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EXHIBIT 99-4
THE DETROIT EDISON COMPANY
IRREVOCABLE GRANTOR TRUST
FOR THE DETROIT EDISON COMPANY
BENEFIT EQUALIZATION PLAN
AS RESTATED AS OF JANUARY 1, 1996
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THE DETROIT EDISON COMPANY
IRREVOCABLE GRANTOR TRUST
FOR THE DETROIT EDISON COMPANY
BENEFIT EQUALIZATION PLAN
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................................................5
1.13 IRC...............................................................5
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..........................................................7
1.20 Trust ............................................................7
1.21 Trust Fund........................................................7
1.22 Trustee ..........................................................7
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1.23 Valuation Date.......................................................7
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..............................10
3.3 Reserved ............................................................10
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..................................................12
4.4 Administrative Powers of Trustee.....................................13
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...........21
6.3 Distributions to Participants........................................21
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6.4 Reserved ...........................................................21
6.5 Insufficient Trust Fund Assets......................................21
6.6 Payment of Excess Assets to Company.................................22
6.7 Company to Pay Withholding and Employment Taxes.....................22
6.8 Payment in Reversion to Company.....................................23
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 .........26
8.1 Resignation or Removal of Trustee...................................26
8.2 Successor Trustee...................................................26
8.3 Duties of Retiring and Successor Trustees...........................27
8.4 Reserved............................................................27
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..........................................................29
10.3 Trustee's Action Conclusive.........................................29
10.4 No Guarantee or Responsibility......................................29
10.5 Liabilities Mutually Exclusive......................................29
10.6 Indemnification.....................................................29
10.7 Expenses and Compensation...........................................30
10.8 Reserved............................................................30
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10.9 Notice ..........................................................30
10.10 Antiassignment Clause............................................31
10.11 True and Correct Document........................................31
10.12 Waiver of Notice.................................................31
10.13 Counterparts.....................................................31
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 DETROIT EDISON COMPANY
BENEFIT EQUALIZATION PLAN
EXHIBIT B THE DETROIT EDISON COMPANY
IRREVOCABLE GRANTOR TRUST
FOR THE DETROIT EDISON COMPANY
BENEFIT EQUALIZATION PLAN
PARTICIPANTS (as defined in the Trust)
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THE DETROIT EDISON COMPANY
IRREVOCABLE GRANTOR TRUST
FOR THE DETROIT EDISON COMPANY
BENEFIT EQUALIZATION PLAN
THIS TRUST AGREEMENT is made this 24th day of July, 1995, as restated in
its entirety effective January 1, 1996, 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 Benefit
Equalization 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
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of providing deferred compensation for a select group of management and/or
highly-compensated employees, and shall not be construed to provide income 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 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 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 ownership of securities, shall be disregarded
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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 by the Board of Directors of the Company on December 5,
1994 (as such resolution may
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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, which shall be the amount necessary to ensure that the assets of
the Trust Fund would, as of the most recent Valuation Date, have been
sufficient to satisfy the Company's obligations due to each respective
Participant under the Plan. Upon any Potential Change of Control and during
any Potential Change of Control Period, however, the "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, which shall be the amount necessary to ensure that the
assets of the Trust Fund would, as of the most recent Valuation Date, have been
sufficient to satisfy the Company's obligations due to each respective
Participant under the Plan. The Company's obligations to each respective
Participant under the Plan shall be limited to benefits attributable to service
rendered by the Participant to the Company.
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
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(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.
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 an individual listed on Exhibit B attached hereto
who
(a) is a Participant in the Plan because of services rendered to the
Company; or
(b) would be a Participant in the Plan because of services rendered to
the Company but is not 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
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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 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
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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
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 Section Section 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:
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(a) the Trust is intended to be a grantor trust under IRC Section
Section 671-678, and shall be construed accordingly. The Company intends
and agrees that it is 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 employee 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
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acquires the right to receive payment(s) under the Plan, any such right
shall be mere unsecured contractual rights of Participants against the
Company, 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 employees
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 employees, 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.
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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, 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
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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.
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.
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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 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
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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;
(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;
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(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;
(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;
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(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.
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
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[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 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
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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, 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
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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
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
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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 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
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manage, acquire and dispose of the 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 Company shall notify Trustee of its
decision prior to the time amounts are payable to Participants.
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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 (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
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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
(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
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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 employees 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:
(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.
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(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
(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.
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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 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.
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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
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.
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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 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
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(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, 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.
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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 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
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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.
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
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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.
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.
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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 L.L. Loomans
-----------------------
Its
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THE NORTHERN TRUST COMPANY
as Trustee
By
-----------------------
Its
-----------------------
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EXHIBIT A
THE DETROIT EDISON COMPANY
IRREVOCABLE GRANTOR TRUST
FOR THE DETROIT EDISON COMPANY
BENEFIT EQUALIZATION PLAN
The Company has established an Irrevocable Grantor Trust to pay benefits under
the Benefit Equalization Plan. A copy of such Plan, including any amendment(s),
is attached hereto.
39
EXHIBIT B
THE DETROIT EDISON COMPANY
IRREVOCABLE GRANTOR TRUST
FOR THE DETROIT EDISON COMPANY
BENEFIT EQUALIZATION PLAN
PARTICIPANTS (as defined in the Trust)
as of December 31, 1995
Name [Date of Birth]
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