DEFERRED COMPENSATION PLAN FOR
CERTAIN DIRECTORS
This TRUST AGREEMENT (“Agreement or Trust
Agreement”), effective the 1st day of January, 2009, by and
between DYNEGY ADMINISTRATIVE SERVICES COMPANY
(“Company”), and VANGUARD FIDUCIARY TRUST COMPANY, a
trust company incorporated under Chapter 10 of the
Pennsylvania Banking Code (“Trustee”):
WHEREAS, DYNEGY INC. (“Dynegy”), an
affiliate of the Company, (Dynegy and Company, hereafter referred
to collectively as, “Employer”) has adopted the DYNEGY
INC. DEFERRED COMPENSATION PLAN FOR CERTAIN DIRECTORS (AS AMENDED
AND RESTATED EFFECTIVE JANUARY 1, 2008) (the
“Plan”);
WHEREAS, Employer has incurred or expects to
incur liability under the terms of such Plan with respect to the
individuals participating in such Plan;
WHEREAS, Company (in its capacity as a Plan
administrator pursuant to the delegation of certain administrative
authorities to Company by Dynegy under the Plan) wishes to
establish a trust (hereinafter called “Trust”) and to
contribute to the Trust assets that shall be held therein, subject
to the claims of Company’s creditors in the event of
Company’s Insolvency, as herein defined, until paid to Plan
participants and their beneficiaries in such manner and at such
times as specified in the Plan;
WHEREAS, it is the intention of the parties that
this Trust shall constitute an unfunded arrangement and shall not
affect the status of the Plan as an unfunded plan, nor if the Plan
is so structured, one 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, as amended;
WHEREAS, it is the intention of Company to make
contributions to the Trust to provide a source of funds to assist
in the meeting of the liabilities under the Plan; and
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.
Establishment of Trust .
(a) The Company shall from time to time
deposit amounts with Trustee in trust and such amounts received by
the Trustee shall become the principal of the Trust to be held,
administered and disposed of by Trustee as provided in this Trust
Agreement.
(b) The
Trust hereby established shall be irrevocable.
(c) The Trust is intended to be a grantor
trust, of which 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, (the “Code”)
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 Dynegy and shall be used exclusively for the uses
and purposes of Plan participants and general creditors as herein
set forth. Plan participants and their beneficiaries shall have no
preferred claim on, or any beneficial ownership interest in, any
assets of the Trust. Any rights created under the Plan and this
Trust Agreement shall be mere unsecured contractual rights of Plan
participants and their beneficiaries against Company. Any assets
held by the Trust will be subject to the claims of Company’s
general creditors under federal and state law in the event of
Insolvency, as defined in Section 3(a) herein.
(e) Company, in its sole discretion, may at
any time, or from time to time, make additional deposits of cash or
other property in trust with Trustee to augment the principal to be
held, administered and disposed of by Trustee as provided in this
Trust Agreement. Neither Trustee nor any Plan participant or
beneficiary shall have any right to compel such additional
deposits.
Pg. 2
(f) Notwithstanding anything to the
contrary herein, in no event shall money and/or property be
transferred to the Trust if prior to such transfer it is known that
such transfer would result in adverse tax consequences to a
participant or his beneficiaries pursuant to section 409A(b) of the
Code.
SECTION 2.
Payments to Plan Participants and Their Beneficiaries
.
(a) Company shall deliver to Trustee a
schedule (the “Payment Schedule”) that indicates the
amounts payable in respect of each Plan participant (and his or her
beneficiaries), that provides a formula or other instructions
acceptable to Trustee for determining the amounts so payable, the
form in which such amount is to be paid (as provided for or
available under the Plan), and the time of commencement for payment
of such amounts. The Company shall provide such Payment Schedule
and any updates thereto to the Trustee at such times as will permit
the Trustee to make timely payments to Plan participants and their
beneficiaries pursuant to the terms of the Plan. Except as
otherwise provided herein, Trustee shall make payments to the Plan
participants and their beneficiaries in accordance with such
Payment Schedule. The Trustee shall make provision for the
reporting and withholding of any federal or state taxes that may be
required to be withheld with respect to the payment of benefits
pursuant to the terms of the Plan and shall pay amounts withheld to
the appropriate taxing authorities or determine that such amounts
have been reported, withheld and paid by Company.
(b) The entitlement of a Plan participant
or his or her beneficiaries to benefits under the Plan shall be
determined by Dynegy or such party as it shall designate under the
Plan, and any claim for such benefits shall be considered and
reviewed under the procedures set out in the Plan.
(c) Company may make payment of benefits
directly to Plan participants or their beneficiaries as they become
due under the terms of the Plan. Company shall notify Trustee of
its decision to make payment of benefits directly prior to the time
amounts are payable to participants or their beneficiaries. In
addition, if the principal of the Trust, and any earnings thereon,
are not sufficient to make payments of benefits in accordance with
the terms of the Plan, Company shall make the balance of each such
payment as it falls due. In so much as Trustee has sufficient
knowledge, Trustee shall notify Company where principal and
earnings are not sufficient in a reasonably timely fashion prior to
a payment becoming due.
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SECTION 3.
Trustee Responsibility Regarding Payments to Trust Beneficiary
When Company is Insolvent .
(a) Trustee shall cease payment of benefits
to Plan participants and their beneficiaries if the Company is
Insolvent. Company shall be considered “Insolvent” for
purposes of this Trust Agreement if (i) Company is unable to
pay its debts as they become due, or (ii) Company is subject
to a pending proceeding as a debtor under the United States
Bankruptcy Code.
(b) At all times during the continuance of
this Trust, as provided in Section 1(d) hereof, the principal and
income of the Trust shall be subject to claims of general creditors
of Company under federal and state law as set forth
below.
(1) The Board of Directors and the
President of Company shall have the duty to inform Trustee in
writing of Company’s Insolvency. If a person claiming to be a
creditor of Company alleges in writing to Trustee that Company has
become Insolvent, Trustee shall determine whether Company is
Insolvent and, pending such determination, Trustee shall
discontinue payment of benefits to Plan participants or their
beneficiaries.
(2) Unless Trustee has actual knowledge of
Company’s Insolvency, or has received notice from Company or
a person claiming to be a creditor alleging that Company is
Insolvent, Trustee shall have no duty to inquire whether Company is
Insolvent. Trustee may in all events rely on such evidence
concerning Company’s solvency as may be furnished to Trustee
and that provides Trustee with a reasonable basis for making a
determination concerning Company’s solvency.
(3) If at any time Trustee has determined
that Company is Insolvent, the Trustee shall discontinue payments
to Plan participants or their beneficiaries and shall hold the
assets of the Trust for the benefit of Company’s general
creditors. Nothing in this Trust Agreement shall in any way
diminish any rights of Plan participants or their beneficiaries to
pursue their rights as general creditors of Company with respect to
benefits due under the Plan or otherwise.
(4) Trustee shall resume the payment of
benefits to Plan participants or beneficiaries in accordance with
Section 2 of this Trust Agreement only after Trustee has
determined that Company is not Insolvent (or is no longer
Insolvent).
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(c) Provided that there are sufficient
assets, if Trustee discontinues the payment of benefits from the
Trust pursuant to subsection 3(b) hereof and subsequently resumes
such payments, the first payment following such discontinuance
shall include the aggregate amount of all payments due to Plan
participants or their beneficiaries under the terms of the Plan for
the period of such discontinuance, less the aggregate amount of any
payments made to Plan participants or their beneficiaries by
Company in lieu of the payments provided for hereunder during any
such period of discontinuance.
SECTION 4.
Payments to Company .
Except as provided in Section 3 and 12
hereof, Company shall have no right or power to direct Trustee to
return to Company or to divert to others any of the Trust assets
before all payments of benefits have been made to Plan participants
and their beneficiaries pursuant to the terms of the
Plan.
SECTION 5.
Investment Authority .
(a) Trustee may invest in securities
(including stock or rights to acquire stock) or obligations issued
by Employer. 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 Plan participants,
except that voting rights with respect to Trust assets will be
exercised by Company. Company shall have the right at anytime, and
from time to time in its sole discretion, to substitute assets of
equal fair market value for any as
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