CONNECTICUT NATURAL GAS CORPORATION
DEFERRED COMPENSATION PLAN
TRUST AGREEMENT
This Agreement made this 1st day of March, 1999, by and between
Connecticut Natural Gas Corporation (the "Employer") and ▇▇▇▇▇▇ Fiduciary
Trust Company (the "Trustee");
W I T N E S S E T H :
WHEREAS, the Employer has adopted the Connecticut Natural Gas
Corporation Deferred Compensation Plan (the "Plan");
WHEREAS, the Employer has incurred or expects to incur liability under
the terms of such Plan with respect to the individuals participating in such
Plan;
WHEREAS, the Employer wishes to establish a trust (the "Trust") and to
contribute to the Trust assets that shall be held therein, subject to the
claims of the Employer's creditors in the event of the Employer's
Insolvency, as herein defined, until paid to Plan participants and their
beneficiaries in such manner and at such times as specified in the Plan;
WHEREAS, it is the intention of the parties that this Trust shall
constitute an unfunded arrangement and shall not affect the status of the
Plan as an unfunded plan maintained for the purpose of providing deferred
compensation for a select group of management or highly compensated
employees for purposes of Title I of the Employee Retirement Income Security
Act of 1974 ("ERISA");
WHEREAS, it is the intention of the Employer to make contributions to
the Trust to provide itself with a source of funds to assist it in the
meeting of its liabilities under the Plan;
NOW, THEREFORE, the parties do hereby establish the Trust and agree
that the Trust shall be comprised, held and disposed of as follows:
SECTION 1. ESTABLISHMENT OF TRUST
(a) The Employer hereby establishes with the Trustee a Trust
consisting of such sums of money and other property as shall from time to
time be paid or delivered to the Trustee and the earnings and profits
thereon. All such assets, all such investments made therewith and proceeds
thereof, less the payments or other distributions which at the time of
reference shall have been made by the Trustee as authorized herein, shall be
held, administered and disposed of by the Trustee as provided in this Trust
Agreement.
(b) The Trust hereby established shall be irrevocable. The Employer
shall have no right or power to direct the Trustee to return to the Employer
or to divert to others any of the assets of the Trust before all payment of
benefits have been made to Plan participants and their beneficiaries
pursuant to the terms of the Plan.
(c) The Trust is intended to be a grantor trust, of which the Employer
is the grantor, within the meaning of subpart E, part 1, subchapter J,
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Chapter 1, subtitle A of the Internal Revenue Code of 1986, as amended, and
shall be construed accordingly.
(d) The principal of the Trust, and any earnings thereon shall be held
separate and apart from other funds of the Employer and shall be used
exclusively for the uses and purposes of Plan participants and general
creditors as herein set forth. Plan participants and their beneficiaries
shall have no preferred claim on, or any beneficial ownership interest in,
any assets of the Trust. Any rights created under the Plan and this Trust
Agreement shall be mere unsecured contractual rights of Plan participants
and their beneficiaries against the Employer. Any assets held by the Trust
will be subject to the claims of the Employer's general creditors under
federal and state law in the event of Insolvency, as defined in Section 3(a)
herein.
(e) The Employer, in its sole discretion, may at any time, or from
time to time, make additional deposits of cash or other property in trust
with the Trustee to augment the principal to be held, administered and
disposed of by the Trustee as provided in this Trust Agreement. Neither
the Trustee nor any Plan participant or beneficiary shall have any right to
compel such additional deposits.
(f) If a plan administrator other than the Employer has been appointed
pursuant to the Plan, such administrator may act on behalf of the Employer
named above for all purposes of this Agreement.
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(g) This trust may be adopted by affiliates of the Employer named
above, in order to satisfy their obligations under the Plan, with the
knowledge and consent of such Employer. Such adoption shall be
accomplished by signing the Agreement as provided below. In the event that
one or more affiliated employers adopts the Trust, the following rules
shall apply notwithstanding anything to the contrary:
(i) The powers and obligations reserved for the "Employer" under
Sections 5, 7, 8, 9, 10, 11 and 12 shall remain exclusively vested in the
entity first named above, i.e. Connecticut Natural Gas Corporation.
(ii) For purposes of Sections 2, 3, 4, 6 and 13, "Employer" shall
mean, with respect to each separate adopting entity, only that entity.
Without limiting the foregoing, the provisions of Section 3 shall apply
separately to each such entity, and the assets attributable to an adopting
entity's contributions shall be subject to the claims of only that entity's
general creditors, regardless of the solvency or obligations of any other
adopting entity.
(iii) A separate adopting entity other than Connecticut Natural
Gas Corporation may terminate its participation in the Trust, subject to
Section 12(b), by written notice to the Trustee and to Connecticut Natural
Gas Corporation.
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SECTION 2. PAYMENTS TO PLAN PARTICIPANTS AND THEIR
BENEFICIARIES
(a) The Employer shall deliver to the Trustee a schedule (the "Payment
Schedule") that indicates the amounts payable in respect of each Plan
participant (and his or her beneficiary), that provides a formula or other
instructions acceptable to the Trustee for determining the amounts so
payable, the form in which such amount is to be paid (as provided for or
available under the Plan), and the time of commencement for payment of such
amounts. Except as otherwise provided herein, the Trustee shall make
payments to the Employer on behalf of Plan participants and their
beneficiaries in accordance with such Payment Schedule, in which case the
Employer shall pay to the Participant or beneficiary directly the required
amount. The Employer shall make provision for the reporting and withholding
of any federal, state or local taxes that may be required to be withheld
with respect to the payment of benefits pursuant to the terms of the Plan
and shall pay amounts withheld to the appropriate taxing authorities.
(b) The entitlement of a Plan participant or beneficiary to benefits
under the Plan shall be determined by the Employer or such party as it shall
designate under the Plan, and any claim for such benefits shall be
considered and reviewed under the procedures set out in the Plan.
(c) The Employer may make payment of benefits, less income taxes, and
FICA taxes to the extent applicable, directly to Plan participants or their
beneficiaries as they become due under the terms of the Plan. The Employer
shall notify the Trustee of its decision to make payment of benefits
directly prior to the time amounts are payable to participants or their
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beneficiaries, and if such payments are made, may be reimbursed from Trust
to the extent of such benefits. In addition, if the principal of the Trust,
and any earnings thereon, are not sufficient to make payments of Plan
benefits directly from the Trust, the Employer shall make the balance of
each such payment as it falls due. The Trustee shall notify the Employer
when principal and earnings are not sufficient.
SECTION 3. TRUSTEE RESPONSIBILITY REGARDING PAYMENTS TO TRUST
BENEFICIARY WHEN THE EMPLOYER IS INSOLVENT
(a) The Trustee shall cease payment of benefits to Plan participants
and their beneficiaries if the Employer is Insolvent. The Employer shall be
considered "Insolvent" for purposes of this Trust Agreement if (i) the
Employer is unable to pay its debts as they become due, or (ii) the Employer
is subject to a pending proceeding as a debtor under the United States
Bankruptcy Code.
(b) At all times during the continuance of this Trust, as provided in
Section I (d) hereof, the principal and income of the Trust shall be subject
to claims of general creditors of the Employer under federal and state law
as set forth below.
(1) The Board of Directors and the Chief Executive Officer of the
Employer shall have the duty to inform the Trustee in writing of the
Employer's Insolvency. If a person claiming to be a creditor of the
Employer alleges in writing to the Trustee that the Employer has become
Insolvent, the Trustee shall determine whether the Employer is Insolvent
and, pending such determination, the Trustee shall discontinue payment of
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benefits to Plan participants or their beneficiaries.
(2) Unless the Trustee has actual knowledge of the Employer's
Insolvency, or has received notice from the Employer or a person claiming to
be a creditor alleging that the Employer is Insolvent, the Trustee shall
have no duty to inquire whether the Employer is Insolvent. The Trustee may
in all events rely on such evidence concerning the Employer's solvency as
may be furnished to the Trustee and that provides the Trustee with a
reasonable basis for making a determination concerning the Employer's
solvency. The Trustee may, however, at any time inquire in writing of the
Chief Executive Officer of the Employer as to whether the Employer is
Insolvent, and unless the Trustee receives written confirmation from such
Chief Executive Officer within ten (1O) days, that the Employer is not
Insolvent, the Trustee shall be deemed to have actual notice that the
Employer is Insolvent and shall act accordingly.
(3) If at any time the Trustee has determined that the Employer is
Insolvent or under paragraph (2), the Trustee is deemed to have actual
notice that the Employer is Insolvent, the Trustee shall discontinue
payments to Plan participants or their beneficiaries and shall hold the
assets of the Trust for the benefit of the Employer's general creditors.
Nothing in this Trust Agreement shall in any way diminish any rights of Plan
participants or their beneficiaries to pursue their rights as general
creditors of the Employer with respect to benefits due under the Plan or
otherwise.
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(4) The Trustee shall resume the payment of benefits to Plan
participants or their beneficiaries in accordance with Section 2 of this
Trust Agreement only after the Trustee has determined that the Employer is
not Insolvent (or is no longer Insolvent).
(c) Provided that there are sufficient assets, if the Trustee
discontinues the payment of benefits from the Trust pursuant to Section 3(b)
hereof and subsequently resumes such payments, the first payment following
such discontinuance shall include the aggregate amount of all payments due
to Plan participants or their beneficiaries under the terms of the Plan for
the period of such discontinuance, less the aggregate amount of any payments
made to Plan participants or their beneficiaries by the Employer in lieu of
the payments provided for hereunder during any such period of
discontinuance.
SECTION 4. PAYMENTS TO THE EMPLOYER
Except as provided in Section 2(c) and 3 hereof, the Employer shall
have no right or power to direct the Trustee to return to the Employer or to
divert to others any of the Trust assets before all benefit payments have
been made to Plan participants and their beneficiaries pursuant to the terms
of the Plan.
SECTION 5. INVESTMENT AUTHORITY
(a) The Trustee shall invest and reinvest the assets of the Trust in
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shares of any open-end registered investment company for which ▇▇▇▇▇▇
Investment Management, Inc. serves as investment advisor or for which ▇▇▇▇▇▇
Mutual Funds Corp. is the principal underwriter, as directed by the
Employer. Except as provided in (b) below, all rights associated with
assets of the Trust shall be exercised by the Trustee or the person
designated by the Trustee, and shall in no event be exercisable by or rest
with Plan participants.
(b) Any voting rights with respect to Trust assets will be exercised
by the Employer.
(c) The Trustee may invest in securities (including stock or rights to
acquire stock) or obligations issued by CTG Resources, Inc., as directed by
the Employer.
(d) The Employer shall have the right at any time, and from time to
time in its sole discretion, to substitute assets of equal fair market value
for any asset held by the Trust. This right is exercisable by the Employer
in a nonfiduciary capacity without the approval or consent of any person in
a fiduciary capacity.
(e) Except to the extent that such powers may be limited by applicable
regulatory authority, or as otherwise directed by the Employer in writing,
the Trustee shall have the following powers and rights, and be subject to
the following duties with respect to the Trust, in addition to those
provided elsewhere in the Trust or by law:
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(1) To receive and hold all contributions paid to it under the Plan;
provided, however, that it shall have no duty to require any contributions
to be made to it.
(2) To retain in cash or cash equivalents either all or a portion of
the Trust, either to await investment or to meet contemplated payments of
Plan benefits, and to deposit funds (in savings accounts, certificates of
deposit or checking accounts) in any financial institution supervised by the
United States or a State, including, if the Trustee is a bank, its own
banking department or the banking department of an affiliate, if such
deposits bear a reasonable rate of interest.
(3) To invest in units of any common trust fund or money market or
daily interest fund operated or approved by the Trustee.
(4) To make payments from the Trust to such persons, in such manner,
at such times and in such amounts as the Employer shall direct, without
inquiring as to whether a payee is entitled to the payment or as to whether
the payment is proper, to the extent such payment is made in good faith
without actual notice or knowledge of the impropriety of such payment.
(5) As directed by the Employer, to compromise, contest, arbitrate,
settle or abandon claims and demands.
(6) As directed by the Employer, to begin, maintain or defend any
litigation necessary or appropriate in connection with the investment,
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reinvestment and administration of the Trust.
(7) To hold securities in its name as Trustee or in the name of its
nominee or nominees, or in such other form as it determines best, with or
without disclosing the trust relationship, and to execute such documents as
are necessary to accomplish the foregoing; provided, however, that the
records of the Trustee shall indicate the actual ownership of such
securities or other property.
(8) To make, execute, acknowledge and deliver any and all instruments
that may be necessary or appropriate to carry out the powers herein granted.
(9) To require, before making any payment, such release or other
document from any taxing authority or such indemnity from the intended payee
as the Trustee deems necessary.
SECTION 6. DISPOSITION OF INCOME
During the term of the Trust, all income received by the Trust shall be
accumulated and reinvested.
SECTION 7. ACCOUNTING BY THE TRUSTEE
The Trustee shall keep accurate and detailed records of all
investments, receipts, disbursements, and all other transactions required to
be made, including such specific records as shall be agreed upon in writing
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between the Employer and the Trustee. Within 90 days following the close of
each calendar year and within 90 days after the removal or resignation of
the Trustee, the Trustee shall deliver to the Employer a written account of
its administration of the Trust during such year or during the period from
the close of the last preceding year to the date of such removal or
resignation, setting forth all investments, receipts, disbursements and
other transactions effected by it, including a description of all securities
and investments purchased and sold with the cost or net proceeds of such
purchases or sales (accrued interest paid or receivable being shown
separately), and showing all cash, securities and other property held in the
Trust at the end of such year or as of the date of such removal or
resignation, as the case may be.
SECTION 8. RESPONSIBILITY OF THE TRUSTEE
(a) The Trustee shall act with the care, skill, prudence and diligence
under the circumstances then prevailing that a prudent person acting in like
capacity and familiar with such matters would use in the conduct of an
enterprise of a like character and with like aims; provided, however, that
the Trustee shall incur no liability to any person for any action taken
pursuant to a direction, request or approval given by the Employer which is
contemplated by, and in conformity with, the terms of the Plan or the Trust
and is given in writing by the Employer. In the event of a dispute between
the Employer and a party, the Trustee may apply to a court of competent
jurisdiction to resolve the dispute.
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(b) If the Trustee undertakes or defends any litigation arising in
connection with this Trust, the Employer agrees to indemnify the Trustee
against the Trustee's costs, expenses and liabilities (including, without
limitation, attorneys' fees and expenses) relating thereto and to be
primarily liable for such payments. If the Employer does not pay such
costs, expenses and liabilities within 30 days of being billed for such
amounts, the Trustee may obtain payment from the Trust.
(c) The Trustee may consult with legal counsel (who may also be
counsel for the Employer) with respect to any of its duties or obligations
hereunder.
(d) The Trustee may hire agents, accountants, actuaries, investment
advisors, financial consultants or other professionals to assist it in
performing any of its duties or obligations hereunder.
(e) The Trustee shall have, without exclusion, all powers conferred on
trustees by applicable law, unless expressly provided otherwise herein.
(f) Notwithstanding any powers granted to the Trustee pursuant to this
Trust Agreement or to applicable law, the Trustee shall not have any power
that could give the Trust the objective of carrying on a business and
dividing the gains therefrom, within the meaning of Section 301.7701-2 of
the Procedure and Administrative Regulations promulgated pursuant to the
Internal Revenue Code.
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SECTION 9. COMPENSATION AND EXPENSES OF THE TRUSTEE; PAYMENT OF
ADMINISTRATION EXPENSES
The Employer shall pay all administrative expenses of the Plan and
Trust and the Trustee's fees and expenses. However, if not so paid within
30 days of the billing of such amounts, the fees and expenses of the Trustee
shall be paid from the Trust.
SECTION 10. RESIGNATION AND REMOVAL OF THE TRUSTEE
(a) The Trustee may resign at any time by written notice to the
Employer, which shall be effective 60 days after receipt of such notice
unless the Employer and the Trustee agree otherwise.
(b) The Trustee may be removed by the Employer on 60 days' notice or
upon shorter notice accepted by the Trustee.
(c) Upon resignation or removal of the Trustee and appointment of a
successor Trustee, all assets shall subsequently be transferred to the
successor Trustee. The transfer shall be completed within 60 days after
receipt of notice of resignation, removal or transfer, unless the Employer
extends the time limit.
(d) If the Trustee resigns or is removed, a successor shall be
appointed, in accordance with Section 11 hereof, by the effective date of
resignation or removal under paragraph (a) or (b) of this section. If no
such appointment has been made, the Trustee may apply to a court of
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competent jurisdiction for appointment of a successor or for instructions.
All expenses of the Trustee in connection with the proceeding shall be
allowed as administrative expenses of the Trust.
SECTION 11. APPOINTMENT OF SUCCESSOR
(a) If the Trustee resigns or is removed in accordance with Section
10(a) or (b) hereof, the Employer may appoint any third party, such as a
bank trust department or other party that may be granted corporate trustee
powers under state law, as a successor to replace the Trustee upon
resignation or removal. The appointment shall be effective when accepted in
writing by the new Trustee, who shall have all of the rights and powers of
the former Trustee, including ownership rights in the Trust assets. The
former Trustee shall execute any instrument necessary or reasonably
requested by the Employer or the successor Trustee to evidence the transfer.
(b) The successor Trustee need not examine the records and acts of any
prior Trustee and may retain or dispose of existing Trust assets, subject to
Section 7 and 8 hereof The successor Trustee shall not be responsible for,
and the Employer shall indemnify and defend the successor Trustee from, any
claim or liability resulting from any action or inaction of any prior
Trustee or from any other past event, or any condition existing at the time
it becomes successor Trustee.
SECTION 12. AMENDMENT OR TERMINATION
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(a) This Trust Agreement may be amended by a written instrument
executed by the Trustee and the Employer. Notwithstanding the foregoing, no
such amendment shall conflict with the terms of the Plan nor shall make the
Trust revocable.
(b) The Trust shall not terminate until the date on which Plan
participants and their beneficiaries are no longer entitled to benefits
pursuant to the terms of the Plan. Upon written approval of all
participants and beneficiaries entitled to payment of benefits pursuant to
the terms of the Plan, the Employer may terminate the Trust prior to the
time all benefit payments have been made. Upon termination of the Trust,
any assets remaining in the Trust shall be returned to the Employer.
SECTION 13. MISCELLANEOUS
(a) Any provision of this Trust Agreement prohibited by law shall be
ineffective to the extent of any such prohibition, without invalidating the
remaining provisions hereof.
(b) Benefits payable to Plan participants and their beneficiaries
under this Trust Agreement may not be anticipated, assigned (either at law
or in equity), alienated, pledged, encumbered or subjected to attachment,
garnishment, levy, execution or other legal or equitable process.
(c) This Trust Agreement shall be governed by and construed in
accordance with the laws of the Commonwealth of Massachusetts.
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(d) This Agreement shall be binding upon and inure to the benefit of
any successor to the Employer or any affiliate thereof that has adopted this
Trust as the result of merger, consolidation, reorganization, transfer of
assets or otherwise and any subsequent successor thereto.
(e) This Agreement may be executed in any number of counterparts, each
of which shall be deemed to be an original but all of which together
constitute only one agreement.
SECTION 14. EFFECTIVE DATE
This Trust Agreement shall be effective as of March 1, 1999.
IN WITNESS WHEREOF, the parties have caused this agreement to be signed
on their behalves by their duly authorized officers this 26th day of
February, 1999.
CONNECTICUT NATURAL GAS CORPORATION
S/ ▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
By:
Title V P Human Resources
▇▇▇▇▇▇ FIDUCIARY TRUST COMPANY
S/ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇
By:
Title Managing Director
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The following affiliate of the Employer named above hereby adopts the Trust
as of the dates set forth below:
THE ENERGY NETWORK, INC.
S/ ▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
By:
Title V P Human Resources
Effective: March 1, 1999
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