<PAGE>
As filed with the Securities and Exchange Commission on May 28, 1999
Registration No.
================================================================================
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
-------------------------
FORM S-8
REGISTRATION STATEMENT
UNDER
THE SECURITIES ACT OF 1933
--------------------------
OCCIDENTAL PETROLEUM CORPORATION
(EXACT NAME OF ISSUER AS SPECIFIED IN ITS CHARTER)
DELAWARE 95-4035997
(STATE OR OTHER JURISDICTION OF (I.R.S. EMPLOYER
INCORPORATION OR ORGANIZATION) IDENTIFICATION NO.)
10889 WILSHIRE BOULEVARD
LOS ANGELES, CALIFORNIA 90024
(ADDRESS OF PRINCIPAL EXECUTIVE OFFICES) (ZIP CODE)
OXY VINYLS, LP SAVINGS PLAN
(FULL TITLE OF THE PLAN)
DONALD P. DE BRIER, ESQ., GENERAL COUNSEL
OCCIDENTAL PETROLEUM CORPORATION
10889 WILSHIRE BOULEVARD
LOS ANGELES, CALIFORNIA
(310) 208-8800
(NAME, ADDRESS AND TELEPHONE NUMBER, INCLUDING AREA CODE, OF AGENT FOR SERVICE)
CALCULATION OF REGISTRATION FEE
================================================================================
Proposed
Maximum Proposed
Title of Offering Maximum
Securities Amount Price Aggregate
to be to be Per Offering Amount of
Registered Registered Share(1) Price(1) Registration Fee
- --------------------------------------------------------------------------------
Common
Stock, $.20
par value 1,000,000(2) $21.250 $21,250,000 $5,907.50
(including
Preferred
Stock
Purchase
Rights)
================================================================================
(1) Estimated pursuant to Rule 457 solely for the purpose of calculating the
amount of the registration fee based on the closing price for the Common
Stock on May 25, 1999.
(2) Includes an indeterminate number of additional shares which may be
necessary to adjust the number of shares reserved for issuance pursuant to
the plan as the results of any future stock split, stock dividend or
similar adjustment of the outstanding Common Stock of the Registrant.
<PAGE>
PART II
INFORMATION REQUIRED IN REGISTRATION STATEMENT
ITEM 3. INCORPORATION OF CERTAIN DOCUMENTS BY REFERENCE
The following documents are hereby incorporated by reference in this
Registration Statement:
(a) The Annual Report on Form 10-K of Occidental Petroleum
Corporation ("Occidental" or the "Registrant") for the year ended December 31,
1998;
(b) (i) Quarterly Report on Form 10-Q for the quarterly period ended
March 31, 1999;
(ii) Current Report on Form 8-K, dated April 20, 1999 (filed
April 21, 1999); and
(c) The description of the Common Stock contained in the Registration
Statement on Form 8-B, dated June 26, 1986 (as amended by Form 8, dated December
22, 1986, Form 8, dated February 3, 1988, Form 8-B/A, dated July 12, 1993, Form
8-B/A, dated March 21, 1994, and Form 8-B/A, dated November 2, 1995 and
including any amendment or report filed for the purpose of updating such
descriptions subsequent to the date of this Registration Statement).
All documents filed by the Registrant or the Oxy Vinyls, LP Savings
Plan (the "Plan") pursuant to Sections 13(a), 13(c), 14 and 15(d) of the
Securities Exchange Act of 1934, as amended, after the date hereof prior to the
filing of a post-effective amendment which indicates that the securities offered
hereby have been sold or which deregisters the securities covered hereby then
remaining unsold, shall also be deemed to be incorporated by reference into this
Registration Statement and to be a part hereof from the date of delivery of such
documents. Any statement contained in a document incorporated or deemed to be
incorporated by reference herein shall be deemed to be modified or superseded
for purposes of this Registration Statement to the extent that a statement
contained herein, or in any other subsequently filed document that also is or is
deemed to be incorporated by reference herein, modifies or supersedes such
statement. Any such statement so modified or superseded shall not be deemed,
except as so modified or superseded, to constitute a part of this Registration
Statement.
ITEM 4. DESCRIPTION OF SECURITIES
Not applicable.
ITEM 5. INTERESTS OF NAMED EXPERTS AND COUNSEL
The validity of the Common Stock registered pursuant hereto has been
passed upon by Linda S. Peterson, a Senior Counsel of the Registrant. Ms.
Peterson beneficially owns, and has rights to acquire under employee stock
options, an aggregate of less than 1% of the outstanding shares of Common Stock
of Occidental.
1
<PAGE>
ITEM 6. INDEMNIFICATION OF DIRECTORS AND OFFICERS
Section 145 of the Delaware General Corporation Law authorizes a court
to award, or a corporation's board of directors to grant, indemnity to directors
and officers under certain circumstances for liabilities incurred in connection
with their activities in such capacities (including reimbursement for expenses
incurred). Occidental's Restated Certificate of Incorporation, as amended,
provides for the elimination of personal liability of its directors to the full
extent permitted by the Delaware General Corporation Law and Occidental has
entered into indemnification agreements with each director and certain officers
providing for additional indemnification. Article VIII of Occidental's By-laws
provides that Occidental shall indemnify directors and officers under certain
circumstances for liabilities and expenses incurred by reason of their
activities in such capacities. In addition, Occidental has insurance policies
that provide liability coverage to directors and officers while acting in such
capacities.
ITEM 7. EXEMPTION FROM REGISTRATION CLAIMED
Not applicable.
ITEM 8. EXHIBITS
3.(i) (a) Restated Certificate of Incorporation of Occidental, together
with all certificates amendatory thereof filed with the Secretary of
State of Delaware, as amended to date (incorporated by reference to
Exhibit 3.(i) to Occidental's Annual Report on Form 10-K for the
fiscal year ended December 31, 1994, File No. 1-9210, except for
Exhibits 3.(i)(b) and 3.(i)(c) described below).
(b) Certificate of Amendment of Restated Certificate of Incorporation
of Occidental dated April 25, 1997 (incorporated by reference to
Exhibit 3.(i)(b) to Occidental's Annual Report on Form 10-K for the
fiscal year ended December 31, 1997).
(c) Certificate of Amendment of Restated Certificate of Incorporation
of Occidental dated April 30, 1999 (incorporated by reference to
Exhibit 3.(i)(c) to Occidental's Registration Statement on Form S-8,
File No. 333-78031).
3.(ii) By-laws of Occidental, as amended through April 30, 1999 (incorporated
by reference to Exhibit 3.(ii) to Occidental's Registration Statement
on Form S-8, File No. 333-78031).
5.1 Opinion of Linda S. Peterson, Esq.
23.1 Consent of Linda S. Peterson, Esq. (Included in Exhibit 5.1).
23.2 Consent of Arthur Andersen LLP.
24.1 Power of Attorney (Reference is hereby made to page 4).
99.1 Oxy Vinyls, LP Savings Plan, effective May 1, 1999.
2
<PAGE>
ITEM 9. UNDERTAKINGS
The undersigned Registrant hereby undertakes:
1. To file, during any period in which offers or sales are
being made, a post-effective amendment to this registration statement:
(i) To include any prospectus required by Section
10(a)(3) of the Securities Act of 1933;
(ii) To reflect in the prospectus any facts or events
arising after the effective date of the registration statement (or the most
recent post-effective amendment thereof) which, individually or in the
aggregate, represent a fundamental change in the information set forth in the
registration statement. Notwithstanding the foregoing, any increase or decrease
in volume of securities offered (if the total dollar value of securities offered
would not exceed that which was registered) and any deviation from the low or
high end of the estimated maximum offering range may be reflected in the form of
prospectus filed with the Commission pursuant to Rule 424(b) if, in the
aggregate, the changes in volume and price represent no more than 20% change in
the maximum aggregate offering price set forth in the "Calculation of
Registration Fee" table in the effective registration statement.
(iii) To include any material information with respect
to the plan of distribution not previously disclosed in the registration
statement or any material change to such information in the registration
statement.
2. That, for the purpose of determining any liability under the
Securities Act of 1933, each such post-effective amendment shall be deemed to be
a new registration statement relating to the securities offered therein, and the
offering of such securities at that time shall be deemed to be the initial bona
fide offering thereof.
3. To remove from registration by means of a post-effective
amendment any of the securities being registered which remain unsold at the
termination of the offering.
The undersigned registrant hereby undertakes that, for purposes of
determining any liability under the Securities Act of 1933, each filing of the
Registrant's annual report pursuant to Section 13(a) or Section 15(d) of the
Securities Exchange Act of 1934 (and, where applicable, each filing of an
employee benefit plan's annual report pursuant to Section 15(d) of the
Securities Exchange Act of 1934) that is incorporated by reference in the
registration statement shall be deemed to be a new registration statement
relating to the securities offered therein, and the offering of such securities
at that time shall be deemed to be the initial bona fide offering thereof.
Insofar as indemnification for liabilities arising under the
Securities Act of 1933 may be permitted to directors, officers and controlling
persons of the Registrant pursuant to the foregoing provisions, or otherwise,
the Registrant has been advised that in the opinion of the Securities and
Exchange Commission such indemnification is against public policy as expressed
in the Act and is, therefore, unenforceable. In the event that a claim for
indemnification against such liabilities (other than the payment by the
Registrant of expenses incurred or paid by a director, officer or controlling
person of the registrant in the successful defense of any action, suit or
proceeding) is asserted by such director, officer or controlling person in
connection with the securities being registered, the Registrant will, unless in
the opinion of its counsel the matter has been settled by controlling precedent,
submit to a court of appropriate jurisdiction the question whether such
indemnification by it is against public policy as expressed in the Act and will
be governed by the final adjudication of such issue.
3
<PAGE>
POWER OF ATTORNEY
Each person whose signature appears below constitutes and appoints
Donald P. de Brier, Robert E. Sawyer and Linda S. Peterson his or her true and
lawful attorneys-in-fact and agents, each acting alone, with full powers of
substitution and resubstitution, for him or her and in his or her name, place
and stead, in any and all capacities, to sign any or all Amendments (including
Post-Effective Amendments) to this Registration Statement and to file the same,
with all exhibits thereto, and other documents in connection therewith, with the
Securities and Exchange Commission, granting unto said attorneys-in-fact and
agents, each acting alone, full power and authority to do and perform each and
every act and thing requisite and necessary to be done in and about the
premises, as fully to all intents and purposes as he or she might or could do in
person, here ratifying and confirming all that said attorneys-in-fact and
agents, each acting along, or his or her substitute or substitutes, may lawfully
do or cause to be done by virtue hereof.
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, Occidental
Petroleum Corporation certifies that it has reasonable grounds to believe that
it meets all of the requirements for filing on Form S-8 and has duly caused this
Registration Statement to be signed on its behalf by the undersigned, thereunto
duly authorized, in the City of Los Angeles, State of California, on May 28,
1999.
OCCIDENTAL PETROLEUM CORPORATION
By: /s/ RAY R. IRANI
-----------------------------------------------------------
Ray R. Irani
Chairman of the Board of Directors and Chief Executive Officer
Pursuant to the requirements of the Securities Act, this Registration Statement
has been signed by the following persons in the capacities and on the dates
indicated.
SIGNATURE TITLE DATE
--------- ----- ----
Chairman of the Board
/s/ RAY R. IRANI of Directors and
- ---------------------------- Chief Executive Officer May 28, 1999
Ray R. Irani
Chief Financial Officer and
/s/ STEPHEN I. CHAZEN Executive Vice President-
- ---------------------------- Corporate Development May 28, 1999
Stephen I. Chazen
Vice President and
/s/ SAMUEL P. DOMINICK, JR. Controller (Chief
- ---------------------------- Accounting Officer) May 28, 1999
Samuel P. Dominick, Jr.
/s/ RONALD W. BURKLE
- ---------------------------- Director May 28, 1999
Ronald W. Burkle
/s/ JOHN S. CHALSTY
- ---------------------------- Director May 28, 1999
John S. Chalsty
<PAGE>
/s/ EDWARD P. DJEREJIAN
- ---------------------------- Director May 28, 1999
Edward P. Djerejian
/s/ JOHN E. FEICK
- ---------------------------- Director May 28, 1999
John E. Feick
/s/ J. ROGER HIRL
- ---------------------------- Director May 28, 1999
J. Roger Hirl
/s/ JOHN W. KLUGE
- ---------------------------- Director May 28, 1999
John W. Kluge
/s/ DALE R. LAURANCE
- ---------------------------- Director May 28, 1999
Dale R. Laurance
/s/ IRWIN W. MALONEY
- ---------------------------- Director May 28, 1999
Irwin W. Maloney
/s/ RUDOLFO SEGOVIA
- ---------------------------- Director May 28, 1999
Rudolfo Segovia
/s/ AZIZ SYRIANI
- ---------------------------- Director May 28, 1999
Aziz Syriani
/s/ ROSEMARY TOMICH
- ---------------------------- Director May 28, 1999
Rosemary Tomich
<PAGE>
INDEX TO EXHIBITS
EXHIBIT
NUMBER DESCRIPTION
- ------- -----------
3.(i) (a) Restated Certificate of Incorporation of Occidental, together
with all certificates amendatory thereof filed with the Secretary of
State of Delaware, as amended to date (incorporated by reference to
Exhibit 3.(i) to Occidental's Annual Report on Form 10-K for the
fiscal year ended December 31, 1994, File No. 1-9210, except for
Exhibits 3.(i)(b) and 3.(i)(c) described below).
(b) Certificate of Amendment of Restated Certificate of Incorporation
of Occidental dated April 25, 1997 (incorporated by reference to
Exhibit 3.(i)(b) to Occidental's Annual Report on Form 10-K for the
fiscal year ended December 31, 1997).
(c) Certificate of Amendment of Restated Certificate of Incorporation
of Occidental dated April 30, 1999 (incorporated by reference to
Exhibit 3.(i)(c) to Occidental's Registration Statement on Form S-8,
File No. 333-78031).
3.(ii) By-laws of Occidental, as amended through April 30, 1999 (incorporated
by reference to Exhibit 3.(ii) to Occidental's Registration Statement
on Form S-8, File No. 333-78031).
5.1 Opinion of Linda S. Peterson, Esq.
23.1 Consent of Linda S. Peterson, Esq. (Included in Exhibit 5.1).
23.2 Consent of Arthur Andersen LLP.
24.1 Power of Attorney (Reference is hereby made to page 4).
99.1 Oxy Vinyls, LP Savings Plan, effective May 1, 1999.
<PAGE>
EXHIBIT 5.1
10889 WILSHIRE BOULEVARD
(LOGO) OCCIDENTAL PETROLEUM CORPORATION LOS ANGELES, CALIFORNIA 90024
TELEPHONE (310) 208-8800
FACSIMILE (310) 443-6690
LINDA S. PETERSON
ASSISTANT GENERAL COUNSEL
Direct Telephone (310) 443-6189
Direct Facsimile (310) 443-6737
E-Mail [email protected]
May 28, 1999
Occidental Petroleum Corporation
10889 Wilshire Boulevard
Los Angeles, CA 90024
Re: Occidental Petroleum Corporation
Registration Statement on Form S-8
Oxy Vinyls, LP Savings Plan
Ladies and Gentlemen:
I am an Assistant General Counsel of Occidental Petroleum Corporation, a
Delaware corporation ("Occidental"), and have acted as counsel to Occidental in
connection with the preparation of the above-referenced Registration Statement
on Form S-8, filed by Occidental with the Securities and Exchange Commission
("Commission") on May 28, 1999 (the "Registration Statement"). The Registration
Statement relates to the registration under the Securities Act of 1933, as
amended (the "1933 Act"), of 1,000,000 shares (the "Shares") of Common Stock,
par value $.20 per share, of Occidental. The Shares are to be issued in
accordance with the Oxy Vinyls, LP Savings Plan (the "Plan").
In connection with this opinion, I have examined and am familiar with
originals or copies, certified or otherwise identified to my satisfaction, of
such records of Occidental and all such agreements, certificates of public
officials, certificates of officers or other representatives of Occidental and
others and such other documents, certificates and records as I have deemed
necessary or appropriate as a basis for the opinions set forth herein,
including, without limitation, (i) the Registration Statement (together with the
form of prospectus forming a part thereof), (ii) the Restated Certificate of
Incorporation and By-laws of Occidental, as amended to date, (iii) copies of the
resolutions adopted by the Board of Directors of Occidental, relating to the
filing of the Registration Statement and any amendments or supplements thereto,
and the issuance of the Shares and related matters, and (iv) the Plan. In my
examination, I have assumed the genuineness of all signatures, the legal
capacity of natural persons, the authenticity of all documents submitted to me
as originals, the conformity to original documents of all documents submitted to
me as certified, conformed or photostatic copies and the authenticity of the
originals of such copies. As to any facts material to the opinions expressed
herein which I have not independently established or verified, I have relied
upon statements and representations of officers and other representatives of
Occidental and others.
lsp\s-8\ovlp-opin
<PAGE>
Occidental Petroleum Corporation
May 28, 1999
Page 2
I am a member of the California and New York Bars and for purposes of this
opinion do not hold myself out as an expert on, nor do I express any opinion as
to, the laws of any jurisdiction other than the General Corporation Law of the
State of Delaware.
Based upon and subject to the foregoing, I am of the opinion that the
Shares have been duly authorized and, when issued and paid for in accordance
with the Plan, will be validly issued, fully paid and nonassessable.
This opinion is delivered in accordance with the requirements of Item
601(b)(5) of Regulation S-K under the 1933 Act and is furnished to you solely
for your benefit in connection with the filing of the Registration Statement and
is not to be used, circulated, quoted or otherwise referred to for any other
purpose without my prior written consent. I hereby consent to the filing of this
opinion with the Commission as Exhibit 5 to the Registration Statement. I also
consent to the reference to me under the heading "Legal Matters" in the
Registration Statement. In giving this consent, I do not thereby admit that I am
included in the category of persons whose consent is required under Section 7 of
the 1933 Act or the rules and regulations of the Commission promulgated
thereunder.
Very truly yours,
/s/ LINDA S. PETERSON
Linda S. Peterson
<PAGE>
EXHIBIT 23.2
CONSENT OF INDEPENDENT PUBLIC ACCOUNTANTS
As independent public accountants, we hereby consent to the incorporation
by reference in this registration statement of our reports dated February 19,
1999 (except with respect to the matter discussed in Note 19, as to which the
date is March 2, 1999), included in Occidental Petroleum Corporation's Annual
Report on Form 10-K for the year ended December 31, 1998 and to all references
to our Firm included in this registration statement.
ARTHUR ANDERSEN LLP
Los Angeles, California
May 27, 1999
EXHIBIT 99.1
OXY VINYLS, LP
SAVINGS PLAN
Effective
May 1, 1999
069.MSW
<PAGE>
OXY VINYLS, LP SAVINGS PLAN
---------------------------
TABLE OF CONTENTS
-----------------
ARTICLE SECTION PAGE
- ------- ------- ----
1 Establishment of Plan
---------------------
1.1 Establishment of the Plan 1
1.2 Purpose of the Plan 1
1.3 Applicability of the Plan 1
2 Definitions
-----------
2.1 Definitions 2
2.2 Gender and Number 14
3 Participation and Service
-------------------------
3.1 Date of Participation 15
3.2 Duration 15
3.3 Transfers 15
3.4 Service 15
4 Pretax Deferrals, After-Tax Contributions and AdjustmentContributions
---------------------------------------------------------------------
4.1 Pretax Deferrals and After-Tax Contributions 17
4.2 Pretax Deferral and After-Tax Contribution 17
Election Procedures
4.3 Discontinuance or Change in Rate of Pretax Deferrals 17
and After-Tax Contributions
4.4 Salary Reduction 18
4.5 Individual Maximum Pretax Deferrals 18
and After-Tax Contributions
4.6 Discrimination Limits on Pretax Deferrals 19
4.7 Discrimination Limits on Matching Contributions, 22
After-Tax Contributions, and Adjustment Contributions
4.8 Multiple Use Limitation 23
4.9 Reductions to Pretax Deferrals and After-Tax 24
Contributions
4.10 Deposit of Pretax Deferrals, After-Tax Contributions 26
and Adjustment Contributions
4.11 Crediting of Pretax Deferrals, After-Tax Contributions 26
and Adjustment Contributions
4.12 Distribution of Excess Deferrals 26
i
<PAGE>
ARTICLE SECTION PAGE
- ------- ------- ----
5 Employer Matching Contributions
-------------------------------
5.1 Employer Matching Contributions 28
5.2 Deposit of Employer Matching Contributions 28
5.3 Crediting of Employer Matching Contributions 28
5.4 Forfeitures 28
5.5 Limitation on Annual Additions 29
5.6 "Annual Addition" Defined 29
5.7 Other Defined Contribution Plans 30
5.8 Defined Benefit Plans 30
5.9 Deductibility Limitation 31
5.10 Adjustment of Allocations 31
6 Vesting and Benefits
--------------------
6.1 Vesting 32
6.2 Benefits Upon Separation from Service 33
6.3 Forfeiture of Contingent Interests 34
6.4 Death Benefits 34
6.5 Forms of Payment 35
6.6 Time of Payment of Benefits 39
6.7 Withdrawals 39
6.8 Debiting of Investment Funds 41
6.9 Small Amounts 42
7 Participant Loans
-----------------
7.1 Eligibility 43
7.2 Loan Amount 43
7.3 Loan Terms 43
7.4 Source of Loan Funds and Valuation 44
7.5 Loan Account 44
7.6 Repayments 45
7.7 Leave of Absence 47
7.8 Separation from Service 47
7.9 Delinquent Payments 48
7.10 Discontinuance 48
8 Investment Elections
--------------------
8.1 Investment of Contributions 49
8.2 Transfers of Existing Balances 50
8.3 Transfer of Assets 51
ii
<PAGE>
ARTICLE SECTION PAGE
- ------- ------- ----
9 Participant Accounts and Records of the Plan
--------------------------------------------
9.1 Accounts and Records 52
9.2 Account Value 52
9.3 Investment Funds 52
9.4 Unit Value of Investment Funds 53
9.5 Calculation of Unit Value 53
9.6 Valuation Adjustments 53
9.7 Debiting of Accounts upon Distribution, Withdrawal, 54
Loan or Charge
9.8 Unit Value upon Transfer of Investment Funds 54
9.9 Loan Accounts 54
9.10 OPC Stock Fund Valuation 54
9.11 Value of Accounts 55
9.12 Cost Account 55
9.13 Rollovers 56
9.14 Transfer of Assets from the 57
Occidental Petroleum Corporation Savings Plan
10 Financing
---------
10.1 Financing 58
10.2 Employer Contributions 59
10.3 OPC Stock Fund 59
10.4 Non-Reversion 61
10.5 Direct Transfer of Assets from Plans of Acquired 61
Entities
11 Administration
--------------
11.1 The Administrative Committee 62
11.2 Chairman, Secretary, and Employment of Specialists 62
11.3 Compensation and Expenses 62
11.4 Manner of Action 63
11.5 Subcommittees 63
11.6 Other Agents 63
11.7 Records 63
11.8 Rules 63
11.9 Administrative Committee's Powers and Duties 63
11.10 Investment Responsibilities 65
iii
<PAGE>
ARTICLE SECTION PAGE
- ------- ------- ----
11 Administration (Continued)
--------------
11.11 Committees' Decisions Conclusive 65
11.12 Indemnity 66
11.13 Fiduciaries 66
11.14 Notice of Address 67
11.15 Data 67
11.16 Benefit Claims Procedures 67
11.17 Member's Own Participation 69
12 Amendment and Termination
-------------------------
12.1 Amendment and Termination 70
12.2 Distribution on Termination 70
12.3 Successors 70
12.4 Plan Merger or Transfer 71
12.5 Participating Affiliates 71
13 Top-Heavy Provisions
--------------------
13.1 Application of Top-Heavy Provisions 72
13.2 Key Employees 72
13.3 Top-Heavy Group 73
13.4 Additional Rules 74
13.5 Combined Limit on Contributions and 74
Benefits for Key Employees
13.6 Minimum Contributions 74
14 Miscellaneous Provisions
------------------------
14.1 Employment Rights 75
14.2 No Examination or Accounting 75
14.3 Investment Risk 75
14.4 Non-Alienation 75
14.5 Incompetency 75
14.6 Severability 76
14.7 Counterparts 76
14.8 Service of Legal Process 76
14.9 Headings of Articles and Sections 77
14.10 Applicable Law 77
14.11 Unclaimed Benefits 77
14.12 Qualified Military Service 77
iv
<PAGE>
OXY VINYLS, LP
--------------
SAVINGS PLAN
------------
Article 1. Establishment of Plan
--------------------------------
1.1 Establishment of the Plan. OXY VINYLS, LP hereby establishes the Oxy
Vinyls, LP Savings Plan (hereinafter referred to as the "Plan") for the benefit
of Eligible Employees, effective as of May 1, 1999.
1.2 Purpose of the Plan. This Plan is intended to encourage and assist
Eligible Employees in adopting a regular program of savings to provide
additional security for their retirement.
1.3 Applicability of the Plan. Except as otherwise provided herein, the
provisions of this Plan are applicable only to Eligible Employees in the employ
of the Company and selected Affiliates on or after May 1, 1999.
1
<PAGE>
Article 2. Definitions
----------------------
2.1 Definitions. Whenever used in the Plan the following terms shall have
the respective meanings set forth below unless otherwise required by the context
in which they are used:
(a) "Accounting Date" means any business day. For this purpose, "business
day" means a day on which trading occurs on the New York Stock
Exchange.
(b) "Adjustment Contributions" means Pretax Deferrals which are converted
to After-Tax Contributions in order to comply with limitations under
Code section 415 or to comply with nondiscrimination tests of Code
section 401(k).
(c) "Administrative Committee" means the committee appointed by the
Governance Committee to administer the Plan in accordance with the
applicable provisions of Article 11 of this Plan.
(d) "Affiliate" means a corporation or other employer which is controlled
by or under common control with the Company, within the meaning of
sections 414 and 1563 of the Code. The determination of control shall
be made without reference to paragraphs (a)(4) and (e)(3)(C) of
section 1563, and solely for the purpose of applying the limitations
of sections 5.5 through 5.8 of this Plan, the phrase "more than 50
percent" shall be substituted for the phrase "at least 80 percent"
each place it appears in section 1563(a)(1). In addition, to the
extent that the context may so require, "Affiliate" means any member
of an affiliated service group (within the meaning of section 414(m)
of the Code) to which the Company belongs, and any corporation, trade
or business which is more than 50 percent owned, directly or
indirectly, by the Company and is designated by the Governance
Committee as an Affiliate.
(e) "After-Tax Contributions" means the amount a Participant requests the
Company to contribute on his behalf on an after-tax basis in
accordance with section 4.1.
2
<PAGE>
(f) "Alternate Payee" has the same meaning as assigned to that term in
section 414(p)(8) of the Code.
(g) "Beneficiary" means the person or persons (who may be named
contingently or successively) designated by a Participant, an
Alternate Payee, or a beneficiary of a deceased Participant or a
deceased Alternate Payee to receive his Personal Savings Account in
the event of his death. Each Participant, Alternate Payee, and
beneficiary of a deceased Participant or Alternate Payee, except
married Participants prior to the day they reach age 35, may designate
at any time, and any number of times, a beneficiary on a form
prescribed by the Administrative Committee, and such designation will
be effective only when filed in writing with the Administrative
Committee, and shall revoke all prior designations by the same
Participant or Alternate Payee. The Administrative Committee shall
require that a married Participant who designates a Beneficiary other
than his spouse obtain and submit to the Administrative Committee the
spouse's notarized written consent to the designation on a form that
discloses to the spouse the potential effect of such consent. If a
Participant is married and is under age 35, then his Beneficiary shall
be his spouse. If no Beneficiary is designated at the time of the
Participant's or Alternate Payee's death, or at the time of death of
the beneficiary of a deceased Participant or Alternate Payee, or if no
person so designated shall survive the Participant, Alternate Payee,
or beneficiary of a deceased Participant or Alternate Payee, the
Beneficiary shall be his spouse, or if the deceased individual has no
surviving spouse, his surviving children equally, or if there are no
surviving children, his surviving parents equally, or if only one
parent is living, his living parent, or if no parent is living, his
surviving siblings equally, or if only one sibling is living, his
surviving sibling, or if no sibling is living, his estate.
3
<PAGE>
In the case of those Employees who became Participants on the
Effective Date and who, on the day prior to the Effective Date, were
participants in the Occidental Petroleum Corporation Savings Plan (the
"OPC Savings Plan"), "Beneficiary" means the person or persons so
designated under the OPC Savings Plan until a new Beneficiary
designation is effected as described above by such Employee.
(h) "Code" means the Internal Revenue Code of 1986, as amended.
(i) "Company" means Oxy Vinyls, LP.
(j) "Compensation" means the base salary and wages earned by a Participant
from an Employer for services rendered, including amounts of Pretax
Deferrals and amounts contributed pursuant to the Oxy Vinyls, LP
Pretax Spending Program, but excluding (i) bonuses, incentives,
overtime, shift differential, and overseas differentials, (ii)
reimbursement for expenses or allowances, including automobile
allowances and moving allowances, (iii) any amount contributed by the
Employer (other than Pretax Deferrals and amounts contributed pursuant
to the Oxy Vinyls, LP Pretax Spending Program) to any pension plan or
plan of deferred compensation, (iv) any amount contributed by an
Employer (in addition to Pretax Deferrals) to this Plan, and (v) any
amount paid by an Employer for other fringe benefits, such as health
and hospitalization, and group life insurance benefits, or
perquisites, provided that earnings of a Participant in excess of
$160,000 ($106,667 in the Plan Year ending December 31, 1999), or such
higher amount as shall be permitted by the Secretary of the Treasury,
in any Plan Year shall not be included in Compensation. Compensation
will be determined in accordance with the following rules:
(1) For Participants compensated by salary, the amount of
Compensation shall be base salary of record for each pay period,
provided, however, that for any salaried Participant whose salary
is reduced for a pay period (for
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reasons other than the making of Pretax Deferrals and
contributions pursuant to the Oxy Vinyls, LP Pretax Spending
Program), Compensation will include his actual base salary of
record paid to him (subject to the exclusions listed above) not
in excess of his salary of record for such pay period.
(2) For Participants compensated by commission (primarily truck
drivers), the amount of Compensation shall be the amount per pay
period (subject to the exclusions listed above) to be reported on
Form W-2 for federal tax purposes.
(3) For Participants compensated at an hourly rate, the amount of
Compensation in a pay period shall be the base hourly rate
(subject to the exclusions listed above) multiplied by the number
of regularly scheduled hours worked in a pay period. If the
Participant's regularly scheduled work week is more than 40
hours, Compensation shall include an additional amount equal to
the base hourly rate (subject to the exclusions listed above)
times one half the number of regularly scheduled hours worked in
excess of 40 in the work week.
(4) For Participants compensated on a Twelve Hour Shift Basis, the
amount of Compensation for each pay period shall be the
Participant's annual base salary of record (including Guaranteed
Overtime) divided by the number of pay periods applicable to the
Participant during the Plan Year. For the purpose of this
subsection 2.1(j), the term "Twelve Hour Shift Basis" means any
arrangement whereby Participants work twelve hour daily shifts
which may result in alternating work weeks of more and less than
forty hours per week. Additionally, for the purpose of this
subsection 2.1(j), the term "Guaranteed Overtime" means
compensation paid to a
5
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Participant for overtime work which the Participant is assigned
at the beginning of the year to perform.
(5) Compensation shall include vacation pay received in periodic
payments and annual vacation payments made to commission paid
Employees, but shall not include single sum vacation payments to
active or terminating Employees.
(6) Compensation shall include base salary or wages received during
paid leaves of absence and periodic severance pay, but will not
include single sum severance payments.
(7) Compensation will not include long-term disability payments and
short-term disability payments of less than 100 percent of base
pay in effect prior to becoming Disabled.
(k) "Disability" or "Disabled" refers to any Participant who is determined
to be disabled under Section 423 of Title 42 of the U. S. Code and who
receives disability insurance benefits thereunder or any Participant
who is a participant in the Oxy Vinyls, LP Long-Term Disability Plan
and who is determined to be disabled therein under the definition of
"disability" applicable to the period beginning 24 months after the
commencement of disability and who receives benefits thereunder. Such
Participant shall be considered to be Disabled as of the time of
commencement of benefits as described above.
A Participant who claims to be Disabled as a result of being
determined to be disabled under Section 423 of Title 42 of the U.S.
Code must give written notice thereof to the Administrative Committee
and submit, at the expense of the Participant, to the Administrative
Committee such evidence of Disability as the Administrative Committee
may require. Failure by a Participant to comply with the foregoing
requirements shall be deemed conclusive evidence that such
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<PAGE>
Participant is not Disabled. All rules with respect to the
determination of Disability shall be uniformly and consistently
applied to all Participants in similar circumstances.
(l) "Domestic Overseas Subsidiary" means any corporation or unincorporated
entity created or organized under the laws of the United States, any
State or territory of the United States, or of the District of
Columbia, (i) more than 80 percent of the voting stock or equity of
which is owned by an Employer which is a domestic corporation, (ii)
which has derived at least 95 percent of its gross income from sources
without the United States for the three year period immediately
preceding the close of each taxable year (or for such part of such
period during which the corporation or unincorporated entity was in
existence), and (iii) which has derived at least 90 percent of its
gross income during the period described in (ii) from the active
conduct of a trade or business.
(m) "Effective Date" means May 1, 1999.
(n) "Eligible Employee" means any Employee who is employed by an Employer
except:
(1) Employees covered by a collective bargaining agreement where
retirement benefits were the subject of good faith bargaining
between the Employer and the union, unless such agreement
expressly provides participation in the Plan;
(2) Nonresident alien Employees of an Employer which is a Foreign
Subsidiary or Domestic Overseas Subsidiary who receive no earned
income from the Employer in United States dollars, unless the
Plan has been made applicable to such an Employee by the
Employer;
(3) Employees of a Foreign Subsidiary or Domestic Overseas Subsidiary
who are citizens of the United States or Canada and for whom
contributions are
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<PAGE>
made under a funded plan of deferred compensation by a
corporation which is not an Employer;
(4) Citizens of the United Kingdom who are on work assignments under
three years' duration in locations outside the United Kingdom,
other than the United States, irrespective of whether employed by
an Employer which is a Foreign Subsidiary or a Domestic Overseas
Subsidiary and irrespective of whether receiving earned income
from the Employer in United States dollars. For the purpose of
this paragraph (4), the duration of a work assignment shall be
based on its estimated duration as determined at the time of its
commencement; and
(5) Any Eligible Employee who elects, pursuant to an employment
agreement with the Company or any other Employer, not to be a
Participant.
Notwithstanding any other provision of this subsection 2.1(n), no
individual shall be an Eligible Employee if such individual is not
classified as a common-law employee in the employment records of the
Company or an Affiliate, without regard to whether the individual is
subsequently determined to have been a common-law employee of the
Company or an Affiliate. The persons excluded by this paragraph from
being Eligible Employees are to be interpreted broadly to include and
to have at all times included individuals engaged by the Company or an
Affiliate to perform services for such entity in a relationship that
the entity characterizes as other than an employment relationship,
such as where the Company or the Affiliate engages the individual to
perform services as an independent contractor or leases the
individual's services from a third party. The exclusion of the
individual from being an Eligible Employee shall apply even if a
determination is subsequently made by the Internal Revenue Service,
another governmental agency, a court or other tribunal, after the
individual is engaged to
8
<PAGE>
perform such services, that the individual is an employee of the
Company or Affiliate for purposes of pertinent Code sections or for
any other purpose.
(o) "Employee" means any person employed by the Company or by an
Affiliate.
(p) "Employer" means the Company and any Affiliate which is designated by
the Governance Committee or the Administrative Committee and which
adopts this Plan.
(q) "ERISA" means the Employee Retirement Income Security Act of 1974, as
from time to time amended.
(r) "Foreign Subsidiary" means any corporation or unincorporated entity
created or organized under the laws of any country other than the
United States which is covered by an agreement between the domestic
parent of the Foreign Subsidiary and the Internal Revenue Service
extending Federal Social Security benefits to the employees of such
foreign corporation or unincorporated entity who are United States
citizens and either (i) not less than 20 percent of the voting stock
or equity of such foreign corporation or unincorporated entity is
owned by an Employer which is a domestic corporation or (ii) more than
50 percent of the voting stock or equity of such foreign corporation
or unincorporated entity is owned by a foreign corporation or
unincorporated entity which qualifies as a Foreign Subsidiary under
clause (i) above.
(s) "Governance Committee" means the Governance Committee of the Company.
(t) "Inactive Participant" means an Employee who was a Participant but who
is transferred to and is in a position of employment where he is no
longer an Eligible Employee.
(u) "Investment Committee" means the committee appointed by the Board of
Directors of Occidental Petroleum Corporation to administer the
investments of the Plan.
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<PAGE>
(v) "Investment Fund" means any of the following funds of the Trust Fund
or such other funds as the Investment Committee may from time to time
designate:
(1) A "Stable Value Fund" which shall be invested in stable value
contracts which state a given interest rate to be paid on account
balances.
(2) An "OPC Stock Fund" which shall be invested primarily in Stock
and such short-term interest-bearing securities as the Investment
Committee or the Trustee considers advisable.
(3) A "Standard & Poor's 500 Index Fund" which shall be designed to
approximate the performance of the publicly traded United States
common stocks that comprise the Standard & Poor's 500 Index.
(4) A "Diversified Balanced Fund" which shall be invested in a
mixture of stocks and bonds that will vary moderately with market
conditions.
(5) An "Asset Allocation Fund" which shall be invested in a mixture
of stocks and bonds that will vary significantly with market
conditions.
(6) A "Large Cap Balanced Fund" which shall be invested primarily in
shares of large companies, but also, where appropriate, shares of
small companies and international companies.
(7) A "Large Cap Growth Fund" which shall be invested primarily in
shares of large companies with the highest potential for total
return.
(8) An "International Growth Fund" which shall be invested in shares
of international companies of various sizes.
(w) "Loan Account" means the account created under section 7.5
representing the unpaid principal outstanding on a loan to an
Employee.
(x) "Participant" means any Eligible Employee who has met the requirements
to become a Participant as set forth in section 3.1 hereof, and shall
include, where appropriate to the context, any former Participant
described in section 3.2.
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(y) "Plan Year" means the calendar year, provided that the initial Plan
Year is the period beginning May 1, 1999 and ending December 31, 1999.
(z) "Pretax Deferrals" means the amount a Participant requests the Company
to defer on his behalf on a pretax basis in accordance with section
4.1.
(aa) "Retirement Plan" means the Oxy Vinyls, LP Retirement Plan.
(bb) "Savings Account" or "Account" means the Account or Accounts
maintained for each Participant which represent his total
proportionate interest in the Trust Fund as of any date and which
consist of the sum of the following:
(1) "Matching Account" means an account to which Employer matching
contributions made on behalf of the Participant, including
matching contributions under this Plan (or any other plan which
may be merged into this Plan) prior to the Effective Date, shall
be credited, along with earnings as provided in Article 9.
(2) "Pretax Deferral Account" means an account to which Pretax
Deferrals made on behalf of the Participant shall be credited,
along with earnings as provided in Article 9.
(3) "Employee Account" means an account to which After-Tax
Contributions made by the Participant, including Adjustment
Contributions and After-Tax contributions made under this Plan
(or any other plan which may be merged into this Plan) prior to
the Effective Date, shall be credited, along with earnings as
provided in Article 9.
(4) "Rollover Account" means an account to which a Participant has
transferred amounts from another employee benefit plan pursuant
to section 9.13.
The term "Savings Account" or "Account" also means a separate account
which is established pursuant to a qualified domestic relations order
on behalf of an
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<PAGE>
Alternate Payee. For the purpose of this subsection 2.1(bb), the term
"qualified domestic relations order" shall have the same meaning as
assigned to that term in section 414(p) of the Code.
(cc) "Separation from Service" means any termination of the employment
relationship between an Employee and the Company or an Affiliate and
shall be deemed to occur upon the earlier of:
(1) the date upon which the Employee quits, is discharged, is laid
off, becomes Disabled or dies; or
(2) the first anniversary of the first day of a period in which the
Employee is (and remains) absent from the Service of the Company
or an Affiliate for any reason (such as vacation, sickness, or
leave of absence granted by the Company or an Affiliate) not
enumerated in paragraph (1), provided that if an Employee is
granted a leave of absence but fails to return to employment at
the end of the leave period, Separation from Service will be
deemed to have occurred upon the date the Employee was originally
granted a leave of absence.
Notwithstanding the above, a Separation from Service will not be
considered to have occurred with respect to an Employee as a result of
the sale of the Employee's Employer or a sale of the facility at which
the Employee is employed unless
(i) such Employee has attained age 59 1/2 or is Disabled at the time
of such sale, provided that such Employee will be considered to
have incurred a Separation from Service upon his subsequent
death, attainment of Disability, or attainment of age 59 1/2 if
he has not already incurred a
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<PAGE>
Separation from Service pursuant to other provisions of this
subsection 2.1(cc) by such time; or
(ii) in the opinion of the Administrative Committee, such sale
otherwise results in a separation from service (as that term is
used in Treasury Regulation section 1.401(k)-1(d)(1)(i)) as to
such Employee.
An Employee of an Employer who transfers to a nonparticipating
Affiliate shall not be treated as having a Separation from Service. An
Employee's date of quit or discharge shall not be deemed to occur
until any periodic severance payments, short-term disability payments,
or weekly sickness and accident payments cease. An Employee who is on
leave of absence from work with the Company or an Affiliate in order
to serve the Armed Forces of the United States shall not have a
Separation from Service unless he fails to report for work at the end
of such leave and prior to expiration of the period in which he has
reemployment rights under law. The absence of any Employee who fails
to return to work within the allotted time shall be subject to the
provisions of paragraph (2) above.
(dd) "Service" means the periods of employment credited to an Employee
under section 3.4.
(ee) "Stock" means the common stock of Oxy Vinyls, LP.
(ff) "Taxable Compensation" means the total cash and non-cash remuneration
paid to a Participant by the Employer for services rendered during the
Plan Year, but excluding:
(1) Company contributions for a simplified employee pension;
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<PAGE>
(2) Deferred compensation (other than an amount included in the
Participant's gross income for the Plan Year which is
attributable to an unfunded, non-qualified plan);
(3) Amounts realized from the exercise of a non-qualified stock
option, or when restricted stock (or property) held by an
Employee becomes freely transferable or is no longer subject to a
substantial risk or forfeiture;
(4) Amounts realized from the sale, exchange or other disposition of
stock under a tax-benefited stock option; and
(5) Other amounts which receive special tax benefits.
(gg) "Trust Agreement" means any agreement in the nature of a trust
established to form a part of the Plan to receive, hold, invest, and
dispose of the Trust Fund.
(hh) "Trust Fund" means the assets of every kind and description held under
any Trust Agreement forming a part of the Plan.
(ii) "Trustee" means any person selected by Oxy Vinyls, LP to act as
Trustee under any Trust Agreement at any time of reference.
(jj) "Unit" means the unit of measure into which each Investment Fund is
divided for purposes of ascertaining the share of each such fund
attributable to each Participant, Beneficiary and Alternate Payee.
2.2 Gender and Number. Except when otherwise indicated by the context, any
masculine terminology herein shall also include the feminine, and the definition
of any term herein in the singular shall also include the plural.
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<PAGE>
Article 3. Participation and Service
------------------------------------
3.1 Date of Participation. Each Eligible Employee shall become a
Participant as of the first day of the month in which he becomes an Eligible
Employee.
3.2 Duration. An Eligible Employee who becomes a Participant shall remain a
Participant for as long as he remains an Eligible Employee or is entitled to
receive any contributions or benefits hereunder.
3.3 Transfers. An Employee who transfers to employment as an Eligible
Employee shall become a Participant on the first day of the month in which such
transfer takes place.
An Inactive Participant shall not make Pretax Deferrals, After-Tax Contributions
or Adjustment Contributions on the Compensation earned after the date of his
transfer during the period he is an Employee, but shall continue to accrue
Service under this Plan. Upon his Separation from Service, the vested interest
he has in his Savings Account shall be based on his total Service.
If a Participant becomes an Inactive Participant, his Account shall continue to
be held under the Plan until he becomes entitled to a distribution under the
provisions of section 6.2.
3.4 Service. Service is used to determine an Employee's eligibility to
receive benefits from the Plan.
An Employee shall be credited with Service for the period of time during which
the employment relationship exists between the Employee and the Company or an
Affiliate, the length of which shall be determined, in completed years and
months, during the following periods of time:
(a) Credit shall be given to an Employee for the period of time beginning
on the first day of the month in which he first becomes an Employee
and ending on the last day of the month of such Employee's Separation
from Service.
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<PAGE>
(b) Credit shall be given to an Employee for each period beginning upon
the date he Separates from Service and ending upon the first day of
the month in which he first becomes an Employee thereafter but only if
the Employee is reemployed within 12 months of the date of such
Separation from Service.
(c) Credit shall be given to an Employee after a Separation from Service
for any period beginning on the first day of the month in which the
Employee first becomes an Employee after his rehire and ending on the
last day of the month the Employee has a Separation from Service
thereafter as provided in section 2.1(cc).
(d) Whenever the total number of years of Service of an Employee must be
ascertained under this Plan, all noncontinuous periods of Service
which are credited to such Employee under paragraphs (a), (b) and (c)
above, shall be aggregated. For purposes of aggregating such years of
Service, the completed years and months credited to an Employee during
any period of Service shall be added to the number of completed years
and months credited to him during any other period of noncontinuous
Service.
Notwithstanding the foregoing provisions of this section, an Employee shall be
credited with Service for the period of time during which an employment
relationship existed between the Employee and the following entities or
subsidiaries thereof, irrespective of whether the entity was an Affiliate at the
time the employment relationship was in existence:
The Geon Company
Occidental Petroleum Corporation
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<PAGE>
Article 4. Pretax Deferrals, After-Tax Contributions and Adjustment
-------------------------------------------------------------------
Contributions
-------------
4.1 Pretax Deferrals and After-Tax Contributions. Each Participant may
elect to have the Company contribute to the Plan on his behalf each Plan Year an
amount, in whole percentage points, equal to 1 percent to 12 percent of his
Compensation as a Pretax Deferral or After-Tax Contribution, or any combination
in whole percentage points, in accordance with the rules set forth in sections
4.2, 4.5 and 4.6 and such other rules as the Administrative Committee may
prescribe.
4.2 Pretax Deferral and After-Tax Contribution Election Procedures.
Elections shall be made available by the Administrative Committee to
Participants and to Employees expected to become Participants. Elections must be
made in accordance with procedures established by the Administrative Committee.
All elections shall apply to Compensation earned in the first available payroll
period following the date the election is processed, and all elections shall be
irrevocable for such period.
If a Participant has a Separation from Service, becomes an Inactive Participant,
or goes on unpaid leave of absence, his Pretax Deferrals, After-Tax
Contributions and Adjustment Contributions shall cease, unless he is reinstated
as a Participant or returns from his leave of absence, in which case his Pretax
Deferrals, After-Tax Contributions and Adjustment Contributions may resume.
4.3 Discontinuance or Change in Rate of Pretax Deferrals and After-Tax
Contributions. Pretax Deferral and After-Tax Contribution elections shall apply
automatically to each subsequent payroll period unless a new election (which may
increase, decrease or cancel Pretax Deferrals or After-Tax Contributions) is
filed with the Administrative Committee in accordance with this section.
A Participant may suspend his Pretax Deferrals, After-Tax Contributions and
Adjustment Contributions by giving notice in accordance with procedures
established by the Administrative
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<PAGE>
Committee. Such suspension may last indefinitely. A Participant may resume his
Pretax Deferrals, After-Tax Contributions and Adjustment Contributions after the
prior suspension, by giving notice in accordance with procedures established by
the Administrative Committee.
A Participant may change the rate of his Pretax Deferrals, After-Tax
Contributions and Adjustment Contributions to a different percentage that is
permitted under section 4.1. Such change shall be made by submitting a new
election in accordance with procedures established by the Administrative
Committee.
4.4 Salary Reduction. Each Participant who makes a Pretax Deferral election
described in section 4.1 to have the Employer contribute a percentage of his
Compensation to this Plan shall, by the act of making such election, have his
salary reduced by an equivalent percentage for so long as the election remains
in effect.
4.5 Individual Maximum Pretax Deferrals and After-Tax Contributions. The
Pretax Deferral and After-Tax Contribution election of a Participant shall be
adjusted in whole percentages, if necessary, from time to time as determined by
the Administrative Committee so that such Pretax Deferrals and After-Tax
Contributions for the Plan Year will not exceed (a) less (b) below, where:
(a) is the lesser of,
(1) 25 percent of Taxable Compensation, or
(2) $30,000 (or such other dollar maximum as may be permitted by the
Internal Revenue Service), and
(b) is the sum of:
(1) Employer contributions projected for the Participant as if he
were a Participant under the Retirement Plan for a full Plan
Year; plus
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<PAGE>
(2) Matching contributions expected to be allocated to the
Participant under this Plan (based on any such allocations
already made and the Participant's current Pretax Deferral and
After-Tax Contribution election) for a full Plan Year.
Any adjustment in the elected percentage of a Participant, and the resulting
adjustment in salary reduction under section 4.4, shall take effect in the month
of such adjustment calculation and shall remain in effect as a maximum Pretax
Deferral level for the Participant for the rest of the Plan Year, unless further
adjusted by the Administrative Committee. In the case of a Participant who has
elected Pretax Deferrals and After-Tax Contributions in the same Plan Year, any
adjustment which must be made under this section for a Participant shall be made
first to the Participant's After-Tax Contributions. If additional adjustments
are required under this section after the Participant's After-Tax Contributions
percentage is reduced to zero, such adjustments shall be made to the
Participant's Pretax Deferrals.
Notwithstanding anything herein to the contrary, under no circumstances may a
Participant's Pretax Deferral in any calendar year exceed $10,000 (or such
higher amount as the Secretary of the Treasury shall establish from time to time
pursuant to Code section 402(g)(5)).
4.6 Discrimination Limits on Pretax Deferrals. Prior to the beginning of
each Plan Year and at any other time during the Plan Year that the
Administrative Committee may deem appropriate, the following test shall be made
to prevent the Pretax Deferrals under the Plan from becoming discriminatory.
In no event shall any Employer make Pretax Deferrals for any Plan Year that
would result in the actual deferral percentage ("ADP") for the Plan Year of the
group of Highly Compensated Employees eligible to participate in the Plan
exceeding the greater of:
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(A) For the Plan Year beginning May 1, 1999:
(i) One and one-quarter times the ADP for the current Plan Year of the
group of all other Eligible Employees; or
(ii) The lesser of (i) two times the ADP for the current Plan Year of the
group of all other Eligible Employees, or (ii) the ADP for the current
Plan Year of the group of all other Eligible Employees plus two
percentage points.
(B) For Plan Years beginning after December 31, 1999:
(i) One and one-quarter times the ADP for the preceding Plan Year of the
group of all other Eligible Employees; or
(ii) The lesser of (i) two times the ADP for the preceding Plan Year of the
group of all other Eligible Employees, or (ii) the ADP for the
preceding Plan Year of the group of all other Eligible Employees plus
two percentage points.
The ADP of each group of Eligible Employees for any Plan Year shall be the
average of the ratios (calculated separately for each Eligible Employee in each
group after making any adjustments required under section 4.5) of (I) the Pretax
Deferrals made on behalf of each Eligible Employee for such Plan Year to (II)
such Eligible Employee's ADP Testing Compensation, earned while such Employee
was an eligible employee within the meaning of Treasury regulation section
1.401(k)-1(g)(4)(i) for such Plan Year.
For purposes of making these determinations, an Employee will be considered to
be a "Highly Compensated Employee" in the current Plan Year if he:
(a) is a 5% Owner in the current or preceding Plan Year; or
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<PAGE>
(b) has Highly Compensated Test Compensation during the preceding Plan
Year of more than $80,000 (or such higher amount as the Secretary of
the Treasury shall establish from time to time pursuant to Code
section 414(q)(1)).
In applying the $80,000 limit described in subsection (b) above, the
Administrative Committee may elect to limit the determination of Highly
Compensated Employees to that group of Employees consisting of the top 20% of
such Employees ranked on the basis of Compensation received during the Plan
Year.
For the purposes of identifying "Highly Compensated Employees" and for applying
the ADP test described above, the following special rules and definitions will
apply:
(i) An Employee who has Separated from Service will continue to be a
Highly Compensated Employee if he was a Highly Compensated Employee at
the time he Separated from Service, or if he was a Highly Compensated
Employee at any time after he attained age 55. This determination
shall be based on the definition of highly compensated employee under
Code section 414(q) and related regulations in effect for that
determination year.
(ii) The term "current Plan Year" shall mean the Plan Year for which the
determination is being made.
(iii) The term "preceding Plan Year" shall mean the Plan Year immediately
preceding the current Plan Year.
(iv) An Employee shall be considered a "5% Owner" for a Plan Year if at any
time during such Plan Year he was a 5-percent owner (as defined in
Code section 416(i)(1)) of the Company.
(v) The term "Highly Compensated Test Compensation" shall mean
compensation within the meaning of Code section 415(c)(3).
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<PAGE>
(vi) The term "ADP Testing Compensation" shall mean compensation within the
meaning of Code section 414(s)(1), except that the Administrative
Committee may elect not to include in such compensation any amount
which is contributed by the Employer pursuant to a salary reduction
agreement and which is not includable in gross income of the Employee
under Code section 125, 402(e)(3), 402(h), or 403(b).
4.7 Discrimination Limits on Matching Contributions, After-Tax
Contributions, and Adjustment Contributions. Prior to the beginning of each Plan
Year and at any other time during the Plan Year that the Administrative
Committee may deem appropriate, the following test shall be made to prevent
Employer matching contributions, After-Tax Contributions and Adjustment
Contributions under the Plan from becoming discriminatory.
In no event shall any Employer make matching contributions, After-Tax
Contributions and Adjustment Contributions for any Plan Year that would result
in the actual contribution percentage ("ACP") for the Plan Year of the group of
Highly Compensated Employees eligible to participate in the Plan exceeding the
greater of:
(A) For the Plan Year beginning May 1, 1999:
(i) One and one-quarter times the ACP for the current Plan Year of the
group of all other Eligible Employees; or
(ii) The lesser of (i) two times the ACP for the current Plan Year of the
group of all other Eligible Employees, or (ii) the ACP for the current
Plan Year of the group of all other Eligible Employees plus two
percentage points.
(B) For Plan Years beginning after December 31, 1999:
(i) One and one-quarter times the ACP for the preceding Plan Year of the
group of all other Eligible Employees; or
22
<PAGE>
(ii) The lesser of (i) two times the ACP for the preceding Plan Year of the
group of all other Eligible Employees, or (ii) the ACP for the
preceding Plan Year of the group of all other Eligible Employees plus
two percentage points.
For purposes of making these determinations, the term "Highly Compensated
Employee" shall have the same meaning as set forth in section 4.6. The "ACP" for
a specified group of Eligible Employees for any Plan Year is the average of the
ratios (calculated separately for each Eligible Employee in such group) of the
sum of Employer matching contributions, After-Tax Contributions and Adjustment
Contributions paid for each such Eligible Employee for such Plan Year to the ADP
Testing Compensation paid to the Eligible Employee for such Plan Year, provided,
however, that in accordance with Treasury regulations, the Administrative
Committee may elect to take into account, in computing average contribution
percentage, Pretax Deferrals or any elective deferrals and qualified nonelective
contributions under this Plan or any other plan maintained by the Company. The
term "ADP Testing Compensation" shall have the same meaning as set forth in
section 4.6. For the purpose of this section 4.7, the terms "elective deferrals"
and "qualified nonelective contributions" shall have the same meaning as in Code
section 401(m)(4).
4.8 Multiple Use Limitation. If, as a result of the testing described in
sections 4.6 and 4.7, each of the four conditions described in Treasury
Regulation section 1.401(m) - 2(b)(1) exist in spite of any reductions which may
be made pursuant to subsections 4.9(b) and 4.9(c), then the Administrative
Committee shall reduce the Pretax Deferrals elected by the Participants who are
Highly Compensated Employees in the manner described in subsections 4.9(a) or
4.9(b). The reduction shall be made as necessary to prevent any one of the four
conditions described above from occurring. For the purpose of this section 4.8,
the term "Highly Compensated Employee" shall have the meaning set forth in
section 4.6.
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4.9 Reductions to Pretax Deferrals and After-Tax Contributions.
(a) If it becomes necessary for the Administrative Committee to reduce the
Pretax Deferral of a Participant during the current Plan Year as a
result of (i) the operation of the last paragraph of section 4.5, (ii)
the Plan's expected failure to comply with the actual deferral
percentage test pursuant to section 4.6, or (iii) the Plan's expected
failure to comply with the multiple use limitation of section 4.8,
then the difference between the percentage elected by the Participant
and the percentage as reduced shall, absent a contrary instruction
from the Participant on his Pretax Deferral election form, be
contributed by the Participant as an Adjustment Contribution through
regular payroll deductions.
In the case of a Participant who is making a contribution under this
subsection, any election to increase, decrease, or discontinue Pretax
Deferrals under section 4.3 shall increase or decrease contributions
under this subsection first before changing Pretax Deferrals.
(b) To the extent necessary to conform to the limitations contained in
sections 4.6 and 4.8 after the close of the Plan Year, the
Administrative Committee shall reduce Pretax Deferrals made on behalf
of Highly Compensated Employees. Such reduction shall be effected by
reducing Pretax Deferrals made on behalf of Highly Compensated
Employees sequentially and in descending order, beginning with the
Highly Compensated Employee who elected the largest dollar amount of
such contributions, and continuing as needed to conform to such
limitations.
Any such reduction in the Pretax Deferrals made on behalf of any
Participant shall be refunded to the Participant as soon as
administratively possible, together with any earnings allocable to
such excess contributions for the Plan Year for which
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<PAGE>
the excess contributions were made and for the period between the end
of that Plan Year and the date of distribution, as provided in the
rules adopted by the Administrative Committee at the time. In no
event, however, shall such excess contributions or such earnings
allocable thereto be left undistributed any later than the last day of
the Plan Year following the Plan Year in which such excess
contributions were made.
(c) To the extent necessary to conform to the limitations contained in
section 4.7 after the close of the Plan Year, the Administrative
Committee shall reduce the After-Tax Contributions or Employer
matching contributions made on behalf of Highly Compensated Employees.
Such reduction shall be effected by reducing After Tax Contributions
or Employer matching contributions made on behalf of Highly
Compensated Employees sequentially and in descending order, beginning
with the Highly Compensated Employee who elected the largest dollar
amount of such contributions, and continuing as needed to conform to
such limitations.
Any such reduction in After-Tax Contributions, Adjustment
Contributions or vested Employer matching contributions made on behalf
of any Participant shall be refunded to the Participant as soon as
administratively possible, together with any earnings allocable to
such excess aggregate contributions for the Plan Year for which the
excess aggregate contributions were made and for the period between
the end of that Plan Year and the date of distribution, as provided in
the rules adopted by the Administrative Committee at the time. In no
event, however, shall such excess aggregate contributions or such
earnings allocable thereto be left undistributed any later than the
last day of the Plan Year following the Plan Year in which such excess
contributions were made.
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If there is a loss allocable to the excess aggregate contribution, the excess
aggregate contributions to be distributed to a Participant shall in no event be
less than the lesser of the Participant's Account under the Plan or the
Participant's After-Tax Contributions, Adjustment Contributions and Employer
matching contributions for the Plan Year. Excess aggregate contributions shall
be distributed from the Participant's Employee Account and Matching Account in
proportion to the Participant's After-Tax Contributions, Adjustment
Contributions and Employer matching contributions for the Plan Year.
For the purpose of this section 4.9, the term "Highly Compensated Employee"
shall have the meaning set forth in section 4.6.
4.10 Deposit of Pretax Deferrals, After-Tax Contributions and Adjustment
Contributions. The amount to be contributed to the Plan because of Participants'
elections under section 4.1 shall be paid out of the Employer's funds and shall
be deposited in the Trust Fund as soon as practicable after the payment date for
each payroll period. Adjustment Contributions shall be deposited in the Trust
Fund at the same time as contributions under section 4.1.
4.11 Crediting of Pretax Deferrals, After-Tax Contributions and Adjustment
Contributions. The amounts contributed to the Trust Fund under section 4.1 and
section 4.9 on behalf of a Participant shall be credited to the Pretax Deferral
Account and Employee Account, if applicable, of each such Participant as soon as
administratively possible.
4.12 Distribution of Excess Deferrals. Notwithstanding any other provision
of the Plan, excess deferral amounts and income allocable thereto shall be
distributed no later than April 15 to Participants who claim such allocable
excess deferral amounts for the preceding calendar year. For purposes of this
section 4.12, "excess deferral amount" shall mean the amount of Pretax Deferrals
for a calendar year that the Participant allocates to this Plan pursuant to the
claim procedure set forth below.
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The Participant's claim shall be in writing, shall be submitted to the
Administrative Committee no later than March 1, shall specify the Participant's
excess deferral amount for the preceding calendar year, and shall be accompanied
by the Participant's written statement that if such amounts are not distributed,
such excess deferral amount, when added to amounts deferred under other plans or
arrangements described in sections 401(k), 408(k), or 403(b) of the Code,
exceeds the limit imposed on the Participant by section 402(g) of the Code for
the year in which the deferral occurred.
The excess deferral amount distributed to a Participant with respect to a
calendar year shall be adjusted for income and, if there is a loss allocable to
the excess deferral, shall in no event be less than the lesser of the
Participant's Account or the Participant's Pretax Deferrals for the Plan Year.
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Article 5. Employer Matching Contributions
------------------------------------------
5.1 Employer Matching Contributions. Each Participant for whom a Pretax
Deferral, an After-Tax Contribution or an Adjustment Contribution was made
during a month shall be entitled to an additional allocation equal to 75 percent
of the contributions under section 4.1 and section 4.9 allocable to him for the
month, provided that the additional allocation cannot be based on more than 6
percent of Compensation.
Allocations to be made for any Participant for any Plan Year under this section
5.1 shall be limited to the extent necessary to prevent Annual Additions of the
Participant from exceeding the limits of section 5.5.
The Employer shall contribute an amount which, when added to forfeitures, is
sufficient to provide the required allocations.
5.2 Deposit of Employer Matching Contributions. To the extent not provided
from forfeitures in accordance with section 5.4, Employer matching contributions
shall be paid out of funds in the manner specified in section 4.10. Such
contributions shall be deposited and posted to the Trust Fund as soon as
practicable after the end of the payroll period for which they are made.
5.3 Crediting of Employer Matching Contributions. The allocations required
under section 5.1 shall be credited to the Matching Account of any Participant
who is entitled to such an allocation on the date on which the matched Pretax
Deferrals, After-Tax Contributions and Adjustment Contributions are credited.
5.4 Forfeitures. The Administrative Committee shall use forfeitures
occurring in any month to reduce Employer matching contributions for such month
and future months. Forfeitures shall be used to reduce matching contributions of
all Employers without regard to whether the forfeitures are attributable to
persons employed by any individual Employer. If the
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amount of forfeitures occurring in a month exceeds the amount of matching
allocations to be made for such month, then the excess shall be held in a
suspense account and allocated in lieu of Employer matching contributions in
succeeding months. No Employer matching contributions shall be made until any
balance in the suspense account is exhausted, and if the Plan terminates while
such a balance exists, the balance shall be allocated in proportion to the
Compensation of all Participants for the Plan Year to the extent of the maximum
amount permitted under section 5.5.
5.5 Limitation on Annual Additions. Notwithstanding anything to the
contrary contained in this Plan, the total Annual Additions under this Plan and
any other defined contribution plan, as defined in section 414(i) of the Code,
maintained by the Employer or any other Affiliate, to a Participant's Account
for any Plan Year, which shall be the limitation year for purposes of section
415 of the Code, shall not exceed the lesser of:
(a) $30,000, or such higher amount as may be permitted by the Secretary of
the Treasury pursuant to Code section 415(d), or
(b) 25 percent of the Participant's Taxable Compensation for the
limitation year.
5.6 "Annual Addition" Defined. For purposes of section 5.5, the term
"Annual Addition", with respect to any Participant for a Plan Year shall mean
the aggregate of:
(a) the amount of Employer contributions (including Pretax Deferrals) and
forfeitures allocated to the Participant's account under this Plan and
any other defined contribution plan, as defined in section 414(i) of
the Code, maintained by the Employer or any other Affiliate for the
Plan Year;
(b) the amount of a Participant's After-Tax Contributions made during such
Plan Year; and
(c) For the purpose of subsection (a) of section 5.5 only, the amount of
Employer contributions, if any, allocated to an account described in
Code section 419A(d)(1) or an account described in Code section
415(l)(2).
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<PAGE>
5.7 Other Defined Contribution Plans. If the Company or any
nonparticipating Affiliate maintains any other qualified defined contribution
plan for its Employees, some or all of whom are Participants of this Plan, then
any such Participant's Annual Additions (after reductions required under the
provisions of such other plan or plans) shall first be reduced under such other
plan and then shall be reduced under this Plan, if such reduction is required
for purposes of reducing allocations on a combined basis, to the limits of
section 5.5.
5.8 Defined Benefit Plans.
(a) If a Participant in this Plan was also a Participant in a defined
benefit plan, as defined in section 414(j) of the Code, to which
contributions were made by the Employer or any other Affiliate, then
in addition to the limitations contained in section 5.5 of this Plan,
the allocations of the Participant under this Plan shall be limited to
the extent necessary to comply with the limitation set forth in
section 415(e) of the Code. For this purpose, the Defined Benefit
Fraction shall be computed and the Defined Contribution Fraction shall
be adjusted (as provided in section 5.7) so that the sum of these
fractions shall not exceed 1.0.
(b) For purposes of this section 5.8, the following definitions shall
apply:
(i) "Defined Benefit Fraction" shall mean a fraction, the numerator
of which is the aggregate of the projected annual benefits
(determined as of the last day of the Plan Year) of the
Participant under all defined benefit plans (whether or not
terminated) maintained by the Employer or any other Affiliate,
and the denominator of which is the lesser of (x) the product of
1.25 multiplied by the dollar limitation in effect under section
415(b)(1)(A) of the Code for such year, or (y) the product of 1.4
multiplied by the amount which may be taken into account under
section 415(b)(1)(B) of the Code with respect to the Participant
under all such defined benefit plans for such year.
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(ii) "Defined Contribution Fraction" shall mean a fraction, the
numerator of which is the sum of the Annual Additions to the
Participant's Account under this Plan and any other defined
contribution plan as defined in section 414(i) of the Code
maintained by the Employer or any other Affiliate for such Plan
Year, and all prior Plan Years, and the denominator of which is
the sum, for such Plan Year and each prior year of Service with
the Employer or any other Affiliate, of the lesser of (x) the
product of 1.25 multiplied by the dollar limitation in effect
under section 415(c)(1)(A) of the Code for such year (determined
without regard to section 415(c)(6) of the Code), or (y) the
product of 1.4 multiplied by the amount which may be taken into
account under section 415(c)(1)(B) of the Code with respect to
the Participant under all such defined contribution plans for
such year.
5.9 Deductibility Limitation. The dollar amount of Company contributions,
as provided under sections 4.1 and 5.1, shall be limited to the amount
deductible under section 404 of the Code for the taxable year for which such
contributions are paid.
5.10 Adjustment of Allocations. Allocations to the Accounts of a
Participant in excess of the limit of section 5.5 cannot occur because of
limitations on allocations set forth in sections 4.5, 5.1 and 5.4. However, if
an allocation to the Account of a Participant would exceed the limit of section
5.5 due to a reasonable mistake in estimating a Participant's Compensation, then
any amount which cannot be allocated shall be held in a suspense account and
shall be allocated to the account of such Participant in the next following Plan
Year, to the maximum extent permitted under section 5.5.
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<PAGE>
Article 6. Vesting and Benefits
-------------------------------
6.1 Vesting. The right of a Participant to his Pretax Deferral Account, his
Employee Account, and his Rollover Account shall be fully vested at all times.
The right of a Participant to his Matching Account shall fully vest in him or
his Beneficiary:
(a) upon any of the following events, while actively employed by the
Company or an Affiliate:
(i) his attainment of age 65;
(ii) his death;
(iii) his Disability; or
(iv) termination of the Plan, or
(b) if the obligation to make contributions under this Plan is terminated,
or if any event occurs which constitutes a partial termination of the
Plan with respect to the Participant.
Notwithstanding the above, an Employee who becomes an Eligible Employee on the
Effective Date shall at all times be fully vested in his Matching Account.
The provisions of this section 6.1 notwithstanding, each Participant shall vest
in his Matching Account in increments based on his completed years of Service
pursuant to the following table:
Years of Service Percentage Vested
---------------- -----------------
Less than 1 0
1 20
2 40
3 60
4 80
5 or more 100
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<PAGE>
Being vested does not mean that a Participant is entitled to immediate receipt
of his benefit. Benefits under the Plan shall be paid only in accordance with
this Article 6.
Notwithstanding the foregoing provisions of this section 6.1, each Participant
who is eligible to participate in the Oxy Vinyls, LP Notice and Severance Pay
Plan (the "Severance Plan") shall be fully vested in his Savings Account as of
the time of cessation of his receipt of benefits under the Severance Plan. Such
full vesting will occur irrespective of whether such Participant ever receives a
benefit under the Severance Plan.
6.2 Benefits Upon Separation from Service. Every Participant who Separates
from Service for any reason other than death shall have the vested portion of
his Savings Account, valued as provided in Article 9, distributed to him as soon
as practicable after receipt by the Administrative Committee of a request for
distribution filed by the Participant. A request for distribution may be filed
only after the Participant's Separation from Service. If a Participant is a 5%
owner, distribution shall be made or commenced by the Administrative Committee
by December 31 of the calendar year of such attainment irrespective of whether
the Participant has filed a request and irrespective of whether he Separates
from Service. If a Participant who is not a 5% owner attains age 70 1/2,
distribution shall be made or commenced by the Administrative Committee by
December 31 of the calendar year that the Participant Separates from Service.
Every Participant, spousal Beneficiary, or Alternate Payee who receives a
distribution which is an eligible rollover distribution (as defined in Code
section 402(c)(4)) shall be entitled to direct the Administrative Committee to
transfer all or part of the taxable portion of his distribution to any eligible
retirement plan (as defined in Code section 402(c)(8)(B)) which provides for the
receipt of such direct transfers. The Administrative Committee shall, within a
reasonable period of time before making an eligible rollover distribution,
provide to the recipient a copy of the written explanation required by Code
section 402(f).
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<PAGE>
6.3 Forfeiture of Contingent Interests. Any portion of a Participant's
Savings Account that is not vested in him under the provisions of section 6.1
upon his Separation from Service shall be forfeited. If the Participant is
rehired, then the cash value (determined at the time of forfeiture) of the
amount forfeited will be restored upon rehire, and such amount may be restored
to his Savings Account by making a special allocation out of forfeitures. Upon
restoration, his Account will be credited by the amount of the forfeiture. The
Participant's vested portion in this amount, at the time of the restoration,
shall be the Participant's vested percentage in his Matching Account, as
determined under section 6.1, multiplied by the amount of the restoration.
6.4 Death Benefits. Should a Participant die while he is still employed by
the Company or an Affiliate, or after a Separation from Service but prior to
distribution of his Savings Account, the balance of said deceased Participant's
Savings Account, valued as provided in Article 9, shall be distributed to his
Beneficiary as soon as practicable after the Participant's death. Distribution
of the deceased Participant's Savings Account shall be in the form of an
immediate annuity for the life of the Beneficiary with monthly payments as
provided in subsection 6.5(c), in an immediate lump sum payment, or in an
immediate 10-year term certain and continuous annuity with monthly payments as
provided in subsection 6.5(e), as the Beneficiary may elect prior to the receipt
of a benefit on a form filed with the Administrative Committee, provided that if
the Participant has designated more than one Beneficiary, distribution shall be
made in the form of a lump sum, with payment to be made to all Beneficiaries
concurrently as soon as possible after death. Additionally, a Beneficiary who is
the Participant's spouse may elect, prior to receipt of a benefit, on a form
filed in accordance with procedures established by the Administrative Committee,
to defer receipt of payment of the deceased Participant's Savings Account, but
not beyond December 31 of the year which includes the date the Participant would
have attained age 70 1/2, or to take a partial cash distribution as provided in
subsection 6.5(b). In the absence of an election otherwise, the benefit shall be
paid to the Beneficiary in an immediate lump sum. Notwithstanding the above, in
the case of a
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<PAGE>
Beneficiary which is a trust or an estate, distribution shall be made in an
immediate lump sum payment.
Should an Alternate Payee or the Beneficiary of a deceased Participant or
Alternate Payee die prior to distribution of a separate Account established on
his behalf, the balance of said deceased individual's Account, valued as
provided in Article 9, shall be distributed to his Beneficiary as soon as
practicable after his death. Such distribution shall be made in the form of a
lump sum payment.
6.5 Forms of Payment. Every Participant who Separates from Service for any
reason other than death shall have the vested portion of his Savings Account
distributed to him under one of the following distribution options selected by
the Participant on a form prescribed by the Administrative Committee:
(a) One lump sum payment; or
(b) A partial cash distribution in a specified dollar amount, provided
that a Participant may request a partial cash distribution only once
in any six month period; or
(c) An immediate straight life annuity providing monthly payments for the
life of the Participant. No monthly payments will be made after the
Participant's death; or
(d) An immediate joint and survivor annuity providing monthly payments for
the Participant's lifetime. Upon the Participant's death, 50, 75, or
100 percent of the monthly payment, whichever is elected by the
Participant, will continue for the lifetime of the Beneficiary if the
Beneficiary survives the Participant; or
(e) An immediate 10-year term certain annuity which provides monthly
payments for the life of the Participant with a guarantee that a
minimum of 120 such payments will be made even if the Participant dies
before receiving all of them. The Participant's Beneficiary will
receive the remaining payments; or
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<PAGE>
(f) Total deferral of receipt of payment of the vested portion of his
Savings Account, but not beyond December 31 of the calendar year of
the Participant's attainment of age 70 1/2, provided that a
Participant who elects a deferral of payment under this subsection (f)
may not request a partial cash distribution under subsection (b)
subsequent to his attainment of age 70 1/2.
The Company does not guarantee the benefits described in subsections (c), (d),
and (e) above. In the event of the failure of the issuer of an annuity to comply
with its obligations under an annuity contract purchased by the Plan, the
Participant's, Beneficiary's, or Alternate Payee's remedy will be limited to his
claim against the issuer.
The failure of a Participant to make a selection as described above upon his
Separation from Service will be deemed to be an election by the Participant to
defer the commencement of his benefits.
A Participant who elects to receive a partial cash distribution pursuant to
subsection (b) may not make a subsequent request for a lump sum payment pursuant
to subsection (a) or an immediate annuity pursuant to subsection (c), (d), or
(e) for a period of one month beginning with the date of the processing of his
partial cash distribution.
If distribution is to be made in the form of an immediate annuity, then the
balance of the Participant's Savings Account shall be used to purchase an
immediate non-transferable commercial annuity contract which shall be
distributed to the Participant.
The automatic distribution option to a Participant shall be a lump sum payment.
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<PAGE>
In the case of a Participant who elects to receive a benefit pursuant to
subsection (d) or subsection (e) above, the present value of the payments to be
made to the Participant must be more than 50 percent of the present value of the
total payments to be made to the Participant and his Beneficiary.
An election form shall be provided to the Participant in non-technical language
and shall contain (i) a general description of the distribution options and the
relative financial effect of each option, and (ii) notification that such
Participant may subsequently request to receive an additional written
explanation in non-technical language, of the terms, conditions and projected
financial impact of one or more of the distribution options (in terms of dollars
per projected monthly annuity payment).
Any election by a married Participant to receive his benefits in the form of an
annuity other than an immediate 50 percent, 75 percent or 100 percent joint and
survivor annuity with his spouse as joint annuitant must be accompanied by a
signed, notarized written consent from the spouse on a form prescribed by the
Administrative Committee, which consent shall state that potential effect to
such spouse of consenting to such an election. Such consent must designate a
Beneficiary (or form of benefits) which may not be changed without spousal
consent, provided that the consent of the spouse may expressly permit
designations by the Participant without any requirement for further consent by
the spouse. Any election of a form of distribution under this section must be
filed in accordance with procedures established by the Administrative Committee
during an election period of not more than 90 days and, except as provided
below, not less than 30 days ending on the day prior to the date as of which his
benefits are scheduled to commence; provided, however, that if the Participant
makes a timely request to receive additional information, as described above,
the election period shall not end prior to 30 days following the furnishing of
such information. A Participant may revoke an election of any benefit form
described in this section and choose again to take any form of benefit available
to him hereunder
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<PAGE>
at any time and any number of times within the above election period.
Notwithstanding the previous two sentences, a Participant, after having received
the written description described in this section, may reject the automatic
election described in this section and elect a different option, in the manner
described above, even though the written description was provided less than 30
days prior to his benefit commencement date, so long as the conditions contained
in Treasury Regulation section 1.417(e)-1T(b)(3)(ii) have been met. If the
Participant makes an untimely request for additional information, the
Administrative Committee, at its discretion, may grant such request, but the
granting of such request shall not result in the extension of the election
period.
In the case of an Alternate Payee who becomes entitled to receive his Account
pursuant to an appropriate domestic relations order, where the order so permits,
or where the order is silent as to the form of payment to be made, his Account
shall be distributed to him in the form of a lump sum payment pursuant to option
(a) above, or in the form of a lump sum payment following a deferral pursuant to
option (f) above, as the Alternate Payee may select on a form to be prescribed
by the Administrative Committee. In the absence of such a selection by an
Alternate Payee, his Account will be distributed to him in the form of a lump
sum payment pursuant to option (a) above. Where an order so permits, an
Alternate Payee's Account may be distributed to him in the form of an immediate
straight life annuity providing monthly payments for the life of the Alternate
Payee, a partial cash distribution as described under option (b) above, an
immediate 50 percent, 75 percent or 100 percent joint and survivor annuity, or
an immediate 10-year term certain annuity which provides monthly payments for
the life of the Alternate Payee with a guarantee that a minimum of 120 such
payments will be made even if the Alternate Payee dies before receiving all of
them; in that event the Alternate Payee's Beneficiary will receive the remaining
payments.
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<PAGE>
In the case of a Participant, Beneficiary or Alternate Payee receiving a
distribution in the form of one lump sum payment pursuant to option (a) above,
the value of his vested interest attributable to investments other than Stock
shall be paid in cash when distributed, and the vested interest that is
attributable to Account balances consisting of Stock shall be distributed in
full shares of Stock plus cash representing the value of any fractional share.
However, by written notice to the Administrative Committee, the Participant,
Beneficiary or Alternate Payee may elect to receive cash in such amount as may
be provided by the value (as determined under Article 9) of the Stock that would
otherwise be distributed to him.
6.6 Time of Payment of Benefits. Distribution of benefits to a Participant
who Separates from Service shall begin not later than the 60th day after the
close of the Plan Year in which occurs the later of (i) the Participant's
Separation from Service, or (ii) the Participant's 65th birthday, unless the
Participant chooses a later payment under section 6.2. If for any reason the
amount which is required to be paid cannot be ascertained on the date payment
would be due hereunder, payment or payments shall be made not later than 60 days
after the earliest date on which the amount of such payment is ascertained.
In the case of an Alternate Payee who is entitled to receive benefits under this
Plan, distribution of benefits may be made at any time that the governing order
may permit, irrespective of the Participant's age and irrespective of whether
the Participant has Separated from Service, so long as either the amount to be
distributed to the Alternate Payee does not exceed $5,000 or the Alternate Payee
consents in writing to the distribution.
6.7 Withdrawals. Any Participant or Inactive Participant who is actively
employed by the Company or an Affiliate may withdraw any amount, up to 100
percent of the sum of (i) such Participant's Employee Account, (ii) his Matching
Account if the Participant is fully vested in such Account, and (iii) his
Rollover Account, if any, to the extent permissible, provided that no withdrawal
request may be processed more often than once in any six-month period beginning
with the date the Participant's or Inactive Participant's most recent withdrawal
request was
39
<PAGE>
processed. Any Participant or Inactive Participant who has attained age 59 1/2
may also withdraw any amount in his Pretax Deferral Account under this section.
A Participant or an Inactive Participant shall be prohibited from requesting a
withdrawal in any semimonthly processing period in which a loan distribution is
being processed.
Application for a withdrawal shall be made on such forms as the Administrative
Committee prescribes and shall be effective as of the end of the semimonthly
processing period in which such application is received by the Administrative
Committee. The Administrative Committee shall direct the Trustee, in such cases,
to pay the Participant or Inactive Participant the amount so requested in a
single sum.
Every Participant who receives a withdrawal which is an eligible rollover
distribution (as defined in Code section 402(c)(4)) shall be entitled to direct
the Administrative Committee to transfer all or part of the taxable portion of
his withdrawal to any eligible retirement plan (as defined in Code section
402(c)(8)(B)) which provides for the receipt of such direct transfers. The
Administrative Committee shall, within a reasonable period of time before making
an eligible rollover distribution, provide to the recipient a copy of the
written explanation required by Code section 402(f).
A withdrawal from a Participant's Account balances invested in Stock shall be in
the form of full shares of Stock and cash representing any fractional share,
except that cash shall be paid in lieu of full shares of Stock if the
Participant specified in his written request for withdrawal that the withdrawal
be in the form of cash. A withdrawal from account balances invested in assets
other than Stock shall be paid in cash. A withdrawal consisting of pre-1987
contributions from the Employee Account only shall be in the form of cash.
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<PAGE>
Withdrawals shall be paid first out of the net cumulative pre-1987 contributions
from the Employee Account. Withdrawals shall then be paid out of the net
cumulative post-1986 contributions, together with earnings thereon, on a prorata
basis, from the Employee Account. Additional amounts shall be withdrawn, if
needed, from earnings on pre-1987 contributions from the Employee Account, then
from the Rollover Account, if any, to the extent permissible, then from the
Pretax Deferral Account if permissible, and then from the Matching Account. If a
Participant withdraws any amount from the Matching Account, the Participant
(other than a Participant who has attained age 59 1/2 at the time the withdrawal
is requested, and who withdraws the entire balance in his Savings Account) shall
not be permitted to make any Pretax Deferrals, After-Tax Contributions or
Adjustment Contributions, or receive Company Matching Contributions for a period
of six calendar months after the withdrawal is processed. The preceding sentence
shall be inapplicable in the case of a withdrawal effected by a creditor of a
Participant pursuant to any insolvency proceeding initiated under federal or
state law or pursuant to any tax levy.
6.8 Debiting of Investment Funds. If a Participant making less than a total
withdrawal of his Accounts under section 6.7, or receiving a distribution of
excess deferral amounts under section 4.12, has his Accounts invested in more
than one Investment Fund, the amount withdrawn from his Accounts shall be
withdrawn from such Investment Fund or combination of Investment Funds in which
the Employee has invested on a prorata basis.
If a Participant receives a partial cash distribution under section 6.5(b), the
amount distributed from his Accounts shall be withdrawn from his Investment
Funds on a pro-rata basis within each such Account as follows: first, his
Employee Account, then his Rollover Account, then his Pretax Deferral Account,
and then his Matching Account.
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6.9 Small Amounts. If the vested balance of a Participant's Savings Account
is $5,000 or less when he or his Beneficiary becomes entitled to a benefit under
sections 6.4 or 6.5, then distribution shall be made in the form of a lump sum
payment, partial cash distribution, or a deferral as described in sections
6.5(a), 6.5(b), and 6.5(f), respectively.
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Article 7. Participant Loans
----------------------------
7.1 Eligibility. An Employee who is an Eligible Employee or an Inactive
Participant may borrow from the Plan in accordance with the terms and conditions
of this Article 7.
An Employee may have only one loan outstanding at any time. An Employee shall be
prohibited from applying for a loan in any semimonthly processing period in
which an in-service withdrawal (including a withdrawal effected by a creditor of
a Participant pursuant to any insolvency proceeding initiated under federal or
state law or pursuant to any tax levy) is being processed.
7.2 Loan Amount. An eligible Employee shall be able to borrow an amount of
at least $1,000, in increments of $100, as long as the amount of the loan does
not exceed the lesser of
(a) fifty percent (50%) of the Employee's vested Savings Account value, or
(b) fifty thousand dollars ($50,000), reduced by the highest outstanding
balance of loans to the Employee during the one year period ending on the
day before the date on which such loan was made.
If the Employee is also covered under another qualified plan maintained by the
Company or an Affiliate, the limitation of clause (b), above, shall be applied
as though all such qualified plans with loan provisions are one plan.
The initial amount of the loan shall be limited so that repayments of principal
and interest will not exceed twenty-five percent (25%) of base compensation.
7.3 Loan Terms. The period of repayment for any loan shall be arrived at by
mutual agreement between the Administrative Committee and the Employee;
provided, however, that the period of repayment must be in full-year increments
and shall not extend beyond the earlier
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of five years (ten years in the case of a loan meeting the requirements of Code
section 72(p)(2)(B)(ii)) or the Employee's Separation from Service.
All loans shall bear an interest rate which shall be stated by the
Administrative Committee and shall be based on the rate being charged by Western
Federal Credit Union for loans secured by the borrower's deposit account during
the calendar month prior to the calendar month in which the loan is requested.
Such interest rate shall remain in effect for the entire loan term.
All loans shall include repayment provisions requiring equal periodic payments
no less than quarterly over the term of the loan.
7.4 Source of Loan Funds and Valuation. The funds needed to provide the
principal amount of the loan shall come from liquidation of Investment Funds.
The amounts held in the Employee's Pretax Deferral Account, Rollover Account,
and then Employee Account shall be liquidated from such Investment Fund or
combination of Investment Funds in which the Employee has invested on a prorata
basis.
If all the funds in the Employee's Pretax Deferral Account, Rollover Account,
and Employee Account have been exhausted, and if additional funds are needed to
provide the principal amount of the loan, the vested portion of his Matching
Account shall be liquidated to provide additional loan funds.
Account balances liquidated from all Investment Funds will be valued at the
closing value for the Accounting Date in which the loan is processed.
7.5 Loan Account. The Administrative Committee shall establish a loan
account for the Employee, and shall credit the account with an amount equal to
the principal amount of the loan granted. Each repayment of the principal on the
loan received by the Trustee from the Employee shall reduce the balance credited
to the loan account.
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7.6 Repayments. Repayments of the loan principal and interest will be made
through regular payroll deductions. The Employee will be required to complete a
payroll deduction authorization form for the amount of the repayments, which
shall be irrevocable throughout the term of the loan. Employees who are paid
monthly, bi-weekly/semi-monthly, and weekly will have twelve, twenty-four and
forty-eight periodic payroll deductions, respectively, for each year of the term
of the loan.
Irrespective of whether an Employee is currently contributing to the Plan,
periodic loan repayments shall first be credited to the Employee's Matching
Account, until all amounts which were liquidated for the loan principal amount
from that Account, if any, have been repaid. If an Employee is currently
contributing to the Plan, repayments shall then be credited to the Employee
Account loan balance, if any, then the Rollover Account loan balance, if any,
and then the Pretax Deferral Account loan balance, if any, in the same
proportions within each such Account as the Employee's current contributions are
being invested in the Investment Funds, until all amounts which were liquidated
for the loan principal amount from those Accounts have been repaid. If an
Employee is not currently contributing to the Plan, repayments shall then be
credited to the Employee Account loan balance, if any, then the Rollover Account
loan balance, if any, and then the Pretax Deferral Account loan balance, if any,
in the same proportions within each such Account as the latest investment
election on file for the Employee, until all amounts which were liquidated for
the loan principal amount from those Accounts have been repaid. If no investment
election is on file, all repayments to the Employee Account loan balance, if
any, Rollover Account loan balance, if any, and Pretax Deferral Account loan
balance, if any, will be made to the Stable Value Fund, until all amounts which
were liquidated for the loan principal amount from those Accounts have been
repaid. Any accrued interest on the loan balances in the various Accounts will
be credited to the Account to which the related principal repayment is credited.
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If an Employee's total compensation will not equal the amount of the required
loan repayment for a period not to exceed three months, loan repayment payroll
deductions shall be suspended. When the Employee's total compensation once again
equals or exceeds the required loan repayment, payroll deductions shall be
reactivated in the first payroll period coincident with or next following the
increase of total compensation. When the repayments are reactivated, if the
number of payroll periods remaining are not sufficient to cover the outstanding
loan balance at the end of the maximum loan term, the loan payment shall be
reamortized or otherwise adjusted.
The Employee may make a prepayment of the entire outstanding principal loan
balance at any time after the end of the month in which the loan application is
processed, provided that this limitation shall be inapplicable to an Employee
who has Separated from Service. Any prepayments shall be credited first to the
Matching Account until all amounts which were liquidated for the loan principal
amount, if any, from that Account have been repaid. Any remaining prepayments
shall then be credited to the remaining Employee Account loan balance, if any,
then the remaining Rollover Account loan balance, if any, and then the remaining
Pretax Deferral Account loan balance, if any, in the same proportions within
each such Account as the Employee's current contributions are being invested in
the Funds, until all amounts which were liquidated for the loan principal amount
from those Accounts have been repaid. If the Employee is not currently
contributing to the Plan, all prepayments will then be credited to the Employee
Account loan balance, if any, then the Rollover Account loan balance, if any,
and then the remaining Pretax Deferral Account loan balance, if any, in the same
proportions within each such Account as the latest investment election on file
for the Employee, until all amounts which were liquidated for the loan principal
amount from those Accounts have been repaid. If no investment election is on
file, all prepayments will then be credited to the outstanding loan balances of
the Employee Account, if any, then the Rollover Account, if any, and then the
remaining Pretax Deferral Account, if any, and in each such Account to the
Stable Value Fund. Any accrued interest on the loan balances in the various
Accounts will be credited to the Account to which the
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related principal payment is credited. Notwithstanding the loan prepayment
provisions described above, an Employee whose outstanding loan balance is
considered delinquent as described in section 7.9 shall be prohibited from
making a prepayment of his outstanding principal loan balance.
7.7 Leave of Absence. An Employee who is on an approved, unpaid leave of
absence for a period not to exceed three months, shall have his repayment
payroll deduction suspended for the duration of the leave. When the Employee
returns to pay status, the payroll deductions will be reactivated, as described
in the third paragraph of section 7.6, and payments retroactive to the date of
commencement of the leave of absence will be required.
An Employee who is on an approved, unpaid leave of absence for a period greater
than three months, but not to exceed twelve months shall have his loan
reamortized (for a period not exceeding five years from the original loan date)
or otherwise adjusted when he returns to pay status. The payroll deductions
shall be increased upon the reamortization, and the Employee shall be required
to complete a new payroll deduction authorization form for the new amount.
When an Employee incurs a Separation from Service pursuant to section 2.1(cc),
any outstanding loan balance is treated pursuant to the terms of section 7.8.
7.8 Separation from Service. When an Employee incurs a Separation from
Service, the outstanding loan balance shall be due and payable as of the last
day of the month in which the Separation from Service occurs. If the loan has
not exceeded the maximum loan term, the Employee or the Employee's Beneficiary
will have a period of two months from the last day of the month in which the
Separation from Service occurred, in which to repay the outstanding loan balance
in full. If the Employee or the Employee's Beneficiary does not pay the
outstanding loan balance in full within the two-month period, or the maximum
loan term has been exceeded, any outstanding loan balance shall be treated as a
distribution.
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7.9 Delinquent Payments. A loan shall be considered delinquent if
(a) the Employee, not covered pursuant to the third paragraph of section
7.6, sections 7.7 or 7.8, fails to make a regularly scheduled
repayment,
(b) the Employee's total compensation is insufficient to make the
authorized loan repayment payroll deduction for a period exceeding
three months, while he is in active pay status,
(c) the authorized loan repayment payroll deductions are reduced or
suspended for any reason, or
(d) the Employee is declared bankrupt, and unable to make subsequent
repayments.
When an Employee's loan is considered delinquent, the outstanding principal loan
balance shall be processed as a deemed distribution, within the meaning of
proposed Treasury Regulation section 1.72(p)-1, following written notification
to the Employee. The deemed distribution shall be immediately taxable to the
Employee except to the extent that the deemed distribution represents a
nontaxable return of After-Tax Contributions from his Employee Account.
The taxable portion of the deemed distribution shall remain outstanding under
the Employee's Savings Account until the Employee incurs a Separation from
Service or, if earlier, the Employee becomes Disabled or dies. This amount shall
be treated as a nontaxable distribution when the Employee's Savings Account is
otherwise distributed.
The principal loan balance that was processed as a deemed distribution may not
subsequently be repaid to the Plan.
7.10 Discontinuance. The foregoing sections of this Article 7
notwithstanding, the Administrative Committee reserves the right to stop
granting loans to Employees at any time.
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Article 8. Investment Elections
-------------------------------
8.1 Investment of Contributions. All Pretax Deferrals, After-Tax
Contributions, Adjustment Contributions, rollovers, and loan repayments (both
principal and interest) made by and on behalf of a Participant each Plan Year
shall be invested as the Participant shall designate in any of the various
Investment Funds in increments of 5 percent of the aggregate amount of such
contributions. All Matching Contributions allocated to the Account of a
Participant shall be invested in the OPC Stock Fund. Each Participant may make
the designation described above by making an election in accordance with
procedures established by the Administrative Committee upon becoming a
Participant, and may change such election at any time thereafter by making
another election in accordance with procedures established by the Administrative
Committee. In the event that a Participant fails to designate the Investment
Fund in which his Pretax Deferrals, After-Tax Contributions, Adjustment
Contributions, or rollover contributions are to be invested, such amounts shall
be invested in the Stable Value Fund. Any such election made upon initial
enrollment or upon a resumption or change in the amount of Pretax Deferrals,
After-Tax Contributions and Adjustment Contributions shall take effect as of the
first Accounting Date after the date of receipt thereof by the Administrative
Committee. Elections hereunder may be made as of any Accounting Date.
In the case of those Employees who became Participants on the Effective Date and
who, on the day prior to the Effective Date, were active participants in the
Occidental Petroleum Corporation Savings Plan (the "OPC Savings Plan"), all
Pretax Deferrals, After-Tax Contributions, Adjustment Contributions, rollovers,
and loan repayments (both principal and interest) made by and on behalf of each
such Participant shall be invested (in the absence of a designation made by such
Participant pursuant to the previous paragraph subsequent to the Effective Date)
in the Investment Fund or Funds in this Plan, and in the same percentages, that
correspond by name to the investment funds in the OPC Savings Plan in which each
such Participant was investing on
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the day prior to the Effective Date, provided that amounts that were being
invested by each such Participant prior to the Effective Date in the "Small Cap
Stock Fund" and the "Large Cap Value Fund", as those terms are defined in the
OPC Savings Plan, shall (in the absence of a designation made by such
Participant pursuant to the previous paragraph subsequent to the Effective Date)
be invested as of the Effective Date in the Standard & Poor's 500 Index Fund in
the Plan.
8.2 Transfers of Existing Balances. Participants, Inactive Participants and
Alternate Payees may elect to transfer, in accordance with procedures
established by the Administrative Committee, amounts allocated to their accounts
as described herein.
Each Participant, Inactive Participant, and Alternate Payee may elect on any
Accounting Date to transfer amounts allocated to his Pretax Deferral Account,
Employee Account, and Rollover Account from any of the various Investment Funds
to the Pretax Deferral Account, Employee Account, or Rollover Account within one
or more of the same Funds, in increments of 5 percent of the amount being
transferred.
Each election made pursuant to this section 8.2 shall be effective as of the
first Accounting Date after the date in which notice thereof is received by the
Administrative Committee.
Any transfer made pursuant to this section 8.2 does not affect the investment of
future employee contributions, which will be invested according to the last
election filed pursuant to section 8.1.
Nothing contained in this section 8.2 shall be construed as preventing a
Participant or Inactive Participant from having amounts allocated to his Pretax
Deferral Account, Employee Account, Matching Account, or Rollover Account in any
Investment Fund transferred to one or more other Investment Funds for the
purpose of facilitating an asset transfer to the trustee of a qualified
retirement plan sponsored by a purchaser or the subsidiary of a purchaser as a
result of a transaction involving the sale by the Company or an Affiliate of
either all or substantially all of
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the outstanding common stock of an Affiliate or all or substantially all of the
assets of a production facility, under circumstances where the Participant or
Inactive Participant is employed by the Affiliate or at the production facility
that is the subject of the sale.
8.3 Transfer of Assets. In the case of transfers of existing Account
balances under section 8.2, the Administrative Committee shall direct the
Trustee to transfer moneys or other property as soon as is practical after the
end of each Accounting Date from the appropriate Investment Fund to the other
Investment Fund in order to carry out the aggregate transfer transactions after
the Administrative Committee has caused the necessary entries to be made in the
Participants' Accounts in the Investment Funds and has reconciled offsetting
transfer elections, in accordance with uniform rules therefor established by the
Administrative Committee.
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Article 9. Participant Accounts and Records of the Plan
-------------------------------------------------------
9.1 Accounts and Records. The Participant's Pretax Deferral Account,
Matching Account, Employee Account, and Rollover Account shall be assigned a
subaccount for each Investment Fund in which the Account is invested. Each such
subaccount shall be maintained and valued separately from all other subaccounts.
The Administrative Committee shall maintain records relative to a Participant's
Accounts so that there may be determined as of any Accounting Date the current
value of his Accounts in the Trust Fund. For the purpose of this Article 9,
references to Savings Accounts of Participants shall also, where appropriate,
refer to Savings Accounts of Beneficiaries and Alternate Payees.
Each Participant shall be advised from time to time, at least once each Plan
Year, as to the value of his Savings Account and the portions thereof
attributable to his Employee Account, Matching Account and the sum of his
Employee Account, Pretax Deferral Account, and Rollover Account and to his
various Investment Funds..
9.2 Account Value. As of any given date for which determination of the
value of a Participant's Account is required, such value shall equal the sum of
the value of his Pretax Deferral Account, Employee Account, Matching Account,
and Rollover Account as of the preceding Accounting Date plus any additional
contributions withheld or paid and less the amount of any withdrawals from such
Account after the Accounting Date and prior to the date of determination.
9.3 Investment Funds. The Trust Fund shall consist of the Investment Funds,
and each Participant who has any interest in an Investment Fund shall have an
undivided proportionate interest. The Administrative Committee shall have the
right to determine the number of Investment Funds to be maintained by the Plan,
and to increase or decrease that number from time to time as it deems
appropriate. The Investment Committee shall establish additional Investment
Funds or eliminate existing Investment Funds as directed by the
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Administrative Committee. In so doing, the Investment Committee shall implement
and carry out investment objectives and policies which it shall establish and
maintain.
9.4 Unit Value of Investment Funds. As of each Accounting Date following
May 1, 1999, the Trustee shall determine the fair market value of the assets of
each Investment Fund, and shall notify the Administrative Committee of the value
so determined. Assets for which there is a readily ascertainable market shall be
valued by the Trustee at their fair market value, determined by the last known
public sale on the Accounting Date as of which the market value is determined.
In the absence of a sale on the Accounting Date, the fair market value of such
assets, as well as other assets for which there is no readily ascertainable fair
market value, shall be determined by the Trustee in such consistent manner as
the Trustees shall consider appropriate.
9.5 Calculation of Unit Value. The Trustee shall divide the aggregate value
of the assets of each Investment Fund, as so determined, by the total number of
outstanding Units in such Investment Fund on the Accounting Date. The result
obtained shall be the new value of each Unit, or "Unit value," as of the
Accounting Date. The Unit value for all Investment Funds on the first Accounting
Date in 1999 shall be the unit value for the equivalent investment funds in the
Occidental Petroleum Corporation Savings Plan.
9.6 Valuation Adjustments. As of each Accounting Date, after the Units in
each Investment Fund have been revalued, the Administrative Committee shall
adjust the balances in the Accounts of Participants in the respective Investment
Funds of the Trust Fund, upward or downward, in proportion to the Account
balance of each such Participant in the Investment Fund as of the previous
Accounting Date. As a result, the sum of such Account balances will equal the
net value of each Investment Fund of the Trust Fund as of that Accounting Date.
The subaccounts of Participants shall then, when appropriate, be credited with
additional Units by dividing the dollar amount of new contributions, loan
repayments, and dividends paid with respect to Stock to be allocated to each
subaccount on that Accounting Date by the newly calculated value of a Unit in
the Investment Fund.
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9.7 Debiting of Accounts upon Distribution, Withdrawal, Loan or Charge. Any
Units distributed or withdrawn from a Participant's Account (including any Units
debited as a result of a charge imposed pursuant to section 10.1) shall be
charged to the respective subaccounts in each Investment Fund as of the date the
benefit or charge is payable. The amount distributable or chargeable to the
Participant shall be equal to the number of Units distributed or charged from
the Account multiplied by the Unit value determined as of the Accounting Date
immediately preceding the date as of which the distribution or charge is
payable.
9.8 Unit Value upon Transfer of Investment Funds. Participants electing to
transfer from one Investment Fund to another under section 8.2 shall, as of the
Accounting Date of the transfer, have their Accounts in the Investment Fund from
which the transfer is made charged and their Accounts in the Investment Fund to
which the transfer is made credited, based upon the applicable Investment Fund
Unit values in effect as of the Accounting Date.
9.9 Loan Accounts. The value of a Participant's Loan Account shall at all
times equal the amount of principal outstanding on his loan.
9.10 OPC Stock Fund Valuation. The balance of each Participant's Matching
Account, and any portion of the Participant's Pretax Deferral Account, Employee
Account or Rollover Account invested in the OPC Stock Fund shall be maintained
in full and fractional Units.
All Stock acquired by the OPC Stock Fund, including, but not by way of
limitation, Stock contributed directly by the Employer or purchased with the
contribution made pursuant to Articles 4 and 5, Stock purchased with cash
dividends paid in respect of Stock, Stock acquired from stock dividends and
stock splits, and Stock purchased with the proceeds of the sale or exchange of
warrants, rights or dividends in kind distributed in respect of Stock, shall be
allocated to the Accounts of Participants based on Participants' Account
balances as of the Accounting Date in which the Stock is acquired.
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For the purpose of valuing a Participant's Account in connection with any
withdrawal or loan under the provisions of the Plan or for the purpose of any
distribution in kind or partly in kind, shares of Stock shall be valued as of
the Accounting Date of the withdrawal, loan, or distribution based on the
closing quotation on the New York Stock Exchange on the Accounting Date in which
such withdrawal, loan, or distribution is made; provided, however, that if
shares of Stock are sold in connection with such a withdrawal, loan, or
distribution, the shares sold shall be valued at the net proceeds received
therefor. If the closing price of such Stock shall not be so quoted or if so
quoted shall not be available to the Administrative Committee, a composite index
price or other price which shall be generally accepted for the establishment of
fair market value shall be used for the purpose of so valuing the Participant's
Account.
For the purpose of valuing a Participant's Account in connection with any
transfer under the provisions of the Plan, shares of Stock shall be valued as of
the effective date of the transfer based on the closing quotation on the New
York Stock Exchange on the Accounting Date in which such transfer is made;
provided, however, that if shares of Stock are sold in connection with such
transfer, the shares sold shall be valued at the net proceeds received therefor.
If the closing price of such Stock shall not be so quoted or if so quoted shall
not be available to the Administrative Committee, a composite index price or
other price which shall be generally accepted for the establishment of fair
market value shall be used for the purpose of so valuing the Participant's
Account.
9.11 Value of Accounts. The value of the balance of any Account held for a
Participant as of any Accounting Date shall equal (i) the number of Units
credited to the Account as of that date, including Units credited on that date
pursuant to section 9.6, multiplied by the Unit value determined as of the
Accounting Date, plus (ii) any uninvested cash in his Account.
9.12 Cost Account. The Trustee shall maintain records so that the cost or
"basis" (for tax purposes) of the Stock allocated to his Account may be
determined as of any Accounting Date. Whenever shares of Stock are distributed
from the Account of a Participant, such shares
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shall be assigned a cost equal to the average cost of all shares allocated at
the same time in accordance with rules and procedures adopted for the purpose by
the Administrative Committee.
9.13 Rollovers. Subject to the Administrative Committee's approval, amounts
which a Participant has received or is entitled to receive from any other
employee benefit plan may, in accordance with uniform and nondiscriminatory
procedures adopted by the Administrative Committee, be transferred by the
Participant to this Plan or, alternatively, by the trustee of the other employee
benefit plan directly to this Plan, and if transferred, shall be credited to
such Participant's Rollover Account hereunder, provided the following conditions
are satisfied:
(a) The rollover amounts tendered to the Administrative Committee must
have been received by or on behalf of the Participant from:
(1) A plan qualified under section 401(a) of the Code; or
(2) A conduit individual retirement account, described in section
408(d)(3)(A)(ii) of the Code, to which no individual retirement
account contributions were made or rolled over from a qualified
plan.
(b) In the case of a distribution described in (a)(1), above, the amounts
tendered must not include:
(1) Amounts contributed to a qualified plan on an after-tax basis by
a Participant, or
(2) Any other amounts not eligible for rollover treatment.
(c) Amounts must be received by the Administrative Committee not later
than 60 days after the distribution was received by the Participant.
The Administrative Committee shall establish such procedures, and may require
such additional information from the Participant as it deems necessary or
appropriate to determine that a proposed transfer hereunder will satisfy the
above requirements. Rollover amounts shall be transmitted to the Trustee to be
invested in such Investment Funds as the Eligible Employee may
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select, in accordance with such rules as are provided in Article 8, or in
accordance with other procedures approved by the Administrative Committee.
9.14 Transfer of Assets from the Occidental Petroleum Corporation Savings
Plan. As soon as administratively possible following the Effective Date, those
Employees who became Eligible Employees on the Effective Date and who, on the
day prior to the Effective Date, were participants in the Occidental Petroleum
Corporation Savings Plan (the "OPC Savings Plan") shall have their account
balances in the OPC Savings Plan transferred to the Plan. Amounts credited on
behalf of such participants to the "Matching Account", the "Pretax Deferral
Account", the "Employee Account", the "Rollover Account", and the "Loan
Account", as those terms are defined in the OPC Savings Plan, shall initially be
credited on behalf of such participants to the Matching Account, the Pretax
Deferral Account, the Employee Account, the Rollover Account, and the Loan
Account, respectively, in the Plan. Amounts invested by such participants in the
"Stable Value Fund", the "OPC Stock Fund", the "Standard & Poor's 500 Index
Fund", the "Diversified Balanced Fund", the "Asset Allocation Fund", the "Large
Cap Balanced Fund", the "Large Cap Growth Fund", and the "International Growth
Fund", as those terms are defined in the OPC Savings Plan, shall initially be
invested on behalf of such participants in the Stable Value Fund, the OPC Stock
Fund, the Standard & Poor's 500 Index Fund, the Diversified Balanced Fund, the
Asset Allocation Fund, the Large Cap Balanced Fund, the Large Cap Growth Fund,
and the International Growth Fund, respectively, in the Plan. Amounts invested
by such participants in the "Small Cap Stock Fund" and the "Large Cap Value
Fund", as those terms are defined in the OPC Savings Plan, shall initially be
invested on behalf of such participants in the Standard & Poor's 500 Index Fund
in the Plan. Subsequently, such transferred amounts shall be invested as each
such participant shall direct pursuant to section 8.2, provided that such
transferred amounts shall continue to be invested as described above in the
absence of an investment direction by any such participant pursuant to section
8.2 after the initial crediting.
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Article 10. Financing
---------------------
10.1 Financing. The Company shall maintain a Trust to finance the benefits
under the Plan, by entering into one or more Trust Agreements or insurance
contracts approved by the Company, or by causing insurance contracts to be held
under a Trust Agreement. Any Trust Agreement is designated as and shall
constitute a part of this Plan, and all rights which may accrue to any person
under this Plan shall be subject to all the terms and provisions of such Trust
Agreement. A Trustee shall be appointed by the Governance Committee and shall
have such powers as provided in the Trust Agreement. The Company may modify any
Trust Agreement or insurance contract from time to time to accomplish the
purpose of the Plan and may replace any insurance company or appoint a successor
Trustee or Trustees. By entering into such Trust Agreements or insurance
contracts, the Company shall vest in the Trustee, or in one or more investment
managers (as defined under ERISA) appointed under the terms of the Trust
Agreement from time to time by action of the Investment Committee,
responsibility for the management and control of the Trust Fund. In the event
the Investment Committee appoints any such investment manager, the Trustee shall
not be liable for the acts or omissions of the investment manager or have any
responsibility to invest or otherwise manage any portion of the Trust Fund
subject to the management and control of the investment manager. The Investment
Committee from time to time shall establish a funding policy which is consistent
with the objectives of the Plan and shall communicate it to the Trustee and each
investment manager so that they may coordinate investment policies with such
funding policy.
All expenses of administration may be paid out of the Trust Fund unless paid by
the Company. Such expenses shall include any expenses incident to the
functioning of the Administrative Committee, including but not limited to, fees
of accountants, counsel, and other specialists and their agents, and other costs
of administering the Plan. Until paid, the expenses shall constitute a liability
of the Trust Fund. However, the Company may reimburse the Trust Fund for any
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administration expense incurred. The Company reserves the right to charge the
Savings Accounts of Participants, Beneficiaries and Alternate Payees for
reasonable expenses incurred in the administration of their Accounts. Any such
charges shall be used to pay the costs of administering this Plan in the manner
described in section 5.4. The Company will make full disclosure of the amount
and nature of any such charge prior to its imposition.
10.2 Employer Contributions. The Employer shall make such contributions to
the Trust Fund as are required by this Plan, subject to the right of the Company
to discontinue the Plan.
10.3 OPC Stock Fund. The OPC Stock Fund shall consist of shares of Stock
and cash or cash equivalents that are held pending investment in Stock.
Investment in such shares shall be made from time to time by a direct issue of
Stock from the Company, or by purchase from securities dealers or by private
purchase at such prices and in such amounts as the Trustee may determine in its
absolute and uncontrolled discretion. However, no private purchase of such
shares shall be made at a total cost greater than the total cost (including
brokers' fees and other expenses of purchase) of purchasing such shares at the
then prevailing price of such shares on the open market, such prevailing price
to be determined by the Trustee as nearly as practicable based on the most
recent public trading prices for the Stock. The Trustee may match purchases and
sales to satisfy investment elections, withdrawals, loans and distributions of
Participants.
Cash dividends and cash proceeds from any other distribution received on Stock
shall be invested in Stock. The Trustee in its own discretion may invest funds
awaiting investment in Stock in short-term obligations, including obligations of
the United States of America or any agency or instrumentality thereof, trust and
participation certificates, beneficial interests in any trust, and such other
short-term obligations as the Trustee deems to be appropriate for such interim
investment purposes.
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The Trustee in its discretion may limit the daily volume of its purchases or
sales of Stock to safeguard interest of Participants or comply with legal or
exchange requirements. If the Trustee limits daily volume then the purchase
prices or sale proceeds, as the case may be, during the period of volume
limitations, shall be averaged, and the average per share price or sale proceeds
shall be used in determining the cost or proceeds to be applied in satisfaction
of any order of a Participant which requires the Trustee to purchase or sell
Stock during such period.
Investment elections of Company officers shall be limited, if necessary, so that
the beneficial interest in the Stock held by the Trust for their Accounts shall
not exceed, in the aggregate, 20 percent of the total value of all securities
and other assets held by the Trust, in all Investment Funds. For purposes of
this section 10.3, the term "officers" shall have the same meaning as set forth
in Regulation section 240.3-b-2 promulgated pursuant to section 3(b) of the
Securities Exchange Act of 1934.
All Stock purchased by the Trustee shall be registered in the name of the
Trustee or its nominee, and legal title to such Stock shall remain in the
Trustee until the Participant shall become entitled to distribution thereof
pursuant to this Plan.
In the event any option, right or warrant is received by the Trustee on Stock,
the Trustee shall sell the same at public or private sale and at such price and
upon such other terms as it may determine, unless the Investment Committee shall
determine that such option, right or warrant should be exercised, in which case
the Trustee shall exercise the same upon such terms and conditions as the
Investment Committee may prescribe.
The Trustee shall have the power to vote all shares of Stock held under this
Plan and may vote such shares itself or by proxy, except that the Trustee shall
vote shares of Stock attributable to accounts of Participants and Alternate
Payees for which it has received directions from
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Participants and Alternate Payees in accordance with such direction. The Trustee
shall vote any Stock for which it does not receive instructions from
Participants or Alternate Payees in accordance with directions from the
Administrative Committee.
10.4 Non-Reversion. Anything in this Plan to the contrary notwithstanding,
it shall be impossible at any time for the contributions of the Employer or any
part of the Trust Fund to revert to the Company or an Affiliate or to be used
for or diverted to any purpose other than the exclusive benefit of Participants
or their Beneficiaries, except that:
(a) If a contribution or portion thereof is made by the Employer by a
mistake of fact, upon written request to the Administrative Committee,
such contribution or such portion and any increment thereon shall be
returned to the Employer within one year after the date of payment;
and
(b) In the event that a deduction for any contributions made by the
Employer is disallowed by the Internal Revenue Service in any Plan
Year, then that portion of the Employer contribution that is not
deductible shall be returned to the Employer within one year from the
date of receipt of notice by the Internal Revenue Service of the
disallowance of the deduction.
10.5 Direct Transfer of Assets from Plans of Acquired Entities. The Trust
Agreement shall permit the direct receipt of assets which are transferred
directly to the Trust Fund from the trustees of qualified retirement plans
sponsored, at the time of the applicable transaction, by entities which are the
subject of purchase transactions made by the Company or an Affiliate.
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Article 11. Administration
--------------------------
11.1 The Administrative Committee. The Plan shall be administered by an
Administrative Committee appointed by the Governance Committee. The
Administrative Committee shall be composed of as many members as the Governance
Committee may appoint from time to time, but not fewer than three members, and
shall hold office at the discretion of the Governance Committee. Such members
may, but need not, be Employees of the Company.
Any member of the Administrative Committee may resign by delivering his written
resignation to the Governance Committee and to the Administrative Committee
Secretary. Such resignation shall be effective no earlier than the date of the
written notice.
Vacancies in the Administrative Committee arising by resignation, death,
removal, or otherwise, shall be filled by the Governance Committee. The
Administrative Committee shall be a fiduciary under the Plan, in accordance with
ERISA.
11.2 Chairman, Secretary, and Employment of Specialists. The members of
each of the Investment Committee and Administrative Committee shall elect one of
their number as Chairman and shall elect a Secretary who may, but need not, be a
member of such Committee. They may authorize one or more of their number or any
agent to execute or deliver any instrument or instruments on their behalf, and
may employ such counsel, auditors, and other specialists and such clerical,
medical, actuarial, and other services as they may require in carrying out the
provisions of the Plan.
11.3 Compensation and Expenses. The members of the Investment Committee and
Administrative Committee who are Employees shall serve without compensation for
services as a member of such Committee. Any member of a Committee may receive
reimbursement by the Company of expenses properly and actually incurred. All
expenses of a Committee shall be paid by the Company. Such expenses may include
any expenses incident to the functioning of a
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Committee, including, but not limited to, fees of the Plan's accountants,
outside counsel and other specialists and other costs of administering the Plan.
11.4 Manner of Action. A majority of the members of the Investment
Committee and Administrative Committee at the time in office shall constitute a
quorum for the transaction of business. All resolutions adopted, and other
actions taken by a Committee at any meeting shall be by the vote of a majority
of those present at any such meeting. Upon obtaining the written consent of a
majority of the members at the time in office, action of a Committee may be
taken otherwise than at a meeting.
11.5 Subcommittees. Each of the Investment Committee and Administrative
Committee may appoint one or more subcommittees and delegate such of its power
and duties as it deems desirable to any such subcommittee, in which case every
reference herein made to such Committee shall be deemed to mean or include the
subcommittees as to matters within their jurisdiction. The members of any such
subcommittee shall consist of such officers or other Employees of the Company
and such other persons as such Committee may appoint.
11.6 Other Agents. Each Committee may also appoint one or more persons or
agents to aid it in carrying out its duties as fiduciary, and delegate such of
its powers and duties as it deems desirable to such person or agents.
11.7 Records. All resolutions, proceedings, acts, and determinations of
each Committee shall be recorded by the Secretary thereof or under his
supervision, and all such records, together with such documents and instruments
as may be necessary for the administration of the Plan, shall be preserved in
the custody of the Secretary.
11.8 Rules. Subject to the limitations contained in the Plan, each
Committee shall be empowered from time to time in its discretion to adopt
by-laws and establish rules for the conduct of its affairs and the exercise of
the duties imposed upon it under the Plan.
11.9 Administrative Committee's Powers and Duties. The Administrative
Committee shall have responsibility for the general administration of the Plan
and for carrying out its
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provisions. The Administrative Committee shall have such powers and duties as
may be necessary to discharge its functions hereunder, including, but not
limited to, the following:
(a) To construe and interpret the Plan, to supply all omissions from,
correct deficiencies in and resolve ambiguities in the langauage of
the Plan and Trust; to decide all questions of eligibility and
determine the amount, manner, and time of payment of any benefits
hereunder;
(b) To make a determination as to the right of any person to an
allocation, and the amount thereof;
(c) To obtain from the Employees such information as shall be necessary
for the proper administration of the Plan and, when appropriate, to
furnish such information promptly to the Trustees or other persons
entitled thereto;
(d) To prepare and distribute, in such manner as the Company determines to
be appropriate, information explaining the Plan;
(e) To establish and maintain such accounts in the name of each
Participant as are necessary;
(f) To instruct the Trustee with respect to the payment of benefits
hereunder;
(g) To provide for any required bonding of fiduciaries and other persons
who may from time to time handle Plan assets;
(h) To prepare and file any reports required by ERISA;
(i) To engage an independent public accountant to conduct such
examinations and to render such opinions as may be required by ERISA;
(j) To allocate contributions, loan repayments and Trust Fund gains or
losses to the Accounts of Participants;
(k) To correct any errors and remedy any defects in the administration of
this Plan; and
(l) To designate Affiliates as Employers as described in section 12.5.
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11.10 Investment Responsibilities. The Investment Committee shall have the
authority and responsibility to direct the Trustee with respect to the
investment and management of the Trust Fund, and to establish a funding policy
and method consistent with the objectives of the Plan and the requirements of
ERISA. Except as otherwise provided in ERISA, the Investment Committee may
delegate such authority and responsibility to direct the Trustee to any person
who acknowledges in writing that it is a fiduciary with respect to the Plan and
who provides the Investment Committee with a written affirmation that it is
qualified to act as an investment manager within the meaning of ERISA. If the
Investment Committee delegates to an investment manager the authority and
responsibility to so direct the Trustee, such investment manager, and not the
Investment Committee or the Trustee, shall have sole responsibility for the
investment and management of so much of the Trust Fund as has been entrusted to
his management and control, and, except to the extent otherwise required by
ERISA, such delegation shall relieve the Investment Committee and the members
thereof of all duties and responsibilities with respect to the authority and
responsibility so delegated.
The Investment Committee may relinquish to the Trustee the Investment
Committee's power to direct the Trustee with respect to the investment and
management of the Trust Fund. In the event the Investment Committee so
relinquishes said power to the Trustee and the Trustee accepts such
responsibility in writing, the Trustee shall have sole and exclusive power and
responsibility with respect to the investment and management of the Trust Fund.
The Investment Committee may regain the power so relinquished by appropriate
Investment Committee action and notice to the Trustee.
11.11 Committees' Decisions Conclusive. The Administrative Committee and
the Investment Committee shall exercise their powers hereunder in a uniform and
nondiscriminatory manner. Any and all disputes with respect to the Plan which
may arise involving Participants, or their Beneficiaries shall be referred to
the Administrative Committee and its decision shall be final, conclusive, and
binding. Furthermore, if any question arises as to the
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meaning, interpretation, or application of any provision hereof, the decision of
the Administrative Committee with respect thereto shall be final.
11.12 Indemnity. To the extent permitted by the Company's bylaws and
applicable law, the Company shall indemnify each member of the Administrative
Committee and the Investment Committee (which, for purposes of this section,
includes any Employee to whom the Administrative Committee or the Investment
Committee has delegated fiduciary or other duties) against any and all claims,
losses, damages, expenses, including counsel fees, incurred by the member and
any liability, including any amounts paid in settlement with the Company's
approval, arising from the member's or the Company's action or failure to act,
except when the same is judicially determined to be attributable to the gross
negligence or willful misconduct of such member. The right of indemnity
described in the preceding sentence shall be conditioned upon the timely receipt
of notice by the Company of any claim asserted against the member, which notice,
in the event of a lawsuit shall be given within ten days after receipt by the
member of the complaint.
11.13 Fiduciaries. The fiduciaries named in this Article shall have only
those specific powers, duties, responsibilities, and obligations as are
specifically given them under this Plan or the Trust. The Employer shall have
the sole responsibility for making the contributions specified in Articles 4 and
5, and the Company shall have the sole authority to appoint and remove the
Trustee and to amend or terminate, in whole or in part, this Plan or the Trust.
The Administrative Committee shall have the sole responsibility for the
administration of this Plan, which responsibility is specifically described in
this Plan and the Trust Agreement. The officers and Employees of the Company
shall have the responsibility of implementing the Plan and carrying out its
provisions as the Administrative Committee shall direct. The Investment
Committee, the Trustee, and any investment manager shall have the sole
responsibility for the administration of the Trust and the management of the
assets held under the Trust, to the extent provided in the Trust Agreement. A
fiduciary may rely upon any direction, information, or action of another
fiduciary as being proper under this Plan or the Trust, and is not required
under
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this Plan or the Trust to inquire into the propriety of any such direction,
information, or action. It is intended under this Plan and the Trust that each
fiduciary shall be responsible for the proper exercise of his or its own powers,
duties, responsibilities, and obligations under this Plan and the Trust and
shall not be responsible for any act or failure to act of another fiduciary. No
fiduciary guarantees the Trust Fund in any manner against investment loss or
depreciation in asset value. Any party may serve in more than one fiduciary
capacity with respect to the Plan or Trust.
11.14 Notice of Address. Each person entitled to benefits from the Plan
must file with the Administrative Committee or its agent, in writing, his post
office address and each change of post office address. Any communication,
statement, or notice addressed to such a person at his latest reported post
office address will be binding upon him for all purposes of the Plan, and
neither the Administrative Committee nor the Company or any Trustee shall be
obliged to search for or ascertain his whereabouts.
11.15 Data. All persons entitled to benefits from the Plan must furnish to
the Company such documents, evidence, or information, including information
concerning marital status, as the Company considers necessary or desirable for
the purpose of administering the Plan; and it shall be a condition of the Plan
that each such person must furnish such information and sign such documents as
the Company may require before any benefits become payable from the Plan. The
Administrative Committee shall be entitled to distribute benefits to a
non-spouse beneficiary in reliance upon the signed statement of the Participant
that he is unmarried without any further liability to a spouse if such statement
is false.
11.16 Benefit Claims Procedures. All applications for benefits under the
Plan shall be submitted to: Oxy Vinyls, LP, Attention: Pension and Retirement
Plan Administrative Committee, 5005 LBJ Freeway, Dallas, Texas 75244.
Applications for benefits must be in writing on the forms prescribed by the
Administrative Committee and must be signed by the Participant, or in the case
of a death benefit, by the Beneficiary or legal representative of the deceased
Participant. Each application shall be acted upon and approved or disapproved
within 60 days following its receipt by the Administrative Committee. If any
application for a benefit is
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denied, in whole or in part, the Administrative Committee shall notify the
applicant in writing of such denial and of his right to a review by the
Administrative Committee and shall set forth in a manner calculated to be
understood by the applicant, specific 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 his application, an explanation of why such material or
information is necessary, and an explanation of the Plan's review procedure.
Any person, or his duly authorized representative, whose application for
benefits is denied in whole or in part, may appeal from such denial to the
Administrative Committee for a review of the decision by submitting to the
Administrative Committee within 60 days after receiving notice of the denial a
written statement:
(a) requesting a review of his application for benefits by the
Administrative Committee;
(b) setting forth all of the ground upon which his 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 his application.
The Administrative Committee shall act upon each such application within 60 days
after the later of receipt of the applicant's request for review by the
Administrative Committee or receipt of any additional materials reasonably
requested by the Administrative Committee from such applicant.
The Administrative Committee shall make a full and fair review of each such
application and any written materials submitted by the applicant or the Employer
in connection therewith and may require the Employer or the applicant to submit
within 30 days of written notice by the Administrative Committee therefor, such
additional facts, documents, or other evidence as the
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Administrative Committee, in its sole discretion, deems necessary or advisable
in making such a review. On the basis of its review, the Administrative
Committee shall make an independent determination of the applicant's eligibility
for benefits under the Plan. The decision of the Administrative Committee on any
application for benefits shall be final and conclusive upon all persons if
supported by substantial evidence in the record.
If the Administrative Committee denies an application in whole or in part, the
Administrative Committee 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 Administrative Committee decision was based.
11.17 Member's Own Participation. No member of the Administrative Committee
or the Investment Committee may act, vote or otherwise influence a decision of
the committee on which he serves specifically relating to his own participation
under the Plan.
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Article 12. Amendment and Termination
-------------------------------------
12.1 Amendment and Termination. The Company expects the Plan to be
permanent and to continue indefinitely; however, this Plan is purely voluntary
on the part of the Company, and each Employer, and the Company must necessarily
and does hereby reserve the right to amend, modify, or terminate the Plan at any
time by action of its Governance Committee. The Administrative Committee in its
discretion may amend the Plan if it finds that such amendment does not
significantly increase or decrease benefits or costs. No amendment of the Plan
shall cause any part of the Trust Fund to be used for, or diverted to, purposes
other than for the exclusive benefit of the Participants or their Beneficiaries
covered by the Plan, or increase the duties and responsibilities of the Trustee
without its consent, or decrease the Account balance of a Participant or
Beneficiary.
12.2 Distribution on Termination. Upon termination of the Plan in whole or
in part, or upon complete discontinuance of contributions to the Plan by the
Company, the value of the proportionate interest in the Trust Fund of each
Participant affected by such termination shall be determined by the
Administrative Committee as of the date of such termination or discontinuance.
The Accounts of such Participants shall be fully vested and nonforfeitable, and
thereafter distribution shall be made to such Participants as directed by the
Administrative Committee.
Upon the partial termination of the Plan, the Governance Committee may in its
sole discretion determine the timing of a distribution of the balance of the
affected Participants' Accounts.
12.3 Successors. In case of the merger, consolidation, liquidation,
dissolution or reorganization of an Employer, or the sale by an Employer of all
or substantially all of its assets, provision may be made by written agreement
between the Company and any successor corporation acquiring or receiving a
substantial part of the Employer's assets, whereby the Plan and the Trust will
be continued by the successor. If the Plan is to be continued by the successor,
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then effective as of the date of the reorganization or transfer, the successor
corporation shall be substituted for the Employer under the Plan and the Trust
Agreement. The substitution of a successor corporation for an Employer will not
in any way be considered a termination of the Plan.
12.4 Plan Merger or Transfer. This Plan shall not merge or consolidate
with, or transfer assets and liabilities to, or accept a transfer from, any
other employee benefit plan unless each Participant in this Plan will (if the
Plan had then terminated) receive a benefit immediately after the merger,
consolidation, or transfer which is not less than the benefit the Participant
would have been entitled to receive immediately before the merger,
consolidation, or transfer of assets (if this Plan had then terminated). Subject
to these limitations, the Plan may transfer assets and liabilities to, or accept
a transfer of assets and liabilities from, any other employee benefit plan which
is qualified under Code section 401(a) where such a transfer has been authorized
by agreement between the Employer and the sponsor of the other employee benefit
plan and is not prohibited by law.
12.5 Participating Affiliates. The Governance Committee or the
Administrative Committee may designate any Affiliate as an Employer under this
Plan. The Affiliate shall become an Employer and a party to this Plan and the
Trust upon acceptance of such designation. Any Affiliate may withdraw from the
Plan and Trust, and end its status as an Employer hereunder, by communicating to
the Administrative Committee its desire to withdraw. Upon withdrawal, the Plan
shall be considered terminated as to Employees of such Affiliate.
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Article 13. Top-Heavy Provisions
--------------------------------
13.1 Application of Top-Heavy Provisions. If in any Plan Year (i) the sum
of the Savings Account balances of Participants who are "Key Employees" for such
Plan Year exceeds 60 percent of the sum of Savings Account balances of all
Employees (and former Employees or Beneficiaries described in section 13.4), or
(ii) the Plan is part of a top-heavy group, then the following provisions under
this Article shall apply for such Plan Year.
The date for determining the applicability of this Article, ("determination
date") is:
(a) For the first Plan Year, the last day of the Plan Year; and
(b) For any other Plan Year, the last day of the preceding Plan Year.
13.2 Key Employees. For purposes of this Article, the term "Key Employee"
means any Employee or former Employee (or his Beneficiary) who at any time
during a Plan Year or any of the four preceding Plan Years is:
(a) An officer of the Company or its Affiliates who receives Taxable
Compensation of more than $65,000 (or, if greater, one half of the
dollar limitation in effect under Code section 415(b)(1)(A)) in the
Plan Year; provided no more than the lesser of (i) 50 Employees, or
(ii) the greater of three Employees or 10 percent of all Employees are
to be treated as officers;
(b) One of the ten Employees owning the largest interests in excess of
one-half percent of the Company or an Affiliate if such Employee
receives Taxable Compensation during the Plan Year that exceeds
$30,000 (or, if greater, the dollar limitation in effect under Code
section 415(c)(1)(A));
(c) A 5 percent owner of the Company or an Affiliate; or
(d) A 1 percent owner of the Company or an Affiliate who receives Taxable
Compensation of more than $150,000 for the Plan Year.
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An Employee is considered to own more than a 5 percent interest if the Employee
owns at least 5 percent of the Company's outstanding Stock or Stock possessing
at least 5 percent of the total combined voting power of all of the Company and
Affiliates' Stock. An Employee is also treated as owning Stock owned by certain
members of the Employee's family as provided in section 318 of the Code.
The same rules apply to determine whether an Employee is a 1 percent owner.
If an Employee ceases to be a Key Employee, such Employee's Savings Account
balance shall be disregarded under the top-heavy plan computation for any Plan
Year following the last Plan Year for which he was treated as a Key Employee.
13.3 Top-Heavy Group. For purposes of determining whether the Plan is part
of a top-heavy group as described in section 13.1, the following rules shall
apply:
(a) Aggregation Group. All plans maintained by the Company or an Affiliate
are aggregated to determine whether the plans, as a group, are
top-heavy. The aggregation group shall include any plan which covers a
Key Employee and any other plan which enables a plan covering a Key
Employee to meet the requirements of section 401(a)(4) or 410 of the
Code.
(b) Top-Heavy Group. An aggregation group is a top-heavy group if, as of
the determination date, (1) the sum of the account balances of Key
Employees under all defined contribution plans included in the group
exceeds 60 percent of the account balances of all participants under
all such plans in the group, or (2) the present value of the
accumulated accrued benefits for Key Employees under all defined
benefit plans in the group exceeds 60 percent of the present value of
the accumulated accrued benefits for all participants under all such
plans in the group.
In any Plan Year, in testing for top-heaviness under section 13.1, the Company
may in its discretion expand the aggregation group to take into account any
other plan maintained by it or
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an Affiliate, so long as such expanded aggregation group continues to meet the
requirements of sections 401(a)(4) and 410 of the Code.
13.4 Additional Rules. In determining the present value of the accumulated
accrued benefits under a defined benefit plan and the sum of the account
balances under a defined contribution plan, Company contributions and Employee
contributions (other than deductible employee contributions) as of the
determination date for the Plan Year shall be taken into account. The present
value of accrued benefits shall, for purposes of this Article, be calculated by
using factors derived from the UP-84 mortality table, set back one year, and a 5
percent interest rate. The present value of the accrued benefit in a defined
benefit plan or the account balance in a defined contribution plan will include
any amount distributed to a Participant within the five year period ending on
the determination date, but shall not include a rollover initiated by the
Employee. Accrued benefits or account balances of Employees who have not
performed services for the Employer during the five Plan Years ending on the
determination date shall not be taken into account. Additionally, for the
purpose of determining the present value of the accumulated accrued benefits
under a defined benefit plan and the sum of the account balances under a defined
contribution plan, the rules set forth in Code sections 416(g)(3) and (4) will
be taken into account.
13.5 Combined Limit on Contributions and Benefits for Key Employees. If the
Plan is determined to be top-heavy in any Plan Year under the provisions of
section 13.1 or 13.3, then the combined limit on benefits and contributions
under section 415(e) of the Code for any Key Employee who participates in both a
defined benefit plan and a defined contribution plan which are included in a
top-heavy group as provided in section 13.3 above shall be the lesser of 1.0 (as
applied to the dollar limit) or 1.4 (as applied to the limit based upon
compensation).
13.6 Minimum Contributions. If this Plan is determined to be top-heavy in
any Plan Year under the provisions of section 13.1 or 13.3, then contributions
shall be made under the Retirement Plan on behalf of each non-Key Employee who
is a Participant hereunder in an amount not less than three percent of the
Participant's Taxable Compensation for each year.
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Article 14. Miscellaneous Provisions
------------------------------------
14.1 Employment Rights. Nothing contained in this Plan or any modification
of the same or act done in pursuance hereof shall be construed as giving any
person any legal or equitable right against the Employer, the Trustee, or the
Trust Fund, unless specifically provided herein, or as giving any person a right
to be retained in the employ of the Employer. All Participants shall remain
subject to assignment, reassignment, promotion, transfer, layoff, reduction,
suspension, and discharge to the same extent as if this Plan had never been
established.
14.2 No Examination or Accounting. Neither this Plan nor any action taken
thereunder shall be construed as giving any person the right to an accounting or
to examine the books or affairs of the Company or Employer.
14.3 Investment Risk. The Participants and their Beneficiaries shall assume
all risks in connection with any decrease in the value of any assets or funds
which may be invested or reinvested in the Trust which supports this Plan.
14.4 Non-Alienation. No Benefit payable at any time under the Plan shall be
subject to the debts or liabilities of a Participant or his Beneficiary. Any
attempt to alienate, sell, transfer, assign, pledge, or otherwise encumber any
such benefit, whether presently or thereafter payable, shall be void. Except as
otherwise provided by law, no benefit under the Plan shall be subject in any
manner to attachment, garnishment, or encumbrance of any kind, provided,
however, that judicial orders for purposes of enforcing family support
obligations or pertaining to domestic relations (which orders do not alter the
amount of the benefit) may, at the discretion of the Administrative Committee,
be honored by the Plan. The Administrative Committee shall establish appropriate
procedures for reviewing court orders pertaining to domestic relations and child
support and for notifying Participants of the receipt of such orders.
14.5 Incompetency. Every person receiving or claiming benefits under the
Plan shall be conclusively presumed to be mentally competent and of age until
the date on which the
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Administrative Committee receives a written notice, in a form and manner
acceptable to the Administrative Committee, that such person is incompetent or a
minor, for whom a guardian or other person legally vested with the care of his
Person or estate has been appointed; provided, however, that if the
Administrative Committee shall find that any person to whom a benefit is payable
under the Plan is unable to care for his affairs because of incompetency, or is
a minor, any payment due (unless a prior claim therefor shall have been made by
a duly appointed legal representative) may be paid to the spouse, a child, a
parent, or a brother or sister, or to any person or institution deemed by the
Administrative Committee to have incurred expense for such person otherwise
entitled to payment. To the extent permitted by law, any such payment so made
shall be a complete discharge of liability therefor under the Plan.
In the event a guardian of the estate of any person receiving or claiming
benefits under the Plan shall be appointed by a court of competent jurisdiction,
benefit payments may be made to such guardian, provided that proper proof of
appointment and continuing qualification is furnished in a form and manner
acceptable to the Administrative Committee. To the extent permitted by law, any
such payment so made shall be a complete discharge of liability therefor under
the Plan.
14.6 Severability. In the event any provision of this Plan shall be held
illegal or invalid for any reason, such illegality or invalidity shall not
affect the remaining parts of this Plan, and it shall be construed and enforced
as if such illegal or invalid provision had never been inserted herein.
14.7 Counterparts. This Plan may be executed in any number of counterparts,
each of which shall be deemed to be an original. All the counterparts shall
constitute but one and the same instrument and may be sufficiently evidenced by
any one counterpart.
14.8 Service of Legal Process. The members of the Administrative Committee
and the Secretary of the Company are hereby designated agent of the Plan for the
purpose of receiving service of summons, subpoena, or other legal process.
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14.9 Headings of Articles and Sections. The headings of sections and
subsections are included solely for convenience of reference, and if there is
any conflict between such headings and the text of the plan, the text shall
control.
14.10 Applicable Law. The Plan and all rights hereunder shall be governed,
construed, and administered in accordance with the laws of the State of Texas
with the exception that any Trust Agreement which may constitute a part of the
Plan shall be construed and enforced in all respects under and by the laws of
the State in which the Trustee thereunder is located.
14.11 Unclaimed Benefits. In the event that the Administrative Committee,
after having made a diligent search, is unable to locate a Participant,
Beneficiary, or Alternate Payee who is entitled to benefits under this Plan,
such benefits shall be reallocated to the accounts of other Participants in
accordance with section 9.6. In the event that the Participant, Beneficiary, or
Alternate Payee whose account is subject to such reallocation subsequently
asserts a valid claim for his benefits, his account will be restored in the
manner described in section 6.3(a).
14.12 Qualified Military Service. Notwithstanding any provision of this
Plan to the contrary, contributions, benefits and Service credit with respect to
qualified military service will be provided in accordance with section 414(u) of
the Code.
* * *
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