EXHIBIT 10.16
LYONDELL CHEMICAL COMPANY
EXECUTIVE SEVERANCE PAY PLAN
1. Purpose. This Lyondell Chemical Company Executive Severance Pay Plan
(the "Plan") is intended to assure Lyondell Chemical Company (the "Company")
that it will have the continued dedication of specified executives of the
Company by eliminating the distractions of personal uncertainties associated
with potential transactions that the Company may undertake in the future by
providing for the payment to such executives of certain severance benefits upon
a termination within a specified period following a Change in Control, as
defined below.
2. Definitions. As used herein, the terms set forth below shall have the
following respective meanings:
"Applicable Annual Earnings" means the sum of a Participant's annual
base salary in effect on the last day of employment with Company (or if greater,
annual base salary in effect on the date of the Change in Control) and the
Participant's Target Award (whether or not paid) for personal services on behalf
of the Company. The "Target Award" shall be the actual bonus compensation target
for the calendar year during which the Change of Control occurs, or if none has
been established, the bonus compensation target for the immediately preceding
calendar year. Applicable Annual Earnings shall include the Participant's
current annual base salary and Target Award whether or not paid on a deferred
basis, including without limitation, amounts contributed by or on behalf of the
Participant under any Company-sponsored plan, such as a plan described in
section 125 or 401(k) of the Internal Revenue Code of 1986, as amended, or the
Company's Executive Deferral Plan. Notwithstanding the preceding provisions of
this paragraph, for purposes of this Plan, the definition of Applicable Annual
Earnings does not include any income attributable to stock options, stock
appreciation rights, performance awards other than awards under an executive
bonus plan described above, dividend credits, and restricted stock granted
under, and dividends on shares acquired pursuant to, any stock option plan,
restricted stock plan or performance unit plan.
"Board" means the Board of Directors of the Company.
"Change in Control" shall be deemed to have occurred as of the date
that one or more of the following occurs:
(i) Individuals who, as of February 1, 1999, constitute the entire
Board ("Incumbent Directors") cease for any reason to constitute at least a
majority of the Board; provided, however, that any individual becoming a
director subsequent to the date hereof whose election, or nomination for
election by the Company's shareholders, was approved by a vote of at least a
majority of the then Incumbent Directors shall be considered as though such
individual was an Incumbent Director, but excluding, for this purpose any such
individual whose initial assumption of office occurs as a result of either an
actual or threatened election contest, as such terms are used in Rule 14a-11
under the Securities Exchange Act of 1934, as amended or other actual or
threatened solicitation of proxies or consents by or on behalf of any Person (as
defined below) other than the Board;
(ii) The stockholders of the Company shall approve (A) any merger,
consolidation or recapitalization of the Company (or, if the capital stock of
the Company is affected, any subsidiary of the Company), or any sale, lease, or
other transfer (in one transaction or a series of transactions contemplated or
arranged by any party as a single plan) of all or substantially all of the
assets of the Company (each of the foregoing being an "Acquisition Transaction")
where (1) the shareholders of the Company immediately prior to such Acquisition
Transaction would not immediately after such Acquisition Transaction
beneficially own, directly or indirectly, shares or other ownership interests
representing in the aggregate eighty percent (80%) or more of (a) the then
outstanding common stock or other equity interests of the corporation or other
entity surviving or resulting from such merger, consolidation or
recapitalization or acquiring such assets of the Company, as the case may be
(the "Surviving Entity") (or of its ultimate parent corporation or other entity,
if any), and (b) the Combined Voting Power of the then outstanding Voting
Securities of the Surviving Entity (or of its ultimate parent corporation or
other entity, if any) or (2) the Incumbent Directors at the time of the initial
approval of such Acquisition Transaction would not immediately after such
Acquisition Transaction constitute a majority of the Board of Directors, or
similar managing group, of the Surviving Entity (or of its ultimate parent
corporation or other entity, if any), or (B) any plan or proposal for the
liquidation or dissolution of the Company; or
(iii) Any Person shall be or become the beneficial owner (as defined in
Rules 13d-3 and 13d-5 under the Securities Exchange Act of 1934, as amended),
directly or indirectly, of securities of the Company representing in the
aggregate more than twenty percent (20%) of either (A) the then outstanding
shares of common stock of the Company ("Common Shares") or (B) the Combined
Voting Power of all then outstanding Voting Securities of the Company; provided,
however, that notwithstanding the foregoing, a Change in Control shall not be
deemed to have occurred for purposes of this Subsection (iii):
(1) Solely as a result of an acquisition of securities by the Company
which, by reducing the number of Common Shares or other Voting Securities
outstanding, increases (a) the proportionate number of Common Shares
beneficially owned by any Person to more than twenty percent (20%) of the Common
Shares then outstanding, or (b) the proportionate voting power represented by
the Voting Securities beneficially owned by any Person to more than twenty
percent (20%) of the Combined Voting Power of all then outstanding Voting
Securities; or
(2) Solely as a result of an acquisition of securities directly from
the Company except for any conversion of a security that was not acquired
directly from the Company, provided, further, that if any Person referred to in
paragraph (1) or (2) of this Subsection (iii) shall thereafter become the
beneficial owner of any additional Common Shares or other Voting Securities of
the Company (other than pursuant to a stock split, stock dividend or similar
transaction), then a Change in Control shall be deemed to have occurred for
purposes of this Subsection (iii).
(iv) For purposes of this definition of Change in Control:
(1) "Affiliate" shall mean, as to a specified Person, another Person
that directly, or indirectly through one or more intermediaries, controls or is
controlled by, or is under common control with, the specified Person, within the
meaning of such terms as used in Rule 405 under the Securities Act of 1933, as
amended, or any successor rule.
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(2) "Combined Voting Power" shall mean the aggregate votes entitled
to be cast generally in the election of the Board of Directors, or similar
managing group, of a corporation or other entity by holders of then outstanding
Voting Securities of such corporation or other entity.
(3) "LCR" shall mean LYONDELL-CITGO Refining Company Ltd. (from and
after January 1, 1999, LYONDELL-CITGO Refining LP), a Limited Liability Company
organized under the laws of the State of Texas.
(4) "Person" shall mean any individual, entity (including, without
limitation, any corporation, partnership, trust, joint venture, association or
governmental body) or group (as defined in Sections 14(d)(3) or 15(d)(2) of the
Exchange Act and the rules and regulations thereunder); provided, however, that
Person shall not include the Company or LCR, any of their subsidiaries, any
employee benefit plan of the Company or LCR or any of their majority-owned
subsidiaries or any entity organized, appointed or established by the Company,
LCR or such subsidiaries for or pursuant to the terms of any such plan.
(5) "Voting Securities" shall mean all securities of a corporation or
other entity having the right under ordinary circumstances to vote in an
election of the Board of Directors, or similar managing group, of such
corporation or other entity.
"Cause" means: (i) the continued and willful refusal by a Participant
to substantially perform his duties (other than a willful refusal to perform a
duty which constitutes Constructive Termination for Good Reason or refusal
resulting from the Participant's incapacity due to physical or mental illness),
after demand for substantial performance is delivered by the Board which demand
specifically identifies the manner in which the Board has determined that the
Participant has not substantially performed his duties, and the Participant's
performance is not cured to the Board's reasonable satisfaction within thirty
(30) days from such demand; (ii) the engagement by a Participant in willful
misconduct or dishonesty that is materially injurious to the Company, monetarily
or otherwise; or (iii) a Participant's final conviction of a felony.
Notwithstanding the foregoing, the Company shall not be deemed to have
terminated a Participant for Cause without (i) reasonable written notice to a
Participant setting forth the reasons for the Company's intention to terminate
the Participant for Cause and (ii) an opportunity for the Participant, together
with his counsel, to be heard before the Board. Notwithstanding any contrary
provision of this Plan, it is specifically agreed that Cause shall not include
any act or omission by a Participant in the good faith exercise of the
Participant's business judgment as an officer of the Company.
"Code" means the United States Internal Revenue Code of 1986, as
amended from time to time.
"Common Stock" means the common stock, par value $1.00 per share, of
the Company.
"Committee" means the Compensation Committee of the Board or any person
or persons appointed by the Board to administer the Plan.
"Company" means Lyondell Chemical Company.
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"Constructive Termination for Good Reason" means:
(i) the Participant is assigned to any duties or responsibilities
that are not comparable to the Participant's position, offices, duties,
responsibilities or status with the Company at the time of the Change in
Control, or the Participant's reporting responsibilities or titles are changed
and the change results in a reduction of the Participant's responsibilities or
position with the Company;
(ii) the level of benefits (qualified and executive) or compensation
(individual base compensation and short and long-term incentive opportunity)
provided to the Participant is reduced below the comparable level payable to
similarly situated executives at the Company; or
(iii) the Participant is actually transferred, or offered a proposed
transfer, as evidenced in a written communication from the Company to the
Participant, to another location other than the location at which he was
primarily employed immediately preceding the Change in Control, unless that new
location is a major operating unit or facility of the Company that is located
within 50 miles of the Participant's primary location as of the date immediately
preceding a transfer; provided, however, (1) the Participant, within thirty (30)
days from the date that he is given written notice by the Company of such actual
or proposed transfer, shall provide the Committee or the Board with written
notice that the transfer shall constitute a Constructive Termination for Good
Reason, (2) the Company, within twenty (20) days of receipt of the notice, fails
to provide the Participant with written notice rescinding the actual or proposed
transfer and (3) if the Company does not rescind the transfer, the Participant
must terminate his employment due to Constructive Termination for Good Reason
within forty (40) days following expiration of the twenty (20)-day period so
that in any event the Participant shall have terminated his employment with the
Company within ninety (90) days after the Participant first receives written
notice from the Company of such actual or proposed transfer.
"Disability" means a permanent and total disability as defined in the
Company's Executive Long-Term Disability Plan.
"Effective Date" means March 15, 1999.
"Employee" means an individual employed by the Company or a Subsidiary.
"Level One" means the Chief Executive Officer and any Executive Vice
President of the Company .
"Level One Participant" means a Participant who is employed in a Level
One position of the Company during the period relevant for determination of
eligibility pursuant to Section 3.
"Level Two" means an elected executive officer of the Company who does
not serve in a capacity defined under Level One.
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"Level Two Participant" means a Participant who is employed in a Level
Two position of the Company during the period relevant for determination of
eligibility pursuant to Section 3.
"Level Three" means a senior management position of the Company which
is designated by the Chief Executive Officer as eligible for participation.
"Level Three Participant" means a Participant who is employed in a
Level Three position of the Company during the period relevant for determination
of eligibility pursuant to Section 3.
"Participant" means an Employee who is eligible for a benefit under the
Plan pursuant to Section 3 as a Level One Participant, Level Two Participant, or
Level Three Participant.
"Plan" means the Lyondell Chemical Company Executive Severance Pay
Plan, as amended from time to time.
"Subsidiary" means (i) any corporation, limited liability company or
similar entity of which the Company directly or indirectly owns shares
representing more than 50% of the voting power of all classes or capital stock
of such corporation which have the right to vote generally on matters submitted
to a vote of the shareholders of such entity, (ii) Equistar Chemicals, LP or
LYONDELL-CITGO Refining, LP so long as the Company maintains an equity ownership
interest equal to at least 25% in such entities, or (iii) any other entity in
which the Company has an equity ownership interest of at least 25%, so long as
such entity is designated by the Committee as a Subsidiary for purposes of this
Plan.
3. Administration and Eligibility.
(a) Administration. The Plan shall be administered by the Committee,
which shall have full and exclusive power to interpret this Plan and to adopt
such rules, regulations and guidelines for carrying out this Plan as it may deem
necessary or appropriate. The Committee may, in its discretion, retain the
services of an outside administrator for the purpose of performing any of its
functions hereunder. Any decision of the Committee in the interpretation and
administration of this Plan shall lie within its sole and absolute discretion
and shall be final, conclusive and binding on all parties concerned.
Notwithstanding the foregoing, after a Change in Control, the Board shall
designate a successor plan administrator which shall in all events be
independent of the Company and any affiliate of the Company. The successor plan
administrator shall have all the powers given under the Plan to the Committee
with respect to (i) determining all questions relating to Plan benefits; (ii)
adopting rules and procedures to administer the Plan; and (iii) interpreting
Plan provisions.
(b) Eligibility to Participate. Individuals eligible to receive
benefits under the plan are Employees who, at any time in the two (2) year
period prior to a Change in Control, occupied a position classified as Level One
or Level Two, and such individuals shall be Level One Participants and Level Two
Participants, respectively. In addition, the Chief Executive Officer may
designate Employees in Level Three, individually or by employee classification,
as Level Three
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Participants under the Plan. Any designation of an Employee as a Level Three
Participant must be made by written notice signed by the Chief Executive Officer
and delivered to the Participant with a copy sent to members of the Committee.
Notwithstanding the foregoing, an Employee will not be eligible to become a
Participant so long as such Employee is (i) currently eligible for a severance
benefit upon termination of employment with the Company pursuant to a plan or
agreement established by ARCO Chemical Company, or (ii) eligible for severance
benefits from the Company or a Subsidiary under any other plan or agreement if
such benefits are substantially equal to or greater than the benefits set forth
in this Plan.
(c) Eligibility for Severance Benefits. In the event that a
Participant's employment is terminated, within two years following a Change in
Control, (i) by the Participant within ninety (90) days following the occurrence
of any event which shall constitute Constructive Termination for Good Reason, or
(ii) by the Company for reasons other than (A) Cause, or (B) the Participants'
death or Disability, then the Company will provide or cause to be provided to
the Participant the rights and benefits provided in Section 4.
4. Severance Benefits. If a Participant is eligible for a severance
benefit due to a termination under circumstances described in Section 3(c), then
the Company shall provide or cause to be provided to the Participant benefits as
follows:
(a) Salary and Other Payment at Termination. The Company shall pay to
the Participant not later than thirty (30) days following termination a lump-sum
payment in cash in the amount of:
(i) for Level One Participants, three (3) times the Participant's
Applicable Annual Earnings;
(ii) for Level Two Participants, two (2) times the Participant's
Applicable Annual Earnings; and
(iii) for Level Three Participants, one (1) times the Participant's
Applicable Annual Earnings.
(b) Stock Options. With respect to any stock options granted to the
Participant under any of the Company's incentive plans (a "Stock Option
Plan"), notwithstanding any provision of the Stock Option Plans or the
Participant's associated stock option agreements, if any, to the contrary, all
non-vested options shall become 100% vested and fully exercisable as of the date
of the Change in Control.
In the event the Company is the surviving entity following a Change in
Control, all stock options owned by a Participant shall be freely exercisable
for the remainder of their existing terms without regard to any earlier date
that may be specified therein including, without limitation, an earlier
expiration date specified with respect to a Participant's termination of
employment.
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(c) Minimum Retirement Benefits. The Company shall cause the
Participant to be fully vested in the Company's qualified defined benefit
retirement plan and Supplementary Executive Retirement Plan (or its successor)
and to have satisfied the minimum age and service requirements for early
retirement eligibility for purposes of determining the Participant's eligibility
to commence receipt of benefits under such plans. For purposes of determining
the amount of benefits payable under the Company's qualified defined benefit
plan and Supplementary Executive Retirement Plan (or its successor), a
Participant who has attained age 55 at the time benefit payments commence shall
be deemed to have satisfied the early retirement eligibility requirements for
benefit payment purposes, and a Participant who has not attained age 55 at the
time benefit payments commence shall receive a benefit amount that is
actuarially adjusted to reflect the early commencement of the benefit that would
otherwise have been paid at attainment of early retirement age. Payments
attributable to any early retirement benefit that would become payable under the
Company's qualified defined benefit retirement plan pursuant to this Section
4(c) shall be payable in a lump sum cash payment. The Participant shall be
eligible for coverage under the retiree medical plan of the Company (or its
successor) upon termination of employment, regardless of attained age and
service, with such coverage to be provided for the Participant and the
Participant's dependents on the same terms and conditions, excluding eligibility
requirements, as provided to other retired executives of the Company (or its
successor) in the same class or category of position as was held by the
Participant prior to the Change in Control.
(d) Executive Deferral Plan. Notwithstanding any provisions of the
Company's Executive Deferral Plan (the "Deferral Plan") to the contrary, the
full amount of contributions and earnings accrued or credited to a Participant's
account balance under the Deferral Plan (as of the date immediately preceding
the Termination) shall be immediately distributed to the Participant in a cash
lump-sum payment.
(e) Insurance and Other Benefits. To the extent that a Participant is
eligible thereunder, then for a period of twenty-four (24) months following
termination, the Participant (and his or her dependents, as applicable) shall
continue to be covered at the Company's expense by the Company's life insurance,
medical, dental, accident and disability plans or any successor to a plan or
program in effect at termination for employees in the same class or category as
the Participant (hereafter individually and collectively referred to as "Welfare
Plan"), subject to the terms of the Welfare Plan and to the Participant's making
any required contributions thereto which contributions shall not exceed those
charged to employees in the same class or category in which the Participant was
employed by the Company. In the event that the Participant is ineligible to
continue to be so covered under the terms of any Welfare Plan, or in the event
that Participant is eligible but the benefits applicable to the Participant (and
his dependents, as applicable) are not substantially equivalent to such benefits
immediately prior to termination, then, for a period of twenty-four (24) months
following termination, the Company, at its expense, shall provide to the
Participant (and his or dependents, as applicable) through other sources such
benefits as may be necessary to make the benefits applicable to the Participant
(and his or her dependents, as applicable) substantially equivalent to those in
effect immediately prior to termination. Continuation coverage provided
pursuant to any group health plan maintained by the Company shall be in addition
to any continuation coverage required under the Consolidated Omnibus Budget
Reconciliation Act of 1985 as amended ("COBRA"). Any retiree coverage provided
to a Participant shall be on the same terms
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and conditions, including bridging of coverage, as that provided to executives
in the same class or category in which the Participant was employed by the
Company.
(f) Outplacement. The Company shall provide to the Participant, at its
expense, reasonable outplacement assistance for a period not to exceed one (1)
year for the Participant from a professional outplacement assistance firm which
is reasonably suitable to the Participant and commensurate with his position and
responsibilities. In no event will the amount expended for outplacement
assistance for the Participant exceed $40,000.
(g) Certain Tax Payments. If the Participant becomes entitled to one or
more payments (with a "payment" including, without limitation, an increase in
pension benefits and the vesting of an option or other non-cash benefit or
property) pursuant to the terms of any plan, arrangement or agreement with the
Company (the "Change in Control Payments"), which are or become subject to the
tax imposed by Section 4999 of the Code (or any similar tax that may hereafter
be imposed) (the "Excise Tax"), the Company shall pay to the Participant an
additional cash amount (the "Additional Gross-up Payment") such that the net
amount retained by the Participant after reduction for (i) any Excise Tax on the
Change in Control Payments and (ii) any federal, state and local income or
employment tax and Excise Tax payable with respect to the Additional Gross-up
Payment, shall equal the Change in Control Payments. For purposes of
determining the amount of the Additional Gross-up Payment, the Participant shall
be deemed (i) to pay federal income taxes at the highest stated rate of federal
income taxation (including surtaxes, if any) for the calendar year in which the
Additional Gross-up Payment is to be made; and (ii) to pay any applicable state
and local income taxes at the highest stated rate of taxation (including
surtaxes, if any) for the calendar year in which the Additional Gross-up Payment
is to be made. Any Additional Gross-up Payment required hereunder shall be made
to the Participant at the same time any Change in Control Payment subject to the
Excise Tax is paid or deemed received by the Participant. The Additional Gross-
up Payment shall not be paid under this Plan if an Additional Gross-up Payment
which is identical to or greater than the amount calculated in this Section 4(g)
is paid under any plan, arrangement or agreement with the Company.
If, in connection with the examination of a Participant's tax return,
the Internal Revenue Service asserts that any amount payable or benefit provided
hereunder is a "parachute payment" as defined in the Code and such amount or
benefit was not treated as a parachute payment in determining an Additional
Gross-up Payment, the Company at its cost shall assume the defense of any
controversy involving such issue and shall indemnify and hold the Participant
harmless for all liabilities, costs, taxes, interest and penalties attributable
to such issue and shall to the extent necessary (without duplication) increase
the Additional Gross-up Payment to give effect to any additional amount or
benefit determined to be a parachute payment. The Participant shall cooperate
with the Company so that the Company will be able to challenge any adverse
determination by the Internal Revenue Service through administrative proceedings
and, if determined by the Company, through litigation.
(h) No Duty to Mitigate. A Participant's entitlement to benefits
hereunder shall not be governed by any duty to mitigate the Participant's
damages by seeking further employment nor offset by any compensation which the
Participant may receive from future employment.
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5. Company Benefit Plans
(a) Funding of Supplemental Executive Benefit Plans Trust. Immediately upon
a Change in Control, the Company shall deposit with the trustee under the
Company's Supplemental Executive Benefit Plans Trust Agreement (the "Trust") an
amount which, together with the value of the assets then held under the Trust,
will be sufficient to fund, and to enable the trustee to timely pay, the
benefits due under the Supplementary Executive Retirement Plan, the Executive
Deferral Plan and any other plans funded by the Trust, taking into consideration
such factors as the person serving as the Chief Executive Officer of the Company
immediately prior to the Change in Control or his designee deems relevant.
(b) Other Benefit Plans. The specific arrangements referred to in this Plan
are not intended (i) to exclude or limit a Participant's participation in other
benefit plans or programs in which the Participant currently participates or may
participate including, without limitation, retiree benefits, or benefits which
are available to executive personnel generally in the same class or category as
the Participant or, (ii) to preclude or limit other compensation or benefits as
may be authorized by the Committee or the Board from time to time. To the extent
not otherwise paid or provided, the Company shall timely pay or provide to the
Participants and/or the Participant's dependents any other amounts or benefits
required to be paid or provided or which the Participant or the Participant's
dependents are eligible to receive pursuant to this Plan and under any plan
program, policy or practice or contract or agreement of the Company as in effect
and applicable generally to executive personnel in the same class or category of
a Participant.
6. Payment Obligations Absolute. The Company's obligation to pay or
provide, or to cause to be paid or provided to Participants the amounts and
benefits and to make the arrangements provided in this Plan shall be absolute
and unconditional and shall not be affected by any circumstances (including,
without limitation, any setoff, claim, counterclaim, recoupment, defense or
other right, which the Company may have against a Participant or anyone else).
All amounts payable by or on behalf of the Company hereunder shall be paid
without notice or demand. Each and every payment made hereunder by or on behalf
of the Company shall be final and the Company and its subsidiaries or
affiliates, for any reason whatsoever, shall not seek to recover all or any part
of such payment from a Participant or from whomever shall be entitled thereto.
In no event shall an asserted violation of any provision of this Plan constitute
a basis for deferring or withholding any amount payable to, or on behalf of, a
Participant under this Plan.
7. Confidentiality and Cooperation.
(a) Cooperation. Following termination, Participants will furnish such
information and render such assistance and cooperation as may reasonably be
requested in connection with any litigation or legal proceedings concerning the
Company, any of its Subsidiaries (other than any legal proceedings arising out
of or concerning Participant's employment or Participant's termination). In
connection with such cooperation, the Company will pay or reimburse Participants
for reasonable expenses.
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(b) Release of Liability. Each Participant must, prior to the time that he
or she is eligible to receive any payments provided for in Section 4 of this
Plan, execute and deliver to the Company, on a form reasonably satisfactory to
the Company and the Participant, a separate release and waiver, which, without
limiting the generality of the foregoing, shall include a release and discharge
of the Company, its Subsidiaries, and its and their directors, board of
directors, officers, employees, owners, agents, successors and assigns from any
and all suits, causes of action, demands, claims, charges, complaints,
liabilities, costs, losses, damages, injuries, bonds, judgments, attorneys' fees
and expenses, in any form whatsoever, in law or in equity, whether known or
unknown, whether suspect or unsuspected, arising out of the Participant's
employment with Company or any Subsidiary through his termination, including,
without limitation, claims arising under any federal, state or local law for
breach of an implied covenant of good faith and fair dealing, breach of
contract, defamation, slander, negligent misrepresentation, fraud, intentional
or negligent interference with business relations, and employment
discrimination, including, but not limited to, claims under the Age
Discrimination in Employment Act, the Americans with Disabilities Act and the
Texas Commission on Human Rights Act, except to the extent that the
Participant's rights are vested under the terms of employee benefit plans
sponsored by the Company and except with respect to such rights or claims (other
than agreements herein to perform future employment-related actions) as may
arise after termination.
8. Term of Plan. If a Change in Control occurs, this Plan shall continue
in full force and effect and shall not terminate or expire until all
Participants who become entitled to any payments hereunder shall have received
such payments in full. The Plan shall be subject to amendment, substitution,
revocation or termination by the Committee at any time prior to a Change in
Control; provided, however, that no amendment, substitution, revocation or
termination shall occur without the consent of the affected Participants if a
third party has submitted a proposal to the Board that is reasonably calculated,
in the judgment of the Committee, to effect a Change in Control. After a Change
in Control, the Plan shall not be subject to amendment, substitution, revocation
or termination in any respect which adversely affects the rights of a
Participant without the consent of that Participant.
9. Notices. All notices, requests, demands and other communications
required or permitted to be given hereunder (hereinafter referred to as
"notices") shall be in writing and shall be deemed to have been duly given if
delivered by-hand, given by facsimile or telegram, or mailed via certified or
registered U.S. mail, to the party to receive such notice at such party's
address set forth below; provided that either party may change its address for
notice by giving to the other party written notice of such change.
If to the Company:
Lyondell Chemical Company
1221 McKinney, Suite 1600, Houston, TX 77010
Attn: Chairman of the Board of Directors
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If to a Participant:
Last address on the books of the Company.
Any notice given pursuant to this Plan shall be deemed received (i) if
delivered by-hand, when delivered; (ii) if sent by facsimile or telegram, 24
hours after sending; and (iii) if mailed, when delivered.
10. Claims Procedure. If a Participant makes a written request alleging
a right to receive benefits under this Plan or alleging a right to receive an
adjustment in benefits being paid under the Plan, the Committee shall treat it
as a claim for benefits. All claims for benefits under the Plan shall be sent
to the Committee and must be received within 30 days after termination of
employment. If the Committee determines that any individual who has claimed a
right to receive benefits, or different benefits, under the Plan is not entitled
to receive all or any part of the benefits claimed, he will inform the claimant
in writing of its determination and the reasons therefor in terms calculated to
be understood by the claimant. The notice will be sent within 90 days of the
claim unless the Committee determines additional time, not exceeding 90 days, is
needed. The notice shall make specific reference to the pertinent Plan
provisions on which the denial is based, and describe any additional material or
information that is necessary. Such notice shall, in addition, inform the
claimant what procedure the claimant should follow to take advantage of the
review procedures set forth below in the event the claimant desires to contest
the denial of the claim. The claimant may within 90 days thereafter submit in
writing to the Committee a notice that the claimant contests the denial of his
or her claim by the Committee and desires a further review. The Committee shall
within 60 days thereafter review the claim and authorize the claimant to appear
personally and review pertinent documents and submit issues and comments
relating to the claim to the persons responsible for making the determination on
behalf of the Committee. The Committee will render its final decision with
specific reasons therefor in writing and will transmit it to the claimant within
60 days of the written request for review, unless the Committee determines
additional time, not exceeding 60 days, is needed.
11. Arbitration of Disagreements. Any dispute, controversy or claim
arising out of or relating to the obligations under this Plan (after exhaustion
of the claims procedure remedies set forth in Section 10), shall be settled by
final and binding arbitration in accordance with the American Arbitration
Association Employment Dispute Resolution Rules. The arbitrator shall be
selected by mutual agreement of the parties, if possible. If the parties fail
to reach agreement upon appointment of an arbitrator within 30 days following
receipt by one party of the other party's notice of desire to arbitrate, the
arbitrator shall be selected from a panel or panels submitted by the American
Arbitration Association (the "AAA"). The selection process shall be that which
is set forth in the AAA Employment Dispute Resolution Rules, except that, if the
parties fail to select an arbitrator from one or more panels, AAA shall not have
the power to make an appointment but shall continue to submit additional panels
until an arbitrator has been selected. All fees and expenses of the
arbitration, including a transcript if requested, will be borne by the parties
equally.
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12. Miscellaneous.
(a) Assignment. No right, benefit or interest hereunder shall be subject
to assignment, anticipation, alienation, sale, encumbrance, charge, pledge,
hypothecation or set-off in respect of any claim, debt or obligation, or to
execution, attachment, levy or similar process; provided, however, that
Participant may assign any right, benefit or interest hereunder if such
assignment is permitted under the terms of any plan or policy of insurance, or
annuity contract governing such right, benefit or interest.
(b) Construction of Plan. Nothing in this Plan shall be construed to amend
any provision of any plan or policy of the Company except as otherwise expressly
noted herein. This Plan is not, and nothing herein shall be deemed to create, a
commitment of continued employment of a Participant by the Company or any
Subsidiary. The captions of this Plan are not part of the provisions hereof and
shall have no force or effect. Whenever the context of this Plan so requires,
the masculine gender includes the feminine gender, and words used in the
singular or plural will include the other. The words "herein" "hereunder" and
other similar compounds of the word "here" refer to the entire Plan and not to
any particular section or provision.
(c) Successors. A Participant's rights under this Plan are personal to the
Participant and without the prior written consent of the Company shall not be
assignable by a Participant otherwise than by will or the laws of descent and
distribution. This Plan shall inure to the benefit of and be enforceable by a
Participant's legal representatives. The Company will require any successor to
assume this Plan, and to agree to perform this Plan in the same manner and to
the same extent that the Company would be required to perform this Plan if no
such succession had taken place. Failure of the Company to obtain such
assumption and agreement shall entitle a Participant to compensation from the
Company in the same amount and on the same terms as he would be entitled
hereunder with respect to Constructive Termination for Good Reason.
This Plan shall be binding upon and inure to the benefit of the Company and
any successor organization or organizations which shall success to substantially
all of the business and/or assets of the Company (whether direct or indirect by
means of merger, consolidation, acquisition of substantially all the assets of
the of the Company, or otherwise, including by operation of law).
(d) Taxes. Any payment or delivery required under this Plan shall be
subject to all requirements of the law with regard to withholding of taxes,
filing, making of reports and the like.
(e) Governing Law. TO THE EXTENT THIS PLAN IS NOT GOVERNED BY FEDERAL LAW,
THIS PLAN SHALL BE GOVERNED AND CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE
STATE OF TEXAS, WITHOUT GIVING EFFECT TO ITS CONFLICTS OF LAW PRINCIPLES.
LYONDELL CHEMICAL COMPANY
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