Excess Pension Plan (2006)Full Document 

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VALERO GP, LLC

EXCESS PENSION PLAN

Effective July 1, 2006


VALERO GP, LLC.

EXCESS PENSION PLAN

Table of Contents

     PAGE
SECTION 1. DEFINITIONS.    3
SECTION 2. PARTICIPATION - §415(b) BENEFIT PLAN COMPONENT.    6
SECTION 3. PARTICIPATION - §401(a)(17) BENEFIT PLAN COMPONENT.    7
SECTION 4. AMOUNT AND FORM OF BENEFIT.    8
SECTION 5. SPECIAL PROVISIONS REGARDING PAYMENT OF BENEFITS.    9
SECTION 6. ADMINISTRATION.    10
SECTION 7. MISCELLANEOUS.    11

 

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VALERO GP, LLC

EXCESS PENSION PLAN

The Valero GP, LLC Excess Pension Plan (hereinafter referred to as the “Excess Pension Plan” or the “Plan”) is hereby established effective July 1, 2006 (“Effective Date”) for the purpose of providing benefits to those employees of Valero GP, LLC and its subsidiaries (hereinafter collectively referred to as the “Company”) whose pension benefits under the Valero GP, LLC Pension Plan (the “Pension Plan”) and the Valero Energy Corporation Pension Plan (“Prior Pension Plan”) are subject to limitations under the Internal Revenue Code of 1986, as amended (the “Code”), or are otherwise indirectly constrained by the Code from realizing the maximum benefit available to them under the terms of the Pension Plan and the Prior Pension Plan.

The Excess Pension Plan is an “excess benefit plan” as defined under §3(36) of The Employee Retirement Income Security Act of 1974, as amended (“ERISA”), for those benefits provided in excess of Section 415 of the Code. Benefits provided as a result of other statutory limitations are limited to a select group of management or other highly compensated employees. The Excess Pension Plan is not intended to constitute either a qualified plan under the provisions of Section 401 of the Code or a funded plan subject to the Employee Retirement Income Security Act of 1974, as amended (“ERISA”).

The Plan is being established in connection with a spin-off from the Valero Energy Corporation Excess Pension Plan (“Predecessor Excess Pension Plan”) of the benefits accrued under the Predecessor Excess Pension Plan as of the Effective Date with respect to eligible Employees of the Company. In this connection, it is the intent of the Company that this Plan not

 

Valero GP, LLC Excess Pension Plan

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constitute a new nonqualified deferred compensation plan, but rather merely the assumption and continuation of the Predecessor Excess Pension Plan, effective as of July 1, 2006, with respect to eligible Employees of the Company who have accrued a benefit under the Predecessor Excess Pension Plan. The original effective date of the Predecessor Excess Pension Plan was January 1, 1995.

The Company has established the Pension Plan, effective as of July 1, 2006, to provide defined benefit pension benefits to eligible Employees of the Company, with respect to future service. Effective as of July 1, 2006, eligible Employees of the Company will cease accruing additional benefits under the Prior Pension Plan and the Predecessor Excess Pension Plan. It is the intent of the Company that this Plan shall assume the liabilities of the Predecessor Excess Pension Plan as of July 1, 2006, with respect to eligible Employees of the Company, and shall provide a single, nonqualified excess defined benefit to eligible Employees for their pre-July 1, 2006 benefit accruals under the Predecessor Excess Pension Plan and their post-July 1, 2006 benefit accruals under this Plan.

It is the intent of the Company and Valero Energy Corporation (“VEC”) that this Plan be maintained by the Company for the benefit of eligible employees of the Company and that, from and after the date hereof, this spin-off plan and the Company shall be solely liable for all benefits due such eligible Employees under this Plan and the Predecessor Excess Pension Plan.

 

Valero GP, LLC Excess Pension Plan

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VALERO GP, LLC

EXCESS PENSION PLAN

All defined terms used in the Pension Plan and the Prior Pension Plan, as the case may be, shall have the same meanings for purposes of this Plan except as otherwise provided below.

SECTION 1. DEFINITIONS.

 

1.1 “Basic Plan Benefit” shall mean the sum of the monthly benefits payable from the Pension Plan and the Prior Pension Plan which:

 

  1.1.1 In the case of an unmarried Participant, is based upon the lifetime annuities payable to such Participant pursuant to the relevant provisions of the Pension Plan and of the Prior Pension Plan; or,

 

  1.1.2 In the case of a married Participant, is based upon the joint and survivor pensions of Equivalent Actuarial Value to the pensions otherwise payable to such Participant for life pursuant to the relevant provisions of the Pension Plan and of the Prior Pension Plan after reduction to reflect the number of months (if any) during which a pre-retirement spouse’s benefit election has been in effect.

 

1.2 “Change in Control” shall mean the occurrence of one or more of the following events:

 

  1.2.1 Any one person or more than one person acting as a group (a “Group”) shall acquire (whether in one or more transactions) ownership of interests in the Company that, together with interests held by such person or Group, constitutes more than 50% of the total fair market value or total voting power of all interests, of the Company; or

 

  1.2.2 any one person or Group acquires (or has acquired during the 12-month period ending on the date of the most recent acquisition by such person or Group) ownership interests in the Company representing 35% or more of the total voting power of all such interests in the Company; or

 

  1.2.3 a majority of the members of the governing body of the Company (or, for purposes of this subparagraph 1.2.3, the relevant entity under the provisions of Prop. Treas. Reg. §1.409A-3(g)(5)(vi)(A)) is replaced during any 12-month period by members whose appointment or election is not endorsed by a majority of the members of the governing body of the Company prior to the date of appointment or election; or

 

  1.2.4 any one person or Group acquires (or has acquired during the 12-month period ending on the date of the most recent acquisition by such person or Group) assets from the Company that have a total gross fair market value equal to or more than 40% of the total gross fair market value of all of the assets of the Company immediately prior to such acquisition or acquisitions.

 

Valero GP, LLC Excess Pension Plan

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  1.2.5 A Change in Control shall also be deemed to occur if a Change in Control, as defined in sections 1.2.1, 1.2.2, 1.2.3 or 1.2.4 above, shall occur with respect to:

 

  1.2.5.1 the entity for which a Participant is providing services at the time of such Change in Control; or

 

  1.2.5.2 the entity liable for paying the benefits under this Plan (or all such entities if more than one entity shall be so liable); or

 

  1.2.5.3 an entity that is the majority holder of interests in any entity identified in the preceding sections 1.2.5.1 or 1.2.5.2, or any entity in a chain of entities in which such entity is a majority holder of interests in another entity in the chain, ending in an entity identified in sections 1.2.5.1 or 1.2.5.2 above.

 

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