EXHIBIT 10.42
PIONEER NATURAL RESOURCES USA, INC.
MATCHING PLAN
(As Amended and Restated Effective as of October 1, 1997)
PIONEER NATURAL RESOURCES USA, INC.
MATCHING PLAN
(As Amended and Restated Effective as of October 1, 1997)
TABLE OF CONTENTS
Page
PREAMBLE................................................................... 1
ARTICLE I. DEFINITIONS AND CONSTRUCTION................................. 1
Section 1.1 Definitions..................................... 1
Section 1.2 Construction.................................... 7
ARTICLE II. ELIGIBILITY.................................................. 7
Section 2.1 Eligibility and Participation................... 7
ARTICLE III. CONTRIBUTIONS, LIMITATIONS AND FORFEITURES................... 7
Section 3.1 Matching Contributions.......................... 7
Section 3.2 Crediting of Contributions...................... 8
Section 3.3 Return of Matching Contributions................ 8
Section 3.4 Application and Allocation of Forfeitures....... 8
Section 3.5 Rollover Contributions.......................... 8
Section 3.6 Limitations on Contributions.................... 8
ARTICLE IV. TRUST FUND................................................... 11
Section 4.1 Trust and Trustee............................... 11
Section 4.2 Trust Investment Options........................ 12
ARTICLE V. VESTING...................................................... 12
Section 5.1 Fully Vested Accounts........................... 12
Section 5.2 Vesting of Matching Account..................... 12
ARTICLE VI. DISTRIBUTIONS................................................ 13
Section 6.1 Time and Form of Distribution................... 13
Section 6.2 Distribution of Retirement Benefit.............. 14
Section 6.3 Distribution of Death Benefit................... 15
Section 6.4 Distribution of Separation from Employment
Benefit.............................................. 16
Section 6.5 Forfeitures..................................... 16
Section 6.6 Distributions to Minors and Persons Under Legal
Disability.......................................... 18
(i)
Section 6.7 Benefits Payable to Missing Participant or
Beneficiary......................................... 19
Section 6.8 Transfer of Eligible Rollover Distribution...... 19
Section 6.9 Qualified Domestic Relations Orders............. 19
ARTICLE VII. PLAN ADMINISTRATION.......................................... 20
Section 7.1 Matching Plan Committee......................... 20
Section 7.2 Powers, Duties and Liabilities of the Committee. 21
Section 7.3 Rules, Records and Reports...................... 21
Section 7.4 Administration Expenses and Taxes............... 21
ARTICLE VIII. AMENDMENT AND TERMINATION.................................... 22
Section 8.1 Amendment....................................... 22
Section 8.2 Termination..................................... 22
ARTICLE IX. TOP-HEAVY PROVISIONS......................................... 22
Section 9.1 Top-Heavy Definitions........................... 22
Section 9.2 Minimum Contribution Requirement................ 24
ARTICLE X. MISCELLANEOUS GENERAL PROVISIONS............................. 24
Section 10.1 Spendthrift Provision.......................... 24
Section 10.2 Claims Procedure............................... 25
Section 10.3 Maximum Contribution Limitation................ 25
Section 10.4 Employment Noncontractual...................... 26
Section 10.5 Limitations on Responsibility.................. 26
Section 10.6 Merger or Consolidation........................ 26
Section 10.7 Applicable Law................................. 26
(ii)
PIONEER NATURAL RESOURCES USA, INC.
MATCHING PLAN
(As Amended and Restated Effective as of October 1, 1997)
THIS MATCHING PLAN, a money purchase pension plan, made and executed by
PIONEER NATURAL RESOURCES USA, INC., a Delaware corporation (the "Company"),
W I T N E S S E T H T H A T :
WHEREAS, the Company has heretofore established a qualified money
purchase pension plan and trust known as the Pioneer Natural Resources USA, Inc.
Matching Plan (formerly known as the Mesa Employees Premium Plan and Trust
Agreement) for the benefit of certain of its employees; and
WHEREAS, the Company now desires to continue said money purchase
pension plan and trust without interruption by amending and restating the plan
and trust document in its entirety to separate the plan and trust provisions
into two separate documents, update the plan language, incorporate prior
amendments and make certain other changes;
NOW, THEREFORE, in consideration of the premises and pursuant to
Section 17.4 thereof, the Company hereby amends and restates the plan provisions
of said plan and trust as the Pioneer Natural Resources USA, Inc. Matching Plan,
as amended and restated effective as of October 1, 1997, to read as follows:
ARTICLE I.
DEFINITIONS AND CONSTRUCTION
Section 1.1 Definitions. Unless the context clearly indicates
otherwise, when used in this Plan:
(a) "Account" means a Participant's Matching Account, Mesa
Premium Account and/or Rollover Account, as the context requires.
(b) "Affiliated Company" means any corporation or organization,
other than an Employer, which is a member of a controlled group of
corporations (within the meaning of Section 414(b) of the Code) or of
an affiliated service group (within the meaning of Section 414(m) of
the Code) with respect to which an Employer is also a member, and
any other incorporated or unincorporated trade or business which
along with an Employer is under common control (within the meaning of
the regulations from time to time promulgated by the Secretary of the
Treasury pursuant to Section 414(c) of the Code); provided, however,
that for the purposes of Section 10.3 of the Plan, Section 414 (b) and
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(c) of the Code shall be applied as modified by Section 415(h) of the
Code.
(c) "Code" means the Internal Revenue Code of 1986, as amended.
(d) "Committee" means the Matching Plan Committee appointed by
the Board of Directors of the Company to administer the Plan.
(e) "Company" means Pioneer Natural Resources USA, Inc., a
Delaware corporation, and any successor thereto.
(f) "Compensation" means the sum of (i) the Limitation
Compensation paid by an Employer to an Employee, (ii) any Total Pre-Tax
Contributions made by an Employer to the Pioneer 401(k) Plan on behalf
of such Employee, and (iii) any salary reduction amounts elected by
such Employee for the purchase of benefits pursuant to a cafeteria plan
(within the meaning of Section 125(d) of the Code) maintained by an
Employer; provided, however, that except for purposes of determining
whether an Employee is a Highly Compensated Employee or a Key Employee
(as defined in Section 9.1(c)), the Compensation of an Employee taken
into account under the Plan for any Plan Year shall not exceed $150,000
(as adjusted to take into account any cost-of-living increases
authorized pursuant to Section 401(a)(17)(B) of the Code). Solely for
purposes of this definition, compensation from an employer
participating in the Mesa Premium Plan prior to October 1, 1997, shall
be deemed to be Compensation.
(g) "Covered Employee" means any Employee other than (i) a
member of a collective bargaining unit with which an Employer
negotiates and with respect to whom no coverage under this Plan has
been provided by collective bargaining agreement, (ii) a nonresident
alien with respect to the United States who receives no earned income
from an Employer which constitutes income from sources within the
United States, (iii) a temporary or seasonal Employee as determined in
accordance with the Employer's normal personnel policies, (iv) an
individual performing services for an Employer whom the Employer treats
as an independent contractor for employment tax purposes, or (v) an
individual who is treated as a leased employee by an Employer.
(h) "Employee" means any individual employed by an Employer.
(i) "Employer" shall include the Company and other incorporated
or unincorporated trade or business which may subsequently adopt this
Plan with the consent of the Board of Directors of the Company.
(j) "Employment Date" means the date an Employee first performs
an Hour of Service.
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(k) "Highly Compensated Employee" means for a Plan Year
commencing after December 31, 1996:
(1) any Employee who during such Plan Year or during the
preceding Plan Year was at any time a 5 percent owner (as defined
in Section 416(i)(1) of the Code) of an Employer or Affiliated
Company; or
(2) any Employee who during the preceding Plan Year
received Compensation greater than $80,000 (as adjusted to take
into account any cost-of-living increases authorized pursuant to
Section 414(q)(1) of the Code) and, if the Company so elects, who
is in the group consisting of the top 20% (when ranked on the
basis of Compensation received during such preceding year) of all
Employees, except those excluded pursuant to Section 414(q)(5)
of the Code.
Solely for purposes of this definition, (i) an employee of either an
Affiliated Company or an employer participating in the Mesa Premium
Plan shall be deemed to be an Employee, (ii) compensation received from
either an Affiliated Company or an employer participating in the Mesa
Premium Plan shall be deemed to be Compensation, and (iii) a
nonresident alien who receives no earned income from an Employer or
Affiliated Company which constitutes income from sources within the
United States shall not be considered an Employee. For the Plan Year
ending December 31, 1996, Highly Compensated Employees shall be
determined pursuant to the provisions of the Retirement Savings Plan
for Employees of Parker & Parsley as in effect for such Plan Year.
(l) "Hour of Service" means an hour for which an Employee is
directly or indirectly compensated or entitled to compensation
(including back pay, regardless of mitigation of damages) by an
Employer for the performance of duties for an Employer or for reasons
(such as vacation, sickness or disability) other than the performance
of duties for an Employer. An Employee will be credited with eight
Hours of Service per day for any customary work period during which
such Employee is on leave of absence authorized by his or her Employer.
Leaves of absence shall be granted by an Employer to its Employees on a
uniform, nondiscriminatory basis. In no event shall more than 501 Hours
of Service be credited on account of any single continuous period
during which the individual performs no duties. An Employee's Hours of
Service shall be credited to the appropriate Plan Years or eligibility
computation period determined in accordance with the provisions of
Section 2530.200b-2(b) and (c) of the Department of Labor Regulations,
which are incorporated herein by this reference. In determining Hours
of Service for the purposes of this Plan, periods of employment by an
Affiliated Company and periods of employment as a leased employee
(within the meaning of Section 414(n) of the Code) of an Employer or
Affiliated Company shall be deemed to be periods of employment by an
Employer.
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(m) "Investment Fund" means any fund authorized for the
investment of Trust assets pursuant to Section 4.2.
(n) "Limitation Compensation" means wages within the meaning of
Section 3401(a) of the Code and all other payments of remuneration to
an Employee by an Employer (in the course of the Employer's trade or
business) for which the Employer is required to furnish the Employee a
written statement under Sections 6041(d), 6051(a)(3) and 6052 of the
Code, but determined without regard to any rules that limit the
remuneration included in wages based on the nature or location of the
employment or the services performed (such as the exception for
agricultural labor in Section 3401(a)(2) of the Code); provided,
however, that the Limitation Compensation of an Employee taken into
account under the Plan for any Plan Year shall not exceed $150,000 (as
adjusted to take into account any cost-of-living increases authorized
pursuant to Section 401(a)(17)(B) of the Code).
(o) "Matching Account" means the account established and
maintained under this Plan by the Committee to record a Participant's
interest under this Plan attributable to any Matching Contributions
made by an Employer for such Participant.
(p) "Matching Contribution" means a contribution made by an
Employer to this Plan for a Participant pursuant to Section 3.1.
(q) "Mesa Premium Account" means the account established and
maintained under this Plan by the Committee to record a Participant's
interest under this Plan attributable to Employer contributions made
for such Participant pursuant to the provisions of the Mesa Premium
Plan as in effect on September 30, 1997.
(r) "Mesa Premium Plan" means the Mesa Employees Premium Plan
and Trust Agreement, as in effect from time to time prior to October 1,
1997.
(s) "Non-Highly Compensated Employee" means for a Plan Year any
Employee who is not a Highly Compensated Employee for such Plan Year.
(t) The "Normal Retirement Date" of a Participant means the day
such Participant attains the age of 65 years.
(u) "One Year Break in Service" means a 12 consecutive month
Period of Severance during which an Employee fails to complete a single
Hour of Service.
(v) "Participant" means any individual who was a participant in
the Mesa Premium Plan or any individual meeting the eligibility
requirements of Article II, and whose Vested Interest under this Plan
has not been fully distributed.
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(w) "Period of Service" means, for purposes of determining a
Participant's Vested Interest in his or her Matching Account, the sum,
rounded downward to the nearest whole year, of each period of time
commencing with an Employee's Employment Date or Reemployment Date and
ending on the first date thereafter that a Period of Severance begins
(except as provided in subsection (x) of this Section in the case of an
Employee's maternity or paternity leave of absence). Included in such
sum to be credited to an Employee shall be each period of time during
which the Employee is on an authorized leave of absence for reasons of
vacation, sickness, layoff or another occasion designated and applied
by an Employer or Affiliated Company on a nondiscriminatory basis, but
in no event exceeding one year in length. A Period of Service also
includes any Period of Severance of less than 12 consecutive months. If
an Employee who has no vested right to any amount credited to his or
her Matching Account incurs a One Year Break in Service, such Employee
shall forfeit his or her prior Period of Service unless he or she
completes an additional one-year Period of Service before the number of
his or her consecutive One Year Breaks in Service equals five.
(x) "Period of Severance" means a period of time commencing with
the date an Employee ceases to be employed by an Employer or
Affiliated Company for reasons of Retirement, Permanent Disability,
death, being discharged, or voluntarily ceasing employment, or with the
first anniversary of the date of his or her absence for any other
reason, and ending with the date such Employee resumes employment with
an Employer or Affiliated Company; provided, however, that solely for
purposes of determining whether an Employee incurs a One Year Break in
Service, the Period of Severance of an Employee who is absent from work
due to the pregnancy of the Employee, the birth of a child of the
Employee, the placement of a child with the Employee in connection with
the adoption of such child by such Employee, or caring for such child
for a period beginning immediately following such birth or placement
shall not commence until the second anniversary of the first date of
such absence and the period between the first and second anniversaries
of the first date of such absence shall be considered neither a Period
of Service nor a Period of Severance.
(y) "Permanent Disability" means the total and permanent
incapacity of a Participant to perform the usual duties of his or her
employment with an Employer or Affiliated Company as determined by the
Committee. Such incapacity shall be deemed to exist when certified by a
physician acceptable to the Committee.
(z) "Pioneer 401(k) Plan" means the Pioneer Natural Resources
USA, Inc. 401(k) Plan, as in effect from time to time.
(aa) "Pioneer Pre-Tax Contributions" means Pre-Tax Contributions
made by an Employer to the Pioneer 401(k) Plan on behalf of a
Participant.
5
(bb) "Plan" means this Pioneer Natural Resources USA, Inc.
Matching Plan, amended and restated effective as of October 1, 1997,
and as from time to time in effect thereafter.
(cc) "Plan Year" means the calendar year.
(dd) "Qualified Joint and Survivor Annuity" means an annuity
which is payable for the life of the Participant with a survivor
annuity payable for the life of his or her spouse equal to 50% of the
amount of the annuity payable during the life of the Participant;
provided, however, that in the case of a Participant who is not
married, a Qualified Joint and Survivor Annuity means an annuity which
is payable for the life of the Participant. "Alternate Qualified Joint
and Survivor Annuity" means an annuity which is payable for the life of
the Participant with a survivor annuity payable for the life of his or
her spouse equal to 75% or 100% of the amount of the annuity payable
during the life of the Participant.
(ee) "Qualified Preretirement Survivor Annuity" means an annuity
which is payable for the life of the Participant's surviving spouse.
(ff) "Reemployment Date" means the date an Employee first
performs an Hour of Service following a Period of Severance.
(gg) "Retirement" means the termination of a Participant's
employment with an Employer or Affiliated Company on or after his or
her Normal Retirement Date for any reason other than death or transfer
to the employment of another Employer or Affiliated Company.
(hh) "Rollover Account" means the account established and
maintained under this Plan by the Committee to record a Participant's
interest under this Plan attributable to (i) Rollover Property
contributed by such Participant to this Plan pursuant to Section 3.5
and (i) any amounts credited to his or her Rollover Account under the
Mesa Premium Plan as in effect on September 30, 1997.
(ii) "Rollover Property" means property the value of which would
be excluded from the gross income of the transferor under Section
402(c), 403(a)(4) or 408(d)(3) of the Code if transferred to the Plan.
(jj) "Trust" means the trust fund established pursuant to Section
4.1.
(kk) "Trustee" means the individual or corporate trustee or
trustees from time to time appointed and acting as trustee or trustees
of the Trust established pursuant to the Plan.
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(ll) "Valuation Date" means each business day.
(mm) The "Vested Interest" of a Participant means the then
vested portion of the amount credited to the Accounts of such
Participant at the particular point in time in question.
Section 1.2 Construction. The titles to the Articles and the headings
of the Sections in this Plan are placed herein for convenience of reference only
and in case of any conflict the text of this instrument, rather than such titles
or headings, shall control. Whenever a noun or pronoun is used in this Plan in
plural form and there be only one person or entity within the scope of the word
so used, or in singular form and there be more than one person or entity within
the scope of the word so used, such noun or pronoun shall have a plural or
singular meaning as appropriate under the circumstance.
ARTICLE II.
ELIGIBILITY AND PARTICIPATION
Section 2.1 Eligibility and Participation. Each Covered Employee who
is a participant in the Mesa Premium Plan on September 30, 1997 shall continue
to be a Participant in the Plan as of October 1, 1997. Each other Covered
Employee shall become a Participant in this Plan on the first day of the first
pay period in the calendar month next following his or her employment as a
Covered Employee. Any Participant who ceases to be a Covered Employee shall
thereupon cease to participate in the Plan; provided, however, that if any such
Participant is thereafter reemployed as a Covered Employee, he or she shall
resume participation in the Plan as of the date of such reemployment.
ARTICLE III.
CONTRIBUTIONS, LIMITATIONS AND FORFEITURES
Section 3.1 Matching Contributions. For each pay period an Employer
shall make to the Plan for each Participant in its employ and allocate to such
Participant's Matching Account a contribution equal to 200 percent of the
Pioneer Pre-Tax Contributions made by the Employer on such Participant's behalf
during such pay period which are not in excess of five percent of such
Participant's Basic Compensation (as defined in the Pioneer 401(k) Plan) for
such pay period. The Matching Contributions to be made to the Plan for a pay
period shall be paid to the Trustee as soon as practicable, but no later than 30
days after the end of the month in which such pay period ends.
7
Section 3.2 Crediting of Contributions. The Committee shall establish
and maintain a Matching Account for each Participant. All Matching Contributions
made for a Participant shall be credited to such Participant's Matching Account.
Section 3.3 Return of Matching Contributions. Contributions made to
this Plan are conditioned upon being currently deductible under Section 404 of
the Code. Any provision of this Plan to the contrary notwithstanding, upon an
Employer's request, any such contribution or portion thereof made to this Plan
by such Employer which (i) was made under a mistake of fact which is
subsequently discovered or (ii) is disallowed as a deduction under Section 404
of the Code, shall be returned to such Employer to the extent not previously
distributed to Participants or their beneficiaries; provided, however, that the
amounts returnable to an Employer pursuant to this Section shall be reduced by
any Trust losses allocable thereto and shall be returned to such Employer only
if such return is made within one year after the mistaken payment of the
contribution or the date of the disallowance of the deduction, as the case may
be. Except as provided in this Section, no contribution made by an Employer
pursuant to this Plan shall ever revert to or be recoverable by any Employer.
Section 3.4 Application and Allocation of Forfeitures. All amounts
forfeited during a Plan Year shall first be applied to restore any forfeited
Matching Account required to be restored pursuant to Sections 6.5 and 6.7, and
any forfeitures in excess of the amount needed to restore any such Account shall
be used to reduce the amount of the earliest subsequent Matching Contributions
the Employer otherwise would be required to make to the Plan.
Section 3.5 Rollover Contributions. With the consent of the Committee,
any Covered Employee (regardless of whether he or she is a Participant) may
contribute Rollover Property in the form of cash to the Plan. Each contribution
of Rollover Property shall be credited to a separate Rollover Account to be
established and maintained for the benefit of the contributing Employee. An
Employee who is not a Participant, but for whom a Rollover Account is being
maintained, shall be accorded all of the rights and privileges of a Participant
under the Plan except that no contributions (other than contributions of
Rollover Property) shall be made for such Employee until he or she meets the
eligibility and participation requirements of Section 2.1.
Section 3.6 Limitations on Contributions.
(a) Any provision of this Plan to the contrary notwithstanding,
if for any Plan Year the contribution percentage for the group of
Highly Compensated Employees eligible to receive an allocation of
Matching Contributions for such Plan Year fails to satisfy one of the
following tests:
(1) the contribution percentage for said group of Highly
Compensated Employees is not more than 1.25 times the
contribution percentage for the preceding Plan Year for all
8
Non-Highly Compensated Employees eligible for the preceding Plan
Year to receive an allocation of Matching Contributions, or
(2) the excess of the contribution percentage for said group
of Highly Compensated Employees over the contribution percentage
for the preceding Plan for all Non-Highly Compensated Employees
eligible for the preceding Plan Year to receive an allocation of
Matching Contributions is not more than two percentage points,
and the contribution percentage for said group of Highly
Compensated Employees is not more than two times the contribution
percentage for the preceding Plan Year for all Non-Highly
Compensated Employees eligible for the preceding Plan Year to
receive an allocation of Matching Contributions,
then the contribution percentage for Participants who are members of
said group of Highly Compensated Employees shall be reduced by reducing
the Matching Contributions made for such Plan Year for the Highly
Compensated Employees with the largest individual contribution
percentages to the largest uniform contribution percentage (commencing
with the Highly Compensated Employee with the largest contribution
percentage and reducing his or her contribution percentage to the
extent necessary to satisfy one of the above tests or to lower such
contribution percentage to the contribution percentage of the Highly
Compensated Employee with the next highest contribution percentage, and
repeating this process as necessary) that permits the contribution
percentage for said group of Highly Compensated Employees to satisfy
one of said tests. For purposes of this subsection (a), the term
"contribution percentage" for a specified group of Employees for a Plan
Year means the average of the ratios (calculated separately for each
Employee in such group and after application of the reduction and
forfeiture provisions of Sections 3.4(a) and (b) of the Pioneer 401(k)
Plan) of (i) the aggregate amount of Matching Contributions made to the
Plan for each such Employee for that year and, at the election of the
Committee, all or a portion of the Total Pre-Tax Contributions made on
behalf of such Employee to the Pioneer 401(k) Plan for that year which
are not in excess of the amount of such contributions that are
permitted to be taken into account under Sections 401(k) and (m) of the
Code and the regulations thereunder, to (ii) the amount of such
Employee's Compensation for that year or, in the Committee's
discretion, only for such portion of that year during which the
Employee was eligible to participate in the Plan. Any provision of this
Section to the contrary notwithstanding, for the Plan Year ending
December 31, 1997, the Company may elect, in accordance with Section
401(m) of the Code and other applicable authority, to use data for the
current Plan Year rather than the preceding Plan Year in computing the
contribution percentage of Non-Highly Compensated Employees. If two or
more plans to which matching contributions or employee after-tax
contributions are made are considered as one plan for purposes of
Section 410(b) of the Code (other than for purposes of the average
benefit percentage test), such plans shall be treated as one plan for
purposes of determining the contribution percentages for this
9
subsection (a). If a Highly Compensated Employee is a participant in
two or more plans to which matching contributions or employee after-tax
contributions are made, then for purposes of determining the
contribution ratio of such Employee, all such plans (other than those
that may not be permissively aggregated) shall be treated as one plan.
(b) The aggregate amount of any Matching Contributions made for
Participants which cannot be credited to the Matching Accounts for a
Plan Year because of the limitation contained in subsection (a) of
this Section (along with any income allocable to such contributions for
such Plan Year, but not for the gap period following such Plan Year)
shall be forfeited if forfeitable, but if not forfeitable, distributed
to such Participants no later than 2 1/2 months after the end of such
year on the basis of the amount of Matching Contributions made for each
such Participant (commencing with the Highly Compensated Employee with
the largest amount of Matching Contributions for such Plan Year and
reducing his or her Matching Contributions to the extent necessary or
to lower such amount to the amount of Matching Contributions of the
Highly Compensated Employee with the next highest amount of Matching
Contributions, and repeating this process as necessary). The income
allocable to any such excess aggregate contributions for a Participant
for a Plan Year shall be determined by multiplying the amount of income
allocable to such Participant's Matching Account for such year by a
fraction, the numerator of which is the amount of the excess aggregate
contributions for such year and the denominator of which is the sum of
the amount credited to such Participant's Matching Account as of the
beginning of such year plus the amount of the Matching Contributions
made for such Participant for such year.
(c) Any provision of this Plan to the contrary notwithstanding,
in addition to the above limitations of this Section, the sum of the
actual deferral percentage and the contribution percentage for the
group of Highly Compensated Employees as determined pursuant to and
after any reduction in such percentages required by subsection (a) of
this Section and Section 3.4(a) of the Pioneer 401(k) Plan shall not
exceed the "aggregate limit." The "aggregate limit" shall be equal
to the greater of:
(1) the sum of: (i) 1.25 times the greater of the
relevant actual deferral percentage or the relevant contribution
percentage, and (ii) two percentage points plus the lesser of the
relevant actual deferral percentage or the relevant contribution
percentage, provided that the amount in this clause (ii) shall
not exceed two times the lesser of the relevant actual deferral
percentage or the relevant contribution percentage; or
(2) the sum of: (i) 1.25 times the lesser of the
relevant actual deferral percentage or the relevant contribution
percentage, and (ii) two percentage points plus the greater of
the relevant actual deferral percentage or the relevant
contribution percentage, provided that the amount in this clause
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(ii) shall not exceed two times the greater of the relevant
actual deferral percentage or the relevant contribution
percentage.
The "relevant actual deferral percentage" means the actual deferral
percentage determined for the preceding Plan Year pursuant to Section
3.4(a) of the Pioneer 401(k) Plan for the group of Non-Highly
Compensated Employees eligible during the preceding Plan Year to have
Pre-Tax Contributions or Pre-Tax Bonus Contributions made to the
Pioneer 401(k) Plan. The "relevant contribution percentage" means the
contribution percentage determined for the preceding Plan Year pursuant
to subsection (a) of this Section for the group of Non-Highly
Compensated Employees eligible for the preceding Plan Year to receive
an allocation of Matching Contributions. In the event that the
aggregate limit is exceeded in any year, then the actual deferral
percentage under the Pioneer 401(k) Plan and/or contribution percentage
under this Plan for Participants who are members of the group of Highly
Compensated Employees shall be reduced by reducing Total Pre-Tax
Contributions to the Pioneer 401(k) Plan and/or any Matching
Contributions made for such Plan Year for or on behalf of the Highly
Compensated Employees with the largest individual actual deferral
percentages and/or contribution percentages to the largest uniform
actual deferral percentage and/or contribution percentage (proceeding
in the manner prescribed in Section 3.4(a) of the Pioneer 401(k) Plan
and subsection (a) of this Section) that permits the sum of the actual
deferral percentage and contribution percentage for said group of
Highly Compensated Employees to satisfy the above restrictions. The
provisions of subsection (b) of this Section shall apply with respect
to any Matching Contributions which cannot be credited to Matching
Accounts under this Plan because of the limitation contained in this
subsection (c).
(d) If any portion of a Pioneer Pre-Tax Contribution is
distributed to a Participant pursuant to Section 3.4(b) of the Pioneer
401(k) Plan, any portion of a Matching Contribution (along with any
income allocable thereto) made to this Plan for such Participant that
corresponds to such distributed Pioneer Pre-Tax Contribution shall be
forfeited.
ARTICLE IV.
TRUST FUND, INVESTMENT OPTIONS AND VALUATIONS
Section 4.1 Trust and Trustee. All of the contributions paid to the
Trustee pursuant to this Plan and the Mesa Premium Plan, together with the
income therefrom and the increments thereof, shall be held in trust by the
Trustee under the terms and provisions of the separate trust agreement between
the Trustee and the Company, a copy of which is attached hereto and incorporated
herein by this reference for all purposes, establishing a trust fund known as
11
the PIONEER NATURAL RESOURCES USA, INC. MATCHING TRUST for the exclusive benefit
of the Participants and their beneficiaries.
Section 4.2 Trust Investment Options. For investment purposes, the
trust fund established under the Trust shall be divided into such number and
kind of separate and distinct Investment Funds as the Committee in its absolute
discretion shall authorize from time to time. The assets of the Trust allocated
to a particular Investment Fund shall be invested by the Trustee and/or one or
more investment managers duly appointed in accordance with the provisions of the
trust agreement establishing the Trust, as the case may be, in such type of
property acceptable to the Trustee as the Trustee is directed to acquire and
hold for such Investment Fund. Upon becoming a Participant in the Plan, each
Participant shall direct, in the manner prescribed by the Committee in its
absolute discretion, that all amounts credited to his or her Accounts under the
Plan shall be invested, in percentage multiples authorized by the Committee, in
one or more of the Investment Funds. Subject to such conditions and limitations
as the Committee in its absolute discretion may prescribe from time to time for
application to all Participants on a uniform basis, a Participant may change his
or her investment direction with respect to future contributions or redirect the
investment of amounts credited to his or her Accounts, provided that notice of
such change is delivered to or in the manner directed by the Committee within
such reasonable period of time prior to the effective date thereof as the
Committee may require.
Section 4.3 Valuation and Adjustment of Accounts. As of each Valuation
Date, the Trustee shall determine the fair market value of all assets of the
Trust with the value of the assets of each Investment Fund being separately
determined. On the basis of such valuations and in accordance with such
procedures as may be specified from time to time by the Committee, the portion
of each Account invested in a particular Investment Fund shall be adjusted by
the Committee to reflect its proportionate share of the income collected and
accrued, realized and unrealized profits and losses, expenses and all other
transactions attributable to that particular Investment Fund for the valuation
period then ended. The amount of any distribution forfeiture shall be determined
on the basis of the most recent valuation preceding the date of distribution or
forfeiture, as the case may be.
ARTICLE V.
VESTING
Section 5.1 Fully Vested Accounts. The amounts credited to a
Participant's Mesa Account and Rollover Account (if any) shall be fully vested
at all times.
Section 5.2 Vesting of Matching Account. The amounts credited to the
Matching Account of a Participant shall become fully vested upon the occurrence
of any of the following events while the Participant is in the employ of (or on
12
authorized leave of absence from) an Employer or Affiliated Company: (i) the
completion of an Hour of Service by the Participant on or after the date he or
she attains age 60, (ii) the Participant's death, or (iii) the Participant's
Permanent Disability. Unless sooner vested pursuant to the preceding sentence,
the amounts credited to a Participant's Matching Account shall vest in
accordance with the following schedule:
Period of Service
Completed by Participant Percentage Vested
------------------------ -----------------
Less than 1 year None
1 year 25%
2 years 50%
3 years 75%
4 or more years 100%
ARTICLE VI.
DISTRIBUTIONS
Section 6.1 Time and Form of Distribution. Distribution to a
Participant or beneficiary under this Article shall be made or commence being
made no later than 60 days after the close of the Plan Year in which the latest
of the following occurs: (i) the Participant's Normal Retirement Date, (ii) the
tenth anniversary of the year in which the Participant commenced participation
in the Plan, or (iii) the Participant's separation from the employment of an
Employer for any reason other than his or her transfer to the employment of
another Employer or Affiliated Company. In addition and any provision of this
Plan to the contrary notwithstanding, in the case of a Participant who is a
five-percent owner (as defined in Section 416(i) of the Code) or at the election
of any other Participant who attains age 70 1/2 prior to January 1, 1999,
distribution to such Participant under the Plan shall be made or commence being
made no later than April 1 of the calendar year following the calendar year in
which the Participant attains age 70 1/2. Distributions that commence being made
pursuant to the preceding sentence to a Participant who has not separated from
the employment of an Employer or Affiliated Company shall be made pursuant to
Section 6.2 as if the Participant had terminated employment at such time and
shall be made in accordance with the minimum distribution requirements of
Section 401(a)(9) of the Code and the regulations thereunder; provided, however,
that if a Participant elects to waive payment in the form of a Qualified Joint
and Survivor Annuity in accordance with Section 6.2, the alternative form of
distribution shall be payment of the minimum amounts required to be distributed
pursuant to Section 401(a)(9) of the Code and the regulations thereunder, but
without recalculation of life expectancy, and with any amount remaining upon the
termination of the Participant's employment or death to be paid in accordance
with Section 6.2 or Section 6.3, whichever is applicable, but with any payments
13
adjusted or accelerated as necessary to satisfy the requirements of Section
401(a)(9) of the Code and the regulations thereunder. Subject to the provisions
of this Article requiring that distributions be made in the form of an annuity
contract, distributions shall be made in cash. Any provision of this Plan to the
contrary notwithstanding, (A) all distributions from the Plan shall be made in
accordance with Section 401(a)(9) of the Code and the regulations thereunder,
and (B) all optional forms of benefit under the Plan and the Mesa Premium Plan
that are protected benefits under Section 411(d)(6) of the Code shall continue
to be optional forms of benefit for Participants to whom such optional forms of
benefit apply notwithstanding any subsequent amendment purporting to revise or
delete any such optional form of benefit.
Section 6.2 Distribution of Retirement Benefit.
(a) Except as otherwise provided in this Section, upon the
Retirement or Permanent Disability of a Participant, the Vested
Interest of such Participant shall be distributed to such Participant
by the Trustee at the direction of the Committee in the form of a
Qualified Joint and Survivor Annuity contract to be purchased from a
company selected by the Committee and commencing in payment as soon as
practicable unless the Participant's Vested Interest does not exceed
$3,500 ($5,000 commencing January 1, 1998), in which event it will be
distributed to the Participant as soon as practicable following his or
her Retirement or Permanent Disability in the form of a single
distribution. No distribution shall be made upon the Permanent
Disability of a Participant prior to his or her Normal Retirement Date
unless such Participant consents to receive such distribution or such
Participant's Vested Interest does not exceed $3,500 ($5,000 commencing
January 1, 1998).
(b) At least 30 days but not more than 90 days prior to the date
the Qualified Joint and Survivor Annuity contract is to commence in
payment to a Participant, the Committee shall provide such Participant
with a written explanation of (i) the terms and conditions of the
Qualified Joint and Survivor Annuity, (ii) his or her right to make,
and the effect of, an election to waive the Qualified Joint and
Survivor Annuity form of benefit, (iii) the rights of his or her spouse
with respect to the receipt and waiver of the Qualified Joint and
Survivor Annuity, and (iv) the right to make, and the effect of, a
revocation of an election to waive the Qualified Joint and Survivor
Annuity.
(c) After receiving the explanation described in (b) above, the
Participant may elect at any time during the 90-day period ending on
the date the annuity contract is to commence in payment to waive the
Qualified Joint and Survivor Annuity form of benefit and also may
revoke any such election during such period. Any such election to waive
a Qualified Joint and Survivor Annuity form of benefit by a married
Participant will be effective only if the spouse of such Participant
consents in writing within the 90- day period preceding both the
election and the optional form of benefit selected by the Participant
and such consent is witnessed by a member of the Committee or a notary
public.
14
(d) Any amount payable under the Plan upon the Retirement or
Permanent Disability of a Participant who has elected to waive the
Qualified Joint and Survivor Annuity form of benefit as provided above
shall be distributed to such Participant by the Trustee at the
direction of the Committee in one of the following forms to be selected
by the Participant:
(i) by payment of the entire amount in a single distribution;
(by payment of the entire amount in monthly, quarterly, or
annual installments over a specifically designated period of
time over a period of two or more years, but not to exceed
one or a combination of the following periods: (i) the life
of the Participant, (ii) the lives of the Participant
and his or her designated beneficiary, (iii) a period
certain not extending beyond the life expectancy of the
Participant, and (iv) a period certain not extending beyond
the joint life and last survivor expectancy of the
Participant and his or her designated beneficiary, provided
that if a Participant who elects installment payments dies
prior to the distribution of the entire amount of his or her
vested interest, the remaining portion thereof shall be
distributed to his or her beneficiary or beneficiaries
(determined in accordance with Section 6.3) in a single
distribution; or
(ii) by purchase of an Alternate Qualified Joint and Survivor
Annuity contract from a company selected by the Committee;
provided, however, that the consent of the Participant's spouse as
provided above shall not be required if the Participant selects payment
in the form of an Alternate Qualified Joint and Survivor Annuity.
(e) Distributions pursuant to this Section 6.2 shall be made
or commence being made as soon as practicable but no later than 60 days
following the close of the Plan Year in which the event giving rise to
a distribution occurred.
Section 6.3 Distribution of Death Benefit.
(a) Except as otherwise provided in this Section, upon the
death of a Participant who is married, the Vested Interest of such
Participant shall be distributed by the Trustee at the direction of the
Committee to his or her surviving spouse in the form of a Qualified
Preretirement Survivor Annuity contract to be purchased from a company
selected by the Committee and commencing in payment as soon as
practicable following the Participant's death.
15
(b) The Committee shall provide each such married Participant
with a written explanation of the Qualified Preretirement Survivor
Annuity provided above, including the Participant's right to waive the
distribution of such Qualified Preretirement Survivor Annuity with the
consent of his or her spouse and to revoke any such waiver, within
whichever of the following periods ends last: (i) the period beginning
with the first day of the Plan Year in which the Participant attains
the age of 32 and ending with the close of the Plan Year preceding the
Plan Year in which the Participant attains the age of 35, (ii) the
one-year period after the individual becomes a Participant, or (iii)
the one-year period after separation from employment in the case of a
Participant who separates before attaining age 35.
(c) Each married Participant may elect at any time prior to
such Participant's death to waive the Qualified Preretirement Survivor
Annuity form of benefit provided above so that his or her entire
benefit may be paid to his or her designated beneficiary. No election
to waive the Qualified Preretirement Survivor Annuity will be effective
upon the Participant's death unless such election designates a
beneficiary that cannot be changed without spousal consent, the
Participant's surviving spouse consents in writing to such election and
such consent is witnessed by a member of the Committee or a notary
public. A married Participant may revoke any such election to waive the
Qualified Preretirement Survivor Annuity at any time prior to his or
her death.
(d) The amount payable under the Plan upon the death of a
married Participant who has elected, as provided above, to waive the
Qualified Preretirement Survivor Annuity and has designated a
beneficiary, shall be distributed to the beneficiary designated by such
Participant. Such designation shall be made in writing on a form
prescribed by the Committee and, when filed with the Committee, shall
become effective and remain in effect until changed by the Participant
by the filing of a new beneficiary designation form with the Committee.
If an unmarried Participant fails to so designate a beneficiary, or in
the event all of a Participant's designated beneficiaries are
individuals who predecease such Participant, then the Committee shall
direct the Trustee to distribute the amount payable under the Plan to
such Participant's surviving spouse, if any, but if none, to such
Participant's estate.
(e) All distributions under this Section, other than the
Qualified Preretirement Survivor Annuity provided above, shall be made
in a single distribution as soon as practicable following a
Participant's death; provided, however, that a Participant may elect
(or if the Participant does not elect, his or her designated
beneficiary may elect) that distribution be made in monthly, quarterly
or annual installments over a period of two or more years, but not to
exceed one or a combination of the following periods: (i) the life of
the Participant's designated beneficiary, or (ii) a period certain not
extending beyond the life expectancy of the Participant's designated
beneficiary.
16
(f) Distributions made pursuant to this Section 6.3 in the form
a Qualified Preretirement Survivor Annuity contract shall be made and
such contract shall provide for commencement of payment no later than
one year after the Participant's death. Distributions made pursuant
to this Section 6.3 in any other form shall be made or commence
being made as soon as practicable but no later than 90 days following
the close of the Plan Year in which the Participant's death occurs.
(g) Any provision of this Section 6.3 to the contrary
notwithstanding, the surviving spouse of any deceased Participant may
elect in writing after the Participant's death to receive the benefits
otherwise payable to such surviving spouse in one of the forms provided
in Section 6.3(e) above or in the form of a Qualified Preretirement
Survivor Annuity commencing in payment as of such later date as the
surviving spouse may elect, provided that such delayed payment
commencement date complies with the provisions of Section 401(a)(9) of
the Code and the regulations thereunder.
Section 6.4 Distribution of Separation from Employment Benefit. If a
Participant separates from the employment of an Employer or Affiliated Company
for any reason other than his or her Retirement, Permanent Disability, death or
transfer to the employment of another Employer or Affiliated Company, the
Accounts of such Participant shall be retained in trust and shall continue to be
credited with applicable earnings as provided in Section 4.3, and the Vested
Interest of such Participant shall be distributed to such Participant by the
Trustee at the direction of the Committee upon such Participant's Normal
Retirement Date by payment of the entire amount in the form of a Qualified Joint
and Survivor Annuity contract to be purchased from a company selected by the
Committee and commencing in payment as soon as practicable thereafter (or, if
the Participant dies prior to his or her Normal Retirement Date, the Vested
Interest of such Participant under the Plan shall be distributed upon his or her
death in accordance with Section 6.3); provided, however, that (i) each such
Participant shall have the right to receive an early distribution of his or her
Vested Interest under the Plan in the form of a Qualified Joint and Survivor
Annuity contract to be purchased from a company selected by the Committee and
commencing in payment as soon as practicable following such election, or upon
satisfaction of the notice and waiver requirements of Section 6.2, in any other
form provided for distributions upon Retirement pursuant to Section 6.2, and
(ii) the Committee shall require an early distribution in cash of any such
Participant's Vested Interest which does not exceed $3,500 ($5,000 commencing
January 1, 1998).
Section 6.5 Forfeitures.
(a) Unless sooner forfeited as provided below, any unvested
portion of the Matching Account of a Participant who separates from the
employment of an Employer or Affiliated Company for any reason other
than his or her Retirement, Permanent Disability, death or transfer to
the employment of another Employer or Affiliated Company shall be
forfeited upon the earlier of the date of such Participant's death or
the date such Participant incurs five consecutive One Year Breaks in
17
Service unless such Participant is reemployed by an Employer or
Affiliated Company prior to such date.
(b) If a Participant receives a distribution of his or her
Vested Interest by the end of the second Plan Year following the year
in which his or her separation from employment occurred under Section
6.4, any portion of such Participant's Matching Account which is not
vested at the time of such distribution shall be forfeited at such
time. If a Participant who separates from the employment of an Employer
or Affiliated Company for any reason other than his or her Retirement,
Permanent Disability, death or transfer to the employment of another
Employer or Affiliated Company, is not entitled to receive any
distribution from the Plan due to the fact that such Participant has no
Vested Interest, such Participant shall be deemed to have received a
distribution from the Plan of his or her entire Vested Interest under
the Plan and any amount credited to such Participant's Matching Account
shall be forfeited at the time of such separation from employment. If a
Participant any portion of whose Matching Account is forfeited pursuant
to this subsection (b) is reemployed as a Covered Employee prior to
incurring five consecutive One Year Breaks in Service, the amount so
forfeited shall be restored to such individual's Matching Account out
of current-year forfeitures or, if such forfeitures are insufficient,
by an additional Employer contribution.
(c) If a Participant who has not yet incurred five consecutive
One Year Breaks in Service receives a distribution under Section 6.4
after the end of the second Plan Year following the year in which his
or her separation from employment occurred, any portion of such
Participant's Matching Account which is not vested at the time of such
distribution shall be retained in such Account and shall be forfeited
upon the earlier of the date of such Participant's death or the date
such Participant incurs five consecutive One Year Breaks in Service
unless such Participant is reemployed by an Employer or Affiliated
Company prior to such date. If a Participant receives a distribution
from the Plan after the end of the second Plan Year following the year
in which his or her separation from employment occurred and is
reemployed by an Employer or Affiliated Company prior to incurring five
consecutive One Year Breaks in Service, then the unvested balance in
his or her Matching Account shall be transferred to a segregated
account for such Participant and the amount that the Participant is
entitled to receive from such segregated account as of any later date
shall be an amount equal to X, which amount shall be determined in
accordance with the following formula: X = P (AB + D) - D, where P is
the Participant's vested percentage at such later date, AB is the
amount in his or her segregated account at such later date, and D is
the amount distributed to the Participant in connection with his or her
earlier separation from employment.
Section 6.6 Distributions to Minors and Persons Under Legal
Disability. If any distribution under the Plan becomes payable to a minor or
18
other person under a legal disability, such distribution shall be made to the
duly appointed guardian or other legal representative of the estate of such
minor or person under legal disability.
Section 6.7 Benefits Payable to Missing Participant or Beneficiary. If
the Committee cannot locate a Participant or beneficiary entitled to a
distribution under this Plan within a period of three years after such
Participant or beneficiary becomes entitled to the distribution, the amounts
credited to the Accounts of such Participant or beneficiary shall be forfeited;
provided, however, that if a claim for any such forfeited amounts is
subsequently made by any person entitled to the distribution, such forfeited
amounts shall be restored (without adjustment for earnings or appreciation) out
of current-year forfeitures, or if such forfeitures are insufficient, by an
additional Employer contribution.
Section 6.8 Transfer of Eligible Rollover Distribution. If a
Participant is entitled to receive an eligible rollover distribution (as defined
in Section 402(c) of the Code and the regulations thereunder) from the Plan,
such Participant may elect to have the Committee direct the Trustee to transfer
the entire amount of such distribution directly to any of the following
specified by such Participant: an individual retirement account described in
Section 408(a) of the Code, an individual retirement annuity described in
Section 408(b) of the Code (other than an endowment contract), a defined
contribution plan qualified under Section 401(a) of the Code the terms of which
permit rollover contributions or an annuity plan described in Section 403(a) of
the Code. If the surviving spouse of a deceased Participant is entitled to
receive an eligible rollover distribution from the Plan, such surviving spouse
may elect to have the Committee direct the Trustee to transfer the entire amount
of such distribution directly to either an individual retirement account
described in Section 408(a) of the Code or an individual retirement annuity
described in Section 408(b) of the Code (other than an endowment contract)
specified by such surviving spouse. If an alternate payee under a qualified
domestic relations order (as defined in Section 414(p) of the Code) is the
spouse or former spouse of the Participant specified in the qualified domestic
relations order, this Section shall apply to such alternate payee as if the
alternate payee were a Participant. A distributee of an eligible rollover
distribution who is entitled to make an election under this Section may specify
that some portion less than the entire amount of such distribution be
transferred in accordance with this Section.
Section 6.9 Qualified Domestic Relations Orders. Any provision of
this Plan to the contrary notwithstanding:
(a) The Committee shall establish and maintain for each
alternate payee named with respect to a Participant under a domestic
relations order which is determined by the Committee to be a qualified
domestic relations order (as defined in Section 414(p) of the Code)
such separate Accounts as the Committee may deem to be necessary or
appropriate to reflect such alternate payee's interest in the Accounts
of such Participant. Such alternate payee's Accounts shall be credited
with the alternate payee's interest in the Participant's Accounts as
19
determined under such qualified domestic relations order. The alternate
payee may change investment direction with respect to his or her
Account balances in accordance with Section 4.2 in the same manner as
the Participant.
(b) Except to the extent otherwise provided in the qualified
domestic relations order naming an alternate payee with respect to a
Participant, (i) the alternate payee may designate a beneficiary on a
form prescribed by and filed with the Committee, (ii) if no such
beneficiary is validly designated or if the designated beneficiary is a
person who predeceases the alternate payee, the beneficiary of the
alternate payee shall be the alternate payee's estate, and (iii) the
beneficiary of the alternate payee shall be accorded under the Plan all
of the rights and privileges of the beneficiary of a Participant.
(c) An alternate payee named with respect to a Participant shall
be entitled to receive a distribution from the Plan in accordance with
the qualified domestic relations order naming such alternate payee.
Such distribution may be made only in a form provided under the Plan
and shall include only such amounts as are vested. If a qualified
domestic relations order so provides, a lump sum distribution of the
total vested amount credited to the alternate payee's Accounts may be
made to the alternate payee at any time prior to the date the
Participant named in such qualified domestic relations order attains
his or her earliest retirement age (as defined in Section 414(p)(4)(B)
of the Code).
(d) If a portion of any unvested amount credited to the
Matching Account of a Participant named in the qualified domestic
relations order is credited to the Matching Account of the alternate
payee named in such qualified domestic relations order, the portion
credited to such Account of the alternate payee shall vest and/or be
forfeited at the same time and in the same manner as such Account of
the Participant.
ARTICLE VII.
PLAN ADMINISTRATION
Section 7.1 Matching Plan Committee. The plan administrator of the
Plan shall be a Matching Plan Committee composed of at least three individuals
appointed by the Board of Directors of the Company. Each member of the Committee
so appointed shall serve in such office until his or her death, resignation or
removal by the Board of Directors of the Company. The Board of Directors of the
Company may remove any member of the Committee at any time by giving written
notice thereof to the members of the Committee. Vacancies shall likewise be
filled from time to time by the Board of Directors of the Company. The members
of the Committee shall receive no remuneration from the Plan for their services
as Committee members.
20
Section 7.2 Powers, Duties and Liabilities of the Committee. The
Committee shall have discretionary and final authority to interpret and
implement the provisions of the Plan, including without limitation authority to
determine eligibility for benefits under the Plan, and shall perform all of the
duties and exercise all of the powers and discretion granted to it under the
terms of the Plan. The Committee shall act by a majority of its members at the
time in office and such action may be taken either by a vote at a meeting or in
writing without a meeting. The Committee may by such majority action authorize
any one or more of its members to execute any document or documents on behalf of
the Committee, in which event the Committee shall notify the Trustee in writing
of such action and the name or names of its member or members so authorized to
act. Every interpretation, choice, determination or other exercise by the
Committee of any discretion given either expressly or by implication to it shall
be conclusive and binding upon all parties directly or indirectly affected,
without restriction, however, on the right of the Committee to reconsider and
redetermine such actions. In performing any duty or exercising any power herein
conferred, the Committee shall in no event perform such duty or exercise such
power in any manner which discriminates in favor of Highly Compensated
Employees. The Employers shall indemnify and hold harmless each member of the
Committee against any claim, cost, expense (including attorneys' fees), judgment
or liability (including any sum paid in settlement of a claim with the approval
of the Employers) arising out of any act or omission to act as a member of the
Committee appointed under this Plan, except in the case of willful misconduct.
Section 7.3 Rules, Records and Reports. The Committee may adopt such
rules and procedures for the administration of the Plan as are consistent with
the terms hereof, and shall keep adequate records of the Committee's proceedings
and acts and of the status of the Participants' Accounts. The Committee may
employ such agents, accountants and legal counsel (who may be agents,
accountants or legal counsel for an Employer) as may be appropriate for the
administration of the Plan. The Committee shall at least annually provide each
Participant with a report reflecting the status of his or her Accounts in the
Trust and shall cause such other information, documents or reports to be
prepared, provided and/or filed as may be necessary to comply with the
provisions of the Employee Retirement Income Security Act of 1974 or any other
law.
Section 7.4 Administration Expenses and Taxes. Unless otherwise paid
by the Employers in their discretion, the Committee shall direct the Trustee to
pay all reasonable and necessary expenses (including the fees of agents,
accountants and legal counsel) incurred by the Committee in connection with the
administration of the Plan. Should any tax of any character (including transfer
taxes) be levied upon the Trust assets or the income therefrom, such tax shall
be paid from and charged against the assets of the Trust.
21
ARTICLE VIII.
AMENDMENT AND TERMINATION
Section 8.1 Amendment. The Board of Directors of the Company shall
have the right and power at any time and from time to time to amend this Plan,
in whole or in part, on behalf of all Employers. Any such amendment made by the
Board of Directors of the Company shall be made by or pursuant to a resolution
duly adopted by the Board of Directors of the Company, and shall be evidenced by
such resolution or by a written instrument executed by such person as the Board
of Directors of the Company shall authorize for such purpose. With the consent
of the Board of Directors of the Company and subject to such procedure as it may
prescribe, the Board of Directors of each Employer shall have the right and
power at any time and from time to time to amend this Plan, in whole or in part,
with respect to the Plan's application to the Participants of the particular
amending Employer and the assets held in the Trust for their benefit, or to
transfer such assets or any portion thereof to a new trust for the benefit of
such Participants. However, in no event shall any amendment or new trust permit
any portion of the trust fund to be used for or diverted to any purpose other
than the exclusive benefit of the Participants and their beneficiaries, nor
shall any amendment or new trust reduce a Participant's Vested Interest under
the Plan.
Section 8.2 Termination. The Board of Directors of the Company shall
have the right and power at any time to terminate this Plan on behalf of all
Employers, or to terminate this Plan as it applies to the Participants who are
or were employees of any particular Employer, by giving written notice of such
termination to the Committee and Trustee. Any provision of this Plan to the
contrary notwithstanding, upon the termination or partial termination of the
Plan as to any Employer, or in the event any Employer should completely
discontinue making contributions to the Plan without formally terminating it,
all amounts credited to the Accounts of the affected Participants of that
particular Employer shall be fully vested.
ARTICLE IX.
TOP-HEAVY PROVISIONS
Section 9.1 Top-Heavy Definitions. Unless the context clearly
indicates otherwise, when used in this Article:
(a) "Top-Heavy Plan" means this Plan if, as of the Determination
Date, the aggregate of the Accounts of Key Employees under the Plan
exceeds 60% of the aggregate of the Accounts of all Participants and
former Participants under the Plan. The aggregate of the Accounts of
any Participant or former Participant shall include any distributions
(other than related rollovers or transfers from the Plan within the
meaning of regulations under Section 416(g) of the Code) made from
22
such individual's Accounts during the Plan Year or any of the four
preceding Plan Years, but shall not include any unrelated rollovers or
transfers (within the meaning of regulations under Section 416(g) of
the Code) made to such individual's Accounts after December 31, 1983.
The Accounts of any Participant or former Participant who (i) is not a
Key Employee for the Plan Year in question but who was a Key Employee
in a prior Plan Year, or (ii) has not completed an Hour of Service
during the five-year period ending on the Determination Date, shall
not be taken into account. The determination of whether the Plan is
a Top-Heavy Plan shall be made after aggregating all other plans of
an Employer and any Affiliated Company qualifying under Section 401(a)
of the Code in which a Key Employee is a participant or which enables
such a plan to meet the requirements of Section 401(a)(4) or 410 of
the Code, and after aggregating any other plan of an Employer or
Affiliated Company, which is not already aggregated, if such
aggregation group would continue to meet the requirements of Sections
401(a) (4) and 410 of the Code and if such permissive aggregation
thereby eliminates the top-heavy status of any plan within such
permissive aggregation group. The determination of whether this Plan is
a Top-Heavy Plan shall be made in accordance with Section 416(g) of the
Code.
(b) "Determination Date" means, for purposes of determining
whether the Plan is a Top-Heavy Plan for a particular Plan Year, the
last day of the preceding Plan Year.
(c) "Key Employee" means any Employee or former Employee
(including a beneficiary of such Employee or former Employee) who at
any time during the Plan Year or any of the four preceding Plan Years
is:
(1) an officer of the Employer who has Compensation for any
such Plan Year greater than 50% of the amount in effect under
Section 415(b)(1)(A) of the Code for such Plan
Year;
(2) one of the 10 Employees owning (or considered as
owning within the meaning of Section 318 of the Code) the
largest interests in excess of 0.5% in an Employer or
Affiliated Company and having Compensation for such Plan Year
of more than the limitation in effect under Section 415(c)(1)(A)
of the Code;
(3) a person owning (or considered as owning within the
meaning of Section 318 of the Code) more than 5% of the
outstanding stock of an Employer or stock possessing more than 5%
of the total combined voting power of all stock of an Employer;
or
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(4) a person who has Compensation for such Plan Year from
an Employer of more than $150,000 and who would be described in
paragraph (3) hereof if 1% were substituted for 5% in each place
it appears in such paragraph.
For the purposes of applying Section 318 of the Code to this subsection
(c), subparagraph (C) of Section 318(a)(2) of the Code shall be applied
by substituting 5% for 50%. The rules of subsections (b), (c) and (m)
of Section 414 of the Code shall not apply for purposes of determining
ownership in an Employer under this subsection (c).
(d) "Non-Key Employee" means any Employee or former Employee
(including a beneficiary of such Employee or former Employee) who is
not a Key Employee.
Section 9.2 Minimum Contribution Requirement. Any provision of this
Plan to the contrary notwithstanding, if the Plan is a Top-Heavy Plan for any
Plan Year commencing after December 31, 1996, then the Employers will contribute
to the Matching Account of each Non-Key Employee who is both eligible to
participate and in the employ of an Employer on the last day of such Plan Year,
an amount which, when added to the total amount of contributions and forfeitures
otherwise allocable under the Plan for such Non-Key Employee for such year,
shall equal the lesser of (i) 3% of such Non-Key Employee's Limitation
Compensation (Compensation for any Plan Year commencing after December 31, 1997)
for such year or (ii) the amount of contributions and forfeitures (expressed as
a percentage of Limitation Compensation (Compensation for any Plan Year
commencing after December 31, 1997)) allocable under the Plan for the Key
Employee for whom such percentage is the highest for the Plan Year after taking
into account contributions under other defined contribution plans maintained by
the Employer in which a Key Employee is a participant (as well as any other plan
of an Employer which enables such a plan to meet the requirements of Section
401(a)(4) or 410 of the Code); provided, however, that no minimum contribution
shall be made for a Non-Key Employee under this Section for any Plan Year if the
Employer maintains another qualified plan under which a minimum benefit or
contribution is being accrued or made for such Plan Year for the Non-Key
Employee in accordance with Section 416(c) of the Code. A Non-Key Employee who
is not a Participant, but for whom a contribution is made pursuant to this
Section, shall be accorded all of the rights and privileges of a Participant
under the Plan except that no contributions (other than contributions pursuant
to this Section) shall be made for or on behalf of such Non-Key Employee until
he or she meets the eligibility and participation requirements of Article II.
ARTICLE X.
MISCELLANEOUS GENERAL PROVISIONS
Section 10.1 Spendthrift Provision. No right or interest of any
Participant or beneficiary under the Plan may be assigned, transferred or
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alienated, in whole or in part, either directly or by operation of law, and no
such right or interest shall be liable for or subject to any debt, obligation or
liability of such Participant or beneficiary; provided, however, that nothing
herein shall prevent the payment of amounts from a Participant's Accounts under
the Plan in accordance with the terms of a court order which the Committee has
determined to be a qualified domestic relations order (as defined in Section
414(p) of the Code).
Section 10.2 Claims Procedure. If any person (hereinafter called the
"Claimant") feels that he or she is being denied a benefit to which he or she is
entitled under the Plan, such Claimant may file a written claim for said benefit
with any member of the Committee. Within 60 days of the receipt of such claim
the Committee shall determine and notify the Claimant as to whether he or she is
entitled to such benefit. Such notification shall be in writing and, if denying
the claim for benefit, shall set forth the specific reason or reasons for the
denial, make specific reference to the pertinent provisions of the Plan, and
advise the Claimant that he or she may, within 60 days of the receipt of such
notice, in writing request to appear before the Committee for a hearing to
review such denial. Any such hearing shall be scheduled at the mutual
convenience of the Committee or its designated representative and the Claimant,
and at such hearing the Claimant and/or his or her duly authorized
representative may examine any relevant documents and present evidence and
arguments to support the granting of the benefit being claimed. The final
decision of the Committee with respect to the claim being reviewed shall be made
within 60 days following the hearing thereon and the Committee shall in writing
notify the Claimant of its final decision, again specifying the reasons therefor
and the pertinent provisions of the Plan upon which such decision is based. The
final decision of the Committee shall be conclusive and binding upon all parties
having or claiming to have an interest in the matter being reviewed.
Section 10.3 Maximum Contribution Limitation. Any provision of this
Plan to the contrary notwithstanding, the sum of (i) the Employer contributions,
(ii) the forfeitures, and (iii) the Participant contributions (excluding
rollover contributions and employee contributions to a simplified employee
pension allowable as a deduction, each within the meaning specified in Section
415(c)(2) of the Code), allocated to a Participant with respect to a Plan Year
shall in no event exceed the lesser of $30,000 (as adjusted pursuant to Section
415(d) of the Code to take into account any cost-of-living increase) or 25% of
such Participant's Limitation Compensation (Compensation for any Plan Year
commencing after December 31, 1997) for that year. For the purposes of applying
the limitation imposed by this Section, each Employer and its Affiliated
Companies shall be considered a single employer, and all defined contribution
plans (meaning plans providing for individual accounts and for benefits based
solely upon the amounts contributed to such accounts and any forfeitures,
income, expenses, gains and losses allocated to such accounts) described in
Section 415(k) of the Code, whether or not terminated, maintained by an Employer
or its Affiliated Companies shall be considered a single plan. If the total
amount allocable to a Participant's Matching Account for a particular Plan Year
would, but for this sentence, exceed the foregoing limitation, any amounts
allocated to such Participant's Matching Account in excess of the foregoing
25
limitation shall be credited to a suspense account and thereafter used to reduce
Matching Contributions for such Plan Year (and, if necessary, the next
succeeding year).
Section 10.4 Employment Noncontractual. The establishment of this Plan
shall not enlarge or otherwise affect the terms of any Employee's employment
with an Employer and an Employer may terminate the employment of any Employee as
freely and with the same effect as if this Plan had not been adopted.
Section 10.5 Limitations on Responsibility. The Employers do not
guarantee or indemnify the Trust against any loss or depreciation of its assets
which may occur, nor guarantee the payment of any amount which may become
payable to a Participant or his or her beneficiaries pursuant to the provisions
of this Plan. All payments to Participants and their beneficiaries shall be made
by the Trustee at the direction of the Committee solely from the assets of the
Trust and the Employers shall have no legal obligation, responsibility or
liability for any such payments.
Section 10.6 Merger or Consolidation. In no event shall this Plan
be merged or consolidated into or with any other plan, nor shall any of its
assets or liabilities be transferred to any other plan, unless each Participant
would be entitled to receive a benefit if the plan in which he or she then
participates terminated immediately following such merger, consolidation or
transfer, which is equal to or greater than the benefit he or she would have
been entitled to receive if the Plan had been terminated immediately prior to
such merger, consolidation or transfer.
Section 10.7 Applicable Law. This Plan shall be governed and construed
in accordance with the internal laws (and not the principles relating to
conflicts of laws) of the State of Texas except where superseded by federal law.
IN WITNESS WHEREOF, this Plan has been restated by Pioneer Natural
Resources USA, Inc. this 11th day of November, 1997, to be effective as of
October 1, 1997.
PIONEER NATURAL RESOURCES USA, INC.
By /s/ Larry Paulsen
------------------------------------
Title: Vice President
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