1 Exhibit 10.13
SUN COMPANY, INC.
DEFERRED COMPENSATION AND BENEFITS TRUST
TRUST AGREEMENT (the "Trust"), dated February 1, 1996, by and between
Sun Company, Inc., a Pennsylvania corporation (the "Company"), Mellon Bank,
N.A. (the "Trustee") and Towers Perrin (the "Recordkeeper").
WHEREAS, the Company (or certain of its subsidiaries) is or may become
obligated under certain employee benefit plans or agreements to make
payments to certain persons who at any time prior to the occurrence of a
"Change in Control" of the Company (as defined herein) were employees of
the Company (or certain of its subsidiaries) (the "Executives") and their
beneficiaries; and
WHEREAS, in order to assure that future payment of such amounts would
not be improperly withheld in the event of a Change in Control of the
Company, the Company has previously established a trust (hereinafter called
"Trust") the assets of which are subject to the claims of Company's
creditors in the event of Company's Insolvency (as herein defined in
section 5 (a)) until paid to Plan participants and their beneficiaries in
such manner and at such times as specified in the Plans; and
WHEREAS, the Company has determined to amend and restate such Trust in
its entirety, effective as of February 1, 1996, in order to meet the
requirements established in Revenue Procedure 92-64 of the United States
Internal Revenue Service; and
WHEREAS, it is the intention of the parties that this Trust, as so
amended and restated, shall constitute an unfunded arrangement and shall
not affect the status of the Plans as unfunded plans maintained to provide
deferred compensation for a select group of management or highly
compensated employees for purposes of Title I of the Employee Retirement
Income Security Act of 1974;
WHEREAS, it is the intention of Company to make contributions to such
amended and restated Trust to provide itself with a source of funds to
assist it in the meeting of its liabilities under the Plans;
NOW, THEREFORE, the parties do hereby amend and restate the Trust in
its entirety, and agree that such amended and restated Trust shall be
comprised, held and disposed of as follows:
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Section 1. The Plans
(a) The plans and/or agreements that are subject to this Trust
(collectively referred to as the "Plans") are listed on Appendix A
hereto. Prior to a Change in Control of the Company, the Compensation
Committee of the Board of Directors of the Company (the "Compensation
Committee") may from time to time designate additional plans and/or
agreements that are subject to this Trust (collectively referred to as
the "Plans") or delete any Plan from this Trust.
(b) The Company (or certain of its subsidiaries) shall continue to be
liable to the Executives to make all payments required under the terms
of the Plans to the extent such payments have not been made pursuant
to this Trust. Distributions made from the Trust to or for Executives
in respect of the Plans pursuant to Section 4 hereof, shall, to the
extent of such distributions, satisfy the Company's (or certain of its
subsidiaries') obligation to pay benefits to such Executives under the
Plans.
Section 2. Establishment of Trust
(a) Company hereby deposits with Trustee in trust the sum of $100 in cash
which shall become the principal of the Trust to be held, administered
and disposed of by Trustee as provided in this Trust Agreement.
(b) The Trust hereby established is revocable by Company; it shall become
irrevocable upon a Change of Control, as defined herein.
(c) The Trust is intended to be a grantor trust, of which Company is the
grantor, within the meaning of subpart E, part I, subchapter J,
chapter 1, subtitle A of the Internal Revenue Code of 1986, as
amended, and shall be construed accordingly.
(d) 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 Plan participants and general
creditors as herein set forth. Plan participants and their
beneficiaries shall have no preferred claim on, or any beneficial
ownership interest in, any assets of the Trust. Any rights created
under the Plans and this Trust Agreement shall be mere unsecured
contractual
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rights of Plan 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, as
defined in Section 5(a) herein.
(e) In the event of a Potential Change in Control of the Company, an additional
amount of cash (or property acceptable to the Trustee having a fair market
value equal to such amount, or some combination thereof), representing the
sum of the amounts, determined as provided below, plus an amount equal to
5% of that amount to provide for expenses and other costs of maintaining
the Trust (collectively, the "Required Funding Amount"), shall be delivered
not later than 30 days after the occurrence of a Potential Change in
Control of the Company (as defined in Section 13(e) hereof).
(f) In the event the Compensation Committee designates additional Plans that
are subject to this Trust and/or Plans subject to this Trust are amended
after a Potential Change in Control of the Company, the Treasurer shall,
unless the Trust Corpus shall theretofore have been released pursuant to
Section 6(a) hereof, recalculate the Required Funding Amount. If the amount
so calculated exceeds the fair market value of the assets then held in
trust, the Company shall promptly (and in no event later than 30 days from
the date of such recalculation) pay to the Trustee an amount of cash (or
property acceptable to the Trustee having a fair market value equal to such
amount, or some combination thereof) equal to such excess. If the Required
Funding Amount so calculated is less than the fair market value of the
assets held in trust, the Trustee shall retain such difference.
(g) If, subsequent to a Control Transaction which has not been expressly
approved by at least a majority vote of the Continuing Directors, there is
a Change in Control, Company shall, as soon as possible, but in no event
longer than one (1) day following the Change in Control, as defined herein,
make an irrevocable contribution to the Trust in an amount that is
sufficient to pay each Plan participant or beneficiary the benefits to
which Plan participants or their beneficiaries would be entitled pursuant
to the terms of the Plans as of the date on which the Change of Control
occurred. This Required Funding Amount shall be determined in a way that
will provide the Trust with sufficient assets, taking into consideration
Section 3(e), to pay all benefits accrued by the Executives through the
date of the Change in Control of the Company under the terms of the Plans
in effect on such date. The Company agrees not to challenge the Treasurer's
calculation of the required Funding Amount upon and after a Change in
Control of the Company.
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(h) The Company agrees to pay interest on any delinquent payment of the
Required Funding Amount from the date of a Change in Control of the
Company, based upon the daily average of the prime rate charged by the
Trustee.
(i) In determining the Required Funding Amount with respect to any payment
or series of payments expected to be due more than one year after the
date as of which the required Funding Amount is to be determined, the
present value of such payment or series of payments shall be
calculated by using a discount rate equal to one percentage point less
than the then lowest annual yield to maturity on United States
Treasury obligations having then remaining maturities approximately
equal to the maturity of the payment or payments being valued.
(j) Payment by the Company pursuant to Section 2(a) and 2(e) hereof shall
be accompanied by a schedule delivered to the Recordkeeper (as
described in Section 4(d) of the individual Plans for whose accounts
such payment is being made, which schedule sets forth the amounts
delivered in respect of each of the Plans. The Recordkeeper shall
maintain in an equitable manner an account for each Plan (the
"Account"). Each Account shall consist of contributions to and
payments from the Trust Corpus which are allocable to the Plan, and
earnings thereon, less disbursements therefrom attributable to the
interest of the Plan in the entire Trust Corpus.
Section 3. Investment Authority
(a) As used herein, the term "Trust Corpus" shall mean the amounts
delivered to the Trustee pursuant to the terms hereof, less amounts
distributed from the Trust pursuant to the terms hereof, plus all
income earned by the Trust, in whatever form held or invested as
provided herein.
(b) Trustee may invest in securities (including stock or rights to acquire
stock) or obligations issued by Company. All rights associated with
assets of the Trust shall be exercised by Trustee or the person
designated by Trustee, and shall in no event be exercisable by or rest
with Plan participants. Subject to investments guidelines agreed to
in writing from time to time by the Trustee and the Benefit Plans
Investment Committee until a Change in Control occurs, the Trustee
shall have the following powers and discretion in addition to those
conferred by law:
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(1) To invest and reinvest the Trust Corpus in such stocks (of any
classification, including common and preferred stocks), bonds, or
other property (real, personal or mixed) and interests in
investment companies and investment trusts;
(2) To sell, exchange, convey, transfer or dispose of, and also to
grant options with respect to, any property, whether real or
personal, at any time held by it by private contract or by public
auction, for cash or upon credit, or partly for cash and partly
upon credit, as the Trustee may deem best, and no person dealing
with the Trustee shall be bound to see to the application of the
purchase money or to inquire into the validity, expediency or
propriety of any such sale or other disposition;
(3) To acquire, hold and dispose of any real estate, at such time, in
such manner and upon such terms as the Trustee may deem
advisable; to retain, manage, operate, repair, improve,
partition, mortgage or lease for any term or terms of years any
such real estate, or to exchange all or any part thereof for
other real estate, upon such terms and conditions as the Trustee
deems proper, using other trust assets for any of such purposes
if deemed advisable;
(4) To compromise, compound and settle any debt or obligation due to
or from the Trust and to reduce the rate of interest thereon, to
extend or otherwise modify, or to foreclose upon default or
otherwise enforce or act with respect to any such obligation as
the Trustee may deem advisable;
(5) With respect to stocks, bonds or securities excluding stocks,
bonds or securities of the Company, to vote, in person or by
general or limited proxy, any stocks or other securities at any
time held in the Trust Corpus, at any meeting of stockholders or
security holders, in respect to any business which may come
before the meeting; to exercise any options appurtenant to any
stocks, bonds or other securities for the conversion thereof into
other stocks, bonds or securities; to exercise or sell any
conversion or subscription rights appurtenant to any stocks,
bonds or other securities at any time held in the Trust Corpus,
and to make any and all necessary payments therefor; to join in,
and to approve, or to dissent from and to oppose, any
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corporate act or proceeding, including any reorganization,
recapitalization, consolidation, merger, dissolution,
liquidation, sale of assets or other action by or plan in respect
of corporations or properties, the stocks or securities of which
may at any time be held in the Trust Corpus; to deposit with any
committee or depository, pursuant to any plan or agreement of
protection, reorganization, consolidation, sale, merger, or other
readjustment, any property held in the Trust Corpus; and to make
payment from the Trust Corpus of any charges or assessments
imposed by the terms of any such plan or agreement;
(6) With respect to stocks, bonds or securities of the Company, the
Trustee shall exercise the powers under Section 3(b)(5) at its
discretion.
(7) To accept and hold any securities or other property received by
it under the provisions of any of the subdivisions of this
Article whether or not the Trustee would be authorized hereunder
then to invest therein;
(8) To borrow money upon such terms and conditions at the Trustee
shall deem advisable to carry out the purposes of the Trust and
to pledge securities or other property of the Trust Corpus in
repayment of any such loan;
(9) To enforce any right, obligation or claim and in general to
protect in any way the interest of the Trust Corpus, either
before or after default, and in case the Trustee shall, in its
discretion, consider such action for the best interest of the
Trust Corpus, to abstain from the enforcement of any right,
obligation or claim and to abandon any property, whether real or
personal which at any time may be held by the Trustee;
(10) To make, execute, acknowledge and deliver any and all deeds,
leases, assignments transfers, conveyances and any and all other
instruments necessary or appropriate to carry out any powers
herein granted;
(11) To cause any investments from time to time held by it hereunder
to be registered in, or transferred into, its name as Trustee or
the name of its nominee or nominees, and with or without
designation of fiduciary capacity, or to retain any investments
unregistered or in form permitting transfer by delivery, but the
books and records of the Trustee shall at all times show that all
such investments are part of the Trust Corpus;
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(12) To hold any part or all of the Trust Corpus uninvested; and
(13) To do all acts which may be necessary or proper and to exercise
any and all of the powers of the Trustee under this Agreement
upon such terms and conditions as to the Trustee may seem in the
best interests of the Trust Corpus.
(c) Upon and after a Change in Control, the Trustee shall use its good
faith efforts to invest or reinvest all or such part of the Trust
Corpus as it believes prudent under the circumstances (taking into
account, among other things, anticipated cash requirements for the
payment of benefits under the Plans communicated to the Trustee by the
Recordkeeper) solely in direct obligations of the United States of
America or agencies thereof or obligations unconditionally and fully
guaranteed as to principal and interest by the United States of
America, and with respect to such investments the Trustee shall have
the powers and discretion set forth in Section 3(b) in addition to
those conferred by law; provided, however, that the Trustee shall not
be liable for any failure to maximize the income earned on that
portion of the Trust Corpus as is from time to time invested or
reinvested as set forth under Section 3(c), nor for any loss of income
due to liquidation of any investment which liquidation is necessary to
make payments or to reimburse expenses under the terms of this Trust.
(d) All losses of income or principal in respect of, and expenses
(including taxes and, as provided in Section 9 hereof, any expenses
of the Trustee) charged against, the Trust Corpus shall be for the
account of the Company and the Company shall be obligated to reimburse
the Trust Corpus for any loss in principal amount of, or expense
charged against, the Trust Corpus except to the extent that such
amounts have been applied to reduce amounts payable by the Company (or
certain of its subsidiaries) pursuant to Section 4 hereof. The
Trustee shall promptly notify the Company in writing of the amount of
such reimbursement. The Company agrees that, upon receipt of such
notice, it will deliver to the Trustee to be held in the Trust an
amount in cash equal to any reimbursement amount specified by the
Trustee, together with interest from the date of receipt of such
notice based upon the daily average of the prime rate charged by the
Trustee.
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(e) Company shall have the right at any time, and from time to time in its
sole discretion, to substitute assets of equal fair market value for
any asset held by the Trust. This right is exercisable by Company in
a nonfiduciary capacity without the approval or consent of any person
in a fiduciary capacity.
Section 4. Payments to Plan Participants and Their Beneficiaries
(a) By its acceptance of this Trust the Trustee hereby agrees to the
designation by the Company of Towers Perrin as its recordkeeper
("Recordkeeper") under this Trust. It is recognized that the Trustee
shall have no responsibility hereunder for the continued retention of
the Recordkeeper and/or any responsibility assigned to said
Recordkeeper or its performance thereof. Upon and after a Change in
Control of the Company, the Trustee shall have the sole authority to
retain, dismiss or appoint the Recordkeeper for the Trust on such
terms and conditions as the Trustee deems appropriate. The Company
shall pay or reimburse the Trustee for all fees and expenses of the
Recordkeeper.
(b) Except for the records dealing solely with the Trust Corpus and its
investment, which shall be maintained by the Trustee, the Recordkeeper
shall maintain all the records contemplated by this Agreement,
including the maintenance of the separate Accounts of each Plan under
this Trust and the maintenance of Executives' Plan interests. The
Recordkeeper shall also be responsible for information with respect to
payments to Executives and shall perform such other duties and
responsibilities as the Trustee determines are necessary or advisable
to achieve the objectives of this Trust.
(c) Upon the establishment of this Trust or as soon thereafter as practicable,
the Company shall furnish to the Recordkeeper all the information necessary
to determine the benefits payable to or with respect to each Executive in
each Plan, including any benefits payable after the Executive's death and
the recipient of same. The Company shall regularly, at least annually,
furnish revised up-dated information to the Recordkeeper. In the event the
Company refuses or neglects to provide updated Executive information, as
contemplated herein, the Recordkeeper shall be entitled to rely upon the
most recent information furnished to it by the Company.
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(d) The Recordkeeper, on behalf of the Company, shall deliver to Trustee a
schedule (the "Payment Schedule") that indicates the amounts payable in
respect of each Plan participant (and his or her beneficiaries), that
provides a formula or other instructions acceptable to Trustee for
determining the amounts so payable, the form in which such amount is to be
paid (as provided for or available under the Plans), and the time of
commencement for payment of such amounts. Except as otherwise provided
herein, Trustee shall make payments to the Plan participants and their
beneficiaries in accordance with such Payment Schedule. The Trustee shall
make provision for the reporting and withholding of any federal, state or
local taxes that may be required to be withheld with respect to the payment
of benefits pursuant to the terms of the Plans and shall pay amounts
withheld to the appropriate taxing authorities or determine that such
amounts have been reported, withheld and paid by Company.
(e) The entitlement of a Plan participant or his or her beneficiaries to
benefits under the Plans shall be determined by the Recordkeeper, on
behalf of the Company, and any claim for such benefits shall be
considered and reviewed under the procedures set out in the Plans and
this Trust Agreement.
(f) The Company may make payment of benefits directly to Plan participants or
their beneficiaries as they become due under the terms of the Plans.
Company shall notify Trustee and Recordkeeper of its decision to make
payment of benefits directly prior to the time amounts are payable to
participants or their beneficiaries. In addition if the principal of the
Trust, and any earnings thereon, are not sufficient to make payments of
benefits in accordance with the terms of the Plans, Company shall make the
balance of each such payment as it falls due. Trustee shall notify Company
where principal and earnings are not sufficient.
(g) The Recordkeeper shall notify the Executive or the beneficiary of a
deceased Executive that Executive's benefits under a Plan have become
payable. Such notice shall include the amount of such benefits, the
manner of payment and the name, address and social security number of
the Executive.
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(h) All benefits payable from the Trust Corpus to an Executive or his
beneficiary under a Plan shall be paid solely from the Account of such
Plan. Upon the satisfaction of all liabilities under a Plan in respect of
Executives under a Plan, the Recordkeeper shall prepare a certification to
the Trustee showing the balance, if any, remaining in the Account for such
Plan. Such balance shall thereupon be reallocated ratably by the
Recordkeeper to the Accounts of other Plans covered by this Agreement
(including Accounts which may have previously been reduced to a zero
balance) in the ratio that liabilities in respect of each such Plan bear to
the total liabilities of all such Plans. Upon the satisfaction of all
liabilities of the Company under all Plans, the Recordkeeper shall prepare
a certification to the Trustee and the Trustee shall thereupon distribute
the Trust Corpus to the Company. The Trustee and the Recordkeeper shall
have no responsibility for determining whether any Executive or beneficiary
has died and shall be entitled to rely upon information furnished by the
Company.
(i) Except as otherwise provided herein, in the event of any final
determination by the Internal Revenue Service or a court of competent
jurisdiction, which determination is not appealable or with respect to
which the time for appeal has expired, or the receipt by the Trustee
of a substantially unqualified opinion of tax counsel selected by the
Trustee, which determination determines, or which opinion opines, that
the Executives or any particular Executive, is subject to federal
income taxation on amounts held in Trust hereunder prior to the
distribution to the Executives or Executive of such amounts, the
Trustee, on receipt by the Trustee, of such opinion or notice of such
determination, shall pay to each Executive the portion of the Trust
Corpus includible in such Executive's federal gross income.
(j) The Company agrees to indemnify and hold harmless the Recordkeeper
from and against any and all damages, losses, claims, fees or expenses
as incurred (including expenses of investigation and fees or expenses
as incurred (including expenses of investigation and fees and
disbursements of counsel to the Recordkeeper) arising out of or in
connection with the performance by the Recordkeeper of its duties
hereunder. Any amount payable to the Recordkeeper under paragraph (a)
of this Section 4 or this paragraph (j) and not previously paid by the
Company shall be paid by the Company promptly upon demand therefore by
the Trustee or, if not paid by the Company within 30 days of the
Trustee's demand, from the Trust Corpus. In the event that payment is
made hereunder to the Recordkeeper from the Trust Corpus,
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the Trustee shall promptly notify the Company in writing of the amount of
such payment. The Company agrees that, upon receipt of such notice, it will
deliver to the Trustee to be held in the Trust an amount in cash equal to
any payments made from the Trust Corpus to the Trustee pursuant to
paragraph (a) of this Section 4 or this paragraph (j), together with
interest from the date of receipt of such notice based upon the daily
average of the prime rate charged by the Trustee. The failure of the
Company to transfer any such amount shall not in any way impair the
Recordkeeper's right to indemnification, reimbursement and payment pursuant
to paragraph (a) of this Section 4 or this paragraph (j).
(k) The Recordkeeper may resign and be discharged from its duties hereunder at
any time by giving notice in writing of such resignation to the Company, or
if a Change in Control shall previously have occurred, the Trustee,
specifying a date (not less than 30 days after the giving of such notice)
when such resignation shall take effect. Promptly after such notice, the
Company, or if a Change in Control shall previously have occurred, the
Trustee, shall appoint a successor recordkeeper, such recordkeeper to
become Recordkeeper hereunder upon the resignation date specified in such
notice. If the Company or the Trustee is unable to appoint a successor
recordkeeper within 60 days after such notice, the Recordkeeper shall be
entitled, at the expense of the Company, to petition a United States
District Court or any court of competent jurisdiction in the state in which
the Recordkeeper maintains its principal place of business to appoint its
successor. The Recordkeeper shall continue to serve until its successor
accepts the responsibility of recordkeeper. The Company, or if a Change in
Control shall previously have occurred, the Trustee, may at any time
substitute a new recordkeeper by giving 15 days notice thereof of the
Recordkeeper then acting. In the event of such removal or resignation, the
Recordkeeper shall provide its successor with the records and information
in its possession relating to the performance of its duties under this
Trust.
Section 5. Trustee Responsibility Regarding Payments to Trust Beneficiary
When Company Is Insolvent.
(a) Trustee shall cease payment of benefits to Plan participants and their
beneficiaries if the Company is Insolvent. Company shall be
considered "Insolvent" for purposes of this Trust Agreement if (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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(b) At all times during the continuance of this Trust, as provided in
Section 1(D) 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 Plan participants or their 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 Plan participants or their
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 Plan
participants or their beneficiaries to pursue their rights as
general creditors of Company with respect to benefits due under
the Plans or otherwise.
(4) Trustee shall resume the payments of benefits to Plan
participants or their 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).
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(c) Provided that there are sufficient assets, if Trustee discontinues the
payment of benefits from the Trust pursuant to Section 5(b) hereof and
subsequently resumes such payments, the first payment following such
discontinuance shall include the aggregate amount of all payments due to
Plan participants or their beneficiaries under the terms of the Plans for
the period of such discontinuance, less the aggregate amount of any
payments made to Plan participants or their beneficiaries by Company in
lieu of the payments provided for hereunder during any such period of
discontinuance.
Section 6. Payments to Company
(a) In the event the Company delivers the Required Funding Amount to the
Trustee because of a Potential Change in Control, the Trust Corpus shall be
returned to the Company one year after delivery of the Required Funding
Amount to the Trustee unless a Change in Control shall have occurred during
such one-year period. Such one-year period shall recommence in the event of
and upon the date of any subsequent Potential Change in Control. If another
Potential Change in Control should occur after the Trust Corpus has been
returned to the Company as provided in this Section 6(a), the Company shall
deliver a new Required Funding Amount to the Trustee pursuant to Section 2.
The Company shall notify the Trustee of the occurrence of a Potential
Change in Control and Change in Control and the Trustee may rely on such
notice.
(b) Except as provided in Section 5 hereof, after the trust has become
irrevocable, 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
payment of benefits have been made to Plan participants and their
beneficiaries pursuant to the terms of the Plans.
Section 7. Disposition of Income.
During the term of this trust, all income received by the Trust, net of
expenses and taxes, shall be accumulated and reinvested.
Section 8. Claims Procedures
(a) The Company agrees that by establishment of this Trust it hereby forgoes
any review (judicial or otherwise) of certifications by the Recordkeeper as
to the benefit payable to any persons hereunder.
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(b) If a dispute arises as to the amounts or timing of any benefits or the
persons entitled thereto under this Trust, such dispute shall be resolved
under a claims review procedure established and maintained by the
Recordkeeper that includes the following:
(1) The manner in which a claim is made.
(2) Provisions to the effect that, in the event of a denial of a claim as
to the amount of any distribution and/or the method of payment under
any Plan by the Recordkeeper, a claimant will be given notice in
writing of such detail within 90 days, which notice will set forth the
reason for the denial, the pertinent Plan provision on which the
denial is based, a description of the information necessary to perfect
the claim and an explanation of why such information is necessary, and
appropriate steps to be taken by the claimant to submit the claim for
review.
(3) Provisions to the effect that the claimant may request a review of
such denial by filing notice in writing with the Recordkeeper, within
60 days after receipt of such denial, may review pertinent documents
and may submit issues and comments in writing.
(4) Provisions for the Recordkeeper, in its discretion, to request a
meeting to clarify an immediate matters it deems appropriate.
(5) Provisions to the effect that all interpretations, determinations, and
decisions of the Recordkeeper in respect to any matter will be final,
conclusive, and binding upon the claimant.
(c) By making a Plan subject to the Trust, the claims review procedures of
paragraph (b) of this Section 8 supersede any claims review procedures in
the Plan to the extent of any benefits payable from the Trust.
Section 9. Trustee
(a) The duties and responsibilities of the Trustee shall be limited to those
expressly set forth in this Trust, and no implied covenants or obligations
shall be read into this trust against the Trustee.
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(b) The Trustee shall maintain such books, records and accounts as may be
necessary for the proper administration of the Trust Corpus and shall
render to the Company (and the Executives after a Change in Control of the
Company has occurred), on or prior to each April 1 following the date this
Trust was created until the termination of this Trust (and on the date of
such termination), an accounting with respect to the Trust Corpus as of the
end of the then most recent calendar year (and as of the date of such
termination). Unless the Company (or any Executive after a Change in
Control of the Company has occurred) shall have filed with the Trustee
written exceptions or objections to any such statement and account within
180 days after receipt thereof, the Company or any Executive, as the case
may be, shall be deemed to have approved such statement and account, and in
such case the Trustee shall be forever released and discharged with respect
to all matters and things reported in such statement and account as though
it had been settled by a decree of a court of competent jurisdiction in an
action or proceeding to which the Company and any Executive were parties.
(c) The Trustee shall not be liable for any act taken or omitted to be taken
hereunder if taken or omitted to be taken by it in good faith. The Trustee
shall also be fully protected in relying upon any notice given hereunder
which it in good faith believes to be genuine and executed and delivered in
accordance with this Trust.
(d) The Trustee may consult with legal counsel to be selected by it, and the
Trustee shall not be liable for any action taken or suffered by it in good
faith in accordance with the advice of such counsel.
(e) The Trustee shall be reimbursed by the Company for its reasonable expenses,
including without limitation any expenses incurred under paragraph (g) of
this Section 9, incurred in connection with the performance of its duties
hereunder and shall be paid such fees for the performance of such duties as
may be agreed upon in writing from time to time between the Company and the
Trustee. After a Change in Control of the Company has occurred, the fees of
the Trustee shall be determined by the application of the current rates
then charged by the Trustee for the provision of the types of investment
and trustee services contemplated in this Trust to trusts of a similar
character. The Trustee's reasonable expenses and fees shall be paid in the
manner provided by paragraph (f) of this Section 9.
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(f) The Company agrees to indemnify and hold harmless the Trustee from and
against any and all damages, losses, claims or expenses as incurred
(including expenses of investigation and fees and disbursements of counsel
to the Trustee and any taxes imposed on the Trust Corpus or income of the
Trust) arising out of or in connection with the performance by the Trustee
of its duties hereunder. Any amount payable to the Trustee under paragraph
(e) of this Section 9 or this paragraph (f) and not previously paid by the
Company shall be paid by the Company promptly upon demand therefore by the
trustee or, if the Trustee so chooses in its sole discretion, from the
Trust Corpus. In the event that payment is made hereunder to the Trustee
from the Trust Corpus, the Trustee shall promptly notify the Company in
writing of the amount of such payment. The Company agrees that, upon
receipt of such notice, it will deliver to the Trustee to be held in the
Trust an amount in cash equal to any payments made from the Trust Corpus to
the Trustee pursuant to paragraph (e) of this Section 9 or this paragraph
(f), together with interest from the date of receipt of such notice based
upon the daily average of the prime rate charged by the Trustee. The
failure of the Company to transfer any such amount shall not in any way
impair the Trustee's right to indemnification, reimbursement and payment
pursuant to paragraph (e) of this Section 5.01 or this paragraph (f).
(g) The Trustee is specifically authorized and required to take such action as
may be necessary or appropriate, including the institution of litigation or
other legal process, to enforce the Company's obligations hereunder or
under the Plans on behalf of either itself or the Executives, and any
expenses thus incurred by the Trustee shall be paid or reimbursed by the
Company pursuant to paragraphs (e) and (f) of this Section 9.
(h) 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.
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(i) 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.
Section 10. Resignation and Removal of Trustee.
(a) The Trustee may resign at any time by written notice to the Company, which
shall be effective 30 days after receipt of such notice unless Company and
Trustee agree otherwise. If a Change of Control shall previously have
occurred, the Trustee shall give such resignation notice, in writing, to
the Company and the Executives, specifying a date (not less than 30 days
after the giving of such notice) when such resignation shall take effect.
Promptly after such notice, the Company, or if a Change in Control shall
previously have occurred, the Company and at least 80% of the Executives
then entitled to receive payments hereunder, shall appoint a successor
trustee, such trustee to become Trustee hereunder upon the resignation date
specified in such notice. If the Company and such Executives are unable to
appoint a successor trustee within 60 days after such notice, the Trustee
shall be entitled, at the expense of the Company, to petition a United
States District Court or any court of competent jurisdiction in the state
in which the Trustee maintains its principal place of business to appoint
its successor, in accordance with section 10(c). The Trustee shall continue
to serve until its successor accepts the Trust and receives delivery of the
Trust Corpus. The Company, or if a Change in Control shall previously have
occurred, the Company and at least 80% of the Executives then entitled to
receive payments hereunder, may at any time substitute a new trustee by
giving 15 days notice thereof to the Trustee then acting. In the event of
such removal or resignation, the Trustee shall duly file with the Company
and, on and after a Change in Control, the Executives, a written statement
or statements of accounts and proceedings as provided in Section 9(b)
hereof for the period since the last previous annual accounting of the
Trust, and if written objections to such account are not filed as provided
in Section 9(b) hereof, the Trustee shall to the maximum extent permitted
by applicable law be forever released and discharged from all liability and
accountability with respect to the propriety of its acts and transactions
shown in such account. The Trustee and any successor thereto appointed
hereunder shall be a corporate professional trustee which is not an
affiliate of the Company but which has equity in excess of $100,000,000.00.
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(b) 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 30 days after receipt of
notice of resignation, removal or transfer, unless Company extends the time
limit.
(c) If Trustee resigns or is removed, a successor shall be appointed, in
accordance with Section 10 hereof, by the effective date of resignation or
removal under paragraph (a) of this section. If no such appointment has
been made, 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 11. Termination
Except as provided herein, this Trust shall be irrevocable. At any time prior to
a Change in Control of the Company, this Trust may be terminated by the
Compensation Committee. Upon or after a Change in Control of the Company, this
trust shall not terminate until the date on which Plan participants and their
beneficiaries are no longer entitled to benefits pursuant to the terms of the
Plans unless sooner revoked in accordance with Section 2(b) hereof. Upon
termination of the Trust any assets remaining in the Trust shall be returned to
Company.
Section 12. Amendment or Waiver
(a) This Trust may be amended by a written instrument executed by Trustee and
Company. Notwithstanding the foregoing, no such amendment shall conflict
with the terms of the Plans or shall make the Trust revocable after it has
become irrevocable in accordance with Section 2(b) hereof.
(b) Upon and after a Change in Control of the Company, the following rules will
govern amendments and waivers: (1) this Trust may not be amended except by
an instrument in writing signed on behalf of the parties hereto together
with the written consent of at least 80% of the Executives then entitled to
receive payments hereunder; (2) the parties hereto, together with the
consent of not less than 80% of the Executives then entitled to receive
payments hereunder, may at any time waive compliance with any of the
agreements or conditions contained herein; (3) any agreement on the part of
a party hereto or an Executive to any such waiver shall be valid if set
forth in an instrument in writing signed on behalf of such party or
Executive; and (4) no such
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amendment or waiver relating to this Trust may be made with respect to a
particular Executive unless such Executive has agreed in writing to such
amendment or waiver.
Section 13. Miscellaneous.
(a) Any provision of this Trust Agreement prohibited by law shall be
ineffective to the extent of any such without invalidating the remaining
provisions hereof.
(b) Benefits payable to plan participants and their beneficiaries under this
Trust Agreement may not be anticipated, assigned (either at law or in
equity), alienated pledge, encumbered or subjected to attachment,
garnishment, levy, execution or other legal or equitable process.
(c) For purposes of this Trust, the phrase "subsequent to a Control Transaction
which has not been expressly approved by at least a majority vote of the
Continuing Directors, there is a change in Control" shall be determined by
applying the following definitions:
(1) "Control Transaction" shall mean any of the following transactions or
any combination thereof: (A) any tender offer for or acquisition of
capital stock of the Company, (B) any merger, consolidation, or sale
of all or substantially all of the assets of the Company, or (C) the
submission of a nominee or nominees for the position of director of
the Company by shareholder or a Group of shareholders in a proxy
solicitation or otherwise.
(2) "Continuing Director" shall mean a Director who was a member of the
Board of Directors immediately prior to a Control Transaction which
results in a Change in Control.
(3) "Change in Control" shall be deemed to have occurred for purposes of
this Plan, if (A) Continuing Directors cease, within one year of a
Control Transaction, to constitute a majority of the Board (or of the
Board of Directors of any successor to the Company or to all or
substantially all of its assets) or (B) any entity, person or Group
acquires shares of the Company in a transaction or series of
transactions that result in such entity, person or Group directly or
indirectly owning beneficially more than fifty percent (50%) of the
outstanding voting shares.
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(4) "Group" shall mean persons who act in concert as described in Sections
13(d)(3) and/or 14(d)(2) of the Securities Exchange Act of 1934, as
amended.
(d) For purposes of this Trust, a "potential Change in Control" of the Company
shall be deemed to have occurred if subsequent to the effective date of the
Trust any of the following events or transactions has occurred: (1) any
Person (other than the Company) makes a tender offer for capital stock of
the Company; (2) and Person becomes the beneficial owner, directly or
indirectly, of capital stock of the Company in an amount which requires the
filing of Schedule 13D or its equivalent form pursuant to the Rules and
Regulations under the Securities Exchange Act of 1934 as may from time to
time be amended; (3) the submission of a nominee or nominees for the
position of director of the Company by a shareholder or shareholders in a
proxy solicitation or otherwise which, in its judgment the Board of
Directors determines by adoption of a resolution within 30 days of such
submission, might result in a Change in Control of the Company; (4) any
Person files a pre-merger notification for the acquisition of capital stock
of the Company pursuant to the Hart-Scott-Rodino Act; or (5) the Board of
Directors of the Company in its judgment determines by adoption of a
resolution that a Potential Change in Control of the Company for purposes
of this trust has occurred.
Section 14. Further Assurances
The Company shall, at any time and from time to time, upon the reasonable
request of the Trustee and/or Recordkeeper, execute and deliver such further
instruments and do such further acts as may be necessary or proper to effectuate
the purposes of this Trust.
Section 15. Certain Provisions Relating to This Trust
(a) This Trust sets forth the entire understanding of the parties with respect
to the subject matter hereof and supersedes any an all prior agreements,
arrangements and understandings relating thereto. This Trust shall be
binding upon and inure to the benefit of the parties and their respective
successors and legal representatives.
(b) This Trust shall be governed by and construed in accordance with the laws
of the Commonwealth of Pennsylvania, other than and without reference to
any provisions of such laws regarding choice of laws of conflict of laws.
The situs of this Trust shall be Philadelphia County, Pennsylvania.
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(c) The interests of the Executives hereunder are not subject to assignment or
alienation.
(d) Nothing in this Trust shall in any way diminish any rights of a Executive
to pursue his rights as a general creditor of the company (or certain of
its subsidiaries) under the Plans.
(e) The Trustee by joining in the execution of this Trust hereby signifies its
acceptance of the Trust hereby created.
(f) In the event that any provision of this Trust or the application thereof to
any person or circumstances shall be determined by a court of proper
jurisdiction to be invalid or unenforceable to any extent, the remainder of
this Trust, or the application of such provision to persons or
circumstances other than those as to which it is held invalid or
unenforceable, shall not be affected thereby, and each provision of this
Trust shall be valid and enforced to the fullest extent permitted by law.
Section 16. Authorization
(a) Any action of the Board of Directors or by the Compensation Committee
pursuant to this Trust shall be evidenced by a resolution adopted by the
Board of Directors (or a duly authorized committee thereof) or the
Compensation Committee that is certified to the Trustee and Recordkeeper by
the Secretary or an Assistant Secretary of the Company under its corporate
seal, and the Trustee and Recordkeeper shall be fully protected in acting
in accordance with such resolution.
(b) Any action of the Benefit Plans Investment Committee pursuant to this Trust
shall be evidence by a written notice or direction to such effect over the
signature of any member (or duly authorized representative) of the Benefit
Plans Investment Committee, and the Trustee and the Recordkeeper shall be
fully protected in acting in accordance with such resolution. The Company
shall provide to the Trustee and the Recordkeeper in writing from time to
time the names and specimen signatures of all persons designated as members
of the Benefit Plans Investment Committee. The Benefit Plans Investment
Committee shall provide to the Trustee and the Recordkeeper in writing from
time to time the names and specimen signatures of the person or persons
authorized to act on its behalf. The Trustee and the Recordkeeper shall be
fully protected in acting in accordance with such notices or directions.
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(c) Any action of the Chief Executive Officer or Treasurer pursuant to this
Trust shall be evidence by a written notice or direction to such effect
over the signature of such officer, and the Trustee and the Recordkeeper
shall be fully protected in acting in accordance with such notices or
directions.
(d) Any action of the Company pursuant to this Trust shall be evidenced by a
written notice or direction to such effect over the signature of any
officer or other representative of the Company who shall have been
certified to the Trustee and the Recordkeeper by the President, Treasurer
or Secretary of the Company as having such authority. The President,
Treasurer or Secretary of the Company shall provide to the Trustee and the
Recordkeeper in writing from time to time the names and specimen signatures
of the officers and other representatives authorized to act on behalf of
the Company. The Trustee and the Recordkeeper shall be fully protected in
acting in accordance with such notices or directions.
Section 17. Notices
Any notice, report, demand or waiver required or permitted hereunder shall be in
writing and shall be given personally or by prepaid registered or certified
mail, return receipt requested, addressed as follows:
If to the Board of Directors: Sun Company, Inc.
Philadelphia, PA 19103
Attention: Corporate Secretary
If to the Compensation
Committee: Sun Company, Inc.
Philadelphia, PA 19103
Attention: Secretary
Compensation Committee
If to the Benefit
Plans Investment Committee: Sun Company, Inc.
Philadelphia, PA 19103
Attention: Secretary, Benefit
Plans Investment Committee
If to the Chief Executive
Officer: Sun Company, Inc.
Philadelphia, PA 19103
Attention: Chief Executive
Officer
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If to the Treasurer: Sun Company, Inc.
Philadelphia, PA 19103
Attention: Treasurer
If to the Company: Sun Company, Inc.
Philadelphia, PA 19103
Attention: General Counsel
If to the Trustee: Mellon Bank, N.A.
One Mellon Bank Center
Pittsburgh, PA 15258
Attention: Anne Ayoob
If to the Recordkeeper: Towers Perrin
Centre Square West
1500 Market Street
Philadelphia, PA 19102
Attention:
Vice President and Director
If to an Executive, to the address of such Executive provided by the
Recordkeeper.
A Notice shall be deemed received upon the date of delivery if given personally
or, if given by mail, upon the receipt thereof.
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Section 18. Trust Beneficiaries
Upon and after a Change in Control of the Company, each Executive is an intended
beneficiary under this Trust, and shall be entitled to enforce all terms and
provisions hereof with the same force and effect as if such person had been a
party hereto.
Section 19. Counterparts
This Trust may be executed in any number of counterparts, each of which shall be
deemed an original, and said counterparts shall constitute but one and the same
instrument.
IN WITNESS WHEREOF, the parties have executed this Trust as of the date
first written above.
SUN COMPANY, INC.
(the "Company")
By: /s/MALCOLM I. RUDDOCK, JR.
---------------------------
Malcolm I. Ruddock, Jr.
Treasurer
TOWERS PERRIN
(the "Recordkeeper")
By: /s/CLYDE BEERS
---------------------------
Vice President and Director
MELLON BANK, N.A.
(the "Trustee")
By: /s/ROBERT T. BORZA
---------------------------
Vice President
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APPENDIX A
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(1) Sun Company, Inc. Executive Retirement Plan ("SERP");
(2) Sun Company, Inc. Deferred Compensation Plan;
(3) Sun Company, Inc. Pension Restoration Plan;
(4) Sun Company, Inc. Savings Restoration Plan.
(5) Sun Company, Inc. Special Employee Severance Plan
(6) Indemnification Agreements with the following senior executives:
(a) Robert M. Aiken, Jr.
(b) Robert H. Campbell
(c) John G. Driscoll
(d) John G. Drosdick
(e) Jack L. Foltz
(f) Deborah M. Fretz
(g) Thomas W. Hofmann
(h) David E. Knoll
(i) Ann C. Mule
(j) Malcolm I. Ruddock, Jr.
(j) Sheldon L. Thompson