SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D. C. 20549
FORM 11-K
(Mark One)
[X] Annual Report
Pursuant to Section 15(d) of the
Securities Exchange Act of 1934
(Fee Required)
For the fiscal year ended June 30, 1994
OR
[ ] Transition report pursuant to Section 15(d)
of the Securities Exchange Act of 1934
(No Fee Required)
For the transition period from
Commission File Numbers 33-21553 and 33-23640
ATLANTIC RICHFIELD CAPITAL ACCUMULATION PLAN III
(Title of the Plan)
ATLANTIC RICHFIELD COMPANY
515 South Flower Street
Los Angeles, California 90071
(Name and address of principal executive
office of the issuer of the securities)
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The financial statements and schedules are prepared in
accordance with the financial reporting requirements of
ERISA and are filed under cover of Form SE, pursuant to Rule
311(c) of Regulation S-T.
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ATLANTIC RICHFIELD CAPITAL ACCUMULATION PLAN III
SIGNATURES
Pursuant to the requirements of the Securities Exchange
Act of 1934, the trustees (or other persons who administer
the Plan) have duly caused this annual report to be signed
on its behalf by the undersigned hereunto duly authorized.
ATLANTIC RICHFIELD CAPITAL
ACCUMULATION PLAN III
/s/CYNTHIA L. BENGTSON
By_________________________
Cynthia L. Bengtson
Secretary of the Capital
Accumulation Plan III
Administrative Committee
Date: December 16, 1994
ATLANTIC RICHFIELD
CAPITAL ACCUMULATION PLAN III
INTRODUCTION
This Plan is intended to qualify as a Stock Bonus Plan under
Section 401(a) of the Internal Revenue Code of 1986, as amended,
and as a Qualified Cash or Deferred Arrangement under Section
401(k) of the Code. Part of the Plan (the "ESOP Part") is
intended to qualify as an Employee Stock Ownership Plan under
Section 4975(e)(7) of the Code and such part is designed to
invest primarily in Atlantic Richfield Company Common Stock.
The class of employees eligible to participate in this Plan
previously participated in the Atlantic Richfield Capital
Accumulation Plan. The assets and liabilities of the Atlantic
Richfield Capital Accumulation Plan allocable as of June 30, 1988
to the participants in this Plan who commenced participation
effective July 1, 1988 were transferred to this Plan. This Plan
is a continuation of the Atlantic Richfield Capital Accumulation
Plan with respect to the former participants of such plan who
transferred to, and commenced participation in, this Plan
effective July 1, 1988.
This amendment and restatement of the Plan is effective July 1,
1994, except as otherwise indicated, and is intended to bring the
Plan into compliance with the Tax Reform Act of 1986, subsequent
legislation, and relevant regulations and rulings. The provisions
of this amended and restated plan apply to persons who are employed
on or after July 1, 1994, unless otherwise indicated.
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SECTION 1
DEFINITIONS
1.1 Acquisition Loan means a loan or other extension of credit
used by the Trustee to finance the acquisition of Atlantic
Richfield Company Common Stock.
1.2 Administrator means the Capital Accumulation Plan
Administrative Committee.
1.3 Annual Earnings or Earnings means:
(a) The annual, actual wages or salary paid to a Member for
the Member's personal service, including the amount of
any salary reduction pursuant to Section 125 and
Section 401(k) of the Code, as amended, but excluding
the Alaska benefit base enhancement<F1> and, effective
September 1, 1994, foreign service premiums<F2>, and
extra pay such as overtime, premiums, bonuses, living
or other allowances. Effective for Plan Years
commencing on and after January 1, 1989 and prior to
July 1, 1994, Annual Earnings or Earnings shall not
exceed $200,000 as adjusted each Plan Year by the
Secretary of Treasury or the Secretary's delegate, at
the same time and in the same manner as under Section
415(d) of the Code. Effective July 1, 1994, Annual
Earnings or Earnings shall not exceed $150,000, as
adjusted each plan year pursuant to Section
401(a)(7)(B) of the Code.
(b) In determining the Earnings of a Member, the rules of
Section 414(q)(6) of the Code shall apply, except in
applying such rules, the term "family" shall include
only the spouse of the Member and any lineal
descendants of the Member who have not attained age 19
before the close of the year. If, as a result of the
application of such rules the adjusted limitation is
exceeded, then the limitation shall be prorated among
the affected individuals in proportion to each such
individual's Earnings as determined under this
paragraph prior to the application of this limitation.
____________________
<F1> The exclusion of the Alaska benefit base enhancement shall
not be effective until January 1, 1996 with respect to a Member
in receipt of such enhancement on May 31, 1994. The Alaska
benefit base enhancement shall not exceed a Member's Alaska cost
of living allowance.
<F2> The exclusion of foreign service premiums shall not apply to
a Member who on September 1, 1994 is in a foreign assignment
until such time as the Member leaves the country in which the
Member is employed on September 1, 1994 or, if later, completes
the assignment in which the Member was engaged on September 1,
1994.
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1.4 Capital Accumulation Plan Administrative Committee means the
committee provided for in Section 9 of this Plan.
1.5 Code means the Internal Revenue Code of 1986, as amended.
1.6 Company means Atlantic Richfield Company and such of its
Subsidiaries or Affiliates whose Employees are included in
this Plan upon authorization of the Board of Directors of
Atlantic Richfield Company and adoption of this Plan by the
Board of Directors of such authorized Subsidiary or Affiliate.
1.7 Credited Company Service means service with the Company, a
predecessor company, and/or a Subsidiary or Affiliate which
service the Company recognizes, on a basis uniformly applicable
to all persons similarly situated, for purposes of this Plan.
1.8 Effective Date means the effective date of this amended and
restated Plan which is July 1, 1994, unless otherwise indicated.
1.9 Elective Deferrals or Deferrals means reductions pursuant to
a Salary Reduction Agreement, in whole percentages from one
percent through 12 percent, of a Member's Annual Earnings,
which amounts are transferred by the Company to the Trustee
of the Plan.
1.10 Employee means any person who:
(a) Is employed by the Company;
(b) Is represented by a collective bargaining agent
which has negotiated the benefits of this Plan; and
(c) With respect to whom neither Company contributions
nor Elective Deferrals are being made under the
Atlantic Richfield Capital Accumulation Plan II.
1.11 ERISA means the Employee Retirement Income Security Act of 1974.
1.12 Financed Shares means shares of Atlantic Richfield Company Common
Stock acquired by the Trustee with the proceeds of an Acquisition Loan.
1.13 Highly Compensated Employee means for Plan Years beginning after
December 31, 1986:
(a) Any Employee who performs service during the
determination year and is described in one or more of
the following groups:
(i) An employee who is a five percent owner, as
defined in Section 416(i)(1) of the Code, at any
time during the determination year or the look-
back year, as defined below;
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(ii) An employee who receives compensation in excess of
$75,000, as adjusted pursuant to Section 415(d) of
the Code for Plan Years commencing after December
31, 1987, during the look-back year;
(iii) An employee who receives compensation in
excess of $50,000, as adjusted pursuant to Section
415(d) of the Code for Plan Years commencing after
December 31, 1987, during the look-back year and
is a member of the top-paid group, as defined
below, for the look-back year;
(iv) An employee who is an officer, within the meaning
of Section 416(i) of the Code, during the look-
back year and who receives compensation in the
look-back year greater than 50 percent of the
dollar limitation in effect under Section
415(b)(1)(A) of the Code for the calendar year in
which the look-back year begins; or
(v) An employee who is both described in Subparagraphs
1.13(a)(ii), (iii), or (iv) when these subparagraphs
are modified to substitute the determination year
for the look-back year and one of the 100 employees
who receives the most compensation from the Employer
during the determination year.
(b) For purposes of the definition of Highly Compensated
Employee the following will apply:
(i) The determination year is the Plan Year for which
the determination of who is highly compensated is
being made; or if the Company makes the election
pursuant to Treas. Reg. 1.414(q)-IT Q&A-14(b), the
period by which the determination year extends
beyond the calendar year referred to in
Subparagraph 1.13(b)(ii).
(ii) The look-back year is the 12-month period
immediately preceding the determination year, or
if the Company makes the election pursuant to
Treas. Reg. 1.414(q)-IT Q&A-14(b), the calendar
year ending with or within the determination year.
(iii) The top-paid group consists of the top 20
percent of employees ranked on the basis of
compensation received during the year. For
purposes of determining the number of employees in
the top paid group, employees who have not
completed six months of service by the end of the
Plan Year (including service in the immediately
preceding Plan Year); who normally work less than
17-1/2 hours per week; who work less than six
months during any year; who are nonresident aliens
with no income from sources within the United States
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or who have not had their 21st birthday by
the end of the Plan Year shall be included.
(iv) The number of officers is limited to 50.
(v) When no officer has compensation in excess of 50
percent of the Section 415(b) Code limit, the
highest paid officer is treated as highly compensated.
(vi) Employers aggregated under Section 414(b), (c),
(m), or (o) of the Code are treated as a single employer.
(vii) Compensation, for purposes of this Paragraph
1.13 means compen-sation within the meaning of
Section 415(c)(3) of the Code, without regard to
Section 125, Section 402(g)(3) and Section
402(h)(1)(B) of the Code.
(c) If an employee is, during a determination year or look-
back year, a family member of either a five percent
owner who is an active or former employee or a Highly
Compensated Employee who is one of the ten most Highly
Compensated Employees ranked on the basis of
compensation paid by the employer during such year, then
the family member and the five percent owner or top-ten
Highly Compensated Employee shall be aggregated. In
such case, the family member and five percent owner or
top-ten Highly Compensated Employee shall be treated as
a single employee receiving compensation and plan
contributions equal to the sum of such compensation and
contributions of the family member and five percent
owner or top-ten Highly Compensated Employee. For
purposes of this section, family member includes the
spouse, lineal ascendants and descendants of the
employee or former employee and the spouses of such
lineal ascendants and descendants.
(d) A former employee who has a separation year prior to
the determination year and who was a highly compensated
active employee for either (i) such employee's
separation year, or (ii) any determination year ending
on or after the employee's 55th birthday will be a
Highly Compensated Employee. Generally, a separation
year is the determination year the employee separates
from service. An Employee who separated from service
before January 1, 1987, will be included as a Highly
Compensated Employee only if the Employee was a five
percent owner or received compensation in excess of
$50,000 during the year.
(e) If elected by Atlantic Richfield Company, Subparagraph
1.13(a) shall be modified by:
(i) Substituting $50,000 for $75,000 in Subparagraph
1.13(a)(ii) and by disregarding Subparagraph
1.13(a)(iii). This simplified definition of
Highly Compensated Employee will
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apply if the Company maintains significant business
activities (and employ employees) in at least two
significantly separate geographic areas; or
(ii) Substituting the simplified method pursuant to
Section 4 of Rev. Proc. 93-42, in which case the
Highly Compensated Employees shall be determined
under Subparagraph 1.13(a) on the basis of the
look-back year and determination year, or the
determination year only, taking into account all
employees employed during such year.
(f) The determination of who is a Highly Compensated
Employee, including the determinations of the number
and identity of employees in the top-paid group, the
top 100 employees, the number of employees treated as
officers and the compensation that is considered, will
be made in accordance with Section 414(q) of the Code
and the regulations thereunder.
1.14 Hour of Service means:
(a) Each hour for which an Employee is paid, or entitled to
payment, for the performance of duties for the Company
or any Subsidiary or Affiliate during the computation
period in which the duties are performed.
(b) Each hour for which an Employee is paid, or entitled to
payment, by the Company or any Subsidiary or Affiliate
on account of a period of time during which no duties
are performed (irrespective of whether the employment
relationship has terminated) due to vacation, holiday,
illness, incapacity (including disability), layoff,
jury duty, military duty or leave of absence.
(c) Each hour for which back pay, irrespective of mitigation
of damages, is either awarded or agreed to by the Company
or any Subsidiary or Affiliate. Such hours shall be
credited to the Employee for the computation period or
periods to which the award or agreement pertains.
(d) An Employee will be credited with 200 Hours of Service,
to the extent required by Federal law, for each month
during which the Employee is on active duty in the
Armed Forces of the United States and for which the
Employee is not paid or entitled to be paid by the
Company or any Subsidiary or Affiliate.
(e) Hours credited for any period under any provision of
this Paragraph 1.14 may not also be credited for the
same period under any other provisions of this Plan.
Hours shall be credited under Subparagraphs 1.14(a)
thru (c) pursuant to U. S. Department of Labor
Regulations under 29CFR Section 2530.200b-2, which are
incorporated herein by this reference.
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(f) For all purposes under the Plan, an Employee shall be
credited with 200 Hours of Service for each calendar
month in which the Employee would otherwise be credited
with one or more Hours of Service.
(g) Solely for purposes of determining whether a break in
service has occurred in a computation period, and to
the extent it does not duplicate Hours of Service
credited under any other provision of this Paragraph
1.14, an individual who is absent from work for
maternity or paternity reasons shall receive credit for
the Hours of Service which would otherwise have been
credited to such individual but for such absence, or in
any case in which such hours cannot be determined,
eight Hours of Service per day of such absence. For
purposes of this subparagraph, an absence from work for
maternity or paternity reasons means an absence which
commences on or after January 1, 1985, and is (i) by
reason of the pregnancy of the individual; (ii) by
reason of a birth of a child of the individual; (iii)
by reason of the placement of a child with the
individual in connection with the adoption of the child
by such individual; or (iv) for purposes of caring for
such child for a period beginning immediately following
such birth or placement. The Hours of Service credited
under this subparagraph shall be credited within the
computation period in which the absence begins if the
crediting is necessary to prevent a break in service in
that period, or in all other cases, in the following
computation period.
1.15 Medical Board means the board of physicians provided for in
Paragraph 9.8.
1.16 Member means an Employee who has qualified for membership in
accordance with the requirements of this Plan.
1.17 Member's Account or Account means a separate account
maintained by the Trustee for each Member consisting of (a)
one subaccount to which is allocated the Member's Elective
Deferrals and transfers pursuant to Section 14 of the Plan,
as adjusted for earnings and withdrawals, and realized and
unrealized gains and losses attributable thereto; and (b) a
second subaccount to which is allocated the Company's
contribution as adjusted for earnings and withdrawals, and
realized and unrealized gains and losses attributable thereto.
1.18 Plan or Plans means the Atlantic Richfield Capital Accumulation
Plan III as set forth herein, and any amendments thereto.
1.19 Plan Year means the period commencing on July 1 of each calendar
and ending on June 30 of the immediately following calendar year.
1.20 Predecessor Plan means the Atlantic Richfield Capital
Accumulation Plan in the case of Members with respect to
whom assets and liabilities were transferred to this Plan
effective July 1, 1988.
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1.21 Salary Reduction Agreement means an agreement entered into
between the Member and the Company, and by which the Member
agrees to accept a reduction in Earnings from the Company
equal to any whole (or fractions, as required by adjustments
under Paragraph 3.3) percentage, per payroll period, not to
exceed 12 percent. This agreement shall apply to each payroll
period during the period it is in effect in which the Member
receives Earnings. In consideration of such agreement, the
Company will transfer to the Member's Elective Deferral
subaccount the amount of the Elective Deferral at the time
that regular salary payments are made to its Employees.
1.22 Subsidiary or Affiliate means:
(a) All corporations which are members of a controlled
group of corporations within the meaning of Section
1563(a) of the Code [determined without regard to
Section 1563(a)(4) and Section 1563(e)(3)(C) of said
Code] and of which Atlantic Richfield Company is then a
member. For purposes of Paragraphs 1.7 and 1.14,
Section 2 and Subparagraphs 3.3(c) and 11.8(b),
Subsidiary or Affiliate shall include Lyondell
Petrochemical Company and its Subsidiaries or
Affiliates; and
(b) All trades or businesses, whether or not incorporated,
which, under the regulations prescribed by the
Secretary of the Treasury pursuant to Section 210(d) of
ERISA or Section 414(c) of the Code, are then under
common control with Atlantic Richfield Company, or with
respect to the last sentence of Subparagraph 1.22(a),
Lyondell Petrochemical Company.
1.23 Trustee means the persons or corporations, or both,
designated by agreement of trust between them and Atlantic
Richfield Company to hold contributions from the Company,
Deferrals of Members, transfers pursuant to Section 14
investments thereof and earnings thereon. The duties and
responsibilities of the Trustee shall be those set forth in
the trust agreement.
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SECTION 2
MEMBERSHIP - ELIGIBILITY
2.1 Membership.
An Employee who is paid on a United States dollar payroll of
the Company may become a Member on the earlier of (a) or (b) below:
(a) Completion of six months of Credited Company Service,
(b) Completion of 1,000 Hours of Service during any 12
period commencing on the Employee's date of employment
or any anniversary thereof.
To become a Member, an Employee must enter into a Salary
Reduction Agreement in accordance with Section 3.
2.2 Notice to Administrator.
The Company shall advise the Administrator as to the date an
Employee becomes a Member. In the event that any question
arises as to the eligibility of any Employee, the decision
of the Administrator as to such Employee's eligibility shall
be binding upon the Company, the Employees, the Members, the
beneficiaries, and any and all other persons having or
claiming any interest hereunder.
2.3 Transferees.
If an Employee transfers to the Company from a Subsidiary or
Affiliate and the Employee was making an Elective Deferral
under a Capital Accumulation Plan as of the date of transfer,
the Employee shall be permitted to enter into a Salary
Reduction Agreement to make an Elective Deferral under this
Plan as soon as possible following the date of transfer.
2.4 Membership Termination.
(a) An Employee's membership shall terminate upon:
(i) Death, disability, dismissal, retirement or
termination of employment for any other reason;
(ii) Continuation of a Participant's employment with an
acquiring employer in conjunction with a sale to
the acquiring employer of substantially all of the
assets used by the Company or any Subsidiary or
Affiliate in a trade or business which such entity
conducts; or
(iii) A disposition of the Company's interest in a
Subsidiary or Affiliate when the Participant
continues employment with such Subsidiary or Affiliate.
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(b) A Member may not voluntarily terminate membership in
this Plan during active employment with the Company.
(c) If a Member transfers to a Subsidiary or Affiliate
which is not participating in this Plan, or to an
employment classification excluded from Plan
participation, the Member's Account shall not be
distributed until the Member has terminated employment
with Atlantic Richfield Company or all of its
Subsidiaries or Affiliates or is involved in a sale
described in Subparagraph 2.4(a)(ii) or (iii).
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SECTION 3
MEMBERS' ELECTIVE DEFERRALS
3.1 Members' Elections.
Each Member who is an Employee may enter into a Salary
Reduction Agreement with the Company providing for withholding
of Elective Deferrals from each of the Member's regular
paychecks at a rate of one percent to 12 percent of the
Member's Earnings, in whole percentages. A Salary Reduction
Agreement shall remain in effect until changed by the Member.
A Member's election shall be made in the manner prescribed
by the Administrator. Once during a calendar year, a Member
may change the Member's election with respect to the
Member's rate of future contributions by giving notice in
such manner as is prescribed by the Administrator. Such
changes shall be effective as of the payroll period beginning
after the date of receipt of such notice by the Administrator.
The Company may limit or reduce its Salary Reduction Agreement
with any Member at any time, on a nondiscriminatory basis, to
the extent necessary to ensure compliance with the limitations
of Paragraph 3.3 or 3.4.
3.2 Contribution of Elective Deferrals.
The Company shall pay to the Trustee on behalf of each
Member the Deferrals elected by the Member. A Member's
Elective Deferrals for a Plan Year shall be paid to the
Trustee no later than 30 days after the last day of the Plan
Year. Elective Deferrals may be paid to the Trustee in the
following forms:
(a) To the extent that a Member has directed pursuant to
Paragraph 6.2 that his or her Elective Deferrals be
invested in the Money Market Fund, the Equity Fund, or
the Bond Fund, such Elective Deferrals shall be paid to
the Trustee in cash;
(b) To the extent that a Member has directed pursuant to
Section 6.2 that his or her Elective Deferrals be
invested in Atlantic Richfield Company Common Stock
under the Non-ESOP Part of the Plan, such Elective
Deferrals may be paid to the Trustee in cash, in shares
of Atlantic Richfield Company Common Stock, or in any
combination thereof; and
(c) To the extent that a Member has directed pursuant to
Paragraph 6.2 that his or her Elective Deferrals be
invested in Atlantic Richfield Company Common Stock
under the ESOP Part of the Plan, such Elective
Deferrals may be paid to the Trustee in cash, in shares
of Atlantic Richfield Company Common Stock, in the form
of forgiveness of indebtedness on an Acquisition Loan
from the Company to the Plan, or in any combination thereof.
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3.3 Annual Dollar Limitation.
Effective for Plan Years beginning after December 31, 1986:
(a) A Member's Elective Deferrals for a calendar year, when
considered together with the amount of salary reduction
elected by the Member under any other plan meeting the
requirement of Section 401(k) of the Code, may not
exceed $7,000, as adjusted pursuant to Code Section
415(d) for Plan years commencing after December 31, 1987.
(b) Once a Member's Elective Deferrals reach the limitation
described in Subparagraph 3.3(a), all subsequent
deferrals will be suspended for the remainder of the
calendar year. Elective Deferrals will automatically
resume on the following January 1. Unless the Member
elects to change the Elective Deferral percent
according to Paragraph 3.1, Elective Deferrals will
resume at the rate in effect on the suspension date.
(c) If a Member notifies the Administrator on or before
March 31 after the close of a calendar year that the
Member's total Elective Deferrals (within the meaning
of Section 402(g)(3) of the Code) for such calendar
year exceed the limitation of Subparagraph 3.3(a), the
Administrator shall direct that such excess Elective
Deferrals, plus any income and minus any loss allocable
thereto for the calendar year, be distributed no later
than the April 15 following notification to the
Administrator. A Member is deemed to notify the
Administrator of Elective Deferrals in excess of the
limitation in Subparagraph 3.3(a) that arise by taking
into account those Elective Deferrals made to the Plan
or to any other Plan of the Company or a Subsidiary or
Affiliate.
(d) For purposes of Subparagraph 3.3(c), gain or loss allocable
to excess Elective Deferrals shall be computed under the
method used by the Plan to allocate gains and losses.
3.4 Actual Deferral Percentage Tests.
Effective for Plan Years beginning after December 31, 1986,
the Plan shall comply with the requirements of Section
401(k)(3) of the Code and the regulations thereunder,
including Treas. Reg. 1.401(k)-1(b), which provisions are
incorporated herein by this reference. To the extent
permitted by regulations, matching contributions described
in Paragraph 4.1 and nonelective contributions described in
Paragraph 4.7 may, at the discretion of the Administrator,
be deemed Elective Deferrals for purposes of this Paragraph 3.4.
3.5 Return of Elective Deferrals to Members.
(a) If the Administrator determines pursuant to Paragraph
3.4, that a Member is not eligible to defer any or all
amounts elected under Paragraph 3.1, the Administrator
may elect, in its discretion, to pursue any of the
following steps or any combination of them:
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(i) The Administrator may authorize a suspension or
reduction of Elective Deferrals made under
Paragraph 3.1 by authorizing a suspension or
reduction of deferrals above a specific dollar
amount or percent of compensation.
(ii) The Administrator may reduce the Elective Deferrals
of Highly Compensated Employees to the percent
necessary to meet the requirements of Paragraph 3.4.
The reduction will be accomplished by reducing the
Elective Deferrals of Highly Compensated Employees
in order of their Actual Deferral Percents, as
defined in regulations, beginning with the Members
having the highest percent until a requirement of
Paragraph 3.4 is met. The amounts reduced, together
with gain or loss allocable thereto for the Plan
Year, will be paid to affected Members by the end of
the following Plan Year.
(b) Gain or loss, for purposes of Subparagraph 3.5(a)
allocated to excess contributions shall be computed under
the method used by the Plan to allocate gains and losses.
(c) Amounts distributable under Subparagraph 3.5(a) will be
reduced by excess deferrals previously distributed
because the limit under Paragraph 3.3 was exceeded.
(d) This Paragraph 3.5 will be applied after taking into
account any reduction in, or repayment, of Elective
Deferrals under Paragraphs 3.3 and 4.6.
3.6 Treatment of Certain Family Members.
For purposes of the limitations of Paragraphs 3.4 and 4.4,
if an individual is a member of the family (within the
meaning of Section 414(q)(6)(B) of the Code and the
regulations thereunder) of a Member who is a Highly
Compensated Employee described in Section 414(q)(6)(A) of
the Code, then:
(a) The Actual Deferral Percent (ADP) and Actual Contribution
Percent (ACP) [determined separately] for the family
group is the ADP and ACP determined by combining the
contributions and compensation of all eligible Family
Members. Except to the extent taken into account under
this Subparagraph 3.6(a), the contributions and compensation
of all Family Members are disregarded in determining the ADP
and ACP for all Members.
(b) Family Members mean a Member's spouse, lineal ascendants
or descendants and their spouses.
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(c) If the ADP and/or ACP of a Highly Compensated Employee
is determined under the above family aggregation rules,
and the requirements of Paragraph 3.4 and/or 4.4 are
not satisfied, the ADP and/or ACP is reduced in
accordance with the leveling method and the excess
contributions and/or excess aggregate contributions are
allocated among the Family Members in proportion to the
contributions of each Family Member that have been combined.
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SECTION 4
COMPANY CONTRIBUTION
4.1 Company Contribution.
Subject to the provisions of Paragraph 4.3, for each pay
period, the Company shall pay to the Trustee a contribution
on behalf of each Member equal to 150 percent of the
Member's Elective Deferrals for the pay period which do not
exceed four percent of the Member's Earnings for the pay
period. This contribution shall be made no later than 30
days following the date on which the related Member Deferrals
are made, and shall be made under the ESOP Part of the Plan.
4.2 Form of Contribution.
Company contributions made pursuant to Paragraph 4.1 may be
made in the form of cash, shares of Atlantic Richfield
Company Common Stock, forgiveness of indebtedness on an
Acquisition Loan from the Company to the Plan, or any
combination of the foregoing.
4.3 Actual Contribution Percentage Test.
Effective for Plan Years beginning after December 31, 1986,
the Plan shall comply with the requirements of Section
401(m)(2) and Section 401(m)(9) of the Code [for Plan Years
beginning after December 31, 1988], and the regulations
thereunder, including Treas. Reg. Section 1.401(m)-1(b) and
Treas. Reg. Section 1.401(m)-2, which provisions are
incorporated herein by this reference. To the extent
permitted by regulations, Elective Deferrals described in
Paragraph 3.1 and nonelective contributions described in
Paragraph 4.6 may, at the discretion of the Administrator,
be taken into account in satisfying this Paragraph 4.3.
4.4 Distribution of Excess Contributions.
Effective for Plan Years beginning after December 31, 1986:
(a) If the Administrator determines, in its discretion, that
the allocation of Company contributions pursuant to
Paragraph 4.1 to Members' Accounts for a Plan Year does
not meet a requirement of Paragraph 4.3, the
Administrator may reduce the allocation of such Company
contributions to the Accounts of certain Members who are
Highly Compensated Employees to the extent necessary to
meet that requirement. The reduction will be accomplished
by reducing allocations to the Accounts of Members who
are Highly Compensated Employees in order of their Actual
Contribution Percents, beginning with the Member having
the highest percent until a requirement of Paragraph 4.3
is met. The reduced amounts, adjusted by gain or loss
allocable thereto for the Plan Year, will be returned to
affected Members by the end of the following Plan Year.
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<PAGE>
(b) Gain or loss, for purposes of Subparagraph 4.4(a),
allocated to excess aggregate contributions shall be
computed under the method used by the Plan to allocate
gains and losses.
4.5 Section 415 Limitations.
Effective for Plan Years beginning on or after December 31, 1986:
(a) In addition to other limitations set forth in the Plan
and notwithstanding any other provisions of the Plan,
"annual additions" made to this Plan (and all other
defined contribution plans required to be aggregated
with the Plan under the provisions of Section 415 of
the Code) shall not exceed an amount in excess of the
limit set forth in such section of the Code. For
purposes of calculating such limit under Section 415 of
the Code, the "limitation year" shall be the calendar
year. Deferrals and Company Contributions, pursuant to
Paragraph 4.1, in excess of the actual deferral and
contribution percent tests of Sections 3.4 and 4.3 are
considered annual additions even if corrected through
distribution.
(b) If the limitations described in Section 415(c) of the
Code are exceeded for a Member for a limitation year,
the excess will be eliminated as follows:
(i) Provisions of any other defined contribution plans
established by the Company or a Subsidiary or
Affiliate which have caused the limits to be
exceeded will be applied; provided, however, that
if such other Plan is described in Section 401(k)
of the Code, the provisions of the Plan in which
the Member is active as of the last day of the
limitation year shall be applied before the provisions
of the Plan in which the Member is inactive.
(ii) Amounts attributable to after tax contributions made
by the Member to the Plan (or any other plan
maintained by the Company or any Subsidiary or
Affiliate) shall be paid to the Member.
(iii) Amounts attributable to Elective Deferrals
made by a Member to the Plan (or any other plan
maintained by the Company or a Subsidiary or
Affiliate) shall be paid to the Member.
(iv) The excess, if any, will be held unallocated in a
suspense account. The suspense account will be
applied to reduce contributions for remaining
Members in the limitation year, and each
succeeding limitation year, if necessary. If a
suspense account is in existence at any time
during the limitation year pursuant to this
subparagraph, it will not participate in the
allocation of the investment gains and losses.
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<PAGE>
(c) If the limitations described in Section 415(e) of the
Code are exceeded for a Member for a limitation year,
the excess will be eliminated by applying the
provisions of the defined benefit plan in which the
Member participates.
4.6 Nonelective Contributions.
(a) The Administrator, in its sole discretion, may make a
nonelective contribution to the Accounts of certain
Members who are not highly compensated to the extent
necessary to satisfy the requirement of Paragraph 3.4
and/or 4.3 of the Plan, or to assist the Plan or any
other plan of the Company or any Subsidiary or Affiliate
to satisfy the requirements of Section 410(b) of the Code.
(b) A contribution under this Paragraph 4.6 shall be
allocated to eligible Member's in the ratio that the
Earnings of each such Member for the Plan Year bears to
the total Earnings of all such Member's for the Plan Year.
(c) The Company shall make contributions necessary to
reinstate Members' Accounts pursuant to Paragraph 9.9
of the Plan.
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SECTION 5
FINANCED SHARES
5.1 Acquisition Loans.
Atlantic Richfield Company, by action of its Treasurer, may
direct the Trustee to incur Acquisition Loans from time to
time to finance the acquisition of Atlantic Richfield
Company Common Stock (Financed Shares) under the ESOP Part
of the Plan or to repay a prior Acquisition Loan. For this
purpose, an installment obligation incurred in connection
with the purchase of Atlantic Richfield Company Common Stock
shall be treated as an Acquisition Loan.
An Acquisition Loan shall be for a specific term, shall bear
a reasonable rate of interest, and shall not be payable on
demand except in the event of default. An Acquisition Loan
may be secured by a pledge of the Financed Shares so
acquired (or acquired with the proceeds of a prior
Acquisition Loan which is being refinanced). No other
assets of the Plan may be pledged as collateral for an
Acquisition Loan, and no lender shall have recourse against
assets of the Plan other than Financed Shares remaining
subject to pledge. If the lender is a "party in interest"
[as defined in Section 3(14) of ERISA], the Acquisition Loan
must provide that in the event of default, assets of the
Plan may be transferred to the lender only upon, and to the
extent of, the failure of the Plan to meet the payment
schedule of the Acquisition Loan. Any pledge of Financed
Shares must provide for the release of the shares so pledged
as payments on the Acquisition Loan are made by the Trustee
and such Financed Shares are allocated to Members' Accounts
under Paragraph 5.2.
Payments of principal and/or interest on any Acquisition
Loan shall be made by the Trustee, as directed by the
Company, only from: (a) Company contributions paid in cash
to enable the Plan to make payments on such Acquisition Loan
[including Elective Deferrals contributed under Paragraph
3.2, to the extent that Members have directed pursuant to
Paragraph 6.2 that such Elective Deferrals be invested in
shares of Atlantic Richfield Company Common Stock under the
ESOP Part of the Plan] and earnings attributable thereto;
(b) the proceeds of any Acquisition Loan and the earnings
attributable thereto; and (c) any cash dividends received by
the Plan on the Financed Shares purchased with the proceeds
of such Acquisition Loan. The payments made with respect to
an Acquisition Loan for a Plan Year must not exceed the sum
of such Company contributions, proceeds, earnings, and
dividends for that Plan Year and prior Plan Years, as
reduced by the amount applied to make such payments in prior
Plan Years. As directed by Atlantic Richfield Company, the
Trustee also may sell any Financed Shares that have not yet
been allocated to Members' Accounts and use the proceeds
from such sale to pay principal and/or interest on the
Acquisition Loan used to acquire such shares.
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<PAGE>
5.2 Payments on Acquisition Loan.
The acquisition of Atlantic Richfield Company Common Stock
with the proceeds of an Acquisition Loan may be made on the
open-market, or from the Company, in a single purchase or a
series of purchases over a period of time. Prior to use for
such purchase or purchases, the Acquisition Loan proceeds
may be invested by the Trustee (as directed by Atlantic
Richfield Company) in interest-bearing accounts or
instruments. Interest derived therefrom shall be applied to
make payments on the Acquisition Loan, or, if the
Acquisition Loan has been repaid in full, shall be allocated
as of the last day of the Plan Year among the Accounts of
all Members who have not terminated membership pursuant to
Paragraph 2.4 as of such date in proportion to their
Earnings for the Plan Year.
All Financed Shares acquired by the Plan shall initially be
credited to a loan suspense account, and will be allocated
to the Members' Accounts only as payments on the Acquisition
Loan are made. The number of Financed Shares to be released
from the loan suspense account for allocation to Members'
Accounts in each Plan Year shall not be less than the number
calculated as follows:
(a) The number of Financed Shares held in the loan suspense
account immediately before the release in the current
Plan Year shall be multiplied by a fraction, the
numerator of which is the amount of principal and
interest paid on the Acquisition Loan for that Plan
Year, and the denominator of which is the sum of the
numerator plus the total payments of principal and
interest on that Acquisition Loan projected to be paid
for all future Plan Years. For this purpose, the
interest to be paid in future Plan Years is computed by
using the interest rate in effect as of the last day of
the current Plan Year.
(b) In lieu of the method described in Subparagraph 5.2(a),
the Company may elect (as to each Acquisition Loan) or
the provisions of the Acquisition Loan may provide for
the release of Financed Shares from the loan suspense
account based solely on the ratio that the payments of
principal for each Plan Year bear to the total
principal amount of the Acquisition Loan. This method
may be used only if: (i) the Acquisition Loan provides
for annual payments of principal and interest at a
cumulative rate that is not less rapid at any time than
level annual payments of such amounts for ten years;
(ii) interest included in any payment on the
Acquisition Loan is disregarded only to the extent that
it would be determined to be interest under standard
loan amortization tables; and (iii) the entire duration
of the Acquisition Loan repayment period does not
exceed ten years, even in the event of a renewal,
extension, or refinancing of the Acquisition Loan.
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<PAGE>
As of each date that payments (other than payments with the
proceeds of a new Acquisition Loan) are made on an
Acquisition Loan, the Financed Shares released from the loan
suspense account shall be allocated to Members' Accounts in
proportion to the amounts debited from each Member's Account
to make the Acquisition Loan payments.
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<PAGE>
SECTION 6
INVESTMENT OF MEMBERS' ACCOUNTS
6.1 Members' Accounts.
The Administrator shall establish and maintain an Account in
the name of each Member. Separate records shall be
maintained with respect to the portion of a Member's Account
attributable to Elective Deferrals under Section 3 and
transferred amounts under Section 14, and earnings thereupon,
and the portion of a Member's Account attributable to Company
contributions under Section 4 and earnings thereupon.
6.2 Investment of Elective Deferrals.
Upon receipt of a Member's Elective Deferrals and
transferred amounts under Section 14, the Trustee shall
invest such Elective Deferrals and transferred amounts among
the following investment alternatives, in the proportion
indicated by the Member in his or her investment directions
provided to the Administrator:
(a) In Atlantic Richfield Company Common Stock held under
the ESOP Part of the Plan;
(b) In Atlantic Richfield Company Common Stock held under
the non-ESOP Part of the Plan;
(c) In the Money Market Fund, consisting of specified types
of fixed income investments such as deposits in
interest-bearing bank accounts, certificates of
deposit, corporate or governmental obligations maturing
in not more than five years, financial futures
contracts, deposits under a deposit administration or
similar contract issued by an insurance company or in a
commingled or common investment account or fund
established and maintained by an investment advisor or
a bank (which bank may be a Trustee for this Plan) and
the assets of which are invested primarily in debt
obligations, or in any combination thereof as Atlantic
Richfield Company may determine;
(d) In the Equity Fund, consisting of specified equity
investments such as common or capital stock of issuers
(other than the Company, Subsidiaries or Affiliates, or
Lyondell Petrochemical Company or any of its
Subsidiaries or Affiliates), bonds, debentures or
preferred stocks convertible into common or capital
stock of such issuers, financial futures contracts,
interests in any commingled or common equity fund
established and maintained by an investment advisor or
a bank (which bank may be a Trustee for the Plan),
interests in any mutual fund or other similar types of
equity investments and cash equivalent short-term
investments maturing in less than one year, or in any
combination thereof as Atlantic Richfield Company may
determine; or
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<PAGE>
(e) In the Bond Fund, consisting of specified types of
fixed income investments, such as public obligations of
the United States or foreign governments or their
agencies, securitized financing or corporate bonds of
issuers (other than the Company, Subsidiaries or
Affiliates, or Lyondell Petrochemical Company or any of
its Subsidiaries or Affiliates), debentures, financial
futures contracts, interests in any commingled or
common fixed income fund established and maintained by
an investment advisor or bank (which bank may be the
trustee), interests in any mutual fund or other similar
types of fixed income investments and cash equivalent
short-term investments, or in any combination thereof
as Atlantic Richfield Company may determine.
A Member's directions as to the initial investment of his or
her Elective Deferrals shall be provided in such manner as
is prescribed by the Administrator. Such directions shall
remain in effect until new directions are provided to the
Administrator by the Member. A Member may change the
direction as to the initial investment of his or her
Elective Deferrals at any time by providing notice in such
manner as may be prescribed by the Administrator. Any
change of investment directions shall be effective with
respect to Elective Deferrals paid to the Trustee for pay
periods beginning after the notice is received by the
Administrator.
6.3 Investment of Company Contributions.
All contributions by the Company pursuant to Paragraph 4.1,
and any amounts of interest attributable to the proceeds of
an Acquisition Loan allocated to Members' Accounts pursuant
to Paragraph 5.2 after the Acquisition Loan has been repaid
in full, shall at all times be invested in Atlantic
Richfield Company Common Stock under the ESOP Part of the
Plan. Contributions under Paragraph 4.1 made in cash shall
be applied to purchase shares of Atlantic Richfield Company
Common Stock or to make payments on an Acquisition Loan
within a reasonable time after being paid to the Trustee or
after being allocated to Members' Accounts.
6.4 Funds Invested in Money Market Fund.
(a) There shall be invested in the Money Market Fund:
(i) Amounts which a Member elects to have so invested
under Subparagraph 6.2(c); and
(ii) On an interim basis, amounts being accumulated in
a Member's Account for investment under
Subparagraphs 6.2(a), (b) and (d).
(b) Subject to the requirement of Subparagraph 6.5(c), a
Member may direct, once during each 30-calendar-day
period, that funds invested in the Money Market Fund
(including funds transferred from the Predecessor Plan)
under Subparagraph 6.2(c) be invested
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<PAGE>
in any of the other permitted alternatives; provided,
that (i) only one direction whether made solely under this
subparagraph, or in combination with a direction under
Paragraph 6.5, may be made during a 30-calendar-day
period; and (ii) a direction under this subparagraph
may not be made earlier than seven days following (A)
the date of receipt by the Administrator of a Member's
application to make a withdrawal under Section 7, (B)
the date a loan application is made under Section 13,
or (C) the date a loan repayment is made under
Subparagraph 13.8(c)(i).
(c) Interest shall be allocated on a monthly basis to funds
held for a Member in the Money Market Fund as of the
last day of a calendar month. However, such allocation
shall not be made with respect to funds resulting from
a conversion to cash of Atlantic Richfield Company
Common Stock, Equity Fund or Bond Fund units which
occurred in the calendar month in which allocation of
interest is made.
6.5 Sale and Reinvestment of Stock, Equity Fund Units or Bond Fund Units.
(a) A Member may direct that shares of Atlantic Richfield
Company Common Stock, other than shares purchased with
Company contributions made after July 1, 1988, units of
the Equity Fund and/or units of the Bond Fund held in
the Member's Account [including shares and units
transferred to the Plan from the Predecessor Plan] be
converted to cash and the proceeds thereof, less any
applicable expenses of sale, be invested in a different
option described in Paragraph 6.2; provided, that (i)
only one direction, whether made solely under this
subparagraph, or in combination with a direction under
Paragraph 6.4, may be made during a 30-calendar-day
period; (ii) a direction under this subparagraph may
not be made earlier than seven calendar days following
(A) the date of receipt by the Administrator of a
Member's application to make a withdrawal under Section
7, (B) the date a loan application is made under
Section 13, or (C) the date a loan repayment is made
under Subparagraph 13.8(c)(i); (iii) a Member who has
attained age 55 as of the date of the direction to
convert may, subject to the restrictions described in
this paragraph, direct that shares of Common Stock
(including Common Stock of a Subsidiary or Affiliate or
Lyondell Petrochemical Company attributable to
contributions of such companies) held in the Member's
Account which are attributable to Company contributions
be sold and the proceeds reinvested in one or more of
the other options described in Paragraph 6.2.
(b) The conversion of shares of Atlantic Richfield Company
Common Stock (including shares transferred to this Plan
from the Predecessor Plan) to shares of such stock held
in the ESOP Part of the Plan described in Subparagraph
6.2(a), and the conversion of shares of Atlantic
Richfield Company Common Stock held in the ESOP
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<PAGE>
Part of the Plan to the shares held under Subparagraph
6.2(b) of the Plan, shall be accomplished by a
recharacterization of the shares, pursuant to procedures
established by the Administrator; provided that only one
direction, whether made solely under this subparagraph or
in combination with a direction under Paragraph 6.4, may
be made during a 30-calendar-day period.
(c) Proceeds of the conversion of shares of Atlantic
Richfield Company Common Stock to cash may not be
reinvested in Atlantic Richfield Company Common Stock
until 30 calendar days after the date of such
conversion. Proceeds of the conversion of units of the
Equity Fund or Bond Fund to cash may not be reinvested
in the Equity Fund or Bond Fund, as the case may be,
until 30 calendar days after the date of such conversion.
6.6 Directives.
All elections and directions by Members concerning the
investment of their Accounts shall be made in the manner
prescribed by the Administrator, shall be irrevocable and
shall become effective upon receipt by the Administrator.
6.7 Purchases and Sales of Atlantic Richfield Company Common Stock.
Purchases and sales of Common Stock of Atlantic Richfield
Company shall be handled in accordance with the following
rules and such additional procedures, consistent with such
rules, which the Administrator may establish from time to time:
(a) Purchases and sales of Common Stock of Atlantic
Richfield Company pursuant to a Member's directive
under Paragraph 6.4 or 6.5, or to accommodate a
distribution or withdrawal pursuant to Section 7 or 8,
shall be made in the open-market as follows:
(i) Each Wednesday and Friday the Administrator shall
execute an open-market transaction, at a time
determined at the discretion of the Administrator,
covering all participant directives received by
the Administrator by noon Pacific time on the
preceding Company business day, except that if a
Wednesday or Friday is a Company holiday or a day
on which trading on the New York Stock Exchange is
closed, the transaction will occur on the next day
(a Wednesday or Friday) on which the Plan executes
a transaction in the open-market.
(ii) If an unforeseeable administrative difficulty
prevents the execution of the open-market transaction
otherwise scheduled for a Wednesday or Friday, such
transaction will be executed on the first business
day thereafter which does not fall within one of the
two exceptions in Subparagraph 6.7(a)(i).
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<PAGE>
(iii) The Administrator may, in its discretion,
match the purchase and sale orders scheduled for
an open-market transaction and transact the net
purchase or sale, whichever the case may be. The
Administrator may also agree with the
Administrator of one or more other individual
account plans (as described in Section 3(34) of
ERISA, and which is maintained by the Company, its
Subsidiaries or Affiliates, Lyondell Petrochemical
Company, or its Subsidiaries or Affiliates and
provides for the same purchases and sales pursuant
to participant directives described in Paragraphs
6.4 and 6.5) to combine and match orders from all
of the plans and execute a "net" transaction, as
described above. The price per share allocated to
each purchase or sale order shall be the price
transacted for the "net" shares on the open-market
transaction date otherwise scheduled for the
orders under Subparagraph 6.7(a)(i). The price
transacted for a "net" transaction shall be the
price obtained on the open-market in the case of a
single transaction, and the weighted average of
the prices obtained on the open-market in the case
of multiple transactions.
(iv) Brokerage commissions, transfer fees and other
expenses actually incurred in any such sale or
purchase shall be equitably allocated and added to
the cost or subtracted from the proceeds of all
purchases or sales, as the case may be, effected
on a pricing day, whether pursuant to the netting
process described in Subparagraph 6.7(a)(iii), or
pursuant to actual separate transactions per Member order.
(b) Purchases of Common Stock of Atlantic Richfield Company
with Member's Elective Deferrals or Company
contributions under Sections 3 and 4:
(i) Purchases shall normally be made either in the
open-market or from Atlantic Richfield Company, at
prices to the Plan not in excess of the fair
market value of such Atlantic Richfield Company
Common Stock on the date of purchase thereof, as
determined by the Trustee.
(ii) Allocations to Members' Accounts will be made in
full and fractional shares.
(iii) The Trustee may limit the daily volume of
purchases to the extent it believes such action to
be in the best interests of the Members. When
Atlantic Richfield Company Common Stock is
purchased, the cost charged to the Accounts of
Members affected by such purchase shall be
determined on an equitable basis in accordance
with rules to be adopted by the Administrator and
incorporating the following principles:
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<PAGE>
(A) The cost charged to each affected Member's
Account shall be based on the average cost
per share of all Atlantic Richfield Company
Common Stock purchased during whatever period
may be established by the Administrator.
(B) Brokerage commissions, transfer fees and
other expenses actually incurred in any such
purchase shall be added to the cost of any
such purchase.
(c) A Member may direct the Administrator to use any
available cash or funds held for the Member under
Subparagraph 6.2(c) to exercise any options, rights or
warrants issued with respect to Atlantic Richfield
Company Common Stock in the Member's Account. In the
absence of such direction, or if there are no available
funds, any such option, right or warrant having a
market value shall be sold for the Member's Account.
6.8 Voting of Atlantic Richfield Company Common Stock.
(a) The Trustee shall vote whole shares of Atlantic
Richfield Company Common Stock credited to each
Member's Account in accordance with such Members'
written instructions. Fractional shares of Atlantic
Richfield Company Common Stock shall be aggregated into
whole shares of stock and voted by the Trustee, to the
nearest whole vote, in the same proportion as shares
are to be voted by the Trustee pursuant to Members'
written instructions. In the absence of voting
instructions by one or more Members, the Trustee shall
vote uninstructed shares, to the nearest whole vote, in
the same proportion as shares are to be voted by the
Trustee pursuant to Members' written instructions. The
Trustee shall vote unallocated shares, to the nearest
whole vote, in the same proportion as allocated shares
are to be voted by the Trustee pursuant to Members'
written instructions.
(b) The Trustee shall exercise rights other than voting
rights attributable to whole shares of Atlantic
Richfield Company Common Stock credited to each
Member's Account in accordance with such Members'
written instructions. Rights attributable to
fractional shares of Atlantic Richfield Company Common
Stock (which for this purpose shall be aggregated into
whole shares of stock) shall be exercised by the
Trustee in the same proportion as rights which are
exercised by the Trustee pursuant to Members' written
instructions. In the absence of instructions by one or
more Members, the Trustee shall exercise uninstructed
rights in the same proportion as rights which are to be
exercised by the Trustee pursuant to Members' written
instructions. The Trustee shall exercise rights
attributable to unallocated shares in the same
proportion as rights attributable to allocated shares
which are to be exercised by the Trustee pursuant to
Members' written instructions.
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<PAGE>
(c) The Trustee shall notify the Members of each occasion
for the exercise of voting rights and rights other than
voting rights within a reasonable time before such
rights are to be exercised. This notification shall
include all the information that the Company distributes
to shareholders regarding the exercise of such rights.
6.9 Title of Investments.
All investments will be held in the name of the Trustee or
its nominees.
6.10 Allocation of Trust Earnings and Valuation of Trust Investments.
(a) Any cash dividends declared on Atlantic Richfield
Company Common Stock held in a Member's Account under
the ESOP Part of the Plan as of the record date for the
dividend shall be paid in cash to the Member (or, in
the event of death, to the Member's beneficiary) on, or
as soon as possible following, the payment date for the
dividend.
(b) Any cash dividends declared on Atlantic Richfield
Company Common Stock held in a loan suspense account as
of the record date for the dividend shall be used to
make payments on the Acquisition Loan used to acquire
the shares of stock held in such account.
(c) Except as provided in Subparagraphs 6.10(a) and (b),
all dividends or other distributions attributable to
shares of Atlantic Richfield Company Common Stock shall
be allocated to the Member whose Account is credited
with such shares.
(d) On the last day of each month, all income attributable
to the Money Market Fund shall be allocated to the
Member's Account in the ratio that each Member's Money
Market Fund Account balance bears to such account
balance of all such Members. For the purpose of
determining such allocation, the Money Market Fund
shall be valued at fair market value.
6.11 Purchase and Redemption of Equity Fund and Bond Fund Units.
Purchase and redemption of Equity Fund and Bond Fund units
shall be handled in accordance with the following rules and
such additional procedures, consistent with such rules, as
the Administrator may establish from time to time:
(a) Units of the Equity Fund and Bond Fund shall be
purchased or redeemed, pursuant to Member directions
under Paragraph 6.5, on each Wednesday and Friday,
covering all Member directives received by the
Administrator by noon Pacific time on the preceding
Company business day, except that if a Wednesday or
Friday is a Company holiday or a day on which trading
on the New York Stock Exchange is closed, the
purchase or redemption will
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<PAGE>
be executed on the next day (a Wednesday or Friday) on
which the Plan executes a transaction under this Subparagraph
6.11(a).
(b) If an unforeseeable administrative difficulty prevents
the execution of a transaction under Subparagraph
6.11(a), otherwise scheduled on a Wednesday or Friday,
such transaction will be executed on the first business
day thereafter which does not fall within one of the
two exceptions in Subparagraph 6.11(a).
(c) The Administrator may, in its discretion, combine the
purchase and redemption orders scheduled for a
Wednesday or Friday and transact the net purchase or
sale orders, whichever the case may be. The
Administrator may also agree with the Administrator of
one or more individual account plans [as described in
Section 3(34) of ERISA, and which is maintained by the
Company, its Subsidiaries or Affiliates, Lyondell
Petrochemical Company or its Subsidiaries or
Affiliates, and provides for the same purchase and
redemption procedure described in Subparagraph
6.11(a)], to combine orders from all of the plans and
execute a "net" transaction.
(d) When units of Equity Fund and Bond Fund are purchased
or redeemed, the cost or net proceeds charged or
credited to the Accounts of Members affected by such
purchase or redemption shall be determined on an
equitable basis in accordance with rules to be adopted
by the Administrator, which are consistent with the
rules described in this section, and incorporate the
following principles:
(i) The net proceeds of any such redemption of units
of the Equity Fund and Bond Fund in a Member's
Account shall be credited to such Member's
Account.
(ii) The cost of any such purchase of units of the
Equity Fund and Bond Fund for a Member's Account
shall be charged to such Member's Account.
(iii) The net proceeds and cost of units of the
Equity Fund and Bond Fund shall be based on the
net asset value of such units determined on the
valuation date next following the date the
purchase or redemption order is received by the
Administrator. The valuation date shall be
determined by the Administrator and shall occur on
at least a weekly basis. The net asset value of
units of the Equity Fund and Bond Fund will be
calculated by dividing the difference between the
value of the Equity Fund and Bond Fund assets and
Equity Fund and Bond Fund liabilities, as the case
may be, by the number of units outstanding with
respect to each fund.
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<PAGE>
(iv) Brokerage commissions, transfer fees and other
expenses actually incurred in any such purchase or
redemption shall be added to the cost or
subtracted from the gross proceeds, of any such
purchase or redemption, respectively.
(e) Income earned by the Equity Fund and the Bond Fund
shall automatically be reinvested in the Equity Fund or
Bond Fund, as the case may be. Income, gains and
losses shall be reflected in the net asset value of the
units of the Equity Fund and Bond Fund.
6.12 Voting of Money Market Fund, Equity Fund and Bond Fund Investments.
The Trustee, in accordance with the Trust Agreement, shall
exercise all voting and other rights associated with any
investments held in the Money Market Fund, Equity Fund and
the Bond Fund.
6.13 Investment Advisory Fees.
The investment advisory fees, if any, incurred for
management of the Money Market Fund, Equity Fund and the
Bond Fund are charged to each respective fund.
6.14 Member Protection.
No shares of Atlantic Richfield Company Common Stock held by
the ESOP Part of the Plan may be subject to a put, call or
other option, or buy/sell or similar arrangement. The
provisions of this Paragraph 6.14 shall continue to be
applicable to the shares of Atlantic Richfield Company
Common Stock held by the ESOP Part of the Plan even if such
part ceases to be an Employee Stock Ownership Plan under
Section 4945(e)(7) of the Code.
6.15 Confidentiality.
The Capital Accumulation Plan Administrative Committee shall
be responsible for ensuring the adequacy of procedures
established by the Administrator to safeguard the
confidentiality of information relating to the purchasing,
holding and selling of Atlantic Richfield Company Common
Stock and any voting, tender or similar rights relating to
such stock.
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<PAGE>
SECTION 7
WITHDRAWALS DURING EMPLOYMENT DUE TO FINANCIAL HARDSHIP
7.1 Application for Withdrawal.
A member, other than a member awaiting a deferred
distribution, may at any time request the Member's Elective
Deferrals (but not the earnings thereon) be paid to the
Member due to financial hardship, provided that no more than
one hardship withdrawal may be granted during each six-month
period. The request must be made to the Administrator at
such time and in such manner prescribed by the Administrator
and shall include such documentation and/or written
explanation requested by the Administrator.
7.2 Basis for Withdrawal.
The Administrator shall authorize a withdrawal on account of
financial hardship only upon making a written determination
that the withdrawal does not exceed the amount of the
immediate and heavy financial need of the Member and that
the withdrawal is based on the need for funds under one or
more of the five following circumstances:
(a) The payment of unreimbursable medical expenses
described in Section 213(d) of the Code previously
incurred by the Employee, the Employee's spouse, or any
dependents of the Employee (as defined in Section 152
of the Code) or necessary for these persons to obtain
medical care;
(b) The payment of all or a portion of the purchase price
(excluding mortgage payments) of a principal residence
of the Member;
(c) The payment of tuition and related educational expenses
for the next 12 months of post-secondary education for
the Member, his or her spouse, children or dependents, as
defined in Code Section 152;
(d) The need to prevent the eviction of the Member from his
or her principal residence or foreclosure on the
mortgage of the Member's principal residence; and
(e) The need to satisfy a judgment of a federal, state or
local court against the Member (such withdrawal will be
permitted only if a written determination is made that
such withdrawal is necessary in light of immediate and
heavy financial need of the Member).
7.3 Payment of Withdrawal.
(a) A hardship withdrawal shall be paid in a single payment
to the Member within 60 days following the
Administrator's favorable determination.
(b) A hardship withdrawal shall not cause a termination of
Membership in the Plan.
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(c) Effective January 1, 1993, to the extent permitted by
the Code or regulations thereunder, a Member may elect,
at a time and in the manner prescribed by the
Administrator, to have all or a portion of a hardship
withdrawal made payable to an eligible retirement plan.
An eligible retirement plan is an individual retirement
account or annuity described in Section 408(a) or (b)
of the Code, an annuity plan described in Section
403(a) of the Code or a qualified trust described in
Section 401(a) of the Code that accepts the deposit of
such withdrawal.
7.4 Condition to Receipt of Withdrawal.
As a condition to receiving the withdrawal:.
(a) The Member must have obtained all distributions and all
nontaxable loans available as of the date of the
withdrawal under this Plan and any other employee
benefit plan maintained by the Company and any
Subsidiary or Affiliate;
(b) The Member's contributions to any other defined
contribution or defined benefit employee pension
benefit plan maintained by the Company and any
Subsidiary or Affiliate are to be suspended for a
period of 12 months after the Member's receipt of the
hardship distribution; and
(c) The Member may not make Elective Deferrals during the
remainder of the Member's taxable year or the taxable
year immediately following the taxable year in which
the hardship distribution is made.
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SECTION 8
PAYMENTS ON TERMINATION OF COMPANY EMPLOYMENT,
DIVORCE OR OTHER REASONS
8.1 Termination of Employment.
(a) If a Member's membership in the Plan is terminated due
to disability, termination of employment for any other
reason except death, or as the result of a sale
described in Subparagraphs 2.4(a)(ii) or (iii), the
Member shall receive all items in the Member's Account.
Each Member shall be fully vested at all times in all
items in the Member's Account, whether the same be
derived from Elective Deferrals, transferred amounts,
Company contributions, or earnings thereon.
(b) Effective June 1, 1994, upon the election of the
Member, all items in a Member's Account shall be
distributed to the Member. Notwithstanding anything in
the Plan to the contrary, the Account of a Member to
whom this subparagraph applies shall be treated as follows:
(i) With respect to a Member whose Account balance
exceeds $3,500, on a date which is 12 months from
the date the Member terminates membership under
Subparagraph 8.1(a), shares of Atlantic Richfield
Company Common Stock held in the Member's ESOP
Part of the Plan shall be designated as non-ESOP
Atlantic Richfield Company Common Stock.
(ii) The Member may not withdraw any funds from the
Member's Account between the date the Member
terminates membership under Subparagraph 8.1(a)
and the date of final distribution of the Member's
Account.
(iii) The Member may not convert funds held in an
investment alternative to another investment
alternative between the date which is 12 months
after the Member terminates membership under
Subparagraph 8.1(a) and the date of final
distribution of the Member's Account.
(iv) Notwithstanding anything to the contrary in this
Paragraph 8.1 and subject to the provisions of
Paragraph 8.7, a Member's Account shall be
distributed no later than age 65, or, if later, 12
months following termination of membership under
Subparagraph 8.1(a).
(v) In the case of the Member's death prior to final
distribution, the Member's Account shall be distributed
in accordance with Paragraph 8.2 of the Plan.
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(c) Notwithstanding anything to the contrary in this
Paragraph 8.1, all items in the Account of a Member who
has terminated membership, and whose Account balance is
$3,500 or less, shall be distributed 12 months
following the Member's termination of membership,
unless the Member elects an earlier distribution date.
(d) Notwithstanding anything in the Plan to the contrary,
when a Member elects to receive all items in the
Member's Account and, in conjunction therewith, directs
that items in his or her Account be converted pursuant
to Paragraph 6.4 or 6.5, the conversion shall be
transacted on the first transaction date under the Plan
following the Member's termination of membership.
Distributions under this Paragraph 8.1 shall be made in
accordance with the requirements of Section 409(h) of the Code.
8.2 Death.
(a) If a Member dies, or a former Member dies while
awaiting receipt of a distribution pursuant to
Paragraph 8.1, and it is established to the Plan's
satisfaction that the consent required under
Subparagraph 8.2(c), either has been obtained or was
not obtainable, all items in the Member's or former
Member's Account shall be paid to the beneficiary or
beneficiaries most recently designated by the Member or
former Member in such manner as prescribed by the
Administrator. Such payment shall be made no later
than 90 days following the close of the Plan Year in
which the Plan receives certification of the Member's
death. If no such designation shall have been made, or
if all designated beneficiaries should die before the
Member or former Member, payment shall be made to the
Member's or former Member's estate.
(b) Except as provided in Subparagraph 8.2(c), if a Member
or former Member is survived by a spouse, all items in
the Member's or former Member's Account shall be paid
to the Member's spouse.
(c) If a Member or former Member is survived by a spouse,
all items in a Member's or former Member's Account
shall be paid to the beneficiary or beneficiaries most
recently designated by the Member or former Member in
such manner as prescribed by the Administrator;
provided, (i) the surviving spouse of the Member or
former Member has irrevocably consented in writing to
the designation of the specific beneficiary or
beneficiaries, which designation may not be changed
without spousal consent (or the spouse expressly
permits designations by the Member or former Member
without any further spousal consent), such consent
acknowledged the effect of the election and such
consent was witnessed by a notary public, or (ii) it is
established to the Plan's satisfaction that the consent
required by Subparagraph 8.2(c)(i), could not be obtained
because the surviving spouse could not be located or
because of such other circumstances as the Secretary
of Treasury may by regulation prescribe. Any consent
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necessary under this paragraph shall be effective
only with respect to such spouse, or, in the
event it is established that the consent may not be
obtained, such designated spouse. A revocation of a
prior designation may be made by a Member without the
consent of the spouse at any time prior to the Member's
death. A consent that permits designation by the
Member or former Member without any requirement for
further consent by the spouse must acknowledge that the
spouse has the right to limit consent to a specific
beneficiary and that the spouse voluntarily elects to
relinquish such right.
8.3 Disability.
Disability means a medically determinable physical or mental
impairment resulting from illness or injury as a result of
which the Member is unable to perform one or more of the
substantial duties of the Member's normal work assignment
with the Company or of any work assignment which the Company
determines is available to the Member and for which the
Member is reasonably qualified by education, training or
experience to perform as determined by the Administrator
after review by the Medical Board or such other entity as
designated by the Administrator.
8.4 Divorce.
To the extent specified in a Qualified Domestic Relations
Order, as defined in Section 414(p) of the Code,
distributions from a Member's Account may be made to an
Alternate Payee, as defined in Section 414(p) of the Code,
prior to the Member's termination of membership under
Subparagraph 8.1(a). Distributions under this paragraph
shall be made at the time set forth in the Qualified
Domestic Relations Order, or, if such order provides, at the
time elected by the Alternate Payee.
8.5 Rollover.
Effective January 1, 1993:
(a) Notwithstanding anything in this Section 8 to the
contrary, a distributee, as defined below, may elect,
at a time and in the manner prescribed by the
Administrator, to have all or a portion of a
distribution under this Section 8, other than any
amount required to be distributed pursuant to Section
401(a)(9) of the Code, made payable to an eligible
retirement plan.
(b) For purposes of this Section 8, other than Paragraph
8.2, an eligible retirement plan is an individual
retirement account or annuity described in Section
408(a) or (b) of the Code, an annuity plan described in
Section 403(a) of the Code or a qualified trust
described in Section 401(a) of the Code that accepts
such distribution. For purposes of a distribution
under Paragraph 8.2, an eligible retirement plan is an
individual retirement account or annuity.
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(c) Distributee means an Employee or former Employee, the
surviving spouse of such Employee or such Employee's
spouse or former spouse who is an alternate payee as
defined in Section 414(p) of the Code.
8.6 Notice.
With respect to a Member whose account exceeds $3,500, the
Administrator shall provide the notice required by Section
1.411(a)-11(c) of Income Tax Regulations no less than 30
days and no more than 90 days before the Member's date of
distribution; provided, however, that such distribution may
commence less than 30 days after the required notice is given if:
(a) The Member is informed of the Members' right to a
period of at least 30 days after receiving the notice
to consider distribution options; and
(b) The Member, after receiving the notice, affirmatively
elects a distribution.
8.7 Distributions.
Notwithstanding anything in the Plan to the contrary, a
Member's Account shall be distributed in a lump sum, no
later than the first day of April following the calendar
year in which the Member attains age 70-1/2. Any amounts
subsequently allocated to a Member's Account shall be
distributed during the calendar year immediately following
the year of allocation.
8.8 Distribution of Benefits.
The distribution of benefits under this Plan to a Member who
has elected to receive such benefits shall be made not later
than the 60th day after the latest of the close of the plan
year in which (a) the Member attains age 65 or such earlier
normal retirement age as may be specified in this Plan; (b)
there occurs the tenth anniversary of the year in which the
Member commenced membership in this Plan; or (c) the
Member's service with the Company is terminated.
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SECTION 9
ADMINISTRATION
CAPITAL ACCUMULATION PLAN ADMINISTRATIVE COMMITTEE
9.1 Capital Accumulation Plan Administrative Committee.
The Plan shall be administered by a Capital Accumulation
Plan Administrative Committee. The Committee shall consist
of the Vice President, Human Resources of Atlantic Richfield
Company, who shall serve as Chairperson, and not less than
two other persons appointed by the Chairperson. Members of
the Committee shall serve without compensation. Vacancies
shall be filled by the Chairperson or the Chairperson's delegate.
9.2 Rules of Conduct.
The Capital Accumulation Plan Administrative Committee shall
adopt such rules for the conduct of its business and
administration of this Plan as it considers desirable;
provided, they do not conflict with this Plan.
9.3 Legal, Accounting, Clerical.
The Capital Accumulation Plan Administrative Committee may
authorize one or more of its members or any agent to act on
its behalf and may contract for legal, accounting, clerical
and other services to carry out this Plan. Unless paid by
the Company, all expenses of the Company, the Administrator
and the Plan shall be paid by the Plan, to the extent they
constitute reasonable expenses of administering the Plan.
The Plan may reimburse expenses paid directly by the Company
or its designee. This provision shall be deemed a part of
any contract to provide for expenses of Plan administration,
whether or not the signatory to such contract is, as a
matter of convenience, the Company or its designee.
9.4 Interpretation of Provisions.
The Capital Accumulation Plan Administrative Committee shall
have full discretion and final authority to determine
eligibility for benefits and to interpret the provisions of
this Plan, to decide questions arising in its
administration, and to establish such other rules for its
administration as may be desirable.
9.5 Records of Administration.
The Capital Accumulation Plan Administrative Committee shall
keep records reflecting the administration of this Plan
which shall be subject to audit by the Company. Members may
examine records pertaining directly to themselves. At least
annually, the Capital Accumulation Plan Administrative
Committee shall have mailed to each Member a statement of
his or her Account and such statement shall be deemed to
have been accepted as correct for all purposes of this Plan
unless written notice to the contrary is received by the
Capital Accumulation Plan Administrative Committee or the
Trustee within 30 days after the date of mailing.
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9.6 Claims for Benefits.
Applications for benefits must be made in such manner as
prescribed by the Administrator. The Administrator shall
have full discretion and final authority to determine
eligibility for benefits and to construe the terms of the
Plan in acting upon an initial application for benefits or
an appeal of a denial of an application for benefits. Each
application shall be acted upon and approved or disapproved
within 90 days following its receipt by the Administrator.
In the event special circumstances require an extension of
time for reviewing the initial application for benefits, the
Administrator shall make a determination as soon as
practicable but no later than 180 days following receipt of
the application. If any application for benefits is denied,
in whole or in part, the Administrator shall notify the
applicant in writing of such denial and of the applicant's
right to a review by the Administrator and shall set forth
in a manner calculated to be understood by the applicant,
specified reasons for such denial, specific references to
pertinent Plan provisions on which the denial is based, a
description of any additional material or information
necessary for the applicant to perfect the application, an
explanation of why such material or information is necessary,
and an explanation of the Plan's review procedure.
Any person, or a duly authorized representative thereof,
whose application for benefits is denied in whole or in
part, may appeal from such denial to the Administrator for a
review of the decision by submitting to the Administrator
within 60 days after receiving notice of denial, a written
statement:
(a) Requesting a review of the application for benefits by
the Administrator;
(b) Setting forth all of the grounds upon which the request
for review is based and any facts in support thereof; and
(c) Setting forth any issues or comments which the
applicant deems relevant to the application.
The Administrator shall act upon each such appeal
application within 60 days after the later of receipt of the
applicant's request for review by the Administrator or
receipt of any additional materials reasonably requested by
the Administrator from such applicant. In the event special
circumstances require an extension of time for reviewing the
appeal, the Administrator shall make a determination as soon
as practicable but no later than 120 days following receipt
of the appeal.
The Administrator shall make a full and fair review of each
such application and any written materials submitted by the
applicant or the Company in connection therewith and may
require the Company or the applicant to submit within 30 days
of written notice by the Administrator therefor, such additional
facts, documents, or other evidence as the Administrative, in
its sole discretion, deems necessary or advisable in making
such a review. The Administrator shall have full discretion in
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making an independent determination of the applicant's
eligibility for benefits under the Plan and shall have
full discretion to construe the terms of the Plan in
making its review. The decision of the Administrator on
any application for benefits shall be final and conclusive
upon all persons.
If the Administrator denies an application in whole or in
part, the Administrator shall give written notice of its
decision to the applicant setting forth in a manner
calculated to be understood by the applicant the specific
reasons for such denial and specific references to the
pertinent Plan provisions on which the Administrator's
decision was based.
9.7 Liability of Committee.
No member of the Capital Accumulation Plan Administrative
Committee shall be liable for any action taken in good faith
or for the exercise of any power given the Capital
Accumulation Plan Administrative Committee, or for the
actions of other members of said Committee unless and except
to the extent that such liability is imposed under law as a
result of a breach by such member of his or her fiduciary
responsibilities.
9.8 Medical Board.
The Capital Accumulation Plan Administrative Committee may
appoint a Medical Board consisting of not less than three
physicians, who shall be authorized to make, or have made,
any physical or mental examinations required or authorized
by the Administrator or by the provisions of this Plan.
9.9 Unlocated Member.
If the Committee is unable, after reasonable and diligent
effort, to locate a Member or beneficiary entitled to
payment under the Plan, such payment may be forfeited and
used to pay Plan expenses. If the Member or beneficiary
later files a claim for benefit, such benefit will be
reinstated.
9.10 Legal Representative.
The Capital Accumulation Plan Administrative Committee shall
act on behalf of the Plan with respect to any claim or cause
of action, whether arising in the course of administrative
or judicial proceedings or otherwise, and shall be
responsible for initiating, pursuing and defending any such
claim or cause of action involving the Plan.
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SECTION 10
AMENDMENTS, DISCONTINUANCE, LIABILITIES
10.1 Amendment of Plan.
This Plan may be amended by the Board of Directors of
Atlantic Richfield Company if, as amended, it continues to
be for the exclusive benefit of Employees. However, no
amendment shall reduce the account of any Member as of the
date of such amendment.
10.2 Termination.
Atlantic Richfield Company intends to continue this Plan
indefinitely but reserves the right to terminate it at any
time, by action of its Board of Directors. If this Plan is
terminated, or if there is a complete discontinuance of
contributions under this Plan by the Company, all amounts
credited to Accounts of Members shall be held for
distribution as provided in Section 8.
10.3 Liability of Company.
The Company shall have no liability for payments under this
Plan except to make the contributions required by Section 4.
Any payments under the Plan shall be made solely from the
fund held by the Trustee.
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SECTION 11
MISCELLANEOUS
11.1 Employment.
This Plan shall not give any Member any right to be
continued in the employment of the Company.
11.2 Benefits Not Assignable.
Except as provided in Paragraph 8.4, no benefit under this
Plan shall be assignable or transferable in whole or in
part, either directly or by operation of law or otherwise,
and shall not be subject to attachment or other process.
11.3 Discharge of Liability.
If the Administrator deems any person incapable of receiving
benefits to which such person is entitled under this Plan,
by reason of minority, illness, infirmity, mental
incompetency or other incapacity, it may direct the Trustee
to make payment directly for the benefit or the account of
such person or to any eligible person selected by the
Administrator to disburse such payment whose receipt shall
be a complete settlement therefor.
11.4 Governing Laws.
The Plan shall be governed by and construed in accordance
with federal laws governing employee benefit plans qualified
under the Code or with the laws of the State of Delaware to
the extent not preempted by federal law.
11.5 Limitation on Mergers.
This Plan may not merge or consolidate with, or transfer any
of its assets or liabilities to any other plan unless each
Member in this Plan would, if said other plan were to
terminate, receive a benefit immediately after the merger,
consolidation or transfer which is equal to or greater than
the benefit such Member would have been entitled to receive
immediately before the merger, consolidation or transfer if
this Plan had terminated.
11.6 Delegation of Fiduciary or Administrative Responsibilities.
Atlantic Richfield Company, by resolution of its Board of
Directors or by written action of any officer generally or
specifically named by such a resolution to take such an
action, and the Capital Accumulation Plan Administrative
Committee, by resolution of said Committee, may at any time
delegate to any other named person or body, or reassume
therefrom, any of their respective fiduciary responsibilities
or administrative duties with respect to this Plan, including
the power to delegate and reassume such responsibilities
and duties by written action naming the person or body to
whom the responsibility has been delegated. However,
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only the immediate delegate of Atlantic
Richfield Company, the Capital Accumulation Plan
Administrative Committee, or of the Treasurer of Atlantic
Richfield Company, as the case may be, may, if so authorized
by Atlantic Richfield Company, said Committee or said
Treasurer, delegate any such responsibilities or duties.
11.7 Named Fiduciary.
The named fiduciary with respect to this Plan is Atlantic
Richfield Company except that (a) as to any matter specified
in this Plan as being the responsibility or function of the
Capital Accumulation Plan Administrative Committee, the
named fiduciary is said Committee, (b) as to any matter
specified in the Plan or in the trust agreement as being the
responsibility or function of the Trustee or the Investment
Officer, the named fiduciary is the Trustee or the
Investment Officer, as the case may be, and (c) as to any
matter specified in the Plan as being the responsibility or
function of the Treasurer of Atlantic Richfield Company, the
named fiduciary is the Treasurer.
11.8 Transferred Funds.
(a) Predecessor Plan Assets
(i) Assets transferred on behalf of a Member to this
Plan from the subaccount attributable to the
Member's Deferrals under the Predecessor Plan
shall be invested in the same manner as such
assets were invested under the Predecessor Plan as
of the transfer date, until the Member directs
reinvestment of such assets pursuant to Paragraph
6.4 or 6.5 of the Plan.
(ii) Assets transferred on behalf of a Member to this
Plan from the subaccount attributable to Company
contributions under the Predecessor Plan, which
have been invested solely in Atlantic Richfield
Company Common Stock, shall be invested (and shall
remain so invested): (A) in Atlantic Richfield
Company Common Stock under the ESOP Part of the Plan.
(b) Capital Accumulation Plan Assets of a Subsidiary or Affiliate.
Upon the transfer of an Employee eligible to
participate in this Plan from a Subsidiary or
Affiliate, any assets maintained under a capital
accumulation plan of such Subsidiary or Affiliate on
behalf of such Employee will be transferred to this
Plan in the same investment alternative under which
held as of the transfer date, and such transferred
assets will be subject to the reinvestment provisions
under Paragraph 6.4 or 6.5, except as provided in the
following special conditions:
(i) Any assets transferred on behalf of a Member which
have been invested in Common Stock of a Subsidiary
or Affiliate in the subaccount attributable to the
Member's Deferrals under the capital accumulation
plan of a Subsidiary or Affiliate will
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remain so invested, with future dividends being
reinvested in such stock under the Member's Account,
absent the Member's direction to reinvest such assets
pursuant to Paragraph 6.5 of the Plan; provided,
however, that any assets converted from the Common
Stock of a Subsidiary or Affiliate to another
investment alternative under the Plan may not be
reinvested in Common Stock of a Subsidiary or
Affiliate.
(ii) Any assets transferred on behalf of a Member which
have been invested in the Common Stock of a
Subsidiary or Affiliate in the subaccount
attributable to Company contributions under the
capital accumulation plan of a Subsidiary or
Affiliate, will remain so invested, with future
dividends being reinvested in such stock under the
Member's Account; provided, however, that the
Member may elect to convert such assets to
Atlantic Richfield Company Common Stock held under
the ESOP Part of the Plan and any assets so
converted may not be reinvested in the Common
Stock of a Subsidiary or Affiliate.
(iii) Common Stock of a Subsidiary or Affiliate
held by the Plan shall be subject to the sale and
voting provisions of Section 6.
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SECTION 12
TOP HEAVY PROVISIONS
If the Plan is or becomes Top Heavy in any Plan Year beginning
after December 31, 1983, the provisions of this Section 12 will
supersede any conflicting provisions in the Plan.
12.1 Definitions.
(a) Key Employee means an Employee, former Employee or an
Employee's beneficiary who at any time during the
determination period is:
(i) An officer of the Company who has annual
Compensation greater than 50 percent of the amount
in effect under Section 415(b)(1)(A) of the Code
for the Plan Year;
(ii) One of the ten Employees owning (or considered as
owning within the meaning of Section 318 of the
Code) the largest interest in the Company;
provided, such Employee's annual Compensation from
the Company exceeds the dollar limitation under
Section 415(c)(1)(A) of the Code. If two or more
Employees have the same ownership interest, the
Employee with the greater annual Compensation from
the Company for the Plan Year shall be considered
to own the larger interest in the Company;
(iii) A five percent owner of the Company; or
(iv) A one percent owner of the Company who has annual
Compensation from the Company of more than $150,000.
The determination period of the Plan is the Plan Year
containing the Determination Date and the four
preceding Plan Years.
The determination of who is a Key Employee will be made
in accordance with Section 416(i)(1) of the Code and
the regulations thereunder.
(b) Top Heavy Plan: For any Plan Year after December 31,
1983, this Plan is Top Heavy if any of the following
conditions exist:
(i) If the Top Heavy Ratio for this Plan exceeds 60
percent and this Plan is not part of any Required
Aggregation Group or Permissive Aggregation Group
of plans;
(ii) If this Plan is a part of a Required Aggregation
Group of plans (but which is not part of a
Permissive Aggregation Group) and the Top Heavy
Ratio for the group of plans exceeds 60 percent; or
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(iii) If this Plan is a part of a Required Aggregation
Group of plans and part of a Permissive Aggregation
Group and the Top Heavy Ratio for the Permissive
Aggregation Group exceeds 60 percent.
(c) Top Heavy Ratio.
(i) If the Company maintains one or more defined
contribution plans (including any Simplified
Employee Pension Plan) and the Company has not
maintained any defined benefit plan which during
the five-year period ending on the Determination
Date(s) has or has had accrued benefits, the Top
Heavy Ratio for this plan alone or for the
Required or Permissive Aggregation Group as
appropriate is a fraction, the numerator of which
is the sum of the account balances of all Key
Employees as of the Determination Date(s)
[including any part of any account balance
distributed in the five-year period ending on the
Determination Date(s)], and the denominator of
which is the sum of all account balances
[including any part of any account balance
distributed in the five-year period ending on the
Determination Date(s)], both computed in
accordance with Section 416 of the Code and the
regulations thereunder. Both the numerator and
denominator of the Top Heavy Ratio are adjusted to
reflect any contribution not actually made as of
the Determination Date, but which is required to
be taken into account on that date under Section
416 of the Code and the regulations thereunder.
(ii) If the Company maintains one or more defined
contribution plans (including any Simplified
Employee Pension Plan) and the Company maintains
or has maintained one or more defined benefit
plans which during the five-year period ending on
the Determination Date(s) has or has had any
accrued benefits, the Top Heavy Ratio for any
Required or Permissive Aggregation Group as
appropriate is a fraction, the numerator of which
is the sum of account balances under the
aggregated defined contribution plan or plans for
all Key Employees, determined in accordance with
Subparagraph 12.1(c)(i), and the Present Value of
accrued benefits under the aggregated defined
benefit plan or plans for all Key Employees as of
the Determination Date(s), and the denominator of
which is the sum of the account balances under the
aggregated defined contribution plan or plans for
all Members, determined in accordance with
Subparagraph 12.1(c)(i), and the Present Value of
accrued benefits under the defined benefit plan or
plans for all Members as of the Determination
Date(s), all determined in accordance with Section
416 of the Code and the regulations thereunder.
The accrued benefits under a defined benefit plan
in both the numerator and denominator of the Top
Heavy Ratio are
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adjusted for any distribution of an accrued benefit made
in the five-year period ending on the Determination Date.
(iii) For purposes of Subparagraphs 12.1(c)(i) and
(c)(ii), the value of account balances and the
Present Value of accrued benefits will be
determined as of the most recent Valuation Date
that falls within or ends with the 12-month period
ending on the Determination Date except as
provided in Section 416 of the Code and the
regulations thereunder for the first and second
Plan Years of a defined benefit plan. The account
balances and accrued benefits of a Member (A) who
is not a Key Employee but who was a Key Employee
in a prior year, or (B) effective January 1, 1985,
who has not been credited with at least one Hour
of Service with a Company maintaining the Plan at
any time during the five-year period ending on the
Determination Date will be disregarded. The
calculation of the Top Heavy Ratio, and the extent
to which distributions, rollovers and transfers
are taken into account will be made in accordance
with Section 416 of the Code and the regulations
thereunder. Deductible Employee contributions will
not be taken into account for purposes of computing
the Top Heavy Ratio. When aggregating plans, the
value of account balances and accrued benefits will
be calculated with reference to the Determination
Dates that fall within the same calendar year.
(iv) The accrued benefit of a Member other than a Key
Employee shall be determined under the method, (A)
if any, that uniformly applies for accrual purposes
under all defined benefit plans maintained by the
Company, or (B) absent such method, as if such
benefits accrued not more rapidly than the slowest
accrued rate permitted under the fractional rule
of Section 411(b)(1)(C) of the Code.
(d) Permissive Aggregation Group: The Required Aggregation
Group of plans plus any other plan or plans of the
Company which, when considered as a group with the
Required Aggregation Group, would continue to satisfy
the requirements of Section 401(a)(4) and Section 410
of the Code.
(e) Required Aggregation Group means:
(i) Each qualified plan of the Company in which at
least one Key Employee participates or participated
at any time during the determination period
(regardless of whether the plan terminated); and
(ii) Any other qualified plan of the Company which
enables a plan described in Subparagraph
12.1(e)(i) to meet the requirements of Section
401(a)(4) or Section 410 of the Code.
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<PAGE>
(f) Determination Date means for any Plan Year the last day
of the preceding Plan Year. For the first Plan Year of
the Plan, the last day of that year.
(g) Valuation Date means December 31 of each year.
(h) Present Value: Present Value shall be based on
interest rate and the mortality tables specified in the
Company's defined benefit plan.
(i) Compensation means all compensation, as that term is
defined for Section 415 purposes, but including amounts
contributed by the Company pursuant to salary reduction
agreements which are excludable from the Employee's
income under Code Section 125, Section 402(e)(3),
Section 402(h) and Section 403(b).
12.2 Minimum Allocation.
(a) Except as otherwise provided in Subparagraphs 12.2(b),
(c) and (d), the Company contributions allocated on
behalf of any Member who is not a Key Employee shall
not be less than the lesser of three percent of such
Member's Compensation or in the case where the Company
has no defined benefit plan which designates this Plan
to satisfy Section 401 of the Code, the largest
percentage of Company contributions, as a percentage of
the first $150,000 of the Key Employee's Compensation,
allocated on behalf of any Key Employee for that year.
The minimum allocation is determined without regard to
any Social Security contribution. This minimum
allocation shall be made even though, under other Plan
provisions, the Member would not otherwise be entitled
to receive an allocation, or would have received a
lesser allocation for the year because of (i) the
Member's failure to complete 1,000 Hours of Service, or
(ii) the Member's failure to make mandatory employee
contributions to the Plan, or (iii) Compensation less
than a stated amount.
(b) The provision in Subparagraph 12.2(a), shall not apply
to any Member who was not employed by the Company on
the last day of the Plan Year.
(c) If Members of this Plan are covered by one or more
defined benefit plans maintained by the Company or its
Subsidiaries, the minimum allocation or benefit
requirements applicable to Top Heavy plans shall first
be met by such defined benefit plan or plans.
(d) If Members of this Plan are covered by one or more
defined contribution plans maintained by the Company or
its Subsidiaries, and are not covered by any defined
benefit plans of the Company or its Subsidiaries, the
minimum allocation requirement will be met by the
defined contribution plan in which the Employee is an
active member in the following order:
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<PAGE>
1. Money Purchase Pension Plan
2. Profit Sharing Plan, and
3. Stock Bonus Plan
(e) For purposes of satisfying the minimum allocation
requirements of this Paragraph 12.2, Elective Deferrals
and Company contributions under Paragraph 4.1 may not
be taken into account.
12.3 The minimum accrued benefit required [to the extent required
to be nonforfeitable under Section 416(b)] may not be
suspended or forfeited under Code Section 411(a)(3)(B) or
Section 411(a)(3)(D).
12.4 For any Plan Year in which the Plan is Top Heavy, only the
first $150,000 (or such larger amount as may be prescribed
by the Secretary of Treasury or the Secretary's delegate) of
each Member's annual Compensation will be taken into account
for purposes of determining benefits under the Plan.
12.5 In any Plan Year in which the Top Heavy Ratio exceeds 60
percent the denominators of the defined benefit fraction and
defined contribution fraction [as previously defined in the
Plan] shall be computed using 100 percent of the dollar
limitation instead of 125 percent. The preceding sentence
shall not apply to an Employee so long as there are no:
(a) Company contributions, forfeitures or voluntary
nondeductible contributions allocated to such Employee, or
(b) Accruals for such Employee under any qualified defined
benefit plan.
12.6 In determining the highest rate of contribution applicable
to any Key Employee, amounts that such Key Employee elects
to defer under an arrangement qualified under Section 401(k)
of the Code will be counted for the purposes of Section 416
of the Code.
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SECTION 13
LOANS TO MEMBERS
13.1 General.
A Member may borrow from his or her Account in accordance
with the terms and conditions set forth in this Section 13
and such additional rules, consistent with such terms and
conditions, which the Administrator may establish from time
to time.
13.2 Eligibility.
To be eligible to apply for and receive a loan, the Member
must be in receipt of regular Earnings. The loan shall be
irrevocable upon the earlier of:
(a) Endorsement of the check representing the loan
proceeds, or
(b) Expiration of ten days from issuance of such check.
13.3 Loan Amount.
(a) The maximum loan shall be the greater of (i) or (ii), below:
(i) The lesser of $10,000 (reduced by the outstanding
balance of any loan from an Atlantic Richfield
Savings Plan) or the value of the Member's Account
(which shall include the total of the Member's
Accounts in the Atlantic Richfield Capital
Accumulation and Savings Plans as of the date of
the loan and shall exclude United States Savings
Bonds); or
(ii) The lesser of one half of the Member's Account
(which shall include the total of the Member's
Accounts in all Atlantic Richfield Capital
Accumulation and Savings Plans as of the date of
the loan and shall exclude United States Savings
Bonds), or $50,000 reduced by the highest balance,
at any specific time, of any outstanding loan or
loans during the preceding 12 months from this
Plan or any other Atlantic Richfield Capital
Accumulation or Savings Plans).
(b) A loan must be in cash, in increments of $100 and in an
amount not less than $1,000.
(c) The maximum loan amount shall be reduced to the extent
necessary to prevent each installment of the loan
payment, including principal and interest, when added
to installments under any outstanding loan under
another Atlantic Richfield Company Savings or Capital
Accumulation Plan, from exceeding 25 percent of a
Member's biweekly Earnings.
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<PAGE>
(d) Unless determined otherwise by the Administrator, if
the Member is also a member of one of the savings plans
maintained by Atlantic Richfield Company at the time of
the application for the loan, the loan is permitted
only if the Member has, at such time, an outstanding
loan under one of the savings plans, or there are
insufficient assets to fund the loan in such savings plan.
(e) The loan amount may not exceed the lesser of (i) the
amount of the Member's Deferrals and earnings thereon
at the time the loan is made (excluding assets which
originated in the Atlantic Richfield Employee Stock
Ownership Plan); or (ii) the amount of the security, as
described hereafter, for the loan.
(f) The value of the Company Common Stock of the Company, a
Subsidiary or Affiliate and Lyondell Petrochemical
Company, or Equity Fund units, or Bond Fund units for
purposes of Subparagraph 13.3(a), will be determined on
the sale date, pursuant to Paragraph 6.7 or 6.11
immediately preceding the date the loan application is
received by the Administrator.
13.4 Frequency.
(a) A Member may have such number of loans outstanding at
any time as shall be determined by the Administrator.
(b) A loan application may be submitted only once during
any 30-day period and a loan application may not be
submitted earlier than seven days following receipt by
the Administrator of a Member's application to make a
purchase or sale under Paragraph 6.6 or a hardship
withdrawal under Section 7.
(c) A loan application may not be submitted earlier than 30
days following repayment of a previous loan under this
Plan or any other Atlantic Richfield Capital Accumulation
or Savings Plans.
(d) Unless determined otherwise by the Administrator, if
the Member is also a member of one of the savings plans
maintained by Atlantic Richfield Company at the time of
the application for the loan, the loan is permitted
only if the Member has, at such time, an outstanding
loan under one of the savings plans, or there are
insufficient assets to fund the loan in such savings plan.
13.5 Interest Rate.
A loan shall bear interest at a rate established and
communicated by the Capital Accumulation Plan Administrative
Committee to provide the Plan with a rate of return
commensurate with prevailing interest rates charged on
similar commercial loans by persons in the business of
lending money.
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<PAGE>
13.6 Security.
(a) Each loan must be evidenced by a loan agreement
executed by the Member for the amount of the loan,
including principal and interest, payable to the order
of the Trustee.
(b) Prior to the effective date of Subparagraph 13.6(c):
(i) The security for the loan shall be assets in the
Member's Account attributable to certain Company
contributions (including contributions under the
Predecessor Plan) and certain assets which
originated in the Atlantic Richfield Employee
Stock Ownership Plan, as described in
Subparagraphs 13.6(b)(ii)(A) and (B).
(ii) The value of the assets subject to the Plan's
security interest will depend on the number of
years the Member has participated in the Plan as
of the date of the loan agreement:
(A) If the Member has participated in the Plan
(including membership in the Predecessor
Plan) for at least five calendar years, the
value of the assets subject to the security
interest will be an amount that is 80 percent
of the sum of (1) the Company contributions,
and related earnings, to the Plan (including
the Predecessor Plan), and (2) assets
previously held under the Atlantic Richfield
Employee Stock Ownership Plan, which have
been held in the Plan for at least 84 months
(which shall include the time the assets were
held under the Atlantic Richfield Employee
Stock Ownership Plan).
(B) If the Member has participated in the Plan
(including membership in the Predecessor
Plan) for less than five calendar years, the
value of the assets subject to the security
interest will be an amount that is 80 percent
of the sum of (1) Company contributions, and
related earnings, to the Plan (including the
Predecessor Plan) which have been in the
Member's Account for at least two full
calendar years as of the December 31st
preceding the date of the loan, and (2)
assets transferred to the Plan which were
previously held under the Atlantic Richfield
Employee Stock Ownership Plan and which have
been in the Plan, or the Predecessor Plan,
for at least 84 months (which shall include
the time the assets were held under the
Atlantic Richfield Employee Stock Ownership Plan).
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<PAGE>
(c) As soon as administratively practicable, but no later
than July 1, 1995, security for the loans shall equal
50 percent of the assets in the Member's Account.
(d) The assets which constitute security for the loan will
be valued on the date of the loan agreement, or at such
other time as may be determined by the Administrator.
13.7 Funding of the Loan.
(a) The Member shall direct, on a form prescribed by the
Administrator, which assets shall be used to provide
the loan proceeds; provided, however, that Company
contributions that are held under the ESOP Part of the
Plan, and earnings thereon, may not be used to fund a
loan. To the extent the Member does not give such
directions, the loan will be funded in accordance with
procedures established by the Administrator.
(b) The value of Common Stock of Atlantic Richfield
Company, a Subsidiary or Affiliate or Lyondell
Petrochemical Company, Equity Fund Units or Bond Fund
units sold to provide the loan proceeds shall be
determined on the sale date, pursuant to Paragraph 6.7
or 6.11, immediately following the date the loan
application is received by the Administrator.
13.8 Repayment of Loan.
(a) As determined by the Member, but subject to the
restriction in Subparagraph 13.3(c), a loan may be
repaid over a period of one, two, three, four or five
years or, in the case of a loan used to acquire the
Member's principal residence, such longer term as
determined by the Administrator and permitted under
Section 72(p) of the Code.
(b) Principal and interest shall be amortized, on a level
basis, over the term of the loan.
(c) Except as provided below, payments shall be made by
means of payroll deductions, the authorization of which
shall be irrevocable.
(i) The loan may be repaid in full at any time without
penalty.
(ii) If a Member is not in receipt of regular Earnings
sufficient to permit repayment of the loan, repayment
shall be made by means prescribed by the Administrator.
Repaid principal and interest shall be credited to the
Member's Money Market Fund account.
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<PAGE>
13.9 Deemed Distribution.
A distribution of the unpaid principal shall be deemed to
have been made to the Member, if the Member:
(a) Separates from service for any reason, including
retirement, termination of employment, divestiture or
death. The deemed distribution shall occur upon the
earlier of 12 months following termination of
membership or the date the loan was due.
(b) Fails to make repayment under Subparagraph 13.8(c)(ii)
for a period of seven consecutive scheduled payment dates.
13.10 Default.
If the Member is not in receipt of regular Earnings
sufficient to permit repayment of the loan for a period
exceeding seven consecutive pay periods, and other
arrangements acceptable to the Administrator have not been
agreed to by the Member, the loan will be deemed in default
and the Administrator will realize on the security in
accordance with applicable laws.
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<PAGE>
SECTION 14
TRANSFERS FROM OTHER PLANS
14.1 Transfers from Other Qualified Plans.
An Employee who has had distributed to the Employee all or a
portion of his or her taxable interest in a plan meeting the
requirements of Section 401(a) of the Code (the "Other
Plan") may, in accordance with procedures approved by the
Capital Accumulation Plan Administrative Committee, transfer
in cash all or a portion of the taxable distribution
received from the Other Plan to the Plan, provided the
following conditions are met:
(a) The transfer occurs on or before the 60th day after the
Member receives the distribution from the Other Plan;
(b) The distribution from the Other Plan qualifies as an
eligible rollover distribution within the meaning of
Section 402(c)(4) of the Code; and
(c) The amount transferred does not exceed the maximum
amount which may be rolled over in accordance with
Section 402(c)(2) of the Code.
14.2 Transfers From Individual Retirement Accounts.
An Employee who receives a distribution from an individual
retirement account described in Section 408(a) of the Code
or an individual retirement annuity described in Section
408(b) of the Code which constitutes the entire amount of
such account or annuity (including earnings thereon), and no
portion of which is attributable to any source other than a
lump sum distribution from a qualified plan described in
Paragraph 14.1, may, in accordance with procedures approved
by the Capital Accumulation Plan Administrative Committee,
transfer in cash all or a portion of such distribution to
the Plan, within 60 days after receiving the distribution.
14.3 Participation.
Notwithstanding anything in the Plan to the contrary, an
Employee who transfers funds to the Plan pursuant to
Paragraph 14.1 or 14.2, shall, upon such transfer, become a
Member of the Plan except that the right to make Elective
Deferrals or receive Company contributions will remain
subject to Paragraph 2.1.
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<PAGE>
14.4 Administration.
The Administrator shall develop such procedures, including
procedures for obtaining information from an Employee
desiring to make such a transfer, as it deems necessary or
desirable to enable it to determine that the proposed
transfer will meet the requirements of this section. Upon
approval by the Capital Accumulation Plan Administrative
Committee, the amount transferred shall be deposited with
the Trustee in the Employee's Elective Deferral Account.
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<PAGE>
ATLANTIC RICHFIELD
CAPITAL ACCUMULATION PLAN III
To record the adoption of the amended and restated Atlantic
Richfield Capital Accumulation Plan III, effective July 1, 1994,
the undersigned, being duly authorized to act on behalf of
Atlantic Richfield Company has executed this plan document at Los
Angeles, California on the 24th day of October, 1994.
ATTEST: ATLANTIC RICHFIELD COMPANY
/S/ARMINEH SIMONIAN /S/JOHN H. KELLY
BY: ____________________ BY:________________________
John H. Kelly
Vice President
Human Resources
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CONSENT OF INDEPENDENT ACCOUNTANTS
We consent to the incorporation by reference in the following
registration statement of the ATLANTIC RICHFIELD CAPITAL
ACCUMULATION PLAN III, Post-Effective Amendment No. 4 to
Registration Statement on Form S-8 (No. 33-21553) and Post-
Effective Amendment No. 4 to Registration Statement on Form S-8
(No. 33-23640) of our report dated December 9, 1994, on our
audits of the statement of net assets available for benefits of
the ATLANTIC RICHFIELD CAPITAL ACCUMULATION PLAN III as of June
30, 1994 and 1993, the related statement of changes in net
assets available for benefits for the year ended June 30,
1994 and the supplemental schedules as of and for the year
ended June 30, 1994, which report is included in this Annual
Report on Form 11-K.
COOPERS & LYBRAND L.L.P.
Los Angeles, California
December 16, 1994
