EXHIBIT 10.9
VASTAR RESOURCES, INC.
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VASTAR RESOURCES, INC.
CAPITAL ACCUMULATION PLAN
Amendment and Restatement
Effective As Of March 15, 1999
VASTAR RESOURCES, INC
CAPITAL ACCUMULATION PLAN
To record the adoption of the amended and restated Vastar Resources, Inc.
Capital Accumulation Plan, effective March 15, 1999, the undersigned, being duly
authorized to act on behalf of Vastar Resources, Inc. has executed this plan
document at Los Angeles, California on the 10th day of December, 1999.
ATTEST: VASTAR RESOURCES, INC.
/s/ JONATHAN D. EDELFELT /s/ JEFFREY M. BENDER
By: ----------------------------- By: ----------------------------
Jonathan D. Edelfelt Jeffrey M. Bender
Associate Secretary Vice President
Human Resources
VASTAR RESOURCES, INC.
CAPITAL ACCUMULATION PLAN
TABLE OF CONTENTS
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Page No.
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INTRODUCTION......................................................... 1
Section 1 - DEFINITION
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1.1 Acquisition Loan..................................... 2
1.2 Administrator........................................ 2
1.3 Annual Earnings or Earnings.......................... 2
1.4 Capital Accumulation Plan Administrative Committee... 2
1.5 Code................................................. 2
1.6 Company.............................................. 2
1.7 Credited Company Service............................. 2
1.8 Effective Date....................................... 2
1.9 Elective Deferrals or Deferrals...................... 2
1.10 Employee............................................. 3
1.11 Employee Contribution Agreement...................... 3
1.12 ERISA................................................ 3
1.13 Financed Shares...................................... 3
1.14 Former Member........................................ 3
1.15 Highly Compensated Employee.......................... 3
1.16 Hour of Service...................................... 4
1.17 Matching Contributions............................... 5
1.18 Member............................................... 5
1.19 Member's Account or Account.......................... 5
1.20 Member Contributions................................. 6
1.21 Plan or Plans........................................ 6
1.22 Plan Year............................................ 6
1.23 Subsidiary or Affiliate.............................. 6
1.24 Trust Agreement...................................... 6
1.25 Trustee.............................................. 6
1.26 Valuation Date....................................... 6
Section 2 - MEMBERSHIP - ELIGIBILITY
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2.1 Membership........................................... 7
2.2 Notice to Administrator.............................. 7
2.3 Membership Termination............................... 7
2.4 Member Suspension.................................... 8
2.5 Member Transfers..................................... 8
2.6 Capital Accumulation Plan Assets..................... 8
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Section 3 - MEMBERS' ELECTIVE DEFERRALS
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3.1 Members' Elections................................... 10
3.2 Contribution of Elective Deferrals and Member
Contributions....................................... 11
3.3 Annual Dollar Limitation............................. 11
3.4 Actual Deferral Percentage Tests..................... 12
3.5 Distribution of Excess Contributions................. 12
3.6 Make-Up Elective Deferrals and Member Contributions.. 13
Section 4 - COMPANY CONTRIBUTION
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4.1 Matching Contribution................................ 14
4.2 Form of Contribution................................. 14
4.3 Members Excluded From Contribution................... 14
4.4 Actual Contribution Percentage Test.................. 14
4.5 Distribution of Excess Contributions................. 15
4.6 Limitation on the Multiple Use Alternative........... 16
4.7 Section 415 Limitations.............................. 16
4.8 Nonelective Contributions............................ 17
4.9 Exclusive Benefit.................................... 17
Section 5 - FINANCED SHARES
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5.1 Acquisition Loans.................................... 18
5.2 Payments on Acquisition Loan......................... 19
Section 6 - INVESTMENT OF MEMBERS' AND FORMER MEMBERS' ACCOUNTS
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6.1 Members' and Former Members' Accounts................ 21
6.2 Investment of Elective Deferrals,Member Contribution,
Rollovers and Certain Matching Contributions........ 21
6.3 Investment of Company Contributions.................. 21
6.4 Member of Former Member Direction of Investments..... 22
6.5 Allocation of Investment Experience.................. 22
6.6 Manner and Time of Debiting Distributions............ 22
6.7 Title of Investments................................. 22
6.8 Voting of Investments................................ 22
6.9 Voting of Vastar Resources, Inc. Common Stock........ 23
6.10 Allocation of Dividends on Vastar Resources, Inc.
Common Stock........................................ 24
6.11 Investment Advisory Fees............................. 24
6.12 Member or Former Member Protection................... 24
6.13 Confidentiality...................................... 24
Section 7 - WITHDRAWALS DURING EMPLOYMENT
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7.1 Age 59 1/2 Withdrawal................................ 25
7.2 Application and Basis for Hardship Withdrawal........ 25
7.3 Partial Withdrawals of Member Contributions.......... 26
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Section 8 - PAYMENTS ON TERMINATION OF MEMBERSHIP OR OTHER REASONS
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8.1 Termination of Employment............................ 27
8.2 Death................................................ 28
8.3 Disability........................................... 29
8.4 Divorce.............................................. 29
8.5 Rollover............................................. 29
8.6 Notice............................................... 30
8.7 Distributions........................................ 30
8.8 Distribution of Benefits............................. 32
Section 9 - LOANS TO MEMBERS
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9.1 General.............................................. 33
9.2 Eligibility.......................................... 33
9.3 Loan Amount.......................................... 33
9.4 Number of Loans...................................... 34
9.5 Interest Rate........................................ 34
9.6 Security............................................. 34
9.7 Funding of the Loan.................................. 34
9.8 Repayment of the Loan................................ 34
9.9 Deemed Distribution.................................. 35
9.10 Default.............................................. 35
Section 10 - CAPITAL ACCUMULATION ADMINISTRATIVE COMMITTEE
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10.1 Capital Accumulation Plan Administrative Committee... 36
10.2 Rules of Conduct..................................... 36
10.3 Legal, Accounting, Clerical.......................... 36
10.4 Interpretation of Provisions......................... 36
10.5 Records of Administration............................ 36
10.6 Claims for Benefits.................................. 37
10.7 Liability of Committee............................... 38
10.8 Unlocated Member..................................... 38
10.9 Legal Representative................................. 38
Section 11 - AMENDMENTS, DISCONTINUANCE, LIABILITIES
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11.1 Amendment............................................ 39
11.2 Termination.......................................... 39
11.3 Liability of Company................................. 39
Section 12 - MISCELLANEOUS
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12.1 Employment........................................... 40
12.2 Benefits Not Assignable.............................. 40
12.3 Discharge of Liability............................... 40
12.4 Governing Laws....................................... 40
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12.5 Limitation on Mergers................................ 40
12.6 Delegation of Fiduciary or Administrative
Responsibilities.................................... 40
12.7 Named Fiduciary...................................... 41
Section 13 - ROLLOVERS
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13.1 Rollovers from Other Qualified Plans................. 42
13.2 Transfers from Individual Retirement Accounts........ 42
13.3 Membership........................................... 42
13.4 Administration....................................... 43
Section 14 - TOP HEAVY PROVISIONS
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14.1 Definitions.......................................... 44
14.2 Minimum Allocation................................... 47
14.3 ..................................................... 48
14.4 ..................................................... 48
14.5 ..................................................... 48
14.6 ..................................................... 48
Section 15 - SPECIAL PROVISIONS APPLICABLE TO EMPLOYEES OF THE
- ---------- COMPANY SECONDED TO SOUTHERN ENERGY MARKETING, L.P.
15.1 ..................................................... 49
15.2 ..................................................... 49
15.3 ..................................................... 49
15.4 ..................................................... 49
15.5 ..................................................... 49
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VASTAR RESOURCES, INC.
CAPITAL ACCUMULATION PLAN
INTRODUCTION
This Plan is intended to qualify as a Stock Bonus Plan under (S)401(a) of the
Internal Revenue Code of 1986, as amended, and as a Qualified Cash or Deferred
Arrangement under (S)401(k) of the Code. Part of the Plan (the "ESOP Part") is
intended to qualify as an Employee Stock Ownership Plan under (S)4975(e)(7) of
the Code and such part is designed to invest primarily in Vastar Resources, Inc.
Common Stock.
Effective March 14, 1999, the Vastar Resources, Inc. Capital Accumulation Plan,
the Vastar Resources, Inc. Savings Plan II, the Vastar Resources, Inc. Savings
Plan (the "Predecessor Plans") are merged into the Vastar Resources, Inc.
Capital Accumulation Plan II and the name of the plan is changed to the Vastar
Resources, Inc. Capital Accumulation Plan.
The class of employees eligible to participate in this Plan previously
participated in the Atlantic Richfield Capital Accumulation Plan II and Atlantic
Richfield Savings Plan II. The assets and liabilities of the Atlantic Richfield
Capital Accumulation Plan II and the Atlantic Richfield Savings Plan II
allocable as of June 30, 1994 to the participants in this Plan who commenced
participation effective July 1, 1994 were transferred to this Plan. This Plan
is a continuation of the Atlantic Richfield Capital Accumulation Plan II and
Atlantic Richfield Savings Plan II with respect to the former participants of
such plans who transferred to, and commenced participation in, this Plan
effective July 1, 1994.
This amendment and restatement of the Plan is effective March 15, 1999, except
as otherwise indicated, and is intended to bring the Plan into compliance with
the Uniformed Services Employment and Re-employment Act of 1994, Small Business
Protection Act of 1996, subsequent legislation, and relevant regulations and
rulings. The provisions of this amended and restated plan apply to persons who
are employed on or after March 15, 1999, unless otherwise indicated.
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SECTION 1
DEFINITIONS
1.1 "Acquisition Loan" means a loan or other extension of credit used by the
Trustee to finance the acquisition of Vastar Resources, Inc. Company Common
Stock.
1.2 "Administrator" means the Capital Accumulation Plan Administrative
Committee.
1.3 "Annual Earnings" or "Earnings" means the annual, actual wages or salary
paid to a Member for the Member's personal service, including the amount of
any Employee contribution pursuant to (S)125 and (S)401(k) of the Code, as
amended, but excluding, effective September 1, 1994, foreign service
premiums(1), and extra pay such as overtime, premiums, bonuses, living or
other allowances. Annual Earnings shall not exceed a Member's regular
wages or salary as determined by the Company. Annual Earnings or Earnings
shall not exceed $160,000, as adjusted each Plan Year pursuant to
(S)401(a)(17)(B) of the Code.
1.4 "Capital Accumulation Plan Administrative Committee" means the committee
provided for in Section 10 of this Plan.
1.5 "Code" means the Internal Revenue Code of 1986, as amended.
1.6 "Company" means Vastar Resources, Inc. and such of its Subsidiaries or
Affiliates whose Employees are included in this Plan upon authorization of
the Board of Directors of Vastar Resources, Inc. and adoption of this Plan
by the Board of Directors of such authorized Subsidiary or Affiliate.
1.7 "Credited Company Service" means service with the Company, a predecessor
company, and/or a Subsidiary or Affiliate which service the Company
recognizes, on a basis uniformly applicable to all persons similarly
situated, for purposes of this Plan.
1.8 "Effective Date" means the effective date of this amended and restated Plan
which is March 15, 1999, unless otherwise indicated.
1.9 "Elective Deferrals" or "Deferrals" means reductions pursuant to an
Employee Contribution Agreement of a Member's Annual Earnings, which
amounts are transferred by the Company to the Trustee of the Plan.
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(1) 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 which the Member is employed on September 1,
1994 or, if later, completes the assignment in which the Member was engaged
on September 1, 1994.
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1.10 "Employee" means any person who is employed by the Company, excluding:
(a) Casual Employees, Project Employees and Leased Employees, as
defined under the Vastar Resources, Inc. Employment Status
Classification Policy;
(b) Employees represented by any collective bargaining agent which has
not negotiated the benefits of this Plan; and
(c) Any division or group of employees which is expressly excluded from
eligibility for the Plan by action of the Board of Directors of
Vastar Resources, Inc. or, in the case of a Subsidiary or
Affiliate, action by the Board of Directors of the Subsidiary or
Affiliate by which such employees are paid.
1.11 "Employee Contribution Agreement" means an agreement entered into between
the Member and the Company, and by which the Member agrees to accept a
reduction in Earnings from the Company equal to any whole (or fractions,
as required by adjustments under Paragraph 3.3, 3.4 or 4.4) percentage,
per payroll period. This reduction may be on a pre-tax or after-tax basis,
as elected by the Member. This agreement shall apply to each payroll
period during the period it is in effect in which the Member receives
Earnings. In consideration of such agreement, the Company will transfer to
the Member's pre-tax Elective Deferral subaccount or to the Member's
after-tax Member Contribution subaccount, as applicable, the amount of the
Elective Deferrals or Member Contributions.
1.12 "ERISA" means the Employee Retirement Income Security Act of 1974.
1.13 "Financed Shares" means shares of Vastar Resources, Inc. Company Common
Stock acquired by the Trustee with the proceeds of an Acquisition Loan.
1.14 "Former Member" means a Member whose membership has terminated pursuant to
Paragraph 2.3 and whose account has not been fully distributed.
1.15 "Highly Compensated Employee", effective July 1, 1997, means:
(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
(S)416(i)(1) of the Code, at any time during the determination
year or the look-back year, as defined below; or
(ii) An employee who receives compensation in excess of $80,000, as
adjusted pursuant to (S)415(d) of the Code during the look-back
year.
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(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.
(ii) The look-back year is the 12-month period immediately preceding
the determination year; provided, however, that for the Plan
Year beginning March 15, 1999, the look-back year shall be the
calendar beginning January 1, 1999.
(iii) Employers aggregated under (S)414(b), (c), (m), or (o) of the
Code are treated as a single employer.
(iv) Compensation, for purposes of this Paragraph 1.15 means
compensation within the meaning of (S)415(c)(3) of the Code
without regard to (S)125, (S)402(e)(3) and (S)402(h)(1)(B) of
the Code.
(c) 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.
1.16 "Hour 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.
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(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.
(e) Hours credited for any period under any provision of this
Paragraph 1.16 may not also be credited for the same period under
any other provisions of this Plan. Hours shall be credited under
Subparagraphs 1.16(a) through (c) pursuant to U.S. Department of
Labor Regulations under 29CFR (S)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
this Paragraph 1.16, 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 is (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.
1.17 "Matching Contributions" means the Company contribution pursuant to
Paragraph 4.1 of the Plan.
1.18 "Member" means an Employee who has qualified for membership in accordance
with the requirements of this Plan and whose membership has not terminated
in accordance with Paragraph 2.3 of the Plan.
1.19 "Member's Account" or "Account" means a separate account maintained by the
Trustee for each Member consisting of (a) one subaccount to which is
allocated the Member's Elective Deferrals, as adjusted for earnings and
withdrawals, and realized and unrealized gains and losses attributable
thereto; (b) a second subaccount to which is allocated Member
Contributions as adjusted for earnings and withdrawals,
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and realized and unrealized gains and losses attributable thereto; (c) a
third subaccount to which is allocated the Company's contributions as
adjusted for earnings and withdrawals, and realized and unrealized gains
and losses attributable thereto; and (d) a fourth subaccount to which is
allocated rollovers pursuant to Section 13 as adjusted for earnings and
withdrawals, and realized and unrealized gains and losses attributable
thereto.
1.20 "Member Contributions" means after-tax reductions in the Member's Annual
Earnings pursuant to an Employee Contribution Agreement, which amounts are
transferred by the Company to the Trustee.
1.21 "Plan" or "Plans" means the Vastar Resources, Inc. Capital Accumulation
Plan as set forth herein, and any amendments thereto.
1.22 "Plan Year" means the period commencing on March 15, 1999 and ending on
December 31, 1999. Thereafter, the Plan Year shall be the calendar year.
1.23 "Subsidiary" or "Affiliate" means:
(a) All corporations which are members of a controlled group of
corporations within the meaning of (S)1563(a) of the Code
(determined without regard to (S)1563(a)(4) and (S)1563(e)(3)(c)
of such Code) and of which Vastar Resources, Inc. is then a
member.
(b) All trades or businesses, whether or not incorporated, which,
under the regulations prescribed by the Secretary of the Treasury
pursuant to (S)210(d) of ERISA or (S)414(c) of the Code are then
under common control with Vastar Resources, Inc.
Subsidiary or Affiliate shall be determined by substituting "more than 50
percent" or "at least 80 percent" each place it appears in the
aforementioned Code sections.
1.24 "Trust Agreement" means the agreement of trust between the Trustee and
Vastar Resources, Inc. to hold contributions from the Company, Deferrals
and Member Contributions of Members, transfers and rollovers, and
investments thereof and earnings thereon.
1.25 "Trustee" means the persons or corporations, or both, designated by the
Trust Agreement. The duties and responsibilities of the Trustee shall be
those set forth in the Trust Agreement.
1.26 "Valuation Date" means the date or dates established by the Administrator
for the valuation of the assets of the Plan. In no event shall the assets
of the Plan be valued less frequently than once each Plan Year.
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SECTION 2
MEMBERSHIP - ELIGIBILITY
2.1 Membership
(a) Elective Deferrals and Member Contributions - An Employee who is
paid on the United States dollar payroll of the Company may become
a Member and make Elective Deferrals and/or Member Contributions
on or after the Employee's date of employment.
To become a Member, an Employee must enter into an Employee
Contribution Agreement in accordance with Section 3.
(b) Company Contributions - An Employee who is paid on a United States
dollar payroll of the Company shall be eligible for Matching
Contributions with respect to Elective Deferrals on the earlier of
(i) or (ii) below:
(i) Completion of six months of Credited Company Service, or
(ii) The end of any 12-consecutive-month period during which the
Employee completes at least 1,000 Hours of Service. Such 12-
consecutive-month period shall commence on the Employee's
date of employment or any anniversary thereof.
2.2 Notice to Administrator
The Company shall advise the Administrator as to the date an Employee becomes a
Member. In the event that any question arises as to the eligibility of any
Employee, the decision of the Administrator as to such Employee's eligibility
shall be binding upon the Company, the Employees, the Members, the
beneficiaries, and any and all other persons having or claiming any interest
hereunder.
2.3 Membership Termination
(a) An Employee's membership shall terminate upon:
(i) Death, disability, dismissal, retirement or termination of
employment for any other reason;
(ii) Continuation of a Participant's employment with an acquiring
corporation in conjunction with a sale to the acquiring
corporation of substantially all of the assets used by the
Company or any Subsidiary or Affiliate in a trade or
business which such entity conducts; or
(iii) A disposition of the Company's interest in a Subsidiary or
Affiliate when the Participant continues employment with
such Subsidiary or Affiliate.
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(b) A Member may not voluntarily terminate membership in this Plan
during active employment with the Company.
(c) If a Member transfers employment to a Subsidiary or Affiliate of
the Company which is not participating in this Plan, or to an
employment classification excluded from Plan participation, the
Member's eligibility to make Elective Deferrals and Member
Contributions, and to receive Matching or nonelective
Contributions shall cease, but the Member's Account shall not be
distributed until the Member has terminated employment with Vastar
Resources, Inc. or all of its Subsidiaries or Affiliates or is
involved in a sale described in Subparagraph 2.3(a)(ii) or (iii).
2.4 Member Suspension
If an Employee is a Member of a defined contribution plan of the Company
(including the Predecessor Plans), or a Subsidiary or Affiliate, and the
Elective Deferrals 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 Elective Deferrals and 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.
2.5 Member Transfers
If a Member transfers to employment with a Subsidiary or Affiliate of the
Company, which maintains a capital accumulation plan, the Member's Account shall
be transferred to the capital accumulation plan of the Subsidiary or Affiliate
in accordance with procedure established by the Administrator.
2.6 Capital Accumulation Plan Assets
(a) Upon the transfer of employment from the Atlantic Richfield
Company of an Employee eligible to participate in the Plan, any
assets maintained under the Atlantic Richfield Capital
Accumulation Plan on behalf of such Employee will be transferred
to the Plan in the same investment alternatives held as of the
transfer date, and such transferred assets will be subject to the
reinvestment provisions under Paragraph 6.4, except as provided
herein:
(i) Any Atlantic Richfield Company Common Stock attributable to
the Member Deferrals, Member Contributions and Rollover
Contributions under the non-ESOP Part of the Atlantic
Richfield Capital Accumulation Plan, transferred on behalf of
a Member to the Member Account described in Paragraph 1.19(a),
1.19(b) and 1.19(d) of the
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Plan, will remain so invested, with future dividends being
reinvested in such stock, absent the Member's direction to
reinvest such assets pursuant to Paragraph 6.4 of the Plan;
provided, however, that any assets converted from Atlantic
Richfield Company Common Stock to another investment
alternative under the Plan may not be reinvested in Atlantic
Richfield Company Common Stock.
(ii) Any Atlantic Richfield Company Common Stock attributable to
the Member Deferrals, Member Contributions and Rollover
Contributions under the ESOP Part of the Atlantic Richfield
Capital Accumulation Plan, transferred on behalf of a Member
to the Member Account described in Paragraph 1.19(a),
1.19(b) and 1.19(d) of the Plan, will remain so invested,
with future dividends being distributed as described in
Subparagraph 6.10(a) of the Plan, absent the Member's
direction to reinvest such assets pursuant to Paragraph 6.4
of the Plan. Any assets converted from Atlantic Richfield
Company Common Stock to another investment alternative under
the Plan may not be reinvested in Atlantic Richfield Company
Common Stock.
(iii) Any Atlantic Richfield Company Common Stock attributable to
the Company Contributions under the ESOP Part of the
Atlantic Richfield Capital Accumulation Plan, transferred on
behalf of a Member to the Member Account described in
Paragraph 1.19(c) of the Plan, will remain so invested with
future dividends being distributed as described in
Subparagraph 6.10(a) of the Plan, unless the Member elects
to convert such assets to the Vastar Resources, Inc. Common
Stock. Any assets in the Member Account described in
Paragraph 1.19(c) may only be converted to Vastar Resources,
Inc. Common Stock in accordance to Paragraph 6.3, and may
not be reinvested in Atlantic Richfield Company Common
Stock.
(b) Effective March 15, 1999, shares of Atlantic Richfield Company
Common Stock held in the ESOP Part of the Plan may no longer be
converted to shares held under the non-ESOP Part of the Plan, and
such non-ESOP shares may no longer be converted to shares held
under the ESOP Part of the Plan.
(c) Common Stock of a Subsidiary or Affiliate held by the Plan shall
be subject to the sale and voting provisions of Section 6.
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SECTION 3
MEMBERS' ELECTIVE DEFERRALS
3.1 Members' Elections
(a) Each Member who is an Employee may enter into an Employee
Contribution Agreement with the Company providing for withholding
of Elective Deferrals and/or Member Contributions from each of the
Member's regular paychecks at a rate of one percent to 27 percent
of the Member's Earnings, in whole percentages. An Employee
Contribution Agreement shall remain in effect until changed by the
Member, except as otherwise set forth in this Section 3.
(b) A Member's election shall be made in the manner prescribed by the
Administrator and shall include such information as the
Administrator may require. A Member may change the Member's
election with respect to the Member's rate of future contributions
at any time by giving notice in such manner as is prescribed by
the Administrator. Such changes shall be effective as soon as
administratively feasible after the date of receipt of such notice
by the Administrator, or its delegate.
(c) The Company may limit or reduce its Employee Contribution
Agreement with any Member at any time, on a nondiscriminatory
basis, to the extent necessary to ensure compliance with the
limitations of Paragraph 3.3, 3.4, 4.4 or 4.7.
(d) A Member's Elective Deferrals and Member Contributions will be
suspended as follows:
(i) Upon the Member's transfer, other than on an approved leave of
absence, to employment with:
(1) A Subsidiary or Affiliate which is not participating in
the Plan; or
(2) Vastar Resources, Inc. or any of its Subsidiaries or
Affiliates in such foreign countries as the Company shall
designate; the Member's Elective Deferrals and/or Member
Contributions shall automatically be suspended while the
Member remains in such employment.
(ii) Upon the Member's transfer to an employee group of the
Company that is not participating in the Plan.
(iii) As described in Section 7.
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3.2 Contribution of Elective Deferrals and Member Contributions
The Company shall pay to the Trustee on behalf of each Member the Elective
Deferrals and Member Contributions elected by the Member. A Member's Elective
Deferrals and Member Contributions shall be paid to the Trustee the earlier of
the date such Elective Deferrals and Member Contributions can reasonably be
segregated from the Company's general assets or the 15th day of the month
following the month in which the Elective Deferrals and Member Contributions
would have been paid to the Member. Elective Deferrals and Member Contributions
may be paid to the Trustee in the following forms:
(a) To the extent that a Member has directed pursuant to the Plan that
his or her Elective Deferrals and/or Member Contributions be
invested in an option other than Vastar Resources, Inc. Common
Stock, such Elective Deferrals and/or Member Contributions shall
be paid to the Trustee in cash;
(b) To the extent that a Member has directed pursuant to the Plan that
his or her Elective Deferrals and/or Member Contributions be
invested in Vastar Resources, Inc. Company Common Stock under the
Non-ESOP Part of the Plan, such Elective Deferrals and/or Member
Contributions may be paid to the Trustee in cash, in shares of
Vastar Resources, Inc. Common Stock, or in any combination
thereof; and
(c) To the extent that a Member has directed pursuant to the Plan that
his or her Elective Deferrals and/or Member Contributions be
invested in Vastar Resources, Inc. Common Stock under the ESOP
Part of the Plan, such Elective Deferrals and/or Member
Contributions may be paid to the Trustee in cash, in shares of
Vastar Resources, Inc. Common Stock, in the form of forgiveness of
indebtedness on an Acquisition Loan from the Company to the Plan,
or in any combination thereof.
3.3 Annual Dollar Limitation
(a) A Member's Elective Deferrals for a calendar year, when considered
together with the amount of salary reduction elected by the Member
under any other plan meeting the requirement of (S)401(k) of the
Code, may not exceed $10,000, as adjusted pursuant to Code
(S)415(d).
(b) Once a Member's Elective Deferrals reach the limitation described
in Subparagraph 3.3(a), all subsequent deferrals will be suspended
for the remainder of the calendar year. Elective Deferrals will
automatically resume on the following January 1. Unless the Member
elects to change the Elective Deferral percent according to
Paragraph 3.1, Elective Deferrals will resume at the rate in
effect on the suspension date.
11
(c) If a Member notifies the Administrator on or before March 31 after
the close of a calendar year that the Member's total Elective
Deferrals (within the meaning of (S)402(g)(3) of the Code) for
such calendar year exceed the limitation of Subparagraph 3.3(a),
the Administrator shall direct that such excess Elective
Deferrals, plus any income and minus any loss allocable thereto
for the calendar year, be distributed no later than the April 15
following notification to the Administrator. A Member is deemed to
notify the Administrator of Elective Deferrals in excess of the
limitation in Subparagraph 3.3(a) that arise by taking into
account those Elective Deferrals made to the Plan or to any other
Plan of the Company or a Subsidiary or Affiliate.
(d) For purposes of Subparagraph 3.3(c), gain or loss allocable to
excess Elective Deferrals shall be computed under the method used
by the Plan to allocate gains and losses.
3.4 Actual Deferral Percentage Tests
The Plan shall comply with the requirements of (S)401(k)(3) of the Code, the
regulations thereunder, including Treas. Reg. 1.401(k)-1(b) and Internal Revenue
Service guidance in this regard, which provisions are incorporated herein by
this reference. To the extent permitted by regulations, Matching Contributions
described in Paragraph 4.1 and nonelective contributions described in Paragraph
4.8 may, at the discretion of the Administrator, be deemed Elective Deferrals
for purposes of this Paragraph 3.4. Effective July 1, 1997, in determining
whether the Plan satisfies the requirements of (S)401(k)(3) of the Code, the
Plan shall use the prior-year testing method.
3.5 Distribution of Excess Contributions
(a) If the average actual deferral percentage test of Paragraph 3.4 is
not satisfied for a Plan Year, then the Excess Contributions, as
defined below, and gain or loss allocable thereto, shall be
distributed, to the extent required under Treasury regulations, no
later than the last day of the Plan Year following the Plan Year
for which the Excess Contributions were made.
(b) Effective July 1, 1997, for purposes of this paragraph, Excess
Contributions shall consist of the excess of the aggregate amount
of Elective Deferrals made by or on behalf of the affected Highly
Compensated Employees over the maximum amount of all such
contributions permitted under the test of Paragraph 3.4. In
reducing the excess contributions hereunder, the reduction shall
be first applied to the Highly Compensated Employee with the
highest percentage under Paragraph 3.4. If reductions are further
required to comply with Paragraph 3.4, such reductions shall be
applied to the Highly Compensated Employee with the next highest
percentage, and so forth until the nondiscrimination test of
Paragraph 3.4 is satisfied. The aggregate amount of reductions
determined in the preceding sentence shall be
12
distributed, together with gain or loss allocable thereto, to the
Highly Compensated Employees with the highest dollar amount of
Elective Deferrals. The Elective Deferrals of the Highly
Compensated Employee with the highest dollar amount of Elective
Deferrals are reduced by the amount required to cause such Highly
Compensated Employee's Elective Deferrals to equal the Elective
Deferral amount of the Highly Compensated Employee with the next
highest dollar amount of Elective Deferrals. If the total amount
distributed to the Highly Compensated Employee is less than the
total Excess Contribution, this process shall be repeated until
the total Excess Contributions are distributed.
(c) The gain or loss allocable to Excess Contributions shall be
determined by multiplying the gain or loss allocable to the
Member's Elective Deferrals for the Plan Year by a fraction, the
numerator of which is the Excess Contributions made on behalf of
the Member for the Plan Year, and the denominator of which is the
sum of the Member's Account balances attributable to the Member's
Elective Deferrals amounts on the last day of the Plan Year.
3.6 Make-Up Elective Deferrals and Member Contributions
Notwithstanding any provision of the Plan to the contrary, Elective Deferrals
and Member Contributions with respect to qualified military service may be made
in accordance with (S)414(u) of the Code.
13
SECTION 4
COMPANY CONTRIBUTION
4.1 Matching Contribution
Subject to the provisions of Paragraphs 4.3 and 4.4, for each pay period, the
Company shall pay to the Trustee a contribution on behalf of each Member equal
to 160 percent of the Member's Elective Deferrals, including Elective Deferrals
under Paragraph 3.6, for the pay period which do not exceed five percent of the
Member's Earnings for the pay period. This contribution shall be made no later
than 30 days following the date on which the related Member Deferrals are made,
or as soon as administratively practicable, if later, and except for Members who
have attained age 55, shall be made under the ESOP Part of the Plan.
4.2 Form of Contribution
Matching Contributions may be made in the form of cash, shares of Vastar
Resources, Inc. Common Stock, forgiveness of indebtedness on an Acquisition Loan
from the Company to the Plan, or any combination of the foregoing.
4.3 Members Excluded From Contribution
The Matching Contribution shall not be made on behalf of a Member described in
one or more of the following subparagraphs:
(a) A Member who is an officer of Vastar Resources, Inc.; or
(b) A Member whose base salary is more than $150,000 on an annualized
basis.
4.4 Actual Contribution Percentage Test
With respect to Member Contributions and Matching Contributions, the Plan shall
comply with the requirements of (S)401(m)(2) of the Code, the regulations
thereunder, including Treas. Reg. (S)1.401(m)-1(b) and Internal Revenue Service
guidance in this regard, which provisions are incorporated herein by this
reference. To the extent permitted by regulations, Elective Deferrals described
in Paragraph 3.1 and nonelective contributions described in Paragraph 4.8 may,
at the discretion of the Administrator, be taken into account in satisfying the
requirements of this Paragraph 4.4. Effective July 1, 1997, in determining
whether the Plan satisfies the requirements of Section 401(m)(2) of the Code,
the Plan shall use the prior-year testing method.
4.5 Distribution of Excess Aggregate Contributions
14
(a) If the nondiscrimination tests of Paragraph 4.4 are not satisfied
for a Plan Year, then the Excess Aggregate Contributions, as
defined below, and any gain or loss allocable thereto, shall be
distributed to the Member on whose behalf the Excess Aggregate
Contributions were made no later than the last day of the Plan
Year following the Plan Year for which such Excess Aggregate
Contributions were made. Member Contributions shall be
distributed before Matching Contributions.
Notwithstanding the foregoing, to the extent otherwise required
to comply with the requirements of (S)401(a)(4) of the Code and
regulations thereunder, vested Matching Contributions may be
forfeited.
(b) Effective July 1, 1997, for purposes of this paragraph, Excess
Aggregate Contributions shall consist of the excess of the amount
of Member Contributions, Matching Contributions, and Elective
Deferrals (to the extent not used to satisfy the average actual
deferral percentage test of Section 3.4) made on behalf of the
affected Highly Compensated Employees over the maximum amount of
all such contributions permitted under the nondiscrimination
tests under Paragraph 4.4. In reducing the Excess Aggregate
Contributions hereunder, the reduction shall be first applied to
the Highly Compensated Employee with the highest percentage under
Paragraph 4.4. If reductions are further required to comply with
Paragraph 4.4, such reductions shall be applied to the Highly
Compensated Employee with the next highest percentage, and so
forth until the nondiscrimination tests of Paragraph 4.4 are
satisfied. The aggregate amount of reductions determined in the
preceding sentence shall be distributed together with gain or
loss allocable thereto, to the Highly Compensated Employees with
the highest dollar amount of Member Contributions and Matching
Contributions. The Member Contributions and Matching
Contributions of the Highly Compensated Employee with the highest
dollar amount of such contributions are reduced by the amount
required to cause such Highly Compensated Employee's Member
Contributions and Matching Contributions to equal the Member
Contributions and Matching Contributions of the Highly
Compensated Employee with the next highest dollar amount of such
contributions. If the total amount distributed to the Highly
Compensated Employee is less than the total Excess Aggregate
Contribution, this process shall be repeated until the total
Excess Aggregate Contributions are distributed.
(c) The gain or loss allocable to Excess Aggregate Contributions
shall be determined by multiplying the gain or loss allocable to
such contributions by a fraction, the numerator of which is the
Excess Aggregate Contributions on behalf of the Member for the
Plan Year, and the denominator of which is the sum of the
Member's Account balances attributable to Excess Aggregate
Contributions on the last day of the Plan Year.
15
4.6 Limitation On The Multiple Use Alternative
(a) The sum of the average actual deferral percentage of Highly
Compensated Employees under Paragraph 3.4 and the average
contribution percentage of Highly Compensated Employees under
Paragraph 4.4 shall not exceed the "aggregate limit", as defined
in (S)401(m)(9) of the Code and the regulations thereunder.
(b) If the aggregate limit is exceeded, the average contributions
percentage of the Highly Compensated Employees shall be reduced
in accordance with the provisions of Paragraph 4.5. In lieu of
reducing the average contribution percentage, the Administrator
may reduce the average actual deferral percentage of the Highly
Compensated Employees in accordance with the provisions of
Paragraph 3.4. The reductions under this paragraph shall be made
only to the extent necessary to comply with the restrictions on
the multiple use of the alternative limitation within the meaning
of Code (S)401(m)(9).
4.7 Section 415 Limitations
(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 (S)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 (S)415 of the Code, the
"limitation year" shall be the calendar year. Elective Deferrals,
Member Contributions and Matching Contributions in excess of the
actual deferral and contribution percent tests of Sections 3.4
and 4.4 are considered annual additions even if corrected through
distribution.
(b) If the limitations described in (S)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 defined contribution plans
established by the Company or a Subsidiary or Affiliate
which have caused the limits to be exceeded will be
applied; provided, however, that if such other Plan is
described in (S)401(k) of the Code, the provisions of the
Plan in which the Member is active as of the last day of
the limitation year shall be applied before the provisions
of the 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.
16
(iii) Amounts attributable to Elective Deferrals 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) Prior to January 1, 2000, if the limitations described in
(S)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.
4.8 Nonelective Contributions
(a) The Company, 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 3.4 and/or 4.4 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 (S)410(b) of the Code.
(b) A contribution under Subparagraph 4.8(a) shall be allocated to
eligible Members in the ratio that the Earnings of each such
Member for the Plan Year bears to the total Earnings of all such
Member's for the Plan Year.
(c) The Company shall make contributions necessary to reinstate
Members' Accounts pursuant to Paragraph 10.8 of the Plan.
(d) The Company may make contributions necessary to correct
administrative errors relative to a Member's Account.
4.9 Exclusive Benefit
The corpus or income of the trust may not be divested to or used for other than
the exclusive benefit of the Members and their beneficiaries and to defray
reasonable expenses of administering the Plan.
17
SECTION 5
FINANCED SHARES
5.1 Acquisition Loans
Vastar Resources, Inc. by action of its Treasurer, may direct the Trustee to
incur Acquisition Loans from time to time to finance the acquisition of Vastar
Resources, Inc. 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 Vastar Resources, Inc.
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 (S)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
(including Elective Deferrals and Member Contributions, to the extent that
Members have directed pursuant to the Plan that such Elective Deferrals and/or
Member Contributions be invested in shares of Vastar Resources, Inc. Common
Stock under the ESOP Part of the Plan) and earnings attributable thereto; (b)
the proceeds of any Acquisition Loan and the earnings attributable thereto; and
(c) 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 Matching
Contributions, Elective Deferrals, 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 Vastar
Resources, Inc. 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.
18
5.2 Payments on Acquisition Loan
The acquisition of Vastar Resources, Inc. Common Stock with the proceeds of an
Acquisition Loan may be made on the open-market, or from 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 Vastar Resources, Inc.) 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 Earnings 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. Release from the loan suspense
account for allocation to Members' Accounts in each Plan Year shall be based on
shares of stock or other non-monetary units, rather than by dollar amount, and
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.
19
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.
20
SECTION 6
INVESTMENT OF MEMBERS' AND FORMER MEMBERS' ACCOUNTS
6.1 Members' and Former Members' Accounts
The Administrator shall establish and maintain an Account in the name of each
Member and Former Member. Separate records shall be maintained with respect to
the portion of a Member's or Former Member's Account attributable to Elective
Deferrals, Member Contributions, rollovers under Section 13, Matching
Contributions, and earnings thereon.
6.2 Investment of Elective Deferrals, Member Contribution, Rollovers and
Certain Matching Contributions
(a) In accordance with procedures established by the Administrator,
the following amounts shall be invested by the Trustee among the
investment alternatives authorized by the Administrator in the
proportion indicated by the Member or Former Member in his or her
investment directions provided to the Administrator, or its
delegate:
(i) Elective Deferrals;
(ii) Member Contributions;
(iii) Rollovers;
(iv) Matching Contributions pursuant to Subparagraph 6.3(b); and
(v) Matching Contributions to the Atlantic Richfield Savings
Plans II and III made prior to July 1, 1988.
(b) Notwithstanding anything in the Plan to the contrary, the Trustee
may limit the daily volume of purchases or sales of Vastar
Resources, Inc. Common Stock to the extent it believes such
action to be in the best interest of Members or Former Members.
6.3 Investment of Company Contributions
(a) Except as provided in Subparagraph 6.3(b), all Matching
Contributions and nonelective contributions pursuant to
Subparagraph 4.8(a), and any amounts of interest attributable to
the proceeds of an Acquisition Loan allocated to Members' or
Former Members' Accounts pursuant to Paragraph 5.2 after the
Acquisition Loan has been repaid in full, shall at all times be
invested in Vastar Resources, Inc. Common Stock under the ESOP
Part of the Plan. Contributions under Paragraph 4.1 made in cash
shall be applied to purchase shares of Vastar Resources, Inc.
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' or Former Members' Accounts.
21
(b) A Member or Former Member who has attained age 55 may invest
Company Contributions in any of the investment alternatives as
set forth in Paragraph 6.2.
6.4 Member or Former Member Direction Of Investments
In accordance with procedures established by the Administrator, each Member or
Former Member may direct how his or her Account is to be invested among the
available investment funds. In the event a Member or Former Member fails to make
an investment election, with respect to all or any portion of his or her
Account, the Trustee shall invest all or such portion of his or her Account in
the investment fund to be designated by the Administrator. Under procedures
established by the Administrator, a Member or Former Member may change his or
her investment election, with respect to future contributions and amounts
previously accumulated in the Member's or Former Member's Account. Any such
change in a Member's or Former Member's investment election shall be effective
at such time as may be prescribed by the Administrator.
6.5 Allocation of Investment Experience
As of each Valuation Date, the investment funds of the Trust, other than shares
of Company Common Stock, shall be valued at fair market value, and the income,
loss, appreciation and deprecation (realized and unrealized), and any paid
expenses of the Trust attributable to such fund shall be apportioned among
Member's or Former Member's Accounts within the fund based upon the value of
each Account within the fund as of the preceding Valuation Date.
6.6 Manner and Time of Debiting Distributions
For any Member or Former Member who is entitled to receive a distribution from
his or her Account, the amount distributed shall be based upon the fair market
value of the Member's or Former Member's Account as of the Valuation Date
immediately preceding the distribution.
6.7 Title of Investments
All investments will be held in the name of the Trustee or its nominees.
6.8 Voting of Investments
Except as provided in Paragraph 6.9, the Trustee in accordance with the Trust
Agreement, shall exercise all voting and other rights associated with any
investments held in the Plan.
22
6.9 Voting of Vastar Resources, Inc. Common Stock
(a) The Trustee shall vote whole shares of Vastar Resources, Inc.
Common Stock credited to each Member's or Former Member's Account
in accordance with such Members' or Former Members' written
instructions. Fractional shares of Vastar Resources, Inc. 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' or
Former Members' written instructions. In the absence of voting
instructions by one or more Members or Former 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' or Former 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' or Former
Members' written instructions.
(b) The Trustee shall exercise rights other than voting rights
attributable to whole shares of Vastar Resources, Inc. Common
Stock credited to each Member's or Former Member's Account in
accordance with such Members' or Former Members' written
instructions. Rights attributable to fractional shares of 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' or Former Members' written instructions. In
the absence of instructions by one or more Members or Former
Members, the Trustee shall exercise uninstructed rights in the
same proportion as rights which are to be exercised by the
Trustee pursuant to Members' or Former 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' or Former Members' written instructions.
Notwithstanding the foregoing, in the absence of directions, the
Trustee shall not tender shares of Common Stock in the same
proportion as shares are tendered pursuant to Member's or Former
Member's written instructions.
(c) The Trustee shall notify the Members or Former 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.
23
6.10 Allocation of Dividends on Vastar Resources, Inc. Common Stock
(a) To the extend authorized by the Administrator, any cash dividends
declared on Vastar Resources, Inc. Common Stock held in a
Member's or Former 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 Former Member (or, in the event of death, to the
Member's or Former Member's beneficiary) on, or as soon as
possible following, the payment date for the dividend.
(b) Any cash dividends declared on Vastar Resources, Inc. 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 Vastar
Resources, Inc. Common Stock shall be allocated to the Account of
the Member or Former Member whose Account is credited with such
shares.
6.11 Investment Advisory Fees
The investment advisory fees, if any, incurred for management of any of the
investment funds are charged to each respective fund.
6.12 Member or Former Member Protection
No shares of Vastar Resources, Inc. 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 6.12 shall continue to be
applicable to the shares of Vastar Resources, Inc. Common Stock held by the ESOP
Part of the Plan even if such part ceases to be an Employee Stock Ownership Plan
under (S)4945(e)(7) of the Code.
6.13 Confidentiality
The Capital Accumulation 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 Vastar Resources, Inc. Common Stock and any voting, tender or
similar rights relating to such stock.
24
SECTION 7
WITHDRAWALS DURING EMPLOYMENT
7.1 Age 59 1/2 Withdrawal
A Member who has attained age 59 1/2 may request that all or a portion of the
Member's Account be paid to the Member. The request must be made at such time
and in such manner as prescribed by the Administrator.
7.2 Application and Basis for Hardship Withdrawal
(a) A Member may at any time request that the Member's Elective
Deferrals (but not the earnings thereon) be paid to the Member
due to financial hardship. The request must be made to the
Administrator at such time and in such manner as prescribed by
the Administrator and shall include such documentation and/or
written explanation requested by the Administrator.
(b) The Administrator shall authorize a withdrawal on account of
financial hardship only upon making a written determination that
the withdrawal does not exceed the amount of the immediate and
heavy financial need of the Member, including amounts withheld
for taxes and the amount of any early distribution taxes, if any,
and that the withdrawal is based on the need for funds under one
or more of the five following circumstances:
(i) The payment of unreimbursable medical expenses described in
(S)29(d) of the Code previously incurred by the Member, the
Member's spouse, or any dependents of the Member (as
defined in (S)152 of the Code) or necessary for these
persons to obtain medical care;
(ii) The payment of all or a portion of the purchase price
(excluding mortgage payments) of a principal residence of
the Member;
(iii) The payment of tuition and related educational expenses for
the next 12 months of post-secondary education for the
Member, his or her spouse, children or dependents, as
defined in Code (S)152;
(iv) The need to prevent the eviction of the Member from his or
her principal residence or foreclosure on the mortgage of
the Member's principal residence; and
(v) The need to satisfy a judgment of a federal, state or local
court against the Member (such withdrawal will be permitted
only if a written determination is made that such
withdrawal is necessary in light of immediate and heavy
financial need of the Member).
25
(c) Hardship withdrawals shall be paid as follows:
(i) A hardship withdrawal shall be paid in a single payment to
the Member within 60 days following the Administrator's
favorable determination.
(ii) A hardship withdrawal shall not cause a termination of
Membership in the Plan.
(d) As a condition to receiving the withdrawal:
(i) The Member must have obtained all distributions and all
nontaxable loans available as of the date of the withdrawal
under this Plan and any other employee benefit plan
maintained by the Company and any Subsidiary or Affiliate;
(ii) The Member's contributions to the Plan and any other
defined contribution or defined benefit employee pension
benefit plan maintained by the Company and any Subsidiary
or Affiliate are to be suspended for 12 months; and
Elective Deferrals shall be suspended for the remainder of
the calendar year in which the hardship distribution occurs
and the calendar year immediately following such calendar
year.
7.3 Partial Withdrawals of Member Contributions
(a) An application for partial withdrawal of funds attributable to
Member Contributions 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 7.3 are made at not less than
six-month intervals, and (ii) Member Contributions made prior to
January 1, 1987, must be withdrawn prior to withdrawal of any
other contributions and earnings:
(i) Items in the Member's Account derived from Member
Contributions, and earnings thereon (Member Contributions
made prior to January 1, 1987 must be withdrawn first); and
(ii) Items in the Member's Account derived from Company
Contributions to the Atlantic Richfield Savings Plan II or
III made prior to July 1, 1988, and earnings thereon.
26
SECTION 8
PAYMENTS ON TERMINATION OF MEMBERSHIP 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 Subparagraphs 2.3(a)(ii) or (iii), the
Member may 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 Elective Deferrals, Member
Contributions, Company Contributions or rollovers, and earnings
thereon.
(b) Upon the election of the Member who has terminated membership, all
items in such Member's Account shall be distributed to the Member.
With respect to a Former Member who does not request a distribution:
(i) Notwithstanding anything to the contrary in this Paragraph 8.1,
a Former Member's Account shall be distributed in accordance
with the provisions of Paragraph 8.7;
(ii) In the case of the Former Member's death prior to final
distribution, the Former Member's Account shall be distributed
in accordance with Paragraph 8.2 of the Plan; and
(iii) Except as provided in Paragraph 9.1, no loans or hardship
withdrawals may be taken following termination of membership or
disability.
(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 $5,000 or less on the date of determination,
shall be distributed as soon as administratively practicable 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 Former
Member elects to receive all items in the Former Member's Account and,
in conjunction therewith, directs that items in his or her Account be
converted pursuant to Paragraph 6.4, the conversion shall be
transacted on the later of the first transaction date under the Plan
following the Administrator's receipt of a request for distribution,
or the date of termination. Distribution under this Paragraph 8.1
shall be made in accordance with the requirements of 409(h) of the
Code in the form of cash, Company stock or a combination thereof, as
elected by the Member. If the Member does not make an election
hereunder, Company stock will be distributed in kind and all other
investment alternative shall be converted to cash.
27
(e) Under procedures established by the Administrator, distributions under
this Paragraph 8.1 may be made under any of the following forms of
payment, or any combination thereof:
(i) Lump sum distribution;
(ii) Installment payments, not to exceed 20 years if a specific
period is requested; or
(iii) Partial withdrawals.
8.2 Death
(a) If a Member or Former Member dies 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 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 changed
without spousal consent (or the spouse expressly permits designations
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 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 or Former Member without the consent of the
spouse at any time prior to the Member's or Former Member's death. A
consent that permits designation by the Member or Former Member
without any requirement for
28
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) Payment under this Paragraph 8.2 may be made in any form of
distribution permitted by Paragraph 8.1; provided, however, that all
items in the Member's or Former Member's Account shall be paid no
later than December 31 of the calendar year which contains the fifth
anniversary of the date of the Member's death. Prior to distribution,
the beneficiary shall have the rights of a Former Member under Section
6 and Paragraph 8.1; provided, however, that the beneficiary may not
elect installments or partial withdrawals under Subparagraphs
8.1(e)(ii) and (iii) and any Atlantic Richfield Common Stock or Vastar
Resources, Inc. Common Stock held under the ESOP Part of the Plan
shall be converted to non-ESOP Atlantic Richfield Common Stock or
Vastar Resources, Inc. Common Stock.
8.3 Disability
(a) A Member who is determined to be disabled may elect to receive a
distribution of such Member's Account in accordance with Paragraph
8.1.
(b) A Member is disabled if as a result of a medically determinable
physical or mental impairment resulting from illness or injury 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 entity designated by the Administrator.
8.4 Divorce
To the extent a Qualified Domestic Relations Order ("QDRO"), as defined in
(S)414(p) of the Code, is received by the Plan, distributions from a
Member's Account shall be made to an Alternate Payee, as defined in
(S)414(p) of the Code, as soon as administratively possible following the
determination of the order's qualified status. Prior to such distribution,
Atlantic Richfield Common Stock or Vastar Resources, Inc. Common Stock in
the ESOP Part of the Plan shall be converted to non-ESOP Atlantic Richfield
Common Stock or Vastar Resources, Inc. Common Stock.
8.5 Rollover
(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 Member Contributions
and any amount required to be
29
distributed pursuant to (S)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 (S)408(a) or (b) of the Code, an annuity plan described
in (S)403(a) of the Code or a qualified trust described in (S)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 Member or Former Member, the surviving spouse of
such Member or such Member's spouse or former spouse who is an
alternate payee as defined in (S)414(p) of the Code.
8.6 Notice
With respect to a Former Member whose account exceeds $5,000, the
Administrator shall provide the notice required by (S)1.411(a)-11(c) of
Income Tax Regulations no less than 30 days and no more than 90 days before
the Former 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 Former Member is informed of the Former Members' right to a period
of at least 30 days after receiving the notice to consider
distribution options; and
(c) The Former Member, after receiving the notice, affirmatively elects a
distribution.
The distribution shall commence no earlier than seven days following
the date the notice, described above, is provided to the Former Member.
8.7 Distributions
(a) All distributions required under the Plan shall be determined and
made in accordance with the proposed regulations under (S)401(a)(9) of
the Code, including the minimum distribution incidental benefit
requirement of (S)1.401(a)(9)-2 of the proposed regulations.
(b) The entire interest of a Member must be distributed or begin to be
distributed no later than the Member's required beginning date. The
required beginning date of a Member is the later of the April 1 of the
calendar year following the calendar year in which the Member attains
age 70 1/2 or retires, except that benefit distributions to a five-
percent owner must commence by the April 1 of the calendar year
following the calendar year in which the Member attains age 70 1/2.
30
(c) As of the first distribution calendar year, as defined below,
distributions, if not made in a single-sum, may only be made, in
accordance with Subparagraph 8.1(e), over a period not to exceed:
(i) A period certain not extending beyond the life expectancy of the
Member; or
(ii) A period certain not extending beyond the joint and last survivor
expectancy of the Member and a designated beneficiary.
(d) The amount required to be distributed for each calendar year,
beginning with distributions for the first distribution calendar
year, as defined below, must at least equal the quotient obtained
by dividing the Member's entire Account as of the last Valuation
Date in the calendar year preceding the distribution calendar
year, by the applicable life expectancy.
(e) The minimum distribution required for the Member's first
distribution calendar year must be made on or before the Member's
required beginning date as defined in Subparagraph 8.7(b). The
minimum distribution for other calendar years, including the
minimum distribution for the distribution calendar year in which
the Member's required beginning date occurs, must be made on or
before December 31 of that distribution calendar year.
(f) If the Member dies after distribution of his or her interest has
begun on or after the Member's required beginning date, as
defined in Subparagraph 8.7(b), the remaining portion of such
interest will continue to be distributed at least as rapidly as
under the method of distribution being used prior to the Member's
death.
(g) If the Member dies before distribution of his or her interest
begins, distribution of the Member's entire interest shall be
completed by December 31 of the calendar year containing the
fifth anniversary of the participant's death.
(h) The life expectancy (or joint and last survivor expectancy) shall
be calculated in accordance with Treasury regulations. Life
expectancies shall be recalculated annually.
(i) The distribution calendar year is a calendar year for which a
minimum distribution is required. For distributions beginning
before the Member's death, the first distribution calendar year
is the calendar year immediately preceding the calendar year
which contains the Member's required beginning date.
31
8.8 Distribution of Benefits
The distribution of benefits under this Plan to a Member who has
elected to receive such benefits shall be made 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
this Plan; (b) there occurs the tenth anniversary of the year in which the
Member commenced membership in this Plan; or (c) the Member's service with
the Company is terminated.
32
SECTION 9
LOANS TO MEMBERS
9.1 General
A Member, or a Former Member who is a Party-In-Interest as defined in
Section 3(14) of ERISA, may borrow from his or her Account in accordance
with the terms and conditions set forth in this Section 9 and such
additional rules, consistent with such terms and conditions, which the
Administrator may establish from time to time.
9.2 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.
9.3 Loan Amount
(a) The maximum loan shall be the lesser of one half of the Member's
Account or $50,000 (reduced by the highest balance, at any specific
time, of any outstanding loan or loans during the preceding 12 months
from this Plan).
(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 payment, including principal
and interest, when added to installments under any outstanding loan
under the Plan, from exceeding 25 percent of a Member's biweekly
earnings.
(d) The loan amount may not exceed the lesser of (i) the amount of the
Member's Contributions, Elective Deferrals and Company Contributions
under the Atlantic Richfield Savings Plans II and III made prior to
July 1, 1988 (excluding assets which originated in the Atlantic
Richfield Employee Stock Ownership Plan), and earnings thereon at the
time the loan is made, or (ii) the amount of the security, as
described hereafter, for the loan.
(e) For purposes of this Paragraph 9.3, the value of Common Stock, or any
other investment alternative will be determined on the Valuation Date
immediately preceding the date the loan application is received by the
Administrator under rules established by the Administrator.
33
9.4 Number of Loans
A Member may have such number of loans outstanding at any time as shall be
determined by the Administrator.
9.5 Interest Rate
A loan shall bear interest at a rate established and communicated by the
Capital Accumulation 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.
9.6 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) Security for the loans shall equal 50 percent of the assets in the
Member's Account as of the date of the loan request.
(c) The assets which constitute security for the loan will be valued on
the date of the loan agreement, or at such other time as may be
determined by the Administrator.
9.7 Funding of the Loan
(a) The loan will be funded in accordance with procedures established by
the Administrator.
(b) Under procedures established by the Administrator, investment
alternatives shall be sold to fund the loan.
9.8 Repayment of the Loan
(a) As determined by the Member, but subject to the restriction in
Subparagraph 9.3(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 (S)72(p) of the Code.
(b) Principal and interest shall be amortized, on a level basis, over
the term of the loan.
34
(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, or has terminated employment,
repayment shall be made by means prescribed by the Administrator.
Repaid principal and interest shall be credited in accordance with the
Member's election under Paragraph 6.2.
9.9 Deemed Distribution
A distribution of the unpaid principal shall be deemed to have been
made to the Member if the Member fails to make payment under Subparagraph
9.8(c) for a period of 90 days.
9.10 Default
If the Member is not in receipt of regular Earnings sufficient to
permit repayment of the loan and does not make manual repayments for a
period exceeding 90 days, the loan will be deemed in default and the
Administrator will realize on the security in accordance with applicable
laws.
35
SECTION 10
ADMINISTRATION
CAPITAL ACCUMULATION PLAN ADMINISTRATIVE COMMITTEE
10.1 Capital Accumulation Plan Administrative Committee
The Plan shall be administered by a Capital Accumulation Plan
Administrative Committee. The Committee shall consist of the Senior 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.
10.2 Rules of Conduct
The Capital Accumulation Plan Administrative Committee shall adopt
such rules for the conduct of its business and administration of this Plan
as it considers desirable; provided, they do not conflict with this Plan.
10.3 Legal, Accounting, Clerical
The Capital Accumulation 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. Notwithstanding the
foregoing, brokerage commissions, transfer fees and other expenses actually
incurred in any sale or purchase of Company Common Stock shall be equitably
added to the cost or subtracted from the proceeds of all purchases or
sales.
10.4 Interpretation of Provisions
The Capital Accumulation 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.
10.5 Records of Administration
The Capital Accumulation Plan Administrative Committee shall keep
records reflecting the administration of this Plan which shall be subject
to audit by the Company. Members may examine records pertaining directly to
themselves. At
36
least annually, the Capital Accumulation 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
Capital Accumulation Plan Administrative Committee or the Trustee within 30
days after the date of mailing.
10.6 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.
37
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.
10.7 Liability of Committee
No Member of the Capital Accumulation Plan Administrative Committee
shall be liable for any action taken in good faith or for the exercise of
any power given the Capital Accumulation 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.
10.8 Unlocated Member
If the Committee is unable, after reasonable and diligent effort, to
locate a Member, Former Member or beneficiary entitled to payment under the
Plan, such payment may be forfeited and used to offset Company
Contributions or to pay Plan expenses. If the Member, Former Member or
beneficiary later files a claim for benefit, such benefit will be
reinstated.
10.9 Legal Representative
The Capital Accumulation 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.
38
SECTION 11
AMENDMENTS, DISCONTINUANCE, LIABILITIES
11.1 Amendment
(a) Except as provided in Subparagraph 11.1(b), the Plan may be amended by
the Board of Directors of Vastar Resources, Inc.
(b) A committee consisting of the Vice President, Human Resources, the
Vice President and Controller, the Vice President and General Counsel,
and the General Tax Office of Vastar Resources, Inc. may amend the
Plan under the following circumstances:
(i) Legally required changes;
(ii) Improvement of administrative efficiency;
(iii) Implementation of contractual commitments made by the Company
regarding matters relating to acquisitions, divestitures, joint
ventures or mergers and any matter negotiated pursuant to a
collective bargaining agreement;
(iv) Implementation of any transfer of assets, merger or spin-off of
Plan assets among plans within the company; or
(v) Implementation of participation in the Plan by Subsidiaries or
Affiliates of the Company.
(c) No amendment shall reduce the account of any Member as of the date of
such amendment.
11.2 Termination
Vastar Resources, Inc. intends to continue this Plan indefinitely
but reserves the right to terminate it at any time, by action of its Board
of Directors. If this Plan is terminated, or if there is a complete
discontinuance of contributions under this Plan by the Company, all amounts
credited to Accounts of Members shall be held for distribution as provided
in Section 8.
11.3 Liability of Company
The Company shall have no liability for payments under this Plan
except to make the contributions required by Section 4. Any payments under
the Plan shall be made solely from the fund held by the Trustee.
39
SECTION 12
MISCELLANEOUS
12.1 Employment
This Plan shall not give any Member any right to be continued in
the employment of the Company.
12.2 Benefits Not Assignable
Except as provided in Paragraph 8.4, no benefit under this 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.
12.3 Discharge of Liability
If the Administrator deems any person incapable of receiving benefits to
which such person is entitled under this Plan, by reason of minority,
illness, infirmity, mental incompetency or other incapacity, it may direct
the Trustee to make payment 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.
12.4 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.
12.5 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 this 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 this Plan had
terminated.
12.6 Delegation of Fiduciary or Administrative Responsibilities
Vastar Resources, Inc., 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 Capital Accumulation Plan
Administrative Committee, by resolution of said Committee, may at any time
delegate to any other named person or body, or reassume therefrom, any of
their respective fiduciary responsibilities or
40
administrative duties with respect to this 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 Vastar Resources, Inc., or the
Capital Accumulation Plan Administrative Committee, or of the Treasurer of
Vastar Resources, Inc., as the case may be, may, if so authorized by Vastar
Resources, Inc., said Committee or said Treasurer, delegate any such
responsibilities or duties.
12.7 Named Fiduciary
The named fiduciary with respect to this Plan is Vastar
Resources, Inc. except that (a) as to any matter specified in this Plan as
being the responsibility or function of the Capital Accumulation 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 the Investment Officer, the
named fiduciary is the Trustee or the Investment Officer, as the case may
be, and (c) as to any matter specified in the Plan as being the
responsibility or function of the Treasurer of Vastar Resources, Inc., the
named fiduciary is such Treasurer.
41
SECTION 13
ROLLOVERS
13.1 Rollovers from Other Qualified Plans
An Employee who has had distributed to the Employee all or a portion of his
or her taxable interest in a plan meeting the requirements of (S)401(a) of
the Code, including a defined benefit retirement plan of the Company or a
Subsidiary or Affiliate, (the "Other Plan") may, in accordance with
procedures approved by the Capital Accumulation Plan Administrative
Committee, rollover in cash all or a portion of the taxable distribution
received from the Other Plan to the Plan, provided the following conditions
are met:
(a) The rollover occurs on or before the 60th day after the
Member receives the distribution from the Other Plan;
(b) The distribution from the Other Plan qualifies as an eligible
rollover distribution within the meaning of (S)402(c)(4) of the Code;
and
(c) The amount rolled over does not exceed the maximum amount
which may be rolled over in accordance with (S)402(c)(2) of the Code.
13.2 Transfers From Individual Retirement Accounts
An Employee who receives a distribution from an individual retirement
account described in (S)408(a) of the Code or an individual retirement
annuity described in (S)408(b) of the Code which constitutes the entire
amount of such account or annuity (including earnings thereon), and no
portion of which is attributable to any source other than a distribution
from a qualified plan described in Paragraph 13.1, may, in accordance with
procedures approved by the Capital Accumulation Plan Administrative
Committee, rollover in cash all or a portion of such distribution to the
Plan, within 60 days after receiving the distribution.
13.3 Membership
Notwithstanding anything in the Plan to the contrary, an Employee
who rolls over funds to the Plan pursuant to Paragraph 13.1 or 13.2, shall,
upon such rollover, become a Member of the Plan except that the right to
make Elective Deferrals, Member Contributions or receive Company
Contributions will remain subject to Paragraph 2.1.
42
13.4 Administration
The Administrator shall develop such procedures, including procedures for
obtaining information from an Employee desiring to make such a transfer, as
it deems necessary or desirable to enable it to determine that the proposed
rollover will meet the requirements of this section. Upon approval by the
Capital Accumulation Plan Administrative Committee, the rollover shall be
deposited with the Trustee in the Employee's Rollover Account.
43
SECTION 14
TOP HEAVY PROVISIONS
If the Plan is or becomes Top Heavy in any Plan Year, the provisions of this
Section 14 will supersede any conflicting provisions in the Plan.
14.1 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 (S)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 (S)318 of the Code) the largest interest
in the Company; provided, such Employee's annual Compensation
from the Company exceeds the dollar limitation under
(S)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 (S)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
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(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 (S)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 (S)416 of the Code
and the regulations thereunder.
(ii) If the Company maintains one or more defined contribution
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 14.1(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 14.1(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 (S)416 of the Code and the
regulations thereunder. The accrued benefits under a defined
benefit plan in both the 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.
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(iii) For purposes of Subparagraphs 14.1(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
(S)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
(S)416 of the Code and the regulations thereunder.
Deductible Member 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 (S)411(b)(1)(C) of the Code.
(c) 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 (S)401(a)(4) and (S)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 14.1(e)(i) to meet the requirements of
(S)401(a)(4) or (S)410 of the Code.
(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.
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(g) Valuation Date means December 31 of each year.
(h) Present Value: Present Value shall be based on interest rate and
the mortality tables specified in the Company's defined benefit plan.
(i) Compensation means all compensation, as that term is defined for
(S)415 purposes, but including amounts contributed by the Company
pursuant to Employee Contribution Agreements which are excludable from
the Employee's income under Code (S)125, (S)402(e)(3), (S)402(h) and
(S)403(b).
14.2 Minimum Allocation
(a) Except as otherwise provided in Subparagraphs 14.2(b), (c) and
(d), the Company Contribution 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 this Plan to satisfy (S)401 of
the Code, the largest percentage of Company Contribution, 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 Member Contributions to the Plan, or (iii) Compensation less
than a stated amount.
(b) The provision in Subparagraph 14.2(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 this 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 this 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:
1. Money Purchase Pension Plan
2. Profit Sharing Plan, and
3. Stock Bonus Plan
47
(e) For purposes of satisfying the minimum allocation requirements of
this Paragraph 14.2, Elective Deferrals and Matching Contributions may
not be taken into account.
14.3 The minimum accrued benefit required [to the extent required to be
nonforfeitable under (S)416(b)] may not be suspended or forfeited under
Code (S)411(a)(3)(B) or (S)411(a)(3)(D).
14.4 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.
14.5 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 Contribution, forfeitures or voluntary nondeductible
contributions allocated to such Employee, or
(b) Accruals for such Employee under any qualified defined benefit
plan.
14.6 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 (S)401(k) of the Code will be counted for the
purposes of (S)416 of the Code.
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SECTION 15
SPECIAL PROVISIONS APPLICABLE TO EMPLOYEES OF THE COMPANY
SECONDED TO SOUTHERN ENERGY MARKETING, L.P.
15.1 Pursuant to an agreement dated as of September 1, 1997, the ("Agreement")
between the Company and Southern Company Energy marketing L.P. ("SCEM"),
certain employees of the Company were seconded to SCEM and as of January 1,
1998, will become SCEM employees following the occurrence of the Second
Closing (as such term is defined in the Formation Agreement between the
Company and SEI Holdings, Inc., dated August 8, 1997). Such employees are
hereinafter referred to as "Transferees."
15.2 The rights and benefits under the Plan of Transferees shall be governed by
the Plan except as provided in this Section 15.
15.3 Effective December 31, 1997, Atlantic Richfield Company Common Stock,
Dividends Paid-Out, shall be replaced with Atlantic Richfield Company
Common Stock, Dividends Reinvested.
15.4 As soon as administratively practicable following termination of
employment with the Company and commencement of employment with SCEM, each
Transferee's Account shall be transferred to the SCEM Employees Savings
Plan. The transfer shall consist of cash and shares of Vastar Resources,
Inc. and to the extent applicable, Atlantic Richfield Company Common Stock
held in the Transferee's Account immediately prior to the transfer.
15.5 To effectuate the transfer of assets and liabilities as contemplated by
this Section 15, the Administrator may suspend the purchase and sales of
investment alternatives as necessary in the Administrator's sole
discretion.
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