EXHIBIT 10.4
VASTAR RESOURCES, INC.
EXECUTIVE MEDICAL PLAN
__________________________
The formal plan documentation for the Vastar Resources, Inc. (the
"Company") Executive Medical Plan (the "Plan") for purposes of the Employee
Retirement Income Security Act of 1974 and any other applicable legal authority
consists of (a) the summary plan description prepared for this Plan, as in
effect from time to time (the "Summary Plan Description"), (b) the Group Policy
No. GP-697987, contained in Exhibit A hereto, with an effective date of July 1,
1994, and (c) the contents of this document.
The named fiduciary for the Plan is the Plan Administrator except that
as to responsibilities for processing of claims and payment of benefits
described in the Summary Plan Description, the named fiduciary is Aetna U.S.
Healthcare.
Aetna U.S. Healthcare, as to basic administrative matters and initial
claims determinations, and the Plan Administrator, as to the review of claims
determinations and eligibility, (a) shall act with care, skill, prudence and
diligence under the circumstances then prevailing that a prudent man acting in a
like capacity and familiar with such matters would use in the conduct of an
enterprise of like character and with like aims, and shall have no liability for
any action or forbearance on its part with respect to which it has so acted, and
(b) shall have full discretion and final authority to determine eligibility for
benefits and to construe the terms of the Plan.
The following provisions shall apply in the event of an Anticipatory
Change of Control or a Change of Control as defined hereafter:
1. The following definitions shall be applicable in the event of an
Anticipatory Change of Control or a Change of Control:
(a) The term "Anticipatory Change of Control" shall be ascribed the
meaning set forth for such term on Annex A attached hereto.
(b) "Applicable Period" means the period specified in Subparagraph
2(c) during which the coverage under the Plan shall remain in effect for a
particular class of Terminated Participants.
(c) "Benefit Trigger Window" means the 24-month period commencing on
the date that a Change of Control occurs.
(d) "Cause" shall mean (i) the conviction of the Employee for any
felony involving dishonesty, fraud or breach of trust or (ii) the willful
engagement by the Employee in gross misconduct in the performance of his or
her duties that materially injures the Surviving Entity.
(e) The term "Change of Control" shall be ascribed the meaning set
forth for such term on Annex A attached hereto.
(f) "Change of Control Trust" means the trust established by the
Company to provide for the payment of any benefits, in whatever form is
required, under the Plan on and after a Change of Control.
(g) "Employee" means an individual who is employed by the Company or
any of its subsidiaries, but shall exclude individuals in an employment
status which is ineligible for participation in the Plan.
(h) The term "Outside Director" shall be ascribed the meaning set
forth for such term on Annex A attached hereto.
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(i) "Participant" means an Employee of the Company and its
subsidiaries who is eligible to participate in the Plan under the terms of
the Summary Plan Description and Exhibit A.
(j) "Plan Administrator" means the Welfare Plans Committee.
(k) "Qualifying Pay" means the Employee's annualized rate of regular
wages or salary, excluding all extra pay such as overtime, premiums,
bonuses, living or other allowances, determined as of the relevant date.
(l) The term "Special Plan Administrator" shall be ascribed the
meaning set forth for such term on Annex A attached hereto.
(m) "Surviving Entity" means the Company, or any successor (whether
direct or indirect, by purchase, merger, consolidation or otherwise) to all
or substantially all of the business and/or assets of the Company after a
Change of Control, and its affiliates.
(n) "Target Award" means the annual target performance bonus award
applicable to the Employee for the relevant period.
(o) "Welfare Plans Committee" means, (i) prior to the earlier to occur
of a Change of Control or an Anticipatory Change of Control, the Vastar
Resources, Inc. Welfare Plans Committee, and (ii) on and after the earlier
to occur of a Change of Control or an Anticipatory Change of Control, the
Special Plan Administrator. Upon a written determination by the Chief
Financial Officer and the General Counsel of the Company, approved by
either the Board of Directors of the Company (the "Board"), the Outside
Directors or the Executive Committee of the Board, that an Anticipatory
Change of Control has ended without concluding in a Change of Control (an
"Anticipatory Change
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Termination"), the Vastar Resources, Inc. Welfare Plans Committee will be
reinstated. For purposes of this definition, a Change of Control shall not
include an ARCO Acquisition as defined in Section 2(b)(ii).
2. CONTINUATION OF COVERAGE - CHANGE OF CONTROL
(a) If an Employee who is a Participant in the Plan as of the date of
a Change of Control is terminated from employment during the Benefit
Trigger Window under any of the circumstances described under Subparagraph
2(b) (a "Terminated Participant"), coverage under this Plan shall remain in
effect with respect to such Terminated Participant for the Applicable
Period described under Subparagraph 2(c) below, under terms and provisions
(including but not limited to the amount of the Participant contribution,
if any) which are no less favorable than were in effect for active
employees immediately prior to the date of the Change of Control, provided
that the Terminated Participant complies with any requirements of the
Special Plan Administrator regarding the administration of the Plan that
are no less favorable than those available under the health insurance
continuation requirements of applicable law ("COBRA"), including the amount
or time for making Participant contributions, if any, and provided further,
that failure of the Terminated Participant to so comply shall result in a
cancellation of coverage on the date of such delinquency or, if coverage
cannot be canceled as of such date, on the earliest date after such
delinquency occurs on which the coverage can be canceled, in either case,
with no right of reinstatement.
(b) (i) For the purposes of Subparagraph 2(a) above, termination of
employment shall mean:
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(A) a termination of employment during the Benefit Trigger Window
by the Surviving Entity, other than for Cause, or
(B) the Employee's voluntary termination within the Benefit
Trigger Window as a result of the Surviving Entity's implementation
of:
(I) a ten percent or more reduction of such Employee's
Qualifying Pay from the Qualifying Pay determined as of the date
immediately prior to the date of the Change of Control, or a ten
percent or more reduction (based on dollar value) in the
Employee's aggregate Qualifying Pay plus Target Award ("Total
Pay") from the Employee's Total Pay determined as of the date
immediately prior to the date of the Change of Control; or
(II) a required relocation of the Employee's principal place
of work to a location which would satisfy the conditions
specified in (S)217(c)(1) of the Internal Revenue Code of 1986,
as amended, (the "Code"), for a deduction by such Employee of
moving expenses under (S) 217 of the Code.
(C) No Employee shall be deemed to have a termination of
employment solely due to a transfer of employment directly between the
Company, a Surviving Entity or any of their affiliates.
(ii) Notwithstanding anything to the contrary in this Plan, if a
Change of Control as described under paragraph (3) of the definition of
such term on Annex A attached hereto (an "ARCO Acquisition") occurs, no
person shall be entitled to benefits under this Paragraph 2 as a result of
such a Change of Control, but shall instead receive the benefits to
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which they may otherwise be entitled, whether under this Plan or any other
employee welfare benefit plan, as determined in the sole discretion of
Atlantic Richfield Company; provided that benefits for medical costs
incurred and reimbursable under the Plan as of the date of the Change of
Control, but not yet reimbursed, shall be paid in accordance with the terms
of this Plan in existence immediately prior to the Change of Control.
(c) In the event of termination of employment as defined under
Subparagraph 2(b), a Terminated Participant will be entitled to maintain
the coverage under this Plan, as described in Subparagraph 2(a) above,
during the Applicable Period as follows:
APPLICABLE PERIOD OF MEDICAL CONTINUATION
FOLLOWING TERMINATION
===============================================
PERIOD OF BENEFIT
EMPLOYEE CONTINUATION
LEVEL (MONTHS)
==================================================
Tier 1 36
--------------------------------------------------
Tier 2 24
--------------------------------------------------
The expiration of the Applicable Period shall be deemed to be the date of
termination of employment for purposes of COBRA, so that COBRA shall
commence on that date. In the event that after a Change of Control
identical benefit coverage under this Plan is not reasonably available, the
Special Plan Administrator shall substitute reasonably equivalent coverage,
taking into consideration the benefits offered, the Employee deductible,
co-insurance and out-of-pocket limits, and cost to the Surviving Entity.
(d) Upon the earlier to occur of an Anticipatory Change of Control or
a Change of Control (excluding an ARCO Acquisition), the Company or any
successor to the obligations of the Company will fund the Change of Control
Trust in accordance with its terms.
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3. AMENDMENT AND TERMINATION OF PLAN
(a) Amendment or Termination Generally. Except as provided in
Subparagraphs 3(b) and (c) below, this Plan may be amended or terminated at
any time by a written instrument executed by the Company acting through its
Vice President, Human Resources. Such amendment or termination may be
effective with respect to the Company or to any participating subsidiary of
the Company under the Plan. No such amendment or termination shall
adversely affect medical benefits incurred under the Plan but not yet paid
prior to the effective date of the amendment or termination.
Notwithstanding anything in this Plan to the contrary, this Plan may be
amended to the extent necessary to comply with applicable law.
(b) Amendment or Termination During an Anticipatory Change of Control.
The Plan may not be terminated or amended during the period after the
occurrence of an Anticipatory Change of Control and prior to a Change of
Control or an Anticipatory Change Termination (as defined in Section 1(o)),
except that the Board of Directors of the Company may amend the Plan during
such a period as it may deem reasonably necessary, provided, that in the
event any such amendment reduces, or could reduce, the value of any benefit
of a Plan Participant, as determined in the sole discretion of the Special
Plan Administrator, the Company or any successor to the obligations of the
Company shall, prior to, and as a condition precedent to, such amendment
going into effect, provide substantially equivalent value in replacement
thereof to the Participant in the reasonable determination of the Special
Plan Administrator, taking into consideration the benefits offered, the
employee deductible, co-insurance and out-of-pocket limits, and cost to the
Company.
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(c) Amendment or Termination on or After a Change of Control. The
Plan may not be terminated or amended on or after a Change of Control, in
any manner that would negatively affect a Participant's rights arising as a
result of the Change of Control under Paragraph 2 without the consent of
all of the Participants or, in the alternative, the Participants whose Plan
benefits are affected by such termination or amendment. The Plan will
terminate on the third anniversary of the expiration of the Benefit Trigger
Window, provided, however, that such termination shall not affect any right
of a Participant which shall have accrued prior to such termination.
(d) ARCO Acquisition. An ARCO Acquisition shall not be treated as a
Change of Control for purposes of this Paragraph 3.
4. AUTHORIZED OFFICER
Any action required to be taken under this Plan by the Chief Financial
Officer and the General Counsel of the Company may be taken by either
individual if the other position is then vacant, and if both positions are
vacant, such action may be taken by any other officer of the Company with a
position of vice president or above. Any action required to be taken by
the Vice President, Human Resources of the Company may, if such position is
vacant, be taken by any other officer of the Company with a position of
vice president or above.
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Executed as of the 10th day of March, 1999.
ATTEST VASTAR RESOURCES, INC.
By: /s/ Jonathan D. Edelfelt By: /s/ Jeffrey M. Bender
-------------------------- ---------------------------
JONATHAN D. EDELFELT JEFFREY M. BENDER
Associate Secretary Vice President
Human Resources
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