<PAGE>

                                                                    EXHIBIT 10.3

LYONDELL CHEMICAL COMPANY

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SUPPLEMENTARY EXECUTIVE
RETIREMENT PLAN

As Amended and Restated Effective January 1, 2002
<PAGE>

                            Lyondell Chemical Company
                     Supplementary Executive Retirement Plan

                                TABLE OF CONTENTS

<TABLE>
<CAPTION>
                                                                                                       PAGE
<S>                                                                                                     <C>
ARTICLE I - GENERAL PROVISIONS.......................................................................    1
         Section 1.1       Purpose and Intent of Plan................................................    1
         Section 1.2       Effective Date of Plan....................................................    1
         Section 1.3       Costs of Plan.............................................................    1
         Section 1.4       Definitions...............................................................    1

ARTICLE II - SUPPLEMENTARY BENEFITS..................................................................    8
         Section 2.1       Types of Supplementary Benefits Provided..................................    8
         Section 2.2       Eligibility in General....................................................    8
         Section 2.3       Amount of Supplementary Benefits (or Survivor
                           Benefit) in General.......................................................    9
         Section 2.4       Deferral/Incentive Supplement.............................................    9
         Section 2.5       Qualification Limitation Supplement.......................................   11
         Section 2.6       Special Supplements.......................................................   11
         Section 2.7       Supplementary Benefits on Change in Control...............................   12

ARTICLE III - FORM OF BENEFIT........................................................................   13
         Section 3.1       Supplementary Benefits....................................................   13
         Section 3.2       Special Supplements.......................................................   14
         Section 3.3       Form of Benefit on Change in Control......................................   14

ARTICLE IV - TIMING OF PAYMENT OF BENEFIT............................................................   15
         Section 4.1       Supplementary Benefits....................................................   15
         Section 4.2       Special Supplements.......................................................   15
         Section 4.3       Payment on Change in Control..............................................   15

ARTICLE V - ADMINISTRATION...........................................................................   16
         Section 5.1       Interpretation............................................................   16
         Section 5.2       Administrative Records....................................................   16
         Section 5.3       Claims....................................................................   16
         Section 5.4       Committee Liability.......................................................   16

ARTICLE VI - FACILITY OF PAYMENT AND LAPSE OF BENEFITS...............................................   17
         Section 6.1       Payment on Incapacity.....................................................   17
         Section 6.2       Payments or Deposits......................................................   17
</TABLE>
<PAGE>

                            Lyondell Chemical Company
                     Supplementary Executive Retirement Plan

                           TABLE OF CONTENTS (cont'd)

<TABLE>
<S>                                                                                                     <C>
ARTICLE VII - MISCELLANEOUS..........................................................................   18
  Section 7.1         Unfunded Benefit Plan..........................................................   18
  Section 7.2         Unsecured General Creditor.....................................................   18
  Section 7.3         Grantor Trust..................................................................   18
  Section 7.4         Payments and Benefits Not Assignable...........................................   19
  Section 7.5         No Right of Employment.........................................................   19
  Section 7.6         Adjustments....................................................................   19
  Section 7.7         Obligation to Company..........................................................   19
  Section 7.8         Protective Provisions..........................................................   19
  Section 7.9         Gender, Singular and Plural....................................................   20
  Section 7.10        Law Governing..................................................................   20
  Section 7.11        Validity.......................................................................   20
  Section 7.12        Notice.........................................................................   20
  Section 7.13        Successors and Assigns.........................................................   20

ARTICLE VIII - AMENDMENT AND DISCONTINUANCE..........................................................   21
  Section 8.1         Amendment of Plan..............................................................   21
  Section 8.2         Termination....................................................................   21
  Section 8.3         Effect of Amendment or Termination.............................................   21
</TABLE>
<PAGE>

                                    ARTICLE I

                               GENERAL PROVISIONS

Section 1.1 Purpose and Intent of Plan.

     This Plan is intended to provide supplemental retirement allowances in
accordance with its provisions to those Employees who are eligible to receive
Awards under the Lyondell Chemical Company Annual incentive plan, and who

     (a) have deferred a portion of their Salary under the Lyondell Chemical
Company Executive Deferral Plan or

     (b) have had the amount of their benefit reduced, due to federal legal
requirements, under a tax-qualified, defined benefit retirement plan maintained
by Lyondell Chemical Company, or

     (c) have been granted a Special Supplement under Section 2.6 of this Plan.

Section 1.2 Effective Date of Plan.

     This Plan document shall be effective January 1, 2002 and shall apply to
Employees who are employed by the Company on or after January 1, 2002, except to
the extent that certain provisions specify that they are effective on a
different date.

     This Plan is an amendment and restatement of the Prior Plan.

Section 1.3 Plan Costs.

     All Plan costs, including administrative costs, shall be borne by the
Company and no Employee contributions shall be required or permitted.

Section 1.4 Definitions.

     Actuarial Equivalent or Actuarially Equivalent mean, in comparing benefits
     ----------------------------------------------
payable in different forms or at different times or in different circumstances,
a value under one set of circumstances which is the same as the value under a
different set of circumstances. The value shall be computed and determined by
using mortality assumptions, interest rates and other actuarial factors and
assumptions used to calculate actuarial equivalents under the Retirement Plan.

     Administrative Committee means the Benefits Administrative Committee.
     ------------------------
<PAGE>

     Award means a cash award made under the Lyondell Chemical Company annual
     -----
incentive plan for executives or senior managers or their equivalents. An Award
does not include Deferred Cash as that term is used in the plan.

     Base Pay means the annual amount of "Base Pay," as defined in the
     --------
Retirement Plan.

     Basic Allowance means an annuity payable for the Participant's life, with a
     ---------------
guarantee that an amount equal to 60 monthly payments will be made to the
Participant and his Beneficiary.

     Beneficiary means a person entitled to receive the Survivor Benefit under
     -----------
Sections 2.4, 2.5 and/or 2.6 when the Participant dies.

     Change in Control means an event which shall be deemed to have occurred as
     -----------------
of the date that one or more of the following occurs:

          (i) Individuals who, as of February 1, 1999, constitute the entire
Board ("Incumbent Directors") cease for any reason to constitute at least a
majority of the Board; provided, however, that any individual becoming a
                       --------  -------
director subsequent to the date hereof whose election, or nomination for
election by the Company's shareholders, was approved by a vote of at least a
majority of the then Incumbent Directors shall be considered as though such
individual was an Incumbent Director, but excluding, for this purpose any such
individual whose initial assumption of office occurs as a result of either an
actual or threatened election contest, as such terms are used in Rule 14a-11
under the Securities Exchange Act of 1934, as amended or other actual or
threatened solicitation of proxies or consents by or on behalf of any Person (as
defined below) other than the Board;

          (ii) The stockholders of the Company shall approve any merger,
consolidation or recapitalization of the Company (or, if the capital stock of
the Company is affected, any subsidiary of the Company), or any sale, lease, or
other transfer (in one transaction or a series of transactions contemplated or
arranged by any party as a single plan) of all or substantially all of the
assets of the Company (each of the foregoing being an "Acquisition Transaction")
where (1) the shareholders of the Company immediately prior to such Acquisition
Transaction would not immediately after such Acquisition Transaction
beneficially own, directly or indirectly, shares or other ownership interests
representing in the aggregate eighty percent (80%) or more of (a) the then
outstanding common stock or other equity interests of the corporation or other
entity surviving or resulting from such merger, consolidation or
recapitalization or acquiring such assets of the Company, as the case may be, or
of its ultimate parent corporation or other entity, if any (in either case, the
"Surviving Entity"), and (b) the Combined Voting Power of the then outstanding
Voting Securities of the Surviving Entity or (2) the Incumbent Directors at the
time

                                       2
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of the initial approval of such Acquisition Transaction would not immediately
after such Acquisition Transaction constitute a majority of the Board of
Directors, or similar managing group, of the Surviving Entity; provided,
                                                               --------
however, that, notwithstanding the foregoing, a Change of Control shall not be
-------
deemed to have occurred for purposes of this Subsection (ii) if each of the
following conditions are met: (a) the Acquisition Transaction is between the
Company and/or its Affiliates, on the one hand, and Millennium Chemicals Inc.
("Millennium") and/or its Affiliates, on the other hand, (b) the Company or an
entity that was a wholly owned subsidiary of the Company prior to the
Acquisition Transaction has a class of equity securities registered under
Section 12 of the Securities Exchange Act of 1934, as amended, immediately after
completion of the Acquisition Transaction, (c) Millennium or an entity that was
a wholly owned subsidiary of Millennium prior to the Acquisition Transaction has
a class of equity securities registered under Section 12 of the Securities
Exchange Act of 1934, as amended, immediately after completion of the
Acquisition Transaction, and (d) as a result of the Acquisition Transaction, the
Company or its Affiliates own a greater percentage equity interest in Equistar
Chemicals, LP ("Equistar") than was owned, directly or indirectly, by the
Company immediately prior to such Acquisition Transaction;

          (iii) The stockholders of the Company shall approve any plan or
proposal for the liquidation or dissolution of the Company; or

          (iv) Any Person shall be or become the beneficial owner (as defined in
Rules 13d-3 and 13d-5 under the Securities Exchange Act of 1934, as amended),
directly or indirectly, of securities of the Company representing in the
aggregate more than twenty percent (20%) of either (A) the then outstanding
shares of common stock of the Company ("Common Shares") or (B) the Combined
Voting Power of all then outstanding Voting Securities of the Company; provided,
                                                                       --------
however, that notwithstanding the foregoing, a Change in Control shall not be
-------
deemed to have occurred for purposes of this Subsection (iv):

                    (1) Solely as a result of an acquisition of securities by
          the Company which, by reducing the number of Common Shares or other
          Voting Securities outstanding, increases (a) the proportionate number
          of Common Shares beneficially owned by any Person to more than twenty
          percent (20%) of the Common Shares then outstanding, or (b) the
          proportionate voting power represented by the Voting Securities
          beneficially owned by any Person to more than twenty percent (20%) of
          the Combined Voting Power of all then outstanding Voting Securities;

                    (2) Solely as a result of an acquisition of securities
          directly from the Company, except for any conversion of a security
          that was not acquired directly from the Company; or

                                       3
<PAGE>

                    (3) Solely as a result of a direct or indirect acquisition
          by Occidental Petroleum Corporation ("Occidental") or Millennium, or
          any Affiliate of either of them, of beneficial ownership of securities
          representing, (x) in the case of Occidental (with its Affiliates), no
          more than forty percent (40%), (y) in the case of Millennium (with its
          Affiliates), no more than forty percent (40%), and (z) in the case of
          Occidental (with its Affiliates) and Millennium (with its Affiliates)
          in the aggregate, no more than forty-nine percent (49%), of either (A)
          the then outstanding Common Shares or (B) the Combined Voting Power of
          all then outstanding Voting Securities of the Company, pursuant to or
          as contemplated under any agreement between the Company and Occidental
          and/or Millennium or Affiliates of either of them (including any
          subsequent related transaction or series of related transactions or
          acquisitions of Voting Securities of the Company by Occidental and/or
          Millennium or their Affiliates or assignees approved by the Incumbent
          Directors prior to the consummation of such transaction or series of
          related transactions) where, as a result of such transaction or series
          of related transactions, the Company or a Surviving Entity owns,
          directly or indirectly, a greater percentage equity interest in
          Equistar than was owned, directly or indirectly, by the Company
          immediately prior to such transaction or series of related
          transactions;

          provided, further, that if any Person referred to in paragraph (1) or
          (2) of this Subsection (iv) shall thereafter become the beneficial
          owner of additional shares or other ownership interests representing
          one percent (1%) or more of the outstanding Common Shares or one
          percent (1%) or more of the Combined Voting Power of the Company
          (other than (x) pursuant to a stock split, stock dividend or similar
          transaction or (y) as a result of an event described in paragraph (1),
          (2) or (3) of this Subsection (iv)), then a Change in Control shall be
          deemed to have occurred for purposes of this Subsection (iv).

          (v) For purposes of this definition of Change in Control, the
following capitalized terms have the following meanings:

                    (1) "Affiliate" shall mean, as to a specified person,
          another person that directly, or indirectly through one or more
          intermediaries, controls or is controlled by, or is under common
          control with, the specified person, within the meaning of such terms
          as used in Rule 405 under the Securities Act of 1933, as amended, or
          any successor rule.

                    (2) "Combined Voting Power" shall mean the aggregate votes
          entitled to be cast generally in the election of the Board of
          Directors, or similar managing group, of a corporation or other entity
          by holders of then outstanding Voting Securities of such corporation
          or other entity.

                                       4
<PAGE>

                    (3) "Person" shall mean any individual, entity (including,
          without limitation, any corporation, partnership, trust, joint
          venture, association or governmental body) or group (as defined in
          Sections 14(d)(3) or 15(d)(2) of the Exchange Act and the rules and
          regulations thereunder); provided, however, that Person shall not
                                   --------  -------
          include the Company, LYONDELL-CITGO Refining LP ("LCR") or Equistar,
          any of their subsidiaries, any employee benefit plan of the Company,
          LCR or Equistar or any of their majority-owned subsidiaries or any
          entity organized, appointed or established by the Company, LCR,
          Equistar or such subsidiaries for or pursuant to the terms of any such
          plan.

                    (4) "Voting Securities" shall mean all securities of a
          corporation or other entity having the right under ordinary
          circumstances to vote in an election of the Board of Directors, or
          similar managing group, of such corporation or other entity.

     Code means the Internal Revenue Code of 1986, as amended, including any
     ----
successor provisions and any regulations or other guidance promulgated by
applicable governmental agencies.

     Company means Lyondell Chemical Company, a Delaware corporation, or its
     -------
successor.

     Deferral/Incentive Supplement means a Supplementary Benefit described under
     -----------------------------
Section 2.4.

     Deferred Compensation means any amount of Salary which a Participant elects
     ---------------------
to defer according to the terms of the Lyondell Chemical Company Executive
Deferral Plan.

     Employee means any person who is regularly employed by the Company on or
     --------
after January 1, 2002 and who is an exempt, salaried employee.

     ERISA means the Employee Retirement Income Security Act of 1974, as
     -----
amended, including any successor provisions, and any regulations or other
guidance promulgated by applicable governmental agencies.

     Fifty Percent Joint and Survivor Annuity means an annuity providing
     ----------------------------------------
payments for the Participant's life, with a survivor annuity for his
Beneficiary's life, where each payment to the Beneficiary is 50 percent of the
amount payable during the Participant's life. Each payment during the
Participant's life shall be a percentage of the amount otherwise payable to the
Participant as a Basic Allowance, so that the Fifty Percent Joint and Survivor
Annuity is the Actuarial Equivalent of that Basic Allowance.

                                       5
<PAGE>

     Financial Hardship means a condition of financial difficulty, determined by
     ------------------
the Administrative Committee upon advice of counsel to be sufficient to justify
a change in the elected form of benefits under Section 3.1 without causing, in
counsel's judgment, any other Plan Participant to receive taxable income in
advance of actual payment of Plan benefits.

     Lump Sum means a single payment of the benefit that is the Actuarial
     --------
Equivalent of the Basic Allowance.

     Participant means an active Employee or a former Employee who, at time of
     -----------
Termination of Employment, retirement or death, was employed by the Company or a
Related Company and who is entitled to receive Plan benefits by reason of having
(a) received one or more Awards that would be used to compute the Employee's
Average Final Base Pay under a Retirement Plan, if the Awards were recognized as
a part of Base Pay under that Retirement Plan; (b) deferred a portion of his
Salary that would be used to calculate the Employee's Average Final Base Pay
under a Retirement Plan if the Deferred Compensation recognized as a part of
Base Pay under that Retirement Plan; (c) had his benefit under the Retirement
Plan reduced due to required limitations under the Code or ERISA; and/or (d)
been granted a Special Supplement under Section 2.6. Participant shall include a
former Employee who has not received the entire benefit to which he is entitled
under this Plan.

     Plan means this Supplementary Executive Retirement Plan of Lyondell
     ----
Chemical Company.

     Pre-Retirement Survivor Annuity means the annuity paid under a Retirement
     -------------------------------
Plan to a survivor, attributable to Company contributions, that is payable on
account of the Member's death prior to commencing payment of a retirement
allowance and after the Member became entitled to a retirement allowance payable
from Company contributions under that Plan.

     Prior Plan means this Plan, as it was in effect prior to this amendment and
     ----------
restatement.

     Qualified Limitation Supplement means a Supplementary Benefit described in
     -------------------------------
Section 2.5.

     Related Company means
     ---------------

     (a) Any corporation that is a member of a controlled group of corporations
within the meaning of section 1563(e)(3)(C), of which Lyondell Chemical Company
is a member,

                                       6
<PAGE>

     (b) All trades or businesses, whether or not incorporated, which, under
regulations prescribed by the Secretary of the Treasury pursuant to Section
210(d) of ERISA, are under common control with Lyondell Chemical Company, and

     (c) LYONDELL-CITGO Refining LP and Equistar Chemicals, LP to the extent
that the Related Company has agreed to recognize a Participant's Base Pay for
purposes of its retirement plan.

     Retirement Plan means the Lyondell Chemical Company Retirement Plan for
     ---------------
Non-Represented Employees.

     Salary means the Employee's regular base salary paid by the Company or a
     ------
Related Company, excluding Awards and any other special or additional
compensatory payments.

     Special Supplement means a supplementary retirement benefit approved for
     ------------------
payment to an Employee under Section 2.6.

     Supplementary Benefit means any of the types of supplementary benefits
     ---------------------
provided in Sections 2.4, 2.5 or 2.6.

     Supplementary Benefits means, collectively, all Supplementary Benefits
     ----------------------
provided by this Plan, or all those Supplementary Benefits to which a particular
Participant is entitled, as the context requires.

     Survivor Benefit means any survivor benefit that is payable to a
     ----------------
Participant's Beneficiary under the provisions of Article II.

     Termination of Employment or Terminate Employment means to cease performing
     -------------------------------------------------
services as an Employee for the Company or any Related Company. However, an
individual will not be considered to have Terminated Employment for Plan
purposes solely because the Company or Related Company's identity changes due to
a sale of substantially all of the Company's or Related Company's assets or
stock, where the individual continues, after the sale, to perform substantially
the same services for the purchaser as he performed for the Company or Related
Company immediately prior to the sale.

                                       7
<PAGE>

                                   ARTICLE II

                             SUPPLEMENTARY BENEFITS

Section 2.1 Types of Supplementary Benefits Provided.

This Plan provides for the following types of Supplementary Benefits:

     (a)  Deferral/Incentive Supplements, as described in Section 2.4;

     (b)  Qualification Limitation Supplements, as described in Section 2.5;

     (c)  Special Supplements, as described in Section 2.6.

Section 2.2 Eligibility in General.

     (a) Eligibility for Benefit. An Employee who Terminates Employment with a
nonforfeitable right to a retirement allowance from a Retirement Plan or who has
a non-forfeitable right to a retirement allowance amount from a Retirement Plan
at the time of a Change in Control, automatically is eligible for each type of
Supplementary Benefit provided by Sections 2.4 and 2.5, to the extent he
satisfies the specific eligibility requirements of the applicable Section.
Supplementary Benefits shall be paid in the form and at the time provided under
Articles III and IV, respectively.

     (b) Eligibility for Survivor's Benefit. If a Participant dies prior to
commencing any Supplementary Benefit to which the Participant is entitled, any
person designated by the Participant as his Beneficiary will be eligible to
receive a Survivor Benefit that relates to the particular Supplementary Benefit.
The Participant must designate the same person as his Beneficiary for purposes
of all Survivor Benefits payable under this Plan. Survivor Benefits to which a
Beneficiary is entitled under this Article will automatically be paid to the
Beneficiary. If the Participant dies prior to commencing any Supplementary
Benefits without having designated a Beneficiary, the Beneficiary shall be the
Participant's spouse, if the Participant was married at the time of death, and
the Participant's estate if the Participant was single at the time of death. If
a Participant dies after commencing Plan benefits in a form that provides for
continued payments after the Participant's death, benefit payments shall
continue in accordance with the terms and provisions of that form of benefit,
unless payable in a Lump Sum as a result of a Change in Control.

                                       8
<PAGE>

Section 2.3 Amount of Supplementary Benefits (or Survivor Benefit) in General.

     The total amount of a Supplementary Benefits (or Survivor Benefits, if
applicable) payable under this Plan shall be the sum of the benefits to which
the Participant is entitled (or Survivor Benefits to which the Participant's
Beneficiary is entitled, if applicable) under all types of Supplementary
Benefits whose requirements are satisfied by or with respect to the Participant.

     Each type of Supplementary Benefit payable from this plan to a Participant
is the Participant's Excess Retirement Benefit. "Excess Retirement Benefit"
means the excess of:

     (a) the Participant's "Hypothetical Amount", as defined separately for
purposes of each type of Supplementary Benefit, over

     (b) the Participant's "Basic Amount". The Basic Amount shall be (i) the
amount of the monthly retirement allowance the Participant is actually entitled
to receive at retirement from the Retirement Plan; and (ii) the amount of any
Supplementary Benefit paid to a Participant or to a trustee or custodian on the
Participant's behalf under the ARCO Chemical Company Supplementary Executive
Retirement Plan as a result of the Company's acquisition of ARCO Chemical
Company.

Section 2.4. Deferral/Incentive Supplement.

     (a) Eligibility for Deferral/Incentive Supplement. A Participant is
eligible for a Deferral/Incentive Supplement if his Excess Retirement Benefit,
using the Hypothetical Amount in 2.4(b)(1), is positive. If a Participant
entitled to receive a Deferral/Incentive Supplement dies before commencing this
benefit, his Beneficiary will be paid a monthly Survivor Benefit described in
Section 2.4(b)(2) below.

     (b) Calculation of Deferral/Incentive Supplement.

          (1) Participant's Benefit. Subject to Sections 2.4 (c), (d) and (e)
and Section 2.7, the Hypothetical Amount of the Participant's Deferral/Incentive
Supplement shall be the monthly retirement benefit the Participant would have
received, in the form of a Basic Allowance, from the Retirement Plan if the Base
Pay used to calculate that benefit under the Retirement Plan had included the
Participant's Awards and Deferred Compensation.

     If the Participant transfers directly from the Company's employment to a
Related Company's employment, Base Pay to calculate the Hypothetical Amount will
include the

                                       9
<PAGE>

Participant's Awards and Deferred Compensation while he is employed by the
Related Company, if the Company recognizes the Participant's salary while
employed by the Related Company to determine the Participant's Retirement Plan
benefits.

          (2) Survivor Benefit. The monthly amount of the Survivor Benefit
payable with respect to a Participant who dies before commencing a
Deferral/Incentive Supplement under his Plan shall be (i) minus (ii), where:

               (i) is the monthly Pre-Retirement Survivor Annuity that would be
payable with respect to the Participant from the Retirement Plan if it were
calculated using the Participant's Hypothetical Amount described in Section
2.4(b)(1), and

               (ii) is the monthly amount of Pre-Retirement Survivor Annuity
actually payable from the Retirement Plan with respect to the Participant.

     (c) Maximum Limitation on Deferral/Incentive Supplement Benefits.

          Notwithstanding the provisions of Paragraphs (a) and (b) of this
Section 2.4, the amount of a Participant's Deferral/Incentive Supplement (or
Survivor Benefit payable with respect to the Participant, as applicable) shall
be reduced to the extent necessary so the total annual benefits payable to or
with respect to the Participant (i) from the Retirement Plan; (ii) as a
Qualification Limitation Supplement, if any, under Section 2.5; and (iii) as a
Deferral/ Incentive Supplement, under this Section, will not exceed 65 percent
of the greater of (a) the sum of the Participant's annual Salary at his
Termination of Employment plus his most recent Award, or (b) the average of the
Participant's highest 3 consecutive years of Salary and Awards for each year
during the Participant's prior ten years of employment with the Company or a
Related Company.

          Benefits payable from the Retirement Plan shall not include annuities
resulting from voluntary employee contributions to the Retirement Plan and
increased benefits resulting from election of a Level Income Option under the
Retirement Plan.

     (d) Recalculation Due to Subsequent Award. The Award used to determine the
Hypothetical Amount for the calendar year in which the Participant's Termination
of Employment or death occurs shall be the pro-rata share of the Award, if any,
granted for the year immediately prior to that calendar year. If the Participant
receives an actual award after Termination of Employment, the actual Award shall
be used to recalculate the Deferral/Incentive Supplement. A Supplement already
being paid may be increased, but not decreased, by this recalculation. No
recalculation shall occur if the Participant actually receives an Award
following a Change in Control.

                                       10
<PAGE>

     (e) Termination of Employment. If a Participant is not eligible for a
retirement allowance from the Retirement Plan at the time of his Termination of
Employment, or if a Pre-Retirement Survivor Annuity is not payable under the
Retirement Plan on the Participant's death, the rights of a Participant or any
person claiming under or by right of the Participant to any Deferral/Incentive
Supplement benefits shall cease.

Section 2.5 Qualification Limitation Supplement.

     (a) Eligibility for Qualification Limitation Supplement. An Employee shall
be eligible for a Qualification Limitation Supplement if his Excess Retirement
Benefit using the Hypothetical Amount in Section 2.5(b)(1) is positive. If a
Participant entitled to receive a qualification Limitation Supplement dies
before commencing this benefit, his Beneficiary will be paid the monthly
Survivor Benefit described in Section 2.5(b)(2) below.

     (b) Amount of Qualification Limitation Supplement.

          (1) Participant's Benefit. The Hypothetical Amount of the
Participant's Qualification Limitation Supplement shall be the monthly
retirement benefit the Participant would have received, in the form of a Basic
Allowance, from the Retirement Plan if the amount of the Participant's
retirement benefit under the Retirement Plan was not subject to limitations or
reductions required under the Code or ERISA.

          (2) Survivor Benefit. The monthly amount of a Survivor Benefit payable
with respect to a Participant who dies before commencing a Qualification
Limitation Supplement under this Plan shall be (i) minus (ii), where:

               (i) is the monthly Pre-Retirement Survivor Annuity that would be
payable with respect to the Participant from the Retirement Plan if the amount
of the Participant's retirement benefit under the Retirement Plan was calculated
using the Participant's Hypothetical Amount described in Section 2.5(b)(i), and

               (ii) is the monthly amount of Pre-Retirement Survivor Annuity
actually payable from the Retirement Plan with respect to the Participant.

Section 2.6 Special Supplements.

     In addition to any other Supplementary Benefits to which an Employee may be
entitled under this Plan, at its sole discretion, the Compensation Committee of
the Company's Board of

                                       11
<PAGE>

Directors may award a Special Supplement to any Employee in an amount, or to be
computed on a basis it determines. These awards may be granted for any reason
the Compensation Committee deems appropriate, including, without limitation,
recognition of all or any part of the Employee's years of service with an
organization or entity acquired by, or merged into, the Company, any Related
Company, or any predecessor of the Company. A Special Supplement shall not be
granted to or on account of any Employee who is not a member of a select group
of management or other highly compensated employee, as defined from time to time
by the Compensation Committee. A certified copy of the resolution granting a
Special Supplement shall be furnished to the Administrative Committee prior to
the date any Plan payment is to be made. The form, the time of commencement, the
duration of any periodic payments, and any other relevant factors affecting the
Company's obligation to provide a Special Supplement to an Employee, or any
related Survivor Benefit to the Employee's Beneficiary, if that benefit is
specified by the Compensation Committee, shall be determined at the sole
discretion of the Compensation Committee and shall be set forth in the certified
copy of the resolution.

2.7  Supplementary Benefits on Change in Control

     (a) In the event of a Change in Control, the Hypothetical Amounts under
Sections 2.4 and 2.5 for Participants eligible for benefits under the Company's
Executive Severance Pay Plan shall be adjusted as follows:

          (i) If a Participant is age 55 at the time of a Change in Control,
Hypothetical Amounts shall be calculated first as a benefit payable at age 65
and then reduced by those percentages used to calculate a Participant's early
retirement allowances under the Retirement Plan.

          (ii) If a Participant has not attained age 55 at the time of a Change
of Control, Hypothetical Amounts shall be calculated first as a benefit payable
at age 65 and then actuarially reduced by the Actuarial Assumptions, defined
under Section (a)(ii) of the definition of Actuarial Equivalent in the
Retirement Plan.

                                       12
<PAGE>

                                   ARTICLE III

                                 FORM OF BENEFIT

Section 3.1. Supplementary Benefits.

     (a) Optional Forms of Benefit. Except as provided for a distribution on a
Change of Control, the Participant may elect to receive payment of his
Supplementary Benefits in any form available to pay the normal retirement
benefit under the Retirement Plan, provided that (1) the same payment form must
be elected for all Supplementary Benefits and (2) if the Participant elects an
annuity form for the Supplementary Benefits and for the retirement allowances
under the Retirement Plan, then he must elect the same annuity form under all
plans.

     (b) Elections.

          (1) The Participant must elect the form of payment within the time
period and in the manner prescribed by the Administrative Committee and
communicated to the Participant before the date the Participant is eligible to
commence Supplementary Benefit payments.

          (2) If the Participant fails to elect the form of Supplementary
Benefit payment within the time period designated by the Administrative
Committee, then the Participant only may elect an annuity form available under
the Retirement Plan used to calculate the Participant's Supplementary Benefit.
If the Participant fails to elect a specific annuity form, the Participant will
receive (i) an annuity paid in the form of a Fifty Percent Joint and Survivor
Annuity, with the surviving spouse as the Beneficiary, if the Participant is
married at the time of retirement, or (ii) an annuity paid in the form of a
Basic Allowance, if the Participant is single at the time of retirement.

          (3) If the Participant elects the form of benefit payment within the
time period designated by the Administrative Committee and subsequently wishes
to change that election prior to benefit commencement or, if the Participant is
being paid an annuity and wishes to receive the Actuarial Equivalent of the
remaining annuity installments, he may apply in writing to the Administrative
Committee to change the previously elected payment form (i) without any
reduction in, or imposition of any penalty on, the amount of Supplementary
Benefits, if the Administrative Committee determines that the Participant has
experienced a Financial Hardship justifying an election change, or (ii) if the
Administrative Committee, in its sole discretion, determines that it is
appropriate to grant the Participant's request.

          (4) A Participant may elect payment of Survivor Benefits in any form
payable under the Retirement Plan used to calculate the Participant's
Supplementary Benefit if the

                                       13
<PAGE>

Participant dies before commencing his benefit. If the Participant fails to make
this election, payment to the Beneficiary will be in the form of a life annuity,
payable for the Beneficiary's life with a value equal to the Actuarially
Equivalent value of the Survivor Benefit payable in any other available form.
The Beneficiary may request the Administrative Committee change the
Participant's prior election and the form may be changed if the Administrative
Committee determines that a Financial Hardship exists or it is appropriate to
grant the Beneficiary's request.

Section 3.2 Special Supplements.

     Any Special Supplement described in Section 2.6 shall be paid in a form
prescribed in the Compensation Committee's resolution conferring the benefit.

Section 3.3 Form of Benefit on Change in Control.

     A Participant's Supplementary Benefits or any Survivor Benefit described in
Article II shall be paid as a Lump Sum.

                                       14
<PAGE>

                                   ARTICLE IV

                          TIMING OF PAYMENT OF BENEFIT

Section 4.1 Supplementary Benefits.

     (a) Supplementary Benefits shall commence at the same time as the
Participant's benefits are paid under the Retirement Plan unless earlier
commencement is required under Section 4.3.

     (b) Survivor Benefits payable under this Plan shall normally be paid on the
earliest date the Participant would have become eligible to begin receiving a
retirement allowance under the Retirement Plan. A Participant may elect that the
Survivor Benefit be paid immediately following his death as a Lump Sum, rather
than being paid on the Participant's earliest retirement eligibility date and a
Beneficiary may request that the Administrative Committee permit a Lump Sum
payment of the Actuarial Equivalent of the Basic Allowance at the time of the
Participant's death, according to requirements of Section 3.1(b)(4).

Section 4.2 Special Supplements.

     Any Special Supplement payable under Section 2.6 shall be payable at the
time or times prescribed in the Compensation Committee's resolution conferring
that benefit.

Section 4.3 Payment in the Event of a Change in Control.

     (a) Supplementary Benefits shall be payable immediately following a Change
in Control, unless the Participant has previously elected an alternate payment
commencement date, as established under Administrative Committee procedures, or
except as provided in (b).

     (b) A Participant eligible for benefits under the Company's Executive
Severance Pay Plan shall receive an immediate Lump Sum payment of all
Supplementary Benefits provided under this Plan upon a Change in Control,
notwithstanding any prior election.

                                       15
<PAGE>

                                    ARTICLE V

                                 ADMINISTRATION

Section 5.1 Interpretation.

     The Administrative Committee has the exclusive right and discretionary
authority to interpret the Plan's provisions and to decide questions arising in
its administration. The Administrative Committee's decisions and interpretations
shall be final and binding on the Company, Employees, Participants and all other
persons.

Section 5.2 Administrative Records.

     The Administrative Committee shall keep records reflecting Plan
administration, which the Company may audit.

Section 5.3 Claims.

     The Administrative Committee shall provide adequate written notice to any
Participant or Beneficiary whose claim for Plan benefits has been denied,
setting forth the specific reasons for the denial. The Participant or
Beneficiary will be given an opportunity for a full and fair review by the
Administrative Committee of its decision denying the claim. The Participant or
Beneficiary shall be given 60 days from the date of the notice denying any claim
within which to request the review.

Section 5.4 Committee Liability.

     No Administrative Committee member shall be liable for any action taken in
good faith or for exercise of any power given to the Administrative Committee,
or for the actions of other Administrative Committee members.

                                       16
<PAGE>

                                   ARTICLE VI

                    FACILITY OF PAYMENT AND LAPSE OF BENEFITS

Section 6.1 Payment on Incapacity.

     If the Administrative Committee deems that any person entitled to receive
any Plan payment is incapable of receiving or disbursing the payment because of
minority, illness or infirmity, mental incompetence, or incapacity of any kind,
the Administrative Committee, in its sole discretion, may take any one or more
of the following actions: it may apply the payment directly for the person's
comfort, support and maintenance; it may reimburse any person for any support
previously supplied to the person entitled to receive any payment; or it may pay
any other person the Administrative Committee selects to disburse the payment
for the person's comfort, support and maintenance, including, without
limitation, to any relative who has undertaken, wholly or partially, the expense
of person's comfort, care and maintenance, or any institution in whose care or
custody the person entitled to the payment may be. The Administrative Committee,
in its sole discretion, may deposit any payment due to a minor to the minor's
credit in any savings or commercial bank of the Administrative Committee's
choice.

Section 6.2 Payments or Deposits.

     Payments or deposits under this Article VI shall be a complete discharge,
to the extent of the payment or deposit, of the Plan or all other liability of
the Administrative Committee, the Company and this Plan. Receipt of any payment,
distribution or deposit shall be a complete acquittance by the persons(s)
receiving the payment. There shall be no liability to see to the application of
any Plan payments, distributions or deposits.

                                       17
<PAGE>

                                   ARTICLE VII

                                  MISCELLANEOUS

Section 7.1 Unfunded Benefit Plan.

     (a) Benefits under Sections 2.4 and 2.6 are intended to constitute a plan
that is unfunded and maintained primarily for the purpose of providing deferred
compensation in the form of additional retirement benefits to a select group of
management or highly compensated employees, as defined in Sections 201(a)(2),
301(a)(3) and 401(a)(1) of ERISA.


     (b) Benefits under Section 2.5 of this Plan are intended to constitute an
unfunded "excess benefit plan" within the meaning of Section 3(36) of ERISA.

Section 7.2 Unsecured General Creditor.

     Participants and their Beneficiaries shall have no legal or equitable
rights, claims or interests in any specific Company assets or property, nor are
they the Beneficiaries of, or have any rights, claims or interests in any life
insurance policies, annuity contracts, or the proceeds of those policies or
contracts, which the Company owns or acquires (the "Policies"). Any Policies or
other Company assets shall be and shall remain general, unpledged, unrestricted
Company assets. The Company's obligation under the Plan is merely an unfunded
and unsecured Company promise to pay money in the future.

Section 7.3 Grantor Trust.

     Although the Company is responsible for all Plan benefits, the Company, in
its discretion, may contribute funds to a grantor trust, as it deems
appropriate, to pay Plan benefits. The trust may be irrevocable, but trust
assets shall be subject to the claims of creditors of Lyondell Chemical Company.
To the extent any Plan benefits are actually paid from the trust, the Company
shall have no further obligation for those benefits, but to the extent the
benefit is not paid, benefits shall remain the obligation of, and shall be paid
by, the Company. Participants shall be unsecured creditors insofar as their
legal claim for Plan benefits and Participants shall have no security interest
in the grantor trust.

                                       18
<PAGE>

Section 7.4 Payments and Benefits Not Assignable.

     Payments to and benefits under this Plan are not assignable, transferable
or subject to alienation since they are primarily for the support and
maintenance of the Participants and their joint annuitant or Beneficiaries after
retirement. Likewise, payments shall not be subject to attachments by creditors
of, or through legal process against, the Company, the Administrative Committee
or any Participant. Payments may be offset by the Company as provided under
Section 7.7.

Section 7.5 No Right of Employment.

     The Plan provisions shall not give an Employee the right to be retained in
Company service nor shall this Plan or any action taken under it be construed as
an employment contract.

Section 7.6 Adjustments.

     At the Company's request, the Administrative Committee may adjust the
Participant's Plan benefit or make other adjustments required to correct
administrative errors or provide uniform treatment of Participants, in a manner
consistent with the Plan's intent and purpose.

Section 7.7 Obligation to Company.

     If a Participant becomes entitled to a distribution of Plan benefits and
the Participant has any debt, obligation, or other liability representing an
amount owed to the Company or any Company benefit plan, then the Administrative
Committee may offset the amount owed to the Company or the benefit plan against
the amount of benefits otherwise distributable under this Plan.

Section 7.8 Protective Provisions.

     Each Participant shall cooperate with the Company by furnishing any and all
information the Company requests to facilitate the payment of Plan benefits,
taking any physical examinations the Company deems necessary and taking other
relevant action the Company requests. If a Participant refuses to cooperate, the
Company shall have no further obligation to the Participant under the Plan. If
the Participant makes any material misstatement of information or nondisclosure
of medical history, no benefits will be payable to the Participant or his
Beneficiary unless, at the Company's sole discretion. benefits are payable in an
amount reduced to compensate the Company for any loss, cost, damage or expense
suffered or incurred by the Company as a result in any way of any Participant
action, misstatement or nondisclosure.

                                       19
<PAGE>

Section 7.9 Gender, Singular and Plural.

     All pronouns and any variations are deemed to refer to the masculine,
feminine, or neuter, as the identity of the person or persons requires. The
singular may be read as the plural and the plural as the singular, as the
context may require.

Section 7.10 Law Governing.

     This Plan shall be construed, regulated and administered under the laws of
the State of Texas, except to the extent that those laws are preempted by ERISA.

Section 7.11 Validity.

     If any Plan provision is held invalid, void or unenforceable, it shall not
affect the validity of any other Plan provision in any respect whatsoever.

Section 7.12 Notice.

     Any notice or filing required or permitted to be given to the
Administrative Committee under the Plan shall be sufficient if in writing and
hand delivered, or sent by registered or certified mail, to the Company's
principal office, directed to the attention of the Secretary of the
Administrative Committee. Notice shall be deemed given as of the date of
delivery or, if delivery is made by mail, as of the date shown or the postmark
on the receipt for registration or certification.

Section 7.13 Successors and Assigns.

     This Plan shall be binding upon the Company and its successors and assigns.

                                       20
<PAGE>

                                  ARTICLE VIII

                          AMENDMENT AND DISCONTINUANCE

Section 8.1 Amendment of Plan.

     This Plan may be amended from time to time by a resolution of the
Compensation Committee of the Board of Directors of Lyondell Chemical Company.

Section 8.2 Termination.

     Lyondell Chemical Company intends to continue this Plan indefinitely, but
reserves the right to terminate it at any time for any reason, in its sole
discretion.

Section 8.3 Effect of Amendment or Termination.

     No Plan amendment or termination may adversely affect the benefit payable
to any Participant receiving or entitled to receive Plan benefits prior to the
effective date of the amendment or termination. However, the Company may amend
the Plan to eliminate any optional form of payment and if so, the amendment will
not be deemed to adversely affect any Participant's benefit entitlement.

                                       21