EXHIBIT 10.4
VASTAR RESOURCES, INC.
SECOND AMENDMENT TO
DEFERRAL PLAN FOR OUTSIDE DIRECTORS
Pursuant to the power of amendment reserved therein, Vastar Resources, Inc.
Deferral Plan for Outside Directors, which was first effective June 26, 1994,
and amended by the First Amendment effective October 1, 1999, is hereby amended
effective as of May 24, 2000, as follows:
1. Article 1, Section 3 is hereby amended by adding the following
definitions at the end of the Section:
3.30 Change of Control shall mean:
(1) Consummation of a reorganization, merger or consolidation or
sale or other disposition of all or substantially all of the assets of
Vastar Resources, Inc. (a "Business Combination"), unless, in each
case, following such Business Combination:
(i) All or substantially all of the individuals and entities
who were the beneficial owners, respectively, of the then outstanding
shares of Common Stock (the "Outstanding Common Stock") of Vastar
Resources, Inc. and the combined voting power of the then outstanding
voting securities entitled to vote generally in the election of
directors (the "Outstanding Voting Securities") of Vastar Resources,
Inc. immediately prior to such business Combination beneficially own,
directly or indirectly, more than 60 percent of, respectively, the
then Outstanding Common Stock and the then Outstanding Voting
Securities as the case may be, of the corporation or other entity
resulting from such Business Combination (including, without
limitation, a corporation or other entity which, as a result of such
transaction, owns Vastar Resources, Inc. or all or substantially all
of Vastar Resources, Inc. assets either directly or through one or
more subsidiaries or other entities) in substantially the same
proportions as their ownership, immediately prior to such Business
Combination, of the Outstanding Common Stock and Outstanding Voting
Securities, as the case may be;
(ii) No Person (excluding any corporation or other entity
resulting from such Business Combination or any employee benefit plan
(or related trust) of Vastar Resources, Inc. or such corporation or
other entity resulting from such Business Combination) beneficially
owns, directly or indirectly, 20 percent or more of, respectively, the
then Outstanding Common Stock or the then Outstanding Voting
Securities, as the case may be, of such corporation or other entity,
except to the extent that such Person owned 20 percent or more of,
respectively, the Outstanding Common Stock or the Outstanding Voting
Securities of
Vastar Resources, Inc. immediately prior to the Business Combination;
and
(iii) At least a majority of the members of the board of
directors of the corporation or other entity resulting from such
Business Combination were members of the Incumbent Board at the time
of the execution of the initial agreement, or of the action of the
board of directors, providing for such Business Combination; or
(2) Parent Company ceases to own, directly or indirectly, at
least 50 percent of, respectively, the Outstanding Common Stock and
the Outstanding Voting Securities, as the case may be, of Vastar
Resources, Inc. and any other Person (excluding any employee benefit
plan or related trust of Vastar Resources, Inc.) owns, directly or
indirectly, 20 percent or more of, respectively, the Outstanding
Common Stock or the Outstanding Voting Securities, as the case may be,
of Vastar Resources, Inc.; or
(3) Parent Company owns, directly or indirectly, more than 85
percent of, respectively, the Outstanding Common Stock or the
Outstanding Voting Securities, as the case may be, of Vastar
Resources, Inc.; provided, however, that in the event Vastar
Resources, Inc. or any Subsidiary participates in, or is a party to, a
transaction in which Parent Company's ownership increases to more than
85 percent as a secondary consequence of the transaction, then a
committee composed of all of Vastar Resources, Inc. Outside Directors
shall determine, by majority vote, whether a Change of Control has
occurred; or
(4) Individuals who, as of March 5, 1998, constitute the board of
directors of Vastar Resources, Inc. (the "Incumbent Board") cease for
any reason to constitute at least a majority of the board at the end
of any 12-month period following March 5, 1998; provided, however,
that any individual becoming a director subsequent to March 5, 1998,
whose election, or nomination for election by Vastar Resources, Inc.'s
stockholders, was approved by a vote of at least a majority of the
directors then comprising the Incumbent Board shall be considered as
though such individual were a member of the Incumbent Board, except
that any such individual whose initial assumption of office occurs as
a result of an actual or threatened election contest with respect to
the election or removal of directors or other actual or threatened
solicitation of proxies or consents by or on behalf of a Person shall
not be considered to be a member of the Incumbent Board; or
(5) A Change of Control occurs under Article 1, Section 2(b) of
the Atlantic Richfield 1985 Executive Long-Term Incentive Plan, as
amended through July 28, 1997;
(6) Approval by the stockholders of Vastar Resources, Inc. of a
complete liquidation or dissolution of Vastar Resources, Inc.; or
(7) A Subsequent Change of Control.
3.31 Parent Company shall mean the entity, if any, that owns,
directly or indirectly, more than 50 percent of the outstanding common
stock of the Company immediately prior to an event that constitutes a
Change of Control.
3.32 Person shall mean any individual, corporation, firm,
partnership, governmental body, entity or group and shall include any
person within the meaning of (S) 13(d)(3) or (S) 14(d)(2) of the Exchange
Act.
3.33 Subsequent Change of Control shall mean each Change of Control
which occurs after the consummation of a transaction constituting a Change
of Control.
2. Special Election Concerning Plan Benefits. Article II, Section 6 is
amended to add a new Section 6.1(c) at the end thereof which shall read as
follows:
(c) Notwithstanding anything in this Article II, Section 6 and the
Plan to the contrary, each Participant may make a special Change of Control
election ("Special Election") as to the time and/or the form of Retirement
Distribution of the Participant's Account upon the Participant's
Termination of Service. The Special Election would be effective only in
the event of a Change of Control preceding the Participant's Termination of
Service. Any such election must be completed on the form provided by, and
submitted to, the Administrative Committee or its designee before the
shareholders of the Company vote on any proposed action which, if
completed, would constitute a Change of Control. The Special Election is
subject to the following limitations and conditions and the Participant's
Termination of Service:
A. The Participant's earliest payment start date shall be the first
January, but not earlier than 12 months, following the date of
the Change of Control;
B. The Participant's Retirement Distribution payment(s) must be made
or begin to be made no later than the fifth January following a
Change of Control;
C. The Participant may select a Retirement Distribution to be paid
in one of the following ways:
(1) single lump sum payment;
(2) annual installment(s) over one, two or three years (only
available if a Lump Sum Payment is elected); and / or
(3) monthly installments over five, ten or fifteen years.
D. The Retirement Distribution payments must be completed within 20
years following the date of the Change of Control.
3. Article III, Section 3.1 is amended by adding a new Section 3.1(c) to
read as follows:
(c) INTEREST RATE AFTER A CHANGE OF CONTROL. Notwithstanding any
other provisions of this Plan, after a Change of Control, Interest Rate
shall mean the greatest of (1) 125% of the 120-month rolling average of the
10-year U.S. Treasury Note rate for the period ending the prior June 30,
effective for the Plan Year commencing thereafter, determined in a manner
consistent with past practice; or (2) the Citibank Base Rate; or (3) the
rate of interest credited under a comparable plan maintained in the United
States for senior executives of BP Amoco p.l.c. and Atlantic Richfield
Company (or upon a subsequent Change of Control, the acquiring company).
The provision of clauses (1), (2), and (3) shall apply for 10 complete Plan
Years, with the first year commencing the January 1 after the Change of
Control. For the 11/th/ through 20/th/ years after a Change of Control,
the Interest Rate shall be no less than the greater of (2) or (3) above.
If a Change of Control occurs within any of the above time periods, the
time periods would restart commencing on January 1 after any such Change of
Control. As used above, the term "Citibank Base Rate" means the rate of
interest announced from time to time by Citibank, N.A. or its successor as
its base rate of interest charged to its customers. If Citibank, N.A. is
not in existence then the Special Plan Administrator shall substitute the
base rate of another major money center bank located in the United States.
If a Participant fails to make a Special Election as described above, or
has a Termination of Service before a Change of Control occurs, payment of the
Participant's Retirement Distribution will be made in accordance with the
Participant's previous election.
4. Article IV, Section 9.1 of the Plan shall be amended in its entirety
to read as follows:
9.1 Upon a Change of Control, the interests of all the remaining
Participants shall continue and provisions shall be made in
connection with such transaction for the continuance of the Plan and the
assumption of the obligations of the Company under the Plan by the
Company's successor(s) in interest.
VASTAR RESOURCES, INC.
/s/ JEFFREY M. BENDER
ATTEST: By: ______________________________
Jeffrey M. Bender
Vice President, Human Resources
/s/ A. SHAWN NOONAN
By: ______________________________
A. Shawn Noonan
General Tax Officer