QWEST DB/DC
MASTER TRUST AGREEMENT
by and between
QWEST ASSET MANAGEMENT COMPANY
and
BOSTON SAFE DEPOSIT AND TRUST COMPANY
QWEST DB/DC
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MASTER TRUST AGREEMENT
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TABLE OF CONTENTS
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PAGE
SECTION 1. - GENERAL.........................................................2
1.1 Definitions.....................................................2
1.2 Compliance With Law.............................................3
SECTION 2. - ESTABLISHMENT OF COMBINED MASTER TRUST..........................3
2.1 Appointment and Acceptance of Master Trustee....................3
2.2 Master Trustee Responsibilities.................................4
2.3 Purpose; Exclusive Benefit......................................4
SECTION 3. - AUTHORITIES.....................................................4
3.1 Authorized Parties..............................................4
3.2 Authorized Instructions.........................................5
SECTION 4. - POWERS AND DUTIES...............................................5
4.1 General Powers and Duties of Master Trustee.....................5
4.2 Power of Attorney...............................................8
4.3 Contractual Income and Settlement; Market Practice
Settlements.....................................................9
SECTION 5. - INVESTMENT OF THE FUND.........................................10
5.1 Appointment of Investment Managers.............................10
5.2 Directed Powers of Master Trustee..............................12
5.3 Brokerage......................................................16
5.4 Standard of Care...............................................16
5.5 Force Majeure..................................................17
SECTION 6. - INVESTMENT FUNDS...............................................17
6.1 Establishment of Investment Funds..............................17
6.2 Permissible Types of Investments...............................18
6.3 Cash and Cash Balances.........................................19
SECTION 7. - UNITS OF PARTICIPATION; VALUATION..............................19
7.1 Units of Participation.........................................19
7.2 Valuation of Investment Funds..................................20
7.3 Valuation of Units.............................................20
7.4 Valuation Rules................................................21
SECTION 8. - ADDITIONS AND WITHDRAWALS......................................23
8.1 Additions and Withdrawals......................................23
8.2 Investment Cash in Short-Term Investment Funds of the Master
Trustee........................................................24
(i)
SECTION 9. - REPORTING AND RECORDKEEPING....................................25
9.1 Accountings by Master Trustee..................................25
9.2 Review of Reports..............................................26
9.3 Non-Fund Assets................................................27
SECTION 10. - COMPENSATION, EXPENSES, TAXES, INDEMNIFICATION.................27
10.1 Compensation and Expenses......................................27
10.2 Tax Obligations................................................28
10.3 Indemnification................................................28
10.4 Damages........................................................29
SECTION 11. - AMENDMENT, RESIGNATION, REMOVAL................................29
11.1 Amendment......................................................29
11.2 Removal or Resignation of Master Trustee.......................29
SECTION 12. - ADDITIONAL PROVISIONS..........................................30
12.1 Loss of Qualification..........................................30
12.2 Assignment or Alienation.......................................30
12.3 Successors and Assigns.........................................30
12.4 Governing Law..................................................30
12.5 Necessary Parties..............................................31
12.6 No Third Party Beneficiaries...................................31
12.7 Representations................................................31
12.8 Execution in Counterparts......................................31
(ii)
QWEST DB/DC
MASTER TRUST AGREEMENT
THIS MASTER TRUST AGREEMENT, effective as of the 31st day of May, 2001,
by and among Qwest Asset Management Company (the "Company"), in its corporate
capacity, as a Named Fiduciary (as defined below) of the Qwest Pension Plan (the
"DB Plan") and the US WEST Savings Plan/ESOP (the "DC Plan") and BOSTON SAFE
DEPOSIT AND TRUST COMPANY (the "Master Trustee").
WITNESSETH:
WHEREAS, the DB Plan and the DC Plan are employee benefit plans
intended to meet the requirements of ss. 401(a) of the Code for the benefit of
the employees therein described (the "Plan", individually or the "Plans",
collectively); and
WHEREAS, the assets of the DB Plan are held in the Qwest Pension Trust
established pursuant to a restated and amended Trust Agreement dated as of the
12th day of June, 1998, as amended (the "DB Trust"); and
WHEREAS, the assets of the DC Plan are held in the US WEST Savings
Plan/ESOP Trust established pursuant to an amended and restated Trust Agreement
dated as of the 5th day of June, 1998 (the "DC Trust" and, together with the DB
Trust, the "Participating Trusts"); and
WHEREAS, the Company desires to establish a master trust to facilitate
the combined investment of certain assets held in each of the Participating
Trusts on a collective basis by the establishment of a combined master trust
(the "DB/DC Master Trust"); and
WHEREAS, the Plans of which the Participating Trusts form a part
provide for one or more fiduciaries named in the Plans, or identified as a
fiduciary pursuant to a procedure specified in the Plans, which have been
allocated the power to manage and control the assets of the Plans (the "Named
Fiduciary"), as described in Exhibit A; and
WHEREAS, the Investment Committee, as the Named Fiduciary, has the
power to appoint a trustee in accordance with the terms of the Plans and has
appointed Boston Safe Deposit and Trust Company as Master Trustee;
NOW, THEREFORE, the Company, in its corporate capacity and as Named
Fiduciary, and the Master Trustee, each intending to be legally bound, agree as
follows:
SECTION 1. - GENERAL
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1.1 Definitions. The terms used herein shall have the following
meanings:
(a) "Agreement" means this instrument, including all
amendments thereto.
(b) "Authorized Instructions" means all directions and
instructions to the Master Trustee from an Authorized Party provided in
accordance with Section 3.2 of this Agreement.
(c) "Authorized Party" means any person or entity
properly identified by the Company, the Named Fiduciary, the DC Trustee, the DB
Trustee or the Investment Manager to the Master Trustee in accordance with
Section 3.1 of this Agreement.
(d) "Code" means the Internal Revenue Code of 1986, as
amended.
(e) "DB Trustee" means the trustee of the DB Trust,
currently Boston Safe Deposit and Trust Company.
(f) "DC Trustee" means the trustee of the DC Trust,
currently Bankers Trust.
(g) "ERISA" means the Employee Retirement Income Security
Act of 1974, as amended.
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(h) "Investment Fund" means one of the separate
investment funds established pursuant to Section 6.1 of this Agreement, to which
the particular provision of the Agreement is being applied.
(i) "Investment Manager" means an investment manager,
within the meaning of ss. 3(38) of ERISA which has been appointed by the Named
Fiduciary with respect to an Investment Fund pursuant to Section 5.1.
(j) "Master Trust Fund" means all of the assets held
pursuant to this Agreement as such assets shall exist from time to time.
(k) "Tax Obligations" means the responsibility for
payment of taxes, withholding, certification and reporting requirements, claims
for exemptions or refund, interest, penalties and other related expenses of the
Master Trust Fund.
1.2 Compliance with Law. The DB/DC Master Trust is intended to
comply with ERISA and to be tax-exempt under ss. 501(a) of the Code. The Company
represents that the Plans are qualified under ss. 401 (a) of the Code and shall
immediately notify the Master Trustee if any Plan ceases to be so qualified.
SECTION 2. - ESTABLISHMENT OF DB/DC MASTER TRUST
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2.1 Appointment and Acceptance of Master Trustee. The Named
Fiduciary hereby appoints BOSTON SAFE DEPOSIT AND TRUST COMPANY as Master
Trustee of the DB/DC Master Trust with respect to the Master Trust Fund. The
Master Trust Fund shall be held by the Master Trustee in trust and dealt with in
accordance with the provisions of this Agreement. The Master Trustee hereby
accepts its appointment as master trustee, acknowledges that it assumes the
duties established by this Agreement and agrees to be bound by the terms
contained herein.
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2.2 Master Trustee Responsibilities. The Master Trustee is not a
party to, and has no duties or responsibilities under, any of the Plans other
than those that may be expressly contained in this Agreement except to the
extent that the Master Trustee is also the trustee of a Participating Trust. In
any case in which a provision of this Agreement conflicts with any provision in
a Plan or any trust agreement relating to the Participating Trusts, this
Agreement shall control. The Master Trustee shall have no duties,
responsibilities or liability with respect to the acts or omissions of any
trustee of a Participating Trust except to the extent that the Master Trustee is
also the trustee of such Participating Trust.
2.3 Purpose; Exclusive Benefit. This DB/DC Master Trust is
established and shall be operated exclusively for the collective investment of
certain of the assets of the Participating Trusts. Except as may be permitted by
law or by the terms of the Plans or this Agreement, at no time prior to the
satisfaction of all liabilities with respect to participants and their
beneficiaries under the Plans shall any part of the Master Trust be used for or
diverted to any purpose other than for the exclusive benefit of the participants
and their beneficiaries.
SECTION 3. - AUTHORITIES
------------------------
3.1 Authorized Parties. The Company shall furnish the Master
Trustee with a written list of the names, signatures and extent of authority of
all persons authorized to direct the Master Trustee and otherwise act on behalf
of the Company and the Participating Trusts under the terms of this Agreement.
The Named Fiduciary will provide the Master Trustee with a written list of the
names, signatures and extent of authority of all persons authorized to act on
behalf of the Named Fiduciary. The Named Fiduciary shall cause the DB Trustee,
the DC Trustee and each Investment Manager appointed in accordance with Section
5.1 to furnish the Master Trustee with a written list of the names and
signatures of the person or persons who are authorized to represent the DB
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Trustee, the DC Trustee or an Investment Manager, respectively. The Master
Trustee shall be entitled to rely on and shall be fully protected in acting upon
direction from an Authorized Party until notified in writing by the Company, the
Named Fiduciary, the DB Trustee, the DC Trustee or the Investment Manager, as
appropriate, of a change of the identity of an Authorized Party and, except as
provided by ERISA, the Master Trustee shall not be responsible or liable for any
diminution of value of any securities or other property held by the Master
Trustee (or its subcustodians), except with respect to any property for which
the Trustee is acting as Investment Manager in which event its responsibility
and liability shall be determined based on the agreement pursuant to which it
has been appointed Investment Manager and applicable law.
3.2 Authorized Instructions. All directions and instructions to
the Master Trustee from an Authorized Party shall be in writing, transmitted by
mail or by facsimile or shall be an electronic transmission, provided the Master
Trustee may, in its discretion, accept oral directions and instructions and may
require confirmation in writing. The Master Trustee shall be entitled to rely on
and shall be fully protected in acting in accordance with all such directions
and instructions which it reasonably believes to have been given by an
Authorized Party and in failing to act in the absence thereof.
SECTION 4. - POWERS AND DUTIES
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4.1 General Powers and Duties of Master Trustee. In administering
the DB/DC Master Trust, the Master Trustee shall be specifically authorized to:
(a) Appoint custodians, subcustodians or sub-trustees,
domestic or foreign (including affiliates of the Master Trustee), as to part or
all of the Master Trust Fund, except that the indicia of ownership of any asset
of the Master Trust Fund shall not be held outside the jurisdiction of the
0
Xxxxxxxx Xxxxxx xx xxx Xxxxxx Xxxxxx unless in compliance with ss. 404(b) of
ERISA and regulations thereunder; provided that the Master Trustee shall not be
liable for the acts or omissions of any custodian or subcustodian appointed
under this Section 4.1(a) pursuant to Authorized Instructions;
(b) Hold property in nominee name, in bearer form, or in
book entry form, in a clearinghouse corporation or in a depository (including an
affiliate of the Master Trustee), so long as the Master Trustee's records
clearly indicate that the assets held are a part of the Master Trust Fund;
provided that the Master Trustee shall not be responsible for any losses
resulting from the deposit or maintenance of securities or other property (in
accordance with market practice, custom or regulation) with any recognized
foreign or domestic clearing facility, book-entry system, centralized custodial
depository, or similar organization;
(c) Collect income payable to and distributions due to
the Master Trust Fund and sign on behalf of the DB/DC Master Trust any
declarations, affidavits, certificates of ownership and other documents required
to collect income and principal payments, including but not limited to, tax
reclamations, rebates and other withheld amounts; provided that the Master
Trustee shall not be responsible for the failure to receive payment of (or late
payment of) distributions with respect to securities or other property of the
Master Trust Fund except where the failure is the result of negligence or
willful misconduct of the Master Trustee or its affiliates;
(d) Subject to the timely receipt of notice from an
issuer or an Authorized Party, collect proceeds from securities, certificates of
deposit or other investments which may mature or be called;
(e) Submit or cause to be submitted to the Named
Fiduciary or the Investment Manager, as designated by the Named Fiduciary, on a
best efforts basis all information actually received by the Master Trustee
regarding ownership rights pertaining to property held in the Master Trust Fund;
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(f) Attend to involuntary corporate actions;
(g) Determine the fair market value of the Master Trust
Fund daily, or for such other period as may be mutually agreed upon, in
accordance with methods consistently followed and uniformly applied. In
determining fair market value of the Master Trust Fund, the Master Trustee shall
be entitled to rely on and shall be protected in relying on values provided by
an Authorized Party;
(h) Render periodic statements for property held
hereunder;
(i) Subject to the prior written approval of the Named
Fiduciary, settle, compromise, or submit to arbitration any claims, debts, or
damages, due or owing to or from the Master Trust Fund, extend the time of
payment of any obligation due the Master Trust Fund, commence or defend suits or
legal proceedings and represent the Master Trust Fund in all suits or legal
proceedings in any court or before any other body or tribunal;
(j) Employ suitable agents and legal counsel, who may be
counsel for the Company, and, as a part of its reimbursable expenses under this
Agreement, pay their reasonable compensation and expenses. In the event that the
Master Trustee obtains written approval from the Named Fiduciary for the
employment of counsel, the Master Trustee shall be entitled to rely on and may
act upon advice of counsel on all matters, and shall be without liability for
any action reasonably taken or omitted pursuant to such advice;
(k) To the extent consistent with applicable law, deposit
cash in interest bearing accounts or non-interest bearing accounts, in either
case in the banking department of the Master Trustee or an affiliated banking
organization;
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(l) Take all action necessary to pay for authorized
transactions or make authorized distributions, provided that, unless otherwise
provided in Section 10.1 of this Agreement, the power to borrow or raise moneys
from any lender, which may be the Master Trustee in its corporate capacity or
any affiliate or agent of the Master Trustee, shall be exercised as directed by
the Named Fiduciary;
(m) Take any and all actions, including the appointment
of agents, necessary to settle transactions in futures and/or options contracts,
short-selling programs, foreign exchange or foreign exchange contracts, swaps,
synthetic GICs, BICs and similar instruments and other derivative investments;
(n) Make, execute and deliver any and all documents,
agreements or other instruments in writing as is necessary or desirable for the
accomplishment of any of the powers and duties in this Agreement; and
(o) Generally take all action, whether or not expressly
authorized, which the Master Trustee may deem necessary or desirable for the
fulfillment of its duties hereunder. Unless specifically provided otherwise in
this Section 4.1, the powers described in this Section 4.1 may be exercised by
the Master Trustee with or without Authorized Instructions, but where the Master
Trustee acts on Authorized Instructions, the Master Trustee shall be fully
protected as described in Section 3.2.
4.2 Power of Attorney. The Named Fiduciary appoints the Master
Trustee as the DB/DC Master Trust's true and lawful attorney-in-fact and
authorizes the Master Trustee to delegate the power of attorney to its global
custodians with full powers of substitution to:
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(a) Sign, file and deliver all requests or claims for
refund or reduction of , or exemption from, any withholding or similar taxes,
collect the refund of the tax and transfer the amounts collected as directed;
(b) Vote securities or execute proxies held in the DB/DC
Master Trust as directed and exercise rights as directed, related to the
securities as a result of corporate actions;
(c) Safekeep securities in the name of the DB/DC Master
Trust, receive dividends, interest, other payments and sale proceeds on behalf
of the DB/DC Master Trust, sign on behalf of the DB/DC Master Trust any and all
forms pertaining to instructions for sale or purchase of securities, and give
specific instructions regarding securities, cash and related transactions that
are registered in the name of the DB/DC Master Trust.
The global custodian is authorized to perform any other
actions necessary to carry out the intent of this Section.
Any charges or expenses incurred in connection with acts
permitted under this Section shall be paid by the DB/DC Master Trust.
4.3 Contractual Income and Settlement; Market Practice
Settlements.
(a) Contractual Income. In accordance with the Master
Trustee's standard operating procedure, the Master Trustee shall credit the
Master Trust Fund with income and maturity proceeds on securities on contractual
payment date net of any taxes or upon actual receipt. To the extent the Master
Trustee credits income on contractual payment date, the Master Trustee may
reverse such accounting entries to the contractual payment date if the Master
Trustee reasonably believes that such amount will not be received.
(b) Contractual Settlement. In accordance with the Master
Trustee's standard operating procedure, the Master Trustee will attend to the
settlement of securities transactions on the basis of either contractual
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settlement date accounting or actual settlement date accounting. To the extent
the Master Trustee settles certain securities transactions on the basis of
contractual settlement date accounting, the Master Trustee may reverse to the
contractual settlement date any entry relating to such contractual settlement if
the Master Trustee reasonably believes that such amount will not be received.
(c) Market Practice Settlements. Settlements of
transactions may be effected in trading and processing practices customary in
the jurisdiction or market where the transaction occurs. The Named Fiduciary
acknowledges that this may, in certain circumstances, require the delivery of
cash or securities (or other property) without the concurrent receipt of
securities (or other property) or cash. In such circumstances, the Master
Trustee shall have no responsibility for nonreceipt of payment (or late payment)
or nondelivery of securities or other property (or late delivery) by the
counterparty unless the nonreceipt is due directly to the negligence or willful
misconduct of the Master Trustee or its affiliates. All settlements of
transactions shall be carried out through the Master Trustee and each Investment
Manager is authorized to issue instructions to the Master Trustee with respect
to all deliveries of funds or securities in connection with the settlement of
transactions entered into with respect to an Investment Fund (or Sub-Fund) at
the direction of such Investment Manager.
SECTION 5.- INVESTMENT OF THE FUND
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5.1 Appointment of Investment Managers. The Named Fiduciary shall
have the power to appoint and remove one or more Investment Managers, which may
be the Master Trustee or an affiliate of the Master Trustee, as investment
manager(s) for each Investment Fund established pursuant to Section 6.1 and
shall monitor the investment performance of each such Investment Manager. If the
Named Fiduciary appoints more than one Investment Manager for any one Investment
11
Fund, the Named Fiduciary shall designate a specified portion of such Investment
Fund to be managed by each such Investment Manager, each such portion being
referred to herein as a "Sub-Fund" of an Investment Fund. In its discretion, and
upon prior written notice to the Master Trustee as agreed by the Named Fiduciary
and the Master Trustee , the Named Fiduciary may change the percentage of the
assets of such Investment Fund that are allocated to the Sub-Funds thereunder.
It is the Named Fiduciary's intent that all of the assets in each
Investment Fund will, at all times, be subject to the management and control of
an Investment Manager. If for whatever reason at any time there is no Investment
Manager in place with respect to any such assets, the Named Fiduciary shall
become responsible for such assets as if it were the Investment Manager and, in
such event, all references to Investment Manager herein with respect to such
assets shall be references to the Named Fiduciary.
Except as may be provided in a separate investment management
agreement, the Master Trustee shall not be responsible, directly or indirectly,
for the investment or reinvestment of the assets of the Master Trust Fund, which
investment and reinvestment (including, without limitation, all actions taken by
the Master Trustee at the direction of the Investment Manager in connection
therewith) shall be the sole responsibility of the Investment Manager with
respect to such assets. The Master Trustee shall be entitled to rely entirely on
an Investment Manager's directions, shall be under no duty to determine or make
inquiry whether an Investment Manager's directions received by it are in
accordance with the provisions of the Participating Trusts, the Plans or
applicable law, and shall have no duty to review or recommend the sale,
retention, or other disposition of any assets purchased or retained in
accordance with an Investment Manager's directions. Except as provided by ERISA,
the Master Trustee shall have no liability for any loss to the Master Trust Fund
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resulting from the purchase, sale, or retention of any assets or the taking of
any other action in accordance with an Investment Manager's directions, or
resulting from not having sold such assets so purchased or retained or from not
having taken any other action in the absence of an Investment Manager's
directions, to make such sale or take any other action.
5.2 Directed Powers of Master Trustee. In addition to the powers
enumerated in Section 4.1, the Master Trustee shall have and exercise the
following powers and authority in the administration of the Master Trust Fund;
provided, however, that such powers and authority are to be exercised by the
Master Trustee with respect to the assets of any Investment Fund (or Sub-Fund)
only as directed by the Investment Manager that has been appointed to direct the
investment of such Investment Fund (or Sub-Fund).
(a) Settle purchases and sales and engage in other
transactions, including free receipts and deliveries, exchanges and other
voluntary corporate actions, with respect to securities or other property
received by the Master Trustee;
(b) Sell for cash, to convert, redeem, or exchange for
other securities or other property, to tender securities pursuant to tender
offers, or otherwise to dispose of any securities or other property at any time
held by the Master Trustee;
(c) Exercise any conversion privilege and/or subscription
right available in connection with any securities or other property at any time
held by it; to oppose or to consent to the reorganization, consolidation,
merger, or readjustment of the finances of any corporation, company,
association, or any other entity, or to the sale, mortgage, pledge, or lease of
the property of any corporation, company, association, or other entity any of
the securities of which may at any time be held by it and to do any act with
reference thereto, including the exercise of options, the making of agreements
13
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; and to deposit
any property in any voting trust or with any protective, reorganization or
similar committee or with depositories designated thereby, to delegate power
thereto, and to pay or agree to pay part of the expenses and compensation of any
such committee and any assessments levied with respect to property so deposited;
(d) Exercise, personally, by proxy, or by general or
limited power of attorney, any right privilege, or other option including the
right to vote, appurtenant to any securities or other property held by it at any
time;
(e) Invest and reinvest all or any part of the assets of
such Investment Fund (or Sub-Fund), and to hold part of the Investment Fund (or
Sub-Fund) uninvested;
(f) Purchase, enter into, sell, hold, and generally deal
in any manner in and with contracts for the immediate or future delivery of
financial instruments of any issuer or of any other property; to grant,
purchase, sell, exercise, permit to exercise, permit to be held in escrow, and
otherwise to acquire, dispose of, hold, and generally deal in any manner with
and in all forms of options in any combination; and, in connection with its
exercise of the powers herein above granted, to deposit any securities or other
property as collateral with any broker-dealer or other person, and to take all
other appropriate action in connection with such contracts;
(g) Establish an account with a securities broker-dealer
in order to effect various securities transactions, including but not limited to
short sales transactions and other margin transactions which may include the
carrying of securities on margin, and to allow such broker-dealer or a mutually
agreed upon third party agent to hold as margin in connection therewith certain
property of the Master Trust Fund;
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(h) Enter into agreements (sometimes referred to as
"swaps") to exchange cash flows or other amounts (as specified in or determined
in accordance with such agreement), including, without limitation, interest rate
swaps, currency swaps, caps, collars, or floors, or any option with respect to
any such transaction;
(i) Borrow money, with or without security, from any
legally permissible source, to encumber property by mortgages or deeds of trust
to secure repayment of such indebtedness, to assume existing mortgages or deeds
of trust on acquired properties, and to acquire properties subject to existing
mortgages or deeds of trust;
(j) Form corporations and to create trusts to hold title
to any securities or other property, all upon such terms and conditions as may
be deemed advisable by the Investment Manager;
(k) Lend the assets of the Master Trust Fund in
accordance with the terms and conditions of a separate lending agreement;
(l) Settle investments in any collective investment fund,
including a collective investment fund maintained by the Master Trustee or an
affiliate and appoint agents and sub-trustees. To the extent that any investment
is made in any such collective investment fund, the terms of the collective
trust indenture shall solely govern the investment duties, responsibilities and
powers of the trustee of such collective investment fund and, to the extent
required by law, such terms, responsibilities and powers shall be incorporated
herein by reference and shall be a part of this Agreement. For purposes of
valuation, the value of the interest maintained by the Fund in such collective
investment fund shall be the fair market value of the collective investment fund
15
units held, determined in accordance with generally recognized valuation
procedures. The Named Fiduciary expressly understands and agrees that any such
collective investment fund may provide for the lending of its securities by the
collective investment fund trustee and that such collective investment fund
trustee will receive compensation for the lending of securities that is separate
from any compensation of the Master Trustee hereunder, or any compensation of
the collective investment fund trustee for the management of such fund. The
Master Trustee is authorized to invest in a collective fund which invests in
Mellon Financial Corporation stock in accordance with the terms and conditions
of the Department of Labor Prohibited Transaction Exemption 95-56 (the
"Exemption") granted to Mellon Bank, N.A. and its affiliates and to use a
cross-trading program in accordance with the Exemption. The Named Fiduciary
acknowledges receipt of the notice entitled "Cross-Trading Information", a copy
of which is attached to this Agreement as Exhibit B;
(m) Enter into any Insurance Contract with any insurance
company or companies, either for the purposes of investment or otherwise. The
Master Trustee shall not be responsible in any way for the form, terms, payment
provisions or issuer of any Insurance Contract which it is directed to purchase
and hold, or for performing any functions under any such Insurance Contract
which it may be directed to purchase and hold as contract holder thereunder
(other than the execution of any documents incidental thereto and transfer or
receipt of funds thereunder in accordance with the Investment Manager's
directions);
(n) Generally to exercise the same powers as an owner of
property and to do all acts, whether or not expressly authorized, which may be
considered necessary or desirable by the Investment Manager for the protection
of such Investment Fund (or Sub-Fund).
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The Master Trustee shall not be responsible in any way for the form,
terms (including, without limitation, any representations and warranties given
by it on behalf of the Master Trust Fund) or payment provisions of, or the
identity of the counterparty to, any contract or agreement which it is directed
to enter into by an Investment Manager, or for performing any functions under
any such agreement whether pursuant to such agreement or otherwise directed by
such Investment Manager. In connection therewith, the Master Trustee shall be
entitled to rely upon any representation or direction given by the Investment
Manager, including, without limitation, any direction regarding the accuracy of
any such representations and warranties or regarding the Investment Manager's
authority to give such directions, and shall be under no obligation to perform
any independent investigation or review regarding any of the foregoing;
provided, however, that nothing herein shall relieve the Master Trustee from any
liability for any acts taken or omitted by such Master Trustee for which it has
responsibility under this Agreement, or for any acts taken or omitted by an
Investment Manager if the Master Trustee knowingly participated in or knowingly
undertook to conceal such act or omission, knowing such act or omission
constituted a breach of fiduciary duty by the Investment Manager. In the event
that the Master Trustee has actual knowledge of any act or omission of an
Investment Manager which constitutes a violation of ERISA or this Agreement, it
shall immediately notify the Named Fiduciary in writing thereof.
5.3 Brokerage. With respect to the securities of any Investment
Fund, (or Sub-Fund), the Investment Manager appointed for such Investment Fund
(or Sub-Fund) shall have sole and exclusive authority to designate from time to
time the broker or brokers through whom transactions will be effected. Such
Investment Manager will determine the rate or rates to be paid for brokerage
services. Such Investment Manager may select brokerage firms providing research
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or other services, where rates may be higher than those charged by other brokers
who provide more limited services or who are not considered to provide the same
quality of execution. If an Investment Manager selects one or more brokers that
are affiliates of the Investment Manager, such Investment Manager shall comply
with Prohibited Transaction Class Exemption 86-128 under ERISA and Rule
11a2-2(T) under the Securities Exchange Act of 1934, to the extent applicable,
and with any other applicable law.
5.4 Standard of Care. The Master Trustee shall discharge its
duties under this Agreement with the care and skill required under ERISA with
respect to such duties. Except as provided by ERISA, the Master Trustee shall
not be responsible or liable for any losses or damages suffered by the Master
Trust Fund arising as a result of the insolvency of any custodian, subtrustee or
subcustodian, except to the extent the Master Trustee was negligent in its
selection or continued retention of such entity.
5.5 Force Majeure. Except as provided otherwise by ERISA and
notwithstanding anything in this Agreement to the contrary, the Master Trustee
shall not be responsible or liable for its failure to perform under this
Agreement or for any losses to the Master Trust Fund resulting from any event
beyond the reasonable control of the Master Trustee, its agents or
subcustodians, including but not limited to nationalization, strikes,
expropriation, devaluation, seizure, or similar action by any governmental
authority, de facto or de jure; or enactment, promulgation, imposition or
enforcement by any such governmental authority of currency restrictions,
exchange controls, levies or other charges affecting the Master Trust Fund's
property; or the breakdown, failure or malfunction of any utilities or
telecommunications systems; or any order or regulation of any banking or
securities industry including changes in market rules and market conditions
affecting the execution or settlement of transactions; or acts of war,
terrorism, insurrection or revolution; or acts of God; or any other similar
event.
18
SECTION 6. - INVESTMENT FUNDS
-----------------------------
6.1 Establishment of Investment Funds. The Master Trust Fund shall
consist of such one or more separate Investment Funds as the Named Fiduciary may
establish from time to time. The Named Fiduciary shall establish each such
Investment Fund by delivery of written notice thereof to the Trustee. Each such
notice shall set forth (i) the name of the Investment Fund it establishes, (ii)
the effective date of such Investment Fund's establishment, and (iii) the types
of property in which the assets of such Investment Fund may be invested;
provided that the Named Fiduciary (not the Master Trustee) shall be solely
responsible for monitoring each Investment Manager's compliance with (iii). Each
such Investment Fund shall be separately held, managed, administered, valued,
invested, reinvested, distributed, accounted for, and otherwise dealt with
hereunder. The Named Fiduciary may terminate an Investment Fund and/or
Investment Manager by providing prior written notice to the Master Trustee as
agreed by the Named Fiduciary and the Master Trustee. As of the Valuation Date
next following the effective date of such termination, all of the interests of
each such Participating Trust shall be withdrawn from such Investment Fund
pursuant to Section 8.
6.2 Permissible Types of Investments. Subject to the investment
objectives, guidelines, and restrictions established by the Named Fiduciary for
any particular Investment Fund pursuant to Section 6.1, the Investment Manager
of each Investment Fund (or Sub-Fund) may in its sole discretion, as it deems
proper, cause any or all of the assets of such Investment Fund (or Sub-Fund) to
be invested in any property, real or personal, or part interest therein,
19
wherever situated, without being limited to the classes of property in which
trustees are authorized to invest trust funds by any law or any rule of court of
any State and without regard to the proportion any such property may bear to the
entire amount of the DB/DC Master Trust. The Named Fiduciary shall be solely
responsible for monitoring and reviewing the performance of each Investment
Manager, including, without limitation, for assuring that the Investment Manager
is complying with the applicable investment objectives, guidelines and
restrictions and is otherwise acting within the scope of its authority. The
Master Trustee shall have no responsibility to perform any such review or
monitoring functions with respect to the Investment Managers.
6.3 Cash and Cash Balances. The Master Trust shall invest cash in
any Investment Fund (or Sub-Fund), as directed by the Investment Manager of such
Investment Fund (or Sub-Fund), in short-term investments including, without
limitation, deposits in, or short-term instruments of, the Master Trustee (or
any affiliate of the Master Trustee) or any custodian (or any affiliate of any
custodian), or in one or more short-term collective investment funds
administered by the Master Trustee (or any affiliate of the Master Trustee) or
any custodian (or any affiliate of any custodian) as trustee thereof for the
collective investment of assets of employee pension or profit sharing trusts, as
long as each such collective investment fund is available for the investment of
assets of directed accounts and such fund constitutes a qualified trust under
the applicable provisions of the Code (and while any portion of such Investment
Fund or Sub-Fund is so invested, such collective investment funds shall
constitute part of the applicable pension or profit-sharing plans, and the
instrument creating such funds shall constitute part of this Agreement). Except
as provided in Section 8, all income from such deposits, short-term instruments,
or short-term collective investment funds shall be added to the Investment Fund
(or Sub-Fund) to which it is allocable.
20
SECTION 7. - UNITS OF PARTICIPATION; VALUATION
----------------------------------------------
7.1 Units of Participation. Subject to the provisions of Section 8
for the purpose of maintaining the beneficial interests of the Participating
Trusts in the Master Trust Fund, each Investment Fund of the Master Trust Fund
shall be divided into units of participation ("Units"), and the beneficial
interest of each Participating Trust in each Investment Fund shall be expressed
by the number of Units and fractions of a Unit allocated to it as hereinafter
set forth. The Master Trustee shall maintain an account to which shall be
credited the number of Units of each Investment Fund allocated to each
Participating Trust. Each Unit in a particular Investment Fund shall have a
proportionate interest in such Investment Fund and none shall have priority or
preference over any other.
7.2 Valuation of Investment Funds. The Master Trustee shall
determine the value of each Investment Fund and the Units thereof in United
States Dollars as of the close of business on each business day. A business day
shall mean any day on which securities are traded on the New York Stock
Exchange. Each day as of which such value is determined is referred to herein as
a "Valuation Date." As of each Valuation Date the Trustee shall determine the
total value of the assets of each Investment Fund on the basis of the Valuation
Rules set forth in Section 7.4.
7.3 Valuation of Units. The initial value of each Unit of each
Investment Fund shall be ten dollars ($10.00). Thereafter, the value of each
Unit of each Investment Fund shall be determined by dividing the net value of
the assets of the Investment Fund, as established as of a Valuation Date under
21
Section 7.2, by the number of Units outstanding on such Valuation Date, as
reported to the Master Trustee by the Named Fiduciary or its agent. For purposes
of valuation, the net value of the assets of the Investment Fund shall equal the
aggregate value of the assets of the Investment Fund less the value of the
accrued liabilities incurred by the Investment Fund. The Unit value shall be
determined as of each Valuation Date before taking into account additions to and
withdrawals from the Investment Fund occurring as of such Valuation Date.
As of any Valuation Date, the Named Fiduciary may direct the Master
Trustee to make a uniform change in the number of all outstanding Units of any
Investment Fund, either by creating a larger number of smaller Units or a
smaller number of larger Units, having an aggregate current value at that
Valuation Date equal to the current value at that Valuation Date of such
Investment Fund.
7.4 Valuation Rules. The assets of each Investment Fund shall be
determined, and securities shall be valued, by the Master Trustee as of each
Valuation Date on the basis of the following valuation rules:
(a) The Master Trustee shall use its customary procedures
to price the assets comprising the Investment Fund on a Valuation Date. In
certain circumstances when prices are not available, the Master Trustee shall
require the Named Fiduciary or its investment manager to direct the Master
Trustee as to a price to be used, and the Master Trustee shall be protected in
relying upon such direction in determining the price.
(b) Upon request of the Master Trustee, the Investment
Manager of an Investment Fund (or Sub-Fund) holding securities or other property
shall certify the value of any such securities or other property held in the
DB/DC Master Trust, and such certification shall be regarded as a direction of
the Investment Manager.
22
(c) Notwithstanding anything herein contained to the
contrary, for the purposes of valuing the assets of the DB/DC Master Trust, the
Master Trustee may retain such one or more pricing services (whether or not
affiliated with the Master Trustee) as the Master Trustee shall deem advisable
and the Master Trustee shall not have the duty to confirm or validate any
information or valuation provided by any such pricing services, nor shall the
Master Trustee be responsible or liable for any act or omission of any such
pricing service selected by it, in the absence of negligence by the Master
Trustee.
(d) The Named Fiduciary shall cause each Investment
Manager to access the Master Trustee's on-line system to review and approve or
reconcile by an agreed time on each Valuation Date the Investment Fund's (or
Sub-Fund's) investment transactions affecting the Investment Fund (or Sub-Fund)
since the prior Valuation Date. Failure of the Investment Manager to notify the
Master Trustee of a change by an agreed time shall constitute approval. The
Master Trustee shall be entitled to conclusively rely upon such approval or
reconciliation in determining the Unit value of the Investment Fund.
(e) In the event that there has been a misstatement of a
Unit value on any Valuation Date, the Master Trustee shall not be required to
restate such Unit value unless the discrepancy is material. For purposes of this
Agreement, "material" shall mean any discrepancy exceeding or equaling one-tenth
of one percent (.001) of the Unit value after comparing the stated Unit value to
the corrected Unit value. Units transacted on a misstatement of Unit value shall
be restated using the corrected Unit value. If any material misstatement results
23
in a loss to the Investment Fund, the Master Trustee shall be responsible to the
Investment Fund for such loss only to the extent that such loss is directly
caused by the negligence of the Master Trustee.
SECTION 8. - ADDITIONS AND WITHDRAWALS
--------------------------------------
8.1 Additions and Withdrawals. No addition to or withdrawal from
any Investment Fund by a Participating Trust shall be permitted except on the
basis of the Unit value determined as prescribed in Section 7.3 hereof. No
addition to or withdrawal from an Investment Fund shall be made except as of a
time immediately after the close of business on the Valuation Date on which such
Unit value is determined, pursuant to notice or direction from the Named
Fiduciary (or an agent designated by the Named Fiduciary) to the Master Trustee
by a time mutually agreed by the Named Fiduciary and the Master Trustee. No such
notice or direction may be canceled or countermanded after the agreed upon time.
Notwithstanding the foregoing, any addition or withdrawal processed in error
shall be corrected on the basis of the Unit value of the Valuation Date on which
the error occurred.
Additions to an Investment Fund (including a Participating Trust's
initial purchase of Units in such Investment Fund) shall be made by a
Participating Trust in cash or in securities acceptable to the Named Fiduciary
and the Master Trustee. The number of Units of such Investment Fund to be
assigned to the Participating Trust with respect to an addition shall be equal
to (a) the amount of such cash, if any, plus the value of such securities, if
any, at the close of business on the Valuation Date, divided by the Unit value
computed as of the close of business on the Valuation Date.
Withdrawals from an Investment Fund shall be made in cash, except to
the extent that the Named Fiduciary determines that particular withdrawals are
to be made in kind (in whole or in part). In the case of a withdrawal which is
to be made in kind in whole or in part, the Named Fiduciary shall have absolute
24
discretion as to the selection of the securities of the Investment Fund to be
transferred to the withdrawing Participating Trust in satisfaction of the in
kind portion of such withdrawal. The cash to be paid or securities to be
transferred to a Participating Trust with respect to a withdrawal made as of a
Valuation Date from an Investment Fund shall have an aggregate value, determined
as of the close of business on such Valuation Date, equal to the Unit value
multiplied by the number of Units redeemed.
The Master Trust Fund shall transfer to a Participating Trust making a
withdrawal from an Investment Fund as of a Valuation Date the cash and/or
securities constituting payment of the withdrawal as if such transfer had been
completed on such Valuation Date. The Master Trustee may, in its discretion, or
shall, to the extent directed by the Named Fiduciary, withhold a portion of any
withdrawal to secure the payment of the compensation of the Master Trustee or
the Investment Manager(s) of such Investment Fund, if such compensation exceeds
the value of the property which would be remaining in the Master Trust after
such withdrawal is made, due or to become due with respect to the Participating
Trust concerned. Any such withheld portion shall be invested in short-term
investments specified by the Named Fiduciary, for the account of the
Participating Trust, as described in Section 6.3 until such compensation has
been paid.
8.2 Investment Cash in Short-Term Investment Funds of the Master
Trustee. If the Master Trustee receives cash from a Participating Trust prior to
a Valuation Date for the purpose of an addition to the Master Trust Fund or an
Investment Fund (including cash received as a result of a withdrawal by such
Participating Trust from a different Investment Fund), the Trustee, as directed
by the Named Fiduciary, shall temporarily invest such cash in one or more
short-term collective investment funds as described in Section 6.3 (and subject
to the requirements described in that Section). All income credited to the
25
Participating Trust from such short-term collective investment funds shall be
taken into account in determining the number of Units to be assigned to the
Participating Master Trust as of the Valuation Date, as described in Section
8.1.
SECTION 9. - REPORTING AND RECORDKEEPING
----------------------------------------
9.1 Accountings by Master Trustee. The Master Trustee shall
maintain the records of the DB/DC Master Trust and each Investment Fund on the
basis of a fiscal year ending December 31st of each year.
The Master Trustee shall keep accurate and detailed records of all
transactions involving the Master Trust Fund, and the respective Investment
Funds (and Sub-Funds). The Master Trustee shall make such records available for
inspection and audit at all reasonable times at the principal office of the
Master Trustee by any person designated by the Named Fiduciary. The Master
Trustee shall furnish to the Named Fiduciary, no less frequently than annually,
an opinion of the Master Trustee's public accounting firm as to the adequacy of
the Master Trustee's internal accounting procedures and controls.
The Master Trustee shall render a monthly account at a time mutually
agreed upon by the Named Fiduciary and the Master Trustee after the last
Valuation Date of each calendar month to the Named Fiduciary showing, as of such
Valuation Date, the number of Units then held by the Participating Trusts in
each Investment Fund, the then value of each Unit and the number of Units
purchased or redeemed by each Participating Trust with regard to each Investment
Fund during such calendar month.
The Master Trustee shall also render an annual account to the Named
Fiduciary within an agreed time after December 31 of each fiscal year. Such
annual account shall consist of a statement of the assets held in each
Investment Fund (and each Sub-Fund) of the Master Trust Fund and the fair market
26
value of each such asset as of the close of the fiscal year, and a summary of
the transactions of each Investment Fund (and Sub-Fund) of the Master Trust Fund
since the Master Trustee's last annual account. The Master Trustee shall provide
a similar account to the Named Fiduciary and to the trustee of each
Participating Trust having an interest in the Investment Fund to which such
account relates, within a reasonable time following termination of the Master
Trust Fund.
Except as provided in Section 9.3 hereof, the Master Trustee shall not
be required to render any account, annually or otherwise, in any court. The
Named Fiduciary, the Investment Managers, the trustees of the Participating
Trusts, and the Master Trustee shall provide each other with such other reports
and information as may reasonably be requested by any of them.
9.2 Review of Reports. If, within one year after the Master
Trustee mails to the Named Fiduciary an account, report or statement with
respect to the Master Trust Fund, the Named Fiduciary has not given the Master
Trustee written notice of any exception or objection thereto, the account,
report or statement, as the case may be, shall be deemed to have been approved,
and in such case, the Master Trustee shall not be liable for any matters in such
account, report or statement. The Named Fiduciary or its agent shall have the
right at its own expense and with prior written notice to the Master Trustee, to
inspect the Master Trustee's books and records directly relating to the Master
Trust Fund during normal business hours.
9.3 Non-Fund Assets. The duties of the Master Trustee hereunder
shall be limited to the assets held in the Master Trust Fund, and the Master
Trustee shall have no duties with respect to assets held by any other person
including, without limitation, the trustees of the Participating Trusts or any
other trustee for the Plans. The Company and the Named Fiduciary hereby agree
that the Master Trustee shall not serve as, and shall not be deemed to be, a
co-trustee under any circumstances.
27
SECTION 10. - COMPENSATION, EXPENSES, TAXES, INDEMNIFICATION
------------------------------------------------------------
10.1 Compensation and Expenses. The Master Trustee shall be
entitled to compensation for services under this Agreement as mutually agreed.
The Named Fiduciary acknowledges that, as part of the Master Trustee's
compensation, the Master Trustee may earn interest on balances, including
without limitation, disbursement balances and balances arising from purchase and
sale transactions, provided that the Master Trustee shall not earn balances on
funds listed as assets of the Master Trust. The Master Trustee shall also be
entitled to reimbursement for reasonable expenses incurred by it in the
discharge of its duties under this Agreement. All such fees and expenses shall
be charged to and collected from the Fund unless paid by the Company.
If the Master Trustee advances cash or securities for any purpose,
including the purchase or sale of foreign exchange or of contracts for foreign
exchange, or in the event that the Master Trustee shall incur or be assessed
taxes, interest, charges, expenses, assessments, or other liabilities in
connection with the performance of this Agreement, except such as may arise from
its own negligent action, negligent failure to act or willful misconduct, any
property at any time held for the Master Trust Fund shall be security therefor
and the Master Trustee shall be entitled to collect from the Fund sufficient
cash for reimbursement, and if such cash is insufficient, dispose of the assets
of the Master Trust Fund to the extent necessary to obtain reimbursement. To the
extent the Master Trustee advances funds to the Master Trust Fund for
disbursements or to effect the settlement of purchase transactions, the Master
Trustee shall be entitled to collect from the Master Trust Fund either (i) with
respect to domestic assets, an amount equal to what would have been earned on
28
the sums advanced (an amount approximating the "federal funds" interest rate) or
(ii) with respect to non-domestic assets, the rate applicable to the appropriate
foreign market.
10.2 Tax Obligations. To the extent an Authorized Party has
provided necessary information to the Master Trustee, the Master Trustee shall
use reasonable efforts to assist such Authorized Party with respect to any Tax
Obligations. The Named Fiduciary shall cause each Authorized Party to notify the
Master Trustee in writing of any Tax Obligations. Notwithstanding the foregoing,
the Master Trustee shall have no responsibility or liability for any Tax
Obligations now or hereafter imposed on the Company or the Master Trust Fund by
any taxing authorities, domestic or foreign, except as provided by applicable
law.
To the extent the Master Trustee is responsible under any applicable
law for any Tax Obligation, the Named Fiduciary shall cause the appropriate
Authorized Party to inform the Master Trustee of all Tax Obligations, shall
direct the Master Trustee with respect to the performance of such Tax
Obligations, and shall provide the Master Trustee with the necessary funds and
all information required by the Master Trustee to meet such Tax Obligations. All
such Tax Obligations shall be paid from the Master Trust Fund unless paid by the
Company.
10.3 Indemnification.
(a) Subject to such limitations as may be imposed by
ERISA or other applicable law, the Plan will indemnify and hold harmless the
Master Trustee of and from any liability or expense in connection with or
arising out of:
(i) any action taken or omitted in good faith
with respect to any investment or
disbursement of any part of the Master Trust
Fund made by the Master Trustee in
accordance with directions of the Named
Fiduciary or any inaction with respect to
29
any Named Fiduciary in the absence of
directions from the Named Fiduciary
therefore, except with respect to the
lending of securities, which shall be
governed by a separate agreement, or
investment of uninvested cash balances (to
the extent no directions are received), or
(ii) any action taken or omitted in good faith by
the Master Trustee with respect to any
Investment Fund in accordance with any
direction of the Investment Manager or any
inaction with respect to any such Investment
Fund in the absence of directions from the
Investment Manager, except with respect to
the lending of securities, which shall be
governed by a separate agreement, or
investment of uninvested cash balances (to
the extent no directions are received), or
(iii) any action taken in good faith by the Master
Trustee pursuant to a notification of an
order to purchase or sell securities issued
by an Investment Manager or the Named
Fiduciary directly to a broker or dealer.
Anything hereinabove to the contrary notwithstanding, the Plan shall have no
responsibility to the Master Trustee under the foregoing undertaking with
respect to any actions or failures to act by persons engaged directly by the
Master Trustee (without direction of the Named Fiduciary or an Investment
Manager) pursuant to this Agreement (including, but not limited to, custodians
or other depositories and persons employed pursuant to this Agreement), or if
the Master Trustee knowingly participated in or knowingly undertook to conceal
any act or omission of the Named Fiduciary, Investment Manager or other
"fiduciary" as defined in ss.3(21) of ERISA, if the Master Trustee knew or
should have known such act or omission constituted a breach of fiduciary
responsibility, or if the Master Trustee fails to perform any of the duties
agreed to be undertaken by it pursuant to the provisions of this Agreement, or
30
if the Master Trustee fails to act in conformity with the lawful directions of
an Authorized Party of the Named Fiduciary or an Investment Manager.
(b) Subject to such limitations as may be imposed by
ERISA or other applicable law, and the prior written approval of the Named
Fiduciary, in addition to the fees and expenses set forth in this Agreement, the
Named Fiduciary may, in its sole discretion, direct the Master Trustee to
advance reasonable and necessary fees and expenses (including reasonable
attorneys fees and disbursements) from the Master Trust Fund to the Master
Trustee or Investment Manager in connection with any claim, action, suit or
proceeding or appeal therefrom, whether civil, criminal, administrative,
investigative or otherwise, brought against a trustee or Investment Manager with
respect to the affairs of the Master Trust Fund in advance of the final
disposition of any such claim, action, suit or proceeding or appeal therefrom,
provided that if it shall be determined that such Master Trustee or Investment
Manager breached a fiduciary duty owed to the Plan or a responsibility owed to
the Plan under this Agreement, such Master Trustee or Investment Manager shall
repay such advance to the Master Trust Fund with interest.
(c) To the extent that the Master Trustee is not
indemnified pursuant to subsections 10.3(a) or (b) above, the Company shall
indemnify and hold harmless the Master Trustee from and against any loss, costs,
damages or expenses including without limitation reasonable attorneys' fees and
expenses which the Master Trustee may incur or pay out by reason of any alleged
or actual act, or failure to act, on the part of the Company or other Named
Fiduciary, or any Investment Manager, whether or not the Master Trustee may also
31
be considered liable for that person's alleged or actual act or failure to act
underss.405 of ERISA, unless the Master Trustee had actual knowledge that such
act or omission constituted a violation of ERISA or this Agreement, or if the
loss, costs, damages or expenses resulted from the failure of the Master Trustee
to perform any of the duties agreed to be undertaken by it pursuant to the
provisions of the Agreement, or negligence or willful misconduct in performing
such duties. This indemnification shall survive the termination of this
Agreement.
32
SECTION 11. - AMENDMENT, RESIGNATION, REMOVAL
---------------------------------------------
11.1 Amendment. This Agreement may be amended by written agreement
signed by the parties hereto.
11.2 Removal or Resignation of Master Trustee. The Master Trustee
may be removed with respect to all or part of the Master Trust Fund upon receipt
of sixty (60) days' written notice (unless a shorter or longer period is agreed
upon) from the Named Fiduciary. In the event the Named Fiduciary fails to
appoint a successor trustee within sixty (60) days of receipt of written notice
of removal, the Master Trustee reserves the right to seek the appointment of a
successor trustee from a court of competent jurisdiction. The Master Trustee may
resign as Master Trustee hereunder upon sixty (60) days' written notice (unless
a shorter or longer period is agreed upon) delivered to the Named Fiduciary. In
the event the Named Fiduciary fails to appoint a successor trustee within sixty
(60) days of receipt of written notice of resignation, the Master Trustee shall
continue to serve as Master Trustee for an additional thirty (30) days after
which the Master Trustee reserves the right to seek the appointment of a
successor trustee from a court of competent jurisdiction. In the event of such
removal or resignation, a successor trustee will be appointed by the Named
Fiduciary and the retiring Master Trustee shall transfer the Master Trust Fund,
less such amounts as may be reasonable and necessary to cover its compensation
and expenses. The Master Trustee shall have no duties, responsibilities or
liability with respect to the acts or omissions of any successor trustee. Any
compensation paid to the Master Trustee in advance shall be prorated to the date
of resignation or removal of the Master Trustee, and any unearned portion
thereof shall be repaid by the Master Trustee to the Master Trust.
33
SECTION 12.- ADDITIONAL PROVISIONS
----------------------------------
12.1 Loss of Qualification. The Company shall promptly notify the
Master Trustee of any determination by the Internal Revenue Service that any
Plan has ceased to be qualified under ss. 401(a) of the Code. Upon such event or
in the event that any Plan shall otherwise cease to become qualified, the
equitable share of such Plan participating in the Master Trust Fund shall be
promptly segregated and withdrawn from the Master Trust Fund.
12.2 Assignment or Alienation. Except as may be provided by law,
the Master Trust Fund shall not be subject to any form of attachment,
garnishment, sequestration or other actions of collection afforded creditors of
the Company, participants or beneficiaries under any of the Plans.
12.3 Successors and Assigns. Neither the Company nor the Master
Trustee may assign this Agreement without the prior written consent of the
other, except that the Master Trustee may assign its rights and delegate its
duties hereunder to any corporation or entity which directly or indirectly is
controlled by, or is under common control with, the Master Trustee upon
notification to the Company. This Agreement shall be binding upon, and inure to
the benefit of, the Company and the Master Trustee and their respective
successors and permitted assigns. Any entity which shall by merger,
consolidation, purchase, or otherwise, succeed to substantially all the trust
business of the Master Trustee shall, upon such succession and without any
appointment or other action by the Company or the Named Fiduciary, be and become
successor trustee hereunder, upon notification to the Company.
12.4 Governing Law. This Agreement shall be construed in accordance
with and governed by the laws of the State of Colorado (without regard to any
conflict of laws provision)to the extent not preempted by ERISA or other
applicable Federal law. The actual administration of the Master Trust Fund may
34
be conducted in such location within the United States, and the location of its
assets (or indicia of ownership thereof) may be changed within the United States
(unless the provisions of ss.404(b) of ERISA and the regulations thereunder are
complied with, in which case, the location of certain assets may be maintained
outside the jurisdiction of the district courts of the United States), as the
Named Fiduciary and the Master Trustee shall mutually agree from time to time.
Upon any such change in the location of the administration of the assets of the
DB/DC Master Trust, the Named Fiduciary may agree that the Master Trust Fund
shall cease to be administered, governed, and interpreted in accordance with the
laws of Colorado, or the laws of such other jurisdiction as may then be
applicable to the DB/DC Master Trust, and shall, instead be administered,
governed and interpreted in accordance with the laws of the jurisdiction to
which the administration of the assets of the Master Trust Fund have been
transferred.
12.5 Necessary Parties. The Master Trustee reserves the right to
seek a judicial or administrative determination as to its proper course of
action under this Agreement. Nothing contained herein will be construed or
interpreted to deny the Master Trustee, the Named Fiduciary or the Company the
right to have the Master Trustee's account judicially determined. To the extent
permitted by law, only the Master Trustee, the Named Fiduciary and the Company
shall be necessary parties in any application to the courts for an
interpretation of this Agreement or for an accounting by the Master Trustee, and
no participant under any of the Plans or other person having an interest in the
Master Trust Fund shall be entitled to any notice or service of process. Any
final judgment entered in such an action or proceeding shall, to the extent
permitted by law, be conclusive upon all persons.
35
12.6 No Third Party Beneficiaries. The provisions of this Agreement
are intended to benefit only the parties hereto, their respective successors and
assigns, and participants and their beneficiaries under the Plans. There are no
other third party beneficiaries.
12.7 Representations. The Company and the Master Trustee hereby
each represent and warrant to the other that it has full authority to enter into
this Agreement upon the terms and conditions hereof and that the individual
executing this Agreement on its behalf has the requisite authority to bind the
Company, the Named Fiduciary, or the Master Trustee to this Agreement.
12.8 Execution in Counterparts. This Agreement may be executed in
any number of counterparts, each of which shall be deemed an original, and said
counterparts shall constitute but one and the same instrument and may be
sufficiently evidenced by one counterpart.
36
EXHIBIT A
Named Fiduciaries
The Investment Committee (or its delegate) is the named fiduciary of the Plans
responsible for the appointment and removal of one or more trustees, for
establishing, revising and monitoring asset allocation ranges for the Plans,
approving or vetoing private equity placements in excess of $50 million,
approving processes and policies for payment of Plan expenses and approving
reimbursement of expenses of the Company and its Subsidiaries, including QAM,
approving derivative policies, and approving the general investment strategies
utilized by QAM with respect to assets directly managed by QAM.
The Employee Benefits Committee is the named fiduciary responsible for the
administration of the Plans and for directing the Trustee concerning all
distributions from the Master Trust Fund in accordance with the provisions of
the Plans.
Qwest Asset Management Company ("QAM") is the named fiduciary for all purposes
of the management and investment of Plan assets other than those
responsibilities of the Investment Committee. Such powers shall include, but are
not limited to, the authority to enter into trust agreements, appointing,
removing and monitoring investment managers and other persons appropriate for
trust management. QAM shall also have the responsibility of monitoring the
performance of the Trustee.
This Exhibit A shall be deemed amended to the extent a Plan's provisions
regarding the Named Fiduciaries and their duties are amended without requiring
formal amendment of the DB/DC Master Trust.
38
EXHIBIT B
CROSS-TRADING INFORMATION
As part of the cross-trading program covered by the Exemption for Mellon Bank,
N.A. and its affiliates, Mellon Bank, N.A. is to provide to each affected
employee benefit plan the following information:
I The existence of the cross-trading program
------------------------------------------
Mellon Bank, N.A. has developed and intends to utilize,
wherever practicable, a cross-trading program for Indexed
Accounts and Large Accounts as those terms are defined in the
Exemption.
II The "triggering events" creating cross-trade opportunities
----------------------------------------------------------
In accordance with the Exemption three "triggering events" may
create opportunities for cross-trading transactions. They are
generally the following (see the Exemption for more
information):
1) change in the composition or weighting of the index
by the independent organization creating and
maintaining the index;
2) A change in the overall level of investment in an
Indexed Account as a result of investments and
withdrawals on the account's opening date, where the
Account is a bank collective fund, or on any relevant
date for non-bank collective funds; provided,
however, a change in an Indexed Account resulting
from investments or withdrawals of assets of Mellon
Bank, N.A.'s own plans (other than Mellon Bank,
N.A.'s defined contribution plans under which
participants may direct among various investment
options, including Indexed Accounts) are excluded as
a "triggering event"; or
3) A recorded declaration by Mellon Bank, N.A. that an
accumulation of cash in an Indexed Account
attributable to interest or dividends on, and/or
tender offers for, portfolio securities equal to not
more than 0.5% of the Account's total value has
occurred.
III The pricing mechanism utilized for securities purchased or
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sold
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Securities will be valued at the current market value for the
securities on the date of the crossing transaction.
Equity securities - the current market value for the equity
security will be the closing price on the day of trading as
determined by an independent pricing service; unless the
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security was added to or deleted from an index after the close
of trading, in which case the price will be the opening price
for that security on the next business day after the
announcement of the addition or deletion.
Debt securities - the current market value of the debt
security will be the price determined by Mellon Bank, N.A. as
of the close of the day of trading according to the Securities
and Exchange Commission's Rule 17a-7(b)(4) under the
Investment Company Act of 1940. Debt securities that are not
reported securities or traded on an exchange will be valued
based on an average of the highest current independent bids
and the lowest current independent offers on the day of cross
trading. Mellon Bank, N.A. will use reasonable inquiry to
obtain such prices from at least three independent sources
that are brokers or market makers. If there are fewer than
three independent sources to price a certain debt security,
the closing price quotations will be obtained from all
available sources.
IV. The allocation methods
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Direct cross-trade opportunities will be allocated among
potential buyers or sellers of debt or equity securities on a
pro rata basis. With respect to equity securities, please note
Mellon Bank, N.A. imposes a trivial share constraint to reduce
excessive custody ticket charges to participating accounts.
V. Other procedures implemented by Mellon Bank, N.A. for its
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cross-trading practices
-----------------------
Mellon Bank, N.A. has developed certain internal operational
procedures for cross trading debt and equity securities. These
procedures are available upon request.
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