AMENDED AND RESTATED
VALERO ENERGY CORPORATION
SUPPLEMENTAL EXECUTIVE RETIREMENT PLAN
(AS AMENDED AND RESTATED EFFECTIVE JANUARY 1, 1996)
AMENDED AND RESTATED
VALERO ENERGY CORPORATION
SUPPLEMENTAL EXECUTIVE RETIREMENT PLAN
TABLE OF CONTENTS
Section
ARTICLE I -- DEFINITIONS
Accrued Benefit. . . . . . . . . . . . . . . . . . . . . . . . . .
Actuarial Equivalent or Actuarially Equivalent Basis . . . . . . .
Board of Directors . . . . . . . . . . . . . . . . . . . . . . . .
Change of Control. . . . . . . . . . . . . . . . . . . . . . . . .
Code . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Company. . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Committee. . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Covered Compensation . . . . . . . . . . . . . . . . . . . . . . .
Credited Service . . . . . . . . . . . . . . . . . . . . . . . . .
Eligible Earnings. . . . . . . . . . . . . . . . . . . . . . . . .
Final Average Compensation . . . . . . . . . . . . . . . . . . . .
Monthly Covered Compensation . . . . . . . . . . . . . . . . . . .
Monthly FICA Amount. . . . . . . . . . . . . . . . . . . . . . . .
Normal Retirement Date . . . . . . . . . . . . . . . . . . . . . .
Participant. . . . . . . . . . . . . . . . . . . . . . . . . . . .
Plan . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Plan of Deferred Compensation. . . . . . . . . . . . . . . . . . .
Plan Year. . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Retirement . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Rules . . . . .
Securities Act . . . . . . . . . . . . . . . . . . . . . . . . . .
Subsidiary . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Surviving Spouse . . . . . . . . . . . . . . . . . . . . . . . . .
Trust . . . . .
Trustee. . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Valero . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Valero Pension Plan. . . . . . . . . . . . . . . . . . . . . . . .
Valero Pension Plan Benefit. . . . . . . . . . . . . . . . . . . .
Voting Securities. . . . . . . . . . . . . . . . . . . . . . . . .
ARTICLE II - ELIGIBILITY
Initial Eligibility. . . . . . . . . . . . . . . . . . . . . . . .
Frozen Participation . . . . . . . . . . . . . . . . . . . . . . .
Renewed Eligibility. . . . . . . . . . . . . . . . . . . . . . . .
ARTICLE III - VESTING
ARTICLE IV - RETIREMENT BENEFIT
Calculation of Retirement Benefit. . . . . . . . . . . . . . . . .
Form and Time of Payment . . . . . . . . . . . . . . . . . . . . .
Modification of Pension. . . . . . . . . . . . . . . . . . . . . .
ARTICLE V - PRERETIREMENT SPOUSAL DEATH BENEFIT
Death Prior to Retirement. . . . . . . . . . . . . . . . . . . . .
Death After Participant Retires. . . . . . . . . . . . . . . . . .
Beneficiary Designation Prohibited . . . . . . . . . . . . . . . .
ARTICLE VI - PROVISIONS RELATING TO ALL BENEFITS
Effect of this Article . . . . . . . . . . . . . . . . . . . . . .
Termination of Employment. . . . . . . . . . . . . . . . . . . . .
No Duplication of Benefits . . . . . . . . . . . . . . . . . . . .
Forfeiture For Cause . . . . . . . . . . . . . . . . . . . . . . .
Forfeiture For Competition . . . . . . . . . . . . . . . . . . . .
Expenses Incurred in Enforcing the Plan. . . . . . . . . . . . . .
No Restrictions on any Portion of Total Payments
Determined to be Excess Parachute Payments. . . . . . . . . . .
Benefits Upon Re-employment. . . . . . . . . . . . . . . . . . . .
ARTICLE VII - ADMINISTRATION
Committee Appointment. . . . . . . . . . . . . . . . . . . . . . .
Committee Organization and Voting. . . . . . . . . . . . . . . . .
Powers of the Committee. . . . . . . . . . . . . . . . . . . . . .
Committee Discretion . . . . . . . . . . . . . . . . . . . . . . .
Reimbursement of Expenses. . . . . . . . . . . . . . . . . . . . .
Reliance Upon Information. . . . . . . . . . . . . . . . . . . . .
Approval of Benefit Modifications. . . . . . . . . . . . . . . . .
ARTICLE VIII - ADOPTION BY SUBSIDIARIES
Procedure for and Status After Adoption. . . . . . . . . . . . . .
Termination of Participation By Adopting Subsidiary. . . . . . . .
ARTICLE IX - AMENDMENT AND/OR TERMINATION
Amendment or Termination of the Plan . . . . . . . . . . . . . . .
No Retroactive Effect on Awarded Benefits. . . . . . . . . . . . .
Effect of Change of Control. . . . . . . . . . . . . . . . . . . .
Effect of Termination. . . . . . . . . . . . . . . . . . . . . . .
ARTICLE X - FUNDING
Payments Under This Plan are the Obligation
of the Company . . . . . . . . . . . . . . . . . . . . . . . . .
Plan May Be Funded Through Life Insurance
Owned by the Company or a Rabbi Trust. . . . . . . . . . . . . .
Required Funding of Rabbi Trust. . . . . . . . . . . . . . . . . .
Reversion of Excess Assets . . . . . . . . . . . . . . . . . . . .
Repurchase of Valero Stock . . . . . . . . . . . . . . . . . . . .
Participants Must Reply Only on General
Credit of the Company . . . . . . . . . . . . . . . . . . . . .
ARTICLE XI - MISCELLANEOUS
Responsibility for Distributions and
Withholding of Taxes . . . . . . . . . . . . . . . . . . . . . .
Limitation of Rights . . . . . . . . . . . . . . . . . . . . . . .
Arbitration of Disputes. . . . . . . . . . . . . . . . . . . . . .
Distributions to Incompetents. . . . . . . . . . . . . . . . . . .
Nonalienation of Benefits. . . . . . . . . . . . . . . . . . . . .
Severability . . . . . . . . . . . . . . . . . . . . . . . . . . .
Notice . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Gender and Number. . . . . . . . . . . . . . . . . . . . . . . . .
Governing Law. . . . . . . . . . . . . . . . . . . . . . . . . . .
Effective Date . . . . . . . . . . . . . . . . . . . . . . . . . .
AMENDED AND RESTATED
VALERO ENERGY CORPORATION
SUPPLEMENTAL EXECUTIVE RETIREMENT PLAN
WHEREAS, Valero Energy Corporation and several of its subsidiaries
have established the Valero Energy Corporation Supplemental Executive
Retirement Plan originally effective January 1, 1983 which provides for
certain highly compensated management personnel a supplement to their
Retirement pay so as to retain their loyalty and to offer a further incentive
to them to maintain and increase their standard of performance; and
WHEREAS, Valero Energy Corporation retained the right of the Board of
Directors to amend the Plan at any time by an instrument in writing; and
WHEREAS, the Board of Directors has determined that the Plan should
be amended and restated to further protect the Participants' benefits in the
event of a Change of Control and to clarify its intent concerning amendments
pertaining to the payment of severance benefits;
NOW, THEREFORE, Valero Energy Corporation amends and restates the
Valero Energy Corporation Supplemental Executive Retirement Plan as follows:
ARTICLE I
DEFINITIONS
All defined terms used in the Valero Pension Plan shall have the same
meaning for this Plan, except as modified below.
1.1 Accrued Benefit. "Accrued Benefit" means, as of any given date
of determination, the Retirement benefit calculated under Section 4.1 with
Final Average Compensation, but with the offsets for benefits provided by the
Valero Pension Plan and Credited Service determined as of that date.
1.2 Actuarial Equivalent or Actuarially Equivalent Basis.
"Actuarial Equivalent" or "Actuarially Equivalent Basis" means an equality in
value of the aggregate amounts expected to be received under different forms
of payment based on the same mortality and interest rate assumptions. For
this purpose, the mortality and interest rate assumptions used in computing
benefits under the Valero Pension Plan will be used. If there is no Valero
Pension Plan or successor qualified defined benefit plan, then the actuarial
assumptions to be used will be those actuarial assumptions deemed appropriate
by the actuarial firm, which last served as independent actuary for the Valero
Pension Plan prior to its termination or merger had the Valero Pension Plan
remained in existence with its last participant census.
1.3 Board of Directors. "Board of Directors" means the Board of
Directors of Valero.
1.4 Change of Control. "Change of Control" means the occurrence of
one or more of the following events:
(a) any person (excluding any employee benefit plan of Valero, any
trustee, administrator or other entity administering any such plan, and Valero
or any Subsidiary) or any partnership, limited partnership, syndicate or other
group formed for the purpose of acquiring, holding or disposing of Voting
Securities within the meaning of Rule 13(d) under the Securities Act (a
"Group") shall acquire (whether in one or more transactions) Voting Securities
of Valero that result in such person or Group directly or indirectly
beneficially owning 50% or more of the Voting Securities of Valero; or
(b) the stockholders of Valero shall approve an agreement providing
for any merger, consolidation, combination or other transaction in which,
immediately following such transaction and after giving effect thereto, either
(i) less than 50% in the aggregate of the outstanding Voting Securities of the
surviving or resulting entity are then beneficially owned by (x) the
stockholders of Valero immediately prior to such transaction, or (y) if a
record date has been set to determine the stockholders of Valero entitled to
vote on such transaction, then the stockholders of Valero as of such record
date, or (ii) a majority of the board of directors or other governing body of
the surviving or resulting entity are not persons specified in clause (c)(i)
and (ii) below; or
(c) if at any time the following do not constitute a majority or the
Board of Directors of Valero or any successor entity referred to in clause (b)
above
(i) persons who are directors of Valero on January 1, 1996; and
(ii) persons who, prior to election as a director, were
nominated, recommended or endorsed by the vote at a meeting or the written
consent of the Board of Directors of Valero (or, following the completion of a
consolidation, merger, combination or other similar transaction which does not
result in a Change of Control as defined herein, the board of directors or
governing body of the surviving or resulting entity); or
(d) the Distribution Date, as such term is defined in the Rights
Agreement, dated as of October 26, 1995, between Valero and Harris Trust and
Savings Bank, as Rights Agent, shall have occurred, and the Rights distributed
thereunder shall have become exercisable, pursuant to Section 11(a)(ii) or
Section 13 of such Rights Agreement, to purchase either shares of Valero
Common Stock or common shares of another Person (as such term is defined in
such Rights Agreement); or
(e) the stockholders of Valero shall approve an agreement providing
either for the liquidation of Valero or for the sale or transfer of assets or
earning power of Valero or one or more of its Subsidiaries, in one or more
transactions, aggregating more than 50% of the assets or earning power of
Valero and its Subsidiaries, taken as a whole , to any other Person (other
than to Valero or one or more Subsidiaries and/or to one or more Persons which
will be Subsidiary after giving effect to such transaction).
In the event the Company employing a Participant ceases to be a
Subsidiary of Valero, or otherwise terminates participation in the Plan, and
such Participant's participation in the Plan is not thereupon promptly
continued through employment by another Company, a "Change of Control" shall
be deemed to have occurred with respect to such Participant (but not with
respect to other Participants not similarly situated) and such Participant
shall be entitled to the rights and benefits under the Plan accruing upon a
Change of Control. The provisions of this paragraph shall not apply to a
Participant who is Retired or otherwise not employed by such Company at such
date of termination.
By resolution of the Committee, the figure "50%" appearing in clauses
(a), (b), and (e) may be changed to not less than 30%.
1.5 Code. "Code" means the Internal Revenue Code of 1986, as
amended from time to time.
1.6 Company. "Company" means Valero and any Subsidiary adopting the
Plan.
1.7 Committee. "Committee" means the committee administering this
Plan as determined pursuant to Section 7.1.
1.8 Covered Compensation. "Covered Compensation" means the average
(without indexing) of the Taxable Wage Base for the 35 calendar years ending
with the calendar year in which a Participant attains social security
retirement age (as defined in Section 415(b)(8) of the Code). A 35-year
period shall be used for all Participants regardless of the year of birth of
such Participant. In determining a Participant's Covered Compensation prior
to the Participant attaining social security retirement age, it shall be
assumed that the Taxable Wage Base in effect at the beginning of the Plan Year
in which such determination is made will remain constant for all future years.
1.9 Credited Service. "Credited Service" means a Participant's
continuing period of employment with a Company (whether or not contiguous),
commencing on the first day for which such Participant is paid, or entitled to
payment, for the performance of duties with a Company and terminating with the
Participant's final cessation of participation in the Plan. With respect to
any full calendar year in which a Participant receives Eligible Earnings in
each payroll period as an active employee, he shall be credited with one year
of Credited Service. With respect to any partial calendar year in which a
Participant receives Eligible Earnings as an active employee (such as the
calendar year in which employment commences or participation ceases) he shall
be credited with a fraction of a year of Credited Service in proportion to the
number of payroll periods during such calendar year that he received Eligible
Earnings as an active employee bears to the total number of payroll periods
during such year. All partial years of Credited Service shall be aggregated
so that a Participant receives credit for all periods of employment regardless
of whether the Credited Service is interrupted. Credited Service shall also
include, and a Participant shall be credited with, such additional periods of
time, if any, as may have been agreed upon by the Participant and a Company in
connection with the Participant's employment, termination or otherwise.
1.10 Eligible Earnings. "Eligible Earnings" means all compensation
paid or payable by a Company to the employee in the form of base salary or
wages and bonuses (whether paid or payable in cash or securities or any
combination thereof), including therein any amounts of such base salary or
wages and bonuses earned which, at the employee's election, in lieu of a cash
payment to him, are contributed to a Plan of Deferred Compensation maintained
by the Company. During a leave of absence from work, with or without pay,
such as disability leave of absence or personal leave of absence, the
Participant's base rate of pay in effect immediately prior to the leave of
absence and his most recent bonus amount earned shall be used in computing his
Eligible Earnings.
1.11 Final Average Compensation. "Final Average Compensation" means
a Participant's average monthly Eligible Earnings from any Company for the
thirty-six consecutive calendar months that give the highest average monthly
rate of Eligible Earnings for the Participant out of all calendar months next
preceding the earliest of: (a) the date upon which a Participant becomes
ineligible for participation in this Plan pursuant to Section 2.2, (b) a
Change of Control, (c) the latest of (i) the Participant's termination for
total disability or (ii) his Retirement, or (d) the termination of the Plan.
1.12 Monthly Covered Compensation. "Monthly Covered Compensation
means the quotient resulting from dividing Covered Compensation by 12.
1.13 Monthly FICA Amount. "Monthly FICA Amount" means the quotient
resulting from dividing by 12 the Taxable Wage Base in effect or assumed to be
in effect at the beginning of the calendar year in which a Participant attains
social security retirement age (as defined in Section 415(b)(8) of the Code).
1.14 Normal Retirement Date. "Normal Retirement Date" means the
first day of the month coincident with or next following the date on which the
Participant attains the age of 65 years.
1.15 Participant. "Participant" means either (a) an employee of a
Company who is eligible for and is participating in the Plan or (b) a former
employee of a Company who is receiving, or is eligible to receive benefits
under the Plan.
1.16 Plan. "Plan" means the Valero Energy Corporation Supplemental
Executive Retirement Plan as set forth in this document, as amended from time
to time.
1.17 Plan of Deferred Compensation. "Plan of Deferred Compensation"
means the Valero Energy Corporation Executive Deferred Compensation Plan, the
Valero Energy Corporation Key Employee Deferred Compensation Plan, and any
contributions made under a salary reduction agreement to a Code Section 125
cafeteria plan or Code Section 401(k) cash or deferral arrangement maintained
by the Company.
1.18 Plan Year. "Plan Year" means the calendar year.
1.19 Retirement. "Retirement", "Retirees, "Retire" or "Retired"
means the Retirement of a Participant from any Company either (a) early, as of
the first day of any month coincident with or next following: (i) with respect
to a Participant in the active employment of the Company who has attained the
age of 55 years and completed five (5) years of Credited Service, the date
such Participant retires from the service of the Company prior to his
attainment of age 65; or (ii) subject to the provisions of Article III, with
respect to a Participant whose service is terminated prior to his attainment
of age 55 and who has completed five (5) years of Credited Service, the date
on which such Participant elects to commence receipt of his Valero Pension
Plan Benefit on or after his attainment of age 55 and prior to his attainment
of age 65; or (b) upon his Normal Retirement Date.
1.20 Rules. "Rules" means the Commercial Arbitration Rules of the
American Arbitration Association.
1.21 Securities Act. "Securities Act" means the Securities Exchange
Act of 1934, as amended from time to time.
1.22 Subsidiary. "Subsidiary" means (i) any corporation 50% or more
of whose stock having ordinary voting power to elect directors (irrespective
of whether or not at the time stock of any class or classes of such
corporation shall have or might have voting power by reason of the happening
of any contingency) is at the time owned, directly or indirectly, by Valero,
and (ii) any partnership, association, joint venture or other entity in which
Valero, directly or indirectly, has a 50% or greater equity interest at the
time.
1.23 Surviving Spouse. "Surviving Spouse" means the spouse of a
Participant who is eligible to receive a Qualified Preretirement Survivor
Annuity benefit under the Valero Pension Plan.
1.24 Trust. "Trust" or "Trust Agreement" shall mean the Valero
Energy Corporation Supplemental Executive Retirement Plan Trust as is created
by the terms and conditions of said Trust and as may be amended from time to
time.
1.25 Trustee. "Trustee" means collectively one or more persons or
corporations with trust power which have been appointed by Valero and have
accepted the duties of Trustee of the Trust and any and all successor or
successors appointed by Valero or its successor(s).
1.26 Valero. "Valero" means the Valero Energy Corporation, the
sponsor of this Plan, and its successors.
1.27 Valero Pension Plan. "Valero Pension Plan" means the Valero
Energy Corporation Pension Plan, a defined benefit plan qualified under
Section 401(a) of the Code, as it may be amended from time to time and any
successor qualified defined benefit plan.
1.28 Valero Pension Plan Benefit. "Valero Pension Plan Benefit"
means the amount of monthly benefit payable from the Valero Pension Plan which
(i) in the case of an unmarried Participant, is based upon a lifetime annuity
payable to such Participant pursuant to the provisions of Article 4 of the
Valero Pension Plan as executed on December 30, 1994, or any successor
provision; or, (ii) in the case of a married Participant, is based upon a
joint and survivor pension of Actuarially Equivalent Value to the pension
otherwise payable to such Participant for life pursuant to the provisions of
Article 4 of the Valero Pension Plan as executed on December 30, 1994, or any
successor provision.
1.29 Voting Securities. "Voting Securities" means with respect to
any corporation or other entity, the common stock or any other security of
such person ordinarily entitled to vote for directors (or other governing
body) of such corporation or entity, and any debt or equity security
convertible into or exchangeable or exercisable for a security so entitled to
vote. In calculating the percentage of Voting Securities owned by a person or
Group, securities that are immediately convertible, or by their terms upon the
occurrence of any event or the lapse of time, or both, will become convertible
into or exchangeable or exercisable for securities so entitled to vote shall
be deemed to represent the number of shares of common stock or other voting
securities into which such securities are then or will become ultimately
convertible or for which they are or will ultimately become exchangeable or
exercisable, and the total number of issued and outstanding shares of common
stock (or other voting securities) shall be determined on a pro forma basis
after giving effect to such conversion, exchange or exercise. The percentage
of Voting Securities held by a person or Group shall be deemed to be equal to
the percentage of the number of votes that could be cast for the election of
directors (or other governing body) that such person or Group would be
entitled to so cast after giving effect to the provisions of the preceding
sentence. As used herein, the term "person" shall include any individual,
corporation, partnership, firm or other entity.
ARTICLE II
ELIGIBILITY
2.1 Initial Eligibility. An employee shall become a Participant in
the Plan as of the date he is selected and named in the minutes of the
Committee for inclusion as a Participant in the Plan.
2.2 Frozen Participation. If an employee who is a Participant later
becomes ineligible to continue to participate but still is employed by an
adopting Company, his Accrued Benefit will be frozen as of the last day of the
Plan Year prior to the Plan Year during which he initially became ineligible
to participate. He will later be entitled to that frozen Accrued Benefit,
upon Change of Control, Plan termination, Retirement or his earlier
termination of employment with all Companies with a vested interest, subject
to the requirements of Articles III and IV. The frozen Accrued Benefit will
be payable at the time and in the form set out in Article IV. The Surviving
Spouse of a Participant whose Accrued Benefit is frozen at the time of the
Participant's death shall not be entitled to any death benefit under this
Plan. A Participant whose Accrued Benefit is frozen at the time of incurring
a disability shall not accrue any further Credited Service either for accrual
or vesting purposes after the disability occurs so long as the Participant's
Accrued Benefit in this Plan is frozen. If the frozen Accrued Benefit is less
than the benefit which could otherwise be provided without this limitation,
then the benefit will not exceed the Participant's frozen Accrued Benefit.
Additionally, if any of the events described in Article VI should occur, the
Participant whose Accrued Benefit is frozen shall be subject to having his
frozen Accrued Benefit either restricted in amount or forfeited in accordance
with Article VI.
2.3 Renewed Eligibility. If an employee who is a Participant
becomes ineligible to continue to participate but remains employed by an
adopting Company and then later again becomes eligible to participate, the
Participant will be given Credited Service for the intervening period, will
have his Final Average Compensation computed as though the freeze had never
occurred, and will be treated for all purposes as though he had not had his
participation interrupted.
ARTICLE III
VESTING
Except as otherwise set forth herein, a Participant's Accrued Benefit
attributable to Credited Service prior to January 1, 1996 shall vest pursuant
to the following vesting schedule:
Participant's Years Vested Percentage
of Credited Service
Less than 5 . . . . . . . . . . . . . . . . . . . . . . . 0%
5 or more . . . . . . . . . . . . . . . . . . . . . . . 100%
Except as otherwise set forth herein, a Participant's Accrued Benefit
attributable to Credited Service on or after January 1, 1996 shall vest only
upon the occurrence of the Participant's death, disability or Retirement, and
all benefits under this Plan shall be forfeited if the Participant terminates
employment from all Companies prior to death, disability or Retirement.
The foregoing notwithstanding, a Participant's Accrued Benefit (whether
attributable to Credited Service occurring before, on or after January 1,
1996) shall vest upon the occurrence of a Change of Control, upon termination
of the Plan pursuant to Section 9.1 or if the adopting Subsidiary employing a
Participant terminates its participation in the Plan and such Participant's
participation in the Plan is not promptly continued through employment by
another adopting Subsidiary.
All Credited Service, whether occurring before or after January 1,
1996, shall be counted in determining whether an Accrued Benefit attributable
to pre-January 1, 1996 Credited Service has vested.
In addition to the benefits payable above, other than as a result of a
Change of Control, or on account of death, disability or Retirement, the
Committee may from time to time, in its sole and absolute discretion pay a
benefit greater than the vested Accrued Benefit of a Participant, such
determination to be made on a case by case basis.
ARTICLE IV
RETIREMENT BENEFIT
4.1 Calculation of Retirement Benefit. Subject to the following
provisions of this Section 4.1, the provisions of Section 4.3 and Article IX,
the monthly pension payable under the Plan shall be an amount equal to the sum
of (i) plus (ii) less (iii) where (i) equals: 1.60% of the Participant's Final
Average Compensation multiplied by his number of years of Credited Service;
and (ii) equals .35% multiplied by the product of his years of Credited
Service (not to exceed 35 years) times the excess of his Final Average
Compensation over the lesser of (a) 1.25 times his Monthly Covered
Compensation, or (b) the Monthly FICA Amount; and (iii) equals the
Participant's Valero Pension Plan Benefit. In the case of an unmarried
Participant the benefit shall be based on a lifetime annuity. In the case of
a married Participant the benefit shall be a fifty percent (50%) Qualified
Joint and Survivor Annuity pension of Actuarially Equivalent Value to the
pension otherwise payable for life hereunder. The monthly pension payable
under the Plan, as determined above, shall be further reduced by the
equivalent amount the Valero Pension Plan Benefit is increased as a result of
increases in the amount of maximum benefits payable from qualified plans in
accordance with Code Section 415 or other applicable law. A Participant who
Retires prior to this Normal Retirement Date may elect to have his monthly
pension commence on the first day of any month coincident with or following
his actual Retirement, but not later than his Normal Retirement Date. If a
Participant elects to have his monthly pension commence prior to his Normal
Retirement Date, the monthly pension payable to such Participant shall be
determined by multiplying the monthly pension otherwise payable to him by the
applicable early retirement reduction factor contained in the schedule of such
factors set forth in Section 4.3(B)(2) (or any successor provision) of the
Valero Pension Plan.
4.2 Form and Time of Payment. Monthly benefits payable under the
Plan shall be made available to the Participant with the same payment
elections as are available to the Participant under the Valero Pension Plan.
In that regard, the Committee shall furnish each Participant, on or about 180
days prior to the date on which he will have both attained age 55 and
completed five years of Credited Service, or, if earlier, the date he will
have attained age 65, a written explanation of (a) the terms and conditions of
payment provided under the form of payments as described in the Valero Pension
Plan and the optional forms of payment which may be elected in lieu thereof;
(b) the terms and conditions of payment provided under the automatic pension
as described in the Valero Pension Plan; and (c) the relative financial effect
on a Participant's total pension of an election not to take the standard and
automatic pension. In addition, the Committee shall also furnish each married
Participant at least 120 days prior to his Normal Retirement Date or as soon
as practicable after the Participant makes application for the earlier
commencement of his benefit under the Plan, a written statement of the amount
of pension which would be payable on his behalf under the standard and
automatic Qualified Joint and Survivor Annuity pension as is described in the
Valero Pension Plan; and the amount of pension otherwise payable under the
available optional forms of benefit.
4.3 Modification of Pension. The Committee shall have the right to
modify the calculation of the benefit payable as to any Participant as it may
desire from time to time; provided, however, that any such modification shall
not result in a reduction of the benefit payable below the amount set forth
above in Section 4.1. In addition, except as expressly provided for herein,
benefits payable under this Plan to any Participant shall not affect any other
right or entitlement a Participant may have by contract or otherwise. In
addition, the benefits payable to a Participant under this Plan may be
modified by written agreement entered into between the Participant and a
Company and approved pursuant to Section 7.7. If so modified, the provisions
of such written agreement shall prevail in determining such Participant's
rights and benefits under this Plan.
ARTICLE V
PRERETIREMENT SPOUSAL DEATH BENEFIT
5.1 Death Prior to Retirement. In the event that a Participant in
the Plan who has attained age 55 and completed five years of Credited Service
dies while employed by a Company but has not Retired, the Participant's
Surviving Spouse shall receive for life a Surviving Spouse benefit under the
Plan, which shall commence on the first day of the month following the date of
the Participant's death and shall be equal to fifty percent (50%) of the
amount the Participant would have received under Section 4.1 if he had Retired
early on his date of death and elected immediate commencement of his pension
on his earliest Retirement date pursuant to Section 4.2.
5.2 Death After Participant Retires. Upon the death of a
Participant at or after the Participant Retires there is no death benefit and
only the remainder of any benefit payable to the Surviving Spouse, if any,
under Section 4.1 shall be payable.
5.3 Beneficiary Designation Prohibited. Since the only death
benefit payable under the Plan is to a Surviving Spouse, no Participant shall
have the right to designate a beneficiary to receive death benefits hereunder.
ARTICLE VI
PROVISIONS RELATING TO ALL BENEFITS
6.1 Effect of This Article. The provisions of this Article will
control over all other provisions of this Plan.
6.2 Termination of Employment. Termination of employment for any
reason prior to the Participant's vesting under Article III or Article V, if
applicable, will cause the Participant and any Surviving Spouse to forfeit all
interest in and under this Plan.
6.3 No Duplication of Benefits. It is not intended that there be
any duplication of benefits. Therefore, if a Participant has met the
requirements of Article IV and has Retired, then the Participant and/or his
Surviving Spouse shall only receive a benefit under that Article. If a
Participant dies before actual Retirement, the Participant's Surviving Spouse
shall only receive a benefit, if the Surviving Spouse qualifies for one, under
Article V. But, in no event will a Participant and/or such Participant's
Surviving Spouse qualify for a benefit under both Articles IV and V.
6.4 Forfeiture For Cause. If the Committee finds, after full
consideration of the facts presented on behalf of both the Company and a
Participant, that the Participant was discharged by a Company for fraud,
embezzlement, theft, commission of a felony, proven dishonesty in the course
of his employment by a Company which damaged the Company, or for disclosing
trade secrets of a Company, the entire benefit accrued for the benefit of the
Participant and/or his Surviving Spouse will be forfeited even though it may
have been previously vested under Article III or V. The decision of the
Committee as to the cause of a former Participant's discharge and the
damage done to the Company will be final. No decision of the Committee will
affect the finality of the discharge of the Participant by the Company in any
manner. Notwithstanding the foregoing, no forfeiture should be permitted
pursuant to this Section following Plan termination or a Change of Control
unless pursuant to arbitration consistent with the provisions of Section 11.3.
6.5 Forfeiture for Competition. If at the time a distribution is
being made or is to be made to a Participant, the Committee finds after full
consideration of the facts presented on behalf of the Company and the
Participant, that the Participant at any time within two years following his
termination of employment from all Companies and without written consent of a
Company, directly or indirectly owns, operates, manages, controls or
participates in the ownership, (other than through ownership of less than 5%
of the Voting Securities of a publicly traded entity) management, operation or
control of or is employed by, or is paid as a consultant or other independent
contractor by a business which competes or at any time did compete with the
Company by which he was formerly employed in a trade area served by the
Company at the time distributions are being made or to be made and in which
the Participant had represented the Company while employed by it; and if the
Participant continues to be so engaged 60 days after written notice has been
given to him, the Committee may forfeit all benefits otherwise due the
Participant even though such benefit may have been previously vested under
Article III or V. Notwithstanding the foregoing, no forfeiture shall be
permitted pursuant to this Section following Plan termination or a Change of
Control unless pursuant to arbitration consistent with the provisions of
Section 11.3.
6.6 Expenses Incurred in Enforcing the Plan. The Company will, in
addition, pay a Participant for all legal fees and expenses incurred by him in
contesting or disputing his termination of employment by a Company or in
seeking to obtain or enforce any benefit provided by this Plan if such
termination occurs or a benefit is payable following a Change of Control.
6.7 No Restrictions on any Portion of Total Payments Determined to
be Excess Parachute Payments. Notwithstanding that any payment or benefit
received or to be received by a Participant in connection with a Change of
Control of Valero, or the termination of his employment by a Company, would
not be deductible, whether in whole or in part, by a Company or any affiliated
company, as a result of Section 280G of the Code, the benefits payable under
this Plan shall nevertheless not be reduced.
6.8 Benefits Upon Re-employment. If a former employee who is
receiving benefit payments under this Plan is re-employed by the Company, the
payment of the benefit will continue during his period of re-employment. The
re-employed former employee's benefit will not be changed as a result of his
re-employment.
ARTICLE VII
ADMINISTRATION
7.1 Committee Appointment. The members of the Compensation
Committee of the Board of Directors shall serve as the Committee; provided,
that the Board of Directors will have the sole discretion to remove any one or
more Committee members and appoint one or more replacement or additional
Committee members from time to time. Each Committee member will serve until
his or her resignation or removal.
7.2 Committee Organization and Voting. The Committee will select
from among its members a chairman who will preside at all of its meetings and
will elect a secretary without regard to whether that person is a member of
the Committee. The secretary will keep all records, documents and data
pertaining to the Committee's supervision and administration of this Plan. A
majority of the members of the Committee will constitute a quorum for the
transaction of business and the vote of a majority of the members present at
any meeting will decide any question brought before the meeting. In addition,
the Committee may decide any question by unanimous consent. A member of the
Committee who is also a Participant will not vote or act on any matter
relating solely to himself.
7.3 Powers of the Committee. The Committee will have the exclusive
responsibility for the general administration of this Plan according to the
terms and provisions of this Plan and will have all powers necessary to
accomplish those purposes, including but not by way of limitation the right,
power and authority:
(a) to make rules and regulations for the administration of this
Plan;
(b) to construe all terms, provisions, conditions and limitations of
this Plan;
(c) to correct any defect, supply any omission or reconcile any
inconsistency that may appear in this Plan;
(d) to determine all controversies relating to the administration of
this Plan, including but not limited to:
(1) differences of opinion arising between a Company and a
Participant except when the difference of opinion relates to the entitlement
to, the amount of or the method or timing of payment of a benefit affected by
a Change of Control, in which event it shall be decided only pursuant to
arbitration as set forth in Section 11.3; and
(2) any question it deems advisable to determine in order to
promote the uniform administration of this Plan for the benefit of all parties
at interest; and
(e) to delegate, without limitation, by written notice to Valero's
Chief Financial Officer, the Trustee or any other designee, powers of
investment and administration as well as those clerical and recordation duties
of the Committee, as it deems necessary or advisable for the proper and
efficient administration of this Plan.
7.4 Committee Discretion. The Committee in exercising any power or
authority granted under this Plan or in making any determination under this
Plan may use its sole discretion and judgment. Any decision made or any act
or omission by the Committee in good faith shall be final and binding on all
parties and, except as otherwise set forth in Sections 6.4, 6.5 and 7.3(d)(1),
shall not be subject to de novo review.
7.5 Reimbursement of Expenses. The Committee will serve without
compensation for their services but will be reimbursed by Valero for all
reasonable expenses properly and actually incurred in the performance of their
duties under this Plan.
7.6 Reliance Upon Information. The Committee will not be liable for
any decision or action taken in good faith in connection with the
administration of this Plan. Without limiting the generality of the
foregoing, any decision or action taken by the Committee when it relies upon
information supplied it by any officer of the Company, the Company's legal
counsel, the Company's actuary, the Company's independent accountants or other
advisors in connection with the administration of this Plan will be deemed to
have been taken in good faith.
7.7 Approval of Benefit Modifications. The Chairman of the Board
and Chief Executive Officer ("CEO") of Valero shall have authority to approve
enhancements to the Credited Service, or other modifications to the benefits,
of any Participant or prospective Participant under the Plan in connection
with the employment, retention, retirement or termination of a Participant;
provided however, that any such modification made with respect to the benefits
of the CEO or President of Valero shall be recommended to and approved by
Valero's Board of Directors.
ARTICLE VIII
ADOPTION BY SUBSIDIARIES
8.1 Procedure for and Status After Adoption. Any Subsidiary of
Valero at the date of adoption of this Plan, and any entity becoming a
Subsidiary of Valero after such date of adoption, may adopt this Plan by
appropriate action of its board of directors or other governing body. Any
power reserved under this Plan to the Company may be exercised separately by
each such Subsidiary adopting the Plan; provided, however, that powers
reserved under this Plan to the Board of Directors or the Committee shall be
exercised only by the Board of Directors of Valero or Committee thereof. Each
Subsidiary adopting the Plan delegates to Valero administrative responsibility
for the Plan. However, Valero shall allocate the costs of Plan benefits among
the Companies in any reasonable manner such that each company shall bear the
costs of participation by those Participants who are or were employees of such
Company. Each Subsidiary, by adopting this Plan, and in consideration of the
like undertakings of the other adopting Subsidiaries, agrees that the
obligations and liabilities of the Company(ies) for the payment of all
benefits hereunder shall be the joint and several obligations of each Company
adopting the Plan, not solely of the Company employing or previously employing
a Participant. Accordingly, each such adopting Subsidiary agrees that, to the
extent permitted under Section 10.4, each Participant shall have recourse and
a right of action to enforce benefits payable under this Plan against any and
all Companies contemporaneously participating in the Plan during the period of
such Participant's Credited Service.
8.2 Termination of Participation By Adopting Subsidiary. Any
Subsidiary adopting this Plan may, by appropriate action of its board of
directors, terminate its participation in this Plan. The Committee may, in
its discretion, also terminate a Subsidiary's participation in this Plan at
any time. The termination of the participation in this Plan by a Subsidiary
will not, however, affect the rights of any Participant who is working or has
worked for the Subsidiary as to benefits previously vested under Article III
of this Plan.
ARTICLE IX
AMENDMENT AND/OR TERMINATION
9.1 Amendment or Termination of the Plan. The Board of Directors
may amend or terminate this Plan at any time by an instrument in writing
without the consent of any Company.
9.2 No Retroactive Effect on Annual Benefits. No amendment will
affect the rights of any Participant to the Retirement benefit provided in
Article IV previously accrued by the Participant or will change a
Participant's rights under any provision relating to a Change of Control after
a Change of Control has occurred without his consent. However, the Board of
Directors retains the right at any time to change in any manner the Retirement
benefit provided in Article IV but only as to accruals after the date of the
amendment.
9.3 Effect of Change of Control. In the event of a Change of
Control of the Company, this Plan shall automatically terminate effective as
of the Change of Control. The Accrued Benefit of each Participant shall be
paid out in accordance with the provisions of Section 9.4, as soon as
administratively practicable following the Change of Control.
9.4 Effect of Termination. If this Plan is terminated, whether as a
result of a Change of Control or otherwise, then (i) no Surviving Spouse
benefit will be provided to the Surviving Spouse of a Participant dying on or
after such date of termination, and no further Retirement benefit will accrue,
and (ii) all Plan Participants in active employment of a Company (including
Participants whose Accrued Benefit is frozen pursuant to Section 2.2) as well
as Retired Participants shall become fully vested and the Accrued Benefit
payable to each affected current, frozen or Retired Participant shall be
determined as of such date of termination and shall be paid in an amount
Actuarially Equivalent to the affected current, frozen or Retired
Participant's Accrued Benefit payable in a lump sum payment as soon as
administratively practicable following the Plan's termination.
ARTICLE X
FUNDING
10.1 Payments Under This Plan are the Obligation of the Company. As
set forth in Section 8.1, the Company(ies) are jointly and severally liable to
pay the benefits due the Participants under this Plan; however should it fail
to do so when a benefit is due, the benefit will be paid by the Trustee of the
Trust. In any event, if the Trust fails to pay for any reason, the
Company(ies) remain jointly and severally liable for the payment of all
benefits provided by this Plan.
10.2 Plan May Be Funded Through Life Insurance Owned by the Company
or a Rabbi Trust. It is specifically recognized that any Company may, but is
not required to, purchase life insurance so as to accumulate assets sufficient
to fund the obligations of any Company under this Plan and that the Company
may, but is not required to contribute any policy or policies it may purchase
and any amount it finds desirable to the Trust or any other trust established
to accumulate assets sufficient to fund the obligations of all of the
Companies adopting this Plan. However, under all circumstances, the
Participants will have no rights to any of those policies; and, likewise,
under all circumstances, the rights of the Participants to the assets held in
the Trust will be no greater than the rights expressed in this agreement or
the Trust Agreement. Nothing contained in the Trust Agreement will constitute
a guarantee by any Company that assets of the Company transferred to the Trust
will be sufficient to pay any benefits under this Plan or would place the
Participant in a secured or priority position with respect to other creditors
should any Company become insolvent or bankrupt. The Trust Agreement as well
as any other agreement prepared to fund the Company's obligations under this
Plan must specifically set out these principles so it is clear in that Trust
Agreement that the Participants in this Plan are only unsecured general
creditors of the Company in relation to their benefits under this Plan.
10.3 Required Funding of Rabbi Trust. Although it is specifically
recognized that Participants have no secure or priority position with respect
to other creditors should any Company become insolvent or bankrupt with regard
to those assets transferred by the Company to the Trust, the Company
nevertheless agrees to fund the Trust on an actuarially sound basis so as to
ensure that at all times assets within the Trust equal or exceed the Actuarial
Equivalent of Accrued Benefits of all Participants under the Plan, assuming
the Accrued Benefits to be fully vested (whether they are or not). As of the
end of each Plan Year, the Company shall cause the actuary who last performed
the annual actuarial evaluation of the Valero Pension Plan, to determine the
Actuarial Equivalent of the Accrued Benefits of all Plan Participants,
assuming the Accrued Benefits to be fully vested (whether they are or not) as
of the end of the preceding Plan Year. This annual determination shall be
performed by the actuary, as soon as practicable following the close of the
Plan Year, and the actuary shall prepare and provide to the Company a written
report detailing the Accrued Benefits of the Plan Participants. The Company,
within 60 days of receipt of the written report from the actuary shall
contribute to the Trust such assets that it may choose in its sole discretion
in an amount necessary to ensure that the sum of (i) the fair market value of
the Trust assets as of the end of such preceding Plan Year, and (ii) the fair
market value of such contribution, equals or exceeds the Actuarial Equivalent
of the Accrued Benefits of all Participants so reported, assuming the Accrued
Benefits to be fully vested (whether they are or not) as of the end of the
prior Plan Year. All Plan Participants shall be entitled to a copy of the
report prepared by the actuary and likewise shall be furnished a schedule of
Trust assets reflecting the Company's satisfaction of its funding obligation
under this Section 10.3, such report to be furnished to each Plan Participant
within 30 days following the due date of the Company's contribution to the
Trust for the Plan Year, if any may be required for the particular Plan Year.
10.4 Reversion of Excess Assets. Assets held pursuant to the Trust
shall not be loaned to any Company. However, any adopting Company may, at any
time, request the actuary, who last performed the annual actuarial valuation
of the Valero Pension Plan, to determine the Actuarial Equivalent of the
Accrued Benefits, assuming the Accrued Benefits to be fully vested (whether
they are or not), as of the end of the Plan Year coincident with or last
preceding the request, of all Participants and Surviving Spouses of deceased
Participants for which all Companies are or will be obligated to make payments
under this Plan. If the fair market value of the assets held in the Trust, as
determined by the Trustee as of that same date, exceeds the Actuarial
Equivalent of the Accrued Benefits of all Participants and Beneficiaries by
not less than 25%, then Valero may direct the Trustee to return to Valero, for
the prorata benefit of the appropriate Company(ies) its proportionate part of
the assets which are in excess of 125% of the Actuarial Equivalent of the
Accrued Benefits. Each Company's share of the excess assets will be allocated
among the Companies by Valero in any reasonable manner. If there has been a
Change of Control, all assets held in the Trust following the distribution
required pursuant to Section 9.3 shall revert to the Company(ies).
10.5 Repurchase of Valero Stock. In order to facilitate
diversification of Plan assets, Valero shall be entitled, from time to time,
upon notice to the Trustee, to repurchase shares of Valero equity securities
held in the Trust. Such repurchases shall be made for cash or in exchange for
other assets having a fair market value, as determined by the Trustee, equal
to the fair market value of such Valero securities at such date of purchase.
10.6 Participants Must Rely Only on General Credit of the Companies.
It is also specifically recognized by both the Companies and the Participants
that this Plan is only a general corporate commitment and that each
Participant must rely upon the general credit of the Companies for the
fulfillment of their obligations under this Plan. Under all circumstances the
rights of Participants to any asset held by a Company will be no greater than
the rights expressed in this Plan. Nothing contained in this Plan will
constitute a guarantee by any Company that the assets of such Company (or
Companies) will be sufficient to pay any benefits under this Plan or would
place the Participant in a secured or priority position with respect to other
creditors. Neither this Plan nor the Trust creates any lien, claim,
encumbrance, right, title or other interest of any kind in any Participant in
any asset held by any Company, contributed to any such Trust or otherwise
designated to be used for payment of any of its obligations created in this
Plan. No policy or other specific asset of the Company has been or will be
set aside, or will in any way be transferred to the Trust or will be pledged
in any way for the performance of the Companies' obligations under this Plan
which would remove the policy or asset from being subject to the general
creditors of the Companies.
ARTICLE XI
MISCELLANEOUS
11.1 Responsibility for Distributions and Withholding of Taxes.
Valero shall calculate the amount of any distribution payable to a Participant
hereunder, and the amounts of any deductions required with respect to federal,
state or local tax withholding, and shall withhold or cause the same to be
withheld. However, any and all taxes payable with respect to any distribution
or benefit hereunder shall be the sole responsibility of the Participant, not
of Valero or any Company, whether or not Valero or any Company shall have
withheld or collected from the Participant any sums required to be so withheld
or collected in respect thereof, and whether or not any sums so withheld or
collected shall be sufficient to provide for any such taxes.
11.2 Limitation of Rights. Nothing in this Plan will be construed:
(a) to give a Participant any right with respect to any benefit
except in accordance with the terms of this Plan or an agreement modifying
rights under this Plan;
(b) to limit in any way the right of the Company to terminate a
Participant's employment with the Company at any time;
(c) to evidence any agreement or understanding, expressed or
implied, that the Company will employ a Participant in any particular position
or for any particular remuneration; or
(d) to give a Participant or any other person claiming through him
any interest or right under this Plan other than that of any unsecured general
creditor of the Company.
11.3 Arbitration of Disputes
A. It is agreed that any and all disputes, claims, (whether tort,
contract, statutory or otherwise) and/or controversies which relate, in any
manner to the Plan shall be submitted to final and binding arbitration. The
claims covered by this agreement to arbitrate include, but are not limited to,
those which relate to the following:
a. The application and interpretation of the Plan.
b. Forfeitures pursuant to Section 6.5 or 6.6 of the Plan.
c. Eligibility for and the calculation of benefits from the Plan.
d. That in interpreting or applying the provisions of the Plan, the
Company has treated the Participant unfairly or discriminated against the
Participant in connection with a work-related injury, disease or death or
claim for benefits under the Plan in violation of the Texas Commission on
Human Rights Act, Title VII of the Civil Rights Act of 1964, as amended, The
Equal Pay Act of 1963, as amended, the Americans with Disabilities Act, the
Age Discrimination in Employment Act of 1967, as amended, the Rehabilitation
Act of 1973, as amended, or any other provision forbidding discrimination in
employment on any basis.
e. That the Company, in interpreting or applying the provisions of
the Plan breached any contract or covenant (express or implied), committed a
tort or act of discrimination (including, but not limited to race, sex,
religion, national origin, age, marital status, or medical condition, handicap
or disability), or violated any federal, state or other governmental law,
statute, regulation, or ordinance.
f. That the Company has discharged or in any manner discriminated
against the Participant because the Participant in good faith filed a claim,
hired a lawyer to represent him or her in a claim, instituted, or caused to be
instituted, in good faith, any proceeding under the Plan or the TWCA, or has
testified in any such proceeding.
B. This Arbitration provision is expressly made pursuant to and shall by
the Federal Arbitration Act, 9 U.S.C. section 1-14. Except to the extent all
arbitration proceedings shall be conducted in accordance with the Rules. The
parties hereto agree that, pursuant to Section 9 of the Federal Arbitration
Act, a judgment of the United States District Court for the Western District
of Texas, San Antonio Division, or of any other court of competent
jurisdiction, may be entered upon an award made pursuant to arbitration.
C. The neutral arbitrator ("Arbitrator") shall be appointed in the
manner prescribed in Rule 13 of the Rules. The decision of the Arbitrator
selected thereunder shall be final and binding on all parties.
D. Except as may be modified by the Arbitrator for good cause shown, the
following procedures shall be followed in addition to those set forth within
the Rules themselves. (1) At least twenty (20) days before the arbitration,
the parties must exchange list of witnesses, including any experts, and copies
of all exhibits intended to be used at the arbitration. Except for good
cause, the Arbitrator may refuse to allow into evidence the testimony of any
witness not timely disclosed. In addition, except for good cause, the
arbitrator may exclude from evidence any exhibit not previously tendered to
the opposing party in a timely fashion. (2) Each party may take the deposition
of one individual and any or all expert witnesses designated by another party.
Additional discovery, including but not limited to interrogatories and request
for production of documents, medical or psychological examinations, may be
had, upon a showing of substantial need, where the Arbitrator so orders. (3)
The Arbitrator shall apply the substantive law (and the law of remedies, if
applicable) of the state of Texas, or federal law or both, as applicable to
the claim(s) asserted. (4) The Arbitrator shall have the authority to
entertain a motion to dismiss and/or a motion for summary judgment by any
party and shall apply the standards governing such motions under the Federal
Rules of Civil Procedure. (5) Rule 31 of the Rules is amended to allow for the
use of sworn depositions taken in conformity with the Federal Rules of Civil
Procedure. (6) The results of the arbitration shall be confidential and shall
not be publicly released or reported by the Arbitrator or by either party.
E. The Participant shall pay one half of the fees and cost of the
Arbitrator. Funds or other appropriate security shall be posted by each party
for its share of the Arbitrator's fee, in an amount and manner determined by
the Arbitrator, ten (10) days before the first day of hearing. Each party
shall pay for its own cost and attorneys fees, if any. However, if any party
prevails on a statutory claim which affords the prevailing party attorney's
fees, or if there is a written agreement providing for fees, the Arbitrator
may award reasonable fees to the prevailing party.
F. This Agreement to arbitrate shall survive the termination of
Participant's employment. It can only be revoked or modified by a writing
signed by the parties which specifically states an intent to revoke or modify
this Agreement.
G. Should one or more provisions of this paragraph 11.3, supra be
rendered or declared invalid by reason of any existing or subsequently enacted
legislation, or by a decree of a court of competent jurisdiction, such
invalidation of such provision or provisions hereof shall not affect the
remaining portions of this agreement to arbitrate.
11.4 Distributions to Incompetents. Should a Participant or a Surviving
Spouse become incompetent, the Committee is authorized to pay the funds due to
the guardian or conservator of the incompetent Participant or Surviving Spouse
or directly to the Participant or Surviving Spouse or to apply those funds for
the benefit of the incompetent Participant or Surviving Spouse in any manner
the Committee determines in its sole discretion.
11.5 Nonalienation of Benefits. No right or benefit provided in this Plan
will be transferable by the Participant except, upon his death, to a Surviving
Spouse as provided in this Plan. No right or benefit under this Plan will be
subject to anticipation, alienation, sale, assignment, pledge, encumbrance or
charge, and any attempt to anticipate, alienate, sell, assign, pledge,
encumber, or charge the same will be void. No right or benefit under this
Plan will in any manner be liable for or subject to any debts, contracts,
liabilities or torts of the person entitled to such benefits. If any
Participant or any Surviving Spouse becomes bankrupt or attempts to
anticipate, alienate, sell, assign, pledge, encumber or charge any right or
benefit under this Plan, that right or benefit will, in the discretion of the
Committee, cease. In that event, the Committee may have the Company hold or
apply the right or benefit or any part of it to the benefit of the Participant
or Surviving Spouse, his or her spouse, children or other dependents or any of
them in any manner and in any proportion the Committee believes to be proper
in its sole and absolute discretion, but is not required to do so.
11.6 Severability. If any term, provision, covenant or condition of this
Plan is held to be invalid, void or otherwise unenforceable, the rest of this
Plan will remain in full force and effect and will in no way be affected,
impaired or invalidated.
11.7 Notice. Any notice or filing required or permitted to be given to
the Committee or a Participant will be sufficient if in writing and hand
delivered or sent by U.S. mail to the principal office of the Company or to
the residential mailing address of the Participant. Notice will be deemed to
be given as of the date of hand delivery or if delivery is by mail, as of the
date shown on the postmark.
11.8 Gender and Number. If the context requires it, words of one gender
when used in this Plan will include the other genders, and words used in the
singular or plural will include the other.
11.9 Governing Law. The Plan will be construed, administered and governed
in all respects by the laws of the State of Texas.
11.10 Effective Date. This amendment and restatement of the Plan will
be operative and effective on January 1, 1996.
IN WITNESS WHEREOF, the Company has executed this document on this ______
day of _____________________________, 1996, amending and restating the Plan
effective January 1, 1996.
VALERO ENERGY CORPORATION
By