Document:

Amended and Restated Executive Severance Pay Plan

 Exhibit 10.17 
  
 INSTRUMENT ADOPTING 
 LYONDELL CHEMICAL COMPANY 
 EXECUTIVE SEVERANCE PAY PLAN 
  
 LYONDELL CHEMICAL COMPANY hereby adopts the Lyondell Chemical Company
Executive Severance Pay Plan, to read in its entirety as the document entitled “Lyondell Chemical Company Executive Severance Pay Plan”, attached hereto. 
  
 IN WITNESS WHEREOF, LYONDELL CHEMICAL COMPANY, acting by and through its duly authorized officer, has caused this Instrument
to be executed on this 28th day of November, 2005. 
  

					
	ATTEST:	 	LYONDELL CHEMICAL COMPANY
			
	 /s/ JoAnn L. Beck

	 	By:	 	 /s/ Dan F. Smith

	JoAnn L. Beck, Assistant Secretary	 	 	 	Dan F. Smith
	 	 	 	 	President and Chief Executive Officer

 LYONDELL CHEMICAL COMPANY 
  

EXECUTIVE SEVERANCE PAY PLAN 
  
 As Amended and Restated Effective January 1, 2005 

 LYONDELL CHEMICAL COMPANY 
 EXECUTIVE SEVERANCE PAY PLAN 
 (As Amended and Restated Effective
January 1, 2005) 
  
 1. Purpose. This
Lyondell Chemical Company Executive Severance Pay Plan (the “Plan”) is intended to assure Lyondell Chemical Company (the “Company”) that it will have the continued dedication of specified executives and eliminate the distractions
of personal uncertainties associated with potential transactions that the Company may undertake in the future by providing for certain severance benefit payments to those executives on employment termination within a specified period following a
Change in Control, as defined below. 
  
 2.
Definitions. The terms set forth below have the following meanings: 
  
 “Act” means Code Section 409A, as enacted by the American Jobs Creation Act of 2004, as it may be amended, and all applicable regulations and guidelines issued or promulgated by the appropriate
government agency or regulatory body. 
  
 “Applicable
Annual Earnings” means the sum of a Participant’s annual base salary in effect on the last day of employment with the Employer (or if greater, annual base salary in effect on the date of the Change in Control) and the
Participant’s Target Award (whether or not paid) for personal services on the Employer’s behalf. The “Target Award” shall be the actual bonus compensation target for the calendar year when the Change in Control occurs, or if none
has been established, the bonus compensation target for the immediately preceding calendar year. Applicable Annual Earnings shall include the Participant’s current annual base salary and Target Award whether paid or deferred, including without
limit, amounts contributed by or on behalf of the Participant under any Employer-sponsored plan, such as (i) a plan described in Code Sections 125 or 401(k), or (ii) the Company’s Executive Deferral Plan. This definition of Applicable
Annual Earnings excludes any income attributable to stock options, stock appreciation rights, performance awards other than awards under an executive bonus plan described above, dividend credits, and restricted stock granted under, and dividends on
shares acquired pursuant to, any stock option plan, restricted stock plan or performance unit plan. 
  
 “Board” means the Board of Directors of the Company. 
  
 “Change in Control” shall be deemed to have occurred as of the date that one or more of the following
occurs: 
  
 (i) Individuals who, as of the date hereof,
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 those 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; 
  

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 (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 before that Acquisition Transaction would not immediately after
that 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 the merger, consolidation or recapitalization or acquiring 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 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; 
  
 (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; 
  
 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), or (2) of this
Subsection (iv)), then a Change in Control shall be deemed to have occurred for purposes of this Subsection (iv). 
  

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 (iv) For purposes of this Change in Control definition, the following capitalized terms have the
following meanings: 
  
 (1) “Affiliate”
means, 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” means 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 that corporation or other entity. 
  
 (3) “Person” means 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, any of its subsidiaries or affiliates or LYONDELL-CITGO Refining LP (“LCR”) , any employee
benefit plan of the Company or LCR or any of their subsidiaries or any entity organized, appointed or established by the Company, LCR, or their subsidiaries for or pursuant to the terms of any plan. 
  
 (4) “Voting Securities” means 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 that corporation or other entity. 
  
 “Cause” means: (i) the Participant’s continued and willful refusal to substantially perform his
duties (other than a willful refusal to perform a duty which constitutes Constructive Termination for Good Reason or refusal resulting from the Participant’s incapacity due to physical or mental illness), after the Governing Body delivers a
demand for substantial performance that specifically identifies the Governing Body’s determination of the manner in which the Participant has not substantially performed his duties, where the Participant’s performance is not cured to the
Governing Body’s reasonable satisfaction within thirty (30) days from that demand; (ii) the Participant’s engagement in willful misconduct or dishonesty that is materially injurious, monetarily or otherwise to the Employer; or
(iii) a Participant’s final conviction of a felony. Notwithstanding the foregoing, a Participant shall not be deemed terminated for Cause by an Employer without (i) the Employer’s reasonable written notice to a Participant
setting forth the reasons the Employer intends to terminate the Participant for Cause and (ii) the Participant’s opportunity, together with his counsel, to be heard before the Governing Body. It is specifically agreed that Cause shall
exclude any act or omission by a Participant in the good faith exercise of the Participant’s business judgment as an officer of the Employer. 
  
 “Chief Executive Officer” means the Chief Executive Officer of the Company. 
  
 “Code” means the United States Internal Revenue Code of 1986, as amended from time to time. 
  

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 “Committee” means the Compensation and Human Resources Committee of the Board or any
person or persons appointed by the Board to administer the Plan. 
  
 “Common Stock” means the Company’s common stock, par value $1.00 per share. 
  
 “Company” means Lyondell Chemical Company. 
  
 “Constructive Termination for Good Reason” means: 
  
 (i) the Participant is assigned to any duties or responsibilities that are not comparable to the Participant’s
position, offices, duties, responsibilities or status with the Employer at the time of the Change in Control, or the Participant’s reporting responsibilities or titles are changed and the change results in a reduction of the Participant’s
responsibilities or position with the Employer; 
  
 (ii) the
Participant’s level of benefits (qualified and executive) or compensation (individual base compensation and short and long-term incentive opportunity) is reduced below the comparable level payable to similarly situated executives at the
Employer; or 
  
 (iii) the Participant is actually transferred, or
offered a proposed transfer, as evidenced in the Employer’s written communication to the Participant, to a location other than the location where he was primarily employed immediately preceding the Change in Control, unless that new location is
a major operating unit or facility of the Employer that is located within 50 miles of the Participant’s primary location on the date immediately preceding a transfer; provided, however, (1) the Participant shall provide the
Committee or the Board with written notice, within thirty (30) days from the date that he is given the Employer’s written notice of an actual or proposed transfer, that the transfer shall constitute a Constructive Termination for Good
Reason, (2) the Employer fails to provide the Participant with written notice rescinding the actual or proposed transfer within twenty (20) days of the date the Employer receives the Participant’s notice and (3) if the Employer
does not rescind the transfer, the Participant must terminate his employment due to Constructive Termination for Good Reason within forty (40) days after that twenty (20)-day rescission period so, in any event, the Participant shall have
terminated his employment with the Employer within ninety (90) days after the Participant first receives the Employer’s written notice of the actual or proposed transfer. 
  
 “Disability” means a permanent and total disability as defined in the Employer-sponsored long-term
disability plan applicable to the affected Participant. 
  
 “Effective Date” means January 1, 2005. 
  
 “Employee” means an individual employed by the Company or a Subsidiary. 
  
 “Employer” means the Company or any Subsidiary that employs a Participant. 
  
 “Governing Body” means (i) the Board, if the Employer is the Company, or (ii) the applicable
governing body of any other Employer. 
  

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 “Key Employee” means a Participant who at any time during the prior Plan Year was
identified as (i) an officer or the Company with annual compensation greater than $130,000, as adjusted, (ii) a five percent (5%) owner of the Company, or (iii) a one percent (1%) owner of the Company with annual
compensation from the Company of more that $150,000, as adjusted, as determined according to the requirements of Code Sections 409A and 416(i). For Plan distribution purposes, an Employee identified as a Key Employee during a year ending on the
identification date shall be considered a Key Employee for a twelve month period beginning on the following April 1. December 31 of the prior Plan Year shall be used as the identification date to identify Key Employees under the Act.

  
 “Level One” means the Company’s Chief
Executive Officer and those elected officers of the Company recommended by the Chief Executive Officer and approved by the Committee. 
  
 “Level One Participant” means a Participant who is employed in a Level One capacity by the Company during the relevant eligibility period
under Section 3; 
  
 “Level Two” means an
elected officer of the Company who does not serve in a Level One capacity, an officer of a Subsidiary or an Employee in a senior management position of the Company or any Subsidiary who the Chief Executive Officer designates as eligible to
participate. 
  
 “Level Two Participant” means a
Participant employed in a Level Two position during the relevant eligibility period under Section 3. 
  
 “Level Three” means an Employee in a senior management position of the Company or any Subsidiary who the Chief Executive Officer
designates as eligible to participate. 
  
 “Level Three
Participant” means a Participant employed in a Level Three position during the relevant eligibility period under Section 3. 
  
 “Participant” means an Employee eligible for a Plan benefit under Section 3 as a Level One Participant, Level Two Participant, or
Level Three Participant. 
  
 “Plan” means the
Lyondell Chemical Company Executive Severance Pay Plan, as amended from time to time. 
  
 “Subsidiary” means (i) any corporation, limited liability company or similar entity of which the Company directly or indirectly owns shares representing more than 50% of the voting power of all
classes or capital stock of such corporation which have the right to vote generally on matters submitted to a vote of the shareholders of that entity, (ii) LYONDELL-CITGO Refining, LP so long as the Company maintains an equity ownership
interest equal to at least 25% in that entity, or (iii) any other entity in which the Company has an equity ownership interest of at least 25%, so long as the Committee designates that entity as a Subsidiary for Plan purposes. 
  

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	 	3.	Administration and Eligibility. 

  
 (a) Administration. The Plan shall be administered by the Committee, which shall have full and exclusive power to interpret this Plan and to adopt
rules, regulations and guidelines to carry out this Plan as it deems necessary or appropriate. The Committee, in its discretion, may retain the services of an outside administrator to perform any of its Plan functions. Any Committee decision in
interpreting and administering this Plan shall lie within its sole and absolute discretion and shall be final, conclusive and binding on all parties concerned. Notwithstanding the foregoing, on or before a Change in Control, the Board shall
designate a successor plan administrator which, in all events, shall be independent of the Company and any Company affiliate. The successor plan administrator shall have all the powers given under the Plan to the Committee to (i) determine all
questions relating to Plan benefits; (ii) adopt rules and procedures to administer the Plan; and (iii) interpret Plan provisions. 
  
 (b) Eligibility to Participate. Employees who, at any time in the two (2) year period before a Change in Control, occupied a position
classified as Level One or Level Two, shall be eligible to receive Plan benefits and those individuals shall be Level One Participants and Level Two Participants, respectively. In addition, the Chief Executive Officer may designate Employees in
Level Two or Level Three, individually or by employee classification, as Level Two or Level Three Participants under the Plan. The Chief Executive Officer must notify an Employee of designation as a Level Two or Level Three Participant in
writing, with notice delivered to the Participant and a copy sent to Committee members. Notwithstanding the foregoing, an Employee will not be eligible to become a Participant so long as that Employee is currently eligible for a severance benefit
upon termination of employment with the Company pursuant to a plan or agreement established by Millennium Chemicals, Inc. or any of its former subsidiaries or affiliates. 
  
 (c) Eligibility for Severance Benefits. If a Participant’s employment is terminated within two years following a
Change in Control, (i) by the Participant within ninety (90) days after any event occurs which constitutes a Constructive Termination for Good Reason, or (ii) by the Employer for reasons other than (A) Cause, or (B) the
Participants’ death or Disability, then the Company will provide or cause to be provided to the Participant the rights and benefits in Section 4. No event which occurs on or after the date an Employer ceases to be a Subsidiary shall
entitle a Participant employed by that former Subsidiary to receive any severance benefits pursuant to Section 4. 
  
 4. Severance Benefits. If a Participant is eligible for Severance Benefit under Section 3(c), then the Company shall provide or cause
to be provided to the Participant benefits as follows: 
  
 (a)
Salary and Other Payment at Termination. The Company shall pay to the Participant a cash lump-sum payment in the amount of: 
  
 (i) for Level One Participants, three (3) times the Participant’s Applicable Annual Earnings; 
  
 (ii) for Level Two Participants, two (2) times the
Participant’s Applicable Annual Earnings; and 
  

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 (iii) for Level Three Participants, one (1) times the Participant’s Applicable
Annual Earnings. 
  
 (b) Stock Options. All non-vested
stock options which have been granted to the Participant under any of the Company’s incentive plans (a “Stock Option Plan”) shall become 100% vested and fully exercisable as of the date of the Change in Control, notwithstanding any
provision of the Stock Option Plans or the Participant’s associated stock option agreements, if any, to the contrary. 
  
 If the Company is the surviving entity following a Change in Control, to the extent compliant with the Act, all stock options owned by a Participant shall
be freely exercisable for the remainder of their existing terms without regard to any earlier date in any Stock Option Plan or associated stock option agreement, including, without limit, an earlier expiration date on a Participant’s employment
termination. 
  
 (c) Minimum Retirement Benefits. If a
Participant is not fully vested when he becomes eligible for Severance Benefits, the Company shall cause the Participant to be treated as if fully vested in the Employer’s qualified defined benefit retirement plan, and to be fully vested in the
Company’s Supplementary Executive Retirement Plan (or its successor), and any Subsidiary plan comparable to the Company’s Supplementary Executive Retirement Plan. If the Participant has not satisfied the minimum age and service
requirements for early retirement eligibility under these plans, the Company shall also cause the Participant to be treated as having satisfied or to have satisfied the minimum age and service requirements for early retirement eligibility to
determine the Participant’s eligibility to commence benefit payments under these plans. To determine the amount of benefits payable under the Employer’s qualified defined benefit plan and Supplementary Executive Retirement Plan (or its
successor) or comparable Subsidiary plan, benefits shall be calculated for a Participant who has attained age 55 when benefit payments commence as if the Participant met the plans’ early retirement eligibility requirements. Benefits for a
Participant who has not attained age 55 when benefit payments commence shall be calculated as if the Participant had met early retirement eligibility requirements, and then shall be actuarially adjusted to reflect early commencement of the benefit.
Payments attributable to these calculations which exceed any amount actually payable under the Employer’s qualified defined benefit retirement plan under this Section 4(c) shall be paid in a lump sum cash payment on employment termination.
If the Participant is covered under a Subsidiary’s qualified defined benefit plan or a Subsidiary plan comparable to the Company’s Supplementary Executive Retirement Plan, the Company will cause the Subsidiary to provide a lump-sum cash
payment on employment termination equal to the excess (if any) of the amount payable under this Section 4(c) and the present value of the amount payable under the Subsidiary’s plans. No payment under this Section shall be deemed to be any
part of the Participant’s benefit vested on or before December 31, 2004 under any Employer Supplementary Executive Retirement Plan. 
  
 The Participant shall be eligible for coverage under the retiree medical plan of the Company (or its successor) on employment termination, regardless of
attained age and service. Excluding eligibility requirements, coverage shall be provided for the Participant and the Participant’s dependents on the same terms and conditions, as that provided to other retired executives or senior managers of
the Company (or its successor) in the same class or category of 

  

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position as the Participant held before the Change in Control; provided, however, that the medical coverage in Section 4(d) shall govern for the first
twenty-four (24) months following termination if that coverage is more favorable to the Participant. 
  
 (d) Insurance and Other Benefits. For a period of twenty-four (24) months following termination, the Participant (and his or her dependents,
as applicable) shall be covered at the Company’s expense by the Company’s life insurance, medical, dental, accident and disability plans or any successor to a plan or program in effect at employment termination for active employees in the
same class or category as the Participant, or who would be in the same class or category if employed by the Company (hereafter individually and collectively referred to as “Welfare Plan”), subject to the terms of the Welfare Plan and to
the Participant’s continued contributions, if required, which contributions shall not exceed those charged to active employees in the same class or category in which the Participant was employed by the Company. If the Participant is ineligible
to continue to be covered under the terms of any Welfare Plan, or if the Participant is eligible but the benefits applicable to the Participant (and his dependents, as applicable) are not substantially equivalent to those benefits immediately before
employment termination, then, the Company, at its expense, shall provide to the Participant (and his or dependents, as applicable) benefits substantially equivalent to those in effect immediately before employment termination through other sources
for a period of twenty-four (24) months following employment termination,. Any continuation coverage required under the Consolidated Omnibus Budget Reconciliation Act of 1985 as amended (“COBRA”) under any Company group health plan
shall be in addition to the coverage provided under this Section and shall not begin until the twenty-four (24) month period ends. 
  
 If the Company is unable to make monthly payments for these benefits under the Act, the Company shall calculate the cost of the benefits, at the rate in
effect at employment termination, for the twenty-four (24) month period and shall pay that amount to the Participant at the same time other Severance Benefits are paid. The Participant then shall be responsible for any payment required to
provide these benefits. 
  
 (e) Outplacement. The Company,
at its expense, shall provide reasonable outplacement assistance to the Participant for a period not to exceed one (1) year from a professional outplacement assistance firm which is reasonably suitable to the Participant and commensurate with
his position and responsibilities. In no event will the amount expended for outplacement assistance for the Participant exceed $40,000 USD. 
  
 (f) Certain Tax Payments. If the Participant becomes entitled to one or more payments (with a “payment” including, without limit, an
increase in pension benefits and the vesting of an option or other non-cash benefit or property) under the terms of any plan, arrangement or agreement with the Employer (the “Change in Control Payments”), which are or become subject to the
tax imposed by Code Section 4999 of the Code (or any similar tax that may be imposed) (the “Excise Tax”), the Company shall pay to the Participant an additional cash amount (the “Additional Gross-up Payment”) such that the
net amount retained by the Participant after reduction for (i) any Excise Tax on the Change in Control Payments and (ii) any federal, state and local income or employment tax and Excise Tax payable with respect to the Additional Gross-up
Payment, shall equal the Change in Control Payments. To determine the amount of the Additional Gross-up Payment, the Participant shall be deemed (i) to pay federal income taxes at the highest stated rate of federal income taxation (including
surtaxes, if any) for 

  

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the calendar year in which the Additional Gross-up Payment is to be made; and (ii) to pay any applicable state and local income taxes at the highest
stated rate of taxation (including surtaxes, if any) for the calendar year in which the Additional Gross-up Payment is to be made. Any Additional Gross-up Payment required hereunder shall be made to the Participant at the same time any Change in
Control Payment subject to the Excise Tax is paid or deemed received by the Participant. The Additional Gross-up Payment shall not be paid under this Plan if an Additional Gross-up Payment which is identical to or greater than the amount calculated
in this Section 4(f) is paid under any plan, arrangement or agreement with the Employer. 
  
 If, in connection with the examination of a Participant’s tax return, the Internal Revenue Service asserts that any amount payable or benefit provided hereunder is a “parachute payment” as defined in
the Code and that amount or benefit was not treated as a parachute payment in determining an Additional Gross-up Payment, the Company, at its cost, shall assume the defense of any controversy involving this issue and shall indemnify and hold the
Participant harmless for all liabilities, costs, taxes, interest and penalties attributable to this issue and, to the extent necessary (without duplication), shall increase the Additional Gross-up Payment to give effect to any additional amount or
benefit determined to be a parachute payment. The Participant shall cooperate with the Company so the Company will be able to challenge any adverse determination by the Internal Revenue Service through administrative proceedings and, if the Company
decides, through litigation. 
  
 (g) No Duty to Mitigate;
Offsets. A Participant’s Severance Benefit entitlement shall not be governed by any duty to mitigate the Participant’s damages by seeking further employment nor offset by any compensation which the Participant may receive from future
employment. However, a Participant’s payment under Section 4(a) shall be reduced by any payment required by law, regulation, custom, contract, agreement or other Company or Employer severance plan related to the Participant’s
employment termination, including but not limited to, any salary continuation during any notice period required by law, other than the notice period applicable to a Constructive Termination for Good Reason. 
  
 (h) Time of Payments. Any cash payment under this Section shall be
paid to a Participant within thirty (30) days of the Participant’s employment termination, unless the Participant is a Key Employee. Cash payments and benefits to a Participant who is a Key Employee shall be made six (6) months after
that Participant’s severance from service, to the extent required by the Act. 
  
 5. Company Benefit Plans. The specific arrangements referred to in this Plan are not intended (i) to exclude or limit a Participant’s participation in other benefit plans or programs in which
the Participant currently participates or may participate including, without limit, retiree benefits, or benefits which are available to executive personnel generally in the same class or category as the Participant or (ii) to preclude or limit
other compensation or benefits as may be authorized by the Committee or the Governing Body from time to time. If not otherwise paid or provided, the Company shall timely pay or provide to the Participants and/or the Participant’s dependents any
other amounts or benefits required to be paid or provided or which the Participant or the Participant’s dependents are eligible to receive under this Plan and under any plan program, policy or practice or contract or agreement of the Company as
in effect and applicable generally to executive personnel in the same class or category of a Participant. 
  

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 6. Payment Obligations Absolute. The Company’s obligation to pay or provide, or to
cause to be paid or provided, to Participants the amounts and benefits and to make the arrangements provided in this Plan shall be absolute and unconditional and shall not be affected by any circumstances (including, without limit, any claim,
counterclaim, recoupment, defense or other right, which the Employer may have against a Participant or anyone else, other than an offset provided under Section 4(g)). All amounts payable by or on behalf of the Company shall be paid without
notice or demand. Each and every payment made by or on behalf of the Company shall be final and the Company and its subsidiaries or affiliates, for any reason whatsoever, shall not seek to recover all or any part of that payment from a Participant
or from whomever shall be entitled to it. In no event shall an asserted violation of any Plan provision constitute a basis to defer or withhold any amount payable to, or on behalf of, a Plan Participant. 
  

	 	7.	Confidentiality and Cooperation. 

  
 (a) Cooperation. Following termination, Participants will furnish information and render assistance and cooperation as reasonably requested in
connection with any litigation or legal proceedings concerning the Company, any of its Subsidiaries (other than any legal proceedings arising out of or concerning Participant’s employment or Participant’s termination). The Company will pay
or reimburse Participants for reasonable expenses in connection with this cooperation. 
  
 (b) Release of Liability. Each Participant, as a further eligibility condition for Plan benefits under Section 4, must execute and deliver to the Company, in a form acceptable to the Company, a separate
release and waiver, which, without limiting the generality of the foregoing, shall include a release and discharge of the Company, its Subsidiaries, and its and their directors, board of directors, officers, employees, owners, agents, successors and
assigns from any and all suits, causes of action, demands, claims, charges, complaints, liabilities, costs, losses, damages, injuries, bonds, judgments, attorneys’ fees and expenses, in any form whatsoever, in law or in equity, whether known or
unknown, whether suspect or unsuspected, arising out of the Participant’s employment with Company or any Subsidiary through his termination. 
  
 8. Plan Term. If a Change in Control occurs, this Plan shall continue in full force and effect and shall not terminate or expire
until all Participants who become entitled to any Plan payments shall have received those payments in full. The Committee may amend, substitute, revoke or terminate the Plan at any time before a Change in Control; provided, however, that no
amendment, substitution, revocation or termination shall occur without consent of the affected Participants if a third party has submitted a proposal to the Board that is reasonably calculated, in the Committee’s judgment to effect a Change in
Control. After a Change in Control, the Plan shall not be amended, substituted, revoked or terminated in any respect which adversely affects a Participant’s rights of a Participant without the Participant’s consent. 
  
 Notwithstanding the above, if any Plan provision would result in an
additional tax under the Act, that provision will be reformed to avoid the additional tax and no action taken to comply with the Act shall be deemed to adversely affect a Participant’s rights. Without limiting this general provision, the Plan
may be amended to modify (i) the definition of “Constructive Termination for Good Reason,” (ii) the conditions for eligibility under Section 3(c), (iii) the time to pay or provide benefits under Section 4, and
(iv) eligibility for insurance coverage under Section 4, including retiree medical coverage, to the extent necessary to avoid imposition of an additional tax under the Act. 
  

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 9. Notices. All notices, requests, demands and other communications required or permitted
to be given under this Plan (“notices”) shall be in writing and shall be deemed to have been given if delivered by-hand, given by facsimile or telegram, or mailed via certified or registered U.S. mail, to the party to receive the notice at
the party’s address set forth below; provided that either party may change its address for notice by giving the other party written notice of that change. 
  

If to the Company: 
  
 Lyondell Chemical Company 
 1221 McKinney, Suite 700, 
 Houston, TX 77010 
 Attn: Chairman of the Board of Directors 
  
 If to a Participant: 
  
 Last address on the books of the Employer. 
  
 Any notice given under this Plan shall be deemed received (i) when delivered if delivered by-hand or mailed and; (ii) 24 hours after sending, if
sent by facsimile or telegram. 
  
 10. Claims
Procedure. If a Participant or his authorized representative (“claimant”) makes a written request alleging a right to receive Plan benefits or alleging a right to receive an adjustment in Plan benefits being paid, the Committee
shall treat it as a benefit claim. All benefit claims under the Plan shall be sent to the Committee and must be received within thirty (30) days after employment termination. The decision will be made within ninety (90) days after the
Committee receives the claim unless the Committee determines additional time due to special circumstances is needed. If the Committee determines that an extension to process a claim is required, the final decision may be deferred up to one hundred
eight (180) days after the claim is received, if the claimant is notified in writing of the need for the extension and the anticipated date of a final decision before the end of the initial ninety (90) day period. 
  
 If the Committee decides that any individual who has claimed a right to
receive benefits, or different benefits, under the Plan is not entitled to receive all or any part of the benefits claimed, it will inform the claimant in writing, in terms calculated to be understood by the claimant, of the specific reasons for the
denial, the Plan provisions on which the denial is based, a description of additional material of information necessary to perfect the claim and an explanation of why the material or information is needed, and an explanation of the Plan’s claim
review procedures. If no action is taken on the claim within the time periods shown above, the claim shall be deemed denied on the last day of the applicable time period. The claimant is entitled to a full and fair review of the denied claim after
actual or constructive notice of a denial. 
  
 The claimant must
file a written request for review with the Committee, setting forth the grounds for the request and any supporting facts, comments or arguments he wishes to make, within sixty (60) days after actual or constructive notice. If a written request
for review is not received within this sixty (60) day period, the denial will be final. The claimant shall have reasonable access to all relevant documents pertaining to the claim. 
  

 -12- 

 The Committee or the persons responsible to conduct the review on the Committee’s behalf shall
conduct a full and review the claim. Unless special circumstances require an extension of the review period, the Committee will render its decision no later than the date of its next regularly scheduled meeting, unless the request is filed less than
thirty (30) days before that meeting. If the request is filed less than thirty (30) days before a regularly scheduled meeting, the Committee will render its decision no later than the date of the second regularly scheduled meeting after it
receives the request. However, if special circumstances require an extension of the review period, a final decision shall be rendered no later than the third regularly scheduled meeting after it receives the request for review, if the claimant is
notified in writing of the special circumstances and the date of the expected decision, before the time is extended due to special circumstances. If the decision on review is not furnished to the claimant within the applicable time period(s), the
claim shall be denied on the last day of the applicable period. Committee decisions shall be in writing and provided no later than five (5) days after the decision is made. The decision shall include specific reasons for the action taken,
including the specific Plan provisions on which the decision is based. The claimant shall be notified of the right to reasonable access, on request, to relevant documents or other information without charge. 
  
 11. Arbitration of Disagreements. Any dispute, controversy or
claim arising out of or relating to Plan obligations (after exhaustion of the claims procedure remedies under Section 10), shall be settled by final and binding arbitration according to the American Arbitration Association Employment Dispute
Resolution Rules. The arbitrator shall be selected by mutual agreement of the parties, if possible. If the parties fail to reach agreement upon appointment of an arbitrator within thirty (30) days after one party receives the other party’s
notice of desire to arbitrate, the arbitrator shall be selected from a panel or panels submitted by the American Arbitration Association (the “AAA”). The selection process to be used is set forth in the AAA Employment Dispute Resolution
Rules, but if the parties fail to select an arbitrator from one or more panels, AAA shall not have the power to appoint and arbitrator, but shall continue to submit additional panels until an arbitrator has been selected. All fees and expenses of
the arbitration, including a transcript if requested, will be borne by the parties equally. 
  

	 	12.	Miscellaneous. 

  
 (a) Assignment. No right, benefit or interest hereunder shall be subject to assignment, anticipation, alienation, sale, encumbrance, charge,
pledge, hypothecation or set-off for any claim, debt or obligation, or subject to execution, attachment, levy or similar process; but a Participant may assign any right, benefit or interest if the assignment is permitted under the terms of any plan
or insurance policy, or annuity contract governing that right, benefit or interest. 
  
 (b) Construction. Nothing in this Plan shall be construed to amend any provision of any plan or policy of the Company or any Subsidiary except as otherwise expressly noted herein. This Plan is not, and shall
not, be deemed to create any commitment by the Company or any Subsidiary to continue a Participant’s employment. The captions of this Plan are not part of the provisions and shall have no force or effect. Whenever the context requires, the
masculine gender includes the feminine gender, and words used in the singular or plural will include the other. 
  

 -13- 

 (c) Successors. A Participant’s rights under this Plan are personal to the Participant and
shall not be assignable by a Participant other than by will or the laws of descent and distribution without the Company’s prior written consent. This Plan shall inure to the benefit of and be enforceable by a Participant’s legal
representatives. The Company will require any successor to assume this Plan, and to agree to perform this Plan in the same manner and to the same extent that the Company would be required to perform this Plan if no succession had taken place. The
Company’s failure to obtain the successor’s assumption and agreement shall entitle a Participant to compensation from the Company in the same amount and on the same terms as he would be entitled under this Plan as if a Constructive
Termination for Good Reason had occurred. 
  
 This Plan shall be
binding upon and inure to the benefit of the Company and any successor organization or organizations which shall succeed to substantially all of the Company’s business and/or assets (whether directly or indirectly by merger, consolidation,
acquisition of substantially all the Company’s assets or otherwise, including by operation of law). 
  
 (d) Taxes. Any payment or delivery required under this Plan shall be subject to all legal requirements regarding tax withholding, filing, reporting
and other obligations. 
  
 (e) Governing Law. TO THE EXTENT
THIS PLAN IS NOT GOVERNED BY FEDERAL LAW, THIS PLAN SHALL BE GOVERNED AND CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF TEXAS, WITHOUT GIVING EFFECT TO ITS CONFLICTS OF LAW PRINCIPLES. 
  
 LYONDELL CHEMICAL COMPANY 
  

 -14-New Executive Deferral Plan

 Exhibit 10.40 
  
 INSTRUMENT ADOPTING 
 LYONDELL CHEMICAL COMPANY 
 DEFERRAL PLAN 
  
 LYONDELL CHEMICAL COMPANY hereby adopts the Lyondell Chemical Company
Deferral Plan, to read in its entirety as the document entitled “Lyondell Chemical Company Deferral Plan”, attached hereto. 
  
 IN WITNESS WHEREOF, LYONDELL CHEMICAL COMPANY, acting by and through its duly authorized officer, has caused this Instrument to be executed on this 28th
day of November, 2005. 
  

					
		
	ATTEST:	 	LYONDELL CHEMICAL COMPANY
			
	 /s/ JoAnn L. Beck

	 	By:	 	 /s/ Dan F. Smith

	Assistant Secretary	 	 	 	Dan F. Smith
	 	 	 	 	President and Chief Executive Officer

 Lyondell Chemical Company 
  
 DEFERRAL PLAN 
  
 Effective January 1, 2005 

 Lyondell Chemical Company 
 Deferral Plan 
  
 Table of Contents 
  

					
	ARTICLE I GENERAL PROVISIONS	  	1
			
	 Section 1.1
	 	 Purpose and Intent
	  	1
	 Section 1.2
	 	 Effective Date
	  	1
	 Section 1.3
	 	 Definitions
	  	1
		
	 ARTICLE II PARTICIPATON AND DEFERRAL ELECTIONS
	  	5
			
	 Section 2.1
	 	 Eligibility and Participation
	  	5
	 Section 2.2
	 	 Deferral Types
	  	5
	 Section 2.3
	 	 Deferral Elections
	  	5
	 Section 2.4
	 	 Deferral Limits
	  	5
	 Section 2.5
	 	 Separation from Service
	  	6
	 Section 2.6
	 	 Transfers
	  	6
	 Section 2.7
	 	 Modification of Deferral Elections
	  	6
		
	 ARTICLE III DEFERRED COMPENSATION ACCOUNTS
	  	7
			
	 Section 3.1
	 	 Accounts
	  	7
	 Section 3.2
	 	 Deferred Compensation
	  	7
	 Section 3.3
	 	 Interest Rate
	  	7
	 Section 3.4
	 	 Account Value
	  	7
	 Section 3.5
	 	 Vesting
	  	8
	 Section 3.6
	 	 Account Statements
	  	8
		
	 ARTICLE IV PLAN BENEFITS
	  	9
			
	 Section 4.1
	 	 Basic Plan Benefit
	  	9
	 Section 4.2
	 	 Distribution Elections
	  	9
	 Section 4.3
	 	 Survivor Benefits
	  	10
	 Section 4.4
	 	 Early Distribution
	  	11
	 Section 4.5
	 	 Financial Hardship Distribution
	  	11
	 Section 4.6
	 	 Valuation and Settlement
	  	12
	 Section 4.7
	 	 Small Benefit
	  	12
	 Section 4.8
	 	 Benefits On a Change in Control
	  	12
	 Section 4.9
	 	 Events Constituting a “Change in Control”
	  	12
		
	 ARTICLE V BENEFICIARY DESIGNATION
	  	15
			
	 Section 5.1
	 	 Beneficiary Designation
	  	15
	 Section 5.2
	 	 Failure to Designate a Beneficiary
	  	15
		
	 ARTICLE VI ADMINISTRATION
	  	16

					
	 Section 6.1
	 	 Interpretation
	  	16
	 Section 6.2
	 	 Administrative Records
	  	16
	 Section 6.3
	 	 Claims
	  	16
	 Section 6.4
	 	 Committee Liability
	  	17
		
	ARTICLE VII AMENDMENT AND TERMINATION	  	18
			
	 Section 7.1
	 	 Plan Amendment
	  	18
	 Section 7.2
	 	 Termination
	  	18
	 Section 7.3
	 	 Effect of Amendment or Termination
	  	18
	 Section 7.4
	 	 Effect of Legislation
	  	18
		
	ARTICLE VIII MISCELLANEOUS	  	19
			
	 Section 8.1
	 	 Unfunded Benefit Plan
	  	19
	 Section 8.2
	 	 Unsecured General Creditor
	  	19
	 Section 8.3
	 	 Grantor Trust
	  	19
	 Section 8.4
	 	 Non-Assignment
	  	19
	 Section 8.5
	 	 No Employment Right
	  	20
	 Section 8.6
	 	 Adjustments
	  	20
	 Section 8.7
	 	 Obligation to Company
	  	20
	 Section 8.8
	 	 Protective Provisions
	  	20
	 Section 8.9
	 	 Gender, Singular and Plural
	  	20
	 Section 8.10
	 	 Governing Law
	  	20
	 Section 8.11
	 	 Notice
	  	21
	 Section 8.12
	 	 Successors and Assigns
	  	21
	 Section 8.13
	 	 Incapacity
	  	21

 ARTICLE I 
  

GENERAL PROVISIONS 
  
 Section 1.1 Purpose and Intent. 
  
 This Plan is intended to provide the opportunity for eligible Employees to accumulate supplemental funds for retirement or special needs before retirement
through deferral of portions of their regular Salary, Awards and Executive Supplementary Savings Plan benefits. 
  
 This Plan replaces the deferral provisions of the Lyondell Chemical Company Executive Deferral Plan (“Prior Plan”) to conform to the
requirements of Code Section 409A and any related regulation or other guidance promulgated by applicable governmental agencies (“Code Section 409A”) and establishes the provisions of this Plan as intended to apply to deferrals of
compensation earned or accrued in 2005 and thereafter. Amounts deferred before 2005 and associated earnings shall continue to be governed by the terms of the Prior Plan. 
  
 Section 1.2 Effective Date. 
  
 This Plan document generally shall be effective as of January 1, 2005 and shall apply to those Employees who are employed by the Company on or after
January 1, 2005, unless certain provisions specify that they are effective on a different date. 
  
 Section 1.3 Definitions. 
  
 Account means a separate bookkeeping account maintained by the Company for each Employee which measures and determines the amounts to be paid to the Employee under the Plan from January 1, 2005 forward. An Account may be
divided in subaccounts as needed to reflect particular Deferral Elections. 
  
 Administrative Committee means the Benefits Administrative Committee of the Company. 
  
 Awards means immediate cash awards made under the Lyondell Chemical Company annual incentive compensation plans for executives and senior
managers or awards under any other plan that the Board of Directors of Lyondell Chemical Company, or its Compensation and Human Resources Committee, has authorized the Company to adopt and to treat as Awards under this Plan. 
  
 Beneficiary means a person who is entitled to receive a
Participant’s interest under this Plan when the Participant dies before his Account is totally distributed. 
  
 Change in Control means a change in the control of Lyondell Chemical Company as defined in Section 4.9. 
  

 1 

 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 Election means a Participant’s election to defer
Salary, Awards, and/or ESSP Benefits during a Deferral Period according to Article II. 
  
 Deferral Period means the particular calendar year for which a Deferral Election is made. A new Deferral Period begins each January 1 and ends each December 31. 
  
 Deferred Compensation means the amount of Salary, Awards and/or
ESSP Benefits a Participant elects to defer by a Deferral Election. 
  
 Disability means a medically determinable physical or mental impairment which is expected to last for at least a continuous twelve (12) month period or is expected to result in death, where the Participant (i) either
cannot engage in any substantial gainful employment due to the impairment or (ii) is receiving disability benefits for at least three (3) months under the Company’s applicable disability plan. 
  
 Distribution means a distribution of a Participant’s
Account as a result of a Separation from Service or other event specified under this Plan and permitted by Code Section 409A. 
  
 Early Distribution means a distribution before Separation from Service as specified in Section 4.4 and permitted by Code
Section 409A. 
  
 Effective Date means
January 1, 2005. 
  
 Employee means a regular
salaried employee of the Company. 
  
 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. 
  
 ESSP Benefits means benefits under the Company’s Executive Supplementary Savings Plan. 
  
 Financial Hardship means a condition of severe financial
difficulty due to an unforeseeable emergency resulting from (i) an illness or accident of the Participant, his spouse or dependent; (ii) a casualty causing a Participant’s property loss; or (iii) other similar or extraordinary
and unforeseeable circumstances created by events beyond the Participant’s control, as determined by the Administrative Committee, upon advice of counsel, based on written information supplied by the Participant and which is sufficient, in
counsel’s judgment, to justify a change in a distribution election under the Plan without causing the Participant or any other Participant to receive taxable income from the Plan before the Participant actually receives his benefit. 

 

 2 

 Interest Rate means the interest rate announced by the Company before the Deferral Period
and applied to the Participant’s Account during that Plan Year. 
  
 Key Employee means an Employee who, at any time during the prior Plan Year, was identified as (i) an officer of the Company with annual compensation greater than $130,000, as adjusted, (ii) a five percent
(5%) owner of the Company, or (iii) a one percent (1%) owner of the Company with annual compensation from the Company of more than $150,000, as adjusted as determined according to the requirements of Code Sections 409A and 416(i). For
Plan distribution purposes, an Employee identified as a Key Employee during a year ending on an identification date shall be considered a Key Employee for a twelve (12) month period beginning on the following April 1. December 31 of
the prior Plan Year shall be used as the identification date to identify Key Employees under Code Section 409A. 
  
 Participant means any Employee who is participating in this Plan under Article II, and any former Employee who has not received the entire
benefit to which he is entitled under this Plan. 
  
 Plan means this Lyondell Chemical Company Deferral Plan. 
  
 Plan Year means each calendar year beginning on January 1 and ending on December 31. 
  
 Salary means the Employee’s regular, biweekly salary, excluding Awards and any other special or additional compensatory payments made
by the Company. 
  
 Separation from Service means
the Participant’s employment termination from Lyondell Chemical Company, or any of its Subsidiaries and Affiliates, which complies with the requirements of Code Section 409A. A transfer to or from Lyondell Chemical Company and any of its
Subsidiaries or Affiliates, shall not be a Separation from Service under this Plan. 
  
 Subsidiaries or Affiliates means: 
  
 (a) All corporations that are members of a controlled group of corporations within the meaning of Code Section 414(b) and of which the Company is then a member, and 
  
 (b) All trades or businesses, whether or not incorporated, that are then
under common control with the Company within the meaning of Code Section 414(c). 
  
 Survivor Benefit means the benefit under Section 4.3 provided when a Participant dies before his Account is distributed. 
  

 3 

 Valuation Date means the last day of each month, or another date the Administrative
Committee determines, in its discretion, which may be either more or less frequent, used to value Participants’ Accounts. 
  

 4 

 ARTICLE II 
  

PARTICIPATION AND DEFERRAL ELECTIONS 
  
 Section 2.1 Eligibility and Participation. 
  
 (a) Eligibility. Eligibility to participate in this Plan shall be limited to Employees who (1) are eligible to receive an Award (2) are
participants in the Executive Supplementary Savings Plan, or (3) have been designated as eligible by a specific resolution of the Administrative Committee upon recommendation of the Company’s Vice President, Human Resources. Effective
January 1, 2006, an Employee who becomes eligible to participate in this Plan after a Deferral Period begins shall not be eligible to participate until the following Deferral Period. 
  
 (b) Participation. An eligible Employee may elect to participate in the Plan by submitting a Deferral Election for a
Deferral Period. 
  
 Section 2.2 Deferral Types. 
  
 A Participant may elect to defer Salary, Awards and/or ESSP Benefits,
subject to any limits, conditions or restrictions, such as minimum or maximum deferral amounts, as the Administrative Committee prescribes before the Deferral Period begins. A Participant may also elect to defer an Early Distribution at the time and
in the manner the Administrative Committee prescribes. 
  
 Section 2.3
Deferral Elections. 
  
 Before each Deferral Period, at a
time and in the manner the Administrative Committee prescribes, each eligible Employee may elect to defer Salary, Awards, and/or ESSP Benefits. The time and form of distribution of the deferred amount shall be elected when the Deferral Election is
made. This Deferral Election shall be irrevocable after the Deferral Period begins, unless modifications are authorized under Section 2.7. 
  
 Section 2.4 Deferral Limits. 
  
 Deferral Elections are subject to the following limits: 
  

	 	(a)	A Participant may not defer more than fifty percent (50%) of his Salary. 

  

	 	(b)	The Administrative Committee shall establish a minimum amount that may be deferred before the Deferral Period begins. 

  

 5 

 Section 2.5 Separation from Service. 
  
 Any outstanding Deferral Election relating to Awards and/or ESSP Benefits payable after Separation from Service shall remain
binding; otherwise, a Participant’s Deferral Elections shall terminate on the Participant’s Separation from Service. 
  
 Section 2.6 Transfers. 
  
 A Participant’s Deferral Elections shall be irrevocable regardless of a transfer of employment among Lyondell Chemical Company, any of its
Subsidiaries or Affiliates, or LYONDELL-CITGO Refining LP. When a transfer occurs, the Participant’s Deferral Election shall continue to apply to Awards, Salary or ESSP Benefits granted by the transferee company and the transferee
company’s deferral plan shall assume responsibility for the remainder of the Deferral Period, if any, subject to any Deferral Election that the Participant made under the transferor company’s plan. 
  
 Section 2.7 Modification of Deferral Elections. 
  
 The Administrative Committee may permit a Participant to cease remaining
deferrals under a Deferral Election upon finding that the Participant has suffered a Financial Hardship, to the extent that the Deferral Election may be revoked as a result of Financial Hardship under the Code Section 409A or a hardship
distribution under Code Section 401(k). 
  

 6 

 ARTICLE III 
  
 DEFERRED COMPENSATION ACCOUNTS 
  
 Section 3.1 Accounts. 
  
 Accounts shall be maintained for each Participant for record-keeping purposes only. A Participant’s Account may be divided into subaccounts if
necessary to determine how a Participant’s Distribution Elections shall apply to portions of the Account. 
  
 Section 3.2 Deferred Compensation. 
  
 A Participant’s Deferred Compensation shall be credited to the Participant’s Account on the date when the corresponding non-deferred portion of the compensation is paid or would have been paid but for the
Deferral Election. The Company shall have the right to withhold from Salary (or otherwise to cause the Participant or the executor or administrator of his estate, or his Beneficiary) to pay any federal, state, local and/or foreign taxes required to
be withheld on any Deferred Compensation. 
  
 Section 3.3 Interest Rate.

  
 Interest shall be credited monthly on the balance of the
Account on each Valuation Date beginning on the date when deferred amounts are credited to the Account. A Participant’s Account will be credited with interest monthly during each Plan Year before the full distribution of the Participant’s
Account at the Interest Rate previously announced by the Company to apply during the Plan Year. Prior to January 1, 2006, the monthly interest rate shall be based on the previous monthly average of the Salomon Brothers Corporate BB Bond Yield.
Effective January 1, 2006, the monthly Interest Rate during the Plan Year shall be based on the previous monthly average of the closing yield to maturity, as reported by Bloomberg, of Lyondell Chemical Company’s most junior publicly traded
debt on December 1 of the prior Plan Year. If this debt is retired during the Plan Year, the monthly interest rate shall be based on the previous monthly average of the then longest maturity for the Company’s most junior publicly traded
debt. 
  
 Section 3.4 Account Value. 
  
 A Participant’s Account on each Valuation Date shall consist of the
balance of the Participant’s Account on the immediately preceding Valuation Date, plus the amount of the Participant’s Deferred Compensation since the Valuation Date, plus interest credited to the Account, and minus any distributions or
reductions made from the Account since the immediately preceding Valuation Date. 
  

 7 

 Section 3.5 Vesting. 
  
 Each Participant shall be one hundred percent (100%) vested at all times in the amounts credited to the
Participant’s Account. 
  
 Section 3.6 Account Statements.

  
 The Company shall provide each Participant with periodic
statements setting forth the Participant’s Account balance. 
  

 8 

 ARTICLE IV 
  

PLAN BENEFITS 
  
 Section 4.1 Basic Plan Benefit. 
  
 Except as provided in Section 4.2, if a Participant has a Separation from Service, the Company shall pay a Plan benefit equal to the
Participant’s Account, including interest at the Interest Rate established in Section 3.3. Interest is payable on a Participant’s Account balance until the Account is fully distributed. 
  
 Section 4.2 Distribution Elections. 
  
 (a) Time and Form of Distribution. If the Participant becomes
entitled to a distribution due to Separation from Service on or after attaining age fifty-five (55) with at least ten (10) years of service recognized by the Company or due to Disability, distribution shall be made at the time and form
specified in the applicable Deferral Elections, unless the Participant’s Separation from Service is due to a transfer to LYONDELL-CITGO Refining LP. If the Participant transfers to LYONDELL-CITGO Refining LP, the Participant will become
entitled to a distribution in the tenth (10th) calendar year following the year when the transfer occurred. A
Participant may elect one or more of the following forms and commencement dates for all or portions of his Deferral Account. 
  
 (1) Lump Sum. A single payment of all of the amount deferred under a Deferral Election. 
  
 (2) Installment Payments. Monthly installment
payments for five (5), ten (10) or fifteen (15) years of the amount deferred under a Deferral Election in substantially equal payments of principal and interest. 
  
 Notwithstanding the foregoing, a Participant’s Account may be distributed earlier under the Plan terms due to death or
Financial Hardship, as provided in Sections 4.3 and 4.5, or for other reasons as may be provided under Code Section 409A. 
  
 (b) Distribution Elections Inapplicable. If a Participant’s Account becomes distributable due to Separation from Service before attaining age
fifty-five (55) with at least ten (10) years of service recognized by the Company, regardless of any time or form selected in a Participant’s Deferral Election, the Participant’s Account will be paid in substantially equal
payments of principal and interest over a three (3) year period beginning as soon as administratively possible, but no later than sixty (60) days after a Separation from Service or as provided in (e) if the Participant is a Key
Employee unless the Participant’s Separation from Service is due to a transfer to LYONDELL-CITGO Refining LP. If the Participant transfers to LYONDELL-CITGO Refining LP, the Participant will become entitled to a distribution in the tenth
(10th) calendar year following the year when the transfer occurred. The amount of each monthly installment
shall be redetermined, effective January 1 of each year, based on the remaining balance subject to the installment payment election and the remaining number of installment payments. 
  

 9 

 (c) Failure to Make a Distribution Election. If the Participant becomes entitled to a distribution
on Separation from Service on or after attaining age fifty-five (55) with at least ten (10) years of service recognized by the Company or due to a Disability and has failed to make a distribution election for an amount deferred for a
particular Deferral Period, that portion of the Participant’s Account balance will be distributed immediately in a single cash payment as soon as administratively possible, but no later than sixty (60) days following that distributable
event or as provided in (e), if the Participant is a Key Employee. 
  
 (d) Change in Time or Form of Distribution. A Participant may elect to delay the commencement of, or change the form of, a Plan distribution, according to procedures adopted by the Administrative Committee, but (1) the election
may not become effective until at least twelve (12) months after the date the distribution election is made, (2) the election must defer payment for a period of at least five (5) years after the original distribution date and
(3) the new distribution election must be made at least twelve (12) months before the date the original distribution was scheduled to occur. 
  
 (e) Key Employees. If a Participant is a Key Employee whose Account becomes distributable due to Separation from Service, a distribution shall not
begin until six (6) months following the Key Employee’s Separation from Service, whether in a lump sum or installment payment form. Lump sum and installment payments shall be calculated on the Account value at the delayed distribution date
and shall commence as soon as administratively possible following the delayed distribution date. 
  
 (f) Special Rule for 2005 Deferral Elections. A Participant who made a Deferral Election for the Deferral Period beginning on January 1, 2005
(“2005 Deferral Election”) may elect to change the time or form of distribution of the amount deferred under the 2005 Deferral Election, according to procedures established by the Administrative Committee, if the distribution change is
made before December 31, 2005. 
  
 Section 4.3 Survivor Benefits.

  
 (a) Amount and Form. If the Participant dies
before his Account distribution begins, the Plan shall pay a Survivor Benefit equal to the value of the Participant’s Account balance, increased by the applicable Interest Rate on the unpaid Account balance during the period when Survivor
Benefit payments are being made to the Participant’s Beneficiary. A Participant may elect the form of Survivor Benefit payments and the election will apply to his entire Account balance. A Participant may elect Survivor Benefits payable in a
lump sum or monthly installments for five (5), ten (10) or fifteen (15) years in substantially equal payments of principal and interest. If the Participant has changed the Survivor Benefit election, the change shall not be effective until
twelve (12) months after the date the change was made. If the Participant fails to elect a form of Survivor Benefit payments, the Participant’s Account balance shall be distributed in a lump sum as soon as practical following the
Participant’s death. 
  

 10 

 If the Participant dies after his Account distribution begins, any Survivor Benefit payment elected under
this Plan shall not apply and the Participant’s Account balance shall continue to be paid to the Beneficiary in the benefit form that was payable to the Participant, until all remaining payments that would have been made to the Participant if
the Participant had lived have been made. Payments shall be increased by the applicable Interest Rate credited on the deceased Participant’s unpaid Account balance during each year payment is made to the Beneficiary. 
  
 (b) Death Following Change in Control. If a Participant is entitled to
a payment under Section 4.8 and dies before receiving his entire Account, the balance of the Participant’s Account shall be paid to Participant’s Beneficiary in a lump sum. 
  
 Section 4.4 Early Distribution. 
  
 A Participant may elect to receive an Early Distribution from his Account subject to the following restrictions: 
  
 (a) Election. The election to take an Early Distribution for a
particular Deferral Election must be made at the same time the Participant makes that Deferral Election. 
  
 (b) Amount. The amount which a Participant can elect to receive as an Early Distribution shall be the portion of the amounts deferred under a
particular Deferral Election, as prescribed by the Administrative Committee before the Deferral Period. If a previously elected amount exceeds the related Account balance when an Early Distribution is to be made, only the Account balance will be
paid. 
  
 (c) Time of Early Distribution. The Early
Distribution shall begin at a time elected by the Participant when the Deferral Election was made and the date elected for an Early Distribution must be at least two (2) years after the Deferral Election becomes effective. If the Participant
has a Separation from Service before the Early Distribution date, the Early Distribution election will be canceled and distribution will be made under Section 4.2. 
  
 (d) Distributions from Account. Amounts paid to a Participant under this Section shall be treated as distributions
from the Participant’s Account. 
  
 Section 4.5 Financial Hardship
Distribution . 
  
 (a) Financial Hardship Distribution.
When the Administrative Committee finds that a Participant has suffered a Financial Hardship, following the Participant’s written application, the Administrative Committee shall distribute all or a portion of the Participant’s Account
reasonably necessary to satisfy the Financial Hardship. The amount necessary to satisfy the Financial Hardship shall be the amount determined according to the requirements of Code Section 409A. The distribution shall be paid in a lump sum as
soon as administratively practical following the Financial Hardship finding. 
  

 11 

 (b) Review of the Request for Financial Hardship Distribution. Counsel for the Plan, on an ongoing
basis, shall review legal and tax developments to assure continuous compliance with the relevant authorities governing plan design to prevent constructive receipt of taxable income by any Participant, and shall advise the Administrative Committee of
the applicable law. 
  
 Section 4.6 Valuation and Settlement.

  
 The Settlement Date shall be the earlier of the date when
a lump sum is paid or when installment payments commence. The Settlement Date for a Distribution shall be no more than thirty (30) days after the last day of the month when the Participant or his Beneficiary becomes entitled to a Distribution,
or six (6) months later, if the Participant is a Key Employee. The Settlement Date for an Early Distribution shall be the month that the Participant has elected to commence payment. The amount of a lump sum and the initial amount of installment
payments for a Participant’s Account shall be based on the value of the Participant’s Account on the Valuation Date at the end of the immediately preceding month before the Settlement Date. 
  
 Section 4.7 Small Benefit. 
  
 Notwithstanding any Distribution Election, the Administrative Committee, in
its sole discretion, may pay any benefit as a lump sum payment to the Participant or any Beneficiary, if the lump sum amount of the Account balance that remains in the Account, or which is payable to the Participant or Beneficiary in installments
when payments to the Participant or Beneficiary would otherwise commence, is less than $10,000. 
  
 Section 4.8 Benefits On a Change in Control. 
  
 Notwithstanding any contrary Plan provisions, the provisions of this Section shall control on a Change in Control of the Company. On a Change in Control, as defined in Section 4.9, the full amount of
contributions and earnings accrued or credited to the Participant’s Account (on the date immediately before the Change in Control) shall be distributed to the Participant or the Participant’s Beneficiary, if a Survivor Benefit is being
paid when the Change in Control occurs. Payment shall be made in a lump sum form. 
  
 Section 4.9 Events Constituting a “Change in Control”. 
  
 For Plan purposes, a Change in Control shall be deemed to have occurred on the date that one or more of the following occurs: 
  

(a) Individuals who, within any twelve (12) month period, constitute a majority of the Board (“Incumbent Directors”) are replaced as
members of the Board by individuals who are not Incumbent Directors. Incumbent Directors shall include any individual becoming a director within the same twelve (12) month period when the person’s election or appointment was approved by a
vote of at least a majority of the then Incumbent Directors and shall exclude for this purpose any individual whose initial assumption of office was not endorsed by a majority of the Board. 
  

 12 

 (b) The date of 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 the shareholders of the Company immediately before that Acquisition Transaction would beneficially own, directly or indirectly, immediately after that Acquisition
Transaction, shares or other ownership interests representing in the aggregate less than fifty percent (50%) of (i) 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 (ii) the Combined
Voting Power of the then outstanding Voting Securities of the Surviving Entity. 
  
 (c) 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 fifty percent (50%) of either (i) the then outstanding shares of common stock of the Company (“Common Shares”) or (ii) 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 (c): 
  
 (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 fifty percent (50%) 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 fifty percent (50%) of the Combined Voting Power of all then outstanding Voting Securities; or 
  
 (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; 
  
 (d) For purposes of this Change in Control definition, the following capitalized terms have the following meanings: 
  
 (i) “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. 
  
 (ii) “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 the then outstanding
Voting Securities of such corporation or other entity. 
  

 13 

 (iii) “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, any of its subsidiaries or affiliates or LYONDELL-CITGO Refining LP (“LCR”), any employee benefit plan of the Company or LCR or any of their subsidiaries or any entity organized, appointed or
established by the Company, LCR, or their subsidiaries for or pursuant to the terms of any plan. 
  
 (iv) “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. 
  

 14 

 ARTICLE V 
  

BENEFICIARY DESIGNATION 
  
 Section 5.1 Beneficiary Designation. 
  
 Each Participant has the right to designate a Beneficiary or Beneficiaries to receive his interest in his Account on his death. The designation shall be
made in the time and manner the Administrative Committee prescribes. The Participant has the right to change or revoke any designation from time to time by filing a new designation or notice of revocation, and no notice to any Beneficiary nor
consent by any Beneficiary shall be required to make any change or revocation. 
  
 Section 5.2 Failure to Designate a Beneficiary. 
  
 If a Participant fails to designate a Beneficiary before his death, or if no designated Beneficiary survives the Participant, the Administrative Committee shall direct the Company to pay his Account balance in a lump sum to the executor or
administrator of his estate. 
  

 15 

 ARTICLE VI 
  

ADMINISTRATION 
  
 Section 6.1 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, Participants, Employees and all other persons. 
  
 Section 6.2 Administrative Records. 
  
 The Administrative Committee shall keep records reflecting Plan administration, which the Company may audit. 
  
 Section 6.3 Claims. 
  
 If a Participant makes a written request alleging a right to receive Plan
benefits or alleging a right to receive an adjustment in Plan benefits being paid, the Administrative Committee shall treat it as a benefit claim. All benefit claims under the Plan shall be sent to the Administrative Committee and must be received
within thirty (30) days after Separation from Service. The decision will be made within ninety (90) days after the Administrative Committee receives the claim unless the Administrative Committee determines additional time due to special
circumstances is needed. If the Administrative Committee determines that an extension to process a claim is required, the final decision may be deferred up to one hundred eighty (180) days after the claim is received, if the claimant is
notified in writing of the need for the extension and the anticipated date of a final decision before the end of the initial ninety (90) day period. 
  
 If the Administrative Committee decides that any individual who has claimed a right to receive benefits, or different benefits, under the Plan is not
entitled to receive all or any part of the benefits claimed, it will inform the claimant in writing or electronically, in terms calculated to be understood by the claimant, of the specific reasons for the denial, the Plan provisions on which the
denial is based, a description of additional material or information necessary to perfect the claim and an explanation of why the material or information is needed, and an explanation of the Plan’s claim review procedures. If no action is taken
on the claim within these time periods, the claim shall be deemed denied on the last day of the applicable time period. The claimant is entitled to a full and fair review of the denied claim after actual or constructive notice of a denial.

  
 The claimant, or his authorized representative, must file a
written request for review with the Administrative Committee setting forth the grounds for the request and any supporting facts, comments or arguments he wishes to make, within sixty (60) days after actual or constructive notice. If a written
request for review is not received within this sixty (60) day period, the denial will be final. The claimant shall have reasonable access to all relevant documents pertaining to the claim. 
  

 16 

 The Administrative Committee or the persons responsible to conduct the review on the Administrative
Committee’s behalf shall conduct a full review of the claim. Unless special circumstances require an extension of the review period, the Administrative Committee will render its decision no later than the date of its next regularly scheduled
meeting, unless the request is filed less than thirty (30) days before that meeting. If the request is filed less than thirty (30) days before a regularly scheduled meeting, the Administrative Committee will render its decision no later
than the date of the second regularly scheduled meeting after it receives the request. However, if special circumstances require an extension of the review period, a final decision shall be rendered no later than the third regularly scheduled
meeting after it receives the request for review, if the claimant is notified in writing of the special circumstances and the date of the expected decision, before the time is extended due to special circumstances. If the decision on review is not
furnished to the claimant within the applicable time period(s), the claim shall be denied on the last day of the applicable period. Administrative Committee decisions shall be in writing and provided no later than five (5) days after the
decision is made. The decision shall include specific reasons for the action taken, including the specific Plan provisions on which the decision is based. The claimant shall be notified of the right to reasonable access, on request, to relevant
documents or other information without charge. 
  
 Section 6.4 Committee
Liability . 
  
 No Administrative Committee member shall be
liable for any action taken in good faith or for exercise of any power given the Administrative Committee, or for the actions of other Administrative Committee members. 
  

 17 

 ARTICLE VII 
  
 AMENDMENT AND TERMINATION 
  
 Section 7.1 Plan Amendment. 
  
 This Plan may be amended from time to time by a resolution of the Compensation Committee of the Board of Directors of the Company. 
  
 Section 7.2 Termination. 
  
 The Company intends to continue this Plan indefinitely, but reserves the
right to terminate it at any time for any reason. 
  
 Section 7.3 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 before the effective date of the amendment or termination. However, the Company may amend the Plan to eliminate any form of
payment or to comply with any law or regulation, including but not limited to, reformation of any Plan provision that would result in an excise tax being imposed under Code Section 409A, and if so, that amendment or reformation will not be
deemed to adversely affect any Participant’s benefit entitlement. 
  
 Section 7.4 Effect of Legislation. 
  
 If
any Plan provision would result in imposition of an excise tax under Code Section 409A, the terms of Code Section 409A shall apply and that Plan provision will be reformed to avoid the excise tax. 
  

 18 

 ARTICLE VIII 
  
 MISCELLANEOUS 
  
 Section 8.1 Unfunded Benefit Plan. 
  
 This Plan is intended to constitute an unfunded plan which is maintained primarily to provide deferred compensation in the form of additional benefits to
a select group of management or highly compensated employees, as defined in ERISA Sections 201(a)(2), 301(a)(3) and 401(a)(1). 
  
 Section 8.2 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 (“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 8.3 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. 
  
 Section 8.4 Non-Assignment. 
  
 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 Beneficiaries. 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 8.7. 
  

 19 

 Section 8.5 No Employment Right. 
  
 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 8.6
Adjustments. 
  
 At the Company’s request, the
Administrative Committee may adjust a 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 8.7 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, in its sole discretion, may offset the amount owed to the Company or the benefit plan
against the amount of benefits otherwise distributable under this Plan. 
  
 Section 8.8 Protective Provisions. 
  
 Each
Participant shall cooperate with the Company by furnishing any and all information the Company requests to facilitate Plan benefit payments, taking any physical examinations the Company deems necessary and taking other relevant action as 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. 
  
 Section 8.9 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 8.10 Governing Law. 
  
 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. 
  

 20 

 Section 8.11 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 on the delivery date or, if
delivery is made by mail, on the date shown on the postmark on the receipt for registration or certification. 
  
 Section 8.12 Successors and Assigns. 
  
 This Plan shall be binding on the Company and its successors and assigns. 
  
 Section 8.13 Incapacity. 
  
 If the Administrative Committee deems any person entitled to receive any Plan payment is incapable of receiving or disbursing the payment because of minority, illness or infirmity, mental incompetency, 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 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 limit, to any relative who has
undertaken, wholly or partially, the expense of the 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. 
  

 21

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