EXHIBIT 10.7(b)
AMENDMENT NO. 1
TO
ATLANTIC RICHFIELD COMPANY
EXECUTIVE LIFE INSURANCE PLAN
___________________________
Pursuant to authority contained in resolutions adopted by the Board of Directors
on July 28, 1997, the following amendment is hereby made to the Atlantic
Richfield Company Executive Life Insurance Plan (the "Plan"), effective July 28,
1997, except as stated otherwise.
1. Paragraphs 1.2, 1.4 and 1.8 of the Plan are amended to read as follows:
"1.2 "Administrative Committee" means the committee appointed by the
Senior Vice President, Human Resources, of the Company, and consisting of
at least three employees of the Company, which administers this Plan
pursuant to Article XII.
1.4 "Beneficiary(s)" means the person or persons designated by the
Participant in accordance with Article XIII of this Plan.
1.8 "Company" means ARCO and its Subsidiaries."
2. Paragraphs 1.28, 1.29, 1.30, 1.31, 1.32, 1.33 and 1.34 are added to Article
I of the Plan to read as follows:
"1.28 "Anticipatory Change of Control" means (a) the execution of an
agreement or a written document which, if the subject thereof were
consummated, would result in a Change of Control; (b) a public announcement
by any Person, including ARCO, of an intent to take an action(s) which, if
consummated, would result in a Change of Control; or (c) the delivery of a
signed, written statement to the Trustee of the Change of Control Trust and
ARCO's Independent Auditor by the Chief Financial Officer and General
Counsel of ARCO that an Anticipatory Change of Control is in effect,
provided that, with respect to any of the above three circumstances, the
Anticipatory Change of Control shall not be effective until approved by
either the Board or the Executive Committee of the Board.
1.29 "ARCO" means Atlantic Richfield Company, its successors and
assigns.
1.30 "Benefit Trigger Window" means the 24-month period commencing
on the date that a Change of Control occurs.
1
1.31 "Change of Control" means:
(a) Consummation of a reorganization, merger or consolidation or sale
or other disposition of all or substantially all of the assets of
ARCO (a "Business Combination"), unless, in each case, following
such Business Combination:
(i) All or substantially all of the individuals and entities
who were the beneficial owners, respectively, of the then
outstanding shares of common stock (the "Outstanding
Common Stock") of ARCO and the combined voting power of
the then outstanding voting securities entitled to vote
generally in the election of directors (the "Outstanding
Voting Securities") of ARCO immediately prior to such
Business Combination beneficially own, directly or
indirectly, more than 60 percent of, respectively, the
then Outstanding Common Stock and the combined voting
power of the then Outstanding Voting Securities entitled
to vote generally in the election of directors, as the
case may be, of the corporation resulting from such
Business Combination (including, without limitation, a
corporation which, as a result of such transaction, owns
ARCO or all or substantially all of ARCO's assets either
directly or through one or more subsidiaries) in
substantially the same proportions as their ownership,
immediately prior to such Business Combination, of the
Outstanding Common Stock and Outstanding Voting
Securities, as the case may be;
(ii) No Person (excluding any corporation resulting from such
Business Combination or any employee benefit plan (or
related trust) of ARCO or such corporation resulting from
such Business Combination) beneficially owns, directly or
indirectly, 25 percent or more of, respectively, the then
Outstanding Common Stock of such corporation resulting
from such Business Combination or the combined voting
power of the then Outstanding Voting Securities of such
corporation, except to the extent that such ownership
existed immediately prior to the Business Combination; and
(iii) At least a majority of the members of the board of
directors of the corporation resulting from such Business
Combination were members of the Incumbent Board at the
time of the execution of the initial agreement, or of the
action of the Board, providing for such Business
Combination; or
2
(b) The acquisition by any Person of beneficial ownership (within the
meaning of Rule 13d-3 or Rule 13d-5 promulgated under the
Exchange Act) of 25 percent or more of either (i) the Outstanding
Common Stock of ARCO or (ii) the Outstanding Voting Securities of
ARCO; provided, however, that for purposes of this Subsection
(b), the following shall not constitute a Change of Control: (1)
any acquisition by any employee benefit plan (or related trust)
sponsored or maintained by ARCO or any corporation controlled by
ARCO; (2) any acquisition by ARCO or any increase in beneficial
ownership resulting solely from an acquisition by ARCO; (3) any
acquisition by any corporation pursuant to a Business Combination
which complies with clauses (i), (ii) and (iii) of Subsection
(a); or (4) any acquisition directly from ARCO pursuant to a
transaction (other than a Business Combination) approved by the
Board after July 28, 1997; and provided, further, that in any
event, without regard to the manner in which the level of
ownership is attained, the ownership by any Person of 40 percent
or more of the Outstanding Common Stock of ARCO or Outstanding
Voting Securities of ARCO shall constitute a Change of Control;
or
(c) Individuals who, as of July 28, 1997, constitute the Board (the
"Incumbent Board") cease for any reason to constitute at least a
majority of the Board; provided, however, that any individual
becoming a director subsequent to such date whose election, or
nomination for election by ARCO's stockholders, was approved by a
vote of at least a majority of the directors then comprising the
Incumbent Board shall be considered as though such individual
were a member of the Incumbent Board, except that any such
individual whose initial assumption of office occurs as a result
of an actual or threatened election contest with respect to the
election or removal of directors or other actual or threatened
solicitation of proxies or consents by or on behalf of a Person
shall not be considered an Incumbent Director; or
(d) Approval by the stockholders of ARCO of a complete liquidation or
dissolution of ARCO.
1.32 "Exchange Act" means the Securities Exchange Act of 1934, as
amended.
1.33 "Person" means any individual, corporation, firm partnership,
governmental body, entity or group and shall include any person within the
meaning of (S)13(d)(3) or (S)14(d)(2) of the Exchange Act.
1.34 "Surviving Entity" means the entity which exists following a
Change of Control and which employs the individuals who were Eligible
Employees under Paragraph 1.12 immediately prior to the Change of Control."
3. Effective June 28, 1990, Article IX of the Plan is amended to read as
follows:
3
"ARTICLE IX
Termination of Employment
9.1 In the event of Termination of Employment prior to the completion
of five (5) years of Service, participation of the Participant in this Plan
and coverage of the Participant under any Policy issued pursuant to this
Plan shall terminate, all incidents of ownership of the Policy (if any)
held by the Participant shall be transferred to the Company, which shall
retain all incidents of ownership of the Policy on and after such date, and
the Company shall have no further legal or equitable obligations of any
kind to the Participant under this Plan.
9.2 In the event of Termination of Employment prior to Retirement
Eligibility and after five (5) Years of Service, the Participant shall be
entitled to purchase the Company's interest in the Policy for an amount
equal to either the Company's cumulative premium outlay in the Policy or
the cash value of the Policy, whichever is greater. If the Participant does
not elect to purchase the Company's interest in the Policy all incidents of
ownership of the Policy (if any) held by the Participant shall be
transferred to the Company. At the time the Participant purchases the
Company's interests in the Policy, or the Participant's incidents of
ownership are transferred to the Company, the Company shall have no further
legal or equitable obligations of any kind to the Participant under this
Plan."
4. Article IX through XIII of the Plan are renumbered as Articles X through
XIV and a new Article IX is added to the Plan to read as follows:
"ARTICLE IX
Continuation of Coverage - Change of Control
9.1 If an Employee who is a Participant in the Plan as of the date of
a Change of Control is terminated from employment from the Surviving Entity
during the Benefit Trigger Window under any of the circumstances described
under Paragraph 9.2, this Plan shall remain in effect for the Applicable
Period described under Paragraph 9.3, under terms and provisions no less
favorable than were in effect as of the date of the Change of Control,
provided that the former Employee complies with any requirements of the
Special Plan Administrator regarding the administration of the Plan
including the amount or time for making Participant contributions, and
provided, further, that failure of the Participant to so comply shall
result in a cancellation of coverage on the date of such delinquency with
no right of re-instatement.
9.2 Termination of Employment shall mean termination of employment
during the Benefit Trigger Window by the Surviving Entity, other than for
cause, and with respect to Grades E0, E1, E2 and E3 shall also mean the
Employee's voluntary termination following the Surviving Entity's request
to accept a (a)
4
demotion to a lesser job, (b) reduction in Base Salary plus Salary Grade
Target AIP Award of ten percent or more, or (c) relocation of the principal
place of work which would constitute a deductible moving expense under
(S)217 of the Internal Revenue Code. With respect to Grades E4, 10 and 9,
Clause (a) shall not apply.
9.3 In the event of termination of employment under Paragraph 9.2,
the Participant will be entitled to maintain coverage, as described in
Paragraph 9.1, during the Applicable Period as follows:
========================================================
Applicable Period of Executive Life
Insurance Continuation Following Termination
========================================================
Period of Benefit
Employee Continuation
Level (Months)
========================================================
EO and E1 36
--------------------------------------------------------
E2 36
--------------------------------------------------------
E3 24
--------------------------------------------------------
All Others 18
--------------------------------------------------------
5. Article XI of the Plan is amended to read as follows:
"ARTICLE XI
Amendment and Termination of Plan
11.1 Amendment and Termination. Except as provided in Paragraph 11.3
and 11.4, the Company may at any time amend or terminate this Plan in whole
or in part. If this Plan is terminated by the Company prior to the
commencement of any benefit payments to the Participant or to the
Beneficiary, the Participant shall have the same rights as under Article IV
of this Plan.
11.2 Termination After Commencement of Plan Benefit Payments. If this
Plan is terminated by the Company after the commencement of any benefit
payments to the Participant or to the Beneficiary, the Company shall be
obligated to continue such payments in accordance with the terms of this
Plan as in existence immediately prior to termination of this Plan.
11.3 The Plan may not be amended during an Anticipatory Change of
Control, except that the Board of Directors, as defined above, may amend
the Plan during such a period as it may deem reasonably necessary, upon
advice of counsel, to further the interest of the Company and its
shareholders regarding any legal requirements and, provided further, that
any such amendment which reduces, or could reduce, the value of any benefit
of a Participant, as determined in the sole discretion of the Special Plan
Administrator, shall provide substantially equivalent value in replacement
thereof to the Participant.
5
11.4 The Plan may not be amended on or after a Change of Control."
Executed this 27th day of March, 1998
ATTEST ATLANTIC RICHFIELD COMPANY
/s/ ARMINEH SIMONIAN /s/ JOHN H. KELLY
BY: ______________________ BY: _________________________
Armineh Simonian John H. Kelly
Senior Vice President
Human Resources
6