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UNIVERSAL LEAF TOBACCO COMPANY, INCORPORATED
BENEFIT RESTORATION PLAN TRUST
THIS TRUST AGREEMENT, effective as of the date of execution by the
Trustee, by and between UNIVERSAL LEAF TOBACCO COMPANY, INCORPORATED, a Virginia
corporation, UNIVERSAL CORPORATION, a Virginia corporation, and WACHOVIA BANK,
N.A., a national banking association (the "Trustee");
RECITALS
A. Universal Leaf Tobacco Company, Incorporated, or any successor
thereto, Universal Corporation, and any of its subsidiaries, which are
Participating Employers in the Employees' Retirement Plan of Universal Leaf
Tobacco Company, Incorporated, and Designated Affiliated Companies, as the
context may require (the "Company"), has adopted the 1996 Benefit Restoration
Plan (the "Plan") identified in Appendix A.
B. 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 herein
defined, until paid to participants in the Plan and their beneficiaries in such
manner and at such times as specified in the Plan.
C. The parties intend that the Trust shall constitute an unfunded
arrangement and shall not affect the status of the Plan as an unfunded plan
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.
D. The Company intends 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 Plan.
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 THE TRUST.
(a) The Company hereby deposits with the Trustee in trust the sum of
$10.00, 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 shall be 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 (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 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 Plan and this Trust Agreement shall be mere unsecured
contractual rights of Plan participants and their beneficiaries against the
Company.
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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, as
defined in Section 3(a) herein.
(e) The 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 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 Plan
participant (or his or her beneficiary) shall have any right to compel such
additional deposits except as provided below.
(f) Notwithstanding the above, upon a Change of Control, the Company
shall, as soon as possible, but in no event longer than 30 days following the
Change of Control, as defined herein, make an irrevocable contribution to the
Trust in an amount that is sufficient to pay each Plan participant or
beneficiary the benefits to which Plan participants or their beneficiaries would
be entitled pursuant to the terms of the Plan as of the date on which the Change
of Control occurred. The Trustee may, in its discretion, compel such
contribution after a Change of Control.
Section 2. PAYMENTS TO PLAN PARTICIPANTS AND THEIR BENEFICIARIES.
(a) The Company shall deliver to the 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 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 Plan), and the time of commencement for payment of such amounts. Except as
otherwise provided herein, the 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, state or local 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 the Company.
(b) The entitlement of a Plan participant or his or her beneficiaries
to benefits under the Plan shall be determined by the Company 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, except after a
Change of Control, the Trustee may make such determination in its sole
discretion.
(c) The Company may make payment of benefits directly to Plan
participants or their beneficiaries as they become due under the terms of the
Plan. 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. 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, the Company shall make the balance of each such payment as it
falls due. The Trustee shall notify the Company if such principal and earnings
are not sufficient.
Section 3. RESPONSIBILITY OF THE TRUSTEE REGARDING PAYMENTS TO TRUST
BENEFICIARIES WHEN THE COMPANY IS INSOLVENT.
(a) The Trustee shall cease payment of benefits to Plan participants
and their beneficiaries if the Company is Insolvent. The Company shall be
considered "Insolvent" for purposes of this Trust Agreement if (i) the Company
is unable to pay its debts as they become due, or (ii) the Company is subject to
a pending proceeding as a debtor under the United States Bankruptcy Code.
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(b) At all times during the continuance of the Trust, as provided in
Section l(d) 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:
(i) 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 Plan participants or their beneficiaries.
(ii) 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.
(iii) If at any time the Trustee has determined that the
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 the 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 the Company with respect to benefits due under the Plan or
otherwise.
(iv) The Trustee shall resume the payment of benefits to Plan
participants or their beneficiaries in accordance with Section 2 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 Section 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 the Company in lieu of the payments
provided for hereunder during any such period of discontinuance.
Section 4. RESTORATION TO THE COMPANY OF EXCESS TRUST ASSETS
To the extent that the principal of the Trust, and any earnings thereon
become sufficient to pay each plan participant or beneficiary, exceed one
hundred and twenty-five percent (125%) of the benefits to which plan
participants or their beneficiaries would be entitled pursuant to the terms of
the Plan measured as of each December 31, then any such excess shall be returned
to the Company within thirty (30) days of the Company delivering a written
notice to the Trustee. The notice shall set forth the existence of the excess,
the Company's desire to have the amount which exceeds 125% of the total benefits
due the participant restored to the Company, a calculation of the amount of the
excess and a direction to distribute the funds to the Company.
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Section 5. PAYMENTS TO THE COMPANY.
Except as provided in Section 3, Section 4 and Section 13(b) hereof,
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 Plan participants and their beneficiaries pursuant to
the terms of the Plan.
Section 6. INVESTMENT AUTHORITY.
(a) The Trustee may invest, by way of illustration and not limitation,
in securities (including stock or rights to acquire stock) or obligations issued
by the Company or its affiliates, contracts, including contracts issued by an
insurance Company, instruments issued by a bank, including the Trustee, or such
other investments as may be permitted by law. All rights associated with assets
of the Trust shall be exercised by the Trustee or the person designated by the
Trustee and shall in no event be exercisable by or rest with Plan participants,
except that voting rights with respect to securities issued by the Company or
its affiliates will be exercised by the Company.
(b) Prior to a Change of Control, the Company shall have the right at
any time, and from time to time, in its sole discretion, 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 the Trust, all income received by the Trust, net of
expenses and taxes, shall be accumulated and reinvested.
Section 8. ACCOUNTING BY THE TRUSTEE.
The Trustee shall keep accurate and detailed records of all
investments, receipts, disbursements, and all other transactions required to be
made, including such specific records as shall be agreed upon in writing between
the Company and the Trustee. Within sixty (60) days following the close of each
calendar year and within sixty (60) 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.
Section 9. RESPONSIBILITY OF THE 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, provided, however, that the
Trustee shall incur no liability to any person for any action taken pursuant to
a direction, request or approval given by the Company which is contemplated by,
and in conformity with, the terms of the Plan or the Trust and is given in
writing by the Company. 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.
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(b) If the Trustee undertakes or defends any litigation arising in
connection with the Trust, the Company agrees to indemnify the Trustee against
the Trustee's costs, expenses (including, without limitation, reasonable
attorneys' fees) and liabilities 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.
This indemnity shall survive the termination of this Agreement.
(c) The Trustee may consult with legal counsel (who may also be counsel
for the Company) with respect to any of its duties or obligations hereunder.
(d) 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.
(e) 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 the Trustee, or to loan to any person
the proceeds of any borrowing against such policy.
(f) Notwithstanding the provisions of Section 8(e), the Trustee may
loan to the Company the proceeds of any borrowing against an insurance policy
held as an asset of the Trust.
(g) Notwithstanding any powers granted to the Trustee pursuant to this
Trust Agreement or to applicable law, the Trustee shall not have any power that
could give the Trust the objective of carrying on a business and dividing the
gains therefrom, within the meaning of section 301.7701-2 of the Procedure and
Administrative Regulations promulgated pursuant to the Code.
Section 10. COMPENSATION AND EXPENSES OF THE TRUSTEE.
The Company shall pay all administrative expenses and fees of the
Trustee. If not so paid, the fees and expenses shall be paid from the Trust.
Section 11. RESIGNATION AND REMOVAL OF THE TRUSTEE.
(a) The Trustee may resign at any time by written notice to the
Company, which shall be effective sixty (60) days after receipt of such notice
unless the Company and the Trustee agree otherwise.
(b) The Trustee may be removed by the Company on sixty (60) days notice
or upon shorter notice accepted by the Trustee.
(c) If the Trustee resigns or is removed within one (1) year of a
Change of Control, as defined herein, the Company shall select a successor
Trustee with total trust assets exceeding $1 billion prior to the effective date
of the Trustee's resignation or removal.
(d) 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 ninety (90)days after receipt of
notice of resignation, removal or transfer, unless the Company extends the time
limit.
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(e) If the Trustee resigns or is removed, a successor shall be
appointed, in accordance with Section 11 hereof, by the effective date of
resignation or removal under paragraphs (a) or (b) of this section. 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 TRUSTEE.
(a) If the Trustee resigns or is removed in accordance with Section
11(a) or (b) hereof, the Company may appoint any third party, such as a bank
trust department or other party that may be granted corporate trust powers under
state law, as a successor Trustee to replace the Trustee upon resignation or
removal. The appointment shall be effective when accepted in writing by the
successor 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) 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 7 and 8 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 successor
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 (i) conflict with the terms of the Plan, or (ii) add any
additional plans to the trust obligations, or shall make the Trust revocable
after it has become irrevocable in accordance with Section 1(b) hereof or (iii)
make the Trust revocable.
(b) The 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 Plan. Upon termination of the Trust, any assets remaining in
the Trust shall be returned to the Company.
(c) Upon written approval of Plan participants or beneficiaries
entitled to payment of benefits pursuant to the terms of the Plan, the Company
may terminate the Trust prior to the time all benefit payments under the Plan
have been made. All assets in the Trust at termination shall be returned to the
Company.
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 Plan 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.
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(c) This Trust Agreement shall be governed by and construed in
accordance with the laws of the Commonwealth of Virginia.
(d) For purposes of this Trust Agreement, a Change of Control means and
shall be deemed to have taken place if: (i) a third person, including a "group"
as defined in Section 13(d)(3) of the Securities Exchange Act of 1934, becomes
the beneficial owner of shares of Universal Corporation having 20 percent or
more of the total number of votes that may be cast for the election of Directors
of Universal Corporation; or, (ii) as a result of, or in connection with, any
cash tender or exchange offer, merger or other business combination, sale of
assets or contested election, or any combination of the foregoing transactions
(a "Transaction"), the persons who were Directors of Universal Corporation
before the Transaction shall cease to constitute a majority of the Board of
Universal Corporation or any successor to Universal Corporation.
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Section 15. EFFECTIVE DATE.
The effective date of this Trust Agreement shall be as set forth above.
UNIVERSAL LEAF TOBACCO
COMPANY, INCORPORATED
Date: June 24, 1997 By /s/Xxxxx X. X. Xxxxxx
--------------- ----------------------------------
Name: Xxxxx X. X. Xxxxxx
Title: Vice President, Treasurer
Date: June 24, 1997 By /s/Xxxxx X. Xxxxx III
--------------- ----------------------------------
Name: Xxxxx X. Xxxxx III
Title: Secretary and General Counsel
UNIVERSAL CORPORATION
Date: June 24, 1997 By /s/Xxxxx X. X. Xxxxxx
--------------- ----------------------------------
Name: Xxxxx X. X. Xxxxxx
Title: Vice President, Treasurer
Date: June 24, 1997 By /s/Xxxxx X. Xxxxx III
--------------- ----------------------------------
Name: Xxxxx X. Xxxxx III
Title: Secretary and General Counsel
WACHOVIA BANK, N.A.
Date: June 25, 1997 By /s/Xxxxx X. Xxxxx
--------------- ----------------------------------
Name: Xxxxx X. Xxxxx
Title: Vice President
