EXHIBIT 10-49
DTE ENERGY AFFILIATES
NONQUALIFIED PLANS MASTER TRUST
TABLE OF CONTENTS
PAGE
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Section 1 Definitions............................................................................2
Section 2 Establishment and Funding of Trust.....................................................4
Section 3 Payments to Plan Participants and Their Beneficiaries..................................6
Section 4 Trustee Responsibility Regarding Payments to Trust Beneficiary
When Company is Insolvent..............................................................7
Section 5 Payments to Company....................................................................9
Section 6 Investment and Administrative..........................................................9
Section 7 Contractual Settlement and Income; Market Practice Settlements........................11
Section 8 Disposition of Income.................................................................11
Section 9 Accounting by Trustee.................................................................12
Section 10 Responsibility of Trustee.............................................................12
Section 11 Compensation and Expenses of Trustee..................................................14
Section 12 Resignation and Removal of Trustee....................................................15
Section 13 Appointment of Successor..............................................................15
Section 14 Amendment or Termination..............................................................16
Section 15 Miscellaneous.........................................................................16
Appendix A Prior Plans
Appendix B Non-qualified Deferred Compensation Plans
Appendix C Prior Trusts
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DTE ENERGY AFFILIATES
NONQUALIFIED PLANS MASTER TRUST
This Trust Agreement is made effective the 1st day of May 2003, by and
between DTE Energy Company, a corporation organized under the laws of the State
of Michigan or any successor corporation (the "Company"), and Mellon Bank,
N.A., a national banking association organized in the United States (the
"Trustee").
WITNESSETH:
WHEREAS, the Company previously adopted the non-qualified deferred
compensation plans listed in Appendix A, (the "Prior Plans") which have been
replaced by the non-qualified deferred compensation plans listed in Appendix B
(the "Plans"); and
WHEREAS, Appendix B may be revised by the Company from time to time
prior to a Change in Control to add or delete Plans by delivering to the Trustee
a new Appendix B without requiring an amendment of the Trust Agreement; and
WHEREAS, the Company has incurred or expects to incur liability under
the terms of the Plans with respect to the individuals participating in the
Plans; and
WHEREAS, the Company previously established the irrevocable grantor
trusts listed in Appendix C (the "Prior Trusts") to support the Prior Plans and
now wishes to merge the Prior Trusts and assets and establish a global benefits
trust (hereinafter called the "Trust") and to contribute to the Trust assets
that shall be held therein, subject to the claims of the creditors of the
Company and, to the extent provided herein, the creditors of Participating
Affiliated Companies in the event of Insolvency, as herein defined, until paid
to Plan Participants and their Beneficiaries in such manner and at such times as
specified in the Plan(s); and
WHEREAS, the terms of the Prior Trusts permit the Prior Trusts to be
merged into the Trust as described above; and
WHEREAS, it is the intention of the parties that this Trust shall
constitute an unfunded arrangement and shall not affect the status of the Plans
as unfunded plans maintained primarily for the purpose of providing 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;
and
WHEREAS, it is the intention of the Company to make contributions to
the 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 establish the Trust and agree
that the Trust shall be comprised, held and disposed of as follows:
SECTION 1
DEFINITIONS
(a) "AFFILIATED COMPANY" means any corporation while such corporation
is a member of the same controlled group of corporations (within the meaning of
Code section 414(b)) as the Company or any other employing entity while such
entity is under common control (within the meaning of Code section 414(c)) with
the Company.
(b) "BENEFICIARY" means the person, persons or entity designated in
writing by a Participant, on forms provided by the Company, to receive
distribution of certain death benefits payable under a Plan in the event of the
Participant's death.
(c) "BOARD" or "BOARD OF DIRECTORS" means the Board of Directors of DTE
Energy Company.
(d) "CHANGE IN CONTROL" means the occurrence of any one of the
following events:
(1) individuals who, on January 1, 2002, constitute the Board
(the "Incumbent Directors") cease for any reason to constitute at least a
majority of the Board, provided that any person becoming a director subsequent
to January 1, 2002, whose election or nomination for election was approved by a
vote of at least two-thirds of the Incumbent Directors then on the Board (either
by a specific vote or by approval of the proxy statement of the Company in which
such person is named as a nominee for director, without written objection to
such nomination) shall be an Incumbent Director; provided, however, that no
individual initially elected or nominated as a director of the Company as a
result of an actual or threatened election contest (as such terms are used in
Rule 14a-11 of Regulation 14A promulgated under the Securities Exchange Act of
1934, as amended (the "Exchange Act")) with respect to directors or as a result
of any other actual or threatened solicitation of proxies (or consents) by or on
behalf of any person other than the Board shall be deemed to be an Incumbent
Director; or
(2) any "person" (as such term is defined in Section 3(a)(9)
of the Exchange Act and as used in Sections 13(d)(3) and 14(d)(2) of the
Exchange Act) is or becomes a "beneficial owner" (as defined in Rule 13d-3 under
the Exchange Act), directly or indirectly, of securities of the Company
representing 20% or more of the combined voting power of the Company's then
outstanding securities eligible to vote for the election of the Board (the
"Company Voting Securities"); provided, however, that the event described in
this paragraph (2) shall not be deemed to be a Change in Control by virtue of
any of the following acquisitions: (A) by the Company or any Subsidiary, (B) by
any employee benefit plan (or related trust) sponsored or maintained by the
Company or any Subsidiary, (C) by any underwriter temporarily holding securities
pursuant to an offering of such securities, (D) pursuant to a Non-Qualifying
Transaction (as defined in paragraph (3)), or (E) a transaction (other than one
described in (3) below) in which Company Voting Securities are acquired from the
Company, if a majority of the Incumbent Directors approve a resolution providing
expressly that the acquisition pursuant to this clause (E) does not constitute a
Change in Control under this paragraph (2); or
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(3) the consummation of a merger, consolidation, statutory
share exchange or similar form of corporate transaction involving the Company or
any of its Subsidiaries (a "Business Combination") or sale or other disposition
of all or substantially all of the Company's assets to an entity that is not an
affiliate of the Company (a "Sale"), unless immediately following such Business
Combination or Sale: (A) more than 50% of the total voting power of (x) the
corporation resulting from such Business Combination (the "Surviving
Corporation"), or (y) if applicable, the ultimate parent corporation that
directly or indirectly has beneficial ownership of 100% of the voting securities
eligible to elect directors of the Surviving Corporation (the "Parent
Corporation"), is represented by Company Voting Securities that were outstanding
immediately prior to such Business Combination (or, if applicable, is
represented by shares into which such Company Voting Securities were converted
pursuant to such Business Combination), and such voting power among the holders
thereof is in substantially the same proportion as the voting power of such
Company Voting Securities among the holders thereof immediately prior to the
Business Combination, (B) no person (other than any employee benefit plan (or
related trust) sponsored or maintained by the Surviving Corporation or the
Parent Corporation), is or becomes the beneficial owner, directly or indirectly,
of 20% or more of the total voting power of the outstanding voting securities
eligible to elect directors of the Parent Corporation (or, if there is no Parent
Corporation, the Surviving Corporation) and (C) at least a majority of the
members of the board of directors of the Parent Corporation (or, if there is no
Parent Corporation, the Surviving Corporation) following the consummation of the
Business Combination were Incumbent Directors at the time of the Board's
approval of the execution of the initial agreement providing for such Business
Combination (any Business Combination which satisfies all of the criteria
specified in (A), (B) and (C) above shall be deemed to be a "Non-Qualifying
Transaction"); or
(4) the stockholders of the Company approve a plan of complete
liquidation or dissolution of the Company.
Notwithstanding the foregoing, a Change in Control of the Company shall not be
deemed to occur solely because any person acquires beneficial ownership of more
than 20% of Company Voting Securities as a result of the acquisition of Company
Voting Securities by the Company which reduces the number of Company Voting
Securities outstanding; provided, that if after such acquisition by the Company
such person becomes the beneficial owner of additional Company Voting Securities
that increases the percentage of outstanding Company Voting Securities
beneficially owned by such person, a Change in Control of the Company shall then
occur.
The Company shall immediately notify the Trustee in writing of any Change in
Control. The Trustee may conclusively rely upon such notice and shall have no
duty to determine whether a Change in Control has occurred.
(e) "CODE" means the Internal Revenue Code of 1986, as amended, and any
regulations issued thereunder. References to any section or subsection of the
Code includes reference to any comparable or succeeding provisions of any
legislation which amends, supplements or replaces such section or subsection.
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(f) "COMPANY" means DTE Energy Company or its successors and assigns.
(g) "ERISA" means the Employee Retirement Income Security Act of 1974,
as amended, and any regulations issued thereunder. References to any section or
subsection of ERISA include references to any comparable or succeeding
provisions of any legislation that amends, supplements or replaces such section
or subsection.
(h) "INSOLVENCY" OR "INSOLVENT" means for purposes of this Trust
Agreement (i) the Company or a Participating Affiliated Company is unable to pay
its debts as they become due, or (ii) the Company or a Participating Affiliated
Company is subject to a pending proceeding as a debtor under the United States
Bankruptcy Code.
(i) "PARTICIPANT" means an employee who has made a written election on
a properly executed form to participate in a Plan or Prior Plan that requires
such an election or has otherwise been properly designated to participate in a
Plan or Prior Plan.
(j) "PARTICIPATING AFFILIATED COMPANY" means any Affiliated Company who
has elected to participate in a Plan that requires such an election; otherwise
it means any Affiliated Company.
(k) "PLAN" OR "PLANS" means the plans described in Appendix B.
(l) "PRIOR PLAN" OR "PRIOR PLANS" means the plans described in
Appendix A.
(m) "PRIOR TRUSTS" means the irrevocable grantor trusts described in
Appendix C.
(n) "SUBSIDIARY" means a corporation, partnership, joint venture,
limited liability company, unincorporated association or other entity in which
the Company has a direct or indirect ownership or other equity interest.
(o) "TRUST" OR "TRUST AGREEMENT" means the DTE Energy Affiliates
Nonqualified Plans Master Trust as described herein and as amended from time to
time.
(p) "TRUSTEE" means Mellon Bank, N. A.
SECTION 2
ESTABLISHMENT AND FUNDING OF TRUST
(a) The Company hereby deposits with the Trustee in trust the total
assets of the Prior Trusts which shall become the principal of the Trust to be
held, administered and disposed of by the Trustee as provided in this Trust
Agreement. As of the transfer of assets described in the preceding sentence, the
"Funding Amount" (as defined in the Prior Trusts) and contribution requirements
of the Prior Trusts shall no longer apply and the funding requirements set forth
in the Plans and this Trust shall be operative. The Trustee shall establish a
subaccount within this Trust in the name of each Plan and each Participating
Affiliated Company participating in such Plan (each a "Participating Affiliated
Company Account"), as directed by the Company. Amounts transferred to this
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Trust from a Prior Trust shall be credited to the subaccount of the Plan to
which the Prior Trust corresponds, as directed by the Company. Other
contributions or transfers to this Trust shall be credited to the subaccount of
one or more Plans and one or more Participating Affiliated Company Accounts, as
directed by the Company. The Company may cause the assets of the subaccounts
allocable to the Plans to be commingled for investment purposes, provided that
the Company shall be responsible for causing sufficient records to be maintained
to insure that benefits and liabilities payable with respect to each Plan shall
be paid from the assets allocable to each such Plan.
(b) The Trust hereby established shall be irrevocable.
(c) The Trust is intended to be a grantor trust, of which the Company
is the grantor, within the meaning of subpart E, part I, subchapter J, chapter
1, subtitle A of the Internal Revenue Code of 1986, as amended, and shall be
construed accordingly. The Company represents and warrants to the Trustee: (i)
no Plan for which benefits are or may become payable under this Trust is subject
to Part 4 of Title I of ERISA; and (ii) each Plan covers, and will cover, only
(x) a select group of management or highly compensated employees as contemplated
by Section 401(a) of ERISA and interpretations, opinions, and rulings of the
Department of Labor thereunder or (y) participants in an excess benefit plan as
defined in Section 3(36) of ERISA.
(d) The principal of the Trust, and any earnings thereon shall be held
separate and apart from other funds of the Company and Participating Affiliated
Companies and shall be used exclusively for the purposes of paying Plan
Participants and their Beneficiaries to the extent any Participant or
Beneficiary acquires the right to receive a payment under a Plan and general
creditors as herein setforth. 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 a Plan and this Trust Agreement shall be
mere unsecured contractual rights of Plan Participants and their Beneficiaries
against the Company. Any assets held by the Trustee in any subaccount will be
subject to the claims of the Company's general creditors in the event of
Insolvency of the Company. Any assets held by the Trustee in a Participating
Affiliated Company Account will be subject to the claims of such Participating
Affiliated Company's general creditors (but shall not be subject to the claims
of any other Participating Affiliated Company's general creditors) under federal
and state law in the event of Insolvency.
Upon a Change in Control, the Company shall, as soon as possible, but
in no event longer than 7 days following the Change in Control, as defined
herein, make an irrevocable contribution to the Trust. Such contribution shall
be in an amount such that the resulting balance of the Trust and each Plan's
subaccount are 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 Plan, as well as an amount deemed necessary to pay
estimated Trust administrative expenses for the following 5 years as determined
by the Company's accountants, as of the date on which the Change in Control
occurred. The Trustee shall have no duty to enforce any funding obligations of
the Company or to determine or collect contributions under the Plans and shall
have no responsibility for any property until it is received and accepted by the
Trustee. Notwithstanding the preceding, in
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no event shall the transfer the Company is required to make hereunder upon or
following a Change in Control be less than the transfer the Company would have
been required to make under the terms of the Plans as in effect immediately
prior to the Change in Control. The Company shall have the sole duty and
responsibility, both before and after a Change of Control, for the determination
of the accuracy or sufficiency of the contributions to be made under the Plans.
The duties of the Trustee shall be governed solely by the terms of this Trust
Agreement without reference to the terms of the Plan, and the Trustee shall have
no duties other than those specifically set forth in this Trust Agreement.
SECTION 3
PAYMENTS TO PLAN PARTICIPANTS AND THEIR BENEFICIARIES
(a) The Company shall deliver to the Trustee a schedule (the "Payment
Schedule") that indicates the amounts payable with respect to each Plan
Participant (and his or her Beneficiaries), that provides a formula or other
instructions acceptable to the Trustee for determining the amounts so payable,
the form in which such amount is to be paid (as provided for or available under
the applicable Plan), and the time of commencement for payment of such amounts.
Except as otherwise provided herein, the Trustee shall make payments to the Plan
Participants and their Beneficiaries in accordance with such Payment Schedule.
The Company shall be responsible for notifying the Trustee of any change in the
information on the Payment Schedule. Except as otherwise provided herein, the
Trustee shall make payments to the Participants and their Beneficiaries in
accordance with such Payment Schedule; provided, however, that, except as
provided in Section 14 and with respect to the payment of the Trustee's
expenses, (i) amounts credited to a Plan's subaccount under this Trust may only
be used to pay benefits to Participants and Beneficiaries of such Plan and (ii)
amounts credited to a Participating Affiliated Company Account may only be used
to pay benefits to Participants and Beneficiaries who are entitled to a benefit
from such Participating Affiliated Company.
It is the intent of the Company and the Trustee that the Company shall
be responsible for determining and effecting all federal, state and local tax
aspects of the Plan and the Trust Fund, including without limitation income
taxes payable on the Trust's Fund's income, if any, and required withholding of
income or other payroll taxes in connection with the payment of benefits from
the Trust Fund pursuant to the Plan, and all reporting required in connection
with any such taxes. To the extent that the Company is required by applicable
law to pay or withhold such taxes or to file such reports, such obligations
shall be a responsibility allocated to the Company hereunder. To the extent the
Trustee is required by applicable law to pay or withhold such taxes or to file
such reports, the Company shall inform the Trustee of such obligation, shall
direct the Trustee with respect to the performance of such obligations, and
shall provide the Trustee with all information required by the Trustee to meet
such obligations. Notwithstanding the foregoing, the Company may elect to pay
any applicable taxes directly. In the event the Company pays taxes directly,
such amounts may be reimbursed from the Trust assets by the Trustee, provided
that the Company certifies the amount of taxes paid directly and instructs the
Trustee to remit a reimbursement of such taxes to the Company. In addition, the
Trustee shall provide the Company with all information required to enable the
Company to pay any taxes on the Trust's income on a timely basis.
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(b) The entitlement of a Plan Participant or his or her Beneficiaries to
benefits under a Plan shall be determined by the Company or such party as it
shall designate under the Plan, and any claim for such benefits shall be
considered and reviewed under the procedures set out in the Plan. The Company
shall notify the Trustee of such determination and shall direct commencement of
payments of such benefits.
(c) The Company or the applicable Participating Affiliated Company may
make payment of benefits directly to Plan Participants or their Beneficiaries as
they become due under the terms of a Plan. The Company shall notify the Trustee
of any 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 Plan, the Company or
the applicable Participating Affiliated Company shall make the balance of each
such payment as it falls due. The Trustee shall notify the Company where
principal and earnings are not sufficient to make a payment then due under the
Payment Schedule.
SECTION 4
TRUSTEE RESPONSIBILITY REGARDING PAYMENTS TO TRUST BENEFICIARY WHEN COMPANY IS
INSOLVENT
(a) The Trustee shall cease payment of benefits to Plan Participants
and their Beneficiaries if the Company is Insolvent, subject to the provisions
of Subsection 4(b) below. The Trustee shall cease payment of benefits to Plan
Participants and their Beneficiaries on behalf of a Participating Affiliated
Company if that Participating Affiliated Company is Insolvent, subject to the
provisions of Subsection 4(b) below.
(b) At all times during the continuance of this Trust, as provided in
Subsection 2(d) hereof, the principal and income of the Trust shall be subject
to claims of general creditors of the Company under federal and state law as set
forth below, and the principal and income allocable to each Participating
Affiliated Company's Subaccount shall be subject to claims of general creditors
of such Participating Affiliated Company, under federal and state law as set
forth below, for whose benefit such subaccount was established.
(1) The Board of Directors and the Chief Executive Officer
("CEO") of the Company shall have the duty to inform the Trustee in writing of
the Insolvency of the Company or a Participating Affiliated Company. If a person
claiming to be a creditor of the Company or a Participating Affiliated Company
alleges in writing to the Trustee that the Company or a Participating Affiliated
Company has become Insolvent, the Trustee shall determine whether the Company or
the Participating Affiliated Company is Insolvent and, pending such
determination, the Trustee in the case of the insolvency of the Company, shall
discontinue payment of benefits to Plan Participants or their Beneficiaries and;
in the case of the Insolvency of a Participating Affiliated Company, shall
discontinue payment of benefits to Plan participants who would otherwise be
entitled to a benefit payable from the subaccount of such Participating
Affiliate Company. In all cases, the Trustee shall be entitled to conclusively
rely upon the written certification of the Board of Directors or the
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Chief Executive Officer of the Company when determining whether the Company or a
Participating Affiliated Company is Insolvent.
(2) Unless the Trustee has actual knowledge of the Insolvency
of the Company or a Participating Affiliated Company, or has received notice
from the Company or a person claiming to be a creditor alleging that the Company
or a Participating Affiliated Company is Insolvent, the Trustee shall have no
duty to inquire whether the Company or a Participating Affiliated Company is
Insolvent. The Trustee may in all events rely on such evidence concerning the
solvency of the Company or a Participating Affiliated Company, as may be
furnished to the Trustee and that provides the Trustee with a reasonable basis
for making a determination concerning the solvency of the Company or a
Participating Affiliated Company. In no event shall "actual knowledge" be deemed
to include knowledge of the credit status of the Company or a Participating
Affiliated Company, held by banking officers or banking employees of Mellon
Bank, N.A. which has not been communicated to the trust department of the
Trustee. The Trustee may appoint an independent accounting, consulting or law
firm to make any determination of solvency required by the Trustee under this
Section 4 only in cases where (a) the Trustee is required to make an inquiry as
to the solvency of the Company or a Participating Affiliated Company, (because a
creditor has alleged Insolvency) and (b) the Company disputes that the Company
or a Participating Affiliated Company is Insolvent. In such event, the Trustee
may conclusively rely upon the determination by such firm and shall be
responsible only for the prudent selection of such firm.
(3) If at any time the Board of Directors or the CEO of the
Company notifies the Trustee or the Trustee has determined that the Company is
Insolvent, the Trustee shall discontinue payments to Plan Participants or their
Beneficiaries in accordance with Subsection 4(a) and shall hold the assets of
the Trust for the benefit of the general creditors of the Company, except that,
to the extent permitted by applicable law, the Trustee's fees and expenses may
continue to be paid pursuant to Section 11 hereof. If at any time the Board of
Directors or the CEO of the Company notifies the Trustee or the Trustee has
determined that a Participating Affiliated Company is Insolvent, the Trustee
shall discontinue payments to all Plan Participants and their Beneficiaries and
the Trustee is hereby directed by the Company (without the need for further
direction from the Company or any Participating Affiliated Company at the time
of such Insolvency) to segregate into the applicable Participating Affiliated
Company's subaccount such Participating Affiliated Company's pro rata portion of
each type of asset held by the Trust (on a security by security basis). Upon
such segregation, such assets in the Insolvent Participating Affiliated
Company's subaccount shall no longer be commingled with the remaining assets of
the Trust for investment purposes, and the Trustee shall hold such segregated
assets allocable to such Insolvent Participating Affiliated Company for the
benefit of the general creditors of such Insolvent Participating Affiliated
Company, except that, to the extent permitted by applicable law, the Trustee's
fees and expenses may continue to be paid pursuant to Section 11 hereof. Upon
such segregation, the Trustee shall resume payments to Plan Participants and
Beneficiaries, in accordance with Section 3 of this Trust Agreement, who are
entitled to benefits from other than the Insolvent Participating Affiliated
Company's subaccount. Nothing in this Trust Agreement shall in any way diminish
any rights of Plan Participants or their Beneficiaries to pursue their
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rights as general creditors of the Company or a Participating Affiliated Company
with respect to benefits due under the Plan(s) or otherwise.
(4) In the case of an Insolvency of the Company, the Trustee
shall resume the payment of benefits to Plan Participants or their Beneficiaries
in accordance with Section 3 of this Trust Agreement only after the Trustee has
determined that the Company is not Insolvent (or is no longer Insolvent) or
pursuant to an order from the U.S. Bankruptcy Court or other court of competent
jurisdiction. In the case of an Insolvency of a Participating Affiliated
Company, the Trustee shall resume the payment of benefits to the Plan
Participants and Beneficiaries from such subaccount of such Participating
Affiliated Company in accordance with Section 3 of this Agreement, and such
subaccount may be commingled with other such trust fund assets, only after the
Trustee has determined that the Participating Affiliated Company is not
Insolvent (or is no longer Insolvent) or pursuant to an order of the U.S.
Bankruptcy Court or other Court of competent Jurisdiction.
(c) Provided that there are sufficient assets, if the Trustee
discontinues the payment of benefits from the Trust pursuant to Subsection 4(b)
hereof and subsequently resumes such payments, the first payment following such
discontinuance, to the extent not inconsistent with an order from the U.S.
Bankruptcy Court or other court of competent jurisdiction, shall include the
aggregate amount of all payments due to Plan Participants or their Beneficiaries
under the terms of the Plan(s) for the period of such discontinuance, less the
aggregate amount of any payments made to Plan Participants or their
Beneficiaries by the Company in lieu of the payments provided for hereunder
during any such period of discontinuance, all in accordance with the Payment
Schedule, which shall be modified by the Company as necessary to comply with the
provisions of this paragraph (c).
SECTION 5
PAYMENTS TO COMPANY
The Company shall have no right or power to direct the Trustee to
return to the Company (or any Participating Affiliated Company) or to divert to
others any of the Trust assets before all payments of benefits have been made to
Plan Participants and their Beneficiaries pursuant to the terms of the Plan(s).
The Trustee shall be entitled to rely conclusively upon the Company's written
certification that all such payments have been made.
SECTION 6
INVESTMENT AND ADMINISTRATIVE
(a) Prior to a Change of Control, the Company shall establish and
maintain written investment guidelines ("Investment Guidelines"), which may be
used from time to time, for the investment of the assets in the Trust. The
Company may appoint and remove one or more investment managers from time to time
to manage specified portions of the Trust; provided, however, that the Company
may also manage all or a portion of the Trust. To the extent that assets of the
Trust are not so managed by an investment manager appointed by the Company, the
Company shall manage all such assets. The Company and
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each investment manager shall designate in writing the persons who are
authorized to represent such party in dealing with the Trustee. The Trustee
shall have no investment duties for the Trust. The Trustee shall have no duty to
inquire whether investment directions received from the Company or an investment
manager are in accordance with the Plans or the Investment Guidelines, or to
review the assets purchased, retained or sold. The Trustee shall be fully
indemnified by the Company for any action taken in accordance with, or any
failure to act in the absence of, the Company's or an investment manager's
directions.
(b) The Company shall have the right, at anytime, and from time to time
in its sole discretion, to substitute assets of equal fair market value for any
asset held by the Trust; the Trustee shall have no responsibility for
determining whether such right has been properly exercised or for any investment
losses that may result from its exercise.
(c) After a Change of Control, the Trustee shall have and exercise sole
investment discretion with respect to the Trust in accordance with the
Investment Guidelines in effect immediately prior to the Change of Control, a
copy of which shall be provided to the Trustee by the Company. The Trustee's
sole responsibility with respect to investment discretion shall be to exercise
such discretion in accordance with the Investment Guidelines. The Investment
Guidelines may be changed from time to time by mutual agreement of the Trustee
and the Company. The Trustee may, in its sole discretion, appoint, retain or
terminate an investment manager (including any affiliate of the Trustee) to
manage all or a portion of the Trust in accordance with the current Investment
Guidelines.
(d) The Trustee may collect and receive any and all money and other
property due the Trust and give full discharge therefor.
(e) The Trustee may settle, compromise or submit to arbitration any
claims, debt or damages due or owing to or from the Trust; the Trustee may also
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.
(f) The Trustee may take all action necessary to pay for authorized
transactions, including the borrowing or raising monies from any lender,
including the Trustee, in its corporate capacity in conjunction with its duties
under this Agreement and upon such terms and conditions as the Trustee may deem
advisable 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 Trust.
(g) The Trustee may appoint custodians, subcustodians or subtrustees,
domestic or foreign (including affiliates of the Trustee), as to part or all of
the Trust. The Trustee shall not be responsible or liable for any losses or
damages suffered by the Company arising as a result of the insolvency of any
custodian, subcustodian or subtrustee, except to the extent the Trustee was
negligent in its selection or continued retention of such custodian,
subcustodian or subtrustee. In no event shall the Trustee be liable for the acts
or
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omissions of any custodian, subcustodian or subtrustee appointed pursuant to the
direction of the Company or an investment manager.
(h) The Trustee may 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 the Trustee), so long as the Trustee's records clearly indicate
that the assets held are a part of the Trust. The 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 depository, or similar organization.
SECTION 7
CONTRACTUAL SETTLEMENT AND INCOME; MARKET PRACTICE SETTLEMENTS
(a) In accordance with the Trustee's standard operating procedure, the
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 the Trustee credits income on contractual payment date, the Trustee may
reverse such accounting entries to the contractual payment date if the Trustee
reasonably believes that such amount will not be received.
(b) In accordance with the Trustee's standard operating procedure, the
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 the Trustee settles certain securities transactions on
the basis of contractual settlement date accounting, the Trustee may reverse to
the contractual settlement date any entry relating to such contractual
settlement if the Trustee reasonably believes that such amount will not be
received.
(c) Settlements of transactions may be effected in trading and
processing practices customary in the jurisdiction or market where the
transaction occurs. The 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, the 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 unless the nonreceipt of payment (or late
payment) or nondelivery of securities or other property (or late delivery) is
due to the Trustee's negligence or willful misconduct.
SECTION 8
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.
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SECTION 9
ACCOUNTING BY TRUSTEE
(a) The Trustee shall keep accurate and detailed records of all
investments, receipts, disbursements, and all other transactions required to be
made, including such specific records as shall be agreed upon in writing between
the Company and the Trustee. The records shall include separate subaccounts
established and maintained for each Plan and for each Participating Affiliated
Company Account within each Plan. The assets of a subaccount allocable to a Plan
shall not be used to satisfy the liabilities with respect to Plan Participants
or Beneficiaries of another Plan.
(b) The Company shall keep full, accurate and detailed records with
respect to the Participants and benefits paid and payable under the Plan, which
records shall be made available to the Trustee at its request.
(c) Within 60 days following the close of each calendar year and within
90 days after the removal or resignation of the Trustee, the Trustee shall
deliver to the Company 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, 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. In the absence of the filing in writing with
the Trustee by the Company of exceptions or objections to any such account
within 90 days, the Company shall be deemed to have approved such account; in
such case, or upon the written approval by the Company of any such account, the
Trustee shall be released, relieved and discharged with respect to all matters
and things set forth in such account as though such account had been settled by
the decree of a court of competent jurisdiction. The Trustee may conclusively
rely on determinations of the Company of valuations for assets of the Trust for
which the Trustee deems there to be no readily determinable fair market value
and on determinations of the issuing insurance company of valuations for
insurance contracts/policies.
SECTION 10
RESPONSIBILITY OF TRUSTEE
(a) The 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 the
Trustee shall incur no liability to any person for any action taken pursuant to
a direction, request or approval given in writing by the Company or any
investment manager appointed by the Company. In the event of a dispute between
the Company or any Participating Affiliated Company and a party, the Trustee may
apply to a court of competent jurisdiction to resolve the dispute that is
contemplated by and in conformity with the terms of the Plans or this Trust.
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(b) The Trustee is not a party to and has no duties or responsibilities
under the Plans, and has no duties or responsibility other than those that may
be expressly contained in this Trust Agreement. Except as provided in Section
2(d) of this Trust Agreement relating to the Company's contribution obligation
on a Change in Control, in any case in which a provision of this Trust Agreement
conflicts with any provision in any Plan, this Trust Agreement shall control.
(c) The Trustee shall not be responsible for the title, validity or
genuineness of any property or evidence of title hereto received by it or
delivered by it pursuant to this Trust Agreement and shall be held harmless in
acting upon any notice, request, direction, instruction, consent, certification
or other instrument reasonably believed by it to be genuine and delivered by the
proper party or parties.
(d) The Company agrees to indemnify and hold harmless, to the extent
permitted by law, the Trustee, its parent, subsidiaries and affiliates, and each
of their respective officers, directors, employees and agents from and against
all liability, loss and expense, including reasonable attorneys' fees and
expenses incurred by the Trustee or any of the foregoing indemnitees arising out
of or in connection with this Trust Agreement, except as a result of the
Trustee's own negligence or willful misconduct. The Trustee shall be fully
indemnified by the Company for any action taken in accordance with, or any
failure to act in the absence of, the Company's or investment manager's written
directions. If the Trustee undertakes or defends any litigation arising in
connection with this Trust, the Company agrees to indemnify the Trustee against
the Trustee's reasonable costs, expenses and liabilities (including, without
limitation, reasonable attorneys' fees and expenses) relating thereto and to be
primarily liable for such payments. If the Company does not pay such costs,
expenses and liabilities in a reasonably timely manner, the Trustee may obtain
payment from the Trust. This Section 9(d) shall survive the termination of this
Agreement.
(e) The Trustee may consult with legal counsel (who may also be counsel
for the Company generally) with respect to any of its duties or obligations
hereunder and as a part of its reimbursable expenses under this Agreement, pay
counsel's reasonable compensation and expenses. The Trustee shall be entitled to
rely on and may act upon advice of counsel on all matters, and shall be without
liability for any action reasonably taken or omitted pursuant to such advice.
(f) The Trustee may in the Trustee's reasonable judgment, hire agents,
accountants, actuaries, investment advisors, financial consultants or other
professionals to assist it in performing any of its duties or obligations
hereunder and such professionals' reasonable compensation shall be part of the
Trustee's reimbursable expenses under this Trust Agreement.
(g) The Trustee shall have, without exclusion, all powers conferred on
trustees by applicable law, unless expressly provided otherwise herein,
provided, however, that if an insurance policy is held as an asset of the Trust,
the Trustee shall have no power to name a beneficiary of the policy other than
the Trust, to assign the policy (as distinct from conversion of the policy to a
different form) other than to a successor Trustee, or to loan to
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any person the proceeds of any borrowing against such policy and shall act with
respect to any such policy only as directed by the Company.
(h) However, notwithstanding the provisions of Subsection 9(g) above,
where directed by the Company, the Trustee may loan to the Company the proceeds
of any borrowing against an insurance policy held as an asset of the Trust.
(i) Notwithstanding any powers granted to the Trustee pursuant to this
Trust Agreement or to applicable law, the Trustee shall not have any power that
could give this Trust the objective of carrying on a business and dividing the
gains therefrom, within the meaning of section 301.7701-2 of the Procedure and
Administrative Regulations promulgated pursuant to the Internal Revenue Code.
(j) Notwithstanding anything in this Agreement to the contrary
contained herein, the Trustee shall not be responsible or liable for any delay
in performance, or non-performance, of any obligation hereunder or for any
losses to the extent that the same is due to forces beyond the reasonable
control of the Trustee, its agents or custodians, including but not limited to
nationalization, strikes, expropriation, devaluation, seizure, or similar action
by any governmental authority, de facto or de jure; or enactment, promulgation,
imposition or enforcement by any such governmental authority of currency
restrictions, exchange controls, levies or other charges affecting the Trust's
property; or the breakdown, failure or malfunction of any utilities or
telecommunications systems; or any order or regulation of any banking or
securities industry including changes in market rules and market conditions
affecting the execution or settlement of transactions; or acts of war,
terrorism, insurrection or revolution; or acts of God; or any other similar
event, provided that the relevant party shall take all reasonable steps to
minimize the effects of same. This Section shall survive the termination of this
Agreement.
(k) The Trustee shall not be liable for any act of omission of any
other person not selected or retained by the Trustee in the exercise of its sole
discretion in carrying out any responsibility imposed upon such person. Under no
circumstances shall the Trustee be liable for any indirect, consequential, or
special damages with respect to its role as the Trustee.
(l) If the Company either contributes or directs the Trustee to invest
the Trust Fund in securities or other obligations of the Company, then the
Trustee shall have no fiduciary or other liability for decisions to purchase or
hold such investments. Also, the Company shall direct the Trustee as to the
voting of any Company stock held in the Trust. The Company shall indemnify the
Trustee for any liabilities that arise on account of such contributions or
investments. This Section shall survive the termination of this Agreement.
SECTION 11
COMPENSATION AND EXPENSES OF TRUSTEE
The Company shall pay all reasonable administrative expenses and the
Trustee's fees and reasonable expenses. If not so paid, the fees and expenses
shall be paid from the Trust. The Trustee shall be entitled to fees for services
as mutually agreed. The Company
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acknowledges that as part of the Trustee's compensation, the Trustee may earn
interest on balances including disbursement balances and balances arising from
purchase and sale transactions. If the Trustee advances cash or securities to
the Trust for any purpose, or in the event that the Trustee shall incur or be
assessed taxes, interest, charges, or assessments, in connection with the
performance of this Agreement, except such as may arise from its own negligent
failure to act or willful misconduct, any property at any time held in the Trust
shall be security therefor and the 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 to the extent necessary to obtain
reimbursement. To the extent the Trustee advances funds to the Trust for
disbursements or to effect the settlement of purchase transactions, the Trustee
shall be entitled to collect from the Trust either (i) with respect to
non-domestic assets, an amount equal to what would have been earned on the sums
advanced (an amount approximating the "federal funds" interest rate) or (ii)
with respect to non-domestic assets, the rate applicable to the appropriate
foreign market.
SECTION 12
RESIGNATION AND REMOVAL OF TRUSTEE
(a) The Trustee may resign at any time by written notice to the
Company, which shall be effective as of the later of (i) 30 days after receipt
of such notice, or (ii) the date of the transfer of Trust assets to a successor
Trustee, unless the Company and the Trustee agree otherwise. The Company may
remove the Trustee on 30 days notice or such shorter notice accepted by the
Trustee.
(b) Upon resignation or removal of the Trustee and appointment of a
successor Trustee, all assets shall subsequently be transferred to the successor
Trustee. The resigning or removed Trustee is authorized, however, to reserve
such amount as may be necessary for the payment of its fees and expenses
incurred prior to resignation or removal. The transfer shall be completed within
30 days after receipt of notice of resignation, removal or transfer, unless the
Company extends the time limit. The Company's consent to extension of such time
limit shall not be unreasonably withheld.
(c) If the Trustee resigns or is removed, a successor shall be
appointed, in accordance with Section 11 hereof, by the effective date of
resignation or removal under paragraph (a) of this section. If no such
appointment has been made within 60 days after the notice of such resignation or
removal, the Trustee may apply to a court of competent jurisdiction for
appointment of a successor or for instructions. All expenses of the Trustee in
connection with the proceeding shall be allowed as administrative expenses of
the Trust.
SECTION 13
APPOINTMENT OF SUCCESSOR
(a) If the Trustee resigns (or is removed) in accordance with
Subsection 11(a) hereof, the Company may appoint any third party, such as a bank
trust department, that may validly exercise corporate trustee powers under state
law, as a successor to replace the 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
15
Trustee, including ownership rights in the Trust assets. The former Trustee
shall execute any instrument necessary or reasonably requested by the Company 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 the
terms hereof. The successor Trustee shall not be responsible for and the 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 14
AMENDMENT OR TERMINATION
(a) This Trust Agreement may be amended by a written instrument
executed by the Trustee and the Company. Notwithstanding the foregoing, no such
amendment shall conflict with the terms of a Plan, as certified to in writing by
the Company (upon which certification the Trustee may conclusively rely), or
make the Trust revocable.
(b) The Trust shall not terminate until the date on which the Plan
Participants and their Beneficiaries are no longer entitled to benefits pursuant
to the terms of the Plan, as certified to in writing by the Company (upon which
certification the Trustee may conclusively rely). Upon termination of the Trust
any assets remaining in the Trust shall be returned to the Company, Subsection
2(b) notwithstanding. The preceding sentences to the contrary notwithstanding,
this Trust may terminate with respect to a Plan (and the subaccount maintained
with respect to that Plan) if that Plan's Participants and Beneficiaries are no
longer entitled to benefits pursuant to the terms of that Plan, as certified in
writing by the Company (upon which certification the Trustee may conclusively
rely), in which case any assets remaining in that Plan's subaccount shall be
reallocated to the subaccount of one or more of the remaining Plans and the
applicable Participating Affiliated Company Account as directed by the Company.
(c) Upon written approval of Participants or Beneficiaries entitled to
payment of benefits pursuant to the terms of the Plan, the Company may terminate
this Trust prior to the time all benefit payments under the Plan have been made.
Such approval shall be obtained and certified to in writing by the Company (upon
which certification the Trustee may conclusively rely), and the Trustee shall
have no responsibility therefor. All assets in the Trust at termination shall be
returned to the Company, Subsection 2(b) notwithstanding.
SECTION 15
MISCELLANEOUS
(a) Neither the Company nor the Trustee may assign this Trust Agreement
without the prior written consent of the other, except that the Trustee may
assign its rights and delegate its duties hereunder to any corporation or entity
which directly or indirectly is controlled by, or is under common control with,
the Trustee. This Trust Agreement shall
16
be binding upon, and inure to the benefit of, the Company and the Trustee and
their respective successors and permitted assigns. Any entity which shall by
merger, consolidation, purchase, or otherwise, succeed to substantially all the
trust business of the Trustee shall, upon such succession and without any
appointment or other action by the Company, be and become successor trustee
hereunder, upon notification to the Company.
(b) 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.
(c) Benefits payable to Plan Participants and their 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.
(d) Notwithstanding anything to the contrary contained elsewhere in
this Trust Agreement, any reference to the Plans or Plan provisions which
require knowledge or interpretation of the Plans shall impose a duty upon the
Company to communicate such knowledge or interpretation to the Trustee. The
Trustee shall have no obligation to know or interpret any portion of the Plan
and shall in no way be liable for any proper action taken contrary to the Plans.
(e) This Trust Agreement shall be governed by and construed in
accordance with the laws of the Commonwealth of Pennsylvania. The parties hereby
expressly waive, to the full extent permitted by applicable law, any right to
trial by jury with respect to any judicial proceeding arising from or related to
this Agreement.
(f) Any action required to be taken by the Company shall be by
resolution of its Board of Directors or by written direction of one or more of
its president, any vice president or treasurer or anyone designated by such
person to act on behalf of the Company under this Trust Agreement. The Trustee
may rely upon a resolution or direction filed with the Trustee that is
contemplated by and in conformity with the terms of the Plans or this Trust and
shall have no responsibility for any action taken by the Trustee in accordance
with any such resolution or direction.
(g) In making payments to service providers pursuant to authorized
directions, the Company acknowledges that the Trustee is acting as paying agent,
and not as the payor, for tax information reporting and withholding purposes.
(h) Any notice to the Trustee or the Company required or permitted
under this Trust shall be duly and properly given an delivered if sent by
certified United States mail, return receipt requested, to the Trustee at:
Mellon Bank, N.A.
One Mellon Center
Pittsburgh, PA 15258-2001
and to the Company at:
DTE Energy Company
Attn: Vice President and Treasurer
2000 Second Avenue
Detroit, Michigan 48226
(i) Each of the Company and the Trustee hereby represents and warrants
to the other that it has full authority to enter into this Agreement upon the
terms and conditions hereof and that the individual executing this Agreement on
its behalf has the requisite authority to bind it to this Agreement.
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IN WITNESS WHEREOF, the Company and the Trustee have executed this
Trust Agreement effective as of the date set forth above.
DTE ENERGY COMPANY
/s/David E. Meador
Name: David E. Meador
Title: Sr. Vice President and Chief Financial Officer
Attest:
/s/Teresa M. Sebastian
(CORPORATE SEAL)
The undersigned, Teresa M. Sebastian, does hereby certify that he/she
is the duly elected, qualified and acting Secretary of DTE Energy Company (the
"Company") and further certifies that the person whose signature appears above
is a duly elected, qualified and acting officer of the Company with full power
and authority to execute this Trust Agreement on behalf of the Company and to
take such other actions and execute such other documents as may be necessary to
effectuate this Agreement.
/s/Teresa M. Sebastian
Assistant Corporate Secretary
DTE Energy Company
MELLON BANK, N.A.
/s/Jerri L. Jones
Name: Jerri L. Jones
Title: Assistant Vice President
Attest:
/s/Susan M. Simon
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APPENDIX A
PRIOR PLANS
The Benefit Equalization Plan for Certain Employees of The Detroit Edison
Company
The Retirement Reparation Plan for Certain Employees of The Detroit Edison
Company
The Detroit Edison Company Savings Reparation Plan
The Detroit Edison Company Management Supplemental Benefit Plan
MCN Energy Group Supplemental Retirement Plan
MCN Energy Group Supplemental Savings Plan
MCN Energy Group Executive Deferred Compensation Plan
MCN Energy Group Supplemental Death and Retirement Income Plan
MCN Energy Group Excess Benefit Plan
DTE Energy Company Change-in-Control Severance Agreements
The Key Employee Deferred Compensation Plan
APPENDIX B
NON-QUALIFIED DEFERRED COMPENSATION PLANS
AS OF SEPTEMBER 1, 2002
DTE Energy Company Executive Supplemental Retirement Plan, effective
January 1, 2001
DTE Energy Company Supplemental Retirement Plan, effective January 1, 2002
DTE Energy Company Supplement Savings Plan, effective December 6, 2001
DTE Energy Company Executive Deferred Compensation Plan, effective
January 1, 2002
DTE Energy Company Executive Post-Employment Benefits Plan
APPENDIX C
PRIOR TRUSTS
TRUST NAME
The Detroit Edison Company Irrevocable Grant or Trust for The Detroit Edison
Company Benefit Equalization Plan, restated effective January 1, 1996
The Detroit Edison Company Irrevocable Grantor Trust for The Detroit Edison
Company Retirement Reparation Plan, restated effective January 1, 1996
The Detroit Edison Company Irrevocable Grantor Trust for The Detroit Edison
Company Savings Reparation Plan, restated effective January 1, 1996
The Detroit Edison Company Irrevocable Grantor Trust for The Detroit Edison
Company Management Supplemental Benefit Plan, restated effective January 1, 1996
Trust Agreement for DTE Energy Company Change-in-Control Severance Agreements,
effective October 1, 1997
Michigan Consolidated Gas Company Rabbi Trust (correct name to be obtained)