EXHIBIT 4.5
MILLENNIUM AMERICA HOLDINGS INC.
LONG TERM INCENTIVE PLAN AND EXECUTIVE LONG TERM INCENTIVE
PLAN TRUST AGREEMENT
TRUST UNDER: MILLENNIUM CHEMICALS INC. LONG TERM INCENTIVE
PLAN AND EXECUTIVE LONG TERM INCENTIVE PLAN
This Agreement made this first day of January,
1999 by and between Millennium America Holdings Inc. (the
"Company") and Xxxxxx X. Xxxxxxxxx, III (the "Trustee");
WHEREAS, Company has adopted the Millennium
Chemicals Inc. Long Term Incentive Plan and the Millennium
Chemicals Inc. Executive Long Term Incentive Plan
(individually and collectively, the "Plan");
WHEREAS, Company has incurred or expects to incur
liability under the terms of such Plan with respect to
individuals participating in such Plan;
WHEREAS, Company wishes to establish a trust (the
"Trust") and to contribute to the Trust assets that shall be
held therein;
WHEREAS, it is the intention of the parties that
this Trust shall constitute an unfunded arrangement and
shall not affect the status of the Plan as an unfunded plan
maintained for the purpose of providing deferred
compensation for certain key employees of the Company and
certain of its subsidiaries, and such Plan is not intended
to be subject to the Employee Retirement Income Security Act
of 1974.
WHEREAS, it is the intention of the Company to
make contributions to the Trust to provide itself with a
source of funds to assist in the meeting of its liabilities
under the Plan while still maintaining the ability to use
the Trust assets for general corporate needs;
NOW, THEREFORE, the parties do hereby establish
the Trust and agree that the Trust shall be comprised, held
and disposed of as follows:
Section 1. Establishment of Trust
(a) The Company hereby deposits with the Trustee in trust
such cash and/or marketable securities, if any, listed in
Appendix A, 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 revocable by the
Company; provided, however, that the Trust shall become
irrevocable upon a Change in Control (as defined in Section
12(f) below).
(c) The Trust is intended to be a grantor trust, of which
the Company is the grantor, within the meaning of subpart E,
subchapter J, chapter 1, subtitle A of the Internal Revenue
Code of 1986, as amended (the "Code"), and shall be
construed accordingly.
(d) The Company, in its sole discretion, may at any time,
or from time to time, make additional deposits of cash or
other property (including shares of common stock ($.01 par
value) of the Company ("Shares")) 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. Except to the extent provided in Section 1(f)
below, neither the Trustee nor any Plan participant or
beneficiary shall have any right to compel such additional
deposits.
(e) Trustee shall not be obligated to receive such cash/or
property unless prior thereto Trustee has agreed that such
cash and/or property is acceptable to Trustee and Trustee
has received such reconciliation, allocation, investment or
other information concerning, or representation with respect
to, the cash and/or property as Trustee may require.
Trustee shall have no duty or authority to (a) require any
deposits to be made under the Plan or to the Trustee, (b)
compute any amount to be deposited under the Plan to the
Trustee, or (c) determine whether amounts received by
Trustee comply with the Plan. Assets of the Trust may, in
Trustee's discretion, be held in an account with an
affiliate of Trustee.
(f) Upon a Change in Control, as defined in Section 12(f)
below, the Company shall, as soon as possible, but in no
event longer than thirty (30) days following the Change in
Control, 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) who have Awards under the Plan would be
entitled pursuant to the terms of the Plan as of the date on
which the Change in Control occurred.
Section 2. Payments to Plan Participants and Their
Beneficiaries.
(a) With respect to each Plan participant, the Company
shall direct the Trustee as to the form and amount to be
paid (as provided for or available under the Plan) to the
participant (and his or her beneficiaries) and the time of
commencement for payment of such amounts. The Company shall
make provisions for the reporting and withholding of any
federal, state or local taxes that may be required to be
withheld with respect to payment of benefits pursuant to the
terms of the Plan and shall pay amounts withheld by the
Trustee to the appropriate taxing authorities or determine
that such amounts have been reported, withheld and paid by
the Company, it being understood among the parties hereto
that (1) the Company shall on a timely basis provide the
Trustee specific information as to the amount of taxes to be
withheld and (2) the Company shall be obligated to receive
such withheld taxes from the Trustee and properly pay and
report such amounts to the appropriate taxing authorities.
(b) The entitlement of Plan participants 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 procedure set out in the Plan.
(c) The Company may make payment of benefits directly to
the Plan participants or their beneficiaries as they become
due under the terms of the Plan. The Company shall notify
Trustee of its decision to make payments 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 payment as it falls due. The Trustee shall notify the
Company where principal and earnings are not sufficient.
(d) The Trustee shall have no responsibility to determine
whether the Trust is sufficient to meet the liabilities
under the Plan, and shall not be liable for payments or Plan
liabilities in excess of the Trust assets.
Section 3. Payment to the Company.
Upon a Change in Control, in accordance with Section 1(b)
hereof, the Company shall have no rights 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 4. Investment Authority.
(a) The Trustee may invest in securities (including stock
or rights to acquire stock) or obligations issued by the
Company. 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 exercised by or
rest with Plan participants, except that voting rights with
respect to Trust assets will be exercised by the Trustee.
The Trustee, however, acknowledges the desire of the Company
that the Trust corpus be invested primarily (if not
exclusively) in Shares and the Company and acknowledges that
any diversification of investments that otherwise might be
required of a trustee under applicable state law is hereby
waived.
(b) The Company shall have the right at anytime, and from
time to time in its sole discretion, to substitute assets of
equal fair market value for any asset held by the Trust.
This right is exercised by the Company in a nonfiduciary
capacity without the approval or consent of any person in a
fiduciary capacity.
(c) With the express, written consent of the Company, the
Trustee may appoint one or more investment advisors who are
registered as investment advisers under the Investment
Advisers Act of 1940 to provide investment advice on a
discretionary or non-discretionary basis with respect to all
or a specified portion of the assets of the Trust.
(d) The Trustee, or the Trustee's designee, is authorized
and empowered:
(1) To invest and reinvest Trust assets, together with
income therefrom, in common stock, preferred stock,
convertible preferred stock, bonds, debentures, convertible
debentures and bonds, mortgages, notes, commercial paper and
other mutual funds, guaranteed investment contracts, bank
investment contracts, other securities, policies of life
insurance, annuity contracts, options to buy or sell
securities or other assets, and all other property of any
type (personal, real or mixed, and tangible or intangible);
(2) To deposit or invest all or any part of the assets of
the Trust in savings accounts or certificates of deposit or
other deposits in a bank or savings and loan association or
other depository institution;
(3) To hold, manage, improve, repair and control all
property, real or personal, forming part of the Trust; to
sell, convey, transfer, exchange, partition, lease for any
term, even extending beyond the duration of this Trust, and
otherwise dispose of the same from time to time;
(4) To hold in cash, without liability for interest, such
portion of the Trust as is pending investments, or payments
of expenses, or the distribution of benefits;
(5) To take such action as may be necessary or desirable to
protect the Trust from loss due to the default on mortgages
held in the Trust including the appointment of agents or
trustees in such other jurisdictions as may seem desirable,
to transfer property to such agents or trustees, to grant to
such agents such powers as are necessary or desirable to
protect the Trust, to direct such agent or trustee, or to
delegate such power to direct, and to remove such agent or
trustee;
(6) To settle, compromise, or abandon all claims and
demands in favor or against the Trust;
(7) Except as otherwise provided herein, to exercise all of
the further rights, powers, options and privileges granted,
provided for, or vested in trustees generally under the laws
of the state of New Jersey as set forth above, so that the
powers conferred upon the Trustee herein shall not be in
limitation of any authority conferred by law, but shall be
in addition thereto;
(8) To borrow money from any source and to execute
promissory notes, mortgages or other obligations and to
pledge or mortgage any trust asset as security; and
(9) To maintain accounts at, execute transactions through,
and lend on an adequately secure basis stocks, bonds, or
other securities to any brokerage or other firm.
Section 5. Additional Powers of the Trustee.
To the extent necessary or which it deems appropriate to
implement its powers under Section 4 or otherwise to fulfill
any of its duties and responsibilities as Trustee of the
Trust, the Trustee shall have the following additional
powers and authority:
(a) To register securities, or any other property, in its
name with or without indication of the capacity in which
property shall be held, or to hold securities in bearer form
and to deposit any securities or other property in a
depository or clearing corporation;
(b) To designate and engage the service of, and to delegate
powers and responsibilities to, such agents,
representatives, advisors, counsel and accountants as the
Trustee considers necessary or appropriate, and as part of
its expenses under this Trust Agreement, to pay their
reasonable expenses and compensation;
(c) To make, execute and deliver, as Trustee, any and all
deeds, leases, mortgages, conveyances, waivers, releases or
other instruments in writing necessary or appropriate for
the accomplishment of any of the powers listed in this Trust
Agreement; and
(d) Generally to do all other acts which the Trustee deems
necessary or appropriate for the protection of the Trust.
Section 6. Disposition of Income.
During the term of this Trust, all income received by the
Trust, net expenses and taxes, shall be accumulated and
reinvested principally in Shares unless otherwise instructed
by the Trustee.
Section 7. Responsibility and Indemnity 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
to the extent the Trust corpus is invested in Shares, the
Trustee need not satisfy any diversification of investments
requirement at law or in equity; and, further provided, 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 and this Trust and is
given in writing by the Company. The Trustee shall also
incur no liability to any person for any failure to act in
the absence of direction, request or approval from the
Company which is contemplated by, and in conformity with,
the terms of this Trust. In the event of a dispute between
the Company and a party, the Trustee may apply to a court of
competent jurisdiction to resolve the dispute.
(b) The Company hereby indemnifies the Trustee against, and
shall hold them harmless from, any and all loss, claims,
liability, and expense, including reasonable attorneys'
fees, imposed upon or incurred by the Trustee as a result of
any acts taken, or any failure to act, in accordance with
the directions from the Company or any designee of the
Company, or by reason of the Trustee's good faith execution
of its duties with respect to the Trust, including, but not
limited to, its holding of assets of the Trust, the
Company's obligations in the foregoing regard to be
satisfied promptly by the Company, provided that in the
event the loss, claim, liability or expense involved is
determined by a no longer appealable final judgment entered
in a lawsuit or proceeding to have resulted from the gross
negligence or willful misconduct of the Trustee, the Trustee
shall promptly on request thereafter return to the Company
any amount previously received by the Trustee under this
Section with respect to such loss, claim, liability or
expense. If the Company does not pay such costs, expenses
and liabilities in a reasonably timely manner, Trustee may
obtain payment from the Trust without direction from the
Company.
(c) The Trustee may consult with legal counsel (who may
also be counsel for the Company generally) with respect to
any of its duties or obligations hereunder.
(d) The Trustee may hire agents, accountants, actuaries,
investment advisers, 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 the Trustee 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) However, notwithstanding the provisions of Section 9(e)
above, 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 to the Trustee pursuant to
this Trust Agreement or to applicable law, the Trustee shall
not have any power that could give this 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 8. Compensation and Expenses of Trustee.
The Company shall pay all administrative expenses, but if
not so paid, the expenses shall be paid from the Trust.
Section 9. Resignation and Removal of Trustee.
(a) The Trustee may resign at any time by written notice to
the Company, which shall be effective 60 days after receipt
of such notice unless the Company and the Trustee agree
otherwise.
(b) The Trustee may be removed by the Company immediately
upon notice provided that the Company has appointed a
successor trustee effective immediately following the
removal of the Trustee. If no such successor trustee has
been appointed, the Trustee may be removed by the Company on
60 days notice or upon shorter notice accepted by the
Trustee.
(c) 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 60 days after receipt of
notice of resignation, removal or transfer, unless the
Company extends the time limit.
(d) If the Trustee resigns or is removed, a successor shall
be appointed, in accordance with Section 10 hereof, by the
effective date or resignation or removal under paragraph(s)
(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.
(e) Upon settlement of the account and transfer of the
Trust assets to the successor Trustee, all rights and
privileges under this Trust Agreement shall vest in the
successor Trustee and all responsibility and liability of
the Trustee with respect to the Trust and assets thereof
shall terminate subject only to the requirement that Trustee
execute all necessary documents to transfer the Trust assets
to the successor Trustee.
Section 10. Appointment of Successor.
(a) If the Trustee resigns or is removed in accordance with
Section 9(a) or (b) hereof, the Company may appoint any
third party, such as a bank trust department or other party
that may be granted trustee powers under state law, as a
successor to replace the Trustee upon resignation or
removal. The appointment shall be effective when accepted in
writing by the new Trustee, who shall have all of the rights
and powers of the former Trustee, including ownership rights
in the Trust assets. The former Trustee shall execute any
instrument necessary or reasonably requested by Company or
the successor Trustee to evidence the transfer.
(b) The successor Trustee need not examine the records and
act of any prior Trustee and may retain or dispose of
existing Trust assets, subject to Section 6 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 11. Amendment or Termination.
(a) This Trust Agreement may be amended by a written
instrument executed by the Trustee and the Company.
Notwithstanding the foregoing, no such amendment shall
conflict with the terms of the Plan or shall make the Trust
revocable upon or after a Change in Control once the Trust
is irrevocable in accordance with Section 1(b) hereof.
(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 participants or beneficiaries
entitled to payment of benefits pursuant to the terms of the
Plan, the Company may terminate this 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
Company.
Section 12. 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.
(c) This Trust Agreement shall be governed by and construed
in accordance with the laws of the state of New Jersey.
(d) The provisions of Sections 2(d), and 7(b) of this
Agreement shall survive termination of this Agreement.
(e) The rights, duties, responsibilities, obligations and
liabilities of the Trustee are as set forth in this Trust
Agreement, and no provision of the Plan or any other
document shall affect such rights, responsibilities,
obligations and liabilities. If there is a conflict between
provisions of the Plan and this Trust Agreement with respect
to any subject involving the Trustee, including but not
limited to the responsibility, authority or powers of the
Trustee, the provisions of this Trust Agreement shall be
controlling.
(f) For purposes of this Trust, "Change in Control" means
the first of any of the following to occur with respect to
Millennium Chemicals Inc. ("Millennium"):
(1) any "person" as such term is used in Sections 13(d) and
14(d) of the Securities Exchange Act of 1934, or amended
(the "1934 Act") (other than Millennium, any trustee or
other fiduciary holding securities under any employee
benefit Plan of Millennium or any company owned, directly or
indirectly, by the stockholders of Millennium in
substantially the same proportions as their ownership of
Common Stock of Millennium), becoming the "beneficial owner"
(as defined in Rule 13d-3 under the 1934 Act), directly or
indirectly, of securities of Millennium representing twenty-
five percent (25%) or more of the combined voting power of
Millennium's then outstanding securities;
(2) during any period of two consecutive years (not
including any period prior to October 1, 1996), individuals
who at the beginning of such period constitute the Board of
Directors of Millennium, and any new director (other than a
director designated by a person who has entered into an
agreement with Millennium to effect a transaction described
in clause (1), (3), or (4) of this Section 12 (f) or a
director whose initial assumption of office occurs as a
result of either an actual or threatened election contest
(as such terms are used in Rule 14a-11 of Regulation 14A
promulgated under the 0000 Xxx) or other actual or
threatened solicitation of proxies or consents by or on
behalf of a person other than the Board of Directors of
Millennium) whose election by the Board of Directors or
nomination for election by Millennium's stockholders was
approved by a vote of at least two-thirds of the directors
then still in office who either were directors at the
beginning of the two-year period or whose election or
nomination for election was previously so approved, cease
for any reason to constitute at least a majority of the
Board of Directors;
(3) the merger or consolidation of Millennium with any
other corporation, other than a merger or consolidation
which would result in the voting securities of Millennium
outstanding immediately prior thereto continuing to
represent (either by remaining outstanding or by being
converted into voting securities of the surviving entity)
more than fifty percent (50%) of the combined voting power
of the voting securities of Millennium or such surviving
entity outstanding immediately after such merger or
consolidation; provided, however, that a merger or
consolidation effected to implement a recapitalization of
Millennium (or similar transaction) in which no person
(other than those covered by the exceptions in clause (1)
above) acquires more than twenty-five percent (25%) of the
combined voting power of Millennium's then outstanding
securities shall not constitute a Change in Control; or
(4) the stockholders of Millennium approve a Plan of
complete liquidation of Millennium or the closing of the
sale or disposition by Millennium of all or substantially
all of Millennium's assets other than the sale or
disposition of all or substantially all of the assets of
Millennium to one or more Subsidiaries (as defined below) of
Millennium or to a person or persons who beneficially own,
directly or indirectly, at least fifty percent (50%) or more
of the combined voting power of the outstanding voting
securities of Millennium at the time of the sale or
disposition. "Subsidiary" has the meaning set forth in
Section 424(f) of the Code, as amended or superseded, and
the term shall also include any partnership, limited
liability company or other business entity if Millennium
owns, directly or indirectly, securities or other ownership
interests representing at least fifty percent (50%) of the
ordinary voting power or equity or capital interests of such
entity. Notwithstanding any of the foregoing, the formation
of Equistar Chemicals, LP ("Equistar") and the contribution
of assets by Millennium Petrochemicals Inc. to Equistar on
December 1, 1997 shall not constitute a Change in Control,
and the sale or disposition of all or any part of the
Company's interests in Equistar shall not constitute a
Change in Control.
Appendix A
None.
