EXHIBIT 10.24.1
UNION CARBIDE CORPORATION
BENEFITS PROTECTION TRUST
TABLE OF CONTENTS
ARTICLE PAGE
FIRST: Definitions 2
SECOND: Creation of Trust 6
THIRD: Payments from the Trust 11
FOURTH: Management of Trust Assets 14
FIFTH: Administrative Powers 24
SIXTH: Insurance and Annuity Contracts 25
SEVENTH: Taxes, Expenses and Compensation of Trustee 28
EIGHTH: General Duties of Trustee and Investment
Director 30
NINTH: Indemnification 35
TENTH: No Duty To Advance Funds 35
ELEVENTH: Accounts 36
TWELFTH: Administration of the Plans; Communications 37
THIRTEENTH: Resignation or Removal of Trustee 39
FOURTEENTH: Amendment of Agreement; Termination of Trust 41
FIFTEENTH: Prohibition of Diversion 44
SIXTEENTH: Prohibition of Assignment of Interest 45
SEVENTEENTH: Affiliates 45
EIGHTEENTH: Miscellaneous 46
BENEFITS PROTECTION TRUST AGREEMENT
THIS AGREEMENT, made as of the 1st day of August 1989, by
and between UNION CARBIDE CORPORATION, a corporation organized
and existing under the laws of the State of New York (hereinafter
referred to as the "Company"), and MANUFACTURERS HANOVER TRUST
COMPANY, a corporation organized and existing under the laws of
the State of New York (hereinafter referred to as the "Trustee"),
W I T N E S S E T H :
WHEREAS, the Company has adopted the plans listed on
Schedule 1 (hereinafter referred to as defined in Schedule 1 or
collectively as the "Plans") and may adopt or enter into other
such Plans as will be listed from time to time on Schedule 1 and
may, from time to time, amend, modify or terminate any such Plan
in accordance with its terms; and
WHEREAS, the Company has adopted the plans, programs, and
policies listed on Schedule 2 (hereinafter referred to
collectively as the "Protected Plans") and may adopt or enter
into other such Protected Plans as will be listed from time to
time on Schedule 2 and may, from time to time, amend, modify, or
terminate any such Protected Plan in accordance with its terms;
and
WHEREAS, the Company desires to establish the Benefits
Protection Trust (hereinafter referred to as the "Trust") in
order to ensure that its employees, the employees of its
Participating Subsidiaries, and their beneficiaries will receive
the benefits which the Company is obligated to provide for them
or which they reasonably anticipate receiving pursuant to the
Protected Plans; and
WHEREAS, the Trust is intended to be a "grantor trust" with
the corpus and income of the Trust treated as assets and income
of the Company for federal income tax purposes pursuant to
Sections 671 through 678 of the Internal Revenue Code of 1986
(the "Code"), as amended; and
WHEREAS, the Company intends that the assets of the Trust
will be subject to the claims of creditors of the Company as
provided in Article FIFTEENTH; and
WHEREAS, the Company intends that the existence of the Trust
will not alter the characterization of the Plans as "unfunded"
and will not be construed to provide taxable income to any
participant under the Plans prior to actual payment of benefits
thereunder; and
WHEREAS, the Trustee is not a party to the Plans and makes
no representations with respect thereto, and all representations
and recitals with respect to the Plans shall be deemed to be
those of the Company;
NOW, THEREFORE, the Company and the Trustee agree as
follows:
FIRST: Definitions.
(a) Any term that is referenced in the Plans shall have in
this Agreement the same meaning ascribed to it in the Plans,
unless the context clearly indicates a different meaning.
(b) For purposes of this Agreement, an Unfriendly Change In
Control shall be deemed to occur if:
(1) a change in control of the Company would be
required to be reported in response to item 1(a) of the current
Report of Form 8-K, as in effect on the date hereof, pursuant to
Sections 13 or 15(d) of the Securities Exchange Act of 1934, as
amended (the "Exchange Act"), whether or not the Company is then
subject to such reporting requirement;
(2) there shall be consummated (A) any consolidation
or merger of the Company in which the Company is not the
continuing or surviving corporation or pursuant to which shares
of the Company's common stock would be converted into cash,
securities or other property, other than a merger of the Company
in which the holders of the Company's Common Stock immediately
prior to the merger have the same proportion and ownership of
common stock of the surviving corporation immediately after the
merger, or (B) any sale, lease, exchange or other transfer (in
one transaction or a series of related transactions) of all, or
substantially all, of the assets of the Company, provided, that
the divestiture of less than substantially all of the assets of
the Company in one transaction or a series of related
transactions, whether effected by sale, lease, exchange, spin-
off, sale of the stock or merger of a subsidiary or otherwise,
shall not constitute an Unfriendly Change in Control;
(3) any "person" or "group" within the meaning of
Sections 13(d) and 14(d)(2) of the Exchange Act (A) becomes the
"beneficial owner" as defined in Rule 13d-3 under the Exchange
Act of more than 20% of the then outstanding voting securities of
the Company, otherwise than through a transaction or transactions
arranged by, or consummated with the prior approval of, the Board
of Directors of the Company, or (B) acquires by proxy or
otherwise the right to vote for the election of directors, for
any merger or consolidation of the Company or for any other
matter or question more than 20% of the then outstanding voting
securities of the Company, otherwise than through an arrangement
or arrangements consummated with the prior approval of the Board
of Directors of the Company; or
(4) during any period of twenty-four consecutive
months (not including any period prior to the adoption of this
Agreement), Present Directors and/or New Directors cease for any
reason to constitute a majority of the Board of Directors of the
Company. For purposes of this Agreement, "Present Directors"
shall mean individuals who at the beginning of such consecutive
twenty-four month period were members of the Board and "New
Directors" shall mean any director whose election by the Board of
Directors of the Company or whose nomination for election by the
Company's stockholders was approved by a vote of at least two-
thirds of the Directors then still in office who were Present
Directors or New Directors.
Notwithstanding the foregoing, an Unfriendly Change of
Control shall not be deemed to occur pursuant to Subparagraph
(2), above, solely because twenty percent (20%) or more of the
combined voting power of the Company's then outstanding
securities is acquired by one or more employee benefit plans
maintained by the Company.
Provided, however, that a transaction or transactions
described in Subparagraphs (b)(1), (b)(2), or (b)(3) of this
Article FIRST arranged by, or consummated with the prior approval
of, a majority of the Present Directors and New Directors, shall
not be deemed an Unfriendly Change in Control if a majority of
the Present Directors and New Directors certify to the Trustee
that such transaction or transactions should not be deemed an
Unfriendly Change in Control.
The Company shall notify the Trustee in writing of the
occurrence of any event described in subparagraphs (b)(1) through
(b)(4) above, as soon as practicable after the Company first
learns of such event. The Trustee may rely upon such notice from
the Company in performing any of its obligations or taking any
discretionary action under this Agreement which is dependent upon
an Unfriendly Change in Control having occurred, provided,
however, that in the absence of such notice, the Trustee may rely
on its own determination, including opinion of counsel (who may
be counsel to the Company or the Trustee), that an Unfriendly
Change in Control has occurred, unless such a determination
arises out of the Trustee's gross negligence or willful
misconduct. The Trustee may also request that the Company
furnish evidence to determine or to enable the Trustee to
determine, whether an Unfriendly Change in Control has occurred.
The Trustee's determination whether an Unfriendly Change in
Control has occurred shall be binding and conclusive on all
Participants.
(c) "Threatened Change in Control" shall mean each of the
following events (but no event other than the following events),
except as otherwise provided below:
(1) Any persons as defined in Paragraph (b) above,
without the prior approval of a majority of the Present Directors
(A) becomes the beneficial owner, directly or indirectly, of
securities of the Company representing ten percent (10%) or more
of the combined voting power of the Company's then outstanding
voting securities, or (B) initiates a tender offer to acquire
securities of the Company representing twenty percent (20%) or
more of the combined voting power of the Company's then
outstanding voting securities; or
(2) The Board of Directors of the Company notifies the
Trustee in writing that a Threatened Change in Control exists.
Notwithstanding the foregoing, a Threatened Change in
Control shall not be deemed to occur pursuant to Subparagraph (1)
above solely because ten percent (10%) or more of the combined
voting power of the Company's then outstanding voting securities
is acquired by one or more employee benefit plans maintained by
the Company.
The Company shall notify the Trustee in writing of the
occurrence of any event described in subparagraph (c)(1) above as
soon as practicable after the Company first learns of such event.
The Trustee may rely upon such notice from the Company in
performing any of its obligations or taking any discretionary
action under this Agreement which is dependent upon a Threatened
Change in Control having occurred, provided, however, that in the
absence of such notice, the Trustee may rely on its own
determination, including opinion of counsel (who may be counsel
to the Company or the Trustee), that a Threatened Change in
Control has occurred, unless such a determination arises out of
the Trustee's gross negligence or willful misconduct. The
Trustee may also request that the Company furnish evidence to
determine or to enable the Trustee to determine, whether a
Threatened Change in Control has occurred. The Trustee's
determination whether a Threatened Change in Control has occurred
shall be binding and conclusive on all Participants.
(d) "Threatened Change in Control Period" shall mean the
period beginning on the date a Threatened Change of Control
occurs and ending on the earliest of
(1) If the Threatened Change in Control was caused by
an event described in Subparagraph (c)(1), on the date first
subsequent to the date on which the person referred to therein
does not own securities of the Company representing ten percent
(10%) or more of the combined voting power of the Company's then
outstanding voting securities, having terminated any tender offer
instituted by him; or
(2) If the Threatened Change in Control shall be
deemed to have occurred by reason of the notice described in
Subparagraph (c)(2), on the date that a majority of the Present
Directors and New Directors of the Board of Directors of the
Company shall have notified the Trustee in writing that the
Threatened Change in Control has terminated; or
(e) The date the Unfriendly Change in Control occurs.
SECOND: Creation of Trust. (a) The Company hereby
establishes with the Trustee and the Trustee hereby accepts a
trust consisting of the following property (subject to the rights
of the Company to withdraw such property pursuant to Paragraph
(f) of this Article SECOND):
(1) such cash or other property acceptable to the
Trustee as shall be paid or delivered to the Trustee from time to
time as contributions under the Equalization Plan, together with
the earnings, income, additions and appreciation thereon and
thereto (all of which is hereinafter called the "Equalization
Account");
(2) such cash and other property acceptable to the
Trustee as shall be paid or delivered to the Trustee from time to
time as contributions under the Supplemental Retirement Income
Plan, together with the earnings, income, additions and
appreciation thereon and thereto (all of which is hereinafter
referred to as the "SRIP Account");
(3) such cash or other property acceptable to the
Trustee as shall be paid or delivered to the Trustee from time to
time as contributions under the 1983 Bonus Deferral Plan,
together with the earnings, income, additions and appreciation
thereon and thereto (all of which is hereinafter called the "1983
Bonus Deferral Account");
(4) such cash or other property acceptable to the
Trustee as shall be paid or delivered to the Trustee from time to
time as contributions under the 1984 Bonus Deferral Plan,
together with the earnings, income, additions and appreciation
thereon and thereto (all of which is hereinafter called the "1984
Bonus Deferral Account");
(5) such cash or other property acceptable to the
Trustee as shall be paid or delivered to the Trustee from time to
time as contributions under the Key International Management
Plan, together with the earnings, income, additions and
appreciation thereon and thereto (all of which is hereinafter
called the "KIMP Account");
(6) such cash or other property acceptable to the
Trustee as shall be paid or delivered to the Trustee from time to
time to be used to satisfy future liabilities of the Company with
regard to the Severance Compensation Agreements of the Company,
together with the earnings, income, additions and appreciation
thereon and thereto (all of which is hereinafter called the
"Severance Compensation Agreement Account"); and
(7) cash in the amount of 1.5 million dollars
($1,500,000), together with the earnings thereon, and realized
and unrealized gains (net of any losses) attributable thereto,
(all of which is hereinafter called the "Benefits Protection
Account"). Neither the cash nor any other property held in the
Benefits Protection Account shall be available for payment of
benefits to participants and beneficiaries under the Plans.
(b) The Company may contribute to any Account an
irrevocable letter of credit (hereinafter referred to as a
"L/C"). The following provisions shall be applicable to any such
L/C:
(1) the L/C shall expire no sooner than two (2) years
from the date of issuance,
(2) the Company shall continue to maintain such L/C in
effect until it is replaced by cash or another irrevocable L/C or
the Company withdraws such L/C pursuant to Paragraph (f) of this
Article SECOND or this Agreement terminates, whichever occurs
first,
(3) the Company shall renew or replace such L/C at
least thirty (30) days before its expiration for an additional
period of one (1) year,
(4) if such L/C, or any renewal thereof, is not
renewed or replaced by a L/C delivered to the Trustee at least
thirty (30) days before the expiration of the predecessor L/C,
the Trustee may draw down the full amount of such L/C and hold
the proceeds pursuant to the terms of this Agreement,
(5) the Trustee may also draw down on such L/C at any
time the Trustee determines the proceeds of such L/C are
necessary to allow the Trustee to fulfill its obligations under
this Agreement,
(6) the proceeds of such L/C shall be available to the
Trustee upon the Trustee's presentation of its sight draft,
(7) the Company may, at any time, replace such L/C
with another irrevocable L/C having substantially similar terms,
or with an equal amount of cash, or any combination thereof,
(8) any L/C shall be issued by a bank (including the
Trustee) with assets in excess of $2 billion and net worth in
excess of $100 million, shall be reasonably acceptable to the
Trustee, and shall be in a form as shall be reasonably acceptable
to the Trustee.
(c) The Trustee, for investment purposes only, may
commingle all Trust assets and treat them as a single fund, but
the records of the Trustee at all times shall show the
percentages of the Trust allocable to the Equalization Account,
the SRIP Account, the 1983 Bonus Deferral Account, the 1984 Bonus
Deferral Account, the KIMP Account, the Severance Compensation
Agreement Account, the Benefits Protection Account and such other
Account(s) as may subsequently be established under this Trust
(herein referred to collectively as the "Accounts").
(d) The assets of the Accounts may be used to discharge
the obligations of the Company as follows:
(1) The assets of the Equalization Account may be used
to discharge the obligations of the Equalization Plan and, to the
extent the assets of the SRIP Account are insufficient, the
obligations of the Supplemental Retirement Income Plan;
(2) The assets of the SRIP Account may be used to
discharge the obligations of the Supplemental Retirement Income
Plan and, to the extent the assets of the Equalization Account
are insufficient, the obligations of the Equalization Plan.
(3) The assets of the 1983 Bonus Deferral Account may
be used to discharge the obligations of the 1983 Bonus Deferral
Plan and, to the extent the assets of the 1984 Bonus Deferral
Account are insufficient, the obligations of the 1984 Bonus
Deferral Plan.
(4) The assets of the 1984 Bonus Deferral Account may
be used to discharge the obligations of the 1984 Bonus Deferral
Plan and, to the extent the assets of the 1983 Bonus Deferral
Account are insufficient, the obligations of the 1983 Bonus
Deferral Plan.
(5) The assets of the KIMP Account shall be used to
discharge the obligations of the Key International Management
Plan.
(6) The assets of the Severance Compensation Agreement
Account shall be used to discharge the obligations of the Company
under the Severance Compensation Agreements.
(7) The assets of the Benefits Protection Account may
be used as set forth in Paragraph (c) of Article EIGHTH, and
Article SEVENTH.
(8) After an Unfriendly Change in Control occurs, the
assets of each Account, upon the termination of the Plan under
which such Account was established, and the satisfaction of all
liabilities with regard to such terminated Plan pursuant to
Paragraph (d) of Article FOURTEENTH, shall be distributed among
such remaining Account(s), other than the Benefits Protection
Account, that the Trustee determines may not have sufficient
assets to pay all future liabilities relating to such Account(s).
(e) The Company and the Trustee agree that the Trust
created herein shall not be revocable by the Company or by any
successor thereto during a Threatened Change in Control Period or
after an Unfriendly Change in Control, and is intended to be a
grantor trust under the provisions of Sections 671 through 678 of
the Internal Revenue Code of 1986, as amended.
(f) The Company may, from time to time, add to or withdraw
from the assets of the Trust, but subject to the termination
provisions of Article FOURTEENTH hereof, such withdrawal may not
reduce the property in the Benefits Protection Account of the
Trust, including any L/C, below 1.5 million dollars ($1,500,000).
The Company may add funds to the Trust at any time and shall
designate the Account to which such funds shall be credited. Any
such additional funds shall also be available to pay the fees and
expenses of the Trustee if the amounts transferred pursuant to
the Benefits Protection Account are exhausted. Notwithstanding
the foregoing, the Company shall not make any withdrawal from the
Trust during a Threatened Change in Control Period or after an
Unfriendly Change in Control until all liabilities of the Company
under the Plans are satisfied and all of the purposes of this
Agreement are fulfilled.
THIRD: Payments from the Trust. (a) Subject to Paragraph
(f) of Article SECOND hereof, Paragraph (b) of this Article THIRD
and Paragraph (b) of Article FIFTEENTH hereof, the Trustee, from
time to time upon receipt of direction from the Company prior to
an Unfriendly Change in Control (other than during a Threatened
Change in Control Period), shall make payments from the Trust, as
specified in such direction to such persons, in such manner and
in such amounts as the Company shall direct, and amounts paid
pursuant to such direction (or in accordance with Article SEVENTH
hereof) thereafter no longer shall constitute a part of the
Trust.
(b) The Company may, from time to time, prior to an
Unfriendly Change in Control, furnish the Trustee with certain
information regarding the participants and beneficiaries under
the Plans and the determination of the benefits under the Plans
(hereinafter referred to as "Participants Data"). The Trustee
shall be entitled to rely on the accuracy of the Participant Data
provided by the Company prior to an Unfriendly Change in Control,
and shall have no duty to verify the accuracy thereof. The
Company shall, during a Threatened Change in Control Period, and
after an Unfriendly Change in Control occurs, furnish the Trustee
with Participant Data at least once each Plan Year. Such
Participant Data shall include (1) names, addresses, dates of
birth, and social security numbers of each participant and
beneficiary in the Plans; (2) the amount and form of benefits
under each of the Plans of each participant and beneficiary if
such participant would retire or die as of either the last day of
such Plan Year or the last day of the Plan Year in which such
Participant attained age 62; (3) earnings history, compensation
(cash and deferred) and bonus history of each participant; (4)
amounts payable from the Retirement Program Plan for Employees of
Union Carbide Corporation and its Participating Subsidiary
Companies on behalf of each participant; (5) a schedule of the
estimated yearly cash payments under the Plans; and (6) any other
information regarding the Plan which the Trustee may reasonably
request or which the Company may deem necessary.
During a Threatened Change in Control Period or after an
Unfriendly Change in Control and notwithstanding any other
provisions of this Agreement, the Trustee shall, without
direction from the Company, to the extent funds are available in
the Trust for such purpose, make payments to participants and
beneficiaries in such manner and in such amounts as the Trustee
shall determine they are entitled to be paid under the Plans
based on the most recent Participant Data furnished to the
Trustee by the Company prior to an Unfriendly Change in Control
and any supplemental information furnished to the Trustee by a
participant or beneficiary upon which the Trustee may reasonably
rely in making such determination. The Trustee may make such
reasonable inquiry of the Company as is necessary to determine
whether any amounts that would otherwise be payable under this
Agreement have previously been paid by the Company, and may
reasonably rely on any information provided by the Company with
regard to such payment. A determination by the Trustee with
regard to a Participant's entitlement to payments under the terms
of this Agreement shall be binding as to all Participants and the
Company.
(c) In the event it shall be determined prior to an
Unfriendly Change in Control that the participants and/or
beneficiaries of the Plans are subject to any tax under the terms
of the Trust created hereunder, then the Trustee, upon receipt of
direction from the Company, shall make payments from the Trust to
such persons, in such manner and in such amounts as the Company
shall direct, for purposes of (1) paying the amount of Federal,
State and Local tax and interest and any penalties thereon which
such participants and/or beneficiaries may incur arising out of
such determination or (2) distributing the interests of
participants and beneficiaries in the Trust. In the event such
a determination is made after an Unfriendly Change in Control
occurs, then each participant or beneficiary who is subject to
such tax, may direct the Trustee, in writing, to make payments
from the Trust for either of the purposes set forth in section
(1) or (2) of the preceding sentence. The Trustee shall not make
the payments for the purposes set forth in the first sentence of
this Paragraph (c) without such written direction.
(d) Payments to participants and beneficiaries pursuant to
Paragraphs (b) and (c) of this Article THIRD shall be made by the
Trustee to the extent that Trust funds for such purposes are
sufficient to allow such payments. Subject to Paragraph (d) of
Article SECOND, in any month in which the Trustee determines that
a particular Account in the Trust does not have sufficient funds
to provide for the payment of all amounts otherwise payable to
participants and beneficiaries in such month under a particular
Plan, the amount otherwise payable to each such participant or
beneficiary under such Plan during such month shall be multiplied
by a fraction, the numerator of which is the amount of funds then
available for the payment of benefits under such Plan and the
denominator of which is the total of the benefits payable prior
to such reduction during such month to all participants and
beneficiaries under such Plan.
(e) After an Unfriendly Change in Control occurs the
Company shall make such contributions to the Trust created
hereunder as shall be necessary to ensure the assets of the Trust
shall at all times be sufficient to discharge the Company's
obligations under the Plans.
FOURTH: Management of Trust Assets. (a) Subject to
Paragraph (b) of this Article FOURTH, the Trustee, prior to an
Unfriendly Change in Control, shall have exclusive authority and
discretion to manage and control the Trust assets, and pursuant
to such authority and discretion, may exercise, from time to time
and at any time, the power:
(1) To invest and reinvest the Trust, without distinction
between principal and income, in shares of stock (whether common
or preferred) or other evidences of ownership, bonds, debentures,
notes or other evidences of indebtedness, unsecured or secured by
mortgages on real or personal property wherever situated
(including any part interest in a bond and mortgage or note and
mortgage whether insured or uninsured) and other property, or
part interest in property, real or personal, foreign or domestic,
whether or not productive of income or consisting of wasting
assets, and in order to reduce the rate of interest rate
fluctuations, contracts, as either buyer or seller, for the
future delivery of United States Treasury securities and
comparable Federal-Government-backed securities;
(2) To sell, convey, redeem, exchange, grant options for
the purchase or exchange of, or otherwise dispose of, any real or
personal property, 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 validity, expediency or
propriety of any such disposition;
(3) To manage, operate, repair and improve, and mortgage
or lease for any length of time any real property held in the
Trust; to renew or extend any mortgage, upon any terms the
Trustee may deem expedient; to agree to reduction of the rate of
interest or any other modification in the terms of any mortgage
or of any guarantee pertaining to it; to enforce any covenant or
condition of any mortgage or guarantee or to waive any default in
the performance thereof; to exercise and enforce any right of
foreclosure; to bid in property on foreclosure; to take a deed in
lieu of foreclosure with or without paying consideration therefor
and in connection therewith to release the obligation on the bond
secured by the mortgage; and to exercise and enforce in any
action, suit or proceeding at law or in equity any rights or
remedies in respect of any mortgage or guarantee;
(4) To exercise, personally or by general or limited
proxy, the right to vote any shares of stock, bonds or other
securities held in the Trust; to delegate discretionary voting
power to trustees of a voting trust for any period of time; and
to exercise, personally or by power of attorney, any other right
appurtenant to any securities or other property of the Trust;
(5) 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 depositary; and to retain any property
allotted to the Trust in any reorganization, recapitalization,
consolidation, merger or liquidation;
(6) To exercise or sell any conversion or subscription or
other rights appurtenant to any stock, security or other property
held in the Trust;
(7) To borrow from any lender (including the Trustee in
its individual capacity) money, in any amount and upon any
reasonable terms and conditions, for purposes of this Agreement,
and to pledge or mortgage any property held in the Trust to
secure the repayment of any such loan;
(8) To compromise, settle or arbitrate any claim, debt, or
obligation of or against the Trust; to enforce or abstain from
enforcing any right, claim, debt or obligation; and to abandon
any property determined by it to be worthless;
(9) To make loans of securities held in the Trust to
registered brokers and dealers upon such terms and conditions as
are permitted by applicable law and regulations, and in each
instance to permit the securities so lent to be registered in the
name of the borrower or a nominee of the borrower, provided that
in each instance the loan is adequately secured and neither the
borrower nor any affiliate of the borrower has discretionary
authority or control with respect to the assets of the Trust
involved in the transaction or renders investment advice with
respect to those assets; and
(10) To invest and reinvest any property in the Trust in
any other form or type of investment not specifically mentioned
in this Paragraph (a) of Article FOURTH, so long as such form or
type of investment is a form or type of investment approved by
the Principal Financial Officer of the Company, or such other
officer designated by the Company, for the investment of assets
of the Trust.
(b) (1) (A) The Principal Financial Officer of the
Company, or such other officer designated by the Company, at any
time and from time to time may direct the Trustee to segregate
one or more specified portions of the Trust into a separate
investment account or accounts (each hereinafter called a
"Segregated Investment Account"), and may appoint and designate
an Investment Director to direct the Trustee in the management of
the assets of each such Segregated Investment Account
(hereinafter called "that Investment Director's Segregated
Investment Account").
(B) Any Investment Director appointed by the
Principal Financial Officer of the Company may be either an
officer or employee of the Company, a subsidiary or affiliate of
the Company, or an Investment Manager who is not an officer or
employee of the Company. Any Investment Manager so appointed
must be either (i) an investment adviser registered as such under
the Investment Advisers Act; or (ii) a bank, as defined in that
Act; or (iii) an insurance company qualified to perform services
in the management, acquisition or disposition of the assets of
the Trust under the laws of more than one State. The Trustee
until notified in writing to the contrary shall be fully
protected in relying upon any written notice of the appointment
of an Investment Director furnished to it by the Company. In the
event of any vacancy in the office of Investment Director, the
Trustee shall be deemed to be the Investment Director of that
Investment Director's Segregated Investment Account until an
Investment Director shall have been duly appointed to direct the
Trustee in the management of the assets of that Investment
Director's Segregated Investment Account; and in such event until
an Investment Director shall have been so appointed and
qualified, references herein to the Trustee's acting in respect
of that Investment Director's Segregated Investment Account
pursuant to direction from the Investment Director shall be
deemed to authorize the Trustee to act on its own discretion in
managing and controlling the assets of that Investment Director's
Segregated Investment Account, and Paragraphs (4) and (5) of this
Paragraph (b) shall have no effect and shall be disregarded.
(2) Any Investment Director appointed pursuant to
Paragraph (b) (1) of this Article FOURTH shall have exclusive
authority and discretion to manage and control the assets of that
Investment Director's Segregated Investment Account, and pursuant
to such authority and discretion may direct the Trustee from time
to time and at any time:
(A) To invest and reinvest that Investment
Director's Segregated Investment Account, without distinction
between principal and income, in shares of stock (whether common
or preferred) or other evidences of ownership, bonds, debentures,
notes or other evidences of indebtedness, unsecured or secured by
mortgages on real or personal property wherever situated
(including any part interest in a bond and mortgage or note and
mortgage whether insured or uninsured) and other property, or
part interest in property, real or personal, foreign or domestic,
whether or not productive of income or consisting of wasting
assets, and in order to reduce the risk of interest rate
fluctuations, contracts, as either buyer or seller, for the
future delivery of United States Treasury securities and
comparable Federal Government-backed securities; provided,
however, that the Trustee, upon specific directions in writing
from that Investment Director, shall invest and reinvest some or
all of the assets of that Investment Director's Segregated
Investment Account in qualifying securities issued by the Company
or by an affiliate of the Company, to the extent permitted by the
Employee Retirement Income Security Act of 1974, unless the
Trustee shall deem such directed investment or reinvestment to be
inconsistent with the provisions of Paragraph (a) of Article
EIGHTH and that the Trustee may retain any such securities
acquired for that Investment Director's Segregated Investment
Account at the direction of that Investment Director until that
Investment Director directs the Trustee to dispose of them; but
no direction of any Investment Director to sell any securities
issued by the Company or by an affiliate of the Company shall be
binding if it would require the Trustee to violate any law
respecting the public distribution of securities, and, in any
event, without limiting the generality of the provisions of
Article NINTH, the Company agrees, to the extent permitted by
law, to indemnify the Trustee and hold it harmless from and
against any claim or liability that may be asserted against it,
otherwise than on account of the Trustee's breach of his own
duties, by reason of the Trustee's investing in, or reinvesting
in or selling such securities in accordance with any direction
from any Investment Director or by reason of the Trustee's
failure to sell any such securities in the absence of any
direction from that Investment Director to sell them; and
(B) To perform acts similar to those authorized to
the Trustee in Subparagraphs (2) through (10) of Paragraph (a) of
this Article FOURTH.
(3) In addition, each Investment Director from time
to time and at any time may delegate to the Trustee discretionary
authority to invest and reinvest funds of that Investment
Director's Segregated Investment Account in debt securities
(including obligations of the Government of the United States)
payable on demand or having maturities not exceeding one year or
in interests in any trust fund that has been or shall be created
and maintained by the Trustee as trustee for the collective
short-term investment of funds, the instrument creating such
trust fund, together with any amendments, modifications or
supplements thereof, being hereby effective when and as such
investments are made, incorporated in and made a part of this
Agreement as fully and to all intents and purposes as if set
forth herein at length.
(4) The Trustee shall exercise in respect of each
Investment Director's Segregated Investment Account the powers
set forth in Paragraph (b) (2) of this Article FOURTH only when
and to the extent directed in writing by that Investment
Director. Each Investment Director, from time to time and at any
time, may issue orders for the purchase or sale of securities
directly to a broker or dealer, and for such purpose the Trustee
will upon request execute and deliver to that Investment Director
one or more trading authorizations. Written notification of the
issuance of each such order shall be given promptly to the
Trustee by that Investment Director, and the execution of each
such order shall be confirmed by the broker to that Investment
Director and to the Trustee. Such notification shall be
authority to the Trustee to receive securities purchased against
payment therefor and to deliver securities sold against receipt
of the proceeds therefrom, as the case may be.
(5) Unless the Trustee participates knowingly in,
or knowingly undertakes to conceal, an act or omission of any
Investment Director, knowing such act or omission to be a breach
of the fiduciary responsibility of that Investment Director with
respect to the Trust, or enables such a breach to occur through
the Trustee's failure to comply with the Trustee's own duties,
the Trustee shall not be liable for any act or omission of any
Investment Director, and shall not be under any obligation to
invest or otherwise manage the assets of the Trust that are
subject to the management of any Investment Director. Without
limiting the generality of the foregoing, the Trustee shall not
be liable by reason of its taking or refraining from taking at
the direction of any Investment Director any action in respect of
that Investment Director's Segregated Fund, pursuant to this
Paragraph (b), or pursuant to a notification of an order to
purchase or sell securities for the account of any Investment
Director's Segregated Investment Account issued by that
Investment Director, nor shall the Trustee be liable by reason of
its refraining from taking any action in respect of any
Investment Director's Segregated Investment Account because of
the failure of that Investment Director to give such direction or
order; the Trustee shall be under no duty to question or to make
inquiries as to any direction or order or failure to give
direction or order by any Investment Director; and the Trustee
shall be under no duty to make any review of investments acquired
for any Investment Manager's Segregated Investment Account at the
direction or order of that Investment Manager and shall be under
no duty at any time to make any recommendation with respect to
disposing of or continuing to retain any such investment.
(6) Without limiting the generality of the
provisions of Article NINTH, the Company agrees, to the extent
permitted by law, to indemnify the Trustee and hold it harmless
from and against any claim or liability that may be asserted
against it, otherwise than on account of the Trustee's breach of
his own duties, by reason of the Trustee's taking or refraining
from taking any action in accordance with this Paragraph (b),
including, without limiting the generality of the foregoing, any
claim or liability that may be asserted against the Trustee on
account of failure to receive securities purchased, or failure to
deliver securities sold, pursuant to orders issued by an
Investment Director directly to a broker or dealer.
(c) After an Unfriendly Change in Control occurs and
subject to Article SIXTH hereof, the Trustee shall have the
exclusive authority and discretion to manage and control the
Trust assets, and may appoint Investment Managers (as defined in
Paragraph (b) (1) (A) of this Article FOURTH) including
affiliates of the Company or the Trustee to manage the investment
of the Trust assets. Pursuant to such authority and discretion,
the Trustee, or any investment manager appointed pursuant to this
Paragraph (c), may exercise, from time to time and at any time,
the power to hold or dispose of any assets held by the Trust on
the date an Unfriendly Change in Control occurs, and shall invest
and reinvest the Trust, without distinction between principal and
income, in an immunized or dedicated portfolio of bonds,
debentures, equipment or collateral trust certificates, notes or
other evidences of indebtedness, unsecured or secured by
mortgages on real or personal property wherever situated
(including any part interest in a bond and mortgage or note and
mortgage whether insured or uninsured) and any portfolio of other
property, or part interest in property, real or personal, foreign
or domestic, such that the rates of return and maturity dates of
the instruments of such portfolio may reasonably be expected to
yield assets of the Trust sufficient to discharge the Company's
obligations under the Plans as set forth in the most recent
Participant Data (including, without limitation, the information
specified in clause (5) of Paragraph (b) of Article THIRD hereof)
furnished to the Trustee prior to such Unfriendly Change in
Control.
FIFTH: Administrative Powers. The Trustee shall have and
in its sole and absolute discretion may exercise from time to
time and at any time the following administrative powers and
authority with respect to the Trust:
(a) To hold property of the Trust in its own name or in
the name of a nominee or nominees, without disclosure of the
Trust, or in bearer form so that it will pass by delivery, but no
such holding shall relieve the Trustee of its responsibility for
the safe custody and disposition of the Trust in accordance with
the provisions of this Agreement; the Trustee's books and records
shall at all times show that such property is part of the Trust;
and the Trustee shall be absolutely liable for any loss
occasioned by the acts of its nominee or nominees with respect to
securities registered in the name of the nominee or nominees;
(b) To continue to hold any property of the Trust
whether or not productive of income; to reserve from investment
and keep unproductive of income, without liability for interest,
cash temporarily awaiting investment and such cash as it deems
advisable or as the Company from time to time may specify prior
to an Unfriendly Change in Control in order to meet the
administrative expenses of the Trust or anticipated distributions
therefrom;
(c) To organize and incorporate under the laws of any
state it may deem advisable 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 property, interests or rights that the
Trustee is authorized to acquire under Article FOURTH hereof;
(d) To employ in the management of the Trust suitable
agents, without liability for any loss occasioned by any such
agents selected by the Trustee with the care, skill, prudence and
diligence under the circumstances then prevailing that 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;
(e) To make, execute and deliver, as Trustee, any deeds,
conveyances, leases, mortgages, contracts, waivers or other
instruments in writing that the Trustee may deem necessary or
desirable in the exercise of its powers under this Agreement; and
(f) To do all other acts that the Trustee may deem
necessary or proper to carry out any of the powers set forth in
Articles FOURTH, FIFTH, and SIXTH hereof or otherwise in the best
interests of the Trust.
SIXTH: Insurance and Annuity Contracts. (a) The Trustee,
upon written direction of the Company prior to an Unfriendly
Change in Control, shall pay from the Trust such sums to such
insurance company or companies as. the Company may direct for
the purpose of procuring participating or nonparticipating
insurance and/or annuity contracts for the Trust (hereinafter in
Article SIXTH referred to as "Contracts"). The Company shall
prepare, or cause to be prepared in such form as it shall
prescribe, the application for any Contract to be applied for.
The Trustee shall receive and hold in the Trust, subject to the
provisions hereinafter set forth in this Article SIXTH, all
Contracts so obtained.
(b) The Trustee shall be the complete and absolute owner
of Contracts held in the Trust and, upon written direction of the
Company prior to an Unfriendly Change in Control, shall have the
power, without the consent of any other person, to exercise any
and all of the rights, options or privileges that belong to the
absolute owner of any Contract held in the Trust or that are
granted by the terms of any such Contract or by the terms of this
Agreement. Prior to an Unfriendly Change in Control, the Trustee
shall have no discretion with respect to the exercise of any of
the foregoing powers or to take any other action permitted by any
Contract held in the Trust, but shall exercise such powers or
take such action only upon the written direction of the Company
and the Trustee shall have no duty to exercise any of such powers
or to take any such action unless and until it shall have
received such direction. The Trustee, upon the written direction
of the Company prior to an Unfriendly Change in Control, shall
deliver any Contract held in the Trust to such person or persons
as may be specified in the direction.
(c) The Trustee shall hold in the Trust the proceeds of
any sale, assignment or surrender of any Contract held in the
Trust and any and all dividends and other payments of any kind
received in respect of any Contract held in the Trust.
(d) Upon the written direction of the Company prior to
an Unfriendly Change in Control, the Trustee shall pay from the
Trust premiums, assessments, dues, charges and interest, if any,
upon any Contract held in the Trust. The Trustee shall have no
duty to make any such payment unless and until it shall have
received such direction. After an Unfriendly Change in Control,
the Trustee shall pay from the Trust premiums, assessments, dues,
charges and interest, if any, upon any Contract held in the
Trust, without direction from the Company.
(e) No insurance company that may issue any Contract or
Contracts held in the Trust shall be deemed to be a party to this
Agreement for any purpose, or to be responsible in any way for
the validity of this Agreement or to have any liability under
this Agreement other than as stated in each Contract that it may
issue. Any insurance company may deal with the Trustee as sole
owner of any Contract issued by it and held in the Trust, without
inquiry as to the authority of the Trustee to act, and may accept
and rely upon any written notice, instruction, direction,
certificate or other communication from the Trustee believed by
it to be genuine and to be signed by an officer of the Trustee
and shall incur no liability or responsibility for so doing. Any
sums paid out by any insurance company under any of the terms of
a Contract issued by it and held in the Trust either to the
Trustee, or, in accordance with its direction, to any other
person or persons designated as payees in such Contract shall be
a full and complete discharge of the liability to pay such sums,
and the insurance company shall have no obligation to look to the
disposition of any sums so paid. No insurance company shall be
required to look into the terms of this Agreement, to question
any action of the Trustee or to see that any action of the
Trustee is authorized by the terms of this Agreement.
(f) Anything contained herein to the contrary
notwithstanding, neither the Company nor the Trustee shall be
liable for the refusal of any insurance company to issue or
change any Contract or Contracts or to take any other action
requested by the Trustee; nor for the form, genuineness,
validity, sufficiency or effect of any Contract or Contracts held
in the Trust; nor for the act of any person or persons that may
render any such Contract or Contracts null and void; nor for the
failure of any insurance company to pay the proceeds and avails
of any such Contract or Contracts as and when the same shall
become due and payable; nor for any delay in payment resulting
from any provision contained in any such Contract or Contracts;
nor for the fact that for any reason whatsoever (other than their
own negligence or willful misconduct) any Contract or Contracts
shall lapse or otherwise become uncollectible.
(g) After an Unfriendly Change in Control, the Trustee
shall exercise any of the powers set forth in this Article SIXTH
without direction from the Company, including the power to
negotiate for and purchase Contracts the rates of return and
maturity dates of which may reasonably be expected to yield
assets of the Trust sufficient to discharge any or all of the
obligations of the Company under the Plans.
SEVENTH: Taxes, Expenses and Compensation of Trustee.
(a) The Company shall pay any Federal, State, Local or
other taxes imposed or levied with respect to the corpus and/or
income of the Trust or any part thereof under existing or future
laws, and the Company, in its discretion, or the Trustee, in its
discretion, may contest the validity or amount of any tax,
assessment, claim or demand respecting the Trust or any part
thereof. The Trustee shall deduct any payroll taxes required to
be withheld with respect to any payments made pursuant to the
Trust.
(b) The Trustee, without direction from the Company,
shall pay from the Trust the reasonable and necessary expenses
and compensation of counsel and all other reasonable and
necessary expenses of managing and administering the Trust that
are not paid by the Company including, but not limited to,
Participant record keeping expenses, investment management fees,
computer time charges, data retrieval and input costs, and
charges for time expended by personnel of the Trustee in
fulfilling the Trustee's duties.
(c) The Company shall pay to the Trustee from time to
time such reasonable compensation for its services as trustee as
is specified in Schedule 3 or as subsequently agreed to by the
Company and the Trustee, but until paid, such compensation and
reimbursement for expenses incurred by the Trustee pursuant to
this Article SEVENTH shall constitute a charge upon the Trust,
such charge to have priority over any payments due participants
under the Plans. Notwithstanding the foregoing, in the event the
initial three-year term of this Agreement or any renewal term
ends during a Threatened Change in Control Period, or after an
Unfriendly Change in Control, the Trustee's compensation for each
twelve-month period beginning upon termination of such initial or
renewal term shall be adjusted for any increases in the cost of
living by multiplying the rate of compensation at the end of such
initial or renewal term by a fraction (but not less than one)1
the numerator of which is the monthly average for such twelve-
month period of the Consumer Price Index for the New York City
Standard Metropolitan Statistical Area, as published by the
Bureau of Labor Statistics, and the denominator of which is the
monthly average of said Consumer Price Index for the last twelve
months of the initial term, or the last renewal term, if any. If
the Consumer Price Index referred to in the preceding sentence is
hereafter discontinued or revised so that the computation of the
adjustment cannot be made in the manner hereinabove provided,
then such other index then published by the United States
Government, or an agency or department thereof, as shall most
closely approximate the Consumer Price Index in effect on the
date hereof, shall be used to make such adjustment. Any such
adjustment shall be billed when computed as an additional fee in
respect of the twelve-month period to which it relates and shall
be payable within thirty (30) days of the date billed, and the
Trustee's compensation, as so adjusted, shall become the minimum
fee for the next succeeding twelve-month period.
(d) After an Unfriendly Change in Control, the Trustee
shall bill the Company directly, on a monthly basis, for all
expenses described in Paragraph (b) of this Article SEVENTH and
all fees described in Paragraph (c) thereof which amounts shall
be immediately due and payable except as otherwise provided in
Paragraph (c). If such amounts are not paid by the Company
within thirty (30) days of the billing date, the Trustee may pay
such amounts from the Benefits Protection Account. The Trustee
may commence legal action to recover any amount not paid within
thirty (30) days of the billing date, and shall be obligated to
commence such an action if the Company's failure to pay causes a
reduction below $1,500,000 in the assets of the Trust
attributable to the Benefits Protection Account.
EIGHTH: General Duties of Trustee and Investment Director.
(a) Subject to Article FIFTEENTH hereof, the Trustee, any
Investment Director appointed pursuant to Paragraph (b) of
Article FOURTH, and any Investment Manager appointed pursuant to
Paragraph (c) of Article FOURTH, shall discharge their duties
under this Agreement solely in the interest of the participants
in the Plans and their beneficiaries and (1) for the exclusive
purpose of providing benefits to such participants and their
beneficiaries and defraying reasonable expenses of administering
the Plans; and (2) with the care, skill, prudence and diligence
under the circumstances then prevailing that 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; and (3) by diversifying the investments of the Trust so as
to minimize the risk of large losses, unless under the
circumstances it is clearly prudent not to do so; but the duties
and obligations of the Trustee and any Investment Director shall
be limited to those expressly imposed upon them by this Agreement
notwithstanding any reference herein to the Plans or the
Protected Plans.
(b) The Trustee may consult with counsel, who may be
counsel for the Company or for the Trustee in its individual
capacity, and shall not be deemed imprudent by reason of its
taking or refraining from taking any action in accordance with
the opinion of counsel.
(c) (1) Within thirty (30) days after an Unfriendly
Change in Control, the Company shall notify participants and
beneficiaries of the Protected Plans in writing of the Trustee's
availability to aid them in pursuing any claims they may have
against the Company under the terms of those of the Protected
Plans under which they are covered. The Company shall provide
such notice by using the same method used by Department of Labor
29 C. F. R. Section 2520. 104b-1(b)(1) as now in effect
without regard to subsequent amendments. If the Company fails to
do so, the Trustee shall provide such notification by placing an
advertisement in one newspaper of general circulation in each of
the ten locations in which the largest number of employees are
located as communicated by the Company to the Trustee prior to an
Unfriendly Change in Control.
(2) If, after an Unfriendly Change of Control, a
participant or beneficiary of a Protected Plan notifies the
Trustee that the Company (or insurance company, contract
administrator or any other party, if applicable) has refused to
pay a claim asserted by the participant or beneficiary under any
of the Protected Plans, and the Trustee determines that the
assets held in the Accounts are not available to pay such claim,
then, unless the Trustee shall determine that the claim has no
basis in law and fact (in which case the Trustee shall notify the
participant or beneficiary of such determination and shall take
no further action with respect to the claim), the Trustee:
(A) will promptly attempt to negotiate with the
Company (or insurance company, contract administrator or other
party, if applicable) to obtain payment, settlement, or other
disposition of the claim, subject to the consent of the
participant or beneficiary;
(B) will if (i) negotiations fail after sixty (60)
days of their commencement to result in a payment, settlement or
other disposition agreeable to the participant or beneficiary
(hereafter referred to in this Paragraph (c) of Article EIGHTH as
the "Plaintiff"), (ii) the Trustee at any time reasonably
believes further negotiations not to be in the Plaintiff's best
interest, or (iii) any applicable statute of limitations would
otherwise expire within sixty (60) days, upon the receipt of
written authorization from the Plaintiff in substantially the
form attached as Exhibit A hereto, institute and maintain legal
proceedings (the "Litigation") against the Company or other
appropriate person or entity to recover on the claim on behalf of
the Plaintiff; and
(C) may, subject to the written consent of the
Plaintiff, settle or discontinue the Litigation. The Trustee
shall direct the course of the Litigation and shall keep the
Plaintiff informed of the progress of the Litigation as the
Trustee deems appropriate, but no less frequently than quarterly.
If, during the Litigation,
(i) the Plaintiff directs in writing that the
Litigation on behalf of the Plaintiff be settled or discontinued,
the Trustee shall take all appropriate action to follow such
direction, provided that the written direction specifies the
terms and conditions of the settlement or discontinuance, and
further provided that the Plaintiff, if requested by the Trustee,
shall execute and deliver to the Trustee a document in a form
acceptable to the Trustee releasing and holding harmless the
Trustee from any liability resulting from the Trustees following
such direction; or
(ii) the Plaintiff refuses to consent to the
settlement or other disposition of the Litigation on terms
recommended in writing by the Trustee, the Trustee may proceed,
in its sole and absolute discretion, to take such action as it
deems appropriate in the Litigation, including settlement or
discontinuance of the Litigation, provided that the Trustee shall
afford the Plaintiff at least fourteen (14) days' advance notice
of any decision to settle or otherwise discontinue the
Litigation, subject to the provisions of the following sentence.
If, at any time, the Plaintiff (x) revokes in writing (in
substantially the form attached as Exhibit B hereto) the
authorization of the Trustee to proceed on his behalf and
delivers such writing to the Trustee and (y) appoints his own
counsel and so notifies the Trustee in writing, whose fees and
expenses are not to be paid by the Trust and who shall appear in
the Litigation on behalf of the Plaintiff in lieu of counsel
retained by the Trustee, then the Trustee shall not be authorized
to proceed in the Litigation on behalf of the Plaintiff.
Thereafter, the Trustee shall have no obligation to proceed
further on behalf of such Plaintiff or to pay any costs or
expenses incurred in the Litigation after the date of the
delivery of such writing.
The Trustee is empowered to retain, at the expense of the
Trust, counsel and other appropriate experts, including actuaries
and accountants, to aid it in making any determination under this
Paragraph (c) of Article EIGHTH and in determining whether to
pursue or settle any Litigation. The Trustee shall have the
discretion to determine the form and nature that any Litigation
against the Company or other appropriate person or entity shall
take, and the procedural rules and laws applicable to such
Litigation shall supersede any inconsistent provision of this
Agreement.
(3) Subparagraph (c)(2) shall be inapplicable in
respect of any Litigation involving the payment of benefits under
any Plan in which the Trustee is named a defendant. Any
Plaintiff in an action in which the Trustee is named a defendant
shall engage his own counsel, whose fees and expenses shall be
paid by the Plaintiff, provided, however, that the Trustee shall
pay out of the assets of the Benefits Protection Account of the
Trust any legal fees and costs awarded to the Plaintiff by a
court in such Litigation pursuant to Section 502 (g) (1) of
ERISA.
(4) In the event the Trustee determines that the
claim of a participant or beneficiary has no basis in law or fact
and such participant or beneficiary pursues such claim against
the Company, then the Trustee shall reimburse the participant or
beneficiary out of the assets of the Benefits Protection Account
of the Trust for any reasonable legal fees and other reasonable
costs incurred in pursuing such claim if such participant or
beneficiary obtains a settlement or final judgment of a court of
competent jurisdiction under which the participant or beneficiary
is to receive not less than 50% of the amount originally claimed
to the Trustee as the amount owed by the Company.
(5) With respect to claims by holders of Severance
Compensation Agreements, such holders may elect to pursue their
own claim (with counsel of their choice) or to have the Trustee
pursue such claim. In the event such holders elect to pursue
their own claims, the Trustee shall promptly reimburse such
holders for all attorneys fees and other expenses incurred to the
extent the Company does not pay such amounts as provided in the
Severance Compensation Agreements.
(d) The Company may designate, prior to an
Unfriendly Change in Control, counsel to be retained by the
Trustee at the expense of the Trust after an Unfriendly Change in
Control, to enforce the rights of participants and beneficiaries
to benefits under the Protected Plans, as described above. If
the designated counsel declines to provide representation, or the
Trustee is not satisfied with the quality of representation
provided, the Trustee may, from time to time, dismiss the
designated firm or any successor and engage another qualified law
firm for this purpose including the same law firm which
represents the Trustee with respect to its responsibilities as
Trustee under this Agreement. The Company may not dismiss or
engage such counsel or cause the Trustee to engage or dismiss
such counsel after an Unfriendly Change in Control.
NINTH: Indemnification. The Company agrees, to the extent
permitted by law, to indemnify and hold the Trustee harmless from
and against any liability that it may incur in the administration
of the Trust, unless arising from the Trustee's own gross
negligence or willful breach of the provisions of its obligations
under this Agreement. The Trustee shall not be required to give
any bond or any other security for the faithful performance of
its duties under this Agreement, except as required by law.
TENTH: No Duty To Advance Funds. The Trustee shall have no
obligation to advance its own funds for the purposes of
fulfilling its responsibilities under this Agreement, and its
obligation to incur expenses shall at all times be limited to
amounts in the Trust available to be applied toward such
expenses.
ELEVENTH: Accounts. (a) (1) The Trustee shall keep
accurate and detailed accounts of all its receipts, investments
and disbursements under this Agreement on a calendar year basis,
accounting for each Account on a separate basis. Such person or
persons as the Company shall designate shall be allowed to
inspect the books of account relating to the Trust upon request
at any reasonable time during the regular business hours of the
Trustee.
(2) Within 120 days after the close of each
calendar year, the Trustee shall transmit to the Company, and
certify the accuracy of, a written statement of the assets and
liabilities of the Trust, showing the current value of each asset
at that date, and a written account of all the Trustee's
transactions relating to the Trust during the period from the
last previous accounting to the close of that year. The report
of any such valuation shall not constitute a representation by
the Trustee that the amounts reported as fair market values would
actually be realized upon the liquidation of the Trust. For
the purposes of this Subparagraph, the date of the Trustee's
resignation or removal as provided in Article THIRTEENTH hereof
or the date of termination of the Trust as provided in Article
FOURTEENTH hereof shall be deemed to be the close of a year.
(3) Unless the Company shall have filed with the
Trustee written exceptions or objections to any such statement
and account within 60 days after receipt thereof, the Company
shall be deemed to have approved such statement and account; and
in such case or upon the written approval by the Company of any
such statement and account, the Trustee shall be forever released
and discharged with respect to all matters and things contained
in such statement and account as though it had been settled by
decree of a court of competent jurisdiction in an action or
proceeding to which the Company and all persons having any
beneficial interest in the Trust were parties.
(b) Nothing contained in this Agreement or in the Plans
shall deprive the Trustee of the right to have a judicial
settlement of its accounts. In any proceeding for a judicial
settlement of the Trustee's accounts or for instructions in
connection with the Trust, the only other necessary party thereto
in addition to the Trustee shall be the Company. If the Trustee
so elects, it may bring in as a party or parties defendant any
other person or persons. No person interested in the Trust,
other than the Company, shall have a right to compel an
accounting, judicial or otherwise, by the Trustee, and each such
person shall be bound by all accountings by the Trustee to the
Company, as herein provided, as if the account had been settled
by decree of a court of competent jurisdiction in an action or
proceeding to which such person was a party.
TWELFTH: Administration of the Plans; Communications. (a)
The Company shall administer the Plans as provided therein and
subject to Paragraph (b) of Article THIRD and Paragraph (c) of
Article EIGHTH hereof, or subject to any other delegation by the
Company and assumption by the Trustee of the duties of
administering the Plans, the Trustee shall not be responsible in
any respect for administering the Plans nor shall the Trustee be
responsible for the adequacy of the Trust to meet and discharge
all payments and liabilities under the Plans. The Trustee shall
be fully protected in relying upon any written notice,
instruction, direction or other communication signed by an
officer of the Company who is authorized to execute and deliver,
in the name and on behalf of the Company, documents or
instruments relating to the Trust (hereinafter an "Authorized
Officer"). The Company, from time to time, shall furnish the
Trustee with the names and specimen signatures of the Authorized
Officers and shall promptly notify the Trustee of the termination
of office of any Authorized Officer and the appointment of a
successor thereto. Until notified to the contrary, the Trustee
shall be fully protected in relying upon the most recent list of
Authorized Officers furnished to it by the Company.
(b) Any action required by any provision of this
Agreement to be taken by the Board of Directors of the Company
shall be evidenced by a resolution of such Board of Directors
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 relying upon any resolution
so certified to it. Unless other evidence with respect thereto
has been specifically prescribed in this Agreement, any other
action of the Company under any provision of this Agreement,
including any approval of or exceptions to the Trustee's
accounts, shall be evidenced by a certificate signed by an
authorized officer, and the Trustee shall be fully protected in
relying upon such certificate. The Trustee may accept a
certificate signed by an authorized officer as proof of any fact
or matter that it deems necessary or desirable to have
established in the administration of the Trust (unless other
evidence of such fact or matter is expressly prescribed herein),
and the Trustee shall be fully protected in relying upon the
statements in the certificate.
(c) The Trustee shall be entitled conclusively to
rely upon any written notice, instruction, direction, certificate
or other communication believed by it to be genuine and to be
signed by an authorized officer, and the Trustee shall be under
no duty to make investigation or inquiry as to the truth or
accuracy of any statement contained therein.
(d) Until written notice is given to the contrary,
communications to the Trustee shall be sent to it at its office
at 450 West 33rd Street, New York, New York 10001; communications
to the Company shall be sent to it at its office at 39 Old
Ridgebury Road, Danbury, Connecticut 06817.
THIRTEENTH: Resignation or Removal of Trustee. (a) The
Trustee may resign at any time other than during a Threatened
Change in Control Period or after an Unfriendly Change in Control
upon 60 days' written notice to the Company or such shorter
period as is acceptable to the Company. During a Threatened
Change in Control Period or after an Unfriendly Change in
Control, the Trustee may resign only under one of the following
circumstances:
(1) The Trustee is no longer in the business, or is
actively in the process of removing itself from the business, of
acting as trustee for employee benefit plans.
(2) The Trustee determines that a conflict of
interest exists which would prohibit it from fulfilling its
duties under this Agreement in an ethically proper manner, and a
law firm (appointed by the President of the Association of the
Bar of the City of New York, or by the American Arbitration
Association, if the President of the Association of the Bar of
the City of New York fails to so appoint within thirty days of a
request for such appointment, or notifies the Trustee that it is
unable to make such appointment) concurs with the Trustee. The
Trustee shall use its best efforts to avoid the creation of such
a conflict. The decision of such law firm shall be binding, but
may be appealed in the same manner, and under the same
conditions, as if it were made by an arbitrator. All costs
incurred by the Trustee in connection with obtaining or appealing
such a decision shall be reimbursable expenses pursuant to
Article SEVENTH hereof.
(3) The assets of the Trust have been exhausted or
are insufficient to pay accrued and reasonably anticipated fees
and expenses of the Trustee hereunder, the Company has refused
voluntarily to pay the Trustee's accrued fees and expenses as
required pursuant to Paragraph (d) of Article SEVENTH and the
Trustee has been unsuccessful in obtaining a court order
requiring the Company to make such payments or has been unable to
collect on a judgment for such fees and expenses.
Notwithstanding the above, the Trustee may resign for
reasons set forth in (1) or (2) only if it has obtained the
agreement of a bank with assets in excess of $2 billion and net
worth in excess of $100 million to replace it as trustee under
the terms of this Agreement. The decision rendered under (ii),
if that is the reason for the Trustee's resignation, may
expressly excuse the Trustee from this requirement. In any
event, the Trustee shall continue to be custodian of the Trust
assets until the new trustee is in place, and the Trustee shall
be entitled to expenses and fees through the later of the
effective date of its resignation as Trustee and the end of its
custodianship of the Trust assets.
(b) The Company, by action of its Board of
Directors, may, other than during a Threatened Change in Control
Period, remove the Trustee before an Unfriendly Change in
Control, upon 60 days' written notice to the Trustee, or upon
shorter notice if acceptable to the Trustees but in either event,
if the removal occurs during the first three years of this
Agreement, the Company shall pay to the Trustee all fees (but not
expenses) which would have been due the Trustee for the remainder
of such initial three-year period. If the removal occurs after
the first three years of this Agreement, the Company shall pay to
the Trustee all fees (but not expenses) which would have been due
the Trustee through the next one-year anniversary of the
effective date of this Agreement. The Company may not remove the
Trustee during a Threatened Change in Control Period or after an
Unfriendly Change in Control. In the event it resigns or is
removed, the Trustee shall have a right to have its accounts
settled as provided in Article ELEVENTH hereof.
(c) Each successor trustee shall have the powers
and duties conferred upon the Trustee in this Agreement, and the
term "Trustee" as used in this Agreement shall be deemed to
include any successor trustee. Upon designation or appointment
of a successor trustee, the Trustee shall transfer and deliver
the Trust to the successor trustee, reserving such sums as the
Trustee shall deem necessary to defray its expenses in settling
its accounts, to pay any of its compensation due and unpaid and
to discharge any obligation of the Trust for which the Trustee
may be liable. If the sums so reserved are not sufficient for
these purposes, the Trustee shall be entitled to recover the
amount of any deficiency from either the Company or the successor
trustee, or both. When the Trust shall have been transferred and
delivered to the successor trustee and the accounts of the
Trustee have been settled as provided in Article ELEVENTH hereof,
the Trustee shall be released and discharged from all further
accountability or liability for the Trust and shall not be
responsible in any way for the further disposition of the Trust
or any part thereof.
FOURTEENTH: Amendment of Agreement; Termination of Trust.
(a) Subject to Paragraph (b) of this Article FOURTEENTH, the
Company expressly reserves the right at any time to amend or
terminate this Agreement and the Trust created thereby to any
extent that it may deem advisable. No amendment shall be made
without the Trustee's consent thereto in writing if, and to the
extent that, the effect of such amendment is to increase the
Trustee's responsibilities hereunder. Such proposed amendment
shall be delivered to the Trustee as a written instrument of
amendment, duly executed and acknowledged by the Company and
accompanied by a certified copy of a resolution of the Board of
Directors of the Company authorizing such amendment. The Company
also shall deliver to the Trustee a copy of any modifications or
amendments to the Plans. The Trustee's consent shall not be
required for the termination of the Trust or its removal as
Trustee.
(b) Notwithstanding any other provisions of this
Agreement, the provisions of this Agreement and the Trust created
thereby may not be amended after the date an Unfriendly Change in
Control occurs without the written consent of a majority in
number of participants and beneficiaries. The Trustee may
request that the Company furnish evidence to establish that such
a majority in number of participants and beneficiaries have
granted written consent to such an amendment. The Trustee, after
an Unfriendly Change in Control, upon written advice of counsel,
may amend the provisions of this Agreement to the extent required
by applicable law. The Company reserves the right to amend or
eliminate this Paragraph (b) of Article FOURTEENTH prior to the
date of an Unfriendly Change in Control.
(c) In the event the Company terminates the Trust
prior to the occurrence of an Unfriendly Change in Control, other
than during a Threatened Change in Control Period, the Trustee
(subject to the provisions of Paragraph (d) of Article THIRD and
Article FIFTEENTH hereof and reserving such sums as the Trustee
shall deem necessary in settling its accounts and to discharge
any obligation of the Trust for which the Trustee may be liable)
shall distribute all remaining assets of the Trust in accordance
with the written directions of the Company.
(d) In case any one or all of the Equalization
Plan, the Supplemental Retirement Income Plan, the 1983 Bonus
Deferral Plan, the 1984 Bonus Deferral Plan and the Key
International Management Plan is terminated in whole or in part
after an Unfriendly Change in Control occurs, then the Trustee,
subject to the provisions of Paragraph (d) of Article THIRD, and
Article FIFTEENTH hereof, and reserving such sums as the Trustee
shall deem necessary in settling its accounts and to discharge
any obligation of the Trust for which the Trustee may be liable)
shall apply or distribute the Account established with regard to
such Plan pursuant to Paragraph (a) of Article SECOND, in such
manner and in such amounts as the Trustee shall determine based
upon the most recent Participant Data (as defined in Paragraph
(b) of Article THIRD hereof) forwarded by the Company to the
Trustee prior to such Unfriendly Change in Control and any
supplemental information furnished to the Trustee by a
participant or beneficiary upon which the Trustee may reasonably
rely in making such a determination. After satisfying all
liabilities with regard to such terminated Plan, from the Account
established with regard to such Plan, the Trustee shall
distribute the remaining assets in such Account in accordance
with Paragraph (c)(8) of Article SECOND. Subject to Paragraph
(b) of Article FIFTEENTH, in the event of an Unfriendly Change in
Control, the Trust shall continue in effect until the later of
the fifth one year anniversary of the date on which an Unfriendly
Change in Control occurs or the date upon which all of the
participants' and beneficiaries' benefits under all of the Plans
have been paid or otherwise provided for. Upon termination of
the Trust, the Trustee shall have a right to have its account
settled as provided in Article ELEVENTH hereof. Any assets
remaining in the Trust after payment or provision for all
benefits payable under the Plans, and after the Trustee has
reserved such sums as it deems necessary for the payment of its
expenses and fees hereunder shall be paid in accordance with the
written directions of the Company. When the Trust assets shall
have been so applied or distributed and the accounts of the
Trustee shall have been so settled, the Trustee shall be released
and discharged from all further accountability or liability
respecting the Trust.
FIFTEENTH: Prohibition of Diversion. (a) Except as
provided in Paragraph (b) below, at no time prior to the
satisfaction of all liabilities with respect to the beneficiaries
under this Trust shall any part of the corpus and/or income of
the Trust be used for, or diverted to, purposes other than for
the exclusive benefit of such beneficiaries and the assets of the
Trust shall never inure to the benefit of the Company and shall
be held for the exclusive purposes of providing benefits to
participants in the Plans and their beneficiaries and defraying
reasonable expenses of administering the Plans or performing any
of the Trustee's duties under this Agreement.
(b) Notwithstanding any provision of this Agreement
to the contrary, the assets of the Trust shall at all times be
subject to claims of the creditors of the Company. In the event
that (1) a final judicial determination is entered that the
Company is unable to pay its debts as such debts mature or (2)
there shall have been filed by or against the Company in any
court or other tribunal either of the United States or of any
State or of any other authority now or hereafter exercising
jurisdiction, a petition in bankruptcy or insolvency proceedings
or for reorganization or for the appointment of a receiver or
trustee of all or substantially all of the Company's property
under the present or any future Federal bankruptcy code or any
other present or future applicable Federal, State or other
bankruptcy or insolvency statute or law, then the Trustee shall
not make payments from the Trust to any participant or
beneficiary, but under either of such circumstances, the Trustee
shall deliver any property held in the Trust only as a court or
other tribunal of competent jurisdiction may direct to satisfy
the claims of the Company's creditors. The Trustee shall resume
payments under the terms of the Trust only after determining that
the Company is not insolvent or after receiving a judicial
decision to that effect. The Principal Financial Officer of the
Company, or an officer of the Company with duties similar to
those of a Principal Financial Officer, and the Board of
Directors of the Company shall have the duty to inform the
Trustee of the insolvency of the Company. The Trustee is
empowered to retain, at the expense of the Trust, counsel and
other appropriate experts, including accountants, to aid it in
making any determination with regard to the Company's insolvency
under this Paragraph (b) of Article FIFTEENTH.
SIXTEENTH: Prohibition of Assignment of Interest. No
interest, right or claim in or to any part of the Trust or any
payment therefrom shall be assignable, transferable or subject to
sale, mortgage, pledge, hypothecation, commutation, anticipation,
garnishment, attachment, execution or levy of any kind, and the
Trustee shall not recognize any attempt to assign, transfer,
sell, mortgage, pledge, hypothecate, commute or anticipate the
same, except to the extent required by law.
SEVENTEENTH: Affiliates. Any corporation that, directly or
through one or more intermediaries, controls, is controlled by or
is under common control with the Company may adopt and become a
party to this Agreement by delivering to the Trustee an
instrument in writing, duly executed and acknowledged, adopting
and assuming jointly and severally the obligations of the Company
under this Agreement and constituting and appointing the Company
to be the agent and attorney in fact of such corporation for the
purposes of giving or receiving notices, instructions, directions
and other communications to or from the Trustee and approving the
accounts of the Trustee, accompanied by duly certified copies of
resolutions of the Board of Directors of such corporation
adopting the Plans and approving and authorizing execution,
acknowledgment and delivery of such instrument and a duly
certified copy of a resolution of the Board of Directors of the
Company approving and consenting to the same. Notwithstanding
the foregoing, no Affiliate may become a party to this Agreement
after an Unfriendly or Threatened Change in Control.
EIGHTEENTH: Miscellaneous. (a) This Agreement shall be
interpreted, construed and enforced, and the trust hereby created
shall be administered, in accordance with the laws of the United
States and of the State of New York. Nothing in this Agreement
shall be construed to subject either the Trust created hereunder
or the Plans to the Employee Retirement Income Security Act of
1974, as amended.
(b) The titles to Articles of this Agreement are
placed herein for convenience of reference only, and the
Agreement is not to be construed by reference thereto.
(c) This Agreement shall bind and inure to the
benefit of the successors and assigns of the Company and the
Trustee, respectively and the Plans.
(d) This Agreement may be executed in any number of
counterparts, each of which shall be deemed to be an original but
all of which together shall constitute but one instrument, which
may be sufficiently evidenced by any counterpart.
(e) If any provision of this Agreement is
determined to be invalid or unenforceable the remaining
provisions shall not for that reason alone also be determined to
be invalid or unenforceable.
IN WITNESS WHEREOF, the parties hereto have caused this
Agreement to be executed in their respective names by their duly
authorized officers under their corporate seals as of the day and
year first above written.
UNION CARBIDE CORPORATION
By
ATTEST:
Secretary
MANUFACTURERS HANOVER TRUST
COMPANY
By
ATTEST:
Trust Officer
EXHIBIT A
Authorization Pursuant to
Paragraph (c) of Article EIGHTH of
Union Carbide Corporation Benefits Protection Trust
TO: Manufacturers Hanover Trust Company
This is to authorize the Manufacturers Hanover Trust
Company, as Trustee of the Union Carbide Corporation Benefits
Protection Trust (the "Trust"), to institute and maintain legal
proceedings against the Company (as defined in the Trust) or
other appropriate person or entity to assert the following claim
on my behalf: [nature of claim]. The Trustee shall have the
powers and be subject to the procedures set forth in Paragraph
(c) of Article EIGHTH of the Trust.
Any proceedings by the Trustee under this authorization may
be initiated in my name as a plaintiff (or as a member of a
class) or in the name of the Trustee, or both, as the Trustee
determines is necessary or appropriate at the time proceedings
are commenced.
Participant
EXHIBIT B
Revocation of Authorization
Pursuant to Paragraph (c) of Article EIGHTH of
Union Carbide Corporation Benefits Protection Trust
To: Manufacturers Hanover Trust Company
This is to notify you that I revoke any prior authorization
I have given to you as Trustee of the Union Carbide Corporation
Benefits Protection Trust (the "Trust") to maintain legal
proceedings against the Company (as defined in the Trust) or
other appropriate person or entity to assert the following claim
on my behalf: [nature of claim].
I understand that this Revocation of Authorization is
conditioned upon, and shall not be effective until, the
appointment by me of my own counsel and the appearance of that
counsel in any legal proceeding on my behalf in lieu of counsel
retained by the Trustee. I understand further that, upon the
occurrence of these conditions, the Trustee shall have no
obligation to proceed further on my behalf, or to pay any costs
or expenses incurred after the delivery of this Revocation of
Authorization.
Participant
STATE OF CONNECTICUT )
: SS. :
COUNTY OF )
On this _____ day of ____________, 1989, before me
personally came ________________, to me known, who, being by me
duly sworn, did depose and say that he resides at
___________________, and that he is _________________ of UNION
CARBIDE CORPORATION, one of the corporations described in and
which executed the foregoing instrument; that he 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 signed his name
thereto by like order.
STATE OF NEW YORK )
: SS. :
COUNTY OF NEW YORK )
On this ____ day of______________, 1989, before me
personally came _________________, to me known, who, being by me
duly sworn, did depose and say that he resides at
________________, and that he is a Vice President of
MANUFACTURERS HANOVER TRUST COMPANY, one of the corporations
described in and which executed the foregoing instrument; that he
knows the seal of said corporation; that the seal affixed to said
instruments is such corporate seal; that it was so affixed by
order of the Board of Directors of said corporation; and that he
signed his name thereto by like order.
SCHEDULE 1
1. The Equalization Benefit Plan for Participants of the
Retirement Program Plan for Employees of Union Carbide
Corporation and Its Participating Subsidiary Companies
(hereinafter, together with all amendments thereto from time to
time in effect, referred to as the "Equalization Plan").
2. The Supplemental Retirement Income Plan (hereinafter,
together with all amendments thereto from time to time in effect,
referred to as the "Supplemental Retirement Income Plan").
3. The 1983 Union Carbide Bonus Deferral Program
(hereinafter, together with all amendments thereto from time to
time in effect, referred to as the "1983 Bonus Deferral Plan").
4. The 1984 Union Carbide Bonus Deferral Program
(hereinafter, together with all amendments thereto from time to
time in effect, referred to as the "1984 Bonus Deferral Plan").
5. The Benefit Plan for Designated Key International
Management Employees (hereinafter, together with all amendments
thereto from time to time in effect, referred to as the "Key
International Management Plan").
6. All outstanding severance compensation agreements of
the Company as approved by the Board of Directors of the Company
(hereinafter, together with all amendments thereto from time to
time in effect, referred to as "Severance Compensation
Agreements").
SCHEDULE 2
1. The Equalization Benefit Plan for Participants of the
Retirement Program Plan for Employees of Union Carbide
Corporation and It's Participating Subsidiary Companies.
2. The Supplemental Retirement Income Plan.
3. The 1983 Union Carbide Bonus Deferral Program.
4. The 1984 Union Carbide Bonus Deferral Program.
5. The Benefit Plan for Designated Key International
Management Employees.
6. All outstanding severance compensation agreements of
the Company as approved by the Board of Directors of the Company.
7. Special Severance Protection Program.
SCHEDULE 3
TRUSTEE'S FEES
Prior to Unfriendly Change in Control $ 55,000 Annually
Subsequent to Unfriendly Change in Control $200,000 Annually