Exhibit 10.15
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DEFERRED COMPENSATION AND BENEFITS TRUST AGREEMENT
Dated as of January 11, 1999
By and Among
SUNOCO, INC.
BANKERS TRUST COMPANY
and
TOWERS, PERRIN, ▇▇▇▇▇▇▇ & ▇▇▇▇▇▇, INC.
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TABLE OF CONTENTS
ARTICLE I Definitions...................................................................... 2
1.1 Account....................................................................... 2
1.2 Board of Directors............................................................ 2
1.3 Change in Control............................................................. 2
1.4 Chief Executive Officer....................................................... 2
1.5 Committee..................................................................... 2
1.6 Company....................................................................... 2
1.7 Compensation Committee........................................................ 2
1.8 Continuing Director........................................................... 2
1.9 Control Transaction........................................................... 2
1.10 ERISA......................................................................... 3
1.11 Group......................................................................... 3
1.12 Insolvent..................................................................... 3
1.13 Legal Defense Fund............................................................ 3
1.14 Payment Schedule.............................................................. 3
1.15 Plan.......................................................................... 3
1.16 Plan Participant.............................................................. 3
1.17 Potential Change in Control................................................... 3
1.18 Recordkeeper.................................................................. 4
1.19 Required Funding Amount....................................................... 4
1.20 Trust......................................................................... 4
1.21 Trust Agreement............................................................... 4
1.22 Trust Corpus.................................................................. 4
1.23 Trustee....................................................................... 4
ARTICLE II The Plans....................................................................... 4
2.1 Plans & Agreements Subject to Trust........................................... 4
2.2 Liability for Payments........................................................ 5
ARTICLE III Establishment of Trust.......................................................... 5
3.1 Principal of Trust............................................................ 5
3.2 Term and Revocability......................................................... 5
3.3 Grantor Trust................................................................. 5
3.4 Segregation of Funds; Rights of Creditors..................................... 5
ARTICLE IV Administration of Trust......................................................... 6
4.1 Authority and Duties of Committee............................................. 6
4.2 Action by the Committee....................................................... 6
4.3 Records, Reporting and Disclosure............................................. 6
4.4 Bonding....................................................................... 7
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ARTICLE V Potential Change in Control; Change in Control................................... 7
5.1 Potential Change in Control................................................... 7
5.2 Change in Control............................................................. 7
5.3 Method of Funding............................................................. 7
5.4 Additional Contributions; Sufficiency of Funds................................ 8
5.5 Additional Plans.............................................................. 8
5.6 Calculation of Required Funding Amount........................................ 8
5.7 Payment of Required Funding Amount............................................ 9
(a) Interest on Delinquent Payments......................................... 9
(b) Discount Rate for Distributions Due Later............................... 9
(c) Schedule of Accounts.................................................... 9
5.8 Legal Defense Fund............................................................ 9
ARTICLE VI Investment Authority............................................................. 10
6.1 Authority of Trustee.......................................................... 10
(a) Investments............................................................. 10
(b) Sale of Property........................................................ 10
(c) Settlement of Debts..................................................... 11
(d) Exercising Rights as Holder of Securities............................... 11
(e) Use of Discretion With Respect to Company Securities.................... 11
(f) Depositary Function..................................................... 12
(g) Borrowing Powers; Encumbering Trust Assets.............................. 12
(h) Enforcement Authority................................................... 12
(i) Execution of Instruments................................................ 12
(j) Registration and Transfer of Investments................................ 12
(k) Uninvested Assets....................................................... 12
(l) General................................................................. 12
6.2 Investment Following Change in Control........................................ 12
6.3 Investment of Trust Income.................................................... 13
6.4 Losses Charged Against Trust Corpus........................................... 13
ARTICLE VII Payments to Plan Participants and Their Beneficiaries........................... 13
7.1 Appointment of Recordkeeper................................................... 13
7.2 Maintenance of Records........................................................ 13
7.3 Company Information........................................................... 14
7.4 Payment Schedule.............................................................. 14
7.5 Entitlement to Benefits....................................................... 15
7.6 Payment of Benefits........................................................... 15
7.7 Notice of Benefits Payable.................................................... 15
7.8 Source of Payments............................................................ 16
7.9 Tax on Amounts Held in Trust Prior to Distribution............................ 16
7.10 Indemnification of Recordkeeper by Company................................... 16
7.11 Resignation, Discharge & Replacement of Recordkeeper.......................... 17
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ARTICLE VIII Payments to Trust Beneficiary When Company Is Insolvent....................... 17
8.1 Responsibilities of Trustee in Insolvency..................................... 17
8.2 Resumption of Discontinued Payments........................................... 18
ARTICLE IX Payments to the Company......................................................... 18
9.1 Reversion of Funds to Company................................................. 18
9.2 Limitation Upon Company's Ability to Direct Payments.......................... 19
ARTICLE X Powers, Duties & Responsibilities of Trustee..................................... 19
10.1 Limitation of Liability....................................................... 19
10.2 Maintenance of Administrative Records......................................... 19
10.3 Reimbursement of Costs & Expenses............................................. 20
10.4 Indemnification of Trustee by Company......................................... 20
10.5 Institution of Litigation..................................................... 21
10.6 Powers of Trustee............................................................. 21
ARTICLE XI Resignation and Removal of Trustee.............................................. 21
11.1 Resignation of Trustee........................................................ 21
11.2 Removal and Substitution of Trustee........................................... 21
11.3 Appointment of Successor Trustee ............................................. 22
11.4 Failure to Appoint Successor Trustee.......................................... 22
11.5 Statements of Account Upon Removal or Resignation............................. 22
11.6 Transfer of Trust Corpus to Successor Trustee................................. 22
ARTICLE XII Authorization................................................................... 23
12.1 Actions by Board of Directors; Compensation Committee......................... 23
12.2 Actions by Chief Executive Officer; Treasurer................................. 23
12.3 Other Actions of Company...................................................... 23
12.4 Actions by the Committee...................................................... 23
ARTICLE XIII Notices....................................................................... 23
13.1 Notices....................................................................... 23
ARTICLE XIV Miscellaneous.................................................................. 24
14.1 No Contract of Employment..................................................... 24
14.2 Rights of Plan Participants................................................... 24
14.3 Amendment or Waiver........................................................... 25
(a) Amendment Prior to Change in Control.................................... 25
(b) Amendment Following Change in Control................................... 25
14.4 Severability of Provisions.................................................... 25
14.5 Non-Alienability of Benefits.................................................. 26
14.6 Further Assurances............................................................ 26
14.7 Successors, Heirs, Assigns, and Personal Representatives...................... 26
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14.8 Headings and Captions........................................................ 26
14.9 Gender and Number............................................................ 26
14.10 Payments to Incompetent Persons, Etc. ....................................... 26
14.11 Governing Law; Situs of Trust................................................ 26
14.12 Counterparts................................................................. 26
14.13 Acceptance by Trustee ....................................................... 26
14.14 Insurance Policies........................................................... 26
14.15 Survival..................................................................... 27
14.16 Entire Understanding......................................................... 27
Schedules:
Schedule 2.1 - Benefit Plans and Other Arrangements Subject to Trust
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DEFERRED COMPENSATION AND BENEFITS TRUST AGREEMENT
This Deferred Compensation and Benefits Trust Agreement, dated as of
January 11, 1999, (the "Trust Agreement"), is by and among SUNOCO, INC., a
Pennsylvania corporation (the "Company"), BANKERS TRUST COMPANY, a New York
banking corporation (the "Trustee"), and TOWERS, PERRIN, ▇▇▇▇▇▇▇ & ▇▇▇▇▇▇, INC.,
a Pennsylvania corporation (the "Recordkeeper").
W I T N E S S E T H
WHEREAS, the Company (or certain of its subsidiaries) is or
may become obligated under certain employee benefit plans, agreements, or other
arrangements, to make payments to certain persons who at any time prior to the
occurrence of a change in control of the Company were employees of the Company
(or certain of its subsidiaries) (the "Plan Participants") and their
beneficiaries; and
WHEREAS, in order to: (1) provide an alternative source of
funds to assist the Company in meeting its liabilities under the applicable
employee benefit plans, agreements, or other arrangements; and (2) assure that
future payment of such amounts would not be improperly withheld in the event of
a change in control of the Company, the Company desires to establish a Trust
(the "Trust") and, in its discretion, to contribute to the Trust assets that
shall be held therein, subject to the claims of the Company's creditors in the
event of the Company's insolvency until paid to Plan Participants and their
beneficiaries in the manner and at the times specified in the applicable
employee benefit plans, agreements, or other arrangements; and
WHEREAS, it is the intention of the parties that this Trust
shall constitute an unfunded arrangement and shall not affect the status of the
plans as unfunded plans maintained to provide deferred compensation for a select
group of management or highly compensated employees for purposes of Title I of
the Employee Retirement Income Security Act of 1974, as amended ("ERISA"); and
WHEREAS, Bankers Trust Company is willing to act as Trustee of
the Trust, and Towers ▇▇▇▇▇▇ is willing to act as Recordkeeper of the Trust,
upon all of the terms and conditions hereinafter set forth.
NOW THEREFORE, in consideration of the mutual terms,
covenants, and conditions herein contained, the mutual benefits to be derived
hereunder, and other good and valuable consideration, the receipt and adequacy
of which are hereby acknowledged, and intending to be legally bound, the parties
hereto agree as follows:
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ARTICLE I
Definitions
As used in this Trust Agreement, the following terms shall have the
meanings herein specified:
1.1 Account - shall have the meaning provided herein at Section 5.7(c).
1.2 Board of Directors - shall mean the Board of Directors of Sunoco,
Inc., or any successor thereto.
1.3 Change in Control - shall mean the occurrence of any of the
following events or transactions:
(a) Continuing Directors cease, within one year of a
Control Transaction, to constitute a majority of the Board of
Directors of Sunoco, Inc. (or of the Board of Directors of any
successor to Sunoco, Inc. or to all or substantially all of its
assets); or
(b) any entity, person or Group acquires shares of
Sunoco, Inc. in a transaction or series of transactions that
results in such entity, person or Group directly or indirectly
owning beneficially more than twenty percent (20%) of the
outstanding voting shares of Sunoco, Inc.
1.4 Chief Executive Officer - shall mean the Chief Executive Officer of
Sunoco, Inc. as of the date of reference.
1.5 Committee - shall mean the administrative committee consisting of
three (3) or more persons, not necessarily employees of the Company, appointed
prior to a Change in Control by the Chief Executive Officer to administer the
Sunoco, Inc. Special Executive Severance Plan. Upon the occurrence of any Change
in Control, both the size and the membership of the Committee shall remain
unchanged and shall continue unchanged for a period of at least eighteen (18)
months following such Change in Control. In the event one or more members of the
Committee resigns or otherwise terminates his or her membership in the Committee
after a Change in Control, the remaining members of the Committee shall appoint
a replacement by simple majority vote.
1.6 Company - shall have the meaning set forth in the introduction to
this Trust Agreement.
1.7 Compensation Committee - shall have the meaning provided herein at
Section 2.1.
1.8 Continuing Director - shall mean a director who was a member of the
Board of Directors immediately prior to a Control Transaction which results in a
Change in Control.
1.9 Control Transaction - shall mean any of the following transactions
or any combination thereof:
(a) any tender offer for or acquisition of capital
stock of Sunoco, Inc.;
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(b) any merger, consolidation, or sale of all or
substantially all of the assets of Sunoco, Inc.; or
(c) the submission of a nominee or nominees for the
position of director of Sunoco, Inc. by a shareholder or a Group of
shareholders in a proxy solicitation or otherwise.
1.10 ERISA - shall have the meaning set forth in the introduction to
this Trust Agreement.
1.11 Group - shall mean persons who act in concert as described in
Sections 13(d)(3) and/or 14(d)(2) of the Securities Exchange Act of 1934, as
amended.
1.12 Insolvent or Insolvency - shall mean, with respect to the Company,
that either:
(a) the Company is unable to pay its debts as they
become due; or
(b) the Company is subject to a pending proceeding as
a debtor under the United States Bankruptcy Code.
1.13 Legal Defense Fund - shall have the meaning provided herein at
Section 5.8.
1.14 Payment Schedule - shall have the meaning provided herein at
Section 7.4.
1.15 Plan - shall have the meaning provided herein at Section 2.1.
1.16 Plan Participant - shall have the meaning set forth in the
introduction to this Trust Agreement.
1.17 Potential Change in Control - shall mean the occurrence of any of
the following events or transactions:
(a) any person (other than Sunoco, Inc., or any
affiliate or subsidiary thereof) makes a tender offer for capital
stock of Sunoco, Inc.;
(b) any person:
(1) becomes the beneficial owner, directly
or indirectly, of capital stock of Sunoco, Inc. in an
amount which requires the filing of Schedule 13D or
its equivalent form pursuant to the Rules and
Regulations under the Securities Exchange Act of 1934
as from time to time amended; and
(2) indicates in such Schedule 13D or
equivalent filing that the purpose of such capital
stock acquisition is part of a plan or proposal that
reasonably could lead to a Change in Control of
Sunoco, Inc. ;
(c) the submission of a nominee or nominees for the
position of director of Sunoco, Inc. by a shareholder or Group of
shareholders in a proxy solicitation or otherwise which, in its
judgment, the Board of Directors by subsequent adoption of a
resolution, determines might result in a Change in Control of
Sunoco, Inc.;
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(d) any person files a pre-merger notification for
the acquisition of capital stock of Sunoco, Inc. pursuant to the
▇▇▇▇-▇▇▇▇▇-▇▇▇▇▇▇ Act; or
(e) the Board of Directors in its judgment determines
by adoption of a resolution that a Potential Change in Control of
Sunoco, Inc. for purposes of this Trust Agreement has occurred.
1.18 Recordkeeper - shall have the meaning set forth in the
introduction to this Trust Agreement.
1.19 Required Funding Amount - shall mean the aggregate of the amounts
described in the following subparagraphs (a) and (b) of this Section 1.19:
(a) except as otherwise provided in Schedule 2.1
hereof, an amount sufficient to provide all benefits accrued for
each Plan Participant (and any beneficiaries) under the Plans
(including any interest or earnings due on such accrual) through
the date of the contribution, to the extent not previously
contributed; and
(b) an amount sufficient to pay all fees and expenses
of administering and enforcing the Trust Agreement and the Plans
that are or thereafter may become due, according to the respective
terms and provisions of such Plans as of the date of reference.
1.20 Trust - shall have the meaning set forth in the introduction to
this Trust Agreement.
1.21 Trust Agreement - shall have the meaning set forth in the
introduction to this Trust Agreement.
1.22 Trust Corpus - shall mean the amounts delivered to the Trustee
pursuant to the terms hereof, less amounts distributed from the Trust pursuant
to the terms hereof, plus all income earned by the Trust, in whatever form held
or invested as provided herein.
1.23 Trustee - shall have the meaning set forth in the introduction to
this Trust Agreement.
ARTICLE II
The Plans
2.1 Plans & Agreements Subject to Trust. The plans, agreements, and
other arrangements that are subject to this Trust (each a "Plan" and,
collectively the "Plans") are listed on Schedule 2.1 hereto. Prior to a Change
in Control of the Company, the Compensation Committee of the Board of Directors
of the Company (the "Compensation Committee") may from time to time designate
additional such plans, agreements, and other arrangements to be subject to this
Trust, or delete
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any Plan from this Trust. The Company shall immediately notify the Trustee and
the Recordkeeper in writing of any such changes.
2.2 Liability for Payments. The Company (or certain of its
subsidiaries) shall continue to be liable to the Plan Participants to make all
payments required under the terms of the Plans to the extent such payments have
not been made pursuant to this Trust Agreement. Distributions made from the
Trust to or for Plan Participants in respect of the Plans pursuant to Article
VII hereof, shall, to the extent of such distributions, satisfy the Company's
(or certain of its subsidiaries') obligation to pay benefits to such Plan
Participants under the Plans.
ARTICLE III
Establishment of Trust
3.1 Principal of Trust. The Company hereby deposits with the Trustee in
trust the sum of One Hundred Dollars ($100.00) in cash which shall become the
principal of the Trust to be held, administered and disposed of by the Trustee
as provided in this Trust Agreement.
3.2 Term and Revocability. The Trust hereby established is revocable by
the Company, but shall become irrevocable upon the occurrence of a Change in
Control. At any time prior to a Change in Control of the Company, this Trust may
be terminated by the Compensation Committee. Upon or after a Change in Control
of the Company, this Trust shall not terminate until the date on which Plan
Participants and their beneficiaries are no longer entitled to benefits pursuant
to the terms of the Plans. Upon termination of the Trust any assets remaining in
the Trust shall be returned to the Company.
3.3 Grantor Trust . The Trust is intended to be a grantor trust, of
which the Company is the grantor, within the meaning of subpart E, part I,
subchapter J, chapter 1, subtitle A of the Internal Revenue Code of 1986, as
amended, and shall be construed accordingly, and nothing herein shall be
construed to subject this Trust to ERISA.
3.4 Segregation of Funds; Rights of Creditors. The principal of the
Trust, and any earnings thereon shall be separate and apart from other funds of
the Company and shall be used exclusively for the uses and purposes of Plan
Participants and general creditors as herein set forth. Plan Participants and
their beneficiaries shall have no preferred claim on, or any beneficial
ownership interest in, any assets of the Trust. Any rights created under the
Plans and this Trust shall be mere unsecured contractual rights of Plan
Participants and their beneficiaries against the Company. Any assets held by the
Trust will be subject to the claims of the Company's general creditors under
federal and state law in the event of Insolvency.
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ARTICLE IV
Administration of Trust
4.1 Authority and Duties of the Committee. It shall be the duty of the
Committee, on the basis of information supplied to it by the Company, to
determine
(a) the eligibility of each Plan Participant to receive
payment of benefits under this Trust with respect to each Plan; and
(b) the manner and time of payment of the benefits payable
hereunder.
The Recordkeeper shall determine, on behalf of the Committee, the
amount of any benefit payable under this Trust to which each Plan Participant
may be entitled. The Trustee, on behalf of the Company, shall make such payments
as the Committee instructs the Trustee to pay, to Plan Participants. The
Committee shall have the full power and authority to manage claims and appeals
as set forth in the respective Plan, and to construe, interpret and administer
such Plan in accordance with its terms and provisions.
Prior to any Change in Control, the non-employee members of the
Committee (if any) shall be compensated by the Company at a rate to be
determined by the Chief Executive Officer. Following a Change in Control, all
members of the Committee shall continue to be compensated for services performed
under this Trust Agreement at the rate in effect for any non-employee members
immediately preceding a Change in Control. Following a Change in Control, such
compensation shall be paid from the Trust assets.
4.2 Action by the Committee. A majority of the members of the Committee
shall constitute a quorum for the transaction of business at a meeting of the
Committee. Any action of the Committee may be taken upon the affirmative vote of
a majority of the members of the Committee at a meeting, or without a meeting by
mail, telegraph, telephone or electronic communication device; provided,
however, that all of the members of the Committee are informed of their right to
vote on the matter before the Committee and of the outcome of the vote thereon.
4.3 Records, Reporting and Disclosure. The Committee shall keep all
individual and group records relating to Plan Participants and former Plan
Participants and all other records necessary for the proper administration and
operation of the Trust. Such records shall be made available to the Company and
to each Plan Participant for examination during business hours except that a
Plan Participant shall examine only such records as pertain exclusively to the
examining Plan Participant and to the Plan, in general. The Committee shall
prepare and shall file as required by law or regulation all reports, forms,
documents and other items required by the Internal Revenue Code, and every other
applicable statute, each as amended, and all regulations thereunder (except
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that the Company, as payer of the benefits, shall prepare and distribute to the
proper recipients all forms relating to withholding of income or wage taxes,
Social Security taxes, and other amounts which may be similarly reportable).
All income, deductions and credits attributable to the Trust belong to
the Company and will be included on the Company's income tax returns. The
Company shall pay any federal, state, local, or other taxes imposed or levied
with respect to the assets and/or income of the Trust or any part thereof under
existing or future laws. Upon furnishing the Trustee with evidence reasonably
required by the Trustee of any such tax payments made directly by the Company,
the Company shall be entitled to receive reimbursement from the assets of the
Trust for the full amount of such taxes paid by it.
4.4 Bonding. The Committee shall arrange any bonding that may be
required by law, but no amount in excess of the amount required by law (if any)
shall be required by the Trust.
ARTICLE V
Potential Change in Control; Change in Control
5.1 Potential Change in Control. If a Potential Change in Control of
the Company occurs, the Company shall immediately notify the Trustee and
Recordkeeper and shall cause the Required Funding Amount to be remitted to the
Trustee as a contribution to the Trust. The Required Funding Amount shall be
paid to the Trust not later than thirty (30) days after the Potential Change in
Control.
5.2 Change in Control. If a Change in Control occurs, the Company shall
immediately notify the Trustee and Recordkeeper. The Company shall immediately
cause to be remitted to the Trustee, as an irrevocable contribution to the
Trust, an amount equal to the Required Funding Amount as of that date. The
Required Funding Amount shall be paid to the Trust not later than one (1) day
after the Change in Control.
5.3 Method of Funding. The contribution of the Required Funding Amount
shall be made in cash or in property acceptable to the Trustee having a fair
market value equal to the Required Funding Amount, or in a combination of the
two. The Board of Directors may determine that all or a portion of the Required
Funding Amount may be represented by a standby, irrevocable (except as provided
in Section 9.1) letter of credit against which the Trustee may draw sufficient
funds that, with the amounts contributed in cash or other property, will enable
the Trustee to make the payments due under the Plans, together with the fees and
expenses described in Section 5.1 above.
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5.4 Additional Contributions; Sufficiency of Funds. The Company shall
be obligated to continue to cause additional contributions (or increases to the
amount that may be drawn against the letter of credit) to be made as may be
necessary from time to time to insure that at all times following a Change in
Control, the Trust contains sufficient funds, on a current basis, to pay all
benefits due to the Plan Participants (or their designated beneficiaries) under
the Plans, together with the fees and expenses described in Section 5.1. The
Trustee shall be under no duty to determine the sufficiency, or to enforce the
making, of such contributions by the Company.
5.5 Additional Plans. In the event the Compensation Committee
designates additional Plans that are subject to this Trust Agreement, or the
Plans subject to this Trust Agreement are amended after a Potential Change in
Control or Change in Control of the Company, the Treasurer of the Company shall,
unless the Trust Corpus shall theretofore have been released pursuant to Section
9.1 hereof, recalculate the Required Funding Amount. If the amount so calculated
exceeds the fair market value of the assets then held in trust, the Company
shall promptly (and in no event later than thirty (30) days from the date of
such recalculation):
(a) pay to the Trustee an amount of cash (or property
acceptable to the Trustee having a fair market value equal to such
amount, or some combination thereof) equal to such excess; or
(b) increase the amount that may be drawn against the letter
of credit described in Section 5.3, above, to cover such excess.
If the Required Funding Amount so calculated is less than the fair
market value of the assets held in trust, the Trustee shall retain such
difference.
5.6 Calculation of Required Funding Amount. As soon as practicable, but
in no event later than fifteen (15) days following the occurrence of any
Potential Change in Control, the Treasurer of the Company shall compute the
Required Funding Amount. Immediately thereafter, the Recordkeeper shall review
the Treasurer's calculations of the Required Funding Amount (including without
limitation the calculations under Section 5.5 hereof). The Recordkeeper shall
complete its review prior to the thirtieth (30th) day following any Potential
Change in Control. If the Recordkeeper concludes that the amounts calculated by
the Treasurer are not sufficient to permit the Trustee to make all payments due
or to become due under the Plans, together with the fees and expenses described
in Section 5.1 above, the Treasurer shall increase the Required Funding Amount
to the amount so calculated by the Recordkeeper. The Company agrees not to
challenge the calculations of the Treasurer, and both the Company and the
Treasurer agree not to challenge the calculations of the Recordkeeper, and the
Trustee shall have no right or obligation to challenge or question such
calculation with regard to the Required Funding Amount (including, without
limitation, the amount
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determined under Section 5.5 hereof) upon and after a Potential Change in
Control or Change in Control of the Company. No Plan Participant shall have the
right to challenge the calculations of either the Treasurer or the Recordkeeper
with respect to the Required Funding Amount.
5.7 Payment of Required Funding Amount.
(a) Interest on Delinquent Payments. The Company agrees to pay
interest on any delinquent payment of the Required Funding Amount from
the date on which such payment is required to be made pursuant to this
Article V, based upon the daily average of the prime rate charged by
Trustee during the period of such deficiency.
(b) Discount Rate for Distributions Due Later. In determining
the Required Funding Amount with respect to any payment or series of
payments expected to be due more than one (1) year after the date as of
which the Required Funding Amount is to be determined, the present
value of such payment or series of payments shall be calculated by
using a discount rate equal to one percentage point less than the then
lowest annual yield to maturity on United States Treasury obligations
having then remaining maturities approximately equal to the maturity of
the payment or payments being valued.
(c) Schedule of Accounts. Each payment by the Company pursuant
to this Article V shall be accompanied by a schedule delivered to the
Recordkeeper (as described in Section 7.4 hereof) of the individual
Plans for whose accounts such payment is being made, which schedule
sets forth the amounts delivered in respect of each of the Plans. The
Recordkeeper shall maintain in an equitable manner an account for each
Plan (the "Account"). Each Account shall consist of contributions to
and payments from the Trust Corpus which are allocable to the Plan, and
earnings thereon, less disbursements therefrom attributable to the
interest of the Plan in the entire Trust Corpus. On a monthly basis,
the Trustee shall advise the Recordkeeper in writing regarding the
actual amounts received by the Trust from the Company, and paid out
from the Trust, in respect of each of the Plans.
5.8 Legal Defense Fund. The Trustee shall establish a separate account
(the "Legal Defense Fund") to provide for the payment of legal expenses and
liabilities incurred by the Trustee with respect to which it is entitled to
reimbursement under Sections 10.3 and 10.4 and to protect Plan Participants'
rights to benefits after a Potential Change in Control or Change in Control of
the Company. The Company shall contribute cash to the Legal Defense Fund with
the Required Funding Amount in an amount equal to ten percent (10%) of the
Required Funding Amount. The Legal Defense Fund shall not be used to pay
benefits due under any Plan.
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Following a Potential Change in Control or Change in Control of the
Company, the Trustee shall pursue all claims for benefits by individual Plan
Participants against the Company, other than those which the Trustee reasonably
believes to be frivolous, and shall not compromise or settle any such claim,
unless approved by the affected Plan Participants.
ARTICLE VI
Investment Authority
6.1 Authority of Trustee. The Trustee and any successor thereto
appointed hereunder shall be a corporate professional trustee which is not an
affiliate of the Company but which has equity in excess of One Hundred Million
Dollars ($100,000,000.00). Discretionary authority for the management and
control of the assets of the Trust shall be retained by the Trustee, and all
rights associated with assets of the Trust shall be exercised by the Trustee or
the person designated by the Trustee, and shall in no event be exercisable by,
or rest with, the Plan Participants.
The assets of the Trust shall be invested and re-invested, without
distinction between principal and income, at such time or times in such
investments, pursuant to such investment strategies or courses of action and in
such shares and proportions as the Trustee, in its sole discretion shall deem
advisable, subject to the applicable investment policies and related guidelines
established by the Committee. These investment policies and related guidelines
shall be communicated by the Committee to the Trustee. The Committee shall
monitor compliance with such investment policies and related guidelines.
Subject to the applicable investment policies and related guidelines,
and subject to the requirements of Section 6.2 hereof after a Change in Control,
the Trustee shall have the following powers and discretions in addition to those
conferred by law:
(a) Investments. To invest and reinvest the Trust Corpus in:
(1) stock or rights to acquire stock (of any
classification, including common and preferred stocks), or a
registered investment fund, including a fund for which the
Trustee serves as investment manager and/or custodian;
(2) bonds and other obligations issued by such
entities as the Trustee deems appropriate (including, without
limitation, securities or obligations issued by the Company);
(3) other property (real, personal or mixed); and/or
(4) interests in investment companies and investment
trusts;
(b) Sale of Property. To sell, exchange, convey, transfer or
dispose of, and also to grant options with respect to, any property,
whether real or personal, at any time held by
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it by private contract or by public auction, for cash or upon credit,
or partly for cash and partly for credit, as the Trustee may deem best,
and no person dealing with the Trustee shall be bound to see to the
application of the purchase money or to inquire into the validity,
expediency or propriety of any such sale or other disposition;
(c) Settlement of Debts. To compromise, compound and settle
any debt or obligation (except claims by Plan Participants for benefits
under any Plan) due to or from the Trust and to reduce the rate of
interest thereon, to extend or otherwise modify, or to foreclose upon,
default or otherwise enforce or act with respect to any such obligation
as the Trustee may deem advisable;
(d) Exercising Rights as Holder of Securities. With respect to
stocks, bonds or securities:
(1) to vote, in person or by general or limited proxy, any
stocks or other securities at any time held in the Trust
Corpus, at any meeting of stockholders or security holders, in
respect to any business which may come before the meeting;
(2) to exercise any options appurtenant to any stocks,
bonds or other securities for the conversion thereof into
other stocks, bonds or securities;
(3) to exercise or sell any conversion or subscription
rights appurtenant to any stocks, bonds or other securities at
any time held in the Trust Corpus, and to make any and all
necessary payments therefor;
(4) to join in, and to approve, or to dissent from and to
oppose, any corporate act or proceeding, including any
reorganization, recapitalization, consolidation, merger,
dissolution, liquidation, sale of assets or other action by or
plan in respect of corporations or properties, the stocks or
securities of which may at any time be held in the Trust
Corpus;
(5) to deposit with any committee or depository, pursuant
to any plan or agreement of protection, reorganization,
consolidation, sale, merger, or other readjustment, any
property held in the Trust Corpus; and
(6) to make payment from the Trust Corpus of any charges
or assessments imposed by the terms of any such plan or
agreement;
(e) Use of Discretion With Respect to Company Securities.
Without limiting the foregoing, with respect to stocks, bonds or
securities of the Company, the Trustee shall exercise the powers under
Section 6.1(d) at its discretion.
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(f) Depositary Function. To accept and hold any securities or
other property received by it under any of the provisions of this
Article VI, whether or not the Trustee would be authorized hereunder
then to invest therein;
(g) Borrowing Powers; Encumbering Trust Assets. To borrow
money upon such terms and conditions as the Trustee shall deem
advisable to carry out the purposes of the Trust and to pledge
securities or other property of the Trust Corpus in repayment of any
such loan;
(h) Enforcement Authority. To enforce any right, obligation or
claim and in general to protect in any way the interest of the Trust
Corpus, either before or after default, and in case the Trustee shall,
in its discretion, consider such action for the best interest of the
Trust Corpus, to abstain from the enforcement of any right, obligation
or claim and to abandon any property, whether real or personal which at
any time may be held by the Trustee;
(i) Execution of Instruments. To make, execute, acknowledge
and deliver any and all deeds, leases, assignments, transfers,
conveyances and any and all other instruments necessary or appropriate
to carry out any powers herein granted;
(j) Registration and Transfer of Investments. To cause any
investments from time to time held by it hereunder to be registered in,
or transferred into, its name as Trustee or the name of its nominee or
nominees, and with or without designation of fiduciary capacity, to
retain securities at a qualified central depository or Federal Reserve
Bank or to retain any investments unregistered or in form permitting
transfer by delivery, but the books and records of the Trustee shall at
all times show that all such investments are part of the Trust Corpus;
(k) Uninvested Assets. To hold any part or all of the Trust
Corpus uninvested; and
(l) General. To do all acts which may be necessary or proper
and to exercise any and all of the powers of the Trustee under this
Trust Agreement upon such terms and conditions as the Trustee may deem
in the best interests of the Trust Corpus.
6.2 Investment Following Change in Control. Upon and after a Change in
Control, the Trustee shall use its good faith efforts to invest or reinvest all
or such part of the Trust Corpus as the Trustee believes prudent under the
circumstances (taking into account, among other things, the anticipated cash
requirements for the payment of benefits under the Plans communicated to the
Trustee by the Recordkeeper) solely in:
(a) direct obligations of the United States of America or
agencies thereof;
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(b) obligations unconditionally and fully guaranteed as to
principal and interest by the United States of America; or
(c) any registered investment fund, including a fund for which
the Trustee serves as investment manager and/or custodian, established
and maintained as a vehicle for short-term investment.
With respect to such investments, the Trustee shall have the powers and
discretion set forth in Section 6.1 hereof, in addition to those conferred by
law; provided, however, that the Trustee shall not be liable for: (1) any losses
to the Trust resulting from compliance with the investment and diversification
limitations imposed by this Section 6.2, or (2) any loss of income due to
liquidation of any investment which liquidation is necessary to make payments or
to reimburse expenses under the terms of this Trust Agreement.
6.3 Investment of Trust Income. During the term of this Trust, income
received by the Trust, net of expenses and taxes, shall be accumulated and
reinvested.
6.4 Losses Charged Against Trust Corpus. All losses of income or
principal in respect of, and expenses (including without limitation taxes and,
as provided in Article XI hereof, any expenses of the Trustee) charged against,
the Trust Corpus shall be for the account of the Company and the Company shall
be obligated to reimburse the Trust Corpus following a Potential Change in
Control or a Change in Control of the Company for any loss in principal
amount of, or expense charged against, the Trust Corpus except to the extent
that the fair market value of the Trust Corpus as of that date equals or exceeds
the Required Funding Amount as of that date. The Trustee shall promptly notify
the Company in writing of the amount of such reimbursement. The Company agrees
that, upon receipt of such notice, it will deliver to the Trustee to be held in
the Trust an amount in cash equal to any reimbursement amount specified by the
Trustee, together with interest from the date of receipt of such notice based
upon the daily average of the prime rate charged by the Trustee.
ARTICLE VII
Payments to Plan Participants and Their Beneficiaries
7.1 Appointment of Recordkeeper. It is recognized that the Trustee
shall have no responsibility hereunder for the continued retention of the
Recordkeeper and/or any responsibility assigned to the Recordkeeper or its
performance thereof. The Company shall pay the Trustee for all fees and expenses
of the Recordkeeper.
7.2 Maintenance of Records. Except for the records dealing solely with
the Trust Corpus and its investment, which shall be maintained by the Trustee,
the Recordkeeper shall maintain all the
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records contemplated by this Trust Agreement, including the maintenance of
records for the separate Accounts of each Plan under this Trust Agreement and
the maintenance of Plan Participants' Plan interests. The Recordkeeper shall
maintain individual records with respect to each Plan Participant's interest
under each Plan.
7.3 Company Information. As soon as practicable, but in no event later
than thirty (30) days following the establishment of this Trust, the
Recordkeeper shall identify to the Company in writing the information deemed
necessary to enable the Recordkeeper to determine the amount of benefits payable
to or with respect to each Plan Participant in each Plan, including any benefits
payable after the Plan Participant's death, and the recipient. The Company shall
furnish the information needed by the Recordkeeper in order to determine the
amount of any such benefit, and shall deliver to the Recordkeeper a letter of
instructions:
(a) describing the terms of each Plan;
(b) enclosing a copy of each Plan;
(c) listing the names, addresses, and Hay points or grade
levels under the salary administration program then in effect, for the
Plan Participants (and beneficiaries) covered by each Plan;
(d) setting forth the timing, form of distributions, and
formula or other methodology for determining the amounts to be paid to
each Plan Participant and beneficiary under each Plan; and
(e) instructing the Recordkeeper how and from whom to get any
other information needed to compute benefits under each Plan.
The Company shall regularly, at least annually, furnish revised
up-dated information to the Recordkeeper. In the event the Company refuses or
neglects to provide updated Plan Participant information, as contemplated
herein, the Recordkeeper shall be entitled to rely upon the most recent
information furnished to it by the Company.
7.4 Payment Schedule. Within forty-five (45) days following a Change in
Control or Potential Change in Control (or when the Company otherwise makes
contributions to the Trust), the Recordkeeper, on behalf of the Company, shall
deliver to the Trustee a schedule (the "Payment Schedule") that indicates:
(a) in the case of all Plans, except the Special Employee
Severance Plan, the amounts payable (including the fees and expenses
incurred by the Plans) in respect of each Plan Participant (and his or
her beneficiaries); and
(b) in the case of the Special Employee Severance Plan, the
amount reasonably expected to be payable thereunder, in accordance with
the applicable minimum limits
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established in Schedule 2.1 hereof, together with an explanation of the
assumptions used by the Recordkeeper in performing its calculation.
The Payment Schedule shall be updated by the Recordkeeper as necessary,
but on at least an annual basis, in order to reflect changes therein. Following
the termination of employees entitled to benefits under the Special Employee
Severance Plan, the Recordkeeper will update the Payment Schedule to indicate
those Plan Participants to whom benefits have become payable. Except as
otherwise provided herein, the Trustee shall make payments to the Plan
Participants and their beneficiaries in accordance with such Payment Schedule
and shall pay such fees and expenses, unless paid by the Company. The Trustee
shall make provision for the reporting and withholding of any federal, state or
local taxes that may be required to be withheld with respect to the payment of
benefits pursuant to the terms of the Plans and shall pay amounts withheld to
the appropriate taxing authorities or determine that such amounts have been
reported, withheld and paid by the Company.
7.5 Entitlement to Benefits. The entitlement of a Plan Participant or
his or her beneficiaries to benefits under the Plans shall be determined
promptly by the Committee, and any claim for such benefits shall be considered
and reviewed by the Committee under the procedures set out in the Plans. As soon
as is reasonably practicable following any such review or determination by the
Committee, the Committee shall give notice of its findings to the Recordkeeper,
together with updated information as needed, in order to permit the Recordkeeper
to make a final determination of the benefits to be paid. Upon notice of such
findings by the Committee, the Recordkeeper promptly will make a final
determination of the amounts payable and will notify the Committee.
7.6 Payment of Benefits. The Company may make payment of benefits
directly to Plan Participants or their beneficiaries as they become due under
the terms of the Plans. The Company shall notify the Trustee and Recordkeeper of
its decision to make payment of benefits directly prior to the time amounts are
payable to Participants or their beneficiaries. Within thirty (30) days of
making of any such direct payment, the Company shall provide the Trustee and the
Recordkeeper with a certification, in a form acceptable to each, indicating the
date and amount of such direct payment of benefits by the Company.
7.7 Notice of Benefits Payable. The Recordkeeper shall notify the Plan
Participant or the beneficiary of a deceased Plan Participant that the Plan
Participant's benefits under a Plan have become payable. Such notice shall
include the amount of such benefits, the manner of payment (or, where
appropriate, the various payment options available) and the name, address and
social security number of the Plan Participant. Neither the Trustee nor the
Recordkeeper shall have any responsibility for determining whether any Plan
Participant or beneficiary has become entitled to any benefit under any of the
Plans, or whether any Plan Participant or beneficiary has died, and
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each of the Trustee and the Recordkeeper shall be entitled to rely solely upon
information furnished by the Committee.
7.8 Source of Payments. All benefits payable from the Trust Corpus to a
Plan Participant or his beneficiary under a Plan shall be paid solely from the
Account of such Plan. Upon the satisfaction of all liabilities under a Plan in
respect of Plan Participants under a Plan, the Recordkeeper shall prepare and
deliver to the Trustee a certification showing the balance, if any, remaining in
the Account for such Plan. Such balance shall thereupon be reallocated ratably
by the Recordkeeper to the Accounts of other Plans covered by this Trust
(including Accounts which may have previously been reduced to a zero balance) in
the ratio that liabilities in respect of each such Plan bear to the total
liabilities of all such Plans. Upon the satisfaction of all liabilities of the
Company under all Plans, the Recordkeeper shall prepare and deliver a
certification to the Trustee and the Trustee shall thereupon distribute the
Trust Corpus to the Company.
7.9 Tax on Amounts Held in Trust Prior to Distribution. 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 with respect to which the time for appeal has
expired, or the receipt by the Trustee of a substantially unqualified opinion of
tax counsel selected by the Trustee, which determination determines, or which
opinion opines, that the Plan Participants or any particular Plan Participant is
subject to federal income taxation on amounts held in trust hereunder prior to
the distribution to the Plan Participants or Plan Participant of such amounts,
the Trustee, on receipt by the Trustee of such opinion or notice of such
determination, shall pay to each Plan Participant the portion of the Trust
Corpus includable in such Plan Participant's federal gross income, less
applicable taxes. The Trustee shall not be required to obtain such opinion of
tax counsel unless the Internal Revenue Service, the Company, or the
Recordkeeper suggests to the Trustee that any of the Plan Participants may be
subject to income taxation on amounts held in the Trust prior to a distribution
hereunder and Trustee has doubts with respect thereto.
7.10 Indemnification of Recordkeeper by Company. The Company agrees to
indemnify and hold harmless the Recordkeeper from and against any and all
damages, losses, claims, fees or expenses as incurred (including expenses of
investigation and fees and disbursements of counsel to the Recordkeeper) arising
out of or in connection with the performance by the Recordkeeper of its duties
hereunder. In the event that payment is made to the Recordkeeper from the Trust
Corpus, as provided in Section 7.1 hereof, the Trustee shall promptly notify the
Company in writing of the amount of such payment. The Company agrees that, upon
receipt of such notice, it will deliver to the Trustee to be held in the Trust
an amount in cash equal to any payments made from the Trust Corpus to the
Trustee pursuant to this Section 7.10, together with interest from the date of
receipt of such notice based upon the daily average of the prime rate charged by
the Trustee. The
16
failure of the Company to transfer any such amount shall not in any way impair
the Recordkeeper's right to indemnification, reimbursement and payment pursuant
to Section 7.1 hereof or this Section 7.10.
7.11 Resignation, Discharge & Replacement of Recordkeeper. The
Recordkeeper may resign and be discharged from its duties hereunder at any time
by giving notice in writing of such resignation to the Company, or if a Change
in Control shall previously have occurred, to the Company and the Trustee,
specifying a date (not less than sixty (60) days after the giving of such
notice) when such resignation shall take effect. Promptly after such notice, the
Company, or if a Change in Control shall previously have occurred, the
Continuing Directors (or, if there are no Continuing Directors then by
affirmative vote of at least three fourths (3/4) of the current Board of
Directors) shall appoint a successor recordkeeper, such successor recordkeeper
to become Recordkeeper hereunder upon the resignation date specified in such
notice. If a successor recordkeeper is not appointed within sixty (60) days
after such notice, the Recordkeeper shall be entitled, at the expense of the
Company, to petition a United States District Court or any court of competent
jurisdiction in the state in which the Recordkeeper maintains its principal
place of business to appoint its successor. The Recordkeeper shall continue to
serve until its successor accepts the responsibility of recordkeeper. The
Company, or if a Change in Control shall previously have occurred, the
Continuing Directors (or, if there are no Continuing Directors then by
affirmative vote of at least three fourths (3/4) of the current Board of
Directors) may at any time substitute a new recordkeeper by giving fifteen (15)
days' notice thereof to the Recordkeeper then acting. In the event of such
removal or resignation, the Recordkeeper shall provide its successor with the
records and information in its possession relating to the performance of its
duties under this Trust Agreement.
On or after a Change in Control, any successor recordkeeper appointed
under this Section 7.11, shall be an actuarial firm (or other third party
providing such services) by reputation and experience comparable to, and at
least as well-recognized as, the former Recordkeeper.
ARTICLE VIII
Payments to Trust Beneficiary When Company Is Insolvent
8.1 Responsibilities of Trustee in Insolvency. At all times during the
continuance of this Trust as provided in Section 3.4 hereof, the principal and
income of the Trust shall be subject to claims of general creditors of Company
under federal and state law, as set forth below:
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(a) The Board of Directors and the Chief Executive Officer of
the Company shall have the duty to immediately inform the Trustee in
writing of the Company's Insolvency. If a person claiming to be a
creditor of the Company alleges in writing to the Trustee that the
Company has become Insolvent, the Trustee shall determine whether the
Company is Insolvent and, pending such determination, the Trustee shall
discontinue payment of benefits to Plan Participants or their
beneficiaries.
(b) Unless the Trustee has actual knowledge of the Company's
Insolvency, or has received notice from the Company or a person
claiming to be a creditor alleging that the Company is Insolvent, the
Trustee shall have no duty to inquire whether the Company is Insolvent.
The Trustee may in all events rely on such evidence concerning the
Company's solvency as may be furnished to the Trustee and that provides
the Trustee with a reasonable basis for making a determination
concerning the Company's solvency.
(c) If at any time the Trustee has determined that the Company
is Insolvent, the Trustee shall discontinue payments to Plan
Participants or their beneficiaries and shall hold the assets of the
Trust for the benefit of the Company's general creditors. Nothing in
this Trust Agreement shall in any way diminish any rights of Plan
Participants or their beneficiaries to pursue their rights as general
creditors of the Company with respect to benefits due under the Plans
or otherwise.
(d) The Trustee shall resume the payments of benefits to Plan
Participants or their beneficiaries in accordance with Article VII of
this Trust Agreement only after the Trustee has determined that the
Company is not Insolvent (or is no longer Insolvent).
8.2 Resumption of Discontinued Payments. Provided that there are
sufficient assets, if the Trustee discontinues the payment of benefits from the
Trust pursuant to Section 8.1 hereof and subsequently resumes such payments, the
first payment following such discontinuance shall include the aggregate amount
of all payments due to Plan Participants or their beneficiaries under the terms
of the Plans for the period of such discontinuance, less the aggregate amount of
any payments made to Plan Participants or their beneficiaries by the Company in
lieu of the payments provided for hereunder during any such period of
discontinuance.
ARTICLE IX
Payments to the Company
9.1 Reversion of Funds to Company. In the event the Company delivers
the Required Funding Amount to the Trustee because of a Potential Change in
Control, the Trust Corpus shall be returned to the Company one (1) year after
delivery of the Required Funding Amount to the Trustee (or earlier if this Trust
is terminated pursuant to Section 3.2 hereof, less than one (1) year following a
18
Potential Change in Control) if no Change in Control shall have occurred during
such one-year period, and the Board of Directors determines, and so certifies to
the Trustee, that a Change in Control is not imminent. Such one-year period
shall recommence in the event of and upon the date of any subsequent Potential
Change in Control. If another Potential Change in Control should occur after the
Trust Corpus has been returned to the Company as provided in this Section 9.1,
the Company shall deliver a new Required Funding Amount to the Trustee pursuant
to Article V above. The Company shall notify the Trustee of the occurrence of a
Potential Change in Control and Change in Control and the Trustee may rely on
such notice.
9.2 Limitation Upon Company's Ability to Direct Payments. After the
Trust has become irrevocable, the Company shall have no right or power to direct
the Trustee to return to the Company or to divert to others any of the Trust
assets before all payments of benefits have been made to Plan Participants and
their beneficiaries pursuant to the terms of the Plans.
ARTICLE X
Powers, Duties & Responsibilities of Trustee
10.1 Limitation of Liability. The duties and responsibilities of the
Trustee shall be limited to those expressly set forth in this Trust Agreement,
and no implied covenants or obligations shall be read into this Trust Agreement
against the Trustee. The Trustee shall not be liable for any act taken or
omitted to be taken hereunder if taken or omitted to be taken by it in good
faith. The Trustee shall also be fully protected in relying upon any notice
given hereunder which it in good faith believes to be genuine and executed and
delivered in accordance with this Trust Agreement. The Trustee may consult with
legal counsel to be selected by it, and the Trustee shall not be liable for any
action taken or suffered by it in good faith in accordance with the advice of
such counsel.
10.2 Maintenance of Administrative Records. The Trustee shall maintain
such books, records and accounts as may be necessary for the proper
administration of the Trust Corpus and shall render to the Company on a monthly
basis commencing on the first day of the month following the date this Trust
Agreement was created until the termination of the Trust (and as of the date of
such termination), an accounting with respect to the Trust Corpus as of the end
of such month (and as of the date of such termination). After a Change in
Control or a Potential Change in Control has occurred, and once the Required
Funding Amount has been contributed to the Trust, the Recordkeeper shall receive
a monthly accounting, and the Plan Participants may request an annual accounting
with respect to the Trust Corpus. Unless the Company (or any Plan Participant
after a Change in Control of the Company has occurred) shall have filed with the
Trustee written exceptions or objections to any such statement and account
within one hundred eighty (180) days after receipt thereof, the Company and all
Plan Participants shall be deemed to have approved such statement and account,
and in such case the Trustee shall be forever released and
19
discharged with respect to all matters and things reported in such statement and
account as though it had been settled by a decree of a court of competent
jurisdiction in an action or proceeding to which the Company and all Plan
Participants were parties.
The Trustee shall have the right, at the expense of the Trust, to apply
at any time to a court of competent jurisdiction for judicial settlement of any
account of the Trustee not previously settled as herein provided or for the
determination of any question of construction or for instructions. In any such
action or proceeding it shall be necessary to join as parties only the Trustee
and the Company (although the Trustee may also join such Plan Participants as it
may deem appropriate), and any judgment or decree entered therein shall be
conclusive.
10.3 Reimbursement of Costs & Expenses. The Trustee shall be reimbursed
by the Company for its reasonable expenses incurred in connection with the
performance of its duties hereunder (including, without limitation, legal fees
and expenses under Section 10.5 hereof) and shall be paid such fees for the
performance of such duties as may be agreed upon in writing from time to time
between the Company and the Trustee. After a Change in Control of the Company
has occurred, the fees of the Trustee shall be determined by the application of
the current rates then charged by the Trustee for the provision of the types of
investment and Trustee services contemplated in this Trust Agreement to Trusts
of a similar character. The Trustee's entitlement to reimbursement hereunder
shall not be affected by the resignation or removal of the Trustee or the
termination of the Trust.
10.4 Indemnification of Trustee by Company. The Company agrees to
indemnify and hold harmless the Trustee from and against any and all
liabilities, damages, losses, claims or expenses as incurred (including expenses
of investigation and fees and disbursements of counsel to the Trustee and any
taxes imposed on the Trust Corpus or income of the Trust) arising out of or in
connection with the performance by the Trustee of its duties hereunder. Any
amount payable to the Trustee under Section 10.3 hereof, or under this Section
10.4, and not previously paid by the Company shall be paid by the Company
promptly upon demand therefor by the Trustee or, if the Trustee so chooses in
its sole discretion, from the Trust Corpus. In the event that payment is made
hereunder to the Trustee from the Trust Corpus, the Trustee shall promptly
notify the Company in writing of the amount of such payment. The Company agrees
that, upon receipt of such notice, it will deliver to the Trustee to be held in
the Trust an amount in cash equal to any payments made from the Trust Corpus to
the Trustee pursuant to Section 10.3 hereof, or pursuant to this Section 10.4,
together with interest from the date of receipt of such notice based upon the
daily average of the prime rate charged by the Trustee. The failure of the
Company to transfer any such amount shall not in any way impair the Trustee's
right to indemnification, reimbursement and payment pursuant to Section 10.3
hereof, or pursuant to this Section 10.4.
20
10.5 Institution of Litigation. Following a Potential Change in Control
or a Change in Control of the Company, the Trustee is specifically authorized
and required to take such action as may be necessary or appropriate, including
the institution of litigation or other legal process, to enforce the Company's
obligations hereunder or under the Plans on behalf of either itself or the Plan
Participants (or their beneficiaries), and any expenses thus incurred by the
Trustee shall be paid or reimbursed by the Company pursuant to Section 10.3 and
10.4 hereof.
10.6 Powers of Trustee. The Trustee shall have, without exclusion, all
powers conferred on Trustees by applicable law, unless expressly provided
otherwise herein; provided, however, that if an insurance policy is held as an
asset of the Trust upon direction of the Company, the Trustee shall have no
power to name a beneficiary of the policy other than the Trust, to assign the
policy (as distinct from conversion of the policy to a different form) other
than to a successor trustee, or to loan to any person the proceeds of any
borrowing against such policy. Notwithstanding any powers granted to the Trustee
pursuant to this Trust Agreement or applicable law, the Trustee shall not have
any power that could give this Trust the objective of carrying on a business and
dividing the gains therefrom, within the meaning of Section 301.7701-2 of the
Procedure and Administrative Regulations promulgated pursuant to the Internal
Revenue Code.
ARTICLE XI
Resignation and Removal of Trustee
11.1 Resignation of Trustee. The Trustee may resign at any time by
written notice to the Company, which shall be effective sixty (60) days after
receipt of such notice unless the Company and Trustee agree otherwise. If a
Change in Control shall previously have occurred, the Trustee shall give such
resignation notice, in writing, to the Company and the Continuing Directors,
specifying a date (not less than sixty (60) days after the giving of such
notice) when such resignation shall take effect.
11.2 Removal and Substitution of Trustee. The Company, or if a Change
in Control shall previously have occurred, the Continuing Directors (or, if
there are no Continuing Directors, then by affirmative vote of at least
three-fourths (3/4) of the then-current Board of Directors), may at any time
substitute a new Trustee by giving fifteen (15) days notice thereof to the
Trustee then acting.
11.3 Appointment of Successor Trustee. Promptly after the giving of
notice of resignation by the Trustee under Section 11.1 hereof, the Company, or
if a Change in Control shall previously have occurred, the Continuing Directors
(or, if there are no Continuing Directors, then by affirmative vote of at least
three-fourths (3/4) of the then-current Board of Directors), shall appoint a
successor trustee such successor trustee to become Trustee hereunder upon the
resignation date specified in such notice.
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On or after a Change in Control, any successor trustee appointed or
otherwise designated under any provision of this Article XI, shall be a bank
trust department or other third party that, on the date of appointment:
(a) may be granted corporate trustee powers under the federal
or state law of the United States of America and is, in fact, duly
qualified and authorized to do trust business;
(b) has total assets of at least Ten Billion Dollars
($10,000,000,000); and
(c) has a credit rating from ▇▇▇▇▇'▇ Investors Service of "A"
or better (or other comparable credit rating from another similarly
well-recognized credit rating service).
11.4 Failure to Appoint Successor Trustee. If a successor trustee is
not appointed:
(a) in the case of resignation of the Trustee, within sixty
(60) days after the giving of the Trustee's notice of resignation under
Section 11.1 hereof; or
(b) in the case of removal of the Trustee, within fifteen (15)
days after the giving of notice of such removal to the Trustee under
Section 11.3 hereof,
then the Trustee shall be entitled to petition a United States District
Court, or any court of competent jurisdiction in the state in which the Trustee
maintains its principal place of business, to appoint a successor trustee or
provide instructions. All expenses incurred by the Trustee in connection with
such petition shall be allowed as administrative expenses of the Trust under
Section 10.5 hereof.
11.5 Statements of Account Upon Removal or Resignation. In the event of
such removal or resignation, the Trustee shall duly file with the Company and,
on and after a Change in Control, the Continuing Directors (or, if there are no
Continuing Directors then, the Board of Directors) a written statement or
statements of accounts and proceedings as provided in Section 10.2 hereof for
the period since the last previous annual accounting of the Trust, and if
written objections to such account are not filed as provided in Section 10.2
hereof, the Trustee shall to the maximum extent permitted by applicable law be
forever released and discharged from all liability and accountability with
respect to the propriety of its acts and transactions shown in such Account.
11.6 Transfer of Trust Corpus to Successor Trustee. Upon resignation or
removal of the Trustee and appointment of a successor trustee all assets shall
subsequently be transferred to the successor trustee The transfer shall be
completed within sixty (60) days after receipt of notice of resignation, removal
or transfer, unless the Company or the Continuing Directors (or, if there are no
Continuing Directors, then by affirmative vote of at least three fourths (3/4)
of the then-current Board of Directors) extends the time limit. The Trustee
shall continue to serve until the successor trustee accepts the Trust and
receives delivery of the Trust Corpus.
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ARTICLE XII
Authorization
12.1 Actions by Board of Directors; Compensation Committee. Any action
of the Board of Directors or by the Compensation Committee pursuant to this
Trust Agreement shall be evidenced by a resolution adopted by the Board of
Directors (or a duly authorized committee thereof) or the Compensation Committee
that is certified to the Trustee by the Secretary or an Assistant Secretary of
the Company under its corporate seal, and the Trustee shall be fully protected
in acting in accordance with such resolution.
12.2 Actions by Chief Executive Officer; Treasurer. Any action of the
Chief Executive Officer or Treasurer pursuant to this Trust Agreement shall be
evidenced by a written notice or direction to such effect over the signature of
such officer, and the Trustee and the Recordkeeper each shall be fully protected
in acting in accordance with such notices or directions.
12.3 Other Actions of Company. Any action of the Company pursuant to
this Trust Agreement shall be evidenced by a written notice or direction to such
effect over the signature of any officer or other representative of the Company
who shall have been certified to the Trustee by the Chief Executive Officer,
President, Treasurer or Secretary (or any Assistant Secretary) of the Company as
having such authority. The Chief Executive Officer, President, Treasurer or
Secretary (or any Assistant Secretary) of the Company shall provide to the
Trustee in writing from time to time the names and specimen signatures of the
officers and other representatives authorized to act on behalf of the Company.
The Trustee and the Recordkeeper each shall be fully protected in acting in
accordance with such notices or directions.
12.4 Actions by the Committee. Any action of the Committee pursuant to
this Trust Agreement shall be evidenced by:
(a) a resolution adopted by a majority vote of the members of
such Committee, that is certified to the Trustee by the Secretary (or
any Assistant Secretary) of the Committee; or
(b) a written notice or direction to such effect over the
signatures of a majority of the members of such Committee, who shall
have been certified to the Trustee by the Secretary (or any Assistant
Secretary) of the Committee as having such authority. The Secretary (or
any Assistant Secretary) of the Committee shall provide to the Trustee
in writing the names and specimen signatures of the members of the
Committee as such may be constituted from time to time.
The Trustee and the Recordkeeper each shall be fully protected in
acting in accordance with such resolutions, notices or directions of the
Committee.
ARTICLE XIII
Notices
13.1 Notices. All notices, requests, reports, demands and waivers to or
upon the respective parties hereto to be effective shall be in writing, by
messenger, by overnight courier or by registered
23
or certified mail, postage prepaid and return receipt requested, and shall be
deemed to have been duly given or made upon:
(a) delivery by hand; or
(b) upon receipt.
Such communications shall be addressed and directed to the parties
listed below (except where this Trust Agreement expressly provides that it be
directed to another) as follows, or to such other address or recipient for a
party as may be hereafter notified by such party hereunder:
If to the Company (or any directors or officers thereof), or to the Committee:
SUNOCO, INC.
Ten Penn Center, 27th Floor
▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Attention: General Counsel
If to the Trustee:
BANKERS TRUST COMPANY
Street Address: Mailing Address
▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇ ▇.▇. ▇▇▇ ▇▇▇, ▇▇▇▇ ▇▇▇▇ ▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
Vice President
If to the Recordkeeper:
TOWERS, PERRIN, ▇▇▇▇▇▇▇ & ▇▇▇▇▇▇, INC.
Centre Square East
▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Attention: Sunoco, Inc. Retirement Plan Actuary
c/o Philadelphia Consulting Office Manager
If to a Plan Participant, to the address of such Plan Participant provided by
the Recordkeeper.
ARTICLE XIV
Miscellaneous
14.1 No Contract of Employment. Neither the establishment of this
Trust, nor any modification thereof, nor the payment of any benefits in
connection herewith, shall be construed as giving any Plan Participant, or any
person whosoever, the right to be retained in the service of the Company, and
all Plan Participants shall remain subject to discharge to the same extent as if
this Trust had never been established.
14.2 Rights of Plan Participants. Nothing in this Trust Agreement shall
in any way diminish any rights of any Plan Participant to pursue his or her
rights as a general creditor of the Company (or certain of its subsidiaries)
under the Plans.
24
14.3 Amendment or Waiver.
(a) Amendment Prior to Change in Control. This Trust Agreement
may be amended only by a written instrument executed by the Trustee,
the Recordkeeper and the Company. In case of conflict between the terms
of this Trust Agreement and the terms of the Plans, the terms of the
Trust Agreement shall control; provided, however, that:
(1) provisions that, in the determination of the
Company, affect solely the Trustee may, at the option of both
the Trustee and the Company, be amended by a writing executed
only by the Company and the Trustee, with a copy of such
writing being provided to the Recordkeeper; and
(2) provisions that, in the determination of the
Company, affect solely the Recordkeeper may, at the option of
both the Recordkeeper and the Company, be amended by a writing
executed only by the Company and the Recordkeeper, with a copy
of such writing being provided to the Trustee.
(b) Amendment Following Change in Control. Upon and after a
Change in Control, and unless otherwise required by applicable statute
or regulation, the following rules will govern amendments and waivers:
(1) this Trust Agreement may not be amended except by
an instrument in writing signed on behalf of the parties
hereto together with the written consent of at least eighty
percent (80%) of the Plan Participants then entitled to
receive payments hereunder;
(2) the parties hereto, together with the consent of
not less than eighty percent (80%) of the Plan Participants
then entitled to receive payments hereunder, may at any time
waive compliance with any of the agreements or conditions
contained herein; and
(3) any agreement on the part of a party hereto or a
Plan Participant to any such waiver shall be valid if set
forth in an instrument in writing signed on behalf of such
party or Plan Participant.
14.4 Severability of Provisions. If any provision of this Trust
Agreement or the application thereof to any person or circumstances shall be
determined by a court of proper jurisdiction to be invalid or unenforceable,
such invalidity or unenforceability shall not affect either:
(a) the application of such provision to persons or
circumstances other than those as to which it is held invalid or
unenforceable; or
(b) any other provisions of this Trust Agreement (in which
case, this Trust Agreement shall be construed and enforced as if such
invalid or unenforceable provisions had not been included),
and this Trust Agreement shall be otherwise valid and enforced to the fullest
extent permitted by law.
25
14.5 Non-Alienability of Benefits. Except as otherwise required by law,
the interests of the Plan Participants and their beneficiaries under this Trust
may not be anticipated, assigned (either at law or in equity), alienated,
pledged, encumbered or subjected to attachment, garnishment, levy, execution or
other legal or equitable process.
14.6 Further Assurances. The Company shall, at any time and from time
to time, upon the reasonable request of the Trustee and/or Recordkeeper, execute
and deliver such other instruments and do such further acts as may be necessary
or proper to effectuate the purposes of this Trust Agreement.
14.7 Successors, Heirs, Assigns, and Personal Representatives. This
Trust Agreement shall be binding upon the administrators, successors and
permitted assigns of the parties.
14.8 Headings and Captions. The headings and captions herein are
provided for reference and convenience only, shall not be considered part of the
Trust Agreement, and shall not be employed in the construction of the Trust
Agreement.
14.9 Gender and Number. Except where otherwise clearly indicated by
context, the masculine and the neuter shall include the feminine and the neuter,
the singular shall include the plural, and vice-versa.
14.10 Payments to Incompetent Persons, Etc. Any benefit payable
hereunder to or for the benefit of a minor, an incompetent person, or other
person incapable of receipting therefor shall be deemed paid when paid to such
person's guardian or to the party providing or reasonably appearing to provide
for the care of such person, and such payment shall fully discharge the Company,
the Recordkeeper, the Trustee and all other parties with respect thereto.
14.11 Governing Law; Situs of Trust. TO THE EXTENT NOT PREEMPTED BY
APPLICABLE FEDERAL LAW, THIS TRUST SHALL BE CONSTRUED AND ENFORCED ACCORDING TO
THE LAWS OF THE STATE OF NEW YORK (WITHOUT REFERENCE TO ANY PROVISIONS OF SUCH
LAWS REGARDING CHOICE OF LAWS OR CONFLICTS OF LAWS). THE SITUS OF THIS TRUST
SHALL BE NEW YORK COUNTY, NEW YORK.
14.12 Counterparts. This Trust Agreement may be executed in any number
of counterparts, each of which shall be deemed an original, and such
counterparts shall constitute but one and the same instrument.
14.13 Acceptance by Trustee. The Trustee by joining in the execution of
this Trust Agreement hereby signifies its acceptance of the Trust hereby
created.
14.14 Insurance Policies. Anything in this Trust Agreement to the
contrary notwithstanding, the Company may direct the Trustee to purchase one or
more paid up life insurance policies insuring the lives of one or more Plan
Participants. In such event, the Trustee will purchase such policies and shall
not be responsible under this Trust Agreement, or otherwise, in any way
26
respecting the acquisition, form, terms, payment provisions or issuer of such
contract (other than the execution of any documents incidental thereto, upon
discretion of the Company). The proceeds of any policy shall be credited to the
applicable Plan upon death of the insured Plan Participant.
14.15 Survival. The Company agrees that the provisions of Sections 10.3
and 10.4 hereof shall be binding on its successors and assigns and shall survive
termination, amendment or restatement of this Trust Agreement, or the
resignation or removal of the Trustee, and that this paragraph shall be
construed as a contract between the Company and the Trustee according to the
laws of the State of New York.
14.16 Entire Understanding. This Trust Agreement sets forth the entire
understanding of the parties with respect to the subject matter hereof and
supersedes any and all prior agreements, arrangements and understandings
relating thereto. This Trust Agreement shall be binding upon and inure to the
benefit of the parties and their respective successors and legal
representatives.
[COUNTERPART SIGNATURE PAGES FOLLOW]
27
IN WITNESS WHEREOF, the parties have executed this Trust Agreement as
of the date first written above.
ATTEST: SUNOCO, INC.
(the "Company")
By: s/ELRIC ▇. ▇▇▇▇▇▇ By: s/▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
----------------- --------------------
Name: Elric ▇. ▇▇▇▇▇▇ Name: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
Title: Assistant Secretary Title: Treasurer
ATTEST: BANKERS TRUST COMPANY
(the "Trustee")
By: s/▇▇▇▇▇ ▇▇▇▇▇▇▇▇ By: s/▇▇▇▇▇ ▇▇▇▇▇▇
---------------- --------------
Name: ▇▇▇▇▇ ▇▇▇▇▇▇▇▇ Name: ▇▇▇▇▇ ▇▇▇▇▇▇
Title: Vice President and Counsel Title: Vice President
ATTEST: TOWERS, PERRIN, ▇▇▇▇▇▇▇ &
▇▇▇▇▇▇, INC.
(the "Recordkeeper")
By: s/▇▇▇▇▇▇ ▇. ▇▇▇▇▇ By: s/▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇▇▇▇
----------------- ------------------------
Name: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇ Name: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇▇▇▇
Title: Director of Actuarial Operations Title: Principal
28
COMMONWEALTH OF PENNSYLVANIA )
) ss.:
COUNTY OF PHILADELPHIA )
On the 12th day of January, in the year one thousand nine hundred and
ninety-nine (1999), before me personally came ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇ to me known,
who being by me duly sworn, did depose and say: that he/she resides in
Philadelphia, PA; that he/she is the Treasurer of SUNOCO, INC., the corporation
described in and which executed the above instrument; that he/she knows the seal
of said corporation; that the seal affixed to said instrument is such corporate
seal; that it was so affixed by order of the Board of Directors of said
corporation, and that he/she signed his/her name thereto by like order.
s/▇▇▇▇▇▇ ▇▇▇ ▇▇▇▇▇▇▇
--------------------
Notary Public
STATE OF NEW YORK )
) ss.:
COUNTY OF NEW YORK )
On the 27th day of January, in the year one thousand nine hundred and
ninety-nine (1999), before me personally came ▇▇▇▇▇ ▇▇▇▇▇▇ to me known, who
being by me duly sworn, did depose and say: that he/she resides in Syosset, New
York; that he/she is a Vice President of BANKERS TRUST COMPANY, the corporation
described in and which executed the above instrument; that he/she knows the seal
of said corporation; that the seal affixed to said instrument is such corporate
seal; that it was so affixed by order of the Board of Directors of said
corporation, and that he/she signed his/her name thereto by like order.
s/▇▇▇▇▇ ▇▇▇▇▇▇▇▇
----------------
Notary Public
COMMONWEALTH OF PENNSYLVANIA )
) ss.:
COUNTY OF PHILADELPHIA )
On the 15th day of January, in the year one thousand nine hundred and
ninety-nine (1999), before me personally came ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇▇▇▇ to me
known, who being by me duly sworn, did depose and say: that he/she resides in
New Jersey; that he/she is the Principal of TOWERS ▇▇▇▇▇▇, the corporation
described in and which executed the above instrument; that he/she knows the seal
of said corporation; that the seal affixed to said instrument is such corporate
seal; that it was so affixed by order of the Board of Directors of said
corporation, and that he/she signed his/her name thereto by like order.
s/▇▇▇▇▇▇ ▇. ▇▇▇▇
----------------
Notary Public
29
Schedule 2.1 to the Deferred Compensation and Benefits Trust Agreement
Benefit Plans and Other Arrangements Subject to Trust
(1) Sunoco, Inc. Executive Retirement Plan ("SERP");
(2) Sunoco, Inc. Deferred Compensation Plan;
(3) Sunoco, Inc. Pension Restoration Plan;
(4) Sunoco, Inc. Savings Restoration Plan.
(5) Sunoco, Inc. Special Executive Severance Plan;
(6) Executive Employment Agreements with:
(a) ▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
(b) ▇▇▇▇▇▇ ▇. ▇▇▇▇▇
(c) ▇▇▇▇▇ ▇. ▇▇▇▇▇▇
(7) The funding of the Sunoco, Inc. Special Employee Severance Plan
necessary to provide benefits in accordance with the terms of such Plan in the
event of a Potential Change in Control assuming the respective percentage of
each employee category listed in the table below shall be entitled to such
benefits under this Plan:
Percentage of Eligible Employees
Employee Category Deemed to Receive Benefits
Grades 11 to 13 25%
Grades 1 to 10 20%
Nonexempt salaried 20%
Hourly 10%
In the event of a Change in Control, the funding of the Sunoco, Inc.
Special Employee Severance Plan will be calculated on the basis of the benefits
reasonably expected to be payable under that Plan, but not less than the
percentages specified above.
(8) The entire funding for all the Indemnification Agreements with the
senior executives set forth below shall be Five Million Dollars
($5,000,000.00) in the aggregate upon a Potential Change in
Control, and an amount upon a Change in Control calculated on the
basis of the Indemnification Agreements with the following senior
executives:
(a) ▇▇▇▇▇▇ ▇. ▇▇▇▇▇, ▇▇. (j) ▇▇▇▇▇▇ ▇. ▇▇▇▇▇
(b) ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇ (k) ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇▇
(c) ▇▇▇▇▇▇▇ ▇.▇. ▇▇▇▇▇▇ (l) ▇▇▇ ▇. ▇▇▇▇'
(d) ▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇ (m) ▇▇▇▇ ▇. Naku
(e) ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇ (n) ▇▇▇▇▇▇ ▇. ▇▇▇▇▇
(f) ▇▇▇▇ ▇. ▇▇▇▇▇ (o) ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇, ▇▇.
(g) ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇ (p) ▇▇▇▇▇ ▇. ▇▇▇▇▇▇
(h) ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇ (q) ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
(i) ▇▇▇▇▇ ▇. ▇▇▇▇▇ (r) ▇▇▇▇▇▇▇ ▇. Valutas
30
