall designate from time to time the Employees who are to be the recipients of such Awards. Each Employee Award may, in the discretion of the Committee, be embodied in an Employee Award Agreement, which shall contain such terms, conditions, and limitations as shall be determined by the Committee in its sole discretion and, if required by the Committee, shall be signed by the Participant to whom the Employee Award is granted and signed for and on behalf of the Company. Employee Awards may consist of those listed in this Paragraph 8(a) and may be granted singly, in combination, or in tandem. Employee Awards may also be granted in combination or in tandem with, in replacement of (subject to the last sentence of Paragraph 15), or as alternatives to, grants or rights under this Plan or any other employee plan of the Company or any of its Subsidiaries, including the plan of any acquired entity. Subject to the immediately following Clauses i. and ii., an Employee Award may provide for the grant or issuance of additional, replacement, or alternative Employee Awards upon the occurrence of specified events, including the exercise of the original Employee Award granted to a Participant. All or part of an Employee Award may be subject to conditions established by the Committee, which may |
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include, but are not limited to, continuous service with the Company and its Subsidiaries, achievement of specific business objectives, items referenced in Clause v. below, and other comparable measurements of performance. Upon the termination of employment by a Participant who is an Employee, any unexercised, deferred, unvested, or unpaid Employee Awards shall be treated as set forth in the applicable Employee Award Agreement or as otherwise specified by the Committee. Notwithstanding the foregoing, any Award that constitutes a stock right within the meaning of Section 409A of the Code shall only be granted to Participants with respect to whom the Company is an eligible issuer of service recipient stock under Section 409A of the Code. |
i. | Options. An Employee Award may be in the form of an Option, which may be an Incentive Stock Option or a Nonqualified Stock Option. The Grant Price of an Option shall be not less than the Fair Market Value of the Common Stock subject to such Option on the Grant Date, provided that in the case of an Incentive Stock Option granted to a Ten Percent Shareholder, the Grant Price shall be no less than 110 percent of the Fair Market Value of the Common Stock subject to such Option on the Grant Date. The term of the Option shall extend no more than 10 years after the Grant Date, provided that in the case of an Incentive Stock Option granted to a Ten Percent Shareholder, the term shall extend no more than five years after the Grant Date. Options may not include provisions that reload the Option upon exercise. Subject to the foregoing provisions, the terms, conditions, and limitations applicable to any Options awarded to Employees pursuant to this Plan, including the Grant Price, the term of the Options, the number of shares subject to the Option, and the date or dates upon which they become exercisable, shall be determined by the Committee. |
ii. | Stock Appreciation Rights. An Employee Award may be in the form of an SAR. On the Grant Date, the Grant Price of an SAR shall be not less than the Fair Market Value of the Common Stock subject to such SAR. The holder of an SAR granted in tandem with an Option may elect to exercise either the Option or the SAR, but not both. The exercise period for an SAR shall extend no more than 10 years after the Grant Date. SARs may not include provisions that reload the SAR upon exercise. Subject to the foregoing provisions, the terms, conditions, and limitations applicable to any SARs awarded to Employees pursuant to this Plan, including the Grant Price, the term of any SARs, and the date or dates upon which they become exercisable, shall be determined by the Committee. |
iii. | Stock Awards. An Employee Award may be in the form of a Stock Award. The terms, conditions and limitations applicable to any Stock Awards granted pursuant to this Plan shall be determined by the Committee, subject to the limitations set forth below. Any Stock Award which is not a Performance Award shall have a minimum Restriction Period of three years from the Grant Date, provided that (i) the Committee may provide for earlier vesting upon a termination of employment by reason of death, disability, layoff, retirement, or Change of Control, and (ii) such three-year minimum Restriction Period shall not apply to a Stock Award that is granted in lieu of salary or bonus. |
iv. | Cash Awards. An Employee Award may be in the form of a Cash Award. The terms, conditions, and limitations applicable to any Cash Awards granted pursuant to this Plan shall be determined by the Committee. |
v. | Performance Awards. Without limiting the type or number of Employee Awards that may be made under the other provisions of this Plan, an Employee Award may be in the form of a Performance Award. The terms, conditions and limitations applicable to any Performance Awards granted to Participants pursuant to this Plan shall be determined by the Committee, subject to the limitations set forth below. Any Stock Award granted as an Employee Award which is a Performance Award shall have a minimum Restriction Period of one year from the Grant Date, |
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provided that the Committee may provide for earlier vesting upon a termination of employment by reason of death, disability, or change in control, or with respect to Performance Awards that are not Qualified Performance Awards, upon a termination of employment by reason of layoff or retirement. The Committee shall set Performance Goals in its discretion which, depending on the extent to which they are met, will determine the value and/or amount of Performance Awards that will be paid out to the Participant and/or the portion of an Award that may be exercised. |
A. | Nonqualified Performance Awards. Performance Awards granted to Employees that are not intended to be Qualified Performance Awards, or that are Options or SARs, shall be based on achievement of such goals and be subject to such terms, conditions, and restrictions as the Committee or its delegate shall determine. |
B. |
Qualified Performance Awards. Qualified Performance Awards granted to Employees under the Plan shall be paid, vested, or otherwise deliverable solely on account of the attainment of one or more pre-established, objective Performance Goals established by the Compensation Committee prior to the earlier to occur of (x) 90 days after the commencement of the period of service to which the Performance Goal relates and (y) the lapse of 25% of the period of service (as scheduled in good faith at the time the goal is established), and in any event while the outcome is substantially uncertain. A Performance Goal is objective if a third party having knowledge of the relevant facts could determine whether the goal is met. Such a Performance Goal may be based on one or more business criteria that apply to the Employee, one or more business units, divisions, or sectors of the Company, or the Company as a whole, and if so desired by the Compensation Committee, by comparison with a peer group of companies. A Performance Goal may include one or more of the following: Increased revenue; Net income measures (including but not limited to income after capital costs and income before or after taxes); Stock price measures (including but not limited to growth measures and total shareholder return); Market share; Earnings per share (actual or targeted growth); Earnings before interest, taxes, depreciation, and amortization (EBITDA); Economic value added (EVA®); Cash flow measures (including but not limited to net cash flow and net cash flow before financing activities); Return measures (including but not limited to return on equity, return on average assets, return on capital, risk-adjusted return on capital, return on investors capital, and return on average equity); Operating measures (including operating income, funds from operations, cash from operations, after-tax operating income, sales volumes, production volumes, and production efficiency); Expense measures (including but not limited to finding and development costs, overhead cost, and general and administrative expense); Margins; Shareholder value; Total shareholder return; Reserve addition; Proceeds from dispositions; Production volumes; Refinery runs; Reserve replacement ratio; Refinery utilizations; Total market value; and Corporate values measures which may be objectively determined (including ethics compliance, environmental, and safety). |
Unless otherwise stated, such a Performance Goal need not be based upon an increase or positive result under a particular business criterion and could include, for example, maintaining the status quo or limiting economic losses (measured, in each case, by reference to specific business criteria). In interpreting Plan provisions applicable to Qualified Performance Awards, it is the intent of the Plan to conform with the standards of Section 162(m) of the Code and Treasury Regulation §1.162-27(e)(2)(i), as to grants to those Employees whose compensation is, or is likely to be, subject to Section 162(m) of the Code, and the Compensation Committee in establishing such goals and interpreting the Plan shall be guided by such provisions. Prior to the payment of any compensation based on the achievement of Performance Goals for Qualified Performance Awards, the Compensation Committee must certify in writing that applicable Performance Goals and any of the material |
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terms thereof were, in fact, satisfied. Subject to the foregoing provisions, the terms, conditions, and limitations applicable to any Qualified Performance Awards made pursuant to this Plan shall be determined by the Compensation Committee. |
b. | Notwithstanding anything to the contrary contained in this Plan, the following limitations shall apply to any Employee Awards made hereunder: |
i. | no Participant may be granted, during any calendar year, Employee Awards consisting of Options or SARs (including Options or SARs that are granted as Performance Awards) that are exercisable for or in respect of more than 5,000,000 shares of Common Stock; |
ii. | no Participant may be granted, during any calendar year, Stock Awards (including Stock Awards that are granted as Performance Awards) covering or relating to more than 4,000,000 shares of Common Stock (the limitation set forth in this clause (ii), together with the limitation set forth in clause (i) above, being hereinafter collectively referred to as the Stock Based Awards Limitations); and |
iii. | no Participant may be paid an Employee Award consisting of cash (including Cash Awards that are granted as Performance Awards) during any calendar year in excess of $10,000,000. |
9. | Director Awards. |
a. | The Board may grant Director Awards to Nonemployee Directors of the Company from time to time in accordance with this Paragraph 9. Director Awards may consist of those listed in this Paragraph 9 and may be granted singly, in combination, or in tandem. Each Director Award may, in the discretion of the Board, be embodied in a Director Award Agreement, which shall contain such terms, conditions, and limitations as shall be determined by the Board in its sole discretion and, if required by the Board, shall be signed by the Participant to whom the Director Award is granted and signed for and on behalf of the Company. |
i. | Options. A Director Award may be in the form of an Option; provided that Options granted as Director Awards are not Incentive Stock Options. The Grant Price of an Option shall be not less than the Fair Market Value of the Common Stock subject to such Option on the Grant Date. In no event shall the term of the Option extend more than 10 years after the Grant Date. Options may not include provisions that reload the option upon exercise. Subject to the foregoing provisions, the terms, conditions, and limitations applicable to any Options awarded to Participants pursuant to this Paragraph 9, including the Grant Price, the term of the Options, the number of shares subject to the Option and the date or dates upon which they become exercisable, shall be determined by the Board. |
ii. | Stock Appreciation Rights. A Director Award may be in the form of an SAR. On the Grant Date, the Grant Price of an SAR shall be not less than the Fair Market Value of the Common Stock subject to such SAR. The holder of an SAR granted in tandem with an Option may elect to exercise either the Option or the SAR, but not both. The exercise period for an SAR shall extend no more than 10 years after the Grant Date. SARs may not include provisions that reload the SAR upon exercise. Subject to the foregoing provisions, the terms, conditions, and limitations applicable to any SARs awarded to Directors pursuant to this Plan, including the Grant Price, the term of any SARs, and the date or dates upon which they become exercisable, shall be determined by the Board. |
iii. | Stock Awards. A Director Award may be in the form of a Stock Award. Any terms, conditions, and limitations applicable to any Stock Awards granted to a Nonemployee Director pursuant to |
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this Plan, including but not limited to rights to Dividend Equivalents, shall be determined by the Board. |
iv. | Performance Awards. Without limiting the type or number of Director Awards that may be made under the other provisions of this Plan, a Director Award may be in the form of a Performance Award. Any additional terms, conditions, and limitations applicable to any Performance Awards granted to a Nonemployee Director pursuant to this Plan shall be determined by the Board. The Board shall set Performance Goals in its discretion which, depending on the extent to which they are met, will determine the value and/or amount of Performance Awards that will be paid out to the Nonemployee Director. |
b. | Notwithstanding anything to the contrary contained in this Plan the following limitations shall apply to any Director Awards made hereunder: |
i. | no Participant may be granted, during any fiscal year, Director Awards consisting of Options or SARs (including Options or SARs that are granted as Performance Awards) that are exercisable for or in respect of more than 500,000 shares of Common Stock; and |
ii. | no Participant may be granted, during any fiscal year, Director Awards consisting of Stock Awards (including Stock Awards that are granted as Performance Awards) covering or relating to more than 200,000 shares of Common Stock. |
c. | At the discretion of the Board, Director Awards may be settled by a cash payment in an amount that the Board shall determine in its sole discretion is equal to the fair market value of such Director Awards (which, in the case of Option or SARs, may be the excess, if any, of the Fair Market Value of the Common Stock subject to such Award over Grant Price of such Award). |
d. | Each Nonemployee Director may have the option to elect to receive shares of Common Stock, including Restricted Stock or Restricted Stock Units, as prescribed by the Board, in lieu of all or part of the compensation otherwise payable by the Company to such Nonemployee Director. |
10. | Change of Control. Notwithstanding any other provisions of the Plan, including Paragraphs 8 and 9 hereof, unless otherwise expressly provided in the applicable Award Agreement, in the event of a Change of Control during a Participants employment (or service as a Nonemployee Director) with the Company or one of its Subsidiaries, followed by the termination of employment of such Participant (or separation from service of such Nonemployee Director), (i) each Award granted under this Plan to the Participant shall become immediately vested and fully exercisable and any restrictions applicable to the Award shall lapse and (ii) if the Award is an Option or SAR, shall remain exercisable until the expiration of the term of the Award or, if the Participant should die before the expiration of the term of the Award and the Award is an Incentive Stock Option, until the earlier of (a) the expiration of the term of the Incentive Stock Option or (b) two (2) years following the date of the Participants death; provided, however, that with respect to any Stock Unit or Restricted Stock Unit or other Award that constitutes a nonqualified deferred compensation plan within the meaning of Section 409A of the Code, the settlement of such Stock Unit or Restricted Stock Unit or other Award pursuant to this Section 10 shall only occur upon the Change of Control if such Change of Control constitutes a change in the ownership of the corporation, a change in effective control of the corporation or a change in the ownership of a substantial portion of the assets of the corporation, within the meaning of Section 409A(a)(2)(v) of the Code. |
11. | Non-United States Participants. The Committee may grant awards to persons outside the United States under such terms and conditions as may, in the judgment of the Committee, be necessary or advisable to comply with the laws of the applicable foreign jurisdictions and, to that end, may establish sub-plans, modified option exercise procedures, and other terms and procedures. Notwithstanding the above, the |
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Committee may not take any actions hereunder, and no Awards shall be granted, that would violate the Exchange Act, the Code, any securities law, any governing statute, or any other applicable law. |
12. | Payment of Awards. |
a. | General. Payment made to a Participant pursuant to an Award may be made in the form of cash or Common Stock, or a combination thereof, and may include such restrictions as the Committee shall determine, including, in the case of Common Stock, restrictions on transfer and forfeiture provisions. If such payment is made in the form of Restricted Stock, the Committee shall specify whether the underlying shares are to be issued at the beginning or end of the Restriction Period. In the event that shares of Restricted Stock are to be issued at the beginning of the Restriction Period, the certificates evidencing such shares (to the extent that such shares are so evidenced) shall contain appropriate legends and restrictions that describe the terms and conditions of the restrictions applicable thereto. |
b. | Deferral. With the approval of the Committee and in a manner which is intended to either (i) comply with Section 409A of the Code or (ii) not cause an Award to become subject to Section 409A of the Code, amounts payable in respect of Awards may be deferred and paid either in the form of installments or as a lump-sum payment. The Committee may permit selected Participants to elect to defer payments of some or all types of Awards or any other compensation otherwise payable by the Company in accordance with procedures or a plan, program, or other arrangement established by the Committee or the Board in a manner which is intended to either (i) comply with Section 409A of the Code or (ii) not cause an Award to become subject to Section 409A of the Code, and may provide that such deferred compensation may be payable in shares of Common Stock. Any deferred payment pursuant to an Award, whether elected by the Participant or specified by the Award Agreement or the terms of the Award or by the Committee, may be forfeited if and to the extent that the Award Agreement or the terms of the Award so provide. |
c. | Dividends, Earnings, and Interest. Rights to dividends or Dividend Equivalents may be extended to and made part of any Stock Award, subject to such terms, conditions, and restrictions as the Committee may establish. The Committee may also establish rules and procedures for the crediting of interest or other earnings on deferred cash payments and Dividend Equivalents for Stock Awards. |
d. | Substitution of Awards. Subject to Paragraphs 15 and 17, at the discretion of the Committee, a Participant who is an Employee may be offered an election to substitute an Employee Award Award for another Employee Award or Employee Awards of the same or different type, provided that, without the Participants consent, such substitution may not be offered in a manner which would result in accelerated or additional tax to the Participant pursuant to Section 409A of the Code. |
e. | Cash-out of Awards. At the discretion of the Committee, an Award may be settled by a cash payment in an amount that the Board shall determine in its sole discretion is equal to the fair market value of such Award (which, in the case of an Option or SAR, may be the excess, if any, of the Fair Market Value of the Common Stock subject to such Award over Grant Price of such Award). |
13. | Option Exercise. The Grant Price shall be paid in full at the time of exercise in cash or, if permitted by the Committee and elected by the optionee, the optionee may purchase such shares by means of tendering Common Stock or surrendering another Award valued at Fair Market Value on the date of exercise, or any combination thereof. The Committee shall determine acceptable methods for Participants who are Employees to tender Common Stock or other Employee Awards. The Committee may provide for procedures to permit the exercise or purchase of such Awards by use of the proceeds to be received from the sale of Common Stock issuable pursuant to an Award. Unless otherwise provided in the applicable Award Agreement, in the event the Committee allows shares of Restricted Stock to be tendered as consideration for the exercise of an Option, a number of the shares issued upon the exercise of the Option, equal to the number of shares of Restricted Stock used as consideration therefor, shall be subject to the same restrictions |
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as the Restricted Stock so submitted as well as any additional restrictions that may be imposed by the Committee. The Committee may also provide that the option may be exercised by a net-share settlement method for exercising outstanding nonqualified stock options, whereby the exercise price thereof and/or any minimum required tax withholding thereon are satisfied by withholding from the delivery of the shares as to which such option is exercised a number of shares having a fair market value equal to the applicable exercise price and/or the amount of any minimum required tax withholding, canceling such withheld number, and delivering the remainder. The Committee may adopt additional rules and procedures regarding the exercise of Options from time to time, provided that such rules and procedures are not inconsistent with the provisions of this Paragraph 13. |
An optionee desiring to pay the Grant Price of an Option by tendering Common Stock using the method of attestation may, subject to any such conditions and in compliance with any such procedures as the Committee may adopt, do so by attesting to the ownership of Common Stock of the requisite value in which case the Company shall issue or otherwise deliver to the optionee upon such exercise a number of shares of Common Stock subject to the Option equal to the result obtained by dividing (a) the excess of the aggregate Fair Market Value of the shares of Common Stock subject to the Option for which the Option (or portion thereof) is being exercised over the Grant Price payable in respect of such exercise by (b) the Fair Market Value per share of Common Stock subject to the Option, and the optionee may retain the shares of Common Stock the ownership of which is attested.
14. | Taxes. The Company or its designated third party administrator shall have the right to deduct applicable taxes from any Employee Award payment and withhold, at the time of delivery or vesting of cash or shares of Common Stock under this Plan, an appropriate amount of cash or number of shares of Common Stock or a combination thereof for payment of taxes or other amounts required by law or to take such other action as may be necessary in the opinion of the Company to satisfy all obligations for withholding of such taxes. The Committee may also permit withholding to be satisfied by the transfer to the Company of shares of Common Stock theretofore owned by the holder of the Employee Award with respect to which withholding is required. If shares of Common Stock are used to satisfy tax withholding, such shares shall be valued based on the Fair Market Value when the tax withholding is required to be made. The Committee may provide for loans, to the extent not otherwise prohibited by law (including, without limitation, the Sarbanes-Oxley Act of 2002), on either a short term or demand basis, from the Company to a Participant who is an Employee to permit the payment of taxes required by law. |
15. | Amendment, Modification, Suspension, or Termination of the Plan. The Board may amend, modify, suspend, or terminate this Plan for the purpose of meeting or addressing any changes in legal requirements or for any other purpose permitted by law, except that (i) no amendment or alteration that would adversely affect the rights of any Participant under any Award previously granted to such Participant shall be made without the consent of such Participant and (ii) no amendment or alteration shall be effective prior to its approval by the shareholders of the Company to the extent such approval is required by applicable legal requirements or the applicable requirements of the securities exchange on which the Companys Common Stock is listed. Notwithstanding anything herein to the contrary, without the prior approval of the Companys shareholders, Options or SARs issued under the Plan will not be repriced, replaced, or regranted through cancellation or by decreasing the Grant Price of a previously granted Option or SAR except as expressly provided by the adjustment provisions of Paragraph 17. |
16. | Assignability. Unless otherwise determined by the Committee and provided in an Award Agreement or the terms of an Award, no Award or any other benefit under this Plan shall be assignable or otherwise transferable except by will, by beneficiary designation, or by the laws of descent and distribution or pursuant to a qualified domestic relations order as defined by the Code or Title I of the Employee Retirement Income Securities Act, or the rules thereunder. In the event that a beneficiary designation conflicts with an assignment by will or the laws of descent and distribution, the beneficiary designation will prevail. The Committee may prescribe and include in applicable Award Agreements or the terms of the |
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Award other restrictions on transfer. Any attempted assignment of an Award or any other benefit under this Plan in violation of this Paragraph 16 shall be null and void. |
17. | Adjustments. |
a. | The existence of outstanding Awards shall not affect in any manner the right or power of the Company or its shareholders to make or authorize any or all adjustments, recapitalizations, reorganizations, or other changes in the capital stock of the Company or its business or any merger or consolidation of the Company, or any issue of bonds, debentures, preferred or prior preference stock (whether or not such issue is prior to, on a parity with or junior to the existing Common Stock), or the dissolution or liquidation of the Company, or any sale or transfer of all or any part of its assets or business, or any other corporate act or proceeding of any kind, whether or not of a character similar to that of the acts or proceedings enumerated above. |
b. | In the event of any subdivision or consolidation of outstanding shares of Common Stock, declaration of a dividend payable in shares of Common Stock or other stock split, then (i) the number and kind of shares of Common Stock or other securities reserved under this Plan and the number of shares of Common Stock available for issuance pursuant to specific types of Awards as described in Paragraph 5, (ii) the number and kind of shares of Common Stock or other securities covered by outstanding Awards, (iii) the Grant Price or other price in respect of such Awards, (iv) the appropriate Fair Market Value and other price determinations for such Awards, and (v) the Stock Based Awards Limitations shall each be proportionately adjusted by the Board as the Board deems appropriate, in its sole discretion, to reflect such transaction. In the event of any other recapitalization or capital reorganization of the Company, any consolidation or merger of the Company with another corporation or entity, the adoption by the Company of any plan of exchange affecting Common Stock or any distribution to holders of Common Stock of securities or property (including cash dividends that the Board determines are not in the ordinary course of business but excluding normal cash dividends or dividends payable in Common Stock), the Board shall make such adjustments as it determines, in its sole discretion, appropriate to (x) the number and kind of shares of Common Stock or other securities reserved under this Plan and the number of shares of Common Stock available for issuance pursuant to specific types of Awards as described in Paragraph 5 and (y)(i) the number and kind of shares of Common Stock or other securities covered by Awards, (ii) the Grant Price or other price in respect of such Awards, (iii) the appropriate Fair Market Value and other price determinations for such Awards, and (iv) the Stock Based Awards Limitations to reflect such transaction. In the event of a corporate merger, consolidation, acquisition of assets or stock, separation, reorganization, or liquidation, the Board shall be authorized (x) to assume under the Plan previously issued compensatory awards, or to substitute new Awards for previously issued compensatory awards, including Awards, as part of such adjustment; (y) to cancel Awards that are Options or SARs and give the Participants who are the holders of such Awards notice and opportunity to exercise for 15 days prior to such cancellation; or (z) to cancel any such Awards and to deliver to the Participants cash in an amount that the Board shall determine in its sole discretion is equal to the fair market value of such Awards on the date of such event, which in the case of Options or SARs shall be the excess, if any, of the Fair Market Value of Common Stock on such date over the Grant Price of such Award. |
c. | Notwithstanding the foregoing: (i) any adjustments made pursuant to Section 17 to Awards that are considered deferred compensation within the meaning of Section 409A of the Code shall be made in a manner which is intended to not result in accelerated or additional tax to a Participant pursuant to Section 409A of the Code; (ii) any adjustments made pursuant to Section 17 to Awards that are not considered deferred compensation subject to Section 409A of the Code shall be made in such a manner intended to ensure that after such adjustment, the Awards either (A) continue not to be subject to Section 409A of the Code or (B) do not result in accelerated or additional tax to a Participant pursuant to Section 409A of the Code; and (iii) in any event, neither the Committee nor the Board shall |
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have the authority to make any adjustments pursuant to Section 17 to the extent the existence of such authority would cause an Award that is not intended to be subject to Section 409A of the Code at the Grant Date to be subject thereto as of the Grant Date. |
18. | Restrictions. No Common Stock or other form of payment shall be issued with respect to any Award unless the Company shall be satisfied based on the advice of its counsel that such issuance will be in compliance with applicable federal and state securities laws. Certificates evidencing shares of Common Stock delivered under this Plan (to the extent that such shares are so evidenced) may be subject to such stop transfer orders and other restrictions as the Committee may deem advisable under the rules, regulations, and other requirements of the Securities and Exchange Commission, any securities exchange or transaction reporting system upon which the Common Stock is then listed or to which it is admitted for quotation and any applicable federal or state securities law. The Committee may cause a legend or legends to be placed upon such certificates (if any) to make appropriate reference to such restrictions. |
19. | Unfunded Plan. This Plan shall be unfunded. Although bookkeeping accounts may be established with respect to Participants under this Plan, any such accounts shall be used merely as a bookkeeping convenience, including bookkeeping accounts established by a third party administrator retained by the Company to administer the Plan. The Company shall not be required to segregate any assets for purposes of this Plan or Awards hereunder, nor shall the Company, the Board or the Committee be deemed to be a trustee of any benefit to be granted under this Plan. Any liability or obligation of the Company to any Participant with respect to an Award under this Plan shall be based solely upon any contractual obligations that may be created by this Plan and any Award Agreement or the terms of the Award, and no such liability or obligation of the Company shall be deemed to be secured by any pledge or other encumbrance on any property of the Company. Neither the Company nor the Board nor the Committee shall be required to give any security or bond for the performance of any obligation that may be created by this Plan. |
20. | Right to Employment. Nothing in the Plan or an Award Agreement shall interfere with or limit in any way the right of the Company or its Subsidiaries to terminate any Participants employment or other service relationship at any time, or confer upon any Participant any right to continue in the capacity in which he or she is employed or otherwise serves the Company or its Subsidiaries. |
21. | Successors. All obligations of the Company under the Plan with respect to Awards granted hereunder shall be binding on any successor to the Company, whether the existence of such successor is the result of a direct or indirect purchase, merger, consolidation, or otherwise, of all or substantially all of the business and/or assets of the Company. |
22. | Governing Law. This Plan and all determinations made and actions taken pursuant hereto, to the extent not otherwise governed by mandatory provisions of the Code or the securities laws of the United States, shall be governed by and construed in accordance with the laws of the State of Delaware. |
23. | Section 409A. It is the intention of the Company that Awards granted under the Plan either (i) shall not be nonqualified deferred compensation subject to Section 409A of the Code, or (ii) shall meet the requirements of Section 409A of the Code such that no Participant shall be subject to accelerated or tax pursuant to Section 409A of the Code in respect thereof, and the Plan and the terms and conditions of all Awards shall be interpreted accordingly. Notwithstanding any other provision of the Plan to the contrary, any payments (whether in cash, shares of Common Stock, or other property) with respect to any Award that constitutes nonqualified deferred compensation subject to Section 409A of the Code, to be made upon a Participants termination of employment shall be made no earlier than (A) the first day of the seventh month following the Participants separation from service (within the meaning of Section 409A of the Code) and (B) the Participants death if at the time of such termination of employment the Participant is a specified employee, within the meaning of Section 409A of the Code (as determined by the Company in accordance with its uniform policy with respect to all arrangements subject to Section 409A of the Code). |
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24. | Effectiveness and Term. The Plan will be submitted to the shareholders of the Company for approval at the 2009 annual meeting of the shareholders, and the effectiveness of the Plan shall be subject to such approval. No Award shall be made under the Plan ten years or more after such approval. Notwithstanding anything herein to the contrary, any and all outstanding awards granted under the Prior Plans shall continue to be outstanding and shall be subject to the appropriate terms of the Prior Plan under which such award was granted and as are in effect as of the date this Plan is effective. |
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Attachment A
Change of Control
The following definitions apply to the Change of Control provision in Paragraph 10 of the foregoing 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 at the time of determination.
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% 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 Persons 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 at the time of determination) such securities or otherwise has the right to vote or dispose of such securities; |
b. | such Person or any of such Persons 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 Persons 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 Persons Affiliates or Associates (i) has any agreement, arrangement or understanding (whether or not in writing) with any other Person (or any Affiliate or Associate 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 Persons 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 shareholder list, to call a shareholder meeting, or to inspect corporate 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.
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Board shall have the meaning set forth in the foregoing Plan.
Change of Control shall mean any of the following occurring on or after May 13, 2009:
a. | any Person (other than an Exempt Person) shall become the Beneficial Owner of 20% or more of the shares of Common Stock then outstanding or 20% 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% or more of the shares of Common Stock or 20% 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 May 13, 2009, 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 May 13, 2009 whose election, or nomination for election by the Companys 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% or more of the then outstanding shares of common stock of the corporation, or common equity securities of an entity other than a corporation, resulting from such reorganization, merger, or consolidation and the combined voting power of the then outstanding Voting Stock of such corporation or other entity 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% or more of the Common Stock then outstanding or 20% or more of the combined voting power of the Voting Stock of the Company then outstanding) beneficially owns, directly or indirectly, 20% or more of the then outstanding shares of common stock of the corporation, or common equity securities of an entity other than a corporation, resulting from such reorganization, merger, or consolidation or the combined voting power of the then outstanding Voting Stock of such corporation or other entity, and (iii) at least a majority of the members of the board of directors of the corporation, or the body which is most analogous to the board of directors of a corporation if not a 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 or other entity, with respect to which, following such sale or other disposition, (A) 50% or more of the then outstanding shares of common stock of such corporation, or common equity securities |
A-16
of an entity other than a corporation, and the combined voting power of the Voting Stock of such corporation or other entity 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% or more of the Common Stock then outstanding or 20% or more of the combined voting power of the Voting Stock of the Company then outstanding) beneficially owns, directly or indirectly, 20% or more of the then outstanding shares of common stock of such corporation, or common equity securities of an entity other than a corporation, and the combined voting power of the then outstanding Voting Stock of such corporation or other entity, and (C) at least a majority of the members of the board of directors of such corporation, or the body which is most analogous to the board of directors of a corporation if not a 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 have the meaning set forth in the foregoing Plan.
Company shall have the meaning set forth in the foregoing Plan.
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 May 13, 2009 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% or more of the then outstanding shares of Common Stock or additional Voting Stock representing 1% 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% or more of the then outstanding shares of Common Stock or Voting Stock representing 1% 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, (i) 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, or to appoint by contract, directors of such
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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) and (ii) with respect to an entity which is not a corporation, all securities of any class or series that are entitled to vote generally in the election of, or to appoint by contract, members of the body which is most analogous to the board of directors of a corporation.
A-18
DIRECTIONS TO THE ANNUAL MEETING OF STOCKHOLDERS
FROM DOWNTOWN HOUSTON
Omni Houston Hotel at Westside
13210 Katy Freeway
Houston, Texas 77079
(281) 558-8338
| Take I-10 West 3 miles past Sam Houston Tollway. |
| Exit Eldridge Parkway, Exit 753A. |
| Turn right (north) on Eldridge Parkway. |
| The hotel will be immediately on your left. |
CONOCOPHILLIPS | Stockholder Meeting to be held on 05/13/09 | |||||
** IMPORTANT NOTICE ** |
Proxy Materials Available | |||||
Regarding the Availability of Proxy Materials
You are receiving this communication because you hold shares in the above company, and the materials you should review before you cast your vote are now available. |
Notice and Proxy Statement Annual Report | |||||
This communication presents only an overview of the more complete proxy materials that are available to you on the Internet. We encourage you to access and review all of the important information contained in the proxy materials before voting.
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PROXY MATERIALS - VIEW OR RECEIVE You can choose to view the materials online or receive a paper or e-mail copy. There is NO charge for requesting a copy. Requests, instructions and other inquiries will NOT be forwarded to your investment advisor.
To facilitate timely delivery please make the request as instructed below on or before 04/29/09.
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600 N. DAIRY ASHFORD MCLEAN BUILDING #3025 HOUSTON, TX 77079 |
HOW TO VIEW MATERIALS VIA THE INTERNET Have the 12 Digit Control Number available and visit: www.proxyvote.com
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HOW TO REQUEST A COPY OF MATERIALS 1) BY INTERNET - www.proxyvote.com 2) BY TELEPHONE - 1-800-579-1639 3) BY E-MAIL* - sendmaterial@proxyvote.com
*If requesting materials by e-mail, please send a blank e-mail with the 12 Digit Control Number (located on the following page) in the subject line.
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See the Reverse Side for Meeting Information and Instructions on How to Vote
Voting items |
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THE BOARD OF DIRECTORS RECOMMENDS A VOTE FOR ITEMS 1, 2 AND 3. |
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1. |
ELECTION OF DIRECTORS |
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Nominees: |
2. |
Proposal to ratify appointment of Ernst & Young LLP as ConocoPhillips independent registered public accounting firm for 2009. |
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1a. |
Richard L. Armitage |
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1b. |
Richard H. Auchinleck |
3. |
Proposal to Approve 2009 Omnibus Stock and Performance Incentive Plan. |
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1c. |
James E. Copeland, Jr. |
THE BOARD OF DIRECTORS RECOMMENDS A VOTE AGAINST ITEMS 4-9. |
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1d. |
Kenneth M. Duberstein |
4. |
Universal Health Care Principles |
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1e. |
Ruth R. Harkin |
5. |
Advisory Vote on Executive Compensation |
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1f. |
Harold W. McGraw III |
6. |
Political Contributions |
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1g. |
James J. Mulva |
7. |
Greenhouse Gas Reduction |
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1h. |
Harald J. Norvik |
8. |
Oil Sands Drilling |
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1i. |
William K. Reilly |
9. |
Director Qualifications |
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1j. |
Bobby S. Shackouls |
10. |
In its discretion, upon such other matters that may properly come before the meeting or any adjournment or adjournments thereof. |
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1k. |
Victoria J. Tschinkel |
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1l. |
Kathryn C. Turner |
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1m. |
William E. Wade, Jr. |
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600 N. DAIRY ASHFORD MCLEAN BUILDING #3025 HOUSTON, TX 77079 |
VOTE BY INTERNET - www.proxyvote.com | |
Use the Internet to transmit your voting instructions and for electronic delivery of information up until the cut-off date. Have your Voting Direction card in hand when you access the web site and follow the instructions to obtain your records and to create an electronic voting instruction form. | ||
ELECTRONIC DELIVERY OF FUTURE STOCKHOLDER COMMUNICATIONS | ||
If you would like to reduce the costs incurred by ConocoPhillips in mailing proxy materials, you can consent to receiving all future proxy statements, Voting Direction cards and annual reports electronically via e-mail or the Internet. To sign up for electronic delivery, please follow the instructions above to vote using the Internet and, when prompted, indicate that you agree to receive or access stockholder communications electronically in future years. | ||
VOTE BY PHONE - 1-800-690-6903 | ||
Use any touch-tone telephone to transmit your voting instructions up until 11:59 P.M. Eastern Time the day before the cut-off date or meeting date. Have your Voting Direction card in hand when you call and then follow the instructions. | ||
VOTE BY MAIL | ||
Mark, sign and date your Voting Direction card and return it in the postage-paid envelope we have provided or return it to ConocoPhillips, c/o Broadridge, 51 Mercedes Way, Edgewood, NY 11717. |
TO VOTE, MARK BLOCKS BELOW IN BLUE OR BLACK INK AS FOLLOWS: |
CONOP1 |
KEEP THIS PORTION FOR YOUR RECORDS |
THIS VOTING DIRECTION CARD IS VALID ONLY WHEN SIGNED AND DATED. | DETACH AND RETURN THIS PORTION ONLY | |||
CONOCOPHILLIPS | ||||||||||||||||||||||||||||||||
THE BOARD OF DIRECTORS RECOMMENDS A VOTE FOR ITEMS 1, 2 AND 3. |
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Vote On Directors | For | Against | Abstain | |||||||||||||||||||||||||||||
1 | ELECTION OF DIRECTORS |
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Nominees: | ||||||||||||||||||||||||||||||||
1a. Richard L. Armitage |
¨ | ¨ | ¨ | Vote On Proposals | For | Against | Abstain | |||||||||||||||||||||||||
1b. Richard H. Auchinleck |
¨ |
¨ |
¨ |
2 |
Proposal to ratify appointment of Ernst & Young LLP as ConocoPhillips independent registered public accounting firm for 2009. |
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¨ |
¨ |
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1c. James E. Copeland, Jr. |
¨ | ¨ | ¨ | 3 |
Proposal to Approve 2009 Omnibus Stock and Performance Incentive Plan. |
¨ | ¨ | ¨ | ||||||||||||||||||||||||
1d. Kenneth M. Duberstein |
¨ |
¨ |
¨ |
THE BOARD OF DIRECTORS RECOMMENDS A VOTE AGAINST ITEMS 4-9. |
¨ |
¨ |
¨ |
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1e. Ruth R. Harkin |
¨ |
¨ |
¨ |
4. |
Universal Health Care Principles |
¨ |
¨ |
¨ |
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1f. Harold W. McGraw III |
¨ | ¨ | ¨ | 5. |
Advisory Vote on Executive Compensation |
¨ | ¨ | ¨ | ||||||||||||||||||||||||
1g. James J. Mulva |
¨ | ¨ | ¨ | 6. |
Political Contributions |
¨ | ¨ | ¨ | ||||||||||||||||||||||||
1h. Harald J. Norvik |
¨ | ¨ | ¨ | 7. |
Greenhouse Gas Reduction |
¨ | ¨ | ¨ | ||||||||||||||||||||||||
1i. William K. Reilly |
¨ | ¨ | ¨ | 8. |
Oil Sands Drilling |
¨ | ¨ | ¨ | ||||||||||||||||||||||||
1j. Bobby S. Shackouls |
¨ | ¨ | ¨ | 9. |
Director Qualifications |
¨ | ¨ | ¨ | ||||||||||||||||||||||||
1k. Victoria J. Tschinkel |
¨ | ¨ | ¨ | 10. |
In its discretion, upon such other matters that may properly come before the meeting or any adjournment or adjournments thereof. |
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1l. Kathryn C. Turner |
¨ | ¨ | ¨ | |||||||||||||||||||||||||||||
1m. William E. Wade, Jr. |
¨ | ¨ | ¨ | |||||||||||||||||||||||||||||
Signature [PLEASE SIGN WITHIN BOX] | Date | Signature (Joint Owners) |
Date |
Important Notice Regarding the Availability of Proxy Materials for the Annual Meeting:
The Notice and Proxy Statement and Annual Report are available at www.proxyvote.com.
CONOP2 |
CONOCOPHILLIPS UK, Australia, Emden-Germany, Norway Plans | ||||||||
CONFIDENTIAL VOTING DIRECTION | ||||||||
ConocoPhillips Annual Meeting of Stockholders May 13, 2009 | ||||||||
The undersigned hereby directs that Halifax EES Trustees Limited, Trustee of the ConocoPhillips Share Incentive Plan, ConocoPhillips Overseas Stock Savings Plan (Australia, Emden-Germany or Norway), Conoco Stock Ownership Plan, Employee Share Allocation Scheme of Phillips Petroleum Company United Kingdom Limited, and/or Conoco Employee Share Ownership Plan (the Plan), vote all shares of ConocoPhillips Common Stock (described on the back of this Voting Direction card) at the ConocoPhillips Annual Meeting of Stockholders to be held at the Omni Houston Hotel at Westside, 13210 Katy Freeway, Houston, Texas, on May 13, 2009, at 9:00 a.m., Central Time, and at any adjournment thereof, in the manner indicated on the back of this card as to the matters shown and at its discretion as to any other matters that come before the meeting, all as described in the Notice and Proxy Statement.
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In order for your vote to be counted, Broadridge, the Tabulator for the Trustee, Halifax EES Trustees Limited, must receive this Voting Direction card no later than 11:59 p.m. EDT on May 6, 2009. If Broadridge, the Tabulator for the Trustee, Vanguard Fiduciary Trust Company, does not receive this Voting Direction card by 11:59 p.m. EDT on May 6, 2009, if you do not fill in any boxes on the back of this card, if you return this card unsigned, and if you do not vote by the Internet or telephone on or before May 6, 2009, any shares held in the ConocoPhillips Overseas Savings Plan (Australia, Emden-Germany or Norway) or the Employee Share Allocation Scheme of Phillips Petroleum Company United Kingdom Limited that you otherwise could have directed will be voted in the same proportion as the shares for which the Trustee has received instructions. Any such shares held in the ConocoPhillips Share Incentive Plan, the Conoco Stock Ownership Plan or the Conoco Employee Share Ownership Plan will not be voted by the Trustee.
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ConocoPhillips has acknowledged and agreed to honor the confidentiality of your voting instructions to the Trustee. The Trustee will keep your voting instructions confidential.
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This package contains your confidential Voting Direction card to instruct the Trustee of the Plan how to vote the shares of ConocoPhillips Common Stock described on the back of the card representing your interest in the Plan.
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Also enclosed is the Companys 2008 Annual Report along with the Notice and Proxy Statement for the 2009 Annual Meeting. Please use these documents to help you decide how to direct the way the Trustee (Halifax EES Trustees Limited) should vote.
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Address Changes/Comments: |
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(If you noted any Address Changes/Comments above, please mark corresponding box on the reverse side.) | ||||||||
CONTINUED AND TO BE SIGNED ON REVERSE SIDE
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600 N. DAIRY ASHFORD MCLEAN BUILDING #3025 HOUSTON, TX 77079 |
VOTE BY INTERNET - www.proxyvote.com | |
Use the Internet to transmit your voting instructions and for electronic delivery of information up until the cut-off date. Have your Voting Direction card in hand when you access the web site and follow the instructions to obtain your records and to create an electronic voting instruction form. | ||
ELECTRONIC DELIVERY OF FUTURE STOCKHOLDER COMMUNICATIONS | ||
If you would like to reduce the costs incurred by ConocoPhillips in mailing proxy materials, you can consent to receiving all future proxy statements, Voting Direction cards and annual reports electronically via e-mail or the Internet. To sign up for electronic delivery, please follow the instructions above to vote using the Internet and, when prompted, indicate that you agree to receive or access stockholder communications electronically in future years. | ||
VOTE BY PHONE - 1-800-690-6903 | ||
Use any touch-tone telephone to transmit your voting instructions up until 11:59 P.M. Eastern Time the day before the cut-off date or meeting date. Have your Voting Direction card in hand when you call and then follow the instructions. | ||
VOTE BY MAIL | ||
Mark, sign and date your Voting Direction card and return it in the postage-paid envelope we have provided or return it to ConocoPhillips, c/o Broadridge, 51 Mercedes Way, Edgewood, NY 11717. |
TO VOTE, MARK BLOCKS BELOW IN BLUE OR BLACK INK AS FOLLOWS: |
CONOP3 |
KEEP THIS PORTION FOR YOUR RECORDS |
THIS VOTING DIRECTION CARD IS VALID ONLY WHEN SIGNED AND DATED. | DETACH AND RETURN THIS PORTION ONLY | |||
CONOCOPHILLIPS | ||||||||||||||||||||||||||||||||
THE BOARD OF DIRECTORS RECOMMENDS A VOTE FOR ITEMS 1, 2 AND 3. |
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Vote On Directors | For | Against | Abstain | |||||||||||||||||||||||||||||
1 | ELECTION OF DIRECTORS |
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Nominees: | ||||||||||||||||||||||||||||||||
1a. Richard L. Armitage |
¨ | ¨ | ¨ | Vote On Proposals | For | Against | Abstain | |||||||||||||||||||||||||
1b. Richard H. Auchinleck |
¨ |
¨ |
¨ |
2 |
Proposal to ratify appointment of Ernst & Young LLP as ConocoPhillips independent registered public accounting firm for 2009. |
¨ |
¨ |
¨ |
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1c. James E. Copeland, Jr. |
¨ | ¨ | ¨ | 3 |
Proposal to Approve 2009 Omnibus Stock and Performance Incentive Plan. |
¨ | ¨ | ¨ | ||||||||||||||||||||||||
1d. Kenneth M. Duberstein |
¨ |
¨ |
¨ |
THE BOARD OF DIRECTORS RECOMMENDS A VOTE AGAINST ITEMS 4-9. |
¨ |
¨ |
¨ |
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1e. Ruth R. Harkin |
¨ |
¨ |
¨ |
4. |
Universal Health Care Principles |
¨ |
¨ |
¨ |
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1f. Harold W. McGraw III |
¨ | ¨ | ¨ | 5. |
Advisory Vote on Executive Compensation |
¨ | ¨ | ¨ | ||||||||||||||||||||||||
1g. James J. Mulva |
¨ | ¨ | ¨ | 6. |
Political Contributions |
¨ | ¨ | ¨ | ||||||||||||||||||||||||
1h. Harald J. Norvik |
¨ | ¨ | ¨ | 7. |
Greenhouse Gas Reduction |
¨ | ¨ | ¨ | ||||||||||||||||||||||||
1i. William K. Reilly |
¨ | ¨ | ¨ | 8. |
Oil Sands Drilling |
¨ | ¨ | ¨ | ||||||||||||||||||||||||
1j. Bobby S. Shackouls |
¨ | ¨ | ¨ | 9. |
Director Qualifications |
¨ | ¨ | ¨ | ||||||||||||||||||||||||
1k. Victoria J. Tschinkel |
¨ | ¨ | ¨ | 10. |
In its discretion, upon such other matters that may properly come before the meeting or any adjournment or adjournments thereof. |
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1l. Kathryn C. Turner |
¨ | ¨ | ¨ | |||||||||||||||||||||||||||||
1m. William E. Wade, Jr. |
¨ | ¨ | ¨ | |||||||||||||||||||||||||||||
Signature [PLEASE SIGN WITHIN BOX] | Date | Signature (Joint Owners) |
Date |
Important Notice Regarding the Availability of Proxy Materials for the Annual Meeting:
The Notice and Proxy Statement and Annual Report are available at www.proxyvote.com.
CONOP4 |
ConocoPhillips Savings Plan and/or ConocoPhillips Store Savings Plan | ||||||||
CONFIDENTIAL FIDUCIARY VOTING DIRECTION | ||||||||
ConocoPhillips Annual Meeting of Stockholders May 13, 2009 | ||||||||
The undersigned hereby directs that Vanguard Fiduciary Trust Company, Trustee of the ConocoPhillips Savings Plan (CPSP) and ConocoPhillips Store Savings Plan (CPSSP), vote: (1) all unallocated shares of stock in the Company Stock Fund and (2) all shares of stock representing the interest of CPSP and/or CPSSP participants who fail to give voting direction at the ConocoPhillips Annual Meeting of Stockholders to be held at the Omni Houston Hotel at Westside, 13210 Katy Freeway, Houston, Texas, on May 13, 2009, at 9:00 a.m., Central Time, and at any adjournment thereof, in the manner indicated on the back of this card as to the matters shown and at its discretion as to any other matters that come before the meeting, all as described in the Notice and Proxy Statement. If Broadridge, the Tabulator for the Trustee, Vanguard Fiduciary Trust Company, does not receive this Voting Direction card by May 10, 2009 at 11:59 p.m. EDT, if you do not fill in any boxes on the back of this card, if you return this card unsigned, and if you do not vote by the Internet or telephone on or before May 10, 2009, any shares in the CPSP and/or CPSSP that you otherwise could have directed will be directed by other eligible employees who elect to direct such shares.
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Important Information - I understand that by electing to direct the Trustees vote of shares which do not represent my own part of the CPSP and/or CPSSP that I become a fiduciary of the CPSP and/or CPSSP for voting such shares; that I must act in the best interests of all participants of the CPSP and/or CPSSP when giving directions for voting shares not representing my part of the CPSP and/or CPSSP; that I have read and understand my duties as a fiduciary as they are described on pages 32 and 33 of the CPSP Employee Handbook dated January 1, 2008 and/or page 25 of the CPSSP Summary Plan Description/Prospectus dated October 3, 2003; and that I may decline to accept the responsibility of a fiduciary as to such shares by NOT completing or returning this Voting Direction card or NOT voting by Internet or telephone.
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ConocoPhillips has acknowledged and agreed to honor the confidentiality of your voting instructions to the Trustee. The Trustee will keep your voting instructions confidential.
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This package contains your confidential Voting Direction card to instruct the Trustee of the Plan how to vote the shares of ConocoPhillips common stock described on the back of the card representing your interest in the CPSP and/or CPSSP Plan. Also enclosed is the Companys 2008 Annual Report along with the Notice and Proxy Statement for the 2009 Annual Meeting. Please use these documents to help you decide how to direct the way the Trustee (Vanguard Fiduciary Trust Company) should vote.
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Address Changes/Comments: |
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(If you noted any Address Changes/Comments above, please mark corresponding box on the reverse side.) | ||||||||
CONTINUED AND TO BE SIGNED ON REVERSE SIDE
|
600 N. DAIRY ASHFORD MCLEAN BUILDING #3025 HOUSTON, TX 77079 |
VOTE BY INTERNET - www.proxyvote.com | |
Use the Internet to transmit your voting instructions and for electronic delivery of information up until the cut-off date. Have your Voting Direction card in hand when you access the web site and follow the instructions to obtain your records and to create an electronic voting instruction form. | ||
ELECTRONIC DELIVERY OF FUTURE STOCKHOLDER COMMUNICATIONS | ||
If you would like to reduce the costs incurred by ConocoPhillips in mailing proxy materials, you can consent to receiving all future proxy statements, Voting Direction cards and annual reports electronically via e-mail or the Internet. To sign up for electronic delivery, please follow the instructions above to vote using the Internet and, when prompted, indicate that you agree to receive or access stockholder communications electronically in future years. | ||
VOTE BY PHONE - 1-800-690-6903 | ||
Use any touch-tone telephone to transmit your voting instructions up until 11:59 P.M. Eastern Time the day before the cut-off date or meeting date. Have your Voting Direction card in hand when you call and then follow the instructions. | ||
VOTE BY MAIL | ||
Mark, sign and date your Voting Direction card and return it in the postage-paid envelope we have provided or return it to ConocoPhillips, c/o Broadridge, 51 Mercedes Way, Edgewood, NY 11717. |
TO VOTE, MARK BLOCKS BELOW IN BLUE OR BLACK INK AS FOLLOWS: |
CONOP5 |
KEEP THIS PORTION FOR YOUR RECORDS |
THIS VOTING DIRECTION CARD IS VALID ONLY WHEN SIGNED AND DATED. | DETACH AND RETURN THIS PORTION ONLY | |||
CONOCOPHILLIPS | ||||||||||||||||||||||||||||||||
THE BOARD OF DIRECTORS RECOMMENDS A VOTE FOR ITEMS 1, 2 AND 3. |
||||||||||||||||||||||||||||||||
Vote On Directors | For | Against | Abstain | |||||||||||||||||||||||||||||
1 | ELECTION OF DIRECTORS |
|||||||||||||||||||||||||||||||
Nominees: | ||||||||||||||||||||||||||||||||
1a. Richard L. Armitage |
¨ | ¨ | ¨ | Vote On Proposals | For | Against | Abstain | |||||||||||||||||||||||||
1b. Richard H. Auchinleck |
¨ |
¨ |
¨ |
2 |
Proposal to ratify appointment of Ernst & Young LLP as ConocoPhillips independent registered public accounting firm for 2009. |
¨ |
¨ |
¨ |
||||||||||||||||||||||||
1c. James E. Copeland, Jr. |
¨ | ¨ | ¨ | 3 |
Proposal to Approve 2009 Omnibus Stock and Performance Incentive Plan. |
¨ | ¨ | ¨ | ||||||||||||||||||||||||
1d. Kenneth M. Duberstein |
¨ |
¨ |
¨ |
THE BOARD OF DIRECTORS RECOMMENDS A VOTE AGAINST ITEMS 4-9. |
¨ |
¨ |
¨ |
|||||||||||||||||||||||||
1e. Ruth R. Harkin |
¨ |
¨ |
¨ |
4. |
Universal Health Care Principles |
¨ |
¨ |
¨ |
||||||||||||||||||||||||
1f. Harold W. McGraw III |
¨ | ¨ | ¨ | 5. |
Advisory Vote on Executive Compensation |
¨ | ¨ | ¨ | ||||||||||||||||||||||||
1g. James J. Mulva |
¨ | ¨ | ¨ | 6. |
Political Contributions |
¨ | ¨ | ¨ | ||||||||||||||||||||||||
1h. Harald J. Norvik |
¨ | ¨ | ¨ | 7. |
Greenhouse Gas Reduction |
¨ | ¨ | ¨ | ||||||||||||||||||||||||
1i. William K. Reilly |
¨ | ¨ | ¨ | 8. |
Oil Sands Drilling |
¨ | ¨ | ¨ | ||||||||||||||||||||||||
1j. Bobby S. Shackouls |
¨ | ¨ | ¨ | 9. |
Director Qualifications |
¨ | ¨ | ¨ | ||||||||||||||||||||||||
1k. Victoria J. Tschinkel |
¨ | ¨ | ¨ | 10. |
In its discretion, upon such other matters that may properly come before the meeting or any adjournment or adjournments thereof. |
|||||||||||||||||||||||||||
1l. Kathryn C. Turner |
¨ | ¨ | ¨ | |||||||||||||||||||||||||||||
1m. William E. Wade, Jr. |
¨ | ¨ | ¨ | |||||||||||||||||||||||||||||
Signature [PLEASE SIGN WITHIN BOX] | Date | Signature (Joint Owners) |
Date |
Important Notice Regarding the Availability of Proxy Materials for the Annual Meeting:
The Notice and Proxy Statement and Annual Report are available at www.proxyvote.com.
CONOP6 |
Compensation and Benefits Arrangements Stock Trust CONFIDENTIAL FIDUCIARY VOTING DIRECTION CONOCOPHILLIPS ANNUAL MEETING OF STOCKHOLDERS MAY 13, 2009 | ||||||||
The undersigned hereby directs that Vanguard Fiduciary Trust Company, Trustee of the ConocoPhillips Compensation and Benefits Arrangements Stock Trust (CBT), vote all shares of ConocoPhillips Common Stock (described on the back of this Voting Direction card) at the ConocoPhillips Annual Meeting of Stockholders to be held at the Omni Houston Hotel at Westside, 13210 Katy Freeway, Houston, Texas, on May 13, 2009, at 9:00 a.m., Central Time, and at any adjournment thereof, in the manner indicated on the back of this card as to the matters shown and at its discretion as to any other matters that come before the meeting, all as described in the Notice and Proxy Statement.
| ||||||||
I understand that by electing to direct the Trustees vote of domestic shares held in the CBT, that I become a directing fiduciary of the CBT for voting such shares; and that I may decline to accept the responsibility of a directing fiduciary as to such shares by NOT completing and returning this Voting Direction card or NOT voting by the Internet or telephone.
| ||||||||
If Broadridge, the Tabulator for the Trustee, Vanguard Fiduciary Trust Company, does not receive this card by 5:00 p.m. EDT on May 12, 2009, if you do not fill in any boxes or if you return this card unsigned, and if you do not vote by the Internet or telephone on or before May 12, 2009, the Trustee will conclusively presume that you have rejected your appointment as a directing fiduciary and any shares in the CBT that you otherwise could have directed will be directed by other eligible employees who elect to direct such shares.
| ||||||||
ConocoPhillips has acknowledged and agreed to honor the confidentiality of your voting instructions to the Trustee. The Trustee will keep your voting instructions confidential.
| ||||||||
This package contains your confidential Voting Direction card to instruct the Trustee of the Plan how to vote the shares of ConocoPhillips Common Stock described on the back of the card.
| ||||||||
Also enclosed is the Companys 2008 Annual Report along with the Notice and Proxy Statement for the 2009 Annual Meeting. Please use these documents to help you decide how to direct the way the Trustee (Vanguard Fiduciary Trust Company) should vote.
| ||||||||
Employees who direct the CBT Trustee how to vote shares held by this trust have an important voice in matters which affect ConocoPhillips.
| ||||||||
Address Changes/Comments: |
|
|||||||
|
||||||||
(If you noted any Address Changes/Comments above, please mark corresponding box on the reverse side.) | ||||||||
CONTINUED AND TO BE SIGNED ON REVERSE SIDE
|
600 N. DAIRY ASHFORD MCLEAN BUILDING #3025 HOUSTON, TX 77079 |
VOTE BY INTERNET - www.proxyvote.com | |
Use the Internet to transmit your voting instructions and for electronic delivery of information up until the cut-off date. Have your Voting Direction card in hand when you access the web site and follow the instructions to obtain your records and to create an electronic voting instruction form. | ||
ELECTRONIC DELIVERY OF FUTURE STOCKHOLDER COMMUNICATIONS | ||
If you would like to reduce the costs incurred by ConocoPhillips in mailing proxy materials, you can consent to receiving all future proxy statements, Voting Direction cards and annual reports electronically via e-mail or the Internet. To sign up for electronic delivery, please follow the instructions above to vote using the Internet and, when prompted, indicate that you agree to receive or access stockholder communications electronically in future years. | ||
VOTE BY PHONE - 1-800-690-6903 | ||
Use any touch-tone telephone to transmit your voting instructions up until 11:59 P.M. Eastern Time the day before the cut-off date or meeting date. Have your Voting Direction card in hand when you call and then follow the instructions. | ||
VOTE BY MAIL | ||
Mark, sign and date your Voting Direction card and return it in the postage-paid envelope we have provided or return it to ConocoPhillips, c/o Broadridge, 51 Mercedes Way, Edgewood, NY 11717. |
TO VOTE, MARK BLOCKS BELOW IN BLUE OR BLACK INK AS FOLLOWS: |
CONOP7 |
KEEP THIS PORTION FOR YOUR RECORDS |
THIS PROXY CARD IS VALID ONLY WHEN SIGNED AND DATED. | DETACH AND RETURN THIS PORTION ONLY | |||
CONOCOPHILLIPS | ||||||||||||||||||||||||||||||||
THE BOARD OF DIRECTORS RECOMMENDS A VOTE FOR ITEMS 1, 2 AND 3. |
||||||||||||||||||||||||||||||||
Vote On Directors | For | Against | Abstain | |||||||||||||||||||||||||||||
1 | ELECTION OF DIRECTORS |
|||||||||||||||||||||||||||||||
Nominees: | ||||||||||||||||||||||||||||||||
1a. Richard L. Armitage |
¨ | ¨ | ¨ | Vote On Proposals | For | Against | Abstain | |||||||||||||||||||||||||
1b. Richard H. Auchinleck |
¨ |
¨ |
¨ |
2 |
Proposal to ratify appointment of Ernst & Young LLP as ConocoPhillips independent registered public accounting firm for 2009. |
¨ |
¨ |
¨ |
||||||||||||||||||||||||
1c. James E. Copeland, Jr. |
¨ | ¨ | ¨ | 3 |
Proposal to Approve 2009 Omnibus Stock and Performance Incentive Plan. |
¨ | ¨ | ¨ | ||||||||||||||||||||||||
1d. Kenneth M. Duberstein |
¨ |
¨ |
¨ |
THE BOARD OF DIRECTORS RECOMMENDS A VOTE AGAINST ITEMS 4-9. |
¨ |
¨ |
¨ |
|||||||||||||||||||||||||
1e. Ruth R. Harkin |
¨ |
¨ |
¨ |
4. |
Universal Health Care Principles |
¨ |
¨ |
¨ |
||||||||||||||||||||||||
1f. Harold W. McGraw III |
¨ | ¨ | ¨ | 5. |
Advisory Vote on Executive Compensation |
¨ | ¨ | ¨ | ||||||||||||||||||||||||
1g. James J. Mulva |
¨ | ¨ | ¨ | 6. |
Political Contributions |
¨ | ¨ | ¨ | ||||||||||||||||||||||||
1h. Harald J. Norvik |
¨ | ¨ | ¨ | 7. |
Greenhouse Gas Reduction |
¨ | ¨ | ¨ | ||||||||||||||||||||||||
1i. William K. Reilly |
¨ | ¨ | ¨ | 8. |
Oil Sands Drilling |
¨ | ¨ | ¨ | ||||||||||||||||||||||||
1j. Bobby S. Shackouls |
¨ | ¨ | ¨ | 9. |
Director Qualifications |
¨ | ¨ | ¨ | ||||||||||||||||||||||||
1k. Victoria J. Tschinkel |
¨ | ¨ | ¨ | 10. |
In its discretion, upon such other matters that may properly come before the meeting or any adjournment or adjournments thereof. |
|||||||||||||||||||||||||||
1l. Kathryn C. Turner |
¨ | ¨ | ¨ | |||||||||||||||||||||||||||||
1m. William E. Wade, Jr. |
¨ | ¨ | ¨ | |||||||||||||||||||||||||||||
Signature [PLEASE SIGN WITHIN BOX] | Date | Signature (Joint Owners) |
Date |
Important Notice Regarding the Availability of Proxy Materials for the Annual Meeting:
The Notice and Proxy Statement and Annual Report are available at www.proxyvote.com.
CONOP8 |
THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS | ||||||||
ANNUAL MEETING OF STOCKHOLDERS | ||||||||
MAY 13, 2009 | ||||||||
The stockholder(s) hereby appoint(s) James J. Mulva and Janet Langford Kelly, or either of them, as proxies, each with the power to appoint his or her substitute, and hereby authorizes them to represent and to vote, as designated on the reverse side of this ballot, all of the shares of Common Stock of ConocoPhillips that the stockholder(s) is/are entitled to vote at the Annual Meeting of Stockholders to be held at 9:00 a.m., Central Time, on May 13, 2009, at the Omni Houston Hotel at Westside, 13210 Katy Freeway, Houston, Texas, and any adjournment or postponement thereof.
| ||||||||
THIS PROXY, WHEN PROPERLY EXECUTED, WILL BE VOTED AS DIRECTED BY THE STOCKHOLDER(S). IF NO SUCH DIRECTIONS ARE MADE, THIS PROXY WILL BE VOTED FOR THE ELECTION OF THE NOMINEES LISTED ON THE REVERSE SIDE FOR THE BOARD OF DIRECTORS, FOR THE PROPOSAL TO AMEND AMENDED AND RESTATED BY-LAWS AND RESTATED CERTIFICATE OF INCORPORATION TO PROVIDE FOR THE ANNUAL ELECTION OF DIRECTORS, FOR THE RATIFICATION OF THE APPOINTMENT OF ERNST & YOUNG LLP AS CONOCOPHILLIPS INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM, AND AGAINST EACH OF THE STOCKHOLDER PROPOSALS.
| ||||||||
PLEASE MARK, SIGN, DATE AND RETURN THIS PROXY CARD PROMPTLY USING THE ENCLOSED REPLY ENVELOPE
| ||||||||
Address Changes/Comments: |
|
|||||||
|
||||||||
(If you noted any Address Changes/Comments above, please mark corresponding box on the reverse side.) | ||||||||
CONTINUED AND TO BE SIGNED ON REVERSE SIDE
|
600 N. DAIRY ASHFORD MCLEAN BUILDING #3025 HOUSTON, TX 77079 |
VOTE BY INTERNET - www.proxyvote.com | |
Use the Internet to transmit your voting instructions and for electronic delivery of information up until the cut-off date. Have your Voting Direction card in hand when you access the web site and follow the instructions to obtain your records and to create an electronic voting instruction form. | ||
ELECTRONIC DELIVERY OF FUTURE STOCKHOLDER COMMUNICATIONS | ||
If you would like to reduce the costs incurred by ConocoPhillips in mailing proxy materials, you can consent to receiving all future proxy statements, Voting Direction cards and annual reports electronically via e-mail or the Internet. To sign up for electronic delivery, please follow the instructions above to vote using the Internet and, when prompted, indicate that you agree to receive or access stockholder communications electronically in future years. | ||
VOTE BY PHONE - 1-800-690-6903 | ||
Use any touch-tone telephone to transmit your voting instructions up until 11:59 P.M. Eastern Time the day before the cut-off date or meeting date. Have your Voting Direction card in hand when you call and then follow the instructions. | ||
VOTE BY MAIL | ||
Mark, sign and date your Voting Direction card and return it in the postage-paid envelope we have provided or return it to ConocoPhillips, c/o Broadridge, 51 Mercedes Way, Edgewood, NY 11717. |
TO VOTE, MARK BLOCKS BELOW IN BLUE OR BLACK INK AS FOLLOWS: |
CONOP9 |
KEEP THIS PORTION FOR YOUR RECORDS |
THIS VOTING DIRECTION CARD IS VALID ONLY WHEN SIGNED AND DATED. | DETACH AND RETURN THIS PORTION ONLY | |||
CONOCOPHILLIPS | ||||||||||||||||||||||||||||||||
THE BOARD OF DIRECTORS RECOMMENDS A VOTE FOR ITEMS 1, 2 AND 3. |
||||||||||||||||||||||||||||||||
Vote On Directors | For | Against | Abstain | |||||||||||||||||||||||||||||
1 | ELECTION OF DIRECTORS |
|||||||||||||||||||||||||||||||
Nominees: | ||||||||||||||||||||||||||||||||
1a. Richard L. Armitage |
¨ | ¨ | ¨ | Vote On Proposals | For | Against | Abstain | |||||||||||||||||||||||||
1b. Richard H. Auchinleck |
¨ |
¨ |
¨ |
2 |
Proposal to ratify appointment of Ernst & Young LLP as ConocoPhillips independent registered public accounting firm for 2009. |
¨ |
¨ |
¨ |
||||||||||||||||||||||||
1c. James E. Copeland, Jr. |
¨ | ¨ | ¨ | 3 |
Proposal to Approve 2009 Omnibus Stock and Performance Incentive Plan. |
¨ | ¨ | ¨ | ||||||||||||||||||||||||
1d. Kenneth M. Duberstein |
¨ |
¨ |
¨ |
THE BOARD OF DIRECTORS RECOMMENDS A VOTE AGAINST ITEMS 4-9. |
¨ |
¨ |
¨ |
|||||||||||||||||||||||||
1e. Ruth R. Harkin |
¨ |
¨ |
¨ |
4. |
Universal Health Care Principles |
¨ |
¨ |
¨ |
||||||||||||||||||||||||
1f. Harold W. McGraw III |
¨ | ¨ | ¨ | 5. |
Advisory Vote on Executive Compensation |
¨ | ¨ | ¨ | ||||||||||||||||||||||||
1g. James J. Mulva |
¨ | ¨ | ¨ | 6. |
Political Contributions |
¨ | ¨ | ¨ | ||||||||||||||||||||||||
1h. Harald J. Norvik |
¨ | ¨ | ¨ | 7. |
Greenhouse Gas Reduction |
¨ | ¨ | ¨ | ||||||||||||||||||||||||
1i. William K. Reilly |
¨ | ¨ | ¨ | 8. |
Oil Sands Drilling |
¨ | ¨ | ¨ | ||||||||||||||||||||||||
1j. Bobby S. Shackouls |
¨ | ¨ | ¨ | 9. |
Director Qualifications |
¨ | ¨ | ¨ | ||||||||||||||||||||||||
1k. Victoria J. Tschinkel |
¨ | ¨ | ¨ | 10. |
In its discretion, upon such other matters that may properly come before the meeting or any adjournment or adjournments thereof. |
|||||||||||||||||||||||||||
1l. Kathryn C. Turner |
¨ | ¨ | ¨ | |||||||||||||||||||||||||||||
1m. William E. Wade, Jr. |
¨ | ¨ | ¨ | |||||||||||||||||||||||||||||
Signature [PLEASE SIGN WITHIN BOX] | Date | Signature (Joint Owners) |
Date |
Important Notice Regarding the Availability of Proxy Materials for the Annual Meeting:
The Notice and Proxy Statement and Annual Report are available at www.proxyvote.com.
CONO10 |
ConocoPhillips Savings Plan and/or ConocoPhillips Store Savings Plan CONFIDENTIAL VOTING DIRECTION ConocoPhillips Annual Meeting of Stockholders May 13, 2009 | ||||||||
The undersigned hereby directs that Vanguard Fiduciary Trust Company, Trustee of the ConocoPhillips Savings Plan (CPSP) and the ConocoPhillips Store Savings Plan (CPSSP), vote all shares of ConocoPhillips Common Stock (described on the back of this Voting Direction card) at the ConocoPhillips Annual Meeting of Stockholders to be held at the Omni Houston Hotel at Westside, 13210 Katy Freeway, Houston, Texas, on May 13, 2009, at 9:00 a.m., Central Time, and at any adjournment thereof, in the manner indicated on the back of this card as to the matters shown and at its discretion as to any other matters that come before the meeting, all as described in the Notice and Proxy Statement.
| ||||||||
If Broadridge, the Tabulator for the Trustee, The Vanguard Fiduciary Trust Company, does not receive this Voting Direction card by 11:59 p.m. EDT on May 10, 2009, if you do not fill in any boxes on the back of this card, if you return this card unsigned, and if you do not vote by the Internet or telephone on or before May 10, 2009, any shares in the CPSP and/or CPSSP that you otherwise could have directed will be directed by other eligible employees who elect to direct such shares.
| ||||||||
ConocoPhillips has acknowledged and agreed to honor the confidentiality of your voting instructions to the Trustee. The Trustee will keep your voting instructions confidential.
| ||||||||
This package contains your confidential Voting Direction card to instruct the Trustee of the Plan how to vote the shares of ConocoPhillips Common Stock described on the back of the card representing your interest in the Plan.
| ||||||||
Also enclosed is the Companys 2008 Annual Report along with the Notice and Proxy Statement for the 2009 Annual Meeting. Please use these documents to help you decide how to direct the way the Trustee (Vanguard Fiduciary Trust Company) should vote.
| ||||||||
Address Changes/Comments: |
|
|||||||
|
||||||||
(If you noted any Address Changes/Comments above, please mark corresponding box on the reverse side.) | ||||||||
CONTINUED AND TO BE SIGNED ON REVERSE SIDE
|
600 N. DAIRY ASHFORD MCLEAN BUILDING #3025 HOUSTON, TX 77079 |
VOTE BY INTERNET - www.proxyvote.com | |
Use the Internet to transmit your voting instructions and for electronic delivery of information up until the cut-off date. Have your Voting Direction card in hand when you access the web site and follow the instructions to obtain your records and to create an electronic voting instruction form. | ||
ELECTRONIC DELIVERY OF FUTURE STOCKHOLDER COMMUNICATIONS | ||
If you would like to reduce the costs incurred by ConocoPhillips in mailing proxy materials, you can consent to receiving all future proxy statements, Voting Direction cards and annual reports electronically via e-mail or the Internet. To sign up for electronic delivery, please follow the instructions above to vote using the Internet and, when prompted, indicate that you agree to receive or access stockholder communications electronically in future years. | ||
VOTE BY PHONE - 1-800-690-6903 | ||
Use any touch-tone telephone to transmit your voting instructions up until 11:59 P.M. Eastern Time the day before the cut-off date or meeting date. Have your Voting Direction card in hand when you call and then follow the instructions. | ||
VOTE BY MAIL | ||
Mark, sign and date your Voting Direction card and return it in the postage-paid envelope we have provided or return it to ConocoPhillips, c/o Broadridge, 51 Mercedes Way, Edgewood, NY 11717. |
TO VOTE, MARK BLOCKS BELOW IN BLUE OR BLACK INK AS FOLLOWS: |
CONO11 |
KEEP THIS PORTION FOR YOUR RECORDS |
THIS PROXY CARD IS VALID ONLY WHEN SIGNED AND DATED. |
DETACH AND RETURN THIS PORTION ONLY | |||
CONOCOPHILLIPS | ||||||||||||||||||||||||||||||||
THE BOARD OF DIRECTORS RECOMMENDS A VOTE FOR ITEMS 1, 2 AND 3. |
||||||||||||||||||||||||||||||||
Vote On Directors | For | Against | Abstain | |||||||||||||||||||||||||||||
1 | ELECTION OF DIRECTORS |
|||||||||||||||||||||||||||||||
Nominees: | ||||||||||||||||||||||||||||||||
1a. Richard L. Armitage |
¨ | ¨ | ¨ | Vote On Proposals | For | Against | Abstain | |||||||||||||||||||||||||
1b. Richard H. Auchinleck |
¨ |
¨ |
¨ |
2 |
Proposal to ratify appointment of Ernst & Young LLP as ConocoPhillips independent registered public accounting firm for 2009. |
¨ |
¨ |
¨ |
||||||||||||||||||||||||
1c. James E. Copeland, Jr. |
¨ | ¨ | ¨ | 3 |
Proposal to Approve 2009 Omnibus Stock and Performance Incentive Plan. |
¨ | ¨ | ¨ | ||||||||||||||||||||||||
1d. Kenneth M. Duberstein |
¨ |
¨ |
¨ |
THE BOARD OF DIRECTORS RECOMMENDS A VOTE AGAINST ITEMS 4-9. |
¨ |
¨ |
¨ |
|||||||||||||||||||||||||
1e. Ruth R. Harkin |
¨ |
¨ |
¨ |
4. |
Universal Health Care Principles |
¨ |
¨ |
¨ |
||||||||||||||||||||||||
1f. Harold W. McGraw III |
¨ | ¨ | ¨ | 5. |
Advisory Vote on Executive Compensation |
¨ | ¨ | ¨ | ||||||||||||||||||||||||
1g. James J. Mulva |
¨ | ¨ | ¨ | 6. |
Political Contributions |
¨ | ¨ | ¨ | ||||||||||||||||||||||||
1h. Harald J. Norvik |
¨ | ¨ | ¨ | 7. |
Greenhouse Gas Reduction |
¨ | ¨ | ¨ | ||||||||||||||||||||||||
1i. William K. Reilly |
¨ | ¨ | ¨ | 8. |
Oil Sands Drilling |
¨ | ¨ | ¨ | ||||||||||||||||||||||||
1j. Bobby S. Shackouls |
¨ | ¨ | ¨ | 9. |
Director Qualifications |
¨ | ¨ | ¨ | ||||||||||||||||||||||||
1k. Victoria J. Tschinkel |
¨ | ¨ | ¨ | 10. |
In its discretion, upon such other matters that may properly come before the meeting or any adjournment or adjournments thereof. |
|||||||||||||||||||||||||||
1l. Kathryn C. Turner |
¨ | ¨ | ¨ | |||||||||||||||||||||||||||||
1m. William E. Wade, Jr. |
¨ | ¨ | ¨ | |||||||||||||||||||||||||||||
Signature [PLEASE SIGN WITHIN BOX] | Date | Signature (Joint Owners) |
Date |
Important Notice Regarding the Availability of Proxy Materials for the Annual Meeting:
The Notice and Proxy Statement and Annual Report are available at www.proxyvote.com.
CONO12 |
ConocoPhillips Canada Employee Stock Ownership Plan Voting Direction | ||||||||
ANNUAL MEETING OF STOCKHOLDERS MAY 13, 2009 | ||||||||
The undersigned hereby directs that Computershare Trust Company of Canada, Trustee of the ConocoPhillips Canada Employee Stock Ownership Plan (the Canadian Plan), vote all shares of ConocoPhillips Common Stock (as set out on the back of this Voting Direction card) at the ConocoPhillips Annual Meeting of Stockholders to be held at the Omni Houston Hotel at Westside, 13210 Katy Freeway, Houston, Texas, on May 13, 2009, at 9:00 a.m., Central Time, and any adjournment thereof, in the manner indicated on the back of this card as to the matters shown and at its discretion as to any other matters that come before the meeting, all described in the Proxy Statement and the Companys Notice of the Annual Meeting on May 13, 2009.
| ||||||||
If Broadridge, the Tabulator for the Trustees, Computershare Trust Company of Canada, does not receive this Voting Direction card by 11:59 p.m. EDT on May 10, 2009, if you do not fill in any boxes on the back of this card, if you return this card unsigned, and if you do not vote by the Internet or telephone on or before May 10, 2009, any shares representing your part of the Canadian Plan will not be voted by the Trustee.
| ||||||||
This package contains your Voting Direction card to instruct the Trustee of the Canadian Plan how to vote shares of ConocoPhillips Common Stock described on the back of the card below representing your interest in the Canadian Plan.
| ||||||||
Also enclosed is the Companys Notice and Proxy Statement for the 2009 Annual Meeting and the Companys 2008 Annual Report. Please use these documents to help you to decide how to direct the way the Trustee (Computershare Trust Company of Canada) should vote.
| ||||||||
Address Changes/Comments: |
|
|||||||
|
||||||||
(If you noted any Address Changes/Comments above, please mark corresponding box on the reverse side.) | ||||||||
CONTINUED AND TO BE SIGNED ON REVERSE SIDE
|
TO VOTE, MARK BLOCKS BELOW IN BLUE OR BLACK INK AS FOLLOWS: |
CONCP1 |
Important Notice Regarding the Availability of Proxy Materials for the Shareholder Meeting. The following material is available at www.proxyvote.com. Notice and Proxy Statement and Annual Report |
||||||||||||||||||||||||||||||||||||||
THE BOARD OF DIRECTORS RECOMMENDS A VOTE FOR ITEMS 1, 2 AND 3. |
PLEASE X HERE ONLY IF YOU PLAN TO ATTEND THE MEETING AND VOTE THESE SHARES IN PERSON |
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Vote On Directors | For | Against | Abstain | |||||||||||||||||||||||||||||||||||
1 | ELECTION OF DIRECTORS |
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Nominees: | ||||||||||||||||||||||||||||||||||||||
1a. Richard L. Armitage |
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Vote On Proposals |
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Abstain |
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1b. Richard H. Auchinleck |
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2 |
Proposal to ratify appointment of Ernst & Young LLP as ConocoPhillips independent registered public accounting firm for 2009. |
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1c. James E. Copeland, Jr. |
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Proposal to Approve 2009 Omnibus Stock and Performance Incentive Plan. |
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1d. Kenneth M. Duberstein |
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THE BOARD OF DIRECTORS RECOMMENDS A VOTE AGAINST ITEMS 4-9. |
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1e. Ruth R. Harkin |
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Universal Health Care Principles |
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1f. Harold W. McGraw III |
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Advisory Vote on Executive Compensation |
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1g. James J. Mulva |
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Political Contributions |
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1h. Harald J. Norvik |
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Greenhouse Gas Reduction |
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1i. William K. Reilly |
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Oil Sands Drilling |
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1j. Bobby S. Shackouls |
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Director Qualifications |
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1k. Victoria J. Tschinkel |
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In its discretion, upon such other matters that may properly come before the meeting or any adjournment or adjournments thereof. |
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1l. Kathryn C. Turner |
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1m. William E. Wade, Jr. |
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*NOTE* SUCH OTHER BUSINESS AS MAY PROPERLY COME BEFORE THE MEETING OR ANY ADJOURNMENT THEREOF. |
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Signature [PLEASE SIGN ON LINE] | Date | Signature [Joint Owners] |
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