<PAGE> 1
As filed with the Securities and Exchange Commission on October 22, 1998
Registration No. 333-______
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SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
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FORM S-8
REGISTRATION STATEMENT
UNDER
THE SECURITIES ACT OF 1933
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CONOCO INC.
(Exact name of registrant as specified in its charter)
DELAWARE 51-0370352
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
600 NORTH DAIRY ASHFORD 77079
HOUSTON, TEXAS (Zip Code)
(Address of Principal Executive Offices)
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CONOCO INC.
1998 GLOBAL PERFORMANCE SHARING PLAN
(Full title of the plan)
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R.A. HARRINGTON
SENIOR VICE PRESIDENT, LEGAL, AND GENERAL COUNSEL
CONOCO INC.
600 NORTH DAIRY ASHFORD
HOUSTON, TEXAS 77079
(Name and address of agent for service)
(281) 293-1000
(Telephone number, including area code, of agent for service)
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<TABLE>
<CAPTION>
CALCULATION OF REGISTRATION FEE
==========================================================================================================================
Proposed maximum Proposed maximum
Amount to be offering price per aggregate offering Amount of
Title of securities to be registered registered share (2) price (2) registration fee
- --------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Class A Common Stock, par value $.01
per share(1) . . . . . . . . . . . . . . 1,900,000 $23.00 $43,700,000 $12,149
==========================================================================================================================
</TABLE>
(1) Includes the associated rights to purchase preferred stock, which
initially are attached to and trade with the shares of Class A Common
Stock being registered hereby.
(2) Estimated pursuant to Rules 457(c) and 457(h) under the Securities Act
of 1933, as amended (the "Securities Act"), solely for the purpose of
computing the registration fee and based upon the initial public
offering price per share of Class A Common Stock as set forth in the
prospectus of Conoco Inc. relating thereto dated October 21, 1998 as
filed with the Securities and Exchange Commission pursuant to Rule
424(b) under the Securities Act.
================================================================================
<PAGE> 2
PART I
INFORMATION REQUIRED IN THE SECTION 10(A) PROSPECTUS
Note: The document(s) containing the information concerning the
Conoco Inc. 1998 Global Performance Sharing Plan (the "Plan") required by Item
1 of Form S-8 and the statement of availability of registrant information, Plan
information and other information required by Item 2 of Form S-8 will be sent
or given to employees as specified by Rule 428 under the Securities Act of
1933, as amended (the "Securities Act"). In accordance with Rule 428 and the
requirements of Part I of Form S-8, such documents are not being filed with the
Securities and Exchange Commission (the "Commission") either as part of this
Registration Statement or as prospectuses or prospectus supplements pursuant to
Rule 424 under the Securities Act. The registrant will maintain a file of such
documents in accordance with the provisions of Rule 428. Upon request, the
registrant will furnish to the Commission or its staff a copy of any or all of
the documents included in such file.
<PAGE> 3
PART II
INFORMATION REQUIRED IN THE REGISTRATION STATEMENT
ITEM 3. INCORPORATION OF DOCUMENTS BY REFERENCE.
The following documents, which Conoco Inc., a Delaware corporation
(the "Company"), has filed with the Commission pursuant to the Securities Act
and the Securities Exchange Act of 1934, as amended (the "Exchange Act") (File
No. 001-14521), are incorporated in this Registration Statement by reference
and shall be deemed to be a part hereof:
(1) The Company's prospectus dated October 21, 1998 as
filed with the Commission pursuant to Rule 424(b) under the Securities
Act; and
(2) The description of the Company's Class A Common
Stock, par value $.01 per share (the "Common Stock"), contained in the
Company's Registration Statement on Form 8-A filed on September 28,
1998, as thereafter amended from time to time for the purpose of
updating, changing or modifying such description.
All documents filed by the Company with the Commission pursuant to
Sections 13(a), 13(c), 14 and 15(d) of the Exchange Act subsequent to the date
of this Registration Statement and prior to the filing of a post-effective
amendment to this Registration Statement which indicates that all securities
offered hereby have been sold, or which deregisters all securities then
remaining unsold, shall be deemed to be incorporated in this Registration
Statement by reference and to be a part hereof from the date of filing of such
documents.
Any statement contained in this Registration Statement, in an
amendment hereto or in a document incorporated by reference herein shall be
deemed to be modified or superseded for purposes of this Registration Statement
to the extent that a statement contained herein or in any subsequently filed
amendment or supplement to this Registration Statement or in any document that
also is incorporated by reference herein modifies or supersedes such statement.
Any statement so modified or superseded shall not be deemed, except as so
modified or superseded, to constitute a part of this Registration Statement.
ITEM 4. DESCRIPTION OF SECURITIES.
Not applicable.
ITEM 5. INTERESTS OF NAMED EXPERTS AND COUNSEL.
Not applicable.
ITEM 6. INDEMNIFICATION OF DIRECTORS AND OFFICERS.
Section 145 of the Delaware General Corporation Law provides that a
corporation may indemnify directors and officers as well as other employees and
individuals against expenses (including attorneys' fees), judgments, fines and
amounts paid in settlement in connection with specified actions, suits or
proceedings, whether civil, criminal, administrative or investigative (other
than an action by or in the right of the corporation--a "derivative action"),
if they acted in good faith and in a manner they reasonably believed to be in
or not opposed to the best interests of the corporation, and, with respect to
any criminal action or proceeding, had no reasonable cause to believe their
conduct was unlawful. A similar standard is applicable in the case of
derivative actions, except that indemnification only extends to expenses
(including attorneys' fees) incurred in connection with the defense or
settlement of such action, and the statute required court approval before there
can be any indemnification where the person seeking indemnification has been
found liable to the corporation. The statute provides that it is not exclusive
of other indemnification that may be granted by a corporation's charter,
By-laws, disinterested director vote, stockholder vote, agreement or otherwise.
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<PAGE> 4
Section 102(b)(7) of the Delaware General Corporation Law permits a
corporation to provide in its certificate of incorporation that a director of
the corporation shall not be personably liable to the corporation or its
stockholders for monetary damages for breach of fiduciary duty as a director,
except for liability (i) for any breach of the director's duty of loyalty to
the corporation or its stockholders, (ii) for acts or omissions not in good
faith or which involve intentional misconduct or a knowing violation of law,
(iii) for payments of unlawful dividends or unlawful stock repurchases or
redemptions, or (iv) for any transaction from which the director derived an
improper personal benefit.
Article 5E(2) of the Registrant's Certificate of Incorporation
provides that no director shall be personally liable to the Company or any of
its stockholders for monetary damages for breach of fiduciary duty as a
director, except for liability (i) for any breach of the director's duty of
loyalty to the Company or its stockholders, (ii) for acts or omissions not in
good faith or which involve intentional misconduct or a knowing violation of
law, (iii) pursuant to section 174 of the Delaware General Corporation Law or
(iv) for any transaction from which the director derived an improper personal
benefit. Any repeal or modification of such Article 5E(2) shall not adversely
affect any right or protection of a director of the Registrant for or with
respect to any acts or omissions of such director occurring prior to such
amendment or repeal. The Company's By-laws provide for indemnification of
directors and officers to the maximum extent permitted by Delaware law.
The Company has entered into indemnification agreements with each of
its directors (collectively, "Indemnitees"). Such agreements provide that, to
the fullest extent permitted by applicable law, the Company shall indemnify and
hold each Indemnitee harmless from and against any and all losses and expenses
whatsoever (i) arising out of any event or occurrence related to the fact that
such Indemnitee is or was a director or officer of the Company, is or was
serving in another capacity with the Company, consented to be named as a person
to be elected as a director of the Company in connection with the Company's
initial public offering of the Common Stock, or by reason of anything done or
not done by such Indemnitee in such capacity and (ii) incurred in connection
with any threatened, pending or completed legal proceeding.
ITEM 7. EXEMPTION FROM REGISTRATION CLAIMED.
Not Applicable.
ITEM 8. EXHIBITS.
<TABLE>
<CAPTION>
Exhibit
Number Document Description
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<S> <C> <C>
4.1 -- Second Amended and Restated Certificate of Incorporation of the Company (incorporated by reference to
Exhibit 4.1 of the Registration Statement of the Company on Form S-8 relating to the Conoco Inc. 1998
Stock and Performance Incentive Plan, as filed with the Commission on October 22, 1998).
4.2 -- Bylaws of the Company, as amended (incorporated by reference to Exhibit 4.2 of the Registration
Statement of the Company on Form S-8 relating to the Conoco Inc. 1998 Stock and Performance Incentive
Plan, as filed with the Commission on October 22, 1998).
4.3 -- Form of certificate representing Class A Common Stock (incorporated by reference to Exhibit 4.3 of
the Registration Statement of the Company on Form S-8 relating to the Conoco Inc. 1998 Stock and
Performance Incentive Plan, as filed with the Commission on October 22, 1998).
4.4 -- Rights Agreement dated as of October 19, 1998 between the Company and First Chicago Trust Company of
New York, as Rights Agent, which includes as Exhibit A the form of Certificate of Designations,
Preferences and Rights of Series A Junior Participating Preferred Stock, as Exhibit B the form of
Class A Rights Certificate and as Exhibit D the Summary of Rights to Purchase Preferred Stock
(incorporated by reference to Exhibit 4.4 of the Registration Statement of the Company on Form S-8
relating to the Conoco Inc. 1998 Stock and Performance Incentive Plan, as filed with the Commission
on October 22, 1998).
</TABLE>
II-2
<PAGE> 5
<TABLE>
<S> <C> <C>
4.5 -- Certificate of Designations, Preferences and Rights of Series A Junior Participating Preferred Stock
(incorporated by reference to Exhibit 4.5 of the Registration Statement of the Company on Form S-8
relating to the Conoco Inc. 1998 Stock and Performance Incentive Plan, as filed with the Commission
on October 22, 1998).
4.6 -- Amendment to Rights Agreement dated as of October 20, 1998 between the Company and First Chicago
Trust Company of New York, as Rights Agent (incorporated by reference to Exhibit 4.6 of the
Registration Statement of the Company on Form S-8 relating to the Conoco Inc. 1998 Stock and
Performance Incentive Plan, as filed with the Commission on October 22, 1998).
*4.7 -- Conoco Inc. 1998 Global Performance Sharing Plan.
*5.1 -- Opinion of Baker & Botts, L.L.P. as to the legality of securities.
*15.1 -- Awareness Letter of PricewaterhouseCoopers LLP.
*23.1 -- Consent of PricewaterhouseCoopers LLP.
*23.2 -- Consent of Baker & Botts, L.L.P. (contained in Exhibit 5.1).
*24.1 -- Powers of Attorney (included on the signature page of the Registration Statement).
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</TABLE>
* Filed herewith.
ITEM 9. UNDERTAKINGS.
(a) The undersigned registrant hereby undertakes:
(1) To file, during any period in which offers or sales are
being made, a post-effective amendment to this Registration Statement:
(i) To include any prospectus required by section
10(a)(3) of the Securities Act of 1933;
(ii) To reflect in the prospectus any facts or events
arising after the effective date of the Registration Statement (or
the most recent post-effective amendment thereof) which,
individually or in the aggregate, represent a fundamental change in
the information set forth in the Registration Statement.
Notwithstanding the foregoing, any increase or decrease in volume
of securities offered (if the total dollar value of securities
offered would not exceed that which was registered) and any
deviation from the low or high end of the estimated maximum
offering range may be reflected in the form of prospectus filed
with the Securities and Exchange Commission pursuant to Rule 424(b)
of the Securities Act of 1933 if, in the aggregate, the changes in
volume and price represent no more than a 20% change in the maximum
aggregate offering price set forth in the "Calculation of
Registration Fee" table in the effective Registration Statement;
(iii) To include any material information with
respect to the plan of distribution not previously disclosed in the
Registration Statement or any material change to such information
in the Registration Statement;
Provided, however, that paragraphs (a)(1)(i) and (a)(1)(ii) do not
apply if the Registration Statement is on Form S-3 or Form S-8, and
the information required to be included in a post-effective amendment
by those paragraphs is contained in periodic reports filed by the
registrant pursuant to section 13 or section 15(d) of the Securities
Exchange Act of 1934 that are incorporated by reference in the
Registration Statement.
(2) That, for the purpose of determining any liability under the
Securities Act of 1933, each such post-effective amendment shall be
deemed to be a new registration statement relating to the securities
offered therein, and the offering of such securities at that time
shall be deemed to be the initial bona fide offering thereof.
(3) To remove from registration by means of a post-effective
amendment any of the securities being registered which remain unsold
at the termination of the offering.
(b) The undersigned registrant hereby undertakes that, for
purposes of determining any liability under the Securities Act of 1933, each
filing of the registrant's annual report pursuant to section 13(a) or section
15(d) of the Securities Exchange Act of 1934 that is incorporated by reference
in the Registration Statement shall be deemed to be
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<PAGE> 6
a new registration statement relating to the securities offered therein, and
the offering of such securities at that time shall be deemed to be the initial
bona fide offering thereof.
(c) Insofar as indemnification for liabilities arising under the
Securities Act of 1933 may be permitted to directors, officers and controlling
persons of the registrant pursuant to the foregoing provisions, or otherwise,
the registrant has been advised that in the opinion of the Securities and
Exchange Commission such indemnification is against public policy as expressed
in the Act and is, therefore, unenforceable. In the event that a claim for
indemnification against such liabilities (other than the payment by the
registrant of expenses incurred or paid by a director, officer or controlling
person of the registrant in the successful defense of any action, suit or
proceeding) is asserted by such director, officer or controlling person in
connection with the securities being registered, the registrant will, unless in
the opinion of its counsel the matter has been settled by controlling
precedent, submit to a court of appropriate jurisdiction the question whether
such indemnification by it is against public policy as expressed in the Act and
will be governed by the final adjudication of such issue.
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<PAGE> 7
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, the
Registrant certifies that it has reasonable grounds to believe that it meets
all of the requirements for filing on Form S-8 and has duly caused this
Registration Statement to be signed on its behalf by the undersigned, thereunto
duly authorized, in the City of Houston, State of Texas, on October 22, 1998.
CONOCO INC.
By: /s/ Archie W. Dunham
-------------------------------------
Archie W. Dunham
President and Chief Executive Officer
POWER OF ATTORNEY
Each person whose signature appears below appoints Archie W. Dunham,
Robert W. Goldman, Rick A. Harrington and Gary M. Pfeiffer, and each of them,
severally, as his true and lawful attorney or attorneys-in-fact and agent or
agents, each of whom shall be authorized to act with or without the other, with
full power of substitution and resubstitution, for him and in his name, place
and stead in his capacity as a director or officer or both, as the case may be,
of Conoco Inc., a Delaware corporation (the "Company"), to sign any and all
amendments (including post-effective amendments) to this Registration
Statement, and all documents or instruments necessary or appropriate to enable
the Company to comply with the Securities Act of 1933, and to file the same
with the Securities and Exchange Commission, with full power and authority to
each of said attorneys-in-fact and agents to do and perform in the name and on
behalf of each such director or officer, or both, as the case may be, each and
every act whatsoever that is necessary, appropriate or advisable in connection
with any or all of the above-described matters and to all intents and purposes
as he might or could do in person, hereby ratifying and confirming all that
said attorneys-in-fact and agents or any of them or their substitutes, may
lawfully do or cause to be done by virtue hereof.
PURSUANT TO THE REQUIREMENTS OF THE SECURITIES ACT OF 1933, THIS
REGISTRATION STATEMENT HAS BEEN SIGNED BY THE FOLLOWING PERSONS IN THE
CAPACITIES INDICATED AND ON OCTOBER 22, 1998.
<TABLE>
<CAPTION>
SIGNATURE TITLE
--------- -----
<S> <C>
/s/ Archie W. Dunham President, Chief Executive Officer and
---------------------------------------------------- Director
Archie W. Dunham
/s/ Robert W. Goldman Senior Vice President, Finance, and Chief
---------------------------------------------------- Financial Officer (Principal Financial
Robert W. Goldman Officer and Principal Accounting Officer)
/s/ Edgar S. Woolard, Jr. Chairman of the Board and Director
----------------------------------------------------
Edgar S. Woolard, Jr.
/s/ Gary M. Pfeiffer Director
----------------------------------------------------
Gary M. Pfeiffer
</TABLE>
<PAGE> 8
EXHIBIT INDEX
<TABLE>
<CAPTION>
Exhibit
Number Document Description
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<S> <C> <C>
4.1 -- Second Amended and Restated Certificate of Incorporation of the Company (incorporated by reference to
Exhibit 4.1 of the Registration Statement of the Company on Form S-8 relating to the Conoco Inc. 1998
Stock and Performance Incentive Plan, as filed with the Commission on October 22, 1998).
4.2 -- Bylaws of the Company, as amended (incorporated by reference to Exhibit 4.2 of the Registration
Statement of the Company on Form S-8 relating to the Conoco Inc. 1998 Stock and Performance Incentive
Plan, as filed with the Commission on October 22, 1998).
4.3 -- Form of certificate representing Class A Common Stock (incorporated by reference to Exhibit 4.3 of
the Registration Statement of the Company on Form S-8 relating to the Conoco Inc. 1998 Stock and
Performance Incentive Plan, as filed with the Commission on October 22, 1998).
4.4 -- Rights Agreement dated as of October 19, 1998 between the Company and First Chicago Trust Company of
New York, as Rights Agent, which includes as Exhibit A the form of Certificate of Designations,
Preferences and Rights of Series A Junior Participating Preferred Stock, as Exhibit B the form of
Class A Rights Certificate and as Exhibit D the Summary of Rights to Purchase Preferred Stock
(incorporated by reference to Exhibit 4.4 of the Registration Statement of the Company on Form S-8
relating to the Conoco Inc. 1998 Stock and Performance Incentive Plan, as filed with the Commission
on October 22, 1998).
4.5 -- Certificate of Designations, Preferences and Rights of Series A Junior Participating Preferred Stock
(incorporated by reference to Exhibit 4.5 of the Registration Statement of the Company on Form S-8
relating to the Conoco Inc. 1998 Stock and Performance Incentive Plan, as filed with the Commission
on October 22, 1998).
4.6 -- Amendment to Rights Agreement dated as of October 20, 1998 between the Company and First Chicago
Trust Company of New York, as Rights Agent (incorporated by reference to Exhibit 4.6 of the
Registration Statement of the Company on Form S-8 relating to the Conoco Inc. 1998 Stock and
Performance Incentive Plan, as filed with the Commission on October 22, 1998).
*4.7 -- Conoco Inc. 1998 Global Performance Sharing Plan.
*5.1 -- Opinion of Baker & Botts, L.L.P. as to the legality of securities.
*15.1 -- Awareness Letter of PricewaterhouseCoopers LLP.
*23.1 -- Consent of PricewaterhouseCoopers LLP.
*23.2 -- Consent of Baker & Botts, L.L.P. (contained in Exhibit 5.1).
*24.1 -- Powers of Attorney (included on the signature page of the Registration Statement).
- --------------------------
</TABLE>
* Filed herewith.
<PAGE> 1
EXHIBIT 4.7
CONOCO INC.
1998 GLOBAL PERFORMANCE SHARING PLAN
1. Plan. This Conoco Inc. 1998 Global Performance Sharing Plan
(the "Plan") is adopted by Conoco Inc., a Delaware corporation ("Conoco"), to
provide certain employees of Conoco with an option to purchase shares of Conoco
Class A Common Stock, par value $.01 per share ("Common Stock").
2. Purpose. The Plan is a broad-based, nonqualified stock option
plan designed to provide additional financial incentives for certain employees
of Conoco; to encourage a sense of proprietorship in such employees; to retain
such employees; and to stimulate the active interest of such employees in the
development and financial success of Conoco and its subsidiaries. These
objectives are accomplished by granting employees options to purchase Common
Stock and thereby providing the grantees with a proprietary interest in the
growth and performance of Conoco and its subsidiaries.
3. Definitions and Construction. The provisions of this Plan
are entire and complete, except as may otherwise be set forth in any addendum
attached hereto and incorporated herein, intended to address particular legal,
tax, securities, or administrative requirements or restrictions in designated
Participating Countries. In any necessary construction of a provision of this
Plan, the masculine gender may include the feminine and or neuter, and the
singular may include the plural, and vice versa. This Plan should be construed
in a manner consistent with the intent of Conoco to establish a nonqualified
stock option plan subject to fixed accounting treatment. As used herein,
capitalized terms shall have the following respective meanings:
Applicable Exchange Rate means such exchange rate as from time
to time determined by the Committee or its delegate in its discretion.
Beneficiary means the individual or trust defined by or
designated as the Participant's Beneficiary in accordance with
paragraph 15 hereof. If no Beneficiary is designated, then the
Beneficiary shall be determined as prescribed by governing law.
Board means the Board of Directors of Conoco.
Cause is defined in Attachment D.
Code means the U.S. Internal Revenue Code of 1986, as amended
from time to time.
Committee means the Compensation Committee of the Board or
such other committee of the Board as is designated by the Board to
administer the Plan; provided,
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<PAGE> 2
however, that prior to the appointment of the Committee, "Committee"
shall mean the Board or such other persons as are authorized by the
Board to act on behalf of the Board.
Common Stock means the Class A Common Stock, par value $.01
per share, of Conoco.
Conoco means Conoco Inc. or any successors thereto.
Controlling Retirement Plan means the Retirement Plan of
Conoco Inc., a defined benefit retirement plan sponsored by Conoco,
or, if the Participant does not participate in the Retirement Plan of
Conoco Inc., then such other retirement plan sponsored by a subsidiary
in which the Participant is eligible to participate, or such other
retirement plan or program acceptable to the Committee.
Divestiture means Conoco sells, transfers or otherwise divests
of ownership of the subsidiary, department or division for which the
Participant works, or of the assets associated with the Participant?s
employment, such that as a result of the sale, transfer or
divestiture, the Participant is no longer an Employee.
Employee means any employee of a Participating Employer who is
classified as a regular, full- or part-time employee, including such
individuals who are regular, full- or part-time employees but who are
on an approved paid leave of absence. Employee does not mean any
individual who is not classified by a Participating Employer as a
regular, full- or part-time employee, including temporary employees
(whether full- or part-time), an employee on unpaid or unapproved
leave of absence, casual workers and contract workers. Employees
whose employment is the subject of collective bargaining shall not be
considered Employees eligible to participate unless the terms of such
bargaining agreement specifically provide for grants hereunder.
Notwithstanding the foregoing, an individual who is not an "Employee"
under this definition may nonetheless receive an Employee Award under
this Plan if the Committee determines that governing law requires the
individual to receive an Employee Award.
Employee Award means the right to purchase a specified number
of shares of Common Stock at a specified price pursuant to such
applicable terms, conditions and limitations as the Committee may
establish in order to fulfill the objectives of this Plan which is
granted by a Participating Employer to an Employee. An Employee Award
may be an Initial Grant or a Subsequent Grant. All awards granted
herein are nonqualified stock options except that an equivalent number
of SARs shall be granted to Employees when applicable law makes the
grant of options impractical, as determined by the Committee in its
sole discretion.
Employee Award Agreement means a written statement setting
forth the terms, conditions and limitations applicable to an Employee
Award.
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<PAGE> 3
Fair Market Value of a share of Common Stock means, as of a
particular date, (i) if shares of Common Stock are listed on a
national securities exchange, the mean between the highest and lowest
sales price per share of 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 next
succeeding date on which such a sale was so reported, or, at the
discretion of the Committee, the price prevailing on the exchange at
the time of exercise, (ii) if shares of Common Stock are not so listed
but are quoted on the Nasdaq National Market, the mean between the
highest and lowest sales price per share of Common Stock reported by
the Nasdaq National Market on that date, or, if there shall have been
no such sale so reported on that date, on the next succeeding date on
which such a sale was so reported, or, at the discretion of the
Committee, the price prevailing on the Nasdaq National Market at the
time of exercise, (iii) if the Common Stock is not so listed or
quoted, the mean between the closing bid and asked price on that date,
or, if there are no quotations available for such date, on the next
succeeding date on which such quotations shall be available, as
reported by the Nasdaq Stock Market, or, if not reported by the Nasdaq
Stock Market, by the National Quotation Bureau Incorporated or (iv) if
shares of Common Stock are not publicly traded, the most recent value
determined by an independent appraiser appointed by Conoco for such
purpose; provided that, notwithstanding the foregoing, "Fair Market
Value" in the case of any Employee Award granted in connection with
the IPO, means the price per share of Common Stock set on the IPO
Pricing Date, as set forth in the final prospectus relating to the
IPO.
Grant Date means the particular date or dates, as established
by the Committee, on which an Employee is granted an Employee Award
under the terms of this Plan.
Grant Price means the Fair Market Value of Common Stock on the
Grant Date.
Initial Grant means the Employee Awards granted under the Plan
on the IPO Pricing Date.
IPO means the first time a registration statement filed under
the Securities Act of 1933 and respecting an underwritten primary
offering by Conoco of shares of Common Stock is declared effective
under that Act and the shares registered by that registration
statement are issued and sold by Conoco (otherwise than pursuant to
the exercise of any overallotment option).
IPO Closing Date means the date on which Conoco first receives
payment for the shares of Common Stock it sells in the IPO.
IPO Pricing Date means the date of the execution and delivery
of an underwriting or other purchase agreement among Conoco and the
underwriters relating to the IPO setting forth the price at which
shares of Common Stock will be issued and sold by Conoco to the
underwriters and the terms and conditions thereof.
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<PAGE> 4
Incentive Plan means the 1998 Stock Performance and Incentive
Plan of Conoco Inc.
Participant means an individual to whom an Employee Award has
been granted, and for whom such Employee Award remains outstanding,
unforfeited, and unexercised under this Plan.
Participating Country means any country, as determined by the
Committee in its sole and absolute discretion and as set forth in
Attachment "A," as attached hereto, and as may be amended from time to
time.
Participating Employer means Conoco, or any subsidiary or
affiliate of Conoco, as determined by the Committee in its sole and
absolute discretion, and as set forth in Attachment "B," as attached
hereto, and as may be amended from time to time.
Plan means the Conoco Inc. 1998 Global Performance Sharing
Plan, as set forth in this document, and as it may be amended from
time to time.
Qualifying Termination is defined in Attachment D.
Retirement means separation from employment as described under
the Controlling Retirement Plan, or in the event the Participant does
not participate in a Controlling Retirement Plan, then under the local
governing law or Social Security authority, or such other plan as
deemed acceptable by the Committee. The Employee must be eligible for
an immediate retirement benefit under the Controlling Retirement Plan.
This term includes retirements due to total and permanent disability
(called incapacity retirements in the U.S.). Terminations where the
individual is eligible for a future, rather than immediate, benefit
are not considered Retirements under this Plan. In the U.S.,
separation retirements, as defined under the Conoco Inc. Retirement
Plan, are not considered Retirements under this definition even if the
Participant is eligible for an immediate benefit.
Severance means separation from employment under circumstances
resulting from lack of work or outsourcing of the Employee's position
or function.
Stock Appreciation Right or SAR means a right to receive a
payment, in cash or in Common Stock, equal to the excess of the Fair
Market Value of a specified number of shares of Common Stock on the
date the right is exercised over the Fair Market Value of the
specified number of shares of Common Stock on the date the SAR was
granted.
Service Date means the date of record by which a Participating
Employer establishes the service date of an Employee.
Subsequent Grant means any Employee Award granted under the
terms of the Plan after the Grant Date of the Initial Grant.
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<PAGE> 5
Trading Day means a day on which Common Stock is available for
purchase or sale on the New York Stock Exchange.
4. Eligibility. Employees eligible for the Initial Grant are
those Employees of a Participating Employer in a Participating Country on the
IPO Pricing Date. Employees employed by a Participating Employer in a
Participating Country on the Grant Date of a Subsequent Grant shall be eligible
for a Subsequent Grant. Notwithstanding the foregoing, (a) Employees who on
the applicable Grant Date receive an award under the Incentive Plan shall not
be eligible to participate in this Plan; and (b) a Participating Employer may
elect to exclude specified groups of Employees from participation in the
Initial Grant or in Subsequent Grants.
5. Common Stock Available for Employee Awards. Subject to the
provisions of paragraph 6 hereof, the Board has approved the granting of shares
of Common Stock under this Plan, which number of shares of Common Stock may be
modified from time to time by resolution of the Board. The number of shares of
Common Stock that are the subject of Employee Awards under this Plan that are
forfeited or terminated, that expire unexercised, or that are settled in a
manner such that all or some of the shares covered by an Employee Award are not
issued to a Participant, shall not be available for Employee Awards hereunder.
The Committee may from time to time adopt and observe such procedures
concerning the counting of shares against the Plan maximum as it may deem
appropriate. The Board and the appropriate officers of Conoco shall from time
to time take whatever actions are necessary 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
Employee Awards.
6. Employee Awards.
(a) Each Employee Award shall be described in an Employee
Award Agreement, and shall be subject to the vesting schedule,
forfeiture provisions, terms, conditions and limitations described
herein. An Employee Award shall be subject to limitations on
exercisability as are set forth in this Plan and in the Employee Award
Agreement. Upon the termination of a Participant's employment, any
unexercised, unvested or otherwise outstanding Employee Awards shall
be treated as described herein and in the Employee Award Agreement.
(b) Each eligible Employee, as defined in paragraph 4,
shall receive a grant of an Employee Award, as described in paragraph
6(c) hereof, in the amount, and subject to the terms, described in
paragraph 6(d) hereof.
(c) The price at which shares of Common Stock may be
purchased upon the exercise of an Employee Award that is an option
shall be the Grant Price. The exercise price of Employee Awards that
are SARs shall be the Grant Price. All Employee Awards granted
pursuant to this Plan shall be subject to the vesting schedule,
forfeiture provisions, terms, conditions and limitations set forth in
this Plan. The date or dates upon
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<PAGE> 6
which an Employee Award awarded pursuant to this Plan may become
exercisable shall be determined pursuant to subparagraphs 6(d)(ii),
6(d)(iii) and 7(b) hereof.
(d) The following provisions shall apply to any Employee
Awards made pursuant to this Plan:
(i) Amount and Term. Each eligible Participant
on the IPO Pricing Date shall receive an Initial Grant under
this Plan for the number of shares of Common Stock indicated
on Attachment C as applicable to the Participant. Each
Initial Grant shall have a term of 10 years. Subsequent
Grants shall be made to those eligible Participants as may be
determined by the Committee and in amounts, and subject to
such terms and conditions that the Committee shall establish.
(ii) Vesting and Exercisability of Employee Award.
A. Employee Awards shall become vested
on the first anniversary of the applicable Grant
Date, and shall become exercisable (subject to
subparagraphs 6(d)(iii) and 7(b) hereof) in one-third
(1/3) increments cumulatively on the first, second
and third anniversaries of the applicable Grant Date,
if the Participant remains in the continuous
employment of a Participating Employer until such
date.
B. Employee Awards shall be considered
vested six months after the applicable Grant Date,
and shall become fully exercisable (subject to
subparagraph 6(d)(iii) and 7(b) hereof), if the
Participant remains in the continuous employment of a
Participating Employer until death, Severance, or
Divestiture, and shall remain exercisable until the
earlier of (1) the expiration of two years from the
death, Severance or Divestiture, or (2) the
expiration of the term of the option.
C. If the Participant terminates
employment with the Participating Employer by reason
of Retirement, then the Employee Award shall be
considered vested six months after the applicable
Grant date, and shall continue to become exercisable
pursuant to subparagraphs 6(d)(ii)(A) and 6(d)(ii)(B)
hereof, as if the Participant remained in the
continuous employment of the Participating Employer
and shall remain exercisable until the expiration of
the term of the option.
D. If the Participant's employment with
the Participating Employer is terminated due to a
Qualifying Termination then the Employee Award shall
be become immediately vested and fully exercisable,
and shall remain exercisable until the expiration of
the
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<PAGE> 7
term of the Option or, if the Participant should die
before the expiration of the term of the Option,
until the earlier of (i) the expiration of the term
of the Option or (ii) two (2) years from the date of
the Participant?s death.
E. If an Employee Award is not vested
as of the date the Participant terminates employment
with the Participating Employer, and does not become
vested on termination pursuant to subparagraph
6(d)(ii)(D), then the Employee Award shall be
forfeited upon the Participant's termination of
employment with the Participating Employer. If the
Participant's employment with a Participating
Employer terminates for Cause, then the Employee
Award shall be forfeited upon the Participant's
termination of employment with the Participating
Employer. If the Participant terminates employment
with a Participating Employer under circumstances
other than pursuant to those listed in subparagraphs
6(d)(ii)(B), (C), or (D), and the Participant is not
terminated for Cause, then the Employee Award shall
remain exercisable, to the extent exercisable as of
the date of termination, for a period of ninety days
after the date of termination.
(iii) Lapse of Employee Award. Employee Award
shall cease to be exercisable as to any share when the
Participant purchases the share, or when the Employee Award
lapses as provided in this subparagraph. A Participant shall
have no obligation to exercise an Employee Award granted
pursuant to this Plan. Employee Awards shall lapse on the
earlier of (A) the tenth anniversary of the Grant Date or (B)
the applicable period specified in Section 6(d)(ii). Any
Employee Award granted pursuant to this Plan which has not
been exercised prior to such lapse date shall be automatically
forfeited.
7. Election to Exercise.
(a) Election. An exercisable Employee Award may be
exercised (subject to subparagraphs 6(d)(ii), 6(d)(iii), and 7(b)
hereof), in whole or in part, by timely notice to the Committee, in
such form as may be designated by the Committee, of exercise, and
payment of the purchase price, if the Employee Award is an option.
Notice of exercise shall be effective on the date both the notice and
the purchase price are received by the Committee. The notice must
state the Participant's election to exercise the Employee Award, the
number of shares with respect to which the election to exercise has
been made, if applicable, the method of payment elected, the exact
name or names in which such shares will be registered and such other
information and in such form as may be required by the Committee. In
the event of the death of a Participant, the Employee Award may be
exercised by the Beneficiary of the Participant, subject to the
provisions hereof.
(b) Completion of Necessary Forms. As a condition
precedent to becoming eligible to exercise any Employee Award, the
Participant shall be required to complete and execute such forms as
may be designated by the Committee. Failure to properly
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<PAGE> 8
complete and execute such forms shall result in the lapse of a vested
Employee Award pursuant to the provisions of subparagraph 6(d)(iii)
hereof.
(c) Payment. The full purchase price for the shares of
Common Stock purchased on the exercise of an Employee Award that is an
option (i.e., the number of shares purchased, multiplied by the price
per share) may be paid in cash, or, at the request of the Participant,
and to the extent permitted by applicable law, the Committee may
approve, in its sole and absolute discretion, tender of shares of
Common Stock, or cashless exercise through an arrangement with a
brokerage firm, under which the brokerage firm, on behalf of the
Participant, will pay for all or a portion of the shares of Common
Stock purchased upon the exercise of the Employee Award.
(d) Minimum Exercise. The minimum number of shares with
respect to which an Employee Award may be exercised shall be the
lesser of (i) ten shares or (ii) the number of shares with respect to
which the Employee Award is currently exercisable.
(e) Cash-out of Awards. At the discretion of the
Committee, an Employee Award may be settled by a cash payment equal
to the difference between the Fair Market Value per share of Common
Stock on the date of exercise and the Grant Price of the Employee
Award, multiplied by the number of shares with respect to which the
Employee Award is exercised.
8. Administration.
(a) This Plan shall be administered by the Committee (or
the Committee's delegate pursuant to paragraph 9 hereof). The
Committee shall have the power, in its sole and absolute discretion,
to contract with a third-party administrator to administer this Plan.
(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 which 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, to devise necessary forms and documents, and to
adopt such rules, regulations and guidelines for carrying out this
Plan as it may deem necessary or proper, all of which powers shall be
exercised in the best interests of Conoco and in keeping with the
objectives of this Plan. The Committee may, in its sole and absolute
discretion, amend or modify an Employee Award in any manner that is
consistent with the purpose and objectives of this Plan and is either
(i) not adverse to the Participant to whom such Employee Award was
granted, (ii) required to comply with governing law, or (iii)
consented to by such Participant. The Committee may correct any
defect or supply any omission or reconcile any error or inconsistency
in this Plan or in any Employee Award Statement in the manner and to
the extent the Committee deems necessary or desirable to carry it into
effect. Any decision of the Committee in the interpretation and
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<PAGE> 9
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 or Employee of
Conoco to whom the Committee has delegated authority in accordance
with the provisions of paragraph 9 hereof, shall be liable for
anything done or omitted to be done by such person, by any member of
the Committee, or by any officer or Employee of Conoco in connection
with the performance of any duties under this Plan, except for such
person's own willful misconduct or as expressly provided by statute.
9. Delegation of Authority. The Committee may delegate to such
subcommittees, officers, other Employees of Conoco, or qualified third-party
administrators, its duties under this Plan pursuant to such conditions or
limitations as the Committee may establish. The Committee shall have the power
and authority to appoint, remove or replace the members of any such
subcommittee, or any officer, Employee or third-party administrator that has
been delegated responsibilities and authority by the Committee.
10. Tax Withholding. Upon the exercise of an Employee Award, or
any part thereof, the Participant may incur certain liabilities for taxes and
the Participating Employer may be required by law to withhold such taxes for
payment to taxing authorities. Upon determination by the Participating
Employer of the amount of taxes required to be withheld, including taxes, if
any, which may be required to be withheld prior to exercise with respect to the
shares to be issued pursuant to the exercise of the Employee Award, the
Committee shall establish procedures which allow the Participant (a) to direct
the Participating Employer to withhold from the Common Stock available for
exercise the number of shares necessary to satisfy the withholding obligations,
based on the Fair Market Value of Common Stock on the date of withholding; (b)
to deliver sufficient cash to the Participating Employer to satisfy its
withholding obligations; or (c) some combination thereof. Authorization of the
Participant to the Participating Employer to withhold taxes must be in a form
and content acceptable to the Committee. Failure by the Participant to comply
with the foregoing shall entitle the Committee, in its sole and absolute
discretion, to authorize the sale of a sufficient number of the shares of
Common Stock which the Participant is entitled to receive upon the exercise of
the Participant's Employee Award in order to satisfy such withholding
requirements; provided, however, that neither the Participating Employer nor
the Committee shall be liable for determining the exact amount of such taxes,
for selling shares of Common Stock in excess of that required to satisfy such
tax obligation, or for obtaining the highest sales price for any such shares.
The payment or authorization to withhold taxes by the Participant shall be
completed prior to the delivery of any Common Stock pursuant to this Plan. An
authorization to withhold taxes pursuant to this provision will be irrevocable
unless and until the tax liability of the Participant has been fully paid.
11. Delivery of Shares. Subject to paragraphs 11 and 16 hereof,
and upon written request of the Participant, the Participating Employer shall
cause certificates for those shares of Common Stock which the Participant is
entitled to receive upon the exercise of an Employee Award to be delivered to
Participant. Notwithstanding the foregoing, no shares of Common Stock shall be
delivered to the Participant upon the exercise of the Employee Award until (a)
the
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<PAGE> 10
purchase price, including any applicable fees or commissions, has been paid in
full in the manner herein provided; (b) all the applicable taxes required to be
withheld have been paid or withheld in full; and (c) the approval of any
governmental authority required in connection with the Employee Award or the
issuance of shares thereunder has been received by Conoco.
12. Amendment, Modification, Suspension or Termination. Conoco
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 (a) no amendment or alteration that would adversely affect
the rights of any Participant under any Employee Award previously granted to
such Participant shall be made without the consent of such Participant and (b)
no amendment or alteration shall be effective prior to approval by the
stockholders of Conoco to the extent stockholder approval is required by
applicable legal requirements. Subject to the same conditions listed in the
previous sentence, the Committee may amend the terms of Addendum A and Addendum
B without any action of the Board. Conoco may, in its sole and absolute
discretion, terminate this Plan at any time, provided that such termination
shall not cause any Participant to lose any rights to any vested Employee
Award.
13. Assignability. No Employee Award or any other benefit under
this Plan shall be assignable or otherwise transferable except by will or 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
Security Act, or the rules thereunder. The Committee may prescribe other
restrictions on transfer. Any attempted assignment of an Employee Award or any
other benefit under this Plan in violation of this paragraph 13 shall be null
and void.
14. Adjustments.
(a) The existence of outstanding Employee Awards shall
not affect in any manner the right or power of Conoco or its
stockholders to make or authorize any or all adjustments,
recapitalizations, reorganizations or other changes in the capital
stock of Conoco or its business or any merger or consolidation of
Conoco, 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 Common Stock) or the dissolution or liquidation
of Conoco or a subsidiary, 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
of shares of Common Stock reserved under this Plan, (ii) the number of
shares of Common Stock covered by outstanding Employee Awards, (iii)
the exercise or other price in respect of such Employee Awards, and
(iv) the appropriate Fair Market Value and other price determinations
for such Employee Awards, shall be proportionately adjusted by the
Committee as appropriate to reflect such transaction. In the event of
any other recapitalization or capital reorganization of Conoco, any
consolidation or merger of Conoco with another corporation or entity,
the adoption by
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<PAGE> 11
Conoco of any plan of exchange affecting the Common Stock or any
distribution to holders of Common Stock of securities or property
(other than normal cash dividends or dividends payable in Common
Stock), then (i) the number of shares of Common Stock covered by
Employee Awards in the form of options on Common Stock, (ii) the
exercise or other price in respect of such Employee Awards, and (iii)
the appropriate Fair Market Value and other price determinations for
such Employee Awards, shall be proportionately adjusted by the
Committee to reflect such transaction; provided that such adjustments
shall only be such as are necessary to maintain the proportionate
interest of the holders of the Employee Awards and preserve, without
exceeding, the value of such Employee Awards. In the event of a
corporate merger, consolidation, acquisition of property or stock,
separation, reorganization or liquidation, the Committee shall be
authorized to issue or assume Employee Awards by means of substitution
of new Employee Awards, as appropriate, for previously issued Employee
Awards or an assumption of previously issued Employee Awards as part
of such adjustment.
15. Beneficiary Designation. Beneficiaries shall be designated in
such manner and according to such requirements as may be designated by the
Committee. The designation of a Beneficiary shall be effective on the date
received by the Committee. Upon the death of a Participant, a designated
Beneficiary shall be entitled to exercise a vested Employee Award pursuant to
the provisions of paragraph 6 hereof.
16. Restrictions. No Common Stock or other form of payment shall
be issued with respect to any Employee Award unless the Participating Employer
shall be satisfied based on the advice of its counsel that such issuance will
be in compliance with applicable laws, rules or regulations. Certificates
evidencing shares of Common Stock certificates 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 in
order to satisfy the rules, regulations, agreements or other requirements of
the U.S. Securities and Exchange Commission, or 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 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.
17. Unfunded Plan. This Plan shall be unfunded. Although
bookkeeping accounts may be established with respect to Participants who are
entitled to Common Stock or rights thereto under this Plan, any such accounts
shall be used merely as a bookkeeping convenience. Conoco shall not be
required to segregate any assets that may at any time be represented by Common
Stock or rights thereto, nor shall this Plan be construed as providing for such
segregation, nor shall Conoco, the Board or the Committee be deemed to be a
trustee of any Common Stock or rights thereto to be granted under this Plan.
Any liability or obligation of Conoco to any Participant with respect to rights
granted under this Plan shall be based solely upon any contractual obligations
that may be created by this Plan and any Employee Award Statement, and no such
liability or obligation of Conoco shall be deemed to be secured by any pledge
or other encumbrance on any property of Conoco. Neither Conoco, any
subsidiary, the
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<PAGE> 12
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.
18. 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 without regard to any conflicts of law principles that would compel
the application of any other law.
19. No Right to Employment. Nothing in this Plan or in any
Employee Award issued pursuant to this Plan shall confer upon any Participant
any right to receive another Employee Award or to continue in the employ of the
Participating Employer or affect the Participating Employer's right, subject to
applicable law, to terminate the employment of any Participant at any time,
with or without cause.
20. Effectiveness. The Plan, as approved by the Board, shall be
effective as set forth herein as of October 16, 1998, but all Employee Awards
made hereunder prior to the IPO Closing Date shall be null and void and
canceled without consideration if the IPO Closing Date does not occur on or
before ten (10) business days after the IPO Pricing Date. This Plan was
approved by the stockholders of Conoco on October 19, 1998.
-12-
<PAGE> 13
ATTACHMENT "A"
TO
CONOCO INC.
GLOBAL PERFORMANCE SHARING PLAN
PARTICIPATING COUNTRIES
Australia Mexico
Austria Netherlands
Belgium Nigeria
Canada Norway
Colombia Poland
Czech Republic Russia
Denmark Singapore
Dubai Slovakia
Finland Spain
Germany Sweden
Hungary Thailand
India Turkey
Indonesia United Kingdom
Japan United States
Malaysia Venezuela
Total No. of Countries: 30
Attachment A-1
<PAGE> 14
ATTACHMENT "B"
TO
CONOCO INC.
GLOBAL PERFORMANCE SHARING PLAN
PARTICIPATING EMPLOYERS
(as of the Grant Date for the Initial Grant)
CONOCO INC., A DELAWARE CORPORATION,
AND
EACH OF THE FOLLOWING:
<TABLE>
<CAPTION>
SARs Stock Options
- --------------------------------------- ---------------------------------------
<S> <C>
Conoco Czech Republic s.r.o. Conoco Operations (Qld) Pty Ltd.
Conoco Danmark A/S Conoco Austria Mineraloel GMBH
Conoco Middle East Limited Societe Eurapeene Des Carburants (SECA)
Conoco Finland OY Conoco Canada Ltd.
Conoco Hungary Kft. Conoco Colombia Ltd.
Conoco Asia Ltd. Conoco Mineraloel GMBH
Conoco Indonesia Inc. Conoco Petcoke Far East Ltd.
Conoco Asia Pacific Sdn Bhd Conoco Mexico Servicios, S.A. de C.V.
Projet Malaysia Sdn Bhd Conoco International Inc.
Conoco Jet Malaysia SDN BHD Conoco Shipping Company (Spain)
DuPont Services BV Conoco EurAsia Inc.
Conoco Energy Nigeria Ltd. Conoco Limited
Norske Conoco AS Conoco (UK) Ltd.
Conoco Norge AS Conoco Inc (Parent Company)
Conoco Poland Sp. z.o.o. Conoco Pipeline Ltd.
Conoco International Petroleum Co. (CIPC) Enertech N.V.
Conoco Slovakia s.r.o. Louisiana Gas Systems Inc.
Conoco Nordic AB Kayo
Conoco Thailand Ltd. Conoco Venezuela Ltd.
</TABLE>
Attachment B-1
<PAGE> 15
ATTACHMENT "C"
TO
CONOCO INC.
GLOBAL PERFORMANCE SHARING PLAN
For All Participating Countries Amount subject to Employee Award for
Initial Grants is one hundred fifty
(150) shares of Common Stock
Attachment C-1
<PAGE> 16
ATTACHMENT "D"
1. "CHANGE IN CONTROL"
A "Change in Control" shall be deemed to have occurred if the event
set forth in any one of the following paragraphs shall have occurred:
(i) any Person is or becomes the Beneficial Owner, directly or
indirectly, of securities of Conoco (not including in the securities
beneficially owned by such Person any securities acquired directly
from Conoco) representing 30% or more of the combined voting power of
Conoco's then outstanding securities, excluding any Person who becomes
such a Beneficial Owner in connection with a transaction described in
clause (A) of paragraph (iii) below; or
(ii) the following individuals cease for any reason to constitute a
majority of the number of directors then serving: individuals who, on
the date hereof, constitute the Board and any new director (other than
a director whose initial assumption of office is in connection with an
actual or threatened election contest, including but not limited to a
consent solicitation, relating to the election of directors of Conoco)
whose appointment or election by the Board or nomination for election
by Conoco's stockholders was approved or recommended by a vote of at
least two-thirds (2/3) of the directors then still in office who
either were directors on the date hereof or whose appointment,
election or nomination for election was previously so approved or
recommended; or
(iii) there is consummated a merger or consolidation of Conoco or
any direct or indirect subsidiary of Conoco with any other
corporation, other than (A) a merger or consolidation which would
result in the voting securities of Conoco outstanding immediately
prior to such merger or consolidation continuing to represent (either
by remaining outstanding or by being converted into voting securities
of the surviving entity or any parent thereof), in combination with
the ownership of any trustee or other fiduciary holding securities
under an employee benefit plan of Conoco or any subsidiary of Conoco,
at least 50% of the combined voting power of the securities of Conoco
or such surviving entity or any parent thereof outstanding immediately
after such merger or consolidation, or (B) a merger or consolidation
effected to implement a recapitalization of Conoco (or similar
transaction) in which no Person is or becomes the Beneficial Owner,
directly or indirectly, of securities of Conoco representing 30% or
more of the combined voting power of Conoco's then outstanding
securities; or
(iv) the stockholders of Conoco approve a plan of complete
liquidation or dissolution of Conoco or there is consummated an
agreement for the sale or disposition by Conoco of all or
substantially all of Conoco's assets, other than a sale or disposition
by Conoco of all or substantially all of Conoco's assets to an entity,
at least 50% of the combined voting power of the voting securities of
which are owned by stockholders of Conoco in
Attachment D-1
<PAGE> 17
substantially the same proportions as their ownership of Conoco
immediately prior to such sale.
Notwithstanding the foregoing, a "Change in Control" shall not be deemed to
have occurred by virtue of the consummation of any transaction or series of
integrated transactions immediately following which the record holders of the
common stock of Conoco immediately prior to such transaction or series of
transactions continue to have substantially the same proportionate ownership in
an entity which owns all or substantially all of the assets of Conoco
immediately following such transaction or series of transactions.
For purposes of the definition of "Change in Control" set forth above,
the following terms have the indicated meanings:
"Affiliate" has the meaning set forth in Rule 12(b)(2) promulgated
under Section 12 of the Exchange Act.
"Beneficial Owner" shall have the meaning set forth in Rule 13(d)(3)
under the Exchange Act.
"Exchange Act" means the U.S. Securities Exchange Act of 1934, as
amended from time to time, or such other governing securities law in each local
jurisdiction in which an Employee Award is offered under this Plan.
"Person" shall have the meaning given in Section 3(a)(9) of the
Exchange Act, as modified and used in Sections 13(d) and 14(d) thereof, except
that such term shall not include (i) Conoco or any of its Affiliates
(including, without limitation, DuPont), (ii) a trustee or other fiduciary
holding securities under an employee benefit plan of Conoco or any of its
Affiliates, (iii) an underwriter temporarily holding securities pursuant to an
offering of such securities, or (iv) a corporation owned, directly or
indirectly, by the stockholders of Conoco in substantially the same proportions
as their ownership of stock of Conoco.
"Potential Change in Control" shall be deemed to have occurred if: (a)
Conoco enters into a written agreement, the consummation of which would result
in the occurrence of a Change in Control; or (b) any Person (including Conoco)
publicly announces the intention to take or consider taking actions which if
consummated would constitute a Change in Control.
2. "QUALIFYING TERMINATION"
(a) A "Qualifying Termination" of a Participant shall be deemed to
have occurred if the employment of the Participant with Conoco or its
subsidiaries is terminated on or within two (2) years following the date of the
Change in Control (i) by Conoco or its subsidiaries other than for Cause or
(ii) by the Participant for Good Reason. A Participant will not be considered
to have incurred a Qualifying Termination if his or her employment is
discontinued by reason of the Participant's death or a physical or mental
condition causing such Participant's inability to substantially perform the
Participant's duties with his or her employer, including, without limitation,
Attachment D-2
<PAGE> 18
such condition entitling him or her to benefits under any sick pay or
disability income policy or program of the Participant's employer.
(b) For purposes of the Plan, the Participant's employment shall
be deemed to have been terminated following a Change in Control by Conoco or
its subsidiaries without Cause or by the Participant for Good Reason, if (i)
the Participant's employment is terminated by Conoco or its subsidiaries
without Cause following a Potential Change in Control and prior to a Change in
Control (whether or not a Change in Control ever occurs) and such termination
was at the request or direction of a Person who has entered into a written
agreement with Conoco or an Affiliate of Conoco the consummation of which would
constitute a Change in Control or (ii) the Participant terminates his or her
employment for Good Reason following a Potential Change in Control and prior to
a Change in Control (whether or not a Change in Control ever occurs) and the
circumstance or event which constitutes Good Reason occurs at the request or
direction of such Person.
(c) Notwithstanding anything herein to the contrary, Good Reason
shall not be deemed to have occurred unless Conoco shall have been given (1)
written notice of Participant's assertion that an event constituting Good
Reason has occurred, which notice shall be given not less than thirty (30) days
prior to the date of termination to which such notice relates, and (2) a
reasonable opportunity to cure such occurrence during such thirty (30) day
period.
(d) For purposes of the definition of "Qualifying Termination" set
forth above, the following terms have the indicated meanings:
"Cause" means (i) the willful and continued failure by the Participant
to substantially perform the Participant's duties with his or her employer
(other than any such failure resulting from the Participant's incapacity due to
physical or mental illness), or (ii) the willful engaging, not in good faith,
by the Participant in conduct which is demonstrably injurious to Conoco or its
subsidiaries, monetarily or otherwise.
"Good Reason" means the occurrence, on or after the date of a Change
in Control or prior to a Change in Control under the circumstances described in
clauses (i) or (ii) of paragraph 2(b) above (treating all references in
paragraphs (i) through (iii) below to a "Change in Control" as references to a
"Potential Change in Control"), and without the Participant's written consent,
of (i) the assignment to the Participant of duties in the aggregate that are
inconsistent with the Participant's level of responsibility immediately prior
to the date of the Change in Control or any diminution in the nature or status
of the Participant's responsibilities from those in effect immediately prior to
the date of the Change in Control; (ii) a reduction by Conoco or its
subsidiaries in the Participant's annual base salary or any adverse change in
the Participant's aggregate annual and long term incentive compensation
opportunity from that in effect immediately prior to the Change in Control
which change is not pursuant to a program applicable to all comparably situated
employees of Conoco; or (iii) the relocation of the Participant's principal
place of employment to a location more than thirty-five (35) miles from the
Participant's principal place of employment immediately prior to the date of
the Change in Control.
Attachment D-3
<PAGE> 19
ADDENDUM "A"
TO
CONOCO INC.
GLOBAL PERFORMANCE SHARING PLAN
The following are provisions, in addition to those provisions in the Plan, which
are applicable to Employees in the respective Participating Countries listed
below. As used herein, capitalized terms shall have the respective meanings
ascribed to such terms in the Plan.
1. AUSTRIA. This Plan is revocable at any time and is a freely offered benefit
by the Participating Employer and is not subject to any legal
claim as to termination indemnities or severance payments.
2. CANADA. There are no additional rights accruing to an eligible Employee as
a result of this Plan and the Participating Employees right to
terminate an eligible Employee is not deemed to have been
prejudiced as a result of the offering and/or implementation of
the Plan.
3. GERMANY. This Plan is revocable at any time and is a freely offered benefit
by the Participating Employer and is not subject to any legal
claim as to termination indemnities or severance payments.
4. MEXICO. This Plan may be used to offset and/or compensate any future
performance or profit sharing plans to be established by
applicable law or by collective agreement.
Addendum A-1
<PAGE> 20
ADDENDUM "B"
TO
CONOCO INC.
GLOBAL PERFORMANCE SHARING PLAN
CONOCO INC.
1998 UK STOCK OPTION SCHEME
1. DEFINITIONS AND INTERPRETATION
(1) Unless the context otherwise requires, all expressions defined
in the US Plan shall have the same meaning in the UK Scheme,
save that:
"Fair Market Value" has the meaning set forth in sub-rule
5(3);
"Option" includes an Approved Stock Option as defined in
sub-rule 1(2).
(2) In addition, the following expressions shall have the
following meanings in the UK Scheme unless the context
otherwise requires:
"Approved Stock Option" means an Option granted in accordance
with the UK Scheme;
"Company" means Conoco Inc.;
"Grant Date" in relation to an option means the date on which
the option was granted;
"the Inland Revenue" means the United Kingdom's Commissioners
of Inland Revenue;
"Participating Company" means the Company or a Subsidiary of
the Company;
"Schedule 9" means Schedule 9 to the Taxes Act;
"Subsidiary" shall mean a body corporate, whether now or
hereafter existing, which is:
(a) a subsidiary of the Company within the meaning of
Section 736 of the United Kingdom Companies Act 1985;
and is
(b) under the control of the Company within the meaning
of Section 840 of the Taxes Act.
Addendum B-1
<PAGE> 21
"the Taxes Act" means the United Kingdom's Income and
Corporation Taxes Act 1988;
"the Terms and Conditions" mean terms and conditions specified
in the Conoco Inc. 1998 Global Performance Sharing Plan
Employee Award Agreement;
"the UK Scheme" means the Conoco Inc. 1998 UK Stock Option
Scheme as herein set out but subject to any alterations or
additions made under Rule 8 below; and
"the US Plan" means the 1998 Conoco Inc. Global Performance
Sharing Plan.
(3) Expressions not otherwise defined herein have the same meaning
as they have in Schedule 9.
(4) Any reference herein to any enactment includes a reference to
that enactment as from time to time modified, extended or
re-enacted.
2. APPLICABILITY OF THE US PLAN AND THE TERMS AND CONDITIONS
Save as hereinafter specified, all the term and provisions of the US
Plan and the Terms and Conditions shall apply mutatis mutandis to the
grant of Approved Stock Options under the UK Scheme.
3. ELIGIBILITY
(1) Subject to sub-rule (3) below, a person is eligible to be
granted an Approved Stock Option if (and only if) he is a
full-time director or qualifying employee of a Participating
Company.
(2) For the purposes of sub-rule (1) above:
(a) a person shall be treated as a full-time director of
a Participating Company if he is obliged to devote to
the performance of the duties of his or her office or
employment with that and any other Participating
Company not less than 25 hours a week (excluding meal
breaks);
(b) a qualifying employee, in relation to a Participating
Company, is an employee of the Participating Company
(other than one who is a director of a Participating
Company).
(3) A person is not eligible to be granted an Option under the UK
Scheme at any time when he is not eligible to participate in
the UK Scheme by virtue of paragraph 8 of Schedule 9.
Addendum B-2
<PAGE> 22
4. GRANT OF OPTIONS
(1) Notwithstanding Paragraph 6(b) of the US Plan, the Approved
Stock Options to be issued as part of the Initial Grant shall
only be granted by action of the Board or such other persons
as are authorized by the Board on the IPO Pricing Date.
Subject to sub-rule (3) below, the Committee may grant to any
person who is eligible to be granted an Option under the UK
Scheme an Approved Stock Option to acquire Shares which
satisfy the requirements of paragraphs 10 to 14 of Schedule 9,
upon the terms set out in the UK Scheme and upon such other
objective terms as the Committee may reasonably specify.
(2) The grant of an Approved Stock Option shall be subject to
obtaining any approval or consent which may be required under
the provisions of any regulation or enactment.
(3) No person shall be granted Approved Stock Options under the UK
Scheme which would, at the time they are granted, cause the
aggregate market value of the Shares which he may acquire in
pursuance of options granted to him under the UK Scheme or
under any other share option scheme, not being a
savings-related share option scheme, approved under Schedule 9
and established by the Company or by any associated company of
the Company (and not exercised) to exceed or further exceed
30,000. Any Stock Options granted in excess of this amount
shall be granted under the US Plan.
(4) For the purposes of sub-rule (3) above:
(a) in the case of an Option granted under the UK Scheme
the aggregate market value of shares shall be
calculated as on the day by reference to which the
price at which Shares may be acquired by the exercise
thereof is determined as mentioned in Rule 5(2)
below;
(b) in the case of an Option granted under any other
approved scheme, as at the time when it was granted
or, in a case where an agreement relating to the
shares has been made under paragraph 29 of Schedule
9, such earlier time or times as may be provided in
the agreement; and
(c) in the case of any other Option, the aggregate fair
market value of shares shall be calculated as on the
day or days by reference to which the price at which
shares may be acquired by the exercise hereof was
determined.
(5) Unless otherwise agreed with the Inland Revenue, the United
States dollar exchange rate for pounds sterling for the
purposes of calculating the limit in sub-rule (3) above shall
be the noon buying rate in the City of London on the day by
Addendum B-3
<PAGE> 23
reference to which the price at which Shares may be acquired
on the exercise of the Option is determined as mentioned in
Rule 5(2) below.
5. EXERCISE PRICE AND CONSIDERATION
(1) Shares shall be issued to the Participant pursuant to the
exercise of an Option only upon receipt by the Company from
the Participant of payment in full in cash. The Committee may,
in its sole and absolute discretion, permit the exercise of an
Approved Stock Option by cashless exercise through an
arrangement with a brokerage firm, under which the brokerage
firm, on behalf of the participant, pays for all or a portion
of the Shares of Common Stock purchased upon the exercise of
the Approved Stock Option.
(2) The price per Share under each Approved Stock Option granted
by the Committee shall be such price as is determined by the
Committee before the grant thereof, provided that it shall not
be less than 100% of the Fair Market Value per Share on the
Option Grant Date (or such other dealing day as may be agreed
with the Inland Revenue).
(3) Save where the price per Share to the public of the Common
Stock in the IPO is agreed by Shares Valuation Division of the
Inland Revenue as not being less than the market value of a
Share for the purposes of the UK Scheme the Fair Market Value
per Share on any day shall be determined as follows:
(a) if shares of the same class as the Shares are quoted
on the New York Stock Exchange, the Fair Market Value
per Share shall be the closing price per Share in the
New York Stock Exchange on the consolidated
transaction reporting system on that day (and if
there shall be no sale of Shares reported on such
date, the Fair Market Value shall be deemed equal to
the closing price per Share on the consolidated
transaction reporting system for the last preceding
date on which sales of Shares were reported);
(b) If paragraph (a) above does not apply, the Fair
Market Value shall be equal to the market value
(within the meaning of Part VIII of the United
Kingdom's Capital Gains Tax Act 1992) of Shares, as
agreed for the purposes of the UK Scheme with the
Shares Valuation Division of the Inland Revenue, on
that day.
6. EXERCISE OF OPTIONS
(1) A person is not eligible to exercise an Approved Stock Option
granted under the UK Scheme at any time when he is not
eligible to participate in the UK Scheme by virtue of
paragraph 8 of Schedule 9.
Addendum B-4
<PAGE> 24
(2) Paragraphs 6 and 7 of the US Plan and Section 6 and, subject
to Rule 5(1) above, Section 7 of the Terms and Conditions
shall apply in respect of Approved Stock Options granted under
the UK Scheme.
(3) An Approved Stock Option granted under the UK Scheme may not
in any circumstances be exercised later than twelve (12)
months after the death of the Participant.
7. ADJUSTMENTS UPON CHANGES IN CAPITALIZATION OR MERGER
(1) Paragraph 14 of the US Plan shall apply to Approved Stock
Options granted under the UK Scheme in respect of a variation
of capital of the Company only, save that no adjustment under
Paragraph 14 shall be made to an Approved Stock Option at a
time when the UK Scheme is approved by the Inland Revenue
under Schedule 9 without the prior approval of the Inland
Revenue.
(2) If any company ("the acquiring company") obtains control of
the Company as a result of making:
(a) a general offer to acquire the whole of the Common
Stock of the Company which is made on a condition
such that if it is satisfied the person making the
offer will have control of the Company, or
(b) a general offer to acquire all the shares in the
Company which are of the same class as the Shares
which may be acquired by the exercise of Options
granted under the UK Scheme,
any Participant may at any time within the appropriate period
(which expression shall be construed in accordance with
paragraph 15(2) of Schedule 9), by agreement with the
acquiring company, release any Option granted under the UK
Scheme which has not lapsed ("the old option") in
consideration of the grant to him of an option ("the new
option") which (for the purposes of that paragraph) is
equivalent to the old option but relates to shares in a
different company (whether the acquiring company itself or
some other company falling within paragraph 10(b) or (c) of
Schedule 9).
(3) The new option shall not be regarded for the purposes of
sub-rule (2) above as equivalent to the old option unless the
conditions set out in paragraph 15(3) of Schedule 9 are
satisfied, but so that the provisions of the UK Scheme shall
for this purpose be construed as if:
(a) the new option was an option granted under the UK
Scheme at the same time as the old option;
Addendum B-5
<PAGE> 25
(b) except for the purposes of the definitions of
"Participating Company" and "Subsidiary" in Rule 1
above and the references to "the Committee" in Rule
4(1) above, the reference to Conoco Inc. in the
definition of Conoco in Paragraph 3 of the US Plan
was a reference to the different company mentioned in
sub-rule (2) above.
8. AMENDMENT AND TERMINATION OF THE UK SCHEME
(1) The provisions of Paragraph 6 and Paragraph 12 of the US Plan
apply mutatis mutandis to the UK Scheme, save that if an
amendment is made to the UK Scheme or to the terms of an
Approved Stock Option at a time when the UK Scheme is approved
by the Inland Revenue under Schedule 9, the approval will not
thereafter have effect unless the Inland Revenue have approved
the alteration or addition.
(2) As soon as reasonably practicable after making any amendment
to the UK Scheme under sub-rule (1) above, the Committee shall
give notice in writing thereof to any Participant affected
thereby and, if the UK Scheme is then approved by the Inland
Revenue under Schedule 9, to the Inland Revenue.
(3) In accordance with the Committee's powers under Paragraph 9 of
the US Plan, the Committee shall if it deems necessary
delegate authority to any one or more of the officers of the
Company to be responsible for the administration of the UK
Scheme.
(4) The Committee or officer(s) of the Company to whom authority
has been delegated may amend or alter the UK Scheme either as
it is considered necessary (or as may be consequential upon
such necessary amendments) to enable the UK Scheme to obtain
or maintain the approval of the Inland Revenue under Schedule
9 or take account of any applicable legislation.
9. MISCELLANEOUS
(1) Options granted under the UK Scheme shall not be transferable
or assignable other than by will or by the laws of decent and
distribution and Paragraph 13 of the US Plan shall only apply
to Options granted under the UK Scheme in this respect.
(2) Within thirty days after an Option has been exercised by any
person, the Committee on behalf of the Company shall allot to
him or, as appropriate, procure the transfer to him of the
number of Shares in respect of which the Option has been
exercised.
(3) All Shares allotted under the UK Scheme shall rank pari passu
in all respects with the Shares of the same class for the time
being in issue save as regards any rights
Addendum B-6
<PAGE> 26
attaching to such shares by reference to a record date prior
to the date of the allotment.
(4) Sections 9 to 17 of the Terms and Conditions shall apply in
respect of Approved Stock Options to the extent permitted
under the UK Scheme.
(5) Paragraph 7(e) of the US Plan and the final sub-paragraph of
Section 6 of the Terms and Conditions shall not apply to
Approved Stock Options.
(6) For the avoidance of doubt references to Stock Appreciation
Rights in the US Plan and the Terms and Conditions shall be
disregarded for the purposes of the UK Scheme.
Addendum B-7
<PAGE> 1
EXHIBIT 5.1
[Letterhead of Baker & Botts, L.L.P.]
October 22, 1998
Conoco Inc.
600 North Dairy Ashford
Houston, Texas 77079
Gentlemen:
As set forth in the Registration Statement on Form S-8 (the
"Registration Statement") to be filed by Conoco Inc., a Delaware corporation
(the "Company"), with the Securities and Exchange Commission (the "Commission")
under the Securities Act of 1933, as amended (the "Act"), relating to up to
1,900,000 shares (the "Shares") of Class A Common Stock of the Company, par
value $.01 per share, issuable pursuant to the Conoco Inc. 1998 Global
Performance Sharing Plan (the "Plan"), we are passing upon certain legal matters
in connection with the Shares for the Company. At your request, we are
furnishing this opinion to you for filing as Exhibit 5.1 to the Registration
Statement.
In our capacity as your counsel in the connection referred to above,
we have examined the Plan, the Amended and Restated Certificate of
Incorporation and Bylaws of the Company, each as amended to date, and the
originals, or copies certified or otherwise identified, of corporate records of
the Company, including minute books of the Company as furnished to us by the
Company, certificates of public officials and of representatives of the
Company, statutes and other instruments and documents as a basis for the
opinions hereinafter expressed. In giving such opinions, we have relied upon
certificates of officers of the Company and of public officials with respect to
the accuracy of the material factual matters contained in such certificates.
We have assumed that all signatures on all documents examined by us
are genuine, that all documents submitted to us as originals are accurate and
complete, that all documents submitted to us as copies are true and correct
copies of the originals thereof and that all information submitted to us was
accurate and complete. In addition, we have assumed for purposes of paragraph
2 below that the consideration received by the Company for the Shares will be
not less than the par value of the Shares.
On the basis of the foregoing, and subject to the assumptions,
limitations and qualifications set forth herein, we are of the opinion that:
1. The Company is a corporation duly organized and
validly existing in good standing under the laws of the State of
Delaware.
2. Upon the issuance and sale of Shares originally
issued by the Company pursuant to the provisions of the Plan for
consideration fixed in accordance with the Plan, following due
authorization of the award with respect to which such Shares are
issuable by the Board of Directors of the Company or a duly constituted
and acting committee of the Board of Directors of the Company as
provided in and in accordance with the Plan, such Shares will be duly
authorized by all necessary corporate action on the part of the
Company, validly issued, fully paid and nonassessable.
The opinions set forth above are limited in all respects to the General
Corporation Law of the State of Delaware as in effect on the date hereof.
We hereby consent to the filing of this opinion with the Commission as
Exhibit 5.1 to the Registration Statement. In giving such consent, we do not
admit that we are within the category of persons whose consent is required
under Section 7 of the Act or the rules and regulations of the Commission
thereunder.
Very truly yours,
BAKER & BOTTS, L.L.P.
<PAGE> 1
EXHIBIT 15.1
Securities and Exchange Commission
450 Fifth Street, N.W.
Washington, D.C. 20549
Ladies and Gentlemen:
We are aware that Conoco Inc., a Delaware corporation ("Conoco"), has
incorporated by reference in this Registration Statement on Form S-8 our report
dated September 28, 1998 (issued pursuant to the provisions of Statement on
Auditing Standards No. 71) included in the Company's prospectus dated October
21, 1998 as filed with the Securities and Exchange Commission pursuant to Rule
424(b) under the Securities Act of 1933 (the "Prospectus"). In addition, we
are aware that Conoco has incorporated by reference in this Registration
Statement on Form S-8 our report dated October 21, 1998 on the pro forma
combined balance sheet as of June 30, 1998 and the pro forma combined
statements of income for the six-month periods ended June 30, 1997 and 1998
included in the Prospectus. We are also aware of our responsibilities under
the Securities Act of 1933.
Yours very truly,
PRICEWATERHOUSECOOPERS LLP
Houston, Texas
October 21, 1998
<PAGE> 1
EXHIBIT 23.1
CONSENT OF INDEPENDENT ACCOUNTANTS
We hereby consent to the incorporation by reference in this Registration
Statement on Form S-8 of our reports dated July 24, 1998 and October 21, 1998
relating to the combined financial statements and the pro forma combined
statement of income, respectively, of Conoco, which appear in the Company's
prospectus dated October 21, 1998 as filed with the Securities and Exchange
Commission pursuant to Rule 424(b) under the Securities Act of 1933.
PRICEWATERHOUSECOOPERS LLP
Houston, Texas
October 21, 1998
