EXHIBIT 10.14
LYONDELL PETROCHEMICAL COMPANY
NON-EMPLOYEE DIRECTORS BENEFIT PLANS
TRUST AGREEMENT
(EFFECTIVE AS OF FEBRUARY 1, 1997)
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 Revision................................. 9
Section 6. Authority of Investment Officer................. 10
Section 7. Duties and Powers of Trustee with Respect to
Investments................................... 10
Section 8. Additional Powers and Duties of the Trustee..... 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 Trustee..................... 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....................................... 22
Section 23. Trustee Standards of Performance and
Indemnification ........................... 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. Amendment of Trust.............................. 25
Section 28. Termination of Trust............................ 26
Section 29. Successors...................................... 27
Section 30. Communications.................................. 27
Section 31. Unclaimed Distributions......................... 28
Section 32. Prohibition of Assignments...................... 28
Section 33. Governing Law................................... 28
Section 34. Execution....................................... 28
Appendix A.................................................. 30
LYONDELL PETROCHEMICAL COMPANY
NON-EMPLOYEE DIRECTORS BENEFIT PLANS
TRUST AGREEMENT
THIS AGREEMENT, as adopted as of February 1, 1997, between LYONDELL
PETROCHEMICAL COMPANY (the "Company"), and STATE STREET BANK AND TRUST COMPANY,
a banking corporation having its principal place of business at ▇▇▇ ▇▇▇▇▇▇▇▇
▇▇▇▇▇▇, ▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇ (the "Trustee");
R E C I T A L S
A. Effective February 1,1997, the Company and the Trustee enter into this
Agreement to create a Trust (defined under Section 1 of this Trust Agreement)
for purposes of the Lyondell Petrochemical Company Retirement Plan for Non-
Employee Directors, the Lyondell Petrochemical Company Elective Deferral Plan
for Non-Employee Directors and any benefit plans that may be established and
maintained by the Company for its non-employee directors after the effective
date of this Trust and that permit funding by this Trust. 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 ("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 Benefits under the
Participating Plans.
D. The Company is obligated to pay all Benefits from its general assets to
the extent not paid by this Trust and this Trust Agreement shall not reduce or
otherwise affect the Company's continuing liability to pay Benefits from such
assets, except that the Company's liability shall be offset by actual benefit
payments made from this Trust.
E. This trust 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").
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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 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
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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
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.
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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
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Trust Agreement, a "Change in Control" shall be deemed to have occurred as of
the date that one or more of the following occurs:
A. Individuals who, as of the date hereof, constitute the entire Board of
Directors of the Company ("Incumbent Directors") cease for any reason to
constitute at least a majority of the Board; provided, however, that any
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individual becoming a director subsequent to the date hereof whose
election, or nomination for election by the Company's shareholders, was
approved by a vote of at least a majority of the then Incumbent Directors
shall be considered as though such individual was an Incumbent Director,
but excluding, for this purpose any such individual whose initial
assumption of office occurs as a result of either an actual or threatened
election contest, as such terms are used in Rule 14a-11 under the Exchange
Act or other actual or threatened solicitation of proxies or consents by or
on behalf of any Person (as defined below) other than the Board; provided,
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further, that in the event ARCO at any time determines to achieve minority
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representation on the Company's Board of Directors approximately equal to
its then ownership percentage of the Company's common stock, its
implementation of such determination through the election of ARCO employees
as directors of the Company shall not be deemed to be a Change in Control
and such ARCO employees shall constitute Incumbent Directors;
B. The stockholders of the Company shall approve (1) 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 (i) 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
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in the aggregate eighty percent (80%) or more of (a) the then outstanding
common stock or other equity interests of the corporation or other entity
surviving or resulting from such merger, consolidation or recapitalization
or acquiring such assets of the Company, as the case may be (the "Surviving
Entity") (or of its ultimate parent corporation or other entity, if any),
and (b) the Combined Voting Power of the then outstanding Voting Securities
of the Surviving Entity (or of its ultimate parent corporation or other
entity, if any) or (ii) 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 (or of its ultimate parent
corporation or other entity, if any), or (2) any plan or proposal for the
liquidation or dissolution of the Company;
C. Any Person except for ARCO shall be or become the beneficial owner (as
defined in Rules 13d-3 and 13d-5 under the Exchange Act), directly or
indirectly, of securities of the Company representing in the aggregate more
than twenty percent (20%) of either (1) the then outstanding shares of
common stock of the Company ("Common Shares") or (2) the Combined Voting
Power of all then outstanding Voting Securities of the Company; provided,
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however, that notwithstanding the foregoing, a "Change of Control" shall
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not be deemed to have occurred for purposes of this Subsection (C):
(i) 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;
or
(ii) Solely as a result of an acquisition of securities directly from
the Company except for any conversion of a security that was not
acquired directly from the Company,
provided, further, that if any Person referred to in paragraph (i) or (ii)
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of this Subsection (C) shall thereafter become the beneficial owner of any
additional Common Shares or other Voting Securities of the Company (other
than
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pursuant to a stock split, stock dividend or similar transaction), then a
"Change of Control" shall be deemed to have occurred for purposes of this
Subsection (C); or
D. ARCO shall become the owner, directly or indirectly, of securities of
the Company representing in the aggregate more than fifty percent (50%) of
either (1) the then outstanding Common Shares or (2) the Combined Voting
Power of all then outstanding Voting Securities of the Company except as
the result of an acquisition of securities by the Company which, by
reducing the number of Common Shares or other Voting Securities
outstanding, increases (x) the proportionate number of Common Shares
beneficially owned by ARCO to more than fifty percent (50%) of the Common
Shares then outstanding, or (y) the proportionate voting power represented
by the Voting Securities beneficially owned by ARCO to more than fifty
percent (50%) of the Combined Voting Power of all then outstanding Voting
Securities; provided, however, that if thereafter ARCO becomes the
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beneficial owner of any additional Common Shares or other Voting Securities
of the Company (other than pursuant to a stock split, stock dividend or
similar transaction) the exception provided above shall no longer apply;
provided, further, that for purposes of this Subsection (D), neither record
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ownership of common stock of the Company by the Trustee for ARCO's 401(a)
qualified plans nor beneficial ownership of common stock of the Company by
any of ARCO's directors for their personal account shall be deemed to
constitute "indirect" ownership of common stock of the Company by ARCO;
provided, further, that notwithstanding any contrary provision of this
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Trust Agreement, no Change in Control shall be deemed to have occurred
pursuant to this Subsection (D) if as a result of an inadvertent act ARCO
becomes the owner, directly or indirectly, of additional Common Shares or
Voting Securities and such securities are sold or otherwise disposed of by
ARCO within 30 days after ARCO discovers, or is notified by the Company as
to, the potential Change of Control resulting from such ownership, so that,
as a result of such subsequent sale or other disposition by ARCO, no Change
in Control would otherwise be deemed to have occurred pursuant to the terms
(excluding this proviso) of this Subsection (D).
Notwithstanding any of the foregoing, no Change in Control shall be deemed
to have occurred as a result solely of (1) the registration by ARCO of the
Exchangeable Notes pursuant to the Registration Statement, (2) the issuance
and sale by ARCO of the Exchangeable Notes to the underwriters in
accordance with the Registration Statement, or (3) prior to the maturity of
the Exchangeable Notes, purchases and sales
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of the Exchangeable Notes.
Section 3.3. Funding on Change in Control. The Company, within 30 days
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following a Change in Control, shall be required to irrevocably deposit
additional cash or other property, acceptable to the Trustee, to this Trust in
an amount equal to the Certified Benefit Values, as described in Section 5, as
certified by an Enrolled Actuary unaffiliated with the Company, which may become
payable as a result of a Change in Control, less the present value of Trust
assets determined as of the date of the Change in Control.
Section 3.4. For purposes of Section 3.1 of this Trust Agreement:
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A. "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.
B. "ARCO" shall mean Atlantic Richfield Company and any of its
Affiliates, excluding the Company.
C. "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.
D. "Exchangeable Notes" shall mean the debt securities exchangeable upon
maturity, at ARCO's option, into shares of the Company's common stock or
cash, as such debt securities are described in the Registration Statement.
E. "LCR" shall mean LYONDELL-CITGO Refining Company Ltd., a Limited
Liability Company organized under the laws of the State of Texas.
F. "Person" shall mean any individual, entity (including, without
limitation, any corporation, partnership, trust, joint venture, association
or governmental body) or group (as defined in Sections 14(d)(3) or
15(d)(2) of the Exchange Act and the rules and regulations thereunder);
provided, however, that Person shall not include the Company or LCR, any of
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their subsidiaries, any employee benefit plan of the Company or LCR or any
of their majority-owned subsidiaries or any entity organized, appointed or
established by the Company,
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LCR or such subsidiaries for or pursuant to the
terms of any such plan.
G. "Registration Statement" shall mean ARCO's registration statement on
Form S-3 (Registration No. 33-53481) with respect to the Exchangeable
Notes.
H. "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.
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. 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
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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.
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 Participating Plans,
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 Trust
Beneficiary under a particular Participating Plan.
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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
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 ▇▇▇▇▇'▇ Investor Service, Inc. and its successors
("Moody's) or the equivalent of such ratings by S&P or ▇▇▇▇▇'▇ 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
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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 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;
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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;
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 such corporation that it
may have organized and incorporated) for the purpose of acquiring and
holding title to any
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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 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 all
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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
15
by reason of inaction in the absence of such written directions 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.
16
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
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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 Benefits be
paid to the extent the Trustee, rather than the Company, pays the 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
17
resignation of the Trustee, the Trustee shall file with the 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
18
more permanent type investments or to permit any distributions or 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 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 Benefits hereunder prior
to the distribution to the Trust Beneficiary of such Benefits, the Trustee
shall, on receipt by the
19
Trustee of such opinion or actual notice 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 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
20
be reimbursed by the Company within 30 days after the Company's receipt of a
▇▇▇▇ from the Trustee for any fees and expenses paid from the Trust assets. To
the extent the Company fails to
21
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 Benefits under the
Participating Plans. However, the Company's liability under the Participating
Plans shall be reduced or offset to the extent Benefit payments are made from
the Trust.
22
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 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
23
Benefits to Trust Beneficiaries, shall hold the Trust assets for the benefit of
the Company's general creditors, and shall resume payments of 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 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 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 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.
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
-------------
24
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 (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 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.
25
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 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.
26
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 one or more of the
Participating Plans pursuant to Section 5 of this Trust Agreement. The amount of
such excess in the particular Plan 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.
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 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
27
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
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
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 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
28
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 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.
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
29
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.
SECTION 33
GOVERNING LAW
This Trust Agreement shall be governed by and construed under the laws of
the State of Massachusetts 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.
30
IN WITNESS WHEREOF, the parties have caused this Trust Agreement to be
executed as of the date first written above.
ATTEST: LYONDELL PETROCHEMICAL COMPANY
_________________________________ By:_____________________________________
Assistant Secretary ▇▇▇▇▇▇▇ ▇. ▇▇▇▇
Vice President, Human Resources
ATTEST: STATE STREET BANK AND TRUST
COMPANY
_________________________________ By:_____________________________________
31
APPENDIX A
TO
LYONDELL PETROCHEMICAL COMPANY
NON-EMPLOYEE DIRECTORS BENEFIT PLANS
TRUST AGREEMENT
Lyondell Petrochemical Company Retirement Plan for Non-Employee Directors
Lyondell Petrochemical Company Elective Deferral Plan for Non-Employee Directors
32