Exhibit 10.24.0
UCAR CARBON
BENEFITS PROTECTION TRUST
UCAR CARBON
BENEFITS PROTECTION TRUST
This AMENDED AND RESTATED AGREEMENT, effective as of the first day of
August, 2003, by and between UCAR Carbon Company Inc., a Delaware corporation
("Company"), and Vanguard Fiduciary Trust Company, a trust company incorporated
under Chapter 10 of the Pennsylvania Banking Code ("Trustee").
W I T N E S S E T H:
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WHEREAS, Company has adopted the plans, programs and severance compensation
agreements 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,
programs and agreements 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, Company has previously established the UCAR Carbon Benefits
Protection Trust and the UCAR Carbon Compensation Deferral Program Trust in
order to ensure that its employees and their beneficiaries will receive the
benefits which Company is obligated to provide for them or which they reasonably
anticipate receiving pursuant to the Plans; and
WHEREAS, these trusts are intended to be "grantor trusts" with the corpus
and income of the trusts treated as assets and income of 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, Company intends that the assets of the trusts will be subject to
the claims of creditors of Company as provided in Section 4; and
WHEREAS, Company intends that the existence of the trusts 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 or the Agreements
prior to actual payment of benefits thereunder; and
WHEREAS, Company wishes the amend and restate the trusts into a single UCAR
Carbon Benefits Protection Trust Agreement (hereinafter referred to as the
"Trust"); and
WHEREAS, Company wishes to name Vanguard Fiduciary Trust Company as Trustee
of the Trust; and
WHEREAS, 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 Company;
NOW, THEREFORE, the parties do hereby establish the Trust and agree that
the Trust shall be comprised, held and disposed of as follows:
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SECTION 1. Definitions.
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(a) "Accounts" shall mean, collectively, the Non-Qualified Plans Account,
the Compensation Deferral Account, the Defined Contribution Account, the
Severance Agreements Account, the TCN Account, the Benefits Protection Account
and such other Account(s) as may subsequently be established under Section 2.
(b) "Administrative Committee" shall mean the Administrative Committee of
the Benefits Protection Trust empowered to administer the Trust after a Change
in Control, as described in Section 15.
(c) "Authorized Person" shall mean an employee of Company or member of the
Non-Qualified Plans Committee or the Administrative Committee who is authorized
to execute and deliver, in the and on behalf of Company, the Non-Qualified Plans
Committee or the Administrative Committee, documents or instructions relating to
the Trust.
(d) "Beneficiary" shall mean the beneficiary designated by a Participant
under one or more of the Plans.
(e) A "Change in Control" shall be deemed to occur if any of the following
circumstances shall occur:
(a) any "person" or "group" within the meaning of Section
13(d) or 14(d)(2) of the Exchange Act becomes the beneficial owner of
15% or more of the then outstanding Common Stock or 15% or more of the
then outstanding voting securities of the Corporation;
(b) any "person" or "group" within the meaning of Section
13(d) or 14(d)(2) of the Exchange Act acquires by proxy or otherwise
the right to vote on any matter or question with respect to 15% or
more of the then outstanding Common Stock or 15% or more of the
combined voting power of the then outstanding voting securities of the
Corporation;
(c) Present Directors and New Directors cease for any reason
to constitute a majority of the Board of Trustees of the Corporation
(and, for purposes of this clause (c), "Present Directors" shall mean
individuals who at the beginning of any consecutive twenty-four month
period were members of the Board and "New Directors" shall mean
individuals whose election by the Board or whose nomination for
election as directors by the Corporation's stockholders was approved
by a vote of at least two-thirds of the directors then in office who
were Present Directors or New Directors);
(d) the stockholders of the Corporation approve a plan of
complete liquidation or dissolution of the Corporation; or
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(e) consummation of:
(i) a reorganization, restructuring,
recapitalization, reincorporation, merger or consolidation
of the Corporation (a "Business Combination") unless,
following such Business Combination, (a) all or
substantially all of the individuals and entities who were
the beneficial owners of the Common Stock and the voting
securities of the Corporation outstanding immediately prior
to such Business Combination beneficially own, directly or
indirectly, more than 50% of the common equity securities
and the combined voting power of the voting securities of
the corporation or other entity resulting from such Business
Combination outstanding after such Business Combination
(including, without limitation, a corporation or other
entity which as a result of such Business Combination owns
the Corporation or all or substantially all of the assets of
the Corporation or Company either directly or through one or
more subsidiaries) in substantially the same proportions as
their ownership immediately prior to such Business
Combination of outstanding Common Stock and the combined
voting power of the outstanding voting securities of the
Corporation, respectively, (b) no "person" or "group" within
the meaning of Section 13(d) or 14(d)(2) of the Exchange Act
(excluding (1) any corporation or other entity resulting
from such Business Combination and (2) any employee benefit
plan (or related trust) of Company or any corporation or
other entity resulting from such Business Combination)
beneficially owns 15% or more of the common equity
securities or 15% or more of the combined voting power of
the voting securities of the corporation or other entity
resulting from such Business Combination outstanding after
such Business Combination, except to the extent that such
beneficial ownership existed prior to such Business
Combination with respect to the Common Stock and the voting
securities of the Corporation, and (c) at least a majority
of the members of the board of directors (or similar
governing body) of the corporation or other entity resulting
from such Business Combination were members of the Board of
Trustees of the Corporation at the time of the execution of
the initial agreement providing for such Business
Combination or at the time of the action of the Board
approving such Business Combination, whichever is earlier;
or
(ii) 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 Corporation or
Company, whether held directly or indirectly through one or
more subsidiaries (excluding any pledge, mortgage, grant of
security interest, sale-leaseback or similar transaction,
but including any foreclosure sale), provided, that, for
purposes of clauses (e)(i) and (e)(ii) above, the
divestiture of less than substantially all of the assets of
the Corporation or Company in one transaction or a series of
related transactions, whether effected by sale, lease,
exchange, spin-off, sale of stock of or merger or
consolidation of a subsidiary, transfer or otherwise, shall
not constitute a Change in Control.
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Notwithstanding the foregoing, a Change in Control of the Corporation shall
not be deemed to occur pursuant to clause (a) or (b) above, solely because 15%
or more of the then outstanding Common Stock or the then outstanding voting
securities of the Corporation is or becomes beneficially owned or is directly or
indirectly held or acquired by one or more employee benefit plans (or related
trusts) maintained by Company.
For purposes of this Agreement, references to "beneficial owner" and
correlative phrases shall have the same definition as set forth in Rule 13d-3
under the Exchange Act (except that ownership by underwriters for purposes of a
distribution or offering shall not be deemed to be "beneficial ownership"),
references to the Act or rules and regulations thereunder shall mean those in
effect on May 9, 2000 and references to "Common Stock" shall mean the common
stock of the Corporation.
(f) "Contract" shall mean a participating or nonparticipating insurance
and/or annuity contract as described in Section 8.
(g) "Investment Director" shall mean the person or entity chosen by Company
or the Chief Financial Officer of Company prior to a Change in Control, or
chosen by the Administrative Committee after a Change in Control, to direct the
investment of certain assets in the Trust.
(h) "Investment Manager" shall mean an institution chosen by Company or the
Chief Financial Officer of Company prior to a Change in Control, or chosen by
the Administrative Committee after a Change in Control, to serve as Investment
Director.
(i) "Compensation Deferral Program" shall mean the UCAR Carbon Compensation
Deferral Program.
(j) "Corporation" shall mean Graftech International Ltd.
(k) "Defined Contribution Plan Amount" shall mean the amount of the make-up
contributions and excess matching contributions made by Company to the Trust
which are attributable to the excess contributions which, if not for Code
limitations, would be made under UCAR Carbon Savings Plan, and which shall be
paid under the Compensation Deferral Program.
(l) "Insolvent" or "Insolvency" shall mean either: (i) Company is unable to
pay its debts as they become due, or (ii) Company is subject to a pending
proceeding as a debtor under the United States Bankruptcy Code.
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(m) "Non-Qualified Plans Amount" shall mean the lump sum amounts which are
attributable to the prior non-qualified plans sponsored by Company and which
will be paid under the Compensation Deferral Program.
(n) "Non-Qualified Plans Committee" shall mean the Non-Qualified Plans
Administrative Committee empowered to administer certain provisions of the Trust
prior to a Change in Control, as described in the Benefits Protection Trust.
(o) "Participant" shall mean a participant in one or more of the Plans.
(p) "Plans" shall mean those plans, programs and agreements listed on
Schedule 1 attached hereto or as hereafter added to Schedule 1.
(q) "Severance Agreements" shall mean the Severance Compensation Agreements
between certain individuals and Company, as in effect from time to time.
(r) "TCN Plan" shall mean the UCAR TCN Pension Plan, as it may be amended
from time to time.
SECTION 2. Establishment of Trust.
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(a) Company hereby establishes with Trustee and Trustee hereby accepts a
trust consisting of the following property (subject to the rights of Company to
withdraw such property pursuant to Paragraph (e) of this Section 2):
(1) such cash or other property acceptable to Trustee as shall
be paid or delivered to Trustee from time to time as
contributions with respect to Company's obligations
attributable to the Non-Qualified Plans Amount, together
with the earnings, income, additions and appreciation
thereon and thereto (all of which is hereinafter called the
"Non-Qualified Plan Account");
(2) such cash or other property acceptable to Trustee as shall
be paid or delivered to Trustee from time to time as
contributions with respect to Company's obligations under
the Compensation Deferral Program, together with the
earnings, income, additions and appreciation thereon and
thereto (all of which is hereinafter called the
"Compensation Deferral Account");
(3) such cash or other property acceptable to Trustee as shall
be paid or delivered to Trustee from time to time as
contributions with respect to Company's obligations
attributable to the Defined Contribution Plan Amount,
together with the earnings, income, additions and
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appreciation thereon and thereto (all of which is
hereinafter called the "Defined Contribution Account");
(4) such cash or other property acceptable to Trustee as shall
be paid or delivered to Trustee from time to time to be used
to satisfy future liabilities of Company with regard to
Severance Compensation Agreements between certain
individuals and Company, together with the earnings, income,
additions and appreciation thereon and thereto (all of which
is hereinafter called the "Severance Account"); and
(5) such cash or other property acceptable to Trustee as shall
be paid or delivered to Trustee from time to time to be used
to satisfy future liabilities of Company with regard to the
TCN Plan, together with the earnings, income, additions and
appreciation thereon and thereto (all of which is
hereinafter called the "TCN Plan Account"); and
(6) such cash or other property acceptable to Trustee in the
amount of two hundred fifty thousand dollars ($250,000),
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) Trustee or the Investment Director, if applicable, for investment
purposes only, may commingle all Trust assets and treat them as a single fund,
but the records of Trustee or the Investment Director, if applicable, at all
times shall show the amounts of the Trust allocable to the Non-Qualified Plans
Account, the Defined Contribution Account, the Compensation Deferral Account,
the Severance Account, the TCN Plan Account, the Benefits Protection Account and
such other account(s) as may subsequently be established under this Trust.
(c) The assets of the Accounts shall be used to discharge the obligations
of Company as follows:
(1) the assets of the Non-Qualified Plans Account, the
Defined Contribution Plan Account and the Compensation Deferral
Program Account shall be used to discharge the obligations of the
Compensation Deferral Program;
(2) the assets of the Severance Account shall be used to
discharge the severance obligations of Company under the Severance
Agreements;
(3) the assets of the TCN Plan Account shall be used to
discharge the obligations of Company under the TCN Plan;
(4) the assets of the Benefits Protection Account may be
used as set forth in Paragraph (c) of Section 8, and Section 15;
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(5) after a Change of Control occurs, the assets of each
Account, upon the termination or expiration of the plan, program or
agreements for which such Account was established, and the
satisfaction of all liabilities with regard to such terminated or
expired plan, program or agreements, shall be distributed among such
remaining Account(s) that the Administrative Committee determines in
its sole discretion.
(d) Prior to a Change in Control, the Trust hereby established is revocable
by the Company.
(e) 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 Trustee and/or the
Non-Qualified Plans Committee or the Administrative Committee if the amounts
transferred pursuant to the Benefits Protection Account are exhausted. Prior to
a Change in Control, the Company may make such withdrawals from the Trust as it
shall determine.
(f) The Trust is intended to be a grantor trust, of which Company is the
grantor, within the meaning of Sections 671 through 678 if the Code, and shall
be construed accordingly.
(g) The principal of the Trust, and any earnings thereon shall be held
separate and apart from other funds of Company and shall be used exclusively for
the uses and purposes of Participants and general creditors as herein set forth.
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
Participants and their Beneficiaries against Company. Any assets held by the
Trust will be subject to the claims of Company's general creditors under federal
and state law in the event of Insolvency.
(h) Company, in its sole discretion, may at any time, or from time to time,
make additional deposits of cash, securities (including the Corporation's stock)
or other property in trust with Trustee to augment the principal to be held,
administered and disposed of by Trustee as provided in this Trust Agreement.
Neither Trustee nor any Participant or Beneficiary shall have any right to
compel such additional deposits.
(i) Upon a Change of Control, Company shall, as soon as possible, but in no
event longer than five (5) days following the Change of Control make an
irrevocable contribution to the Trust in an amount that is sufficient to pay
each Participant or Beneficiary the benefits to which Participants or
Beneficiaries would be entitled pursuant to the terms of the Plans as of the
date on which the Change of Control occurred.
SECTION 3. Payments to Participants and Their Beneficiaries.
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(a) Subject to Paragraph (f) of Section 2 hereof, Paragraph (b) of this
Section 3 and Paragraph (b) of Section 16 hereof, Trustee, from time to time
upon receipt of direction from the Non-Qualified Plans Committee prior to a
Change in Control, and from the Administrative Committee after a Change in
Control, shall make payments from the Trust, as specified in such direction to
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such persons, in such manner and in such amounts as the Non-Qualified Plans
Committee or the Administrative Committee, as the case may be, shall direct, and
amounts paid pursuant to such direction thereafter no longer shall constitute a
part of the Trust.
(b) Company may, from time to time prior to a Change in Control, furnish
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"). Trustee shall be entitled to
rely on the accuracy of the Participant Data provided by Company prior to a
Change in Control, and shall have no duty to verify the accuracy thereof.
Company shall, after a Change in Control, furnish the Administrative Committee
and 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 UCAR Carbon Retirement Plan 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
Administrative Committee may reasonably request or which the Administrative
Committee may deem necessary to administer this Trust.
Following a Change in Control and notwithstanding any other provisions of
this Agreement, Trustee shall, without direction from 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 Administrative
Committee shall determine they are entitled to be paid under the Plans based on
the most recent Participant Data furnished to the Administrative Committee by
Company and any supplemental information furnished to the Administrative
Committee by a Participant or Beneficiary upon which the Administrative
Committee may reasonably rely in making such determination. The Administrative
Committee may make such reasonable inquiry of Company as is necessary to
determine whether any amounts that would otherwise be payable under this
Agreement have previously been paid by Company, and may reasonably rely on any
information provided by Company with regard to such payment. A determination by
the Administrative Committee with regard to a Participant's entitlement to
payments under the terms of this Agreement shall be binding as to all
Participants and Company.
(c) In the event it shall be determined prior to a 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 Trustee, upon receipt of
direction from Company, shall make payments from the Trust to such persons, in
such manner and in such amounts as Company shall direct, for purposes of (1)
paying the amount of Federal and state 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 a
Change in Control occurs, then each Participant or Beneficiary who is subject to
such tax, may notify the Administrative Committee, in writing, to direct Trustee
to make payments from the Trust for either of the purposes set forth in section
(1) or (2) of the preceding sentence. Trustee shall not make the payments for
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the purposes set forth in the first sentence of this Paragraph (c) without such
written direction and Trustee may request such documentation as it reasonably
deems necessary to evidence the amount of such payments.
(d) Payments to Participants and Beneficiaries pursuant to Paragraphs (b)
and (c) of this Section 3 shall be made by Trustee to the extent that Trust
funds for such purposes are sufficient to allow such payments. Subject to
Paragraph (d) of Section 2, in any month in which the Administrative Committee
directs Trustee to make payments from the Trust and the Administrative Committee
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 a Change in Control occurs, 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 Company's obligations under
the Plans.
SECTION 4. Trustee Responsibility Regarding Payments to Trust Beneficiary
When Company is Insolvent.
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(a) Trustee shall cease payment of benefits to Participants and
Beneficiaries if Company is Insolvent.
(b) At all times during the continuance of this Trust, as provided in
Section 2(h) 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.
(1) The Board of Directors and the Chief Executive Officer
of Company shall have the duty to inform Trustee in writing of
Company's Insolvency. If a person claiming to be a creditor of Company
alleges in writing to Trustee that Company has become Insolvent,
Trustee shall determine whether Company is Insolvent and, pending such
determination, Trustee shall discontinue payment of benefits to
Participants or Beneficiaries.
(2) Unless Trustee has actual knowledge of Company's
Insolvency, or has received notice from Company or a person claiming
to be a creditor alleging that Company is Insolvent, Trustee shall
have no duty to inquire whether Company is Insolvent. Trustee may in
all events rely on such evidence concerning Company's solvency as may
be furnished to Trustee and that provides Trustee with a reasonable
basis for making a determination concerning Company's solvency.
(3) If at any time Trustee has determined that Company is
Insolvent, Trustee shall discontinue payments to Participants or
Beneficiaries and shall hold the assets of the Trust for the benefit
of Company's general creditors. Nothing in this Trust Agreement shall
in any way diminish any rights of Participants or Beneficiaries to
pursue their rights as general creditors of Company with respect to
benefits due under the Plan or otherwise.
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(4) Trustee shall resume the payment of benefits to
Participants or Beneficiaries in accordance with Section 4 of this
Trust Agreement only after Trustee has determined that Company is not
Insolvent (or is no longer Insolvent).
(c) Provided that there are sufficient assets, if Trustee discontinues the
payment of benefits from the Trust pursuant to subsection (b)(3) hereof and
subsequently resumes such payments, the first payment following such
discontinuance shall include the aggregate amount of all payments due to
Participants or Beneficiaries under the terms of the Plan for the period of such
discontinuance, less the aggregate amount of any payments made to Participants
or Beneficiaries by Company in lieu of the payments provided for hereunder
during any such period of discontinuance.
SECTION 5. Payments to Company.
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Except as provided herein, Company shall have no right or power to direct
Trustee to return to Company or to divert to others any of the Trust assets
before all payments of benefits have been made to Participants and Beneficiaries
pursuant to the terms of the Plan.
SECTION 6. Investment Authority.
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(a) Subject to Paragraph (b) of this Section 6, Company, prior to a Change
in Control, shall have exclusive authority and discretion to manage and control
the Trust assets, and pursuant to such authority and discretion, may direct
Trustee, to the extent permitted by law, to exercise, from time to time and at
any time, the power:
(1) To invest and reinvest the assets of 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; provided, however, that Trustee, upon
specific directions in writing from Company, shall invest and reinvest some or
all of the assets of the Trust in qualifying securities issued by Company or by
an affiliate of Company, unless Trustee shall deem such directed investment or
reinvestment to be inconsistent with the provisions of Paragraph (a) of Section
11 and that Trustee may retain any such securities acquired for the Trust at the
direction of Company until Company directs Trustee to dispose of them; but no
direction of Company to sell any securities issued by Company or by an affiliate
of Company shall be binding if it would require Trustee to violate any law
respecting the public distribution of securities, and, in any event, without
limiting the generality of the provisions of Section 18, Company agrees, to the
extent permitted by law, to indemnify Trustee and hold it harmless from and
against any claim or liability that may be asserted against it, otherwise than
on account of Trustee's breach of its own duties, by reason of Trustee's
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investing in, or reinvesting in or selling such securities in accordance with
any direction from Company or by reason of Trustee's failure to sell any such
securities in the absence of any direction from Company to sell them;
(2) 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 in accordance with
directions provided to the Trustee by the Company;
(3) 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;
(4) To exercise or sell any conversion or subscription or other rights
appurtenant to any stock, security or other property held in the Trust;
(5) To borrow from any lender 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;
(6) 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 the Company to be
worthless;
(7) To invest and reinvest any property in the Trust in any other form
or type of investment not specifically mentioned in this Paragraph (b) of
Section 4, so long as such form or type of investment is a form or type of
investment approved by the Chief Financial Officer of Company, or such other
person designated by Company, for the investment of assets of the Trust;
(8) To collect and receive any and all money and other property due
the Trust and give full discharge therefor;
(9) To deposit cash into interest bearing accounts in the banking
department of Trustee or an affiliated banking organization;
(10) To commence or defend suits or legal proceedings to protect any
interest of the Trust, and may represent the Trust in all suits or legal
proceedings in any court or before any other body or tribunal;
(11) To take all action necessary to pay for authorized transactions,
including borrowing or raising monies from any lender, to settle security
purchases and/or foreign exchange or contracts for foreign exchange, and
securing the repayments thereof by pledging all or any part of the Account;
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(12) To appoint custodians or subcustodians, domestic or foreign
(including affiliates of Trustee), as to part or all of the Trust. Trustee shall
not be responsible or liable for any losses or damages suffered by Company
arising as a result of the insolvency of any custodian or subcustodian appointed
by the Company or those appointed by the Trustee, except to the extent Trustee
was negligent in its selection or continued retention of such agent;
(13) To hold property in nominee name, in bearer form, or in book
entry form, in a clearinghouse corporation or in a depository (including an
affiliate of Trustee), so long as Trustee's records clearly indicate that the
assets held are a part of the Trust. Trustee shall not be responsible for any
losses resulting from the deposit or maintenance of securities or other property
(in accordance with market practice, custom, or regulation) with any recognized
foreign or domestic clearing facility, book-entry system, centralized custodial
depository, or similar organization; and
(14) To generally do all acts, whether or not expressly authorized,
which Trustee may deem necessary or desirable for the protection of the Trust.
(b) (1) (A) Prior to a Change in Control, the Chief Financial Officer of
Company, or such other person designated by Company, at any time and from time
to time may direct 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 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 Chief Financial Officer
of Company may be an employee of Company or a subsidiary or affiliate of
Company, or an Investment Manager who is not an employee, subsidiary or
affiliate of 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. 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 Company.
In the event of any vacancy in the office of Investment Director, Company 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 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 Company's
acting in respect of that Investment Director's Segregated Investment Account
pursuant to direction from the Investment Director shall be deemed to authorize
Company to direct Trustee on the investment or the assets of that Investment
Director's Segregated Investment Account, and subparagraphs (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 Section 6 shall have exclusive authority and discretion to manage and
control the assets of that Investment Director's Segregated Investment Account,
12
and pursuant to such authority and discretion may direct 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 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 Company or by an affiliate of Company, unless Trustee shall
deem such directed investment or reinvestment to be inconsistent with
the provisions of Paragraph (a) of Section 11 and that 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 Trustee to dispose of
them; but no direction of any Investment Director to sell any
securities issued by Company or by an affiliate of Company shall be
binding if it would require Trustee to violate any law respecting the
public distribution of securities, and, in any event, without limiting
the generality of the provisions of Section 18, Company agrees, to the
extent permitted by law, to indemnify Trustee and hold it harmless
from and against any claim or liability that may be asserted against
it, otherwise than on account of Trustee's breach of his own duties,
by reason of Trustee's investing in, or reinvesting in or selling such
securities in accordance with any direction from any Investment
Director or by reason of 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 Trustee
in subparagraphs (2) through (10) of Paragraph (a) of this Section 6.
(3) In addition, each Investment Director may direct the Trustee 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 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.
13
(4) Trustee shall exercise in respect of each Investment Director's
Segregated Investment Account the powers set forth in Paragraph (b) (2) of this
Section 6 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 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 Trustee by that
Investment Director, and the execution of each such order shall be confirmed by
the broker to that Investment Director and to Trustee. Such notification shall
be authority to 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 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
Trustee's failure to comply with Trustee's own duties, 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 which
are subject to the management of any Investment Director. Without limiting the
generality of the foregoing, 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 Investment Account, pursuant
to this Paragraph (b), or pursuant to a notification of an order to purchase or
sell securities by the Administrative Committee or for the account of any
Investment Director's Segregated Investment Account issued by that Investment
Director nor shall Trustee be liable by reason of its refraining from taking any
action with respect to any Investment Director's Segregated Investment Account
because of the failure of such Investment Director to give such direction or
order; 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 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.
(7) Without limiting the generality of the provisions of Section 18,
Company agrees, to the extent permitted by law, to indemnify Trustee and hold it
harmless from and against any claim or liability that may be asserted against
it, otherwise than on account of Trustee's breach of his own duties, by reason
of 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 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 a Change in Control occurs and subject to Section 7 hereof, the
Administrative Committee shall have the exclusive authority and discretion to
manage and control the Trust assets, and may appoint an Investment Director or
an Investment Manager including an affiliate of Company or Trustee to manage the
investment of the Trust assets. Pursuant to such authority and discretion, the
Administrative Committee, or any investment manager appointed pursuant to this
14
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 a Change in Control
occurs, and shall invest and reinvest the Trust, without distinction between
principal and income, in accordance with the provisions described in Paragraph
(a) of this Section 6.
(d) Contractual Settlement and Income; Market Practice Settlements
(1) In accordance with Trustee's standard operating
procedure, Trustee shall credit the Trust with income and maturity
proceeds on securities on contractual payment date net of any taxes or
upon actual receipt. To the extent Trustee credits income on
contractual payment date, Trustee may reverse such accounting entries
to the contractual payment date if Trustee reasonably believes that
such amount will not be received.
(2) In accordance with Trustee's standard operating
procedure, Trustee will attend to the settlement of securities
transactions on the basis of either contractual settlement date
accounting or actual settlement date accounting. To the extent Trustee
settles certain securities transactions on the basis of contractual
settlement date accounting, Trustee may reverse to the contractual
settlement date any entry relating to such contractual settlement if
Trustee reasonably believes that such amount will not be received.
(3) Settlements of transactions may be effected in trading
and processing practices customary in the jurisdiction or market where
the transaction occurs. Company acknowledges that this may, in certain
circumstances, require the delivery of cash or securities (or other
property) without the concurrent receipt of securities (or other
property) or cash. In such circumstances, Trustee shall have no
responsibility for nonreceipt of payment (or late payment) or
nondelivery of securities or other property (or late delivery) by the
counterparty.
SECTION 7. Administrative Powers. 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 Trustee of its
responsibility for the safe custody and disposition of the Trust in accordance
with the provisions of this Agreement; Trustee's books and records shall at all
times show that such property is part of the Trust; and 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
Company from time to time may specify prior to a Change in Control in order to
meet the administrative expenses of the Trust or anticipated distributions
therefrom; and
(c) To do all other acts that Trustee may deem necessary or proper to carry
out any of the powers set forth in the Trust or otherwise in the best interests
of the Trust.
15
SECTION 8. Insurance and Annuity Contracts.
-------------------------------
(a) Trustee, upon written direction of Company prior to a Change in
Control, or from the Administrative Committee after a Change in Control, shall
pay from the Trust such sums to such insurance company or companies for the
purpose of procuring participating or nonparticipating insurance and/or annuity
contracts for the Trust (hereinafter in this Section 8 referred to as
"Contracts"). Company, both prior to and after a Change in Control, shall
prepare, or cause to be prepared in such form as it shall prescribe, the
application for any Contract to be applied for. Trustee shall receive and hold
in the Trust, subject to the provisions hereinafter set forth in this Section 8,
all Contracts so obtained.
(b) Trustee shall be the complete and absolute owner of Contracts held in
the Trust and, upon written direction of Company prior to a 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 a Change in Control,
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 Company and 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. Trustee, upon the written direction of Company prior to a Change
in Control, shall deliver any Contract held in the Trust to such person or
persons as may be specified in the direction.
(c) 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 Company prior to a Change in Control,
Trustee shall pay from the Trust premiums, assessments, dues, charges and
interest, if any, upon any Contract held in the Trust. Trustee shall have no
duty to make any such payment unless and until it shall have received such
direction. After a Change in Control, Trustee shall pay from the Trust premiums,
assessments, dues, charges and interest, if any, upon any Contract held in the
Trust, only upon direction from the Administrative Committee.
(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 Trustee as sole owner of any Contract
issued by it and held in the Trust, without inquiry as to the authority of
Trustee to act, and may accept and rely upon any written notice, instruction,
direction, certificate or other communication from Trustee believed by it to be
genuine and to be signed by an officer of 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
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
16
shall be required to look into the terms of this Agreement, to question any
action of Trustee or to see that any action of Trustee is authorized by the
terms of this Agreement.
(f) Anything contained herein to the contrary notwithstanding, neither
Company, the Administrative Committee nor 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 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 uncollectable.
(g) After a Change in Control, the Administrative Committee shall exercise
any of the powers set forth in this Section 8, 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 Company under the Plans.
SECTION 9. Disposition of Income.
---------------------
During the term of the Trust, all income received by the Trust, net of
expenses and taxes, shall be accumulated and reinvested.
SECTION 10. Accounting by Trustee.
---------------------
Trustee shall keep accurate and detailed records of all investments,
receipts and disbursements, and all other transactions required to be made,
including such specific records as shall be agreed upon in writing between
Company and Trustee prior to a Change in Control and the Administrative
Committee and Trustee after a Change in Control. Trustee will use its best
efforts to deliver to Company, and the Administrative Committee after a Change
in Control, within ninety (90) days following the close of each calendar year
and within ninety (90) days after the removal or resignation of Trustee, but in
no event later than one hundred twenty (120) days thereafter, a written account
of its administration of the Trust during such year or during the period from
the close of the last preceding year to the date of such removal or resignation,
setting forth all investments, receipts and disbursements and other transactions
effected by it, including a description of all securities and investments
purchased and sold with the cost or net proceeds of such purchases or sales
(accrued interest paid or receivable being shown separately), and showing all
cash, securities and other property held in the Trust at the end of such year or
as of the date of such removal or resignation, as the case may be.
SECTION 11. Responsibility of Trustee.
-------------------------
(a) Trustee shall act with the care, skill, prudence and diligence under
the circumstances then prevailing that a prudent person acting in like capacity
and familiar with such matters would use in the conduct of an enterprise of a
like character and with like aims; provided, however, that Trustee shall incur
17
no liability to any person for any action taken pursuant to a direction, request
or approval given by Company which is contemplated by, and in conformity with,
the terms of the Plans or this Trust and is given in writing by Company. In the
event of a dispute between Company and a party, Trustee may apply to a court of
competent jurisdiction to resolve the dispute.
(b) If Trustee undertakes or defends any litigation arising in connection
with this Trust, Company agrees to indemnify Trustee against Trustee's costs,
expenses and liabilities (including, without limitation, attorneys' fees and
expenses) relating thereto and to be primarily liable for such payments. If
Company does not pay such costs, expenses and liabilities in a reasonably timely
manner, Trustee may obtain payment from the Trust.
(c) Trustee may consult with legal counsel (who may also be counsel for
Company or the Administrative Committee generally) with respect to any of its
duties or obligations hereunder.
(d) Trustee may hire agents, accountants, actuaries, investment advisors,
financial consultants or other professionals to assist it in performing any of
its duties or obligations hereunder.
(e) 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, 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.
(f) Notwithstanding any powers granted to Trustee pursuant to this Trust
Agreement or to applicable law, 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.
(g) Unless resulting from Trustee's negligence, willful misconduct, lack of
good faith, or breach of its duties under this Agreement, Company shall
indemnify and save harmless Trustee from, against, for and in respect of any and
all damages, losses, obligations, liabilities, liens, deficiencies. costs and
expenses, including, without limitation, reasonable attorneys' fees incident to
any suit, action, investigation, claim or proceedings suffered, sustained,
incurred or required to be paid by Trustee in connection with the Plans or this
Trust. If Company does not pay such costs, expenses and liabilities for which it
is liable hereunder in a reasonably timely manner, Trustee may obtain payment
from the Trust.
SECTION 12. Taxes, Compensation and Expenses of Trustee, the Non-Qualified
Plans Committee and the Administrative Committee.
--------------------------------------------------------------
(a) It is the intent of Company and Trustee that Company shall be
responsible for determining and effecting all Federal and state tax aspects of
the Plans and the Trust, including without limitation the payment of income
taxes on the Trust's income, if any, any required withholding of income or other
18
payroll taxes in connection with the payment of benefits from the Trust pursuant
to the Plans, and all reporting required in connection with any such taxes. To
the extent that Company is required by applicable law to pay or withhold such
taxes or to file such reports, such obligation shall be a responsibility
allocated to Company, as the case may be, hereunder. To the extent Trustee is
required by applicable law to pay or withhold such taxes or to file such
reports, Company shall inform Trustee of such obligation, shall direct Trustee
with respect to the performance of such obligations and shall provide Trustee
with all information required by Trustee to meet such obligations.
Company shall pay any Federal and state 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 Company, or the Administrative Committee, if
applicable, in their discretion, or Trustee, in its discretion, may contest the
validity or amount of any tax, assessment, claim or demand respecting the Trust
or any part thereof. Upon direction from the Administrative Committee, Trustee
shall deduct any payroll taxes required to be withheld with respect to any
payments made pursuant to the Trust.
(b) Trustee, without direction from Company, or the Administrative
Committee, if applicable, 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 and the Administrative
Committee that are not paid by Company including, but not limited to,
Participant record keeping expenses, investment management fees, computer time
charges, data retrieval and input costs, charges for time expended by personnel
of Trustee in fulfilling Trustee's duties, expenses incurred by the members of
the Non-Qualified Plans Committee or the Administrative Committee in performance
of their duties, and the compensation of the Administrative Committee.
(c) Company shall pay all administrative and Trustee's fees and expenses.
If not so paid, the fees and expenses shall be paid from the Trust. Trustee
shall be entitled to fees for services, as mutually agreed, between Company and
Trustee prior to a Change in Control and as subsequently agreed upon renewal
between the Administrative Committee and Trustee following a Change in Control.
Company acknowledges that as part of Trustee's compensation, Trustee may earn
interest on balances including disbursement balances and balances arising from
purchase and sale transactions. If Trustee advances cash or securities to the
Trust for any purpose, including the purchase or sale of foreign exchange or of
contracts for foreign exchange, or in the event that Trustee shall incur or be
assessed taxes, interest, charges, expenses, assessments, or other liabilities
in connection with the performance of this Agreement, except such as may arise
from its own negligent action, negligent failure to act or willful misconduct,
any property at any time held in the Trust Fund shall be security therefor and
Trustee shall be entitled to collect from the Trust sufficient cash for
reimbursement, and if such cash is insufficient, dispose of the assets of the
Trust Fund to the extent necessary to obtain reimbursement.
(d) After a Change in Control, Trustee shall bill Company directly, on a
quarterly basis, in arrears, for all expenses described in Paragraph (b) of this
Section 12 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 Company within thirty (30) days of the billing
19
date, Trustee may pay such amounts from the Benefits Protection Account. Trustee
may take such action as it deems necessary to recover such amounts from Company;
provided that Trustee shall be obligated to take action if Company's failure to
pay causes a reduction below $250,000 in the assets of the Trust attributable to
the Benefits Protection Account.
SECTION 13. Resignation and Removal of Trustee.
----------------------------------
(a) Trustee may resign at any time by written notice to Company, and the
Administrative Committee after a Change in Control, which shall be effective
forty-five (45) days after receipt of such notice unless prior to a Change in
Control Company, and after a Change in Control the Administrative Committee, and
Trustee agree otherwise.
(b) Trustee may be removed by Company prior to a Change in Control, and the
Administrative Committee after a Change in Control, on thirty (30) days notice
or upon shorter notice accepted by Trustee.
(c) If Trustee resigns or is removed after a Change in Control, the
Administrative Committee shall select a successor trustee in accordance with the
provisions of Section 14 hereof.
(d) Upon resignation or removal of Trustee and appointment of a successor
trustee, all assets shall subsequently be transferred to the successor trustee.
The transfer shall be completed within ninety (90) days after receipt of notice
of resignation, removal or transfer, unless Company prior to a Change in
Control, and the Administrative Committee after a Change in Control, extends the
time limit.
(e) If Trustee resigns or is removed, a successor shall be appointed in
accordance with Section 14 hereof, by the effective date of resignation or
removal under paragraphs (a) or (b) of this section. In either case, Company
prior to a Change in Control, or the Administrative Committee after a Change in
Control, as the case may be, shall diligently seek to obtain a successor
trustee. Until the appointment of a successor trustee, Trustee shall continue to
perform its duties hereunder until the successor trustee is in place. If no such
appointment has been made by the effective date of resignation or removal,
Trustee may apply to a court of competent jurisdiction for appointment of a
successor or for instructions. All expenses of Trustee in connection with the
proceeding shall be allowed as administrative expenses of the Trust.
SECTION 14. Appointment of Successor.
------------------------
(a) If Trustee resigns or is removed in accordance with Section 13(a) or
(b) hereof, Company prior to a Change in Control, or the Administrative
Committee after a Change in Control, as the case may be, may appoint any third
party, such as a bank trust department or other party that may be granted
corporate trustee powers under state law, as a successor to replace Trustee upon
resignation or removal. The appointment shall be effective when accepted in
writing by the new trustee, who shall have all of the rights and powers of the
former Trustee, including ownership rights in the Trust assets. The former
Trustee shall execute any instrument necessary or reasonably requested by
20
Company prior to a Change in Control, and the Administrative Committee after a
Change in Control, or the successor trustee to evidence the transfer.
(b) The successor trustee need not examine the records and acts of any
prior trustee and may retain or dispose of existing Trust assets, subject to
Section 6 and 9 hereof. The successor trustee shall not be responsible for and
Company shall indemnify and defend the successor trustee from any claim or
liability resulting from any action or inaction of any prior trustee or from any
other past event or any condition existing at the time it becomes successor
trustee.
SECTION 15. General Duties of the Administrative Committee.
----------------------------------------------
(a) The Administrative Committee shall discharge its duties under this
Trust solely in the interest of the Participants 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; (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 Administrative
Committee shall be limited to those expressly imposed upon them by this Trust
notwithstanding any reference herein to the Plans.
(b) The Administrative Committee shall consist of either three (3) or five
(5) members who, prior to a Change in Control, shall be appointed by, and serve
at the pleasure of, the Board of Directors of the Corporation. The Board may, at
any time prior to a Change in Control, designate the members of the
Administrative Committee, fill vacancies or require the resignation of one or
more of the members of the Administrative Committee with or without cause. In
the event that a vacancy or vacancies shall occur on the Administrative
Committee prior to a Change in Control, the remaining member or members shall
act as the Administrative Committee until the Board fills such vacancy or
vacancies. However, upon a Change in Control, no member may be removed, for any
reason, by the Board. In the event that a vacancy occurs after a Change in
Control, the Board shall have no authority to fill such vacancy and the
remaining members of the Administrative Committee shall select a replacement to
serve on the Administrative Committee. No person shall be ineligible to be a
member of a Administrative Committee because he is, was or may become entitled
to benefits under any of the Plans; or because he is a director and/or employee
of Company, Affiliate or Trustee; provided, that no Participant who is a member
of the Administrative Committee shall participate in any determination by the
Administrative Committee specifically relating to the calculation or disposition
of his benefits under any of the Plans. Prior to a Change in Control, the Board
may appoint a member of the Administrative Committee to be the Chairman of the
Administrative Committee. Upon a Change in Control, the Administrative Committee
shall be responsible for appointing a member of the Administrative Committee as
the Chairman of the Administrative Committee.
(c) Except as otherwise expressly provided in this Trust or by the Board of
Directors prior to a Change in Control:
21
(1) Within thirty (30) days after a Change in Control, Company shall
notify Participants and Beneficiaries of the Plans, in a manner approved by the
Administrative Committee, in writing of the Administrative Committee's
availability to aid them in pursuing any claims they may have against Company
under the terms of those of the Plans under which they are covered. If Company
fails to do so, the Administrative Committee shall notify Participants and
Beneficiaries of the Plans in writing of the Administrative Committee's
availability to aid them in pursuing any claims they may have against Company
under the terms of those of the Plans under which they are covered.
(2) If, after a Change of Control, a Participant or Beneficiary
notifies the Administrative Committee that 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 Plans, and the
Administrative Committee determines that the assets held in the Accounts are not
available to pay such claim, then, unless the Administrative Committee shall
determine that the claim has no basis in law and fact (in which case the
Administrative Committee shall notify the Participant or Beneficiary of such
determination and shall take no further action with respect to the claim), the
Administrative Committee:
(A) will promptly attempt to negotiate with 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 Section 15 as the "Plaintiff"),
(ii) the Administrative Committee 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
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 Administrative Committee
shall direct the course of the Litigation and shall keep the Plaintiff
informed of the progress of the Litigation as the Administrative
Committee 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 Administrative Committee 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 Administrative Committee,
shall execute and deliver to the Administrative Committee a
22
document in a form acceptable to the Administrative
Committee releasing and holding harmless the Administrative
Committee from any liability resulting from the
Administrative Committee 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 Administrative Committee, the
Administrative Committee 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
Administrative Committee 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 Administrative
Committee to proceed on his behalf and delivers such writing to the
Administrative Committee and (y) appoints his own counsel and so notifies the
Administrative Committee 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 Administrative Committee, then the
Administrative Committee shall not be authorized to proceed in the Litigation on
behalf of the Plaintiff. Thereafter, the Administrative Committee 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 Administrative Committee 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
Section 15 and in determining whether to pursue or settle any Litigation. The
Administrative Committee shall have the discretion to determine the form and
nature that any Litigation against 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.
(d) Subparagraph (C) shall be inapplicable in respect of any Litigation
involving the payment of benefits under any Plans in which the Administrative
Committee is named a defendant. Any Plaintiff in an action in which the
Administrative Committee or Trustee is named a defendant shall engage his own
counsel, whose fees and expenses shall be paid by the Plaintiff, provided,
however, that the Administrative Committee 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.
(e) In the event the Administrative Committee 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 Company, then the Administrative
Committee shall reimburse the Participant or Beneficiary out of the assets of
the Benefits Protection Account 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
23
than 50% of the amount originally claimed to the Administrative Committee as the
amount owed by Company.
(f) 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 Administrative Committee pursue such claim. In the event such
holders elect to pursue their own claims, the Administrative Committee shall
promptly reimburse such holders for all attorneys fees and other expenses
incurred to the extent Company does not pay such amounts as provided in the
Severance Compensation Agreements.
(g) Company will, prior to a Change in Control, designate legal counsel to
the Administrative Committee at the expense of the Trust after a Change in
Control, to enforce the rights of Participants and Beneficiaries to benefits
under the Plans, as described above. If the designated counsel declines to
provide representation because of an ethical or legal conflict of interest, or
the Administrative Committee is not satisfied with the quality of representation
provided, the Administrative Committee, 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 Administrative
Committee with respect to its responsibilities as Administrative Committee under
this Agreement. Company may not dismiss or engage such counsel or cause the
Administrative Committee to engage or dismiss such counsel after a Change in
Control.
(h) After a Change in Control, the Administrative Committee shall have the
authority to invest and manage the assets of the Trust.
(i) The Administrative Committee shall have all powers necessary or helpful
for the carrying out of its responsibilities, and the decisions or actions of
the Administrative Committee in good faith in respect of any matter hereunder
shall be conclusive and binding upon all parties concerned.
(j) After a Change in Control, the Administrative Committee shall have the
authority to amend this Trust. No amendment shall be made without Trustee's
consent thereto in writing if, and to the extent that, the effect of such
amendment is to increase Trustee's responsibilities hereunder.
(k) Without limiting the generality of the foregoing, the Administrative
Committee shall have full discretionary authority to:
(1) Construe all terms, provisions, conditions and limitations and
determine all questions arising out of or in connection with the terms and
provisions of the Trust except as otherwise expressly provided herein;
24
(2) Make rules and regulations and determine all questions relating to
the administration of the Trust and the Administrative Committee which are not
inconsistent with the terms and provisions of this Trust; and
(3) Monitor the performance of Trustee for the Trust. In order to
accomplish this, the Administrative Committee shall meet with Trustee, at such
time as the Administrative Committee shall determine, and the Administrative
Committee shall request Trustee to present a full report on the financial
position of the Trust.
The foregoing list of powers is not intended to be either complete or
exclusive, and the Administrative Committee shall, in addition, have such powers
as may be necessary for the performance of its duties under the Trust.
(l) The Administrative Committee may employ such counsel as it may require
in carrying out the provisions of the Trust. Unless paid by Company, the
Administrative Committee shall charge the fees, charges and costs resulting from
such employment as an expense of a trust established relating to the Trust.
Unless otherwise provided by law, any person so employed by the Administrative
Committee may be legal or other counsel to Company, an affiliate, a member of
the Administrative Committee or an officer or member of the Board of Directors
or an affiliate.
(m) Each member of the Administrative Committee shall receive compensation,
as mutually agreed between Company and the Administrative Committee prior to a
Change in Control, or as determined by the Administrative Committee after a
Change in Control, for their services in connection with the Trust.
(n) The Administrative Committee may purchase such fiduciary liability
insurance or such other insurance as it deems necessary relating to the
performance of its obligations hereunder. Unless paid by Company, the
Administrative Committee shall charge the premiums and charges resulting from
such insurance as an expense of the Trust.
SECTION 16. Amendment or Termination.
------------------------
(a) This Trust may be amended by a written instrument executed by Trustee
and Company. After a Change in Control, the Administrative Committee, and not
Company, shall have the authority to amend this Trust. Notwithstanding the
foregoing, no such amendment shall conflict with the terms of the Plans.
(b) Subject bto the provisions of Section 2(d), the Trust shall not
terminate until the date on which Participants and 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 Company.
SECTION 17. General Duties of the Non-Qualified Plans Committee. The
Non-Qualified Plans Committee 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
25
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.
SECTION 18. Indemnification. Company agrees, to the extent permitted by
law, to indemnify and hold Trustee, the Non-Qualified Plans Committee and the
Administrative Committee harmless from and against any liability that they may
incur in the administration of the Trust, unless arising from Trustee's, the
Non-Qualified Plans Committee's or the Administrative Committee's own gross
negligence or willful breach of the provisions of its obligations under this
Agreement. If Company fails to indemnify and hold Trustee, the Non-Qualified
Plans Committee or the Administrative Committee harmless from and against any
liability that they may incur in the administration of this Trust pursuant to
this Section 18, the Trust shall indemnify Trustee, the Non-Qualified Plans
Committee or the Administrative Committee to the extent permitted by law.
Trustee, the Non-Qualified Plans Committee or the Administrative Committee 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.
SECTION 19. Administration of the Plans; Communications.
-------------------------------------------
(a) Company and/or the Non-Qualified Plans Committee or the Administrative
Committee shall administer the Plans as provided therein and subject to any
delegation by Company and/or the Non-Qualified Plans Committee or the
Administrative Committee and assumption by Trustee of the duties of
administering the Plans, Trustee shall not be responsible in any respect for
administering the Plans nor shall Trustee be responsible for the adequacy of the
Trust to meet and discharge all payments and liabilities under the Plans.
Trustee shall be fully protected in relying upon any written notice,
instruction, direction or other communication signed by an employee of Company
or a member of the Non-Qualified Plans Committee or the Administrative Committee
who is authorized to execute and deliver, in the name and on behalf of Company
or the Non-Qualified Plans Committee or the Administrative Committee, documents
or instruments relating to the Trust. Company and/or the Non-Qualified Plans
Committee or the Administrative Committee, from time to time, shall furnish
Trustee with the names and specimen signatures of the Authorized Persons and
shall promptly notify Trustee of the termination of office of any Authorized
Person and the appointment of a successor thereto. Until notified to the
contrary, Trustee shall be fully protected in relying upon the most recent list
of Authorized Persons furnished to it by Company and/or the Non-Qualified Plans
Committee or the Administrative Committee.
(b) Any action required by any provision of this Agreement to be taken by
the Board of Directors of Company shall be evidenced by a resolution of such
Board of Directors certified to Trustee by the Secretary or an Assistant
Secretary of Company under its corporate seal, and 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 Company and/or the Non-Qualified Plans Committee
or the Administrative Committee under any provision of this Agreement, including
any approval of or exceptions to Trustee's accounts, shall be evidenced by a
certificate signed by an Authorized Person, and Trustee shall be fully protected
26
in relying upon such certificate. Trustee may accept a certificate signed by an
Authorized Person 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 Trustee
shall be fully protected in relying upon the statements in the certificate.
(c) 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 Person, and 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
Trustee shall be sent to it at its office at 100 Vanguard Boulevard, Malvern, PA
19355, Attention: ERISA Legal Division; communications to Company shall be sent
to it at its office at 1521 Concord Pike, Suite 301, Brandywine West Building,
Wilmington, Delaware 19803, Attention Vice President, General Counsel, Human
Resources & Secretary, communications to the Non-Qualified Plans Committee shall
be sent to it at 3102 West End Avenue, Nashville, Tennessee 37203, and
communications to the Administrative Committee of the UCAR Carbon Benefits
Protection Trust shall be sent to it at 3102 West End Avenue, Nashville,
Tennessee 37203.
SECTION 20. Miscellaneous.
-------------
(a) Any provision of this Trust Agreement prohibited by law shall be
ineffective to the extent of any such prohibition, without invalidating the
remaining provisions hereof.
(b) Benefits payable to Participants and Beneficiaries under this Trust
Agreement may not be anticipated, assigned (either at law or in equity),
alienated, pledged, encumbered or subjected to attachment, garnishment, levy,
execution or other legal or equitable process.
(c) This Trust Agreement shall be governed by and construed in accordance
with the laws of the Commonwealth of Pennsylvania.
IN WITNESS WHEREOF, this instrument has been executed as of the day and
year first above written.
ATTEST: UCAR CARBON COMPANY INC.
By: -----------------------------
- ------------------------- Name:
Title:
ATTEST: VANGUARD FIDUCIARY TRUST COMPANY
- ------------------------- By: ------------------------------
Name: Dennis Simmons
Title: Principal
27
EXHIBIT A
---------
Authorization Pursuant to
Paragraph (c) of Section 15 of
the UCAR Carbon Company Inc. Benefits Protection Trust
------------------------------------------------------
TO:
This is to authorize the Trustee of the UCAR Carbon 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
Section 15 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
28
EXHIBIT B
---------
Revocation of Authorization
Pursuant to Paragraph (c) of Section 15 of
the UCAR Carbon Company Inc. Benefits Protection Trust
------------------------------------------------------
To:
This is to notify you that I revoke any prior authorization I have given to
you as Trustee of the UCAR Carbon 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
29
SCHEDULE 1
----------
1. The UCAR Carbon Compensation Deferral Program.
2. Severance Agreements between the Company and various
individuals, respectively.
3. The UCAR TCN Plan.
30
TABLE OF CONTENTS
SECTION 1. Definitions.................................................2
SECTION 2. Establishment of Trust......................................5
SECTION 3. Payments to Participants and Their Beneficiaries............7
SECTION 4. Trustee Responsibility Regarding Payments to Trust
Beneficiary When Company is Insolvent.......................9
SECTION 5. Payments to Company........................................10
SECTION 6. Investment Authority.......................................10
SECTION 7. Administrative Powers......................................15
SECTION 8. Insurance and Annuity Contracts............................16
SECTION 9. Disposition of Income......................................17
SECTION 10. Accounting by Trustee......................................17
SECTION 11. Responsibility of Trustee..................................17
SECTION 12. Taxes, Compensation and Expenses of Trustee, the
Non-Qualified Plans Committee and the Administrative
Committee..................................................18
SECTION 13. Resignation and Removal of Trustee.........................20
SECTION 14. Appointment of Successor...................................20
SECTION 15. General Duties of the Administrative Committee.............21
SECTION 16. Amendment or Termination...................................25
SECTION 17. General Duties of the Non-Qualified Plans Committee........25
SECTION 18. Indemnification............................................26
SECTION 19. Administration of the Plans; Communications................26
SECTION 20. Miscellaneous..............................................27