Executive Life Insurance Plan

EXHIBIT 10.7


LYONDELL CHEMICAL COMPANY
EXECUTIVE LIFE INSURANCE PLAN


ARTICLE I


General Provisions


Section 1.1. Purpose and Intent of Plan. The purpose of this Plan is to provide life insurance benefits to executives of the Company.


Section 1.2. Effective Date of Plan. This Plan, as amended, shall generally be effective as of December 1, 2001.


Section 1.3. Definitions.


(a) Administrator means Lyondell Chemical Company.


(b) Beneficiary(s) means the person or persons designated by the
Participant in accordance with Article V of this Plan.


(c) Change of Control shall have the same meaning as Change of Control
under the Lyondell Chemical Company Supplemental Executive Benefit
Plans Trust Agreement.


(d) Class A Participant means an executive of the Company.


(e) Class B Participant means a key manager of the Company who became
eligible to participate in this Plan prior to January 1, 1998.


(f) Company means Lyondell Chemical Company.


(g) Disability means Total Disability under the provisions of the Lyondell
Chemical Company Executive long-term Disability Plan.


(h) Economic Benefit means the value of the economic benefit of life
insurance provided to a Plan Participant for income tax purposes
determined based on Revenue Rulings issued by the Internal Revenue
Service and other applicable authorities.


(i) Eligible Employee means an individual who is rendering services to the
Company as an executive.


(j) Final Annual Base Pay means (i) the Participant's annual base rate of
salary in effect as of the date of the Participant's death, excluding
all extra pay such as bonuses, premiums or other allowances, if the
Participant dies prior to a Termination of Employment or (ii) the
Participant's annual base rate of salary in effect as of the date of
the Participant's Termination of Employment, excluding all extra pay
such as bonuses, premiums or other allowances.


(k) Insurance Carrier means any insurance company that the Company may
from time-to-time purchase from, select to purchase from, or make
available to Participants for the purchase of, life insurance.


(l) Participant means an Eligible Employee who has elected to participate
in the Plan, and has satisfied the requirements of Article II of this
Plan.


(m) Participation Agreement means a written agreement between the Company
and the Participant under which the Participant agrees, by executing
the written agreement within the time frame prescribed by the
Administrator, to participate in this Plan pursuant to Section 2.1.


(n) Plan means the Lyondell Chemical Company Executive Life Insurance
Plan.


(o) Policy means the life insurance policy on the life of a Participant
purchased by the Company from time-to-time from an Insurance Carrier.
The provisions of a Policy are incorporated into the Plan by
reference.


(p) Retirement means commencement of a retirement allowance under the
Lyondell Chemical Company Retirement Plan for Non-Represented
Employees or another Company tax-qualified retirement plan of under
which the Participant is covered.


(q) Retirement Eligibility means Termination of Employment with a right to
commence an immediate retirement allowance, whether or not taken
immediately, under the Lyondell Chemical Company Retirement Plan for
Non-Represented Employees or another Company tax-qualified retirement
plan under which the Participant is covered.


(r) Retirement Income Program means the benefits available pursuant to
Section 3.5.


(s) Split Dollar Death Benefit Program means the benefits available under
to Article III.


(t) Subsidiary or Affiliate means (i) all corporations that 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 the Code) and of which the Company is
then a member, (ii) all trades or businesses, whether or not
incorporated, that, under the regulations prescribed by the Secretary
of the Treasury pursuant to Section 210(d) of ERISA, and then under
common control with the Company and (iii) Equistar Chemicals LP.


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(u) Survivor Income Program means the benefits available under this Plan
pursuant to Article IV.


(v) Tax Rate means the Company's combined state and federal tax rate in
effect at the time benefit calculations, which are dependent in whole
or in part on such rate, are made pursuant to the terms of this Plan.


(w) Termination of Employment means the date the Participant ceases to be
an employee of the Company or any Subsidiary or Affiliate for any
reason, other than death or Disability.


(x) Years of Service means years of Membership Service as defined in the
Lyondell Chemical Company Retirement Plan for Non-Represented
Employees.


Section 1.4. Context. All pronouns and any variations thereof shall be deemed to refer to the masculine, feminine or neuter, as the identity of the person or persons may require. As the context may require, the singular may be read as the plural and the plural as the singular.


ARTICLE II


Participation


Section 2.1 Enrollment in Plan. An Eligible Employee may enroll in this Plan and elect to participate in either the Split Dollar Death Benefit Program or the Survivor Income Program by entering into a Participation Agreement with the Company.


Section 2.2 Election of Benefit Programs. A Participant's election at enrollment to participate in either the Split Dollar Death Benefit Program or the Survivor Income Program may not be changed until January 1 of the following year. Thereafter, prior to Termination of Employment or an assignment pursuant to Section 3.10, a Participant may change his benefit program election not more than once each year, and the change shall become effective on January 1 of the following year. When a Participant elects to change benefit programs, the Participant must release all rights, claims or other legal or equitable interests in the former program, and the Participant must comply with all the requirements established by the Administrator to obtain benefits under the newly selected program.


Section 2.3 Cooperation in Obtaining Insurance. An Eligible Employee is not automatically entitled to receive benefits under this Plan. The Eligible Employee shall cooperate with the Administrator by furnishing any and all information and taking any physical examinations and other relevant action as requested by the Administrator in order to acquire a Policy or to pay benefits under this Plan. If the Eligible Employee refuses to cooperate, the Administrator shall have no further obligation to the Eligible Employee and the Eligible Employee shall not become a Plan Participant. If the Eligible Employee makes any material misstatement of information or fails to


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disclose medical history, then no benefits will be payable on behalf of that Eligible Employee, unless the Administrator, in its sole discretion, decides to pay benefits in an amount reduced to compensate the Company for any loss, cost, damage or expense suffered or incurred as a result in any way of any action, misstatement or nondisclosure.


Section 2.4 Commencement of Coverage. Subject to compliance with the conditions contained in Section 2.1 and 2.3, an Eligible Employee will become a Participant in the Plan as of the date the Eligible Employee becomes an executive.


Section 2.5 Disability. A Participant's Disability shall not be treated as a Termination of Employment during the Disability period and the Participant shall continue to be entitled to all applicable benefits which the Participant has elected under either the Split Dollar Death Benefit Program or the Survivor Income Program of this Plan. If Disability continues through the normal retirement date, the Participant's Termination of Employment shall be the normal retirement date for the purposes of calculating pre- and post-retirement benefits under this Plan.


Section 2.6 Termination of Employment.


(a) A Participant who incurs a Termination of Employment prior to
completion of five (5) Years of Service and Retirement Eligibility
shall cease to be a Participant in the Plan as of the date of the
Termination of Employment and shall not be entitled to any benefits
under the Plan, including any right to purchase a Policy.


(b) A Participant who incurs a Termination of Employment prior to
Retirement Eligibility and after completing five (5) Years of Service
shall be entitled to purchase the Company's interest in the Policy for
an amount equal to either the Company's cumulative premium outlay in
the Policy or the cash value of the Policy, whichever is greater. If
the Participant does not elect to purchase the Company's interest in
the Policy, all incidents of ownership of the Policy (if any) held by
the Participant shall be transferred to the Comp ...