Exhibit 10.1

 

California Resources Corporation

Supplemental Savings Plan

 

Effective as of January 1, 2015

 

 

Contents

 

Article 1. Introduction	1
1.1 Adoption of the Plan	1
1.2 Purpose of the Plan	1
1.3 Status of the Plan	1
1.4 Application of the Plan	2
Article 2. Definitions	3
2.1 Definitions	3
Article 3. Eligibility and Participation	8
3.1 Eligibility	8
3.2 Effective Date of Participation	8
3.3 Reemployment; Resumption of Participation	8
Article 4. Benefits	9
4.1 Allocations Relating to the Annual Additions Limit	9
4.2 Allocations Relating to the Compensation Limit	9
4.3 Maintenance of Accounts	10
4.4 Vesting and Forfeiture	10
Article 5. Payments	11
5.1 Timing and Form of Payments	11
5.2 Payment Elections and Changes	12
5.3 LTD Participants	13
5.4 Death	13
5.5 Small Benefits	13
5.6 Qualified Divorce Orders	13
5.7 Tax Withholding	13
5.8 Reemployment	14
Article 6. Administration	15
6.1 The Administrative Committee	15
6.2 Compensation and Expenses	15
6.3 Manner of Action	15
6.4 Chairman, Secretary, and Employment of Specialists	15
6.5 Subcommittees	15
6.6 Other Agents	15
6.7 Records	16
6.8 Rules	16

 

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6.9 Powers and Duties	16
6.10 Decisions Conclusive	16
6.11 Fiduciaries	17
6.12 Notice of Address	17
6.13 Data	17
6.14 Adjustments	17
6.15 Member’s Own Participation	17
6.16 Indemnification	18
Article 7. Amendment and Termination	20
7.1 Amendment and Termination	20
7.2 Payments Upon Termination	20
7.3 Reorganization of Employer	20
Article 8. Claims and Appeals Procedures	21
8.1 Application for Benefits	21
8.2 Claims Procedure for Benefits	21
8.3 Limitations on Actions	23
Article 9. General Provisions	24
9.1 Unsecured General Creditor	24
9.2 Trust Fund	24
9.3 Nonassignability	24
9.4 Release from Liability to Participant	24
9.5 Employment Not Guaranteed	25
9.6 Gender, Singular & Plural	25
9.7 Captions	25
9.8 Validity	25
9.9 Notice	25
9.10 Applicable Law	25

 

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Article 1. Introduction

 

1.1                                Adoption of the Plan

 

The California Resources Corporation Supplemental Savings Plan (the “Plan”) is adopted by CRC Services, LLC (the “Company”) effective as of January 1, 2015 (“Effective Date”).

 

1.2                                Purpose of the Plan

 

It is the purpose of this Plan to provide eligible employees with benefits that will compensate them for maximums imposed by law upon contributions to qualified plans.  The portion of the Plan reflecting credits to compensate for the maximum limits imposed by Code section 415 is intended to constitute an “excess plan” as defined in ERISA section 3(36).  The remaining portion of the Plan is intended to constitute a plan which is unfunded and maintained primarily for the purpose of providing deferred compensation to a select group of management or highly compensated employees and is intended to meet the exemptions provided in ERISA sections 201(2), 301(a)(3), and 401(a)(1), as well as the requirements of Department of Labor Regulation section 2520.104-23.  The Plan shall be administered and interpreted so as to meet the requirements of this exemption and the regulations thereunder.

 

1.3                                Status of the Plan

 

(a)                                  Nonqualified Plan. The Plan is not qualified within the meaning of Code section 401(a). The Plan is intended to provide an unfunded and unsecured promise to pay money in the future and thus not to involve, pursuant to Treas. Reg. § 1.83-3(e), the transfer of “property” for purposes of Code section 83. Likewise, allocations under this Plan to the account maintained for a Participant, and earnings credited thereon, are not intended to confer an economic benefit upon the Participant nor is the right to the receipt of future benefits under the Plan intended to result in any Participant, Beneficiary or Alternate Payee being in constructive receipt of any amount so as to result in any benefit due under the Plan being includible in the gross income of any Participant, Beneficiary or Alternate Payee in advance of the date on which payment of any benefit due under the Plan is actually made.

 

(b)                                  Compliance with Code Section 409A. This Plan generally is intended to comply with the requirements of Code section 409A and related regulatory guidance, so that the taxation of Participants and Beneficiaries on any compensation deferred under this Plan is deferred.

 

(c)                                   No Guarantees of Intended Tax Treatment. The Plan shall be administered and interpreted so as to satisfy the requirements for the intended tax treatment under the Code described in this section. However, the treatment of benefits earned under and benefits received from this Plan, for purposes of the Code and other applicable tax laws (such as state income and employment tax laws), shall be determined under the Code and other applicable tax laws and no guarantee or commitment is made to any Participant, Beneficiary or Alternate Payee with respect to the treatment of accruals

 

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under or benefits payable from the Plan for purposes of the Code and other applicable tax laws.

 

1.4                                Application of the Plan

 

The provisions of this Plan apply only to Employees who are credited with at least one Hour of Service earned on or after January 1, 2015.

 

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Article 2. Definitions

 

2.1                                Definitions

 

Whenever the following words and phrases are used in the Plan with the first letter capitalized, they shall have the meanings specified below, unless the context clearly indicates otherwise:

 

(a)                                  “Administrative Committee” means the committee with authority to administer the Plan as provided under section 6.1.

 

(b)                                  “Affiliate” means California Resources Corporation or:

 

(1)                                  Any corporation or other business organization while it is controlled by or under common control with California Resources Corporation within the meaning of Code sections 414 and 1563;

 

(2)                                  Any member of an affiliated service group within the meaning of Code section 414(m) of which California Resources Corporation or any Affiliate is a member;

 

(3)                                  Any entity which, pursuant to Code section 414(o) and related Treasury regulations, must be aggregated with California Resources Corporation or any Affiliate for plan qualification purposes; or

 

(4)                                  Any corporation, trade or business which is more than 50 percent owned, directly or indirectly, by California Resources Corporation and which is designated by the Board or, if authorized by the Board, the Administrative Committee as an Affiliate.

 

(c)                                   “Alternate Payee” means a former spouse of a Participant who is recognized by a Divorce Order as having a right to receive all, or a portion of, the benefits payable under this Plan with respect to the Participant.

 

(d)                                  “Annual Additions” means the same as annual additions under the Savings Plan.

 

(e)                                   “Beneficiary” means the person or persons designated by the Participant to receive payment under this Plan in the event of the Participant’s death prior to the complete distribution to the Participant of the benefits due under the Plan.  A beneficiary designation shall become effective only when filed in writing with the Administrative Committee during the Participant’s lifetime on a paper form prescribed by the Administrative Committee.  The filing of any new Beneficiary designation form will cancel any inconsistent Beneficiary designation previously filed.

 

If a Participant fails to designate a Beneficiary as provided above, or if all designated Beneficiaries predecease the Participant, the Participant’s Beneficiary shall be the

 

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Participant’s spouse, or if the deceased Participant has no surviving spouse, his or her surviving children equally, or if there are no surviving children, his or her surviving parents equally, or if only one parent is living, his or her living parent, or if no parent is living, his or her surviving siblings equally, or if no sibling is living, his or her estate.

 

(f)                                    “Board” means the Board of Directors of the Company.

 

(g)                                   “Code” means the Internal Revenue Code of 1986, as amended.

 

(h)                                  “Company” means CRC Services, LLC and any successor thereto.

 

(h)                                  “ Compensation” means the same as Compensation as defined under the Savings Plan.

 

(i)                                      “Deferral Contribution” means the same as Deferral Contribution under the Savings Plan.

 

(j)                                     “Divorce Order” means any judgment, decree, or order (including judicial approval of a property settlement agreement) that relates to the settlement of marital property rights between a Participant and his former spouse pursuant to a state domestic relations law (including, without limitation and if applicable, community property law), as described in Treas. Reg. § 1.409A-3(j)(4)(ii) (or any successor provision).

 

(k)                                  “Employee” means any person employed by the Company or an Affiliate.

 

Notwithstanding the foregoing, no individual shall be considered an Employee if such individual is not classified as a common-law employee in the employment records of the Employer, without regard to whether the individual is subsequently determined to have been a common-law employee of the Employer. The persons excluded by this paragraph from being Employees are to be interpreted broadly to include and to have at all times included individuals engaged by the Employer to perform services for such entity in a relationship that the entity characterizes as other than an employment relationship, such as where the Employer engages the individual to perform services as an independent contractor or leases the individual’s services from a third party. The exclusion of the individual from being an Employee shall apply even if a determination is subsequently made by the Internal Revenue Service, another governmental agency, a court or other tribunal, after the individual is engaged to perform such services, that the individual is an employee of the Employer for purposes of pertinent Code sections or for any other purpose.

 

(l)                                      “Employer” means the Company and any Affiliate which is designated by the Board or the Administrative Committee.

 

The Board or, if authorized by the Board, the Administrative Committee may designate any Affiliate as an Employer under this Plan. The Affiliate shall become an Employer and a party to this Plan upon acceptance of such designation effective as of the date specified by the Board or Administrative Committee.

 

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By accepting such designation or continuing as a party to the Plan, each Employer acknowledges that:

 

(A)                                It is bound by such terms and conditions relating to the Plan as the Company or the Administrative Committee may reasonably require;

 

(B)                                The Company and the Administrative Committee have the authority to review the Affiliate’s compliance procedures and to require changes in such procedures to protect the Plan;

 

(C)                                It has authorized the Company and the Administrative Committee to act on its behalf with respect to Employer matters pertaining to the Plan;

 

(D)                                It shall cooperate fully with Plan officials and their agents by providing such information and taking such other actions as they deem appropriate for the efficient administration of the Plan; and

 

(E)                                 Its status as an Employer under the Plan is expressly conditioned on its being and continuing to be an Affiliate.

 

Subject to the concurrence of the Board or Administrative Committee, any Affiliate may withdraw from the Plan, and end its status as an Employer hereunder, by communicating to the Administrative Committee its desire to withdraw. Upon withdrawal, which shall be effective as of the date agreed to by the Board or Administrative Committee, as the case may be, and the Affiliate, the Plan shall be considered frozen as to Employees of such Affiliate.

 

(m)                              “ERISA” means the Employee Retirement Income Security Act of 1974, as amended.

 

(n)                                  “Hour of Service” means the same as Hour of Service under the Savings Plan.

 

(o)                                  “LTD Participant” means an Employee who, during the Plan Year, is receiving benefits under the Long-Term Disability Plan.

 

(p)                                  “Long-Term Disability Plan” means the California Resources Corporation Long-Term Disability Plan.

 

(q)                                  “Matching Employer Contribution” means the same as Matching Employer Contribution under the Savings Plan.

 

(r)                                     “Nonelective Employer Contribution” means the same as Nonelective Employer Contribution under the Savings Plan.

 

(s)                                    “Participant” means (i) a person meeting the requirements to participate in the Plan set forth in Article 3 and (ii) any other person who has an account under the Plan because he previously met such requirements.

 

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(t)                                     “Plan Year” means the calendar year.

 

(u)                                  “Qualified Divorce Order” means a Divorce Order that:

 

(1)                                  Creates or recognizes the existence of an Alternate Payee’s right to, or assigns to an Alternate Payee the right to, receive all or a portion of the benefits payable to a Participant under this Plan;

 

(2)                                  Clearly specifies:

 

(A)                                The name and the last known mailing address of the Participant and the name and mailing address of the Alternate Payee covered by the order;

 

(B)                                The amount or percentage of the Participant’s benefits to be paid by this Plan to the Alternate Payee, or the manner in which such amount or percentage is to be determined;

 

(C)                                The number of payments or period to which such order applies; and

 

(D)                                That it applies to this Plan.

 

(3)                                  And does not:

 

(A)                                Require this Plan to provide any type or form of benefit, or any option, not otherwise provided under the Plan;

 

(B)                                Require this Plan to provide increased benefits;

 

(C)                                Require the payment of benefits to an Alternate Payee that are required to be paid to another Alternate Payee under another Divorce Order previously determined to be a Qualified Divorce Order; or

 

(D)                                Require the payment of benefits under this Plan at a time or in a manner that would cause the Plan to fail to satisfy the requirements of Code section 409A (or other applicable section) and any regulations promulgated thereunder or otherwise jeopardize the deferred taxation of any amounts under this Plan.

 

(v)                                  “Savings Plan” means the California Resources Corporation Savings Plan, as amended from time to time.

 

(w)                                “Separation from Service” means a Participant’s “separation from service” as defined under Code section 409A and Treas. Reg. § 1.409A-1(h) (or successor provisions).  For this purpose, a Participant shall have a Separation from Service if the Participant ceases to be an employee of both:

 

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(1)                                  The Participant’s Employer;

 

(2)                                  All Affiliates with whom the Participant’s Employer would be considered a single employer under Code section 414(b) or 414(c).

 

For purposes of the preceding provisions, a Participant who ceases to be an employee of an entity described in (1) or (2) above shall not be considered to have a Separation from Service if such cessation of employment is followed immediately by his commencement of employment with another entity described in (1) or (2) above.

 

A Participant shall have a Separation from Service if it is reasonably anticipated that no further services shall be performed by the Participant, or that the level of services the Participant shall perform shall permanently decrease to no more than 20 percent of the average level of services performed by the Participant over the immediately preceding 36-month period (or the Participant’s full period of service, if the Participant has been performing services for less than 36 months).

 

(x)                                  “ Service ” means the same as “Vesting Service” under the Savings Plan.

 

(y)                                  “Specified Employee” means an Employee who is a “specified employee” within the meaning of Code section 409A and Treas. Reg. § 1.409A-1(i) (or successor provisions) and as determined pursuant to any rules adopted for such purposes by the Company.

 

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Article 3. Eligibility and Participation

 

3.1                                Eligibility

 

Eligibility to participate in the Plan shall be limited and selective.  Eligibility is limited to a select group of management or highly compensated employees who have a benefit that would otherwise be payable under the Savings Plan that is reduced because of the limitations of sections 401(a)(17) and 415 of the Code.

 

3.2                                Effective Date of Participation

 

Any Employee shall become a Participant on the last day of the month next following the year in which the Employee’s Savings Plan benefit is reduced because of the limitations of sections 401(a)(17) or 415 of the Code.

 

3.3                                Reemployment; Resumption of Participation

 

If a Participant has a Separation from Service and is subsequently reemployed as an Employee by an Employer, the Participant shall resume active participation in the Plan on the first date that the Participant again meets the requirement set forth in Section 3.1.

 

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Article 4. Benefits

 

The deferred compensation benefit payable to an eligible Participant shall be determined in accordance with the provisions of this Article 4.

 

4.1                                Allocations Relating to the Annual Additions Limit

 

The amount to be allocated under this subsection of the Plan, with respect to a Participant whose allocations under the Savings Plan are limited by section 415 of the Code, shall equal the difference between (a) and (b), where

 

(a)          is the sum of the following:

 

(i)                    Participant actual Deferral Contributions

 

(ii)                 Employer Matching Employer Contributions, and

 

(iii)              Employer Nonelective Employer Contributions,

 

The amounts calculated under (ii) and (iii) above shall be calculated for the Participant without the limitations provided in section 415 of the Code; and

 

(b)          is the Annual Additions allocated to the Participant under the Savings Plan after application of the limitations of section 415 of the Code.

 

Each of the amounts described above shall be calculated and allocated no later than the last day of second month next following the year in which the Employee’s Savings Plan benefit is restricted because of the limitations of section 415 of the Code.

 

4.2                                Allocations Relating to the Compensation Limit

 

The amount to be allocated under this subsection of the Plan, with respect to a Participant whose compensation under the Savings Plan exceeds the amount specified in Code section 401(a)(17), as adjusted and in effect for the Plan Year, shall equal the sum of:

 

(1)                                  19% percent (7% relating to Matching Employer Contribution and 12% relating to Nonelective Employer Contribution) of the Participant’s Compensation in excess of the amount specified in Code section 401(a)(17) as adjusted and in effect for the Plan Year; and

 

(2)                                  5 percent of the amount allocated under paragraph (1) which shall be allocated to the account maintained for the Participant in lieu of interest on such amount for the Plan Year.

 

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The amount to be allocated under this section of the Plan shall be calculated and allocated no later than the last day of the second month next following the year in which the Participant’s Savings Plan benefit is restricted because of the limitations of section 401(a)(17) of the Code.

 

4.3                                Maintenance of Accounts

 

(a)                                  The Employer shall establish and maintain, in the name of each Participant employed by the Employer, an individual account which shall consist of all amounts credited to the Participant.  At the end of each month, the Participant’s daily account balance shall be multiplied by the Daily Rate for each day in the month.  The sum of the products in the preceding sentence shall be added to the Participant’s account.  The Daily Rate shall be the sum of:  (i) .167% divided the number of days in the month and (ii) the yield on 5-Year Treasury Constant Maturities based on a monthly frequency from the prior month divided by 365.

 

(b)                                  The individual account of each Participant shall represent a liability, payable when due under this Plan, out of the general assets of the Employer, or from the assets of any trust, custodial account or escrow arrangement which the Company may establish for the purpose of assuring availability of funds sufficient to pay benefits under this Plan, provided that no assets shall be transferred to a trust or other account if such transfer would result in the taxation of benefits prior to distribution under Code section 409A(b). The money and any other assets in any such trust or account shall at all times remain the property of the Employer, and neither this Plan nor any Participant shall have any beneficial ownership interest in the assets thereof. No property or assets of the Employer shall be pledged, encumbered, or otherwise subjected to a lien or security interest for payment of benefits hereunder. Accounting for this Plan shall be based on generally accepted accounting principles.

 

4.4                                Vesting and Forfeiture

 

Notwithstanding any other Plan provision, all benefits under this Plan shall be contingent and forfeitable and no Participant shall have a vested interest in any benefit unless, with respect to allocations relating to Nonelective Employer Contributions and earnings thereon, the Participant completes three years of Service and shall be 100 percent vested in his or her account when the Participant is credited with three or more years of Service.  With respect to allocations relating to Deferred Contributions and Matching Employer Contributions and earnings thereon, the Participant shall be immediately vested.

 

A Participant who becomes a LTD Participant shall become 100% vested in his or her Account at the time he or she first receives benefits under the LTD Plan.

 

A person who incurs a Separation from Service with an Employer for any reason prior to becoming fully vested hereunder shall not receive a benefit with respect to the nonvested portion of his account, provided that, upon rehire by an Employer, any amounts forfeited by a Participant at the time of his Separation from Service shall be restored, without interest, to his account and, as set forth in Section 5.8, shall be subject to the same terms and conditions relating to distribution as were applicable at the time of his prior Separation from Service.

 

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Article 5. Payments

 

5.1                                Timing and Form of Payments

 

(a)                              Payment Events.   A Participant’s vested account under this Plan shall be paid on the earliest to occur of the following payment events:

 

(1)                                  The Participant’s Separation from Service; or

 

(2)                                  The Participant’s death.

 

(b)                                  Timing and Form.

 

(1)                                  Separation from Service.

 

(A)                                If payment is made on account of the Participant’s Separation from Service, payment shall be made or commence within the first 90 days of the calendar year following the calendar year in which the Participant’s Separation from Service occurs.  Notwithstanding the foregoing, in the case of a Participant who is a Specified Employee, payment shall be made or commence in the month next following the date that is six (6) months after the date of the Participant’s Separation from Service, if later than the time provided above.

 

(B)                                Payment shall be made in a single lump sum or in annual installments of 5, 10, 15, or 20 years, as elected by the Participant.  If the Participant elects to have payment made in annual installments, the installments shall be paid within the first 90 days of each calendar year during the installment period (except that the first installment may be delayed in the case of a Specified Employee as provided above).  During the installment period, the Participant’s account shall continue to be adjusted as provided in Section 4.3(a) until the installments have been completed.  The amount of each annual installment shall equal the amount credited to the Participant’s vested account as of the date of payment multiplied by a fraction, the numerator of which is one (1), and the denominator of which is the number of installments (including the current installment) which remain to be paid.

 

(2)                                  Death.   If payment is made on account of the Participant’s death, payment shall be made to the Participant’s Beneficiary in a single lump sum 120 days following the date of the Participant’s death.

 

(c)                                   Valuation of Benefits.  The amount of any payment to a Participant under this Article shall be determined based on the value of the Participant’s vested account as of the date of payment.

 

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5.2                                Payment Elections and Changes

 

(a)                                  Payment Elections.

 

(1)                                  An Employee who becomes a Participant shall make the elections provided for in Section 5.1 within 30 days after date the Employee (i) receives from the Company a notice of participation and (ii) first meets the requirement for participation set forth in Section 3.1, consistent with Treas. Reg. section 1.409A-2(a)(7)(iii) (relating to application of the first year of eligibility rule to excess benefit plans).  Except as provided by Section 5.2(c), such payment election shall be irrevocable and shall apply to the Participant’s entire account under the Plan.

 

(2)                              Payment shall be made on the earlier of the Participant’s Separation from Service or death in accordance with Section 5.1(b)(1) or (2), as applicable.  If a Participant does not elect an installment payment option for payment on account of a Separation from Service, any payment on account of the Participant’s Separation from Service shall be made in a single lump sum at the time provided in Section 5.1(b)(1).

 

(b)                                  Changes in Time or Form of Payment.   A Participant may elect to change the time or form of payment of his account in accordance with the rules set forth below.  For purposes of these rules, an election to receive distribution in a series of annual installments shall be treated as a single payment.

 

(1)                                  Permitted Changes.

 

A Participant may elect to change the form of payment upon Separation from Service.

 

(2)                                  Requirements.  Any election by a Participant under this subsection shall meet the following requirements:

 

(A)                                The election shall not be effective until at least 12 months after the election is filed with the Administrative Committee;

 

(B)                                The election must defer payment (or payment of the initial installment, if applicable) for a period of at least five years from the date that payment (or payment of the initial installment, if applicable) would otherwise have been made; and

 

(C)                                The election must be made at least 12 months prior to the date in which payment (or payment of the initial installment, if applicable) is otherwise scheduled to be made.

 

(3)                                  A Participant may make only two changes pursuant to this Section 5.2(b).  Each such change must satisfy all of the requirements of Section 5.2(b)(2).

 

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No further changes may be made following a Participant’s Separation from Service.

 

(c)                                   Procedures.   All payment elections under this Plan shall be made in accordance with the provisions of this Plan and the rules and procedures established by the Administrative Committee for the time and manner of making elections.

 

5.3                                LTD Participants

 

A LTD Participant’s vested account shall be paid on the Participant’s Separation of Service in accordance with Section 5.1(b)(1) or death in accordance with Section 5.1(b)(2).

 

5.4                                Death

 

If a Participant dies before the complete distribution of his account, the account or remaining account shall be paid to the Participant’s Beneficiary in a single lump sum 120 days following the date of the Participant’s death.

 

5.5                                Small Benefits

 

Notwithstanding any election by a Participant to receive payment of any account maintained for the Participant under the Plan in an installment payment form, if the value of such account is less than $50,000 at the time payment in such form is scheduled to commence, the account shall be paid to the Participant in a single lump sum on the scheduled commencement date.

 

5.6                                Qualified Divorce Orders

 

Subject to the policies and procedures established by the Administrative Committee under Section 9.3(b), payment may be made from the balance of a Participant’s vested account to the extent necessary to fulfill a Qualified Divorce Order.

 

5.7                                Tax Withholding

 

(a)                                  To the extent required by law in effect at the time payments are made, the Participant’s Employer shall withhold from payments made hereunder the taxes required to be withheld by Federal, state and local law.

 

(b)                                  The Participant’s Employer shall have the right at its option (1) to require a Participant to pay or provide for payment of the amount of any taxes that the Employer may be required to withhold with respect to amounts credited to the Participant’s account or (2) deduct from any amount of salary, bonus or other payment otherwise payable in cash to the Participant the amount of any taxes that the Employer may be required to withhold with respect to amounts credited to the Participant’s account.  In addition, as permitted by Treas. Reg. § 1.409A-3(j)(4)(vi) (or any successor provision), payments may be made under the Plan to pay any Federal Insurance Contributions Act (FICA) tax imposed under Code sections 3101 and 3121(v)(2) on the Participant’s account, and to pay any income tax imposed under Code section 3401 ( i.e., wage withholding) or the corresponding withholding provisions of applicable state or local law as a result of payment of the FICA amount,

 

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as well as to pay the additional income tax attributable to the pyramiding wages and taxes.  The total payment may not exceed the aggregate FICA tax amount and the income tax withholding related to such FICA tax amount.

 

5.8                                Reemployment

 

(a)                                  Continued distribution of account.   If a Participant who is receiving payment on account of his Separation from Service is reemployed by an Employer or Affiliate prior to the complete distribution of his account, the account or remaining account shall be paid to the Participant at the scheduled time or times without regard to the Participant’s reemployment.

 

(b)                                  New account.   If a terminated Participant is reemployed by an Employer and resumes active participation in the Plan pursuant to Section 3.2, a new account shall be established for such Participant to which allocations relating to the period following the Participant’s reemployment (and any unvested amounts forfeited from the Participant’s account at the time of his first termination) shall be credited.  Such new account, to the extent vested, shall be paid in accordance with the provisions of this Plan and the Participant’s most recent payment election, if any, prior to his first termination.

 

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Article 6. Administration

 

6.1                                The Administrative Committee

 

The Plan shall be administered by an Administrative Committee.  The Administrative Committee shall be composed of three or more members, who shall be appointed by the Board and shall hold office at the discretion of the Board.  Such members may, but need not, be Employees of the Company.

 

Any member of the Administrative Committee may resign by delivering his written resignation to the Board and to the Administrative Committee Secretary.  Such resignation shall be effective no earlier than the date of the written notice.

 

6.2                                Compensation and Expenses

 

The members of the Administrative Committee who are Employees shall serve without compensation for services as a member.  All expenses of the Administrative Committee shall be paid directly by the Company.  Such expenses may include any expenses incident to the functioning of the Administrative Committee, including, but not limited to, fees of the Plan’s accountants, outside counsel and other specialists and other costs of administering the Plan.

 

6.3                                Manner of Action

 

A majority of the members of the Administrative Committee at the time in office shall constitute a quorum for the transaction of business.  All resolutions adopted and other actions taken by the Administrative Committee at any meeting shall be by the vote of a majority of those present at any such meeting.  The Administrative Committee may take action without a meeting if a majority of the members at the time in office give written consent.

 

6.4                                Chairman, Secretary, and Employment of Specialists

 

The members of the Administrative Committee shall elect one of their number as Chairman and shall elect a Secretary who may, but need not, be a member.  They may authorize one or more of their number or any agent to execute or deliver any instrument or instruments on their behalf, and may employ such counsel, auditors, and other specialists and such other services as they may require in carrying out the provisions of the Plan.

 

6.5                                Subcommittees

 

The Administrative Committee may appoint one or more subcommittees and delegate such of its power and duties as it deems desirable to any such subcommittee, in which case every reference herein made to the Administrative Committee shall be deemed to mean or include the subcommittees as to matters within their jurisdiction.  The members of any such subcommittee shall consist of such officers or other employees of the Company and such other persons as the Administrative Committee may appoint.

 

6.6                                Other Agents

 

The Administrative Committee may also appoint one or more persons or agents to aid it in carrying out its duties as a fiduciary, and delegate such of its powers and duties as it deems desirable to such person or agents.

 

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6.7                                Records

 

All resolutions, proceedings, acts, and determinations of each Committee shall be recorded by the Secretary thereof or under his supervision, and all such records, together with such documents and instruments as may be necessary for the administration of the Plan, shall be preserved in the custody of the Secretary.

 

6.8                                Rules

 

Subject to the limitations contained in the Plan, the Administrative Committee shall be empowered from time to time in its discretion to adopt by-laws and establish rules for the conduct of its affairs and the exercise of the duties imposed upon it under the Plan.

 

6.9                                Powers and Duties

 

The Administrative Committee shall have responsibility for the general administration of the Plan and for carrying out its provisions. The Administrative Committee shall have such powers and duties as may be necessary to discharge its functions hereunder, including, but not limited to, the following:

 

(a)                                  To construe and interpret the Plan, to supply all omissions from, correct deficiencies in and resolve ambiguities in the language of the Plan;

 

(b)                                  To decide all questions of eligibility, to determine the right of any person to an allocation and the amount thereof, and to determine the manner and time of payment of any benefits hereunder, all in accordance with the Plan;

 

(c)                                   To obtain from the Employees such information as shall be necessary for the proper administration of the Plan and, when appropriate, to furnish such information promptly to other persons entitled thereto;

 

(d)                                  To prepare and distribute, in such manner as the Company determines to be appropriate, information explaining the Plan; and

 

(e)                                   To establish and maintain such accounts in the name of each Participant as are necessary.

 

In administering the Plan, the Administrative Committee shall exercise its powers in a manner designed to ensure that the Plan complies with the requirements of Code section 409A, to the extent applicable.

 

6.10                         Decisions Conclusive

 

The Administrative Committee shall exercise its powers hereunder in a uniform and nondiscriminatory manner.  Any and all disputes with respect to the Plan which may arise involving Participants or their Beneficiaries shall be referred to the Administrative Committee and its decision shall be final, conclusive, and binding.  Furthermore, if any question arises as to the meaning, interpretation, or application of any provision hereof, the decision of the Administrative Committee with respect thereto shall be final.

 

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6.11                         Fiduciaries

 

The fiduciaries named in this Article shall have only those specific powers, duties, responsibilities, and obligations as are specifically given them under this Plan.  The Company shall have the sole authority to amend or terminate, in whole or in part, this Plan. The Administrative Committee shall be a fiduciary under the Plan and shall have the sole responsibility for the administration of this Plan.  The officers and Employees of the Company shall have the responsibility of implementing the Plan and carrying out its provisions as the Administrative Committee shall direct.  A fiduciary may rely upon any direction, information, or action of another fiduciary as being proper under this Plan, and is not required under this Plan to inquire into the propriety of any such direction, information, or action.  It is intended under this Plan that each fiduciary shall be responsible for the proper exercise of his own powers, duties, responsibilities, and obligations under this Plan and shall not be responsible for any act or failure to act of another fiduciary.  No fiduciary guarantees in any manner the payment of benefits from this Plan.  Any party may serve in more than one fiduciary capacity with respect to the Plan.

 

6.12                         Notice of Address

 

Each person entitled to benefits from the Plan must file with the Administrative Committee or its agent, in writing (electronic or non-electronic), his mailing address and each change of his mailing address. Any communication, statement, or notice addressed to such a person at his latest reported mailing address will be binding upon him for all purposes of the Plan, and neither the Administrative Committee nor the Company shall be obliged to search for or ascertain his whereabouts.

 

6.13                         Data

 

All persons entitled to benefits from the Plan must furnish to the Administrative Committee such documents, evidence, or information, including information concerning marital status, as the Administrative Committee considers necessary or desirable for the purpose of administering the Plan.  It shall be an express condition of the Plan that each such person must furnish such information and sign such documents as the Administrative Committee may require before any benefits become payable from the Plan, provided that payment shall in all cases be made by the time required by Code section 409A.  The Administrative Committee shall be entitled to distribute to a non-spouse Beneficiary in reliance upon the signed statement of the Participant that he is unmarried without any further liability to a spouse if such statement is false.

 

6.14                         Adjustments

 

Subject to the requirements of Code section 409A, the Administrative Committee may adjust benefits under the Plan or make such other adjustments with respect to a Participant or Beneficiary as are required to correct administrative errors or provide uniform treatment in a manner consistent with the intent and purposes of the Plan.

 

6.15                         Member’s Own Participation

 

No member of the Administrative Committee may act, vote or otherwise influence a decision specifically relating to his own participation under the Plan.

 

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6.16                         Indemnification

 

(a)                                  To the extent permitted by the Company’s bylaws or other organizational documents and applicable law, the Company shall indemnify and hold harmless each of the following persons ( “Indemnified Persons” ) under the terms and conditions of this section:

 

(1)                                  The Administrative Committee and each of its members, which, for purposes of this section, includes any Employee to whom the Administrative Committee has delegated fiduciary or other duties.

 

(2)                                  The Board and each member of the Board and any Employer who has responsibility (whether by delegation from another person, an allocation of responsibilities under the terms of this Plan document, or otherwise) for a fiduciary duty, a nonfiduciary settlor function (such as deciding whether to approve a plan amendment), or a nonfiduciary administrative task relating to the Plan.

 

(b)                                  The Company shall indemnify and hold harmless each Indemnified Person against any and all claims, losses, damages, and expenses, including reasonable attorney’s fees and court costs, incurred by that person on account of his or her good faith actions or failures to act with respect to his or her responsibilities relating to the Plan. The Company’s indemnification shall include payment of any amounts due under a settlement of any lawsuit or investigation, but only if the Company agrees to the settlement.

 

(1)                                  An Indemnified Person shall be indemnified under this section only if he or she notifies an Appropriate Person at the Company of any claim asserted against or any investigation of the Indemnified Person that relates to the Indemnified Person’s responsibilities with respect to the Plan.

 

(A)                                A person is an “Appropriate Person” to receive notice of the claim or investigation if a reasonable person would believe that the person notified would initiate action to protect the interests of the Company in response to the Indemnified Person’s notice.

 

(B)                                The notice may be provided orally or in writing. The notice must be provided to the Appropriate Person promptly after the Indemnified Person becomes aware of the claim or investigation.  No indemnification shall be provided under this section to the extent that the Company is materially prejudiced by the unreasonable delay of the Indemnified Person in notifying an Appropriate Person of the claim or investigation.

 

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(2)                                  An Indemnified Person shall be indemnified under this section with respect to attorney’s fees, court costs or other litigation expenses or any settlement of such litigation only if the Indemnified Person agrees to permit the Company to select counsel and to conduct the defense of the lawsuit.

 

(3)                                  No Indemnified Person shall be indemnified under this section with respect to any action or failure to act that is judicially determined to constitute or be attributable to the willful misconduct of the Indemnified Person.

 

(4)                                  Payments of any indemnity under this section shall be made only from insurance or other assets of the Company or its Affiliates. The provisions of this section shall not preclude such further indemnities as may be available under insurance purchased by the Company or its Affiliates or as may be provided by the Company or for the benefit of the Indemnified Person under any by-law, agreement or otherwise, provided that no expense shall be indemnified under this section that is otherwise indemnified by the Company or an Affiliate or by an insurance contract purchased by the Company or an Affiliate.

 

(5)                                  Payment of any indemnity under this section that is not exempt from Code section 409A shall comply with Code section 409A’s requirements for reimbursement plans, as set forth in Treas. Reg. § 1.409A-3(i)(1)(iv) (or any successor provision).  For this purpose, (i) the indemnity under this section shall continue for the Indemnified Person’s lifetime, and, if later, until the complete disposition of all covered claims, (ii) the amount of expenses indemnified during one taxable year of an Indemnified Person shall not affect the amount of expenses indemnified in any other taxable year; (iii) payment of an indemnity shall be made by the last day of the Indemnified Person’s taxable year following the taxable year in which the expense was incurred and (iv) the Indemnified Person’s right to indemnification shall not be subject to liquidation or exchange for any other benefit.  If, after payment of any amount to the Indemnified Person pursuant to this provision, it is determined, pursuant to paragraph (3) above or otherwise, that the Indemnified Person is not entitled to indemnification, the Indemnified Person shall promptly repay such amount to the Company.

 

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Article 7. Amendment and Termination

 

7.1                                Amendment and Termination

 

The Company expects the Plan to be permanent, but since future conditions affecting the Company or any Employer cannot be anticipated or foreseen, the Company must necessarily and does hereby reserve the right to amend, modify, or terminate the Plan at any time by action of the Board, except that no amendment shall reduce the dollar amount permanently credited to a Participant’s account.  The Administrative Committee, in its discretion, may amend the Plan if it finds that such amendment does not significantly increase or decrease benefits or costs.  Notwithstanding the foregoing, the Board or the Administrative Committee may amend the Plan to:

 

(a)                                  Ensure that this Plan complies with the requirements of Code section 409A for deferral of taxation on compensation deferred hereunder until the time of distribution; and

 

(b)                                  Add provisions for changes to elections as to time and manner of distributions and other changes that comply with the requirements of Code section 409A for the deferral of taxation on deferred compensation until the time of distribution.

 

7.2                                Payments Upon Termination

 

If the Plan is terminated, distributions to Participants and Beneficiaries shall be made on the dates on which such distributions would be made under the Plan without regard to such termination, except that payments may, in the discretion of the Board, be accelerated if:

 

(a)                                  Accelerated payment is permitted under Treas. Reg. § 1.409A-3(j)(4)(ix) (or any successor provision); or

 

(b)                                  The Plan is terminated because Participants have become subject to tax on their deferrals due to the Plan’s failure to satisfy the requirements of Code section 409A.  Payment to a Participant may not exceed the amount required to be included in income as a result of such failure.

 

7.3                                Reorganization of Employer

 

In the event of a merger or consolidation of an Employer, or the transfer of substantially all of the assets of an Employer to another corporation, such continuing, resulting or transferee corporation shall have the right to continue and carry on the Plan and to assume all liabilities of the Employer hereunder without obtaining the consent of any Participant or Beneficiary.  If such successor shall assume the liabilities of the Employer hereunder, then the Employer shall be relieved of all such liability, and no Participant or Beneficiary shall have the right to assert any claim against the Employer for benefits under or in connection with the Plan.

 

20

 

Article 8. Claims and Appeals Procedures

 

8.1                                Application for Benefits

 

All applications for benefits under the Plan shall be submitted to: CRC Services, LLC, Attention: Administrative Committee, 10889 Wilshire Blvd., Los Angeles, CA 90024.  Applications for benefits must be in writing on the forms prescribed by the Administrative Committee and must be signed by the Participant, Beneficiary, spouse, Alternate Payee, or other person claiming benefits under this Plan (each of which may be “Claimant” ).

 

8.2                                Claims Procedure for Benefits

 

(a)                                  If a Claimant believes he is entitled to a benefit, or a benefit different from the one received, then the Claimant may file a claim for the benefit by writing a letter to the Administrative Committee or its authorized delegate.  Any such claim must be made no later than the time prescribed by Treas. Reg. § 1.409A-3(g) (or any successor provision).

 

(b)                                  Within a reasonable period of time, but not later than 90 days after receipt of a claim for benefits, the Administrative Committee or its delegate shall notify the Claimant of any adverse benefit determination on the claim, unless special circumstances require an extension of time for processing the claim. In no event may the extension period exceed 90 days from the end of the initial 90-day period.  If an extension is necessary, the Administrative Committee or its delegate shall provide the Claimant with a written notice to this effect prior to the expiration of the initial 90-day period.  The notice shall describe the special circumstances requiring the extension and the date by which the Administrative Committee or its delegate expects to render a determination on the claim.

 

(c)                                   In the case of an adverse benefit determination, the Administrative Committee or its delegate shall provide to the Claimant written or electronic notification setting forth in a manner calculated to be understood by the claimant:

 

(1)                                  The specific reason or reasons for the adverse benefit determination;

 

(2)                                  Reference to the specific Plan provisions on which the adverse benefit determination is based;

 

(3)                                  A description of any additional material or information necessary for the Claimant to perfect the claim and an explanation of why the material or information is necessary; and

 

(4)                                  A description of the Plan’s claim review procedures and the time limits applicable to such procedures, including a statement of the Claimant’s right to bring a civil action under Section 502(a) of ERISA following an adverse final benefit determination on review and in accordance with section 8.3.

 

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(d)                                  Within 60 days after receipt by the Claimant of notification of the adverse benefit determination, the Claimant or his duly authorized representative, upon written application to the Administrative Committee, may request that the Administrative Committee fully and fairly review the adverse benefit determination.  On review of an adverse benefit determination, upon request and free of charge, the Claimant shall have reasonable access to, and copies of, all documents, records and other information relevant to the claimant’s claim for benefits.  The Claimant shall have the opportunity to submit written comments, documents, records, and other information relating to the claim for benefits.  The Administrative Committee’s (or delegate’s) review shall take into account all comments, documents, records, and other information submitted regardless of whether the information was previously considered in the initial adverse benefit determination.

 

(e)                                   Within a reasonable period of time, but not later than 60 days after receipt of such request for review, the Administrative Committee or its delegate shall notify the Claimant of any final benefit determination on the claim, unless special circumstances require an extension of time for processing the claim.  In no event may the extension period exceed 60 days from the end of the initial 60-day period.  If an extension is necessary, the Administrative Committee or its delegate shall provide the Claimant with a written notice to this effect prior to the expiration of the initial 60-day period. The notice shall describe the special circumstances requiring the extension and the date by which the Administrative Committee or its delegate expects to render a final determination on the request for review.  In the case of an adverse final benefit determination, the Administrative Committee or its delegate shall provide to the claimant written or electronic notification setting forth in a manner calculated to be understood by the Claimant:

 

(1)                                  The specific reason or reasons for the adverse final benefit determination;

 

(2)                                  Reference to the specific Plan provisions on which the adverse final benefit determination 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 relevant to the Claimant’s claim for benefits; and

 

(4)                                  A statement of the claimant’s right to bring a civil action under Section 502(a) of ERISA following an adverse final benefit determination on review and in accordance with section 8.3.

 

(f)                                    If a Claimant’s claim or appeal is approved, any resulting payment of benefits will be made no later than the time prescribed for payment of benefits by Treas. Reg. § 1.409A-3(g) (or any successor provision).

 

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8.3                                Limitations on Actions

 

All decisions made under the procedure set out in this Article shall be final and there shall be no further right of appeal.  No person may initiate a lawsuit before fully exhausting the claims procedures set out in this Article, including appeal.  To provide for an expeditious resolution of any dispute concerning a claim for benefits that has been denied and to ensure that all evidence pertinent to such claim is available, no lawsuit may be brought contesting a denial of benefits more than the later of:

 

(a)                                  180 days after receiving the written response of the Administrative Committee to an appeal; or

 

(b)                                  365 days after an applicant’s original application for benefits.

 

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Article 9. General Provisions

 

9.1                                Unsecured General Creditor

 

The rights of a Participant, Beneficiary, Alternate Payee or their heirs, successors, and assigns, as relates to any Company or Employer promises hereunder, shall not be secured by any specific assets of the Company or any Employer, nor shall any assets of the Company or any Employer be designated as attributable or allocated to the satisfaction of such promises.

 

9.2                                Trust Fund

 

The Company shall be responsible for the payment of all benefits provided under the Plan.  At its discretion, the Company may establish one or more trusts, with such trustees as the Board or Administrative Committee may approve, for the purpose of providing for the payment of such benefits.  Such trust or trusts may be irrevocable, but the assets thereof shall be subject to the claims of the Company’s creditors.  To the extent any benefits provided under the Plan are actually paid from any such trust, the Company shall have no further obligation with respect thereto, but to the extent not so paid, such benefits shall remain the obligation of, and shall be paid by, the Company.  No assets shall be transferred to a trust if such transfer would result in the taxation of benefits prior to distribution under Code section 409A(b).

 

9.3                                Nonassignability

 

(a)                                  Neither a Participant nor any other person shall have any right to commute, sell, assign, transfer, pledge, anticipate, mortgage or otherwise encumber, hypothecate or convey in advance of actual receipt the amount, if any, payable hereunder, or any part thereof, or interest therein which are, and all rights to which are, expressly declared to be unassignable and non-transferable.  No part of the amounts payable shall, prior to actual payment, be subject to seizure or sequestration for the payment of any debts, judgments, alimony or separate maintenance owed by a Participant or any other person, nor be transferable by operation of law in the event of a Participant’s or any other person’s bankruptcy or insolvency.

 

(b)                                  Notwithstanding subsection (a), the right to benefits payable with respect to a Participant pursuant to a Qualified Divorce Order may be created, assigned, or recognized. The Administrative Committee shall establish appropriate policies and procedures to determine whether a Divorce Order presented to the Administrative Committee constitutes a qualified Divorce Order under this Plan, and to administer distributions pursuant to the terms of Qualified Divorce Orders.  In the event that a Qualified Divorce Order exists with respect to benefits payable under the Plan, such benefits otherwise payable to the Participant specified in the Qualified Divorce Order shall be payable to the Alternate Payee specified in such Qualified Divorce Order.

 

9.4                                Release from Liability to Participant

 

A Participant’s right to receive benefits under the Plan shall be reduced to the extent that any portion of the account maintained for the Participant has been paid or set aside for payment

 

24

 

to an Alternate Payee pursuant to a Qualified Divorce Order.  The Participant shall be deemed to have released the Employer and the Plan from any claim with respect to such amounts in any case in which: (a) any Employer, the Plan, or any Plan representative has been served with legal process or otherwise joined in a proceeding relating to such amounts; and (b) the Participant fails to obtain an order of the court in the proceeding relieving the Employer and the Plan from the obligation to comply with the judgment, decree or order.

 

9.5                                Employment Not Guaranteed

 

Nothing contained in this Plan nor any action taken hereunder shall be construed as a contract of employment or as giving any Participant any right to be retained in employment with the Company or any Employer.  Accordingly, subject to the terms of any written employment agreement to the contrary, the Company and Employer shall have the right to terminate or change the terms of employment of a Participant at any time and for any reason whatsoever, with or without cause.

 

9.6                                Gender, Singular & Plural

 

All pronouns and any variations thereof shall be deemed to refer to the masculine or feminine as the identity of the person or persons may require.  As the context may require, the singular may be read as the plural and the plural as the singular.

 

9.7                                Captions

 

The captions of the articles, sections, and paragraphs of the Plan are for convenience only and shall not control or affect the meaning or construction of any of its provisions.

 

9.8                                Validity

 

In the event any provision of this Plan is held invalid, void, or unenforceable, the same shall not affect, in any respect whatsoever, the validity of any other provision of this Plan.

 

9.9                                Notice

 

Any notice or filing required or permitted to be given to the Administrative Committee under the Plan shall be sufficient if in writing and hand delivered, or sent by registered or certified mail, to the principal office of the Company.  Such notice shall be deemed given as to the date of delivery or, if delivery is made by mail, as of the date shown on the postmark on the receipt for registration or certification.

 

9.10                         Applicable Law

 

The Plan shall be governed by and construed in accordance with Code section 409A (or any successor provision), and any regulations promulgated thereunder, to the extent applicable, and in accordance with the laws of the State of California to the extent such laws are not preempted by ERISA.

 

[Signature on the following page.]

 

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IN WITNESS WHEREOF , CRC Services, LLC has caused its duly authorized officer to execute this document this 1st day of December, 2014.

 

 

	CRC SERVICES, LLC
	By:	/s/ Daniel S. Watts
	Name:	Daniel S. Watts
	Title:	Vice President — Compensation and Benefits

 

Signature Page to Supplemental Savings Plan

 

Exhibit 10.2

 

CALIFORNIA RESOURCES CORPORATION

 

DEFERRED COMPENSATION PLAN

 

(Effective December 1, 2014)

 

 

Table of Contents

 

		Page
ARTICLE I PURPOSE		1
ARTICLE II DEFINITIONS		1
ARTICLE III ADMINISTRATION OF THE PLAN		7
ARTICLE IV PARTICIPATION		8
4.1	Election to Participate	8
4.2	DCP Deferral Accounts	10
4.3	Interest	11
4.4	Valuation of Deferral Accounts	11
4.5	Savings Plan Restoration Contribution	11
4.6	Vesting of Deferral Accounts	12
4.7	Statement of Deferral Accounts	12
ARTICLE V BENEFITS		12
5.1	Separation from Service for a Reason other than Death	12
5.2	Beneficiary Benefits	13
5.3	Early Payment	14
5.4	Emergency Benefit	15
5.5	Effect of Change in Control	15
5.6	Small Benefit	15
5.7	Tax Withholding and Reporting	15
5.8	Reemployment	16
5.9	Qualified Divorce Orders	16
ARTICLE VI BENEFICIARY DESIGNATION		16
ARTICLE VII CLAIMS PROCEDURE		17
7.1	Applications for Benefits	17
7.2	Claims Procedure	17
7.3	Section 409A Compliance	18
7.4	Limitations on Actions	18
ARTICLE VIII AMENDMENT AND TERMINATION OF PLAN		18
8.1	Amendment	18
8.2	Termination	19
ARTICLE IX MISCELLANEOUS		19

 

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9.1	Unsecured General Creditor	19
9.2	Trust Fund	20
9.3	Nonassignability	20
9.4	Release from Liability to Participant	20
9.5	Employment Not Guaranteed	20
9.6	Gender, Singular & Plural	21
9.7	Captions	21
9.8	Validity	21
9.9	Notice	21
9.10	Applicable Law	21

 

ii

 

CALIFORNIA RESOURCES CORPORATION

 

DEFERRED COMPENSATION PLAN

 

(Effective December 1, 2014)

 

ARTICLE I
PURPOSE

 

Occidental Petroleum Corporation, a Delaware corporation (“ OPC ”), and California Resources Corporation, a Delaware corporation (“ CRC ”), have entered into that certain Separation and Distribution Agreement (the “ Separation Agreement ”), dated as of November 25, 2014, which generally governs the separation of CRC’s businesses from OPC’s other businesses and provides for, among other things, OPC’s distribution to holders of shares of OPC’s common stock, through a spin-off, of at least 80.1% of the outstanding shares of CRC’s common stock (the “ Spin-Off ”).  In connection with the Spin-Off, OPC and CRC have also entered into that certain Employee Matters Agreement, dated as of November 25, 2014 (the “ Employee Matters Agreement ”), which requires, among other things, that CRC (or a subsidiary or affiliate of CRC) establish a deferred compensation plan to assume the liabilities under the Occidental Petroleum Corporation Modified Deferred Compensation Plan (the “ OPC MDCP ”) in respect of certain employees of CRC and its subsidiaries as of immediately prior to the effective time of the Spin-Off who were participants in the OPC MDCP as of such time (the “ CRC MDCP Participants ”).  In order to satisfy its obligations under the Employee Matters Agreement with respect to such liabilities, CRC Services, LLC, a Delaware limited liability company (“ CRC Services ”) establishes this California Resources Corporation Deferred Compensation Plan (the “ Plan ”) effective as of December 1, 2014 (the “ Effective Date ”).  The Plan is also intended to provide a tax-deferred opportunity for key management and highly compensated employees of the Company (as defined below) to accumulate additional retirement income through deferrals of compensation.

 

As of the Effective Date, the “DCP Deferral Account” (if any) and the “Savings Plan Restoration Account” (if any) of each CRC MDCP Participant under the OPC MDCP is transferred to and assumed by the Plan and shall be credited to such CRC MDCP Participant’s corresponding “ DCP Deferral Account ” and “ Savings Plan Restoration Account ,” respectively, maintained under the Plan.

 

The Plan is intended to satisfy the requirements of Section 409A of the Internal Revenue Code, and any regulations promulgated thereunder, so that the taxation to Participants or Beneficiaries of any compensation deferred under the Plan is deferred.

 

ARTICLE II
DEFINITIONS

 

Whenever the following words and phrases are used in the Plan with the first letter capitalized, they shall have the meanings specified below:

 

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Affiliate .  “ Affiliate ” means (i) any corporation that is a member of a controlled group of corporations (within the meaning of Code Section 1563(a), determined without regard to Code Sections 1563(a)(4) and (e)(3)(C), and with the phrase “more than 50%” substituted for the phrase “at least 80%” each place it appears in Code Section 1563(a)) of which CRC is a component member, or (ii) any entity (whether or not incorporated) that is under common control with CRC (as defined in Code Section 414(c) and the Treasury Regulations thereunder, and with the phrase “more than 50%” substituted for the phrase “at least 80%” each place it appears in the Treasury Regulations under Code Section 414(c)).

 

Alternate Payee .  “ Alternate Payee ” means a former spouse of a Participant who is recognized by a Divorce Order as having a right to receive all, or a portion of, the benefits payable under the Plan with respect to such Participant.

 

Amortization Method .  “ Amortization Method ” means an annual installment method of paying a Participant’s benefits under which the Company will pay the Participant an initial payment in an amount equal to (i) plus (ii) divided by (iii), where (i) is the value of the Participant’s Deferral Accounts as of the end of the month preceding such payment, (ii) is the amount of interest that would accrue during the entire payout period on the unpaid balance credited to the Participant’s Deferral Accounts immediately following such initial payment if the Declared Rate then in effect remained unchanged and (iii) is the number of years over which annual installments are to be paid.  For each Plan Year after the initial benefit payment is made, the annual benefit payment will be determined under the same equation where (i) is the value of the Participant’s Deferral Accounts as of the end of the month preceding the benefit payment, (ii) is the amount of interest that would accrue during the remaining payout period on the unpaid balance credited to the Participant’s Deferral Accounts immediately following such annual payment if the Declared Rate then in effect remained unchanged and (iii) is the number of annual payments remaining.

 

Base Salary .  “ Base Salary ” means the base salary earned by a Participant during pay periods beginning in a Plan Year, excluding Bonus, all severance allowances, forms of incentive compensation, Savings Plan or other Company qualified plan contributions or benefits, retainers, insurance premiums or benefits, reimbursements, and all other payments, prior to reduction for any deferrals under the Plan or any other plan of the Company or reductions under the Savings Plan allowed under Code Section 401(k).

 

Beneficiary .  “ Beneficiary ” means the person or persons designated as such in accordance with Article VI.

 

Beneficiary Benefit .  “ Beneficiary Benefit ” means the payment to a Participant’s Beneficiary of the value of the Participant’s Deferral Accounts pursuant to Section 5.2 on account of the Participant’s death.

 

Board .  “ Board ” means the Board of Directors of CRC Services.

 

Bonus .  “ Bonus ” means the bonus earned by a Participant under a regular annual incentive compensation plan (excluding without limitation a special individual or group bonus, a

 

2

 

project bonus, and any other special bonus) during a Plan Year prior to reduction for any deferral under the Plan or any other plan of the Company.

 

Change in Control .  “ Change in Control ” means (i) for purposes of Sections 8.1 and 8.2(a), any event described in (a), (b), (c) or (d) below, and (ii) for purposes of Section 5.5, any event that constitutes a “change in control event” for purposes of Code Section 409A and Treas. Reg. § 1.409A-3(i)(5) (or any successor provisions) and that is described in subsection (a), (b), (c) or (d) below:

 

(a)                                  Approval by the stockholders of CRC (or, if no stockholder approval is required, by the CRC Board) of the dissolution or liquidation of CRC, other than in the context of a transaction that does not constitute a Change in Control under subsection (b) below;

 

(b)                                  Consummation of a merger, consolidation, or other reorganization, with or into, or the sale of all or substantially all of CRC’s business and/or assets as an entirety to, one or more entities that are not subsidiaries or other affiliates of CRC (a “ Business Combination ”), unless (i) as a result of the Business Combination, more than 50% of the outstanding voting power of the surviving or resulting entity or a parent thereof (the “ Successor Entity ”) immediately after the Business Combination is, or will be, owned, directly or indirectly, by holders of CRC’s voting securities immediately before the Business Combination; (ii) no “person” (as such term is used in Sections 13(d) and 14(d) of the Securities Exchange Act of 1934, as amended from time (the “ Exchange Act ”)), excluding the Successor Entity, OPC or any employee benefit plan of OPC or CRC and any trustee or other fiduciary holding securities under an OPC or CRC employee benefit plan or any person described in and satisfying the conditions of Rule 13d-1(b)(i) of the Exchange Act (an “ Excluded Person ”; provided, however, that OPC, employee benefit plans of OPC and trustees and fiduciaries holding securities under an OPC employee benefit plan shall cease to be Excluded Persons at such time as OPC distributes the remaining outstanding shares of CRC common stock to the OPC shareholders following the Spin-Off and as contemplated in the Separation Agreement), beneficially owns, directly or indirectly, more than 30% of the outstanding shares or the combined voting power of the outstanding voting securities of the Successor Entity, after giving effect to the Business Combination, except to the extent that such ownership existed prior to the Business Combination; and (iii) at least 50% of the members of the board of directors of the entity resulting from the Business Combination were members of the CRC Board at the time of the execution of the initial agreement or of the action of the CRC Board approving the Business Combination;

 

(c)                                   Any “ person ” (as such term is used in Sections 13(d) and 14(d) of the Exchange Act, but excluding any Excluded Person) is or becomes the beneficial owner (as defined in Rule 13d-3 under the Exchange Act), directly or indirectly, of securities of CRC representing 30% or more of the combined voting power of CRC’s then outstanding voting securities, other than as a result of (i) an acquisition directly from CRC; (ii) an acquisition by CRC; or (iii) an acquisition by any employee benefit plan (or related trust) sponsored or maintained by CRC or a Successor Entity; or

 

(d)                                  During any period not longer than two consecutive years and beginning no earlier than the Effective Date, individuals who at the beginning of such period constituted the

 

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CRC Board cease to constitute at least a majority thereof, unless the election, or the nomination for election by CRC’s stockholders, of each new CRC Board member was approved by a vote of at least two-thirds (2/3) of the CRC Board members then still in office who were CRC Board members at the beginning of such period (including for these purposes, new members whose election or nomination was so approved), but excluding, for this purpose, any such individual whose initial assumption of office occurs as a result of an actual or threatened election contest with respect to the election or removal of directors or other actual or threatened solicitation of proxies or consents by or on behalf of a person other than the CRC Board.

 

Code .  “ Code ” means the Internal Revenue Code of 1986, as amended.

 

Committee .  “ Committee ” means the administrative committee appointed to administer the Plan pursuant to Article III.

 

Company .  “ Company ” means CRC Services, or any successor thereto, and any Affiliates (including, without limitation, CRC or any successor thereto).

 

Company Management .  “ Company Management ” means the Chairman of the Board, Chief Executive Officer, President or any Executive Vice President of CRC Services.

 

Compensation .  “ Compensation ” means Base Salary and/or Bonus.

 

CRC .  “ CRC ” has the meaning assigned to such term in Article I.

 

CRC Board .  “ CRC Board ” means the Board of Directors of CRC.

 

CRC MDCP Participants .  “ CRC MDCP Participants ” has the meaning assigned to such term in Article I.

 

CRC Services .  “ CRC Services ” has the meaning assigned to such term in Article I.

 

DCP Deferral Account .  “ DCP Deferral Account ” means the account maintained on the books of account of the Company for each Participant pursuant to Article IV to account for amounts deferred under the Prior Plans and the Plan (other than pursuant to Section 4.5).

 

DCP Deferral Amount .  “ DCP Deferral Amount ” means an amount of a Participant’s Base Salary and/or Bonus that is deferred under the Plan, including amounts deferred under the Prior Plans and the Plan.

 

DCP2 .  “ DCP2 ” means the Occidental Petroleum Corporation Deferred Compensation Plan 2, effective as of October 12, 2006.

 

Declared Rate .  “ Declared Rate ” with respect to any Plan Year means the rate at which interest will be credited on Deferral Accounts for such Plan Year.  The Declared Rate for each Plan Year will be the monthly yield on 5-year Treasury Constant Maturities plus 2%.

 

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Deferral Account(s) .  “ Deferral Account(s) ” means a Participant’s DCP Deferral Account and/or Savings Plan Restoration Account (if any) maintained on the books of account of the Company for each Participant pursuant to Article IV.

 

Deferral Election Form .  “ Deferral Election Form ” means a paper or electronic election form provided by the Committee on which an Eligible Employee may elect to defer Base Salary and/or Bonus and may elect to receive an Early Payment Benefit in accordance with Article IV.

 

Distribution Election Form .  “ Distribution Election Form ” means a paper or electronic election form provided by the Committee on which a Participant may elect the form of payment of his Retirement Benefits and/or the form of payment of Beneficiary Benefits to his Beneficiary in accordance with Article V.

 

Divorce Order .  “ Divorce Order ” means any judgment, decree, or order (including judicial approval of a property settlement agreement) that relates to the settlement of marital property rights between a Participant and his former spouse pursuant to state domestic relations law (including, without limitation and if applicable, community property law), as described in Treas. Reg. § 1.409A-3(j)(4)(ii).

 

Early Payment Benefit .  “ Early Payment Benefit ” means the payment to a Participant of part or all of the Participant’s DCP Deferral Account in an Early Payment Year beginning prior to the Participant’s Retirement or other Separation from Service pursuant to Section 5.3.

 

Early Payment Year .  “ Early Payment Year ” means any year beginning prior to a Participant’s Retirement or other Separation from Service that a Participant elects pursuant to Section 4.1(c) to have an Early Payment Benefit paid or commenced to be paid.

 

Early Payment Year Subaccount .  “ Early Payment Year Subaccount ” means any subaccount of a Participant’s DCP Deferral Account established to separately account for deferred Base Salary and/or Bonus (and interest credited thereto) that is subject to an Early Payment Benefit election.

 

Effective Date .  “ Effective Date ” has the meaning assigned to such term in Article I.

 

Eligible Employee .  “ Eligible Employee ” means each key management employee or other highly compensated employee of the Company who is selected by Company Management to participate in the Plan.

 

Emergency Benefi t.  “ Emergency Benefit ” means the payment to a Participant of part or all of his Deferral Accounts in the event that the Participant has an Unforeseeable Emergency pursuant to Section 5.4.

 

Employee Matters Agreement .  “ Employee Matters Agreement ” has the meaning assigned to such term in Article I.

 

ERISA .  “ ERISA ” means the Employee Retirement Income Security Act of 1974, as amended.

 

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Fractional Method .  “ Fractional Method ” means an installment method of paying a Participant’s Retirement Benefit under which the Company will determine the amount of each annual installment by dividing the value of the Participant’s Deferral Accounts as of the end of the month preceding the payment date by the number of annual installments remaining to be paid.

 

OPC.   “ OPC ” has the meaning assigned to such term in Article I.

 

OPC DCP .  “ OPC DCP ” means the Occidental Petroleum Corporation Deferred Compensation Plan, as amended and restated as of January 1, 2003, under which deferrals ceased as of December 31, 2004.

 

OPC MDCP .  “ OPC MDCP ” has the meaning assigned to such term in Article I

 

Participant .  “ Participant ” means (i) each CRC MDCP Particpant, (ii) an Eligible Employee who has filed a completed and fully executed Deferral Election Form with the Committee and is participating in the Plan in accordance with the provisions of Article IV, and (iii) any person who has a Deferral Account by reason of his prior status as an Eligible Employee.  Under no circumstances shall “Participant” mean any Alternate Payee.

 

Plan .  “ Plan ” has the meaning assigned to such term in Article I.

 

Plan Year .  “ Plan Year ” means the calendar year beginning on January 1 and ending on December 31; provided, however, that the first Plan Year shall begin of the Effective Date and end on December 31, 2014.

 

Prior Plans .  “ Prior Plans ” means (a) the OPC MDCP, (b) the OPC DCP, (c) the DCP2, and (d) the 2005 DCP.

 

Qualified Divorce Order .  “ Qualified Divorce Order ” means a Divorce Order that (a) creates or recognizes the existence of an Alternate Payee’s right to, or assigns to an Alternate Payee the right to, receive all or a portion of the benefits payable to a Participant under the Plan; (b) clearly specifies (i) the name and the last known mailing address of the Participant and the name and last known mailing address of the Alternate Payee covered by the order, (ii) the amount or percentage of the Participant’s benefits to be paid by the Plan to the Alternate Payee, or the manner in which such amount or percentage is to be determined, (iii) the number of payments or period to which such order applies, and (iv) that it applies to the Plan; and (c) does not (i) require the Plan to provide any type or form of benefit, or any option, not otherwise provided under the Plan, (ii) require the Plan to provide increased benefits, or (iii) require the payment of benefits to an Alternate Payee that are required to be paid to another Alternate Payee under another Divorce Order previously determined to be a Qualified Divorce Order.

 

Retirement .  “ Retirement ” means the Participant’s Separation from Service for reasons other than death after the Participant attains age 55.

 

Retirement Benefit .  “ Retirement Benefit ” means the payment to a Participant of the value of the Participant’s Deferral Accounts pursuant to Section 5.1 following Retirement.

 

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Savings Plan .  “ Savings Plan ” means the California Resources Corporation Savings Plan, as amended from time to time.

 

Savings Plan Restoration Account .  “ Savings Plan Restoration Account ” means the account maintained on the books of account of the Company to reflect a CRC MDCP Participant’s account balance, if any, transferred to the Plan as of the Effective Date from such Participant’s “Savings Plan Restoration Account” maintained under the OPC MDCP.  The Savings Plan Restoration Account also includes the contributions made by the Company on behalf of a Participant from and after the Effective Date pursuant to Section 4.5, and such amounts may be held in one or more subaccounts of the Savings Plan Restoration Account.

 

Separation Agreement .  “ Separation Agreement ” has the meaning assigned to such term in Article I.

 

Separation from Service .  “ Separation from Service ” means a Participant’s “separation from service” as defined under Code Section 409A and Treas. Reg. § 1.409A-1(h) (or successor provisions) from the Company.

 

Specified Employee .  “ Specified Employee ” means an employee who is a “specified employee” within the meaning of Section 409A and Treas. Reg. § 1.409A-1(i) (or successor provisions) and as determined pursuant to any rules adopted for such purposes by CRC Services.

 

Spin-Off .  “ Spin-Off ” has the meaning assigned to such term in Article I.

 

Termination Benefit .  “ Termination Benefit ” means the payment to a Participant of the value of the Participant’s Deferral Accounts pursuant to Section 5.1 on account of the Participant’s Separation from Service other than due to Retirement or death.

 

2005 DCP .  “ 2005 DCP ” means the Occidental Petroleum Corporation 2005 Deferred Compensation Plan, restated as of January 1, 2005 and as subsequently amended.

 

Unforeseeable Emergency .  “ Unforeseeable Emergency ” means a severe financial hardship to the Participant resulting from an illness or accident of the Participant, the Participant’s spouse, or a dependent (as defined in Code Section 152, without regard to Code Sections 152(b)(1), (b)(2) and (d)(1)(B)) of the Participant, loss of the Participant’s property due to casualty, or other similar extraordinary and unforeseeable circumstances arising as a result of events beyond the control of the Participant.

 

ARTICLE III
ADMINISTRATION OF THE PLAN

 

A Committee shall be appointed by the Board to administer the Plan and establish, adopt, or revise such rules and regulations as the Committee may deem necessary or advisable for the administration of the Plan and to interpret the provisions of the Plan, and, except as otherwise indicated herein, any such interpretations shall be conclusive and binding.  All decisions of the Committee shall be by vote of at least two of the Committee members and shall be final.  The Committee may appoint any agent and delegate to such agent such powers and duties in connection with the administration of the Plan as the Committee may from time to time

 

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prescribe.  The Plan is intended to comply with the requirements of Code Section 409A and shall be interpreted and administered accordingly.

 

Members of the Committee shall be eligible to participate in the Plan while serving as members of the Committee, but a member of the Committee shall not vote or act upon any matter which relates solely to such member’s interest in the Plan as a Participant.

 

ARTICLE IV
PARTICIPATION

 

4.1                                Election to Participate .

 

(a)                                  CRC MDCP Participants .  Notwithstanding any provision in the Plan to the contrary, the participation in the Plan of each CRC MDCP Participant shall be subject to the following:

 

(i)                                      The CRC MDCP Participant shall become an Eligible Employee and a Participant as of the Effective Date;

 

(ii)                                   All deferral elections made by the CRC MDCP Participant under the OPC MDCP for calendar year 2014 that were in effect immediately prior to the Effective Date shall remain in effect under the Plan for the Plan Year that begins on the Effective Date;

 

(iii)                                All time and form of payment elections (including, without limitation, elections with respect to “Early Payment Benefits” under the OPC MDCP) made by the CRC MDCP Participant under the OPC MDCP that were in effect immediately prior to the Effective Date shall continue in effect under the Plan, shall be treated as elections under the Plan, and may be changed only in accordance with the provisions of Sections 5.1(b)(iii) and (iv);

 

(iv)                               All Beneficiary designations and time and form of payment elections relating to the distribution of benefits to Beneficiaries made by the CRC MDCP Participant under the OPC MDCP that were in effect immediately prior to the Effective Date shall continue in effect under the Plan, shall be treated as elections under the Plan, and may be changed only in accordance with the provisions of Sections 5.2(c); and

 

(v)                                  Subaccounts shall be maintained under the CRC MDCP Participant’s Deferral Accounts to the extent necessary to reflect the matters described in clauses (ii), (iii) and (iv) above.

 

(b)                                  Deferral Elections .  Elections under this Section 4.1(b) and under Section 4.1(c) may be made only with respect to Plan Years beginning on or after January 1, 2015.  An Eligible Employee may elect to participate in the Plan and elect to defer annual Base Salary and/or Bonus under the Plan by filing with the Committee a completed and fully executed Deferral Election Form prior to the beginning of the Plan Year during which the Eligible Employee performs the services for which such Base Salary and Bonus are to be earned, or at such other time as the Committee may permit in accordance with the regulations promulgated under Code Section 409A.  Such Deferral Election Forms must be filed in accordance with the

 

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instructions set forth in the Deferral Election Forms and will become irrevocable as of the day immediately preceding the Plan Year to which they relate.

 

An employee who first becomes an Eligible Employee during a Plan Year may make an initial deferral election under the Plan within 30 days after the date the employee becomes an Eligible Employee provided that such Eligible Employee has not previously become eligible to participate in any other account balance plan that is required to be aggregated with the Plan as described in Treas. Reg. § 1.409A-1(c)(2) (or any successor provision).  Any such election shall apply to Base Salary earned for services performed after the 30-day election window described in the previous sentence and to that portion of the Bonus earned during such Plan Year equal to the total amount of the Bonus multiplied by the ratio of the number of days remaining in the Plan Year after the 30-day election window described in the previous sentence ends over the total number of days in the Plan Year.  Any such election shall become irrevocable at the end of the 30-day election window described in the first sentence of this paragraph.

 

A Deferral Election Form filed for a Plan Year shall be effective for Base Salary and/or Bonus to be earned during that Plan Year only.  For each subsequent Plan Year, an Eligible Employee who wishes to defer Base Salary and/or Bonus must file a new complete and fully executed Deferral Election Form in accordance with the instructions set forth in the Deferral Election Form but in any event prior to January 1 of such Plan Year.

 

Each Deferral Election Form will designate the DCP Deferral Amounts as a fixed dollar amount or fixed percentage (in increments of 1%) of Base Salary and/or (i) a fixed dollar amount or a fixed percentage of Bonus or (ii) 100% of any Bonus exceeding a specified dollar amount, as elected by the Participant.  Deferrals of Base Salary will normally be deducted ratably during the Plan Year, except as otherwise determined by the Committee to take into account special circumstances; provided that in no event will the Committee’s action alter the total amount of deferrals for the Plan Year.  In its sole discretion, the Committee may also permit amounts that an Eligible Employee has previously elected to defer under other plans or agreements with the Company to be transferred to the Plan and credited to his Deferral Accounts that are maintained hereunder, provided that no change shall be made in the time or form of payment of such transferred amounts except as may be permitted by Code Section 409A.

 

(A)                                Minimum Deferral .  For each Plan Year, the minimum amount of Base Salary that a Participant may elect to defer is $5,000, if expressed as a dollar amount, or 5% of Base Salary, if expressed as a percentage, and the minimum amount of Bonus that a Participant may elect to defer is any of the following:  (I) $5,000, (II) 5% of Bonus, or (III) 100% of that portion of any Bonus that exceeds a dollar amount specified by the Participant on his Deferral Election Form.

 

(B)                                Maximum Deferral .  For each Plan Year, the maximum amount of Base Salary that a Participant may elect to defer is 75% of Base Salary, and the maximum amount of Bonus that a Participant may elect to defer is 90% of Bonus.  Notwithstanding the foregoing, for each Plan Year, the maximum total amount of Compensation that a Participant may elect to defer is $75,000 and such limit shall apply to amounts of Base Salary and Bonus earned in any one Plan Year.  For example, in Plan Year 2015, the $75,000 limit shall first apply to deferrals of Base Salary that would have

 

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otherwise been paid in 2015 and then to deferrals of Bonus that are earned in 2015 and would otherwise be payable in 2016.

 

(C)                                Deferral Account Balance .  Notwithstanding anything herein to the contrary, if as of December 31 of any Plan Year, a Participant’s total Deferral Account balance is $1,000,000 or more, then the Participant may not defer any compensation earned in the following Plan Year and any election to do so shall be considered void.  If as of December 31 of any Plan Year, a Participant’s total Deferral Account balance is less than $1,000,000, then the Participant may defer compensation earned in the following Plan Year in accordance with this Article IV.

 

(c)                                   Early Payment Benefit Election .  On the Deferral Election Form filed pursuant to Section 4.1(b), an Eligible Employee may irrevocably elect to receive all or a portion of the Base Salary and/or Bonus deferred pursuant to that election in a lump sum payment or in annual installments over two (2) to five (5) years commencing prior to Separation from Service in an Early Payment Year.  If a Participant fails to designate the form of distribution for an Early Payment Benefit, the distribution shall be in the form of a lump sum.  The Early Payment Year elected must be a year that begins at least two (2) years after the end of each Plan Year to which the election applies.  An Early Payment Benefit election filed for the Plan Year shall be effective for the deferred Base Salary and/or Bonus earned during that Plan Year.  A Participant may make an election for an Early Payment Benefit with respect to deferred Base Salary and/or Bonus earned in any future Plan Year by filing a new Deferral Election Form with the Committee prior to January 1 of such Plan Year.  A Participant may not, however, change the form of benefit or time of commencement of an Early Payment Benefit with respect to Base Salary and/or Bonus deferred pursuant to a Deferral Election Form after that Deferral Election is filed pursuant to Section 4.1(b).

 

A Participant may not at any time have Early Payment Benefits scheduled for more than two Early Payment Years.  However, after an Early Payment Year has occurred and all payments with respect to the corresponding Early Payment Year election have been completed, a Participant may elect a new Early Payment Year for future deferrals of Base Salary and/or Bonuses.  For purposes of applying the limitations described in this paragraph, elections with respect to “Early Payment Benefits” under the OPC MDCP made by a CRC MDCP Participant shall be counted.

 

4.2                                DCP Deferral Accounts .  The Committee shall establish and maintain a separate DCP Deferral Account for each Participant.  A DCP Deferral Amount shall be credited by the Company to the Participant’s DCP Deferral Account, subject to the Committee’s authority in Section 4.1(b), as of the date that the Participant’s Base Salary and/or Bonus would otherwise have been paid.  Such DCP Deferral Account shall be debited by the amount of any payments made by the Company to the Participant or the Participant’s Beneficiary therefrom as of the date of payment.  The Committee shall establish an Early Payment Year Subaccount within a Participant’s DCP Deferral Account for each Early Payment Year elected by that Participant.  Any such Early Payment Year Subaccount shall be debited by the amount of any Early Payment Benefit paid by the Company to the Participant pursuant to Section 5.3 as of the date of payment.

 

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4.3                                Interest .  Each Deferral Account of a Participant shall be deemed to bear interest on the monthly balance of such Deferral Account at the Declared Rate, compounded monthly.  Interest will be credited to each Deferral Account on a monthly basis on the last day of each month as long as any amount remains credited to such Deferral Account.  Amounts of deferred Compensation that are credited to a DCP Deferral Account prior to the end of a calendar month shall accrue interest from the date of crediting, computed from date of crediting to the end of the month.

 

4.4                                Valuation of Deferral Accounts .  The value of a Deferral Account as of any date shall equal the amounts previously credited to such Deferral Account less any payments debited to such Deferral Account plus the interest deemed to be earned on such Deferral Account in accordance with Section 4.3 through the end of the preceding month.

 

4.5                                Savings Plan Restoration Contribution .

 

(a)                                  General Rule .  For each Plan Year, the Company shall credit to the Savings Plan Restoration Account of each Participant an amount equal to the amount by which the matching employer contribution and other non-elective employer contribution that would otherwise have been made by the Company on behalf of the Participant to the Savings Plan for such Plan Year is reduced by reason of the reduction in the Participant’s Compensation (as defined in the Savings Plan) for such Plan Year because of deferrals under this Plan (which amount shall be determined in accordance with the remaining paragraphs of this Section 4.5(a)).  Such amount shall be credited to the Savings Plan Restoration Account of each Participant for each Plan Year at the same time as the Company matching employer contribution and other non-elective employer contribution for such Plan Year is made to the Savings Plan.

 

The amount to be allocated relating to the Plan Year with respect to a Participant’s matching employer contribution under the Savings Plan shall equal seven percent (7%) multiplied by the amount of Compensation the Participant has deferred under this Plan for the Plan Year.

 

The amount to be allocated relating to the Plan Year with respect to a Participant’s other nonelective employer contribution under the Savings Plan shall equal twelve percent (12%) multiplied by the amount of Compensation the Participant has deferred under this Plan for the Plan Year.

 

(b)                                  Vesting .  A Participant’s interest in any credit to his Savings Plan Restoration Account relating to matching employer contributions pursuant to Section 4.5(a) and earnings thereon shall be immediately vested.

 

A Participant’s interest in any credit to his Savings Plan Restoration Account relating to other nonelective employer contributions pursuant to Section 4.5(a) and earnings thereon shall vest at the same rate and at the same time as would have been the case had such contribution been made to the Savings Plan.

 

Notwithstanding anything contained herein to the contrary, if, upon a Participant’s Separation from Service, the Participant has not or does not become 100% vested in his Savings

 

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Plan Restoration Account, the unvested portion of his Savings Plan Restoration Account shall be forfeited prior to the determination of the amount of any benefits under Article V.

 

4.6                                Vesting of Deferral Accounts .  Except as provided in Section 4.5(b), each Participant shall be 100% vested in his Deferral Accounts at all times.

 

4.7                                Statement of Deferral Accounts .  The Committee shall submit to each Participant, within 120 days after the close of each Plan Year, a statement in such form as the Committee deems desirable, setting forth the Participant’s Deferral Account(s).

 

ARTICLE V
BENEFITS

 

5.1                                Separation from Service for a Reason other than Death .

 

(a)                                  Form and Time of Benefit .  Except as otherwise provided in this Section 5.1 and Section 5.3, upon a Participant’s Separation from Service for a reason other than death (including Retirement), the Company shall pay to the Participant in a single lump sum within the first 90 days of the calendar year following the year of the Participant’s Separation from Service an amount equal to the value of the Participant’s Deferral Accounts as of the end of the month preceding payment.  Any Retirement Benefit paid in annual installments pursuant to Section 5.1(b) shall be paid within the first 90 days of each calendar year, beginning with the year following the Participant’s Retirement, and shall be determined based on the value of the Participant’s Deferral Accounts as of the last day of the month preceding payment.  Notwithstanding anything herein to the contrary, in the event that a Participant who is a Specified Employee is entitled to a distribution from the Plan upon or by virtue of such Participant’s Separation from Service for a reason other than death, the lump sum payment or the first annual installment payment, as the case may be, shall be paid in the month next following the date that is six (6) months after the date of the Participant’s Separation from Service, if later than the time provided above.  Any additional installment payments shall be paid within the first 90 days of each subsequent calendar year.

 

(b)                                  Retirement .  (i) On a Distribution Election Form filed simultaneously with and in the same manner as the first Deferral Election Form that a Participant is required to file in accordance with the requirements set forth in Section 4.1(b) hereof, a Participant (A) may elect to have the Retirement Benefit, but which will not include any amounts attributable to an Early Payment Year Subaccount if Separation from Service occurs after the beginning of the relevant Early Payment Year, paid to him in a lump sum or annual payments for any other number of years between two (2) and twenty (20) years, and (B) may elect to have the amount of each annual installment determined under either the Amortization Method or the Fractional Method.  If a Participant fails to elect either the Amortization Method or the Fractional Method, such Participant shall be deemed to have elected the Fractional Method.  Notwithstanding the foregoing, the preceding provisions of this Section 5.1(b) shall not apply to a CRC MDCP Participant and, in accordance with Section 4.1(a)(iii), such a Participant’s elections under the OPC MDCP that were in effect immediately prior to the Effective Date shall continue in effect under the Plan, shall be treated as elections under the Plan, and may only be changed in accordance with the provisions of Section 5.1(b)(iii) and (iv).

 

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(ii)                                   Notwithstanding anything herein to the contrary, an election to receive distribution in a series of annual installments shall be treated as a single payment for purposes of Code Section 409A.

 

(iii)                                Subject to Section 5.1(b)(iv), a Participant may change his election as to the form of Retirement distribution under the Plan subject to the following conditions:  (A) the election shall not be effective until twelve (12) months after the election is filed with the Committee; (B) the election must defer the lump sum payment or the initial amount of an installment payment for a period of at least five (5) years from the date that the lump sum payment or initial amount of the installment payment, as the case may be, was otherwise payable; and (C) the election must be made at least twelve (12) months prior to the beginning of the calendar year in which the lump sum payment or initial amount of the installment payment, as the case may be, would have been payable if no change as to the form of distribution were ever made.

 

(iv)                               A Participant may only make two changes pursuant to Section 5.1(b)(iii).  Each such change must satisfy all of the requirements of Section 5.1(b)(iii).  No further changes may be made following a Participant’s Separation from Service.

 

(c)                                   Separation Prior to Retirement .  If a Participant’s Separation from Service is for any reason other than Retirement or death, then the Participant shall receive a Termination Benefit in a lump sum as provided in Section 5.1(a).

 

5.2                                Beneficiary Benefits .

 

(a)                                  If a Participant’s Separation from Service is due to death, the Company will pay to the Participant’s Beneficiary in a single lump sum a Beneficiary Benefit that is an amount equal to the value of the Participant’s Deferral Accounts (other than his or her Early Payment Year Subaccount attributable to an Early Payment Year beginning before the date of the Participant’s death (if any)).

 

(b)                                  Notwithstanding the foregoing, if a Participant’s Separation from Service is due to death after attaining age 55, payment to his Beneficiary (other than payment of his or her Early Payment Year Subaccount attributable to an Early Payment Year beginning before the date of the Participant’s death (if any)) shall be made in the same form as payment of the Participant’s Retirement Benefit would have been made to the Participant if he were living.

 

(c)                                   Notwithstanding the foregoing, a Participant may elect, on a Beneficiary Distribution Election Form filed simultaneously with and in the same manner as the first Deferral Election Form that the Participant is required to file in accordance with the requirements set forth in Section 4.1(b) hereof, that, if his Separation from Service is due to death prior to attaining age 55, payment to his Beneficiary (other than amounts in his or her Early Payment Year Subaccount attributable to an Early Payment Year beginning before the date of the Participant’s death (if any)) shall be made in any form and calculated in any other manner described in Section 5.1(b) (which may be different than the form of payment elected by the Participant for his Retirement Benefit).  The provisions of the preceding sentence shall not apply to a CRC MDCP Participant and, in accordance with Section 4.1(a)(iv), such a Participant’s elections under the OPC MDCP

 

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that relate to the distribution of benefits to Beneficiaries and that were in effect immediately prior to the Effective Date shall continue in effect under the Plan, shall be treated as elections under the Plan, and may only be changed in accordance with the remaining provisions of this Section 5.2(c).  A Participant may change his election as to the form of payment to his Beneficiary subject to the following conditions:  (1) the election shall not be effective until twelve (12) months after the election is filed with the Committee and (2) the election must be made at least twelve (12) months prior to the beginning of the calendar year in which the lump sum payment or initial amount of the installment payment, as the case may be, would have been payable if no change as to the form of distribution were ever made.  Each such change must satisfy all of the requirements of this Section 5.2(c).

 

(d)                                  If a Participant dies after Separation from Service but before commencement or completion of his benefits under the Plan, payment to his Beneficiary shall be made in the same amount, at the same time and in the same form as payment would have been made to the Participant under the Plan if he were living.  If installment payments to the Participant have already commenced, then the remaining installments (if any) shall be paid to his Beneficiary in the same amounts and at the same times as such remaining installments would have been paid to the Participant if he were living.

 

(e)                                   The payment or payments to a Beneficiary of a deceased Participant under Section 5.2(a), (b) or (c) shall be made or commence during the first 90 days of the calendar year following the year in which the Participant’s death occurred, with any subsequent installments paid within the first 90 days of each subsequent calendar year, and the amount of such payment shall be equal to, or determined based on, the value of the Participant’s Deferral Accounts as of the end of the month preceding payment.

 

(f)                                    In the event that the Beneficiary of a deceased Participant dies prior to the completion of payments under the Plan to that Beneficiary, then the remaining payments shall be paid to that Beneficiary’s estate in the same amounts and at the same times as such payments would have been paid to the Beneficiary if he were living.

 

5.3                                Early Payment .  Payment of the amounts credited to any Early Payment Year Subaccount of a Participant shall be paid or commence to be paid within the first 90 days of the year elected as the Early Payment Year in accordance with the Participant’s election under Section 4.1(c) (or, if applicable, under the Prior Plans), with any subsequent annual payments paid in the first 90 days of each applicable year.  The amount of each annual installment will be determined under the Fractional Method unless the Participant otherwise irrevocably elects the Amortization Method at the time of making the Early Payment Benefit election.

 

Notwithstanding the foregoing, if a Participant has a Separation from Service for any reason prior to the Early Payment Year elected by the Participant, the election made by the Participant to receive the Early Payment Benefit shall terminate and the amount credited to the Participant’s Early Payment Year Subaccount shall be paid, together with the other amounts credited to the Participant’s Deferral Account, as set forth in Section 5.1 or 5.2, as the case may be.  If the Participant has a Separation from Service for any reason after the start of the Early Payment Year but before the commencement or completion of the Early Payment Benefit, the benefit or remaining benefit attributable to the relevant Early Payment Year Subaccount shall be

 

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paid to the Participant (or his Beneficiary) in accordance with the Participant’s Early Payment Benefit election without regard to the Participant’s Separation from Service (i.e., once the Early Payment Year is reached, the Participant’s subsequent Separation from Service for any reason shall not affect the payment of the relevant Early Payment Year Subaccount).

 

5.4                                Emergency Benefit .  In the event that the Committee, upon written petition of the Participant, determines in its sole discretion that the Participant has suffered an Unforeseeable Emergency, the Company shall pay to the Participant, as soon as practicable following such determination, an Emergency Benefit that does not exceed the amount reasonably necessary to satisfy such Unforeseeable Emergency plus amounts necessary to pay taxes reasonably anticipated as a result of the distribution, after taking into account the extent to which such hardship is or may be relieved through reimbursement or compensation by insurance or otherwise or by liquidation of the Participant’s assets to the extent the liquidation of such assets would not itself cause severe financial hardship and the additional compensation available to the Participant upon the termination of the Participant’s current deferral elections under the Plan, as described in the following paragraph of this Section 5.4.

 

Whenever a Participant receives a distribution under this Section 5.4, the Participant will be deemed to have revoked all current deferral elections under the Plan effective as of the date of the distribution.  The Participant will not be permitted to participate in the next enrollment period under the Plan and will be precluded from electing to make new deferrals under the Plan for a minimum period of one (1) year (or such lesser period as the Committee may permit) following receipt of the distribution.  Such new election shall comply with the provisions of Section 4.1(b).

 

5.5                                Effect of Change in Control .  In the event of a Change in Control, the Board may, in its sole discretion, within the 30 days preceding such Change in Control, irrevocably take action to terminate and liquidate the Plan, provided that the requirements of Treas. Reg. § 1.409A-3(j)(4)(ix)(B) (or any successor provision) are satisfied.

 

5.6                                Small Benefit .  Notwithstanding any election by a Participant to receive payment of any account maintained for the Participant under the Plan in an installment payment form, if the value of such account is less than $50,000 at the time payment in such form is scheduled to commence under Section 5.1 or 5.2, the account shall be paid to the Participant in a single lump sum on the scheduled commencement date.  This provision shall not apply to any Early Payment Year Subaccount that is being paid pursuant to an Early Payment Benefit election.

 

5.7                                Tax Withholding and Reporting .

 

(a)                                  To the extent required by the law in effect at the time payments are made, the Company shall withhold from payments made hereunder the taxes required to be withheld by Federal, state and local law.

 

(b)                                  The Company shall have the right at its option to (i) require a Participant to pay or provide for payment of the amount of any taxes that the Company may be required to withhold with respect to interest or other amounts that the Company credits to a Participant’s Deferral Accounts or (ii) deduct from any amount of salary, bonus or other payment otherwise payable in cash to the Participant the amount of any taxes that the Company may be required to

 

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withhold with respect to interest or other amounts that the Company credits to a Participant’s Deferral Accounts.  In addition, as permitted by Treas. Reg. § 1.409A-3(j)(4)(vi) (or any successor provision), payments may be made under the Plan to pay any Federal Insurance Contributions Act (FICA) tax imposed under Code Sections 3101 and 3121(v)(2) on the Participant’s Deferral Accounts, and to pay any income tax imposed under Code Section 3401 (i.e., wage withholding) or the corresponding withholding provisions of applicable state or local law as a result of payment of the FICA amount, as well as to pay the additional income tax attributable to the pyramiding wages and taxes.  The total payment may not exceed the aggregate FICA tax amount and the income tax withholding related to such FICA tax amount.

 

5.8                                Reemployment .

 

(a)                                  If, after a Participant’s Separation from Service, such Participant is reemployed by the Company prior to the payment of his benefits in a cash lump sum payment or while he is receiving benefits in the form of annual installment payments, the payment of the lump sum amount or the future installments, as the case may be, shall be made as scheduled without regard to the Participant’s reemployment.

 

(b)                                  A reemployed Participant may elect to again participate in the Plan and to defer additional Base Salary and/or Bonus as provided in Section 4.1, in which case a new Deferral Account shall be established for such Participant to which allocations relating to the period following the Participant’s re-employment shall be credited.  The Participant also shall be permitted to file a new Distribution Election Form, simultaneously with and in the same manner as the first Deferral Election Form that the Participant files upon his reemployment, governing the payment of his new Retirement Benefit in accordance with Section 5.1(b) and payment to his Beneficiary in accordance with Section 5.2(c).

 

5.9                                Qualified Divorce Orders .  Subject to the policies and procedures established by the Committee under Section 9.3(b) hereof and the provisions of the Plan, benefits may be paid from the balance of a Participant’s Deferral Account(s) in accordance with a Qualified Divorce Order.

 

ARTICLE VI
BENEFICIARY DESIGNATION

 

Each Participant shall have the right, at any time, to designate any person or persons as the Beneficiary to whom payments under the Plan shall be made in the event of the Participant’s death prior to complete distribution to the Participant of the benefits due under the Plan.  Each Beneficiary designation shall become effective only when filed in writing with the Committee during the Participant’s lifetime on a paper form prescribed by the Committee.

 

The filing of a new Beneficiary designation form will cancel any inconsistent Beneficiary designation previously filed.

 

If a Participant fails to designate a Beneficiary as provided above, or if all designated Beneficiaries predecease the Participant, any benefits remaining unpaid shall be paid in accordance with the Participant’s Beneficiary designation under the Savings Plan, and if there is no such valid Beneficiary designation, to the Participant’s then surviving spouse, or if none, to

 

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the Participant’s estate, unless directed otherwise by the court that has jurisdiction over the assets belonging to the Participant’s probate estate.

 

ARTICLE VII
CLAIMS PROCEDURE

 

7.1                                Applications for Benefits .  All applications for benefits under the Plan shall be submitted to CRC Services, LLC, Attention:  Deferred Compensation Plan Committee, at the address of CRC Services’ principal office.  Applications for benefits must be in writing on the forms prescribed by the Committee and must be signed by the Participant, or in the case of a Beneficiary Benefit, by the Beneficiary or legal representative of the deceased Participant.

 

7.2                                Claims Procedure .

 

(a)                                  Within a reasonable period of time, but not later than 90 days after receipt of a claim for benefits, the Committee or its delegate shall notify the claimant of any adverse benefit determination on the claim, unless special circumstances require an extension of time for processing the claim.  In no event may the extension period exceed 90 days from the end of the initial 90-day period.  If an extension is necessary, the Committee or its delegate shall provide the claimant with a written notice to this effect prior to the expiration of the initial 90-day period.  The notice shall describe the special circumstances requiring the extension and the date by which the Committee or its delegate expects to render a determination on the claim.

 

(b)                                  In the case of an adverse benefit determination, the Committee or its delegate shall provide to the claimant written or electronic notification setting forth in a manner calculated to be understood by the claimant (i) the specific reason or reasons for the adverse benefit determination; (ii) reference to the specific Plan provisions on which the adverse benefit determination is based; (iii) a description of any additional material or information necessary for the claimant to perfect the claim and an explanation of why the material or information is necessary; and (iv) a description of the Plan’s claim review procedures and the time limits applicable to such procedures, including a statement of the claimant’s right to bring a civil action under Section 502(a) of ERISA following an adverse final benefit determination on review and in accordance with Section 7.4.

 

(c)                                   Within 60 days after receipt by the claimant of notification of the adverse benefit determination, the claimant or his duly authorized representative, upon written application to the Committee, may request that the Committee fully and fairly review the adverse benefit determination.  On review of an adverse benefit determination, upon request and free of charge, the claimant shall have reasonable access to, and copies of, all documents, records and other information relevant to the claimant’s claim for benefits.  The claimant shall have the opportunity to submit written comments, documents, records, and other information relating to the claim for benefits.  The Committee’s (or delegate’s) review shall take into account all comments, documents, records, and other information submitted regardless of whether the information was previously considered in the initial adverse benefit determination.

 

(d)                                  Within a reasonable period of time, but not later than 60 days after receipt of such request for review, the Committee or its delegate shall notify the claimant of any final

 

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benefit determination on the claim, unless special circumstances require an extension of time for processing the claim.  In no event may the extension period exceed 60 days from the end of the initial 60-day period.  If an extension is necessary, the Committee or its delegate shall provide the claimant with a written notice to this effect prior to the expiration of the initial 60-day period.  The notice shall describe the special circumstances requiring the extension and the date by which the Committee or its delegate expects to render a final determination on the request for review.  In the case of an adverse final benefit determination, the Committee or its delegate shall provide to the claimant written or electronic notification setting forth in a manner calculated to be understood by the claimant (i) the specific reason or reasons for the adverse final benefit determination; (ii) reference to the specific Plan provisions on which the adverse final benefit determination is based; (iii) 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 relevant to the claimant’s claim for benefits; and (iv) a statement of the claimant’s right to bring a civil action under Section 502(a) of ERISA following an adverse final benefit determination on review and in accordance with Section 7.4.

 

7.3                                Section 409A Compliance .  Any claim for benefits under this Article must be made by the claimant no later than the time prescribed by Treas. Reg. § 1.409A-3(g) (or any successor provision).  If a claimant’s claim or appeal is approved, any resulting payment of benefits will be made no later than the time prescribed for payment of benefits by Treas. Reg. § .409A-3(g) (or any successor provision).

 

7.4                                Limitations on Actions .  No legal action may be commenced prior to the completion of the benefit claims procedure described herein.  In addition, no legal action may be commenced after the later of (a) 180 days after receiving the written response of the Committee to an appeal, or (b) 365 days after an applicant’s original application for benefits.

 

ARTICLE VIII
AMENDMENT AND TERMINATION OF PLAN

 

8.1                                Amendment .  The Board may amend the Plan in whole or in part at any time for any reason, including but not limited to, tax, accounting or other changes, which may result in termination of the Plan for future deferrals.  Without limiting the scope of the preceding sentence, the Board may amend the Plan to (a) ensure that the Plan complies with the requirements of Code Section 409A for deferral of taxation on compensation deferred hereunder until the time of distribution and (b) add provisions for changes to deferral elections and elections as to time and manner of distributions and other changes that comply with the requirements of Code Section 409A for the deferral of taxation on deferred compensation until the time of distribution.  The Committee appointed pursuant to Article III, in its discretion, may amend the Plan if the Committee determines that such amendment does not significantly increase or decrease Plan benefits or costs.  Notwithstanding the foregoing, except for any amendment required to preserve the deferral of taxation of amounts deferred under the Plan, no amendment shall reduce the amounts that have been credited to the Deferral Account(s) of any Participant prior to the date such amendment is adopted.  Any amendment that would either change the terms of the amendment provisions of this Section 8.1 or the terms of the termination provisions of Section 8.2 shall not be effective prior to the date that is two years after the date such amendment is adopted, unless the amendment is required by a change in the tax or other

 

18

 

applicable laws or accounting rules, or the amendment is required in order to preclude any amounts deferred under the Plan from being included in the income of Participants prior to a date of distribution as specified under the Plan.  Notwithstanding the foregoing, following a Change in Control, no amendment shall (x) reduce the amounts that have been credited to the Deferral Account(s) of any Participant prior to the date such amendment is adopted; or (y) change the terms of the amendment provisions of this Section 8.1 or the terms of the termination provisions of Section 8.2.

 

8.2                                Termination .

 

(a)                                  Company’s Right to Terminate .  The Board may terminate the Plan at any time, if in the Board’s judgment, the continuance of the Plan would not be in the Company’s best interest due to tax, accounting or other effects thereof, or potential payouts thereunder, or other reasons, provided that any termination of the Plan shall not be effective prior to the date that is two years after the date the Board adopts a resolution to terminate the Plan, unless (i) the termination of the Plan is required by a change in the tax or other applicable laws or accounting rules, or (ii) the Participants have become subject to tax on the amounts deferred under the Plan.  Notwithstanding the foregoing, following a Change in Control, the Plan may not be terminated prior to the date that is three years after the date the Change in Control occurs, or, if earlier, the date on which amounts deferred under the Plan have become taxable to Participants.  In the event the Board adopts a resolution terminating the Plan, the Board or the Committee shall determine the date as of which deferral elections shall cease to have effect in accordance with the requirements of Code Section 409A.

 

(b)                                  Payments Upon Termination .  Distributions to the Participants or their Beneficiaries shall be made on the dates on which the Participants or their Beneficiaries would receive benefits hereunder without regard to the termination of the Plan, except that payments may, in the discretion of the Board, be accelerated if:

 

(A)                                The Plan is terminated and liquidated pursuant to Section 5.5 of the Plan;

 

(B)                                Accelerated payment is otherwise permitted by Treas. Reg. § 1.409A-3(j)(4)(ix) (or any successor provision) or other guidance issued by the Secretary of the Treasury, or

 

(C)                                The Plan is terminated because Participants have become subject to tax on their deferrals due to the Plan’s failure to satisfy the requirements of Code Section 409A.  Payment to a Participant may not exceed the amount required to be included in income as a result of such failure.

 

ARTICLE IX
MISCELLANEOUS

 

9.1                                Unsecured General Creditor .  The rights of a Participant, Beneficiary, or their heirs, successors, and assigns, as relates to any Company promises hereunder, shall not be secured by any specific assets of the Company, nor shall any assets of the Company be designated as attributable or allocated to the satisfaction of such promises.

 

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9.2                                Trust Fund .  The Company shall be responsible for the payment of all benefits provided under the Plan.  At its discretion, the Company may establish one or more trusts, with such trustees as the Board or Committee may approve, for the purpose of providing for the payment of such benefits.  Such trust or trusts may be irrevocable, but the assets thereof shall be subject to the claims of the Company’s creditors.  To the extent any benefits provided under the Plan are actually paid from any such trust, the Company shall have no further obligation with respect thereto, but to the extent not so paid, such benefits shall remain the obligation of, and shall be paid by, the Company.  No assets shall be transferred to a trust if such transfer would result in the taxation of benefits prior to distribution under Code Section 409A(b).

 

9.3                                Nonassignability .

 

(a)                                  Neither a Participant nor any other person shall have any right to commute, sell, assign, transfer, pledge, anticipate, mortgage or otherwise encumber, hypothecate or convey in advance of actual receipt the amounts, if any, payable hereunder, or any part thereof, or interest therein which are, and all rights to which are, expressly declared to be unassignable and non-transferable.  No part of the amounts payable shall, prior to actual payment, be subject to seizure or sequestration for the payment of any debts, judgments, alimony or separate maintenance owed by a Participant or any other person, nor be transferable by operation of law in the event of a Participant’s or any other person’s bankruptcy or insolvency.

 

(b)                                  Notwithstanding subsection (a), the right to benefits payable with respect to a Participant pursuant to a Qualified Divorce Order may be created, assigned, or recognized.  The Committee shall establish appropriate policies and procedures to determine whether a Divorce Order presented to the Committee constitutes a Qualified Divorce Order under the Plan, and to administer distributions pursuant to the terms of Qualified Divorce Orders.  In the event that a Qualified Divorce Order exists with respect to benefits payable under the Plan, such benefits otherwise payable to the Participant specified in the Qualified Divorce Order shall be payable to the Alternate Payee specified in such Qualified Divorce Order.

 

9.4                                Release from Liability to Participant .  A Participant’s right to receive benefits under the Plan shall be reduced to the extent that any portion of a Participant’s Deferral Account(s) has been paid or set side for payment to an Alternate Payee pursuant to a Qualified Divorce Order.  The Participant shall be deemed to have released the Company and the Plan from any claim with respect to such amounts in any case in which (a) the Company, the Plan, or any Plan representative has been served with legal process or otherwise joined in a proceeding relating to such amounts, and (b) the Participant fails to obtain an order of the court in the proceeding relieving the Company and the Plan from the obligation to comply with the judgment, decree or order.

 

9.5                                Employment Not Guaranteed .  Nothing contained in the Plan nor any action taken hereunder shall be construed as a contract of employment or as giving any Participant any right to be retained in employment with the Company.  Accordingly, subject to the terms of any written employment agreement to the contrary, the Company shall have the right to terminate or change the terms of employment of a Participant at any time and for any reason whatsoever, with or without cause.

 

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9.6                                Gender, Singular & Plural .  All pronouns and any variations thereof shall be deemed to refer to the masculine or feminine as the identity of the person or persons may require.  As the context may require, the singular may be read as the plural and the plural as the singular.

 

9.7                                Captions .  The captions of the articles, sections, and paragraphs of the Plan are for convenience only and shall not control or affect the meaning or construction of any of its provisions.

 

9.8                                Validity .  In the event any provision of the Plan is held invalid, void, or unenforceable, the same shall not affect, in any respect whatsoever, the validity of any other provision of the Plan.

 

9.9                                Notice .  Any notice or filing required or permitted to be given to the Committee under the Plan shall be sufficient if in writing and hand delivered, or sent by registered or certified mail, to the principal office of the Company.  Such notice shall be deemed given as to the date of delivery or, if delivery is made by mail, as of the date shown on the postmark on the receipt for registration or certification.

 

9.10                         Applicable Law .  The Plan shall be governed by and construed in accordance with Code Section 409A, and any regulations promulgated thereunder, and in accordance with the laws of the State of California to the extent such laws are not preempted by ERISA.

 

[Signature on the following page.]

 

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IN WITNESS WHEREOF, CRC Services has executed this document this 1st day of December, 2014.

 

 

	CRC SERVICES, LLC
	By:	/s/ Daniel S. Watts
	Name:	Daniel S. Watts
	Title:	Vice President — Compensation and Benefits

 

Signature Page to Deferred Compensation Plan

 

Exhibit 10.3

 

California Resources Corporation

Supplemental Retirement Plan II

 

Effective as of December 1, 2014

 

 

Contents

 

Article 1. Introduction	1
1.1 Adoption of the Plan	1
1.2 Purpose of the Plan	1
1.3 Status of the Plan	1
1.4 Application of the Plan	2
Article 2. Definitions	3
2.1 Definitions	3
Article 3. Participation	11
3.1 Effective Date of Participation	11
3.2 No New Participants After November 30, 2014	11
3.3 Allocations to Participants	11
Article 4. Benefits	12
4.1 Allocations Relating to the Annual Additions Limit	12
4.2 Allocations Relating to the Compensation Limit	12
4.3 Maintenance of Accounts	13
4.4 Vesting and Forfeiture	14
4.5 No New Allocations Relating to Plan Years After December 31, 2014	14
Article 5. Payments	15
5.1 Timing and Form of Payments	15
5.2 Payment Elections and Changes	16
5.3 Death	17
5.4 Small Benefits	17
5.5 Qualified Divorce Orders	18
5.6 Tax Withholding	18
5.7 Reemployment and Continued Distribution of Account	18
Article 6. Administration	19
6.1 The Administrative Committee	19
6.2 Compensation and Expenses	19
6.3 Manner of Action	19
6.4 Chairman, Secretary, and Employment of Specialists	19
6.5 Subcommittees	19
6.6 Other Agents	19
6.7 Records	20

 

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6.8 Rules	20
6.9 Powers and Duties	20
6.10 Decisions Conclusive	20
6.11 Fiduciaries	21
6.12 Notice of Address	21
6.13 Data	21
6.14 Adjustments	21
6.15 Member’s Own Participation	21
6.16 Indemnification	22
Article 7. Amendment and Termination	24
7.1 Amendment and Termination	24
7.2 Payments Upon Termination	24
7.3 Reorganization of Employer	24
Article 8. Claims and Appeals Procedures	25
8.1 Application for Benefits	25
8.2 Claims Procedure for Benefits	25
8.3 Limitations on Actions	27
Article 9. General Provisions	28
9.1 Unsecured General Creditor	28
9.2 Trust Fund	28
9.3 Nonassignability	28
9.4 Release from Liability to Participant	28
9.5 Employment Not Guaranteed	29
9.6 Gender, Singular & Plural	29
9.7 Captions	29
9.8 Validity	29
9.9 Notice	29
9.10 Applicable Law	29

 

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Article 1. Introduction

 

1.1                                Adoption of the Plan

 

Occidental Petroleum Corporation, a Delaware corporation (“ OPC ”), and California Resources Corporation, a Delaware corporation (“ CRC ”), have entered into that certain Separation and Distribution Agreement, dated as of November 25, 2014, which generally governs the separation of CRC’s businesses from OPC’s other businesses and provides for, among other things, OPC’s distribution to holders of shares of OPC’s common stock, through a spin-off, of at least 80.1% of the outstanding shares of CRC’s common stock (the “ Spin-Off ”).  In connection with the Spin-Off, OPC and CRC have also entered into that certain Employee Matters Agreement, dated as of November 25, 2014 (the “ Employee Matters Agreement ”).  In connection with the Spin-off,  CRC Services, LLC, a Delaware limited liability company (“ CRC Services ”), establishes a supplemental retirement plan to assume the liabilities under the Occidental Petroleum Corporation Supplemental Retirement Plan II (the “ OPC SRPII ”) in respect of certain employees of CRC and its subsidiaries as of immediately prior to the effective time of the Spin-Off who were participants in the OPC SRPII as of such time (the “ CRC SRPII Participants ”).  In order to satisfy CRC’s obligations under the Employee Matters Agreement with respect to such liabilities, CRC Services hereby establishes this California Resources Corporation Supplemental Retirement Plan II (the “ Plan ”) effective as of December 1, 2014 (the “ Effective Date ”).

 

Notwithstanding any other Plan provision and except for earnings, no new allocations relating to the 2015 Plan Year and thereafter shall be made under this Plan.

 

1.2                                Purpose of the Plan

 

It was the purpose of the OPC SRPII to provide eligible employees with benefits that will compensate them for maximums imposed by law upon contributions to qualified plans.  The portion of the OPC SRPII reflecting credits to compensate for the maximum limits imposed by Code section 415 was intended to constitute an “excess plan” as defined in ERISA section 3(36).  The remaining portion of the OPC SRPII was intended to constitute a plan which was unfunded and maintained primarily for the purpose of providing deferred compensation to a select group of management or highly compensated employees and was intended to meet the exemptions provided in ERISA sections 201(2), 301(a)(3), and 401(a)(1), as well as the requirements of Department of Labor Regulation section 2520.104-23.  Thus, the Plan shall be administered and interpreted so as to meet the requirements of these exemptions and the regulation.

 

1.3                                Status of the Plan

 

(a)                                  Nonqualified Plan. The Plan is not qualified within the meaning of Code section 401(a). The Plan is intended to provide an unfunded and unsecured promise to pay money in the future and thus not to involve, pursuant to Treas. Reg. § 1.83-3(e), the transfer of “property” for purposes of Code section 83. Likewise, allocations

 

1

 

under this Plan to the account maintained for a Participant, and earnings credited thereon, are not intended to confer an economic benefit upon the Participant nor is the right to the receipt of future benefits under the Plan intended to result in any Participant, Beneficiary or Alternate Payee being in constructive receipt of any amount so as to result in any benefit due under the Plan being includible in the gross income of any Participant, Beneficiary or Alternate Payee in advance of the date on which payment of any benefit due under the Plan is actually made.

 

(b)                                  Compliance with Code Section 409A. This Plan is intended to comply with the requirements of Code section 409A and related regulatory guidance, so that the taxation of Participants and Beneficiaries on any compensation deferred under this Plan is deferred.  Notwithstanding the foregoing, any amounts that are credited and paid annually from a Participant’s account following the Participant’s attainment of a specified age, as described in Section 5.1(b)(1), are intended to qualify as short-term deferrals under Treas. Reg. § 1.409A-1(b)(4) (or any successor provision) and accordingly to be exempt from such requirements.

 

(c)                                   No Guarantees of Intended Tax Treatment. The Plan shall be administered and interpreted so as to satisfy the requirements for the intended tax treatment under the Code described in this section. However, the treatment of benefits earned under and benefits received from this Plan, for purposes of the Code and other applicable tax laws (such as state income and employment tax laws), shall be determined under the Code and other applicable tax laws and no guarantee or commitment is made to any Participant, Beneficiary or Alternate Payee with respect to the treatment of accruals under or benefits payable from the Plan for purposes of the Code and other applicable tax laws.

 

1.4                                Application of the Plan

 

This Plan is applicable only to CRC SRPII Participants.  All distributions made under the Plan on or after December 1, 2014 shall be made in accordance with the provisions of this Plan, as amended from time to time.

 

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Article 2. Definitions

 

2.1                                Definitions

 

Whenever the following words and phrases are used in the Plan with the first letter capitalized, they shall have the meanings specified below, unless the context clearly indicates otherwise:

 

(a)                                  “Administrative Committee” means the committee with authority to administer the Plan as provided under section 6.1.

 

(b)                                  “Affiliate” means CRC or:

 

(1)                                  Any corporation or other business organization while it is controlled by or under common control with CRC within the meaning of Code sections 414 and 1563;

 

(2)                                  Any member of an affiliated service group within the meaning of Code section 414(m) of which CRC or any Affiliate is a member;

 

(3)                                  Any entity which, pursuant to Code section 414(o) and related Treasury regulations, must be aggregated with CRC or any Affiliate for plan qualification purposes; or

 

(4)                                  Any corporation, trade or business which is more than 50 percent owned, directly or indirectly, by CRC and which is designated by the Board or, if authorized by the Board, the Administrative Committee as an Affiliate.

 

(c)                                   “Alternate Payee” means a former spouse of a Participant who is recognized by a Divorce Order as having a right to receive all, or a portion of, the benefits payable under this Plan with respect to the Participant.

 

(d)                                 “Annual Bonus Paid” means up to the first $100,000 of bonus paid to a Participant, who is not a “named executive officer”, as that term is defined in Regulations S-K under the Securities Exchange Act of 1934 (17 CFR §229.402(a)(3)), during the period beginning on January 1, 2014 and ending on November 30, 2014 under a regular annual incentive compensation plan, such as OPC’s Variable Compensation Program or Incentive Compensation Program (but excluding without limitation a special individual or group bonus, a project bonus, and any other special bonus).  For avoidance of doubt, “Annual Bonus Paid” means no more than $100,000 of bonus paid to a Participant, who is not a “named executive officer”, as that term is defined in Regulations S-K under the Securities Exchange Act of 1934 (17 CFR §229.402(a)(3)), during the period beginning on January 1, 2014 and ending on November 30, 2014 under any one or more regular annual incentive compensation plans.

 

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(e)                                   “Base Pay of Record” means the base salary and wages earned during the period beginning on January 1, 2014 and ending on November 30, 2014 while a participant in the OPC SRPII from an Employer (or OPC or its subsidiaries) for services rendered prior to the Effective Date, including pretax deferrals under the Savings Plan, and amounts contributed pursuant to the Occidental Petroleum Flexible Spending Accounts Plan, as amended from time to time.

 

(1)                                  Base Pay of Record does not include:

 

(A)                                Bonuses, incentives, overtime, shift differential, and overseas differentials;

 

(B)                                Reimbursement for expenses or allowances, including automobile allowances and moving allowances;

 

(C)                                Any amount contributed by the Employer (or OPC or its subsidiaries) (other than pretax deferrals under the Savings Plan and any amounts contributed pursuant to the Occidental Petroleum Flexible Spending Accounts Plan, as amended from time to time) to any qualified plan or plan of deferred compensation;

 

(D)                                Any amount paid by an Employer (or OPC or its subsidiaries) for other fringe benefits, such as health and hospitalization, and group life insurance benefits, or perquisites; and

 

(E)                                 Allowances paid during furlough and, for purposes of subsection (2)(F), such furloughs shall not be treated as paid leaves of absence.

 

(2)                                  Base Pay of Record is determined in accordance with the following rules:

 

(A)                                For Participants compensated by salary, Base Pay of Record means the actual base salary of record for the Participant (subject to the exclusions listed above).

 

(B)                                For Participants compensated based on mileage driven (primarily truck drivers), Base Pay of Record means the number of miles driven multiplied by the applicable mileage pay rate (subject to the exclusions listed above), plus the Participant’s scheduled number of hours worked in the pay period multiplied by the Participant’s base hourly rate (subject to the exclusions listed above).

 

(C)                                For Participants compensated at an hourly rate, Base Pay of Record means the base hourly rate (subject to the exclusions listed above) multiplied by the number of regularly scheduled hours worked in a pay period. If the Active Participant’s regularly scheduled work week is

 

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more than 40 hours, Base Pay of Record shall include an additional amount equal to the base hourly rate (subject to the exclusions listed above) times one half the number of regularly scheduled hours worked in excess of 40 in the work week.

 

(D)                                For Participants compensated on an eight, ten, twelve, or some other assigned hour Shift Basis and whose annual compensation is pre-determined under the Participant’s employer’s payroll recordkeeping system, Base Pay of Record for each pay period shall be the Participant’s pre-determined annual compensation (subject to the exclusions listed above) divided by the number of pay periods applicable to the Participant during the Plan Year. For the purpose of this subsection, the term “Shift Basis” means any arrangement whereby Participants work the assigned hour daily shifts which may result in alternating work weeks of more and less than 40 hours per week.

 

(E)                                 Base Pay of Record includes vacation pay received in periodic payments and annual vacation payments made to Employees paid by commission, but does not include single sum vacation payments to active or terminating Employees.

 

(F)                                  Base Pay of Record includes base salary or wages received during paid leaves of absence and periodic notice pay, but Base Pay of Record does not include single sum notice pay payments or any severance pay payments.

 

(G)                                Base Pay of Record does not include long-term disability payments or payments made to any Participant pursuant to the Occidental Chemical Corporation Weekly Sickness and Accident Plan unless:

 

(i)                                      Such payments are made to the Participant through the payroll accounting department of OPC and its subsidiaries, and

 

(ii)                                   The Participant is ineligible for participation in the Retirement Plan.

 

(f)                                    “Base Pay Paid” means the Employee Base Pay of Record, reduced for any deferral of base salary under the Deferred Compensation Plan.

 

(g)                                   “Beneficiary” means the person or persons designated by the Participant to receive payment under this Plan in the event of the Participant’s death prior to the complete distribution to the Participant of the benefits due under the Plan.  The OPC SRPII beneficiary designation  of a CRC SRPII Participant shall carry over to this Plan.   A beneficiary designation shall become effective only when filed in writing with the Administrative Committee during the Participant’s lifetime on a paper form prescribed by the Administrative Committee.  The filing of any new Beneficiary

 

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designation form will cancel any inconsistent Beneficiary designation previously filed.

 

If a Participant fails to designate a Beneficiary as provided above, or if all designated Beneficiaries predecease the Participant, the Participant’s Beneficiary shall be the person or persons entitled to receive the Participant’s benefits under the CRC Savings Plan in the event of the Participant’s death, provided, that if a Participant has previously designated a Beneficiary under Appendix A of the Occidental Petroleum Corporation Supplemental Retirement Plan who survives the Participant, the Participant’s Beneficiary shall be the person or persons so designated under Appendix A of the Occidental Petroleum Corporation Supplemental Retirement Plan.

 

(h)           “Board” means the Board of Directors of the Company.

 

(i)            “Code” means the Internal Revenue Code of 1986, as amended.

 

(j)                                     “Company” means CRC Services and any successor thereto.

 

(k)                                  “ CRC ” has the meaning assigned to such term in Section 1.1.

 

(l)                                      “ CRC Compensation” means the same as Compensation under the CRC Savings Plan.

 

(m)                              “ CRC Savings Plan” means the California Resources Corporation Savings Plan.

 

(n)                                  “ CRC Services ” has the meaning assigned to such term in Section 1.1.

 

(o)                                  “ CRC SRP II Participants” has the meaning assigned to such term in Section 1.1.

 

(p)                                  “ Deferral Contribution” means the same as Deferral Contribution under the CRC Savings Plan.

 

(q)                                  “Deferred Compensation Plan” means the Occidental Petroleum Corporation Modified Deferred Compensation Plan, as amended from time to time.

 

(r)                                     “Divorce Order” means any judgment, decree, or order (including judicial approval of a property settlement agreement) that relates to the settlement of marital property rights between a Participant and his former spouse pursuant to a state domestic relations law (including, without limitation and if applicable, community property law), as described in Treas. Reg. § 1.409A-3(j)(4)(ii) (or any successor provision).

 

(s)                                    “Effective Date” has the meaning assigned to such term in Section 1.1.

 

(t)                                     “Employee” means any person who is a CRC Group Employee, as defined in the Employee Matters Agreement.

 

Notwithstanding the foregoing, no individual shall be considered an Employee if such individual is not classified as a common-law employee in the employment records of

 

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the Employer, without regard to whether the individual is subsequently determined to have been a common-law employee of the Employer. The persons excluded by this paragraph from being Employees are to be interpreted broadly to include and to have at all times included individuals engaged by the Employer to perform services for such entity in a relationship that the entity characterizes as other than an employment relationship, such as where the Employer engages the individual to perform services as an independent contractor or leases the individual’s services from a third party. The exclusion of the individual from being an Employee shall apply even if a determination is subsequently made by the Internal Revenue Service, another governmental agency, a court or other tribunal, after the individual is engaged to perform such services, that the individual is an employee of the Employer for purposes of pertinent Code sections or for any other purpose.

 

(u)                                  “ Employee Matters Agreement” has the meaning assigned to such term in Section 1.1.

 

(v)                                  “Employer” means the Company and any Affiliate which is designated by the Board or the Administrative Committee.

 

The Board or, if authorized by the Board, the Administrative Committee may designate any Affiliate as an Employer under this Plan. The Affiliate shall become an Employer and a party to this Plan upon acceptance of such designation effective as of the date specified by the Board or Administrative Committee.

 

By accepting such designation or continuing as a party to the Plan, each Employer acknowledges that:

 

(A)                                It is bound by such terms and conditions relating to the Plan as the Company or the Administrative Committee may reasonably require;

 

(B)                                The Company and the Administrative Committee have the authority to review the Affiliate’s compliance procedures and to require changes in such procedures to protect the Plan;

 

(C)                                It has authorized the Company and the Administrative Committee to act on its behalf with respect to Employer matters pertaining to the Plan;

 

(D)                                It shall cooperate fully with Plan officials and their agents by providing such information and taking such other actions as they deem appropriate for the efficient administration of the Plan; and

 

(E)                                 Its status as an Employer under the Plan is expressly conditioned on its being and continuing to be an Affiliate.

 

Subject to the concurrence of the Board or Administrative Committee, any Affiliate may withdraw from the Plan, and end its status as an Employer hereunder, by communicating to the Administrative Committee its desire to withdraw. Upon

 

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withdrawal, which shall be effective as of the date agreed to by the Board or Administrative Committee, as the case may be, and the Affiliate, the Plan shall be considered frozen as to Employees of such Affiliate.

 

(w)                                “ERISA” means the Employee Retirement Income Security Act of 1974, as amended.

 

(x)                                  “ Matching Employer Contribution” means the same as Matching Employer Contribution under the CRC Savings Plan.

 

(y)                                  “ Nonelective Employer Contribution” means the same as Nonelective Employer Contribution under the CRC Savings Plan.

 

(z)                                   “OPC” has the meaning assigned to such term in Section 1.1.

 

(aa)                           “OPC SRPII” has the meaning assigned to such term in Section 1.1.

 

(bb)                           “Participant” means (i) a person meeting the requirements to participate in the Plan set forth in Article 3 and (ii) any other person who has an account under the Plan because he previously met such requirements.

 

(cc)                             “Plan” has the meaning assigned to such term in Section 1.1.

 

(dd)                           “Plan Year” means the calendar year.

 

(ee)                             “Qualified Divorce Order” means a Divorce Order that:

 

(1)                                  Creates or recognizes the existence of an Alternate Payee’s right to, or assigns to an Alternate Payee the right to, receive all or a portion of the benefits payable to a Participant under this Plan;

 

(2)                                  Clearly specifies:

 

(A)                                The name and the last known mailing address of the Participant and the name and mailing address of the Alternate Payee covered by the order;

 

(B)                                The amount or percentage of the Participant’s benefits to be paid by this Plan to the Alternate Payee, or the manner in which such amount or percentage is to be determined;

 

(C)                                The number of payments or period to which such order applies; and

 

(D)                                That it applies to this Plan; and

 

(3)                                  Does not:

 

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(A)                                Require this Plan to provide any type or form of benefit, or any option, not otherwise provided under the Plan;

 

(B)                                Require this Plan to provide increased benefits;

 

(C)                                Require the payment of benefits to an Alternate Payee that are required to be paid to another Alternate Payee under another Divorce Order previously determined to be a Qualified Divorce Order; or

 

(D)                                Require the payment of benefits under this Plan at a time or in a manner that would cause the Plan to fail to satisfy the requirements of Code section 409A (or other applicable section) and any regulations promulgated thereunder or otherwise jeopardize the deferred taxation of any amounts under this Plan.

 

(ff)                               “Retirement Plan” means the Occidental Petroleum Corporation Retirement Plan, as amended from time to time.

 

(gg)                             “Savings Plan” means the Occidental Petroleum Corporation Savings Plan, as amended from time to time.

 

(hh)                           “Separation from Service” means a Participant’s “separation from service” as defined under Code section 409A and Treas. Reg. § 1.409A-1(h) (or successor provisions).  For this purpose, a Participant shall have a Separation from Service if the Participant ceases to be an employee of both:

 

(1)                                  The Participant’s Employer;

 

(2)                                  All Affiliates with whom the Participant’s Employer would be considered a single employer under Code section 414(b) or 414(c).

 

For purposes of the preceding provisions, a Participant who ceases to be an employee of an entity described in (1) or (2) above shall not be considered to have a Separation from Service if such cessation of employment is followed immediately by his commencement of employment with another entity described in (1) or (2) above.

 

A Participant shall have a Separation from Service if it is reasonably anticipated that no further services shall be performed by the Participant, or that the level of services the Participant shall perform shall permanently decrease to no more than 20 percent of the average level of services performed by the Participant over the immediately preceding 36-month period (or the Participant’s full period of service, if the Participant has been performing services for less than 36 months).

 

(ii)                                   “Specified Employee” means an Employee who is a “specified employee” within the meaning of Section 409A and Treas. Reg. § 1.409A-1(i) (or successor provisions) and as determined pursuant to any rules adopted for such purposes by the Company.

 

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(jj)                                 “Spin-Off” has the meaning assigned to such term in Section 1.1.

 

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Article 3. Participation

 

3.1          Effective Date of Participation

 

An Employee who was a participant in the OPC SRPII on November 30, 2014 shall continue as a Participant of this Plan on December 1, 2014.

 

3.2          No New Participants After November 30, 2014

 

Notwithstanding any other Plan provision, except for an OPC SRPII participant who continues as a Participant under this Plan, no new Participant shall enter this Plan on or after December 1, 2014.

 

3.3          Allocations to Participants

 

Notwithstanding any other Plan provision and except for earnings, no new allocations relating to the 2015 Plan Year and thereafter shall be made under this Plan.

 

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Article 4. Benefits

 

4.1          Allocations Relating to Annual Additions Limit

 

(a)                                  Eligibility. The Employees who become Participants under Section 3.1 may be eligible for the allocation for the Plan Year specified in subsection (b):

 

(b)           Allocation Amount.

 

(1)                                  An allocation shall be made to the account maintained for each Participant described in subsection (a). The amount of the allocation shall be equal to the difference between (A) and (B), where

 

(A)          is the sum of the following:

 

(i)                                      Participant actual Deferral Contribution

 

(ii)                                   Employer Matching Employer Contribution, and

 

(iii)                                Employer Nonelective Employer Contribution,

 

The amounts calculated under (ii) and (iii) above shall be calculated for the Participant without the limitations provided in section 415 of the Code; and

 

(B)          is 1/12 of  $52,000.

 

(2)                                  Earnings Allocation. The Employer shall also permanently credit earnings on the monthly allocations under paragraph (1) for the Plan Year as if such allocations shared in earnings at the rate and in the manner described in section 4.3.

 

4.2          Allocations Relating to Compensation Limit

 

(a)                                  Eligibility for Allocations Relating to Limits Under Code section 401(a)(17).   An Employee who, on November 30, 2014, would have been eligible to participate in the Savings Plan for the Plan Year and whose Base Pay Paid plus Annual Bonus Paid for the Plan Year exceeds the amount specified in Code section 401(a)(17) as adjusted and in effect for the Plan Year or an Employee whose CRC Compensation for December 2014 exceeds one-twelfth of the amount specified in Code section 401(a)(17) as adjusted and in effect for the Plan Year shall be provided the allocation for the Plan Year specified in subsection (b).

 

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(b)                                  Allocation Amount. The amount to be allocated effective as of the last day of the Plan Year under this Plan with respect to a Participant described in subsection (a) above for the Plan Year shall equal the sum of (1) and (2) below, where

 

(1)           equals 6 percent of the difference between (i) and (ii), where

 

(i)                                      equals the sum of the Employee’s Base Pay Paid plus Annual Bonus Paid and

 

(ii)           equals $260,000.

 

(2)                                  equals 19 percent of the difference between (i) and (ii), where

 

(i)                                      equals CRC Compensation for December 2014 and

 

(ii)                                   equals 1/12 of $260,000.

 

4.3          Maintenance of Accounts

 

(a)                                  As of the Effective Date, the OPC SRPII account balance of a CRC SRPII Participant will be credited to his or her account under this Plan.

 

(b)                                  Each Employer shall establish and maintain, in the name of each Participant employed by that Employer, an individual account which shall consist of all amounts credited to the Participant. As of the end of each month, the Administrative Committee shall increase the balance, if any, of the Participant’s individual account as of the last day of the preceding month, by multiplying such amount by a number equal to one plus .167% plus the monthly yield on 5-Year Treasury Constant Maturities for the monthly processing period.

 

(c)                                   The individual account of each Participant shall represent a liability, payable when due under this Plan, out of the general assets of the Employer, or from the assets of any trust, custodial account or escrow arrangement which the Company may establish for the purpose of assuring availability of funds sufficient to pay benefits under this Plan, provided that  no assets shall be transferred to a trust or other account if such transfer would result in the taxation of benefits prior to distribution under Code section 409A(b). The money and any other assets in any such trust or account shall at all times remain the property of the Employer, and neither this Plan nor any Participant shall have any beneficial ownership interest in the assets thereof. No property or assets of the Employer shall be pledged, encumbered, or otherwise subjected to a lien or security interest for payment of benefits hereunder. Accounting for this Plan shall be based on generally accepted accounting principles.

 

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4.4          Vesting and Forfeiture

 

The OPC SRPII account balance of a CRC SRPII Participant that is credited to his or her account under this Plan shall be fully vested as of the Effective Date.  Each Participant’s account under this Plan shall be fully vested at all times.

 

4.5          No New Allocations relating to Plan Years after December 31, 2014

 

Notwithstanding any other Plan provision and except for earnings, no new allocations relating to the 2015 Plan Year and thereafter shall be made under this Plan.

 

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Article 5. Payments

 

5.1                                Timing and Form of Payments

 

(a)                                  Payment Events.   A Participant’s vested account under this Plan shall be paid on the earliest to occur of the following payment events:

 

(1)                                  The Participant’s attainment of a specified age elected by the Participant that is age 60 or above;

 

(2)                                  The Participant’s Separation from Service; or

 

(3)                                  The Participant’s death.

 

(b)                                  Timing and Form.

 

(1)                                  Attainment of Specified Age.   If payment is made on account of a Participant’s attainment of a specified age (60 or above), payment shall be made to the Participant in a single lump sum within the first 90 days of the calendar year following the calendar year in which the Participant reaches the specified age.  In addition, within the first 70 days of each subsequent calendar year, the Participant shall be paid any additional amounts credited to the Participant’s account since the prior payment date.

 

(2)                                  Separation from Service.

 

(A)                                If payment is made on account of the Participant’s Separation from Service, payment shall be made or commence within the first 90 days of the calendar year following the calendar year in which the Participant’s Separation from Service occurs.  Notwithstanding the foregoing, in the case of a Participant who is a Specified Employee, payment shall be made or commence in the month next following the date that is six (6) months after the date of the Participant’s Separation from Service, if later than the time provided above.

 

(B)                                Payment shall be made in a single lump sum or in annual installments over 5, 10, 15, or 20 years, as elected by the Participant.  If the Participant elects to have payment made in annual installments, the installments shall be paid within the first 90 days of each calendar year during the installment period (except that the first installment may be delayed in the case of a Specified Employee as provided above).  During the installment period, the Participant’s account shall continue to be adjusted as provided in Section 4.3(b) until the installments have been completed.  The amount of each annual installment shall equal the amount credited to the Participant’s account as of the last day of the month preceding the date of payment multiplied by a fraction, the numerator of which is one (1), and the denominator of which is the

 

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number of installments (including the current installment) which remain to be paid.

 

(C)                                If a Participant who is receiving installment payments on account of his Separation from Service has also made a specified age election and attains the specified age before the completion of all installments, the remaining installments shall be paid to him at the scheduled time or times without regard to his attainment of such age.

 

(3)                                  Death.   If payment is made on account of the Participant’s death, payment shall be made to the Participant’s Beneficiary in a single lump sum 120 days following the date of the Participant’s death.

 

(c)                                   Valuation of Benefits.  The amount of any payment to a Participant under this Article shall be determined based on the value of the Participant’s vested account as of the last day of the month preceding the date of payment.

 

5.2                                Payment Elections and Changes

 

(a)                                  Participants under the OPC SRPII.   The payment election made by the Participant under the OPC SRPII that was in effect immediately prior to the Effective Date shall remain in effect under this Plan.

 

(b)                                  Payment Elections.

 

If a Participant did not elect to have payment made at a specified age, payment shall be made on the earlier of the Participant’s Separation from Service or death in accordance with Section 5.1(b)(2) or (3), as applicable.  If a Participant did not elect an installment payment option for payment on account of a Separation from Service, any payment on account of the Participant’s Separation from Service shall be made in a single lump sum at the time provided in Section 5.1(b)(2).

 

(c)                                   Changes in Time or Form of Payment.   A Participant may elect to change the time or form of payment of his account in accordance with the rules set forth below.  For purposes of these rules, an election to receive distribution in a series of annual installments shall be treated as a single payment.

 

(1)                                  Permitted Changes.

 

(A)                                A Participant who has elected payment at a specified age may elect another specified age that is age 65 or above, subject to the limitations of paragraph (2).

 

(B)                                A Participant may elect to change the form of payment upon Separation from Service.

 

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(2)                                  Requirements.  Any election by a Participant under this subsection shall meet the following requirements:

 

(A)                                The election shall not be effective until at least 12 months after the election is filed with the Administrative Committee;

 

(B)                                The election must defer payment (or payment of the initial installment, if applicable) for a period of at least five years from the date that payment (or payment of the initial installment, if applicable) would otherwise have been made; and

 

(C)                                The election must be made at least 12 months prior to the beginning of the calendar year in which payment (or payment of the initial installment, if applicable) is otherwise scheduled to be made.

 

(3)                                  A Participant may make only two changes pursuant to this Section 5.2(c).  Each such change must satisfy all of the requirements of Section 5.2(c)(2).  No further changes may be made following a Participant’s Separation from Service.

 

(d)                                  Procedures.   All payment elections under this Plan shall be made in accordance with the provisions of this Plan and the rules and procedures established by the Administrative Committee for the time and manner of making elections.

 

5.3                                Death

 

If a Participant dies before the complete distribution of his account, the account or remaining account shall be paid to the Participant’s Beneficiary in a single lump sum 120 days following the date of the Participant’s death.

 

5.4                                Small Benefits

 

Notwithstanding any election by a Participant to receive payment of any account maintained for the Participant under the Plan in an installment payment form, if the value of such account is less than $50,000 at the time payment in such form is scheduled to commence, the account shall be paid to the Participant in a single lump sum on the scheduled commencement date.

 

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5.5                                Qualified Divorce Orders

 

Subject to the policies and procedures established by the Administrative Committee under Section 9.3(b), payment may be made from the balance of a Participant’s vested account to the extent necessary to fulfill a Qualified Divorce Order.

 

5.6                                Tax Withholding

 

(a)                                  To the extent required by law in effect at the time payments are made, the Participant’s Employer shall withhold from payments made hereunder the taxes required to be withheld by Federal, state and local law.

 

(b)                                  The Participant’s Employer shall have the right at its option (1) to require a Participant to pay or provide for payment of the amount of any taxes that the Employer may be required to withhold with respect to amounts credited to the Participant’s account or (2) deduct from any amount of salary, bonus or other payment otherwise payable in cash to the Participant the amount of any taxes that the Employer may be required to withhold with respect to amounts credited to the Participant’s account.  In addition, as permitted by Treas. Reg. § 1.409A-3(j)(4)(vi) (or any successor provision), payments may be made under the Plan to pay any Federal Insurance Contributions Act (FICA) tax imposed under Code sections 3101 and 3121(v)(2) on the Participant’s account, and to pay any income tax imposed under Code section 3401 ( i.e., wage withholding) or the corresponding withholding provisions of applicable state or local law as a result of payment of the FICA amount, as well as to pay the additional income tax attributable to the pyramiding wages and taxes.  The total payment may not exceed the aggregate FICA tax amount and the income tax withholding related to such FICA tax amount.

 

5.7                                Reemployment and Continued Distribution of Account

 

If a Participant who is receiving payment on account of his Separation from Service is reemployed by an Employer or Affiliate prior to the complete distribution of his account, the account or remaining account shall be paid to the Participant at the scheduled time or times without regard to the Participant’s reemployment.

 

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Article 6. Administration

 

6.1                                The Administrative Committee

 

The Plan shall be administered by an Administrative Committee.  The Administrative Committee shall be composed of three or more members, who shall be appointed by the Board and shall hold office at the discretion of the Board.  Such members may, but need not, be Employees of the Company.

 

Any member of the Administrative Committee may resign by delivering his written resignation to the Board and to the Administrative Committee Secretary.  Such resignation shall be effective no earlier than the date of the written notice.

 

6.2                                Compensation and Expenses

 

The members of the Administrative Committee who are Employees shall serve without compensation for services as a member.  All expenses of the Administrative Committee shall be paid directly by the Company.  Such expenses may include any expenses incident to the functioning of the Administrative Committee, including, but not limited to, fees of the Plan’s accountants, outside counsel and other specialists and other costs of administering the Plan.

 

6.3                                Manner of Action

 

A majority of the members of the Administrative Committee at the time in office shall constitute a quorum for the transaction of business.  All resolutions adopted and other actions taken by the Administrative Committee at any meeting shall be by the vote of a majority of those present at any such meeting.  The Administrative Committee may take action without a meeting if a majority of the members at the time in office give written consent.

 

6.4                                Chairman, Secretary, and Employment of Specialists

 

The members of the Administrative Committee shall elect one of their number as Chairman and shall elect a Secretary who may, but need not, be a member.  They may authorize one or more of their number or any agent to execute or deliver any instrument or instruments on their behalf, and may employ such counsel, auditors, and other specialists and such other services as they may require in carrying out the provisions of the Plan.

 

6.5                                Subcommittees

 

The Administrative Committee may appoint one or more subcommittees and delegate such of its power and duties as it deems desirable to any such subcommittee, in which case every reference herein made to the Administrative Committee shall be deemed to mean or include the subcommittees as to matters within their jurisdiction.  The members of any such subcommittee shall consist of such officers or other employees of the Company and such other persons as the Administrative Committee may appoint.

 

6.6                                Other Agents

 

The Administrative Committee may also appoint one or more persons or agents to aid it in carrying out its duties as a fiduciary, and delegate such of its powers and duties as it deems desirable to such person or agents.

 

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6.7                                Records

 

All resolutions, proceedings, acts, and determinations of each Committee shall be recorded by the Secretary thereof or under his supervision, and all such records, together with such documents and instruments as may be necessary for the administration of the Plan, shall be preserved in the custody of the Secretary.

 

6.8                                Rules

 

Subject to the limitations contained in the Plan, the Administrative Committee shall be empowered from time to time in its discretion to adopt by-laws and establish rules for the conduct of its affairs and the exercise of the duties imposed upon it under the Plan.

 

6.9                                Powers and Duties

 

The Administrative Committee shall have responsibility for the general administration of the Plan and for carrying out its provisions. The Administrative Committee shall have such powers and duties as may be necessary to discharge its functions hereunder, including, but not limited to, the following:

 

(a)                                  To construe and interpret the Plan, to supply all omissions from, correct deficiencies in and resolve ambiguities in the language of the Plan;

 

(b)                                  To decide all questions of eligibility, to determine the right of any person to an allocation and the amount thereof, and to determine the manner and time of payment of any benefits hereunder, all in accordance with the Plan;

 

(c)                                   To obtain from the Employees such information as shall be necessary for the proper administration of the Plan and, when appropriate, to furnish such information promptly to other persons entitled thereto;

 

(d)                                  To prepare and distribute, in such manner as the Company determines to be appropriate, information explaining the Plan; and

 

(e)                                   To establish and maintain such accounts in the name of each Participant as are necessary.

 

In administering the Plan, the Administrative Committee shall exercise its powers in a manner designed to ensure that the Plan complies with the requirements of Code section 409A, to the extent applicable.

 

6.10                         Decisions Conclusive

 

The Administrative Committee shall exercise its powers hereunder in a uniform and nondiscriminatory manner.  Any and all disputes with respect to the Plan which may arise involving Participants or their Beneficiaries shall be referred to the Administrative Committee and its decision shall be final, conclusive, and binding.  Furthermore, if any question arises as to the meaning, interpretation, or application of any provision hereof, the decision of the Administrative Committee with respect thereto shall be final.

 

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6.11                         Fiduciaries

 

The fiduciaries named in this Article shall have only those specific powers, duties, responsibilities, and obligations as are specifically given them under this Plan.  The Company shall have the sole authority to amend or terminate, in whole or in part, this Plan. The Administrative Committee shall be a fiduciary under the Plan and shall have the sole responsibility for the administration of this Plan.  The officers and Employees of the Company shall have the responsibility of implementing the Plan and carrying out its provisions as the Administrative Committee shall direct.  A fiduciary may rely upon any direction, information, or action of another fiduciary as being proper under this Plan, and is not required under this Plan to inquire into the propriety of any such direction, information, or action.  It is intended under this Plan that each fiduciary shall be responsible for the proper exercise of his own powers, duties, responsibilities, and obligations under this Plan and shall not be responsible for any act or failure to act of another fiduciary.  No fiduciary guarantees in any manner the payment of benefits from this Plan.  Any party may serve in more than one fiduciary capacity with respect to the Plan.

 

6.12                         Notice of Address

 

Each person entitled to benefits from the Plan must file with the Administrative Committee or its agent, in writing, his mailing address and each change of his mailing address. Any communication, statement, or notice addressed to such a person at his latest reported mailing address will be binding upon him for all purposes of the Plan, and neither the Administrative Committee nor the Company shall be obliged to search for or ascertain his whereabouts.

 

6.13                         Data

 

All persons entitled to benefits from the Plan must furnish to the Administrative Committee such documents, evidence, or information, including information concerning marital status, as the Administrative Committee considers necessary or desirable for the purpose of administering the Plan.  It shall be an express condition of the Plan that each such person must furnish such information and sign such documents as the Administrative Committee may require before any benefits become payable from the Plan, provided that payment shall in all cases be made by the time required by Code section 409A.  The Administrative Committee shall be entitled to distribute to a non-spouse Beneficiary in reliance upon the signed statement of the Participant that he is unmarried without any further liability to a spouse if such statement is false.

 

6.14                         Adjustments

 

Subject to the requirements of Code section 409A, the Administrative Committee may adjust benefits under the Plan or make such other adjustments with respect to a Participant or Beneficiary as are required to correct administrative errors or provide uniform treatment in a manner consistent with the intent and purposes of the Plan.

 

6.15                         Member’s Own Participation

 

No member of the Administrative Committee may act, vote or otherwise influence a decision specifically relating to his own participation under the Plan.

 

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6.16                         Indemnification

 

(a)                                  To the extent permitted by the Company’s bylaws or other organizational documents and applicable law, the Company shall indemnify and hold harmless each of the following persons ( “Indemnified Persons” ) under the terms and conditions of this section:

 

(1)                                  The Administrative Committee and each of its members, which, for purposes of this section, includes any Employee to whom the Administrative Committee has delegated fiduciary or other duties.

 

(2)                                  The Board and each member of the Board and any Employer who has responsibility (whether by delegation from another person, an allocation of responsibilities under the terms of this Plan document, or otherwise) for a fiduciary duty, a nonfiduciary settlor function (such as deciding whether to approve a plan amendment), or a nonfiduciary administrative task relating to the Plan.

 

(b)                                  The Company shall indemnify and hold harmless each Indemnified Person against any and all claims, losses, damages, and expenses, including reasonable attorney’s fees and court costs, incurred by that person on account of his or her good faith actions or failures to act with respect to his or her responsibilities relating to the Plan. The Company’s indemnification shall include payment of any amounts due under a settlement of any lawsuit or investigation, but only if the Company agrees to the settlement.

 

(1)                                  An Indemnified Person shall be indemnified under this section only if he or she notifies an Appropriate Person at the Company of any claim asserted against or any investigation of the Indemnified Person that relates to the Indemnified Person’s responsibilities with respect to the Plan.

 

(A)                                A person is an “Appropriate Person” to receive notice of the claim or investigation if a reasonable person would believe that the person notified would initiate action to protect the interests of the Company in response to the Indemnified Person’s notice.

 

(B)                                The notice may be provided orally or in writing. The notice must be provided to the Appropriate Person promptly after the Indemnified Person becomes aware of the claim or investigation.  No indemnification shall be provided under this section to the extent that the Company is materially prejudiced by the unreasonable delay of the Indemnified Person in notifying an Appropriate Person of the claim or investigation.

 

(2)                                  An Indemnified Person shall be indemnified under this section with respect to attorney’s fees, court costs or other litigation expenses or any settlement of

 

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such litigation only if the Indemnified Person agrees to permit the Company to select counsel and to conduct the defense of the lawsuit.

 

(3)                                  No Indemnified Person shall be indemnified under this section with respect to any action or failure to act that is judicially determined to constitute or be attributable to the willful misconduct of the Indemnified Person.

 

(4)                                  Payments of any indemnity under this section shall be made only from insurance or other assets of the Company or its Affiliates. The provisions of this section shall not preclude such further indemnities as may be available under insurance purchased by the Company or its Affiliates or as may be provided by the Company or for the benefit of the Indemnified Person under any by-law, agreement or otherwise, provided that no expense shall be indemnified under this section that is otherwise indemnified by the Company or an Affiliate or by an insurance contract purchased by the Company or an Affiliate.

 

(5)                                  Payment of any indemnity under this section that is not exempt from Code section 409A shall comply with Code section 409A’s requirements for reimbursement plans, as set forth in Treas. Reg. § 1.409A-3(i)(1)(iv) (or any successor provision).  For this purpose, (i) the indemnity under this section shall continue for the Indemnified Person’s lifetime, and, if later, until the complete disposition of all covered claims, (ii) the amount of expenses indemnified during one taxable year of an Indemnified Person shall not affect the amount of expenses indemnified in any other taxable year; (iii) payment of an indemnity shall be made by the last day of the Indemnified Person’s taxable year following the taxable year in which the expense was incurred and (iv) the Indemnified Person’s right to indemnification shall not be subject to liquidation or exchange for any other benefit.  If, after payment of any amount to the Indemnified Person pursuant to this provision, it is determined, pursuant to paragraph (3) above or otherwise, that the Indemnified Person is not entitled to indemnification, the Indemnified Person shall promptly repay such amount to the Company.

 

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Article 7. Amendment and Termination

 

7.1                                Amendment and Termination

 

The Company expects the Plan to be permanent, but since future conditions affecting the Company or any Employer cannot be anticipated or foreseen, the Company must necessarily and does hereby reserve the right to amend, modify, or terminate the Plan at any time by action of the Board, except that no amendment shall reduce the dollar amount permanently credited to a Participant’s account.  The Administrative Committee, in its discretion, may amend the Plan if it finds that such amendment does not significantly increase or decrease benefits or costs.  Notwithstanding the foregoing, the Board or the Administrative Committee may amend the Plan to:

 

(a)                                  Ensure that this Plan complies with the requirements of Code section 409A for deferral of taxation on compensation deferred hereunder until the time of distribution; and

 

(b)                                  Add provisions for changes to elections as to time and manner of distributions and other changes that comply with the requirements of Code section 409A for the deferral of taxation on deferred compensation until the time of distribution.

 

7.2                                Payments Upon Termination

 

If the Plan is terminated, distributions to Participants and Beneficiaries shall be made on the dates on which such distributions would be made under the Plan without regard to such termination, except that payments may, in the discretion of the Board, be accelerated if:

 

(a)                                  Accelerated payment is permitted under Treas. Reg. § 1.409A-3(j)(4)(ix) (or any successor provision); or

 

(b)                                  The Plan is terminated because Participants have become subject to tax on their deferrals due to the Plan’s failure to satisfy the requirements of Code section 409A.  Payment to a Participant may not exceed the amount required to be included in income as a result of such failure.

 

7.3                                Reorganization of Employer

 

In the event of a merger or consolidation of an Employer, or the transfer of substantially all of the assets of an Employer to another corporation, such continuing, resulting or transferee corporation shall have the right to continue and carry on the Plan and to assume all liabilities of the Employer hereunder without obtaining the consent of any Participant or Beneficiary.  If such successor shall assume the liabilities of the Employer hereunder, then the Employer shall be relieved of all such liability, and no Participant or Beneficiary shall have the right to assert any claim against the Employer for benefits under or in connection with the Plan.

 

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Article 8. Claims and Appeals Procedures

 

8.1                                Application for Benefits

 

All applications for benefits under the Plan shall be submitted to: CRC Services, LLC, Attention: Administrative Committee, 10889 Wilshire Blvd., Los Angeles, CA 90024.  Applications for benefits must be in writing on the forms prescribed by the Administrative Committee and must be signed by the Participant, Beneficiary, spouse, Alternate Payee, or other person claiming benefits under this Plan (each of which may be “Claimant” ).

 

8.2                                Claims Procedure for Benefits

 

(a)                                  If a Claimant believes he is entitled to a benefit, or a benefit different from the one received, then the Claimant may file a claim for the benefit by writing a letter to the Administrative Committee or its authorized delegate.  Any such claim must be made no later than the time prescribed by Treas. Reg. § 1.409A-3(g) (or any successor provision).

 

(b)                                  Within a reasonable period of time, but not later than 90 days after receipt of a claim for benefits, the Administrative Committee or its delegate shall notify the Claimant of any adverse benefit determination on the claim, unless special circumstances require an extension of time for processing the claim. In no event may the extension period exceed 90 days from the end of the initial 90-day period.  If an extension is necessary, the Administrative Committee or its delegate shall provide the Claimant with a written notice to this effect prior to the expiration of the initial 90-day period.  The notice shall describe the special circumstances requiring the extension and the date by which the Administrative Committee or its delegate expects to render a determination on the claim.

 

(c)                                   In the case of an adverse benefit determination, the Administrative Committee or its delegate shall provide to the Claimant written or electronic notification setting forth in a manner calculated to be understood by the claimant:

 

(1)                                  The specific reason or reasons for the adverse benefit determination;

 

(2)                                  Reference to the specific Plan provisions on which the adverse benefit determination is based;

 

(3)                                  A description of any additional material or information necessary for the Claimant to perfect the claim and an explanation of why the material or information is necessary; and

 

(4)                                  A description of the Plan’s claim review procedures and the time limits applicable to such procedures, including a statement of the Claimant’s right to bring a civil action under Section 502(a) of ERISA following an adverse final benefit determination on review and in accordance with section 8.3.

 

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(d)                                  Within 60 days after receipt by the Claimant of notification of the adverse benefit determination, the Claimant or his duly authorized representative, upon written application to the Administrative Committee, may request that the Administrative Committee fully and fairly review the adverse benefit determination.  On review of an adverse benefit determination, upon request and free of charge, the Claimant shall have reasonable access to, and copies of, all documents, records and other information relevant to the claimant’s claim for benefits.  The Claimant shall have the opportunity to submit written comments, documents, records, and other information relating to the claim for benefits.  The Administrative Committee’s (or delegate’s) review shall take into account all comments, documents, records, and other information submitted regardless of whether the information was previously considered in the initial adverse benefit determination.

 

(e)                                   Within a reasonable period of time, but not later than 60 days after receipt of such request for review, the Administrative Committee or its delegate shall notify the Claimant of any final benefit determination on the claim, unless special circumstances require an extension of time for processing the claim.  In no event may the extension period exceed 60 days from the end of the initial 60-day period.  If an extension is necessary, the Administrative Committee or its delegate shall provide the Claimant with a written notice to this effect prior to the expiration of the initial 60-day period. The notice shall describe the special circumstances requiring the extension and the date by which the Administrative Committee or its delegate expects to render a final determination on the request for review.  In the case of an adverse final benefit determination, the Administrative Committee or its delegate shall provide to the claimant written or electronic notification setting forth in a manner calculated to be understood by the Claimant:

 

(1)                                  The specific reason or reasons for the adverse final benefit determination;

 

(2)                                  Reference to the specific Plan provisions on which the adverse final benefit determination 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 relevant to the Claimant’s claim for benefits; and

 

(4)                                  A statement of the claimant’s right to bring a civil action under Section 502(a) of ERISA following an adverse final benefit determination on review and in accordance with section 8.3.

 

(f)                                    If a Claimant’s claim or appeal is approved, any resulting payment of benefits will be made no later than the time prescribed for payment of benefits by Treas. Reg. § 1.409A-3(g) (or any successor provision).

 

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8.3                                Limitations on Actions

 

All decisions made under the procedure set out in this Article shall be final and there shall be no further right of appeal.  No person may initiate a lawsuit before fully exhausting the claims procedures set out in this Article, including appeal.  To provide for an expeditious resolution of any dispute concerning a claim for benefits that has been denied and to ensure that all evidence pertinent to such claim is available, no lawsuit may be brought contesting a denial of benefits more than the later of:

 

(a)                                  180 days after receiving the written response of the Administrative Committee to an appeal; or

 

(b)                                  365 days after an applicant’s original application for benefits.

 

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Article 9. General Provisions

 

9.1                                Unsecured General Creditor

 

The rights of a Participant, Beneficiary, Alternate Payee or their heirs, successors, and assigns, as relates to any Company or Employer promises hereunder, shall not be secured by any specific assets of the Company or any Employer, nor shall any assets of the Company or any Employer be designated as attributable or allocated to the satisfaction of such promises.

 

9.2                                Trust Fund

 

The Company shall be responsible for the payment of all benefits provided under the Plan.  At its discretion, the Company may establish one or more trusts, with such trustees as the Board or Administrative Committee may approve, for the purpose of providing for the payment of such benefits.  Such trust or trusts may be irrevocable, but the assets thereof shall be subject to the claims of the Company’s creditors.  To the extent any benefits provided under the Plan are actually paid from any such trust, the Company shall have no further obligation with respect thereto, but to the extent not so paid, such benefits shall remain the obligation of, and shall be paid by, the Company.  No assets shall be transferred to a trust if such transfer would result in the taxation of benefits prior to distribution under Code section 409A(b).

 

9.3                                Nonassignability

 

(a)                                  Neither a Participant nor any other person shall have any right to commute, sell, assign, transfer, pledge, anticipate, mortgage or otherwise encumber, hypothecate or convey in advance of actual receipt the amount, if any, payable hereunder, or any part thereof, or interest therein which are, and all rights to which are, expressly declared to be unassignable and non-transferable.  No part of the amounts payable shall, prior to actual payment, be subject to seizure or sequestration for the payment of any debts, judgments, alimony or separate maintenance owed by a Participant or any other person, nor be transferable by operation of law in the event of a Participant’s or any other person’s bankruptcy or insolvency.

 

(b)                                  Notwithstanding subsection (a), the right to benefits payable with respect to a Participant pursuant to a Qualified Divorce Order may be created, assigned, or recognized. The Administrative Committee shall establish appropriate policies and procedures to determine whether a Divorce Order presented to the Administrative Committee constitutes a qualified Divorce Order under this Plan, and to administer distributions pursuant to the terms of Qualified Divorce Orders.  In the event that a Qualified Divorce Order exists with respect to benefits payable under the Plan, such benefits otherwise payable to the Participant specified in the Qualified Divorce Order shall be payable to the Alternate Payee specified in such Qualified Divorce Order.

 

9.4                                Release from Liability to Participant

 

A Participant’s right to receive benefits under the Plan shall be reduced to the extent that any portion of the account maintained for the Participant has been paid or set aside for payment

 

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to an Alternate Payee pursuant to a Qualified Divorce Order.  The Participant shall be deemed to have released the Employer and the Plan from any claim with respect to such amounts in any case in which: (a) any Employer, the Plan, or any Plan representative has been served with legal process or otherwise joined in a proceeding relating to such amounts; and (b) the Participant fails to obtain an order of the court in the proceeding relieving the Employer and the Plan from the obligation to comply with the judgment, decree or order.

 

9.5                                Employment Not Guaranteed

 

Nothing contained in this Plan nor any action taken hereunder shall be construed as a contract of employment or as giving any Participant any right to be retained in employment with the Company or any Employer.  Accordingly, subject to the terms of any written employment agreement to the contrary, the Company and Employer shall have the right to terminate or change the terms of employment of a Participant at any time and for any reason whatsoever, with or without cause.

 

9.6                                Gender, Singular & Plural

 

All pronouns and any variations thereof shall be deemed to refer to the masculine or feminine as the identity of the person or persons may require.  As the context may require, the singular may be read as the plural and the plural as the singular.

 

9.7                                Captions

 

The captions of the articles, sections, and paragraphs of the Plan are for convenience only and shall not control or affect the meaning or construction of any of its provisions.

 

9.8                                Validity

 

In the event any provision of this Plan is held invalid, void, or unenforceable, the same shall not affect, in any respect whatsoever, the validity of any other provision of this Plan.

 

9.9                                Notice

 

Any notice or filing required or permitted to be given to the Administrative Committee under the Plan shall be sufficient if in writing and hand delivered, or sent by registered or certified mail, to the principal office of the Company.  Such notice shall be deemed given as to the date of delivery or, if delivery is made by mail, as of the date shown on the postmark on the receipt for registration or certification.

 

9.10                         Applicable Law

 

The Plan shall be governed by and construed in accordance with Code section 409A (or any successor provision), and any regulations promulgated thereunder, to the extent applicable, and in accordance with the laws of the State of California to the extent such laws are not preempted by ERISA.

 

[Signature on the following page.]

 

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IN WITNESS WHEREOF , CRC Services, LLC has caused its duly authorized officer to execute this document this 1st day of December, 2014.

 

 

	CRC SERVICES, LLC
	By:	/s/ Daniel S. Watts
	Name:	Daniel S. Watts
	Title:	Vice President — Compensation and Benefits

 

Signature Page to Supplemental Retirement Plan II