DIRECTORS' DEFERRED COMPENSATION AND BENEFITS TRUST AGREEMENT

Exhibit 10.12

 

DIRECTORS’

DEFERRED COMPENSATION AND BENEFITS

TRUST AGREEMENT

by and among

SUNOCO, INC.,

MELLON TRUST OF NEW ENGLAND, N.A.

and

TOWERS, PERRIN, FORSTER & CROSBY, INC.

Amended and Restated Effective as of November 1, 2007

 

TABLE OF CONTENTS

 

 

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Schedules:

 

 

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DIRECTORS’ DEFERRED COMPENSATION AND BENEFITS

TRUST AGREEMENT

This Directors’ Deferred Compensation and Benefits Trust Agreement, Amended and Restated effective as of November 1, 2007, (the “Trust Agreement”), is by and among SUNOCO, INC., a Pennsylvania corporation (the “Company”), MELLON TRUST OF NEW ENGLAND, N.A., a national association (the “Trustee”), and TOWERS PERRIN, FORSTER & CROSBY, INC., a Pennsylvania corporation (the “Recordkeeper”).

W I T N E S S E T H

WHEREAS, the Company is or may become obligated under the terms of certain benefit plans, agreements, or other arrangements, to make payments to certain persons who at any time prior to the occurrence of a Change in Control of the Company were members of the Company’s Board of Directors (the “Plan Participants”), and their beneficiaries; and

WHEREAS, in order to: (1) provide an alternative source of funds to assist the Company in meeting its liabilities under the applicable director benefit plans, agreements, or other arrangements; and (2) assure that future payment of such amounts would not be improperly withheld in the event of a Change in Control of the Company, the Company has established a Trust (the “Trust”) and contributes certain assets held therein, subject to the claims of the Company’s creditors in the event of the Company’s Insolvency until paid to Plan Participants and their beneficiaries in the manner and at the times specified in the applicable director benefit plans, agreements, or other arrangements; and

WHEREAS, Bankers Trust Company has resigned as trustee; and

WHEREAS, Mellon Trust of New England, N.A. has been appointed as Trustee in its stead, and is willing to act as Trustee of the Trust, upon all of the terms and conditions hereinafter set forth.

NOW THEREFORE, in consideration of the mutual terms, covenants, and conditions herein contained, the mutual benefits to be derived hereunder, and other good and valuable consideration, the receipt and adequacy of which are hereby acknowledged, and intending to be legally bound, the parties hereto agree as follows:

 

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ARTICLE I

Definitions

As used in this Trust Agreement, the following terms shall have the meanings herein specified:

1.1  Account - shall have the meaning provided herein at Section 5.7(c).

1.2  Benefits Fund - shall mean that portion of the Trust Corpus that is not in the Legal Defense Fund.

1.3  Benefits Fund Amount - shall have the meaning provided herein at Section 1.22(a).

1.4  Board of Directors - shall mean the Board of Directors of Sunoco, Inc., or any successor thereto.

1.5  Change in Control - shall mean the occurrence of any of the following events:

(a) The acquisition by any individual, entity or group (within the meaning of Section 13(d)(3) or 14(d)(2) of the Exchange Act) (a “Person”) of beneficial ownership (within the meaning of Rule 13d 3 promulgated under the Exchange Act) of 20% or more of either (1) the then-outstanding shares of common stock of the Company (the “Outstanding Company Common Stock”) or (2) the combined voting power of the then-outstanding voting securities of the Company entitled to vote generally in the election of directors (the “Outstanding Company Voting Securities”); provided , however , that, for purposes of this Section (a), the following acquisitions shall not constitute a Change in Control: (A) any acquisition directly from the Company, (B) any acquisition by the Company, (C) any acquisition by any employee benefit plan (or related trust) sponsored or maintained by the Company or any company controlled by, controlling or under common control with the Company, or (D) any acquisition by any entity pursuant to a transaction that complies with Sections (c)(1), (c)(2) and (c)(3) of this definition;

(b) Individuals who, as of September 6, 2001, constitute the Board of Directors (the “Incumbent Board”) cease for any reason to constitute at least a majority of the Board of Directors; provided , however , that any individual becoming a director subsequent to the date hereof whose election, or nomination for election by the Company’s shareholders, was approved by a vote of at least a majority of the directors then comprising the Incumbent Board shall be considered as though such individual were a member of the Incumbent Board, but excluding, for this purpose, any such

 

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individual whose initial assumption of office occurs as a result of an actual or threatened election contest with respect to the election or removal of directors or other actual or threatened solicitation of proxies or consents by or on behalf of a Person other than the Board of Directors;

(c) Consummation of a reorganization, merger, statutory share exchange or consolidation or similar corporate transaction involving the Company or any of its subsidiaries, a sale or other disposition of all or substantially all of the assets of the Company, or the acquisition of assets or stock of another entity by the Company or any of its subsidiaries (each, a “Business Combination”), in each case unless, following such Business Combination, (1) all or substantially all of the individuals and entities that were the beneficial owners of the Outstanding Company Common Stock and the Outstanding Company Voting Securities immediately prior to such Business Combination beneficially own, directly or indirectly, more than 60% of the then-outstanding shares of common stock and the combined voting power of the then-outstanding voting securities entitled to vote generally in the election of directors, as the case may be, of the corporation resulting from such Business Combination (including, without limitation, a corporation that, as a result of such transaction, owns the Company or all or substantially all of the Company’s assets either directly or through one or more subsidiaries) in substantially the same proportions as their ownership immediately prior to such Business Combination of the Outstanding Company Common Stock and the Outstanding Company Voting Securities, as the case may be, (2) no Person (excluding any corporation resulting from such Business Combination or any employee benefit plan (or related trust) of the Company or such corporation resulting from such Business Combination) beneficially owns, directly or indirectly, 20% or more of, respectively, the then-outstanding shares of common stock of the corporation resulting from such Business Combination or the combined voting power of the then-outstanding voting securities of such corporation, except to the extent that such ownership existed prior to the Business Combination, and (3) at least a majority of the members of the board of directors of the corporation resulting from such Business Combination were members of the Incumbent Board at the time of the execution of the initial agreement or of the action of the Board of Directors providing for such Business Combination; or

(d) Approval by the shareholders of the Company of a complete liquidation or dissolution of the Company.

 

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1.6  Chief Executive Officer - shall mean the Chief Executive Officer of Sunoco, Inc. as of the date of reference.

1.7  CIC Date - shall have the meaning provided herein at Section 5.2.

1.8  Committee - shall mean the Governance Committee (or any successor thereof) of the Board of Directors of Sunoco, Inc.; provided, that upon the occurrence of any Change in Control, the membership of the Committee shall become fixed as the members in office at the time of the Change in Control, and shall remain unchanged for the duration of this Trust Agreement; and provided, further, that in the event one or more members of the Committee resigns or otherwise terminates his or her membership in the Committee after a Change in Control, the remaining members of the Committee shall appoint a replacement by simple majority vote.

1.9  Company - shall have the meaning set forth in the introduction to this Trust Agreement.

1.10  ERISA - shall have the meaning set forth in the introduction to this Trust Agreement.

1.11  Exchange Act - shall mean the Securities Exchange Act of 1934, as amended.

1.12  Group - shall mean persons who act in concert as described in Sections 13(d)(3) and/or 14(d)(2) of the Exchange Act.

1.13  Incumbent Board - shall have the meaning provided herein at Section 1.5(b).

1.14  Insolvent or Insolvency - shall mean, with respect to the Company, that either:

(a) the Company is unable to pay its debts as they become due; or

(b) the Company is subject to a pending proceeding as a debtor under the United States Bankruptcy Code.

1.15  Legal Defense Fund - shall have the meaning provided herein at Section 6.1.

1.16  Legal Defense Fund Amount - shall mean an amount equal to the greater of ten percent (10%) of the Benefits Fund Amount and $5,000,000.

1.17  Payment Schedule - shall have the meaning provided herein at Section 7.3.

1.18  Plan - shall have the meaning provided herein at Section 2.1.

 

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1.19  Plan Participant - shall have the meaning set forth in the introduction to this Trust Agreement.

1.20  Potential Change in Control - shall mean the occurrence of any of the following events or transactions:

(a) any person (other than Sunoco, Inc., or any affiliate or subsidiary thereof) makes a tender offer for capital stock of Sunoco, Inc.;

(b) any person:

(1) becomes the beneficial owner, directly or indirectly, of capital stock of Sunoco, Inc. in an amount which requires the filing of Schedule 13D or its equivalent form pursuant to the Rules and Regulations under the Exchange Act; and

(2) indicates in such Schedule 13D or equivalent filing that the purpose of such capital stock acquisition is part of a plan or proposal that reasonably could lead to a Change in Control of Sunoco, Inc.;

(c) the submission of a nominee or nominees for the position of director of Sunoco, Inc. by a shareholder or Group of shareholders in a proxy solicitation or otherwise which, in its judgment, the Board of Directors by subsequent adoption of a resolution, determines might result in a Change in Control of Sunoco, Inc.;

(d) any person files a pre-merger notification for the acquisition of capital stock of Sunoco, Inc. pursuant to the Hart-Scott-Rodino Act; or

(e) the Board of Directors in its judgment determines by adoption of a resolution that a Potential Change in Control of Sunoco, Inc. for purposes of this Trust Agreement has occurred.

1.21  Recordkeeper - shall have the meaning set forth in the introduction to this Trust Agreement.

1.22  Required Funding Amount - shall mean the aggregate of the amounts described in the following subparagraphs (a) and (b) of this Section 1.22:

(a) an amount sufficient to provide all benefits accrued for each Plan Participant (and any beneficiaries) under the Plans (including any interest or earnings due on such accrual) through the date of the contribution, to the extent not previously contributed; and

(b) the Legal Defense Fund Amount.

 

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1.23  Trust - shall have the meaning set forth in the introduction to this Trust Agreement.

1.24  Trust Agreement - shall have the meaning set forth in the introduction to this Trust Agreement.

1.25  Trust Corpus - shall mean the amounts delivered to the Trustee pursuant to the terms hereof, less amounts distributed from the Trust pursuant to the terms hereof, plus all income earned by the Trust, in whatever form held or invested as provided herein.

1.26  Trustee - shall have the meaning set forth in the introduction to this Trust Agreement.

ARTICLE II

The Plans

2.1  Plans & Agreements Subject to Trust . The plans, agreements, and other arrangements that are subject to this Trust (each a “Plan” and, collectively the “Plans”) are listed on Schedule 2.1 hereto. Prior to a Change in Control, the Committee may from time to time designate such additional plans, agreements, and other arrangements to be subject to this Trust, or delete any Plan from this Trust. The Company shall immediately notify the Trustee and the Recordkeeper in writing of any such changes. No Plans may be added or deleted from this Trust at any time after a Change in Control.

2.2  Liability for Payments . The Company shall continue to be liable to the Plan Participants to make all payments required under the terms of the Plans to the extent such payments have not been made pursuant to this Trust Agreement. Distributions made from the Trust to or for Plan Participants in respect of the Plans pursuant to Article VII hereof, shall, to the extent of such distributions, satisfy the Company’s (or certain of its subsidiaries’) obligation to pay benefits to such Plan Participants under the Plans.

ARTICLE III

Establishment of Trust

3.1  Principal of Trust . The Trustee shall hold such sums of money and other property as from time to time deposited by the Company and accepted by the Trustee in trust to be held, administered and disposed of by the Trustee as provided in this Trust Agreement.

 

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3.2  Term and Revocability . The Trust hereby established is revocable by the Company but shall become irrevocable upon the occurrence of a Change in Control. At any time prior to a Change in Control, this Trust may be terminated by the Committee. Upon or after a Change in Control, this Trust shall not terminate until the date on which Plan Participants and their beneficiaries are no longer entitled to benefits pursuant to the terms of the Plans. Upon termination of the Trust any assets remaining in the Trust shall be returned to the Company.

3.3  Grantor Trust . 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. The Company represents and warrants to the Trustee that the Plans for which benefits are or may become payable under this Trust are not subject to Part 4 of Title I of ERISA. The Company shall indemnify and hold harmless the Trustee, its parent, subsidiaries and affiliates and each of their respective officers, directors, employees and agents from and against all liability, loss and expense, including reasonable attorneys’ fees and expenses suffered or incurred by any of the foregoing indemnitees as a result of a breach of the foregoing representation and warranty. The provisions of this subsection shall survive termination of this Agreement.

3.4  Segregation of Funds; Rights of Creditors . The principal of the Trust, and any earnings thereon shall be separate and apart from other funds of the Company 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 Plans and this Trust shall be mere unsecured contractual rights of Plan 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 of Insolvency.

ARTICLE IV

Administration of Trust

4.1  Authority and Duties of the Committee . It shall be the duty of the Committee, on the basis of information supplied to it by the Company, to determine:

(a) the eligibility of each Plan Participant to receive payment of benefits under this Trust with respect to each Plan; and

 

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(b) the manner and time of payment of the benefits payable hereunder.

The Recordkeeper shall determine, on behalf of the Committee, the amount of any benefit payable under this Trust to which each Plan Participant may be entitled.

The Trustee, on behalf of the Company, shall make such payments as the Committee instructs the Trustee to pay, to Plan Participants from the Benefits Fund, as provided in Article VII. The Committee shall have the full power and authority to manage claims and appeals as set forth in the respective Plan, and to construe, interpret and administer such Plan in accordance with its terms and provisions.

4.2  Action by the Committee . A majority of the members of the Committee shall constitute a quorum for the transaction of business at a meeting of the Committee. Any action of the Committee may be taken upon the affirmative vote of a majority of the members of the Committee at a meeting, or without a meeting by mail, telegraph, telephone or electronic communication device; provided, however, that all of the members of the Committee are informed of their right to vote on the matter before the Committee and of the outcome of the vote thereon.

4.3  Records, Reporting and Disclosure . The Committee shall keep all individual and group records relating to Plan Participants and former Plan Participants and all other records necessary for the proper administration and operation of the Trust. Such records shall be made available to the Company and to each Plan Participant for examination during business hours except that a Plan Participant shall examine only such records as pertain exclusively to the examining Plan Participant and to the Plan, in general. The Committee shall prepare and shall file as required by law or regulation all reports, forms, documents and other items required by the Internal Revenue Code, and every other applicable statute, each as amended, and all regulations thereunder (except that the Company, as payer of the benefits, shall prepare and distribute to the proper recipients all forms relating to withholding of income or wage taxes, Social Security taxes, and other amounts which may be similarly reportable).

All income, deductions and credits attributable to the Trust belong to the Company and will be included on the Company’s income tax returns. The Company shall pay any federal, state, local, or other taxes imposed or levied with respect to the assets and/or income of the Trust or any part thereof under existing or future laws. Upon furnishing the Trustee with evidence reasonably required by the Trustee of any such tax payments made directly by the Company, the Company shall be entitled to receive reimbursement from the assets of the Trust for the full amount of such taxes paid by it.

 

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4.4  Bonding . The Committee shall arrange any bonding that may be required by law, but no amount in excess of the amount required by law (if any) shall be required by the Trust.

ARTICLE V

Potential Change in Control; Change in Control

5.1  Potential Change in Control . If a Potential Change in Control occurs, the Company shall immediately notify the Trustee and Recordkeeper and shall cause the Required Funding Amount to be remitted to the Trustee as a contribution to the Trust. The Required Funding Amount shall be paid to the Trust not later than thirty (30) days after the Potential Change in Control.

5.2  Change in Control . Whenever a Change in Control is expected to occur, if the date it will occur (the “CIC Date”) is reasonably ascertainable, then (i) the Company shall notify the Trustee and the Recordkeeper of the CIC Date, (ii) the Required Funding Amount shall be determined as of the CIC Date, and (iii) to the extent that the amount then held in the Benefits Fund and Legal Defense Fund is less than the Benefits Fund Amount or Legal Defense Fund Amount, respectively, the Company shall cause the amount of the shortfall to be remitted to the Trustee as an irrevocable contribution to the Trust not later than one (1) business day before the CIC Date. If a Change in Control occurs, the Company shall immediately notify the Trustee and Recordkeeper. In addition, the Required Funding Amount shall be determined as of the actual date of the Change in Control and, to the extent that the amount then held in the Trust Corpus (other than the Legal Defense Fund) is less than the Required Funding Amount, the Company shall immediately cause the amount of the shortfall to be remitted to the Trustee, as an irrevocable contribution to the Trust, not later than one (1) business day after the Change in Control. The Trustee may rely conclusively on a notice from the Company that a Change of Control has occurred, and the Trustee shall be fully protected in failing to act in the absence of such notice from the Company.

5.3  Method of Funding . The contribution of the Required Funding Amount shall be made in (1) cash or in property acceptable to the Trustee having a fair market value equal to the Required Funding Amount, or in a combination of the two and/or (2) a standby, irrevocable (except as provided in Section 9.1) letter of credit, drawn on a bank acceptable to the Trustee, provided that the fair market value of the contribution in the aggregate shall equal the Required Funding Amount.

 

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5.4  Additional Contributions; Sufficiency of Funds . The Company shall be obligated to continue to cause additional contributions (or increases to the amount that may be drawn against the letter of credit) to be made as may be necessary from time to time to insure that at all times following a Change in Control the Trust contains sufficient funds, on a current basis, to pay all benefits due to the Plan Participants (or their designated beneficiaries) under the Plans, together with all reasonably anticipated claims against the Legal Defense Fund. The Trustee shall be under no duty to determine the sufficiency, or to enforce the making, of such contributions by the Company.

5.5  Additional Plans . In the event the Committee designates additional Plans that are subject to this Trust Agreement, or the Plans subject to this Trust Agreement are amended, after a Potential Change in Control or Change in Control, the Treasurer of the Company shall, unless the Trust Corpus shall theretofore have been released pursuant to Section 9.1 hereof, recalculate the Benefits Fund Amount. If the amount so calculated exceeds the fair market value of the assets then held in trust in the Benefits Fund, the Company shall promptly (and in no event later than thirty (30) days from the date of such recalculation):

(a) pay to the Trustee an amount of cash (or property acceptable to the Trustee having a fair market value equal to such amount, or some combination thereof) equal to such excess; or

(b) increase the amount that may be drawn against the letter of credit described in Section 5.3, above, to cover such excess.

If the Benefits Fund Amount so calculated is less than the fair market value of the assets held in trust, the Trustee shall retain such difference.

5.6  Calculation of Required Funding Amount . As soon as practicable, but in no event later than fifteen (15) days following the occurrence of any Potential Change in Control, the Treasurer of the Company shall compute the Required Funding Amount. Immediately thereafter, the Recordkeeper shall review the Treasurer’s calculations of the Required Funding Amount (including without limitation the calculations under Section 5.5 hereof). The Recordkeeper shall complete its review prior to the thirtieth (30th) day following any Potential Change in Control. If the Recordkeeper concludes that the amounts calculated by the Treasurer are not sufficient to permit the Trustee to make all

 

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payments due or to become due under the Plans, together with the fees and expenses described in Sections 6.2 and 6.3 below, the Treasurer shall increase the Required Funding Amount to the amount so calculated by the Recordkeeper. The Company agrees not to challenge the calculations of the Treasurer, and both the Company and the Treasurer agree not to challenge the calculations of the Recordkeeper, and the Trustee shall have no right or obligation to challenge or question such calculation with regard to the Required Funding Amount (including, without limitation, the amount determined under Section 5.5 hereof) upon and after a Potential Change in Control or Change in Control. No Plan Participant shall have the right to challenge the calculations of either the Treasurer or the Recordkeeper with respect to the Required Funding Amount.

5.7  Payment of Required Funding Amount .

(a)  Interest on Delinquent Payments . The Company agrees to pay interest on any delinquent payment of the Required Funding Amount from the date on which such payment is required to be made pursuant to this Article V, based upon the daily average of the prime rate charged by Trustee, during the period of such deficiency.

(b)  Discount Rate for Distributions Due Later . In determining the Required Funding Amount with respect to any payment or series of payments expected to be due more than one (1) year after the date as of which the Required Funding Amount is to be determined, the present value of such payment or series of payments shall be calculated by using a discount rate equal to one percentage point less than the then lowest annual yield to maturity on United States Treasury obligations having then remaining maturities approximately equal to the maturity of the payment or payments being valued.

(c)  Schedule of Accounts . Each payment by the Company pursuant to this Article V shall be accompanied by a schedule delivered to the Recordkeeper (as described in Section 7.3 hereof) of the individual Plans for whose accounts such payment is being made, which schedule sets forth the amounts delivered in respect of each of the Plans. The Recordkeeper shall maintain in an equitable manner an account for each Plan (the “Account”). Each Account shall consist of contributions to and payments from the Benefits Fund which are allocable to the Plan, and earnings thereon, less disbursements therefrom attributable to the interest of the Plan in the entire Benefits Fund. On a monthly basis, the Trustee shall advise the Recordkeeper in writing regarding the actual amounts received by the Trust from the Company, and paid out from the Trust, in respect of each of the Plans.

 

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5.8  Sunset Provision . Subject to Section 10.3, anything to the contrary in this Trust Agreement or the Plans notwithstanding, in the event of a Potential Change in Control, the procedures, rules and responsibilities that apply under this Article V and under Sections 7.3, 8.5 and 11.2 hereof solely as a result of the occurrence of such Potential Change in Control shall cease to apply six (6) months after delivery of the Required Funding Amount to the Trustee if no Change in Control shall have occurred during such six-month period, and the Board of Directors determines, and so certifies to the Trustee, that a Change in Control is not imminent, pending, or reasonably expected to occur (or upon such certification by the Board of Directors acting unanimously before the expiration of such six-month period), or upon the earlier termination of this Trust in a manner consistent with Section 3.2 hereof. Such new six-month period shall commence in the event of and upon the date of any subsequent Potential Change in Control.

ARTICLE VI

Legal Defense Fund

6.1  Legal Defense Fund . The Trustee shall establish within the Trust a separate fund, hereinafter referred to as the Legal Defense Fund. The Legal Defense Fund shall consist of the portion of the Company’s contributions to the Trust that represent the Legal Defense Fund Amount, or are otherwise designated for the Legal Defense Fund in writing at the time of contribution, together with all income, gains and losses and proceeds from the investment, reinvestment and sale thereof, less all payments therefrom and expenses charged thereto in accordance with the provisions of this Article. The Legal Defense Fund shall be held and administered by the Trustee for the purpose of defraying the costs and expenses incurred by Participants and beneficiaries associated with the enforcement of their rights under the Plans by litigation or other legal action and the Trustee in performing its duties under this Article. The Legal Defense Fund shall be maintained and administered as a separate segregated account, provided, however, that the assets of the Legal Defense Fund may be commingled with all other assets of the Trust solely for investment purposes.

6.2  Trustee’s Duties . If, at any time after a Change in Control or during a Potential Change in Control, legal proceedings are brought against the Trustee by the Company or any other party seeking to invalidate any of the provisions of this Trust Agreement as they relate to the Trust, or seeking to enjoin the Trustee from paying any amounts from any Trust or from taking any other action otherwise required or permitted

 

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to be taken by the Trustee under this Trust Agreement with respect to any Plan, the Trustee shall take all steps that may be necessary in such proceeding to uphold the validity and enforceability of the provisions of this Trust Agreement as they relate to such Plan. The Trustee shall be empowered to retain counsel and other appropriate experts, including actuaries, and accountants, to assist it in making any determination under this Section. All costs and expenses incurred by the Trustee in connection with any such proceeding (including, without limitation, the payment of reasonable fees, costs and disbursements of any counsel, actuaries, accountants or other experts retained by the Trustee in connection with such proceeding) shall be charged to and paid from the Legal Defense Fund. To the extent the Trustee’s legal fees and expenses exceed the amount available in the Legal Defense Fund and the Company does not pay them upon demand by the Trustee, such fees and expenses shall be paid by the Trustee from the assets of the Trust Corpus.

6.3  Claims . If, at any time after a Change in Control, a Plan Participant or beneficiary notifies the Trustee in writing that the Company has refused to pay a claim asserted by such Plan Participant or beneficiary under any Plan, the Plan Participant or beneficiary (“Claimant”) may demand payment from the Legal Defense Fund with respect to expenses incurred in connection with the initiation or defense of any litigation or other legal action by or against the Company or any director, officer, stockholder or other person affiliated with the Company, with respect to such claim. Such demand shall be made in writing by delivering to the Trustee within 90 days of the date the Claimant incurs such expenses (i) a certification signed by the Claimant that the Company is in default in paying its obligations under the Plan, and (ii) itemizing in reasonable detail in a form acceptable to the Trustee the expenses payable by the Legal Defense Fund.

6.4  Insufficient Funds . In the event that on the date a Claimant’s expenses are to be paid from the Legal Defense Fund other expenses have been claimed but not yet paid and the aggregate amount of all claims exceeds the amount available in the Legal Defense Fund, the Company shall be obligated to make an additional contribution to the Legal Defense Fund. In the event the Company fails to make such additional contribution, the Trustee shall promptly advise the Claimant and shall pay only that portion of the amount of the claim to each Claimant determined by multiplying such Claimant’s expenses by a fraction the numerator of which is the amount held in the Legal Defense Fund, and the denominator of which is the amount of the aggregate expenses claimed by all Claimants. Notwithstanding any provision herein to the contrary, the Trustee shall be required to act under this Section only to the extent there are sufficient amounts available in the Legal Defense Fund to defray the costs and expenses the Trustee reasonably anticipates will be incurred in connection with such action.

 

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ARTICLE VII

The Benefits Fund

7.1  Benefits Fund . The Trustee shall establish within the Trust a separate fund, hereinafter referred to as the “Benefits Fund”. The Benefits Fund shall consist of the portion of the Company’s contributions to the Trust that represent the Benefit Amount, or are otherwise designated for the Benefits Fund in writing at the time of contribution, together with all income, gains and losses and proceeds from the investment, reinvestment and sale thereof, less all payments therefrom and expenses charged thereto in accordance with the provisions of this Article VII. The Benefits Fund shall be held and administered by the Trustee for the purpose of paying Plan Participants benefits under the Plans in accordance with the provisions of this Article VII.

7.2  Company Information . As soon as practicable, but in no event later than thirty (30) days following the establishment of this Trust, the Recordkeeper shall identify to the Company in writing the information deemed necessary to enable the Recordkeeper to determine the amount of benefits payable to or with respect to each Plan Participant in each Plan, including any benefits payable after the Plan Participant’s death, and the recipient. The Company shall furnish the information needed by the Recordkeeper in order to determine the amount of any such benefit, and shall deliver to the Recordkeeper a letter of instructions:

(a) describing the terms of each Plan;

(b) enclosing a copy of each Plan;

(c) listing the names, addresses, and Hay points or grade levels under the salary administration program then in effect, for the Plan Participants (and beneficiaries) covered by each Plan;

(d) setting forth the timing, form of distributions, and formula or other methodology for determining the amounts to be paid to each Plan Participant and beneficiary under each Plan; and

(e) instructing the Recordkeeper how and from whom to get any other information needed to compute benefits under each Plan.

 

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The Company shall regularly, at least annually, furnish revised, up-dated information to the Recordkeeper. In the event the Company refuses or neglects to provide updated Plan Participant information, as contemplated herein, the Recordkeeper shall be entitled to rely upon the most recent information furnished to it by the Company.

7.3  Payment Schedule . Within forty-five (45) days following a Change in Contr