1
EXHIBIT 99.30
THE DETROIT EDISON COMPANY
IRREVOCABLE GRANTOR TRUST
EFFECTIVE JULY 24, 1995
2
THE DETROIT EDISON COMPANY
IRREVOCABLE GRANTOR TRUST
TABLE OF CONTENTS
I. DEFINITIONS........................................... 2
1.1 Beneficiary........................................................ 2
1.2 Board of Directors................................................. 2
1.3 Change of Control.................................................. 2
1.4 Company............................................................ 4
1.5 Effective Date..................................................... 4
1.6 Reserved........................................................... 4
1.7 Excess Assets...................................................... 4
1.8 Funding Amount..................................................... 4
1.9 General Creditors.................................................. 4
1.10 Reserved........................................................... 4
1.11 Insolvent.......................................................... 4
1.12 Investment Manager................................................. 4
1.13 IRC................................................................ 4
1.14 Participant........................................................ 5
1.15 Reserved........................................................... 5
1.16 Plan Administrator................................................. 5
1.17 Potential Change of Control........................................ 5
1.18 Potential Change of Control Period................................. 6
1.19 Reserved........................................................... 6
1.20 Trust.............................................................. 6
1.21 Trust Fund......................................................... 6
1.22 Trustee............................................................ 7
1.23 Valuation Date..................................................... 7
3
II. ESTABLISHMENT OF THE TRUST............................ 7
2.1 Trust.............................................................. 7
2.2 Description of Trust............................................... 7
2.3 Irrevocability..................................................... 9
2.4 Acceptance by the Trustee.......................................... 9
III. CONTRIBUTIONS......................................... 9
3.1 Calculations of Funding Amount..................................... 9
3.2 Contributions as of Each Valuation Date............................ 9
3.3 Reserved........................................................... 9
3.4 No Dilution of Trust............................................... 10
3.5 Collection......................................................... 10
IV. ACCOUNTING AND ADMINISTRATION......................... 11
4.1 Trustee Recordkeeping.............................................. 11
4.2 Company Recordkeeping.............................................. 11
4.3 Periodic Accounting................................................ 11
4.4 Administrative Powers of Trustee................................... 12
V. INVESTMENTS........................................... 15
5.1 Generally.......................................................... 15
5.2 Investment Powers of Trustee....................................... 15
5.3 Investment Managers................................................ 19
5.4 Reserved........................................................... 20
5.5 Single Fund........................................................ 20
VI. PAYMENTS FROM THE TRUST............................... 20
6.1 Obligation of Trustee to Make Payments to Participants............. 20
6.2 Obligation of the Company to Make Payments to Participants......... 20
6.3 Distributions to Participants...................................... 21
4
6.4 Reserved........................................................... 21
6.5 Insufficient Trust Fund Assets..................................... 21
6.6 Payment of Excess Assets to Company................................ 21
6.7 Company to Pay Withholding and Employment Taxes.................... 22
6.8 Payment in Reversion to Company.................................... 22
6.9 Reserved........................................................... 23
VII. PAYMENTS ON INSOLVENCY OF THE COMPANY................. 23
7.1 No Security Interest............................................... 23
7.2 Determination of Insolvency........................................ 23
7.3 Payments When Company Is Insolvent................................. 24
7.4 Resumption of Duties after Insolvency.............................. 25
7.5 Reserved........................................................... 25
VIII. RESIGNATION OR REMOVAL OF TRUSTEE..................... 25
8.1 Resignation or Removal of Trustee.................................. 25
8.2 Successor Trustee.................................................. 25
8.3 Duties of Retiring and Successor Trustees.......................... 26
8.4 Reserved........................................................... 26
IX. AMENDMENT AND TERMINATION OF TRUST.................... 27
9.1 Amendment.......................................................... 27
9.2 Termination........................................................ 28
9.3 Reserved........................................................... 28
X. GENERAL PROVISIONS.................................... 28
10.1 Coordination with Plan............................................. 28
10.2 Litigation......................................................... 28
10.3 Trustee's Action Conclusive........................................ 28
10.4 No Guarantee or Responsibility..................................... 29
10.5 Liabilities Mutually Exclusive..................................... 29
10.6 Indemnification.................................................... 29
10.7 Expenses and Compensation.......................................... 29
5
10.8 Reserved........................................................... 30
10.9 Notice............................................................. 30
10.10 Antiassignment Clause.............................................. 30
10.11 True and Correct Document.......................................... 30
10.12 Waiver of Notice................................................... 30
10.13 Counterparts....................................................... 30
10.14 Gender and Number.................................................. 31
10.15 Successors......................................................... 31
10.16 Severability....................................................... 31
10.17 Applicable Law..................................................... 31
EXHIBIT A The Detroit Edison Company
IRREVOCABLE GRANTOR TRUST
FOR THE RETIREMENT REPARATION PLAN
EXHIBIT B The Detroit Edison Company
IRREVOCABLE GRANTOR TRUST
PARTICIPANTS (as defined in the Trust)
6
THE DETROIT EDISON COMPANY
IRREVOCABLE GRANTOR TRUST
THIS TRUST AGREEMENT is made this 24th day of July, 1995 by and between
The Detroit Edison Company, a Michigan corporation, and The Northern Trust
Company, an Illinois corporation, of Chicago, Illinois ("Trustee"), and any
successor provided for in the Trust hereby evidenced, as Trustee.
WITNESSETH THAT:
WHEREAS, the Company has established and maintains the Retirement
Reparation Plan ("Plan"), an unfunded benefit plan, a copy of which is attached
hereto as Exhibit A, for the benefit of certain Company Executives listed on
Exhibit B hereto, which Exhibits may be amended from time to time by the Company
prior to a potential Change of Control and/or Change of Control, and without the
Trustee's consent; and
WHEREAS, the Company has incurred and expects to continue to incur
liabilities pursuant to the terms of the Plan, and wishes to establish an
irrevocable trust by placing assets in trust, subject to the claims of the
Company's creditors in the event the Company becomes Insolvent, to pay benefits
under the Plan or to be applied as otherwise provided for herein; and
WHEREAS, it is the intention of the Company that amounts transferred to
the Trust and the earnings thereon shall be used by the Trustee, subject to the
claims of the Company's creditors in the event the Company becomes Insolvent, to
satisfy the liabilities of the Company in accordance with the provisions hereof;
and, upon satisfaction of all liabilities of the Company with respect to all
Participants (and their Beneficiaries, if applicable), the assets, if any,
remaining in the Trust shall revert to the Company; and
WHEREAS, the Company intends that the existence of the Trust shall not
alter the characteristics of the Plan as an unfunded plan maintained primarily
for the purpose of providing deferred compensation for a select group of
management and/or highly-compensated employes, and shall not be construed to
provide income
- 1 -
7
for federal income tax purposes to a Participant (or his or her Beneficiary)
prior to the actual payment of benefits under the Plans; and
WHEREAS, the Trustee has agreed to serve as trustee of such trust;
NOW, THEREFORE, in consideration of the mutual undertakings of the Company and
the Trustee, the parties do hereby establish the Trust, and agree that the Trust
shall be comprised, held, and disposed of as follows:
I. DEFINITIONS Unless the context requires otherwise, definitions as
used herein shall have the same meaning as in the Plan when applied to said
Plan.
1.1 "Beneficiary" means the beneficiary designated as provided in
the Plan as set forth in Exhibit A.
1.2 "Board of Directors" means the Company's Board of Directors,
as constituted from time to time.
1.3 "Change of Control" means the occurrence of any of the
following events:
(a) a change of control of a nature that would be required to be
reported in response to Item 6(e) of Schedule 14A of Regulation 14A
under the Securities Act of 1934, as amended (the "Exchange Act"), or
any successor provisions, whether or not the Company is then subject to
such reporting requirement; or
(b) any "person" (as such term is used in Sections 13(d) and 14(d)
of the Exchange Act), other than the Company or an employe benefit plan
maintained by the Company, is or becomes the "beneficial owner" (as
defined in Rule 13d-3 under the Exchange Act), directly or indirectly,
of securities of the Company representing 30% or more of the combined
voting power of the Company's then outstanding securities ordinarily
(and apart from rights accruing under special circumstances) having the
right to vote at elections of the Board of Directors (the "Base Capital
Stock"); provided, however, that any change in the relative beneficial
ownership of securities of any person resulting solely from a reduction
in the aggregate number of outstanding shares of Base Capital Stock,
and any decrease thereafter in such person's
- 2 -
8
ownership of securities, shall be disregarded until such person
increases in any manner, directly or indirectly, such person's
beneficial ownership of any securities of the Company; or
(c) a change in the composition of the Company's Board of
Directors, as a result of which fewer than two-thirds of the incumbent
directors are directors who either
(1) had been directors of the Company 24 months prior to
such change, or
(2) were elected, or nominated for election, to the
Company's Board of Directors with the affirmative
votes of at least a majority of the directors who had
been directors of the Company 24 months prior to such
change and who were still in office at the time of
the election or nomination; or
(d) there shall be consummated
(1) any consolidation or merger of the Company in which
the Company is not the continuing or surviving
corporation or pursuant to which shares of the
Company's common stock would be converted into cash,
securities, or other property, other than a merger of
the Company in which the holders of the Company's
common stock immediately prior to the merger have the
same proportionate ownership of common stock of the
surviving corporation immediately after the merger,
or
(2) any sale, lease, exchange, or other transfer (in one
transaction or a series of related transactions) of
all, or substantially all, of the assets of the
Company, or
(3) the stockholders of the Company approve a plan or
proposal for the liquidation or dissolution of the
Company.
Notwithstanding the foregoing provisions of this Section 1.3 a "Change of
Control" shall not be deemed to have occurred by reason of the corporate
reorganization (the "Reorganization") of the Company implemented pursuant to the
resolution adopted
- 3 -
9
by the Board of Directors of the Company on December 5, 1994 (as such resolution
may be amended or supplemented from time to time), whereby it is proposed that a
corporation will become the parent holding company of the Company.
The Company shall promptly notify the Trustee of a Change of Control and the
Trustee may conclusively rely upon such notice and shall have no duty to
independently determine whether a Change of Control has occurred.
1.4 "Company" means The Detroit Edison Company, a Michigan
corporation, its successors and assigns.
1.5 "Effective Date" means July 24, 1995.
1.6 Reserved.
1.7 "Excess Assets" means assets of the Trust in excess of one
hundred and twenty-five per cent (125%) of the Funding Amount.
1.8 "Funding Amount" means the actual benefit obligation on the
books of the Company as of the most recent Valuation Date, certified by the
Company to the Trustee. Upon any Potential Change of Control and during any
Potential Change of Control Period, "Funding Amount" means one hundred and
twenty per cent (120%) of the actual benefit obligation on the books of the
Company as of the most recent Valuation Date, as certified by the Company to the
Trustee.
1.9 "General Creditors" means the unsecured general creditors of
the Company, including the Participants.
1.10 Reserved.
1.11 "Insolvent" and "Insolvency" mean that the Company
(a) is unable to pay its debts as they become due; or
(b) is subject to a pending proceeding as a debtor under
the Bankruptcy Code.
- 4 -
10
1.12 "Investment Manager" means the investment manager(s) appointed
by the Company in the manner provided in Section 5.3 to direct the investment of
any part or all of the assets of the Trust Fund in accordance with Article V.
1.13 "IRC" means the Internal Revenue Code of 1986, as amended.
1.14 "Participant" means a Participant in the Plan and includes an
individual who is otherwise eligible to participate in the Plan but cannot due
to age, years of service or active employment. The Company agrees to list all
Participants on Exhibit B attached hereto. Except after a Change of Control as
provided in Section 3.4, the Company may add or delete Participants by
delivering a new Exhibit B to the Trustee.
1.15 Reserved.
1.16 "Plan Administrator" means the party designated under the Plan
as responsible for the management, operation, and administration of the Plan.
1.17 "Potential Change of Control" means the date of the earliest
occurrence of any of the following events:
(a) the Company enters into an agreement, the
consummation of which would result in the occurrence of a Change of
Control of the Company; or
(b) any "person" (as such term is used in Sections 13(d)
and 14(d) of the Exchange Act), other than the Company or an employee
benefit plan maintained by the Company, is or becomes the "beneficial
owner" (as defined in Rule 13d-3 under the Exchange Act), directly or
indirectly, of securities of the Company representing 9.5% or more of
the combined voting power of the Company's then outstanding securities
ordinarily (and apart from rights accruing under special circumstances)
having the right to vote at elections of the Board of Directors (the
"Base Capital Stock"); provided, however, that any change in the
relative beneficial ownership of securities of any person resulting
solely from a reduction in the aggregate number of outstanding shares
of Base Capital Stock, and any decrease thereafter in such person's
ownership of securities, shall be disregarded until such person
increases in
- 5 -
11
any manner, directly or indirectly, such person's beneficial ownership
of any securities of the Company; or
(c) the public announcement by any individual or entity,
other than the Company, that such individual or entity intends to take
or to consider taking actions which, if consummated, would constitute a
Change of Control of the Company; or
(d) the public announcement of any merger, acquisition,
consolidation, or reorganization of the Company in which the Company is
not the continuing or surviving corporation, or pursuant to which
shares of the Company's common stock would be converted into cash,
securities, or other property, other than a transaction in which the
holders of the Company's common stock immediately prior to the merger,
acquisition, consolidation, or reorganization have the same
proportionate ownership of common stock of the surviving corporation
immediately after the merger, acquisition, consolidation, or
reorganization, including, but not limited to, the creation of a parent
entity to oversee the Company; or
(e) the public announcement of the sale or other transfer
of substantially all of the assets of the Company to any third party;
or
(f) the Board of Directors of the Company adopts a
resolution to the effect that a Potential Change of Control of the
Company has occurred for purposes of this Trust.
Notwithstanding the foregoing provisions of this Section 1.17, a "Potential
Change of Control" shall not be deemed to have occurred by reason of the
Reorganization (as defined in Section 1.3).
1.18 "Potential Change of Control Period" means the one (1) year
period immediately following the date of a Potential Change of Control. If a
subsequent Potential Change of Control occurs during any Potential Change of
Control Period, the Potential Change of Control Period shall end one (1) year
following the date of the most recent Potential Change of Control.
The Company shall promptly notify the Trustee of a Potential
Change of Control and the Trustee may conclusively rely upon such notice and
shall have
- 6 -
12
no duty to independently determine whether a Potential Change of Control has
occurred.
1.19 Reserved.
1.20 "Trust" means the irrevocable trust established pursuant to
this Trust Agreement and all of the terms and conditions of this Trust
Agreement, which is intended to constitute a grantor trust under IRC Sections
671 et seq.
1.21 "Trust Fund" means all moneys, securities, and other property
held by the Trustee, any custodian, or any insurance company under this Trust.
1.22 "Trustee" shall mean the trustee named herein, and any
successor trustee appointed pursuant to Article VIII.
1.23 "Valuation Date" means the day in each calendar year which is
the last day of the Company's fiscal year in each year, and such other times as
the Company may determine. Each of (a) any date of a Potential Change of
Control, (b) the date of a Change of Control, (c) the effective date of a
Trustee's resignation or removal, and (d) the date of termination of the Trust
shall also be a Valuation Date if any such date occurs other than on the last
business day of the Company's fiscal Year. The first Valuation Date shall be
December 31, 1994.
II. ESTABLISHMENT OF THE TRUST
2.1 Trust. The Company hereby establishes the Trust with the
Trustee, which Trust shall consist of such sums of money and other property
acceptable to the Trustee as from time to time have been and shall be paid or
delivered by the Company to the Trustee as provided herein. All such money and
other property, all investments and reinvestments made therewith, or the
proceeds thereof, and all investment earnings and profits thereon, less all
payments and charges as authorized herein, shall constitute the Trust Fund. The
Trust Fund shall be held in trust by the Trustee, and shall be dealt with in
accordance with the provisions of this Trust.
2.2 Description of Trust. The Company represents and agrees that:
(a) the Trust is intended to be a grantor trust under IRC
Sections 671-678, and shall be construed accordingly. The Company
intends and agrees that it is
- 7 -
13
the "owner" or grantor of the Trust in its entirety, as that term is
defined in subpart E, part I, subchapter J, chapter 1, subtitle A of
the IRC and that, for income tax purposes, all income, deductions, and
credits of the Trust Fund belong to it as owner, and will be included
on its income tax or other required tax returns, and any income tax
determined to be payable as a result thereof will be the sole
obligation of, and will be paid by, the Company;
(b) a true and correct copy of the Plan, as in effect on
the Effective Date hereof, is attached hereto as Exhibit A. The Company
shall file with the Trustee, promptly upon its adoption, a true and
correct copy of each amendment to the Plan;
(c) the Trust Fund is to be used to satisfy the legal
obligations of the Company to Participants under the Plan as provided
herein, subject to the claims of General Creditors in the event of
Insolvency, and the balance of the Trust Fund, if any, remaining after
payment of the Company's obligation to Participants under the Plan will
revert to the Company in accordance with the Trust;
(d) contributions by the Company to the Trust which are
made coincident with and subsequent to the Effective Date shall be in
amounts determined under Article III hereof. The Company agrees to fund
the Trust as provided therein;
(e) the principal of the Trust, and any earnings thereon
shall be held by the Trustee separate and apart from other funds of
Company, and shall be used exclusively for the uses and purposes as
herein set forth;
(f) the Trust established under this agreement does not
fund and is not intended to fund the Plan, or any other employe benefit
plan or program of the Company. Neither the establishment of the Trust,
nor the payment or delivery of assets to the Trustee shall vest any
Participant in any right, title, or interest in or to any assets of the
Trust Fund;
(g) participants shall have no preferred claim on, or any
beneficial ownership interest in, assets of the Trust. To the extent
that any Participant acquires the right to receive payment(s) under the
Plan, any such right shall be mere unsecured contractual rights of
Participants against the Company,
- 8 -
14
and such Participants (or their Beneficiary(ies)) shall have only the
unsecured promise of the Company that such payment(s) will be made. Any
assets held by the Trust will be subject to the claims of General
Creditors under federal and state law in the event of Insolvency, as
defined herein, with no preference whatsoever given to claims of
employes over claims of other unsecured creditors of the Company; and
(h) to the extent the Plan is covered by ERISA, the Plan
is a plan for a select group of management or highly compensated
employes, and as such are exempt from the application of ERISA except
for the disclosure requirements applicable to such plan, for which the
Company bears full responsibility as to compliance. The Company further
represents that the Plan is not qualified under IRC Section 401 and
therefore, is not subject to any IRC requirements applicable to
tax-qualified plans.
2.3 Irrevocability. Except as provided in Article 9 and this
Section 2.3, the Trust shall be irrevocable from the effective date, and the
assets of the Trust Fund shall be held in accordance with the provisions hereof
for the exclusive purpose of providing for the payment of the Company's
obligations to pay benefits to Participants under the Plan and to satisfy the
claims of General Creditors in the event of Insolvency, and defraying the
expenses of the Trust. Except as provided in Section 6.6 and Section 6.8 and in
the event of Insolvency, no part of the income or corpus of the Trust Fund shall
be recoverable by or for the benefit of the Company.
2.4 Acceptance by the Trustee. The Trustee accepts the Trust
established under this Trust Agreement on the terms and subject to the
provisions set forth herein, and agrees to discharge and perform fully and
faithfully all of the duties and obligations imposed upon it under this Trust.
III. CONTRIBUTIONS
3.1 Calculations of Funding Amount. By September 30, 1995, the
Company shall contribute to the Trust the Funding Amount as determined on the
first Valuation Date. As of each Valuation Date, and until the entire Trust Fund
has been distributed, the Company (or, after a Change of Control, the Company's
independent public accountants) shall recalculate the Funding Amounts.
- 9 -
15
3.2 Contributions as of Each Valuation Date. During the life of
the Trust but no later than September 30 of each year, commencing no later than
September 30, 1996, the Company shall contribute to the Trust such amount as is
necessary to make trust assets equal the Funding Amount as of the previous
Valuation Date. The Plan Administrator or its delegate (or, after a Change of
Control, the Company's independent public accountants) shall provide the Trustee
with written notice of the amount of the necessary contribution on or before the
date such contribution is due to the Trust. Any such payments to the Trustee do
not discharge or release the Company of its obligation under the Plan or Section
6.2 to pay benefits to Participants under the Plan, and shall at all times be
subject to the provisions of Article VII.
3.3 Reserved.
3.4 No Dilution of Trust. After a Change of Control, the Exhibit B
in effect on the date of a Change of Control shall not be amended to include a
Participant not named in the Exhibit B in effect on the date of a Change of
Control, unless pursuant to the requirements of this Section 3.4, at the time of
delivery to the Trustee of a proposed amended Exhibit B (the "Delivery Date"),
the Company shall deliver to the Trustee a determination by the Company's
independent public accountants as of the Delivery Date of the proposed amended
Exhibit B of the Funding Amount calculated based on the Participants named in
the Exhibit B in effect on the Date of the Change of Control and any new or
additional Participants named in the proposed amended Exhibit B (the "New
Funding Amount") and (b), assets in an amount necessary to make the trust assets
equal the New Funding Amount. If the Trustee determines that assets of the Trust
Fund, including such assets as are delivered by the Company on the Delivery
Date, equal or exceed the New Funding Amount, the Trustee shall accept the
amended Exhibit B. Any amended Exhibit B so accepted shall be deemed
incorporated with the same effect as if otherwise included herein. Unless an
Exhibit B amended after a Change of Control is accepted by the Trustee as
provided in this Section, the Trustee shall have no liability, responsibility,
or obligation with respect to a Participant named in any amended Exhibit B
unless such Participant is named in the Exhibit B then in effect on the date of
a Change of Control.
3.5 Collection. In the event the Company fails to pay over to the
Trustee within one hundred and twenty (120) days of notice and demand from the
Trustee (or, upon the occurrence of a Potential Change of Control or a Change of
Control,
- 10 -
16
within seven (7) days of notice and demand from the Trustee), any amount
determined to be payable by the Company to the Trustee under Sections 3.2, 6.5
or 7.4(a) of the Trust, the Trustee may commence legal action, (which is
expressly deemed to include without limitation an alternate dispute resolution
proceeding), to compel the Company to pay to the Trustee any amount determined
to be payable to it under the Trust. The Trustee may bring such action against
the Company in any court of competent jurisdiction, and shall be entitled to
recover for the benefit of the Trust from the Company such amount, plus interest
for each day at the rate of interest per annum of five (5) percentage points in
excess of the prime lending rate as announced by NBD Bank, from the due date
specified in the Trustee's notice and demand (or the date(s) from which pro rata
payments were made, if such action is brought by the Trustee pursuant to Section
6.5 hereof) to the date of payment, plus all costs of collection, including
reasonable attorneys fees and costs of litigation. The Trustee is authorized to
bring action to compel payment by the Company, and, in connection with
reasonable claims for delinquent contributions by the Company, to retain, at the
expense of the Company, counsel and other appropriate experts, including
actuaries and accountants, to aid it in pursuing litigation for collection
against the Company. The Trustee's anticipated reasonable costs and expenses
incurred pursuant to this Section 3.5 are payable by the Company in advance; and
should the Company not make timely payment, the Trustee may charge the Trust
Fund for such reasonably anticipated costs and expenses. The Trustee shall in no
event be required to advance or expend its own funds in order to comply with the
provisions of this Section 3.5.
IV. ACCOUNTING AND ADMINISTRATION
4.1 Trustee Recordkeeping. The Trustee shall keep or cause to be
kept accurate and detailed records of any investments, receipts, disbursements,
and all other transactions required to be made by the Trustee hereunder, in
accordance with such rules as may be established by the Company, including such
specific records as shall be agreed upon in writing between the Company and the
Trustee. All accounts, books, and records relating thereto shall be open to
inspection and audit at all reasonable times by any person designated by the
Company. All such accounts, books, and records shall be preserved (in original
form, or on microfilm, magnetic tape, or any other similar process) for such
period as the Company may determine, and the Trustee may only destroy such
accounts, books, and records after first notifying the Company in writing of its
intention to so, and transferring to the Company any of such accounts, books,
and records requested by the Company.
- 11 -
17
4.2 Company Recordkeeping. The Company shall keep full, accurate,
and detailed books and 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.
4.3 Periodic Accounting. Within sixty (60) days following a
Valuation Date, the Trustee shall deliver to Company a written accounting, dated
as of the Valuation Date, of its administration of the Trust Fund during such
year or during the period from the most recent Valuation Date to the date of
such current Valuation Date, which accounting shall be in accordance with the
following provisions:
(a) Such accounting shall set forth all investments,
receipts, disbursements, and other transactions effected the by Trust
Fund during the preceding year, or during the period from the most
recent Valuation Date to the date of such current Valuation Date,
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 or other property held in the Trust Fund, less
liabilities known to the Trustee (other than liabilities to
Participants entitled to benefits under the Plans) at the end of such
year or other period, as the case may be. In making a valuation, all
cash, securities or other property held in the Trust Fund shall be
valued at their then fair market value, and shall be in a format as may
be established by the Company. A copy of each accounting so delivered
to the Company shall be open to inspection at the office of the Trustee
during normal business hours.
(b) If within ninety (90) days after the filing of such
written accounting, the Company has not delivered to the Trustee notice
of any objection to any act or transaction of the Trustee, the initial
accounting shall become an account stated as between the Trustee and
the Company. If any objection has been delivered to the Trustee by the
Company, and if the Company is satisfied that it should be withdrawn,
the Company shall signify its approval of the accounting in writing
filed with the Trustee, and the accounting shall become an account
stated as between the Trustee and the Company. If the accounting is
adjusted following an objection thereto, the Trustee shall file and
deliver the adjusted accounting to the Company. If within fifteen (15)
days after such filing of an adjusted accounting, the
- 12 -
18
Company has not delivered to the Trustee notice of any objection to the
transactions as so adjusted, the adjusted accounting shall become an
account stated as between the Trustee and the Company.
(c) Unless an accounting is fraudulent, when it becomes
an account stated, it shall be finally settled, and the Trustee shall,
to the 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 accounting.
4.4 Administrative Powers of Trustee. Except to the extent that
authority with respect to the administration of the Trust has been allocated to
others in accordance with this Trust, and subject to Article V, the Trustee
shall have exclusive authority and discretion to manage and administer the
Trust. 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 like
character and with like aims, provided, however, that Trustee shall incur no
liability to any person for any action taken pursuant to a direction, request or
approval given by Company which is contemplated by, and in conformity with, the
terms of the Trustee's responsibilities under this Trust, and is given in
writing by Company. The responsibility for maintenance of individual benefit
records shall be retained by the Company, and may be delegated to such person or
entity as the Company may employ from time to time. Except as otherwise provided
herein, the Trustee shall have, without exclusion, all powers conferred on
trustees by law and, without limiting the foregoing, shall have the following
administrative powers, rights, and duties in addition to those provided
elsewhere in this Trust:
(a) to manage, sell, insure, and otherwise deal with all
assets held by the Trustee on such terms and conditions as the Trustee
shall decide; provided however, that if the Company delivers written
instructions to the Trustee, the Trustee shall follow such
instructions;
(b) when directed by the Company or requested by a
Participant pursuant to Article VI, to make payments from the Trust
Fund to Participants and, when required by Article VII, to make
payments from the Trust Fund to General Creditors entitled to payments
thereunder;
- 13 -
19
(c) except as provided in Article VI and Article VII, to
waive, modify, reduce, compromise, release, contest, submit to
arbitration, or settle or extend the time of payment of any claims,
debts, damages, or demands of any nature in favor of or against the
Trustee or all or any part of the Trust Fund;
(d) to retain any disputed property until an appropriate
final adjudication or release is obtained, and to represent the Trust
in, or commence or defend, any litigation the Trustee considers in its
discretion necessary in connection with the Trust Fund;
(e) to withhold, if the Company so directs, all or any
part of any payment required to be made hereunder as may be necessary
and proper to protect the Trustee or the Trust Fund against any
liability or claim on account of any estate, inheritance, income or
other tax or assessment attributable to any amount payable hereunder,
and to discharge any such liability with any part or all of such
payment so withheld in accordance with Section 6.7;
(f) to maintain records reflecting all receipts and
payments under this Trust and such other records as the Company may
specify and to which the Trustee agrees, which records may be audited
from time to time by the Company or anyone named by the Company; and to
furnish a written accounting to the Company as of each Valuation Date,
as provided in Section 4.3;
(g) 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 from a different form) other than to a successor Trustee,
or to loan to any person the proceeds of any borrowing against such
policy. Notwithstanding the preceding sentence, the Trustee may loan to
the Company the proceeds of any borrowing against an insurance policy
held as an asset of the Trust;
(h) to furnish the Company with such information for tax
or other purposes which the Company may reasonably request and which
the Trustee may not unreasonably withhold;
- 14 -
20
(i) to employ accountants, advisors, agents, legal
counsel (who, except following a Change of Control, may be legal
counsel to the Company and who are not in the Company's reasonable
judgment deemed to have a conflict of interest), consultants,
custodians, depositories, experts and other providers of services, to
consult with them with respect to the implementation and construction
of this Trust, the duties of the Trustee hereunder, the transactions
contemplated by this Trust, or any act which the Trustee proposes to
take or omit, and to rely upon the advice of and services performed by
such persons; to delegate discretionary powers to such persons and to
reasonably rely upon information and advice furnished by such persons;
provided that each such delegation and the acceptance thereof by each
such person shall be in writing; and provided further that the Trustee
may not delegate its responsibilities as to the management or control
of the assets of the Trust Fund;
(j) to determine whether the Company is Insolvent, and to
hold assets of the Trust Fund for the benefit of General Creditors in
the event of Insolvency, as provided in Article VII hereof;
(k) to make payments to Participants, including after a
Change of Control, as provided in Article VI hereof;
(l) to perform all other acts which in the Trustee's
judgment are appropriate for the proper protection, management,
investment, and distribution of the Trust Fund, and to carry out the
purposes of the Trust.
- 15 -
21
V. INVESTMENTS
5.1 Generally. With respect to assets for which the Trustee has
investment responsibility, the Trustee shall invest and reinvest the principal
and income of the Trust Fund and keep the Trust Fund invested, without
distinction between principal and income, in accordance with the written
investment guidelines established by the Company and provided to the Trustee by
the Company. If no such written investment guidelines are received by the
Trustee, the assets of the Trust Fund shall be invested in such investments as
determined by the Trustee in accordance with the powers contained herein.
5.2 Investment Powers of Trustee. Except to the extent that authority
with respect to the management of all or a portion of the Trust Fund has been
allocated to others in accordance with this Trust, the Trustee shall have
exclusive authority and discretion to manage and control the Trust Fund, subject
only to broad investment guidelines the Company may establish from time to time.
The authority to assume responsibility for investment of assets of the Trust
Fund has been retained by the Company, and the authority to hold assets of the
Trust Fund may be allocated to one or more custodians or insurance companies.
Except as otherwise provided herein, the Trustee shall have, without exclusion,
all powers conferred on trustees by applicable law and, without limiting the
foregoing, shall have the following powers, rights, and duties in addition to
those provided elsewhere in this Trust:
(a) to invest and reinvest in any property wherever situated,
whether real, personal, mixed, foreign or domestic, including common and
preferred stocks, bonds, notes, and debentures (including convertible
stocks and securities, but not including any stock, securities, or debt
instruments of the Company [unless held in a collective or commingled
fund and such Company securities comprise 5% or less of the assets of
such fund]), leaseholds, mortgages (including, without limitation, any
collective or part interest in any bond and mortgage or note and
mortgage), certificates of deposit, life insurance contracts, guaranteed
investment contracts, and guaranteed annuity contract, all regardless of
diversification and without being limited to investments authorized by
law for the investment of trust funds;
(b) to invest and reinvest, without distinction between principal
and income, in contracts for future delivery of United States Treasury
Bills, other financial instruments, or indices based on any group of
securities, and in
- 16 -
22
options to buy or sell indices based on any group of securities or any
kind of evidences of ownership or indebtedness, including financial
instruments or futures contracts relating thereto;
(c) to invest and reinvest part or all of the Trust Fund in any
deposit accounts, deposit administration fund maintained by a legal
reserve life insurance company in accordance with an agreement between
the Trustee and such insurance company, a group annuity contract or life
insurance policies issued by such insurance company to the Trustee as
contract holder, any interest bearing deposits held by any financial
institution having total capital and surplus of at least Fifty Million
Dollars ($50,000,000), investments in any stocks, bonds, debentures,
mutual fund shares, notes, commercial paper, treasury bills, and any
mutual, common, commingled or collective trust funds or pooled investment
funds, and to diversify such investments so as to minimize the risk of
losses;
(d) to commingle assets of the Trust Fund, for investment
purposes only, with assets of any common, collective, or commingled trust
fund which has been or may hereafter be established and maintained by the
Trustee, or by any other financial institution; provided that to the
extent that any part or all of the assets of the Trust Fund for which the
Trustee has investment responsibility are invested in any such common,
collective or commingled trust fund or pooled investment fund which is
maintained by a bank or trust company (including a bank or trust company
acting as Trustee), the provisions of the documents under which such
common, collective or commingled trust fund or pooled investment fund are
maintained shall govern any investment therein and provided further that
prior to investing any portion of the Trust Fund for the first time in
any such common, collective, or commingled trust fund, the Trustee shall
advise the Company of its intent to make such an investment, and furnish
to the Company any information it may reasonably request with respect to
such common, collective, or commingled trust fund (other than a trust
fund established by the Company), and provided further that the Trustee
shall maintain separate records with respect to each other trust of the
Trust Fund;
(e) to vote stock and other voting securities personally or by
proxy (and to delegate the Trustee's powers and discretion with respect
to such stock or other voting securities to such proxy), to exercise
subscription,
- 17 -
23
conversion and other rights and options (and make payments from the Trust
Fund in connection therewith), to take any action and to abstain from
taking any action with respect to any reorganization, consolidation,
merger, dissolution, recapitalization, refinancing and any other plan or
change affecting any property constituting a part of the Trust Fund (and
in connection therewith to delegate the Trustee's discretionary powers
and pay assessments, subscriptions and other charges from the Trust
Fund), to hold or register any property from time to time in the
Trustee's name or in the name of a nominee or to hold it unregistered or
in such form that title shall pass by delivery; and to borrow from
anyone, including itself (to the extent permitted by law), such amounts
from time to time as the Trustee considers desirable to carry out this
Trust (and to mortgage or pledge all or part of the Trust Fund as
security); to participate in any plan or reorganization, consolidation,
merger, combination, liquidation, or other similar plan relating to any
such property, and to consent to or oppose any such plan or any action
thereunder, or any contract, lease, mortgage, purchase, sale, or other
action by any corporation or other entity any of the securities of which
may at any time be held in the Trust Fund, and to do any act with
reference thereto;
(f) to retain in cash such amounts as the Trustee considers
advisable and as are permitted by applicable law, and to deposit any cash
so retained in any depository (including any bank acting as Trustee)
which the Trustee may select, provided such depository must have total
capital and surplus of at least Fifty Million Dollars ($50,000,000);
(g) when directed by the Company, and subject to Section 4.4(g),
to apply for, pay premiums on, and maintain in force individual, ordinary
or universal life insurance policies on the lives of Participants, which
policies may contain provisions which the Company may approve or direct;
to receive or acquire such policy or policies from the Company, but the
Trustee may purchase a life insurance policy from a person other than the
insurer which issues a policy only if the Trustee pays, transfers, or
otherwise exchanges an amount no more than the cash surrender value of
the policy or policies, and the policy or policies is (are) not subject
to a mortgage or similar lien which the Trustee would be required to
assume; to have with respect to such policy or policies any rights,
powers, options, privileges, and benefits usually comprised in the term
"incidents of ownership", and normally vested in an
- 18 -
24
owner of such policy or policies to be exercised only pursuant to Company
direction;
(h) to retain any property at any time received by it;
(i) to sell, to exchange, to convey, to transfer, or to dispose
of, and to grant options for the purchase or exchange with respect to it,
any property at any time held by it, by public or private sale, for cash
or on credit, or partly for cash and partly for credit;
(j) to deposit any such property with any protective,
reorganization, or similar committee; to delegate discretionary power to
any such committee; and to pay part of the expenses and compensation of
any such committee and any assessments levied with respect to any
property so deposited;
(k) to exercise any conversion privilege or subscription right
available in connection with any such property, and to do any act with
reference thereto, including the exercise of options, the making of
agreements or subscription, and the payment of expenses, assessment or
subscription, which may be deemed necessary or advisable in connection
therewith, and to hold and retain any securities or other property which
it may so acquire;
(l) to extend the time of payment of any obligation held in the
Trust Fund;
(m) to enter into standby agreements for future investment,
either with or without a standby fee;
(n) to acquire, renew, or extend, or participate in the renewal
or extension of any mortgage, and to agree to a reduction in the rate of
interest on any indebtedness or mortgage or to any other modification or
change in the terms of any indebtedness or mortgage, or of any guarantee
pertaining thereto, in any manner and to any extent that may be deemed
advisable for the protection of the Trust Fund or the preservation of any
covenant or condition of any indebtedness or mortgage or in the
performance of any guarantee, or to enforce any default in such manner
and to such extent as may be deemed advisable; and to exercise and
enforce any and all rights of foreclosure, to bid on any property in
foreclosure, to take a deed in lieu of foreclosure with or
- 19 -
25
without paying a consideration therefor, and in connection therewith to
release the obligation on the bond secured by such mortgage; and to
exercise and enforce in any action, suit or proceeding at law or in
equity any rights or remedies in respect of any such indebtedness or
mortgage or guarantee;
(o) to make, execute, and deliver, as Trustee, any and all deeds,
leases, notes, bonds, guarantees, mortgage, conveyance, contracts,
waivers, releases, or other instruments in writing necessary or proper
for the accomplishment of any of the foregoing powers;
(p) to organize under the laws of any state one or more
corporations, partnerships, or trusts for the purpose of acquiring and
holding title to any property that it is authorized to acquire under this
Trust, and to exercise with respect thereto any or all of the powers set
forth in this Trust;
(q) 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
under the IRC; and
(r) generally to do all acts, whether or not expressly
authorized, that the Trustee deems necessary or desirable for the
protection of the Trust Fund, and to carry out the purposes of the Trust.
5.3 Investment Managers. The Company may appoint one or more Investment
Managers to direct the investment of any part or all of the assets of the Trust
Fund by the Trustee. Appointment of an Investment Manager shall be made by
written notice to the Investment Manager(s) and to the Trustee, which notice
shall specify those powers, rights, and duties of the Trustee under this Trust
that are allocated to the Investment Manager(s) and the portion of the assets of
the Trust Fund subject to the Investment Manager(s). After it receives written
notice of such appointment, the Trustee shall have no obligation or
responsibility for those investment duties which are allocated to an Investment
Manager. An Investment Manager so appointed pursuant to this paragraph shall be
either a registered investment adviser under the Investment Advisers Act of
1940, a bank, as defined in said Act, or an insurance company qualified to
manage, acquire and dispose of the
- 20 -
26
assets of the Plans under the laws of more than one state of the United States.
Any such Investment Manager shall acknowledge to the Company in writing that is
accepts such appointment. The Trustee shall not be liable for any loss or
diminution of any assets managed by an Investment Manager, including without
limitation, any loss or diminution caused by any action or inaction taken or
omitted by it at the direction of an Investment Manager. In addition, the
Trustee shall not be liable for the diversification of any assets managed by
Investment Managers of the Company, each of which shall be solely the
responsibility of the Company. An Investment Manager may resign at any time upon
written notice to the Trustee and the Company. The Company may remove an
Investment Manager at any time by written notice to the Investment Manager and
the Trustee.
The Company may by written notice to the Trustee assume investment
responsibility for any portion or all of the Trust assets. The Trustee shall
have no responsibility for any investments or review of such investments and
shall act with respect to such assets only as directed by the Company.
5.4 Reserved.
5.5 Single Fund. All assets of the Trust Fund and of each investment
fund, and the income thereon, shall be held and invested as a single fund, and
the Trustee shall not make any separate investment of the Trust Fund, or make
any separate investment fund, for the account of any Participant or other
General Creditors prior to receipt of directions to make payments to such
Participant or other General Creditors in accordance with Article VI or Article
VII. 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 Participants.
VI. PAYMENTS FROM THE TRUST
6.1 Obligation of Trustee to Make Payments to Participants. The
Trustee's obligation to distribute to any Participant out of the assets of the
Trust Fund shall be limited to payment at such times and in such amounts as are
properly in conformance with the provisions of Section 6.3. Payments to
Participants pursuant to this Article VI shall be made by the Trustee to the
extent that funds in the Trust Fund are sufficient for such purpose, and shall
at all times be subject to the provisions of Article VII. In the event the
Company determines that it will pay benefits directly to Participants as they
become due under the terms of the Plan, the
- 21 -
27
Company shall notify Trustee of its decision prior to the time amounts are
payable to Participants.
6.2 Obligation of the Company to Make Payments to Participants.
Notwithstanding anything in the Trust to the contrary, the Company shall remain
primarily liable to pay benefits under the Plan. Distributions to Participants
from the Trust Fund shall discharge, reduce, and offset the Company's obligation
to pay benefits to or on behalf of the Participant, to the extent of the
distributions, with respect to the Plan. If the Company's obligation to pay a
benefit under the Plan is not fully discharged, reduced, and offset by a
distribution from the Trust, then the Company shall make the balance of each
such benefit payment as it becomes due.
6.3 Distributions to Participants. Distributions which shall be made
from the Trust Fund to pay benefits in accordance with the Plan shall be
initiated by:
(a) written direction to the Trustee from the Plan Administrator,
which direction shall certify that such distribution(s) is(are) in
accordance with the Plan, and specify the timing, form, payee, and amount
of such benefit payments, including any federal, state, or local income
taxes to be withheld, and the Trustee shall make or commence the directed
distributions after receipt of such written direction; or
(b) by the submission to the Trustee by a Participant of a
certified copy of the non-appealable order of an appropriate forum with
jurisdiction to settle a claim for payment(s) under the Plan.
6.4 Reserved.
6.5 Insufficient Trust Fund Assets. If at any time the Trustee
determines or is advised that the Trust Fund does not have sufficient assets to
permit the Trustee to make a payment property directed pursuant to this Trust,
including a payment provided for under Section 10.7 of this Trust, the Trustee
shall pay any benefits due (if otherwise payable hereunder) to Participants on a
pro rata basis as directed by the Plan Administrator, and the Company shall make
the balance of such payments as they become due. If the Plan Administrator
determines that the Trust Fund does not have sufficient funds to provide for the
payment of all amounts otherwise payable to Participants (or their
Beneficiary(ies)) from the Trust under the Plans, it shall notify the Company
and the Trustee of the amount of the deficiency, and, within forty-five
- 22 -
28
(45) days of such notice, the Company deposit in trust with the Trustee the
additional amounts needed to make such payments. Upon receipt of such amount by
the Trustee from the Company, proceeds shall first be used by the Trustee to pay
any benefits previously due remaining unpaid, in the order in which they were
due, pursuant to Plan Administrator instructions.
6.6 Payment of Excess Assets to Company. Subject to Article VII, and
except as otherwise provided in this Section and Section 6.8 hereof, the Company
shall have no right or power to direct the Trustee to return to the Company or
to divert to others any of the Trust Fund before payment of all benefits due or
to become due have been made to Participants (or their Beneficiary(ies))
pursuant to the terms of the Plan. If, as of a Valuation Date, and based on the
fair market value of the Trust Fund as determined by the Trustee in accordance
with Section 4.3 hereof, the Trust Fund holds Excess Assets, then in the event
the Trustee has received within ninety (90) days after the most recent Valuation
Date a written request executed by the Company, the Trustee shall transfer to
the Company, within thirty (30) days after the receipt of the request, and
provided that a Potential Change of Control Period does not exist on the date of
the transfer, such assets of the Trust Fund selected by the Company which have a
fair market value equal to the amount of such Excess Assets, after converting
such assets to cash if requested by the Company. Any payment of Excess Assets to
the Company under this Section shall not discharge or release the Company of its
obligation to make any contribution required under Article III (including the
requirement of a Company contribution to the Trust upon the occurrence of a
Potential Change of Control or a Change of Control), and its obligation to pay
benefits to Participants under the Plan. Any payment of Excess Assets in
accordance with this Section shall be subject to the provisions of Article VII.
6.7 Company to Pay Withholding and Employment Taxes. Any amount paid to
a Participant by the Trustee in accordance with this Article VI shall be reduced
by the amount of taxes required to be withheld pursuant to Plan Administrator
instructions, and the Trustee shall inform the Company of all amounts so
withheld. The Company shall direct that the Trustee shall either
(a) pay to the Company a sum equal to the amount of such taxes as
are required to be withheld, whereupon the Company shall have full
responsibility for the payment of all withholding taxes to the
appropriate taxing authorities, or
- 23 -
29
(b) pay such taxes directly to the appropriate taxing authorities
for the benefit of the Company.
The Company shall be solely responsible for the payment of any employment taxes
for which it is directly liable as a result of payments by the Trustee. The
Company shall furnish each Participant with the appropriate tax information form
evidencing payments under the Trust and the amount(s) thereof.
6.8 Payment in Reversion to Company. Subject to Article VII, upon
receipt of written certification from the Company that all obligations of the
Company to Participants with respect to the Plan have been satisfied, and if the
Trust Fund shall have any assets remaining, the Trustee shall distribute such
remaining assets of the Trust Fund to the Company, after converting such assets
to cash if requested by the Company, subject to the Trustee's right to retain
such reasonable amount for compensation and expenses as provided in Section
10.7. The Trust shall thereafter terminate as provided in Section 9.2.
6.9 Reserved.
VII. PAYMENTS ON INSOLVENCY OF THE COMPANY
7.1 No Security Interest. No Participant shall have any claim on or
beneficial ownership interest in the Trust Fund before such assets are paid to
the Participant, except as an unsecured creditor of the Company. The Company
shall not create a security interest in the Trust Fund in favor of any
Participant or any other General Creditor. At all times during the continuance
of this Trust, as provided in this Article VII hereof, the principal and income
of the Trust Fund shall be subject to the claims of General Creditors under
federal and state law. If at any time the Trustee has received notice as
provided below that Company is Insolvent, Trustee shall discontinue payments to
Participants, and shall hold assets of the Trust Fund for the benefit of the
Company's General Creditors, pursuant to the provisions of Section 7.3, with no
preference whatsoever given claims of employes over claims of other unsecured
creditors of the Company.
7.2 Determination of Insolvency. Notwithstanding any other provisions
of this Trust, the following provisions shall apply:
- 24 -
30
(a) The Board of Directors and the Chief Executive Officer of the
Company shall have the fiduciary duty and responsibility on behalf of
General Creditors to notify the Trustee promptly in writing in the event
the Company is Insolvent, and the Trustee shall have the right to rely
thereon to the exclusion of all directions or claims for payment made
thereafter by Participants.
(b) If the Trustee has actual knowledge that the Company is
Insolvent, the Trustee shall act in accordance with Section 7.3 hereof.
(c) Unless the Trustee receives written notice from the Board of
Directors or the Chief Executive Officer of the Company that the Company
is Insolvent, or from a person claiming to be a General Creditor and
claiming that the Company is Insolvent, the Trustee shall have no duty to
inquire whether the Company is Insolvent. If the Trustee receives a
written allegation from a person claiming to be a General Creditor that
the Company is Insolvent, the Trustee's only duty of inquiry shall be to
request that the Company's independent public accountants determine
whether the Company is Insolvent, and shall suspend benefit payments
pending such determination. If the Company's independent public
accountants advise the Trustee that the Company is not Insolvent, it
shall resume payments in accordance with this Trust. If the Trustee
receives notice of the Company's Insolvency pursuant to this Section
7.2(c), it shall act in accordance with [this Section and] Section 7.3
hereof.
7.3 Payments When Company Is Insolvent. Notwithstanding any other
provision of this Trust to the contrary, if the Trustee has actual knowledge as
described in 7.2(b), has been advised pursuant to 7.2(c) or receives actual
notice described in Section 7.2(a) that the Company is Insolvent
(a) by reason of Section 1.11(b), the Trustee shall suspend
payments to Participants and shall notify Participants of the suspension,
and shall hold the Trust Fund for the benefit of the General Creditors,
and shall pay and deliver the entire amount of the Trust Fund only as a
court competent jurisdiction, or duly appointed receiver or other person
authorized to act by such court, may order or direct to make the Trust
Fund available to satisfy the claims of the General Creditors (payments
to Participants in accordance with the terms of the Plan may be resumed
only pursuant to Section 7.4 hereof); or
- 25 -
31
(b) by reason of Section 1.11(a), the Trustee shall suspend
payments to Participants and shall notify Participants of the suspension,
and shall (i) hold the Trust Fund for the benefit of General Creditors or
(ii) pay over all or a portion of the Trust Fund to General Creditors if
directed by the Company or an appropriate judicial forum.
Nothing in this Trust Agreement shall in any way diminish any rights of
Participants to pursue their rights as unsecured creditors of Company with
respect to benefits under the Plan, or otherwise.
7.4 Resumption of Duties after Insolvency. In the absence of notice of a
Court order to the contrary, the Trustee shall resume all of its duties and
responsibilities under the Trust, including payments to Participants if
otherwise provided for herein, within thirty (30) days of the Trustee's receipt
of a determination from the Company's independent public accounting firm that
the Company is no longer Insolvent.
(a) Trust Recovery of Payments to Creditors. In the event that
amounts are paid from the Trust Fund to General Creditors of the Company,
then as soon as practicable after the Company is no longer Insolvent, the
Company shall deposit into the Trust Fund a sum to equal to the Funding
Amount, determined as of the date the Company is no longer Insolvent,
which date shall be a Valuation Date. The Company (or, after a Change of
Control, the Company's independent public accountants) shall provide the
Trustee with written certification of such Funding Amount. If the Funding
Amount is not paid by the Company within ninety (90) days of the
Trustee's receipt of such notice, the Trustee shall demand payment and
the provisions of Section 3.5 shall apply.
(b) Determination of Payment Amount; Resumption of Payments.
Provided that there are sufficient assets of the Trust Fund, if Trustee
discontinues the payment of benefits from the Trust pursuant to Section
7.3 and subsequently resumes such payments, the first payment following
such discontinuance shall include the aggregate amount of all payments
due to Participants under the terms of the Plan for the period of such
discontinuance, as determined by the Plan Administrator, less the
aggregate amount of any payments made to Participants by the Company in
lieu of the payments
- 26 -
32
provided for hereunder during any such period of discontinuance. If the
Trustee suspends a payment to a Participant under this Section, and
subsequently makes such payment, the payment shall include interest at
the rate of interest per annum equal to the prime rate as published by
NBD Bank for each day from the date of suspension to the date of payment,
as calculated by the Plan Administrator.
7.5 Reserved.
VIII. RESIGNATION OR REMOVAL OF TRUSTEE
8.1 Resignation or Removal of Trustee. The Trustee may resign for any
reason or for no reason and at any time by giving thirty (30) days prior written
notice to the Company (or such shorter notice as may be agreed to by the Company
and the Trustee). Subject to Section 8.2(b) hereof, the Company may remove the
Trustee, for any reason and with or without cause, by giving thirty (30) days
prior written notice to the Trustee (or such shorter notice as may be agreed to
by the Company and the Trustee).
8.2 Successor Trustee. In the event of the resignation or removal of a
Trustee, a successor Trustee shall be appointed. Any successor Trustee appointed
pursuant to this Section must be a corporation which is not an affiliate of the
Company and which is authorized under the laws of the United States or of any
state to administer trusts and has at the time of its appointment total capital
and surplus of at least Fifty Million Dollars ($50,000,000). The Company shall
give notice of any such appointment to the retiring Trustee and the successor
Trustee. A successor Trustee shall be appointed in accordance with the following
provisions:
(a) At any time prior to a Change of Control, a successor Trustee
shall be appointed by the Company. If a Trustee should resign or be
removed, and the Company does not notify the Trustee of the appointment
of a successor Trustee within forty-five (45) days of its notice of its
resignation or removal, then the Company shall be deemed to have failed
to have appointed a successor Trustee, and the Trustee shall apply to a
court of competent jurisdiction for appointment of a successor Trustee.
(b) After the occurrence of a Change of Control, the Trustee who
is the Trustee on the date of the Change of Control may be removed by the
- 27 -
33
Company for three (3) years from the date of the Change of Control. If a
Trustee resigns or is removed at any time after the date of a Change of
Control, the Trustee shall apply to a court of competent jurisdiction for
appointment of a successor Trustee.
Notwithstanding Section 8.1, no resignation by or removal of the Trustee shall
be effective prior to the effective date of the appointment of a successor
Trustee by the Company or a court of competent jurisdiction.
8.3 Duties of Retiring and Successor Trustees. In the event of the
resignation or removal of a Trustee, the retiring Trustee shall within thirty
(30) days after the effective date of resignation or removal furnish to the
successor Trustee and the Company a final accounting of its administration of
the Trust. A successor Trustee shall succeed to the right and title of the
predecessor Trustee in the assets of the Trust Fund and the retiring Trustee
shall deliver the property comprising the assets of the Trust Fund (less any
unpaid fees and expenses of the retiring trustee) to the successor Trustee,
together with any instruments of transfer, conveyance, assignment, and further
assurance as the successor Trustee may reasonably require. All of the provisions
of the Trust set forth herein with respect to the Trustee shall relate to each
successor Trustee with the same force and effect as if such successor Trustee
had been originally named as the Trustee hereunder. To the extent permitted by
law, neither the Trustee nor the successor Trustee shall be liable for any act
or failure to act, and shall not be required to examine the accounts, records,
or acts of the other.
8.4 Reserved.
IX. AMENDMENT AND TERMINATION OF TRUST
9.1 Amendment. Except as otherwise provided in Section 2.3 of this
Trust, the Trust may be amended (but may not be not revoked unless all of the
Company's obligations with respect to the Plan have been satisfied) in writing
from time to time by delivery to the Trustee of such amendment executed by the
Company, which amendment shall include the effective date of such amendment. Any
amendment of the Trust may be made:
(a) prior to a Change of Control, without limitation and in any
manner and effective as of any date, including a retroactive effective
date, if
- 28 -
34
accompanied by the written certification that no Change of Control has
occurred;
(b) after a Change of Control, only if a period of three (3)
years has elapsed since the Change of Control, and either:
(1) such amendment is accompanied by the specific written
consent to the amendment by Participants whose actuarial interests
under the Plan, computed by the Company's independent public
accountants as of the effective date of such amendment, represent
at least 51% of the total of all actuarial interests under the
Plan; or
(2) such amendment is accompanied by the opinion of legal
counsel satisfactory to the Trustee that the amendment is necessary
for the purpose of conforming the Trust to any present or future
federal or state law (including revenue laws) relating to trusts of
this or similar nature, as such laws may be amended from time to
time, and a certification that a copy of such notice and opinion of
counsel has been delivered to each Participant.
No amendment shall conflict with the terms of the Plan subject to amendment, and
no amendment may reduce the "Funding Amount" or the contribution requirements of
Article III to less than 50% of the actual benefit obligation on the books of
the Company; provided such amendment shall be effective prior to a Potential
Change of Control or a Change of Control. No amendment shall operate to change
the duties and liabilities of the Trustee without its consent, or make the Trust
revocable after it has become irrevocable in accordance with Section 2.3 hereof
unless the Company has satisfied all obligations it may have with respect to the
Plan as of the date of such amendment. The Company and the Trustee shall execute
such amendments of the Trust as shall be necessary to give effect to any
amendment made in accordance with this Section.
9.2 Termination. After all assets of the Trust Fund have been
distributed by the Trustee to the Participants or their Beneficiaries in
accordance with Article VI, the Trustee shall render an accounting, which shall
be the final accounting, in the manner provided for in Section 4.3. Upon
acceptance of the accounting by the Company, any assets remaining in the Trust
Fund, after deduction of such reasonable amount for compensation and expenses as
provided for in Section 10.7,
- 29 -
35
shall be returned to the Company in the manner provided in Section 6.8, and the
Trust shall terminate thereupon. The Trust and all the rights, titles, powers,
duties, discretions and immunities imposed on or reserved to the Trustee and the
Company, shall continue in effect until all assets of the Trust Fund have been
distributed as provided herein.
9.3 Reserved.
X. GENERAL PROVISIONS
10.1 Coordination with Plan. The responsibilities of the Trustee shall
be governed solely by the terms of this Trust Agreement.
10.2 Litigation. In any action or proceeding regarding the Trust, the
Company, any assets of the Trust Fund, or the administration of the Trust, any
creditors who are not parties to such action or proceedings and any other
persons having or claiming to have a beneficial interest in the Trust shall not
be necessary parties and shall not be entitled to any notice of process. Any
final judgment which is not appealed or appealable and which may be entered in
any such action or proceeding shall be binding and conclusive on the parties
hereto and all persons having or claiming to have a beneficial interest in the
Trust. Acceptance by a creditor of assets of the Trust Fund shall constitute a
release of an equal amount of any obligations of the Company to such creditor.
10.3 Trustee's Action Conclusive. The Trustee's exercise or non-exercise
of its powers and discretion in good faith shall be conclusive on all persons.
No one other than the Company shall be obliged to see to the application of any
money paid or property delivered to the Trustee. The certificate of the Trustee
that it is acting according to this Trust will fully protect all persons dealing
with the Trustee.
10.4 No Guarantee or Responsibility. Notwithstanding any other provision
of this Trust to the contrary, the Trustee does not guarantee payment of any
amount which may become due and payable to a Participant. The Trustee shall have
no responsibility for the disclosure to Participants regarding the terms of the
Plan or of this Trust, or for the validity thereof. The Trustee shall not be
responsible for administrative functions under the Plan and shall have only such
responsibilities under this Trust Agreement as specifically set forth herein.
The Trustee will be under no liability or obligation to anyone with respect to
any failure on the part of
- 30 -
36
the Company, the Plan Administrator, the Company's independent public accounting
firm, an Investment Manager, or a Participant to perform any of their respective
obligations under the Plan or this Trust. The Trustee shall be fully protected
in relying upon any notice or direction provided to it from any party in
connection with the Trustee's duties hereunder which the Trustee in good faith
believes to be genuine, and executed and delivered in accordance with this
Trust. Nothing in this Trust shall be construed as requiring the Trustee to make
any payment in excess of the amounts held in the Trust Fund at the time of such
payment or otherwise to risk or expend its own funds.
10.5 Liabilities Mutually Exclusive. Each of the Trustee and the
Company shall be responsible only for its own acts or omissions.
10.6 Indemnification. The Company agrees to indemnify to the extent
permitted by law the Trustee and hold it harmless against Trustee's costs,
expenses and liabilities (including, without limitation, attorneys' fees and
expenses) arising out of or in connection with the performance of the Trustee's
duties arising hereunder (but excluding costs arising as a result of the
Trustee's bad faith or gross negligence in the performance of its
responsibilities hereunder), and to be primarily liable for such payments. If
the Company does not pay such costs, expenses and liabilities in a reasonably
timely manner, Trustee may obtain payment from the Trust. This Section shall
survive the termination of the Trust.
10.7 Expenses and Compensation. The Trustee shall be paid compensation
by the Company in an amount agreed to by the Company and the Trustee. The
Trustee shall be reimbursed by the Company for reasonable expenses incurred by
it in the management and administration of this Trust Agreement, including the
reasonable compensation of the Trustee's counsel and other agents; and if the
Trustee is not timely reimbursed with respect to amounts due pursuant to this
Section 10.7 (or in the case of expenses to be incurred pursuant to Section 3.5
hereof), the Trustee may charge such amounts against the Trust Fund. Any
compensation or expenses so agreed upon or otherwise payable not paid by the
Company on a timely basis may be charged to the Trust Fund no more frequently
than quarter-annually upon notice to the Company.
10.8 Reserved.
- 31 -
37
10.9 Notice. Any notice to the Trustee or to the Company required or
permitted under this Trust shall be duly and properly given and delivered if
sent by certified United States mail, return receipt requested, to the Trustee
at:
The Northern Trust Company
Attn: Trust Department
Fifty South LaSalle Street
Chicago, Illinois 60675
and to the Company at:
The Detroit Edison Company
Attn: Vice President and Treasurer
2000 Second Street
Detroit, Michigan 48226
or to such other address as the Trustee or the Company may specify by written
notice to the other.
10.10 Antiassignment Clause. Benefits payable to 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.
10.11 True and Correct Document. Any persons dealing with the Trustee
may rely upon a copy of this Trust and any amendments thereto certified to be
true and correct by the Trustee.
10.12 Waiver of Notice. Any notice required under this Trust may be
waived by the person entitled to such notice.
10.13 Counterparts. This Trust may be executed in two or more
counterparts, any one of which will be an original without reference to the
others.
10.14 Gender and Number. Words denoting the masculine gender shall
include the feminine and neuter genders and the singular shall include the
plural and the plural shall include the singular wherever required by the
context.
- 32 -
38
10.15 Successors. This Trust shall be binding on all persons entitled
to payments hereunder and their respective heirs and legal representatives, and
on the Company, the Trustee, and their respective successors.
10.16 Severability. If any provision of this Trust is held to be
illegal or invalid, such illegality or invalidity shall not affect the remaining
provisions of this Trust, which shall be construed and enforced as if such
illegal or invalid provisions had never been inserted herein.
10.17 Applicable Law. The Trust shall be governed by and construed in
accordance with the laws of the State of Michigan with respect to the Company's
obligations and in accordance with the laws of the State of Illinois with
respect to the Trustee's obligations and Trust Administration.
IN WITNESS WHEREOF, the Company and the Trustee have caused this trust
agreement to be signed by their duly authorized representatives, and have caused
their respective seals to be hereunto affixed, as of the Effective Date.
THE DETROIT EDISON COMPANY
By
------------------------
Its
------------------------
THE NORTHERN TRUST COMPANY
as Trustee
By
------------------------
Its
------------------------
- 33 -