Lyondell
– Basell Proposed Merger
Important
401(k) and Savings Plan Information
For
U.S. Employees
November,
2007
In
our
previous communications, we indicated that the proposed merger of Lyondell
and
Basell will require certain merger-related changes in the 401(k) and savings
plans for Lyondell, Equistar, Houston Refining, and Millennium. The purpose
of
this article is to provide more detailed information related to these
actions. Several details are dependent upon the actual close date
which has not yet been determined. As soon as we have more details,
we will provide additional communications. Be sure to watch ION for
updates and please feel free to send your questions to
questions@lyondell.com.
Lyondell
stock sale proceeds will be invested in the Money Market
Fund
:
At
the
close of the merger, all shares of Lyondell stock will be sold. This
includes shares in your account from company match and shares you purchased
with
your own contributions. The proceeds of the sale, that is, the money
generated by selling the stock, will remain in your 401(k) account, and
will be
invested in the Fidelity Retirement Money Market Fund (the “Money Market
Fund”). This will happen automatically - you
do not
need to do
anything to accomplish the sale. Once the sale is complete, the
proceeds will be deposited into the Money Market Fund within your
account. You may then move those funds to any plan investment options
of your choice after the end of the blackout period (see below).
Lyondell
company match will be invested in the same manner as your
contributions
:
Currently,
the company match for Lyondell plan participants is invested directly into
the
Lyondell stock fund. Once the merger closes, Lyondell stock will no
longer be publicly traded, so the match will no longer be in
stock. After the close of the transaction, the company match for
Lyondell 401(k) participants will be invested in the same manner as your
pretax
contributions. For example, if you have elected to have your pretax
contributions invested 50% in Spartan U.S. Equity Index, 25% in Dodge & Cox
Balanced Fund, and 25% in Europacific Growth Fund, then after the close
of the
merger, your company match will also be invested 50% in Spartan U.S. Equity
Index, 25% in Dodge & Cox Balanced Fund, and 25% in Europacific Growth
Fund.
Your
Lyondell stock investment election (if any) will be redirected to Money
Market
:
Currently,
you may choose to invest all or part of your own contributions in the Lyondell
stock fund. This will no longer be possible after the close of the merger,
as
Lyondell stock will no longer be publicly traded. At the close of the
merger, any portion of your contributions that you are then investing in
Lyondell stock will be redirected to the Money Market Fund. For
example, assume your current investment election is 30% Neuberger Berman
Genesis
Trust, 30% Fidelity Fund, 25% Lyondell Stock Fund, and 15% Money Market
Fund. After the close of the transaction, the 25% you are currently
directing into the Lyondell Stock Fund will be redirected to the Money
Market
Fund, for a total of 40% into the Money Market Fund. Therefore your
new investment election will be 30% Neuberger Berman Genesis Trust, 30%
Fidelity
Fund, and 40% Fidelity Retirement Money Market Fund. Of course,
subject to compliance with the federal securities laws and our insider
trading
compliance program, at any time before the transaction close, you may make
a
different election of your choice for the portion of your contributions
that is
currently purchasing Lyondell stock
Transactions
involving Lyondell stock will be briefly suspended (“blackout” period) around
the close date
:
For
a few
days around the close of the merger, there will be a brief “blackout” or “quiet”
period, during which 401(k) plan transactions involving Lyondell stock
will be
suspended. During this period, Lyondell stock cannot be bought or
sold, and any transactions requiring a purchase or sale of Lyondell stock
cannot
be processed. This includes any fund exchanges, loans, withdrawals,
and distributions involving Lyondell stock. Transactions which do not
involve Lyondell stock will not be affected. For example, a fund
exchange between two mutual funds will be processed as requested.
The
blackout will begin at the close of business on the day which is two trading
days before the close date. For example, if the close date is set for
a Thursday, the blackout will begin at 3:00 p.m. Central (4:00 p.m. Eastern)
on
Tuesday.
The
blackout for all plans will end once the stock sale proceeds have been
received,
allocated to the Money Market Fund, and all accounts have been
verified. This will take approximately four to ten business days
after the close date. So, from beginning to end, the blackout will
last from six to twelve business days. Once the blackout is lifted,
you will be notified, and all suspended trading, loans, withdrawals, etc.
can
resume.
Since
we
do not yet know the close date of the merger, we don’t know the exact beginning
date of the blackout. Once the close date has been determined, we
will inform you.
In-kind
distributions of Lyondell stock will cease two weeks before the close
date
:
Our
401(k) plans currently allow distributions of Lyondell stock (for example
upon
termination or retirement) in the form of stock certificates (“in-kind”
distributions). Because of the time needed to produce and deliver
stock certificates, in-kind stock distributions will cease approximately
two
weeks before the merger close date. As soon as we know the exact date
for suspension of in-kind distributions, we will inform you. (Please
note that stock distributions in cash, where the stock is sold and the
proceeds
paid out in cash rather than stock certificates, may continue up until
the
blackout period begins, as described above.)
Questions
and Answers:
Q: Why
are these 401(k) and savings plans changes necessary?
A: Because
Lyondell will no longer have publicly traded stock, Lyondell stock can
no longer
be offered as an investment option in the 401(k) plans after the close
of the
merger. This means that the company match can no longer purchase
Lyondell stock, employees can no longer purchase Lyondell stock with their
own
contributions, and any stock in the 401(k) savings plans must be sold and
the
sale proceeds reallocated. The actions described in this
communication are necessary to accomplish those merger-related
changes.
Q: What
will happen when the Lyondell stock in my 401(k) account is
sold?
A: At
the close date, when the Lyondell stock in your 401(k) account is sold,
the
proceeds of the sale will be invested in the Money Market Fund. You
may then move those funds to any plan investment options of your choice
after
the end of the blackout period.
Q: What
happens to the Lyondell stock in my BrokerageLink account?
A: The
Lyondell stock in your BrokerageLink account will be sold on the close
date, and
the proceeds will be deposited in the Fidelity Cash Reserves within your
BrokerageLink account.
Q: I
am a Lyondell employee. Where does my company match currently go, and
where will it go after the merger closes?
A: Currently,
the company match for Lyondell plan participants is invested directly into
the
Lyondell stock fund. When the merger closes, this will no longer be
possible. Going forward, your company match will be invested in the
same manner as your pretax contributions. So, for example, if you
have elected to invest your pretax contributions 25% in each of the Fidelity
Fund, Money Market Fund, Dodge & Cox Balanced Fund, and Europacific Growth
Fund, then after the merger, your company match will also be invested 25%
in
each of the Fidelity Fund, Money Market Fund, Dodge & Cox Balanced Fund, and
Europacific Growth Fund.
Q: How
is the company match invested for Equistar, Houston Refining, and Millennium
employees? Is this affected by the merger
closing?
A: For
Equistar, Houston Refining, and Millennium plan participants, the match
is
currently invested in the same manner as your pretax
contributions. This will not change due to the merger.
Q: What
if I’m currently directing some of my employee contributions into Lyondell
stock? Where will that go after the closing?
A: If
you are currently directing all or part of your employee contributions
into the
Lyondell Stock Fund, that investment election will be redirected to the
Money
Market Fund after the close of the merger. For example, if you have
elected to invest 10% of your contributions in the Lyondell Stock Fund,
that 10
% will be invested in the Money Market Fund after the close of the
merger. Please note that if you are already directing a percentage of
your contributions into the Money Market Fund, the percentage that previously
went to Lyondell stock (which gets redirected to Money Market) will be
added
that percentage.
Q: Can
I make investment election changes until the merger close?
A: Generally
yes, you may make investment election changes up until the blackout period
begins. However, the last day for making investment changes before
the close will depend on where the actual close date falls within a pay
period. Since we don't yet know the exact close date, we will provide
further details when the close date is known.
Q: Will
there be a “blackout” on Lyondell stock trading around the close
date?
A: Yes,
there will be a brief blackout period on 401(k) transactions involving
Lyondell
stock beginning two business days before the close date, and ending
approximately four to ten business days after the close date (a total of
six to
twelve business days). During this time, all shares of Lyondell stock
in the plan will be sold and the sale proceeds will be deposited in the
proper
funds within the 401(k) plan. After all participant accounts have
been verified, the blackout will then be lifted, and suspended plan transactions
can be resumed.
Q: When
will the blackout begin?
A: The
blackout will begin two business days before the merger close
date. When the exact closing date is known, we will communicate the
exact date that the blackout will begin.
Q: How
long will the blackout last?
A: In
total, the blackout will last approximately six to twelve business
days.
Q: How
will I know when the blackout begins and ends?
A: As
soon as we know the exact merger close date, we will know the beginning
date of
the blackout. We will then communicate immediately both the start and
the end dates of the blackout. Please watch ION and NetBenefits for
details. You may also call Fidelity at 1-888-596-8008, option
11.
Q: What
do I need to do before the merger close date?
A: There
is nothing that you
mus
t do before the merger close. All the
merger-related changes will happen automatically without any action on
your
part. However, we would strongly encourage you to review your
investment elections, and your current fund balances before the
close. Of course, your individual investment decisions will depend on
your age, risk tolerance, financial status and goals, etc. We
encourage you to consult a tax or financial professional.
Q: What
do I need to do after the merger close?
A: There
is nothing that you
must
do after the merger close. However,
we would strongly encourage you to review your investment elections, and
your
current fund balances after the close. Since the proceeds of all
Lyondell stock sales will be deposited into the Money Market Fund, you
may want
to exchange some or all of those Money Market funds for other plan investment
options. Of course, your individual investment decisions will depend
on your age, risk tolerance, financial status and goals, etc. We
encourage you to consult a tax or financial professional.
Q: Will
there be more changes to the 401(k) and savings plans after the close of
the
merger?
A: As
we mentioned above, the actions/changes described in this communication
are
necessary merger-based actions; they are not optional design-based
changes. As mentioned in previous communications, Lyondell and Basell
have agreed that through December 31, 2008, Lyondell benefit opportunities
will
be, in the aggregate, materially no less favorable than the Lyondell benefits
immediately prior to the close. Beyond 2008, we do not know if there
will be material design-based changes to the Lyondell 401(k) and savings
plans.
Q: How
can I get more information?
A: For
general and current information about the 401(k) and savings plans, and
specific
questions about your account balance, you may access your account online
at
www.401k.com or call Fidelity at (888) 596-8008, option 11. For
merger-related inquiries, please email your questions to
questions@lyondell.com.
The
information presented in this Summary of Material Modifications (SMM) does
not
replace the official documents that legally govern the plan's operation.
To
determine specific rights and benefits in the event of any conflict between
this
SMM and the official document, the full terms of the official document,
as it
now exists or as it may exist in the future will always govern. The Plan
follows
requirements under Section 404 (c) of the Employee Retirement Income Security
Act of 1974, as amended ("ERISA"). This summary and other available information
provide you with information on the range of investment options available
under
the plan to allow you to make your own investment choices. As a result,
the
Plan's fiduciaries are not liable for losses related to your investment
choices.
This description of your Plan is not an employment contract or a guarantee
of
present or future employment.