Exhibit 4.4
TRUST AGREEMENT
between
XXXXXXX XXXXX TRUST COMPANY OF TEXAS, as the Trustee
and
PENNZOIL-QUAKER STATE COMPANY, as the Employer
Trust Agreement entered into as of November 2, 1998 by and between the
above-named employer (the "Employer") and Xxxxxxx Xxxxx Trust Company of Texas,
a Texas corporation (the "Trustee"), with respect to a trust ("Trust") forming
part of the Pennzoil-Quaker State Company Savings & Investment Plan (the
"Plan").
The Employer and the Trustee hereby agree as follows:
ARTICLE I
STATUS OF TRUST AND APPOINTMENT
AND ACCEPTANCE OF TRUSTEE
1.01 STATUS OF TRUST. The Trust is intended to be a qualified trust under
section 401(a) of the Internal Revenue Code of 1986, as amended from time to
time (the "Code"), and exempt from taxation pursuant to section 501(a) of the
Code.
1.02 APPOINTMENT OF TRUSTEE. The Employer represents that all necessary
action has been taken for the appointment of the Trustee as trustee of the Trust
and that the Trust Agreement constitutes a legal, valid and binding obligation
of the Employer.
1.03 ACCEPTANCE OF APPOINTMENT. The Trustee accepts its appointment as
trustee of the Trust.
1.04 TITLE OF TRUST. The Trust shall be known as the Pennzoil-Quaker
State Company Savings & Investment Plan Trust.
1.05 EFFECTIVENESS. This Trust Agreement shall not become effective until
executed and delivered by both the Employer and the Trustee.
ARTICLE II
ADMINISTRATIVE AND INVESTMENT FIDUCIARIES
2.01 NAMED ADMINISTRATIVE AND INVESTMENT FIDUCIARIES. For purposes of this
Trust Agreement, the term "Named Administrative Fiduciary" refers to the person
named or provided for in the Plan as responsible for the administration and
operation of the Plan, and the term "Named Investment Fiduciary" refers to the
person provided for in the Plan as responsible for the investment and management
of Plan assets to the extent provided for in this Trust
Agreement. The Named Administrative Fiduciary and the Named Investment Fiduciary
may be the same person. If any such person is not named or provided for in the
Plan, or if so named or provided for, is not then serving, the Employer shall be
the Named Administrative Fiduciary or the Named Investment Fiduciary or both, as
the case may be.
2.02 IDENTIFICATION OF NAMED FIDUCIARIES AND DESIGNEES. The Named
Administrative Fiduciary and the Named Investment Fiduciary under the Plan shall
each be identified to the Trustee in writing by the Employer, and specimen
signatures of each, or of each member thereof, as appropriate, shall be provided
to the Trustee by the Employer. The Employer shall promptly give written notice
to the Trustee of a change in the identity either of the Named Administrative
Fiduciary or the Named Investment Fiduciary, or any member thereof, as
appropriate, and until such notice is received by the Trustee, the Trustee shall
be fully protected in assuming that the identity of the Named Administrative
Fiduciary or Named Investment Fiduciary, and the members thereof, as
appropriate, is unchanged. Each person authorized in accordance with the Plan to
give a direction to the Trustee on behalf of the Named Administrative Fiduciary
or the Named Investment Fiduciary shall be identified to the Trustee by written
notice from the Employer or the Named Administrative Fiduciary or the Named
Investment Fiduciary, as the case may be, and such notice shall contain a
specimen of the signature. The Trustee shall be entitled to rely upon each such
written notice as evidence of the identity and authority of the persons
appointed until a written cancellation of the appointment, or the written
appointment of a successor, is received by the Trustee from the Employer, the
Named Administrative Fiduciary or the Named Investment Fiduciary, as the case
may be.
ARTICLE III
RECEIPTS AND TRUST FUND
3.01 RECEIPT BY TRUSTEE. The Trustee shall receive in cash or other assets
acceptable to the Trustee all contributions paid or delivered to it which are
allocable under the Plan and to the Trust and all transfers paid or delivered
under the Plan to the Trust from a predecessor trustee or another trust
(including a trust forming part of another plan qualified under section 401(a)
of the Code), provided that the Trustee shall not be obligated to receive any
such contribution or transfer unless prior thereto or coincident therewith, as
the Trustee may specify, the Trustee has received such reconciliation,
allocation, investment or other information concerning, or such direction,
instruction or representation with respect to, the contribution or transfer or
the source thereof as the Trustee may require. The Trustee shall have no duty or
authority to (a) require any contributions or transfers to be made under the
Plan or to the Trustee, (b) compute any amount to be contributed or transferred
under the Plan to the Trustee, or (c) determine whether amounts received by the
Trustee comply with the Plan.
3.02 TRUST FUND. For purposes of this Trust Agreement, the "Trust Fund"
consists of all money and other property received by the Trustee pursuant to
Section 3.01 hereof, increased by any income or gains on or increment in such
assets and decreased by any investment loss or expense, benefit or disbursement
paid pursuant to this Trust Agreement. The Trustee shall hold the Trust Fund,
without distinction between principal and income, as a nondiscretionary trustee
pursuant to the terms of this Trust Agreement. Assets of the Trust may, in the
Trustee's discretion, be held in an account maintained with an affiliate of the
Trustee.
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3.03 ADDITIONAL TRUST FUND. Notwithstanding any other provision of this
Trust Agreement, to the extent that assets of the Plan are held in trust by a
trustee other than the Trustee (such other trustee to be referred to as a
"Second Trustee"), the Employer shall have created two trust funds under the
Plan. The appointment of a Second Trustee shall be deemed a representation by
the Employer that the Plan contains all appropriate provisions relating to the
Second Trustee. The Trustee (i) shall discharge its duties and responsibilities
hereunder solely with respect to those assets delivered into its possession,
(ii) shall have no duties, responsibilities or obligations with respect to
assets held in trust by the Second Trustee unless and until such assets are
delivered to the Trustee and (iii) except as otherwise required under the
Employee Retirement Income Security Act of 1974, as amended from time to time
("ERISA"), shall have no liability or responsibility for the acts or omissions
of the Second Trustee. To the extent that assets of the Plan are held in trust
by multiple trustees other than the Trustee, the foregoing shall apply to each
such other trustee.
ARTICLE IV
PAYMENTS, ADMINISTRATIVE DIRECTIONS
AND EXPENSES
4.01 PAYMENTS BY TRUSTEE. Payments of money or property from the Trust Fund
shall be made by the Trustee upon direction from the Named Administrative
Fiduciary or its designee. Payments by the Trustee shall be transmitted to the
Named Administrative Fiduciary or its designee for delivery to the proper payees
or to payee addresses supplied by the Named Administrative Fiduciary or its
designee, and the Trustee's obligation to make such payments shall be satisfied
upon such transmittal. The Trustee shall have no obligation to determine the
identity of persons entitled to payments under the Plan or their addresses.
4.02 NAMED ADMINISTRATIVE FIDUCIARY'S DIRECTIONS. Directions from or on
behalf of the Named Administrative Fiduciary or its designee shall be
communicated to the Trustee or the Trustee's designee only in a manner and in
accordance with procedures acceptable to the Trustee. The Trustee's designee
shall not, however, be empowered to implement any such directions except in
accordance with procedures acceptable to the Trustee. The Trustee shall have no
liability for following any such directions or failing to act in the absence of
any such directions. The Trustee shall have no liability for the acts or
omissions of any person making or failing to make any direction under the Plan
or this Trust Agreement nor any duty or obligation to review any such direction,
act or omission.
4.03 DISPUTED PAYMENTS. If a dispute arises over the propriety of the
Trustee making any payment from the Trust Fund, the Trustee may withhold the
payment until the dispute has been resolved by a court of competent jurisdiction
or settled by the parties to the dispute. The Trustee may consult legal counsel
and shall be fully protected in acting upon the advice of counsel.
4.04 TRUSTEE'S COMPENSATION AND EXPENSES. The Employer shall (a) pay the
Trustee compensation as agreed upon grom time to time by the Employer and the
Trustee and (b) pay or reimburse the Trustee for all expenses incurred by the
Trustee in connection with or relating to the performance of its duties under
this Trust Agreement or its status as Trustee, including
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reasonable attorneys' fees. If the Employer so elects, such compensation and
expenses may be prorated among the employers who may adopt the Plan and Trust
Agreement or disbursed from the Trust Fund. Until paid by the Employer or
charged against and withdrawn from the Trust Fund, as the case may be, the
Trustee's compensation and expenses shall constitute a lien upon the Trust Fund.
By signing this Trust Agreement, the Employer authorizes the Trustee and/or
its affiliates to receive payments from certain mutual funds (and/or collective
trusts) for which no affiliate of the Trustee acts as investment manager or
adviser (or from the principal distributors and/or advisors of those funds or
trusts), in connection with the performance of reasonable and necessary services
(including recordkeeping, subaccounting, account maintenance, administrative and
other shareholder services). Because different mutual funds (or collective
trusts) may be subject to different fee arrangements, the Employer should
contact the Trustee or its designee to obtain further details on any specific
fee arrangements that may be applicable to investments under the Plan.
4.05 TAXES. The Trustee is authorized, with or without direction from the
Named Administrative Fiduciary or any other person, to withdraw from the Trust
Fund and pay any federal, state or local taxes, charges or assessments of any
kind levied or assessed against the Trust or assets thereof. Until paid, such
taxes shall be a lien against the Trust Fund. The Trustee shall give notice to
the Named Administrative Fiduciary of its receipt of a demand for any such
taxes, charges or assessments. The Trustee shall not be personally liable for
any such taxes, charges or assessments.
4.06 EXPENSES OF ADMINISTRATION. Expenses incurred by the Employer, the
Named Administrative Fiduciary, the Named Investment Fiduciary, any Investment
Manager designated pursuant to Section 5.02 or any other persons designated to
act on behalf of the Employer, the Named Administrative Fiduciary or the Named
Investment Fiduciary, including reimbursement for expenses incurred in the
performance of their respective duties, shall be the obligation of the Employer
or other person specified in the Plan. Such expenses, however, may be paid from
the Trust Fund upon the written direction to the Trustee of the Named
Administrative Fiduciary.
4.07 RESTRICTION ON ALIENATION. Except as provided in Section 4.08 or under
section 401(a)(13) of the Code, the interest of any Plan participant or
beneficiary in the Trust Fund shall not be subject to the claims of such
person's creditors and may not be assigned, sold, transferred, alienated or
encumbered. Any attempt to do so shall be void; and the Trustee shall disregard
any attempt. Trust assets shall not in any manner be liable for or subject to
debts, contracts, liabilities, engagement or torts of any Plan participant or
beneficiary, and benefits shall not be considered an asset of any such a person
in the event of the person's insolvency or bankruptcy.
4.08 PAYMENT ON COURT ORDER. The Trustee is authorized to make any payments
directed by court order in any action in which the Trustee is a party or
pursuant to a "qualified domestic relations order" under section 414(p) of the
Code; provided that the Trustee shall not make such payment if the Trustee is
indemnified and held harmless by the Employer in a manner satisfactory to the
Trustee against all consequences of such failure to pay. The Trustee is not
obligated to defend actions in which the Trustee is named but shall notify the
Employer or Named Administrative Fiduciary of any such action and may tender
defense of the action to
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the Employer, the Named Administrative Fiduciary or the participant or
beneficiary whose interest is affected. The Trustee may in its discretion defend
any action in which the Trustee is named and any expenses, including reasonable
attorneys' fees, incurred by the Trustee in that connection shall be paid or
reimbursed in accordance with Section 4.04 hereof.
ARTICLE V
INVESTMENTS
5.01 INVESTMENT MANAGEMENT. The Named Investment Fiduciary shall manage the
investment of the Trust Fund except insofar as (a) a person (an "Investment
Manager") who meets the requirements of section 3(38) of ERISA has authority to
manage Trust assets as referred to in Section 5.02 hereof or (b) the Plan
provides for participant or beneficiary direction of the investment of assets
allocable under the Plan to the accounts of such participants and beneficiaries.
In the latter situation, a list of the participants and beneficiaries and such
information concerning them as the Trustee may specify shall be provided by the
Employer or the Named Administrative Fiduciary to the Trustee and/or such
person(s) as are necessary for the implementation of the directions in
accordance with the procedure acceptable to the Trustee. Except as required by
ERISA, the Trustee shall invest the Trust Fund as directed by the Named
Investment Fiduciary, an Investment Manager or a Plan participant or
beneficiary, as the case may be, and the Trustee shall have no discretionary
control over, nor any other discretion regarding, the investment or reinvestment
of any asset of the Trust. The Trustee may limit the categories of assets in
which the Trust Fund may be invested.
It is understood that the Trustee may, from time to time, have on hand
funds which are received as contributions or transfers to the Trust which are
awaiting investment or funds from the sale of Trust assets which are awaiting
reinvestment. Absent receipt by the Trustee of a direction from the proper
person for the investment or reinvestment of such funds or otherwise prior to
the application of funds in implementation of such a direction, the Trustee
shall in accordance with the Trustee's normal procedures in this regard cause
such funds to be invested in shares of the money market fund acceptable to the
Trustee as the Employer or Named Investment Fiduciary may in writing to the
Trustee specify for this purpose from time to time. Any such fund may be
sponsored, managed or distributed by an affiliate of the Trustee. The Employer
or the Named Investment Fiduciary, as the case may be, hereby acknowledges that
prior to any such specification it has read or will have read the then current
prospectus for the specified fund.
5.02 INVESTMENT MANAGERS. The Employer or the Named Investment Fiduciary
may appoint one or more Investment Managers, who may be an affiliate of the
Trustee, to direct the Trustee in the investment of all or a specified portion
of the assets of the Trust. Any such Investment Manager shall be directed by the
Employer or the Named Investment Fiduciary, as the case may be, to act in
accordance with the procedures referred to in Section 5.04. The Named Investment
Fiduciary shall notify the Trustee in writing before the effectiveness of the
appointment or removal of any Investment Manager.
If there is more than one Investment Manager whose appointment is effective
under the Plan at any one time, the Trustee shall, upon written instructions
from the Employer or the Named Investment Fiduciary, establish separate funds
for control by each such Investment
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Manager. The funds shall consist of those Trust assets designated by the
Employer or the Named Investment Fiduciary.
5.03 DIRECTION OF VOTING AND OTHER RIGHTS.
(a) With respect to the voting and other rights involving securities other
than Pennzoil-Quaker State Stock, the Trustee shall act as directed by the Named
Investment Fiduciary, except that, when an Investment Manager shall be managing
Trust assets as provided in Section 5.01, the Investment Manager shall exercise
all voting rights thereto. If the Trustee does not receive timely instruction
from the Named Investment Fiduciary, the Trustee shall not vote any shares as to
which no direction has been furnished; provided, however, that in the case of
non-routine items (as defined in Section 5.03(c) and hereinafter referred to as
"Non-Routine Items"), if the Trustee does not receive timely instruction from
the Named Investment Fiduciary, the Trustee may take the actions described in
subsection (b)(2)(ii) below.
(b) With respect to the Pennzoil Company Stock Fund, each participant (or
beneficiary of a deceased participant) is, for purposes of this Section 5.03,
hereby designated as a "named fiduciary" (within the meaning of Section
403(a)(1) of ERISA) with respect to the shares of Pennzoil-Quaker State Stock
allocated to his account, and each participant (or beneficiary of a deceased
participant) shall have the right to direct the Trustee with respect to the vote
of the shares of Pennzoil-Quaker State Stock allocated to his account on each
matter brought before any meeting of the stockholders of the Employee or with
respect to any tender offer or exchange offer (as described below). Before each
such meeting of stockholders, or in the event of a tender offer or exchange
offer, as the case may be, the Employer shall cause to be furnished to each
participant (or beneficiary), as applicable, a copy of the proxy solicitation
material, together with a form requesting confidential directions to the Trustee
on how such hares of Pennzoil-Quaker State Stock allocated to such participant's
(or beneficiary's) account shall be voted on each such matter, or a copy of such
information as will be distributed to stockholders of the Employer in connection
with such tender offer or exchange offer. Upon timely receipt of instructions
from the participants (or beneficiaries), the Trustee shall respond as
instructed with respect to shares of Pennzoil-Quaker State Stock allocated to
such participant's (or beneficiary's) account. The instructions received by the
Trustee from participants (or beneficiaries) shall be held by the Trustee in
confidence and shall not be divulged or released to any person, including the
Named Investment Fiduciary, the Named Administrative Fiduciary, officers or
employees of the Employer or Affiliate (as defined in the Plan). If the Trustee
shall not receive timely instruction from a participant, the Trustee shall act
as follows:
(1) With respect to voting as to any matters other than Non-Routine
items, the Trustee shall vote shares of Pennzoil-Quaker State Stock as
directed by the Named Investment Fiduciary.
(2) With respect to voting as to Non-Routine Items and any tender or
exchange offer, including but not limited to a tender offer or exchange
offer within the meaning of the Securities Exchange Act of 1934, the
Trustee may either (i) refuse to vote, tender, or exchange any shares of
Pennzoil-Quaker State Stock with respect to which a participant has the
right of direction or (ii) at the cost of the Employer, obtain advice from
a bank, insurance company, investment adviser or other investment
professional or retain an Investment Manager with full discretion to make
the decision.
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(c) A voting item is considered a Non-Routine Item when the matter to be
voted upon is a merger, consolidation or any other matter which may affect
substantially the rights or privileges of Pennzoil-Quaker State Stock. Without
limiting the foregoing, a voting item is considered a Non-Routine Item when the
matter to be voted upon:
(1) is not submitted to stockholders by means of a proxy statement
comparable to that specified in Schedule 14A promulgated by the Securities
and Exchange Commission;
(2) is the subject of a counter-solicitation (i.e., a proxy contest):
(3) relates to a merger or consolidation (except a merger with a
wholly-owned subsidiary, provided stockholders dissenting do not have
rights of appraisal);
(4) involves rights of appraisal;
(5) authorizes mortgaging of property;
(6) authorizes or creates indebtedness or increases the authorized
amount of indebtedness;
(7) authorizes or creates a preferred stock or increases the
authorized amount of an existing preferred stock;
(8) alters the terms or conditions of existing stock or indebtedness;
(9) involves waiver or modification of preemptive rights (except when
the proposal is to waive such rights with respect to shares being offered
pursuant to stock options or purchase plans involving the additional
issuance of not more than five percent (5%) of the company's outstanding
common shares);
(10) changes existing quorum requirements with respect to stockholder
meetings;
(11) alters voting provisions or the proportionate voting power of
stock, or the number of its votes per share (except where cumulative voting
provisions govern the number of votes per share for election of directors
and the proposal involves a change in the number of its directors by not
more than ten percent (10%) or not more than one);
(12) authorizes issuances of stock, or options to purchase stock, to
directors, officers, or employees in an amount which exceeds five percent
(5%) of the total amount of the class outstanding;
(13) authorizes (i) a new profit-sharing or special remuneration plan,
or a new retirement plan, the annual cost of which will amount to more than
ten percent (10%) of average annual income before taxes for the preceding
five years, or (ii) the amendment of an existing plan which would bring its
cost above ten percent (10%) of
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such average annual income before taxes, except where the authorization is
for (a) retirement plans based on agreement or negotiations with labor
unions (or which have been or are to be approved by such unions), or (b)
any related retirement plan for benefit of non-union employees having terms
substantially equivalent to the terms of such union-negotiated plan, which
is submitted for action of stockholders concurrently with such union-
negotiated plan;
(14) changes the purposes or powers of a company to an extent which
would permit it to change to a materially different line of business and it
is the company's stated intention to make such a change;
(15) authorizes the acquisition of property, assets or a company,
where the consideration to be given has a fair value approximately 20
percent or ore of the market value of the previously outstanding shares;
(16) authorizes the sale or other disposition of assets or earning
power approximating 20 percent or more of those existing prior to the
transaction;
(17) authorizes a transaction not in the ordinary course of business
in which an officer, director or substantial security holder has a direct
or indirect interest; or
(18) reduces earned surplus by 51 percent or more, or reduces earned
surplus to an amount less than the aggregate of three years' common stock
dividends computed at the current dividend rate.
The Named Investment Fiduciary shall notify the Trustee when a voting item
is considered to be a Non-Routine Item pursuant to this Section 5.03. Except as
required by ERISA, the Trustee shall follow all directions in this Section 5.03
and shall have no other duty to exercise voting or other rights relating to any
security or other assets.
5.04 INVESTMENT DIRECTIONS. Directions for the investment or reinvestment
of Trust assets or directions of a type referred to in Section 5.03 from the
Employer, the Named Investment Fiduciary, an Investment Manager or a Plan
participant or beneficiary, as the case may be, shall, in a manner and in
accordance with procedures acceptable to the Trustee, be communicated to and
implemented by, as the case may be, the Trustee, the Trustee's designee or, with
the Trustee's consent, the broker/dealer designated for the purpose by the
Employer or the Named Investment Fiduciary. Communication of any such direction
to such a designee or broker/dealer shall conclusively be deemed an
authorization to the designee or broker/dealer to implement the direction even
though coming from a person other than the Trustee. The Trustee shall have no
liability for its or any other person's following such directions or failing to
act in the absence of any such directions. The Trustee shall have no liability
for the acts or omissions of any person directing the investment or reinvestment
of Trust Fund assets or making or failing to make any direction referred to in
Section 5.03. Neither shall the Trustee have any duty or obligation to review
any such investment or other direction, act or omission or, except upon receipt
of a proper direction, to invest or otherwise manage any asset of the Trust
which is subject to the control of any such person or to exercise any voting or
other right referred to in Section 5.03.
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5.05 COMMUNICATION OF PROXY AND OTHER MATERIALS. The Employer or Named
Administrative Fiduciary shall establish a procedure acceptable to the Trustee
for the timely dissemination to each person entitled to direct the Trustee or
its designee as to a voting or other decision called for thereby or referred to
therein of all proxy and other materials bearing on the decision. In the case of
Employer Securities, at such time as proxy or other materials bearing thereon
are disseminated generally to owners of Employer Securities in accordance with
applicable law, the Employer shall cause a copy of such proxy or other materials
to be delivered directly to the Trustee and, thereafter, shall promptly deliver
to the Trustee such number of additional copies of the proxy or other materials
as the Trustee may request.
5.06 COMMON AND COLLECTIVE TRUST FUNDS. Any person authorized to direct the
investment of Trust assets may, if the Trustee and the Named Investment
Fiduciary so permit, direct the Trustee to invest such assets in a common or
collective trust maintained by the Trustee or its affiliate for the investment
of assets of qualified trusts under section 401(a) of the Code, individual
retirement accounts under section 408(a) of the Code and plans of governmental
units described in section 818(a)(6) of the Code. The documents governing any
such common or collective trust fund maintained by the Trustee or its affiliate,
and in which Trust assets have been invested, are hereby incorporated into this
Trust Agreement by reference.
ARTICLE VI
RESPONSIBILITIES AND INDEMNITY
6.01 RELATIONSHIP OF FIDUCIARIES. Each fiduciary of the Plan and the Trust
shall be solely responsible for its own acts or omissions. The Trustee shall
have no duty to question any other Plan fiduciary's performance of fiduciary
duties allocated to such other fiduciary pursuant to the Plan. The Trustee shall
not be responsible for the breach of responsibility by any other Plan fiduciary
except as required under ERISA.
6.02 BENEFIT OF PARTICIPANTS. Each fiduciary shall, within the meaning of
the Code and ERISA, discharge its duties with respect to the Trust solely in the
interest of participants in the Plan and their beneficiaries and for the
exclusive purpose of providing benefits to such participants and beneficiaries
and defraying reasonable expenses of administering the Plan.
6.03 STATUS OF TRUSTEE. The Trustee acknowledges its status as a
"fiduciary" of the Plan within the meaning of ERISA.
6.04 LOCATION OF INDICIA OF OWNERSHIP. Except as permitted by ERISA, the
Trustee shall not maintain the indicia of ownership of any assets of the Trust
outside the jurisdiction of the district courts of the United States.
6.05 TRUSTEE'S RELIANCE. The Trustee shall have no duty to inquire whether
directions by the Employer, the Named Administrative Fiduciary, the Named
Investment Fiduciary or any other person conform to the Plan, and the Trustee
shall be fully protected in relying on any such direction communicated in
accordance with procedures acceptable to the Trustee from any person who the
Trustee reasonably believes is a proper person to give the direction. The
Trustee shall have no liability to any participant, any beneficiary or any other
person for
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payments made, any failure to make payments, or any discontinuance of payments,
on direction of the Named Administrative Fiduciary, the Named Investment
Fiduciary or any designee of either of them or for any failure to make payments
in the absence of directions from the Named Administrative Fiduciary or any
person responsible for or purporting to be responsible for directing the
investment of Trust assets. The Trustee shall have no obligation to request
proper directions from any person. The Trustee may request instructions from the
Named Administrative Fiduciary or the Named Investment Fiduciary and shall have
no duty to act or liability for failure to act if such instructions are not
forthcoming. The Trustee shall have no responsibility to determine whether the
Trust Fund is sufficient to meet the liabilities under the Plan, and shall not
be liable for payments or Plan liabilities in excess of the Trust Fund.
6.06 INDEMNIFICATION. The Employer hereby indemnifies the Trustee against,
and shall hold the Trustee harmless from, any and all loss, claims, liability,
and expense, including reasonable attorneys' fees, imposed upon the Trustee or
incurred by the Trustee as a result of any acts taken, or any failure to act, in
accordance with the directions from the Named Administrative Fiduciary, Named
Investment Fiduciary, Investment Manager or any other person specified in
Article IV or V hereof, or any designee of any such person, or by reason of the
Trustee's good faith execution of its duties with respect to the Trust,
including, but not limited to, its holding of assets of the Trust as provided
for in Section 3.02,other than any loss, claim, liability or expense arising out
of the Trustee's negligence or willful misconduct.
6.07 PROTECTION OF DESIGNEES. To the extent that any designee of the
Trustee is performing a function of the Trustee under this Trust Agreement, the
designee shall have the benefit of all of the applicable limitations on the
scope of the Trustee's duties and liabilities, all applicable rights of
indemnification granted hereunder to the Trustee and all other applicable
protections of any nature afforded to the Trustee.
ARTICLE VII
POWERS OF TRUSTEE
7.01 NONDISCRETIONARY INVESTMENT POWERS. At the direction of the person
authorized to direct such action as referred to in Article V hereof, but limited
to those assets or categories of assets acceptable to the Trustee as referred to
in Section 5.01, the Trustee, or the Trustee's designee or a broker/dealer as
referred to in Section 5.04, is authorized and empowered:
(a) To invest and reinvest the Trust Fund, together with the income
therefrom, in common stock, preferred stock, convertible preferred stock, bonds,
debentures, convertible debentures and bonds, mortgages, notes, commercial paper
and other evidences of indebtedness (including those issued by the Trustee),
shares of mutual funds (which funds may be sponsored, managed or offered by an
affiliate of the Trustee), guaranteed investment contracts, bank investment
contracts, other securities, policies of life insurance, annuity contracts,
options, options to buy or sell securities or other assets, and all other
property of any type (personal, real or mixed, and tangible or intangible);
(b) To deposit or invest all or any part of the assets of the Trust in
savings accounts or certificates of deposit or other deposits in a bank or
savings and loan association or other depository institution, including the
Trustee or any of its affiliates; provided that, with
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respect to such deposits with the Trustee or an affiliate, the deposits bear a
reasonable interest rate;
(c) To hold, manage, improve, repair and control all property, real or
personal, forming part of the Trust Fund; to sell, convey, transfer, exchange,
partition, lease for any term, even extending beyond the duration of this Trust,
and otherwise dispose of the same from time to time;
(d) To have, respecting securities, all the rights, powers and privileges
of an owner, including the power to give proxies, pay assessments and other sums
deemed by the Trustee necessary for the protection of the Trust Fund; to vote
any corporate stock either in person or by proxy, with or without power of
substitution, for any purpose; to participate in voting trusts, pooling
agreements, foreclosures, reorganizations, consolidations, mergers and
liquidations, and in connection therewith to deposit securities with or transfer
title to any protective or other committee; to exercise or sell stock
subscriptions or conversion rights; and, regardless of any limitation elsewhere
in this instrument relative to investments by the Trustee, to accept and retain
as an investment any securities or other property received through the exercise
of any of the foregoing powers;
(e) Subject to Section 5.01 hereof, to hold in cash such portion of the
Trust Fund which it is directed to so hold pending investments, or payment of
expenses, or the distribution of benefits;
(f) To take such actions as may be necessary or desirable to protect the
Trust from loss due to the default on mortgages held in the Trust including the
appointment of agents or trustees in such other jurisdictions as may seem
desirable, to transfer property to such agents or trustees, to grant to such
agents such powers as are necessary or desirable to protect the Trust Fund, to
direct such agent or trustee, or to delegate such power to direct, and to remove
such agent or trustee;
(g) To settle, compromise or abandon all claims and demands in favor of or
against the Trust Fund;
(h) To invest in any common or collective trust fund of the type referred
to in Section 5.06 hereof maintained by the Trustee or its affiliate;
(i) To exercise all of the further rights, powers, options and privileges
granted, provided for, or vested in trustees generally under the laws of the
state in which the Trustee is incorporated as set forth above, so that the
powers conferred upon the Trustee herein shall not be in limitation of any
authority conferred by law, but shall be in addition thereto;
(j) To borrow money from any source and to execute promissory notes,
mortgages or other obligations and to pledge or mortgage any trust assets as
security, subject to applicable requirements of the Code and ERISA; and
(k) To maintain accounts at, execute transactions through, and lend on an
adequately secured basis stocks, bonds or other securities to, any brokerage or
other firm, including any firm which is an affiliate of the Trustee.
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7.02 ADDITIONAL POWERS OF TRUSTEE. To the extent necessary or which it
deems appropriate to implement its powers under Section 7.01 or otherwise to
fulfill any of its duties and responsibilities as trustee of the Trust Fund, the
Trustee shall have the following additional powers and authority:
(a) to register securities, or any other property, in its name or in the
name of any nominee, including the name of any affiliate or the nominee name
designated by any affiliate, with or without indication of the capacity in which
property shall be held, or to hold securities in bearer form and to deposit any
securities or other property in a depository or clearing corporation;
(b) to designate and engage the services of, and to delegate powers and
responsibilities to, such agents, representatives, advisers, counsel and
accountants as the Trustee considers necessary or appropriate, any of whom may
be an affiliate of the Trustee or a person who renders services to such an
affiliate, and, as a part of its expenses under this Trust Agreement, to pay
their reasonable expenses and compensation;
(c) to make, execute and deliver, as Trustee, any and all deeds, leases,
mortgages, conveyances, waivers, releases or other instruments in writing
necessary or appropriate for the accomplishment of any of the powers listed in
this Trust Agreement; and
(d) generally to do all other acts which the Trustee deems necessary or
appropriate for the protection of the Trust Fund.
ARTICLE VIII
RECORDS, ACCOUNTINGS AND VALUATIONS
8.01 RECORDS. The Trustee shall maintain or cause to be maintained accurate
records and accounts of all Trust transactions and assets. The records and
accounts shall be available at reasonable times during normal business hours for
inspection or audit by the Named Administrative Fiduciary and the Named
Investment Fiduciary or any person designated for the purpose by either of them.
8.02 ACCOUNTINGS. Within 90 days following the close of each fiscal year of
the Plan or the effective date of the removal or resignation of the Trustee, the
Trustee shall file with the Named Administrative Fiduciary a written accounting
setting forth all transactions since the end of the period covered by the last
previous accounting. The accounting shall include a listing of the assets of the
Trust showing the value of such assets at the close of the period covered by the
accounting. On direction of the Named Administrative Fiduciary, and if
previously agreed to by the Trustee, the Trustee shall submit to the Named
Administrative Fiduciary interim valuations, reports or other information
pertaining to the Trust.
The Named Administrative Fiduciary may approve the accounting by written
approval delivered to the Trustee or by failure to deliver written objections to
the Trustee within 60 days after receipt of the accounting. Any such approval
shall be binding on the Employer, the Named Administrative Fiduciary, the Named
Investment Fiduciary and, to the extent permitted by ERISA, all other persons.
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8.03 VALUATION. The assets of the Trust shall be valued as of each
valuation date under the Plan at fair market value as determined by the Trustee
based upon such sources of information as it may deem reliable, including, but
not limited to, stock market quotations, statistical evaluation services,
newspapers of general circulation, financial publications, advice from
investment counselors or brokerage firms, or any combination of sources. The
reasonable costs incurred in establishing values of the Trust Fund shall be a
charge against the Trust Fund, unless paid by the Employer.
When the Trustee is unable to arrive at a value based upon information from
independent sources, it may rely upon information from the Employer, Named
Administrative Fiduciary, Named Investment Fiduciary, appraisers, or other
sources, and shall not incur any liability for inaccurate valuation based in
good faith upon such information.
8.04 LOANS. In the event that participant loans are available under the
Plan, the Trustee shall reflect one aggregate balance for participant loans
under the Plan and shall reflect changes thereto only as directed by the
Employer or Named Administrative Fiduciary. The Trustee has no responsibility
with respect to maintenance of promissory notes or monitoring of loan
amortization schedules.
ARTICLE IX
RESIGNATION AND REMOVAL OF TRUSTEE
9.01 RESIGNATION. The Trustee may resign at any time upon at least 30
days' written notice to the Employer.
9.02 REMOVAL. The Employer may remove the Trustee upon at least 30 days'
written notice to the Trustee.
9.03 APPOINTMENT OF A SUCCESSOR. Upon resignation or removal of the
Trustee, the Employer shall appoint a successor trustee. Upon failure of the
Employer to appoint, or the failure of the effectiveness of the appointment by
the Employer of, a successor trustee by the effective date of the resignation or
removal, the Trustee may apply to any court of competent jurisdiction for the
appointment of a successor.
Promptly after receipt by the Trustee of notice of the effectiveness of the
appointment of the successor trustee, the Trustee shall deliver to the successor
trustee such records as may be reasonably requested to enable the successor
trustee to properly administer the Trust Fund and all property of the Trust
after deducting therefrom such amounts as the Trustee deems necessary to provide
for expenses, taxes, compensation or other amounts due to or by the Trustee
pursuant to Sections 4.04 or 5.03 hereof not paid by the Employer prior to the
delivery.
9.04 SETTLEMENT OF ACCOUNT. Upon resignation or removal of the Trustee, the
Trustee shall have the right to a settlement of its account, which settlement
shall be made, at the Trustee's option, either by an agreement of settlement
between the Trustee and the Employer or by a judicial settlement in an action
instituted by the Trustee.
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9.05 EXPENSES AND COMPENSATION. The Trustee shall not be obligated to
transfer Trust assets until the Trustee is provided assurance by the Employer
satisfactory to the Trustee that all fees and expenses reasonably anticipated
will be paid.
9.06 TERMINATION OF RESPONSIBILITY AND LIABILITY. Upon settlement of the
account and transfer of the Trust Fund to the successor trustee, all rights and
privileges under this Trust Agreement shall vest in the successor trustee and
all responsibility and liability of the Trustee with respect to the Trust and
assets thereof shall, except as otherwise required by ERISA, terminate subject
only to the requirement that the Trustee execute all necessary documents to
transfer the Trust assets to the successor trustee.
ARTICLE X
AMENDMENT AND TERMINATION
10.01 AMENDMENT. The Employer reserves the right to amend this Trust
Agreement, provided that no amendment of this Trust Agreement or the Plan shall
be effective which would (a) cause any assets of the Trust Fund to be used for,
or diverted to, purposes other than the exclusive benefit of Plan participants
or their beneficiaries other than an amendment permissible under the Code and
ERISA, or (b) affect the rights, duties, responsibilities, obligations or
liabilities of the Trustee without the Trustee's written consent. The Employer
shall amend this Trust Agreement as requested by the Trustee to reflect changes
in law which counsel for the Trustee advises the Trustee require such changes.
Amendments to the Trust Agreement or a certified copy of the amendments shall be
delivered to the Trustee promptly after adoption, and if practicable under the
circumstances, any proposed amendment under consideration by the Employer shall
be communicated to the Trustee to permit the Trustee to review and comment
thereon in due course before the Employer acts on the proposed amendment.
10.02 TERMINATION. The Trust may be terminated by the Employer upon at
least 60 days' written notice to the Trustee. Upon such termination, and subject
to Section 11.01 hereof, the Trust Fund shall be distributed as directed by the
Named Administrative Fiduciary.
ARTICLE XI
MISCELLANEOUS
11.01 EXCLUSIVE BENEFIT RULE. Except as provided in Section 11.02, or as
otherwise permitted or required by ERISA or the Code, no asset of the Trust
shall be used for, or diverted to, purposes other than the exclusive benefit of
Plan participants or their beneficiaries or for the reasonable expenses of
administering the Plan and Trust until all liabilities for benefits due Plan
participants or their beneficiaries have been satisfied.
11.02 REFUNDS TO EMPLOYER. The Trustee shall, upon the written direction of
the Named Administrative Fiduciary which shall include a certification that such
action is proper under the Plan, ERISA and the Code specifying any relevant
sections thereof, return to the Employer any amount referred to in section
403(c)(2) of ERISA.
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11.03 AUTHORIZED ACTION. Any action to be taken under this Trust Agreement
by an Employer or other person which is: (a) a corporation shall be taken by the
board of directors of the corporation or any person or persons duly empowered by
the board of directors to take the action involved, (b) a partnership shall be
taken by an authorized general partner of the partnership, and (c) a sole
proprietorship by the sole proprietor.
11.04 TEXT OF PLAN. The Employer represents that, prior to the execution of
this Trust Agreement by both parties, it delivered to the Trustee the text of
the Plan as in effect as of the date of this Trust Agreement. The Employer shall
deliver to the Trustee promptly after adoption thereof a certified copy of any
amendment of the Plan.
11.05 CONFLICT WITH PLAN. The rights, duties, responsibilities, obligations
and liabilities of the Trustee are as set forth in this Trust Agreement, and no
provision of the Plan or any other document shall be deemed to affect such
rights, duties, responsibilities, obligations and liabilities. If there is a
conflict between provisions of the Plan and this Trust Agreement with respect to
any subject involving the Trustee, including but not limited to the
responsibility, authority or powers of the Trustee, the provisions of this Trust
Agreement shall be controlling.
11.06 FAILURE TO MAINTAIN QUALIFICATION. If the Trust fails to qualify as a
qualified trust under section 401(a) of the Code, or loses its status as such a
qualified trust, the Employer shall immediately so notify the Trustee, and the
Trustee shall, without further notice or direction, remove the Trust assets from
any common or collective trust fund maintained by the Trustee or its affiliate
for investments by qualified trusts.
11.07 GOVERNING LAW AND CONSTRUCTION. This Trust Agreement and the Trust
shall be construed, administered and governed under ERISA and other pertinent
federal law, and to the extent that federal law is inapplicable, under the laws
of the state of Texas. If any provision of this Trust Agreement is susceptible
to more than one interpretation, the interpretation to be given is that which is
consistent with the Trust being a qualified trust under section 401(a) of the
Code. If any provision of this Trust Agreement is held by a court of competent
jurisdiction to be invalid or unenforceable, the remaining provisions shall
continue to be fully effective to the extent possible under the circumstances.
11.08 SUCCESSORS AND ASSIGNS. This Trust Agreement shall inure to the
benefit of and be binding upon the parties hereto and their respective
successors and assigns.
11.09 GENDER. As used in this Trust Agreement, the masculine gender shall
include the feminine and the neuter genders and the singular shall include the
plural and the plural the singular, as the context requires.
11.10 HEADINGS. Headings and subheadings in this Trust Agreement are for
convenience of reference only and are not to be considered in the construction
of the provisions of the Trust Agreement.
11.11 COUNTERPARTS. This Trust Agreement may be executed in several
counterparts, each of which shall be deemed an original, and these counterparts
shall constitute one and the same instrument which may be sufficiently evidenced
by any one counterpart.
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IN WITNESS WHEREOF, the Employer and the Trustee have executed this Trust
Agreement each by action of a duly authorized person.
XXXXXXX XXXXX TRUST
COMPANY OF TEXAS PENNZOIL-QUAKER STATE COMPANY
By: ____________________________ By: _____________________________
Name: __________________________ Name: ___________________________
Title: _________________________ Title: __________________________
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