Exhibit 10.14
PREMCOR PENSION PLAN
Effective as of January 1, 2002
TABLE OF CONTENTS
SECTION 1 - DEFINITIONS...................................... 1
A. Annuity Starting Date................................ 1
B. Automatic Survivor Benefit........................... 1
C. Break in Service..................................... 1
D. Code................................................. 1
E. Company.............................................. 1
F. Compensation......................................... 1
G. Controlled Group..................................... 1
H. Days of Service...................................... 2
I. Disability Retirement Date........................... 2
J. Employee............................................. 2
K. Employer............................................. 2
L. Five Percent Owner................................... 2
M. Hours of Service..................................... 2
N. Normal Retirement Date............................... 2
O. Participant.......................................... 2
P. Pension Account...................................... 3
Q. Plan................................................. 3
R. Plan Administrator................................... 3
S. Plan Year............................................ 3
T. Qualified Plan....................................... 3
U. Required Beginning Date.............................. 3
V. Service Period....................................... 3
W. Severance Date....................................... 3
X. Severance Period..................................... 3
Y. Social Security Wage Base............................ 3
Z. Trustee.............................................. 3
SECTION 2 - ELIGIBILITY...................................... 4
A. New Participants..................................... 4
B. Former Participants.................................. 4
SECTION 3 - RETIREMENT DATES................................. 6
A. Normal Retirement Date............................... 6
B. Required Beginning Date.............................. 6
SECTION 4 - SERVICE.......................................... 7
A. Vesting Service..................................... 7
B. Military Leave of Absence............................ 7
C. Break In Service..................................... 7
D. Maternity or Paternity Absence....................... 7
E. Family and Medical Leave Act......................... 8
i
SECTION 5 - PENSION ACCOUNT ................................................ 9
A. Pension Account .................................................... 9
B. Annual Contribution Credit ......................................... 9
C. Interest Credits ................................................... 9
D. Disposition of Pension Account ..................................... 9
E. Forfeiture of Pension Account ...................................... 10
F. Pension Account Upon Reemployment .................................. 10
G. Benefit Calculations and Conversions ............................... 11
H. Accrued Benefit .................................................... 11
SECTION 6 - RETIREMENT AND DISABILITY BENEFITS ............................. 12
A. Normal Retirement Benefit .......................................... 12
B. In-Service Benefit ................................................. 12
C. Disability Benefit ................................................. 12
SECTION 7 - PRE-RETIREMENT DEATH BENEFIT ................................... 13
A. In General ......................................................... 13
B. Beneficiary Designation ............................................ 13
SECTION 8 - VESTING ........................................................ 14
A. Benefits on Termination of Employment .............................. 14
B. Duplicating Payments ............................................... 14
C. Timing and Manner of Payments ...................................... 14
D. Termination Prior to Vesting ....................................... 14
SECTION 9 - TIMING AND OPTIONAL FORMS OF BENEFITS .......................... 15
A. Timing of Distributions ............................................ 15
B. Type of Option ..................................................... 16
C. Effective Date of the Option ....................................... 17
D. Change or Revocation ............................................... 17
E. Spousal Consent to Optional Form of Benefit and Designation of
Beneficiary....................................................... 17
F. Distribution Notice ................................................ 18
G. Death Before Commencement of Benefits .............................. 19
SECTION 10 - TRANSFERS ..................................................... 20
A. Termination of Employment .......................................... 20
B. Service ............................................................ 20
C. Compensation ....................................................... 20
SECTION 11 - FUNDING ....................................................... 21
A. Trustee ............................................................ 21
B . Funding of Liabilities ............................................ 21
C. Return of Employer Contributions ................................... 21
D. Employee Contributions ............................................. 21
SECTION 12 - AMENDMENT OR TERMINATION OF PLAN .............................. 22
SECTION 13 - DISTRIBUTION UPON TERMINATION OF PLAN ............................ 23
A. Termination or Partial Termination .................................... 23
B. Residual Assets ....................................................... 23
SECTION 14 - ALLOCATION OF FIDUCIARY RESPONSIBILITIES ......................... 24
A. Board of Directors .................................................... 24
B. Liability for Breach by Co-Fiduciary .................................. 24
C. Insurance of Plan Fiduciaries ......................................... 24
SECTION 15 - CLAIMS PROCEDURE ................................................. 25
A. Claim ................................................................. 25
B. Claim Decision ........................................................ 25
C. Request for Review .................................................... 25
D. Review of Decision .................................................... 26
SECTION 16 - MISCELLANEOUS .................................................... 28
A. Participants' Rights .................................................. 28
B. Spendthrift ........................................................... 28
C. Incapacity ............................................................ 28
D. Small Benefit ......................................................... 28
E. Merger ................................................................ 29
F. Maximum Benefits ...................................................... 29
G. Administration of Plan ................................................ 29
H. Commencement of Benefits .............................................. 29
I. Suspension of Benefits Upon Reemployment .............................. 30
J. Trust Sole Source of Benefits ......................................... 30
K. Actuarial Assumptions ................................................. 30
L. Qualified Domestic Relations Order .................................... 31
M. Leased Employees ...................................................... 33
N. Written Explanation of Rollover Treatment ............................. 33
O. Special Distribution Option ........................................... 33
P. Limitation on Benefits for Certain Participants ....................... 34
Q. Plan Expenses ......................................................... 35
R. Acquisition of New Entities. .......................................... 35
S. Construction of Plan .................................................. 35
SECTION 17 - TOP-HEAVY DEFINITIONS ............................................ 36
A. Accrued Benefits ...................................................... 36
B. Beneficiaries ......................................................... 36
C. Determination Date .................................................... 36
D. Former Key Employee ................................................... 36
E. Key Employee .......................................................... 36
F. Non-Key Employee ...................................................... 36
G. Permissive Aggregation Group .......................................... 36
H. Required Aggregation Group ............................................ 37
I. Top-Heavy Average Compensation ........................................ 37
J. Top-Heavy Compensation ................................................ 37
K. Top-Heavy Group ....................................................... 37
SECTION 18 - TOP HEAVY RULES .................................................. 38
A. Vesting ............................................................... 38
B. Minimum Normal Retirement Benefit ..................................... 38
C. Minimum In-Service Benefit ............................................ 38
SECTION 19 - ADMINISTRATION ................................................... 39
A. Appointment of Committee .............................................. 39
B. Construction .......................................................... 39
C. Decisions and Delegation .............................................. 39
D. Duties of the Benefits Committee ...................................... 39
E. Records of the Benefits Committee ..................................... 40
PREMCOR PENSION PLAN
SECTION 1
DEFINITIONS
A. "Annuity Starting Date" means the first day of the month for which
an amount is first paid as an annuity or any other form. A Participant's Annuity
Starting Date must not be more than 90 days after the date the Participant
receives the information described in Section 9F.
B. "Automatic Survivor Benefit" in the case of a married Participant,
means a joint and survivor annuity payable to the Participant and his or her
spouse with the amount of the annuity of the surviving spouse to be fifty
percent (50%) of the amount of the annuity paid to the Participant, and, in the
case of a non-married Participant, means an annuity payable to the Participant
for the Participant's life. Determination of marital status and who is the
Participant's spouse shall be determined at the Annuity Starting Date.
C. "Break in Service" means any 12-consecutive month Severance Period.
D. "Code" means the Internal Revenue Code of 1986, as amended.
E. "Company" means Premcor Inc.
F. "Compensation" means the gross amount received during the Plan Year
by a Participant for services rendered with respect to the Employer, including
salary, commissions, wages, overtime pay, bonuses paid under an annual incentive
plan maintained by the Employer and amounts contributed through a salary
reduction arrangement to a Qualified Plan which meets the requirements of
Section 401(k) of the Code, to a cafeteria plan which meets the requirements of
Section 125 of the Code, or, effective January 1, 2001, elective amounts not
included in the gross income of the Employee by reason of Code Section
132(f)(4), but shall not include bonuses (other than those paid under an annual
incentive plan maintained by the Employer), incentive pay, reimbursements or
other expense allowances, payments for cashed-in vacation days, payments on
termination of employment for accrued and unused vacation days, fringe benefits,
moving expenses, deferred compensation, welfare benefits, earnings with respect
to equity-based compensation or benefits or contributions under any Qualified
Plan.
Compensation in a calendar year in excess of the amount specified in
Code Section 401(a)(17) (as indexed pursuant to Code Section 415(d)) shall be
disregarded for all purposes of the Plan.
G. "Controlled Group" means the Company and all other entities
required to be aggregated with the Company under Sections 414(b), (c), (m), or
(o) of the Code.
1
H. "Days of Service" means the total number of days in a person's
Service Periods, whether or not such periods were completed consecutively. Days
of Service shall also include the number of days in all Severance Periods, if
any, in which:
(a) The Employee severs from service by reason of quit, discharge or
retirement and immediately prior to such quit, discharge or retirement was
not absent from service if the Employee performs an Hour of Employment
within twelve months of the date of such severance; or
(b) Notwithstanding (a) above, the Employee severs from service by
reason of quit, discharge or retirement during an absence from service of
twelve months or less for any reason other than a quit, discharge,
retirement or death if the Employee performs an Hour of Employment within
twelve months of the date on which the Employee was first absent from
service.
I. "Disability Retirement Date" means the date on which a Participant
is entitled to a Disability Benefit under Section 6C.
J. "Employee" means a person who is classified by the Employer as
either (i) a regular, salaried employee or (ii) a regular, hourly-paid employee
who is not a member of a collective bargaining unit, and excluding any person
who is a member of a collective bargaining unit for which either a separate
retirement plan has been established pursuant to collective bargaining
negotiations or no separate retirement plan has been established after
collective bargaining which has included discussion of retirement benefits,
unless such collective bargaining provides for coverage under this Plan.
K. "Employer" means the Company and any other member of the Controlled
Group which has, with the consent of the Company, adopted the Plan.
L. "Five Percent Owner" means any person who owns (or is considered as
owning within the meaning of Section 318 of the Code) more than five percent of
the outstanding stock of any corporation in the Controlled Group or stock
possessing more than five percent of the total combined voting power of all
stock of any corporation in the Controlled Group or who owns more than five
percent of the capital or profits interest of any unincorporated entity in the
Controlled Group.
M. "Hour of Employment" means an hour for which a person is directly
or indirectly paid, or entitled to payment, by the Employer for the performance
of duties.
N. "Normal Retirement Date" means such term as defined in Section 3A.
O. "Participant" means an Employee who has satisfied the eligibility
requirements of Section 2 and who has not become a former Participant under
Section 2B.
P. "Pension Account" means the notional account maintained on behalf
of a Participant and referred to in Section 5.
Q. "Plan" means the Premcor Pension Plan.
R. "Plan Administrator" means the Company.
S. "Plan Year" means the twelve-month period commencing on each
January 1 and ending on the following December 31.
T. "Qualified Plan" means any Plan qualified under Section 401 of the
Code.
U. "Required Beginning Date" means such term as defined in Section 3B.
V. "Service Period" means the period of time commencing on the date on
which a person performs an Hour of Employment with the Employer and ending on
the person's Severance Date.
W. "Severance Date" means the date on which the earliest of the
following occurs:
(a) A person employed by the Employer quits, retires, is discharged or
dies, or
(b) The first anniversary of the first date of a period in which the
person is not credited with Days of Service and remains absent from
service with the Employer (with or without pay) for any reason other than
quit, retirement, discharge or death.
X. "Severance Period" means the period of time commencing the day
after a person's Severance Date and ending on the day before the person performs
an Hour of Employment.
Y. "Social Security Wage Base" means for a Plan Year the maximum
annual wage base upon which Old-Age, Survivors, and Disability Insurance taxes
are based during such Plan Year.
Z. "Trustee" means the trustee or any successor trustee appointed
pursuant to Section 11A.
SECTION 2
ELIGIBILITY
A. New Participants.
An Employee shall become a Participant hereunder as of the later of:
1. the first day such an Employee commences employment with the
Employer; or
2. January 1, 2002.
An Employee who is on a leave of absence or who is not an active
Employee at the time he or she satisfies the eligibility requirements set forth
above shall become a Participant hereunder only upon returning to active
employment. If a person is not an Employee when he or she meets the foregoing
requirements, he or she shall not become a Participant until he or she becomes
an Employee.
B. Former Participants.
A person shall cease to be a Participant and shall become a former
Participant when:
1. he or she is no longer an Employee, and
2. one of the following is applicable:
(a) he or she has no vested benefit under the Plan;
(b) he or she has received from the Plan a lump-sum
distribution or a series of distributions of cash or other property
which represents the balance of his or her credit under the Plan; or
(c) the entire benefit rights of the person:
(i) are fully guaranteed by an insurance company,
insurance service or insurance organization licensed to do
business in a State, and are legally enforceable by the sole
choice of the individual against the insurance company, insurance
service or insurance organization; and
(ii) a contract, policy or certificate describing the
benefits to which the person is entitled under the Plan has been
issued to the person.
A former Participant who is reemployed by the Employer shall become a
Participant hereunder on the date he or she is reemployed as an Employee.
SECTION 3
RETIREMENT DATES
A. Normal Retirement Date.
A Participant's Normal Retirement Date shall be the first day of the
month coinciding with or next following the date he or she attains age 65.
B. Required Beginning Date.
The Required Beginning Date of a Participant shall be (i) in the case
of a Participant who is not a Five Percent Owner with respect to the Plan Year
ending in the calendar year in which the Participant attains age 70 1/2, the
April 1 following the calendar year in which occurs the later of the date the
Participant attains age 70 1/2 and the date on which the Participant terminates
employment; or (ii) in the case of a Participant who is a Five Percent Owner
with respect to the Plan Year ending in the calendar year in which the
Participant attains age 70 1/2, the April 1 following the calendar year in which
the Participant attains age 70 1/2.
SECTION 4
SERVICE
A. Vesting Service.
An Employee shall accrue one Year of Vesting Service for each 365 Days
of Service (whether or not consecutive); provided that, with respect to Days of
Service earned prior to January 1, 2002, Days of Service relating to a period
not in the Participant's most recent continuous period of employment shall be
disregarded.
B. Military Leave of Absence.
So long as the Uniformed Services Employment and Reemployment Rights
Act of 1994 or any similar law shall remain in force, providing for reemployment
rights for all persons in military service, as therein defined, a Participant
who leaves the employment of the Employer for military service of the United
States, as defined in such Act from time to time in force, shall, for the
purposes of this Plan, be considered as having been in the employment of the
Employer, with the time of his or her service in the military service of the
United States credited to his or her Service, and as having continued to earn
Compensation during his or her military service at the rate he or she would have
received but for his or her period of military service (or, if such rate cannot
be reasonably determined, his or her average rate of Compensation during the
twelve months (or shorter period if applicable) immediately preceding the period
of his or her military service); provided that, upon being discharged from the
military service of the United States, the Participant applies for reemployment
with the Employer and takes all other necessary action to be entitled to, and is
otherwise eligible for, reemployment rights, as provided by said Uniformed
Services Employment and Reemployment Rights Act of 1994, or any similar law from
time to time in force.
C. Break In Service.
If a person's employment with the Employer is terminated when he or
she has no nonforfeitable right to a benefit under the Plan and the number of
years of his or her Severance Period equals or exceeds five (5), the Service
Period prior to the termination of employment will be disregarded.
D. Maternity or Paternity Absence.
In the case of any individual who is absent from work
(a) by reason of the pregnancy of the individual,
(b) by reason of the birth of a child of the individual,
(c) by reason of the placement of a child with the individual in
connection with the adoption of such child by such individual, or
(d) for purposes of caring for such child for a period beginning
immediately following such birth or placement,
the individual shall be credited with Days of Service following the date such
absence begins until the second anniversary of such date solely for purposes of
determining whether a Break in Service has occurred. In order to receive credit
under this Section, an individual must furnish to the Employer information
establishing (i) that the absence from work is for one of the reasons described
in this Section and (ii) the number of days for which the Employee was absent.
E. Family and Medical Leave Act.
Solely for purposes of determining whether a Break In Service has
occurred, an Employee shall be credited with the number of Days of Service
during a leave of absence taken pursuant to the Family and Medical Leave Act of
1993.
SECTION 5
PENSION ACCOUNT
A. Pension Account.
A notional account (hereinafter referred to as the "Pension Account")
shall be established and maintained for each Participant. A Participant's
Pension Account shall be credited with Annual Contribution Credits and Interest
Credits.
B. Annual Contribution Credit.
For each Plan Year, an Annual Contribution Credit shall be added to
the Pension Account of each Participant who is employed by the Employer as an
Employee during such Plan Year. In the case of a Participant who is employed by
the Employer on the last day of the Plan Year, the Annual Contribution Credit
shall be credited to the Participant's Pension Account as of the last day of
such Plan Year. In the case of a Participant who terminates employment during
the Plan Year, the Annual Contribution Credit shall be credited to his or her
Pension Account as of the earlier of the Participant's Annuity Starting Date or
the last day of such Plan Year. The amount of the Annual Contribution Credit for
such Plan Year for a Participant shall be equal to seven percent (7%) of his or
her Compensation plus seven percent (7%) of such Participant's Compensation, if
any, in excess of the Social Security Wage Base.
C. Interest Credits.
Each Pension Account shall be credited with interest (as an Interest
Credit) at the end of each month based on the amount of the Pension Account as
of the last day of the prior month. A Participant's Pension Account shall
continue to be credited with interest until the Participant's Annuity Starting
Date or, if he or she terminates employment prior to becoming vested in his or
her Pension Account, the date he or she terminates employment. In the event a
Participant begins receiving benefits at his or her Annuity Starting Date, his
or her Pension Account shall be credited with interest through the last day of
the month preceding his or her Annuity Starting Date. The effective annual rate
of interest used to determine the Interest Credit for a Plan Year shall equal
the sum of (a) the average yield for the month of October of the immediately
preceding Plan Year (as reported in the Federal Reserve Bulletin) on one-year
Treasury Constant Maturities, plus (b) one-percent (1%); provided that, the
minimum effective annual rate of interest shall be four percent (4%) and the
maximum effective annual rate of interest shall be the applicable interest rate
specified in Code Section 417(e)(3)(A)(ii)(II) in effect for the month of
October of the immediately preceding Plan Year.
D. Disposition of Pension Account.
Upon conversion of a Participant's Pension Account to a pension or
lump sum equivalent, or upon commencement of payment of a Participant's Pension
Account to any
beneficiary, such Pension Account shall cease to exist. However, a Participant
may have a new Pension Account established after an Annuity Starting Date as
provided in Section 5F.
E. Forfeiture of Pension Account.
A Participant who terminates employment with no vested benefit under
the Plan shall forfeit his or her Pension Account upon employment termination.
If such a Participant returns to employment with the Employer before incurring
five consecutive Breaks in Service, his or her Pension Account with interest
shall be restored if he or she completes six months of Service following his or
her reemployment.
F. Pension Account Upon Reemployment
If a terminated Participant is reemployed by the Employer or any
member of the Controlled Group, the following shall be applicable:
1. If he or she had previously received a lump sum equivalent:
(a) his or her prior Years of Vesting Service and Years of
Contribution Service shall be restored;
(b) his or her prior Pension Account, if applicable, and
accrued benefit shall not be restored; and
(c) at such time as he or she becomes an Employee, a new
Pension Account shall be established and credited with Annual
Contribution Credits as provided in Section 5B and Interest Credits as
provided in Section 5C.
2. If he or she is receiving a pension which is not suspended
under Section 16I, the pension currently in pay status shall continue
to be paid and shall not be reconverted to a Pension Account.
3. If payment of his or her pension ceases pursuant to Section
16I, or if his or her benefits had not yet commenced, then his or her
pension shall be converted back into a Pension Account. His or her
Pension Account upon reemployment shall be determined based on his or
her Pension Account at his or her prior Annuity Starting Date,
credited with Interest Credits and debited with monthly pension
payments through his or her date of reemployment. This Pension Account
so determined shall be reestablished for a Participant as of his or
her date of reemployment. Such Account shall be credited with Annual
Contribution Credits as provided in Section 5B and Interest Credits as
provided in Section 5C, based on Years of Contribution Service accrued
both prior to his or her termination of employment and after his or
her reemployment.
G. Benefit Calculations and Conversions.
Whenever a Participant (or beneficiary) receives benefits in the form
of a lump sum, the lump sum amount shall equal the amount in the Participant's
Pension Account. Whenever a Participant receives benefits in the form of an
annuity, the payment amount shall be determined by dividing the Participant's
Pension Account by the immediate annuity factor for the form of annuity elected.
Such annuity factor shall be based upon the actuarial assumptions set forth in
Section 16K.
H. Accrued Benefit.
A Participant's accrued benefit shall be a monthly benefit for life
commencing at age 65 determined in two steps. First, the Participant's Pension
Account as of the determination date shall be projected to age 65 using an
effective annual rate of interest equal to the rate set forth in Section 5C for
the Plan Year in which the accrued benefit is calculated. The Participant's
monthly accrued benefit for life at age 65 shall be determined by dividing the
lump sum amount obtained by this calculation by the age 65 annuity factor
obtained using the applicable mortality table specified in Code Section
417(e)(3)(A)(ii)(I) in effect on the date the calculation is made and the
applicable interest rate specified in Code Section 417(e)(3)(A)(ii)(II) in
effect for the third calendar month preceding the first day of the Plan Year in
which the calculation is performed.
SECTION 6
RETIREMENT AND DISABILITY BENEFITS
A. Normal Retirement Benefit.
A Participant who retires at his or her Normal Retirement Date shall
receive his or her Pension Account at the time and in the manner specified in
Section 9.
B. In-Service Benefit.
A Participant who remains employed by the Employer after his or her
Required Beginning Date shall receive his or her Pension Account as an
in-service benefit on his or her Required Beginning Date in the manner specified
in Section 9. Any additional Annual Contribution Credits added to the
Participant's Pension Account after his or her Annuity Starting Date shall
immediately be paid (or commence to be paid) in the same form as the Participant
elected as of his or her Required Beginning Date.
C. Disability Benefit.
A Participant who is disabled shall be considered to have terminated
employment for purposes of this Plan as of the date of his or her disability and
may elect to receive the full amount in his or her Pension Account beginning on
the first day of the month following the month in which the Participant elects
following such disability. For purposes of this Section 6C, a Participant shall
be considered disabled on the date he or she is eligible to receive benefits
under the long-term disability plan maintained by the Employer in which he or
she is a participant.
SECTION 7
PRE-RETIREMENT DEATH BENEFIT
A. In General.
A Participant's Pension Account shall become vested, to the extent not
already vested, upon his or her death if he or she is an Employee at the time of
his or her death. If a Participant dies prior to his or her Annuity Starting
Date and has properly designated a non-spouse beneficiary or beneficiaries under
Section 7B, the Participant's vested Pension Account shall be paid to such
beneficiary or beneficiaries in an immediate lump sum. If a Participant dies
prior to his or her Annuity Starting Date leaving his or her spouse as
beneficiary, the spouse shall receive an annuity for life (based on the spouse's
age) which shall be the actuarial equivalent of the Participant's vested Pension
Account. Such life annuity shall commence as soon as practicable after the
Participant's death or, at the spouse's election, on the first day of any month
up to and including the month in which the Participant would have reached age
65. The spouse may elect to receive the benefit described in this Section in the
form of a lump sum in lieu of a life annuity.
B. Beneficiary Designation.
The Participant shall be entitled to designate a beneficiary to
receive the death benefit described in this Section. A designation of a
beneficiary other than the Participant's spouse shall be effective only if (i)
the Participant's spouse consents to, and acknowledges the effect of, such
designation in writing which consent has been notarized or witnessed by a Plan
representative or (ii) the Participant establishes to the satisfaction of the
Plan Administrator that the consent may not be obtained because there is no
spouse, because the spouse cannot be located or because of such other
circumstances as are consistent with the regulations issued by the Secretary of
the Treasury. A beneficiary designation may be changed at any time, provided
that a beneficiary designation to which the spouse has consented may not be
changed without the spouse's consent. Any consent by a spouse (or establishment
that the consent of a spouse may not be obtained) shall be effective only with
respect to that spouse. The Participant may designate more than one beneficiary
and may designate one or more contingent beneficiaries with respect to a primary
beneficiary, each of whom shall be a beneficiary if the primary beneficiary
fails to survive the Participant. In the event the Participant has either failed
to designate a beneficiary or no designated beneficiary survives him or her, the
amounts otherwise payable to a beneficiary under the provisions of this Section
shall be paid to the Participant's surviving spouse or, if the Participant does
not have a surviving spouse, to the Participant's estate.
SECTION 8
VESTING
A. Benefits on Termination of Employment.
1. A Participant whose employment is terminated prior to his
or her Normal Retirement Date shall be entitled to the vested portion
of his or her benefit at his or her Normal Retirement Date. A
Participant's vested percentage of such benefit shall be determined in
accordance with the following:
Years of Vesting Service Vested Percentage
------------------------ -----------------
Less than 5 0%
5 or more 100%
2. A vested Participant may elect at any time after
employment termination to begin receiving his or her benefits.
3. Notwithstanding any provision herein to the contrary, a
Participant's Pension Account shall be 100% vested and non-forfeitable
upon such Participant's attainment of age 65 or his or her Disability
Retirement Date. In addition, the Pension Account of a Participant
whose employment with the Employer is involuntarily terminated between
March 15, 2002 and March 15, 2003 (a) as part of the cost-reduction
initiated reduction in force at the general offices of the Employer or
(b) as part of the shutdown of the Hartford facility of the Employer,
shall be 100% vested and non-forfeitable upon such termination of
employment.
B. Duplicating Payments.
No Participant receiving Normal Retirement Benefits, In-Service
Benefits or Disability Benefits under the provisions of Section 6 shall be
entitled to receive any additional or duplicating pension payments under this
Section.
C. Timing and Manner of Payments.
Benefits provided pursuant to this Section shall be paid at the time
and in the manner specified in Section 9.
D. Termination Prior to Vesting.
A Participant whose employment is terminated before he or she has a
vested interest in Plan benefits shall receive no benefits under this Section.
Such Participant shall be deemed to have received a lump sum distribution of his
or her entire interest under the Plan on his or her employment termination.
SECTION 9
TIMING AND OPTIONAL FORMS OF BENEFITS
A. Timing of Distributions.
1. Prior to Normal Retirement Date. If a Participant's
employment is terminated before his or her Normal Retirement Date for
any reason other than his or her death, the Participant may request
the information described in Section 9F at any time on or after the
date 90 days before the date he or she is first eligible to begin
receiving benefit payments under the Plan. If such a request is made,
the Employer shall promptly provide the information to the Participant
if the actuarial value of the Participant's vested accrued benefit
exceeds $5,000. In order to begin receiving benefits, the Participant
must timely make his or her benefit elections in accordance with the
rules and procedures established by the Employer. If the benefit
election is timely received, distribution of the Participant's
benefits will commence in the form elected by the Participant (a) as
of the first day of the month following the date the information
described in Section 9F is made available to the Participant if a
proper benefit election is made by the Participant in accordance with
the rules and procedures established by the Employer either on or
before the expiration of the seven day period beginning the day after
the date the information described in Section 9F is made available to
the Participant or (b) as of the first day of the month after the
Employer receives a proper benefit election if such election is made
after the time described in (a) above. Such first day of the month
shall be his or her Annuity Starting Date. Regardless of the
Participant's Annuity Starting Date, in no event shall any payments be
made before seven days have elapsed since the date the Participant
receives the information described in Section 9F. If a Participant
fails to properly and timely make a benefit election in accordance
with the rules and procedures established by the Employer, he or she
must again request and receive the information described in Section 9F
in order to make a valid benefit election. If the Participant fails to
properly and timely make a benefit election before his or her Required
Beginning Date, distribution of his or her benefits will commence on
his or her Required Beginning Date in the form of an Automatic
Survivor Benefit, and his or her Required Beginning Date shall
constitute his or her Annuity Starting Date.
2. Termination at Normal Retirement Date. If a Participant
retires at his or her Normal Retirement Date, and if the actuarial
value of the Participant's vested accrued benefit exceeds $5,000, the
Employer shall promptly provide the Participant with the information
described in Section 9F. In order to elect the manner in which his or
her benefits will be paid, the Participant must properly make a
benefit election in accordance with the rules and procedures
established by the Employer. If the benefit election is timely made,
distribution of the Participant's benefits will commence in the form
elected by the Participant (a) as of the first day of the month
following the date the information described in Section 9F is made
available to the Participant if a proper benefit election is made
either on or before the expiration of the seven day period beginning
the day after the date the information described in Section 9F is made
available or (b) as of the first
day of the month after the Employer receives a proper benefit election
if such election is made after the time described in (a) above. Such
first day of the month shall be his or her Annuity Starting Date.
Regardless of the Participant's Annuity Starting Date, in no event
shall any payments be made before seven days have elapsed since the
date the Participant receives the information described in Section 9F.
If the Participant fails to properly and timely make a benefit
election in accordance with the rules and procedures established by
the Employer, distribution of his or her vested accrued benefit will
commence on his or her Required Beginning Date in the form of an
Automatic Survivor Benefit. Such date shall be his or her Annuity
Starting Date.
3. Continued Employment until Required Beginning Date. A
Participant who remains employed by the Employer until the January
immediately preceding his or her Required Beginning Date shall receive
the information described in Section 9F within 90 days before his or
her Required Beginning Date. If the Participant properly makes a
benefit election in accordance with the rules and procedures
established by the Employer before his or her Required Beginning Date,
the Participant's benefits will commence in the form elected by the
Participant as of his or her Required Beginning Date. If the
Participant fails to properly make a benefit election in accordance
with the rules and procedures established by the Employer before his
or her Required Beginning Date, distribution of his or her vested
accrued benefit will commence at his or her Required Beginning Date in
the form of an Automatic Survivor Benefit. In either event, his
Annuity Starting Date shall be his or her Required Beginning Date.
B. Type of Option.
A Participant may elect, in lieu of the normal form of benefit, in
accordance with Sections 9A, 9D, and 9E, one of the following actuarially
equivalent benefits:
1. Life Annuity. Under this option, payments will be made
for the life of the Participant and will stop upon his or her death;
provided that, in no event shall a Participant's life annuity be
greater than the Participant's accrued benefit determined under
Section 5H.
2. Joint and Survivor Option. Subject to any limitation
imposed by the definition of accrued benefit in Section 5H, under this
option, a reduced benefit will be payable until the Participant's
death and then, if his or her designated beneficiary survives him or
her, 50% of the benefit payable to the Participant will be continued
to the beneficiary until the beneficiary's death. A Participant who
has attained at least 55 years of age on his or her Annuity Starting
Date may also elect this option with 100% of the benefit payable to
him or her to continue to the beneficiary until the beneficiary's
death. The actuarial assumptions in Section 16K will be used to
determine the benefit payable under this Section 9B.2.
3. Lump Sum. A Participant may elect, in lieu of all other
accrued benefits, payment of his or her Pension Account in a single
lump sum.
4. Life Annuity and Ten Year Certain Option. A Participant
who has attained at least 55 years of age on his or her Annuity
Starting Date may elect this form of benefit. Under this option, a
reduced benefit will be payable until the Participant's death and, if
such death occurs before 120 monthly installments have been paid to
the Participant, such benefit will be continued to his or her
designated beneficiary until a total of 120 monthly installments have
been paid to the Participant and/or to his or her designated
beneficiary. If no designated beneficiary survives to receive all such
installments, the commuted value of the unpaid installments will be
paid to the estate of the last to die of the Participant and his or
her designated beneficiary.
C. Effective Date of the Option.
An option elected by a Participant shall become effective as of the
later of the Participant's Annuity Starting Date or the expiration of the seven
day period beginning the day after the date the distribution notice described in
Section 9F has been distributed. Payments under the option shall be calculated
taking into account the attained age of the Participant and, if applicable, his
or her joint annuitant, at the Annuity Starting Date as of which payments under
the option are to commence.
D. Change or Revocation.
An election made under Section 9B may not be validly changed or
revoked except as follows:
1. Any change may be made by the Participant before the
Participant's Annuity Starting Date in accordance with the procedures
described in Section 9E.
2. If the joint annuitant designated under the joint and
survivor option dies before the date the option becomes effective, the
election shall be considered void.
3. If the Participant dies before the date an option becomes
effective, the election shall be considered void.
E. Spousal Consent to Optional Form of Benefit and Designation of
Beneficiary.
The election of an optional form of benefit other than a 50% or
100% joint and survivor annuity or the designation or change of designation of
an alternate beneficiary other than the spouse by a married Participant will be
effective only if the spouse of the Participant consents to such election in
writing. Such consent must be provided:
1. after the Participant receives the information described
in Section 9F, and
2. within the 90 day period immediately before the option,
designation or change of designation becomes effective.
The spouse's consent must acknowledge the effect of such optional form of
benefit or designation of an alternate beneficiary and must be witnessed by a
notary public or Plan representative. Any such consent must be filed with the
Employer in order to be effective. No consent need be obtained in the event the
Participant has no spouse or the Participant's spouse cannot be located. In this
event, the Participant must certify on a form provided by the Employer that he
or she has no spouse or that his or her spouse cannot be located in order for
his or her election of an optional form of benefit or designation of an
alternate beneficiary to be effective.
F. Distribution Notice.
At each of the times specified in this Section 9, the Employer will
provide the Participant with the following information, in nontechnical terms:
1. the material features and the relative values of the
optional forms of benefits under the Plan,
2. in the case of a married Participant, the terms and
conditions of the Automatic Survivor Benefit and the financial effect
upon the Participant's benefit in terms of dollars per benefit
payment,
3. the Participant's right to make, and the effect of, an
election out of the normal form of benefit,
4. in the case of a married Participant, the rights of the
Participant's spouse with respect to any such election,
5. the right of the Participant to make, and the effect of,
a revocation of any such election before the commencement of benefits,
6. the right (if any) of the Participant to defer receipt of
a distribution; and
7. the right of the Participant to consider the options
described in the information for at least 30 days after the
Participant receives the information.
G. Death Before Commencement of Benefits.
If a Participant dies before his or her Annuity Starting Date, no
benefit will be payable other than the benefit described in Section 7.
SECTION 10
TRANSFERS
A. Termination of Employment.
Transfers within the Employer or between the Employer and any other
member of the Controlled Group shall not be considered as termination of
employment under the Plan. Termination of employment under the Plan shall occur
when an employee is no longer employed by the Employer or another member of the
Controlled Group.
B. Service.
In determining Years of Vesting Service under the Plan, all periods of
service by an individual with the Employer or any other member of the Controlled
Group in an ineligible status (i.e., when the person does not fall within the
definition of "Employee" in Section 1I) shall be counted.
C. Compensation.
In determining Compensation under the Plan, amounts paid to an
individual by the Employer or any other member of the Controlled Group while
such individual is in an ineligible status (i.e., when the person does not fall
within the definition of "Employee" in Section 1I) shall not be considered
Compensation under the Plan.
SECTION 11
FUNDING
A. Trustee.
The Company will select a Trustee or Trustees and/or insurance company
or companies to administer the funds.
B. Funding of Liabilities.
The Employer intends to fund its pension liabilities under this Plan
by making such contributions to the Trustee or Trustees, or by paying such
premiums under any insured contract or contracts for the purpose of providing
pensions under the Plan, which will be sufficient to satisfy the minimum funding
standards (or alternative minimum funding standard) of Part 3 of Title I of the
Employee Retirement Income Security Act of 1974.
C. Return of Employer Contributions.
All Employer contributions are made conditioned on their deductibility
for federal income tax purposes under Section 404 of the Code. Amounts
contributed by an Employer shall be returned to the Employer under the following
conditions:
1. If a contribution was made by an Employer by mistake of fact,
the excess of the amount of such contribution over the amount which would
have been contributed had there been no mistake of fact shall be returned
to the Employer within one year after the payment of the contribution;
2. If the Employer makes a contribution which is not deductible by
the Company or a member of the Controlled Group under Section 404 of the
Code, such contribution (but only to the extent disallowed) shall be
returned to the Employer within one year after the disallowance of the
deduction.
Earnings attributable to the contributions shall not be returned to
the Employer, but losses attributable to such contributions shall reduce the
amount to be returned.
D. Employee Contributions.
There shall be no contributions to the Plan made by Employees.
SECTION 12
AMENDMENT OR TERMINATION OF PLAN
The Company reserves the right at any time, and from time to time
through action of its Board of Directors or its delegate, to amend, in whole or
in part, any and all of the provisions of the Plan and to terminate the Plan.
The right is subject to the condition that no part of the assets of the Plan
shall, by reason of any amendment or termination, be used for or diverted to
purposes other than for the exclusive benefit of the Participants and
beneficiaries under the Plan, unless and until all liabilities of the Plan have
been satisfied, in which case any remaining assets shall revert to the Employer;
provided, however, that if a determination letter satisfactory to the Company
shall not be received upon the initial submission to the Internal Revenue
Service that the Plan as herein set forth or as amended meets the requirements
of Code Sections 401(a) and 501(a), the Company may, at its option, amend the
Plan in any manner which will result in a satisfactory determination letter
being issued by the Internal Revenue Service or the Company may withdraw all
contributions theretofore made by it and the Plan shall then terminate with the
same effect as if it had never been adopted.
SECTION 13
DISTRIBUTION UPON TERMINATION OF PLAN
A. Termination or Partial Termination.
Upon termination or partial termination of the Plan by an Employer,
each Participant's accrued benefit, to the extent funded, shall be
nonforfeitable, and the funds held by the Trustee or Trustees and/or insurance
company or companies for that Employer (or in the case of partial termination
for that particular group of Participants) shall be applied to provide pensions
for its Employees, joint annuitants and beneficiaries in the order of priority
required by the Employee Retirement Income Security Act of 1974, as amended.
B. Residual Assets.
Any residual assets of the Plan shall be distributed to the Employer
if:
1. all liabilities of the Plan to Participants and their
beneficiaries have been satisfied, and
2. the distribution does not contravene any provision of law.
SECTION 14
ALLOCATION OF FIDUCIARY RESPONSIBILITIES
A. Board of Directors.
The Board of Directors of the Company, acting through the
Company's Retirement Committee, shall be responsible for the selection and
retention of all Trustees and investment managers and the Plan Administrator
appointed in accordance with the terms of the Plan. In carrying out its
responsibility, the Board or the Retirement Committee shall, periodically, but
not less often than annually, review the investment performance of the Trustees
and investment managers with respect to the Plan and the administrative
performance of the Plan Administrator. The Board of Directors shall have no
other responsibilities with respect to the Plan except under the circumstances
set forth in B below.
B. Liability for Breach by Co-Fiduciary.
A member of the Board of Directors shall be liable for the breach
of fiduciary responsibility of another fiduciary (as that term is defined in
Section 3(21)(A) of the Employee Retirement Income Security Act of 1974, as
amended) with respect to the Plan under the following circumstances:
1. When he or she knowingly participates in or knowingly
undertakes to conceal an act or omission of any other fiduciary under
the Plan, knowing such act or omission is a breach of fiduciary
responsibility;
2. When, by his or her failure to comply with Section
404(a)(1) of the Employee Retirement Income Security Act of 1974, as
amended, in the administration of his or her specific responsibilities
which give rise to his or her status as a fiduciary, he or she has
enabled another fiduciary to commit a breach; or
3. When he or she has knowledge of a breach by another
fiduciary, unless he or she makes reasonable efforts, under the
circumstances, to remedy the breach.
C. Insurance of Plan Fiduciaries.
The Company, from its own assets, may purchase pension and
welfare fiduciary responsibility insurance from an independent insurance company
to insure the Plan and each corporate officer, director or employee of the
Company and its subsidiaries. The Company intends to maintain such insurance in
such amounts as it deems necessary, and to the extent such insurance provides
for a deductible amount, for which the insurance company is not liable, the
Company will indemnify each Fiduciary, without recourse, for the amount of such
deductible on the same terms and conditions expressed in the insurance policy
for claims made in excess of the deductible amount.
SECTION 15
CLAIMS PROCEDURE
A. Claim.
A Participant or beneficiary or other person who believes that he
or she is being denied a benefit to which he or she is entitled (hereinafter
referred to as "Claimant"), or his or her representative, may file a written
request for such benefit with the Human Resources Department setting forth his
or her claim. The request must be addressed to: Human Resources Department, The
Premcor Refining Group Inc., at The Premcor Refining Group Inc.'s then current
address.
B. Claim Decision.
Upon receipt of a claim, the Human Resources Department shall
advise the Claimant that a reply will be forthcoming within a reasonable period
of time, but ordinarily not later than ninety days, and shall, in fact, deliver
such reply within such period. However, the Human Resources Department may
extend the reply period for an additional ninety days for reasonable cause. If
the reply period will be extended, the Claimant shall be advised in writing
during the initial 90-day period indicating the special circumstances requiring
an extension and the date by which to expect the benefit determination. If the
claim is denied in whole or in part, the heard of the Human Resources Department
will render a written opinion using language calculated to be understood by the
Claimant setting forth:
1. the specific reason or reasons for denial;
2. the specific references to pertinent Plan provisions on
which the denial is based;
3. a description of any additional material or information
necessary for the Claimant to perfect the claim and an explanation why
such material or such information is necessary;
4. appropriate information as to the steps to be taken if
the Claimant wishes to submit the claim for review, including a
statement of the Claimant's right to bring a civil action under
Section 502(a) of ERISA following an adverse benefit determination on
review; and
5. the time limits for requesting a review under Subsection
C and for the actual review under Subsection D.
C. Request for Review.
Within sixty days after the receipt by the Claimant of the
written opinion described above, the Claimant may request in writing that the
Retirement Committee review the
prior determination. Such request must be addressed to: Retirement Committee,
The Premcor Refining Group Inc., at The Premcor Refining Group Inc.'s then
current address. The Claimant or his or her duly authorized representative may
submit written comments, documents, records or other information relating to the
denied claim, which such information shall be considered in the review under
this subsection without regard to whether such information was submitted or
considered in the initial benefit determination. The Claimant or his or her duly
authorized representative shall be provided, upon request and free of charge,
reasonable access to, and copies of, all documents, records and other
information which (i) was relied upon by the first level reviewer in making his
or her initial claims decision, (ii) was submitted, considered or generated in
the course of the making of his or her initial claims decision, without regard
to whether such instrument was actually relied upon in making his or her
decision or (iii) demonstrates compliance with the administrative processes and
safeguards designed to ensure and to verify that benefit claims determinations
are made in accordance with governing Plan documents and that, where
appropriate, the Plan provisions have been applied consistently with respect to
similarly situated claimants. If the Claimant does not request a review of the
first level reviewer's determination within such sixty-day period, he or she
shall be barred and estopped from challenging such determination.
D. Review of Decision.
Within a reasonable period of time, ordinarily not later than
sixty days, after the Retirement Committee's receipt of a request for review, it
will review the first level reviewer's prior determination. If special
circumstances require that the sixty-day time period be extended, the Retirement
Committee will so notify the Claimant within the initial 60-day period
indicating the special circumstances requiring an extension and the date by
which the Retirement Committee expects to render its decision on review, which
shall be as soon as possible but not later than 120 days after receipt of the
request for review. The decision of the Retirement Committee shall be final and
non-reviewable unless found to be arbitrary and capricious by a court of
competent review. Such decision will be binding upon the Employer and the
Claimant. If the Retirement Committee makes an adverse benefit determination on
review, the Retirement Committee will render a written opinion using language
calculated to be understood by the Claimant setting forth:
1. the specific reason or reasons for denial;
2. the specific references to pertinent Plan provisions on
which the denial is based;
3. a statement that the Claimant is entitled to receive, upon
request and free of charge, reasonable access to, and copies of, all
documents, records and other information which (i) was relied upon by
the Retirement Committee in making its decision, (ii) was submitted,
considered or generated in the course of the Retirement Committee
making its decision, without regard to whether such instrument was
actually relied upon by the Retirement Committee in making its
decision or (iii) demonstrates compliance by the Retirement Committee
with its administrative processes and
safeguards designed to ensure and to verify that benefit claims
determinations are made in accordance with governing Plan documents
and that, where appropriate, the Plan provisions have been applied
consistently with respect to similarly situated claimants.
4. a statement of the Claimant's right to bring a civil
action under Section 502(a) of ERISA following an adverse benefit
determination on review.
SECTION 16
MISCELLANEOUS
A. Participants' Rights.
Neither the establishment of the Plan hereby created, nor any
modification thereof, nor the creation of any fund or account, nor the payment
of any benefits, shall be construed as giving to any Participant or other person
any legal or equitable right against the Employer, any officer or Employee
thereof, the Trustee or the Board of Directors of the Company or any member of
the Controlled Group except as herein provided. Under no circumstances shall the
terms of employment of any Participant be modified or in any way affected
hereby.
B. Spendthrift.
No benefit or beneficial interest provided under the Plan shall be
subject in any manner to anticipation, alienation, sale, transfer, assignment,
pledge, encumbrance or charge, either voluntary or involuntary, and any attempt
to so alienate, anticipate, sell, transfer, assign, pledge, encumber or charge
the same shall be null and void. No such benefit or beneficial interest shall be
liable for or subject to the debts, contracts, liabilities, engagements, or
torts of any person to whom such benefits or funds are or may be payable.
Notwithstanding the above, a Participant's benefit will be offset
against any amount he or she is ordered or required to pay to the Plan pursuant
to an order or requirement which arises under a judgment of conviction for a
crime involving the Plan, under a judgment entered by a court in an action
involving a fiduciary breach, or pursuant to a settlement agreement between the
Participant and the Department of Labor or the Pension Benefit Guaranty
Corporation. Any such offset shall be made pursuant to Section 206(d) of ERISA.
C. Incapacity.
If, in the opinion of the Employer, a person to whom a benefit is
payable is unable to care for his affairs because of illness, accident or any
other reason, any payment due the person, unless prior claim therefor shall have
been made by a duly qualified guardian or other duly appointed and qualified
representative of such person, may be paid to some member of the person's
family, or to some party who, in the opinion of the Employer, has incurred
expense for such person. Any such payment shall be a payment for the account of
such person and shall be a complete discharge of any liability.
D. Small Benefit.
If a Participant's employment with the Employer is terminated and
the actuarial value of the Participant's vested accrued benefit is $5,000 or
less, such benefit shall be distributed to the Participant in a lump sum. If a
Participant's employment with the Employer is
terminated when the Participant has no vested benefit, such benefit shall be
deemed to have been distributed to the Participant in a lump sum on his last day
of employment.
E. Merger.
In the event of any merger or consolidation with, or transfer of
assets or liabilities to any other plan, each Participant shall (as if the Plan
had then terminated) have a benefit immediately after the merger, consolidation
or transfer which is equal to or greater than the benefit he or she would have
been entitled to receive immediately before the merger, consolidation, or
transfer (if the Plan had then terminated).
F. Maximum Benefits.
1. The Projected Annual Benefit otherwise payable hereunder
and under any other defined benefit plan to which the Employer or any
member of the Controlled Group has contributed shall be reduced
proportionately with respect to the benefits under each such defined
benefit plan so that the aggregate of all Projected Annual Benefits
does not exceed the limits set forth in Section 415 of the Code.
2. For purposes of this Section, Projected Annual Benefit
means a Participant's annual benefit (adjusted to the actuarial
equivalent of a straight-life annuity if expressed in a form other
than a straight-life or qualified joint and survivor annuity) under a
defined benefit plan.
3. For purposes of this Section, the Limitation Year shall
be the Plan Year.
G. Administration of Plan.
1. Premcor Inc. shall be the Plan Administrator.
2. The General Counsel of The Premcor Refining Group Inc.
shall be agent of the Plan for service of legal process.
H. Commencement of Benefits.
All benefits shall be paid in accordance with the requirements
of Code Section 401(a)(9) and the regulations thereunder.
Notwithstanding the preceding sentence or any other provision of
the Plan, if the amount of payment cannot be ascertained, or if it is not
possible to make payment because the Plan Administrator has been unable to
locate the Participant after making reasonable effort to do so, the Plan
Administrator shall commence payments to the Participant not later than sixty
days after the earliest date on which the amount of such payment can be
ascertained under the Plan or
the date on which the Participant is located, whichever is applicable.
I. Suspension of Benefits Upon Reemployment.
In the event a Participant who is receiving benefits under the Plan
returns to the employment of the Employer prior to his or her Required Beginning
Date, payment of his or her benefits shall cease as of the first day of the
month coincident with or next following the date on which he or she becomes a
regular employee (as determined by the Employer). Upon the cessation of the
Employee's benefits, the Employer shall notify the Employee by personal delivery
or first class mail during the first calendar month in which the Plan withholds
payments that his or her benefits are suspended. Such notification shall contain
a description of the specific reasons why benefit payments are being suspended,
a general description of the Plan provisions relating to the suspension of
payments, a copy of such Plan provisions, information regarding the Plan's
procedure for affording a review of the suspension of benefits, and a statement
to the effect that applicable Department of Labor regulations may be found in
Section 2530.203-3 of Title 29 of the Code of Federal Regulations.
Upon his or her subsequent termination of employment, the
Participant's benefits hereunder shall be as set forth in Section 5F.3;
provided, however, that in no event shall the Participant receive a benefit upon
his or her subsequent termination that is smaller than the benefit he or she was
receiving as of his or her date of reemployment. In no event shall a reemployed
Participant's benefits be suspended hereunder if he or she earns 40 Hours of
Employment or fewer during a calendar month.
J. Trust Sole Source of Benefits.
The assets of the Plan shall be the sole source of benefits under
the Plan and neither the Company nor any member of the Controlled Group assumes
any liability or responsibility for such benefits. Each Participant, surviving
spouse, beneficiary or other person who shall claim the right to any payment
under the Plan shall be entitled to look only to the Trust (or insurance
company) for such payment and shall not have any right, claim or demand therefor
against the Company, a member of the Controlled Group, the Trustee or any
employee of any of them.
K. Actuarial Assumptions.
All actuarial assumptions under the Plan (other than for funding
purposes, for calculating lump sum benefits, and as otherwise specifically
provided) shall use an interest rate of seven percent per annum compounded
annually and the 1983 Group Annuity Mortality Table (blended 50% male and 50%
female). Actuarial assumptions for funding purposes shall be as set forth in the
Plan's Annual Report. The mortality table used to calculate lump sum benefits
shall be the applicable mortality table specified in Code Section
417(e)(3)(A)(ii)(I) in effect on the date the calculation is made. The interest
rate used to calculate lump sum benefits shall be the applicable interest rate
specified in Code Section 417(e)(3)(A)(ii)(II) in effect for the third calendar
month preceding the first day of the Plan Year during which the Annuity Starting
Date
occurs. Notwithstanding the foregoing, the monthly amount of the Participant's
benefit commencing in any annuity form before age 65 shall be no greater than
the monthly amount of the benefit the Participant would receive at age 65 using
the methodology described in Section 5H.
L. Qualified Domestic Relations Order.
Notwithstanding anything in this Plan to the contrary, benefits may
be distributed in accordance with the terms of a Qualified Domestic Relations
Order ("QDRO"). For this purpose a QDRO is any Domestic Relations Order
determined by the Employer to be a Qualified Domestic Relations Order within the
meaning of Section 414(p) of the Code.
A "Domestic Relations Order" is a judgment, decree, order or property
settlement agreement which
1. relates to the provision of child support, alimony
payments, or marital property rights to a spouse, former spouse, child
or other dependent of a Participant,
2. is made pursuant to a state domestic relations law, and
3. creates or recognizes the existence of an Alternate Payee's
right, or assigns to the Alternate Payee the right, to receive all or a
portion of the benefits of the Participant under the Plan.
An "Alternate Payee" includes any spouse, former spouse, child, or
other dependent of a Participant who is designated by the Domestic Relations
Order as having a right to receive all or a portion of the benefits payable
under the Plan with respect to the concerned Participant.
To be a QDRO, the Domestic Relations Order must meet the
specifications set forth in Section 414(p) of the Code and must clearly specify
the following:
1. Name and last known mailing address of the Participant.
2. Name and last known mailing address of each Alternate Payee
covered by the Domestic Relations Order.
3. The amount or the percentage of the Participant's benefit to
be paid to each Alternate Payee, or the manner in which such amount or
percentage is to be determined.
4. The number of payments or period to which the Domestic
Relations Order applies.
5. Each Plan to which the Domestic Relations Order applies.
The status of any Domestic Relations Order as a QDRO shall be
determined under the following procedures:
1. Promptly upon receiving a Domestic Relations Order, the
Employer will
(a) refer the Domestic Relations Order to the
appropriate party for the Plan to render an opinion within 90 days (or
such earlier period as shall be provided by applicable law) whether
the Domestic Relations Order is a QDRO, and
(b) notify the affected Participant and any Alternate
Payee of the receipt by the Plan of the Domestic Relations Order and
of this procedure.
2. Promptly upon receiving the determination of the
status of the Domestic Relations Order, the affected Participant and
each Alternate Payee (or any representative designated by an Alternate
Payee by written notice to the Employer) shall be furnished a copy of
such determination. The notice of determination shall state
(a) whether a determination has been made that the
Domestic Relations Order is a QDRO, and
(b) once a determination has been made whether the
Domestic Relations Order constitutes a QDRO, that the Employer will
commence any payments currently due under the Plan to the person or
persons entitled thereto after the expiration of a period of 60 days
commencing on the date of the mailing of the notice unless prior
thereto the Employer receives notice of the institution of legal
proceedings disputing the determination. The Employer shall, as soon
as practical after such 60 day period, ascertain the dollar amount
currently payable to each payee pursuant to the Plan and the QDRO, and
any such amounts shall be disbursed by the Plan.
If there is a dispute on the status of a Domestic Relations Order as a
QDRO, there shall be a delay in making payments. The Employer shall direct that
the amounts otherwise payable be held in a separate account within the Plan. If
within 18 months thereafter, the Domestic Relations Order is determined not to
be a valid QDRO, or the status of the Domestic Relations Order has not been
finally determined, the segregated or escrow amounts (including interest
thereon) shall be paid to the person or persons who would have been entitled to
such amounts if there had been no Domestic Relations Order. Any determination
thereafter that the Domestic Relations Order is a QDRO shall be applied
prospectively only.
A Domestic Relations Order shall not fail to constitute a QDRO merely
because such order requires that an immediate lump sum payment be made to an
Alternate Payee.
M. Leased Employees.
Any person who is a Leased Employee of any member of the Controlled
Group shall be treated for all purposes of the Plan as if he or she were
employed by a member of the Controlled Group which has not adopted the Plan. A
Leased Employee shall mean any person (other than an Employee of the recipient)
who pursuant to an agreement between the recipient and any other person
("leasing organization") has performed services for the recipient (or for the
recipient and related persons determined in accordance with Code Section
414(n)(6)) on a substantially full-time basis for a period of at least one year,
and such services are performed under the primary direction or control of the
recipient.
N. Written Explanation of Rollover Treatment.
The Plan Administrator of this Plan shall, when making an eligible
rollover distribution (as that term is defined in Section 402(c)(4) of the
Code), provide a written explanation to the recipient of such distribution of
his or her right to rollover such distribution to an eligible retirement plan
(as described in Section 402(c)(8) of the Code), his or her right to the special
distribution alternative in Section 16O and, if applicable, his or her right to
the special ten-year averaging and capital gains tax treatment in the Code. Such
written explanation will be provided to the recipient in accordance with rules
prescribed by the Internal Revenue Service.
O. Special Distribution Option.
Notwithstanding any provision of the Plan to the contrary that would
otherwise limit a Distributee's (as hereinafter defined) election under this
Section, a Distributee may elect, at the time and in the manner prescribed by
the Plan Administrator, to have any portion of an Eligible Rollover Distribution
(as hereinafter defined) paid directly to an Eligible Retirement Plan (as
hereinafter defined) specified by the Distributee in a Direct Rollover.
1. Eligible Rollover Distribution: An Eligible Rollover
Distribution is any distribution of all or any portion of the balance
to the credit of the Distributee, provided such distribution exceeds
$200, except that an Eligible Rollover Distribution does not include:
(a) any distribution that is one of a series of substantially equal
periodic payments (not less frequently than annually) made for the
life (or life expectancy) of the Distributee or the joint lives (or
joint life expectancies) of the Distributee and the Distributee's
designated beneficiary, or for a specified period of ten years or
more; (b) any distribution to the extent such distribution is required
under Section 401(a)(9) of the Code; and (c) any hardship
distribution.
2. Eligible Retirement Plan: An Eligible Retirement Plan is
(a) an individual retirement account described in Section 408(a) of
the Code, (b) an individual retirement annuity described in Section
408(b) of the Code, (c) an annuity plan described in Section 403(a) of
the Code, (d) an eligible deferred compensation plan described in
Section 457(b) of the Code which is maintained by an eligible employer
described in
Section 457(e)(1)(A) of the Code, (e) an annuity contract described in
Section 403(b) of the Code or (f) a qualified trust described in
Section 401(a) of the Code that accepts the Distributee's Eligible
Rollover Distribution.
3. Distributee: A Distributee includes an Employee or former
Employee. In addition, the Employee's or former Employee's surviving
spouse and the Employee's or former Employee's spouse or former spouse
who is the alternate payee under a qualified domestic relations order,
as defined in Section 414(p) of the Code, are Distributees with regard
to the interest of the spouse or former spouse.
4. Direct Rollover: A Direct Rollover payment is a payment
by the Plan to the Eligible Retirement Plan specified by the
Distributee.
P. Limitation on Benefits for Certain Participants:
1. This Section is included in the Plan to conform to the
requirements of Treasury Regulation (s)1.401(a)(4)-5(b)(3).
2. This Section shall apply to the amount of Employer
contributions which may be used to provide Benefits (as defined below)
under this Plan for any Restricted Participant (as defined below). The
payment of such Benefits shall be limited to an annual amount equal to
the sum of the payments which would be made on behalf of the
Restricted Participant (a) as a single life annuity which is the
actuarial equivalent of the Restricted Participant's Benefits, plus
(b) the Participant's social security supplement (if any).
3. The limitations set forth in this Section shall not apply
if:
(a) after payment of all Benefits to a Restricted
Participant, the value of Plan assets equals at least one hundred ten
percent of the value of current liabilities of the Plan, as defined in
Section 412(1)(7) of the Code; or
(b) the value of the Benefits for a Restricted
Participant is less than one percent of the value of such current
liabilities before distribution; or
(c) the value of the Benefits for a Restricted
Participant does not exceed $5,000.
4. Solely for purposes of this Section:
(a) "Restricted Participant" means a Participant who
(i) is a highly compensated employee or highly
compensated former employee (determined pursuant to Section 414(q) of
the Code), and
(ii) for the applicable Plan Year (or any prior Plan
Year) is one of the twenty-five highly compensated employees and
highly compensated former employees having the highest
compensation from the Company and all members of its Controlled
Group.
(b) "Benefits" means the Participant's accrued benefit and
includes any of the following if, and to the extent, provided from
time to time under the Plan:
(i) Any other periodic income;
(ii) loans in excess of the amounts set forth in
Section 72(p)(2)(A) of the Code;
(iii) any withdrawal value payable to a living
Participant; and
(iv) any death benefits not provided for by insurance
on the Participant's life.
Q. Plan Expenses.
All expenses associated with the administration of the Plan shall be
paid out of the trust which funds the Plan unless paid by the Employer without
reimbursement from the Plan.
R. Acquisition of New Entities.
If a member of the Controlled Group contributes to the Plan and the
contribution is accepted by the Plan with the consent of the Company, the
Controlled Group member will be deemed to have adopted the Plan with the consent
of the Company with respect to the category of employees on behalf of whom the
contribution was made.
If the Company acquires the assets (through purchase, merger or
otherwise) of any other entity and hires persons who had been employed by such
entity, the division or other subgroup in which such persons are employed shall
be excluded from the groups included in the definition of Employee unless the
Company communicates to such division or subgroup that such division or subgroup
is accruing benefits under the Plan.
S. Construction of Plan.
Except as provided by ERISA, this Plan shall be construed according to
the laws of the State of Missouri, and all provisions of the Plan shall be
administered according to the laws of such State.
SECTION 17
TOP-HEAVY DEFINITIONS
A. "Accrued Benefits" means "the present value of accrued benefits" as
that phrase is defined under Section 416 of the Code and regulations thereunder.
For purposes of Sections 17 and 18 hereof, the Accrued Benefits of any
Participant (other than a Key Employee) shall be determined under the single
accrual rate used by All Qualified Plans of the Employer which are defined
benefit plans, or if there is no single accrual rate, Accrued Benefits shall be
determined as accruing no more rapidly than the slowest rate permitted under
Section 411(b)(1)(C) of the Code.
B. "Beneficiaries" means the person or persons to whom the share of a
deceased Participant's account is payable.
C. "Determination Date" means for a Plan Year the last day of the
preceding Plan Year.
D. "Former Key Employee" means any person presently or formerly
employed by the Controlled Group (and the Beneficiaries of such person) who
during the Plan Year is not classified as a Key Employee but who was classified
as a Key Employee in a previous Plan Year; provided, however, that a person who
has not performed any services for the Controlled Group at any time during the
one-year period ending on the Determination Date (and the Beneficiaries of such
persons) shall not be considered a Former Key Employee.
E. "Key Employee" means any person presently or formerly employed by
the Controlled Group (and the Beneficiaries of such person) who is a "key
employee" as that term is defined in Section 416(i) of the Code and the
regulations thereunder; provided, however, that a person who has not performed
any services for the Controlled Group at any time during the one-year period
ending on the Determination Date (and the Beneficiaries of such persons) shall
not be considered a Key Employee. For purposes of determining whether a person
is a Key Employee, the definition of Top-Heavy Compensation shall be applied.
F. "Non-Key Employee" means any person presently or formerly employed
by the Controlled Group (and the Beneficiaries of such person) who is not a Key
Employee or a Former Key Employee; provided, however, that a person who has not
performed any services for the Controlled Group at any time during the one-year
period ending on the Determination Date (and the Beneficiaries of such persons)
shall not be considered a Non-Key Employee.
G. "Permissive Aggregation Group" means each Qualified Plan of the
Controlled Group in the Required Aggregation Group plus each other Qualified
Plan which is not part of the Required Aggregation Group but which satisfies the
requirements of Section 401(a)(4) and 410 of the Code when considered together
with the Required Aggregation Group.
H. "Required Aggregation Group" means each Qualified Plan of the
Controlled Group in which a Key Employee participates during the Fiscal Year
containing the Determination Date or any of the four preceding Fiscal Years and
each other Qualified Plan of the Controlled Group which during this period
enables any Qualified Plan in which a Key Employee participates to meet the
requirements of Section 401(a)(4) or 410 of the Code.
I. "Top-Heavy Average Compensation" means one-fifth of the aggregate
Top-Heavy Compensation received by an Employee during the five consecutive
calendar years commencing on or after January 1, 1984 which give rise to the
highest aggregate; provided, however, that for purposes of determining Top-Heavy
Average Compensation To-Heavy Compensation earned after the close of the last
Plan Year in which the plan is part of a Top-Heavy Average Compensation for an
Employee, his or her Top-Heavy Average Compensation shall be the aggregate
Top-Heavy Compensation received by him or her as calculated in the previous
sentence divided by the years and fractions thereof used to compute Top-Heavy
Compensation.
J. "Top-Heavy Compensation" means the lesser of $150,000 (or such
other amounts prescribed by applicable law) or the gross amount earned by an
Employee from the Employer for services rendered while a Participant as shown on
his or her Form W-2, including the deferrals described in Code Section
415(c)(3)(D).
K. "Top-Heavy Group" means, for a Plan Year, the Required Aggregation
Group if, and only if, the sum of the Accrued Benefits (valued as of the
Determination Date for such Plan Year) under all Qualified Plans (including any
terminated Qualified Plan) in the Required Aggregation Group for Key Employees
exceeds sixty percent of the sum of the Accrued Benefits (valued as of such
Determination Date) under all Qualified Plans (including any terminated
Qualified Plan) in the Required Aggregation Group for all Key Employees and
Non-Key Employees; provided, however, that the Required Aggregation Group will
not be a Top-Heavy Group for a Plan Year if the sum of the Accrued Benefits
(valued as of the Determination Date for such Plan Year) under all Qualified
Plans (including any terminated Qualified Plan) in the Required Aggregation
Group for Key Employees does not exceed 60% of the sum of the Accrued Benefits
(valued as of such Determination Date) under all Qualified Plans in the
Permissive Aggregation Group for all Key Employees and Non-Key Employees. If the
Qualified Plans in the Required or Permissive Aggregation Group have different
Determination Dates, the Accrued Benefits under each such Plan shall be
calculated separately, and the Accrued Benefits as of Determination Dates for
such Plans that fall within the same calendar year shall be aggregated.
SECTION 18
TOP-HEAVY RULES
If for any Plan Year the Plan is part of a Top-Heavy Group, then,
effective as of the first day of such Plan Year the following provisions shall
apply to Participants who accrue an Hour of Service on or after the first day of
such Plan Year.
A. Vesting.
The vesting schedule in Section 8A.1 is deleted and replaced by
the following:
Years of Service Vested Percentage
---------------- -----------------
less than 3 0%
3 or more 100%
B. Minimum Normal Retirement Benefit.
The following paragraph is added at the end of Section 6A.
"Notwithstanding the foregoing, each Non-Key Employee who is a
Participant shall have an annual Normal Retirement Benefit equal
to at least one-tenth of the product of (a) and (b):
(a) the number of his or her years of Service (not
exceeding ten years) accrued during the Plan Years in which
the Plan was part of a Top-Heavy Group multiplied by
(b) twenty percent of such Non-Key Employee's Top-Heavy
Average Compensation reduced (but not below zero) by the
annual amount of his or her Normal Retirement Benefit accrued
as of the last day of the Plan Year immediately preceding the
Plan Year in which the Plan most recently became part of a
Top-Heavy Group."
C. Minimum In-Service Benefit.
The following paragraph is added at the end of Section 6B.
"Notwithstanding the foregoing, each Non-Key Employee who is a
Participant and who retires after his or her Normal Retirement
Date shall have an annual benefit which is not less than the
actuarial equivalent of the benefit in Section 6A."
SECTION 19
ADMINISTRATION
A. Appointment of Committee.
The Board of Directors of the Company or its delegate shall appoint a
Retirement Committee of one or more persons, who shall serve at the pleasure of
the Board of Directors of the Company or its delegate. Upon death, resignation,
removal or inability of a member of the Retirement Committee to continue, the
Board of Directors of the Company or its delegate shall appoint a successor. If,
at any time, the Board of Directors of the Company or its delegate has not
appointed a Retirement Committee, or there is no Retirement Committee, then the
Company shall have all of the duties, responsibilities, powers and authorities
given to the Retirement Committee.
B. Construction.
The Retirement Committee shall have the discretionary authority to
construe, interpret and administer all provisions of the Plan and to determine a
Participant's eligibility for benefits on a uniform, non-discriminatory basis in
similar fact situations.
C. Decisions and Delegation.
The Retirement Committee may appoint such agents as it may deem
necessary for the effective exercise of its duties, and may, to the extent not
inconsistent herewith, delegate to such agents any powers and duties, both
ministerial and discretionary, as the Retirement Committee may deem expedient or
appropriate.
A member of the Retirement Committee shall not make any decision or
take any action covering exclusively his or her own benefits under the Plan. All
such matters shall be decided by the other members of the Retirement Committee
or by the Board of Directors of the Company.
D. Duties of the Retirement Committee.
The Retirement Committee shall, as part of its general duty to
supervise and administer the Plan, direct the Trustee specifically in writing in
regard to:
1. the making of distribution payments, giving the names of the
payees, the amounts to be paid and the time or times when payments shall be
made;
2. the making of any other payments which the Trustee is not
authorized to make without direction in writing by the Plan Administrator;
3. the purchase of annuity contracts, giving the names of
the persons for whose benefit they shall be purchased and the purchase
price; and
4. an annual report for the Company, as of the end of each
Plan Year, in such form as the Company may require.
E. Records of the Retirement Committee.
All acts and determinations of the Retirement Committee shall be duly
recorded, and all such records, together with such other documents as may be
necessary for the proper administration of the Plan, shall be preserved. Such
records and documents shall at all times be open for inspection and copying by
any person designated by the Board of Directors of the Company.
IN WITNESS WHEREOF, Premcor Inc. has caused this Plan to be executed
this 9th day of August, 2002.
PREMCOR INC.
By: /s/ James R. Voss
--------------------
Vice President