-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: webmaster@www.sec.gov Originator-Key-Asymmetric: MFgwCgYEVQgBAQICAf8DSgAwRwJAW2sNKK9AVtBzYZmr6aGjlWyK3XmZv3dTINen TWSM7vrzLADbmYQaionwg5sDW3P6oaM5D3tdezXMm7z1T+B+twIDAQAB MIC-Info: RSA-MD5,RSA, LZFVRfA1v5eUIFXBWwe/jYfTtAhn596Bg1uaM12lDexZNXkhI5o+UFAyVVhDH6ai VtOY+gp6cF/MudQe4uRpPQ== 0000950150-97-001117.txt : 19970811 0000950150-97-001117.hdr.sgml : 19970811 ACCESSION NUMBER: 0000950150-97-001117 CONFORMED SUBMISSION TYPE: S-8 PUBLIC DOCUMENT COUNT: 10 FILED AS OF DATE: 19970808 EFFECTIVENESS DATE: 19970808 SROS: NYSE FILER: COMPANY DATA: COMPANY CONFORMED NAME: ATLANTIC RICHFIELD CO /DE CENTRAL INDEX KEY: 0000775483 STANDARD INDUSTRIAL CLASSIFICATION: PETROLEUM REFINING [2911] IRS NUMBER: 230371610 STATE OF INCORPORATION: DE FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: S-8 SEC ACT: 1933 Act SEC FILE NUMBER: 333-33245 FILM NUMBER: 97654680 BUSINESS ADDRESS: STREET 1: 515 S FLOWER ST CITY: LOS ANGELES STATE: CA ZIP: 90071 BUSINESS PHONE: 2134863511 S-8 1 FORM S-8 1 AS FILED WITH THE SECURITIES AND EXCHANGE COMMISSION ON AUGUST 8, 1997. REGISTRATION NO. 333- ================================================================================ SECURITIES AND EXCHANGE COMMISSION WASHINGTON, D.C. 20549 ------------------------ FORM S-8 REGISTRATION STATEMENT UNDER THE SECURITIES ACT OF 1933 ------------------------ ATLANTIC RICHFIELD COMPANY (EXACT NAME OF REGISTRANT AS SPECIFIED IN ITS CHARTER) DELAWARE 23-0371610 (STATE OR OTHER JURISDICTION OF (I.R.S. EMPLOYER INCORPORATION OR ORGANIZATION) IDENTIFICATION NO.)
515 SOUTH FLOWER STREET, LOS ANGELES, CALIFORNIA 90071 (ADDRESS OF PRINCIPAL EXECUTIVE OFFICES) CANYON FUEL COMPANY, LLC CAPITAL ACCUMULATION PLAN CH-TWENTY, INC. CAPITAL ACCUMULATION PLAN CH-TWENTY, INC. SAVINGS PLAN (FULL TITLE OF THE PLANS) BRUCE G. WHITMORE, ESQ. SENIOR VICE PRESIDENT, GENERAL COUNSEL AND SECRETARY ATLANTIC RICHFIELD COMPANY 515 SOUTH FLOWER STREET, LOS ANGELES, CALIFORNIA 90071 (213) 486-1774 (NAME, ADDRESS AND TELEPHONE NUMBER, INCLUDING AREA CODE, OF AGENT FOR SERVICE) Copy to DIANE A. WARD, ESQ. SENIOR COUNSEL -- SECURITIES & FINANCE ATLANTIC RICHFIELD COMPANY 515 SOUTH FLOWER STREET, LOS ANGELES, CALIFORNIA 90071 (213) 486-2808 ------------------------ CALCULATION OF REGISTRATION FEE ================================================================================================= PROPOSED PROPOSED MAXIMUM AMOUNT OF TITLE OF SECURITIES AMOUNT TO BE MAXIMUM OFFERING AGGREGATE REGISTRATION TO BE REGISTERED REGISTERED PRICE PER SHARE OFFERING PRICE FEE - ------------------------------------------------------------------------------------------------- Shares of Common Stock of Atlantic Richfield Company, par value $2.50 per share, which may be purchased or distributed pursuant to the Canyon Fuel Company, LLC Capital Accumulation Plan, the CH-Twenty, Inc. Capital Accumulation Plan and the CH-Twenty, Inc. Savings Plan........... 50,000(1) $75.00(2) $3,750,000(2) $1,136 =================================================================================================
(1) This registration statement also relates to such indeterminate number of additional shares of common stock as may be offered as a result of a stock splits, stock dividends or similar transactions. In addition, pursuant to Rule 416(c) under the Securities Act of 1933, this registration statement also covers an indeterminate amount of interests to be offered or sold pursuant to the employee benefit plans. (2) Estimated solely for the purpose of calculating the registration fee pursuant to Rule 457(c), based on the average of the high and low prices per share of the Registrant's Common Stock on August 5, 1997, as reported on the New York Stock Exchange Composite Tape. ================================================================================ 2 INFORMATION REQUIRED IN THE REGISTRATION STATEMENT This Registration Statement is filed for the purpose of registering 50,000 shares of common stock, par value $2.50 per share ("Common Stock"), of Atlantic Richfield Company (the "Company"), a Delaware corporation, authorized for issuance under the terms of the Canyon Fuel Company, LLC Capital Accumulation Plan and the CH-Twenty, Inc. Capital Accumulation Plan (collectively, the "Capital Accumulation Plans") and the CH-Twenty, Inc. Savings Plan (the "Savings Plan"). Canyon Fuel Company and CH-Twenty, Inc. are each a subsidiary of the Company. ITEM 3. INCORPORATION OF DOCUMENTS BY REFERENCE. The Registrant, the Capital Accumulation Plans and the Savings Plan hereby incorporate herein by this reference, the documents listed below filed pursuant to the Securities Exchange Act of 1934 (the "Exchange Act") with the Securities and Exchange Commission (the "Commission") under File No. 1-1196: (a) The Company's Annual Report on Form 10-K for the year ended December 31, 1996. (b) The Company's Quarterly Reports on Form 10-Q for the quarterly periods ended March 31 and June 30, 1997. (c) The Company's Current Reports on Form 8-K dated March 24, March 24, March 31, April 1, June 23 and July 28, 1997. (d) The Description of Capital Stock of the Company set forth on page 21 of the Company's Annual Report on Form 10-K for the year ended December 31, 1996. All documents filed by Registrant, the Capital Accumulation Plans and the Savings Plan pursuant to Sections 13(a), 13(c), 14 and 15(d) of the Exchange Act after the date hereof and prior to the filing of a post-effective amendment which indicates that all securities offered have been sold or which deregisters all securities then remaining unsold, shall be deemed to be incorporated by reference herein and to be a part hereof from the date of filing of such documents. ITEM 4. DESCRIPTION OF SECURITIES. Not applicable. ITEM 5. INTERESTS OF NAMED EXPERTS AND COUNSEL. Diane A. Ward, Esq., Senior Counsel -- Securities & Finance of the Company, 515 South Flower Street, Los Angeles, California 90071, has rendered an opinion with respect to the shares of Common Stock offered pursuant to this Registration Statement. As of August 5, 1997, she owned directly options to purchase 1,486 shares of such stock and owned indirectly approximately 1,811 shares of Common Stock under the Company's benefit plans. ITEM 6. INDEMNIFICATION OF DIRECTORS AND OFFICERS. Reference is made to Section 25 of the By-Laws of the Company and to Section 145 of the General Corporation Law of the State of Delaware as set forth below: Section 25 of the By-Laws of the Company provide: (a) Right to Indemnification. Each person who was or is a party or is threatened to be made a party to or is involved or is threatened to be involved (as a witness or otherwise) in or otherwise requires representation by counsel in connection with any threatened, pending or completed action, suit or proceeding, or an inquiry that such person in good faith believes might lead to the institution of any such action, suit or proceeding, whether civil, criminal, administrative or investigative (hereinafter a "proceeding"), by reason of the fact that he or she is or was a director or officer of the Company or is or was serving at the request of the Company as a director, officer, employee or agent of another corporation or of a partnership, joint venture, 1 3 trust or other enterprise, including service with respect to employee benefit plans, and the basis of such proceeding is alleged action or inaction in an official capacity or in any other capacity while serving as such a director, officer, employee or agent, shall be indemnified and held harmless by the Company to the fullest extent authorized by the General Corporation Law of Delaware, as the same exists or may hereafter be amended (but, in the case of any such amendment with reference to events occurring prior to the effective date thereof, only to the extent that such amendment permits the Company to provide broader indemnification rights than such law permitted the Company to provide prior to such amendment), against all costs, charges, expenses, liabilities and losses (including attorneys' fees, judgments, fines, ERISA excise taxes or penalties and amounts paid in settlement) reasonably incurred or suffered by such person in connection therewith and such indemnification shall continue as to a person who has ceased to be a director or officer (or to serve another entity at the request of the Company) and shall inure to the benefit of such person's heirs, personal representatives and estate; provided, however, that, except as provided in paragraph (b) hereof, the Company shall indemnify any such person seeking indemnification in connection with a proceeding (or part thereof) initiated by such person against the Company only if such proceeding (or part thereof) was authorized prior to its initiation by a majority of the disinterested members of the Board of Directors of the Company. The rights to indemnification conferred in this Section shall include the right to be paid by the Company any expenses incurred in defending any such proceeding in advance of its final disposition; provided, however, that, if the General Corporation Law of Delaware requires, payment shall be made to or on behalf of such person only upon delivery to the Company of an undertaking, by or on behalf of such person, to repay all amounts so advanced if it shall ultimately be determined that such person is not entitled to be indemnified under this Section or otherwise. The rights to indemnification conferred in this Section shall be deemed to be a contract between the Company and each person who serves in the capacities described above at any time while this Section is in effect. Any repeal or modification of this Section shall not in any way diminish any rights to indemnification of such person or the obligations of the Company arising hereunder. (b) Right of claimant to bring suit. If a claim under paragraph (a) of this Section is not paid in full by the Company within sixty days after a written claim has been received by the Company, the claimant may at any time thereafter bring suit against the Company to recover the unpaid amount of the claim. If successful in whole or in part, the claimant shall be entitled to be paid also the expense of prosecuting or defending such claim. In any action brought by the claimant to enforce a right to indemnification hereunder or by the Company to recover payments by the Company of expenses incurred by a claimant in a proceeding in advance of its final disposition, the burden of proving that the claimant is not entitled to be indemnified under this Section or otherwise shall be on the Company. Neither the failure of the Company (including its Board of Directors, independent legal counsel, or its stockholders) to have made a determination prior to the commencement of such action that indemnification of the claimant is proper in the circumstances because the claimant has met the applicable standard of conduct set forth in the General Corporation Law of Delaware, nor an actual determination by the Company (including its Board of Directors, independent legal counsel, or its stockholders) that the claimant has not met such applicable standard of conduct, shall create a presumption that the claimant has not met the applicable standard of conduct or, in the case of such an action brought by the claimant, be a defense to the action. (c) Non-exclusivity of rights. The right to indemnification and the payment of expenses incurred in defending a proceeding in advance of its final disposition conferred in this Section shall not be exclusive of any other right which any person may have or hereafter acquire under any statute, the Company's Certificate of Incorporation, any By-Law, any agreement, a vote of Company stockholders or of disinterested Company directors, or otherwise, both as to action in that person's official capacity and as to action in any other capacity by holding such office, and 2 4 shall continue after the person ceases to serve the Company as a director or officer or to serve another entity at the request of the Company. (d) Insurance. The Company may maintain insurance, at its expense, to protect itself and any director or officer of the Company or another corporation, partnership, joint venture, trust or other enterprise against any expense, liability or loss, whether or not the Company would have the power to indemnify such person against such expense, liability or loss under the General Corporation Law of Delaware. (e) Indemnity agreements. The Company may from time to time enter into indemnity agreements with the persons who are members of its Board of Directors and with such officers or other persons as the Board may designate, such indemnity agreements to provide in substance that the Company will indemnify such persons to the fullest extent of the provisions of this Section 25. (f) Indemnification of employees and agents of the Company. The Company may, under procedures authorized from time to time by the Board of Directors, grant rights to indemnification, and to be paid by the Company the expenses incurred in defending any proceeding in advance of its final disposition, to any employee or agent of the Company to the fullest extent of the provisions of this Section 25. Section 145 of the General Corporation Law of the State of Delaware provides: (a) A corporation shall have the power to indemnify any person who was or is a party or is threatened to be made a party to any threatened, pending or completed action, suit or proceeding, whether civil, criminal, administrative or investigative (other than an action by or in the right of the corporation) by reason of the fact that he is or was a director, officer, employee or agent of the corporation, or is or was serving at the request of the corporation as a director, officer, employee or agent of another corporation, partnership, joint venture, trust or other enterprise, against expenses (including attorneys' fees), judgments, fines and amounts paid in settlement actually and reasonably incurred by him in connection with such action, suit or proceeding if he acted in good faith and in a manner he reasonably believed to be in or not opposed to the best interests of the corporation, and, with respect to any criminal action or proceeding, had no reasonable cause to believe his conduct was unlawful. The termination of any action, suit or proceeding by judgment, order, settlement, conviction, or upon a plea of nolo contendere or its equivalent, shall not, of itself, create a presumption that the person did not act in good faith and in a manner which he reasonably believed to be in or not opposed to the best interests of the corporation, and, with respect to any criminal action or proceeding, had reasonable cause to believe that his conduct was unlawful. (b) A corporation shall have the power to indemnify any person who was or is a party or is threatened to be made a party to any threatened, pending or completed or suit by or in the right of the corporation to procure a judgment in its favor by reason of the fact that he is or was a director, officer, employee or agent of the corporation, or is or was serving at the request of the corporation as a director, officer, employee or agent of another corporation, partnership, joint venture, trust or other enterprise against expenses (including attorneys' fees) actually and reasonably incurred by him in connection with the defense or settlement of such action or suit if he acted in good faith and in a manner he reasonably believed to be in or not opposed to the best interests of the corporation and except that no indemnification shall be made in respect of any claim, issue or matter as to which such person shall have been adjudged to be liable to the corporation unless and only to the extent that the Court of Chancery or the court in which such action or suit was brought shall determine upon application that, despite the adjudication of liability but in view of all the circumstances of the case, such person is fairly and reasonably entitled to indemnify for such expenses which the Court of Chancery or such other court shall deem proper. 3 5 (c) To the extent that a director, officer, employee or agent of a corporation has been successful on the merits or otherwise in defense of any action, suit or proceeding referred to in subsections (a) and (b), or in defense of any claim, issue or matter therein, he shall be indemnified against expenses (including attorneys' fees) actually and reasonably incurred by him in connection therewith. (d) Any indemnification under subsections (a) and (b) (unless ordered by a court) shall be made by the corporation only as authorized in the specific case upon a determination that indemnification of the director, officer, employee or agent is proper in the circumstances because he has met the applicable standard of conduct set forth in subsections (a) and (b). Such determination shall be made (1) by a majority vote of the directors who are not parties to such action, suit or proceeding, even though less than a quorum, or (2) if there are no such directors, or if such directors so direct, by independent legal counsel in a written opinion, or (3) by the stockholders. (e) Expenses (including attorneys' fees) incurred by an officer or director in defending any civil, criminal, administrative, or investigative action, suit or proceeding may be paid by the corporation in advance of the final disposition of such action, suit or proceeding upon receipt of an undertaking by or on behalf of such director or officer to repay such amount if it shall ultimately be determined that he is not entitled to be indemnified by the corporation as authorized in this Section. Such expenses (including attorneys' fees) incurred by other employees and agents may be so paid upon terms and conditions, if any, as the board of directors deems appropriate. (f) The indemnification and advancement of expenses provided by, or granted pursuant to, the other subsections of this section shall not be deemed exclusive of any other rights to which those seeking indemnification or advancement of expenses may be entitled under any by-law, agreement, vote of stockholders or disinterested directors or otherwise, both as to action in his official capacity and as to action in another capacity while holding such office. (g) A corporation shall have power to purchase and maintain insurance on behalf of any person who is or was a director, officer, employee or agent of the corporation, or is or was serving at the request of the corporation as a director, officer, employee or agent of another corporation, partnership, joint venture, trust or other enterprise against any liability asserted against him and incurred by him in any such capacity, or arising out of his status as such, whether or not the corporation would have the power to indemnify him against such liability under the provisions of this section. (h) For purposes of this Section, references to "the corporation" shall include, in addition to the resulting corporation, any constituent corporation (including any constituent of a constituent) absorbed in a consolidation or merger which, if its separate existence had continued, would have had power and authority to indemnify its directors, officers, and employees or agents, so that any person who is or was a director, officer, employee or agent of such constituent corporation, or is or was serving at the request of such constituent corporation as a director, officer, employee or agent of another corporation, partnership, joint venture, trust or other enterprise, shall stand in the same position under the provisions of this Section with respect to the resulting or surviving corporation as he would have with respect to such constituent corporation if its separate existence had continued. (i) For purposes of this Section, references to "other enterprises" shall include employee benefit plans; references to "fines" shall include any excise taxes assessed on a person with respect to any employee benefit plan; and references to "serving at the request of the corporation" shall include any service as a director, officer, employee or agent of the corporation which imposes duties on, or involves services by, such director, officer, employee or agent with respect to an employee benefit plan, its participants, or beneficiaries; and a person who acted in good faith and in a manner he reasonably believed to be in the interest of the 4 6 participants and beneficiaries of an employee benefit plan shall be deemed to have acted in a manner "not opposed to the best interests of the corporation" as referred to in this Section. (j) The indemnification and advancement of expenses provided by, or granted pursuant to, this Section shall, unless otherwise provided when authorized or ratified, continue as to a person who has ceased to be a director, officer, employee or agent and shall inure to the benefit of the heirs, executors and administrators of such a person. (k) The Court of Chancery is hereby vested with exclusive jurisdiction to hear and determine all actions for advancement of expenses or indemnification brought under this section or under any bylaw, agreement, vote of stockholders or disinterested directors, or otherwise. The Court of Chancery may summarily determine a corporation's obligation to advance expenses (including attorneys' fees). The Company has entered into or will enter into individual indemnity agreements with each of its present and future directors and officers embodying the provisions of Section 25 of the By-Laws. The Company currently carries Directors' and Officers' Liability Insurance with a limit of $205 million to the extent authorized by the By-Laws of the Company and the laws of the State of Delaware. ITEM 7. EXEMPTION FROM REGISTRATION CLAIMED. Not Applicable. ITEM 8. EXHIBITS. 3.1 Restated Certificate of Incorporation of the Company as of June 27, 1994, filed with the Commission as Exhibit 3 to the Company's report on Form 10-Q for the quarterly period ended June 30, 1994, under File No. 1-1196 and incorporated herein by reference. 3.2 By-Laws of the Company as amended through January 23, 1989, filed with the Commission as Exhibit 3.2 to the Company's report on Form 10-K for the year 1993, under File No. 1-1196 and incorporated herein by reference. 4.1 Rights Agreement dated as of July 24, 1995 between the Company and First Chicago Trust Company of New York, as Rights Agent, filed with the Commission as Exhibit 4 to the Company's report on Form 10-Q for the quarterly period ended June 30, 1995, under File No. 1-1196 and incorporated herein by reference. 4.2 Canyon Fuel Company, LLC Capital Accumulation Plan, effective July 1, 1997, filed as an exhibit to this registration statement. 4.3 CH-Twenty, Inc. Capital Accumulation Plan, effective July 1, 1997, filed as an exhibit to this registration statement. 4.4 CH-Twenty, Inc. Savings Plan, effective July 1, 1997, filed as an exhibit to this registration statement. 4.5 Form of Canyon Fuel Company, LLC Capital Accumulation Plan Trust Agreement between Canyon Fuel Company and State Street Bank and Trust Company, as Trustee (the "Trustee"), effective July 1, 1997, filed as an exhibit to this registration statement. 4.6 Form of CH-Twenty, Inc. Capital Accumulation Plan Trust Agreement between CH-Twenty, Inc. and the Trustee, effective July 1, 1997, filed as an Exhibit to this registration statement. 4.7 Form of CH-Twenty, Inc. Savings Plan Trust Agreement between CH-Twenty, Inc. and the Trustee, effective July 1, 1997, filed as an Exhibit to this registration statement.
5 7 5.1 Opinion of Diane A. Ward, Esq., dated August 6, 1997, as to the validity of the shares of Common Stock of the Registrant being registered. 5.2 The Registrant hereby undertakes to submit to the Internal Revenue Service ("IRS") each of the plans and any amendments thereto in a timely manner and will make all changes required by the IRS in order to qualify the plans. 10 Form of Indemnity Agreement adopted by the Board of Directors of the Company on January 26, 1987 and executed in February 1987 by the Company and each of its directors and officers included in Exhibit A to the Company's 1987 Proxy Statement, filed with the Commission under File No. 1-1196 and incorporated herein by reference. 23.1 Consent of Coopers & Lybrand L.L.P., filed as an exhibit to this registration statement. 23.2 Consent of Diane A. Ward, Esq. (included in Exhibit 5.1). 24 Power of Attorney, filed as an exhibit to this registration statement.
ITEM 9. UNDERTAKINGS. (a) Rule 415 offering. The Company hereby undertakes: (1) To file, during any period in which offers or sales are being made, a post-effective amendment to this registration statement: (i) To include any prospectus required by section 10(a)(3) of the Securities Act of 1933 (the "Securities Act"); (ii) To reflect in the prospectus any facts or events arising after the effective date of the registration statement (or the most recent post-effective amendment thereof) which, individually or in the aggregate, represent a fundamental change in the information set forth in the registration statement. Notwithstanding the foregoing, any increase or decrease in volume of securities offered (if the total dollar value of securities offered would not exceed that which was registered) and any deviation from the low or high end of the estimated maximum offering range may be reflected in the form of prospectus filed with the Commission pursuant to Rule 424(b) (sec. 230.424(b) of this chapter) if, in the aggregate, the changes in volume and price represent no more than a 20% change in the maximum aggregate offering price set forth in the "Calculation of Registration Fee" table in the effective registration statement; (iii) To include any material information with respect to the plan of distribution not previously disclosed in the registration statement or any material change to such information in the registration statement; Provided, however, That paragraphs (a)(1)(i) and (a)(1)(ii) of this section do not apply if the registration statement is on Form S-3 (sec. 239.13 of this chapter), Form S-8 (sec. 239.16b of this chapter) or Form F-3 (sec. 239.33 of this chapter), and the information required to be included in a post-effective amendment by those paragraphs is contained in periodic reports filed with or furnished to the Commission by the registrant pursuant to section 13 or section 15(d) of the Securities Exchange Act of 1934 (the "Exchange Act") that are incorporated by reference in the registration statement. (2) That, for the purpose of determining any liability under the Securities Act, each such post-effective amendment shall be deemed to be a new registration statement relating to the securities offered therein, and the offering of such securities at that time shall be deemed to be the initial bona fide offering thereof. (3) To remove from registration by means of a post-effective amendment any of the securities being registered which remain unsold at the termination of the offering. 6 8 (4) If the registrant is a foreign private issuer, to file a post-effective amendment to the registration statement to include any financial statements required by sec. 210.3-19 of this chapter at the start of any delayed offering or throughout a continuous offering. Financial statements and information otherwise required by section 10(a)(3) of the Securities Act need not be furnished, provided that the registrant includes in the prospectus, by means of a post-effective amendment, financial statements required pursuant to this paragraph (a)(4) and other information necessary to ensure that all other information in the prospectus is at least as current as the date of those financial statements. Notwithstanding the foregoing, with respect to registration statements on Form F-3 (sec. 239.33 of this chapter), a post-effective amendment need not be filed to include financial statements and information required by section 10(a)(3) of the Securities Act or sec. 210.3-19 of this chapter if such financial statements and information are contained in periodic reports filed with or furnished to the Commission by the registrant pursuant to section 13 or section 15(d) of the Exchange Act that are incorporated by reference in the Form F-3. (b) Filings incorporating subsequent Exchange Act documents by reference. The Company hereby undertakes that, for purposes of determining any liability under the Securities Act, each filing of the Company's annual report pursuant to section 13(a) or section 15(d) of the Exchange Act (and, where applicable, each filing of an employee benefit plan's annual report pursuant to section 15(d) of the Exchange Act) that is incorporated by reference in the registration statement shall be deemed to be a new registration statement relating to the securities offered therein, and the offering of such securities at that time shall be deemed to be the initial bona fide offering thereof. (h) Request for acceleration of effective date of filing of registration statement on Form S-8. Insofar as indemnification for liabilities arising under the Securities Act may be permitted to directors, officers and controlling persons of the registrant pursuant to the foregoing provisions, or otherwise, the registrant has been advised that in the opinion of the Commission such indemnification is against public policy as expressed in the Securities Act and is, therefore, unenforceable. In the event that a claim for indemnification against such liabilities (other than the payment by the registrant of expenses incurred or paid by a director, officer or controlling person of the registrant in the successful defense of any action, suit or proceeding) is asserted by such director, officer or controlling person in connection with the securities being registered, the registrant will, unless in the opinion of its counsel the matter has been settled by controlling precedent, submit to a court of appropriate jurisdiction the question whether such indemnification by it is against public policy as expressed in the Securities Act and will be governed by the final adjudication of such issue. 7 9 SIGNATURES Pursuant to the requirements of the Securities Act of 1933, the registrant certifies that it has reasonable grounds to believe that it meets all of the requirements for filing on Form S-8 and has duly caused this registration statement to be signed on its behalf by the undersigned, thereunto duly authorized, in the City of Los Angeles, State of California, on August 6, 1997. ATLANTIC RICHFIELD COMPANY By: /s/ ALLAN L. COMSTOCK ------------------------------------ Allan L. Comstock Vice President and Controller Pursuant to the requirements of the Securities Act of 1933, this registration statement has been signed by the following persons in the capacities and on the date indicated.
SIGNATURE TITLE DATE - ------------------------------------------ ------------------------------- ---------------- */S/ MIKE R. BOWLIN Chairman of the Board August 4, 1997 - ------------------------------------------ Chief Executive Officer Mike R. Bowlin and President Principal executive officer */S/ ANTHONY G. FERNANDES Executive Vice President May 5, 1997 - ------------------------------------------ Anthony G. Fernandes */S/ MARIE L. KNOWLES Executive Vice President May 5, 1997 - ------------------------------------------ and Chief Financial Marie L. Knowles Officer Principal financial officer */S/ WILLIAM E. WADE JR. Executive Vice President May 5, 1997 - ------------------------------------------ William E. Wade, Jr. */S/ MICHAEL E. WILEY Executive Vice President August 4, 1997 - ------------------------------------------ Michael E. Wiley */S/ FRANK D. BOREN Director May 5, 1997 - ------------------------------------------ Frank D. Boren */S/ LODWRICK M. COOK Director May 5, 1997 - ------------------------------------------ Lodwrick M. Cook - ------------------------------------------ Director Richard H. Deihl */S/ JOHN GAVIN Director May 5, 1997 - ------------------------------------------ John Gavin */S/ HANNA H. GRAY Director May 5, 1997 - ------------------------------------------ Hanna H. Gray
8 10
SIGNATURE TITLE DATE - ------------------------------------------ ------------------------------- ---------------- */S/ KENT KRESA Director May 5, 1997 - ------------------------------------------ Kent Kresa */S/ DAVID T. MCLAUGHLIN Director May 5, 1997 - ------------------------------------------ David T. McLaughlin */S/ JOHN B. SLAUGHTER Director May 5, 1997 - ------------------------------------------ John B. Slaughter */S/ HENRY WENDT Director May 5, 1997 - ------------------------------------------ Henry Wendt /s/ ALLAN L. COMSTOCK Vice President and May 5, 1997 - ------------------------------------------ Controller Allan L. Comstock Principal accounting officer *By: /s/ ALLAN L. COMSTOCK - ------------------------------------------ Allan L. Comstock (Attorney-in-Fact)
9 11 PLAN SIGNATURES Pursuant to the requirements of the Securities Act of 1933, each of the Canyon Fuel Company, LLC Capital Accumulation Plan, the CH-Twenty, Inc. Capital Accumulation Plan and the CH-Twenty, Inc. Savings Plan have duly caused this Registration Statement to be signed on its behalf by the undersigned, thereunto duly authorized, in the City of Los Angeles, State of California, on August 6, 1997. CANYON FUEL COMPANY, LLC CAPITAL ACCUMULATION PLAN By: /s/ CYNTHIA L. BENGTSON ----------------------------------------- Cynthia L. Bengtson Secretary of the Capital Accumulation Plan Administrative Committee CH-TWENTY, INC. CAPITAL ACCUMULATION PLAN By: /s/ CYNTHIA L. BENGTSON ----------------------------------------- Cynthia L. Bengtson Secretary of the Capital Accumulation Plan Administrative Committee CH-TWENTY, INC. SAVINGS PLAN By: /s/ CYNTHIA L. BENGTSON ----------------------------------------- Cynthia L. Bengtson Secretary of the Savings Plan Administrative Committee 10 12 INDEX TO EXHIBITS
SEQUENTIALLY EXHIBIT NUMBERED NO. DESCRIPTION PAGE ------- --------------------------------------------------------------------- ----------- 3.1 Restated Certificate of Incorporation of the Company as of June 27, 1994, filed with the Commission as Exhibit 3 to the Company's report on Form 10-Q for the quarterly period ended June 30, 1994, under File No. 1-1196 and incorporated herein by reference. 3.2 By-Laws of the Company as amended through January 23, 1989, filed with the Commission as Exhibit 3.2 to the Company's report on Form 10-K for the year 1993, under File No. 1-1196 and incorporated herein by reference. 4.1 Rights Agreement dated as of July 24, 1995 between the Company and First Chicago Trust Company of New York, as Rights Agent, filed with the Commission as Exhibit 4 to the Company's report on Form 10-Q for the quarterly period ended June 30, 1995, under File No. 1-1196 and incorporated herein by reference. 4.2 Canyon Fuel Company, LLC Capital Accumulation Plan, effective July 1, 1997, filed as an exhibit to this registration statement. 4.3 CH-Twenty, Inc. Capital Accumulation Plan, effective July 1, 1997, filed as an exhibit to this registration statement. 4.4 CH-Twenty, Inc. Savings Plan, effective July 1, 1997, filed as an exhibit to this registration statement. 4.5 Form of Canyon Fuel Company, LLC Capital Accumulation Plan Trust Agreement between Canyon Fuel Company and State Street Bank and Trust Company, as Trustee (the "Trustee"), effective July 1, 1997, filed as an exhibit to this registration statement. 4.6 Form of CH-Twenty, Inc. Capital Accumulation Plan Trust Agreement between CH-Twenty, Inc. and the Trustee, effective July 1, 1997, filed as an Exhibit to this registration statement. 4.7 Form of CH-Twenty, Inc. Savings Plan Trust Agreement between CH-Twenty, Inc. and the Trustee, effective July 1, 1997, filed as an Exhibit to this registration statement. 5.1 Opinion of Diane A. Ward, Esq., dated August 6, 1997, as to the validity of the shares of Common Stock of the Registrant being registered. 5.2 The Registrant hereby undertakes to submit to the Internal Revenue Service ("IRS") each of the plans and any amendments thereto in a timely manner and will make all changes required by the IRS in order to qualify the plans. 10 Form of Indemnity Agreement adopted by the Board of Directors of the Company on January 26, 1987 and executed in February 1987 by the Company and each of its directors and officers included in Exhibit A to the Company's 1987 Proxy Statement, filed with the Commission under File No. 1-1196 and incorporated herein by reference. 23.1 Consent of Coopers & Lybrand L.L.P., filed as an exhibit to this registration statement. 23.2 Consent of Diane A. Ward, Esq. (included in Exhibit 5.1). 24 Power of Attorney, filed as an exhibit to this registration statement.
EX-4.2 2 CANYON FUEL COMPANY,LLC CAPITAL ACCUMULATION PLAN 1 EXHIBIT 4.2 CANYON FUEL COMPANY CAPITAL ACCUMULATION PLAN EFFECTIVE FEBRUARY 1, 1997 2 CANYON FUEL COMPANY CAPITAL ACCUMULATION PLAN To record the adoption of the Canyon Fuel Company Capital Accumulation Plan, effective February 1, 1997, the undersigned, being duly authorized to act on behalf of Canyon Fuel Company has executed this plan document at Midvale, Utah on the 29th day of January, 1997. ATTEST: CANYON FUEL COMPANY, LLC BY: /s/ Annette T. Kennett BY: /s/ Richard D. Pick ---------------------------- --------------------------- Richard D. Pick Chief Executive Officer 3 CANYON FUEL COMPANY CAPITAL ACCUMULATION PLAN TABLE OF CONTENTS
Page No. -------- INTRODUCTION ...............................................................................1 Section 1 - DEFINITION 1.1 Administrator.........................................................2 1.2 Annual Earnings.......................................................2 1.3 Capital Accumulation Plan.............................................2 1.4 Code..................................................................2 1.5 Company...............................................................2 1.6 Effective Date........................................................2 1.7 Elective Deferrals or Deferrals.......................................2 1.8 Employee..............................................................3 1.9 ERISA.................................................................3 1.10 Highly Compensated Employee...........................................3 1.11 Medical Board.........................................................5 1.12 Member................................................................5 1.13 Member's Account or Account...........................................5 1.14 Plan..................................................................6 1.15 Plan Year.............................................................6 1.16 Salary Reduction Agreement............................................6 1.17 Subsidiary............................................................6 1.18 Trustee...............................................................7 Section 2 - MEMBERSHIP - ELIGIBILITY 2.1 Membership............................................................8 2.2 Notice to Administrator...............................................8 2.3 Membership Termination................................................8 Section 3 - MEMBERS' ELECTIVE DEFERRALS 3.1 Members' Elections....................................................10 3.2 Contribution of Elective Deferrals....................................10 3.3 Annual Dollar Limitation..............................................10 3.4 Actual Deferral Percentage Tests......................................11 3.5 Return of Elective Deferrals to Members...............................12 3.6 Section 415 Limitations...............................................13 3.7 Make-up Elective Deferrals............................................14
i 4
Section 4 - INVESTMENT OF MEMBER'S ACCOUNTS 4.1 Members' Accounts.....................................................15 4.2 Investment of Elective Deferrals and Transferred Amounts..............15 4.3 Funds Invested in the Money Market Fund...............................17 4.4 Sale and Reinvestment of Equity Fund, Bond Fund, International Equity Fund or Balanced Fund Units...................18 4.5 Directives............................................................19 4.6 Title of Investments..................................................19 4.7 Allocation of Trust Earnings and Valuation of Trust Investments.......19 4.8 Purchase and Redemption of the Equity Fund, Bond Fund, International Equity Fund and Balanced Fund Units..................19 4.9 Voting of the Money Market Fund, Equity Fund, Bond Fund and International Equity Fund Investments..........................22 4.10 Investment Advisory Fees..............................................22 Section 5 - WITHDRAWALS DURING EMPLOYMENT DUE TO FINANCIAL HARDSHIP 5.1 Application for Withdrawal............................................23 5.2 Basis for Withdrawal..................................................23 5.3 Payment of Withdrawal.................................................24 5.4 Condition to Receipt of Withdrawal....................................24 Section 6 - PAYMENTS ON TERMINATION OF COMPANY EMPLOYMENT, DIVORCE OR OTHER REASONS 6.1 Termination of Employment ............................................26 6.2 Death.................................................................27 6.3 Disability............................................................28 6.4 Divorce...............................................................29 6.5 Rollover..............................................................29 6.6 Notice................................................................30 6.7 Distributions.........................................................30 6.8 Distribution of Benefits..............................................30 Section 7 - CAPITAL ACCUMULATION ADMINISTRATIVE COMMITTEE 7.1 Capital Accumulation Plan Administrative Committee....................31 7.2 Rules of Conduct......................................................31 7.3 Legal, Accounting, Clerical...........................................31 7.4 Interpretation of Provisions..........................................31 7.5 Records of Administration.............................................32 7.6 Claims for Benefits...................................................32 7.7 Liability of Committee................................................34 7.8 Medical Board.........................................................34 7.9 Unlocated Member......................................................34 7.10 Legal Representative..................................................35
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Section 8 - AMENDMENTS, DISCONTINUANCE, LIABILITIES 8.1 Amendment of Plan.....................................................36 8.2 Termination...........................................................36 8.3 Liability of Company..................................................36 Section 9 - MISCELLANEOUS 9.1 Employment............................................................37 9.2 Benefits Not Assignable...............................................37 9.3 Discharge of Liability................................................37 9.4 Governing Law.........................................................37 9.5 Limitation on Mergers.................................................37 9.6 Delegation of Fiduciary or Administrative Responsibilities............38 9.7 Named Fiduciary.......................................................38 Section 10 - TOP HEAVY PROVISIONS 10.1 Definitions...........................................................39 10.2 Minimum Allocation....................................................43 10.3 ......................................................................45 10.4 ......................................................................45 10.5 ......................................................................45 10.6 ......................................................................45 Section 11 - LOANS TO MEMBERS 11.1 General ..............................................................46 11.2 Eligibility............................................................46 11.3 Loan Amount............................................................46 11.4 Frequency..............................................................47 11.5 Interest Rate..........................................................47 11.6 Security...............................................................48 11.7 Funding of the Loan....................................................48 11.8 Repayment of the Loan..................................................48 11.9 Deemed Distribution....................................................49 11.10 Default................................................................50 Section 12 - TRANSFERS FROM OTHER PLANS 12.1 Transfers from Other Qualified Plans...................................51 12.2 Transfers from Individual Retirement Accounts..........................51 12.3 Participation..........................................................52 12.4 Administration.........................................................52
iii 6 CANYON FUEL COMPANY CAPITAL ACCUMULATION PLAN INTRODUCTION This Plan is intended to qualify as a Profit Sharing Plan under Section 401(a) of the Internal Revenue Code of 1986, as amended, and as a Qualified Cash or Deferred Arrangement under Section 401(k) of the Code. The Plan is effective February 1, 1997. 1 7 SECTION 1 DEFINITIONS 1.1 "Administrator" means the Capital Accumulation Plan Administrative Committee. 1.2 "Annual Earnings" or "Earnings" means: The annual, actual wages or salary paid to a Member for the Member's personal service, including the amount of any salary reduction pursuant to Section 125 and Section 401(k) of the Code, as amended, but excluding extra pay such as overtime, premiums, bonuses, living or other allowances. Annual Earnings or Earnings shall not exceed $160,000 as adjusted each Plan Year by the Secretary of Treasury or the Secretary's delegate, at the same time and in the same manner as under Section 415(d) of the Code. 1.3 "Capital Accumulation Plan Administrative Committee" means the committee provided for in Section 7 of this Plan. 1.4 "Code" means the Internal Revenue Code of 1986, as amended. 1.5 "Company" means Canyon Fuel Company, LLC and such of its Subsidiaries or Affiliates whose Employees are included in this Plan upon authorization of the Management Board of Canyon Fuel Company, LLC and adoption of this Plan by the Board of Directors of such authorized Subsidiary or Affiliate. 1.6 "Effective Date" means the effective date of the Plan which is February 1, 1997. 1.7 "Elective Deferrals" or "Deferrals" means reductions pursuant to a Salary Reduction Agreement from one percent through 17 percent, of a Member's Annual Earnings, which amounts are transferred by the Company to the Trustee of the Plan. 2 8 1.8 "Employee" means any regular employee of the Company, excluding: (a) Employees not employed on a regular basis such as Casual Employees, Temporary Employees, Project Employees, Seasonal Employees and Leased Employees, as defined under the Company's Employment Status Classification Policy; (b) Employees represented by any collective bargaining agent which has not negotiated the benefits of this Plan; and (c) Any division or group of employees which is expressly excluded from eligibility for this Plan by action of the Management Board of the Company or, in the case of a Subsidiary or Affiliate, action by the Board of Directors of the Subsidiary or Affiliate by which such employees are paid. 1.9 "ERISA" means the Employee Retirement Income Security Act of 1974. 1.10 "Highly Compensated Employee" means: (a) Any employee who performs service during the determination year and is described in one or more of the following groups: (i) An employee who is a five percent owner, as defined in Section 416(i)(1) of the Code, at any time during the determination year or the look-back year, as defined below; or (ii) An employee who receives compensation in excess of $80,000, as adjusted pursuant to Section 415(d) of the Code for Plan Years commencing after December 31, 1997, during the look-back year 3 9 and, at the election of the Administrator, is a member of the top-paid group, as defined below, for the look-back year; (b) For purposes of the definition of Highly Compensated Employee the following will apply: (i) The determination year is the Plan Year for which the determination of who is highly compensated is being made; or if the Company makes the election pursuant to Treas. Reg. 1.414(q)-IT Q&A-14(b), the period by which the determination year extends beyond the calendar year referred to in Subparagraph 1.10(b)(ii). (ii) The look-back year is the 12-month period immediately preceding the determination year, or if the Company makes the election pursuant to Treas. Reg. 1.414(q)-IT Q&A-14(b), the calendar year ending with or within the determination year. (iii) The top-paid group consists of the top 20 percent of employees ranked on the basis of compensation received during the year. For purposes of determining the number of employees in the top paid group, employees who have not completed six months of service by the end of the Plan Year (including service in the immediately preceding Plan Year); who normally work less than 17-1/2 hours per week; who work less than six months during any year; who are nonresident aliens with no income from sources within the United States or who have not had their 21st birthday by the end of the Plan Year shall be included. (iv) Employers aggregated under Section 414(b), (c), (m), or (o) of the Code are treated as a single employer. 4 10 (v) Compensation, for purposes of this Paragraph 1.10 means compensation within the meaning of Section 415(c)(3) of the Code without regard to Section 125, Section 402(e)(3) and Section 402(h)(1)(B) of the Code. (c) A former employee who has a separation year prior to the determination year and who was a highly compensated active employee for either (i) such employee's separation year, or (ii) any determination year ending on or after the employee's 55th birthday will be a Highly Compensated Employee. Generally, a separation year is the determination year the employee separates from service. (d) If elected by Canyon Fuel Company, LLC, Subparagraph 1.10(a) shall be modified by substituting the simplified method pursuant to Section 4 of Rev. Proc. 93-42, in which case the Highly Compensated Employees shall be determined under Subparagraph 1.10(a) on the basis of the look-back year and determination year, or the determination year only, taking into account all employees employed during such year. 1.11 "Medical Board" means the board of physicians provided for in Paragraph 7.8. 1.12 "Member" means an Employee who has qualified for membership in accordance with the requirements of this Plan and whose membership has not terminated pursuant to Paragraph 2.3. 1.13 "Member's Account" or "Account" means a separate account maintained by the Trustee for each Member consisting of the Member's Elective Deferrals and transfers pursuant to Section 12 of the Plan, as adjusted for earnings and withdrawals, and realized and unrealized gains and losses attributable thereto. 5 11 1.14 "Plan" means the Canyon Fuel Company Capital Accumulation Plan as set forth herein, and any amendments thereto. 1.15 "Plan Year" means the period commencing on July 1 of each calendar year and ending on June 30 of the immediately following calendar year; provided, however, that the first Plan Year shall be the period from February 1, 1997 to June 30, 1997. 1.16 "Salary Reduction Agreement" means an agreement entered into between the Member and the Company, and by which the Member agrees to accept a reduction in Earnings from the Company equal to any whole (or fractions, as required by adjustments under Paragraph 3.3) percentage, per payroll period, not to exceed 17 percent. This agreement shall apply to each payroll period during the period it is in effect in which the Member receives Earnings. In consideration of such agreement, the Company will transfer to the Member's Account the amount of the Elective Deferral at the time that regular salary payments are made to its Employees. 1.17 "Subsidiary" or "Affiliate" means: (a) All corporations which are members of a controlled group of corporations within the meaning of Section 1563(a) of the Code [determined without regard to Section 1563(a)(4) and Section 1563(e)(3)(C) of said Code] and of which Canyon Fuel Company, LLC is then a member. For purposes of Paragraph 2.1 and Subparagraphs 2.3(c), 3.3(c), 4.8(c) and 5.4(a), Subsidiary or Affiliate shall include Atlantic Richfield Company and its Subsidiaries or Affiliates; and (b) All trades or businesses, whether or not incorporated, which, under the regulations prescribed by the Secretary of the Treasury pursuant to Section 210(d) of ERISA or Section 414(c) of the Code, are then under common control with Canyon Fuel Company, or with respect to the last sentence of 6 12 Subparagraph 1.18(a), Atlantic Richfield Company and its Subsidiaries or Affiliates. 1.18 "Trustee" means the persons or corporations, or both, designated by agreement of trust between them and Canyon Fuel Company, LLC to hold Deferrals of Members, transfers pursuant to Section 12 investments thereof and earnings thereon. The duties and responsibilities of the Trustee shall be those set forth in the trust agreement. 7 13 SECTION 2 MEMBERSHIP - ELIGIBILITY 2.1 Membership (a) An Employee may become a Member on the Employee's date of employment. (b) To become a Member, an Employee must enter into a Salary Reduction Agreement in accordance with Section 3. Notwithstanding anything in this Paragraph 2.1 to the contrary, an Employee may not become a Member of the Plan while the Employee is a member of a Capital Accumulation or Savings Plan of a Subsidiary or Affiliate. 2.2 Notice to Administrator The Company shall advise the Administrator as to the date an Employee becomes a Member. In the event that any question arises as to the eligibility of any Employee, the decision of the Administrator as to such Employee's eligibility shall be binding upon the Company, the Employees, the Members, the beneficiaries, and any and all other persons having or claiming any interest hereunder. 2.3 Membership Termination (a) An Employee's membership shall terminate upon: (i) Death, disability, dismissal, retirement or termination of employment for any other reason; (ii) Continuation of a Participant's employment with an acquiring employer in conjunction with a sale to the acquiring employer of substantially all of the assets used by the Company or any 8 14 Subsidiary or Affiliate in a trade or business which such entity conducts; or (iii) A disposition of the Company's interest in a Subsidiary or Affiliate when the Participant continues employment with such Subsidiary or Affiliate. (b) A Member may not voluntarily terminate membership in this Plan during active employment with the Company. (c) If a Member transfers to a Subsidiary or Affiliate which is not participating in this Plan, or to an employment classification excluded from Plan participation, the Member's Account shall not be distributed until the Member has terminated employment with Canyon Fuel Company, LLC or all of its Subsidiaries or Affiliates or is involved in a sale described in Subparagraph 2.3(a)(ii) or (iii). 9 15 SECTION 3 MEMBERS' ELECTIVE DEFERRALS 3.1 Members' Elections An Employee may enter into a Salary Reduction Agreement with the Company providing for withholding of Elective Deferrals from each of the Member's regular paychecks at a rate of one percent to 17 percent of the Member's Earnings, in whole percentages, except as required under Paragraph 3.3 or 3.4. A Salary Reduction Agreement shall remain in effect until changed by the Member. A Member's election shall be made in the manner prescribed by the Administrator. A Member may change the Member's election with respect to the Member's rate of future contributions at any time by giving notice in such manner as is prescribed by the Administrator. Such changes shall be effective as of the payroll period beginning after the date of receipt of such notice by the Administrator. The Company may limit or reduce its Salary Reduction Agreement with any Member at any time, on a nondiscriminatory basis, to the extent necessary to ensure compliance with the limitations of Paragraph 3.3 or 3.4. 3.2 Contribution of Elective Deferrals The Company shall pay to the Trustee on behalf of each Member the Deferrals elected by the Member. Elective Deferrals shall be paid to the Trustee in cash. 3.3 Annual Dollar Limitation (a) A Member's Elective Deferrals for a calendar year, when considered together with the amount of salary reduction elected by the Member under any other plan meeting the requirement of Section 401(k) of the Code, may not exceed $9,500, as adjusted pursuant to Code Section 415(d) for Plan years commencing after December 31, 1997. 10 16 (b) Once a Member's Elective Deferrals reach the limitation described in Subparagraph 3.3(a), all subsequent deferrals will be suspended for the remainder of the calendar year. Elective Deferrals will automatically resume on the following January 1. Unless the Member elects to change the Elective Deferral percent according to Paragraph 3.1, Elective Deferrals will resume at the rate in effect on the suspension date. (c) If a Member notifies the Administrator on or before March 31 after the close of a calendar year that the Member's total Elective Deferrals (within the meaning of Section 402(g)(3) of the Code) for such calendar year exceed the limitation of Subparagraph 3.3(a), the Administrator shall direct that such excess Elective Deferrals, plus any income and minus any loss allocable thereto for the calendar year, be distributed no later than the April 15 following notification to the Administrator. A Member is deemed to notify the Administrator of Elective Deferrals in excess of the limitation in Subparagraph 3.3(a) that arise by taking into account those Elective Deferrals made to the Plan or to any other Plan of the Company or a Subsidiary or Affiliate. (d) For purposes of Subparagraph 3.3(c), gain or loss allocable to excess Elective Deferrals shall be computed under the method used by the Plan to allocate gains and losses. 3.4 Actual Deferral Percentage Tests The Plan shall comply with the requirements of Section 401(k)(3) of the Code and the regulations thereunder, including Treas. Reg. 1.401(k)-1(b), which provisions are incorporated herein by this reference. 11 17 3.5 Return of Elective Deferrals to Members (a) If the Administrator determines pursuant to Paragraph 3.4, that a Member is not eligible to defer any or all amounts elected under Paragraph 3.1, the Administrator may elect, in its discretion, to pursue any of the following steps or any combination of them: (i) The Administrator may authorize a suspension or reduction of Elective Deferrals made under Paragraph 3.1 by authorizing a suspension or reduction of deferrals above a specific dollar amount or percent of compensation; or (ii) The Administrator may reduce the Elective Deferrals of Highly Compensated Employees to the percent necessary to meet the requirements of Paragraph 3.4. The reduction will be accomplished by reducing the Elective Deferrals of Highly Compensated Employees in order of their Elective Deferral amounts beginning with the Members having the highest dollar amount of Elective Deferrals until a requirement of Paragraph 3.4 is met. The amounts reduced, together with gain or loss allocable thereto for the Plan Year, will be paid to affected Members by the end of the following Plan Year. (b) Gain or loss, for purposes of Subparagraph 3.5(a) allocated to excess contributions shall be computed under the method used by the Plan to allocate gains and losses. (c) Amounts distributable under Subparagraph 3.5(a) will be reduced by excess deferrals previously distributed because the limit under Paragraph 3.3 was exceeded. 12 18 (d) This Paragraph 3.5 will be applied after taking into account any reduction in, or repayment, of Elective Deferrals under Paragraphs 3.3 and 4.6. 3.6 Section 415 Limitations (a) In addition to other limitations set forth in the Plan and notwithstanding any other provisions of the Plan, "annual additions" made to this Plan (and all other defined contribution plans required to be aggregated with the Plan under the provisions of Section 415 of the Code) shall not exceed an amount in excess of the limit set forth in such section of the Code. For purposes of calculating such limit under Section 415 of the Code, the "limitation year" shall be the calendar year. Deferrals in excess of the actual deferral percent test of Section 3.4 are considered annual additions even if corrected through distribution. (b) If the limitations described in Section 415(c) of the Code are exceeded for a Member for a limitation year, the excess will be eliminated as follows: (i) Provisions of any other defined contribution plans established by the Company or a Subsidiary or Affiliate which have caused the limits to be exceeded will be applied; provided, however, that if such other Plan is described in Section 401(k) of the Code, the provisions of the Plan in which the Member is active as of the last day of the limitation year shall be applied before the provisions of the Plan in which the Member is inactive. (ii) Amounts attributable to after tax contributions made by the Member to any other plan maintained by the Company or any Subsidiary or Affiliate shall be paid to the Member. 13 19 (iii) Amounts attributable to Elective Deferrals made by a Member to the Plan (or any other plan maintained by the Company or a Subsidiary or Affiliate) shall be paid to the Member. (iv) The excess, if any, will be held unallocated in a suspense account. The suspense account will be applied to reduce contributions for remaining Members in the limitation year, and each succeeding limitation year, if necessary. If a suspense account is in existence at any time during the limitation year pursuant to this subparagraph, it will not participate in the allocation of the investment gains and losses. (c) If the limitations described in Section 415(e) of the Code are exceeded for a Member for a limitation year, the excess will be eliminated by applying the provisions of the defined benefit plan in which the Member participates. 3.7 Make-Up Elective Deferrals Notwithstanding any provisions of the Plan to the contrary, Elective Deferrals with respect to qualified military service may be made in accordance with Section 414(u) of the Code. 14 20 SECTION 4 INVESTMENT OF MEMBER'S ACCOUNTS 4.1 Members' Accounts The Administrator shall establish and maintain an Account in the name of each Member. Separate records shall be maintained with respect to the portion of a Member's Account attributable to Elective Deferrals under Section 3 and transferred amounts under Section 12, and earnings thereon. 4.2 Investment of Elective Deferrals and Transferred Amounts Upon receipt of a Member's Elective Deferrals and transferred amounts under Section 12 the Trustee shall invest such amounts among the following investment alternatives, in the proportion indicated by the Member in his or her investment directions provided to the Administrator: (a) In the Money Market Fund, consisting of specified types of fixed income investments such as deposits in interest-bearing bank accounts, certificates of deposit, corporate or governmental obligations maturing in not more than five years, financial futures contracts, deposits under a deposit administration or similar contract issued by an insurance company or in a commingled or common investment account or fund established and maintained by an investment advisor or a bank (which bank may be the Trustee) and the assets of which are invested primarily in debt obligations, or in any combination thereof as Canyon Fuel Company, LLC or a delegate thereof may determine; (b) In the Equity Fund, consisting of specified equity investments such as common or capital stock of issuers (other than the Company, Atlantic Richfield Company, their Subsidiaries or Affiliates, or Lyondell Petrochemical Company or any of its Subsidiaries or Affiliates), bonds, 15 21 debentures or preferred stocks convertible into common or capital stock of such issuers, financial futures contracts, interests in any commingled or common equity fund established and maintained by an investment advisor or a bank (which bank may be the Trustee), interests in any mutual fund or other similar types of equity investments and cash equivalent short-term investments maturing in less than one year, or in any combination thereof as Canyon Fuel Company, LLC or a delegate thereof may determine; (c) In the Bond Fund, consisting of specified types of fixed income investments, such as public obligations of the United States or foreign governments or their agencies, securitized financing or corporate bonds of issuers (other than the Company, Atlantic Richfield Company, their Subsidiaries or Affiliates, or Lyondell Petrochemical Company or any of its Subsidiaries or Affiliates), debentures, financial futures contracts, interests in any commingled or common fixed income fund established and maintained by an investment advisor or bank (which bank may be the Trustee), interests in any mutual fund or other similar types of fixed income investments and cash equivalent short-term investments, or in any combination thereof as Canyon Fuel Company, LLC or a delegate thereof may determine; (d) In the International Equity Fund consisting of specified investments in global issuers such as common or capital stock (other than common or capital stock of the Company, Atlantic Richfield Company, their Subsidiaries or Affiliates, or Lyondell Petrochemical Company or any of its Subsidiaries or Affiliates), preferred stocks, securities convertible into common or capital stock of such issuers, financial futures contracts, currency futures or options, forward currency contracts, interests in any commingled or common equity fund established and maintained by an investment advisor or a bank (which bank may be the Trustee), interests in any mutual fund or other similar types of equity investments and cash equivalent investments, 16 22 or similar investments or in any combination thereof as Canyon Fuel Company, LLC or a delegate thereof may determine; or (e) In the Balanced Fund consisting of units of the Equity Fund, the International Equity Fund and the Bond Fund. The weighing of the Balanced Fund shall be approximately 45 percent Equity Fund, 15 percent International Equity Fund and 40 percent Bond Fund. A Member's directions as to the initial investment of his or her Elective Deferrals shall be provided in such manner as is prescribed by the Administrator. Such directions shall remain in effect until new directions are provided to the Administrator by the Member. A Member may change the direction as to the initial investment of his or her Elective Deferrals at any time by providing notice in such manner as may be prescribed by the Administrator. Any change of investment directions shall be effective with respect to Elective Deferrals paid to the Trustee for pay periods beginning after the notice is received by the Administrator. 4.3 Funds Invested in the Money Market Fund (a) There shall be invested in the Money Market Fund: (i) Amounts which a Member elects to have so invested under Subparagraph 4.2(a); and (ii) On an interim basis, amounts being accumulated in a Member's Account for investment under Subparagraphs 4.2(b), (c), (d) and (e). (b) Subject to the requirement of Subparagraph 4.4(b), a Member may direct, once during each 15-calendar-day period, that funds invested in the Money Market Fund under Subparagraph 4.2(a) be invested in any of the other permitted alternatives; provided, that (i) only one direction whether made 17 23 solely under this subparagraph, or in combination with a direction under Paragraph 4.4, may be made during a 15-calendar-day period and (ii) a direction under this subparagraph may not be made earlier than seven days following (A) the date of receipt by the Administrator of a Member's application to make a withdrawal under Section 5, (B) the date a loan application is made under Section 11, or (C) the date a loan repayment is made under Subparagraph 11.8(c)(i). (c) Interest shall be allocated on a monthly basis to funds held for a Member in the Money Market Fund as of the last day of a calendar month. However, such allocation shall not be made with respect to funds resulting from a conversion to cash of Equity Fund, Bond Fund, International Equity Fund or Balanced Fund units which occurred in the calendar month in which allocation of interest is made. 4.4 Sale and Reinvestment of Equity Fund, Bond Fund, International Equity Fund, or Balanced Fund Units (a) A Member may direct that units of the Equity Fund, Bond Fund, International Equity Fund and/or Balanced Fund held in the Member's Account be converted to cash and the proceeds thereof, less any applicable expenses of sale, be invested in a different option described in Paragraph 4.2; provided, that (i) only one direction, whether made solely under this subparagraph, or in combination with a direction under Paragraph 4.3, may be made during a 15-calendar-day period and (ii) a direction under this subparagraph may not be made earlier than seven calendar days following (A) the date of receipt by the Administrator of a Member's application to make a withdrawal under Section 5, (B) the date a loan application is made under Section 11, or (C) the date a loan repayment is made under Subparagraph 11.8(c)(i). 18 24 (b) Proceeds of the conversion of units of the Equity Fund, Bond Fund, International Equity Fund or Balanced Fund to cash may not be reinvested in the Equity Fund, Bond Fund, International Equity Fund or Balanced Fund, as the case may be, until 15 calendar days after the date of such conversion. 4.5 Directives All elections and directions by Members concerning the investment of their Accounts shall be made in the manner prescribed by the Administrator, shall be irrevocable and shall become effective upon receipt by the Administrator. 4.6 Title of Investments All investments will be held in the name of the Trustee or its nominees. 4.7 Allocation of Trust Earnings and Valuation of Trust Investments On the last day of each month, all income attributable to the Money Market Fund shall be allocated to the Member's Account in the ratio that each Member's Money Market Fund Account balance bears to such account balance of all such Members. For the purpose of determining such allocation, the Money Market Fund shall be valued at fair market value. 4.8 Purchase and Redemption of the Equity Fund, Bond Fund, International Equity Fund and Balanced Fund Units Purchase and redemption of the Equity Fund, Bond Fund, International Equity Fund and Balanced Fund units shall be handled in accordance with the following rules and such additional procedures, consistent with such rules, as the Administrator may establish from time to time: 19 25 (a) Units of the Equity Fund, Bond Fund, International Equity Fund and Balanced Fund shall be purchased or redeemed, pursuant to Member directions under Paragraph 4.4, on each Wednesday and Friday, covering all Member directives received by the Administrator by such time as determined by the Administrator, and communicated to Members, on the preceding Company business day, except that if a Wednesday or Friday is an Atlantic Richfield Company holiday or a day on which trading on the New York Stock Exchange is closed, the purchase or redemption will be executed on the next day (a Wednesday or Friday) on which the Plan executes a transaction under this Subparagraph 4.8(a). (b) If an unforeseeable administrative difficulty prevents the execution of a transaction under Subparagraph 4.8(a), otherwise scheduled on a Wednesday or Friday, such transaction will be executed on the first business day thereafter which does not fall within one of the two exceptions in Subparagraph 4.8(a). (c) The Administrator may, in its discretion, combine the purchase and redemption orders scheduled for a Wednesday or Friday and transact the net purchase or sale orders, whichever the case may be. The Administrator may also agree with the Administrator of one or more individual account plans [as described in Section 3(34) of ERISA, and which is maintained by the Company or its Subsidiaries or Affiliates, and provides for the same purchase and redemption procedure described in Subparagraph 4.8(a)], to combine orders from all of the plans and execute a "net" transaction. (d) When units of the Equity Fund, Bond Fund, International Equity Fund and Balanced Fund are purchased or redeemed, the cost or net proceeds charged or credited to the Accounts of Members affected by such purchase or redemption shall be determined on an equitable basis in accordance with 20 26 rules to be adopted by the Administrator, which are consistent with the rules described in this section, and incorporate the following principles: (i) The net proceeds of any such redemption of fund units in a Member's Account shall be credited to such Member's Account. (ii) The cost of any such purchase of fund units for a Member's Account shall be charged to such Member's Account. (iii) The net proceeds and cost of fund units shall be based on the net asset value of such units determined on the valuation date next following the date the purchase or redemption order is received by the Administrator. The valuation date shall be determined by the Administrator and shall occur on at least a weekly basis. The net asset value of fund units will be calculated by dividing the difference between the value of the fund assets and fund liabilities by the number of units outstanding with respect to each fund. (iv) Brokerage commissions, transfer fees and other expenses actually incurred in any such purchase or redemption shall be added to the cost or subtracted from the gross proceeds, of any such purchase or redemption, respectively. (e) Income earned by the Equity Fund, Bond Fund and International Equity Fund shall automatically be reinvested in the Equity Fund, Bond Fund and International Equity Fund, as the case may be. Income, gains and losses shall be reflected in the net asset value of the units of the Equity Fund, Bond Fund and International Equity Fund. 21 27 4.9 Voting of the Money Market Fund, Equity Fund, Bond Fund and International Equity Fund Investments The Trustee, in accordance with the Trust Agreement, shall exercise all voting and other rights associated with any investments held in the Money Market Fund, Equity Fund, Bond Fund and International Equity Fund. 4.10 Investment Advisory Fees The investment advisory fees, if any, incurred for management of the Money Market Fund, Equity Fund, Bond Fund, International Equity Fund and Balanced Fund are charged to each respective fund. 22 28 SECTION 5 WITHDRAWALS DURING EMPLOYMENT DUE TO FINANCIAL HARDSHIP 5.1 Application for Withdrawal A Member, other than a Member awaiting a deferred distribution, may at any time request the Member's Elective Deferrals (but not the earnings thereon) be paid to the Member due to financial hardship, provided that no more than one hardship withdrawal may be granted during each six-month period. The request must be made to the Administrator at such time and in such manner prescribed by the Administrator and shall include such documentation and/or written explanation requested by the Administrator. 5.2 Basis for Withdrawal The Administrator shall authorize a withdrawal on account of financial hardship only upon making a written determination that the withdrawal does not exceed the amount of the immediate and heavy financial need of the Member and that the withdrawal is based on the need for funds under one or more of the five following circumstances: (a) The payment of unreimbursable medical expenses described in Section 213(d) of the Code previously incurred by the Employee, the Employee's spouse, or any dependents of the Employee (as defined in Section 152 of the Code) or necessary for these persons to obtain medical care; (b) The payment of all or a portion of the purchase price (excluding mortgage payments) of a principal residence of the Member; (c) The payment of tuition and related educational expenses for the next 12 months of post-secondary education for the Member, his or her spouse, children or dependents, as defined in Code Section 152; 23 29 (d) The need to prevent the eviction of the Member from his or her principal residence or foreclosure on the mortgage of the Member's principal residence; and (e) The need to satisfy a judgment of a federal, state or local court against the Member (such withdrawal will be permitted only if a written determination is made that such withdrawal is necessary in light of immediate and heavy financial need of the Member). 5.3 Payment of Withdrawal (a) A hardship withdrawal shall be paid in a single payment to the Member within 60 days following the Administrator's favorable determination. (b) A hardship withdrawal shall not cause a termination of Membership in the Plan. (c) To the extent permitted by the Code or regulations thereunder, a Member may elect, at a time and in the manner prescribed by the Administrator, to have all or a portion of a hardship withdrawal made payable to an eligible retirement plan. An eligible retirement plan is an individual retirement account or annuity described in Section 408(a) or (b) of the Code, an annuity plan described in Section 403(a) of the Code or a qualified trust described in Section 401(a) of the Code that accepts the deposit of such withdrawal. 5.4 Condition to Receipt of Withdrawal As a condition to receiving the withdrawal: (a) The Member must have obtained all distributions and all nontaxable loans available as of the date of the withdrawal under this Plan and any other employee benefit plan maintained by the Company and any Subsidiary or Affiliate; and 24 30 (b) The Member may not make Elective Deferrals during the remainder of the Member's taxable year or the taxable year immediately following the taxable year in which the hardship distribution is made. 25 31 SECTION 6 PAYMENTS ON TERMINATION OF COMPANY EMPLOYMENT, DIVORCE OR OTHER REASONS 6.1 Termination of Employment (a) If a Member's membership in the Plan is terminated due to disability, termination of employment for any other reason except death, or as the result of a sale described in Subparagraphs 2.4(a)(ii) or (iii), the Member may receive all items in the Member's Account. Each Member shall be fully vested at all times in all items in the Member's Account, whether the same be derived from Elective Deferrals or transferred amounts, or earnings thereon. (b) Upon the election of the Member who has terminated employment, all items in a Member's Account shall be distributed to the Member. With respect to a Member who does not request a distribution and whose Account balance exceeds $3,500: (i) Notwithstanding anything to the contrary in this Paragraph 6.1 and subject to the provisions of Paragraph 6.7, a Member's Account shall be distributed no later than age 65, or, if later, 12 months following termination of membership under Subparagraph 6.1(a); (ii) In the case of the Member's death prior to final distribution, the Member's Account shall be distributed in accordance with Paragraph 6.2 of the Plan; and (iii) No loans or hardship withdrawals may be taken following termination of employment or disability. 26 32 (c) Notwithstanding anything to the contrary in this Paragraph 6.1, all items in the Account of a Member who has terminated employment, and whose Account balance is $3,500 or less, shall be distributed 12 months following the Member's termination of membership, unless the Member elects an earlier distribution date. (d) Notwithstanding anything in the Plan to the contrary, when a Member elects to receive all items in the Member's Account and, in conjunction therewith, directs that items in his or her Account be converted pursuant to Paragraph 4.4, the conversion shall be transacted on the first transaction date under the Plan following the Administrator's receipt of a request for distribution. 6.2 Death (a) If a Member dies, or a former Member dies while awaiting receipt of a distribution pursuant to Paragraph 6.1, and it is established to the Plan's satisfaction that the consent required under Subparagraph 6.2(c), either has been obtained or was not obtainable, all items in the Member's or former Member's Account shall be paid to the beneficiary or beneficiaries most recently designated by the Member or former Member in such manner as prescribed by the Administrator. Such payment shall be made no later than 90 days following the close of the Plan Year in which the Plan receives certification of the Member's death. If no such designation shall have been made, or if all designated beneficiaries should die before the Member or former Member, payment shall be made to the Member's or former Member's estate. (b) Except as provided in Subparagraph 6.2(c), if a Member or former Member is survived by a spouse, all items in the Member's or former Member's Account shall be paid to the Member's spouse. 27 33 (c) If a Member or former Member is survived by a spouse, all items in a Member's or former Member's Account shall be paid to the beneficiary or beneficiaries most recently designated by the Member or former Member in such manner as prescribed by the Administrator; provided, (i) the surviving spouse of the Member or former Member has irrevocably consented in writing to the designation of the specific beneficiary or beneficiaries, which designation may not be changed without spousal consent (or the spouse expressly permits designations by the Member or former Member without any further spousal consent), such consent acknowledged the effect of the election and such consent was witnessed by a notary public, or (ii) it is established to the Plan's satisfaction that the consent required by Subparagraph 6.2(c)(i), could not be obtained because the surviving spouse could not be located or because of such other circumstances as the Secretary of Treasury may by regulation prescribe. Any consent necessary under this paragraph shall be effective only with respect to such spouse, or, in the event it is established that the consent may not be obtained, such designated spouse. A revocation of a prior designation may be made by a Member without the consent of the spouse at any time prior to the Member's death. A consent that permits designation by the Member or former Member without any requirement for further consent by the spouse must acknowledge that the spouse has the right to limit consent to a specific beneficiary and that the spouse voluntarily elects to relinquish such right. 6.3 Disability Disability means a medically determinable physical or mental impairment resulting from illness or injury as a result of which the Member is unable to perform one or more of the substantial duties of the Member's normal work assignment with the Company or of any work assignment which the Company determines is available to the Member and for which the Member is reasonably qualified by education, 28 34 training or experience to perform as determined by the Administrator after review by the Medical Board or such other entity as designated by the Administrator. 6.4 Divorce To the extent specified in a Qualified Domestic Relations Order, as defined in Section 414(p) of the Code, distributions from a Member's Account may be made to an Alternate Payee, as defined in Section 414(p) of the Code, prior to the Member's termination of membership under Subparagraph 6.1(a). Distributions under this paragraph shall be made at the time set forth in the Qualified Domestic Relations Order, or, if such order provides, at the time elected by the Alternate Payee. 6.5 Rollover (a) Notwithstanding anything in this Section 6 to the contrary, a distributee, as defined below, may elect, at a time and in the manner prescribed by the Administrator, to have all or a portion of a distribution under this Section 6, other than any amount required to be distributed pursuant to Section 401(a)(9) of the Code, made payable to an eligible retirement plan. (b) For purposes of this Section 6, other than Paragraph 6.2, an eligible retirement plan is an individual retirement account or annuity described in Section 408(a) or (b) of the Code, an annuity plan described in Section 403(a) of the Code or a qualified trust described in Section 401(a) of the Code that accepts such distribution. For purposes of a distribution under Paragraph 6.2, an eligible retirement plan is an individual retirement account or annuity. (c) Distributee means an Employee or former Employee, the surviving spouse of such Employee or such Employee's spouse or former spouse who is an alternate payee as defined in Section 414(p) of the Code. 29 35 6.6 Notice With respect to a Member whose account exceeds $3,500, the Administrator shall provide the notice required by Section 1.411(a)-11(c) of Income Tax Regulations no less than 30 days and no more than 90 days before the Member's date of distribution; provided, however, that such distribution may commence less than 30 days after the required notice is given if: (a) The Member is informed of the Members' right to a period of at least 30 days after receiving the notice to consider distribution options; and (b) The Member, after receiving the notice, affirmatively elects a distribution. 6.7 Distributions Notwithstanding anything in the Plan to the contrary, a former Employee's (or an Employee who is a five percent owner, as defined in Code Section 416) Account shall be distributed in a lump sum, no later than the first day of April following the calendar year in which the former Employee or five percent owner attains age 70-1/2. Any amounts subsequently allocated to a Member's Account shall be distributed during the calendar year immediately following the year of allocation. 6.8 Distribution of Benefits The distribution of benefits under the Plan to a Member who has elected to receive such benefits shall be made not later than the 60th day after the latest of the close of the plan year in which (a) the Member attains age 65 or such earlier normal retirement age as may be specified in this Plan; (b) there occurs the tenth anniversary of the year in which the Member commenced membership in this Plan; or (c) the Member's service with the Company is terminated. 30 36 SECTION 7 ADMINISTRATION CAPITAL ACCUMULATION PLAN ADMINISTRATIVE COMMITTEE 7.1 Capital Accumulation Plan Administrative Committee The Plan shall be administered by a Capital Accumulation Plan Administrative Committee. The Committee shall consist of the Vice President, Human Resources of Atlantic Richfield Company, who shall serve as Chairperson, and not less than two other persons appointed by the Chairperson. Members of the Committee shall serve without compensation. Vacancies shall be filled by the Chairperson or the Chairperson's delegate. 7.2 Rules of Conduct The Capital Accumulation Plan Administrative Committee shall adopt such rules for the conduct of its business and administration of this Plan as it considers desirable; provided, they do not conflict with this Plan. 7.3 Legal, Accounting, Clerical The Capital Accumulation Plan Administrative Committee may authorize one or more of its members or any agent to act on its behalf and may contract for legal, accounting, clerical and other services to carry out the Plan. Unless paid by the Company, all expenses of the Company, the Administrator and the Plan shall be paid by the Plan, to the extent they constitute reasonable expenses of administering the Plan. The Plan may reimburse expenses paid directly by the Company or its designee. This provision shall be deemed a part of any contract to provide for expenses of Plan administration, whether or not the signatory to such contract is, as a matter of convenience, the Company or its designee. 7.4 Interpretation of Provisions The Capital Accumulation Plan Administrative Committee shall have full discretion and final authority to determine eligibility for benefits and to interpret the provisions 31 37 of the Plan, to decide questions arising in its administration, and to establish such other rules for its administration as may be desirable. 7.5 Records of Administration The Capital Accumulation Plan Administrative Committee shall keep records reflecting the administration of this Plan which shall be subject to audit by the Company. Members may examine records pertaining directly to themselves. At least annually, the Capital Accumulation Plan Administrative Committee shall have mailed to each Member a statement of his or her Account and such statement shall be deemed to have been accepted as correct for all purposes of the Plan unless written notice to the contrary is received by the Capital Accumulation Plan Administrative Committee or the Trustee within 30 days after the date of mailing. 7.6 Claims for Benefits Applications for benefits must be made in such manner as prescribed by the Administrator. The Administrator shall have full discretion and final authority to determine eligibility for benefits and to construe the terms of the Plan in acting upon an initial application for benefits or an appeal of a denial of an application for benefits. Each application shall be acted upon and approved or disapproved within 90 days following its receipt by the Administrator. In the event special circumstances require an extension of time for reviewing the initial application for benefits, the Administrator shall make a determination as soon as practicable but no later than 180 days following receipt of the application. If any application for benefits is denied, in whole or in part, the Administrator shall notify the applicant in writing of such denial and of the applicant's right to a review by the Administrator and shall set forth in a manner calculated to be understood by the applicant, specified reasons for such denial, specific references to pertinent Plan provisions on which the denial is based, a description of any additional material or information necessary for the applicant to perfect the application, an explanation of why such 32 38 material or information is necessary, and an explanation of the Plan's review procedure. Any person, or a duly authorized representative thereof, whose application for benefits is denied in whole or in part, may appeal from such denial to the Administrator for a review of the decision by submitting to the Administrator within 60 days after receiving notice of denial, a written statement: (a) Requesting a review of the application for benefits by the Administrator; (b) Setting forth all of the grounds upon which the request for review is based and any facts in support thereof; and (c) Setting forth any issues or comments which the applicant deems relevant to the application. The Administrator shall act upon each such appeal application within 60 days after the later of receipt of the applicant's request for review by the Administrator or receipt of any additional materials reasonably requested by the Administrator from such applicant. In the event special circumstances require an extension of time for reviewing the appeal, the Administrator shall make a determination as soon as practicable but no later than 120 days following receipt of the appeal. The Administrator shall make a full and fair review of each such application and any written materials submitted by the applicant or the Company in connection therewith and may require the Company or the applicant to submit within 30 days of written notice by the Administrator therefor, such additional facts, documents, or other evidence as the Administrator, in its sole discretion, deems necessary or advisable in making such a review. The Administrator shall have full discretion in making an independent determination of the applicant's eligibility for benefits under 33 39 the Plan and shall have full discretion to construe the terms of the Plan in making its review. The decision of the Administrator on any application for benefits shall be final and conclusive upon all persons. If the Administrator denies an application in whole or in part, the Administrator shall give written notice of its decision to the applicant setting forth in a manner calculated to be understood by the applicant the specific reasons for such denial and specific references to the pertinent Plan provisions on which the Administrator's decision was based. 7.7 Liability of Committee No member of the Capital Accumulation Plan Administrative Committee shall be liable for any action taken in good faith or for the exercise of any power given the Capital Accumulation Plan Administrative Committee, or for the actions of other members of said Committee unless and except to the extent that such liability is imposed under law as a result of a breach by such member of his or her fiduciary responsibilities. 7.8 Medical Board The Capital Accumulation Plan Administrative Committee may appoint a Medical Board consisting of not less than three physicians, who shall be authorized to make any physical or mental examinations required or authorized by the Administrator or by the provisions of the Plan. 7.9 Unlocated Member If the Committee is unable, after reasonable and diligent effort, to locate a Member or beneficiary entitled to payment under the Plan, such payment may be forfeited and used to pay Plan expenses. If the Member or beneficiary later files a claim for benefit, such benefit will be reinstated. 34 40 7.10 Legal Representative The Capital Accumulation Plan Administrative Committee shall act on behalf of the Plan with respect to any claim or cause of action, whether arising in the course of administrative or judicial proceedings or otherwise, and shall be responsible for initiating, pursuing and defending any such claim or cause of action involving the Plan. 35 41 SECTION 8 AMENDMENTS, DISCONTINUANCE, LIABILITIES 8.1 Amendment of Plan This Plan may be amended by the Management Board of Canyon Fuel Company, LLC if, as amended, it continues to be for the exclusive benefit of Employees. However, no amendment shall reduce the account of any Member as of the date of such amendment. 8.2 Termination Canyon Fuel Company, LLC intends to continue the Plan indefinitely but reserves the right to terminate it at any time, by action of its Management Board. If this Plan is terminated, or if there is a complete discontinuance of contributions under the Plan by the Company, all amounts credited to Accounts of Members shall be held for distribution as provided in Section 6. 8.3 Liability of Company The Company shall have no liability for payments under this Plan. Any payments under the Plan shall be made solely from the fund held by the Trustee. 36 42 SECTION 9 MISCELLANEOUS 9.1 Employment The Plan shall not give any Member any right to be continued in the employment of the Company. 9.2 Benefits Not Assignable Except as provided in Paragraph 6.4, no benefit under this Plan shall be assignable or transferable in whole or in part, either directly or by operation of law or otherwise, and shall not be subject to attachment or other process. 9.3 Discharge of Liability If the Administrator deems any person incapable of receiving benefits to which such person is entitled under the Plan, by reason of minority, illness, infirmity, mental incompetency or other incapacity, it may direct the Trustee to make payment directly for the benefit or the account of such person or to any eligible person selected by the Administrator to disburse such payment whose receipt shall be a complete settlement therefor. 9.4 Governing Laws The Plan shall be governed by and construed in accordance with federal laws governing employee benefit plans qualified under the Code or with the laws of the State of Delaware to the extent not preempted by federal law. 9.5 Limitation on Mergers The Plan may not merge or consolidate with, or transfer any of its assets or liabilities to any other plan unless each Member in the Plan would, if said other plan were to terminate, receive a benefit immediately after the merger, consolidation or transfer which is equal to or greater than the benefit such Member 37 43 would have been entitled to receive immediately before the merger, consolidation or transfer if this Plan had terminated. 9.6 Delegation of Fiduciary or Administrative Responsibilities Canyon Fuel Company, LLC, by resolution of its Management Board or by written action of any officer generally or specifically named by such a resolution to take such an action, and the Capital Accumulation Plan Administrative Committee, by resolution of said Committee, may at any time delegate to any other named person or body, or reassume therefrom, any of their respective fiduciary responsibilities or administrative duties with respect to the Plan, including the power to delegate and reassume such responsibilities and duties by written action naming the person or body to whom the responsibility has been delegated. However, only the immediate delegate of Canyon Fuel Company, LLC or the Capital Accumulation Plan Administrative Committee as the case may be, may, if so authorized by Canyon Fuel Company, LLC, said Committee, delegate any such responsibilities or duties. 9.7 Named Fiduciary The named fiduciary with respect to this Plan is Canyon Fuel Company, LLC except that (a) as to any matter specified in this Plan as being the responsibility or function of the Capital Accumulation Plan Administrative Committee, the named fiduciary is said Committee, and (b) as to any matter specified in the Plan or in the trust agreement as being the responsibility or function of the Trustee or the Investment Officer of Atlantic Richfield Company, the named fiduciary is the Trustee or the Investment Officer of Atlantic Richfield Company, as the case may be. 38 44 SECTION 10 TOP HEAVY PROVISIONS If the Plan is or becomes Top Heavy in any Plan Year, the provisions of this Section 10 will supersede any conflicting provisions in the Plan. 10.1 Definitions (a) Key Employee means an Employee, former Employee or an Employee's beneficiary who at any time during the determination period is: (i) An officer of the Company who has annual Compensation greater than 50 percent of the amount in effect under Section 415(b)(1)(A) of the Code for the Plan Year; (ii) One of the ten Employees owning (or considered as owning within the meaning of Section 318 of the Code) the largest interest in the Company; provided, such Employee's annual Compensation from the Company exceeds the dollar limitation under Section 415(c)(1)(A) of the Code. If two or more Employees have the same ownership interest, the Employee with the greater annual Compensation from the Company for the Plan Year shall be considered to own the larger interest in the Company; (iii) A five percent owner of the Company; or (iv) A one percent owner of the Company who has annual Compensation from the Company of more than $150,000. The determination period of the Plan is the Plan Year containing the Determination Date and the four preceding Plan Years. 39 45 The determination of who is a Key Employee will be made in accordance with Section 416(i)(1) of the Code and the regulations thereunder. (b) Top Heavy Plan: This Plan is Top Heavy if any of the following conditions exist: (i) If the Top Heavy Ratio for this Plan exceeds 60 percent and this Plan is not part of any Required Aggregation Group or Permissive Aggregation Group of plans; (ii) If this Plan is a part of a Required Aggregation Group of plans (but which is not part of a Permissive Aggregation Group) and the Top Heavy Ratio for the group of plans exceeds 60 percent; or (iii) If this Plan is a part of a Required Aggregation Group of plans and part of a Permissive Aggregation Group and the Top Heavy Ratio for the Permissive Aggregation Group exceeds 60 percent. (c) Top Heavy Ratio (i) If the Company maintains one or more defined contribution plans (including any Simplified Employee Pension Plan) and the Company has not maintained any defined benefit plan which during the five- year period ending on the Determination Date(s) has or has had accrued benefits, the Top Heavy Ratio for this plan alone or for the Required or Permissive Aggregation Group as appropriate is a fraction, the numerator of which is the sum of the account balances of all Key Employees as of the Determination Date(s) [including any part of any account 40 46 balance distributed in the five-year period ending on the Determination Date(s)], and the denominator of which is the sum of all account balances [including any part of any account balance distributed in the five-year period ending on the Determination Date(s)], both computed in accordance with Section 416 of the Code and the regulations thereunder. Both the numerator and denominator of the Top Heavy Ratio are adjusted to reflect any contribution not actually made as of the Determination Date, but which is required to be taken into account on that date under Section 416 of the Code and the regulations thereunder. (ii) If the Company maintains one or more defined contribution plans (including any Simplified Employee Pension Plan) and the Company maintains or has maintained one or more defined benefit plans which during the five-year period ending on the Determination Date(s) has or has had any accrued benefits, the Top heavy Ratio for any Required or Permissive Aggregation Group as appropriate is a fraction, the numerator of which is the sum of account balances under the aggregated defined contribution plan or plans for all Key Employees, determined in accordance with Subparagraph 10.1(c)(i), and the Present Value of accrued benefits under the aggregated defined benefit plan or plans for all Key Employees as of the Determination Date(s), and the denominator of which is the sum of the account balances under the aggregated defined contribution plan or plans for all Members, determined in accordance with Subparagraph 10.1(c)(i), and the Present Value of accrued benefits under the defined benefit plan or plans for all Members as of the Determination Date(s), all determined in accordance with Section 416 of the Code and the regulations thereunder. The accrued benefits under a defined benefit plan in both the numerator and denominator of the Top Heavy Ratio are adjusted for any distribution of an accrued benefit made in the five-year period ending on the Determination Date. 41 47 (iii) For purposes of Subparagraphs 10.1(c)(i) and (c)(ii), the value of account balances and the Present Value of accrued benefits will be determined as of the most recent Valuation Date that falls within or ends with the 12-month period ending on the Determination Date except as provided in Section 416 of the Code and the regulations thereunder for the first and second Plan Years of a defined benefit plan. The account balances and accrued benefits of a Member (A) who is not a Key Employee but who was a Key Employee in a prior year, or (B) who has not been credited with at least one hour of service with a Company maintaining the Plan at any time during the five-year period ending on the Determination Date will be disregarded. The calculation of the Top Heavy Ratio, and the extent to which distributions, rollovers and transfers are taken into account will be made in accordance with Section 416 of the Code and the regulations thereunder. Deductible Employee contributions will not be taken into account for purposes of computing the Top Heavy Ratio. When aggregating plans, the value of account balances and accrued benefits will be calculated with reference to the Determination Dates that fall within the same calendar year. (iv) The accrued benefit of a Member other than a Key Employee shall be determined under the method, (A) if any, that uniformly applies for accrual purposes under all defined benefit plans maintained by the Company, or (B) absent such method, as if such benefits accrued not more rapidly than the slowest accrued rate permitted under the fractional rule of Section 411(b)(1)(C) of the Code. (d) Permissive Aggregation Group: The Required Aggregation Group of plans plus any other plan or plans of the Company which, when considered as a 42 48 group with the Required Aggregation Group, would continue to satisfy the requirements of Section 401(a)(4) and Section 410 of the Code. (e) Required Aggregation Group means: (i) Each qualified plan of the Company in which at least one Key Employee participates or participated at any time during the determination period (regardless of whether the plan terminated); and (ii) Any other qualified plan of the Company which enables a plan described in Subparagraph 10.1(e)(i) to meet the requirements of Section 401(a)(4) or Section 410 of the Code. (f) Determination Date means for any Plan Year the last day of the preceding Plan Year. For the first Plan Year of the Plan, the last day of that year. (g) Valuation Date means December 31 of each year. (h) Present Value: Present Value shall be based on interest rate and the mortality tables specified in the Company's defined benefit plan. (i) Compensation means all compensation, as that term is defined for Section 415 purposes, but including amounts contributed by the Company pursuant to salary reduction agreements which are excludable from the Employee's income under Code Section 125, Section 402(e)(3), Section 402(h) and Section 403(b). 10.2 Minimum Allocation (a) Except as otherwise provided in Subparagraphs 10.2(b), (c) and (d), the Company contributions allocated on behalf of any Member who is not a Key Employee shall not be less than the lesser of three percent of such 43 49 Member's Compensation or in the case where the Company has no defined benefit plan which designates this Plan to satisfy Section 401 of the Code, the largest percentage of Company contributions, as a percentage of the first $150,000 of the Key Employee's Compensation, allocated on behalf of any Key Employee for that year. The minimum allocation is determined without regard to any Social Security contribution. This minimum allocation shall be made even though, under other Plan provisions, the Member would not otherwise be entitled to receive an allocation, or would have received a lesser allocation for the year because of (i) the Member's failure to complete 1,000 Hours of Service, or (ii) the Member's failure to make mandatory employee contributions to the Plan, or (iii) Compensation less than a stated amount. (b) The provision in Subparagraph 10.2(a), shall not apply to any Member who was not employed by the Company on the last day of the Plan Year. (c) If Members of this Plan are covered by one or more defined benefit plans maintained by the Company or its Subsidiaries, the minimum allocation or benefit requirements applicable to Top Heavy plans shall first be met by such defined benefit plan or plans. (d) If Members of this Plan are covered by one or more defined contribution plans maintained by the Company or its Subsidiaries, and are not covered by any defined benefit plans of the Company or its Subsidiaries, the minimum allocation requirement will be met by the defined contribution plan in which the Employee is an active member in the following order: 1. Money Purchase Pension Plan 2. Profit Sharing Plan, and 3. Stock Bonus Plan 44 50 (e) For purposes of satisfying the minimum allocation requirements of this Paragraph 10.2, Elective Deferrals and Company contributions under Paragraph 4.1 may not be taken into account. 10.3 The minimum accrued benefit required [to the extent required to be nonforfeitable under Section 416(b)] may not be suspended or forfeited under Code Section 411(a)(3)(B) or Section 411(a)(3)(D). 10.4 For any Plan Year in which the Plan is Top Heavy, only the first $150,000 (or such larger amount as may be prescribed by the Secretary of Treasury or the Secretary's delegate) of each Member's annual Compensation will be taken into account for purposes of determining benefits under the Plan. 10.5 In any Plan Year in which the Top Heavy Ratio exceeds 60 percent the denominators of the defined benefit fraction and defined contribution fraction [as previously defined in the Plan] shall be computed using 100 percent of the dollar limitation instead of 125 percent. The preceding sentence shall not apply to an Employee so long as there are no: (a) Company contributions, forfeitures or voluntary nondeductible contributions allocated to such Employee, or (b) Accruals for such Employee under any qualified defined benefit plan. 10.6 In determining the highest rate of contribution applicable to any Key Employee, amounts that such Key Employee elects to defer under an arrangement qualified under Section 401(k) of the Code will be counted for the purposes of Section 416 of the Code. 45 51 SECTION 11 LOANS TO MEMBERS 11.1 General A Member may borrow from his or her Account in accordance with the terms and conditions set forth in this Section 11 and such additional rules, consistent with such terms and conditions, which the Administrator may establish from time to time. 11.2 Eligibility To be eligible to apply for and receive a loan, the Member must be in receipt of regular Earnings. The loan shall be irrevocable upon the earlier of: (a) Endorsement of the check representing the loan proceeds, or (b) Expiration of ten days from issuance of such check. 11.3 Loan Amount (a) The maximum loan shall be the greater of (i) or (ii), below: (i) The lesser of $10,000; or (ii) The lesser of one half of the Member's Account, or $50,000 reduced by the highest balance, at any specific time, of any outstanding loan or loans during the preceding 12 months from the Plan. (b) A loan must be in cash, in increments of $100 and in an amount not less than $1,000. 46 52 (c) The maximum loan amount shall be reduced to the extent necessary to prevent each installment of the loan payment, including principal and interest from exceeding 25 percent of a Member's biweekly Earnings. (d) The loan amount may not exceed the amount of the security, as described hereafter, for the loan. (e) The value of the Equity Fund, the International Equity Fund, the Bond Fund and the Balanced Fund for purposes of Subparagraph 11.3(a), will be determined on the sale date, pursuant to Paragraph 4.8, immediately preceding the date the loan application is received by the Administrator. 11.4 Frequency (a) A Member may have such number of loans outstanding at any time as shall be determined by the Administrator. (b) A loan application may be submitted only once during any 15-day period and a loan application may not be submitted earlier than seven days following receipt by the Administrator of a Member's application to make a purchase or sale under Paragraph 4.4 or a hardship withdrawal under Section 5. (c) A loan application may not be submitted earlier than 15 days following repayment of a previous loan under the Plan. 11.5 Interest Rate A loan shall bear interest at a rate established and communicated by the Capital Accumulation Plan Administrative Committee to provide the Plan with a rate of return commensurate with prevailing interest rates charged on similar commercial loans by persons in the business of lending money. 47 53 11.6 Security (a) Each loan must be evidenced by a loan agreement executed by the Member for the amount of the loan, including principal and interest, payable to the order of the Trustee. (b) Security for the loans shall equal 50 percent of the assets in the Member's Account. (c) The assets which constitute security for the loan will be valued on the date of the loan agreement, or at such other time as may be determined by the Administrator. 11.7 Funding of the Loan (a) The Member shall direct as prescribed by the Administrator, which assets shall be used to provide the loan proceeds. To the extent the Member does not give such directions, the loan will be funded in accordance with procedures established by the Administrator. (b) The value of the Equity Fund, the International Equity Fund, the Bond Fund and the Balanced Fund sold to provide the loan proceeds shall be determined on the sale date, pursuant to Paragraph 4.8, immediately following the date the loan application is received by the Administrator. 11.8 Repayment of the Loan (a) As determined by the Member, but subject to the restriction in Subparagraph 11.3(c), a loan may be repaid over a period of one, two, three, four or five years or, in the case of a loan used to acquire the Member's principal residence, such longer term as determined by the Administrator and permitted under Section 72(p) of the Code. 48 54 (b) Principal and interest shall be amortized, on a level basis, over the term of the loan. (c) Except as provided below, payments shall be made by means of payroll deductions, the authorization of which shall be irrevocable. (i) The loan may be repaid in full at any time without penalty. (ii) If a Member is not in receipt of regular Earnings sufficient to permit repayment of the loan, repayment shall be made by means prescribed by the Administrator. Repaid principal and interest shall be credited to the Member's Money Market Fund account. (d) Loan repayments will be suspended under the Plan as permitted by Section 414(u)(4) of the Code. 11.9 Deemed Distribution A distribution of the unpaid principal shall be deemed to have been made to the Member, if the Member: (a) Separates from service for any reason, including retirement, termination of employment, divestiture or death. The deemed distribution shall occur upon the earlier of 12 months following termination of membership or the date the loan was due. (b) Fails to make repayment under Subparagraph 11.8(c)(ii) for a period of seven consecutive scheduled payment dates. 49 55 11.10 Default If the Member is not in receipt of regular Earnings sufficient to permit repayment of the loan for a period exceeding seven consecutive pay periods, and other arrangements acceptable to the Administrator have not been agreed to by the Member, the loan will be deemed in default and the Administrator will realize on the security in accordance with applicable laws. 50 56 SECTION 12 TRANSFERS FROM OTHER PLANS 12.1 Transfers From Other Qualified Plans An Employee who has had distributed to the Employee all or a portion of his or her taxable interest in a plan meeting the requirements of Section 401(a) of the Code (the "Other Plan") may, in accordance with procedures approved by the Capital Accumulation Plan Administrative Committee, transfer in cash all or a portion of the taxable distribution received from the Other Plan to the Plan, provided the following conditions are met: (a) The transfer occurs on or before the 60th day after the Member receives the distribution from the Other Plan; (b) The distribution from the Other Plan qualifies as an eligible rollover distribution within the meaning of Section 402(c)(4) of the Code; and (c) The amount transferred does not exceed the maximum amount which may be rolled over in accordance with Section 402(c)(2) of the Code. 12.2 Transfers From Individual Retirement Accounts An Employee who receives a distribution from an individual retirement account described in Section 408(a) of the Code or an individual retirement annuity described in Section 408(b) of the Code which constitutes the entire amount of such account or annuity (including earnings thereon), and no portion of which is attributable to any source other than a lump sum distribution from a qualified plan described in Paragraph 12.1, may, in accordance with procedures approved by the Capital Accumulation Plan Administrative Committee, transfer in cash all or a portion of such distribution to the Plan, within 60 days after receiving the distribution. 51 57 12.3 Participation Notwithstanding anything in the Plan to the contrary, an Employee who transfers funds to the Plan pursuant to Paragraph 12.1 or 12.2, shall, upon such transfer, become a Member of the Plan except that the right to make Elective Deferrals will remain subject to Paragraph 2.1. 12.4 Administration The Administrator shall develop such procedures, including procedures for obtaining information from an Employee desiring to make such a transfer, as it deems necessary or desirable to enable it to determine that the proposed transfer will meet the requirements of this section. Upon approval by the Capital Accumulation Plan Administrative Committee, the amount transferred shall be deposited with the Trustee in the Employee's Elective Deferral Account. 52 EX-4.3 3 CH-TWENTY, INC. CAPITAL ACCUMULATION PLAN 1 EXHIBIT 4.3 CH-TWENTY, INC. CAPITAL ACCUMULATION PLAN EFFECTIVE AS OF JULY 1, 1997 2 CH-TWENTY, INC. CAPITAL ACCUMULATION PLAN To record the adoption of the CH-Twenty, Inc. Capital Accumulation Plan, effective July 1, 1997, the undersigned, being duly authorized to act on behalf of CH-Twenty, Inc. has executed this plan document at Los Angeles, California on the 30th day of June, 1997. ATTEST: CH-TWENTY, INC. BY: /s/ ARMINEH SIMONIAN BY: /s/ ALLAN L. COMSTOCK -------------------------- ---------------------------------- ALLAN L. COMSTOCK President 3 CH-TWENTY, INC. CAPITAL ACCUMULATION PLAN TABLE OF CONTENTS
Page No. -------- INTRODUCTION ...............................................................................1 Section 1 - DEFINITION 1.1 Acquisition Loan......................................................2 1.2 Administrator.........................................................2 1.3 Annual Earnings or Earnings...........................................2 1.4 Capital Accumulation Plan Administrative Committee....................2 1.5 Code..................................................................2 1.6 Company...............................................................2 1.7 Credit Company Service................................................2 1.8 Effective Date........................................................3 1.9 Elective Deferrals or Deferrals.......................................3 1.10 Employee..............................................................3 1.11 ERISA.................................................................3 1.12 Financed Shares.......................................................3 1.13 Highly Compensated Employee...........................................3 1.14 Hours of Service......................................................5 1.15 Medical Board.........................................................7 1.16 Member................................................................7 1.17 Member's Account or Account...........................................7 1.18 Plan or Plans.........................................................8 1.19 Plan Year.............................................................8 1.20 Predecessor Plan......................................................8 1.21 Salary Reduction Agreement............................................8 1.22 Subsidiary or Affiliate...............................................8 1.23 Trustee...............................................................9 Section 2 - MEMBERSHIP - ELIGIBILITY 2.1 Membership............................................................10 2.2 Notice to Administrator...............................................10 2.3 Transferees...........................................................11 2.4 Membership Termination................................................11 Section 3 - MEMBERS' ELECTIVE DEFERRALS 3.1 Members' Elections....................................................13 3.2 Contribution of Elective Deferrals....................................13 3.3 Annual Dollar Limitation..............................................14 3.4 Actual Deferral Percentage Tests......................................15 3.5 Return of Elective Deferrals to Members...............................15 3.6 Make-Up Elective Deferrals............................................16
i 4 Section 4 - COMPANY CONTRIBUTION 4.1 Company Contribution..................................................17 4.2 Form of Contribution..................................................17 4.3 Members Excluded From Contribution....................................17 4.4 Actual Contribution Percentage Test...................................17 4.5 Distribution of Excess Contributions..................................18 4.6 Section 415 Limitations...............................................18 4.7 Nonelective Contributions.............................................20 4.8 Exclusive Benefit.....................................................20 Section 5 - FINANCED SHARES 5.1 Acquisition Loans.....................................................21 5.2 Payments on Acquisition Loan..........................................22 Section 6 - INVESTMENT OF MEMBER'S ACCOUNTS 6.1 Members' Accounts.....................................................25 6.2 Investment of Elective Deferrals Transferred Amounts and Certain Company Contributions.................................25 6.3 Investment of Company Contributions ..................................27 6.4 Funds Invested in the Money Market Fund...............................28 6.5 Sale and Reinvestment of Common Stock Equity Fund Units, Bond Fund Units, International Equity Fund Units or Balanced Fund Units.......................................................29 6.6 Directives............................................................30 6.7 Purchases and Sales of Atlantic Richfield Company Common Stock.....................................................31 6.8 Voting of Atlantic Richfield Company Common Stock.....................33 6.9 Title of Investments..................................................35 6.10 Allocation of Trust Earnings and Valuation of Trust Investments.......35 6.11 Purchase and Redemption of the Equity Fund, Bond Fund, International Equity Fund and Balanced Fund Units...................36 6.12 Voting of the Money Market Fund, Equity Fund, Bond fund and International Equity Fund Investments..............................38 6.13 Investment Advisory Fees..............................................38 6.14 Member Protection.....................................................38 6.15 Confidentiality.......................................................38 Section 7 - WITHDRAWALS DURING EMPLOYMENT DUE TO FINANCIAL HARDSHIP 7.1 Application for Withdrawal............................................40 7.2 Basis for Withdrawal..................................................40 7.3 Payment of Withdrawal.................................................41 7.4 Condition to Receipt of Withdrawal....................................41
ii 5 Section 8 - PAYMENTS ON TERMINATION OF COMPANY EMPLOYMENT, DIVORCE OR OTHER REASONS 8.1 Termination of Employment.............................................43 8.2 Death.................................................................44 8.3 Disability............................................................45 8.4 Divorce...............................................................46 8.5 Rollover..............................................................46 8.6 Notice................................................................47 8.7 Distributions.........................................................47 8.8 Distribution of Benefits..............................................47 Section 9 - CAPITAL ACCUMULATION PLAN ADMINISTRATIVE COMMITTEE 9.1 Capital Accumulation Plan Administrative Committee....................48 9.2 Rules of Conduct......................................................48 9.3 Legal, Accounting, Clerical...........................................48 9.4 Interpretation of Provisions..........................................48 9.5 Records of Administration.............................................49 9.6 Claims for Benefits...................................................49 9.7 Liability of Committee................................................51 9.8 Medical Board.........................................................51 9.9 Unallocated Member....................................................51 9.10 Legal Representative..................................................52 Section 10 - AMENDMENTS, DISCONTINUANCE, LIABILITIES 10.1 Amendment of Plan.....................................................53 10.2 Termination...........................................................53 10.3 Liability of Company..................................................53 Section 11 - MISCELLANEOUS 11.1 Employment...........................................................54 11.2 Benefits Not Assignable..............................................54 11.3 Discharge of Liability...............................................54 11.4 Governing Laws.......................................................54 11.5 Limitation on Mergers................................................54 11.6 Delegation of Fiduciary or Administrative Responsibilities...........55 11.7 Named Fiduciary......................................................55 11.8 Transferred Funds....................................................56 Section 12 - TOP HEAVY PROVISIONS 12.1 Definitions..........................................................58 12.2 Minimum Allocation...................................................62 12.3 .....................................................................64 12.4 .....................................................................64 12.5 .....................................................................64 12.6 .....................................................................64
iii 6 Section 13 - LOANS TO MEMBERS 13.1 General..............................................................65 13.2 Eligibility..........................................................65 13.3 Loan Amount..........................................................65 13.4 Frequency............................................................66 13.5 Interest Rate........................................................67 13.6 Security.............................................................67 13.7 Funding of the Loan..................................................68 13.8 Repayment of the Loan................................................68 13.9 Deemed Distribution..................................................69 13.10 Default..............................................................69 Section 14 - TRANSFERS FROM OTHER PLANS 14.1 Transfers from Other Qualified Plans.................................70 14.2 Transfers from Individual Retirement Accounts........................70 14.3 Participation........................................................71 14.4 Administration.......................................................71
iv 7 CH-TWENTY, INC. CAPITAL ACCUMULATION PLAN INTRODUCTION This Plan is intended to qualify as a Stock Bonus Plan under Section 401(a) of the Internal Revenue Code of 1986, as amended, and as a Qualified Cash or Deferred Arrangement under Section 401(k) of the Code. Part of the Plan (the "ESOP Part") is intended to qualify as an Employee Stock Ownership Plan under Section 4975(e)(7) of the Code and such part is designed to invest primarily in Atlantic Richfield Company Common Stock. The class of employees eligible to participate in this Plan previously participated in the Atlantic Richfield Capital Accumulation Plan II. The assets and liabilities of the Atlantic Richfield Capital Accumulation Plan allocable as of June 30, 1997 to the participants in this Plan who commenced participation effective July 1, 1997 were transferred to the Plan. The Plan is effective July 1, 1997. -1- 8 SECTION 1 DEFINITIONS 1.1 "Acquisition Loan" means a loan or other extension of credit used by the Trustee to finance the acquisition of Atlantic Richfield Company Common Stock. 1.2 "Administrator" means the Capital Accumulation Plan Administrative Committee. 1.3 "Annual Earnings" or "Earnings" means the annual, actual wages or salary paid to a Member for the Member's personal service, including the amount of any salary reduction pursuant to Section 125 and Section 401(k) of the Code, as amended, but excluding extra pay such as overtime, premiums, bonuses, living or other allowances. Annual Earnings or Earnings shall not exceed $160,000, as adjusted each plan year pursuant to Section 401(a)(17)(B) of the Code. 1.4 "Capital Accumulation Plan Administrative Committee" means the committee provided for in Section 9 of this Plan. 1.5 "Code" means the Internal Revenue Code of 1986, as amended. 1.6 "Company" means CH-Twenty, Inc. and such of its Subsidiaries or Affiliates whose Employees are included in this Plan upon authorization of the Board of Directors of CH-Twenty, Inc. and adoption of this Plan by the Board of Directors of such authorized Subsidiary or Affiliate. 1.7 "Credited Company Service" means service with the Company, a predecessor company, and/or a Subsidiary or Affiliate which service the Company recognizes, on a basis uniformly applicable to all persons similarly situated, for purposes of this Plan. -2- 9 1.8 "Effective Date" means the effective date of the Plan which is July 1, 1997. 1.9 "Elective Deferrals" or "Deferrals" means reductions pursuant to a Salary Reduction Agreement, in whole percentages from one percent through 17 percent, of a Member's Annual Earnings, which amounts are transferred by the Company to the Trustee of the Plan. 1.10 "Employee" means any person who is employed by the Company, excluding: (a) Casual Employees, Project Employees and Leased Employees, as defined under the Company's Employment Status Classification Policy; (b) Employees represented by any collective bargaining agent which has not negotiated the benefits of this Plan provided that retirement benefits were the subject of good faith negotiations between the Company and bargaining agent; and (c) Any division or group of employees which is expressly excluded from eligibility for this Plan by action of the Board of Directors of the Company. 1.11 "ERISA" means the Employee Retirement Income Security Act of 1974. 1.12 "Financed Shares" means shares of Atlantic Richfield Company Common Stock acquired by the Trustee with the proceeds of an Acquisition Loan. 1.13 "Highly Compensated Employee" means: (a) Any employee who performs service during the determination year and is described in one or more of the following groups: -3- 10 (i) An employee who is a five percent owner, as defined in Section 416(i)(1) of the Code, at any time during the determination year or the look-back year, as defined below; or (ii) An employee who receives compensation in excess of $80,000, as adjusted pursuant to Section 415(d) of the Code for Plan Years commencing after December 31, 1997, during the look-back year and, at the election of the Administrator, is a member of the top-paid group, as defined below, for the look-back year; (b) For purposes of the definition of Highly Compensated Employee the following will apply: (i) The determination year is the Plan Year for which the determination of who is highly compensated is being made; or if the Company makes the election pursuant to Treas. Reg. 1.414(q)-IT Q&A-14(b), the period by which the determination year extends beyond the calendar year referred to in Subparagraph 1.13(b)(ii). (ii) The look-back year is the 12-month period immediately preceding the determination year, or if the Company makes the election pursuant to Treas. Reg. 1.414(q)-IT Q&A-14(b), the calendar year ending with or within the determination year. (iii) The top-paid group consists of the top 20 percent of employees ranked on the basis of compensation received during the year. For purposes of determining the number of employees in the top paid group, employees who have not completed six months of service by the end of the Plan Year (including service in the immediately preceding Plan Year); who normally work less than 17-1/2 hours per -4- 11 week; who work less than six months during any year; who are nonresident aliens with no income from sources within the United States or who have not had their 21st birthday by the end of the Plan Year shall be included. (iv) Employers aggregated under Section 414(b), (c), (m), or (o) of the Code are treated as a single employer. (v) Compensation, for purposes of this Paragraph 1.13 means compensation within the meaning of Section 415(c)(3) of the Code without regard to Section 125, Section 402(e)(3) and Section 402(h)(1)(B) of the Code. (c) A former employee who has a separation year prior to the determination year and who was a highly compensated active employee for either (i) such employee's separation year, or (ii) any determination year ending on or after the employee's 55th birthday will be a Highly Compensated Employee. Generally, a separation year is the determination year the employee separates from service. (d) If elected by the Administrator, Subparagraph 1.13(a) shall be modified by substituting the simplified method pursuant to Section 4 of Rev. Proc. 93-42, in which case the Highly Compensated Employees shall be determined under Subparagraph 1.13(a) on the basis of the look-back year and determination year, or the determination year only, taking into account all employees employed during such year. 1.14 "Hour of Service" means: -5- 12 (a) Each hour for which an Employee is paid, or entitled to payment, for the performance of duties for the Company or any Subsidiary or Affiliate during the computation period in which the duties are performed. (b) Each hour for which an Employee is paid, or entitled to payment, by the Company or any Subsidiary or Affiliate on account of a period of time during which no duties are performed (irrespective of whether the employment relationship has terminated) due to vacation, holiday, illness, incapacity (including disability), layoff, jury duty, military duty or leave of absence. (c) Each hour for which back pay, irrespective of mitigation of damages, is either awarded or agreed to by the Company or any Subsidiary or Affiliate. Such hours shall be credited to the Employee for the computation period or periods to which the award or agreement pertains. (d) An Employee will be credited with 200 Hours of Service, to the extent required by Federal law, for each month during which the Employee is on active duty in the Armed Forces of the United States and for which the Employee is not paid or entitled to be paid by the Company or any Subsidiary or Affiliate. (e) Hours credited for any period under any provision of this Paragraph 1.14 may not also be credited for the same period under any other provisions of this Plan. Hours shall be credited under Subparagraphs 1.14(a) thru (c) pursuant to U. S. Department of Labor Regulations under 29CFR Section 2530.200b-2, which are incorporated herein by this reference. (f) For all purposes under the Plan, an Employee shall be credited with 200 Hours of Service for each calendar month in which the Employee would otherwise be credited with one or more Hours of Service. -6- 13 (g) Solely for purposes of determining whether a break in service has occurred in a computation period, and to the extent it does not duplicate Hours of Service credited under any other provision of this Paragraph 1.14, an individual who is absent from work for maternity or paternity reasons shall receive credit for the Hours of Service which would otherwise have been credited to such individual but for such absence, or in any case in which such hours cannot be determined, eight Hours of Service per day of such absence. For purposes of this subparagraph, an absence from work for maternity or paternity reasons means an absence (i) by reason of the pregnancy of the individual; (ii) by reason of a birth of a child of the individual; (iii) by reason of the placement of a child with the individual in connection with the adoption of the child by such individual; or (iv) for purposes of caring for such child for a period beginning immediately following such birth or placement. The Hours of Service credited under this subparagraph shall be credited within the computation period in which the absence begins if the crediting is necessary to prevent a break in service in that period, or in all other cases, in the following computation period. 1.15 "Medical Board" means the board of physicians provided for in Paragraph 9.8. 1.16 "Member" means an Employee who has qualified for membership in accordance with the requirements of this Plan. 1.17 "Member's Account" or "Account" means a separate account maintained by the Trustee for each Member consisting of (a) one subaccount to which is allocated the Member's Elective Deferrals and transfers pursuant to Section 14 of the Plan, as adjusted for earnings and withdrawals, and realized and unrealized gains and losses attributable thereto; and (b) a second subaccount to which is allocated the Company's contribution as adjusted for earnings and withdrawals, and realized and unrealized gains and losses attributable thereto. -7- 14 1.18 "Plan" or "Plans" means the CH-Twenty, Inc. Capital Accumulation Plan as set forth herein, and any amendments thereto. 1.19 "Plan Year" means the period commencing on July 1 of each calendar year and ending on June 30 of the immediately following calendar year. 1.20 "Predecessor Plan" means the Atlantic Richfield Capital Accumulation Plan II. 1.21 "Salary Reduction Agreement" means an agreement entered into between the Member and the Company, and by which the Member agrees to accept a reduction in Earnings from the Company equal to any whole (or fractions, as required by adjustments under Paragraph 3.3) percentage, per payroll period, not to exceed 17 percent. This agreement shall apply to each payroll period during the period it is in effect in which the Member receives Earnings. In consideration of such agreement, the Company will transfer to the Member's Elective Deferral subaccount the amount of the Elective Deferral at the time that regular salary payments are made to its Employees. 1.22 "Subsidiary" or "Affiliate" means: (a) All corporations which are members of a controlled group of corporations within the meaning of Section 1563(a) of the Code [determined without regard to Section 1563(a)(4) and Section 1563(e)(3)(C) of said Code] and of which CH-Twenty, Inc. is then a member. Subsidiary or Affiliate shall include Atlantic Richfield Company and its Subsidiaries or Affiliates; and (b) All trades or businesses, whether or not incorporated, which, under the regulations prescribed by the Secretary of the Treasury pursuant to Section 210(d) of ERISA or Section 414(c) of the Code, are then under common control with CH- -8- 15 Twenty, Inc., or with respect to the last sentence of Subparagraph 1.22(a), Atlantic Richfield Company. 1.23 "Trustee" means the persons or corporations, or both, designated by agreement of trust between them and CH-Twenty, Inc. to hold contributions from the Company, Deferrals of Members, transfers pursuant to Section 14 investments thereof and earnings thereon. The duties and responsibilities of the Trustee shall be those set forth in the trust agreement. -9- 16 SECTION 2 MEMBERSHIP - ELIGIBILITY 2.1 Membership (a) Elective Deferrals - An Employee who is paid on the United States dollar payroll of the Company may become a Member and make Elective Deferrals on the Employee's date of employment. To become a Member, an Employee must enter into a Salary Reduction Agreement in accordance with Section 3. (b) Company Contributions - An Employee who is paid on a United States dollar payroll of the Company shall be eligible for Company contributions on the earlier of (i) or (ii) below: (i) Completion of six months of Credited Company Service; or (ii) Completion of 1,000 Hours of Service during any 12-consecutive-month period commencing on the Employee's date of employment or any anniversary thereof. 2.2 Notice to Administrator The Company shall advise the Administrator as to the date an Employee becomes a Member. In the event that any question arises as to the eligibility of any Employee, the decision of the Administrator as to such Employee's eligibility shall be binding upon the Company, the Employees, the Members, the beneficiaries, and any and all other persons having or claiming any interest hereunder. -10- 17 2.3 Transferees If an Employee transfers to the Company from a Subsidiary or Affiliate and the Employee was making an Elective Deferral under a Capital Accumulation Plan as of the date of transfer, and was eligible for a Company contribution, the Employee shall be eligible for a Company contribution as soon as possible following the date of transfer. 2.4 Membership Termination (a) An Employee's membership shall terminate upon: (i) Death, disability, dismissal, retirement or termination of employment for any other reason; (ii) Continuation of a Participant's employment with an acquiring employer in conjunction with a sale to the acquiring employer of substantially all of the assets used by the Company or any Subsidiary or Affiliate in a trade or business which such entity conducts; or (iii) A disposition of the Company's interest in a Subsidiary or Affiliate when the Participant continues employment with such Subsidiary or Affiliate. (b) A Member may not voluntarily terminate membership in this Plan during active employment with the Company. (c) If a Member transfers to a Subsidiary or Affiliate which is not participating in this Plan, or to an employment classification excluded from Plan participation, the Member's Account shall not be distributed until the Member has terminated employment with the Company or all of its -11- 18 Subsidiaries or Affiliates or is involved in a sale described in Subparagraph 2.4(a)(ii) or (iii). -12- 19 SECTION 3 MEMBERS' ELECTIVE DEFERRALS 3.1 Members' Elections Each Member who is an Employee may enter into a Salary Reduction Agreement with the Company providing for withholding of Elective Deferrals from each of the Member's regular paychecks at a rate of one percent to 17 percent of the Member's Earnings, in whole percentages. A Salary Reduction Agreement shall remain in effect until changed by the Member. A Member's election shall be made in the manner prescribed by the Administrator. A Member may change the Member's election with respect to the Member's rate of future contributions at any time by giving notice in such manner as is prescribed by the Administrator. Such changes shall be effective as of the payroll period beginning after the date of receipt of such notice by the Administrator. The Company may limit or reduce its Salary Reduction Agreement with any Member at any time, on a nondiscriminatory basis, to the extent necessary to ensure compliance with the limitations of Paragraph 3.3 or 3.4. 3.2 Contribution of Elective Deferrals The Company shall pay to the Trustee on behalf of each Member the Deferrals elected by the Member. A Member's Elective Deferrals for a Plan Year shall be paid to the Trustee no later than 30 days after the last day of the Plan Year. Elective Deferrals may be paid to the Trustee in the following forms: (a) To the extent that a Member has directed pursuant to Paragraph 6.2 that his or her Elective Deferrals be invested in an option other than Atlantic Richfield Common Stock, such Elective Deferrals shall be paid to the Trustee in cash; -13- 20 (b) To the extent that a Member has directed pursuant to Section 6.2 that his or her Elective Deferrals be invested in Atlantic Richfield Company Common Stock under the Non-ESOP Part of the Plan, such Elective Deferrals may be paid to the Trustee in cash, in shares of Atlantic Richfield Company Common Stock, or in any combination thereof; and (c) To the extent that a Member has directed pursuant to Paragraph 6.2 that his or her Elective Deferrals be invested in Atlantic Richfield Company Common Stock under the ESOP Part of the Plan, such Elective Deferrals may be paid to the Trustee in cash, in shares of Atlantic Richfield Company Common Stock, in the form of forgiveness of indebtedness on an Acquisition Loan from the Company to the Plan, or in any combination thereof. 3.3 Annual Dollar Limitation (a) A Member's Elective Deferrals for a calendar year, when considered together with the amount of salary reduction elected by the Member under any other plan meeting the requirement of Section 401(k) of the Code, may not exceed $9,500, as adjusted pursuant to Code Section 415(d) for Plan years commencing after December 31, 1997. (b) Once a Member's Elective Deferrals reach the limitation described in Subparagraph 3.3(a), all subsequent deferrals will be suspended for the remainder of the calendar year. Elective Deferrals will automatically resume on the following January 1. Unless the Member elects to change the Elective Deferral percent according to Paragraph 3.1, Elective Deferrals will resume at the rate in effect on the suspension date. (c) If a Member notifies the Administrator on or before March 31 after the close of a calendar year that the Member's total Elective Deferrals (within the -14- 21 meaning of Section 402(g)(3) of the Code) for such calendar year exceed the limitation of Subparagraph 3.3(a), the Administrator shall direct that such excess Elective Deferrals, plus any income and minus any loss allocable thereto for the calendar year, be distributed no later than the April 15 following notification to the Administrator. A Member is deemed to notify the Administrator of Elective Deferrals in excess of the limitation in Subparagraph 3.3(a) that arise by taking into account those Elective Deferrals made to the Plan or to any other Plan of the Company or a Subsidiary or Affiliate. (d) For purposes of Subparagraph 3.3(c), gain or loss allocable to excess Elective Deferrals shall be computed under the method used by the Plan to allocate gains and losses. 3.4 Actual Deferral Percentage Tests The Plan shall comply with the requirements of Section 401(k)(3) of the Code and the regulations thereunder, including Treas. Reg. 1.401(k)-1(b), which provisions are incorporated herein by this reference. To the extent permitted by regulations, matching contributions described in Paragraph 4.1 and nonelective contributions described in Paragraph 4.7 may, at the discretion of the Administrator, be deemed Elective Deferrals for purposes of this Paragraph 3.4. 3.5 Return of Elective Deferrals to Members (a) If the Administrator determines pursuant to Paragraph 3.4, that a Member is not eligible to defer any or all amounts elected under Paragraph 3.1, the Administrator may elect, in its discretion, to pursue any of the following steps or any combination of them: (i) The Administrator may authorize a suspension or reduction of Elective Deferrals made under Paragraph 3.1 by authorizing a -15- 22 suspension or reduction of deferrals above a specific dollar amount or percent of compensation. (ii) The Administrator may reduce the Elective Deferrals of Highly Compensated Employees to the percent necessary to meet the requirements of Paragraph 3.4. The reduction will be accomplished by reducing the Elective Deferrals of Highly Compensated Employees in order of their Actual Deferral Percents, as defined in regulations, beginning with the Members having the highest percent until a requirement of Paragraph 3.4 is met. The total amounts reduced, together with gain or loss allocable thereto for the Plan Year, will be paid by the end of the following Plan Year to Highly Compensated Employees beginning with such employees having the highest dollar amount of Elective Deferrals. (b) Gain or loss, for purposes of Subparagraph 3.5(a) allocated to excess contributions shall be computed under the method used by the Plan to allocate gains and losses. (c) Amounts distributable under Subparagraph 3.5(a) will be reduced by excess deferrals previously distributed because the limit under Paragraph 3.3 was exceeded. (d) This Paragraph 3.5 will be applied after taking into account any reduction in, or repayment, of Elective Deferrals under Paragraphs 3.3 and 4.6. 3.6 Make-Up Elective Deferrals Notwithstanding any provision of the Plan to the contrary, Elective Deferrals with respect to qualified military service may be made in accordance with Section 414(u) of the Code. -16- 23 SECTION 4 COMPANY CONTRIBUTION 4.1 Company Contribution Subject to the provisions of Paragraphs 4.3 and 4.4, for each pay period, the Company shall pay to the Trustee a contribution on behalf of each Member equal to 160 percent of the Member's Elective Deferrals (including Make-Up Elective Deferrals under Paragraph 3.6) for the pay period which do not exceed five percent of the Member's Earnings for the pay period. This contribution shall be made no later than 30 days following the date on which the related Member Deferrals are made, and except for Members who have attained age 55, shall be made under the ESOP Part of the Plan. 4.2 Form of Contribution Company contributions made pursuant to Paragraph 4.1 may be made in the form of cash, shares of Atlantic Richfield Company Common Stock, forgiveness of indebtedness on an Acquisition Loan from the Company to the Plan, or any combination of the foregoing. 4.3 Members Excluded From Contribution The Company contribution described in Paragraph 4.1 shall not be made on behalf of a Member whose base salary is more than $150,000 on an annualized basis. 4.4 Actual Contribution Percentage Test The Plan shall comply with the requirements of Section 401(m)(2) and Section 401(m)(9) of the Code, and the regulations thereunder, including Treas. Reg. Section 1.401(m)-1(b) and Treas. Reg. Section 1.401(m)-2, which provisions are incorporated herein by this reference. To the extent permitted by regulations, Elective Deferrals described in Paragraph 3.1 and nonelective contributions described in Paragraph 4.7 may, at -17- 24 the discretion of the Administrator, be taken into account in satisfying this Paragraph 4.4. 4.5 Distribution of Excess Contributions (a) If the Administrator determines, in its discretion, that the allocation of Company contributions pursuant to Paragraph 4.1 to Members' Accounts for a Plan Year does not meet a requirement of Paragraph 4.4, the Administrator may reduce the allocation of such Company contributions to the Accounts of certain Members who are Highly Compensated Employees to the extent necessary to meet that requirement. The reduction will be accomplished by reducing allocations to the Accounts of Members who are Highly Compensated Employees in order of their Actual Contribution Percents, beginning with the Member having the highest percent until a requirement of Paragraph 4.4 is met. The total reduced amounts, adjusted by gain or loss allocable thereto for the Plan Year, will be returned by the end of the following Plan Year to Highly Compensated Employees beginning with such employees having the highest dollar amount of Elective Deferrals. (b) Gain or loss, for purposes of Subparagraph 4.5(a), allocated to excess aggregate contributions shall be computed under the method used by the Plan to allocate gains and losses. 4.6 Section 415 Limitations (a) In addition to other limitations set forth in the Plan and notwithstanding any other provisions of the Plan, "annual additions" made to this Plan (and all other defined contribution plans required to be aggregated with the Plan under the provisions of Section 415 of the Code) shall not exceed an amount in excess of the limit set forth in such section of the Code. For purposes of calculating such limit under Section 415 of the Code, the "limitation year" shall be -18- 25 the calendar year. Deferrals and Company Contributions, pursuant to Paragraph 4.1, in excess of the actual deferral and contribution percent tests of Sections 3.4 and 4.4 are considered annual additions even if corrected through distribution. (b) If the limitations described in Section 415(c) of the Code are exceeded for a Member for a limitation year, the excess will be eliminated as follows: (i) Provisions of any other defined contribution plans established by the Company or a Subsidiary or Affiliate which have caused the limits to be exceeded will be applied; provided, however, that if such other Plan is described in Section 401(k) of the Code, the provisions of the Plan in which the Member is active as of the last day of the limitation year shall be applied before the provisions of the Plan in which the Member is inactive. (ii) Amounts attributable to after tax contributions made by the Member to the Plan (or any other plan maintained by the Company or any Subsidiary or Affiliate) shall be paid to the Member. (iii) Amounts attributable to Elective Deferrals made by a Member to the Plan (or any other plan maintained by the Company or a Subsidiary or Affiliate) shall be paid to the Member. (iv) The excess, if any, will be held unallocated in a suspense account. The suspense account will be applied to reduce contributions for remaining Members in the limitation year, and each succeeding limitation year, if necessary. If a suspense account is in existence at any time during the limitation year pursuant to this subparagraph, it -19- 26 will not participate in the allocation of the investment gains and losses. (c) If the limitations described in Section 415(e) of the Code are exceeded for a Member for a limitation year, the excess will be eliminated by applying the provisions of the defined benefit plan in which the Member participates. 4.7 Nonelective Contributions (a) The Administrator, in its sole discretion, may make a nonelective contribution to the Accounts of certain Members who are not highly compensated to the extent necessary to satisfy the requirement of Paragraph 3.4 and/or 4.4 of the Plan, or to assist the Plan or any other plan of the Company or any Subsidiary or Affiliate to satisfy the requirements of Section 410(b) of the Code. (b) A contribution under this Paragraph 4.7 shall be allocated to eligible Member's in the ratio that the Earnings of each such Member for the Plan Year bears to the total Earnings of all such Member's for the Plan Year. (c) The Company shall make contributions necessary to reinstate Members' Accounts pursuant to Paragraph 9.9 of the Plan. 4.8 Exclusive Benefit The corpus or income of the trust may not be divested to or used for other than the exclusive benefit of the Members and their beneficiaries and to defray reasonable expenses of administering the Plan. -20- 27 SECTION 5 FINANCED SHARES 5.1 Acquisition Loans CH-Twenty, Inc., by action of its President, may direct the Trustee to incur Acquisition Loans from time to time to finance the acquisition of Atlantic Richfield Company Common Stock (Financed Shares) under the ESOP Part of the Plan or to repay a prior Acquisition Loan. For this purpose, an installment obligation incurred in connection with the purchase of Atlantic Richfield Company Common Stock shall be treated as an Acquisition Loan. An Acquisition Loan shall be for a specific term, shall bear a reasonable rate of interest, and shall not be payable on demand except in the event of default. An Acquisition Loan may be secured by a pledge of the Financed Shares so acquired (or acquired with the proceeds of a prior Acquisition Loan which is being refinanced). No other assets of the Plan may be pledged as collateral for an Acquisition Loan, and no lender shall have recourse against assets of the Plan other than Financed Shares remaining subject to pledge. If the lender is a "party in interest" [as defined in Section 3(14) of ERISA], the Acquisition Loan must provide that in the event of default, assets of the Plan may be transferred to the lender only upon, and to the extent of, the failure of the Plan to meet the payment schedule of the Acquisition Loan. Any pledge of Financed Shares must provide for the release of the shares so pledged as payments on the Acquisition Loan are made by the Trustee and such Financed Shares are allocated to Members' Accounts under Paragraph 5.2. Payments of principal and/or interest on any Acquisition Loan shall be made by the Trustee, as directed by the Company, only from: (a) Company contributions paid in cash to enable the Plan to make payments on such Acquisition Loan [including Elective Deferrals contributed under Paragraph 3.2, to the extent that Members -21- 28 have directed pursuant to Paragraph 6.2 that such Elective Deferrals be invested in shares of Atlantic Richfield Company Common Stock under the ESOP Part of the Plan] and earnings attributable thereto; (b) the proceeds of any Acquisition Loan and the earnings attributable thereto; and (c) any cash dividends received by the Plan on the Financed Shares purchased with the proceeds of such Acquisition Loan. The payments made with respect to an Acquisition Loan for a Plan Year must not exceed the sum of such Company contributions, proceeds, earnings, and dividends for that Plan Year and prior Plan Years, as reduced by the amount applied to make such payments in prior Plan Years. As directed by CH-Twenty, Inc., the Trustee also may sell any Financed Shares that have not yet been allocated to Members' Accounts and use the proceeds from such sale to pay principal and/or interest on the Acquisition Loan used to acquire such shares. 5.2 Payments on Acquisition Loan The acquisition of Atlantic Richfield Company Common Stock with the proceeds of an Acquisition Loan may be made on the open-market, or from Atlantic Richfield Company, in a single purchase or a series of purchases over a period of time. Prior to use for such purchase or purchases, the Acquisition Loan proceeds may be invested by the Trustee (as directed by CH-Twenty, Inc.) in interest-bearing accounts or instruments. Interest derived therefrom shall be applied to make payments on the Acquisition Loan, or, if the Acquisition Loan has been repaid in full, shall be allocated as of the last day of the Plan Year among the Accounts of all Members who have not terminated membership pursuant to Paragraph 2.4 as of such date in proportion to their Earnings for the Plan Year. All Financed Shares acquired by the Plan shall initially be credited to a loan suspense account, and will be allocated to the Members' Accounts only as payments on the Acquisition Loan are made. Release from the loan suspense account for allocation to Members' Accounts in each Plan Year shall be based on -22- 29 shares of stock or other non-monetary units, rather than by dollar amount, and shall not be less than the number calculated as follows: (a) The number of Financed Shares held in the loan suspense account immediately before the release in the current Plan Year shall be multiplied by a fraction, the numerator of which is the amount of principal and interest paid on the Acquisition Loan for that Plan Year, and the denominator of which is the sum of the numerator plus the total payments of principal and interest on that Acquisition Loan projected to be paid for all future Plan Years. For this purpose, the interest to be paid in future Plan Years is computed by using the interest rate in effect as of the last day of the current Plan Year. (b) In lieu of the method described in Subparagraph 5.2(a), the Company may elect (as to each Acquisition Loan) or the provisions of the Acquisition Loan may provide for the release of Financed Shares from the loan suspense account based solely on the ratio that the payments of principal for each Plan Year bear to the total principal amount of the Acquisition Loan. This method may be used only if: (i) the Acquisition Loan provides for annual payments of principal and interest at a cumulative rate that is not less rapid at any time than level annual payments of such amounts for ten years; (ii) interest included in any payment on the Acquisition Loan is disregarded only to the extent that it would be determined to be interest under standard loan amortization tables; and (iii) the entire duration of the Acquisition Loan repayment period does not exceed ten years, even in the event of a renewal, extension, or refinancing of the Acquisition Loan. As of each date that payments (other than payments with the proceeds of a new Acquisition Loan) are made on an Acquisition Loan, the Financed Shares released from the loan suspense account shall be allocated to Members' Accounts in -23- 30 proportion to the amounts debited from each Member's Account to make the Acquisition Loan payments. -24- 31 SECTION 6 INVESTMENT OF MEMBERS' ACCOUNTS 6.1 Members' Accounts The Administrator shall establish and maintain an Account in the name of each Member. Separate records shall be maintained with respect to the portion of a Member's Account attributable to Elective Deferrals under Section 3 and transferred amounts under Section 14, and earnings thereon, and the portion of a Member's Account attributable to Company contributions under Section 4 and earnings thereon. 6.2 Investment of Elective Deferrals, Transferred Amounts and Certain Company Contributions Upon receipt of a Member's Elective Deferrals, transferred amounts under Section 14 and Company contributions pursuant to Subparagraph 6.3(b), the Trustee shall invest such amounts among the following investment alternatives, in the proportion indicated by the Member in his or her investment directions provided to the Administrator: (a) In Atlantic Richfield Company Common Stock held under the ESOP Part of the Plan; (b) In Atlantic Richfield Company Common Stock held under the non-ESOP Part of the Plan; (c) In the Money Market Fund, consisting of specified types of fixed income investments such as deposits in interest-bearing bank accounts, certificates of deposit, corporate or governmental obligations maturing in not more than five years, financial futures contracts, deposits under a deposit administration or similar contract issued by an insurance company or in a -25- 32 commingled or common investment account or fund established and maintained by an investment advisor or a bank (which bank may be the Trustee) and the assets of which are invested primarily in debt obligations, or in any combination thereof as CH-Twenty, Inc. or a delegate thereof may determine; (d) In the Equity Fund, consisting of specified equity investments such as common or capital stock of issuers (other than the Company, Subsidiaries or Affiliates, or Lyondell Petrochemical Company or any of its Subsidiaries or Affiliates), bonds, debentures or preferred stocks convertible into common or capital stock of such issuers, financial futures contracts, interests in any commingled or common equity fund established and maintained by an investment advisor or a bank (which bank may be the Trustee), interests in any mutual fund or other similar types of equity investments and cash equivalent short-term investments maturing in less than one year, or in any combination thereof as CH-Twenty, Inc. or a delegate thereof may determine; (e) In the Bond Fund, consisting of specified types of fixed income investments, such as public obligations of the United States or foreign governments or their agencies, securitized financing or corporate bonds of issuers (other than the Company, Subsidiaries or Affiliates, or Lyondell Petrochemical Company or any of its Subsidiaries or Affiliates), debentures, financial futures contracts, interests in any commingled or common fixed income fund established and maintained by an investment advisor or bank (which bank may be the Trustee), interests in any mutual fund or other similar types of fixed income investments and cash equivalent short-term investments, or in any combination thereof as CH-Twenty, Inc. or a delegate thereof may determine; -26- 33 (f) In the International Equity Fund consisting of specified investments in global issuers such as common or capital stock (other than common or capital stock of the Company, Subsidiaries or Affiliates, or Lyondell Petrochemical Company or any of its Subsidiaries or Affiliates), preferred stocks, securities convertible into common or capital stock of such issuers, financial futures contracts, currency futures or options, forward currency contracts, interests in any commingled or common equity fund established and maintained by an investment advisor or a bank (which bank may be the Trustee), interests in any mutual fund or other similar types of equity investments and cash equivalent investments, or similar investments or in any combination thereof as CH-Twenty, Inc. or a delegate thereof may determine; or (g) In the Balanced Fund consisting of units of the Equity Fund, the International Equity Fund and the Bond Fund. The weighing of the Balanced Fund shall be approximately 45 percent Equity Fund, 15 percent International Equity Fund and 40 percent Bond Fund. A Member's directions as to the initial investment of his or her Elective Deferrals and/or Company contributions shall be provided in such manner as is prescribed by the Administrator. Such directions shall remain in effect until new directions are provided to the Administrator by the Member. A Member may change the direction as to the initial investment of his or her Elective Deferrals and/or Company contributions at any time by providing notice in such manner as may be prescribed by the Administrator. Any change of investment directions shall be effective with respect to Elective Deferrals and/or Company contributions paid to the Trustee for pay periods beginning after the notice is received by the Administrator. 6.3 Investment of Company Contributions (a) Except as provided in Subparagraph 6.3(b), all contributions by the Company pursuant to Paragraph 4.1, and any amounts of interest -27- 34 attributable to the proceeds of an Acquisition Loan allocated to Members' Accounts pursuant to Paragraph 5.2 after the Acquisition Loan has been repaid in full, shall at all times be invested in Atlantic Richfield Company Common Stock under the ESOP Part of the Plan. Contributions under Paragraph 4.1 made in cash shall be applied to purchase shares of Atlantic Richfield Company Common Stock or to make payments on an Acquisition Loan within a reasonable time after being paid to the Trustee or after being allocated to Members' Accounts. (b) A Member who has attained age 55 may invest Company contributions in any of the investment options set forth in Paragraph 6.2. 6.4 Funds Invested in the Money Market Fund (a) There shall be invested in the Money Market Fund: (i) Amounts which a Member elects to have so invested under Subparagraph 6.2(c); and (ii) On an interim basis, amounts being accumulated in a Member's Account for investment under Subparagraphs 6.2(a), (b), (d), (e), (f) and (g). (b) Subject to the requirement of Subparagraph 6.5(c), a Member may direct, once during each 15-calendar-day period, that funds invested in the Money Market Fund under Subparagraph 6.2(c) be invested in any of the other permitted alternatives; provided, that (i) only one direction whether made solely under this subparagraph, or in combination with a direction under Paragraph 6.5, may be made during a 15-calendar-day period; and (ii) a direction under this subparagraph may not be made earlier than seven days following (A) the date of receipt by the Administrator of a Member's -28- 35 application to make a withdrawal under Section 7, (B) the date a loan application is made under Section 13, or (C) the date a loan repayment is made under Subparagraph 13.8(c)(i). (c) Interest shall be allocated on a monthly basis to funds held for a Member in the Money Market Fund as of the last day of a calendar month. However, such allocation shall not be made with respect to funds resulting from a conversion to cash of Atlantic Richfield Company Common Stock, Equity Fund, Bond Fund, International Equity Fund or Balanced Fund units which occurred in the calendar month in which allocation of interest is made. 6.5 Sale and Reinvestment of Common Stock, Equity Fund Units, Bond Fund Units, International Equity Fund Units or Balanced Fund Units (a) A Member may direct that shares of Atlantic Richfield Company Common Stock, other than shares purchased with Company contributions made after July 1, 1988, units of the Equity Fund, Bond Fund, International Equity Fund and/or Balanced Fund held in the Member's Account be converted to cash and the proceeds thereof, less any applicable expenses of sale, be invested in a different option described in Paragraph 6.2; provided, that (i) only one direction, whether made solely under this subparagraph, or in combination with a direction under Paragraph 6.4, may be made during a 15-calendar-day period; (ii) a direction under this subparagraph may not be made earlier than seven calendar days following (A) the date of receipt by the Administrator of a Member's application to make a withdrawal under Section 7, (B) the date a loan application is made under Section 13, or (C) the date a loan repayment is made under Subparagraph 13.8(c)(i); and (iii) a Member who has attained age 55 as of the date of the direction to convert may, subject to the restrictions described in this paragraph, direct that shares of Common Stock (including Common Stock of a Subsidiary or Affiliate or Lyondell Petrochemical Company attributable to contributions of -29- 36 such companies) held in the Member's Account which are attributable to Company contributions be sold and the proceeds reinvested in one or more of the other options described in Paragraph 6.2. (b) The conversion of shares of Atlantic Richfield Company Common Stock to shares of such stock held in the ESOP Part of the Plan described in Subparagraph 6.2(a), and the conversion of shares of Atlantic Richfield Company Common Stock held in the ESOP Part of the Plan to the shares held under Subparagraph 6.2(b) of the Plan, shall be accomplished by a recharacterization of the shares, pursuant to procedures established by the Administrator; provided, that only one direction, whether made solely under this subparagraph or in combination with a direction under Paragraph 6.4, may be made during a 15-calendar-day period. (c) Proceeds of the conversion of shares of Atlantic Richfield Company Common Stock to cash may not be reinvested in Atlantic Richfield Company Common Stock until 15 calendar days after the date of such conversion. Proceeds of the conversion of units of the Equity Fund, Bond Fund, International Equity Fund or Balanced Fund to cash may not be reinvested in the Equity Fund, Bond Fund, International Equity Fund or Balanced Fund, as the case may be, until 15 calendar days after the date of such conversion. 6.6 Directives All elections and directions by Members concerning the investment of their Accounts shall be made in the manner prescribed by the Administrator, shall be irrevocable and shall become effective upon receipt by the Administrator. -30- 37 6.7 Purchases and Sales of Atlantic Richfield Company Common Stock Purchases and sales of Common Stock of Atlantic Richfield Company shall be handled in accordance with the following rules and such additional procedures, consistent with such rules, which the Administrator may establish from time to time: (a) Purchases and sales of Common Stock of Atlantic Richfield Company pursuant to a Member's directive under Paragraph 6.4 or 6.5, or to accommodate a distribution or withdrawal pursuant to Section 7 or 8, shall be made in the open-market as follows: (i) Each Wednesday and Friday the Administrator shall execute an open-market transaction, at a time determined at the discretion of the Administrator, covering all participant directives received by the Administrator by such time as determined by the Administrator, and communicated to Members, on the preceding Company business day, except that if a Wednesday or Friday is a Company holiday or a day on which trading on the New York Stock Exchange is closed, the transaction will occur on the next day (a Wednesday or Friday) on which the Plan executes a transaction in the open- market. (ii) If an unforeseeable administrative difficulty prevents the execution of the open-market transaction otherwise scheduled for a Wednesday or Friday, such transaction will be executed on the first business day thereafter which does not fall within one of the two exceptions in Subparagraph 6.7(a)(i). (iii) The Administrator may, in its discretion, match the purchase and sale orders scheduled for an open-market transaction and transact the net purchase or sale, whichever the case may be. The -31- 38 Administrator may also agree with the Administrator of one or more other individual account plans (as described in Section 3(34) of ERISA, and which is maintained by the Company or its Subsidiaries or Affiliates, and provides for the same purchases and sales pursuant to participant directives described in Paragraphs 6.4 and 6.5) to combine and match orders from all of the plans and execute a "net" transaction, as described above. The price per share allocated to each purchase or sale order shall be the price transacted for the "net" shares on the open-market transaction date otherwise scheduled for the orders under Subparagraph 6.7(a)(i). The price transacted for a "net" transaction shall be the price obtained on the open-market in the case of a single transaction, and the weighted average of the prices obtained on the open-market in the case of multiple transactions. (iv) Brokerage commissions, transfer fees and other expenses actually incurred in any such sale or purchase shall be equitably allocated and added to the cost or subtracted from the proceeds of all purchases or sales, as the case may be, effected on a pricing day, whether pursuant to the netting process described in Subparagraph 6.7(a)(iii), or pursuant to actual separate transactions per Member order. (b) Purchases of Common Stock of Atlantic Richfield Company with Member's Elective Deferrals or Company contributions under Section s 3 and 4: (i) Purchases shall normally be made either in the open-market or from Atlantic Richfield Company, at prices to the Plan not in excess of the fair market value of such Atlantic Richfield Company Common Stock on the date of purchase thereof, as determined by the Trustee. -32- 39 (ii) Allocations to Members' Accounts will be made in full and fractional shares. (iii) The Trustee may limit the daily volume of purchases to the extent it believes such action to be in the best interests of the Members. When Atlantic Richfield Company Common Stock is purchased, the cost charged to the Accounts of Members affected by such purchase shall be determined on an equitable basis in accordance with rules to be adopted by the Administrator and incorporating the following principles: (A) The cost charged to each affected Member's Account shall be based on the average cost per share of all Atlantic Richfield Company Common Stock purchased during whatever period may be established by the Administrator. (B) Brokerage commissions, transfer fees and other expenses actually incurred in any such purchase shall be added to the cost of any such purchase. (c) A Member may direct the Administrator to use any available cash or funds held for the Member under Subparagraph 6.2(c) to exercise any options, rights or warrants issued with respect to Atlantic Richfield Company Common Stock in the Member's Account. In the absence of such direction, or if there are no available funds, any such option, right or warrant having a market value shall be sold for the Member's Account. 6.8 Voting of Atlantic Richfield Company Common Stock (a) The Trustee shall vote whole shares of Atlantic Richfield Company Common Stock credited to each Member's Account in accordance with -33- 40 such Members' written instructions. Fractional shares of Atlantic Richfield Company Common Stock shall be aggregated into whole shares of stock and voted by the Trustee, to the nearest whole vote, in the same proportion as shares are to be voted by the Trustee pursuant to Members' written instructions. In the absence of voting instructions by one or more Members, the Trustee shall vote uninstructed shares, to the nearest whole vote, in the same proportion as shares are to be voted by the Trustee pursuant to Members' written instructions. The Trustee shall vote unallocated shares, to the nearest whole vote, in the same proportion as allocated shares are to be voted by the Trustee pursuant to Members' written instructions. (b) The Trustee shall exercise rights other than voting rights attributable to whole shares of Atlantic Richfield Company Common Stock credited to each Member's Account in accordance with such Members' written instructions. Rights attributable to fractional shares of Atlantic Richfield Company Common Stock (which for this purpose shall be aggregated into whole shares of stock) shall be exercised by the Trustee in the same proportion as rights which are exercised by the Trustee pursuant to Members' written instructions. In the absence of instructions by one or more Members, the Trustee shall exercise uninstructed rights in the same proportion as rights which are to be exercised by the Trustee pursuant to Members' written instructions. The Trustee shall exercise rights attributable to unallocated shares in the same proportion as rights attributable to allocated shares which are to be exercised by the Trustee pursuant to Members' written instructions. (c) The Trustee shall notify the Members of each occasion for the exercise of voting rights and rights other than voting rights within a reasonable time before such rights are to be exercised. This notification shall include all the -34- 41 information that Atlantic Richfield Company distributes to shareholders regarding the exercise of such rights. 6.9 Title of Investments All investments will be held in the name of the Trustee or its nominees. 6.10 Allocation of Trust Earnings and Valuation of Trust Investments (a) Any cash dividends declared on Atlantic Richfield Company Common Stock held in a Member's Account under the ESOP Part of the Plan as of the record date for the dividend shall be paid in cash to the Member (or, in the event of death, to the Member's beneficiary) on, or as soon as possible following, the payment date for the dividend. (b) Any cash dividends declared on Atlantic Richfield Company Common Stock held in a loan suspense account as of the record date for the dividend shall be used to make payments on the Acquisition Loan used to acquire the shares of stock held in such account. (c) Except as provided in Subparagraphs 6.10(a) and (b), all dividends or other distributions attributable to shares of Atlantic Richfield Company Common Stock shall be allocated to the Account of the Member whose Account is credited with such shares. (d) On the last day of each month, all income attributable to the Money Market Fund shall be allocated to the Member's Account in the ratio that each Member's Money Market Fund Account balance bears to such account balance of all such Members. For the purpose of determining such allocation, the Money Market Fund shall be valued at fair market value. -35- 42 6.11 Purchase and Redemption of the Equity Fund, Bond Fund, International Equity Fund and Balanced Fund Units Purchase and redemption of the Equity Fund, Bond Fund, International Equity Fund and Balanced Fund units shall be handled in accordance with the following rules and such additional procedures, consistent with such rules, as the Administrator may establish from time to time: (a) Units of the Equity Fund, Bond Fund, International Equity Fund and Balanced Fund shall be purchased or redeemed, pursuant to Member directions under Paragraph 6.5, on each Wednesday and Friday, covering all Member directives received by the Administrator by such time as determined by the Administrator, and communicated to Members, on the preceding Company business day, except that if a Wednesday or Friday is a Company holiday or a day on which trading on the New York Stock Exchange is closed, the purchase or redemption will be executed on the next day (a Wednesday or Friday) on which the Plan executes a transaction under this Subparagraph 6.11(a). (b) If an unforeseeable administrative difficulty prevents the execution of a transaction under Subparagraph 6.11(a), otherwise scheduled on a Wednesday or Friday, such transaction will be executed on the first business day thereafter which does not fall within one of the two exceptions in Subparagraph 6.11(a). (c) The Administrator may, in its discretion, combine the purchase and redemption orders scheduled for a Wednesday or Friday and transact the net purchase or sale orders, whichever the case may be. The Administrator may also agree with the Administrator of one or more individual account plans [as described in Section 3(34) of ERISA, and which is maintained by the Company or its Subsidiaries or Affiliates, and provides for the same -36- 43 purchase and redemption procedure described in Subparagraph 6.11(a)], to combine orders from all of the plans and execute a "net" transaction. (d) When units of the Equity Fund, Bond Fund, International Equity Fund and Balanced Fund are purchased or redeemed, the cost or net proceeds charged or credited to the Accounts of Members affected by such purchase or redemption shall be determined on an equitable basis in accordance with rules to be adopted by the Administrator, which are consistent with the rules described in this section, and incorporate the following principles: (i) The net proceeds of any such redemption of fund units in a Member's Account shall be credited to such Member's Account. (ii) The cost of any such purchase of fund units for a Member's Account shall be charged to such Member's Account. (iii) The net proceeds and cost of fund units shall be based on the net asset value of such units determined on the valuation date next following the date the purchase or redemption order is received by the Administrator. The valuation date shall be determined by the Administrator and shall occur on at least a weekly basis. The net asset value of fund units will be calculated by dividing the difference between the value of the fund assets and fund liabilities by the number of units outstanding with respect to each fund. (iv) Brokerage commissions, transfer fees and other expenses actually incurred in any such purchase or redemption shall be added to the cost or subtracted from the gross proceeds, of any such purchase or redemption, respectively. -37- 44 (e) Income earned by the Equity Fund, Bond Fund and International Equity Fund shall automatically be reinvested in the Equity Fund, Bond Fund and International Equity Fund, as the case may be. Income, gains and losses shall be reflected in the net asset value of the units of the Equity Fund, Bond Fund and International Equity Fund. 6.12 Voting of the Money Market Fund, Equity Fund, Bond Fund and International Equity Fund Investments The Trustee, in accordance with the Trust Agreement, shall exercise all voting and other rights associated with any investments held in the Money Market Fund, Equity Fund, Bond Fund and International Equity Fund. 6.13 Investment Advisory Fees The investment advisory fees, if any, incurred for management of the Money Market Fund, Equity Fund, Bond Fund, International Equity Fund and Balanced Fund are charged to each respective fund. 6.14 Member Protection No shares of Atlantic Richfield Company Common Stock held by the ESOP Part of the Plan may be subject to a put, call or other option, or buy/sell or similar arrangement. The provisions of this Paragraph 6.14 shall continue to be applicable to the shares of Atlantic Richfield Company Common Stock held by the ESOP Part of the Plan even if such part ceases to be an Employee Stock Ownership Plan under Section 4945(e)(7) of the Code. 6.15 Confidentiality The Capital Accumulation Plan Administrative Committee shall be responsible for ensuring the adequacy of procedures established by the Administrator to safeguard the confidentiality of information relating to the purchasing, holding and -38- 45 selling of Atlantic Richfield Company Common Stock and any voting, tender or similar rights relating to such stock. -39- 46 SECTION 7 WITHDRAWALS DURING EMPLOYMENT DUE TO FINANCIAL HARDSHIP 7.1 Application for Withdrawal A member, other than a member awaiting a deferred distribution, may at any time request the Member's Elective Deferrals (but not the earnings thereon) be paid to the Member due to financial hardship, provided that no more than one hardship withdrawal may be granted during each six-month period. The request must be made to the Administrator at such time and in such manner prescribed by the Administrator and shall include such documentation and/or written explanation requested by the Administrator. 7.2 Basis for Withdrawal The Administrator shall authorize a withdrawal on account of financial hardship only upon making a written determination that the withdrawal does not exceed the amount of the immediate and heavy financial need of the Member and that the withdrawal is based on the need for funds under one or more of the five following circumstances: (a) The payment of unreimbursable medical expenses described in Section 213(d) of the Code previously incurred by the Employee, the Employee's spouse, or any dependents of the Employee (as defined in Section 152 of the Code) or necessary for these persons to obtain medical care; (b) The payment of all or a portion of the purchase price (excluding mortgage payments) of a principal residence of the Member; (c) The payment of tuition and related educational expenses for the next 12 months of post-secondary education for the Member, his or her spouse, children or dependents, as defined in Code Section 152; -40- 47 (d) The need to prevent the eviction of the Member from his or her principal residence or foreclosure on the mortgage of the Member's principal residence; and (e) The need to satisfy a judgment of a federal, state or local court against the Member (such withdrawal will be permitted only if a written determination is made that such withdrawal is necessary in light of immediate and heavy financial need of the Member). 7.3 Payment of Withdrawal (a) A hardship withdrawal shall be paid in a single payment to the Member within 60 days following the Administrator's favorable determination. (b) A hardship withdrawal shall not cause a termination of Membership in the Plan. (c) To the extent permitted by the Code or regulations thereunder, a Member may elect, at a time and in the manner prescribed by the Administrator, to have all or a portion of a hardship withdrawal made payable to an eligible retirement plan. An eligible retirement plan is an individual retirement account or annuity described in Section 408(a) or (b) of the Code, an annuity plan described in Section 403(a) of the Code or a qualified trust described in Section 401(a) of the Code that accepts the deposit of such withdrawal. 7.4 Condition to Receipt of Withdrawal As a condition to receiving the withdrawal: (a) The Member must have obtained all distributions and all nontaxable loans available as of the date of the withdrawal under this Plan and any other employee benefit plan maintained by the Company and any Subsidiary or Affiliate; -41- 48 (b) The Member's contributions to any other defined contribution or defined benefit employee pension benefit plan maintained by the Company and any Subsidiary or Affiliate are to be suspended for a period of 12 months after the Member's receipt of the hardship distribution; and (c) The Member may not make Elective Deferrals during the remainder of the Member's taxable year or the taxable year immediately following the taxable year in which the hardship distribution is made. -42- 49 SECTION 8 PAYMENTS ON TERMINATION OF COMPANY EMPLOYMENT, DIVORCE OR OTHER REASONS 8.1 Termination of Employment (a) If a Member's membership in the Plan is terminated due to disability, termination of employment for any other reason except death, or as the result of a sale described in Subparagraphs 2.4(a)(ii) or (iii), the Member shall receive all items in the Member's Account. Each Member shall be fully vested at all times in all items in the Member's Account, whether the same be derived from Elective Deferrals, transferred amounts, or Company contributions, or earnings thereon. (b) Upon the election of the Member who has terminated employment, all items in a Member's Account shall be distributed to the Member. With respect to a Member who does not request a distribution and whose Account balance exceeds $3,500: (i) Notwithstanding anything to the contrary in this Paragraph 8.1 and subject to the provisions of Paragraph 8.7, a Member's Account shall be distributed no later than age 65, or, if later, 12 months following termination of membership under Subparagraph 8.1(a); (ii) In the case of the Member's death prior to final distribution, the Member's Account shall be distributed in accordance with Paragraph 8.2 of the Plan; and (iii) No loans or hardship withdrawals may be taken following termination of employment or disability. -43- 50 (c) Notwithstanding anything to the contrary in this Paragraph 8.1, all items in the Account of a Member who has terminated employment, and whose Account balance is $3,500 or less, shall be distributed 12 months following the Member's termination of membership, unless the Member elects an earlier distribution date. (d) Notwithstanding anything in the Plan to the contrary, when a Member elects to receive all items in the Member's Account and, in conjunction therewith, directs that items in his or her Account be converted pursuant to Paragraph 6.4 or 6.5, the conversion shall be transacted on the first transaction date under the Plan following the Administrator's receipt of a request for distribution. 8.2 Death (a) If a Member dies, or a former Member dies while awaiting receipt of a distribution pursuant to Paragraph 8.1, and it is established to the Plan's satisfaction that the consent required under Subparagraph 8.2(c), either has been obtained or was not obtainable, all items in the Member's or former Member's Account shall be paid to the beneficiary or beneficiaries most recently designated by the Member or former Member in such manner as prescribed by the Administrator. Such payment shall be made no later than 90 days following the close of the Plan Year in which the Plan receives certification of the Member's death. If no such designation shall have been made, or if all designated beneficiaries should die before the Member or former Member, payment shall be made to the Member's or former Member's estate. (b) Except as provided in Subparagraph 8.2(c), if a Member or former Member is survived by a spouse, all items in the Member's or former Member's Account shall be paid to the Member's spouse. -44- 51 (c) If a Member or former Member is survived by a spouse, all items in a Member's or former Member's Account shall be paid to the beneficiary or beneficiaries most recently designated by the Member or former Member in such manner as prescribed by the Administrator; provided, (i) the surviving spouse of the Member or former Member has irrevocably consented in writing to the designation of the specific beneficiary or beneficiaries, which designation may not be changed without spousal consent (or the spouse expressly permits designations by the Member or former Member without any further spousal consent), such consent acknowledged the effect of the election and such consent was witnessed by a notary public, or (ii) it is established to the Plan's satisfaction that the consent required by Subparagraph 8.2(c)(i), could not be obtained because the surviving spouse could not be located or because of such other circumstances as the Secretary of Treasury may by regulation prescribe. Any consent necessary under this paragraph shall be effective only with respect to such spouse, or, in the event it is established that the consent may not be obtained, such designated spouse. A revocation of a prior designation may be made by a Member without the consent of the spouse at any time prior to the Member's death. A consent that permits designation by the Member or former Member without any requirement for further consent by the spouse must acknowledge that the spouse has the right to limit consent to a specific beneficiary and that the spouse voluntarily elects to relinquish such right. 8.3 Disability Disability means a medically determinable physical or mental impairment resulting from illness or injury as a result of which the Member is unable to perform one or more of the substantial duties of the Member's normal work assignment with the Company or of any work assignment which the Company determines is available -45- 52 to the Member and for which the Member is reasonably qualified by education, training or experience to perform as determined by the Administrator after review by the Medical Board or such other entity as designated by the Administrator. 8.4 Divorce To the extent specified in a Qualified Domestic Relations Order, as defined in Section 414(p) of the Code, distributions from a Member's Account may be made to an Alternate Payee, as defined in Section 414(p) of the Code, prior to the Member's termination of membership under Subparagraph 8.1(a). Distributions under this paragraph shall be made at the time set forth in the Qualified Domestic Relations Order, or, if such order provides, at the time elected by the Alternate Payee. 8.5 Rollover (a) Notwithstanding anything in this Section 8 to the contrary, a distributee, as defined below, may elect, at a time and in the manner prescribed by the Administrator, to have all or a portion of a distribution under this Section 8, other than any amount required to be distributed pursuant to Section 401(a)(9) of the Code, made payable to an eligible retirement plan. (b) For purposes of this Section 8, other than Paragraph 8.2, an eligible retirement plan is an individual retirement account or annuity described in Section 408(a) or (b) of the Code, an annuity plan described in Section 403(a) of the Code or a qualified trust described in Section 401(a) of the Code that accepts such distribution. For purposes of a distribution under Paragraph 8.2, an eligible retirement plan is an individual retirement account or annuity. (c) Distributee means an Employee or former Employee, the surviving spouse of such Employee or such Employee's spouse or former spouse who is an alternate payee as defined in Section 414(p) of the Code. -46- 53 8.6 Notice With respect to a Member whose account exceeds $3,500, the Administrator shall provide the notice required by Section 1.411(a)-11(c) of Income Tax Regulations no less than 30 days and no more than 90 days before the Member's date of distribution; provided, however, that such distribution may commence less than 30 days after the required notice is given if: (a) The Member is informed of the Members' right to a period of at least 30 days after receiving the notice to consider distribution options; and (b) The Member, after receiving the notice, affirmatively elects a distribution. 8.7 Distributions Notwithstanding anything in the Plan to the contrary, a Member's Account shall be distributed in a lump sum, no later than the first day of April following the calendar year in which the Member attains age 70-1/2. Any amounts subsequently allocated to a Member's Account shall be distributed during the calendar year immediately following the year of allocation. 8.8 Distribution of Benefits The distribution of benefits under this Plan to a Member who has elected to receive such benefits shall be made not later than the 60th day after the latest of the close of the plan year in which (a) the Member attains age 65 or such earlier normal retirement age as may be specified in this Plan; (b) there occurs the tenth anniversary of the year in which the Member commenced membership in this Plan; or (c) the Member's service with the Company is terminated. -47- 54 SECTION 9 ADMINISTRATION CAPITAL ACCUMULATION PLAN ADMINISTRATIVE COMMITTEE 9.1 Capital Accumulation Plan Administrative Committee The Plan shall be administered by a Capital Accumulation Plan Administrative Committee. The Committee shall consist of the Senior Vice President, Human Resources of Atlantic Richfield Company, who shall serve as Chairperson, and not less than two other persons appointed by the Chairperson. Members of the Committee shall serve without compensation. Vacancies shall be filled by the Chairperson or the Chairperson's delegate. 9.2 Rules of Conduct The Capital Accumulation Plan Administrative Committee shall adopt such rules for the conduct of its business and administration of this Plan as it considers desirable; provided, they do not conflict with this Plan. 9.3 Legal, Accounting, Clerical The Capital Accumulation Plan Administrative Committee may authorize one or more of its members or any agent to act on its behalf and may contract for legal, accounting, clerical and other services to carry out this Plan. Unless paid by the Company, all expenses of the Company, the Administrator and the Plan shall be paid by the Plan, to the extent they constitute reasonable expenses of administering the Plan. The Plan may reimburse expenses paid directly by the Company or its designee. This provision shall be deemed a part of any contract to provide for expenses of Plan administration, whether or not the signatory to such contract is, as a matter of convenience, the Company or its designee. 9.4 Interpretation of Provisions The Capital Accumulation Plan Administrative Committee shall have full discretion and final authority to determine eligibility for benefits and to interpret the provisions -48- 55 of this Plan, to decide questions arising in its administration, and to establish such other rules for its administration as may be desirable. 9.5 Records of Administration The Capital Accumulation Plan Administrative Committee shall keep records reflecting the administration of this Plan which shall be subject to audit by the Company. Members may examine records pertaining directly to themselves. At least annually, the Capital Accumulation Plan Administrative Committee shall have mailed to each Member a statement of his or her Account and such statement shall be deemed to have been accepted as correct for all purposes of this Plan unless written notice to the contrary is received by the Capital Accumulation Plan Administrative Committee or the Trustee within 30 days after the date of mailing. 9.6 Claims for Benefits Applications for benefits must be made in such manner as prescribed by the Administrator. The Administrator shall have full discretion and final authority to determine eligibility for benefits and to construe the terms of the Plan in acting upon an initial application for benefits or an appeal of a denial of an application for benefits. Each application shall be acted upon and approved or disapproved within 90 days following its receipt by the Administrator. In the event special circumstances require an extension of time for reviewing the initial application for benefits, the Administrator shall make a determination as soon as practicable but no later than 180 days following receipt of the application. If any application for benefits is denied, in whole or in part, the Administrator shall notify the applicant in writing of such denial and of the applicant's right to a review by the Administrator and shall set forth in a manner calculated to be understood by the applicant, specified reasons for such denial, specific references to pertinent Plan provisions on which the denial is based, a description of any additional material or information necessary for the applicant to perfect the application, an explanation of why such -49- 56 material or information is necessary, and an explanation of the Plan's review procedure. Any person, or a duly authorized representative thereof, whose application for benefits is denied in whole or in part, may appeal from such denial to the Administrator for a review of the decision by submitting to the Administrator within 60 days after receiving notice of denial, a written statement: (a) Requesting a review of the application for benefits by the Administrator; (b) Setting forth all of the grounds upon which the request for review is based and any facts in support thereof; and (c) Setting forth any issues or comments which the applicant deems relevant to the application. The Administrator shall act upon each such appeal application within 60 days after the later of receipt of the applicant's request for review by the Administrator or receipt of any additional materials reasonably requested by the Administrator from such applicant. In the event special circumstances require an extension of time for reviewing the appeal, the Administrator shall make a determination as soon as practicable but no later than 120 days following receipt of the appeal. The Administrator shall make a full and fair review of each such application and any written materials submitted by the applicant or the Company in connection therewith and may require the Company or the applicant to submit within 30 days of written notice by the Administrator therefor, such additional facts, documents, or other evidence as the Administrator, in its sole discretion, deems necessary or advisable in making such a review. The Administrator shall have full discretion in making an independent determination of the applicant's eligibility for benefits under -50- 57 the Plan and shall have full discretion to construe the terms of the Plan in making its review. The decision of the Administrator on any application for benefits shall be final and conclusive upon all persons. If the Administrator denies an application in whole or in part, the Administrator shall give written notice of its decision to the applicant setting forth in a manner calculated to be understood by the applicant the specific reasons for such denial and specific references to the pertinent Plan provisions on which the Administrator's decision was based. 9.7 Liability of Committee No member of the Capital Accumulation Plan Administrative Committee shall be liable for any action taken in good faith or for the exercise of any power given the Capital Accumulation Plan Administrative Committee, or for the actions of other members of said Committee unless and except to the extent that such liability is imposed under law as a result of a breach by such member of his or her fiduciary responsibilities. 9.8 Medical Board The Capital Accumulation Plan Administrative Committee may appoint a Medical Board consisting of not less than three physicians, who shall be authorized to make, or have made, any physical or mental examinations required or authorized by the Administrator or by the provisions of this Plan. 9.9 Unlocated Member If the Committee is unable, after reasonable and diligent effort, to locate a Member or beneficiary entitled to payment under the Plan, such payment may be forfeited and used to pay Plan expenses. If the Member or beneficiary later files a claim for benefit, such benefit will be reinstated. -51- 58 9.10 Legal Representative The Capital Accumulation Plan Administrative Committee shall act on behalf of the Plan with respect to any claim or cause of action, whether arising in the course of administrative or judicial proceedings or otherwise, and shall be responsible for initiating, pursuing and defending any such claim or cause of action involving the Plan. -52- 59 SECTION 10 AMENDMENTS, DISCONTINUANCE, LIABILITIES 10.1 Amendment of Plan This Plan may be amended by the Board of Directors of CH-Twenty, Inc. if, as amended, it continues to be for the exclusive benefit of Employees. However, no amendment shall reduce the account of any Member as of the date of such amendment. 10.2 Termination CH-Twenty, Inc. intends to continue this Plan indefinitely but reserves the right to terminate it at any time, by action of its Board of Directors. If this Plan is terminated, or if there is a complete discontinuance of contributions under this Plan by the Company, all amounts credited to Accounts of Members shall be held for distribution as provided in Section 8. 10.3 Liability of Company The Company shall have no liability for payments under this Plan except to make the contributions required by Section 4. Any payments under the Plan shall be made solely from the fund held by the Trustee. -53- 60 SECTION 11 MISCELLANEOUS 11.1 Employment This Plan shall not give any Member any right to be continued in the employment of the Company. 11.2 Benefits Not Assignable Except as provided in Paragraph 8.4, no benefit under this Plan shall be assignable or transferable in whole or in part, either directly or by operation of law or otherwise, and shall not be subject to attachment or other process. 11.3 Discharge of Liability If the Administrator deems any person incapable of receiving benefits to which such person is entitled under this Plan, by reason of minority, illness, infirmity, mental incompetency or other incapacity, it may direct the Trustee to make payment directly for the benefit or the account of such person or to any eligible person selected by the Administrator to disburse such payment whose receipt shall be a complete settlement therefor. 11.4 Governing Laws The Plan shall be governed by and construed in accordance with federal laws governing employee benefit plans qualified under the Code or with the laws of the State of Delaware to the extent not preempted by federal law. 11.5 Limitation on Mergers This Plan may not merge or consolidate with, or transfer any of its assets or liabilities to any other plan unless each Member in this Plan would, if said other plan were to terminate, receive a benefit immediately after the merger, consolidation or transfer which is equal to or greater than the benefit such Member -54- 61 would have been entitled to receive immediately before the merger, consolidation or transfer if this Plan had terminated. 11.6 Delegation of Fiduciary or Administrative Responsibilities CH-Twenty, Inc., by resolution of its Board of Directors or by written action of any officer generally or specifically named by such a resolution to take such an action, and the Capital Accumulation Plan Administrative Committee, by resolution of said Committee, may at any time delegate to any other named person or body, or reassume therefrom, any of their respective fiduciary responsibilities or administrative duties with respect to this Plan, including the power to delegate and reassume such responsibilities and duties by written action naming the person or body to whom the responsibility has been delegated. However, only the immediate delegate of CH-Twenty, Inc. or the Capital Accumulation Plan Administrative Committee, as the case may be, may, if so authorized by CH-Twenty, Inc. or said Committee, delegate any such responsibilities or duties. 11.7 Named Fiduciary The named fiduciary with respect to this Plan is CH-Twenty, Inc. except that (a) as to any matter specified in this Plan as being the responsibility or function of the Capital Accumulation Plan Administrative Committee, the named fiduciary is said Committee, (b) as to any matter specified in the Plan or in the trust agreement as being the responsibility or function of the Trustee or the Investment Officer of Atlantic Richfield Company, the named fiduciary is the Trustee or the Investment Officer, as the case may be, and (c) as to any matter specified in the Plan as being the responsibility or function of the President of CH-Twenty, Inc., the named fiduciary is such President. -55- 62 11.8 Transferred Funds (a) Predecessor Plan Assets (i) Assets transferred on behalf of a Member to this Plan from the subaccount attributable to the Member's Deferrals under the Predecessor Plan shall be invested in the same manner as such assets were invested under the Predecessor Plan as of the transfer date, until the Member directs reinvestment of such assets pursuant to Paragraph 6.4 or 6.5 of the Plan. (ii) Assets transferred on behalf of a Member to this Plan from the subaccount attributable to Company contributions under the Predecessor Plan, which have been invested solely in Atlantic Richfield Company Common Stock, shall be invested (and shall remain so invested) in Atlantic Richfield Company Common Stock under the ESOP Part of the Plan. (b) Capital Accumulation Plan Assets of a Subsidiary or Affiliate Upon the transfer of an Employee eligible to participate in this Plan from a Subsidiary or Affiliate, other than Atlantic Richfield Company, any assets maintained under a capital accumulation plan of such Subsidiary or Affiliate on behalf of such Employee will be transferred to this Plan in the same investment alternative under which held as of the transfer date, and such transferred assets will be subject to the reinvestment provisions under Paragraph 6.4 or 6.5, except as provided in the following special conditions: (i) Any assets transferred on behalf of a Member which have been invested in Common Stock of a Subsidiary or Affiliate, other than Atlantic Richfield Company, in the subaccount attributable to the Member's Deferrals under the capital accumulation plan of a Subsidiary or Affiliate will remain so invested, with future dividends -56- 63 being reinvested in such stock under the Member's Account, absent the Member's direction to reinvest such assets pursuant to Paragraph 6.5 of the Plan; provided, however, that any assets converted from the Common Stock of such Subsidiary or Affiliate to another investment alternative under the Plan may not be reinvested in Common Stock of a Subsidiary or Affiliate. (ii) Any assets transferred on behalf of a Member which have been invested in the Common Stock of a Subsidiary or Affiliate, other than Atlantic Richfield Company, in the subaccount attributable to Company contributions under the capital accumulation plan of such Subsidiary or Affiliate, will remain so invested, with future dividends being reinvested in such stock under the Member's Account; provided, however, that the Member may elect to convert such assets to Atlantic Richfield Company Common Stock held under the ESOP Part of the Plan and any assets so converted may not be reinvested in the Common Stock of a Subsidiary or Affiliate (iii) Common Stock of a Subsidiary or Affiliate held by the Plan shall be subject to the sale and voting provisions of Section 6. -57- 64 SECTION 12 TOP HEAVY PROVISIONS If the Plan is or becomes Top Heavy in any Plan Year, the provisions of this Section 12 will supersede any conflicting provisions in the Plan. 12.1 Definitions (a) Key Employee means an Employee, former Employee or an Employee's beneficiary who at any time during the determination period is: (i) An officer of the Company who has annual Compensation greater than 50 percent of the amount in effect under Section 415(b)(1)(A) of the Code for the Plan Year; (ii) One of the ten Employees owning (or considered as owning within the meaning of Section 318 of the Code) the largest interest in the Company; provided, such Employee's annual Compensation from the Company exceeds the dollar limitation under Section 415(c)(1)(A) of the Code. If two or more Employees have the same ownership interest, the Employee with the greater annual Compensation from the Company for the Plan Year shall be considered to own the larger interest in the Company; (iii) A five percent owner of the Company; or (iv) A one percent owner of the Company who has annual Compensation from the Company of more than $150,000. The determination period of the Plan is the Plan Year containing the Determination Date and the four preceding Plan Years. -58- 65 The determination of who is a Key Employee will be made in accordance with Section 416(i)(1) of the Code and the regulations thereunder. (b) Top Heavy Plan: For any Plan Year, this Plan is Top Heavy if any of the following conditions exist: (i) If the Top Heavy Ratio for this Plan exceeds 60 percent and this Plan is not part of any Required Aggregation Group or Permissive Aggregation Group of plans; (ii) If this Plan is a part of a Required Aggregation Group of plans (but which is not part of a Permissive Aggregation Group) and the Top Heavy Ratio for the group of plans exceeds 60 percent; or (iii) If this Plan is a part of a Required Aggregation Group of plans and part of a Permissive Aggregation Group and the Top Heavy Ratio for the Permissive Aggregation Group exceeds 60 percent. (c) Top Heavy Ratio (i) If the Company maintains one or more defined contribution plans (including any Simplified Employee Pension Plan) and the Company has not maintained any defined benefit plan which during the five- year period ending on the Determination Date(s) has or has had accrued benefits, the Top Heavy Ratio for this plan alone or for the Required or Permissive Aggregation Group as appropriate is a fraction, the numerator of which is the sum of the account balances of all Key Employees as of the Determination Date(s) [including any part of any account balance distributed in the five-year period ending on the Determination Date(s)], and the denominator of which is the sum of all account balances [including any part of any account -59- 66 balance distributed in the five-year period ending on the Determination Date(s)], both computed in accordance with Section 416 of the Code and the regulations thereunder. Both the numerator and denominator of the Top Heavy Ratio are adjusted to reflect any contribution not actually made as of the Determination Date, but which is required to be taken into account on that date under Section 416 of the Code and the regulations thereunder. (ii) If the Company maintains one or more defined contribution plans (including any Simplified Employee Pension Plan) and the Company maintains or has maintained one or more defined benefit plans which during the five-year period ending on the Determination Date(s) has or has had any accrued benefits, the Top Heavy Ratio for any Required or Permissive Aggregation Group as appropriate is a fraction, the numerator of which is the sum of account balances under the aggregated defined contribution plan or plans for all Key Employees, determined in accordance with Subparagraph 12.1(c)(i), and the Present Value of accrued benefits under the aggregated defined benefit plan or plans for all Key Employees as of the Determination Date(s), and the denominator of which is the sum of the account balances under the aggregated defined contribution plan or plans for all Members, determined in accordance with Subparagraph 12.1(c)(i), and the Present Value of accrued benefits under the defined benefit plan or plans for all Members as of the Determination Date(s), all determined in accordance with Section 416 of the Code and the regulations thereunder. The accrued benefits under a defined benefit plan in both the numerator and denominator of the Top Heavy Ratio are adjusted for any distribution of an accrued benefit made in the five-year period ending on the Determination Date. -60- 67 (iii) For purposes of Subparagraphs 12.1(c)(i) and (c)(ii), the value of account balances and the Present Value of accrued benefits will be determined as of the most recent Valuation Date that falls within or ends with the 12-month period ending on the Determination Date except as provided in Section 416 of the Code and the regulations thereunder for the first and second Plan Years of a defined benefit plan. The account balances and accrued benefits of a Member (A) who is not a Key Employee but who was a Key Employee in a prior year, or (B) effective January 1, 1985, who has not been credited with at least one Hour of Service with a Company maintaining the Plan at any time during the five-year period ending on the Determination Date will be disregarded. The calculation of the Top Heavy Ratio, and the extent to which distributions, rollovers and transfers are taken into account will be made in accordance with Section 416 of the Code and the regulations thereunder. Deductible Employee contributions will not be taken into account for purposes of computing the Top Heavy Ratio. When aggregating plans, the value of account balances and accrued benefits will be calculated with reference to the Determination Dates that fall within the same calendar year. (iv) The accrued benefit of a Member other than a Key Employee shall be determined under the method, (A) if any, that uniformly applies for accrual purposes under all defined benefit plans maintained by the Company, or (B) absent such method, as if such benefits accrued not more rapidly than the slowest accrued rate permitted under the fractional rule of Section 411(b)(1)(C) of the Code. (d) Permissive Aggregation Group: The Required Aggregation Group of plans plus any other plan or plans of the Company which, when considered as a -61- 68 group with the Required Aggregation Group, would continue to satisfy the requirements of Section 401(a)(4) and Section 410 of the Code. (e) Required Aggregation Group means: (i) Each qualified plan of the Company in which at least one Key Employee participates or participated at any time during the determination period (regardless of whether the plan terminated); and (ii) Any other qualified plan of the Company which enables a plan described in Subparagraph 12.1(e)(i) to meet the requirements of Section 401(a)(4) or Section 410 of the Code. (f) Determination Date means for any Plan Year the last day of the preceding Plan Year. For the first Plan Year of the Plan, the last day of that year. (g) Valuation Date means December 31 of each year. (h) Present Value: Present Value shall be based on interest rate and the mortality tables specified in the Company's defined benefit plan. (i) Compensation means all compensation, as that term is defined for Section 415 purposes, but including amounts contributed by the Company pursuant to salary reduction agreements which are excludable from the Employee's income under Code Section 125, Section 402(e)(3), Section 402(h) and Section 403(b). 12.2 Minimum Allocation (a) Except as otherwise provided in Subparagraphs 12.2(b), (c) and (d), the Company contributions allocated on behalf of any Member who is not a Key Employee shall not be less than the lesser of three percent of such -62- 69 Member's Compensation or in the case where the Company has no defined benefit plan which designates this Plan to satisfy Section 401 of the Code, the largest percentage of Company contributions, as a percentage of the first $150,000 of the Key Employee's Compensation, allocated on behalf of any Key Employee for that year. The minimum allocation is determined without regard to any Social Security contribution. This minimum allocation shall be made even though, under other Plan provisions, the Member would not otherwise be entitled to receive an allocation, or would have received a lesser allocation for the year because of (i) the Member's failure to complete 1,000 Hours of Service, or (ii) the Member's failure to make mandatory employee contributions to the Plan, or (iii) Compensation less than a stated amount. (b) The provision in Subparagraph 12.2(a), shall not apply to any Member who was not employed by the Company on the last day of the Plan Year. (c) If Members of this Plan are covered by one or more defined benefit plans maintained by the Company or its Subsidiaries, the minimum allocation or benefit requirements applicable to Top Heavy plans shall first be met by such defined benefit plan or plans. (d) If Members of this Plan are covered by one or more defined contribution plans maintained by the Company or its Subsidiaries, and are not covered by any defined benefit plans of the Company or its Subsidiaries, the minimum allocation requirement will be met by the defined contribution plan in which the Employee is an active member in the following order: 1. Money Purchase Pension Plan 2. Profit Sharing Plan, and 3. Stock Bonus Plan -63- 70 (e) For purposes of satisfying the minimum allocation requirements of this Paragraph 12.2, Elective Deferrals and Company contributions under Paragraph 4.1 may not be taken into account. 12.3 The minimum accrued benefit required [to the extent required to be nonforfeitable under Section 416(b)] may not be suspended or forfeited under Code Section 411(a)(3)(B) or Section 411(a)(3)(D). 12.4 For any Plan Year in which the Plan is Top Heavy, only the first $150,000 (or such larger amount as may be prescribed by the Secretary of Treasury or the Secretary's delegate) of each Member's annual Compensation will be taken into account for purposes of determining benefits under the Plan. 12.5 In any Plan Year in which the Top Heavy Ratio exceeds 60 percent the denominators of the defined benefit fraction and defined contribution fraction [as previously defined in the Plan] shall be computed using 100 percent of the dollar limitation instead of 125 percent. The preceding sentence shall not apply to an Employee so long as there are no: (a) Company contributions, forfeitures or voluntary nondeductible contributions allocated to such Employee, or (b) Accruals for such Employee under any qualified defined benefit plan. 12.6 In determining the highest rate of contribution applicable to any Key Employee, amounts that such Key Employee elects to defer under an arrangement qualified under Section 401(k) of the Code will be counted for the purposes of Section 416 of the Code. -64- 71 SECTION 13 LOANS TO MEMBERS 13.1 General A Member may borrow from his or her Account in accordance with the terms and conditions set forth in this Section 13 and such additional rules, consistent with such terms and conditions, which the Administrator may establish from time to time. 13.2 Eligibility To be eligible to apply for and receive a loan, the Member must be in receipt of regular Earnings. The loan shall be irrevocable upon the earlier of: (a) Endorsement of the check representing the loan proceeds, or (b) Expiration of ten days from issuance of such check. 13.3 Loan Amount (a) The maximum loan shall be the greater of (i) or (ii), below: (i) The lesser of $10,000 (reduced by the outstanding balance of any loan from the CH-Twenty, Inc. Savings Plan) or the value of the Member's Account (which shall include the total of the Member's Accounts in the CH-Twenty, Inc. Capital Accumulation and Savings Plans as of the date of the loan and shall exclude United States Savings Bonds); or (ii) The lesser of one half of the Member's Account (which shall include the total of the Member's Accounts in the CH-Twenty, Inc. Capital Accumulation and Savings Plans as of the date of the loan and shall -65- 72 exclude United States Savings Bonds), or $50,000 reduced by the highest balance, at any specific time, of any outstanding loan or loans during the preceding 12 months from the Plan or the CH-Twenty, Inc. Savings Plan). (b) A loan must be in cash, in increments of $100 and in an amount not less than $1,000. (c) The maximum loan amount shall be reduced to the extent necessary to prevent each installment of the loan payment, including principal and interest, when added to installments under any outstanding loan under the CH-Twenty, Inc. Savings Plan, from exceeding 25 percent of a Member's biweekly Earnings. (d) The loan amount may not exceed the lesser of (i) the amount of the Member's Deferrals and earnings thereon at the time the loan is made (excluding assets which originated in the Atlantic Richfield Employee Stock Ownership Plan) or (ii) the amount of the security, as described hereafter, for the loan. (e) The value of Common Stock, the Equity Fund, the International Equity Fund, the Bond Fund and the Balanced Fund for purposes of Subparagraph 13.3(a), will be determined on the sale date, pursuant to Paragraph 6.7 or 6.11, immediately preceding the date the loan application is received by the Administrator. 13.4 Frequency (a) A Member may have such number of loans outstanding at any time as shall be determined by the Administrator. -66- 73 (b) A loan application may be submitted only once during any 15-day period and a loan application may not be submitted earlier than seven days following receipt by the Administrator of a Member's application to make a purchase or sale under Paragraph 6.5 or a hardship withdrawal under Section 7. (c) A loan application may not be submitted earlier than 15 days following repayment of a previous loan under the Plan the CH-Twenty, Inc. Savings Plan. 13.5 Interest Rate A loan shall bear interest at a rate established and communicated by the Capital Accumulation Plan Administrative Committee to provide the Plan with a rate of return commensurate with prevailing interest rates charged on similar commercial loans by persons in the business of lending money. 13.6 Security (a) Each loan must be evidenced by a loan agreement executed by the Member for the amount of the loan, including principal and interest, payable to the order of the Trustee. (b) Security for the loans shall equal 50 percent of the assets in the Member's Account. (c) The assets which constitute security for the loan will be valued on the date of the loan agreement, or at such other time as may be determined by the Administrator. -67- 74 13.7 Funding of the Loan (a) The Member shall direct, on a form prescribed by the Administrator, which assets shall be used to provide the loan proceeds; provided, however, that Company contributions that are held under the ESOP Part of the Plan, and earnings thereon, may not be used to fund a loan. To the extent the Member does not give such directions, the loan will be funded in accordance with procedures established by the Administrator. (b) The value of Common Stock, the Equity Fund, the International Equity Fund, the Bond Fund and the Balanced Fund sold to provide the loan proceeds shall be determined on the sale date, pursuant to Paragraph 6.7 or 6.11, immediately following the date the loan application is received by the Administrator. 13.8 Repayment of the Loan (a) As determined by the Member, but subject to the restriction in Subparagraph 13.3(c), a loan may be repaid over a period of one, two, three, four or five years or, in the case of a loan used to acquire the Member's principal residence, such longer term as determined by the Administrator and permitted under Section 72(p) of the Code. (b) Principal and interest shall be amortized, on a level basis, over the term of the loan. (c) Except as provided below, payments shall be made by means of payroll deductions, the authorization of which shall be irrevocable. (i) The loan may be repaid in full at any time without penalty. -68- 75 (ii) If a Member is not in receipt of regular Earnings sufficient to permit repayment of the loan, repayment shall be made by means prescribed by the Administrator. Repaid principal and interest shall be credited to the Member's Money Market Fund account. 13.9 Deemed Distribution A distribution of the unpaid principal shall be deemed to have been made to the Member, if the Member: (a) Separates from service for any reason, including retirement, termination of employment, divestiture or death. The deemed distribution shall occur upon the earlier of 12 months following termination of membership or the date the loan was due. (b) Fails to make repayment under Subparagraph 13.8(c)(ii) for a period of seven consecutive scheduled payment dates. 13.10 Default If the Member is not in receipt of regular Earnings sufficient to permit repayment of the loan for a period exceeding seven consecutive pay periods, and other arrangements acceptable to the Administrator have not been agreed to by the Member, the loan will be deemed in default and the Administrator will realize on the security in accordance with applicable laws. -69- 76 SECTION 14 TRANSFERS FROM OTHER PLANS 14.1 Transfers from Other Qualified Plans An Employee who has had distributed to the Employee all or a portion of his or her taxable interest in a plan meeting the requirements of Section 401(a) of the Code (the "Other Plan") may, in accordance with procedures approved by the Capital Accumulation Plan Administrative Committee, transfer in cash all or a portion of the taxable distribution received from the Other Plan to the Plan, provided the following conditions are met: (a) The transfer occurs on or before the 60th day after the Member receives the distribution from the Other Plan; (b) The distribution from the Other Plan qualifies as an eligible rollover distribution within the meaning of Section 402(c)(4) of the Code; and (c) The amount transferred does not exceed the maximum amount which may be rolled over in accordance with Section 402(c)(2) of the Code. 14.2 Transfers From Individual Retirement Accounts An Employee who receives a distribution from an individual retirement account described in Section 408(a) of the Code or an individual retirement annuity described in Section 408(b) of the Code which constitutes the entire amount of such account or annuity (including earnings thereon), and no portion of which is attributable to any source other than a lump sum distribution from a qualified plan described in Paragraph 14.1, may, in accordance with procedures approved by the Capital Accumulation Plan Administrative Committee, transfer in cash all or a portion of such distribution to the Plan, within 60 days after receiving the distribution. -70- 77 14.3 Participation Notwithstanding anything in the Plan to the contrary, an Employee who transfers funds to the Plan pursuant to Paragraph 14.1 or 14.2, shall, upon such transfer, become a Member of the Plan except that the right to make Elective Deferrals or receive Company contributions will remain subject to Paragraph 2.1. 14.4 Administration The Administrator shall develop such procedures, including procedures for obtaining information from an Employee desiring to make such a transfer, as it deems necessary or desirable to enable it to determine that the proposed transfer will meet the requirements of this section. Upon approval by the Capital Accumulation Plan Administrative Committee, the amount transferred shall be deposited with the Trustee in the Employee's Elective Deferral Account. -71- EX-4.4 4 CH-TWENTY, INC. SAVINGS PLAN 1 EXHIBIT 4.4 CH-TWENTY, INC. SAVINGS PLAN EFFECTIVE AS OF JULY 1, 1997 2 CH-TWENTY, INC. SAVINGS PLAN To record the adoption of the CH-Twenty, Inc. Savings Plan, effective July 1, 1997, the undersigned, being duly authorized to act on behalf of CH-Twenty, Inc. has executed this plan document at Los Angeles, California on the 30th day of June, 1997. ATTEST: CH-TWENTY, INC. BY: /s/ ARMINEH SIMONIAN BY: /s/ ALLAN L. COMSTOCK ---------------------------- ---------------------------- ALLAN L. COMSTOCK President 3 CH-TWENTY, INC. SAVINGS PLAN TABLE OF CONTENTS
Page No. -------- INTRODUCTION ...............................................................................1 Section 1 - DEFINITION 1.1 Acquisition Loan........................................................2 1.2 Administrator...........................................................2 1.3 Base Pay................................................................2 1.4 Code....................................................................2 1.5 Company.................................................................2 1.6 Credit Company Service..................................................2 1.7 Employee................................................................2 1.8 ERISA...................................................................3 1.9 Financed Shares.........................................................3 1.10 Highly Compensated Employee.............................................3 1.11 Hours of Service........................................................5 1.12 Member..................................................................7 1.13 Member's Account or Account.............................................7 1.14 Plan or Plans...........................................................7 1.15 Plan Year...............................................................8 1.16 Predecessor Plan........................................................8 1.17 Subsidiary or Affiliate.................................................8 1.18 Savings Plan Administrative Committee...................................8 1.19 Trustee.................................................................8 Section 2 - MEMBERSHIP 2.1 Eligibility.............................................................9 2.2 Membership..............................................................9 2.3 Membership Termination..................................................9 2.4 Resuming Membership After Transfer......................................10 2.5 Transfer to Company.....................................................10 2.6 Transfer from Company...................................................11 Section 3 - CONTRIBUTION BY MEMBERS 3.1 Percent of Base Pay.....................................................12 3.2 Payment of Contributions to Trustee.....................................12 3.3 Suspension of Contributions.............................................13 3.4 Make-Up Member Contributions............................................14
i 4 Section 4 - COMPANY CONTRIBUTIONS 4.1 Company Contribution....................................................15 4.2 Actual Contribution Percentage Tests....................................15 4.3 Distribution of Excess Contributions to Members.........................15 4.4 Section 415 Limitations.................................................16 4.5 Nonelective Contributions...............................................17 4.6 Exclusive Benefit.......................................................18 Section 5 - FINANCED SHARES 5.1 Acquisition Loans.......................................................19 5.2 Payments on Acquisition Loan............................................20 Section 6 - INVESTMENT OF MEMBERS' ACCOUNTS 6.1 Members' Accounts.......................................................23 6.2 Investment of Member Contributions......................................23 6.3 Investment of Company Contributions.....................................25 6.4 Funds Invested in the Money Market Fund.................................25 6.5 Sale and Reinvestment of Common Stock, Equity Fund, Bond Fund, International Equity Fund or Balanced Fund Units..............26 6.6 Directives..............................................................28 6.7 Purchases and Sales of Atlantic Richfield Company Common Stock..........28 6.8 Voting of Atlantic Richfield Company Common Stock.......................31 6.9 Title of Investments....................................................32 6.10 Allocation of Trust Earnings and Valuation of Trust Investments.........32 6.11 Purchase and Redemption of the Equity Fund, Bond Fund, International Equity Fund and Balanced Fund Units...................33 6.12 Voting of the Money Market Fund, Equity Fund, Bond Fund and International Equity Fund Investments...............................35 6.13 Investment Advisory Fees................................................36 6.14 Member Protection.......................................................36 6.15 Confidentiality.........................................................36 Section 7 - WITHDRAWALS DURING EMPLOYMENT 7.1 Partial Withdrawals.....................................................37 7.2 Irrevocability of Election..............................................38 Section 8 - PAYMENT ON TERMINATION OF COMPANY EMPLOYMENT, DIVORCE OR OTHER REASONS 8.1 Termination of Membership...............................................39 8.2 Death...................................................................40 8.3 Disability..............................................................42 8.4 Divorce.................................................................42
ii 5 8.5 Rollover................................................................42 8.6 Notice..................................................................43 8.7 Distributions...........................................................43 8.8 Distribution of Benefits................................................43 Section 9 - ADMINISTRATION - SAVINGS PLAN ADMINISTRATIVE COMMITTEE 9.1 Savings Plan Administrative Committee...................................45 9.2 Rules of Conduct........................................................45 9.3 Legal, Accounting, Clerical.............................................45 9.4 Interpretation of Provisions............................................46 9.5 Records of Administration...............................................46 9.6 Claims for Benefits.....................................................46 9.7 Liability of Committee..................................................48 9.8 Medical Board...........................................................48 9.9 Unallocated Member......................................................48 9.10 Legal Representative....................................................49 Section 10 - AMENDMENTS, DISCONTINUANCE, LIABILITIES 10.1 Amendment of Plan.......................................................50 10.2 Termination.............................................................50 10.3 Liability of Company....................................................50 Section 11 - MISCELLANEOUS 11.1 Employment..............................................................51 11.2 Benefits Not Assignable.................................................51 11.3 Discharge of Liability..................................................51 11.4 Governing Law...........................................................51 11.5 Limitation on Mergers...................................................52 11.6 Delegation of Fiduciary or Administrative Responsibilities..............52 11.7 Named Fiduciary.........................................................52 11.8 Transferred Funds.......................................................53 Section 12 - LOANS TO MEMBERS 12.1 General.................................................................55 12.2 Eligibility.............................................................55 12.3 Loan Amount.............................................................55 12.4 Frequency...............................................................56 12.5 Interest Rate...........................................................57 12.6 Security................................................................57 12.7 Funding of the Loan.....................................................57 12.8 Repayment of Loan.......................................................58 12.9 Deemed Distribution.....................................................58 12.10 Default.................................................................59
iii 6 Section 13 - TOP HEAVY PROVISIONS 13.1 Definitions.............................................................60 13.2 Minimum Allocation .....................................................64 13.3 ........................................................................66 13.4 ........................................................................66 13.5 ........................................................................66 13.6 ........................................................................66
iv 7 CH-TWENTY, INC. SAVINGS PLAN INTRODUCTION This Plan is intended to qualify as a Stock Bonus Plan under Section 401(a) of the Internal Revenue Code of 1986, as amended. Part of the Plan (the "ESOP Part") is intended to qualify as an Employee Stock Ownership Plan under Section 4975(e)(7) of the Code and such part is designed to invest primarily in Atlantic Richfield Company Common Stock. The class of employees eligible to participate in this Plan previously participated in the Atlantic Richfield Savings Plan II. The assets and liabilities of the Atlantic Richfield Savings Plan II allocable as of June 30, 1997 to the participants in the Plan who commenced participation effective July 1, 1997 were transferred to the Plan. The Plan is effective July 1, 1997. -1- 8 SECTION 1 DEFINITIONS 1.1 "Acquisition Loan" means a loan or other extension of credit used by the Trustee to finance the acquisition of Atlantic Richfield Company Common Stock. 1.2 "Administrator" means the Savings Plan Administrative Committee. 1.3 "Base Pay" means the regular wages or salary of a Member as determined by the Company including the amount of any salary reduction pursuant to Section 125 and Section 401(k) of the Internal Revenue Code of 1986, as amended, but excluding extra pay, such as overtime, premium bonuses, living or other allowances. Base Pay shall not exceed $160,000 as adjusted each Plan Year pursuant to Section 401(a)(17)(B) of the Code. 1.4 "Code" means the Internal Revenue Code of 1986, as amended. 1.5 "Company" means CH-Twenty, Inc. and such of its Subsidiaries or Affiliates whose Employees are included in this Plan upon authorization of the Board of Directors of CH-Twenty, Inc. and adoption of this Plan by the Board of Directors of such authorized Subsidiary or Affiliate. 1.6 "Credited Company Service" means service with the Company, a predecessor company, and/or with a Subsidiary or Affiliate which service the Company recognizes, on a basis uniformly applicable to all persons similarly situated, for purposes of this Plan. 1.7 "Employee" means any person who is employed by the Company excluding: -2- 9 (a) Casual Employees, Project Employees and Leased Employees, as defined under the Company's Employment Classification Policy; (b) Employees represented by any collective bargaining agent which has not negotiated the benefits of this Plan provided that retirement benefits were the subject of good faith negotiations between the Company and the bargaining agent; and (c) Any division or group of employees which is expressly excluded from eligibility for this Plan by action of the Board of Directors of the Company. (d) Employees who are earning a base salary of more than $150,000 on an annualized basis. 1.8 "ERISA" means the Employee Retirement Income Security Act of 1974, as amended. 1.9 "Financed Shares" means shares of Atlantic Richfield Company Common Stock acquired by the Trustee with the proceeds of an Acquisition Loan. 1.10 "Highly Compensated Employee" means: (a) Any employee who performs service during the determination year and is described in one or more of the following groups: (i) An employee who is a five percent owner, as defined in Section 416(i)(1) of the Code, at any time during the determination year or the look-back year, as defined below; or (ii) An employee who receives compensation in excess of $80,000, as adjusted pursuant to Section 415(d) of the Code for Plan Years -3- 10 commencing after December 31, 1997, during the look-back year and, at the election of the Administrator, is a member of the top-paid group, as defined below, for the look-back year; (b) For purposes of the definition of Highly Compensated Employee the following will apply: (i) The determination year is the Plan Year for which the determination of who is highly compensated is being made; or if the Company makes the election pursuant to Treas. Reg. 1.414(q)-IT Q&A-14(b), the period by which the determination year extends beyond the calendar year referred to in Subparagraph 1.10(b)(ii). (ii) The look-back year is the 12-month period immediately preceding the determination year, or if the Company makes the election pursuant to Treas. Reg. 1.414(q)-IT Q&A-14(b), the calendar year ending with or within the determination year. (iii) The top-paid group consists of the top 20 percent of employees ranked on the basis of compensation received during the year. For purposes of determining the number of employees in the top paid group, employees who have not completed six months of service by the end of the Plan Year (including service in the immediately preceding Plan Year); who normally work less than 17-1/2 hours per week; who work less than six months during any year; who are nonresident aliens with no income from sources within the United States or who have not had their 21st birthday by the end of the Plan Year shall be included. -4- 11 (iv) Employers aggregated under Section 414(b), (c), (m), or (o) of the Code are treated as a single employer. (v) Compensation, for purposes of this Paragraph 1.10 means compensation within the meaning of Section 415(c)(3) of the Code without regard to Section 125, Section 402(e)(3) and Section 402(h)(1)(B) of the Code. (c) A former employee who has a separation year prior to the determination year and who was a highly compensated active employee for either (i) such employee's separation year, or (ii) any determination year ending on or after the employee's 55th birthday will be a Highly Compensated Employee. Generally, a separation year is the determination year the employee separates from service. (d) If elected by the Administrator, Subparagraph 1.10(a) shall be modified by substituting the simplified method pursuant to Section 4 of Rev. Proc. 93-42, in which case the Highly Compensated Employees shall be determined under Subparagraph 1.10(a) on the basis of the look-back year and determination year, or the determination year only, taking into account all employees employed during such year. 1.11 "Hours of Service" means: (a) Each hour for which an Employee is paid, or entitled to payment, for the performance of duties for the Company or any Subsidiary or Affiliate during the computation period in which the duties are performed. (b) Each hour for which an Employee is paid, or entitled to payment, by the Company or any Subsidiary or Affiliate on account of a period of time during which no duties are performed (irrespective of whether the employment -5- 12 relationship has terminated) due to vacation, holiday, illness, incapacity (including disability), layoff, jury duty, military duty or leave of absence. (c) Each hour for which back pay, irrespective of mitigation of damages, is either awarded or agreed to by the Company or any Subsidiary or Affiliate. Such hours shall be credited to the Employee for the computation period or periods to which the award or agreement pertains. (d) An Employee will be credited with 200 Hours of Service, to the extent required by federal law, for each month during which the Employee is on active duty in the Armed Forces of the United States and for which the Employee is not paid or entitled to be paid by the Company or any Subsidiary or Affiliate, and with 200 Hours of Service for each month that membership may be maintained by the Employee under Subparagraph 2.3(a). (e) Hours credited for any period under any provision of this Paragraph 1.11 may not also be credited for the same period under any other provisions of this Plan. Hours shall be credited under Subparagraphs 1.11(a) thru (c) pursuant to U. S. Department of Labor Regulations under 29CFR Section 2530.200b-2, which are incorporated herein by this reference. (f) For all purposes under the Plan, an Employee shall be credited with 200 Hours of Service for each calendar month in which the Employee would otherwise be credited with one or more Hours of Service. (g) Solely for purposes of determining whether a break in service has occurred in a computation period, and to the extent it does not duplicate Hours of Service credited under any other provision of this Paragraph 1.11, an individual who is absent from work for maternity or paternity reasons shall -6- 13 receive credit for the Hours of Service which would otherwise have been credited to such individual but for such absence, or in any case in which such hours cannot be determined, eight Hours of Service per day of such absence. For purposes of this subparagraph, an absence from work for maternity or paternity reasons means an absence (i) by reason of the pregnancy of the individual; (ii) by reason of a birth of a child of the individual; (iii) by reason of the placement of a child with the individual in connection with the adoption of the child by such individual; or (iv) for purposes of caring for such child for a period beginning immediately following such birth or placement. The Hours of Service credited under this subparagraph shall be credited within the computation period in which the absence begins if the crediting is necessary to prevent a break in service in that period, or in all other cases, in the following computation period. 1.12 "Member" means an Employee who has joined the Plan as provided in Section 2 and whose membership has not terminated under any of the provisions of Paragraph 2.3. 1.13 "Member's Account" or "Account" means a separate account maintained by the Trustee for each member consisting of (i) one subaccount to which is allocated the Member's contribution, as adjusted for annual earnings and withdrawals, and realized and unrealized gains and losses attributable thereto; and (ii) a second subaccount to which is allocated the Company's contribution (transferred from the Predecessor Plan) as adjusted for annual earnings and withdrawals and realized and unrealized gains and losses attributable thereto. 1.14 "Plan" or "Plans" means the CH-Twenty, Inc. Savings Plan as set forth herein, and any amendments hereto. -7- 14 1.15 "Plan Year" means the period commencing on July 1 of each calendar year and ending on June 30 of the immediately following calendar year. 1.16 "Predecessor Plan" means the Atlantic Richfield Savings Plan II. 1.17 "Subsidiary" or "Affiliate" means: (a) All corporations which are members of a controlled group of corporations within the meaning of Section 1563(a) of the Code [determined without regard to Section 1563(a)(4) and Section 1563(e)(3)(C) of said Code] and of which CH-Twenty, Inc. is then a member. Subsidiary or Affiliate shall include Atlantic Richfield Company and its Subsidiaries or Affiliates; and (b) All trades or businesses, whether or not incorporated, which, under the Regulations prescribed by the Secretary of the Treasury pursuant to Section 210(d) of ERISA or Section 414(c) of the Code, are then under common control with CH-Twenty, Inc., or with respect to the last sentence of Subparagraph 1.17(a), Atlantic Richfield Company. 1.18 "Savings Plan Administrative Committee" means the committee provided for in Section 9 of the Plan. 1.19 "Trustee" means the persons or corporations, or both, designated by agreements of trust between them and CH-Twenty, Inc., to hold contributions from Members and the Company, investments thereon and earnings thereon. The duties and responsibilities of the Trustee shall be those set forth in the trust agreement. -8- 15 SECTION 2 MEMBERSHIP 2.1 Eligibility An Employee who is paid on the United States dollar payroll of the Company may become a Member on the Employee's date of employment 2.2 Membership (a) To become a Member, an Employee must file an application for membership with the Administrator giving such information as it may require to establish the Employee's rate of contribution and initial directions with respect to investments. The Employee's contributions shall commence with the first full pay period beginning on or after the effective date of the Employee's membership. (b) If an Employee is a Member of a thrift or savings plan of the Company (including the Predecessor Plan), or a Subsidiary or Affiliate, and the Employee's contributions to such plan of the Company or Subsidiary or Affiliate are suspended at the time the Employee becomes eligible for membership in this Plan, the Employee's contributions to the Plan shall commence with the first full pay period beginning on or after the date on which such period of suspension then in effect under the Plan of the Company, or the Subsidiary or Affiliate, ends. 2.3 Membership Termination An Employee's membership shall terminate when any of the following occur: (a) The Member dies, retires or the Member's employment with the Company is otherwise terminated except: -9- 16 (i) If the Member transfers to a Subsidiary or Affiliate which is not a Company participating in this Plan, the Member may continue as a Member of this Plan until the Member is no longer employed by the Company or any of its Subsidiaries or Affiliates; or (ii) If the Member leaves active employment with the Company, the Member may maintain his or her membership in the Plan, on terms and conditions uniformly applicable to all Members similarly situated by the Company, during military or other types of leaves of absence granted by the Company. (b) He continues employment with an acquiring employer in conjunction with a sale to the acquiring employer of substantially all of the assets used by the Company or any Subsidiary or Affiliate in a trade or business which such entity conducts. (c) He continues in the employment of a Subsidiary or Affiliate following a disposition of the Company's interest in such Subsidiary or Affiliate. 2.4 Resuming Membership After Transfer If a Member is transferred pursuant to Subparagraph 2.3(a)(i), and subsequently is transferred to Company employment in which the Member would be eligible to resume membership in the Plan, the Member shall be so eligible on or after the date of such transfer, except as otherwise provided in Subparagraph 2.2(b). 2.5 Transfer to Company When an Employee who remains a Member of a thrift or savings plan maintained by the Company, or a Subsidiary or Affiliate, becomes a Member of the Plan, the occurrence of any action that causes or would have caused a suspension of contributions or a termination of membership under the rules and regulations of the -10- 17 plan of the Company, or the Subsidiary or Affiliate, will simultaneously cause a suspension of contributions or a termination of membership in the Plan. 2.6 Transfer from Company When an Employee who is a Member of the Plan is transferred to employment with an ineligible group of the Company, or with a Subsidiary or Affiliate, and becomes a Member of a thrift or savings plan maintained by the Company, or the Subsidiary or Affiliate, the occurrence of any action that causes termination of membership under the provisions of the plan of the Company, or the Subsidiary or Affiliate, will simultaneously incur the penalty of termination of membership under the provisions of the Plan. -11- 18 SECTION 3 CONTRIBUTIONS BY MEMBERS 3.1 Percent of Base Pay Each Member who is an Employee may elect to make contributions to the Plan at a rate of one percent to ten percent of the Member's Base Pay, in whole percentages; provided, however, that the amount of such contributions, when considered together with any contributions made by the Member to any other plan maintained by the Company, or any Subsidiary or Affiliate, which is qualified under Section 401(a) of the Code, shall not exceed the limitations of Paragraph 4.2 or the maximum amount of contributions permissible by applicable law or by regulation or ruling of the Internal Revenue Service. Such contributions shall be made by payroll deduction or by other methods approved by the Administrator. A Member's election shall be made in the manner prescribed by the Administrator. A Member may at any time change his or her election with respect to the rate of future contributions by giving notice to the Administrator. Such changes shall be effective as of the payroll period beginning after the date of receipt of such notice by the Administrator. 3.2 Payment of Contributions to Trustee A Member's contributions for a Plan Year shall be paid to the Trustee no later than 30 days after the last day of the Plan Year. Member's contributions may be paid to the Trustee in the following forms: (a) To the extent that a Member has directed pursuant to Paragraph 6.2 that Member contributions be invested in an option other than Atlantic Richfield Common Stock, such contributions shall be paid to the Trustee in cash. -12- 19 (b) To the extent that a Member has directed pursuant to Paragraph 6.2 that his or her contributions be invested in Atlantic Richfield Company Common Stock under the non-ESOP Part of the Plan, such contributions may be paid to the Trustee in cash, in shares of Atlantic Richfield Company Common Stock, or in any combination thereof. (c) To the extent that a Member has directed pursuant to Paragraph 6.2 that his or her contributions be invested in Atlantic Richfield Company Common Stock under the ESOP Part of the Plan, such contributions may be paid to the Trustee in cash, in shares of Atlantic Richfield Company Common Stock, in the form of forgiveness of indebtedness on an Acquisition Loan from the Company to the Plan, or in any combination thereof. 3.3 Suspension of Contributions A Member's contributions will be suspended as follows: (a) Upon the Member's transfer, other than on an approved leave of absence, to employment with: (i) A Subsidiary or Affiliate which is not participating in the Plan; or (ii) Atlantic Richfield Company or any of its Subsidiaries or Affiliates in such foreign countries as the Company shall designate; the Member's contributions shall automatically be suspended while the Member remains in such employment. (b) Upon the Member's transfer to an employee group of the Company that is not participating in the Plan. (c) As described in Section 7. -13- 20 3.4 Make-Up Member Contributions Notwithstanding any provision of the Plan to the contrary, Member Contributions with respect to qualified military service may be made in accordance with Section 414(u) of the Code. -14- 21 SECTION 4 COMPANY CONTRIBUTION 4.1 Company Contribution No Company contributions are made to the Plan. 4.2 Actual Contribution Percentage Tests The Plan shall comply with the requirements of Section 401(m)(2) and Section 401(m)(9) of the Code and the regulations thereunder, including Treas. Reg. Section 1.401(m)-1(b) and Treas. Reg. Section 1.401(m)-2, which provisions are incorporated herein by this reference. To the extent permitted by regulations, Elective Deferrals described in Section 402(g)(3) of the Code and nonelective contributions described in Paragraph 4.5 may, at the discretion of the Administrator, be taken into account in satisfying this Paragraph 4.2. 4.3 Distribution of Excess Contributions to Members (a) If the Administrator determines, in its discretion, that the allocation of Member contributions pursuant to Paragraph 3.1 to Members' Accounts for a Plan Year does not meet a requirement of Paragraph 4.2, the Administrator may reduce the allocation of such contributions to the Accounts of certain Members who are Highly Compensated Employees to the extent necessary to meet that requirement. The reduction will be accomplished by reducing allocations to the Accounts of Members who are Highly Compensated Employees in order of their Actual Contribution Percents, beginning with the Member having the highest percent until a requirement of Paragraph 4.2 is met. The total reduced amounts, adjusted by gain or loss allocable thereto for the Plan Year, will be returned by the end of the following Plan Year to Highly Compensated Employees beginning with such employees having the highest dollar amount of Elective Deferrals. -15- 22 (b) Gain or loss, for purposes of Subparagraph 4.3(a), allocated to excess aggregate contributions shall be computed under the method used by the Plan to allocate gains and losses. 4.4 Section 415 Limitations (a) In addition to other limitations set forth in the Plan and notwithstanding any other provisions of the Plan, "annual additions" made to this Plan (and all other defined contribution plans required to be aggregated with the Plan under the provisions of Section 415 of the Code) shall not exceed an amount in excess of the limit set forth in such section of the Code. For purposes of calculating such limit under Section 415 of the Code, the "limitation year" shall be the calendar year. Member contributions in excess of the contribution percent test of Paragraph 4.2 are considered annual additions even if corrected through distribution. (b) If the limitations described in Section 415(c) of the Code are exceeded for a Member for a limitation year, the excess will be eliminated as follows: (i) Provisions of any other savings plans established by the Company or a Subsidiary or Affiliate which have caused the limits to be exceeded will be applied; provided, however, that the provisions of the savings plan in which the Member is active as of the last day of the limitation year shall be applied before the provisions of the savings plan in which the Member is inactive. (ii) Amounts attributable to after tax contributions made by the Member to the Plan (or any other plan maintained by the Company or any Subsidiary or Affiliate) shall be paid to the Member. -16- 23 (iii) Amounts attributable to Elective Deferrals as described in Section 402(g)(3) of the Code made by a Member to the Plan (or any other plan maintained by the Company or a Subsidiary or Affiliate) shall be paid to the Member. (iv) The excess, if any, will be held unallocated in a suspense account. The suspense account will be applied to reduce contributions for remaining Members in the limitation year, and each succeeding limitation year, if necessary. If a suspense account is in existence at any time during the limitation year pursuant to this subparagraph, it will not participate in the allocation of the investment gains and losses. (c) If the limitations described in Section 415(e) of the Code are exceeded for a Member for a limitation year, the excess will be eliminated by applying the provisions of the defined benefit plan in which the Member participates. 4.5 Nonelective Contributions (a) The Administrator, in its sole discretion, may make a nonelective contribution to the Accounts of certain Members who are not highly compensated to the extent necessary to satisfy the requirement of Paragraph 4.2 of the Plan, or to assist the Plan or any other plan of the Company or any Subsidiary or Affiliate to satisfy the requirements of Section 410(b) of the Code. (b) A contribution under this Paragraph 4.5 shall be allocated to eligible Member's in the ratio that the Base Pay of each such Member for the Plan Year bears to the total Base Pay of all such Member's for the Plan Year. -17- 24 (c) The Company shall make contributions necessary to reinstate Members' Accounts pursuant to Paragraph 9.9 of the Plan. 4.6 Exclusive Benefit The corpus or income of the trust may not be divested to or used for other than the exclusive benefit of the Members and their beneficiaries and to defray reasonable expenses of administering the Plan. -18- 25 SECTION 5 FINANCED SHARES 5.1 Acquisition Loans CH-Twenty, Inc., by action of its President, may direct the Trustee to incur Acquisition Loans from time to time to finance the acquisition of Atlantic Richfield Company Common Stock (Financed Shares) under the ESOP Part of the Plan or to repay a prior Acquisition Loan. For this purpose, an installment obligation incurred in connection with the purchase of Atlantic Richfield Company Common Stock shall be treated as an Acquisition Loan. An Acquisition Loan shall be for a specific term, shall bear a reasonable rate of interest, and shall not be payable on demand except in the event of default. An Acquisition Loan may be secured by a pledge of the Financed Shares so acquired (or acquired with the proceeds of a prior Acquisition Loan which is being refinanced). No other assets of the Plan may be pledged as collateral for an Acquisition Loan, and no lender shall have recourse against assets of the Plan other than Financed Shares remaining subject to pledge. If the lender is a "party in interest" (as defined in Section 3(14) of ERISA), the Acquisition Loan must provide that in the event of default, assets of the Plan may be transferred to the lender only upon, and to the extent of, the failure of the Plan to meet the payment schedule of the Acquisition Loan. Any pledge of Financed Shares must provide for the release of the shares so pledged as payments on the Acquisition Loan are made by the Trustee and such Financed Shares are allocated to Members' Accounts under Paragraph 5.2. Payments of principal and/or interest on any Acquisition Loan shall be made by the Trustee, as directed by the Company, only from: (a) Company contributions, if any, paid in cash to enable the Plan to make payments on such Acquisition Loan, and earnings attributable thereto; (b) Member contributions that Members have -19- 26 directed pursuant to Paragraph 6.2 to be invested in Atlantic Richfield Company Common Stock under the ESOP Part of the Plan, and earnings attributable thereto; (c) the proceeds of any Acquisition Loan, and the earnings attributable thereto; and (d) any cash dividends received by the Plan on the Financed Shares purchased with the proceeds of such Acquisition Loan. The payments made with respect to an Acquisition Loan for a Plan Year must not exceed the sum of such Company contributions, if any, Member contributions, proceeds, earnings, and dividends for that Plan Year and prior Plan Years, as reduced by the amount applied to make such payments in prior Plan Years. As directed by CH-Twenty, Inc., the Trustee also may sell any Financed Shares that have not yet been allocated to Members' Accounts and use the proceeds from such sale to pay principal and/or interest on the Acquisition Loan used to acquire such shares. 5.2 Payments on Acquisition Loan The acquisition of Atlantic Richfield Company Common Stock with the proceeds of an Acquisition Loan may be made on the open-market, or from the Atlantic Richfield Company, in a single purchase or a series of purchases over a period of time. Prior to use for such purchase or purchases, the Acquisition Loan proceeds may be invested by the Trustee (as directed by CH-Twenty, Inc.,) in interest-bearing accounts or instruments. Interest derived therefrom shall be applied to make payments on the Acquisition Loan, or, if the Acquisition Loan has been repaid in full, shall be allocated as of the last day of the Plan Year among the Accounts of all Members who have not terminated membership pursuant to Paragraph 2.3 as of such date in proportion to their Base Pay for the Plan Year. All Financed Shares acquired by the Plan shall initially be credited to a loan suspense account, and will be allocated to the Members' Accounts only as payments on the Acquisition Loan are made. Release from the loan suspense account for allocation to Members' Accounts in each Plan Year shall be based on -20- 27 shares of stock or other non-monetary units, rather than by dollar amount, and shall not be less than the number calculated as follows: (a) The number of Financed Shares held in the loan suspense account immediately before the release in the current Plan Year shall be multiplied by a fraction, the numerator of which is the amount of principal and interest paid on the Acquisition Loan for that Plan Year, and the denominator of which is the sum of the numerator plus the total payments of principal and interest on that Acquisition Loan projected to be paid for all future Plan Years. For this purpose, the interest to be paid in future Plan Years is computed by using the interest rate in effect as of the last day of the current Plan Year. (b) In lieu of the method described in Subparagraph 5.2(a), the Company may elect (as to each Acquisition Loan) or the provisions of the Acquisition Loan may provide for the release of Financed Shares from the loan suspense account based solely on the ratio that the payments of principal for each Plan Year bear to the total principal amount of the Acquisition Loan. This method may be used only if: (i) the Acquisition Loan provides for annual payments of principal and interest at a cumulative rate that is not less rapid at any time than level annual payments of such amounts for ten years; (ii) interest included in any payment on the Acquisition Loan is disregarded only to the extent that it would be determined to be interest under standard loan amortization tables; and (iii) the entire duration of the Acquisition Loan repayment period does not exceed ten years, even in the event of a renewal, extension, or refinancing of the Acquisition Loan. As of each date that payments (other than payments with the proceeds of a new Acquisition Loan) are made on an Acquisition Loan, the Financed Shares released from the loan suspense account shall be allocated to -21- 28 Members' Accounts in proportion to the amounts debited from each Member's Account to make the Acquisition Loan payments. -22- 29 SECTION 6 INVESTMENT OF MEMBERS' ACCOUNTS 6.1 Members' Accounts The Administrator shall establish and maintain an Account in the name of each Member. Separate records shall be maintained with respect to the portion of a Member's Account attributable to Member contributions under Section 3 and earnings thereon, and the portion of a Member's Account attributable to Company contributions under the Predecessor Plan and earnings thereon. 6.2 Investment of Member Contributions Upon receipt of a Member's contributions, the Trustee shall invest such amounts among the following investment alternatives, in the proportion indicated by the Member in his or her investment directions provided to the Administrator: (a) In Atlantic Richfield Company Common Stock held under the ESOP Part of the Plan; (b) In Atlantic Richfield Company Common Stock held under the non-ESOP Part of the Plan; (c) In the Money Market Fund, consisting of specified types of fixed income investments such as deposits in interest-bearing bank accounts, certificates of deposit, corporate or governmental obligations maturing in not more than five years, financial futures contracts, deposits under a deposit administration or similar contract issued by an insurance company or in a commingled or common investment account or fund established and maintained by an investment advisor or a bank (which bank may be the Trustee) and the assets of which are invested primarily in debt obligations, -23- 30 or in any combination thereof as CH-Twenty, Inc., or a delegate thereof may determine; (d) In the Equity Fund, consisting of specified equity investments such as common or capital stock of issuers (other than the Company, Subsidiaries or Affiliates, or Lyondell Petrochemical Company or any of its Subsidiaries or Affiliates), bonds, debentures or preferred stocks convertible into common or capital stock of such issuers, financial futures contracts, interests in any commingled or common equity fund established and maintained by an investment advisor or a bank (which bank may be the Trustee), interests in any mutual fund or other similar types of equity investments and cash equivalent short-term investments maturing in less than one year, or in any combination thereof as CH-Twenty, Inc., or a delegate thereof may determine; (e) In the Bond Fund, consisting of specified types of fixed income investments, such as public obligations of the United States or foreign governments or their agencies, securitized financing or corporate bonds of issuers (other than the Company, Subsidiaries or Affiliates, or Lyondell Petrochemical Company or any of its Subsidiaries or Affiliates), debentures, financial futures contracts, interests in any commingled or common fixed income fund established and maintained by an investment advisor or bank (which bank may be the Trustee), interests in any mutual fund or other similar types of fixed income investments and cash equivalent short-term investments, or in any combination thereof as CH-Twenty, Inc., or a delegate thereof may determine; (f) In the International Equity Fund consisting of specified investments in global issuers such as common or capital stock (other than common or capital stock of the Company, Subsidiaries or Affiliates, or Lyondell Petrochemical -24- 31 Company or any of its Subsidiaries or Affiliates), preferred stocks, securities convertible into common or capital stock of such issuers, financial futures contracts, currency futures or options, forward currency contracts, interests in any commingled or common equity fund established and maintained by an investment advisor or a bank (which bank may be the Trustee), interests in any mutual fund or other similar types of equity investments and cash equivalent investments, or similar investments or in any combination thereof as CH-Twenty, Inc., or a delegate thereof may determine; or (g) In the Balanced Fund consisting of units of the Equity Fund, the International Equity Fund and the Bond Fund. The weighing of the Balanced Fund shall be approximately 45 percent Equity Fund, 15 percent International Equity Fund and 40 percent Bond Fund. A Member's directions as to the initial investment of his or her contributions shall be provided in such manner as is prescribed by the Administrator. Such directions shall remain in effect until new directions are provided to the Administrator by the Member. A Member may change the direction as to the initial investment of his or her contributions at any time by providing notice in such manner as may be prescribed by the Administrator. Any change of investment directions shall be effective with respect to contributions paid to the Trustee for pay periods beginning after the notice is received by the Administrator. 6.3 Investment of Company Contributions Except as provided under Paragraph 6.5, Company contributions transferred from the Predecessor Plan are at all times invested in Atlantic Richfield Company Common Stock under the ESOP Part of the Plan. 6.4 Funds Invested in the Money Market Fund (a) There shall be invested in the Money Market Fund: -25- 32 (i) Amounts which a Member elects to have so invested under Subparagraph 6.2(c); and (ii) On an interim basis, amounts being accumulated in a Member's Account for investment under Subparagraphs 6.2(a), (b), (d), (e), (f) and (g). (b) Subject to the requirement of Subparagraph 6.5(c), a Member may direct, once during each 15-calendar-day period, that funds invested in the Money Market Fund under Subparagraph 6.2(c) be invested in any of the other permitted alternatives; provided, that (i) only one direction whether made solely under this subparagraph, or in combination with a direction under Paragraph 6.5, may be made during a 15-calendar-day period; and (ii) a direction under this subparagraph may not be made earlier than seven days following (A) the date of receipt by the Administrator of a Member's application to make a withdrawal under Paragraph 7.1, (B) the date a loan application is made under Section 12, or (C) the date a loan repayment is made under Subparagraph 12.8(c)(i). (c) Interest shall be allocated on a monthly basis to funds held for a Member in the Money Market Fund as of the last day of a calendar month. However, such allocation shall not be made with respect to funds resulting from a conversion to cash of Atlantic Richfield Company Common Stock, Equity Fund, Bond Fund, International Equity Fund or Balanced Fund units which occurred in the calendar month in which allocation of interest is made. 6.5 Sale and Reinvestment of Common Stock, Equity Fund Units, Bond Fund Units, International Equity Fund Units or Balanced Fund Units (a) A Member may direct that shares of Atlantic Richfield Company Common Stock, other than shares purchased with Company contributions made after -26- 33 July 1, 1988, units of the Equity Fund, Bond Fund, International Equity Fund and/or Balanced Fund held in the Member's Account be converted to cash and the proceeds thereof, less any applicable expenses of sale, be invested in a different option described in Paragraph 6.2; provided, that (i) only one direction, whether made solely under this subparagraph, or in combination with a direction under Paragraph 6.4, may be made during a 15-calendar-day period; (ii) a direction under this subparagraph may not be made earlier than seven calendar days following (A) the date of receipt by the Administrator of a Member's application to make a withdrawal under Paragraph 7.1, (B) the date a loan application is made under Section 12, or (C) the date a loan repayment is made under Subparagraph 12.8(c)(i); and (iii) a Member who has attained age 55 as of the date of the direction to convert may, subject to the restrictions described in this paragraph, direct that shares of Common Stock (including Common Stock of a Subsidiary or Affiliate attributable to contributions of such companies) held in the Member's Account which are attributable to Company contributions be sold and the proceeds reinvested in one or more of the other options described in Paragraph 6.2. (b) The conversion of shares of Atlantic Richfield Company Common Stock to shares of such stock held in the ESOP Part of the Plan described in Subparagraph 6.2(a), and the conversion of shares of Atlantic Richfield Company Common Stock held in the ESOP Part of the Plan to the shares held under Subparagraph 6.2(b) of the Plan, shall be accomplished by a recharacterization of the shares, pursuant to procedures established by the Administrator; provided, that only one direction, whether made solely under this subparagraph or in combination with a direction under Paragraph 6.4, may be made during a 15-calendar-day period. -27- 34 (c) Proceeds of the conversion of shares of Atlantic Richfield Company Common Stock to cash may not be reinvested in Atlantic Richfield Company Common Stock until 15 calendar days after the date of such conversion. Proceeds of the conversion of units of the Equity Fund, Bond Fund, International Equity Fund or Balanced Fund to cash may not be reinvested in the Equity Fund, Bond Fund, International Equity Fund or Balanced Fund, as the case may be, until 15 calendar days after the date of such conversion. 6.6 Directives All elections and directions by Members concerning the investment of their Accounts shall be made in the manner prescribed by the Administrator, shall be irrevocable and shall become effective upon receipt by the Administrator. 6.7 Purchases and Sales of Atlantic Richfield Company Common Stock Purchases and sales of Common Stock of Atlantic Richfield Company shall be handled in accordance with the following rules and such additional procedures, consistent with such rules, which the Administrator may establish from time to time: (a) Purchases and sales of Common Stock of Atlantic Richfield Company pursuant to a Member's directive under Paragraph 6.4 or 6.5, or to accommodate a distribution or withdrawal pursuant to Section 7 or 8, shall be made in the open-market as follows: (i) Each Wednesday and Friday the Administrator shall execute an open-market transaction, at a time determined at the discretion of the Administrator, covering all participant directives received by the Administrator by such time as determined by the Administrator, and communicated to Members, on the preceding Company business -28- 35 day, except that if a Wednesday or Friday is a Company holiday or a day on which trading on the New York Stock Exchange is closed, the transaction will occur on the next day (a Wednesday or Friday) on which the Plan executes a transaction in the open- market. (ii) If an unforeseeable administrative difficulty prevents the execution of the open-market transaction otherwise scheduled for a Wednesday or Friday, such transaction will be executed on the first business day thereafter which does not fall within one of the two exceptions in Subparagraph 6.7(a)(i). (iii) The Administrator may, in its discretion, match the purchase and sale orders scheduled for an open-market transaction and transact the net purchase or sale, whichever the case may be. The Administrator may also agree with the Administrator of one or more other individual account plans (as described in Section 3(34) of ERISA, and which is maintained by the Company or its Subsidiaries or Affiliates, and provides for the same purchases and sales pursuant to participant directives described in Paragraphs 6.4 and 6.5) to combine and match orders from all of the plans and execute a "net" transaction, as described above. The price per share allocated to each purchase or sale order shall be the price transacted for the "net" shares on the open-market transaction date otherwise scheduled for the orders under Subparagraph 6.7(a)(i). The price transacted for a "net" transaction shall be the price obtained on the open-market in the case of a single transaction, and the weighted average of the prices obtained on the open-market in the case of multiple transactions. -29- 36 (iv) Brokerage commissions, transfer fees and other expenses actually incurred in any such sale or purchase shall be equitably allocated and added to the cost or subtracted from the proceeds of all purchases or sales, as the case may be, effected on a pricing day, whether pursuant to the netting process described in Subparagraph 6.7(a)(iii), or pursuant to actual separate transactions per Member order. (b) Purchases of Common Stock of Atlantic Richfield Company with Member's Elective Deferrals or Company contributions under Sections 3 and 4: (i) Purchases shall normally be made either in the open-market or from Atlantic Richfield Company, at prices to the Plan not in excess of the fair market value of such Atlantic Richfield Company Common Stock on the date of purchase thereof, as determined by the Trustee. (ii) Allocations to Members' Accounts will be made in full and fractional shares. (iii) The Trustee may limit the daily volume of purchases to the extent it believes such action to be in the best interests of the Members. When Atlantic Richfield Company Common Stock is purchased, the cost charged to the Accounts of Members affected by such purchase shall be determined on an equitable basis in accordance with rules to be adopted by the Administrator and incorporating the following principles: (A) The cost charged to each affected Member's Account shall be based on the average cost per share of all Atlantic Richfield -30- 37 Company Common Stock purchased during whatever period may be established by the Administrator. (B) Brokerage commissions, transfer fees and other expenses actually incurred in any such purchase shall be added to the cost of any such purchase. (c) A Member may direct the Administrator to use any available cash or funds held for the Member under Subparagraph 6.2(c) to exercise any options, rights or warrants issued with respect to Atlantic Richfield Company Common Stock in the Member's Account. In the absence of such direction, or if there are no available funds, any such option, right or warrant having a market value shall be sold for the Member's Account. 6.8 Voting of Atlantic Richfield Company Common Stock (a) The Trustee shall vote whole shares of Atlantic Richfield Company Common Stock credited to each Member's Account in accordance with such Members' written instructions. Fractional shares of Atlantic Richfield Company Common Stock shall be aggregated into whole shares of stock and voted by the Trustee, to the nearest whole vote, in the same proportion as shares are to be voted by the Trustee pursuant to Members' written instructions. In the absence of voting instructions by one or more Members, the Trustee shall vote uninstructed shares, to the nearest whole vote, in the same proportion as shares are to be voted by the Trustee pursuant to Members' written instructions. The Trustee shall vote unallocated shares, to the nearest whole vote, in the same proportion as allocated shares are to be voted by the Trustee pursuant to Members' written instructions. (b) The Trustee shall exercise rights other than voting rights attributable to whole shares of Atlantic Richfield Company Common Stock credited to -31- 38 each Member's Account in accordance with such Members' written instructions. Rights attributable to fractional shares of Atlantic Richfield Company Common Stock (which for this purpose shall be aggregated into whole shares of stock) shall be exercised by the Trustee in the same proportion as rights which are exercised by the Trustee pursuant to Members' written instructions. In the absence of instructions by one or more Members, the Trustee shall exercise uninstructed rights in the same proportion as rights which are to be exercised by the Trustee pursuant to Members' written instructions. The Trustee shall exercise rights attributable to unallocated shares in the same proportion as rights attributable to allocated shares which are to be exercised by the Trustee pursuant to Members' written instructions. (c) The Trustee shall notify the Members of each occasion for the exercise of voting rights and rights other than voting rights within a reasonable time before such rights are to be exercised. This notification shall include all the information that Atlantic Richfield Company distributes to shareholders regarding the exercise of such rights. 6.9 Title of Investments All investments will be held in the name of the Trustee or its nominees. 6.10 Allocation of Trust Earnings and Valuation of Trust Investments (a) Any cash dividends declared on Atlantic Richfield Company Common Stock held in a Member's Account under the ESOP Part of the Plan as of the record date for the dividend shall be paid in cash to the Member (or, in the event of death, to the Member's beneficiary) on, or as soon as possible following, the payment date for the dividend. -32- 39 (b) Any cash dividends declared on Atlantic Richfield Company Common Stock held in a loan suspense account as of the record date for the dividend shall be used to make payments on the Acquisition Loan used to acquire the shares of stock held in such account. (c) Except as provided in Subparagraphs 6.10(a) and (b), all dividends or other distributions attributable to shares of Atlantic Richfield Company Common Stock shall be allocated to the Account of the Member whose Account is credited with such shares. (d) On the last day of each month, all income attributable to the Money Market Fund shall be allocated to the Member's Account in the ratio that each Member's Money Market Fund Account balance bears to such account balance of all such Members. For the purpose of determining such allocation, the Money Market Fund shall be valued at fair market value. 6.11 Purchase and Redemption of the Equity Fund, Bond Fund, International Equity Fund and Balanced Fund Units Purchase and redemption of the Equity Fund, Bond Fund, International Equity Fund and Balanced Fund units shall be handled in accordance with the following rules and such additional procedures, consistent with such rules, as the Administrator may establish from time to time: (a) Units of the Equity Fund, Bond Fund, International Equity Fund and Balanced Fund shall be purchased or redeemed, pursuant to Member directions under Paragraph 6.5, on each Wednesday and Friday, covering all Member directives received by the Administrator by such time as determined by the Administrator, and communicated to Members, on the preceding Company business day, except that if a Wednesday or Friday is a Company holiday or a day on which trading on the New York Stock -33- 40 Exchange is closed, the purchase or redemption will be executed on the next day (a Wednesday or Friday) on which the Plan executes a transaction under this Subparagraph 6.11(a). (b) If an unforeseeable administrative difficulty prevents the execution of a transaction under Subparagraph 6.11(a), otherwise scheduled on a Wednesday or Friday, such transaction will be executed on the first business day thereafter which does not fall within one of the two exceptions in Subparagraph 6.11(a). (c) The Administrator may, in its discretion, combine the purchase and redemption orders scheduled for a Wednesday or Friday and transact the net purchase or sale orders, whichever the case may be. The Administrator may also agree with the Administrator of one or more individual account plans [as described in Section 3(34) of ERISA, and which is maintained by the Company or its Subsidiaries or Affiliates, and provides for the same purchase and redemption procedure described in Subparagraph 6.11(a)], to combine orders from all of the plans and execute a "net" transaction. (d) When units of the Equity Fund, Bond Fund, International Equity Fund and Balanced Fund are purchased or redeemed, the cost or net proceeds charged or credited to the Accounts of Members affected by such purchase or redemption shall be determined on an equitable basis in accordance with rules to be adopted by the Administrator, which are consistent with the rules described in this section, and incorporate the following principles: (i) The net proceeds of any such redemption of fund units in a Member's Account shall be credited to such Member's Account. -34- 41 (ii) The cost of any such purchase of fund units for a Member's Account shall be charged to such Member's Account. (iii) The net proceeds and cost of fund units shall be based on the net asset value of such units determined on the valuation date next following the date the purchase or redemption order is received by the Administrator. The valuation date shall be determined by the Administrator and shall occur on at least a weekly basis. The net asset value of fund units will be calculated by dividing the difference between the value of the fund assets and fund liabilities by the number of units outstanding with respect to each fund. (iv) Brokerage commissions, transfer fees and other expenses actually incurred in any such purchase or redemption shall be added to the cost or subtracted from the gross proceeds, of any such purchase or redemption, respectively. (e) Income earned by the Equity Fund, Bond Fund and International Equity Fund shall automatically be reinvested in the Equity Fund, Bond Fund and International Equity Fund, as the case may be. Income, gains and losses shall be reflected in the net asset value of the units of the Equity Fund, Bond Fund and International Equity Fund. 6.12 Voting of the Money Market Fund, Equity Fund, Bond Fund and International Equity Fund Investments The Trustee, in accordance with the Trust Agreement, shall exercise all voting and other rights associated with any investments held in the Money Market Fund, Equity Fund, Bond Fund and International Equity Fund. -35- 42 6.13 Investment Advisory Fees The investment advisory fees, if any, incurred for management of the Money Market Fund, Equity Fund, Bond Fund, International Equity Fund and Balanced Fund are charged to each respective fund. 6.14 Member Protection No shares of Atlantic Richfield Company Common Stock held by the ESOP Part of the Plan may be subject to a put, call or other option, or buy/sell or similar arrangement. The provisions of this Paragraph 6.14 shall continue to be applicable to the shares of Atlantic Richfield Company Common Stock held by the ESOP Part of the Plan even if such part ceases to be an Employee Stock Ownership Plan under Section 4945(e)(7) of the Code. 6.15 Confidentiality The Savings Plan Administrative Committee shall be responsible for ensuring the adequacy of procedures established by the Administrator to safeguard the confidentiality of information relating to the purchasing, holding and selling of Atlantic Richfield Company Common Stock and any voting, tender or similar rights relating to such stock. -36- 43 SECTION 7 WITHDRAWALS DURING EMPLOYMENT 7.1 Partial Withdrawals (a) An application for partial withdrawal of funds must be in the form prescribed by the Administrator. Distribution will be made as soon as practicable after the date the application is received by the Administrator. (b) A Member may make the following partial withdrawals during employment with the Company; provided, that (i) partial withdrawals under this Paragraph 7.1 are made at not less than six month intervals and not earlier than seven calendar days following (A) the date of a direction under Paragraph 6.4 or 6.5; (B) the date of an application for a loan under Section 12; or (C) the date of an accelerated repayment of a loan under Paragraph 12.8(c)(i), and (ii) Member contributions made prior to January 1, 1987, must be withdrawn prior to withdrawal of any other contributions and earnings: (1) Items in the Member's Account derived from Member contributions made prior to January 1, 1987; (2) Items in the Member's Account derived from earnings on Member contributions made prior to January 1, 1987. If such items were not in the Account for at least two years on the preceding December 31, the Member's future contributions to the Plan shall be suspended for six months; (3) All items in the Member's Account derived from Member contributions and earnings thereon. If a Member makes a withdrawal under this subparagraph, all Member contributions and -37- 44 earnings thereon shall be distributed to the Member, and the Member's future contributions to the Plan shall be suspended for six months; (4) Except for Company contributions under the Predecessor Plan made after June 30, 1988, and earnings thereon, and items referenced in Subparagraph 7.1(b)(5), items in the Member's Account derived from Company contributions and earnings thereon. 7.2 Irrevocability of Election An election to make a partial withdrawal shall be irrevocable upon receipt by the Administrator. -38- 45 SECTION 8 PAYMENTS ON TERMINATION OF COMPANY EMPLOYMENT, DIVORCE OR OTHER REASONS 8.1 Termination of Membership (a) If a Member's membership in the Plan is terminated due to disability, termination of employment for any other reason except death, or as the result of a sale described in Subparagraph 2.3(b) or (c), the Member shall receive all items in the Member's Account. Each Member shall be fully vested at all times in all items in the Member's Account, whether the same be derived from his or her own contributions, Company contributions, or earnings on either. (b) Upon the election of the Member who has terminated employment, all items in a Member's Account shall be distributed to the Member. With respect to a Member who does not request a distribution: (i) Notwithstanding anything to the contrary in this Paragraph 8.1 and subject to the provisions of Paragraph 8.7, a Member's Account shall be distributed no later than age 65, or, if later, 12 months following termination of membership under Subparagraph 8.1(a); (ii) In the case of the Member's death prior to final distribution, the Member's Account shall be distributed in accordance with Paragraph 8.2 of the Plan; and (iii) No loans or hardship withdrawals may be taken following termination of employment or disability. -39- 46 (c) Notwithstanding anything to the contrary in this Paragraph 8.1, all items in the Account of a Member who has terminated employment, and whose Account balance is $3,500 or less, shall be distributed 12 months following the Member's termination of membership, unless the Member elects an earlier distribution date. (d) Notwithstanding anything in the Plan to the contrary, when a Member elects to receive all items in the Member's Account and, in conjunction therewith, directs that items in his or her Account be converted pursuant to Paragraph 6.4 or 6.5, the conversion shall be transacted on the first transaction date under the Plan following the Administrator's receipt of a request for distribution. 8.2 Death (a) If a Member dies, or a former Member dies while awaiting receipt of a distribution pursuant to Paragraph 8.1, and it is established to the Plan's satisfaction that the consent required under Subparagraph 8.2(c), either has been obtained or was not obtainable, all items in the Member's or former Member's Account shall be paid to the beneficiary or beneficiaries most recently designated by the Member or former Member in such manner as prescribed by the Administrator. If no such designation shall have been made, or if all designated beneficiaries should die before the Member or former Member, payment shall be made to the Member's or former Member's estate. (b) Except as provided in Subparagraph 8.2(c), if a Member or former Member is survived by a spouse, all items in the Member's or former Member's Account shall be paid to the Member's or former Member's spouse. -40- 47 (c) If a Member or former Member is survived by a spouse, all items in a Member's or former Member's Account shall be paid to the beneficiary or beneficiaries most recently designated by the Member or former Member in such manner as prescribed by the Administrator; provided, (i) the surviving spouse of the Member or former Member has irrevocably consented in writing to the designation of the specific beneficiary or beneficiaries, which designation may not be changed without spousal consent (or the spouse expressly permits designation by the Member or former Member without any further spousal consent), such consent acknowledged the effect of the election and such consent was witnessed by a notary public, or (ii) it is established to the Plan's satisfaction that the consent required by Subparagraph 8.2(c)(i), could not be obtained because the surviving spouse could not be located or because of such other circumstances as the Secretary of Treasury may by regulation prescribe. Any consent necessary under this paragraph shall be effective only with respect to such spouse, or, in the event it is established that the consent may not be obtained, such designated spouse. A revocation of a prior designation may be made by a Member without the consent of the spouse at any time prior to the Member's death. A consent that permits designation by the Member or former Member without any requirement for further consent by the spouse must acknowledge that the spouse has the right to limit consent to a specific beneficiary and that the spouse voluntarily elects to relinquish such right. (d) Any payment made under this paragraph on account of a Member's death shall be made no later than 90 days following the close of the Plan Year in which the Plan receives certification of the Member's death. -41- 48 8.3 Disability Disability means a medically determinable physical or mental impairment resulting from illness or injury as a result of which the Member is unable to perform one or more of the substantial duties of the Member's normal work assignment with the Company or of any work assignment which the Company determines is available to the Member and for which the Member is reasonably qualified by education, training or experience to perform as determined by the Administrator after review by the Medical Board or such other entity as designated by the Administrator. 8.4 Divorce To the extent specified in a Qualified Domestic Relations Order, as defined in Section 414(p) of the Code, distributions from a Member's Account may be made to an Alternate Payee, as defined in Section 414(p) of the Code, prior to the Member's termination of membership under Subparagraph 8.1(a), death, disability or retirement. Distributions under this paragraph shall be made at the time set forth in the Qualified Domestic Relations Order, or, if such order provides, at the time elected by the Alternate Payee. 8.5 Rollover (a) Notwithstanding anything in this Section 8 to the contrary, a distributee, as defined below may elect, at a time and in the manner prescribed by the Administrator, to have all or a portion of a distribution under this Section 8, other than any amount required to be distributed pursuant to Section 401(a)(9) of the Code, made payable to an eligible retirement plan. (b) For purposes of this Section 8, other than Paragraph 8.2, an eligible retirement plan is an individual retirement account or annuity described in Section 408(a) or (b) of the Code, an annuity plan described in Section 403(a) of the Code or a qualified trust described in Section 401(a) of the Code that accepts such -42- 49 distribution. For purposes of a distribution under Paragraph 8.2, an eligible retirement plan is an individual retirement account or annuity. (c) Distributee means an Employee or former Employee, the surviving spouse of such Employee or such Employee's spouse or former spouse who is an alternate payee as defined in Section 414(p) of the Code. 8.6 Notice With respect to a Member whose account exceeds $3,500, the Administrator shall provide the notice required by Section 1.411(a)-11(c) of Income Tax Regulations no less than 30 days and no more than 90 days before the Member's date of distribution; provided, however, that such distribution may commence less than 30 days after the required notice is given if: (a) The Member is informed of the Members' right to a period of at least 30 days after receiving the notice to consider distribution options; and (b) The Member, after receiving the notice, affirmatively elects a distribution. 8.7 Distributions Notwithstanding anything in the Plan to the contrary, a Member's Account shall be distributed in a lump sum, no later than the first day of April following the calendar year in which the Member attains age 70-1/2. Any amounts subsequently allocated to a Member's Account shall be distributed during the calendar year immediately following the year of allocation. 8.8 Distribution of Benefits The distribution of benefits under the Plan to a Member who has elected to receive such benefits shall begin not later than the 60th day after the latest of the close of the Plan Year in which (a) the Member attains age 65 or such earlier normal -43- 50 retirement age as may be specified in the Plan; (b) there occurs the tenth anniversary of the year in which the Member commenced membership in the Plan; or (c) the Member's service with the Company is terminated. -44- 51 SECTION 9 ADMINISTRATION SAVINGS PLAN ADMINISTRATIVE COMMITTEE 9.1 Savings Plan Administrative Committee The Plan shall be administered by a Savings Plan Administrative Committee. The Committee shall consist of the Senior Vice President, Human Resources, of Atlantic Richfield Company, who shall serve as Chairperson, and not less than two other persons appointed by the Chairperson. Members of the Committee shall serve without compensation. Vacancies shall be filled by the Chairperson or the Chairperson's delegate. 9.2 Rules of Conduct The Savings Plan Administrative Committee shall adopt such rules for the conduct of its business and administration of the Plan as it considers desirable; provided, they do not conflict with the Plan. 9.3 Legal, Accounting, Clerical The Savings Plan Administrative Committee may authorize one or more of its members or any agent to act on its behalf and may contract for legal, accounting, clerical and other services to carry out this Plan. Unless paid by the Company, all expenses of the Company, the Administrator and the Plan shall be paid by the Plan, to the extent they constitute reasonable expenses of administering the Plan. The Plan may reimburse expenses paid directly by the Company or its designee. This provision shall be deemed a part of any contract to provide for expenses of Plan administration, whether or not the signatory to such contract is, as a matter of convenience, the Company or its designee. -45- 52 9.4 Interpretation of Provisions The Savings Plan Administrative Committee shall have full discretion and final authority to determine eligibility for benefits and to interpret the provisions of this Plan, to decide questions arising in its administration, and to establish such other rules for its administration as may be desirable. 9.5 Records of Administration The Savings Plan Administrative Committee shall keep records reflecting the administration of the Plan which shall be subject to audit by the Company. Members may examine records pertaining directly to themselves. At least annually, the Savings Plan Administrative Committee shall have mailed to each Member a statement of his or her Account and such statement shall be deemed to have been accepted as correct for all purposes of this Plan unless written notice to the contrary is received by the Savings Plan Administrative Committee or the Trustee within 30 days after the date of mailing. 9.6 Claims for Benefits Applications for benefits must be made in such manner as prescribed by the Administrator. The Administrator shall have full discretion and final authority to determine eligibility for benefits and to construe the terms of the Plan in acting upon an initial application for benefits or an appeal of a denial of an application for benefits. Each application shall be acted upon and approved or disapproved within 90 days following its receipt by the Administrator. In the event special circumstances require an extension of time for reviewing the initial application for benefits, the Administrator shall make a determination as soon as practicable but no later than 180 days following receipt of the application. If any application for benefits is denied, in whole or in part, the Administrator shall notify the applicant in writing of such denial and of the applicant's right to a review by the Administrator and shall set forth in a manner calculated to be understood by the applicant, specified reasons for such denial, specific references to pertinent Plan provisions -46- 53 on which the denial is based, a description of any additional material or information necessary for the applicant to perfect the application, an explanation of why such material or information is necessary, and an explanation of the Plan's review procedure. Any person, or a duly authorized representative thereof, whose application for benefits is denied in whole or in part, may appeal from such denial to the Administrator for a review of the decision by submitting to the Administrator within 60 days after receiving notice of denial, a written statement: (a) Requesting a review of the application for benefits by the Administrator; (b) Setting forth all of the grounds upon which the request for review is based and any facts in support thereof; and (c) Setting forth any issues or comments which the applicant deems relevant to the application. The Administrator shall act upon each such appeal application within 60 days after the later of receipt of the applicant's request for review by the Administrator or receipt of any additional materials reasonably requested by the Administrator from such applicant. In the event special circumstances require an extension of time for reviewing the appeal, the Administrator shall make a determination as soon as practicable but no later than 120 days following receipt of the appeal. The Administrator shall make a full and fair review of each such application and any written materials submitted by the applicant or the Company in connection therewith and may require the Company or the applicant to submit within 30 days of written notice by the Administrator therefor, such additional facts, documents, or other evidence as the Administrator, in its sole discretion, deems necessary or -47- 54 advisable in making such a review. The Administrator shall have full discretion in making an independent determination of the applicant's eligibility for benefits under the Plan and shall have full discretion to construe the terms of the Plan in making its review. The decision of the Administrator on any application for benefits shall be final and conclusive upon all persons. If the Administrator denies an application in whole or in part, the Administrator shall give written notice of its decision to the applicant setting forth in a manner calculated to be understood by the applicant the specific reasons for such denial and specific references to the pertinent Plan provisions on which the Administrator's decision was based. 9.7 Liability of Committee No member of the Savings Plan Administrative Committee may be liable for any action taken in good faith or for the exercise of any power given the Savings Plan Administrative Committee, or for the actions of other members of said Committee unless and except to the extent that such liability is imposed under law as a result of a breach by such member of his or her fiduciary responsibilities. 9.8 Medical Board The Savings Plan Administrative Committee may appoint a Medical Board consisting of not less than three physicians, who shall be authorized to make, or have made, any physical or mental examinations required or authorized by the Administrator or by the provisions of this Plan. 9.9 Unlocated Member If the Committee is unable, after reasonable and diligent effort, to locate a Member or beneficiary entitled to payment under the Plan, such payment may be forfeited and used to pay Plan expenses. If the Member or beneficiary later files a claim for benefit, such benefit will be reinstated. -48- 55 9.10 Legal Representative The Savings Plan Administrative Committee shall act on behalf of the Plan with respect to any claim or cause of action, whether arising in the course of administrative or judicial proceedings or otherwise, and shall be responsible for initiating, pursuing and defending any such claim or cause of action involving the Plan. -49- 56 SECTION 10 AMENDMENTS, DISCONTINUANCE, LIABILITIES 10.1 Amendment of Plan This Plan may be amended by the Board of Directors of CH-Twenty, Inc. if, as amended, it continues to be for the exclusive benefit of Employees. However, no amendment shall reduce the Account of any Member as of the date of such amendment. 10.2 Termination CH-Twenty, Inc. intends to continue the Plan indefinitely but reserves the right to terminate it at any time, by action of its Board of Directors. If the Plan is terminated, or if there is a complete discontinuance of contributions under the Plan by the Company, all amounts credited to Accounts of Members shall be held for distribution as provided in Sections 7 and 8. 10.3 Liability of Company The Company shall have no liability for payments under the Plan. Any payments under the Plan shall be made solely from the fund held by the Trustee. -50- 57 SECTION 11 MISCELLANEOUS 11.1 Employment This Plan shall not give any Member any right to be continued in the employment of the Company. 11.2 Benefits Not Assignable Except as provided in Paragraph 8.4, no benefit under the Plan shall be assignable or transferable in whole or in part, either directly or by operation of law or otherwise, and shall not be subject to attachment or other process. 11.3 Discharge of Liability If the Administrator deems any person incapable of receiving benefits to which such person is entitled under the Plan, by reason of minority, illness, infirmity, mental incompetency or other incapacity, it may direct the Trustee to make payment (other than United States savings bonds to which such person may be entitled) directly for the benefit or the account of such person or to any eligible person selected by the Administrator to disburse such payment whose receipt shall be a complete settlement therefor. Where such incapacitated person is entitled to a distribution of any United States savings bond, the distribution or redemption of such bond shall be made or effected in accordance with the government regulations applicable under the circumstances. 11.4 Governing Laws The Plan shall be governed by and construed in accordance with federal laws governing employee benefit plans qualified under the Code or with the laws of the State of Delaware, to the extent not preempted by federal law. -51- 58 11.5 Limitation on Mergers This Plan may not merge or consolidate with, or transfer any of its assets or liabilities to, any other plan unless each Member in the Plan would, if said other plan were to terminate, receive a benefit immediately after the merger, consolidation or transfer which is equal to, or greater than, the benefit such Member would have been entitled to receive immediately before the merger, consolidation or transfer if the Plan had terminated. 11.6 Delegation of Fiduciary or Administrative Responsibilities CH-Twenty, Inc., by resolution of its Board of Directors or by written action of any officer generally or specifically named by such a resolution to take such an action, and the Savings Plan Administrative Committee, by resolution of said Committee, may at any time delegate to any other named person or body, or reassume therefrom, any of their respective fiduciary responsibilities or administrative duties with respect to the Plan, including the power to delegate and reassume such responsibilities and duties by written action naming the person or body to whom the responsibility has been delegated. However, only the immediate delegate of CH-Twenty, Inc. or of the Savings Plan Administrative Committee, as the case may be, may, if so authorized by CH-Twenty, Inc. or said Committee, delegate any such responsibilities or duties. 11.7 Named Fiduciary The named fiduciary with respect to the Plan is CH-Twenty, Inc. except that (a) as to any matter specified in the Plan as being the responsibility or function of the Savings Plan Administrative Committee, the named fiduciary is said Committee, (b) as to any matter specified in the Plan or in the trust agreement as being the responsibility or function of the Trustee or Investment Officer of Atlantic Richfield Company, the named fiduciary is the Trustee or such Investment Officer, as the case may be, and as to any matter specified in the Plan as being the responsibility -52- 59 or function of the President of CH-Twenty, Inc., the named fiduciary is such President. 11.8 Transferred Funds (a) Predecessor Plan Assets (i) Assets transferred on behalf of a Member to this Plan from the Predecessor Plan shall be invested in the same manner as such assets were invested under the Predecessor Plan as of the transfer date. (ii) The assets transferred on behalf of a Member to this Plan from the Predecessor Plan shall continue to be invested as described in Subparagraph 11.8(a)(i) until the Member directs reinvestment of such assets pursuant to Paragraph 6.4 or 6.5 of the Plan. (b) Savings Plan Assets of a Subsidiary or Affiliate Upon the transfer of an Employee eligible to participate in this Plan from a Subsidiary or Affiliate, other than Atlantic Richfield Company, any assets maintained under a savings plan of such Subsidiary or Affiliate on behalf of such Employee will be transferred to this Plan in the same investment alternative under which held as of the transfer date, and such transferred assets will be subject to the reinvestment provisions under Paragraph 6.4 or 6.5, except as provided in the following special conditions: (i) Any assets transferred on behalf of a Member which have been invested in Common Stock of a Subsidiary or Affiliate, other than Atlantic Richfield Company, in the subaccount attributable to the Member's contributions under the savings plan of such Subsidiary or Affiliate will remain so invested, with future dividends being reinvested in such stock under the Member's Account, absent the -53- 60 Member's direction to reinvest such assets pursuant to Paragraph 6.5 of the Plan; provided, however, that any assets converted from the Common Stock of a Subsidiary or Affiliate to another investment alternative under the Plan may not be reinvested in Common Stock of a Subsidiary or Affiliate. (ii) Any assets transferred on behalf of a Member which have been invested in the Common Stock of a Subsidiary or Affiliate, other than Atlantic Richfield Company, in the subaccount attributable to Company contributions under the savings plan of such Subsidiary or Affiliate, will remain so invested, with future dividends being reinvested in such stock under the Member's Account; provided, however, that the Member may elect to convert such assets to Atlantic Richfield Company Common Stock held under the ESOP Part of the Plan and any assets so converted may not be reinvested in the Common Stock of a Subsidiary or Affiliate. (iii) Common Stock of a Subsidiary or Affiliate held by the Plan shall be subject to the sales and voting provisions of Section 6. -54- 61 SECTION 12 LOANS TO MEMBERS 12.1 General A Member may borrow from his or her Account in accordance with the terms and conditions set forth in this Section 12 and such additional rules, consistent with such terms and conditions, which the Administrator may establish from time to time. 12.2 Eligibility To be eligible to apply for and receive a loan, the Member must be in receipt of regular earnings. The loan shall be irrevocable upon the earlier of: (a) Endorsement of the check representing the loan proceeds; or (b) Expiration of ten days from issuance of such check. 12.3 Loan Amount (a) The maximum loan shall be the greater of (i) or (ii), below: (i) The lesser of $10,000 or the value of the Member's Account (excluding United States Savings Bonds); or (ii) The lesser of one half of the Member's Account (excluding United States Savings Bonds), or $50,000. (b) A loan must be in cash, in increments of $100 and in an amount not less than $1,000. -55- 62 (c) The maximum loan amount shall be reduced to the extent necessary to prevent each installment of the loan repayment, including principal and interest, when added to installments under any outstanding loan under the CH-Twenty, Inc. Capital Accumulation Plan from exceeding 25 percent of a Member's biweekly Base Pay. (d) The $50,000 maximum loan amount shall be reduced by the highest outstanding balance of any loan during the 12 months preceding the date of the loan application. (e) The value of Common Stock, the Equity Fund, the International Equity Fund, the Bond Fund and the Balanced Fund for purposes of Subparagraph 12.3(a), will be determined on the sale date, pursuant to Paragraph 6.7 or 6.11, immediately preceding the date the loan application is received by the Administrator. 12.4 Frequency (a) A Member may have such number of loans outstanding at any time as shall be determined by the Administrator. (b) A loan application may be submitted only once during any 15-day period and a loan application may not be submitted earlier than seven days following receipt by the Administrator of a Member's application to make a purchase or sale under Paragraph 6.5 or a partial withdrawal under Paragraph 7.1. (c) A loan application may not be submitted earlier than 15 days following repayment of a previous loan under the Plan or the CH-Twenty, Inc. Capital Accumulation Plan. -56- 63 12.5 Interest Rate A loan shall bear interest at a rate established and communicated by the Savings Plan Administrative Committee to provide the Plan with a rate of return commensurate with prevailing interest rates charged on similar commercial loans by persons in the business of lending money. 12.6 Security (a) Each loan must be evidenced by a loan agreement executed by the Member for the amount of the loan, including principal and interest, payable to the order of the Trustee. (b) The security for the loan shall be the assignment to the Trustee of the Member's right and interest in that portion of the Member's Account which equals the amount of the loan plus accrued but unpaid interest. 12.7 Funding of the Loan (a) The Member shall direct, on a form prescribed by the Administrator, which assets shall be used to provide the loan proceeds; provided, however, that Company contributions made after June 30, 1988, that are applied under the ESOP Part of the Plan, and earnings thereon, may not be used to fund a loan. To the extent the Member does not give such directions, the loan will be funded in accordance with procedures established by the Administrator. (b) The value of Common Stock, the Equity Fund, the International Equity Fund, the Bond Fund and the Balanced Fund sold to provide the loan proceeds shall be determined on the sale date, pursuant to Paragraph 6.7 or 6.11, immediately following the date the loan application is received by the Administrator. -57- 64 12.8 Repayment of Loan (a) As determined by the Member, but subject to the restriction in Subparagraph 12.3(c), a loan may be repaid over a period of one, two, three, four or five years or, in the case of a loan used to acquire the Member's principal residence, such longer term as determined by the Administrator and permitted under Section 72(p) of the Code. (b) Principal and interest shall be amortized, on a level basis, over the term of the loan. (c) Except as provided below, payments shall be made by means of payroll deductions, the authorization of which shall be irrevocable. (i) The loan may be repaid in full at any time without penalty. (ii) If a Member is not in receipt of regular earnings sufficient to permit repayment of the loan, repayment shall be made by means prescribed by the Administrator. Repaid principal and interest shall be credited to the Member's Money Market Fund account. 12.9 Deemed Distribution A distribution of the unpaid principal shall be deemed to have been made to the Member, if the Member: (a) Separates from service for any reason, including retirement, termination of employment, divestiture or death. The deemed distribution shall occur upon the earlier of 12 months following termination of membership or the date the loan was due. -58- 65 (b) Fails to make repayment under Subparagraph 12.8(c)(ii) for a period of seven consecutive scheduled payment dates. (c) Fails to receive regular earnings sufficient to permit repayment of the loan for more than seven consecutive pay periods. 12.10 Default If the Member is not in receipt of regular earnings sufficient to permit repayment of the loan for a period exceeding seven consecutive pay periods, and other arrangements acceptable to the Administrator have not been agreed to by the Member, the loan will be deemed in default and the Administrator will realize on the security in accordance with applicable laws. -59- 66 SECTION 13 TOP HEAVY PROVISIONS If the Plan is or becomes Top Heavy in any Plan Year, the provisions of this Section 13 will supersede any conflicting provisions in the Plan. 13.1 Definitions (a) Key Employee means an Employee, former Employee or an Employee's beneficiary who at any time during the determination period is: (i) An officer of the Company who has annual Compensation greater than 50 percent of the amount in effect under Section 415(b)(1)(A) of the Code for the Plan Year; (ii) One of the ten Employees owning (or considered as owning within the meaning of Section 318 of the Code) the largest interest in the Company; provided, such Employee's annual Compensation from the Company exceeds the dollar limitation under Section 415(c)(1)(A) of the Code. If two or more Employees have the same ownership interest, the Employee with the greater annual Compensation from the Company for the Plan Year shall be considered to own the larger interest in the Company; (iii) A five percent owner of the Company; or (iv) A one percent owner of the Company who has annual Compensation from the Company of more than $150,000. The determination period of the Plan is the Plan Year containing the Determination Date and the four preceding Plan Years. -60- 67 The determination of who is a Key Employee will be made in accordance with Section 416(i)(1) of the Code and the regulations thereunder. (b) Top Heavy Plan: For any Plan Year the Plan is Top Heavy if any of the following conditions exist: (i) If the Top Heavy Ratio for this Plan exceeds 60 percent and this Plan is not part of any Required Aggregation Group or Permissive Aggregation Group of plans; (ii) If this Plan is a part of a Required Aggregation Group of plans (but which is not part of a Permissive Aggregation Group) and the Top Heavy Ratio for the group of plans exceeds 60 percent; or (iii) If this Plan is a part of a Required Aggregation Group of plans and part of a Permissive Aggregation Group and the Top Heavy Ratio for the Permissive Aggregation Group exceeds 60 percent. (c) Top Heavy Ratio (i) If the Company maintains one or more defined contribution plans (including any Simplified Employee Pension Plan) and the Company has not maintained any defined benefit plan which during the five- year period ending on the Determination Date(s) has or has had accrued benefits, the Top Heavy Ratio for this plan alone or for the Required or Permissive Aggregation Group as appropriate is a fraction, the numerator of which is the sum of the account balances of all Key Employees as of the Determination Date(s) [including any part of any account -61- 68 balance distributed in the five-year period ending on the Determination Date(s)], and the denominator of which is the sum of all account balances [including any part of any account balance distributed in the five-year period ending on the Determination Date(s)], both computed in accordance with Section 416 of the Code and the regulations thereunder. Both the numerator and denominator of the Top Heavy Ratio are adjusted to reflect any contribution not actually made as of the Determination Date, but which is required to be taken into account on that date under Section 416 of the Code and the regulations thereunder. (ii) If the Company maintains one or more defined contribution plans (including any Simplified Employee Pension Plan) and the Company maintains or has maintained one or more defined benefit plans which during the five-year period ending on the Determination Date(s) has or has had any accrued benefits, the Top heavy Ratio for any Required or Permissive Aggregation Group as appropriate is a fraction, the numerator of which is the sum of account balances under the aggregated defined contribution plan or plans for all Key Employees, determined in accordance with Subparagraph 13.1(c)(i), and the Present Value of accrued benefits under the aggregated defined benefit plan or plans for all Key Employees as of the Determination Date(s), and the denominator of which is the sum of the account balances under the aggregated defined contribution plan or plans for all Members, determined in accordance with Subparagraph 13.1(c)(i), and the Present Value of accrued benefits under the defined benefit plan or plans for all Members as of the Determination Date(s), all determined in accordance with Section 416 of the Code and the regulations thereunder. The accrued benefits under a defined benefit plan in both the numerator and denominator of the Top Heavy Ratio are adjusted for any distribution of an accrued benefit made in the five-year period ending on the Determination Date. -62- 69 (iii) For purposes of Subparagraphs 13.1(c)(i) and (c)(ii), the value of account balances and the Present Value of accrued benefits will be determined as of the most recent Valuation Date that falls within or ends with the 12-month period ending on the Determination Date except as provided in Section 416 of the Code and the regulations thereunder for the first and second Plan Years of a defined benefit plan. The account balances and accrued benefits of a Member (A) who is not a Key Employee but who was a Key Employee in a prior year, or (B) effective January 1, 1985, who has not been credited with at least one Hour of Service with a Company maintaining the Plan at any time during the five-year period ending on the Determination Date will be disregarded. The calculation of the Top Heavy Ratio, and the extent to which distributions, rollovers and transfers are taken into account will be made in accordance with Section 416 of the Code and the regulations thereunder. Deductible Employee contributions will not be taken into account for purposes of computing the Top Heavy Ratio. When aggregating plans, the value of account balances and accrued benefits will be calculated with reference to the Determination Dates that fall within the same calendar year. (iv) The accrued benefit of a Member other than a Key Employee shall be determined under the method, (A) if any, that uniformly applies for accrual purposes under all defined benefit plans maintained by the Company, or (B) absent such method, as if such benefits accrued not more rapidly than the slowest accrued rate permitted under the fractional rule of Section 411(b)(1)(C) of the Code. (d) Permissive Aggregation Group: The Required Aggregation Group of plans plus any other plan or plans of the Company which, when considered as a -63- 70 group with the Required Aggregation Group, would continue to satisfy the requirements of Section 401(a)(4) and Section 410 of the Code. (e) Required Aggregation Group means: (i) Each qualified plan of the Company in which at least one Key Employee participates or participated at any time during the determination period (regardless of whether the plan terminated); and (ii) Any other qualified plan of the Company which enables a plan described in Subparagraph 13.1(e)(i) to meet the requirements of Section 401(a)(4) or Section 410 of the Code. (f) Determination Date means for any Plan Year the last day of the preceding Plan Year. For the first Plan Year of the Plan, the last day of that year. (g) Valuation Date means December 31 of each year. (h) Present Value: Present Value shall be based on the interest rate and mortality tables specified in the Company's defined benefit plan. (i) Compensation means all compensation, as that term is defined for Section 415 purposes, but including amounts contributed by the Company pursuant to salary reduction agreements which are excludable from the Employee's income under Code Section 125, Section 402(e)(3), Section 402(h) and Section 403(b). 13.2 Minimum Allocation (a) Except as otherwise provided in 13.2(b), (c) and (d), the Company contributions allocated on behalf of any Member who is not a Key Employee shall not be less than the lesser of three percent of such -64- 71 Member's Compensation or in the case where the Company has no defined benefit plan which designates the Plan to satisfy Section 401 of the Code, the largest percentage of Company contributions, as a percentage of the first $150,000 of the Key Employee's Compensation, allocated on behalf of any Key Employee for that year. The minimum allocation is determined without regard to any Social Security contribution. This minimum allocation shall be made even though, under other Plan provisions, the Member would not otherwise be entitled to receive an allocation, or would have received a lesser allocation for the year because of (i) the Member's failure to complete 1,000 Hours of Service, or (ii) the Member's failure to make mandatory employee contributions to the Plan, or (iii) Compensation less than a stated amount. (b) The provision in Subparagraph 13.2(a), shall not apply to any Member who was not employed by the Company on the last day of the Plan Year. (c) If Members of the Plan are covered by one or more defined benefit plans maintained by the Company or its Subsidiaries, the minimum allocation or benefit requirements applicable to Top Heavy plans shall first be met by such defined benefit plan or plans. (d) If Members of the Plan are covered by one or more defined contribution plans maintained by the Company or its Subsidiaries, and are not covered by any defined benefit plans of the Company or its Subsidiaries, the minimum allocation requirement will be met by the defined contribution plan in which the Employee is an active Member in the following order: 1. Money Purchase Pension Plan 2. Profit Sharing Plan, and 3. Stock Bonus Plan -65- 72 (e) For purposes of satisfying the minimum allocation requirement of this Paragraph 13.2, Company contributions, if any, may not be taken into account. 13.3 The minimum accrued benefit required [to the extent required to be nonforfeitable under Section 416(b)] may not be suspended or forfeited under Code Section 411(a)(3)(B) or Section 411(a)(3)(D). 13.4 For any Plan Year in which the Plan is Top Heavy, only the first $150,000 (or such larger amount as may be prescribed by the Secretary of Treasury or the Secretary's delegate) of each Member's annual Compensation will be taken into account for purposes of determining benefits under the Plan. 13.5 In any Plan Year in which the Top Heavy Ratio exceeds 60 percent the denominators of the defined benefit fraction and defined contribution fraction [as previously defined in the Plan] shall be computed using 100 percent of the dollar limitation instead of 125 percent. The preceding sentence shall not apply to an Employee so long as there are no: (a) Company contributions, forfeitures or voluntary nondeductible contributions allocated to such Employee, or (b) Accruals for such Employee under any qualified defined benefit plan. 13.6 In determining the highest rate of contribution applicable to any Key Employee, amounts that such Key Employee elects to defer under an arrangement qualified under Section 401(k) of the Code will be counted for the purposes of Section 416 of the Code. -66- EX-4.5 5 CANYON FUEL COMPANY TRUST AGREEMENT 1 EXHIBIT 4.5 CANYON FUEL COMPANY CAPITAL ACCUMULATION PLAN TRUST AGREEMENT THIS AGREEMENT made this________day of ________, 1997 between CANYON FUEL COMPANY, LLC a Delaware limited liability company ("Canyon Fuel") and STATE STREET Bank AND TRUST COMPANY, a banking corporation having its principal place of business at 225 Franklin Street, Boston, Massachusetts 01201 ("Trustee"); R E C I T A L A. This instrument creates a trust for purposes of the Canyon Fuel Company Capital Accumulation Plan (the "Plan"). B. The parties hereto desire to execute a trust agreement which sets forth the rights and duties of Trustee and the terms and conditions under which the trust fund is to be administered. NOW, THEREFORE, in consideration of the mutual covenants herein contained, the parties hereto agree as follows: Creation of the Trust 1. There is hereby established with Trustee a trust consisting of all sums paid to Trustee for purposes of the Plan, investments thereof and earnings and appreciations thereon, which, less disbursements made by Trustee, are referred to herein as the "Fund" and shall be dealt with as herein provided. Trustee shall have no duty or authority to inquire into the correctness of amounts tendered to it or to enforce the collection of any contribution by Canyon Fuel or the members of the Plan ("Members"). Investment and Administration of the Fund 2. Trustee shall have the power to hold and invest the principal and income of the Fund in the following manner: 1 2 (A) In cash, such as deposits in interest-bearing bank accounts, certificates of deposit, corporate or governmental obligations maturing in not more than five (5) years, financial futures contracts, deposits under a deposit administration or similar insurance contract or in a commingled or common investment account or fund established and maintained by a bank (which bank may be the Trustee), including any fixed income commingled funds maintained by the Trustee for qualified employee benefit accounts and the assets of which are invested primarily in debt obligations, in similar cash accounts managed by investment managers appointed by Canyon Fuel, or in any combination thereof as Canyon Fuel determines; (B) In units of a fund, consisting of specified equity investments, such as common or capital stock of issuers, other than Canyon Fuel, Atlantic Richfield Company ("ARCO") or any of their subsidiaries or affiliates, bonds, debentures or preferred stocks convertible into common or capital stock of such issuers, financial futures contracts, interests in any commingled or common equity fund established and maintained by an investment advisor or a bank (which bank may be the Trustee), interests in any mutual fund or other similar types of equity investments and cash equivalent short-term investments maturing in less than one year, or in any combination thereof as Canyon Fuel may determine; (C) In units of a fund, consisting of specified types of fixed income investments, such as public obligations of the United States or foreign governments or their agencies, securitized financing or corporate bonds of issuers, other than Canyon Fuel, ARCO or any of their subsidiaries or affiliates, debentures, financial futures contracts, interests in any commingled or common fixed income fund established and maintained by an investment advisor or bank (which bank may be the Trustee), interests in any mutual fund or other similar types of fixed income investments and cash equivalent short-term investments, or in any combination thereof as Canyon Fuel may determine; (D) In units of a fund consisting of specified investments in global issuers such as common or capital stock, other than Canyon Fuel, ARCO or any of their subsidiaries or affiliates, preferred stocks, securities convertible into common or capital stock of such issuers, financial futures contracts, currency futures or options, forward currency contracts, interests in any commingled or common equity fund established and maintained by an investment advisor or a bank (which bank may be the Trustee), interests in any mutual fund 2 3 or other similar types of equity investments and cash equivalent investments, or similar investments or in any combination thereof as Canyon Fuel may determine; (E) In units of a fund consisting of units of the funds described in Subparagraphs (B), (C) or (D), which shall be approximately 45 percent of the fund described in Subparagraph (B), 40 percent of the fund described in Subparagraph C and 15 percent of the fund described in Subparagraph (D), as Canyon Fuel determines; or (F) The Declaration of Trust creating a commingled or common fund with respect to which the Trust participates is deemed to be part of this Trust Agreement to the same extent as if fully set forth at length." 3. The Canyon Fuel Company Accumulation Plan Administrative Committee ("Committee") shall furnish in writing to Trustee information sufficient to enable Trustee to allocate each contribution received by Trustee among the above several classes of investments in conformity with the provisions of the Plan and the investment options elected by the Members. 4. This Paragraph is intended to authorize appointment of an investment manager as contemplated in Section 402(c)(3) of the Employee Retirement Income Security Act of 1974 ("ERISA"). Canyon Fuel may appoint an investment manager with respect to some or all of the assets of the Fund. The appointment of the investment manager shall be made by an officer of Canyon Fuel or other named fiduciary authorized by a resolution of Canyon Fuel's Management Board to make such appointments. The authority of the investment manager shall not begin until Trustee receives from Canyon Fuel notice satisfactory to Trustee that the investment manager has been appointed and that the investment manager has acknowledged in writing that with respect to the relevant assets of the Fund he or she or it is a fiduciary with respect to the Plan within the meaning of ERISA. The investment manager's authority shall continue until Trustee receives similar notice that the appointment has been rescinded. By notifying Trustee of the appointment of an investment manager, Canyon Fuel shall be deemed to warrant that such investment manager meets the requirements of Section 3(38) of ERISA, but 3 4 Trustee may demand independent evidence that any investment manager meets those requirements. The assets with respect to which a particular investment manager has been appointed shall be segregated from all other assets held by Trustee under this Agreement and the investment manager shall have the duty and power to direct Trustee in every aspect of their investment. Upon request, Trustee shall execute appropriate powers of attorney authorizing an investment manager appointed hereunder to exercise the powers and duties of the investment manager. Trustee may rely upon any order, certificate, notice, direction or other documentary confirmation purporting to have been issued or given by an investment manager which Trustee believes to be genuine and to have been issued or given by such investment manager. Any oral direction shall be followed by a written confirmation as soon as practical. Trustee shall follow the procedures established by Canyon Fuel to validate such oral directions. 5. Canyon Fuel may direct that with respect to some or all of the assets of the Fund, Trustee shall be subject to the direction of a fiduciary named by Canyon Fuel in a manner prescribed by its Management Board. In such a case, Trustee shall be subject to proper direction of such fiduciary, and Canyon Fuel shall be deemed to warrant that all directions given by such fiduciary are proper, and made in accordance with the Plan, and are not contrary to the provisions of Title I of ERISA. When so appointed, such a fiduciary shall have the same powers as an investment manager appointed pursuant to Paragraph 4. The assets with respect to which a particular fiduciary has been appointed shall be segregated from all other assets held by Trustee under this Agreement and the fiduciary shall have the duty and power to direct Trustee in every aspect of their investment. Upon request, Trustee shall execute appropriate powers of attorney authorizing a fiduciary appointed hereunder to exercise the powers and duties of the investment fiduciary. 4 5 Trustee may rely upon any order, certificate, notice, direction or other confirmation, whether written or oral, purporting to have been issued or given by a fiduciary which Trustee believes to be genuine and to have been issued or given by such investment fiduciary. Any oral direction shall be followed by a written confirmation as soon as practical. Trustee shall follow the procedures established by Canyon Fuel to validate such instructions. 6. When acting hereunder, whether in its discretion or at the direction of an investment manager or fiduciary named pursuant to Paragraph 4 or 5, Trustee shall have the powers granted Trustees by law and in addition shall have the power: (A) To vote any bonds or other securities of any corporation or other issuer at any time held in the trust; to otherwise consent to or request any action on the part of any such corporation or other issuer; to give general or special proxies or powers of attorney with or without power of substitution; to participate in any reorganization, recapitalization, merger or similar transaction with respect to such securities and to deposit such securities in any voting trust, pooling agreement or with any protective or like committee, or with a trustee, or with depositories designated thereby; to generally exercise any of the powers of an owner with respect to the securities or properties comprising the trust; to institute, compromise and defend actions and proceedings; to pay or contest any claim; to settle a claim by or against the trust by compromise, arbitration or otherwise; to release, in whole or in part, any claim belonging to the trust to the extent that the claim is uncollectible; (B) To hold property of the Fund in its own name or in the name of a nominee or nominees, without disclosure of the trust, or in bearer form so that it will pass by delivery; but no such holding shall relieve Trustee of its responsibility for the safe custody and disposition of the Fund in accordance with the provisions of this Agreement; Trustee's books and records shall at all times show that such property is part of the Fund; and Trustee shall be liable for any loss occasioned by the acts of its nominee or nominees with respect to securities registered in the name of the nominee or nominees as much as if such acts were the acts of Trustee; 5 6 (C) To employ agents in the management of the Fund, provided that Trustee shall be responsible for the acts of such agents (other than acts of the United States Postal Service) as much as if they were acts of Trustee; (D) To make, execute and deliver, as Trustee, any conveyances, contracts, waivers, or other instruments in writing that Trustee may deem necessary or desirable in the exercise of its powers under this Agreement; (E) To apply for, purchase, hold and transfer any annuity contract for a participant in accordance with written instructions from Canyon Fuel in conjunction with the termination of the Plan, provided that no such contract shall provide for a life annuity; and (F) To do all other acts that Trustee may deem necessary or proper to carry out any of the powers set forth in this Agreement or otherwise in the best interests of the Fund. 7. Trustee may hold uninvested or may invest in its discretion in short-term cash equivalents (including deposits, savings accounts and certificates of deposit with its own banking department or any common or collective trust fund maintained by Trustee which satisfies such objective) any amount stated by Canyon Fuel or believed by Trustee to be needed in the near future for withdrawals from the Fund. 8. Trustee, as and when directed by Canyon Fuel (or any committee or person or entity designated for such purpose in the Plan or otherwise by Canyon Fuel), shall make distributions or pay withdrawals, pay expenses of administering the Plan, buy, sell or turn in for redemption securities, and exercise or sell options, rights or warrants as shall be specified in any such direction. In the case of any such distribution or withdrawal, Trustee shall make or pay the same in cash or in kind, or in any combination thereof as provided in the direction. Canyon Fuel shall hold harmless and shall defend Trustee against any liability arising or asserted to arise out of Trustee's compliance with directions under this paragraph. 6 7 9. Trustee shall be paid such reasonable compensation for its service as Trustee as shall from time to time be agreed upon by Canyon Fuel and Trustee. Unless paid by Canyon Fuel, such compensation, and the expenses of administration of this Trust, may be withdrawn by Trustee from the Fund. 10. Trustee shall pay out of the Fund all taxes imposed or levied with respect to the Fund or any part thereof, under existing or future laws, and at Canyon Fuel's direction, may contest the validity or amount of any tax assessment, claim or demand respecting the Fund or any part thereof. 11. The following additional rules shall govern the standard of conduct and liabilities of Trustee hereunder; (A) Trustee shall perform all of its functions hereunder with the care, skill, prudence, and diligence under the circumstances then prevailing that a prudent man acting in a like capacity and familiar with such matters would use in the conduct of an enterprise of a like character and with like aims, or in accordance with such other standard as may be required from time to time by law, and shall not be liable for any conduct on its part (including reliance on advice of counsel) which conforms to that standard. (B) Trustee shall hold Canyon Fuel, its subsidiaries and affiliates and each of the directors, officers or employees of Canyon Fuel and of any such affiliate or subsidiary harmless (including the cost of outside counsel) against any liability or excise tax asserted against Canyon Fuel or any such entity or person as a result of any breach by Trustee of any of its duties or fiduciary responsibilities. This Clause (B) shall not require Trustee to hold Canyon Fuel or any other entity or person harmless against any liability or excise tax arising out of action or inaction of Trustee pursuant to or pending direction by an investment manager or fiduciary named pursuant to Paragraph 4 or 5 or by Canyon Fuel pursuant to any provision of this Agreement. (C) Trustee shall not be liable for the acts or omissions of an investment manager or fiduciary appointed under Paragraph 4 or 5, and, except with respect to short-term investments under Paragraph 7, Trustee shall be under no 7 8 obligation to invest or otherwise manage any asset of the Plan which is subject to the management of such investment manager or fiduciary, it being the intention of the parties that, except with respect to investments under Paragraph 7, Trustee shall have the full protection of Section 405 of ERISA. (D) Where an investment manager or fiduciary has been named pursuant to Paragraph 4 or 5 or where Canyon Fuel is required to give directions to Trustee, Canyon Fuel shall hold harmless and defend Trustee against any liability or excise tax arising out of Trustee's action or inaction pursuant to or pending direction by such investment manager, fiduciary or Canyon Fuel. This Clause (D) shall not apply to any liability arising out of any act or omission in which Trustee knowingly participates or which Trustee knowingly undertakes to conceal, knowing such act or omission to be a breach of fiduciary responsibility. (E) When so instructed by Canyon Fuel, Trustee shall deposit any assets held by it with a custodian named by Canyon Fuel, and Canyon Fuel shall hold harmless and defend Trustee against any liability arising or asserted to arise out of Trustee's compliance with directions under this paragraph. Accounting By Trustee 12. Trustee shall keep accurate and detailed accounts of all investments, receipts, disbursements, withdrawals and other transactions hereunder, and all records relating thereto shall be open to inspection and audit at all reasonable times by any person or corporation designated by Canyon Fuel. At such intervals as Canyon Fuel may from time to time designate, and as of the date of the removal or resignation of Trustee, Trustee shall file with Canyon Fuel a written account setting forth all investments, receipts, disbursements, withdrawals and other transactions effected by it during the period from the date of its last such account and a list of the assets of the Fund at the close of such period. Such account may be in the form of monthly or quarterly statements which taken together reflect the matters set forth in the preceding sentence. As between Canyon Fuel and Trustee, Trustee shall be forever released and discharged from all liability with respect to the propriety of acts and transactions shown in such account, except with respect to any such act or transaction as to which Canyon Fuel shall within 90 days following notification thereof have filed written objections with 8 9 Trustee and except that no such accounting shall foreclose any liability of Trustee to Canyon Fuel arising under Paragraph ll(B). Except as provided in Paragraph ll(B), the liability of Trustee to persons other than Canyon Fuel shall be limited to actions under ERISA brought within the period permitted by law for the bringing of such actions. Removal and Resignation of Trustee 13. Trustee may be removed by Canyon Fuel at any time upon not less than 30 days' written notice and Trustee may resign at any time upon not less than 90 days' written notice. In either case, such notice may be wholly or partially waived by the party to whom it is due. Upon Trustee's removal or resignation, Canyon Fuel shall appoint a successor trustee who shall have the same powers and duties as those conferred upon Trustee hereunder, and upon acceptance of such appointment by the successor trustee, Trustee shall assign, transfer and pay over to such successor trustee the funds and properties then constituting the Fund. If Canyon Fuel fails within a reasonable time to name a successor trustee or otherwise direct proper disbursement of the Fund, Trustee may apply to any court of competent jurisdiction for appropriate relief. Trustee may in any event reserve such reasonable sum of money as it may deem advisable, to provide for any charges against the Fund for which it may be liable, and for payment of its fees and expenses in connection with the settlement of its account or otherwise. Any balance of such reserve remaining after the payment of such fees and expenses shall be paid over as aforesaid. 14. If the Plan is wholly or partially terminated, Trustee shall disburse the portion of the Fund affected by the termination as directed by Canyon Fuel. Trustee may elect to treat any such disbursement as a removal of Trustee with respect to the assets disbursed. in which case the provisions of Paragraph 13 shall apply. 15. Canyon Fuel may amend this Agreement by an instrument in writing signed by an authorized officer of Canyon Fuel or by any other named fiduciary authorized by a resolution of Canyon Fuel's Management Board to sign such amendment, provided that no such amendment shall divert any part of the Fund to purposes other than payment of benefits to Plan members and their beneficiaries or defrayal of reasonable expenses of administering the Plan, and, except with Trustee's consent, no amendment affecting the duties, responsibilities or rights of Trustee shall 9 10 take effect until 30 days after a copy of said amendment is furnished to Trustee or, if Trustee gives notice of resignation within such 30-day period, until the resignation becomes effective. 16. Canyon Fuel may terminate this Agreement by directing disbursement of the entire Fund pursuant to Paragraph 13. Miscellaneous 17. Prior to satisfaction of all liabilities under the Plan, no part of the Fund shall inure to the benefit of Canyon Fuel or be used other than for purposes of providing benefits to Members and their beneficiaries and defraying reasonable expenses of administering the Plan. However; (A) If a contribution under the Plan is made by a mistake of fact, this paragraph shall not prohibit the return of an amount not in excess of such contribution at the direction of Canyon Fuel within one year after the contribution is paid; (B) If a contribution under the Plan is expressly conditioned on initial qualification of the Plan under Section 401 of the Internal Revenue Code of 1986, as amended, and if the Plan does not qualify, or continue to so qualify, this paragraph shall not prohibit the return of an amount not in excess of such contribution at the direction of Canyon Fuel within one year after the date of denial of qualification of the Plan; and (C) If a contribution under the Plan is expressly conditioned upon the deductibility of the contribution under Section 404 of the Internal Revenue Code of 1986, as amended, then, to the extent the deduction is disallowed, this paragraph shall not prohibit the return of an amount not in excess of such contribution (to the extent disallowed) at the direction of Canyon Fuel within one year after the disallowance of the deduction. Trustee may demand assurance satisfactory to it that the sum of all amounts being returned from the Trust under the Plan does not exceed the amount described above. 10 11 18. This Trust is intended to be entitled to an income tax exemption under Section 501(a) of the Internal Revenue Code of 1986 and wherever possible shall be construed to carry out that intention. Trustee may demand assurances satisfactory to it that any action it is directed to take will not adversely affect the tax exemption of the Trust. 19. Any successor in interest to Trustee shall automatically become Trustee hereunder. 20. Any successor to all or part of the business of Canyon Fuel may become a party to this Agreement and, with respect to assets of the Fund which Canyon Fuel warrants to Trustee are allocable to such successor, this Agreement shall be deemed to create a separate trust composed of such assets and administered according to this Agreement, except that such successor shall be substituted for Canyon Fuel for all purposes hereunder. 21. Unless otherwise provided in this Agreement, any communications (including notices, instructions, or directions) required or permitted hereunder to be given by Canyon Fuel shall be given in writing addressed to the trust officer with whom Canyon Fuel customarily deals and signed by the officer delegated such power, or any other person or persons whom Canyon Fuel notifies Trustee are from time to time authorized to sign such communications. Canyon Fuel shall furnish Trustee specimen signatures of all persons authorized to sign communications to Trustee. 22. If any payment mailed by regular U.S. Mail to the last address of the payee furnished by Canyon Fuel is returned unclaimed, Trustee shall so notify Canyon Fuel and shall discontinue further payments to such payee until it received further instructions of Canyon Fuel. 23. No amount held hereunder shall be subject to voluntary or involuntary alienation or to the claims of any creditor. 24. This Agreement shall be controlled by the law of the State of Massachusetts in all respects in which the law is not inconsistent with ERISA. 11 12 25. This Agreement may be executed in counterparts, each of which shall be an original although the others are not produced. IN WITNESS WHEREOF, the parties have caused this Agreement to be executed the date first written above. ATTEST: CANYON FUEL COMPANY, LLC By: - ------------------- ---------------------------------- BEVERLY L. HAMILTON As named fiduciary appointed by the Management Board of Canyon Fuel Company, LLC with power and authority to negotiate, execute and deliver this Trust Agreement on behalf of Canyon Fuel Company, LLC ATTEST: STATE STREET BANK AND TRUST COMPANY As Trustee for Canyon Fuel Company Capital Accumulation Plan By: - ------------------- ---------------------------------- 12 EX-4.6 6 CH-TWENTY, INC. CAPITAL ACCUMULATION PLAN TRUST 1 EXHIBIT 4.6 CH-TWENTY, INC. CAPITAL ACCUMULATION PLAN TRUST AGREEMENT THIS AGREEMENT made this 1st day of July, 1997 between CH-TWENTY, INC. a Delaware corporation ("CH-Twenty") and STATE STREET BANK and TRUST COMPANY, a banking corporation having its principal place of business at 225 Franklin Street, Boston, Massachusetts 01201 ("Trustee"); R E C I T A L A. This instrument creates a trust for purposes of the CH-Twenty Inc., Capital Accumulation Plan (the "Plan"). B. The parties hereto desire to execute a trust agreement which sets forth the rights and duties of Trustee and the terms and conditions under which the trust fund is to be administered. Effective as of July 1, 1997, the assets and liabilities of the Atlantic Richfield Capital Accumulation Plan II allocable as of June 20, 1997 to participants in the Plan are to be transferred to the Plan. NOW, THEREFORE, in consideration of the mutual covenants herein contained, the parties hereto agree as follows: Creation of the Trust 1. There is hereby established with Trustee a trust consisting of all sums paid to trustee for purposes of the Plan (including trust assets paid over to Trustee by the trustee of the Atlantic Richfield Capital Accumulation Plan II), investments thereof and earnings and appreciations thereon, which, less disbursements made by Trustee, are referred to herein as the "Fund" and shall be dealt with as herein provided. Trustee shall have no duty or authority to inquire into the correctness of amounts tendered to it or to enforce the collection of any contribution by CH-Twenty or the members of the Plan ("Members"). Investment and Administration of the Fund 2. Trustee shall have the power to hold and invest the principal and income of the Fund in the following manner: (A) Common Stock of Atlantic Richfield Company ("ARCO") purchased on the open market or from ARCO as may be directed by CH-Twenty in accordance with the Plan; (B) In cash, such as deposits in interest-bearing bank accounts, certificates of deposit, corporate or governmental obligations maturing in not more than five (5) years, financial futures contracts, deposits under a deposit administration or similar insurance contract or in a commingled or common investment account or fund established and maintained by a bank (which bank may be the Trustee), including any fixed income commingled funds maintained by the Trustee for qualified employee benefit accounts and the assets of which are invested primarily in debt obligations, in similar cash accounts 1 2 managed by investment managers appointed by CH-Twenty, or in any combination thereof as CH-Twenty determines; (C) In units of a fund, consisting of specified equity investments, such as common or capital stock of issuers, other than CH-Twenty, ARCO or any of their subsidiaries or affiliates, bonds, debentures or preferred stocks convertible into common or capital stock of such issuers, financial futures contracts, interests in any commingled or common equity fund established and maintained by an investment advisor or a bank (which bank may be the Trustee), interests in any mutual fund or other similar types of equity investments and cash equivalent short-term investments maturing in less than one year, or in any combination thereof as CH-Twenty may determine; (D) In units of a fund, consisting of specified types of fixed income investments, such as public obligations of the United States or foreign governments or their agencies, securitized financing or corporate bonds of issuers, other than CH-Twenty, ARCO or any of their subsidiaries or affiliates, debentures, financial futures contracts, interests in any commingled or common fixed income fund established and maintained by an investment advisor or bank (which bank may be the Trustee), interests in any mutual fund or other similar types of fixed income investments and cash equivalent short-term investments, or in any combination thereof as CH-Twenty may determine; (E) In units of a fund consisting of specified investments in global issuers such as common or capital stock, other than CH-Twenty, ARCO or any of their subsidiaries or affiliates, preferred stocks, securities convertible into common or capital stock of such issuers, financial futures contracts, currency futures or options, forward currency contracts, interests in any commingled or common equity fund established and maintained by an investment advisor or a bank (which bank may be the Trustee), interests in any mutual fund or other similar types of equity investments and cash equivalent investments, or similar investments or in any combination thereof as CH-Twenty may determine; (F) In units of a fund consisting of units of the funds described in Subparagraphs (C), (D) or (E), which shall be approximately 45 percent of the fund described in Subparagraph (C), 40 percent of the fund described in Subparagraph (D) and 15 percent of the fund described in Subparagraph (E), as CH-Twenty determines; or (G) The Declaration of Trust creating a commingled or common fund with respect to which the Trust participates is deemed to be part of this Trust Agreement to the same extent as if fully set forth at length." 3. The CH-Twenty Inc., Accumulation Plan Administrative Committee ("Committee") shall furnish in writing to Trustee information sufficient to enable Trustee to allocate each contribution received by Trustee among the above several classes of investments in conformity with the provisions of the Plan and the investment options elected by the Members. 4. This Paragraph is intended to authorize appointment of an investment manager as contemplated in Section 402(c)(3) of the Employee Retirement Income Security Act of 1974 ("ERISA"). CH-Twenty may appoint an investment manager with respect to some or all of the assets of the Fund. The appointment of the investment manager shall be 2 3 made by an officer of CH-Twenty or other named fiduciary authorized by a resolution of CH-Twenty's Board of Directors to make such appointments. The authority of the investment manager shall not begin until Trustee receives from CH-Twenty notice satisfactory to Trustee that the investment manager has been appointed and that the investment manager has acknowledged in writing that with respect to the relevant assets of the Fund he or she or it is a fiduciary with respect to the Plan within the meaning of ERISA. The investment manager's authority shall continue until Trustee receives similar notice that the appointment has been rescinded. By notifying Trustee of the appointment of an investment manager, CH-Twenty shall be deemed to warrant that such investment manager meets the requirements of Section 3(38) of ERISA, but Trustee may demand independent evidence that any investment manager meets those requirements. The assets with respect to which a particular investment manager has been appointed shall be segregated from all other assets held by Trustee under this Agreement and the investment manager shall have the duty and power to direct Trustee in every aspect of their investment. Upon request, Trustee shall execute appropriate powers of attorney authorizing an investment manager appointed hereunder to exercise the powers and duties of the investment manager. Trustee may rely upon any order, certificate, notice, direction or other documentary confirmation purporting to have been issued or given by an investment manager which Trustee believes to be genuine and to have been issued or given by such investment manager. Any oral direction shall be followed by a written confirmation as soon as practical. Trustee shall follow the procedures established by CH-Twenty to validate such oral directions. 5. CH-Twenty may direct that with respect to some or all of the assets of the Fund, Trustee shall be subject to the direction of a fiduciary named by CH-Twenty in a manner prescribed by its Board of Directors. In such a case, Trustee shall be subject to proper direction of such fiduciary, and CH-Twenty shall be deemed to warrant that all directions given by such fiduciary are proper, and made in accordance with the Plan, and are not contrary to the provisions of Title I of ERISA. When so appointed, such a fiduciary shall have the same powers as an investment manager appointed pursuant to Paragraph 4. The assets with respect to which a particular fiduciary has been appointed shall be segregated from all other assets held by Trustee under this Agreement and the fiduciary shall have the duty and power to direct Trustee in every aspect of their investment. Upon request, Trustee shall execute appropriate powers of attorney authorizing a fiduciary appointed hereunder to exercise the powers and duties of the investment fiduciary. Trustee may rely upon any order, certificate, notice, direction or other confirmation, whether written or oral, purporting to have been issued or given by a fiduciary which Trustee believes to be genuine and to have been issued or given by such investment fiduciary. 3 4 Any oral direction shall be followed by a written confirmation as soon as practical. Trustee shall follow the procedures established by CH-Twenty to validate such instructions. 6. When acting hereunder, whether in its discretion or at the direction of an investment manager or fiduciary named pursuant to Paragraph 4 or 5, Trustee shall have the powers granted Trustees by law and in addition shall have the power: (A) To vote any bonds or other securities of any corporation or other issuer at any time held in the trust provided that the shares of ARCO Common Stock in a Member's account shall be voted by the Trustee in accordance with the Member's instructions unless such instructions are not given within a reasonable period of time established by the Trustee; to otherwise consent to or request any action on the part of any such corporation or other issuer; to give general or special proxies or powers of attorney with or without power of substitution; to participate in any reorganization, recapitalization, merger or similar transaction with respect to such securities and to deposit such securities in any voting trust, pooling agreement or with any protective or like committee, or with a trustee, or with depositories designated thereby; to generally exercise any of the powers of an owner with respect to the securities or properties comprising the trust; to institute, compromise and defend actions and proceedings; to pay or contest any claim; to settle a claim by or against the trust by compromise, arbitration or otherwise; to release, in whole or in part, any claim belonging to the trust to the extent that the claim is uncollectible; provided that; (i) Each Member shall be entitled to direct the Trustee as to the manner in which whole shares of ARCO Common Stock credited to the Member's account shall be voted. Fractional shares of ARCO Common Stock shall be aggregated into whole shares of stock and voted by the Trustee in the same proportion as the aggregate shares which are voted by the Trustee pursuant to Members' written instructions. In the absence of voting instructions by one or more Members, the Trustee shall vote such shares in the aggregate in the same proportion as the aggregate shares which are voted by the Trustee pursuant to Members' written instructions. With respect to unallocated shares of ARCO Common Stock held in a loan suspense account, the Trustee shall vote such shares in the aggregate in the same proportion as the aggregate shares, allocated to Members' accounts, are voted by the Trustee pursuant to Members' written instructions. (ii) Each Member shall be entitled to direct the Trustee as to the manner in which rights other than voting rights attributable to whole shares of ARCO Common Stock credited to the Member's account shall be exercised. Rights attributable to fractional shares of ARCO Common Stock shall be aggregated into whole shares of stock and exercised by the Trustee in the same proportion as rights which are exercised by the Trustee pursuant to Members' written instructions. In the absence of instructions by one or more Members, the Trustee shall exercise such rights in the aggregate in the same proportion as the aggregate rights which are exercised by the Trustee pursuant to Members' written instructions. With respect to unallocated shares of ARCO Common Stock held in a loan suspense account, the Trustee shall exercise such rights in the aggregate in the same proportion as the aggregate shares, allocated to Members' accounts, are exercised by the Trustee pursuant to Members' written instructions. 4 5 (B) To hold property of the Fund in its own name or in the name of a nominee or nominees, without disclosure of the trust, or in bearer form so that it will pass by delivery; but no such holding shall relieve Trustee of its responsibility for the safe custody and disposition of the Fund in accordance with the provisions of this Agreement; Trustee's books and records shall at all times show that such property is part of the Fund; and Trustee shall be liable for any loss occasioned by the acts of its nominee or nominees with respect to securities registered in the name of the nominee or nominees as much as if such acts were the acts of Trustee; (C) To employ agents in the management of the Fund, provided that Trustee shall be responsible for the acts of such agents (other than acts of the United States Postal Service) as much as if they were acts of Trustee; (D) To make, execute and deliver, as Trustee, any conveyances, contracts, waivers, or other instruments in writing that Trustee may deem necessary or desirable in the exercise of its powers under this Agreement; (E) To apply for, purchase, hold and transfer any annuity contract for a participant in accordance with written instructions from CH-Twenty in conjunction with the termination of the Plan, provided that no such contract shall provide for a life annuity; and (F) To do all other acts that Trustee may deem necessary or proper to carry out any of the powers set forth in this Agreement or otherwise in the best interests of the Fund. (G) As directed by CH-Twenty, to borrow from any lender (including CH-Twenty or the Trustee) to finance the acquisition of ARCO Common Stock, and to make payments on such loans, giving its note as Trustee with such reasonable interest and security for the loan as may be appropriate or necessary; provided that any such borrowing shall comply with the provisions of the Plan. 7. Trustee may hold uninvested or may invest in its discretion in short-term cash equivalents (including deposits, savings accounts and certificates of deposit with its own banking department or any common or collective trust fund maintained by Trustee which satisfies such objective) (i) any amount stated by CH-Twenty or believed by Trustee to be needed in the near future for withdrawals from the Fund, or (ii) all or a portion of the proceeds of a loan described in Section 6(G) pending the acquisition of ARCO Common Stock. 8. Trustee, as and when directed by CH-Twenty (or any committee or person or entity designated for such purpose in the Plan or otherwise by CH-Twenty), shall make distributions or pay withdrawals, pay expenses of administering the Plan, buy, sell or turn in for redemption securities, and exercise or sell options, rights or warrants as shall be specified in any such direction. In the case of any such distribution or withdrawal, Trustee shall make or pay the same in cash or in kind, or in any combination thereof as provided in the direction. CH-Twenty shall hold harmless and shall defend Trustee against any liability arising or asserted to arise out of Trustee's compliance with directions under this paragraph. 5 6 9. Trustee shall be paid such reasonable compensation for its service as Trustee as shall from time to time be agreed upon by CH-Twenty and Trustee. Unless paid by CH-Twenty, such compensation, and the expenses of administration of this Trust, may be withdrawn by Trustee from the Fund. 10. Trustee shall pay out of the Fund all taxes imposed or levied with respect to the Fund or any part thereof, under existing or future laws, and at CH-Twenty's direction, may contest the validity or amount of any tax assessment, claim or demand respecting the Fund or any part thereof. 11. The following additional rules shall govern the standard of conduct and liabilities of Trustee hereunder; (A) Trustee shall perform all of its functions hereunder with the care, skill, prudence, and diligence under the circumstances then prevailing that a prudent man acting in a like capacity and familiar with such matters would use in the conduct of an enterprise of a like character and with like aims, or in accordance with such other standard as may be required from time to time by law, and shall not be liable for any conduct on its part (including reliance on advice of counsel) which conforms to that standard. (B) Trustee shall hold CH-Twenty, its subsidiaries and affiliates and each of the directors, officers or employees of CH-Twenty and of any such affiliate or subsidiary harmless (including the cost of outside counsel) against any liability or excise tax asserted against CH-Twenty or any such entity or person as a result of any breach by Trustee of any of its duties or fiduciary responsibilities. This Clause (B) shall not require Trustee to hold CH-Twenty or any other entity or person harmless against any liability or excise tax arising out of action or inaction of Trustee pursuant to or pending direction by an investment manager or fiduciary named pursuant to Paragraph 4 or 5 or by CH-Twenty pursuant to any provision of this Agreement. (C) Trustee shall not be liable for the acts or omissions of an investment manager or fiduciary appointed under Paragraph 4 or 5, and, except with respect to short-term investments under Paragraph 7, Trustee shall be under no obligation to invest or otherwise manage any asset of the Plan which is subject to the management of such investment manager or fiduciary, it being the intention of the parties that, except with respect to investments under Paragraph 7, Trustee shall have the full protection of Section 405 of ERISA. (D) Where an investment manager or fiduciary has been named pursuant to Paragraph 4 or 5 or where CH-Twenty is required to give directions to Trustee, CH-Twenty shall hold harmless and defend Trustee against any liability or excise tax arising out of Trustee's action or inaction pursuant to or pending direction by such investment manager, fiduciary or CH-Twenty. This Clause (D) shall not apply to any liability arising out of any act or omission in which Trustee knowingly participates or which Trustee knowingly undertakes to conceal, knowing such act or omission to be a breach of fiduciary responsibility. (E) When so instructed by CH-Twenty, Trustee shall deposit any assets held by it with a custodian named by CH-Twenty, and CH-Twenty shall hold 6 7 harmless and defend Trustee against any liability arising or asserted to arise out of Trustee's compliance with directions under this paragraph. Accounting By Trustee 12. Trustee shall keep accurate and detailed accounts of all investments, receipts, disbursements, withdrawals and other transactions hereunder, and all records relating thereto shall be open to inspection and audit at all reasonable times by any person or corporation designated by CH-Twenty. At such intervals as CH-Twenty may from time to time designate, and as of the date of the removal or resignation of Trustee, Trustee shall file with CH-Twenty a written account setting forth all investments, receipts, disbursements, withdrawals and other transactions effected by it during the period from the date of its last such account and a list of the assets of the Fund at the close of such period. Such account may be in the form of monthly or quarterly statements which taken together reflect the matters set forth in the preceding sentence. As between CH-Twenty and Trustee, Trustee shall be forever released and discharged from all liability with respect to the propriety of acts and transactions shown in such account, except with respect to any such act or transaction as to which CH-Twenty shall within 90 days following notification thereof have filed written objections with Trustee and except that no such accounting shall foreclose any liability of Trustee to CH-Twenty arising under Paragraph ll(B). Except as provided in Paragraph ll(B), the liability of Trustee to persons other than CH-Twenty shall be limited to actions under ERISA brought within the period permitted by law for the bringing of such actions. Removal and Resignation of Trustee 13. Trustee may be removed by CH-Twenty at any time upon not less than 30 days' written notice and Trustee may resign at any time upon not less than 90 days' written notice. In either case, such notice may be wholly or partially waived by the party to whom it is due. Upon Trustee's removal or resignation, CH-Twenty shall appoint a successor trustee who shall have the same powers and duties as those conferred upon Trustee hereunder, and upon acceptance of such appointment by the successor trustee, Trustee shall assign, transfer and pay over to such successor trustee the funds and properties then constituting the Fund. If CH-Twenty fails within a reasonable time to name a successor trustee or otherwise direct proper disbursement of the Fund, Trustee may apply to any court of competent jurisdiction for appropriate relief. Trustee may in any event reserve such reasonable sum of money as it may deem advisable, to provide for any charges against the Fund for which it may be liable, and for payment of its fees and expenses in connection with the settlement of its account or otherwise. Any balance of such reserve remaining after the payment of such fees and expenses shall be paid over as aforesaid. 14. If the Plan is wholly or partially terminated, Trustee shall disburse the portion of the Fund affected by the termination as directed by CH-Twenty. Trustee may elect to treat any such disbursement as a removal of Trustee with respect to the assets disbursed. in which case the provisions of Paragraph 13 shall apply. 15. CH-Twenty may amend this Agreement by an instrument in writing signed by an authorized officer of CH-Twenty or by any other named fiduciary authorized by a resolution of CH-Twenty's Board of Directors to sign such amendment, provided that no such amendment shall divert any part of the Fund to purposes other than payment of 7 8 benefits to Plan members and their beneficiaries or defrayal of reasonable expenses of administering the Plan, and, except with Trustee's consent, no amendment affecting the duties, responsibilities or rights of Trustee shall take effect until 30 days after a copy of said amendment is furnished to Trustee or, if Trustee gives notice of resignation within such 30-day period, until the resignation becomes effective. 16. CH-Twenty may terminate this Agreement by directing disbursement of the entire Fund pursuant to Paragraph 13. Miscellaneous 17. Prior to satisfaction of all liabilities under the Plan, no part of the Fund shall inure to the benefit of CH-Twenty or be used other than for purposes of providing benefits to Members and their beneficiaries and defraying reasonable expenses of administering the Plan. However; (A) If a contribution under the Plan is made by a mistake of fact, this paragraph shall not prohibit the return of an amount not in excess of such contribution at the direction of CH-Twenty within one year after the contribution is paid; (B) If a contribution under the Plan is expressly conditioned on initial qualification of the Plan under Section 401 of the Internal Revenue Code of 1986, as amended, and if the Plan does not qualify, or continue to so qualify, this paragraph shall not prohibit the return of an amount not in excess of such contribution at the direction of CH-Twenty within one year after the date of denial of qualification of the Plan; and (C) If a contribution under the Plan is expressly conditioned upon the deductibility of the contribution under Section 404 of the Internal Revenue Code of 1986, as amended, then, to the extent the deduction is disallowed, this paragraph shall not prohibit the return of an amount not in excess of such contribution (to the extent disallowed) at the direction of CH-Twenty within one year after the disallowance of the deduction. Trustee may demand assurance satisfactory to it that the sum of all amounts being returned from the Trust under the Plan does not exceed the amount described above. 18. This Trust is intended to be entitled to an income tax exemption under Section 501(a) of the Internal Revenue Code of 1986 and wherever possible shall be construed to carry out that intention. Trustee may demand assurances satisfactory to it that any action it is directed to take will not adversely affect the tax exemption of the Trust. 19. Any successor in interest to Trustee shall automatically become Trustee hereunder. 20. Any successor to all or part of the business of CH-Twenty may become a party to this Agreement and, with respect to assets of the Fund which CH-Twenty warrants to Trustee are allocable to such successor, this Agreement shall be deemed to create a separate trust composed of such assets and administered according to this 8 9 Agreement, except that such successor shall be substituted for CH-Twenty for all purposes hereunder. 21. Unless otherwise provided in this Agreement, any communications (including notices, instructions, or directions) required or permitted hereunder to be given by CH-Twenty shall be given in writing addressed to the trust officer with whom CH-Twenty customarily deals and signed by the officer delegated such power, or any other person or persons whom CH-Twenty notifies Trustee are from time to time authorized to sign such communications. CH-Twenty shall furnish Trustee specimen signatures of all persons authorized to sign communications to Trustee. 22. If any payment mailed by regular U.S. Mail to the last address of the payee furnished by CH-Twenty is returned unclaimed, Trustee shall so notify CH-Twenty and shall discontinue further payments to such payee until it received further instructions of CH-Twenty. 23. No amount held hereunder shall be subject to voluntary or involuntary alienation or to the claims of any creditor. 24. This Agreement shall be controlled by the law of the State of Massachusetts in all respects in which the law is not inconsistent with ERISA. 25. This Agreement may be executed in counterparts, each of which shall be an original although the others are not produced. IN WITNESS WHEREOF, the parties have caused this Agreement to be executed the date first written above. ATTEST: CH-TWENTY, INC. By: - ------------------- ---------------------------------- BEVERLY L. HAMILTON As named fiduciary appointed by the Board of Directors of CH-Twenty, Inc., with power and authority to negotiate, execute and deliver this Trust Agreement on behalf of CH-Twenty, Inc. ATTEST: STATE STREET BANK AND TRUST COMPANY As Trustee for CH-Twenty, Inc., Capital Accumulation Plan By: - ------------------- ---------------------------------- 9 EX-4.7 7 CH-TWENTY, INC. SAVINGS PLAN TRUST AGREEMENT 1 EXHIBIT 4.7 CH-TWENTY, INC. SAVINGS PLAN TRUST AGREEMENT THIS AGREEMENT made this 1st day of July, 1997 between CH-TWENTY, INC. a Delaware corporation ("CH-Twenty") and STATE STREET Bank AND TRUST COMPANY, a banking corporation having its principal place of business at 225 Franklin Street, Boston, Massachusetts 01201 ("Trustee"); R E C I T A L A. This instrument creates a trust for purposes of the CH-Twenty Inc., Savings Plan (the "Plan"). B. The parties hereto desire to execute a trust agreement which sets forth the rights and duties of Trustee and the terms and conditions under which the trust fund is to be administered. Effective as of July 1, 1997, the assets and liabilities of the Atlantic Richfield Savings Plan II allocable as of June 20, 1997 to participants in the Plan are to be transferred to the Plan. NOW, THEREFORE, in consideration of the mutual covenants herein contained, the parties hereto agree as follows: Creation of the Trust 1. There is hereby established with Trustee a trust consisting of all sums paid to trustee for purposes of the Plan (including trust assets paid over to Trustee by the trustee of the Atlantic Richfield Savings Plan II), investments thereof and earnings and appreciations thereon, which, less disbursements made by Trustee, are referred to herein as the "Fund" and shall be dealt with as herein provided. Trustee shall have no duty or authority to inquire into the correctness of amounts tendered to it or to enforce the collection of any contribution by CH-Twenty or the members of the Plan ("Members"). Investment and Administration of the Fund 2. Trustee shall have the power to hold and invest the principal and income of the Fund in the following manner: (A) Common Stock of Atlantic Richfield Company ("ARCO") purchased on the open market or from ARCO as may be directed by CH-Twenty in accordance with the Plan; (B) In cash, such as deposits in interest-bearing bank accounts, certificates of deposit, corporate or governmental obligations maturing in not more than five (5) years, financial futures contracts, deposits under a deposit administration or similar insurance contract or in a commingled or common investment account or fund established and maintained by a bank (which bank may be the Trustee), including any fixed income commingled funds maintained by the Trustee for qualified employee benefit accounts and the assets of which are invested primarily in debt obligations, in similar cash accounts 1 2 managed by investment managers appointed by CH-Twenty, or in any combination thereof as CH-Twenty determines; (C) In units of a fund, consisting of specified equity investments, such as common or capital stock of issuers, other than CH-Twenty, ARCO or any of their subsidiaries or affiliates, bonds, debentures or preferred stocks convertible into common or capital stock of such issuers, financial futures contracts, interests in any commingled or common equity fund established and maintained by an investment advisor or a bank (which bank may be the Trustee), interests in any mutual fund or other similar types of equity investments and cash equivalent short-term investments maturing in less than one year, or in any combination thereof as CH-Twenty may determine; (D) In units of a fund, consisting of specified types of fixed income investments, such as public obligations of the United States or foreign governments or their agencies, securitized financing or corporate bonds of issuers, other than CH-Twenty, ARCO or any of their subsidiaries or affiliates, debentures, financial futures contracts, interests in any commingled or common fixed income fund established and maintained by an investment advisor or bank (which bank may be the Trustee), interests in any mutual fund or other similar types of fixed income investments and cash equivalent short-term investments, or in any combination thereof as CH-Twenty may determine; (E) In units of a fund consisting of specified investments in global issuers such as common or capital stock, other than CH-Twenty, ARCO or any of their subsidiaries or affiliates, preferred stocks, securities convertible into common or capital stock of such issuers, financial futures contracts, currency futures or options, forward currency contracts, interests in any commingled or common equity fund established and maintained by an investment advisor or a bank (which bank may be the Trustee), interests in any mutual fund or other similar types of equity investments and cash equivalent investments, or similar investments or in any combination thereof as CH-Twenty may determine; (F) In units of a fund consisting of units of the funds described in Subparagraphs (C), (D) or (E), which shall be approximately 45 percent of the fund described in Subparagraph (C), 40 percent of the fund described in Subparagraph (D) and 15 percent of the fund described in Subparagraph (E), as CH-Twenty determines; or (G) The Declaration of Trust creating a commingled or common fund with respect to which the Trust participates is deemed to be part of this Trust Agreement to the same extent as if fully set forth at length." 3. The CH-Twenty Inc., Accumulation Plan Administrative Committee ("Committee") shall furnish in writing to Trustee information sufficient to enable Trustee to allocate each contribution received by Trustee among the above several classes of investments in conformity with the provisions of the Plan and the investment options elected by the Members. 4. This Paragraph is intended to authorize appointment of an investment manager as contemplated in Section 402(c)(3) of the Employee Retirement Income Security Act of 1974 ("ERISA"). CH-Twenty may appoint an investment manager with respect to some or all of the assets of the Fund. The appointment of the investment manager shall be 2 3 made by an officer of CH-Twenty or other named fiduciary authorized by a resolution of CH-Twenty's Board of Directors to make such appointments. The authority of the investment manager shall not begin until Trustee receives from CH-Twenty notice satisfactory to Trustee that the investment manager has been appointed and that the investment manager has acknowledged in writing that with respect to the relevant assets of the Fund he or she or it is a fiduciary with respect to the Plan within the meaning of ERISA. The investment manager's authority shall continue until Trustee receives similar notice that the appointment has been rescinded. By notifying Trustee of the appointment of an investment manager, CH-Twenty shall be deemed to warrant that such investment manager meets the requirements of Section 3(38) of ERISA, but Trustee may demand independent evidence that any investment manager meets those requirements. The assets with respect to which a particular investment manager has been appointed shall be segregated from all other assets held by Trustee under this Agreement and the investment manager shall have the duty and power to direct Trustee in every aspect of their investment. Upon request, Trustee shall execute appropriate powers of attorney authorizing an investment manager appointed hereunder to exercise the powers and duties of the investment manager. Trustee may rely upon any order, certificate, notice, direction or other documentary confirmation purporting to have been issued or given by an investment manager which Trustee believes to be genuine and to have been issued or given by such investment manager. Any oral direction shall be followed by a written confirmation as soon as practical. Trustee shall follow the procedures established by CH-Twenty to validate such oral directions. 5. CH-Twenty may direct that with respect to some or all of the assets of the Fund, Trustee shall be subject to the direction of a fiduciary named by CH-Twenty in a manner prescribed by its Board of Directors. In such a case, Trustee shall be subject to proper direction of such fiduciary, and CH-Twenty shall be deemed to warrant that all directions given by such fiduciary are proper, and made in accordance with the Plan, and are not contrary to the provisions of Title I of ERISA. When so appointed, such a fiduciary shall have the same powers as an investment manager appointed pursuant to Paragraph 4. The assets with respect to which a particular fiduciary has been appointed shall be segregated from all other assets held by Trustee under this Agreement and the fiduciary shall have the duty and power to direct Trustee in every aspect of their investment. Upon request, Trustee shall execute appropriate powers of attorney authorizing a fiduciary appointed hereunder to exercise the powers and duties of the investment fiduciary. Trustee may rely upon any order, certificate, notice, direction or other confirmation, whether written or oral, purporting to have been issued or given by a fiduciary which Trustee believes to be genuine and to have been issued or given by such investment fiduciary. 3 4 Any oral direction shall be followed by a written confirmation as soon as practical. Trustee shall follow the procedures established by CH-Twenty to validate such instructions. 6. When acting hereunder, whether in its discretion or at the direction of an investment manager or fiduciary named pursuant to Paragraph 4 or 5, Trustee shall have the powers granted Trustees by law and in addition shall have the power: (A) To vote any bonds or other securities of any corporation or other issuer at any time held in the trust provided that the shares of ARCO Common Stock in a Member's account shall be voted by the Trustee in accordance with the Member's instructions unless such instructions are not given within a reasonable period of time established by the Trustee; to otherwise consent to or request any action on the part of any such corporation or other issuer; to give general or special proxies or powers of attorney with or without power of substitution; to participate in any reorganization, recapitalization, merger or similar transaction with respect to such securities and to deposit such securities in any voting trust, pooling agreement or with any protective or like committee, or with a trustee, or with depositories designated thereby; to generally exercise any of the powers of an owner with respect to the securities or properties comprising the trust; to institute, compromise and defend actions and proceedings; to pay or contest any claim; to settle a claim by or against the trust by compromise, arbitration or otherwise; to release, in whole or in part, any claim belonging to the trust to the extent that the claim is uncollectible; provided that; (i) Each Member shall be entitled to direct the Trustee as to the manner in which whole shares of ARCO Common Stock credited to the Member's account shall be voted. Fractional shares of ARCO Common Stock shall be aggregated into whole shares of stock and voted by the Trustee in the same proportion as the aggregate shares which are voted by the Trustee pursuant to Members' written instructions. In the absence of voting instructions by one or more Members, the Trustee shall vote such shares in the aggregate in the same proportion as the aggregate shares which are voted by the Trustee pursuant to Members' written instructions. With respect to unallocated shares of ARCO Common Stock held in a loan suspense account, the Trustee shall vote such shares in the aggregate in the same proportion as the aggregate shares, allocated to Members' accounts, are voted by the Trustee pursuant to Members' written instructions. (ii) Each Member shall be entitled to direct the Trustee as to the manner in which rights other than voting rights attributable to whole shares of ARCO Common Stock credited to the Member's account shall be exercised. Rights attributable to fractional shares of ARCO Common Stock shall be aggregated into whole shares of stock and exercised by the Trustee in the same proportion as rights which are exercised by the Trustee pursuant to Members' written instructions. In the absence of instructions by one or more Members, the Trustee shall exercise such rights in the aggregate in the same proportion as the aggregate rights which are exercised by the Trustee pursuant to Members' written instructions. With respect to unallocated shares of ARCO Common Stock held in a loan suspense account, the Trustee shall exercise such rights in the aggregate in the same proportion as the aggregate shares, allocated to Members' accounts, are exercised by the Trustee pursuant to Members' written instructions. 4 5 (B) To hold property of the Fund in its own name or in the name of a nominee or nominees, without disclosure of the trust, or in bearer form so that it will pass by delivery; but no such holding shall relieve Trustee of its responsibility for the safe custody and disposition of the Fund in accordance with the provisions of this Agreement; Trustee's books and records shall at all times show that such property is part of the Fund; and Trustee shall be liable for any loss occasioned by the acts of its nominee or nominees with respect to securities registered in the name of the nominee or nominees as much as if such acts were the acts of Trustee; (C) To employ agents in the management of the Fund, provided that Trustee shall be responsible for the acts of such agents (other than acts of the United States Postal Service) as much as if they were acts of Trustee; (D) To make, execute and deliver, as Trustee, any conveyances, contracts, waivers, or other instruments in writing that Trustee may deem necessary or desirable in the exercise of its powers under this Agreement; (E) To apply for, purchase, hold and transfer any annuity contract for a participant in accordance with written instructions from CH-Twenty in conjunction with the termination of the Plan, provided that no such contract shall provide for a life annuity; and (F) To do all other acts that Trustee may deem necessary or proper to carry out any of the powers set forth in this Agreement or otherwise in the best interests of the Fund. (G) As directed by CH-Twenty, to borrow from any lender (including CH-Twenty or the Trustee) to finance the acquisition of ARCO Common Stock, and to make payments on such loans, giving its note as Trustee with such reasonable interest and security for the loan as may be appropriate or necessary; provided that any such borrowing shall comply with the provisions of the Plan. 7. Trustee may hold uninvested or may invest in its discretion in short-term cash equivalents (including deposits, savings accounts and certificates of deposit with its own banking department or any common or collective trust fund maintained by Trustee which satisfies such objective) (i) any amount stated by CH-Twenty or believed by Trustee to be needed in the near future for withdrawals from the Fund, or (ii) all or a portion of the proceeds of a loan described in Section 6(G) pending the acquisition of ARCO Common Stock. 8. Trustee, as and when directed by CH-Twenty (or any committee or person or entity designated for such purpose in the Plan or otherwise by CH-Twenty), shall make distributions or pay withdrawals, pay expenses of administering the Plan, buy, sell or turn in for redemption securities, and exercise or sell options, rights or warrants as shall be specified in any such direction. In the case of any such distribution or withdrawal, Trustee shall make or pay the same in cash or in kind, or in any combination thereof as provided in the direction. CH-Twenty shall hold harmless and shall defend Trustee against any liability arising or asserted to arise out of Trustee's compliance with directions under this paragraph. 5 6 9. Trustee shall be paid such reasonable compensation for its service as Trustee as shall from time to time be agreed upon by CH-Twenty and Trustee. Unless paid by CH-Twenty, such compensation, and the expenses of administration of this Trust, may be withdrawn by Trustee from the Fund. 10. Trustee shall pay out of the Fund all taxes imposed or levied with respect to the Fund or any part thereof, under existing or future laws, and at CH-Twenty's direction, may contest the validity or amount of any tax assessment, claim or demand respecting the Fund or any part thereof. 11. The following additional rules shall govern the standard of conduct and liabilities of Trustee hereunder; (A) Trustee shall perform all of its functions hereunder with the care, skill, prudence, and diligence under the circumstances then prevailing that a prudent man acting in a like capacity and familiar with such matters would use in the conduct of an enterprise of a like character and with like aims, or in accordance with such other standard as may be required from time to time by law, and shall not be liable for any conduct on its part (including reliance on advice of counsel) which conforms to that standard. (B) Trustee shall hold CH-Twenty, its subsidiaries and affiliates and each of the directors, officers or employees of CH-Twenty and of any such affiliate or subsidiary harmless (including the cost of outside counsel) against any liability or excise tax asserted against CH-Twenty or any such entity or person as a result of any breach by Trustee of any of its duties or fiduciary responsibilities. This Clause (B) shall not require Trustee to hold CH-Twenty or any other entity or person harmless against any liability or excise tax arising out of action or inaction of Trustee pursuant to or pending direction by an investment manager or fiduciary named pursuant to Paragraph 4 or 5 or by CH-Twenty pursuant to any provision of this Agreement. (C) Trustee shall not be liable for the acts or omissions of an investment manager or fiduciary appointed under Paragraph 4 or 5, and, except with respect to short-term investments under Paragraph 7, Trustee shall be under no obligation to invest or otherwise manage any asset of the Plan which is subject to the management of such investment manager or fiduciary, it being the intention of the parties that, except with respect to investments under Paragraph 7, Trustee shall have the full protection of Section 405 of ERISA. (D) Where an investment manager or fiduciary has been named pursuant to Paragraph 4 or 5 or where CH-Twenty is required to give directions to Trustee, CH-Twenty shall hold harmless and defend Trustee against any liability or excise tax arising out of Trustee's action or inaction pursuant to or pending direction by such investment manager, fiduciary or CH-Twenty. This Clause (D) shall not apply to any liability arising out of any act or omission in which Trustee knowingly participates or which Trustee knowingly undertakes to conceal, knowing such act or omission to be a breach of fiduciary responsibility. (E) When so instructed by CH-Twenty, Trustee shall deposit any assets held by it with a custodian named by CH-Twenty, and CH-Twenty shall hold 6 7 harmless and defend Trustee against any liability arising or asserted to arise out of Trustee's compliance with directions under this paragraph. Accounting By Trustee 12. Trustee shall keep accurate and detailed accounts of all investments, receipts, disbursements, withdrawals and other transactions hereunder, and all records relating thereto shall be open to inspection and audit at all reasonable times by any person or corporation designated by CH-Twenty. At such intervals as CH-Twenty may from time to time designate, and as of the date of the removal or resignation of Trustee, Trustee shall file with CH-Twenty a written account setting forth all investments, receipts, disbursements, withdrawals and other transactions effected by it during the period from the date of its last such account and a list of the assets of the Fund at the close of such period. Such account may be in the form of monthly or quarterly statements which taken together reflect the matters set forth in the preceding sentence. As between CH-Twenty and Trustee, Trustee shall be forever released and discharged from all liability with respect to the propriety of acts and transactions shown in such account, except with respect to any such act or transaction as to which CH-Twenty shall within 90 days following notification thereof have filed written objections with Trustee and except that no such accounting shall foreclose any liability of Trustee to CH-Twenty arising under Paragraph ll(B). Except as provided in Paragraph ll(B), the liability of Trustee to persons other than CH-Twenty shall be limited to actions under ERISA brought within the period permitted by law for the bringing of such actions. Removal and Resignation of Trustee 13. Trustee may be removed by CH-Twenty at any time upon not less than 30 days' written notice and Trustee may resign at any time upon not less than 90 days' written notice. In either case, such notice may be wholly or partially waived by the party to whom it is due. Upon Trustee's removal or resignation, CH-Twenty shall appoint a successor trustee who shall have the same powers and duties as those conferred upon Trustee hereunder, and upon acceptance of such appointment by the successor trustee, Trustee shall assign, transfer and pay over to such successor trustee the funds and properties then constituting the Fund. If CH-Twenty fails within a reasonable time to name a successor trustee or otherwise direct proper disbursement of the Fund, Trustee may apply to any court of competent jurisdiction for appropriate relief. Trustee may in any event reserve such reasonable sum of money as it may deem advisable, to provide for any charges against the Fund for which it may be liable, and for payment of its fees and expenses in connection with the settlement of its account or otherwise. Any balance of such reserve remaining after the payment of such fees and expenses shall be paid over as aforesaid. 14. If the Plan is wholly or partially terminated, Trustee shall disburse the portion of the Fund affected by the termination as directed by CH-Twenty. Trustee may elect to treat any such disbursement as a removal of Trustee with respect to the assets disbursed. in which case the provisions of Paragraph 13 shall apply. 15. CH-Twenty may amend this Agreement by an instrument in writing signed by an authorized officer of CH-Twenty or by any other named fiduciary authorized by a resolution of CH-Twenty's Board of Directors to sign such amendment, provided that no such amendment shall divert any part of the Fund to purposes other than payment of 7 8 benefits to Plan members and their beneficiaries or defrayal of reasonable expenses of administering the Plan, and, except with Trustee's consent, no amendment affecting the duties, responsibilities or rights of Trustee shall take effect until 30 days after a copy of said amendment is furnished to Trustee or, if Trustee gives notice of resignation within such 30-day period, until the resignation becomes effective. 16. CH-Twenty may terminate this Agreement by directing disbursement of the entire Fund pursuant to Paragraph 13. Miscellaneous 17. Prior to satisfaction of all liabilities under the Plan, no part of the Fund shall inure to the benefit of CH-Twenty or be used other than for purposes of providing benefits to Members and their beneficiaries and defraying reasonable expenses of administering the Plan. However; (A) If a contribution under the Plan is made by a mistake of fact, this paragraph shall not prohibit the return of an amount not in excess of such contribution at the direction of CH-Twenty within one year after the contribution is paid; (B) If a contribution under the Plan is expressly conditioned on initial qualification of the Plan under Section 401 of the Internal Revenue Code of 1986, as amended, and if the Plan does not qualify, or continue to so qualify, this paragraph shall not prohibit the return of an amount not in excess of such contribution at the direction of CH-Twenty within one year after the date of denial of qualification of the Plan; and (C) If a contribution under the Plan is expressly conditioned upon the deductibility of the contribution under Section 404 of the Internal Revenue Code of 1986, as amended, then, to the extent the deduction is disallowed, this paragraph shall not prohibit the return of an amount not in excess of such contribution (to the extent disallowed) at the direction of CH-Twenty within one year after the disallowance of the deduction. Trustee may demand assurance satisfactory to it that the sum of all amounts being returned from the Trust under the Plan does not exceed the amount described above. 18. This Trust is intended to be entitled to an income tax exemption under Section 501(a) of the Internal Revenue Code of 1986 and wherever possible shall be construed to carry out that intention. Trustee may demand assurances satisfactory to it that any action it is directed to take will not adversely affect the tax exemption of the Trust. 19. Any successor in interest to Trustee shall automatically become Trustee hereunder. 20. Any successor to all or part of the business of CH-Twenty may become a party to this Agreement and, with respect to assets of the Fund which CH-Twenty warrants to Trustee are allocable to such successor, this Agreement shall be deemed to create a separate trust composed of such assets and administered according to this 8 9 Agreement, except that such successor shall be substituted for CH-Twenty for all purposes hereunder. 21. Unless otherwise provided in this Agreement, any communications (including notices, instructions, or directions) required or permitted hereunder to be given by CH-Twenty shall be given in writing addressed to the trust officer with whom CH-Twenty customarily deals and signed by the officer delegated such power, or any other person or persons whom CH-Twenty notifies Trustee are from time to time authorized to sign such communications. CH-Twenty shall furnish Trustee specimen signatures of all persons authorized to sign communications to Trustee. 22. If any payment mailed by regular U.S. Mail to the last address of the payee furnished by CH-Twenty is returned unclaimed, Trustee shall so notify CH-Twenty and shall discontinue further payments to such payee until it received further instructions of CH-Twenty. 23. No amount held hereunder shall be subject to voluntary or involuntary alienation or to the claims of any creditor. 24. This Agreement shall be controlled by the law of the State of Massachusetts in all respects in which the law is not inconsistent with ERISA. 25. This Agreement may be executed in counterparts, each of which shall be an original although the others are not produced. IN WITNESS WHEREOF, the parties have caused this Agreement to be executed the date first written above. ATTEST: CH-TWENTY, INC. By: - ------------------- ---------------------------------- BEVERLY L. HAMILTON As named fiduciary appointed by the Board of Directors of CH-Twenty, Inc., with power and authority to negotiate, execute and deliver this Trust Agreement on behalf of CH-Twenty, Inc. ATTEST: STATE STREET BANK AND TRUST COMPANY As Trustee for CH-Twenty, Inc., Savings Plan By: - ------------------- ---------------------------------- 9 EX-5.1 8 OPINION OF DIANE A. WARD, ESQ. DATED AUG.6, 1997 1 EXHIBIT 5.1 ARCO [LOGO] Legal 515 South Flower Street Mailing Address: Box 2679 -- T.A. Los Angeles, California 90051 Telephone (213) 486-2808 Diane A. Ward Senior Counsel -- Securities and Finance August 6, 1997 Securities and Exchange Commission 450 Fifth Street, N.W. Washington, D.C. 20549 Re: Registration Statement on Form S-8 (No. 333-________) Canyon Fuel Company, LLC Capital Accumulation Plan CH-Twenty, Inc. Capital Accumulation Plan CH-Twenty, Inc. Savings Plan Ladies and Gentlemen: As Senior Counsel of Atlantic Richfield Company (the "Company"), I have reviewed the Canyon Fuel Company, LLP Accumulation Plan, the CH-Twenty, Inc. Capital Accumulation Plan, and the CH-Twenty, Inc. Savings Plan as effective July 1, 1997 (the "Plans"), and have considered the proposed issuance of interests in the Plans and the sale of shares of the Company's Common Stock, par value $2.50 per share (the "Common Stock"), thereunder. This opinion is furnished as an exhibit to the above-referenced Registration Statement. Based on such examination of corporate records, documents and questions of law as I have considered necessary, I am of the opinion that: 1. When the shares of the Common Stock are sold in the manner contemplated by the Registration Statement, they will be legally issued, fully paid, and non-assessable; and 2. When the interests in the Plans are issued in the manner contemplated by the Registration Statement, they will be legally issued. I consent to the filing of this opinion as an exhibit to the Registration Statement referred to above and to the use of my name in the Registration Statement under the caption "Interests of Named Experts and Counsel." Very truly yours, /s/ DIANE A. WARD Diane A. Ward EX-23.1 9 CONSENT OF COOPERS & LYBRAND LLP 1 EXHIBIT 23.1 CONSENT OF INDEPENDENT ACCOUNTANTS We consent to the incorporation by reference in this registration statement on Form S-8 (Registration No. 333- ), relating to the Canyon Fuel Company, LLC Capital Accumulation Plan, the CH-Twenty, Inc. Capital Accumulation Plan and the CH-Twenty, Inc. Savings Plan, of our report dated February 12, 1997, on our audits of the financial statements and financial statement schedule of Atlantic Richfield Company. COOPERS & LYBRAND L.L.P. Los Angeles, California August 6, 1997 EX-24 10 POWER OF ATTORNEY 1 EXHIBIT 24 POWERS OF ATTORNEY Each person whose signature appears below hereby constitutes and appoints Anthony G. Fernandes, Marie L. Knowles, William E. Wade, Jr., Bruce G. Whitmore, Terry G. Dallas and Allan L. Comstock, and each of them, his or her true and lawful attorneys-in-fact and agents, with full power of substitution and resubstitution, for him or her and in his or her name, place and stead, in any and all capacities, in connection with the issuance of any securities authorized by the Board of Directors of Atlantic Richfield Company (the "Company") or by the Executive Committee thereof pursuant to due authorization by such Board for issuance by the Company, (1) to execute and file, or cause to be filed, with the Securities and Exchange Commission (the "Commission"), (A) Registration Statements and any and all Amendments (including post-effective amendments) thereto and to file, or cause to be filed, all exhibits thereto and other documents in connection therewith as required by the Commission in connection with such registration under the Securities Act of 1933, as amended, and (B) any report or other document required to be filed by the Company with the Commission pursuant to the Securities Exchange Act of 1934, as amended, (2) to executive and file, or cause to be filed, any application for registration or exemption therefrom, any report or any other document required to be filed by the Company under the Blue Sky or securities laws of any of the United States, and to furnish any other information required in connection therewith, (3) to execute and file, or cause to be filed, any application for registration or exemption therefrom under the securities laws of any jurisdiction outside the United States, including any reports or other documents required to be filed subsequent to the issuance of such securities, and (4) to execute and file, or cause to be filed, any application for listing such securities on the New York Stock Exchange, the Pacific Stock Exchange, the London Stock Exchange or any other securities exchange in any other jurisdiction where any such securities are proposed to be sold, granting to such attorneys-in-fact and agents, and each of them, full power and authority to do and perform each and every act required to be done as he or she might or could do in person, hereby ratifying and confirming all that such attorneys-in-fact and agents, and each of them, may lawfully do or cause to be done by virtue of this power of attorney. Each person whose signature appears below may at any time revoke this power of attorney as to himself or herself only by an instrument in writing specifying that this power of attorney is revoked as to him or her as of the date of execution of such instrument or at a subsequent specified date. This power of attorney shall be revoked automatically with respect to any person whose signature appears below effective on the date he or she ceases to be a member of the Board of Directors or an officer of the Company. Any revocation hereof shall not void or otherwise affect any acts performed by any attorney-in-fact and agent named herein pursuant to this power of attorney prior to the effective date of such revocation. Dated as of May 5, 1997. Signature Title --------- ----- ___________________________ Chairman of the Board, Mike R. Bowlin Chief Executive Officer Principal Executive Officer and President 2 Signature Title --------- ----- /s/ ANTHONY G. FERNANDES Executive Vice President - --------------------------------- and Director Anthony G. Fernandes /s/ MARIE L. KNOWLES Executive Vice President, - --------------------------------- Chief Financial Officer Marie L. Knowles and Director Principal financial officer /s/ WILLIAM E. WADE, JR. Executive Vice President - --------------------------------- and Director William E. Wade, Jr. /s/ FRANK D. BOREN Director - --------------------------------- Frank D. Boren /s/ LODWRICK M. COOK Director - --------------------------------- Lodwrick M. Cook Director - --------------------------------- Richard H. Deihl /s/ JOHN GAVIN Director - --------------------------------- John Gavin /s/ HANNA H. GRAY Director - --------------------------------- Hanna H. Gray 2 3 Signature Title --------- ----- /s/ KENT KRESA Director - ------------------------------- Kent Kresa /s/ DAVID T. MCLAUGHLIN Director - ------------------------------- David T. McLaughlin /s/ JOHN B. SLAUGHTER Director - ------------------------------- John B. Slaughter /s/ HENRY WENDT Director - ------------------------------- Henry Wendt /s/ ALLAN L. COMSTOCK Vice President and - ------------------------------- Controller Allan L. Comstock Principal Accounting Officer 3 4 POWER OF ATTORNEY Each person whose signature appears below hereby constitutes and appoints Anthony G. Fernandes, Marie L. Knowles, William E. Wade, Jr., Michael E. Wiley, Bruce G. Whitmore, Terry C. Dallas and Allan L. Comstock, and each of them, his or her true and lawful attorneys-in-fact and agents, with full power of substitution and resubstitution, for him or her and in his or her name, place and stead, in any and all capacities, in connection with the issuance of any securities authorized by the Board of Directors of Atlantic Richfield Company (the "Company") or by the Executive Committee thereof pursuant to due authorization by such Board for issuance by the Company, (1) to execute and file, or cause to be filed, with the Securities and Exchange Commission (the "Commission"), (A) Registration Statements and any and all amendments (including post-effective amendments) thereto and to file, or cause to be filed, all exhibits thereto and other documents in connection therewith as required by the Commission in connection with such registration under the Securities Act of 1933, as amended, and (B) any report or other document required to be filed by the Company with the Commission pursuant to the Securities Exchange Act of 1934, as amended, (2) to execute and file, or cause to be filed, any application for registration or exemption therefrom, any report or any other document required to be filed by the Company under the Blue Sky or securities laws of any of the United States, and to furnish any other information required in connection therewith, (3) to execute and file, or cause to be filed, any application for registration or exemption therefrom under the securities laws of any jurisdiction outside the United States, including any reports or other documents required to be filed subsequent to the issuance of such securities, and (4) to execute and file, or cause to be filed, any application for listing such securities on the New York Stock Exchange, the Pacific Stock Exchange, the London Stock Exchange or any other securities exchange in any other jurisdiction where any such securities are proposed to be sold, granting to such attorneys-in-fact and agents, and each of them, full power and authority to do and perform each and every act required to be done as he or she might or could do in person, hereby ratifying and confirming all that such attorneys-in-fact and agents, and each of them, may lawfully do or cause to be done by virtue of this power of attorney. Each person whose signature appears below may at any time revoke this power of attorney as to himself or herself only by an instrument in writing specifying that this power of attorney is revoked as to him or her as of the date of execution of such instrument or at a subsequent specified date. This power of attorney shall be revoked automatically with respect to any person whose signature appears below effective on the date he or she ceases to be a member of the Board of Directors or an officer of the Company. Any revocation hereof shall not void or otherwise affect any acts performed by any attorney-in-fact and agent named herein pursuant to this power of attorney prior to the effective date of such revocation. Dated as of August 4, 1997. Signature Title --------- ----- /s/ MIKE R. BOWLIN Chairman of the Board --------------------------- Chief Executive Officer Mike R. Bowlin and President Principal executive officer 5 POWER OF ATTORNEY Each person whose signature appears below hereby constitutes and appoints Anthony G. Fernandez, Marie L. Knowles, William E. Wade, Jr., Michael E. Wiley, Bruce G. Whitmore, Terry C. Dallas and Allan L. Comstock, and each of them, his or her true and lawful attorneys-in-fact and agents, with full power of substitution and resubstitution, for him or her and in his or her name, place and stead, in any and all capacities, in connection with the issuance of any securities authorized by the Board of Directors of Atlantic Richfield Company (the "Company") or by the Executive Committee thereof pursuant to due authorization by such Board for issuance by the Company, (1) to execute and file, or cause to be filed, with the Securities and Exchange Commission (the "Commission"), (A) Registration Statements and any and all amendments (including post-effective amendments) thereto and to file, or cause to be filed, all exhibits thereto and other documents in connection therewith as required by the Commission in connection with such registration under the Securities Act of 1933, as amended, and (B) any report or other document required to be filed by the Company with the Commission pursuant to the Securities Exchange Act of 1934, as amended, (2) to execute and file, or cause to be filed, any application for registration or exemption therefrom, any report or any other document required to be filed by the Company under the Blue Sky or securities laws of any of the United States, and to furnish any other information required in connection therewith, (3) to execute and file, or cause to be filed, any application for registration or exemption therefrom under the securities laws of any jurisdiction outside the United States, including any reports or other documents required to be filed subsequent to the issuance of such securities, and (4) to execute and file, or cause to be filed, any application for listing such securities on the New York Stock Exchange, the Pacific Stock Exchange, the London Stock Exchange or any other securities exchange in any other jurisdiction where any such securities are proposed to be sold, granting to such attorneys-in-fact and agents, and each of them, full power and authority to do and perform each and every act required to be done as he or she might or could do in person, hereby ratifying and confirming all that such attorneys-in-fact and agents, and each of them, may lawfully do or cause to be done by virtue of this power of attorney. Each person whose signature appears below may at any time revoke this power of attorney as to himself or herself only by an instrument in writing specifying that this power of attorney is revoked as to him or her as of the date of execution of such instrument or at a subsequent specified date. This power of attorney shall be revoked automatically with respect to any person whose signature appears below effective on the date he or she ceases to be a member of the Board of Directors or an officer of the Company. Any revocation hereof shall not be void or otherwise affect any acts performed by any attorney-in-fact and agent named herein pursuant to this power of attorney prior to the effective date of such revocation. Dated as of August 4, 1997. Signature Title --------- ----- /s/ MICHAEL E. WILEY Executive Vice President ---------------------- and Director Michael E. Wiley -----END PRIVACY-ENHANCED MESSAGE-----