ATLANTIC RICHFIELD SAVINGS PLAN III
INTRODUCTION
This Plan is intended to qualify as a Stock Bonus Plan under
Section 401(a) of the Internal Revenue Code of 1986, as amended.
Part of the Plan (the "ESOP Part") is intended to qualify as an
Employee Stock Ownership Plan under Section 4975(e)(7) of the
Code and such part is designed to invest primarily in Atlantic
Richfield Company Common Stock.
The class of employees eligible to participate in this Plan
previously participated in the Atlantic Richfield Savings Plan.
The assets and liabilities of the Atlantic Richfield Savings Plan
allocable as of June 30, 1988 to the participants in this Plan
who commenced participation effective July 1, 1988 were
transferred to this Plan. This Plan is a continuation of the
Atlantic Richfield Savings Plan with respect to the former
participants of such plan who transferred to, and commenced
participation in, this Plan effective July 1, 1988.
This amendment and restatement of the Plan is effective July 1,
1994, except as otherwise indicated, and is intended to bring the
Plan into compliance with the Tax Reform Act of 1986, subsequent
legislation, and relevant regulations and rulings. The
provisions of this amended and restated plan apply to persons who
are employed on or after July 1, 1994, unless otherwise
indicated.
- 1 -
SECTION 1
DEFINITIONS
1.1 Acquisition Loan means a loan or other extension of credit
used by the Trustee to finance the acquisition of Atlantic
Richfield Company Common Stock.
1.2 Administrator means the Savings Plan Administrative Committee.
1.3 Base Pay means:
(a) The regular wages or salary of a Member as determined
by the Company including the amount of any salary
reduction pursuant to Section 125 and Section 401(k) of
the Internal Revenue Code of 1986, as amended, but
excluding Alaska benefit base enhancement<F1> and
effective September 1, 1994, foreign service
premiums<F2>, and extra pay, such as overtime, premium
bonuses, living or other allowances. Effective for
Plan Years commencing on and after January 1, 1989 and
prior to July 1, 1994, Base Pay shall not exceed
$200,000 as adjusted each Plan Year by the Secretary of
Treasury or the Secretary's delegate, at the same time
and in the same manner as under Section 415(d) of the
Code. Effective July 1, 1994, Base Pay shall not
exceed $150,000 as adjusted each Plan Year pursuant to
Section 401(a)(17)(B) of the Code.
(b) In determining the earnings of a Member, the rules of
Section 414(q)(6) of the Code shall apply, except in
applying such rules, the term "family" shall include
only the spouse of the Member and any lineal
descendants of the Member who have not attained age 19
before the close of the year. If, as a result of the
application of such rules the adjusted limitation is
exceeded, then the limitation shall be prorated among
the affected individuals in proportion to each such
individual's earnings as determined under this
paragraph prior to the application of this limitation.
1.4 Code means the Internal Revenue Code of 1986, as amended.
_____________________
<F1> The exclusion of the Alaska benefit base enhancement shall not
be effective until January 1, 1996 with respect to a Member in
receipt of such enhancement on May 31, 1994. The Alaska benefit
base enhancement shall not exceed a Member's Alaska cost of living
allowance.
<F2> The exclusion of foreign service premiums shall not apply to a
Member who on September 1, 1994 is in a foreign assignment until
such time as the Member leaves the country in whcih the Member is
employed on September 1, 1994 or, of later, completes the
assignment in which the Member was engaged on September 1, 1994.
- 2 -
1.5 Company means Atlantic Richfield Company and such of its
Subsidiaries or Affiliates whose Employees are included in
this Plan upon authorization of the Board of Directors of
Atlantic Richfield Company and adoption of this Plan by the
Board of Directors of such authorized Subsidiary or
Affiliate.
1.6 Credited Company Service means service with the Company, a
predecessor company, and/or with a Subsidiary or Affiliate
which service the Company recognizes, on a basis uniformly
applicable to all persons similarly situated, for purposes
of this Plan.
1.7 Employee means any person who:
(a) Is employed by the Company;
(b) Is represented by a collective bargaining agent
which has negotiated the benefits of the Plan; and
(c) With respect to whom neither Company contributions
nor Member contributions are being made under the
Atlantic Richfield Savings Plan II.
1.8 ERISA means the Employee Retirement Income Security Act of
1974, as amended.
1.9 Financed Shares means shares of Atlantic Richfield Company
Common Stock acquired by the Trustee with the proceeds of an
Acquisition Loan.
1.10 Highly Compensated Employee means for Plan Years beginning
after December 31, 1986:
(a) Any Employee who performs service during the
determination year and is described in one or more of
the following groups:
(i) An employee who is a five percent owner, as
defined in Section 416(i)(1) of the Code, at any
time during the determination year or the look-
back year, as defined below;
(ii) An employee who receives compensation in excess of
$75,000, as adjusted pursuant to Section 415(d) of
the Code for Plan Years commencing after December
31, 1987, during the look-back year;
(iii) An employee who receives compensation in
excess of $50,000, as adjusted pursuant to Section
415(d) of the Code for Plan Years commencing after
December 31, 1987, during the look-back year and
is a Member of the top-paid group, as defined
below, for the look-back year;
(iv) An employee who is an officer, within the meaning
of Section 416(i) of the Code, during the look-
back year and who
- 3 -
receives compensation in the look-back year
greater than 50 percent of the dollar limitation
in effect under Section 415(b)(1)(A) of the Code
for the calendar year in which the look-back year
begins; or
(v) An employee who is both described in Subparagraphs
1.10(a)(ii), (iii), or (iv) when these
subparagraphs are modified to substitute the
determination year for the look-back year and one
of the 100 Employees who receives the most
compensation from the Employer during the
determination year.
(b) For purposes of the definition of Highly Compensated
Employee the following will apply:
(i) The determination year is the Plan Year for which
the determination of who is highly compensated is
being made; or if the Company makes the election
pursuant to Treas. Reg. 1.414(q)-IT Q&A-14(b), the
period by which the determination year extends
beyond the calendar year referred to in
Subparagraph 1.10(b)(ii).
(ii) The look-back year is the 12-month period
immediately preceding the determination year, or
if the Company makes the election pursuant to
Treas. Reg. 1.414(q)-IT Q&A-14(b), the calendar
year ending with or within the determination year.
(iii) The top-paid group consists of the top 20
percent of employees ranked on the basis of
compensation received during the year. For
purposes of determining the number of employees in
the top paid group, employees who have not
completed six months of service by the end of the
Plan Year (including service in the immediately
preceding Plan Year); who normally work less than
17-1/2 hours per week; who work less than six
months during any year; who are nonresident aliens
with no income from sources within the United
States or who have not had their 21st birthday by
the end of the Plan Year shall be included.
(iv) The number of officers is limited to 50.
(v) When no officer has compensation in excess of 50
percent of the Section 415(b) Code limit, the
highest paid officer is treated as highly
compensated.
(vi) Employers aggregated under Section 414(b), (c),
(m), or (o) of the Code are treated as a single
employer.
- 4 -
(vii) Compensation, for purposes of this Paragraph
1.10 means compensation within the meaning of
Section 415(c)(3) of the Code, without regard to
Section 125, Section 402(g)(3) and Section
402(h)(1)(B) of the Code.
(c) If an Employee is, during a determination year or look-
back year, a family member of either a five percent
owner who is an active or former Employee or a Highly
Compensated Employee who is one of the ten most Highly
Compensated Employees ranked on the basis of
compensation paid by the employer during such year, then
the family member and the five percent owner or top-ten
Highly Compensated Employee shall be aggregated. In
such case, the family member and five percent owner or
top-ten Highly Compensated Employee shall be treated as
a single employee receiving compensation and plan
contributions equal to the sum of such compensation and
contributions of the family member and five percent
owner or top-ten Highly Compensated Employee. For
purposes of this section, family member includes the
spouse, lineal ascendants and descendants of the
employee or former employee and the spouses of such
lineal ascendants and descendants.
(d) A former employee who has a separation year prior to
the determination year and who was a highly compensated
active employee for either (i) such employee's
separation year, or (ii) any determination year ending
on or after the employee's 55th birthday will be a
Highly Compensated Employee. Generally, a separation
year is the determination year the employee separates
from service. An employee who separated from service
before January 1, 1987, will be included as a Highly
Compensated Employee only if the Employee was a five
percent owner or received compensation in excess of
$50,000 during the year.
(e) If elected by Atlantic Richfield Company, Subparagraph
1.10(a) shall be modified by:
(i) Substituting $50,000 for $75,000 in Subparagraph
1.10(a)(ii) and by disregarding Subparagraph
1.10(a)(iii). This simplified definition of
Highly Compensated Employee will apply if the
Company maintains significant business activities
(and employ employees) in at least two
significantly separate geographic areas; or
(ii) Substituting the simplified method pursuant to
Section 4 of Rev. Proc. 93-42, in which case the
Highly Compensated Employees shall be determined
under Subparagraph 1.10(a) on the basis of the
look-back year and determination year, or the
determination year only, taking into account all
employees employed during such year.
- 5 -
(f) The determination of who is a Highly Compensated
Employee, including the determinations of the number
and identity of employees in the top-paid group, the
top 100 employees, the number of employees treated as
officers and the compensation that is considered, will
be made in accordance with Section 414(q) of the Code
and the regulations thereunder.
1.11 Hours of Service means:
(a) Each hour for which an Employee is paid, or entitled to
payment, for the performance of duties for the Company
or any Subsidiary or Affiliate during the computation
period in which the duties are performed.
(b) Each hour for which an Employee is paid, or entitled to
payment, by the Company or any Subsidiary or Affiliate
on account of a period of time during which no duties
are performed (irrespective of whether the employment
relationship has terminated) due to vacation, holiday,
illness, incapacity (including disability), layoff,
jury duty, military duty or leave of absence.
(c) Each hour for which back pay, irrespective of
mitigation of damages, is either awarded or agreed to
by the Company or any Subsidiary or Affiliate. Such
hours shall be credited to the Employee for the
computation period or periods to which the award or
agreement pertains.
(d) An Employee will be credited with 200 Hours of Service,
to the extent required by federal law, for each month
during which the Employee is on active duty in the
Armed Forces of the United States and for which the
Employee is not paid or entitled to be paid by the
Company or any Subsidiary or Affiliate, and with 200
Hours of Service for each month that membership may be
maintained by the Employee under Subparagraph 2.3(a).
(e) Hours credited for any period under any provision of
this Paragraph 1.11 may not also be credited for the
same period under any other provisions of this Plan.
Hours shall be credited under Subparagraphs 1.11(a)
thru (c) pursuant to U.S. Department of Labor
Regulations under 29CFR Section 2530.200b-2, which are
incorporated herein by this reference.
(f) For all purposes under the Plan, an Employee shall be
credited with 200 Hours of Service for each calendar
month in which the Employee would otherwise be credited
with one or more Hours of Service.
(g) Solely for purposes of determining whether a break in
service has occurred in a computation period, and to
the extent it does not duplicate Hours of Service
credited under any other provision of
- 6 -
this Paragraph 1.11, an individual who is absent from work
for maternity or paternity reasons shall receive credit for
the Hours of Service which would otherwise have been
credited to such individual but for such absence, or in
any case in which such hours cannot be determined,
eight Hours of Service per day of such absence. For
purposes of this subparagraph, an absence from work for
maternity or paternity reasons means an absence which
commences on or after January 1, 1985 and (i) by reason
of the pregnancy of the individual; (ii) by reason of a
birth of a child of the individual; (iii) by reason of
the placement of a child with the individual in
connection with the adoption of the child by such
individual; or (iv) for purposes of caring for such
child for a period beginning immediately following such
birth or placement. The Hours of Service credited
under this subparagraph shall be credited within the
computation period in which the absence begins if the
crediting is necessary to prevent a break in service in
that period, or in all other cases, in the following
computation period.
1.12 Member means an Employee who has joined the Plan as provided
in Section 2 and whose membership has not terminated under
any of the provisions of Paragraph 2.3.
1.13 Member's Account or Account means a separate account
maintained by the Trustee for each member consisting of (i)
one subaccount to which is allocated the Member's
contribution, as adjusted for annual earnings and
withdrawals, and realized and unrealized gains and losses
attributable thereto; and (ii) a second subaccount to which
is allocated the Company's contribution as adjusted for
annual earnings and withdrawals and realized and unrealized
gains and losses attributable thereto.
1.14 Plan or Plans means the Atlantic Richfield Savings Plan III
as set forth herein, and any amendments hereto.
1.15 Plan Year means the period commencing on July 1 of each
calendar year and ending on June 30 of the immediately
following calendar year.
1.16 Predecessor Plan means the Atlantic Richfield Savings Plan
in the case of Members with respect to whom assets and
liabilities were transferred to this Plan effective July 1, 1988.
1.17 Subsidiary or Affiliate means:
(a) All corporations which are members of a controlled
group of corporations within the meaning of Section
1563(a) of the Code [determined without regard to
Section 1563(a)(4) and Section 1563(e)(3)(C) of said
Code] and of which Atlantic Richfield Company is then a
member. For purposes of Paragraphs 1.6 and 1.11,
Section 2 and Subparagraph 11.8(b), Subsidiary or
Affiliate
- 7 -
shall include Lyondell Petrochemical Company
and its Subsidiaries and Affiliates; and
(b) All trades or businesses, whether or not incorporated,
which, under the Regulations prescribed by the
Secretary of the Treasury pursuant to Section 210(d) of
ERISA or Section 414(c) of the Code, are then under
common control with Atlantic Richfield Company, or with
respect to the last sentence of Subparagraph 1.17(a),
Lyondell Petrochemical Company.
1.18 Savings Plan Administrative Committee means the committee
provided for in Section 9 of the Plan.
1.19 Trustee means the persons or corporations, or both,
designated by agreements of trust between them and Atlantic
Richfield Company to hold contributions from Members and the
Company, investments thereon and earnings thereon. The
duties and responsibilities of the Trustee shall be those
set forth in the trust agreement.
- 8 -
SECTION 2
MEMBERSHIP
2.1 An Employee who is paid on a United States dollar payroll of
the Company may become a Member upon:
(a) Completion of six months of Credited Company Service; or
(b) Completion of 1,000 Hours of Service during any 12-
month period commencing on the Employee date of
employment or any anniversary thereof.
2.2 Membership.
(a) To become a Member, an Employee must file an
application for membership with the Administrator
giving such information as it may require to establish
the Employee's rate of contribution and initial
directions with respect to investments. Provided that
a properly completed application for membership in the
Plan has previously been received by the Administrator,
the Employee's membership shall become effective on the
last day of the six or 12-month periods described,
respectively, in Subparagraphs 2.1(a) and (b).
The Employee's contributions shall commence with the
first full pay period beginning on or after the
effective date of the Employee's membership.
(b) If an Employee is a Member of a thrift or savings plan
of the Company (including the Predecessor Plan), or a
Subsidiary or Affiliate, and the Employee's
contributions to such plan of the Company or Subsidiary
or Affiliate are suspended at the time the Employee
becomes eligible for membership in this Plan, the
Employee's contributions to the Plan shall commence
with the first full pay period beginning on or after
the date on which such period of suspension then in
effect under the Plan of the Company, or the Subsidiary
or Affiliate, ends.
2.3 Membership Termination. An Employee's membership shall
terminate when any of the following occur:
(a) The Member dies, retires or the Member's employment
with the Company is otherwise terminated except:
(i) If the Member transfers to a Subsidiary or
Affiliate which is not a Company participating in
this Plan, the Member may continue as a Member of
this Plan until the Member is no longer employed
by Atlantic Richfield Company or any of its
Subsidiaries or Affiliates; or
- 9 -
(ii) If the Member leaves active employment with the
Company, the Member may maintain his or her
membership in the Plan, on terms and conditions
uniformly applicable to all Members similarly
situated by the Company, during military or other
types of leaves of absence granted by the Company.
(b) He continues employment with an acquiring employer in
conjunction with a sale to the acquiring employer of
substantially all of the assets used by the Company or
any Subsidiary or Affiliate in a trade or business
which such entity conducts.
(c) He continues in the employment of a Subsidiary or
Affiliate following a disposition of the Company's
interest in such Subsidiary or Affiliate.
2.4 Resuming Membership After Transfer.
If a Member is transferred pursuant to Subparagraph
2.3(a)(i), and subsequently is transferred to Company
employment in which the Member would be eligible to resume
membership in the Plan, the Member shall be so eligible on
or after the date of such transfer, except as otherwise
provided in Subparagraph 2.2(b).
2.5 Transfer to Company.
When an Employee who remains a Member of a thrift or savings
plan maintained by the Company, or a Subsidiary or
Affiliate, becomes a Member of the Plan, the occurrence of
any action that causes or would have caused a suspension of
contributions or a termination of membership under the rules
and regulations of the plan of the Company, or the
Subsidiary or Affiliate, will simultaneously cause a
suspension of contributions or a termination of membership
in the Plan.
2.6 Transfer from Company.
When an Employee who is a Member of the Plan is transferred
to employment with an ineligible group of the Company, or
with a Subsidiary or Affiliate, and becomes a Member of a
thrift or savings plan maintained by the Company, or the
Subsidiary or Affiliate, the occurrence of any action that
causes termination of membership under the provisions of the
plan of the Company, or the Subsidiary or Affiliate, will
simultaneously incur the penalty of termination of
membership under the provisions of the Plan.
- 10 -
SECTION 3
CONTRIBUTIONS BY MEMBERS
3.1 Percent of Base Pay.
Each Member who is an Employee may elect to make
contributions to the Plan at a rate of one percent to ten
percent of the Member's Base Pay, in whole percentages;
provided, however, that the amount of such contributions,
when considered together with any contributions made by the
Member to any other plan maintained by the Company, or any
Subsidiary or Affiliate, which is qualified under Section
401(a) of the Code, shall not exceed the limitations of
Paragraph 4.3 or the maximum amount of contributions
permissible by applicable law or by regulation or ruling of
the Internal Revenue Service. Such contributions shall be
made by payroll deduction or by other methods approved by
the Administrator.
A Member's election shall be made in the manner prescribed
by the Administrator. A Member may at any time change his
or her election with respect to the rate of future
contributions by giving notice to the Administrator. Such
changes shall be effective as of the payroll period
beginning after the date of receipt of such notice by the
Administrator.
3.2 Payment of Contributions to Trustee.
A Member's contributions for a Plan Year shall be paid to
the Trustee no later than 30 days after the last day of the
Plan Year. Member's contributions may be paid to the
Trustee in the following forms:
(a) To the extent that a Member has directed pursuant to
Paragraph 6.2 that the Member's contributions be
invested in the Money Market Fund, the Equity Fund or
the Bond Fund, such contributions shall be paid to the
Trustee in cash.
(b) To the extent that a Member has directed pursuant to
Paragraph 6.2 that his or her contributions be invested
in Atlantic Richfield Company Common Stock under the
non-ESOP Part of the Plan, such contributions may be
paid to the Trustee in cash, in shares of Atlantic
Richfield Company Common Stock, or in any combination
thereof.
(c) To the extent that a Member has directed pursuant to
Paragraph 6.2 that his or her contributions be invested
in Atlantic Richfield Company Common Stock under the
ESOP Part of the Plan, such contributions may be paid
to the Trustee in cash, in shares of Atlantic Richfield
Company Common Stock, in the form of forgiveness of
indebtedness on an Acquisition Loan from the Company to
the Plan, or in any combination thereof.
- 11 -
3.3 Suspension of Contributions.
A Member's contributions will be suspended as follows:
(a) Upon the Member's transfer, other than on an approved
leave of absence, to employment with:
(i) A Subsidiary or Affiliate which is not
participating in the Plan; or
(ii) Atlantic Richfield Company or any of its
Subsidiaries or Affiliates in such foreign
countries as the Company shall designate; the
Member's contributions shall automatically be
suspended while the Member remains in such
employment.
(b) Upon the Member's transfer to an employee group of the
Company that is not participating in the Plan.
(c) As described in Section 7.
- 12 -
SECTION 4
COMPANY CONTRIBUTION
4.1 Company Contribution.
Subject to the provisions of Paragraphs 4.3 and 4.6, each
pay period, the Company shall pay to the Trustee a
contribution on behalf of each Member equal to 200 percent
of the Member's contributions for the pay period which do
not exceed one percent of the Member's Base Pay for the pay
period. This contribution shall be made no later than 30
days following the date on which the related Member
contribution is made, and shall be made under the ESOP Part
of the Plan.
4.2 Form of Contribution.
Company contributions made pursuant to Paragraph 4.1 may be
made in the form of cash, shares of Atlantic Richfield
Company Common Stock, forgiveness of indebtedness on an
Acquisition Loan from the Company to the Plan, or any
combination of the foregoing.
4.3 Actual Contribution Percentage Tests.
Effective for Plan Years beginning after December 31, 1986,
the Plan shall comply with the requirements of Section
401(m)(2) and Section 401(m)(9) of the Code [for Plan Years
beginning after December 31, 1988], and the regulations
thereunder, including Treas. Reg. Section 1.401(m)-1(b) and
Treas. Reg. Section 1.401(m)-2, which provisions are
incorporated herein by this reference. To the extent
permitted by regulations, Elective Deferrals described in
Section 402(g)(3) of the Code and nonelective contributions
described in Paragraph 4.7 may, at the discretion of the
Administrator, be taken into account in satisfying this
Paragraph 4.3.
4.4 Treatment of Certain Family Members.
Effective for Plan Years beginning after December 31, 1986,
for purposes of the limitations of Paragraph 4.3, if an
individual is a member of the family (within the meaning of
Section 414(q)(6)(B) of the Code and the regulations
thereunder) of a Member who is a Highly Compensated Employee
described in Section 414(q)(6)(A) of the Code, then:
(a) The Actual Deferral Percent (ADP) and Actual
Contribution Percent (ACP) [determined separately] for
the family group is the ADP and ACP determined by
combining the contributions and compensation of all
eligible Family Members. Except to the extent taken
into account under this Subparagraph 4.4(a), the
contributions and compensation of all Family Members
are disregarded in determining the ADP and ACP for all
Members.
(b) Family Members mean a Member's spouse, lineal
ascendants or descendants and their spouses.
- 13 -
(c) If the ADP and/or ACP of a Highly Compensated Employee
is determined under the above family aggregation rules,
and the requirements of Paragraph 4.3 are not
satisfied, the ADP and/or ACP is reduced in accordance
with the leveling method and the excess contributions
and/or excess aggregate contributions are allocated
among the Family Members in proportion to the
contributions of each Family Member that have been
combined.
4.5 Distribution of Excess Contributions to Members.
Effective for Plan Years beginning after December 31, 1986:
(a) If the Administrator determines, in its discretion, that
the allocation of Company contributions pursuant to
Paragraph 4.1 to Members' Accounts for a Plan Year does
not meet a requirement of Paragraph 4.3, the
Administrator may reduce the allocation of such Company
contributions to the Accounts of certain Members who are
Highly Compensated Employees to the extent necessary to
meet that requirement. The reduction will be
accomplished by reducing allocations to the Accounts of
Members who are Highly Compensated Employees in order of
their Actual Contribution Percents, beginning with the
Member having the highest percent until a requirement of
Paragraph 4.3 is met. The reduced amounts, adjusted by
gain or loss allocable thereto for the Plan Year, will
be returned to affected Members by the end of the
following Plan Year.
(b) Gain or loss, for purposes of Subparagraph 4.5(a),
allocated to excess aggregate contributions shall be
computed under the method used by the Plan to allocate
gains and losses.
4.6 Section 415 Limitations.
Effective for Plan Years beginning on or after December 31, 1986:
(a) In addition to other limitations set forth in the Plan
and notwithstanding any other provisions of the Plan,
"annual additions" made to this Plan (and all other
defined contribution plans required to be aggregated
with the Plan under the provisions of Section 415 of
the Code) shall not exceed an amount in excess of the
limit set forth in such section of the Code. For
purposes of calculating such limit under Section 415 of
the Code, the "limitation year" shall be the calendar
year. Member and Company Contributions in excess of
the contribution percent test of Paragraph 4.3 are
considered annual additions even if corrected through
distribution.
(b) If the limitations described in Section 415(c) of the
Code are exceeded for a Member for a limitation year,
the excess will be eliminated as follows:
(i) Provisions of any other savings plans established
by the Company or a Subsidiary or Affiliate which
have caused the
- 14 -
limits to be exceeded will be applied;
provided, however, that the provisions of
the savings plan in which the Member is active as
of the last day of the limitation year shall be
applied before the provisions of the savings plan
in which the Member is inactive.
(ii) Amounts attributable to after tax contributions
made by the Member to the Plan (or any other plan
maintained by the Company or any Subsidiary or
Affiliate) shall be paid to the Member.
(iii) Amounts attributable to Elective Deferrals as
described in Section 402(g)(3) of the Code made by
a Member to the Plan (or any other plan maintained
by the Company or a Subsidiary or Affiliate) shall
be paid to the Member.
(iv) The excess, if any, will be held unallocated in a
suspense account. The suspense account will be
applied to reduce contributions for remaining
Members in the limitation year, and each
succeeding limitation year, if necessary. If a
suspense account is in existence at any time
during the limitation year pursuant to this
subparagraph, it will not participate in the
allocation of the investment gains and losses.
(c) If the limitations described in Section 415(e) of the
Code are exceeded for a Member for a limitation year,
the excess will be eliminated by applying the
provisions of the defined benefit plan in which the
Member participates.
4.7 Nonelective Contributions.
(a) The Administrator, in its sole discretion, may make a
nonelective contribution to the Accounts of certain
Members who are not highly compensated to the extent
necessary to satisfy the requirement of Paragraph 4.3
of the Plan, or to assist the Plan or any other plan of
the Company or any Subsidiary or Affiliate to satisfy
the requirements of Section 410(b) of the Code.
(b) A contribution under this Paragraph 4.7 shall be
allocated to eligible Member's in the ratio that the
Base Pay of each such Member for the Plan Year bears to
the total Base Pay of all such Member's for the Plan Year.
(c) The Company shall make contributions necessary to
reinstate Members' Accounts pursuant to Paragraph 9.9
of the Plan.
- 15 -
SECTION 5
FINANCED SHARES
5.1 Acquisition Loans.
Atlantic Richfield Company, by action of its Treasurer, may
direct the Trustee to incur Acquisition Loans from time to
time to finance the acquisition of Atlantic Richfield
Company Common Stock (Financed Shares) under the ESOP Part
of the Plan or to repay a prior Acquisition Loan. For this
purpose, an installment obligation incurred in connection
with the purchase of Atlantic Richfield Company Common Stock
shall be treated as an Acquisition Loan.
An Acquisition Loan shall be for a specific term, shall bear
a reasonable rate of interest, and shall not be payable on
demand except in the event of default. An Acquisition Loan
may be secured by a pledge of the Financed Shares so
acquired (or acquired with the proceeds of a prior
Acquisition Loan which is being refinanced). No other
assets of the Plan may be pledged as collateral for an
Acquisition Loan, and no lender shall have recourse against
assets of the Plan other than Financed Shares remaining
subject to pledge. If the lender is a "party in interest"
(as defined in Section 3(14) of ERISA), the Acquisition Loan
must provide that in the event of default, assets of the
Plan may be transferred to the lender only upon, and to the
extent of, the failure of the Plan to meet the payment
schedule of the Acquisition Loan. Any pledge of Financed
Shares must provide for the release of the shares so pledged
as payments on the Acquisition Loan are made by the Trustee
and such Financed Shares are allocated to Members' Accounts
under Paragraph 5.2.
Payments of principal and/or interest on any Acquisition
Loan shall be made by the Trustee, as directed by the
Company, only from: (a) Company contributions paid in cash
to enable the Plan to make payments on such Acquisition
Loan, and earnings attributable thereto; (b) Member
contributions that Members have directed pursuant to
Paragraph 6.2 to be invested in Atlantic Richfield Company
Common Stock under the ESOP Part of the Plan, and earnings
attributable thereto; (c) the proceeds of any Acquisition
Loan, and the earnings attributable thereto; and (d) any
cash dividends received by the Plan on the Financed Shares
purchased with the proceeds of such Acquisition Loan. The
payments made with respect to an Acquisition Loan for a Plan
Year must not exceed the sum of such Company contributions,
Member contributions, proceeds, earnings, and dividends for
that Plan Year and prior Plan Years, as reduced by the
amount applied to make such payments in prior Plan Years.
As directed by Atlantic Richfield Company, the Trustee also
may sell any Financed Shares that have not yet been
allocated to Members' Accounts and use the proceeds from
such sale to pay principal and/or interest on the
Acquisition Loan used to acquire such shares.
5.2 Payments on Acquisition Loan.
The acquisition of Atlantic Richfield Company Common Stock
with the proceeds of an Acquisition Loan may be made on the
open-market, or from
- 16 -
the Company, in a single purchase or a series of
purchases over a period of time. Prior to use for
such purchase or purchases, the Acquisition Loan proceeds
may be invested by the Trustee (as directed by Atlantic
Richfield Company) in interest-bearing accounts or
instruments. Interest derived therefrom shall be applied to
make payments on the Acquisition Loan, or, if the
Acquisition Loan has been repaid in full, shall be allocated
as of the last day of the Plan Year among the Accounts of
all Members who have not terminated membership pursuant to
Paragraph 2.3 as of such date in proportion to their Base
Pay for the Plan Year.
All Financed Shares acquired by the Plan shall initially be
credited to a loan suspense account, and will be allocated
to the Members' Accounts only as payments on the Acquisition
Loan are made. The number of Financed Shares to be released
from the loan suspense account for allocation to Members'
Accounts in each Plan Year shall not be less than the number
calculated as follows:
(a) The number of Financed Shares held in the loan suspense
account immediately before the release in the current
Plan Year shall be multiplied by a fraction, the
numerator of which is the amount of principal and
interest paid on the Acquisition Loan for that Plan
Year, and the denominator of which is the sum of the
numerator plus the total payments of principal and
interest on that Acquisition Loan projected to be paid
for all future Plan Years. For this purpose, the
interest to be paid in future Plan Years is computed by
using the interest rate in effect as of the last day of
the current Plan Year.
(b) In lieu of the method described in Subparagraph 5.2(a),
the Company may elect (as to each Acquisition Loan) or
the provisions of the Acquisition Loan may provide for
the release of Financed Shares from the loan suspense
account based solely on the ratio that the payments of
principal for each Plan Year bear to the total
principal amount of the Acquisition Loan. This method
may be used only if: (i) the Acquisition Loan provides
for annual payments of principal and interest at a
cumulative rate that is not less rapid at any time than
level annual payments of such amounts for ten years;
(ii) interest included in any payment on the
Acquisition Loan is disregarded only to the extent that
it would be determined to be interest under standard
loan amortization tables; and (iii) the entire duration
of the Acquisition Loan repayment period does not
exceed ten years, even in the event of a renewal,
extension, or refinancing of the Acquisition Loan.
As of each date that payments (other than payments with the
proceeds of a new Acquisition Loan) are made on an
Acquisition Loan, the Financed Shares released from the loan
suspense account shall be allocated to Members' Accounts in
proportion to the amounts debited from each Member's Account
to make the Acquisition Loan payments.
- 17 -
SECTION 6
INVESTMENT OF MEMBERS' ACCOUNTS
6.1 Members' Accounts.
The Administrator shall establish and maintain an Account in
the name of each Member. Separate records shall be
maintained with respect to the portion of a Member's Account
attributable to Member's contributions under Section 3 and
earnings thereupon, and the portion of a Member's Account
attributable to Company contributions under Section 4 and
earnings thereupon.
6.2 Investment of Member Contributions.
Upon receipt of a Member's contributions, the Trustee shall
invest such contributions among the following investment
alternatives, in the proportion indicated by the Member in
his or her investment directions provided to the
Administrator:
(a) In Atlantic Richfield Company Common Stock held under
the ESOP Part of the Plan;
(b) In Atlantic Richfield Company Common Stock held under
the non-ESOP Part of the Plan;
(c) In the Money Market Fund, consisting of specified types
of fixed income investments such as deposits in
interest-bearing bank accounts, certificates of
deposit, corporate or governmental obligations maturing
in not more than five years, financial futures
contracts, deposits under a deposit administration or
similar contract issued by an insurance company or in a
commingled or common investment account or fund
established and maintained by an investment advisor or
a bank (which bank may be a Trustee for this Plan) and
the assets of which are invested primarily in debt
obligations, or in any combination thereof as Atlantic
Richfield Company may determine;
(d) In the Equity Fund, consisting of specified equity
investments such as common or capital stock of issuers
(other than the Company, Subsidiaries or Affiliates, or
Lyondell Petrochemical Company and its Subsidiaries or
Affiliates), bonds, debentures or preferred stocks
convertible into common or capital stock of such
issuers, financial futures contracts, interests in any
commingled or common equity fund established and
maintained by an investment advisor or a bank (which
bank may be a Trustee for the Plan), interests in any
mutual fund or other similar types of equity
investments and cash equivalent short-term investments
maturing in less than one year, or in any combination
thereof as Atlantic Richfield Company may determine; or
- 18 -
(e) In the Bond Fund, consisting of specified types of
fixed income investments, such as public obligations of
the United States or foreign governments or their
agencies, securitized financing or corporate bonds of
issuers (other than the Company, Subsidiaries or
Affiliates, or Lyondell Petrochemical Company or any of
its Subsidiaries or Affiliates), debentures, financial
futures contracts, interests in any commingled or
common fixed income fund established and maintained by
an investment advisor or bank (which bank may be the
trustee), interests in any mutual fund or other similar
types of fixed income investments and cash equivalent
short-term investments, or in any combination thereof
as Atlantic Richfield Company may determine.
A Member's directions as to the initial investment of his or
her contributions shall be provided in such manner as is
prescribed by the Administrator. Such directions shall
remain in effect until new directions are provided to the
Administrator by the Member. A Member may change the
direction as to the initial investment of his or her
contributions at any time by providing notice in such manner
as may be prescribed by the Administrator. Any change of
investment directions shall be effective with respect to a
Member's contributions paid to the Trustee for pay periods
beginning after the notice is received by the Administrator.
6.3 Investment of Company Contributions.
All Company contributions, and any amounts of interest
attributable to the proceeds of an Acquisition Loan
allocated to Members' Accounts pursuant to Paragraph 5.2
after the Acquisition Loan has been repaid in full, shall at
all times be invested in Atlantic Richfield Company Common
Stock under the ESOP Part of the Plan. Company
contributions made in cash shall be applied to purchase
shares of Atlantic Richfield Company Common Stock or to make
payments on an Acquisition Loan within a reasonable time
after being paid to the Trustee or after being allocated to
Members' Accounts.
6.4 Funds Invested in Money Market Fund.
(a) There shall be invested in the Money Market Fund:
(i) Amounts which a Member elects to have so invested
under Subparagraph 6.2(c); and
(ii) On an interim basis, amounts being accumulated in
a Member's Account for investment under
Subparagraphs 6.2(a), (b), (d) and (e).
(b) Subject to the requirement of Subparagraph 6.5(c), a
Member may direct, once during each 30 calendar day
period, that funds invested in the Money Market Fund
(including funds transferred from the Predecessor Plan)
under Subparagraph 6.2(c) be invested
- 19 -
in any of the other permitted alternatives; provided
that (i) only one direction whether made solely under this
subparagraph, or in combination with a direction under
Paragraph 6.5, may be made during a 30-calendar-day
period; and (ii) a direction under this subparagraph
may not be made earlier than seven days following (A)
the date of receipt by the Administrator of a Member's
application to make a withdrawal under Paragraph 7.1,
(B) the date a loan application is made under Section
12, or (C) the date a loan repayment is made under
Paragraph 12.8(c)(i).
(c) Interest shall be allocated on a monthly basis to funds
held for a Member in the Money Market Fund as of the
last day of a calendar month. However, such allocation
shall not be made with respect to funds resulting from
a conversion to cash of Atlantic Richfield Company
Common Stock, Equity Fund, or Bond Fund units which
occurred in the calendar month in which allocation of
interest is made.
6.5 Sale and Reinvestment of Stock, Equity Fund Units or Bond
Fund Units.
(a) A Member may direct that shares of Atlantic Richfield
Company Common Stock, other than shares purchased with
Company contributions made after July 1, 1988, units of
the Equity Fund and/or units of the Bond Fund held in
the Member's Account (including shares and units
transferred to this Plan from the Predecessor Plan) be
converted to cash and the proceeds thereof, less any
applicable expenses of sale, be invested in a different
option described in Paragraph 6.2; provided, that (i)
only one direction, whether made solely under this
subparagraph, or in combination with a direction under
Paragraph 6.4, may be made during a 30-calendar-day
period; (ii) a direction under this subparagraph may
not be made earlier than seven calendar days following
(A) the date of receipt by the Administrator of a
Member's application to make a withdrawal under
Paragraph 7.1, (B) the date a loan application is made
under Section 12, or (C) the date a loan repayment is
made under Paragraph 12.8(c)(i); (iii) a Member who has
attained age 55 as of the date of direction to convert
may, subject to the remaining restrictions described in
this paragraph direct that shares of Common Stock
(including Common Stock of a Subsidiary or Affiliate or
Lyondell Petrochemical Company Common Stock
attributable to contributions of such companies) held
in the Member's Account which are attributable to
Company contributions be sold and the proceeds
reinvested in one or more of the other options
described in Paragraph 6.2.
(b) The conversion of shares of Atlantic Richfield Company
Common Stock (including shares transferred to this Plan
from the Predecessor Plan) to shares of such stock held
in the ESOP Part of the Plan described in Subparagraph
6.2(a), and the conversion of
- 20 -
shares of Atlantic Richfield Company Common Stock held
in the ESOP Part of the Plan to the shares held under
Subparagraph 6.2(b) of the Plan, shall be accomplished
by a recharacterization of the shares, pursuant to
procedures established by the Administrator; provided,
that only one direction, whether made solely under this
subparagraph or in combination with a direction under
Paragraph 6.4, may be made during a 30-calendar-day
period.
(c) Proceeds of the conversion of shares of Atlantic
Richfield Company Common Stock to cash may not be
reinvested in Atlantic Richfield Company Common Stock
until 30 calendar days after the date of such
conversion. Proceeds of the conversion of units of the
Equity Fund or Bond Fund to cash may not be reinvested
in the Equity Fund or Bond Fund, as the case may be,
until 30 calendar days after the date of such
conversion.
6.6 Directives.
All elections and directions by Members concerning the
investment of their Accounts shall be make in the manner
prescribed by the Administrator, shall be irrevocable and
shall become effective upon receipt by the Administrator.
6.7 Purchases and Sales of Atlantic Richfield Company Common Stock.
Purchases and sales of Common Stock of Atlantic Richfield
Company shall be handled in accordance with the following
rules and such additional procedures, consistent with such
rules, which the Administrator may establish from time to
time:
(a) Purchases and sales of Common Stock of Atlantic
Richfield Company pursuant to a Member's directive
under Paragraph 6.4 or 6.5, or to accommodate a
distribution or withdrawal pursuant to Section 7 or 8,
shall be made in the open-market as follows:
(i) Each Wednesday and Friday the Administrator shall
execute an open-market transaction, at a time
determined at the discretion of the Administrator,
covering all participant directives received by
the Administrator by noon Pacific time on the
preceding Company business day, except that if a
Wednesday or Friday is a Company holiday or a day
on which trading on the New York Stock Exchange is
closed, the transaction will occur on the next day
(a Wednesday or Friday) on which the Plan executes
a transaction in the open-market.
(ii) If an unforeseeable administrative difficulty
prevents the execution of the open-market
transaction otherwise scheduled for a Wednesday or
Friday, such transaction will be executed
- 21 -
on the first business day thereafter which does not
fall within one of the two exceptions in Subparagraph
6.7(a)(i).
(iii) The Administrator may, in its discretion,
match the purchase and sale orders scheduled for
an open-market transaction and transact the net
purchase or sale, whichever the case may be. The
Administrator may also agree with the
Administrator of one or more other individual
account plans (as described in Section 3(34) of
ERISA, and which is maintained by the Company, its
Subsidiaries or Affiliates, Lyondell Petrochemical
Company or its Subsidiaries or Affiliates and
provides for the same purchases and sales pursuant
to participant directives described in Paragraphs
6.4 and 6.5) to combine and match orders from all
of the plans and execute a "net" transaction, as
described above. The price per share allocated to
each purchase or sale order shall be the price
transacted for the "net" shares on the open-market
transaction date otherwise scheduled for the
orders under Subparagraph 6.7(a)(i). The price
transacted for a "net" transaction shall be the
price obtained on the open-market in the case of a
single transaction, and the weighted average of
the prices obtained on the open-market in the case
of multiple transactions.
(iv) Brokerage commissions, transfer fees and other
expenses actually incurred in any such sale or
purchase shall be equitably allocated and added to
the cost or subtracted from the proceeds of all
purchases or sales, as the case may be, effected
on a pricing day, whether pursuant to the netting
process described in Subparagraph 6.7(a)(iii), or
pursuant to actual separate transactions per
Member order.
(b) Purchases of Common Stock of Atlantic Richfield Company
with Member's contributions or Company contributions
under Sections 3 and 4:
(i) Purchases shall normally be made either in the
open-market or from Atlantic Richfield Company, at
prices to the Plan not in excess of the fair
market value of such Atlantic Richfield Company
Common Stock on the date of purchase thereof, as
determined by the Trustee.
(ii) Allocations to Members' Accounts will be made in
full and fractional shares.
(iii) The Trustee may limit the daily volume of
purchases to the extent it believes such action to
be in the best interests of the Members. When
Atlantic Richfield Company Common Stock is
purchased, the cost charged to the Accounts of
Members affected by such purchase shall be
determined on an
- 22 -
equitable basis in accordance with rules
to be adopted by the Administrator and
incorporating the following principles:
(A) The cost charged to each affected Member's
Account shall be based on the average cost
per share of all Atlantic Richfield Company
Common Stock purchased during whatever period
may be established by the Administrator.
(B) Brokerage commissions, transfer fees and
other expenses actually incurred in any such
purchase shall be added to the cost of any
such purchase.
(c) A Member may direct the Administrator to use any
available cash or funds held for the Member under
Subparagraph 6.2(c) to exercise any options, rights or
warrants issued with respect to Atlantic Richfield
Company Common Stock in the Member's Account. In the
absence of such direction, or if there are no available
funds, any such option, right or warrant having a
market value shall be sold for the Member's Account.
6.8 Voting of Atlantic Richfield Company Common Stock.
(a) The Trustee shall vote whole shares of Atlantic
Richfield Company Common Stock credited to each
Member's Account in accordance with such Members'
written instructions. Fractional shares of Atlantic
Richfield Company Common Stock shall be aggregated into
whole shares of stock and voted by the Trustee, to the
nearest whole vote, in the same proportion as shares
are to be voted by the Trustee pursuant to Members'
written instructions. In the absence of voting
instructions by one or more Members, the Trustee shall
vote uninstructed shares, to the nearest whole vote, in
the same proportion as shares are to be voted by the
Trustee pursuant to Members' written instructions. The
Trustee shall vote unallocated shares, to the nearest
whole vote, in the same proportion as allocated shares
are to be voted by the Trustee pursuant to Members'
written instructions.
(b) The Trustee shall exercise rights other than voting
rights attributable to whole shares of Atlantic
Richfield Company Common Stock credited to each
Member's Account in accordance with such Members'
written instructions. Rights attributable to
fractional shares of Atlantic Richfield Company Common
Stock (which for this purpose shall be aggregated into
whole shares of stock) shall be exercised by the
Trustee in the same proportion as rights which are
exercised by the Trustee pursuant to Members' written
instructions. In the absence of instructions by one or
more Members, the Trustee shall exercise uninstructed
rights in the same proportion as rights which are to be
exercised by the Trustee
- 23 -
pursuant to Members' written instructions.
The Trustee shall exercise rights attributable
to unallocated shares in the same proportion
as rights attributable to allocated shares
which are to be exercised by the Trustee pursuant to
Members' written instructions.
(c) The Trustee shall notify the Members of each occasion
for the exercise of voting rights and rights other than
voting rights within a reasonable time before such
rights are to be exercised. This notification shall
include all the information that the Company
distributes to shareholders regarding the exercise of
such rights.
6.9 Title of Investments.
All investments will be held in the name of the Trustee or
its nominees.
6.10 Allocation of Trust Earnings and Valuation of Trust Investments.
(a) Any cash dividends declared on Atlantic Richfield
Company Common Stock held in a Member's Account under
the ESOP Part of the Plan as of the record date for the
dividend shall be paid in cash to the Member (or, in
the event of death, to the Member's beneficiary) on, or
as soon as possible following, the payment date for the
dividend.
(b) Any cash dividends declared on Atlantic Richfield
Company Common Stock held in a loan suspense account as
of the record date for the dividend shall be used to
make payments on the Acquisition Loan used to acquire
the shares of stock held in such account.
(c) Except as provided in Subparagraphs 6.10(a) and (b),
all dividends or other distributions attributable to
shares of Atlantic Richfield Company Common Stock shall
be allocated to the Member whose Account is credited
with such shares.
(d) On the last day of each month, all income attributable
to the Money Market Fund shall be allocated to the
Member's Account in the ratio that each Member's Money
Market Fund Account balance bears to such account
balance of all such Members. For the purpose of
determining such allocation, the Money Market Fund
shall be valued at fair market value.
6.11 Purchase and Redemption of Equity Fund and Bond Fund Units.
Purchase and redemption of Equity Fund and Bond Fund units
shall be handled in accordance with the following rules and
such additional procedures, consistent with such rules, as
the Administrator may establish from time to time:
- 24 -
(a) Units of the Equity Fund and Bond Fund shall be
purchased or redeemed, pursuant to Member directions
under Paragraph 6.5, on each Wednesday and Friday,
covering all Member directives received by the
Administrator by noon Pacific time on the preceding
Company business day, except that if a Wednesday or
Friday is a Company holiday or a day on which trading
on the New York Stock Exchange is closed, the purchase
or redemption will be executed on the next day (a
Wednesday or Friday) on which the Plan executes a
transaction under this Subparagraph 6.11(a).
(b) If an unforeseeable administrative difficulty prevents
the execution of a transaction under Subparagraph
6.11(a), otherwise scheduled on a Wednesday or Friday,
such transaction will be executed on the first business
day thereafter which does not fall within one of the
two exceptions in Subparagraph 6.11(a).
(c) The Administrator may, in its discretion, combine the
purchase and redemption orders scheduled for a
Wednesday or Friday and transact the net purchase or
sale orders, whichever the case may be. The
Administrator may also agree with the Administrator of
one or more individual account plans [as described in
Section 3(34) of ERISA, and which is maintained by the
Company, its Subsidiaries or Affiliates, Lyondell
Petrochemical Company or its Subsidiaries or
Affiliates, and provides for the same purchase and
redemption procedure described in Subparagraph
6.11(a)], to combine orders from all of the plans and
execute a "net" transaction.
(d) When units of Equity Fund and Bond Fund are purchased or
redeemed, the cost or net proceeds charged or credited
to the Accounts of Members affected by such purchase or
redemption shall be determined on an equitable basis in
accordance with rules to be adopted by the Administrator,
which are consistent with the rules described in this
section, and incorporate the following principles:
(i) The net proceeds of any such redemption of units
of the Equity Fund and Bond Fund in a Member's
Account shall be credited to such Member's Account;
(ii) The cost of any such purchase of units of the
Equity Fund and Bond Fund for a Member's Account
shall be charged to such Member's Account;
(iii) The net proceeds and cost of units of the
Equity Fund and Bond Fund shall be based on the
net asset value of such units determined on the
valuation date next following the date the
purchase or redemption order is received by the
Administrator. The valuation date shall be
determined by the Administrator and shall occur on
at least a weekly basis. The net asset value of
units of the Equity Fund and Bond Fund will be
calculated by dividing the difference
- 25 -
between the value of the Equity Fund and Bond Fund
assets and Equity Fund and Bond Fund liabilities, as
the case may be, by the number of units outstanding with
respect to each fund; and
(iv) Brokerage commissions, transfer fees and other
expenses actually incurred in any such purchase or
redemption shall be added to the cost or
subtracted from the gross proceeds, of any such
purchase or redemption, respectively.
(e) Income earned by the Equity Fund and Bond Fund shall
automatically be reinvested in the Equity Fund or Bond
Fund, as the case may be. Income, gains and losses
shall be reflected in the net asset value of the units
of the Equity Fund and Bond Fund.
6.12 Voting of Money Market Fund, Equity Fund and Bond Fund Investments.
The Trustee, in accordance with the Trust Agreement, shall
exercise all voting and other rights associated with any
investments held in the Money Market Fund, Equity Fund and
Bond Fund.
6.13 Investment Advisory Fees.
The investment advisory fees, if any, incurred for
management of the Money Market Fund, Equity Fund and Bond
Fund are charged to each respective fund.
6.14 Member Protection.
No shares of Atlantic Richfield Company Common Stock held by
the ESOP Part of the Plan may be subject to a put, call or
other option, or buy/sell or similar arrangement. The
provisions of this Paragraph 6.14 shall continue to be
applicable to the shares of Atlantic Richfield Company
Common Stock held by the ESOP Part of the Plan even if such
part ceases to be an Employee Stock Ownership Plan under
Section 4945(e)(7) of the Code.
6.15 Confidentiality.
The Savings Plan Administrative Committee shall be
responsible for ensuring the adequacy of procedures
established by the Administrator to safeguard the
confidentiality of information relating to the purchasing,
holding and selling of Atlantic Richfield Company Common
Stock and any voting, tender or similar rights relating to
such stock.
- 26 -
SECTION 7
WITHDRAWALS DURING EMPLOYMENT
7.1 Partial Withdrawals.
(a) An application for partial withdrawal of funds must be
in the form prescribed by the Administrator.
Distribution will be made as soon as practicable after
the date the application is received by the
Administrator.
(b) A Member may make the following partial withdrawals
during employment with the Company; provided, that (i)
partial withdrawals under this Paragraph 7.1 are made
at not less than six month intervals and not earlier
than seven calendar days following (A) the date of a
direction under Paragraph 6.4 or 6.5; (B) the date of
an application for a loan under Section 12; or (C) the
date of an accelerated repayment of a loan under
Paragraph 12.8(c)(i), and (ii) Member contributions
made prior to January 1, 1987, must be withdrawn prior
to withdrawal of any other contributions and earnings:
(1) Items in the Member's Account derived from Member
contributions made prior to January 1, 1987;
(2) Items in the Member's Account derived from
earnings on Member contributions made prior to
January 1, 1987. If such items were not in the
Account for at least two years on the preceding
December 31, the Member's future contributions to
the Plan shall be suspended for six months;
(3) All items in the Member's Account derived from
Member contributions and earnings thereon. If a
Member makes a withdrawal under this subparagraph,
all Member contributions and earnings thereon
shall be distributed to the Member, and the
Member's future contributions to the Plan shall be
suspended for six months;
(4) Except for Company contributions made after June
30, 1988, and earnings thereon, and items
referenced in Subparagraph 7.1(b)(5), items in the
Member's Account derived from Company
contributions and earnings thereon. If such items
were not in the Account for at least two years on
the preceding December 31, the Member's future
contributions shall be suspended for six months; and
(5) Items in the Member's Account derived from Company
contributions and earnings thereon which were
transferred to the Predecessor Plan from a prior
plan, and which the Member elected not to make
available for withdrawal. If a Member makes a
withdrawal under this subparagraph, all Company
- 27 -
contributions made prior to the date of such
election, and earnings thereon shall be
distributed to the Member, and the Member's future
contributions to the Plan shall be suspended for
12 months.
7.2 Irrevocability of Election.
An election to make a partial withdrawal shall be
irrevocable upon receipt by the Administrator.
- 28 -
SECTION 8
PAYMENTS ON TERMINATION OF COMPANY EMPLOYMENT,
DIVORCE OR OTHER REASONS
8.1 Termination of Membership.
(a) If a Member's membership in the Plan is terminated due
to disability, termination of employment for any other
reason except death, or as the result of a sale
described in Subparagraph 2.3(b) or (c), the Member
shall receive all items in the Member's Account. Each
Member shall be fully vested at all times in all items
in the Member's Account, whether the same be derived
from his or her own contributions, Company
contributions, or earnings on either.
(b) Effective June 1, 1994, upon the election of the
Member, all items in a Member's Account shall be
distributed to the Member. Notwithstanding anything in
the Plan to the contrary, the Account of a Member to
whom this subparagraph applies shall be treated as
follows:
(i) With respect to a Member whose Account balance
exceeds $3,500, on a date which is 12 months from
the date the Member terminates membership under
Subparagraph 8.1(a), shares of Atlantic Richfield
Company Common Stock held in the Member's ESOP
Part of the Plan shall be designated as non-ESOP
Atlantic Richfield Company Common Stock.
(ii) The Member may not withdraw any funds from the
Member's Account between the date the Member
terminates membership under Subparagraph 8.1(a)
and the date of final distribution of the Member's
Account.
(iii) The Member may not convert funds held in an
investment alternative to another investment
alternative between the date which is 12 months
after the Member terminates membership under
Subparagraph 8.1(a) and the date of final
distribution of the Member's Account.
(iv) Notwithstanding anything to the contrary in this
Paragraph 8.1 and subject to the provisions of
Paragraph 8.7, a Member's Account shall be
distributed no later than age 65 or, if later, 12
months following termination of membership under
Subparagraph 8.1(a).
(v) In the case of the Member's death prior to final
distribution, the Member's Account shall be
distributed in accordance with Paragraph 8.2 of
the Plan.
- 29 -
(c) Notwithstanding anything to the contrary in this
Paragraph 8.1, all items in the Account of a Member who
has terminated membership, and whose Account balance is
$3,500 or less, shall be distributed 12 months
following the Member's termination of membership,
unless the Member elects an earlier distribution date.
(d) Notwithstanding anything in the Plan to the contrary,
when a Member elects to receive all items in the
Member's Account and, in conjunction therewith, directs
that items in his or her Account be converted pursuant
to Paragraph 6.4 or Paragraph 6.5, the conversion shall
be transacted on the first transaction date under the
Plan following the Member's termination of such
membership. Distributions under this Paragraph 8.1
shall be made in accordance with the requirements of
Section 409(h) of the Code.
8.2 Death.
(a) If a Member dies, or a former Member dies while
awaiting receipt of a distribution pursuant to
Paragraph 8.1, and it is established to the Plan's
satisfaction that the consent required under
Subparagraph 8.2(c), either has been obtained or was
not obtainable, all items in the Member's or former
Member's Account shall be paid to the beneficiary or
beneficiaries most recently designated by the Member or
former Member in such manner as prescribed by the
Administrator. If no such designation shall have been
made, or if all designated beneficiaries should die
before the Member or former Member, payment shall be
made to the Member's or former Member's estate.
(b) Except as provided in Subparagraph 8.2(c), if a Member
or former Member is survived by a spouse, all items in
the Member's or former Member's Account shall be paid
to the Member's or former Member's spouse.
(c) If a Member or former Member is survived by a spouse,
all items in a Member's or former Member's Account
shall be paid to the beneficiary or beneficiaries most
recently designated by the Member or former Member in
such manner as prescribed by the Administrator;
provided, (i) the surviving spouse of the Member or
former Member has irrevocably consented in writing to
the designation of the specific beneficiary or
beneficiaries, which designation may not be charged
without spousal consent (or the spouse expressly
permits designation by the Member or former Member
without any further spousal consent), such consent
acknowledged the effect of the election and such
consent was witnessed by a notary public, or (ii) it is
established to the Plan's satisfaction that the consent
required by Subparagraph 8.2(c)(i), could not be
obtained because the surviving spouse could not be
located or because of such other circumstances as the
Secretary of Treasury may by regulation prescribe. Any
consent
- 30 -
necessary under this paragraph shall be effective
only with respect to such spouse, or, in the
event it is established that the consent may not be
obtained, such designated spouse. A revocation of a
prior designation may be made by a Member without the
consent of the spouse at any time prior to the Member's
death. A consent that permits designation by the
Member or former Member without any requirement for
further consent by the spouse must acknowledge that the
spouse has the right to limit consent to a specific
beneficiary and that the spouse voluntarily elects to
relinquish such right.
(d) Any payment made under this paragraph on account of a
Member's death shall be made no later than 90 days
following the close of the Plan Year in which the Plan
receives certification of the Member's death.
8.3 Disability.
Disability means a medically determinable physical or mental
impairment resulting from illness or injury as a result of
which the Member is unable to perform one or more of the
substantial duties of the Member's normal work assignment
with the Company or of any work assignment which the Company
determines is available to the Member and for which the
Member is reasonably qualified by education, training or
experience to perform as determined by the Administrator
after review by the Medical Board or such other entity as
designated by the Administrator.
8.4 Divorce.
To the extent specified in a Qualified Domestic Relations
Order, as defined in Section 414(p) of the Code,
distributions from a Member's Account may be made to an
Alternate Payee, as defined in Section 414(p) of the Code,
prior to the Member's termination of membership under
Subparagraph 8.1(a), death, disability or retirement.
Distributions under this paragraph shall be made at the time
set forth in the Qualified Domestic Relations Order, or, if
such order provides, at the time elected by the Alternate Payee.
8.5 Rollover.
Effective January 1, 1993:
(a) Notwithstanding anything in this Section 8 to the
contrary, a distributee, as defined below may elect, at
a time and in the manner prescribed by the
Administrator, to have all or a portion of a
distribution under this Section 8, other than any
amount required to be distributed pursuant to Section
401(a)(9) of the Code, made payable to an eligible
retirement plan.
(b) For purposes of this Section 8, other than Paragraph
8.2, an eligible retirement plan is an individual
retirement account or annuity described in Section
408(a) or (b) of the Code, an annuity
- 31 -
plan described in Section 403(a) of the Code or a
qualified trust described in Section 401(a) of the Code
that accepts such distribution. For purposes of a
distribution under Paragraph 8.2, an eligible retirement
plan is an individual retirement account or annuity.
(c) Distributee means an Employee or former Employee, the
surviving spouse of such Employee or such Employee's
spouse or former spouse who is an alternate payee as
defined in Section 414(p) of the Code.
8.6 Notice.
With respect to a Member whose account exceeds $3,500, the
Administrator shall provide the notice required by Section
1.411(a)-11(c) of Income Tax Regulations no less than 30
days and no more than 90 days before the Member's date of
distribution; provided, however, that such distribution may
commence less than 30 days after the required notice is
given if:
(a) The Member is informed of the Members' right to a
period of at least 30 days after receiving the notice
to consider distribution options; and
(b) The Member, after receiving the notice, affirmatively
elects a distribution.
8.7 Distributions.
Notwithstanding anything in the Plan to the contrary, a
Member's Account shall be distributed in a lump sum, no
later than the first day of April following the calendar
year in which the Member attains age 70-1/2. Any amounts
subsequently allocated to a Member's Account shall be
distributed during the calendar year immediately following
the year of allocation.
8.8 Distribution of Benefits.
The distribution of benefits under the Plan to a Member who
has elected to receive such benefits shall begin not later
than the 60th day after the latest of the close of the Plan
Year in which (a) the Member attains age 65 or such earlier
normal retirement age as may be specified in the Plan; (b)
there occurs the tenth anniversary of the year in which the
Member commenced membership in the Plan; or (c) the Member's
service with the Company is terminated.
- 32 -
SECTION 9
ADMINISTRATION
SAVINGS PLAN ADMINISTRATIVE COMMITTEE
9.1 Savings Plan Administrative Committee.
The Plan shall be administered by a Savings Plan
Administrative Committee. The Committee shall consist of
the Vice President, Human Resources, of Atlantic Richfield
Company, who shall serve as Chairperson, and not less than
two other persons appointed by the Chairperson. Members of
the Committee shall serve without compensation. Vacancies
shall be filled by the Chairperson or the Chairperson's
delegate.
9.2 Rules of Conduct.
The Savings Plan Administrative Committee shall adopt such
rules for the conduct of its business and administration of
the Plan as it considers desirable; provided, they do not
conflict with the Plan.
9.3 Legal, Accounting, Clerical.
The Savings Plan Administrative Committee may authorize one
or more of its members or any agent to act on its behalf and
may contract for legal, accounting, clerical and other
services to carry out this Plan. Unless paid by the
Company, all expenses of the Company, the Administrator and
the Plan shall be paid by the Plan, to the extent they
constitute reasonable expenses of administering the Plan.
The Plan may reimburse expenses paid directly by the Company
or its designee. This provision shall be deemed a part of
any contract to provide for expenses of Plan administration,
whether or not the signatory to such contract is, as a
matter of convenience, the Company or its designee.
9.4 Interpretation of Provisions.
The Savings Plan Administrative Committee shall have full
discretion and final authority to determine eligibility for
benefits and to interpret the provisions of this Plan, to
decide questions arising in its administration, and to
establish such other rules for its administration as may be
desirable.
9.5 Records of Administration.
The Savings Plan Administrative Committee shall keep records
reflecting the administration of the Plan which shall be
subject to audit by the Company. Members may examine
records pertaining directly to themselves. At least
annually, the Savings Plan Administrative Committee shall
have mailed to each Member a statement of his or her Account
and such statement shall be deemed to have been accepted as
correct for all purposes of this Plan unless written notice
to the contrary is received by the Savings Plan
Administrative Committee or the Trustee within 30 days after
the date of mailing.
- 33 -
9.6 Claims for Benefits.
Applications for benefits must be made in such manner as
prescribed by the Administrator. The Administrator shall
have full discretion and final authority to determine
eligibility for benefits and to construe the terms of the
Plan in acting upon an initial application for benefits or
an appeal of a denial of an application for benefits. Each
application shall be acted upon and approved or disapproved
within 90 days following its receipt by the Administrator.
In the event special circumstances require an extension of
time for reviewing the initial application for benefits, the
Administrator shall make a determination as soon as
practicable but no later than 180 days following receipt of
the application. If any application for benefits is denied,
in whole or in part, the Administrator shall notify the
applicant in writing of such denial and of the applicant's
right to a review by the Administrator and shall set forth
in a manner calculated to be understood by the applicant,
specified reasons for such denial, specific references to
pertinent Plan provisions on which the denial is based, a
description of any additional material or information
necessary for the applicant to perfect the application, an
explanation of why such material or information is
necessary, and an explanation of the Plan's review
procedure.
Any person, or a duly authorized representative thereof,
whose application for benefits is denied in whole or in
part, may appeal from such denial to the Administrator for a
review of the decision by submitting to the Administrator
within 60 days after receiving notice of denial, a written
statement:
(a) Requesting a review of the application for benefits by
the Administrator;
(b) Setting forth all of the grounds upon which the request
for review is based and any facts in support thereof; and
(c) Setting forth any issues or comments which the
applicant deems relevant to the application.
The Administrator shall act upon each such appeal
application within 60 days after the later of receipt of
the applicant's request for review by the Administrator or
receipt of any additional materials reasonably requested
by the Administrator from such applicant. In the event
special circumstances require an extension of time for
reviewing the appeal, the Administrator shall make a
determination as soon as practicable but no later than 120
days following receipt of the appeal.
- 34 -
The Administrator shall make a full and fair review of
each such application and any written materials submitted
by the applicant or the Company in connection therewith
and may require the Company or the applicant to submit
within 30 days of written notice by the Administrator
therefor, such additional facts, documents, or other
evidence as the Administrator, in its sole discretion,
deems necessary or advisable in making such a review. The
Administrator shall have full discretion in making an
independent determination of the applicant's eligibility
for benefits under the Plan and shall have full discretion
to construe the terms of the Plan in making its review.
The decision of the Administrator on any application for
benefits shall be final and conclusive upon all persons.
If the Administrator denies an application in whole or in
part, the Administrator shall give written notice of its
decision to the applicant setting forth in a manner
calculated to be understood by the applicant the specific
reasons for such denial and specific references to the
pertinent Plan provisions on which the Administrator's
decision was based.
9.7 Liability of Committee.
No member of the Savings Plan Administrative Committee may
be liable for any action taken in good faith or for the
exercise of any power given the Savings Plan Administrative
Committee, or for the actions of other members of said
Committee unless and except to the extent that such
liability is imposed under law as a result of a breach by
such member of his or her fiduciary responsibilities.
9.8 Medical Board.
The Savings Plan Administrative Committee may appoint a
Medical Board consisting of not less than three physicians,
who shall be authorized to make, or have made, any physical
or mental examinations required or authorized by the
Administrator or by the provisions of this Plan.
9.9 Unlocated Member.
If the Committee is unable, after reasonable and diligent
effort, to locate a Member or beneficiary entitled to
payment under the Plan, such payment may be forfeited and
used to pay Plan expenses. If the Member or beneficiary
later files a claim for benefit, such benefit will be
reinstated.
9.10 Legal Representative.
The Savings Plan Administrative Committee shall act on
behalf of the Plan with respect to any claim or cause of
action, whether arising in the course of administrative or
judicial proceedings or otherwise, and shall be responsible
for initiating, pursuing and defending any such claim or
cause of action involving the Plan.
- 35 -
SECTION 10
AMENDMENTS, DISCONTINUANCE, LIABILITIES
10.1 Amendment of Plan.
This Plan may be amended by the Board of Directors of
Atlantic Richfield Company if, as amended, it continues to
be for the exclusive benefit of Employees. However, no
amendment shall reduce the Account of any Member as of the
date of such amendment.
10.2 Termination.
Atlantic Richfield Company intends to continue the Plan
indefinitely but reserves the right to terminate it at any
time, by action of its Board of Directors. If the Plan is
terminated, or if there is a complete discontinuance of
contributions under the Plan by the Company, all amounts
credited to Accounts of Members shall be held for
distribution as provided in Sections 7 and 8.
10.3 Liability of Company.
The Company shall have no liability for payments under the
Plan. Any payments under the Plan shall be made solely from
the fund held by the Trustee.
- 36 -
SECTION 11
MISCELLANEOUS
11.1 Employment.
This Plan shall not give any Member any right to be
continued in the employment of the Company.
11.2 Benefits Not Assignable.
Except as provided in Paragraph 8.4, no benefit under the
Plan shall be assignable or transferable in whole or in
part, either directly or by operation of law or otherwise,
and shall not be subject to attachment or other process.
11.3 Discharge of Liability.
If the Administrator deems any person incapable of receiving
benefits to which such person is entitled under the Plan, by
reason of minority, illness, infirmity, mental incompetency
or other incapacity, it may direct the Trustee to make
payment (other than United States savings bonds to which
such person may be entitled) directly for the benefit or the
account of such person or to any eligible person selected by
the Administrator to disburse such payment whose receipt
shall be a complete settlement therefor. Where such
incapacitated person is entitled to a distribution of any
United States savings bond, the distribution or redemption
of such bond shall be made or effected in accordance with
the government regulations applicable under the circumstances.
11.4 Governing Laws.
The Plan shall be governed by and construed in accordance
with federal laws governing employee benefit plans qualified
under the Code or with the laws of the State of Delaware, to
the extent not preempted by federal law.
11.5 Limitation on Mergers.
This Plan may not merge or consolidate with, or transfer any
of its assets or liabilities to, any other plan unless each
Member in the Plan would, if said other plan were to
terminate, receive a benefit immediately after the merger,
consolidation or transfer which is equal to, or greater
than, the benefit such Member would have been entitled to
receive immediately before the merger, consolidation or
transfer if the Plan had terminated.
11.6 Delegation of Fiduciary or Administrative Responsibilities.
Atlantic Richfield Company, by resolution of its Board of
Directors or by written action of any officer generally or
specifically named by such a resolution to take such an
action, and the Savings Plan Administrative Committee, by
resolution of said Committee, may at any time delegate to
- 37 -
any other named person or body, or reassume therefrom, any
of their respective fiduciary responsibilities or
administrative duties with respect to the Plan, including
the power to delegate and reassume such responsibilities and
duties by written action naming the person or body to whom
the responsibility has been delegated. However, only the
immediate delegate of Atlantic Richfield Company or of the
Savings Plan Administrative Committee, as the case may be,
may, if so authorized by Atlantic Richfield Company or said
Committee, delegate any such responsibilities or duties.
11.7 Named Fiduciary.
The named fiduciary with respect to the Plan is Atlantic
Richfield Company except that (a) as to any matter specified
in the Plan as being the responsibility or function of the
Savings Plan Administrative Committee, the named fiduciary
is said Committee, (b) as to any matter specified in the
Plan or in the trust agreement as being the responsibility
or function of the Trustee or Investment Officer of Atlantic
Richfield Company, the named fiduciary is the Trustee or the
Investment Officer, as the case may be, and as to any matter
specified in the Plan as being the responsibility or
function of the Treasurer of Atlantic Richfield Company, the
named fiduciary is such Treasurer.
11.8 Transferred Funds.
(a) Predecessor Plan Assets.
(i) Assets transferred on behalf of a Member to this
Plan from the Predecessor Plan shall be invested
in the same manner as such assets were invested
under the Predecessor Plan as of the transfer
date. Assets which were invested in Atlantic
Richfield Company Common Stock as of the transfer
date shall be invested in Atlantic Richfield
Company Common Stock under the non-ESOP Part of
the Plan.
(ii) The assets transferred on behalf of a Member to
this Plan from the Predecessor Plan shall continue
to be invested as described in Subparagraph
11.8(a)(i) until the Member directs reinvestment
of such assets pursuant to Paragraph 6.4 or 6.5 of
the Plan.
(b) Savings Plan Assets of a Subsidiary or Affiliate
Upon the transfer of an Employee eligible to
participate in this Plan from a Subsidiary or
Affiliate, any assets maintained under a savings plan
of such Subsidiary or Affiliate on behalf of such
Employee will be transferred to this Plan in the same
investment alternative under which held as of the
transfer date, and such transferred assets will be
subject to the reinvestment provisions under Paragraph
6.4 or 6.5, except as provided in the following special
conditions:
- 38 -
(i) Any assets transferred on behalf of a Member which
have been invested in Common Stock of a Subsidiary
or Affiliate in the subaccount attributable to the
Member's contributions under the savings plan of a
Subsidiary or Affiliate will remain so invested,
with future dividends being reinvested in such
stock under the Member's Account, absent the
Member's direction to reinvest such assets
pursuant to Paragraph 6.5 of the Plan; provided,
however, that any assets converted from the Common
Stock of a Subsidiary or Affiliate to another
investment alternative under the Plan may not be
reinvested in Common Stock of a Subsidiary or
Affiliate.
(ii) Any assets transferred on behalf of a Member which
have been invested in the Common Stock of a
Subsidiary or Affiliate in the subaccount
attributable to Company contributions under the
savings plan of a Subsidiary or Affiliate, will
remain so invested, with future dividends being
reinvested in such stock under the Member's
Account; provided, however, that the Member may
elect to convert such assets to Atlantic Richfield
Company Common Stock held under the ESOP Part of
the Plan and any assets so converted may not be
reinvested in the Common Stock of a Subsidiary or
Affiliate.
(iii) Common Stock of a Subsidiary or Affiliate
held by the Plan shall be subject to the sales and
voting provisions of Section 6.
- 39 -
SECTION 12
LOANS TO MEMBERS
12.1 General.
A Member may borrow from his or her Account in accordance
with the terms and conditions set forth in this Section 12
and such additional rules, consistent with such terms and
conditions, which the Administrator may establish from time
to time.
12.2 Eligibility.
To be eligible to apply for and receive a loan, the Member
must be in receipt of regular earnings. The loan shall be
irrevocable upon the earlier of:
(a) Endorsement of the check representing the loan
proceeds; or
(b) Expiration of ten days from issuance of such check.
12.3 Loan Amount.
(a) The maximum loan shall be the greater of (i) or (ii),
below:
(i) The lesser of $10,000 or the value of the Member's
Account (excluding United States Savings Bonds); or
(ii) The lesser of one half of the Member's Account
(excluding United States Savings Bonds), or $50,000.
(b) A loan must be in cash, in increments of $100 and in an
amount not less than $1,000.
(c) The maximum loan amount shall be reduced to the extent
necessary to prevent each installment of the loan
repayment, including principal and interest, when added
to installments under any outstanding loan under
another Atlantic Richfield Company Savings or Capital
Accumulation Plan from exceeding 25 percent of a
Member's biweekly Base Pay.
(d) The $50,000 maximum loan amount shall be reduced by the
highest outstanding balance of any loan during the 12
months preceding the date of the loan application.
(e) The value of Common Stock of the Company, a Subsidiary
or Affiliate and Lyondell Petrochemical Company or
Equity Fund, or Bond Fund units for purposes of
Subparagraph 12.3(a), will be determined on the sale
date, pursuant to Paragraph 6.7 or 6.11, immediately
preceding the date the loan application is received by
the Administrator.
- 40 -
12.4 Frequency.
(a) A Member may have such number of loan outstanding at
any time as shall be determined by the Administrator.
(b) A loan application may be submitted only once during
any 30-day period and a loan application may not be
submitted earlier than seven days following receipt by
the Administrator of a Member's application to make a
purchase or sale under Paragraph 6.5 or a partial
withdrawal under Paragraph 7.1.
(c) A loan application may not be submitted earlier than 30
days following repayment of a previous loan under this Plan
or any other Atlantic Richfield Capital Accumulation or
Savings Plan.
12.5 Interest Rate.
A loan shall bear interest at a rate established and
communicated by the Savings Plan Administrative Committee to
provide the Plan with a rate of return commensurate with
prevailing interest rates charged on similar commercial
loans by persons in the business of lending money.
12.6 Security.
(a) Each loan must be evidenced by a loan agreement
executed by the Member for the amount of the loan,
including principal and interest, payable to the order
of the Trustee.
(b) The security for the loan shall be the assignment to
the Trustee of the Member's right and interest in that
portion of the Member's Account which equals the amount
of the loan plus accrued but unpaid interest.
12.7 Funding of the Loan.
(a) The Member shall direct, on a form prescribed by the
Administrator, which assets shall be used to provide
the loan proceeds; provided, however, that Company
contributions made after June 30, 1988, that are
applied under the ESOP Part of the Plan, and earnings
thereon, may not be used to fund a loan. To the extent
the Member does not give such directions, the loan will
be funded in accordance with procedures established by
the Administrator.
(b) The value of Common Stock of Atlantic Richfield
Company, a Subsidiary or Affiliate, or Lyondell
Petrochemical Company, Equity Fund or Bond Fund units
sold to provide the loan proceeds shall be determined
on the sale date, pursuant to Paragraph 6.7 or 6.11,
immediately following the date the loan application is
received by the Administrator.
- 41 -
12.8 Repayment of Loan.
(a) As determined by the Member, but subject to the
restriction in Subparagraph 12.3(c), a loan may be
repaid over a period of one, two, three, four or five
years or, in the case of a loan used to acquire the
Member's principal residence, such longer term as
determined by the Administrator and permitted under
Section 72(p) of the Code.
(b) Principal and interest shall be amortized, on a level
basis, over the term of the loan.
(c) Except as provided below, payments shall be made by
means of payroll deductions, the authorization of which
shall be irrevocable.
(i) The loan may be repaid in full at any time without
penalty.
(ii) If a Member is not in receipt of regular earnings
sufficient to permit repayment of the loan,
repayment shall be made by means prescribed by the
Administrator.
Repaid principal and interest shall be credited to the
Member's Money Market Fund account.
12.9 Deemed Distribution.
A distribution of the unpaid principal shall be deemed to
have been made to the Member, if the Member:
(a) Separates from service for any reason, including
retirement, termination of employment, divestiture or
death. The deemed distribution shall occur upon the
earlier of 12 months following termination of
membership or the date the loan was due.
(b) Fails to make repayment under Subparagraph 12.8(c)(ii)
for a period of seven consecutive scheduled payment
dates.
(c) Fails to receive regular earnings sufficient to permit
repayment of the loan for more than seven consecutive
pay periods.
12.10 Default.
If the Member is not in receipt of regular earnings
sufficient to permit repayment of the loan for a period
exceeding seven consecutive pay periods, and other
arrangements acceptable to the Administrator have not been
agreed to by the Member, the loan will be deemed in default
and the Administrator will realize on the security in
accordance with applicable laws.
- 42 -
SECTION 13
SPECIAL PROVISIONS APPLICABLE TO FORMER PARTICIPANTS OF
THE SAVINGS FUND PLAN FOR SALARIED EMPLOYEES OF THE
ANACONDA DIVISIONS OF ATLANTIC RICHFIELD COMPANY
13.1 Effective July 1, 1983, the Savings Fund Plan For Salaried
Employees of the Anaconda divisions of Atlantic Richfield
Company (the "Anaconda Plan") was merged into Atlantic
Richfield Savings Plan. Effective July 1, 1988, certain
assets and liabilities under the Atlantic Richfield Savings
Plan III were transferred to this Plan. The rights and
benefits under the Plan of persons (a) with respect to whom
assets and liabilities were transferred from the Atlantic
Richfield Savings Plan III, and (b) who were participants in
the Anaconda Plan as of the date of its merger into the
Atlantic Richfield Savings Plan III shall be governed by the
provisions of the Plan, except as provided in this Section 13.
Such persons described in the preceding sentence are referred
to in this Section 13, where appropriate, as "Former Anaconda
Participants".
13.2 With respect to accounts transferred from the Anaconda Plan,
anything in Paragraph 7.1 of the Plan to the contrary
notwithstanding, a Former Anaconda Participant may make
partial withdrawals during employment with the Company,
without penalty, of all items transferred from the Anaconda
Plan with the exception of those items the Member did not
elect to make available for withdrawal under the terms of the
Atlantic Richfield Savings Plan III; provided, that partial
withdrawals are made at not less than six month intervals.
Withdrawals shall be made in entire year classes (as such
term was defined in the Anaconda Plan).
13.3 With respect to accounts transferred from the Anaconda Plan,
anything in Subparagraph 6.5(a) of the Plan to the contrary
notwithstanding, a Former Anaconda Participant's election to
sell shares of Atlantic Richfield Company Common Stock shall
apply to one or more entire class years (as defined in the
Anaconda Plan).
- 43 -
SECTION 14
SPECIAL PROVISIONS APPLICABLE TO FORMER MEMBERS OF
THE ATLANTIC RICHFIELD AFFILIATE SAVINGS PLAN
14.1 Effective September 1, 1983, the assets and liabilities of
the Atlantic Richfield Affiliate Savings Plan (the
"Affiliate Plan") allocable to Members who as of January 1,
1983 ceased eligibility to contribute to said plan, were
transferred to the Atlantic Richfield Savings Plan.
Effective July 1, 1988, certain assets and liabilities under
the Atlantic Richfield Savings Plan were transferred to this
Plan. The rights and benefits under the Plan of persons
with respect to whom assets and liabilities were transferred
(a) from the Affiliate Plan to the Atlantic Richfield
Savings Plan, and (b) from the Atlantic Richfield Savings
Plan to this Plan shall be governed by the provisions of
the Plan, except as provided in this Section 14. Such
persons described in the preceding sentence are referred to
in this Section 14, where appropriate, as "Former Affiliate
Members".
14.2 With respect to accounts transferred from the Affiliate
Plan, anything in Paragraph 7.1 of the Plan to the contrary
notwithstanding, a Former Affiliate Member may make partial
withdrawals during employment with the Company of all items
transferred from the Affiliate Plan with the exception of
those items the Member did not elect to make available for
withdrawal under the terms of the Atlantic Richfield Savings
Plan; provided, that partial withdrawals are made at not
less than six month intervals.
- 44 -
SECTION 15
TOP HEAVY PROVISIONS
If the Plan is or becomes Top Heavy in any Plan Year beginning
after December 31, 1983, the provisions of this Section 15 will
supersede any conflicting provisions in the Plan.
15.1 Definitions.
(a) Key Employee means an Employee, former Employee or an
Employee's beneficiary who at any time during the
determination period is:
(i) An officer of the Company who has annual
Compensation greater than 50 percent of the amount
in effect under Section 415(b)(1)(A) of the Code
for the Plan Year;
(ii) One of the ten Employees owning (or considered as
owning within the meaning of Section 318 of the
Code) the largest interest in the Company;
provided, such Employee's annual Compensation from
the Company exceeds the dollar limitation under
Section 415(c)(1)(A) of the Code. If two or more
Employees have the same ownership interest, the
Employee with the greater annual Compensation from
the Company for the Plan Year shall be considered
to own the larger interest in the Company;
(iii) A five percent owner of the Company; or
(iv) A one percent owner of the Company who has annual
Compensation from the Company of more than
$150,000.
The determination period of the Plan is the Plan Year
containing the Determination Date and the four
preceding Plan Years.
The determination of who is a Key Employee will be made
in accordance with Section 416(i)(1) of the Code and
the regulations thereunder.
(b) Top Heavy Plan: For any Plan Year after December 31,
1983, this Plan is Top Heavy if any of the following
conditions exist:
(i) If the Top Heavy Ratio for this Plan exceeds 60
percent and this Plan is not part of any Required
Aggregation Group or Permissive Aggregation Group
of plans;
(ii) If this Plan is a part of a Required Aggregation
Group of plans (but which is not part of a
Permissive Aggregation Group) and the Top Heavy
Ratio for the group of plans exceeds 60 percent;
or
- 45 -
(iii) If this Plan is a part of a Required
Aggregation Group of plans and part of a
Permissive Aggregation Group and the Top Heavy
Ratio for the Permissive Aggregation Group exceeds
60 percent.
(c) Top Heavy Ratio.
(i) If the Company maintains one or more defined
contribution plans (including any Simplified
Employee Pension Plan) and the Company has not
maintained any defined benefit plan which during
the five-year period ending on the Determination
Date(s) has or has had accrued benefits, the Top
Heavy Ratio for this plan alone or for the
Required or Permissive Aggregation Group as
appropriate is a fraction, the numerator of which
is the sum of the account balances of all Key
Employees as of the Determination Date(s)
[including any part of any account balance
distributed in the five-year period ending on the
Determination Date(s)], and the denominator of
which is the sum of all account balances
[including any part of any account balance
distributed in the five-year period ending on the
Determination Date(s)], both computed in
accordance with Section 416 of the Code and the
regulations thereunder. Both the numerator and
denominator of the Top Heavy Ratio are adjusted to
reflect any contribution not actually made as of
the Determination Date, but which is required to
be taken into account on that date under Section
416 of the Code and the regulations thereunder.
(ii) If the Company maintains one or more defined contri-
bution plans (including any Simplified Employee Pension
Plan) and the Company maintains or has maintained
one or more defined benefit plans which during the
five-year period ending on the Determination
Date(s) has or has had any accrued benefits, the
Top Heavy Ratio for any Required or Permissive
Aggregation Group as appropriate is a fraction,
the numerator of which is the sum of account
balances under the aggregated defined contribution
plan or plans for all Key Employees, determined in
accordance with Subparagraph 15.1(c)(i), and the
Present Value of accrued benefits under the
aggregated defined benefit plan or plans for all
Key Employees as of the Determination Date(s), and
the denominator of which is the sum of the account
balances under the aggregated defined contribution
plan or plans for all Members, determined in
accordance with Subparagraph 15.1(c)(i), and the
Present Value of accrued benefits under the
defined benefit plan or plans for all Members as
of the Determination Date(s), all determined in
accordance with Section 416 of the Code and the
regulations thereunder. The accrued benefits
under a defined benefit plan in both the
- 46 -
numerator and denominator of the Top Heavy Ratio
are adjusted for any distribution of an accrued
benefit made in the five-year period ending on the
Determination Date.
(iii) For purposes of Subparagraphs 15.1(c)(i) and (c)(ii),
the value of account balances and the Present Value of
accrued benefits will be determined as of the most
recent Valuation Date that falls within or ends with
the 12-month period ending on the Determination Date
except as provided in Section 416 of the Code and
the regulations thereunder for the first and second
Plan Years of a defined benefit plan. The account
balances and accrued benefits of a Member (A) who is
not a Key Employee but who was a Key Employee in a
prior year, or (B) effective January 1, 1985, who
has not been credited with at least one Hour of
Service with a Company maintaining the Plan at any
time during the five-year period ending on the
Determination Date will be disregarded. The
calculation of the Top Heavy Ratio, and the extent
to which distributions, rollovers and transfers are
taken into account will be made in accordance with
Section 416 of the Code and the regulations
thereunder. Deductible Employee contributions will
not be taken into account for purposes of computing
the Top Heavy Ratio. When aggregating plans, the
value of account balances and accrued benefits will
be calculated with reference to the Determination
Dates that fall within the same calendar year.
(iv) The accrued benefit of a Member other than a Key
Employee shall be determined under the method, (A) if
any, that uniformly applies for accrual purposes under
all defined benefit plans maintained by the Company,
or (B) absent such method, as if such benefits
accrued not more rapidly than the slowest accrued
rate permitted under the fractional rule of Section
411(b)(1)(C) of the Code.
(d) Permissive Aggregation Group: The Required Aggregation
Group of plans plus any other plan or plans of the
Company which, when considered as a group with the
Required Aggregation Group, would continue to satisfy
the requirements of Section 401(a)(4) and Section 410
of the Code
(e) Required Aggregation Group means:.
(i) Each qualified plan of the Company in which at
least one Key Employee participates or
participated at any time during the determination
period (regardless of whether the plan
terminated); and
(ii) Any other qualified plan of the Company which
enables a plan described in Subparagraph 15.1(e)(i)
to meet the requirements of Section 401(a)(4) or
Section 410 of the Code.
- 47 -
(f) Determination Date means for any Plan Year the last day
of the preceding Plan Year. For the first Plan Year of
the Plan, the last day of that year.
(g) Valuation Date means December 31 of each year.
(h) Present Value: Present Value shall be based on the
interest rate and mortality tables specified in the
Company's defined benefit plan.
(i) Compensation means all compensation, as that term is
defined for Section 415 purposes, but including amounts
contributed by the Company pursuant to salary reduction
agreements which are excludable from the Employee's
income under Code Section 125, Section 402(e)(3),
Section 402(h) and Section 403(b).
15.2 Minimum Allocation.
(a) Except as otherwise provided in 15.2(b), (c) and (d),
the Company contributions allocated on behalf of any
Member who is not a Key Employee shall not be less than
the lesser of three percent of such Member's
Compensation or in the case where the Company has no
defined benefit plan which designates the Plan to
satisfy Section 401 of the Code, the largest percentage
of Company contributions, as a percentage of the first
$150,000 of the Key Employee's Compensation, allocated
on behalf of any Key Employee for that year. The
minimum allocation is determined without regard to any
Social Security contribution. This minimum allocation
shall be made even though, under other Plan provisions,
the Member would not otherwise be entitled to receive
an allocation, or would have received a lesser
allocation for the year because of (i) the Member's
failure to complete 1,000 Hours of Service, or (ii) the
Member's failure to make mandatory employee
contributions to the Plan, or (iii) Compensation less
than a stated amount.
(b) The provision in Subparagraph 15.2(a), shall not apply
to any Member who was not employed by the Company on
the last day of the Plan Year.
(c) If Members of the Plan are covered by one or more
defined benefit plans maintained by the Company or its
Subsidiaries, the minimum allocation or benefit
requirements applicable to Top Heavy plans shall first
be met by such defined benefit plan or plans.
(d) If Members of the Plan are covered by one or more
defined contribution plans maintained by the Company or
its Subsidiaries, and are not covered by any defined
benefit plans of the Company or its Subsidiaries, the
minimum allocation requirement will be met by the
defined contribution plan in which the Employee is an
active Member in the following order:
- 48 -
1. Money Purchase Pension Plan
2. Profit Sharing Plan, and
3. Stock Bonus Plan
(e) For purposes of satisfying the minimum allocation
requirement of this Paragraph 15.2, Company
contributions under Paragraph 4.1 may not be taken into
account.
15.3 The minimum accrued benefit required [to the extent required
to be nonforfeitable under Section 416(b)] may not be
suspended or forfeited under Code Section 411(a)(3)(B) or
Section 411(a)(3)(D).
15.4 For any Plan Year in which the Plan is Top Heavy, only the
first $150,000 (or such larger amount as may be prescribed by
the Secretary of Treasury or the Secretary's delegate) of each
Member's annual Compensation will be taken into account for
purposes of determining benefits under the Plan.
15.5 In any Plan Year in which the Top Heavy Ratio exceeds 60
percent the denominators of the defined benefit fraction and
defined contribution fraction [as previously defined in the
Plan] shall be computed using 100 percent of the dollar
limitation instead of 125 percent. The preceding sentence
shall not apply to an Employee so long as there are no:
(a) Company contributions, forfeitures or voluntary
nondeductible contributions allocated to such Employee,
or
(b) Accruals for such Employee under any qualified defined
benefit plan.
15.6 In determining the highest rate of contribution applicable
to any Key Employee, amounts that such Key Employee elects
to defer under an arrangement qualified under Section 401(k)
of the Code will be counted for the purposes of Section 416
of the Code.
- 49 -
ATLANTIC RICHFIELD
SAVINGS PLAN III
To record the adoption of the amended and restated Atlantic
Richfield Savings Plan III, effective July 1, 1994, the
undersigned, being duly authorized to act on behalf of Atlantic
Richfield Company has executed this plan document at Los Angeles,
California on the 24th day of October, 1994.
ATTEST: ATLANTIC RICHFIELD COMPANY
/s/ARMINEH SIMONIAN /S/JOHN H. KELLY
BY:____________________ BY:________________________
John H. Kelly
Vice President
Human Resources
- 50 -