EXHIBIT 10.8
LYONDELL CHEMICAL COMPANY
SUPPLEMENTAL EXECUTIVE BENEFIT PLANS
TRUST AGREEMENT
(As Amended and Restated
Effective as of January 1, 2002)
TABLE OF CONTENTS
PAGE
RECITALS......................................................................................................... 1
SECTION 1 Creation of the Trust.......................................................................... 2
SECTION 2 Limitation on Use of Funds..................................................................... 3
SECTION 3 Change in Control.............................................................................. 4
SECTION 4 Independent Plan Administrator................................................................. 8
SECTION 5 Excess Reversion............................................................................... 9
SECTION 6 Authority of Investment Officers............................................................... 9
SECTION 7 Duties and Powers of Trustee with Respect to Investments....................................... 10
SECTION 8 Additional Powers and Duties of the Trustees................................................... 13
SECTION 9 Insurance Policies and Contracts............................................................... 14
SECTION 10 Participating Plan Records..................................................................... 15
SECTION 11 Valuation...................................................................................... 15
SECTION 12 Participant Records Prior to and Following a Change in Control................................. 16
SECTION 13 Trustee Accounts............................................................................... 16
SECTION 14 Investment of Cash............................................................................. 17
SECTION 15 Payments by the Trustee........................................................................ 18
SECTION 16 Determination of Change in Control............................................................. 19
SECTION 17 Trustee Compensation and Trust Expenses........................................................ 19
SECTION 18 Payment of Taxes by Trustees................................................................... 20
SECTION 19 Custodians and Agents.......................................................................... 20
SECTION 20 Liability for Benefit Payments................................................................. 20
SECTION 21 Company Insolvency............................................................................. 21
SECTION 22 Trustee Responsibility for Plan Administration and Trust Record Keeping After Change in
Control........................................................................................ 23
SECTION 23 Trustee Standards of Performance and Indemnifications.......................................... 23
SECTION 24 Removal and Resignation of Trustee............................................................. 24
SECTION 25 Termination of Participating Plan or Plans..................................................... 25
SECTION 26 Rights of Company to Trust Assets.............................................................. 25
SECTION 27 Amendments of Trust............................................................................ 26
SECTION 28 Termination of Trust........................................................................... 26
SECTION 29 Successors..................................................................................... 27
SECTION 30 Communications................................................................................. 28
SECTION 31 Unclaimed Distributions........................................................................ 28
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SECTION 32 Prohibition of Assignments..................................................................... 28
SECTION 33 Governing Law.................................................................................. 29
SECTION 34 Execution...................................................................................... 29
APPENDIX A .................................................................................................... 30
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LYONDELL CHEMICAL COMPANY
SUPPLEMENTAL EXECUTIVE BENEFIT PLANS
TRUST AGREEMENT
THIS AGREEMENT, as amended and restated as of January 1, 2002, between
LYONDELL CHEMICAL COMPANY (the "Company"), and WILMINGTON TRUST COMPANY (the
"Trustee");
R E C I T A L S
A. Effective August 1, 2001, the Company and the Trustee entered into this
Agreement to create a Trust (defined under Section 1 of this Trust Agreement)
for purposes of the Lyondell Chemical Company Supplementary Executive Retirement
Plan and the Lyondell Chemical Company Executive Deferral Plan and any benefit
plans that may be established and maintained by the Company for executive
employees of the Company after the effective date of this Trust, that permit
funding by this Trust, and that are established and maintained to provide
deferred compensation for a select group of management or highly compensated
employees. The benefit plans that may be funded by this Trust are listed in
Appendix A attached hereto and shall hereinafter be referred to as the
"Participating Plans".
B. The amount and timing of benefit payments (the "Supplemental Benefits")
to which the participants of the Participating Plans (the "Trust Beneficiaries")
are or may become entitled under each of the Participating Plans are set forth
in the Participating Plans.
C. The Company established this trust fund to assist it in accumulating the
amounts necessary to satisfy its contractual liability to pay Supplemental
Benefits under the Participating Plans.
D. The Company is obligated to pay all Supplemental Benefits from its
general assets to the extent not paid by this Trust and the amendment and
restatement of this Trust Agreement shall not reduce or otherwise affect the
Company's continuing liability to pay Supplemental Benefits from such assets,
except that the Company's liability shall be offset by actual benefit payments
made from this Trust.
E. The trust continued by this amended and restated Trust Agreement is
intended to be a "grantor trust" with the result that the corpus and income of
the Trust shall be treated as assets and income of the Company pursuant to
Sections 671 through 679 of the Internal Revenue Code of 1986, as amended (the
"Code").
F. The Company intends that the Trust shall at all times be subject to the
claims of the Company's creditors as herein provided and that the Participating
Plans shall not be deemed funded within the meaning of the Employee Retirement
Income Security Act of 1974, as amended, ("ERISA") solely by virtue of the
existence of this Trust Agreement.
NOW, THEREFORE, in consideration of the mutual covenants herein contained,
the parties hereto agree as follows:
SECTION 1
CREATION OF THE TRUST
There is hereby established and continued with the Trustee a trust
consisting of all sums paid to it for purposes of the Participating Plans,
investments thereof and any earnings, appreciations or losses thereon, which,
less disbursements made by Trustee, and amounts paid to the Company as provided
in Section 2 of this Trust Agreement, are referred to herein as the "Trust" and
shall be dealt with as provided in this Trust Agreement. The Trust shall be held
for the exclusive purpose of providing payments to Trust Beneficiaries in
accordance with the provisions of the Participating Plans, and defraying
reasonable expenses of administration in accordance with the provisions of this
Trust Agreement until all such payments required by this Trust Agreement have
been made, subject to the provisions on the use of Funds under Section 2 of this
Trust Agreement, and to the requirement that the Trust shall at all times be
subject to the claims of the general creditors of the Company as set forth in
Sections 21.1 and 21.2 of this Trust Agreement. The Trustee shall have no duty
or authority to inquire into the correctness of amounts tendered to it or to
enforce the collection of any contribution by the Company.
The Company shall direct the Trustee to establish a separate subtrust
("Subtrust") for each Plan to which the Trustee shall credit contributions it
receives which are earmarked for that Plan and Subtrust. Each Subtrust shall
reflect an undivided interest in assets of the trust fund and shall not require
any segregation of particular assets. When Subtrusts are established, all
contributions shall be designated by the Company for a particular
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Subtrust. However, any contribution received by the Trustee which is not
designated by the Company for a particular Subtrust before a Change in Control
shall be allocated among the Subtrusts in proportion to each Participating
Plan's pro rata interest in the Trust, as calculated during the last Valuation.
When a Subtrust is established at a date subsequent to execution of this
Agreement, the Trustee shall allocate the Trust assets among the separate
Subtrusts as directed by the Company prior to a Change in Control.
The Company may direct the Trustee, or the Independent Plan Administrator
may determine on its own initiative after a Change in Control, to maintain a
separate sub-account within each Subtrust for a Plan for each Participant who is
covered by the Subtrust. If so directed, each sub-account in a Subtrust shall
reflect an individual interest in assets of the Subtrust and, as much as
possible, shall operate in the same manner as if it were a separate Subtrust.
The Trustee shall allocate investment earnings and losses and expenses of
the trust fund as of a valuation date among the Subtrusts in proportion to their
balances. Payments to creditors as directed by a court of competent jurisdiction
in the event of the Company's insolvency shall be charged against the Subtrusts
in proportion to their balances, except that payment of Plan benefits to a
Participant as a general creditor shall be charged against the Subtrust for that
Plan.
Assets allocated to a Subtrust for one Plan may not be used to provide
benefits under any other Plans until all benefits under such Plan have been paid
in full, except that excess assets of a Subtrust may be transferred to other
Subtrusts.
SECTION 2
LIMITATION ON USE OF FUNDS
No part of the corpus of the Trust shall be recoverable by the Company,
borrowed by or against for the benefit of the Company or used for any purpose
other than for the exclusive purpose of providing payments to Trust
Beneficiaries in accordance with the provisions of the Participating Plans and
defraying reasonable expenses of administration in accordance with the
provisions of this Trust Agreement until all such payments required by this
Trust Agreement have been made; provided, however, that (i) nothing in this
Section 2 shall be deemed to limit or otherwise prevent the payment from the
Trust of (a) amounts described in Section 5 of this Trust Agreement, (b)
expenses and other charges
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as provided in Section 17 and 18 of this Trust Agreement, or (c) the application
of the Trust as provided in Sections 15.5 or 28 of this Trust Agreement, and
(ii) the Trust shall at all times be subject to the claims of the general
creditors of the Company as set forth in Section 21.1 and 21.2 of this Trust
Agreement.
SECTION 3
CHANGE IN CONTROL
Section 3.1. General. Various provisions of this Trust Agreement provide
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for certain rights and obligations upon and following a Change in Control of the
Company.
Section 3.2. Definition of "Change in Control". For purposes of this Trust
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Agreement, a "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 February 1, 1999, constitute the entire Board
("Incumbent Directors") cease for any reason to constitute at least a
majority of the Board; provided, however, that any individual becoming a
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director subsequent to the date hereof whose election, or nomination for
election by the Company's shareholders, was approved by a vote of at least
a majority of the then Incumbent Directors shall be considered as though
such individual was an Incumbent Director, but excluding, for this purpose
any such individual whose initial assumption of office occurs as a result
of either an actual or threatened election contest, as such terms are used
in Rule 14a-11 under the Securities Exchange Act of 1934, as amended or
other actual or threatened solicitation of proxies or consents by or on
behalf of any Person (as defined below) other than the Board;
(ii) The stockholders of the Company shall approve any merger,
consolidation or recapitalization of the Company (or, if the capital stock
of the Company is affected, any subsidiary of the Company), or any sale,
lease, or other transfer (in one transaction or a series of transactions
contemplated or arranged by any party as a single plan) of all or
substantially all of the assets of the Company (each of the foregoing being
an "Acquisition Transaction") where (1) the shareholders of the Company
immediately prior to such Acquisition Transaction would not immediately
after such Acquisition Transaction beneficially own, directly or
indirectly, shares or other ownership interests representing in the
aggregate eighty percent (80%) or more of (a) the
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then outstanding common stock or other equity interests of the corporation
or other entity surviving or resulting from such merger, consolidation or
recapitalization or acquiring such assets of the Company, as the case may
be, or of its ultimate parent corporation or other entity, if any (in
either case, the "Surviving Entity"), and (b) the Combined Voting Power of
the then outstanding Voting Securities of the Surviving Entity or (2) the
Incumbent Directors at the time of the initial approval of such Acquisition
Transaction would not immediately after such Acquisition Transaction
constitute a majority of the Board of Directors, or similar managing group,
of the Surviving Entity; provided, however, that, notwithstanding the
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foregoing, a Change of Control shall not be deemed to have occurred for
purposes of this Subsection (ii) if each of the following conditions are
met: (a) the Acquisition Transaction is between the Company and/or its
Affiliates, on the one hand, and Millennium Chemicals Inc. ("Millennium")
and/or its Affiliates, on the other hand, (b) the Company or an entity that
was a wholly owned subsidiary of the Company prior to the Acquisition
Transaction has a class of equity securities registered under Section 12 of
the Securities Exchange Act of 1934, as amended, immediately after
completion of the Acquisition Transaction, (c) Millennium or an entity that
was a wholly owned subsidiary of Millennium prior to the Acquisition
Transaction has a class of equity securities registered under Section 12 of
the Securities Exchange Act of 1934, as amended, immediately after
completion of the Acquisition Transaction, and (d) as a result of the
Acquisition Transaction, the Company or its Affiliates own a greater
percentage equity interest in Equistar Chemicals, LP ("Equistar") than was
owned, directly or indirectly, by the Company immediately prior to such
Acquisition Transaction;
(iii) The stockholders of the Company shall approve any plan or proposal
for the liquidation or dissolution of the Company; or
(iv) Any Person shall be or become the beneficial owner (as defined in
Rules 13d-3 and 13d-5 under the Securities Exchange Act of 1934, as
amended), directly or indirectly, of securities of the Company representing
in the aggregate more than twenty percent (20%) of either (A) the then
outstanding shares of common stock of the Company ("Common Shares") or (B)
the Combined Voting Power of all then outstanding Voting Securities of the
Company; provided, however, that notwithstanding the foregoing, a Change in
Control shall not be deemed to have occurred for purposes of this
Subsection (iv):
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(1) Solely as a result of an acquisition of securities by the Company
which, by reducing the number of Common Shares or other Voting Securities
outstanding, increases (a) the proportionate number of Common Shares
beneficially owned by any Person to more than twenty percent (20%) of the
Common Shares then outstanding, or (b) the proportionate voting power
represented by the Voting Securities beneficially owned by any Person to
more than twenty percent (20%) of the Combined Voting Power of all then
outstanding Voting Securities;
(2) Solely as a result of an acquisition of securities directly from the
Company, except for any conversion of a security that was not acquired
directly from the Company; or
(3) Solely as a result of a direct or indirect acquisition by Occidental
Petroleum Corporation ("Occidental") or Millennium, or any Affiliate of
either of them, of beneficial ownership of securities representing, (x) in
the case of Occidental (with its Affiliates), no more than forty percent
(40%), (y) in the case of Millennium (with its Affiliates), no more than
forty percent (40%), and (z) in the case of Occidental (with its
Affiliates) and Millennium (with its Affiliates) in the aggregate, no more
than forty-nine percent (49%), of either (A) the then outstanding Common
Shares or (B) the Combined Voting Power of all then outstanding Voting
Securities of the Company, pursuant to or as contemplated under any
agreement between the Company and Occidental and/or Millennium or
Affiliates of either of them (including any subsequent related transaction
or series of related transactions or acquisitions of Voting Securities of
the Company by Occidental and/or Millennium or their Affiliates or
assignees approved by the Incumbent Directors prior to the consummation of
such transaction or series of related transactions) where, as a result of
such transaction or series of related transactions, the Company or a
Surviving Entity owns, directly or indirectly, a greater percentage equity
interest in Equistar than was owned, directly or indirectly, by the Company
immediately prior to such transaction or series of related transactions;
provided, further, that if any Person referred to in paragraph (1) or (2)
of this Subsection (iv) shall thereafter become the beneficial owner of
additional
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shares or other ownership interests representing one percent (1%) or more
of the outstanding Common Shares or one percent (1%) or more of the
Combined Voting Power of the Company (other than (x) pursuant to a stock
split, stock dividend or similar transaction or (y) as a result of an event
described in paragraph (1), (2) or (3) of this Subsection (iv)), then a
Change in Control shall be deemed to have occurred for purposes of this
Subsection (iv).
(v) For purposes of this definition of Change in Control, the following
capitalized terms have the following meanings:
(1) "Affiliate" shall mean, as to a specified person, another person that
directly, or indirectly through one or more intermediaries, controls or is
controlled by, or is under common control with, the specified person,
within the meaning of such terms as used in Rule 405 under the Securities
Act of 1933, as amended, or any successor rule.
(2) "Combined Voting Power" shall mean the aggregate votes entitled to be
cast generally in the election of the Board of Directors, or similar
managing group, of a corporation or other entity by holders of then
outstanding Voting Securities of such corporation or other entity.
(3) "Person" shall mean any individual, entity (including, without
limitation, any corporation, partnership, trust, joint venture, association
or governmental body) or group (as defined in Sections 14(d)(3) or 15(d)(2)
of the Exchange Act and the rules and regulations thereunder); provided,
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however, that Person shall not include the Company, LYONDELL-CITGO Refining
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LP ("LCR") or Equistar, any of their subsidiaries, any employee benefit
plan of the Company, LCR or Equistar or any of their majority-owned
subsidiaries or any entity organized, appointed or established by the
Company, LCR, Equistar or such subsidiaries for or pursuant to the terms of
any such plan.
(4) "Voting Securities" shall mean all securities of a corporation or other
entity having the right under ordinary circumstances to vote in an election
of the Board of Directors, or similar managing group, of such corporation
or other entity.
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SECTION 4
INDEPENDENT PLAN ADMINISTRATOR
Various provisions of this Trust Agreement refer to the term "Independent
Plan Administrator" which shall mean, unless stated otherwise in a specific
provision of this Trust Agreement, and, except as provided below, an entity
which is unrelated to, and unaffiliated with, the Company, and which, prior to a
Change in Control has accepted in writing the position of Independent Plan
Administrator under this Trust Agreement. The Independent Plan Administrator
shall not be considered to be related to or affiliated with the Company solely
as a result of an agreement between the Independent Plan Administrator and the
Company to provide individual financial counseling services to specified Company
executives or to provide financial counseling services to survivors of deceased
Company employees. The Independent Plan Administrator shall be appointed by the
Company and shall have its duties specified in an agreement executed by the
Company and the Independent Plan Administrator prior to a Change in Control. The
Trustee shall be given advance written notification of such appointment by the
Company. Following a Change in Control, if the Company had failed to designate
an Independent Plan Administrator prior to a Change in Control, the Independent
Plan Administrator shall be appointed by the Trustee following a Change in
Control and shall have its duties specified in an agreement executed by the
Trustee and the Independent Plan Administrator. In the event the Independent
Plan Administrator fails to act, provides services to the Company other than in
its capacity as Independent Plan Administrator other than as provided above, or
resigns, the Company prior to a Change in Control, or the Trustee after a Change
in Control, shall retain a successor Independent Plan Administrator.
Notwithstanding any other provision of this Trust Agreement, the Trustee shall
be responsible only for the prudent selection of an Independent Plan
Administrator after a Change in Control (i) following notice by the Company or
the Independent Plan Administrator of disqualification of the Independent Plan
Administrator through the provision of services to the Company other than in its
capacity as Independent Plan Administrator, (ii) upon resignation or failure to
act by the Company-appointed Independent Plan Administrator, or (iii) in the
event the Company failed to appoint an Independent Plan Administrator prior to a
Change in Control. The Trustee shall be entitled to conclusively rely on the
determinations of a qualified Independent Plan Administrator.
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SECTION 5
EXCESS REVERSION
Prior to a Change in Control, upon a determination that the assets of the
Trust have a value exceeding one hundred twenty-five percent (125%) of the
actuarial present value of accrued but unpaid benefits of the Participating
Plans, considered on the basis of assets being allocated to each Participating
Plan, all or a portion of the amount of such assets which constitute the "Excess
Reversion" (as defined below) may be repaid to the Company upon direction of the
Company. However, prior to any such repayment, the Company must deliver to the
Trustee a certified statement by an actuary who is an Enrolled Actuary under
ERISA and who is not affiliated with the Company of (i) the amount equal to one
hundred (100%) percent of the actuarial present value of the accrued but unpaid
benefits under the Participating Plans, calculated on an individual plan basis,
as described above, (the "Certified Benefit Values"), (ii) the value of the
Trust assets, allocated to each Participating Plan, as described above, and
(iii) the amount, if any, by which the value of the Trust assets under (ii)
exceeds the Certified Benefit Values under (i), and (iv) the amount, if any, by
which the value of the Trust assets under (ii) exceeds one hundred twenty-five
(125%) percent of the Certified Benefit Values (the "Excess Reversion"). The
actuary shall make each determination required to prepare the certified
statement based on reasonable factors, assumptions and tables (as determined
solely by such actuary). The Trustee shall repay assets of the Trust to the
Company as directed by the Company and in an amount up to but not greater than
the Excess Reversion. Any repayment of assets of the Trust to the Company may be
made only prior to a Change in Control and shall be made within thirty (30) days
(or as soon as practicable) after the later of the Trustee's receipt of the
certified statement by the actuary and the Company's direction to make such a
payment. Any separate allocations of assets pursuant to this Section 5 shall be
solely for the purpose of completing the valuation tests described in this
Section and shall not reflect any legal commitment of assets to any
Participating Plan or to any Trust Beneficiary.
SECTION 6
AUTHORITY OF INVESTMENT OFFICER
Prior to a Change in Control, the Trustee shall be subject to the direction
of the Investment Officer (as defined below) of the Company with respect to the
investment of the assets of the Trust. Unless the Company and the Trustee have
mutually agreed in a separate writing that the Trustee shall have and exercise
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investment discretion with respect to all or a portion of the assets of the
Trust, the Company shall have complete discretion with respect to the investment
of such assets at all times prior to a Change in Control, and shall direct the
Trustee accordingly. From time to time, the Trustee shall be notified in a
writing signed by an officer of the Company of the person or persons
constituting the "Investment Officer" for purposes of this Section and the
Trust. In each such notice, the Company shall warrant that all directions given
by the Investment Officer are proper. The Trustee shall have no responsibility
to review, or to consider the propriety of holding or selling any life
insurance, retirement income or annuity policies or contracts.
Notwithstanding the Company's discretion to invest the Trust assets, the Company
shall not exercise this discretion to reacquire part or all of the assets held
in the Trust by substitution of or exchange for any other property held by the
Company directly or indirectly through any third party, related or unrelated,
and whether or not the property is equivalent, marketable, liquid, or secured.
SECTION 7
DUTIES AND POWERS OF TRUSTEE WITH RESPECT TO INVESTMENTS
After a Change in Control, the Trustee shall have sole discretion to invest
and reinvest the assets of, and to invest any additions to, the Trust in
personal property consisting of equity securities, debt instruments at the time
of purchase rated not less than BBB- by Standard & Poor's Corporation and its
successors ("S&P") or Baa3 by Xxxxx'x Investor Service, Inc. and its successors
("Moody's) or the equivalent of such ratings by S&P or Xxxxx'x for the types of
investments specified in Section 14 of this Trust Agreement ("Investment Grade
Securities") with the power to appoint any independent investment manager to
fulfill such obligation; provided, however, that (i) the Trustee shall be
subject to any prior directions and instructions of the Company prior to a
Change in Control regarding insurance, retirement income or annuity policies or
contracts unless the Independent Plan Administrator otherwise directs the
Trustee, (ii) the Independent Plan Administrator shall have sole power on and
after a Change in Control regarding the management, including the purchase, sale
or retention (including all powers of the Company under Sections 7(C) and 9 of
this Trust Agreement) of any insurance, retirement income or annuity policies or
contracts, (iii) any such powers of the Trustee or Independent Plan
Administrator described above may not be delegated, in whole or in part, after a
Change in Control to the Company or any affiliate of the Company, and (iv) the
Trustee shall not be required to
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liquidate any investments that were made pursuant to the directions of the
Investment Officer that are not Investment Grade Securities. Subject to the
foregoing provisions of Sections 6 and 7 of this Trust Agreement, the Trustee
shall have the following powers:
A. To invest and reinvest the Trust, without distinction between principal
and income, in any form of domestic or foreign real or personal property,
whether or not productive of income or consisting of wasting assets,
provided that investments of the Plan shall be diversified so as to
minimize the risk of large losses, unless under the circumstances it is
clearly prudent not to do so;
B. To sell, convey, redeem, exchange, grant options for the purchase or
exchange of, or otherwise dispose of, any real or personal property, other
than an exchange of Trust assets to the Company as described in Section 6,
at public or private sale, for cash or upon credit, with or without
security, without obligation on the part of any person dealing with the
Trustee to see to the application of the proceeds of, or to inquire into
the propriety of, any such disposition;
C. To purchase and maintain, as owner, life insurance policies as provided
in Section 9 of this Trust Agreement and only as directed by the Investment
Officer of the Company prior to a Change in Control and the Independent
Plan Administrator after a Change in Control;
D. To exercise, personally or by general or limited proxy or power of
attorney, all voting and other rights appurtenant to any investment held in
the Trust and to delegate discretionary power to exercise all or any such
rights to trustees of a voting trust for any period of time;
E. To join in or oppose any reorganization, recapitalization,
consolidation, merger or liquidation or any plan therefor, or any lease,
mortgage or sale of the property of any organization the securities of
which are held in the Trust; to pay from the Trust any assessments, charges
or compensation specified in any plan of reorganization, recapitalization,
consolidation, merger or liquidation; to deposit any property with any
committee or depository; and to retain any property allotted to the Trust
in any reorganization, recapitalization, consolidation, merger or
liquidation;
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F. To exercise or sell, personally or by general or limited power of
attorney, any conversion, subscription or other rights, including the right
to vote, appurtenant to any investment held in the Trust;
G. To borrow money for purposes of this Trust Agreement in any amount and
upon any reasonable terms and conditions from any lender (other than the
Trustee in its individual capacity), and to pledge or mortgage any property
held in the Trust to secure the repayment of any such loan;
H. To compromise, settle or arbitrate any claim, debt, or obligation of or
against the Trust; to enforce or abstain from enforcing any rights, claim,
debt or obligation; and to abandon any property determined by it to be
worthless;
I. To commence or defend suits or legal proceedings and to represent the
Trust in all suits or legal proceedings; to settle, compromise or submit to
arbitration any claims, debts or damages, due to or owing from the Trust;
J. To engage any legal counsel, including counsel to the Company, any
enrolled actuary, or any other suitable agents; to consult with such
counsel, enrolled actuary, or agents with respect to the construction of
this Trust Agreement, the duties of the Trustee hereunder, the transactions
contemplated by this Trust Agreement or any act which the Trustee proposes
to take or omit; to rely upon the advice of such counsel, enrolled actuary
or agents and to pay all reasonable fees, expenses and compensations of
such counsel, actuary or agents; and
K. To organize and incorporate under the laws of any state one or more
corporations (and to acquire an interest in any corporation that it may
have organized and incorporated) for the purpose of acquiring and holding
title to any property, interest or rights that the Trustee is authorized to
acquire.
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SECTION 8
ADDITIONAL POWERS AND DUTIES OF THE TRUSTEE
Following a Change in Control should the Company attempt to enjoin any
benefit payment (other than for reasons of manifest error) that the Trustee has
been directed to make under the terms of this Trust Agreement, the Trustee shall
commence legal action to allow such payment. The Trustee may withdraw from the
Trust assets any amounts it deems necessary to pay legal expenses, including
attorneys' fees, incurred in the course of such legal action. Under no
circumstances shall the Trustee be required to make such payments for benefits
or expenses from any source other than the Trust. Except as otherwise limited by
Section 6, the Trustee shall also have the following powers:
A. To cause any asset, real or personal, to be held in a corporate
depository or federal book entry account system or registered in the
Trustee's name or in the name of a nominee or in such other form as the
Trustee deems best without disclosing the trust relationship; provided,
however, that nothing contained in this Section shall be deemed to relieve
the Trustee of any custodial responsibility allocated to it under this
Trust Agreement;
B. To employ agents in the management of the Trust, including employees of
the Company and its subsidiaries and affiliates prior to a Change in
Control, provided, that the Trustee shall be responsible for the acts of
such agents (other than acts of the United States Postal Service) as much
as if they were acts of the Trustee;
C. To make, execute and deliver, as the Trustee, any deeds, leases, notes,
bonds, guarantees, mortgages, conveyances, contracts, waivers, releases or
other instruments in writing that the Trustee may deem necessary or
desirable in the exercise of its powers under this Trust Agreement;
D. To transfer assets of the Trust to a successor Trustee as provided in
Section 24 of this Trust Agreement;
E. To hold any portion of the Trust in cash pending investment, or for the
payment of expenses or Supplemental Benefits; and
F. To exercise, generally, any of the powers which an individual owner
might exercise in connection with property, either real, personal or mixed
held by the Trust and to do
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all other acts that the Trustee may deem necessary or proper to carry out
any of the powers set forth in this Trust Agreement or otherwise in the
best interests of the Trust.
SECTION 9
INSURANCE POLICIES AND CONTRACTS
Prior to a Change in Control, the Company reserves the right to transfer
life insurance, retirement income or annuity policies or contracts, to the
Trust, regardless of the nature or type of such contract and regardless of the
Company's interest in, or power to direct the investments under, such policies
or contracts, or prior to a Change in Control, to direct the Trustee to purchase
any such policies or contracts, and following a Change in Control the
Independent Plan Administrator shall have the same powers regarding such
insurance policies and contracts. Any such policy or contract shall be an asset
of the Trust subject to the claims of the Company's creditors in the event of
insolvency, as specified in Sections 21.1 and 21.2 of this Trust Agreement. The
proceeds of any life insurance policy shall, upon the death of the insured, be
paid to the Trust. The Trustee shall be under no duty to question any direction
of the Company or the Independent Plan Administrator, to review the form of any
such policies or contracts or the selection of the issuer thereof, or to make
suggestions to the Company, the Independent Plan Administrator or to the issuer
thereof with respect to the form of such policies or contracts prior to a Change
in Control, or to question any such directions, to review such policies, forms
or selections or to make such suggestions to the Independent Plan Administrator
following a Change in Control. Prior to a Change in Control, the Company may
direct the Trustee to exercise the powers of the contract holder under any such
policies or contracts, and the Trustee shall exercise such powers only upon the
direction of the Company. Following a Change in Control, the Independent Plan
Administrator may direct the Trustee to exercise the powers of the contract
holder under any such policies or contracts and the Trustee shall exercise such
powers only upon direction of the Independent Plan Administrator.
Notwithstanding anything to the contrary contained in any Participating Plan,
the Trustee (i) shall be fully protected in acting in accordance with written
directions of the Company prior to a Change in Control and with the written
directions of the Independent Plan Administrator following a Change in Control,
and (ii) shall be under no liability for any loss of any kind that may result by
reason of any action taken or omitted by it in accordance with such direction of
the Company or the Independent Plan Administrator, or by reason of inaction in
the absence of such written directions
14
from the Company or the Independent Plan Administrator. No insurance carrier
shall for any purpose be deemed a party to this Trust Agreement or be
responsible for the validity or sufficiency hereof. Notwithstanding the fact
that it may have knowledge of the terms of this Trust, the obligations of such
insurance carrier shall be measured and determined solely by the terms and
conditions of the policies or contracts issued by it. Any such insurance carrier
shall not be under any obligation to any person, partnership, corporation, trust
or association other than as stated in such policies or contracts.
SECTION 10
PARTICIPATING PLAN RECORDS
A separate written record of the accrued and vested benefit, as applicable,
for each Trust Beneficiary of each Participating Plan, based on a certified
listing provided by the Company prior to a Change in Control and by the
Independent Plan Administrator following a Change in Control, shall be
maintained. The Company or the Independent Plan Administrator, as applicable,
shall provide such certified listing at least once each calendar year to the
Trustee.
SECTION 11
VALUATION
The Trust shall be revalued by the Trustee at current values, as determined
by the Trustee, as of the last business day of each calendar year and as of such
additional dates as the Trustee and Company shall determine to be appropriate
("Valuation"). The Company prior to a Change in Control and the Independent Plan
Administrator following a Change in Control annually shall provide a
certification of value for each life insurance, retirement income or annuity
policy or contract held as an asset of the Trust. The Trustee may rely upon the
certification of value received from the Company prior to a Change in Control or
the Independent Plan Administrator following a Change in Control for each such
policy or contract held as an asset of the Trust.
15
SECTION 12
PARTICIPANT RECORDS PRIOR TO AND FOLLOWING A CHANGE IN CONTROL
Section 12.1. In addition to the records maintained under Section 10, the
-------------
Company shall maintain a separate written record that reflects for each Trust
Beneficiary, the Trust Beneficiary's vested benefits under each Participating
Plan and the portion of the Trust or Subtrust allocated to such Trust
Beneficiary (a "Participant Record"). Prior to a Change in Control, the Trustee
shall certify to the Company the results of each Valuation. Following receipt of
a Valuation, each Participant Record shall be equitably adjusted by the Company
to reflect its share of the income, expense, appreciation and depreciation since
the preceding Valuation date. Such Participant Records shall be maintained
solely for record keeping purposes prior to a Change in Control, without any
legal entitlement of a Trust Beneficiary to amounts allocated to his or her
Participant Record.
Section 12.2. On and after a Change in Control, the Independent Plan
-------------
Administrator (i) shall continue to maintain the Participant Records and the
records described in Section 10 of this Trust Agreement, (ii) shall thereafter
be solely responsible for the updating of such Participant Records and for
requesting the Trustee to make any additional Valuations the Trustee and
Independent Plan Administrator deem appropriate, and (iii) shall be entitled to
rely on the most recent certified listing delivered by the Company to the
Trustee prior to a Change in Control in the maintenance and updating of such
Participant Records following a Change in Control. No new Participant Records
may be established following a Change in Control. The Independent Plan
Administrator may, but is not required to, rely on any certified listing
provided by the Company pursuant to Section 10 following a Change in Control.
Following a Change in Control, the sole source of Trust assets from which the
Independent Plan Administrator may direct that a Trust Beneficiary's
Supplemental Benefits be paid to the extent the Trustee, rather than the
Company, pays the Supplemental Benefits shall be that portion of the assets of
the Trust or Subtrust allocated to the Participant Record of such Trust
Beneficiary.
SECTION 13
TRUSTEE ACCOUNTS
Within 120 days after the close of each fiscal year of the Trust and any
other period agreed upon by the Trustee and the Company, and within ninety (90)
days of the date of the removal or resignation of the Trustee, the Trustee shall
file with the
16
Company a written account ("Trustee Account") setting forth all investments,
receipts, disbursements, withdrawals and other transactions effected by it
during the period from the date of its last such Trustee Account and a list of
the assets of the Trust at the close of such period. Such Trustee Account may be
in the form of monthly or quarterly statements which taken together reflect the
matters set forth in the preceding sentence. As between the Company and the
Trustee, the Trustee shall be forever released and discharged from all liability
with respect to the propriety of acts and transactions shown in such Trustee
Account following a Change in Control, and shall be forever released and
discharged from all liability with respect to the propriety of acts and
transactions shown in such Trustee Account prior to a Change in Control except
with respect to any such act or transaction as to which the Company shall,
within a 90-day period of receipt of the Trust Account, file written objections
with the Trustee and except that no such accounting shall foreclose any
liability of the Trustee to the Company arising under Section 23.3 of this Trust
Agreement.
SECTION 14
INVESTMENT OF CASH
Prior to a Change in Control, the Trustee shall keep any cash held
hereunder from time to time on deposit in its own banking department or
elsewhere as the Trustee elects, consistent with instructions provided by the
Investment Officer of the Company regarding specific types of permissible
investments and permissible depositories. Prior to a Change in Control, in the
absence of contrary instructions from the Investment Officer, and following a
Change in Control, in the absence of contrary instructions from the Independent
Plan Administrator regarding insurance, retirement income or annuity policies or
contracts, and anything herein to the contrary notwithstanding, the Trustee,
without obtaining any prior approvals, may at its discretion invest cash
balances held by the Trustee from time to time in deposits in its own banking
department, in short-term cash equivalents having ready marketability, including
but not limited to U.S. Treasury bills, commercial paper rated not less than
A1/P1 (including such forms thereof as may be available through the Trustee's
own trust department), certificates of deposit, and similar type securities,
having a maturity of 18 months or less, including participation in common or
collective funds composed thereof. Prior to a Change in Control, the Trustee may
sell any such short-term investments as may be necessary to carry out the
instructions of the Investment Officer of the Company regarding more permanent
type investments or to permit any distributions or
17
transfers directed hereunder. The Trustee may make any such sales it deems
appropriate following a Change in Control, including sales necessary to carry
out the instructions of the Independent Plan Administrator.
SECTION 15
PAYMENTS BY THE TRUSTEE
Section 15.1. The establishment of the Trust and the payment or delivery to
-------------
the Trustee of money or other property acceptable to the Trustee shall not vest
in any Trust Beneficiary any right, title or interest in or to any assets of the
Trust.
Section 15.2. The Trustee shall be directed as to the amount, timing, and
-------------
form of benefits to be paid to any Trust Beneficiary. Prior to a Change in
Control, the Company shall so direct the Trustee and by giving such directions
shall be deemed to warrant their propriety. Following a Change in Control, the
Independent Plan Administrator shall so direct the Trustee and by giving such
directions, shall be deemed to warrant their propriety.
Section 15.3. The Trustee shall withhold all or any part of any payment for
-------------
the payment of any tax liability and the Trustee shall discharge such liability
as and when directed by the Company prior to a Change in Control and by the
Independent Plan Administrator following a Change in Control. All withholding,
related filings and reports are the responsibility of the Company.
Section 15.4. The Company intends to make benefit payments from its assets
-------------
as it deems appropriate, in its sole discretion, provided, that, notwithstanding
this intent, if the Trust is not sufficient, before or after a Change in
Control, to make one or more payments of Supplemental Benefits to the Trust
Beneficiaries under the relevant Participating Plan, the Company shall make the
balance of each such payment as it falls due.
Section 15.5. Except as otherwise provided herein, in the event of any
-------------
final determination by the Internal Revenue Service or a court of competent
jurisdiction which determination is not appealable or the time for appeal or
protest of which has expired, or the receipt by the Trustee of an unqualified
opinion of tax counsel selected by the Trustee or Company, which determination
determines, or which opinion concludes, that any Trust Beneficiary is subject to
federal income taxation on amounts held in trust to pay Supplemental Benefits
hereunder prior to the distribution to the Trust Beneficiary of such
Supplemental Benefits, the Trustee shall, on receipt by the Trustee of such
opinion or actual notice
18
of such determination, pay to such Trust Beneficiary the portion of the Trust
corpus includible in such Trust Beneficiary's federal gross income, and the
Trust Beneficiary's Supplemental Benefits shall be canceled to the extent of
such payment, provided that the amount, form and timing of such payments and the
amount and method of such cancellation shall be as directed by the Company prior
to a Change in Control and by the Independent Plan Administrator following a
Change in Control.
SECTION 16
DETERMINATION OF CHANGE IN CONTROL
The Company shall immediately notify the Trustee in writing of the
occurrence of a Change in Control as the result of any event specified in
Section 3.1 of this Trust Agreement. If the Trust Department of the Trustee
receives written notice from a third party (including the Company's outside
auditors) of the alleged occurrence of a Change in Control as the result of any
event specified in Section 3.1 of this Trust Agreement, the Trustee shall
request the Company to confirm or deny such occurrence and the Company shall
make such confirmation or denial within forty-five (45) days following receipt
of the Trustee's request. In order to deny that a Change in Control as the
result of any event specified in Section 3.1 of this Trust Agreement has
occurred, the Company shall provide with its notice a certificate, in a form
reasonably satisfactory to the Trustee, from an independent accounting firm,
which firm may be the accounting firm engaged by the Company to be its outside
auditors, certifying that a Change in Control as the result of an event
specified in Section 3.1 of this Trust Agreement has not occurred. Pending the
Company's response, the Trustee shall not repay, pursuant to Section 5 of this
Trust Agreement, any assets of the Trust to the Company and no new Trust
Beneficiaries may be added to the Trust. The Trustee shall be entitled to
conclusively rely upon such confirmation or denial.
SECTION 17
TRUSTEE COMPENSATION AND TRUST EXPENSES
The Trustee shall be paid such reasonable compensation for its service as
Trustee as shall from time to time be agreed upon by Company and Trustee. This
compensation and all expenses incurred by the Trustee in the management and
protection of the Trust, including administration, accounting and legal fees,
shall be reimbursed by the Company within 30 days after the Company's
19
receipt of a xxxx from the Trustee for any fees and expenses paid from the Trust
assets. To the extent the Company fails to reimburse the Trustee, this
compensation and extraordinary and non-recurring expenses shall be charged by
the Trustee against the Trust.
SECTION 18
PAYMENT OF TAXES BY TRUSTEE
Prior to a Change in Control, to the extent that any taxes levied or
assessed upon the Trust are not paid by the Company, the Trustee shall pay such
taxes out of the Trust as directed by the Company. The Trustee shall, if
requested by the Company prior to a Change in Control, and solely in its
discretion following a Change in Control, contest the validity or amount of any
tax assessment, claim or demand respecting the Trust or any part thereof. The
Company itself may contest the validity of any such taxes prior to a Change in
Control.
SECTION 19
CUSTODIANS AND AGENTS
When so instructed by the Company prior to a Change in Control with respect
to Trust assets for which the Company has investment responsibility, and at the
Trustee's sole discretion with respect to assets for which the Trustee has
investment responsibility, the Trustee shall deposit any assets held by it with
a custodian, which may not include the Company or an affiliate of the Company,
and the Company shall hold harmless and defend the Trustee against any liability
arising or asserted to arise out of the Trustee's compliance with directions
under this Section 19 of this Trust Agreement.
SECTION 20
LIABILITY FOR BENEFIT PAYMENTS
The Company shall remain primarily liable to pay Supplemental Benefits
under the Participating Plans. However, the Company's liability under the
Participating Plans shall be reduced or offset to the extent Supplemental
Benefit payments are made from the Trust.
20
SECTION 21
COMPANY INSOLVENCY
Section 21.1. The Company shall have the duty to inform the Trustee in
-------------
writing if the Company becomes insolvent, as hereinafter defined. When so
informed, the Trustee shall immediately discontinue payments of Supplemental
Benefits to Trust Beneficiaries, and shall hold the assets of the Trust for the
benefit of the Company's general creditors. The Company shall be considered
"insolvent" for purposes of this Trust Agreement in the event of the following:
A. the Company's inability to pay debts as they mature;
B. a general assignment for the benefit of the Company's creditors;
C. the voluntary commencement by the Company of any proceeding under
Title 11 of the United States Code or any other law of any
jurisdiction for the relief, liquidation or rehabilitation of debtors
(all of which proceedings are hereinafter collectively referred to as
"Insolvency Proceedings");
D. the making of an admission by the Company of any of the material
allegations of, or consenting to, or acquiescing in, a petition,
application, motion or complaint commencing an Insolvency Proceeding
or the seeking by the Company of the appointment of, or the taking of
possession by, a receiver, custodian, trustee, liquidator or similar
official of or for it or for a substantial part of its assets;
E. the involuntary commencement of an Insolvency Proceeding against the
Company which is not fully stayed, timely controverted or dismissed
within one hundred twenty (120) days after the filing thereof; or
F. the appointment of, or the taking of possession by, a receiver,
custodian, trustee, liquidator or similar official of or for the
Company or of or for all or substantially all of its assets.
If the Trust Department of the Trustee receives a written allegation from a
third party that the Company has become insolvent, the Trustee shall appoint an
independent accounting firm to determine within sixty (60) days whether the
Company is insolvent under the terms of this Trust Agreement and, pending such
determination, the Trustee shall discontinue payments of
21
Supplemental Benefits to Trust Beneficiaries, shall hold the Trust assets for
the benefit of the Company's general creditors, and shall resume payments of
Supplemental Benefits to Trust Beneficiaries only after such independent
accounting firm, has determined that the Company is not insolvent (or is no
longer insolvent, assuming the independent accounting firm initially determined
the Company to be insolvent) or after receipt of an order of a court of
competent jurisdiction. In making its determination, such independent accounting
firm, may rely on a letter from the Company's Controller, or its Independent
Auditors, or on relevant information concerning the Company's solvency which has
been furnished to the Trustee by any other person. Notwithstanding any other
provision of this Trust Agreement, the Trustee shall be responsible only for the
prudent selection of the independent accounting firm, and shall conclusively
rely on such firm's determination. Nothing in this Trust Agreement shall in any
way enlarge or diminish the rights of the Trust Beneficiaries in the event the
Company is insolvent to pursue their rights as general creditors of the Company
with respect to their Supplemental Benefits or otherwise.
Section 21.2. In the case of the Company's notification of insolvency or
-------------
the determination of insolvency by an independent accounting firm as provided in
Section 21.1 of this Trust Agreement, the Trustee shall deliver any
undistributed principal and income in the Trust to satisfy claims of the
Company's general creditors as directed by a court of competent jurisdiction.
Section 21.3. If the Trustee discontinues payments of Supplemental Benefits
-------------
from the Trust pursuant to Section 21.1 of this Trust Agreement and subsequently
resumes such payments, the first payment to each Trust Beneficiary following
such discontinuance shall include the aggregate amount of all payments which
would have been made to such Trust Beneficiary in accordance with the relevant
Participating Plan during the period of such discontinuance, less the aggregate
amount of payments of Supplemental Benefits made to such Trust Beneficiary by
the Company during any such period of discontinuance. Prior to a Change in
Control, the Trustee shall be directed as to the amount, timing, form and payee
of all such payments by the Company. Following a Change in Control, the Trustee
shall be so directed by the Independent Plan Administrator.
22
SECTION 22
TRUSTEE RESPONSIBILITY FOR PLAN ADMINISTRATION
AND TRUST RECORD KEEPING AFTER CHANGE IN CONTROL
Section 22.1. Following a Change in Control, the Independent Plan
-------------
Administrator shall assume full responsibility for the interpretation and
application of the Participating Plans' provisions and authorization for the
payment of benefits as such provisions relate to payments to be made from the
Trust. The Independent Plan Administrator shall have full discretion with
respect to the performance of such duties and shall not be required to follow
any direction of the Company, any successor thereto, or any other entity in
performing such duties.
Section 22.2. Following a Change in Control, the Trustee shall maintain all
-------------
records dealing with the Trust and its investments; provided, however, that the
responsibility for the maintenance of Plan records relating to Trust
Beneficiaries, Participant Records and all other plan administration shall be
the sole responsibility of the Independent Plan Administrator. The Trustee shall
have no responsibility for the maintenance of the Participating Plan.
SECTION 23
TRUSTEE STANDARDS OF PERFORMANCE
AND INDEMNIFICATIONS
Section 23.1. Trustee shall perform all of its functions hereunder (i) with
-------------
the care, skill, prudence, and diligence which under the circumstances then
prevailing a prudent man acting in a like capacity and familiar with such
matters would use in the conduct of an enterprise of a like character and with
like aims, or (ii) in accordance with such other standard as may be required
from time to time by law, and shall not be liable for any conduct on its part
(including reliance on advice of counsel) which conforms to that standard.
Section 23.2. The Company (which has the authority to do so under the laws
-------------
of its state of incorporation) shall indemnify the Trustee and defend it and
hold it harmless from and against any and all direct liabilities, losses,
claims, suits or expenses (excluding indirect, consequential, special and
punitive damages but including attorney's fees) of whatsoever kind and nature
which may be imposed upon, asserted against or incurred by the Trustee at any
time by reason of its carrying out its responsibilities or providing services
hereunder or by reason of any act or failure to
23
act under this Trust Agreement, except to the extent that any such liability,
loss, claim, suit or expense arises directly from the Trustee's gross negligence
or willful misconduct in the performance of responsibilities specifically
allocated to it under this Trust Agreement. The provisions of this Section 23.2
shall survive the termination of this Trust Agreement.
Section 23.3. The Trustee (which has the authority to do so under the laws
-------------
of its state of incorporation) shall indemnify the Company and defend it and
hold it harmless from and against any and all direct liabilities, losses,
claims, suits or expenses (including attorney's fees) of whatsoever kind and
nature which may be imposed upon, asserted against or incurred by the Company at
any time directly by reason of the Trustee's gross negligence or willful
misconduct in the performance of responsibilities specifically allocated to it
under this Trust Agreement. The provisions of this Section 23.3 shall survive
the termination of this Trust Agreement.
SECTION 24
REMOVAL AND RESIGNATION OF TRUSTEE
Prior to a Change in Control, Trustee may be removed by the Company at any
time upon not less than thirty (30) days' written notice. The Trustee may resign
at any time prior to or following a Change in Control, upon not less than ninety
(90) days' written notice. In either case, such notice may be wholly or
partially waived by the party to whom it is due. Upon Trustee's removal or
resignation prior to a Change in Control, the Company shall appoint a successor
Trustee, who shall have no responsibility for the acts or omissions of any
predecessor trustee, and upon the Trustee's resignation following a Change in
Control the Trustee shall petition a court of competent jurisdiction to name a
successor trustee which in no event may be the Company or an affiliate of the
Company or a successor thereto; provided, however, that the successor trustee in
either case shall have the same powers and duties as those conferred upon the
Trustee hereunder, and upon acceptance of such appointment by the successor
Trustee, the Trustee shall assign, transfer and pay over to such successor
Trustee the Trusts and properties then constituting the Trust. If the Company
fails within a reasonable time to name a successor Trustee or otherwise direct
proper disbursement of the Trust prior to a Change in Control, the Trustee may
apply to any court of competent jurisdiction for appropriate relief. The Trustee
may in any event reserve such reasonable sum of money as it may deem advisable,
to provide for any charges against the Trust for which it may be liable, and for
24
payment of its fees and expenses in connection with the settlement of its
account or otherwise. Any balance of such reserve remaining after the payment of
such fees and expenses shall be paid over as aforesaid.
SECTION 25
TERMINATION OF PARTICIPATING PLAN OR PLANS
If a Participating Plan is wholly or partially terminated prior to a Change
in Control, the Trustee shall disburse the portion of the Trust affected by the
termination as directed by the Company. If a Participating Plan is wholly or
partially terminated following a Change in Control, Trustee shall disburse the
portion of the Trust affected by the termination as directed by the Independent
Plan Administrator.
SECTION 26
RIGHTS OF COMPANY TO TRUST ASSETS
Section 26.1. Prior to a Change in Control, the Company shall have no
-------------
right, title or interest in the Trust, nor shall any part of the Trust revert to
or be repaid to the Company, until all benefits due under all Participating
Plans have been paid pursuant to Section 25 of this Trust Agreement, unless, at
any time, there is a determination that the assets of the Trust have a value
exceeding one hundred twenty-five percent (125%) of the lump sum actuarial
equivalent value of accrued but unpaid benefits under the Participating Plans
pursuant to Section 5 of this Trust Agreement. The amount of such excess may be
repaid to the Company, upon direction of the Company pursuant to the provisions
of Section 5.
Section 26.2. On and after the occurrence of a Change in Control, the
-------------
Company shall have no right, title or interest in the Trust, nor shall any part
of the Trust revert to or be repaid to the Company.
25
SECTION 27
AMENDMENTS OF TRUST
Section 27.1. Prior to a Change in Control, the Company may amend this
-------------
Trust Agreement by an instrument in writing signed by an authorized officer of
the Company provided that no such amendment shall make this Trust revocable or
divert any part of the Trust to purposes other than payment of Supplemental
Benefits, payments under Sections 2 or 5 of this Trust Agreement, or defrayal of
reasonable expenses of administering the Participating Plans. The Trustee's
consent shall be required for any amendment affecting its duties,
responsibilities or rights. No amendment affecting the duties, responsibilities
or rights of the Trustee shall take effect until thirty (30) days after a copy
of said amendment is furnished to the Trustee or, if the Trustee gives notice of
resignation within such 30 day period, until the resignation becomes effective,
provided, that the Trustee may, in writing, waive the 30 day requirement.
Section 27.2. Following a Change in Control, this Trust Agreement may not
-------------
be amended.
SECTION 28
TERMINATION OF TRUST
Section 28.1. Prior to a Change in Control, the Company may not terminate
this Trust for reasons other than those provided in (A) and (B) below.
Otherwise, this Trust shall be irrevocable. Removal or resignation of a Trustee
pursuant to Section 24 shall not be deemed a termination of this Trust
Agreement.
A. This Trust will terminate if a federal court determines, after
exhaustion of all appeals, that the Trust causes any of the Participating
Plans to cease to be "unfunded" under the provisions of ERISA.
B. The Company may terminate this Trust if the Company determines, based on
advice of legal counsel satisfactory to the Trustee, that there is a
significant risk that the Trust would cause any of the Participating Plans
to be cease to be unfunded under ERISA prior to actual payment of any
Supplemental Benefits. For purposes of this section, "significant risk"
shall be based on (i) judicial authority or opinion of the U.S. Department
of Labor, Treasury Department or Internal Revenue Service or (ii) a
required
26
amendment under ERISA or the Internal Revenue Code, which failure to amend
could result in significant penalty to the Company.
If this Trust Agreement is terminated under (A) or (B), the Trust assets
shall be distributed, in accordance with the Company's written direction, as
follows:
(i) If the Company determines it is possible to create a new trust which
does not result in a Trust Beneficiary's constructive receipt of
Supplemental Benefits under any Participating Plan or which will retain the
Participating Plan's status as "unfunded" under ERISA, Trust assets shall
be transferred to the new trust. The terms of the new trust shall be
similar in all other respects to this Trust.
(ii) If the Company determines that it is not possible to create a new
trust, then the assets shall be distributed according to the allocation to
the Trust Beneficiaries under Section 12.1.
When all payments which have or may become payable pursuant to the terms of
this Trust have been made or the Trust has been exhausted pursuant to a
termination of this Trust Agreement under (A) or (B) above prior to a Change in
Control, the Trustee shall pay all remaining assets to the Company upon the
Company's certification of payments, subject to the Trustee's right to reserve
such amounts it reasonably determines to be necessary to pay outstanding and
accrued charges against the Trust.
Section 28.2. On and after the occurrence of a Change in Control, the
-------------
Independent Plan Administrator may in its discretion direct the Trustee to
terminate this Trust Agreement and in conjunction therewith the Independent Plan
Administrator shall direct the Trustee as to the names of the Trust
Beneficiaries who are to receive payments and the time, amount and form of
payment of Supplemental Benefits and any remaining assets of the Trust, subject
to the Trustee's right to reserve such amounts the Trustee determines necessary
for outstanding and accrued charges against the Trust.
SECTION 29
SUCCESSORS
Any successor in interest to the Trustee shall automatically become Trustee
under this Trust Agreement.
27
SECTION 30
COMMUNICATIONS
Any communications (including notices, instructions, or directions)
required or permitted hereunder to be given by the Company shall be given in
writing addressed to the Trustee and signed by an officer of the Company or
other person or persons whom the Company notifies the Trustee are from time to
time authorized to sign such communications, and the Company warrants that all
communications given pursuant to this Section 30 may be relied upon by the
Trustee. The Company shall furnish the Trustee specimen signatures of all
persons authorized to sign communications to the Trustee.
SECTION 31
UNCLAIMED DISTRIBUTIONS
If any benefit payment mailed by regular U.S. Mail to the last address of
the payee furnished by the Company is returned unclaimed, the Trustee shall so
notify the Company and shall discontinue further payments to such payee until it
receives further instructions of the Company.
SECTION 32
PROHIBITION OF ASSIGNMENTS
Except insofar as applicable law may otherwise require and subject to
Sections 1, 2, 21.1 and 21.2 of this Trust Agreement, (i) no amount payable to
or in respect of any Trust Beneficiary at any time under the Trust shall be
subject in any manner to direction by anticipation, sale, transfer, assignment,
bankruptcy, pledge, attachment, or charge of any kind, and any attempt to so
alienate, sell, transfer, assign, pledge, attach, change or otherwise encumber
any such amount, whether presently or thereafter payable, shall be void and (ii)
the Trust shall in no manner be liable for or subject to the debts or
liabilities of any Trust Beneficiary. No amount held under this Trust Agreement
shall be subject to voluntary or involuntary alienation.
28
SECTION 33
GOVERNING LAW
This Trust Agreement shall be governed by and construed under the laws of
the State of Delaware in all respects.
SECTION 34
EXECUTION
This Trust Agreement may be executed in counterparts, each of which shall
be an original although the others are not produced.
IN WITNESS WHEREOF, the parties have caused this Trust Agreement to be
executed as of the date first written above.
ATTEST: LYONDELL CHEMICAL COMPANY
By:
---------------------------- ---------------------------------
Assistant Secretary Xxxxx X. Xxxxxx
Vice President & Chairman,
Benefits Administrative Committee
ATTEST: WILMINGTON TRUST COMPANY
By:
---------------------------- ---------------------------------
29
APPENDIX A
TO
LYONDELL CHEMICAL COMPANY
SUPPLEMENTAL EXECUTIVE BENEFIT PLANS
TRUST AGREEMENT
Lyondell Chemical Company Supplementary Executive Retirement Plan
Lyondell Chemical Company Executive Deferral Plan
30
