8-KMaterial Agreements

CONOCOPHILLIPS 8-K Report, Material Agreement (Dec 13, 2004)

Filed December 13, 2004For Securities:COP

Summary

ConocoPhillips filed an 8-K on December 13, 2004, to report on the compensation structure for its non-employee directors for the fiscal year 2005. This filing details the approved equity and cash compensation components. The primary purpose is to inform stakeholders about how the company intends to remunerate its independent board members, which can be a factor in attracting and retaining qualified individuals to oversee corporate governance. Key changes and structures for 2005 include an annual grant of restricted stock units valued at $100,000, subject to a three-year vesting period or earlier triggers like retirement, disability, death, or change of control. Directors also have options for deferring settlement of these units. Additionally, a base annual cash compensation of $100,000 will be provided, with supplementary cash payments for committee chairs and members, particularly for the Audit and Finance Committee.

Key Highlights

  • 1ConocoPhillips' Board of Directors approved compensation for non-employee directors for 2005 on December 10, 2004.
  • 2Non-employee directors will receive an annual grant of restricted stock units valued at $100,000.
  • 3Vesting of restricted stock units is generally three years from the grant date, with exceptions for retirement, disability, death, or change of control.
  • 4Directors receive dividend equivalents on restricted stock units in the form of additional restricted stock units.
  • 5An annual cash compensation of $100,000 will be paid to each non-employee director.
  • 6Additional cash compensation is provided for committee chairs and members, with higher amounts for the Audit and Finance Committee Chair ($20,000) and members ($7,500).
  • 7Directors have options to defer cash compensation into a deferred compensation account or receive it in stock.

Frequently Asked Questions

The total compensation for a non-employee director in 2005 consists of a $100,000 annual grant of restricted stock units and a $100,000 annual cash compensation. Additional cash compensation may be received by those serving as committee chairs or members.

The restricted stock units granted in 2005 are valued at $100,000 on the grant date and generally vest three years after the grant date. However, vesting can occur earlier upon retirement, disability, death, or a change of control of the company. Directors forfeit units if their service terminates for other reasons before vesting. Dividend equivalents are credited as additional restricted stock units.

Yes, non-employee directors receive additional cash compensation for serving in specified committee positions. The Chair of the Audit and Finance Committee receives $20,000, the Chair of the Compensation Committee receives $15,000, the Chair of other committees receives $10,000, and all other Audit and Finance Committee members receive $7,500 annually.

Yes, directors have flexibility. They can elect to delay the settlement of their restricted stock units until retirement from the Board, receive a cash payment, or credit the value to their deferred compensation account. For cash compensation, directors can elect to receive it in restricted or unrestricted stock, or have it credited to their deferred compensation account.