EXHIBIT 10.6(b)
VASTAR RESOURCES, INC.
___________________________________________________
Supplementary Executive Retirement Plan
As Amended and Restated Effective March 24, 1999
VASTAR RESOURCES, INC.
SUPPLEMENTARY EXECUTIVE RETIREMENT PLAN
TABLE OF CONTENTS
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Page No.
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ARTICLE I
Section 1.1 Purpose and Intent of Plan........................................................... 1
Section 1.2 Effective Date of Plan............................................................... 1
Section 1.3 Definitions.......................................................................... 1
Section 1.4 Costs of Plan........................................................................ 4
ARTICLE II SUPPLEMENTAL BENEFIT DEFERRED SALARY AND ANNUAL INCENTIVE AWARDS
Section 2.1 Eligibility.......................................................................... 5
Section 2.2 Amount of Benefit.................................................................... 5
ARTICLE III
Section 3.1 Eligibility.......................................................................... 8
Section 3.2 Amount of Benefit.................................................................... 8
ARTICLE IV SPECIAL SUPPLEMENTAL RETIREMENT BENEFITS............................................. 10
ARTICLE V FORM AND TIMING OF BENEFIT
Section 5.1 Benefits Payable Under Articles II and III........................................... 11
Section 5.2 Benefits Payable Under Article IV.................................................... 12
Section 5.3 Benefits Payable After a Change of Control........................................... 12
ARTICLE VI ADMINISTRATION
Section 6.1 Rules of Conduct..................................................................... 14
Section 6.2 Legal, Accounting, Clerical and Other Services....................................... 14
Section 6.3 Interpretation of Provisions......................................................... 14
Section 6.4 Records of Administration............................................................ 14
Section 6.5 Denial of Claim...................................................................... 14
Section 6.6 Liability of Committee............................................................... 14
Page No.
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ARTICLE VII FACILITY OF PAYENT AND LAPSE OF BENEFITS
Section 7.1 Provisions for Incapacity............................................................ 15
Section 7.2 Payments of Deposits................................................................. 15
ARTICLE VII MISCELLANEOUS
Section 8.1 Unfunded Benefit Plan................................................................ 16
Section 8.2 Grantor Trust........................................................................ 16
Section 8.3 Payments and Benefits Not Assignable................................................. 16
Section 8.4 No Right of Employment............................................................... 16
Section 8.5 Adjustments.......................................................................... 17
Section 8.6 Obligation to Company................................................................ 17
Section 8.7 Protective Provisions................................................................ 17
Section 8.8 Gender, Singular and Plural.......................................................... 17
Section 8.9 Law Governing........................................................................ 17
Section 8.10 Validity............................................................................. 17
Section 8.11 Notice............................................................................... 18
Section 8.12 Successors and Assigns............................................................... 18
Section 8.13 Tax Withholding...................................................................... 18
ARTICLE IX AMENDMENT AND TERMINATION
Section 9.1 Amendment of Plan.................................................................... 19
Section 9.2 Termination.......................................................................... 19
Section 9.3 Effect of Amendment or Termination................................................... 19
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ARTICLE I
GENERAL PROVISIONS
1.1 PURPOSE AND INTENT OF PLAN
(a) This Plan is adopted in conjunction with the Atlantic Richfield Company
Supplementary Executive Retirement Plan. Recognizing that an Employee
may transfer between Vastar Resources, Inc. and Atlantic Richfield
Company during his or her service, each company has agreed to pay a pro
rata share of the Employee's benefit as described under Articles II and
III of each Plan.
(b) This Plan is intended to provide supplemental retirement allowances in
accordance with the provisions of the Plan contained herein, to those
Employees who:
(1) Have received an award under the Vastar Resources, Inc. Annual
Incentive Plan or the Atlantic Richfield Company Annual Incentive
Plan.
(2) Have deferred a portion of their Salary under the Vastar
Resources, Inc. Executive Deferral Plan or the Atlantic Richfield
Company Executive Deferral Plan.
(3) Have had the amount of their retirement benefit reduced due to
federal legal requirements, under a tax-qualified, defined benefit
retirement plan maintained by Vastar Resources, Inc. or Atlantic
Richfield Company, or
(4) Have been granted a Special Supplemental Retirement Benefit in
accordance with the provisions of this Plan.
1.2 EFFECTIVE DATE OF PLAN
The Plan was originally adopted effective June 26, 1994. This Plan as
amended and restated shall be effective as of March 24, 1999.
1.3 DEFINITIONS
(a) "Actuarial Equivalent" means, in comparing benefits payable in
different forms or at different times or in different circumstances, a
value under one such set of circumstances which is the same as the value
under a different set of circumstances. Such value shall be computed and
determined with reference to
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mortality assumptions, interest rates and other actuarial factors and
assumptions then in effect under the Retirement Plan for the purpose of
calculating the actuarial equivalent under that Plan.
(b) "Administrator" means (1) prior to the earlier to occur of a Change of
Control or an Anticipatory Change of Control, Vastar Resources, Inc. or the
Administrative Committee, and (2) on and after the earlier to occur of a
Change of Control or an Anticipatory Change of Control, the Special Plan
Administrator, which shall also assume all powers and duties of the
Administrator under the Plan. 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 Termination"), Vastar Resources, Inc. or the
Administrative Committee will again become the Administrator. For purposes
of this definition a Change of Control shall not include an ARCO
Acquisition.
(c) "Administrative Committee" means the Retirement Plan Committee of the
Vastar Retirement Plan or such other committee as shall be appointed by the
Vice President, Human Resources of the Company.
(d) "Anticipatory Change of Control" shall be ascribed the meaning set
forth for such term in Annex A attached hereto.
(e) "ARCO" means Atlantic Richfield Company.
(f) "ARCO Acquisition" shall mean a change of control as defined in
paragraph (3) of the definition of Change of Control on Annex A attached
hereto.
(g) "ARCO Takeover" shall mean a change of control as defined in paragraph
(5) of the definition of Change of Control on Annex A attached hereto.
(h) "Awards" means an award made under the Vastar Resources, Inc. Annual
Incentive Plan or the Atlantic Richfield Company Annual Incentive Plan,
whether paid in cash or deferred.
(i) "Base Pay" means "Annual Base Pay" as defined in the Retirement Plan.
(j) "Basic Allowance" means an annuity payable for the life of the
Participant, with a guarantee that an amount equal to 60 monthly payments
will be paid to the Participant and his or her Beneficiary.
(k) "Beneficiary" means a person who is entitled to receive a Survivor
Benefit in the event of the Participant's death. The Beneficiary under
Articles II and III of this Plan shall be the same person.
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(l) "Change of Control" shall be ascribed the meaning set forth for such
term as Annex A attached hereto.
(m) "Code" means the Internal Revenue Code of 1986, as amended.
(n) "Company" means Vastar Resources, Inc. and any of its subsidiaries.
(o) "Deferred Compensation" means any amount of Salary which a Participant
elects to defer pursuant to the provisions of the Vastar Resources, Inc.
Executive Deferral Plan or the Atlantic Richfield Company Executive
Deferral Plan.
(p) "ERISA" means the Employee Retirement Income Security Act of 1974, as
amended.
(q) "Employee" means any person who is or was regularly employed by the
Company.
(r) "Fifty Percent Joint and Survivor Annuity" means an annuity providing
payments for the life of a Participant, with a survivor annuity for the
life of his or her Beneficiary under which each payment to the Beneficiary
is 50 percent of the amount payable during the life of the Participant.
Each payment during the life of the Participant shall be a percentage of
the amount otherwise payable to the Participant in the form of a Basic
Allowance, so that the Fifty Percent Joint and Survivor Annuity is the
Actuarial Equivalent of the Basic Allowance otherwise payable to the
Participant.
(s) "Financial Hardship" means a condition of financial difficulty,
determined by the Administrator, upon advice of counsel, to be sufficient
to justify a change of election of the form of benefit under Article V
without causing, in the judgment of counsel, the receipt of taxable income
by any other Participant in the Plan in advance of the payment to him or
her of Plan benefits.
(t) "Lump Sum" means a single payment of the benefit which is the Actuarial
Equivalent of (1) the Basic Allowance, or (2) remaining installments under
a form of annuity in pay status, as applicable.
(u) The term "Outside Director" shall be ascribed the meaning set forth
for such term on Annex A attached hereto.
(v) "Participant" means a person who is or was an Employee and who (1)
received an Award during the computation period which would be used in
computing the Employee's Average Final Base Pay under the Retirement Plans
if the Award were recognized as a part of Base Pay under the Retirement
Plans, (2) deferred a portion of his or her Salary during the computation
period which
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would be used in calculating the Employee's Average Final Base Pay under
the Retirement Plans if the Deferred Compensation were recognized as a part
of Base Pay under the Retirement Plans, (3) has had his or her benefit
under the Retirement Plans reduced due to required limitations under the
Code or ERISA and/or (4) is granted a Special Supplemental Retirement
Benefit pursuant to this Plan.
(w) "Plan" means this Vastar Resources, Inc. Supplementary Executive
Retirement Plan.
(x) "Pre-Retirement Annuity" means the annuity paid under the Retirement
Plans to a survivor, which is attributable to Company contributions and
which is payable on account of the Participant's death prior to commencing
a retirement allowance and following attainment of entitlement to a
retirement allowance derived from Company contributions.
(y) "Retirement Plans" means the Vastar Retirement Plan and any defined
benefit, tax-qualified retirement plan, as defined in (S)3(35) of the ERISA
and (S)401(a) of the Code, maintained by ARCO.
(z) "Salary" means the Employee's regular base salary, excluding any Award,
and any other special or additional compensatory payments made by the
Company or ARCO.
(aa) "Secondary Change of Control" shall mean a sale by ARCO (directly or
indirectly) within one year after an ARCO Acquisition of 85% or more of the
assets held by Vastar immediately prior to the ARCO Acquisition.
(bb) "Special Plan Administrator" shall be ascribed the meaning set forth
for such term on Annex A attached hereto.
(cc) "Special Supplemental Retirement Benefit" means a supplementary
retirement benefit approved for payment under Article IV of this Plan to an
Employee by the Compensation Committee of the Board of Directors of Vastar
Resources, Inc.
(dd) "Survivor Benefit" means the benefit payable upon the death of the
Participant under Section 2.2(c) or 3.2(c).
(ee) "Vastar Retirement Plan" means the Vastar Resources, Inc. Retirement
Plan, and any other defined benefit tax-qualified retirement plan, as
defined in (S)3(35) of ERISA and (S)401(a) of the Code, maintained by the
Company.
1.4 COSTS OF PLAN
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All costs of this Plan, including the administration thereof, shall be
borne by the Company and no Employee contributions shall be required or
permitted.
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ARTICLE II
SUPPLEMENTAL BENEFIT
DEFERRED SALARY AND ANNUAL INCENTIVE AWARD
2.1 ELIGIBILITY
(a) The following Participants shall automatically be eligible for benefits
provided by this Article without the necessity for filing an
application for such benefits:
(1) A Participant retiring with an allowance from the Retirement Plans
which commences immediately (or which could have commenced
immediately) upon separation from employment, and
(2) A Participant terminating employment with a right to an allowance
from the Retirement Plans commencing on a later date.
(b) Any person who is designated by the Participant as a Beneficiary will
be eligible to receive the survivor benefit under Section 2.2(c).
Benefits under this Article will automatically be paid to such person
without the necessity for filing an application. In the case of the
Participant's death prior to commencement of the benefit without his or
her having designated a Beneficiary, the Beneficiary shall be the
participant's spouse if the Participant was married at the time of
death and the Participant's estate if the Participant was single at the
time of death.
2.2 AMOUNT OF BENEFIT
(a) GENERAL. The amount of the benefit payable under this Article is a
portion of the sum of separate, identical benefits prescribed under
provisions of this Article, and the corresponding provisions of the
Atlantic Richfield Company Supplementary Executive Retirement Plan, the
determination of which entails the general calculation of an aggregate
benefit payable from the Plans, followed by the allocation of a specific
benefit to this Plan, as described hereafter, which benefit is payable by
this Plan.
(b) PARTICIPANT BENEFIT
(1) GENERAL CALCULATION. The amount of a Participant's monthly benefit
under this Article will be a percentage, as described in the next
paragraph of this Subsection, of the difference, if any, between (i)
the amount of monthly allowance the Participant would have received
under
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the Retirement Plans at retirement, under the Basic Allowance, if the
Base Pay used in calculating the monthly allowance under the
Retirement Plans had included each Award made to the Participant in
each applicable period and the Participant's Deferred Compensation in
each applicable period, and (ii) the amount of monthly allowance the
Participant is entitled to receive at retirement from the Retirement
Plans, under the Basic Allowance under the Retirement Plans.
(2) SPECIFIC BENEFIT. The percentage of the difference in the monthly
benefit calculated under Section 2.2(b)(1) of this Article II (which
shall be the actual retirement benefit payable under this Article)
shall be the percentage equivalent to a fraction of which the
numerator is the normal monthly retirement allowance to which the
Participant is entitled under the Vastar Retirement Plan and the
denominator of which is the normal monthly retirement allowance to
which the Participant is entitled under the Retirement Plans.
(c) SURVIVOR BENEFIT
(1) DEATH OF PARTICIPANT PRIOR TO COMMENCEMENT OF BENEFIT.
(i) General Calculation. If a Participant who is entitled to
receive a benefit under this Article dies prior to commencing
receipt of the benefit, then the Participant's Beneficiary will
be paid a monthly survivor benefit under this Article equal to a
percentage, as described in the next paragraph of this
Subsection, of the difference, if any, between (A) the monthly
Pre-Retirement Annuity that would have been payable to the
Participant's Beneficiary under the Retirement Plans if the Base
Pay used in computing benefits under the Retirement Plans
included each Award made to the Participant in each applicable
period and the Participant's Deferred Compensation in each
applicable period and (B) the monthly Pre-Retirement Annuity
payable to the Participant's Beneficiary under the Retirement
Plans.
(ii) Specific Survivor Benefit. The percentage of the difference
in the monthly benefit calculation under Section 2.2(c)(1)(i)
(which shall be the actual survivor benefit payable under this
Article) shall be the percentage equivalent to a fraction of
which the numerator is the normal monthly retirement allowance to
which the Participant would have been entitled under the Vastar
Retirement Plan and the denominator of which is the normal
monthly retirement allowance to which the Participant would have
been entitled to under the Retirement Plans.
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(2) DEATH OF PARTICIPANT AFTER COMMENCEMENT OF BENEFIT. If a
Participant dies after commencing receipt of the benefit, then the
Participant's Beneficiary will be paid a monthly survivor benefit, if
applicable, pursuant to the Participant's form of allowance elected
under the Retirement Plans and Article V of this Plan.
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(d) MAXIMUM LIMITATION ON BENEFITS
(1) The benefit calculation under Section 2.2(b)(1) or 2.2(c)(1)(i) of
this article, as the case may be, shall not cause the annual benefit
under the form of allowance elected under the Retirement Plans and
Article III of this Plan, when added to the annual benefit payable
under this article, and Article II of the Atlantic Richfield Company
Supplementary Executive Retirement Plan, to exceed 65 percent of the
greater of (i) the sum of the Participant's annual Salary as of his or
her termination of employment plus his or her most recent Award, or
(ii) the average, during the Participant's prior ten years of
employment, of the Participant's highest three consecutive years of
Salary (whether or not deferred) and Award in each such year.
(2) Annuities resulting from voluntary employee contributions to the
Retirement Plans and increased benefits resulting from election of a
Level Income Option under the Retirement Plans shall not be considered
in applying the foregoing limitations.
(e) COMPUTATION PROCEDURE. For purposes of computing the amount of monthly
benefit payable under Sections 2.2(b) and 2.2(c) of this Article, it shall
be assumed that an Award has been made with respect to the calendar year in
which a Participant's termination or death occurs equal in amount to a pro
rata share of the Award, if any, made to such Participant with respect to
the calendar year immediately preceding such year, or if no such Award has
been made, then equal in amount to a pro rata share of the most recent
Award made to such Participant (the "Pro Rata Calculation"). If, following
termination or death and after commencement of benefits under this Article,
the Participant (or the Participant's estate or beneficiary) receives an
Award with respect to the year of termination or death, the benefit under
this Article shall be recalculated to take into account such Award,
provided however, that such recalculation shall not result in a reduction
of the benefit that has commenced under this Article. If, following
termination or death and after commencement of benefits under this Article,
the Participant (or the Participant's estate or beneficiary) receives an
Award with respect to the year immediately preceding the year of
termination or death, the benefit payable under this Article (including the
Pro Rata Calculation, if applicable) shall be recalculated to take into
account such Award provided however, that such recalculation shall not
result in a reduction of the benefit that has commenced under this Article.
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(f) SEPARATION FROM EMPLOYMENT. Unless a Participant at the time of
separation from Company employment is eligible for an immediate or deferred
retirement allowance from the Retirement Plans or unless a survivor benefit
is payable under Section 2.2(c) of this Article upon the death of the
Participant, rights of the Participant, and any person claiming under or by
right of the Participant, to any benefits under this Article shall cease
upon the Participant's separation from the employment of the Company.
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ARTICLE III
SUPPLEMENTAL BENEFIT
LEGALLY REQUIRED LIMITATIONS UNDER QUALIFIED PLANS
3.1 ELIGIBILITY
(a) The following Participants shall automatically be eligible for benefits
provided by this Article without the necessity for filing an application
for such benefits:
(1) A Participant retiring on an allowance from the Retirement Plans
which commences immediately (or which could have commenced
immediately) upon separation from employment, and
(2) A Participant terminating employment with a right to an allowance
from the Retirement Plans commencing on a later date.
(b) Any person who is designated by the Participant as a Beneficiary will
be eligible to receive the survivor benefit under Section 3.2(c). Benefits
under this Article will automatically be paid to such person without the
necessity for filing an application. In the case of the Participant's death
prior to commencement of the benefit without his or her having designated a
Beneficiary, the Beneficiary shall be the Participant's spouse if the
Participant was married at the time of death, and the Participant's estate
if the Participant was single at the time of death.
3.2 AMOUNT OF BENEFIT
(a) GENERAL. The amount of the benefit payable under this Article is a
portion of the sum of separate, identical benefits prescribed under
provisions of this Article, and the corresponding provisions of the
Atlantic Richfield Company Supplementary Executive Retirement Plan, the
determination of which entails the general calculation of an aggregate
benefit payable from the Plans, followed by the allocation of a specific
benefit to this Plan, as described hereafter, which benefit is payable by
this Plan.
(b) PARTICIPANT BENEFIT
(1) GENERAL CALCULATION. The amount of a Participant's monthly benefit
under this Article will be a percentage, as described in the next
paragraph of this Subsection, of the difference, if any, between (i)
the amount of monthly allowance the Participant would have received
under the Retirement Plans at retirement, under the Basic Allowance,
if the calculation of the benefit were not subject to limitations or
reductions required under the Code or ERISA, and (ii) the amount of
monthly
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allowance the Participant is entitled to receive at retirement from
the Retirement Plans, under the Basic Allowance under the Retirement
Plans.
(2) SPECIFIC BENEFIT. The percentage of the difference in the monthly
benefit calculated under Section 3.2(b)(1) (which shall be the actual
retirement benefit payable under this Article) shall be the percentage
equivalent to a fraction of which the numerator is the number of years
of service credited to the Participant for benefit accrual purposes
under the Vastar Retirement Plan and the denominator of which is the
total number of years of service credited to the Participant for
benefit accrual purposes under the Retirement Plans.
(c) SURVIVOR BENEFIT
(1) DEATH OF PARTICIPANT PRIOR TO COMMENCEMENT OF BENEFIT.
(i) General Calculation. If a Participant who is entitled to
receive a benefit under this Article dies prior to commencing
receipt of the benefit, then the Participant's Beneficiary will
be paid a monthly survivor benefit under this Article equal to a
percentage, as described in the next paragraph of this
Subsection, of the difference, if any, between (A) the monthly
Pre-Retirement Annuity that would have been payable to the
Participant's Beneficiary under the Retirement Plans if the
calculation of the Pre-Retirement Annuity were not subject to
limitations or reductions required under the Code or ERISA, and
(B) the monthly Pre-Retirement Annuity payable to the
Participant's Beneficiary under the Retirement Plans.
(ii) Specific Survivor Benefit. The percentage of the difference
in the monthly benefit calculation under Section 3.2(c)(1)(i)
(which shall be the actual survivor benefit payable under this
Article) shall be the percentage equivalent to a fraction of
which the numerator is the number of years of service credited to
the Participant for benefit accrual purposes under the Vastar
Retirement Plan and the denominator of which is the total number
of years of service credited to the Participant for benefit
accrual purposes under the Retirement Plans.
(2) DEATH OF PARTICIPANT AFTER COMMENCEMENT OF BENEFIT. If a
Participant dies after commencing receipt of the benefit, then the
Participant's Beneficiary will be paid a monthly survivor benefit, if
applicable, pursuant to the Participant's form of allowance elected
under the Retirement Plans and Article V of this Plan.
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ARTICLE IV
SPECIAL SUPPLEMENTAL RETIREMENT BENEFITS
At its sole discretion the Compensation Committee of the Board of Directors of
Vastar Resources, Inc. may award a Special Supplemental Retirement Benefit to
any Employee in such amount, or to be computed on such basis, as it may
determine. Such awards may be granted for any reason deemed appropriate by the
Compensation Committee, including without limitation, recognition of all or any
part of the Employee's years of service with an organization or entity acquired
by, or merged into, Vastar Resources, Inc., any of its subsidiaries or
affiliates, or by any predecessor company of Vastar Resources, Inc. or any of
its subsidiaries or affiliates. In no event shall a Special Supplemental
Retirement Benefit be granted under the Plan to or on account of any Employee
who is not a member of a select group of management or other highly compensated
employees as defined from time to time by the Compensation Committee. A
certified copy of the resolutions granting a Special Supplemental Retirement
Benefit shall be furnished to the Administrator prior to the date any payment on
account thereof is to be made under the Plan.
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ARTICLE V
FORM AND TIMING OF BENEFIT
5.1 BENEFITS PAYABLE UNDER ARTICLES II AND III
(a) OPTIONAL FORMS OF BENEFIT. The Participant may elect to receive payment
of his or her benefit under Articles II and III in any form available for
payment of the normal retirement benefit under the Vastar Retirement Plan,
provided that (1) the same form of payment must be elected under Articles
II and III, and (2) if the Participant elects a form of annuity under
Articles II and III and under the Retirement Plans, then he must elect the
same form of annuity under this Plan and the Retirement Plans. Participant
benefits payable under Articles II and III shall commence at the same time
as the benefits of the Participant under the Retirement Plans commence.
(b) ELECTIONS
(1) The Participant shall elect the form of payment of his or her
benefit to be received under Articles II and III of this Plan within
the time frame, and on the election form, prescribed by the
Administrator and communicated to the Participant in advance of the
date the Participant is eligible to commence benefit payments.
(2) If the Participant fails to elect the form of benefit payment
within the time frame designated by the Administrator, then upon
retirement the Participant will receive (i) if the Participant is
married at the time of retirement, an annuity payment in the form of a
Fifty Percent Joint and Survivor Annuity, with the surviving spouse as
the Beneficiary or (ii) if the Participant is single at the time of
retirement, an annuity in the form of the Basic Allowance.
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(3) If the Participant makes an election of the form of payment of his
or her benefit within the time frame designated by the Administrator
and subsequently wishes to change this election prior to commencement
of the benefit or, in the case of an annuity form of payment under
which payments have commenced, to receive the remaining monthly
payments in a Lump Sum which is the Actuarial Equivalent of the
remaining annuity installments, then he may request, by application to
the Administrator, to change the form of payment previously elected,
(i) without any reduction in, or imposition of any penalty on, the
Participant's Account, provided that the Administrator determines that
the Participant has experienced a Financial Hardship justifying the
request for a change of election, or (ii) the Administrator, in its
sole discretion, determines that it is appropriate to grant the
Participant's request based on the interests of the Company or the
grantor trust established under Section 8.2.
(4) The Participant may elect the form of payment of the Survivor
Benefit that will apply in the event of the Participant's death prior
to commencement of his or her benefit, which shall be one of the
optional forms available under the Vastar Retirement Plan, or an
immediate Lump Sum payment on the death of the Participant. If the
Participant fails to make the election, payment to the Beneficiary
will be an annuity payable in the form prescribed by the Vastar
Retirement Plan. However, the Beneficiary may request the
Administrator to change the Participant's prior election provided that
the Administrator makes a finding described under either Section
5.1(b)(3)(i) or (ii). Benefits paid in one of the optional forms of
payment available under the Vastar Retirement Plan to the Beneficiary
shall commence on the earliest date the Participant would have become
eligible to begin receiving a retirement allowance; provided, however,
that the Beneficiary may elect to receive a Lump Sum, subject to the
requirements described in Section 5.1(b)(3)(i) or (ii).
5.2 BENEFITS PAYABLE UNDER ARTICLE IV
The form of payment of any benefit under Article IV, including any
survivor benefit provisions, and the time for commencement of payment,
shall be as determined by the Compensation Committee of the Board of
Directors of Vastar Resources, Inc. and prescribed in the Committee's
resolutions granting such benefit.
5.3 BENEFITS PAYABLE AFTER A CHANGE OF CONTROL
(a) GENERAL. Notwithstanding anything to the contrary in any other Section
of this Plan, effective immediately upon a Change of Control, other than an
ARCO Acquisition or an ARCO Takeover, the Administrator shall cause an
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amount equal to the Lump Sum payment for each Participant to be transferred
from the Plan to the Vastar Resources, Inc. Executive Deferral Plan and
credited to the Participant's account in the Executive Deferral Plan,
provided, however, that if a Participant does not have an account in the
Executive Deferral Plan, the Lump Sum payment applicable to such
Participant's benefit under this Plan shall be immediately paid to the
Participant in complete satisfaction of the Participant's rights hereunder.
Thereafter, the benefits payable under this Plan shall be governed by the
terms of the Executive Deferral Plan. However, with respect to (i) the
remaining annuity payments to be received by any Participant or
Beneficiary pursuant to this Plan whose annuity payments have commenced as
of the date of the Change of Control and (ii) the benefit payable to any
Participant who terminated his or her employment prior to a Change of
Control (or a Beneficiary who became entitled to a benefit under this Plan
as a result of a death of a Participant occurring prior to a Change of
Control) which has not commenced as of the date of a Change of Control, the
benefits payable to such persons shall continue as provided for in this
Plan.
(b) ARCO TAKEOVER. The Chief Financial Officer and the General Counsel of
the Company may elect, by means of a written determination made in their
sole discretion either prior to but not longer than 15 days after an ARCO
Takeover to apply the provisions of Section 5.3(a) and Article IX as if a
Change of Control (other than an ARCO Acquisition or an ARCO Takeover) had
occurred on the date of such determination. In the absence of such a
determination, the benefits payable to Participants shall continue as
provided for in this Plan, as amended from time to time pursuant to
Article IX.
(c) ARCO ACQUISITION. In the event of an ARCO Acquisition the benefits
payable to Participants shall continue as provided for in this Plan, as
amended from time to time pursuant to Article IX; provided, however, that
in the event a Secondary Change of Control occurs, the provisions of
Section 5.3(a) and Article IX shall apply as if the Secondary Change of
Control were a Change of Control.
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ARTICLE VI
ADMINISTRATION
6.1 RULES OF CONDUCT
The Administrator 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 the provisions of this Plan.
6.2 LEGAL, ACCOUNTING, CLERICAL AND OTHER SERVICES
The Administrator may authorize one or more of its members (if
applicable) or any agent to act on its behalf and may contract for legal,
accounting, clerical and other services to carry out this Plan. All
expenses of the Administrator shall be paid by the Company or by the
trustee of the grantor trust described in Section 8.2 (the "Trustee").
6.3 INTERPRETATION OF PROVISIONS
The Administrator shall have the right to interpret the provisions of
this Plan and to decide questions arising in its administration. The
decisions and interpretations of the Administrator shall be final and
binding on the Company, the Participants, the Trustee and all other
persons.
6.4 RECORDS OF ADMINISTRATION
The Administrator shall keep records reflecting the administration of
this Plan which shall be subject to audit by the Company and the Trustee.
6.5 DENIAL OF CLAIM
The Administrator shall provide adequate notice in writing to any
Participant or Beneficiary whose claim for benefits under this Plan has
been denied, setting forth the specific reasons for such denial. The
Participant or Beneficiary will be given an opportunity for a full and fair
review by the Administrator of the decision denying the claim. The
Participant or Beneficiary shall be given 60 days from the date of the
notice denying any such claim within which to request such review.
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6.6 LIABILITY OF COMMITTEE
No member of the Administrator shall be liable for any action taken in
good faith or for exercise of any power given the Administrator, or for the
actions of other members, if any, of said Administrator.
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ARTICLE VII
FACILITY OF PAYMENT AND LAPSE OF BENEFITS
7.1 PROVISIONS FOR INCAPACITY
If the Administrator deems any person entitled to receive any payment
under the provisions of this Plan incapable of receiving or disbursing the
same by reason of minority, illness or infirmity, mental incompetency, or
incapacity of any kind, the Administrator may, in its sole discretion, take
any one or more of the following actions:
(1) it may apply such payment directly for the comfort, support and
maintenance of such person;
(2) it may reimburse any person for any such support theretofore
supplied to the person entitled to receive any such payment;
(3) or it may pay such payment to any other person selected by the
Administrator to disburse such payment for the comfort, support and
maintenance of the person entitled thereto, including, without
limitation, to any relative who has undertaken, wholly or partially,
the expense of such person's comfort, care and maintenance, or any
institution in whose care or custody the person entitled to the
payment may be. The Administrator may, in its sole discretion, deposit
any payment due to a minor to the minor's credit in any savings or
commercial bank of the Administrator's choice.
7.2 PAYMENTS OF DEPOSITS
Payments or deposits made pursuant to any provisions of this Article
shall be a complete discharge, to the extent thereof, of all liability
under the provisions of this Plan, or otherwise, of the Administrator, the
Company and this Supplementary Executive Retirement Plan, and the receipt
by the person or persons receiving any such payment, distribution or
deposit shall be a complete acquittance therefore, and there shall be no
liability to see to the application of any payments, distributions or
deposits so made.
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ARTICLE VIII
MISCELLANEOUS
8.1 UNFUNDED BENEFIT PLAN
(a) Benefits under Articles II and IV of this Supplementary Executive
Retirement Plan are intended to constitute a plan which is unfunded and
maintained primarily for the purpose of providing deferred compensation in
the form of additional retirement benefits to a select group of management
or highly compensated employees as defined in (S)201(a)(2), (S)301(a)(3)
and (S)401(a)(1) of ERISA.
(b) Benefits under Article III of this Plan are intended to constitute an
unfunded "Excess Benefit Plan" within the meaning of (S)3(36) of ERISA.
8.2 GRANTOR TRUST
Although the Company is responsible for the payment of all benefits
under the Plan, the Company may, in its discretion, contribute funds to a
grantor trust for the purpose, as it deems appropriate, of paying benefits
under this Plan. Such trust may be irrevocable, but assets of trust shall
be subject to the claims of creditors of Vastar Resources, Inc. or its
successors to the extent provided in the terms governing such trust. Upon
the earlier to occur of a Change of Control or an Anticipatory Change of
Control, the Company shall be required to make certain contributions to a
grantor trust pursuant to the terms of that certain trust agreement between
the Company or its successors and Wachovia Bank, N.A., as trustee, dated as
of March 10, 1999, or any successor trust agreement including any
amendments or supplements thereto or if such trust agreement has not been
executed such grantor trust of the Company designated by the Senior Vice
President and Chief Financial Officer and the General Counsel of the
Company. To the extent any benefits provided under the Plan are actually
paid from the trust, the Company shall have no further obligation with
respect thereto but to the extent not so paid, such benefits shall remain
the obligation of, and shall be paid by, the Company. The Participants
shall have the status of unsecured creditors insofar as their legal claim
for benefits under the Plan and the Participants shall have no security
interest in any assets of the grantor trust.
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8.3 PAYMENTS AND BENEFITS NOT ASSIGNABLE
Payments to and benefits under this Plan are not assignable,
transferable or subject to alienation since they are primarily for the
support and maintenance of the Participants and their joint annuitants or
Beneficiaries after retirement. Similarly, subject to Section 8.2, such
payments shall not be subject to attachments by creditors of, or through
legal process against, the Company, the Administrator or any Participant.
8.4 NO RIGHT OF EMPLOYMENT
The provisions of this Plan shall not give a Participant the right to
be retained in the service of the Company nor shall this Plan or any action
taken under the Plan be construed as a contract of employment.
8.5 ADJUSTMENTS
At the request of the Company, the Administrator may, with respect to
a Participant, adjust such Participant's benefit under this Plan or make
such other adjustments with respect to such Participant as are required to
correct administrative errors or provide uniform treatment of Participants
in a manner consistent with the intent and purpose of this Plan.
8.6 OBLIGATION TO COMPANY
If a Participant becomes entitled to a distribution of benefits under
the Plan, and if at such time the Participant has outstanding any debt,
obligation, or other liability representing an amount owing to the Company,
or any benefit plan maintained by the Company, then, prior to the earlier
to occur of a Change of Control or an Anticipatory Change of Control, the
Company may offset such amount owed to it or such benefit plan against the
amount of benefits otherwise distributable. Such determination shall be
made by the Administrator.
8.7 PROTECTIVE PROVISIONS
(a) Each Participant shall reasonably cooperate with the Administrator by
furnishing information and taking such other actions as may be requested by
the Company in order to facilitate the payment of benefits hereunder.
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(b) The Administrator may withhold payment under the Plan until a
Participant provides reasonable cooperation with information or other
requests of the Administrator. Prior to the earlier to occur of an
Anticipatory Change of Control or a Change of Control, in the Company's
sole discretion, benefits may be payable in an amount reduced to compensate
the Company for any loss, cost, damage or expense suffered or incurred by
the Company as a result in any way of any action, misstatement or
nondisclosure by the Participant.
8.8 GENDER, SINGULAR AND PLURAL
All pronouns and any variations thereof shall be deemed to refer to
the masculine, feminine, or neuter, as the identity of the person or
persons may require. As the context may require, the singular may be read
as the plural and the plural as the singular.
8.9 LAW GOVERNING
This Plan shall be construed, regulated and administered under the
laws of the State of Delaware.
8.10 VALIDITY
In the event any provision of this Plan is held invalid, void, or
unenforceable, the same shall not affect, in any respect whatsoever, the
validity of any other provision of this Plan.
8.11 NOTICE
Any notice or filing required or permitted to be given to the
Administrator under the Plan shall be sufficient if in writing and hand
delivered, or sent by registered or certified mail, to the principal office
of the Administrator, directed to the attention of the Manager, Vastar
Benefit Plans Compliance. Such notice shall be deemed given as of the date
of delivery or, if delivery is made by mail, as of the date shown on the
postmark on the receipt for registration or certification.
8.12 SUCCESSORS AND ASSIGNS
This Plan shall be binding upon the Company and its successors and
assigns.
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8.13 TAX WITHHOLDING
The Company shall have the right to withhold from Salary (or otherwise
to cause the Participant or the executor or administrator of his or her
estate, or his or her Beneficiary to make payment to the Company of) any
federal, state, local or foreign taxes required to be withheld with
respect to any payments made pursuant to this Plan. The Administrator
shall withhold from Plan distributions such amount as shall be necessary
to satisfy applicable federal, state and local tax withholding
requirements with respect to such distributions.
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ARTICLE IX.
AMENDMENT AND TERMINATION
Section 9.1 AMENDMENT OF PLAN
Prior to the earlier to occur of an Anticipatory Change of Control or
a Change of Control, and subject to Section 9.3 hereof, this Plan may be amended
from time to time by the Board of Directors of Vastar or its designee.
Notwithstanding the above, after the earlier to occur of an Anticipatory Change
Termination (as defined in Section 1.3(b)) or the expiration of the Transition
Window, this Plan may again be amended, subject to Section 9.3, from time to
time by the Board of Directors of Vastar or its designee.
Section 9.2 TERMINATION
Vastar intends to continue this Plan indefinitely, but reserves the
right, subject to section 9.3, to terminate it at any time prior to an
Anticipatory Change of Control or a Change of Control by action of its Board of
Directors or its designee. Notwithstanding the above, after the earlier to occur
of an Anticipatory Change Termination (as defined in Section 1.3(b)) or the
expiration of the Transition Window, this Plan may again be amended, subject to
Section 9.3, from time to time by the Board of Directors of Vastar or its
designee.
Section 9.3 EFFECT OF AMENDMENT OR TERMINATION
No amendment or termination of this Plan may adversely affect the
benefit payable or rights afforded to any Participant as of the effective date
of the amendment or termination, or any Beneficiary who, as of such date, was
then eligible to receive a benefit under this Plan.
Section 9.4 SPECIAL AMENDMENTS APPROVED BY PARTICIPANTS
Notwithstanding anything to the contrary in this Article IX, after the
earlier to occur of an Anticipatory Change of Control or a Change of Control,
this Plan may be amended, subject to Section 9.3, by a vote of 80% or more of
the votes cast by the Participants with regard to such amendment. Each
Participant shall be entitled to a number of votes equal to the number of
dollars credited to his or her Account as of the last day of the month
immediately preceding the vote. In the event any material amendment is approved
as provided above, the Participants who vote against the amendment shall be
given an option to receive a lump sum distribution of their Account as soon as
practicable after the effective date of the amendment.
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Executed as of the 24th 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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