Trust Agreement - Pittston Co. and the Chase Manhattan Bank NA
Trust under the Pension Equalization
Plan, Retirement Plan for Non-Employee
Directors and Certain Contractual
Arrangements of The Pittston Company
TRUST AGREEMENT made as of this 16th day
of September, 1994, by and between THE
PITTSTON COMPANY (the "Company") and THE
CHASE MANHATTAN BANK (NATIONAL ASSOCIATION),
as Trustee (the "Trustee").
WHEREAS, the Company has (i) entered into
contractual arrangements with the individuals listed on
Exhibit A to provide supplemental pension payments based on
periods of employment prior to employment with the Company
(collectively, the "Contracts"), (ii) adopted the Pension
Equalization Plan and (iii) adopted the Retirement Plan for
Non-Employee Directors (collectively, the plans referred to
in clauses (ii) and (iii) are referred to as the "Plans");
and
WHEREAS, the Company has incurred or expects to
incur liability under the terms of the Plans and the
Contracts with respect to the individuals participating in
the Plans or covered by the Contracts; and
WHEREAS, the Company wishes to establish a trust
(the "Trust") and to contribute to the Trust assets that
shall be held therein, subject to the claims of the
Company's creditors in the event of the Company's Insolvency
(as hereinafter defined) until paid to Participants and
their Beneficiaries (as hereinafter defined) in such manner
and at such times as specified in the Plans and/or
Contracts; and
WHEREAS, it is the intention of the parties that
this Trust shall constitute an unfunded arrangement and
shall not affect the status of the Plans as unfunded plans
maintained for the purpose of providing deferred
compensation for a select group of management or highly
compensated employees for purposes of Title I of the
Employee Retirement Income Security Act of 1974; and
WHEREAS, it is the intention of the Company to
make contributions to the Trust to provide itself with a
source of funds to assist it in the meeting of its
liabilities under the Contracts and Plans.
NOW, THEREFORE, the parties do hereby establish
the Trust and agree that the Trust shall be comprised, held
and disposed of as follows:
Section 1. Definitions. As used in this Trust
Agreement, the following words and terms shall have the
meanings specified below:
"Beneficiary" means the beneficiary or
beneficiaries last designated by the Participant in
writing under the Plans or Contracts. In the absence
of an effective designation or if the final surviving
designated beneficiary has predeceased the Participant,
the Beneficiary shall be the Participant's estate. In
the event the Participant is survived by a Beneficiary
who dies after payments to the Beneficiary have
commenced but before receiving all amounts due him or
her under the Plan or Contract, any remaining amounts
shall be paid to an alternate beneficiary designated by
the Participant or, in the absence of an alternative
surviving Beneficiary, to the estate of the last
surviving Beneficiary.
"Change of Control" shall be deemed to occur if
either (a) any person, or any two or more persons
acting as a group, and all affiliates of such person or
persons, shall own beneficially shares of stock of the
Company entitled to more than 20% of the total combined
voting power in the election of directors of the
Company (exclusive of shares held by any corporation of
which shares representing at least 50% of the ordinary
voting power are owned, directly or indirectly, by the
Company) pursuant to a tender offer, exchange offer or
series of purchases or other acquisitions, or any
combination of those transactions, or (b) there shall
be a change in the composition of the Board at any time
within two years after any tender offer, exchange
offer, merger, consolidation, share exchange, sale of
assets or contested election, or any combination of
those transactions (a "Transaction"), so that (i) the
persons who were directors of the Company immediately
before the first such Transaction cease to constitute a
majority of the board of directors of the corporation
which shall thereafter be in control of the companies
or other entities that were parties to or otherwise
involved in such first Transaction, or (ii) the number
of persons who shall thereafter be directors of such
corporation shall be fewer than two-thirds of the
number of directors of the Company immediately prior to
such first Transaction. A Change of Control shall be
deemed to take place upon the first to occur of the
events specified in the foregoing clauses (a) and (b).
"Insolvent" means (a) the inability of the Company
to pay its debts as they become due or (b) the Company
being subject to a pending proceeding as a debtor under
the United States Bankruptcy Code.
"Participant" means an individual who is entitled
to a benefit under the Plans or who is a party to one
of the Contracts.
Section 2. Establishment Of Trust.
(a) The Company hereby deposits with the Trustee
in trust the sum of $1,000.00, which shall become the
principal of the Trust to be held, administered and disposed
of by the Trustee as provided in this Trust Agreement.
(b) The Trust hereby established is revocable by
the Company until there shall occur a Change of Control, at
which time it shall become irrevocable.
(c) The Trust is intended to be a grantor trust,
of which the Company is the grantor, within the meaning of
subpart E, part I, subchapter J, chapter 1, subtitle A of
the Internal Revenue Code of 1986, as amended, and shall be
construed accordingly.
(d) The principal of the Trust and any earnings
thereon shall be held separate and apart from other funds of
Company and shall be used exclusively for the uses and
purposes of Participants and general creditors as herein set
forth. Participants and their Beneficiaries shall have no
preferred claim on, or any beneficial ownership interest in,
any assets of the Trust. Any rights created under the
Plans, Contracts and this Trust Agreement shall be unsecured
contractual rights of Participants and their Beneficiaries
against the Company. Any assets held by the Trust will be
subject to the claims of the Company's general creditors
under federal and state law in the event the Company becomes
Insolvent.
(e) The Company, in its sole discretion, may at
any time, or from time to time, make additional deposits of
cash or other property, which property shall be acceptable
to the Trustee, in trust with the Trustee to augment the
principal to be held, administered and disposed of by the
Trustee as provided in this Trust Agreement. Neither the
Trustee nor any Participant or Beneficiary under the Plans
or Contracts shall have any right hereunder to compel such
additional deposits.
(f) Anything in this Agreement notwithstanding,
upon a Change of Control, the Company shall, as soon as
possible, but in no event later than 90 days following the
Change of Control make an irrevocable contribution to the
Trust in an amount sufficient to pay each Participant or
Beneficiary the benefits to which they would be entitled
pursuant to the terms of the Contracts and Plans as in
effect on the date on which the Change of Control occurred.
Section 3. Payments to Participants and Their
Beneficiaries.
(a) No payment shall be made from this Trust
prior to a Change of Control. Following a Change of
Control, the Company shall deliver periodically to the
Trustee a schedule (the "Payment Schedule") that indicates
the amounts payable in respect of each Participant (and his
or her Beneficiaries) and provides a formula or other
instructions acceptable to the Trustee for determining the
amounts so payable, the form in which such amount is to be
paid (as provided for or available under the Contracts or
Plans) and the time of commencement of payment of such
amounts. Except as otherwise provided herein, the Trustee
shall make payments to the Participants and their
Beneficiaries in accordance with such Payment Schedule. The
Payment Schedule may periodically be amended by the Company
to reflect additional retirements of Participants, changes
in their marital status, terminations as a result of
disability and such other matters as may result in a change
in the form or amount of benefits payable to Participants.
The Trustee shall make provision for reporting and
withholding of any federal, state or local taxes that may be
required to be withheld with respect to the payment of
benefits pursuant to the terms of the Plans and/or Contracts
and shall pay amounts withheld to the appropriate taxing
authorities or determine that such amounts have been
reported, withheld and paid by the Company.
(b) The entitlement of a Participant or
Beneficiary to benefits under the Plans or Contracts shall
be determined by the Company or such party as it shall
designate under the Plans or Contracts, and any claim for
such benefits shall be considered and reviewed under the
procedures set out in the Plans or Contracts.
(c) The Company may make payment of benefits
directly to Participants or their Beneficiaries under the
Plans or Contracts as they become due under the terms of the
Plans or Contracts. Following a Change of Control, the
Company shall notify the Trustee of its decision to make
payment of benefits directly prior to the time amounts are
payable to Participants or their Beneficiaries, and a
revised Payment Schedule reflecting such direct payments
shall promptly be delivered by the Company to the Trustee.
In addition, if the principal of the Trust, and any earnings
thereon, are not sufficient to make payments of benefits in
accordance with the terms of the Plans and Contracts, the
Company shall make the balance of each such payment as it
falls due. The Trustee shall notify the Company when
principal and earnings are not sufficient. The
establishment and funding of the Trust shall not relieve the
Company from its obligations to provide the benefits under
the Plans except pro tanto to the extent that amounts are
paid to Participants and Beneficiaries from the Trust.
Section 4. Trustee Responsibility Regarding
Payments to Trust Beneficiary When Company Is Insolvent.
(a) The Trustee shall cease payment of benefits
to Participants and their Beneficiaries if the Company is
Insolvent.
(b) At all times during the continuance of this
Trust, as provided in paragraph (d) of Section 2 hereof, the
principal and income of the Trust shall be subject to claims
of general creditors of the Company under federal and state
law as set forth below:
(1) The Board of Directors and the Chief
Executive Officer of the Company shall have the duty to
inform the Trustee in writing of the Company's Insolvency.
If a person claiming to be a creditor of the Company alleges
in writing to the Trustee that the Company has become
Insolvent, the Trustee shall determine whether the Company
is Insolvent and, pending such determination, the Trustee
shall discontinue payment of benefits to Participants or
their Beneficiaries.
(2) Unless the Trustee has actual knowledge of
the Company's Insolvency, or has received notice from the
Company or a person claiming to be a creditor alleging that
the Company is Insolvent, the Trustee shall have no duty to
inquire whether the Company is Insolvent. The Trustee may
in all events rely on such evidence concerning the Company's
solvency as may be furnished to the Trustee and that
provides the Trustee with a reasonable basis for making a
determination concerning the Company's solvency.
(3) If at any time the Trustee has determined
that the Company is Insolvent, the Trustee shall discontinue
payments to Participants or their Beneficiaries and shall
hold the assets of the Trust for the benefit of the
Company's general creditors. Nothing in this Trust
Agreement shall in any way diminish any rights of
Participants or their Beneficiaries to pursue their rights
as general creditors of the Company with respect to benefits
due under the Plans, Contracts or otherwise.
(4) The Trustee shall resume the payment of
benefits to Participants or their Beneficiaries in
accordance with Section 3 of this Trust Agreement only after
the Trustee has determined that the Company is not Insolvent
(or is no longer Insolvent).
(c) Provided that there are sufficient assets, if
the Trustee discontinues the payment of benefits from the
Trust pursuant to paragraph (b) of Section 4 hereof and
subsequently resumes such payments, the first payment
following such discontinuance shall include the aggregate
amount of all payments due to Participants or their
Beneficiaries under the terms of the Plans and Contracts for
the period of such discontinuance, less the aggregate amount
of any payments made to such Participants or their
Beneficiaries by the Company in lieu of the payments
provided for hereunder during any such period of
discontinuance.
Section 5. Payments to Company.
Except as provided in Section 4 hereof, after the
Trust has become irrevocable, 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 assets
before all payment of benefits have been made to
Participants and their Beneficiaries pursuant to the terms
of the Plans and Contracts.
Section 6. Investment Authority.
(a) The Trustee shall invest the assets of the
Trust in the manner directed by the Company. The Company
agrees to indemnify the Trustee for, and to hold it harmless
against, any and all liabilities, losses, costs or expenses
(including reasonable legal fees and expenses) of whatsoever
kind and nature which may be imposed on, incurred by, or
asserted against the Trustee at any time by reason of
actions taken in accordance with such directions by the
Company or omitted because no such directions are given,
including, without limitation, any acquisition, retention or
disposition of any stock or other securities of the Company.
(b) To the extent directed by the Company, the
Trustee shall have the following investment powers:
(i) To purchase or subscribe for any property
whatsoever (including stock or rights to acquire stock)
and to retain in trust such securities or other
property. The Trustee may invest in securities
(including stock or rights to acquire stock) or
obligations issued by the Company.
(ii) To sell for cash or on credit, to grant
options, convert, redeem, exchange for other securities
or other property, or otherwise to dispose of any
securities or other property at any time held.
(iii) To exercise any conversion privilege and/or
subscription right available in connection with any
securities or other property at any time held; to
oppose or to consent to the reorganization,
consolidation, merger or readjustment of the finances
of any corporation, company or association or to the
sale, mortgage, pledge or lease of the property of any
corporation, company or association any of the
securities of which may at any time be held and to do
any act with reference thereto, including the exercise
of options, the making of agreements or subscriptions,
which may be deemed necessary or advisable in
connection therewith; and to hold and retain any
securities or other property so acquired.
(iv) To exercise, personally or by general or by
limited power of attorney, any right, including the
right to vote (other than with respect to the stock of
the Company), appurtenant to any securities or other
property held at any time.
(v) To hold part or all of the Trust uninvested.
(vi) To register any securities held hereunder in
the name of the Trustee or in the name of a nominee
with or without the addition of words indicating that
such securities are held in a fiduciary capacity, and
to hold any securities in bearer form.
All rights associated with assets of the Trust shall be
exercised by the Trustee or the person designated by the
Trustee except that voting rights with respect to stock of
the Company shall be exercised by the Company, and shall in
no event be exercisable by or rest with Participants or
their Beneficiaries. The Company shall have the right in
its sole discretion at any time, and from time to time, to
substitute assets of equal fair market value for any asset
held by the Trust. This right is exercisable by the Company
in a nonfiduciary capacity without the approval or consent
of any person in a fiduciary capacity.
Section 7. Disposition of Income.
During the term of this Trust, all income received
by the Trust, net of expenses and taxes, shall be
accumulated and reinvested.
Section 8. Accounting by Trustee.
The Trustee shall keep accurate and detailed
records of all investments, receipts, disbursements and
other transactions required to be made, including such
specific records as shall be agreed upon in writing between
the Company and the Trustee. Within 90 days following the
close of each calendar year and within 90 days after the
removal or resignation of the Trustee, the Trustee shall
deliver to the Company a written account of its
administration of the Trust during such year or during the
period from the close of the last preceding year to the date
of such removal or resignation, setting forth all
investments, receipts, disbursements and other transactions
effected by it, including a description of all securities
and investments purchased and sold with the cost or net
proceeds of such purchases or sales (accrued interest paid
or receivable being shown separately), and showing all cash,
securities and other property held in the Trust at the end
of such year or as of the date of such removal or
resignation, as the case may be. Unless protested by
written notice to the Trustee within 120 days of receipt
thereof by the Company, any such written account shall be
deemed accepted and approved by the Company, and the Trustee
shall be relieved and discharged, as if such account had
been settled and allowed by a judgment or decree of a court
of competent jurisdiction, in an action or proceeding in
which the Company and all persons having a beneficial
interest in the Trust were parties.
Nothing contained in this Agreement shall deprive
the Trustee or the Company of the right to have a judicial
settlement of its accounts. In any proceeding for a
judicial settlement of the Trustee's accounts, or for
instructions in connection with the Trust, the only
necessary party thereto in addition to the Trustee shall be
the Company. If the Trustee or the Company so elects, it
may bring in as a defendant party or parties any other
person or persons.
Section 9. Responsibility of Trustee.
(a) The Trustee shall act with the care, skill,
prudence and diligence under the circumstances then
prevailing that a prudent person acting in like capacity and
familiar with such matters would use in the conduct of an
enterprise of a like character and with like aims. In the
event of a dispute between the Company and a party, the
Trustee may apply to a court of competent jurisdiction to
resolve the dispute.
(b) Whenever in the administration of the Trust a
certification is required to be given to the Trustee, or the
Trustee shall deem it necessary that a matter be proved
prior to taking, suffering or omitting any action hereunder,
such certification shall be duly made and said matter may be
deemed to be conclusively proved by an instrument, signed in
the name of the Company, by its President, a Vice President
or by any other person specified in writing by the Company.
The Company shall file with the Trustee a certified list of
the names and specimen signatures of the persons authorized
to act for the Company. The Trustee may rely on any such
certification purporting to have been signed by or on behalf
of such person or persons that the Trustee believes in good
faith to have been signed thereby. The Trustee shall have
no responsibility for reasonably relying upon any
certification believed by the Trustee in good faith to have
been so signed by a duly authorized officer or agent of the
Company.
(c) The Trustee may make any payment required to
be made by it hereunder by mailing its check in the amount
hereof by first class mail in a sealed envelope addressed to
the person to whom such payment is to be made. The Trustee
shall not be required to make any investigation to determine
the identity or mailing address of any person entitled to
benefits under this Agreement and shall be entitled to
withhold making payments until the identity and mailing
addresses of persons entitled to benefits are certified to
it. In the event that any dispute shall arise as to the
identity or rights of persons entitled to benefits
hereunder, the Trustee may withhold payment of benefits
until such dispute shall have been determined by arbitration
or by a court of competent jurisdiction or shall have been
settled by written stipulation of the parties concerned.
(d) If the Trustee undertakes or defends any
litigation arising in connection with this Trust, the
Company agrees to indemnify the Trustee against the
Trustee's costs, expenses and liabilities (including,
without limitation, reasonable attorneys' fees and expenses)
relating thereto and to be primarily liable for such
payments. If the Company does not pay such costs, expenses
and liabilities in a reasonably timely manner, the Trustee
may obtain payment from the Trust.
(e) The Trustee may consult with legal counsel
(who may also be counsel for the Company generally) with
respect to any of its duties or obligations hereunder.
(f) The Trustee may hire agents, accountants,
actuaries, investment advisors, financial consultants or
other professionals to assist it in performing any of its
duties or obligations hereunder. Prior to a Change of
Control, to the extent approved by the Company, the Company
shall be responsible for payment of these expenses, and if
not paid by the Company, such authorized expenses shall be
paid by the Trust. Following a Change of Control, the
Company shall be responsible for payment of these expenses,
and if not paid by the Company, such expenses shall be paid
by the Trust.
(g) The Trustee shall have, without exclusion,
all powers conferred on trustees by applicable law, unless
expressly provided otherwise herein, provided, however, that
if an insurance policy is held as an asset of the Trust, the
Trustee shall have no power to name a Beneficiary of the
policy other than the Trust, to assign the policy (as
distinct from conversion of the policy to a different form)
other than to a successor Trustee or to loan to any person
the proceeds of any borrowing against such policy.
(h) A third party dealing with the Trustee shall
not be required to make any inquiry whether the Company or a
Participant has instructed the Trustee, or the Trustee is
otherwise authorized to take or omit any action; or to
follow the application by the Trustee of any money or
property which may be paid or delivered to the Trustee.
(i) The liability of the Trustee to make the
payments specified by the Plan shall be limited to the funds
which have come into its hands as Trustee hereunder,
including all income therefrom and increment thereof.
(j) The Company shall indemnify and hold harmless
the Trustee for any liability or expenses, including without
limitation, reasonable attorneys' fees reasonably incurred
by the Trustee with respect to any action undertaken with
the consent of the Company in good faith hereunder or
pursuant to the Plans other than on account of the Trustee's
negligence or willful misconduct.
(k) Notwithstanding any powers granted to the
Trustee pursuant to this Trust Agreement or applicable law,
the Trustee shall not have any power that could give this
Trust the objective of carrying on a business and deriving
the gains therefrom, within the meaning of section 301.7701-
2 of the Procedure and Administrative Regulations
promulgated pursuant to the Internal Revenue Code.
Section 10. Compensation and Expenses of
Trustees.
The Trustee shall receive for its services
compensation in accordance with Schedule A, which can be
amended upon the agreement of the Company and Trustee.
After a Change of Control of the Company, the Trustee may
increase its rate of compensation as reasonably necessary.
The Company shall pay all administrative and
Trustee's fees and expenses. If not so paid, the fees and
expenses shall be paid from the Trust.
Section 11. Resignation and Removal of Trustee.
(a) The Trustee may resign at any time by written
notice to the Company, which shall be effective 90 days
after receipt of such notice unless the Company and the
Trustee agree otherwise.
(b) Except as provided in paragraph (c) of this
Section 11, the Trustee may be removed by the Company on
90 days' notice or upon shorter notice accepted by the
Trustee.
(c) Upon a Change of Control, the Trustee may not
be removed by the Company for five years.
(d) If the Trustee resigns or is removed within
ten years of a Change of Control, as defined herein, the
Trustee shall select a successor Trustee in accordance with
the provisions of paragraph (b) of Section 12 hereof whose
appointment shall be effective at the effective time of the
Trustee's resignation or removal. The Trustee shall be
compensated for the reasonable costs of selecting a
successor as provided in Sections 10 and 12.
(e) Upon resignation or removal of the Trustee
and appointment of a successor Trustee, all assets shall
subsequently be transferred to the successor Trustee. The
transfer shall be completed within 90 days after receipt of
notice of resignation, removal or transfer, unless the
Company extends the time limit.
(f) If the Trustee resigns or is removed, a
successor shall be appointed, in accordance with Section 12
hereof, by the effective date of resignation or removal
under paragraph (a) or (b) of this Section 11. If no such
appointment has been made, the Trustee may apply to a court
of competent jurisdiction for appointment of a successor or
for instructions. All expenses of the Trustee in connection
with the proceeding shall be allowed as administrative
expenses of the Trust.
Section 12. Appointment of Successor.
(a) Subject to the provisions of paragraph (b) of this
Section 12, if the Trustee resigns or is removed in
accordance with paragraph (a) or (b) of Section 11 hereof,
the Company shall appoint any third party, such as a bank
trust department or other party that may be granted
corporate trustee powers under state law, as a successor to
replace the trustee upon resignation or removal. The
appointment shall be effective when accepted in writing by
the new trustee, who shall have all of the rights and powers
of the former Trustee, including ownership rights in the
Trust assets. The former Trustee shall execute any
instrument necessary or reasonably requested by the Company
or the successor trustee to evidence the transfer.
(b) If the Trustee resigns or is removed pursuant
to the provisions of paragraph (d) of Section 11 hereof, the
Trustee shall appoint any third party, such as a bank trust
department or other party that may be granted corporate
trustee powers under state law, as successor trustee. The
appointment of a successor trustee shall be effective when
accepted in writing by the new trustee. The new trustee
shall have all the rights and powers of the former Trustee,
including ownership rights in Trust assets. The former
Trustee shall execute any instrument necessary or reasonably
requested by the successor trustee to evidence the transfer.
(c) The successor trustee need not examine the
records and acts of any prior Trustee and may retain or
dispose of existing Trust assets, subject to Sections 8
and 9 hereof. The successor trustee shall not be
responsible for and the Company shall indemnify and defend
the successor trustee from any claim or liability resulting
from any action or inaction of any prior Trustee or from any
other past event, or any condition existing at the time it
becomes trustee.
Section 13. Amendment or Termination. (a) This
Trust Agreement may be amended by a written instrument
executed by the Trustee and the Company. Notwithstanding
the foregoing, no such amendment shall conflict with the
terms of the Plans or Contracts or shall make the Trust
revocable after it has become irrevocable in accordance with
paragraph (b) of Section 2 hereof.
(b) Unless sooner revoked in accordance with
paragraph (b) of Section 2 hereof, the Trust shall not
terminate until the date on which Participants and their
Beneficiaries are no longer entitled to benefits pursuant to
the terms of the Plans and Contracts. Upon termination of
the Trust, any assets remaining in the Trust shall be
returned to the Company.
(c) Upon written approval of Participants or
Beneficiaries entitled to payment of benefits pursuant to
the terms of the Plans and Contracts, the Company may
terminate this Trust prior to the time all benefit payments
under the Plans and Contracts have been made. All assets in
the Trust at termination shall be returned to the Company.
(d) Paragraph (f) of Section 2, Section 3,
paragraph (c) or (d) of Section 11 and paragraph (b) of
Section 12 of this Trust Agreement may not be amended by
Company for ten years following a Change of Control.
Section 14. Miscellaneous. (a) Any provision of
this Trust Agreement prohibited by law shall be ineffective
to the extent of any such prohibition, without invalidating
the remaining provisions hereof.
(b) 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.
(c) This Trust Agreement shall be governed by and
construed in accordance with the laws of the State of New
York.
Section 15. Effective Date.
The effective date of this Trust Agreement shall
be the 16th day of September, 1994.
THE PITTSTON COMPANY,
by s/Frank T. Lennon
_________________________
THE CHASE MANHATTAN BANK
(NATIONAL ASSOCIATION),
Trustee
by s/Edward L. Berman
_________________________
[Title]
<PAGE>
Exhibit A
Individuals Covered by Contractual Arrangements with
The Pittston Company
Robert D. Duke
Joseph Farrell
David Marshall
Jonathan Sturman