Exhibit 69
AMP INCORPORATED
BENEFIT TRUST AGREEMENT
BENEFIT TRUST AGREEMENT ("Trust Agreement"), dated September 28,
1998, but effective as of the Effective Date (as hereinafter defined) by
and between AMP Incorporated, a Pennsylvania corporation (the "Company"),
and Wachovia Bank, N.A., as trustee of the Trust created hereby (the
"Trustee"). For purposes of this Trust Agreement, the "Effective Date"
shall mean the date of the Closing (as such term is defined in the Stock
Purchase Agreement referred to in Section 2.1(a) hereof).
WHEREAS, the Company is or may become obligated in respect of its
existing compensation and benefit plans, agreements, programs, arrangements
and practices listed on Exhibit A attached hereto and such existing and
future plans, agreements, programs, arrangements and practices as may
hereafter be listed on said Exhibit A (the plans, agreements, programs,
arrangements and practices listed on said Exhibit A from time to time being
collectively referred to herein as the "Plans") to make payments to or
contributions on behalf of its past, present or future employees or their
beneficiaries; and
WHEREAS, for purposes of providing a source for the satisfaction,
in whole or in part, of the contractual obligations of the Company under
the Plans, the Company desires to establish a trust (the "Trust"), which is
intended to constitute a grantor trust within the meaning of Section 671 of
the Internal Revenue Code of 1986, as amended (the "Code"), the assets of
which shall be subject to the claims of the Company's existing or future
creditors; and
WHEREAS, the Company desires that the assets to be held in the
Trust should be principally or exclusively equity securities of the Company
and, therefore, expressly waives any diversification of investments that
might otherwise be necessary, appropriate or required pursuant to
applicable law;
NOW, THEREFORE, in consideration of the mutual agreements
contained herein and for other good and valuable consideration, the
parties, intending to be legally bound, hereto agree as follows:
ARTICLE I
PURPOSE OF THE TRUST
SECTION 1.1 Purpose. (a) The purpose of the Trust is to hold
shares of Common Stock of the Company, no par value ("Common Stock"), or
other property as herein provided as a source to satisfy the Company's
contractual obligations under the Plans.
(b) The Company shall continue to be liable to make all payments
and deliver shares of Common Stock as required of the Company under the
terms of the Plans to the extent such payments have not been made or such
shares of Common Stock have not been delivered pursuant to this Trust
Agreement. Distributions made from the Trust in respect of the Plans
pursuant to Section 3.1 shall, to the extent of such distributions, satisfy
the Company's contractual obligations under the Plans.
ARTICLE II
TRUST AND THE TRUST CORPUS
SECTION 2.1 Delivery of Funds and Common Stock. (a)
Concurrently with the execution of this Trust Agreement, the Company has
agreed to sell to the Trustee an aggregate of 25 million authorized but
previously unissued shares (the "Acquired Shares") of Common Stock,
pursuant to the terms of a Stock Purchase Agreement, dated the date hereof,
between the Company and the Trustee (the "Stock Purchase Agreement"), such
Acquired Shares (including earnings thereon, property received as a
distribution in respect thereof and proceeds realized from the sale,
exchange or other disposition of such Acquired Shares or property) to be
held, administered and disposed of by the Trustee as provided herein.
Concurrently with its acquisition of the Acquired Shares, the Trustee shall
deliver to the Company, on behalf of the Trust, a Note (the "Note") of the
Trust with an original principal amount equal to the purchase price for the
Acquired Shares, such purchase price having been determined based on the
closing price per share of Common Stock on the New York Stock Exchange on
the last business day immediately preceding the signing of the Stock
Purchase Agreement.
(b) The Company may sell or otherwise deliver to the Trustee
additional amounts of cash or shares of Common Stock, to be held in trust
hereunder.
(c) Except as otherwise provided herein, all ordinary cash
dividends paid in respect of shares of Common Stock held in the Trust shall
be invested in Cash Equivalents. Any dividend or other distribution of
property (other than Common Stock) made with respect to Common Stock other
than an ordinary dividend (an "Extraordinary Dividend") shall be (i) held
in the Trust, (ii) disposed of and the proceeds reinvested in Common Stock,
(iii) disposed of and invested in Cash Equivalents, or (iv) any combination
of the foregoing, as directed by the Committee. All Extraordinary
Dividends in respect of shares of Common Stock held in the Trust, and any
proceeds therefrom and shares of Common Stock acquired with such proceeds,
shall become available for use by the Trustee (pursuant to Section 3.2
hereof) in the same proportion as Acquired Shares become available for use
by the Trustee pursuant to, and shall be applied in a manner consistent
with the provisions of, Section 3.2 hereof.
SECTION 2.2 Contributions to Repay Trust Indebtedness. The
Company shall contribute to the Trust in cash an amount which, when added
to cash dividends and other proceeds received by the Trust in respect of
Acquired Shares (or other shares of Common Stock) held in the Trust and not
previously applied under this Section 2.2, shall enable the Trustee to make
payments of principal and interest due under the Note (or other
indebtedness of the Trust relating to the acquisition of Common Stock) on a
timely basis or to make prepayments of such principal or interest. The
Trustee shall promptly apply all ordinary cash dividends paid in respect of
Acquired Shares (or other shares of Common Stock held in the Trust) and all
cash contributions to the payment of principal and interest under the Note
(or such other indebtedness). To the extent the Company fails to make any
contribution required under this Section 2.2 when due, or to the extent the
Committee (as hereinafter defined) notifies the Trustee that the Company
wishes to prepay any principal or interest under the Note (or such other
indebtedness) without making a contribution hereunder, such contribution
shall be deemed to have been made in the form of forgiveness of principal
and interest then due and owing on the Note (or forgiveness of principal
and interest to the extent of any prepayment, as the case may be). The
Trustee shall be accountable for all contributions received by it, but
shall have no duty to require any contributions to be made to it. The
Committee shall provide timely notice to the Trustee regarding each
dividend payment and each contribution to be made (or deemed to be made)
pursuant to this Section 2.2.
SECTION 2.3 Trust Corpus. As used herein, the term "Trust
Corpus" shall mean any cash, Cash Equivalents or shares of Common Stock
delivered, sold or otherwise contributed to the Trustee as described in
Section 2.1 or 2.2 hereof, together with any dividends or earnings thereon,
any property received as a distribution in respect thereof or any proceeds
from the disposition thereof, plus any cash or Cash Equivalents or shares
of Common Stock sold or otherwise delivered thereafter pursuant to Section
2.1 or 2.2 hereof, together with any earnings thereon, any property
received as a distribution in respect thereof or any proceeds from the
disposition thereof (and less such amounts distributed from the Trust
pursuant to the terms hereof). As used herein, the term "Cash Equivalents"
shall mean securities issued or directly and fully guaranteed by the United
States or any agency or instrumentality thereof (provided that the full
faith and credit of the United States is pledged in support thereof) having
maturities of less than one year from the date of acquisition or money
market portfolios of registered mutual funds, including those for which the
Trustee or its affiliates acts as investment advisor. Except as otherwise
provided in Section 2.1(c) hereof, the Trust Corpus shall at all times be
limited to shares of Common Stock and cash or Cash Equivalents.
ARTICLE III
RELEASE OF THE TRUST CORPUS
SECTION 3.1 Use of Assets. In accordance with the provisions
hereof and subject to Section 3.3 hereof, upon the direction of the
Committee, the Trustee shall apply the Trust Corpus (1) to the payment of
outstanding principal and interest on the Note or other indebtedness of the
Trust which is then outstanding, in accordance with the terms thereof, (2)
on behalf of the Company to the satisfaction of the Company's contractual
obligations under the Plans, or (3) otherwise as provided in Section 5.1
upon termination of the Trust. Notwithstanding the foregoing, (i) the
Trustee shall not transfer shares of Common Stock to the Company in
satisfaction of any outstanding principal and interest on the Note or other
indebtedness of the Trust, and (ii) the Trustee shall not be required to
apply the Trust Corpus in the manner described in clauses (2) or (3) above
during the period that the Company exercises its right to prevent the
Trustee from disposing of shares of Common Stock pursuant to the second
sentence of Section 4.3, if and to the extent that, at the time the
direction of the Committee to so apply the Trust Corpus is received by the
Trustee, the Trust Corpus does not contain sufficient cash or Cash
Equivalents to comply with the Committee's direction without disposing of
shares of Common Stock. A direction by the Committee to apply the Trust
Corpus for a purpose described in clauses (2) or (3) above may include a
direction to deliver shares of Common Stock in kind or to dispose of shares
of Common Stock and apply the proceeds therefrom for such purpose. For
purposes of this Trust Agreement, the term "Committee" shall mean a
committee comprised of the Company's Chief Financial Officer, General Legal
Counsel (or prior to November 1, 1998, the Company's Associate General
Legal Counsel) and Chief Human Resource Officer. The members of the
Committee shall be certified to the Trustee by the Secretary or Assistant
Secretary of the Company. Any action with respect to the Trust by the
Committee shall be taken by vote or consent of at least a majority of its
members or by any member authorized by the Committee to take action with
respect thereto and shall be communicated to the Trustee by the Committee
or any member designated thereby. Vacancies on the Committee shall be
filled automatically by the successor(s) to the positions set forth above.
SECTION 3.2 Release of Shares. (a) On each date on which
payment is made (or deemed to have been made) of any principal amount of
the Note (a "Principal Payment Date"), the following number of Acquired
Shares shall become available for use by the Trustee for the purposes
specified in Section 3.1 above: the number of Acquired Shares held in the
Trust immediately prior to the Principal Payment Date multiplied by a
fraction, the numerator of which is the amount of the principal payment
made (or deemed to have been made) on such date and the denominator of
which is the principal amount of the Note outstanding immediately prior to
such principal payment. Any shares of Common Stock subsequently acquired
by the Trust with borrowed funds or other indebtedness of the Trust shall
become available for the purposes specified in Section 3.1 above in a
manner consistent with the first sentence of this Section 3.2(a). The
Trustee may confirm with the Committee the number of Acquired Shares
becoming so available, and if it does so, it may rely upon such
confirmation.
(b) The Acquired Shares and other shares of Common Stock
becoming available pursuant to Section 3.2(a) above (the "Released Shares")
shall be contributed to the trust established under a Plan or, in the case
of any Plan under which no trust has been established, directly to or on
behalf of Participants or Beneficiaries (as such terms are hereinafter
defined), in accordance with the directions of the Committee. Upon
receiving directions from the Committee, the Trustee shall sell any
Released Shares and transfer the proceeds of such sale to the trust
established under such Plan or, in the case of any Plan under which no
trust has been established, to or on behalf of such Plan's Participants or
Beneficiaries. Any such sale shall be made in the manner directed by the
Committee, and may be made in the open market or in a private transaction,
excluding, however, any sale to the Company. If the sales are to be public
sales, the Company shall prepare and file an appropriate registration
statement with respect to such shares under the Securities Act of 1933, as
amended. In addition, in connection with any such sale, the Company shall
prepare and file any documents necessary to register such sales on all
stock exchanges on which the Common Stock is registered for trading.
SECTION 3.3 Deliveries to Creditors of the Company. It is the
intent of the parties hereto that the Trust Corpus is and shall remain at
all times subject to the claims of the general creditors of the Company.
Accordingly, neither the Trustee nor the Company shall create a security
interest in the Trust Corpus in favor of the Plans, any participant therein
(each, a "Participant"), any beneficiary of such Participant (each, a
"Beneficiary") or any creditor. If the Trustee receives the notice
provided for in Section 3.4, or if the Trustee otherwise receives actual
notice that the Company is insolvent or bankrupt as defined in Section 3.4,
the Trustee shall make no further distributions of the Trust Corpus but
shall deliver the entire amount of the Trust Corpus only as a court of
competent jurisdiction, or duly appointed receiver or other person
authorized to act by such a court, may direct. The Trustee shall resume
distribution of the Trust Corpus under the terms hereof, upon no less than
30 days' advance notice to the Company, if the Trustee determines that the
Company was not, or is no longer, bankrupt or insolvent. Such
determination shall be made in a timely fashion, and shall be based upon a
decision of a court of competent jurisdiction, a report of a nationally
recognized appraisal firm or a certification by the Chief Executive Officer
of the Company or a determination of the Board of Directors of the Company
(the "Board"). The Trustee may conclusively rely upon any such decision,
report or certification. Unless the Trustee has actual knowledge of the
Company's bankruptcy or insolvency, the Trustee shall have no duty to
inquire whether the Company is bankrupt or insolvent.
SECTION 3.4 Notification of Bankruptcy or Insolvency. The Chief
Executive Officer of the Company shall advise the Trustee promptly in
writing of the Company's bankruptcy or insolvency. The Company shall be
deemed to be bankrupt or insolvent upon the occurrence of any of the
following:
(i) the Company shall make an assignment for the
benefit of creditors; file a petition in bankruptcy; petition or
apply to any tribunal for the appointment of a custodian,
receiver, liquidator, sequestrator, or any trustee for it or a
substantial part of its assets; commence any case under any
bankruptcy, insolvency, reorganization, arrangement, readjustment
of debt, dissolution, liquidation or similar law or statute of
any jurisdiction (federal or state), whether now or hereafter in
effect; or if there shall have been filed any such petition or
application, or any such case shall have been commenced against
it, in which an order for relief is entered or which remains
undismissed for a period of 120 days; or the Company by any act
or omission shall indicate its consent to, approval of or
acquiescence in any such petition, application or case or order
for relief or to the appointment of a custodian, receiver or any
trustee for it or any substantial part of any of its property, or
shall suffer any such custodianship, receivership or trusteeship
to continue undischarged for a period of 120 days; or
(ii) the Company shall generally not pay its
debts as such debts become due or shall cease to pay its debts
generally in the ordinary course of business.
ARTICLE IV
ADMINISTRATION OF TRUST FUND
SECTION 4.1 Trustee. (a) The duties and responsibilities of
the Trustee shall be limited to those expressly set forth in this Trust
Agreement and the Stock Purchase Agreement, and no implied covenants or
obligations shall be read into this Trust Agreement against the Trustee.
Without limiting any other provision of this Section 4.1, the Company and
the Trustee agree that the Trustee shall be under no obligation to comply
with any otherwise applicable common law or statutory requirement regarding
investment of the Trust Corpus, including, but not limited to any "prudent
man rule."
(b) If, under circumstances described in Section 3.4 or
otherwise, all or any part of the Trust Corpus is at any time attached,
garnished, or levied upon by any court order, or in case the payment,
assignment, transfer, conveyance or delivery of any such property shall be
stayed or enjoined by any court order, or in case any order, judgment or
decree shall be made or entered by a court affecting such property or any
part thereof, then and in any of such events the Trustee is authorized, in
its sole discretion, to rely upon and comply with any such order, writ,
judgment or decree, and it shall not be liable to the Company, any Plan or
any Participant or Beneficiary by reason of such compliance even though
such order, writ, judgment or decree subsequently may be reversed,
modified, annulled, set aside or vacated.
(c) The Trustee or its agent shall maintain such books,
records and accounts as may be necessary for the proper administration of
the Trust Corpus (and agreed to from time to time between the Committee and
the Trustee), and shall render to the Committee, within 30 days of the end
of each fiscal quarter of the Company, commencing with the fiscal quarter
ending December 31, 1998, until the termination of the Trust (and on the
date of such termination or as promptly as practicable thereafter), an
accounting with respect to the Trust Corpus as of the end of the then most
recent fiscal quarter (and as of the date of such termination).
(d) The Trustee shall not be liable for any act taken or
omitted to be taken hereunder if taken or omitted to be taken by it in good
faith. The Trustee shall also be fully protected in relying upon any
notice or instruction given hereunder which it in good faith believes to be
genuine and executed and delivered in accordance with this Trust.
(e) The Trustee may consult with legal counsel to be
selected by it, including counsel to the Company, and the Trustee shall not
be liable for any action taken or omitted to be taken by it in good faith
in accordance with the advice of such counsel.
(f) The Trustee shall be reimbursed by the Company for its
reasonable expenses incurred in connection with the performance of its
duties hereunder and shall be paid reasonable fees for the performance of
such duties. Any amounts payable to the Trustee under this paragraph (f)
may be payable from the Trust Corpus if not paid by the Company.
(g) Except for any damages, losses, claims or expenses
resulting from the Trustee's gross negligence or willful misconduct, the
Company agrees to indemnify and hold harmless the Trustee from and against
any and all damages, losses, claims or expenses as incurred (including
reasonable expenses of investigation and reasonable fees, charges and
disbursements of counsel to the Trustee and any taxes imposed on the Trust
Corpus or income of the Trust) arising out of or in connection with (i) the
performance by the Trustee of its duties hereunder, (ii) the Stock Purchase
Agreement, or (iii) the Note. The Company shall promptly reimburse the
Trustee for the fees, charges and disbursements of counsel described in the
preceding sentence and may advance to the Trustee such funds as are
necessary or desirable to assist the Trustee in any actual, anticipated or
threatened claim, action or other proceeding relating to the Trust, the
Stock Purchase Agreement or the Note. Without limiting the generality of
the foregoing, the Trustee shall be under no liability to any person for
(and the Company shall indemnify and hold the Trustee harmless from and
against) any loss of any kind which may result by reason of any action
taken by it pursuant to Section 4.4 or by reason of its exercising any
power or authority under Section 4.4 or by reason of the purchase or
retention of Common Stock. The provisions of this Section 4.1(g) shall
survive the termination of this Trust or the failure to occur of the
Effective Date.
(h) Subject to the provisions of this Trust Agreement, the
Trustee shall have the following additional powers and authority, in
furtherance of the purpose of the Trust as described in Section 1.1(a),
with respect to property constituting a part or all of the Trust Corpus:
(i) To acquire and hold shares of Common Stock
and cash or Cash Equivalents, and, subject to Section 4.3 and 4.4
hereof, at the direction of the Committee, to sell, exchange or
transfer any such property at public or private sale for cash or
on credit and grant options for the purchase or exchange thereof;
(ii) To exercise any conversion privilege or
subscription right available in connection with any such
property; subject to Sections 4.3 and 4.4 hereof, 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 in the Trust and to
do any act with reference thereto, including the exercise of
options, the making of agreements or subscriptions and the
payment of expenses, assessments or subscriptions, which may be
deemed necessary or advisable in connection therewith, and to
hold and retain any securities or other property which it may so
acquire;
(iii) To commence or defend suits or legal
proceedings and to represent the Trust in all suits or legal
proceedings; to settle, compromise or submit to arbitration, any
claims, debts or damages, due or owing to or from the Trust;
(iv) Subject to Sections 4.3 and 4.4 hereof, to
exercise, personally or by general or limited power of attorney,
any right, including the right to vote, appurtenant to any shares
of Common Stock or other property;
(v) To engage legal counsel, including counsel to
the Company, or any other suitable agents, to consult with such
counsel or agents with respect to the construction of this Trust
Agreement, the duties of the Trustee hereunder, the transactions
contemplated by this Trust Agreement or any act which the Trustee
proposes to take or omit to take, to rely upon the advice of such
counsel or agents, and to pay its reasonable fees, expenses and
compensation;
(vi) To register any securities held by it in its
own name or in the name of any custodian of such property or of
its nominee, including the nominee of any system for the central
handling of securities, with or without the addition of words
indicating that such securities are held in a fiduciary capacity,
to deposit or arrange for the deposit of any such securities with
such a system and to hold any securities in bearer form;
(vii) To make, execute and deliver, as Trustee,
any and all deeds, leases, notes, bonds, guarantees, mortgages,
conveyances, contracts, waivers, proxies, releases or other
instruments in writing necessary or proper for the exercise of
any of the foregoing powers;
(viii) to borrow from any lender (including the Company
pursuant to this Trust Agreement, the Stock Purchase Agreement and
Note);
(ix) To take any other action necessary or
advisable in furtherance of the foregoing powers and the purposes
of this Trust.
SECTION 4.2 Successor Trustee. The Trustee may resign and be
discharged from its duties hereunder at any time by giving to the Company
notice in writing of such resignation specifying a date (not less than 30
days after the giving of such notice) when such resignation shall take
effect. Promptly after such notice, the Company shall appoint an
independent financial institution as successor trustee, such trustee to
become Trustee hereunder upon the resignation date specified in such
notice. The Trustee shall continue to serve until its successor accepts
the trust and receives delivery of the Trust Corpus. The Company may at
any time substitute an independent financial institution as successor
trustee by giving 15 days' notice thereof to the Trustee then acting. In
the event of such removal or resignation, the Trustee shall duly file with
the Committee a written statement or statements of account as provided in
Section 4.1(c) for the period since the last previous accounting of the
Trust, and if written objection to such account is not filed within 90
days, the Trustee shall to the maximum extent permitted by applicable law
be forever released and discharged from all liability and accountability
with respect to the propriety of its acts and transactions shown in such
account.
SECTION 4.3 Limitations on Sales. Except as otherwise provided
in Sections 3.2, 3.3 or 4.4, or as may be necessary to implement the
provisions of Section 5.1 hereof, the Trustee shall not sell, exchange or
transfer any shares of Common Stock or grant any option for the purchase or
exchange of any shares of Common Stock (a "Securities Transaction"). If
the Company is advised in writing by a recognized independent investment
banking firm that a Securities Transaction would adversely affect any
financing by the Company that had been contemplated by the Company prior to
the receipt of such notice or if the Company determines in its good faith
judgment that such Securities Transaction would require the Company to
disclose material information which the Company has a bona fide business
purpose for preserving as confidential or that the Company is unable to
comply with requirements of the Securities and Exchange Commission prior to
such Securities Transaction, the Company may give notice to the Trustee not
to effect such Securities Transaction. Upon receipt of such a notice from
the Company, the Trustee shall not effect such Securities Transaction for a
period not to exceed 120 days from the date of the Company's notice or such
lesser period as shall be specified in the Company's notice.
SECTION 4.4 Voting and Tendering of Common Stock.
(a) In General. Except as hereinafter provided, the number of
shares of Common Stock held by the Trust (1) to be voted in a particular
manner with respect to each matter brought before an annual or special
stockholders' meeting of the Company, (2) consenting with respect to each
matter as to which there is sought action by consent of stockholders in
lieu of a meeting or (3) to be tendered or exchanged in connection with a
tender or exchange offer for shares of Common Stock, as the case may be,
shall equal the product of (x) the total number of shares of Common Stock
held by the Trust as of the record date for such annual or special
stockholders' meeting or such matter with respect to which consents are
sought (or, in the case of a tender or exchange offer, as of the expiration
date for such offer) and (y) a fraction the numerator of which is, as the
case may be, (I) the aggregate number of shares of Common Stock voted in
such manner with respect to such matter by all stockholders of the Company
(other than the Trust), (II) the aggregate number of shares of Common Stock
consenting on such matter by all stockholders of the Company (other than
the Trust), or (III) the aggregate number of shares of Common Stock which
are tendered or exchanged by all stockholders of the Company (other than
the Trust), and the denominator of which is the aggregate number of
outstanding shares of Common Stock held by all stockholders of the Company
(other than the Trust). Notwithstanding the foregoing, in the event that a
tender or exchange offer for shares of Common Stock (i) is made by the
Company or (ii) is made by a third party for less than a majority of all
outstanding shares of Common Stock, the Trustee shall follow the
instructions of the Committee with respect to the tender or exchange of
such shares. The instructions of the Committee with respect to those
matters referred to in the preceding sentence shall be determined by the
Committee in its independent discretion, without direction from the Board.
(b) Trustee Powers. Except as provided in this Section 4.4, the
Trustee shall have no power to vote, act by written consent with respect
to, tender or exchange Common Stock held in the Trust.
ARTICLE V
TERMINATION AND AMENDMENT
SECTION 5.1 Termination. The Trust shall be terminated on the
earlier of December 31, 2008, or the date on which any of the following
events occurs (the "Termination Date"): (a) the Company's contractual
obligations under the Plans are satisfied in full; (b) the Trust Corpus is
exhausted; (c) the Department of Labor or a court of competent jurisdiction
has determined that the assets of the Trust are subject to Part 4 of
Subtitle B of Title I of ERISA; (d) the Internal Revenue Service or a court
of competent jurisdiction has determined that any portion of the Trust
Corpus is presently taxable to any Participant or Beneficiary; or (e) the
date of occurrence of a Change of Control (as defined in Section 5.2(c)
hereof). Upon termination of the Trust, any remaining portion of the Trust
Corpus shall be applied as expeditiously as possible as follows: first, to
satisfy any outstanding principal and interest on the Note or other
indebtedness of the Trust; second, the remaining shares of Common Stock and
other assets constituting the Trust Corpus shall be applied, as directed by
the Committee, in accordance with Section 3.1(2) hereof; and thereafter,
any remaining shares of Common Stock or other assets constituting the Trust
Corpus shall be utilized to fund contractual obligations of the Company, or
otherwise provide benefits to current employees of the Company, under one
or more employee benefit plans, agreements, programs, arrangements or
practices of the Company (other than Plans) as determined by the Committee.
In no event shall the Company receive any distribution of the Trust Corpus
upon termination of the Trust, except in repayment of unpaid principal and
interest due under the Note or other indebtedness of the Trust to the
Company.
SECTIONS 5.2 Amendment. (a) The Company may amend this Trust
Agreement, by written instrument executed and duly authorized by the
Company; provided however, that no such amendment shall accelerate the
Termination Date, materially alter the provisions of Sections 2.2, 3.1,
3.2, 3.3, 4.3 or 5.1 hereof or this Section 5.2 or permit the Company to
receive any distribution of the Trust Corpus except in repayment of unpaid
principal and interest due under the Note or any subsequent indebtedness
incurred by the Trustee to the Company; and provided, further, however,
that no amendment to this Trust Agreement pursuant to this Section 5.2(a)
or Section 5.2(b) hereof shall modify the responsibilities or duties of the
Trustee without its written consent.
(b) Notwithstanding Section 5.2(a) hereof, the Company may amend
this Trust Agreement from time to time in such a manner as may be
necessary, in the opinion of independent counsel, to prevent this Trust
Agreement or the Trust from becoming subject to ERISA or to prevent the
current taxation of the Trust Fund to any Participant or Beneficiary.
(c) For purposes of this Trust Agreement, a "Change of Control"
shall be deemed to have occurred if the event set forth in any one of the
following paragraphs shall have occurred:
(i) any Person (as defined below) is or becomes the beneficial owner
(as defined in Rule 13d-3 under the Securities Exchange Act of 1934,
as amended (the "Exchange Act")), directly or indirectly, of
securities of the Company (not including in the securities
beneficially owned by such Person any securities acquired directly
from the Company or its affiliates) representing 30% or more of either
the then outstanding shares of Common Stock or the combined voting
power of the Company's then outstanding securities; or
(ii) the following individuals cease for any reason to constitute a
majority of the number of directors then serving: individuals who, on
the date hereof, constitute the Board and any new director (other than
a director whose initial assumption of office is in connection with an
actual or threatened election contest, including but not limited to a
consent solicitation, relating to the election of directors of the
Company) whose appointment or election by the Board or nomination for
election by the Company's stockholders was approved by a vote of at
least two-thirds (2/3) of the directors then still in office who
either were directors on the date hereof or whose appointment,
election or nomination for election was previously so approved; or
(iii) there is consummated a merger or consolidation of the Company
with any other corporation or the issuance of voting securities of the
Company in connection with a merger or consolidation of the Company
(or any direct or indirect subsidiary of the Company) pursuant to
applicable stock exchange requirements, other than (A) a merger or
consolidation that would result in the voting securities of the
Company outstanding immediately prior to such merger or consolidation
continuing to represent (either by remaining outstanding or by being
converted into voting securities of the surviving entity or any parent
thereof) at least 66 2/3% of the combined voting power of the voting
securities of the Company, or such surviving entity or any parent
thereof, outstanding immediately after such merger or consolidation,
or (B) a merger or consolidation effected to implement a
recapitalization of the Company (or similar transaction) in which no
Person is or becomes the beneficial owner (as defined in Rule 13d-3
under the Exchange Act), directly or indirectly, of securities of the
Company (not including in the securities beneficially owned by such
Person any securities acquired directly from the Company or its
affiliates) representing 30% or more of either the then outstanding
shares of Common Stock or the combined voting power of the Company's
then outstanding securities; or
(iv) the stockholders of the Company approve a plan of complete
liquidation or dissolution of the Company or there is consummated an
agreement for the sale or disposition by the Company of all or
substantially all of the Company's assets, other than a sale or
disposition by the Company of all or substantially all of the
Company's assets to an entity, at least 70% of the combined voting
power of the voting securities of which are owned by Persons in
substantially the same proportions as their ownership of the Company
immediately prior to such sale.
The Committee shall notify the Trustee promptly in writing upon
any Change of Control; the Trustee may conclusively rely upon such notice,
and the Trustee shall have no responsibility for independently determining
whether any such event has occurred.
(d) For the purpose of Section 5.2(c) hereof, "Person" shall have
the meaning given in Section 3(a)(9) of the Exchange Act, as modified and
used in Sections 13(d) and 14(d) thereof, except that such term shall not
include (i) the Company or any of its subsidiaries, (ii) a trustee or other
fiduciary holding securities under an employee benefit plan of the Company
or any of its subsidiaries, (iii) an underwriter temporarily holding
securities pursuant to an offering of such securities, or (iv) a
corporation owned, directly or indirectly, by the stockholders of the
Company in substantially the same proportions as their ownership of stock
of the Company.
ARTICLE VI
GENERAL PROVISIONS
SECTION 6.1 Certain Provisions Relating to This Trust Agreement.
(a) This Trust Agreement shall be binding upon and inure to the benefit of
the parties and their respective successors and legal representatives.
(b) This Trust Agreement shall be governed by and construed
in accordance with the laws of the Commonwealth of Pennsylvania, without
reference to any provisions of such laws regarding choice of laws or
conflict of laws.
(c) In the event that any provision of this Trust Agreement
or the application thereof to any person or circumstances shall be
determined by a court of proper jurisdiction to be invalid or unenforceable
to any extent, the remainder of this Trust Agreement, or the application of
such provision to persons or circumstances other than those as to which it
is held invalid or unenforceable, shall not be affected thereby, and each
other provision of this Trust Agreement shall be valid and enforced to the
fullest extent permitted by law.
SECTION 6.2 Notices. Any notice, report, demand or waiver
required or permitted hereunder shall be in writing and shall be given
personally, delivered by overnight delivery service or sent by telecopier,
addressed as follows:
If to the Company:
AMP Incorporated
X.X. Xxx 0000 Mailstop 176-40
Xxxxxxxxxx, Xxxxxxxxxxxx 00000
Attention: Chief Financial Officer
If to the Trustee:
Wachovia Bank, N.A.
000 Xxxx Xxxxxx
Xxxxxxx-Xxxxx, Xxxxx Xxxxxxxx
Attention: Xxxxxxxx X. Xxxx,
Executive Services, NC31013
Notices shall be effective only upon receipt.
The Company or Trustee may change the address to which notices,
requests and other communications are to be sent to it by giving written
notice of such address change to the other parties in conformity with this
Section 6.2.
SECTION 6.3 Gender and Number. Wherever any words are used
herein in the masculine gender, they shall be construed as though they were
also used in the feminine gender in all cases where they would so apply,
and wherever any words are used herein in the singular form, they shall be
construed as though they were also used in the plural form in all cases
where they would so apply. Likewise, wherever any words are used herein in
the plural form, they shall be construed as though they were also used in
the singular form in all cases where they would so apply.
SECTION 6.4 Headings. The headings and subheadings of this
Agreement have been inserted for convenience of reference and are to be
ignored in any construction of the provisions hereof.
SECTION 6.5 No Third Party Beneficiaries. Nothing in this
Trust, express or implied, is intended to or shall confer on any particular
person, other than the Company and the Trustee, any right, benefit or
remedy of any nature whatsoever under or by reason of this Trust, and no
such person shall have any right, title or interest in or any claim to the
Trust Corpus except as expressly provided herein. In particular, it is the
express intent of the parties that (i) this Trust shall not form part of
any of the Plans, (ii) neither any Plan nor any Participant in any of the
Plans (nor any Beneficiary of such Participant) shall have any right, title
or beneficial ownership or other interest in or any claim (preferred or
otherwise) to the Trust Corpus, nor shall any such participant have any
right to compel, restrain or otherwise direct the exercise of the
respective powers of Trustee and the Company hereunder, it being understood
that the rights of each such Participant (and Beneficiary) shall be
determined in accordance with the provisions of the Plans and (iii) the
Trust Corpus shall not be deemed to be held under any trust for the benefit
of any such Participant (or Beneficiary) or to be collateral security for
the performance of the obligations of the Company.
SECTION 6.6 Counterparts. This Agreement may be executed in any
number of counterparts, each of which shall be deemed to be an original,
but all of which together constitute but one instrument, which may be
sufficiently evidenced by any counterpart.
SECTION 6.7 Successors. Effective upon consolidation of the
Company with, or merger of the Company with or into, any corporation or
corporations or other entity or entities, or any sale or conveyance of all
or substantially all of the assets of the Company, the Trustee shall deal
with the corporation formed by such consolidation, or with or into which
the Company is merged, or the person that acquires the assets of the
Company, on the same basis as it dealt with the Company prior to such
transactions and, in such event, the term "Company" within this Agreement
shall mean such corporation or person.
SECTION 6.8 Grantor Trust. The Trust shall be treated as a
grantor trust of the Company under the Code, and the Company shall take
into account in computing its tax liability, those items of income,
deductions and credits against tax attributable to assets held in the Trust
to which the Company would have been entitled had the Trust not been in
existence. The Trustee shall notify the Company promptly after it becomes
aware of any tax liability assessed against, or imposed upon, the Trust or
the Trustee in its capacity as Trustee of the Trust. The Company shall be
responsible for all matters in respect of such assessment or imposition,
and shall have sole responsibility for any defense in connection therewith.
Payments in respect of any tax liability of the Company arising in
connection with earnings, gains or activities relating to the Trust,
including, without limitation interest and penalties, shall be made by the
Company. The Committee shall also be responsible for directing the Trustee
with respect to any tax withholding and filing applicable to any
distributions from the Trust.
IN WITNESS WHEREOF, the parties have caused this Agreement to be
executed in their respective names by their duly authorized officers on the
day and year first above written, to be effective as of the Effective Date.
AMP INCORPORATED
By: /s/ Xxxxxx Xxxx
____________________________________
Name: Xxxxxx Xxxx
Title: Chairman and Chief Executive Officer
WACHOVIA BANK, N.A.
solely in its capacity as
trustee under this Trust
Agreement
By: /s/ Xxx X. Xxxx
____________________________________
Name: Xxx X. Xxxx
Title: Senior Vice President
