Summary Plan Description January 1, 2015 TIDELANDS OIL PRODUCTION COMPANY EMPLOYEES PENSION PLAN

Transcription

1 Summary Plan Description January 1, 2015 TIDELANDS OIL PRODUCTION COMPANY EMPLOYEES PENSION PLAN

2 Table of Contents HIGHLIGHTS... 1 DEFINITIONS... 3 ELIGIBILITY TO PARTICIPATE... 5 NORMAL RETIREMENT... 5 NORMAL RETIREMENT... 6 POSTPONED RETIREMENT... 7 EARLY RETIREMENT... 7 DEFERRED VESTED RETIREMENT... 8 DISABILITY RETIREMENT... 9 HOW YOUR BENEFITS ARE PAID Automatic Forms of Payment Optional Forms of Payment Single Life Annuity Option Joint and Survivor Annuity Option or 15-Year Certain and Life Annuity Option Social Security Level Income Option Lump Sum Option SPOUSE S BENEFIT IN THE EVENT OF DEATH APPLYING FOR BENEFITS SITUATIONS THAT MAY AFFECT YOUR PLAN BENEFIT Overview OTHER IMPORTANT PROVISIONS Assignment of Your Benefits Mergers, Consolidations, and Transfers Military Leave Missing Persons No Implied Promises Qualified Domestic Relations Orders (QDROs) Rollovers BENEFIT CLAIMS AND APPEALS PROCEDURES General Information about Claims Time Period for Responding to Initial Claim i

3 Information Provided if Initial Claim is Denied Appeal Procedure if Initial Claim is Denied Information Provided if Appeal is Denied Legal Proceedings PLAN CONTINUATION BENEFIT INSURANCE ADDITIONAL INFORMATION YOUR ERISA RIGHTS ii

4 TIDELANDS OIL PRODUCTION COMPANY EMPLOYEES PENSION PLAN HIGHLIGHTS This booklet is the summary plan description (Summary) for the participants of the Tidelands Oil Production Company Employees Pension Plan (Plan). This booklet explains who is eligible to participate, when you can begin receiving a benefit, and how your benefit is determined. You and your spouse should read the booklet now to become familiar with your benefit from the Plan, and then keep it for future reference. If you have any questions, please contact the CRC Pension Service Center at Here are some additional highlights. Certain terms that have special meanings are defined in the DEFINITIONS section of this Summary. Additional details are provided in the remainder of this booklet. Tidelands Oil Production Company (Tidelands) provides this Plan at no cost to you, making your lifetime benefits especially valuable. To participate in the Plan, you must be or have been an eligible employee at Tidelands. Participation in the Plan is automatic, beginning on your date of hire. Normal retirement age is age 65, but you may retire as early as age 55 if you meet certain service requirements. You may also postpone retirement. The amount of your benefit is based on your years of employment and pay with the California Resources Corporation family of companies. You may earn the right to receive a benefit even if you leave CRC before retirement. If, while employed by CRC, you become totally disabled, as defined by the Plan, and have the required years of service under the Plan, you may commence payment of a disability benefit under the Plan. The Plan may provide a benefit to your spouse if you die before commencement of your retirement benefit with a Vested right to a benefit. The Plan may provide a benefit to your spouse or other beneficiary if you die after commencement of retirement benefits. Plan benefits are paid in addition to retirement benefits that you may receive through Social Security. 1

5 This booklet summarizes your pension benefit so that you can understand how the Plan operates. Although this booklet covers many of the principal features of the Plan, it is only a summary. The complete provisions are contained in the official Plan document. If you wish, you can review or obtain a copy of the Plan document see the YOUR ERISA RIGHTS section for more information. All benefits described in this Summary are subject to the terms of the Plan document and trust agreement. The Plan is administered according to the Plan document and trust agreement. The Plan Administrator has the power to construe and interpret the Plan, to supply all omissions from, correct deficiencies in, and resolve ambiguities in, the language of the Plan and trust. If there is any conflict between this booklet and the legal documents, the Plan document and trust agreement will govern. The Summary reflects the Plan provisions in effect on January 1,

6 DEFINITIONS Throughout this Summary, certain terms will be used that have special meanings under the Plan. For your convenience, these terms are defined below. Active Participant means an employee or former employee of Tidelands who has satisfied the requirements to participate in the Plan as described under ELIGIBILITY TO PARTICIPATE below, and who has not separated from service with CRC. Benefit Service is used to determine the amount of your Plan benefit. Effective January 1, 2007, you will earn one month of Benefit Service for each month during which you are credited with at least an Hour of Service as an Active Participant under the Plan. You are also credited with any Benefit Service that you had accumulated as of December 31, 2006 (including your service as a member of the Long Beach Oil Development Company Employees Pension Plan). Your Benefit Service earned prior to your termination will be reinstated if you are rehired by CRC, as long as you have not received a total payout of your accrued benefit and you complete a Year of Vesting Service upon reemployment. Benefit Service is determined in completed years and months. Break-in-Service means any 12-month period beginning on your date of hire and anniversaries thereafter during which you are credited with less than 501 Hours of Service. Compensation is generally your base pay and any shift differential paid to you as an Active Participant during the Plan Year (including amounts contributed by salary reduction to a 401(k) plan or other benefit plan paid for with pre-tax dollars). Compensation, however, does not include eligible bonuses, scheduled overtime, and any other special consideration such as unscheduled overtime or other extra compensation. In addition, Federal law prohibits the Plan from basing your Plan benefit on Compensation in excess of $265,000 (for 2015 Plan Year, indexed for inflation) for any Plan Year. CRC refers to the California Resources Corporation family of companies. Early Retirement Date refers to the first day of any month following your 55 th birthday and prior to your Normal Retirement Date in which you may retire with an unreduced Vested benefit upon completing five Years of Vesting Service. Final Average Earnings is your average monthly Compensation working for CRC as an Active Participant for the 36 consecutive months during which your Compensation is highest. Only the last 120 months of your employment will be considered for this calculation. Hours of Service count toward determining your Plan benefits and your eligibility to receive them. You receive one Hour of Service for each hour that CRC pays you, or for which you are entitled to payment. This includes, within certain limits under the Plan, the accrual of Hours of Service for absences due to vacation, holidays, illness, incapacity (including disability), layoff, jury or military duty, and leave of absence. You accrue a maximum of 501 hours for any period in which you are absent from work. Finally, you might accrue Hours of Service in the event that back pay is awarded or agreed to by CRC. Solely, for purposes of determining whether you have incurred a Break in Service, you will earn eight Hours of Service per day for absences from work for maternity or paternity reasons. 3

7 Normal Retirement Date refers to the first day of the month on or after your 65th birthday. Oxy refers to Tidelands and the Occidental Petroleum Corporation family of companies. Plan means the Tidelands Oil Production Company Employees Pension Plan. Plan Administrator means Tidelands Oil Production Company. Plan Year is each 12 month period beginning January 1 and ending December 31. Social Security Covered Compensation is the average of the taxable Social Security wage bases for the 35 calendar years ending with the calendar year which includes your Social Security Retirement Age. Social Security Retirement Age (SSRA) is 65 if your birth year is before If your birth year is between 1938 and 1954, your Social Security Retirement Age is 66. If your birth year is after 1954, your Social Security Retirement Age is 67. Tidelands refers to Tidelands Oil Production Company. Union refers to the United Steel Paper and Forestry, Rubber, Manufacturing, Energy, Allied Industrial and Service Workers International Union, AFL-CIO, CLC on behalf of Its Carson, California Local 675. Vesting or Vested refers to your right to receive benefits under the Plan, whether or not you continue working for CRC until retirement. You become fully Vested with at least five Years of Vesting Service, or upon attainment of age 65 during CRC employment, whichever is earlier. Years of Vesting Service is used to determine your eligibility to receive benefits under the Plan. Effective January 1, 2007, you will receive one full year of Vesting Service for each Plan Year during which you are credited with at least 1,000 Hours of Service with CRC. You will also be credited with the Years of Vesting Service that you had accrued under the Plan as of December 31, 2006 at Oxy. Years of Vesting Service is determined in completed years and months. 4

8 ELIGIBILITY TO PARTICIPATE Newly Hired Employees If you are an employee of Tidelands covered by a collective bargaining agreement between Tidelands and the Union, you are eligible to participate in the Plan effective on your date of hire. You are not eligible to participate in the Plan if you are a leased employee, an employee of a non-participating affiliate or employer, an employee who is a nonresident alien with no U.S. sourced income, or an employee covered by a collective bargaining agreement other than the one between Tidelands and the Union. Rehired Employees If you used to work for Tidelands and were a Plan participant, and you are later rehired by Tidelands, you automatically become a participant once again on your rehire date as long as you are an eligible employee as described in the previous paragraph. NORMAL RETIREMENT If you retire on your Normal Retirement Date, you are entitled to a normal retirement benefit as described below. The formula used to calculate your monthly benefit at your Normal Retirement Date is: (1) 1.175% of your Final Average Earnings multiplied by your Benefit Service, plus (2) 0.42% of your Final Average Earnings in excess of your Social Security Covered Compensation multiplied by your Benefit Service (not to exceed 35 years 1 ), less (3) 0.3% of your Final Average Earnings multiplied by the number of years you were a participant in the Long Beach Oil Development Company Savings and Investment Plan (LBOD Plan) during the period beginning September 1, 1964 to December 31, This is the benefit you will receive if you work until your Normal Retirement Date and choose the Single Life Annuity form of payment. (The different forms of payment available to you will be discussed under HOW YOUR BENEFITS ARE PAID.) 5

9 NORMAL RETIREMENT Here is an example of how the Normal Retirement benefit would be calculated: Suppose that you retire on your Normal Retirement Date at age 65 with 40 years of Benefit Service. Your Final Average Earnings is $8,400 per month and your Social Security Covered Compensation is $6,545 per month. You were a participant in the LBOD Plan for five (5) years; however, you had not participated in another CRC qualified retirement or simplified employee pension plan. Your monthly benefit at Normal Retirement would be equal to: x Final Avg Earnings $98.70 ( x $8,400) x Benefit Service x 40 $3, per month.0042 x Final Avg Earnings in excess of Social Security Covered Compensation $7.79 (.0042 x ($8,400-$6,545)) x Benefit Service (up to 35 years) x 35 $ per month.003 x Final Ave Earnings x Yrs of participation in the LBOD Plan ($126.00) (.003 x $8,400 x 5 yrs) Monthly benefit at Normal Retirement = $4, ($3, ($ $126.00)) plus less 1 If you also participated in another CRC qualified retirement or simplified employee pension plan, your years of participation in such plans will be deducted from this 35 year maximum period. 6

10 POSTPONED RETIREMENT You may decide to continue working for CRC after you turn age 65. If this happens, you won t receive your Plan benefit until your postponed retirement date. This is the first day of the month on or after the date you stop working for CRC. Your postponed retirement benefit will be an amount that is the greater of (i) your accrued benefit as of your Normal Retirement Date, increased at an annual rate of 8% for each year that you continue in employment as an Active Participant past your Normal Retirement Date, or (ii) your accrued benefit based on your Final Average Earnings and Benefit Service as of your deferred retirement date. EARLY RETIREMENT If you have completed at least five Years of Vesting Service and are at least 55 years old, you may retire prior to your Normal Retirement Date without having your benefit reduced. You may elect to begin receiving benefit payments on the first day of the month coincident with, or next following, your 55 th birthday. If you are eligible for an early retirement benefit, the amount of your benefit will be determined by the same method as that used for normal retirement, but the calculation will be based on your Final Average Earnings and Benefit Service as of your Early Retirement Date. Here s an example of how the Early Retirement benefit would be calculated: Let s assume that you retire at age 55 with 15 years of Benefit Service. Your Final Average Earnings is $8,400 per month, and Your Social Security Covered Compensation is $6,545 per month. You were never a participant in the LBOD Plan, nor had you participated in another CRC qualified retirement or simplified employee pension plan. Your monthly benefit at Early Retirement would be equal to: x Final Avg Earnings $98.70 ( x $8,400) x Benefit Service x 15 $1, per month.0042 x Final Avg Earnings in excess of Social Security Covered Compensation $7.79 (.0042 x ($8,400-$6,545)) x Benefit Service (up to 35 years) x 15 $ per month.003 x Final Avg Earnings x Yrs of participation in the LBOD Plan $0.00 (.003 x $8,400 x 0 yrs) Monthly benefit at Early Retirement = $1, ($ ($ $0.00)) plus less 7

11 DEFERRED VESTED RETIREMENT If you have at least five years of Vesting Service 1, but have not attained age 55 when your employment terminates, then you will be eligible for an unreduced deferred Vested retirement benefit and you may elect to begin receiving benefit payments on the first day of the month coincident with, or next following, your 55 th birthday. If you are eligible for a deferred Vested retirement benefit, the amount of your benefit will be determined by the same method as that used for normal retirement, but the calculation will be based your Final Average Earnings and Benefit Service as of the date you leave CRC. Here s an example of how your benefit would be calculated if you terminated employment on your 50 th birthday with a deferred Vested benefit: Let s assume that you have 10 years of Benefit Service, your Final Average Earnings is $8,400 per month, your Social Security Covered Compensation is $6,545 per month, and you were never a participant in the LBOD Plan, nor had you participated in another CRC qualified retirement or simplified employee pension plan. You elect to commence receiving your benefit at age 55. Your monthly benefit at Deferred Vested Retirement would be equal to: x Final Avg Earnings $98.70 ( x $8,400) x Benefit Service x 10 $ per month.0042 x Final Avg Earnings in excess of Social Security Covered Compensation $7.79 (.0042 x ($8,400 - $6,545)) x Benefit Service (up to 35 years) x 10 $77.91 per month.003 x Final Avg Earnings x Yrs of participation in the LBOD Plan $0.00 (.003 x $8,400 x 0 yrs) Monthly benefit at Deferred Retirement = $1, ($ ($ $0.00)) plus less 1 For purposes of determining your eligibility for a deferred Vested benefit, your Years of Vesting Service includes your employment by Arco or Powerine Oil Company on the Parcel A Lease if you were transferred to, or employed by Long Beach Oil Development Company (LBOD) during February 1986 and were still employed by LBOD on March 1, 1986; or your employment by LBOD if you were transferred to or employed by TOPKO during March 1989 and still employed by TOPKO on April 1,

12 DISABILITY RETIREMENT If, while employed by CRC, you are determined to be physically or mentally incapable of performing your work responsibilities in accordance with the Plan Administrator s approved disability leave policies, you will be determined to be totally disabled and entitled to a disability retirement benefit under the Plan. You may elect to begin receiving your disability retirement benefit on the first day of the month following your total disability. This is known as your disability retirement date. The amount of your disability retirement benefit is the actuarial equivalent of your accrued benefit, determined by the same method used for normal retirement, using Final Average Earnings and Benefit Service to your disability retirement date, except that it will also reflect additional Benefit Service earned after the expiration of your Tidelands sick pay benefits for each month you are disabled up to a maximum of two years. Here is an example of how your benefit would be calculated if you became totally disabled: Let s assume that you have 10 years of Benefit Service as of your disability retirement date, plus you earned two additional years after your sick pay benefits expired, for a total of 12 years of Benefit Service. Your Final Average Earnings is $8,400 per month, your Social Security Covered Compensation is $6,545 per month, and you were never a participant in the LBOD Plan, nor had you participated in another CRC qualified retirement or simplified employee pension plan. Your monthly benefit at Disability Retirement would be equal to: x Final Avg Earnings $98.70 ( x $8,400) x Benefit Service x 12 $1, per month.0042 x Final Avg Earnings in excess of Social Security Covered Compensation $7.79 (.0042 x ($8,400-$6,545)) x Benefit Service (up to 35 years) x 12 $93.49 per month.003 x Final Avg Earnings x Yrs of participation in the LBOD Plan $0.00 (.003 x $8,400 x 0 yrs) Monthly benefit at Disability Retirement = $1, ($ ($ $ 0.00)) plus less 9

13 HOW YOUR BENEFITS ARE PAID Automatic Forms of Payment Unless you choose otherwise in writing, your retirement benefit automatically will be paid to you in a certain manner depending upon whether or not you are married when your benefit payments begin. Note that if the total present value of your Plan benefit is less than $1,000, in lieu of the benefit options below, it will automatically be paid to you in one lump sum payment. If you are not married when your benefit payments begin, unless you elect otherwise in writing, your payments will be in the form of a Single Life Annuity. This means that you will receive your benefit payments each month beginning on your benefit commencement date. These monthly payments will continue for the rest of your life, but will cease entirely upon your death. If you are married when your benefit payments begin, unless you elect otherwise in writing and provide your spouse s notarized written consent to your election, your benefit will be paid in the form of a 50% Qualified Joint and Survivor Annuity. This means that the amount of your monthly benefit payment will be permanently reduced; then, if you die before your spouse does, your spouse will receive lifetime monthly payments equal to 50% of the reduced amount that you were receiving. The reduction in the amount of your monthly benefit payment occurs to account for the possibility that, after you die, reduced payments will continue to your spouse for as long as your spouse lives. The amount by which your monthly benefit payment is reduced depends upon the ages of you and your spouse as of your benefit commencement date. The reduction is determined using actuarial equivalent factors provided by the Plan s actuaries. Only the spouse to whom you are married at the time your benefit payments begin can qualify to receive a continuation benefit once payments to you start. If your spouse dies before you do, but after payments to you begin, you cannot then designate another person to receive benefit payments when you die, nor will the amount of your monthly payment increase. Instead, the reduced monthly payment amount will remain in effect for your lifetime, and benefit payments will cease entirely upon your death. Example of 50% Qualified Joint and Survivor Annuity: A married employee retires at age 65 and elects to begin receiving a Vested benefit payment of $ 2, per month. The employee s spouse is 62 years old. Under the 50% Qualified Joint and Survivor Annuity payment form, the retiree s monthly benefit amount will be actuarially reduced to $ 2, per month. If the retiree dies first, the surviving spouse will receive 50% of the reduced benefit amount, or $ 1, per month, for life. Remember, your benefits automatically will be paid in the 50% Qualified Joint and Survivor Annuity form of payment if you are married at the time your benefit payments begin, unless you elect another form of payment in writing, and provide your spouse s notarized written consent to your election. The CRC Pension Service Center will be able to answer any questions you may have about the automatic forms of payment. 10

14 Optional Forms of Payment Subject to Plan provisions, you may be eligible to elect one of the alternative payment options described below instead of receiving benefit payments in one of the automatic forms. All payment forms are designed to be of equal value, measured over differing periods of time. You will receive more detailed information about the form of payment options, and the relative financial impact of each, when you notify the CRC Pension Service Center of your intent to commence benefit payments. Single Life Annuity Option This form of payment provides you with a monthly benefit for as long as you live. There will be no additional payments made to your spouse or other beneficiary after your death. Joint and Survivor Annuity Option This option is similar to the 50% Qualified Joint and Survivor Annuity automatic form of payment described earlier. A Joint and Survivor Annuity pays you a reduced monthly benefit for as long as you live. At time of commencement, you may choose a specific percentage of 66 2/3, 75 or 100 percent to be paid to your surviving spouse or other designated beneficiary following your death. Depending on which percentage you choose, after your death, that percentage of your monthly income will be paid to your spouse or other designated beneficiary for as long as that person lives. Before you commence benefit payments, you must designate your beneficiary and the percentage you want. Once payments begin, neither of these choices may be changed. 10 or 15-Year Certain and Life Annuity Option This form pays you a monthly benefit for as long as you live. If you die before receiving 120 or 180 monthly payments (10 or 15 years, respectively), then further payments will be made to your designated beneficiary to the end of the 120 or 180 payments. Social Security Level Income Option This option is available to you if you elect to retire early, prior to age 62. You will receive monthly benefit payments for your lifetime, with no further payments after your death. Under this form of payment, however, your monthly benefit payment is higher before age 62 than it is after age 62 when you may qualify to receive Social Security retirement benefits. Choosing this option may keep your retirement income relatively level before and after you start to receive Social Security benefits. You are not required to begin your Social Security benefits even if you chose a Social Security Level Income Option. Lump Sum Option This option pays you a single cash payment of the actuarial equivalent of your retirement benefit accrued up to your date of separation. Regarding Joint & Survivor Annuity and 10 or 15 Year Certain and Life Annuity options above, if you choose someone other than your spouse to receive continuing benefit payments after your death, the actuarial value of the benefit payments to your designated beneficiary must be 50% or less than the actuarial value of your Vested benefit, paid on a Straight Life Annuity basis, as of the earlier of (i) your normal retirement date, or (ii) the date on which you become entitled to receive retirement benefit payments. 11

15 SPOUSE S BENEFIT IN THE EVENT OF DEATH If you should die after you have five Years of Vesting Service, your spouse (to whom you have been married for at least one year before your death) will receive a monthly benefit. If you die before your 55 th birthday, your surviving spouse may request that lifetime benefit payments begin on the first day of the month coincident with, or next following, the date you would have attained age 55. It will be at least equal to the monthly benefit that would have been payable to you if you had: (1) Ended employment on the earlier of (i) the date of your death, or (ii) the actual date you left CRC; (2) Survived until age 55; (3) Began receiving a 50% Qualified Joint and Survivor Annuity benefit; and (4) Died on the day you would have attained age 55. Your surviving spouse may elect to defer receiving benefit payments beyond the date of your 55 th birthday, but not beyond April 1 st of the calendar year following that in which you would have attained age 70 1/2. If so, your spouse s benefit will be adjusted actuarially to reflect the delayed commencement of benefits. If you should die on or after your 55th birthday with five or more Years of Vesting Service, your surviving spouse may request that lifetime payments begin on the first day of the month coincident with, or next following, your date of death. Your spouse may elect to defer receiving benefit payments, but not beyond April 1 st of the calendar year following that in which you would have attained age 70 1/2 (your spouse s benefit will be adjusted actuarially to reflect the delayed commencement of benefits). If you are still employed by CRC, your spouse will receive a monthly benefit that is at least equal to the monthly benefit you would have received if you had retired and immediately commenced receiving a 50% Qualified Joint and Survivor Annuity benefit (described above) on the day before your death. If you had previously terminated employment with CRC but had not commenced receiving your retirement benefit, your spouse s benefit will be determined as if you immediately commenced receiving a 50% Qualified Joint and Survivor Annuity benefit on the day before your death. APPLYING FOR BENEFITS To ensure that you have enough time to choose the form of payment that best meets your financial needs, and to allow sufficient time for administrative processing, you should notify CRC Pension Service Center at least 90 days before the date on which you are planning to retire. If you leave CRC or become disabled, you should contact the CRC Pension Service Center to determine the benefits to which you may be entitled. If you die, your surviving spouse or beneficiary should contact the CRC Pension Service Center to determine the benefits to which he or she may be entitled. 12

16 You must complete an application to begin your retirement benefit using the form prescribed by the Plan Administrator. Your completed application must be filed with the CRC Pension Service Center at least 30 days prior to the date you would like your retirement benefit to commence. You must have been a participant in the Plan who has terminated employment with CRC at the time your retirement benefit is to begin. You will receive an option/ waiver form not later than 90 days before your normal or postponed retirement date. If you elect to retire early, you should file your election at least 90 days before your actual retirement date. Your retirement benefit may be subject to federal and state tax withholding once payments begin. If you have any questions concerning your benefits, please contact the CRC Pension Service Center. SITUATIONS THAT MAY AFFECT YOUR PLAN BENEFIT The Plan is designed to provide you with a source of income when your employment ends. However, some situations could affect your Plan benefit. Overview Your benefit payments may be paid at a different time or in an amount less than you anticipated under certain circumstances summarized below: If You Leave CRC. If you leave CRC after you become Vested, you are eligible to commence retirement benefits as previously described above. In general, if you leave CRC before you are Vested, you will forfeit the value of your Plan benefit. You may, however, retain credit for your accrued Years of Vesting Service if you have less than five Years of Vesting Service at the time that you leave. In that event, you will retain credit for your previous Years of Vesting Service only if you are re-employed by CRC before you incur five consecutive Breaks in Service (as defined in the section entitled DEFINITIONS). Once you have five or more consecutive Breaks in Service, you will lose credit for all previously accrued Years of Vesting Service unless you have a Vested right to benefits. If CRC subsequently rehires you, you will be treated as a new employee for purposes of the Plan. If you terminate, start receiving Plan benefit payments, and are then re-employed by CRC, your benefit payments will cease. Plan benefit payments will resume after you terminate again. These subsequent benefit payments will be in the same form and amount as the benefits you were receiving prior to your rehire plus you will receive any additional benefits you earned, if any, while you were re-employed. If You Transferred to an Ineligible Status. If you transfer to another job classification or location and no longer meet the Plan s eligibility requirements, you will continue to accumulate Years of Vesting Service under the Plan so long as you are an employee of CRC. 13

17 If You Do Not File a Proper Application for Benefits. If you leave CRC and do not properly apply for your benefit payments to begin, payments will not begin until your application for benefits is received and approved or, if earlier, the April 1 following the calendar year in which you attain age 70-1/2. If You Do Not Provide Proper Information. If you do not keep your most recent address on file and the Plan Administrator cannot locate you, benefit payments may be delayed and eventually forfeited. (See Missing Persons below.) Also, if you do not provide the necessary information, then payment of your benefit will be delayed. If erroneous data is provided, your benefit payments will be adjusted to recoup any overpayments. If an Overpayment is Made. The Plan Administrator makes every effort to ensure that benefit payments are correct. However, if a mistake is made when your benefits are paid, the Plan Administrator reserves the right to recover any overpayment. If Your Benefits Exceed Federally Prescribed Maximums. Federal laws and regulations place a maximum on the benefit amounts payable to an individual from the Plan. The maximum affects very few employees, but if you are affected by the maximum, you will be notified. If the Plan Does Not Meet Certain Funding Requirements. Federal laws and regulations restrict payment of benefits or future accruals if the ratio of Plan assets to Plan benefits falls below certain prescribed percentages or if the company goes into bankruptcy. If you are affected by the restrictions, you will be notified. The restrictions, if applicable, could include: (i) limitation on the availability of lump-sum distributions over $5,000; (ii) limitation on plant shutdown and similar benefits; (iii) limitation on plan amendments increasing benefits; and (iv) automatic freeze of future benefit accruals. If a QDRO Applies to Your Benefit. All or a portion of your benefit may be awarded to your spouse or a dependent under the terms of a qualified domestic relations order (QDRO), in which case any portion of your benefit that is not awarded to your spouse or dependent will be paid to you under the terms of the Plan. (See Qualified Domestic Relations Orders (QDROs) below.) If You Fail to Appeal a Denied Claim. If you, your spouse, beneficiary, or an alternate payee under a QDRO fail to make a timely appeal of a denied claim, your rights under the Plan s claims and appeal procedures may be extinguished. (See BENEFIT CLAIMS AND APPEALS PROCEDURES in this Summary.) If You Die. If you are married and die, death benefits will be paid to your spouse only as provided under the payment form in effect at your death or, if benefit payments have not begun, as described under SPOUSE S BENEFIT IN THE EVENT OF DEATH above. If you are unmarried at the time of your death, no death benefits will be paid from the Plan. If you were a former Union Pacific Resources Company Employee. If you were a former employee of Union Pacific Resources Company (UPRC) who transferred to Tidelands on March 21, 1994, any benefit that you had accrued under the UPRC Pension Plan will be deducted from your accrued benefit under this Plan. However, your service earned with UPRC will be included for purposes of determining your Plan benefit. 14

18 OTHER IMPORTANT PROVISIONS Assignment of Your Benefits Your retirement benefit belongs to you and may not be sold, assigned, transferred, pledged or garnished under most circumstances. The Plan is required, however, to comply with Internal Revenue Service tax levies and with court-issued QDROs, which are described below. If you (or your spouse, beneficiary or alternate payee under a QDRO) are unable to care for your own affairs, any elections may be made by, and any payments due may be paid to, someone who is authorized to conduct your affairs. This may be a relative, a court-appointed guardian, or some other person. Mergers, Consolidations, and Transfers If the Plan is merged or consolidated, or if Plan assets are transferred to another plan, the benefit you have accrued at the time of the merger, consolidation, or transfer will be protected. Your accrued benefit under the new plan, if the plan were to terminate immediately after the change, would at least equal the accrued benefit that you would have been entitled to receive if the current plan had terminated just before the change. Military Leave The Plan complies with the requirements of the Uniformed Services Employment and Reemployment Rights Act of 1994 (USERRA) and the Heroes Earnings Assistance and Relief Tax Act of 2008 (the HEART Act). If you are a participant on a qualified military leave of absence, you will continue to accrue Years of Vesting Service and Benefit Service, provided that you return to work after your leave period ends in accordance with the requirements of USERRA. Upon your return, you will retain your status as an Active Participant as long as you satisfy the Plan s eligibility requirements. In general, qualified military leave includes all periods of active duty with a U.S. uniformed service (including National Guard and reserve training) of up to five years duration. If a participant dies while performing in the uniformed services, the survivors are entitled to receive any additional benefits (other than benefit accrual relating to the period while on military leave) provided under the Plan as if the participant had resumed employment on the day before death. Missing Persons If the Plan Administrator is unable to begin benefit payments to you, your spouse, beneficiary, or alternate payee under a QDRO, or other person entitled to Plan benefits because their identity or whereabouts cannot be ascertained, and two years have passed since such payments were to begin, then the Plan Administrator may mail a notice by registered mail to the last known address of such person. The notice shall state that unless that person makes written reply to the Plan Administrator within 60 days from the mailing of such notice, the Plan Administrator shall direct that the benefit shall be forfeited and all liability for the payment thereof shall terminate. In the event of the subsequent reappearance of the person entitled to such benefits prior to termination of the Plan, the benefits, which were due and payable and which such person missed, shall be paid in a single sum, and any future benefits due such person shall be reinstated in full. The amount payable to such person shall be equal 15

19 to the benefit forfeited, without interest on such amount for the period commencing on the date such benefit was forfeited and ending on the date of the claim. No Implied Promises Nothing in this Summary says or implies that participation in this Plan is a guarantee of continued employment with CRC. Nor is it a guarantee that the Plan s current benefit formula will remain unchanged in future years. Qualified Domestic Relations Orders (QDROs) If you become divorced or separated, are required to pay child support, or are involved in a court proceeding dividing marital property, certain court orders could require that part of your benefit be paid to someone else known as an alternate payee. An alternate payee could be a spouse, former spouse, child, or other dependent. This kind of a court order is known as a QDRO. To be honored, a QDRO must meet specified legal standards, the satisfaction of which will be determined by the Plan Administrator. You may obtain a copy of the Plan s QDRO procedures at no charge from the CRC Qualified Order Team. As soon as you are aware of any court proceedings that may affect your Plan benefit, you should contact the CRC Qualified Order Team. You may be able to speed up court proceedings and save on legal fees by getting a copy of the Plan s QDRO procedures for review by your attorney before any order is presented to a court awarding someone else a share of your Plan benefit. By following the QDRO procedures, you reduce the risk that the order will be rejected by the Plan. If the Plan rejects the order, you or your attorney will need to obtain a revised order from the court. Rollovers You, your spouse, or alternate payee under a QDRO may direct the Plan Administrator to transfer all or part of your eligible rollover distribution, in amounts of $500 or more, directly to an IRA or other eligible retirement plan. Currently, only the Lump Sum Option form under this Plan can qualify as an eligible rollover distribution. If you are interested in learning more about whether a distribution is eligible for rollover, please contact the CRC Pension Service Center at BENEFIT CLAIMS AND APPEALS PROCEDURES The Plan is covered under Title I of ERISA. The Plan Administrator has discretionary authority to determine who is eligible for coverage and benefits under the Plan. In exercising its fiduciary responsibilities, the Plan Administrator shall have discretionary authority to determine whether and to what extent covered participants, spouses, alternate payees, and beneficiaries are eligible for benefits, and to construe disputed or doubtful Plan terms. The Plan Administrator shall be deemed to have exercised such authority properly unless it has abused its discretion hereunder by acting arbitrarily and capriciously. General Information about Claims A claim for benefits is a formal request by you (or your spouse, alternate payee, or beneficiary) for the payment of benefits due under the terms of the Plan. You (including your spouse, alternate payee, or beneficiary) have a right to file a formal claim for a benefit from the Plan if you believe that you are not receiving all benefits to which you are entitled under the terms of the Plan. All formal claims for benefits must be submitted in writing to the Plan Administrator 16

20 (c/o the Plan Administration office at the address indicated under the ADDITIONAL INFORMATION section), which is the named fiduciary with responsibility for deciding on your claim. The submission should indicate that it is a formal claim for benefits. An authorized representative may represent you when you file your initial claim or you appeal the initial denial of your claim. The Plan Administrator may require that the person you select provide evidence (such as a signed authorization) that you have authorized him or her to represent you in connection with your claim for benefits. Time Period for Responding to Initial Claim Generally, the Plan Administrator will provide a response to your claim within 90 days after it receives your claim. The Plan Administrator may notify you in writing before the end of the normal 90-day review period that it needs up to an additional 90 days to review your claim because of special circumstances. That notification will indicate the special circumstances requiring the extension (such as not receiving required information) and when the Plan Administrator expects to be able to respond to your claim. If you do not receive a response within the applicable time period, please contact the Plan Administrator. Alternatively, you may assume that the claim has been denied and submit an appeal. However, in that case you will not have as much information to help you prepare a successful appeal. If the claim is a disability claim, the following timing rules will apply instead of those stated in the preceding paragraph. The Plan Administrator will provide a response to your claim within 45 days after it receives your claim. The Plan Administrator may notify you in writing before the end of the normal 45-day review period that it needs an additional 30 days to review your claim because of special circumstances beyond the control of the Plan Administrator. If special circumstances beyond the control of the Plan Administrator justify extending the claim period up to an additional 30 days, you will be given written notice of this extension within the original 30-day period. Each extension shall set forth the special circumstances beyond the control of the Plan Administrator and the date a decision is expected. Information Provided if Initial Claim is Denied If your claim is denied in whole or in part, you (or your spouse, alternate payee, or beneficiary) will receive a written response from the Plan Administrator. The Plan Administrator s response will include the following information: The specific reasons for the denial; Reference to the specific plan provisions upon which the denial was based; A description of any additional material or information that is necessary for your claim to be successful, and an explanation of why this information is necessary; An explanation that a full and fair review by the Plan Administrator of the decision denying the claim may be requested by you or your authorized representative by filing with the Plan Administrator, within 60 days (or, if the claim for benefits is based on your disability, 180 days) after such notice has been received, a written request for such review; A statement you or your authorized representative have a right to receive, upon request and free of charge, reasonable access to or copies of documents, records, and other information relevant to your claim for benefits, other than legally privileged documents, and to submit 17

21 issues and comments in writing within the period specified above; and A statement that you have a right to bring a civil action under ERISA following an adverse determination on any appeal you file after the initial denial of your claim. If the Plan Administrator s response does not include all of this information, please contact the Plan Administrator and request the missing information. Appeal Procedure if Initial Claim is Denied If your initial claim is denied, you (or your spouse, alternate payee, or beneficiary) may appeal the denial and request that the Plan Administrator further review your claim. You must submit your appeal in writing to the Plan Administrator, c/o the Plan Administration office (at the address noted in the ADDITIONAL INFORMATION section), within 60 days (or, if the claim for benefits is based on your disability, 180 days) after you receive the notice denying your initial claim. If you do not submit your appeal by this deadline, you will lose the opportunity to make an appeal and you may lose the right to bring a lawsuit challenging the denial of benefits. In connection with your appeal, you may submit written comments, documents, records, or other information relating to your claim. Upon request, the Plan Administrator will provide you with reasonable access to and copies of documents, records, and other information relevant to your claim for benefits. However, certain documents, records, and other information may not be available to you (such as information protected by attorney-client privilege). Generally, you will receive a response within 60 days (or, in the case of a disability claim, 45 days) after the Plan Administrator receives your appeal. The Plan Administrator may notify you in writing before the end of the normal 60-day review period that it needs an additional 60 days (or, in the case of a disability claim, 45 days) to review your claim because of special circumstances. That notification will indicate the special circumstances requiring the extension (such as not receiving required information) and when the Plan Administrator expects to be able to respond to your claim. If you do not receive a response within the applicable time period, please contact the Plan Administrator. The Plan Administrator will consider your appeal, taking into account all comments, documents, records, and other information submitted, including information not submitted or considered in the initial decision on your claim. Any decision made by the Plan Administrator on appeal will be final, conclusive, and binding. Information Provided if Appeal is Denied If your appeal is denied in whole or in part, you will receive a written response from the Plan Administrator. The Plan Administrator s response will include the following information: The specific reasons for the denial; Reference to the specific plan provisions upon which the denial was based; A statement that, upon request, you or your authorized representative is entitled to receive, free of charge, reasonable access to and copies of documents, records, and other information relevant to your claim for benefits. However, certain documents, records, and other information may not be available to you (such as information protected by attorneyclient privilege); and 18

22 A statement that you have a right to bring a civil action under ERISA following the adverse determination on your appeal. If the Plan Administrator s response does not include all of this information, please contact the Plan Administrator and request the missing information. All decisions made by the Plan Administrator under this benefits claims procedure are final, conclusive, and binding, and there shall be no further right of appeal. Legal Proceedings No legal action may be commenced prior to the completion of the benefits claims procedures described in this section. In addition, no legal action may be commenced after the later of: i. 180 days after receiving the written response of the Plan administrator to an appeal, or ii. 365 days after an applicant s original application for benefits. You (or your spouse, alternate payee, or beneficiary) may have a right to bring a lawsuit under ERISA, challenging the denial of an appeal of your claim for benefits. If you do not fully utilize the claims procedures outlined previously, including the right to appeal the initial denial of your claim, the Plan Administrator expects to assert that any lawsuit you file attempting to recover on your claims for benefits should be dismissed because you have not fully exhausted the available administrative remedies. A number of courts have ruled that lawsuits brought by participants or beneficiaries seeking plan benefits will be dismissed in these circumstances. You should discuss this point with your legal advisor because there are differences in how courts address this issue under various circumstances. PLAN CONTINUATION Tidelands expects and intends to continue this Plan, but reserves the right to modify, suspend, change, or terminate the Plan at any time in its sole discretion. Any amendment to the Plan will be effected through a resolution adopted by the managing partner or, in certain circumstances, by the Plan Administrator. Tidelands decision to modify, suspend, change, or terminate the Plan may be caused by changes in federal or state laws governing retirement benefits, the requirements of the Internal Revenue Code or ERISA, or for any other reason. A Plan change may transfer Plan assets and debts to another plan, or split this Plan into two or more parts. If Tidelands amends, or terminates, the Plan, it may or may not set up a different plan with similar or identical benefits. If material changes that affect Plan participants are made in the future, you will be notified. Oral representations or promises will not be binding on the Plan. You should not rely on any oral description of the Plan because the written terms of the Plan document will always govern. If the Plan is terminated, or if there is a partial termination of the Plan that affects you, you will have a Vested right to your accrued benefit under the Plan. The amount of your benefit, if any, will depend on the Plan s assets, the terms of the Plan, and the benefit guarantee of the Pension Benefit Guaranty Corporation (PBGC). Plan assets will be shared among Plan participants and beneficiaries according to the provisions of ERISA. If the Plan is fully funded, you will receive your full benefits. Once your benefit amount has been determined, it may be paid in the form of one or more cash payments to you, or in the form of an insurance company annuity 19