As filed with the Securities and Exchange Commission on February 21, 2002
Registration No. 333-
================================================================================
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)
OCCIDENTAL PETROLEUM CORPORATION 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 Proposed
Amount Maximum Maximum
Title of Securities to be Offering Price Aggregate Amount of
to be Registered Registered Per Share (1) Offering Price (1) Registration Fee
- -------------------- -------------- -------------- ------------------ ----------------
Common Stock, $.20
par value (including
Preferred Stock 2,000,000 (2) $25.4800 $50,960,000.00 $4,688.32
Purchase Rights)
==================== ============== ============== ================== ================
(1) Estimated pursuant to Rule 457 solely for the purpose of calculating the
amount of the registration fee based on the average of the high and low
price for the Common Stock on February 14, 2002.
(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.
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, 2000;
(b) (i) Quarterly Reports on Form 10-Q for the quarterly periods ended
March 31, 2001, June 30, 2001, and September 30, 2001;
(ii) Current Reports on Form 8-K, dated January 24, 2001 (filed
January 24, 2001), March 28, 2001 (filed March 28, 2001), April 18, 2001 (filed
April 18, 2001), April 20, 2001 (filed April 20, 2001), July 11, 2001 (filed
July 11, 2001), July 19, 2001 (filed July 19, 2001), October 16, 2001 (filed
October 16, 2001), October 17, 2001 (filed October 17, 2001), November 29, 2001
(filed December 3, 2001), January 8, 2002 (filed January 8, 2002), January 31,
2002 (filed February 4, 2002); 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 Occidental Petroleum
Corporation 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, an Associate General 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
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, dated November
12, 1999 (incorporated by reference to Exhibit 3.(i) to Occidental's
Annual Report on Form 10-K for the fiscal year ended December 31,
1999, File No. 1-9210).
3.i(b) Certificate of Change of Location of Registered Office and of
Registered Agent, dated July 6, 2001. (incorporated by reference to
Exhibit 3.1(i) to Occidental's Registration Statement on Form S-3,
File No. 333-82246).
3.2 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 Occidental Petroleum Corporation Savings Plan, Amended and Restated
Effective January 1, 1999 (Reflecting Amendments Effective Through
December 31, 2001).
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;
2
(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
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 alone, 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, the Registrant
certifies that it has reasonable grounds to believe that it meets all of the
requirements for filing on Form S-8 and has duly caused this Registration
Statement to be signed on its behalf by the undersigned, thereunto duly
authorized, in the City of Los Angeles, State of California, on February 19,
2002.
OCCIDENTAL PETROLEUM CORPORATION
(REGISTRANT)
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 of 1933, this
Registration Statement has been signed by the following persons in the
capacities and on the dates indicated.
SIGNATURE TITLE DATE
--------- ----- ----
/s/ RAY R. IRANI Chairman of the Board of February 19, 2002
- ------------------------------- Directors and Chief
Ray R. Irani Executive Officer
/s/ STEPHEN I. CHAZEN Executive Vice President - February 19, 2002
- ------------------------------- Corporate Development
Stephen I. Chazen and Chief Financial Officer
/s/ SAMUEL P. DOMINICK, JR. Vice President and February 19, 2002
- ------------------------------- Controller (Chief
Samuel P. Dominick, Jr. Accounting Officer)
4
SIGNATURE TITLE DATE
--------- ----- ----
Director February 19, 2002
- -------------------------------
Ronald W. Burkle
/s/ JOHN S. CHALSTY Director February 19, 2002
- -------------------------------
John S. Chalsty
/s/ EDWARD P. DJEREJIAN Director February 19, 2002
Edward P. Djerejian
/s/ JOHN E. FEICK Director February 19, 2002
- -------------------------------
John E. Feick
/s/ J. ROGER HIRL Director February 19, 2002
- -------------------------------
J. Roger Hirl
/s/ DALE R. LAURANCE Director February 19, 2002
- -------------------------------
Dale R. Laurance
/s/ IRVIN W. MALONEY Director February 19, 2002
- -------------------------------
Irvin W. Maloney
/s/ RODOLFO SEGOVIA Director February 19, 2002
- -------------------------------
Rodolfo Segovia
/s/ AZIZ D. SYRIANI Director February 19, 2002
- -------------------------------
Aziz D. Syriani
Director February 19, 2002
- -------------------------------
Rosemary Tomich
EXHIBIT 5.1
[LOGO] OCCIDENTAL PETROLEUM CORPORATION 10889 Wilshire Boulevard
Los Angeles, California 90024
Telephone (310) 208-8800
Facsimile (310) 443-6690
LINDA S. PETERSON
ASSOCIATE GENERAL COUNSEL
Direct Telephone (310) 443-6189
Direct Facsimile (310) 443-6737
E-Mail linda_peterson@oxy.com
February 19, 2002
Occidental Petroleum Corporation
10889 Wilshire Boulevard
Los Angeles, CA 90024
Re: Occidental Petroleum Corporation
Registration Statement on Form S-8
Occidental Petroleum Corporation Savings Plan
Ladies and Gentlemen:
I am an Associate 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 February 19, 2002 (the "Registration Statement"). The
Registration Statement relates to the registration under the Securities Act of
1933, as amended (the "1933 Act"), of 2,000,000 shares (the "Shares") of Common
Stock, par value $.20 per share, of Occidental. The Shares are to be issued in
accordance with the Occidental Petroleum Corporation 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
adoption of the Plan, 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.
Occidental Petroleum Corporation
February 19, 2002
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
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 7,
2001, included or incorporated by reference in Occidental Petroleum
Corporation's Annual Report on Form 10-K for the year ended December 31, 2000
and to all references to our Firm included in this registration statement.
/s/ ARTHUR ANDERSEN LLP
ARTHUR ANDERSEN LLP
Los Angeles, California
February 18, 2002
OCCIDENTAL PETROLEUM CORPORATION
--------------------------------
SAVINGS PLAN
------------
Amended and Restated Effective
January 1, 1999
Reflecting Amendments Effective through
December 31, 2001
OCCIDENTAL PETROLEUM CORPORATION SAVINGS PLAN
---------------------------------------------
TABLE OF CONTENTS
-----------------
ARTICLE SECTION PAGE
- ------- ------- ----
1 Establishment of Plan
---------------------
1.1 Restatement 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 15
3 Participation and Service
-------------------------
3.1 Date of Participation 16
3.2 Duration 16
3.3 Transfers 17
3.4 Service 17
4 Pretax Deferrals, After-Tax Contributions and Adjustment Contributions
----------------------------------------------------------------------
4.1 Pretax Deferrals and After-Tax Contributions 24
4.2 Pretax Deferral and After-Tax Contribution 24
Election Procedures
4.3 Discontinuance or Change in Rate of Pretax Deferrals 24
and After-Tax Contributions
4.4 Salary Reduction 25
4.5 Individual Maximum Pretax Deferrals 25
and After-Tax Contributions
4.6 Discrimination Limits on Pretax Deferrals 26
4.7 Discrimination Limits on Matching Contributions, 28
After-Tax Contributions, and Adjustment Contributions
4.8 Multiple Use Limitation 29
4.9 Reductions to Pretax Deferrals and After-Tax Contributions 30
4.10 Deposit of Pretax Deferrals, After-Tax Contributions 33
and Adjustment Contributions
4.11 Crediting of Pretax Deferrals, After-Tax Contributions 33
and Adjustment Contributions
4.12 Distribution of Excess Deferrals 33
i
ARTICLE SECTION PAGE
- ------- ------- ----
5 Employer Matching Contributions
-------------------------------
5.1 Employer Matching Contributions 35
5.2 Deposit of Employer Matching Contributions 35
5.3 Crediting of Employer Matching Contributions 35
5.4 Forfeitures 36
5.5 Limitation on Annual Additions 36
5.6 "Annual Addition" Defined 36
5.7 Other Defined Contribution Plans 37
5.8 Deductibility Limitation 37
5.9 Adjustment of Allocations 37
6 Vesting and Benefits
--------------------
6.1 Vesting 38
6.2 Benefits Upon Separation from Service 43
6.3 Forfeiture of Contingent Interests 44
6.4 Death Benefits 45
6.5 Forms of Payment 46
6.6 Time of Payment of Benefits 51
6.7 Withdrawals 51
6.8 Debiting of Investment Funds 53
6.9 Small Amounts 53
7 Participant Loans
-----------------
7.1 Eligibility 55
7.2 Loan Amount 55
7.3 Loan Terms 55
7.4 Source of Loan Funds and Valuation 56
7.5 Loan Account 56
7.6 Repayments 57
7.7 Leave of Absence 59
7.8 Separation from Service 59
7.9 Delinquent Payments 60
7.10 Loan Rules 61
7.11 Discontinuance 61
8 Investment Elections
--------------------
8.1 Investment of Contributions 62
8.2 Transfers of Existing Balances 63
8.3 Transfer of Assets 64
ii
ARTICLE SECTION PAGE
- ------- ------- ----
9 Participant Accounts and Records of the Plan
--------------------------------------------
9.1 Accounts and Records 65
9.2 Account Value 65
9.3 Investment Funds 65
9.4 Unit Value of Investment Funds 66
9.5 Calculation of Unit Value 66
9.6 Valuation Adjustments 66
9.7 Debiting of Accounts upon Distribution, Withdrawal, 67
Loan or Charge
9.8 Unit Value upon Transfer of Investment Funds 67
9.9 Loan Accounts 67
9.10 OPC Stock Fund Valuation 67
9.11 Value of Accounts 68
9.12 Cost Account 68
9.13 Rollovers 69
9.14 Merger of the MidCon Corp. ESOP 70
10 Financing
---------
10.1 Financing 71
10.2 Employer Contributions 72
10.3 OPC Stock Fund 72
10.4 Non-Reversion 74
10.5 Direct Transfer of Assets from Plans of Acquired Entities 74
11 Administration
--------------
11.1 The Administrative Committee 75
11.2 Chairman, Secretary, and Employment of Specialists 75
11.3 Compensation and Expenses 75
11.4 Manner of Action 76
11.5 Subcommittees 76
11.6 Other Agents 76
11.7 Records 76
11.8 Rules 76
11.9 Administrative Committee's Powers and Duties 76
11.10 Investment Responsibilities 78
11.11 Committees' Decisions Conclusive 79
11.12 Indemnity 79
11.13 Fiduciaries 79
11.14 Notice of Address 80
11.15 Data 80
11.16 Benefit Claims Procedures 81
11.17 Member's Own Participation 83
iii
ARTICLE SECTION PAGE
- ------- ------- ----
12 Amendment and Termination
-------------------------
12.1 Amendment and Termination 84
12.2 Distribution on Termination 84
12.3 Successors 84
12.4 Plan Merger or Transfer 85
12.5 Participating Affiliates 86
13 Top-Heavy Provisions
--------------------
13.1 Application of Top-Heavy Provisions 87
13.2 Key Employees 87
13.3 Top-Heavy Group 88
13.4 Additional Rules 89
13.5 Minimum Contributions 89
14 Miscellaneous Provisions
------------------------
14.1 Employment Rights 90
14.2 No Examination or Accounting 90
14.3 Investment Risk 90
14.4 Non-Alienation 90
14.5 Incompetency 90
14.6 Severability 91
14.7 Counterparts 91
14.8 Service of Legal Process 91
14.9 Headings of Articles and Sections 92
14.10 Applicable Law 92
14.11 Unclaimed Benefits 92
14.12 Qualified Military Service 92
Appendix 1 Participation and Vesting for Certain Employees 93
Under Glenn Springs Sale Agreement
iv
OCCIDENTAL PETROLEUM CORPORATION
--------------------------------
SAVINGS PLAN
------------
Article 1. Establishment of Plan
--------------------------------
1.1 Restatement of the Plan. OCCIDENTAL PETROLEUM CORPORATION amended and
restated the Occidental Petroleum Corporation Savings Plan (hereinafter referred
to as the "Plan") for the benefit of Eligible Employees, effective as of January
1, 1999. This restated document reflects all amendments adopted by the Company
for the Plan which are effective through December 31, 2001.
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 January 1, 1984.
1
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 Board
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 5.7 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 Board 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
(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.
(h) "Board of Directors" or "Board" means the Board of Directors of
Occidental Petroleum Corporation.
3
(i) "Code" means the Internal Revenue Code of 1986, as amended.
(j) "Company" means Occidental Petroleum Corporation.
(k) "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 Occidental Petroleum
Corporation 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 Occidental Petroleum Corporation 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 $170,000, 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 reasons other than the making of
Pretax Deferrals and contributions pursuant to the Occidental
Petroleum Corporation 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.
4
(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(k), 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(k), the term "Guaranteed Overtime" means
compensation paid to a 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.
5
(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. Compensation will not
include payments made to any Participant pursuant to the
Occidental Chemical Corporation Weekly Sickness and Accident Plan
unless (i) such payments are made to the Participant through the
payroll accounting department of the Company or an Affiliate and
(ii) the Participant is ineligible for participation in the
Retirement Plan.
(l) "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 Occidental Petroleum Corporation 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 Participant
is not Disabled. All rules with respect to the determination of
6
Disability shall be uniformly and consistently applied to all
Participants in similar circumstances.
(m) "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.
(n) "Effective Date" means January 1, 1984.
(o) "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 made under a funded plan of deferred
compensation by a corporation which is not an Employer;
7
(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;
(5) Employees of Oxy Westwood Corporation other than those Employees
who were Eligible Employees immediately prior to their transfer
to Oxy Westwood Corporation from an Employer. Notwithstanding the
preceding sentence, Employees of Oxy Westwood Corporation who
were Eligible Employees on June 30, 1989, or who are hired by Oxy
Westwood Corporation at any time thereafter under circumstances
where it is agreed at the time of hire that they will be Eligible
Employees, shall continue to be Eligible Employees thereafter so
long as they remain so employed; and
(6) Effective as of July 1, 1990, any Eligible Employee who elects,
pursuant to an employment agreement with the Company or any other
Employer, not to be a Participant.
The following Employees whose employment is subject to a collective
bargaining agreement became Eligible Employees as of the date noted:
8
Effective Date of
Union Local of Commencement of
Affected Employees Location Eligible Employee Status
------------------ -------- ------------------------
United Steelworkers Local 336 Pottstown, PA May 1, 2001
United Teamsters Local 560 Jersey City, NJ August 1, 2001
United Steelworkers Local 14734 Cincinnati, OH October 1, 2001
National Hooker Employees Union Niagara Falls, NY December 1, 2001
United Steelworkers Local 2154-03 Chicago, IL January 1, 2002
IFPTE Local 57 Niagara Falls, NY January 1, 2002
Due to the merger of all assets and liabilities held by the Occidental
Chemical Corporation Savings and Investment Plan on December 31, 2001
into the Plan, all Employees who were eligible to participate in the
Occidental Chemical Corporation Savings and Investment Plan on that
date became Eligible Employees.
Notwithstanding any other provision of this subsection 2.1(o), 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
9
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.
(p) "Employee" means any person employed by the Company or by an
Affiliate.
(q) "Employer" means the Company and any Affiliate which is designated by
the Board or the Administrative Committee and which adopts this Plan.
(r) "ERISA" means the Employee Retirement Income Security Act of 1974, as
from time to time amended.
(s) "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.
(t) "Inactive Participant" means an Employee who was an active 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 to
administer the investments of the Retirement Plan.
(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.
10
(2) A "Small Cap Value Fund" which shall be invested in equity
securities of small capitalization companies, as well as stock
index options and futures.
(3) 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.
(4) 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.
(5) A "Diversified Balanced Fund" which shall be invested in a
mixture of stocks and bonds that will vary moderately with market
conditions.
(6) A "Large Cap I 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 II 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.
(9) A "Large Cap Value Fund" which shall be invested in common stocks
of a small number of well-established United States and
international companies.
(10) A "Bond Fund" which shall be invested in bonds and other types of
fixed income securities issued by domestic and foreign companies.
(11) A "High Yield Bond Fund" which shall be invested in high-yield
securities and other types of domestic and foreign fixed income
securities.
(12) A "Growth Fund" which shall be invested in equity securities of
United States companies with mid and large market capitalizations
of at least one billion dollars and with high potential for
growth.
11
(13) A "Convertible Bond Fund" which shall be invested in bonds and
preferred stock which can be converted into common stock.
(w) "Loan Account" means the account created under section 7.5
representing the unpaid principal outstanding on a loan to an
Employee.
(x) "MidCon Corp. ESOP" means the MidCon Corp. Employee Stock Ownership
Plan as effective November 20, 1996.
(y) "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.
(z) "Personal 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.
12
(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 "Personal Savings Account" or "Account" also means a separate
account which is established pursuant to a qualified domestic
relations order on behalf of an Alternate Payee. For the purpose of
this subsection 2.1(z), the term "qualified domestic relations order"
shall have the same meaning as assigned to that term in section 414(p)
of the Code.
(aa) "Plan Year" means the calendar year.
(bb) "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.
(cc) "Retirement Plan" means the Occidental Petroleum Corporation
Retirement Plan.
(dd) "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.
13
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 sale constitutes an event described in Code section
401(k)(10)(A);
(ii) 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 Separation from Service pursuant to
other provisions of this subsection 2.1(dd) by such time; or
(iii) 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 or short-term disability
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.
(ee) "Service" means the periods of employment credited to an Employee
under section 3.4.
14
(ff) "Stock" means the common stock of Occidental Petroleum Corporation.
(gg) "Taxable Compensation" means the total cash and non-cash remuneration
paid to a Participant by the Employer or an Affiliate for services
rendered during the Plan Year, but excluding:
(1) Company contributions for a simplified employee pension;
(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.
(hh) "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.
(ii) "Trust Fund" means the assets of every kind and description held under
any Trust Agreement forming a part of the Plan.
(jj) "Trustee" means any person selected by Occidental Petroleum
Corporation to act as Trustee under any Trust Agreement at any time of
reference.
(kk) "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.
15
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.
Notwithstanding anything herein to the contrary, each Employee who became an
Eligible Employee by virtue of the provisions of (a) the Agreement of Purchase
and Sale between Tenneco Polymers, Inc. and Occidental Chemical Corporation
dated March 21, 1986, (b) the Agreement and Plan of Reorganization among MidCon
Corp., Occidental Petroleum Corporation, a California corporation, and OPCO
Acquisition Corp., dated December 31, 1985, (c) the Stock Purchase Agreement By
and Among Diamond Shamrock Corporation, Occidental Petroleum Corporation,
Occidental Chemical Holding Corporation and Oxy-Diamond Alkali Corporation dated
September 4, 1986, or (d) the Agreement and Plan of Reorganization and Merger by
and among Occidental Petroleum Corporation, Canaan Mining Company, and Virginia
Electric and Power Company dated September 15, 1986, shall become a Participant,
in the case of Eligible Employees subject to agreement (a) above, as of April
30, 1986; in the case of Eligible Employees subject to agreement (b) above, as
of January 1, 1987; in the case of Eligible Employees subject to agreement (c)
above, as of September 4, 1986; and in the case of Eligible Employees subject to
agreement (d) above, as of September 15, 1986.
For purposes of the Plan, an individual on whose behalf amounts are transferred
to the Plan pursuant to section 9.14 shall be deemed a Participant for all
purposes with respect to such amounts, but in no event shall such Participant be
eligible for any contributions hereunder unless such individual becomes an
Eligible Employee and satisfies the requirements of this section 3.1.
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.
16
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 Personal 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.
(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
17
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(dd).
(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:
Beatrice Pocahontas Company
Bird Coal Company
Black Lode Coal Co., Inc.
Cain Chemical Inc.
Cities Service Company
Curtis Bay Company
Diamond Shamrock Chemicals Company
ENOXY Coal, Inc.
ENOXY Coal Sales, Inc.
Equistar Chemicals, LP
Garden Creek Gas Company
Garden Creek Pocahontas Company
Island Creek Coal Company
18
Island Creek Coal Sales Company
Island Creek Corporation
Island Creek of China Coal Ltd.
Island Creek Pocahontas Company
Kentucky-Ohio Transportation Co.
Laurel Run Mining Company
MidCon Corp.
Occidental Permian Ltd.
Oxy Vinyls, LP
Sheridan Enterprises, Inc.
Tenneco Polymers, Inc.
Twin Branch Coal Company
Twin River Coal Company
Vail Mining Company
Virginia Pocahontas Company
Welco Mining Company
provided, however, that any Employee who was eligible to participate in this
Plan or in the Employees Thrift Plan of Cities Service Company at any time prior
to January 1, 1984, or in the Employees Thrift Plan of Island Creek Coal Company
prior to April 1, 1984, shall, as of January 1, 1984, be entitled to credit for
the greater of the amount of Service determined above or the vesting service he
had under such plan during any such period of eligibility, plus one additional
year of Service under this section. In the case of those certain Eligible
Employees who were hired on or about March 21, 1986 as a result of the Agreement
of Purchase and Sale between Tenneco Polymers, Inc. and Occidental Chemical
Corporation, Service shall be credited for all service recognized under the
Tenneco Inc. Thrift Plan. In the case of those certain Eligible Employees who
were hired on or about June 12, 1987 as a result of the Agreement of Purchase
and Sale between Shell Oil Company and Occidental Electrochemicals Corporation,
Service
19
shall be credited for the period of time during which an employment relationship
existed between those Eligible Employees and Shell Oil Company. In the case of
Participants who were participants in the Cain Chemical Inc. Savings and
Investment Plan, Service shall include any service recognized under that plan
for the purpose of determining vesting in employer contributions. In the case of
those certain Eligible Employees who were hired on or about September 29, 1989
as a result of the Asset Purchase Agreement between Occidental Chemical
Corporation and BTL Specialty Resins Corp., Service shall be credited for all
service recognized under the BTL Specialty Resins Corp. Salaried Employees'
Pension Plan. In the case of those certain Eligible Employees who were hired on
or about December 13, 1989 as a result of the Agreement and Contract of Sale by
and between Smackover Shell Limited Partnership, OXY NGL Inc., and Prairie Alba
Company, Service shall be credited for all service recognized under the Shell
Pension Plan. In the case of those Eligible Employees who were considered to be
"Employees Hired by Purchaser" as defined in section 9.2 of the Asset Purchase
Agreement dated as of December 30, 1992 between Occidental Chemical Corporation
and Monsanto Company ("Monsanto"), Service shall be credited for the period
during which each such Eligible Employee was employed by Monsanto. In the case
of those Eligible Employees who were "Employees" as defined in Section 6.7(a) of
the Exchange Agreement among Occidental Petroleum Corporation, Placid Oil
Company and the Stockholders of Placid Oil Company dated November 22, 1994,
Service shall be credited for the period during which each such Eligible
Employee was employed by Placid Oil Company or its subsidiaries or affiliates,
as provided in Section 6.7(c) of such exchange agreement. In the case of those
Eligible Employees who were "Employees" as defined in Section 5.5(a) of the
Agreement of Merger by and among Laurel Industries, Inc., Occidental Petroleum
Corporation and Oxy Acquisition Corp. dated August 5, 1996, Service shall be
credited for the period during which each such Eligible Employee was employed by
Laurel Industries, Inc., as provided in Section 5.5(d) of such agreement. In the
case of those Eligible Employees who were "Employees" as defined in Section
6.7(a) of the Agreement and Plan of Merger among Occidental Petroleum
Corporation, OPC Acquisition
20
Corp., Helmerich & Payne, Inc. and Natural Gas Odorizing, Inc. dated August 23,
1996, Service shall be credited for the period during which each such Eligible
Employee was employed by Natural Gas Odorizing, Inc. or Helmerich & Payne, Inc.,
as provided in Section 6.7(d) of such agreement. In the case of those Eligible
Employees who were "Transferred Employees" as defined in Section 6.6(b) of the
Asset Purchase Agreement between and among Power Silicates Manufacturing, Inc.,
as "Seller," and Occidental Chemical Corporation, as "Buyer" dated August 30,
1996, Service shall be credited for the period during which each such Eligible
Employee was employed by Power Silicates Manufacturing, Inc., as provided in
Section 6.6(d) of such agreement. In the case of those individuals who were
employed by Thums Long Beach Company on April 24, 2000, Service shall be
credited for the period during which each such individual was employed by Thums
Long Beach Company prior to that date.
In the case of those Employees who were employees of INDSPEC Chemical
Corporation on August 29, 1999, Service shall be credited for the period of time
during which each such Employee was employed by INDSPEC Chemical Corporation.
Additionally, with respect to the Employees described in the previous sentence,
Service shall be credited for any period of time for which service was credited
as of August 29, 1999 under paragraph 1.73 of The Employee Savings Plan of
INDSPEC Chemical Corporation, as amended as of that date, provided that Service
shall not be credited under this sentence for any period of time for which
Service was credited under the previous sentence.
In the case of those Employees who were employees of Altura Energy Ltd. on April
19, 2000, or at any time prior thereto, Service shall be credited for the period
during which an employment relationship existed between each such Employee and
the following entities, irrespective of whether the entity was an Affiliate at
the time the employment relationship existed: Altura Energy Ltd., Amoco D.T.
Company, Amoco X.T. Company, Amoco Y.T. Company, Shell Everest, Inc., Shell K2,
Inc., Shell Land & Energy Company, Shell Onshore Ventures Inc., and
21
SWEP1 LP. Additionally, with respect to the Employees described in the previous
sentence, Service shall be credited for any period of time for which service was
credited under the final paragraph of section 1.32 of the Altura Energy Ltd.
Cash Balance Retirement Plan, Effective March 1, 1997, provided that Service
shall not be credited under this sentence for any period of time for which
Service was credited under the previous sentence.
In the case of those Employees who were employees of Amoco Production Company
and whose primary place of duties on December 3, 2000 was the Bravo Dome gas
unit, Service shall be credited for the period during which an employment
relationship existed between each such Employee and Amoco Production Company.
Additionally, with respect to the Employees described in the previous sentence,
Service shall be credited for any period of time for which service was credited
for vesting purposes under the BP Amoco Retirement Accumulation Plan, effective
July 1, 2000, provided that Service shall not be credited under this sentence
for any period of time for which Service was credited under the previous
sentence.
Notwithstanding the foregoing provisions of this section, in the case of those
former Participants who were employed by Trident NGL Inc. pursuant to the
"Agreement on Employment, Employee Benefits and Wages" dated as of August 30,
1991 between OXY USA Inc. and Trident NGL Inc., Service shall be credited for
the period during which such former Participant remains employed by Trident NGL
Inc.
Notwithstanding the foregoing provisions of this section, in the case of those
former Eligible Employees who were hired on July 1, 1992 by Treatek-CRA Company
("Treatek-CRA"), Service shall be credited for the period during which each such
former Eligible Employee remains employed by Treatek-CRA.
22
In the case of any Eligible Employee who is hired by the Company or an Affiliate
immediately after his being an employee of Oxy Vinyls, LP or any subsidiary
thereof, Service shall be credited for the period of time for which such
Eligible Employee was entitled to service credit under the Oxy Vinyls, LP
Savings Plan at the time of his being hired by the Company or an Affiliate,
provided that Service shall not be credited under this paragraph for any period
of time during which Service is credited under any other paragraph of this
section 3.4.
23
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 15 percent (1 percent
to 20 percent in the case of Participants who are members of United Steelworkers
of America, Local 13300) 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.
24
A Participant may suspend his Pretax Deferrals, After-Tax Contributions and
Adjustment Contributions by giving notice in accordance with procedures
established by the Administrative 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) $35,000 (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
25
(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 $10,500 (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:
26
(A) One and one-quarter times the ADP for the current Plan Year of the
group of all other Eligible Employees; or
(B) 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.
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
(b) has Highly Compensated Test Compensation during the preceding Plan
Year of more than $85,000 (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 $85,000 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:
27
(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).
(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.
28
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) One and one-quarter times the ACP for the current Plan Year of the
group of all other Eligible Employees; or
(B) 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.
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
29
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.
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:
30
(1) For Plan Years beginning before January 1, 1997, the Highly
Compensated Employee who elected the highest percentage of such
contributions; and
(2) For Plan Years beginning after December 31, 1996, 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 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:
31
(1) For Plan Years beginning before January 1, 1997, the Highly
Compensated Employee who elected the highest percentage of such
contributions; and
(2) For Plan Years beginning after December 31, 1996, 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.
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
32
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.
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,
33
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.
34
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 pay period (other than a Participant who is a member of United
Steelworkers of America Local 13300) shall be entitled to an additional
allocation equal to 100 percent (50% in the case of each Participant who is a
member of United Steelworkers of America Local 336 and 75% in the case of each
Participant who is a member of United Steelworkers of America Local 14734) of
the contributions under section 4.1 and section 4.9 allocable to him for the pay
period, 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.
35
5.4 Forfeitures. The Administrative Committee shall use forfeitures
occurring in any processing period to reduce Employer matching contributions for
such processing period and future processing periods. 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 amount of forfeitures occurring in a processing period exceeds the amount of
matching allocations to be made for such processing period, then the excess
shall be held in a suspense account and allocated in lieu of Employer matching
contributions in succeeding pay periods. 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) $35,000, 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
36
(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).
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 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.
5.9 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.
37
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.
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
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.
38
Notwithstanding the foregoing provisions of this section 6.1, the following
special vesting provisions shall apply.
Each Participant who is an "Employee" as that term is defined in that certain
agreement dated March 20, 1987 between Occidental Electrochemicals Corporation
and Ecolab, Inc. shall be fully vested in his Matching Account effective as of
March 25, 1987.
Each Participant who is an "Employee" as that term is defined in that certain
agreement dated December 9, 1986 between Oxy-Diamond Holding Corporation and
Henkel Corporation shall be fully vested in his Matching Account effective as of
April 3, 1987.
Each Participant who is a "Salaried Employee" as defined in section 12.01(b) of
that certain agreement dated January 8, 1988 between Occidental Chemical
Corporation and Franklin-Burlington Plastics, Inc. shall be fully vested in his
Matching Account effective as of January 8, 1988.
Each Participant who becomes an employee of Armand Hammer Museum of Art and
Cultural Center Inc. immediately upon his Separation from Service shall
thereupon become fully vested in his Matching Account.
Each Participant who was an Employee of Kentucky-Ohio Transportation Co. and who
Separated from Service as a result of the November 9, 1990 sale of the
Wheelersburg, Ohio terminal shall be fully vested in his Matching Account
effective as of that date.
Each Participant who was a "Transferred Employee" as defined in the Agreement of
Purchase and Sale between Occidental Chemical Corporation and American Mirrex
Corporation dated
39
February 28, 1992 shall be fully vested in his Personal Savings Account
effective as of March 25, 1992.
Each Participant who is described in section 10(j) of the Asset Purchase
Agreement Dated as of March 3, 1993 Among American Ref-Fuel Company of Niagara,
L.P., as Purchaser, and Occidental Chemical Corporation and Hooker Energy
Corporation, as Sellers, shall be fully vested in his Personal Savings Account
effective as of May 5, 1993.
Each Participant who is an "Included Salaried Employee" as defined in section
3.4(c) of the Stock Purchase Agreement by and between Glenn Springs Holdings,
Inc. and CONSOL Inc. and CONSOL Energy Inc. dated April 14, 1993 shall be fully
vested in his Personal Savings Account effective as of the Closing thereof.
Each Participant who is a "Transferred Employee" as defined in Section 9.1(c) of
the Asset Transfer Agreement between Occidental Chemical Corporation as Seller
and Borden Chemicals and Plastics Operating Limited Partnership as Buyer Dated
as of August 12, 1994 shall be fully vested in his Personal Savings Account as
of the Closing Date thereof.
Each Participant who is a "Salaried Employee" as defined in Section 9.1(b) of
the Asset Transfer Agreement between Occidental Chemical Corporation as Seller
and Ozite Corporation as Purchaser Dated as of September 29, 1994 shall be fully
vested in his Personal Savings Account as of the Closing Date thereof.
Each Participant who is an "Offered Employee" as defined in Section 8.1(a) of
the Asset Purchase Agreement between Occidental Chemical Corporation and
Lyondell Petrochemical Company dated April 13, 1995 shall be fully vested in his
Personal Savings Account as of the Closing Date thereof.
40
Each Participant who is a "Salaried Employee" as defined in Section 6.7(a) of
the Stock Purchase Agreement dated as of September 11, 1995 between Phosphate
Holding Company, Inc. "Purchaser" and Occidental Chemical Corporation "Seller"
shall be fully vested in his Personal Savings Account as of the Closing Date
thereof.
Each Participant who is a "Transferred Salaried Employee" or a "Union Employee",
as those terms are defined in Section 5.24 of the Asset Purchase Agreement By
and Between OCC Tacoma, Inc. as Seller and Pioneer Companies, Inc. as Purchaser
dated as of May 14, 1997, shall be fully vested in his Personal Savings Account
as of the Closing Date thereof.
Each Participant who is a "Covered Employee" as that term is defined in
paragraph I(f) of the Employee Transfer Agreement by and among Occidental
Chemical Corporation, CXY Chemicals, U.S.A., and CXY Chemicals U.S.A. Inc. dated
December 16, 1997, shall be fully vested in his Personal Savings Account as of
the Covered Employee's CXY Employment Date, as determined under such agreement.
Each Participant who is a "Partnership Employee" as defined in Section 2.8(a) of
the Agreement and Plan of Merger and Asset Contribution among Occidental
Petrochem Partner 1, Inc., Occidental Petrochem Partner 2, Inc., Oxy
Petrochemicals Inc., PDG Chemical Inc. and Equistar Chemicals, LP Dated May 15,
1998, shall be fully vested in his Personal Savings Account as of June 1, 1998.
Each Participant who is a "Hired Employee" as defined in section 1.13 of the
Stock Purchase Agreement between Occidental Chemical Holding Corporation and
Eltech Systems Corporation dated April 15, 1999 shall be fully vested in his
Personal Savings Account as of April 15, 1999.
41
Each Participant who is an "Employee" as that term is defined in Appendix A to
the Master Transaction Agreement between The Geon Company and Occidental
Chemical Corporation dated December 22, 1998 and who becomes an employee of Oxy
Vinyls, LP on May 1, 1999 shall be fully vested in his Personal Savings Account
as of April 30, 1999.
Each Participant who is an "Employee" as that term is defined in Section 5.4 of
the Asset Purchase and Sale Agreement (Burlington) dated as of April 30, 1999
between Occidental Chemical Corporation, as the Seller and The Geon Company, as
the Buyer, shall be fully vested in his Personal Savings Account as of April 30,
1999.
Each Participant who is an "Assumed Employee" as that term is defined in Section
8.5(a) of the Asset and Partnership Interest Purchase Agreement, dated as of
October 31, 2000, by and among Sumikon Specialties Corp., a Delaware
corporation, Sumitomo Bakelite Co., Ltd., a Japanese corporation, and Occidental
Chemical Corporation, a New York corporation, shall be fully vested in his
Personal Savings Account as of January 31, 2001.
Each Participant who is a "Transferred Employee", as that term is defined in
Section 8.4(a) of the Asset Purchase Agreement by and between Occidental
Chemical Corporation, as "Seller" and Gabriel Ashtabula, L.L.C., as "Purchaser",
dated as of May 17, 2001 shall be fully vested in his Personal Savings Account
as of June 29, 2001.
Each Participant who is eligible to participate in the Occidental Petroleum
Corporation Notice and Severance Pay Plan (the "Severance Plan") and who
receives benefits thereunder shall be fully vested in his Personal Savings
Account as of the time of cessation of his receipt of benefits under the
Severance Plan. Additionally, each Participant who is entitled to receive
severance benefits pursuant to an individual agreement which provides such
benefits in lieu of the benefits
42
provided by the Severance Plan shall be fully vested in his Personal Savings
Account as of the time of cessation of his receipt of severance benefits under
such agreement.
Each Participant who is eligible to participate in the Altura Energy Ltd.
Severance Divestment Plan (or any successor plan) (the "Altura Severance Plan")
and who receives benefits thereunder shall be fully vested in his Personal
Savings Account as of the time of cessation of his receipt of benefits under the
Altura Severance Plan.
Each Participant shall have a fully vested and nonforfeitable interest in the
Rollover Account established on his behalf pursuant to section 9.14 as a result
of the merger with the MidCon Corp. ESOP.
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 Personal 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. Prior to 1997, a request for
distribution may be filed only after the earlier of (i) the Participant's
Separation from Service, or, (ii) January 1 of the calendar year in which he
attains age 70 1/2. After 1996, a request for distribution may be filed only
after the Participant's Separation from Service. If a Participant attains age 70
1/2 before 1996, or 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, provided that this
limitation shall not apply to Participants who attained age 70 1/2 before
January 1, 1988. If a Participant who is not a 5% owner attains age 70 1/2 after
1995, distribution shall be made or commenced by the Administrative Committee by
December 31 of the calendar year that the Participant Separates from Service.
43
Notwithstanding anything contained above in this section 6.2, if a Participant
who is not a 5% owner attains age 70 1/2 after December 31, 1987 and prior to
January 1, 1999, such Participant shall be entitled to elect to receive a
distribution of his Personal Savings Account, or to receive commencement of such
a distribution, at any time on or after December 31 of the year in which he
attains age 70 1/2, irrespective of whether he has incurred a Separation 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).
6.3 Forfeiture of Contingent Interests. Any portion of a Participant's
Personal 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 may be restored to his Personal Savings
Account by making a special allocation out of forfeitures. The restoration of
any amounts forfeited is based on the following provisions:
(a) Any Participant who Separated from Service less than fully vested on
or after January 1, 1982 will have his forfeitures restored upon
rehire. 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.
44
(b) Any Participant who Separated from Service less than fully vested on
or after January 1, 1981 will have his forfeitures restored, if he is
rehired on or before December 31, 1982.
(c) Any Participant who Separated from Service less than fully vested
prior to January 1, 1981 and was not rehired prior to January 1, 1984
will not be entitled to a restoration of forfeitures.
Notwithstanding the foregoing, any individual who was a participant in the
MidCon Corp. ESOP and who, prior to December 18, 1997, incurred a Separation
from Service shall, upon becoming an Employee, have the unvested portion of his
account under the MidCon Corp. ESOP, determined as of the Valuation Date
coinciding with or immediately preceding the date of such Separation from
Service, restored to a Rollover Account under the Plan. The Employer shall
restore any such amounts by making a special allocation out of forfeitures
available for reallocation in the Plan Year of the restoration, provided that if
such forfeitures are insufficient for such restoration, the Employer shall make
a special contribution in cash for purposes of such restoration. Any amount
restored to a Rollover Account under this section shall be fully vested and
nonforfeitable.
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 Personal Savings Account, the balance of said deceased
Participant's Personal 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 Personal 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,
45
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 Personal 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
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.
In the case of a Beneficiary of a Participant for whom a direct plan-to-plan
transfer was made to this Plan from the Laurel Industries Inc. Incentive Savings
Plan (the "Laurel Plan"), distribution may be made, at the election of the
Beneficiary, in any form described in section 6.6(g)(1)(ii) of the Laurel Plan
as in effect on December 31, 1996, provided that the amount subject to such
election shall not exceed the amount of the Beneficiary's Account attributable
to such transfer.
6.5 Forms of Payment. Every Participant who Separates from Service for any
reason other than death or an event described in Code section 401(k)(10)(A)
shall have the vested portion of his Personal Savings Account distributed to him
under one of the following distribution options selected by the Participant on a
form prescribed by the Administrative Committee:
46
(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
(f) Total deferral of receipt of payment of the vested portion of his
Personal 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.
A Participant who Separates from Service as a result of an event described in
Code section 401(k)(10)(A), and who would not otherwise be considered to have
Separated from Service, shall have the vested portion of his Personal Savings
Account distributed to him in one lump sum payment.
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
47
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) until the processing period following 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 Personal 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.
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
48
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 the 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 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.
49
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.
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. Such a Participant may elect to receive all or
a portion of his Account in the form of whole shares of Stock, plus cash for any
fractional share, provided that any such election shall be implemented in
accordance with administrative
50
procedures established by the Administrative Committee by transferring the
investment of such Account or portion thereof, as applicable, (including without
limitation amounts transferred from the MidCon Corp. ESOP) as soon as
practicable to the OPC Stock Fund and distributing such amounts as soon as
practicable thereafter.
In the case of a Participant for whom a direct plan-to-plan transfer was made to
this Plan from the Laurel Industries Inc. Incentive Savings Plan (the "Laurel
Plan"), distribution may be made, at the election of the Participant, in any
form described in section 6.5(b)(2) of the Laurel Plan as in effect on December
31, 1996, provided that the amount subject to such election shall not exceed the
amount of the Participant's Account attributable to such transfer.
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
51
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 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.
52
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 on or after April 1,
1988, 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 Personal 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.
6.9 Small Amounts. If the vested balance of a Participant's Personal
Savings Account is $5,000 or less when he or his Beneficiary becomes entitled to
a benefit under sections
53
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.
54
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 Personal 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
55
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.
56
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.
57
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
58
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(dd),
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.
59
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.
Except as required by law, the principal loan balance that was processed as a
deemed distribution may not subsequently be repaid to the Plan.
60
7.10 Loan Rules. The Administrative Committee shall promulgate loan rules,
which may be modified from time to time. Each Participant who applies for a loan
pursuant to this Article 7 shall be advised of the rules applicable to his loan
at the time of his application. Such loan rules, as amended from time to time,
are incorporated into and made a part of this Plan.
7.11 Discontinuance. The foregoing sections of this Article 7
notwithstanding, the Administrative Committee reserves the right to stop
granting loans to Employees at any time.
61
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
and amounts merged into the Plan pursuant to section 9.14 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, provided,
however, that elections in effect on May 31, 1990 by Participants to have
contributions invested in the Active Bond Fund (as that Investment Fund was then
defined) shall, effective as of June 1, 1990, be considered to be elections to
have contributions invested in the Investment Fund then known as the Fixed
Income Fund (now known as the Stable Value Fund), and provided further that
elections in effect on December 28, 2000 by Participants to have contributions
invested in the Asset Allocation Fund (as that Investment Fund was then defined)
shall, effective as of December 29, 2000, be considered to be elections to have
contributions invested in the Diversified Balanced Fund. 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, rollover
contributions, or amounts merged into the Plan pursuant to section 9.14 are to
be invested, such amounts shall be invested in the Stable Value Fund. Any such
election filed shall take effect as of the first Accounting Date of the pay
period following the pay period which includes the date of receipt thereof by
the Administrative Committee. Elections hereunder may be made on any Accounting
Date.
62
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 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.
63
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.
64
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 Personal Savings Accounts of Participants shall also, where
appropriate, refer to Personal 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 Personal 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
65
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
January 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 shall be ten dollars on
the first Accounting Date in 1999.
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.
66
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.
67
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
68
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
69
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 Merger of the MidCon Corp. ESOP. Effective May 15, 1998, the MidCon
Corp. ESOP shall be merged with and into the Plan and the entire interest of
each individual who was a participant in the MidCon Corp. ESOP as of May 15,
1998, shall be transferred to this Plan and held in a Rollover Account
established on behalf of each such individual. Such amounts shall be invested in
accordance with section 8.1. For the period prior to May 15, 1998, the terms of
the MidCon Corp. ESOP, as established November 20, 1996, shall apply.
70
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 Board of Directors 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
71
administration expense incurred. The Company reserves the right to charge the
Personal 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.
72
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
73
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.
74
Article 11. Administration
--------------------------
11.1 The Administrative Committee. The Plan shall be administered by an
Administrative Committee appointed by the Board of Directors. The Administrative
Committee shall be composed of as many members as the Board may appoint from
time to time, but not fewer than three members, and shall hold office at the
discretion of the Board. 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 Board 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 Board. 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
75
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
76
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 language 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.
77
Notwithstanding the foregoing, the administrative committee of the MidCon Corp.
ESOP, as appointed as set forth in section 9.10 thereof, shall continue to have
the authority to construe and interpret the MidCon Corp. ESOP and the provisions
of the Plan relating to amounts transferred to the Plan pursuant to section 9.14
hereof, and to supply all omissions from, correct deficiencies in, and resolve
ambiguities in such language and related trusts; to decide all questions
(including without limitation questions of fact) of eligibility and determine
the amount, manner, and time of payment of any benefits under the MidCon Corp.
ESOP; to determine the rights of any person to an allocation and the amount
thereof thereunder; and to continue to administer the Benefits Claims Procedures
under section 9.18 thereof.
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
78
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 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
79
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 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
80
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: Occidental Petroleum Corporation, Attention: Pension
and Retirement Plan Administrative Committee, 10889 Wilshire Blvd., Los Angeles,
CA 90024. 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 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.
81
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 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.
No legal action may be commenced prior to the completion of the benefit claims
procedure described herein. In addition, no legal action may be commenced after
the later of (i) 180 days after receiving the written response of the
Administrative Committee to an appeal, or (ii) 365 days after an applicant's
original application for benefits.
82
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.
83
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 Board of Directors. 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 Board of Directors 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,
84
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.
The following transfers of assets and liabilities to the Plan from the
Occidental Chemical Corporation Savings and Investment Plan were authorized by
the Company and Occidental Chemical Corporation, a subsidiary of the Company and
the sponsor of the Occidental Chemical Corporation Savings and Investment Plan:
Union Local of Participants
Whose Accounts Were Transferred Location Date of Transfer
- ------------------------------- -------- ----------------
United Steelworkers Local 336 Pottstown, PA April 30, 2001
United Teamsters Local 560 Jersey City, NJ July 31, 2001
United Steelworkers Local 14734 Cincinnati, OH September 30, 2001
National Hooker Employees Union Niagara Falls, NY December 31, 2001
United Steelworkers Local 2154-03 Chicago, IL December 31, 2001
IFPTE Local 57 Niagara Falls, NY December 31, 2001
85
All assets and liabilities held by the Occidental Chemical Corporation Saving
and Investment Plan on December 31, 2001 were merged on that date into the Plan.
12.5 Participating Affiliates. The Board of Directors 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.
86
Article 13. Top-Heavy Provisions
--------------------------------
13.1 Application of Top-Heavy Provisions. If in any Plan Year after 1983
(i) the sum of the Personal Savings Account balances of Participants who are
"Key Employees" for such Plan Year exceeds 60 percent of the sum of Personal
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 $70,000 (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
$35,000 (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.
87
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 Personal 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
88
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 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 account balance in a defined
contribution plan will include any amount distributed to a Participant or
Beneficiary within the five year period ending on the determination date, but
shall not include a rollover initiated by the Employee and made after December
31, 1983. 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 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 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.
89
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
90
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.
91
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
California 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.
* * *
92
APPENDIX I
PARTICIPATION AND VESTING FOR CERTAIN EMPLOYEES
UNDER GLENN SPRINGS SALE AGREEMENT
Effective as of the Closing thereof, Participants (including Participants who
are receiving short-term disability payments made directly by an Employer, or
pursuant to a plan maintained by an Employer) who are Included Salaried
Employees as defined in section 3.4(c) of the Stock Purchase Agreement by and
between Glenn Springs Holdings, Inc. and CONSOL Inc. and CONSOL Energy Inc.
dated April 14, 1993 (the "Agreement") shall cease to be Participants in the
Plan.
Such Participants shall be fully vested in their Personal Savings Accounts
effective as of the Closing.
Additionally, effective as of the Closing, Inactive Participants who are
employed by a subsidiary of Glenn Springs Holdings, Inc. on the Closing shall be
fully vested in their Personal Savings Accounts.
Effective as of the Closing, Participants who are Excluded Employees as defined
in section 3.4(a) of the Agreement shall be fully vested in their Personal
Savings Accounts.
For the purpose of this Appendix I and section 6.1, the term "Closing" shall
have the meaning set forth in section 9.1 of the Agreement.
93
* * * * *
IN WITNESS WHEREOF, Occidental Petroleum Corporation has caused this amended and
restated Plan to be executed this ___________ day of
____________________________, 200__.
OCCIDENTAL PETROLEUM CORPORATION
By___________________________
Its___________________________
94