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ITEM 14(a)3, EXHIBIT 10(v)
TESORO PETROLEUM CORPORATION
BOARD OF DIRECTORS DEFERRED COMPENSATION TRUST
This agreement made and entered into by and between Tesoro Petroleum
Corporation and Frost National Bank, a banking corporation, located in San
Antonio, Bexar County, Texas, as Trustee.
WHEREAS, Tesoro Petroleum Corporation adopted the Tesoro Petroleum
Corporation Board of Directors Deferred Compensation Plan effective April 1,
1995, and approved the establishment of this Trust for the Payment of benefits
from that Plan;
NOW, THEREFORE, in consideration of the mutual undertakings of each of
the parties, the parties agree to the establishment of this Tesoro Petroleum
Corporation Board of Directors Deferred Compensation Trust to read as follows:
ARTICLE I
DEFINITIONS
1.1 BOARD OF DIRECTORS. "Board of Directors" means the Board of Directors
of Corporation.
1.2 CHANGE OF CONTROL. For purposes of this Agreement, a "change of
control" shall be deemed to have occurred if (i) there shall be
consummated (A) any consolidation or merger of Corporation in which
Corporation is not the continuing or surviving corporation or pursuant
to which shares of Corporation's Common Stock would be converted into
cash, securities or other property, other than a merger of Corporation
where a majority of the Board of Directors of the surviving
corporation are, and for a two-year period after the merger continue
to be, persons who were directors of Corporation immediately prior to
the merger or were elected as directors, or nominated for election as
director, by a vote of at least two-thirds of the directors then still
in office who were directors of Corporation immediately prior to the
merger, or (B) any sale, lease, exchange or transfer (in one
transaction or a series of related transactions) of all or
substantially all of the assets of Corporation, or (ii) the
shareholders of Corporation shall approve any plan or proposal for the
liquidation or dissolution of Corporation, or (iii) (A) any "person"
(as such term is used in Sections 13(d) and 14(d)(2) of the Securities
Act), other than Corporation or a subsidiary thereof or any employee
benefit plan sponsored by Corporation or a subsidiary thereof, shall
become the beneficial owner (within the meaning of Rule 13d-3 under
the Securities Act) of securities of
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Corporation representing 20 percent or more of the combined voting
power of Corporation's then outstanding securities ordinarily (and
apart from rights accruing in special circumstances) having the right
to vote in the election of directors, as a result of a tender or
exchange offer, open market purchases, privately negotiated purchases
or otherwise, and (B) at any time during a period of two years
thereafter, individuals who immediately prior to the beginning of such
period constituted the Board of Directors of Corporation shall cease
for any reason to constitute at least a majority thereof, unless the
election or the nomination by the Board of Directors for
election by Corporation's shareholders of each new director during
such period was approved by a vote of at least two-thirds of the
directors then still in office who were directors at the beginning of
such period.
1.3 CODE. "Code" means the Internal Revenue Code of 1986, as amended from
time to time.
1.4 COMMITTEE. "Committee" means the persons who are from time to time
serving as members of the committee administering the Plan.
1.5 CORPORATION. "Corporation" means Tesoro Petroleum Corporation.
1.6 PARTICIPANT. "Participant" means a member of the Board of Directors
of Corporation who is not otherwise employed by Corporation or a
subsidiary of Corporation.
1.7 PLAN. "Plan" means the Tesoro Petroleum Corporation Board of
Directors Deferred Compensation Plan, as amended from time to time.
1.8 PLAN YEAR. "Plan Year" means the calendar year.
1.9 SECURITIES ACT. "Securities Act" means the Securities Exchange Act of
1934, as amended from time to time.
1.10 TRUST. "Trust" means the Corporation Board of Directors Deferred
Compensation Trust created by this agreement.
1.11 TRUSTEE. "Trustee" means Frost National Bank which is serving as
trustee under this agreement or any successor or successors as shall
be appointed pursuant to this agreement upon the resignation or
removal of the previous person or entity serving as trustee under this
agreement.
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ARTICLE II
ESTABLISHMENT OF TRUST
2.1 PURPOSE. This Trust is hereby established by Corporation and the
Trustee for the sole purpose of creating a fund to provide for the
payment of deferred compensation to the Plan Participants.
2.2 IRREVOCABLE SUBJECT TO CERTAIN EXCEPTIONS. Subject only to the
exceptions in this section all contributions to, all assets held in,
and all earnings of this Trust are solely and irrevocably dedicated to
the payment of (a) the deferred compensation described in the Plan for
the benefit of the Participants and (b) the reasonable expenses of
administering the Trust until the Plan has been satisfied in full, at
which time the Trust will terminate as provided in Section 10.3.
Provided, however, the assets held in the Trust will be subject to
judgment creditors of Corporation and will be subject to the general
creditors of Corporation if Corporation becomes insolvent. To that
end if the Trustee receives notice from Corporation pursuant to
Section 5.3, the Trustee will suspend payment of all benefits under
the Trust, and will hold all assets of the Trust for the benefit of
Corporation's judgment creditors and/or general creditors as the case
may be. Further, if the Trustee receives written allegations of
Corporation's insolvency from any other source, the Trustee will
suspend the payment of all benefits under the Trust, and will hold all
of the Trust's assets for the benefit of Corporation's general
creditors, and must determine within 30 days whether Corporation is
solvent. However, the Trustee will resume payments, including any
benefits suspended, if it determines Corporation is solvent. In the
case of the Trustee's actual knowledge of a levy on the assets of the
Trust by a judgment creditor or the Trustee's actual knowledge of or
determination of Corporation's insolvency, the Trustee will deliver
the assets of the Trust as directed by a court of competent
jurisdiction.
ARTICLE III
CONTRIBUTIONS AND PLAN ADMINISTRATION
3.1 CONTRIBUTIONS. Corporation may contribute in cash or assets to the
Trust established for it the cost of providing benefits under the Plan
for the Participants at such time or times and in the manner
determined by Corporation.
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3.2 ESTABLISHING CONTRIBUTION ACCOUNTS FOR PARTICIPANTS. Corporation
will, at the time of its contribution, notify the Committee as to the
Participant for which the contribution is made so that the Committee
may maintain separate records for the accounts of the Participants who
are being funded by the Trust.
3.3 VALUATION OF TRUST; ALLOCATION OF GAINS AND LOSSES TO PARTICIPANTS'
ACCOUNTS. The Trustee will provide to the Committee, at intervals
agreed upon by them, but no less often than once each Plan Year, a
statement of the value of the Trust assets and the Trust income and
losses.
3.4 RETURN OF EXCESS ASSETS TO COMPANY. Corporation may at any time
request the plan consultant who administers the plan (or in the case
of a Change of Control, administered it just prior to the Change of
Control) to determine the present value of the Accounts as determined
under the Plan. If the fair market value of the assets held in the
Trust, as determined by the Trustee as of that same date, exceeds the
total of the Accounts of all Participants and Beneficiaries by 25
percent, Corporation may direct the Trustee to return to it all of the
excess funds.
ARTICLE IV
POWERS, DUTIES AND RESPONSIBILITIES OF THE TRUSTEE
4.1 GENERAL RESPONSIBILITIES. The Trustee, has the exclusive
responsibility for all of the Trust funds and all the powers necessary
to receive, hold, preserve, protect, conserve, manage and invest the
Trust funds as provided generally in this agreement and to pay all
costs and expenses. The Trustee will be responsible only for the sums
actually received by it as Trustee and will not be responsible for
determining the amount necessary to fund the Trust or for collecting
any contributions from Corporation.
4.2 INVESTMENT RESPONSIBILITY OF TRUSTEE. Except as set forth in the
following paragraphs of this section, the Trustee is required to
invest the Trust assets solely in U.S. Treasury obligations which
mature in three years or less unless and until the Committee (a)
issues a different investment direction, (b) directs the Trustee to
assume full investment responsibilities for the Trust or (c) directs
the Trustee to accept the direction of one or more investment managers
appointed by the Committee. If the Committee issues an investment
direction, permits the Trustee to assume full investment
responsibility or appoints one or more investment managers to direct
the investment of a portion of the Trust assets, the Trustee is
authorized and
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empowered to hold any asset, whether or not productive of income or
whether consisting of wasting assets, and to invest in any assets of
any kind or nature, whether real, personal or mixed, whether tangible
or intangible, in any rights or interests in property, or in any
evidence or indicia of property, including but not limited to the
following types of properties or interests therein, or anything of a
similar character, kind or class: insurance contracts, fees,
beneficial interests, leaseholds, bonds, whether taxable or
non-taxable, mutual funds, mortgages, leases, notes, whether secured
or not, obligations, savings accounts, certificates of deposit or like
investments with the commercial department of any bank, including any
bank acting as Trustee, common, pooled or collective trust funds which
any corporate trustee or any other corporation may now have or in the
future may adopt, or options, rights or warrants which entitle the
Trustee to subscribe to or purchase securities, so long as the
investments are made in accordance with the laws of the state of the
situs of the Trust and the terms of this agreement.
When the Trustee receives funds to be invested or determines that
assets in the Trust fund should be sold and the proceeds held for a
period of time pending reinvestment or other purpose, the funds may be
held uninvested in cash or invested in short-term investments such as
certificates of deposit with the Trustee, U.S. Treasury bills, savings
accounts with the Trustee, commercial paper or other similar assets
which may be offered by the Trustee and as may be determined by the
Trustee in its sole discretion.
Notwithstanding the first paragraph of this section, if there is a
Change of Control, all funds deposited prior to the Change of Control
are to be invested solely in U.S. Treasury obligations which mature in
three years or less unless there have been insurance policies
contributed to or purchased by the Trust prior to the Change of
Control in which event they shall be transferred to Corporation for a
corporation contribution in the amount of their terminal reserve value
plus cash surrender value, if any, and if Corporation elects not to
purchase said policies, the policies shall be distributed to the
insured Participant.
4.3 INVESTMENT POWERS OF TRUSTEE. The Trustee has, subject to the
requirements of Sections 4.1 and 4.2, the following powers, duties and
obligations relating to the receipt, preservation, conservation,
protection, management, investment and reinvestment of both principal
and income and disposition of the Trust created by this agreement, as
the Trust may be composed from time to time, in addition to all of the
powers, duties and obligations of the Trustee under common law and the
Texas Trust Code until the situs of the Trust is removed to another
state in which event the laws of the state of the situs of the Trust
will then govern:
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(a) To keep any and all securities and other property in its name
provided that its fiduciary capacity is disclosed;
(b) To vote, either in person or by proxy, any share of stock held
as a part of the assets of the Trust fund;
(c) To collect the principal and income of the Trust fund as the
same may become due and payable and to give binding receipt
therefor;
(d) To take any action, whether by legal proceeding, compromise,
or otherwise, as the Trustee in its sole discretion deems to
be in the best interest of the Trust if there is a default in
the payment of any principal or income of the Trust at any
time;
(e) To invest, sell and reinvest Trust assets in any assets it
selects within the limits described in Sections 4.1 and 4.2;
(f) To borrow from or loan such sums as the Trustee considers
necessary or desirable, and for that purpose to mortgage or
pledge all or any part of the property of the Trust;
(g) To substitute insureds on any policy held by the Trust; and
(h) To employ such accountants, lawyers, brokers, or other agents
as the Trustee deems advisable in administering the Trust
funds.
The Trustee will not be required to take any legal action to collect,
preserve or maintain any Trust property unless it has been indemnified
either by the Trust involved, or by Corporation with respect to any
expenses or losses to which it may be subjected by taking that action.
Any property acquired by the Trustee through the enforcement or
compromise of any claim or claims it has as Trustee will become a part
of the Trust fund.
4.4 PAYMENT AND DISTRIBUTION POWERS OF TRUSTEE. The Trustee has the
following powers relating to payments and distributions to be made
from the Trust funds.
(a) Pursuant to the terms of the Plan to pay, distribute and
deliver to a Participant any amounts due to him under the
terms of the Plan;
(b) Pursuant to the terms of Sections 2.2 and 5.3 to pay,
distribute and deliver to any judgment creditor and/or general
creditor, as the case may
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be, who qualified for it those sums determined to be due by
the appropriate authority;
(c) To pay out of the Trust fund all taxes of any nature levied,
assessed or imposed upon the Trust fund, all reasonable
expenses, including but not limited to, counsel fees, and the
Trustee's compensation; and
(d) Pursuant to the terms of Article III, upon receipt of a
certification by the actuary that excess funds are held in the
Trust, to return those excess funds to Corporation.
4.5 RELIANCE UPON REPRESENTATIONS OF TRUSTEE. All persons dealing with
the Trustee are entitled to rely upon the representations of the
Trustee as to its authority and are released from any duty to inquire
into its authority for taking or omitting any action or to verify that
any money paid or other property delivered to the Trustee is used by
the Trustee for trust purposes. Any action of the Trustee under the
Trust created by this agreement will be conclusive evidence of the
facts recited in it. All persons will be fully protected when acting
or relying upon any notice, resolution, instruction, direction, order,
certificate, opinion, letter, telegram or other document believed by
those persons to be genuine, to have been signed by the Trustee, and
to be the act of the Trustee.
4.6 DETERMINATION OF TRUSTEE'S OBLIGATIONS UNDER AGREEMENT; EMPLOYMENT OF
COUNSEL. The Trustee may engage and consult with legal counsel of its
choice, who may be counsel for Corporation or Trustee's own general
counsel, with respect to the meaning or construction of this agreement
or the Trustee's obligations or duties under this agreement.
4.7 WAIVER OF BOND, INVENTORY, RETURN AND REPORT TO COURT. The Trustee
will not be required to give bond or other security for the faithful
performance of its duties unless required by a law which cannot be
waived; and the Trustee will not be required to make any inventory,
return, or report to any court unless required by a law which cannot
be waived.
4.8 NEGATION OF TRUSTEE ENGAGING IN BUSINESS ENTERPRISE. Without regard
to any other provision of this agreement and any powers given to the
Trustee in this agreement, the Trustee will have no power to start,
enter into, or otherwise engage in a business enterprise if the
activities would constitute the carrying on of a trade or business
within the meaning of Treasury Regulation Section 301.7701.
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ARTICLE V
NOTICES AND DIRECTIONS
5.1 PROPER NOTICE TO TRUSTEE. The Trustee will not be bound by any
certificate, notice, resolution, consent, order, information or other
communication unless and until it has been received at a location
which is mutually agreeable to the parties and is in writing, signed
by a person designated pursuant to Section 5.2.
5.2 TRUSTEE'S RELIANCE ON NOTICE BY COMMITTEE AND CORPORATION. The
Trustee, in all matters pertaining to its management, investment and
distribution of the Trust, when it acts in good faith, may rely upon
any such notice, resolution, instruction, direction, order,
certificate, opinion, letter, telegram or other document believed by
the Trustee to be genuine, to have been signed by a proper
representative of the Committee or other party permitted to issue a
direction to it. In this connection, Corporation and the Committee
shall furnish to the Trustee the name and signature of the person or
persons who are entitled to act on behalf of Corporation when
communicating with or directing the Trustee on matters relating to the
Trust.
5.3 NOTICE TO TRUSTEE OF CORPORATION'S INSOLVENCY. In the event of a levy
by a judgment creditor or in the event of Corporation's insolvency
during the term of the Trust, Corporation's Board of Directors and
chief executive officer must give written notice to the Trustee within
a reasonable time not to exceed three days of the levy or of a finding
of insolvency, as the case may be. For this purpose "insolvency"
means the earlier of: becoming subject to proceedings as a debtor
under the federal Bankruptcy Code, the general assignment by
Corporation to or for the benefit of its creditors, or the inability
of Corporation to pay its debts as they mature.
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ARTICLE VI
TRUSTEE'S FEE AND EXPENSE
The Trustee will receive such compensation for services rendered as is
agreed upon from time to time between the Trustee and Corporation. Likewise,
the Trustee will be reimbursed for expenses properly and actually incurred in
the performance of its duties under this agreement. The Trustee's compensation
and the expenses of the Trust will be paid by Corporation, but should it fail
to do so, the Trustee is authorized to charge such compensation and expenses to
the Trust.
ARTICLE VII
LIABILITY OF THE TRUSTEE
7.1 TRUSTEE GENERALLY NOT LIABLE WHEN ACTING IN GOOD FAITH. The Trustee
will not be liable to the Trust or to any person having a beneficial
interest in the Trust for any losses or decline in value which may be
incurred upon any investment of the Trust fund, or for failure of the
fund to produce any or greater earnings, interest, or profits, so long
as the Trustee acts in good faith.
7.2 TRUSTEE GENERALLY NOT LIABLE FOR ACT OR OMISSION AT DIRECTION OF
COMMITTEE. The Trustee will not be liable for any act or omission by
it because of a direction of the Committee, Corporation or agent
appointed by either of them except to the extent required by any
applicable state or federal law, which liability cannot be waived.
When the Trustee has made any payment out of the Trust fund at the
direction of the Committee, Corporation or any agent appointed by
either of them, it will not be responsible for the correctness of the
amount of the payment to the recipient, or the method by which it is
paid. The Trustee is also protected in relying upon any certificate,
notice, resolution, consent, order, or other communication purporting
to have been signed on behalf of the Committee, Corporation or an
agent appointed by either of them which it believes to be genuine,
without any obligation on the part of the Trustee to ascertain whether
or not the provisions of this agreement are being fulfilled.
7.3 INDEMNIFICATION OF TRUSTEE. The Trustee shall be indemnified and held
harmless from any loss, liability, claim cost or expense (including
attorney fees, court costs, and other costs in defending a lawsuit)
arising out of its acting as Trustee of the Trust except for bad faith
or gross negligence. The Trustee
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shall not be liable for the actions of any other fiduciary or the
failure of any other fiduciary to take action in a given situation.
7.4 TRUSTEE'S POWER TO WITHHOLD FOR PAYMENT OF TAXES. The Trustee may, in
its sole discretion, withhold from distribution all or any part of the
fund which the Trustee considers necessary and proper for the payment
of taxes under present or future laws, which the Trustee is obligated
to pay or withhold.
7.5 TRUSTEE NOT REQUIRED TO PREPARE RETURNS OR REPORTS. The Trustee will
not be required to prepare, file, or distribute any tax return or
other report required by a governmental agency under state or federal
law. All such returns or reports shall be the obligation of
Corporation.
7.6 WHEN DETERMINING COURSE OF ACTION TRUSTEE MAY RELY UPON COMMITTEE. If
at any time the Trustee is in doubt concerning the course which it
should follow in connection with any matter relating to the
administration of the Trust, it may request the advice of the
Committee and be protected in relying upon the written advice or
direction given by the Committee except during any four-year period
beginning on the day a Change of Control occurs. During any such
period the Trustee may not request and rely on the advice of the
Committee.
ARTICLE VIII
SETTLEMENT OF THE ACCOUNTS OF THE TRUSTEE
8.1 TRUSTEE'S MAINTENANCE OF RECORDS. The Trustee will keep all records
necessary in the conduct of the Trust. The Trustee's books and
records of the Trust fund are open to inspection by the Committee,
Corporation and/or the Participants at all reasonable times during
business hours of the Trustee.
8.2 TRUSTEE'S RENDERING OF ACCOUNTING TO COMMITTEE. Within 60 days after
the close of each Plan Year, or such other times as requested by the
Committee and as of the date of the removal or resignation of the
Trustee, the Trustee must render to the Committee an accounting and
report of the Trust fund for the Plan Year or other period that is
applicable since the previous accounting. The report is to reflect
the transactions for the period covered, the cost of assets and
investments, the fair market value of the assets held in the Trust and
the amount held for the funding of Corporation's obligation to the
Participants as of the end of the Plan Year or such other date as is
applicable. The report is to be open for inspection for 90 days after
its receipt by the Committee, and if objections are not filed within
that period of time, it is
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assumed that the report is approved. That approval will constitute a
full and complete discharge and release to the Trustee by Corporation,
all of the Participants and all other persons having or claiming any
interest in any of the Trust fund.
ARTICLE IX
ACTION, RESIGNATION, REMOVAL AND SUBSTITUTION OF TRUSTEE
9.1 APPOINTMENT OF TRUSTEE AND OPERATION IF MULTIPLE TRUSTEES. One or
more entities or one or more individuals will serve as Trustee, as
determined from time to time by the members of the Board of Directors
who are not eligible to participate in the Plan. When more than one
entity and/or individual serves as Trustee, any action by the Trustees
will be determined by the majority of the Trustees. Those actions
will be binding upon all parties at interest. The entities and/or
individuals who collectively act as Trustee may act by vote at a
meeting or by a written consent without a meeting. Any act of more
than one individual or entity serving as Trustee will be sufficiently
evidenced if certified to by one of the individuals or entities
serving as Trustee. Also, if there is more than one individual and/or
entity serving as Trustee, one of the Trustees may be given authority
to perform all administrative and ministerial duties. Any individual
who serves as Trustee may be an employee of Corporation. Each Trustee
will serve until a successor Trustee is named by the members of the
Board of Directors who are authorized to appoint the Trustee or until
his death or incapacity or his or its resignation or removal, in which
event the members of the Board of Directors who are authorized to
appoint the Trustee will name a successor Trustee.
9.2 RESIGNATION OF TRUSTEE. The Trustee or any successor Trustee may
resign as Trustee at any time by filing with Corporation its or his
written resignation. No resignation will take effect until 60 days
from the date of notice unless prior to that time a successor Trustee
has been appointed and he or it has accepted the office.
9.3 REMOVAL OF TRUSTEE. The Trustee or any successor Trustee may be
removed by Corporation at any time. No removal will take effect until
60 days from the date of notice unless prior to that time a successor
Trustee has been appointed and he or it has accepted the office and
the Trustee consents to the earlier date.
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9.4 NO VACANCY IN OFFICE OF TRUSTEE. Any vacancy in the office of Trustee
created by the resignation or removal of the Trustee will not
terminate the Trust. Upon removal or resignation of the Trustee, the
members of the Board of Directors who are authorized to appoint the
Trustee must appoint a successor Trustee.
9.5 APPOINTMENT OF SUCCESSOR TRUSTEE. The appointment of a successor
Trustee will be accomplished by the delivery to the resigning or
removed Trustee, as the case may be, of a written appointment of the
successor Trustee by the members of the Board of Directors who are
authorized to appoint the Trustee and the written acceptance of the
appointment by the successor Trustee. Any successor Trustee must be
one or more individuals (who may be employees of Corporation) or an
entity authorized and empowered to conduct a trust business in the
state of the situs of the Trust. This agreement will then be
applicable to each successor Trustee.
9.6 APPOINTMENT OF SUCCESSOR TRUSTEE AFTER A CHANGE OF CONTROL. If a
Trustee dies, becomes incapacitated, resigns or is removed
contemporaneously with or following a Change of Control,
notwithstanding anything to the contrary in this agreement, the
members of the Board of Directors who are authorized to appoint the
Trustee must receive the consent of a majority in interest of the
Participants for whose account assets are held under the terms of this
agreement in order to appoint a successor Trustee. If the members of
the Board of Directors who are authorized to appoint the Trustee
cannot obtain the consent of a majority in interest of the
Participants to any Trustee acceptable to them, then an arbitrator
will be appointed to select the new Trustee which will be appointed by
the members of the Board of Directors who are authorized to appoint
the Trustee. The arbitrator will be selected by permitting each of
Corporation and the Participants (by a vote of the majority in
interest) to strike one name each from a panel of three names obtained
from the American Arbitrator Association. The person whose name is
remaining will be the arbitrator.
9.7 VESTING OF RIGHTS, TITLES, POWERS IN SUCCESSOR TRUSTEE. Any successor
Trustee, after acknowledging acceptance of this agreement, the Trust
assets and the accounting of the retiring Trustee, will be vested with
all the estates, titles, rights, powers, duties, and discretions
granted to the retiring Trustee. The retiring Trustee must execute
and deliver all assignments or other instruments necessary or
advisable for the transfer of all Trust assets as are reasonably
required by the successor Trustee.
9.8 CONTINUANCE OF CORPORATE TRUSTEE THROUGH MERGER. Any corporation into
which any corporate Trustee or any successor corporate Trustee may be
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merged or consolidated, or any corporation resulting from any merger
or consolidation to which any corporate Trustee or any successor
corporate Trustee may be a party, or any corporation to which all or
substantially all of the trust business of any corporate Trustee or
any successor corporate Trustee may be transferred, will be a
successor of such Trustee under this agreement without the filing of
any instrument or the performance of any other act.
ARTICLE X
AMENDMENT AND TERMINATION
10.1 CORPORATION'S RIGHT TO AMEND. The members of the Board of Directors
who are not eligible to participate in the Plan will have the sole
right to amend this agreement. An amendment must be made by an
executed written agreement setting forth the nature of the amendment
and its effective date. No amendment will make this agreement nor the
Trust created by this agreement revocable or will divert the funds
held in the Trust created by this agreement from the purposes set out
in Section 2.2. No amendment will change a Participant's rights under
any provision of this Trust after a Change of Control has occurred,
without the affected Participant's consent, as to assets contributed
to the Trust before the Change of Control and as to the accumulation
of income and appreciation applicable to those assets. No amendment
will increase the duties of the Trustee without its written consent.
10.2 AMENDMENTS NECESSARY TO COMPLY WITH STATE OR FEDERAL STATUTES.
Corporation agrees to make any amendment to this agreement as may be
necessary to maintain compliance with the various federal and state
laws and any amendment may be made retroactively.
10.3 TERMINATION OF TRUST BY CORPORATION. The members of the Board of
Directors who are not eligible to participate in the Plan may
terminate the Trust only after all benefits to the extent funded by
the Trust have been paid to the Participants who are funded by it,
pursuant to the Plan, by executing and delivering to the Trustee a
notice of termination which specifies the date on which the Trust will
terminate. Upon termination, the Trustee will distribute to the
Participants the assets certified to it by the Committee to be
sufficient to fulfill all of the obligations of Corporation under the
Plan at the time and in the form provided in it, and afterward, any
Trust assets remaining will be allocated among the Participants in the
ratio of each Participant's Account to the total value of all
Participant Accounts. The Trust created under this agreement will
automatically terminate upon a determination of the insolvency of
Corporation.
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In that event, the Trustee shall deliver the Trust assets as directed
by a court of competent jurisdiction. The Trust may also be
terminated by Corporation, with the written consent of all of the
Participants whose benefits are funded by it, if a tax, labor or other
federal statute or regulation causes this Trust to become taxable,
before distribution, to the Participant or to become unlawful. In
that event, the Trustee will return the assets to the Corporation.
10.4 CONTINUANCE OF TRUST WHEN CORPORATION CONSOLIDATES, MERGES OR
SELLS SUBSTANTIALLY ALL OF ITS ASSETS. The Trust created by this
agreement will not terminate in the event Corporation consolidates or
merges and is not the surviving corporation, sells substantially all
of its assets, is a party to a reorganization in which its employees
and substantially all of its assets are transferred to another entity,
liquidates or dissolves if there is a successor corporation. Instead,
the Trust will continue until it has fulfilled the obligations to its
Participants as set forth in Section 2.2, at which time it will
automatically terminate.
ARTICLE XI
MISCELLANEOUS
11.1 NO EMPLOYMENT COMMITMENT. The adoption and maintenance of the Trust
created under this agreement will not be deemed to be a contract
between Corporation and the Participants which gives the Participants
the right to be retained on the Board of Directors of Corporation, to
interfere with the rights of Corporation to remove the Participants,
or to interfere with the Participants' rights to terminate their
membership on the Board of Directors at any time.
11.2 NON-ALIENATION OF BENEFITS. No benefits payable or to become payable
from the Trust will be subject to anticipation or assignment by the
Participants or other persons entitled to receive benefits under the
Trust; to attachment by, interference with, or control of any
creditors of the Participants or other persons entitled to receive
benefits under the Trust; or to being taken or reached by any legal or
equitable process in satisfaction of any debt or liability of the
Participants prior to their actual receipt by the Participants or
other persons entitled to receive benefits under the Trust. Any
attempted conveyance, transfer, assignment, mortgage, pledge, or
encumbrance of the Trust, any part of it, or any interest in it by a
Participant, or any person entitled to secure benefits under the
Trust, prior to distribution will be void, whether that conveyance,
transfer, assignment, mortgage, pledge or encumbrance is intended to
take place or become effective before or after any distribution of
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Trust assets or the termination of the Trust fund itself. The Trustee
will never under any circumstances be required to recognize any
conveyance, transfer, assignment, mortgage, pledge or encumbrance by a
Participant, or other person entitled to receive benefits under the
Trust created under this agreement, of a Trust fund created under this
agreement, any part of it, or any interest in it, or to pay any money
or thing of value to any creditor or assignee of a Participant, or
other person entitled to receive benefits under the Trust, for any
cause whatsoever.
11.3 GENDER AND NUMBER OF WORDS. Whenever the context requires it, words
of the masculine, feminine or neuter gender will include one or both
of the others; and words used in either the singular or the plural
number will include the other.
11.4 TEXAS LAW APPLICABLE. The provisions of this agreement shall be
construed, according to the laws of the state of Texas.
11.5 SEVERABILITY OF AGREEMENT. Each provision of this agreement is
severable, and if any provision is found to be void or against public
policy, it will not affect the validity of any other provision hereof.
11.6 DEFINITIONS. Any word not otherwise defined in this agreement shall
have the meaning as defined in the Plan.
IN WITNESS WHEREOF, Corporation and the Trustee have executed this
agreement on this 23rd day of February 1995.
TESORO PETROLEUM CORPORATION
By /s/ WILLIAM T. VAN KLEEF
___________________________________
William T. Van Kleef
Vice President, Treasurer
FROST NATIONAL BANK
By ___________________________________
Trust Officer