Exhibit 10.15
PREMCOR INC.
SENIOR EXECUTIVE RETIREMENT PLAN
INTRODUCTION
The principal objective of the Premcor Inc. Senior Executive
Retirement Plan is to ensure the payment of a competitive level of benefits in
order to attract, retain and motivate selected senior executives. The Plan is
designed to provide retirement benefits, a death and disability benefit and
post-employment medical benefits which will meet the objective described above.
Eligibility for participation in the Plan shall be limited to senior executives
selected by the Committee. The Plan will be effective as of February 1, 2002.
SECTION 1.
DEFINITIONS
1.1 Age shall mean a Participant's actual age plus any period for which
severance benefits become payable to the Participant pursuant to an employment
agreement with the Company (e.g., if a severance benefit of a lump sum payment
equal to three (3) times base pay plus base bonus becomes payable to a
Participant, Age will include an additional three (3) years).
1.2 Average Earnings means the average of the Participant's annual
Earnings during the three consecutive calendar year period of employment in
which the Participant had the highest aggregate Earnings. If the Participant has
less than three full consecutive calendar years of employment, the number of
full consecutive calendar years of employment which the Participant has shall be
used for determination of Average Earnings.
1.3 Board of Directors means the board of directors of Premcor Inc.
1.4 Committee means the compensation committee of the Board of Directors,
or any other committee which has been given authority by the Board of Directors
to administer this Plan.
1.5 Company means Premcor Inc., its subsidiaries and its successor or
successors.
1.6 Dependent Child means any natural child, legally adopted child,
stepchild, foster child, or child under guardianship who resides in the
household of the Participant (prior to the death of the Participant or except to
attend school) and depends on the Participant (prior to the death of
Participant) for principal support and maintenance.
1.7 Earnings means (a) base compensation for a calendar year, (b) bonuses
paid under an annual incentive plan of the Company attributable to that calendar
year, even if paid during subsequent calendar years, (c) compensation that could
have been received in cash during the calendar year as amounts described in (a)
or (b) above but which were deferred pursuant to either a qualified or
nonqualified deferred compensation plan or otherwise and (d) severance benefits
payable to the Participant pursuant to an employment agreement with the Company
which
represent amounts described in (a) and (b) above, determined as if paid ratably
during any period by which such severance benefits are calculated, regardless of
how or when payment of such severance benefits is actually made (e.g., if a
severance benefit equals a lump sum payment equal to three (3) times base pay
plus base bonus, Earnings would be calculated with respect to such lump sum
payment as if such payment had been paid ratably over a three-year period
beginning on the date of the termination of employment which triggered the
severance payment).
1.8 Participant means a senior executive of the Company or one of its
subsidiaries who is designated as a Participant by the Committee. A senior
executive shall become a Participant in the Plan as of the date he is
individually selected by, and specifically named in the resolution of, the
Committee for inclusion in the Plan. The initial Participants are set forth in
Exhibit A hereto. For the initial Participants, their participation in the Plan
shall commence on the later of February 1, 2002, or the date their employment
with the Company commenced.
1.9 Plan means the Premcor Inc. Senior Executive Retirement Plan, as
amended from time to time.
1.10 Retirement means the termination of a Participant's employment with
the Company on a Normal, Early, Postponed, Disability or Vested Retirement Date,
as such terms are defined in Section 2.1.
1.11 Service for all purposes shall mean (i) all full years and partial
years of a Participant's employment with the Company on and after the date on
which the Participant commences participation in the Plan; plus (ii) any period
for which severance benefits become payable to the Participant pursuant to an
employment agreement with the Company (e.g., if a severance benefit equals a
lump sum payment equal to three (3) times base pay plus base bonus, Service will
include an additional three (3) years); plus (iii) any period during which a
Participant is receiving disability benefits under Section 6. However,
subsection (ii) of this Section 1.11 shall not be applicable until on or after
the first anniversary of the date on which the Participant commences
participation in the Plan.
1.12 Surviving Spouse means the individual who is married to the
Participant on the earlier of the Participant's Retirement or death.
Where appearing in the Plan, the masculine gender will be deemed to include the
feminine gender, and the singular may include the plural, unless the context
clearly indicates the contrary.
SECTION 2.
ELIGIBILITY FOR BENEFITS
2.1 Each Participant is eligible to retire and receive a benefit under
this Plan beginning on one of the following dates:
(a) Normal Retirement Date, which is the first day of the month
following the month in which the Participant ceases employment with the
Company, having reached age 65 with at least 3 years of Service.
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(b) Early Retirement Date, which is the first day of any month
following the month in which the Participant ceases employment with the
Company, having reached at least age 55 with at least 3 years of Service.
(c) Postponed Retirement Date, which is the first day of the month
following the Participant's Normal Retirement Date in which the Participant
terminates employment with the Company.
(d) Disability Retirement Date, which is the first day of the month
following the date the Participant's total disability commenced, as
determined under the terms of his employment agreement with the Company but
not later than the Participant's Normal Retirement Date.
(e) Vested Retirement Date, which is the first day of any month
following the month in which the Participant's employment with the Company
terminates, provided he has at least 3 years of Service as of the date of
termination.
SECTION 3.
AMOUNT OF RETIREMENT BENEFIT
3.1 The annual retirement benefit payable under the Plan at a Normal
Retirement Date shall be a single life annuity for the life of the Participant
which is equal to the lesser of the following:
(a) The sum of six percent (6%) of Average Earnings times years of
Service less than or equal to five (5), plus three percent (3%) of Average
Earnings times years of Service greater than five (5), or
(b) Sixty percent (60%) of Average Earnings.
3.2 The annual retirement benefit payable under the Plan at an Early
Retirement Date shall be equal to the benefit determined in Section 3.1, reduced
by one percent (1.0%) for each year that the Participant's age precedes age 65
as of the date his benefit commences; provided that, no reduction shall apply if
his age plus Service equals or exceeds seventy (70), as of the date his benefit
commences.
3.3 The annual benefit payable at a Postponed Retirement Date shall be
equal to the benefit determined in accordance with Section 3.1, based on Service
and Average Earnings as of the Participant's Postponed Retirement Date.
3.4 The annual benefit payable at a Vested Retirement Date shall be equal
to the benefit determined in Section 3.1, reduced by one percent (1.0%) for each
year that the Participant's age precedes age 65 as of the date his benefit
commences; provided that no reduction shall apply if his age at the date his
benefit commences plus Service equals or exceeds seventy (70).
3.5 Any benefit payable under this Section 3 shall be offset by an amount
actuarially equivalent to the benefit, if any, payable to the Participant upon
his termination of employment
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under the Premcor Inc. Pension Plan, regardless of whether payment of benefits
under such plan commences upon his termination of employment. A Participant
shall not accrue a benefit under the non-qualified Premcor Inc. Pension
Restoration Plan during the period in which he participates in the Plan.
Actuarial equivalence shall be determined in accordance with Section 4.2.
SECTION 4.
PAYMENT OF RETIREMENT BENEFITS
4.1 Benefits payable in accordance with Section 3 of the Plan will
normally commence on the first day of the month following Participant's
Retirement in the form of a single life annuity for the Participant's life. A
Participant may elect to defer receipt of his benefits until a later date and/or
receive his benefits (including the actuarial equivalent of any death benefits
payable to a Surviving Spouse under Section 5.2) in the form of a lump sum upon
his Retirement, including the actuarial equivalent of the Participant's benefits
as of his Vested Retirement Date (or, with prior Committee approval, any other
actuarially equivalent form); provided that, an election to do so shall be
effective only if made on or before the date which is twelve (12) months before
the Participant's termination of employment. Notwithstanding the above, the
initial election of a Participant upon his commencement in the Plan shall become
immediately effective. Such election shall be made within 30 days. In addition,
any change to such election (including revocation of a prior election) shall be
effective only if made on or before the date which is twelve (12) months before
the Participant's termination of employment. Notwithstanding the above,
following Retirement, a Participant who elects to receive his benefit in the
form of a stream of payments may elect to receive his remaining benefit as an
actuarially equivalent lump sum; provided that, such lump sum representing the
remaining benefit shall be reduced by a penalty of 10%, unless a change of
control has occurred or is expected to occur shortly, in which case the penalty
shall be reduced to 5%.
4.2 For all purposes of the Plan, actuarial equivalence of benefits shall
be determined using a discount rate equal to the average yield on state and
local government bonds rated AAA, as published in the Federal Reserve
Statistical Release H 15 (519), or its equivalent, for the three (3) month
period prior to the payment date and the applicable mortality table described in
Section 417(e)(3) of the Internal Revenue Code of 1986, as amended.
SECTION 5.
DEATH BENEFITS PAYABLE
5.1 If a Participant dies prior to Retirement, such Participant's
designated beneficiary shall receive a benefit which is actuarially equivalent
to the benefit the Participant would have received if he had retired on the date
of his death with a fully vested benefit; provided, however, that if the
Participant's designated beneficiary is a Surviving Spouse, such benefit shall
not be less than an annual benefit for the life of the Surviving Spouse equal to
50% of the Participant's Average Earnings as of his date of death. In addition,
each Dependent Child will receive $1,000 per month ($5,000 per month if both the
Participant and Spouse are deceased) through the month in which the Dependent
Child attains age 18 or, if a full-time student, age 25. If a Participant has
more than three children, a maximum of three times the above benefit shall be
divided among the
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children. The benefits provided by this Section 5.1 shall commence as of the
first day of the month following the month in which the Participant dies and
shall terminate on the first day of the month in which the Surviving Spouse
dies.
Prior to his death, a Participant may elect to have his designated
beneficiary or Surviving Spouse and each Dependent Child receive the benefit
described in this Section 5.1 in the form of an actuarially equivalent single
lump sum, to be paid as soon as practicable following his death.
5.2 If a Participant should die after Retirement, the Surviving Spouse
will receive an annual benefit equal to 50% of the Participant's normal form of
benefit (as described in the first sentence of Section 4.1) upon Retirement for
the lifetime of the Surviving Spouse; provided that, if the Participant received
the actuarial equivalent of this benefit upon Retirement in the form of a lump
sum payment in accordance with a valid election as described in Section 4.1, no
benefit shall be paid to the Surviving Spouse pursuant to this Section 5.2. In
addition, each Dependent Child will receive $1,000 per month ($5,000 per month
if both the Participant and Spouse are deceased) through the month in which the
Dependent Child attains age 18 or, if a full-time student, age 25. If a
Participant has more than three children, a maximum of three times the above
benefit shall be divided among the children. The benefits provided by this
Section 5.2 shall commence as of the first day of the month following the date
of the Participant's death and shall terminate on the first day of the month in
which the Surviving Spouse dies.
Prior to his death, a Participant may elect to have his Surviving
Spouse and each Dependent Child receive the benefit described in this Section
5.2 in the form of an actuarially equivalent single lump sum, to be payable as
soon as practicable following his death.
SECTION 6.
DISABILITY BENEFITS PAYABLE
6.1 In the event a Participant's employment is terminated for disability
under the terms of his employment agreement, the Participant shall be entitled
to retire on his Disability Retirement Date.
6.2 The annual disability benefit will be equal to 60% of the
Participant's Average Earnings determined as of his date of disability.
6.3 The disability benefit determined in accordance with Section 6.2 will
be reduced by any benefit payable under any Company-sponsored long-term
disability plan, as well as any Social Security benefits awarded or benefits
awarded under any other government-sponsored or government-mandated program,
including Workers' Compensation.
6.4 Disability benefits will be payable monthly and will commence on the
Participant's Disability Retirement Date. The last payment will be as of the
first of the month during which the disabled Participant either recovers or
dies. If a Participant remains disabled until age 65, he shall be deemed to be
disabled thereafter. If a disabled Participant recovers, he may be eligible for
a Retirement benefit under Section 3 if he satisfies the eligibility
requirements for a Normal, Early, Postponed or Vested Retirement Date.
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6.5 In the event a disabled Participant dies, such Participant's
designated beneficiary shall receive a benefit which is actuarially equivalent
to the benefit the Participant would have received if he had retired on the date
of his death with a fully vested benefit; provided, however, that if the
designated beneficiary is a Surviving Spouse, such benefit shall not be less
than an annual benefit for the life of the Surviving Spouse equal to 50% of the
amount determined in Section 6.2. In addition, each Dependent Child will receive
$1,000 per month ($5,000 per month if both the Participant and Spouse are
deceased) through the month in which the Dependent Child attains age 18 or, if a
full-time student, age 25. If a Participant has more than three children, a
maximum of three times the above benefit shall be divided among the children.
The benefits provided by this Section 6.5 shall commence as of the first day of
the month following the date of the Participant's death and shall terminate on
the first day of the month in which the Surviving Spouse dies. No death benefits
shall be payable under Section 5 upon the death of a disabled Participant.
Prior to his death, a Participant may elect to have his designated
beneficiary or Surviving Spouse and each Dependent Child receive the benefit
described in this Section 6.5 in the form of an actuarially equivalent single
lump sum, to be paid as soon as practicable following his death.
SECTION 7.
MEDICAL BENEFITS
7.1 Each Participant with at least three (3) years of Service, his spouse,
and each Dependent Child until age 18 or, if a full-time student, age 25, shall
be entitled to receive medical benefits following the termination of the
Participant's employment with the Company. Such benefits will be made available
commencing with termination of a Participant's employment with the Company and
shall continue as long as the Participant, his spouse and each Eligible
Dependent pay, on a timely basis, a monthly amount generally equivalent to the
amount of the medical payroll deduction applicable to the Participant on the
date his participation in the Plan commences. Such benefits shall be generally
commensurate with those which the Company offers from time to time to its active
employees who are in positions similar to the position the Participant held on
the date the Participant terminated employment. To the extent the benefits
provided to a Participant, his spouse and each eligible Dependent Child under
this Section 7.1 are substantially and materially reduced as compared to the
benefits provided to them as of the date the Participant terminates employment,
the Participant (or his spouse and each Eligible Dependent, if the Participant
dies) shall receive a reduction in the monthly amount payable or periodic cash
payments from the Company equivalent to the value of the substantial and
material reduction. The value of medical benefits for purposes of the preceding
sentence shall be determined using generally accepted methods for calculating
actuarial equivalence of medical benefits.
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SECTION 8.
MISCELLANEOUS
8.1 The Committee may, in its sole discretion, terminate, suspend, or
amend this Plan at any time or from time to time, in whole or in part; provided,
however, no amendment, termination, or suspension of the Plan may adversely
affect a Participant's right or the right of a Surviving Spouse or Dependent
Child of a Participant to any benefit as set forth in this Plan as of the day
prior to such amendment, termination, or suspension of the Plan.
8.2 Nothing contained herein will confer upon any Participant the right to
be retained in the service of the Company, nor will it interfere with the right
of the Company to discharge or otherwise deal with Participants without regard
to the existence of this Plan.
8.3 This Plan shall be unfunded. All payments to a Participant under the
Plan shall be made from the general assets of the Participant's employer. In the
event the Participant's employer is unable to make a payment to the Participant,
the payment shall be made from the general assets of the Company. The rights of
any Participant to payment shall be those of an unsecured general creditor of
his employer or the Company, as applicable.
8.4 To the maximum extent permitted by law, no benefit under this Plan
shall be assignable or subject in any manner to alienation, sale, transfer,
claims of creditors, pledge, attachment, or encumbrances of any kind.
8.5 The Committee may adopt rules and regulations to assist it in the
administration of the Plan. Each Participant shall receive a copy of this Plan
and the Committee will make available for inspection by any Participant a copy
of the rules and regulations used by the Committee in administering the Plan.
8.6 A Participant who believes that he is being denied a benefit to which
he is entitled may file a written request for such benefit with the head of the
Human Resources Department setting forth his claim. The request must be
addressed to the Human Resources Department, Premcor Inc., at its then current
address. Upon receipt of a claim, the claimant shall be advised that a reply
will be forthcoming within a reasonable period of time, but ordinarily not later
than ninety (90) days, and shall in fact deliver such reply within such period.
However, the head of the Human Resources Department may extend the reply period
for an additional ninety (90) days for reasonable cause. If the claim is denied
in whole or in part, the head of the Human Resources Department will adopt a
written opinion using language calculated to be understood by the claimant
setting forth (1) the specific reason or reasons for denial, (2) 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.
Within sixty (60) days after the receipt of the written opinion, the
claimant may request in writing that the Committee review the denial. The
request must be addressed to the
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Committee at Premcor Inc.'s then current address. If the claimant does not
request a review of the prior determination within such sixty (60) day period,
he shall be barred and estopped from challenging such determination.
Within a reasonable period of time, ordinarily not later than sixty
(60) days after the Committee's receipt of a request for review, it will review
the prior determination. If special circumstances require, the sixty (60) day
period may be extended for an additional sixty (60) days. The decision of the
Committee shall be final and nonreviewable unless found to be arbitrary and
capricious by a court of competent review. Such decision will be binding upon
the Company and the claimant. If the Committee makes an adverse benefit
determination on review, the 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 (a) was relied
upon by the Committee in making its decision, (b) was submitted, considered or
generated in the course of the Committee making its decision,, without regard to
whether such instrument was actually relied upon or (c) demonstrates compliance
by the 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, and
(4) a statement of the claimant's right to bring a civil action under Section
502(c) of ERISA following an adverse benefit determination on review.
Notwithstanding the above, if a claimant is denied a benefit because
he is determined not to be disabled and he makes a claim pursuant to such
denial, the following provisions shall apply. Upon receipt of a claim, the reply
period shall be forty-five (45) days. If, prior to the end of the initial 45-day
period, the head of the Human Resources Department determines that, due to
matters beyond his or her control, a decision cannot be rendered within such
45-day period, the period for making the determination may be extended for up to
thirty (30) days. If, prior to the end of the first 30-day extension period, the
head of the Human Resources Department determines that, due to matters beyond
his or her control, a decision cannot be rendered within that extension period,
the period for making the determination may be extended for up to an additional
thirty (30) days. The head of the Human Resources Department shall notify the
claimant, prior to the expiration of any applicable extension period, of the
circumstances requiring an extension and the date by which he or she expects to
render a decision. In the case of any extension described in this paragraph, the
notice of extension shall specifically explain the standards on which
entitlement to a benefit is based, the unresolved issues that prevent a decision
on the claim and the additional information needed to resolve those issues, and
the claimant shall be afforded forty-five (45) days within which to provide the
specified information. If information is requested, the period for making the
benefit determination shall be tolled from the date on which notification of an
extension is sent to the claimant until the date on which the claimant responds
to the request for information.
Within one hundred eighty (180) days after receiving the written
notice of an adverse disposition of the claim, the claimant may request in
writing, and shall be entitled to, a review of the benefit determination. In
deciding an appeal of any adverse benefit determination that is based in whole
or in part on a medical judgment, the Committee shall consult with a
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health care professional who has appropriate training and experience in the
field of medicine involved in the medical judgment. Such health care
professional shall be an individual who is neither an individual who was
consulted in connection with the adverse benefit determination that is the
subject of the appeal nor the subordinate of any such individual. The medical or
vocational experts whose advice was obtained on behalf of the Committee in
connection with the claimant's adverse benefit determination will be identified
to the claimant. If the claimant does not request a review within one hundred
eighty (180) days after receiving written notice of the original disposition of
the claim, the claimant shall be deemed to have accepted the original written
disposition.
A decision on review shall be rendered in writing by the Committee
within a reasonable period of time, but ordinarily not later than forty-five
(45) days after receipt of the claimant's request for review by the Committee,
unless the Committee determines that special circumstances require an extension
of time for processing the claim. If the Committee determines that an extension
of time for processing is required, written notice of the extension shall be
furnished to the claimant prior to the termination of the initial forty-five
(45) period. In no event shall such extension exceed a period of forty-five (45)
days from the end of the initial period. The extension notice shall indicate the
special circumstances requiring an extension of time and the date by which the
Committee expects to render the determination on review. In the event the
extension is due to a claimant's failure to submit information necessary to
decide the claim, the claimant shall be afforded forty-five (45) days within
which to provide the specified information, and the period for making the
benefit determination on review shall be tolled from the date on which
notification of the extension is sent to the claimant until the date on which
the claimant responds to the request for additional information.
In the case of an adverse benefit determination on review, in addition
to the information described above, the notice shall state: "You and your Plan
may have other voluntary alternative dispute resolution options, such as
mediation. One way to find out what may be available is to contact your local
U.S. Department of Labor Office and your State insurance regulatory agency."
8.7 The Company shall have the right to provide any benefit hereunder
through insurance or other arrangements which may be more tax efficient or
reduce the expense associated with provision of the benefits hereunder.
8.8 If a Participant shall not have designated a beneficiary to receive
any benefit payable hereunder, or the beneficiary predeceases the Participant,
the Participant's estate shall be deemed to be his designated beneficiary.
8.9 This Plan is established under and will be construed according to the
laws of the State of Delaware.
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IN WITNESS WHEREOF, Premcor Inc. has caused this Plan to be executed this
31st day of MAY, 2002.
PREMCOR INC.
By /s/ James R. Voss
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Vice President
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EXHIBIT A
Thomas D. O'Malley - Chairman and Chief Executive Officer
William Hantke - Executive Vice President and Chief Financial Officer
Henry M. Kuchta - Executive Vice President and Chief Operating Officer
Donald F. Lucey - Vice President, Commercial Operations
Jeffry N. Quinn - Executive Vice President, Secretary, and General Counsel
Joseph D. Watson - Senior Vice President and Chief Administrative Officer